EXHIBIT 10.18
MANAGEMENT CONSULTING AGREEMENT
THIS AGREEMENT is made effective as of the 1st day of July, 2006.
BETWEEN:
XTRA-GOLD RESOURCES CORP.
a company incorporated under the laws of the State of
Nevada, having a head office at 0 Xxxxxxxx Xxxxxx,
Xxxxxxx XX X0X 0X0 Xxxxxx
(hereinafter referred to as "XTRA")
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GOLDEYE CONSULTANTS LTD.
a company incorporated under the laws of the Turks & Caicos
Islands, British West Indies, having a head office at
X.X. Xxx 000, Design House Providenciales,
Turks & Caicos Islands, British West Indies
(hereinafter referred to as "GOLDEYE")
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XXXXXXX XXXXXX XXXXXXXXX
(hereinafter referred to as "XXXXXXXXX")
WHEREAS Goldeye possesses the requisite knowledge and experience in
connection with the precious metals industry, mineral exploration and
production, in particular, the ability to provide senior management services to
a mining company;
AND WHEREAS XxXxxxxxx has been a director of Xtra since November 2003
and the Chairman and Chief Executive Officer of Xtra since August 2005;
AND WHEREAS XxXxxxxxx is a director of Goldeye;
AND WHEREAS XxXxxxxxx was appointed as a director of Goldeye in May
2006;
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AND WHEREAS Xtra wishes to engage Goldeye on a management consulting
basis with a view to Goldeye providing certain business consulting services to
Xtra.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants contained in this agreement and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
each of the parties hereto, Xtra, Goldeye and XxXxxxxxx (collectively referred
to as the Parties") agree as follows:
1. SERVICES TO BE PROVIDED
(a) Goldeye shall provide management consulting services (the
"SERVICES") to Xtra as may be required by Xtra from time to
time. The Services shall only be fulfilled by XxXxxxxxx and
shall not be delegated or assigned, except with the express
written consent of Xtra.
(b) The scope of the Services are set out in Schedule "A" annexed
hereto and will be strictly of a consulting nature.
2. COMPENSATION
(a) Effective July 1, 2006, Goldeye shall be paid a monthly fee of
Cdn.$5,000.00 in connection with the Services (the "FEES") and
the Fees shall be paid to Goldeye in a manner of payment to be
agreed to between the Parties.
(b) The Parties acknowledge that Goldeye has been paid an
aggregate amount of Cdn.$20,000.00 retroactively from March 1,
2006 for Services provided during the months of March, April,
May and June, 2006.
(c) Xtra agrees to increase the Fees payable to Goldeye to
Cdn.$10,000.00 upon the earlier of the bulk test at the
Kwabeng concession located in the Republic of Ghana (i)
achieving profitability; or (ii) being completed.
(d) Xtra agrees to increase the Fees payable to Goldeye to
Cdn.$15,000.00 upon the earlier of the full scale mining
operation to be conducted at the Kwabeng concession (a)
achieving profitability; or (b) having occurred for two
months.
(e) Any other compensation to be paid to Goldeye, including bonus
payments, shall be reviewed by the board of directors of Xtra
(the "BOARD") and/or the Compensation Committee, if such
committee is formed at the relevant time, in the following
manner:
(i) on the earlier of:
A. six (6) months from the effective date of this
Agreement;
B. Xtra becoming a reporting company;
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(ii) two months of profitability having being achieved
from the full scale mining operation at the Kwabeng
concession; and
(iii) such other time that the Board and/or the
Compensation Committee existing at such time may deem
appropriate.
3. PLACE OF WORK
Goldeye shall render the Services at such place or places where Xtra
conducts its business.
4. TIME
The daily schedule in connection with providing the Services and the
hours worked on any given day shall generally be at Goldeye's discretion, but at
all times shall be subject to and dependent upon Xtra's needs. Xtra relies upon
Goldeye to ensure that sufficient time is devoted as is necessary in order to
fulfill the spirit and purpose of this Agreement.
5. REIMBURSEMENT FOR EXPENSES INCURRED BY GOLDEYE ON BEHALF OF XTRA
Goldeye will submit an expense report for expenses actually and
properly incurred on behalf of Xtra on no less than a monthly basis in the form
provided by Xtra for such purpose. Xtra shall reimburse Goldeye for approved
reasonable expenses within five (5) business days following receipt of Goldeye's
itemized monthly expense report. Goldeye agrees to provide proper receipts for
expenses incurred and submitted.
