CONTRACT FOR SERVICES
THIS
CONTRACT made the
24th day of March 2004
BETWEEN:
XXXXXXX
X. X. XXXXXXXX, P.
Xxx., of
0000
Xxxxxxxxxx Xxxx
Xxxxxxxxx,
XX X0X 0X0
(herein
referred to as “Xxxxxxxx”)
OF THE
FIRST PART
AND:
DRC
RESOURCES CORPORATION., a body
corporate duly incorporated under the laws of the Province of British Columbia
and having its principal place of business at Xxxxx 000 - 000 Xxxx Xxxxxx,
Xxxxxxxxx, XX
(herein
referred to as “the Company”)
OF THE
SECOND PART
WHEREAS Xxxxxxxx
has represented that he is experienced and proficient in managing the
exploration, design and development of a British Columbia mining project to
production;
AND
WHEREAS the
Company has agreed to engage Xxxxxxxx’ services as an independent consultant to
manage the exploration, design and development of the Afton Project, Kamloops,
BC (“the Project”) and Xxxxxxxx has agreed to provide the same upon the terms
and conditions set forth in this contract for services
(“Contract”);
AND
WHEREAS the parties have agreed that, upon execution and only for so long as
this Contract is in effect, Xxxxxxxx will be appointed and serve as Vice
President of Exploration of the Company, with the job description and duties as
described in Schedule A hereto attached;
THEREFORE
THIS CONTRACT WITNESSES that, in
consideration of the premises and of the covenants and undertakings herein
exchanged, the parties have agreed as follows:
Section
1 CONTRACT FOR SERVICES
1.1 Xxxxxxxx
shall provide the Company with full time attendance to project management and
the provision of professional geological services with respect to the Project.
“Full time” means all normal business hours each business day of each month
during the currency of the Contract.
1.2 Xxxxxxxx
covenants that he shall in his professional and managerial capacities perform
all such services as are reasonably required of him and from time to time
assigned in writing by the President or, in the President’s absence, the board
of directors of the Company, and that such services shall be provided to the
Company on a preferred client basis, without additional or special compensation
than as herein provided.
1.3 The
means, methods, and details of performing the services to be rendered shall be
under the discretion and control of Xxxxxxxx; however, all such services shall
be subject to inspection and acceptance by the Company. Xxxxxxxx will perform
the services in a manner consistent with that level of care and skill ordinarily
exercised by other members of the professional engineering and geological
sciences professions currently practising under similar conditions subject to
the time limits and financial and physical constraints hereunder applicable to
the services.
Section
2 TERM OF CONTRACT
2.1 This
Contract shall commence on the 24th_ day of March 2004 and continue month to
month thereafter, unless and until terminated in accordance with subsection 2.2
hereof.
2.2 Notwithstanding
anything herein contained, the Company may terminate this Contract at any time
upon thirty (30) days notice to Xxxxxxxx, such notice to be accompanied by full
payment for all services provided by Xxxxxxxx delivered and to be delivered to
the effective date of such notice.
2.3 Upon
termination of this Contract, Xxxxxxxx will be deemed to have resigned his
position as Vice-President of Exploration of the Company.
Section
3 PAYMENT FOR SERVICES & RELATED COMPENSATION
3.1 Retainer For all
services required to be performed hereunder the Company shall pay Xxxxxxxx an
all inclusive monthly retainer of $11,000.00 plus GST, such retainer to be
direct deposited to Xxxxxxxx’ bank account upon receipt of monthly
invoice.
3.2 Bonus
Upon
Xxxxxxxx performing the services and completing the Feasibility Study according
to the agreed timeline, the Company will pay Xxxxxxxx a bonus of $18,000.00. For
purposes of this provision, “Feasibility Study” means a report that concludes
the Project is economically feasible and which allows the Company to secure
project (that is, non-recourse) debt or equity financing from a major banking or
other lending institution or smelter.
3.3 Stock
Option As
compensation for entering into this Contract for Services, the Company will
xxxxx Xxxxxxxx an option to purchase up to 100,000 common shares of the Company,
subject only to Toronto Stock Exchange rules and approval, if required, such
option to be exercisable as follows:
|
3.3.1 |
as
to 50,000 common shares upon completion of Feasibility Study within
established timeline., and |
|
3.3.2 |
as
to 50,000 common shares upon completion of the Feasibility Study within
the agreed budget and timeline. |
3.4 Out
of Pocket Expenses The
Company will reimburse Xxxxxxxx all reasonable out-of-pocket expenses incurred
by him in the course of and directly related to providing the services in
connection with the Afton Project. The Company will supply a major credit card
for Xxxxxxxx’ use in connection with providing the Afton Project services. All
claims for reimbursement of expenses and payment of credit charges shall be
supported by receipts and vouchers.
