Mining Services International
Exhibit 10.
Material Contracts
___________________________________________________________________
SHAREHOLDERS AGREEMENT
THIS AGREEMENT, effective as of the 4th day of September 1996, is made by
and between NORSK HYDRO ASA (a company duly organized and existing under
the laws of Norway), having a principal place of business at 0240 Oslo,
Norway ("NHO") and MINING SERVICES INTERNATIONAL CORPORATION (a company
duly organized and existing under the laws of the State of Utah), having a
principal place of business at 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx X-000, Xxxx
Xxxx Xxxx, Xxxx, Xxxxxx Xxxxxx of America ("MSI).
WHEREAS
(a) NHO and MSI will each own fifty (50) per cent of the shares of Cayman
Mining Services Ltd (a company duly organized and existing under the
laws of the Cayman Islands), having a principal place of business at
Xxxxxx Xxxxx, Xxxxx Xxxxxx Xxxxxx, P.O. Box 30868, Xxxxxx Town, Grand
Cayman, Cayman Islands ("Company I"),
(b) Company I has established Suministros y Servicios Mineros de Colombia
Ltda (a limited liability partnership organized and existing under the
laws of Colombia), having a principal place of business at Xxxxx 00
Xxxxx 00-00 Xxxx 0, Xxxxxxxx Aereo Number 50535, Barranquilla,
Colombia ("Company II") and Company I owns all, except one (1), of the
quotas of Company II and the remaining quota is presently owned by
Xxxxxx Xxxxxx for the purpose of fulfilling compulsory requirements
under the laws of Colombia,
(c) MSI possesses valuable and secret processes, formulae and other
industrial proprietary rights relating to the production and
application of bulk explosive products and NHO manufactures and
supplies certain industrial chemicals, including ammonium nitrate and
calcium nitrate, which are important ingredients in such explosive
products, and MSI and NHO, directly or indirectly, shall be the
exclusive providers and suppliers thereof to Company I and Company II,
and
(d) NHO and MSI wish to combine their competence and resources and desire
that Company II establishes a plant and other facilities for the
production and supply of bulk explosive products, including emulsion,
emulsion blends and ANFO, down the hole for mines and for other
blasting applications in Colombia pursuant to the agreement of June
12, 1996 by and among MSI, NHO and Company II, on the one side, and
the Industria Militar, a State Industrial and Commercial Company
(connected with the Ministry of National Defense of Colombia), having
a principal place of business at Santa Fe de Bogota. Colombia
("INDUMIL") on the other side.
NOW, THEREFORE. the parties, intending to be legally bound, agree as
follows:
1. Conditions Precedent
1.1 This Agreement is conditional upon the receipt by the parties hereto
or by Company I or Company II, as the case may be, of the requisite
approvals (on conditions acceptable to both parties) required to be
obtained under the laws of Norway, the United States of America,
Colombia, Sweden and the Cayman Islands, respectively, on or before
September 30, 1996 or by such later date as the parties may mutually
agree in writing. Each party undertakes to use all reasonable efforts
to obtain such approvals, and will notify the other promptly when the
approvals required to be applied for by it have been obtained.
1.2 In the event of all of the conditions referred to in Article 1. I not
being fulfilled within the time period stipulated therein, then this
Agreement shall be null and void and no party shall have any claim
against the other.
1.3 This Agreement shall cease to be conditional upon the date when all
the conditions set out in Article 1.1 above shall have been fulfilled
and the following provisions of this Agreement shall come into effect
immediately on that date.
2. The Companies and their Objectives
2.1 The Memorandum of Association of Company I is attached hereto as
Attachment 1. The parties agree that the Articles of Association of
Company I (the "Articles of Association") shall be substantially in
the form of Attachment 2 hereto and that the By-laws of Company II
(the "By-laws") shall be substantially in the form of Attachment 3
hereto.
2.2 The parties acknowledge and agree that the overall objectives of
Company I are as follows:
(i) to own all, except one (1), of the quotas of Company II (the
remaining quota is presently owned by Xxxxxx Xxxxxx) and to fully
control the operation, management and administration of Company
II;
(ii) to acquire technology and purchase raw material necessary for the
operation and business of Company II and to provide such
technology and resell such raw material to Company II pursuant to
the agreements referred to in Article 12;
(iii) to otherwise utilize the services and capabilities of the
parties hereto and their Affiliates (as defined in Article 20.5)
to the largest extent possible for supplies to Company II, if
economic and market conditions permit; and
(iv) to develop a profitable business and distribute the profits of
Company I between NHO and MSI as agreed between the parties from
time to time.
2.3 The parties acknowledge and agree that the overall objectives of
Company II are as follows:
(i) to develop a long-term business in the production and supply of
down the hole bulk explosive products for coal mines in Colombia
pursuant to the agreement of June 12, 1996 by and among NHO and
Company II, on the one side, and INDUMIL on the other side, (the
"INDUMIL Agreement"), and to concentrate the activities of
Company II in Colombia as its primary market and to produce and
supply bulk explosive products outside of Colombia only with
prior approval of the Board of Directors of Company 1.
(ii) to concentrate the activities of company II in Colombia as its
primary market and to produce and supply bulk explosive products
outside of Colombia only with prior approval of the Board of
Directors of Company I.
2.4 Any arrangements between NHO and MS[ requiring mutual consent or
agreement as provided herein shall be reduced to writing subject to
the terms and conditions of this Agreement and signed by both parties
in a Memorandum of Agreement.
3. Share Capital and Loans
3.1 It is understood and agreed that:
(a) Company I shall have an authorized capital of USD 1,000 divided
into 1,000 Ordinary Registered Shares of USD 1 each;
(b) Company I shall have an issued and paid-up capital of USD 500
divided into 500 Ordinary Registered Shares of USD 1 each and in
that connection each of the parties shall subscribe against cash
at USD 1,000 the number of shares of USD 1 each hereinafter set
out in the capital of Company I (such shares shall be payable in
full upon subscription):
(i) NHO shall subscribe for 250 Ordinary Registered Shares;
and
(ii) MSI shall subscribe for 248 Ordinary Registered Shares
(MSI has previously subscribed 2 Ordinary Registered Shares
upon formation of Company I).
3.2 Each party's obligation to provide the amount specified in Article 3.1
above shall only remain valid if both parties fulfill their
obligations to provide the amounts so specified. Company I shall have
an obligation to notify a party if the other party does not pay its
share of any such capital contribution at the agreed time, and Company
I shall in such circumstances have an obligation upon written request
to immediately repay any capital amount paid in by one party only.
3.3 Each of the parties hereto shall exercise its voting rights for the
time being, in Company I and take such steps as for the time being
lies within its powers to procure that (save for the shares to be
subscribed for pursuant to the provisions of this Agreement) any
unissued shares in the capital of Company I shall before issue be
offered for subscription in the first instance to such persons as at
the date of the offer are registered as shareholders of Company I in
proportion as nearly as practicable to the number of shares held by
each of them respectively.
3.4 It is understood and agreed that:
(a) Company II shall have an authorized capital of COP 100,000,000
divided into 100,000 Ordinary Registered Quotas of COP 1,000
each;
(b) Company II shall have an issued and paid-up capital of COP
100,000,000 divided into 100,000 Ordinary Registered Quotas of
COP 1,000 each and in that connection the parties shall cause
Company I to subscribe against cash at par 100,000 Ordinary
Registered Quotas of 1,000 each.
3.5 NHO under-takes to loan to Company I up to a total of USD 2,500,000
and MSI undertakes to loan to Company I up to a total of USD
2,500,000. Such loans shall be made in equal shares and at the same
dates to be agreed between NHO and MSI. Any such loan shall be made
pursuant to the terms specified in the Loan Agreements referred to in
Article 12. 1(a)(v) and (vi). No loans in excess of such amounts
shall be required or permitted nor shall any changes in the terms of
the Loan Agreements or any pre-payment of the loans be made without
the approval of the Board of Directors of Company I.
Each part's obligations to lend the amounts specified above shall only
remain valid if both parties fulfill their respective obligations.
4. Board of Directors, General Meetings and Management
4.1 Unless otherwise agreed, the number of Directors of Company I (the
"Board of Directors") shall be four (4).
4.2 Subject to paragraph 4.7 of this Article, the Board of Directors shall
consist of:
(a) two (2) persons designated by NHO;
(b) two (2) persons designated by MSI.
The Board of Directors of Company I shall elect a chairman and a vice
chairman from among its members for a period of one year at a time.
Unless otherwise agreed, the parties shall alternately every other
year nominate a chairman and a vice chairman from among the members of
the Board of Directors of Company I. The chairman and the vice
chairman shall not have any casting or second vote at meetings with
the Board of Directors of, or at General Meetings in, Company I.
4.3 The right of appointment conferred on a party hereto under Article 4.2
above shall include the right by that party to remove at any time from
office such person appointed by that party as a Director and the right
of that party at any time and from time to time to determine the
period during which such person shall hold the office of Director.
4.4 The right of appointment, removal or determination of period of office
of each Director conferred by the foregoing provisions of this Article
4 shall be exercised in accordance with the Companies Law of the
Cayman Islands and the Articles of Association.
4.5 Whenever for any reason a person ceases to be a Director, the party
hereto which had designated him or would be entitled to designate him
under this Article 4 shall designate forthwith a substitute Director.
4.6 The first Directors of Company I shall be the following persons:
(a) Xxxx-Xxxx Xxxxx designated by NHO;
(b) Xxxxx Xxxxx designated by NHO;
(e) Xxxx X. Day designated by MSI;
(d) Xxxxx X. Xxxx designated by MSI;
in the terms of Article 4.2 above.
4.7 Notwithstanding anything contained herein to the contrary, the
composition of the Board of Directors of Company I shall at all times
as near as practically possible proportionally reflect the respective
proportionate shareholding of the parties hereto in the capital of
Company 1.
4.8 Where to give effect to all or any of the foregoing provisions of this
Article 4 a resolution of the shareholders of Company I in a General
Meeting is required under the Companies Law of the Cayman Islands or
under the Articles of Association, each of the parties hereto shall
exercise its voting rights for the time being in Company I and take
all such steps as lie within its powers as are necessary to give
effect thereto.
4.9 The quorum for all meetings of the Board of Directors of Company I
shall be three (3) Directors, consisting of at least one (1) Director
designated by NHO and of at least one (1) Director designated by MSI.
The procedure for convening or requisitioning meetings of the Board of
Directors of Company I and transacting business thereat are prescribed
in the Companies Law of the Cayman Islands and the Articles of
Association.
Directors may participate in meetings of the Board of Directors of
Company I by means of conference telephone or similar communication
equipment, provided that all persons participating in the meeting can
hear each other.
A resolution in writing signed by all Directors elected for the time
being shall be valid and effectual as if it had been a resolution
passed at a meeting of the Board of Directors of Company I duly
convened and held.
At a meeting of the Board of Directors of Company I, each Director
shall have one vote, provided that, if one or more Directors are
absent from such meeting, such absent Director may nominate an
alternate Director for any such meeting. In the event that the
alternate Director is also a Director, such Director will have the
right to vote on his own behalf and on behalf of the absent Director.
4.10 The quorum for General Meetings in Company I shall be as provided in
the Articles of Association and the Companies Law of the Caymans
Islands.
4.11 All Resolutions of a General Meeting in, or of the Board of Directors
of Company I, including any resolutions in relation to the operation,
management or administration of Company I or the enforcement of any
rights of Company I against Company II, shall be adopted by unanimous
vote of the shareholders or the Directors present, as the case may be,
notwithstanding any provisions to the contrary set out in the Articles
of Association and the Companies Law of the Cayman Islands.
In adopting resolutions NHO and MSI shall act in good faith and use
their respective best efforts to reach a unanimous vote and ensure
that their respective designated Directors act accordingly.
4.12 At least four (4) meetings of the Board of Directors of Company I
shall be held in any one (1) financial year of Company I and there
shall not at any time be a lapse of more than three (3) months between
any two such meetings.
4.13 It is agreed and understood that a General Meeting and a meeting of
the Board of Directors of Company I shall be convened by at least
fourteen (14) days notice.
4.14 The provisions set out in this Article 4.1-4.13 shall also apply, with
the amendments which are necessary to fit the circumstances, in
respect of Company II and the provisions of Articles 4.1-4.13 shall
for such purpose be construed accordingly.
4.15 The management and administration of the affairs of Company I shall be
entrusted to one of the Directors of Company I as determined by the
Board of Directors of Company I on a case-by-case basis.
The management and administration of the affairs of Company II shall
be entrusted to two (2) General Managers who shall act jointly on
behalf of Company II. NHO shall at all times have the right to
designate one person for election as General Manager of Company II,
who shall also be a Director of the Board of Directors of Company I
designated by NHO. MSI shall at all times have the right to designate
one person for election as General Manager, who shall also be a
Director of the Board of Directors of Company I designated by MSI.
Unless otherwise agreed, NHO and MSI shall jointly designate for
election a substitute General Manager of Company II, who shall be
responsible for the day-to-day business of Company II in accordance
with the joint instructions of the General Managers.
4.16 The parties agree that the authority to sign on behalf of Company I
shall be vested in any two (2) Directors jointly, whereof one (1)
shall be designated by NHO and one (1) shall be designated by MSI, and
that the authority to sign on behalf of Company II shall be vested
jointly in the General Managers. In order to expedite normal day-to-
day business transactions either two (2) such Directors jointly, in
the case of Company I and the General Managers jointly, in the case of
Company II, may appoint, and delegate the signing authority to a
management employee or any authorized agent.