6. REPRESENTATIONS OF GOLDEYE AND XXXXXXXXX
(a) Goldeye and XxXxxxxxx each represent that XxXxxxxxx has the
requisite qualifications, experience and capabilities to
perform the Services to a standard of care, skill and
diligence acceptable within the mining industry and that the
Services will be provided and this Agreement performed in
compliance with all applicable laws, ordinances, rules and
regulations.
(b) Goldeye and XxXxxxxxx each further represent that, during the
previous 10 years:
(i) there has been no bankruptcy filed by or against
Goldeye, XxXxxxxxx or by or against any business of
which Goldeye and/or XxXxxxxxx was a general partner
or executive officer at the time the petition was
filed or within two (2) years prior to the filing;
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(ii) neither Goldeye nor XxXxxxxxx has been charged with
or convicted in a criminal proceeding anywhere of an
offence which is or would be an indictable offence
for which a pardon has not been granted;
(iii) neither Goldeye nor XxXxxxxxx has been subject to any
order, judgment or decree not subsequently reversed,
suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting its/his
involvement in any type of business, securities or
banking activities; and
(iv) neither Goldeye nor XxXxxxxxx has been found by a
court of competent jurisdiction (in a civil action),
the SEC or the CFTC of violating a federal or state
securities or commodities law where the judgment has
not been reversed, vacated or suspended.
7. INDEPENDENT CONSULTANT
(a) Goldeye shall provide the Services as an independent
contractor and XxXxxxxxx is not and shall not be construed to
be an employee of Xtra and Xtra is not responsible for
XxXxxxxxx'x wages or benefits or any matters pertaining
thereto.
(b) Goldeye and XxXxxxxxx shall not be entitled to or receive any
benefit normally provided to Xtra's employees including, but
not limited to, vacation pay, health, disability and other
insurance coverage, sick pay or retirement funds.
(c) No withholding for income taxes or any other tax or
contribution shall be deducted from payments made by Xtra to
Goldeye. Goldeye herein agrees to be solely responsible for
the payment of taxes or contributions due on any amounts paid
by Xtra under this Agreement. Goldeye agrees to indemnify and
hold harmless Xtra for any and all demands or claims for
taxes, withholding taxes or any other form of payment to any
government authority from Xtra in respect of Goldeye or
XxXxxxxxx including interest, penalties and costs in
connection therewith. This section survives the termination of
this Agreement.
8. TOOLS OF TRADE AND SUPPLIES
Goldeye shall provide all equipment, tools, books and materials used in
the Services and shall be solely responsible for procuring, paying for and
maintaining any computer equipment, software, tools or supplies necessary or
appropriate for the performance of the Services, unless otherwise agreed to in
advance by Xtra.
9. EXCLUSIVITY OF GOLDEYE
Subject to the terms and conditions of the Confidentiality and
Non-Compete Agreement referred to in paragraph 10 of this Agreement, a copy of
which is annexed hereto as Schedule "B", Goldeye and XxXxxxxxx are not required
to provide their services exclusively to Xtra.
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10. CONFIDENTIALITY AND NON-COMPETE AGREEMENT AND OWNERSHIP OF INFORMATION
Goldeye and XxXxxxxxx agree to the terms of and shall enter and execute
a Confidentiality and Non-Compete Agreement in the form and substance annexed
hereto as Schedule "B" simultaneously with the execution of this Agreement.
11. INDEMNIFICATION
In the event of any legal action commenced by a corporation or an
individual with respect to the Services under this Agreement, Xtra hereby agrees
to indemnify and hold harmless Goldeye 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; provided that the indemnification
provided under this paragraph shall not be available to the extent of Goldeye's
or XxXxxxxxx'x gross negligence, a breach of this Agreement by Goldeye or
XxXxxxxxx, willful misconduct by Goldeye or XxXxxxxxx, violation of any
applicable laws, ordinances, rules or regulations by Goldeye or XxXxxxxxx, or
under circumstances where applicable law does not permit indemnification.
12. ASSIGNMENT
This Agreement shall be binding upon the Parties and their respective
heirs, executors, legal representatives, successors and assigns. This Agreement
shall not be assignable by any Party without the express written consent of all
Parties.
13. TERM
The term of this Agreement is for a fixed term of five (5) years
commencing on July 1, 2006 and ending on June 30, 2011 (the "TERM") unless
terminated earlier in accordance with paragraph 14 below. The Term of this
Agreement may only be renewed by written agreement of all Parties. If the
Parties have not reached a written agreement respecting any renewal of the Term
of this Agreement on or before March 31, 2011, then, unless otherwise agreed in
writing, they each shall be entitled to act on the assumption that this
Agreement shall expire at the end of the Term. Upon expiry of the Term, Goldeye
shall have no further entitlements.
