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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: April 27, 1995
(Date of earliest event reported)
STANDARD BRANDS PAINT COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 1-4505 95-6029682
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
4300 West 190th Street, Torrance, California 90509-2956
(Address of principal executive offices) (Zip Code)
(310) 214-2411
(Registrant's telephone number, including area code)
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
1. Severance Agreement
2. Severance Agreement
3. Marketing Services and Technical Assistance Agreement
4. Indemnification Agreement
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be executed on its behalf
by the undersigned thereunto duly authorized.
Dated: April 27, 1995 STANDARD BRANDS PAINT COMPANY
A Delaware Corporation
By: /s/ Howard S. Schwartz
--------------------------
Howard S. Schwartz
Senior Vice President &
Chief Financial Officer
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Exhibit 1
Dated as of January 14, 1995
Corimon, S.A.C.A.
Los Cortijos de Lourdes
Apartado 3654, Caracas 101OA
Venezuela
I understand that Corimon is concerned about the extent of severance
compensation that may be owed to me by Standard Brands Paint Company and/or its
subsidiaries (together, the "Company"), in the event of termination of my
employment by the Company.
I agree that, notwithstanding any other prior agreements, board
resolutions or other provisions in respect of my severance, upon any such
termination, the following severance (and no more) will be acceptable to me:
Continuation for one year of my base compensation at the
$180,000 annual rate.
I also waive any bonus, success fee or other payment by the Company
based on completion of the Corimon investment that is mentioned in the next
sentence. This agreement is made in consideration of, and is conditional on
Corimon completing, its investment of at least $14 million in the Company.
Very truly yours,
Ronald I. Scharman
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Exhibit 2
Dated as of January 14, 1995
Corimon, S.A.C.A.
Los Cortijos de Lourdes
Apartado 3654, Caracas 101OA
Venezuela
I understand that Corimon is concerned about the extent of severance
compensation that may be owed to me by Standard Brands Paint Company and/or its
subsidiaries (together, the "Company"), in the event of termination of my
employment by the Company.
I agree that, notwithstanding any other prior agreements, board
resolutions or other provisions in respect of my severance, upon any such
termination, the following severance (and no more) will be acceptable to me:
A lump sum payment of the present value (discounted at the daily
equivalent of 12% per annum from the regular payment dates) of
my annual base compensation of $360,000.
I also waive any bonus, success fee or other payment by the Company
based on completion of the Corimon investment that is mentioned in the next
sentence. This agreement is made in consideration of, and is conditional on
Corimon completing, its investment of at least $14 million in the Company.
Very truly yours,
Fletcher L. Byrom
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Exhibit 3
MARKETING SERVICES AND TECHNICAL ASSISTANCE AGREEMENT
THIS MARKETING SERVICES AND TECHNICAL ASSISTANCE AGREEMENT (the
"Agreement") is made and entered into as of the 15th day of February, 1995 by
and between DAKOTA SERVICES, INC. ("DAKOTA"), a Florida corporation with its
principal place of business at 1200 S. Pine Island Road, Suite 700, Plantation,
Florida 33324 and STANDARD BRANDS PAINT COMPANY ("STANDARD"), a Delaware
corporation with its principal place of business at 4300 West 190th Street,
Torrence, California 90509-2956.
WHEREAS,
As of the date hereof, STANDARD and Corimon, S.A.C.A. and Corimon
Corporation (collectively, "CORIMON"), each an affiliate of DAKOTA, are entering
into a certain investment agreement and related agreements (collectively, the
"Investment Agreements") in connection with the investment by CORIMON in
STANDARD;
DAKOTA possesses valuable technical information and expertise which
generally pertains to the procurement of materials and services, market
research, marketing and sales service, and the manufacturing process for paint
and coating products;
The board of directors of STANDARD considers it in the best interests
of STANDARD to obtain the benefit of DAKOTA's expertise and experience during
the period between the funding and the closing under the Investment Agreements
(the date on which the closing under the Investment Agreements occurs being
hereinafter referred to as the "Investment Agreement Closing Date") and
accordingly desires to enter into this contract with DAKOTA;
STANDARD understands that DAKOTA may recommend substantial changes in
the operation of STANDARD; and
DAKOTA is willing to grant, and STANDARD desires to acquire, rights to
use DAKOTA's technical information and expertise, in accordance with the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual premises,
terms and conditions hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties do hereby agree as follows:
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I. DEFINITIONS
As used herein, the following terms shall have the following definitions.
1.1 ADVISORY SERVICES. "Advisory Services" means those marketing,
strategic planning, consulting and technical advisory services identified in
Attachment A.
1.2 AFFILIATES. "Affiliates" of a party hereto shall mean (i) companies
at least a majority of whose voting shares are now or hereafter owned or
controlled directly or indirectly by such party; (ii) companies at least a
majority of whose voting shares are now or hereafter owned or controlled by the
same company that owns or controls, either directly or indirectly, a majority of
shares of the party; and (iii) companies a majority of whose voting shares are
now or hereafter owned or controlled directly or indirectly by any company
mentioned in (i) or (ii) of this definition. An Affiliate shall be considered
an "Affiliate" for only so long as such ownership or control exists.
