EMPLOYEE LEASING AGREEMENT
This
EMPLOYEE LEASING AGREEMENT (this “Agreement”) is made
and entered into as of February 1, 2010 (the “Effective Date”)
between Montana Tunnels Mining, Inc. (“Lessor”) and Apollo
Gold Corporation (“Apollo”). Apollo
and Lessor are referred to herein individually as a “Party” and
collectively as the “Parties”.
RECITAL
WHEREAS,
pursuant to the Purchase Agreement, of even date herewith, among Apollo Gold,
Inc. (“Seller”), Elkhorn
Goldfields, LLC (“Buyer”), Calais
Resources, Inc., Calais Resources Colorado, Inc., Seller sold all of the
outstanding capital stock of Lessor to Buyer;
WHEREAS,
following the closing of the transactions contemplated by the Purchase
Agreement, Apollo desires to retain the services of certain employees of Lessor,
and Lessor desires to provide the services of such employees to Apollo, on the
terms and subject to the conditions set forth in this Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual agreements set forth in this Agreement
and for other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the Parties agree as follows:
1. Term;
Termination.
1.1 The
term of this Agreement shall commence on the date of this Agreement and continue
until it is terminated by either Party, as provided in this Agreement (the
“Term”).
1.2 Lessor
or Apollo may terminate this Agreement at any time by providing written notice
of such termination to the other Party at least ten (10) days prior to the
effective date of the termination, unless such notice period is waived by the
recipient.
2. Services. On
the terms and subject to the conditions set forth in this Agreement, Lessor
agrees to lease the employees set forth on Exhibit A (“Employees”) to Apollo
to perform services for Apollo, with the allocation of time (i.e., the
percentage) by such Employees between Lessor and Apollo to be determined by
Apollo. Subject to Section 3 of this
Agreement, Lessor will continue to be responsible for all wages, salary,
compensation, employee benefits, insurance, workers’ compensation coverage,
unemployment compensation coverage, taxes, withholdings, contributions,
expenses, employee-related reporting, filing and disclosure obligations,
compliance with all employment laws, and all other employment-related
liabilities for Employees that arise during the term of this
Agreement.
3. Compensation.
3.1 Apollo
shall pay to Lessor, during the Term, the proportionate percentage (as set forth
on Exhibit A)
of the Lessor’s wages and employee benefit costs associated with each Employee
immediately prior to the entry into this Agreement (the “Compensation”) for so
long as such Employee performs services for Apollo. Lessor agrees
that it shall not increase the amount of Compensation (including employee
benefits) without the prior written consent of Apollo.
3.2 Lessor
shall provide Apollo with an invoice within five (5) days following the end of
each month setting forth the Compensation. Lessor shall promptly
provide Apollo such additional information regarding the Compensation and the
calculation thereof as Apollo may request. Apollo shall make the
payments required under this Section 3 to Lessor
on or before the last day of the month next following the month in which the
Employee performs services for that Company pursuant to this
Agreement.
4. Supervision. During
the Term, Lessor agrees that the Employees will perform services at Apollo’s
Black Fox mine and such other services as may be mutually agreed upon by Lessor
and Apollo. Apollo shall not act as an employer with respect to the
Employees and shall have no responsibility, authority, or liability as
such. Lessor reserves the right and authority, in its capacity as
employer, to direct, supervise, and discipline (including hire, retain, and
terminate) the Employees. Apollo, however, shall be permitted to
reasonably request that Lessor replace any Employee, which request shall be
promptly considered by Lessor. Apollo shall have the authority to
designate tasks to be performed, and shall have the authority to instruct and
oversee the Employees in the manner, means, and method of accomplishing such
tasks for Apollo.
5. Wage and
Salaries. Lessor shall be responsible for the payment of all
amounts to Employees. Subject to Section 3, all
withholding and payroll taxes due with respect to such payments, as well as any
other legally required contributions (such as in the nature of social security
payments) shall be the sole responsibility of Lessor. Apollo shall
not be obligated to pay any wage, salary, or compensation to the Employees
directly, nor shall Apollo be responsible for any withholding taxes or
contributions due with respect to such payments.