14. TERMINATION
(a) Goldeye may terminate this Agreement at any time during the
Term without reason or cause by providing Xtra with three (3)
months' written notice of termination, which notice may be
waived in whole or part by Xtra.
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(b) Xtra may terminate this Agreement at any time during the Term
without reason or cause by payment to Goldeye of Goldeye's
Fees for a six (6) month period following such termination at
the rate in effect and in the manner and at the time of
payment in effect at the time of termination. For clarity
purposes, the Parties agree that, pursuant to this
subparagraph 14(b), on termination, Goldeye shall be paid Fees
over the six (6) month period following termination at the
rate in effect at the time of termination, that is Fees
totaling (i) CAD$30,000.00, in the event that the Fees are
CAD$5,000.00 per month; or (ii) CAD$60,000.00, in the event
that the Fees are CAD$10,000.00 per month; or (iii)
CAD$90,000.00, in the event that the Fees are CAD$15,000.00
per month. Payment of the Fees shall not be reduced by amounts
earned by Goldeye during the six (6) month period following
termination from alternative sources of work.
(c) Xtra may terminate this Agreement without providing Goldeye
with any notice of termination or payment in lieu thereof in
the event of any one of the following causes:
(i) Goldeye or XxXxxxxxx commit a material breach of this
Agreement or of the Confidentiality and Non-Compete
Agreement referred to in paragraph 10 herein, a copy
of which is annexed hereto as Schedule "B";
(ii) a bankruptcy is filed by or against Goldeye or
XxXxxxxxx or any business of which Goldeye and/or
XxXxxxxxx was a general partner or executive officer
at the time the petition was filed or within two (2)
years prior to the filing;
(iii) Goldeye or XxXxxxxxx is charged or convicted in a
criminal proceeding anywhere of an offence which is
or would be an indictable offence for which a pardon
has not been granted;
(iv) Goldeye or XxXxxxxxx become subject to any order,
judgment or decree of any court of competent
jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting their
involvement in any type of business, securities or
banking activities;
(v) Goldeye or XxXxxxxxx is found by a court of competent
jurisdiction (in a civil action), the SEC or the CFTC
of violating a federal or state securities or
commodities law;
(vi) Goldeye or XxXxxxxxx commit fraud or similar offence
against Xtra;
(vi) any other act or omission which would amount to cause
for termination of this Agreement at law.
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With respect to the foregoing events set out in this paragraph
14(c), Xtra shall not be required to pay any Fees to Goldeye,
save and except for those Fees outstanding for services
rendered to the date of termination of this Agreement,
prorated from the date upon which Fees were last paid to
Goldeye to the date of termination of this Agreement.
(d) In the event that Xtra terminates this Agreement, or Goldeye
provides notice of termination of this Agreement under
paragraph 14(a), at any time within 6 months of a Change of
Control of Xtra as hereinafter defined, Xtra shall pay Goldeye
on such termination a lump sum payment representing 100% of
the Fees for an eighteen (18) month period at the rate in
effect at the time of termination. For clarity purposes, the
Parties hereto agree that, pursuant to this subparagraph
14(d), Xtra shall pay Goldeye a lump sum payment based on its
monthly Fees in effect at the time of termination of either
(i) CAD$90,000.00, in the event that the Fees are CAD$5,000.00
per month; (ii) CAD$180,000.00, in the event that the Fees are
CAD$10,000.00 per month, or (iii) CAD$270,000.00, in the event
that the Fees are CAD$15,000.00 per month, as well as any Fees
payable for services rendered to the date of termination,
prorated from the date upon which Fees were last paid to
Goldeye to the date of termination. Where termination under
this paragraph 14(a) is initiated by Xtra, payments made by
Xtra under this paragraph 14(a) are in substitution of and not
in addition to the payments referred to in paragraph 14(b).
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.
