EXHIBIT 10.1
CONTRACT #I050001
RESIN PURCHASE AGREEMENT
This Agreement made this 29th day of March , 2005, and between AOC, LLC, with
offices at 000 Xxxxxxx 00 Xxxx, Xxxxxxxxxxxx, XX 00000 ("Seller") and INSITUFORM
TECHNOLOGIES, INC., with offices at 000 Xxxxxx 00 Xxxx Xxxxx, Xxxxxxxxxxxx, XX
00000 ("Buyer").
W I T N E S S E T H
WHEREAS, Seller is willing to manufacture, sell and deliver to Buyer certain
unsaturated polyester resins, certain vinyl ester resins and other resins as may
be agreed in writing between the parties from time to time which Buyer qualifies
for use in Buyer's manufacturing process ("Products"), the current product list
for which is set forth in Exhibit A hereto, which is incorporated herein by this
reference; and
WHEREAS, Buyer desires to purchase Products on the terms set forth herein;
NOW, THEREFORE, Seller and Buyer agree:
1. TERM; CONTRACT YEAR
1.1 This Agreement shall be effective as of March 29, 2005 ("Effective
Date"), shall continue in full force and effect through and including December
31, 2007 (the "Initial Term"), and shall thereafter continue Contract Year to
Contract Year thereafter until cancelled by either party upon the giving of at
least one hundred eighty (180) days written notice, such cancellation to be
effective only at the end of the Initial Term or at the end of any Contract Year
thereafter.
1.2 Contract Year. For purposes of this Agreement, the initial Contract
Year shall commence on the Effective Date and end on December 31, 2005, and
thereafter shall on January 1 commence for each succeeding twelve (12) month
period during the term of this Agreement. A partial Contract Year shall contain
less than twelve (12) months.
2. QUALIFICATION; QUANTITIES
2.1 Qualification. After the Effective Date, Buyer shall establish that
each new product to be sold hereunder meets Buyer's performance criteria and
when Buyer has so qualified each such product, Buyer shall notify Seller in
writing of such qualification and such product shall be added to Exhibit A and
such product shall then become a Product under this Agreement at such time as
the parties reach agreement on the initial price therefor. If, during the term
of this Agreement, Buyer determines that Buyer's product performance criteria
have changed, Buyer shall advise Seller and provide Seller a reasonable
opportunity to provide product which will meet the changed criteria, and if
Seller is able to produce product which meets such performance criteria, and if
the parties can then agree upon a price for such product, such product shall be
added to in Exhibit A in the form of an amendment to this Agreement and such
product shall become a Product hereunder. To enable Buyer to establish whether
any of Seller's products proposed to be sold
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hereunder meet Buyer's performance criteria, Seller at such time or times as
Buyer may request, shall supply, at no cost to Buyer, a reasonable amount of
such product, not to exceed a total of three (3) fifty-five gallon drums.
2.2 Quantities. Subject to the terms and conditions herein set forth,
Seller agrees to sell and deliver, and Buyer agrees to purchase and accept
during each Contract Year during the term hereof, for internal consumption and
not for resale, a minimum of [REDACTED]. Buyer's purchases of Products from
Seller during the 2005 calendar year but prior to the Effective Date shall count
toward Buyer's purchase requirements for the initial Contract Year.
3. BUYER'S CUSTOMER SPECIFICATIONS; PRODUCT SPECIFICATIONS; EXCLUSIVITY;
PRODUCT SAMPLES; QUALITY AUDIT.
3.1 Buyer's Customer Specifications. If any customer of Buyer specifies
or demands use of a resin which is not qualified as a Product hereunder, Buyer
will use reasonable efforts to source a resin from Seller which meets said
customer's specifications, it being understood and agreed, however, that Buyer
shall not be required to purchase such resin from Seller hereunder.
3.2 Product Specifications. The Products shall meet the specifications
provided to Seller in the product specification book provided by Buyer to Seller
or any revised specifications to which the parties agree in writing (hereinafter
"Product Specifications") as well as conform to the Statistical Process Control
Analysis criteria set forth in Exhibit B ("SPCA"). On a quarterly basis, unless
otherwise agreed, Seller shall deliver to Buyer the SPCA for Product from each
facility of Seller for which Product is shipped hereunder.
3.3 Exclusivity. Seller shall not sell the Products to any purchaser
other than Buyer or third parties designated by Buyer (each a "Third Party
Designee"), it being expressly understood and agreed that Buyer shall ensure
that any such Third Party Designee comply with the terms and conditions which
govern Buyer's performance hereunder and Buyer shall guaranty the obligation of
each Third Party Designee to pay Seller for its purchases of Product under this
Agreement. All Product shipped by Seller shall be in tanks, tankers, totes or
drums bearing only those designations specifically required by law or as
otherwise agreed between Buyer and Seller and any special names, designations or
other markings not otherwise specifically required by law or owned by Seller
shall be proprietary to Buyer and shall not be used by Seller on products
supplied to third parties other than a Third Party Designee.
