EXHIBIT 10-17
MANAGEMENT CONSULTING AGREEMENT
THIS AGREEMENT is made as of the 1st day of May, 2006.
BETWEEN:
XTRA-GOLD RESOURCES CORP., a company incorporated
under the laws of the State of Nevada
(hereinafter referred to as "XTRA")
OF THE FIRST PART
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XXXX X. XXXXXXX,
of the City of Burnaby, in the Province of British Columbia
(hereinafter referred to as "XXXXXXX")
OF THE SECOND PART
WHEREAS Xxxxxxx possesses the requisite knowledge and experience in
connection with precious metals and mineral exploration;
AND WHEREAS Xtra is desirous of appointing Xxxx X. Xxxxxxx as
Vice-President, Exploration ("VPE") of Xtra and further wishes to engage Xxxxxxx
on a management consulting basis with a view to Xxxxxxx providing certain
services to Xtra.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
sum of Ten ($10.00) Dollars, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto and other good and valuable consideration,
the parties hereto agree as follows:
1. SERVICES TO BE PROVIDED
(a) Xxxxxxx shall provide management consulting services (the
"SERVICES") as may be required by Xtra from time to time.
(b) The scope of the Services will be strictly of a consulting
nature, wherein Xxxxxxx will provide the Services as set out
in Schedule "A" annexed hereto.
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2. COMPENSATION
(a) Xxxxxxx shall be paid Cdn.$120,000.00 per annum (plus GST) in
connection with the Services (the "FEES") and the Fees shall
be paid to Xxxxxxx on the following terms and in a manner of
payment to be agreed to between the Parties:
(i) 50% of the Fees (Cdn.$60,000.00) shall be paid by
Xtra; and
(ii) it is the understanding of Xtra that Xxxxxxx will
enter into a separate agreement with Ginguro
Exploration Inc. ("GINGURO"), upon completion of a
financing (the "FINANCING") currently undertaken by
Ginguro, whereby 50% of the Fees (Cdn.$60,000.00)
shall be paid by Ginguro;
provided, however, that until such time that the Financing is
completed:
(iii) 100% of the Fees (Cdn.$120,000.00) shall be paid by
Xtra.
(b) STOCK OPTIONS
On or about the date of this Agreement, the Board shall xxxxx Xxxxxxx
an aggregate of 324,000 non-qualified stock options (the "OPTIONS") on the
following terms and as more particularly set forth in a stock option agreement
(the "OPTION AGREEMENT") to be entered into between the Parties:
(i) the price at which the Options may be exercised is
U.S.$0.70 per share;
(ii) the term of the Options shall be for three (3) years
and shall expire three (3) years from the date of
grant (the "EXPIRY DATE");
(iii) the Options shall vest over a three (3) year period
at the rate of 9,000 Options per month;
(iv) any portion of the Options that have vested and have
not been exercised in a particular month shall accrue
to the benefit of Xxxxxxx (the "ACCRUED OPTIONS") and
in connection therewith, Xxxxxxx shall have the right
to exercise the Accrued Options for a period of time
as may be set out in the Option Plan referred to in
(viii) hereunder or in accordance with securities
laws governing Xtra, but in no event shall the
Accrued Options be exercised later than the earlier
of (a) the Expiry Date; and (b) the exercise date
contemplated in subparagraphs (v), (vi) and (vii)
hereunder;
(v) in the event of (i) a takeover of Xtra whether by a
unrelated third party of Xtra or by a control block
of its stockholders; or (ii) a sale of more than 51%
of its assets, all Options granted to Xxxxxxx shall
vest in which event Xxxxxxx will have the right to
exercise such Options within 90 days following the
completion of such takeover or sale.
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(vi) in the event that Xxxxxxx is terminated by Xtra,
without cause, then in such event Xtra agrees that
Xxxxxxx shall retain 100% of the Accrued Options and
50% of the unvested Options (the "UNVESTED OPTIONS");
provided, however that the Options referred to in
this subparagraph must be exercised no later than 90
days following such termination, failing which these
Options will be cancelled;
(vii) in the event that Xxxxxxx is terminated by Xtra, with
cause, then in such event Xtra agrees that Xxxxxxx
shall retain 100% of the vested but unexercised
Options (the "VESTED OPTIONS"); provided, however
that the Vested Options must be exercised no later
than 90 days following such termination, failing
which such Vested Options will be cancelled. All
unvested Options will be cancelled immediately upon
termination, with cause;
(viii) Xtra implemented and adopted a 2005 equity
compensation plan (the "OPTION PLAN") which
implementation and adoption was been approved in
writing by the Board in June 2005; and
(ix) the Options shall at all times be subject to the
terms of the Option Agreement and the Option Plan.