(e) Upon expiry of the Term or the earlier termination of this
Agreement, however caused:
(i) XxXxxxxxx agrees that he will execute and deliver to
Xtra all corporate resignations from any officer or
director positions held by him in Xtra or in any of
its subsidiaries; and
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(ii) XxXxxxxxx and Goldeye agree to deliver to Xtra all
property of or belonging to or administered by Xtra
or its subsidiaries that is within their possession
or under their control including, without limiting
the generality of the foregoing, all Propriety
Information and Documents as defined in the
Confidentiality and Non-Compete Agreement referred to
in paragraph 10 of this Agreement, a copy of which is
annexed hereto as Schedule "B"
(f) The termination payments contemplated in subparagraphs 14(a)
and (d) above will be made upon:
(i) execution and delivery to Xtra of a full and final
release by XxXxxxxxx and Goldeye in a form and
substance satisfactory to Xtra;
(ii) execution and delivery to Xtra of all corporate
resignations from any officer or director positions
held by XxXxxxxxx in Xtra and in any of its
subsidiaries; and
(ii) the delivery to Xtra of all property of or belonging
to or administered by Xtra or its subsidiaries that
is within their possession or under their control
including, without limiting the generality of the
foregoing, all Propriety Information and Documents as
defined in the Confidentiality and Non-Compete
Agreement referred to in paragraph 10 of this
Agreement, a copy of which is annexed hereto as
Schedule "B".
15. 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,
(i) by regular mail or courier to:
0 Xxxxxxxx Xxxxxx
Xxxxxxx XX X0X 0X0
(ii) by e-mail transmission to:
xxxxx@xxxxxxxxx.xx
(iii) by fax to:
(000) 000-0000
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(b) if to Goldeye,
(i) by regular mail or courier to:
X.X. Xxx 000, Design House
Providenciales
Turks & Caicos Islands, British West Indies
(ii) by e-mail transmission to:
xxxxxxxxxxxx@xxxxxx.xxx
(c) if to XxXxxxxxx,
(i) by regular mail or courier to:
000 Xxxxx Xxxxxx
Xxxxxxxx XX X0X 0X0
(ii) by e-mail transmission to:
xxxxxxxxxxxx@xxxxxx.xxx
Any of the Parties may change their mailing address, e-mail address or facsimile
number by notifying the other Parties in writing.
16. 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 of jurisdiction, agency or tribunal with valid
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 and continue to be of full force and effect
as of the date upon which the ruling becomes final).
17. CONSENTS AND WAIVERS
No consent or waiver by any Party in respect of any breach of a
provision of this Agreement shall be deemed to be a consent or waiver of any
other breach of this Agreement.
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18. ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the
Parties and their respective heirs, executors, administrators, successors and
permitted assigns. This Agreement may not be assigned by Goldeye or XxXxxxxxx,
but may be assigned by Xtra.
19. ENTIRE AGREEMENT
This document and the Confidentiality and Non-Compete Agreement
referred to in paragraph 10 herein contains the entire agreement made between
the Parties as of the effective 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.
20. 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.
21. 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.
22. EXECUTION OF AGREEMENT
This Agreement may be signed by the Parties 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.
23. NO PARTNERSHIP OR AGENCY
The Parties hereto have not created a partnership and nothing contained
in this Agreement shall in any manner whatsoever constitute Xtra on the one
hand, and Goldeye and XxXxxxxxx on the other hand, as a partner, agent or legal
representative of the other or others as the case may be, nor create any
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fiduciary relationship between them for any purpose whatsoever. Xtra on the one
hand, and Goldeye and XxXxxxxxx on the other hand, shall not have any authority
to act for or assume any obligation or responsibility on behalf of the other or
others as the case may be, except as may be from time to time agreed to in
writing or as otherwise expressly provided herein.
IN WITNESS WHEREOF the Parties have executed this Agreement effective
as of the date first above written.
SIGNED, SEALED AND DELIVERED ) XTRA-GOLD RESOURCES CORP.
in the presence of )
)
) Per: /s/ Xxxxxxx Xxxxx Xxxx
) Xxxxxxx Xxxxx Xxxx
) Secretary and Treasurer
)
)
) GOLDEYE CONSULTANTS LTD.
)
)
) Per: /s/ Xxxxxxx Xxxxxx XxXxxxxxx
) Xxxxxxx Xxxxxx XxXxxxxxx
) Director
)
)
) /s/ Xxxxxxx Xxxxxx XxXxxxxxx
) Xxxxxxx Xxxxxx XxXxxxxxx
SCHEDULE "A"
BUSINESS CONSULTING SERVICES TO BE PROVIDED
TO XTRA-GOLD RESOURCES CORP. BY GOLDEYE CONSULTANTS LTD.
TERMS OF REFERENCE
These written business consulting services which includes responsibilities (the
"RESPONSIBILIIES") and accountability has been prepared to empower the Board
with a means of directing, assessing, encouraging and compensating the
activities of Goldeye and forms the basis for and an addendum to the terms of
the management consulting agreement entered into between Xtra and Goldeye
Consultants Ltd. ("GOLDEYE") (the "MC AGREEMENT").
