EXHIBIT 10.21
CONSULTING AGREEMENT
THIS AGREEMENT is made as of the 1st day of November, 2006.
BETWEEN:
XTRA-GOLD RESOURCES CORP., a company incorporated under the
laws of the State of Nevada, having an office at
0 Xxxxxxxx Xxxxxx
Xxxxxxx XX X0X 0X0 Xxxxxx
(hereinafter referred to as "XTRA-GOLD")
OF THE FIRST PART
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ALHAJI NANTOGMA ABUDULAI
P.O. Box CT2654
Cantonment, Accra, Ghana
(hereinafter referred to as "ABUDULAI")
OF THE SECOND PART
WHEREAS Abudulai possesses the requisite knowledge and experience in
connection with precious metals and mineral exploration companies, in
particular, with respect to business administration and operations for a
Ghanaian mining company;
AND WHEREAS Abudulai was appointed as Vice-President, Ghana Operations
on April 1, 2005 and was further appointed as the President, Community Relations
and director of Xtra-Gold's three Ghanaian subsidiaries; namely Xtra-Gold Mining
Limited ("XG MINING"), Xtra-Gold Exploration Limited ("XGEL") and Xtra Oil and
Gas (Ghana) Limited;
AND WHEREAS Xtra-Gold is desirous of engaging the services of Abudulai
to assist with the business management of its Ghanaian subsidiaries.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
sum of Ten ($10.00) Dollars, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto and other good and valuable consideration,
the parties hereto agree as follows:
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1. SERVICES
(a) Abudulai shall perform the managerial consulting services (the
"SERVICES") set forth in Schedule "A" as may be required from
time to time as authorized and directed by the Chief Executive
Officer ("CEO") of Xtra-Gold or such other officer as may be
designated by him.
(b) The scope of the Services will be primarily of a consulting
nature, wherein Abudulai will provide the Services as set out
in Schedule "A" annexed hereto.
2. FEES
(a) Rate
i. Xtra-Gold shall pay Abudulai a consulting fee at a
rate of US$1,000.00 (the "FEE") per month;
ii. Abudulai shall submit an itemized monthly invoice to
Xtra-Gold in order to receive the Fee.
(b) Xtra-Gold shall:
i. pay the Fee within one week following the submission
of Abudulai's invoice but in no event later then the
end of the relevant month; and
ii. process a wire transfer payment of the Fee as part of
the following month's budget submitted to Xtra-Gold
by XG Mining or in such other manner as determined by
Xtra-Gold.
(c) The parties hereto agree that the Fee may be paid on a pro
rata weekly or other basis but in no event shall the Fee be
paid in advance of providing the Services, unless otherwise
approved in writing by Xtra-Gold.
3. TERM
(a) The initial term ("TERM") of this Agreement is for one year
commencing on the date first above written and may only be
renewed on such terms and conditions as the parties hereto may
agree to in writing prior to the end of the Term, failing
which this Agreement will immediately terminate and be of no
further force and effect.
(b) Notice of renewal may emanate from either party provided that
unless the Parties mutually agree in writing, no renewal of
this Agreement shall come into force.
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(c) Subsequent renewals of the Term shall be agreed upon in
writing between the parties no less than 30 days prior to the
expiration of the Term and shall be made on the same terms and
conditions as set out in this Agreement.
4. REIMBURSEMENT OF EXPENSES
Abudulai will submit a report of reasonable expenses actually and
properly incurred, for each month during which the Services were performed, by
facsimile or electronic mail transmission to the CEO and Secretary and Treasurer
of Xtra-Gold for their review and approval, together with original valid
receipts. Xtra-Gold shall reimburse Abudulai for his approved expenses within 10
days after receipt of each expense report.
5. REPRESENTATIONS OF ABUDULAI
(a) Abudulai represents that he has the requisite qualifications,
experience and capabilities to perform the Services to a
standard of care, skill and diligence acceptable within the
mining sector.
(b) The parties hereto acknowledge that Abudulai has completed an
Officer's and Director's Questionnaire (the "QUESTIONNAIRE").
