Contract
Exhibit
99.6
BETWEEN:
R.C,
XXXXXX CONSULTING INC. (formerly 1379074 ONTARIO LTD.)
("BensonCo")
-
and
-
XXXXX
XXXXXX
("Xxxxxx")
-
and
-
XXXXXXXXX
INC.
("Xxxxxxxxx")
MEMORANDUM
OF AGREEMENT
WHEREAS
the parties entered into a consulting agreement dated as of July 15, 2005
(the
"Agreement"), a copy of which is attached as Appendix "A" to this Memorandum
of
Agreement;
AND
WHEREAS BensonCo and Xxxxxx will be collectively referred to hereinafter
in this
Memorandum of Agreement as the "Consultant" and capitalized terms not defined
herein have the meanings given to them in the Agreement;
AND
WHEREAS the parties have agreed that the Consultant will be paid $1,000,000
plus
GST for Milestones achieved pursuant to the Agreement and not for
severance;
AND
WHEREAS the parties have mutually agreed that the Agreement, with the exceptions
noted herein, will terminate upon Xxxxxx'x resignation as Chief Restructuring
Officer of Xxxxxxxxx ("CRO") but, in any event, not later than March 7,
2007;
AND
WHEREAS the parties wish to enter into a full and final settlement of all
outstanding issues arising from the Agreement or otherwise;
FOR
GOOD
AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS
ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS:
1. The
Agreement shall terminate pursuant to section 4.1 thereof (subject to paragraph
6 below) upon Xxxxxx ceasing to be CRO but, in any event, not later than
March
7, 2007, and the parties agree that the Agreement will have been duly terminated
on proper notice in accordance with its terms.
2. In
consideration of the services rendered and Milestones achieved by BensonCo
pursuant to the Agreement, Xxxxxxxxx agrees to pay BensonCo the sum of
$1,000,000 plus GST in the following manner:
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(a)
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the
sum of $750,000 plus GST at the earlier of the time of signing
of this
Memorandum of Agreement and the time at which the pending resignation
of
Xxxxxx as CRO and/or the pending appointment of Xxx Xxxxxxxx as
Chief
Executive Officer of Xxxxxxxxx is announced;
and
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(b)
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the
sum of $250,000 plus GST upon Xxxxxx ceasing to be CRO, but, in
any event,
not later than March 7, 2007.
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3. The
Consultant acknowledges that the payment of the sum in paragraph 2 above
is
inclusive of and exhaustive of any and all possible entitlements, under the
Agreement or otherwise, to any Work Fees for services provided after Xxxxxx'x
resignation as CRO, and Milestone Fees, any Ravelston Receivable Milestones
and
Milestone Fees, any Ravelston Litigation Milestones and Milestone Fees, any
Matters and Milestone Fees, any Fees pursuant to section 4.6 of the Agreement
surrounding Term and Termination or any vacation pay owing. The
payment of the sum in paragraph 2 shall be made in full and final settlement
of
any obligations arising under the Agreement, save and except as provided
in
paragraph 6 hereof.
4. The
parties agree that Xxxxxx shall not resign as CRO until the earlier of the
date
of filing with the Ontario Securities Commission in proper form of the audited
annual and unaudited interim financial statements of Xxxxxxxxx for historical
periods and March 7, 2007, and Xxxxxx agrees to take all proper steps as
CRO to
assist Xxxxxxxxx in completing such filing.
5. Xxxxxx
shall resign as a director and officer of Xxxxxxxxx and all of its subsidiaries
not later than the date of his resignation as CRO.