3.4 Product Samples. Seller agrees to take two (2) one-quart samples of
each delivery of Product hereunder and, if more than one production batch is
used to make a delivery hereunder, then two (2) one-quart samples of each batch
in such delivery shall be taken by Seller. Seller shall supply one of the
one-quart samples from each delivery or batch to such representative or
department of Buyer, as Buyer may in writing advise Seller. Such samples are to
be suitably labeled to identify the purchase order release, delivery and invoice
number, and Seller shall retain the other one-quart sample for a period of at
least ninety (90) days. Buyer may request, from time to time, up to one (1)
additional gallon of each shipment of Product to be used as a retained sample
when necessitated by circumstances or Buyer's customers or their practices.
3.5 Quality Audit. Upon at least five (5) business days' prior notice
to Seller, Buyer shall have the right at any time and from time to time to
perform during normal business hours a quality audit at any facility of Seller
producing, processing or storing Product. Seller will maintain all ISO
9002-required records, reports, documents and other information pertaining to
this Agreement for at least one (1) year after termination or expiration of this
Agreement. Buyer may audit, copy and inspect such records at reasonable times.
Seller will make the information reasonably required to conduct the audit
available on a timely basis
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and assist Buyer and its internal or external auditors as reasonably necessary.
Seller will not be responsible for Buyer's expenses incurred for such an audit.
4. ESTIMATES; RELEASES; ORDER OF PRECEDENCE
4.1 Estimates. For planning purposes and not as a requirement to
purchase, Buyer shall provide Seller with quarterly estimates of Buyer's
requirements ("Estimated Requirements"), by each formulation of Product, by
location, by month, for each calendar quarter during the term hereof. The
quarterly estimates shall be delivered to Seller at least thirty (30) days prior
to the first day of the affected calendar quarter.
4.2 Releases. Orders for any Product shall be made, at Buyer's
discretion, by written or oral releases issued to Seller. The releases shall be
submitted by authorized personnel of Buyer in compliance with Seller's standard
lead time policy and shall set forth the following: (a) a statement identifying
the release to this Agreement and the Product being purchased; (b) the number by
which the release shall be identified; (c) the quantity of the particular
Products to be delivered; (d) the date of delivery and ultimate destination to
which the Product is to be shipped; and (e) if temperature upon delivery to
Buyer's site is to vary from the temperature ranges set forth in the Product
Specifications, the temperature at which the Product is to be delivered. Buyer
shall use commercially reasonable efforts to submit each release to Seller in
compliance with Seller's standard lead time policy. As of the Effective Date of
this Agreement, the standard lead time is fourteen (14) days. Seller will give
at least thirty (30) days written notice of any change in the standard lead
time. Seller acknowledges that Buyer will from time to time require deliveries
giving less than Seller's standard lead time ("Emergency Deliveries"). Seller
will use commercially reasonable efforts to accommodate Buyer's requests for
Emergency Deliveries, it being understood and agreed that, effective April 1,
2005: (i) a change in delivery date requested within ten (10) days prior to the
originally scheduled delivery date will result in a $.01/lb. charge for each
pound of Product affected by such request; (ii) a change in delivery date
requested within five (5) days prior to the originally scheduled delivery date
will result in a $.02/lb. charge for each pound of Product affected by such
request; and (iii) reprocessing of Product by Seller necessitated by Buyer's
request for an Emergency Delivery will result in a $.085/lb. charge for each
pound of Product affected by such request. In connection with the foregoing, the
prices for all Products shall be reduced by $.005/lb., effective April 1, 2005.
As pertaining to this Section 4.2, a change will be defined as a modification in
the delivery date of Product. Modifications in delivery location up to the time
that the Product shipment leaves the Seller's facility will not be considered a
change. The Buyer will be responsible for any additional transportation charges
for modification in delivery location after the Product shipment leaves the
Seller's facility.
4.3 Order of Precedence. This Agreement shall govern all terms and
conditions of the transactions set forth herein; in the event of a conflict
between the terms of this Agreement and any of the terms of any release of Buyer
or any acknowledgment by Seller of the release, the terms of this Agreement
shall control. Any preprinted terms and conditions on any other document
delivered between the parties, including without limitation any invoice,
release, acknowledgment, xxxx of materials, loading ticket or other document to
which the other party has not consented, shall be deemed superseded and deleted
and shall not constitute an addendum to or an amendment of this Agreement.
5. DELIVERY OBLIGATIONS
In no event shall Seller be required to deliver in any month more than fifty
(50%) percent of Buyer's Estimated Requirements for the calendar quarter
affected thereby. With each delivery Seller shall deliver a
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certificate of last contained and a Certificate of Analysis ("COA") covering the
Product being delivered, said certificate to be in the form or substantially in
the form of Exhibit C hereto.
6. INITIAL PRICE; ADJUSTMENTS TO PRICE; FAVORED NATIONS; BUYER'S AUDIT;
SELLER'S AUDIT
6.1 Initial Price. The initial purchase prices for Products are set
forth on Exhibit D hereto which is incorporated herein by this reference. Except
as provided in Exhibit D all prices shall be F.O.B. destination, freight prepaid
and included.