1.3 BUSINESS DAY. "Business Day" shall mean a day on which banks are
open for business in both Los Angeles, California, and Miami, Florida.
1.4 DOLLARS. "Dollars" or "$" shall mean lawful money of the United
States.
1.5 EFFECTIVE DATE. "Effective Date" shall mean the of the date on which
DAKOTA and STANDARD execute this Agreement.
1.6 PROPRIETARY INFORMATION. "Proprietary Information" shall mean: (i)
information provided to one party by the other party (A) in writing, which has
been annotated by an appropriate legend, stamp or other positive written
identification, or (B) orally, which is then promptly confirmed and duplicated
by a written memorandum annotated as described in (A) above; or (ii)
observations made by one party of the other party's facilities, equipment,
products or Proprietary Information.
1.7 INVESTMENT AGREEMENTS. "Investment Agreements" shall have the
meaning ascribed to that term in the recitals hereof.
1.8 TECHNICAL ASSISTANCE FEE. "Technical Assistance Fee" shall mean the
minimum monthly fee established in Part I of Attachment B of this Agreement plus
all additional fees corresponding to (a) technical man hours provided by DAKOTA
at the respective per hour rate specified in Part II of Attachment B and (b)
supplemental support services requested by STANDARD and charged at the standard
rates imposed by DAKOTA.
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1.9 TECHNICAL INFORMATION. "Technical Information" shall mean all trade
secrets, know-how, computer software (including copyrights in said software),
knowledge, technology, means, methods, processes, practices, formulas,
techniques, procedures, technical assistance, designs, drawings, written and
oral recitations of data, specifications, manufacturing procedures, and other
valuable information of whatever nature, whether confidential or not, and
whether proprietary or not, which DAKOTA provides to STANDARD pursuant to this
Agreement or otherwise.
1.10 UNITED STATES. "United States" shall mean the United States of
America.
II. SCOPE OF SERVICES PROVIDED BY DAKOTA
Subject to all of the terms and conditions set forth in this Agreement:
2.1 MARKETING AND TECHNICAL SERVICES
(a) DAKOTA agrees to have available, at all times during the term of
this Agreement, the necessary resources and personnel to provide to STANDARD all
of the Advisory Services.
(b) DAKOTA agrees to provide to STANDARD, within a reasonable time
period following the request by STANDARD, all Advisory Services and all
associated Technical Information.
(c) DAKOTA agrees to provide to STANDARD all Technical Information
relevant to the current or proposed operations of STANDARD or its Affiliates.
STANDARD may not use or disclose, directly or indirectly the Advisory
Services or the Technical Information received from DAKOTA, other than as
provided for within this Agreement, provided, however, that nothing in this
Agreement will prohibit STANDARD from disclosing Technical Information or using
and applying the Advisory Services to its Affiliates.
2.2 USE OF TECHNICAL INFORMATION BY STANDARD.
(a) During the term of this Agreement, STANDARD shall have the right
to use the Technical Information and the Advisory Services in connection with
the marketing and sales activities, the manufacturing operations and the
business development of STANDARD and any or all of its Affiliates.
(b) After the term of this Agreement, STANDARD and any of its
Affiliates shall have the right to use the Technical Information.
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2.3 NO RIGHTS BY IMPLICATION. No rights or licenses are granted or
deemed granted hereunder or in connection herewith, other than those rights or
licenses expressly granted in this Agreement. Without limiting the generality
of the foregoing: (a) nothing contained herein shall be construed as granting
or implying a license under any patent or patent application; and (b) disclosure
of Proprietary Information pursuant to this Agreement shall not be construed as
granting any right of ownership of such Proprietary Information to the receiving
party.
2.4 SOFTWARE PROGRAMS. Performance of the tasks described in Attachment
A hereto may involve the use of software programs developed at private expense
and which are proprietary to DAKOTA. Such programs are not available to either
domestic or foreign firms. Nothing contained herein shall be construed as
granting or implying any license or other right of ownership or use over such
software programs to STANDARD.
2.5 NATURE OF INFORMATION TO BE PROVIDED.
Notwithstanding anything contained in this Agreement to the contrary all
information to be provided by DAKOTA to STANDARD pursuant to this Agreement
shall be in English and shall be expressed in such weights and measures as are
customarily used by DAKOTA for such information.
