EXHIBIT 10.18
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT made the 25th day of April, 2000 BY and AMONG;
THINKPATH.COM INC., a corporation incorporated under the laws of the
Province of Ontario (hereinafter referred to as "Purchaser")
OF THE FIRST PART
MICRO TECH PROFESSIONALS, INC., a corporation incorporated under the
laws of the State of Massachusetts (hereinafter referred to as "Micro
Tech")
OF THE SECOND PART
DENISE DUNNE-FUSHI, and individual with an address at 109 Brimstone
Lane, Sudbury, Massachusetts (hereinafter referred to as "Seller")
OF THE THIRD PART
WHEREAS, Purchaser desires to purchase from Seller all of the issued
and outstanding shares of the capital stock of Micro Tech;
NOW THEREFORE in consideration of the premises and the respective
covenants and agreements of the Parties herein contained, the sum of one dollar
now paid by each Party hereto to each of the other Parties hereto and other good
and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged by all of the Parties hereto), the Parties hereto covenant and
agree as follows:
ARTICLE 1
1.1 Definitions
-----------
Whenever used in this Agreement, unless there is something in the
subject matter or context inconsistent therewith, the following words and terms
shall have the respective meanings ascribed to them as follows:
"Affiliate" of any Person means any corporation, proprietorship,
partnership or business entity which directly or indirectly owns or
controls, is under common ownership or control with, or is owned or
controlled by, such Person.
"Affiliate" means this Agreement, including all Schedules and Exhibits
hereto and all instruments supplemental hereto or in amendment or
confirmation hereof or thereof.
"Applicable Law" means any domestic or foreign law, statute,
regulation, rule, policy, guideline, ordinance, by-law (including,
without limitation, any Environmental Law) applicable to the Purchaser,
the Business or operation of Micro Tech or the Purchased Shares.
"Business" means the temporary and permanent placement of employment
candidates in the fields of documentation and training in the New
England states as is presently carried on by Micro Tech.
"Business Day" means any day other than a Saturday, Sunday or holiday
on which the banks located in New York, New York and Boston,
Massachusetts are open for business.
"Closing" means the completion of the sale to and purchase by the
Purchaser of the Purchased Shares hereunder by the transfer and
delivery of documents of title thereto and the payment of the Purchase
Price therefor as contemplated herein.
"Closing Date" means the 25th day of April, 2000, or such other date as
the Parties may agree or as may be extended by the mutual consent of
Purchaser and Seller as the date upon which the Closing shall take
place.
"Closing Time" means 11:00 o'clock a.m. Eastern Standard time, on the
Closing Date or such other time on such date as the Parties may agree
as the time at which the Closing shall take place.
"Dollar" and "$" means lawful money of the United States of America.
"EBITA" means the earnings of Micro Tech before the deduction of
interest, taxes, depreciation and amortization as calculated in
accordance with GAAP.
"Effective Date" means January 1, 2000.
"Encumbrance" means any encumbrance of any kind, including, without
limitation, any option, pledge, security interest, lien, hypothecation,
charge, encumbrance, mortgage, hypothecation, trust, deemed trust,
trust deed, easement, lease, sub-lease, claim, right of way, covenant,
condition or restriction (whether on sale, transfer or disposition or
otherwise), whether imposed by agreement, law or otherwise, whether of
record or otherwise
"Environmental Law" means any law, statute, regulation, rule, policy,
guideline, order, consent decree, settlement agreement or governmental
requirement of the United States or any state, territory or local
government or any agency thereof, which relates to or otherwise imposes
liability or standards of conduct concerning discharges, releases or
2
threatened releases of noises, odors or any pollutants, contaminants or
hazardous or toxic wastes, substances or materials into ambient air,
water or land, or otherwise relating to the manufacture, processing,
generation, distribution, use, treatment, storage, disposal, clean-up,
transport or handling of pollutants, contaminants or hazardous or toxic
wastes, substances or materials.
"Environmental Permit" shall mean any Permit required by or pursuant to
any applicable Environmental Law.
"Financial Statements of Micro Tech" means the management prepared
financial statements of Micro Tech, consisting of balance sheets and
the statements of income, retained earnings and all notes thereto, all
of which have applied the accrual basis of accounting, as reviewed and
compiled by Adler & Blanchard, LLP.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as promulgated by the American Institute of
Certified Public Accountants and the Financial Accounting Standards
Board or any successor Institutes concerning the treatment of any
accounting matter.
"Governmental Authority" means the government of Canada or the United
States of America or any province, state, territory, region,
municipality, locality or other political sub-division thereof and any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, as the case
may be.
"Leased Properties" means all of the lands, buildings, facilities,
installations, fixtures, structures and improvements leased to Micro
Tech.
"Losses" means all liabilities (including, without limitation, all
liabilities relating to Taxes), losses, costs, damages, deficiencies,
penalties or expenses (including, without limitation, attorneys' and
accountants' fees and expenses in costs of investigation and litigation
and any judgement, settlement or compromise relating thereto and
interest, penalties or other amounts paid in respect of judgements,
settlements or compromises).
"Material Adverse Effect" means a negative change in, or effect on the
operations, affairs, financial condition, results of operations assets,
liabilities, reserves or any other aspect of the corporation of the
business of the corporation that results in a negative adverse effect
on or a negative adverse change in any such aspect of the corporation
or the business of the corporation.
"Material Contract" means any contract entered into by Micro Tech
having an annual dollar value greater than fifty thousand dollars
($50,000.00) or a term in excess of twenty-four months, excepting
therefrom all financing agreements and Encumbrances.
3
"Micro Tech" means Micro Tech Professionals, Inc., a Massachusetts
corporation, having its principal offices at 375 Totten Pond Road,
Suite 200, Waltham, Massachusetts 02451, tel (781) 890-8002, fax (781)
890-3355.
"Parties" means Purchaser, Micro Tech, and Seller collectively, and
"Party" means any one of them.
"Permits" means all of the permits, licenses, consents, approval,
certificates, variances, interim permits, permit applications or other
authorization required by or pursuant to Applicable Law.
"Person" means any individual, corporation, partnership, limited
partnership, trustee or trust or unincorporated association, and
pronouns have a similarly extended meaning.
"Prime" means the prime rate of interest as reported from time to time
in The Wall Street Journal.
"Purchaser" means ThinkPath.com Inc., a corporation formed under the
laws of the Province of Ontario, having its corporate offices at 55
University Avenue, Suite 505, Toronto, Ontario Canada M5J 2H7 and any
successor corporation.
"Purchaser's Counsel'" means Gersten, Savage & Kaplowitz, LLP, 101 East
52nd Street, New York, New York 10022-6018, attention: Christopher J.
Kelly, Esq., tel (212) 752-9700, fax (212) 813-9768.
"Purchase Price" means the purchase price to be paid by the Purchaser
for the Purchased Shares as provided in Article 2 hereof.
"Purchased Shares" means one thousand (1,000) issued and outstanding
common shares of Micro Tech owned by Seller which represents one
hundred percent (100%) of the total issued and outstanding shares of
common stock of Micro Tech.
"Seller" means Denise Dunne-Fushi, an individual who resides at 109
Brimstone Lane, Sudbury, Massachusetts 01766.
"Seller's Counsel" means the law firm of Drohan, Hughes & Hofman, P.C.,
of 175 Derby Street, Suite 30, Hingham, Massachusetts, 02043,
Attention: James M. Hughes, Esq., counsel, tel (781) 749-7200, fax
(781) 740-4335.
"Taxes" means taxes, charges, fees, duties, levies or other
assessments, including (without limitation) income, gross receipts, net
proceeds, ad valorem, turnover, real and personal (tangible and
intangible), sales, use, franchise, excise, value added, goods and
services, stamp, leasing, lease, user, transfer, fuel, excess profits,
payroll, occupation,
4
interest, equalization, windfall profits, severance and employees'
withholding, unemployment, employer health and social security taxes
which are imposed by the United States of America and any state,
territory, region, municipality or local or foreign government or any
agency thereof, and such term shall include any interest, penalties or
additions to tax attributable to such Taxes.
Terms defined in the preamble to this Agreement shall have the same meanings
herein as are ascribed thereto in the preamble.
1.2 Gender and Number
-----------------
Words importing the singular include the plural and vice versa; words
importing gender include all genders.
1.3 Entire Agreement
----------------
This Agreement, including the Schedules and Exhibits hereto, together
with the agreements and other documents to be delivered pursuant hereto,
constitute the entire agreement between the Parties pertaining to the subject
matter hereof and supersede all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the Parties and there are no
warranties, representations or other agreements between the Parties in
connection with the subject matter hereof except as specifically set forth
herein and therein.
1.4 Waivers, etc.
-------------
No supplement, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the Party to be bound thereby. No
waiver of any of the provisions of this Agreement, in whole or in part, shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
1.5 Other Words and Phrases
-----------------------
In this Agreement, unless otherwise expressly provided, (i) the words
"hereof", "herein", "hereto" and "hereunder" and words of similar import refer
to this Agreement as a whole and not to any particular Article, Section,
Subsection, paragraph or other subdivision, and (ii) all references to
designated "Articles", "Sections", "Subsections", "paragraphs" or "other
subdivisions" are to the designated Articles, Sections, Subsections, paragraphs
and other subdivisions of this Agreement.
1.6 Headings
--------
The Article and Sections headings contained herein are included solely
for convenience of reference, are not intended to be full or accurate
descriptions of the content thereof and shall not be considered part of this
Agreement.
5
1.7 Governing Law
-------------
This Agreement and the rights, obligations and relations of the Parties
shall be governed by and construed in accordance with the laws of the State of
New York and the federal laws of the United States of America applicable
therein, and the courts of the State of New York shall have exclusive
jurisdiction to entertain any action in connection with this Agreement.
1.8 Currency
--------
Unless otherwise specified, all reference to currency herein are deemed
to mean lawful money of the United States of America, and all amounts to be paid
or calculated pursuant to this Agreement are to be paid or calculated in lawful
money of the United States of America.
