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Exhibit 10.12
The omitted portions indicated by brackets have been separately filed with the
Securities and Exchange Commission pursuant to a request for confidential
treatment under Rule 406, promulgated under the Securities Act of 1933, as
amended.
SERVICES AGREEMENT
This SERVICES AGREEMENT (the "Agreement"), dated October 27, 1998, by
and among Davies-Imperial Coatings, Inc. ("Davies"), an Indiana corporation
having a place of business at 1275 State Street, Hammond, Indiana, Cabot
Corporation ("Cabot"), a Delaware corporation having a place of business at 75
State Street, Boston, Massachusetts, and, for purposes of Sections 10.1, 11,
13.4, 15, 18, 19, 20.6 and 20.9, Donn Davies, an individual, and JoAnn Davies,
an individual.
WHEREAS, Cabot desires to have Davies provide to Cabot metal oxide
dispersion services; and
WHEREAS, Davies desires to provide metal oxide dispersion services to
Cabot;
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. TERM
This Agreement shall commence on October 27 , 1998, and shall continue
until October 27, 2004 (the "Initial Term"). This Agreement shall thereupon be
automatically renewed for additional one (1) year periods (each a "Renewal
Term", and together with the Initial Term, the "Term"; each year of the Term
referred to herein as a "Term Year"), unless either party gives written notice
of its intention to terminate the Agreement at least 90 days prior to the
expiration of the Initial Term or any Renewal Term.
SECTION 2. SERVICES
2.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, during the Term, Davies shall provide to Cabot, and Cabot shall
purchase from Davies, the Services (as defined below) in such quantities as
specified by Cabot, subject to Section 2.4, below. "Services" means (a) the
manufacturing of the metal oxide dispersions set forth on Schedule A hereto (the
"Products") in accordance with the specifications, formulae and processes
provided by Cabot to Davies and initially as set forth in the materials
specified on Schedule A hereto, (b) the packaging of the Products in accordance
with specifications provided by Cabot from time to time, and (c) such ancillary
services as specified herein. Cabot may amend Schedule A from time to time on 30
days written notice to Davies provided such amendments either do not result in a
material increase in cost to Davies or are agreed to in advance by Davies;
Davies may only amend such schedule with Cabot's prior written consent.
2.2 Materials, Labor, etc.
(a) Subject to the following sentence, Cabot shall supply to Davies all
raw materials, packaging materials and filter media, with the exception of
wooden pallets and nominal filter bags, necessary for Davies to perform the
Services. In the event Cabot requests that Davies purchase specified materials,
Davies shall acquire the specified materials and shall bill Cabot therefor at
Davies' cost, including any handling charges incurred by Davies in connection
therewith. Title to all such materials shall remain with Cabot at all times.
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(b) Davies shall supply all materials and services, other than as set
forth in Section 2.2(a), above, necessary to provide the Services, including,
but not limited to, labor, administration, raw materials management, inventory
management, on-site warehousing, security, facility space, utilities,
maintenance, quality control, quality assurance, preparation of certificates of
analysis, order fulfillment, sample fulfillment, wooden pallets, coordination of
shipping and implementation of ISO conformance, as such may be set forth in
greater detail elsewhere in this Agreement. Subject to the following sentence,
Davies shall adequately insure all equipment at its Hammond, Indiana facility,
including the Cabot Assets, as defined below and as set forth on Schedule C
hereto. With respect to Products, as defined herein, Cabot shall adequately
insure all raw materials, finished goods and works-in-process.
2.3 Payment. Davies shall make good faith efforts to invoice Cabot for
its Services and for other charges on or before the second business day of each
month during the Term, but in no event later than the tenth day of such month,
and shall send such invoices to Cabot by express mail or similar means of
delivery. Cabot shall make a good faith effort to pay such invoices as soon as
possible following its first check run after it receives the relevant invoice,
but in any event, payment shall be made within ten (10) days after the date of
invoice.
2.4 Quantity. During each Term Year, Cabot will purchase Services from
Davies for not less than the lesser of (i) [ ] gallons of Product or (ii) [ ]
percent ([ ]%) of the total amount of orders received by Cabot for Products for
shipment to customer locations in North America. Cabot's purchase of Services
from Davies shall reflect its good faith expectations of customer demand and
Cabot shall use its reasonable efforts to distribute substantially evenly the
quantities of its purchases of Services to avoid creating production capacity
problems for Davies.
2.5 Failure to Provide Services. In addition to any other rights and
remedies of Cabot under this Agreement, in the event that Davies fails to supply
Cabot with its requirements for Services for any reason, Cabot shall have the
right to provide such Services for itself or purchase Services from sources
other than Davies. In such event, the amount of Products so provided or
purchased shall count toward the volume requirements of Section 2.4 hereof (each
a "Setoff"), provided, however, than in order for Cabot to be entitled to a
Setoff, Cabot must have provided Davies at least one week lead time on the
relevant order and the relevant order must not be for a quantity in excess of [
] per week.
