CONSULTING AGREEMENT
This
Consulting Agreement (“Agreement”) is made as of the 31’st day of July, 2006 by
and between Xx. Xxxxxxx X. Xxxxxxx (the “Consultant”), and Adera Mines Limited
whose address is 00000 Xxxxxx Xxxxxx Xxxxxxxxxx, Xxxxxxxxxx 00000 (the
“Company”), in reference to the following:
RECITALS
A. The
Company is acquiring the stock and assets of an operating Company known as
Chatsworth Acquisition Corporation and in connection with such acquisition
is
obtaining financing in the amount of $6,000,000 the (“Financing”).
B. It
is a
condition to the closing of the Financing that the Company obtains the services
of Consultant to perform the functions of the chief financial officer (“CFO”)
for the Company after the Financing is closed.
C. The
Consultant desires to perform the duties and tasks associated with being the
CFO
of the Company as set forth in this Agreement and as the Board of Directors
may
determine form time to time and the Company wishes to retain the Consultant
for
such services.
NOW,
THEREFORE,
for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Consultant agree as follows:
AGREEMENT
1. Term.
The
Company retains the Consultant and the Consultant accepts this appointment
with
the Company for a period of twelve months, beginning on July 31, 2006 and ending
on July 30, 2007 (the “Term”)
2. Duties
of Consultant. The
Consultant agrees to perform the consulting services (the “Services” set forth
on Exhibit “A” to this Agreement and made a part of it. The Consultant will
determine the method, details and means of performing the services. The
Consultant may, with the prior consent of the Chief Executive Officer, use
employees or other subcontractors to assist the Consultant with the performance
of the services. The Services may be modified from time to time by the Board
of
Directors of the Company.
3. Compensation.
(a) Cash.
The
Company shall pay to the Consultant, as compensation for the services, a monthly
retainer of $8,000.00, payable on the first business day of each
month.
(b) Options.
The
Company hereby grants to the Consultant options to purchase 500,000 shares
of
common stock of the Company, at a price per share of $0.30. The option shall
exercisable be for a term of three years from the date hereof. The Option shall
be exercisable for cash for the first twelve months and thereafter exercisable
on a “cashless” basis. Following
Board approval of our 2006 Equity Incentive Plan (the “Plan”) (which is
anticipated by August 30, 2006), your option grant shall be from the Plan and
shall be subject to the terms thereof. The
form
of Option Agreement is attached hereto as Exhibit
B.
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4. Nondisclosure.
4.1 Property
Belonging to Company.
The
Consultant agrees that all developments, ideas, devices, improvements,
discoveries, apparatus, practices, processes, methods, concepts and products
(collectively the “Inventions”) developed by the Consultant during the term of
this Agreement are the exclusive property of the Company and shall belong to
the
Company.
4.2 Access
to Confidential Information. The
Consultant agrees that during the term of the business relationship between
the
Consultant and the Company, the Consultant will have access to and become
acquainted with confidential proprietary information (“Confidential
Information”) which is owned by the Company and is regularly used in the
operation of the Company’s business. The
Consultant agrees that the term “Confidential Information” as used in this
Agreement is to be broadly interpreted and includes (i) information that has,
or
could have, commercial value for the business in which the Company is engaged,
or in which the Company may engage at a later time, and (ii) information that,
if disclosed without authorization, could be detrimental to the economic
interests of the Company.
The
Consultant agrees that the term “Confidential
Information” includes, without limitation, any patent, patent application,
copyright, trademark, trade name, service xxxx, service name, “know-how,”
negative “know-how,” trade secrets, customer and supplier identities,
characteristics and terms of agreement, details of customer or consultant
contracts, pricing policies, operational methods, marketing plans or strategies,
product development techniques or plans, business acquisitions plans, science
or
technical information, ideas, discoveries, designs, computer programs (including
source codes), financial forecasts, unpublished financial information, budgets,
processes, procedures, formulae, improvements or other proprietary or
intellectual property of the Company, whether or not in written or tangible
form, and whether or not registered, and including all memoranda, notes,
summaries, plans, reports, records, documents and other evidence
thereof.
The
Consultant acknowledges that all Confidential Information, whether prepared
by
the Consultant or otherwise acquired by the Consultant in any other way, shall
remain the exclusive property of the Company.
4.3 No
Unfair Use by Consultant.
The
Consultant promises and agrees that the Consultant (which shall include its
employees and contractors) shall not misuse, misappropriate, or disclose in
any
way to any person or entity any of the Company’s Confidential Information,
either directly or indirectly, nor will the Consultant use the Confidential
Information in any way or at any time except as required in the course of the
Consultant’s business relationship with the Company. The Consultant agrees that
the sale or unauthorized use or disclosure of any of the Company’s Confidential
Information constitutes unfair competition. The Consultant promises and agrees
not to engage in any unfair competition with the Company and will take measures
that are appropriate to prevent its employees or contractors from engaging
in
unfair competition with the Company.
