INDEPENDENT CONTRACTOR AGREEMENT
THIS
INDEPENDENT CONTRACTOR AGREEMENT (the “Agreement”) is
made
as
of the
1st
day of
November, 2005.
BETWEEN:
ACCESS
ENERGY INC..
(the
“Company”)
-
and
-
CONISTON
INVESTMENT CORP.
(the
“Contractor”)
(collectively
referred to as the “Parties”)
RECITALS:
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A.
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The
Company is engaged in the business of hydrocarbon exploration, development
and production.
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B.
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Xx.
Xxxx Xxxxxxxxx (“Xxxxxxxxx”) has been elected a director of the Company;
and
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C.
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The
Company has agreed to retain the services of the
Contractor.
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THEREFORE,
the
Parties agree as follows:
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1.
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TERM
OF AGREEMENT
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1.1 The
term
of this Agreement shall be for the period (the “Term”) commencing on November 1,
2005 and terminating on October
31,
2006
(the
“Agreement Expiry Date”), unless extended further or terminated earlier, all in
accordance with the provisions contained herein.
1.2 Unless
either Party not less than 60 days prior to the Agreement Expiry Date then
in
effect hereunder, gives notice to the other Party that this Agreement will
not
be renewed, the Agreement Expiry Date will be amended to the next anniversary
date of the Agreement Expiry Date and the Agreement will continue,
unamended.
1.3 Notwithstanding
the foregoing, the Term may expire before an Agreement Expiry Date in the event
that: (a) Xxxxxxxxx in performing the Services either by omission or commission,
engages in conduct which would entitle the Company to terminate him for cause;
(b) Xxxxxxxxx is no longer employed by the Contractor; or (c) following a Change
of Control as set forth in section 7 of this Agreement.
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2.
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SERVICES
TO BE PROVIDED
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The
Company hereby retains the Contractor for the purposes of providing only such
services as the Parties may agree from time to time during the Term (the
“Services”). For more particularity, the Services will include, but not be
limited to the following:
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(a)
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consulting
and advisory services provided by the Contractor on matters with
respect
to the acquisition, exploration, development and production of
hydrocarbons in western Canada and the western United States, and
in
particular Saskatchewan;
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(b)
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assisting
the Company in negotiation of a joint venture agreement between indigenous
aboriginal peoples (“Aboriginal People”) and the Company;
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(c)
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establishing
and maintaining a working relationship between the Aboriginal Peoples
and
the Company;
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(d)
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assisting
the Company in the formation of a team of technical experts for assessment
of the potential for development on the lands of the Aboriginal Peoples
including, drilling, seismic and data analysis;
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(e)
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assisting
the Aboriginal Peoples on a “as required basis” in matters between the
Aboriginal Peoples and both provincial and federal and state authorities
as they relate to the interests of Company;
and
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(d)
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the
Contractor may be requested to undertake such other related assignments
as
the Company may from time to time request.
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The
Contractor agrees that it will retain Xxxxxxxxx and cause Xxxxxxxxx to devote
his principal time and attention to providing the Services but there shall
be no
set hours of work to provide the Services. The Contractor may, however; retain
from time to time such personnel as it deems appropriate in order to provide
the
Services.
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3.
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FEES
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3.1
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In
consideration of the Services provided, the Company shall pay to
the
Contractor a fee of: (i) $260,000.00
per annum (the “Fee”) plus applicable Goods and Services Tax (“GST”)
payable monthly; (ii) $1,000,000.00 (the “Dene Fee”) in the event the
Company enters into an agreement with the Buffalo River Dene Nation
and/or
its associates or affiliates to develop hydrocarbon opportunities
in a
defined area within Treaty 10 lands which includes the traditional
and
historically occupied and used lands of the Buffalo River Dene Nation
(the
“Dene”); and (iii) the Contractor will also be entitled to receive a 1.25%
non-convertible overriding royalty based on 100% production (“XXXX”) from
any and all projects that Contractor bring to the Company (the “Royalty
Fee”). The Royalty Fee is governed by Article 3 of the “Farmout &
Royalty Procedure”, as such term is defined by the 1997 Canadian
Association of Petroleum Xxxxxxx Farmount & Royalty Procedure” (the
“LFRP Procedure”).
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3.2
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If
the interest of any party in the projects brought to the attention
of the
Company (the “Project Lands”) by the Contractor is now or hereafter shall
become encumbered by any royalty, overriding royalty, production
payment
or other charge of a similar nature (the “Encumbrance”), other than the
“Lessor’s Royalty” as such term is defined in the LFRP Procedure, such
Encumbrance shall be charged to and paid entirely by the party whose
interest is or becomes thus encumbered. No party which acquires an
interest in the Project Lands shall by virtue of any provision of
this
agreement (excepting the operation of Clause 2401B of the LFRP Procedure,
if applicable) ever be required to assume any part of such encumbrance
and
the Party whose interest has become encumbered shall be at all times
indemnify and hold the other party harmless from such
encumbrance.
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3.3
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If
requested by the Company, payments will be made immediately upon
receipt
by the Company of a monthly invoice prepared by the Contractor, but
if not
requested in no case later than ten days following the end of a month
in
which Services are provided. The Contractor agrees to reference the
applicable GST registration number on all such invoices. The Parties
agree
that the Fee will be reviewed from time to time, with any mutually
agreed
changes to the Fee to be documented as amendments to this
Agreement.
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4.
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INDEPENDENT
CONTRACTOR
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The
Contractor is and shall remain at all times an independent contractor and has
sole responsibility to comply with all laws, rules and regulations relating
to
the provision of Services, including without limitation, the Income
Tax Act
(Canada), the Employment
Insurance Act
(Canada), the Employer
Health Tax Act
(Ontario), and the Canada
Pension Plan Act.
