Exhibit 10.1
CONSULTING
AGREEMENT
THIS AGREEMENT
made as of the 17th of February 2022.
BETWEEN: SILVER
BULL RESOURCES, INC.
(the
"Corporation" or “Silver Bull”)
OF THE FIRST PART
(the "Consultant")
OF THE SECOND
PART
WHEREAS:
| A. | The Corporation wishes to engage the Consultant to provide management
consulting services to the Corporation in connection with the mineral exploration and management activities of the Corporation on its
current and future mineral properties in which the Corporation has an ownership or optioned interest (the “Properties”); and |
| B. | The Corporation and the Consultant wish to specify the terms of
the engagement herein. |
NOW THEREFORE,
IN CONSIDERATION OF the covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
| 1. | Relationship and Duties |
| 1.1 | Subject always to the general control and direction of the Corporation, the Consultant shall act and be
retained to act, during the term of this Agreement, as a consultant to the Corporation or any subsidiary or subsidiaries of the Corporation,
pursuant to the terms and conditions contained herein and as further particularized in this Section 1. |
| 1.2 | The Consultant agrees that (a) it shall act as Chief Executive Officer (“CEO”) and perform
the Services of such a position for Corporation (as described in Schedule A); (b) he shall devote his best efforts, skills and attention
to the performance of his duties and responsibilities in respect of the offices of the Corporation or any of its subsidiaries to which
he is appointed; and (c) any business that the Consultant proposes to undertake outside of the consultancy contemplated which could potentially
overlap with Silver Bull’s work with particular focus in Mexico shall require pre-approval of the Board of Directors of the Corporation. |
| 1.3 | The Consultant's duties will generally be to provide the Corporation with managerial services and assistance
in its mineral exploration activities and to perform duties and responsibilities assigned to it from time to time by the Board of Directors
of the Corporation and to cause the Consultant to discharge such duties as are commensurate with the Consultant’s position with
the Corporation (collectively, the "Services"). |
| 1.4 | The Consultant shall perform the Services to the best of its ability and in a responsible, professional
manner commensurate with its experience, expertise and within acceptable industry standards and shall devote as much time and resources
to its performance of the Services as is required to achieve such standards which are envisioned to be non-exclusive. The Corporation
understands that the Consultant may have other clients (including Arras Minerals Corp.) as is consistent with a consultant rather than
an employee. The Consultant shall promote the interest and goodwill of the Corporation. |
| 1.5 | The Consultant shall provide the Services as an independent contractor. The Consultant shall not be deemed
to be, or represent themselves as, a representative or agent of the Corporation, except as expressly provided in writing by the Corporation
and is consistent with the title of the position(s) held. |
| 1.6 | The Consultant shall comply with all applicable statutes and regulations and the lawful requirements and
directions of any governmental authority having jurisdiction with respect to the Services it provides including the obtaining of all necessary
permits and licences. |
| 1.7 | The Consultant shall refer to the Board of Directors of the Corporation all matters and transactions in
which a real or perceived conflict of interest between the Consultant and the Corporation or any of its subsidiaries may arise. The Consultant
shall not proceed with any such matter objected to by the Board of Directors of the Corporation. |
| 2.1 | The term of this Agreement shall be effective from January 1, 2022 (the “Effective Date”)
and shall continue until this Agreement is terminated in accordance with Section 3 of this Agreement. |
| 3.1 | The Consultant may terminate their engagement with the Corporation by giving not less than ninety (90) days written notice to the
Corporation. At the time the Consultant provides the Corporation with notice to terminate the engagement, or at any time thereafter, the
Corporation shall have the right to elect to terminate the Consultant’s engagement at any time prior to the effective date of the
Consultant’s last day, and upon such election, shall provide to the Consultant a lump sum payment equal to the pro-rata Annual Fee
then in effect for the number of days that remain outstanding to the effective date of the Consultant’s last day of service. |
| 3.2 | Termination by Corporation Without Cause. The Consultant may at any time terminate its agreement
with the Corporation for “Good Reason”, and the Corporation may at any time terminate the Consultant’s agreement without
Cause and without any advance notice, and upon such cessations of the engagement (but excluding any Change of Control Terminations as
set out in Section 3.7 of the Agreement), the Corporation may terminate this Agreement without Cause at any time by providing the Consultant
with written notice of termination and a lump sum payment equal to: |
| (A) | Six (6) months of the Monthly Fee if the Consultant’s engagement agreement is terminated within
the first year from the Effective Date; or |
| (B) | After one (1) year from the Effective Date, twelve (12) months of the Monthly Fee, plus one (1) month’s
