EXHIBIT 4.08
CONSULTANT RETAINER AGREEMENT
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THIS AGREEMENT dated as of and effective on the 31st day of December, 2002;
BETWEEN:
ARCHANGEL DIAMOND CORPORATION, a Corporation continued under the
laws of the Yukon Territories, Canada;
(the "Corporation")
AND:
XXXXXXX X. XXXXXX, of the City of Denver in the State of
Colorado, U.S.A.;
(the "Consultant")
WITNESSES THAT WHEREAS:
A. The Corporation is an international diamond exploration company holding
certain joint exploration and participation rights with respect to the mining of
diamonds from the 400 square kilometer Verkhotina Area in the Oblast of
Arkhangel'sk in northwestern Russia;
B. The Consultant is willing and capable of providing on a "best efforts" basis
various management consulting services with respect to Corporation's diamond
interests;
C. The Corporation desires to retain the Consultant as an independent consultant
and the Consultant desires to be retained in that capacity upon the terms and
conditions hereinafter set forth;
NOW THEREFORE in consideration of the mutual covenants and agreements contained
herein and for good and valuable consideration (the receipt and sufficiency of
which is hereby acknowledged by each of the parties) the parties hereto covenant
and agree each with the others as follows:
1. DUTIES OF THE CONSULTANT
1. 1. Subject to the terms and conditions hereof, the Corporation hereby retains
the Consultant as an independent consultant and the Consultant hereby accepts
and agrees to such retainer. The Consultant shall render consulting services
outside of the United States of America with respect to the strategic
management, planning and budgeting with respect to the Corporation's diamond
exploration interests to the Corporation, together with such other services as
may, from time to time, be mutually agreed to by the Consultant and the
Corporation during the term of this Agreement (the "Services").
1.2. The Consultant agrees that he shall, during the continuance of this
Agreement, provide the Services personally and in that respect apply his
reasonable time and attention to the business of the Corporation, and to any
subsidiary of the Corporation, for the performance of the Services faithfully,
diligently, to the best of his abilities and in the best interests of the
Corporation. The time of service to be provided hereunder by the Consultant
shall be as agreed to from time to time by the Corporation and the Consultant.
1.3. The Corporation acknowledges that the Consultant currently serves and may,
from time to time, serve as a director or officer of entities which do not
conflict with duties under this Agreement.
1.4. The term "subsidiary" as used herein means any company or companies of
which more than fifty per cent of the outstanding shares carrying votes at all
times (provided that the ownership of such shares confers the right at all times
to elect at least a majority of the Board of Directors of such company or
companies) are beneficially owned by or held for the Corporation and/or any
other company in like relation to the Corporation and include any company in
like relation to the subsidiary.
2. TERM
2.1. The appointment shall commence with effect from December 31, 2002 (the
"Effective Date") and shall continue for an initial period of Three (3) years
from the Effective Date unless earlier terminated in accordance with the
provisions of this Agreement (the "Initial Term"). If agreed by the parties, the
appointment will continue, starting January 1, 2006 on a 1 year annual basis
until terminated prior to the end of such year in accordance with the provisions
of this Agreement.
3. COMPENSATION
3.1. The Corporation agrees to pay a fee for Services to the Consultant at the
rate of US$250,000 per annum, payable to the Consultant in equal monthly
installments within Thirty (30) days following the submission by the Consultant
of monthly invoices for Services rendered by the Consultant.
3.2. The Corporation agrees to pay to the Consultant if applicable, at the same
times and in the same manner as provided for in the Excise Tax Act (Canada) all
Goods and Services Tax ("GST") payable in respect of the Services provided
hereunder, including without limitation, such taxes calculated on or in respect
of amounts payable by the Corporation under this Agreement. It is anticipated
that the majority of the consulting will be performed outside of the United
States of America.