III. PAYMENTS
3.1 PAYMENT OF TECHNICAL ASSISTANCE FEE. STANDARD shall pay DAKOTA the
Technical Assistance Fee for the Advisory Services and the Technical Information
provided to STANDARD hereunder, as follows:
(a) On the last day of each calendar month during the term of the
Agreement, STANDARD shall pay the minimum monthly fee stipulated in Part I of
Attachment B of this Agreement. The full amount of the minimum monthly fee paid
each month by STANDARD to DAKOTA pursuant to this Section 3.1(a) shall be
creditable against any fees payable by STANDARD to DAKOTA with respect to the
same calendar month in accordance with Section 3.1(b) hereof;
(b) in accordance with the following schedule, STANDARD shall pay
all fees for Advisory Services incurred during each calendar month according to
the per hour rates stipulated in Part II of Attachment B of this Agreement:
(i) Within the first 10 days of each calendar month during the
term of the Agreement, DAKOTA shall provide STANDARD with a monthly invoice that
shall contain (A) a general description of the Advisory Services provided by
DAKOTA to STANDARD during the immediately preceding calendar month, (B) the
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names of the DAKOTA personnel that performed such Advisory Services, (C) the
aggregate number of man hours incurred by all the DAKOTA personnel in connection
with the performance of such Advisory Services, and (D) the corresponding
aggregate charge calculated in accordance with the applicable per hour rates
stipulated in Part II of Attachment B of this Agreement;
(ii) STANDARD shall submit full payment of all invoiced fees
within 10 days of receipt of the invoice.
3.2 FEE NOT REFUNDABLE OR REDUCIBLE. The Technical Assistance Fee shall
not be refundable to STANDARD under any circumstances whatsoever. No part of
the Technical Assistance Fee may be reduced due to any counterclaim, set-off,
adjustment or other right which STANDARD might have against DAKOTA, any other
party or otherwise.
3.3 METHOD OF PAYMENT.
(a) All payments under Section 3.1 hereof shall be made in Dollars,
by wire transfer, to such bank or account in the United States as DAKOTA may
from time to time designate in writing.
(b) Whenever any payment hereunder shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the immediately
succeeding Business Day.
(c) Payments hereunder shall be considered to be made as of the day
on which they are received by DAKOTA's bank in the United States.
(d) STANDARD shall be responsible at its own cost for all United
States taxes (other than income taxes or other taxes imposed upon DAKOTA or its
Affiliates and measured by the gross or net income of DAKOTA and its Affiliates)
incident to DAKOTA's rendering of services and granting of rights hereunder.
IV. PROPRIETARY INFORMATION
4.1 CONFIDENTIALITY MAINTAINED. STANDARD and DAKOTA agree that each of
them has a proprietary interest in their respective Proprietary Information.
All disclosures to either party, its agents and employees shall be held in
strict confidence by such party, its agents and employees, for the purposes of
such party's business only as limited by the terms and conditions hereof, and
such party shall disclose such Proprietary Information only to those of its
agents and employees to whom it is necessary in order properly to carry out
their duties as limited by the terms and conditions hereof.
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4.2 NON-USE AFTER TERMINATION. Neither party shall use the Proprietary
Information of the other party after termination or expiration of this Agreement
(except as STANDARD is permitted to use such information pursuant to Section
2.2(b) hereof). Each party shall, at its expense, return the other party's
Proprietary Information to such other party as soon as practicable after the
date of such termination or expiration of this Agreement. All such Proprietary
Information shall remain the exclusive property of the providing party during
the term of this Agreement and thereafter.
4.3 NON-USE FOR OTHER PRODUCTS. Each party agrees that it shall not,
during the term of this Agreement or thereafter, knowingly use any Proprietary
Information of the other party in connection with non-paint or coating products.
4.4 CONSULTANTS AND SUBCONTRACTORS. The provisions of Article IV of this
Agreement shall also apply to any consultants, subcontractors that either party
may engage in connection with its obligations under this Agreement.
4.5 AFFILIATES. The provisions of Article VI shall also apply to any
officers, employees, directors or shareholders of any Affiliate that may receive
Technical Information or use the Advisory Services.
4.6 LIABILITY FOR DISCLOSURE. Notwithstanding anything contained in this
Agreement to the contrary, neither party shall be liable for a disclosure of
Proprietary Information of the other party if the information so disclosed:
(a) was in the public domain at the time of disclosure without
breach of this Agreement;
(b) was known to and recorded in the records of the receiving party
from a source other than the providing party at the time of disclosure by the
providing party to the receiving party and can be so demonstrated;
(c) is disclosed inadvertently despite the exercise of the same
degree of care which the receiving party takes to preserve and safeguard its
own proprietary confidential information;
(d) was independently developed by and recorded in the records of
the receiving party and is so demonstrated promptly upon receipt of the
documentation and technology by the receiving party; or
(e) was disclosed without restriction to the receiving party by a
third party without breach of this Agreement by the receiving party.
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V. REPRESENTATIONS, WARRANTIES AND COVENANTS
STANDARD and DAKOTA each hereby represents, warrants and covenants to the
other as follows:
5.1 RIGHT, POWER AND AUTHORITY. It has full right, power and authority
to enter into this Agreement and there is no impediment which would inhibit its
ability to perform the terms and conditions imposed on it by this Agreement.
