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EXHIBIT 2(b)
FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
This First Amendment ("Amendment") is entered into by and among
PCI CHEMICALS CANADA INC., a New Brunswick corporation, ("Purchaser"), PCI
CAROLINA, INC., a Delaware corporation ("U.S. Purchaser"), PIONEER COMPANIES,
INC., a Delaware corporation ("Pioneer"), ICI CANADA INC., a Canadian
corporation ("Vendor"), ICI AMERICAS INC., a Delaware corporation ("U.S.
Vendor") and IMPERIAL CHEMICAL INDUSTRIES PLC, a United Kingdom corporation
("ICI Parent ").
PRELIMINARY STATEMENTS
1. Purchaser, U.S. Purchaser, Pioneer, Vendor, U.S. Vendor
and ICI Parent (collectively, the "Parties") are parties to that certain Asset
Purchase Agreement dated as of September 22, 1997 contemplating the acquisition
by Purchaser and U.S. Purchaser or their assignee of certain assets, business
and undertakings comprising the Forest Products Division of Vendor and U.S.
Vendor for the consideration and upon the terms and conditions therein set
forth ("Purchase Agreement").
2. The Parties desire to amend the Purchase Agreement to
change the Closing Date, to provide for an effective Time of Closing as of
12:01 a.m. on October 31, 1997 and to make other agreed and conforming changes
to the Purchase Agreement. Capitalized terms used but not defined herein shall
have the meanings set forth in the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:
Amendment to Definitions in Section 1.1. (a) Certain of
the Definitions set forth in Section 1.1 of Article I of the Purchase Agreement
are amended hereafter to read in their entirety, as follows:
"ACTUAL WORKING CAPITAL" means Working Capital at the Effective
Time calculated in accordance with Schedule 7.4(1);
"BASE WORKING CAPITAL" means the amount of $17,304,000;
"CLOSING DATE" means November 5, 1997 or such other date, not
later than December 31, 1997 as may be agreed to in writing between the
Vendor and the Purchaser;
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(b) The following definition shall be added to the definitions
in Section 1.1:
"EFFECTIVE DATE" means October 31, 1997;
"EFFECTIVE TIME" means 12:01 a.m. on October 31, 1997;
(c) The words "Closing Date" utilized in the definition of
VENDOR'S RETAINED ENVIRONMENTAL LIABILITIES shall be changed to the
words "Effective Time," and Clause (b) in such definition is hereby
amended to read in its entirety as follows:
"(b) Operation of the Business or activities conducted on the
Cornwall Site prior to the Effective Time and any activity
carried out thereon by or on behalf of the Vendor or any
Affiliate of the Vendor or any employee of the Purchaser acting
as agent of the Vendor after the Effective Time pursuant to
Section 8.1(2)(l) hereof; and"
Amendment to Section 1.4. Section 1.4 of the Purchase
Agreement is hereby amended to read in its entirety as follows:
"All references to currency herein are to lawful money of Canada,
except that (i) the Purchase Price and adjustments thereto and
the payment to ICI Parent provided for in Section 2.4 shall be
paid pursuant to Section 2.9 in lawful money of the United
States, and (ii) the allocations in Schedule 2.5 are in lawful
money of the United States. For purposes of converting
adjustments provided for in this Agreement from Canadian dollars
to United States dollars, the exchange rate to be used shall be
the closing mid-point spot exchange rate as reported by Bloomberg
(x) in the case of any adjustments provided for in Section 2.4,
two Business Days prior to the Effective Date, and (y) in the
case of any payment to be made pursuant to Section 7.4, two
Business Days prior to the date such payment is due."
Amendments to Section 1.5. (a) Certain of the Schedules
attached to the Purchase Agreement are hereby amended, as follows:
(i) Schedule 2.1(2) dealing with "Machinery and Equipment" is
amended in its entirety to be in the form attached to this
Amendment as Schedule 2.1(2).
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(ii) Schedule 2.1(3) dealing with "Contracts" is amended in its
entirety to be in the form attached to this Amendment as Schedule
2.1(3).
(iii) Schedule 2.1(6) dealing with "Existing Permits" is amended
in its entirety to be in the form attached to this Amendment as
Schedule 2.1(6).
(iv) Schedule 2.2 dealing with "Excluded Assets" is amended in
its entirety to be in the form attached to this Amendment as
Schedule 2.2.
