THIS CONSULTING AGREEMENT made as of the 31st day of
January, 2007 BY AND BETWEEN
WOLVERINE
EXPLORATION INC., a Nevada, U.S.A. corporation, (hereinafter
called the “Master Corporation”) and
TEXADA CONSULTING
INC. , a British Columbia, Canada corporation, (hereinafter
called the “Consultant”)
RECITALS:
A.WHEREAS
the Master Corporation is a body corporate duly incorporated
pursuant to the laws of the State of Nevada, U.S.A., is
validly subsisting and in good standing in its constating
jurisdiction, and has an office at or near Vancouver, British
Columbia, Canada;
B.AND
WHEREAS Consultant has represented to the Master Corporation
that it is qualified to provide to the Master Corporation such
services as an independent contractor as are hereinafter set
forth;
C.AND
WHEREAS the Master Corporation wishes to obtain the services
of Consultant as an independent contractor for undertaking
mining exploration in Labrador and elsewhere in Canada for an
open-ended term as set out herein;
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the premises and subject to the terms and conditions herein
set out, the parties hereto covenant and agree as
follows:
ARTICLE I - CONTRACT FOR SERVICES:
CONSULTING,
MANAGEMENT AND LABOUR SUPPLY SERVICES
1.1The
Master Corporation hereby engages Consultant, and Consultant
hereby accepts the engagement, to provide for the Master
Corporation, or at its direction to other corporations or
entities in which it has a direct or indirect financial
interest (“Affiliate”), to the extent that the
Master Corporation reasonably and lawfully directs,
consulting, management and labour supply services in the
mining exploration industry in Canada (the
“Services”), including without limitation the
following for the Master Corporation or its
Affiliates:
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(a)Advise
and manage the overall business and organizational
policies;
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(b)Develop,
recommend and implement programs through subordinates;
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(c)Advise
and approves annual and long term company policies and
goals;
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(d)Advise
and manage company financial, organizational and operational
planning activities and growth of the Company, including serving as
banking signatories or mandatories;
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(e)Advise
and establish budgetary and operational objectives;
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(f)Monitoring
performance relative to established objectives and systematically
monitor and evaluate operating results;
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(g)Advise
and establish operating and capital expenditure budgets to go to
the Board of Directors for approval;
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(h)Advise
and formulate the strategic plans and submits them to the Board of
Directors for approval;
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(i)Advise
and direct consultants and others in matters concerning the
exploration, development, production, and promotion of the
business;
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(j)Promoting
positive relations with suppliers, customers, stakeholders and the
general public;
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(k)Advise
and establish fair and appropriate policies for labour supply and
human resources management; and
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(l)Respond
and report to the Board of Directors.
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1.2The
relationship between the Master Corporation and Consultant is
that of independent contractor.
1.3Such
Services shall be rendered by Consultant at locations
in
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(a)British
Columbia, Canada, and
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(b)elsewhere
in Canada, Nevada, U.S.A. or at such other locations as the Master
Corporation may reasonably require for itself or an Affiliate and
Consultant accept.
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1.4The
Consultant shall assign or designate at least one competent
employee or agent of the Consultant approved upon commencement
of this Agreement by the Master Corporation to fulfil the
obligations of the Consultant hereunder, which person shall be
herein called the “designated
person”. The Consultant hereby designates
Bruce E. Costerd as one of the persons to fulfil the terms of
this engagement and to provide the Services.
1.5Consultant
shall have reasonable discretion as to the manner in and the
time within which the Services are performed.
1.6Consultant
shall, during the term of this Agreement, provide the Services
on a commercially reasonable priority but non-exclusive basis
to the Master Corporation and in furtherance of the Master
Corporation's commercially reasonable best interests, or for
the Affiliate which the Master Corporation directs and the
Consultant accepts.
1.7Consultant
is at liberty to carry on for its own benefit such other
business, management or other engagements, even if in direct
or indirect competition to that of the Master Corporation or
its Affiliates.
1.8On
behalf of the Consultant, the designated person shall devote
his time and attention on a non-exclusive basis to the
provision of the Services to the Master Corporation during
regular business hours in reasonable priority to other
commercial obligations of the designated person on behalf of
the Consultant.
