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EXHIBIT 10.3
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 XXXXXXX X. XXXXXXXXX
("Xx. Xxxxxxxxx"), a resident of Quebec, Canada, GREYHORSE RESOURCES (CANADA),
INC., a Canadian services corporation, which Xx. Xxxxxxxxx controls
("Greyhorse"), and DOMINION BRIDGE CORPORATION, a Delaware corporation (the
"Corporation").
WITNESSETH
WHEREAS, Xx. Xxxxxxxxx is the President and Chief Operating 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
Greyhorse pursuant to the Services Agreement (as hereinafter defined); and
WHEREAS, subject to the terms and conditions of this Agreement, Xx.
Xxxxxxxxx and Greyhorse and the Corporation have decided to terminate the
Services Agreement dated February 1, 1995 by and between the Corporation and
Greyhorse (the "Services Agreement") effective today, and Xx. Xxxxxxxxx has
decided to resign his positions as President and Chief Operating 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, Xxxxxxxxx and Greyhorse claim indemnification from the
Corporation for extra-contractual damages for the libel and defamation of
Greyhorse and for attacks to Xx. Xxxxxxxxx'x honor and reputation, stress, loss
of enjoyment of life and moral damages incurred
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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 Greyhorse 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 Greyhorse, Greyhorse 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 companies or corporations and the
present or former directors, officers, shareholders, employees,
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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 Greyhorse or its assignees for
the said termination and the extra contractual damages, the sum of Two Million
Sixteen Thousand Dollars ($2,016,000). 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 Greyhorse will have a beneficial interest equal
to $2,016,000. 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 Greyhorse 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 Greyhorse will have a beneficial
interest to purchase 145,693 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.
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5. Greyhorse 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 President, Chief Operating 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. Greyhorse 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
Greyhorse 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, Greyhorse 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. Greyhorse and 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
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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, Greyhorse 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
Greyhorse and Xx. Xxxxxxxxx now has, may have or claims to have or which
Greyhorse 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 Greyhorse
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. Greyhorse and Xx. Xxxxxxxxx agree not to assert any such Claims
or causes of action released by Greyhorse 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,
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
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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. Greyhorse 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. Greyhorse 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 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 Greyhorse
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.
9. In the event Greyhorse 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,
Greyhorse and Xx. Xxxxxxxxx agree to repay to the
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Corporation any sums received by Greyhorse from the Corporation pursuant to
Paragraph 3 of this Agreement. Further, Greyhorse 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 Greyhorse and Xx. Xxxxxxxxx may file a
demand for arbitration against the Dominion Bridge Parties pursuant to Paragraph
23. Greyhorse 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 Greyhorse 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 Greyhorse
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 Greyhorse 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 Greyhorse or Xx.
Xxxxxxxxx. This release includes, subject to all of the provisions of this
Paragraph 10, any and all obligations of Greyhorse or Xx. Xxxxxxxxx with respect
to the Fiduciary Deductions (to the extent disclosed in paragraph 12); and any
and all claims under the Services Agreement. In addition, to the fullest extent
permitted under Delaware
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law, the Corporation shall indemnify Greyhorse and Xx. Xxxxxxxxx from and any
and all liability, loss and damages (including legal fees or costs) which
Greyhorse 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 Greyhorse 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
Greyhorse 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 Greyhorse or Xx. Xxxxxxxxx in any arbitration in which
Greyhorse 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 Greyhorse or Xx. Xxxxxxxxx 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 Greyhorse 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, Greyhorse and Xx. Xxxxxxxxx represent to the Corporation that to the
best of their actual
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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 Greyhorse 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 Greyhorse or Xx. Xxxxxxxxx is hereby canceled.
13. In order to insure fairness regarding the use of information
about the Dominion Bridge Parties, Greyhorse 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, 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
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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, Greyhorse and Xx.
Xxxxxxxxx agree not to furnish any information concerning or with respect to any
Dominion Bridge Party to any person or entity that Greyhorse 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 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
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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 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 Greyhorse 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 Greyhorse or Xx. Xxxxxxxxx required under this Agreement shall be
sent to Greyhorse 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 Greyhorse or Xx. Xxxxxxxxx designates in
writing.
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20. This Agreement shall be binding upon Greyhorse 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
Greyhorse, 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.
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, Greyhorse and the Corporation shall each choose an arbitrator and
within ten (10)
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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 Greyhorse 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.
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.
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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, GREYHORSE RESOURCES (CANADA), LTD. 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 ____ day of April, 1998.
WITNESS: XXXXXXXX X. XXXXXXXXX
/s/ XXXXXXX XXXXXXX /s/ XXXXXXX 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: GREYHORSE RESOURCES (CANADA), LTD.
/s/ XXXXXXX XXXXXXX By: /s/ XXXXXXX X. XXXXXXXXX
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Name: Xxxxxxxx X. Xxxxxxxxx
Title:
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