(v) Schedule 2.3 dealing with "Contracts Requiring Consent to
Assignment" is amended in its entirety to be in the form attached
to this Amendment as Schedule 2.3.
(vi) Schedule 3.1(18) dealing with "Environmental Disclosure"
is amended in its entirety to be in the form attached to this
Amendment as Schedule 3.1(18).
(vii) Schedule 3.1(18)(a) dealing with "Environmental Permits"
is amended in its entirety to be in the form attached to this
Amendment as Schedule 3.1(18)(a).
(viii) Schedule 4.6(1) dealing with "Storage Tanks" is amended in
its entirety to be in the form attached to this Amendment as
Schedule 4.6(1).
(ix) Schedule 5.9(a) dealing with "Becancour Chemprox
Employees" is amended in its entirety to be in the form attached
to this Amendment as Schedule 5.9(a).
(x) Schedule 6.1(1)(l) is amended to change its title from
"Confidentiality and Noncompetition Agreement" to "Noncompetition
Agreement" and to be in the form attached to this Amendment as
Schedule 6.1(1)(l).
(xi) Schedule 7.4(1) dealing with "Actual Working Capital" is
amended in its entirety to be in the form attached to this
Amendment as Schedule 7.4(1).
(b) A new Schedule 2.5 entitled "Purchase Price Allocation" is added
to the Purchase Agreement and attached hereto.
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Amendments to Section 2.1. (a) The first sentence of
Section 2.1 is hereby amended to read in its entirety as follows:
"Upon and subject to the terms and conditions hereof, the Vendor
will sell to the Purchaser and the Purchaser will purchase from
the Vendor as a going concern, as of and with effect from the
Effective Time, the undertakings, business and operations of the
Business, including all of the assets owned by the Vendor or to
which the Vendor is entitled and belonging to or used in the
Business (collectively "Assets") including, without limitation,
the following:
(b) Section 2.1(5) is hereby amended to delete the words
"Closing Date" appearing therein and replace such words with the words
"Effective Time".
(c) The last sentence of Section 2.1 is hereby amended to read
in its entirety as follows:
"Subject to and simultaneous with completion of the sale and
purchase of the Assets, but effective for all purposes as of the
Effective Time, the U.S. Vendor shall sell to the U.S. Purchaser,
and the U.S. Purchaser shall purchase from the U.S. Vendor, the
undertakings, business and operations of the U.S. Business
including the assets set forth in Schedule 2.1.1 (the "U.S.
Assets")."
Amendment to Section 2.2. The first sentence of Section
2.2 is hereby amended to read in its entirety as follows:
"For the avoidance of doubt, the Excluded Assets listed in
Schedule 2.2 existing as of the Effective Time shall be retained
by the Vendor or the U.S. Vendor and shall not be sold, assigned
or transferred to the Purchaser or the U.S. Purchaser pursuant to
this Agreement."
Amendment to Section 2.4. Section 2.4 of the Purchase
Agreement is hereby amended to read in its entirety as follows:
"The purchase price payable to the Vendor for the Assets and to
the U.S. Vendor for the U.S. Assets will be U.S. $232,412,850
(such amount being hereinafter referred to as the "Purchase
Price), together with interest thereon from the Effective Time to
but excluding the Closing Date at the rate of 8 1/2% per annum,
and subject to adjustment (i) as
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contemplated in Sections 7.4 and 4.3(2) (except, as to the
latter, to the extent taken into consideration in the adjustment
of working capital contemplated by Section 7.4) and (ii) for
customary prorations for real property and school taxes and lease
rental payments (except to the extent taken into consideration in
the adjustment of working capital contemplated by Section 7.4),
and (iii) by deducting therefrom the amount of any dividend (or
the fair market value of any distribution) received by the Vendor
with respect to the Canso Common Shares during the period
commencing June 30, 1997 and ending on the Closing Date
(calculated in U.S. currency based upon the closing mid point
spot exchange rate reported by Bloomberg on the date of such
dividend or distribution), which Purchase Price (as so adjusted)
will be allocated in accordance with Section 2.5.
The Vendor shall undertake to have all utility service meters
recorded as of 8:00 a.m. on the Effective Date, with charges
prior to such time solely for the account of Vendor and charges
thereafter for the account of Purchaser. Purchaser shall make
arrangements for utility services on and after 8:00 a.m. on the
Closing Date.