6. Personnel
Policies. Except as specified in this Agreement, all terms and
conditions of employment or service applicable to the Employees shall be
governed by Lessor’s personnel policies and practices in effect at the execution
of this Agreement, or as amended from time to time.
7. Workers’
Compensation. Lessor shall provide workers’ compensation
insurance for the Employees during the Term; provided, however, that Apollo
shall reimburse Lessor for any and all claims and premiums associated with such
coverage for each Employee who performs services for Apollo pursuant to this
Agreement.
8. Indemnification.
8.1 Lessor
shall indemnify, defend and hold harmless Apollo, its agents, affiliates, and
their respective officers, directors and employees from and against any and all
losses, damages, injuries, claims, demands, liabilities, costs, and expenses
(including reasonable attorneys’ and other professionals’ fees and expenses and
in this Agreement collectively referred to as “Losses”) attributable
to, arising from or caused by (i) any breach of this Agreement, (ii) by Lessor’s
willful misconduct or gross negligence in the performance of the services
rendered by the Employees, (iii) any violation of any law in respect of the
Employees, or (iv) any claims by the Employees against Apollo, except for Losses
attributable to, arising from or caused by a material breach of this Agreement
by Apollo or Apollo’s willful misconduct or gross negligence.
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9. Notification and Defense of
Claim.
9.1 In
the event of any claim or other assertion of liability by third parties with
respect to which Apollo is entitled to indemnification pursuant to this
Agreement, the Party seeking indemnification (the “Indemnified Party”)
shall notify the indemnifying Party (the “Indemnifying Party”)
in writing, promptly after the Indemnified Party receives notice of such claim,
and in no event later than fifteen (15) days after receipt of a summons from or
a complaint filed in any court or other governmental agency or body; provided, however, that failure
to give such notice shall not affect the rights of the Indemnified Party
hereunder except to the extent that such failure has materially prejudiced the
Indemnifying Party’s ability to defend such claim. The Indemnifying
Party may use counsel of its own choosing, and the Indemnified Party shall
reasonably cooperate with the Indemnifying Party in the defense of such claim,
including the settlement of the matter on the basis stipulated by the
Indemnifying Party (with the Indemnifying Party remaining responsible for all
costs and expenses of such settlement). The Indemnifying Party shall
keep the Indemnified Party reasonably advised of the progress of any proceedings
related to such claim, and of any settlement discussions or proposals with
respect thereto. If the Indemnifying Party fails to defend any such
claim within a reasonable time after notice thereof or if counsel to the
Indemnified Party advises the Indemnifying Party that a conflict of interest
with respect to the joint defense exists, the Indemnified Party shall be
entitled to undertake the defense, compromise or settlement of such claim at the
expense of and for the account and risk of the Indemnifying Party.
9.2 If
there is a reasonable probability that such claim may materially and adversely
affect the Indemnified Party, other than as a result of money damages or other
money payments totally covered by the Indemnifying Party, the Indemnified Party
shall have the right, at its sole expense, to participate in the defense,
compromise or settlement of such claim, and the Indemnifying Party shall not
take any action materially affecting the defense, compromise or settlement of
such claim without the consent of the Indemnified Party, which consent shall not
be unreasonably withheld or delayed.
9.3 If
the facts giving rise to indemnification hereunder shall involve a possible
claim by the Indemnified Party against any third party, the Indemnified Party
shall have the right, at its sole expense, to undertake the prosecution,
compromise and settlement of such claim.
10. Limitation of
Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH
IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY OTHER
PERSONS FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOSSES
(INCLUDING DAMAGES FOR LOSS OF BUSINESS, LOSS OF PROFITS, OR THE LIKE), WHETHER
BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY OR
OTHERWISE, EVEN IF A PARTY OR ITS REPRESENTATIVES HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
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11. No
Partnership. Nothing contained in this Agreement shall be
construed to create a partnership or joint venture between Lessor and
Apollo.
12. No Third Party
Beneficiaries. Lessor and Apollo acknowledge that this
Agreement is solely for their benefit and, subject to provisions in this
Agreement regarding assignment, that of their successors and assigns; and that
no third party shall have any rights or claims arising hereunder nor is it
intended that any third party shall be a third party beneficiary of any
provisions hereof.
