As filed with the Securities and Exchange Commission on February 26, 1999
Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POWER EXPLORATION, INC.
_____________________________________________________________________________
(Exact name of registrant as specified in its charter)
NEVADA 84-0811647
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Consulting Agreement with
DDW & ASSOC.
______________________________________________________________________________
(Full title of the plan)
Warren Soloski, 11300 W. Olympic, Suite 800, Los Angeles, California 90064
(Name and Address of Agent for Service)
(310) 477-9742
(Telephone number including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Securities Amount of Offering Aggregate Amount
Securities to be Registered Shares to be Price Per Offering of Reg.
Registered Share Price Fee(2)
$.02 par value Common 400,000 $0.95 $380,000 $105.64
Stock
Totals 400,000 $0.95 $380,000 $105.64
_________________________________________________________________________
Total No. of pages: 23 Exhibit Index on Page No: 14
_____________________
(1) Pursuant to Rule 416(c) promulgated under the Securities Act of 1933,
as amended, the Registration Statement also covers an indeterminate amount of
Shares to be offered or sold as a result of any adjustments from stock splits,
stock dividends or similar events.
(2) Based upon the average bid and asked prices of the Company's Common
Stock in over-the-counter trading on February 23, 1999.
<PAGE>
PROSPECTUS
POWER EXPLORATION, INC.
5020 Collinwood Ave., Suite 201
Fort Worth, Texas 76107
(817) 377-4464
(400,000 SHARES OF COMMON STOCK)
This Prospectus relates to the offer and sale by POWER EXPLORATION, INC.,
("PWRX"), a Nevada corporation ("the Company") of shares of its $0.02 par value
common stock (the "Common Stock) to certain consultants of the Company (the
"Consultants") pursuant to agreements entered into between the Company and the
Consultants. The Company is registering hereunder and then issuing upon receipt
of adequate consideration therefor to the Consultants 400,000 shares of the
Common Stock in consideration for services rendered and to be rendered under
the agreements.
The Common Stock is not subject to any restriction on transferability.
Recipients of shares other than persons who are affiliates of the Company within
the meaning of the Securities Act of A (the Act) may sell all or part of the
shares in any way permitted by law including sales in the over-the-counter
market at prices prevailing at the time of such sale. None of the shares
registered hereunder are being sold to anyone who is an affiliate of the
Company. An affiliate is, summarily, any director, executive officer or
controlling shareholder of the Company. The affiliates of the Company may become
subject to Section 16(b) of the Securities Exchange Act of 1934 as amended (the
Exchange Act) which would limit their discretion in transferring the shares
acquired in the Company. If the Consultant who is not now an affiliate becomes
an affiliate of the Company in the future; he would then be subject to Section
I(b) of the Exchange Act (See General Information --- Restrictions on Resale).
The Common Stock is Listed on the OTC bulletin board under the symbol PWRX.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is February 24, 1999.
<PAGE>
This Prospectus is part of a Registration Statement which was filed and
been effective under the Securities Act of 1933 as amended (the Securities Act)
and does not contain all of the information set forth in the Registration
Statement, certain portions of which have been offered pursuant to the rules and
regulations promulgated by the U.S. Securities and Exchange Commission (The
Commission) under the Securities Act. The statements in this Prospectus as to
the contents of any contracts or other documents filed as an exhibit to either
the Registration Statement or other filings of the Company with the Commission
are qualified in their entirety by the reference thereto.
A copy of any document or part thereof incorporated by reference in this
Prospectus but not delivered herewith will be furnished without charge upon
written or oral request. Requests should be addressed to: POWER EXPLORATION,
INC., 5020 Collinwood Ave., Suite 201, Fort Worth, Texas 76107, telephone (817)
377-4464.
The Company is subject to the reporting requirements of the Exchange Act
and in accordance therewith files reports and other information with the
Commission. These reports as well as the proxy statements information statements
and other information filed by the Company under the Exchange Act may be
reviewed and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street N.C. Washington D.C. 20549. Copies my be
obtained at the prescribed rates. In addition the Common Stock is quoted on the
automated quotation system maintained by the National Association of Securities
Dealers, Inc. (NASD). Thus copies of these reports, proxy statements,
information statements and other information may also be examined at the offices
of the NASD at 1735 K Street N.C. Washington DC 20549.