5. Financial Year
5.1 Each financial year of Company I and Company II, respectively, shall
end on the 31st day of December of every year and the first financial
year of Company I and Company II, respectively, shall end on the 31st
day of December 1996.
6. Finance
6.1 Any finance as Company I or Company II may require from time to time
in addition to the capital furnished pursuant to Article 3 above shall
in the first instance be raised through normal commercial channels by
way of loan, debenture, mortgage or in such other manner as the
parties hereto may agree upon and such finance shall be procured,
wherever possible, without any additional security by way of guarantee
or otherwise from the parties hereto, but in the event that any such
guarantee or other securities are necessary in order to secure finance
for Company I or Company II, the parties hereto shall provide the same
in proportion as nearly as practicable to their participation in the
capital of Company I, provided, however, that neither party shall be
required to meet its proportionate share thereof and neither Company
1, Company II, nor any other shareholder shall have any remedy against
a party who fails to make such proportionate contribution. In the
event any such guarantee or other securities are necessary, the
parties shall endeavour to avoid a joint liability between the
parties.
6.2 However, (i) if the contribution required a party to purchase shares,
or any security of Company I convertible into, or having the right to
purchase, shares, the party who does not fail to make its contribution
shall be given an opportunity by Company I to purchase all of such
shares or other securities which the failing party could have
purchased upon the exercise of the preemptive rights provided in
Article 3.3 above; and (ii) if the required contribution took a form
other than the purchase of equity securities, and the terms and
conditions of such contribution were less favourable to the party than
prevailing commercial conditions and armslength bargaining would
require, then the parties shall cause the Board of Directors of
Company I when setting the terms upon which such contribution shall be
made to include therein appropriate conversion privileges or other
rights to acquire additional shares or other securities of Company I
as shall be fair and equitable in the circumstances.
7. Auditors and Accounting Principles
7.1 The books of account and records of Company I and Company II,
respectively, shall be audited at its own expense by one public
accountant of good standing designated jointly by NHO and MSI.
7.2 It is agreed that Company I and Company II respectively shall provide
without delay, at its own expense, to NHO and MSI such reasonable
reports concerning the business and operations of Company I and
Company II, respectively, as may be requested by NHO or MSI, such as
periodic forecasts, cash flow reports and various other financial
reports. It is further, agreed that each party, at its own expense,
may from time to time undertake its own audit or investigation of
Company I and Company II, respectively, using its own employees or a
certified public accounting firm. For such purpose, the parties shall
at normal business hours have reasonable access to the books and
records of Company I and Company II relevant to such audit or
investigation.
7.3 It is agreed that Company I and Company II, respectively, shall follow
sound accounting practice in accordance with accepted professional
standards and applicable laws and regulations.
8. Dividends
8.1 It is the intention of the parties that the maximum possible amount of
the profit of Company I and Company II, respectively, shall be
distributed to them as shareholders of Company I and that reserves
shall be kept to the lowest possible level, subject always to
applicable laws and regulations and good accounting practice. Upon
request by either of NHO or MSI, the parties shall take all actions as
lie within their powers as are necessary to have the profit available
for distribution (the "Distributable Profit") distributed to the
parties as shareholders of Company I.
8.2 If the parties hereto cannot agree on the amount of the Distributable
Profit, they will before the Annual General Meeting have the auditors
of Company I and Company II, respectively, determine the Distributable
Profit according to the intentions stated in Article 8.1 above, and
they undertake to vote accordingly.
9. Legal and Professional Costs
9.1 Each party shall bear its own legal and other professional costs and
expenses in connection with the preparation, negotiation and execution
of this Agreement, whether this Agreement ceases to be conditional or
becomes null and void in accordance with Article 1, except for certain
organization and start-up costs incurred by either party upon
agreement between the parties, which costs shall be shared as so
mutually agreed.
10. Use of NHO or MSI Name
10.1 The parties agree that there shall be no reference to "Hydro" or "MSI"
anything similar thereto in the name of Company I or Company II or
otherwise in connection with the businesses of Company I or Company
II, unless this is expressly authorized in writing by NHO and MSI,
respectively.
11. Representations and Warranties
MSI hereby represents and warrants to NHO (all of such
representations and warranties are true and accurate as of the date
hereof and at the date of NHO's subscription of shares in Company I):
(i) that Company I is duly organized, in good standing and validly
existing under the laws of the Cayman Islands;
(ii) that there are no assets nor liabilities as of December 31, 1995
on the books of
Company I;
(iii) that Company I has an issued and paid in share capital of
USD two (2), represented by two (2) shares of a par value of USD
one (1) each;
(iv) that MSI is the sole shareholder of Company I;
(v) that Company I has not conducted any business and has no
liabilities or obligations whatsoever, fixed or contingent.
11.2 MSI shall, without prejudice to any other remedies, fully indemnify
NHO for any non-fulfillment of the representations and warranties set
out in Article 11.1.
12. Related Agreements
12.1 As soon as practically possible after the satisfaction of the
conditions pursuant to Article 1 above:
(a) NHO and MSI, respectively, shall, directly or through an
Affiliate, sign and execute and NHO and MSI shall cause Company I
to sign and execute:
(i) a Supply Agreement between Hydro Agri AB and Company I
substantially in the form of Attachment 4 hereto;
(ii) a Technology License and Service Agreement between MSI and
Company I substantially in the form of Attachment 5 hereto;
(iii) a Purchase and Transfer Agreement between MSI and
Company I substantially in the form of Attachment 6 hereto;
(iv) a Supply Agreement between MSI and Company I substantially
in the form of Attachment 7 hereto;
(v) a Loan Agreement between NHO and Company I substantially in
the form of Attachment 8 hereto;
(vi) a Loan Agreement between MSI and Company I substantially in
the form of Attachment 9 hereto.
(b) NHO and MSI shall cause Company I and Company II, respectively,
to sign and execute
(I) a Supply Agreement substantially in the form of Attachment
10 hereto;
(ii) a Technology License and Service Agreement substantially in
the form of Attachment 11 hereto;
(iii) a Lease Agreement substantially in the form of
Attachment 12 hereto.
12.2 Pursuant to the INDUMIL Agreement, NHO and MSI may be jointly and
severally liable towards INDUMIL for the fulfillment by Company II of
its obligations thereunder. As between NHO and MSI, the liability for
claims by INDUMIL directly against NHO or MSI under the INDUMIL
Agreement shall be apportioned as follows:
(a) If such claim is related to defective performance, delay,
breach of contract or other fault for which Hydro Agri AB is
liable towards Company I under the Supply Agreement referred
to in Article 12.1 (a) (i) above, the corresponding
liability shall be assigned to NHO and NHO shall indemnify
and hold harmless MSI from such claim to the extent Hydro
Agri AB is liable towards Company I under the said Supply
Agreement.
If such claim is related to defective performance, delay,
breach of contract or other fault for which MSI is liable
towards Company I under any of the agreements referred to in
Article 12.1 (a) (ii)-(iv) above, the corresponding
liability shall be assigned to MSI and MSI shall indemnify
and hold harmless NHO from such claim to the extent MSI is
liable towards Company I under any of the referenced
agreements.
(b) To the extent neither of the parties is separately liable
for all or any part of the claim by INDUMIL as set forth in
the foregoing paragraph (a), each party shall be liable for
fifty (50) percent of such claim or part thereof and NHO and
MSI shall indemnify and hold each other harmless
accordingly.
12.3 Each party will promptly advise the other party in writing of any
notice or claim by INDUMIL, including the commencement of any suit or
action, received by or brought against it. None of the parties shall
be authorized to settle any such claim, suit or action or to make any
admission which may be prejudicial to the interest of the other party
without the prior written consent of the other party. NHO and MSI
shall consult with one another as to the course of action to be taken
against any such suit, claim or action.
Except as otherwise expressly provided herein, in no event shall any
of the parties be liable under this Article 12 to the other party for
any special. incidental, consequential, punitive or indirect losses or
damages whatsoever, including but not limited to loss of profit or
revenue, loss of production or loss of goodwill.
12.5 In the event that INDUMIL should claim under the INDUMIL Agreement
that the final product delivered by Company II is not competitive, NHO
and MSI shall in good faith determine in what manner the situation
should be resolved. It is understood and agreed that if claim from
INDUMIL can only be resolved by a reduction in the price or prices of
the final product pursuant to the INDUMIL Agreement, NHO and MSI shall
in good faith discuss and resolve the manner in which the loss should
be absorbed by Company II, Company I or NHO and MSI as suppliers or
technology providers.
13. Transfer of Shares
13.1 During the term of this Agreement, no party shall sell, exchange,
assign, transfer, pledge, hypothecate or otherwise encumber or permit
to become encumbered, give or otherwise dispose of, whether any such
disposition shall be voluntary or involuntary or come about to be
effected by operation of law or pursuant to or in compliance with any
judgment, decree or order, rule or regulation of any administrative
body (any of said acts being hereinafter referred to as "disposed of")
any of the shares of Company I which such party initially will own or
may thereafter acquire, except with the prior written consent of, and
upon such terms and conditions as may be set by the other party or in
accordance with the provisions of this Article 13.
13.2 Each party may dispose of all or any part of its shares of Company I
to any company which is an Affiliate of it. In the event of any such
disposition, the party will promptly notify the other party thereof,
and it will provide that any such Affiliate shall in all respect
comply with the provisions of this Agreement and the shares acquired
by such Affiliate shall continue to be subject to the terms and
conditions of this Agreement to the same extent and in the same manner
as if such shares were still owned by the party, it being understood
that such disposition shall not affect the status of such party as a
party under this Agreement nor shall it have the effect of making the
Affiliate a party to this Agreement.
13.3 In the event of any transfer by a party in compliance with this
Article 13, the other party shall be considered to have waived any
rights it or the Directors designated by it may have under Articles 9
and 10 of the Articles of Association.
14. Term of this Agreement
14.1 This Agreement shall remain in force until the date falling three
hundred and sixtyfive (365) days after the date when any and all
rights and obligations of Company II under the INDUMIL Agreement have
terminated or expired, unless earlier terminated in accordance with
Articles 14.2, 14.3, 14.4 or 14.5 below.
14.2 Either party shall have the right to terminate this Agreement with
immediate effect by notice in writing to the other party with
reference to this Article 14.2 in the event that:
(i) the other party shall be in serious default of any of its
substantial obligations under this Agreement and shall have
failed to make good such default within sixty (60) calendar days
after having been notified in writing to do so by the terminating
party, or
(ii) the other party is declared bankrupt, suspends its payments,
makes a composition with its creditors or is otherwise found to
be insolvent.
14.3 In the event that a party should cease to be a shareholder in Company
I otherwise than pursuant to the provisions of Article 13.2, this
Agreement shall immediately terminate and the Director(s) appointed by
such party shall immediately resign.
14.4 This Agreement shall automatically terminate:
(i) upon the dissolution, liquidation or bankruptcy of Company I
(ii) at such time as one of the parties owns all of the shares in
Company I of the parties hereto; and
(iii)at such time as a person other than the parties hereto owns
all of the shares in Company I of the parties hereto.
14.5 In case one of the parties terminates this Agreement in accordance
with paragraph 14.2, the terminating party shall have the right to
purchase the other party's shares in Company I. The purchase price for
the said shares shall in such case be equal to the fair market value
of those shares. Further, the provisions of Article 15 shall be
extended and apply to the defaulting party until the third anniversary
of the termination of this Agreement.
14.6 In the event of a termination pursuant to Article 14.1, the
terminating party shall at least sixty (60) days prior to the
effective date of the termination in writing offer all its shares in
Company I to the other party. Unless the other party has accepted the
offer in writing within fortyfive (45) days after receipt of the
offer, then the terminating party has the right to purchase all the
other party's shares in Company I by a written notice to the other
party received at the latest by the other party on the effective date
of the termination. In the event neither party has become the owner
of the shares of the other pursuant to this paragraph, then both
parties are obliged to liquidate Company I promptly.
14.7 The price for the shares pursuant to Article 14.6 shall be as agreed
between the parties, or failing an agreement, equal to the fair market
value thereof.
14.8 In the event that the parties cannot agree on the fair market value of
the shares pursuant to Article 14.5 or 14.7, it shall be determined by
arbitration in accordance with Article 17.
15. Non-Competition
15.1 Without the prior written consent of the other party, neither of the
parties or any of their Affiliates shall, during the term of this
Agreement, directly or indirectly, (e.g. through an Affiliate)
invest, acquire an interest or otherwise be engaged in the business of
production and supply of bulk explosive products in Colombia in
competition with Company II.
16. Insurances
16.1 It is agreed and understood that Company I and Company II,
respectively, shall procure and maintain appropriate insurances, such
as property insurances and public liability insurances.
17. Disputes and Applicable Law
17.1 All disputes and differences that might arise between or among parties
hereto in connection with or arising out of this Agreement, whether
during the term hereof or after termination or breach, shall be
referred to and finally settled by arbitration in London, England, in
accordance with the UNCITRAL Arbitration Rules.
Unless otherwise agreed, the number of arbitrators shall be three (3).
The International Chamber of Commerce (ICC) in Paris, France, shall be
the appointing authority acting in accordance with the rules adopted
by ICC for that purpose.
17.2 Judgment upon any award rendered may be entered into any court having
jurisdiction or otherwise application may be made to such court for a
judicial acceptance of any award and an order for enforcement, as the
case may be.
17.3 This Agreement shall in all respects be construed and interpreted in
accordance with the substantive laws of England as such laws shall
from time to time be in effect.
