EXHIBIT 10.11
MANAGEMENT AND OPERATIONAL SERVICES AGREEMENT
This Agreement is made effective as of the 15th day of September,
2003, between Assure Oil & Gas Corp. ("ASSURE"), a corporation incorporated
under the laws of the Province of Ontario, and Quarry Oil & Gas Ltd. ("QUARRY"),
a corporation incorporated under the laws of the Province of Alberta.
WHEREAS:
A. Quarry wishes to retain Assure to provide on a non-exclusive basis, in
accordance with the terms and conditions herein set forth, certain
management and operational expertise required in connection with
Quarry's business (the "SERVICES");
B. Assure has the personnel to provide the Services; and
C. Assure has agreed to provide the Services to Quarry in accordance with
the terms and conditions herein set forth;
NOW THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, the sufficiency of which is hereby expressly
acknowledged, Assure and Quarry (collectively the "parties" and individually a
"party") hereby agree as follows:
1. APPOINTMENT
1.1 Subject to the terms and conditions hereof, Quarry hereby designates and
appoints Assure to provide the Services, and grants Assure the power, authority
and discretion to do all such things as may be reasonably necessary for the
purposes of providing the Services; provided, however, that the retainer herein
provided shall not in any way:
(a) derogate from or prejudice the exercise of the powers or authority of
the board of directors of Quarry (the "BOARD"), and Assure shall act
in the performance and discharge of its functions hereunder pursuant
to the overall supervision and policy directions of the Board; or
(b) require Assure to provide any services in respect of, or grant Assure
any power, right or authority with respect to, any ongoing day-to-day
operations of the business carried on by Quarry, except as is provided
for in this Agreement or as requested by the Board.
1.2 Assure hereby accepts the aforesaid appointment and covenants and agrees
with Quarry that it shall provide the Services in accordance with the terms
hereof. Quarry acknowledges and agrees that, until otherwise determined by
Assure, Assure shall provide the Services by utilizing the personnel, and only
the personnel, set out in Schedule "A" hereto.
1.3 Assure shall provide the Services to Quarry as an independent contractor and
not as partner. The personnel utilized by Assure to provide the Services shall
not be deemed to be employees of Quarry. Assure shall have no power or authority
to bind Quarry or to assume or create any obligation or responsibility,
expressed or implied, on Quarry's behalf, or in its name, nor shall it represent
to anyone that it has such power or authority, except within the scope of the
Services. Nothing contained in this Agreement shall be regarded or construed as
creating any relationship (joint venture or partnership) between the parties
hereto other than as expressly set forth herein.
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2. TERM
2.1 The term of this Agreement, subject to Article 4, is six months from the
date first above written; provided, however, that this Agreement shall be
automatically renewed for further successive periods of three months each from
and after the expiry of the initial six month term and the expiry of any renewal
term, as applicable, upon the same terms and conditions herein provided,
including this renewal provision, unless either party hereto gives to the other
30 days' prior written notice of its intention not to further renew this
Agreement upon the expiry of either the initial term hereof or any renewal term,
in which event this Agreement shall be terminated at the end of such term.
3. FEE
3.1 Unless otherwise agreed, in consideration for the provision of the Services
by Assure to Quarry, Quarry shall pay Assure a monthly fee equal to the costs
("ASSURE'S COSTS") incurred by Assure in carrying out the Services each month,
provided, however, that in no event shall such fee exceed 75% of Assure's Costs
nor be less than 25% of Assure's Costs. Assure's Costs shall include, but are
not limited, the following costs incurred by Assure in respect of the personnel
utilized by Assure to provide the Services: salaries, fees, bonuses, benefits
and insurance costs referred to in Section 12.1.
3.2 Quarry shall from time to time reimburse Assure for all reasonable travel,
automobile, entertainment and other expenses actually and properly incurred by
it directly in connection with and required to provide the Services hereunder,
provided that proper statements and vouchers or other documentation verifying
such expenses shall first be delivered to Quarry.
3.3 Assure shall maintain weekly time records of its personnel provided and the
activities undertaken as part of the Services. Assure shall provide such time
records to Quarry on a monthly basis for approval. Such approved time records
shall form the basis of monthly invoices and shall agree exactly with such
invoices. At the end of each calendar month, Assure shall send an invoice to
Quarry which shall summarize the Services provided by Assure during such month,
and shall set out the personnel times spent and the corresponding charges
calculated in accordance with this Agreement. Quarry shall pay Assure the amount
owing for such month under Sections 3.1 and 3.2 hereof within 30 days of receipt
of the invoice for the Services.
4. TERMINATION
4.1 Either party may at any time hereafter terminate this Agreement by giving 45
days notice in writing of such termination to the other party. At the time of
the expiration of this Agreement, pursuant to such notice, all final accounts
shall be taken and adjusted between the parties and all liabilities and
obligations of each of them to the other shall be settled promptly thereafter.