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and if given or
made, such other information or representation must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer or
a solicitation by anyone in any state in which such is not authorized or in
which the person making such is not qualified or to any one to whom it is
unlawful to make an offer or solicitation
Neither the delivery of this Prospectus nor any sale made hereunder shall
under any circumstances create any implication that there has not been a change
in the affairs of the Company since the date hereof.
<PAGE>
TABLE OF CONTENTS
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS 7
ITEM 1. PLAN lNFORMATION 7
GENERAL lNFORMATION 7
The Company 7
Purpose 7
Common Stock 7
The Consultants 7
No Restrictions on Transfer 7
Tax Treatment to the Consultant 7
Tax Treatment to the Company 8
Restrictions on Resales 8
DOCUMENTS INCORPORATED BY REFERENCE AND ADDITIONAL INFORMATION 8
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
Legal Opinion and Experts 9
Indemnification of Officers and Directors 9
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT 9
ITEM 3. lNCORPORATION OF DOCUMENTS BY REFERENCE 9
ITEM 4. DESCRIPTION OF SECURITIES 10
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL 10
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS 10
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED 11
ITEM 8. EXHIBITS 11
ITEM 9. UNDERTAKINGS 11
EXHIBIT INDEX 14
<PAGE> PART 1
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
GENERAL INFORMATION
The Company
The Company has its principal offices at 5020 Collinwood Ave., Suite 201,
Fort Worth, Texas 76107, telephone (817) 377-4464.
Purposes
The Common Stock will be issued by the Company pursuant to an agreement
entered into between the Consultants and the Company and approved by the Board
of Directors of the Company (the "Board of Directors"). The agreements are
intended to provide a method whereby the Company may be stimulated by the
personal involvement of the Consultants in the Company's future prosperity,
thereby advancing the interests of the Company, and all of its shareholders. A
copy of the agreement has been filed as an exhibit to this Registration
Statement.
Common Stock
The Board has authorized the issuance of up to 400,000 shares of the Common
stock to the Consultants upon effectiveness of this Registration Statement.
The Consultants
The Consultants have agreed to provide their expertise and advice to the
Company on a non-exclusive basis for the purpose of promoting the interests of
the Company.
No Restrictions on Transfer
The Consultants will become the record and beneficial owners of the shares
of Common Stock upon issuance and delivery and are entitled to all of the rights
of ownership, including the right to vote any shares awarded and to receive
ordinary cash dividends on the Common Stock.
Tax Treatment to the Consultant
The Common Stock is not qualified under Section 401(a) of the Internal
Revenue Code. The Consultant, therefore, will be deemed for federal income tax
purposes to recognize ordinary income during the taxable year in which the first
of the following events occurs: (a) the shares become freely transferable, or
(b) the shares cease to be subject to a substantial risk of forfeiture.
Accordingly, the Consultant will receive compensation taxable at ordinary rates
equal to the fair market value of the shares on the date of receipt since there
will be no substantial risk of forfeiture or other restrictions on transfer.
If, however, the Consultant receives shares of common stock pursuant to the
exercises of an option or options at an exercise price below the fair market
value of the shares on the date of exercise, the difference between the exercise
price and the fair market value of the stock on the date of exercise will be
deemed ordinary income for federal income tax purposes. The Consultant is urged
to consult his tax advisor on this matter. Further, if any recipient is an
"affiliate", Section 16(b) of the Exchange Act is applicable and will affect the
issue of taxation.
Tax Treatment to the Company
The amount of income recognized by any recipient hereunder in accordance
with the foregoing discussion will be an expense deductible by the Company for
federal income tax purposes of the taxable year of the Company during which the
recipient recognizes income.
Restrictions of Resales
In the event that an affiliate of the Company acquires shares of Common
Stock hereunder, the affiliate will be subject to Section 16(b) of the Exchange
Act. Further, in the event that any affiliate acquiring shares hereunder has
sold or sells any shares of Common Stock in the six months preceding or
following the receipt of shares hereunder, any so called "profit", as computed
under Section 16(b) of the Exchange Act, would be required to be disgorged from
the recipient to the Company. Services rendered have been recognized as valid
consideration for the "purchase" of shares in connection with the "profit"
computation under Section 16(b) of the exchange Act. The Company has agreed
that for the purpose of any "profit" computation under 16(b) the price paid for
the common stock issued to affiliates is equal to the value of services
rendered. Shares of common Stock acquired hereunder by persons other than
affiliates are not subject to Section 16(b) of the Exchange Act.
