IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

HEMPEL COATINGS (USA), INC., :

:

Plaintiff, :

:

v. : CIVIL ACTION NO.: __________

:

PRIME PLATE ENTERPRISES, INC. :

:

Defendant. :

PLAINTIFF’S COMPLAINT

Plaintiff, Hempel (USA), Inc. (“Hempel”), by and through its undersigned attorneys, files the

following Complaint against Defendant, Prime Plate Enterprises, Inc. (“Prime Plate”), and avers as

follows in support thereof:

PARTIES

1. Hempel is a Texas corporation with its principal place of business in Conroe, Texas.

2. PrimePlate is a Pennsylvania corporationwithitsprincipalplaceofbusinessinPhiladelphia,

Pennsylvania. Prime Plate is not registered to do business in Texas, does not maintain a place of business

in Texas, and has no designated agent for service ofprocessinTexas. Prime Plate engages in business in

Texas and this action arises out of business transacted inTexasto which it was a party. Prime Plate may

be served with process pursuant to Pennsylvania Rule of Civil Procedure 424 and Federal Rule of Civil

Procedure 4(h) byhand delivery of the Complaint and citation to Edward G. Gleason, President ofPrime

Plate. Edward G. Gleason may be served at Prime Plate’s business address, Prime Plate Enterprises, Inc.,

Philadelphia Naval Business Center, Quarters L-1121 Admiral Way, Philadelphia, PA 19112.

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JURISDICTION

3. This Court hassubject matterjurisdictionpursuant to 28 U.S.C. § 1332(a)(1) because the

parties are citizens of different states and the amount in controversy exceeds $75,000.00, exclusive of

interest and costs.

VENUE

4. Venue is proper in this district pursuant to 28 U.S.C. § 1391(a) because Prime Plate

resides within this district.

FACTS

5. Hempeland PrimePlate entered a contract titled“PreferredProviderAgreement,Strategic

Alliance Option & Strategic Alliance Agreement,” dated June 30, 2000, pursuant to which Prime Plate

would order specialized paint productsfromHempelduring the nextseveralyears, and Hempelwould sell

the products to Prime Plate on preferential pricing terms of $18.00 per gallon (“Purchase Agreement,”

attached as Exhibit A). Ex. A, ¶ 1.1(A), (B). 

6. The Purchase Agreement provides, “Payment terms shall be net thirty days.” Ex. A, ¶

1.1(D).

7. The Purchase Agreement provided for Prime Plate to support sales and marketing of

Hempel’s coatings and Hempel to support the sales and marketing ofPrime Plate’s coated steelplate. Ex.

A., ¶¶ 1.2-1.5. 

8. The centerpiece ofthePurchaseAgreement isinthe provisions to achieve the parties’ goals

to sell coatings and coated steelfor use in federal military ship building applications. Toward that end, the

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Purchase Agreement provided for Hempel to make a $250,000.00 payment to Prime Plate upon the

executionofthe agreement, whichPrime Plate would use to purchase equipment it needed to apply certain

Hempel coatings to steel. Ex. A, ¶ 1.7 and Attachment I–Use of Proceeds. 

9. The Purchase Agreement further provides that:

If upon the first anniversary date of the Preferred Provider Agreement,

Hempel has not received needed approvals from appropriate

governmental agencies for its shop primer products’ use in military ship

building applications, Hempel shall have the right to terminate this

agreement and receive a full refund of the $250,000.00 payment made

upon execution of this agreement (Section 1.7).

Ex. A, ¶ 1.8.

10. As of June 30, 2001, the first anniversary date of the Purchase Agreement, Hempel had

not received the needed governmental approvals. Neither Prime Plate nor Hempel has obtained the

government approvals to date.

11. Inthe summer of2001, Prime Plate requested a bridge loanof$100,000.00 fromHempel

and Hempel advanced the requested $100,000.00. The loan agreement was memorialized in a loan

memorandumdated August, 22, 2001, and signed byPrime Plate’s CEO Edward G. Gleason, onAugust

23, 2001. (“Loan Agreement”, attached as Exhibit B). The transfer was effected on or about August 24,

2001. See Ex. G, Bank Transfer Notice.

12. The Loan Agreement provided for “[r]epayment in full in 60 days from date of transfer.”

Ex. B.

13. By late 2002, Prime Plate had fallen seriously–more than $125,000.00–behind in paying

for product it had ordered and received, and had made no payment on the $100,000.00 loan.

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14. On November 12, 2002, representatives of Prime Plate, including its CEO, Edward G.

Gleason, met with representatives of Hempel, including its president, Pierre Y. Jullien, to negotiate a

workout of Prime Plate’s indebtedness. 

15. At the November 12, 2002, meeting, the parties reached an agreement that:

a. Hempel would eliminate an invoice for $20,700.00; 

b. the remaining outstanding overdue balance of $106,737.00 would be paid by

Prime Plate within a maximum of 18 months in monthly installments to begin

December 15, 2002, with a payment of $5,810;

c. if during 2003 Prime Plate had difficulty with one monthly payment it could be

postponed by one month maximum with Hempel’s written consent;

d. Prime Plate would repay the loan in one payment of $100,000.00 on December

31, 2002, and no later than January 30, 2003.

16. Hempelmemorialized these terms in minutes (“Workout Agreement”, attached as Exhibit

C). 

17. In a letter dated December 16, 2002, Prime Plate requested the December 15, 2002,

payment be postponed until January, 15, 2003, and the December 31, 2002, loan payoff be postponed

anadditionalmonth, untilFebruary28,2003. (“December 16, 2002 Prime Plate Letter Request”, attached

as Exhibit D).

18. By January 13, 2001, Hempel had received no payment and sent a demand letter.

(“Hempel Demand Letter”, attached as Exhibit E).