COMPLIANCE
The managerial consulting services and performance thereto of Goldeye in
fulfilling its Responsibilities set forth hereunder shall, at all times, be
subject to compliance with the provisions of applicable laws, rules and
regulations. Goldeye shall be subject to and agrees to comply with all internal
policies instituted by Xtra.
RANGE OF APPLICATION
The provisions contained in the MC Agreement will be reviewed, assessed and
authorized by the Board in the manner set out in the MC Agreement and any
compensation committee (the "COMPENSATION COMMITTEE") of Xtra that may be formed
at a later date.
SCOPE OF SERVICES
The scope of the Services shall include but not be limited to:
- overseeing ongoing organization and development of the corporate
infrastructure of Xtra resulting in a value added support team;
- identifying, developing and directing the implementation of Xtra's
business strategy;
- planning and directing Xtra's activities to achieve stated/agreed
targets and standards for financial and trading performance, quality,
culture and compliance with regulatory matters;
- ensuring organization accountability, internal controls and
responsibilities are being complied with by all support team members;
- using best efforts to achieve performance benchmarks established from
time to time;
- establishing and assessing performance benchmarks of all support team
members;
A-2
- recruiting, selecting and developing executive team members as may be
required from time to time to achieve financial and corporate
objectives of Xtra;
- maintaining and developing Xtra's culture, values and reputation within
its industry and with all key support, consultants, vendors, partners,
financial institutions and regulatory authorities;
- attending and preparing for potential investor meetings and the
financial community with a view to increasing Xtra's shareholder base;
and
- communicating with the Board and senior management on a regular basis
during the course of each year during the Term of the MC Agreement to
review and discuss Xtra's business operations and strategies.
SPECIFIC ACCOUNTABILITY
Goldeye shall report directly to the Board. The Board and/or the Compensation
Committee will review the performance of Goldeye in connection with each of the
Responsibilities, which may be amended from time to time, and will record and
discuss their assessment with Goldeye within thirty (30) days of the
commencement of full scale placer mine production by Xtra or any of its
subsidiaries, but in no event later than six (6) months following the execution
of the management consulting agreement dated July 1, 2006 of which this Schedule
"A" forms a part thereof. Thereafter, the Board and/or the Compensation
Committee will review the performance of Goldeye on a quarterly in connection
with the Responsibilities and will record and discuss this assessment with
Goldeye 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 and its ability to thrive and prosper in a
competitive environment, together with the successful performance by Goldeye
will be recognized in a reward for initiative and the Board and/or the
Compensation Committee may elect to award additional compensation to be
determined, based on the achievement of milestones as may be established from
time to time.
SCHEDULE "B"
CONFIDENTIALITY AND NON-COMPETE AGREEMENT
THIS CONFIDENTIALITY AND NON-COMPETE AGREEMENT (the
"AGREEMENT") is made and entered into as of the 1st day of July, 2006.
BETWEEN:
GOLDEYE CONSULTANTS LTD.
X.X. Xxx 000, Design House
Providenciales, Turks & Caicos Islands, British West Indies
(hereinafter referred to as "GOLDEYE")
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XXXXXXX XXXXXX XXXXXXXXX,
000 Xxxxx Xxxxxx - Xxxxx 000
Xxxxxxxx XX X0X 0X0
(hereinafter referred to as "XXXXXXXXX")
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XTRA-GOLD RESOURCES CORP.,
a Nevada corporation having a head office at
0 Xxxxxxxx Xxxxxx
Xxxxxxx XX X0X 0X0 Xxxxxx
(hereinafter referred to as "XTRA-GOLD")
WHEREAS as of the date of this Agreement, Xtra-Gold and/or its
subsidiaries, Xtra-Gold Mining Limited, Xtra-Gold Exploration Limited, Xtra Oil
& Gas (Ghana) Limited (collectively, referred to as "XTRA-GOLD") are engaged in
the exploration, development, mineral extraction and production of gold and
other resources in the Republic of Ghana (the "BUSINESS");
AND WHEREAS Xtra-Gold has established a valuable reputation, expertise
and goodwill in its Business;
AND WHEREAS Goldeye and XxXxxxxxx, by virtue of Goldeye's engagement
with Xtra-Gold and/or any of its subsidiaries, are and may become familiar with
and possessed with the manner and methods of business, trade secrets, customer,
client, employee and stockholder lists and other confidential information
pertaining to the Business;
B-2
AND WHEREAS in consideration of and as a condition to Xtra-Gold's
engagement of Goldeye's consulting services on the terms and conditions set out
in the Management Consulting Agreement made effective as of July 1, 2006 between
Xtra-Gold, Goldeye and XxXxxxxxx (hereinafter the "CONSULTING AGREEMENT"),
Goldeye and XxXxxxxxx agreed to enter into this Confidentiality and Non-Compete
Agreement;
NOW THEREFORE IN CONSIDERATION OF Xtra-Gold's engagement of Goldeye's
consulting services on the terms and conditions set out in the Consulting
Agreement and other good and valuable consideration the receipt of which is