monthly fee for each additional year of engagement from the Effective Date, up to a maximum of twenty-four (24) month’s Monthly
Fee plus a pro-rata cash bonus using the annual performance bonus as outlined in Section 4.2. |
| (C) | If the Corporation terminates this Agreement without Cause within three (3) months of a Change of Control
of the Corporation, the Corporation must pay the Consultant twenty-four (24) months of Monthly fee plus a lump sum payment equal to two
(2) annual cash bonuses calculated utilizing the annual performance bonus outlined in Section 4.2 at the time of termination. |
| (D) | If Termination falls under Section 3.2(a),(b),(c) or 3.3 then the Corporation will continue the benefits
provided under any insured standard benefit plan provided by the Corporation for twelve (12) months from the date of the termination,
provided the Corporation is able to do so under the terms of the plan (with any continuation of benefits being subject to the terms and
conditions of the plan provider); |
| 3.3 | Termination By Consultant Following a Change of Control. With Good Reason, the Consultant
may elect, within six (6) months of a Change of Control of the Corporation to terminate their engagement and this Agreement upon providing
written notice of termination to the Corporation. Upon receipt of such notice of termination in accordance with this, the Corporation
must pay the Consultant twenty-four (24) months of the Monthly Fee plus a lump sum payment equal to two (2) annual cash performance bonuses
outlined in Section 4.2 at the time of termination. |
| 3.4 | Termination by the Corporation for Fundamental Breach. Notwithstanding any other provision
of this Agreement, the Corporation may on written notice to the Consultant immediately terminate this Agreement with the Corporation at
any time for Fundamental Breach, without notice or pay in lieu of notice or any other form of compensation, severance pay or damages resulting
from, without limitation, fraud, dishonesty, illegality, breach of statute or regulation, gross incompetence or misuse of alcohol or drugs. |
| 3.5 | Directorship and Offices. Upon the termination of the Agreement between the Consultant and the Corporation, the Consultant
shall immediately resign any directorship or office held in the Corporation or any respective parent, subsidiary or affiliated companies
of the Corporation and, except as provided in this Agreement, the Consultant shall not be entitled to receive any written notice of termination
or payment in lieu of notice, or to receive any severance pay, damages or compensation for loss of office or otherwise, by reason of the
resignation or resignations referred to in this Section 3. |
| 3.6 | Annual Bonus Upon Termination. The Consultant’s participation in any and all annual
bonus plans shall cease immediately on the date the Consultant receives or gives notice of termination of this Agreement and the Consultant
shall only be entitled to receive any Annual Bonus pro-rated to the date the Consultant receives notice of termination without cause. |
| 3.7 | No Additional Payments. The Consultant acknowledges and agrees that unless otherwise expressly
agreed in writing between the Consultant and the Corporation, the Consultant shall not be entitled, by reason of the Consultant’s
relationship with the Corporation or by reason of any termination of their agreement by the Corporation, for any reason, to any remuneration,
compensation or other benefits other than those expressly provided for in this Agreement. The Consultant further acknowledges and agrees
that any amounts paid to the Consultant pursuant to this Section 3 are inclusive of any amounts that may be payable under any statute
of Canada in respect of compensation for length of service, notice of termination or severance pay. |
| 4. | Consultant's Fees and Benefits |
| 4.1 | Subject to Section 1.1 and any adjustments on an annual review, the Consultant shall be remunerated for
providing the Services during the term of this Agreement by payment of a “Monthly Fee” of C$5,000 equalling C$60,000 per year
(the “Annual Fee”). |
| 4.2 | In addition to the Annual Fee, the consultant shall be eligible to participate in the Corporation’s
annual performance bonus (the “Bonus”) of up to fifty (50) percent of the Annual Fee, or a target amount as determined by
the Board of Directors. The amount of the Bonus shall be determined by the Board of Directors, in its sole discretion, based on certain
financial and operating goals and individual performance objectives as defined by the Board of Directors in its sole discretion. The Consultant
acknowledges that there is no assurance that any Bonus will be paid in any given year, that the Bonus arrangements will remain unchanged
or that the Bonus will be of the same amount in any future year as in any past year. Subject to the requirements of Section 3 of
this Agreement, in the event the Consultant gives or receives notice of termination of engagement, all entitlement to receive a Bonus
shall cease (except for: Bonuses that have already been paid to the Consultant by the Corporation; any Bonuses that have been awarded
to the Consultant by the Corporation in respect of an already completed financial year of the Corporation but which have not yet been
paid by the Corporation to the Consultant; and Bonuses that have been earned by the Consultant but not paid to the Consultant by the Corporation
however, in this latter instance, the Bonus shall be paid on a pro rata basis, up to but not beyond the termination date, based on the
