Sample Business Contracts


Consulting Agreement - Ivanhoe Energy Inc. and Nahwan Trading LLC

Consulting Forms


                              CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT ("Agreement") is entered into as of the 13 day of
January 2002, by and between IVANHOE ENERGY INC., a company organized under the
laws of the Yukon, Canada ("Company"), and NAHWAN TRADING LLC, a company
organized under the laws of Sultanate of Oman, with a registered office at
112 Hatat House, P.O. Box 398, Postal Code 116, Mina Al Fahal, Sultanate of Oman
("Consultant").

The Company and the Consultant are sometimes hereinafter referred to
individually as a "Party" and collectively as the "Parties".

WHEREAS:

(A) Company has highly experienced staff with intensive experience in
international oil and gas exploration, development and production. Because the
Company's competition in Oman and Yemen ("Countries of Interest"), are much
larger with records of business dealings in the Middle East, the Company has
requested the assistance of Consultant as herein provided.

(B) The Consultant is a business organization with expertise in the Middle East,
and in the Countries of Interest in particular, and is capable of providing the
Company with advice and assistance in establishing business and other contacts
with respect to activities Company may contemplate conducting in the Countries
of Interest.

(C) The Company requests Consultant also to provide advice on business,
governmental and related matters in order to assist the Company in identifying
future business opportunities in the Countries of Interest in oil, gas
exploration, development and production, and mineral extraction, and in related
operations (the "Projects").

(D) The Consultant is willing to advise and assist the Company as contemplated
hereby.

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the Parties agree as follows:

1.     THE CONSULTANT'S OBLIGATIONS

1.1    During the term of this Agreement, the Consultant shall use its
       reasonable endeavors in providing the following services (collectively,
       the "Services") to the Company:

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(a)    Assistance in obtaining visas and permits for Company personnel and
       representatives for entry into and conducting business of the Company in
       either of the Countries of Interest;

(b)    Advice and assistance concerning the Countries of Interest, including:
       (i) establishing business contacts, (ii) identifying key departments,
       agencies within the Governments of Countries of Interest and their
       officials, personnel, ministries, departments and municipalities; (iii)
       analysis and interpretation of public affairs and governmental policies
       in the Countries of Interest particularly in the areas of oil, gas and
       mineral extraction, foreign investment, and taxation; and (iv)
       formulating and developing strategies for establishing and maintaining
       Company's relations with the Governments of Countries of Interest, and
       Projects that may be proposed and undertaken by the Company in the
       Countries of Interest;

(c)    Advice regarding general business strategy and competitor activities in
       the Countries of Interest;

(d)    Assistance in identifying and obtaining business opportunities in the
       Countries of Interest for the Company and its Affiliates in the Projects'
       areas of oil, gas and mineral extraction and the possibly conversion of
       natural gas to liquid fuels;

(e)    Advice in business and negotiation strategy in obtaining and negotiating
       agreements with Governments of the relevant Countries of Interest or with
       other entities or corporations in connection with Projects for Company in
       Countries of Interest; and

(f)    Such other Services as requested by Company and that Consultant is
       reasonably able to provide in order to assist in and further the
       Projects.

1.1.1  The Consultant shall perform the Services, at all times, with due
       diligence and in compliance with all applicable laws and regulations in
       Countries of Interest. If the laws or policies of any of the Countries of
       Interest prohibit the Company from utilizing the Services of Consultant
       in the manner herein contemplated, the Parties will negotiate a different
       arrangement for Consultant to assist Company in respect of Projects in
       that Country of Interest.

1.1.2  The Consultant's advice to the Company in respect of the Services shall
       be given orally or in writing. Consultant shall report to Mr. E. L.
       Daniel, or to such other individual as the Company may hereafter specify
       by written notice to Consultant. When requested, and not more than once
       each calendar quarter, Consultant shall provide Company with a written
       activities and status report, in which Consultant describes the Services
       it has performed since the last report.

1.1.3  It is agreed that if the Government or a Government entity of another
       country other than one of the Countries of Interest, approaches the
       Company regarding

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       doing a Project with such other country in one of the Countries of
       Interest, such Project will not be covered by this Agreement and
       Consultant shall not be entitled to compensation with respect to such
       Project, unless the Parties otherwise agree in writing.

