__________

Exhibit 10.2

 

 

 

 

 

CONSULTING SERVICES AGREEMENT

 

 

 

 

 

 

Between

:

 

DUMA ENERGY CORP.

 

 

And

:

 

HYDROCARB CORPORATION

 

 

 

 

Duma Energy Corp.

800 Gessner, Suite 200, Houston, Texas, U.S.A., 77024

__________

--------------------------------------------------------------------------------

CONSULTING SERVICES AGREEMENT

 

               THIS CONSULTING SERVICES AGREEMENT

(referred to herein as the "Agreement") is made and dated for reference as fully
executed on this 7th day of August, 2012.

 

BETWEEN

:

DUMA ENERGY CORP.

, a company incorporated under the
laws of the State of Nevada, U.S.A., and having an address for
notice and delivery located at 800 Gessner, Suite 200, Houston,
Texas, U.S.A., 77024

(the "Company");

OF THE FIRST PART

AND

:

HYDROCARB CORPORATION

, a company incorporated
under the laws of the State of Nevada, U.S.A., and having an
address for notice and delivery located at 1608 W. Pine Branch
Drive, Pearland, Texas, U.S.A., 77581

(the "Consultant");

OF THE SECOND PART

(the Company and the Consultant being hereinafter singularly also
referred to as a "Party" and collectively referred to as the
"Parties" as the context so requires).

 

WHEREAS

:

A.             The Company is a reporting company incorporated under the laws of
the State of Nevada, U.S.A., and has its common shares listed for trading on
FINRA's Over-the-counter Bulletin Board;

B.             The Consultant is a privately held company and is engaged in the
acquisition of upstream oil and gas assets, the Consultant has extensive
experience and related long-term investment with a resulting value of goodwill
built up in Africa, the Middle East and many other areas of the world that gives
it an advantage in finding and negotiating to acquire upstream oil and gas
properties that have potential for prolific oil and gas reserves and the Company
understands that the Consultant also invests itself heavily in upstream oil and
gas concessions around the world and nothing in this Agreement is meant to
preclude the Consultant's ability to make its own oil and gas investments in any
way it decides to at its sole discretion; provided, however, that the Consultant
expects to have opportunities to potentially provide additional farmin
opportunities that the Company may be interested in including, but not limited
to, the opportunity already presented to Namibia Exploration, Inc. ("NEI") in
the Republic of Namibia under the terms and conditions of that certain and
initial "Farmin Opportunity Report" (the "FOR"), as entered into between NEI and
the Consultant, where NEI has a right to acquire a working interest in the
Consultant's concession in the Republic of Namibia;

--------------------------------------------------------------------------------

- 2 -

C.             The Company is presently engaged in the business of seeking,
acquiring, exploring and developing oil and gas property interests of merit
worldwide (collectively, the "Business"), and the Company presently proposes to
acquire all of the issued and outstanding common stock of NEI from NEI's
shareholders pursuant to the terms and conditions of a certain "Share Exchange
Agreement" (the "Share Exchange Agreement"), as entered into between the
Company, NEI and NEI's shareholders, whereby the Company has thereby agreed to
satisfy, on behalf of NEI, all of the obligations of NEI to the Consultant
pursuant to the terms and conditions of that certain initial FOR, subject to the
terms and conditions contained herein;

D.             As a consequence and as intended by the terms and conditions of
the Share Exchange Agreement, the Company is hereby desirous of retaining the
Consultant on a non-exclusive basis as a consultant to the Company, and the
Consultant will provide various consulting services with respect to the
Company's Business ventures in Namibia in relation to the Company's contemplated
acquisition of NEI, such that the Consultant is hereby desirous of accepting
such arrangement in order to assist in the development of the Company's Business
in Namibia and possibly other oil concession opportunities in the future, as the
case may be and at the sole discretion of Consultant, resulting therefrom
(collectively, the "General Services");

E.             Since the introduction of NEI and the Company to the Consultant
the Parties acknowledge and agree that there have been various discussions,
negotiations, understandings and agreements between them relating to the terms
and conditions of the General Services and, in addition, relating to the
satisfaction of all obligations of NEI to the Consultant under the initial FOR;
which reflects fees to become due to Consultant of $2,400,000 subject to the
terms and conditions contained herein; understanding that there may be future
opportunities in addition to the initial FOR in Namibia to be evidenced by
additional Farmin Opportunity Reports (each herein a "FOR") potentially
submitted to the Company for consideration with each such future FOR having its
own additional associated consulting fees to be negotiated and agreed upon by
the Parties, understanding that neither the Company nor the Consultant is
required whatsoever to provide such additional opportunities or to agree to any
such additional compensation and, therefore, each future FOR, if any, is to be
its own separate negotiation and agreement with respect to accepting a farmin
opportunity should one be presented and agreeing to pay the offered fees for
such FOR should it be accepted by the Company or NEI, as the case may be; and

F.             The Parties have agreed to enter into this Agreement which
replaces, in its entirety, all such prior discussions, negotiations,
understandings and agreements, and, furthermore, which necessarily clarifies
their respective duties and obligations with respect to the within General
Services to be provided hereunder and to satisfy the obligations of NEI to the
Consultant under the initial FOR, all in accordance with the terms and
conditions of this Agreement.