SECTION 3. SHIPPING; DELIVERY
All Products shall be prepared for delivery to Cabot or a customer of
Cabot, as the case may be, in accordance with Cabot's instructions.
SECTION 4. PRICING
4.1 Prices. Davies shall perform the Services and provide such
miscellaneous services in connection therewith in accordance with the prices set
forth on Schedule B hereto (the "Prices").
4.2 Renegotiation. Cabot and Davies acknowledge that it is their
intention simultaneously to increase the quality of the Products and to decrease
the costs associated with manufacturing the Products, and to share any cost
savings between them. Recognizing that intention, on each two-year anniversary
of the execution of this Agreement, Cabot and Davies shall in good faith
negotiate any necessary changes (increases or decreases) to the Prices.
Necessary changes are changes that reflect changes in Davies' manufacturing
costs. In determining the changes to be made, the parties shall give
consideration to price pressures in the marketplaces of which the relevant
Products are a part. In no event shall the Price for Services relating to any
one Product be increased more than [ ]% per year.
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SECTION 5. CAPITAL EXPENDITURES
5.1 CapEx Investment. Cabot agrees to invest not less than One Hundred
Fifty Thousand Dollars ($150,000) (the $150,000 minimum referred to herein as
the "CapEx Investment") in capital improvements, capacity expansions and/or
capital expenditures to maintain capacity at Davies' facility relating to the
Services during each Term Year. Prior to making any such capital expenditures,
Cabot will consult with Davies to identify the priorities for such expenditures.
5.2 CapEx Carryover. If Cabot does not spend the total amount of the
CapEx Investment in a given Term Year, Davies may carry over the unspent portion
of such CapEx Investment to the next Term Year, provided, however, that Cabot
may, at its sole option, pay Davies within ninety (90) days of the end of such
Term Year an amount in cash equal to such unspent portion, in which case there
shall be no carryover for such Term Year. Notwithstanding the foregoing
sentence, if in any given Term Year Cabot agrees to spend more than the CapEx
Investment for that Term Year (including any carryover) on capital improvements
and/or capital expansions at Davies' facility, the excess shall be credited
toward the CapEx Investment in future Term Years, beginning with the immediately
succeeding Term Year.
SECTION 6. MAINTENANCE AND IMPROVEMENTS
6.1 Maintenance.
(a) Davies shall be responsible for the proper customary maintenance of
all assets used, directly or indirectly, in its provision of Services, including
the Cabot Assets (as defined below). Notwithstanding the foregoing, Cabot shall
be responsible for costs under third-party maintenance contracts relating to the
[ ] system located at Davies' facility in Hammond, Indiana. The parties
acknowledge that to the extent certain maintenance items are not individually
specified on Schedule A hereto, the cost of such maintenance items are reflected
in the Prices for the Services.
(b) If Cabot makes a good faith determination that Davies is not
complying with Section 6.1(a) hereof, Cabot shall have the right to enter upon
Davies' premises in order to perform the maintenance required by Section 6.1(a).
Any amounts expended by Cabot pursuant to this Section 6.1(b) shall be credited
toward the CapEx Investment for such Term Year. The fact that Cabot makes use of
this Section 6.1(b) shall have no effect on any of its rights and remedies with
respect to Davies' failure to comply with Section 6.1(a).
6.2 Improvements. After taking into account the improvements made
pursuant to Section 5.1 hereof, Davies agrees to make all capital improvements
to its Hammond, Indiana facility that are necessary or advisable in order to
continue to provide the Services in a timely manner.
SECTION 7. RIGHT TO BID
Cabot shall provide Davies the opportunity to bid to provide the
Services with respect to all Cab-O-Sperse(R) and Semi-Sperse(R) metal oxide
dispersions to be manufactured in North America, other than those to be
manufactured solely by Cabot or any Cabot affiliate. As used in this Agreement,
"affiliate" means, with respect to any person or entity, any person or entity,
directly or indirectly controlling, controlled by, or under common control with
any such person or entity.
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SECTION 8. PROPRIETARY INFORMATION; CONFIDENTIALITY
8.1 Proprietary Information.
(a) Subject to Section 8.1(b) hereof, the term "Proprietary
Information" shall mean, whether disclosed prior to, on or after the date hereof
and whether or not marked or identified as confidential, formulae,
specifications, demographic and trade information, costs, intellectual property
and applications for the same (including, but not limited to, patents,
copyrights, trademarks, trade names, service marks, service names, technology,
know-how, processes, trade secrets, inventions, data and software), names of
investors and customers, and other strategic business, marketing, sales and
financial information relating to the relevant party's business (including, but
not limited to business plans, marketing strategy, and production information).