6.2 Adjustments to Price. As soon as practicable after the first day of
each calendar quarter during the term hereof, Seller shall determine its (a)
average standard costs of delivered raw materials purchased and used to produce
one (1) pound of each type of the Products ("Raw Material Cost") during the
preceding calendar quarter; and (b) Seller's then current cost to deliver full
truckloads of Product hereunder. Seller shall adjust the price of the Products
on the 15th day of the first month following each calendar quarter during the
term of this Agreement if, and to the extent, that (i) Seller's Raw Material
Cost for the immediately preceding calendar quarter has changed from Seller's
Raw Material Cost during the calendar quarter prior thereto; and (ii) Seller's
then current cost to deliver full truckloads of Product hereunder has changed
from the immediately preceding calendar quarter. Should Buyer desire to purchase
Product in less than full truckload quantities, transportation costs will be
adjusted to reflect the cost to deliver a partial load. The cost of the
ancillary services will be billed by the delivery provider to, and paid by,
Buyer. Changes in price shall be rounded to the nearest $0.001 per pound of
Product. All Products shipped after the date of a price change will be billed at
the new or changed price ("Adjusted Price"). In the case of a price change,
adjustments will not be allowed on Products in transit or in Buyer's inventory.
The failure of Seller to notify Buyer of an Adjusted Price shall not be deemed a
waiver of Seller's right to adjust the price effective the 15th day of the
calendar quarter affected thereby if Seller notifies Buyer of such Adjusted
Price within thirty (30) days after the effective date thereof. Notwithstanding
the foregoing, Seller shall use commercially reasonable efforts to control its
Raw Materials Costs in order to minimize any price increases required by this
Section 6.2.
6.3 Favored Nations. Seller agrees that, if it should at any time
during the term of this Agreement, sell product which is essentially equivalent
to Product with comparable delivery requirements to any other North American
manufacturer of cured in place pipe, Seller will reduce the price of Product
sold to Buyer from and after such sale to such other manufacturer to the same
price that is offered to such other manufacturer. For the purposes of the
calculations contemplated by this Section 6.3, charges to Buyer pursuant to
Section 4.2 above shall be disregarded. To effect an adjustment with respect to
sales of Product already paid for by Buyer, Seller shall, at Buyer's option,
either pay to Buyer a refund or offset such refund amount against the next
invoice issued by Seller to Buyer.
6.4 Buyer's Audit. Within sixty (60) days after notice by Seller of an
adjustment to price, Buyer may request an audit for the purpose of verifying the
Adjusted Price. In addition, not more often than once in any twelve (12) month
period, Buyer may also request an audit of prices charged by Seller to other
North American manufacturers of cured in place pipe to verify Seller's
compliance to Section 6.3 above. The parties shall designate an independent
auditor to complete each such audit, the cost of which shall be borne by Buyer,
subject to the other provisions of this Section 6.4. Seller shall give the
auditor access to the books and records of Seller necessary to make a
determination of the accuracy of the adjustments or prices charged other
customers of Seller. The auditor shall not divulge to any person, firm or
corporation Seller's cost of raw materials used to make Product, but merely
shall certify the accuracy of an adjustment, nor shall the
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auditor disclose the name of any party in connection with an audit performed to
verify Seller's compliance with Section 6.3 above. The decision of the auditor
shall be final and binding on the parties. Seller shall debit or credit the
account of Buyer in accordance with the decision. If a credit to Buyer's account
should be greater than Twenty-five Thousand Dollars ($25,000) in any calendar
quarter, the cost of the audit shall be borne by Seller. If Buyer does not elect
to have an audit performed with respect to the Adjusted Price or the prices
charged to other customers of Seller during any Contract Year, Buyer shall
retain the right for a period of twelve (12) months after the end of any such
Contract Year to have such an audit performed hereunder for that Contract Year.
6.5 Seller's Audit. Not more often than once in any twelve (12) month
period, Seller may request an audit of Buyer's total aggregate volume purchases
of Product, including Third Party Designees, as specified in Section 2.2 for any
Contract Year within sixty (60) days of completion of Contract Year. The parties
shall designate an independent auditor to complete each such audit, the cost of
which shall be borne by Seller. Buyer shall give the auditor access to the books
and records of Buyer necessary to make a determination of the accuracy of the
total volume of Product purchased from all resin suppliers. The auditor shall
not divulge to any person, firm or corporation Buyer's total resin purchases of
Product, but merely shall certify the accuracy of total aggregate volume, nor
shall the auditor disclose the name of any party in connection with an audit
performed to verify Buyer's compliance with Section 2.2 above. The decision of
the auditor shall be final and binding on the parties.
7. TAXES, EXCISES AND OTHER CHARGES
Unless otherwise provided by law, in addition to the price, upon receipt of
Seller's invoice and subject to Section 6.4 above, Buyer shall pay to Seller any
and all taxes, excise or other charges (other than taxes related to Seller's
employees or their compensation and taxes on or measured by Seller's income)
Seller may be required to pay to or collect for any government, whether local,
state, or federal, and which are based upon or measured by the production, sale,
transportation, delivery or use of the Product sold and delivered under such
invoice, provided that such taxes are specified by Seller on such invoice.
8. TERMS OF PAYMENT; PROMPT INVOICING
8.1. Terms of Payment. Seller shall invoice Buyer for each delivery of
Product hereunder. Payment is due forty-five (45) days from the date of Seller's
invoice; Seller's invoice shall not be dated earlier than the date of shipment
of the Product to which such invoice relates. Should Buyer's financial
responsibility become unsatisfactory to Seller based on Seller's reasonable
commercial judgment, cash payments or satisfactory security may be required by
Seller for prior and future deliveries and for goods theretofore delivered with
a 10 day written notice; provided, however, that Buyer's good faith disagreement
with an invoice shall not entitle Seller to request such cash payments or
security. No forbearance, course of dealing, or prior payment shall affect this
right of Seller.
