MANAGER LETTER
THIS MANAGER LETTER (the "Letter") is entered into this 5th day of
December, 2000 by and between MINING SERVICES INTERNATIONAL CORPORATION, a Utah
corporation (the "Company"), and Xxxxxxx X. Xxxxxxx ("Manager").
WHEREAS, the Company desires to sell certain of its assets pursuant to
that certain Asset Purchase Agreement (the "Agreement") by and among Union
Espanola de Explosivos S.A., a Spanish S.A. ("UEE-Spain"), Union Espanola de
Explosivos-MSI International, S.A., a Spanish S.A. ("UEE-MSI"), UMSI Acquisition
Co., a Delaware corporation (together with UEE-Spain and UEE-MSI, collectively
known as "UEE") and the Company, dated November 30, 2000 (the "Transaction").
WHEREAS, Manager has agreed that in order to facilitate the completion
of the Transaction and to induce UEE to enter into the Transaction, he will
become an employee of UEE, and enter into an agreement related to such
employment satisfactory to UEE.
Accordingly, the parties agree as follows:
1. Effective Date. This Letter will become effective only upon the
occurrence of the later of the following events (the date such later event
occurs to be known as the "Effective Date"): (i) the Closing of the Transaction,
as that term is defined in Section 1.1 of the Agreement (the "Closing"); and
(ii) Manager entering into the employ of UEE and executing the agreements
required by UEE to become an equity holder in UEE-MSI.
2. Purchase of the Company's Shares. The Company hereby agrees, that
upon the Closing Date and in connection with the Closing, if all other
conditions to the Closing have been satisfied, that in consideration and as
inducement for Manager entering into an agreement of employment with UEE in
order to facilitate the consummation of the transaction between the Company and
UEE, and in consideration for Manager waiving rights in contracts and agreements
between Manager and the Company and releasing potential claims of the Manager
against the Company as stated herein, and for other good and valuable
consideration, the Company will offset 13,500 shares of the Company's common
stock held by Manager, at FOUR DOLLARS ($4.00) per share, for a total amount of
FIFTY-FOUR THOUSAND DOLLARS ($54,000), against the principal amount Manager owes
to the Company for a loan made to Manager by the Company. The remaining
principal portion of such loan is hereby waived and forgiven and all accrued and
unpaid interest through the date of this Letter on such loan are the sole
responsibility of Manager to repay. In connection with the offset of the
Company's shares, Manager and Manager's spouse, where applicable, must be
available to effectively endorse stock certificates, or have made arrangements
satisfactory to the Company for the transfer of the stock certificates.
3. Deferred Compensation. The parties acknowledge that UEE has agreed
to pay a certain "deferred compensation" to Manager, pursuant to terms and
conditions established between UEE and Manager. Manager hereby acknowledges that
UEE is solely responsible for any "deferred compensation" obligation, and
Manager hereby waives any claim against the Company in connection therewith.
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4. Termination of Existing Contracts, Arrangements and Agreements.
(a) Manager hereby agrees that all agreements, arrangements and
contracts, whether written or oral, relating to Manager's current employment or
service on behalf of or for the benefit of the Company in any capacity, or any
of its subsidiaries and affiliates, including, without limitation: all
compensation arrangements, all stock option or stock purchase agreements of any
kind, future participation in any employee benefit plan (including any 401(k) or
retirement plans) or insurance agreement, all agreements regarding any
automobiles or automobile use (except to the extent such agreements are
expressly assumed by UEE), and any and all employment agreements, golden
parachute agreements, etc. shall be terminated as of the Closing Date, as that
term is defined in Section 1.1 of the Agreement (the "Closing Date"). Manager
covenants and agrees that he will not enter into any agreement, arrangement or
contract inconsistent with this Letter.
(b) Notwithstanding the foregoing, the Company acknowledges that
Manager is entitled to receive any compensation he has accrued and which is
payable to him as an employee of the Company through the Closing Date. Manager
is further entitled to receive any other benefits he is entitled to under the
Company's employee benefit plans that are determined to be accrued or vested and
owed to him through the Closing Date, except for those benefits being assumed by
UEE, which shall become the sole obligation of UEE. All confidentiality
agreements of any kind between Manager and the Company or any of its
subsidiaries or affiliates in relation to any of the business of the Company
that is being retained continues in full force and effect according to the terms
of such agreement. Manager is entitled to be indemnified by the Company in
accordance with the Company's bylaws, as those Bylaws exist as of the date of
this Letter, against any claims brought by any third party relating to the
Manager's employment by the Company as of the Closing Date. Similarly, to the
extent that a claim by a third party for actions by the Manager occurring prior
to the Closing Date is determined to be covered under a directors and officers
insurance policy of the Company, Manager is entitled to the protection afforded
him under that policy.