(b) The term "Proprietary Information" does not include any information
which (i) at the time of disclosure or thereafter is generally available to or
known by the public (other than as a result of the acts by the recipient or its
representatives in breach of this Agreement), (ii) was or becomes available to
the recipient on a non-confidential basis from a source other than the provider
or its advisors, provided that such source is not and was not bound by a
confidentiality agreement with the provider, or (iii) has been independently
acquired or developed by the recipient without violating any of its obligations
under this Agreement.
8.2 Ownership. All information and materials, including Proprietary
Information of Cabot, its subsidiaries and its affiliates and all physical
manifestations thereof, that are received by Davies from Cabot prior to, on or
after the date hereof in connection with the Services or that are or were
created or produced by Davies and are based upon, or are otherwise prepared with
use of or reference to, Proprietary Information of Cabot, shall be and remain
the sole and exclusive property of Cabot. Upon written request by Cabot, Davies
shall return to Cabot all tangible forms of the Proprietary Information of
Cabot, including any and all copies, and all unused samples of materials Cabot
may have provided.
8.3 Confidentiality.
(a) Davies acknowledges, understands and agrees that all Proprietary
Information of Cabot and its subsidiaries and affiliates is confidential and
shall remain the exclusive property of Cabot, its subsidiaries or its
affiliates, as the case may be. Cabot acknowledges, understands and agrees that
all Proprietary Information of Davies is confidential and shall remain the
exclusive property of Davies. Each of Cabot and Davies agrees that for a period
of fifteen (15) years from and after the termination or expiration of the Term,
it shall keep and hold as confidential, and shall require its directors,
officers, employees, agents and representatives, to keep and hold as
confidential, any and all Proprietary Information of the other unless disclosure
is required by applicable law or by terms of a subpoena or other order issued by
a court of competent jurisdiction. Each party shall promptly notify the other of
any such subpoena or order, shall contest any such subpoena or order and shall
(to the extent possible) permit the owner of such Proprietary Information to
contest any such subpoena or order. Except as so required, neither party shall
disclose any Proprietary Information of the other to third parties, or to its
employees or representatives who do not have a need to know it in connection
with the subject of the transactions contemplated by this Agreement, and neither
party shall use (or permit to be used) any Proprietary Information of the other
except for the purposes contemplated hereby. For purposes of this Section 8, the
party providing any of its Proprietary Information is sometimes referred to as
the "provider" and the party receiving any of the other's Proprietary
Information is sometimes referred to as the "recipient."
(b) Davies agrees to cause each of its employees as of the date of this
Agreement, and any person who becomes an employee of Davies during the Term, to
enter into a confidentiality agreement with Cabot that provides for essentially
the same kind and degree of confidentiality as set forth in Section 8.3(a)
hereof with respect to Davies.
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8.4 Redelivery Upon Termination. The recipient shall deliver or cause
to be delivered to the provider, or destroy, promptly after termination of this
Agreement for any reason any documents containing Proprietary Information and
any copies thereof which the recipient (or others to whom the recipient has
disclosed the same hereunder whether authorized hereby or not) may have and
shall permanently erase or cause to be erased all Proprietary Information from
any computer memory or storage.
SECTION 9. INTELLECTUAL PROPERTY
9.1 Intellectual Property.
(a) With regard to any inventions, improvements and technical
information that are created or produced on or after the date of this Agreement
by any of the parties hereto in connection with the Services, or that are based
upon or suggested by any Proprietary Information of Cabot (the foregoing,
collectively, referred to herein as the "Term IP"), Davies agrees that Cabot
will be the sole and exclusive owner thereof, including all patents, copyrights,
and other intellectual property rights therein. Davies hereby assigns and agrees
to assign, without any additional compensation, all right, title and interest in
and to such inventions, improvements and technical information, including all
patents, copyrights and other intellectual property rights therein, to Cabot.
Davies further agrees, at Cabot's request and expense, to provide assistance to
Cabot in every reasonable way to perfect and vest title in and to such
inventions, improvements and technical information, including all patents,
copyrights and other intellectual property rights therein, in Cabot and to
assist Cabot in every reasonable way in obtaining and enforcing patents,
copyrights, and other intellectual property rights in and to such inventions,
improvements and technical information throughout the world.
(b) The parties acknowledge that over the course of their relationship
and prior to the date of this Agreement, they, individually or jointly, have
created or produced certain inventions, improvements and technical information
relating to the processes and techniques for dispersing metal oxides (the
"Existing IP"). Except as provided in Section 8.2 hereof, the portion of the
Existing IP created or produced solely by Davies is referred to herein as the
"Davies IP." The portion of the Existing IP created or produced solely by Cabot
or jointly by Cabot and Davies, together with the Term IP, is referred to herein
as the "Cabot IP."
9.2 Licenses.
(a) Davies hereby grants to Cabot a fully paid-up, nonexclusive,
irrevocable, world-wide, perpetual license to use the Davies IP, including the
right for Cabot to sub-license the Davies IP to any of its subsidiaries,
affiliates or any third parties (collectively the "Sub-licensees").
