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EXHIBIT 10.4
SETTLEMENT, RELEASE AND DISCHARGE AGREEMENT
THIS SETTLEMENT RELEASE AND DISCHARGE AGREEMENT (the "Agreement") is
made and entered into as of April 28, 1998, by and among XXXX XXXXX ("Xx.
Xxxxx"), a resident of Quebec, Canada, and DOMINION BRIDGE CORPORATION, a
Delaware corporation (the "Corporation").
WITNESSETH
WHEREAS, Xx. Xxxxx is a Director of the Corporation and a number of
subsidiaries of the Corporation; and
WHEREAS, Xx. Xxxxx has provided and continues to provide legal and
consulting services to the Corporation pursuant to an arrangement by which he is
paid for services as they are rendered; and
WHEREAS, subject to the terms and conditions of this Agreement, Xx.
Xxxxx has decided to terminate his arrangement to provide legal and consulting
services to the Corporation effective today, and Xx. Xxxxx has decided to resign
his positions as a Director of the Corporation, and any other positions he holds
with the Dominion Bridge Parties (as defined in Paragraph 2) effective today;
and
WHEREAS, Xx. Xxxxx claims indemnification from the Corporation for
extra-contractual damages for the libel and defamation for attacks to Xx.
Xxxxx'x honor and reputation, stress, loss of enjoyment of life and moral
damages incurred by him, following the public attacks he was the object of on
the part of among others, Xx. Xxxxxxx, Mr. Knai, the plaintiffs in the Xxxxxx
and Xxxxx cases, Royal Millenia Group, Ltd., and the "Committee to
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Revitalize Dominion Bridge Corporation," all of which were reported in the
electronic and print media in Quebec and in Canada, as well as various personal
attacks and moral and physical threats on the worldwide internet which were
reported to the Royal Canadian Mounted Police and the Montreal Urban Community
Police and investigated by Constable Xxxxxx Xxxxxxx (Badge No. 4834) and file
number 8980403006; and
WHEREAS, in settlement of any such extra contractual damages the
Corporation recognizes that Xx. Xxxxx may have suffered, the Corporation desires
to indemnify him accordingly; and
WHEREAS, in connection with Xx. Xxxxx'x resignation and the termination
of the services of and his arrangement with the Corporation, Xx. Xxxxx and the
Corporation desire to cancel all agreements between them and supersede those
agreements with this Agreement and those agreements identified in that certain
Closing Memorandum (the "Closing Memorandum") dated as of April 21, 1998, a copy
of which is attached hereto as Exhibit A;
NOW, THEREFORE, in consideration for the premises, the mutual promises
herein contained, and intending to be legally bound hereby, it is agreed as
follows:
1. The recitals set forth above are incorporated herein as part of this
Agreement.
2. "Dominion Bridge Parties" as used herein, shall at all times mean
Dominion Bridge Corporation, its subsidiaries, successors and assigns, its
affiliated and predecessor companies or corporations, their successors and
assigns, their affiliated and predecessor companies or corporations and the
present or former directors, officers, shareholders, employees, attorneys and
agents of any of them, whether in their individual or official capacities, and
the current and former trustees or administrators of any pension or other
benefit plan applicable to
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the employees or former employees of Dominion Bridge in their official and
individual capacities.
3. The Corporation agrees to pay or its assignees for the said
termination and the extra contractual damages, the sum of Eighty Four Thousand
Dollars ($84,000). These payments will be made by delivery at the time of
execution of this Agreement to Xxxxxxx Mercure as trustee for Wellgate
International, Ltd. ("Wellgate") of the Corporation's 11.5% Convertible Note
(the "Note") in the principal amount of Four Million Eight Hundred Thousand
Dollars ($4,800,000), in which will have a beneficial interest equal to $84,000.
The Note is convertible into shares of Common Stock, $.001 par value per share,
of the Corporation at the conversion rate of $2.60 per share. A copy of the Note
is attached hereto as Exhibit B.
4. As an inducement to accept the Note pursuant to Paragraph 3 hereof,
Dominion Bridge will issue a Common Stock Purchase Warrant (the "Warrant") to
Wellgate to purchase 333,708 shares of Common Stock, $.001 par value per share,
of the Corporation at $3.00 per share for a three (3) year period commencing on
the date hereof in which he will have a beneficial interest to purchase 604
shares. A copy of the Warrant is attached hereto as Exhibit C. The Corporation
has also agreed to register the resale of the shares of Common Stock issuable
upon exercise of the Warrant and conversion of the Note, as applicable, with the
United States Securities and Exchange Commission (the "SEC") pursuant to the
terms of a Registration Rights Agreement, a copy of which is attached hereto as
Exhibit D.