5.2 BINDING OBLIGATION. This Agreement has been duly authorized by all
necessary corporate and stockholder action and constitutes a valid and binding
obligation on it, enforceable in accordance with its terms.
5.3 CORPORATE GOOD-STANDING. DAKOTA is a company duly organized and
validly existing and in good standing under the laws of the State of Florida;
STANDARD is a corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware; and each is duly qualified and
authorized to do business wherever the nature of its activities or properties
requires such qualification or authorization.
5.4 NO GOVERNMENT APPROVALS NEEDED. No registration with or approval of
any government agency or commission of any jurisdiction is necessary for the
execution, delivery or performance by it of any of the terms of this Agreement,
or for the validity and enforceability hereof or with respect to its obligations
hereunder, except such registrations and approvals as have been made or
obtained, certified copies of which have been delivered to the other party.
5.5 NO PROVISIONS CONTRAVENED. There is no provision in the company or
corporate charter, By-Laws or its equivalent company or corporate governing
documents and no provision in any existing mortgage, indenture, contract or
agreement binding on it which would be contravened by the execution, delivery or
performance by it of this Agreement.
5.6 NO CONSENT OF THIRD PARTIES NEEDED. No consent of any trustee or
holder of any of its indebtedness is or shall be required as a condition to the
validity of this Agreement, except such consents as have been obtained,
certified copies of which have been delivered to the other party.
5.7 NO PROCEEDINGS PENDING. There is no action or proceeding pending or
in so far as it knows or ought to know threatened against it before any court,
administrative agency or other tribunal which might have an adverse effect on
its business or condition, financial or otherwise, or its operation of any
business.
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5.8 NOT CONTRAVENE ANY LAW. Neither its execution nor its delivery of
this Agreement nor its fulfillment of or compliance with the terms and
provisions hereof shall contravene any provision of the laws of any
jurisdiction, including, without limitation, any statute, rule, regulation,
judgment, decree, order, franchise or permit applicable to it.
5.9 CONTINUED EFFECT OF REPRESENTATIONS AND WARRANTIES. It covenants and
agrees that its representations and warranties contained in this Agreement shall
remain true in all respects at all times after the Effective Date with the same
effect as though such representations and warranties had been made on and as of
each such subsequent date.
VI. TERMINATION AND EXPIRATION
6.1 TERM OF AGREEMENT. This Agreement shall commence on the Effective
Date and shall terminate on the Investment Agreements Closing Date, unless
otherwise terminated pursuant to Section 6.3 below. In case of termination,
STANDARD shall pay to DAKOTA all Technical Assistance Fees calculated in
accordance with this Agreement accrued for, and all reimbursable expenses
incurred during, periods up to the effective date of termination.
6.2 RENEWAL; EXTENSION. STANDARD and DAKOTA intend and hereby agree to
negotiate in good faith a new agreement in substantially the same terms and
conditions of this Agreement or a renewal or extension hereof, to become
effective as of the Investment Agreements Closing Date. The new agreement or
extension shall be for a term of at least one year from the Investment
Agreements Closing Date.
6.3 EVENTS OF DEFAULT. Upon the occurrence of any of the following
events, this Agreement may be terminated by the other party by giving written
notice of termination:
(a) a material breach or default as to any obligation hereunder by
either party and, if remediable, the failure of such party to promptly pursue
(within ninety (90) days after receiving written notice thereof from the other
party) a reasonable remedy designed to cure (in the reasonable judgment of the
other party) such material breach or default;
(b) a material breach or default as to any obligation hereunder by
either party and, if not remediable, the expiration of the thirty (30) day
period immediately succeeding the date on which such party receives written
notice thereof from the other party; or
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(c) STANDARD's failure to pay any amount to DAKOTA when it becomes
due hereunder and, following such failure of payment, STANDARD's failure to pay
such amount in full within thirty (30) days after receiving written notice
thereof from DAKOTA.
VI. MISCELLANEOUS
7.1 ASSIGNMENTS.
(a) This Agreement and any and all of the rights and obligations of
either party hereunder shall not be assigned, delegated, sold, transferred,
sublicensed or otherwise disposed of, by operation of law or otherwise, without
the prior written consent of the other party; PROVIDED, HOWEVER, that the other
party's consent shall not be required with respect to any assignment,
delegation, sale, transfer, sublicense or other disposition by a party to
another division of such party, to any subsidiary of such party or to any
Affiliate of any such division or subsidiary. Any attempted assignment,
delegation, sale, transfer, sublicense or other disposition, by operation of law
or otherwise, of this Agreement or of any rights or obligations hereunder
contrary to this Section 7.1 shall be a material breach of this Agreement by the
attempting party, shall be void and shall be of no force or effect.
(b) This Agreement shall be binding upon, and inure to the benefit
of, each party and its respective successors and assigns, to the extent such
assignments are in accordance with this Section 7.1.