ARTICLE II - TERM
2.1The
Master Corporation hereby engages Consultant for the purposes
aforesaid commencing as of 1st day of February, 2007 and such
engagement shall continue until termination in accordance with
the provisions of this Agreement, subject to any early
termination only in any applicable circumstances set out
herein or any extension or commutation of this arrangement to
which the parties may agree.
2.2The
Agreement shall renew automatically on the same terms and
conditions, unless amended as herein provided, for successive
one (1) year periods after the expiry of the initial term,
unless terminated as herein provided.
ARTICLE III - STANDARD OF CONDUCT
3.1Consultant
agrees that it shall provide the Services in a manner which is
honest, orderly, competent and skillful, shall employ only
orderly, competent and skillful individuals with the necessary
qualifications, experience and ability to enable it to perform
the Services, shall use its commercially reasonable best
efforts to promote the interests of the Master Corporation and
shall act in accordance with the Master Corporation’s
direction respecting its reasonable and lawful policies and
procedures as may be in effect from time to time.
3.2Nothing
herein contained shall require the Consultant to do or refrain
from doing anything which constitutes conduct in contravention
of the provisions of any statute or regulation by which it is
bound or which would result in Consultant committing a breach
of any of the provisions of applicable statutes and
regulations.
3.3All
of the Services shall be provided only on a best efforts
basis.
ARTICLE IV - OFFICE SPACE
4.1Master
Corporation shall provide or pay for non-exclusive office
space with parking (the “Resources”) to Consultant
for use by its employees in providing the Services, including
necessary office space and secretarial and support
staff.
4.2Consultant
will not use any of the Resources provided by Master
Corporation for other than the performance of the Services
unless Consultant has agreed to pay reasonable rates or rents
therefor.
4.3Consultant
shall otherwise provide all staff or necessary supplies and
equipment to Master Corporation at the cost of Master
Corporation.
ARTICLE V - CONSULTANT FEES
5.1For
the provision by Consultant of the Services, Master
Corporation shall pay a fixed monthly base fee to Consultant
as set out below, which fee shall become due and payable on
the last day of each and every month of the Term.
5.2Such
base fee shall be for provision of the Services only and not
in lieu of any finders fees, commissions or professional
fees.
5.3Upon
the last day of each month during the term commencing with
February 28, 2007 (for the month of February 2007) and ending
with July 31, 2007, and upon the first day of each month
during the term commencing with August 1, 2007 (for the month
of August 2007), the Master Corporation shall pay to
Consultant, NET OF ANY WITHHOLDING, DEDUCTION, RESERVATION OR
OFFSET:
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(a)based
on ONE HUNDRED TWENTY THOUSAND (USD$120,000) US DOLLARS per annum,
a fixed monthly base fee of TEN THOUSAND (USD$10,000) US
DOLLARS per month, which fee shall become due and payable on the
last day of each month, and shall pay such amount without
deduction, setoff, reservation or withholding,
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(b)the
accountable advances of CAD$10,000 in total: January 31, CAD$3,000,
February 20, CAD$5,000 and March 2, 2007 CAD$2,000,
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(c)approved
reasonable expense claims submitted in the month, and
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(d)any
applicable taxes, rates or duties which Consultant is obliged to
charge from time to time.
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5.4Interest
on unpaid accounts for fees and expenses shall be charged at
the annual rate of 12 per cent or such other rate as is
mutually agreed upon from time to time. In lieu of
monthly payments, at the request of the Master Corporation and
with the consent of the Consultant, such payments may be made
in advance.
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(a)a
fixed amount for principals of the Manager as agreed from time to
time;
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(b)115%
of labour supply; and
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(c)115%
of approved space and supplies and equipment charges, excluding
furniture and equipment provided under separate lease and set out
on separate schedules therefor.
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5.5Subject
to the other provisions of this Agreement, on each successive
anniversary of this Agreement, the parties shall fix the
annual contract fees for the next ensuing year of this
Agreement, having regard to the Master Corporation's financial
position and current market conditions for like positions with
the intention of increasing the base fee in recognition of
performance in achieving business objectives and market
comparable rates for like positions.
5.6The
Consultant may receive annual or other bonuses based on
performance criteria or other criteria, to be determined and
paid by the Corporation in its sole and unfettered
discretion.