financial and operating goals and individual performance objectives that had been set by the Board of Directors). |
| 4.3 | Retention Bonus. The Consultant
will be eligible to participate in the Silver Bull Resources, Inc. Management Retention Plan, as approved by the Board of Directors on
April 15, 2021, and as amended on February 17, 2022 (the “Silver Bull Retention Plan”). |
| (a) | Participation in the Silver Bull Retention Plan will be cancelled if
and when this Agreement is terminated prior to any retention bonus becoming payable. |
| 4.4 | The Corporation shall pay for (or reimburse) the insurance plan premiums (including major medical, dental,
term life, liability, and disability. |
| 4.5 | Taxes. The Consultant shall be responsible for remittance to the proper authorities of any
and all income taxes, employment insurance or social security premiums and workers compensation insurance in relation to the Consultant’s
remuneration hereunder, inclusive of the Annual Fee. The Consultant is and will be solely responsible for, and will file, on a timely
basis, all tax returns and payments required to be filed with, or made to, any federal, state, provincial, or local tax authority with
respect to the provision of services and receipt of fees under the Agreement. |
| (a) | The Corporation reserves the right to withhold local taxes (if any)
for services rendered in Kazakhstan should it be required to do so by the Kazakhstan authorities. |
| (b) | Taxation of a foreign individual in Kazakhstan depends on his/her tax
residency status in Kazakhstan. Under Kazakh tax law, an individual is regarded as a tax resident of Kazakhstan for a particular tax year
if the individual spends more than 183 days in Kazakhstan in any period of twelve consecutive months ending in that year. Otherwise, the
individual is regarded as a non-resident for Kazakhstan tax purposes. Tax residents of Kazakhstan are subject to taxation in Kazakhstan
on their worldwide income, while tax non-resident individuals are subject to tax only on their Kazakh-source income. Personal income tax
rates in Kazakhstan currently amount to 10% but may be subject to change. All income that a foreign person receives for work performed
in Kazakhstan is regarded as taxable Kazakh-source income, regardless of where the income is paid. This income includes salaries, wages
and all types of fringe benefits that an employer provides to employees and consultants (i.e. airfare, pension contribution, accommodation
or meals). The Corporation may be required to compute and withhold personal income tax and social tax on the Consultant’s payments
on a monthly basis, remit the tax, and report these taxes on the Corporation’s quarterly payroll tax reports. |
| 4.6 | The Corporation will provide general liability protection and directors and officers liability protection
and ensure that the Articles of Incorporation also provide general liability protection and indemnification for directors and officers
as approved by the Board of Directors of the Corporation. |
| 5. | Reimbursement of Expenses |
| 5.1 | The Consultant shall be reimbursed for all direct out-of-pocket expenses actually, reasonably and properly
incurred by it in connection with its provision of the Services and for the benefit of the business of the Corporation or its subsidiaries,
provided such expenses are appropriately documented and reasonable. |
| 6. | Confidential Information |
| 6.1 | The Consultant acknowledges that, by reason of this Agreement, the Consultant will have access to Confidential
Information of the Corporation that the Corporation has spent time, effort and money to develop and acquire. For the purposes of this
Agreement any reference to the “Corporation” shall mean the Corporation, and such respective affiliates and subsidiaries
as may exist from time to time. |
| 6.2 | The Consultant acknowledges that the Confidential Information is a valuable and unique asset of the Corporation
and that the Confidential Information is and will remain the exclusive property of the Corporation. |
| 6.3 | The Consultant agrees to and will ensure that they will maintain securely and hold in strict confidence
all Confidential Information received, acquired or developed by the Consultant or disclosed to the Consultant as a result of or in connection
with the Management Consulting Agreement with the Corporation. The Consultant agrees that, both during its tenure with the Corporation
and after the termination of the agreement, the Consultant will not, directly or indirectly, divulge, communicate, use, copy or disclose
or permit others to use, copy or disclose, any Confidential Information to any person, except as such disclosure or use is required to
perform his duties hereunder or as may be consented to by prior written authorization of the Corporation. |
| 6.4 | The obligation of confidentiality imposed by this Agreement shall not apply to information that appears
in issued patents or printed publications, that otherwise becomes generally known in the industry through no act of the Consultant in
breach of this Agreement, or that is required to be disclosed by court order or applicable law. |
| 6.5 | The Consultant understands that the Corporation has from time to time in its possession information belonging
to third parties or which is claimed by third parties to be confidential or proprietary and which the Corporation has agreed to keep confidential.