In addition to the Purchase Price and in consideration of
execution and delivery by ICI Parent of the Noncompetition
Agreement referred to in Section 6.1(1)(l), the U.S. Purchaser
agrees to pay or cause to be paid to ICI Parent the sum of
U.S.$3,157,900, together with interest thereon from the Effective
Time to but excluding the Closing Date at the rate of 8 1/2% per
annum, with respect to the limitations and restrictions therein
provided applicable to the U.S. Business."
Amendment to Section 2.5. The first paragraph of
Section 2.5 of the Purchase Agreement dealing with Purchase Price Allocation is
hereby amended to read in its entirety as follows:
"Each of the Vendor, the U.S. Vendor and the Purchaser and the
U.S. Purchaser have agreed upon an allocation of the Purchase
Price among the Assets and US. Assets prior to the Effective Time
in the manner set forth in Schedule 2.5 attached to this
Agreement. The parties hereby agree to use such allocation and
to cooperate in good faith with each other in connection with the
preparation or filing of any information required to be furnished
to Revenue Canada and
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to the Ministere du revenu du Quebec and any applicable
Governmental Authority. The parties further agree that they will
not voluntarily take any inconsistent position thereafter,
whether in the course of an audit by any applicable Governmental
Authority or otherwise."
Amendment to Section 2.7. The words "Closing Date" and
"Time of Closing" in Section 2.7 are hereby deleted and replaced with the words
"Effective Time."
Amendment to Section 2.8. Section 2.8(b) is hereby
amended to delete the words "Time of Closing" appearing therein and to replace
such words with the words "Effective Time".
Amendment to Section 2.9. Section 2.9 is hereby amended
to add a second sentence which shall read in its entirety as follows:
"The amount payable to ICI Parent pursuant to Section 2.4 shall
be payable by delivery to ICI Parent at the Time of Closing of a
certified check or bank draft or by wire transfer of funds to ICI
Parent pursuant to wire transfer account information given to the
Purchaser and the U.S. Purchaser not later than three (3)
Business Days prior to the Closing Date."
Amendments to Section 3.1.
(a) Section 3.1(5)(b) is hereby amended to delete the words
"Closing Date" appearing therein and to replace such words with the
words "Effective Time".
(b) The third sentence of Section 3.1(8) is hereby amended to
delete the words "Closing Date" appearing therein and to replace such
words with the words "Effective Time".
(c) Section 3.1(22)(a) is hereby amended hereafter to read in
its entirety as follows:
"(22) (a) the authorized capital stock of Canso consists of
40,000 common shares, without nominal or par value;
Canso has no shares of capital stock outstanding
except for 11,140 common shares owned by ▇▇▇▇▇▇▇▇
▇▇▇▇▇ Nova Scotia Inc., 11,140 common shares owned
by Stora Forest Industries Inc. and the Canso
Common Shares (as hereinafter defined); all of the
Canso Common Shares are duly authorized, validly
issued as fully paid and non-assessable; the Vendor
has, and immediately prior to the Effective Date
will have, good and valid title to
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11,140 common shares of Canso (the "CANSO COMMON
SHARES"), with full right, power and authority to
transfer the Canso Common Shares to the Purchaser
at the Effective Time, free and clear of any and
all proxies, shareholder agreements, voting
agreements, voting trusts or Encumbrances other
than that certain Shareholders' Agreement dated as
of January 1, 1985, as amended by Extension of
Agreement dated as of January 1, 1990
("SHAREHOLDERS' AGREEMENT") set forth on Schedule
2.3, pursuant to which consent for the transfer of
the Canso Common Shares has been or will be
obtained prior to the Effective Date by the Vendor
from all parties thereto; upon the delivery of
certificates representing the Canso Common Shares
to the Purchaser on the Effective Date, the
Purchaser will acquire good and valid title to the
Canso Common Shares, free and clear of any and all
proxies, shareholder agreements, voting agreements,
voting trusts or Encumbrances, other than the
rights to purchase and restrictions set forth in
the Shareholders' Agreement; and ownership of the
Canso Common Shares does not impose on Purchaser
any obligation to make any contribution to the
capital of Canso or any indemnification obligations
vis a vis the other shareholders of Canso;"
(d) Section 3.1(22)(c)(2) is hereby amended to delete the
words "Closing Date" appearing therein and to replace such words with
the words "Effective Time".