7.2 GOVERNING LAW. This Agreement shall be governed, interpreted and
construed in accordance with the laws of the State of Florida, United States and
shall be interpreted and construed in accordance with normal usage of English in
the United States.
7.3 ARBITRATION. Any disputes between the parties relating to this
Agreement and its formation, breach, performance, interpretations and
applications shall be submitted to binding arbitration under the Commercial
Arbitration Rules of the American Arbitration Association before a panel of
three (3) arbitrators (the "Arbitrators"). Any arbitration shall take place in
Miami, Florida at the offices of the American Arbitration Association. All
awards rendered by the Arbitrators shall be in writing and shall be given within
thirty (30) days from the close of the arbitration hearing, all arbitration
awards shall be final and binding upon the parties and may be entered in any
court of competent jurisdiction.
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7.4 WAIVER. A waiver of any breach or any provision of this Agreement
shall not be construed as a continuing waiver of other breaches of the same or
other provisions of this Agreement.
7.5 NO OTHER RELATIONSHIP. For purposes of this Agreement and all
Advisory Services and Technical Information to be provided hereunder, DAKOTA
shall not be considered a partner, co-venturer, agent, employee or
representative of STANDARD, but shall remain in all respects an independent
contractor. Neither party shall have any right or authority to make or undertake
any promise, warranty, or representation, to execute any contract, or otherwise
to assume any obligation or responsibility in the name of or on behalf of the
other party, except to the extent specifically authorized herein or in writing
by the other party.
7.6 INDEMNIFICATION. STANDARD will indemnify and hold harmless DAKOTA,
its Affiliates and the respective directors, officers, agents and employees of
DAKOTA and its Affiliates from and against any claims, actions, proceedings,
demands, liabilities, damages, judgments, assessments, losses and costs arising
out of or in connection with the services rendered by DAKOTA under this
Agreement. STANDARD will not, however, be responsible for any claims,
liabilities, losses, damages or expenses that are determined by the Arbitrators
to result primarily from DAKOTA's gross negligence or willful malfeasance.
7.7 LIMITATION OF LIABILITY. DAKOTA shall have no liability for claims,
liabilities, losses, damages or expenses except such as are determined by final
and non-appealable judgement of a court of competent jurisdiction to result
primarily from DAKOTA's gross negligence or willful malfeasance in providing a
service hereunder.
7.8 DIRECT PAYMENT OF EXPENSES; REIMBURSEMENT. STANDARD shall pay
directly all travel, accomodation and other similar expenses incurred by DAKOTA
in rendering Advisory Services hereunder. Furthermore, STANDARD shall reimburse
DAKOTA for all direct costs and expenses (including reasonable allocation of
general overhead expenses of DAKOTA) incurred by DAKOTA in rendering Advisory
Services hereunder. STANDARD recognizes that DAKOTA will make arrangements with
third parties for certain services described in Section 2.1. The foregoing may
involve, among other things, various types of insurance, legal, accounting and
other matters requiring outside professional services. To the extent that
DAKOTA incurs obligations for STANDARD consistent with Section 2.1, STANDARD
shall pay to DAKOTA, or to the provider of such services, the actual and
identifiable costs of such services and benefits, or, in those cases where
actual costs cannot be identified, STANDARD's proportionate share of such
services, and the sums necessary to discharge, repay or to otherwise compensate
DAKOTA for any obligations incurred by DAKOTA in connection therewith. DAKOTA
shall submit to STANDARD
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a monthly statement of all such sums due in accordance with the provisions of
this Section 7.8 and each such statement shall be paid by STANDARD within 30
days after the delivery of such statement to STANDARD. At the request of
STANDARD, DAKOTA shall from time to time certify to STANDARD such facts from
DAKOTA's records as may be relevant to the determination of the reimbursement
amounts.
7.9 NOTICES. Each notice or arbitral decision required or permitted to
be given or sent under this Agreement shall be given by telecopy transmission or
by registered or recorded delivery air mail letter to STANDARD at:
Standard Brands Paint Company
4300 W. 190th Street
Torrence, CA 90509-2956
ATTENTION: Chief Executive Officer
Telecopy: (310) 371-8770
and to DAKOTA at:
Dakota Services, Inc.
1200 S. Pine Island Road, Suite 700
Plantation, FL 33324
ATTENTION: Mr. Jose M. Lambert
Telecopy: (305) 423-6960
Either party may change its address or its telecopy number for purposes of this
Agreement by giving the other party written notice of its new address or
telecopy number. Any such notice if given or made by registered or recorded
delivery air mail letter shall be deemed to have been received on the earlier of
the date actually received and the date ten (10) days after the same was posted
(and in proving such it shall be sufficient to prove that the envelope
containing the same was properly addressed and posted as aforesaid) and if given
or made by telecopy transmission shall be deemed to have been received at the
time of dispatch, unless such date of deemed receipt is not a Business Day, in
which case the date of deemed receipt shall be the next succeeding Business Day.