The parties hereto agree that Xtra-Gold shall have the right
to terminate this Agreement without advance notice in the
event that the Questionnaire reveals information that, in the
determination of the board of directors of Xtra-Gold (the
"BOARD"), could reasonably adversely affect Xtra-Gold's
disclosure in its SEC filings.
6. STOCK OPTIONS
On May 1, 2006, the "BOARD" granted Abudulai an aggregate of 108,000
non-qualified stock options (the "OPTIONS") on the following terms and as more
particularly set forth in a stock option agreement (the "OPTION AGREEMENT")
entered into between the Parties:
(a) the price at which the Options may be exercised is U.S.$0.70
per share;
(b) the term of the Options shall be for three (3) years (the
"OPTION PERIOD") and shall expire three (3) years from the
date of grant (the "EXPIRY DATE");
(c) the Options shall vest at the rate of 3,000 Options in each
month of the Option Period from June 1, 2006;
(d) any portion of the Options that have vested and have not been
exercised (the "ACCRUED Options"), shall accrue to the benefit
of Abudulai for a period of time as may be set out in the
Option Plan referred to in subparagraph (j) hereunder or in
accordance with securities laws governing Xtra-Gold, but in no
event shall the Accrued Options be exercised later than the
earlier of (a) the Expiry Date; and (b) the exercise date
contemplated in subparagraphs (e), (f), (g) and (h) hereunder;
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(e) in the event of termination as a result of Abudulai's
voluntary resignation, all Accrued Options must be exercised
within 90 days from the date of the resignation by Abudulai,
failing which the Accrued Options will be cancelled;
(f) in the event of the death of Abudulai during the Term, all
Accrued Options must be exercised by Abudulai's estate within
one year from the date of Abudulai's death, failing which the
Accrued Options will be cancelled.
(g) in the event that Abudulai is terminated by Xtra-Gold, without
cause, then in such event Xtra-Gold agrees that Abudulai shall
retain 100% of the Accrued Options and 50% of the unvested
Options (the "Unvested Options"); provided, however that the
Options referred to in this subparagraph must be exercised no
later than 90 days following such termination, failing which
such Options will be cancelled;
(h) in the event that Abudulai is terminated by Xtra-Gold, with
cause, then in such event Xtra-Gold agrees that Abudulai shall
retain 100% of the Accrued Options; provided, however that the
Accrued Options must be exercised no later than 90 days
following such termination, failing which the Accrued Options
will be cancelled. All Unvested Options will be cancelled
immediately upon termination, with cause;
(i) in the event of a Change of Control of Xtra (as defined
herein), all Options granted to Abudulai shall vest in which
event, Abudulai will have the right to exercise such Options
within 90 days following the completion of such Change of
Control. For clarity purposes, a "CHANGE OF CONTROL" shall
mean the occurrence of (a) any person, other than an Employee
(as such term is used in Section 13(d) and 14(d) of the
Exchange Act is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act, directly or indirectly,
of securities of the Company representing 50% or more of the
combined voting power of the Company's outstanding securities
then having the right to vote at elections of directors; or
(b) the individuals who at the commencement date of the
agreement entered into between the consultant and our Company
(the "MC AGREEMENT"), constitute the Board, cease for any
reason to constitute a majority thereof unless the election,
or nomination for election, of each new director was approved
by a vote of at least two-thirds of the directors then in
office who were directors at the commencement of the MC
Agreement; or (c) there is a failure to elect two or more
candidates nominated by management of the Company to the
Board; or (d) the business of the Company for which the
consultant's services are principally performed is disposed of
by the Company pursuant to a partial or complete liquidation
of the Company, a sale of assets (including stock of a
subsidiary of our Company) or otherwise.
(j) Xtra-Gold implemented and adopted a 2005 equity compensation
plan (the "OPTION PLAN") which implementation and adoption was
approved in writing by the Board in June 2005;
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(k) the share certificate or certificates issued as a result of
the exercise of the Options from time to time shall bear a
restrictive legend with respect to the resale of the shares in
connection therewith. In particular, until such time that a
registration statement has been filed by Xtra-Gold and
accepted by the U.S. Securities and Exchange Commission, in
accordance with Rule 144: (i) the shares cannot be resold
unless held for two years; or alternatively (ii) if Xtra-Gold
is a reporting company, then the applicable hold period shall
be one year from the date of the issuance of shares; and
(l) the Options shall at all times be subject to the terms of the
Option Agreement and the Option Plan.