8.2. Prompt Invoicing. Seller must not (a) invoice Buyer more than one
hundred twenty (120) days after Seller is permitted to issue an invoice under
this Agreement ("Late Invoices") or (b) initially raise a claim for payment of a
previously issued invoice more than three hundred sixty five (365) days after
the invoice date ("Late Claims"). Buyer is not obligated to pay Late Invoices or
Late Claims and Seller waives all rights and remedies related to Late Invoices
and Late Claims. Invoices involving Third Party Designees will not be subject to
the Late Invoices provision in this Section 8.2.
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9. TITLE AND RISK OF LOSS
Title to, and risk of loss of, Product delivered hereunder shall pass at
delivery to the site designated by Buyer if Product is not rejected by Buyer.
10. LIMITED WARRANTY
Seller warrants only that (i) Product manufactured exclusively from raw
materials purchased by Seller, when delivered to Buyer, conforms to the Product
Specifications at the time of delivery; (ii) the COA and SPCA for each delivery
of Product hereunder accurately reflect the composition of the Product being
delivered; and (iii) the Product is free and clear of liens and encumbrances,
and is not subject to rightful patent infringement claims by any third party as
to the Product itself.
NO OTHER WARRANTY, WHETHER EXPRESS OR ARISING BY OPERATION OF LAW, OR FROM ANY
COURSE OF DEALING OR TRADE USE, OR OTHERWISE IMPLIED, INCLUDING THE WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND CORRESPONDENCE WITH
DESCRIPTION (OTHER THAN PRODUCT SPECIFICATIONS) WILL EXIST IN CONNECTION WITH
THE SALE BY SELLER OR USE BY BUYER OF PRODUCT.
11. EXCLUSIVE REMEDY; LIMITATION OF LIABILITY
11.1 Exclusive Remedy for Breach of Warranty. If Seller breaches any
warranty set forth in clause (i) or clause (ii) of Section 10, Buyer's sole and
exclusive remedy for such breach shall be the replacement of the affected
Product and delivery of conforming Product, at Seller's sole expense.
11.2 Limitation of Liability.
(a) Except as expressly provided in this Agreement, in no
event shall either party be liable under contract, tort (including, but not
limited to, negligence), indemnity, product liability, strict liability or
otherwise, to the other party for incidental, consequential, indirect or special
damages of any kind or for lost profits arising out of or relating to this
Agreement or the breach thereof, whether or not the party was advised of the
possibility of such damage. The limitations set forth in this Section 11.2(a)
shall not apply to damages arising from: (v) a claim for which Seller is
obligated to indemnify Buyer under Section 12; (w) a breach of Section 17,
relating to confidentiality; (x) death or personal injury caused by negligence;
(y) a party's suspension of performance of its obligations under this Agreement
except in the manner expressly permitted by this Agreement; or (z) a party's
purported termination of this Agreement except in the manner expressly permitted
by this Agreement.
(b) The disclaimer and limitations of liability for damages
set forth in this Section 11.2 will not be affected if any remedy provided
hereunder shall fail of its essential purpose.
(c) No statement or recommendation made or assistance given by
either party, or its representatives, either oral or in its literature, to the
other party, or its representatives, in connection with any Product sold
hereunder shall constitute a waiver by either party of any provision hereof or
affect such party's liability as herein defined.
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12. PATENTS AND TRADEMARKS/SELLER'S INDEMNIFICATION OF BUYER
Anything in Section 10 or 11 hereof to the contrary notwithstanding, Seller
shall indemnify, defend and save Buyer, its agents, officers, directors,
employees, contractors, representatives and insurers harmless from and against
any liability (whether strict or otherwise), damages, losses, costs and expenses
(including double and treble damages for infringement or misappropriation,
attorneys fees and other costs of suit) for claims, actions, demands, suits or
judgments based upon an allegation that the Product, as delivered, infringes any
patents, trademarks or other third-party intellectual property rights. This
indemnification does not extend to (a) any Product manufactured by Seller in
accordance with Buyer's instructions; or (b) any use by Buyer of the Product
other than in its original form subsequent to delivery.
As soon as practicable after receipt, Buyer shall forward any such claim,
action, demand or suit to Seller and permit Seller to defend the claim, action,
demand or suit. Buyer shall provide reasonable assistance to Seller in the
defense of the claim, action, demand or suit.
In no event shall Seller use, on containers or tanks containing Product or in
any advertising or promotional material or catalogue of Seller any logo,
trademark or name of Buyer without Buyer's written consent.
These indemnity obligations of Seller shall survive the termination of this
Agreement.
