EMPLOYMENT AGREEMENT BETWEEN KOLA MINING CORP. AND IGOR A. KOVARSKY DATED JUNE 1, 2008
EXHIBIT
4.1
AND XXXX X.
XXXXXXXX DATED JUNE 1, 2008
Dated:
June 1, 2008
BETWEEN:
OF THE
FIRST PART
AND:
XXXX
X. XXXXXXXX
OF THE
SECOND PART
___________________________________________________________________
___________________________________________________________________
THIS
AGREEMENT made as of and to have effect from the 1st day of June,
2008,
BETWEEN:
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KOLA
MINING CORP., a company duly
incorporated under the laws of British Columbia, and having its head
office at Xxxxx 000, 000 Xxxxxx Xxxxx, Xxxxxxxxx, XX X0X
0X0
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(hereinafter called the "Company")
OF
THE FIRST PART
AND:
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XXXX
X. XXXXXXXX, of 00 Xxxxx Xxxx,
Xxxx Xxxxx, XX X0X 0X0
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(hereinafter
called "Kovarsky")
OF
THE SECOND PART
WHEREAS:
A. The
Company is a Vancouver based mining and exploration company, which has acquired
precious and base metal properties situated in Russia and
Kyrgyzstan;
B. The
Company is a reporting company whose shares are posted and listed for trading on
the TSX Venture Exchange;
C. The
Company is planning to conduct a financing in the near future to provide funds
for the development of its Souker project in Russia (the
“Financing”);
X. Xxxxxxxx
has certain skills, expertise and experience which the Company wishes to
employ;
E. the
Company agrees to retain and Kovarsky agrees to serve in the capacity more
particularly set out in Article 1 of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES
that in consideration of the representations, warranties, covenants and
agreements hereinafter set forth and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged by each of the
parties), the parties represent, warrant, covenant and agree as
follows:
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ARTICLE
1
ENGAGEMENT
AND DURATION
1.1 The
Company hereby engages the services of Kovarsky as an employee and Kovarsky
hereby accepts such engagement and agrees to provide his services to the best of
his ability and in accordance with the terms and conditions of this Agreement,
as President and Chief Executive Officer of the Company.
1.2 The
Company shall engage Kovarsky for a term of five (5) years commencing June 1,
2008 and terminating on May 31, 2013 (the “Termination Date”), subject to
earlier termination as provided for in sections 5.1 and 5.3 hereof.
1.3 The
term of this Agreement may be extended by the consent of both parties for
additional terms of five years by giving notice of such extension at any time
after the first anniversary of the term then in effect.
ARTICLE
2
DUTIES
2.1 Kovarsky
shall perform all duties customarily performed by a President and CEO of a
publicly-held company engaged in a business similar to the Company's business
including, without limiting the generality of the foregoing, the administration
and management of the business and affairs of the Company.
2.2 Kovarsky
shall devote his full time and attention to the business and affairs of the
Company during each year of this Agreement, use his best efforts to promote the
interests of the Company and, to the extent necessary to discharge the
responsibilities assigned to Kovarsky, perform faithfully and efficiently such
responsibilities. The Company acknowledges that Kovarsky's duties
will usually be performed on business days, but his circumstances may require
that his services may also be performed on weekends and
holidays. Kovarsky shall not be entitled to hold the position of a
director in any other company other than the Company during the term of this
Agreement without the prior written consent of the Company, which consent will
not be unreasonably withheld.
2.3 Kovarsky
shall report directly to the Board of Directors of the Company.
2.4 In
the event of a change of control of the Company, Kovarsky shall continue to
serve the Company in the same capacity and have the same authority,
responsibilities and status as he had as of the date immediately prior to the
change of control. For the purposes of this Agreement, a "change of
control" shall be deemed to have occurred when:
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(a)
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a
person or combination of persons, acting in concert by virtue of an
agreement, arrangement, commitment or understanding, becomes a “control
person” (as that term is defined in the Securities Act, British
Columbia) of the Company; or
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(b)
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a
majority of the directors elected at any annual or special general meeting
of shareholders of the Company are not individuals nominated by the
Company's then incumbent board of
directors.
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ARTICLE
3
REMUNERATION
AND BENEFITS
Remuneration
3.1 Kovarsky
shall be paid $20,000 per month in Canadian funds, for the term of this
Agreement. The remuneration shall be reviewed on each anniversary of
the effective date of this Agreement. In the event of death, or
permanent incapacity or disability of Kovarsky, the remuneration payable to
Kovarsky shall continue for a period of three months after such death, or
permanent incapacity or disability. In the event of the temporary
incapacity or disability of Kovarsky such that Kovarsky is unable to reasonably
perform his duties hereunder, Kovarsky shall be paid $18,000 per month in
Canadian funds, for the first three months for such period of incapacity or
disability and $15,000 per month in Canadian funds, for the following three
months of such period of incapacity or disability. If Kovarsky's
temporary incapacity or disability continues for six consecutive months, the
Company at any time thereafter during the continuation of such condition may
deem the incapacity or disability to be permanent.