hereby acknowledged, Goldeye, XxXxxxxxx and Xtra-Gold (hereinafter the
"PARTIES") agree as follows:
1. COVENANT NOT TO COMPETE
Goldeye and XxXxxxxxx each acknowledge and recognize the highly
competitive nature of Xtra-Gold's Business and that the goodwill, continued
patronage, and specifically the names and addresses of Xtra-Gold's Clients (as
defined herein) constitute a substantial asset of Xtra-Gold having been acquired
through considerable time, money and effort. Accordingly, Goldeye and XxXxxxxxx
each agree to the following:
(i) that during the Restricted Period (as hereinafter defined) and
within the Restricted Area (as hereinafter defined), they will
not, individually or in conjunction with others, directly or
indirectly, engage in any Business Activities (as hereinafter
defined), whether as an officer, director, proprietor,
employer, partner, independent contractor, investor (other
than as a holder solely as an investment of less than one
percent (1%) of the outstanding capital stock of a publicly
traded corporation), consultant, advisor, agent, creditor or
otherwise;
(ii) that during the Restricted Period and within the Restricted
Area, they will not, directly or indirectly, compete with
Xtra-Gold by soliciting, inducing or influencing any of
Xtra-Gold's Clients to discontinue or reduce their business
relationship with Xtra-Gold;
(iii) that during the Restricted Period and within the Restricted
Area, they will not (A) directly or indirectly recruit,
solicit or otherwise influence any employee, consultant or
agent of Xtra-Gold to discontinue their employment,
consultancy or agency relationship with Xtra-Gold as the case
may be, or (B) in connection with any business which competes
directly or indirectly with the Business Activities of
Xtra-Gold (the "COMPETITIVE BUSINESS"), employ or seek to
employ, or cause or permit to employ or seek to employ for any
Competitive Business any person who is then (or was at any
time within six (6) months prior to the date) an employee,
consultant or agent of Xtra-Gold; or (C) directly or
indirectly discourage any Xtra-Gold Client from doing business
with Xtra-Gold.
2. NON-DISCLOSURE OF INFORMATION
Goldeye and XxXxxxxxx each acknowledge that as a result of their
relationship with Xtra-Gold, they have and will continue to acquire confidential
information, whether or not originated by them, that relates to the Business or
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affairs of Xtra-Gold and/or its customers (hereafter the "PROPRIETARY
INFORMATION") including , but not limited to, Xtra-Gold's trade secrets, private
or secret processes, methods and ideas, as they exist from time to time,
stockholder, customer or vendor lists, products, services, mining methods,
development, technical information, marketing activities and procedures, credit
and financial data concerning Xtra-Gold and/or Xtra-Gold's Clients. Goldeye and
XxXxxxxxx each agree that the Proprietary Information is a valuable, special and
unique asset of Xtra-Gold and/or its Clients as the case may be, that access
thereto and knowledge thereof was and continues to be essential to the
performance of their services to Xtra-Gold, and that it is reasonable and
necessary for each of them to make the following covenants regarding their
conduct during and subsequent to the term of the Consulting Agreement:
(i) at all times during and subsequent to the term of the
Consulting Agreement, they will not disclose the Proprietary
Information to any person or entity (other than as necessary
in carrying out the services contemplated in the Consulting
Agreement) without first obtaining Xtra-Gold's written consent
unless such Proprietary Information has been publicly
disclosed generally without breach of this Agreement or upon
written advice of legal counsel reasonably satisfactory to
Xtra-Gold that they are legally required to disclose such
Proprietary Information;
(ii) at all times during and subsequent to the term of the
Consulting Agreement , they will not use, copy, transfer or
destroy any Proprietary Information (other than as necessary
in carrying out the services contemplated in the Consulting
Agreement) without first obtaining Xtra-Gold's written
consent, and they will take all reasonable precautions to
prevent inadvertent use, copying, transfer or destruction of
any Proprietary Information unless such Proprietary
Information has been publicly disclosed generally without
breach of this agreement or upon written advice of legal
counsel reasonably satisfactory to Xtra-Gold that they are
legally required to disclose such Proprietary Information;
(iii) Documents (as hereinafter defined) prepared by Goldeye or
XxXxxxxxx or that come into their possession during their
association with Xtra-Gold are and remain the property of
Xtra-Gold, whether or not such Documents contain Proprietary
Information; and
(iv) on the expiry of the term of the Consulting Agreement or such
earlier termination of the Consulting Agreement, however
caused, or on receipt of Xtra-Gold's written request, they
shall deliver to Xtra-Gold at Xtra-Gold's principal place of
business as provided in this Agreement all property of or
belonging to or administered by Xtra-Gold and/or its Clients
including without limiting the generality of the foregoing,
all Propriety Information and Documents within their
possession or under their control.