For purposes of clarity of subparagraph 2 (vi) and (vii), Xxxxxxx shall
mean and include the VPE.
3. PLACE OF WORK
Xxxxxxx shall render the Services primarily at his place of business;
however, upon request, will provide the Services at such other place or places
as may be reasonably requested by Xtra from time to time as deemed appropriate
for the performance of his Services.
4. TIME
The VPE's daily schedule and hours worked on any given day shall
generally be at Xxxxxxx'x discretion, but at all times shall be subject to and
dependent upon Xtra's needs. Xtra relies upon Xxxxxxx to ensure that he devotes
sufficient time as deemed necessary in order to fulfill the spirit and purpose
of this Agreement.
5. REIMBURSEMENT FOR EXPENSES INCURRED BY XXXXXXX ON BEHALF OF XTRA
Xxxxxxx will submit an expense report for expenses actually and
properly incurred on behalf of Xtra on a monthly basis in the form provided by
Xtra for such purpose. Xtra shall reimburse Xxxxxxx for approved reasonable
expenses within five (5) business days following receipt of Xxxxxxx'x itemized
monthly expense report. Xxxxxxx agrees to provide proper receipts for expenses
incurred and submitted.
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6. REPRESENTATIONS OF XXXXXXX
(a) Xxxxxxx represents that he has the requisite qualifications,
experience and capabilities to perform the Services to a
standard of care, skill and diligence acceptable within the
mining industry.
(b) Xxxxxxx shall complete an Officer's and Director's
Questionnaire (the "QUESTIONNAIRE"). The parties hereto
acknowledge that the Questionnaire had not been completed
prior to the execution of this Agreement. The parties agree
that Xtra shall have the right to terminate this Agreement
without advance notice in the event that the Questionnaire
reveals information that, in the determination of the Board,
could reasonably adversely affect Xtra's disclosure in its SEC
filings.
(c) Xxxxxxx further represents that none of the following events
has occurred during the previous 10 years:
(i) there has been no bankruptcy filed by or against
Xxxxxxx or any business of which Xxxxxxx was a
general partner or executive officer at the time the
petition was filed or within two (2) years prior to
the filing;
(ii) Xxxxxxx has not been convicted in a criminal
proceeding or is the subject of a pending criminal
proceeding (except traffic violations);
(iii) Xxxxxxx is not and has not 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 the
involvement in any type of business, securities or
banking activities; and
(iv) Xxxxxxx has not 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, and the judgment has not been
reversed, vacated or suspended.
7. INDEPENDENT CONSULTANT
(a) Xxxxxxx shall not be construed to be an employee of Xtra and
at all times shall remain an independent consultant.
(b) Xxxxxxx shall not be entitled to nor shall 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.
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(c) No withholding for income taxes or any other tax or
contribution shall be deducted from payments rendered to
Xxxxxxx. Xxxxxxx herein agrees to be solely responsible for
the payment or taxes or contributions due on any amounts
received by Xxxxxxx under this Agreement.
8. TOOLS OF TRADE AND SUPPLIES
Unless otherwise agreed to by Xtra in advance, Xxxxxxx 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.
9. EXCLUSIVITY OF XXXXXXX
Nothing herein shall be deemed to require Xxxxxxx to provide his
Services exclusively to Xtra, provided however, that Xxxxxxx shall be prohibited
from direct competition against Xtra where he may provide similar Services to
third party companies. In particular, Xxxxxxx agrees to provide Xtra with a
first right of refusal on all recommendations made by him with respect to
mineral and acquisition properties as set out in paragraph 14 herein. In
particular, for purposes of paragraphs 9 and 14, the Parties hereto agree that
the area of interest is established as being any mineral property situate in
Africa.
10. CONFIDENTIALITY
(a) During the term of this Agreement and thereafter for a period
of two (2) years, Xxxxxxx shall maintain all matters involving
Xtra and the Services performed by Xxxxxxx in the strictest of
confidence, except insofar as shall be required in order for
Xxxxxxx to perform the Services hereunder or as may be
authorized in writing by Xtra, or as may come into the public
domain through sources beyond the control of Xxxxxxx or Xtra
or as may be required by law.
(b) Xxxxxxx hereby agrees to enter into and execute a
confidentiality, non-competition and non-disclosure agreement
simultaneously with the execution of this Agreement.
(c) Upon termination of this Agreement, Xxxxxxx warrants that he
shall deliver to Xtra forthwith any and all materials and
information relating to the Services including, but not
limited to, any and all files, agreements, reports,
correspondence, business plans, technical and financial data.