18. Force Majeure
18.1 Save as is otherwise specifically provided in this Agreement, the
parties hereto shall not be liable for failures or delays in
performing their respective obligations hereunder arising from
strikes, lockouts or labour disputes or from any cause beyond their
control including but not limited to acts of God, acts of civil or
military authority, fires. epidemics, governmental restrictions, wars,
riots, earthquakes, storms, and floods and in the event of any such
delay, the time for performance of the party shall be extended for a
period equal to the time lost by reason of the delay.
19. Transfer or Assignment
19.1 The parties hereto shall not transfer or assign all or any of their
rights, obligations or benefits hereunder to any third party or
parties.
20. Miscellaneous
20.1 Each of the parties hereto hereby represents to the other that the
execution and delivery of this Agreement and the performance thereof
will not contravene or constitute a default under its constitution, by-
laws or any other agreement, instrument or other form of commitment to
which any party hereto is also bound.
20.2 No failure or delay on the part of any party hereto in exercising any
power or right hereunder shall operate as a waiver thereof nor shall
any single or partial exercise of such right or power preclude any
other or further exercise of any other right or power hereunder.
20.3 In the event of any conflict between the terms of this Agreement and
the Articles of Association or the By-laws, the terms of this
Agreement shall as between the parties hereto prevail and the parties
shall forthwith cause such necessary alterations be made to the
Articles of Association or the By-laws as are required so to resolve
such conflict.
20.4 Each of the parties agree that in all matters concerning the Company I
or II for which it shall be called upon to exercise its rights to
vote, either as a shareholder or as a Director or General Manager,
such rights shall be exercised in good faith in every case and in
conformity with the specific provisions and spirit of this Agreement.
20.5 For the purpose of this Agreement, an "Affiliate" shall be deemed to
be (i) any company or other entity which is controlled, directly or
indirectly, by a party hereto, and (ii) any person, company or other
entity which controls, directly or indirectly, a party hereto, and
(iii) any company or other entity which is, directly or indirectly,
under common control with a party hereto. By "is controlled",
"controls", or "under control" shall be understood as denoting a
control of more than fifty (50) per cent of the voting power.
21. Confidentiality
21.1 Because NHO and MSI and their Affiliates and agents desire to fully
support and cooperate with each other in order to accomplish the
objectives of Company I and Company II, it is important that
technology, proprietary rights, trade secrets and confidential
information be shared. Accordingly, NHO and MSI agree to keep
"Confidential Information" confidential and use such information only
as required in compliance with this Agreement. The duty to keep
Confidential Information confidential and to use such information only
for purposes described herein shall survive the termination of this
Agreement.
As used in this Agreement "Confidential Information" means any and all
data or information related to the business of a party to this
Agreement or Company I or Company II, (the "Delivering Party") which
the other Party (the "Receiving Party") becomes aware of during the
course or as a consequence of the association between the parties and
is Generally treated by the Delivering Party as confidential (whether
or not it is marked "confidential" or designated as such when it is
conveyed to the Receiving Party). Confidential Information include,
without limitation, Proprietary Information (as defined herein) and
information relating to the financial affairs, products, processes,
customers, employees, distributors, research, development, and other
matters that are important to the general operation and business of
the Delivering Party; provided, however, that the information shall
not be considered confidential if it (i) is available or becomes
available to the public generally, or (ii) was already in the
possession of the Receiving Party at the time of such delivery, or
(iii) is received from another person or entity having lawful
possession thereof and having no obligation of confidentiality to the
Delivering Party.
"Proprietary Information" means all of the know-how, materials and
information (whether or not reduced to writing and whether or not
patentable or protectable by copyright) relating to the business of
the Delivering Party and which the Receiving Party receives, has
access to, conceives or develops, in whole or in part, as a direct or
indirect result of the Receiving Party's association with the
Delivering Party or through the use of the Delivering Party's
facilities or resources.
22. Notices
22.1 All notices, requests, demands or other communications under this
Agreement or in connection therewith shall be given or made in writing
and shall be given by prepaid registered airmail, courier or by cable,
telefax or telex authenticated by answer-back code and in any event
addressed to the party to which such notice is to be given at the
address of such party written below or to its cable, telefax or telex
address, as may be applicable, or, in the event of any change of any
such address, at such other address. Any notice despatched in
conformity with this Article shall be deemed to have been effected at
the time at which the same is received by the party to whom it is
addressed.
NHO: NORSK HYDRO ASA
ATTN: Xxxx-Xxxx Xxxxx
Xxx 000 - Xxxxxxxxx 00
X-000 00 Xxxxxxxxxx
XXXXXX
Telephone. x00-000-00000
Telefax: x00-000-00000
MSI: MINING SERVICES INTERNATIONAL CORPORATION
ATTN: Xxxx X. Day
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx X-000
Xxxx Xxxx Xxxx, XX 00000
UNITED STATES OF AMERICA
Telephone: 000-000-0000
Telefax: 000-000-0000
23. Entire Agreement
23.1 This Agreement embodies all the terms and conditions agreed upon
between the parties as to the subject matter of this Agreement and
supersedes and cancels in all respects all previous agreements and
undertakings, if any, between the parties hereto with respect to the
subject matter hereof, whether such be written or oral.
24. Interpretation
24.1 The headings of the Articles of this Agreement are to facilitate
reference only and do not form a part of this Agreement, and shall not
in any way affect the interpretation hereof.
24.2 No oral explanation or oral information by the parties hereto, or any
of them, shall alter the meaning or interpretation of this Agreement.
24.3 This Agreement shall be amended only in writing and each and every
amendment hereto shall be executed in the like manner by which these
presents have been executed.
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate,
each party taking one (1) copy, the day and year written below.
Place: Landskrona Place: Salt Lake City
Date: 26 September 1996 Date: October 9, 1996
NORSK HYDRO ASA MINING SERVICES INTERNATIONAL
CORPORATION
By. Xxxx-Xxxx Xxxxx By: Xxxx X. Day
Title: General Manager Title: President
SHAREHOLDERS AGREEMENT
THIS AGREEMENT (herein "Agreement") is made this 12th day of
February 1997 by and between CHEMICAL HOLDINGS INTERNATIONAL
LIMITED (herein "CHI"), a company duly organized and existing
under the laws of Mauritius, having a principal place of
business at 0xx Xxxxx, Xxxxxxxxx Xxxxx, Xx. Xxxx Street,
Quatre Borne, Mauritius, being a wholly owned subsidiary of
OMNIA GROUP LTD (herein "OG" ) which is the parent company
wholly owning BULK MINING EXPLOSIVES PTY LTD (herein "BME"),
both organized and existing under the laws of South Africa,
having a principal place of business at Omnia House, 00
Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxx Xxxxxx, and MINING
SERVICES INTERNATIONAL CORPORATION (herein "MSI"), a company
duly organized and existing under the laws of the State of
Utah, United States of America, having a principal place of
business at 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx X-000, Xxxx Xxxx
Xxxx, Xxxx.
WHEREAS
(a) MSI and OG wish to enter into a joint venture by
combining their competence and resources, including that of
BME, to establish a plant and other facilities for the
production and supply of bulk and packaged explosive products,
including, raw materials, emulsions, emulsion blends, ANFO,
related explosive accessories and down the hole services for
mines and other blasting applications in the area defined as
the countries of Ghana, Ivory Coast, Burkina Fasa and Togo and
any other countries which may be mutually agreed to (herein
"the Territory");
(b) OG conducts and operates its operations outside
South Africa through CHI and shall agree to appropriately
fund and guarantee the obligations of CHI with respect to
such operations;
(c) It is agreed that CHI and MSI (herein "the Parties") will
each own fifty (50%) per cent of the shares of the joint
venture company WEST AFRICA CHEMICALS LTD, a company duly
organized and existing under the laws of Mauritius, having its
principal place of business at 0xx Xxxxx, Xxxxxxxxx Xxxxx, Xx
Xxxx Road, Quatre Bornes, Mauritius (herein "WAC");
(d) WAC has acquired or shall acquire all of the shares of
West Coast Explosives Limited, incorporated and existing under
the Companies Code of Ghana), having a principal place of
business at SRS 000, 00xx Xxxx Xxx R.E., X.X. Xxx 0000, Xxxxxx
Xxxxxxxxxxxxx Xxxxxxx, Xxxxx, Xxxxx (herein "WCE").
NOW, THEREFORE, the Parties, intending to be legally bound,
agree as follows:
1. Conditions Precedent
MSICHI4.DOC Page 1 of 22
1.1 This Agreement is conditional upon:
1.1.1. The Boards of Directors of OG and MSI
unconditionally approving the terms and conditions of this
Agreement, and
1.1.2. The Exchange Control Authorities of the Republic of
South Africa (herein "Excon") approving and granting
permission to CHI entering into this Agreement and assuming
the obligations imposed on it in terms hereof (herein "The
Conditions"),
1.2 If The Conditions are not fulfilled on or before March
15, 1997 (or such later date as the Parties may mutually agree
in writing) then this Agreement shall be null and void and no
Party shall have any claim against the other. Rights and
obligations between the parties created in paragraphs 9, 10,
17, 21 and 22 shall survive the nullification or voidance
created by this paragraph to the fullest extent provided in
this Agreement or by law or equity.
1.3 Each Party undertakes to use all reasonable efforts to
obtain such approvals and will deliver such approvals to be
attached hereto in mutually acceptable form.
1.4 This Agreement shall cease to be conditional upon the
date when The Conditions shall have been fulfilled and the
following provisions of this Agreement shall come into
effect immediately on that date.
2. The Companies and their Objectives
2.1 The Articles of Association and By-laws of WAC and its
subsidiaries shall be amended to conform with the intent and
provisions of this Agreement. In the event of any conflict
between such Articles of Association and By-laws and this
Agreement, the terms of this Agreement, as between the
Parties, shall prevail.
2.2 The Parties acknowledge and agree that the overall
objectives of WAC are as follows:
2.2.1 To own all of the shares of any of its
subsidiaries operating in the Territory and to
fully control their operation, management and
administration in compliance with the overall
principle of acting in good faith and fair dealing
in protecting the interests of the WAC shareholders
with respect to taxation, asset risk management,
maximization of profit, cash flow and repatriation
of funds while promoting the overall best interests
of each operating subsidiary;
2.2.2 To acquire technology and purchase raw
materials and capital items necessary for the
operation and business of its operating subsidiaries
and to provide such technology and provide such raw
MSICHI4.DOC Page 2 of 22
materials and capital items to them pursuant to
related agreements referred to in Article 12;
2.2.3 To otherwise utilize the technology, services
and capabilities of the Parties hereto and their
Affiliates (as defined in Article 20.5) to the
largest extent possible for importing technology,
goods and services to WAC or its subsidiaries, so
long as such are competitive and economically sound
2.3 The Parties acknowledge and agree that the overall
objective of WCE is to develop a long-term business in the
production and supply of bulk and packaged explosive
products, including, raw materials, emulsions, emulsion
blends, ANFO, related explosive accessories and down the
hole services for mines and other blasting applications in
the Territory.
3. Share Capital and Loans
3.1 It is understood and agreed that:
3.1.1 WAC shall have an authorized capital of
1,000,000 shares having a par value of US $1.00
each.
3.1.2 WAC shall have issued stock and paid-up capital
of US $60,000.00 divided into 60 Ordinary Shares of
US $1.00 each issued at a premium of US $999.00
each. In that connection each of the Parties shall
subscribe against cash in the capital of WAC (such
shares shall be payable in full upon closing) such
that each of the Parties shall own fifty percent
(50%) of the capital of WAC.
3.2 Each of the Parties hereto (also sometimes referred to
herein as "Shareholder" or collectively as "Shareholders")
shall exercise its voting rights for the time being in WAC
and take such steps as for the time being lies within its
powers to provide that (save for the shares to be subscribed
for pursuant to the provisions of this Agreement) any
unissued shares in the capital of WAC shall before issue be
offered for subscription in the first instance to such
persons as at the date of the offer are registered as
shareholders of WAC in proportion to the number of shares
held by each of them respectively.
3.3 CHI undertakes to loan to WAC up to a total of USD
740,000 and MSI undertakes to loan to WAC up to a total of
USD 740,000. Such loans shall be made in equal amounts and at
the same dates to be agreed between CHI and MSI. Any such
loan shall be made pursuant to the terms specified in the Loan
Agreements referred to in Article 12.1.1.4 and12.1.1.5. No
loans in excess of such amounts shall be required or permitted
nor shall any changes in the terms of the Loan Agreements or
any pre-payment of the loans be made without the approval of
the Board of Directors of WAC. Each Party's obligations to
lend the amounts specified above shall only remain valid if
both Parties fulfil their respective obligations.
MSICHI4.DOC Page 3 of 22
3.4 The obligation to lend, grant security and/or advance
further funds on the part of the Shareholders is not within
the power of WAC's Board of Director's and accordingly can
only be decided upon at a duly notified Shareholders' meeting.
3.5 A reference to the purchasing, selling or valuation of
"equity," "shares," "interests," or "capital" in WAC shall
be interpreted to include both the value of the equity in the
share capital of WAC owned by a Shareholder as well as such
Shareholder's claims against WAC.