ARTICLE 2
PURCHASE AND SALE
-----------------
2.1 Purchase Price and Payment
--------------------------
Subject to the terms and conditions set forth in this Agreement, at the
Closing, the Seller shall sell, assign and transfer to the Purchaser and the
Purchaser shall purchase, accept and acquire the Purchased Shares. The Purchase
Price for the Purchased Shares shall be an aggregate of four million five
hundred thousand dollars ($4,500,000), subject to adjustment, to be paid
according to the following schedule:
(a) First Installment - On the Closing Date - At the Closing, if,
based upon the Financial Statements of Micro Tech for the year
ended December 31, 1999, EBITA is equal to or greater than
seven hundred forty thousand dollars ($740,000), Purchaser
shall pay to Seller an aggregate of two million five hundred
thousand dollars ($2,500,000) as follows:
(i) one million two hundred fifty thousand dollars
($1,250,000) in immediately available funds, by wire
transfer;
(ii) issue to Seller a seven hundred fifty thousand dollar
($750,000) principal amount unsecured promissory note
in the form attached as Exhibit A attached hereto
(the "Initial Note"). The Initial Note shall be for a
term of three years from the date if issuance and
shall bear interest at rate equal to 1/2% above
Prime. Principal and interest on the Initial Note
shall be paid on a semi-annual basis. Payment of the
Initial Note shall be guaranteed by both Seller and
Micro Tech; and
6
(iii) issue to Seller that number of shares of Purchaser's
common stock, no par value ("Common Shares") equal to
five hundred thousand dollars ($500,000) divided by
the lower of: (A) $3.75; or (B) the average of the
last sale price as quoted on the Nasdaq SmallCap
Market for the ten (10) trading days prior to the
Closing Date.
(b) Second Installment - Upon Completion of the December 31, 2000
year end audit of Micro Tech - Within sixty (60) days of the
completion of the December 31, 2000 year end audit of Micro
Tech, if, based on the Financial Statements of Micro Tech for
the year ended December 31, 2000, EBITA is equal to or greater
than eight hundred fifty thousand dollars ($850,000),
Purchaser shall pay to Seller an aggregate of $2,000,000 as
follows:
(i) eight hundred seventy five thousand dollars
($875,000) in immediately available funds, by wire
transfer;
(ii) issue to Seller a five hundred thousand dollar
($500,000) principal amount unsecured promissory note
in the form attached as Exhibit B attached hereto
(the "Second Note"). The Second Note shall be for a
term of three years from the date of issuance and
shall bear interest at rate equal to 1/2% above
Prime. Principal and interest on the Second Note
shall be paid on a semi-annual basis. Payment of the
Second Note shall be guaranteed by both Seller and
Micro Tech; and
(iii) issue to Seller that number of Common Shares of
Purchaser's equal to six hundred twenty five thousand
dollars ($625,000) divided by the lower of: (A)
$3.75; or (B) the average of the last sale price as
quoted on the Nasdaq SmallCap Market for the ten (10)
trading days prior to the Closing Date.
(c) Adjustment. The Purchase Price for the particular Installment
shall be reduced at the rate of five dollars ($5) for every
one dollar ($1) below the minimum threshold amount of EBITA as
outlined in Sections 2.1 (a) and (b) above. Any such reduction
in the Purchase Price for the particular Installment shall be
allocated on a pro rata basis between Initial Note and/or the
Second Note and the Common Shares; however, any expenses
incurred by Micro Tech which are beyond the control of Seller,
acting in the capacity of an officer of Micro Tech, shall not
be charged to EBITA for purposes of calculating any such
adjustment.
By way of example, if EBITA for the year ended December 31,
1999 is equal to seven hundred thousand dollars ($700,000),
the First Installment of two million five hundred thousand
dollars ($2,500,000) shall be reduced to two million three
hundred thousand dollars ($2,300,000) and shall be paid as
follows: (i) one million two hundred fifty thousand dollars
($1,250,000) in cash; (ii) the issuance of the Initial Note in
the principal amount of seven hundred thirty thousand dollars
($730,000); and (iii) the issuance of ninety five thousand
(95,000) Common Shares.
7
2.2 Action by Seller and Purchaser at the Closing Time
--------------------------------------------------
At the Closing, the Seller and the Purchaser shall take the following
action:
(a) Delivery of Certificates, etc. - The Seller shall transfer and
deliver to the Purchaser at the Closing share certificates
representing the Purchased Shares duly endorsed in blank for
transfer or accompanied by an irrevocable security transfer
power of attorney duly executed in blank, in either case by
the holder of record thereof. The Seller shall take such steps
as shall be necessary to cause Micro Tech to, and Micro Tech
shall, enter the Purchaser or its nominee upon the books of
Micro Tech as the holder of the Purchased Shares and to issue
one or more share certificates to the Purchaser or its nominee
representing the Purchased Shares;
(b) Payment to the Seller - The Purchaser shall pay to Seller the
First Installment as outlined in Section 2.1 (a).
2.3 Place of Closing
----------------
The Closing shall take place at the Closing Time at the offices of
Micro Tech.
2.4 Extension of Closing
--------------------
The Purchaser and the Seller may extend the Closing by up to thirty
(30) days upon mutual agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER AND MICRO TECH
-------------------------------------------------------
Seller and Micro Tech jointly and severally represent to the Purchaser
as follows:
3.1 Organization and Valid Existence: Micro Tech
--------------------------------------------
Micro Tech is a corporation duly incorporated, organized and validly
existing under the laws of the State of Massachusetts. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereunder have been or shall by the Closing Date be duly authorized by all
necessary corporate action on the part of Micro Tech. Attached herewith as
Schedule 3.1 is a copy of the articles of incorporation of Micro Tech.
8
3.2 Enforceability of Obligations
-----------------------------
This Agreement constitutes a valid and binding obligation of each of
Seller and Micro Tech enforceable against each of them in accordance with its
terms, subject to limitations with respect to enforcement imposed by law in
connection with bankruptcy or similar proceedings and to the extent that
equitable remedies such as specific performance and injunction are in the
discretion of the court from which they are sought. The execution, delivery and
performance of this Agreement and all other agreements, instruments,
certificates and documents contemplated hereby by each of Seller and Micro Tech
do not, on the date hereof, and will not, on the Closing Date:
(a) violate any Applicable Laws;
(b) except as set forth on Schedule 3.2 attached hereto, violate
or conflict, or result in a breach of, or constitute a default
(or event, which with or without notice or lapse of time or
both, would constitute a default) under, or permit
cancellation of, or result in the creation of any Encumbrance
upon any of the Micro Tech's assets, the assets used by Micro
Tech in the Business, any requisite licenses, Permits or
authorizations held by Micro Tech to conduct its Business or
own its assets, or the Purchased Shares under any of the
terms, conditions or provisions of any contract or agreement
to which Seller is a party or by which Seller or any of the
Micro Tech assets, the assets used in the Micro Tech Business
or the Purchased Shares are bound, or would result in a breach
of, or default under any order of any court, Governmental
Authority or regulatory body;
(c) cause the acceleration of the maturity of any indebtedness of
Micro Tech or any indebtedness secured by the assets of Micro
Tech, the assets used in the Micro Tech Business or the
Purchased Shares;
(d) violate or conflict with any provisions of the articles of
by-laws of Micro Tech or any director's or shareholder's
resolutions of Micro Tech.
3.3 Right to Sell - Seller
(a) is the sole and beneficial owner of the Purchased Shares,
which shares constitute all the issued and outstanding shares
in the capital of Micro Tech;
(b) has the exclusive right to dispose of the Purchased Shares as
herein provided and such disposition will not violate,
contravene, breach or offend against or result in any default
under any indenture, mortgage, lease, agreement, instrument,
charter or by-law provision or Applicable Law to which Seller
or by which Seller is bound or affected;
9
(c) is the holder of record of all the Purchased Shares, free and
clear of Encumbrances or rights of others (other than the
rights of the Purchaser hereunder) and no person (other than
the Purchaser hereunder) has any agreement, option or any
rights capable of becoming an agreement or option for the
acquisition of the Purchased Shares; and
(d) upon transfer to the Purchaser at Closing of certificates
representing such Purchased Shares, the Purchaser shall
receive full title to the Purchased Shares free and clear of
all Encumbrances.
3.4 Licenses, Registrations and Compliance
--------------------------------------
Micro Tech is registered, licensed or otherwise qualified as a
corporation to do business in each jurisdiction in which the nature of is
business or the property owned or leased by it makes such registrations,
licensing or other qualification necessary, and such registrations, licenses or
qualifications (as the case may be) are in good standing. Micro Tech is not in
violation of any Applicable Law, which violation could have a Material Adverse
Effect, and, without limiting the generality of the foregoing, Micro Tech is not
in breach of any Environmental Law. Each jurisdiction in which Micro Tech
carries on business and a brief description of the nature of such operations and
each jurisdiction in which tangible assets owned or used by Micro Tech are
located is set forth in Schedule 3.4 attached hereto.
3.5 Subsidiaries of Micro Tech
--------------------------
Micro Tech has no subsidiaries.
3.6 Capitalization
--------------
The authorized and issued share capital of Micro Tech is set forth in
Schedule 3.6 attached hereto. All such issued share capital has been duly and
validly issued and is outstanding as fully paid and non-assessable. Except as
set out in Schedule 3.6 herein, no options, warrants or other rights to purchase
shares or other securities of either Micro Tech or other rights to purchase
shares or other securities of Micro Tech have been authorized or agreed to be
issued or are outstanding. Micro Tech is not subject to any obligations
(contingent or otherwise) to re-purchase or other wise retire or acquire any of
its shares.