19. Hempel has received no payment on the loan, no payment on the open account for paint

products, and no refund of its initial $250,000 payment as of the date of this filing. 

20. Prime Plate owes Hempel $100,000.00 on the loan pursuant to the Loan Agreement.

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21. Prime Plate ordered paint products from Hempel, and Hempel delivered these products

to Prime Plate. Prime Plate owes Hempel $106,737.00 on its open account for these products. The

invoices underlying Prime Plate’s open account are attached as Exhibit F.

22. Prime Plate owes Hempel$250,000.00 pursuant to the Purchase Agreement–afullrefund

of the $250,000.00 payment made upon execution of the Purchase Agreement.

COUNT I

Common Law Sworn Account

23. Hempel incorporates by reference paragraphs 1 through 22 as if fully set forth herein.

24. The paint productseries oftransactions betweenHempeland Prime Plate are transactions

in which there were sales on one side and purchases on the other, whereby title to personal property

passed from one to the other, and the relation of debtor and creditor was thereby created by the general

course of dealing.

25. The charges onthe account were made by Hempel in accordance withanagreement with

Prime Plate and are the usual, customary, and reasonable prices for these products.

26. PrimePlate owes $106,737.00 onits account withHempel. See account invoicesattached

as Exhibit F.

27. Prime Plate has not paid the $106,737.00 it owes Hempel.

28. Because of Prime Plate’s failure to pay, Hempel has suffered damages of at least

$106,737.00.

29. Hempelis entitled to recover its attorneys’fees pursuant to Tex. Civ. Prac. & Rem. Code

§ 38.001.

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WHEREFORE, Hempel requests that this Honorable Court award the following:

a. Damages in excess of $106,737.00;

b. Pre- and post-judgment interest at the highest rate allowed by law;

c. Attorneys’ fees;

d. Costs of court; and 

e. Any other relief to which it may be entitled. 

COUNT II

Breach of Contract/Specific Performance: Purchase Agreement

30. Hempel incorporates by reference paragraphs 1 through 29 as if fully set forth herein.

31. The Purchase Agreement between Prime Plate and Hempel is a valid Contract, pursuant

to whichPrime Plate agreed to payHempel$18.00 per gallonfor paint products ordered and received by

it.

32. Prime Plate has breached the Purchase Agreement byfailingto pay$106,737.00 for paint

products it has ordered and received.

33. PrimePlatehasbreachedthePurchaseAgreement byfailingtoobtainneededgovernmental

approvals and, upon failure to do so, failing to refund Hempel’s $250,000.00 payment made upon

executionofthe Purchase Agreement. Alternatively, Hempel is entitled to specific performance of Prime

Plate’s obligation under the Purchase Agreement to refund the $250,000.00.

34. Because of Prime Plate’s breaches of the Purchase Agreement, Hempel has suffered

damages of at least $356,737.00.

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35. Hempelis entitled to recoveritsattorneys’fees pursuant to Tex. Civ. Prac. & Rem. Code

§ 38.001.

WHEREFORE, Hempel requests that this Honorable Court award the following:

a. Damages in excess of $356,737.00;

b. Pre- and post-judgment interest at the highest rate allowed by law;

c. Attorneys’ fees;

d. Costs of court; and 

e. Any other relief to which it may be entitled. 

COUNT III

Breach of Contract: Loan Agreement

35. Hempel incorporates by reference paragraphs 1 through 34 as if fully set forth herein.

36. The Loan Agreement between Hempel and Prime Plate is a valid contract between the

parties.

37. Prime Plate has breached the Loan Agreement by failing to repay to Hempel any part of

the $100,000.00 loaned to it by Hempel.

38. Because of Prime Plate’s breach of the Loan Agreement, Hempel has suffered damages

of at least $100,000.00.

39. Hempelisentitledto recover its attorneys’fees pursuant to Tex. Civ. Prac. & Rem. Code

§ 38.001.

WHEREFORE, Hempel requests that this Honorable Court award the following:

a. Damages in excess of $100,000.00;

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b. Pre- and post-judgment interest at the highest rate allowed by law;

c. Attorneys’ fees;

d. Costs of court; and 

e. Any other relief to which it may be entitled. 

COUNT IV

Breach of Contract: Workout Agreement

40. Hempel incorporates by reference paragraphs 1 through 39 as if fully set forth herein.

41. The Workout Agreement is a valid contract between the parties. 

42. Prime Plate has breached the Workout Agreement byfailingto repayto Hempel any part

of the $100,000.00 loaned to it by Hempel and by failing to pay to Hempel any part ofthe $106,737.00

owed on account.

43. Because of Prime Plate’s breach of the Workout Agreement, Hempel has suffered

damages of at least $206,737.00.

WHEREFORE, Hempel requests that this Honorable Court award the following:

a. Damages in excess of $206,737.00;

b. Pre- and post-judgment interest at the highest rate allowed by law;

c. Attorneys’ fees;

d. Costs of court; and 

e. Any other relief to which it may be entitled. 

KLETT ROONEY LIEBER & SCHORLING

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By______________________________________

Joseph D. Mancano, Esquire

Joseph B. Silverstein, Esquire

Two Logan Square, 12th Floor

Philadelphia, PA 19103-2756

(215) 567-7500

(215) 567-2737 (Fax)

Attorneys for Plaintiff, 

Hempel (USA), Inc.

Of Counsel:

Cynthia R. Levin Moulton

State Bar No. 12253450

Moulton & Meyer, L.L.P.

600 Travis Street, Suite 6700

Houston, TX 77002

Telephone: (713) 571-9191

Telecopier: (713) 571-9652

Dated: November 3, 2003

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