4. Governance of WAC and Management of Subsidiaries
4.1 Meetings of the Shareholders.
4.1.1 A General Meeting of the Shareholders of WAC shall
be held at least annually and other meetings of the
Shareholders shall be held at such other times as the
Shareholders shall agree or as properly noticed by either
Shareholder. A quorum of any meeting of the Shareholders
shall be duly constituted when each Shareholder, represented
by a duly authorized representative, shall be present in
person or through a mutually agreed teleconference duly called
and noticed with at least 14 calendar days notice or unless
otherwise waived. Where to give effect to all or any of the
provisions of this Agreement, a resolution of the shareholders
of WAC in a General Meeting is required under the Companies
Law of Mauritius or under the WAC By-laws, each of the Parties
hereto shall exercise its voting rights for the time being in
WAC and take all such steps as lie within its powers as are
necessary to give effect thereto.
4.1.2 All resolutions of a meeting of the Shareholders
shall be adopted by unanimous vote of the Shareholders, not
withstanding any provisions to the contrary set out in the WAC
By-laws and the laws of Mauritius. Failing a unanimous vote,
the resolution shall be dropped. However, if either
shareholder considers that the subject matter of the
resolution relates to an issue material to the continued
operation of WAC, the relationship between the Shareholders,
or the continued operation of any of its material operating
subsidiaries, it shall, subject to the provisions of Article
4.1.2.2, be deemed a "Material Issue" and dealt with according
to the following provisions:
4.1.2.1 If the respective representatives of the
Shareholders cannot resolve the disagreement within ten (10)
calendar days calculated from the date of the arbitration
award granted in terms of Article 4.1.2.2 or from the date on
which the resolution referred to in Article 4.1.2 could not be
agreed upon, whichever is applicable in the circumstances, the
Material Issue shall be presented to the respective Boards of
Directors of the Shareholders (in the case of CHI, the OG
Board of Directors shall be responsible for this resolution)
for a resolution officially adopting the position of the
respective Shareholder within twenty (20) additional calendar
days. Each Board of Directors shall send an official copy of
its resolution, signed and sealed by the Chairman of such
MSICHI4.DOC Page 4 of 22
Board, to the other Shareholder via courier, fax, E-mail or
Telex so that it shall be received by the other Shareholder
within the twenty days in order to be considered timely made.
Failing the timely notificaton of a resolution from either
Board of Directors while the other Board of Directors presents
a timely resolution, the resolution from the non-defaulting
Board of Directors shall be deemed to be the resolution from
both Boards of Directors and accordingly such resolution shall
prevail in totally resolving the dispute between the
Shareholders. However, if both Boards timely respond with
resolutions and the Shareholders still remain in deadlock with
respect to the Material Issue, both Shareholders shall have a
right to make an offer to purchase the other Shareholder's
interest (including all Shareholder's claims against WAC) for
a period of ten (10) calendar days. If within fifteen (15)
calendar days following the ten-day offer period, a mutual
agreement for purchase and sale cannot be achieved between the
Shareholders, each Shareholder shall deliver within (10)
calendar days following such failure to make a mutual
agreement, to a mutually agreed upon law firm, or the law
firm designated in Article 17 failing such agreement on a law
firm, an offer to purchase in a sealed envelope. The bids
shall be opened within five (5) calendar days following the
timely receipt of bids, in the offices of the law firm, in the
presence of a duly authorized representative of each
Shareholder or as otherwise agreed. If a Shareholder fails
to make a timely bid, it shall be deemed to have accepted the
bid duly presented by the other Party. Otherwise the highest
bidder shall automatically become the purchaser of the equity
interest (including all Shareholder's claims against WAC) of
the lower bidding Shareholder. The selling Shareholder shall
transfer its shares to the purchasing Shareholder upon receipt
of full payment in cash upon an agreed closing date, but in
no case more than thirty (30) days following the opening of
the bids. If the purchasing Shareholder fails to make its
payment in full and in cash upon the designated closing date,
the selling Shareholder, in lieu of any legal right in law or
equity, shall have the right to call upon the failing Party to
sell its interest in WAC for the same price, with full payment
in cash, within five (5) working days. Failing a purchase and
sale as provided in this paragraph, this Agreement shall
terminate and the business of WAC shall be accordingly wound
up.
1.2.2 If there is a dispute between the Shareholders as to
whether the subject matter of a resolution is a Material Issue
or not and no alternative method is agreed to between the
Parties to determine the materiality of the issue, the matter
shall be submitted and decided by arbitration as provided in
Article 17. If the arbitrator(s) determines that the issue is
a Material Issue, the time periods noted in Article 4.1.2.1
shall begin from the date of the ruling from arbitration. It
is hereby agreed that the failure to reach a mutual agreement
with respect to the annual budget of WAC and its subsidiaries,
failure to approve adequate funding for current operations,
and closure of an existing operation, are the types of issues
which shall be considered Material Issues.
MSICHI4.DOC Page 5 of 22
4.2 Board of Directors of WAC.
4.2.1 Unless otherwise agreed, the number of Directors
of WAC (herein the "Board of Directors") shall be
six (6). Three (3) of whom shall be nominated and
designated by CHI and three (3) of whom shall be
nominated and designated by MSI.
4.2.2 The Board of Directors of WAC shall appoint,
remove and/or replace, by consensus vote, a Managing
Director from among its members to serve for a
period of two years or for such other period as the
Board, by unanimous vote, shall agree. Each
shareholder shall have the right to nominate the
Managing Director on a rotating two (2) year basis,
beginning with MSI. The Managing Director shall
not have any casting or second vote at meetings with
the Board of Directors. The Managing Director shall
oversee and support the local managers of the
operating subsidiaries who shall report to the
Managing Director regarding the day-to-day business
affairs in the Territory.
4.2.3 The right of appointment conferred on a Party
hereto under Article 4.2.2 above shall include the
right by that Party to remove at any time from
office such person appointed by that Party as a
Director and the right of that Party at any time and
from time to time to determine the period during
which such person shall hold the office of Director.
4.2.4 Whenever for any reason a person ceases to be a
Director, the Party hereto which had designated him
or would be entitled to designate him under this
Article 4 shall designate forthwith a substitute
Director.
4.2.5 Notwithstanding anything contained herein to the
contrary, the composition of the Board of Directors
of WAC shall at all times reflect the respective
proportionate shareholding of the Parties hereto in
the capital of WAC.
4.2.6 The quorum for all meetings of the Board of
Directors of WAC shall be four (4) Directors (taking
into account alternate directors as provided
herein), consisting of at least one (1) Director
designated by CHI and of at least one (1) Director
designated by MSI. The notice procedures for
convening or requisitioning meetings of the Board of
Directors of WAC and procedures for transacting
business thereat shall be provided in the WAC By-
laws, but shall at least provide for:
4.2.6.1 Reasonable notice (at least 14 calendar
days) to the Directors,
MSICHI4.DOC Page 6 of 22
4.2.6.2 To the extent legally possible, all
meetings of the Board of Directors shall be
held in Mauritius, United States of America,
Republic of South Africa, or Ghana, or any
other place mutually agreed to by MSI and CHI,
4.2.6.3 Directors may participate in meetings of
the Board of Directors of WAC by means of con
xxxxxxx telephone or similar communication
equipment, provided that all persons
participating in the meeting can hear each
other, and
2.6.4 The Directors shall meet at least twice annually on
a timely basis to review the current budget vs. actual results
and to review and approve the proposed annual budget for the
following year. Also, the Directors shall meet to review and
finalize transfer pricing, profit sharing, sourcing of raw
materials and capital for the year just ending and to approve
the plans for such items for the new plan year.
2.6.5 In the event that a quorum of the Board of Directors
is not achieved after two postponements in an effort to
achieve a quorum and if still not achieved upon a second duly
notified Board meeting, the matters to be considered at such
Board meeting shall be deemed not in the domain of the Board
of Directors and shall be properly submitted to the
Shareholders for decision.
4.2.7 A resolution in writing signed by all Directors
elected for the time being shall be valid and
effectual as if it had been a resolution passed at a
meeting of the Board of Directors of WAC duly con
vened and held.
4.2.8 At a meeting of the Board of Directors of WAC,
each Director shall have one vote, provided that, if
one or more Directors are absent from such meeting,
such absent Director may nominate an alternate
Director for any such meeting. In the event that the
alternate Director is also a Director, such Director
will have the right to vote on his own behalf and on
behalf of the absent Director.
4.2.9 Resolutions of the Board of Directors shall only
become effective by a unanimous vote by the
Directors present or properly represented by an
alternate in a duly convened quorum of Directors
Failing a unanimous vote the matter shall be dropped
unless both of the Directors representing either
Party determine that the matter be presented as a
resolution to be considered by the Shareholders of
WAC as provided in Article 4.1.2. In such event the
issue shall cease to be in the domain of the Board
of Directors.
MSICHI4.DOC Page 7 of 22
4.3 Other Management Issues and Managing Operating
Subsidiaries.
4.3.1 The Parties agree that the authority to sign
on behalf of WAC shall be vested in any two (2)
Directors jointly, whereof one (1) shall be a
representative of CHI and one (1) shall be a
representative of MSI. The authority to sign on
behalf of an operating subsidiary of WAC shall be
vested in the Managing Director for items falling
within the approved capital and operating budgets of
such operating subsidiaries of WAC. In order to
expedite normal day-to-day business transactions,
the Managing Director shall appoint and delegate
signing authority to the local manager and at least
one other person who is a Director or employee of
such subsidiary. All bank drafts and payments
shall require two signatures.
4.3.2 Each Shareholder shall have the right to audit
and inspect the costs charged to the joint venture during any
year or period thereof, at its own expense, at regular
business hours, but no later than six months following the
independent audit of WAC and its subsidiaries, as the case
may be, unless otherwise mutually agreed between MSI and CHI.
4.3.3 It is agreed and understood that a General
Meeting and a meeting of the Board of Directors of
WAC shall be convened by at least fourteen (14) days
notice.
4.3.4 The provisions set out in this Article 4
shall also apply to operating subsidiaries of WAC,
with the amendments which are necessary to fit the
circumstances except as indicated below:
4.3.4.1 WCE shall consist of six Directors, made
up of the four non-Mauritius WAC Directors, representing
its Shareholder, and the local Manager of
Operations in Ghana (or the territory) and one
Ghanaian Director. The by-laws and articles
shall be amended to comply with the
Shareholders Agreement.
4.3.4.2 The WCE Board shall be convened at least
annually to consider local operations,
expansion and development as well as approve
budgets from the local perspective which shall
then be presented to the WAC Board for final
approval.
4.3.4.3 If at a WCE meeting the Directors
representing WAC cannot arrive at a unanimous
position, the disputed matter(s) shall not
remain in the domain of the WCE Board of
Directors nor the WCE Shareholders and shall
be deferred until a meeting of the WAC board
can be held to review the matter and resolve it
with mutual consent. In the event that the WAC
Directors cannot come to consensus, the
matter(s) in dispute shall be referred to the
Shareholders as provided in Article 4.1.2.
MSICHI4.DOC Page 8 of 22
4.3.5 The management and administration of the daily
affairs of the subsidiaries of WAC shall be entrusted to the
Managing Director of WAC and a local Manager in the territory
or a local manager of such subsidiary to serve for such time
and in such manner and at such remuneration as the Board of
Directors of WAC shall determine from time to time.
4.3.6 Any reference in this Agreement to WCE is also meant
to apply to any other subsidiary of WAC to the extent
practicable under the circumstances.
5. Financial Year
5.1 Each financial year of WAC and its subsidiaries shall end
on the 31st day of December.
6. Finance
6.1 Any financing which may be required from time to time
in addition to the capital and loans furnished pursuant to
Article 3 above for current operations shall in the first
instance be raised through normal commercial channels by way
of loan, debenture, mortgage or in such other manner as the
Parties hereto may agree upon and such finance shall be
procured, wherever possible, without any additional security
by way of guarantee or otherwise from the Parties.
6.2 Failing 6.1, WAC shall endeavour to finance the
additional funding by agreeing to encumber its assets and/or
the Shareholders agreeing to provide such corporate guarantees
or other securities for the financing in proportion as nearly
as practicable to to their participation in the capital of
WAC. MSI acknowledges that CHI is required to obtain the
written permission from Excon to enable it to so bind itself
as a guarantor and CHI hereby agrees to so apply immediately
in the alternative for either the approval for corporate
guarantees or the granting of approval to provide direct
funding by way of loan or additional share capital. In the
event such approval is not granted within six weeks from the
date of the resolution of the Shareholders to approve the
required additional financing, the provisions of Article 6.3
shall apply. In the event of approval, MSI shall match
whatever form of additional financing is approved for CHI by
Excon.
6.3 In the event that Excon approval is not obtained within
six weeks, MSI shall have the option to provide either the
needed guarantee or direct loan to WAC, but shall be granted a
security interest, which shall not include the right to vote
or receive dividends, in CHI's capital shares in WAC and its
claims against WAC in such amount as shall reasonably
represent the financial risk assumed by MSI on behalf of CHI.
In the event that MSI is required to provide direct funding by
way of loan, MSI shall receive interest on CHI's proportionate
share equal to the prime rate at Chase Manhattan Bank in New
York City plus three percent per annum compounded monthly.
MSICHI4.DOC Page 9 of 22
If CHI has not matched the guarantee or direct funding
undertaken by MSI within six (6) months from the date of
resolution, CHI shall be deemed to have committed a material
breach pursuant to Article 14.2 and accordingly MSI shall be
entitled to seek remedy as provided in Article 14.2. and
Article 14.5.
6.4 Subject to Articles 3.3, 3.4 and 6.3, in the event that
either Party fails to make its share of funding by way of
capital investment or loans or fails to provide for such
guarantees as approved by WAC and by resolution of the
Shareholders of WAC, if required, such failure shall be
deemed a serious default of a substantial obligation under
the Agreement pursuant to Article 14.2.