3.7 Financial Statements
--------------------
The Financial Statements of Micro Tech for the year ended December 31,
1999 and for the three months ended March 31, 2000 as reviewed and compiled by
Adler & Blanchard, LLP, are true and correct and have been prepared in
accordance with GAAP applied on a basis consistent with that of the preceding
period. The Financial Statements of Micro Tech for the year ended December 31,
10
1999 and the three months ended March 31, 2000 present a true and complete
statement of the financial condition and assets and liabilities of Micro Tech as
at December 31, 1999 and March 31, 2000 and the other statements comprising the
Financial Statements of Micro Tech for the year ended December 31, 1999 and the
three months ended March 31, 2000 accurately set forth the results of the
operations of Micro Tech and the source and application of the funds thereof
throughout the period covered thereby. The statement of stockholders' equity
included in the Financial Statements of Micro Tech for the year ended December
31, 1999, represents that Micro Tech has an amount of stockholders' equity equal
to at least eight hundred thousand dollars ($800,000), which number shall not
include non-tangible assets. Any dollar amount in excess of eight hundred
thousand dollars ($800,000) of shareholders' equity will be paid to Seller.
3.8 Absence of Undisclosed Liabilities
----------------------------------
Except to the extent reflected or reserved against in the Financial
Statements of Micro Tech for the three months ended March 31, 2000 (including
the notes thereto) or incurred subsequent to the date thereof and disclosed
either in this Agreement or in Schedule 3.8 and except as incurred in the
ordinary and usual course of business or insured against, Micro Tech has no
outstanding indebtedness or any liabilities or obligations (whether known or
unknown, accrued, absolute, contingent or otherwise) of a nature customarily
reflected or reserved against in a balance sheet (including the notes thereto)
prepared in accordance with GAAP.
3.9 Tax Matters
-----------
(a) Micro Tech has duly and timely filed or has received a valid
extension with respect to all federal, state and local income,
franchise, capital, sales or use, goods and services, excise,
fuel, payroll, property or other tax returns required by any
Applicable Law to be filed by it and all liabilities required
to be paid by Micro Tech on account of Taxes prior to the date
hereof have been duly paid.
(b) Micro Tech has not received from any Governmental Authority
any assessment, re-assessment or notice of underpayment of any
Taxes or other charges and no such notice is reasonably
expected.
(c) There are no actions, suits, proceedings, investigations or
claims now threatened or pending against Micro Tech with
respect to Taxes, governmental charges or assessments, or any
matters under discussion with any Governmental Authority
relating to Taxes, governmental charges or assessments
asserted by such authority.
(d) No agreements, consent or other arrangements extending or
waiving the time limited for the filing of any tax return by,
or the payment of any Taxes, governmental charge or deficiency
against Micro Tech or the re-assessment of any Taxes, or any
statutes of limitations related thereto have been filed with
respect to Micro Tech for any fiscal year.
11
(e) Micro Tech has withheld from each payment made to any of its
officers, directors, former directors and employees, the full
amount of all Taxes and other deductions (including without
limitation, income taxes, unemployment, disability, and other
required taxes and contributions) required to be withheld and
has paid the same together with the employer's share of same,
if any (to the extent required to be paid so no such amount is
past due), to the proper tax or other receiving officers
within the prescribed times and has filed, in complete and
accurate form, all information and other returns required
pursuant to any applicable legislation within the prescribed
times.
(f) Micro Tech has paid, collected and remitted all Taxes which
are due and payable, collectible or remittable, as applicable,
by it on or before the date hereof. Adequate provision has
been made in the Financial Statements of Micro Tech for the
year ended December 31, 1999 and for the three months ended
March 31, 2000 for all Taxes for the period covered. Micro
Tech has no liability for Taxes other than those provided for
in the Financial Statements of Micro Tech and those arising in
the ordinary course of business since December 31, 1999.
3.10 Absence of Changes
------------------
Since the Effective Date there has not been:
(a) any material changes in the condition or operations of the
Micro Tech, Micro Tech's assets or the financial condition of
Micro Tech other than changes in the ordinary and normal
course of business, none of which has or would be expected to
have a Material Adverse Effect; or
(b) any damage, destruction or loss, labor troubles or other
event, development or condition of any character (whether or
not covered by insurance) affecting the Micro Tech Business,
the assets of Micro Tech or the properties or future prospects
of Micro Tech which has or would be expected to have a
Material Adverse Effect.
3.11 Absence of Unusual Transactions
-------------------------------
(a) Since the Effective Date has not:
(i) transferred, assigned, sold, leased or otherwise
disposed of any of the assets of Micro Tech or
canceled any debts or claims except in the ordinary
and usual course of business;
12
(ii) incurred or assumed any obligation or liability
(fixed or contingent), except those listed in
Schedule 3.11(a) attached hereto and except unsecured
current obligations and liabilities incurred in the
ordinary and normal course of business and consistent
with past practice;
(iii) except as disclosed in Schedule 3.11(a), issued or
sold any shares in its capital or any warrants,
bonds, debentures or other securities of Micro Tech
or issued, granted or delivered and right, option or
other commitment for the issuance of any such or
other securities;
(iv) discharged or paid any Encumbrance, or paid any
obligation or liability (fixed or contingent) other
than liabilities incurred since the Effective Date in
the ordinary and normal course of business;
(v) except as disclosed in Schedule 3.11(a), declared or
made any payment of any dividend or other
distribution in respect of any shares in its capital
or purchased or redeemed any such shares thereof or
effected any subdivision, consolidation or
reclassification of any such shares;
(vi) suffered any damage, destruction, operating loss or
any extraordinary loss, or waived, cancelled or
written off any rights of substantial value, or
entered into any commitment or transaction not in the
ordinary and usual course of business where such
loss, rights, commitment or transaction is or would
have a Material Adverse Effect on Micro Tech;
(vii) except those listed in Schedule 3.11(a), amended or
changed or taken any action to amend or change its
articles of incorporation or by-laws;
(viii) made any general wage or salary increases in respect
of personnel which it employs, other than increases
in the ordinary and normal course of business or
entered into any severance agreements;
(ix) mortgaged, pledged, subjected to Encumbrance or
otherwise encumbered any of the assets or property of
Micro Tech, whether tangible or intangible except in
the ordinary and normal course of business; or
(x) authorized or agreed or otherwise become committed to
do any of the foregoing.
3.12 Leased Equipment
----------------
Schedule 3.12 attached hereto sets forth a true and substantially
complete list of all equipment, other personal property and fixtures in the
possession or custody of Micro Tech, which, as of the Effective Date, is leased
or held under license or similar arrangement and of the leases, licenses,
agreements and other documentation relating thereto. Additional equipment has
been or may be leased in the ordinary course of business after the Effective
Date.
13
3.13 Collectability of Accounts Receivable
-------------------------------------
The accounts receivable as shown on the Financial Statements of Micro
Tech for the year ended December 31, 1999 are collectible to within the full
amount less the reserve shown on such Financial Statements.
3.14 Leases of Real Property
-----------------------
All leases of real property and all interests held by Micro Tech as
lessee under real property leases are reduced to writing and are recorded on the
books of Micro Tech.
All rental and other payments required to be paid by Micro Tech as
lessee are paid on a timely basis.
Such leases are in full force and effect without amendment thereto and
neither Micro Tech, nor the other party thereto, is otherwise in default in
meeting its obligations contained in any such lease.
3.15 Real Property
-------------
Except as disclosed on Schedule 3.15 attached hereto, Micro Tech does
not own any real property in fee simple.
3.16 Condition of Assets
-------------------
All assets of Micro Tech used in or in connection with the Micro Tech
Business are in good condition, repair and (where applicable) proper working
order, reasonable wear and tear excepted.
3.17 Employment Contracts
--------------------
Except as set out in Schedule 3.17 attached hereto, Micro Tech does not
have any union or collective labor, pension, deferred profit sharing, stock
option or other similar agreement nor do they have any written contracts of
employment with any employees or any oral contracts of employment which are not
terminable on the giving of reasonable notice in accordance with applicable law.
There is not now any circumstances or conduct which could result in the filing
of an unfair labor practice complaint, and there exists no event or condition
which with the giving of notice or the passage of time would constitute a breach
or default thereunder by any party thereto.
14
3.18 Material Contracts
------------------
All Material Contracts of Micro Tech have been reduced to writing. The
Material Contracts are all in full force and effect without amendment thereto
and no material default exists in respect thereof on the part of any of the
parties thereto. Such contracts and agreements include all the presently
outstanding material contracts entered into by Micro Tech in the course of
carrying on its Business and all quotations, orders or tenders for such
contracts which remain open for acceptance. To the best of the knowledge,
information and belief of Seller, Micro Tech has the capacity, including the
necessary personnel, equipment and supplies, to perform all of its obligations
thereunder.
3.19 Pension Plans
-------------
Except for a 401(k) plan, there are no pension plans established by or
for Micro Tech for its employees.
3.20 Absence of Guarantees
---------------------
Except as disclosed in Schedule 3.20 attached hereto, Micro Tech has
not given or agreed to give, or is a party or bound by, any guarantee of
indebtedness or other obligations of third parties or any other commitment by
which Micro Tech is, or is contingently, responsible for such indebtedness or
other obligation.
3.21 Litigation
----------
Except as disclosed in Schedule 3.21 attached hereto, there is no suit,
action, litigation, arbitration proceeding or governmental proceeding, hearing
before an administrative tribunal, including appeals and applications for
review, in progress, pending or, to the best of the knowledge, information and
belief (after due enquiry) of the senior officers of Micro Tech, threatened
against or relating to Micro Tech or affecting its properties or Business which,
if determined adversely to Micro Tech, might have a Material Adverse Effect on
the properties, Business, future prospects or financial condition of Micro Tech.
Except as disclosed in Schedule 3.21, there is not presently outstanding against
Micro Tech, any judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or arbitrator.
3.22 Employees
---------
Micro Tech shall after the execution of this Agreement deliver to the
Purchaser a list of all personnel employed or engaged thereby whose annual rate
of remuneration exceeds fifty thousand dollars ($50,000).
