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EXHIBIT 10.2
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 XXXXXX X. XXXXXXXXX
("Xx. Xxxxxxxxx"), a resident of Quebec, Canada, SERVICES X.X. XXXXXXXXX, INC.,
a Canadian services corporation, which Xx. Xxxxxxxxx controls ("Services MLM"),
and DOMINION BRIDGE CORPORATION, a Delaware corporation (the "Corporation").
WITNESSETH
WHEREAS, Xx. Xxxxxxxxx is Chairman of the Board of Directors, Chief
Executive Officer and Director of the Corporation and also serves as an officer
and/or a director of a number of subsidiaries of the Corporation, whose services
are provided by Services MLM pursuant to the Services Agreement (as hereinafter
defined); and
WHEREAS, subject to the terms and conditions of this Agreement, Xx.
Xxxxxxxxx and Services MLM and the Corporation have decided to terminate the
Services Agreement dated February 1, 1995 by and between the Corporation and
Services MLM (the "Services Agreement") effective today, and Xx. Xxxxxxxxx has
decided to resign his positions as Chairman of the Board of Directors of the
Corporation, Chief Executive Officer of the Corporation, Director of the
Corporation, and any other positions he holds with the Dominion Bridge Parties
(as defined in Paragraph 2) effective today; and
WHEREAS, Marengere and Services MLM claim indemnification from the
Corporation for extra-contractual damages for the libel and defamation of
Services MLM and for attacks to
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Xx. Xxxxxxxxx'x honor and reputation, stress, loss of enjoyment of life and
moral damages incurred by them, 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
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;
WHEREAS, in settlement of any such extra contractual damages the
Corporation recognizes that Xx. Xxxxxxxxx and Services MLM may have suffered,
the Corporation desires to indemnify them accordingly; and
WHEREAS, in connection with Xx. Xxxxxxxxx'x resignation and the
termination of the services of Services MLM, Services MLM and the Corporation
desire to cancel all agreements between or among 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
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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 the employees
or former employees of Dominion Bridge in their official and individual
capacities.
3. The Corporation agrees to pay Services MLM or its assignees
for the said termination and the extra contractual damages, the sum of Two
Million Seven Hundred Thousand Dollars ($2,700,000). 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 Services MLM will have a
beneficial interest equal to $2,700,000. 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 Services MLM 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 Services MLM will have a
beneficial interest to purchase 187,711 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,
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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. Services MLM represents and agrees that subject to the terms
and conditions contained herein and in those agreements identified in the
Closing Memorandum, it hereby terminates the Services Agreement with the
Corporation, effective today, April 21, 1998. In addition, Xx. Xxxxxxxxx
represents and agrees that subject to the terms and conditions contained herein
and in those agreements identified in the Closing Memorandum, he hereby resigns
from his positions as a Chairman of the Board of Directors, Chief Executive
Officer and a Director of the Corporation and from any and all officer or
director positions he holds with any of the Dominion Bridge Parties.
6. Services MLM and Xx. Xxxxxxxxx further represent and agree
that they 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 Services MLM or Xx. Xxxxxxxxx will constitute lawful and just cause to refuse
to accept such services and they 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, Services MLM and Xx. Xxxxxxxxx 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. Services MLM and
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Xx. Xxxxxxxxx acknowledge 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, Services MLM and Xx. Xxxxxxxxx, for
themselves, their respective successors and assigns, do hereby irrevocably and
unconditionally release and forever discharge the Dominion Bridge Parties of and
from any and 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
Services MLM and Xx. Xxxxxxxxx now has, may have or claims to have or which
Services MLM or Xx. Xxxxxxxxx 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 Services
MLM providing services to Dominion Bridge, the termination of the Services
Agreement, Xx. Xxxxxxxxx'x positions as a director or officer of any Dominion
Bridge Party, the termination of Xx. Xxxxxxxxx'x relationship with the Dominion
Bridge Parties and Xx. Xxxxxxxxx'x direct or indirect ownership of stock in
Dominion Bridge. Services MLM and Xx. Xxxxxxxxx agree not to assert any such
Claims or causes of action released by Services MLM and Xx. Xxxxxxxxx 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,
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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. Services MLM and Xx. Xxxxxxxxx agree 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.
Services MLM and Xx. Xxxxxxxxx agree 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 forgoing, 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 Services MLM or Xx. Xxxxxxxxx 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.