2
3.5 Transportation The
Company will provide Xxxxxxxx with a truck for use on and in connection with the
Afton Project.
3.6 Insurance The
Company will maintain a policy of Executive and Organization Liability
Insurance, Commercial General Liability Insurance, Workers Compensation Board
coverage, and Automobile (truck) Insurance.
3.7 Miscellaneous Xxxxxxxx
shall be entitled to free use and provision of executive benefits which the
Company offers as incidental to the holding of a senior management office,
including but not limited to paying for business cards and use of the Company’s
residential facilities in Kamloops.
Section
4 INDEPENDENT CONTRACTOR
4.1 Xxxxxxxx
shall perform the services hereunder as an independent contractor and nothing
herein shall be construed as creating the relationship of employer-employee
between the Company and Xxxxxxxx, nor shall this Contract be construed as
creating in Xxxxxxxx any right of or to present or future employment by the
Company, nor, as herein expressly provided, to any of the entitlements or
benefits of employment or a contract of service.
4.2 The
Company shall have no responsibility for any personal injury, loss or damage
caused to or incurred by any employee, servant or agent of Xxxxxxxx, who shall
himself arrange and pay the cost of providing Workers Compensation Board
coverage to all such employees of his in the course of performing his services
for the Company hereunder, unless the Company agrees in writing to the terms of
engagement and to pay the cost prior to the hiring of any such
person.
Section
5 REPORTING
5.1 Xxxxxxxx
shall report to the person who is from time to time President of the Company, or
to such other person as the President may from time to time designate to
Xxxxxxxx by notice in writing as herein provided.
Section
6 ASSIGNABILITY
6.1 This
Contract is for personal services only and is not assignable by Xxxxxxxx
provided, however, that Xxxxxxxx may with the written consent of the Company
assign to and elect to have the obligations of Xxxxxxxx performed by a
corporation over which he has control and which covenants that it will provide
Xxxxxxxx’ services hereunder without substitution.
Section
7 COMPLIANCE WITH LAW
7.1 Xxxxxxxx
acknowledges that the effective discharge of his duties hereunder require a
diligent effort on his part to comply, and for him to cause those under his
direction to comply, with all governmental permits, orders, laws, regulations
and statutes applying to the Project and to the conduct of the exploration and
development programs thereon.
3
Section
8 PROPERTY OF THE COMPANY
8.1 Xxxxxxxx
acknowledges that, in providing the services, he will obtain special knowledge
and information concerning the properties and business affairs of the Company,
that the same constitute an integral part of the Company’s asset base, the value
of which cannot now be readily ascertained, and covenants that the same shall be
kept in the strictest of confidence.
8.2 All
professional work product of Xxxxxxxx, including without limitation, all
documents and data, reports, drawings, logs, field data, laboratory data and
calculations prepared or contributed to by Xxxxxxxx in the course of performing
the services shall be and remain the exclusive property of the
Company.
Section
9 NOTICES
9.1 Any
notice, consent or request required or permitted to be given hereunder shall be
in writing and may be given by depositing the same in the mail in Canada
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, or by delivering such notice in person
to such party.
9.2 The
failure of a party to retain or produce a return receipt for any notice given
hereunder as above provided shall not affect the validity of the notice. Notices
so given shall be deemed effective five days after mailing or upon delivery to
the party to be notified.
9.3 All
notices to be sent to a party hereunder shall be addressed to the party at the
address of the party set forth on the first page hereof, provided that a party
may from time to time change such address for service by giving notice thereof
to the other party in the manner herein above set forth.
Section
10 GOVERNING LAW
10.1 This
Contract shall be governed by, construed under and enforceable in accordance
with laws of the Province of British Columbia and of Canada therein applicable
and each of the parties irrevocably attorns to the jurisdiction of the courts of
that Province.
Section
11 Technical References
|
11.1 |
In
the event the Company disagrees with a Xxxxxxxx’ recommendation or
proposed course of action with respect to the Project, the Company shall
have the final say, but Xxxxxxxx may request that the Company refer the
question to an independent professional of the Company’s
choice. |
Section
12 COMPLETE AGREEMENT
12.1 This
Contract constitutes the whole of the agreement between the parties, supersedes
all prior agreements, oral and otherwise, and there shall be no implied terms
hereof. Any amendment hereof shall be effective only if in writing signed by
both parties.
12.2 The
representations contained herein are conditions on which the parties have relied
in entering into the Contract and are to be construed as both conditions and
warranties.