 

               NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of
the mutual covenants and provisos herein contained, THE PARTIES AGREE AS
FOLLOWS:

 

Article 1
DEFINITIONS AND INTERPRETATION

1.1             Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the
following words and phrases shall have the following meanings:

--------------------------------------------------------------------------------

- 3 -

(a)     "Agreement" means this Consulting Services Agreement as from time to
time supplemented or amended by one or more agreements entered into pursuant to
the applicable provisions hereof, together with any Schedules attached hereto;

(b)     "Arbitration Act" means the U.S. Arbitration Act;

(c)     "Board of Directors" means the Board of Directors of Duma Energy Corp.
as duly constituted from time to time;

(d)     "Business" has the meaning ascribed to it in recital "C." hereinabove;

(e)     "business day" means any day during which the New York Stock Exchange is
open;

(f)     "Company" means Duma Energy Corp., a company incorporated under the laws
of the State of Nevada, U.S.A., or any successor company, however formed,
whether as a result of merger, amalgamation or other action;

(g)     "Consultant" means Hydrocarb Corporation, a company incorporated under
the laws of the State of Nevada, U.S.A., or any successor company, however
formed, whether as a result of merger, amalgamation or other action;

(h)     "Conversion Shares" has the meaning ascribed to it in section
"4.1(b)(ii)" hereinbelow;

(i)     "Effective Date" has the meaning ascribed to in section "3.1"
hereinbelow;

(j)     "Fee" has the meaning ascribed to it in section "4.1" hereinbelow;

(k)     "General Services" has the meaning ascribed to it in section "2.1"
hereinbelow;

(l)     "Holding" has the meaning ascribed to it in section "5.1" hereinbelow;

(m)     "Indemnified Party" has the meaning ascribed to it in section "8.1"
hereinbelow;

(n)     "Indemnitee" has the meaning ascribed to it in section "8.3"
hereinbelow;

(o)     "Initial Consultant Share" has the meaning ascribed to it in section
"4.1(a)(ii)" hereinbelow;

(p)     "Parties" or "Party" means, individually and collectively, the Company,
and/or the Consultant, as the context so requires, together with each of their
respective successors and permitted assigns as the context so requires;

(q)     "Promissory Note" has the meaning ascribed to it in section "4.1(b)"
hereinbelow;

(r)     "Property" has the meaning ascribed to it in section "6.4" hereinbelow;

(s)     "Regulatory Approval" means the acceptance for filing, if required, of
the transactions contemplated by this Agreement by the Regulatory Authorities;

(t)     "Regulatory Authorities" and "Regulatory Authority" means, either
collectively or singularly as the context so requires, such regulatory agencies
who have jurisdiction over the affairs of either of the Company and/or the
Consultant and including, without limitation, and where applicable, the United
States Securities and Exchange Commission and all regulatory authorities from
whom any such authorization, approval or other action is required to be obtained
or to be made in connection with the transactions contemplated by this
Agreement;

--------------------------------------------------------------------------------

- 4 -

(u)     "Securities Act" means the United States Securities Act of 1933, as
amended, and all the Rules and Regulations promulgated under the Securities Act;
and

(v)     "Term" has the meaning ascribed to it in section "3.1" hereinbelow.

1.2             Interpretation. For the purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

(a)     the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
section or other subdivision of this Agreement;

(b)     any reference to an entity shall include and shall be deemed to be a
reference to any entity that is a permitted successor to such entity; and

(c)     words in the singular include the plural and words in the masculine
gender include the feminine and neuter genders, and vice versa.

 

Article 2
GENERAL SERVICES AND DUTIES OF THE CONSULTANT

2.1             General Services. During the Term of this Agreement, however,
only up until the point of the Company receiving a completed assignment of at
least a 39% working interest in a Namibian oil and gas concession, which is the
primary non-guaranteed responsibility of Consultant, and, in addition, and also
during the Term of this Agreement, with regard to any future endeavors to find
and obtain other oil and gas concessions around the world, as the case may be,
and until such respective working interest assignments are completed as the case
may be, the Company hereby agrees to retain the Consultant as a consultant to
the Company and the Consultant hereby agrees to accept such position in order to
assist the Company with the development of its Business in Namibia and possibly
other areas of the world; provided, however, that the Consultant hereby provides
the Company with absolutely no guarantee, expressed or implied, of the ability
for the Company to acquire any such working interest assignments where the prior
authority of the Namibian government is required to be given before any working
interest assignment may be consummated and completed, and to be subject to the
direction and supervision of, and to have the authority as is delegated to the
Consultant by, the Board of Directors consistent with such position, as with
only regard to any authority surrounding negotiations and the official
presentment of the Company to any foreign country, which such Company
introductions and negotiations may come about during the process of the
Consultant to be vetting possible oil and gas deals with countries around the
world, with the intention to provide the Company with additional opportunity to
become a joint venture partner as defined solely by the Consultant, if any,
whereby the Parties both agree and understand that the Consultant is in the
business of obtaining, exploring and exploiting upstream oil and gas
opportunities around the world and nothing herein precludes the Consultant from
doing its business as the Consultant sees fit with total autonomy, and that the
Consultant has absolutely no obligation to provide any additional opportunities
to the Company for such similar working interest acquisition investments and is
not on call for services under this Agreement and, furthermore, it is understood
that Consultant works completely autonomously (with all of the above, being,
collectively, the "General Services" herein); it being expressly acknowledged
and agreed by the Parties that the Consultant shall initially commit and provide
to the Company the General Services as the Consultant solely determines to be
appropriate and during the continuance of this Agreement for which the Company,
as more particularly set forth hereinbelow, hereby agrees to pay the Consultant
the compensation as set forth in Articles "4" herein below for which such
compensation is for the assignment of the working interest completed in the
country of Namibia under the initial FOR thereby satisfying the obligations of
NEI to the Consultant under the initial FOR, and for assisting the Company with
its Business in Namibia, and whereby any additional compensation regarding any
other oil and gas concession opportunities around the world would have to be
separately negotiated and agreed to, whereby there is no obligation of either
Party to accept any offers for the Company or NEI, as the case may be, to buy
into any other oil and gas concession opportunity or the Consultant to provide
any additional opportunities.