ARTICLE VI - INCENTIVE OR BONUS FOR COMMERCIAL MINE
6.1Consultant
shall receive a bonus (the “Bonus”) of the
issuance of 5% of the Common Shares of the Master Corporation
issued and outstanding on a non-diluted basis as of the date
of the payment of the bonus upon and only in the event of the
discovery by the Corporation of a major mineral resource
deposit in any of the properties currently held or
acquired in the future that is of a sufficient size and value
to support the commercial extraction and shipment of ore for
the purpose of earning revenue (but excluding the extraction
and shipment of ore for testing purposes). This
provision does not apply to properties acquired in the future
and which have been identified, acquired, explored and
commercialized without any involvement on the part of the
Consultant or its servants or agents in any of those
steps
6.2The
determination of whether the threshold for the Bonus as set
out in this Article has been met will be by mutual agreement
between the parties, failing which the Dispute Resolution
Provisions shall apply.
6.3This
provision shall survive the termination of this
Agreement.
6.4The
Parties acknowledge and agree that the Bonus is subject to
receiving all necessary regulatory approvals for the issuance
of the stock.
ARTICLE VII - CONSULTANT BENEFITS
7.1Consultant
shall be designated as an affiliate of the Master Corporation
by way of endorsement or otherwise under any insurance plan or
other benefit plan such that employees of Consultant and her
or his family members shall be covered by the plan at the
expense of the Master Corporation.
ARTICLE VIII - EXPENSES
8.1Master
Corporation will fully reimburse Manager for all reasonable
expenses incurred by Manager which are necessary or incidental
to the discharge of the Services or have been made as agent
for and on behalf of Master Corporation, excluding any
expenses by Manager for costs reasonably allocated to Master
Corporation in relation to providing the
Services.
8.2Master
Corporation shall pay Consultant for expenses incurred
by Consultant in relation to the services of senior
representatives of Consultant and the cost of additional staff
to provide the Services shall increase the monthly fee as set
out above or shall be included in the base management fee by
an amount to be agreed upon by the Parties.
8.3For
greater certainty, Master Corporation shall pay directly those
specified costs agreed upon by the Parties hereto from time to
time, particularly in relation to the costs of
telecommunications, office, vehicle, business travel and
related expenses for Consultants’ employees who are
providing services to Master Corporation.
8.4Consultant
agrees to keep an accurate record of disbursements spent on
the matters and affairs of the Master Corporation and it shall
submit such reports or expense claims to the Master
Corporation as it may direct or require at the times and in
the manner prescribed by the Master Corporation from time to
time.
8.5The
Master Corporation shall reimburse Consultant for all expenses
reasonably incurred with respect to the provision of the
Services as set forth in this Agreement. Such
expenses may include the following:
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(a)Operating
Expenses, including telecommunications, office and
vehicle,
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(b)Expenses
for development of the business of the Master
Corporation;
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and
Consultant shall submit supporting vouchers as evidence of
such expenses.
8.6.The
Master Corporation agrees to pay all fees and do all such
things as may be required for it to obtain and maintain such
licences or permits, if any, as are necessary to carry on
business in the Province of Newfoundland and Labrador or
elsewhere in Canada and the U.S.A.
8.7Master
Corporation shall arrange Worker’s Compensation coverage
to the extent necessary for Consultant (as an affiliate or
otherwise) and designated persons performing this Agreement
within the Province of Newfoundland and Labrador (or wherever
work is to be performed), at Master Corporation’s cost
or reimbursement to Consultant of such costs.