11. INDEMNIFICATION
In the event of any legal action commenced by a corporation or an
individual with respect to Xxxxxxx'x Services under this Agreement, Xtra hereby
agrees to indemnify and hold harmless Xxxxxxx 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
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provided under this paragraph shall not be available to the extent of Xxxxxxx'x
xxxxx negligence, willful misconduct, violation of applicable statute, rule or
regulation, or under circumstances where applicable law does not permit
indemnification.
12. OWNERSHIP OF INFORMATION
Any and all information produced as a result of the Services provided
by Xxxxxxx or any documentation deriving therefrom shall remain the exclusive
property of Xtra and Xxxxxxx shall have no claim or interest therein, except as
referred to hereunder in paragraph 14.
13. INSURANCE
(a) Xtra hereby agrees to consider death and dismemberment
insurance coverage (the "INSURANCE") for any person attending
or working upon its mineral properties in Ghana.
(b) Provided that Xtra determines that the Insurance can be
purchased at a reasonable cost, Xtra hereby agrees to purchase
the Insurance.
14. RIGHT OF FIRST REFUSAL
Subject to paragraph 9 of this Agreement, in the event that Xtra
declines any interest in acquiring a particular mining property, Xxxxxxx shall
have the right to pursue other potential purchasers for such purpose.
15. ASSIGNMENT
Xxxxxxx may not assign his interests under this Agreement or any of the
Services to be provided by Xxxxxxx without having first obtained the consent in
writing of Xtra.
16. TERM
The term of this Agreement is for three (3) years commencing on May 1,
2006 (the "TERM"). Thereafter, in the event that Xtra fails to provide 60 days'
notice in writing to Xxxxxxx to the contrary, the Term will be renewed in
increments of one (1) year in accordance with the existing terms and conditions
of this Agreement, unless such terms and conditions are otherwise amended and
agreed to in writing between the Parties.
17. TERMINATION
(a) Except as provided in paragraph 6(b) of this Agreement, either
Xxxxxxx or Xtra may terminate this Agreement without reason or
cause by first providing the other party with three (3)
months' written notice in advance of such termination.
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(b) Xtra may terminate this Agreement, without providing Xxxxxxx
with any notice of termination, in the event of any one of the
following causes:
(i) Xxxxxxx is convicted of a crime;
(ii) Xxxxxxx commits fraud or similar actions against Xtra;
(iii) Xxxxxxx commits willful misconduct; or
(iv) Xxxxxxx commits habitual intoxication or substance abuse.
(c) In the event of the voluntary termination by Xxxxxxx, any
unexercised Options or Accrued Options shall be cancelled 90
days following such termination.
(d) In the event of termination of Xxxxxxx by Xtra, without
notice, for cause as set out in subparagraph (b) above, any
unexercised Options or Accrued Options shall be cancelled
immediately.
(e) Xxxxxxx agrees to maintain all matters herein in confidence,
in perpetuity, except as referred to in paragraph 14 above,
unless disclosure of such matters is required pursuant to a
court of law.
18. RETIREMENT ALLOWANCE
(a) In the event that Xtra terminates Xxxxxxx, without cause, at
any time during the Term; provided however that Xxxxxxx shall
have provided the Services for at least six (6) months,
Xxxxxxx shall be paid a pro rata portion of his Fees based on
50% of his Fees for an 18 month period. For clarity purposes,
the Parties hereto agree that Xxxxxxx shall be paid an
aggregate sum of CAD$90,000 upon:
(i) execution and delivery of a full and final release;
(ii) execution and delivery of corporate resignations of
any offices held by the VPE; and
(iii) the return of all Xtra property in the possession of
Xxxxxxx as set out in paragraph 10(c) of this
Agreement.
19. 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:
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(a) if to Xtra,
(i) by regular mail or courier to:
0000 Xxxxx Xxxxx Xxxx - and - 0 Xxxxxxxx Xxxxxx
Xxxxx 000 Xxxxxxx XX X0X 0X0
Xxxx Xxxxx XX 00000
(ii) by e-mail transmission to:
xxxxxxxxxxxx@xxxxxx.xxx
with a copy to:
xxxxx@xxxxxxxxx.xx
(iii) by fax to:
(000) 000-0000
(b) if to Xxxxxxx,
(i) by regular mail or courier to:
#000 - 0000 Xxxxxxxxx Xxxxxx
Xxxxxxx XX X0X 0X0
(ii) by e-mail transmission to:
xxxxxxxxx@xxxxxxx.xxx
(iii) by fax to:
(000) 000-0000
Either Party may change its mailing address, e-mail address or
facsimile number by notifying the other Party in writing.