(e) Section 3.1(23)(a) is hereby amended to read in its
entirety as follows:
"(a)" the Vendor is the sole owner by good and
marketable title of, and shall on the Closing Date but
as of the Effective Time transfer to the Purchaser good
and marketable title to, the Real Property, free and
clear of any and all Encumbrances (other than
Existing Encumbrances);"
(f) The third clause of Section 3.1(24) is hereby amended
to read in its entirety as follows:
"there is no material damage to any railcars included in the
Assets for which the Vendor is or would, at the Effective
Time, be liable to the lessor of such railcars;"
(g) The last sentence of Section 3.1(27) is hereby amended
to delete the words "Closing Date" appearing therein and to replace
such words with the words "Effective Time".
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Amendment to Section 3.1.1. Section 3.1.1(5)(ii) is
hereby amended to delete the words "Closing Date" appearing therein and
to replace such words with the words "Effective Time".
Amendments to Section 3.2. Sections 3.2(1), 3.2(2) and
3.2(3) are hereby amended by deleting therefrom the words "Closing Date"
and replacing such words with the words "Effective Time."
Amendments to Section 3.3. (a) Section 3.3(3)(b) is
hereby amended to delete the words "Closing Date" appearing therein and
to replace such words with the words "Effective Time".
(b) Section 3.3(5) is hereby amended to delete the words "Time
of Closing" appearing therein and to replace such words with the words
"Effective Time".
Amendments to Section 3.4. (a) Sections 3.4(1) and
3.4(3)(a) are hereby amended to delete the words "Closing Date" appearing
therein and replace such words with the words "Effective Time."
(b) Section 3.4(2) is hereby amended to delete the words "Time
of Closing" appearing therein and to replace such words with the words
"Effective Time".
Amendments to Section 4.1.
(a) The first sentence of Section 4.1 is hereby amended to add
at the end thereof and before the colon the words ", unless otherwise
specified:".
(b) Section 4.1(3) is hereby amended to delete the words "Time
of Closing" appearing in the third line therein and to replace such
words with the words "Effective Time".
(c) Section 4.1(4) is hereby amended to add at the end of the
first sentence thereof the following:
"except as provided pursuant to this Agreement."
(d) Section 4.1(5) is hereby amended to add at the beginning
thereof the following words:
"Through the Effective Time,"
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(e) Section 4.1(7) is hereby amended to delete therefrom the
words "including Environmental Laws" and to replace such words with the
following:
"(excluding Environmental Laws)".
(f) Section 4.1(9) is hereby amended to read in its entirety
as follows:
"The Vendor shall execute and deliver a Pension Transfer
Agreement dated and effective as of the Effective Time in respect
of the Employees of the Vendor to be employed by the Purchaser,
such agreement to be in the form attached hereto as Schedule
4.1(1)(9)(i). The U.S. Vendor shall execute and deliver a U.S.
Pension Transfer, Employee Benefits and Leased Employee
Agreement, dated and effective as of the Effective Time ("U.S.
Employee Agreement"), in respect of the U.S. Employees of the
U.S. Vendor to be employed by the U.S. Purchaser, such agreement
to be in the form attached hereto as Schedule 4.1(1)(9)(ii)."
(g) The second and third sentences of Section 4.1(11) of the
Purchase Agreement are hereby amended to read as follows:
"The Vendor shall also obtain and deliver to the Purchaser, on or
prior to the Closing Date, a retail sales tax clearance
certificate ("Ontario Certificate") from the Ministry of Finance
(Ontario) to the effect that all retail sales taxes collectible
by Vendor in the reporting period immediately preceding the
reporting period in which the Effective Time falls, have been
remitted. The Vendor will, in due course, provide the Purchaser
with a further Ontario Certificate which covers the reporting
period in which the Effective Time falls."
(h) Section 4.1 is amended to add the following additional
subsections:
"(14) As far as reasonably practicable, on or prior to the
Effective Time, the Vendor and the U.S. Vendor shall cause all
intercompany accounts receivables and payables existing as of the
Effective Time between the Vendor with respect to the Business
and the U.S. Vendor with respect to the U.S. Business to be fully
paid and discharged, and such intercompany receivables and
payables shall not be taken into consideration in the working
capital adjustment contemplated by Section 7.4 of this
Agreement."