3.3. It is understood and agreed that the Consultant may incur reasonable
expenses in connection with his duties under this Agreement. The Corporation
will reimburse the Consultant for any such expenses, including business class
travel expenses, provided that the Consultant provides to the Corporation an
itemized written account and receipts acceptable to the Corporation within sixty
days after they have been incurred. The Consultant will not be reimbursed for
any item in excess of US$10,000 unless approved in advance in writing by the
President, Chief Executive Officer or Chief Financial Officer, as the case may
be, of the Corporation.
3.4. Subject to the policies of the TSX Venture Exchange and any applicable
securities laws, the Consultant may in the sole discretion of the board of
directors be granted incentive stock options to acquire common shares in the
capital of the Corporation pursuant to the Corporation's then applicable stock
or equity compensation plan provided, however, that the Consultant shall enter
into an agreement with respect to the granting of the above stock options in the
form provided by the Corporation which complies with the terms of such plan and
the policies of the TSX Venture Exchange.
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3.5. The parties hereto understand and agree that any and all deductions,
assessments and remittances required as a result of the compensation payable to
the Consultant pursuant to this Consulting Agreement shall be and remain the
sole responsibility of the Consultant.
4. COVENANTS OF THE CONSULTANT
4.1. The Consultant shall be responsible for obtaining all necessary licenses
and permits and for complying with any applicable federal, state, provincial and
municipal laws, codes and regulations in connection with the provision of the
Services hereunder and the Consultant shall when requested provide the
Corporation with adequate evidence of his compliance with this Section 4. 1.
4.2. The Consultant shall comply, while on the premises used by the Corporation,
with all the rules and regulations of the Corporation from time to time in force
which are brought to his notice or of which he could reasonably be aware.
4.3. The Consultant acknowledges that as the result of entering into this
Agreement he will be a "person in a special relationships, as that expression is
defined in the securities laws of various provinces of Canada, with the
Corporation, and that as such he may receive information concerning material
changes in or material facts concerning the business and affairs of the
Corporation that has not been generally disclosed, and it covenants and agrees
that he will not purchase or sell any securities of the Corporation until such
information has been generally disclosed.
5. AUTHORITY
5.1. It is understood and acknowledged by the parties that the Consultant is,
being retained by the Corporation as an independent contractor and that the
Consultant shall have no authority to enter into any agreement or incur any
obligation on behalf of the Corporation, except with the prior written consent
of the President, Chief Executive Officer or Chief Financial Officer, as the
case may be, of the Corporation.
6. CONFIDENTIAL INFORMATION
6.1. The Consultant acknowledges that he will, in providing the Services,
acquire information about certain matters and things which are confidential to
the Corporation, and which information is the exclusive property of the
Corporation, including, without limitation, the following:
(a) exploration and/or development plans;
(b) assay results, geological data and/or feasibility reports;
(e) financing arrangements and/or joint venture agreements; and
(d) other confidential information concerning the business operations or
financing of the Corporation.
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6.2. The Consultant acknowledges the information as referred to in paragraph 6.1
could be used to the detriment of the Corporation. Accordingly, the Consultant
undertakes not to disclose same to any third party either during the term of the
Consultant's retainer except as may be necessary in the proper discharge of his
retainer under this Agreement, or after the term of his retainer, however
caused, except with the written permission of the President, Chief Executive
Officer or Chief Financial Officer, as the case may be, of the Corporation. The
Consultant also agrees that the unauthorized disclosure of any such information
during the life of this Agreement shall constitute a failure to comply with this
Agreement for the purposes of Section 7 of this Agreement.
6.3. The Consultant acknowledges that in addition to any and all rights of the
Corporation, the Corporation shall be entitled to injunctive relief in order to
protect the Corporation's rights and property as set out in Sections 6.1 and 6.2
of this Section.
6.4. The Consultant understands and agrees that the Corporation has a material
interest in preserving the relationship it has developed with its joint venture
partners against impairment by competitive activities of a former employee.