DOCUMENTS INCORPORATED BY REFERENCE AND ADDITIONAL INFORMATION
The Company hereby incorporates by reference (i) its annual report of Form
10-KSB for the year ended September 30, 1998, filed pursuant to Section 13 of
the Exchange Act, (ii) any and all Forms 10-Q (10-QSB) filed under the
Securities or Exchange Act subsequent to any filed form 10-K (or 10-KSB), as
well as all other reports filed under Section 13 of the Exchange Act, and (iii)
its annual report, if any, to shareholders delivered pursuant to Rule 14a-3 of
the Exchange Act. In addition, all further documents filed by the Company
pursuant to Section 13, 14, or 15(d) of the Exchange Act prior to the
termination of this offering are deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of filing. All documents
which when together, constitute this Prospectus, will be sent or given to
participants by the Registrant as specified by Rule 428(b)(1) of the Securities
Act.
Item 2. Registrant Information and Employee Plan Annual Information
A copy of any document or part hereof incorporated by reference in this
Registration Statement but not delivered with this Prospectus or any document
required to be delivered pursuant to Rule 428(b) under the Securities Act will
be furnished without charge upon written or oral request. Requests should be
addressed to: POWER EXPLORATION, INC., 5020 Collinwood Ave., Suite 201, Fort
Worth, Texas 76107, telephone (817) 377-4464.
Legal Opinions and Experts
Warren J. Soloski has rendered an opinion on the validity of the securities
being registered. Mr. Soloski is not an "affiliate" of the Company and does not
have a substantial interest in the registrant.
The financial statements of POWER EXPLORATION, INC. incorporated by
reference in the Company's Annual Report (Form 10-KSB) for the year ended
September 30, 1998 have been audited by Merdinger, Fruchter, Rosen & Corso,
P.C., Certified Public Accountants, independent auditors, as set forth in their
report incorporated herein by reference and are incorporated herein in reliance
upon such report given upon the authority of the firm as experts in auditing and
accounting.
Indemnification of Officers and Directors
Insofar as indemnification of liabilities arising under the Securities Act
may be permitted to directors, officers, or persons controlling the company, the
company has been informed that in the opinion of the commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Registrant hereby states that (i) all documents set forth in (a) through
(c), below, are incorporated by reference in this registration statement, and
(ii) all documents subsequently filed by registrant pursuant to Section 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such documents.
(a) Registrant's latest Annual Report, whether filed pursuant to
Section 13(a) or 15(d) of the Exchange Act;
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the annual
report referred to in (a), above; and
(c) The latest prospectus filed pursuant to Rule 424(b) under
the Securities Act.
Item 4. Description of Securities
No description of the class of securities (i.e., the $.02 par value Common
Stock) is required under this item because the common Stock is registered under
Section 12 of the Exchange Act.
Item 5. Interests of Named Experts and Counsel
Mr. Soloski, whose firm is rendering the legal opinion for this
registration, will not benefit from the registration of shares under the terms
of the consulting agreement, but will be paid directly by the Company.
Item 6. Indemnification of Directors and Officers
The Company's by-laws, in accordance with Nevada Revised Statutes
(sec 78.751), provide that to the extent he is otherwise fairly and reasonably
entitled thereto, the Company shall indemnify a Director or Officer, a former
Director or Officer, or a person who acts or acted at the Company's request as a
Director or Officer of a body corporate of which the Corporation is or was a
shareholder or creditor (or a person who undertakes or has undertaken any
liability on behalf of the Company or any such body corporate and his heirs and
legal representatives, against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, reasonably incurred by
him in respect of any civil, criminal or administrative action or proceeding to
which he is made a party by reason of being or having been a Director or Officer
of the Company or such body corporate, if
(a) he acted honestly and in good faith with a view to the best
interests of the Company; and
(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he had reasonable
grounds for believing that his conduct was lawful.
The Nevada Revised Statutes (NRS) provide that directors shall not be personally
liable to the Company or its shareholders for monetary damages for breach of
fiduciary duty as a director except for liability (i) for any breach of the
directors' duty of loyalty to the Company or its shareholders, (ii) for acts or
omissions not in good faith or which involved intentional misconduct or a
knowing violation of law, (iii) for authorizing a distribution that is unlawful
under the NRS, or (iv) for any transaction from which the director derived an
improper personal benefit. Such provision protects directors against personal
liability for monetary damages for breaches of their duty of care.
