Exhibit 3.9
CONSULTING AGREEMENT
THIS AGREEMENT made as of the 29th day of January 0000
X X X X X X X:
275311 ONTARIO INC.
a corporation subsisting under the laws of Ontario
(hereinafter called the "SFCo")
OF THE FIRST PART;
- and -
MICROMEM TECHNOLOGIES INC.
(formerly, Avanticorp International Inc.)
a corporation incorporated under the laws of Ontario
(hereinafter called the 'Corporation")
OF THE SECOND PART;
NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable
consideration (the receipt and sufficiency whereof are hereby acknowledged by
both of the parties hereto), it is agreed by and between the parties hereto as
follows:
1. Retainer of SFCo
----------------
Subject to the terms and conditions of this agreement, the Corporation
hereby retains SFCo, and SFCo hereby agrees, to: (i) provide to the Corporation
the services further described in section 2 hereof; and (ii) arrange for Xxx
Xxxx to serve as a director of the Corporation; all during the period commencing
January 1, 1999 through to December 31, 1999.
2. Duties
SFCo shall report to the Board of Directors (the "Board") of the
Corporation and shall perform such duties as may from time to time be determined
by or as may be assigned to it by the Board within the scope of the following
duties:
E-76
i. assisting and advising the corporation's board of directors and senior
management in negotiations with prospective purchasers, manufacturers
and licensees of the Corporation's XXXXXX XX technology;
ii. overseeing the Corporation's compliance with corporate and securities
regulations in Canada and those of any trading system or stock
exchange upon which the Corporation's shares may become listed;
iii. retaining and instructing the Corporation's professional advisors
including the corporation's legal counsel and auditors;
iv. providing advice to the Corporation's board of directors and senior
management with respect to structuring of the Corporation's equity
funding by private placement and/or public offering and providing
introductory services to the financial and investment community in
Toronto; and
v. managing a corporate office of the Corporation to be situated in
Toronto.
3. Service
During the term of this agreement, SFCo shall faithfully serve the
Corporation and shall use its best efforts to promote the interests of the
Corporation and shall devote such portion of Xxx Xxxx'x working time to the
business and affairs of the Corporation as SFCo shall deem necessary to carry
out the responsibilities of SFCo and Xxx Xxxx as required under this agreement.
4. Termination of Agreement
(a) This agreement, unless it is extended by mutual written agreement
between the parties, shall terminate on December 31, 1999 provided
that this agreement may be earlier terminated by the Corporation,
without notice, for cause. This agreement shall also terminate upon
the death or disability of Xxx Xxxx. Xxx Xxxx shall be deemed to be
disabled in the event that he should be unable to perform his
functions hereunder by reason of physical incapacity, mental disease
or affliction for any two weeks in any twelve month period.
(b) The Corporation may terminate this contract without notice or without
cause at any time by paying SFCo the full present value of the fees
otherwise payable hereunder during the balance of the term of this
agreement.
5. Results of Termination
Upon the occurrence of any of the events described in paragraph 4, this
agreement and the retainer of SFCo hereunder shall be wholly terminated, with
the exception of paragraphs 8 through 13 inclusive and the clauses specifically
contemplated to continue in full force and effect beyond termination of this
agreement. Upon any such termination, neither SFCo no Xxx Xxxx shall have any
claim against the Corporation for damages or otherwise arising out of or in
respect of this agreement except for payments required to be made hereunder.
E-77
6. Remuneration
As remuneration for the services to be rendered by SFCo to the
Corporation hereunder, the Corporation shall pay SFCo a fee which shall be
payable on the last day of every quarter during the term of this agreement, at
the option of the Corporation either:
i. through the issuance to SFCo of a number of fully paid and
non-assessable common shares of the Corporation (the "Incentive
Shares") equal to 0.3125% of the simple average of the number of
common shares of the Corporation that were outstanding on the last day
of each of the three months of the quarter in respect of which the
Incentive Shares are issued (the "Average Outstanding"); or
ii. through payment by certified cheque or bank draft for an amount equal
to 0.3125% of the Average Outstanding multiplied by the simple average
of the close price of the common shares of the Corporation on the
stock exchange or trading market where the common shares of the
Corporation are traded from time to time on each day of the quarter in
respect of which the said payment from time to time on each day of the
quarter in respect of which the said payment is made; provided that if
on any trading day the common shares of the Corporation have not
traded on such stock exchange or trading market, then the simple
average of the closing bid and ask prices shall be used in lieu of the
close price in respect of that day.