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"(15) From and after the Effective Time, neither the Vendor nor
the U.S. Vendor shall pay or declare any dividend or otherwise
make any distribution or other transfer or disposition of cash or
any other assets, properties or rights included in the Assets or
the U.S. Assets as of the Effective Time other than sale or
deliveries of inventory in the Ordinary Course of Business, nor
shall any cash or cash equivalents received after the Effective
Time be used other than in payment of Accounts Payable and other
operating expenses in the Ordinary Course of Business."
"(16) The Vendor and the U.S. Vendor shall retain as Excluded
Assets all cash in bank accounts of the Business and the U.S.
Business (collectively, "Bank Accounts") at the Effective Time.
All cash or cash equivalents received in connection with the
Business or the U.S. Business after the Effective Time shall
constitute Assets or U.S. Assets of the Purchaser or the U.S.
Purchaser, or their assignees, as the case may be. All cash or
cash equivalents received in connection with the Business or the
U.S. Business before the Effective Time which had been applied to
reduce accounts that would otherwise have been Accounts
Receivable at the Effective Time but not yet deposited in the
Bank Accounts shall be retained by the Vendor and the U.S. Vendor
as Excluded Assets. The amount of all checks drawn on the Bank
Accounts issued and outstanding at the Effective Time shall be
treated as Accounts Payable at the Effective Time. All checks
drawn on the Bank Accounts and presented prior to the Closing
Date shall be honored by the Vendor or the U.S. Vendor, as the
case may be, and any shortfall of cash necessary for such purpose
shall be provided by the Vendor or the U.S. Vendor, as
applicable, and taken into account in the adjustment contemplated
by Section 7.4."
Amendments to Section 4.2. (a) Section 4.2(2) is hereby
amended to delete the words "Time of Closing" appearing in the third line
thereof and to replace such words with the words "Effective Time".
(b) Section 4.2(5) is hereby amended to delete the words "at
the Time of Closing" appearing therein and to replace such words with
the words "on the Effective Date".
Amendment to Section 4.3. Section 4.3 is hereby amended
in its entirety to read as set forth in Annex A hereto.
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Amendment to Section 4.4(1). Section 4.4(1) is hereby
amended in its entirety to read as follows:
"(1) The U.S. Vendor and the U.S. Purchaser shall execute such
assignments, bills of sale, leases, deeds or other
instruments of transfer, dated and effective as of the
Effective Time and delivered at the Time of Closing, as
shall be reasonably requested by the U.S. Purchaser and
necessary or appropriate to transfer title to the U.S.
Assets to the U.S. Purchaser or its permitted assignee,
free and clear of Encumbrances."
Amendment to Section 4.6. Section 4.6 is hereby amended
to delete therefrom the words "Closing Date" appearing in the initial
parenthetical therein and to replace such words with the words "Effective
Time".
Amendment to Section 4.7. Section 4.7(2) is hereby
amended to delete the words "Closing Date" appearing therein and to replace
such words with the words "Effective Time".
Amendment to Section 4.8. Section 4.8 is hereby amended
in the following respects:
(a) In the fourth line of the first paragraph, the words
"Closing Date" shall be deleted and replaced with the words "Effective
Time."
(b) In the fifth line of the first paragraph, the word
"transferred" preceding the words "Environmental Permits" shall be
deleted and replaced with the word "transferable."
(c) In the third line of the second paragraph, the word "of"
shall be deleted and replaced with the word "or."
(d) In the table set forth in Section 4.8 under the column
"YEAR CUMULATIVE EXPENDITURE INCURRED," and in the first line of the
footnote, the words "Closing Date" shall be deleted and replaced with
the words "Effective Time."
Amendment to Article 4. Article 4 is hereby amended to
add a new Section 4.9 dealing with "Montreal Business Office Payment" reading
in its entirety as follows:
"4.9 Montreal Office Lease - Rental on Excess Space
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The Vendor hereby agrees to reimburse the Purchaser the
amounts set out below in respect of the rental payments
for the period set out opposite such amounts during the
remaining term of the lease thereof. The Purchaser hereby
grants an option to the Vendor to use such excess space
during the period for which the Vendor is liable to
reimburse the Purchaser in respect of lease rentals. Such
option shall be exercisable by giving at least thirty (30)
days notice to the Purchaser and Vendor shall pay all
costs and expenses incurred to render such excess space
usable by Vendor or in connection with Vendor's cessation
of such use. All amounts due from the Vendor to the
Purchaser pursuant to this Section 4.9(14) shall be paid
promptly upon demand in writing by the Purchaser, which
demand shall be accompanied by reasonable supporting
documentation evidencing payment of rentals for such
month.