The Company may purchase and maintain insurance for the benefit of its Directors
and Officers as such, as the Board of directors may from time to time determine.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
(a) The following exhibits are filed as part of this S-8 registration
statement pursuant to Item 601 of Regulation S-B and are specifically
incorporated herein by this reference:
Exhibit No. Title
4. Not Applicable
5. Opinion of Warren J. Soloski regarding the legality of the
securities registered.
10. Consulting Agreement with DDW & ASSOC.
15. Not Required
23.1 Consent of Warren J. Soloski, special counsel to registrant,
to the use of his opinion with respect to the legality of
the securities being registered hereby and to the references
to him in the Prospectus filed as a part hereof.
23.2 Consent of Merdinger, Fruchter, Rosen & Corso, P.C.,
Certified Public Accountants
27. Not Required
28. Not Required
29. Not Required
Item 9. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of registrant
pursuant to the foregoing provisions, or otherwise, registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. If a claim for indemnification against such
liabilities (other than the payment by registrant of expenses incurred or paid
by a director, officer or controlling person of registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered,
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement
to:
(i) include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represents a fundamental change
in the information set forth in the registration statement; and
(iii) include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
provided, however, paragraphs (i) and (ii) shall not apply
if the information required to be included in a post-effective
amendment by those paragraphs is incorporated by reference from
periodic reports filed by the registrant small business issuer under
the Exchange Act.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment to the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4) To deliver or cause to be delivered with the prospectus, to
each person to whom the prospectus is sent or given, the latest annual
report to security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements of
Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934;
and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide
such interim financial information.
Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of registrant's annual
report pursuant to Section 13(a) of the Securities Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
Securities at that time shall be deemed to be the initial bona fide offering
thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized in the City of Fort Worth of Texas on the 25th day of February, 1999.
POWER EXPLORATION, INC.
(Registrant)
By: /s/ Guy Pyron
Guy Pyron, CEO
Pursuant to the requirements of the 1933 Act, this registration statement
or amendment has been signed by the following persons in the capacities and on
the dates indicated:
Signatures Title Date
/s/ Guy Pyron CEO February 25, 1999
Guy Pyron Director
/s/ Joe Bill Bennett COO February 25, 1999
Joe Bill Bennett Director
/s/ M. O. Rife, III Director February 25, 1999
M. O. Rife, III
/s/ Jack Gallacher Director February 25, 1999
Jack Gallacher
/s/ Thom Schliem Director February 25, 1999
Thom Schliem
/s/ Mark Zouvas Secretary February 25, 1999
Mark Zouvas
/s/ Pattye Hill Treasurer February 25, 1999
Pattye Hill
<PAGE>
FORM S-8 REGISTRATION STATEMENT
EXHIBIT INDEX
The following Exhibits are filed as part of this registration statement
pursuant to Item 601 of Regulation S-B and are specifically incorporated herein
by this reference:
Exhibit Number
In Registration
Statement Descriptions Numbered Page
______________________________________________________________________________
5. Opinion of Counsel 15
10. Consulting Agreement with DDW & ASSOC. 17
23.1 Consent of Warren J. Soloski 22
23.2 Consent of Merdinger, Fruchter, Rosen & Corso, P.C., 23
Certified Public Accountants
<PAGE>
February 25, 1999
Guy Pyron
POWER EXPLORATION, INC.
5020 Collinwood Ave., Suite 201
Fort Worth, Texas 76107
Re: Legal Opinion for S-8 Registration Statement
Dear Mr. Pyron:
At your request, I have examined the form of Registration Statement No.
33-____ which POWER EXPLORATION, INC. (the "Company") is filing with the
Securities and Exchange Commission, on Form S-8 (the "Registration Statement"),
in connection with the registration under the Securities Act of 1933, as
amended, of 400,000 shares of your Common Stock (the "Stock") issuable pursuant
to satisfaction of conditions set forth in the agreements with the various
officers and consultants to the Company (the "Consulting Agreements").