Options
3.2 Kovarsky
shall be eligible for share options as may be approved by the Board of Directors
of the Company from time to time. Initially, Kovarsky will be granted
stock options to purchase an aggregate 1,000,000 shares of the Company to be set
at either the Financing price or the market price, whichever is higher,
exercisable for a period of five years from the date of grant. These
initial options will be subject to a vesting restriction that will expire on
April 30, 2009. These options will be granted on or before July 31,
2008 as market conditions permit.
Reimbursement of
Expenses
3.3 The
Company shall reimburse Kovarsky for all reasonable expenses incurred by
Kovarsky in the performance of duties pursuant to this Agreement, provided that
Kovarsky provides the Company with a written expense account in reasonable
detail on a monthly basis.
Benefits and
Insurance
3.4 Kovarsky
will be entitled to the full benefits package provided by the Company for its
executive employees. In addition, the Company will provide you with your
personal international medical insurance to cover you while on Company business
outside of Canada.
Vacation and Other
Benefits
3.5 Kovarsky
shall be entitled to three weeks annual paid vacation from the
Company.
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ARTICLE
4
RESTRICTIVE
COVENANTS
Non-Competition
4.1 Subject
to the provisions of paragraph 4.10 hereof, during the term of this Agreement
and for the six months following the termination or expiration of this
Agreement, Kovarsky shall not:
(a) own
or have any interest directly in; nor
(b) act
as an officer, director, agent, employee or consultant for
any
person, firm, association, partnership, corporation or other entity (the “Competitive Entity”) engaged
in mineral exploration within the Russian Federation or any CIS country or which
has any interest in any mineral property located within ten kilometres of any
mineral property in which the Company has an interest at any time.
4.2 The
restriction set out in Section 4.1 above shall not apply to ownership by
Kovarsky of less than five percent (5%) of the publicly traded securities of any
Competitive Entity.
4.3 Kovarsky
acknowledges that the restrictions contained in Section 4.1 are reasonable;
however, in the event that any court should determine that the restrictive
covenants contained in Section 4.1 of this Agreement, or any part thereof, are
unenforceable because of the duration of such provision or the area covered
thereby, such court shall have the power to reduce the duration or area of such
provision and, in its reduced form, such provision shall then be enforceable and
shall be enforced.
Confidentiality
4.4 The
term "Confidential
Information" means any and all information concerning any aspect of the
Company not generally known to persons other than those associated with the
Company. The Company may disclose, in writing or orally, certain
Confidential Information to Kovarsky.
4.5 Kovarsky
acknowledges and agrees that any Confidential Information disclosed to Kovarsky
is in the strictest confidence. Any Confidential Information
disclosed to Kovarsky in any form whatsoever is and shall be considered
confidential and proprietary information of the Company.
4.6 Except
as authorized by the Company, Kovarsky will not, except in the course of his
duties to the Company:
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(a)
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duplicate,
transfer or disclose nor allow any other person to duplicate, transfer or
disclose any of the Company's Confidential Information;
or
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(b)
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use
the Company's Confidential Information without the prior written consent
of the Company.
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4.7 Kovarsky
will safeguard all Confidential Information at all times so that it is not
exposed to or used by unauthorized persons, and will exercise at least the same
degree of care that would be used to protect Kovarsky's own confidential
information.
4.8 Any
and all maps, drill logs, core tests, reports, surveys, assays, analyses,
production reports, technical, accounting and financial records and like
information and materials received from the Company and any copies or excerpts
thereof containing proprietary or Confidential Information will remain the
property of the Company and will, upon the request of the Company, be promptly
returned to the Company by Kovarsky.
4.9 The
restrictive obligations set forth above shall not apply to the disclosure or use
of any information which:
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(a)
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is
or later becomes publicly known under circumstances involving no breach of
this Agreement by Kovarsky;
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(b)
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is
already known to Kovarsky at the time of receipt of the Confidential
Information;
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(c)
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is
lawfully made available to Kovarsky by a third party;
or
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(d)
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is
authorized by the Board of Directors of the
Company.
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4.10 The
provisions of Article 4.1 to 4.3 shall survive the termination of this Agreement
for a period of one year after termination.
ARTICLE
5
TERMINATION
5.1 The
Company may terminate Kovarsky's engagement under this Agreement only upon the
occurrence of any of the following events:
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(a)
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Kovarsky
committing an act of gross negligence of wilful
misconduct;
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(b)
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the
conviction of Kovarsky under the Criminal Code of Canada
or the Securities Acts of any of the Provinces of Canada;
or
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(c)
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the
breach or default of any material term of this Agreement by Kovarsky if
such breach or default has not been remedied to the satisfaction of the
Company within 14 days after written notice of the breach of default has
been delivered by the Company to Kovarsky, as the case may
be;
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PROVIDED
THAT the Company may not terminate this Agreement nor commence proceedings to
terminate this Agreement pursuant to sub-paragraph 5.1(c) within 180 days of a
“change of control”, as defined in paragraph 2.4 of this Agreement.
