Adera Mines Limited
Adera
Mines Limited
August
1,
2006
Xx.
Xxxxxx X. Xxxxxxxx
0000
Xxxxx Xxxxxxxx Xxxxx
Xxxxx,
Xxxxxxxx
Dear
Sid,
On
behalf
of Adera Mines, Limited (the “Company”), I am pleased you have agreed to serve
on the Company’s Board of Directors and to assume the position of Chairman of
the Board. This letter (the “Agreement”) sets forth the terms that the Company
is offering to you for such service and services as a consultant to the
Company.
1. APPOINTMENT
TO THE BOARD OF DIRECTORS.
1.1 Title,
Term and Responsibilities.
Subject
to terms set forth herein you will serve as a Director on the Company’s Board of
Directors (the “Board”) and you will assume and fulfill the role of Chairman of
the Board (“Chairman”), and you hereby accept such appointments on the date you
sign this Agreement (the “Effective Date”). You will serve as a Director and
Chairman from the Effective Date until you voluntarily resign, are removed
from
the Board or are not reelected (the “Term”). Your rights, duties and obligations
as a Director and Chairman shall be governed by the Company’s Articles of
Incorporation and By-Laws, each as amended from to time (collectively, the
“Governing Documents”), except that where the Governing Documents conflict with
this Agreement, this Agreement shall control.
1.2 Mandatory
Board Meeting Attendance. As
a
Director and Chairman, you agree to use all reasonable efforts to attend each
meeting of the Board and no fewer than seventy-five percent (75%) of these
meetings. You may attend the Board meetings by telephone or teleconference.
You
will be responsible to supervise, convene and cause minutes to be recorded
at
any meeting you initiate or attend.
1.3 Independent
Contractor. Under
this Agreement, your relationship with the Company will be that of an
independent contractor. You are not an employee of the Company and are not
eligible to participate in the Company’s employee benefit and compensation
plans.
2. COMPENSATION
AND BENEFITS.
2.1 Retainer
for Board Service and Consulting. The
Company will pay you a retainer for each month you serve on the Board (the
“Retainer”) to be paid in monthly installments of Eight Thousand Dollars
($8,000), payable subject to your attendance at the Board meetings as required
by paragraph 1.2 above and your performance as a consultant, as required by
paragraph 6.1 below. The Company’s obligation to pay the Retainer will cease
upon the termination of the Term, except as set forth in paragraph 6.2 below.
The Retainer will compensate you for all services you provide to the Company
as
a Director and consultant, including services that you render as a member of
any
of the Board’s committees, including the Audit Committee.
2.2 Stock
Grant; Options. Upon execution of this Agreement, the Company will
grant and deliver to you Two
Million (2,000,000) shares of the Company’s common stock which grant shall be
fully vested and not subject to forfeiture. Subject to the approval of the
Board, the Company will grant you an option to purchase Two Million (2,000,000)
shares of the Company’s common stock, at a price per share of $0.30, which grant
shall be fully vested and not subject to forfeiture. 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 Company’s Plan and shall be
subject to the terms thereof.
2.3 Business
Expense Reimbursement. The
Company will reimburse you for all reasonable travel, entertainment or other
expenses incurred by you in connection with your services hereunder, in
accordance with the Company’s expense reimbursement policy as in effect from
time to time. In addition, you will receive an unaccountable expense allowance
of $205,000 for your expenses incurred on behalf of the Company prior to
execution of this Agreement.
2.4 Indemnification.
You
will
receive indemnification as a Director of the Company to the maximum extent
extended to directors and certain executives of the Company generally, as
provided by the Governing Documents.
2.5 Tax
Indemnification. You
acknowledge that the Company will not be responsible for the payment of any
federal or state taxes that might be assessed with respect to the Retainer
and
the options and you agree to be responsible for all such taxes.
3. PROPRIETARY
INFORMATION OBLIGATIONS.
3.1 Proprietary
Information. You
agree
that during the Term and thereafter that you will take all steps reasonably
necessary to hold all information of the Company, which a reasonable person
would believe to be confidential or proprietary information, in trust and
confidence, and not disclose any such confidential or proprietary information
to
any third party without first obtaining the Company’s express written consent on
a case-by-case basis.
3.2 Third
Party Information. The
Company has received and will in the future receive from third parties
confidential or proprietary information (“Third Party Information”) subject to a
duty on the Company’s part to maintain the confidentiality of such information
and to use it only for certain limited purposes. You agree to hold such Third
Party Information in confidence and not to disclose to anyone (other than
Company personnel who need to know such information in connection with their
work for the Company) or to use, except in connection with your services for
the
Company under this Agreement, Third Party Information unless expressly
authorized in writing by the Company.