As an
independent contractor, the Contractor shall be responsible for any employment
related benefits it may wish to secure for its employees, including without
limitation, any payments under the Employment
Standards Act
(Ontario).
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5.
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REGISTRATION
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The
Contractor shall obtain a GST registration number and shall be responsible
for
remitting GST to the applicable regulatory authorities in accordance with the
Excise
Tax Act (Canada).
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6.
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CONFIDENTIAL
INFORMATION
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6.1 The
Contractor’s retainer with the Company will provide the Contractor with access
to certain information relating to the Company, its customers, suppliers,
distributors, employees, and its affiliates, subsidiaries and related companies
of an extremely confidential nature (the “Confidential
Information”). The
Contractor agrees not to disclose any Confidential Information without the
prior
written consent of the Company or to make use of such information for the
Contractor’s benefit, or for the benefit of any other person, firm, corporation
or entity.
6.2 Prior
to
any unauthorized use or disclosure which is required by law, the Contractor
shall give the Company reasonable prior notice of any disclosure of confidential
information required by law, and, if requested by the Corporation, shall use
reasonable efforts to obtain, or assist the Company in attempting to obtain,
a
protective order or similar protection for the Company and shall permit and
cooperate with any effort by the Company to obtain such an order. The Company
shall reimburse the Contractor for all reasonable costs incurred by him in
seeking or assisting the Company in seeking such an order.
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7.
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NON
COMPETITION / NON
SOLICITATION
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7.1 The
Contractor hereby agrees that, for the length of time of the Agreement, the
Contractor shall not, without prior written consent of the Company, (i) in
any
manner directly or indirectly, individually, or on behalf of any other person,
engage in, have an interest in, or become associated with any business or
enterprise engaged in a business substantially similar to and likely to be
competitive with that of the business of the Company, doing business in North
America, or anywhere else the Company on carries on the business; (ii)
directly or indirectly, individually, or on behalf of any person, hire, solicit,
aid, encourage or invite any employees to leave the Company, or any of its
affiliates in order to accept employment with or render services for the
Contractor, such person or any of their respective affiliates; or (iii) directly
or indirectly, individually, or on behalf of any person, solicit, aid, encourage
or invite any customer, client, vendor, lender, or supplier of the Company
or
any of its affiliates, or similar persons engaged in business with the Company
or any of its affiliates, to discontinue the relationship or reduce the amount
of business done with the Company or its affiliates.
7.2 For
purposes of Section 7.1 above, the term "indirectly" shall include any provision
of service, aid, advice or financial assistance to any such competing person,
or
any investment in or loan to any such competing person, or any support,
assistance, promotion or work for any such competing person as consultant,
co-venturer, agent, partner, shareholder (other than as a holder of less than
five percent (5%) of the shares of a publicly-traded corporation) or
otherwise.
7.2 The
Contractor acknowledges and agrees that irreparable injury may result to the
Company in the event of any breach of any covenant referred to in Section 7,
and
further agrees that the remedy at law for the breach of any such covenant will
be inadequate. Therefore, the Contractor agrees that, if any such person shall
engage in any act in violation of Section 7, the Contractor shall be entitled,
in addition to any other remedies and damages as may be available to it at
law,
to injunctive relief to enforce Section 7.1.
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8.
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CHANGE
IN CONTROL
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8.1 “Change
in Control” shall be deemed to have occurred if, for any reason, on or after the
date hereof: (i) there shall occur a sale, transfer or other disposition of
all
or substantially all of the property or assets of the Company other than to
an
affiliate (as that term is defined in the Securities
Act
(Ontario); or (ii) there shall occur any change in the holding, direct or
indirect, of securities of the Company or any voting rights attached to any
securities of the Company, as a result of which any person (as defined in the
Securities
Act
(Ontario)), or a group of persons acting jointly or in concert, or person
associated or affiliated with any such person or group within the meaning of
the
Securities
Act
(Ontario) would be entitled to cast more than 50% of the votes attached to
all
securities of the Company that may be cast to elect Directors of the Company
or
the votes carried by such securities are entitled, if exercised, to elect a
majority of the Board of Directors of the Company.
8.2 Unless
the Contractor has consented in writing in advance to a proposed Change in
Control, in the event that a Change in Control occurs during the Term, the
Contractor will be paid a lump sum equivalent to the Fee (and applicable GST)
effective the date on which the Change in Control occurs, and this Agreement
shall terminate on the date of such payment.
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9.
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SEVERABILITY
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Any
provisions of this Agreement found to be void or unenforceable are separate
and
distinct, and the remaining provisions shall remain in full force and
effect.
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10.
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SUCCESSORS
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This
Agreement shall be binding upon any successor (whether direct or indirect,
by
purchase, merger, amalgamation, business reorganization or otherwise) to all
or
substantially all of the business and/or assets of the Company.
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11.
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GOVERNING
LAW
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This
Agreement shall be interpreted and construed in accordance with the laws of
the
province of Ontario and the laws of Canada applicable therein.
IN
WITNESS OF WHICH
the
Parties have duly executed this Agreement:
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ACCESS
ENERGY INC.
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| By: |
/s/
H. Xxxxxxxx X. Xxxxxx
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H.
Xxxxxxxx X. Xxxxxx
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| By: |
/s/
Xxxx Xxxxxxxxx
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Xxxx
Xxxxxxxxx
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CONISTON
INVESTMENT CORP.
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| By: |
/s/
Xxxx Xxxxxxxxx
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