--------------------------------------------------------------------------------

- 5 -

             In this regard it is hereby acknowledged with the limitations
outlined above and agreed that the Consultant shall be entitled to communicate
with and with regard only to issues specifically affecting the Company and shall
rely upon the immediate advice, direction and instructions of the President of
the Company, or upon the advice or instructions of such other director or
officer of Company as the President of the Company shall, from time to time,
designate in times of the President of the Company's absence, in order to
initiate, coordinate and implement the General Services as contemplated herein
subject, at all times, to the final direction and supervision of the Board of
Directors. To clarify the meaning of this paragraph, with regard to matters
effecting the Company's opportunities and possible relations to a particular
country, as may be presented by the Consultant to the Company in the future, the
Consultant will communicate and receive direction from the Company's President,
any Board of Director authorized officer or the entire Board of Directors with
regard to how to present the Company.

2.2             Adherence to rules and policies of the Company. Subject to the
limitations outlined hereinabove, the Consultant hereby acknowledges and agrees
to abide by the reasonable rules, regulations, instructions, personnel practices
and policies of the Company and any changes therein which may be adopted from
time to time by the same as such rules, regulations, instructions, personnel
practices and policies may be reasonably applied to the Consultant

as a consultant of the Company.

Article 3
TERM

3.1             Effectiveness and Term of the Agreement. The term of this
Agreement (the "Term") is for a period of two years commencing on August 7, 2012
(the "Effective Date"), after which Term this Agreement will immediately
terminate without any further act being required by any Party hereto.

 

Article 4
COMPENSATION OF THE CONSULTANT

4.1             Fee. It is hereby acknowledged and agreed that the fees due to
the Consultant for the General Services provided by the Consultant and to be
evidenced by an assignment of working interest in Namibia, whereby such fees
shall become due from the Effective Date of this Agreement and upon the
completion of the signature from Namibia's Minister of Mines and Energy on the
working interest assignment document associated with the initial FOR between NEI
and Consultant, evidencing the consent of Namibia's Minister of Mines and Energy
to the working interest assignment from Consultant to NEI, then aggregate
consulting fees of $2,400,000 (the "Fee") will become due and paid to the
Consultant in the following manner and the Consultant hereby agrees to accept
the Fee payment in the following manner and as compensation for the General
Services with respect only to the Namibia working interest acquisition and
assignment, and as satisfaction of NEI's obligations to the Consultant under the
initial FOR:

--------------------------------------------------------------------------------

- 6 -

(a)     by way of the payment on the later of the Effective Date and 15 days
from the receipt of the working interest assignment under the initial FOR to be
processed by the Consultant to be signed by Namibia's Minister of Mines and
Energy, by the Company to Consultant of $800,000 in either or both of the
following manners to be determined by the Company, in its sole and absolute
discretion, and disclosed to the Consultant prior to such payment:

(i)     by way of a cash payment by the Company to the Consultant;

(ii)    only, if at the time of payment, the Company has available authorized
common stock to issue, by way of the issuance by the Company to the Consultant
of any amount of restricted common shares determined by dividing $800,000 by the
calculated previous 60-day volume-weighted average trading price of the
Company's common shares on the Over-the-Counter Bulletin Board, or as reported
on a national securities exchange or quotation system on which the Company's
common shares are quoted and listed for trading. For calculation purposes the
closing prices on Yahoo's historical prices for the Company may be used. (each
an "Initial Consultant Share"); or

(iii)   in any combination of paragraphs "(i)" and "(ii)" immediately above; and

(b)     for the remaining $1,600,000 by way of the issuance of a promissory note
in favor of the Consultant in the principal amount of $1,600,000 (the
"Promissory Note"), with interest accruing on the principal amount at the rate
of 5% per annum, calculated semi-annually and payable in arrears, and of which
$800,000 of the principal amount plus accrued interest is due on or before the
first anniversary of the Effective Date and the remaining $800,000 of the
principal amount plus accrued interest is due on or before the second
anniversary of the Effective Date. In this regard the Company has the option,
from time to time, and in its sole and absolute discretion at any time:

(i)     to repay the principal amount and any accrued but unpaid interest due
under the Promissory Note in full or in part at any time prior to maturity or at
maturity in cash;

(ii)    only if at the time of payment, the Company has available authorized
common stock to issue, to repay the principal amount and any accrued but unpaid
interest due under the Promissory Note in full or in part at any time prior to
maturity or at maturity in restricted common shares of common stock of the
Company (each a "Conversion Share"), at a deemed conversion price which equates
to the then previous 60-day volume-weighted average trading price of the
Company's common shares on the Over-the-Counter Bulletin Board, or as reported
on a national securities exchange or quotation system on which the Company's
common shares are quoted or listed for trading; or

--------------------------------------------------------------------------------

- 7 -

(iii)   to repay the principal amount and any accrued but unpaid interest due
under the Promissory Note in full or in part at any time prior to maturity or at
maturity in any combination of paragraphs "(i)" and "(ii)" immediately above.

             In this regard it is hereby acknowledged and agreed that a late fee
of 10% per quarter of any outstanding balance of any Fee under this Agreement
will commence 30 calendar days from the date that any Fee or portion of Fee is
due hereunder. All late fees may be paid only in cash.

