<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 1997
REGISTRATION NO. 333-30683
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PIONEER AMERICAS ACQUISITION CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<C> <C> <C>
DELAWARE 2812 06-1420850
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
PIONEER AMERICAS, INC. DELAWARE 76-0280373
PIONEER CHLOR ALKALI COMPANY, INC. DELAWARE 51-0302028
IMPERIAL WEST CHEMICAL CO. NEVADA 95-2375683
ALL-PURE CHEMICAL CO. CALIFORNIA 94-2314942
BLACK MOUNTAIN POWER COMPANY TEXAS 76-0291143
ALL-PURE CHEMICAL NORTHWEST, INC. WASHINGTON 94-2714064
PIONEER CHLOR ALKALI INTERNATIONAL, BARBADOS 98-0118164
INC. NEVADA 88-0336831
G.O.W. CORPORATION DELAWARE 51-0375981
PIONEER (EAST), INC. NEW MEXICO 86-0311265
T.C. HOLDINGS, INC. WASHINGTON 91-1536884
T.C. PRODUCTS, INC. (State or other jurisdiction of (I.R.S. Employer
(Exact name of registrants as incorporation or organization) Identification No.)
specified in their charters)
</TABLE>
---------------
4200 NATIONSBANK CENTER, 700 LOUISIANA STREET, HOUSTON, TEXAS 77002, (713)
225-3831
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
---------------
KENT R. STEPHENSON, ESQ.
PIONEER AMERICAS ACQUISITION CORP.
4200 NATIONSBANK CENTER
700 LOUISIANA STREET
HOUSTON, TEXAS 77002
(713) 225-3831
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
with a copy to:
CORNELIUS T. FINNEGAN III, ESQ.
WILLKIE FARR & GALLAGHER
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(212) 821-8000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
---------------
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
PAAC, which is a Delaware corporation, is empowered by the Delaware General
Corporation Law, subject to the procedures and limitations stated therein, to
indemnify any person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with any threatened, pending or completed action, suit or proceeding
in which such person is made a party by reason of his being or having been a
director, officer, employee or agent of PAAC. The statute provides that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors, or otherwise. The Certificate
of Incorporation and by-laws of PAAC provide for indemnification of the
directors and officers of such entities to the full extent permitted by the
Delaware General Corporation Law.
PAAC maintains an insurance policy providing for indemnification of its
officers, directors and certain other persons against liabilities and expenses
incurred by any of them in certain stated proceedings and under certain stated
conditions.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
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*2.1 -- Asset Purchase Agreement, dated as of May 14, 1997, by
and among OCC Tacoma, Inc. and Pioneer (incorporated by
reference to Exhibit 2 to the Company's Current Report on
Form 8-K, dated June 17, 1997).
*3.1 -- Certificate of Incorporation of PAAC (incorporated by
reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
*3.2 -- By-laws of PAAC (incorporated by reference to Exhibit 3.2
to the Company's Registration Statement on Form S-4 (File
No. 33-98828) declared effective by the Commission on
December 22, 1995).
*3.3 -- Certificate of Incorporation of PAI (incorporated by
reference to Exhibit 3.3 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
*3.4 -- By-laws of PAI (incorporated by reference to Exhibit 3.4
to the Company's Registration Statement on Form S-4 (File
No. 33-98828) declared effective by the Commission on
December 22, 1995).
*3.5 -- Certificate of Incorporation of PCAC (incorporated by
reference to Exhibit 3.5 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
*3.6 -- By-laws of PCAC (Incorporated by reference to Exhibit 3.6
to the Company's Registration Statement on Form S-4 (File
No. 33-98828) declared effective by the Commission on
December 22, 1995).
*3.7 -- Certificate of Incorporation of Imperial West
(incorporated by reference to Exhibit 3.7 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*3.8 -- By-laws of Imperial West (incorporated by reference to
Exhibit 3.8 to the Company's Registration Statement on
Form S-4 (File No. 33-98828) declared effective by the
Commission on December 22, 1995).
*3.9 -- Certificate of Incorporation of All-Pure (incorporated by
reference to Exhibit 3.9 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
</TABLE>
II-1
<PAGE> 3
<TABLE>
<CAPTION>
<C> <S>
*3.10 -- By-laws of All-Pure (incorporated by reference to Exhibit
3.10 to the Company's Registration Statement on Form S-4
(File No. 33-98828) declared effective by the Commission
on December 22, 1995).
*3.11 -- Certificate of Incorporation of Black Mountain Power
Company (incorporated by reference to Exhibit 3.11 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*3.12 -- By-laws of Black Mountain Power Company (incorporated by
reference to Exhibit 3.12 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
*3.13 -- Certificate of Incorporation of All-Pure Chemical
Northwest, Inc. (incorporated by reference to Exhibit
3.13 to the Company's Registration Statement on Form S-4
(File No. 33-98828) declared effective by the Commission
on December 22, 1995).
*3.14 -- By-laws of All-Pure Chemical Northwest, Inc.
(incorporated by reference to Exhibit 3.14 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*3.15 -- Certificate of Incorporation of Pioneer Chlor Alkali
International, Inc. (incorporated by reference to Exhibit
3.15 to the Company's Registration Statement on Form S-4
(File No. 33-98828) declared effective by the Commission
on December 22, 1995).
*3.16 -- By-laws of Pioneer Chlor Alkali International, Inc.
(incorporated by reference to Exhibit 3.16 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*3.17 -- Certificate of Incorporation of G.O.W. Corporation
(incorporated by reference to Exhibit 3.17 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*3.18 -- By-laws of G.O.W. Corporation (incorporated by reference
to Exhibit 3.18 to the Company's Registration Statement
on Form S-4 (File No. 33-98828) declared effective by the
Commission on December 22, 1995).
*3.19 -- Certificate of Incorporation of Pioneer (East), Inc.
*3.20 -- By-laws of Pioneer (East), Inc.
*3.21 -- Certificate of Incorporation of T.C. Holdings, Inc.
*3.22 -- By-laws of T.C. Holdings, Inc.
*3.23 -- Certificate of Incorporation of T.C. Products, Inc.
*3.22 -- By-laws of T.C. Products, Inc.
*4.1 -- Indenture, dated as of June 17, 1997, by and among PAAC,
the Subsidiary Guarantors defined therein and United
States Trust Company of New York, as Trustee, relating to
$200,000,000 principal amount of 9 1/4% Series A Senior
Notes due 2007, including form of Note and Guarantees.
*4.2(a) -- Deed of Trust, Assignment of Leases and Rents, Security
Agreement, Fixture Filing and Financing Statement by PCAC
(Tacoma, Washington).
*4.2(b) -- Mortgage, Assignment of Leases and Rents, Security
Agreement, Fixture Filing and Financing Statement by PCAC
(St. Gabriel, Louisiana).
*4.2(c) -- Deed of Trust, Assignment of Leases and Rents, Security
Agreement, Fixture Filing and Financing Statement by PCAC
(Henderson, Nevada).
*4.3(a) -- Term Loan Agreement, dated as of June 17, 1997, among
PAAC, Various Financial Institutions, as Lenders, DLJ
Capital Funding, Inc., as the Syndication Agent, Salomon
Brothers Holding Company Inc, as the Documentation Agent
and Bank of America Illinois, as the Administrative Agent
(the "Term Loan Agreement").
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
<C> <S>
*4.3(b) -- Subsidiary Guaranty, dated June 17, 1997, executed by
each of the Subsidiaries party thereto, as guarantor,
respectively, in favor of the Lenders, guaranteeing the
obligations of one another under the Term Loan Agreement.
*4.4 -- Security Agreement, dated as of June 17, 1997, among PCAC
and United States Trust Company of New York, as
Collateral Agent.
*4.5 -- Stock Pledge Agreement, dated as of June 17, 1997, among
PAI and United States Trust Company of New York, as
Collateral Agent.
*4.6(a) -- Loan and Security Agreement, dated as of June 17, 1997,
by and among PAAC, Bank of America Illinois, as Agent and
Lender and the other Lenders party thereto (the
"Revolving Loan Agreement").
*4.6(b) -- Master Corporate Guaranty, dated June 17, 1997, executed
by each of the Subsidiaries party thereto, as guarantor,
respectively, in favor of Bank of America Illinois, as
Agent, for the ratable benefit of the Lenders,
guaranteeing the obligations of one another under the
Revolving Loan Agreement.
*4.6(c) -- Master Security Agreement, dated June 17, 1997, executed
by each of the Subsidiaries party thereto, as debtor,
respectively, in favor of Bank of America Illinois, as
Agent, for the ratable benefit of the lenders.
*4.7 -- Intercreditor and Collateral Agency Agreement, dated as
of June 17, 1997 by and among United States Trust Company
of New York, as Trustee and Collateral Agent, Bank of
America Illinois, as Agent, PAAC, PAI and PCAC.
*4.8 -- Exchange and Registration Rights Agreement, dated as of
June 17, 1997, by and among PAAC, the Subsidiary
Guarantors and the Initial Purchasers.
5.1 -- Opinion of Willkie Farr & Gallagher.
5.2 -- Opinion of Kent R. Stephenson, Esq.
8.1 -- Opinion of Willkie Farr & Gallagher with respect to
certain tax matters.
*10.1 -- Contingent Payment Agreement, dated as of April 20, 1995,
by and among Pioneer (formerly, GEV corporation), PAAC
and the Sellers defined therein (incorporated by
reference to Exhibit 10.2 to the Current Report on Form
8-K of Pioneer, dated April 20, 1995).
*10.2 -- Tax Sharing Agreement, dated as of April 20, 1995, by and
among Pioneer, PAAC and the Subsidiary Guarantors defined
therein (incorporated by reference to Exhibit 10.3 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*10.3 -- Pioneer Companies, Inc. 1995 Stock Incentive Plan
(incorporated by reference to Exhibit 10.4 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*10.4 -- Pioneer Companies, Inc. Key Executive Stock Grant Plan
(incorporated by reference to Exhibit 10.2 to the
Quarterly Report on Form 10-Q of Pioneer for the
quarterly period ended June 30, 1996).
*10.5 -- Pioneer Chlor Alkali Company, Inc. Supplemental
Retirement Plan (incorporated by reference to Exhibit
10.5 to the Annual Report on Form 10-K of Pioneer for the
fiscal year ended December 31, 1995).
*10.6 -- Employment Agreement, dated as of April 20, 1995, between
Pioneer and Richard C. Kellogg, Jr. (incorporated by
reference to Exhibit 10.1 to the Quarterly Report on Form
10-Q of Pioneer for the quarterly period ended June 30,
1995).
</TABLE>
II-3
<PAGE> 5
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<C> <S>
*10.7 -- Employment Agreement, dated November 1, 1992, and First
Amendment to Employment Agreement, dated as of April 20,
1995, between Pioneer Chlor Alkali Company, Inc. and Paul
J. Kienholz (incorporated by reference to Exhibit 10.7 to
Pioneer's Annual Report on Form 10-K for the year ended
December 31, 1995).
*10.8 -- Employment Agreement, dated April 20, 1995, between
Pioneer Americas, Inc. and James E. Glattly (incorporated
by reference to Exhibit 10.8 to Pioneer's Annual Report
on Form 10-K for the year ended December 31, 1995).
*10.9 -- Employment Agreement, dated April 20, 1995, between
Pioneer Americas, Inc. and Verrill M. Norwood, Jr.
(incorporated by reference to Exhibit 10.9 to Pioneer's
Annual Report on Form 10-K for the year ended December
31, 1995).
*10.10 -- Executive Employment Agreement, dated January 4, 1997,
between Pioneer Companies, Inc. and Michael J. Ferris
(incorporated by reference to Exhibit 10.10 to the Annual
Report on Form 10-K of the Company for the fiscal year
ended December 31, 1996).
*10.11 -- Stock Purchase Agreement, dated January 4, 1997, between
Pioneer Companies, Inc. and Michael J. Ferris
(incorporated by reference to Exhibit 10.11 to the Annual
Report on Form 10-K of the Company for the fiscal year
ended December 31, 1996).
*10.12 -- Non-Qualified Stock Option Agreement, dated January 4,
1997, between Pioneer Companies, Inc. and Michael J.
Ferris (incorporated by reference to Exhibit 10.12 to the
Annual Report on Form 10-K of the Company for the fiscal
year ended December 31, 1996).
10.13 -- Chlorine and Caustic Soda Sales Agreement, dated as of
June 17, 1997, between Occidental Chemical Corporation
and PCAC.
10.14 -- Chlorine Purchase Agreement, dated as of June 17, 1997,
between OCC Tacoma, Inc. and PCAC.
+10.15 -- Environmental Operating Agreement, dated as of June 17,
1997, between OCC Tacoma and PCAC.
*12.1 -- Statement Regarding Computation of Ratio of Earnings to
Fixed Charges.
*16.1 -- Letter from Ernst & Young LLP regarding change in
independent accountants (incorporated by reference to
Exhibit 16.1 to the Company's Registration Statement on
Form S-4 (File No. 33-98828) declared effective by the
Commission on December 22, 1995).
*21.1 -- Subsidiaries of the Registrants.
*23.1 -- Independent Auditors' Consent of Deloitte & Touche LLP.
*23.2 -- Independent Auditors' Consent of Ernst & Young LLP.
*23.3 -- Independent Auditors' Consent of Piercy, Bowler, Taylor &
Kern.
*23.4 -- Independent Public Accountants' Consent of Arthur
Andersen LLP.
23.5 -- Consents of Willkie Farr & Gallagher (included in their
opinions filed as Exhibits 5.1 and 8.1).
23.6 -- Consent of Kent R. Stephenson, Esq. (included in his
opinion filed as Exhibit 5.2).
*24.1 -- Powers of Attorney (included in the signature pages
hereto).
*25.1 -- Statement on Form T-1 of Eligibility of Trustee.
*99.1 -- Form of Letter of Transmittal.
*99.2 -- Form of Notice of Guaranteed Delivery.
*99.3 -- Form of Letter to Clients.
*99.4 -- Form of Letter to Nominees.
</TABLE>
II-4
<PAGE> 6
- ---------------
* Previously filed.
+ Confidential treatment has been requested for portions of this agreement.
(b) Financial Statement Schedules:
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS.
All other schedules have been omitted because they are not applicable or
not required or the required information is included in the financial statements
or notes thereto.
ITEM 22. UNDERTAKINGS.
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of PAAC's annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Registrants
pursuant to the provisions, described under Item 20 above, or otherwise, the
Registrants have been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a director, officer or controlling
person of the Registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrants will, unless in
the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by them is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or 497(h) under
the Securities Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in this Registration Statement when it became effective.
II-5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
PIONEER AMERICAS ACQUISITION CORP.
By: /s/ PHILIP J. ABLOVE
----------------------------------
Name: Philip J. Ablove
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President, Chief Executive Officer July 24, 1997
- ----------------------------------------------------- and Director (principal executive
Michael J. Ferris officer)
/s/ PHILIP J. ABLOVE Vice President, Chief Financial July 24, 1997
- ----------------------------------------------------- Officer and Director (principal
Philip J. Ablove financial officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Director July 24, 1997
- -----------------------------------------------------
William R. Berkley
* Director July 24, 1997
- -----------------------------------------------------
Andrew M. Bursky
* Director July 24, 1997
- -----------------------------------------------------
Donald J. Donahue
* Director July 24, 1997
- -----------------------------------------------------
Richard C. Kellogg, Jr.
* Director July 24, 1997
- -----------------------------------------------------
Paul J. Kienholz
* Director July 24, 1997
- -----------------------------------------------------
Jack H. Nusbaum
* Director July 24, 1997
- -----------------------------------------------------
Thomas H. Schnitzius
*By: /s/ PHILIP J. ABLOVE
------------------------------------------------
Philip J. Ablove
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
PIONEER AMERICAS, INC.
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board and President July 24, 1997
- ----------------------------------------------------- (principal executive officer)
Michael J. Ferris
* Vice President, Chief Financial July 24, 1997
- ----------------------------------------------------- Officer, Treasurer and Director
Philip J. Ablove (principal financial officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Director July 24, 1997
- -----------------------------------------------------
William L. Mahone
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-7
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
PIONEER CHLOR ALKALI COMPANY, INC.
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Director (principal July 24, 1997
- ----------------------------------------------------- executive officer)
James E. Glattly
* Vice President and Chief Financial July 24, 1997
- ----------------------------------------------------- Officer and Director (principal
Philip J. Ablove financial officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Chairman of the Board July 24, 1997
- -----------------------------------------------------
Michael J. Ferris
* Director July 24, 1997
- -----------------------------------------------------
William L. Mahone
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-8
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
IMPERIAL WEST CHEMICAL CO.
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Director (principal July 24, 1997
- ----------------------------------------------------- executive officer)
James M. Wingard
* Vice President and Chief Financial July 24, 1997
- ----------------------------------------------------- Officer and Director (principal
Philip J. Ablove financial officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Chairman of the Board July 24, 1997
- -----------------------------------------------------
Michael J. Ferris
* Director July 24, 1997
- -----------------------------------------------------
William L. Mahone
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-9
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
ALL-PURE CHEMICAL CO.
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Director (principal July 24, 1997
- ----------------------------------------------------- executive officer)
Ronald E. Ciora
* Vice President and Chief Financial July 24, 1997
- ----------------------------------------------------- Officer and Director (principal
Philip J. Ablove financial officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Chairman of the Board July 24, 1997
- -----------------------------------------------------
Michael J. Ferris
* Director July 24, 1997
- -----------------------------------------------------
William L. Mahone
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-10
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
BLACK MOUNTAIN POWER COMPANY
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Director (principal July 24, 1997
- ----------------------------------------------------- executive officer)
Terry K. Graves
* Vice President and Chief Financial July 24, 1997
- ----------------------------------------------------- Officer and Director (principal
Philip J. Ablove financial officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Chairman of the Board July 24, 1997
- -----------------------------------------------------
Michael J. Ferris
* Director July 24, 1997
- -----------------------------------------------------
James E. Glattly
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-11
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
ALL-PURE CHEMICAL NORTHWEST, INC.
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Director (principal July 24, 1997
- ----------------------------------------------------- executive officer)
Ronald E. Ciora
* Vice President and Chief Financial July 24, 1997
- ----------------------------------------------------- Officer and Director (principal
Philip J. Ablove financial officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Chairman of the Board July 24, 1997
- -----------------------------------------------------
Michael J. Ferris
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-12
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
PIONEER CHLOR ALKALI INTERNATIONAL, INC.
By: /s/ KENT R. STEPHENSON
----------------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board (principal July 24, 1997
- ----------------------------------------------------- executive officer)
Michael J. Ferris
* Vice President (principal financial July 24, 1997
- ----------------------------------------------------- officer)
Philip J. Ablove
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Director July 24, 1997
- -----------------------------------------------------
David F. Callaghan
* Director July 24, 1997
- -----------------------------------------------------
James A. Fields
* Director July 24, 1997
- -----------------------------------------------------
David A. Leslie
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-13
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
G. O. W. CORPORATION
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Director (principal July 24, 1997
- ----------------------------------------------------- executive officer)
Terry K. Graves
* Vice President and Chief Financial July 24, 1997
- ----------------------------------------------------- Officer (principal financial
Philip J. Ablove officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-14
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
PIONEER (EAST), INC.
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ KENT R. STEPHENSON President, Secretary and Chairman of July 24, 1997
- ----------------------------------------------------- the Board (principal executive
Kent R. Stephenson officer)
* Treasurer and Director (principal July 24, 1997
- ----------------------------------------------------- financial and accounting officer)
Robert C. Williams
* Director July 24, 1997
- -----------------------------------------------------
Victoria L. Garrett
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-15
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
T.C. HOLDINGS, INC.
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Director (principal July 24, 1997
- ----------------------------------------------------- executive officer)
Ronald E. Ciora
* Vice President and Chief Financial July 24, 1997
- ----------------------------------------------------- Officer and Director (principal
Philip J. Ablove financial officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Chairman of the Board July 24, 1997
- -----------------------------------------------------
Michael J. Ferris
* Director July 24, 1997
- -----------------------------------------------------
William L. Mahone
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-16
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 24th day of July, 1997.
T.C. PRODUCTS, INC.
By: /s/ KENT R. STEPHENSON
----------------------------------
Name: Kent R. Stephenson
Title: Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Director (principal July 24, 1997
- ----------------------------------------------------- executive officer)
Ronald E. Ciora
* Vice President and Chief Financial July 24, 1997
- ----------------------------------------------------- Officer and Director (principal
Philip J. Ablove financial officer)
* Controller (principal accounting July 24, 1997
- ----------------------------------------------------- officer)
John R. Beaver
* Chairman of the Board July 24, 1997
- -----------------------------------------------------
Michael J. Ferris
* Director July 24, 1997
- -----------------------------------------------------
William L. Mahone
*By: /s/ KENT R. STEPHENSON
------------------------------------------------
Kent R. Stephenson
Attorney-in-Fact
</TABLE>
II-17
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
*2.1 -- Asset Purchase Agreement, dated as of May 14, 1997, by
and among OCC Tacoma, Inc. and Pioneer (incorporated by
reference to Exhibit 2 to the Company's Current Report on
Form 8-K, dated June 17, 1997).
*3.1 -- Certificate of Incorporation of PAAC (incorporated by
reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
*3.2 -- By-laws of PAAC (incorporated by reference to Exhibit 3.2
to the Company's Registration Statement on Form S-4 (File
No. 33-98828) declared effective by the Commission on
December 22, 1995).
*3.3 -- Certificate of Incorporation of PAI (incorporated by
reference to Exhibit 3.3 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
*3.4 -- By-laws of PAI (incorporated by reference to Exhibit 3.4
to the Company's Registration Statement on Form S-4 (File
No. 33-98828) declared effective by the Commission on
December 22, 1995).
*3.5 -- Certificate of Incorporation of PCAC (incorporated by
reference to Exhibit 3.5 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
*3.6 -- By-laws of PCAC (Incorporated by reference to Exhibit 3.6
to the Company's Registration Statement on Form S-4 (File
No. 33-98828) declared effective by the Commission on
December 22, 1995).
*3.7 -- Certificate of Incorporation of Imperial West
(incorporated by reference to Exhibit 3.7 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*3.8 -- By-laws of Imperial West (incorporated by reference to
Exhibit 3.8 to the Company's Registration Statement on
Form S-4 (File No. 33-98828) declared effective by the
Commission on December 22, 1995).
*3.9 -- Certificate of Incorporation of All-Pure (incorporated by
reference to Exhibit 3.9 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
*3.10 -- By-laws of All-Pure (incorporated by reference to Exhibit
3.10 to the Company's Registration Statement on Form S-4
(File No. 33-98828) declared effective by the Commission
on December 22, 1995).
*3.11 -- Certificate of Incorporation of Black Mountain Power
Company (incorporated by reference to Exhibit 3.11 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*3.12 -- By-laws of Black Mountain Power Company (incorporated by
reference to Exhibit 3.12 to the Company's Registration
Statement on Form S-4 (File No. 33-98828) declared
effective by the Commission on December 22, 1995).
*3.13 -- Certificate of Incorporation of All-Pure Chemical
Northwest, Inc. (incorporated by reference to Exhibit
3.13 to the Company's Registration Statement on Form S-4
(File No. 33-98828) declared effective by the Commission
on December 22, 1995).
*3.14 -- By-laws of All-Pure Chemical Northwest, Inc.
(incorporated by reference to Exhibit 3.14 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
*3.15 -- Certificate of Incorporation of Pioneer Chlor Alkali
International, Inc. (incorporated by reference to Exhibit
3.15 to the Company's Registration Statement on Form S-4
(File No. 33-98828) declared effective by the Commission
on December 22, 1995).
*3.16 -- By-laws of Pioneer Chlor Alkali International, Inc.
(incorporated by reference to Exhibit 3.16 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*3.17 -- Certificate of Incorporation of G.O.W. Corporation
(incorporated by reference to Exhibit 3.17 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*3.18 -- By-laws of G.O.W. Corporation (incorporated by reference
to Exhibit 3.18 to the Company's Registration Statement
on Form S-4 (File No. 33-98828) declared effective by the
Commission on December 22, 1995).
*3.19 -- Certificate of Incorporation of Pioneer (East), Inc.
*3.20 -- By-laws of Pioneer (East), Inc.
*3.21 -- Certificate of Incorporation of T.C. Holdings, Inc.
*3.22 -- By-laws of T.C. Holdings, Inc.
*3.23 -- Certificate of Incorporation of T.C. Products, Inc.
*3.24 -- By-laws of T.C. Products, Inc.
*4.1 -- Indenture, dated as of June 17, 1997, by and among PAAC,
the Subsidiary Guarantors defined therein and United
States Trust Company of New York, as Trustee, relating to
$200,000,000 principal amount of 9 1/4% Series A Senior
Notes due 2007, including form of Note and Guarantees.
*4.2(a) -- Deed of Trust, Assignment of Leases and Rents, Security
Agreement, Fixture Filing and Financing Statement by PCAC
(Tacoma, Washington).
*4.2(b) -- Mortgage, Assignment of Leases and Rents, Security
Agreement, Fixture Filing and Financing Statement by PCAC
(St. Gabriel, Louisiana).
*4.2(c) -- Deed of Trust, Assignment of Leases and Rents, Security
Agreement, Fixture Filing and Financing Statement by PCAC
(Henderson, Nevada).
*4.3(a) -- Term Loan Agreement, dated as of June 17, 1997, among
PAAC, Various Financial Institutions, as Lenders, DLJ
Capital Funding, Inc., as the Syndication Agent, Salomon
Brothers Holding Company Inc, as the Documentation Agent
and Bank of America Illinois, as the Administrative Agent
(the "Term Loan Agreement").
*4.3(b) -- Subsidiary Guaranty, dated June 17, 1997, executed by
each of the Subsidiaries party thereto, as guarantor,
respectively, in favor of the Lenders, guaranteeing the
obligations of one another under the Term Loan Agreement.
*4.4 -- Security Agreement, dated as of June 17, 1997, among PCAC
and United States Trust Company of New York, as
Collateral Agent.
*4.5 -- Stock Pledge Agreement, dated as of June 17, 1997, among
PAI and United States Trust Company of New York, as
Collateral Agent.
*4.6(a) -- Loan and Security Agreement, dated as of June 17, 1997,
by and among PAAC, Bank of America Illinois, as Agent and
Lender and the other Lenders party thereto (the
"Revolving Loan Agreement").
*4.6(b) -- Master Corporate Guaranty, dated June 17, 1997, executed
by each of the Subsidiaries party thereto, as guarantor,
respectively, in favor of Bank of America Illinois, as
Agent, for the ratable benefit of the Lenders,
guaranteeing the obligations of one another under the
Revolving Loan Agreement.
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
*4.6(c) -- Master Security Agreement, dated June 17, 1997, executed
by each of the Subsidiaries party thereto, as debtor,
respectively, in favor of Bank of America Illinois, as
Agent, for the ratable benefit of the lenders
*4.7 -- Intercreditor and Collateral Agency Agreement, dated as
of June 17, 1997 by and among United States Trust Company
of New York, as Trustee and Collateral Agent, Bank of
America Illinois, as Agent, PAAC, PAI and PCAC.
*4.8 -- Exchange and Registration Rights Agreement, dated as of
June 17, 1997, by and among PAAC, the Subsidiary
Guarantors and the Initial Purchasers.
5.1 -- Opinion of Willkie Farr & Gallagher.
5.2 -- Opinion of Kent R. Stephenson, Esq.
8.1 -- Opinion of Willkie Farr & Gallagher with respect to
certain tax matters.
*10.1 -- Contingent Payment Agreement, dated as of April 20, 1995,
by and among Pioneer (formerly, GEV corporation), PAAC
and the Sellers defined therein (incorporated by
reference to Exhibit 10.2 to the Current Report on Form
8-K of Pioneer, dated April 20, 1995).
*10.2 -- Tax Sharing Agreement, dated as of April 20, 1995, by and
among Pioneer, PAAC and the Subsidiary Guarantors defined
therein (incorporated by reference to Exhibit 10.3 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*10.3 -- Pioneer Companies, Inc. 1995 Stock Incentive Plan
(incorporated by reference to Exhibit 10.4 to the
Company's Registration Statement on Form S-4 (File No.
33-98828) declared effective by the Commission on
December 22, 1995).
*10.4 -- Pioneer Companies, Inc. Key Executive Stock Grant Plan
(incorporated by reference to Exhibit 10.2 to the
Quarterly Report on Form 10-Q of Pioneer for the
quarterly period ended June 30, 1996).
*10.5 -- Pioneer Chlor Alkali Company, Inc. Supplemental
Retirement Plan (incorporated by reference to Exhibit
10.5 to the Annual Report on Form 10-K of Pioneer for the
fiscal year ended December 31, 1995).
*10.6 -- Employment Agreement, dated as of April 20, 1995, between
Pioneer and Richard C. Kellogg, Jr. (incorporated by
reference to Exhibit 10.1 to the Quarterly Report on Form
10-Q of Pioneer for the quarterly period ended June 30,
1995).
*10.7 -- Employment Agreement, dated November 1, 1992, and First
Amendment to Employment Agreement, dated as of April 20,
1995, between Pioneer Chlor Alkali Company, Inc. and Paul
J. Kienholz (incorporated by reference to Exhibit 10.7 to
Pioneer's Annual Report on Form 10-K for the year ended
December 31, 1995).
*10.8 -- Employment Agreement, dated April 20, 1995, between
Pioneer Americas, Inc. and James E. Glattly (incorporated
by reference to Exhibit 10.8 to Pioneer's Annual Report
on Form 10-K for the year ended December 31, 1995).
*10.9 -- Employment Agreement, dated April 20, 1995, between
Pioneer Americas, Inc. and Verrill M. Norwood, Jr.
(incorporated by reference to Exhibit 10.9 to Pioneer's
Annual Report on Form 10-K for the year ended December
31, 1995).
*10.10 -- Executive Employment Agreement, dated January 4, 1997,
between Pioneer Companies, Inc. and Michael J. Ferris
(incorporated by reference to Exhibit 10.10 to the Annual
Report on Form 10-K of the Company for the fiscal year
ended December 31, 1996).
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
*10.11 -- Stock Purchase Agreement, dated January 4, 1997, between
Pioneer Companies, Inc. and Michael J. Ferris
(incorporated by reference to Exhibit 10.11 to the Annual
Report on Form 10-K of the Company for the fiscal year
ended December 31, 1996).
*10.12 -- Non-Qualified Stock Option Agreement, dated January 4,
1997, between Pioneer Companies, Inc. and Michael J.
Ferris (incorporated by reference to Exhibit 10.12 to the
Annual Report on Form 10-K of the Company for the fiscal
year ended December 31, 1996).
10.13 -- Chlorine and Caustic Soda Sales Agreement, dated as of
June 17, 1997, between Occidental Chemical Corporation
and PCAC.
10.14 -- Chlorine Purchase Agreement, dated as of June 17, 1997,
between OCC Tacoma, Inc. and PCAC.
+10.15 -- Environmental Operating Agreement, dated as of June 17,
1997, between OCC Tacoma and PCAC
*12.1 -- Statement Regarding Computation of Ratio of Earnings to
Fixed Charges.
*16.1 -- Letter from Ernst & Young LLP regarding change in
independent accountants (incorporated by reference to
Exhibit 16.1 to the Company's Registration Statement on
Form S-4 (File No. 33-98828) declared effective by the
Commission on December 22, 1995).
*21.1 -- Subsidiaries of the Registrants.
*23.1 -- Independent Auditors' Consent of Deloitte & Touche LLP.
*23.2 -- Independent Auditors' Consent of Ernst & Young LLP.
*23.3 -- Independent Auditors' Consent of Piercy, Bowler, Taylor &
Kern.
*23.4 -- Independent Public Accountants' Consent of Arthur
Andersen LLP.
23.5 -- Consents of Willkie Farr & Gallagher (included in their
opinions filed as Exhibits 5.1 and 8.1).
23.6 -- Consent of Kent R. Stephenson, Esq. (included in his
opinion filed as Exhibit 5.2).
*24.1 -- Powers of Attorney (included in the signature pages
hereto).
*25.1 -- Statement on Form T-1 of Eligibility of Trustee.
*99.1 -- Form of Letter of Transmittal.
*99.2 -- Form of Notice of Guaranteed Delivery.
*99.3 -- Form of Letter to Clients.
*99.4 -- Form of Letter to Nominees.
</TABLE>
- ---------------
* Previously filed.
+ Confidential treatment has been requested for portions of this agreement.
<PAGE> 1
EXHIBIT 5.1
July 24, 1997
Pioneer Americas Acquisition Corp.
4200 NationsBank Center
700 Louisiana Street
Houston, Texas 77002
Re: Registration Statement on Form S-4
(File No. 333-30683)
Dear Sirs:
We are counsel to Pioneer Americas Acquisition Corp., a Delaware corporation
(the "Company"), and its subsidiaries (the "Subsidiary Guarantors" and together
with the Company, the "Issuers"), and have acted as such in connection with
various legal matters relating to the filing of a Registration Statement on
Form S-4 (File No. 333-30683) (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), covering up to
$200,000,000 in aggregate principal amount of 9-1/4% Series B Senior Secured
Notes due 2007 (the "Exchange Notes") offered in exchange for up to
$200,000,000 in aggregate principal amount of outstanding 9-1/4% Series A
Senior Secured Notes due 2007 originally issued and sold in reliance upon an
exemption from registration under the Securities Act (the "Original Notes").
The Original Notes were issued under, and the Exchange Notes are to be issued
under, the Indenture, dated as of June 17, 1997 (the "Indenture"), among the
Issuers and the United States Trust Company of New York, as trustee. The
exchange will be made pursuant to an exchange offer (the "Exchange Offer")
contemplated by the Registration Statement. Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them in the
Registration Statement.
In so acting, we have examined copies of such records of the Issuers and such
other certificates and documents as we have deemed relevant and necessary for
the opinions hereinafter set forth. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity to authentic originals of all documents
submitted to us as certified or reproduced copies. We have also assumed the
legal capacity of all persons executing such documents and the truth and
correctness of any representations or warranties therein contained. As to
various questions of fact material to such opinions, we have relied upon
certificates of officers of the Issuers and of public officials.
<PAGE> 2
Pioneer Americas Acquisition Corp.
July 24, 1997
Page 2
Based upon the foregoing, we are of the opinion that:
1. The Company, Pioneer Americas, Inc., Pioneer Chlor Alkali Company, Inc.
and Pioneer (East), Inc. are duly formed and validly existing under the
laws of the State of Delaware.
2. The execution and delivery of the Indenture has been duly authorized by the
Issuers, and the Indenture constitutes a legal, valid and binding obligation
of the Issuers, enforceable against the Issuers in accordance with the terms
thereof, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance and other similar laws
affecting the enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law).
3. The Exchange Notes have been duly authorized and, when duly executed by the
proper officers of the Company, duly authenticated by the Trustee and issued
by the Company in accordance with the terms of the Indenture and the
Exchange Offer, will constitute legal, valid and binding obligations of the
Company, will be entitled to the benefits of the Indenture and will be
enforceable against the Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance and other similar laws affecting the
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
4. The Guarantee have been duly authorized and, when the Exchange Notes have
been duly executed and authenticated, and the Guarantees have been duly
executed, in accordance with the terms of the Indenture, and the Exchange
Notes have been delivered to the holders as described in the Prospectus, the
Guarantees will constitute legal, valid and binding obligations of the
Subsidiary Guarantors, will be entitled to the benefits of the Indenture
and will be enforceable against the Subsidiary Guarantors in accordance with
their term, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance and other similar laws
affecting the enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
This opinion is limited to the laws of the State of New York, the General
Corporation Law of the State of Delaware and the federal
<PAGE> 3
Pioneer Americas Acquisition Corp.
July 24, 1997
Page 3
laws of the United States of the type typically applicable to transactions
contemplated by the Exchange Offer, and we do not express any opinion with
respect to the laws of any other country, state or jurisdiction. In rendering
our opinions expressed in paragraphs 2, 3 and 4 above, we have relied on the
opinion of Kent R. Stephenson, Esq., Vice President, General Counsel and
Secretary of the Company, addressed to you and of even date herewith, to the
extent our opinions relate to due authorization, execution and delivery of
Subsidiary Guarantors not incorporated in the State of Delaware.
This opinion letter is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated.
This letter speaks only as of the date hereof and is limited to present
statutes, regulations and administrative and judicial interpretations. We
undertake no responsibility to update or supplement this letter after the date
hereof.
We consent to being named in the Registration Statement and related Prospectus
as counsel who are passing upon the legality of the Exchange Notes for the
Company and the Guarantees for the Subsidiary Guarantors and to the reference
to our name under the caption "Legal Matters" in such Prospectus. We also
consent to your filing copies of this opinion as an exhibit to the Registration
Statement or any amendment thereto.
Very truly yours,
/s/ Willkie Farr & Gallagher
<PAGE> 1
EXHIBIT 5.2
July 24, 1997
Pioneer Americas Acquisition Corp.
4200 NationsBank Center
700 Louisiana Street
Houston, Texas 77002
Re: Registration Statement on Form S-4
(File No. 333-30683)
Dear Sirs:
I am Vice President, General Counsel and Secretary of Pioneer Americas
Acquisition Corp., a Delaware corporation (the "Company" and together with its
subsidiaries, the "Issuers") and have acted as such in connection with various
legal matters relating to the filing of a Registration Statement on Form S-4
(File No. 333-30683) (The "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), covering up to $200,000,000 in
aggregate principal amount of 9-1/4% Series B Senior Secured Notes due 2007
(the "Exchange Notes") offered in exchange for up to $200,000,000 in aggregate
principal amount of outstanding 9-1/4% Series A Senior Secured Notes due 2007
in reliance upon an exemption from registration under the Securities Act (the
"Original Notes"). The Original Notes were issued under, and the Exchange
Notes are to be issued under, the Indenture, dated as of June 17, 1997, among
the Issuers and the United States Trust Company of New York, as trustee. The
exchange will be made pursuant to an exchange offer (the "Exchange Offer")
contemplated by the Registration Statement. Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them in the
Registration Statement.