4.2 In addition to any other remedy provided hereunder, or at law, either party
may, by written notice to the other, terminate this Agreement and any of its
obligations accruing therefrom without charge or liability for any of the
following reasons:
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(a) if the other party shall become insolvent or adjudged bankrupt or if
it takes any steps to compromise its debts generally;
(b) if the other party shall be in default under any of its covenants
contained in this Agreement and such default shall continue for more
than ten days after receipt of a written notice from the party hereto
not in default to cure same; or
(c) upon the commencement of proceedings for the liquidation, winding up
or dissolution of the other party; or
(d) upon any change in control (within the meaning of the Income Tax Act)
of the other party.
4.3 Upon termination of this Agreement for any reason Assure shall
immediately:
(a) cease to represent itself as providing Services to Quarry;
(b) deliver up to Quarry all "Confidential Information" and "Materials"
(as such terms are hereinafter defined), whether the same is in
Assure's actual possession or under its control; and
(c) disclose to Quarry the current state of the Services which are being
performed by Assure at the time of termination and provide a report
of, and all the materials reflecting, such current state of the
Services.
5. INDEMNITY
5.1 None of Assure, its shareholders, directors, officers, consultants, agents
or employees, shall be liable to Quarry for any loss or damages suffered by
Quarry resulting from any acts or omissions of Assure, its shareholders,
directors, officers, consultants, agents or employees hereunder unless
occasioned by or resulting from its or their gross negligence or wilful
misconduct.
5.2 Quarry shall indemnify and save harmless Assure, its shareholders,
directors, officers, consultants, agents and employees from and against any
third party liabilities, losses, expenses, costs, claims, demands or damages
arising out of or resulting from any act or omission of Assure, its
shareholders, directors, officers, consultants, agents or employees, in respect
of the performance of this Agreement except to the extent such liabilities,
losses, expenses, costs, claims, demands or damages arise out of or result from
the gross negligence or wilful misconduct of Assure, its shareholders,
directors, officers, consultants, agents or employees; provided, however, that
nothing done at the express instruction of or with the express consent Quarry
shall be considered gross negligence or wilful misconduct. At its expense,
Quarry agrees to defend any action or proceeding against Assure arising from any
act or omission of Assure, its shareholders, directors, officers, consultants,
agents or employees, except to the extent such action or proceeding arose due to
the gross negligence or wilful misconduct of Assure, its shareholders,
directors, officers, consultants, agents or employees.
5.3 The provisions of this Article 5 shall survive termination of this
Agreement.
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6. CONFIDENTIAL INFORMATION
6.1 In the course of performing the Services, Assure may obtain information
relating to Quarry or its business which is of a confidential and proprietary
nature (the "CONFIDENTIAL INFORMATION"). Assure shall not make use of the
Confidential Information other than as required for the performance of the
Services under this Agreement.
6.2 For a period of at least one year after the termination of this Agreement,
Assure shall not, without the consent of Quarry, divulge or allow access to the
Confidential Information to any person, corporation, association or otherwise,
except where:
(a) such Confidential Information is available to the public generally in the
form disclosed; or
(b) such disclosure of Confidential Information is compelled by applicable law.
Assure shall prevent Confidential Information being used or acquired by any
unauthorized person or persons.
6.3 The provisions of this Article 6 shall survive termination of this
Agreement.
7. TITLE TO PROPRIETARY DATA
7.1 All materials and information relating to Quarry's business (the
"MATERIALS") produced in the performance of the Services shall be and remain the
sole and exclusive property of Quarry and Assure shall not assert any rights to
or establish any claim to such Materials.
7.2 Assure shall whenever requested by Quarry execute any and all applications,
assignments and other instruments which Quarry shall deem necessary in order to
assure that the sole and exclusive right, title and interest in and to such
Materials remains with Quarry.
7.3 The provisions of this Article 7 shall survive termination of this
Agreement.
8. REPORTS AND INSPECTION
8.1 Assure shall furnish to Quarry, from time to time as requested by Quarry,
reports of the progress of the Services, reports containing a description of the
individual personnel provided by Assure and times spent and activities
undertaken by each such person and from time to time provide such other
information as may be reasonably requested by Quarry, in order to allow Quarry
to ensure the prompt and complete performance of the Services.
8.2 Quarry shall at all reasonable times have access to the Materials described
in Section 7.1 hereof during the performance of the Services and shall be
furnished with every reasonable facility for the purpose of ascertaining that
the Materials and Services are in accordance with the requirements of this
Agreement.
9. TAXES
9.1 All fees and charges payable pursuant to this Agreement are exclusive of all
value added, sales, use or other similar taxes, or levies payable in or to any
jurisdiction or authority whatsoever in connection with the provision of the
Services. Such taxes and levies are the sole responsibility of Quarry.
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10. COMPLIANCE WITH STATUTES
10.1 Assure shall in the performance of this Agreement comply with all
applicable laws, rules, regulations and orders, including but not limited to
laws, rules, regulations and orders pertaining to labour, wages, hours of work
and other similar provisions.