Notwithstanding Section 8.3 hereof, the license provided for by this Section
9.2(a) shall include Cabot's and the Sub-licensees' right to use the Proprietary
Information of Davies.
(b) Subject to Section 9.3 hereof, Cabot hereby grants to Davies a
fully paid-up, nonexclusive, irrevocable, world-wide, perpetual license to use
the Cabot IP, provided, however, that Davies may neither transfer any or all of
the Cabot IP to any third party, nor grant a sub-license with respect to any or
all of the Cabot IP.
(c) The licenses granted pursuant to this Section 9.2 shall survive the
termination of this Agreement.
9.3 Use of IP to Benefit Competitors. Davies agrees that from and after
the date hereof, and notwithstanding any termination of this Agreement, it will
not use either the Davies IP or the Cabot IP for the benefit of any entity
which, directly or indirectly, competes with any business carried on by Cabot or
any of Cabot's affiliates.
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SECTION 10. RIGHT OF FIRST REFUSAL TO PURCHASE DAVIES' BUSINESS
10.1 Offer.
(a) If, at any time, Davies, Donn Davies or JoAnn Davies desires to
sell part or all of the equity of Davies (in an aggregate amount greater than
10% of the total equity) or the assets owned by Davies and used or useful in
connection with its metal oxide dispersion business (in a single transaction or
series of transactions) (the portion of assets or equity, as the case may be,
that Davies, Donn Davies or JoAnn Davies desires to sell referred to herein as
the "Business"), whether by merger, stock sale, asset sale or otherwise or in a
single transaction or a series of transactions, such party or parties shall
submit a written offer (the "Offer") to sell the Business to Cabot as provided
herein. The Offer shall disclose which assets or stock is proposed to be sold,
the terms and conditions, including price and payment terms, of the proposed
sale, and the prospective purchaser of the Business. The Offer shall further
state that Cabot may acquire all but not less than all of the Business for the
price and upon the other terms and conditions set forth therein.
(b) If Cabot wishes to purchase the Business at the price and on the
terms and conditions set forth in the Offer, it shall, within 30 days from the
date of the Offer, notify Davies in writing (the "Acceptance").
10.2 No Transfer Except as Provided. Davies shall not, at any time
during the Term of this Agreement, in any manner convey or transfer the
Business, or any part thereof, except in accordance with the terms and
conditions contained in this Section 10.
10.3 Right to Sell to Third Party. If Cabot does not provide Davies
with an Acceptance within the 30-day period set forth in Section 10.1(b) hereof
(or if Cabot by notice to Davies earlier waives its right to purchase), Davies
shall be free, during the 120-day period following Davies' submission of the
Offer pursuant to Section 10.1(a) hereof, to convey the Business to the third
party identified in the Offer on terms and conditions (including price) no more
favorable to the third party than those contained in the Offer. If Davies does
not sell the Business within such 120-day period, the Business shall again
become subject to this right of first refusal.
10.4 Right to Remove Assets. If Davies enters into an agreement to sell
the Business to such third party in accordance with the provisions of this
Section 10, it shall notify Cabot at least 30 days prior to the closing of such
sale and Cabot shall be permitted at Cabot's expense to remove the Cabot Assets
(as defined below) prior to any such sale.
SECTION 11. NONCOMPETITION AND RELATED PAYMENTS
(a) Each of Davies, Donn Davies and JoAnn Davies (collectively, the
"Davies Group") hereby acknowledges the value each shall receive from the
execution of this Agreement by the other parties hereto, including Cabot, and
the benefits associated therewith. In consideration for such value each member
of the Davies Group hereby agrees that during the Term and the Additional
Non-Compete Period (as defined below), none of the members of the Davies Group
shall provide or assist any other person or entity to provide metal oxide
dispersion services to any Competitor. In the event of a breach of this Section
11(a) by any member of the Davies Group, none of the members of the Davies Group
shall receive any part of the Noncompetition Payment. For purposes of this
Section 11, "Competitor" shall mean any person or entity (other than Cabot and
Cabot's affiliates) that, directly or indirectly, competes with any business
carried on by Cabot or any of Cabot's affiliates. As used herein, "Additional
Non-Compete Period" shall mean (a) if Davies shall give notice of election not
to renew the Agreement in accordance with Section 1 hereof (a "Non-Renewal
Notice") or if Cabot shall terminate this Agreement pursuant to Section 13.1
hereof, a period of [ ] after the termination of the Agreement, or (b) if Cabot
shall give a Non-Renewal Notice or if both Davies and Cabot shall give a
Non-Renewal Notice or if Davies shall terminate this Agreement pursuant to
Section 13.3 hereof, a period of[ ] after the termination of the Agreement.