13. EXCUSED PERFORMANCE
Neither party shall be liable for delay or failure to perform in whole or in
part, by reason of contingencies beyond the reasonable control of the party
affected, whether herein specifically enumerated or not. These contingencies
include, among others, act of God, act of war, revolution, riot, acts of public
enemies, fire, explosion, breakdown of plant or equipment, lack of capacity to
manufacture Product, strike, lockout, labor dispute, casualty or accident,
earthquake, flood, cyclone, tornado, hurricane or other windstorm, contingencies
interfering with the production, or availability, customary or usual means of
transportation of the Product, or of any raw materials of which the Product is a
product or which may be used in its manufacture, or by reason of any law, order,
proclamation, regulation, ordinance, demand, requisition or requirement or any
other act of any governmental authority, local, state or federal, or any other
cause whatsoever, whether similar or dissimilar to those enumerated. However,
the party so affected shall promptly give notice to the other party whenever
such contingency or other act becomes reasonably foreseeable, and shall use its
best efforts to overcome the effects of the contingency as promptly as possible,
and shall promptly give written notice to the other party of the cessation of
such contingency. Neither party, however, shall be required to resolve a strike,
lockout or other labor problem in a manner which it alone does not deem proper
and advisable.
If Seller, by reason of a contingency referred to above, is unable to supply
Products the same as or similar to the Products to all of its customers,
including Buyer, and the quantities contracted for, Seller shall, during the
continuance of such contingency, allocate its capacity to produce and/or deliver
the Products first to buyers, including Buyer and Third Party Designees, having
contracts for the delivery of resin products on a ratable basis, and its
remaining capacity to produce and/or deliver resin products to its other
customers as Seller shall determine. Deliveries omitted due to any excused
contingency affecting Seller or Buyer shall, without liability, reduce by an
equivalent quantity the Buyer's purchase requirements for such Product for the
Contract Year(s) in which such contingency occurred.
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14. PRODUCT HAZARDS/SAFETY AND HEALTH COMMUNICATIONS
Buyer acknowledges that it is familiar with the Products and has independent
knowledge of the risks associated with handling, shipping, using and disposing
of Products including, without limitation, those set forth in Seller's Material
Safety Data Sheets provided to Buyer. Buyer shall comply with all safety and
health related governmental requirements concerning the Products and shall take
all reasonable and practicable steps to inform, warn and familiarize its
employees, agents, contractors and customers with all hazards associated with
the Products, including the handling, shipment, storage, use and disposal
thereof.
15. BUYER'S INDEMNIFICATION OF SELLER
Buyer shall indemnify, defend and hold harmless Seller, its agents, officers,
directors, employees, contractors, representatives and insurers from and against
any liability (whether strict or otherwise), damages, losses, costs and expenses
(including attorneys fees and other costs of suit) for claims, actions, demands,
suits or judgments on account of damage to property, or injury, disease or death
of persons arising out of or in any way associated with Buyer's loading,
unloading, storage, handling, or use of the Products (except to the extent
caused by Seller's negligence) the use by any person (including but not limited
to Buyer's customers) of product, manufactured in whole or in part, with any
Product sold hereunder; any failure by Buyer to disseminate safety and health
information as provided in Section 14 of this Agreement; and any use, release or
disposal of Product, or any substance or wastes containing Product, after
delivery to Buyer.
As soon as practicable after receipt, Seller shall forward any such claim,
action, demand or suit to Buyer and permit Buyer to defend the claim, action,
demand or suit. Seller shall provide reasonable assistance to Buyer in the
defense of the claim, action, demand or suit.
These indemnity obligations of Buyer shall survive the termination of this
Agreement.
16. INSURANCE
(a) During the term of this Agreement, each party shall maintain:
(i) Workers' compensation insurance required by
applicable laws and regulations for all of its employees;
(ii) Automobile liability insurance against claims
for bodily injury, death and property damage, with limits as
to bodily injury or death of not less than One Million Dollars
($1,000,000) per person and not less than One Million Dollars
($1,000,000) for all bodily injuries or deaths per accident,
and with limits as to property damage of not less than One
Million Dollars ($1,000,000);
(iii) Comprehensive or commercial (occurrence)
general liability insurance (including coverage for
contractual liability and products/completed operations)
against claims for bodily injury, death and property damage,
with limits as to bodily injury or death of not less than One
Million Dollars ($1,000,000) each occurrence and One Million
Dollars ($1,000,000) general aggregate; and
(iv) Umbrella excess liability insurance in an amount
not less than One Million Dollars ($1,000,000) per occurrence
in excess of (i), (ii) and (iii) above.
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(b) All insurance policies described in Section 16(a) above shall (i)
provide that no cancellation or change shall be effected without giving the
other party at least thirty (30) days' prior written notice; and (ii) be valid
and enforceable policies issued by insurers of recognized responsibility with an
A. M. Best rating of "A-" or better. From time to time, upon request, each party
shall deliver or cause to be delivered to the other certificates of such
insurance as evidence of specified insurance coverage.
(c) All insurance policies of Seller described in Section 16(a) above
shall also provide for a waiver of subrogation against Buyer and its employees
and agents, shall name Buyer and its employees and agents as additional parties
insured thereunder and shall be primary and noncontributory to any other
insurance available to Buyer and its employees and agents.
