This exclusive contractual agreement, effective March 19, 2001, is made and
entered into by and between, Silverado Gold Mines Ltd. and Xx. Xxxxxxx Xxxxxxx,
of Coal-Water Fuel Services.
Silverado Gold Mines Ltd., (the Company) and Xx. Xxxxxxx Xxxxxxx, (the
Executive) agree to the following:
Section 1.0 Employment:
1.1 Engagement: The Company will cause Silverado Gold Mines Inc. to employ
the Executive as its Vice President and director of the Fuels Technology
Division subject to and in accordance with the provisions of this contractual
agreement.
1.2 Duties: The Executive will serve as the primary developer of technology
to produce and utilize low-rank coal-water fuels (LRCWFs), and will provide the
following intellectual property exclusively to the Company, for the duration of
this exclusive contractual agreement.
Low-rank coal (LRC) conversion and utilization expertise.
Technology for the production and utilization of LRCWFs.
Engineering design and cost information for a demonstration and/or commercial
scale LRCWF facility.
Knowledge of the production of LRCWFs from LRCs from around the world including,
Australia, China, India, and Indonesia.
Technical and business contacts in major Pacific Rim energy importing nations,
including Japan and Korea.
Technical and business contacts in developing nations with LRCs, including
Australia, China, the Czeck Republic, India, Indonesia, Russia, and the Ukraine.
1.3 Attention and Effort: The Executive will devote sufficient time,
ability and attention to the business of the Company to accomplish the duties
described in Section 1.2 above.
1.4 During the term of this exclusive contractual agreement, the Executive
will not disclose to any other person, firm, corporation or government any of
his knowledge or information which in any way relates to the development,
production or utilization of LRCWF, and will not give assistance to, co-operate
with or otherwise help any other person, firm, corporation or government in any
way relating to the development, production or utilization of LRCWF without the
prior written approval of the President of the Company.
Exclusive Contractual Agreement 3/19/01 Page 1
Section 2.0 Compensation
2.1 Salary: Upon the Company obtaining funding to build a LRCWF
demonstration or commercial plant, the Executive shall be paid a base salary of
$U.S. 10,000 per month, and prior to receipt of such funding the Company shall
use its best efforts to pay the executive a salary.
2.2 Stock Compensation: The Executive will be issued a stock option for
1,200,000 shares of the Company which may be exercised on or after May 17, 2002
and from time to time at the price of $US 0.125 per share. The Executive will
be fully vested in the shares acquired pursuant to the exercise of this option
and can sell them subject only to fully complying with the requirements of the
U.S. "Securities Exchange Act" of 1934, the rules of the U.S. "Securities and
Exchange Commission" and the BC "Securities Act" and "Securities Rules" made
thereunder.
2.3 Royalty Payments: Subject to the following proviso, in exchange for the
Executive providing exclusive intellectual property concerning the production
and utilization of LRCWFs, the Company agrees to pay a royalty equal to 1.5% of
gross LRCWF sales to the Coal-Water Fuel Services Foundation for as long as
LRCWF made by the technology developed by the Executive is sold; Provided that
in respect of any agreement or arrangement reached or entered into with the
Malaysian Government or any Malaysian corporation or entity; whether or not
owned or controlled by the Malaysian Government the royalty payable shall be
0.5% of gross LRCWF sales.
2.4 Benefits: During the term of this exclusive contractual agreement, the
Executive will be entitled to participate in all benefit programs (medical,
disability, life insurance, etc.) offered by the Company.
2.5 Expenses: During the term of this exclusive contractual agreement, the
Executive will be entitled to participate in all benefit programs (medical,
disability, life insurance, etc.) offered by the Company.
2.6 Indemnification: Subject to applicable laws, the Company will indemnify
and hold the Executive harmless from any and all losses, judgments or claims the
Executive may suffer in the discharge of his duties for the Company, except
where such losses, judgements or claims arise directly or indirectly as a result
of the Executive's negligent or improper act or failure to act.
Exclusive Contractual Agreement 3/19/01 Page 2
Section 3.0 Term and Termination
3.1 Term: The term of this contractual agreement will commence upon signing
and will continue for a period of 10 years, unless terminated as per the
following.
3.2 Termination: If within two years after signing this contractual
agreement the Company has not developed funding to build a LRCWF demonstration
or commercial plant, this exclusive contractual agreement may be terminated by
either party.
Company: Silverado Gold Mines Ltd.
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By: /s/ Xxxxx X. Xxxxxxx
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Title: President
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Date: March 20, 2001
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Executive: Xx. Xxxxxxx Xxxxxxx
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By: /s/ Warrack Willson
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Title: Vice President & Director
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Fuels Technology Division
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Silverado Gold Mines Inc.
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Date: March 19, 2001
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Exclusive Contractual Agreement 3/19/01 Page 3