4.2             Payment of Fee and status as a non-taxable consultant. It is
hereby also

acknowledged and agreed that the Consultant will be classified as a non-taxable
consultant of the Company for all purposes, such that all compensation which is
provided by the Company to the Consultant under this Agreement, or otherwise,
will be calculated on the foregoing and gross Fee basis and otherwise for which
no statutory taxes will first be deducted by the Company.

4.3             Resale restrictions of the Initial Consultant Share and the
Conversion Share certificates. The Consultant hereby agrees and acknowledges
that the Company makes no representations as to any resale or other restriction
affecting any of Initial Consultant Shares and the Conversion Shares that may be
issued to the Consultant and that it is presently contemplated that the Initial
Consultant Shares and the Conversion Shares, if any, will be issued by the
Company to the Consultant in reliance upon the registration and prospectus
exemptions contained in certain sections of the Securities Act or Rule 506 of
Regulation D promulgated under the Securities Act, which will be restricted
securities under Rule 144(a)(3) and will impose a trading restriction in the
United States on the Initial Consultant Shares and the Conversion Shares from
the date of the issuance of the Promissory Note. The Company will cause its
legal counsel at the Company's cost to provide the Consultant with a Rule 144
resale legal opinion as soon as reasonably practicable and as long as resale of
the Initial Consultant Shares and the Conversion Shares is available under Rule
144 to the Consultant.

4.4             Representations, warranties and covenants by the Consultant
respecting the Initial Consultant Shares and the Conversion Shares. The
allotment and issuance of any Initial Consultant Shares and Conversion Shares
will be subject to the representations, warranties and covenants as set forth in
Schedule "A" attached hereto, and which form a material part hereof, and which
are acknowledged and agreed by the Consultant as being true and correct in all
material respects as of the date of the issuance of any Initial Consultant
Shares and Conversion Shares as a consequence of the execution of this Agreement
by the Consultant.

             

In addition, immediately prior to the allotment and issuance of any Initial
Consultant Shares and Conversion Shares, the Consultant will be required to
complete and sign the Certificate for U.S. Accredited Investors in the form
which is attached hereto as Schedule "B" and forms a material part hereof.

 

Article 5
DISCLOSURE OF FIRST INTEREST

5.1             It is the intent and business of the Consultant to continually
be in search of new upstream oil and gas concession opportunities around the
world. Under an agreement for strict confidentiality, while this Agreement
remains in effect, the Consultant agrees to keep the Company abreast of the
details pertaining to opportunities that it has obtained rights for acquiring
oil and gas concessions and the Company may always propose an interest to the
Consultant on opportunities that it becomes interested to participate in. The
Consultant may likewise provide additional FOR's for the Company to consider and
for the Parties to agree on the terms of an additional farmin and consulting
fees that may be required under any additional FORs. Nothing herein would
otherwise prevent a joint venture between the Parties should both Parties agree
on the terms, however, the Consultant will maintain the right not to provide an
opportunity or to negotiate on any particular deal with the Company if for any
reason the Consultant decides that it is not a good fit for any reason at the
Consultant's sole discretion.

--------------------------------------------------------------------------------

- 8 -

 

Article 6
ADDITIONAL OBLIGATIONS OF THE CONSULTANT

6.1             Reporting. The Consultant will keep the Board of Directors
informed of any progress of the Consultant's General Services and activities
hereunder and subject to all limitations considered hereinabove. However, there
is no specific requirement for the Consultant to provide any additional farmin
opportunities to the Company and the Consultant will operate its search for new
opportunities with complete autonomy.

6.2             Opinions, reports and advice of the Consultant. The Consultant
acknowledges and agrees that with regard to any oil and gas concessions for
which the Company becomes a working interest partner, all written and oral
opinions, reports, advice and materials provided by the Consultant to the
Company in connection with the Consultant's engagement hereunder and any follow
on assignments and resulting operating agreements, are intended solely for all
the ultimate working interest partners together with the Company only if the
Company becomes a working interest partner, and of which such information will
always be managed by the operator of each and every specific oil and gas venture
according to industry standards and there will be in-part benefits for the
Company's use for any such written and oral opinions, reports, advice and
information as they are for the benefit of the operator, the Company as a
working interest partner, and any other working interest partners as the case
may be. In the case of the Namibia concession under the initial FOR as referred
to herein, the Consultant's subsidiary will hold a majority interest in the
concession and will remain its operator.

             Nothing herein will give the Company the right to disseminate
information without the expressed agreement of the Consultant for which
permission will not be unreasonably withheld and the Consultant agrees to
quickly respond to any request from the Company as the disclosure of certain
information is time sensitive.

6.3             Consultant's business conduct. The Consultant warrants that the
Consultant shall conduct the business and other activities in a manner which is
lawful and reputable and which brings good repute to the Company, its business
interests and the Consultant. In particular, and in this regard, the Consultant
specifically warrants to provide the General Services in a sound and
professional manner such that the same meets superior standards of performance
quality within the standards of the industry.

 

Article 7
ADDITIONAL OBLIGATIONS OF THE PARTIES

7.1             Confidentiality. Each Party will not, except as authorized or
required by its respective duties and obligations hereunder, reveal or divulge
to any person, company or entity any information concerning the respective
organization, business, finances, transactions or other affairs of the other
Party, or of any of the other Party's respective subsidiaries, which may come to
the Party's knowledge during the continuance of this Agreement, and each Party
will keep in complete secrecy all confidential information entrusted to the
Party.