5. Xx. Xxxxx represents and agrees that subject to the terms and
conditions contained herein and in those agreements identified in the Closing
Memorandum, he hereby terminates by arrangement with the Corporation, effective
today, April 21, 1998. In addition, Xx. Xxxxx represents and agrees that subject
to the terms and conditions contained herein and in
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those agreements identified in the Closing Memorandum, he hereby resigns from
his position as a Director of the Corporation and from any and all director
positions he holds with any of the Dominion Bridge Parties.
6. Xx. Xxxxx further represents and agrees that he will not apply for,
otherwise seek or accept employment with any Dominion Bridge Party at any time
in the future. Any breach of this Paragraph 6 by Xx. Xxxxx will constitute
lawful and just cause to refuse to accept such services and he will have no
cause of action against any Dominion Bridge Party for such refusal.
7. Except as permitted or directed by the Corporation's Board of
Directors or as required by law, Xx. Xxxxx shall not utilize, divulge, furnish
or make accessible to anyone any confidential or secret knowledge or information
of the Dominion Bridge Parties, including any trade secrets, confidential or
secret processes, plans, or materials, useful in any aspect of the business of
the Dominion Bridge Parties, any confidential customer or supplier lists or
business plan of the Dominion Bridge Parties, or any other confidential
information or trade secrets of the business of the Dominion Bridge Parties. Xx.
Xxxxx acknowledges that the above-described knowledge or information constitutes
a unique and valuable asset of the Dominion Bridge Parties, acquired at great
time and expense by the Dominion Bridge Parties, and that any disclosure or
other use of such knowledge or information other than for the sole benefit of
the Dominion Bridge Parties, would be wrongful and would cause irreparable harm
to the Dominion Bridge Parties.
8. As a material inducement to the Corporation to enter into this
Agreement and for and in consideration of the terms expressed herein, to the
fullest extent permitted by Delaware law, Xx. Xxxxx, for himself, his successors
and assigns, does hereby irrevocably and unconditionally release and forever
discharge the Dominion Bridge Parties of and from any and
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all claims, charges, demands, liabilities, obligations, promises, controversies,
damages, rights, actions and causes of action of whatever nature, kind or
character, in law or equity, whether known or unknown ("Claims"), which Xx.
Xxxxx now has, may have or claims to have or which Xx. Xxxxx at any time
heretofore may have, had or claimed to have against any Dominion Bridge Party.
This release includes, but is not limited to, those Claims arising from, during
or related in any way to providing services to Dominion Bridge, Xx. Xxxxx'x
positions as a director of any Dominion Bridge Party, the termination of Xx.
Xxxxx'x relationship with the Dominion Bridge Parties and Xx. Xxxxx'x direct or
indirect ownership of stock in Dominion Bridge. Xx. Xxxxx agrees not to assert
any such Claims or causes of action released by Xx. Xxxxx in this Paragraph.
This release includes, but is not limited to, Claims arising under federal,
state, Canadian provincial, or local statutes, ordinances or common laws,
specifically including, but not limited to, the United States Securities Act of
1933, as amended, the United States Securities Exchange Act of 1934, as amended,
the Civil Rights Act of 1866, the Civil Rights Act of 1871, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination
in Employment Act of 1967, the Rehabilitation Act of 1973, the Older Workers
Benefit Protection Act, the Americans With Disabilities Act, the Employee
Retirement Income Security Act of 1974, Executive Order 112346, the Veterans
Reemployment Statutes, the Family and Medical Leave Act, all as amended, and
Claims pertaining to buying or selling securities, unlawful discrimination, any
common law Claims for breach of contract, wrongful discharge, or otherwise,
and/or Claims for attorneys' fees, and any similar Claims under Canadian
provincial law. Xx. Xxxxx agrees not to file any lawsuit or a demand for
arbitration against any Dominion Bridge Party asserting a cause of action for
any of the Claims released herein. Xx. Xxxxx agrees
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to pay for any damages (including legal fees or costs) incurred by any Dominion
Bridge Party as a result of any breach of the promises in this Paragraph 8.