In so acting, I have examined copies of such records of the Issuers and such
other certificates and documents as I have deemed relevant and necessary for
the opinions hereinafter set forth. In such examination, I have assumed the
genuineness of all signatures, the authenticity of all documents submitted
to me as originals and the conformity to authentic originals of all documents
submitted to me as certified or reproduced copies. I have also assumed the
legal capacity of all persons executing such documents and the truth and
correctness of any representations or warranties therein contained. As to
various questions of
<PAGE> 2
Pioneer Americas Acquisition Corp.
July 24, 1997
Page 2
fact material to such opinions, I have relied upon certificates of officers of
the Issuers and of public officials.
Based upon the foregoing, I am of the opinion that:
1. Imperial West Chemical Co., All-Pure Chemical Co., Black Mountain Power
Company, All-Pure Chemical Northwest, Inc., Pioneer Chlor Alkali
International, Inc., G.O.W. Corporation, T.C. Holdings, Inc. and T.C.
Products, Inc. (collectively, the "Non-Delaware Subsidiaries") are duly
formed and validly existing under the laws of their respective
jurisdictions of incorporation.
2. The Indenture has been duly authorized, executed and delivered by each
of the Non-Delaware Subsidiaries. Each of the Exchange Notes and the
Guarantees have been duly authorized by each of the Non-Delaware
Subsidiaries.
This opinion letter is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated. This opinion
letter may be relied upon by Willkie Farr & Gallagher in connection with the
Exchange Offer.
This letter speaks only as of the date hereof and is limited to present
statutes, regulations and administrative and judicial interpretations. I
undertake no responsibility to update or supplement this letter after the date
hereof.
I consent to your filing copies of this opinion as an exhibit to the
Registration Statement or any amendment thereto.
Sincerely,
/s/ Kent R. Stephenson
Kent R. Stephenson
Vice President,
General Counsel and
Secretary
<PAGE> 1
EXHIBIT 8.1
July 24, 1997
Pioneer Americas Acquisition Corp.
4200 NationsBank Center
700 Louisiana Street
Houston, Texas 77002
Re: Registration Statement on Form S-4
(File No. 333-30683)
Dear Sirs:
We have acted as counsel to Pioneer Americas Acquisition Corp., a Delaware
corporation (the "Company"), and its subsidiaries (together with the Company,
the "Issuers"), in connection with the filing of a Registration Statement on
Form S-4 (File No. 333-30683) (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), covering up to
$200,000,000 in aggregate principal amount of 9-1/4% Series B Senior Secured
notes due 2007 (the "Exchange Notes") offered in exchange for up to
$200,000,000 in aggregate principal amount of outstanding 9-1/4% Series A
Senior Secured Notes due 2007 originally issued and sold in reliance upon an
exemption from registration under the Securities Act (the "Original Notes").
In that connection, we have prepared the section entitled "The Exchange Offer -
Federal Income Tax Consequences" contained in the Registration Statement.
Our opinion is based on the provisions of the Internal Revenue Code of 1986, as
amended, regulations under such Code, judicial authority and current
administrative rulings and practice, all as of the date of this letter, and all
of which may change at any time.
Based on the foregoing, it is our opinion that as stated in the
above-referenced section of the Registration Statement, the exchange of
Original Notes for Exchange Notes by holders will not be a taxable exchange for
federal income tax purposes, and holders should not recognize any taxable gain
or loss or any interest income as a result of such exchange.
We hereby consent to the use of this opinion as Exhibit 8.1 to the Registration
Statement and related Prospectus filed with the Securities and Exchange
Commission and to the reference to us under the caption "Legal Matters"
therein.
Very truly yours,
/s/ Willkie Farr & Gallagher
<PAGE> 1
EXHIBIT 10.13
===============================================================================
CHLORINE AND CAUSTIC SODA SALES AGREEMENT
between
PIONEER CHLOR ALKALI COMPANY, INC.
and
OCCIDENTAL CHEMICAL CORPORATION
Dated as of June 17, 1997
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PARTIES AND RECITALS PAGE NUMBER
-----------
<S> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions................................................1
ARTICLE II
COMMITMENTS OF PURCHASE AND SALE
SECTION 2.1 Purchase Commitment........................................3
SECTION 2.2 Sales Commitment...........................................4
ARTICLE III
QUANTITY
SECTION 3.1 National Accounts Contracts Requirements...................4
SECTION 3.2 Notification of Annual Requirements........................5
SECTION 3.3 Priority of Obligations to OxyChem.........................5
ARTICLE IV
TERM
SECTION 4.1 Term of This Agreement.....................................6
SECTION 4.2 Effect of Modifications of National Account Contracts......6
ARTICLE V
PRICE
SECTION 5.1 Prices of Chlorine and Caustic Soda........................6
SECTION 5.2 Notification of Price; OxyChem's Payment...................6
SECTION 5.3 Pioneer's Right to Audit...................................8
ARTICLE VI
DELIVERY
SECTION 6.1 Shipping Instructions......................................8
SECTION 6.2 Title and Risk of Loss.....................................9
SECTION 6.3 Transportation Costs.......................................9
SECTION 6.4 OxyChem's Right to Audit Certain Transportation Charge.....9
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE NUMBER
-----------
<S> <C>
ARTICLE VII
MEASUREMENT
SECTION 7.1 Rail Car Delivery..........................................10
SECTION 7.2 Calibration of Measuring Devices...........................10
ARTICLE VIII
WARRANTIES; LIMITATIONS OF CLAIMS
SECTION 8.1 Pioneer's Warranty.........................................11
SECTION 8.2 Patents....................................................11
SECTION 8.3 Packaging, Uses and Safe Handling..........................11
SECTION 8.4 Emergency Response.........................................11
SECTION 8.5 Quality Claims; Liability..................................11
ARTICLE IX
TAXES
SECTION 9.1 Responsibility for Taxes...................................12
ARTICLE X
LIABILITY AND RESPONSIBILITY
SECTION 10.1 Allocation of Liability....................................12
SECTION 10.2 Procedures for Indemnification.............................13
ARTICLE XI
EXCUSE OF PERFORMANCE
SECTION 11.1 Excuse of Performance......................................14
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Default and Remedies.......................................15
SECTION 12.2 Certain Damages Excluded...................................16
SECTION 12.3 Duty to Mitigate...........................................16
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE NUMBER
-----------
<S> <C>
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Successors and Assigns.....................................16
SECTION 13.2 Entire Agreement; Amendment................................17
SECTION 13.3 Governing Law..............................................17
SECTION 13.4 Notices....................................................18
SECTION 13.5 Competition; Access to National Account Contracts..........19
SECTION 13.6 Severability...............................................19
SECTION 13.7 Headings...................................................19
SECTION 13.8 Counterparts...............................................19
SECTION 13.9 Construction...............................................19
SECTION 13.10 Third Party Beneficiaries..................................19
SECTION 13.11 Payments...................................................19
SECTION 13.12 Incorporation of Appendices................................19
</TABLE>
Appendices
iii
<PAGE> 5
LIST OF APPENDICES
<TABLE>
<CAPTION>
Appendix Description
-------- -----------
<S> <C>
Appendix A Caustic Soda Specifications
Appendix B Chlorine Specifications
Appendix C National Accounts
Appendix D National Account Contracts
Appendix E Expiration Dates of National Account Contracts
Appendix F Chlorine and Caustic Soda Estimates
Appendix G Pioneer's Standard Terms and Conditions
Appendix H Initial Month Quantities and Shipping Details
Appendix I Delivery Performance Standards
</TABLE>
iv
<PAGE> 6
CHLORINE AND CAUSTIC SODA SALES AGREEMENT
THIS CHLORINE AND CAUSTIC SODA SALES AGREEMENT, dated as of the 17th
day of June, 1997, is between OCCIDENTAL CHEMICAL CORPORATION, a New York
corporation, and PIONEER CHLOR ALKALI COMPANY, INC., a Delaware corporation.
WHEREAS, pursuant to the Asset Purchase Agreement (as such term and
certain other terms used in this Agreement with initial capital letters are
defined or incorporated by reference in Article I), the Parties have provided
for the sale by OCC Tacoma, a wholly owned subsidiary of OxyChem, and the
purchase by Pioneer, of OCC Tacoma's chloralkali manufacturing facility located
at Tacoma, Washington; and
WHEREAS, after the sale of the Tacoma Plant to Pioneer, OxyChem will
retain a significant national chloralkali manufacturing business, including,
without limitation, the right, title and interest of OxyChem in the National
Account Contracts in the course of the performance of which OxyChem has
utilized chlorine and caustic soda manufactured at the Tacoma Plant; and
WHEREAS, after the sale of the Tacoma Plant to Pioneer, OxyChem desires
to continue to discharge certain of its obligations pursuant to the National
Account Contracts by purchasing certain quantities of chlorine and caustic soda
from Pioneer; and
WHEREAS, after the sale of the Tacoma Plant to Pioneer, Pioneer desires
to deliver and sell, and OxyChem desires to take and pay for, certain
quantities of chlorine and caustic soda in order to permit OxyChem to continue
to discharge such obligations until the expiration or other termination of the
National Account Contracts, as such National Account Contracts are in effect as
of the date of this Agreement; and
WHEREAS, the Parties are entering into this Agreement in accordance
with the provisions of the Asset Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
benefits and agreements hereinafter set forth, the Parties do hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated below (such meanings to be equally applicable to both the singular
and the plural forms of the terms defined). Capitalized
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<PAGE> 7
terms not otherwise specifically defined herein shall have the meanings
assigned to them in the Asset Purchase Agreement.
"Affiliate" means any Person that is an "affiliate" within the meaning
of the regulations promulgated under the Securities Act of 1933, as amended, as
such regulations and Act shall be amended and in effect on the date of this
Agreement.
"Agreement" means this Chlorine and Caustic Soda Sales Agreement, as
the same may be amended pursuant to the provisions hereof.
"Asset Purchase Agreement" means the Asset Purchase Agreement, dated as
of May 14, 1997, between OCC Tacoma and Pioneer.
"caustic soda" means sodium hydroxide (NaOH) having the specifications
set forth in Appendix A to this Agreement and measured in units of dry short
tons.
"chlorine" means liquid chlorine having the specifications set forth in
Appendix B to this Agreement. All references to quantities of chlorine in this
Agreement shall be in units of short tons.
"Claim" has the meaning specified in Section 10.1.
"dry short ton" means 2000 pounds of 50% liquid caustic soda, basis
76% Na(2)O.
"Indemnified Party" has the meaning specified in Section 10.2.
"Indemnifying Party" has the meaning specified in Section 10.2.
"Initial Year" means the period of time from the date of this Agreement
until December 31, 1997.
"Losses" has the meaning specified in Section 10.1.
"month" means a calendar month.
"National Accounts" means the companies listed in Appendix C to this
Agreement.
"National Account Contracts" means the contracts listed in Appendix D
to this Agreement.
"OCC Tacoma" means OCC Tacoma, Inc., a Delaware corporation.
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<PAGE> 8
"Oxy Accountant" means Arthur Andersen LLP or such other nationally
recognized accounting firm as shall be selected by OxyChem.
"OxyChem" means Occidental Chemical Corporation, a New York corporation.
"Party" means Pioneer or OxyChem, as applicable, and "Parties" means
Pioneer and OxyChem.
"Person" means any natural person, corporation, limited liability
company, partnership, group, joint venture, trust, association or other
business enterprise or organization or any government or agency or political
subdivision thereof or any other entity.
"Pioneer" means Pioneer Chlor Alkali Company, Inc., a Delaware
corporation.
"Pioneer Accountant" means Deloitte & Touche LLP or such other
nationally recognized accounting firm as shall be selected by Pioneer.
"Price" means, with respect to each of chlorine and caustic soda, the
price thereof determined in accordance with the provisions of Article V.
"short ton" means two thousand (2000) pounds.
"Superfund Assessment" means the assessment on the production and sale
of chlorine or caustic soda imposed pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act, as the same may be from time to time
amended or reauthorized and in effect.
"Tacoma Plant" means the chlor alkali manufacturing facility acquired by
Pioneer pursuant to the Asset Purchase Agreement and located at 605 Alexander
Avenue, Tacoma, Washington.
"Term" has the meaning specified in Section 4.1.
"year" or "yearly" means the Initial Year and any calendar year
occurring thereafter.
ARTICLE II
COMMITMENTS OF PURCHASE AND SALE
SECTION 2.1 Purchase Commitment. Upon the terms and subject to the
conditions set forth in this Agreement, Oxychem agrees to take and purchase
from Pioneer, during the Term, the quantities of chlorine and caustic soda as
hereinafter described and at the Prices as hereinafter set forth. In the case
of the Initial Year or, if the expiration or other termination of any National
Account Contract occurs on a date other than the first or last day of a year,
then each relevant quantity commitment shall be prorated, as of any date of
determination, by multiplying the amount
3
<PAGE> 9
of such commitment by a fraction the numerator of which shall be the number of
days from such date of determination to (and including) such last day and the
denominator of which shall be 365.
SECTION 2.2 Sales Commitment. Upon the terms and subject to the
conditions set forth in this Agreement, Pioneer agrees to deliver and sell to
OxyChem, during the Term, the quantities of chlorine and caustic soda as
hereinafter described and at the Prices as hereinafter set forth. In the case
of the Initial Year or, if the expiration or other termination of any National
Account Contract occurs on a date other than the first or last day of a year,
then each relevant quantity commitment shall be prorated, as of any date of
determination, by multiplying the amount of such commitment by a fraction the
numerator of which shall be the number of days from such date of determination
to (and including) such last day and the denominator of which shall be 365.
ARTICLE III
QUANTITY
SECTION 3.1 National Account Contracts Requirements.
(a) Subject to the provisions of Sections 3.2 and 3.3, OxyChem shall
take and purchase from Pioneer, and Pioneer shall deliver and sell to OxyChem,
each year during the Term the quantities of chlorine and caustic soda that are
required in order for OxyChem to exercise its rights and to discharge its
obligations to each of the National Accounts pursuant to the provisions of the
National Account Contracts as in effect, and for the term of such National
Account Contract remaining, on the date of this Agreement, and which, but for
the sale of the Tacoma Plant to Pioneer, OxyChem would have supplied directly
from production at the Tacoma Plant (determined consistently with OxyChem's
documented historical manner of discharging its supply obligation in respect of
such National Account Contract).
(b) Subject to the provisions of Sections 3.2 and 3.3, the quantities
of chlorine and caustic soda that OxyChem may also take and purchase from
Pioneer, and that Pioneer may also deliver and sell to OxyChem, shall include,
in addition to the quantities described in paragraph (a) of this Section 3.1,
any additional quantities of chlorine and caustic soda which any National
Account may have an option to call from OxyChem pursuant to the provisions of
the relevant National Account Contract and which, but for the sale of the Tacoma
Plant to Pioneer, OxyChem would have supplied directly from production at the
Tacoma Plant (determined consistently with OxyChem's documented historical
manner of discharging its supply obligation in respect of such National Account
Contract). OxyChem will notify Pioneer of any volumes which will be requested
pursuant to this paragraph (b) not less than fifteen (15) days prior to the
requested date of shipment.
(c) Upon the date specified in Appendix E for each National Account
Contract or the earlier termination of a National Account Contract, Pioneer
shall have no further obligation to supply any amounts of chlorine or caustic
soda to OxyChem attributable to such National
4
<PAGE> 10
Account Contract. The dates specified in Appendix E are the current expiration
dates for each National Account Contract listed.
SECTION 3.2 Notification of Annual Requirements.
(a) Not less than one hundred eighty (180) days prior to the end
of each year during the Term (other than the Initial Year), OxyChem shall
submit to Pioneer, in writing, a non-binding forecast of that portion of
OxyChem's requirements for chlorine and caustic soda required pursuant to the
provisions of the National Account Contracts for the following year to be
supplied hereunder. Such forecast shall represent OxyChem's best effort to
accurately predict chlorine and caustic soda sales pursuant to the terms of the
National Account Contracts.
(b) The estimated quantities of chlorine and caustic soda to be
supplied by Pioneer for each of the National Accounts during the Initial Year
are specified in Appendix F to this Agreement. In addition, with respect to
each National Account Contract, Appendix F sets forth the (i) maximum and
minimum volumes, and (ii) volumes subject to be called by OxyChem. OxyChem
agrees that its requirements in any subsequent years shall not exceed one
hundred twenty-five percent (125%) of the volumes of each of the National
Account Contracts for such year, as shown on Appendix F. If in any year during
the term of this Agreement, OxyChem shall require a quantity of chlorine or
caustic soda in excess of the limitations provided for in this paragraph in
order to discharge its obligations under any National Account Contract, OxyChem
shall provide to Pioneer written notice of such excess requirement and, within
the time period specified by OxyChem in such notice, Pioneer may elect to
provide all of such additional quantities to OxyChem pursuant to the provisions
of this Agreement. OxyChem shall provide such notice as soon as commercially
practicable upon learning of such additional requirements, including a
statement of the date (which shall not be less than five (5) days after
Pioneer's receipt of such notice) by which Pioneer must notify OxyChem of its
determination to supply all of such additional quantities or its determination
to forego such additional sales. In the latter case, OxyChem shall have the
right to supply such additional quantities from any other source.
SECTION 3.3 Priority of Obligations to OxyChem. Pioneer's right and
obligation to deliver and sell chlorine and caustic soda to OxyChem pursuant to
the provisions of this Agreement, and OxyChem's right and obligation to take
and pay for chlorine and caustic soda from Pioneer pursuant to the provisions
of this Agreement, shall be subject to allocation by Pioneer in accordance with
Pioneer's customary practice as applied to Pioneer's like customers; provided,
however, that Pioneer's obligation to provide quantities of chlorine and
caustic soda to OxyChem pursuant to the provisions of this Agreement for the
Clorox Company National Account, and OxyChem's right to purchase quantities of
chlorine and caustic soda from Pioneer pursuant to the provisions of this
Agreement for the Clorox Company National Account, shall not be subject to
allocation by Pioneer among its other customers or its own internal
requirements.
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<PAGE> 11
ARTICLE IV
TERM
SECTION 4.1 Term of this Agreement. The term (the "Term") of this
Agreement shall commence, and this Agreement shall become effective, on the
date hereof and shall continue thereafter until the latest date on Appendix E
or, if earlier, the date upon which the last of the National Account Contracts
shall be terminated.
SECTION 4.2 Effect of Modifications of National Account Contracts.
No extension, renewal, revision, modification or amendment of any of the
National Account Contracts shall have the effect of increasing the obligations
of Pioneer under this Agreement.
ARTICLE V
PRICE
SECTION 5.1 Prices of Chlorine and Caustic Soda.
(a) Each calendar quarter during the Term, the price, FOB Tacoma,
of chlorine sold by Pioneer to OxyChem hereunder, expressed in dollars per
short ton, shall be an amount equal to ninety-five percent (95%) of the
weighted average price, net of freight charges paid by OxyChem, at which
OxyChem sells chlorine to the National Accounts pursuant to the National
Account Contracts. The weighted average price calculation for each calendar
quarter will use the prices in effect pursuant to each of the National Account
Contracts during the immediately preceding calendar quarter. Upon the date
specified in Appendix E for each National Account Contract or the earlier
termination of a National Account Contract, the volume and price associated
with such National Account Contract will be excluded from the calculation of
the Price of chlorine.
(b) Each calendar quarter during the Term, the price, FOB Tacoma,
of caustic soda sold by pioneer to OxyChem hereunder, expressed in dollars per
dry short ton, shall be an amount equal to ninety-five percent (95%) of the
weighted average price, net of freight and throughput charges paid by OxyChem,
at which OxyChem sells caustic soda to the National Accounts pursuant to the
National Account Contracts. The weighted average price calculation for each
calendar quarter will use the prices in effect pursuant to each of the National
Account Contracts during the immediately preceding calendar quarter. Upon the
date specified in Appendix E for each National Account Contract or the earlier
termination of a National Account Contract, the volume and price associated with
such National Account Contract will be excluded from the calculation of the
Price of caustic soda.
SECTION 5.2 Notification of the Price; OxyChem's Payment.
(a) Not later than the twentieth (20th) day of the first month of
each calendar quarter during the Term (other than initial calendar quarter),
OxyChem shall provide to Pioneer in writing
6
<PAGE> 12
the Prices, calculated as provided in Section 5.1, which will be applicable to
chlorine and caustic soda to be delivered pursuant to the provisions of this
Agreement during such calendar quarter. At all times during the Term, Pioneer
shall take such measures, and implement and utilize such procedures, as will
ensure that access to the Prices applicable to chlorine and caustic soda sold
to OxyChem pursuant to this Agreement(i) will be limited to employees of
Pioneer who have a need to know such information for the purpose of discharging
Pioneer's financial and accounting obligations, and (ii) will not be provided
to (A) any personnel of Pioneer or any of its Affiliates who exercise any
pricing, sales or marketing responsibilities for, or on behalf of, Pioneer or
any such Affiliate, or (B) any director, officer or employee of Pioneer or any
such Affiliates who does not have a need to know such Prices for the purpose of
discharging Pioneer's financial and accounting obligations.
(b) The foregoing obligations of confidence, nondisclosure and non-use
shall not apply to any information that (i) was in the public domain at the
time of disclosure by OxyChem or any of its Affiliates to Pioneer; (ii) enters
the public domain through no fault of Pioneer; (iii) was communicated to
Pioneer by any other Person free of any obligation of confidence; or (iv) was
developed by officers, employees or agents of or consultants to Pioneer
independently of and without reference to the proprietary information of
OxyChem. Information, including, without limitation, the Price of chlorine and
caustic soda sold hereunder, shall not be deemed to be within the public domain,
or communicated free of any obligation of confidence, for purposes of the
provisions of this paragraph simply because it is known by one or more of the
National Accounts in the course of performing the National Account Contracts.
(c) The Price of chlorine which shall be in effect for the initial
calendar quarter, or portion thereof if this Agreement is not effective as of
the first day of the initial calendar quarter, shall be calculated as provided
in Section 5.1, using the prices in effect pursuant to the National Account
Contracts during the calendar quarter immediately preceding the calendar
quarter in which this Agreement shall become effective.
(d) The Price of caustic soda which shall be in effect for the initial
calendar quarter, or portion thereof if this Agreement is not effective as of
the first day of the initial calendar quarter, shall be calculated as provided
in Section 5.1, using the prices in effect pursuant to the National Account
Contracts during the calendar quarter immediately preceding the calendar quarter
in which this Agreement shall become effective.
(e) Pioneer shall invoice OxyChem for each shipment of chlorine and
caustic soda delivered. The prices reflected in the invoice shall be
determined as of the date of shipment and shall be the Prices for chlorine and
caustic soda designated by OxyChem for the then current calendar quarter.
Payment terms for Pioneer's invoice shall be net thirty (30) days from the date
of the applicable invoice with OxyChem to pay interest (not to exceed the
maximum lawful rate) on any amounts past due in accordance with Pioneer's
standard terms and conditions for like customers, a copy of which is attached
as Appendix G to this Agreement. Shipments made in a calendar quarter prior to
OxyChem's notification of Price pursuant to Section 5.2(a) shall be
7
<PAGE> 13
invoiced at the price applicable to shipments during the prior calendar
quarter. Within five (5) days after receipt of such notice from OxyChem, Pioneer
shall send a statement to OxyChem reflecting any adjustments to invoices which
are necessary to conform to the Price for the then current quarter. All amounts
due as shown by such statement shall be reflected in Pioneer's invoices for
next succeeding shipments hereunder. In the case of the invoice for the last
month of this Agreement, the obligations of the Parties to make the adjustments
required by the provisions of this paragraph shall survive the expiration or
other termination of this Agreement and such adjustments, if any, to the
invoice for the last month of this Agreement shall be paid by either Party, as
the case may be, within twenty (20) days of the issuance of Pioneer's statement.
SECTION 5.3 Pioneer's Right to Audit. Within sixty (60) days following
any quarterly notification by OxyChem of the Price pursuant to the provisions
of Section 5.2, or otherwise in connection with any question or dispute
concerning (i) any quantities of chlorine or caustic soda to be supplied by
Pioneer pursuant to the provisions of this Agreement, or (ii) any of the terms
of any of the National Account Contracts, and, upon not less than fifteen (15)
days notice in advance by Pioneer, OxyChem shall permit the Oxy Accountant to
have access to and examine OxyChem's books and records sufficient to permit the
verification of the weighted average price calculation in effect during such
calendar quarter, the quantities of chlorine or caustic soda to be supplied by
Pioneer pursuant to the provisions of this Agreement, or the applicable terms
of any such National Account Contract, as the case may be. The Oxy Accountant
shall report to Pioneer its conclusion concerning the accuracy of OxyChem's
calculation of the foregoing items, and, if inaccurate, what the Oxy Accountant
considers to be a correct adjustment. OxyChem shall instruct the Oxy Accountant
not to disclose any additional information to Pioneer. The reasonable cost of
such audit shall be borne by Pioneer, provided, however, that, if any such audit
results in a finding that an adjustment of more than one percent (1%) to the
Price of chlorine or caustic soda or to the quantities of chlorine or caustic
soda to be so supplied by Pioneer is required to comply with the provisions of
this Agreement, then the cost of such audit shall be borne by OxyChem.
ARTICLE VI
DELIVERY
SECTION 6.1 Shipping Instructions.
(a) Fifteen (15) days prior to the first day of each month (other
than the initial month of the Term), OxyChem shall furnish to Pioneer, in
writing, non-binding shipping instructions for each National Account which
shall include an estimate of the quantities of chlorine and caustic soda
required for (including a separate line item for any amounts subject to change
under the relevant National Account Contract), and the delivery point and,
pursuant to Section 6.3, the freight arrangements for shipments from the Tacoma
Plant, or such other shipping point as the Parties may agree, to, each National
Account during each of the next three months. Such instructions and estimates
for the month immediately following such notice shall be considered final
unless revised by OxyChem during the fifteen day period as well as during the
delivery month
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<PAGE> 14
and resulting from changes in the requirements of a National Account permitted
under the terms of the relevant National Account Contract and this Agreement, in
which case such revised quantities shall be final.
(b) The quantifies of chlorine and caustic soda required for, and the
delivery points and, pursuant to Section 6.3, the freight arrangements for
shipments to, each of the National Accounts for the initial month of the Term
are specified in Appendix H to this Agreement.
(c) In connection with shipments to each of the National Accounts,
Pioneer shall comply with the delivery performance standards specified for such
National Account in Appendix I to this Agreement.
SECTION 6.2 Title and Risk of Loss. Title and risk of loss of
chlorine and caustic soda delivered to the National Accounts shall pass from
Pioneer to the relevant National Account as provided in the relevant National
Account Contract.
SECTION 6.3 Transportation Costs. For chlorine and caustic soda
shipped by Pioneer from the Tacoma Plant, or any other shipping point as the
Parties may agree, to the National Account delivery locations, in addition to
the Price for such chlorine and caustic soda, OxyChem shall be responsible for
the actual freight from the shipping point for such chlorine and caustic soda
to the National Account delivery location and any agreed upon throughput cost
incurred in shipping such caustic soda, if any. OxyChem may, at its sole
option, and upon five (5) business days' prior notice, elect (a) to require
Pioneer to ship chlorine or caustic soda on a freight prepaid and collect
basis, or (b) to arrange directly with the provider of transportation services
for the shipment of such chlorine or caustic soda. In the case of clause (a)
above, the freight costs shall be added to Pioneer's invoice for chlorine and
caustic soda and such invoice shall be paid by OxyChem as provided in Section
5.2. In the case of clause (b) above, OxyChem shall be responsible to pay the
applicable transportation charges directly to the transportation service
provider and Pioneer shall have no liability for such costs. Pioneer and
OxyChem shall cooperate in exercising reasonable commercial efforts to reduce
net transportation costs.
SECTION 6.4 OxyChem's Right to Audit Certain Transportation Charges.
Within sixty (60) days following the receipt of any invoice from Pioneer which
includes transportation charges to be reimbursed by OxyChem pursuant to Section
6.3(a), and upon not less than fifteen (15) days' prior notice by OxyChem,
Pioneer shall permit the Pioneer Accountant to have access to and examine
Pioneer's books and records sufficient to permit the verification of the
transportation charges reflected on such invoice. The Pioneer Accountant shall
report to OxyChem its conclusion concerning the accuracy of Pioneer's invoice
in respect of such transportation charges, and, if inaccurate, what the
Accountant considers to be a correct adjustment. Pioneer shall instruct the
Pioneer Accountant not to disclose any additional information to OxyChem. The
reasonable cost of such audit shall be borne by OxyChem, provided, however,
that, if any such audit results in a finding that an adjustment of more than
one percent (1%) to the invoice in
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respect of such transportation charges is required to comply with the
provisions of Section 6.3, then the cost of such audit shall be borne by
Pioneer.
ARTICLE VII
MEASUREMENT
SECTION 7.1 Rail Car Delivery.
(a) If chlorine and caustic soda is delivered in rail tank cars
loaded at the Tacoma Plant, the quantity of chlorine and caustic soda shall be
determined by rail tank car weigh scales or other mutually agreed measuring
device which shall be operated, maintained and regularly calibrated by Pioneer
in accordance with accepted industry practice. Pioneer's weights and measures
shall govern except in case of demonstrated error.
(b) If chlorine and caustic soda is delivered in rail tank cars
loaded by a third party, the quantity of chlorine and caustic soda so delivered
shall be determined by rail tank car weigh scales or other measuring device
employed in connection with the loading of such rail cars in accordance with
accepted industry practice. Third party weights and measures shall govern
except in case of demonstrated error.
SECTION 7.2 Calibration of Measuring Devices.
(a) In respect of any chlorine and caustic soda delivered
hereunder the quantity of which is measured by devices operated by Pioneer,
Pioneer shall give OxyChem at least three (3) days' prior notice of any
calibration test to be performed on any such device, and OxyChem may elect to
have a representative present at any such test. If a level of inaccuracy is
determined by such test at plus or minus one percent (1%) or more of full
scale, Pioneer shall restore the measuring device to a condition of accuracy,
and billings shall be corrected for any shipment(s) known to be affected by
such inaccuracy.
(b) In respect of any chlorine and caustic soda delivered
hereunder the quantity of which is measured by devices operated by a third
party, Pioneer shall exercise reasonable commercial efforts to afford to
OxyChem (i) at least (3) days' prior notice of any calibration test (of which
Pioneer has advance knowledge) to be performed on any such device, and (ii) an
opportunity for OxyChem to have a representative present at any such test. If a
level of inaccuracy is determined by such test at plus or minus one percent
(1%) or more of full scale, Pioneer's billings to OxyChem shall be corrected
for any shipment(s) known to be affected by such inaccuracy.
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<PAGE> 16
ARTICLE VIII
WARRANTIES; LIMITATIONS OF CLAIMS
SECTION 8.1 Pioneer's Warranty. PIONEER'S SOLE AND EXCLUSIVE
WARRANTY IS THAT THE CHLORINE AND CAUSTIC SODA COMPLIES WITH THE PHYSICAL AND
CHEMICAL SPECIFICATIONS SET FORTH IN APPENDIX A AND APPENDIX B TO THIS
AGREEMENT. PIONEER MAKES NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED,
WHETHER WITH RESPECT TO ITS RECOMMENDATIONS, INSTRUCTIONS, PRODUCT APPARATUS,
PROCESS OR OTHERWISE AND SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES, WHETHER
OF MERCHANTABILITY, SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE.
SECTION 8.2 Patents. Pioneer's recommendations or instructions
pursuant to this Agreement are not intended to suggest operations which would
infringe any patents, and Pioneer assumes no liability to OxyChem of any kind
or responsibility for any such infringement pursuant to this Agreement.
SECTION 8.3 Packaging, Uses and Safe Handling. Pioneer shall
properly package and label chlorine and caustic soda for shipment pursuant to
applicable statutes, rules and regulations,
SECTION 8.4 Emergency Response. During the Term of this Agreement,
Pioneer shall maintain and implement emergency response procedures which are in
accordance with the requirements of applicable statutes, rules and regulations
governing the transportation and unloading of chlorine and caustic soda or, if
more stringent, standards representing current prudent industry practice for
the transportation and unloading of chlorine and caustic soda, in order to
respond to (a) a release or threatened release of chlorine or caustic soda
en route to the National Account delivery locations pursuant to this Agreement,
and (b) a release or threatened release of chlorine or caustic soda occurring
during the process of unloading chlorine or caustic soda at the National
Account delivery locations pursuant to this Agreement (other than any delivery
point owned or operated by OxyChem or its Affiliates) and which is attributable
to any defect in the vehicle or vessel used to deliver such chlorine or caustic
soda.
SECTION 8.5 Quality Claims; Liability. OxyChem shall be deemed to
have waived all claims with respect to the quality of any chlorine and caustic
soda sold hereunder for which OxyChem's notice of insufficient quality has not
been given to Pioneer in writing within forty-five (45) days of the receipt of
such chlorine or caustic soda at the National Account delivery location. As to
any claim of any nature with respect to the quality of chlorine or caustic soda
sold under this Agreement, whether in contract, tort, strict liability or
otherwise, the liability of Pioneer and its affiliates shall not exceed the
Price of the portion of the chlorine and caustic soda in respect of which such
claim is made plus any transportation charges thereon paid by OxyChem.
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ARTICLE IX
TAXES
SECTION 9.1 Responsibility for Taxes. In addition to the Price and any
transportation costs OxyChem is required to pay to Pioneer hereunder, OxyChem
shall pay to Pioneer the amount of all governmental taxes, excises, duties,
and/or other charges (including, without limitation, Superfund Assessments, and
excepting (i) taxes (and any interest, additions to tax or penalties imposed in
connection therewith) on or measured by Pioneer's net income, gross receipts,
profits, net worth, shareholder's capital, net taxable capital, net taxable
earned surplus, or asset value, and (ii) any taxes (and any interest, additions
to tax or penalties imposed in connection therewith) imposed on or in respect
of equipment used to produce or transport chlorine or caustic soda) that
Pioneer may be required to pay with respect to the sale or transportation of
the quantities of chlorine and caustic soda sold and delivered hereunder and
which are standard in the industry and generally applicable to other purchasers
of chlorine and caustic soda. Such charges shall be added to Pioneer's invoice
as a separate line item and shall be paid by OxyChem pursuant to Section 5.2,
provided that Pioneer furnishes to OxyChem satisfactory evidence of the amount
and timely payment of any such charges. Pioneer and OxyChem will cooperate so
as to minimize any sales and use taxes imposed by any state or local
governmental authority including, without limitation, the prompt execution and
delivery of any necessary exemption certificates required to reduce or claim
complete exemption from any tax.
ARTICLE X
LIABILITY AND RESPONSIBILITY
SECTION 10.1 Allocation of Liability.
(a) Except to the extent caused by any breach of OxyChem's
obligations hereunder, any act or omission of OxyChem, its agents or
contractors, or any condition, event or action occurring after the time title
and risk of loss passes pursuant to the provisions of Section 6.2 which is
caused by any Person other than Pioneer, Pioneer assumes full responsibility
for any liability arising out of or in connection with chlorine and caustic
soda sold hereunder and compliance or non-compliance with any law or
regulations relating thereto, including, without limitation, laws or
regulations with respect to the protection of health, safety and the
environment, including, but not limited to, liability attributable to any
defect in the vehicle or vessel used to deliver such chlorine or caustic soda.
With respect to matters for which Pioneer is liable under the preceding
sentence, Pioneer shall defend, indemnify and hold harmless OxyChem, its
Affiliates and their respective officers, directors, representatives and
employees from and against all losses, liabilities, damages, costs and expenses
("Losses") made against or incurred by OxyChem, its Affiliates or their
respective officers, directors, representatives and employees arising out of
any claim, suit or proceeding ("Claim") by any governmental agency or any third
party which alleges death, personal or economic injury, or damages to, or
spills or releases on or into, any private or public property, resources or the
environment, to the extent caused or contributed to by chlorine or caustic soda
sold hereunder.
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<PAGE> 18
(b) Except to the extent caused by any breach of Pioneer's
obligations hereunder, any act or omission of Pioneer, its agents or
contractors, or any condition, event or action occurring prior to the time
title and risk of loss passes pursuant to Section 6.2 which is caused by any
Person other than OxyChem, OxyChem assumes full responsibility for any
liability arising out of or in connection with chlorine and caustic soda sold
hereunder and compliance or non-compliance with any law or regulations relating
thereto, including, without limitation, laws or regulations with respect to the
protection of health, safety and the environment, provided, however, that
OxyChem shall have no responsibility for any liability in connection with the
unloading of any chlorine or caustic soda sold hereunder which is attributable
to any defect in the vehicle or vessel used to deliver such chlorine. With
respect to matters for which OxyChem is liable under the preceding sentence,
OxyChem shall defend, indemnify and hold harmless Pioneer, its Affiliates and
their respective officers, directors, representatives and employees from and
against all Losses made against or incurred by Pioneer, its Affiliates or their
respective officers, directors, representatives and employees arising out of
any Claim by any governmental agency or any third party which alleges death,
personal or economic injury, or damages to, or spills or releases on or into,
any private or public property, resources or the environment, to the extent
caused or contributed to by chlorine or caustic soda sold hereunder.
