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EXHIBIT 10.12
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT ("Agreement") is made between Imperial
Chemical Industries PLC, a corporation incorporated under the laws of the
United Kingdom ("Imperial"), ICI Canada Inc., a corporation incorporated under
the laws of Canada ("ICI Canada"), ICI Americas Inc., a Delaware corporation
("ICI Americas") (each an "ICI Party") and collectively, the "ICI Parties") and
PCI Chemicals Canada Inc., a New Brunswick corporation ("PCI Canada"), and PCI
Carolina Inc., a Delaware corporation ("PCI Carolina" and, with PCI Canada,
collectively, the "Pioneer Parties").
WITNESSETH:
WHEREAS, ICI Canada, ICI Americas and the Pioneer Parties have entered
into an Asset Purchase Agreement dated as of September 22, 1997 (the "Purchase
Agreement"), as amended, pursuant to which PCI Canada and PCI Carolina will
acquire the Assets, the U.S. Assets, the Business and the U.S. Business as
defined and described therein (the Business and the U.S. Business being herein
collectively called the "Pioneer Business"); and
WHEREAS, in partial consideration and as a material inducement to the
Pioneer Parties to enter into the Purchase Agreement and related transactions,
the ICI Parties have agreed to enter into this Agreement relating to
noncompetition with the Pioneer Parties;
WHEREAS, the ICI Parties and the Pioneer Parties agree that ICI
America's and ICI Canada's customers and competitors are located principally in
the mid-Atlantic, south and eastern regions of the United States and the
provinces including and east of Manitoba in Canada;
NOW THEREFORE, for and in consideration of the mutual promises,
covenants and obligations contained herein and in the Purchase Agreement,
Imperial and each of the other ICI Parties hereby agree as follows:
ARTICLE 1
NONCOMPETITION AGREEMENT
1.1 NONCOMPETITION
(a) Each of the ICI Parties covenants and agrees that during the
Term, it will not, nor will it cause or permit any Affiliate
to manufacture, produce, sell, distribute or otherwise deal in
or with, directly or indirectly (including through any sales
representative, distributor or other marketing activity
conducted by or for the account of any ICI Party or any of
their Affiliates but excluding operations of any ICI Party or
Affiliate
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thereof as presently conducted, including exchanges or swaps
entered into in the ordinary course of business) any Product
in the Specified Geographical Area (as such terms are defined
below), other than through the Pioneer Parties or any
Affiliate of the Pioneer Parties.
(b) For purposes of the preceding paragraph:
(i) "Affiliate" shall have the meaning set forth in the
Purchase Agreement.
(ii) "Pioneer Business" shall mean the Business and the
U.S. Business acquired under and defined in the
Purchase Agreement, and activities directly related
and incidental thereto.
(iii) "Specified Geographical Areas" shall mean the states
of the United States and provinces of Canada as set
forth in Attachment A hereto.
(iv) "Products" shall mean caustic soda, cereclor and
anhydrous caustic soda.
(v) "Term" shall mean the period which commences on the
date of this Agreement and continues thereafter until
five (5) years after the date of this Agreement.
1.2 SEVERABILITY; REMEDIES. The parties intend that the noncompetition
provisions of this Article 1 shall be deemed to be a series of separate
covenants, one for each and every state of the United States of America and
province of Canada where such provisions are intended to be effective. The
parties to this Agreement acknowledge that money damages would not be a
sufficient remedy for any breach of this Article, and the Pioneer Parties shall
be entitled to enforce the provisions of this Article by specific performance
and injunctive relief as remedies for a breach of this Article, but shall be
entitled in addition to all remedies available at law or in equity, including
the recovery of damages from any party involved in such breach and remedies
available pursuant to other agreements with such parties.
1.3 EXCEPTION; INCIDENTAL BUSINESS.
(a) For greater certainty, the Pioneer Parties acknowledge that
any future direct or indirect acquisition(s) or subsequent
operation by any ICI Party, or by any Affiliate thereof, of a
business or businesses which include(s) an Incidental Business
engaged in any activity contrary to paragraph 1.1(a), shall
nonetheless not constitute a breach thereof.
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(b) For purposes of the preceding paragraph, "Incidental Business"
shall mean a portion of a business, where the gross annual
revenues of the Incidental Business do not exceed 20% of the
gross annual revenues of the entire business.
ARTICLE 2
2.1 NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given (i) when personally delivered, (ii) when transmitted by
telecopier (on the date of confirmation of receipt), (iii) on the next business
day when delivered by a recognized national overnight courier service, or (iv)
on the fourth business day after the date mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Pioneer Parties, to: Pioneer Companies, Inc.
7000 Louisiana Street
Houston, Texas 77002
Attention: General Counsel
Telecopier (713) 223-9202
If to the ICI Parties, to: ICI Canada Inc.
90 Sheppard Ave. East
P.O. Box 200, Station A
North York, Ontario
CANADA M2N 6H2
Attention: General Counsel
Telecopier: (416) 229-8187
or to such other address as any party may furnish to the others in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
2.2 APPLICABLE LAW. This Agreement is entered into under, and shall be
governed and construed in accordance with, the laws of the Province of Quebec
and the laws of Canada applicable thereto.
2.3 NO WAIVER. No failure by any party hereto at any time to give notice
of any breach by any other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar
provisions or conditions at the same or at any prior or subsequent time.
2.4 SEVERABILITY. If a court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall
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not affect the validity or enforceability of any other provision of this
Agreement, and all other provisions shall remain in full force and effect.
2.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
2.6 HEADINGS. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
2.7 GENDER AND PLURALS. Wherever the context so requires, the masculine
gender includes the feminine or neuter, and the singular number includes the
plural and conversely.
2.8 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. For
greater certainty, this Agreement shall not be binding upon any arm's length
purchaser of a business of any ICI Party or any Affiliate thereof.
2.9 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement of parties with regard to the subject matter hereof. Any modification
of this Agreement will be effective only if it is in writing and signed by the
party to be charged.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 31st day of October, 1997.
IMPERIAL CHEMICAL INDUSTRIES PLC
By: /s/ Derek Kirk
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Name: Derek Kirk
Title: Acquisitions Power of Attorney
ICI CANADA INC.
By: /s/ Gerald L. Sheasgreen
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Name: Gerald L. Sheasgreen
Title: V.P. General Counsel
Corporate Secretary
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ICI AMERICAS INC.
By: /s/ Gerald L. Sheasgreen
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Name: Gerald L. Sheasgreen
Title: Corporate Secretary
PCI CHEMICALS CANADA INC.
By: /s/ Kent R. Stephenson
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Name: Kent R. Stephenson
Title: Vice President
PCI CAROLINA INC.
By: /s/ Kent R. Stephenson
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Name: Kent R. Stephenson
Title: Vice President
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ATTACHMENT A TO SCHEDULE 6.1(1)(I)
RIDER TO CONFIDENTIALITY AND NON COMPETITION AGREEMENT
SECTION 2.1(b)(iii)
UNITED STATES CANADA PROVINCES
Kentucky Maine New Brunswick
Illinois Vermont Nova Scotia
Louisiana New Hampshire Newfoundland
Tennessee Massachusetts Prince Edward Island
Connecticut Rhode Island Quebec
Mississippi New York Ontario
Ohio New Jersey Manitoba
Indiana Pennsylvania
Michigan Delaware
Maryland
Virginia
West Virginia
North Carolina
South Carolina
Georgia
Florida
Alabama