5. Release of Claims. Except as necessary to enforce the terms of this
Letter, including, without limitation, the provisions of Section 4(b), Manager
hereby releases, and covenants not to xxx, the Company and its respective
officers, directors, stockholders, partners, members, affiliates,
representatives, trustees, agents, employees, attorneys, administrators,
executors, heirs, assigns, predecessors and successors in interest, and the
Company hereby releases, and covenants not to xxx, the Manager and the Manager's
attorneys, executors, heirs, and assigns, all to the maximum extent permitted by
law from any and all manner of claims, demands, causes of actions, obligations,
damages, or liabilities whatsoever of every kind and nature, at law or in
equity, known or unknown, and whether or not discoverable, which he has or may
have for any period prior to the Closing Date arising out of Manager's
employment by the Company, including, but not limited to, any claims of
discrimination under Title VII of the Civil Rights Act of 1964, as amended, and
all other federal, state and local laws, and any claim for attorneys' fees or
costs incurred in pursuing any legal claim. Notwithstanding the foregoing, no
party shall be released from any claim that is based on the fraudulent conduct
of that party.
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6. Manager Conduct and Confidentiality. As an agreed upon material term
of this Letter, Manager covenants and agrees that he shall not, under any
circumstance or to any person, including employees or persons affiliated with
UEE in any manner, make any disparaging remarks about the Company, any of its
shareholders or members of its board of directors, or any retained business of
the Company, including the West Africa Chemicals ("WAC") operations. Except as
required by applicable law, Manager further covenants and agrees to completely
refrain from saying or doing anything that could in any way hold any of the
previously named parties up to disrepute in the eyes of any other person or
entity or that could in any way interfere with the current or future business
plans or activities of such named parties. Except as required by applicable law,
Manager agrees to hold confidential and not reveal to any person, including any
employee or person affiliated with UEE in any manner, under any circumstance or
for any reason, any information related in any way to the retained business and
assets of the Company, including the WAC operations. Notwithstanding the
previous sentence, Manager agrees to act in accordance with that certain
technology licensing agreement entered into by and between UEE and/or the
Company and WAC, and to comply with all provisions therein, including those
regarding information transfer. Manager covenants and agrees that he will abide
by the terms of this Section 6 both during his employment with the Company or
UEE and after the termination of the employment relationship with either the
Company or UEE for any reason.
7. Securities Representations. The purchase of the common stock by the
Company is being conducted in reliance on an exemption from the registration
requirements of federal and state securities laws. Manager has been involved in
the negotiation and documentation of a proposed transaction between the Company
and UEE and is familiar with the terms and conditions of that transaction.
Manger is represented by independent counsel and has been given the opportunity
to seek any additional information from the Company concerning the transaction
and the purchase of the common stock by the Company. The Manager is making the
decision to sell the common stock for his own personal reasons and based on his
own independent determination of the fairness of the consideration and
acknowledges that the trading price of the common stock may be greater than or
less than the price set forth in this Agreement in the future, either at the
Closing Date or thereafter.
8. Other Provisions.
8.1 Entire Agreement. This Letter contains the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto.
8.2 Waivers and Amendments. This Letter may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
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power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.
8.3 Governing Law; Venue. This Letter shall be governed and construed
in accordance with the laws of the State of Utah applicable to agreements made
and to be performed entirely within such State. The parties submit themselves to
the jurisdiction of the Federal and state courts located in Utah and agree to
commence any lawsuit arising under or relating to this Letter in such courts.
8.4 Assignment. This Letter, and any rights and obligations hereunder,
may not be assigned by any party hereto without the prior written consent of the
other party, except that the Company may assign this Letter to any of its
subsidiaries or affiliates without Manager's consent provided such assignment
does not diminish any of Manager's duties, positions, benefits, rights or
obligations hereunder.
8.5 Counterparts. This Letter may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.6 Headings; Interpretation. The headings in this Letter are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Letter. The use of the word "including" in this Letter
shall be construed to mean "including without limitation."
8.7 Joint Preparation. Manager and the Company agree that this Letter
is the product of joint negotiation and drafting, and both parties have had the
opportunity to consult with counsel regarding its provisions.
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IN WITNESS WHEREOF, the parties have executed this Letter as of the
date first above written.
MINING SERVICES INTERNATIONAL CORPORATION
a Utah corporation
By: /s/___________________________________
Name: Xxxx X. Day
Title: President
______/s/________________________________
Xxxxxxx X. Xxxxxxx, an individual
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