(c) Nether Party shall be liable for claims of the employees,
contractors or agents of the other Party who are subject to workers'
compensation laws. Notwithstanding anything to the contrary herein, neither
Party shall be responsible for protection of the employees, agents or
contractors of the other Party or liable for any failure to provide such
protection, including, without limitation, compliance with occupational safety
laws, except that Pioneer shall comply with safety rules in effect at the
National Account delivery locations of which Pioneer has knowledge.
SECTION 10.2 Procedures for Indemnification.
(a) Promptly (and in any event within thirty (30) days) after a
Party or Parties to be indemnified (whether one or more, the "Indemnified
Party") receives notice of any Claim covered by Section 10.1, the Indemnified
Party shall, if a Claim in respect thereof is to be made pursuant to Section
10.1, notify the Party from whom indemnification is sought (the "Indemnifying
Party") of such Claim; provided, however, that the failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
which it may have to the Indemnified Party pursuant to Section 10.1, except to
the extent of any material detriment suffered by the Indemnifying Party as a
result of such failure. The amount of each Claim for indemnity, together with
a list identifying each separate item of Loss to the extent known, shall be set
forth in the Claim notice delivered to the Indemnifying Party. In the event
that a Claim arises out of, or results from, Claims of third parties, the
Indemnifying Party may at its option undertake the defense thereof by counsel
or representatives chosen by it which are reasonably acceptable to the
Indemnified Party. The Indemnifying Party shall have the sole right to
compromise or settle any such Claim if (i) such settlement or disposition shall
impose no material obligation or burden
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<PAGE> 19
whatsoever on the Indemnified Party which is not wholly discharged by the
Indemnifying Party and shall provide a full release to the Indemnified Party,
and (ii) the Indemnifying Party shall be fully capable of performing its
obligations pursuant to such settlement or disposition. Each of the
Indemnifying Party and the Indemnified Party shall be entitled to consult with
each other, to the extent it reasonably requests, in respect of the defense of
such Claim and shall cooperate in the defense of any such Claim, including
making its officers, directors, employees and books and records (other than any
National Account Contract) available for use in defending against such Claim,
and it shall take such commercially reasonable actions within its power which
are necessary to preserve any legal defenses to such matters.
(b) If the Indemnifying Party, within a reasonable time after
notice of any third party Claim, fails to undertake the defense of such Claim,
the Indemnified Party will, by notice to the Indemnifying Party of its intent to
do so, have the right to undertake the defense of such Claim with counsel or
representatives chosen by it which are reasonably acceptable to the
Indemnifying Party. The Losses of the Indemnified Party shall include the
reasonable costs and expenses incurred in any such defense of a third party's
Claim. Notwithstanding the foregoing, the Indemnified Party shall have no right
to settle or to compromise any such Claim without the prior written consent of
the Indemnifying Party, which consent shall not be unreasonably withheld.
ARTICLE XI
EXCUSE OF PERFORMANCE
SECTION 11.1 Excuse of Performance.
(a) Performance of any obligation under this Agreement may be
suspended by either Party without liability, to the extent that: an Act of God;
war; riot; fire; explosion; accident; flood; sabotage; mechanical breakdown;
involuntary plant shutdown; governmental laws, regulations or orders; or any
other cause (except financial) beyond the reasonable control of such Party,
including, without limitation, any refusal or inability of any National Account
to perform its obligations under any National Account Contract; or any labor
trouble, strike, walkout, lockout or injunction (whether or not such labor
event is within the reasonable control of such Party), delays, prevents,
restricts, or limits the performance of, this Agreement or the consumption,
sale or use of chlorine and caustic soda. The affected Party may invoke this
provision by promptly notifying the other party in writing of the nature and
estimated duration of the suspension period and shall exercise all reasonable
diligence in curing such condition.
(b) In the event that either Party exercises its right to suspend
performance hereunder, the Term of this Agreement and the obligations of the
Parties to purchase and sell chlorine and caustic soda hereunder allocable to
such period that performance is suspended shall be extended, to the extent
consistent with the National Account Contracts, one day for each day of such
suspension provided that the suspension shall not exceed 30 days. In the event
that such suspension is greater than 30 days but less than 180 days, this
Agreement shall remain in effect with the obligations of the Parties to
purchase and sell chlorine or caustic soda hereunder
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<PAGE> 20
suspended and the amount of chlorine and caustic soda which otherwise would have
been delivered during the period of suspension deducted from the obligations
contained herein to purchase and sell. If any suspension lasts more than 180
days, either Party may terminate this Agreement by providing the other Party
written notice of its intent to terminate.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Default and Remedies.
(a) In the event that: (i) OxyChem shall fail to pay any invoice in
accordance with the terms of this Agreement, or (ii) any Party shall fail, in
any material respect, in the due performance or observance by it of any of the
terms, covenants or agreements contained in this Agreement, or (iii) any Party
shall become or be adjudicated insolvent, bankrupt, or if a receiver or trustee
shall be appointed for any Party or its property or a petition for
reorganization or arrangement under any bankruptcy or insolvency law shall be
approved, or an assignment shall be made for the benefit of creditors of any
Party, or any Party shall file a voluntary petition of bankruptcy or shall
consent to the appointment of a receiver or trustee, this Agreement shall, in
the case of a default under clause (iii), immediately terminate, and in the
case of a default under clause (i) or (ii), the non-defaulting Party shall have
the right, at its sole discretion, to terminate this Agreement if the
defaulting Party shall have failed to (A) cure the default within twenty (20)
days of written notice of default, or (B) except in the case of a default
under clause (i), diligently pursue the curing of the default, which
termination remedy shall be in addition to all of its remedies at law or in
equity, including, without limitation, those set forth in Section 12.1(c) to
recover damages by reason of such default. In the event of any such
termination, all sums owing or to become due and owing by any Party under this
Agreement shall become and be immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived
by the Parties.
(b) In the event that, with respect to any National Account
Contract, Pioneer shall fail, in any material respect, in the due performance
or observance by it of the performance standards specified in Section 6.1(c),
in addition to the remedies provided for in clause (a) above, OxyChem may, upon
notice to Pioneer and failure by Pioneer within thirty (30) days following such
notice to correct any deficiency or if the matter is not such that it can be
corrected in such period, to commence and diligently pursue thereafter steps
necessary to correct any deficiency as promptly as possible, remove such
National Account Contract from this Agreement, and, upon any such removal, such
National Account Contract shall no longer be a National Account Contract
subject to the provisions of this Agreement.
(c) The Parties agree that the convenants and obligations contained
in this Agreement relate to special, unique and extraordinary matters and that
a violation of any of the terms hereof would cause irreparable injury in an
amount which would be difficult or impossible to estimate or determine and for
which any remedy at law would be inadequate. As such, the parties agree that,
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if either Party fails or refuses to fulfill any of its obligations under this
Agreement or to make any payment hereunder, then the other Party shall have the
remedy of specific performance, which remedy shall be cumulative and
nonexclusive and shall be in addition to any other rights and remedies
otherwise available at law or in equity and to which such Party might be
entitled.
SECTION 12.2 Certain Damages Excluded. In no event shall either Party
to this Agreement, or its Affiliates, have any liability to the other Party, or
its Affiliates, for any (i) loss of business opportunities or for speculative
or prospective profits, or (ii) special, indirect, consequential, incidental
or punitive damages, provided, however, that in the event of any breach or
failure by OxyChem to take and purchase the quantities of chlorine and caustic
soda provided for hereunder, Pioneer shall be entitled to recover the
difference, if any, between amounts realized from any sale in mitigation of
damages resulting from such breach or failure in performance by OxyChem and the
amount that would have been realized by Pioneer but for such breach or failure
in performance by OxyChem, plus freight costs and throughput charges, if any,
actually incurred by Pioneer and which otherwise would have been payable by
OxyChem pursuant to the provisions of this Agreement.
SECTION 12.3 Duty to Mitigate. Each Party shall take all such
reasonable actions as may be necessary to mitigate damages for which such Party
may claim damages or indemnification under this Agreement, provided, however,
that in no event shall Pioneer be obligated to sell and deliver chlorine or
caustic soda committed for but not taken and purchased by OxyChem to other than
delivery points east of the Rocky Mountains.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Parties and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, by operation of
law or otherwise (other than as a result of any merger or consolidation), by
any Party without the prior express written consent of the other Party;
provided, however, that, notwithstanding the foregoing, (i), in connection with
the sale of the Tacoma Plant as a whole, or any sale of the properties and
assets of any Party substantially as an entirety, to any Person, the Party
making such sale may assign this Agreement, or its rights hereunder, to such
Person, (ii) any Party may assign this Agreement, or its rights hereunder, to
any Affiliate of such Party, and (iii) Pioneer shall have the right to
collaterally assign its rights under this Agreement to any bank, financial
institution or other lender (or any such entity acting as an indenture trustee
on behalf of any Person) that provides financing in connection with (x) the
transactions contemplated by the Asset Purchase Agreement or any Related
Agreement (including any renewal, extension or rearrangement of such financing)
or (y) working capital financing for Facility Operations, provided, however,
that no such collateral assignment shall release, discharge or otherwise excuse
Pioneer from the performance of its obligations under this Agreement; provided,
further, that (A), in the case of any assignment referred to in clause (i) or
(ii) of this Section 13.1, prior to any such
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assignment, the Person to which such assignment shall be made shall expressly
assume, by an instrument in writing reasonably satisfactory to OxyChem or
Pioneer, as the case may be, executed and delivered to OxyChem or Pioneer, as
the case may be, the performance and observance of every obligation, covenant
and agreement in this Agreement on the part of the Party making such assignment
to be performed or observed, and (B) no such assignment shall have the effect
of releasing such Party or any other Person (including any such additional
Party) from its obligations, covenants or agreements under this Agreement.
SECTION 13.2 Entire Agreement; Amendment. This Agreement constitutes
the entire agreement of the Parties with respect to the subject matter hereof
and supersedes all prior understandings and agreements with respect thereto.
This Agreement may be amended, and any provision hereof waived, but only in
writing signed by the Party against whom such amendment or waiver is sought to
be enforced. No waiver by any Party of any default, misrepresentation or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by
virtue of any such occurrence. Neither the failure nor any delay by any Party in
exercising any right, power or privilege under this Agreement will operate as a
waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege will preclude any further or other exercise
of such right, power or privilege or the exercise of any other right, power or
privilege.
SECTION 13.3 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Sate of Washington, without
regard to principles of conflict of laws. The execution and delivery of this
Agreement shall be deemed to be the transaction of business within the State of
Washington for purposes of conferring jurisdiction upon courts located within
the State of Washington. The Parties agree that any court proceedings arising
out of this Agreement may be brought in the federal or state courts in the
State of Washington, and both Parties consent to the jurisdiction of such
courts. Each Party irrevocably waives (a) any objection which such Party may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of, or relating to, this Agreement brought in any such court, (b)
any claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum, and (c) the right to object, with
respect to any such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such Party. In addition,
any such suit, action or proceeding may be brought in any court having
jurisdiction pursuant to applicable law.
SECTION 13.4 Notices. Any notice or communication required or permitted
to be given pursuant to this Agreement shall be writing and sent by (i)
personal delivery (including courier service), (ii) telecopier to the number
indicated below, or (iii) first class or registered or certified mail, postage
prepaid and addressed as follows (any such notice or communication being deemed
given upon receipt).
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If to OxyChem for matters concerning caustic soda:
Occidental Chemical Corporation
5005 LBJ Freeway
Dallas, Texas 75244
Attention: Vice President - Caustic Soda
Telephone: 972-404-3820
Facsimile: 972-404-
If to OxyChem for matters concerning chlorine:
Occidental Chemical Corporation
5005 LBJ Freeway
Dallas, Texas 75244
Attention: Vice President - Chlorine
Telephone: 972-404-4195
Facsimile: 972-404-3406
If to Pioneer for matters concerning caustic soda or chlorine:
Pioneer Chlor Alkali Company, Inc.
700 Louisiana Street, Suite 4200
Houston, Texas 77002
Attention: Vice President - Sales and Marketing
Telephone: (713) 225-3831
Facsimile: (713) 225-4426
If to Pioneer for matters concerning other matters hereunder:
Pioneer Companies, Inc.
700 Louisiana Street, Suite 4200
Houston, Texas 77002
Attention: Vice President and General Counsel
Telephone: (713) 225-3831
Facsimile: (713) 225-9202
SECTION 13.5 Competition; Access to National Account Contracts.
Nothing set forth in this Agreement shall prevent either Party or any of its
Affiliates from competing with the other Party or any of its Affiliates in the
sale of chlorine or caustic soda to any of the National Accounts or to any
other Person. Except as specifically set forth in this Agreement, OxyChem
shall under no circumstance be obligated to deliver to Pioneer or any of its
Affiliates, or to disclose to Pioneer or any such Affiliate, any of the
provisions of any of the National Account Contracts.
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SECTION 13.6 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any jurisdiction.
SECTION 13.7 Headings. The Table of Contents set forth in, and the
descriptive headings of the several Articles and Sections of, this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
SECTION 13.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which when so executed shall be deemed an original,
but all of which together shall constitute one and the same instrument.
SECTION 13.9 Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event that any
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the Parties, and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Personal pronouns, when
used in this Agreement, whether in the masculine, feminine or neutral gender,
shall include all other genders, and the singular shall include the plural and
vice versa.
SECTION 13.10 Third Party Beneficiaries. NOTHING EXPRESSED OR
IMPLIED IN THIS AGREEMENT IS INTENDED, OR SHALL BE CONSTRUED, TO CONFER UPON OR
GIVE ANY PERSON OTHER THAN THE PARTIES HERETO AND THEIR SUCCESSORS AND
PERMITTED ASSIGNEES, ANY RIGHTS, REMEDIES OR OBLIGATIONS UNDER, OR BY REASON
OF, THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
SECTION 13.11 Payments. Any payments by, or on behalf of, the
Parties pursuant to any provisions of this Agreement shall be made by wire
transfer of immediately available funds to a bank account of the Party
receiving such payment at the bank used by such Party and each Party hereto
shall furnish to the other the name of its bank and the number of the account
thereat to which payments shall be directed.
SECTION 13.12 Incorporation of Appendices. The Appendices
identified in this Agreement are incorporated herein by reference and made a
part hereof.
[balance of this page intentionally left blank]
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IN WITNESS WHEREOF, the Parties have, by their duly authorized
representatives, signed this Chlorine and Caustic Soda Sales Agreement as of
the day and year first above written.
PIONEER CHLOR ALKALI COMPANY, INC.
By: /s/ PHILIP J. ABLOVE
--------------------------------
Name: Philip J. Ablove
Title: Vice President and Chief Financial Officer
OCCIDENTAL CHEMICAL CORPORATION
By: /s/ CHARLES L. MEARS
--------------------------------
Name: Charles L. Mears
Title: Executive Vice President
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<PAGE> 1
EXHIBIT 10.14
================================================================================
CHLORINE PURCHASE AGREEMENT
between
PIONEER CHLOR ALKALI COMPANY, INC.
and
OCC TACOMA, INC.
Dated as of June 17, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Number
-----------
Parties and Recitals
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
COMMITMENTS OF PURCHASE AND SALE
SECTION 2.1 Purchase Commitment . . . . . . . . . . . . . . . . . . . 3
SECTION 2.2 Sales Commitment . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
QUANTITY
SECTION 3.1 Pioneer's Annual Volume Options . . . . . . . . . . . . . 3
SECTION 3.2 OCC Tacoma's Annual Volume Options. . . . . . . . . . . . 4
SECTION 3.3 Notification of Annual Quantities . . . . . . . . . . . . 4
SECTION 3.4 Priority of Obligations Under this Agreement . . . . . . 5
ARTICLE IV
TERM
SECTION 4.1 Term of this Agreement . . . . . . . . . . . . . . . . . 6
ARTICLE V
PRICE
SECTION 5.1 Price of Chlorine . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.2 Notification of the Price; OCC Tacoma's Payment . . . . . 6
SECTION 5.3 Pioneer's Right to Audit . . . . . . . . . . . . . . . . 7
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C> <C>
ARTICLE VI
DELIVERY
SECTION 6.1 Shipping Instructions . . . . . . . . . . . . . . . . . . 7
SECTION 6.2 Title and Risk of Loss . . . . . . . . . . . . . . . . . 8
SECTION 6.3 Transportation Costs . . . . . . . . . . . . . . . . . . 8
SECTION 6.4 OCC Tacoma's Right to Audit Certain
Transportation Charges . . . . . . . . . . . . . . . . . 9
ARTICLE VII
MEASUREMENT
SECTION 7.1 Rail Car Delivery . . . . . . . . . . . . . . . . . . . . 9
SECTION 7.2 Calibration of Measuring Devices . . . . . . . . . . . . 10
ARTICLE VIII
WARRANTIES; LIMITATIONS OF CLAIMS
SECTION 8.1 Pioneer's Warranty . . . . . . . . . . . . . . . . . . . 10
SECTION 8.2 Patents . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 8.3 Packaging, Uses and Safe Handling . . . . . . . . . . . . 10
SECTION 8.4 Emergency Response . . . . . . . . . . . . . . . . . . . 11
SECTION 8.5 Quality Claims; Liability . . . . . . . . . . . . . . . . 11
ARTICLE IX
TAXES
SECTIONS 9.1 Responsibility for Taxes . . . . . . . . . . . . . . . . 11
ARTICLE X
LIABILITY AND RESPONSIBILITY
SECTION 10.1 Allocation of Liability . . . . . . . . . . . . . . . . . 12
SECTION 10.2 Procedures for Indemnification . . . . . . . . . . . . . 13
ARTICLE XI
EXCUSE OF PERFORMANCE
SECTION 11.1 Excuse of Performance . . . . . . . . . . . . . . . . . . 14
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C> <C>
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Default and Remedies . . . . . . . . . . . . . . . . . . 14
SECTION 12.2 Certain Damages Excluded . . . . . . . . . . . . . . . . 15
SECTION 12.3 Duty to Mitigate . . . . . . . . . . . . . . . . . . . . 15
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Successors and Assigns . . . . . . . . . . . . . . . . . 16
SECTION 13.2 Entire Agreement; Amendment . . . . . . . . . . . . . . . 16
SECTION 13.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 13.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 13.5 Severability . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13.6 Competition . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13.9 Construction . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13.10 Third Party Beneficiaries . . . . . . . . . . . . . . . . 18
SECTION 13.11 Payments . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13.12 Incorporation of Appendices . . . . . . . . . . . . . . . 18
</TABLE>
Appendix A
Appendix B
Appendix C
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<PAGE> 5
LIST OF APPENDICES
<TABLE>
<CAPTION>
APPENDIX DESCRIPTION
-------- -----------
<S> <C>
Appendix A Chlorine Specifications
Appendix B Initial Month Quantities and Shipping
Details
Appendix C Pioneer's Standard Terms and Conditions
</TABLE>
iv
<PAGE> 6
CHLORINE PURCHASE AGREEMENT
THIS CHLORINE PURCHASE AGREEMENT, dated as of the 17th day of June,
1997, is between OCC TACOMA, INC., a Delaware corporation, and PIONEER CHLOR
ALKALI COMPANY, INC., a Delaware corporation.
WHEREAS, pursuant to the Asset Purchase Agreement (as such term and
certain other terms used in this Agreement with the initial capital letters are
defined or incorporated by reference in Article I), the Parties have provided
for the sale by OCC Tacoma, and the purchase by Pioneer, of OCC Tacoma's
chloralkali manufacturing facility located at Tacoma, Washington; and
WHEREAS, after the sale of the Tacoma Plant to Pioneer, Pioneer desires
to sell and deliver to OCC Tacoma, and OCC Tacoma desires to take and pay for,
certain quantities of chlorine for a limited period of time; and
WHEREAS, OCC Tacoma is a wholly-owned subsidiary of OxyChem; and
WHEREAS, the Parties are entering into this Agreement in accordance
with the provisions of the Asset Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
benefits and agreements hereinafter set forth, the Parties do hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated below (such meanings to be equally applicable to both the singular
and the plural forms of the terms defined). Capitalized terms not otherwise
specifically defined herein shall have the meanings assigned to them in the
Asset Purchase Agreement.
"Affiliate" means any Person that is an "affiliate" within the meaning
of the regulations promulgated under the Securities Act of 1933, as amended,
as such regulations and Act shall be amended and in effect on the date of this
Agreement.
"Agreement" means this Chlorine Purchase Agreement, as the same may be
amended pursuant to the provisions hereof.
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<PAGE> 7
"Asset Purchase Agreement" means the Asset Purchase Agreement, dated as
of May 14, 1997, between OCC Tacoma and Pioneer.
"chlorine" means liquid chlorine having the specifications set forth in
Appendix A to this Agreement. All references to quantities of chlorine in this
Agreement shall be in units of short tons.
"Claim" has the meaning specified in Section 10.1.
"Delivery Points" has the meaning specified in Section 6.1(a).
"Indemnified Party" has the meaning specified in Section 10.2.
"Indemnifying Party" has the meaning specified in Section 10.2.
"Initial Year" means the twelve-month period of time beginning with the
first day of the month in which this Agreement shall become effective.
"Losses" has the meaning specified in Section 10.1.
"month" means a calendar month.
"OCC Tacoma" means OCC Tacoma, Inc., a Delaware corporation.
"Oxy Accountant" means Arthur Andersen LLP or such other nationally
recognized accounting firm as shall be selected by OxyChem.
"OxyChem" means Occidental Chemical Corporation, a New York
corporation.
"Party" means Pioneer or OCC Tacoma, as applicable, and "Parties" means
Pioneer and OCC Tacoma.
"Person" means any natural person, corporation, limited liability
company, partnership, group, joint venture, trust, association or other
business enterprise or organization or any government or agency or political
subdivision thereof or any other entity.
"Pioneer" means Pioneer Chlor Alkali Company, Inc., a Delaware
corporation.
"Pioneer Accountant" means Deloitte & Touche LLP or such other
nationally recognized accounting firm as shall be selected by Pioneer.
2
<PAGE> 8
"Price" means the price of chlorine determined in accordance with the
provisions of Article V.
"short ton" means two thousand (2000) pounds.
"Superfund Assessment" means the assessment on the production and sale
of chlorine imposed pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, as the same may be from time to time amended or
reauthorized and in effect.
"Tacoma Plant" means the chloralkali manufacturing facility acquired by
Pioneer pursuant to the Asset Purchase Agreement and located at 605 Alexander
Avenue, Tacoma, Washington.
"Term" has the meaning specified in Section 4.1.
"VCM" means vinyl chloride monomer.
"year" or "yearly" means the Initial Year and, thereafter, any
consecutive twelve-month period beginning on the first day of the month in
which this Agreement shall become effective.
ARTICLE II
COMMITMENTS OF PURCHASE AND SALE
SECTION 2.1 Purchase Commitment. Upon the terms and subject to the
conditions set forth in this Agreement, each year during the Term, OCC Tacoma
agrees to take and purchase from Pioneer the quantity of chlorine hereinafter
described and at the Price hereinafter set forth.
SECTION 2.2 Sales Commitment. Upon the terms and subject to the
conditions set forth in this Agreement, each year during the Term, Pioneer
agrees to deliver and sell to OCC Tacoma the quantity of chlorine hereinafter
described and at the Price hereinafter set forth.
ARTICLE III
QUANTITY
SECTION 3.1 Pioneer's Annual Volume Options. Subject to the
requirements of Section 3.3(a), during each year of the Term of this Agreement,
Pioneer may require OCC Tacoma to take and purchase from Pioneer all or any
portion of the quantity of chlorine specified below as applicable for that
year.
3
<PAGE> 9
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
YEAR INITIAL 2 3 4 5
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Volumes 100,000 100,000 75,000 50,000 25,000
(short tons)
</TABLE>
SECTION 3.2 OCC Tacoma's Annual Volume Options. Subject to the
requirements of Section 3.3(b), during each year of the Term of this Agreement,
OCC Tacoma may require Pioneer to deliver and sell to OCC Tacoma all or any
portion of the quantity of chlorine specified below as applicable for that
year.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
YEAR INITIAL 2 3 4 5
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Volumes 100,000 100,000 75,000 0 0
(short tons)
</TABLE>
SECTION 3.3 Notification of Annual Quantities.
(a) Not less than one hundred twenty (120) days prior to the end of
the Initial Year and year 2, Pioneer shall submit to OCC Tacoma, in writing, a
binding notification of the quantity of chlorine which Pioneer elects to
require OCC Tacoma to take and purchase from Pioneer, pursuant to Section 3.1,
during the following year. The quantity specified in such notice shall not
exceed the maximum quantity which Pioneer may elect to require OCC Tacoma to
take and purchase from Pioneer for such year as specified in Section 3.1. The
quantity which OCC Tacoma shall take and purchase from Pioneer in the Initial
Year shall be 100,000 short tons. With respect to the quantity of chlorine
which Pioneer elects to require OCC Tacoma to take and purchase from Pioneer,
pursuant to Section 3.1, during year 4 and year 5, Pioneer shall submit the
notices described below:
(i) Not later than September 30, 1999, Pioneer shall provide the
notice described in Section 3.3(a) with respect to the quantity of chlorine
which Pioneer elects to require OCC Tacoma to take and purchase from Pioneer,
pursuant to Section 3.1, during the period beginning on the first day of year 4
and ending on December 31 thereafter. The quantity of chlorine specified in
such notice shall not exceed an amount determined by multiplying 50,000 by a
fraction, the numerator of which is the number of days from the beginning of
year 4 to December 31 thereafter and the denominator of which is 365.
(ii) Not later than September 30, 2000, Pioneer shall provide the
notice described in Section 3.3(a) with respect to the quantity of chlorine
which Pioneer elects to require OCC Tacoma to take and purchase from Pioneer,
pursuant to Section 3.1, during the period (A) beginning on January 1, 2001 and
ending on the last day of year 4, and (B) beginning on the first day of year 5
and ending on December 31 thereafter. The quantities of chlorine specified in
such
4
<PAGE> 10
notice shall not exceed, in the case of (A) above, an amount determined by
multiplying 50,000 by a fraction, the numerator of which is the number of days
from January 1, 2001 to the last day of year 4 and the denominator of which is
365. The quantities of chlorine specified in such notice shall not exceed, in
the case of (B) above, an amount determined by multiplying 25,000 by a
fraction, the numerator of which is the number of days from the first day of
year 5 to December 31 thereafter and the denominator of which is 365.
(iii) Not later than September 30, 2001, Pioneer shall provide the
notice described in Section 3.3(a) with respect to the quantity of chlorine
which Pioneer elects to require OCC Tacoma to take and purchase from Pioneer,
pursuant to Section 3.1, during the period beginning on January 1, 2002 and
ending on the last day of year 5. The quantity of chlorine specified in such
notice shall not exceed an amount determined by multiplying 25,000 by a
fraction, the numerator of which is the number of days from January 1, 2002 to
the last day of year 5 and the denominator of which is 365.
(b) Not less than one hundred twenty (120) days prior to the end of the
Initial Year and year 2, OCC Tacoma shall submit to Pioneer, in writing, a
binding notification of the quantity of chlorine which OCC Tacoma elects to
require Pioneer to deliver and sell to OCC Tacoma, pursuant to Section 3.2,
during the following year. The quantity specified in such notice shall not
exceed the maximum quantity which OCC Tacoma may elect to require Pioneer to
deliver and sell to OCC Tacoma for such year as specified in Section 3.2. The
quantity which Pioneer shall deliver and sell to OCC Tacoma in the Initial Year
shall be 100,000 short tons.
(c) The quantities of chlorine nominated by each Party pursuant to the
provisions of Sections 3.3(a) and 3.3(b) for each of the two years which
succeed the Initial Year shall not be aggregated for purposes of determining
the total quantity of chlorine to be purchased and sold by the Parties during
any year. For any year (other than the Initial Year), the higher of such
quantity nominations shall constitute the total volume of chlorine to be
purchased and sold by the Parties for such year pursuant to this Agreement.
SECTION 3.4 Priority of Obligations Under this Agreement. The
obligations of the Parties to sell and purchase chlorine pursuant to this
Agreement shall have priority over the Parties' obligations to sell and
purchase chlorine to or from any other Person, whether pursuant to a written
agreement or otherwise (including, without limitation, the Parties' internal
requirements). Subject to Section 11.1, the Parties' rights and obligations to
purchase and sell chlorine pursuant to the provisions of this Agreement shall
not be subject to allocation among other customers, suppliers or the Parties'
internal requirements.
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<PAGE> 11
ARTICLE IV
TERM
SECTION 4.1 Term of this Agreement. The term (the "Term") of this
Agreement shall commence, and this Agreement shall become effective, on the
date of the Closing and shall terminate on the last day of the month prior to
the fifth anniversary of the Closing.
ARTICLE V
PRICE
SECTION 5.1 Price of Chlorine. Each calendar quarter during the Term,
the price (the "Price") of chlorine sold by Pioneer to OCC Tacoma hereunder,
expressed in dollars per short ton, shall be an amount equal to the weighted
average price (net of freight charges actually incurred and paid) per short
ton for all chlorine sold by OxyChem to non-Affiliate U.S. Gulf Coast contract
customers for the manufacture of VCM during the immediately preceding calendar
quarter. The Price of chlorine sold hereunder shall be determined as of the
date of shipment.
SECTION 5.2 Notification of the Price; Payment.
(a) Not later than the twentieth (20th) day of the first month of
each calendar quarter during the Term (other than the initial calendar quarter),
OCC Tacoma shall provide to Pioneer a written notification of the Price
applicable to chlorine during the preceding calendar quarter and which shall be
the Price applicable to chlorine sold to OCC Tacoma during the then current
calendar quarter pursuant to this Agreement. At all times during the Term,
Pioneer shall take such measures, and implement and utilize such procedures, as
will ensure that access to the Price applicable to chlorine sold to OCC Tacoma
pursuant to this Agreement (i) will be limited to employees of Pioneer who have
a need to know such information for the purpose of discharging Pioneer's
financial and accounting obligations, and (ii) will not be provided to (A) any
personnel of Pioneer or any of its Affiliates who exercise any pricing, sales or
marketing responsibilities for, or on behalf of, Pioneer or any such Affiliate,
or (B) any director, officer or employee of Pioneer or any such Affiliates who
does not have a need to know such Price for the purpose of discharging Pioneer's
financial and accounting obligations.
(b) The foregoing obligations of confidence, nondisclosure and
non-use shall not apply to any information that (i) was in the public domain at
the time of disclosure by OxyChem or any of its Affiliates to Pioneer; (ii)
enters the public domain through no fault of Pioneer; (iii) was communicated to
Pioneer by any other Person free of any obligation of confidence; or (iv) was
developed by officers, employees or agents of or consultants to Pioneer
independently of and without reference to the proprietary information of
OxyChem. The Price of chlorine sold hereunder, shall not be deemed to be within
the public domain, or communicated free of any obligation of confidence, for
purposes of the provisions of this paragraph simply because it is known by the
U.S. Gulf Coast contract customers of OCC Tacoma or OxyChem.
6
<PAGE> 12
(c) The Price of chlorine which shall be in effect for the initial
calendar quarter, or portion thereof if this Agreement is not effective as of
the first day of the initial calendar quarter, shall be determined as provided
in Section 5.1 above, using the Price applicable to chlorine during the
calendar quarter immediately preceding the calendar quarter in which this
Agreement shall become effective.
(d) Pioneer shall invoice OCC Tacoma on the date of shipment for
each shipment of chlorine delivered during the preceding month at the Price
specified by OCC Tacoma as applicable during such period pursuant to this
Article V. Payment terms for Pioneer's invoice shall be net thirty (30) days
from the date of the invoice with OCC Tacoma to pay interest (not to exceed the
maximum lawful rate) on any amounts past due in accordance with Pioneer's
standard terms and conditions for like customers, a copy of which is attached
as Appendix C to this Agreement. Shipments made in a calendar quarter prior to
OCC Tacoma's notification of Price pursuant to Section 5.2(a) shall be invoiced
at the Price applicable to shipments during the prior calendar quarter. Within
five (5) days after receipt of such notice from OCC Tacoma, Pioneer shall send
a statement to OCC Tacoma reflecting any adjustments to invoices which are
necessary to conform to the Price for the then current quarter. All amounts
due as shown by such statement shall be reflected in Pioneer's invoices for next
succeeding shipments hereunder.
SECTION 5.3 Pioneer's Right to Audit. Within sixty (60) days
following any quarterly notification by OCC Tacoma of the Price pursuant to the
provisions of Section 5.2, and upon not less than fifteen (15) days' notice in
advance by Pioneer, OCC Tacoma shall permit, and shall cause OxyChem to permit,
the Oxy Accountant to have access to and examine OCC Tacoma's and OxyChem's
books and records sufficient to permit the verification of the calculation of
the Price of chlorine in effect during such calendar quarter. The Oxy
Accountant shall report to Pioneer its conclusion concerning the accuracy of
OCC Tacoma's calculations of the foregoing items, and, if inaccurate, what the
Oxy Accountant considers to be a correct adjustment. OxyChem shall instruct
the Oxy Accountant not to disclose any additional information to Pioneer. The
reasonable cost of such audit shall be borne by Pioneer, provided, however,
that, if any such audit results in a finding that an adjustment of more than
one percent (1%) to the Price of chlorine is required to comply with the
provisions of Section 5.1, then the cost of such audit shall be borne by OCC
Tacoma.
ARTICLE VI
DELIVERY
SECTION 6.1 Shipping Instructions.
(a) Subject to the provisions of Section 11.1(a), all shipments of
chlorine hereunder shall be delivered by Pioneer from the Tacoma Plant, or such
other shipping point as the Parties may agree, to OxyChem's facility in
Ingleside, Texas, or such other locations as shall be mutually agreed by the
Parties (collectively, the "Delivery Points").
7
<PAGE> 13
(b) Fifteen (15) days prior to the first day of each month (other
than the initial month of the Term), OCC Tacoma shall furnish to Pioneer, in
writing, non-binding shipping instructions which shall include an estimate of
the quantities of chlorine to be shipped, and the Delivery Point for each
shipment, and, pursuant to Section 6.3, the freight arrangements for shipments,
during each of the next three months. Such instructions and estimates for the
month immediately following such notice shall be final.
(c) The quantities of chlorine to be shipped, and the Delivery Points
and, pursuant to Section 6.3, the freight arrangements for shipments during the
initial month of the Term are specified in Appendix B to this Agreement.
(d) Unless otherwise specifically agreed by the Parties, Pioneer
shall not be required to deliver, nor shall OCC Tacoma be required to receive,
during any month, more than one-tenth of the total quantity of chlorine to be
purchased and sold by the Parties during the then current year.
SECTION 6.2 Title and Risk of Loss. Title and risk of loss of any
chlorine delivered hereunder shall pass to OCC Tacoma upon actual placement by
the railroad at the Delivery Point of the tank car containing such chlorine.
SECTION 6.3 Transportation Costs.
(a) For each shipment of chlorine pursuant to this Agreement during
the Initial Year and the two consecutive years after the Initial Year, in
addition to the Price for such chlorine, OCC Tacoma shall be responsible for
the actual freight cost incurred in shipping such chlorine from the Tacoma
Plant, or such other shipping point as the Parties may agree, to the designated
Delivery Points. OCC Tacoma may, at its sole option, and upon five business
days' prior notice, elect (i) to require Pioneer to ship chlorine on a freight
prepaid and collect basis, or (ii) to arrange directly with a provider of
transportation services for the shipment of such chlorine. In the case of
clause (i) above, the freight costs shall be added to Pioneer's invoice for
chlorine and such invoice shall be paid by OCC Tacoma as provided in Section
5.2. In the case of clause (ii) above, OCC Tacoma shall be responsible to pay
the applicable transportation charges directly to the transportation service
provider and Pioneer shall have no liability for such costs.
(b) For each shipment of chlorine pursuant to this Agreement during
the fourth and fifth years of the Term, in addition to the Price for such
chlorine, OCC Tacoma shall be responsible for fifty percent (50%) of the actual
freight cost incurred in shipping such chlorine from the Tacoma Plant, or such
other shipping point as the Parties may agree, to the designated Delivery
Points and Pioneer shall be responsible for the remaining fifty percent (50%)
of such freight cost. OCC Tacoma may, at its sole option, and upon five
business days' prior notice, elect (i) to require Pioneer to ship chlorine on a
freight prepaid and collect basis, or (ii) to arrange directly with a provider
of transportation services for the shipment of such chlorine. In the case of
clause (i) above, fifty percent (50%) of the freight costs shall be added to
Pioneer's invoice for chlorine and such invoice shall be paid by OCC Tacoma as
provided in Section 5.2. In the case of
8
<PAGE> 14
clause (ii) above, OCC Tacoma shall be responsible to pay the applicable
transportation charges directly to the transportation service provider and
shall receive a credit of fifty percent (50%) of such transportation charges
against Pioneer's invoice with respect to such chlorine.
(c) OCC Tacoma shall pay any applicable rail car demurrage charges in
accordance with Pioneer's standard terms and conditions, attached as Appendix C
to this Agreement.
(d) Pioneer and OCC Tacoma shall cooperate in exercising reasonable
commercial efforts to reduce net transportation costs on shipments of chlorine
pursuant to this Agreement.
(e) Regardless of the manner in which freight costs are allocated in
this Agreement, all chlorine sold by Pioneer pursuant to this Agreement shall
be delivered in rail cars owned or leased by Pioneer. OCC Tacoma shall have no
responsibility to provide or otherwise to make rail cars available to Pioneer
for the shipment of chlorine pursuant to this Agreement, nor, except as
otherwise provided in this Agreement, for any cost or expense in connection
therewith.