ARTICLE IX - CONFIDENTIALITY
9.1
Wolverine
Proprietary & Confidential Information includes all
information belonging to Wolverine, including, without
limitation:
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1.All
information relating to Wolverine, whether disclosed or received by
conversation, written or document form, object or sample form, or
by observation and inspection, and whether or not such information
is expressly marked as "confidential", and regardless of the form
or medium in which such information is contained;
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2.All
information relating to resource property and mineral exploration
in Labrador, Canada, or anywhere in the world, by Wolverine,
including without limitation mineral locations and finds, ground
and aerial exploration results, drill results, assays,
topographical information, ore body delineations, exploration
programs, subsequent expansion, exploration, developments and
improvements thereof; and the mineral exploration business and
expansion plans, opportunities and methods of Wolverine for all
purposes whatever;
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3.Any
development, improvement, enhancement or combination of any
resource property, mineral exploration, or intellectual property
which in any way relates to the business of Wolverine or may
constitute a future business opportunity of Wolverine made or
discovered by Receiving Party in whole or in part during the
applicability of this Confidentiality Agreement;
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4.All
project costing, supplier arrangements, alliances, business plans,
budgets, unpublished financial statements, licences, prices and
costs, suppliers and customers, business advisors, business
counsel, business partners, business agents and business contacts
financial and fiscal information related thereto or to the
business, holdings and structure of Wolverine;
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5.Any
trade secret or other secret including, but not limited to all
customer and prospect lists, shareholder lists, patents, patent
applications pending, technical information, raw material data,
product specifications, processes and designs, operating and
production data, marketing strategies and data, calculations,
instructions, manuals, techniques and know-how, and
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6.All
information and know-how used by Wolverine which is being, has been
or may be used in or developed for use in its business carried on
by Wolverine now or hereafter or which arises in connection with a
business opportunity of Wolverine, including resource property,
mineral exploration, mining and extraction, financial or marketing
information and customer or contact lists or shareholder lists of
whatever nature in whatever form.
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For
greater certainty, Wolverine Proprietary & Confidential
Information does not include:
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7.information
that the recipient can show by written evidence was in the public
domain at the date hereof otherwise then through an act or omission
of the recipient; or
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8.information
that the recipient can show by written evidence has entered the
public domain after the date hereof otherwise then through an act
or omission of the recipient.
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9.2Wolverine
Proprietary & Confidential Information shall not be
excluded by virtue of the foregoing merely because individual
elements of the Confidential Information are within the above
noted exceptions;
9.3The
Consultant hereby undertakes and agrees:
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(a)not
to use the Wolverine Proprietary & Confidential Information for
any purpose other than the performance of its obligations
hereunder;
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(b)not
to disclose the Wolverine Proprietary & Confidential
Information to any Party, except as may be necessary or incidental
to the performance of its obligations hereunder;
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(c)to
hold the Wolverine Proprietary & Confidential Information in
trust for the Master Corporation and to keep the Wolverine
Proprietary & Confidential Information in absolute and
strictest confidence; and
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(d)to
protect the Wolverine Proprietary & Confidential Information
from inadvertent or unauthorized disclosure, access or
use.
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9.4The
provisions of this Article shall survive termination of this
Agreement.
ARTICLE X - ASSIGNMENT
10.1Master
Corporation is not entitled to assign or transfer the whole or
any part of this Agreement, without the written consent of the
Consultant.
10.2Consultant
may subcontract all or any portion of the Services without the
consent of Master Corporation.
ARTICLE XI - TERMINATION
Termination By Agreement
11.1The
parties may by mutual consent terminate this Agreement at any
time for any reason.
No Termination Until After Minimum Term
11.2The
Master Corporation hereby covenants and agrees that it shall
not terminate this Agreement prior to February 28, 2010 for
any reason whatever.
11.3If
the Master Corporation purports to do so it shall forthwith
pay for such termination (exclusive of and always subject to
the survival of the grant of stock options and warrants to the
Consultant and its representatives and the Bonus) as
liquidated damages and not as a penalty the aggregate of all
amounts, which are hereby accelerated as immediately due and
payable, hereunder for the period to and including February
28, 2010 or such later date as the parties may have agreed to
extend the minimum term of this Agreement. All
stock which is the subject matter of options granted or to be
granted shall be issued to the Consultant or to its
representatives according to their respective interests, as
fully paid and non-assessable without further cost to them,
and where the stock is not, for whatever reason, not able to
be issued forthwith, then the Master Corporation shall hold
same or an equivalent value in cash or other assets in trust
for the sole use and benefit of the Consultant or its
representatives, and a security interest is hereby granted in
all assets of the Master Corporation and its Affiliates for
the due payment hereof.
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11.4At
the option of the Master Corporation, after February 28, 2010, and
not before, the Master Corporation, subject to the grant of stock
options and warrants to the Consultant and its representatives and
the Bonus, has the option to terminate this Agreement and the
Consultant shall be entitled to the sum of $180,000 as liquidated
damages but no further payment in respect of termination or
otherwise and all obligations of the Master Corporation shall then
cease and terminate.
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Automatic Termination by Master Corporation Without
Notice
11.5The
Maste
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