15
3.23 Insurance
---------
Micro Tech has, since its date of incorporation, maintained and
currently maintains such policies of insurance, issued by responsible insurers,
as is appropriate to the Micro Tech Business, the property and the assets of
Micro Tech, in such amounts and against such risks as are customarily carried
and insured against by owners of comparable businesses, properties and assets;
to the knowledge of Seller, all such policies of insurance are in full force and
effect and Micro Tech is not in default, whether as to the payment of premium or
otherwise, under the terms of any such policy.
3.24 Vehicular Equipment
-------------------
Schedule 3.24 attached hereto contains a list of all vehicular
equipment owned or leased by Micro Tech as of the Effective Date. Such vehicular
equipment is in roadworthy condition.
3.25 Copies of Agreements, etc.
--------------------------
True, correct and complete copies of all mortgages, leases, agreements,
instruments and other documents listed in Schedules hereto, and of the policies
of insurance referred to herein are located at the principal offices of Micro
Tech and full and complete copies of which shall be made available to the
Purchaser after the execution of this Agreement.
3.26 Corporate Records
-----------------
Other than as set out in Schedule 3.26 attached hereto, the corporate
records and minute books of Micro Tech contain complete and accurate copies of
all by-laws, minutes of all meetings and resolutions of the directors and
shareholders of Micro Tech; all such meetings were duly called and held, all
such by-laws and resolutions were duly passed and the share certificate books,
registers of shareholders, registers of transfers and registers of directors of
Micro Tech are complete and accurate in all material respects.
3.27 Books of Account
----------------
The books and records of account of Micro Tech, fairly and correctly
set out and disclose in all material respects and in accordance with the cash
basis method of accounting, consistently applied, the financial position of
Micro Tech as of the date hereof and all material financial transactions of
Micro Tech have been accurately recorded in such books and records.
3.28 Compliance with Environmental Laws
----------------------------------
With respect to the properties leased by Micro Tech, since the
commencement date of these leases, Micro Tech is in compliance with and has
always been in compliance with all Environmental Laws.
16
3.29 Brokers' and Finders' Fees
--------------------------
Neither Seller nor Micro Tech has incurred, nor will any of them incur,
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or investment bankers' fees or any similar charges in connection
with this Agreement or the transactions contemplated hereby, except for the fee
to be paid by Seller for services rendered in connection with the this Agreement
and the transactions contemplated hereby pursuant to a fee agreement between
Seller and Adler & Blanchard Financial Group, LLC, which fee shall be paid by
Seller.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
The Purchaser hereby represents and warrants to Seller as follows:
4.1 Organization and Valid Existence
--------------------------------
The Purchaser is a corporation duly incorporated and organized and is
validly existing under the laws of the Province of Ontario and has all necessary
corporate power, authority and capacity to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereunder have
been or by the Closing Date will be duly authorized by all necessary corporate
action on the part of the Purchaser.
4.2 Enforceability of Obligations
-----------------------------
This Agreement constitutes a valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms, subject, however,
to limitations with respect to enforcement imposed by law in connection with
bankruptcy or similar proceedings and to the extent that equitable remedies such
as specific performance and injunction are in the discretion of the court from
which they are sought.
4.3 Absence of Conflicting Agreements
---------------------------------
The Purchaser is not a party to, bound or affected by or subject to any
indenture, mortgage, lease, agreement, instrument, charter or by-law provision,
statute, regulation, order, judgment, decree or law which would be violated,
contravened or breached by, or under which any default would occur, as a result
of the execution and delivery of this Agreement or the consummation of any of
the transactions provided for herein.
17
4.4 Litigation
----------
There is no suit, action, litigation, arbitration proceeding or
governmental proceeding, including appeals and applications for review, in
progress, pending or, to the best of the knowledge, information and belief
(after due enquiry) of the senior officers of the Purchaser, threatened against
or involving the Purchaser or any judgment, decree, injunction, rule or order of
any Court, governmental department, commission, agency, instrumentality or
arbitrator which, in any such case, might adversely affect the ability of the
Purchaser to enter into this Agreement or to consummate the transactions
contemplated hereby. The Purchaser is not aware of any existing ground on which
any such action, suit or proceeding may be commenced with any reasonable
likelihood of success.
4.5 Employment Agreement with Seller
--------------------------------
The Purchaser shall, prior to the Closing Date, enter into an
employment agreement with Seller in the form attached hereto as Exhibit C.
4.6 Due Diligence
-------------
Purchaser shall conduct its due diligence subject to the following
limitations. The Purchaser shall not copy any of Seller's or Micro Tech's
private documents without prior written consent of the appropriate party. All
examinations of documents shall take place at the offices of Micro Tech, or such
other place as the parties may agree to, all under supervision of Micro Tech's
personnel. In the event that this Agreement is not completed for any reason
whatsoever, the Purchaser shall not use the information about Seller to compete
with Micro Tech, nor shall the Purchaser solicit the employment of any employee
or subcontractor of Micro Tech or otherwise interfere in the Business of Micro
Tech
4.7 Issuance of Common Shares
-------------------------
The Common Shares issuable to Seller pursuant to this Agreement have
been duly authorized and reserved for issuance, and, when issued pursuant to
this Agreement, will be duly and validly authorized and issued, fully paid an
non-assessable and not subject to any preemptive rights or other rights of
stockholders of Purchaser.
4.8 Board Approval
--------------
The Board of Directors of Purchaser has approved this Agreement and the
transactions contemplated hereby.
18
ARTICLE 5
CONDITIONS PRECEDENT TO THE PERFORMANCE
BY THE PURCHASER OF ITS OBLIGATIONS UNDER THIS AGREEMENT
--------------------------------------------------------
The obligations of the Purchaser to complete the purchase of the
Purchased Shares hereunder shall be subject to the satisfaction of, or
compliance with, in all material respects, at or before the Closing Time, each
of the following conditions precedent (each of which is hereby acknowledged to
be inserted for the exclusive benefit of the Purchaser any may be waived by it
in whole or in part);
5.1 Truth and Accuracy of Representations of Seller and Micro Tech at the
Closing Time
---------------------------------------------------------------------
All of the representations and warranties of each of Seller and Micro
Tech made in or pursuant to this Agreement, including, without limitation, the
representations and warranties made and set forth in Article 3 hereof, shall be
materially true and correct as at the Closing Time and with the same effect as
if made at and as of the Closing Time (except as such representations and
warranties may be affected by the occurrence of events or transactions expressly
contemplated and permitted hereby or by transactions in the ordinary and normal
course of business), and the Purchaser shall have received a certificate from
the President or other person exercising the functions of chief executive
officer of Micro Tech a certificate from Seller confirming, to the best of her
knowledge, information and belief (after due inquiry) the truth and correctness
of the representations and warranties of each of Micro Tech and Seller.
5.2 Performance of Obligations
--------------------------
Each of Micro Tech and Seller shall have performed or complied with, in
all material respects, Micro Tech's and Seller's obligations, covenants and
agreements hereunder.
5.3 Receipt of Closing Documentation
--------------------------------
All documentation relating to the due authorization and completion of
the sale and purchase hereunder of the Purchased Shares and all actions and
proceedings taken on or prior to the Closing in connection with the performance
by each of Micro Tech's and Seller's obligations under this Agreement shall be
satisfactory to the Purchaser and the Purchaser's Counsel, acting reasonably,
and the Purchaser shall have received copies of all such documentation or other
evidence as it may reasonably request in order to establish the consummation of
the transactions contemplated hereby and the taking of all corporate proceedings
in connection therewith in compliance with these conditions, in form (as to
certification and otherwise) and substance satisfactory to the Purchaser and the
Purchaser's Counsel.
5.4 No Fire Damage
--------------
No substantial damage by fire or other hazard to the assets of Micro
Tech shall have occurred from the Effective Date to the Closing Date which is
not adequately insured against or which has caused a cessation of business for
more than seven (7) days if insured against.
19
5.5 Litigation
----------
On the Closing Date, there shall be no litigation, governmental
investigation or proceeding pending or threatened for the purpose of enjoining
or preventing the consummation of any of the transactions contemplated by this
Agreement or otherwise claiming that such consummation is improper.
5.6 Material Change
---------------
Since the Effective Date there shall have been no:
(a) Nothing shall have occurred that has or could cause a Material
Adverse Effect; and
(b) Material loss or damage not covered by insurance to any of the
assets of Micro Tech.
5.7 Due Diligence Review
--------------------
The Purchaser shall no later than seventy-five days after the Effective
Date have completed their due diligence review having been satisfied with the
results of its investigation and review of the business, operations, assets,
liabilities, result of operations, cash flows, conditions (financial and
otherwise) and prospects of, and other matters relating to Micro Tech.
5.8 Certificates
------------
Seller shall have delivered to the Purchaser share certificates
representing all of the Purchased Shares, which share certificates shall have
been duly endorsed in blank for transfer or accompanied by duly executed stock
powers.
5.9 Board Approval
--------------
Purchaser shall have obtained approval of its Boards of Directors with
respect to this Agreement and the transactions contemplated hereby.
5.10 Opinion of Seller's Counsel
---------------------------
Purchaser shall have received from Seller's Counsel, an opinion, dated
the Closing Date, as to the matters set forth in Article 3.
5.11 Employment Agreement with Seller
--------------------------------
On the Closing Date, Seller shall have executed and employment
agreement with the Purchaser in the form of Exhibit C attached hereto.
20
ARTICLE 6
CONDITIONS PRECEDENT TO THE PERFORMANCE BY
SELLER OF THE OBLIGATIONS UNDER THIS AGREEMENT
----------------------------------------------
The obligations of Seller to complete the sale of the Purchased Shares
hereunder shall be subject to the satisfaction of or compliance with, at or
before the Closing Time, each of the following conditions precedent (each of
which is hereby acknowledged to be inserted for the exclusive benefit of Seller
and may be waived by Seller in whole or in part);
6.1 Truth and Accuracy of Representations of Purchaser at Closing Time
------------------------------------------------------------------
All of the representations and warranties of the Purchaser made in or
pursuant to this Agreement, including without limitation the representations and
warranties made by the Purchaser and set forth in Article 4 hereof, shall be
true and correct as at the Closing Time and with the same effect as if made at
and as of the Closing Time and Seller shall have received a certificate from a
duly authorized senior officer of the Purchaser confirming, to the best of his
knowledge, information and belief (after due inquiry), the truth and correctness
of the representations and warranties of the Purchaser contained herein.