The parties hereto acknowledge and agree that the issuance of any Incentive
Shares shall be conditional upon the Corporation receiving requisite approval of
the shareholders of the Corporation pursuant to Ontario Securities Commission
Rule 45-503 provided that in the event that the Corporation is unable or
unwilling to issue the Incentive Shares in respect of a quarter due to requisite
shareholder approval not having been obtained prior to the end of the said
quarter then the Corporation shall pay to SFCo the cash fee provided for in
sub-section 6(ii) above.
7. Extension of Contract
If the Corporation wishes to extend this contract past December 31,
1999, the Board shall notify SFCo accordingly by October 31, 1999, whereupon, if
SFCo desires to extend this contract, the parties shall negotiate the terms of
the extension of this contract.
8. Confidential Information
SFCo acknowledges that in the course of SFCo carrying out, performing
and fulfilling its responsibilities to the Corporation it will have access to
and will be entrusted with detailed confidential information including without
limitation financial information, shareholder lists, of all kinds, agreements,
correspondence and documentation to, from , and regarding financiers and
prospective financiers, auditors, legal counsel and professional advisors, joint
venture partners and prospective joint venture partners, of the Corporation and
its subsidiaries, brokers, vendors or properties of any kind, and patents and
trade secrets, marketing and business plans and price lists concerning the
business of the Corporation and the present and contemplated products,
techniques and other services evolved or used by the Corporation (the
"Confidential Information") and that any disclosure of the Confidential
Information to the competitors of the Corporation or the general public would be
highly detrimental to the best interests of these parties. SFCo acknowledges and
agrees that the right to maintain the confidentiality of the Confidential
Information and the right to preserve the goodwill of the Corporation constitute
proprietary
E-78
rights which the Corporation is entitled to protect. Accordingly, SFCo covenants
and agrees with the Corporation that, save with the consent of the Corporation
it will not, during the term of this retainer by the Corporation or for a period
of ten years after the termination of this agreement, disclose any of the
Confidential Information to any person outside of the Corporation nor shall it
use the same for any purpose other than for the purposes of the Corporation
provided that SFCo shall not be liable for disclosure of the Confidential
Information upon the occurrence of one or more of the following events:
i. the Confidential Information becoming generally known to the public
other than through a breach of this agreement;
ii. the Confidential Information being lawfully obtained by SFCo from a
third party or parties without breach of this agreement by SFCo, as
shown by documentation sufficient to establish the third party as a
source of the Confidential information; and
iii. SFCo being required to make disclosure of the Confidential Information
by operation of law.
SFCo shall deliver to the Corporation, upon termination of its retainer
hereunder, or upon request, all documents, financial statements and information,
memoranda, notes, reports, records, reports, manuals, price lists,
correspondence, shareholder lists, customer lists, order forms, drawings and
other documents (and all copies thereof, whether in hard copy or in machine
readable form) relating to the business of the Corporation and all assets and
properties of the Corporation referenced therein, which it may then possess or
have under its control. SFCo agrees that all restrictions contained in this
clause are reasonable and valid in the circumstances and all defenses to the
strict enforcement thereof by the Corporation are hereby waived by SFCo.
9. Non-Solicitation
SFCo agrees that following the execution of this agreement with the
Corporation, it will not, directly or indirectly, during the term of this
agreement, any extension of the term of this agreement and at any time during
the period of three (3) years from the date of termination without the prior
written consent of the Corporation solicit or attempt to solicit away from the
Corporation any existing or prospective shareholders, investors, suppliers,
employees, customers, clients, investors, joint venture partners or vendors of
properties of any kind, or acquisition or merger candidates of the Corporation.
10. Validity of Covenants
If any covenant or provision herein is determined to be void or
unenforceable in whole or in part, it shall not be deemed to affect or impair
the validity of any other covenant or provision and the covenants and provisions
herein are hereby declared to be separate and distinct. SFCo hereby agrees that
all restrictions in this agreement are reasonable and valid and all defenses to
the strict enforcement thereof by the Corporation are hereby waived by SFCo.
11. Injunctive Relief
SFCo further agrees that the remedy at law for any breach by SFCo of the
confidentiality, non-competition or non-solicitation provisions of this
agreement will be inadequate and that the Corporation, on any application to a
court, shall be entitled to temporary and permanent injunctive relief against
Xxx Xxxx and SFCo without the necessity of proving actual damage to the
Corporation. SFCo agrees that
E-79
the breach of the confidentiality, non-competition or non-solicitation clauses
contained herein will result in irreparable damage to the Corporation which will
not be compensable by law through an award of damages.