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(b) If Cabot shall give a Non-Renewal Notice, if Davies shall terminate
this Agreement pursuant to Section 13.3 hereof or if Cabot shall terminate this
Agreement pursuant to Section 13.1(a), 13.1(b) or 13.1(c), Cabot shall pay to
the Davies Group in consideration for such noncompetition covenant the following
total amount (the "Noncompetition Payment"), to be divided equally among those
members of the Davies Group in existence or living at the commencement of the
Additional Non-Compete Period:
(i) [ ] if such notice by Cabot is at the end of the Initial
Term;
(ii) [ ] if such notice by Cabot is at the end of the first
Renewal Term (if at all);
(iii) [ ] if such notice by Cabot is at the end of the second
Renewal Term (if at all); and
(iv) [ ] if such notice by Cabot is at the end of any Renewal
Term thereafter.
The Noncompetition Payment will be payable in two equal installments on the date
of any such termination and on the first anniversary thereof.
SECTION 12. WARRANTIES
12.1 Warranty as to Products. Davies represents and warrants to Cabot
that, when shipped to Cabot or a customer of Cabot, as the case may be, by
Davies, the Products will conform in all respects to the specifications then in
effect and as then set forth in the materials specified on Schedule A hereto.
12.2 Quality Control. Quality control with respect to the Products
shall be performed in accordance with the terms contained in the materials
specified on Schedule A hereto.
12.3 Rejection. Subject to the following sentence, Cabot shall not be
obligated to accept or pay for Services relating to any batch or lot containing
Product not conforming to the specifications then in effect for such Product. If
such non-conformity is the result of materials or formulae provided by Cabot,
Cabot shall pay Davies for the Services relating to such batch or lot and such
amount shall count toward the volume requirements contained in Section 2.4
hereof.
12.4 Warranty as to Violations. Davies represents and warrants that
there is no past or present violation of, and there is no pending or threatened
action, suit or proceeding relating to, any alleged violation of any laws,
ordinances, rules or regulations relating to the environment or otherwise
governing, directly or indirectly, any hazardous substances, wastes or materials
in connection with the business, properties or operations of Davies.
SECTION 13. TERMINATION
Cabot and Davies each acknowledge that in the performance of this
Agreement, including any exercise of termination rights under this Section, it
will act in good faith.
13.1 Davies Default. Cabot may terminate this Agreement in the event of
any one or more of the following occurrences (each a "Davies Default"):
(a) upon Davies' filing a petition for adjudication as a bankrupt, for
reorganization or for an arrangement under any bankruptcy or insolvency law;
(b) if any involuntary petition under any bankruptcy or insolvency law
is filed against Davies, is not dismissed within thirty (30) days thereafter and
is then continuing;
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(c) if Davies shall make an assignment of all or substantially all of
its assets for the benefit of creditors, or if Davies' interest under this
Agreement shall be taken upon execution;
(d) if Davies shall fail to perform any material covenant or material
obligation hereunder, except as excused under Section 20.10 hereof, and such
failure has not been cured within thirty (30) days following Cabot's written
notice to Davies of such failure; or
(e) in the event that Davies is no longer owned or controlled by either
Donn Davies or JoAnn Davies.
13.2 Continuation of Supply. Notwithstanding any termination of this
Agreement, in the event of a Davies Default, Davies shall nevertheless continue
to have the obligation to perform the Services for Cabot for a period of 120
days after termination of this Agreement by Cabot on the terms and conditions
contained herein.
13.3 Cabot Default. Davies may terminate this Agreement in the event of
any one or more of the following occurrences (each a "Cabot Default"):
(a) upon Cabot's filing a petition for adjudication as a bankrupt, for
reorganization or for an arrangement under any bankruptcy or insolvency law;
(b) if any involuntary petition under such law is filed against Cabot,
is not dismissed within thirty (30) days thereafter and is then continuing;
(c) if Cabot shall make an assignment of all or substantially all of
its assets for the benefit of creditors, or if Cabot's interest under this
Agreement shall be taken upon execution; or
(d) if Cabot shall fail to perform any material covenant or material
obligation hereunder and such failure has not been cured within thirty (30) days
following Davies' written notice to Cabot of such failure.
13.4 Effect of Termination.
(a) Termination of this Agreement, whether by lapse of time, mutual
consent, operation of law, exercise of right of termination or otherwise shall
not affect the ownership interests in the respective proprietary and other
rights of the parties.
(b) Upon any termination of this Agreement, Davies shall continue to
have the obligation to perform the Services to fill any outstanding orders
received by Davies prior to the receipt of notice of termination.
(c) The provisions contained in Sections 8, 9, 10.4, 11, 12, 13.2,
13.4, 14, 15, 18, 19 and 20.9hereof shall survive the termination of this
Agreement.
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SECTION 14. CABOT ASSETS; PROTECTION OF RIGHTS
14.1 Cabot Assets. The parties acknowledge and agree that Cabot owns
all right, title and interest in (a) the equipment and assets listed on Schedule
C hereto and which are located at Davies' facility in Hammond, Indiana, (b)
those assets purchased with the CapEx Investment pursuant to Section 5 hereof,
(c) all raw materials and packaging materials provided to Davies pursuant to
Section 2.2(a) hereof, and (d) all Products (collectively, the "Cabot Assets").