SECTION 6.4 OCC Tacoma's Right to Audit Certain Transportation
Charges. Within sixty (60) days following the receipt of any invoice from
Pioneer which includes transportation charges to be reimbursed by OCC Tacoma
pursuant to Section 6.3(a)(i) or Section 6.3(b)(i), and upon not less than
fifteen (15) days' prior notice by OxyChem, Pioneer shall permit the Pioneer
Accountant to have access to and examine Pioneer's books and records sufficient
to permit the verification of the transportation charges reflected on such
invoice. The Pioneer Accountant shall report to OCC Tacoma its conclusion
concerning the accuracy of Pioneer's invoice in respect of such transportation
charges, and, if inaccurate, what the Pioneer Accountant considers to be a
correct adjustment. Pioneer shall instruct the Pioneer Accountant not to
disclose any additional information to OCC Tacoma. The reasonable cost of such
audit shall be borne by OCC Tacoma, provided, however, that if any such audit
results in a finding that an adjustment of more than one percent (1%) to the
invoice in respect of such transportation charges is required to comply with the
provisions of Section 6.3, then the cost of such audit shall be borne by
Pioneer.
ARTICLE VII
MEASUREMENT
SECTION 7.1 Rail Car Delivery.
(a) If chlorine is delivered in rail tank cars loaded at the Tacoma
Plant, the quantity of chlorine shall be determined by rail tank car weigh
scales or other mutually agreed measuring device which shall be operated,
maintained and regularly calibrated by Pioneer in accordance with accepted
industry practice. Pioneer's weights and measures shall govern except in case
of demonstrated error.
(b) If chlorine is delivered in rail tank cars loaded by a third
party, the quantity of chlorine so delivered shall be determined by rail tank
car weigh scales or other measuring device
9
<PAGE> 15
employed in connection with the loading of such rail cars in accordance with
accepted industry practice. Third party weights and measures shall govern
except in case of demonstrated error.
SECTION 7.2 Calibration of Measuring Devices.
(a) In respect of any chlorine delivered hereunder the quantity of
which is measured by devices operated by Pioneer, Pioneer shall give OCC Tacoma
at least three (3) days' prior notice of any calibration test to be performed
on any such device, and OCC Tacoma may elect to have a representative present
at any such test. If a level of inaccuracy is determined by such test at plus or
minus one percent (1%) or more of full scale, Pioneer shall restore the
measuring device to a condition of accuracy, and billings shall be corrected
for any shipment(s) known to be affected by such inaccuracy.
(b) In respect of any chlorine delivered hereunder the quantity of
which is measured by devices operated by a third party, Pioneer shall exercise
reasonable commercial efforts to afford to OCC Tacoma (i) at least (3) days'
prior notice of any calibration test (of which Pioneer has advance knowledge)
to be performed on any such device, and (ii) an opportunity for OCC Tacoma to
have a representative present at any such test. If a level of inaccuracy is
determined by such test at plus or minus one percent (1%) or more of full
scale, Pioneer's billings to OCC Tacoma shall be corrected for any shipment(s)
known to be affected by such inaccuracy.
ARTICLE VIII
WARRANTIES; LIMITATIONS OF CLAIMS
SECTION 8.1 Pioneer's Warranty. PIONEER'S SOLE AND EXCLUSIVE
WARRANTY IS THAT THE CHLORINE COMPLIES WITH THE PHYSICAL AND CHEMICAL
SPECIFICATIONS SET FORTH IN APPENDIX A TO THIS AGREEMENT. PIONEER MAKES NO
OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, WHETHER WITH RESPECT TO ITS
RECOMMENDATIONS, INSTRUCTIONS, PRODUCT APPARATUS, PROCESS OR OTHERWISE AND
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES, WHETHER OF MERCHANTABILITY,
SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE.
SECTION 8.2 Patents. Pioneer's recommendations or instructions
pursuant to this Agreement are not intended to suggest operations which would
infringe any patents, and Pioneer assumes no liability to OCC Tacoma of any
kind or responsibility for any such infringement pursuant to this Agreement.
SECTION 8.3 Packaging, Uses and Safe Handling. Pioneer shall
properly package and label chlorine for shipment pursuant to applicable
statutes, rules and regulations.
SECTION 8.4 Emergency Response. During the Term of this Agreement,
Pioneer shall maintain and implement emergency response procedures which are in
accordance with the requirements of applicable statutes, rules and regulations
governing the transportation and
10
<PAGE> 16
unloading of chlorine or, if more stringent, standards representing current
industry practice for the transportation and unloading of chlorine, in order to
respond to (a) a release or threatened release of chlorine en route to the
Delivery Points pursuant to this Agreement, and (b) a release or threatened
release of chlorine occurring during the process of unloading chlorine at the
Delivery Points pursuant to this Agreement (other than any Delivery Point owned
or operated by OxyChem or its Affiliates) and which is attributable to any
defect in the vehicle or vessel used to deliver such chlorine.
SECTION 8.5 Quality Claims; Liability. OCC Tacoma shall be deemed to
have waived all claims with respect to any chlorine sold hereunder for which
OCC Tacoma's notice of insufficient quality has not been given to Pioneer in
writing within forty-five (45) days of the receipt of such chlorine. As to any
claim of any nature with respect to the quality of chlorine sold under this
Agreement, whether in contract, tort, strict liability or otherwise, the
liability of Pioneer and its Affiliates shall not exceed the Price of the
portion of the chlorine in respect of which such claim is made plus any freight
costs or other transportation charges thereon paid by OCC Tacoma. Each such
claim shall also be subject to the limitations of Section 12.2.
ARTICLE IX
TAXES
SECTION 9.1 Responsibility for Taxes. In addition to the Price and any
transportation charges OCC Tacoma is required to pay to Pioneer hereunder, OCC
Tacoma shall pay to Pioneer the amount of all governmental taxes, excises,
duties, and/or other charges (including, without limitation, Superfund
Assessments, and excepting (i) taxes (and any interest, additions to tax or
penalties imposed in connection therewith) on or measured by Pioneer's net
income, gross receipts, profits, net worth, shareholder capital, net taxable
capital, net taxable earned surplus, or asset value, and (ii) any taxes (and
any interest, additions to tax or penalties imposed in connection therewith)
imposed on or in respect of equipment used to produce or transport chlorine)
that Pioneer may be required to pay with respect to the sale or transportation
of the quantities of chlorine sold and delivered hereunder and which are
standard in the industry and generally applicable to other purchasers of
chlorine. Such charges shall be added to Pioneer's invoice as a separate line
item and shall be paid by OCC Tacoma pursuant to Section 5.2, provided, that
Pioneer furnishes to OCC Tacoma satisfactory written evidence of the amount and
timely payment of such charges. Pioneer and OCC Tacoma will cooperate so as to
minimize any sales and use taxes imposed by any state or local governmental
authority including, without limitation, the prompt execution and delivery of
any necessary exemption certificates required to reduce or claim complete
exemption from any tax.
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<PAGE> 17
ARTICLE X
LIABILITY AND RESPONSIBILITY
SECTION 10.1 Allocation of Liability.
(a) Except to the extent caused by any breach of OCC Tacoma's
obligations hereunder, any act or omission of OCC Tacoma, its agents or
contractors, or any condition, event or action occurring after the time the tank
car is constructively or actually placed at the Delivery Point ("Delivery Time")
which is caused by any Person other than Pioneer, Pioneer assumes full
responsibility for any liability arising out of the manufacture, handling,
storage, loading, transportation and, to the extent attributable to any defect
in the vehicle or vessel used to deliver chlorine, the unloading of any chlorine
sold hereunder and compliance or non-compliance with any law or regulations
relating thereto, including, without limitation, laws or regulations with
respect to the protection of health, safety and the environment. With respect to
matters for which Pioneer is liable under the preceding sentence, Pioneer shall
defend, indemnify and hold harmless OCC Tacoma, its Affiliates, and their
respective officers, directors, representatives and employees from and against
all losses, liabilities, damages and expenses ("Losses") made against or
incurred by OCC Tacoma, its Affiliates, or their respective officers, directors,
representatives and employees arising out of any claim, suit or proceeding
("Claim") by any governmental agency or any third party which alleges death,
personal or economic injury, or damages to, or spills or releases on or into,
any private or public property, resources or the environment, to the extent
caused or contributed to by chlorine sold hereunder.
(b) Except to the extent caused by any breach of Pioneer's
obligations hereunder, any act or omission of Pioneer, its agents or
contractors, or any condition, event or action occurring prior to the Delivery
Time which is caused by any Person other than OCC Tacoma, OCC Tacoma assumes
full responsibility for any liability arising out of the handling, storage and
unloading of any chlorine sold hereunder and compliance or non-compliance with
any law or regulations relating thereto, including, without limitation, laws or
regulations with respect to the protection of health, safety and the
environment, provided, however, that OCC Tacoma shall have no responsibility for
any liability arising out of the unloading of any chlorine sold hereunder which
is attributable to any defect in the vehicle or vessel used to deliver such
chlorine. With respect to matters for which OCC Tacoma is liable under the
preceding sentence, OCC Tacoma shall defend, indemnify and hold harmless
Pioneer, its Affiliates, and their respective officers, directors,
representatives and employees from and against all Losses made against or
incurred by Pioneer, its Affiliates, or their respective officers, directors,
representatives and employees arising out of any Claim by any governmental
agency or any third party which alleges death, personal or economic injury, or
damages to, or spills or releases on or into, any private or public property,
resources or the environment, to the extent caused or contributed to by
chlorine sold hereunder.
(c) Neither Party shall be liable for claims of the employees,
contractors or agents of the other Party who are subject to workers'
compensation laws. Notwithstanding anything to the contrary herein, neither
Party shall be responsible for protection of the employees, agents or
12
<PAGE> 18
contractors of the other Party or liable for any failure to provide such
protection, including, without limitation, compliance with occupational safety
laws.
SECTION 10.2 Procedures for Indemnification.
(a) Promptly (and in any event within thirty (30) days) after a
Party or Parties to be indemnified (whether one or more, the "Indemnified
Party") receives notice of any Claim covered by Section 10.1, the Indemnified
Party shall, if a Claim in respect thereof is to be made pursuant to Section
10.1, notify the Party from whom indemnification is sought (the "Indemnifying
Party") in writing of such Claim; provided, however, that the failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party from any
liability which it may have to the Indemnified Party pursuant to Section
10.1, except to the extent of any material detriment suffered by the
Indemnifying Party as a result of such failure. The amount of each Claim for
indemnity, together with a list identifying each separate item of Loss to the
extent known, shall be set forth in the Claim notice delivered to the
Indemnifying Party. In the event that a Claim arises out of, or results from,
Claims of third parties, the Indemnifying Party may at its option undertake the
defense thereof by counsel or representatives chosen by it which are reasonably
acceptable to the Indemnified party. The Indemnifying Party shall have the sole
right to compromise or settle any such Claim if (i) such settlement or
disposition shall impose no material obligation or burden whatsoever on the
Indemnified Party which is not wholly discharged by the Indemnifying Party and
shall provide a full release to the Indemnified Party, and (ii) the
Indemnifying Party shall be fully capable of performing its obligations
pursuant to such settlement or disposition. Each of the Indemnifying Party and
the Indemnified Party shall be entitled to consult with each other, to the
extent it reasonably requests, in respect of the defense of such Claim and shall
cooperate in the defense of any such Claim, including making its officers,
directors, employees and books and records available for use in defending
against such Claim, and it shall take those commercially reasonable actions
within it power which are necessary to preserve any legal defenses to such
matters.
(b) If the Indemnifying Party, within a reasonable time after
notice of any third party Claim, fails to undertake the defense of such Claim,
the Indemnified Party will, by notice to the Indemnifying Party of its intent
to do so, have the right to undertake the defense of such Claim with counsel or
representatives chosen by it which are reasonably acceptable to the Indemnifying
Party. The Losses of the Indemnified Party shall include the reasonable costs
and expenses incurred in any such defense of a third party's Claim.
Notwithstanding the foregoing, the Indemnified Party shall have no right to
settle or compromise any such Claim without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld.
13
<PAGE> 19
ARTICLE XI
EXCUSE OF PERFORMANCE
SECTION 11.1 Excuse of Performance.
(a) Performance of any obligation under this Agreement may be
suspended by either Party without liability, to the extent that: an Act of God;
war; riot; fire; explosion; accident; flood; sabotage; mechanical breakdown;
involuntary plant shutdown; governmental laws, regulations or orders; or any
other cause (except financial) beyond the reasonable control of such Party; or
any labor trouble, strike, walkout, lockout or injunction (whether or not such
labor event is within the reasonable control of such Party), delays, prevents,
restricts, or limits the performance of, this Agreement or the consumption,
sale or use of chlorine, provided however, that if any of the foregoing events
shall delay, prevent, restrict or limit OCC Tacoma's ability to receive
chlorine at Ingleside, Texas, then for the first thirty days of any such period
of suspension, OCC Tacoma shall not be relieved of its obligations under this
Agreement to the extent that no such event delays, prevents, restricts or
limits the ability of OCC Tacoma or any of its Affiliates to receive chlorine
at any other State of Texas or Gulf Coast delivery point. The affected Party
may invoke this provision by promptly notifying the other Party in writing of
the nature and estimated duration of the suspension period and shall exercise
all reasonable diligence in curing such condition.
(b) In the event that either Party exercises its right to suspend
performance hereunder, the Term of this Agreement and the obligations of the
Parties to purchase and sell chlorine hereunder allocable to such period that
performance is suspended shall be extended one day for each day of such
suspension provided that the suspension shall not exceed 30 days. In the event
that such suspension is great than 30 days but less than 180 days, this
Agreement shall remain in effect with the obligations of the Parties to
purchase and sell chlorine hereunder suspended and an amount of chlorine
determined by multiplying the annual volume of chlorine to be delivered and
received in the year in which the suspension of performance occurs (as fixed
pursuant to Section 3.3) by a fraction, the numerator of which is the number of
days in which performance is suspended (less thirty days in the case of OCC
Tacoma) and the denominator of which is 365, deducted from the obligations
contained herein to purchase and sell. If any such suspension lasts more than
180 days, the Party as to whom performance of its obligations under this
Agreement has not been suspended may terminate this Agreement by providing the
other Party written notice of its intent to terminate.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Default and Remedies.
(a) In the event that: (i) OCC Tacoma shall fail to pay any invoice
in accordance with the terms of this Agreement, (ii) any Party shall fail, in
any material respect, in the due
14
<PAGE> 20
performance or observance by it of any of the terms, covenants or agreements
contained in this Agreement, or (iii) any Party shall become or be adjudicated
insolvent, bankrupt, or if a receiver or trustee shall be appointed for any
Party or its property or a petition for reorganization or arrangement under any
bankruptcy or insolvency law shall be approved, or an assignment shall be made
for the benefit of creditors of any Party, or any Party shall file a voluntary
petition in bankruptcy or shall consent to the appointment of a receiver or
trustee, this Agreement shall, in the case of a default under clause (iii),
immediately terminate, and in the case of a default under clause (i) or (ii),
the non-defaulting Party shall have the right, at its sole discretion, to
terminate this Agreement if the defaulting Party shall have failed to (A) cure
the default within twenty (20) days of written notice of default, or (B) except
in the case of a default under clause (i), diligently pursue the curing of the
default, which termination remedy shall be in addition to all of its remedies at
law or in equity, including, without limitation, those set forth in Section
12.1(b), to recover damages by reason of such default. In the event of any such
termination, all sums then owing by any Party under this Agreement shall become
and be immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived by the Parties.
(b) The Parties agree that the covenants and obligations contained
in this Agreement relate to special, unique and extraordinary matters and that
a violation of any of the terms hereof would cause irreparable injury in an
amount which would be difficult or impossible to estimate or determine and for
which any remedy at law would be inadequate. As such, the Parties agree that if
either Party fails or refuses to fulfill any of its obligations under this
Agreement or to make any payment hereunder, then the other Party shall have the
remedy of specific performance, which remedy shall be cumulative and
nonexclusive and shall be in addition to any other rights and remedies
otherwise available at law or in equity and to which such Party might be
entitled.
SECTION 12.2 Certain Damages Excluded. In no event shall either
Party to this Agreement, or its Affiliates, have any liability to the other
Party, or its Affiliates, for any (i) loss of business opportunities or for
speculative or prospective profits, or (ii) special, indirect, consequential,
incidental or punitive damages, provided, however, that in the event of any
breach or failure by OCC Tacoma to take and purchase the quantities of chlorine
provided for hereunder, Pioneer shall be entitled to recover the difference, if
any, between amounts realized from any sale in mitigation of damages resulting
form such breach or failure in performance by OCC Tacoma and the amount that
would have been realized by Pioneer but for such breach or failure in
performance by OCC Tacoma, plus freight costs actually incurred by Pioneer and
which otherwise would have been payable by OCC Tacoma pursuant to the
provisions of this Agreement.
SECTION 12.3 Duty to Mitigate. Each Party shall take all such
reasonable actions as may be necessary to mitigate damages for which such Party
may claim damages or indemnification under this Agreement, provided, however,
that in no event shall Pioneer be obligated to sell and deliver chlorine
committed for but not taken and purchased by OCC Tacoma to other than delivery
points east of the Rocky Mountains.
15
<PAGE> 21
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Parties and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, by operation of
law or otherwise (other than as a result of any merger or consolidation), by
any Party without the prior express written consent of the other Party;
provided, however, that, notwithstanding the foregoing, (i), in connection with
the sale of the Tacoma Plant as a whole, or any sale of the properties and
assets of any Party substantially as an entirety, to any Person, the Party
making such sale may assign this Agreement, or its rights hereunder, to such
Person, (ii) any Party may assign this Agreement, or its rights hereunder, to
any Affiliate of such Party, and (iii) Pioneer shall have the right to
collaterally assign its rights under this Agreement to any bank, financial
institution or other lender (or any such entity acting as an indenture trustee
on behalf of any Person) that provides financing in connection with (x) the
transactions contemplated by the Asset Purchase Agreement or any Related
Agreement (including any renewal, extension or rearrangement of such financing)
or (y) working capital financing for Facility Operations, provided, however,
that no such collateral assignment shall release, discharge or otherwise excuse
Pioneer from the performance of its obligations under this Agreement; provided,
further, that (A), in the case of any assignment referred to in clause (i) or
(ii) of this Section 13.1, prior to any such assignment, the Person to which
such assignment shall be made shall expressly assume, by an instrument in
writing reasonably satisfactory to OCC Tacoma or Pioneer, as the case may be,
executed and delivered to OCC Tacoma or Pioneer, as the case may be, the
performance and observance of every obligation, covenant and agreement in this
Agreement on the part of the Party making such assignment to be performed or
observed, and (B) no such assignment shall have the effect of releasing such
Party on any other Person (including any such additional Party) from its
obligations, covenants or agreements under this Agreement.
SECTION 13.2 Entire Agreement; Amendment. This Agreement embodies the
entire agreement of the Parties hereto with respect to the subject matter
hereof and supersedes all prior understandings and agreements with respect
thereto. This Agreement may be amended, and any provision hereof waived, but
only in writing signed by the Party against whom such amendment or waiver is
sought to be enforced. No waiver by any Party of any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any such occurrence. Neither
the failure nor any delay by any Party in exercising any right, power or
privilege under this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any further or other exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
SECTION 13.3 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Washington, without
regard to principles of conflict of
16
<PAGE> 22
laws. The execution and delivery of this Agreement shall be deemed to be the
transaction of business within the State of Washington for purposes of
conferring jurisdiction upon courts located within the State of Washington. The
Parties agree that any court proceedings arising out of this Agreement may be
brought in the federal or state courts in the State of Washington and both
Parties consent to the jurisdiction of such courts. Each Party irrevocably
waives (a) any objection which such Party may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of, or relating
to, this Agreement brought in any such court, (b) any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum, and (c) the right to object, with respect to any such
claim, suit, action or proceeding brought in any such court, that such court
does not have jurisdiction over such Party. In addition, any such suit, action
or proceeding may be brought in any court having jurisdiction pursuant to the
applicable law.
SECTION 13.4 Notices. Any notice or communication required or
permitted to be given pursuant to this Agreement shall be in writing and sent by
(i) personal delivery (including courier service), (ii) telecopier to the
number indicated below, or (iii) first class or registered or certified mail,
postage prepaid and addressed as follows (any such notice or communication
being deemed given upon receipt).
If to OCC Tacoma:
Occidental Chemical Corporation
5005 LBJ Freeway
Dallas, Texas 75244
Attention: Vice President - Chlorine
Telephone: 972-404-4195
Facsimile: 972-404-3406
If to Pioneer:
Pioneer Chlor Alkali Company, Inc.
700 Louisiana Street, Suite 4200
Houston, Texas 77002
Attention: Vice President - Sales and Marketing
Telephone: 713-225-3831
Facsimile: 713-225-4426
SECTION 13.5 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
17
<PAGE> 23
SECTION 13.6 Competition. Nothing set forth in this Agreement shall
prevent either Party or any of its Affiliates from competing with the other
Party or any of its Affiliates in the sale of chlorine to any Person.
SECTION 13.7 Headings. The Table of Contents set forth in, and the
descriptive headings of the several Articles and Sections of, this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
SECTION 13.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which when so executed shall be deemed an original,
but all of which together shall constitute one and the same instrument.
SECTION 13.9 Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties, and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship or
any of the provisions of this Agreement. Personal pronouns, when used in this
Agreement, whether in the masculine, feminine or neutral gender, shall include
all other genders and the singular shall include the plural and vice versa.
SECTION 13.10 Third Party Beneficiaries. EXCEPT AS PROVIDED IN
SECTION 13.1, NOTHING EXPRESSED OR IMPLIED IN THIS AGREEMENT IS INTENDED, OR
SHALL BE CONSTRUED, TO CONFER UPON OR GIVE ANY PERSON OTHER THAN THE PARTIES
HERETO AND THEIR SUCCESSORS AND PERMITTED ASSIGNS, ANY RIGHTS, REMEDIES OR
OBLIGATIONS UNDER, OR BY REASON OF, THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
SECTION 13.11 Payments. Any payments by, or on behalf of, the Parties
pursuant to any provisions of this Agreement shall be made by wire transfer of
immediately available funds to a bank account of the Party receiving such
payment at the bank used by such Party and each Party hereto shall furnish to
the other notice of the name of its bank and the number of the account thereat
to which payments shall be directed.
SECTION 13.12 Incorporation of Appendices. The Appendices identified
in this Agreement are incorporated herein by reference and made a part hereof.
18
<PAGE> 24
IN WITNESS WHEREOF, the Parties have, by their duly authorized
representatives, signed this Chlorine Purchase Agreement as of the day and
year first above written.
PIONEER CHLOR ALKALI COMPANY, INC.
By: /s/ PHILIP J. ABLOVE
--------------------------
Name: Philip J. Ablove
Title: Vice President and
Chief Financial Officer
OCC TACOMA, INC.
By: /s/ RICHARD A. LORRAINE
--------------------------
Name: Richard A. Lorraine
Title: Vice President and
Chief Financial Officer
19
<PAGE> 1
EXHIBIT 10.15
EXECUTION COPY
================================================================================
ENVIRONMENTAL OPERATING AGREEMENT
between
OCC TACOMA, INC.,
a Delaware corporation
and
PIONEER CHLOR ALKALI COMPANY, INC.,
a Delaware corporation
dated as of
June 17, 1997
================================================================================
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO
RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE 24b-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . 2
Section 1.2 References, Etc. . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
ENVIRONMENTAL RESPONSIBILITIES AND OBLIGATIONS . . . . . 3
Section 2.1 Environmental Representation by OCC Tacoma . . . . . . . 3
Section 2.2 Responsibility for Excluded Environmental Conditions . . 4
Section 2.3 Responsibility for Specified Environmental Conditions . 5
Section 2.4 Responsibility for Identified Environmental Conditions
and Identified Environmental Violations . . . . . . . . 7
Section 2.5 Performance of the Remediation of Excluded, Specified
or Identified Environmental Conditions or the
Correction of Identified Environmental Violations . . . 11
Section 2.6 Expansion of the Site by Pioneer . . . . . . . . . . . . 12
Section 2.7 Repair and Maintenance Activities by Pioneer . . . . . . 14
Section 2.8 Responsibility for Shared Obligations . . . . . . . . . 15
Section 2.9 * . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.10 Termination of Pioneer's Responsibilities and
Obligations Under Article II . . . . . . . . . . . . . . 17
Section 2.11 Limitation on Pioneer's Responsibility Under Article II. 17
Section 2.12 Responsibility for Excluded Activities . . . . . . . . . 18
ARTICLE III
ENVIRONMENTAL INDEMNITIES. . . . . . . . . . . . . . . . 18
Section 3.1 Indemnification by OCC Tacoma for Specified
Environmental Conditions, Identified Environmental
Conditions, Identified Environmental Violations,
Common Law Claims and Environmental Claims . . . . . . 18
Section 3.2 Indemnification by OCC Tacoma for Remediation Damages 21
Section 3.3 Indemnification by Pioneer for Specified Environmental
Conditions, Identified Environmental Conditions,
Identified Environmental Violations, Environmental
Claims or Other Environmental Matters . . . . . . . . 21
Section 3.4 Other Indemnification . . . . . . . . . . . . . . . . 23
Section 3.5 Termination of Pioneer's Responsibilities and
Obligations Under Article III . . . . . . . . . . . . 23
ARTICLE IV
CLAIM AND INDEMNITY PROCEDURES . . . . . . . . . . . . 24
Section 4.1 Notice of Environmental and Common Law Claims and
Orders . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 4.2 Indemnification Procedures . . . . . . . . . . . . . . 25
Section 4.3 Payment . . . . . . . . . . . . . . . . . . . . . . . 31
Section 4.4 * . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.5 Exclusive Remedy for Claims Regarding Environmental Laws
or Environmental Matters . . . . . . . . . . . . . . . 32
Section 4.6 * . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.7 Mitigation of Damages . . . . . . . . . . . . . . . . 32
Section 4.8 Limitations on Indemnification . . . . . . . . . . . . 33
ARTICLE V
SITE MANAGEMENT. . . . . . . . . . . . . . . . . . . . 33
Section 5.1 Designation of Project Managers . . . . . . . . . . . 33
Section 5.2 Consultation . . . . . . . . . . . . . . . . . . . . . 34
Section 5.3 Periodic Reporting . . . . . . . . . . . . . . . . . . 34
Section 5.4 Quarterly Statements of Certain Costs and Damages
by OCC Tacoma . . . . . . . . . . . . . . . . . . . . 35
Section 5.5 Statements of Certain Costs and Damages by Pioneer . . 35
Section 5.6 Right to Review . . . . . . . . . . . . . . . . . . . 35
Section 5.7 Access to the Site . . . . . . . . . . . . . . . . . . 36
Section 5.8 Access to Necessary Services and Equipment . . . . . . 36
Section 5.9 Moving of Improvements . . . . . . . . . . . . . . . . 37
Section 5.10 Exacerbation Clause for * . . . . . . . . . . . . 37
Section 5.11 Exacerbation Clause for * . . . . . . . . . . . . 39
ARTICLE VI
DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . 41
Section 6.1 Dispute Resolution . . . . . . . . . . . . . . . . . . 41
Section 6.2 Informal Dispute Resolution . . . . . . . . . . . . . 41
Section 6.3 Formal Dispute Resolution . . . . . . . . . . . . . . 42
Section 6.4 Attorneys' Fees . . . . . . . . . . . . . . . . . . . 43
Section 6.5 Service of Process, Consent to Jurisdiction, Etc. . . 43
ARTICLE VII
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . 44
Section 7.1 Applicable Law . . . . . . . . . . . . . . . . . . . . 44
Section 7.2 Confidentiality . . . . . . . . . . . . . . . . . . . 44
Section 7.3 Press Releases and Public Announcements . . . . . . . 46
Section 7.4 No Third-Party Beneficiaries . . . . . . . . . . . . . 47
Section 7.5 Entire Agreement . . . . . . . . . . . . . . . . . . . 47
Section 7.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.7 Notices . . . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 7.8 Amendments and Waivers . . . . . . . . . . . . . . . . 48
Section 7.9 Assignment; Successors and Assigns . . . . . . . . . . 49
Section 7.10 Proposed Transfer of Any Portion of the Site by Pioneer 50
Section 7.11 Headings . . . . . . . . . . . . . . . . . . . . . . . 51
Section 7.12 Counterparts . . . . . . . . . . . . . . . . . . . . . 51
Section 7.13 Construction . . . . . . . . . . . . . . . . . . . . . 51
Section 7.14 Incorporation of Exhibits and Schedules . . . . . . . 51
Section 7.15 Denial of Liability . . . . . . . . . . . . . . . . . 51
Section 7.16 Severability . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
iii
<PAGE> 5
ENVIRONMENTAL OPERATING AGREEMENT
THIS ENVIRONMENTAL OPERATING AGREEMENT, dated as of June 17, 1997, is
between OCC TACOMA, INC., a Delaware corporation, and PIONEER CHLOR ALKALI
COMPANY, INC., a Delaware corporation.
PRELIMINARY STATEMENTS
A. WHEREAS, pursuant to the Asset Purchase Agreement (as such term
and certain other terms used in this Agreement with initial capital letters are
defined in Article I), the Parties have provided for the sale by OCC Tacoma,
and the purchase by PCI, of the right, title and interest of OCC Tacoma in the
Assets; and
B. WHEREAS, prior to the Closing the Asset Purchase Agreement was
assigned by PCI to, and assumed by, Pioneer pursuant to Section 9.06(i) of the
Asset Purchase Agreement; and
C. WHEREAS, prior to May 10, 1997, OxyChem was the permittee under
the RCRA Permit, through which the EPA required OxyChem to perform Remediation
of certain Hazardous Materials in groundwater beneath the area located
generally in the northern portion of the Site and beneath a portion of the Port
Property and Roadways; and
D. WHEREAS, prior to the Closing, the RCRA Permit was modified on or
about May 10, 1997 to transfer such permit from OxyChem to OCC Tacoma, a
wholly-owned subsidiary of OxyChem, and OCC Tacoma assumed all of the
liabilities and obligations associated with such RCRA Permit; and
E. WHEREAS, the Site is located within the CB/NT Site, and the EPA
has alleged, pursuant to CERCLA, that OxyChem is a PRP for Remediation of the
Hylebos Waterway of the CB/NT Site; and
F. WHEREAS, on September 30, 1989, the EPA issued a Record of
Decision selecting a remedial action for the CB/NT Site which addresses certain
Hazardous Materials allegedly Released at the CB/NT Site, including those
allegedly Released from the Site; and
G. WHEREAS, on November 29, 1993, OxyChem entered into the Hylebos
AOC with the EPA, which requires OxyChem and other designated PRPs to perform
certain Remediation in the Hylebos Waterway of the CB/NT Site; and
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
1
<PAGE> 6
H. WHEREAS, historic operations at the Site by OxyChem and other
owners and operators of the Site have allegedly Released Hazardous Materials
into the soil, surface water, groundwater and intertidal and subtidal sediments
at, and in the vicinity of, the Site; and
I. WHEREAS, as of February 1, 1997, pursuant to the provisions of
the Assignment and Assumption Agreement, OCC Tacoma assumed all obligations and
liabilities of OxyChem, if any, associated with the past and present ownership
and operation of the Site and with the CB/NT Site, the PRI Property and the
Upland Waste Disposal Facilities; and
J. WHEREAS, this Agreement shall neither constitute, nor be
interpreted, construed or used as evidence of, any admission of liability, law
or fact, or a waiver of any right or defense, by OCC Tacoma or Pioneer or their
respective Affiliates, and each of the Parties denies that it or any of its
respective Affiliates or Representatives, or the Site, has caused or
contributed to, will cause or contribute to, or has or will have any
responsibility for any damage or injury to Persons, property, natural resources
or the environment; and
K. WHEREAS, the Parties desire to specify and allocate, as between
themselves, each Party's obligations and liabilities after the Closing pursuant
to Environmental Laws, including those for Remediation of the CB/NT Site, the
PRI Property, and the Upland Waste Disposal Facilities, and those for
Remediation of Environmental Conditions and Correction of Environmental
Violations, if any, associated with the past and future ownership or operation
of the Site, and each Party's obligations and liabilities, if any, with respect
to common law tort or contribution claims relating to Environmental Matters;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS. Capitalized terms used in this
Agreement and not otherwise defined herein shall have the respective meanings
set forth in Annex A.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
2
<PAGE> 7
SECTION 1.2 REFERENCES, ETC. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in Annex A or in any other provision of this
Agreement in the singular shall have the same meanings in the plural and vice
versa. All pronouns, nouns and other terms used in this Agreement shall
include the masculine, feminine and neuter forms thereof, wherever appropriate
to the context. All references herein to Articles, Sections, Subsections,
clauses, Annexes, Exhibits and Schedules shall, unless the context requires a
different construction, be deemed to be references to the Articles, Sections,
Subsections and clauses of this Agreement and the Annexes, Exhibits and
Schedules attached hereto and made a part hereof. In this Agreement, unless a
clear contrary intention appears, the word "including" (and with correlative
meaning "include") means including, without limiting the generality of any
description preceding such term. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.
ARTICLE II
ENVIRONMENTAL RESPONSIBILITIES AND OBLIGATION
SECTION 2.1 ENVIRONMENTAL REPRESENTATION BY OCC TACOMA.
(a) Representation of OCC Tacoma. OCC Tacoma represents that,
except as identified in Schedule 1 attached hereto, to the Knowledge of OCC
Tacoma, the Assets are operated as of the date of this Agreement in compliance
with applicable Environmental Laws, and with Permits issued thereunder, except
where non-compliance would not result in a material adverse change, with
respect to the business, financial condition, results of operations or
prospects (in the case of prospects, not taking into account general economic
conditions or general industry developments) of the Assets or the business and
operations conducted at the Facility on the date of this Agreement, of * .
OCC Tacoma and its Affiliates make no other representation or warranty
regarding the compliance of the Assets with Environmental Laws and Permits and,
except for any representations and warranties set forth in the Asset Purchase
Agreement or any Related Agreement, disclaim all liability and responsibility
for any representation, warranty, statement or information made or communicated
(orally or in writing) to Pioneer or its Affiliates or their respective
Representatives (including any opinion, information, projection, estimate,
financial statement or advice that may be or may have been provided to Pioneer
by OCC Tacoma or any of its Affiliates or any of their respective
Representatives).
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
3
<PAGE> 8
(b) Survival of Representation. The representation in
Subsection 2.1(a) above will expire on the second (2nd) Anniversary. Except
with the written consent of OCC Tacoma as provided in Section 7.10 herein, the
representation in Subsection 2.1(a) shall not run in favor of or inure to the
benefit of any successor or assign of Pioneer Chlor Alkali Company, Inc. or its
Affiliates.
(c) Remedy for Breach of Representation. A claim for breach
of this representation may be made solely and exclusively as an Indemnity Claim
for an Identified Environmental Violation, and, except for the two-year
survival period in Subsection (b) above, is subject to the same Early Sunset
Date, Maximum Sunset Date and Aggregate OCC Tacoma Liability Limit as
Identified Environmental Violations, and all other procedures and limitations
applicable to Identified Environmental Violations (including the requirement of
this Agreement that a Penalty Claim must be subject to an Order prior to the
fifth (5th) Anniversary or a Formal Agency Action prior to the third (3rd)
Anniversary to be deemed an Identified Environmental Violation). OCC Tacoma's
indemnification for Identified Environmental Violations under Subsection 3.1(c)
hereof shall be the sole remedy of Pioneer for breach of this representation,
and Pioneer hereby waives any other statutory, equitable or common law remedy,
whether alternative or cumulative, and any other remedy under this Agreement,
the Asset Purchase Agreement, any Related Agreement or any other agreement, for
any such breach.
SECTION 2.2 RESPONSIBILITY FOR EXCLUDED ENVIRONMENTAL CONDITIONS. As
between the Parties, and subject to the other provisions and limitations set
forth in this Agreement, the Parties agree to allocate responsibility for
Excluded Environmental Conditions as set forth in this Section 2.2.
(a) Responsibility of OCC Tacoma Generally for Excluded
Environmental Conditions. OCC Tacoma agrees to perform, either individually or
in conjunction with any of its Affiliates or a PRP Group, Remediation of an
Excluded Environmental Condition (and/or to pay Response Costs therefor)
required by Administrative Orders or Court Orders in Material Compliance with
such Orders, commencing at the Closing, except to the extent that Pioneer has
liability or responsibility for such Excluded Environmental Condition as
specified in clause (b) below. The obligations of OCC Tacoma under this
Section 2.2(a), if any, shall survive the Closing and continue in perpetuity,
shall be personal to Pioneer Chlor Alkali Company, Inc. and its Affiliates, and
shall not be assignable or transferable to any other Person.
(b) Responsibility of Pioneer for Excluded Environmental
Conditions. Pioneer agrees to perform, either individually or in conjunction
with its Affiliates or a PRP Group, necessary Remediation of an Excluded
Environmental Condition (and/or
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
4
<PAGE> 9
to pay Response Costs therefor) required by Administrative Orders or Court
Orders in Material Compliance with such Orders, to the extent such obligations
arise from Releases into the Non-Hylebos Area or on or at the Upland Waste
Disposal Facilities that were generated by or originated from (i) activities or
operations of Pioneer or its Affiliates or Representatives, (ii) activities,
operations, events or occurrences (A) on the Site after the Closing, other than
Excluded Activities or Treatment System Operation (other than Improper
Treatment System Operations), or (B) on any other real or personal property
owned or operated by Pioneer or its Affiliates, or (iii) Improper Treatment
System Operation. *
SECTION 2.3 RESPONSIBILITY FOR SPECIFIED ENVIRONMENTAL CONDITIONS. As
between the Parties, and subject to the other provisions and limitations set
forth in this Agreement, the Parties agree to allocate responsibility for
Specified Environmental Conditions as set forth in this Section 2.3.
