CONSULTING AGREEMENT
THIS AGREEMENT made as of the 10th day of March, 1999.
B E T W E E N:
MAST HOLDING (BERMUDA) LTD.
a corporation subsisting under the laws of Bermuda
(hereinafter called the "Mast")
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 Mast
----------------
Subject to the terms and conditions of this agreement, the Corporation
hereby retains Mast, and Mast hereby agrees, to: (i) provide to the Corporation
the services further described in section 2 hereof; and (ii) arrange for Xxxxxx
Xxxxxxxxx ("Xxxxxxxxx") to serve as a director and President of the Corporation;
all during the period commencing March 9, 1999 through to March 10, 2000.
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2. Duties
------
Mast and Xxxxxxxxx shall report to the Board of Directors (the "Board")
of the Corporation and Mast and Xxxxxxxxx shall perform such duties as may from
time to time be determined by or as may be assigned to them by the Board within
the scope of the following duties:
x. Xxxxxxxxx shall serve as the President and Chief Executive
Officer of the Corporation under the terms of this agreement;
ii. Xxxxxxxxx shall oversee the research and development of the
XXXXXX XX technology owned and licensed by the Corporation's
subsidiary, Pageant Technologies Incorporated ("MAGRAM") and
assist and advise the Corporation's board of directors and senior
management in negotiations with prospective purchasers,
manufacturers and licensees of the Corporation's XXXXXX XX
technology;
iii. Mast and Xxxxxxxxx shall oversee the sale, licensing and
exploitation of MAGRAM; and
iv. Such other services and work upon which the parties may mutually
agree.
3. Service
-------
During the term of this agreement, Mast shall faithfully serve the
Corporation and shall use its best efforts to promote the interests of the
Corporation and shall devote such portion of Xxxxxx Xxxxxxxxx'x working time to
the business and affairs of the Corporation as Mast shall deem necessary to
carry out the responsibilities of Mast and Xxxxxx Xxxxxxxxx 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 March 9, 2000 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 Xxxxxx Xxxxxxxxx. Xxxxxx
Xxxxxxxxx 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 Mast 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 Mast hereunder shall be wholly terminated, with
the exception of paragraphs 8 through 13 inclusive and the clauses specifically
contemplated to continue in
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full force and effect beyond termination of this agreement. Upon any such
termination, neither Mast nor Xxxxxx Xxxxxxxxx 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.
6. Remuneration
------------
As remuneration for the services to be rendered by Mast to the
Corporation hereunder, the Corporation shall pay Mast 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 Mast for 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 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
Rules 45-503 provided that in the event that the Corporation in 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 Mast the cash fee provided for in
sub-section 6(ii) above.
7. Extension of Contract
---------------------
If the Corporation wishes to extend this contract past March 9, 2000,
the Board shall notify Mast accordingly by December 31, 1999, whereupon, if Mast
desires to extend this contract, the parties shall negotiate the terms of the
extension of this contract.
8. Confidential Information
------------------------
Mast and Xxxxxxxxx acknowledges that in the course of Mast and Xxxxxxxxx
carrying out, performing and fulfilling their responsibilities to the
Corporation Mast and Xxxxxxxxx will
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have access to and will be entrusted with detailed confidential information
including without limitation financial information, shareholder lists,
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 of 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. Mast and Xxxxxxxxx
acknowledge and agree that the right to maintain the confidentiality of the
Confidential Information and the right to preserve the goodwill of the
Corporation constitute proprietary rights which the Corporation is entitled to
protect. Accordingly, Mast and Xxxxxxxxx covenant and agree with the Corporation
that, save with the consent of the Corporation they 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 they use the same for any
purpose other than for the purposes of the Corporation provided that Mast and
Xxxxxxxxx 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 Mast or
Xxxxxxxxx from a third party or parties without breach of this
agreement by Mast or Xxxxxxxxx, as shown by documentation
sufficient to establish the third party as a source of the
Confidential Information; and
iii. Mast and Xxxxxxxxx being required to make disclosure of the
Confidential Information by operation of law.
Mast and Xxxxxxxxx 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 they may then possess or
have under its control. Mast and Xxxxxxxxx agree 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 Mast and
Xxxxxxxxx.
9. Non-Solicitation
----------------
Mast and Xxxxxxxxx agree that following the execution of this agreement
with the Corporation, they will not, directly or indirectly, during the term of
this agreement, any
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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. Mast and Xxxxxxxxx
hereby agree 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 Mast and Xxxxxxxxx.
11. Injunctive Relief
-----------------
Mast and Xxxxxxxxx further agree that the remedy at law for any breach
by Mast and Xxxxxxxxx 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 Mast and Xxxxxxxxx without the necessity of
proving actual damage to the Corporation. Mast and Xxxxxxxxx agree that 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 Mast, Xxxxxx Xxxxxxxxx and
each and every of the directors and officers of Mast (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 Mast to which Mast 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 Mast fulfilling its
obligations to the Corporation pursuant to this agreement, provided that: (a)
Mast 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 acted negligently; and
(b) in the case of a criminal or a administrative action or proceeding that is
enforced by a monetary penalty, Mast and/or the Personnel had reasonable grounds
for believing that its/his/their conduct was lawful.
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13. Notice
------
Any notice in writing required to or permitted to be given to Mast and
Xxxxxxxxx hereunder shall be sufficiently given if delivered to Mast and
Xxxxxxxxx, respectively, personally or mailed by registered mail, postage
prepaid, addressed to Mast as follows:
Mast Holding (Bermuda) Ltd.
Xxxx Xxxxx, 00 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx XX 00
Attention: Ms. Xxxxxxxx Xxxxxx
------------------------------
- and -
Xxxxxx Xxxxxxxxx
*
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
Mast, Xxxxxxxxx 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 Mast, Xxxxxxxxx or the
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 may 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.
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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, Xxxxxxxxx and Mast, 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
------------------
Mast and Xxxxxxxxx hereby acknowledge that they have been given the
opportunity to obtain and they have 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 his 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 Arbitrations Act of the
Province of Ontario.
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IN WITNESS WHEREOF this agreement has been executed by the parties
hereto on the ____ day of March, 1999.
SIGNED, SEALED AND DELIVERED )
)
)
------------------------------ ) -----------------------------
WITNESS ) XXXXXX X. XXXXXXXXX
)
)
) MAST HOLDING (BERMUDA) LTD.
)
)
)
) Per:
) Name:
) Title:
)
)
)
) MICROMEM TECHNOLOGIES INC.
)
)
)
) Per:
) Name:
) Title:
)
)
)
) Per:
) Name:
) Title:
)
)
)
) Per:
) Name:
) Title:
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