7. Auditors and Accounting Principles
7.1 The books of account and records of WAC and WCE shall be
audited annually by a public accountant of good standing
designated by CHI and MSI. The first auditors for both
entities has been designated as Coopers and Xxxxxxx. WAC and
WCE shall bear the costs of the audit as deemed most efficient
and appropriate by the WAC Board.
7.2 It is agreed that WAC and WCE, respectively, shall
provide without delay to CHI and MSI such reasonable reports
concerning the business and operations of WAC and WCE,
respectively, as may be requested by CHI or MSI, such as
periodic forecasts, cash flow reports and various other
financial reports. It is, further, agreed that each
shareholder, at its own expense, may from time to time
undertake its own audit or investigation of WAC and WCE,
respectively, using its own employees or a public accounting
firm. For such purpose, the Parties shall at normal business
hours have reasonable access to the books and records of WAC
and WCE relevant to such audit or investigation.
7.3 It is agreed that WAC and WCE, respectively, shall follow
sound accounting practice in accordance with accepted
professional standards and applicable laws and regulations.
7.4 In carrying out the purposes of this Article 7 the
following guidelines shall be followed to the extent
practicable and in keeping with sound economic and competitive
policy:
MSICHI4.DOC Page 10 of 22
7.4.1 The accounting and administrative functions of
WCE shall be done in the respective business locations by
internal employees or by third party contractors, subject to
the objectives stated in paragraph 2.2.3. Until such time as
otherwise agreed, the accounting and reporting required herein
shall be performed by CHI at a fee of $1,500 per month which
shall be reviewed for reasonableness from time to time as
agreed by the Directors.
7.4.2 Each shareholder of WAC shall bear its
own costs of its respective directors on the Board and
such other costs associated with the business of this
Agreement unless specifically provided for below.
7.4.2.1 The shareholder which is represented by the
current Managing Director shall be expected to supply
to WAC, through the services of the Managing Director
and others, the overall project management,
engineering, and safety for which the respective
Shareholder shall receive a fee of $3,000 per month
plus reasonable out-of-pocket business expenditures
such as travel, supplies, and meals away from home
which fee and reimbursed expenses shall be reviewed for
reasonableness from time to time as agreed by the
Directors.
7.4.2.2 Direct support personnel for
engineering, development, design, or marketing, when pre-
approved by the Board of Directors, shall be reimbursed to the
respective Shareholder at $150.00 per day including travel
time. Such per diem rate shall be adjusted from time to time
as agreed by the WAC Board of Directors The respective
Shareholder shall be reimbursed for reasonable out-of-pocket
business expenditures, including travel, supplies, lodging and
meals away from home. The Board of Directors shall review
such per diem rate and out-of-pocket expenses for
reasonableness from time to time and make such changes as they
shall agree.
8. Dividends
8.1 Subject to the objectives stated in paragraph 2, it is
the intention of the Parties that the maximum possible amount
of the profit of WAC and WCE, respectively, shall be
distributed to them as shareholders of WAC and that reserves
shall be kept to the lowest possible level, subject always to
applicable laws and regulations and good accounting and
operating practice.
9. Legal and Professional Costs
9.1 Each Party shall bear its own legal and other
professional costs and expenses in connection with the
preparation, negotiation and execution of this Agreement,
whether this Agreement ceases to be conditional or becomes
MSICHI4.DOC Page 11 of 22
null and void in accordance with Article 1, except for certain
organization and start-up costs incurred by either Party upon
agreement between the Parties, which costs shall be shared as
so mutually agreed.
10. Use of BME or MSI Name
10.1 The Parties agree that there shall be no reference to
the names or tradenames of the Parties or their Affiliates,
in connection with the business of WAC or its subsidiaries
unless it is expressly authorized in writing by CHI and MSI,
as applicable
11. Representations and Warranties
11.1 Subject to Article 1.1, MSI hereby represents and
warrants to CHI (all of such representations and warranties
are true and accurate as of the date hereof and at the date of
CHI's subscription of shares in WAC):
11.1.1 That MSI is duly organized, in good standing
and validly existing under the laws of the State of
Utah, United States of America and;
11.1.2 Has received all needed authority to enter into
this Agreement and is able and authorized to perform
according to its terms.
11.2 MSI shall, without prejudice to any other remedies,
fully indemnify CHI for any non-fulfilment of the
representations and warranties set out in Article 11.1.
11.3 Subject to Article 1.1, CHI hereby represents and
warrants to MSI (all of such representations and warranties
are true and accurate as of the date hereof and the date of
MSI's subscription of shares in WAC):
11.3.1 That CHI is duly organized, in good standing and validly
existing under the laws of Maritius; and
11.3.2 Has received all needed authority to enter into this
Agreement and is able and authorized to perform according to
its terms.
11.4 CHI shall, without prejudice to any other remedies, fully indemnify
MSI for any non-fulfilment of the representations and warranties set out in
Article 11.3.
12. Related Agreements
12.1 As soon as practically possible after the satisfaction
of the conditions pursuant to Article 1 above:
12.1.1 CHI and MSI, respectively, shall, directly or through an
Affiliate, sign and execute and CHI and MSI shall cause WAC to
sign and execute:
MSICHI4.DOC Page 12 of 22
12.1.1.1 A Supply Agreement
between each Shareholder if applicable and
WAC, substantially in the form of Attachment 1
hereto as may be applicable for closing and on
later dates, from time to time as agreed
between shareholders;
12.1.1.2 A Purchase and Transfer
Agreement between each Shareholder and WAC
substantially in the form of Attachment 2
hereto, as may be applicable for closing and on
later dates from time to time as agreed between
the Shareholders;
12.1.1.3 A Technology License
and Service Agreement between MSI and WAC,
substantially in the form of Attachment 3
hereto;
12.1.1.4 A Loan Agreement
between CHI and WAC substantially in the form
of Attachment 4 hereto;
12.1.1.5 A Loan Agreement
between MSI and WAC substantially in the form
of Attachment 5 hereto.
13. Pre-emptions and Transfer of Shares
13.1 During the term of this Agreement, no Party shall sell,
exchange, assign, transfer, pledge, hypothecate or otherwise
encumber or permit to become encumbered, give or otherwise
dispose of, whether any such disposition shall be voluntary
or involuntary or come about to be effected by operation of
law or pursuant to or in compliance with any judgment,
decree or order, rule or regulation of any administrative
body (any of said acts being hereinafter referred to as
"disposed of") any of the shares of WAC which such Party
initially will own or may thereafter acquire, except as
provided below in Articles 13.2, 13.3, or 13.4.
13.2 If a Shareholder shall receive a bona-fide offer to
purchase its Shares from a third-party who is not a
Shareholder or an Affiliate of a Shareholder and such
Shareholder (referred to in this paragraph 13.2 as "the
Seller") desires to sell its interests in WAC to such bona-
fide offeror, then the Seller shall within five (5) calendar
days from the receipt of such offer present the material terms
of the offer, including the name and address of the offering
third-party, to the other Shareholder who shall have a right
of first refusal to purchase the Seller's interests in WAC
under the same material terms and conditions. The other
Shareholder shall then have thirty (30) calendar days to
consider and either accept or reject the offer.
MSICHI4.DOC Page 13 of 22
13.2.3 If the other Shareholder has not exercised its right of
first refusal within the thirty (30) day time period , it
shall be deemed to have waived its right of first refusal or
any other preemptive right it shall have under the by-laws of
WAC or the laws of Mauritius with respect to this particular
transaction and the Seller may sell its interest to such bona-
fide offeror under the same material terms and conditions last
presented to the other Shareholder.
13.2.4 If the material terms and conditions under which the
final sale is made or is proposed to be made to the bona-fide
offeror are not the same as those last presented to the other
Shareholder, then the sale or proposed sale shall be invalid.
The Seller shall then be required to offer the changed
material terms and conditions anew to the other Shareholder
with the same time periods provided in 13.2 applying once
again. If the other Shareholder does not timely exercise its
first right of refusal then 13.2.1 shall apply.
13.2.5 If the other Shareholder timely exercises its right of
first refusal, then the Seller shall be obligated to sell to
the other Shareholder without any recourse, remuneration or
offset to the bona-fide offeror for expenses or loss of
opportunity which may have arisen on the part of the bona-fide
offeror or the Seller. However, the other Shareholder shall be
obligated to fulfill the payment and other material terms as
provided in the last offer and if not, the selling Shareholder
shall have, in addition to other remedies provided in this
Agreement or in law or equity, (1) an option to treat such
default as a serious breach of a material obligation of this
Agreement or (2) to sell its shares to any bona-fide offeror
under reasonable terms and conditions and within a reasonable
time following the date of the default. The selling
Shareholder shall in either case, notify the defaulting Party
in writing within twenty (20) working days of its intended
course of action.
13.3 A Shareholder may dispose of all or any part of its
shares of WAC to any company which is an Affiliate of the
Shareholder. In the event of any such disposition, the
Shareholder will promptly notify the other Shareholder
thereof, and it will provide that any such assignee shall in
all respects comply with the provisions of this Agreement
and the shares acquired by such assignee shall continue to
be subject to the terms and conditions of this Agreement to
the same extent and in the same manner as if such shares
were still owned by the Shareholder, it being understood
that such disposition shall not affect the status of such
Shareholder as a Party, guarantor or warrantor under this
Agreement, unless the transferring Shareholder shall provide
in writing, prior to such transfer, such indemnities,
guarantees and other documentation to reasonably protect the
other Shareholder against erosion of financial or legal
capacity which may result from the transfer as the other
Shareholder shall reasonably request in writing within ten
(10) working days following written notice of the
Shareholder's intent to transfer.
MSICHI4.DOC Page 14 of 22
13.4 The Shareholders of WAC may purchase or sell their
interests in WAC to each other as they may mutually agree in
writing.
13.5 Any increase or decrease of shares or any increase or
decrease in the claims against WAC, not due to a sale or
purchase of shares, required by this Agreement, law,
administrative authority or otherwise shall be made in such a
manner so as to preserve the then current pro rata ownership,
obligations, rights to assets, payments of claims against WAC,
dividends or retained earnings, and voting control of the
Shareholders, as between themselves, unless the Shareholders
shall mutually agree otherwise in writing or shall unanimously
pass such a resolution at a meeting of the Shareholders of
WAC.
13.6 If at any time there are more than two Shareholders of
WAC, then a reference in this Agreement to a Shareholder or
Shareholders shall also include such additional Shareholders
on a pro rata basis.
13.7 Any disposal of shares to any non-shareholder of WAC
shall be subject to the condition that the transferee shall
undertake in writing not to operate in competition with the
business of WAC while it is a shareholder.
13.8 Any Shareholder who disposes of its shares as
contemplated in this clause 13 shall be entitled to
stipulate as a condition of such sale that:
13.8.1 The disposing Shareholder shall be released pro rata to
the number of shares sold, as a surety or guarantor or
indemnitor on behalf of WAC, subject to the purchaser(s) of
the shares in question binding himself as surety or guarantor
or indemnitor in its stead and having at least as strong a
financial condition as the disposing Shareholder.
13.8.2 If the release contemplated in clause 13.8.1 cannot be
achieved, or pending such release being implemented, the
disposing shareholders shall be indemnified by the purchaser
of the shares pro rata to the number of shares sold against
any claims made against the disposing shareholder by reason of
such suretyships, guarantee or indemnity.
14. Term of this Agreement
14.1 This Agreement shall remain in force perpetually unless
otherwise agreed to in writing or until such time as
substantially all business of WAC and its subsidiaries has
terminated in the Territory, unless earlier terminated in
accordance with Articles 14.2, 14.3 and 14.4 .
14.2 Either Party shall have the right to terminate this
Agreement with immediate effect by notice in writing to the
other Party with reference to this Article 14.2 in the event
that:
MSICHI4.DOC Page 15 of 22
14.2.1 The other Party shall be in serious default
of any of its substantial obligations under this
Agreement and shall have failed to make good such
default within sixty (60) calendar days after having
been notified in writing to do so by the terminating
Party; or
14.2.2 The other Party is declared bankrupt or is
otherwise found to be insolvent.
14.3 In the event that a Party should cease to be a
shareholder in WAC otherwise than pursuant to the provisions
of Article 13.2 and 13.3, this Agreement shall immediately
terminate and in the case of Article 13.2, the Director(s)
appointed by such Party shall immediately resign.
14.4 This Agreement shall automatically terminate:
14.4.1 Upon the dissolution, liquidation or
bankruptcy of WAC ;
14.4.2 At such time as one of the Parties owns all
of the other Party's shares in WAC and claims of the
Shareholders against WAC ; or
14.4.3 At such time as a person other than the
Parties hereto owns all of the shares in WAC of the
Parties hereto.
14.5 In case one of the Parties terminates this Agreement in
accordance with paragraph 14.2, the terminating Party shall
have the right to purchase the other Party's shares in WAC.
The terminating Party shall within five (5) calendar days
after the date of notification of termination provide notice
to the other Party of its intention to purchase the other
Party's shares in WAC setting forth the material terms. The
purchase price offered for such shares shall be equal to
the fair market value (herein "FMV") of those shares.
Failing agreement on the material terms or the issue of FMV
within twenty (20) calendar days after notice of the
decision to purchase is received by the other Party, the
Parties shall submit the matters to arbitration as provided
in Article 17. Further, the provisions of Article 15 shall
be extended and apply to the defaulting Party until the
third anniversary of the termination of this Agreement.