Accordingly, the Consultant agrees that the restrictions and covenants contained
in this Section 6 and the Consultant's agreement to them by his execution of
this Agreement, are of the essence to this Agreement and constitute a material
inducement to the Corporation to enter into this Agreement and to employ the
Consultant, and that the Corporation would not enter into this Agreement absent
such an inducement. Furthermore, the existence of any claim or cause of action
by the Consultant against the Corporation whether predicated on this Agreement
or otherwise, shall not constitute a defence to the enforcement by the
Corporation of the covenants or restrictions provided in this Section 6,
provided, however, that if any provision shall be held to be illegal, invalid or
unenforceable in any jurisdiction, the decision shall not affect any other
covenant or provision of this Agreement or the application of any other covenant
or provision.
7. TERMINATION
7.1. The Corporation or the Consultant may terminate this Agreement at any time
in the event of the failure of the other party to comply with any of the
material provisions hereunder upon such other party being notified in writing by
the party alleging such failure and failing to remedy such failure within thirty
(30) days of receiving such notice in which case the Consultant shall only be
paid fees for Services up to the end of such thirty (30) days.
7.2. The Consultant may, at any time, terminate this Agreement upon the giving
of sixty (60) days written notice to the Corporation in which case the
Consultant shall only be paid fees for Services up to the end of such sixty (60)
days. The Corporation may terminate this Agreement immediately upon paying to
the Consultant a lump sum payment representing that aggregate fees for Service
payable for the balance of the Initial Term or the 1 year renewal term, as the
case may be, of this Agreement, plus GST or similar taxes related thereto as
applicable.
7.3. This Agreement shall be terminated upon the death of the Consultant.
7.4. Notwithstanding any termination of this Agreement for any reason whatsoever
and with or without cause, the provisions of Sections 4.3, 6, 8 and 9 any other
provisions of this Agreement necessary to give efficacy thereto shall continue
in full force and effect following any such termination.
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8. CORPORATION'S PROPERTY
8.1. The Consultant acknowledges that all items of any and every nature or kind
created or used by the Consultant pursuant to the Consultant's retainer under
this Agreement, or furnished by the Corporation to the Consultant including,
without limitation, all equipment, automobiles credit cards, books, records,
reports, files, diskettes, manuals, literature, confidential information or
other materials shall remain and be considered the exclusive property of the
Corporation at all times and shall be surrendered to the Corporation, in good
condition, promptly at the request of the Corporation, or in the absence of a
request, on the termination of the Consultant's retainer with the Corporation.
9. NOTICES
9.1. Any notice, waiver, direction or other instrument or communication required
or permitted to be given to any of the parties hereunder shall be in writing and
may be given by facsimile transmission or by delivering the same:
(a) In the case of the Corporation, to:
Archangel Diamond Corporation
X/X 000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxxx
XXX 0X0
Fax: (000) 000-0000
Attention: President and CEO
(b) In the case of the Consultant, to:
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx
00000
Fax: (303) 744 - 8935
Attention: Xx. Xxxxxxx Xxxxxx
9.2. Any notice, waiver, direction or other instrument or communication if
delivered shall be deemed to have been validly and effectively given on the date
on which it was delivered and, if sent by facsimile transmission, shall be
deemed to have been validly and effectively given on the next Business Day
following the day on which it was sent; provided that, if the day of delivery is
not a Business Day, such notice, waiver, direction or other instrument or
communication shall be deemed to have been given and received on the next
Business Day following such date. For the purposes of this Agreement "Business
Day" means any day other than a day which is a Saturday, a Sunday or a statutory
holiday in Xxxxxxx, Xxxxxxx, Xxxxxx.
9.3. The Corporation and the Consultant may change its address for notices or
service from time to time by notice given in accordance with the foregoing.
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10. INTERPRETATION AND GENERAL PROVISIONS
10.1. Sections and Headings. The division of this Agreement into Articles and
Sections and the insertion of headings are for the convenience of reference only
and shall not affect the construction or interpretation of this Agreement. The
terms "this Agreement", "hereof", "hereunder" and similar expressions refer to
this Agreement and not to any particular Article, Section or other portion
hereof and include any agreement or instrument supplemental or ancillary hereto.