6.2 Performance of Obligations
--------------------------
The Purchaser shall have performed or complied with, in all respects,
all of its obligations, covenants and agreements hereunder.
6.3 Receipt of Closing Documentation
--------------------------------
All documentation relating to the due authorization and completion of
the sale and purchase hereunder of the Purchased Shares and all actions and
proceedings taken on or prior to the Closing in connection with the performance
by the Purchaser of its obligations under this Agreement shall be satisfactory
to Seller and Seller's Counsel and Seller shall have received copies of all such
documentation or other evidence as they may reasonably request in order to
establish the consummation of the transactions contemplated hereby and the
taking of all corporate proceedings in connection therewith in compliance with
these conditions, in form (as to certification and otherwise) and substance
satisfactory to Seller and Seller's Counsel.
6.4 Litigation
----------
On the Closing Date, there shall be no litigation, governmental
investigation or proceeding pending or threatened for the purposes of enjoining
or presenting the consummation of any of the transactions contemplated by this
Agreement or otherwise claiming that such consummation is improper.
21
6.5 Employment Agreement with Seller
--------------------------------
On the Closing Date, Seller shall have executed and employment
agreement with the Purchaser in the form of Exhibit C attached hereto.
6.6 Payment of First Installment
----------------------------
On the Closing Date, Purchaser shall paid the First Installment in
accordance with Section 2.1 (a).
6.7 Opinion of Purchaser's Counsel
------------------------------
Seller shall have received from Purchaser's Counsel, an opinion, dated
the Closing Date, as to the matters set forth in Article 4.
ARTICLE 7
OTHER COVENANTS OF THE PARTIES
------------------------------
7.1 From Effective Date to Closing Date
-----------------------------------
During the period from the date of the Effective Date to the Closing
Time, Micro Tech shall:
(a) except as otherwise contemplated or permitted by this
Agreement, conducted their respective businesses in the
ordinary and normal course thereof and have not, without the
prior written consent of the Purchaser, entered into any
transaction which if effected before the date of this
Agreement, would constitute a material breach of the
representations, warranties or agreements contained herein;
(b) continued in force all existing policies of insurance
presently maintained by Micro Tech;
(c) complied with all Applicable Laws affecting the operation of
the Business and the Micro Tech and paid all required Taxes
and tax installments;
22
(d) not, without the prior written consent of the Purchaser taken
any of the actions, done any of the things or performed any of
the acts described in paragraphs (a)(i) to (x) inclusive of
Section 3.11.
7.2 Actions to Satisfy Closing Conditions
-------------------------------------
Each of the Parties hereby agrees to take all such actions as are
within its power to control, and to use its best efforts to cause other actions
to be taken which are not within its power to control, so as to ensure
compliance with any conditions set forth herein which are for the benefit of any
other Party.
7.3 Registration of Common Shares
-----------------------------
Within three (3) months after the payment of each of the First and
Second Installments, Purchaser shall prepare and file with the United States
Securities and Exchange Commission a registration statement on Form S-3 or such
other applicable Form, covering the Common Shares issued to Seller in each of
the First and Second Installments.
7.4 Lock-Up
-------
Seller hereby agrees that Seller will not, directly or indirectly, for
a period of twelve (12) months from the date of issuance, without the prior
written consent of Purchaser, offer to sell, sell, contract to sell, grant any
option to purchase or otherwise dispose (or announce any offer, sale, grant of
any option to purchase or other disposition) of any Common Shares issued to
Seller pursuant to this Agreement.
7.5 Waiver of Right of First Refusal
--------------------------------
Micro Tech hereby agrees to waive any rights of first refusal that it
has with respect to the purchase of the Purchased Shares.
ARTICLE 8
SURVIVAL AND REMEDY: INDEMNIFICATION
------------------------------------
8.1 Survival
--------
All representations and warranties of the parties hereto shall survive
the Closing and shall expire as of 11:59 p.m. Eastern Standard time on the date
which is twelve months after the Closing Date.
23
8.2 Indemnification by Seller
-------------------------
Seller agrees to indemnify the Purchaser and agree to hold it harmless
from any Losses incurred or suffered by the Purchaser or any of its Affiliates
(or any combination thereof) arising from any material breach of or any
inaccuracy in any representation or warranty made by Seller and/or Micro Tech
pursuant to this Agreement and any breach of or failure by Seller and/or Micro
Tech to perform any covenant or obligation of Seller and/or Micro Tech set out
in this Agreement.
8.3 Indemnification by Purchaser
----------------------------
The Purchaser agrees to indemnify Seller and/or Micro Tech against and
agrees to hold them harmless from any Losses incurred and suffered by Seller
and/or Micro Tech or any of their respective Affiliates (or any combination
thereof) arising from any material breach of or any inaccuracy in any
representation or warranty made by the Purchaser pursuant to this Agreement and
any breach of or failure by the Purchaser to perform any covenant or obligation
of the Purchaser set out in this Agreement.
8.4 Notice of Claims: Assumption of Defense
---------------------------------------
The indemnified party shall give prompt notice to the indemnifying
party in accordance with the terms of Section 10.3 of the assertion of any claim
or the commencement of any suit proceeding by any party in respect of which
indemnity may be sought hereunder, specifying with reasonable particularity the
basis therefore and giving the indemnifying party such information with respect
thereto as the indemnifying party may reasonably request (but the giving of such
notice shall not be conditioned precedent to indemnification hereunder). The
indemnifying party may, at its own expense:
(a) participate in; and
(b) upon notice to the indemnified party and the indemnifying
party's written agreement that the indemnified party is
entitled to indemnification pursuant to Section 8.2 or Section
8.3 for Losses arising out of such claim, suit, action or
proceeding, at any time during the course of any such claim,
suit, action or proceeding, assume the defense thereof;
provided that:
(i) the indemnifying party's counsel is reasonably
satisfactory to the indemnified party; and
(ii) the indemnifying party shall thereafter consult with
the indemnified party upon the indemnified party's
reasonable request for consultation from time to time
with respect to such claim, suit, action or
proceeding
24
8.5 Settlement or Compromise
------------------------
Any settlement or compromise made or caused to be made by the
indemnified party or the indemnifying party, as the case may be, of any such
claim, suit, action or proceeding of the kind referred to in Section 8.4 shall
also be binding upon the indemnifying party or the indemnified party, as the
case may be, in the same manner as if a final judgment or decree was entered by
a court of competent jurisdiction in the amount of such settlement or
compromise. No party shall settle or compromise any claim, suit, action or
proceeding without the prior written consent of the other parties hereto, which
consent shall not be unreasonably withheld.
8.6 Failure of Indemnifying Party to Act
------------------------------------
In the event the indemnifying party does not elect to assume the
defense of any claim, suit, action or proceeding, then any failure of the
indemnified party to defend or to participate in the defense of any such claim,
suit, action or proceeding or to cause same to be done, shall not relieve the
indemnifying party of its obligations hereunder, provided that the indemnified
party gives the indemnifying party at least thirty days' written notice of its
proposed intention not to defend or participate and affords the indemnifying
party the opportunity to assume the defense thereof.
8.7 Payment of Indemnifying Party
-----------------------------
Contemporaneously with any compromise or settlement the indemnifying
party shall pay or cause to be paid to the indemnified party or as they may
direct, the amount owing under this indemnity with respect to such matter being
provided further that:
(a) the indemnifying party shall provide further security to the
indemnified party in respect of any cost of damages arising in
connection with any litigation; and
(b) the indemnifying party shall agree to reimburse the
indemnified party promptly in respect of all out of pocket
expenses incurred by indemnified party in connection with such
litigation or pending litigation.
ARTICLE 9
TERMINATION
-----------
9.1 Termination by Mutual Consent. At any time prior to the Closing, this
Agreement may be terminated by the written consent of all Parties.
9.2 Termination by Purchaser or Seller and Micro Tech
-------------------------------------------------
(a) Purchaser may terminate this Agreement at any time prior to
the Closing Date by delivery of written notice to Seller and
Micro Tech in the event of a material breach by Seller and/or
Micro Tech or a failure by Seller and/or Micro Tech to perform
any material obligation on their part to be performed or a
material breach by Seller and/or Micro Tech of their
representations and warranties contained in Article 3 of this
Agreement, and such breach or failure continues for a period
of fifteen (15) Business Days following the giving of notice
25
(b) Seller and Micro Tech may terminate this Agreement at any time
prior to the Closing Date by delivery of written notice to
Purchaser in the event of a material breach by Purchaser or a
failure by Purchaser to perform any material obligation on its
part to be performed or a material breach by Purchaser of its
representations and warranties contained in Article 4 of this
Agreement, and such breach or failure continues for a period
of fifteen (15) Business Days following the giving of notice.
ARTICLE 10
OTHER MATTERS
-------------
10.1 Expenses
--------
The Parties shall bear their own costs, including attorney's fees,
incurred in the negotiation of this Agreement and consummating of the
transactions contemplated herein.
10.2 Time
----
Time shall be of the essence hereof.
10.3 Notices
-------
Any notice, direction or other document required to be given hereunder
or for the purposes hereof (hereinafter in this Section 9.3 called a "Notice")
to any Party shall be in writing and shall be sufficiently given if delivered
personally, or if sent by prepaid registered mail or if transmitted by facsimile
or other form of recorded communication tested prior to transmission to such
Party:
(a) in the case of a notice to Seller at:
109 Brimstone Lane
Sudbury, Massachusetts 01776
26
with a facsimile number of (781) 890-3355
Attention: Denise Dunne-Fushi
with a copy to Seller's Counsel at:
Drohan, Hughes & Hoffman, P.C.