5.2 In
the event of the termination of Kovarsky's engagement under this Agreement
pursuant to Section 5.1 of this Agreement, the Company shall pay to Kovarsky,
within 10 days of the
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termination
the full amount of compensation accrued pursuant to Section 3.1 of this
Agreement as of the date of termination.
5.3 Kovarsky
may terminate his obligations under this Agreement only as follows:
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(a)
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upon
giving the Company 90 days notice in writing;
or
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(b)
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upon
the breach or default of any material term of this Agreement by the
Company if such breach or default has not been remedied to the
satisfaction of Kovarsky, within 14 days after written notice of the
breach of default has been delivered by Kovarsky to the
Company.
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5.4 In
the event of the termination of Kovarsky's engagement under this Agreement
pursuant to Section 5.3(b) of this Agreement, the Company shall pay to Kovarsky,
within 10 days of termination six months’ salary.
ARTICLE
6
PERSONAL
NATURE
6.1 This
Agreement is personal and is entered into based upon the singular skill,
qualifications and experience of Kovarsky.
ARTICLE
7
GENERAL
PROVISIONS
Waiver
7.1 No
consent or waiver, express or implied, by any party to this Agreement of any
breach or default by any other party in the performance of its obligations under
this Agreement or of any of the terms, covenants or conditions of this Agreement
shall be deemed or construed to be a consent or waiver of any subsequent or
continuing breach or default in such party's performance or in the terms,
covenants and conditions of this Agreement. The failure of any party
to this Agreement to assert any claim in a timely fashion for any of its rights
or remedies under this Agreement shall not be construed as a waiver of any such
claim and shall not serve to modify, alter or restrict any such party's right to
assert such claim at any time thereafter.
Notices
7.2 Any
notice relating to this Agreement or required or permitted to be given in
accordance with this Agreement shall be in writing and shall be personally
delivered, telefaxed or mailed by registered mail, postage prepaid to the
address of the parties set out on the first page of this
Agreement. Any notice shall be deemed to have been received if
delivered or telefaxed, when delivered or telefaxed, and if mailed, on the fifth
day (excluding Saturdays, Sundays and holidays) after the mailing
thereof. If normal mail service is interrupted by strike, slowdown,
force majeure or other cause, a notice sent by registered mail will not be
deemed to be received until actually received and the party sending the notice
shall utilize any other services which
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have not
been so interrupted or shall deliver such notice in order to ensure prompt
receipt thereof. A party may change its address for service by notice
in writing to the other parties.
7.3 Each
party to this Agreement may change its address for the purpose of this article 7
by giving written notice of such change in the manner provided for in section
7.2.
Applicable
Law
7.4 This
Agreement shall be governed by and construed in accordance with the laws of the
province of British Columbia and the federal laws of Canada applicable therein,
which shall be deemed to be the proper law hereof. The parties hereto
hereby submit to the jurisdiction of the courts of British
Columbia.
Severability
7.5 If
any provision of this Agreement for any reason is declared invalid, such
declaration shall not affect the validity of any remaining portion of the
Agreement, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated and
it is hereby declared the intention of the parties that they would have executed
the remaining portions of this Agreement without including therein any such
part, parts or portion which may, for any reason, be hereafter declared
invalid.
Entire
Agreement
7.6 This
Agreement constitutes the entire Agreement between the parties hereto and there
are no representations or warranties, express or implied, statutory or otherwise
other than set forth in this Agreement and there are no Agreements collateral
hereto other than as are expressly set forth or referred to
herein. This Agreement cannot be amended or supplemented except by a
written agreement executed by all parties hereto.
Non-Assignability
7.7 This
Agreement shall not be assigned by any party to this Agreement without the prior
written consent of all other parties to this Agreement.
Burden and
Benefit
7.8 This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.
Time
7.9 Time
is of the essence of this Agreement.
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Counterpart
7.10 This
Agreement may be executed in counterpart and such counterparts together shall
constitute one and the same instrument and notwithstanding the date of execution
shall be deemed to bear the date as set out on the first page of this
Agreement.
IN WITNESS WHEREOF the parties have
duly executed this Agreement as of the date set out on the first page of this
Agreement.
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KOLA MINING
CORP. BY ITS AUTHORIZED SIGNATORY:
_______________________
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SIGNED,
SEALED AND DELIVERED
by
XXXX X.
XXXXXXXX
in
the presence of:
__________________________
Name
__________________________
Address
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_______________________________
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X. XXXXXXXX
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This is
page 8 to that certain Employment Agreement dated as of June 1, 2008, between
KOLA MINING CORP. and XXXX X. XXXXXXXX