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9. In the event Services MLM or Xx. Xxxxxxxxx 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,
Services MLM and Xx. Xxxxxxxxx agree to repay to the Corporation any sums
received by Services MLM from the Corporation pursuant to Paragraph 3 of this
Agreement. Further, Services MLM and Xx. Xxxxxxxxx agree to forfeit any
entitlement they have to receive any payments not yet received by then 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 Services MLM and Xx. Xxxxxxxxx may file a demand
for arbitration against the Dominion Bridge Parties pursuant to Paragraph 23.
Services MLM and Xx. Xxxxxxxxx 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.
10. As a material inducement to Services MLM and Xx. Xxxxxxxxx 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 Services
MLM and Xx. Xxxxxxxxx of and from any and all Claims for which the fullest
extent of applicable Delaware law would permit the Corporation to indemnify
Services MLM or Xx. Xxxxxxxxx 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 Services
MLM or Xx. Xxxxxxxxx. This
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release includes, subject to all of the provisions of this Paragraph 10, any and
all obligations of Services MLM or Xx. Xxxxxxxxx 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. Xxxxxxxxx, under that
certain guarantee provided in connection with the Corporation's sale of Edinov;
any and all obligations of Fidutech Technologies, Inc., a company controlled by
Xx. Xxxxxxxxx, under that certain subscription receivable in the principal
amount of $1.824 million; and any and all claims under the Services Agreement.
In addition, to the fullest extent permitted under Delaware law, the Corporation
shall indemnify Services MLM and Xx. Xxxxxxxxx from any and all loss, liability
and damages (including legal fees or costs) which Services MLM or Xx. Xxxxxxxxx
may be subject to in any claims by any third party relating to any actions taken
by Xx. Xxxxxxxxx in his capacity as an Officer or Director of any Dominion
Bridge Party or any services provided by Services MLM 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 Services MLM or Xx.
Xxxxxxxxx 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 identified in the Closing Memorandum shall become immediately
due and payable. The Corporation will not be responsible for legal fees incurred
by Services MLM or Xx. Xxxxxxxxx in any arbitration in which Services MLM or Xx.
Xxxxxxxxx is found to have materially breached their obligations under this
Agreement. Notwithstanding the foregoing release, in the event of any material
breach by Services MLM or Xx. Xxxxxxxxx of this Agreement or any
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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 Services MLM or Xx.
Xxxxxxxxx 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, Services MLM and Xx. Xxxxxxxxx represent 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 Services MLM or Xx. Xxxxxxxxx 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 to Services MLM or Xx. Xxxxxxxxx is hereby
canceled.
13. In order to insure fairness regarding the use of information
about the Dominion Bridge Parties, Services MLM and Xx. Xxxxxxxxx agree 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,
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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, Services MLM and Xx. Xxxxxxxxx
agree not to furnish any information concerning or with respect to any Dominion
Bridge Party to any person or entity that Services MLM or Xx. Xxxxxxxxx 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. Xxxxxxxxx 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
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wrong doing and each party disclaims any liability to any and all of the other
parties except as is set forth in this Agreement.
19. Any notice from Services MLM or Xx. Xxxxxxxxx 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 Services MLM or Xx. Xxxxxxxxx required under this
Agreement shall be sent to Services MLM attention: J. Xxxxx Xxxxxxx x/x Xxxxxxx
Xxxxxxx xx XXXX Xxxxx, 00xx Xxxxx, 0000 xxxx-Xxxxxxxx Blvd. West, Montreal,
Quebec, Canada H3B 3S6, or to such other person or place as Services MLM or Xx.
Xxxxxxxxx designates in writing.
20. This Agreement shall be binding upon Services MLM and Xx.
Xxxxxxxxx and upon their respective 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
Services MLM, 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.
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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.
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, Services MLM 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 Services MLM or the Corporation 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.
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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.
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. XXXXXXXXX, SERVICES X.X. XXXXXXXXX, INC. 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: XXXXXX X. XXXXXXXXX
/s/ XXXXXXX XXXXXXX /s/ XXXXXX X. XXXXXXXXX
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Signature
ATTEST: DOMINION BRIDGE CORPORATION
By: /s/ XXXXX X. XXXXXXX
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Name: Xxxxx X. Xxxxxxx
Title: Director
ATTEST: SERVICES X.X. XXXXXXXXX, INC.
/s/ XXXXXXX XXXXXXX By: /s/ XXXXXX X. XXXXXXXXX
--------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title:
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