17. CONFIDENTIALITY
(a) For purposes of this Agreement, the term "Confidential Material"
shall be defined to mean all information furnished by a party hereto, or any of
its agents (collectively, a "Disclosing Party"), to the other party hereto, or
any of its agents (collectively, a "Receiving Party"), whether before or after
the Effective Date; provided, however, that the term "Confidential Material"
shall not include information which (i) becomes generally available to the
public other than as a result of a disclosure to the Receiving Party; (ii) was
known to the Receiving Party as evidenced by its records prior to receipt from
the Disclosing Party; (iii) can be shown to have been developed by the Receiving
Party independently of disclosure by the Disclosing Party; (iv) was available on
a non-confidential basis prior to its disclosure from a source other than the
Disclosing Party; or (v) becomes available on a non-confidential basis from a
source other than from the Disclosing Party, provided that such source is not
bound by a confidentiality agreement with or other obligation of confidentiality
to the Disclosing Party. Such information may include, but not be limited to,
reports, plans, documents, drawings, machines, writings, samples, models,
processes, materials and know-how. If samples are exchanged, they will be used
only for the purpose of evaluation and the Receiving Party will not reverse
engineer or analyze the samples for composition without the prior written
permission of the Disclosing Party. Without limiting the generality of the
foregoing, Buyer's Confidential Material shall be deemed to include all Product
Specifications.
(b) The Receiving Party shall, and shall instruct all of its agents,
for the period beginning on the Effective Date of this Agreement, during the
term of this Agreement, and for five (5) years after the termination of this
Agreement, treat all Confidential Material confidentially and not disclose it
except in accordance herewith; provided, however, that (x) any Confidential
Material may be disclosed to the Receiving Party's agents who (1) need to have
access to such information in order to perform the Receiving Party's obligations
under this Agreement and (2) are directed to treat such Confidential Material
confidentially, and (y) any disclosure of Confidential Material may be made with
the prior written consent of the Disclosing Party. Notwithstanding the foregoing
or any other provision contained herein, the Receiving Party may not in any
manner use any Confidential Material except for such uses as may be specifically
agreed upon by the Disclosing Party.
(c) The parties agree that neither shall disclose to any person the
terms of this Agreement, except (i) to the extent required to obtain enforcement
of the terms of this Agreement, or (ii) to the extent that in the opinion of
counsel disclosure is required to be made under federal, state or foreign law,
in which event such disclosure can be made to the extent in the opinion of such
counsel it is required by law; provided, however, that in the event that either
party proposes to make any disclosure based upon the opinion of its counsel as
aforesaid, that party shall advise and consult with the other party prior to
such disclosure concerning the information proposed to be disclosed. Seller
hereby consents to the disclosure by Buyer of
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this Agreement and the terms thereof (other than the Exhibits to this Agreement)
in its reports filed with the U.S. Securities and Exchange Commission.
(d) In the event that the Receiving Party is required (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Confidential
Material, the Receiving Party shall provide the Disclosing Party with prompt
notice thereof so that the Disclosing Party may seek an appropriate protective
order or authorize the Receiving Party to disclose the Confidential Material
sought; provided, however, that if in the absence of a protective order or the
receipt of authorization hereunder, the Receiving Party is, in the opinion of
its counsel, compelled so to disclose Confidential Material not otherwise
disclosable hereunder to any legislative, judicial or regulatory body, agency or
authority, or else be exposed to liability for contempt, fine or penalty, or the
other censure, such Confidential Material may be so disclosed.
(e) The parties agree that, upon the request of the Disclosing Party,
the Receiving Party shall promptly return to the Disclosing Party all
Confidential Material furnished hereunder without retaining a copy or sample
thereof, unless, in the opinion of counsel for the Receiving Party, either
returning such Confidential Material or failing to retain a copy or sample
thereof would violate any applicable federal, state, local or foreign law, in
which event such Confidential Material shall be returned, without retaining any
copies or samples thereof, as soon as practicable after such counsel advises
that the same may be lawfully done.
(f) In view of the irreparable harm and damage which would be incurred
by the Disclosing Party in the event of any violation by the Receiving Party of
any of the provisions hereof, the Receiving Party hereby consents and agrees
that if there is a violation of any such provision, the Disclosing Party shall
be entitled to an injunction or similar equitable relief to be issued by any
court of competent jurisdiction restraining from committing or continuing any
such violation.
(g) No license under any patent now or hereafter obtained is granted,
agreed to be granted or implied by this Agreement or the disclosure of the
Confidential Material.
18. COMPLIANCE WITH APPLICABLE LAWS
Seller shall comply with the provisions of applicable federal law, and valid
regulations and orders thereunder, to the extent required thereby. Any such
provisions which are required to be included herein shall be deemed incorporated
herein by reference. Seller agrees to advise Buyer of any specific laws,
regulations or orders which apply to the storage, use or transport of the
Product of which Seller is aware or any changes in any of the foregoing of which
Seller becomes aware.
19. AUTHORIZATION
Each party represents and warrants to, and covenants with, the other party that:
(a) such party is duly authorized to enter into this Agreement and to
perform its obligations hereunder and possesses all licenses, permits, consents
and approvals required from any third party or governmental authority in order
to perform its obligations hereunder;
(b) such party is not bound by any other agreement which shall
interfere with such party's full compliance with this Agreement; and
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(c) such party shall not enter into any agreement, whether written or
oral, in conflict with the provisions of this Agreement.
20. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the state of Illinois, U.S.A., as applied to contracts executed in and performed
wholly within said state.
21. NON-WAIVER
A waiver by either party of any breach or failure to enforce any term or
condition of this Agreement shall not in any way affect, limit or waive such
party's right at any time to enforce strict compliance with that or any other
term or condition of this Agreement.