7.10 ENTIRE AGREEMENT. This Agreement embodies the entire understanding
between the parties relating to the subject matter hereof, whether written or
oral, and there are no prior representations, warranties or agreements between
the parties not contained in this Agreement.
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7.11 INVALIDITY. If any provision of this Agreement is declared invalid
or unenforceable by a court having competent jurisdiction, it is mutually agreed
that this Agreement shall endure except for the part declared invalid or
unenforceable by order of such court. The parties shall consult and use their
best efforts to agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid or unenforceable provision in light of
the intent of this Agreement.
7.12 AMENDMENTS. Any amendment or modification of any provision of this
Agreement must be in writing, dated and signed by both parties hereto.
7.13 FEES PAYABLE. STANDARD and DAKOTA acknowledge that there are no
broker's commission, finder's fee or other amounts payable with regard to this
transaction, and STANDARD and DAKOTA agree to indemnify and hold the other
harmless from and against all liability, claims, demands, damages or costs of
any kind arising from or connected with any broker's or finder's fee, commission
or charge claimed to be due any person arising from the indemnitor's conduct
with respect to this Agreement and the transactions contemplated herein.
7.14 FORCE MAJEURE.
(a) Neither STANDARD nor DAKOTA shall be liable in damages, or shall be
subject to termination of this Agreement by the other party, for any delay or
default in performing any obligation hereunder if that failure or delay is due
to any cause beyond the reasonable control and without default or negligence of
that party; PROVIDED that, in order to excuse its delay or default hereunder, a
party shall notify the other of such cause, specifying the nature and
particulars thereof and the expected duration thereof; and PROVIDED, FURTHER,
that within ten (10) Business Days after the termination of such cause, such
party shall give notice to the other party specifying the date of termination
thereof. All obligations of both parties shall return to being in full force
and effect upon the termination of such cause.
(b) For the purposes of this Section, a "cause beyond the reasonable
control" of a party shall include, without limiting the generality of the
phrase, any act of God, act of any government or other authority or statutory
undertaking, industrial dispute, fire, explosion, accident, power failure,
flood, riot or war (declared or undeclared).
7.15 INTEREST ON OVERDUE AMOUNTS. All moneys due and owing to DAKOTA
hereunder but not paid by STANDARD on the due date thereof shall bear interest
(in Dollars) at the rate of one per cent (1%) per annum above the then
applicable prime rate announced by Chase Manhattan Bank, N.A. for 90-day Dollar
loans
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to prime commercial customers in Miami, Florida. Such interest shall accrue
from the date on which such moneys become due and owing until payment thereof.
7.16 SURVIVAL OF CONTENTS. Notwithstanding anything else in this
Agreement to the contrary, the parties agree that Sections 2.1, 2.2, 2.3, 2.4,
2.5, 3.1, 3.2, 3.3, 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 7.6, 7.7, 7.8 and 7.15 shall
survive the termination or expiration of this Agreement to the extent required
thereby for the full observation and performance by any or all of the parties
hereto.
7.17 HEADINGS. Any headings contained herein are for directory purposes
only, do not constitute a part of this Agreement, and shall not be employed in
interpreting this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement.
DAKOTA SERVICES, INC.
By /s/ Jose M. Lambert
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Name: Jose M. Lambert
Title: Financial Administrative Manager
STANDARD BRANDS PAINT COMPANY,
By /s/ Ronald I. Scharman
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Name: Ronald I. Scharman
Title: CEO
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Exhibit 4
INDEMNIFICATION AGREEMENT
This Indemnification Agreement: ("AGREEMENT"), dated as of February 15,
1995, is made by and between Standard Brands Paint Company, a Delaware
corporation (the "COMPANY"), and
(the "INDEMNITEE").
WHEREAS, the Indemnitee has served as a director of the Company at the
Company's request; and has tendered or may tender his or her resignation;
WHEREAS, in recognition of the Indemnitee's services on behalf of the
Company, the Company wishes to provide for the continuing indemnification of the
Indemnitee, and to provide for the continued coverage of the Indemnitee under
the Company's directors' and officers' liability insurance policies for the
period and subject to the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the Indemnitee's past service to the
Company, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. DEFINITIONS
1.1. EXPENSES. For purposes of this Agreement, "Expenses" mean
reasonable attorneys' fees and disbursements, accounting and witness fees,
travel and deposition costs, expenses of investigations, expenses of Proceedings
and related appeals, and any expenses of establishing a right to
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indemnification, pursuant to this Agreement or otherwise. The term "Expenses"
does not include the amount of judgments, fines or penalties actually levied
against Indemnites.
1.2. PROCEEDING. For purposes of this Agreement, "Proceeding"
means any threatened, pending, or completed action, suit or other proceeding,
whether brought in the name of the Company or otherwise and whether civil,
criminal, administrative, investigative or any other type whatsoever.