(a) Responsibility of OCC Tacoma Generally for Specified
Environmental Conditions. OCC Tacoma agrees to perform, either individually or
in conjunction with any of its Affiliates or a PRP Group, necessary Remediation
(and/or to pay Response Costs therefor) of each Specified Environmental
Condition required by Administrative Orders or Court Orders in Material
Compliance with such Orders, for a period commencing at the Closing and
expiring on the Applicable Sunset Date for such Specified Environmental
Condition. On the Applicable Sunset Date, any obligations of OCC Tacoma or any
of its Affiliates with respect to such Specified Environmental Condition,
including OCC Tacoma's obligations under Section 3.1 with respect thereto,
shall cease automatically and shall be of no further force and effect, except
for payments to Pioneer Indemnified Persons (i) then due and payable and not in
dispute pursuant to any pending Indemnity Claim accepted by OCC Tacoma, if any,
for Remediation of such Specified Environmental Condition (and/or payment of
Response Costs therefor), or (ii) subsequently determined in dispute resolution
or litigation to have been due and payable pursuant to any pending Indemnity
Claim for Remediation of such Specified Environmental Condition (and/or payment
of Response Costs therefor) in dispute on such Applicable Sunset Date.
(b) Conveyance of Improvements Used in the Remediation of the
Specified Environmental Conditions. On the Applicable Sunset Date for each
Specified Environmental Condition, OCC Tacoma shall, or shall cause its
Affiliates to, convey to Pioneer, and Pioneer shall, or shall cause its
Affiliates to, acquire from OCC Tacoma and its Affiliates, AS-IS, WHERE-IS,
WITH ALL FAULTS and with no representations or warranties, for the price of
$10: (i) all of the Improvements then owned by OCC Tacoma or its Affiliates
and located at or in the vicinity of the Site and used exclusively by OCC
Tacoma or its Affiliates (or the extent of OCC Tacoma's right, title and
interest in such improvements owned and used by a PRP Group) in
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
5
<PAGE> 10
Remediating such Specified Environmental Condition, and (ii) to the extent
allowed by applicable Governmental Authorities after reasonably diligent
efforts by the Parties, any permits held by or on behalf of OCC Tacoma or any
of its Affiliates therefor; provided in each case that (1) Pioneer is not in
material breach of its obligations under this Agreement, (2) OCC Tacoma has
not been required by a Governmental Authority pursuant to applicable Orders or
Formal Agency Actions to remove, close or abandon such Improvements or to
relinquish such permits prior to the Applicable Sunset Date as a condition of
receiving a Discharge of or Approval Letter for the Specified Environmental
Condition, and (3) Pioneer shall indemnify, defend and hold harmless OCC Tacoma
and OCC Tacoma Indemnified Persons pursuant to Section 3.3. and Article IV, but
excluding Section 4.8, from and against any Damages for Remediation of the
Specified Environmental Condition, whether or not Pioneer acquires such
Improvements and permits from OCC Tacoma (including Damages for any failure to
acquire such Improvements and permits). Pioneer shall pay all transfer taxes,
fees and costs, if any, imposed by a Governmental Authority or Third Party
associated with the transfer of such Improvements and permits.
(c) Responsibility of Pioneer for Specified Environmental
Conditions Prior to the Applicable Sunset Date. Prior to the Applicable Sunset
Date and subject to Section 2.5(e), in the event that Pioneer, its Affiliates
or Representatives, or activities, operations, events or occurrences on the
Site after the Closing, other than Excluded Activities or Treatment System
Operation (other than Improper Treatment System Operation), either (i) Release
Hazardous Materials or other substances or materials that mix or commingle with
a Specified Environmental Condition, or (ii) otherwise directly cause an
increase in the cost or scope of the Remediation of a Specified Environmental
Condition, Pioneer in each case agrees to pay to OCC Tacoma the portion of the
Direct Cost incurred by OCC Tacoma or any of its Affiliates to address any such
Release and any such increased cost or scope of Remediation and/or Response
Costs with respect to such Specified Environmental Condition. * .
(d) Responsibility of Pioneer for Specified Environmental
Conditions After the Applicable Sunset Date. From and after the Applicable
Sunset Date for each Specified Environmental Condition, Pioneer agrees to, or
to cause its Affiliates, successors or permitted assigns to, (1) perform all
Remediation of such Specified Environmental Condition required by
Administrative Orders or Court Orders in Material Compliance with such Orders
and/or to pay Response Costs for such Specified Environmental Condition, (2)
diligently take all reasonable actions necessary to substitute itself for OCC
Tacoma and its Affiliates with respect to any Orders, Formal Agency Actions or
Remediation Claims applicable to such Specified Environmental Condition, and
(3) indemnify, defend and hold harmless OCC Tacoma and OCC Tacoma Indemnified
Persons pursuant to Section 3.3 and Article IV, but excluding Section 4.8, from
and against any Damages for Remediation of (and/or Response Costs
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
6
<PAGE> 11
for) the Specified Condition (including any Damages arising from failure to
perform clauses (1) or (2) above and from failure to accomplish complete
substitution of Pioneer or its Affiliates for OCC Tacoma and its Affiliates
with respect to any Orders, Formal Agency Actions or Remediation Claims).
SECTION 2.4 RESPONSIBILITY FOR IDENTIFIED ENVIRONMENTAL CONDITIONS AND
IDENTIFIED ENVIRONMENTAL VIOLATIONS. As between the Parties, and subject to
the other provisions and limitations set forth in this Agreement, the Parties
agree to allocate responsibility for Identified Environmental Conditions or
Identified Environmental Violations as set forth in this Section 2.4.
(a) Responsibility of OCC Tacoma for Identified Environmental
Conditions and Identified Environmental Violations. OCC Tacoma agrees to
perform Remediation of Identified Environmental Conditions (and/or to pay
Response Costs therefor), and to perform Correction of Identified Environmental
Violations (and/or to pay Penalties assessed therefor), in each case required
by Administrative Orders or Court Orders and in Material Compliance with such
Orders, for a period commencing upon the receipt of an Order Notice from
Pioneer identifying such Identified Environmental Condition or Identified
Environmental Violation and expiring on the Applicable Sunset Date for such
Identified Environmental Condition or Identified Environmental Violation,
subject to the limitations set forth in Subsection (b) below. On the Applicable
Sunset Date, any obligations of OCC Tacoma or any of its Affiliates with
respect to such Identified Environmental Condition or Identified Environmental
Violation, including OCC Tacoma's obligations under Section 3.1 with respect
thereto, shall cease automatically and shall be of no further force and effect,
except for payments to Pioneer Indemnified Persons (i) then due and payable and
not in dispute pursuant to any pending Indemnity Claim accepted by OCC Tacoma,
if any, for Remediation of such Identified Environmental Condition (and/or
payment of Response Costs therefor) or for Correction of such Identified
Environmental Violation (and/or payment of Penalties therefor), or (ii)
subsequently determined in dispute resolution or litigation to have been due
and payable pursuant to any pending Indemnity Claim for Remediation of such
Identified Environmental Condition (and/or payment of Response Costs therefor)
or for Correction of such Identified Environmental Violation (and/or payment of
Penalties therefor), which Indemnity Claim is in dispute on such Applicable
Sunset Date.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
7
<PAGE> 12
(b) Limitations on OCC Tacoma's Obligations Regarding
Identified Environmental Conditions and Identified Environmental Violations.
(i) OCC Tacoma shall have no responsibility to
Remediate any Identified Environmental Condition (or to pay Response Costs
therefor), to Correct any Identified Environmental Violation (or to pay
Penalties assessed therefor), or to indemnify, defend and hold Pioneer harmless
from and against any liability incurred by Pioneer to perform such Remediation
or Correction thereof (or to pay any Response Costs or Penalties therefor):
(A) to the extent that an Identified
Environmental Condition or an Identified Environmental Violation is identified
by, or the Order requiring Remediation or payment of Response Costs, on the one
hand, or Correction or payment of Penalties, on the other hand, arises from:
(1) tests or samples of surface water,
groundwater, sediment, or soil performed voluntarily by, on behalf of, or with
the permission of, Pioneer, except (i) as expressly required by applicable
Orders, Environmental Laws or permits issued thereunder, or (ii) as expressly
provided in Sections 2.6 or 2.7 below;
(2) reports or other communications made
voluntarily with any Governmental Authority by or on behalf of Pioneer, except
(i) as expressly required by applicable Environmental Laws, Orders or permits
issued thereunder, or (ii) as expressly provided in Sections 5.10(b)(v) and
5.11(c)(ii) below; provided, however, that any such reports or communications
alleging the discovery or existence of an Identified Environmental Condition or
Identified Environmental Violation or requesting an investigation or inspection
or Remediation of the Site by a Governmental Authority or Third Party may only
be made to the extent expressly required by applicable Orders, Environmental
Laws or permits issued thereunder; or
(3) any requirements under any permit
issued or interim status granted under RCRA to Pioneer, its Affiliates,
successors or permitted assigns to allow reconstruction of facilities other
than the groundwater treatment system or construction or operation of new
facilities or units for storage, treatment or disposal of hazardous waste at
the Site after the Closing, other than Excluded Activities; or
(4) Improper Treatment System Operation;
or
(5) an Expansion or Repair, * or
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
8
<PAGE> 13
(B) if the Remediation of such Identified
Environmental Condition (or the payment of Response Costs therefor) and any
Damages (other than Remediation Damages) incurred by Pioneer Indemnified
Persons to perform such Remediation pursuant to applicable Orders, or the
Correction of such Identified Environmental Violation (or payment of Penalties
assessed therefor) and any Damages (other than Remediation Damages) incurred by
Pioneer Indemnified Persons for such Correction pursuant to applicable Orders,
is in an amount less than * .
(ii) In addition to clause (i) above, OCC Tacoma shall
have no responsibility to Remediate an Identified Environmental Condition (or
to pay Response Costs therefor), to Correct an Identified Environmental
Violation (or to pay Penalties assessed therefor), or to indemnify, defend and
hold Pioneer harmless from and against Damages incurred by Pioneer to perform
such Remediation or Correction thereof (or to pay the Response Costs or
Penalties therefor), and any such responsibility or indemnification or defense
obligation of OCC Tacoma for such Identified Environmental Condition or
Identified Environmental Violation shall cease automatically and be of no
further force and effect, in any of the following circumstances:
(A) with respect to a particular Identified
Environmental Condition or Identified Environmental Violation, on the
Applicable Sunset Date for such Identified Environmental Condition or
Identified Environmental Violation; or
(B) in any event, notwithstanding any other
provision of this Agreement, when the Aggregate OCC Tacoma Liability reaches
the Aggregate OCC Tacoma Liability Limit.
(c) Conveyance of Improvements Used in the Remediation of
Identified Environmental Conditions. On the Applicable Sunset Date for each
Identified Environmental Condition, OCC Tacoma shall, or shall cause its
Affiliates to, convey to Pioneer, and Pioneer shall, or shall cause its
Affiliates to, acquire from OCC Tacoma, AS-IS, WHERE-IS, WITH ALL FAULTS and
with no representations or warranties, for a price of $10: (i) all of the
Improvements then owned by OCC Tacoma or its Affiliates and located at the Site
and used exclusively by OCC Tacoma or its Affiliates (or the extent of OCC
Tacoma's right, title and interest in such improvements owned and used by a PRP
Group) in Remediating such Identified Environmental Condition, and (ii) to the
extent allowed by applicable Governmental Authorities after reasonably diligent
efforts by the Parties, any permits held by or on behalf of OCC Tacoma
therefor; provided in each case that (1) Pioneer is not in material breach of
its obligations under this Agreement, (2) OCC Tacoma has not been required by a
Governmental Authority pursuant to applicable Orders or Formal Agency
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
9
<PAGE> 14
Actions to remove, close or abandon such Improvements or to relinquish such
permits prior to the Applicable Sunset Date as a condition of receiving a
Discharge of or Approval Letter for such Identified Environmental Condition,
and (3) Pioneer shall indemnify, defend and hold harmless OCC Tacoma and OCC
Tacoma Indemnified Persons pursuant to Section 3.3 and Article IV, but
excluding Section 4.8, from and against any Damages for Remediation of
Identified Conditions whether or not Pioneer acquires such Improvements and
permits from OCC Tacoma (including Damages for any failure to acquire such
Improvements and permits). Pioneer shall pay all sales and transfer taxes,
fees and costs, if any, imposed by a Governmental Authority or Third Party
associated with the transfer of such Improvements and permits.
(d) Responsibility of Pioneer for Identified Environmental
Conditions and Identified Environmental Violations Prior to the Applicable
Sunset Date. Prior to the Applicable Sunset Date and subject to Sections
2.5(e) and 2.8(d), in the event that Pioneer, its Affiliates or
Representatives, or activities, operations, events or occurrences on the Site
after the Closing, other than Excluded Activities or Treatment System Operation
(other than Improper Treatment System Operation), either (i) Release Hazardous
Materials or other substances or materials that mix or commingle with an
Identified Environmental Condition, or (ii) otherwise directly cause an
increase in the cost or scope of the Remediation of and/or Response Costs for
an Identified Environmental Condition or the Correction of and/or Penalties for
an Identified Environmental Violation, Pioneer in each case agrees to pay to
OCC Tacoma the portion of the Direct Cost incurred by OCC Tacoma or any of its
Affiliates to address any such Release and any such increased cost or scope of
Remediation and/or Response Costs with respect to such Identified Environmental
Condition or any such increased cost or scope of Correction and/or Penalties
with respect to such Identified Environmental Violation. *
(e) Responsibility of Pioneer for Identified Environmental
Conditions and Identified Environmental Violations After the Applicable Sunset
Date. From and after the Applicable Sunset Date for each Identified
Environmental Condition and each Identified Environmental Violation, Pioneer
agrees to, or to cause its Affiliates, successors or permitted assigns to, (1)
perform all Remediation of such Identified Environmental Condition required by
Administrative Orders or Court Orders in Material Compliance with such Orders
and/or to pay Response Costs for such Identified Environmental Condition, and
to Correct such Identified Environmental Violation required by Administrative
Orders or Court Orders in Material Compliance with such Orders and/or to pay
Penalties for such Identified Environmental Violation, (2) diligently take all
reasonable actions necessary to substitute itself for OCC Tacoma and its
Affiliates with respect to any Orders, Formal Agency Actions, Remediation
Claims or Penalty Claims applicable to such Identified Environmental Condition
or Identified Environmental Violation, and (3) indemnify, defend and hold
harmless OCC
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
10
<PAGE> 15
Tacoma and OCC Tacoma Indemnified Persons pursuant to Section 3.3 and Article
IV, but excluding Section 4.8, from and against any Damages for Remediation of
(and/or Response Costs for) the Identified Environmental Condition or for
Correction of (and/or Penalties for) the Identified Environmental Violation
(including any Damages arising from failure to perform clauses (1) or (2) above
and the failure to accomplish complete substitution of Pioneer or its
Affiliates for OCC Tacoma and its Affiliates with respect to any Orders, Formal
Agency Actions or Remediation Claims).
SECTION 2.5 PERFORMANCE OF THE REMEDIATION OF EXCLUDED, SPECIFIED OR
IDENTIFIED ENVIRONMENTAL CONDITIONS OR THE CORRECTION OF IDENTIFIED
ENVIRONMENTAL VIOLATIONS. As between OCC Tacoma and Pioneer, and during the
period in which OCC Tacoma or Pioneer or any of their respective successors or
permitted assigns is responsible for the Remediation of any Excluded, Specified
or Identified Environmental Condition or for the Correction of any Identified
Environmental Violation:
(a) If either Party or any of their Affiliates is required by
applicable Orders to Remediate any Excluded, Specified or Identified
Environmental Condition or to Correct any Identified Environmental Violation,
such Party (or its Affiliates) shall be required to meet * .
(b) To the extent that Pioneer, its Affiliates or
Representatives, or activities, operations, events or occurrences on the Site
after the Closing, other than Excluded Activities or Treatment System Operation
(other than Improper Treatment System Operation), Release Hazardous Materials
or other substances or materials, and such Release leads a Governmental
Authority to require additional Remediation, after the expiration of the
Applicable Sunset Date, of a Specified Environmental Condition or Identified
Environmental Condition previously Remediated by OCC Tacoma or any of its
Affiliates, Pioneer agrees to Remediate such Environmental Condition (including
the portion arising solely from Releases prior to the Closing). To the extent
that such Release leads a Governmental Authority to require additional
Remediation, prior to the expiration of the Applicable Sunset Date, of a
Specified Environmental Condition or Identified Environmental Condition, in
either case previously Remediated or then being Remediated by OCC Tacoma or any
of its Affiliates, OCC Tacoma agrees to perform (and/or to pay Response Costs
of) the portion of the additional Remediation of the Environmental Condition
solely attributable to Releases prior to the Closing pursuant to applicable
Orders (and until the Applicable Sunset Date), and Pioneer agrees to perform
(or pay Response Costs of) the remainder of the Remediation, including any
necessary repair, movement, relocation or functional replacement of
Improvements required to perform any additional Remediation.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
11
<PAGE> 16
(c) After consultation pursuant to Section 5.2, Pioneer shall
execute all documents requested or required of Pioneer by Governmental
Authorities and all documentation reasonably requested by OCC Tacoma (or its
designated Affiliates) to perform the Remediation required under this
Agreement, including written acknowledgments by Pioneer (in form and substance
reasonably satisfactory to OCC Tacoma) stating that: (i) consistent with the
Deed, the Site shall remain in heavy industrial use; * .
(d) Pioneer will permit, and will not contest, the items
specified in clauses (c)(i), (ii), (iv), (v) and (vi) above, and will not
contest the item specified in clause c(iii) above, provided, in each case, that
OCC Tacoma has engaged in consultation pursuant to Section 5.2.
(e) In the context of OCC Tacoma's performing (or payment of
Response Costs in lieu thereof) Remediation of a Specified Environmental
Condition or an Identified Environmental Condition, OCC Tacoma agrees that,
prior to the Applicable Sunset Date, Pioneer shall not be required to
participate in or pay for (or to indemnify and defend OCC Tacoma against) such
Remediation solely because of the presence of Hazardous Materials, or
substances or materials other than Hazardous Materials, that are mixed or
commingled with the Hazardous Materials being Remediated as a Specified
Environmental Condition or an Identified Environmental Condition, except to the
extent that (i) Pioneer, its Affiliates or Representatives, or activities,
operations, events or occurrences on the Site after the Closing, other than
Excluded Activities or Treatment System Operation (other than Improper
Treatment System Operation), Release such Hazardous Materials, substances or
materials and (ii) those Hazardous Materials, substances or materials increase
the cost or scope of OCC Tacoma's Remediation of such Specified Environmental
Condition or Identified Environmental Condition. Subject to the provisions of
Section 5.2 below, nothing in this Agreement shall prohibit OCC Tacoma from
acting to prevent or minimize such mixing or commingling with the Hazardous
Materials being Remediated as a Specified Environmental Condition or an
Identified Environmental Condition, or shall require OCC Tacoma to Remediate
such other Hazardous Materials, substances or materials which can be left in
place during Remediation activities of OCC Tacoma, if consistent with
applicable Orders.
SECTION 2.6 EXPANSION OF THE SITE BY PIONEER.
(a) Pioneer may Expand on the Site without notice to or
consent of OCC Tacoma, provided that such Expansion (i) does not disturb or
require disturbance, excavation or Remediation of the soil, sediment or
groundwater at the Site or the sediment or groundwater in the Hylebos Area;
(ii) is not located in Remediation Areas of the Site, and (iii) does not
materially delay or interfere with the Remediation
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
12
<PAGE> 17
of Excluded, Specified or Identified Environmental Conditions or the Correction
of Identified Environmental Violations by OCC Tacoma or any of its Affiliates,
or materially delay or interfere with the other actions of OCC Tacoma required
pursuant to this Agreement.
(b) Pioneer may Expand on the Site, or move or relocate any
Improvements which disturb or require the disturbance, excavation or
Remediation of the soil, sediment or groundwater at, or in the vicinity of, the
Site, outside of Remediation Areas in a reasonable manner after consultation
pursuant to Section 5.2 and provided that Pioneer uses reasonably diligent
efforts to mitigate any Damages. * To the extent that any such Expansion
materially delays or interferes with Remediation being performed by OCC Tacoma
pursuant to this Agreement, Pioneer agrees to pay to OCC Tacoma the Direct Cost
of such delay or interference.
(c) If and to the extent that Pioneer encounters Hazardous
Materials while conducting Expansion, Pioneer shall be solely responsible for
the additional cost directly caused by such Hazardous Materials, except to the
extent that the Hazardous Materials encountered by Pioneer (A) originated from
a pre-Closing Release, (B) are discovered during the performance of Expansion;
and (C) directly increase the Direct Costs of such Expansion by an identifiable
incremental amount due to costs required for compliance with the least
stringent standards allowable pursuant to Environmental Laws, in which case *
and the provisions of Section 2.1 through 2.5, inclusive, shall not be
applicable to such incremental portion of Direct Costs until the Applicable
Sunset Date.
(d) In the event any Person other than Pioneer Chlor Alkali
Company, Inc. or its Affiliates conducts an Expansion, such Person shall be
obligated to pay the costs and perform the Remediation * it being the
express intent of the parties that * this Section 2.6 shall be personal
to Pioneer Chlor Alkali Company, Inc. and its Affiliates and shall not be
assignable or transferrable to any other Person.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
13
<PAGE> 18
SECTION 2.7 REPAIR AND MAINTENANCE ACTIVITIES BY PIONEER.
(a) Pioneer may conduct Repair at the Site, without notice to
or consent of OCC Tacoma, provided that such Repair (i) does not disturb or
require disturbance, excavation or Remediation of the soil, sediment or
groundwater at the Site or the sediment or groundwater in the Hylebos Area, and
(ii) does not materially delay or interfere with the Remediation of Excluded,
Specified or Identified Environmental Conditions or the Correction of
Identified Environmental Violations by OCC Tacoma or any of its Affiliates, or
the other actions of OCC Tacoma required pursuant to this Agreement. Pioneer
may conduct Repair which disturbs or requires the disturbance, excavation or
Remediation of the soil, sediment or groundwater at, the Site or the sediment
or groundwater in the Hylebos Area, outside of the Remediation Areas, if such
Repair is performed in a reasonably diligent manner in the ordinary course of
business, after providing such consultation pursuant to Section 5.2 below as is
practicable under the circumstances. Pioneer may conduct Repair which disturbs
or requires the disturbance, excavation or Remediation of the soil, sediment or
groundwater at the Site, within the Remediation Areas, if such Repair is
performed in a reasonable manner in the ordinary course of business, after
providing notice to OCC Tacoma and consultation pursuant to Section 5.2, except
in emergencies where such notice and consultation will be provided as soon as
practicable.
(b) If Pioneer encounters Hazardous Materials in the
subsurface at the Site related to pre-Closing Releases while conducting Repair,
the following provisions apply:
(i) *
(ii) *
(iii) *
(c) To the extent that the Repair pursuant to this Section
occurs before the * and results in the discovery of a Pre-Closing
Release of Hazardous Materials which (i) increases the cost or scope of the
Remediation of a Specified Environmental Condition or previously Identified
Environmental Condition (unless the Applicable Sunset Date for such condition
has previously occurred), the cost of Remediation of such Specified
Environmental Condition and previously Identified Environmental Condition (or
the increased Direct Cost thereof) will be * ; or (ii) gives rise to an
Identified Environmental Condition, the cost of Remediation of such Identified
Environmental Condition will be * .
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
14
<PAGE> 19
(d) In the event any Person other than Pioneer Chlor Alkali
Company, Inc. or its Affiliates conducts a Repair, such Person shall be
obligated to pay the costs and perform the Remediation * , it being the
express intent of the Parties that the obligations of OCC Tacoma under this
Section 2.7 shall be personal to Pioneer Chlor Alkali Company, Inc. and its
Affiliates and shall not be assignable or transferrable to any other Person.
SECTION 2.8 RESPONSIBILITY FOR SHARED OBLIGATIONS.
(a) In the event that there is a Release of a Hazardous
Material or a material or substance other than a Hazardous Material at the Site
after the Closing, other than by an Excluded Activity or by Treatment System
Operation (other than Improper Treatment System Operation), which directly
causes mixing or commingling with Hazardous Materials present in a Specified
Environmental Condition or an Identified Environmental Condition being
Remediated by or on behalf of OCC Tacoma, and which, subject to Section 2.11
below, increases the cost or scope of the Remediation of such Specified
Environmental Condition or increases the cost or scope of the Remediation of
such Identified Environmental Condition, Pioneer or its successors or assigns
or their respective Affiliates agrees to pay to OCC Tacoma the Direct Cost
(including the portion of the actual increased cost of operation and
maintenance directly caused by such Release and any additional capital cost)
incurred by OCC Tacoma and directly caused by such Release.
(b) To the extent that OCC Tacoma or any of its Affiliates is
Remediating a Specified Environmental Condition or an Identified Environmental
Condition, OCC Tacoma is also required until the Applicable Sunset Date to
Remediate * with respect to such Specified Environmental Condition or
Identified Environmental Condition, in Material Compliance with applicable
Orders, except to the extent that (i) Pioneer, its Affiliates or
Representatives, or activities, operations, events or occurrences on the Site
after the Closing other than Excluded Activities or Treatment System Operation
(other than Improper Treatment System Operation), Release * , and (ii) such
Release increases OCC Tacoma's Direct Cost in an amount which reaches the
threshold in Section 2.11. *
(c) To the extent that a Release by either Party or its
Affiliates, successors or permitted assigns, or which occurs on, at or from the
Site, after the Closing leads a Governmental Authority to require additional
Remediation, prior to the
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
15
<PAGE> 20
expiration of the Applicable Sunset Date, of a Specified Environmental
Condition or an Identified Environmental Condition previously Remediated by OCC
Tacoma or any of its Affiliates or by Pioneer or its Affiliates, successors or
assigns, OCC Tacoma agrees to perform (and/or to pay Response Costs of) the
Remediation pursuant to applicable Orders of the portion of the Environmental
Condition solely attributable to either pre-Closing Releases or post-Closing
Releases (in either case until the Applicable Sunset Date) directly caused by
Excluded Activities or Treatment System Operation (other than Improper
Treatment System Operation), and Pioneer agrees to perform (and/or to pay
Response Costs of) the Remediation pursuant to applicable Orders (including
repair, movement, relocation or functional replacement of Improvements
installed, constructed or used in the previous Remediation by OCC Tacoma)
solely attributable to post-Closing Releases not directly caused by Excluded
Activities or Treatment System Operation (other than Improper Treatment System
Operation).
(d) (i) Subject to Sections 2.3(c), 2.4(d), 2.5(b), 2.5(e),
3.3(a), 3.3(b) and 4.8(c), commencing upon Closing, Pioneer agrees to perform
Remediation of Post-Closing Environmental Conditions (and/or to pay Response
Costs therefor) and to Correct Post-Closing Environmental Violations (and/or to
pay Penalties therefor) which in each case is directly caused by (x) activities
or operations of Pioneer or its Affiliates or Representatives, or (y)
activities, operations, events or occurrences (I) on the Site after the
Closing, other than Excluded Activities or Treatment System Operation (other
than Improper Treatment System Operation), or (II) on any other real or
personal property owned or operated by Pioneer or its Affiliates, and in each
case as required by Orders and in Material Compliance with such Orders.
Subject to Section 2.12, OCC Tacoma agrees to perform Remediation of Post-
Closing Environmental Conditions (and/or to pay Response Costs therefor) and to
Correct Post-Closing Environmental Violations (and/or to pay Penalties
therefor), which in each case is directly caused by Excluded Activities and
Treatment System Operation (other than Improper Treatment System Operation) and
in each case as required by Orders and in Material Compliance with such Orders.
(ii) The obligations of Pioneer and OCC Tacoma under
subsection (d)(i) shall be limited as follows: Pioneer's and OCC Tacoma's
relative responsibilities for Post-Closing Environmental Conditions directly
caused by Treatment System Operation shall be governed by the Operating
Services Agreement, provided that Pioneer shall in no event be entitled to
receive Remediation Damages which result from its improper operation of the
groundwater treatment system. In addition, OCC Tacoma's responsibility for
Excluded Activities and Treatment System Operation, including any Post-Closing
Environmental Conditions and Post-Closing Environmental Violations directly
caused thereby and any Remediation Damages therefrom, shall terminate as set
forth in Section 2.12.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
16
<PAGE> 21
(e) Subject to Sections 2.3(c), 2.4(d), 2.5(b), 2.5(e),
3.3(a), 3.3(b) and 4.8(c), commencing upon Closing, Pioneer agrees to perform
Remediation of Pre-Closing Environmental Conditions (and/or to pay Response
Costs therefor) directly caused by substances or materials that (i) are not
Hazardous Materials on the date of this Agreement as defined in this Agreement
and (ii) are subsequently defined, identified or listed as "hazardous
substances" or "hazardous wastes" pursuant to Environmental Laws, in either
case required by Orders and in Material Compliance with such Orders, to the
extent that such substances or materials are not mixed or commingled with
Hazardous Materials being Remediated by OCC Tacoma in accordance with Sections
2.5(e) and 2.8(b).
(f) If the Parties disagree regarding the allocation of
responsibility for (i) Remediation of Environmental Conditions, (ii) Releases
of Hazardous Materials and/or other substances or materials, (iii) the
increased cost or scope of Remediation thereof or delay of or interference with
such Remediation, (iv) payment of Response Costs, (v) Correction of
Environmental Violations, or (vi) payment of Penalties for Environmental
Violations, such disagreement shall be submitted to dispute resolution pursuant
to Article VI below.
SECTION 2.9 *
SECTION 2.10 TERMINATION OF PIONEER'S RESPONSIBILITIES AND OBLIGATIONS
UNDER ARTICLE II. Pioneer's responsibility under this Article II shall
terminate on * , at which time Pioneer's obligations under Article II shall
cease automatically and be of no further force and effect; except for (x)
payments to OCC Tacoma Indemnified Persons then due and payable and not in
dispute pursuant to any pending Indemnity Claim accepted by Pioneer, if any,
(y) payments to OCC Tacoma Indemnified Persons subsequently determined in
dispute resolution or litigation to have been due and payable pursuant to any
pending Indemnity Claim in dispute on such termination date, and (z)
satisfaction of the obligation of Pioneer to substitute itself for OCC Tacoma
and its Affiliates for the matters set forth in Subsections 2.3(c) and 2.4(c);
and, provided, further, that the rights of Pioneer under this Section 2.10
shall be personal to Pioneer Chlor Alkali Company, Inc. and its Affiliates and
shall not be assignable or transferable to any other Person, notwithstanding
any other provision of this Agreement.
SECTION 2.11 LIMITATION ON PIONEER'S RESPONSIBILITY UNDER ARTICLE II.
Prior to the Applicable Sunset Date, Pioneer shall not be obligated to bear or
pay Damages, to perform any Remediation (and/or to pay Response Costs
therefor), or to perform Correction (and/or pay Penalties therefor), as the
case may be, pursuant to Subsections
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
17
<PAGE> 22
2.3(c), 2.4(d), 2.5(e), 2.6(b), 2.8(a) and 2.8(b) unless for any Specified
Environmental Condition, Identified Environmental Condition or Identified
Violation subject thereto, the Damages incurred by OCC Tacoma Indemnified
Persons pursuant to Orders are in an amount greater than or equal to * .
SECTION 2.12 RESPONSIBILITY FOR EXCLUDED ACTIVITIES. Subject to the
other provisions and limitations set forth in this Agreement (except for
Section 4.8), OCC Tacoma agrees to perform, either individually or in
conjunction with any of its Affiliates or a PRP Group, Remediation of Post-
Closing Environmental Conditions directly caused by Excluded Activities (and/or
to pay Response Costs therefor) and to Correct Post-Closing Environmental
Violations directly caused by Excluded Activities (and/or to pay Penalties
therefor), in each case required by Orders in Material Compliance with such
Orders, which Post-Closing Environmental Conditions or Post-Closing
Environmental Violations are subject to a Formal Agency Action or an Order
issued within * following the Excluded Activity and about which OCC Tacoma
has received an Environmental Claim or Indemnity Notice within such *
period; provided, however, notwithstanding any other provision of this
Agreement, the maximum aggregate liability of OCC Tacoma and its Affiliates for
Damages (including Remediation Damages, the cost of Remediation of Post-Closing
Environmental Conditions and the cost of Correction of Post-Closing
Environmental Violations) caused by Excluded Activities, shall be limited to
the Excluded Activity Aggregate Limit, regardless of the actual Damages of such
Excluded Activities, and Pioneer shall be responsible for any Damages
(including Remediation Damages, the cost of Remediation of Post-Closing
Environmental Conditions and the cost of Correction of Post-Closing
Environmental Violations) in excess of the Excluded Activity Aggregate Limit.
Amounts paid to or incurred by OCC Tacoma and its Affiliates to a PRP Group, or
incurred by a PRP Group on behalf of OCC Tacoma or its Affiliates, *
ARTICLE III
ENVIRONMENTAL INDEMNITIES
SECTION 3.1 INDEMNIFICATION BY OCC TACOMA FOR SPECIFIED ENVIRONMENTAL
CONDITIONS, IDENTIFIED ENVIRONMENTAL CONDITIONS, IDENTIFIED ENVIRONMENTAL
VIOLATIONS, COMMON LAW CLAIMS AND ENVIRONMENTAL CLAIMS. OCC Tacoma agrees to
provide the following indemnification in relation to its obligations set forth
in Article II above.
(a) Indemnification by OCC Tacoma for Excluded Environmental
Conditions. Subject to the terms of this Agreement, including Articles IV
through VI hereof, OCC Tacoma shall indemnify, defend and hold the Pioneer
Indemnified
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
18
<PAGE> 23
Persons harmless, commencing upon OCC Tacoma's receipt of an Indemnity Notice
from Pioneer, from and against all Damages, including Remediation Damages
(subject to Section 3.2 below), incurred by Pioneer Indemnified Persons to
perform necessary Remediation (and/or to pay Response Costs therefor) of each
Excluded Environmental Condition pursuant to applicable Orders or applicable
Formal Agency Actions and in Material Compliance therewith (which Remediation
OCC Tacoma or its Affiliates have failed to perform or to pay the Response
Costs therefor in accordance with Section 2.2 above), except to the extent that
such Pioneer Indemnified Persons have liability or responsibility for such
Excluded Environmental Condition pursuant to Subsection 2.2(b) above. The
obligations of OCC Tacoma under this Section 3.1(a), if any, shall survive the
Closing and continue in perpetuity, shall be personal to Pioneer Chlor Alkali
Company, Inc. and its Affiliates, and shall not be assignable or transferable
to any other Person.
(b) Indemnification by OCC Tacoma for Specified Environmental
Conditions. Subject to the terms of this Agreement, including Section 3.3 and
Articles IV through VI hereof, OCC Tacoma shall indemnify, defend and hold
Pioneer Indemnified Persons harmless, for the period commencing upon OCC
Tacoma's receipt of an Indemnity Notice from Pioneer and expiring on the
Applicable Sunset Date, from and against all Damages, including Remediation
Damages (subject to Section 3.2 below), incurred by Pioneer Indemnified Persons
to perform necessary Remediation (and/or to pay Response Costs therefor) of
each Specified Environmental Condition pursuant to applicable Orders or
applicable Formal Agency Actions and in Material Compliance therewith (which
Remediation OCC Tacoma or its Affiliates have failed to perform or to pay
Response Costs therefor in accordance with Section 2.3 above). *
(c) Indemnification by OCC Tacoma for Identified Environmental
Conditions and Identified Environmental Violations. Subject to the terms of
this Agreement, including Sections 2.4 and 3.3 and Articles IV through VI
hereof, OCC Tacoma shall indemnify, defend and hold Pioneer Indemnified Persons
harmless, for the period commencing upon OCC Tacoma's receipt of an Indemnity
Notice from Pioneer specifying an Identified Environmental Condition or
Identified Environmental Violation and expiring on the Applicable Sunset Date
for such Identified Environmental Condition or Identified Environmental
Violation, from and against all Damages, including Remediation Damages (subject
to Section 3.2 below), incurred by Pioneer Indemnified Persons, pursuant to
applicable Orders or applicable Formal Agency Actions and in Material
Compliance therewith, (i) to perform necessary Remediation (and/or to pay
Response Costs therefor) of any Identified Environmental Condition, and/or (ii)
to pay a Penalty assessed for, and/or to Correct, any Identified Environmental
Violation (in each case which OCC Tacoma or its Affiliates have failed to
Remediate, to Correct, or to pay Response Costs or Penalties therefor in
accordance with Section 2.4 above).
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
19
<PAGE> 24
(d) Indemnification by OCC Tacoma for Excluded Condition
Common Law Claims, Specified Condition Common Law Claims, Identified Common Law
Claims and Hylebos Area Common Law Claims. Subject to the other provisions of
this Agreement, including Sections 2.4(b) and 3.3 and Articles IV through VI
hereof, OCC Tacoma shall indemnify, defend and hold Pioneer Indemnified Persons
harmless, for the period commencing upon OCC Tacoma's receipt of the Indemnity
Notice from Pioneer and expiring upon the Applicable Sunset Date (except with
respect to Excluded Condition Common Law Claims), from and against all Damages,
including Remediation Damages (subject to Section 3.2 below), incurred by
Pioneer Indemnified Persons pursuant to Excluded Condition Common Law Claims,
Specified Condition Common Law Claims, Identified Common Law Claims and Hylebos
Area Common Law Claims.