175 Derby Street, Suite 30
Hingham, Massachusetts 02043
with a facsimile number of (781) 740-4335
Attention: James M. Hughes, Esq.
(b) in the case of a notice to the Purchaser at:
ThinkPath.com Inc.
55 University Avenue, Suite 505
Toronto, Ontario, Canada M5J 2H7
with a facsimile number of (416) 364-2424
Attention: Delcan A. French, Chief Executive Officer
with a copy to the Purchaser's Counsel at:
Gersten, Savage & Kaplowitz, LLP
101 East 52nd Street,
New York, New York 10022
with a facsimile number of (212) 813-9768
Attention: Christopher J. Kelly, Esq.
or at such other address as the Party to whom such writing is to be given shall
have last notified the Party giving the same in the manner provided in this
section. Any notice delivered to the Party to whom it is addressed as
hereinbefore provided shall be deemed to have been given and received on the day
it is so delivered at such address, provided that if such day is not a Business
Day then the notice shall be deemed to have been given and received on the first
Business Day next following such day. Any notice mailed as aforesaid shall be
deemed to have been given and received on the fifth Business Day following the
date of its mailing. Any notice transmitted by facsimile or other form of
recorded communication shall be deemed given and received on the first Business
Day after its transmission. Failure to transmit timely or adequate notice to
Seller's Counsel or to Purchaser's Counsel, as the case may be, shall not
invalidate, nullify or otherwise detrimentally affect the provision of same to a
Party.
27
10.4 Amendment
---------
This Agreement may be amended, modified or supplemented but only in
writing signed by all of the Parties hereto.
10.5 Assignment
----------
All terms of this Agreement shall be binding and inure to the benefit
of and be enforceable by the respective successor and assigns of Purchaser.
Purchaser may assign this Agreement in whole or in part to one or more
Affiliates. Micro Tech and Seller may not assign this Agreement in whole or in
part without the written consent of Purchaser.
10.6 Further Assurances
------------------
The Parties hereto shall with reasonable diligence do all such things
and provide all such reasonable assurances as may be required to consummate the
transactions contemplated hereby, and each Party shall provide such further
documents or instruments required by any other Party as may be reasonably
necessary or desirable to effect the purpose of this Agreement and carry out its
provisions, whether before or after the Closing.
10.7 Severability
------------
If any covenant or provision of this Agreement is prohibited in whole
or in part in any jurisdiction, such covenant or provision shall, as to such
jurisdiction, be ineffective to the extent of such jurisdiction without
invalidating the remaining covenants and provisions hereof and shall, as to such
jurisdiction, be deemed to be severed from this Agreement to the extent of such
prohibition.
10.8 Counterparts
------------
This Agreement may be executed by the Parties in separate counterparts
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.
10.9 Public Notices
--------------
Except for disclosures required by Applicable Law, all public notices
to third parties and all other publicity concerning the transactions
contemplated herein shall be jointly planned and coordinated by Seller and
Purchaser and no Party shall act unilaterally in this regard without the prior
approval of every other Party, such approval not to be unreasonably withheld.
(Signatures on the following page)
28
IN WITNESS WHEREOF the Parties have hereunto duly executed this
Agreement as of the day and year first written above.
THINKPATH.COM INC.
By: /s/ Declan A. French
-------------------------------------
Declan A. French
Chief Executive Officer
MICRO TECH PROFESSIONALS, INC.
By: /s/ Denise Dunne-Fushi
-------------------------------------
Denise Dunne-Fushi
President
By: /s/ Denise Dunne-Fushi
------------------------------------
Denise Dunne-Fushi
Sole Shareholder
29
SCHEDULE 3.1
Articles of Incorporation of Micro Tech
30
SCHDULE 3.2
Defaults
None.
31
SCHEDULE 3.4
Location and Description of Operations
All of Micro Tech's assets are located in Massachusetts. Micro Tech conducts
placements of personnel in all of the states of New England, but primarily in
the State of Massachusetts,
32
SCHEDULE 3.6
Options, Warrants or Other Rights to Purchase Securities
None.
33
SCHEDULE 3.8
Outstanding Indebtedness
None beyond what is disclosed in the Financial Statements.
34
SCHEDULE 3.11(a)
Unsecured Obligations; Issuance of Additional Securities;
Amendments to Articles of Incorporation or By-Laws
Sub-Chapter S distributions to Seller in the ordinary course of business.
35
SCHEDULE 3.12
Lease Equipment
Quantity Item Description Location
- -------- ---------------- --------
5 Five Shelve Plastic Shelves Storage
1 4' x 2' Wall mounted communications rack Storage
3 48 Port Level 5 Hubbell Patch Panels Storage
2 24 Port NETGEAR 10/100 Port Switchable Hubs Storage
1 LUCENT Legend R3.1 Phone System Equipped to Serve 24 Lines, Storage
64 Phone Ports
18 MERLIN 34 Button Voice Terminals Storage
4 MERLIN 22 Button Voice Terminals Storage
7 MERLIN 10 Button Voice Terminals Storage
2 II System Display Consoles Storage
1 PII 333 CTX File Server Storage
1 LUCENT Battery Backup Storage
1 Voice Manager 8 Port AA/VMS Storage
1 486 LEGEND SPM/SMDR Telephone System Manager Storage
1 Single Port CISCO Internet Router Storage
1 Music On Hold Radio Storage
2 5' x 30" Walnut Desks Storage
1 Triplite Battery Backup Storage
1 4 Draw Black File Cabinet Office 5
2 2' x 4' Task Tables Office 5
1 5' x 30" Walnut Desk with LHR Office 5
1 5' x 30" Walnut Desks w/ RHR Office 5
1 P233 Client Workstation Office 5
1 Task Chair Office 4
1 4 Draw Black File Cabinet Office 4
1 5' x 30" Walnut Desk Office 4
1 5' x 30" Walnut Desk w/ LHR Office 4
1 Task Chair Office 3
1 P233 Client Workstation Office 3
1 5' x 30" Walnut Desk w/ RHR Office 3
1 2' x 3' Task Table Office 3
2 4 Draw Lateral File Cabinets Office 2
1 2 Draw Oak Lateral File Cabinet Office 2
2 Task Chairs Office 2
1 PII 233 Client Workstation Office 2
1 4 Draw Black File Cabinet Office 2
2 Task Chairs Office 2
1 2 Draw Oak Lateral File Cabinet Office 2
36
Quantity Item Description Location
- -------- ---------------- --------
1 2' x 4' Task Tables Office 2
1 Brother Intellifax Plain Paper Fax Machine Office 1
1 4 Drawer Black File Cabinets Office 1
1 Cannon NP6025 Copier with sorter and ADF Office 1
1 P120 Printer Server Office 1
1 Cannon CFX L4000 Plain Paper Fax Office 1
1 HP laserjet 4000 Printer Office 1
1 Task Chair Aisle
1 Electric Pencil Sharpener Aisle
5 4 Draw Beige Lateral File Cabinets Aisle
3 Executive Maroon Leather side Chairs Aisle
1 2' x 2' Walnut Side Table Aisle
2 Brown Cloth Sled Chairs Aisle
1 Teak 3' x 4' Table Aisle
1 3' x 6' Oak Boat Table Aisle
6 Red Cloth Sled Chairs Aisle
1 Teak 6' Credenza Aisle
14 Orange Conference Room Chairs Vista Room
1 14' x 4' Cherry Conference Room Table Vista Room
2 1' x 3' x 5' Walnut Bookcases Red Room
1 4 Draw Beige Lateral File Cabinets Red Room
2 2' x 4' Task Tables Red Room
1 Markerboard Orange Room
1 3' x 6' Folding Table Orange Room
1 GE Hotpoint 18 Cubic Foot Refrigerator Kitchen
1 Dishwasher Kitchen
1 Sharp Microwave Kitchen
1 Corkboard Office 0
1 5' x 30" Walnut Desk w/ LHR Office 0
2 Task Chairs Office 0
1 Walnut Credenza Office 0
3 4 Draw Black File Cabinet Office 0
1 P100 Client Workstation Cubes
13 Herman Miller Cubicals Cubes
10 P, PII 233 Client Workstations Cubes
9 Task Chairs Cubes
1 Xerox Copier (Needs Work) Cubes
1 Brother Thermal Paper Fax (old) Cubes
1 8' x 9' Cube with Tansaction Table Reception
1 PII 233 Client Workstation Reception
1 Cannon CFX L4000 Plain Paper Fax Reception
1 OKIDATA 16n Printer Reception
1 Fujistu Scanner Reception
1 Chair Reception
37
SCHEDULE 3.15
Real Property
None.
38
SCHEDULE 3.17
Employment Contracts; Pension Plans; Collective Bargaining Agreements
None.
39
SCHEDULE 3.20
Guarantees
None.
40
SCHEDULE 3.21
Litigation
None.
41
SCHEDULE 3.24
Vehicular Equipment
A lease of a 1997 Chevrolet Blazer.
42
SCHEDULE 3.26
Corporate Records
None.
43
EXHIBIT A
Form of Promissory Note - First Installment
PROMISSORY NOTE
---------------
$750,000 April 25, 2000
FOR VALUE RECEIVED, ThinkPath.com Inc. (the "Maker") does
hereby promise to pay to Denise Dunne-Fushi (the "Holder") at 109 Brimstone
Lane, Sudbury, Massachusetts 01766, or at such other place as may be designated
in writing from time to time by the Holder, the sum of Seven Hundred Fifty
Thousand dollars ($750,000), in lawful money of the United States of America,
together with interest accrued from the date hereof at a rate of one-half of a
percent (1/2%) in excess of the prime rate of interest from time to time as
reported in The Wall Street Journal, in lawful money of the United States
("Payment"). Principal and interest may be prepaid at any time and in any amount
with no penalty.