The Consultant agrees that all such information shall be Confidential Information for the purposes of this Agreement. |
| 6.6 | The Consultant agrees that documents, copies, records and other property or materials made or received
by the Consultant that pertain to the business and affairs of the Corporation, including all Confidential Information which is in the
Consultant’s possession or under the Consultant’s control are the property of the Corporation and that the Consultant will
return same and any copies of same to the Corporation immediately upon termination of the Consultant’s employment or at any time
upon the request of the Corporation. |
| 7.1 | Restriction on Competition. The Consultant covenants and agrees with the Corporation that
the Consultant will not, without the prior written consent of the Corporation, at any time during his employment or for a period of three
(3) months following the termination of the Consultant’s engagement, for any reason, either individually or in partnership or in
conjunction with any person, whether as principal, agent, shareholder, director, officer, employee, investor, or in any other manner whatsoever,
directly or indirectly, advise, manage, carry on, be engaged in, own or lend money to, or permit the Consultant’s name or any part
thereof to be used or employed by any person managing, carrying on or engaged in a business anywhere in the province of Coahuila, Mexico
or other jurisdiction in which the Corporation is carrying on the business of mineral exploration which is in direct competition with
the business of the Corporation. The restrictions set forth in this Section 7.1 shall terminate and shall not apply to the Consultant
where the Management Consulting Agreement is terminated by the Corporation following a Change of Control. |
| 7.2 | Restriction on Solicitation. The Consultant shall not, at any time during their engagement
or for a period of six (6) months after the termination of the Consultant’s engagement, for any reason, without the prior written
consent of the Corporation, for his account or jointly with another, either directly or indirectly, for or on behalf of himself or any
individual, partnership, corporation or other legal entity, as principal, agent, employee or otherwise, solicit, influence, entice or
induce, attempt to solicit, influence, entice or induce: |
| (A) | any person who is employed by the Corporation to leave such employment; or |
| (B) | any person, firm or corporation whatsoever, who is or was, at any time in the last twelve (12) months
of the Consultant’s engagement with the Corporation, a customer or supplier of the Corporation or any affiliate or subsidiary of
the Corporation, to cease its relationship with the Corporation or any affiliate or subsidiary of the Corporation. |
| 7.3 | Corporate Opportunities. During the term of this Agreement, the Consultant will offer to
the Corporation any investment or other opportunity generally in the geographic area (in the province of Coahulia, Mexico, and the business
in which the Corporation operates, of which he may become aware. If after 10 working days the Board of Directors of the Corporation
refuses the opportunity to participate in the investment or venture, the Consultant is free to seek other alternatives only during his
private time. |
| 7.4 | Restriction on Investments. The Consultant may make passive investments in public companies
involved in industries in which the Corporation operates, provided any such investment does not exceed a 10% equity interest, unless the
Consultant obtains consent to acquire an equity interest exceeding 10% by consent of the Board of Directors of the Corporation. |
| 8.1 | The Consultant acknowledges and agrees that the covenants and obligations under Sections 6 and 7 are reasonable,
necessary and fundamental to the protection of the Corporation’s business interests, and the Consultant acknowledges and agrees
that any breach of these Sections by the Consultant would result in irreparable harm to the Corporation and loss and damage to the Corporation
for which the Corporation could not be adequately compensated by an award of monetary damages. Accordingly, the Consultant agrees that,
in the event the Consultant violates any of the restrictions referred to in Sections 6 or 7, this shall be considered grounds for termination
with no severance and the Corporation shall suffer irreparable harm and shall be entitled to preliminary and permanent injunctive relief
and any other remedies in law or in equity which the court deems fit. |
| 9.1 | The invalidity or unenforceability of any provision of this Agreement will not affect the validity or
enforceability of any other provision or part hereof, and any invalid provision will be severable from this Agreement in whole or in part. |
| 10.1 | Any notice required or permitted to be given hereunder, shall be given by registered mail or by personal
delivery or telecopy to the party for whom it is intended, addressed as indicated on the first page hereof or at such other address as
the recipient party shall provide in writing to the delivering party. Any notice delivered personally or by telecopy to the party to whom