3. DEVELOPMENT OF INTELLECTUAL PROPERTY
(i) Goldeye and XxXxxxxxx each agree that they will, during the
term of the Consulting Agreement, disclose promptly to
Xtra-Gold in writing any and all inventions, special
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procedures, processes or products and any improvements in or
modifications of existing inventions, special procedures,
processes, or products relating to or connected with the
Business Activities, whether or not patentable, conceived,
developed or made by them either alone or in conjunction with
others during the term of the Consulting Agreement, whether
conceived, developed or made upon Xtra-Gold's premises, or
with Xtra-Gold's material or facilities, or otherwise, and all
of said inventions, special procedures, processes, products,
improvements and modifications shall be the sole and exclusive
property of Xtra-Gold.
(ii) At the option and request of Xtra-Gold, Goldeye and XxXxxxxxx
will promptly execute, acknowledge and deliver during the term
of the Consulting Agreement and at all times thereafter,
without any payment or other consideration from Xtra-Gold,
such applications, assignments and other instruments which
Xtra-Gold shall deem necessary in order to (i) apply for and
obtain letters patent, trademarks, service marks or other
intellectual property protection in the United States and any
foreign countries for any and all of the aforesaid inventions
or discoveries described above, and (ii) assign and convey to
Xtra-Gold the sole and exclusive right, title and interest
therein, and they will assist Xtra-Gold or its nominee in
every proper way, at Xtra-Gold's cost and expense, in
accomplishing any and all of the foregoing.
4. DEFINITIONS
In this Agreement, the following terms have the meanings:
(a) DOCUMENTS. "DOCUMENTS" shall mean all original written,
recorded, or graphic matters whatsoever, and any and all
copies thereof, including, but not limited to: papers, books,
records, tangible things, correspondence, communications,
electronically transmitted messages (e-mails and faxes),
memoranda, work-papers, reports, presentations, affidavits,
statements, summaries, analyses, evaluations, stockholder and
client records and information, agreements, agendas,
advertisements; instructions, charges, manuals, brochures,
publications, directories, industry lists, schedules, client
lists, vendor lists, statistical records, training manuals,
computer printouts, books of account, records and invoices,
technical data, including but not limited to mining leases,
prospecting licences, permits, feasibility reports, surveys,
site plans, mining operation plans reflecting business
operations; all things similar to any of the foregoing however
denominated. In all cases where originals are not available,
the term "Documents" shall also mean identical copies of
original documents or non-identical copies thereof.
(b) XTRA-GOLD'S CLIENTS. The "XTRA-GOLD'S CLIENTS" mean any
persons, partnerships, corporations, stockholders, potential
investors, professional associations or advisors or other
organizations for or with whom Xtra-Gold performed or intended
to perform Business Activities at any time during the period
Goldeye performed consulting services for Xtra-Gold or
XxXxxxxxx held any offices or directorships in Xtra-Gold
including under the Consulting Agreement.
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(c) RESTRICTIVE PERIOD. The "RESTRICTIVE PERIOD" means during the
term of the Consulting Agreement and for a period of two (2)
years following the termination of the Consulting Agreement,
however caused.
(d) RESTRICTED AREA. The "RESTRICTED AREA" means within 100
kilometers from where Xtra-Gold carries on its Business.
(e) BUSINESS ACTIVITIES. "BUSINESS ACTIVITIES" means the Business
during the 12 month period prior to the expiry of the term of
the Consulting Agreement or its earlier termination.