In rendering the following opinion, I have examined and relied only upon
the documents, and certificates of officers and directors of the Company as are
specifically described below. In my examination, I have assumed the genuineness
of all signatures, the authenticity, accuracy and completeness of the documents
submitted to me as originals, and the conformity with the original documents of
all documents submitted to me as copies. My examination was limited to the
following documents and no others:
1. Certificate of Incorporation of the Company, as amended to date;
2. Bylaws of the Company, as amended to date;
3. Resolutions adopted by the Board of Directors of the Company
authorizing entry into the various consultant agreements;
4. The Registration Statement;
5. The agreements with the entity and the individual for the shares being
registered in the Registration Statement.
I have not undertaken, nor do I intend to undertake, any independent
investigation beyond such documents and records, or to verify the adequacy or
accuracy of such documents and records. Based upon the foregoing, it is my
opinion that: (i) the Stock to be issued under the agreements, subject to
effectiveness of the Registration Statement and compliance with applicable blue
sky laws, and execution of the various Consulting Agreements in accordance with
the contracts as contemplated, when issued, will be duly and validly authorized,
fully paid and non-assessable; and (ii) no consent, approval, order or
authorization of any regulatory board, agency, or instrumentality having
jurisdiction over the Company or its properties (other than registration under
the Act or qualification under state securities or Blue Sky laws or clearance
from the NASD) is required for the valid authorization, issuance and delivery of
the Stock, or, if required, it has been obtained and is in full force and
effect.
I express no opinion as to compliance with the securities or "blue sky"
laws of any state in which the stock delivered upon fulfillment of the
agreements is proposed to be offered and sold or as to the effect, if any, which
non-compliance with such laws might have on the validity of issuance of the
stock.
I consent to the filing of this opinion as an exhibit to any filing made
with the Securities and Exchange Commission or under any state or other
jurisdiction's securities act for the purposes of registering, qualifying or
establishing eligibility for an exemption from registration or qualification of
the stock issued as described in the Registration Statement in connection with
the offering described therein. Other than as provided in the preceding
sentence, this opinion (i) is addressed solely to you, (ii) may not be relied
upon by any other party, (iii) covers only matters of federal law and nothing in
this opinion shall be deemed to imply any opinion related to the laws of any
other jurisdiction, (iv) may not be quoted or reproduced or delivered by you to
any Other person, and (v) may not be relied upon for any other purpose
whatsoever. Nothing in this opinion shall be deemed to relate to or constitute
an opinion concerning any matters not specifically set forth above.
By giving you this opinion and consent, I do not admit that I am an expert
with respect to any part of the Registration Statement within the meaning of the
term "expert" as used in Section 11 of the Securities Act of 1993, as amended,
or the Rules and Regulations of the Securities and Exchange Commission
promulgated thereunder.
The information set forth herein is as of the date of this letter. I
disclaim any undertaking to advise you of changes which may be brought to my
attention after the effective date of the Registration Statement.
Very truly yours,
/s/ Warren J. Soloski
Warren J. Soloski
<PAGE>
INDEPENDENT CONTRACTOR/CONSULTING AGREEMENT
THE AGREEMENT is made and entered into as of this 1st day of February,
1999, by and between POWER EXPLORATION, INC., hereinafter referred to as
"Client", with its principal place of business in 5020 Collinwood Ave., Suite
201, Fort Worth, Texas, and DDW & ASSOC., a corporation with its place of
business at 1300 N. Brookhurst Place, Fullerton, California 92833, hereinafter
referred to as "Consultant".
RECITALS
WHEREAS, Client is engaged in the Oil Production Business.
WHEREAS, Consultant is in the business of providing general business
consulting, including strategic business planning services and investor
relations to companies.
WHEREAS, in the operation of Client's business, Client is in need of the
services which Consultant provides and wishes to enter into a business
arrangement with Consultant to provide such services.
IN CONSIDERATION of the promises and mutual covenants hereby contained, it
is hereby agreed as follows and will confirm the arrangements, terms and
conditions pursuant to which the Consultant has been retained to serve as a
financial consultant and advisor to POWER EXPLORATION, INC. (also sometimes
referred to as the "Client" or "Company"), on a nonexclusive basis as an
independent contractor. The undersigned hereby agree to the following terms and
conditions:
AGREEMENTS
1. Terms of Contract
This Agreement will become effective on February l, 1999 and will continue
in effect for a period of twelve (12) months unless earlier terminated pursuant
to Section 5 of this Agreement.
2. Services to be Performed by Independent Contractor/Consultant
2.1 Duties of Independent Contractor. Contractor shall at the request of
the Company, upon reasonable notice, render the following services to the
Company from time to time.