it is addressed, shall be deemed to have been given and received on the day it is so delivered or, if such day is not a business day,
then on the next business day following any such day. Any notice mailed shall be deemed to have been given and received on the fifth business
day following the date of mailing. |
| 11. | Confidentiality of Agreement |
| 11.1 | The parties agree that this Agreement is confidential and shall remain so after its termination and that
it or its contents shall not be divulged by any party without the consent in writing of the other party, with the exception of disclosure
to personal advisors and any disclosure required by the laws of any jurisdiction in which the business of the Corporation or its subsidiaries
is conducted or may be conducted in future or by the laws of any jurisdiction to which the Corporation or any of its associated or affiliated
corporations are subject. |
| 12.1 | The Corporation will indemnify the Consultant and save him harmless from and against: |
| (A) | any and all demands, costs, payments, assessments, claims or damages payable to any person for suits or
claims or other actions made against the Corporation or the Consultant in connection with the Services rendered by the Consultant to the
Corporation, |
| (B) | any and all demands, costs, payments, assessments, claims or damages claims arising from loss or damage
to property, or injury to, or death of, any person or persons, and |
| (C) | such other liability of any nature or kind to which the Consultant may be subject, arising from or in
any way out of the provision of Services by the Consultant under this Agreement. Such indemnity shall cover any and all liability of the
Consultant, including all expenses, costs and legal fees incurred in connection therewith. Notwithstanding the foregoing, the foregoing
indemnity shall not apply where a court of competent jurisdiction, in a final judgment that has become non-appealable, has determined
that: |
| (ii) | the Consultant, in the course of performing the Services, has been negligent or dishonest, has engaged
in willful misconduct, or has acted in bad faith or committed any fraudulent act; and |
| (iii) | the expenses, losses, claims, damages or liabilities, as to which indemnification is claimed, were directly
caused by such negligence, dishonesty, willful misconduct, bad faith or fraud. |
| 12.2 | With respect to all demands, costs, payments, assessments, claims or damages payable to any authority
for source deductions, goods and services tax, harmonized sales tax, and any other remittance obligations arising with respect to payment
to the Consultant hereunder or on account of loss or damage to property, or injury to, or death of, any person or persons arising from
or out of the provision of Services by the Consultant under this Agreement, the Consultant shall indemnify and save the Corporation harmless
from and against any and all liability for such demands, costs, payments, assessments, loss, damage, injury or death, including any expenses,
costs and legal fees incurred in connection therewith, expect for liability on account of loss or damage to property, or injury to, or
death of, any person as may arise solely out of the Corporation’s negligence. |
| 13.1 | The parties hereto undertake to do, sign, execute and deliver such other things, deeds or documents accessory
or useful for the purpose of giving full effect to this Agreement with signatures on the signature page. |
| 14.1 | This Agreement is governed by and is to be construed, interpreted and enforced in accordance with the
laws of the Province of British Columbia, and the laws of Canada applicable therein. |
| 15.1 | This Agreement enures to the benefit of and is binding upon the parties and their respective successors
or assigns. |
| 16.1 | As of its date of execution, this Agreement constitutes the entire agreement between the parties and supersedes
all prior agreements between the parties. The parties agree that there are no other collateral agreements or understandings between them
except as provided in this Agreement. |
| 17.1 | The Consultant may not assign this Agreement or provide the services of any individual or Corporation
other than that stated above without the written consent of the Corporation. |
| 18.1 | This Agreement may be amended only in writing by the parties hereto. |
| 19.1 | In this Agreement, a “business day” means a day other than Saturday, Sunday or a statutory
holiday in the relevant jurisdiction. |
| 19.2 | All headings in this Agreement are for convenience only and shall not be used in the interpretation of
this Agreement. |
| 20.1 | Sections 7.2, 10 and 11 shall survive the termination of this Agreement and shall continue in full force
and effect according to their terms. Counterparts and Delivery by Facsimile |
| 20.2 | This Agreement may be executed in any number of counterparts, each of which when executed and delivered
is an original but all of which taken together will constitute one and the same instrument. Any party hereto may deliver an executed copy
of this Agreement by facsimile |
IN WITNESS WHEREOF
the parties hereto have duly executed this Agreement as of the date first above written.