14.6 In the event of a termination pursuant to Article 14.1,
excluding termination under Article 14,2, but including
Articles 14.3 or 14.4, if applicable, and the Parties cannot
agree to the terms of the termination within twenty (20)
days from the date of the decision to terminate or the act
or occurrence which has created termination, the business of
WAC shall be wound up. If there is a disagreement as to
whether substantially all of the business of WAC and its
subsidiaries has terminated, then the matter shall be deemed
a Material Issue and be dealt with pursuant to Article
4.1.2.1.
MSICHI4.DOC Page 16 of 22
14.7 In the event that the Parties cannot agree on the FMV
when applicable herein, it shall be determined by
arbitration in accordance with Article 17.
15. Non-Competition
15.1 Without the prior written consent of the other
Party, neither of the Parties or any of their Affiliates
shall, during the term of this Agreement, directly or
indirectly invest, acquire an interest or otherwise in anyway
compete with the business of WAC or any of its subsidiaries in
the Territory.
16. Insurances
16.1 It is agreed and understood that WAC and WCE,
respectively, shall procure and maintain appropriate
insurances, such as property insurances and public liability
insurances.
17. Disputes and Applicable Law
17.1 All disputes and differences, other than the failure to
pass a resolution by the directors or the Shareholders that
might arise between or among the Parties hereto in
connection with, or arising out of this Agreement, whether
during the term hereof or after termination or breach, shall
be referred to and finally settled by arbitration pursuant
to the following:
17.1.1 If the issue in dispute relates to business,
financial or value issues, such issues shall be
submitted within ten (10) working days from the date
of determination that a dispute exists between the
Shareholders to a partner of an internationally
recognized accounting firm having demonstrable and
extensive industry experience in auditing and
valuing international transactions. If the Parties
cannot agree on a firm, then each Party shall choose
a firm within the same ten (10) day period referred
to above, and the two partners from such firms shall
immediately select jointly a firm meeting the
qualifications herein stated which shall not be an
auditor of WAC or any of its subsidiaries. The
matter shall then immediately be submitted to such
firm and it shall appoint a qualified partner,
acting as an expert and not as an arbitrator, to
listen to the position of both Parties and taking
into account the facts and circumstances shall make
a determination which decision shall be final and
binding upon the Parties.
17.1.2 If the issue is a dispute involving the
interpretation or application of laws, such issue
shall be submitted to the Law Society of England
MSICHI4.DOC Page 17 of 22
and Wales within ten (10) working days from the date
of determination that a dispute exists between the
Shareholders. The Law Society of England and Wales
shall immediately appoint a solicitor who shall be
competent and experienced in International law and
shall have substantial international transaction
experience. A decision of the solicitor so chosen
shall be final and binding upon the Parties.
17.1.3 This agreement, unless otherwise provided
herein or agreed to between the parties shall in all
respects be construed and /or interpreted in terms
of the substantive law of England and the parties
hereby irrevocably submit to such jurisdiction.
17.1.4 If it is unclear as to whether or not the
issue being presented for arbitration should be
referred to as a business, financial or value issue,
or as a legal issue, it shall be deemed to be a
business, financial or value issue.
18. Force Majeure
18.1 Save as is otherwise specifically provided in this
Agreement, the Parties hereto shall not be liable for
failures or delays in performing their respective
obligations hereunder arising from strikes, lockouts or
labour disputes or from any cause beyond their control,
including but not limited to acts of God, acts of civil or
military authority, fires, epidemics, governmental
restrictions, wars, riots, earthquakes, storms, and floods
and in the event of any such delay, the time for performance
of the Party shall be extended for a period equal to the
time lost by reason of the delay.
19. Transfer or Assignment
19.1 Except as provided in Article 13, the Parties hereto
shall not transfer or assign all or any of their rights,
obligations or benefits hereunder to any third party or
parties.
20. Miscellaneous
20.1 Each of the Parties hereto hereby represents to the
other that the execution and delivery of this Agreement and
the performance thereof will not contravene or constitute a
default under its constitution, by-laws or any other
agreement, instrument or other form of commitment to which
any Party hereto is also bound.
MSICHI4.DOC Page 18 of 22
20.2 No failure or delay on the part of any Party hereto in
exercising any power or right hereunder shall operate as a
waiver thereof nor shall any single or partial exercise of
such right or power preclude any other or further exercise
of any other right or power hereunder.
20.3 In the event of any conflict between the terms of this
Agreement and the WAC By-laws or the WCE By-laws, the terms
of this Agreement shall as between the Parties hereto
prevail and the Parties shall forthwith cause such necessary
alterations be made to the By-laws as are required so to
resolve such conflict.
20.4 Each of the Parties agrees that in all matters
concerning WAC or WCE for which it shall be called upon to
exercise its rights to vote as a shareholder, such rights
shall be exercised in good faith in every case and in con
formity with the specific provisions and spirit of this
Agreement.
20.5 For the purpose of this Agreement, an "Affiliate" shall
be deemed to be (i) any company or other entity which is
controlled, directly or indirectly, by a Party hereto, and
(ii) any person, company or other entity which controls,
directly or indirectly, a Party hereto, and (iii) any
company or other entity which is, directly or indirectly,
under common control with a Party or its controlling person,
company or other entity. By "is controlled", "controls", or
"under control" shall be understood as denoting ownership
and voting power of more than fifty (50) per cent of the
capital shares or other form of equity representing the
ownership and voting power of the entity in question.
20.6 Each Party will promptly advise the other Party in
writing of any notice or claim by any third person,
including the commencement of any suit or action, received
by or brought against it in relation to the business of WAC
or WCE. None of the Parties shall be authorized to settle
any such claim, suit or action or to make any admission
which may be prejudicial to the interest of the other Party
without the prior written consent of the other Party. CHI
and MSI shall consult with one another as to the course of
action to be taken against any such suit, claim or action.
20.7 Except as otherwise expressly provided herein, in no
event shall any of the Parties be liable under this Article
20 to the other Party for any special, incidental, conse
quential, punitive or indirect losses or damages whatsoever,
including but not limited to loss of profit or revenue, loss
of production or loss of goodwill.
21. Confidentiality
MSICHI4.DOC Page 19 of 22
21.1 Because CHI and MSI and their Affiliates and agents or
its subsidiaries desire to fully support and cooperate with
each other in order to accomplish the objectives of WAC and
WCE, it is important that technology, proprietary rights,
trade secrets and confidential information be shared.
Accordingly, CHI and MSI agree to keep "Confidential
Information" and "Proprietary Information" confidential and
use such information only as required in compliance with
this Agreement. The duty to keep Confidential Information
and Proprietary Information confidential and to use such
information only for purposes described herein shall survive
the termination of this Agreement.
21.2 As used in this Agreement "Confidential Information"
means any and all data or information related to the
business of a Party to this Agreement or WAC or its
subsidiaries (the "Delivering Party") which the other Party
(the "Receiving Party") becomes aware of during the course
or as a consequence of the association between the Parties
and is generally treated by the Delivering Party as
confidential (whether or not it is marked "confidential" or
designated as such when it is conveyed to the Receiving
Party). Confidential Information may include, without
limitation, Proprietary Information (as defined herein) and
information relating to the financial affairs, products,
processes, customers, employees, distributors, research,
development, and other matters that are important to the
general operation and business of the Delivering Party;
provided, however, that the information shall not be
considered confidential if it (i) is available or becomes
available to the public generally, or (ii) was already in
the possession of the Receiving Party at the time of such
delivery, or (iii) is received from another person or entity
having lawful possession thereof and having no obligation of
confidentiality to the Delivering Party.
21.3 "Proprietary Information" means all of the know-how,
materials and information (whether or not reduced to writing
and whether or not patentable or protectable by copyright)
relating to the business of the Delivering Party and which
the Receiving Party receives, has access to, conceives or
develops, in whole or in part, as a direct or indirect
result of the Receiving Party's association with the
Delivering Party or through the use of the Delivering
Party's facilities or resources.
22. Notices
22.1 All notices, requests, demands or other communications
under this Agreement or in connection therewith, unless
otherwise specifically provided herein, shall be given or
made in writing and shall be given by prepaid registered
airmail, courier or by cable, telefax or telex authenticated
by answer-back code and in any event addressed to the Party
to which such notice is to be given at the address of such
MSICHI4.DOC Page 20 of 22
Party written below or to its cable, telefax or telex
address, as may be applicable, or, in the event of any
change of any such address, at such other address. Any
notice despatched in conformity with this Article shall be
deemed to have been effected at the time at which the same
is received by the Party to whom it is addressed.
CHI Attn: Xxxx Xxxx-Xxxxxx
CHEMICAL HOLDINGS INTERNATIONAL LTD
0xx Xxxxx, Xxxxxxxxx Xxxxx, Xx. Xxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxxxxx
telephone : (000) 0000000
fax : (000) 0000000
OG ATTN: Xxxx Xxxxxx
OMNIA GROUP LTD
Omnia House
00 Xxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx-0000
Xxxxx Xxxxxx
Telephone: 00-00-000-0000
Telefax: 00-00-000-0000
MSI MINING SERVICES INTERNATIONAL
ATTN: Xxxx X. Day
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx X-000
Xxxx Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
23. Entire Agreement
23.1 This Agreement embodies all the terms and conditions
agreed upon between the Parties at to the subject matter of
this Agreement and supersedes and cancels in all respects all
previous agreements and undertakings, if any, between the
Parties hereto with respect to the subject matter hereof,
whether such be written or oral.
24. Interpretation
24.1 The headings of the Articles of this Agreement are to
facilitate reference only and do not form a part of this
Agreement, and shall not in any way affect the
interpretation hereof.
24.2 No oral explanation or oral information by the Parties
hereto, or any of them, shall alter the meaning or
interpretation of this Agreement.
MSICHI4.DOC Page 21 of 22
24.3 This Agreement shall be amended only in writing and each
and every amendment hereto shall be executed.
SIGNED and DATED this 12th day of February, 1997 by
/s/ Xxxx X. Day /s/ Xxxx Xxxxxx
---------------------------- ---------------------------------------
Xxxx X. Day representing MSI Xxxx X. Xxxxxx representing CHI, being duly
authorized by a resolution of Directors
dated February 7, 1997 to sign this Agreement
at Salt Lake City, Utah at Salt Lake City
------------------------- --------------------------
/s/ Xxxx X. Xxxxxx
_________________________________
Xxxx X. Xxxxxx representing OMNIA GROUP Limited,
being duly authorized by a resolution of Directors
dated February 7, 1997 to sign this Agreement
at Salt Lake City, Utah
-------------------------------
MSICHI4.DOC Page 22 of 22
TECHNOLOGY LICENSE AND SERVICE AGREEMENT
THIS TECHNOLOGY LICENSE AND SERVICE AGREEMENT (herein "Agreement") is
made and entered into this 12th day of February, 1997, by and between
MINING SERVICES INTERNATIONAL CORPORATION, (a company duly organized and
existing under the laws of Utah, United States of America), having a
principal place of business at 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx X-000, Xxxx
Xxxx Xxxx, Xxxx (herein "MSI") and XXXX HOLDING COMPANY (herein "XXXX"), a
company duly organized and existing under the company laws of Grand Cayman,
Cayman Islands.
WITNESSETH
WHEREAS MSI and XXXX (herein "the Parties") desire to amend the license
agreement previously made between XXXX and MSI,
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth herein and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged by the Parties, the Parties agree
as follows:
1.0 DEFINITIONS.
1.1 "MSI EXPLOSIVES TECHNOLOGY" means TECHNICAL INFORMATION and KNOW-HOW
relating to the composition, manufacture and delivery of bulk blasting
agents and explosives and packaged blasting agents and explosives.
1.2 "TECHNICAL INFORMATION" means any confidential or proprietary
technical information, know-how, patents, trade secrets, trademarks,
formulations, detailed drawings, data, methods, processes, specifications,
quality and inspection standards, pricing and cost information, sales
literature, reports, and training materials in any way related to or
connected with the composition, manufacture and delivery of bulk blasting
agents and explosives and packaged blasting agents and explosives which are
trademarked or related to HEFr or EMGELr, together with all modifications,
improvements, enhancements, inventions and acquisitions of any intellectual
property relating to any of the foregoing owned, acquired or supplied by
MSI, and any of its subsidiaries, or XXXX and any of its sub-licensees.
1.3 "KNOW-HOW" means all TECHNICAL INFORMATION and commercial information
in the possession of MSI at any time during the term of this Agreement and
which MSI has a legal right to license to XXXX and its Affiliates relating
to the composition, formulation, manufacture or use of the PRODUCTS and to
equipment associated with the manufacture and use of the PRODUCTS and to
the commercial exploitation in the TERRITORY of such PRODUCTS or equipment;
and including without limitation all information embodied in engineering
drawings, technical specifications, sales literature, training materials
and technical and market reports.
DAWNLIC7.DOC Page 1 of 13
1.4 "PRODUCTS" means compositions, blasting agents and explosives
compounded in accordance with MSI EXPLOSIVES TECHNOLOGY. "BULK PRODUCTS"
means compositions, blasting agents and explosives compounded in accordance
with MSI EXPLOSIVES TECHNOLOGY specifically associated with bulk explosives
and "PACKAGED PRODUCTS" means compositions, blasting agents and explosives
compounded in accordance with MSI EXPLOSIVES TECHNOLOGY specifically
associated with packaged explosives.
1.5 "EQUIPMENT" means any mixing device or apparatus either mobile or
fixed, or any component thereof, designed or built in accordance with any
item of the MSI EXPLOSIVES TECHNOLOGY.