22. ENTIRE AGREEMENT
This Agreement sets forth the entire understanding of the parties with respect
to the subject matter of this Agreement and supersedes all prior agreements,
understandings, negotiations, and dealings between the parties hereto with
respect to this subject matter, including, but not limited to, the Resin
Purchase Agreement dated September 11, 1997 between the parties and any
guaranties made by Buyer of any obligations of any Third Party Designees, which
guaranties hereby are terminated. No agreement or understanding, oral or
written, in any way purporting to modify the terms hereof shall be binding on
either party hereto unless contained in a written document expressly described
as an amendment to or extension of this Agreement and duly executed by both
parties. No course of prior dealings shall contradict, supplement or explain any
provision of this Agreement.
23. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and shall inure to the benefit of both
parties and their respective successors and assigns. Neither party shall assign
this Agreement without the written consent of the other; provided, however, that
each party may assign this Agreement, without the consent of the other party, to
one of the assigning party's affiliates or to the assigning party's successor in
interest by merger, reorganization or amalgamation, or for collateral purposes
to a lender, financing source or indenture trustee in connection with any
financing arrangements entered into by the assigning party.
24. NOTICES
Any notice, request, demand or other communication given under this Agreement
shall be in writing and shall be deemed sufficiently given:
1. Upon the date received by the intended recipient if delivered
by hand, internationally recognized courier or facsimile
provided that if delivered by hand or by facsimile (provided
that the sender's facsimile machine indicates confirmation of
receipt) that a copy is confirmed by deposit in the general
mail, first class postage prepaid; or
2. If the sender so elects, fifteen (15) days after the date
deposited in the general mails, certified with return receipt
requested, postage prepaid, addressed to the intended
recipient, as follows:
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- To Seller: AOC, LLC
000 Xxxxxxx 00, Xxxx
Xxxxxxxxxxxx, Xxxxxxxxx 00000
Attention: V.P. Marketing & Sales
Seller's Facsimile: 000-000-0000
- To Buyer: Insituform Technologies, Inc.
000 Xxxxxx 00 Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: President
Buyer's Facsimile: 000-000-0000
and
Insituform Technologies, Inc.
000 Xxxxxx 00 Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Buyer's Facsimile: 000-000-0000
- To such other address or addresses as either party may
hereinafter designate in writing.
25. CAPTIONS
The section headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
26. SEVERABILITY
If any provision in this Agreement is determined by any court having
jurisdiction over the parties to be unenforceable, the provision shall be
amended to become enforceable or, at the election of the parties, severed from
this Agreement, and this Agreement shall otherwise remain in full force and
effect for the remaining term.
27. DEFAULT; REMEDIES FOR DEFAULT; ADDITIONAL TERMINATION RIGHTS.
27.1 Default. A party shall be deemed to have breached this Agreement
and thereby be in "Default" under this Agreement only if:
(a) the party fails to pay any amount due under this Agreement
and fails to cure such breach within ten (10) days after the date of notice of
such failure by the non-breaching party (a "Monetary Default"); or
(b) if the party commits and continues to commit a substantial
breach of a material provision of this Agreement (other than a Monetary Default)
and fails to cure such breach within thirty (30) days after the date of notice
of such breach by the non-breaching party; provided, however, that: (1) such
notice sets forth with reasonable specificity the nature of the breach at issue;
(2) the other party is not a significant contributing cause of such breach or
impediment to its remediation; and (3) such breach by its
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nature may be cured within thirty (30) days or if not the Parties shall
negotiate in good faith to determine a reasonable alternate breach cure period.
27.2 Remedies for Default.
(a) If a party is in Default, the other party may seek such damages at
law as it may be entitled; provided, however, that (i) the non-breaching party
shall not suspend performance of its obligations under this Agreement by reason
of such Default except pursuant to the procedure set forth in Section 27.2(b),
and (ii) the non-breaching party shall not terminate this Agreement by reason of
such Default except pursuant to the procedure set forth in Section 27.2(c).
(b) If a party is in Default, the non-breaching party shall have the
right to suspend performance of its obligations under this Agreement only
pursuant to one of the following two procedures:
(i) The non-breaching party gives written notice of its intent
to suspend performance to the party in Default; and either: (A) the party in
Default fails to deliver written notice to the non-breaching party contesting
the non-breaching party's assertion that such party is in Default within ten
(10) days after receipt of the non-breaching party's notice, or (B) the party in
Default delivers written notice to the non-breaching party contesting the
non-breaching party's assertion that such party is in Default, such dispute is
then referred to arbitration pursuant to Section 28, and the arbitrator finds
that the party alleged to be in Default was in Default; or
(ii) The Default arises from an alleged failure by Buyer to
pay Seller for Product as required by this Agreement (a "Payment Default"),
Seller gives written notice of its intent to suspend performance to Buyer and
within ten (10) days after Buyer receives Seller's notice, Buyer fails to (A)
deliver written notice to Seller contesting Seller's assertion that Buyer is in
Default and specifying the portion of the Payment Default it is contesting and
with reasonable specificity the reasons therefore, (B) deposit into an escrow
account at a financial institution reasonably satisfactory to both Parties cash
in an amount equal to the portion of the Payment Default that is in dispute, (C)
pay to Seller that portion of the Payment Default that is not in dispute, and
(D) pay to Seller any other amounts owed to Seller for Product that are past due
and are not in dispute. If Buyer complies with clauses (A), (B), (C), and (D),
such dispute then shall be referred to arbitration pursuant to Section 28, and
Seller shall not be entitled to suspend performance unless the arbitrator finds
that Buyer was in Default. During the pendency of such arbitration proceeding,
Buyer shall pay Seller for Product in accordance with the terms of this
Agreement.