12. Indemnity
The Corporation agrees to indemnify and hold SFCo, Xxx Xxxx and each and
every of the directors and officers of SFCo (hereinafter, the "Personnel")
harmless from and against any and all expenses, losses, claims, actions, damages
or liabilities, whether joint or several (including the aggregate amount paid in
reasonable settlement of any actions, suits, proceedings or claims), and the
reasonable fees and expenses of its counsel that may be incurred in advising
with respect to and/or defending any claim that may be made against SFCo to
which SFCo and/or its Personnel may become subject or otherwise involved in any
capacity under any statute or common-law or otherwise insofar as such expenses,
losses, claims, damages, liabilities or actions arise out of or are based,
directly, or indirectly upon SFCo fulfilling its obligations to the Corporation
pursuant to this agreement, provided that: (a) SFCo and/or the Personnel have
acted honestly and in good faith with a view to the best interests of the
Corporation and they have not aced negligently; and (b) in the case of a
criminal or a administrative action or proceeding that is enforced by a monetary
penalty, SFCo and/or the Personnel had reasonable grounds for believing that
its/his/their conduct was lawful.
13. Notice
Any notice in writing required to or permitted to be given to SFCo
hereunder shall be sufficiently given if delivered to SFCo, respectively,
personally or mailed by registered mail, postage prepaid, addressed to SFCo as
follows:
275311 Ontario Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
M511-3S5
Any notice in writing required or permitted to be given to the
Corporation hereunder may be given in the same fashion to the Corporation, as
follows:
MicroMem Technologies Inc.
0000 Xxxxxxx'x Xxxx, Xxxxx X
Xxxxx Xx, Xxx Xxxxxx
00000
and to
MicroMem Technologies Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X-0X0
Any such notice which is mailed shall be deemed to have been received by
SFCo or the Corporation, as the case may be, on the seventh day following the
date of mailing. Any such notice which is delivered personally or by courier
shall be deemed to have been received by SFCo or the
E-80
Corporation, as the case may be, on the same day that it is actually received at
the premises of the addressee as described above. Any address for the giving of
notices hereunder mayo be changed by notice in writing.
14. Governing Law
The provisions of this agreement shall be governed by and interpreted in
accordance with the laws of the Province of Ontario.
15. Successors and assigns
The provisions hereof, where the context permits, shall enure to the
benefit of and be binding upon the successors and permitted assigns of the
Corporation and SFCo, respectively, provided that the obligations any of the
parties hereto may not be assigned without the express prior written consent of
the other parties hereto.
16. Entire Agreement; Amendment; Headings
This agreement constitutes the entire understanding between the parties
with reference to the subject matter hereof and shall not be changed or modified
except by written instrument signed by each party. The headings used in this
agreement are solely for convenience and are not to be used in construing or
interpreting this agreement.
17. Independent Advice
SFCo hereby acknowledges that it has been given the opportunity to
obtain and it has obtained independent legal advice concerning the advisability
of entering into this agreement prior to executing this agreement.
18. Arbitration
(a) Should there be a breach of any covenant, representation and warranty
contained in this agreement at any time after the date of execution of
this agreement by a party hereto (the "Party in Breach"), then the
other party (the "Notifying Party") shall send written notice of such
breach (the "Notice") to the Party in Breach at the address set forth
below. The Party in Breach shall be entitled to 30 days from the date
of the Notice to rectify or cure the breach which is the subject of
the Notice. In the event that the breach has not been rectified or
cured within 30 days of the date of the Notice, then any continuing
dispute shall be referred for arbitration to a single arbitrator to be
appointed by the parties.
(b) Any party may refer any such matter to arbitration by written notice
to the other ("Arbitration Notice") and, within ten days after receipt
of the Arbitration Notice, the parties will agree on the appointment
of an arbitrator, who shall be capable of commencing arbitration
within 21 days of this appointment. No person will be appointed as an
arbitrator unless such person agrees in writing to act.
(c) If the parties cannot agree on a single arbitrator as provided in
clause (b), or if the person appointed is unwilling or unable to act,
any party may request the court to appoint a single arbitrator in
accordance with the Arbitranous Act of the Province of Ontario.
E-81
IN WITNESS WHEREOF this agreement has been executed by the parties
hereto on the 29th day of January, 1999.
SIGNED, SEALED AND DELIVERED
275311 ONTARIO INC.
Per:/s/ Xxx Xxxx
---------------------------
Name:
Title:
MICROMEM TECHNOLOGIES INC.
Per:/s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Per:/s/ Xxxx XxXxxxxxx
---------------------------
Name: Xxxx XxXxxxxxx
Title: Executive V.P.
- 7 -
E-82