6. The
Agreement shall terminate upon Xxxxxx'x resignation as CRO, but, in any event,
not later than March 7, 2007, subject to the survival and continuation of
the
following provisions:
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(a)
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The
Consultant's entitlement to stock options to purchase 1,000,000
common
shares of Xxxxxxxxx per section 3.3.3 of the
Agreement;
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(b)
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the
Consultant's entitlement to indemnification per section 5.1 of
the
Agreement; and
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(c)
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the
Consultant's entitlement per section 6.3 of the Agreement to the
existing
directors and officers' liability insurance coverage, which shall
be
continued for a period of not less than three (3) years from the
earlier
of the date of his resignation as CRO and March 7,
2007;
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and
provided that, for the month in which Xxxxxx resigns, the $75,000 monthly
Work
Fee for that month will be prorated based on the number of days to and including
the date of Xxxxxx'x resignation as CRO in that month relative to the total
number of days in that month.
7. The
Consultant agrees to indemnify and save Xxxxxxxxx harmless with respect to
any
claims, charges or demands which might be made upon it in respect of the
Consultant's obligations in connection with the Milestone Fee referred to
in
section 2 of this Memorandum of Agreement pursuant to the Income Tax
Act (Canada) or the Employment Insurance Act.
8. Each
of
Xxxxxxxxx and the Consultant acknowledges by signing this Memorandum of
Agreement that it understands the terms hereof and has had a reasonable
opportunity for independent advice with respect to it. Each of
Xxxxxxxxx and the Consultant further confirms that this Memorandum of Agreement,
the surviving provisions of the Agreement and the indemnity agreement dated
August 9, 2005 between Xxxxxxxxx and Xxxxxx (collectively, the "Three
Agreements") constitute the entire agreement between the parties.
9. In
consideration of the terms and conditions set out in this Memorandum of
Agreement, and effective the date of Xxxxxx'x ceasing to be CRO, the Consultant
hereby releases and forever discharges Xxxxxxxxx and its successors and assigns
and each of their respective officers, directors, employees and agents [the
Releasees] from any and all actions, causes of action, claims, demands, and
proceedings of whatever kind for damages, indemnity, costs, compensation
or any
other remedy which the Consultant had, may now have, or may have in the future
(collectively, "Claims") in respect of the Agreement, the termination of
that
Agreement or the provision of services by BensonCo or Xxxxxx to Xxxxxxxxx,
or
otherwise; save and except for and excluding from the scope of this release
any
Claims in respect of any of the Three Agreements, including any matter in
respect of which Xxxxxx or BensonCo has a right to indemnification
thereunder.
10. In
consideration of the terms and condition set out in this Memorandum of
Agreement, and effective the date of Xxxxxx'x ceasing to be CRO, Xxxxxxxxx,
on
its own behalf and on behalf of its wholly owned subsidiaries, hereby releases
and forever discharges the Consultant and their respective successors and
assigns from any and all actions, causes of action, claims, demands and
proceedings of whatever kind for damages, indemnity, costs, compensation
or any
other remedy which Xxxxxxxxx had, many now have, or may have in the future
in
respect of the Agreement, the termination of that Agreement, the provision
of
services by the Consultant to Xxxxxxxxx, or any of Xxxxxx'x appointment,
conduct
and resignation as a director and/or officer of Xxxxxxxxx and any of its
subsidiaries. This Release shall not cover any breach of fiduciary
duties by the Consultant. Xxxxxxxxx admits that there are no facts
actually known to Xx. X. Xxxx, Chairman of the Board; and Xx. X. Xxxxxxxx,
Chairman of the Litigation Committee, at this time that would constitute
the
basis for a claim of breach of fiduciary duties. This Release shall
not cover any breach of this Memorandum of Agreement.
Dated
at
Xxxxxxx, Xxxxxxx, this 15th day of
January,
2007.
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X.X.
XXXXXX CONSULTING, INC.
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/s/
X.X. Xxxxxx
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Per:
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/s/
X.X. Xxxxxx
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/s/
Xxxx Xxxxxx
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Xxxxx
Xxxxxx
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Witness
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Dated
at
Xxxxxxx, Xxxxxxx, this 15th day of
January,
2007.
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XXXXXXXXX
INC.
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/s/
Xxx Xxxxxxxx
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Per:
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Per:
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