2. CONTINUING INDEMNIFICATION
2.1. INDEMNIFICATION. Subject to the limitations contained in
this Agreement, the Indemnitee shall be entitled to indemnification and
reimbursement of expenses by the Company to the extent set forth in Article V of
the Company's Bylaws, as currently in effect (the "BY-LAWS"), and as set forth
in Article VII of the Company's Restated Certificate of Incorporation, as
currently in effect (the "CERTIFICATE OF INCORPORATION"), as well as to the
exculpation set forth in Article VI thereof. Copies of the Certificate of
Incorporation and Articles V of the By-Laws are attached to this Agreement.
This indemnification right shall be a separate contractual right of the
Indemnitee and shall not be affected by any subsequent amendment of either the
By-Laws or the Certificate of Incorporation. The parties agree that the
indemnification rights of the Indemnitee, and the obligations of the Company in
respect thereof, are to be continued pursuant to
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this Agreement as set forth in the Certificate of Incorporation, By-Laws and
applicable law, without any expansion or reduction whatsoever, except as
specifically set forth herein.
3. INSURANCE
3.1. DUTY TO OBTAIN EXTENDED INSURANCE COVERAGE. The Company
currently has a Directors and Officers Insurance and Company Reimbursement
Policy, 443-51-68 issued by National Union Fire Insurance Company, and a
Directors and Officers Liability and Indemnification Excess Policy No.
RDX0001241 issued by RLI Insurance Company each with a maximum aggregate limit
of liability of $5,000,000 (the "POLICIES"). Promptly following receipt from
the Indemnitee of an executed original of this Agreement, the Company shall add
to the Policies a run-off endorsement (the "ENDORSEMENTS") on the existing
Policies subject to substantially the same terms and conditions covering
Indemnitee as a named insured. The Endorsements shall be non-cancelable and
shall provide for a extended reporting period through a date not earlier than
the third anniversary of the Closing Date (as defined in the Investment
Agreement between the Company, Corimon S.A.C.A. and other parties thereto) for
any and all claims covered under the Policy. The Company shall pay all
premiums, commissions and other costs or charges incurred in obtaining the
Endorsements and shall promptly deliver to Indemnitee a Certificate of
Confirmation of Insurance with respect to such Endorsements.
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3.2. EXPENSES PAID BY INSURANCE. The Company shall not be
obligated to indemnify the Indemnitee for Expenses, judgments, fines, penalties
or amounts paid in settlement which have been paid directly to Indemnitee by
directors' and officers' insurance.
4. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled to
indemnification on some claims, issues or matters, but not on others, involved
in a Proceeding, the Company shall indemnify the Indemnitee against Expenses,
judgments, fines, penalties and amounts paid in settlement incurred by the
Indemnitee concerning these matters for which the Indemnitee is entitled to be
indemnified pursuant to the provisions of this Agreement.
5. ADVANCEMENT OF EXPENSES. Pursuant to Section 145 of the Delaware
General Corporation Law and the By-Laws, and upon terms and conditions as shall
be reasonably determined by the Board of Directors, the Expenses incurred by
Indemnitee in investigating, defending, or appealing any Proceeding covered
hereunder shall be paid by the Company in advance (unless, in the written
opinion of regular outside counsel to the Company, applicable law precludes such
advance payment), with the understanding and agreement hereby made and entered
into by Indemnitee and the Company, that in the event it shall ultimately be
determined that Indemnitee was not entitled to be indemnified, or was not
entitled to be fully indemnified, that the Indemnitee
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shall repay to the Company such amount, or the appropriate portion thereof, so
paid or advanced.
6. NOTICE AND OTHER INDEMNIFICATION PROCEDURES.
6.1. NOTICE TO COMPANY. Promptly after becoming aware of or
receiving notice of the commencement of or the threat of commencement of any
Proceeding, the Indemnitee shall, if the Indemnitee believes that
indemnification with respect thereto may be sought from the Company under this
Agreement, notify the Company in writing of the commencement or threat of
commencement thereof. In addition, Indemnitee shall give the Company such
information and cooperation as it may reasonably require and as shall be within
Indemnitee's power. This omission to so notify the Company will not relieve it
from any liability unless the failure to notify materially prejudiced the
Company, nor shall such omission relieve the Company from any liability which it
may have to Indemnitee other than under this Agreement.
6.2. NOTICE TO INSURER. If, at the time of the commencement of a
Proceeding or notice thereof pursuant to Section 6.1 hereof, the Policies, the
Endorsements, or the extended reporting period under the Endorsements, are still
in effect, the Company shall give prompt notice of the commencement of such
Proceeding to the insurer in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all reasonably necessary
and desirable
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action to cause such insurer to pay, on behalf of the Indemnitee, all amounts
payable as a result of such Proceeding in accordance with the terms of such
policies, unless the Company has already paid such amounts directly to the
Indemnitee.