7. PLACE OF WORK
Abudulai shall render the Services primarily in the Republic of Ghana
or at such other place or places as may be reasonably requested by Xtra-Gold
from time to time as deemed appropriate for the performance of his Services.
8. INDEPENDENT CONSULTANT
(a) Abudulai shall not be construed to an employee or agent of
Xtra-Gold or any of its subsidiaries (collectively referred to
as "XTRA-GOLD") but is and at all times shall remain an
independent contractor, who shall have no authority to bind or
commit Xtra-Gold in any manner excepting only where
specifically authorized in writing to that effect.
(b) Abudulai shall not be entitled to nor shall receive any
benefit normally provided to Xtra-Gold's employees including,
but not limited to, vacation pay, disability and other
insurance coverage, not otherwise referred to herein, and sick
pay or retirement funds;
(c) In accordance with Ghanaian law, as Xtra-Gold is a
non-resident, Xtra-Gold is not required to withhold any
portion of the Fee paid to Abudulai nor is it required to
submit any withholding tax to the Ghana Internal Revenue
Services.
(d) No withholding for federal or state income taxes or any other
tax or contribution shall be deducted from payments rendered
to Abudulai. Abudulai herein agrees to be solely responsible
for the payment of taxes or contributions due on any amounts
received by Abudulai under this Agreement.
9. EXCLUSIVITY OF ABUDULAI
Abudulai agrees to provide his Services exclusively to Xtra-Gold during
the Term; except for services which he provides to CME & Company or its
subsidiaries; and to the Canadian Business Association in Ghana as its
President; provided however, should Abudulai be required to provide his services
to any other unrelated party, he must notify Xtra-Gold within seven days of such
event and obtain its written consent.
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10. PROGRESS REPORTS
Abudulai shall provide written progress reports to Xtra-Gold within
three (3) days following each week of each month during the Term of this
Agreement and any subsequent renewal thereof.
11. CONFIDENTIALITY
During the term of this Agreement and thereafter, in perpetuity,
Abudulai shall maintain all matters involving Xtra-Gold and the Services
performed by Abudulai in the strictest confidence, except insofar as shall be
required in order for Abudulai to perform the Services hereunder or as may be
authorized in writing by Xtra-Gold, or as may come into the public domain
through sources beyond the control of Abudulai or Xtra-Gold or as may be
required by law.
12. INDEMNIFICATION
In the event of any legal action commenced by a corporation or an
individual with respect to Abudulai's Services under this Agreement, Xtra-Gold
hereby agrees to indemnify and hold harmless Abudulai from and against all such
actions, claims, liabilities, costs and expenses and the legal fees and
disbursements in connection therewith shall be borne by Xtra-Gold; provided that
the indemnification provided under this paragraph shall not be available to the
extent of Abudulai's gross negligence, willful misconduct, violation of any
applicable statute, rule or regulation, or under circumstances where applicable
law does not permit indemnification.
13. OWNERSHIP OF INFORMATION
Any and all information and work product, documents or any related data
or material with respect to the Services provided by Abudulai shall remain the
exclusive property of Xtra-Gold and Abudulai shall have no claim or interest
therein whatsoever. This term shall survive the expiration or earlier
termination of this Agreement.
14. ASSIGNMENT
Abudulai may not assign this Agreement or any of the Services without
having first obtaining the written approval of Xtra-Gold.
15. TERMINATION
With respect to termination of this Agreement:
(a) either Abudulai or Xtra-Gold may terminate this Agreement
without reason or cause by first providing the other Party
with one (1) month's written notice in advance of such
termination;
(b) Xtra-Gold may terminate this Agreement, without providing
Abudulai with any notice of termination, in the event of any
one of the following causes:
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(i) Abudulai is convicted of a crime;
(ii) Abudulai commits fraud or similar actions against
Xtra-Gold;
(iii) Abudulai commits willful misconduct; or
(iv) Abudulai commits habitual intoxication or substance
abuse.