--------------------------------------------------------------------------------

- 9 -

7.2             Compliance with applicable laws. Each Party will comply with all
U.S. and foreign laws, whether federal, provincial or state, applicable to its
respective duties and obligations hereunder and, in addition, hereby represents
and warrants that any information which the Party may provide to any person or
company hereunder will, to the best of the Party's knowledge, information and
belief, be accurate and complete in all material respects and not misleading,
and will not omit to state any fact or information which would be material to
such person or company.

 

Article 8
INDEMNIFICATION AND LEGAL PROCEEDINGS

8.1             Indemnification. The Parties hereby each agree to indemnify and
save harmless the other Party and including, where applicable, their respective
subsidiaries and affiliates and each of their respective directors, officers,
consultants and agents (each such party being an "Indemnified Party") harmless
from and against any and all losses, claims, actions, suits, proceedings,
damages, liabilities or expenses of whatever nature or kind and including,
without limitation, any investigation expenses incurred by any Indemnified
Party, to which an Indemnified Party may become subject by reason of the terms
and conditions of this Agreement.

8.2             No indemnification. This indemnity will not apply in respect of
an Indemnified Party in the event and to the extent that a Court of competent
jurisdiction in a final judgment shall determine that the Indemnified Party was
grossly negligent or guilty of willful misconduct.

8.3             Notice of claim. In case any action is brought against an
Indemnified Party in respect of which indemnity may be sought against either of
the Parties (said Party then being the "Indemnitee"), the Indemnified Party will
give both Parties prompt written notice of any such action of which the
Indemnified Party has knowledge and the Indemnitee will undertake the
investigation and defense thereof on behalf of the Indemnified Party, including
the prompt employment of counsel acceptable to the Indemnified Party affected
and the Indemnitee and the payment of all expenses. Failure by the Indemnified
Party to so notify shall not relieve the Indemnitee of such Indemnitee's
obligation of indemnification hereunder unless (and only to the extent that)
such failure results in a forfeiture by the Indemnitee of substantive rights or
defenses.

8.4             Settlement. No admission of liability and no settlement of any
action shall be made without the consent of each of the Parties and the consent
of the Indemnified Party affected, such consent not to be unreasonable withheld.

8.5             Legal proceedings. Notwithstanding that the Indemnitee will
undertake the investigation and defense of any action, an Indemnified Party will
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel will be at the
expense of the Indemnified Party unless:

(a)     such counsel has been authorized by the Indemnitee;

(b)     the Indemnitee has not assumed the defense of the action within a
reasonable period of time after receiving notice of the action;

(c)     the named parties to any such action include that any Party and the
Indemnified Party shall have been advised by counsel that there may be a
conflict of interest between any Party and the Indemnified Party; or

(d)     there are one or more legal defenses available to the Indemnified Party
which are different from or in addition to those available to any Party.

--------------------------------------------------------------------------------

- 10 -

8.6             Contribution. If for any reason other than the gross negligence
or bad faith of the Indemnified Party being the primary cause of the loss claim,
damage, liability, cost or expense, the foregoing indemnification is unavailable
to the Indemnified Party or insufficient to hold them harmless, the Indemnitee
shall contribute to the amount paid or payable by the Indemnified Party as a
result of any and all such losses, claim, damages or liabilities in such
proportion as is appropriate to reflect not only the relative benefits received
by the Indemnitee on the one hand and the Indemnified Party on the other, but
also the relative fault of the Indemnitee and the Indemnified Party and other
equitable considerations which may be relevant. Notwithstanding the foregoing,
the Indemnitee shall in any event contribute to the amount paid or payable by
the Indemnified Party, as a result of the loss, claim, damage, liability, cost
or expense (other than a loss, claim, damage, liability, cost or expenses, the
primary cause of which is the gross negligence or bad faith of the Indemnified
Party), any excess of such amount over the amount of the fees actually received
by the Indemnified Party hereunder.

 

Article 9
FORCE MAJEURE

9.1             Events. If either Party is at any time either during this
Agreement or thereafter prevented or delayed in complying with any provisions of
this Agreement by reason of strikes, walk-outs, labour shortages, power
shortages, fires, wars, acts of God, earthquakes, storms, floods, explosions,
accidents, protests or demonstrations by environmental lobbyists or native
rights groups, delays in transportation, breakdown of machinery, inability to
obtain necessary materials in the open market, unavailability of equipment,
governmental regulations restricting normal operations, shipping delays or any
other reason or reasons beyond the control of that Party, then the time limited
for the performance by that Party of its respective obligations hereunder shall
be extended by a period of time equal in length to the period of each such
prevention or delay.

9.2             Notice. A Party shall within three calendar days give notice to
the other Party of each event of force majeure under section "9.1" hereinabove,
and upon cessation of such event shall furnish the other Party with notice of
that event together with particulars of the number of days by which the
obligations of that Party hereunder have been extended by virtue of such event
of force majeure and all preceding events of force majeure.

 

Article 10
ARBITRATION

10.1           Matters for arbitration. Except for matters of indemnity or in
the case of urgency to prevent material harm to a substantive right or asset,
the Parties agree that all questions or matters in dispute with respect to this
Agreement shall be submitted to arbitration pursuant to the terms hereof. This
provision shall not prejudice a Party from seeking a Court order or assistance
to garnish or secure sums or to seek summary remedy for such matters as counsel
may consider amenable to summary proceedings.