4
Section
13 NO THIRD PERSON BENEFICIARIES
13.1 This
Contract is made solely for the benefit of the parties hereto and their
respective heirs and permitted assigns, and no other person shall have any
rights, interest or claim hereunder. The right of any heir of Xxxxxxxx shall be
restricted to the amount of any monthly retainer unpaid at the date and only in
respect of the month in which Xxxxxxxx is deceased.
Section
14 HEADINGS
14.1 The
headings contained in the Contract are for convenience of reference only and
shall not affect the meaning, interpretation or scope of the provisions to which
they relate.
Section
15 ENUREMENT
15.1 This
Contract shall enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.
IN
WITNESS WHEREOF the
parties have executed this agreement the day and year first above
written.
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SIGNED,
SEALED AND DELIVERED |
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in
the presence of: |
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_________________________________ | |
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_________________________________________
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XXXXXXX
X.X. XXXXXXXX |
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Signature
of Witness |
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____________________________________ |
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Address
of Witness |
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____________________________________ |
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Occupation |
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DRC
RESOURCES CORPORATION |
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By__________________________________ |
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Authorized
Signatory |
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By
_________________________________ |
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Authorized
Signatory |
5
SCHEDULE
A
DRC
RESOURCES CORPORATION
March
2004
|
Re: |
Position
of Vice-President - Exploration, Afton Copper-Gold Project, Kamloops,
BC |
With
respect to the position with DRC Resources as Vice President - Exploration, the
following is the job description and duties:
Job
Description and Duties:
| I |
Scope
of Work |
|
1: |
Design,
implementation and supervision of Underground Exploration Program to
advance Afton Project through feasibility stage.
|
|
2: |
Negotiate
Agreements with contractors - mining, drilling dewatering, road building,
etc. |
|
3: |
Manage
the entire Afton program including but not limited to engineering,
geology, drilling, tunneling, metallurgy, permitting, mill and tailings
pond upgrade and the contractors/employees conducting the work. Maintain
the Company’s tenure of mineral holdings. |
|
4: |
Assist
in the preparation of the detailed feasibility report. Recommend to DRC
management any subsequent course of action required to take the project to
production. |
|
5: |
Act
as Afton Qualified Person for technical and financial audits from outside
parties. |
|
6: |
Consider
alternative to the purchase of Teck Mill (plant) and tailings disposal
system and initiate permitting procedures for both
possibilities. |
|
II |
Project
Budget |
|
1: |
Develop
detailed preliminary budget and time-line in consultation with DRC
Management and in that regard: |
|
(a) |
Review
and obtain approval of any proposed changes in project plans and
anticipated increase or decrease in the proposed budget before
implementation |
|
(b) |
Maintain
up-to-date cost control and analysis for the entire project and submit to
Management on a timely basis. |
|
(c) |
On
a weekly basis, deliver to accounting office in Vancouver all invoices
related to the Afton Project to ensure up-to-date books and records for
the project expenses are maintained. |
6
SCHEDULE
A, page 2
|
III |
Time
Line for Project |
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1: |
By
April 30, 2004, in consultation with President,
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| (a) |
prepare
project development tasks list to production stage,
and |
|
(b) |
Detail
prioritized timeline for completion of project development tasks to
completion of feasibility study and best estimate of timeline thereafter
to production |
|
2: |
Determine
staffing requirement and hiring schedule for project
development. |
| IV |
Business
Conduct |
|
1: |
Ensure
that DRC Resources’ Standard of Business Conduct, (a copy of which has
been given to you), is maintained by all employees, contractors, etc. Keep
management informed of any problems that arise and solutions that have
been put into effect to alleviate problems.
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V |
Reporting |
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1: |
Report
to President of Company on a timely basis |
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2: |
Report
to Regulatory Bodies where applicable: (MEM, WLA,
etc.) |
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3. |
Within
7 working days after each month end, deliver monthly Progress Reports
based on weekly updates and consultation with the President of DRC, such
Reports to include percentage achievement of planned work and reasonably
detailed budget vs actual performance. |
7
ADDENDUM
TO CONTRACT FOR SERVICES
THIS
CONTRACT made the
18th day of October, 2004
BETWEEN:
XXXXXXX
X. X. XXXXXXXX, P.
Xxx., of
0000
Xxxxxxxxxx Xxxx
Xxxxxxxxx,
XX X0X 0X0
(herein
referred to as “Xxxxxxxx”)
OF THE
FIRST PART
AND:
DRC
RESOURCES CORPORATION., a body
corporate duly incorporated under the laws of the Province of British Columbia
and having its principal place of business at Xxxxx 000 - 000 Xxxx Xxxxxx,
Xxxxxxxxx, XX
(herein
referred to as “the Company”)
OF THE
SECOND PART
WHEREAS Xxxxxxxx
has been engaged as Vice President, Exploration & Development of the Company
pursuant to Contract for Services dated March 24, 2004 (“the Contract for
Services”);
AND
WHEREAS the
Company has changed its reporting structure pursuant to the Addendum to
Executive Services Agreement dated October 18, 2004 between the Company and Xxxx
X. Xxxxxxx;
THIS
AGREEMENT WITNESSES that, in
consideration of the premises, the parties have agreed as follows:
|
1. |
The
references to “President of the Company” in Section 5 of the Contract for
Services and Section V of Schedule A to the Contract for Services are
amended to refer to “Chairman of the Board of the Company” with such other
changes within the Contract for Services deemed to have been made as the
context requires. |
|
2. |
In
every other respect the Contract for Services is confirmed to be unchanged
and to continue in full force and effect. |
8
IN
WITNESS WHEREOF the
parties have executed this Agreement the 18th day of
October, 2004.
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SIGNED,
SEALED AND DELIVERED BY XXXXXXX X. XXXXXXX |
) |
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in
the presence of: |
) |
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) |
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_________________________________ | |
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_________________________________________
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) |
XXXXXXX
X.X. XXXXXXXX |
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Signature
of Witness |
) |
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____________________________________ |
) |
|
|
Address
of Witness |
) |
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____________________________________ |
) |
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|
Occupation |
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DRC
RESOURCES CORPORATION |
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By__________________________________ |
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Authorized
Signatory |
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By
_________________________________ |
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Authorized
Signatory |
9
ADDENDUM
TO CONTRACT FOR SERVICES
THIS
CONTRACT made the
1st day of January, 2005
BETWEEN:
XXXXXXX
X. X. XXXXXXXX, P.
Xxx., of
0000
Xxxxxxxxxx Xxxx
Xxxxxxxxx,
XX X0X 0X0
(herein
referred to as “Xxxxxxxx”)
OF THE
FIRST PART
AND:
DRC
RESOURCES CORPORATION., a body
corporate duly incorporated under the laws of the Province of British Columbia
and having its principal place of business at Xxxxx 000 - 000 Xxxx Xxxxxx,
Xxxxxxxxx, XX
(herein
referred to as “the Company”)
OF THE
SECOND PART
WHEREAS Xxxxxxxx
was engaged as Vice President, Exploration & Development of the Company
pursuant to Contract for Services dated March 24, 2004 (“the Contract for
Services”);
AND
WHEREAS the
Company has determined to engage Xxxxxxxx as an employee pursuant to a
resolution dated January 20, 2005 approved by the board of director’s and
retroactive to January 1, 2005.
THIS
AGREEMENT WITNESSES that, in
consideration of the premises, the parties have agreed as follows:
|
1. |
The
whole of Section 3.1 Retainer,
is deleted and replaced with the following: |
“3.1
Salary For all
services required to be performed hereunder the Company shall pay Xxxxxxxx an
all inclusive monthly salary of $12,500, such salary, to be subject to all
required statutory withholdings, shall be directly deposited to Xxxxxxxx’ bank
account on the last day of each month. “
|
2. |
The
whole of Section 3.2 Bonus,
is deleted. |
| 3. |
Section
3.3 Stock Option is
amended as to subsection |
10
3.3.1
which is deleted and replaced with the following:
“as to
50,000 common shares exercisable between January 1, 2005 and on or before April
13, 2006.”
3.3.2
which is deleted and replaced with the following
“ as to
50,000 common share exercisable between January 1, 2006 and on or before April
13, 2006
| 4. |
Section
4 INDEPENDENT CONTRACTOR, is
deleted in its entirety |
IN
WITNESS WHEREOF the
parties have executed this Agreement the 3rd day of February, 2005.
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SIGNED,
SEALED AND DELIVERED BY XXXXXXX X. XXXXXXX |
) |
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in
the presence of: |
) |
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) |
||
|
) |
_________________________________ | |
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_________________________________________
|
) |
XXXXXXX
X.X. XXXXXXXX |
|
Signature
of Witness |
) |
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____________________________________ |
) |
|
|
Address
of Witness |
) |
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____________________________________ |
) |
|
|
Occupation |
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DRC
RESOURCES CORPORATION |
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By__________________________________ |
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Authorized
Signatory |
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By
_________________________________ |
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Authorized
Signatory |
11