All of the Cabot Assets shall be subject to removal in accordance with the terms
of this Agreement; provided, however, that all pipes, cables and wiring
installed in the walls, ceilings, roof, floors or subfloors of Davies' facility
and used in connection with the Cabot Assets shall remain property of Davies
whether supplied or installed by Cabot or Davies.
14.2 Protection of Rights. Davies shall do all such things and execute
all such documents (including without limitation, financing statements) as Cabot
deems necessary or desirable to enable Cabot to protect its title to and
preserve its rights in the Cabot Assets.
SECTION 15. REMEDIES
The relationship between Davies, Donn Davies or JoAnn Davies on the one
hand, and Cabot on the other hand, and which is reflected in this Agreement is
unique and has a value which may not be readily measured in monetary terms. Each
of Cabot, Davies, Donn Davies and JoAnn Davies agrees that in the event of a
violation by it of any of its undertakings hereunder, the non-breaching party
shall be entitled (a) to specific performance and injunctive and other equitable
relief; (b) to recover from the breaching party monetary damages caused by any
such violation; and (c) to any other rights and remedies that may be available
at law or in equity, which rights and remedies may be exercised, at the option
of the non-breaching party, concurrently with any other right or remedy provided
in this Agreement. The remedies provided herein shall not be exclusive and shall
be in addition to any other rights or remedies now or hereafter existing at law
or in equity, by statute or otherwise.
SECTION 16. RELATIONSHIP OF PARTIES
Davies and Cabot are each independent contractors. Nothing herein
contained shall be construed to place Davies and Cabot in the relationship of
principal and agent, master and servant, partners, joint venturers, and, except
as otherwise set forth in this Agreement, neither party shall have, expressly or
by implication, the power to represent themselves as having any authority to
make contracts in the name of or binding upon the other, or to obligate or bind
the other in any manner whatsoever.
SECTION 17. COMPLIANCE WITH LAWS
Davies warrants and agrees that during the Term it shall observe and
comply in all material respects with all applicable federal, state, local and
foreign laws, ordinances, statutes, standards, rules, regulations and orders,
including but not limited to those relating to safety and health and the
environment. Davies shall be responsible for obtaining all permits and licenses
from governmental authorities and from private parties that are required in
connection therewith. Davies shall be responsible for the handling, disposal and
release of packaging material waste generated by Davies during the term of this
Agreement. Cabot shall be responsible for the disposal of all off-quality
Product, except for that which is off-quality through no fault of Cabot. Cabot
and Davies shall make good faith efforts to jointly pursue a waste minimization
program in connection with the manufacturing of Products pursuant to this
Agreement.
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SECTION 18. CONSENTS; NOTICES
Unless otherwise set forth herein, whenever any consent or approval is
required of either party, it must be given to the other party in writing and
delivered in accordance with the provisions of this Section 18. Any notice of a
party shall be in writing and shall be given by (a) telecopier with original
posted first class mail, postage prepaid, within two (2) business days
thereafter; (b) certified or registered mail with an acknowledgment of receipt,
postage prepaid, return receipt requested; or (c) a reputable private courier,
such as Federal Express, which provides evidence of receipt as a part of its
delivery service, and addressed as follows:
If to Cabot: Cabot Corporation
500 Commons Drive
Aurora, IL 60504
Attn: Operations Director
Telecopier: (630) 585-9981
If to Davies: Davies-Imperial Coatings, Inc.
1275 State Street
P.O. Box 790
Hammond, IN 46325
Attn: Donn T. Davies
Telecopier: ___________
If to Donn T. Davies: Donn T. Davies
c/o Davies-Imperial Coatings, Inc.
1275 State Street
P.O. Box 790
Hammond, IN 46325
Telecopier: ___________
If to JoAnn Davies: JoAnn Davies
c/o Davies-Imperial Coatings, Inc.
1275 State Street
P.O. Box 790
Hammond, IN 46325
Telecopier: ___________
or to such other address as may be designated in writing by any of the parties
from time to time in accordance herewith, and shall be deemed delivered two (2)
business days following delivery by hand, by private courier or when so
telecopied and five (5) business days following proper dispatch by certified or
registered mail. A business day is any Monday through Friday on which first
class mail is delivered.
SECTION 19. ATTORNEYS' FEES
If any action or proceeding is brought to enforce or interpret any
provision of this Agreement then, in addition to any other relief to which the
prevailing party may be entitled, the prevailing party shall be entitled to
recover its reasonable costs and attorneys' fees.
10
11
SECTION 20. GENERAL
20.1 Severability. If any provision of this Agreement shall be found to
be invalid or unenforceable, then such provision or provisions shall not
invalidate or in any way affect the enforceability of the remainder of this
Agreement and such provision or provisions shall be curtailed and limited to the
extent necessary to bring the Agreement within any legal requirement and the
parties shall negotiate in good faith with respect to an equitable modification
of the provision or application thereof held to be invalid.