6.3. CHOICE OF COUNSEL. If the Company shall be obligated to pay
the Expenses of any Proceeding, the Company shall be entitled to assume the
defense of such Proceeding, with counsel approved by the Indemnitee (which
approval the Indemnitee shall not unreasonably withhold), upon the delivery to
the Indemnitee of written notice of the Company's election to do so. After
delivery of such notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to the
Indemnitee under this Agreement for any fees of any counsel other than the
counsel approved by the Indemnitee and retained by the Company, which may be
subsequently incurred by the Indemnitee with respect to the same Proceeding;
provided that in any such case (i.e. the Company is obligated to pay the
Expenses of such Proceeding) (a) the Indemnitee shall have the right to employ
his own counsel in any such Proceeding at the Indemnitee's expense; and (b) if
(1) the employment of counsel by the Indemnitee has been previously authorized
by the Company in writing, (2) the Indemnitee shall have reasonably concluded
that there is an actual conflict of interest between the Company and the
Indemnitee in the conduct of any such defense, (3) the Indemnitee shall have
additional defenses available for Indemnitee's defense which defenses are
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adverse to the position or defenses of the Company, or (4) the Company or its
counsel shall have failed to diligently defend Indemnitee, the Indemnitee may
employ separate counsel and the Expenses of such counsel reasonably and actually
incurred by the Indemnitee shall be included in the Expenses of such Proceeding.
7. EXCEPTIONS. Any other provisions herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:
7.1. CLAIMS INITIATED BY INDEMNITIEE. To indemnify the
Indemnitee with respect to Proceedings initiated or brought voluntarily by the
Indemnitee and not by way of defense, except with respect to Proceedings brought
to establish or enforce a right to indemnification under this Agreement, the
Policies or any successor policies or the Company's Certificate of Incorporation
or By-Laws.
7.2. LACK OF GOOD FAITH. To indemnify the Indemnitee for any
Expenses incurred by the Indemnitee with respect to any proceeding instituted by
the Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that the material assertions made by the Indemnitee in
such Proceeding were not made in good faith or were frivolous.
7.3. SEC LIMITATION. To indemnify the Indemnitee to the extent
such indemnification would cause the Company to
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violate any undertaking the Company makes to the Securities and Exchange
Commission ("SEC") with respect to indemnification;
7.4. SETTLEMENTS. To indemnify the Indemnitee for any amount
paid in settlement of any Proceeding without the prior written consent of the
Company, which consent shall not be unreasonably withheld.
8. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall do all things that may be necessary to
secure such rights, including the execution of such documents necessary to
enable the Company effectively to bring suit to enforce such rights.
9. NON-EXCLUSIVITY AND CONTINUATION OF RIGHTS. The provisions for
indemnification and advancement of Expenses set forth in this Agreement shall
not be deemed exclusive of any other rights which the Indemnitee may have
pursuant to the Certificate of Incorporation or By-Laws, any agreement, vote of
the Company's stockholders or disinterested directors, provisions of Delaware
law or otherwise. The Indemnitee's rights hereunder shall continue after the
Indemnitee has ceased acting as a director or the Company.
10. SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or
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unenforceable for any reason whatsoever, (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including without
limitation, all portions of any paragraphs of this Agreement containing any such
provision held to be invalid, illegal or unenforceable that are not themselves
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby, and (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, all portions of any paragraph of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (c) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
11. MODIFICATION AND WAIVER. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
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12. EFFECTIVENESS OF AGREEMENT. This Agreement shall be effective as
of the date set forth on the first page (the "EFFECTIVE DATE") and shall apply
to acts or omissions of Indemnitee whether they occurred prior to such date or
thereafter if Indemnitee was a director of Company, or was serving at the
request of Company as a director, officer, agent or employee of another
enterprise, at the time such act or omission occurred.
13. SUCCESSORS AND ASSIGNS. The terms of this Agreement shall bind,
and shall inure to the benefit of, the successors and assigns of the parties
hereto; provided that the Indemnitee may not assign his or her rights or
obligations hereunder without the prior written consent of the Company (other
than assignments effected by will, intestacy or operation of law), and no
assignment of its rights or obligations hereunder by the Company shall relieve
it from responsibility for its obligations hereunder.
14. NOTICE. All notices, requests, demands and other communications
under this Agreement shall be in writing, addressed to the parties' addresses
set forth below their signatures to this Agreement, and shall be deemed duly
given (a) if delivered by hand and receipted for by the party addressee, on
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the day delivered, or (b) if mailed by certified or registered mail with postage
prepaid, on the third business day after the mailing date. Any party may change
its address for notices, requests, demands and communications by giving notice
thereof in the manner specified in this Section 14.
15. GOVERNING LAW. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware. Notwithstanding
Section 5 of Article V of the By-Laws, the Indemnitee shall have the right to
apply to any court of competent jurisdiction for the purpose of enforcing the
Indemnitee's right to indemnification under this Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
effective as of the date first above written.
INDEMNITEE
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STANDARD BRANDS PAINT COMPANY
By:
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Name:
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Title:
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