Unless something in the subject matter or context is inconsistent therewith,
references herein to sections and paragraphs are to sections and paragraphs of
this Agreement.
10.2. Number. In this Agreement words importing the singular number only shall
include the plural and vice versa and words importing the masculine gender shall
include the feminine and neuter genders and vice versa and words importing
persons shall include individuals, partnerships, associations, trusts,
unincorporated organizations and Corporations and vice versa.
10.3. Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the retainer of the Consultant from and after the
Effective Date and any and all previous agreements, written or oral, express or
implied, between the parties or on their behalf, relating to any employment or
retainer of the Consultant by the Corporation are terminated and cancelled and
each of the parties releases and forever discharges the other of and from all
manner of actions, causes of action, claims and demands whatsoever, under or in
respect of any such agreement.
10.4. Remedies Cumulative. The rights and remedies of the parties under this
Agreement are cumulative and in addition to and not in substitution for any
rights or remedies provided by law. Any single or partial exercise by any party
hereto of any right or remedy for default or breach of any term, covenant or
condition of this Agreement does not waive, alter, affect or prejudice any other
right or remedy to which such party may be lawfully entitled for the same
default or breach.
10.5. Waiver. The failure of a party in any one or more instances to insist upon
strict performance of any of the terms of this Agreement or to exercise any
right or privilege arising under it shall not preclude it from requiring by
reasonable notice that any other party duly perform its obligations or preclude
it from exercising such a right or privilege under reasonable circumstances, nor
shall waiver in any one instance of a breach be construed as an amendment of
this Agreement or waiver of any later breach.
10.6. Assignment. The rights which accrue to the Corporation under this
Agreement shall pass to its successors or assigns. The rights of the Consultant
under this Agreement are not assignable or transferable in any manner.
10.7. Further Assurances. The Consultant shall from time to time at the request
of the Corporation and without further consideration, execute and deliver all
such other additional assignments, transfers, instruments, notices, releases and
other documents and shall do all such other acts and things as may be necessary
or desirable to assure more fully the effect of the retainer for the Services
contemplated hereby.
10.8. Time. Time shall be of the essence of this Agreement.
10.9. Amendment. This Agreement may be amended or varied only by agreement in
writing signed by each of the parties. Unless the context otherwise so requires,
a reference to this Agreement shall include a reference to this Agreement as
amended or varied from time to time.
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10.10. Severability. If any provision of this Agreement is determined to be
invalid or unenforceable in whole or in part, such invalidity or
unenforceability shall attach only to such provision or part thereof and the
remaining part of such provision and all other provisions hereof shall continue
in full force and effect.
10.11. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws from time to time in force in the Province of Ontario
and the laws of Canada applicable herein, and each of the parties hereby attorns
to the non-exclusive jurisdiction of the courts of Ontario.
10.12. Benefit of Agreement. This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns.
10.13. Counterparts. This Agreement may be executed in as many counterparts as
are necessary and shall be binding on each party when each party hereto has
signed and delivered one such counterpart. When a counterpart of this Agreement
has been executed by each party, all counterparts together shall constitute one
agreement.
10.14. Copy of Agreement. The Consultant hereby acknowledges receipt of a copy
of this Agreement duly signed by the Corporation.
IN WITNESS WHEREOF this Agreement has been duly executed by the respective
parties hereto effective as of the date first above written.
ARCHANGEL DIAMOND CORPORATION
By:
/s/ Xxxxxxx X.X. Xxxxxxxx c/s
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(Authorized Signatory)
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(Authorized Signatory)
/s/ Xxxxxxx X. Xxxxxx Witnessed By:
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XXXXXXX X. XXXXXX
/s/ Xxxxxx Xxxxxxxx
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(Signature)
000 Xxxxxxxxxx Xxxxx
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(Print Name & Xxxxxxx)
Xxxxxxx, Xxxxxxx
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