Notwithstanding the foregoing, this Paragraph 8 shall not release any Dominion
Bridge Party for any claims for which the Corporation has an indemnification
obligation under this Agreement. Notwithstanding the foregoing release, in the
event of any material breach by the Dominion Bridge Parties of this Agreement or
any agreement identified in the Closing Memorandum, the release set forth in
this Paragraph 8 shall be null and void and of no further force or effect.
Notwithstanding the foregoing, nothing contained herein shall prohibit Xx. Xxxxx
from asserting any claim against any of the Dominion Bridge Parties arising out
of or in any way related to the Note, Credit Agreement, Consulting Agreement or
any other agreement identified in the Closing Memorandum.
9. In the event Xx. Xxxxx files a lawsuit against any Dominion Bridge
Party asserting a cause of action for any of the Claims released herein pursuant
to the terms and conditions Paragraph 8 above, Xx. Xxxxx agree to repay to the
Corporation any sums received by him from the Corporation pursuant to Paragraph
3 of this Agreement. Further, Xx. Xxxxx agrees to forfeit any entitlement he has
to receive any payments not yet received by him from the Corporation pursuant to
Paragraph 3. Any material breach of this Agreement by any Dominion Bridge Party
shall be considered an event of default under the Note, Credit Agreement,
Consulting Agreement and all other agreements identified in the Closing
Memorandum and Xx. Xxxxx may file a demand for arbitration against the Dominion
Bridge Parties pursuant to Paragraph 23. Xx. Xxxxx will not be responsible for
legal fees incurred by the Corporation in any arbitration in which the
Corporation is found to have materially breached its obligations under this
Agreement.
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10. As a material inducement to Xx. Xxxxx to enter into this Agreement
and for and in consideration of the terms expressed herein, the Dominion Bridge
Parties themselves, their successors and assigns, do hereby irrevocably and
unconditionally release and forever discharge Xx. Xxxxx of and from any and all
Claims for which the fullest extent of applicable Delaware law would permit the
Corporation to indemnify Xx. Xxxxx which the Dominion Bridge Parties now have,
may have or claims to have or (subject to the monetary limitation with respect
to the Fiduciary Deductions, as defined in Paragraph 12) which any Dominion
Bridge Party at any time heretofore may have, had or claimed to have against Xx.
Xxxxx. This release includes, subject to all of the provisions of this Paragraph
10, any and all obligations of Xx. Xxxxx with respect to the Fiduciary
Deductions (to the extent disclosed in paragraph 12); any and all obligations of
Fidutech International, Inc., a company controlled by Xx. Xxxxx, under that
certain guarantee provided in connection with the Corporation's sale of Edinov;
and any and all obligations of Fidutech Technologies, Inc., a company controlled
by Xx. Xxxxx, under that certain subscription receivable in the principal amount
of $1.824 million. In addition, to the fullest extent permitted under applicable
Delaware law, the Corporation shall indemnify Xx. Xxxxx from any and all
liability, loss and damages (including legal fees or costs) which Xx. Xxxxx may
be subject to in any claims by any third party relating to any actions taken by
Xx. Xxxxx in his capacity as a Director of any Dominion Bridge Party or any
services provided by Xx. Xxxxx to any Dominion Bridge Party. The Dominion Bridge
Parties agree not to assert any such Claims or causes of action released in this
Paragraph 10. The Corporation agrees to pay for any damages (including legal
fees or costs) incurred by Xx. Xxxxx as a result of any material breach of the
promises of the Dominion Bridge Parties in this Paragraph 10 and in the event of
such breach, all sums due and owing under the Note, Credit Agreement, Consulting
Agreement and any other agreement
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identified in the Closing Memorandum shall become immediately due and payable.
The Corporation will not be responsible for legal fees incurred by Xx. Xxxxx in
any arbitration in which Xx. Xxxxx is found to have materially breached their
obligations under this Agreement. Notwithstanding the foregoing release, in the
event of any material breach by Xx. Xxxxx of this Agreement or any agreement
identified in the Closing Memorandum, the release set forth in this Paragraph 10
shall be null and void and of no further force or effect. Notwithstanding the
foregoing, nothing contained herein shall prohibit any of the Dominion Bridge
Parties from asserting any claim against Xx. Xxxxx arising out of or in any way
related to the Note, Credit Agreement, Consulting Agreement or any other
agreement identified in the Closing Memorandum.