3.3 Return
of Company Property. Upon
the
end of the Term or upon the Company’s earlier request, you agree to deliver to
the Company any and all notes, materials and documents, together with any copies
thereof, which contain or disclose any confidential or proprietary information
or Third Party Information.
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4. OUTSIDE
ACTIVITIES.
4.1 Investments
and Interests.
Except
as permitted by Sections 4.2, you agree not to participate in, directly or
indirectly, any position or investment known by you to be materially adverse
to
the Company.
4.2 Activities.
Except
with the prior written consent of the Board, you will not during your tenure
as
a member of the Company’s Board undertake or engage in any other directorship,
employment or business enterprise in direct competition with the Company, other
than ones in which you are a passive investor or other activities in which
you
were a participant prior to your appointment to the Board as disclosed to the
Company.
4.3 Other
Agreements. You
agree
that you will not disclose to the Company or use on behalf of the Company any
confidential information governed by any agreement between you and any third
party except in accordance with such agreement.
5. TERMINATION
OF DIRECTORSHIP.
5.1 Voluntary
Resignation, Removal Pursuant to Bylaws and Stockholder Action.
You
may
resign from the Board at any time with or without advance notice, with or
without reason. You may be removed from the Board at any time, for any reason,
in any manner provided by the Governing Documents and applicable law. You also
may be removed from the Board at any time, by an affirmative vote of a majority
of the stockholders of the Company.
5.2 Failure
to Nominate for Election.
Your
appointment as a Director does not require the Board or the nominating committee
(if a nominating committee is formed) to nominate you to stand for re-election
as a Director. Whether you will be nominated to stand for re-election will
be
determined by the Board or the nominating committee prior to any meeting or
execution of a written consent of the Company’s stockholders at which directors
are to be elected.
6. CONSULTING
SERVICES
6.1 Consulting
Activities. In
addition to your services as a Director and Chairman, you agree to provide
certain consulting services to the Company, including advice on strategic
acquisitions, operations, growth opportunities, finance, capital markets
activities and similar matters as the Board or management may request from
time
to time. Compensation for the consulting services is covered by the Retainer
amount described under paragraph 2.1 above, as well as the stock grant and
option grants under paragraph 2.2 above.
6.2
Consulting Activities if Not Director.
Notwithstanding any provision to the contrary, if for any reason your service
as
a Director shall cease (other than due to your death, disability or incapacity)
your services as a consultant to the Company shall continue and payment of
your
Retainer shall continue until the second anniversary of the Effective Date
of
this Agreement.
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6.3 Additional
Compensation for Acquisition Consulting.
In
addition to the Retainer amount described in paragraph 2.1 above, and the stock
grant and option grants under paragraph 2.2 above, you shall receive
compensation for consulting in connection with any acquisition completed by
the
Company in which you provided significant assistance (regardless of whether
the
form of acquisition is stock, assets, merger or reorganization). Your
compensation shall be two and one-half percent (2.5%) of total consideration
paid by the Company in the acquisition at closing. Such compensation shall
be
payable by the Company in cash or in restricted common stock at the Company’s
election, 60 days after closing if consideration was paid at closing or later
if
such consideration is to be paid after closing. In
addition, you shall receive an additional fee for your acquisition consulting
in
connection with the acquisition of Chatsworth Development Corporation which
shall be the issuance to you of 2,000,000 shares of our common
stock.
7. GENERAL
PROVISIONS.
7.1 Severability.
Whenever
possible, each provision of this Agreement will be interpreted in such manner
as
to be effective and valid under applicable law. If any provision of this
Agreement is held to be invalid, illegal or unenforceable such provision will
be
reformed, construed and enforced to render it valid, legal, and enforceable
consistent with the intent of the parties insofar as possible.
7.2 Entire
Agreement. This
Agreement constitutes the entire agreement between you and the Company with
respect to your service as a Director, Chairman and consultant and supersedes
any prior agreement, promise, representation or statement written between you
and the Company with regard to this subject matter.
7.3 Successors
and Assigns. This
Agreement is intended to bind and inure to the benefit of and be enforceable
by
you and the Company and our respective successors, assigns, heirs, executors
and
administrators, except that you may not assign any of your rights or duties
hereunder without the written consent of the Company.
7.4 Governing
Law. This
Agreement will be governed by the law of the State of California as applied
to
contracts made and performed entirely within California.
We
are
all delighted to be able to extend you this offer and look forward to working
with you. To indicate your acceptance of the Company’s offer, please sign and
date this Agreement below.
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Sincerely,
Adera
Mines Limited
By:__________________
X.
Xxxxxxx Xxxxxx III
Chief
Executive Officer
ACCEPTED
AND AGREED:
__________________
Xxxxxx
X.
Xxxxxxxx
Date:
August__, 2006
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