Principal and interest shall be computed on the basis of a
360-day year and shall be payable in six (6) installments of one hundred twenty
five thousand dollars ($125,000) of principal plus calculated interest, payable
on a semi-annual basis, with the first payment due on July 25, 2000 and the
final payment due at maturity on April 25, 2003.
The Maker's obligations under this Note shall be guaranteed by
the Maker and Micro Tech Professionals, Inc., a Massachusetts corporation and a
wholly-owned subsidiary of the Maker.
The occurrence of any of the following events with respect to
Maker shall constitute an event of default (each an "Event of Default") which
shall cause the entire principal amount of the Note and accrued interest, to
become immediately due and payable without the necessity for any demand on
Maker:
(i) If Maker shall make an assignment for the benefit of
creditors, or file a voluntary petition under the Bankruptcy Code, as amended,
or any other federal or state insolvency law, or apply for or consent to the
appointment of a receiver, trustee or custodian of all or part of his property;
or
(ii) If Maker shall file an answer admitting the
jurisdiction of the court and the material allegations of an involuntary
petition filed against him under the Bankruptcy Code, as amended, or any other
federal or state insolvency law, or fail to make a motion to have such petition
dismissed within twenty (20) days after its filing, which filing is not
dismissed within sixty (60) days from the date of the filing of the motion to
dismiss; or
(iii) If a proceeding shall be commenced against Maker
seeking the appointment of a trustee, receiver or custodian of all or part of
Maker's property and maker does not file a motion to dismiss such petition
within twenty (20) days after its filing and such proceeding is not dismissed
within sixty (60) days after the motion to dismiss such filing; or
(iv) A judgment or order for the payment of money in
excess of Fifty Thousand dollars ($50,000) shall be rendered against Maker and
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order.
Failure to exercise the Holder's rights hereunder shall not
constitute a waiver of the right of the right to exercise same in the event of
any subsequent default.
Maker will reimburse Holder, upon demand, for all costs and
expenses incurred in connection with the collection and/or enforcement of this
Note (including reasonable attorneys' fees and expenses), whether or not suit is
actually instituted.
Maker and Holder hereby irrevocably submit to the personal
jurisdiction of any state or Federal court sitting in the States of New York or
Massachusetts over any suit, action or proceeding arising out of or relating to
this Note. Maker and Holder hereby irrevocably waive to the fullest extent
permitted by applicable law any objection which they have or hereafter have to
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. Maker and Holder hereby agree
to submit to the exclusive jurisdiction of the courts of the States of New York
or Massachusetts for the purpose of resolving any action or claim arising out of
the performance of the provisions of this Note.
This Note shall be construed in accordance with and governed
by the laws of the State of New York.
The Maker expressly waives presentment for payment, demand and
protest, notice of protest and dishonor, and all other notices in connection
with the delivery, acceptance, performance default or enforcement of the payment
of this Note.
This Note may not be modified, terminated or discharged, nor
shall any waiver hereunder be effective unless in writing signed by the party
against whom the same is asserted.
IN WITNESS WHEREOF, the Maker has executed this Note as of the 25th day
of April, 2000.
THINKPATH.COM INC.
By:
-------------------------------------
Declan French
Chief Executive Officer
2
EXHIBIT B
Form of Promissory Note - Second Installment
PROMISSORY NOTE
---------------
$500,000 ___________, 2001
FOR VALUE RECEIVED, ThinkPath.com Inc. (the "Maker") does
hereby promise to pay to Denise Dunne-Fushi (the "Holder") at 109 Brimstone
Lane, Sudbury, Massachusetts 01766, or at such other place as may be designated
in writing from time to time by the Holder, the sum of Five Hundred Thousand
dollars ($500,000), in lawful money of the United States of America, together
with interest accrued from the date hereof at a rate of one-half of a percent
(1/2%) in excess of the prime rate of interest from time to time as reported in
The Wall Street Journal, in lawful money of the United States ("Payment").
Principal and interest may be prepaid at any time and in any amount with no
penalty.
Principal and interest shall be computed on the basis of a
360-day year and shall be payable in six (6) installments of eighty three
thousand three hundred thirty three dollars and thirty three cents ($83,333.33)
of principal plus calculated interest, payable on a semi-annual basis, with the
first payment due on ___, 2001 and the final payment due at maturity on ____,
2004.
The Maker's obligations under this Note shall be guaranteed by
the Maker and Micro Tech Professionals, Inc., a Massachusetts corporation and a
wholly-owned subsidiary of the Maker.
The occurrence of any of the following events with respect to
Maker shall constitute an event of default (each an "Event of Default") which
shall cause the entire principal amount of the Note and accrued interest, to
become immediately due and payable without the necessity for any demand on
Maker:
(i) If Maker shall make an assignment for the benefit of
creditors, or file a voluntary petition under the Bankruptcy Code, as amended,
or any other federal or state insolvency law, or apply for or consent to the
appointment of a receiver, trustee or custodian of all or part of his property;
or
(ii) If Maker shall file an answer admitting the
jurisdiction of the court and the material allegations of an involuntary
petition filed against him under the Bankruptcy Code, as amended, or any other
federal or state insolvency law, or fail to make a motion to have such petition
dismissed within twenty (20) days after its filing, which filing is not
dismissed within sixty (60) days from the date of the filing of the motion to
dismiss; or
(iii) If a proceeding shall be commenced against Maker
seeking the appointment of a trustee, receiver or custodian of all or part of
Maker's property and maker does not file a motion to dismiss such petition
within twenty (20) days after its filing and such proceeding is not dismissed
within sixty (60) days after the motion to dismiss such filing; or
(iv) A judgment or order for the payment of money in
excess of Fifty Thousand dollars ($50,000) shall be rendered against Maker and
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order.
Failure to exercise the Holder's rights hereunder shall not
constitute a waiver of the right of the right to exercise same in the event of
any subsequent default.
Maker will reimburse Holder, upon demand, for all costs and
expenses incurred in connection with the collection and/or enforcement of this
Note (including reasonable attorneys' fees and expenses), whether or not suit is
actually instituted.
Maker and Holder hereby irrevocably submit to the personal
jurisdiction of any state or Federal court sitting in the States of New York or
Massachusetts over any suit, action or proceeding arising out of or relating to
this Note. Maker and Holder hereby irrevocably waive to the fullest extent
permitted by applicable law any objection which they have or hereafter have to
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. Maker and Holder hereby agree
to submit to the exclusive jurisdiction of the courts of the States of New York
or Massachusetts for the purpose of resolving any action or claim arising out of
the performance of the provisions of this Note.
This Note shall be construed in accordance with and governed
by the laws of the State of New York.
The Maker expressly waives presentment for payment, demand and
protest, notice of protest and dishonor, and all other notices in connection
with the delivery, acceptance, performance default or enforcement of the payment
of this Note.
This Note may not be modified, terminated or discharged, nor
shall any waiver hereunder be effective unless in writing signed by the party
against whom the same is asserted.
IN WITNESS WHEREOF, the Maker has executed this Note as of the
______day of _______, 2001.
THINKPATH.COM INC.
By:
-------------------------------------
Declan French
Chief Executive Officer
2
EXHIBIT C
Employment Agreement of Seller
THINKPATH.COM INC.
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT (the "Agreement") made as of this 25th
day of April, 2000 by and between THINKPATH.COM INC., an Ontario corporation
(hereinafter referred to as "Company") and DENISE DUNNE-FUSHI, (hereinafter
referred to as "Executive");
W I T N E S S E T H:
WHEREAS, Company desires to employ Executive as its Vice
President and as the President of Micro Tech Professionals, Inc., a
Massachusetts corporation and wholly-owned subsidiary of the Company ("Micro
Tech"); and
WHEREAS, Executive is willing to be employed in the manner
provided for herein, and to perform the duties provided for herein upon the
terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein set forth it is agreed as follows:
1. Employment of Executive. Company hereby employs
Executive as its Vice President and as the President of Micro Tech.
2. Term. The term of this Agreement shall commence on
the execution hereof (the "Commencement Date") and expire one (1) years from
such date (the "Term"). During the Term, Executive shall devote substantially
all of her business time and efforts to Company and Micro Tech and their
subsidiaries and affiliates.
3. Duties. Executive hereby agrees that, throughout the
period of her employment hereunder, he shall devote her business time,
attention, knowledge and skills, diligently in furtherance of the business of
Company and Micro Tech, shall perform the duties assigned to her by the Chief
Executive Officer of Company consistent with her executive positions with
Company and Micro Tech and shall observe and carry out such rules and
regulations, policies and directions as the Chief Executive Officer of Company
may from time to time establish to the extent consistent herewith. During the
term of this Agreement, Executive shall do such traveling as may be reasonably
required of her in the performance of her duties on behalf of Company and Micro
Tech. Executive shall be available to confer and consult with and advise the
officers and directors of Company at such times during business hours that may
be reasonably required by Company.
4. Compensation.
-------------
(a) Salary. Executive shall be paid US$125,000
for the Term, less deductions and withholdings required by applicable law.
Executive shall be paid periodically in accordance with the policies of Company
during the term of this Agreement, but not less frequently than monthly.
(b) Benefits. Executive shall be entitled to
participate in and receive the benefits of all pension, profit-sharing, deferred
compensation, retirement, hospitalization, insurance, medical or dental or other
benefit plan or arrangement generally available to executive employees of
Company as may now or hereafter exist. Executive shall also be entitled to
participate in or receive all other benefits generally available to executives
of Company that may be in effect from time to time during the Executive's
employment hereunder. The Company shall be under no obligation to institute or
continue the existence of any such employee plan, benefit or prerequisite.
(c) Bonus. As an executive officer of Company,
Executive is entitled to an annual bonus of US$25,000. Such Bonus shall be paid
to Executive within sixty (60) business days after the completion of the Term.
(d) Stock Compensation. The Company's Board of
Directors, may from time to time, issue Executive options to purchase the
Company's common stock, which issuance shall be in the sole discretion of the
Company's Board of Directors.