2.2 Duties of Consultant. Consultant agrees to provide strategic planning
to Client. The Consultant will review and evaluate the Company's current
business plan and remain knowledgeable about its contents thereof. Consultant
shall work with the Company's management to develop and prepare a detailed
strategic business plan as well as periodically revise said plan as required
during the term of this Agreement and provide general strategic advice and
consultation to the Company's management on all matters pertaining to the
business of the Company. This Agreement expressly excludes the Consultant from
providing any and all capital formation and/or public relations to the Company
inclusive of but not limited to (i) direct or indirect promotion of the
Company's securities; (ii) assistance in making of a market in the Company's
securities; and (iii) assistance in obtaining debt and/or equity financing from
any source whatsoever.
2.3 Independent Contractor Status. It is the express intention of the
parties that Consultant be an independent contractor and not an employee, agent,
joint venture or partner of Client. Client shall have no right to and shall not
control the manner or prescribe the method by which Consultant performs the
above described services. Consultant shall be entirely and solely responsible
for its own actions and the actions of its agents, employees or partners while
engaged in the performance of services required by this Agreement. Nothing in
this Agreement shall be interpreted or construed as creating or establishing the
relationship of employer and employee between Client and Consultant or any
employee or agent of Consultant. Both parties acknowledge that Consultant is
not an employee for state or federal income tax purposes and Consultant
specifically agrees that it shall be exclusively liable for the payment of all
income taxes, or other state or federal charges, that are due as a result of
receipt of any consideration for the performance of services required by this
Agreement. Consultant agrees that any such consideration is not subject to
withholding by the Client for payment of any taxes and Consultant directs Client
not to withhold any sums for the consideration paid to Consultant for the
services provided hereunder. Consultant shall retain the right to perform
services for others during the term of this Agreement. Nothing herein shall
constitute Consultant as an employee or agent of the Company, except to such
extent as might hereinafter be agreed, Consultant shall not have the authority
to obligate or commit the Company in any matter whatsoever.
2.4 Use of Employees of Contractor. Consultant may, at its own expense,
use any employees or subcontractors as it deems necessary to perform the
services required of Consultant by this Agreement. Client may not control,
direct or supervise Consultant and/or it's employees or subcontractors in the
performance of those services.
2.5 Expense. Consultant shall be responsible for all costs and expenses
incident to the performance of services required by this Agreement, including
but not limited to, the cost of materials used by Consultant, travel, fees,
fines, licenses, bonds and taxes required of, or imposed against Consultant, and
all other of Consulant's costs of doing business.
2.6 Available Time. Consultant shall make available such time as it, in
its sole discretion, shall deem appropriate for the performance of its
obligations under this Agreement.
3. Compensation
3.1 Consideration. Client and Consultant agree that Consultant shall
receive from the Client a fee of Four Hundred Thousand (400,000) shares of
Client's common stock, in advance, as consideration for the services to be
rendered pursuant to this Agreement.
3.2 Reimbursement for Out-of-Pocket Expenses. Client shall reimburse
Consultant at net cost, for out-of-pocket expenses incurred in furtherance of
this Agreement for travel and related living expenses, contact entertainment,
postage, delivery services (e.g. Federal Express), printing, telex, and other
third party expenses PROVIDED THAT any such expenses in excess of $100.00. shall
be subjected to Client pre-approval and expenses should not exceed $500.00.
3.4 Assignment and Termination. This Agreement shall not be assignable by
any party.
4. Obligations of Client.
4.1 Cooperation. Client shall comply with all reasonable requirements of
Consultant and provide access to all documents reasonably necessary to the
performance of Consultant's duties under this Agreement.
4.2 Confidentiality. Except in the course of the performance of its
duties hereunder, Consultant agrees that it shall not disclose any trade
secrets, know-how, or other proprietary information not in the public domain
learned as a result of this Agreement unless and until such information becomes
generally known.
5. Termination Agreement
5.1 Termination on Notice. Notwithstanding any other provisions of this
Agreement, Client may terminate this Agreement at any time by giving thirty (30)
days written notice to the the Consultant. Upon Consultant receiving 30 days
written notification of termination of this Agreement by Client, it is to
receive full payment for services and expenses as stated in Item 3.2 of this
Agreement. Unless otherwise terminated as provided in this Agreement, this
Agreement will continue in force for a period of twelve (12) months.