10.2           Notice. It shall be a condition precedent to the right of any
Party to submit any matter to arbitration pursuant to the provisions hereof that
any Party intending to refer any matter to arbitration shall have given not less
than five business days' prior written notice of its intention to do so to the
other Parties together with particulars of the matter in dispute. On the
expiration of such five business days the Party who gave such notice may proceed
to refer the dispute to arbitration as provided for in section "10.3"
hereinbelow.

--------------------------------------------------------------------------------

- 11 -

10.3           Appointments. The Party desiring arbitration shall appoint one
arbitrator, and shall notify the other Parties of such appointment, and the
other Parties shall, within five business days after receiving such notice,
appoint an arbitrator, and the two arbitrators so named, before proceeding to
act, shall, within five business days of the appointment of the last appointed
arbitrator, unanimously agree on the appointment of a third arbitrator, to act
with them and be chairperson of the arbitration herein provided for. If the
other Parties shall fail to appoint an arbitrator within five business days
after receiving notice of the appointment of the first arbitrator, and if the
two arbitrators appointed by the Parties shall be unable to agree on the
appointment of the chairperson, the chairperson shall be appointed in accordance
with the Arbitration Act. Except as specifically otherwise provided in this
section, the arbitration herein provided for shall be conducted in accordance
with such Arbitration Act. The chairperson, or in the case where only one
arbitrator is appointed, the single arbitrator, shall fix a time and place in
Harris County, Texas, USA for the purpose of hearing the evidence and
representations of the Parties, and the chairperson shall preside over the
arbitration and determine all questions of procedure not provided for by the
Arbitration Act or this section. After hearing any evidence and representations
that the Parties may submit, the single arbitrator, or the arbitrators, as the
case may be, shall make an award and reduce the same to writing, and deliver one
copy thereof to each of the Parties. The expense of the arbitration shall be
paid as specified in the award.

10.4           Award. The Parties agree that the award of a majority of the
arbitrators, or in the case of a single arbitrator, of such arbitrator, shall be
final and binding upon each of them.

 

Article 11
GENERAL PROVISIONS

11

.1           No assignment. This Agreement may not be assigned by any Party
except with the prior written consent of the other Parties.

11.2           Notice. Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and shall be sent
by prepaid registered mail deposited in a recognized post office and addressed
to the Party entitled to receive the same, or delivered to such Party, at the
address for such Party specified on the front page of this Agreement. The date
of receipt of such notice, demand or other communication shall be the date of
delivery thereof if delivered, or, if given by registered mail as aforesaid,
shall be deemed conclusively to be the third business day after the same shall
have been so mailed, except in the case of interruption of postal services for
any reason whatsoever, in which case the date of receipt shall be the date on
which the notice, demand or other communication is actually received by the
addressee. Any Party may at any time and from time to time notify the other
Parties in writing of a change of address and the new address to which notice
shall be given to it thereafter until further change.

11.3           Time of the essence. Time will be of the essence of this
Agreement.

11.4           Enurement. This Agreement will enure to the benefit of and will
be binding upon the Parties and their respective heirs, executors,
administrators and assigns.

11.5           Currency. Unless otherwise stipulated, all payments required to
be made pursuant to the provisions of this Agreement and all money amount
references contained herein are in lawful currency of the United State of
America.

11

.6           Further assurances. The Parties will from time to time after the
execution of this Agreement make, do, execute or cause or permit to be made,
done or executed, all such further and other acts, deeds, things, devices and
assurances in law whatsoever as may be required to carry out the true intention
and to give full force and effect to this Agreement.

--------------------------------------------------------------------------------

- 12 -

11.7           Representation and costs. It is hereby acknowledged by each of
the Parties that McMillan LLP, Lawyers - Patent & Trade Mark Agents, acts solely
for the Company, and, correspondingly, that the Consultant has been required by
each of McMillan LLP and the Company to obtain independent legal advice with
respect to its review and execution of this Agreement. In addition, it is hereby
further acknowledged and agreed by the Parties that McMillan LLP, and certain or
all of its principal owners or associates, from time to time, may have both an
economic or shareholding interest in and to Company and/or a fiduciary duty to
the same arising from either a directorship, officership or similar relationship
arising out of the request of the Company for certain of such persons to act in
a similar capacity while acting for the Company as counsel. Correspondingly, and
even where, as a result of this Agreement, the consent of each Party to the role
and capacity of McMillan LLP, and its principal owners and associates, as the
case may be, is deemed to have been received, where any conflict or perceived
conflict may arise, or be seen to arise, as a result of any such capacity or
representation, each Party acknowledges and agrees to, once more, obtain
independent legal advice in respect of any such conflict or perceived conflict
and, consequent thereon, McMillan LLP, together with any such principal owners
or associates, as the case may be, shall be at liberty at any time to resign any
such position if it or any Party is in any way affected or uncomfortable with
any such capacity or representation. Each Party to this Agreement will also bear
and pay its own costs, legal and otherwise, in connection with its respective
preparation, review and execution of this Agreement and, in particular, that the
costs involved in the preparation of this Agreement, and all documentation
necessarily incidental thereto, by McMillan LLP, shall be at the cost of the
Company.

11.8           Applicable law. The situs of this Agreement is Harris County,
Texas, USA, and for all purposes this Agreement will be governed exclusively by
and construed and enforced in accordance with the laws and Courts prevailing in
Harris County, Texas USA.

11.9           Severability and construction. Each Article, section, paragraph,
term and provision of this Agreement, and any portion thereof, shall be
considered severable, and if, for any reason, any portion of this Agreement is
determined to be invalid, contrary to or in conflict with any applicable present
or future law, rule or regulation in a final unappealable ruling issued by any
court, agency or tribunal with valid jurisdiction in a proceeding to which any
Party is a party, that ruling shall not impair the operation of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise
intelligible (all of which shall remain binding on the Parties and continue to
be given full force and effect as of the date upon which the ruling becomes
final).