2.     COMPENSATION

2.1    In consideration of the provision of the Services by the Consultant to
       the Company, the Company shall pay to the Consultant ("Compensation"), as
       follows, based upon the commitment for capital expenditures ("Contract
       Value") the Company makes in the contract with the Government and/or
       Government entity of the relevant Country of Interest ("Project
       Contract"):

<Table>
<Caption>

       Contract Value                       Compensation to Consultant
       --------------                       --------------------------
       <S>                                  <C>
       Up to U.S.$lO Million                Five percent (5.0%)
       $10 Million to $50 Million           Two and one-half percent (2.5%)
       $50 Million to $100 Million          Two percent (2.0%)
       $100 Million to $250 Million         One and one-half percent (1.5%)
       $250 Million and above               One percent (1.O%)

</Table>

       Compensation shall be payable to Consultant in cash as follows:

       (a)    Twenty percent (20%) of the Compensation on the effective date of
              the relevant Project Contract; and

       (b)    The balance in four (4) equal annual installments on each of the
              first four anniversaries of the effective date of the Project
              Contract.

2.2    It is clearly agreed that compensation to Consultant by Company will be
       on a successful efforts basis, viz., compensation will be paid only for
       Projects which in Company's sole discretion it elects to undertake in
       Countries of Interest and for which Consultant has performed Services
       that contributed materially to Company obtaining the Project. For the
       purposes of this Agreement, a Government Agreement must be effective by
       its terms and enforceable by the Company or any of its Affiliates that
       are parties to the Government Agreement.

2.3    In addition to Compensation negotiated by the Parties under 2.1, the
       Company and the Consultant may agree the reimbursement to the Consultant
       in accordance with Company's policies, of extraordinary expenses or costs
       incurred by the Consultant in providing the Services, provided that
       Company agrees in advance to Consultant performing such Services and
       Consultant provides receipts and other evidence of such expenditures to
       be reimbursed. Ivanhoe's air travel policy is that international travel
       is in business class, and travel in Europe and within the continental
       U.S. is in economy class.


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<PAGE>

2.4    Each cash payment of Compensation shall be paid to the Consultant and
       only in the name of Consultant by direct wire transfer in US$ to the
       Consultant's bank account which the Consultant shall notify to the
       Company from time to time.

3.     ASSIGNMENT

3.1    The Consultant shall not assign, in whole or in part, any of its rights
       or obligations under this Agreement.

3.2    The Company may, at any time upon prior written notice to Consultant,
       assign its rights or obligations under this Agreement to an Affiliate (as
       defined below); provided that, prior to such assignment, the Affiliate
       enters into an agreement with the Parties whereby the Affiliate assumes
       the rights or obligations being assigned; and provided, further, that the
       Company shall, unless otherwise agreed in writing by the Parties, remain
       jointly and severally liable with such assigned Affiliate for any
       payments required to be made to Consultant under this Agreement.

3.3    For the purposes of this Agreement:

       (a)    a company or entity shall be deemed to be an "Affiliate" of
              another company or entity if (i) that other company or entity
              directly or indirectly controls or is controlled by the first
              mentioned company or entity or (ii) the first mentioned company or
              entity and that other company or entity are directly or indirectly
              controlled by the same company or entity;

       (b)    "control" shall mean (i) ownership or control (whether directly or
              otherwise) of fifty per cent (50%) or more of the equity share
              capital, voting capital or voting rights, (ii) power to control
              the composition of, or power to appoint fifty per cent (50%) or
              more of the members of, the Board of Directors, Board of
              Management, or other equivalent to a analogous body, or (iii)
              entitlement to receive fifty per cent (50%) or more of any (but
              not necessarily every) income or capital distribution made by such
              company or entitle (either on liquidation, winding-up, or
              dissolution of such company or entity, or otherwise).

4.     TERM: TERMINATION

4.1    This Agreement shall commence on the date hereof, and shall continue
       thereafter until terminated upon 90 days notice by either party to the
       other.

4.2    Unless earlier terminated pursuant to the terms of this Agreement, the
       terms of this Agreement may be extended by mutual written agreement of
       the Parties.


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<PAGE>

5.     INDEPENDENT CONTRACTOR; RELATIONSHIP OF THE PARTIES.

5.1    In the performance of Services hereunder, Consultant shall conduct itself
       always as an independent contractor, and none of the Consultant's
       officers, directors, employees, representatives or agents shall be
       considered an employee, agent or servant of the Company. The Consultant's
       performance of the Services hereunder will be at its own risk and none of
       its officers, directors, employees, representatives or agents shall be
       entitled to worker's compensation or other similar benefits of employment
       or insurance protection provided by the Company for its employees. The
       Company is interested only in the results of Consultant's performance of
       the Services.

5.2    With respect to this Agreement, no officer, director, employee,
       representative or agent of the Consultant, nor their respective spouses,
       heirs, executors, administrators or assigns shall claim nor seek to
       obtain from the Company any benefits or sums with respect to the illness,
       disability or death of such officer, director, employee, representative
       or agent of the Consultant, whether arising or occurring during or after
       the termination or expiration of this Agreement. The Consultant agrees to
       indemnify and save Company harmless from any and all such claims.