(e) Indemnification by OCC Tacoma for Environmental Claims.
Subject to the other provisions of this Agreement, including Section 3.3 and
Articles IV through VI hereof, OCC Tacoma shall indemnify, defend and hold
Pioneer Indemnified Persons harmless, for the period commencing upon OCC
Tacoma's receipt of the Indemnity Notice from Pioneer specifying an
Environmental Claim and expiring (except with respect to Excluded Environmental
Conditions) upon the Applicable Sunset Date for such Environmental Claim, from
and against all Damages, including Remediation Damages (subject to Section 3.2
below), incurred by Pioneer Indemnified Persons pursuant to * provided,
however, (x) OCC Tacoma shall have no obligation under this clause (e) if such
Environmental Claim is based solely upon or caused solely by (I) the activities
of Pioneer, its Affiliates or Representatives, or (II) activities, operations,
events or occurrences on the Site after the Closing, other than Excluded
Activities or Treatment System Operation (other than Improper Treatment System
Operation), in which case * , and (y) OCC Tacoma's obligation of
indemnification and defense shall be shared and apportioned with Pioneer
pursuant to Section 4.2(h) and the Parties' respective indemnification
obligations under this Article III to the extent that * .
(f) Indemnification by OCC Tacoma for Excluded Activities.
Subject to the other provisions of this Agreement (other than Section 4.8(a)),
OCC Tacoma shall indemnify, defend and hold Pioneer Indemnified Persons
harmless, commencing upon OCC Tacoma's receipt of an Environmental Claim or an
Indemnity Notice specifying an Environmental Claim for Remediation of (and/or
payment of Response Costs for) a Post-Closing Environmental Condition or to
perform Correction of (and/or payment of Penalties for) a Post-Closing
Environmental Violation, in either case directly caused by an Excluded
Activity, from and against all Damages incurred in response to such
Environmental Claim or Indemnity Notice, including Remediation Damages (subject
to Section 3.2 below); provided that * provided, however,
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
20
<PAGE> 25
notwithstanding any other provision of this Agreement to the contrary, (i)
Pioneer Indemnified Persons shall in no event be entitled to recover, in the
aggregate, Damages with respect to Excluded Activities, including Remediation
Damages, to the extent such Damages cause OCC Tacoma Indemnified Persons to
incur aggregate liability for Excluded Activities, Post-Closing Environmental
Conditions, Post-Closing Environmental Violations and Remediation Damages in
excess of the Excluded Activity Aggregate Limit, and (ii) the maximum aggregate
liability of OCC Tacoma Indemnified Persons for Damages, Excluded Activities,
Post-Closing Environmental Conditions, Post-Closing Environmental Violations
and Remediation Damages, shall be the Excluded Activity Aggregate Limit.
SECTION 3.2 INDEMNIFICATION BY OCC TACOMA FOR REMEDIATION DAMAGES.
Subject to the other provisions of this Agreement, including Articles IV
through VI (other than Section 4.8(a)) hereof, OCC Tacoma shall indemnify,
defend and hold Pioneer harmless from and against all Remediation Damages
incurred by Pioneer for the period commencing at the Closing and expiring on
the Applicable Sunset Date; provided, however, notwithstanding any other
provision of this Agreement, Pioneer Indemnified Persons shall not be entitled
to recover, in the aggregate, Remediation Damages in excess of the Excluded
Activity Aggregate Limit, and the maximum aggregate liability of OCC Tacoma and
its Affiliates with respect to Excluded Activities, including Remediation
Damages, shall be the Excluded Activity Aggregate Limit. Pursuant to this
Section 3.2, OCC Tacoma shall provide In-Kind Product Replacement unless such
Products are not available to OCC Tacoma or its Affiliates from their
production of such Products after supplying their own internal needs for such
Products. * Pioneer shall execute a written acknowledgment of payment and
resolution of Remediation Damages with respect to such Remediation Event. *
This Section 3.2 shall be the sole and exclusive remedy for Remediation Damages
under this Agreement in accordance with Section 4.5 below, notwithstanding any
other provision of this Agreement, and disputes regarding the amount, scope or
basis of Remediation Damages shall be subject to dispute resolution pursuant to
Article VI. The rights of Pioneer Chlor Alkali Company, Inc. and its
Affiliates under this Section 3.2 shall not be assignable or transferrable to
any other Person, except to the extent expressly permitted under Section 7.10
herein. Absent such a permitted assignment, the obligations of OCC Tacoma
under this Section 3.2, if any, shall be personal to Pioneer Chlor Alkali
Company, Inc. and its Affiliates.
SECTION 3.3 INDEMNIFICATION BY PIONEER FOR SPECIFIED ENVIRONMENTAL
CONDITIONS, IDENTIFIED ENVIRONMENTAL CONDITIONS, IDENTIFIED ENVIRONMENTAL
VIOLATIONS, ENVIRONMENTAL CLAIMS OR OTHER ENVIRONMENTAL MATTERS. Subject to
the terms of this Agreement, including Sections 3.1 and 3.2 and Articles IV
through VI, Pioneer agrees to provide the following indemnification in relation
to its obligations set forth in Article II above.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
21
<PAGE> 26
(a) Indemnification by Pioneer for Specified Environmental
Conditions and Specified Condition Common Law Claims Arising Therefrom.
Pioneer shall indemnify, defend and hold OCC Tacoma Indemnified Persons
harmless from and against all Damages arising from, or related to, each
Specified Environmental Condition and each Specified Condition Common Law Claim
* , as follows: (i) prior to the Applicable Sunset Date and subject to
Section 2.5(e), in the event that Pioneer Indemnified Persons, or activities,
operations, events or occurrences on the Site after the Closing, other than
Excluded Activities or Treatment System Operation (other than Improper
Treatment System Operation), either (1) Release Hazardous Materials or other
substances or materials that mix or commingle with a Specified Environmental
Condition, or (2) otherwise directly cause an increase in the cost or scope of
the Remediation of a Specified Environmental Condition, Pioneer shall, subject
to the terms of Article IV below (including Section 4.8), indemnify, defend and
hold OCC Tacoma Indemnified Persons harmless from and against all Damages to
the extent incurred by OCC Tacoma to perform necessary Remediation pursuant to
applicable Orders or applicable Formal Agency Actions and in Material
Compliance therewith, to pay such increased cost or scope of Remediation, or
pursuant to any Specified Condition Common Law Claims * ; and (ii) from and
after the Applicable Sunset Date for each Specified Environmental Condition and
each Specified Condition Common Law Claim arising therefrom, Pioneer shall,
subject to the terms of Article IV below except Section 4.8, indemnify, defend
and hold OCC Tacoma Indemnified Persons harmless from and against all Damages
arising from, or related to, such Specified Environmental Condition or any
Specified Condition Common Law Claim * .
(b) Indemnification by Pioneer for Identified Environmental
Conditions and Identified Environmental Violations, and Identified Common Law
Claims Arising Therefrom. Pioneer shall indemnify, defend and hold OCC Tacoma
Indemnified Persons harmless from and against all Damages arising from, or
related to, Identified Environmental Conditions or Identified Environmental
Violations, and from Identified Common Law Claims * , as follows: (i)
prior to the Applicable Sunset Date, in the event that Pioneer Indemnified
Persons, or activities, operations, events or occurrences on the Site after the
Closing other than Excluded Activities or Treatment System Operation (other
than Improper Treatment System Operation) Release Hazardous Materials that mix
or commingle with, an Identified Environmental Condition, or otherwise increase
the cost or scope of the Remediation of an Identified Environmental Condition,
the amount of Natural Resource Damages awarded under CERCLA, or the Correction
of any Identified Environmental Violation, or for any Identified Common Law
Claim * , Pioneer shall, subject to the terms of Article IV below
(including Section 4.8), indemnify, defend and hold OCC Tacoma Indemnified
Persons harmless from and against all Damages incurred by OCC Tacoma
Indemnified Persons to perform necessary Remediation pursuant to applicable
Orders or applicable
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
22
<PAGE> 27
Formal Agency Actions in Material Compliance therewith subject to Section
2.5(e), to pay such contribution or increased cost thereof subject to Section
2.5(e), or pursuant to any Identified Common Law Claim * ; and (ii) from
and after the Applicable Sunset Date for the Identified Environmental Condition
or the Identified Environmental Violation, Pioneer shall, subject to the terms
of Article IV below except Section 4.8, indemnify, defend and hold OCC Tacoma
Indemnified Persons harmless from and against all Damages arising from such
Identified Environmental Condition or Identified Environmental Violation or any
Identified Common Law Claim * .
(c) Indemnification by Pioneer for Environmental Matters
Generally. Subject to the other provisions of this Agreement, including
clauses (a) and (b) of this Section 3.3, and without regard to Section 4.8
below, Pioneer shall release, indemnify, defend and hold OCC Tacoma
Indemnified Persons harmless from and against all Damages arising from
Environmental Matters, whether known or unknown, absolute, accrued, contingent,
fixed or otherwise, except * .
(d) Indemnification by Pioneer for Excluded Activities. Once
the Excluded Activity Aggregate Limit has been reached, Pioneer shall
indemnify, defend and hold OCC Tacoma Indemnified Persons harmless from and
against all Damages, including Remediation Damages, that are subject to the
Excluded Activity Aggregate Limit. *
(e) Indemnification by Pioneer for Post-Closing Environmental
Violations and Post-Closing Environmental Conditions. Pioneer shall indemnify,
defend and hold OCC Tacoma Indemnified Persons harmless from and against all
Damages incurred by OCC Tacoma Indemnified Persons arising from or related to
any Post-Closing Environmental Violation or Post-Closing Environmental
Condition including any Environmental Claim arising from or related to a Post-
Closing Environmental Violation, except * .
SECTION 3.4 OTHER INDEMNIFICATION. Subject to the terms of this
Agreement, including Articles IV through VI, each Party agrees that, if and to
the extent that it breaches its obligations pursuant to Sections 2.5, 2.6, 2.7,
2.8 and 2.9, that Party shall indemnify, defend and hold harmless the other
Party and the other Party's Indemnified Persons against Damages for Remediation
of Environmental Conditions and/or payment of Response Costs therefor and for
Correction of Environmental Violations and/or payment of Penalties therefor as
expressly set forth in Sections 2.5, 2.6, 2.7, 2.8 and 2.9, in accordance with
the terms and limitations of those sections.
SECTION 3.5 TERMINATION OF PIONEER'S RESPONSIBILITIES AND OBLIGATIONS
UNDER ARTICLE III. Pioneer's responsibility under this Article III shall
terminate on * , at which time Pioneer's obligations under Article III
shall cease automatically and
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
23
<PAGE> 28
be of no further force and effect; provided, however, that to the extent that
Pioneer or any of its Affiliates has not (A) made all payments to OCC Tacoma
Indemnified Persons then due and payable and not in dispute pursuant to any
pending Indemnity Claim accepted by Pioneer, if any, (B) made all payments to
OCC Tacoma Indemnified Persons subsequently determined in dispute resolution or
litigation to have been due and payable pursuant to any pending Indemnity Claim
in dispute on such termination date, or (C) satisfied the obligation of Pioneer
to substitute itself for OCC Tacoma and its Affiliates for the matters set
forth in Sections 2.3(c) and 2.4(c), the termination of Pioneer's obligations
under this Article III shall not occur until all such payments have been made
and such obligation has been fully satisfied; and, provided, further, that the
rights of Pioneer under this Section 3.5 shall be personal to Pioneer Chlor
Alkali Company, Inc. and its Affiliates and shall not be assignable or
transferrable to any other Person, notwithstanding any other provision of this
Agreement.
ARTICLE IV
CLAIM AND INDEMNITY PROCEDURES
SECTION 4.1 NOTICE OF ENVIRONMENTAL AND COMMON LAW CLAIMS AND ORDERS.
Within thirty (30) days of receipt of a written Underlying Claim, the Party
receiving such Underlying Claim shall provide a Claim Notice or an Order Notice
to the other Party, enclosing documentation of such Underlying Claim, and
stating whether such Claim Notice or Order Notice is intended by such Party to
constitute (in conjunction with other information required in Section 4.2(a)
below) an Indemnity Claim. Upon receipt of a Claim Notice or Order Notice
which is not identified as an Indemnity Claim, the Party receiving such Notice
may choose, in its reasonable discretion, to accept such notice as an Indemnity
Notice and assume the defense against such Underlying Claim as set forth in
Section 4.2 below by delivering written notice to the Indemnified Person within
thirty (30) days of receipt.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
24
<PAGE> 29
SECTION 4.2 INDEMNIFICATION PROCEDURES.
(a) Notice of Indemnity Claim. Within thirty (30) days after
an Indemnified Person receives written notice of an Underlying Claim that
constitutes an Indemnity Claim under this Agreement, the Indemnified Person
(and/or Pioneer or OCC Tacoma, as applicable) shall, if an Indemnity Claim is
to be made pursuant to this Agreement, provide an Indemnity Notice in writing
to the Indemnifying Party. The Indemnified Person shall supplement such
Indemnity Notice as reasonably requested in writing by the Indemnifying Party.
The Indemnity Notice shall set forth the Indemnified Person or Persons, an
explanation of the basis of the Indemnity Claim, the Section of this Agreement
under which defense and indemnification is sought, the amount, to the extent
known or estimated, of such Indemnity Claim sought by the Indemnified Person, a
list identifying, to the extent known or estimated, each separate item and
amount of Damages and each separate Underlying Claim, and the Claim Notice or
Order Notice on which such Indemnity Claim is based. Failure of an Indemnified
Person (and/or Pioneer or OCC Tacoma, as applicable) to provide a proper
Indemnity Notice pursuant to this Section 4.2, and a Claim Notice or Order
Notice pursuant to Section 4.1, to the Indemnifying Party within the required
thirty (30)-day period shall relieve such Indemnifying Party from any liability
or obligation which it may have under this Agreement either (i) to the extent,
but only to the extent, of any material detriment suffered by the Indemnifying
Party as a result of such failure, or (ii) if the Claim Notice or Order Notice
with respect to an Underlying Claim issued between the Closing and the Early
Sunset Date has not been provided to the Indemnifying Party within ninety (90)
days following the occurrence of an Early Sunset Date as provided in this
Agreement.
(b) Response to Indemnity Claim. The Indemnifying Party shall
respond in writing to the Indemnified Person (and to Pioneer or OCC Tacoma, as
applicable) within thirty (30) days of receipt of the Indemnity Notice. The
Indemnifying Party shall respond in one of the following ways: (i) accept the
Indemnity Claim for defense and indemnification without reservation of rights,
either immediately or upon the Indemnified Person's incurring Damages
exceeding the threshold amount under Section 4.8, if applicable, (ii) accept
the defense of the Underlying Claim, subject to reservation of rights upon
further factual determination during the defense and resolution of such Claim
as described in subsection (c) below and subject to dispute resolution, (iii)
elect to perform factual investigation of the Indemnity Claim for a period of
six (6) months or such other period as agreed by the Indemnifying Party and the
Indemnified Person (and/or Pioneer or OCC Tacoma, as applicable) to determine
whether the Indemnity Claim is valid, (iv) request clarification or further
information regarding the Indemnity Claim from the Indemnified Person (and/or
Pioneer or OCC Tacoma, as applicable), or (v) reject the Indemnity Claim.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
25
<PAGE> 30
(c) Defense of the Underlying Claim. If the Indemnifying
Party accepts the defense of the Indemnity Claim either in the initial response
to the Indemnity Claim pursuant to clauses (i) or (ii) above, or following
further investigation or clarification pursuant to clauses (iii) or (iv) above,
the Indemnifying Party may in its sole discretion either (1) undertake the
defense against the Underlying Claim by Representatives chosen by it which are
reasonably acceptable to the Indemnified Person or (2) reimburse the
Indemnified Person for its defense against the Underlying Claim, using
Representatives chosen by the Indemnified Person which are reasonably
acceptable to the Indemnifying Party. The Person undertaking the defense (the
Indemnifying Party on the one hand, or the Indemnified Person on the other
hand) shall keep the other Person or Party reasonably informed of the defense
against or settlement or disposition of an Underlying Claim. The Indemnifying
Party and the Indemnified Person shall consult with each other, to the extent
either reasonably requests, with respect to the defense against or settlement
or disposition of an Underlying Claim, and shall cooperate in such defense.
The Indemnified Person shall make, at its sole cost and expense except for
reasonable reproduction charges, records and Representatives reasonably
available to the Indemnifying Party for use in defending against or disposing
of or settling an Underlying Claim, and shall take those reasonably diligent
actions within its power which are necessary to preserve legal defenses to such
Underlying Claim.
(d) Failure to Defend. If the Indemnifying Party rejects an
Indemnity Claim or, within thirty (30) days after notice of an Indemnity Claim,
fails to undertake, or to agree to reimburse the cost of, the defense against
an Underlying Claim, the Indemnified Person shall have the right to undertake
the defense against the Underlying Claim with Representatives chosen by it in
its reasonable discretion; provided, however, that the Indemnifying Party shall
thereafter have the right to assume the defense against the Underlying Claim if
the Indemnifying Party responded to the Indemnity Notice pursuant to Section
4.2(b)(iii) or (iv). In the event that the Indemnity Claim is determined to be
valid, the Damages of the Indemnified Person shall include its reasonable costs
and expenses, including reasonable fees and expenses of attorneys, consultants
and experts incurred in any such defense of such Claim. Notwithstanding the
foregoing, the Indemnified Person shall have no right to settle or compromise
any such Claim for which the Indemnified Person has sought or will seek
indemnification from the Indemnifying Party without providing thirty (30) days'
notice to, and without the prior written consent of, the Indemnifying Party,
which consent shall not be unreasonably withheld or delayed; provided, however,
that if any Governmental Authority's or Third Party's offer of settlement
solely for money is proffered by the Indemnified Person to the Indemnifying
Party and is not consented to by the Indemnifying Party, then the Indemnifying
Party shall be deemed to have waived any rights it may otherwise have retained
to contest the validity of any Damages awarded against the Indemnifying Party
and/or Indemnified Person in favor
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
26
<PAGE> 31
of such Governmental Authority or Third Party to the extent that the award in
such judgment exceeds the offer of settlement.
(e) Negotiation with Governmental Authorities. (i) In the
event that a Governmental Authority initiates negotiations with Pioneer or
Pioneer Indemnified Persons for an Administrative Order or Court Order or
Formal Agency Action addressing any Excluded Environmental Condition, Specified
Environmental Condition, Identified Environmental Condition, Identified
Environmental Violation or Environmental Claim, for which indemnity is being or
will be sought from OCC Tacoma, and provided that OCC Tacoma has neither failed
to respond to an Indemnity Notice therefor pursuant to Subsection 4.2(b) above
nor rejected such Indemnity Claim, Pioneer shall not, and shall cause its
Indemnified Persons not to, engage in such negotiations or enter into or accede
to an Administrative Order or Court Order or Formal Agency Action without
providing notice to OCC Tacoma and, at OCC Tacoma's option, Pioneer and Pioneer
Indemnified Persons must take all reasonable and practicable efforts to include
OCC Tacoma in such negotiations. If OCC Tacoma is defending or participating in
the defense of any Pioneer Indemnified Person pursuant to this Article IV with
respect to such Order or Formal Agency Action, OCC Tacoma shall have no
obligation to perform or pay for the actions required by the Order or Formal
Agency Action, or voluntarily pursued by Pioneer Indemnified Persons, nor to
pay any Damages of any Pioneer Indemnified Person relating to the Order or
Formal Agency Action or such voluntary activities, unless OCC Tacoma has been
provided a meaningful opportunity to participate in the negotiations. In
addition, OCC Tacoma shall thereafter have the right to assume control of
negotiations with Governmental Authorities if OCC Tacoma responded to the
Indemnity Notice pursuant to Section 4.2(b)(iii) or (iv) and thereafter assumes
the defense pursuant to Section 4.2(d).
(ii) Conversely, in the event that a Governmental
Authority initiates negotiations with OCC Tacoma Indemnified Persons for an
Administrative Order or Court Order or Formal Agency Action addressing any
Post-Closing Environmental Condition (except one directly caused by an Excluded
Activity) or other Environmental Matter that does not constitute an Excluded
Environmental Condition, Specified Environmental Condition, Identified
Environmental Condition, Identified Environmental Violation or Environmental
Claim in which a Governmental Authority or a Third Party seeks to impose or
asserts a Formal Agency Action or an Order with respect to an Identified
Environmental Condition or an Identified Environmental Violation, for which
indemnity is or will be sought from Pioneer, and provided that Pioneer has
neither failed to respond to an Indemnity Notice therefor pursuant to
Subsection 4.2(b) above nor rejected such Indemnity Claim, OCC Tacoma shall
not, and shall cause its Indemnified Persons not to, engage in such
negotiations or enter into or accede to an Administrative Order or Court Order
or a Formal Agency Action without providing notice to Pioneer and, at Pioneer's
option, OCC Tacoma and OCC
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
27
<PAGE> 32
Tacoma Indemnified Persons must take all reasonable and practicable efforts to
include Pioneer in such negotiations. If Pioneer is defending or participating
in the defense of any OCC Tacoma Indemnified Persons pursuant to this Article
IV with respect to such Order or Formal Agency Action, Pioneer shall have no
obligation to perform or pay for the actions required by the Order or Formal
Agency Action, or voluntarily pursued by OCC Tacoma Indemnified Persons, nor to
pay any Damages of any OCC Tacoma Indemnified Person relating to such Order or
Formal Agency Action or such voluntary activities, unless Pioneer has been
provided a meaningful opportunity to participate in the negotiations. In
addition, Pioneer shall thereafter have the right to assume control of
negotiations with Governmental Authorities if Pioneer responded to the
Indemnity Notice pursuant to Section 4.2(b)(iii) or (iv) and thereafter assumes
the defense pursuant to Section 4.2(d).
(iii) Subject to Sections 4.2(d), 4.7 and 5.2 and subject
to the Indemnifying Party's right to assume control of negotiations with
Governmental Authorities if the Indemnifying Party responded to the Indemnity
Notice pursuant to Section 4.2(b)(iii) or (iv) and thereafter assumes the
defense pursuant to Section 4.2(d), in the event that the Indemnifying Party
has failed to respond to an Indemnity Notice pursuant to Section 4.2(b) or has
rejected an Indemnity Claim, the Indemnified Person may engage in negotiations
with Governmental Authorities, enter into or accede to an Order or Formal
Agency Action, and take such other steps as are reasonable and appropriate with
respect thereto, after providing an initial notice to the Indemnifying Party
regarding its intention to take such action and, at the Indemnifying Party's
request, taking reasonable and practicable efforts to include the Indemnifying
Party in such negotiations.
(f) Settlement or Other Disposition of Underlying Claims.
After consultation pursuant to Section 5.2 below, the Indemnifying Party shall
have the sole right to compromise or settle or otherwise dispose of such
Underlying Claim in any manner it deems appropriate without the Indemnified
Person's consent, provided that (i) such settlement or disposition does not
impose a material obligation on the Indemnified Person (except by virtue of the
occurrence of an Applicable Sunset Date), and (ii) the Indemnifying Party is
and will be fully capable of performing its obligations pursuant to such
settlement or disposition. In the event that clause (i) or (ii) in the
preceding sentence is not met with respect to a particular settlement or
disposition of an Underlying Claim, the Indemnifying Party shall notify the
Indemnified Person of the proposed settlement or disposition and obtain the
Indemnified Person's consent, which shall not be unreasonably withheld or
delayed; provided, however, that if any Governmental Authority's or Third
Party's offer of settlement solely for money is proffered by the Indemnifying
Party to the Indemnified Person and is not consented to by the Indemnified
Person, then the Indemnified Person shall be deemed to have waived any rights
it may otherwise have retained to contest the
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
28
<PAGE> 33
validity of any Damages awarded in favor of such Governmental Authority or
Third Party to the extent that the award in such judgment exceeds the offer of
settlement.
(g) Responsibility for and Reclassification of an Indemnity
Claim. (i) If the Indemnifying Party accepts the defense and/or
indemnification of an Indemnity Claim pursuant to Section 4.2, or deems a Claim
Notice or an Order Notice to be an Indemnity Claim pursuant to Section 4.1, and
such Indemnity Claim is subsequently determined by the Indemnifying Party,
during the defense, adjudication, settlement or other disposition of the
Underlying Claim, not to be subject to indemnification pursuant to this
Agreement, the Indemnifying Party shall, within thirty (30) days of such
determination notify the Indemnified Person and either Pioneer or OCC Tacoma,
as applicable, in writing, accompanied by an explanation of the basis for such
determination and all supporting documentation reasonably available. The
Indemnified Person and/or Pioneer or OCC Tacoma, as applicable, shall assume
the defense and/or indemnification of such Underlying Claim, with
Representatives chosen by it, unless such Party or Person disputes such
responsibility in writing within thirty (30) days of receipt of such notice.
Rejection of responsibility shall be subject to dispute resolution.
(ii) Either the Indemnified Person or Pioneer or OCC
Tacoma, as applicable, may request reclassification of an Indemnity Claim
between an Excluded Environmental Condition, a Specified Environmental
Condition, an Identified Environmental Condition or a Post-Closing
Environmental Condition (or with respect to an Excluded Condition Common Law
Claim, a Specified Condition Common Law Claim or an Identified Common Law
Claim) within thirty (30) days of the date such Indemnity Claim is determined
by such Party to be subject to a different classification, subject to the
procedures (including the right of the recipient of such notice to object, and
dispute resolution) set forth above. Notwithstanding any other provision of
this Article IV, no Indemnified Person (or Pioneer or OCC Tacoma, as
applicable) shall be entitled to recover defense costs such Indemnified Person
(or Pioneer or OCC Tacoma, as applicable) incurred prior to such a
reclassification, unless such defense costs were incurred pursuant to a
temporary allocation pursuant to subsection (h) below or were incurred subject
to dispute resolution.
(iii) A determination under the first sentence of clause
(i) and (ii) above must be made by written notice * , unless the
classification of such Underlying Claim is disputed, in which event the dispute
shall be subject to dispute resolution under Article VI below. Prior to final
resolution of a disputed classification, the Underlying Claim shall be presumed
to be, for purposes of any monetary limitations set forth herein, subject to
the dollar limitations of the classification alleged which has the lowest
dollar limit, provided that upon such resolution any amounts that
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
29
<PAGE> 34
otherwise would have been paid to the other Party at the classification so
determined shall promptly be paid.
(h) Cross Indemnification and Allocation. In the event that
both Parties are Indemnifying Parties with respect to a particular Underlying
Claim, either pursuant to sharing of responsibility pursuant to Section 2.5,
2.6, 2.7 or 2.8, insufficient information concerning the factual or legal basis
of the Underlying Claim, or otherwise, the Parties shall cooperate in the
defense against such Underlying Claim, and shall negotiate, using dispute
resolution if necessary, to determine a temporary or final allocation of the
defense and indemnification of such Underlying Claim. If the Parties and their
respective Indemnified Persons are unable to reach an allocation, the Parties
shall each be entitled to defend themselves with Representatives of their
choice, pending resolution of the dispute.
(i) Transition. With respect to those Specified Environmental
Conditions, Identified Environmental Conditions, Identified Environmental
Violations, Common Law Claims, or other Environmental Matters for which Pioneer
is or may be liable as the result of the occurrence of an Applicable Sunset
Date, OCC Tacoma and its Affiliates shall at a reasonable and appropriate time,
* as applicable, (1) provide copies of all correspondence and other
documentation related to such matter to Pioneer, and (2) provide Pioneer with
notice of, and an opportunity to attend or observe and, subject to Sections
2.4(b)(i)(A)(1) and (2) or 5.10(c), to reasonably participate in, all meetings
and communications with Governmental Authorities and Third Parties regarding
such matter, subject to OCC Tacoma's control of such correspondence,
documentation, meetings and communications. Pioneer shall be responsible for
any additional Damages for Remediation of Environmental Conditions (and/or to
pay Response Costs therefor), and Correction of Environmental Violations
(and/or to pay Penalties therefor), subject to a Formal Agency Action or Order,
and Common Law Claims or Environmental Claims, in each case which result from
participation by Pioneer or its Affiliates or their Representatives in any
meetings or communications with Governmental Authorities or Third Parties.
(j) Notice Period Following Applicable Sunset Date or Other
Termination. An Indemnity Notice that meets the terms of Sections 4.1 or 4.2
(including the thirty (30)-day notice provisions therein) is timely if
submitted by the Indemnified Person within ninety (90) days following the
occurrence of an Applicable Sunset Date or other termination of an Indemnifying
Party's obligation to indemnify, defend or hold such Indemnified Person
harmless, provided that the Underlying Claim was issued and the amount for
which such indemnification and/or defense is sought was expended prior to the
occurrence of such Applicable Sunset Date or other termination of the
Indemnifying Party's obligation. The occurrence of an Applicable Sunset Date
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
30
<PAGE> 35
or other termination of the Indemnifying Party's obligation shall not terminate
any Indemnity Claim (or the Indemnifying Party's obligation with respect to the
Underlying Claim on which such Indemnity Claim is based) which is subject to
dispute resolution or litigation and pending on the date upon which the
Applicable Sunset Date or other termination of the Indemnifying Party's
obligation occurs, and any such termination shall not relieve the Indemnifying
Party of any of its obligations subsequently determined in dispute resolution
or litigation to have been due and payable at such time pursuant to such
pending Indemnity Claim.
SECTION 4.3 PAYMENT.
(a) Reimbursement. Unless the Indemnifying Party provides a
defense pursuant to Section 4.2 above, the Indemnifying Party shall reimburse
each Indemnified Person for all reasonable costs and expenses of defense
(including reasonable fees of attorneys, consultants and experts) for which the
Indemnified Person is entitled to be indemnified hereunder within thirty (30)
days of the date such Indemnifying Party receives written notice of an invoice
from such Indemnified Person. The Indemnifying Party shall pay any claims for
indemnification under this Article IV (other than costs and expenses of defense
costs as set forth in the preceding sentence) within the later of (i) sixty
(60) days after its receipt of a proper notice of such Indemnity Claim under
Section 4.2 or (ii) any later date on which the Indemnified Person is obligated
to pay a Governmental Authority or Third Party pursuant to the Underlying
Claim; provided, however, that if, within such sixty (60)-day period, the
Indemnifying Party notifies the Indemnified Person of a good faith objection to
such payment, accompanied by an explanation of the basis for such objection and
supporting documentation then available, then payment shall be made promptly
after such time, if ever, as it is finally determined that such Indemnity Claim
is entitled to indemnification hereunder, and the extent or amount subject to
indemnity hereunder (together with interest, if applicable, as provided in
subsection (b) below).
(b) Attorneys' Fees and Interest. If an Indemnifying Party is
determined by a final and non-appealable judgment of a court of competent
jurisdiction to have breached its obligation to indemnify an Indemnified Person
hereunder, the Indemnified Person shall, subject to Section 4.7 below, be
entitled to receive from the Indemnifying Party, in addition to all other
amounts due hereunder (including amounts due for costs and expenses of defense,
if any, pursuant to Section 4.2(d)), (i) its court costs and reasonable fees of
attorneys, consultants or experts in enforcing its Indemnity Claim against the
Indemnifying Party, and (ii) interest on all amounts otherwise paid by the
Indemnified Person in respect of such breach from the date of the breach at *
percent * per annum (but not in excess of the maximum lawful rate permitted
by applicable law). If an Indemnifying Party fails to pay an amount later
determined to be due to an Indemnified Person through dispute resolution
pursuant to Article VI herein,
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
31
<PAGE> 36
then such Indemnifying Party shall also pay to the Indemnified Party interest
on the amount due from the date such amount would have been payable but for the
dispute at a rate of * percent * per annum (but not in excess of the
maximum lawful rate).
SECTION 4.4 *
SECTION 4.5 EXCLUSIVE REMEDY FOR CLAIMS REGARDING ENVIRONMENTAL LAWS
OR ENVIRONMENTAL MATTERS. The right of indemnification set forth in this
Agreement shall be the sole and exclusive remedy of the Parties and the
Indemnified Persons with respect to each other with respect to the inaccuracy
of any representation or the breach of any warranty, covenant or agreement made
by OCC Tacoma or Pioneer in this Agreement or arising in connection with or
related in any way to the subject matter of this Agreement, including any
Environmental Laws, Environmental Matters, and the CB/NT Site. Each Party
hereby waives and relinquishes any other rights, remedies, causes of action or
other claims in respect of any such inaccuracy or breach including equitable
and common law rights and rights created by statute, which such Party or its
Indemnified Persons would otherwise have for any such inaccuracy or breach or
with respect to this Agreement or any liability or Damages arising from, or
related to, the subject matter of this Agreement, including any liability
arising from, or related to, Environmental Laws, Environmental Matters or the
CB/NT Site; provided, however, that this Section 4.5 shall not affect the
rights of any Party or its Affiliates under the Asset Purchase Agreement or any
Related Agreement.
SECTION 4.6 *
SECTION 4.7 MITIGATION OF DAMAGES. Each Party shall take all such
reasonable actions as may be necessary to mitigate Damages for which such Party
claims or may claim defense or indemnification, or may be responsible, under
Article II or III of this Agreement, including mitigation of Damages reasonably
anticipated in connection with matters subject to the sole discretion or
exclusive control of such Party hereunder.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
32
<PAGE> 37
SECTION 4.8 LIMITATIONS ON INDEMNIFICATION.
(a) Except with respect to (i) the obligations set forth in
Sections 2.6, 2.7, 3.2 and 3.3(c), and (ii) OCC Tacoma after the Applicable
Sunset Date with respect to a particular Specified Environmental Condition,
Identified Environmental Condition, Identified Environmental Violation or
Excluded Activity, neither the OCC Tacoma Indemnified Persons, prior to the
Applicable Sunset Date for a particular Environmental Condition or
Environmental Violation, nor the Pioneer Indemnified Persons , shall be
entitled to indemnification unless for any individual Indemnity Claim, the
Damages incurred by the Indemnified Group is in an amount greater than *
excluding Remediation Damages. Once the individual threshold has been reached
with respect to any Indemnity Claim against OCC Tacoma or Pioneer, as
applicable, by such Indemnified Group, such Indemnity Claim against such
Indemnifying Party shall be entitled to full indemnification as provided
pursuant to this Article IV.
(b) In addition to the threshold set forth above, in no event
shall Pioneer Indemnified Persons be entitled to recover, in the aggregate,
Damages with respect to Excluded Activities, including Remediation Damages, in
excess of the Excluded Activity Aggregate Limit, and the maximum aggregate
liability of OCC Tacoma and its Affiliates with respect to Excluded Activities,
including Remediation Damages, shall be the Excluded Activity Aggregate Limit.
(c) *
ARTICLE V
SITE MANAGEMENT
SECTION 5.1 DESIGNATION OF PROJECT MANAGERS. Each Party shall
designate by notice to the other Party a Project Manager and an Alternate
Project Manager. The respective Project Managers shall be responsible for
coordination of (a) access to the Site pursuant to the Environmental Easement
described in Section 5.7 below, (b) Remediation of Environmental Conditions,
(c) Correction of Environmental Violations, (d) Repair, (e) Expansion, (f)
sharing of Information regarding items (a) through (e) above, subject to
establishing applicable privileges, defense and indemnification under Article
III, and (g) other activities of the Parties, their respective Affiliates, or
any of their respective Representatives at or in the vicinity of the Site
pursuant to this Agreement. Each Party shall pay for the Employee Costs and
all overhead of its designated Project Manager and Alternate Project Manager.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
33
<PAGE> 38
SECTION 5.2 CONSULTATION. The Project Managers shall consult by
telephone or in person, not less than monthly, and more frequently as
necessary, regarding the activities described in Section 5.1 above. Prior to
performing any Remediation (other than an Unscheduled Remediation Event),
Correction, Repair which involves scheduled power outages or subsurface
disturbance. Expansion or other activities which may affect the performance of
obligations or liabilities under this Agreement (in each case other than
emergencies), the Project Manager for the Party proposing to perform such
activities shall notify the Project Manager for the other Party, except in
emergencies where such consultation shall occur as soon as practicable. The
consultation in this Section 5.2 specifically requires the Party proposing the
Remediation (other than an Unscheduled Remediation Event), Correction, Repair
which involves scheduled power outages or subsurface disturbance (in each case
other than emergencies), Expansion or other activities pursuant to the
Agreement to (a) provide non-privileged work plans, maps, diagrams and
schedules under which any such activities would be conducted (although such
Party may provide privileged documents pursuant to the Joint Defense Agreement
attached hereto as Exhibit 1) to the Project Manager for the other Party, (b)
provide reasonable opportunity for the Project Manager of the other Party to
review and comment on the planning documents and schedules, taking into account
exigent circumstances and applicable Orders, and (c) attempt to mitigate in a
reasonable manner any impacts on the activities or operations of the other
Party; provided that the obligation to mitigate shall not require a Party to
incur costs in excess of the amount such Party would reasonably anticipate to
incur absent such mitigation, but shall require that such Party consider
alternative activities of equal or lesser cost that may achieve a substantially
similar result while causing less impact on the other Party; and provided
further that the right of a Party to proceed with activities shall be
determined by the provisions of Article II of this Agreement. Consultation
under this Section 5.2 shall not constitute notice under this Agreement, which
must be provided pursuant to Section 7.7.