11.10         Captions. The captions, section numbers and Article numbers
appearing in this Agreement are inserted for convenience of reference only and
shall in no way define, limit, construe or describe the scope or intent of this
Agreement nor in any way affect this Agreement.

11.11         Counterparts. This Agreement may be signed by the Parties in as
many counterparts as may be necessary, and via facsimile if necessary, each of
which so signed being deemed to be an original and such counterparts together
constituting one and the same instrument and, notwithstanding the date of
execution, being deemed to bear the Effective Date as set forth in section "3.1"
hereinabove.

11.12         No partnership or agency. The Parties have not created a
partnership and nothing contained in this Agreement shall in any manner
whatsoever constitute any Party the partner, agent or legal representative of
the other Parties, nor create any fiduciary relationship between them for any
purpose whatsoever.

--------------------------------------------------------------------------------

- 13 -

11.13         Consents and waivers. No consent or waiver expressed or implied by
either Party in respect of any breach or default by the other in the performance
by such other of its obligations hereunder shall:

(a)     be valid unless it is in writing and stated to be a consent or waiver
pursuant to this section;

(b)     be relied upon as a consent to or waiver of any other breach or default
of the same or any other obligation;

(c)     constitute a general waiver under this Agreement; or

(d)     eliminate or modify the need for a specific consent or waiver pursuant
to this section in any other or subsequent instance.

 

             IN WITNESS WHEREOF

the Parties have hereunto set their respective hands and seals as at the
Effective Date as hereinabove determined.

The COMMON SEAL of
DUMA ENERGY CORP.,
the Company herein, was hereunto affixed

in the presence of:

/s/ Jeremy Driver        
Authorized Signatory

)
)
)
)
)
)
)
)

(C/S)

     

The COMMON SEAL of
HYDROCARB CORPORATION,
the Consultant herein, was hereunto affixed

in the presence of:

/s/ Kent Watts           
Authorized Signatory

)
)
)
)
)
)
)
)

(C/S)

     

 

__________

 

--------------------------------------------------------------------------------

Schedule A

 

 

               This is Schedule "A" to that certain Consulting Services
Agreement as entered into among the Company (Duma Energy Corp.) and the
Consultant (Hydrocarb Corporation).

 

Representations, warranties and covenants by the Consultant
respecting the Initial Consultant Shares and the Conversion Shares

             The Consultant hereby represents to, warrants to and covenants with
the Company, with the intent that the Company will also rely thereon in entering
into the Consulting Services Agreement and in issuing any Initial Consultant
Shares or Conversion Shares (collectively, the "Shares" herein), that, to the
best of the knowledge, information and belief of the Consultant, after having
made due inquiry:

(a)     the Consultant acknowledges that the Shares will be issued under certain
exemptions from the registration and prospectus filing requirements otherwise
applicable under the Securities Act and all applicable securities laws, and
that, as a result, the Consultant may be restricted from using most of the
remedies that would otherwise be available to the Consultant, the Consultant
will not receive information that would otherwise be required to be provided to
the Consultant and the Company is relieved from certain obligations that would
otherwise apply to the Company, in either case, under applicable securities
legislation;

(b)     the Consultant realizes that the issuance of the Shares in exchange for
indebtedness owing to the Consultant will be a highly speculative investment and
that the Consultant should be able, without impairing the Consultant's financial
condition, to hold the Shares for an indefinite period of time and to suffer a
complete loss on such investment. In addition, the Consultant has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of the prospective investment;

(c)     the Consultant has not received, nor has the Consultant requested, nor
does the Consultant require to receive, any offering memorandum or a similar
document describing the business and affairs of the Company in order to assist
the Consultant in entering into this Consulting Services Agreement and in
consummating the transactions contemplated therein;

(d)     the Consultant is a "U.S. Person", as that term is defined in Regulation
S promulgated under the Securities Act, then the Consultant hereby certifies
that:

(i)     it qualifies as an "accredited investor" as that term is defined under
Rule 501 of Regulation D promulgated under the Securities Act, as amended;

(ii)    it is receiving the Shares solely for its own account for investment and
not with a view to or for sale or distribution of the Shares or any portion
thereof and not with any present intention of selling, offering to sell or
otherwise disposing of or distributing the Shares or any portion thereof in any
transaction other than a transaction exempt from registration under the
Securities Act;

--------------------------------------------------------------------------------

- 2 -

(iii)   the entire legal and beneficial interest in the Shares it is receiving
is being acquired for, and will be held for the account of, itself only and
neither in whole nor in part for any other person;

(iv)    it understands that: (A) neither the sale of the Shares which it is
receiving nor the Shares themselves have been registered under the Securities
Act or any state securities laws, and the Shares must be held indefinitely
unless subsequently registered under the Securities Act or an exemption from
such registration is available; and (B) the share certificate representing the
Shares will be stamped with the following legend (or substantially equivalent
language) restricting transfer:

"The securities represented by this certificate have not been registered under
the United States Securities Act of 1933, as amended (the "U.S. Securities Act")
or applicable state securities laws. They may not be sold, offered for sale,
pledged or otherwise transferred except pursuant to an effective registration
statement under the U.S. Securities Act and in accordance with any applicable
state securities laws, or pursuant to an exemption or exclusion from
registration under the U.S. Securities Act and any applicable state securities
laws."; and