10.2 Assure shall be responsible for obtaining all necessary permits and
licenses and complying with all applicable codes and regulations in connection
with the performance of the Services. Assure shall take proper safety and health
precautions during the provision of the Services.
11. PROHIBITIONS AGAINST ASSIGNMENT
11.1 Assure shall not be at liberty to assign or delegate to others this
Agreement or any of its functions and duties hereunder without the prior written
consent of Quarry, which consent shall not be unreasonably withheld.
12. INSURANCE
12.1 Assure agrees to maintain at Assure's expense all normal insurance,
including, but not limited to, worker's compensation, disability, automotive
public liability, and unemployment insurance, covering all of its operations in
all Quarry locations in which Services will be performed by Assure under this
Agreement.
12.2 Assure shall provide Quarry with certification of compliance upon request.
In case of failure to furnish said certification or upon cancellation of any
required insurance, Quarry may terminate this Agreement or may withhold all
future payments until Assure complies with this requirement. Assure shall
provide thirty days prior written notice by registered mail to Quarry in the
event of cancellation or termination of such insurance.
13. GENERAL
13.1 In the event that any provisions contained in this Agreement shall be
declared invalid, illegal or unenforceable by a court or other lawful authority
of competent jurisdiction, this Agreement shall continue in force with respect
to the enforceable provisions and all rights and remedies accrued under the
enforceable provisions shall survive any such declaration, and any
non-enforceable provision shall to the extent permitted by law be replaced by a
provision which, being valid, comes closest to the intention underlying the
invalid, illegal or unenforceable provision.
13.2 No amendment, modification or rescission of this Agreement shall be
effective unless set forth in writing signed by a duly authorized representative
of each party.
13.3 No provision hereof shall be deemed waived and no breach excused, unless
such waiver or consent excusing the breach shall be in writing and signed by the
party giving such waiver or consent. A waiver by a party of any provision of
this Agreement shall not be construed as a waiver of a further breach of the
same provision.
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13.4 Any terms or conditions of this Agreement by which obligations of either
party are expressed to be applicable or which extend or may extend beyond
termination of this Agreement shall survive and continue in full force and
effect, except to the extent expressly set out herein.
13.5 All notices and other communications required hereunder shall be in writing
and shall be delivered personally or by telecopier to the parties hereto at the
following addresses:
TO ASSURE:
Assure Oil & Gas Corp.
000 - 0xx Xxxxxx X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: President
TELECOPIER NO.: (000) 000-0000
TO QUARRY:
Quarry Oil & Gas Ltd.
Xxxxx 0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Secretary
TELECOPIER NO.: (000) 000-0000
Any such notice or other communication shall be deemed to have been
given and received on the day on which it was so delivered or transmitted, and
if not a business day, then on the business day next following the day of
delivery. Either party may change its address for notice in the aforesaid
manner.
13.6 Time shall be of essence of this Agreement.
13.7 The parties hereto covenant and agree that each of them will, from time to
time, at the request of the other party, but without further consideration, do,
or cause to be done, all such further acts and deliver such documents, deeds and
assurances as may be reasonably requested in order to give proper effect to the
terms hereof.
13.8 The headings in this Agreement are inserted for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
13.9 Words importing the singular number shall include the plural and vice
versa, and words importing the masculine shall include the feminine gender and
vice versa, and words importing individuals shall include firms and corporations
and vice versa.
13.10 This Agreement shall be construed and enforced in accordance with and the
rights of the parties hereto shall be governed by the laws of the Province of
Alberta. Each of the parties hereto hereby irrevocably attorns to the
jurisdiction of the courts of the Province of Alberta for all matters arising
out of or in connection with this Agreement.
13.11 This Agreement contains all of the terms and provisions of the agreement
between the parties related to its subject-matter and there are no oral
understandings, statements or stipulations bearing upon the meaning and effect
of this Agreement which have not been incorporated herein.
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13.12 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
13.13 This Agreement may be executed by the parties hereto in separate
counterparts or duplicates each of which when so executed and delivered shall be
an original, but all such counterparts or duplicates shall together constitute
one and the same instrument. This Agreement may be delivered by facsimile
transmission.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first above written.
ASSURE OIL & GAS CORP.
Per: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Director
QUARRY OIL & GAS LTD.
Per: /s/ Xxx Xxxxxxxx
-------------------------------------
Name: Xxx Xxxxxxxx
Title: Director
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NAME SERVICES TO BE PROVIDED
---- -----------------------
Xxxxxx Lalach President of Quarry.
Xxxxx XxXxxx Oversee the implementation of Quarry's exploration programs.
Xxx Xxxxxxx Manage Quarry's operations.
Cam Xxxxx Manage Quarry's land asset base.
Xxxxx Xxxxxxx Manage Quarry's exploration activities.
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