5.3    Neither Party shall have the authority to bind the other Party, or to
       sign any instrument or document on its behalf. Likewise, neither Party is
       empowered to make commitments for or on behalf of the other Party.

5.4    The Consultant and the Company will act in good faith towards one another
       in the conduct of this Agreement.

5.5    Consultant represents and warrants that neither it nor any of its
       directors or officers nor, with its actual knowledge or express or
       implied consent, any of its employees, agents or representatives or any
       person acting on its behalf, will, except as permitted under the
       Corruption of Foreign Public Officials Act of Canada (the "Act"), and
       the Foreign Corrupt Practices Act of the United States of America
       ("FCPA"), in order to obtain or retain an advantage in the course of
       business, directly or indirectly give, offer to give or offer a loan,
       reward, advantage or benefit of any kind to a foreign public official (a)
       as consideration for an act or omission by the official in connection
       with the performance of the official's duties or functions or (b) to
       induce the official to use his or her position to influence any acts or
       decisions of the foreign state or public international organization for
       which the official performs duties or functions. Consultant agrees to
       cooperate with Company to provide information reasonably requested by
       Company about Consultant, including but not limited to, (i) Consultant's
       business history and (ii) the shareholders, directors and officers of
       Consultant. It shall be a condition precedent to the obligations of
       Company under this Agreement that Consultant cooperates as above
       provided.


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<PAGE>

6.     CONFLICT OF INTEREST

       The Consultant represents and warrants to the Company that its execution
       of, and the performance of its obligations under this Agreement does not
       create or result in any conflict of interest as to any relationship
       (contractual, fiduciary or otherwise) which the Consultant may have with
       any third party relating to Projects in Countries of Interest. However,
       the Consultant may provide similar services to third parties that do not
       prejudice the carrying out of the Services to the Company. The Consultant
       shall notify the Company of any possible conflict of interest, and shall
       not create nor permit to exist any such conflict of interest during the
       term of this Agreement.

7.     CONFIDENTIALITY


7.1    Consultant shall keep strictly confidential and shall not, disclose any
       information concerning this Agreement or the confidential business,
       operations, or affairs of the Company, regardless of how or when
       Consultant acquires such information, except:

       (a)    to an Affiliate of the Consultant;

       (b)    upon written agreement of the Company to the disclosure of such
              information;

       (c)    to any governmental authority or entity of competent jurisdiction
              or any stock exchange when required by law or regulations
              including, without limitation, any regulation or rule of any
              regulatory entity, securities commission, on which the securities
              of Consultant or an Affiliate of a Party are or are to be listed;

       (d)    as may be required in connection with an arbitration proceeding
              under this Agreement;

       (e)    to legal counsel independent accountants representing a Party; or

       (f)    pursuant to Section 7.3

7.2    Prior to making an authorized disclosure pursuant to Sections 7.1 (a),
       (b), (d) or (e), the Consultant shall obtain a commitment from the entity
       to which such confidential information is intended to be disclosed, to
       the effect that such entity shall treat such information as confidential.
       Consultant shall be liable for disclosures contrary to the terms of this
       Agreement by an Affiliate to which Consultant has disclosed information
       that is covered by the confidentiality obligation hereunder. However, if
       Consultant, or its Affiliate, is required to disclose such information to
       a governmental authority of competent jurisdiction, then Consultant may
       make such


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<PAGE>

       disclosure without having obtained a written confidentiality commitment
       from such governmental authority.

7.3    Consultant shall not make any public announcement relating to the
       Services or the existence of this Agreement without the prior approval of
       the Company.

7.4    The confidentiality obligations set forth in this Section 7 shall be
       continuing and shall survive the termination or expiration of this
       Agreement, for any reason for a period of two (2) years.

8.     LIABILITY

8.1    Neither party shall be liable to the other party for any claims for
       incidental, indirect or consequential damages arising out of or in
       connection with the performance or non-performance of this Agreement,
       including but not limited to claims for lost profit or business
       opportunities.

9.     FORCE MAJEURE

       If either the Consultant or the Company is rendered unable to perform an
       obligation required of it hereunder, in whole or in part, due to force
       majeure, then upon notice to the other, such Party's performance of such
       obligation shall be suspended for the period that it is unable to perform
       the obligation. For purposes of this Agreement, "force majeure" shall
       mean any act or event beyond the reasonable control of the party affects,
       including, not limited to, a strike, labor dispute, lockout, fire, flood,
       tornado, hurricane, earthquake, explosion, act of God or the public
       enemy, war (declared or undeclared), blockage, governmental regulation,
       governmental treaty, order or decree, insurrections, riots, terrorism,
       and other civil disturbances, or epidemics. The performance affected by
       the force majeure shall be resumed after the event or cause of force
       majeure ends.