11. As a material inducement to the Corporation to enter into this
Agreement, Xx. Xxxxx represents to the Corporation that to the best of their
actual knowledge after due inquiry, the total amount of outstanding fiduciary
deductions in arrears which are due and owing by the Dominion Bridge Parties to
fiduciary creditors, including the Canadian Government, as of March 31, 1998 is
Cdn $15.012 million as set forth in Schedule A attached hereto (the "Fiduciary
Deductions").
12. The Corporation's entire obligation to provide fees, incentive
compensation, bonus, stock, stock awards, stock options, pension, medical
insurance, dental insurance, group-life insurance, split-dollar insurance,
vacation, compensation, benefits, consideration of any kind, or anything else of
value to Xx. Xxxxx is set forth in this Agreement and in those agreements
identified in the Closing Memorandum, a copy of which is attached hereto as
Exhibit A. Any other obligation of any Dominion Bridge Party to provide any of
the foregoing Xx. Xxxxx is hereby canceled.
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13. In order to insure fairness regarding the use of information about
the Dominion Bridge Parties, Xx. Xxxxx agrees that for a period of two (2) years
from the date hereof, without the prior written consent of the Board of
Directors of the Corporation, that they will not join with or become part of
(whether by ownership of an equity interest in, other than any ownership of less
than 5 percent of any class of securities of any company which is a reporting
company under the Securities Exchange Act of 1934) or serve as a partner,
director, officer, employee or agent of any corporation, group, partnership or
other entity (each of the foregoing is hereafter referred to as an "Acquirer")
which seeks to acquire all or substantially all of the business and/or assets of
any Dominion Bridge Party including, without limitation of the foregoing, any
such acquisition sought to be effectuated by purchase of all or any substantial
portion of the Corporation's voting stock or securities convertible into all or
any substantial portion of the Corporation's voting stock (whether through
open-market purchases(s), privately negotiated purchase(s) or tender offer(s)),
by merger into or with any Party or by purchase of all or substantially all of
the assets of the Corporation or the purchase of all of or a majority of the
outstanding stock of any Dominion Bridge Party. In addition, Xx. Xxxxx agrees
not to furnish any information concerning or with respect to any Dominion Bridge
Party to any person or entity that Xx. Xxxxx knows or believes is interested in
acquiring any Dominion Bridge Party.
14. Each of the parties to this Agreement promises and agrees that he
or it shall make no negative or derogatory comments, oral or written, directly
or by innuendo, about any of the other parties to this Agreement on any subject,
including, but not limited to, comments about another party's business actions,
management, employees, policies, procedures or management-employee relations.
The parties hereby agree that the press release describing the subject matter of
this Agreement attached hereto as Exhibit D shall be disseminated after this
Agreement and all
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the agreements identified in the Closing Memorandum have been executed by the
parties hereto or thereto, as applicable.
15. Other than as set forth herein or in any agreement identified in
the Closing Memorandum, a copy of which is attached hereto as Exhibit A, each of
the parties to this Agreement represents that he or it has not heretofore
assigned or transferred, or purported to assign or transfer, to any person or
entity, any claim or any portion thereof or interest therein.
16. Each of the parties to this Agreement represents and warrants that
he or it knows of no claims that he or it has against any of the other parties
to this Agreement and further represents and warrants that he or it knows of no
claims that any other person or entity controlled by such party or affiliated
with such party has against any of the other parties to this Agreement. Xx.
Xxxxx further represents and warrants that he is not now nor has he ever been an
employee of any Dominion Bridge Party and that he has no rights nor has he ever
had any rights as an employee of any Dominion Bridge Party.
17. Except for the representations and warranties made by the parties
in this Agreement or in any agreement identified in the Closing Memorandum, each
of the parties to this Agreement represents and acknowledges that in executing
this Agreement he or it does not rely, and has not relied, upon any
representation or statement made by any of the other parties to this Agreement
by any other party's agents, representatives or attorneys with regard to the
subject matter, basis or effect of this Agreement.
18. The parties to this Agreement have decided it is in their mutual
self-interest to enter into this Agreement. It shall not be construed as an
admission by any party of any act of wrong doing and each party disclaims any
liability to any and all of the other parties except as is set forth in this
Agreement.
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19. Any notice from Xx. Xxxxx to the Corporation required under this
Agreement shall be sent to Dominion Bridge's Chief Executive Officer, 000 xxx
Xxxxx Xxxx, Xxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0, or to such other person or place
as the Corporation designates in writing. Any notice from the Corporation to Xx.