20.2 Modification; Waivers. Except as expressly provided herein, this
Agreement may be modified or amended only with the written consent of each party
hereto. Neither party hereto shall be released from its obligations hereunder
without the written consent of the other party. The observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) by the party entitled to enforce such
term, but any such waiver shall be effective only if in a writing signed by the
party against which such waiver is to be asserted. Except as otherwise
specifically provided herein, no delay on the part of either party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of either party hereto of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
20.3 Succession. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and other
legal representatives and, to the extent that any assignment hereof is permitted
hereunder, their assignees.
20.4 Counterparts. This Agreement may be executed in counterparts. Each
counterpart, including a signature page executed by each of the parties hereto,
shall be an original counterpart of this Agreement, but all of such counterparts
together shall constitute one instrument.
20.5 Further Assurances. Each party agrees to provide any additional
documents and take any such further action as may be reasonably requested by the
other party in order to carry out the purpose and intent of this Agreement.
20.6 Entire Agreement. This Agreement contains the full and complete
undertaking and agreement among the parties hereto with respect to the within
subject matter, and supersedes all other agreements between Cabot on the one
hand, and Davies, Donn Davies, or JoAnn Davies on the other, whether written or
oral except any confidentiality agreements between the parties, which shall, to
the extent such agreements do not contradict the terms of this Agreement,
continue in effect.
20.7 Headings. The headings of the sections and other subdivisions of
this Agreement are for convenient reference only. They shall not be used in any
way to govern, limit, modify, construe this Agreement or any part or provision
thereof nor otherwise be given any legal effect.
20.8 Assignees and Third Parties. This Agreement may not be assigned by
either party without the prior written consent of the other party and any
attempted assignment without such consent shall be null and void; provided,
however, that Cabot may assign this Agreement to a subsidiary or affiliated
company.
20.9 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to principles of conflicts or choice of laws of
Massachusetts or of any other jurisdiction.
11
12
20.10 Force Majeure. Each of the parties hereto shall be excused from
delays in performing or from failure to perform hereunder to the extent that
such delays or failures result from causes beyond the reasonable control of such
party; provided that, in order to be excused from delay or failure to perform,
such party must act diligently to remedy the cause of such delay or failure.
[remainder of page intentionally left blank]
12
13
IN WITNESS WHEREOF, the parties hereto have set their hands to this
Agreement as a sealed instrument and have delivered this Agreement as of the day
and year first above written.
DAVIES-IMPERIAL COATINGS, INC.
By: /s/ Donn Davies
------------------------------------
Its: President
CABOT CORPORATION
By: /s/ Matthew Neville
------------------------------------
Its: Vice President and General Manager
Solely for purposes of
Sections 10.1, 11, 13.4,
15, 18, 19, 20.6 and 20.9:
/s/ Donn Davies
------------------------------------
Donn Davies
Solely for purposes of
Sections 10.1, 11, 13.4,
15, 18, 19, 20.6 and 20.9:
/s/ JoAnn Davies
------------------------------------
JoAnn Davies
13
14
SCHEDULE A
Products, Materials Specifying Specifications, Formulae,
Processes, Quality Control, Maintenance
PRODUCT FORMULA CONTROL PLAN SPECIFICATION DAVIES TEST METHODS
(REVISION DATE) EFFECTIVE DATE/ REVISION LEVEL) (SPECIFICATION NO./ (TEST METHOD NUMBER)
REVISION DATE)
Cab-0-Sperse(R) II 9/19/96 8-5-96, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) SC-E 5/04/95 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) SC-1 9/27/94 4-28-98, Rev B [ ] 101, 200, 300, 302