5.2 Termination on Occurrence of Stated Event. This Agreement will
terminate automatically on the occurrence of the following event:
(a) bankruptcy or insolvency of Client.
(b) non-payment or performance as stated in this Agreement by Client.
6. General Provisions
6.1 Further Acts. Each party agrees to perform any further acts and
execute and deliver any further documents that may be reasonably necessary to
carry out the provisions and intent of this Agreement.
6.2 Entire Agreement. This Agreement contains the entire understanding of
the parties hereto with respect to the subject matter contained herein and may
be amended only by a written instrument signed by the parties affected thereby,
or their respective successors or assigns. This Agreement cancels and supersedes
all prior agreements, if any, oral or written, among Client and Consultant.
6.3 Severability. If any provision of this Agreement shall be held
invalid, such invalidity shall not affect the other provisions hereof, and to
this extent the provisions of this Agreement are intended to be and shall be
severable.
6.4 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6.5 Notices. Any notice or other communication required or permitted
under this Agreements shall be sufficiently given if delivered personally or
sent by registered or certified mail, postage prepaid and return receipt
requested, to the address of the parties set forth in the first paragraph of
this Agreement or at such address as may have been provided in like manner in
writing to both of the parties to this Agreement. Any notice that is sent by
mail under this Agreement shall be considered received on the date on which it
is actually delivered to the premises of the party of whom it is properly
addressed, such date to be conclusively evidenced by the date of the return
receipt.
6.6 Governing Law. This Agreement shall be construed in accordance with,
and governed by the laws of the State of Nevada.
6.7 Assignment. No party to this Agreement may assign this Agreement or
its right or obligations hereunder without the written consent of the others.
6.8 Headings. The headings of this Agreement are inserted solely for the
convenience of reference and are not part of, and are not intended to govern,
limit or aid in the construction of any term or provision hereof.
6.9 Pronouns. All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require.
6.10 Waiver. No waiver of any of the provisions of this Agreement shall
be deemed, or shall constitute a waiver of any other provision, nor shall any
waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
6.11 Acknowledgment Concerning Counsel. Each party acknowledges that it
had the opportunity to employ separate and independent counsel of its own
choosing in connection with this Agreement.
6.12 Arbitration. Any controversy, claim, misunderstanding, course of
action, matter in question, breach, disagreement, dispute, or other related
matter arising out of, or relating to this Agreement, or the relationship
between the parties, shall be decided by mandatory binding arbitration before
the American Arbitration Association, State of Nevada. In such arbitration, the
parties shall be entitled to the full discovery rights accorded to litigants
under the Laws of the State of Nevada. The prevailing party shall be entitled
to recover all costs and expenses incurred, including its reasonable attorneys
fees, related costs, and any advanced arbitration expenses.
6.13 Indemnification. Consultant will indemnify and hold harmless Client
and its officers, directors, agents and employees against any expenses, which
may be incurred by Client as a result of statements made by Consultant which are
inaccurate or misleading or the failure by Consultant to state facts, which are
necessary to be stated in order to make statements made not misleading.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
CLIENT: POWER EXPLORATION, INC.
BY: /s/ Guy Pyron
Guy Pyron, its CEO
ACCEPTED BY:
CONSULTANT: DDW & ASSOC.
By: /s/ Christopher Dillow
Christopher Dillow, its CEO
<PAGE>
WARREN J. SOLOSKI Letterhead
CONSENT OF COUNSEL
I consent to the filing of this opinion as an exhibit to any filing made
with the Securities and Exchange Commission or under any state or other
jurisdiction's securities act for the purposes of registering, qualifying or
establishing eligibility for an exemption from registration or qualification of
the stock issued as described in the Registration Statement in connection with
the offering described therein.
/s/ Warren J. Soloski
Warren J. Soloski
Special Counsel to POWER EXPLORATION, INC.
<PAGE>
MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.,
CERTIFIED PUBLIC ACCOUNTANTS Letterhead
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) and related Prospectus pertaining to shares of
common stock of POWER EXPLORATION, INC. and to the incorporation by reference
therein the financial statements and schedules of POWER EXPLORATION, INC.
included and incorporated by reference in its Annual Report (Form 10-KSB) for
the year ended September 30, 1998 filed with the Securities and Exchange
Commission.
/s/ Steven Corso
Steven Corso, Principal
Merdinger, Fruchter, Rosen & Corso, P.C.
Certified Public Accountants