(c) If a party is in Default, the non-breaching party shall have the
right to terminate this Agreement only pursuant to one of the following two
procedures:
(i) The non-breaching party gives written notice of its intent
to terminate this Agreement to the party in Default and either: (A) the party in
Default fails to deliver written notice to the non-breaching party contesting
the non-breaching party's assertion that such party is in Default within ten
(10) days after receipt of the non-breaching party's notice, or (B) the party in
Default delivers written notice to the non-breaching party contesting the
non-breaching party's assertion that such party is in Default, such dispute is
then referred to arbitration pursuant to Section 28, and the arbitrator finds
that the party alleged to be in Default was in Default: or
(ii). The Default is a Payment Default, Seller gives written
notice of its intent to terminate this Agreement to Buyer and within ten (10)
days after Buyer receives Seller's notice, Buyer fails to (A) deliver written
notice to Seller contesting Seller's assertion that Buyer is in Default and
specifying the
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portion of the Payment Default it is contesting and with reasonable specificity
the reasons therefore, (B) deposit into an escrow account at a financial
institution reasonably satisfactory to both Parties cash in an amount equal to
the portion of the Payment Default that is in dispute, (C) pay to Seller that
portion of the Payment Default that is not in dispute, and (D) pay to Seller any
other amounts owed to Seller for Product that are past due and are not in
dispute. If Buyer complies with clauses (A), (B), (C), and (D), such dispute
then shall be referred to arbitration pursuant to Section 28, and Seller shall
not be entitled to terminate this Agreement unless the arbitrator finds that
Buyer was in Default. During the pendency of such arbitration proceeding, Buyer
shall pay Seller for Product in accordance with the terms of this Agreement.
27.3 Additional Termination Rights. This Agreement also may be terminated as
follows:
(a) by either party upon written notice to the other party upon (i) the
dissolution or insolvency of the other party, (ii) the filing by such other
party of a petition for bankruptcy and/or the appointment of a trustee or
receiver in bankruptcy for such other party; and/or (iii) the filing by a third
party for the petition for bankruptcy of such other party, which petition is not
withdrawn or dismissed within ninety (90) days after it is made; or
(b) by Buyer upon written notice to Seller if a Change Event occurs
with respect to Seller. "Change Event" means the acquisition after the date of
this Agreement by any Person or any affiliate of any Person (in any transaction
or series of related transactions) of (A) record or beneficial ownership of more
than fifty percent (50%) of any class of capital stock or equity interests of
Seller or of voting control of Seller; (B) the power to elect, appoint or cause
the election or appointment of a majority of the members of the board of
directors or other governing body of Seller; and/or (C) all or substantially all
of the assets of Seller. For purposes hereof, "Person" means any individual,
sole proprietorship, partnership, joint venture, limited liability company,
trust, unincorporated organization, association, corporation, institution, or
entity that directly or indirectly through one or more affiliates competes with
Buyer or an affiliate of Buyer in the business of trenchless pipe
rehabilitation, repair, maintenance and installation for municipal sewers, water
mains and commercial pipes.
28. ARBITRATION
Any dispute or controversy between the parties arising out of or relating to
this Agreement, including without limitation, a dispute or controversy relating
to the construction of any provision or the validity or enforceability of any
term or condition (including this paragraph) or of the entire Agreement, or any
claim that all or any part of this Agreement (including this provision) is void
or voidable, shall be submitted to arbitration before a single arbitrator in
accordance with the Commercial Rules of Arbitration of the American Arbitration
Association then in effect. The arbitration shall be held in Chicago, Illinois.
Each party shall bear its own costs in any such proceeding. The decision of the
arbitrator shall be final and binding upon the parties and may be enforced in
any court of competent jurisdiction. To the fullest extent permitted by law, the
parties irrevocably submit to the jurisdiction of such forum and waive any
objection it may have to either the jurisdiction or venue of such forum.
Notwithstanding the parties' agreement to finally resolve all disputes by
arbitration, nothing herein shall be construed to waive or restrict either
party's right to invoke the jurisdiction of a court to seek temporary and/or
preliminary injunctive relief pending the conclusion of the arbitration
proceeding. The fact that the parties have agreed that final resolution of their
dispute shall be accomplished through arbitration shall not be cited by either
party as a defense to any request for such injunctive relief.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
INSITUFORM TECHNOLOGIES, INC. AOC, LLC
Signature: /s/ Xxxxxx X. Xxxxxx, Xx. Signature: /s/ Xxxx X. Xxxxxx
--------------------------- --------------------------
Printed Name: Xxxxxx Xxxxxx Printed Name: Xxxx X. Xxxxxx
----------------------- ----------------------
Title: President and CEO Title: Vice President
----------------------------- -----------------------------
Date: 3-30-05 Date: March 24, 2005
------------------------------- ------------------------------
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