SECTION 5.3 PERIODIC REPORTING. Each Party (or its designated
Affiliates) shall provide written notice to the other Party to keep the other
Party and such other Party's Project Manager informed on a periodic basis, but
not less than quarterly, and in response to reasonable written inquiries of
such other Party, of the status of any Repair which involves scheduled power
outages or subsurface disturbance or which is otherwise material, Expansion,
Remediation of Excluded Environmental Conditions, Specified Environmental
Conditions, Identified Environmental Conditions, Post-Closing Environmental
Conditions, Correction of Identified Environmental Violations or Post-Closing
Environmental Violations or the defense and/or indemnification of any
Environmental Claims or Common Law Claims being conducted by the Party pursuant
to this Agreement. Each Party shall provide notice within thirty (30) days
after receipt of a Discharge, Approval Letter or other termination of an
Environmental Claim or a
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
34
<PAGE> 39
Common Law Claim, along with a copy thereof, and of any payment or commitment
which causes the Aggregate OCC Tacoma Liability Limit, the Excluded Activity
Aggregate Limit or the Physical Change Aggregate Limit to be reached.
SECTION 5.4 QUARTERLY STATEMENTS OF CERTAIN COSTS AND DAMAGES BY OCC
TACOMA. OCC Tacoma shall provide written notice to Pioneer (a) on a quarterly
basis certifying and describing amounts spent pursuant to this Agreement which
are applied toward the OCC Tacoma Aggregate Liability Limit, the Physical
Change Aggregate Limit, the Excluded Activity Aggregate Limit or the applicable
thresholds under Section 4.8 above, and providing supporting documentation, and
(b) in the form of an invoice (not less than quarterly if any Indemnity Claim
by OCC Tacoma Indemnified Persons is then pending) certifying and describing
any Damages, Direct Costs or other amounts for which it (or any of its
Indemnified Persons) seek reimbursement, defense and/or indemnification
(including amounts below the applicable thresholds of Section 4.8 if such
Indemnified Persons intend to seek defense and/or indemnification against the
Underlying Claim) from Pioneer or its Affiliates, successors or permitted
assigns pursuant to this Agreement, and providing supporting documentation.
SECTION 5.5 STATEMENTS OF CERTAIN COSTS AND DAMAGES BY PIONEER.
Pioneer shall provide written notice to OCC Tacoma (a) promptly upon being
notified by OCC Tacoma or otherwise becoming aware of a Remediation Event,
describing and quantifying, to the extent known, the Loss of Production and
Documented Lost Profits claimed by Pioneer and directly caused by such
Remediation Event, and providing confidential supporting documentation to the
Pioneer Accountant (and to the Neutral Accountant, in the event of dispute
resolution) and non-confidential supporting documentation to OCC Tacoma, and
(b) in the form of an invoice (not less than quarterly if any Indemnity Claim
by Pioneer Indemnified Persons is then pending) certifying and describing any
Damages, Direct Costs or other amounts for which it (or any of its Indemnified
Persons) seeks reimbursement, defense and/or indemnification (including amounts
below the applicable thresholds of Section 4.8 if such Indemnified Persons
intend to seek defense and/or indemnification against the Underlying Claim)
from OCC Tacoma or its Affiliates, successors or permitted assigns pursuant to
this Agreement, and providing supporting documentation.
SECTION 5.6 RIGHT TO REVIEW. Pioneer may request that the OCC Tacoma
Accountant review and certify the statements and invoices provided in Section
5.4, at Pioneer's sole cost and expense, and OCC Tacoma may request that the
Pioneer Accountant review and certify the statements and invoices provided in
Section 5.5, at OCC Tacoma's sole cost and expense; provided, however, in each
case that the cost and expense of such review and certification shall be borne
by the Party preparing the statement or invoice if the applicable accountant
determines that the statement or invoice is in error by more than ten percent
(10%) of the original amount so invoiced
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
35
<PAGE> 40
in favor of such Party. Disagreements regarding the statements or invoices
shall be subject to dispute resolution pursuant to Article VI.
SECTION 5.7 ACCESS TO THE SITE. With no access fee or charge to OCC
Tacoma or any of its Affiliates, including any Employee Cost of Pioneer for
such access, but subject to the other provisions of this Agreement, Pioneer
shall (i) grant OCC Tacoma and its Affiliates and their respective
Representatives (and representatives of Governmental Authorities, as required
or reasonably requested in accordance with applicable Orders or Formal Agency
Actions) a right to enter and use, at the reasonable discretion of OCC Tacoma
or its Affiliates, upon giving reasonable notice to Pioneer, those portions of
the Site needed to perform any actions reasonably necessary or appropriate
(provided that OCC Tacoma and its Affiliates shall reasonably attempt to
minimize any disruption to Pioneer's operations of the Site and shall consult
with Pioneer pursuant to Section 5.2 and shall not transport Hazardous
Materials onto the Site for the purpose of permanent disposal on the Site,
provided OCC Tacoma shall be permitted to transport Hazardous Materials on or
across the Site, to treat, handle, process, store and use Hazardous Materials
on the Site within the Remediation Areas for Remediation or Correction, and to
discharge effluent or air emissions, or inject effluent, from Remediation or
Correction, in each case in Material Compliance with applicable Orders) to
Remediate Excluded, Specified or Identified Environmental Conditions or to
Correct Identified Environmental Violations or to respond to Environmental
Claims or Common Law Claims arising therefrom or related thereto, including
arranging for utilities or Third Party services; (ii) provide OCC Tacoma and
its Affiliates with access, during business hours and after reasonable notice,
to Pioneer's books, records, property and Representatives related to OCC
Tacoma's performance of the activities required by this Agreement, subject to
the Joint Defense Agreement and Section 7.2 below; (iii) not require payment
from OCC Tacoma or any of its Affiliates or their respective Representatives
for entry, access to or use of the Site reasonably required for OCC Tacoma's
performance of its obligations under this Agreement, except with respect to
Remediation Damages set forth in Section 3.2 above; (iv) execute and comply
with the Grant of Easement and Agreement set forth in Exhibit 2 attached hereto
to implement the right of entry and access granted to OCC Tacoma and its
Affiliates and their respective Representatives; and (v) allow OCC Tacoma to
continue using the building designated as F-24 for storage of supplies and
equipment associated with the groundwater treatment system, provided that such
use of building F-24 by OCC Tacoma shall be at the sole risk of OCC Tacoma.
SECTION 5.8 ACCESS TO NECESSARY SERVICES AND EQUIPMENT. As set forth
in the Operating Services Agreement attached hereto as Exhibit 3, Pioneer
shall provide OCC Tacoma (and its designated Affiliates), at Pioneer's Direct
Cost (and subject to Section 4.7), with utilities, including, without
limitation, surface water, potable water, compressed air, electrical power,
steam and natural gas, and other existing Third Party
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
36
<PAGE> 41
services used by or available to Pioneer and reasonably necessary or
appropriate for the Remediation of Specified or Identified Environmental
Conditions or the Correction of Identified Environmental Violations or to
respond to Environmental Claims or Common Law Claims arising therefrom or
related thereto, including access to and an easement or license to use the on-
Site sanitary and/or storm sewer or other permitted conveyance system for the
discharge of the treated effluent from the groundwater treatment system, and
Pioneer shall use reasonably diligent efforts to maintain and renew such
permits as necessary for OCC Tacoma (or its designated Affiliates) to continue
such discharge of treated effluent until the Applicable Sunset Date; provided,
however, that (i) OCC Tacoma shall pay the documented incremental portion of
Pioneer's Direct Cost of such permits, utilities, and services directly
attributable to OCC Tacoma's Remediation, and (ii) Pioneer shall not be
required to provide any utilities or services under this Agreement to the
extent that its performance is prevented by a Force Majeure event.
SECTION 5.9 MOVING OF IMPROVEMENTS. OCC Tacoma or its designated
Affiliates may, at their sole discretion and after reasonable notice to and
consultation with Pioneer pursuant to Section 5.2, move, relocate, functionally
replace, dismantle or destroy any Improvement at the Site * provided that
OCC Tacoma (or its designated Affiliates) shall, subject to Section 4.7 and
consultation pursuant to Section 5.2, (a) at the discretion of OCC Tacoma (or
its designated Affiliates), either * and (b) pay Remediation Damages
pursuant to Section 3.2 * . All actions by OCC Tacoma and Pioneer
pursuant to this Section 5.9 with respect to a Scheduled Remediation Event
shall be conducted pursuant to a plan prepared by OCC Tacoma or Pioneer, as
applicable, in consultation with the other Party, and in such manner as to
minimize interference with, and downtime of production operations at the
Facility, to minimize interference with Remediation or Correction and to allow
Material Compliance with applicable Orders, in each case consistent with due
regard for maintaining safety and environmental protection.
SECTION 5.10 EXACERBATION CLAUSE FOR * . With respect to
Remediation of Excluded Environmental Conditions, Specified Environmental
Conditions, Identified Environmental Conditions or Identified Environmental
Violations associated with * , for which OCC Tacoma has undertaken
indemnification of Pioneer, OCC Tacoma and Pioneer shall consult under Section
5.2 and mitigate damages under Section 4.7, and:
(a) OCC Tacoma (and its designated Affiliates) shall operate
in Material Compliance with applicable Orders and with the least stringent
standards of Environmental Laws and, subject to applicable Orders, have
exclusive control over the timing and scope of the Remediation of such
Excluded, Specified or Identified
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
37
<PAGE> 42
Environmental Condition and the Correction of such Identified Environmental
Violation, including (i) the performance, in the sole discretion of OCC Tacoma
or its designated Affiliates, of additional Remediation, other studies or
investigation or other actions required by Environmental Law or reasonably
necessary or appropriate to defend against or to resolve any Excluded,
Specified or Identified Environmental Condition, Identified Environmental
Violation, or any Environmental Claim or Common Law Claim arising therefrom, or
related thereto, and (ii) the negotiation, in the sole discretion of OCC Tacoma
or its designated Affiliates, of action levels or cleanup levels with
Governmental Authorities applicable thereto.
(b) Pioneer shall (i) prior to the Applicable Sunset Date, if
any, for such matter, cooperate and not materially interfere with the
Remediation of Excluded Environmental Conditions, Specified Environmental
Conditions, Identified Environmental Conditions or Post-Closing Environmental
Conditions directly caused by Excluded Activities (and/or the payment of
Response Costs therefor) or the Correction of Identified Environmental
Violations or Post-Closing Environmental Violations directly caused by Excluded
Activities (and/or the payment of Penalties therefor), in each case by or on
behalf of OCC Tacoma or its designated Affiliates, (ii) not cause or permit a
use of all or a portion of * for other than a heavy industrial use, (iii)
prior to the Applicable Sunset Date, if any, for such matter, operate * in
Material Compliance with applicable Orders and the least stringent standards of
Environmental Laws, and (iv) not voluntarily accelerate the timing or
materially increase the cost of any obligations of OCC Tacoma or any of its
Affiliates with respect to any such Excluded, Specified or Identified
Environmental Condition or Identified Environmental Violation, and (v) prior to
the Applicable Sunset Date, if any, for such matter and subject to Sections
4.2(d) and 4.2(e), not communicate with any Governmental Authority or Third
Party regarding the Remediation of Excluded Environmental Conditions, Specified
Environmental Conditions, Identified Environmental Conditions, or Post-Closing
Environmental Conditions directly caused by Excluded Activities (and/or the
payment of Response Costs therefor, the Correction of Identified Environmental
Violations or Post-Closing Environmental Violations directly caused by Excluded
Activities (and/or the payment of Penalties therefor), or the payment or
mitigation of Natural Resource Damages without providing written notice in
advance to OCC Tacoma and providing OCC Tacoma (or its designated Affiliates)
an opportunity to participate in and to control such communication (except in
emergencies where such notice shall be provided as soon as practicable).
(c) Pioneer agrees that neither it nor its Affiliates or
Representatives will (i) request or encourage the assertion of Remediation
Claims, Penalty Claims or Common Law Claims that may result in an
Administrative Order, Court Order, or Formal Agency Action regarding * , or
(ii) request an investigation or inspection or Remediation of *
provided, however, that this shall not restrict Pioneer's
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
38
<PAGE> 43
ability to comply with applicable Environmental Laws or, after reasonable
notice to OCC Tacoma and consultation with OCC Tacoma, to seek in good faith
and in a manner consistent with Subsection (b) above, regulatory guidance
necessary for Pioneer to comply with applicable Environmental Laws in a manner
which does not divulge privileged and confidential Information; provided,
further, that unless OCC Tacoma indicates in writing it does not wish to be
apprised of communications with Governmental Authorities, OCC Tacoma shall be
given an opportunity to participate in communications with, and sent copies of,
all communications by or on behalf of Pioneer Indemnified Persons to or from
Governmental Authorities regarding the * (except in emergencies where such
notice shall be provided as soon as practicable).
(d) Until the expiration of the Applicable Sunset Dates for
Specified Environmental Conditions, Identified Environmental Conditions,
Identified Environmental Violations and Identified Common Law Claims, Pioneer
shall not engage in * , in either case except (A) with the consent of OCC
Tacoma in OCC Tacoma's discretion, (B) as required by applicable Environmental
Laws, permits under Environmental Laws, or Orders, (C) in accordance with
changes to the Site described in Sections 2.6 and 2.7 above or (D) in an
emergency, including conditions which present an immediate threat or imminent
danger to the health or safety of employees or the public. To the extent that
Pioneer engages in such voluntary action not allowed in the preceding sentence,
Pioneer shall be solely responsible to perform, or to pay Response Costs of,
any Remediation of any Identified Environmental Condition discovered thereby,
or (subject to Section 2.6, 2.7 or 2.11) any increase in the costs related to
actions in response to any Specified Environmental Condition or, subject to
Section 2.6, 2.7 or 2.11 above, any increase in the costs related to actions in
response to any previously Identified Environmental Condition.
(e) Upon the Applicable Sunset Date for each Specified
Condition or Identified Environmental Condition or such earlier date as the
Parties agree, the covenants set forth in this Section 5.10 shall terminate
with respect to * .
SECTION 5.11 EXACERBATION CLAUSE FOR * . With respect to
Remediation of Identified Environmental Conditions * .
(a) Each Party understands and appreciates that its long-term
mutual interests will be best served by a fair and equitable application of its
obligations under this Agreement, including the mitigation of any costs or
expenses that it may incur, share or impose hereunder. Neither Party shall, or
shall permit any of its Affiliates to, take any action the effect of which
would reasonably be expected to impose any additional material obligation on,
or materially increase any obligation of, the other Party under this Agreement
(except with respect to the occurrence of an Applicable
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
39
<PAGE> 44
Sunset Date, the passage of time or the exercise of a Party's rights to dispute
resolution).
(b) By way of example, and not by way of limitation, the
following actions shall be permitted under the previous sentence if they are
performed in the ordinary course of business and are not specifically intended
to increase the obligation or liability of the other Party under this
Agreement:
(i) any action required to comply with applicable
Environmental Laws, permits issued under Environmental Laws, and Orders;
(ii) any action required to be taken in emergencies,
including conditions which represent an immediate threat or imminent danger to
the health or safety of employees or the public;
(iii) subject to Sections 2.6 and 2.7 hereof, any
investigation directly resulting from Repair or Expansion and required by any
Environmental Law or any report to any Governmental Authority directly
resulting from Repair or Expansion required of any Party by applicable
Environmental Laws, including reports of Releases or the presence of Hazardous
Materials if such discovery is made in the ordinary course of such Repair or
Expansion; or
(iv) normal and customary periodic non-intrusive
compliance audits conducted after the Closing in the ordinary course of
business including the WSHA Star audit and ISO 14000 audit, which do not
require collection of samples of surface or subsurface soil, sediment, surface
water or groundwater; or
(v) passage of the Applicable Sunset Date.
(c) By way of example, and not by way of limitation, the
following actions shall be prohibited by Section 5.11 if they are performed
with the intent to increase the obligation or liability of the other Party
under this Agreement:
(i) Neither Party may voluntarily accelerate the timing
of any action, liability, or obligation hereunder (except with respect to the
occurrence of an Applicable Sunset Date or the passage of time); and
(ii) Neither Party may communicate with any Governmental
Authority regarding the Remediation of a particular Specified or Identified
Environmental Condition, the payment or mitigation of Natural Resource Damages
or the Correction of a particular Identified Environmental Violation, in each
case with respect to areas other than Remediation Areas, for which the other
Party does or may
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
40
<PAGE> 45
have responsibility (except with respect to the occurrence of an Applicable
Sunset Date or the passage of time) under this Agreement without providing
written notice in advance to the other and providing an opportunity to
participate in such communication (except in emergencies where such notice
shall be provided as soon as practicable).
(iii) Neither Party may request or encourage the
assertion of Environmental Claims or Common Law Claims that may result in an
Administrative Order, Court Order, or a Formal Agency Action regarding the Site
or the CB/NT Site, or other liabilities affecting the other Party without
providing written notice in advance to the other and providing an opportunity
to participate in such communication (except in emergencies where such notice
shall be provided as soon as practicable).
ARTICLE VI
DISPUTE RESOLUTION
SECTION 6.1 DISPUTE RESOLUTION. The Parties understand and appreciate
that their long term mutual interests will be best served by effecting a rapid
and fair resolution of any claims or disputes which may arise out of this
Agreement or from any dispute concerning the terms of this Agreement.
Therefore, each Party agrees to use reasonable efforts to resolve all such
disputes as rapidly as possible on a fair and equitable basis. Toward this end
each Party agrees to follow the procedures of this Article VI for presenting,
promptly assessing and, if possible, settling claims and other disputes on a
fair and equitable basis without litigation. Except as specifically set forth
elsewhere in this Agreement, if a dispute arises regarding an Environmental
Matter, the procedures of this section shall apply.
SECTION 6.2 INFORMAL DISPUTE RESOLUTION. The Parties shall make
reasonable efforts to resolve informally all disputes between the designated
Project Managers within thirty (30) days after a dispute arises between the
Parties. Prior to any Party's issuance of a written statement of dispute for
formal dispute resolution as set forth in Section 6.3 below, the disputing
Party shall notify the other Party of the commencement of informal dispute
resolution. During informal dispute resolution, the Project Managers are
required to meet, exchange non-privileged information (or, subject to the Joint
Defense Agreement and at each Party's discretion, privileged or confidential
information) and to attempt to resolve the dispute using reasonable efforts
within thirty (30) days after the commencement of informal dispute resolution
(or such shorter period as provided in the last sentence of this Section). If
resolution cannot be achieved informally after thirty (30) days, either Party
may notify the other that the informal process is terminated and, at that time,
either Party may invoke the formal dispute resolution procedures of this
Article VI to resolve the dispute. In the event that
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
41
<PAGE> 46
exigent circumstances require a more immediate resolution of the dispute, the
Party claiming the existence of such circumstances may terminate informal
dispute resolution no less than ten (10) days after the commencement of
informal dispute resolution.
SECTION 6.3 FORMAL DISPUTE RESOLUTION. The Parties shall establish a
DRP which shall serve as a forum for resolution of disputes for which agreement
cannot be reached by the Project Managers through informal dispute resolution.
(a) Appointment of Dispute Resolution Panel. The Parties
shall each designate one individual and an alternate to serve on the DRP. The
individuals designated to serve on the DRP shall be executives at the level of
vice-president or higher in each Party's respective organization and these
individuals shall be delegated the authority by the Party to participate on the
DRP for the purposes of resolving disputes under this Agreement.
(b) Statement of Dispute. Within thirty (30) days after the
termination of informal dispute resolution, or within ten (10) days after such
termination in the event of exigent circumstances, the disputing Party shall
submit to the DRP a written statement of dispute setting forth the nature of
the dispute, the disputing Party's position, and all facts, including documents
that support the disputing Party's contentions. The statement of dispute may
include any technical, legal or factual information the disputing Party is
relying upon to support its position. This statement of dispute shall be
provided to the other Party who, at its discretion, may provide within ten (10)
days thereafter any additional information in response to the statement of
dispute.
(c) DRP Decision. Following elevation of a dispute to the
DRP, the DRP shall have thirty (30) days to resolve the dispute after the
receipt by the DRP of the information described in Section 6.3(b). The DRP
members shall, as appropriate, meet and confer, by telephone or in person, and
use reasonable efforts to resolve the dispute. Within ten (10) days of
resolution of a dispute pursuant to the procedures specified in this section,
the DRP decision shall be incorporated into the appropriate plan, schedule or
procedures. While dispute resolution is in progress, work affected by the
dispute, to the extent feasible, will be discontinued. If the DRP does not
resolve the dispute within thirty (30) days, the dispute shall be referred to
mediation, unless the DRP members agree that such mediation would not assist in
resolving the dispute.
(d) Neutral Accountant. If a dispute arises regarding review
or certification of statements or invoices pursuant to Article V, which dispute
is not resolved by informal dispute resolution or the DRP, the Parties shall
submit the dispute to a Neutral Accountant selected by the Pioneer Accountant
and the OCC Tacoma Accountant prior to the mediation procedure described in
clause (e) below. The
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
42
<PAGE> 47
Neutral Accountant shall review the supporting documentation (including
confidential documentation) of the Party preparing the statement or invoice in
dispute and shall have reasonable access to such Party's Representatives, books
and records. The fees of the Neutral Accountant shall be paid by the Party
preparing such statement or invoice if the Neutral Accountant determines that
such statement or invoice was in error in the favor of such Party by ten
percent (10%) or more of the original invoiced amount. Otherwise, the costs of
the Neutral Accountant shall be shared equally between Pioneer and OCC Tacoma.
(e) Mediation. If a dispute is not resolved in accordance
with the procedures of clause (c) above, the members of the DRP shall engage
the services of a mediator to assist in the resolution of the dispute. The
mediator shall be selected by the DRP and shall be acceptable to both Parties.
Thereafter, the DRP in consultation with the mediator shall establish further
procedures whereby the Parties will meet, provide information and seek to
resolve the dispute. Each party shall bear an equal portion of the costs of
mediation including the mediator's fee and administrative costs. Following
mediation, unless the parties agree otherwise, formal dispute resolution is
terminated. Discussions and proceedings in informal and formal dispute
resolution and before the mediator shall be privileged settlement
communications and shall not be either subject to discovery or admissible in
any proceeding, suit or legal action.
(f) Failure of Dispute Resolution. If the dispute is not
resolved through the dispute resolution process outlined in this section,
either Party (or their respective Indemnified Persons, as the case may be) may
commence a proceeding, suit or legal action in Court against the other Party to
enforce the terms of this Agreement either (i) upon the termination of dispute
resolution, or (ii) upon the occurrence of a dispute which threatens the
ability of a Party to comply with applicable Orders, during such dispute
resolution.
SECTION 6.4 ATTORNEYS' FEES. The prevailing party in any proceeding,
suit or legal action brought by any Party or Indemnified Person in Court
against the other Party or such other Party's respective Affiliates or
Representatives to enforce this Agreement shall be entitled to recover its
reasonable attorneys' fees and expenses and Court costs, provided that each
Party shall bear its own costs and expenses of informal and formal dispute
resolution and mediation pursuant to Sections 6.2 and 6.3 above.
SECTION 6.5 SERVICE OF PROCESS, CONSENT TO JURISDICTION, ETC. Each
Party hereby irrevocably agrees that any legal action or proceeding against it
arising out of this Agreement shall be brought in the courts of the State of
Washington, or of the United States of America for the Western District of
Washington, and does hereby irrevocably (a) designate, appoint and empower CT
Corporation System on behalf of Pioneer and The Prentice-Hall Corporation
System, Inc. on behalf of OCC Tacoma,
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
43
<PAGE> 48
respectively, to receive for and on behalf of it service of process in the
State of Washington, and (b) consent to service of process outside the
territorial jurisdiction of such courts in the manner provided by law. In
addition, each Party irrevocably waives (i) any objection which such Party may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of, or relating to, this Agreement brought in any such court, (ii)
any claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum, and (iii) the right to object, with
respect to any such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such Party or any other
Party.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF WASHINGTON, WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 7.2 CONFIDENTIALITY. Each Party shall, and shall cause its
Affiliates and its and their Representatives to, hold in strict confidence, and
not utilize for any commercial or other purpose whatsoever, Information;
provided, however, that the foregoing obligation of confidence shall not apply
to (a) any Information that is or shall become generally available to the
public other than as a result of a disclosure by such Party, any of its
Affiliates or the respective Representatives of such Party or any such
Affiliate, (b) any Information that is or shall become available to such Party
or its Representatives prior to the Closing on a non-confidential basis prior
to its disclosure by such Party or its Representatives, and (c) any Information
that shall be required to be disclosed by such Party, any of its Affiliates or
the respective Representatives of such Party or any such Affiliate as a result
of any offering of securities of such Party or of any such Affiliate or
otherwise, in each case under any law or any rule or regulation of any stock
exchange so long as such Party shall, and shall cause its Affiliates and their
respective Representatives to, make reasonable efforts to preserve the
confidentiality of such Information prior to disclosure, including providing
notice to the other Party of the timing, form and content of such disclosure
and providing reasonable assistance to the other Party in asserting the
confidentiality of such Information. In this regard, Pioneer understands that
certain commercial and financial Information contained in this Agreement and
the Operating Services Agreement, and certain other Information provided to
Pioneer pursuant to the Asset Purchase Agreement and Related Agreements, is
considered by OCC Tacoma to be privileged
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
44
<PAGE> 49
and/or confidential, and Pioneer agrees that it will request and use reasonable
efforts to obtain confidential treatment of such Information in any offering of
securities or public filing of Pioneer or any Affiliate of Pioneer or any
related financing, if so requested by OCC Tacoma.
(a) Confidentiality and Use of Shared Information. From time
to time, the Parties may elect to disclose or transmit to each other, such
Information as each Party or its Representatives deems appropriate for the sole
and limited purpose of coordinating such activities that are necessary and
proper to carry out the purposes of this Agreement. Shared Information may be
disclosed to or transferred between the Parties orally or in writing or by any
other appropriate means of communications. The Parties intend that no claim of
privilege be waived by reason of such participation or cooperation under the
terms of this Agreement.
(i) Each Party agrees that all shared Information
received from any other Party or its Representatives pursuant to this Agreement
shall be held in strict confidence by the receiving Party and by all persons to
whom such confidential Information is revealed by the receiving Party and that
such Information shall be used only in connection with conducting such
activities that are necessary and proper to carry out the purposes of this
Agreement;
(ii) Shared Information that is created and exchanged
after the Closing in written or in document form and is intended to be kept
confidential shall be marked "Confidential" or with a similar legend. If such
Information becomes the subject of an administrative or judicial order
requiring disclosure of such Information by a Party, where the Information will
be unprotected by confidentiality obligations, the Party may satisfy its
confidentiality obligations hereunder by notifying the Party that generated the
Information and by giving such Party an opportunity to protect the
confidentiality of the Information;
(iii) Each Party shall take all necessary and appropriate
measures to ensure that any person who is granted access to any shared
Information or who participates in work or common projects or who otherwise
assists any counsel or technical consultant in connection with this Agreement,
is familiar with the terms of this Agreement and complies with such terms as
they relate to the duties of such person;
(iv) The Parties intend by this Section to protect from
disclosure all Information and documents shared between the Parties or with any
Representative to the greatest extent permitted by law regardless of whether
the sharing occurred before execution of this Agreement and regardless of
whether the writing or document is marked "Confidential."
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
45
<PAGE> 50
(b) Joint Defense Agreement. The Parties will execute the
Joint Defense Agreement attached as Exhibit 1 hereto to preserve privileges
which apply to Information that is shared between the Parties and their
respective Affiliates and Representatives for the purposes of defending against
Environmental Claims or Common Law Claims.
(c) Information Supplied by Pioneer to the Neutral Accountant.
A Neutral Accountant which receives confidential business information from
Pioneer regarding claims of, and documentation supporting, Average Freight
Cost, Average Price, Average Production Cost, Loss of Production, Documented
Lost Profits or In-Kind Consideration as confidential elements of Remediation
Damages is authorized to provide a statement to OCC Tacoma certifying the Loss
of Production, Documented Lost Profits or In-Kind Consideration, but shall hold
in strict confidence and not to disclose to OCC Tacoma or its Affiliates or to
any Third Party the Average Freight Cost, Average Price and Average Production
Cost of Pioneer.
(d) Return of Information Upon Failure to Close. In the event
that the Closing shall not occur, each Party will return to the other Party, or
destroy, as much of the Information which shall be in the possession of such
Party as such other Party shall request.
SECTION 7.3 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. The Parties
shall not, and shall not permit any of their respective Affiliates to, issue
any press release or other public announcement relating to the subject matter
of this Agreement (other than presentations to security analysts and financial
institutions) except (a) upon obtaining the prior consent of the other Party,
which consent shall not be unreasonably withheld or delayed, and (b) when, on
the advice of legal counsel, such release or announcement is required by the
federal securities laws or the rules and regulations of any of the national
stock exchanges (in which case the disclosing Party shall to the extent
practicable consult with the other Party prior to making the disclosure);
provided that the disclosing Party shall first provide a draft to the other
Party and allow that Party a reasonable opportunity to review and comment on
the press release and to correct any aspect of the press release that pertains
to that Party or its rights or obligations under this Agreement. Each Party
will consult with the other Party concerning the means by which the
Representatives of OCC Tacoma or Pioneer and Governmental Authorities asserting
jurisdiction over the Site will be informed of the transactions contemplated by
this Agreement. Except as set forth in Sections 2.4(b)(i)(A)(2), 5.2,
5.10(b)(v), 5.10(c), and 5.11(c)(ii), nothing in this Agreement shall limit
either Party's right to respond to inquiries from the press or the public
regarding Environmental Conditions or Environmental Violations.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
46
<PAGE> 51
SECTION 7.4 NO THIRD-PARTY BENEFICIARIES. NOTHING CONTAINED IN THIS
AGREEMENT, EXPRESS OR IMPLIED, IS INTENDED TO CONFER OR SHALL BE DEEMED TO
CREATE ANY RIGHT OR REMEDY IN ANY PERSON (OTHER THAN THE PARTIES, THEIR
RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS, THE OCC TACOMA INDEMNIFIED PERSONS
AND THE PIONEER INDEMNIFIED PERSONS), AND THIS AGREEMENT SHALL NOT BE CONSTRUED
IN ANY RESPECT TO BE A CONTRACT IN WHOLE OR IN PART FOR THE BENEFIT OF ANY
THIRD PARTY (OTHER THAN THE PERSONS HEREINBEFORE STATED).
SECTION 7.5 ENTIRE AGREEMENT. This Agreement (including the documents
attached hereto) constitutes the entire agreement among the Parties and
supersedes all prior understandings and agreements with respect to the subject
matter hereof.
SECTION 7.6 EXPENSES. Except as otherwise provided herein or therein,
each of the Parties will bear all of its own costs and expenses (including the
fees and expenses of legal counsel, accountants and other advisors) incurred in
connection with this Agreement (or the enforcement of this Agreement), the
Joint Defense Agreement, the Grant of Easement and Agreement, the Operating
Services Agreement, and the transactions contemplated hereby or thereby.
SECTION 7.7 NOTICES. All notices and other communications under this
Agreement shall be in writing and sent by (a) personal delivery (including
courier service), (b) telecopier to the number indicated below, or (c) first
class or registered or certified mail, postage prepaid and addressed as follows
(or to such other addresses and telecopier numbers as any Party may designate
by notice to the other Parties), any such notice or communication being deemed
given upon receipt:
IF TO OCC TACOMA, AT:
OCC Tacoma, Inc.
5005 LBJ Freeway
Dallas, Texas 75244
Attention: Chief Financial Officer
Telecopier No.: (972) 404-3956;
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
47
<PAGE> 52
WITH A COPY TO:
Occidental Chemical Corporation
5005 LBJ Freeway
Dallas, Texas 75244
Attention: General Counsel
Telecopier No.: (972) 404-3957;
WITH A COPY TO:
OCC Tacoma Project Manager
IF TO PIONEER, AT:
Pioneer Companies, Inc.
700 Louisiana, Suite 4200
Houston, Texas 77002
Attention: Kent R. Stephenson, Esq.
Telecopier No.: (713) 225-4426;
WITH A COPY TO:
Jackson Walker, L.L.P.
1100 Louisiana, Suite 4200
Houston, Texas 77002
Attention: Tracey Smith Lindeen, Esq.
Telecopier No.: (713) 752-4221.
WITH A COPY TO:
Pioneer Project Manager
SECTION 7.8 AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be set forth in an
instrument in writing signed by each Party. Each of the Parties may waive (a)
any inaccuracies in the representations and warranties of any other Party
contained in this Agreement or in any document, certificate or writing
delivered pursuant hereto, or (b) compliance by
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
48
<PAGE> 53
such other Party with any of the agreements of such Party or the fulfillment of
any of the conditions to its own obligations set forth herein. Any agreement
on the part of any Party to any such waiver shall be valid only if set forth in
an instrument in writing signed by such Party. No waiver by any Party of any
default, misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any such occurrence. Neither
the failure nor any delay by any Party in exercising any right, power or
privilege under this Agreement will operate as a waiver of such right, power or
privilege, except as set forth in Article IV hereof and except with respect to
the termination of OCC Tacoma's obligations upon the occurrence of the
Applicable Sunset Dates herein and the termination of Pioneer's obligations
pursuant to Sections 2.10 and 3.5, and no single or partial exercise of any
such right, power or privilege will preclude any other or further exercise of
such right, power or privilege or the exercise of any other right, power or
privilege.
SECTION 7.9 ASSIGNMENT; SUCCESSORS AND ASSIGNS. Subject to Sections
2.1, 2.2(a), 3.1(a), 2.6, 2.7, 2.10, 3.2, 3.5 and 7.10 below, this Agreement
shall be binding upon, and inure to the benefit of, the Parties and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned, by
operation of law or otherwise (other than as a result of any merger or
consolidation), by any Party without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or delayed; provided,
that, notwithstanding the foregoing, and subject to the provisions of Section
7.10 below, (a) in connection with any sale of the Facility as a whole or the
properties and assets of any Party substantially as an entirety to any Person,
the Party making such sale may assign this Agreement, and its rights and
obligations hereunder, to such Person, (b) any Party may assign this Agreement,
or its rights hereunder, to any Affiliate of such Party (provided that
immediately following such assignment, the test set forth in the last sentence
of this Section 7.9 is satisfied), and (c) Pioneer shall have the right to
assign as collateral its rights and obligations under this Agreement to any
bank, financial institution or other lender (or any indenture trustee acting on
behalf of any such person) that provides financing in connection with (x) the
transactions contemplated by the Asset Purchase Agreement or any Related
Agreement (including any renewal or rearrangement of such financing), and (y)
working capital funding for operation of the Facility, and, provided further
that, in the case of any assignment of this Agreement, (i) prior to such
assignment (or, in the case of a bank, financial institution or lender, prior
to exercising remedies hereunder or foreclosing the collateral assignment) the
Person to which such assignment is made shall expressly assume, by an
instrument in writing reasonably satisfactory to OCC Tacoma or Pioneer, as the
case may be, executed and delivered to OCC Tacoma or Pioneer, as the case may
be, the performance and observance of every obligation, covenant and agreement
pursuant to this Agreement on
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
49
<PAGE> 54
the part of the Party making such assignment to be performed or observed, it
being the express intent of the Parties that this Agreement be assigned in
whole and not in part (except for the obligations of OCC Tacoma set forth in
Section 7.10 below which may not be assigned by Pioneer Chlor Alkali Company,
Inc. or its Affiliates without OCC Tacoma's consent), and (ii) no such
assignment shall have the effect of releasing such Party or any other Person
(including any such additional party) from its obligations, covenants or
agreements pursuant to this Agreement. Any attempted assignment in violation
of this Section 7.9 or in violation of Section 7.10 shall be void and of no
force or effect. For purposes of this Agreement, an assignment of this
Agreement shall be deemed to have occurred if, (A) immediately following an
assignment or transfer of any interest in the Site or Facility, or in Pioneer
Chlor Alkali Company, Inc. or any Affiliate, PCI holds, either directly or
indirectly, less than a seventy-six percent (76%) equity ownership interest in
the Site and Facility, or (B) from and after the date that the Site and
Facility (on a consolidated basis) constitute a majority of PCI's consolidated
assets (measured as the greater of (1) the fair market value, or (2) the book
value of such assets), beneficial ownership of voting interests in PCI are
transferred which comprise in the aggregate a majority of all voting interests
in PCI, to a group or person, whether in a single transaction or in multiple
transactions.
SECTION 7.10 PROPOSED TRANSFER OF ANY PORTION OF THE SITE BY PIONEER.