5. Expenses. Company shall reimburse Executive, within
thirty (30) days of his presentation of receipts or vouchers thereof, for all
expenses reasonably incurred by her in connection with the performance of her
duties hereunder and the business of Company and Micro Tech, in accordance with
policies of Company from time to time in effect.
6. Vacation. Executive shall be entitled to receive
three (3) weeks paid vacation time after each year of employment upon dates
agreed upon by Company. Upon separation of employment, for any reason, vacation
time accrued and not used shall be paid at the Salary rate.
7. Executive's Representations. Executive is free to
enter into this Employment Agreement and to perform each of the provisions
contained herein. Executive represents and warrants that Executive is not
restricted or prohibited, contractually or otherwise, from entering into and
performing this Agreement, and that Executive's execution and performance of
this Agreement is not a violation or breach of any agreement between Executive
and any other person or entity.
2
8. Non-disclosure of Confidential Information; Ownership
of Intellectual Property Rights; Non Competition; Covenant Not to Compete.
(a) Non-disclosure of Confidential Information.
During the Term and at all times thereafter, Executive will keep confidential
and will not directly or indirectly divulge to anyone nor use or otherwise
appropriate for Executive's own benefit, or on behalf of any other person, firm,
partnership or corporation by whom Executive might subsequently be employed or
otherwise associated or affiliated with, any Confidential Information (as
defined herein). For this purpose, "Confidential Information" means any and all
trade secrets or other confidential information of any kind, nature or
description relating to the business of Company provided that such information
is not and does not in the future become known or available to third parties or
general economic trade information known to the industry, both of which does not
arise as a result of a disclosure by Executive or her agents.
(b) Company Materials. All reports and analysis,
designs, drawings, contracts, contractual arrangements, specifications, computer
software, computer hardware and other equipment, computer printouts, computer
disks, documents, memoranda, notebooks, correspondence, files, customer lists
and other records, and the like, and all photocopies or other reproductions
thereof, relating to the business of Company which Executive shall prepare, use,
construct, observe, possess or control, except Executive's copies of all such
documents which pertain to Executive ("Company Materials"), shall be and remain
the sole property of Company. Upon termination of this Agreement, Executive
shall deliver promptly to Company all such Company Materials.
(c) Certain Restrictions on Business Activities.
During the term of this Agreement, and for a period of two (2) years thereafter,
Executive agrees that:
(i) Business Activities. Executive will
not, directly or indirectly, own an interest in, operate, join, control or
participate in, or be connected as an officer, employee, agent, independent
contractor, partner, shareholder or principal of any corporation, partnership,
proprietorship, firm, association, person or other entity providing services
and/or products or a combination thereof which directly or indirectly compete
with Company's business, and she will not undertake planning for or organization
of any business activity directly competitive with Company's business, or
combine or conspire with other employees or representatives of Company's
business for the purpose of organizing any such competitive business activity,
except the purchase of less than four percent (4%) of the stock of a publicly
traded company which is not affiliated with Company.
(ii) Solicitation of Employees, Etc.
Executive will not, directly or indirectly or by action in concert with others,
induce or influence (or seek to induce or influence) any person who is engaged
(as an employee, agent, independent contractor or otherwise) by Company to
terminate his or her employment or engagement.
(d) Covenant Not to Compete. Executive covenants
and agrees that, if Executive's employment with Company is terminated by the
Company, Executive will not engage or be engaged, in any capacity, directly or
indirectly, including but not limited as employee, agent, consultant, manager,
officer, owner or stockholder (except as a passive investor holding less than a
four percent (4%) equity interest in any enterprise the securities of which are
publicly traded) in any business entity doing business in the United States or
Canada engaged in direct competition with the business conducted by Company on
the date of termination for a period of two (2) years from the date of
termination.
3
(e) Severability. Executive agrees, in the event
that any provision of this Section 8 or any word, phrase, clause, sentence or
other portion thereof shall be held to be unenforceable or invalid for any
reason, such provision or portion thereof shall be modified or deleted in such a
manner so as to make this Section 8 as modified legal and enforceable to the
fullest extent permitted under applicable laws. The validity and enforceability
of the remaining provisions or portions thereof shall not be affected thereby
and shall remain valid and enforceable to the fullest extent permitted under
applicable laws. A waiver of any breach of the provisions of this Section 8
shall not be construed as a waiver of any subsequent breach of the same or any
other provision.
9. Termination.
------------
(a) Termination by Company.
-----------------------
(i) Company may terminate this
Agreement upon written notice for Cause. For purposes hereof, "Cause" shall mean
(A) engaging by the Executive in conduct that constitutes activity in direct
competition with Company's businesses; (B) the conviction of Executive for the
commission of a felony; (C) the habitual abuse of alcohol or controlled
substances; (D) deliberate actions taken by Executive to the material detriment
of Company; and/or (E) material breach of this Agreement. Notwithstanding
anything to the contrary in this Section 9(a)(i), Company may not terminate
Executive's employment under this Agreement for Cause unless Executive shall
have first received notice from the Board of Directors of the Company advising
Executive of the specific acts or omissions alleged to constitute Cause, and
such acts or omissions continue after Executive shall have had a reasonable
opportunity (at least twenty (20) days from the date Executive receives the
notice from the Board) to correct the acts or omissions so complained of.
(ii) In the event that during the term
of her employment with Company, Executive shall become Disabled (as that term is
defined herein), the Company may terminate this Agreement and Executive's
employment hereunder at any time upon ten (10) days' written notice to Executive
and Executive shall be entitled to receive disability payments during the
succeeding 12-month period at a rate equal to one-half of the rate of the base
salary as provided in Section 4(a) to which she was theretofore entitled,
payable in equal installments no less frequently than monthly. For the purposes
of this Agreement, Executive shall be deemed to have become Disabled when, by
reason of her physical or mental incapacity, Executive shall not perform his
duties hereunder for a period of four (4) consecutive months or for an aggregate
of one-hundred-twenty (120) days in any consecutive period of six (6) months.
(iii) This Employment Agreement and
Company's obligations hereunder shall terminate upon Executive's death. Upon
termination for death, Company shall continue to pay the compensation payments
pursuant to Section 4(a) to the surviving spouse of Executive (or if there is
none to Executive's estate) for the succeeding six (6) months.
4
(b) Termination by Executive. Executive shall
have the right to terminate his employment under this Agreement upon thirty (30)
days' notice to Company given within ninety (90) days following the occurrence
of any of the following events:
(A) Company acts to materially reduce
Executive's duties and responsibilities hereunder;
(B) A reduction in Executive's rate of
base compensation or material reduction in Executive's other benefits; or
(C) A material breach of this Agreement
by Company, which is not cured within thirty (30) days of written notice of such
breach by Company.
If Company shall terminate Executive's employment other than due to his death or
disability or for Cause (as defined in Section 9(a)(i) of this Agreement), or if
Executive shall terminate this Agreement under Section 9(b), Executive shall
continue to be entitled to receive all amounts provided for by Section 4 and all
additional employee benefits under Section 4 regardless of the amount of
compensation she may earn with respect to any other employment she may obtain
for the remainder of the Term.
10. Governing Law. This Agreement shall be deemed to be
made in, and in all respects shall be interpreted, construed, and governed by
and in accordance with, the laws of the State of New York. No provision of this
Agreement shall be construed against or interpreted to the disadvantage to any
party hereto by any court or other governmental or judicial authority or by any
board of arbitrators by reason of such party or its counsel having or being
deemed to have structured or drafted such provision. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
11. Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof, any prior agreement or
understanding between Company and Executive and Micro Tech and Executive with
respect to Executive's employment by Company. The unenforceability of any
provision of this Agreement shall not effect the enforceability of any other
provision. This Agreement may not be amended except by an agreement in writing
signed by Executive and Company, or any waiver, change, discharge or
modification as sought. Waiver of or failure to exercise any rights provided by
this Agreement and in any respect shall not be deemed a waiver of any further or
future rights.
5
12. Binding Effect. This Agreement shall inures to the
benefit of, and is binding upon, the Company and its respective successors and
assigns, and Executive, together with Executive's executor, administrator,
personal representatives, heirs, and legatees.
13. Survival of Obligations. The covenants in Section 8
of this Agreement shall survive the termination of Executive's employment for
the period set forth therein.
14. Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
15. Notices. All notices, responses, demands or other
communications under this Agreement shall be in writing and shall be deemed to
have been given when (a) delivered by hand; (b) sent be telex or telefax, (with
receipt confirmed), provided that a copy is mailed by registered or certified
mail, return receipt requested; or (c) received by the addressee as sent be
express delivery service (receipt requested) in each case to the appropriate
addresses, telex numbers and telefax numbers as the party may designate to
itself by notice to the other parties:
(i) if to the Company:
ThinkPath.Com Inc.
55 University Avenue, Suite 505
Toronto, Ontario, Canada M5J 2H7
Attention: Declan French, Chief
Executive Officer
Telefax: (416) 364-2424
Telephone: (416) 264-8800
With a copy to:
Gersten, Savage & Kaplowitz, LLP
101 East 52nd Street
New York, New York 10022
Attention: Christopher J. Kelly,
Esq.
Telefax: (212) 813-9768
Telephone: (212) 752-9700
(ii) if to the Executive:
Denise Dunne-Fushi
109 Brimstone Lane
Sudbury, Massachusetts 01766
6
16. Severability of Agreement. Should any part of this
Agreement for any reason be declared invalid by a court of competent
jurisdiction, such decision shall not affect the validity of any remaining
portion, which remaining provisions shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated,
and it is hereby declared the intention of the parties that they would have
executed the remaining portions of this Agreement without including any such
part, parts or portions which may, for any reason, be hereafter declared
invalid.
17. Counterparts. This Agreement may be executed in two
(2) or more counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one (1) and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the day and year first above written.
THINKPATH.COM INC.
By:
-------------------------------------
Declan French
Chief Executive Officer
By:
-------------------------------------
Denise Dunne-Fushi
7