4.4 Further
Acts.
The
Consultant agrees that, at any time during the term of this Agreement or any
extension thereof, upon the request of the Company and without further
compensation, but at no expense to the Consultant, the Consultant shall perform
any lawful acts, including the execution of papers and oaths and the giving
of
testimony, that in the opinion of the Company, its successors or assigns, may
be
necessary or desirable in order to obtain, sustain, reissue and renew, and
in
order to enforce, perfect, record and maintain, patent applications and United
States and foreign patents on the Company’s inventions, and copyright
registrations on the Company’s inventions.
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4.5 Obligations
Survive Agreement.
The
Consultant’s obligations under this S Section
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shall survive the expiration or termination of this Agreement for a period
of
three (3) years.
5. Termination.
5.1 Termination
on Default. Should
either party default in the performance of this Agreement or materially breach
any of its provisions, the non-breaching party may terminate this Agreement
by
giving written notification to the breaching party. Termination shall be
effective immediately on receipt of said notice. For purposes of this section,
material breaches of this Agreement shall include, but not be limited to, (i)
the failure by the Company to pay the compensation set forth in section 3 above;
(ii) the willful breach or habitual neglect by the Consultant of the duties
which it is required to perform under the terms of this Agreement; (iii) the
Consultant’s commission of acts of dishonesty, fraud, or misrepresentation; (iv)
the failure by the Consultant to conform in all material respects to all laws
and regulations governing the Consultant’s duties under this Agreement; or (v)
the commission by the Consultant of any act that tends to bring the Company
into
public scandal or which will reflect unfavorably on the reputation of the
Company.
5.2 Termination
on Notice. Either
party may terminate this Agreement at any time by giving thirty (30) days
written notice to the other party.
5.3 Automatic
Termination. This
Agreement terminates automatically on the occurrence of any of the following
events: (i) the bankruptcy or insolvency of either party; or (ii) the death
or
disability of the Consultant.
5.4 Return
of Company Property.
Upon the
termination or expiration of this Agreement, the Consultant shall immediately
transfer to the Company all files (including, but not limited to, electronic
files), records, documents, drawings, specifications, equipment and similar
items in its possession relating to the business of the Company or its
Confidential Information (including the work product of the Consultant created
pursuant to this Agreement).
6. Status
of Consultant.
The
Consultant understands and agrees that its employees are not employees of the
Company and that its employees shall not be entitled to receive employee
benefits from the Company, including, but not limited to, sick leave, vacation,
retirement, death benefits, or an automobile. The Consultant shall be
responsible for providing, at the Consultant’s expense and in the Consultant’s
name, disability, worker’s compensation or other insurance as well as licenses
and permits usual or necessary for conducting the services hereunder.
Furthermore, the Consultant shall pay, when and as due, any and all taxes
incurred as a result of the Consultant’s compensation hereunder, including
estimated taxes, and shall provide the Company with proof of said payments,
upon
demand. The Consultant hereby agrees to indemnify the Company for any claims,
losses, costs, fees, liabilities, damages or injuries suffered by the Company
arising out of the Consultant’s breach of this section.
7. Representations
by Consultant.
The
Consultant represents that the Consultant has the qualifications and ability
to
perform the services in a professional manner, without the advice, control,
or
supervision of the Company. The Consultant shall indemnify, defend, and hold
harmless the Company, and the Company’s officers, directors, and shareholders
from and against any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, and deficiencies, including,
without limitation, interest, penalties, and reasonable attorney fees and costs,
that the Company may incur or suffer and that arise, result from, or are related
to any breach or failure of the Consultant to perform any of the
representations, warranties and agreements contained in this
Agreement.
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8. Business
Expenses.
The
Company shall reimburse the Consultant for all reasonable business expenses
incurred by the Consultant, provided that each such expenditure qualifies as
a
proper deduction on the Company’s federal and state income tax return and
provided such expenses are approved in advance by the Chief Executive Officer.
Each such expenditure shall be reimbursable only if the Consultant furnishes
to
the Company adequate records and other documentary evidence required by federal
and state statutes and regulations issued by the appropriate taxing authorities
for the substantiation of that expenditure as an income tax
deduction.