5. COVENANTS AS ESSENTIAL INDUCEMENTS OF THIS AGREEMENT
It is understood by and between the parties hereto that the foregoing
covenants contained in this Agreement are essential inducements to Xtra-Gold to
engage Goldeye and XxXxxxxxx under the Consulting Agreement, and that but for
the agreement by Goldeye and XxXxxxxxx to comply with such covenants, Xtra-Gold
would not have agreed to continue to engage them. Such covenants by Goldeye and
XxXxxxxxx shall be construed to be agreements independent of any other
provisions of this Agreement. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship between the Parties shall not
constitute a defense to the enforcement of such covenants against Goldeye and/or
XxXxxxxxx.
6. SURVIVAL AFTER TERMINATION OF AGREEMENT
Notwithstanding anything to the contrary contained in this Agreement,
the covenants contained herein shall survive the engagement of Goldeye and
XxXxxxxxx by Xtra-Gold and shall continue in force after expiry of the term or
other termination of the Consulting Agreement, however caused.
7. REMEDIES
(i) Goldeye and XxXxxxxxx each acknowledge and agree that
Xtra-Gold's remedy at law for a breach or threatened breach of
any of the provisions of this Agreement would be inadequate
and the breach shall be per se deemed as causing irreparable
harm to Xtra-Gold. In recognition of this fact, in the event
of a breach by Goldeye and/or XxXxxxxxx of any of the
provisions of this Agreement, Goldeye and XxXxxxxxx each agree
that, in addition to any remedy at law available to Xtra-Gold,
including, but not limited to monetary damages, Xtra-Gold,
without posting any bond, shall be entitled to obtain, and
they each agree not to oppose Xtra-Gold's request for
equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction
or any other equitable remedy which may then be available to
Xtra-Gold.
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(ii) Goldeye and XxXxxxxxx each acknowledge that the granting of a
temporary injunction, temporary restraining order or permanent
injunction merely prohibiting the use of Proprietary
Information would not be an adequate remedy upon breach or
threatened breach of this Agreement and consequently agree,
upon proof of any such breach, to the granting of injunctive
relief prohibiting any form of competition with Xtra-Gold.
Nothing herein contained shall be construed as prohibiting
Xtra-Gold from pursuing any other remedies available to it for
such breach or threatened breach.
(iii) Nothing herein contained shall be construed as prohibiting
Xtra-Gold from pursuing any other remedies available to it for
such breach or threatened breach.
8. COUNTERPARTS
This Agreement may be signed by the Parties 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.
9. BINDING EFFECT/ASSIGNMENT
This Agreement shall be binding upon the Parties and their respective
heirs, executors, legal representatives, successors and assigns. This Agreement
shall not be assignable by any Party without the express written consent of all
Parties.
10. 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.
11. SEVERABILITY
The invalidity, illegality or unenforceability of any provision or
provisions of this Agreement will not affect any other provision of this
Agreement, which will remain in full force and effect, nor will the invalidity,
illegality or unenforceability of a portion of any provision of this Agreement
affect the balance of such provision. In the event that any one or more of the
provisions contained in this Agreement or any portion thereof shall for any
reason be held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be reformed, construed and enforced as if such invalid, illegal
or unenforceable provision had never been contained herein.
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12. EXPENSES TO ENFORCE
If it becomes necessary for Xtra-Gold to institute legal action to
enforce the terms and conditions of this Agreement, and such legal action
results in a final judgment in favor of Xtra-Gold, then Goldeye and XxXxxxxxx
each agree to reimburse Xtra-Gold for all direct, indirect or incidental
expenses incurred, including, but not limited to, all attorney's fees, court
costs and other expenses incurred throughout all negotiations, trials or appeals
undertaken in order to enforce Xtra-Gold's rights hereunder.
13. NOTICES
Any notice required or permitted to be given under the terms of this
Agreement shall be sufficient if in writing and if sent postage prepaid by
registered or certified mail, return receipt requested; by overnight delivery;
by courier; or by confirmed facsimile as set forth in the first paragraph of
this Agreement, or at such other place as any of the Parties may designate.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, UNDERSTAND ITS TERMS AND
CONDITIONS, HAVE HAD THE OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF
THEIR OWN CHOICE AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS.
IN WITNESS WHEREOF, the Parties have executed this Agreement effective
as of the date first above written.
XTRA-GOLD RESOURCES CORP.
By: /s/ R. Xxxxx Xxxx
R. Xxxxx Xxxx
Secretary and Treasurer
GOLDEYE CONSULTANTS LTD.
By: /s/ Xxxxxxx Xxxxxx XxXxxxxxx
Xxxxxxx Xxxxxx XxXxxxxxx
Director
/s/ Xxxxxxx Xxxxxx XxXxxxxxx
Xxxxxxx Xxxxxx XxXxxxxxx
Chief Executive Officer
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Office Held (if applicable)