(c) upon termination of this Agreement, Abudulai warrants that he
shall deliver to Xtra-Gold at its request any and all
materials, work product and information relating to the
Services including, but not limited to, any and all files,
agreements, reports, correspondence, analytical work,
equipment and every other matter related thereof; and
(d) Abudulai shall also maintain all matters herein in confidence
in perpetuity after such termination, unless required to
disclose such matters under law.
16. ADDRESS FOR DELIVERY OR NOTICE
Each notice under this Agreement shall be made in writing and may be
sent by facsimile or electronic formatted transmission (e-mail) or delivered to
the address for such Party as noted hereunder:
(a) if to Xtra-Gold:
(i) by regular mail or courier to:
0 Xxxxxxxx Xxxxxx
Xxxxxxx XX X0X 0X0 Xxxxxx
(ii) by fax transmission to:
(000) 000-0000
(iii) by e-mail transmission to:
xxxxxxxxxxxx@xxxxxx.xxx;
with a copy to:
xxxxx@xxxxxxxxx.xx
(b) if to Abudulai:
(i) by regular mail or courier to:
CT2654
Cantonments, Accra, Ghana
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(ii) by fax to:
011 233 21 519106
(iii) by e-mail transmission to:
xxxxxxxxx@xxxxx.xxx
Either party may change its mailing address, e-mail address or
facsimile number by notifying the other party in writing.
20. SEVERABILITY AND CONSTRUCTION OF AGREEMENT
Each section, paragraph, term and provision of this Agreement and any
portion thereof shall be considered severable and, if for any reason whatsoever,
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 by a
final ruling issued by a court, agency or tribunal with competent jurisdiction,
then that ruling shall not impair the operation of any other portions of this
Agreement as may remain otherwise intelligible (all of which shall remain
binding on the parties hereto and continue to be of full force and effect as of
the date upon which the ruling becomes final).
21. CONSENTS AND WAIVERS
No consent or waiver by either party in respect of any breach of a
provision of this Agreement shall be deemed a consent or waiver of any other
breach of this Agreement and no party shall have the benefit of a plea of laches
or acquiescence on account of consent, waiver or forbearance of any antecedent
breach of any provision of this Agreement.
22. ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
23. ENTIRE AGREEMENT
This document contains the entire agreement made between the parties
hereto as of the date of this Agreement and no representations, inducements,
promises or agreements not embodied or referenced herein shall be of any force
or effect, unless the same are set forth in writing and signed by the parties
hereto.
24. AMENDMENTS TO AGREEMENT
This Agreement may be amended from time to time as agreed to in writing
between the parties. Any amending agreement together with the unamended sections
of this Agreement shall then constitute the entire agreement between the
parties.
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25. GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL
This Agreement will be governed by and construed in accordance with the
laws prevailing in the State of Nevada. The parties acknowledge and agree that
the courts in Toronto, Ontario shall be the exclusive venue and proper forum in
which to adjudicate any case or controversy arising either, directly or
indirectly, under or in connection with this Agreement and the Parties further
agree that, in the event of litigation arising out of or in connection with this
Agreement in these courts, they will not contest or challenge the jurisdiction
or venue of these courts. The Parties further agree and hereby waive and release
any right to a trial by jury in any action arising out of the interpretation,
enforcement or breach of this Agreement.
26. COUNTERPARTS
This Agreement may be signed by the parties hereto in counterparts,
each of which counterpart when so signed shall be deemed to be an original, and
such counterparts together shall constitute one and the same instrument and
notwithstanding the date of execution will be deemed to bear the execution date
as set forth in this Agreement. This Agreement may be executed by facsimile and
such facsimile or facsimiles shall be deemed to represent the original
Agreement.