Cab-0-Sperse(R) SC-112 10/07/94 6-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) SC-113 9/18/96 6-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) SC-720 3/28/95 5-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) 5010 7-10-98 5-1-97, Rev A [ ] 101, 300
Cab-0-Sperse(R) A105 5/04/95 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) A205 7/5/94 8-5-96, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) A1095 2/1/93 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) A1695 7/5/93 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) A2095 7/6/94 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) A8875 7/16/93 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) P1010 9/27/94 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) P1685 11/18/93 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) S109 5/16/96 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) S2095 7/6/94 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) S3295 7/6/94 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) LT11X 8/23/96 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) LT12X 8/23/96 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) LT312 8/23/96 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) LT322 9/18/96 10-1-97, Rev A [ ] 101, 200, 300, 302
Cab-0-Sperse(R) LT511 8/23/96 10-1-97, Rev A [ ] 101, 200, 300, 302
Semi-Sperse(R) 11 1/12/96 10-1-97, Rev A [ ] 101, 200, 300, 302
Semi-Sperse(R) 12 1/12/96 5-1-97, Rev A [ ] 101, 200, 300, 302
Semi-Sperse(R) 25 5/04/95 4-28-98, Rev B [ ] 101, 200, 300, 302, 600
Semi-Sperse(R) R225 12-June-98 8-5-96, Rev A [ ] 101, 200, 300, 302, 600
Semi-Sperse(R) 6025 5/4/95 4-28-98, Rev B [ ] 101, 200, 300, 302, 600
Semi-Sperse(R) DWB-100C 5/13/97 10-1-97, Rev A [ ] 101, 200, 300, 302
Semi-Sperse(R) KD-100C 7/11/97 5-1-97, Rev A [ ] 101, 200, 300, 302, 400,
(w/kathon) 600, 606
Semi-Sperse(R) W-A355(Base) 5/17/96 N/A [ ] 101, 200, 300, 302, 500
Semi-Sperse(R) W-A355/ 5/17/96 8-5-96, Rev A [ ] 101, 200, 300, 302, 500
W-A400
Semi-Sperse(R) W-A355 3/21/96 N/A [ ] 101, 200, 300, 302, 500
(High Solids)
Semi-Sperse(R) FE-10 5/23/96 8-5-96, Rev A [ ] 101, 200, 300, 302, 501
15
Semi-Sperse(R) FE-400 7/02/96 5-1-97, Rev A [ ] 101, 200, 300, 302, 501
Fullgrip WB 4722 9/19/96 8-5-96, Rev A [ ] 101, 200, 300, 302
Fullgrip WB 4722 12/18/96 8-5-96, Rev A [ ] 101, 200, 300, 302
(dirty water)
Fullgrip WB 4728 9/19/96 8-5-96, Rev A [ ] 101, 200, 300, 302
2
16
SCHEDULE B
Prices
CONVERSIONS CHARGES:
Price/Lb.,
F.O.B.
Hammond, IN
Product Weight per 55-gal. Drum
[ ] 516 $[ ]
[ ] 500 $[ ]
[ ] 491 $[ ]
[ ] 531 $[ ]
[ ] 505 $[ ]
[ ] 506 $[ ]
[ ] 492 $[ ]
[ ] 548 $[ ]
[ ] 509 $[ ]
[ ] 516 $[ ]
[ ] 506 $[ ]
[ ] 500 $[ ]
[ ] 499 $[ ]
[ ] 500 $[ ]
[ ] 500 $[ ]
[ ] 500 $[ ]
[ ] 500 $[ ]
[ ] 500 $[ ]
[ ] 548 $[ ]
[ ] 492 $[ ]
[ ] 495 $[ ]
[ ] 492 $[ ]
[ ] 613 $[ ]
[ ] 489 $[ ]
[ ] 493 $[ ]
[ ] 536 $[ ]
[ ] 536 $[ ]
17
[ ] 531 $[ ]
[ ] 504 $[ ]
[ ] 489 $[ ]
[ ] 480 $[ ]
[ ] 480 $[ ]
[ ] 480 $[ ]
[ ] 480 $[ ]
[ ] 480 $[ ]
[ ] 516 $[ ]
[ ] 515 $[ ]
MISCELLANEOUS CHARGES:
Monthly Storage $[ ]
Monthly Equipment Maintenance $[ ]
Sample preparation
25 or less $[ ]
over 25 $[ ]
Hazardous Material Labeling Charge $[ ]
Dangerous Goods Preparation $[ ]
Palletizing with 6-way bands $[ ]
Pallets for Bracing Intel Tote Loads $[ ]
Drum Condoms
single $[ ]
double $[ ]
Power Washing
Regular $[ ]
Wash and Insert Dip-Tubes $[ ]
2
18
Aurora Delivery via Davies truck $[ ]
Recertify Totes and install certification
placard $[ ]
Install metal [ ] Placards on totes
$[ ]
Rebills $$[ ] per invoice
3
19
SCHEDULE C
Asset List
Cabot Owned Equipment at Davies*
10/27/98
*The parties agree that this schedule is substantially accurate
as of October 27, 1998, but that greater detail, and any assets
inadvertently left off the list, will be added within a
reasonable time after execution of the agreement
DESCRIPTION QUANTITY
10,000 pound Cardinal Scale 1
500 pound scale 1
75 pound scale 1
[ ] 5
[ ] 5
[ ] 10
Clean filling room 2
36,000 BTU air conditioners 4
24,000 BTU air conditioners 2
200,000 BTU furnaces 2
York air handler 2
Stainless steel power washers 5
Brass power washer 1
[ ] 1
[ ] 1
[ ] 3
Single housing filter unit 8
Double housing filter units 5
[ ] 1
[ ] 1
[ ] 1
[ ] 1
[ ] 1
[ ] 3
[ ] 6
Bag dump/compactor units 4
RO equipment only (excludes instrumentation) 1
Mettler Toledo density meter 1
[ ] 1
Weber label printers 2
VWR lab oven 1
[ ] 1
[ ] 2
And lab balance 1