13. Force
Majeure. Neither Party shall be deemed to be in default
hereunder or have failed or delayed to perform any obligation hereunder if it is
prevented from, or delayed in, performing any such obligation by reason of force
majeure, act of God, labor strike, civil unrest or similar occurrence which is
beyond the control of such Party. The Party affected by any of the foregoing
shall advise the other Party as soon as possible about any threatened or
existing circumstance that may result in a failure or delay in performance, and
use such Party’s commercially reasonable efforts to commence or resume
performance as soon as possible.
14. Notices. All
notices, consents, approvals, instructions and other communications required or
permitted under this Agreement (collectively, “Notice”) shall be
effective only if given in writing and shall be considered to have been duly
given when (i) delivered by hand, (ii) sent by telecopier (with
receipt confirmed), provided that a copy is mailed (on the same date) by
certified or registered mail, return receipt requested, postage prepaid, or
(iii) received by the addressee, if sent by Express Mail, Federal Express
or other reputable express delivery service (receipt requested), or by first
class certified or registered mail, return receipt requested, postage
prepaid. Notice shall be sent in each case to the appropriate
addresses or telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a Party may from time to time designate as to itself by
notice similarly given to the other Parties in accordance herewith, which shall
not be deemed given until received by the addressee). Notice shall be
given:
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(a)
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to
Apollo at:
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Apollo
Gold Corporation
0000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: R.
Xxxxx Xxxxxxx
Fax: (000)
000-0000
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(b)
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to
Lessor at:
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Montana
Tunnels Mining, Inc.
X.X. Xxx
000
Xxxxxxxxx
Xxxx, XX 00000
Attn: General
Manager
Fax: [___________]
15. Compliance with
Laws. Each Party shall comply with and abide by all employment
related statutes, laws, rules, regulations, requirements, orders, notices,
determinations, and ordinances of any federal, state, county, or municipal
government and appropriate departments, commissions or boards.
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16. Assignment. Neither
Party to this Agreement may assign its rights hereunder without the prior
written consent of the other Party.
17. No
Waiver. The failure of a Party to insist on strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of, or deprive that Party of the right thereafter to insist upon strict
adherence to, that term or any other term of this Agreement. Any
waiver must be in writing signed by the Party against which such waiver may be
asserted. No waiver or consent to any action on any one occasion shall be deemed
to be or imply a waiver or consent to other actions or similar actions not
specifically waived or consented to.
18. Amendments in
Writing. Amendments to or modifications of this Agreement
shall only be valid if made in writing and signed by the Parties to this
Agreement.
19. Headings. The
headings in this Agreement are intended solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.
20. Severability. In
the event that any provision of this Agreement shall be unenforceable, in whole
or in part, such provision shall be limited to the extent necessary to render
the same valid, or shall be excised from this Agreement, as circumstances
require to effectuate the intent of the Parties in entering into this Agreement,
and this Agreement shall be construed as if said provision had been incorporated
in this Agreement as so limited, or as if said provision had not been included
in this Agreement, as the case may be.
21. Entire
Agreement. This Agreement constitutes the entire agreement of
the Parties to this Agreement with respect to the subject matter of this
Agreement and supersedes all prior agreements and undertakings, both written and
oral.
22. Governing Law and
Venue. This Agreement is made under and shall be governed by
and construed in accordance with the laws of the State of Colorado without
giving effect to principles of conflicts of laws of that state. The
Parties hereby submit to the exclusive jurisdiction and venue of the courts of
the State of Colorado for purposes of any legal action.
[Signature
Pages Follow.]
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IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the
date first above written.
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LESSOR:
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APOLLO:
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MONTANA
TUNNELS MINING, INC.
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APOLLO
GOLD CORPORATION
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By:
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/s/ Xxx Xxxxxx
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By:
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/s/ Xxxxxx Xxxxxxxx
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Name:
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Name:
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Title:
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Title:
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[Signature
Page to Employee Leasing Agreement]
Exhibit
A
Leased
Employees