| SILVER BULL RESOURCES, INC. |
) |
|
| |
) |
c/s |
| Per: |
) |
|
| |
) |
|
| /s/ Xxxxxxxxxxx Xxxxxxxx |
) |
|
| Authorized Signatory |
) |
|
|
|
|
| XXXXXXX XXXXX |
) |
|
| |
) |
c/s |
| Per: |
) |
|
| |
) |
|
| /s/ Xxxxxxx Xxxxx |
) |
|
| Authorized Signatory |
) |
|
| |
|
|
SCHEDULE “A”
SERVICES
The Chief Executive Officer (the "CEO")
primary role is to take overall supervisory and managerial responsibility for the day to day operations of the Corporation's business.
Working closely with the President, the CEO will manage the Corporation in an effective, efficient and forward-looking way to fulfil the
priorities, goals and objectives determined by the Board. The CEO aims to execute the strategic plans, budgets and responsibilities set
out below, with a view to increasing shareholder value. The CEO reports to the Board.
Without limiting the foregoing, the CEO
is responsible for the following:
(a) Develop
and maintain the Corporation's goal to operate to the highest standards of the industry;
| (b) | Maintain and develop with the Board strategic plans for the Corporation and implement such plans to the
best abilities of the Corporation; |
| (c) | Provide quality leadership to the Corporation's staff and ensure that the Corporation's human resources
are managed properly; |
(d) Provide
high-level policy options, orientations and discussions for consideration by the Board;
| (e) | Together with any special committee appointed for such purpose, maintain existing and develop new strategic
alliances and consider possible merger or acquisition transactions with other mining companies which will be constructive for the Corporation's
business and will help enhance shareholder value; |
| (f) | Provide support, co-ordination and guidance to various responsible officers and managers of the Corporation; |
| (g) | Implement, oversee and guide the investor relations program for the Corporation, which shall, among other
things, ensure communications between the Corporation and major stakeholders, including and most importantly the Corporation's shareholders,
are managed in an optimum way and are done in accordance with applicable securities laws; |
| (h) | Provide timely strategic, operational and reporting information to the Board and implement its decisions
in accordance with good governance, with the Corporation's policies and procedures, and within budget; |
(i) Act
as an entrepreneur and innovator within the strategic goals of the Corporation;
(j) Co-ordinate
the preparation of an annual business plan or strategic plan;
(k) Ensure
appropriate governance skills development and resources are made available to the Board;
| (l) | Implement workplace policies and procedures that ensure compliance with the provisions of this Manual
by all the Corporation’s officers, directors, employees, customers and contractors; |
(l) Provide
a culture of high ethics throughout the organization;
| (m) | Take primary responsibility for
the administration of all of
the Corporation's subareas and administrative
practices. |
SCHEDULE “B”
DEFINITIONS
The following terms shall
have the following definitions:
| (a) | “Annual Fee” means equal to twelve (12) Monthly Fees
|
| (b) | “Total Annual Compensation” means an Annual amount that
is the combination of: |
| (i) | the Annual Fee as of the date the cessation of the Consultant’s engagement with the Corporation;
and |
| (ii) | an amount equal to the annual average of Bonuses actually paid to the Consultant by the Corporation during
the Consultant’s three (3) most recent years of engagement with the Corporation, or, if the Consultant has not been engaged for
three (3) years with the Corporation since the Effective Date, an amount equal to the greater of the following amounts: |
| (A) | the annual average of Bonuses, if any, actually paid to the Consultant by the Corporation since the Effective
Date; or |
(B) 50%
of the Annual Fee in effect at the time of the Consultant’s cessation of engagement with the Corporation.