10.    APPLICABLE LAW AND DISPUTE RESOLUTIONS

10.1   A party shall not be required to perform any obligation under this
       Agreement if the performance of that obligation is prohibited by the laws
       of any governmental authority having competent jurisdiction applicable to
       performance of the obligation of that Party.

10.2   This Agreement shall be governed by and interpreted and construed in
       accordance with English law. Without prejudice to the right of either of
       the parties to enforce this Agreement in any court having competent
       jurisdiction over one or more of the Parties or their assets, the Company
       and the Consultant each hereby submits itself to the jurisdiction and
       venue of the Courts of England solely for any purpose related to the
       enforcement of this Agreement.

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<PAGE>

10.3   Any dispute or claim arising out of and in relation to this Agreement
       shall be submitted to arbitration in accordance with the Arbitration Act
       of 1996. The tribunal shall consist of one arbitrator. The language of
       the arbitration shall be English and the venue of the arbitration shall
       be in London. The parties hereto acknowledge that service of any notices
       in the course of such arbitration at their addresses as given in this
       Agreement shall be sufficient and valid.

10.4   Judgment on the award of the arbitrators may be entered in any court
       having competent jurisdiction or having jurisdiction over one or more of
       the Parties or their assets.

11.    NOTICES

       All notices or requests provided for or permitted to be given pursuant to
       this Agreement must be in writing, or confirmed in writing as provided
       herein, and may be delivered by telecopier, telex, mail or hand. Any
       notice hereunder shall be effected upon receipt by the Party to whom such
       notice is addressed, and shall be addressed as follows:

COMPANY:         IVANHOE ENERGY INC.
                 c/o Ivanhoe Energy (USA) Inc.
                 1200 Discovery Drive, Suite 301
                 P.O. Box 9279
                 Bakersfield, CA 93389-9279
                 Attention: Mr. Leon Daniel, President
                 Telephone: 66l-869-2887
                 Facsimile: 661-869-2820
                 E-mail: [email protected]

CONSULTANT:      NAHWAN TRADING LLC
                 112 Hatat House
                 P.O.Box 398, Postal Code 116,
                 Mina Al Fahal, Sultanate of Oman
                 Attention:

                 Telephone: 560961
                 Facsimile: 564747
                 E-mail: [email protected]

Each Party shall have the right from time to time during the term of this
Agreement to change its address, telephone, facsimile numbers, and/or the person
to whom communications are to be delivered by notifying the other Party in
writing.

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<PAGE>

12.    MISCELLANEOUS

12.1   This Agreement constitutes the entire agreement between the Parties
       relating the subject matter hereof and supersedes all prior discussions,
       correspondence, negotiations and agreements, both written and oral,
       regarding its subject matter.

12.2   This Agreement may be amended or modified, and any of the terms hereof
       may be waived, only by a written instrument duly signed by both the
       Company and Consultant or, in the case of a waiver, by the Party waiving
       compliance.

12.3   This Agreement shall be binding upon and inure solely to the benefit of
       each party hereto, and nothing herein, express or implied, is intended to
       or shall confer upon any other person or persons (including, but not
       limited to any assistant) any rights, benefits or remedies of any nature
       whatsoever under or by any reason of the Agreement.

12.4   The obligations and liabilities of the parties are intended to be several
       and not joint and nothing contained herein shall be construed to create
       an association, trust, partnership or joint venture between the parties,
       and each party shall be liable individually and severally for its own
       obligations under this Agreement.

12.5   The headings user herein are for convenience only and are not intended to
       be interpretative, definitive, or supplemental to the respective
       paragraphs, provisions, or articles. Terms used herein in the singular
       include the plural and vice versa, and the use of any gender includes any
       or all other genders, as the context requires.

12.6   The waiver by one party or the failure of the other party to perform any
       of its obligations under this Agreement shall not be deemed to be a
       waiver of any subsequent non-performance of that obligation, or the
       waiver of any other obligation of the other party. The failure by either
       party to enforce at any time or for any period any of the terms of this
       Agreement shall not be deemed to constitute a waiver.

12.7   If any Section of this Agreement is found to be void, voidable, illegal,
       or otherwise unenforceable, it shall not affect legality or validity of
       the other provisions of this Agreement.

IN WITNESS WHEREOF, this Agreement is signed in duplicate originals by the
Company and the Consultant as of the day and year first above written.

IVANHOE ENERGY INC.                     NAHWAN TRADING LLC


By: /s/ F.L. Daniel                     By: /s/ Mahfoudh Bin Sulaiman Al Hadabi
   ----------------                        ------------------------------------
     F.L. DANIEL                              MAHFOUDH BIN SULAIMAN AL HADABI


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