1.6 "MARKET PRICE" for PRODUCTS means the invoiced selling price at which
PRODUCTS are sold in an arms length sale exclusive of valued added tax or
any like tax on sales to a customer, increased or decreased as follows:
a. If the invoiced selling price does not include certain raw
materials used in the PRODUCTS, such as nitrates, which may be purchased
and supplied to or by the customer separately, then the invoiced selling
price shall be increased by the STANDARD INGREDIENT COSTS of such raw
materials.
b. If the invoiced selling price covers the costs of raw materials,
and such raw materials are supplied by an outside party (non-Affiliate of
XXXX or sub-licensee) to XXXX or its sub-licensees, then the invoiced
selling price shall be decreased by the amount by which the actual raw
material costs exceeds the STANDARD INGREDIENT COSTS of such raw material.
1.7 "STANDARD INGREDIENT COSTS" means those costs shown in Schedule
1, which shall be adjusted in January of each year as mutually agreed in
writing. Such costs shall be based on competitive pricing to the customer,
including freight but excluding any value added tax or like tax on sales.
1.8 "TERRITORY" during the amended term of this Agreement means all of
subequatorial Africa which includes all countries which intersect or are
south of the equator and, in addition, Madagascar and certain islands in
the Indian Ocean which are included in the geographical location south of
the equator, west of 60 deg. longitude, north of 30deg latitude and east of the
African Continent. As used herein the "Prior Countries" shall include the
Republic of South Africa, Lesotho, Swaziland, Botswana, Namibia, Mauritius,
Zimbabwe, but does not include the Xxxxxxx Mine. The "New Countries," shall
include all countries in the TERRITORY not included in the Prior Countries.
1.9 "Affiliates" shall be deemed to be (i) any company or other entity
which is controlled, directly or indirectly, by a Party hereto, and (ii)
any person, company or other entity which controls, directly or
indirectly, a Party hereto, and (iii) any company or other entity which
DAWNLIC7.DOC Page 2 of 13
is, directly or indirectly, under common control with a Party or its
controlling person, company or other entity. By "is controlled", "con
trols", or "under control" shall be understood as denoting ownership and
voting power of more than fifty (50) per cent of the capital shares or
other form of equity representing the ownership and voting power of the
entity in question.
2.0 Terms and Conditions
2.1 MSI hereby extends and grants to XXXX, subject to the terms and
conditions set forth herein, the exclusive right and license to use the MSI
EXPLOSIVES TECHNOLOGY utilizing the TECHNICAL INFORMATION and KNOW-HOW
including, the right to use such MSI EXPLOSIVES TECHNOLOGY in
manufacturing, the right to sell and market PRODUCTS in the TERRITORY, and
the right to manufacture and use EQUIPMENT in the TERRITORY perpetually
except as provided in Sections 2.3 and 2.5 (herein the "LICENSE"). The
LICENSE may be separated into a LICENSE for BULK PRODUCTS and/or a LICENSE
for PACKAGED PRODUCTS as may be required under the terms of this
Agreement.
2.2 The LICENSE includes the right to grant further sub-licenses, subject
to the terms of this Agreement. The provisions of this Agreement shall
apply to every sub-license as if the sub-licensee were bound to MSI by the
same obligations as apply in this Agreement to XXXX unless MSI consents
otherwise in writing. XXXX agrees to bind every sub-licensee accordingly.
XXXX shall be liable to MSI for the performance of the sub-licensee of all
its obligations to MSI in respect of the sub-licensee.
2.3 This LICENSE shall be exclusive for ten (10) more years and two months
from November 1, 1996 for both BULK PRODUCTS and PACKAGED PRODUCTS and
related EQUIPMENT to December 31, 2006. XXXX shall have the right to
cancel the License following December 31, 2006 by one year's written notice
to MSI. MSI may not utilize the MSI EXPLOSIVES TECHNOLOGY or grant
licenses in respect thereto in the TERRITORY during the term of the
exclusivity of this agreement, unless otherwise agreed in writing or unless
otherwise provided in this Agreement.
2.4 XXXX shall actively promote and cause its sub-licensees to actively
promote the MSI EXPLOSIVES TECHNOLOGY in the TERRITORY for BULK and
PACKAGED PRODUCTS and will use MSI EXPLOSIVES TECHNOLOGY during the term
provided in section 2.3 as long as it is competitive. However if XXXX
finds the MSI EXPLOSIVES TECHNOLOGY noncompetitive when considering
royalty, development, raw material and manufacturing costs, XXXX shall have
the right to use technology other than MSI EXPLOSIVES TECHNOLOGY, either
acquired from third parties or legally developed from a source unrelated to
the MSI EXPLOSIVES TECHNOLOGY, but only after giving MSI the right of first
refusal and a reasonable period of time to match the competitiveness of the
other explosives technology.
DAWNLIC7.DOC Page 3 of 13
2.5 Should XXXX or any of its sub-licensees elect to use such other
explosives technology in any of the New Countries, MSI shall have the
right to terminate the exclusivity provided in section 2.3 in that country
and the License shall become non-exclusive. In addition, if and when XXXX
or any of its sub-licensees have substantially discontinued the use of
either or both of the BULK PRODUCTS or the PACKAGED PRODUCTS in favor of
another technology, and in good faith and fair dealing MSI and XXXX
determine that XXXX will not actively promote or cause that its sub-
licensees shall actively promote the BULK PRODUCTS and/or the PACKAGED
PRODUCTS in any country within the TERRITORY, then such country shall be
removed from the TERRITORY with respect to the BULK and/or PACKAGED
PRODUCTS, as applicable, upon six-months written notice to XXXX and its
respective sub-licensees. Upon removal from the TERRITORY, XXXX or any of
its sub-licensees shall not use, manufacture or market the related BULK
and/or PACKAGED PRODUCTS nor any of the related EQUIPMENT in that country
and MSI shall be free to market, manufacture and promote the BULK and/or
PACKAGED PRODUCTS and related EQUIPMENT, as applicable, in that country.
XXXX shall then return to MSI all TECHNICAL INFORMATION, with the exception
of pricing and cost information and sales literature, in its possession
with respect to that country terminated from the TERRITORY.
2.6 During the term of the exclusivity of the LICENSE as provided in
section 2.3 , should MSI find a bonefide business opportunity for PACKAGED
PRODUCTS in any of the New Countries, MSI shall inform XXXX and any of its
respective sub-licensees of this opportunity so that XXXX may take
advantage of it. XXXX shall have a six (6) month period to review the
opportunity in which to notify MSI of its good faith intention to develop
such opportunity within the next twelve (12) months. Should XXXX not give
notice within the six month period that it desires in good faith to pursue
such opportunity or in fact fails to develop the opportunity within twelve
(12) months following the date of notice from XXXX, then MSI shall have the
right to convert the LICENSE for PACKAGED PRODUCTS in that country to non-
exclusive, only if MSI does in fact develop such opportunity, so that MSI
may move forward to manufacture, market or obtain another licensee in that
country for PACKAGED PRODUCTS and related EQUIPMENT. MSI shall properly
notify XXXX in writing of its intention to pursue such business opportunity
in the event that XXXX has not met its good faith efforts to develop the
opportunity as provided in this paragraph.
2.7 In the event of the sale of MSI to a third party, and in addition to
it's existing contractual rights, XXXX shall have the right to either:
a. Offset royalty payments should support for the LICENSE
deteriorate which right shall remain in effect until other remedies set
forth in the contract have been executed and their disposition is final, or
b. Have the right to convert the agreement into a paid-up royalty
for the TERRITORY by paying an amount equal to the product of the royalty
paid during the previous 12 months times an amount which equals the sum of
five plus one-half of the remaining years on the contract divided by two.
DAWNLIC7.DOC Page 4 of 13
In such case the license will become non-exclusive after the equivalent
time period has expired. An example of the formula follows:
Paid-up Royalty = Annual Royalty X ((5 + 1/2 REMAINING YEARS) / 2)
2.8 MSI warrants that the right and license to use the MSI
EXPLOSIVES TECHNOLOGY granted under this Agreement to XXXX is authorized,
legal and binding upon MSI and that it has not granted any license or sub-
license for the TERRITORY to any other person or entity, including any of
its Affiliates. XXXX warrants that any sub-licenses granted to any of its
sub-licensees remains authorized, legal and binding upon XXXX and is bound
to this Agreement and has not been transferred or acquired by any other
person or entity including any of its prior or existing Affiliates.
2.9 With the exception of Sishen, as stated in 2.12, XXXX shall pay MSI a
royalty on BULK PRODUCTS sold or used in the Prior Countries at the
current rate existing between BME and XXXX until December 31, 1996 and then
beginning on January 1, 1997 at a rate of 2.36 percent of the MARKET PRICE
which royalty rate shall be non-negotiable for a period of five years and
then at a rate of 1.86 percent of the MARKET PRICE for the remaining five
years of the extension period provided in section 2.3 (during which time
period the royalty rate may be renegotiated).
2.10 XXXX shall pay MSI a royalty on BULK PRODUCTS sold or used in the New
Countries at a rate of 4.00 percent of the MARKET PRICE for the first five
years (during which period this royalty is not to be renegotiated) and two
months of the extension provided in paragraph 2.3 and a rate of 3.00
percent of the MARKET PRICE for the remaining five years (during which time
period the royalty rate may be renegotiated).
2.11 XXXX shall pay MSI a royalty on PACKAGED PRODUCTS sold or used in the
TERRITORY at a rate of 5.00 percent of the MARKET PRICE for the first 5
years (during which period this royalty is not to be renegotiated) and two
months of the extension provided in paragraph 2.3 and at a rate of 4.00
percent of the MARKET PRICE for the remaining five years (during which time
period the royalty rate may be renegotiated).
2.12 MSI and XXXX shall work together to resolve the royalty rate from the
Sishen mine with the intent that this royalty shall be maintained in the
LICENSE at a rate of 5.0% and shall be adjusted from time to time as
mutually agreed with the intent that both MSI and XXXX shall share in the
Royalty benefits. This will require MSI to resolve the payment of 1/4 of
the royalty from Sishen to Xx. Xxxx X. Wahlhaus (herein "XXX").
2.13 The royalties provided herein shall be payable on a monthly basis,
becoming due on the twenty-fifth day of the month following the month in
which the production is completed and on which the royalty is computed.
The exchange rate for converting the royalty from the country of origin
into US dollars shall be set at the date of payment, but in no case later
than the twenty-fifth day of the month following the month in which the
production is completed and on which the royalty is computed. The exchange
DAWNLIC7.DOC Page 5 of 13
rate shall be that which is published in the Wall Street Journal or as
published by an acceptable commercial or central bank as agreed between the
Parties. With respect to royalties due and payable from in the Republic of
South Africa, the conversion from Rands to US dollars shall be the exchange
rate quoted by the First National Bank of Southern Africa Limited. If the
Purchaser fails to fulfill any condition of the terms of payment of this
Agreement and if such non-fulfillment is not rectified by XXXX within
thirty (30) days following notice thereof, MSI may terminate this Agreement
with immediate effect without incurring any liability towards XXXX or any
of its sub-licensees. Payments shall be made in US dollars at the
following bank:
Key Bank of Utah
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
ABA# 000000000
Account # 440411142209
Account Name: MINING SERVICES INTERNATIONAL
2.14 If it is required that royalty payments are subject to
withholding taxes, then XXXX or its sub-licensees shall deduct such
withholdings up to fifteen percent (15%) of the gross royalty from its
payment to MSI. If the withholding rate exceeds fifteen percent (15%),
then MSI and XXXX shall agree in writing to an alternate rate of royalty.
2.15 XXXX shall keep proper books of account with reference to all
operations within the scope of this Agreement. Such books of account shall
be open at all times during office hours for MSI or MSI's authorized
representatives to inspect and to make any abstracts or copies thereof
which MSI may consider necessary for the purposes of verifying the
royalties due or paid.
2.16 XXXX shall submit to MSI a report within thirty (30) days
following the close of the month in which the production is completed and
on which the royalty is computed showing a summary of the turnover, the
amount of gross royalties, withholdings, net payable in the currency of the
Country of origin, the exchange rate utilized, the authority for the
exchange rate used, and the net amount and date remitted in US currency.
The report should be prepared with the royalties computed by sub-licensee
or by mine as XXXX and MSI shall mutually agree.
2.16.1 XXXX shall keep or cause to be kept proper books of account
with reference to all operations and those of its sub-licensees within the
scope of this agreement. Such books of account shall be open at all times
during office hours at DAWN's offices or at the principal offices of any
sub-licensee of XXXX for MSI or MSI's authorized representative to inspect
and to make any abstract or copies thereof which MSI may consider necessary
for the purposes of verifying the royalties due or paid. If MSI intends to
visit the offices of any sub-licensee, it shall timely notify XXXX of its
intended visit by giving XXXX at least ten (10) calendar days notice.
DAWNLIC7.DOC Page 6 of 13
2.16.2 XXXX shall submit to MSI a report within 30 days following
the close of each CALENDAR YEAR, which report shall be verified and signed
by DAWN's auditors and shall set forth in respect of that CALENDAR YEAR:
a. The total quantity of LICENSED PRODUCTS and EQUIPMENT sold or
otherwise disposed of by XXXX in the TERRITORY and the MARKET
PRICE of all such LICENSED PRODUCTS and EQUIPMENT;
b. The amount of royalties payable to MSI and to XXX based on each
transaction as specified herein;
c. The names and addresses of all sub-licensees of XXXX and
similar information in respect of them as is required in sub-
clause 2.16.2 a. above.