Xxxxx required under this Agreement shall be sent to attention: J. Xxxxx Xxxxxxx
c/x Xxxxxxx Mercure at CIBC Tower, 31st Floor, 1155 xxxx-Xxxxxxxx Blvd. West,
Montreal, Quebec, Canada H3B 3S6, or to such other person or place as Xx. Xxxxx
designates in writing.
20. This Agreement shall be binding upon Xx. Xxxxx and upon his heirs,
administrators, representatives, executors, successors and assigns, and shall
inure to the benefit of the Dominion Bridge Parties. This Agreement shall be
binding on the Dominion Bridge Parties and its successors and assigns and shall
inure to the benefit of, their respective heirs, administrators,
representatives, executors, successors and assigns.
21. This Agreement is made and entered into in the Province of Quebec,
Canada, and shall in all respects be interpreted, enforced and governed under
the laws of said province; provided, however, that to the extent specifically
provided herein, certain provisions of this Agreement shall be interpreted in
accordance with Delaware law. The language of all parts of this Agreement shall
in all cases be construed as a whole, according to its fair meaning, and not
strictly for or against any of the parties.
22. Should any provision of this Agreement be declared or be determined
to be illegal or invalid, the validity of the remaining parts, terms or
provisions shall not be affected thereby and said illegal or invalid part, term,
or provision shall be deemed not to be a part of this Agreement.
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23. In the event of any dispute between the parties, including any
claims, counterclaims, crossclaims or third party claims, whether referring or
relating to any term of this Agreement or any other matter which the parties are
unable to resolve between themselves, at the written request of any party the
matter shall be submitted to arbitration pursuant to the rules of the Canadian
Arbitration Association. Within ten (10) days after receipt of a request for
arbitration, Xx. Xxxxx and the Corporation shall each choose an arbitrator and
within ten (10) days thereafter, the Canadian Arbitration Association shall be
requested to supply a third arbitrator and this request may be made by any
party. In the event the Corporation or Xx. Xxxxx does not choose an arbitrator
within ten (10) days, as set forth above, the Canadian Arbitration Association
shall also supply that arbitrator in addition to the third arbitrator. The
arbitration shall be held in Xxxxxxxx, Xxxxxx, Xxxxxx, and shall commence and be
completed as soon as possible under the rules and regulations of the Canadian
Arbitration Association then in effect. In the event of any dispute of any
procedural, evidentiary, or substantive matter, including the arbitrability of
the dispute presented, the decision of the majority of the arbitrators shall be
final and conclusive upon the parties on the matter of dispute.
24. As used in this Agreement, the singular or plural number shall be
deemed to include the other whenever the context so indicates or requires.
25. This Agreement is part of a larger transaction involving numerous
additional agreements all of which are identified in the Closing Memorandum, a
copy of which is attached hereto as Exhibit A. Unless and until this Agreement
and all of the agreements identified in the Closing Memorandum are executed by
the parties hereto or thereto, as applicable, this Agreement shall not be
binding upon the parties hereto.
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26. This Agreement, and any agreement identified in the Closing
Memorandum, a copy of which is attached hereto as Exhibit A, sets forth the
entire agreement between the parties hereto and fully supersedes any and all
prior agreements or understandings between or among the parties hereto. This
Agreement may not be modified unless the parties agree in writing.
27. All dollar figures included in this Agreement represent U.S.
Dollars.
28. The parties acknowledge that they have required that this Agreement
and all related documents be prepared in English. Les parties reconnaissent
avoir exige que la presente convention et tous les documents connexes soient
rediges en anglais.
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XX. XXXXX AND THE CORPORATION ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND
FULLY UNDERSTAND THE PROVISIONS OF THIS AGREEMENT INCLUDING THE RELEASE OF
CLAIMS AND HAS HAD SUFFICIENT TIME AND OPPORTUNITY TO CONSULT WITH HIS OR ITS
PERSONAL FINANCIAL, TAX, AND LEGAL ADVISORS PRIOR TO EXECUTING THIS AGREEMENT.
Executed as of this 28th day of April, 1998.
WITNESS: XXXX XXXXX
/s/ Xxxx Xxxxx
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Signature
ATTEST: DOMINION BRIDGE CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
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Name Xxxxx X. Xxxxxxx
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Title: Director
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