With respect to a proposed transfer of all or any portion of Pioneer's right,
title and interest in the Site or the Facility, in addition to the provisions
of Section 7.9 above, Pioneer shall (a) notify OCC Tacoma of such a proposed
transfer, including the identity of the proposed transferee, (b) upon entering
into a confidentiality agreement with such proposed transferee in a form
reasonably satisfactory to OCC Tacoma (and which agreement specifically
identifies OCC Tacoma as a third party beneficiary thereof), notify any
proposed transferee of the terms of this Agreement, (c) condition such transfer
upon the proposed transferee's written assumption of all obligations of Pioneer
under this Agreement (whether or not the proposed transferee acquires all or a
portion of the Site or the Facility), (d) provide the terms of any proposed
agreement assigning this Agreement or Pioneer's rights thereunder or assuming
Pioneer's obligations thereunder to OCC Tacoma and OCC Tacoma Indemnified
Persons, and (e) obtain OCC Tacoma's consent to the form and substance of such
assignment and assumption, which consent shall not be unreasonably withheld or
delayed. Notwithstanding any other provision of this Agreement, the
obligations of OCC Tacoma set forth in the following Sections shall not be
transferred or assigned by Pioneer Chlor Alkali Company, Inc. or its Affiliates
to any Third Party, including, without limitation, any Third Party which
purchases all or any portion of Pioneer Chlor Alkali Company, Inc.'s or its
Affiliates' right, title and interest in the Site or the Facility, without the
prior written consent of OCC Tacoma which may be withheld in its sole
discretion: Sections 2.1, 2.2(a), 3.1(a), 2.6, 2.7, 2.10 and 3.5. The
obligations of OCC Tacoma under Section 3.2 of this Agreement may only be
assigned by Pioneer Chlor Alkali Company, Inc. and its Affiliates to a Third
Party who acquires
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
50
<PAGE> 55
Pioneer Chlor Alkali Company, Inc.'s and its Affiliates' interest in the entire
Site and Facility. Regardless of any proposed transferee's acquisition of any
portion of the Site or the Facility, all of the obligations of Pioneer under
this Agreement with respect to the entire Site and Facility shall be
transferred and the limitations on OCC Tacoma's liability (including the Early
Sunset Date, Maximum Sunset Date, OCC Tacoma Aggregate Liability Limit,
Physical Change Aggregate Limit and the Excluded Activity Aggregate Limit)
shall apply to the entire Site and Facility, and all owners and operators
thereof as though a single Person operated the Site and Facility.
SECTION 7.11 HEADINGS. The Table of Contents and the Index to
Schedules and Exhibits set forth in, and the descriptive headings of the
several Articles and Sections of, this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.
SECTION 7.12 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which when so executed shall be deemed an original,
but all of which together shall constitute one and the same instrument.
SECTION 7.13 CONSTRUCTION. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties, and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement.
SECTION 7.14 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
SECTION 7.15 DENIAL OF LIABILITY. This Agreement shall neither
constitute, nor be interpreted, construed or used as evidence of, any admission
of liability, law or fact, a waiver of any right or defense, or an estoppel by
or against any Party with respect to the condition of the Site, the actual or
suspected presence or Release of Hazardous Materials at the Site or elsewhere
in the environment, or compliance or non-compliance with Environmental Laws at
the Site or elsewhere. However, nothing in this Section is intended or should
be construed to limit, bar or otherwise impede the enforcement of any term or
condition of this Agreement in accordance with the provisions of this
Agreement.
SECTION 7.16 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
51
<PAGE> 56
[Remainder of page intentionally left blank]
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
52
<PAGE> 57
IN WITNESS WHEREOF, the Parties have executed and delivered this
Agreement as of the date first written above.
PIONEER CHLOR ALKALI COMPANY, INC.
By: /s/ Philip J. Ablove
-------------------------------------
Name: Philip J. Ablove
Title:Vice President and
Chief Financial Officer
OCC TACOMA, INC.
By: /s/ John W. Morgan
--------------------------------------
Name: John W Morgan
Title: Vice President
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
S-1
<PAGE> 58
ANNEX A
DEFINITIONS
DEFINITIONS. As used in this Agreement, the following terms have the
meanings indicated (such meanings to be equally applicable to both the singular
and the plural forms of the terms defined).
"Administrative Order" means any binding and final administrative order
issued by a Governmental Authority to OCC Tacoma or Pioneer, their respective
successors or permitted assigns, or their respective Affiliates, pursuant to
Environmental Laws to compel the Remediation of Hazardous Materials (including
groundwater corrective action being undertaken by OCC Tacoma or its Affiliates
as described in Specified Environmental Condition (a) pursuant to Part V of the
RCRA Permit), to recover Response Costs therefor incurred by such Governmental
Authority, to compel payment or mitigation of Natural Resource Damages, to
compel the Correction of a violation of Environmental Laws, or to recover
Penalties for such violation.
"Affiliate" means any Person that is an "affiliate" within the meaning
of the regulations promulgated under the Securities Act of 1933, as amended, as
such regulations and Act shall be amended and in effect on the date of this
Agreement.
"Aggregate OCC Tacoma Liability" means the aggregate of Direct Cost
incurred by OCC Tacoma and its Affiliates, *
"Aggregate OCC Tacoma Liability Limit" means the maximum Aggregate OCC
Tacoma Liability under this Agreement, and equals * .
"Agreement" means this Environmental Operating Agreement, as the same
may be amended in accordance with the provisions hereof.
"Anniversary" means 6:30 a.m. Pacific Standard Time on a date one year
after the Closing and at the same time on the dates at one year intervals
thereafter.
"Applicable Sunset Date" means the earlier of the Early Sunset Date or
the Maximum Sunset Date for a particular Specified Environmental Condition,
Identified Environmental Condition, Identified Environmental Violation,
Identified Common Law Claim, Environmental Claim or Specified Condition Common
Law Claim.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
A-1
<PAGE> 59
"Approval Letter" means, with respect to a Remediation of a Specified
Environmental Condition, an Identified Environmental Condition or Correction of
an Identified Environmental Violation, written correspondence from each
Governmental Authority asserting jurisdiction over such Environmental Condition
or Environmental Violation, or with respect to a Common Law Claim or a
Remediation Claim, a final and binding order or judgment entered by a Court
(other than an administrative judge or tribunal), which provides complete
discharge or relief related to the Specified Environmental Condition,
Identified Environmental Condition, Common Law Claim, Remediation Claim,
Identified Environmental Violation, Post-Closing Environmental Condition or
Post-Closing Environmental Violation or which provides that no further action
is required or expressly planned at a future date as of the time of such
correspondence, order or judgment to address such Environmental Condition,
Environmental Violation, or Common Law Claim, but which approval may be
qualified or conditioned by a Governmental Authority with respect to *
"Asset Purchase Agreement" means the Asset Purchase Agreement, dated as
of May 14, 1997, between OCC Tacoma and Pioneer.
"Assets" shall mean those Properties, Contracts, Permits, rights,
titles, interest and estates transferred by Seller to Purchaser in the
Assignment and Assumption Agreement.
"Assignment and Assumption Agreement" means the General Conveyance
Assignment and Assumption Agreement, dated as of June 17, 1997, between OCC
Tacoma and Pioneer.
"Average Freight Cost" means the amount expressed in dollars per ton on
a Product-specific basis as proposed by Pioneer or, upon request by OCC Tacoma,
as determined by the Pioneer Accountant (subject to dispute resolution) in
accordance with GAAP, to be the result obtained by dividing (a) the total
actual freight charges incurred by Pioneer during the Pre-Event Period in
connection with the Delivery of each Product subject to a Loss of Production,
expressed in dollars, by (b) the total number of tons of such Product produced
at the Facility and Delivered during the Pre-Event Period, using the books and
records of Pioneer and other information requested by the Pioneer Accountant
from Pioneer.
"Average Price" means the amount expressed in dollars per ton on a
Product-specific basis as proposed by Pioneer or, upon request by OCC Tacoma,
as determined by the Pioneer Accountant (subject to dispute resolution) in
accordance with GAAP, to be the average sales price, expressed in dollars per
ton, actually charged by Pioneer (reduced
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 60
by applicable discounts or rebates), net of freight costs and sales, use,
excise and other taxes, to Third Party customers who received Delivery of
Product during the Pre-Event Period, or, in the event there are no sales to
Third Party customers during the Pre-Event Period, an amount in dollars per ton
approximating the then-current market price for such Product.
"Average Production Cost" means the amount expressed in dollars per ton
on a Product-specific basis as proposed by Pioneer or, upon request by OCC
Tacoma, as determined by the Pioneer Accountant (subject to dispute resolution)
in accordance with GAAP, to be the result obtained by dividing (a) the Direct
Costs (plus Employee Costs with respect to any Employees who are furloughed as
a result of the Loss of Production) incurred by Pioneer during the Pre-Event
Period and directly related to manufacturing of each Product subject to a Loss
of Production for Delivery of such Product during such period, by (b) the
number of tons of such Product produced at the Facility and Delivered during
the Pre-Event Period, in each case using the books and records of Pioneer and
other information requested by the Pioneer Accountant from Pioneer.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, and as subsequently amended, 42 U.S.C. # 9601, et
seq.
"Claim Notice" means written notice by one Party to the other Party of
receipt of a written Remediation Claim, Penalty Claim or Common Law Claim.
"Closing" means the closing of the transactions contemplated by the
Asset Purchase Agreement.
"Commencement Bay" means a deep-water embayment in south Puget Sound,
Washington, and includes that portion of Puget Sound enclosed by a straight
line from Browns Point to Point Defiance as generally depicted on Exhibit 5
attached hereto.
"Commencement Bay Nearshore/Tideflats Superfund Site" or "CB/NT Site"
means the Superfund site by that name promulgated on the National Priorities
List by the EPA on September 8, 1983, as generally depicted on Exhibit 6
attached hereto.
"Common Law Claim" means any proceeding, suit or legal action instituted
in Court, or written demand or claim asserted, with respect to the Site, the
Port Property and Roadways, the PRI Property, the Upland Waste Disposal
Facilities, the Hylebos Area or the Non-Hylebos Area, or operations thereon, as
applicable, by a Third Party against OCC
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 61
Tacoma or Pioneer, their respective successors or permitted assigns, or their
respective Affiliates, pursuant to tort or contribution causes of action under
the common law (or codification thereof) of the State of Washington, or, if
applicable to any of the Upland Waste Disposal Facilities, the common law of
another jurisdiction, for Damages arising from Environmental Conditions or
Environmental Violations.
"Correction," "Correct," "Corrected" or "Correcting" means the necessary
correction of an Environmental Violation imposed by a Governmental Authority or
Court, * .
"Court" means any court or judicial tribunal which exercises
jurisdiction over the Site, the Port Property and Roadways, the PRI Property,
the Upland Waste Disposal Facilities, the Hylebos Area or the Non-Hylebos Area,
or the operations thereon, as applicable, pursuant to Environmental Laws
(including a Canadian court or judicial tribunal to the extent it exercises
jurisdiction over the Release or Remediation (if any) in Canada of Hazardous
Materials (or the payment of Response Costs incurred for such Release or
Remediation in Canada, or the Correction or payment of Penalties for violation
of Environmental Laws occurring in Canada) arising from operations at the Site,
and including a tribal court or judicial tribunal to the extent it exercises
jurisdiction over the Release or Remediation (if any) on Indian lands of
Hazardous Materials (or the payment of Response Costs incurred for such Release
or Remediation on Indian lands, or the Correction or payment of Penalties for
violation of Environmental Laws occurring on Indian lands) arising from
operations at the Site).
"Court Order" means a binding and final order, judgment or decree
(including an interlocutory order under which performance is immediately
required regardless of any appeal) issued by a Court to OCC Tacoma or Pioneer,
their respective successors or permitted assigns, or any of their respective
Affiliates, as a result of an Environmental Claim or a Common Law Claim, which
order, judgment or decree compels, pursuant to Environmental Laws, the
Remediation of Hazardous Materials, the payment of the Response Costs of such
Remediation, the payment or mitigation of Natural Resource Damages, the
Correction of an Environmental Violation, the payment of Penalties for an
Environmental Violation, or which compels the payment of Damages in Common Law
Claims.
"Damages" means * .
"Delivery," "Deliver," or "Delivered" means (a) with respect to a Pre-
Event Period, the actual delivery of a Product produced at the Facility during
such Pre-Event
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 62
Period pursuant to Documented Product Deliveries, or (b) with respect to In-
Kind Replacement, the actual delivery of a Product following a Remediation
Event pursuant to Documented Product Deliveries.
"Direct Cost" means, with respect to an activity specified in this
Agreement, the actual, documented cost, whether variable or incremental,
expended for such activity, excluding any Employee Cost and any overhead or
internal project management costs of a Party or its Affiliates.
"Discharge" means (i) with respect to an Order, a Formal Agency Action,
or an Environmental Claim, a binding and final written withdrawal,
certification of completion, termination letter, settlement, discharge, release
or dismissal, or (ii) with respect to a Common Law Claim or an Environmental
Claim, a binding and final order, written covenant not to sue, settlement,
satisfaction of judgment, judgment, release or dismissal, in either case (i) or
(ii), in favor of the Parties, OCC Tacoma Indemnified Persons and Pioneer
Indemnified Persons named in such Order, Formal Agency Action, Environmental
Claim or Common Law Claim, * . A "Discharge" shall not occur if OCC Tacoma
or its Affiliates have outstanding Remedial obligations (other than the
contingent reservations described above and those provided in Sections 2.5(c)
and (d) related to deed restrictions) with respect to the Order, Formal Agency
Action, Environmental Claim or Common Law Claim for which it is sought.
"Documented Lost Profits" means the sum of the profits on a Product-
specific basis Pioneer would have realized on the sale of Products pursuant to
Documented Product Deliveries to Third Party customers or to Affiliates of
Pioneer but for a Loss of Production directly caused by a Remediation Event, as
such amount is proposed by Pioneer or, upon request by OCC Tacoma, as
determined by the Pioneer Accountant (subject to dispute resolution) in
accordance with GAAP, by (a) multiplying (i) the difference between the Loss of
Production of each Product and the In-Kind Product Replacement of such Product,
expressed in tons, by (ii) the difference between the Average Price of such
Product and the sum of the Average Production Cost and the Average Freight Cost
for such Product, expressed in dollars per ton, and (b) adding the resulting
amount for each Product subject to a Loss of Production.
"Documented Product Deliveries" means (a) with respect to a Pre-Event
Period, documented shipments by Pioneer to Third Party customers or to
Affiliates of Pioneer during a Pre-Event Period of specific quantities of a
Product produced at the Facility during such Pre-Event Period, or (b) with
respect to a Remediation Event, quantities of a Product which would have been
delivered by Pioneer to Third Parties or to Affiliates of
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 63
Pioneer but which Product was not delivered by Pioneer due to a Loss of
Production directly caused by such Remediation Event.
"DRP" means the Dispute Resolution Panel established pursuant to Section
6.3 of this Agreement.
"dry short ton" means two thousand (2,000) pounds of 50% liquid caustic
soda, basis 76% Na(2)O.
"Early Sunset Date" means the earliest date on which: * .
"Employee Cost" means the costs of compensation, benefits or other
direct or indirect costs of employees of a Party, its successors or permitted
assigns, or any of their respective Affiliates. In calculating the Average
Production Costs, Employee Cost means the foregoing, but only with respect to
those Pioneer employees engaged in duties directly related to manufacturing,
and excluding employees engaged in corporate management, administration, sales,
marketing, transportation or other duties not directly related to
manufacturing.
"Environmental Claim" means a Remediation Claim asserted by a
Governmental Authority or Third Party or a Penalty Claim asserted by a
Governmental Authority or a Third Party.
"Environmental Condition" means * .
"Environmental Laws" means all applicable local, state, tribal,
Canadian, and federal laws, statutes, rules, regulations, Indian treaties, and
ordinances (as Canadian laws, statutes, rules, regulations or ordinances may be
applicable to the Release or Remediation (if any) in Canada of Hazardous
Materials (or the payment of Response Costs incurred for such Release or
Remediation in Canada, or the Correction or payment of Penalties for violation
of Environmental Laws occurring in Canada) arising from operations at the Site,
and as tribal laws, statutes, rules, regulations or ordinances or Indian
treaties may be applicable to the Release or Remediation (if any) on Indian
lands of Hazardous Materials (or the payment of Response Costs incurred for
such Release or Remediation on Indian lands, or the Correction or payment of
Penalties for violation of Environmental Laws occurring on Indian lands)
arising from operations at the Site) pertaining to (a) the protection of the
environment, (b) the conservation of natural resources, (c) the protection
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 64
of surface water and groundwater, or (d) the use, generation, transportation,
treatment, storage, Release or Remediation of any Hazardous Material,
including, without limitation, CERCLA, RCRA, the Federal Water Pollution
Control Act, 33 U.S.C. Sections 1251-1387, the Clean Air Act, 42 U.S.C.
Sections 7401-7671q, the Toxic Substances Control Act, 15 U.S.C. Sections 2601-
2692, the Hazardous Materials Transportation Act, 49 U.S.C. Sections 5101-5127,
the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Sections 136-
136y, the Oil Pollution Act of 1990, 33 U.S.C. Sections 2701-2761, the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11001-
11050, the Safe Drinking Water Act, 42 U.S.C. Sections 300f to 300j-26, the
Washington Model Toxics Control Act, Chapter 70.105D RCW ("MTCA"), the
Washington Hazardous Waste Management Act, Chapter 70.105 RCW, the Washington
Water Pollution Control Act, Chapter 90.48 RCW, the Washington Clean Air Act,
Chapter 70.94 RCW, the Shoreline Management Act of 1971, Chapter 90.58 RCW, and
any implementing or successor law and any final rule or regulation, binding
interpretation, injunction, order, decree, or permit issued thereunder, as the
same may be amended from time to time; however, notwithstanding the foregoing,
this term shall exclude all laws, statutes, rules, regulations or ordinances
pertaining principally to safety and health of employees or other
Representatives of any Person, or principally to land use planning, zoning,
subdivision, development, demolition or construction, including, without
limitation, the Tacoma City Code and any applicable building, plumbing,
electrical and fire codes.
"Environmental Matter" means any (a) Administrative Order, (b) Court
Order, (c) Environmental Condition, (d) Environmental Violation, (e)
Remediation Claim, (f) Penalty Claim, (g) Common Law Claim, (h) Release subject
to regulation by any Governmental Authority or under any Environmental Law, (i)
proceeding before any Court or Governmental Authority arising from, or related
to, any Environmental Law, (j) Formal Agency Action, (k) Identified
Environmental Violation, or (l) Post-Closing Environmental Violation.
"Environmental Violation" means a violation of, or noncompliance with,
any Environmental Law, or permit issued pursuant to such Environmental Law,
applicable to any activities, operations, events or occurrences arising from
operations at the Site.
"EPA" means the United States Environmental Protection Agency.
"Excluded Activity" means an activity by * .
"Excluded Activity Aggregate Limit" means the maximum aggregate
liability of * .
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 65
"Excluded Condition Common Law Claim" means any proceeding, suit or
legal action instituted, or written demand or claim asserted, by a Third Party
against OCC Tacoma or Pioneer, their respective successors or permitted
assigns, or their respective Affiliates, pursuant to * .
"Excluded Environmental Condition" means any of the following Pre-
Closing Environmental Conditions, regardless of the date on which, or whether,
such Environmental Condition becomes subject to an Administrative Order or a
Court Order:
(a) Hazardous Materials present in surface water, groundwater,
sediment, or soil in the Non-Hylebos Area;
(b) Hazardous Materials Released by or on behalf of OCC Tacoma
or its Affiliates at the Upland Waste Disposal Facilities; and
(c) Natural Resource Damages.
"Expansion" or "Expand" means to expand after the Closing the surface
area of the Site (by means other than dredging) which is covered by
Improvements or to move or relocate any Improvements, or to replace such
Improvements existing as of the Closing, in each case with different
Improvements which do not have substantially the same footprint and foundation
in the same location as the existing Improvements.
"Facility" means the chlor-alkali manufacturing facility located on the
Site.
"Force Majeure" means (i) any circumstance beyond the reasonable control
of the affected Party, including: acts of God or the public enemy, fire,
accident, landslide, flood, explosion, war, earthquake, drought, perils of the
sea, sabotage, embargo, hurricanes, tornadoes, riots, confiscation, seizure, or
closure of the Facility or the Site, by Governmental Authorities, inability to
obtain, or shortage of, fuel, utilities, supplies, equipment, transportation or
materials, or accident to, malfunction or breakage of Improvements, and (ii)
any labor trouble, strike, walkout, lockout, or injunction (whether or not such
labor event is within the reasonable control of the affected Party).
"Formal Agency Action" means any formal administrative action taken in
writing or formal administrative enforcement proceeding instituted in writing,
or written notice, complaint, order or directive issued by a Governmental
Authority (including, without
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 66
limitation, any notice of violation, notice of deficiency, demand,
administrative complaint, administrative subpoena, assessment of Response Costs
or Penalties or proposed order).
"Governmental Authority" means any applicable federal, state, county,
city, town, municipality, tribal, local, Canadian government or other political
subdivision thereof and any department, commission, board, bureau,
instrumentality, agency, council or other governmental entity which exercises
executive, legislative, regulatory or administrative authority over the Site,
the Port Property and Roadways, the PRI Property, the Upland Waste Disposal
Facilities, the Hylebos Area or the Non-Hylebos Area, or the operations
thereon, as applicable, pursuant to Environmental Laws (as a Canadian
government entity may be applicable to the Release or Remediation (if any) in
Canada of Hazardous Materials (or the payment of Response Costs incurred for
such Release or Remediation in Canada, or the Correction or payment of
Penalties for violation of Environmental Laws occurring in Canada) arising from
operations at the Site, and as a tribal government entity may be applicable to
the Release or Remediation (if any) on Indian lands of Hazardous Materials (or
the payment of Response Costs incurred for such Release or Remediation on
Indian lands, or the Correction or payment of Penalties for violation of
Environmental Laws occurring on Indian lands) arising from operations at the
Site).
"Hazardous Material" means any "hazardous substance" or "hazardous
waste" as defined, identified or listed as of the Closing in any Environmental
Laws in effect as of the Closing, and includes, solely for purposes of this
Agreement, any radioactive substance, pesticide, petroleum product, crude oil
or any fraction thereof, and asbestos in friable form (other than asbestos in
the chlor-alkali cells).
"Hylebos AOC" means the Administrative Order on Consent for Pre-
Remedial Design Study, dated November 29, 1993, among the EPA, OxyChem and five
other designated PRPs to perform certain Remediation in the Hylebos Waterway of
the CB/NT Site, as modified or amended.
"Hylebos Area" means the Hylebos Waterway and that portion of the CB/NT
Site which includes (a) the geographic area addressed by the Hylebos AOC
(including the Head of the Hylebos Waterway and the Mouth of the Hylebos
Waterway areas), (b) any area where Remediation is subsequently conducted as a
consequence of the pre-remedial design work performed under the Hylebos AOC,
and (c) any area of the CB/NT Site or Commencement Bay where Hazardous
Materials from the Hylebos Waterway have been deposited or otherwise have or
will come to be located as a result of transport caused by tidal action, flow
of water, erosion, leaching or other natural migration.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 67
"Hylebos Area Common Law Claim" means a * .
"Hylebos Waterway" means the waterway adjacent to the Site.
"Identified Common Law Claim" means any proceeding, suit or legal action
instituted, or written demand or claim asserted, by a Third Party against OCC
Tacoma or Pioneer, their respective successors or permitted assigns, or their
respective Affiliates, pursuant to * .
"Identified Environmental Condition" means any Pre-Closing Environmental
Condition, excluding any Specified Environmental Condition, which is * .
"Identified Environmental Violation" means * .
"Improper Treatment System Operation" means * .
"Improvement" means any machinery, equipment, building, structure or
improvement located at or in the vicinity of the Site and used either by
Pioneer in the operation of the Facility or other operations of Pioneer on the
Site or by OCC Tacoma or its Affiliates or Representatives in connection with
Remediation or Correction or an Excluded Activity.
"Indemnified Group" means all Indemnified Persons seeking
indemnification for an individual Indemnity Claim against one Party or the
other Party.
"Indemnified Person" means the Person seeking defense or indemnification
under this Agreement, and is either an OCC Tacoma Indemnified Person or a
Pioneer Indemnified Person, as applicable.
"Indemnifying Party" means the Party from whom defense or
indemnification is sought under this Agreement, and is either OCC Tacoma or
Pioneer, or their respective successors or permitted assigns, as applicable.
"Indemnity Claim" means a claim by one Party to the other Party seeking
defense or indemnification pursuant to Article III and IV hereof.
"Indemnity Notice" means a written notice by one Party to the other
Party of an Indemnity Claim.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 68
"Information" means information any of any kind concerning (a) the past
and present assets, business, operations, liabilities or property of OCC Tacoma
or its Affiliates, other than the Assets or the Facility, (b) the transactions
contemplated by this Agreement, or (c) any Environmental Conditions,
Environmental Violations, Environmental Claims or Common Law Claims, in each
case obtained from any other Party or any of its Affiliates or Representatives.
"In-Kind Consideration" means the amount expressed in dollars on a
Product-specific basis as proposed by Pioneer or, upon request by OCC Tacoma,
as estimated in advance and subsequently confirmed by the Pioneer Accountant
(subject to dispute resolution) in accordance with GAAP for OCC Tacoma
providing any In-Kind Replacement for a Loss of Production, to be (a) the In-
Kind Product Replacement of a Product subject to a Loss of Production
multiplied by (b) the sum of (i) the Average Production Cost of such Product
and (ii) the actual freight cost per ton (reduced by applicable discounts or
rebates) that would have been incurred by Pioneer in Delivering Product to
specific Third Party customers or Affiliates of Pioneer receiving In-Kind
Product Replacement, as determined, if available, by the Average Freight Cost
to such specific customers or Affiliates during the Pre-Event Period, using the
books and records of Pioneer and other information requested by the Pioneer
Accountant from Pioneer.
"In-Kind Product Replacement" means the number of tons of a Product
Delivered or to be Delivered by OCC Tacoma or its Affiliates, in accordance
with this Agreement, in partial or total replacement of a Loss of Production
resulting from a Remediation Event, as reasonably directed by Pioneer to Third
Party customers or to Affiliates of Pioneer serviced from the Facility pursuant
to Documented Product Deliveries prior to such Remediation Event, and which may
be provided by OCC Tacoma in lieu of Documented Lost Profits.
"Knowledge of OCC Tacoma" means the knowledge of the officers and key
employees of OCC Tacoma or its Affiliates identified on Schedule 2 attached
hereto.
"Loss of Production" means the documented reduction, whether partial or
total, on a Product-specific basis, in the number of tons of a Product produced
by the Facility for Delivery pursuant to Documented Product Deliveries to Third
Party customers or to Affiliates of Pioneer, which reduction is directly caused
by a Remediation Event, as such number of tons is proposed by Pioneer or, upon
request by OCC Tacoma, determined by the Pioneer Accountant (subject to dispute
resolution) and measured by the extent to which (a) actual daily production of
such Product by the
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 69
Facility for Delivery during the Remediation Event in tons is less than the
average daily production of such Product by the Facility for Delivery during
the twelve (12) calendar months next preceding the calendar month in which the
Remediation Event occurs; provided, however, that such reduction of the number
of tons of Product produced shall not include any such reduction caused by or
resulting from actions or events, voluntary or involuntary, taken by or
happening to Pioneer, whether before or after the Remediation Event, including
Repair or Expansion and Improper Treatment System Operation, but excluding any
Excluded Activities and Treatment System Operation (other than Improper
Treatment System Operation).
"Material Adverse Effect" means, with respect to any Person, asset or
operation, any set of circumstances or events which in the aggregate would
constitute, or cause a material adverse effect on such asset or operation and
in the case of any Person, its condition, financial or otherwise, or on the
ability of such Person to perform its obligations under the transactions
contemplated pursuant to this Agreement.
"Material Compliance" means compliance in all material respects with an
applicable Order (or, with respect to a matter subject to indemnification
pursuant to Article III for which no Order is issued, with a Formal Agency
Action) as determined by the applicable Governmental Authority with
jurisdiction over such Order (or, as applicable to indemnification as noted in
the preceding parenthetical, a Formal Agency Action) and including compliance
with the least stringent standards of any permit or Environmental Law
applicable thereto, subject to * .
"Maximum Sunset Date" means the following:
(a) The thirtieth (30th) Anniversary for * ;
(b) The twenty-fourth (24th) Anniversary for * ;
(c) The twenty-fourth (24th) Anniversary for * .
"Natural Resource Damages" means * .
"Neutral Accountant" means a qualified accounting firm selected by the
Pioneer Accountant and the OCC Tacoma Accountant pursuant to Subsection 6.3(e)
of this Agreement.
"Non-Hylebos Area" means that portion of the CB/NT Site and of
Commencement Bay excluding the Hylebos Area. This term includes the Ruston
Shoreline Study Area, the City Waterway, the Wheeler-Osgood Waterway, the
Middle Waterway, the St. Paul
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 70
Waterway, the Sitcum Waterway, the Blair Waterway and any portion of the
Nearshore or Tideflats areas not impacted by tidal action, flow of water,
erosion, leaching or other natural migration from the Hylebos Waterway.
"OCC Tacoma" means OCC Tacoma, Inc., a Delaware corporation, its
successors and permitted assigns.
"OCC Tacoma Accountant" means Arthur Andersen, LLP, or such other
nationally recognized accounting firm as shall be selected by OCC Tacoma.
"OCC Tacoma Indemnified Persons" means OCC Tacoma and its Affiliates,
successors and permitted assigns, and their respective Representatives.
"Order" means an Administrative Order or a Court Order.
"Order Notice" means written notice by one Party to the other Party of
receipt of a written Order or Formal Agency Action.
"OxyChem" means Occidental Chemical Corporation, a New York corporation.
"Party" means Pioneer or OCC Tacoma, as applicable, and "Parties" means
Pioneer and OCC Tacoma.
"PCI" means Pioneer Companies, Inc., a Delaware corporation.
"Penalty" or "Penalties" means administrative, civil or criminal fines
or penalties, including stipulated penalties but excluding punitive or
exemplary damages, imposed by a Governmental Authority or a Court pursuant to
Environmental Laws.
"Penalty Claim" means a Formal Agency Action, a proceeding, suit or
legal action instituted in Court by a Governmental Authority or Third Party, or
a written demand or claim asserted by a Governmental Authority or Third Party,
in each case after the Closing against OCC Tacoma or Pioneer, their respective
successors or permitted assigns, or their respective Affiliates, pursuant to
Environmental Laws, regarding the Correction of a violation of Environmental
Laws, or to recover Penalties for such violation.
"Permits" means the authorizations, consents, approvals, registrations,
permits or certifications, in effect immediately prior to the date of this
Agreement, and which impose any present or future obligations, issued pursuant
to Environmental Laws by a
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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Governmental Authority with respect to the operation of the Site and the
Assets, as such Permits are identified on Schedule 3 attached hereto.
"Person" means any natural person, corporation, limited liability
company, partnership, group, joint venture, trust, PRP Group, association or
other business enterprise or organization or any Governmental Authority or any
other entity.
"Physical Change Aggregate Limit" means * .
"Pioneer" means Pioneer Chlor Alkali Company, Inc., a Delaware
corporation, its successors or assigns, in each case as approved and permitted
under Sections 7.9 and 7.10.
"Pioneer Accountant" means Deloitte & Touche, LLP, or such other
nationally recognized accounting firm as shall be selected by Pioneer.
"Pioneer Indemnified Persons" means Pioneer and its Affiliates,
successors and permitted assigns, and their respective Representatives.
"Port Property and Roadways" means real property owned as of the date
hereof by the Port of Tacoma and roadways of the City of Tacoma and/or Pierce
County (including Alexander Avenue), all located to the plant north and plant
west of the Site.
"Post-Closing Environmental Condition" means an Environmental Condition
caused by a Release which occurs after the Closing.
"Post-Closing Environmental Violation" means any violation occurring
after the Closing, whether or not such violation also existed prior to or as of
the Closing of (a) any Environmental Law or (b) any permit or Order issued
thereunder, in either case, arising from or related to the operation of the
Site, which violation is the subject of a Formal Agency Action or Order.
"Pre-Closing Environmental Condition" means an Environmental Condition
caused by a Release which occurred prior to the Closing.
"Pre-Event Period" means the twelve (12) months next preceding the
calendar month in which a Remediation Event occurs which directly causes a Loss
of Production.
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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"PRI Property" means that certain real property located adjacent to the
southern boundary of the Site owned as of the date hereof by PRI Northwest,
Inc., as described in Exhibit 7 attached hereto.
"Products" means liquid chlorine, muriatic acid and calcium chloride in
units of short tons, caustic soda ("NaOH") in units of dry short tons produced
by Pioneer following the Closing and during the Pre-Event Period for delivery
to Third Party customers or shipment to Affiliates of Pioneer.
"Project Manager" means a Representative of a Party designated by that
Party for consultation pursuant to Article V of this Agreement.
"PRPs" means potentially responsible parties identified as having
potential liability or responsibility with respect to an Environmental
Condition.
"PRP Group" means a group of Persons that performs Remediation of
Environmental Conditions and/or pays to a Governmental Authority or a Third
Party the Response Costs therefor, in each case pursuant to Environmental Laws.
"RCRA" means the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. Sections 6901-6992k.
"RCRA Permit" means Permit No. WAD009242314, effective as of November
16, 1988, issued pursuant to RCRA by Region 10 of the EPA and the Washington
State Department of Ecology, as modified and amended.
"Related Agreement" means:
(a) the Asset Purchase Agreement
(b) the Assignment and Assumption Agreement (Richmond),
(c) the Assignment and Assumption Agreement (Wilmington),
(d) the Bargain and Sale Deed,
(e) the Chlorine and Caustic Soda Sales Agreement,
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(f) the Chlorine Purchase Agreement,
(g) the Conveyance Instrument,
(h) the Environmental Easement,
(i) the Interim Services Agreement,
(j) the OCC Guaranty,
(k) the Richmond Product Exchange and Terminal Services
Agreement,
(l) the Wilmington Product Exchange and Terminal Services
Agreement,
(m) any other document required to effect the Conveyance and
executed and delivered at the Closing, and
(n) the Purchaser Guaranty.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, leaching, dumping, or disposing of Hazardous Materials
or other substances or materials into the atmosphere (excluding indoor air),
onto or into the soil or sediment, or into groundwater or surface water,
excluding migration.
"Remediation," "Remediate," "Remediated" or "Remediating" means * .
"Remediation Areas" means * .
"Remediation Claim" means a Formal Agency Action, a proceeding, suit or
legal action instituted in Court by a Governmental Authority or Third Party, or
a written demand or claim asserted by a Governmental Authority or Third Party,
in each case after the Closing against OCC Tacoma or Pioneer, their respective
successors or permitted assigns, or their respective Affiliates, pursuant to
Environmental Laws, regarding the
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 74
Remediation of Hazardous Materials, the recovery of Response Costs incurred by
a Governmental Authority or Third Party, or the payment or mitigation of
Natural Resource Damages.
"Remediation Damages" means * .
"Remediation Event" means any Remediation activity conducted by OCC
Tacoma, its successors, assigns or Representatives at the Site or in the
Hylebos Area, the PRI Property or the Port Property and Roadways at any time or
from time to time which * .
"Repair" means repair and maintenance activities, excluding dredging,
necessary to the continued operation of the Assets and the replacement of
Improvements at their existing locations and which have substantially the same
footprint and foundation, each as conducted in the ordinary course of the
operation of the Facility.
"Representative" means any director, officer, employee, agent,
accountant, legal counsel, contractor or other representative of a Person
acting on such Person's behalf (whether or not the actions exceed the scope of
representation), excluding a PRP Group; provided, however, that one Party or
its Affiliates shall not be considered or deemed to be a Representative of the
other Party or its Affiliates.
"Response Costs" means * .
"Scheduled Remediation Event" means a Remediation Event for which prior
notice is given by OCC Tacoma to Pioneer.
"short ton" means two thousand (2,000) pounds.
"Site" means that certain real property as described on Exhibit 8
attached hereto which shall be deemed to include any dock or docks located on
or appurtenant to such real property.
"Specified Condition Common Law Claim" means any proceeding, suit or
legal action instituted, or written claim or demand asserted, by a Third Party
* .
"Specified Environmental Condition" means one of the Pre-Closing
Environmental Conditions described below:
* .
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity, a majority (by number of
votes) of the Voting Securities of which is at the time owned by such Person or
by one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries.
"Third Party" means any Person, including a PRP Group or any of its
members, that is not (a) a Party; (b) a successor to or permitted assign of a
Party; (c) an Affiliate of any of (a) or (b); (d) a Representative of any of
(a), (b) or (c); or (e) a Governmental Authority.
"tons" means short tons with respect to chlorine, muriatic acid and
calcium chloride, and dry short tons with respect to caustic soda.
"Treatment System" means the groundwater treatment facility used to
Remediate the Specified Environmental Condition described in paragraph (a) of
the definition of Specified Environmental Condition, including, without
limitation, the groundwater monitoring, injection and extraction wells, steam
distillation treatment system, carbon treatment system, solids handling system,
control room, sampling devices and equipment and associated support buildings,
structures, equipment and piping.
"Treatment System Operation" means the operation of the Treatment
System.
"Underlying Claim" means a Remediation Claim, Penalty Claim, Common Law
Claim, Formal Agency Action, Administrative Order or Court Order, as
applicable.
"Unscheduled Remediation Event" means a Remediation Event for which
prior notice is not given by OCC Tacoma to Pioneer.
"Upgrade" means any increase in production capacity or other upgrade of
the operational capability of the Facility as compared to such capacity or
capability immediately prior to a Remediation Event, as a direct result of the
repair, moving, relocation or functional replacement of any Improvement
required by such Remediation Event.
"Upland Waste Disposal Facilities" means * .
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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<PAGE> 76
"VOCs" means the following volatile organic compounds: methylene
chloride, 1,2 trans-dichloroethylene, trichloroethylene, 1,1,2,2
tetrachloroethane, tetrachloroethylene, carbon tetrachloride, 1,1
dichloroethylene, chloroform, 1,1,2 trichloroethane and vinyl chloride.
"Voting Securities" means stock or other equity or voting interests of
any class or classes (however designated), the holders of which are at the time
entitled, as such holders, to vote for the election of a majority of the
directors (or persons performing similar functions) of the corporation,
association, partnership or other business entity in question, other than stock
or other equity or voting interests having the right to vote solely by reason
of the happening of a contingency.
*
*
*CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND RULE
24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
A-19