27. NO PARTNERSHIP OR AGENCY
The parties hereto have not created a partnership and nothing contained
in this Agreement shall in any manner whatsoever constitute any party as the
partner, agent or legal representative of the other party, nor create any
fiduciary relationship between them for any purpose whatsoever. No party shall
have any authority to act for or assume any obligation or responsibility on
behalf of the other party, except as may be from time to time agreed to in
writing between the parties or as otherwise expressly provided.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first above written.
SIGNED, SEALED AND DELIVERED ) XTRA-GOLD RESOURCES CORP.
in the presence of )
)
) Per: /s/ Xxxxxxx Xxxxxx (Xxx) XxXxxxxxx
) XXXXXXX XXXXXX (XXX) XXXXXXXXX
) Chairman and ChiefExecutive Officer
)
)
/s/ Xxxxxxxx Xxxxxx ) /s/ Alhaji Nantogma Abudulai
----------------------------------- ) ----------------------------
Signature of Witness ) ALHAJI NANTOGMA ABUDULAI
)
Xxxxxxxx Xxxxxx )
----------------------------------- )
Print Name of Witness )
SCHEDULE "A"
SCOPE OF SERVICES TO BE PROVIDED BY ALHAJI NANTOGMA ABUDULAI
TO XTRA-GOLD RESOURCES CORP.
The scope of the Services shall not include "day to day" operations of
our Ghanaian subsidiaries but shall include, among other things:
--> managing and improving community and government relations as
may be required from time to time including but not
necessarily restricted to, relationships with the Minerals
Commission, the Minister of Lands, Forestry and Mines, the
Water Resources Commission, the Environmental Protection
Agency and the Ghana National Petroleum Corporation, by acting
as Xtra-Gold's primary liaison and attending meetings with
related officials on an as needed basis;
--> managing specific executions on an as needed basis including,
but not limited to, facilitating the procurement of licences,
leases, permits and other government approvals and handling
any political or environmental issues that may arise from time
to time;
--> facilitating the exchange of information and/or documentation
with Ghanaian governmental authorities;
--> participating in property acquisitions and dispositions from
time to time;
--> reviewing all material contracts to be entered into by the
Ghanaian subsidiaries and providing comment to the Chairman of
the Ghanaian subsidiaries and the CEO of Xtra-Gold;
--> providing support in connection with financial approvals as
may be required from time to time including, but not limited
to review of monthly budgets, expenditures and capital costs
of the Ghanaian subsidiaries and counter-execution of cheques;
--> providing representation of Xtra-Gold with respect to its
Ghanaian operations;
--> participating in meetings of the management committee as a
member of such committee;
--> providing weekly status/progress reports to the Chairman of
the Ghanaian subsidiaries, with a copy to the CEO of Xtra-Gold
on matters being attended to on behalf of Xtra-Gold and
reporting directly to the Chairman;
--> reviewing compensation structure and/or issues in connection
with Accra support staff and labourers at the Mine Camp;
--> liaising from time to time with our Ghanaian professional
advisors;
--> providing support with respect to the procurement of goods in
Ghana.
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SPECIFIC ACCOUNTABILITY
The CEO of Xtra-Gold together and/or the Chairman of the Ghanaian subsidiaries
shall review the performance of Abudulai in connection with each of the
above-noted responsibilities (the "RESPONSIBILITIES"), which may be amended from
time to time, and will record and discuss their assessment with the board of
directors of the relevant company and Abudulai within thirty (30) days following
the commencement of full scale mine production at XG Mining's Kwabeng Project,
but in no event later than six (6) months following the execution of the
management consulting agreement dated November 1, 2006 of which this Schedule
"A" forms a part thereof. Thereafter, the CEO and/or the Board will review the
performance of Abudulai on an annual basis in connection with the
Responsibilities and will record and discuss this assessment with Abudulai at
such time.
PERFORMANCE
Above-average timely performance is expected in all areas of responsibility and
considered compensation is provided within the position's compensation and stock
option base. The success of Xtra-Gold and its ability to thrive and prosper in a
competitive environment, together with the successful performance by Abudulai
will be recognized in a reward for initiative and the Board may elect to award
additional compensation to be determined, based on the achievement of such
milestones as may be established from time to time.