| (c) | “Board” means the Board of Directors of the Corporation; |
| (d) | “Change of Control” means the occurrence of one or more
of the following events after the Effective Date of this Agreement: |
| (i) | a sale, lease or other disposition of all or substantially all of the assets
of the Corporation, |
| (ii) | a consolidation or merger of the Corporation with or into any other corporation
or other entity or person (or any other corporate reorganization) in which the shareholders of the Corporation immediately prior to such
consolidation, merger or reorganization, own less than fifty percent (50%) of the outstanding voting power of the surviving entity (or
its parent) following the consolidation, merger or reorganization; or |
| (iii) | a transaction or series or related transactions pursuant to which any person,
entity or group within the meaning of Section 13(d) or 14(d) of the U.S. Securities Exchange Act of 1934 (“1934 Act”),
or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Corporation
or an affiliate) acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act, or comparable successor
rule) of securities of the Corporation representing at least fifty percent (50%) of the combined voting power entitled to vote in the
election of directors; or |
| (iv) | a transaction or series of transactions pursuant to which (A) (i) any person,
entity or group within the meaning of Section 13(d) or 14(d) of the 1934 Act, or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Corporation or an affiliate) acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the 1934 Act, or comparable successor rule) of securities of the Corporation representing at least
twenty percent (20%) of the combined voting power entitled to vote in the election of directors or securities of the Corporation that,
upon conversion or exchange of such securities, would represent at least twenty percent (20%) of the combined voting power entitled to
vote in the election of directors, or (ii) a consolidation or merger of the Corporation with or into any other corporation or other entity
or person (or any other corporate reorganization) in which the shareholders of the Corporation immediately prior to such consolidation,
merger or reorganization, own less than eighty percent (80%) of the outstanding voting power of the surviving entity (or its parent) following
the consolidation, merger or reorganization and (B) in connection with or as a result of such transaction or series of transactions,
either (i) one-half (or more) of the members of the Board of Directors of the Corporation resign or are replaced with nominees designated
by such person, entity or group or (ii) the Chief Executive Officer of the Corporation resigns or is terminated as a result of such transaction
or series of transactions. |
| (e) | “Confidential Information” means all trade secrets, proprietary
information and other data or information (and any tangible evidence, record or representation thereof), whether prepared, conceived or
developed by an employee of the Corporation (including the Consultant) or received by the Corporation from an outside source which is
maintained in confidence by the Corporation or any of its employees, contractors or customers including, without limitation: |
| (i) | any ideas, drawings, maps, improvements, know-how, research, geological
records, drill logs, inventions, innovations, products, services, sales, scientific or other formulae, core samples, processes, methods,
machines, procedures, tests, treatments, developments, technical data, designs, devices, patterns, concepts, computer programs or software,
records, data, training or service manuals, plans for new or revised services or products or other plans, items or strategy methods on
compilation of information, or works in process, or any inventions or parts thereof, and any and all revisions and improvements relating
to any of the foregoing (in each case whether or not reduced to tangible form) that relate to the business or affairs of the Corporation
or that result from its marketing, research and/or development activities; |
| (ii) | any information relating to the relationship of the Corporation with any
personnel, suppliers, principals, investors, contacts or prospects of the Corporation and any information relating to the requirements,
specifications, proposals, orders, contracts or transactions of or with any such persons; |
| (iii) | any marketing material, plan or survey, business plan, opportunity or strategy,
development plan or specification or business proposal; |
| (iv) | financial information, including the Corporation’s costs, financing
or debt arrangements, income, profits, salaries or wages; and |
| (v) | any information relating to the present or proposed business of the Corporation. |
| (f) | “Fundamental Breach” means any material breach of a fundamental
term or condition of this Agreement and, without limiting the foregoing, includes any of the following acts or omissions: |
| (a) | the Consultant’s gross default or misconduct during the Consultant’s
engagement in connection with or effecting the business of the Corporation; |
| (b) | the Consultant’s continued refusal or willful misconduct to carry
out the duties of his employment after receiving written notice from the Corporation of the failure to do so and having had an opportunity
to correct same within a reasonable period of time from the date of receipt of such notice; |
| (c) | theft, fraud, dishonesty, misconduct, or misuse of alcohol or drugs of the
Consultant involving the property, business or affairs of the Corporation or in the carrying out of the duties of his employment; or |
| (d) | any material breach of this Agreement including any breach Sections 6,7
or 8 of this Agreement; |
| (g) | “Good Reason” means any of the following conduct by the
Corporation: |
| (i) | a unilateral reduction to the Annual Fee; |
| (ii) | a unilateral reduction to the aggregate value of the Consultant’s
remuneration and benefits other than Annual Fee; |
| (iii) | a unilateral material adverse change to the Consultant’s position,
title, authority or responsibilities; or |
| (iv) | any reason which would be considered to amount to constructive dismissal
pursuant to the common law. |
| (h) | “Person” means an individual, partnership, association,
Corporation, body corporate, trustee, executor, administrator, legal representative and any national, provincial, state or municipal government;
|
14