3.0 INDEMNITY.
3.1 XXXX agrees to indemnify, hold harmless and defend MSI and their
officers, employees, and agents, against all claims, suits, losses,
damages, costs, fees and expenses for bodily injury resulting from or
arising out of exercise of this LICENSE or DAWN's use or sub-license of the
MSI EXPLOSIVES TECHNOLOGY.
3.2 If XXXX or any of its sub-licensees are made a defendant in a
lawsuit as a result of any claim of infringement of a patent, trademark,
copyright or the like in the TERRITORY, arising out of the manufacture, use
or sale of LICENSED PRODUCTS or EQUIPMENT, MSI shall:
3.2.3 Defend or settle, at its own expense, any such claim or
lawsuit, and
3.2.2 Pay all costs, expenses and other monetary obligations actually
incurred by XXXX in such lawsuit; provided, however, nothing in this
sub-clause shall be interpreted as requiring MSI to pay any such
costs, expenses or damages arising out of the restriction or
termination of the business of XXXX or any of its sub-licensees as
a result of any such lawsuit.
4.0 ADDITIONAL TECHNICAL ASSISTANCE.
4.1 MSI shall communicate to XXXX all developments in the KNOW-HOW by way
of written reports at intervals of not more than six (6) months to enable
XXXX to keep abreast of new technology and market information.
DAWNLIC7.DOC Page 7 of 13
4.2 All rights in the KNOW-HOW supplied to XXXX hereunder shall, between
MSI and XXXX including any of its sub-licensees, be and remain the property
of MSI.
4.3 MSI agrees to provide engineering and technical advice and
assistance to XXXX at the reasonable requests of XXXX, with respect to
methods and processes of manufacture, marketing, distribution, use and sale
of the LICENSED PRODUCTS and EQUIPMENT by XXXX or any of its sub-licensees.
4.4 MSI further agrees that it will from time to time during the
currency of this agreement when so requested by XXXX send qualified
personnel to the of South Africa for the purpose of advising and providing
technical assistance to XXXX relating to the formulation, manufacture,
marketing, distribution, use and sale of LICENSED PRODUCTS and EQUIPMENT.
The Parties shall in each instance determine in advance the number of
personnel and the duration and time of stay in South Africa of such
personnel; provided that MSI shall not be required to furnish the services
of personnel in excess of twenty working man-days within any CALENDAR YEAR,
nor shall MSI be required to furnish more than one person at any one time.
The travel and living costs of personnel dispatched to South Africa on
behalf of XXXX or any of its sub-licensees shall be born by XXXX in the
TERRITORY. These costs shall be paid for by XXXX in the first instance.
5.0 IMPROVEMENTS AND DEVELOPMENTS.
5.1 Each Party hereto shall promptly disclose to the other all
improvements and developments of the MSI EXPLOSIVES TECHNOLOGY, PRODUCTS,
and EQUIPMENT which either Party may come to possess and which such Party
is at liberty to disclose to the other Party. The only circumstance in
which a Party shall not be at liberty to make such disclosure shall be
when that Party is prevented by legislation or other governmental or
official prohibition from making the disclosure, or if that Party is
prevented from making disclosure by reason of a contractual obligation or
law.
5.2 All such improvements and developments which come into the possession
of MSI shall be made available to XXXX subject to the terms of this
Agreement.
5.3 If XXXX makes any improvements in or developments of the PRODUCTS or
EQUIPMENT as a result of DAWN's independent efforts, XXXX will be obliged,
in addition to its obligations under section 5.1, to assign in writing all
rights in the improvements or developments to MSI and MSI may in its
discretion apply for and obtain patent protection or other legal protection
therefor. XXXX acknowledges that all, patents, inventions or other
innovations made by it in this regard will be or will become the exclusive
property of MSI if they relate to the MSI EXPLOSIVES TECHNOLOGY, PRODUCTS
or EQUIPMENT. XXXX may use or sub-license such developments, improvements,
inventions, or innovations under the terms of this Agreement. However, if
as a result of any invention or innovation made substantially by DAWN's
independent efforts or independent know-how which, by virtue of this
DAWNLIC7.DOC Page 8 of 13
section, becomes the property of MSI and MSI reaps a substantial monetary
benefit thereby, then in good faith, but at the sole discretion of MSI, MSI
shall reward XXXX with an equitable share of such benefit. Any reference to
XXXX in this paragraph shall also include any of its sub-licensees.
6.0 INDEPENDENCE OF THE PARTIES.
6.1 This Agreement shall not constitute the designation of either Party as
the representative or agent of the other, nor shall either Party by this
Agreement have the right or authority to make any promise, guarantee,
warranty or representation, or to assume, create, or incur any liability or
other obligation of any kind, express or implied, against or in the name of
or on behalf of the other.
7.0 CONFIDENTIALITY.
7.1 Because XXXX and MSI and their Affiliates and sub-licensees desire to
fully support and cooperate with each other in order to accomplish the
objectives of this Agreement, it is important that technology, proprietary
rights, trade secrets and confidential information be shared. Accordingly,
XXXX and MSI agree to keep "Confidential Information" and "Proprietary
Information" confidential and use such information only as permitted in
this Agreement. The duty to keep Confidential Information and Proprietary
Information confidential and to use such information only as permitted
herein shall survive the termination of this Agreement.
7.2 As used in this section 7.0 "Confidential Information" means any and
all data or information related to the business of a Party to this
Agreement (the "Delivering Party") which the other Party (the "Receiving
Party") becomes aware of during the course or as a consequence of the
association between the Parties and is generally treated by the Delivering
Party as confidential (whether or not it is marked "confidential" or
designated as such when it is conveyed to the Receiving Party).
Confidential Information may include, without limitation, Proprietary
Information (as defined herein) and information relating to the financial
affairs, products, processes, customers, employees, distributors, research,
development, and other matters that are important to the general operation
and business of the Delivering Party; provided, however, that the
information shall not be considered confidential if it (i) is available or
becomes available to the public generally, or (ii) was already in the
possession of the Receiving Party at the time of such delivery, or (iii) is
received from another person or entity having lawful possession thereof and
having no obligation of confidentiality to the Delivering Party.
7.3 "Proprietary Information" means all of the know-how, materials and
information (whether or not reduced to writing and whether or not
patentable or protectable by copyright) relating to the business of the
Delivering Party and which the Receiving Party receives, has access to,
conceives or develops, in whole or in part, as a direct or indirect result
DAWNLIC7.DOC Page 9 of 13
of the Receiving Party's association with the Delivering Party or through
the use of the Delivering Party's facilities or resources.
8.0 MAINTENANCE OF INTELLECTUAL PROPERTY RIGHTS.
8.1 MSI shall use all reasonable efforts to ensure that the MSI EXPLOSIVES
TECHNOLOGY is protected in the TERRITORY including obtaining any necessary
registrations of intellectual property rights. Intellectual property rights
shall include all patents, patent applications, trade marks, trade names,
registered designs and copyrights owned by MSI or licensed to MSI with
rights to sub-license. XXXX undertakes to use the trade xxxx " HEFr" and
"EMGELr" which forms part of the intellectual property rights in all
circumstances where reasonably possible and to cooperate in efforts that
MSI undertakes to comply with this paragraph.
8.2 If infringement of any intellectual property rights relating to the
MSI EXPLOSIVES TECHNOLOGY occurs, the Parties shall consult with one
another as to the course of action to be taken. Should either Party be
unwilling to take action, then the other Party shall be entitled to take
any action at its expense which it deems necessary, and the Party unwilling
to take action shall, on being indemnified against possible claims for
costs and other monetary penalties, do all things necessary to enable the
other Party to proceed, including lending its name to any legal action, and
shall execute such documents as may be needed to permit proceedings to be
instituted and prosecuted to finality. Any damages or costs recovered by
the Party taking action in such circumstances may be retained by that Party
for its sole benefit.
9.0 FOREIGN LAWS.
9.1 XXXX agrees to register this Agreement when required by local/national
law to pay all costs and legal fees connected therewith, and to otherwise
insure that the local/national laws affecting this Agreement are fully
satisfied.
9.2 XXXX further agrees to insure compliance with all appropriate
United States laws dealing with the export of technology or technical
information.
9.3 This agreement shall be subject to interpretation pursuant to the
laws of the jurisdiction where the principal place of business for XXXX is
or was located at the time the event occurred giving rise to the need for
interpretation of this Agreement or as otherwise agreed between the
Parties.
10.0 NOTICES.
DAWNLIC7.DOC Page 10 of 13
10.1 All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) when delivered
personally, (ii) when sent by fax or facsimile (with receipt confirmed),
(iii) when received by addressee, if sent by Express Mail, Federal Express,
or other express delivery service (receipt requested), or (iv) after being
delivered by registered or certified mail, return receipt requested, in
each case to the other Party at the following addresses and fax numbers (or
to such other addresses and fax number for a Party as shall be specified by
like notice; provided that notices of change of address or fax number shall
be effective only upon receipt thereof):
if to XXXX to: Xxxx X. Xxxxxx
c/o Coutts & Co.
Grand Cayman, British West Indies
and:
if to MSI to: Xxxx X. Day
Mining Services International Corporation
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx X-000
Xxxx Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
11.0 MISCELLANEOUS.
11.1 Attorney's Fees. If a legal action or other proceeding is
brought for enforcement of this Agreement because of an alleged dispute,
breach, or default, or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing Party shall be
entitled to recover reasonable attorney's fees and costs incurred, both
before and after judgment, in addition to any other relief to which they
may be entitled.
11.2 Entire Agreement. This Agreement constitutes the entire understanding
between the Parties hereto with respect to the subject matter hereof and
supersedes all negotiations, prior discussions and preliminary agreements
between the Parties hereto relating to the subject matter hereof as
consistent with the Shareholders Agreement.
11.3 Disputes and Applicable Law. All disputes and differences that
might arise between or among the Parties hereto in connection with, or
arising out of this Agreement, whether during the term hereof or after
termination or breach, shall be referred to and finally settled by
arbitration pursuant to the following:
11.3.1 If the issue in dispute relates to the payment of
royalties or other financial or value issues, such issues shall
be submitted within ten (10) calendar days from the date of
determination that a dispute exists between the Parties to a
partner of an internationally recognized accounting firm having
demonstrable and extensive industry experience in auditing and
DAWNLIC7.DOC Page 11 of 13
valuing international transactions. If the Parties cannot agree
on a firm, then each Party shall choose a firm within the same
ten (10) day period referred to above, and the two partners from
such firms shall immediately select jointly a firm meeting the
qualifications herein stated which shall not be an auditor of
either Party. The matter shall then immediately be submitted to
such firm and it shall appoint a qualified partner, acting as an
expert and not as an arbitrator, to listen to the position of
both Parties and, taking into account the facts and
circumstances, shall make a determination which decision shall be
final and binding upon the Parties.
11.3.2 If the issue is a dispute involving the interpretation,
application or infringement of laws, patents, intellectual
property rights, technology, or misuse or breach of the LICENSE
or any sub-licenses granted by XXXX, such issue shall be
submitted to the Law Society of England and Wales within ten (10)
calendar days from the date of determination that a dispute
exists between the Shareholders. The Law Society of England and
Wales shall immediately appoint a solicitor who shall be
competent and experienced in International law, patents and other
intellectual property rights and shall have substantial
explosives or chemical processing technology experience or have
access to such experts as may be reasonably needed for
interpretation of the technology. A decision of the solicitor so
chosen shall be final and binding upon the Parties.
11.3.3 If it is unclear as to whether or not the issue being
presented for arbitration should be referred to as a royalty
payment, financial or value issue, or as a legal or technology
issue, it shall be deemed to be a legal or technology issue.
11.4 Cooperation. Each Party hereto agrees to execute and deliver such
additional documents and instruments and to perform such additional acts as
any Party may reasonably request or as may be reasonably necessary or
appropriate to effectuate, consummate or perform any of the terms,
provisions or conditions of this Agreement.
11.5 Waiver. Any waiver by any Party hereto of any breach of any kind or
character whatsoever by any other Party, whether such a waiver be direct or
implied, shall not be construed as a continuing waiver of, or consent to,
any subsequent breach of this Agreement on the part of the other Party or
Parties. No course of dealing or performance between the Parties hereto,
nor any delay in exercising any rights or remedies hereunder or otherwise
shall operate as a waiver of any of the rights or remedies of any Party
hereto.
11.6 Modification. This agreement may not be modified except by a written
instrument signed by all the Parties hereto.
11.7 Survival. All warranties, representatives, indemnities, covenants
and other agreements of the Parties hereto shall survive the execution,
DAWNLIC7.DOC Page 12 of 13
delivery and termination of this Agreement and shall, notwithstanding the
execution, delivery and termination of this Agreement, continue in full
force and effect.
11.8 Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original and as executed
shall constitute one agreement, binding on both the Parties even though
both Parties do not sign the same counterpart.
11.9 Headings. The headings of sections and subsections used in this
Agreement are for convenience only and are not part of its operative
language. They shall not be used to affect the construction of any
provisions hereof.
11.10 Relationship. The Parties hereto do not intend this Agreement or
the relationship hereunder to constitute a joint venture or partnership of
any kind.
In witness whereof the following have signed the agreement this 12th day of
February, 1997.
/s/ Xxxx X. Day
________________________________________________
MINING SERVICES INTERNATIONAL CORPORATION
Name: Xxxx X. Day
At: Salt Lake City, Utah
/s/ Xxxx X. Xxxxxx
________________________________________________
XXXX HOLDING COMPANY
Name: Xxxx Xxxxxx
At: Salt Lake City, Utah
DAWNLIC7.DOC Page 13 of 13