9. Notices.
Unless
otherwise specifically provided in this Agreement, all notices or other
communications (collectively and severally called “Notices”) required or
permitted to be given under this Agreement, shall be in writing, and shall
be
given by: (A) personal delivery (which form of Notice shall be deemed to have
been given upon delivery), (B) by telegraph or by private airborne/overnight
delivery service (which forms of Notice shall be deemed to have been given
upon
confirmed delivery by the delivery agency), or (C) by electronic or facsimile
or
telephonic transmission, provided the receiving party has a compatible device
or
confirms receipt thereof (which forms of Notice shall be deemed delivered upon
confirmed transmission or confirmation of receipt). Notices shall be addressed
to the address set forth in the introductory section of this Agreement, or
to
such other address as the receiving party shall have specified most recently
by
like Notice, with a copy to the other party.
10. Choice
of Law and Venue.
This
Agreement shall be governed according to the laws of the State of California.
Venue for any legal or equitable action between the Company and the Consultant
which relates to this Agreement shall be in the County of Los
Angeles.
11. Entire
Agreement.
This
Agreement supersedes any and all other agreements, either oral or in writing,
between the parties hereto with respect to the services to be rendered by the
Consultant to the Company and contains all of the covenants and agreements
between the parties with respect to the services to be rendered by the
Consultant to the Company in any manner whatsoever. Each party to this agreement
acknowledges that no representations, inducements, promises, or agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf
of
any party, which is not embodied herein, and that no other agreement, statement,
or promise not contained in this Agreement shall be valid or binding on either
party.
12. Counterparts.
This
Agreement may be executed manually or by facsimile signature in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute but one and the same instrument.
13. Severability.
If any
term or provision of this Agreement or the application thereof to any person
or
circumstance shall, to any extent, be determined to be invalid, illegal or
unenforceable under present or future laws effective during the term of this
Agreement, then and, in that event: (A) the performance of the offending term
or
provision (but only to the extent its application is invalid, illegal or
unenforceable) shall be excused as if it had never been incorporated into this
Agreement, and, in lieu of such excused provision, there shall be added a
provision as similar in terms and amount to such excused provision as may be
possible and be legal, valid and enforceable, and (B) the remaining part of
this
Agreement (including the application of the offending term or provision to
persons or circumstances other than those as to which it is held invalid,
illegal or unenforceable) shall not be affected thereby and shall continue
in
full force and effect to the fullest extent provided by law.
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14. Preparation
of Agreement.
It
is
acknowledged by each party that such party either had separate and independent
advice of counsel or the opportunity to avail itself or himself of same. In
light of these facts it is acknowledged that no party shall be construed to
be
solely responsible for the drafting hereof, and therefore any ambiguity shall
not be construed against any party as the alleged draftsman of this
Agreement.
15. No
Assignment of Rights or Delegation of Duties by Consultant; Company’s Right to
Assign.
The
Consultant’s rights and benefits under this Agreement are personal to it and
therefore no such right or benefit shall be subject to voluntary or involuntary
alienation, assignment or transfer. The Company may assign its rights
and delegate its obligations under this Agreement to any other person or
entity.
16. Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument, binding on all parties hereto. Any signature page of this Agreement
may be detached from any counterpart of this Agreement and reattached to any
other counterpart of this Agreement identical in form hereto by having attached
to it one or more additional signature pages.
17. Electronically
Transmitted Documents.
If a
copy or counterpart of this Agreement is originally executed and such copy
or
counterpart is thereafter transmitted electronically by facsimile or similar
device, such facsimile document shall for all purposes be treated as if manually
signed by the party whose facsimile signature appears.
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WHEREFORE,
the
parties have executed this Agreement on the date first written
above.
| “CONSULTANT” | ||
| |
|
|
| By: | ||
|
Xxxxxxx X. Xxxxxxx |
||
| “COMPANY” | ||
| Adera Mines Limited | ||
| |
|
|
| By: | ||
|
X. Xxxxxxx Xxxxxx III, its President |
||
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EXHIBIT
“A”
DUTIES
OF CONSULTANT
All
duties of a Chief Financial Officer including overseeing the financial books
and
records of the Company, preparing financial statements, preparing reports and
registrations with the Securities and Exchange Commission (“SEC”), coordinating
the audit of the Company’s books and records and financial statements,
maintaining the Company’s compliance with all accounting regulations applicable
to the Company, coordinating the Company’s compliance with the accounting and
financial regulations of the SEC, the Securities Act of 1933 and the Securities
Exchange Act of 1934 and the rules and regulations thereunder, including the
Xxxxxxxx-Xxxxx Act, hiring and supervising personnel in the booking keeping
and
accounting functions of the Company, reporting to the Chief Executive Officer
or
Board of Directors, as the Board of Directors may from time to time determine,
together with all related or ancillary duties and services necessary or
desirable to fulfill the foregoing.
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EXHIBIT
“B”
OPTION
Agreement
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