(v)     the Consultant will complete and provide the Company with an executed
copy of the attached form of "U.S. Accredited Investor Certificate"; which is
attached hereto with Schedule "B" and which forms a material hereof;
contemporaneously with the Consultant's execution of this Agreement at or before
the Effective Date;

(e)     the Consultant has no contract, undertaking, agreement or arrangement
with any person to sell, transfer or pledge to such person, or anyone else, the
Shares, or any part thereof, or any interest therein, and the Consultant has no
present plans to enter into any such contract, undertaking, agreement or
arrangement;

(f)     the Consultant acknowledges that the Company has not and will not file a
registration statement under the Securities Act in respect of the Shares, that
it has not been supplied with any of the information that would be found in a
registration statement if the Shares were registered under the Securities Act
and that there will be substantial restrictions on the transferability of, and
that it may not be possible to liquidate the Shares;

(g)     the Consultant understands and agrees that there may be material tax
consequences to the Consultant of an acquisition, holding or disposition of the
Shares. The Company gives no opinion and makes no representation with respect to
the tax consequences to the Consultant under United States, state, local or
foreign tax law of its acquisition, holding or disposition of such securities,
and the Consultant acknowledges that it is solely responsible for determining
the tax consequences of its investment; and

(h)     the Consultant is not aware of any fact or circumstance which has not
been disclosed to the Company which should be disclosed in order to prevent the
representations and warranties contained in this Schedule "A" from being
misleading or which would likely affect the decision of the Company to enter
into this Consulting Services Agreement.

__________

--------------------------------------------------------------------------------

Schedule B

 

 

               This is Schedule "B" to that certain Consulting Services
Agreement as entered into among the Company (Duma Energy Corp.) and the
Consultant (Hydrocarb Corporation).

 

U.S. Accredited Investor Certificate

Refer to the form of U.S. Accredited Investor Certificate attached hereto

.

__________

 

--------------------------------------------------------------------------------

U.S. ACCREDITED INVESTOR CERTIFICATE

To:     DUMA ENERGY CORP.

               Capitalized terms used but not otherwise defined in this
Certificate shall have the meanings given to such terms in that certain
Consulting Services Agreement dated August 7, 2012 (the "Agreement") among the
undersigned (the "Consultant") and Duma Energy Corp. (the "Company").

               In connection with the issuance of the Initial Consultant Shares
and/or any Conversion Shares to the undersigned, the undersigned hereby
represents, warrants, covenants and certifies that the undersigned is a U.S.
Person (as such term is defined by Rule 902 of Regulation S promulgated under
the Securities Act) and is an "Accredited Investor" as defined in Rule 501(a) of
Regulation D under the Securities Act as a result of satisfying one or more of
the following categories of Accredited Investor below to which the undersigned
has affixed his/her/its initials:

______

Category 1.

A bank, as defined in Section 3(a)(2) of the United States Securities Act of
1933 (the "U.S. Securities Act"), whether acting in its individual or fiduciary
capacity; or

______

Category 2.

A savings and loan association or other institution as defined in Section
3(a)(5)(A) of the U.S. Securities Act, whether acting in its individual or
fiduciary capacity; or

______

Category 3.

A broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934; or

______

Category 4.

An insurance company as defined in Section 2(a)(13) of the U.S. Securities Act;
or

______

Category 5.

An investment company registered under the Investment Company Act of 1940; or

______

Category 6.

A business development company as defined in Section 2(a)(48) of the Investment
Company Act of 1940; or

______

Category 7.

A small business investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958; or

______

Category 8.

A plan established and maintained by a state, its political subdivision or any
agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, with assets in excess of US$5,000,000; or

______

Category 9.

An employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 in which the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act, which is either a bank,
savings and loan association, insurance company or registered investment
advisor, or an employee benefit plan with total assets in excess of US$5,000,000
or, if a self-directed plan, the investment decisions are made solely by persons
who are accredited investors; or

--------------------------------------------------------------------------------

- 2 -

 

 

______

Category 10.

A private business development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940; or

______

Category 11.

An organization described in Section 501(c)(3) of the Internal Revenue Code, a
corporation, a Massachusetts or similar business trust, or a partnership, not
formed for the specific purpose of acquiring the Purchased Securities, with
total assets in excess of US$5,000,000; or

______

Category 12.

A director, executive officer or general partner of the Purchaser; or

______

Category 13.

A natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of purchase, exceeds US$1,000,000 (for the purposes
of calculating net worth, (i) the person's primary residence shall not be
included as an asset; (ii) indebtedness that is secured by the person's primary
residence, up to the estimated fair market value of the primary residence at the
time of this certification, shall not be included as a liability (except that if
the amount of such indebtedness outstanding at the time of this certification
exceeds the amount outstanding 60 days before such time, other than as a result
of the acquisition of the primary residence, the amount of such excess shall be
included as a liability); and (iii) indebtedness that is secured by the person's
primary residence in excess of the estimated fair market value of the primary
residence shall be included as a liability); or

______

Category 14.

A natural person who had an individual income in excess of US$200,000 in each
year of the two most recent years or joint income with that person's spouse in
excess of US$300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year; or

______

Category 15.

A trust, with total assets in excess of US$5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as described in SEC Rule 506(b)(2)(ii); or

______

Category 16.

An entity in which each of the equity owners meets the requirements of one of
the above categories.

         Dated: ________________________, 2012.

__________________________________________
Print name of Consultant

By:_______________________________________
     Signature
     _______________________________________
     Title
     _______________________________________
     (Please print name of individual whose
     signature appears above, if different from name
     of Consultant printed above)

__________