20. 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 hereto and continue to be of full force and
effect as of the date upon which the ruling becomes final).
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21. CONSENTS AND WAIVERS
No consent or waiver by either 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.
22. ENUREMENT
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.
23. ENTIRE AGREEMENT
This document contains the entire agreement made between the Parties
hereto as of the 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.
24. 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.
25. APPLICABLE LAW
For all purposes, this Agreement will be governed exclusively by and be
construed and enforced in accordance with the laws prevailing in the State of
Nevada.
26. EXECUTION OF AGREEMENT
This Agreement may be signed by the Parties hereto in counterpart, 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.
27. NO PARTNERSHIP OR AGENCY
The Parties hereto have not created a partnership and nothing contained
in this Agreement shall in any manner whatsoever constitute any Party as the
partner, agent or legal representative of the other Party, nor create any
fiduciary relationship between them for any purpose whatsoever. No Party shall
have any authority to act for or assume any obligation or responsibility on
behalf of the other Party, except as may be from time to time agreed to in
writing between the Parties or as otherwise expressly provided.
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IN WITNESS WHEREOF the Parties hereto have executed this Agreement as
of the date first above written.
SIGNED, SEALED AND DELIVERED ) XTRA-GOLD RESOURCES CORP.
in the presence of )
)
) Per: /s/ Xxxxxxx Xxxxxx XxXxxxxxx
) ----------------------------
) Xxxxxxx Xxxxxx XxXxxxxxx
) Chairman and CEO
)
/s/ Xxxx XxXxxxxx ) /s/ XXXX X. XXXXXXX
--------------------- ) ----------------------------
Witness ) XXXX X. XXXXXXX
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SCHEDULE "A"
JOB DESCRIPTION OF THE VICE-PRESIDENT, EXPLORATION
OF XTRA-GOLD RESOURCES CORP.
POSITION HELD: Vice-President, Exploration ("VPE")
INCUMBENT: Xxxx X. Xxxxxxx ("XXXXXXX")
TERMS OF REFERENCE
This written job description of the responsibilities and accountability of the
position of the VPE has been prepared to empower the Board with a means of
directing, assessing, encouraging and compensating the activities of Xtra's VPE.
This job description forms the basis for and an addendum to the terms of the
management consulting agreement entered into between Xtra and Xxxxxxx (the "MC
AGREEMENT").
COMPLIANCE
Xxxxxxx'x performance of his Responsibilities set forth hereunder shall, at all
times, be subject to his compliance with the provisions of applicable laws,
rules and regulations. Xxxxxxx shall be subject to and agrees to comply with all
internal policies instituted by Xtra and applicable to its executive officers.
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
independent compensation committee (the "ICC") comprised of the unrelated
directors of Xtra that may be formed at a later date.
SCOPE OF SERVICES
The scope of the Services, in particular, the job description and
responsibilities of the VPE, shall include but not be limited to:
o making project or property site attendances as may be required from
time to time, preparing progress reports from time to time with respect
to Xtra's mineral exploration projects, conducting due diligence as may
be required from time to time in connection with potential mineral
properties; reviewing geological data and liaising with principal
owners of mineral properties in which Xtra may wish to acquire an
interest, meeting with government authorities and retaining technical
experts as may be required from time to time;
o all reporting of activities and/or progress reports shall be made
directly to Xxxx Xxxxx, President, Exploration;
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o consulting with other parties in the mining industry from time to time
in connection with the matters referred to above with a view to making
recommendations to the Board;
o making recommendations to the Board and its relevant committees with
respect to the acquisition and/or abandonment of mineral exploration
properties;
o meeting or discussing with the Chairman and Chief Executive Officer,
the Board or its committees as may be required from time to time to
provide regular and timely reports of plans and operations in
connection with the business of the Xtra; and
o preparing, having approved by the Board and implementing plans for the
operation of Xtra including plans for exploration programs, costs of
operations, other expenditures in connection with Xtra's mineral
projects.
SPECIFIC ACCOUNTABILITY
The Board and/or the ICC will review the performance of the VPE in connection
with each of the above-noted responsibilities (the "RESPONSIBILITIES"), which
may be amended from time to time, and will record and discuss their assessment
with Xxxxxxx six (6) months following the execution of the MC Agreement or such
late date as may be determined by the Board and/or the ICC. Thereafter, the
Board and/or the ICC will annually review the performance of the VPE in
connection with the Responsibilities and will record and discuss this assessment
with Xxxxxxx at such time.
PERFORMANCE
Above-average 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 the VPE
will be recognized in a reward for initiative and the Board and/or the ICC may
elect to award additional compensation to be determined, based on the
achievement of milestones as may be established from time to time.