Lease Rental per Month, $
2 months ▇▇ ▇▇-▇▇-▇▇ 7,284
12 months ▇▇ ▇▇-▇▇-▇▇ 7,421
12 months ▇▇ ▇▇-▇▇-▇▇ 9,077
12 months ▇▇ ▇▇-▇▇-▇▇ 9,228
12 months ▇▇ ▇▇-▇▇-▇▇ 9,388
12 months ▇▇ ▇▇-▇▇-▇▇ 9,555
12 months ▇▇ ▇▇-▇▇-▇▇ 9,730"
Amendment to Section 5.7. The first sentence of Section
5.7 is hereby amended in its entirety hereafter to read as follows:
"The Vendor will prepare and file sales tax returns for the
period from the last required filing date prior to and through
and including the Effective Time."
Amendment to Section 5.10. Section 5.10 is hereby amended
to read in its entirety as follows:
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"In connection with that certain agreement entered into between
the Vendor and Stanchem, Inc. dated as of October 29, 1990
("Stanchem Agreement") and which is included in the Contracts
assumed by the Purchaser as of the Effective Time, the Vendor
agrees to indemnify and hold the Purchaser harmless from (a) any
loss, deficiency, shortfall or Claim (excluding any such matter
arising out of the gross negligence or willful misconduct of the
Purchaser) incurred by the Purchaser in performing its
obligations under the Stanchem Agreement during the remaining
term thereof, and during up to four months after termination of
the Stanchem Agreement if Stanchem elects to require Purchaser to
continue packaging products as provided in Section 10.4(f)
thereof, and (b) any costs, including without limitation employee
termination and severance costs and benefits, incurred by the
Purchaser in connection with the termination of the Stanchem
Agreement. All amounts due from the Vendor to the Purchaser
under this Section 5.10 shall be paid promptly upon demand by the
Purchaser, which demand shall include reasonable supporting
documentation."
Amendments to Section 6.1. (a) The words "Time of
Closing" at the end of Section 6.1(1)(b) shall be deleted therefrom and
replaced with the words "Effective Time."
(b) Section 6.1(1)(d) is hereby amended hereafter to read in
its entirety as follows:
"(d) no order or judgment shall have been issued by any court,
Governmental Authority, regulatory body or agency which results
in an order or judgment enjoining, restricting or prohibiting the
sale and purchase of the Assets and the U.S. Assets contemplated
hereby;"
(b) Section 6.1(j)(ii) is hereby amended to add at the end
thereof the following:
"provided that the Purchaser and the US. Purchaser acknowledge
that the amendments made in connection with the consent to
assignment of the Spindrift Bead Technology License Agreement
dated September 22, 1989 are acceptable and that the Purchaser
shall not be entitled to any indemnification with respect to such
agreement."
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Amendment to Section 6.2. The words "Time of Closing" at
the end of Section 6.2(1)(b) shall be deleted therefrom and replaced with the
words "Effective Time."
Amendments to Section 7.3. (a) Sections 7.3(1) and
Section 7.3(2) are hereby amended to delete the words "Time of Closing"
appearing therein and to replace such words with the words "Effective Time".
(b) Section 7.3(1)(b) is hereby amended to delete the words
"Closing Date" appearing therein and to replace such words with the
words "Effective Time".
Amendment to Section 7.4. Each of Subsections (8) and (9)
of Section 7.4 is hereby amended: to delete therefrom all words after the words
"interest thereon" and to replace such words with the following:
"from the Effective Time to the date of payment at the rate of 8
1/2% per annum."
Amendment to Section 8.1.
(a) Clauses (i) and (ii) of Section 8.1(2)(a) are hereby
amended to read in their entirety as follows:
"(i) any facts, circumstances, events or occurrences in
existence as of or prior to the Effective Time, relating
to the Assets or the U.S. Assets or the operation of the
Business or the U.S. Business, which form the basis of a
violation of Environmental Laws in effect on or before the
Effective Time or which, if known to exist at the
Effective Time, would under Environmental Laws in effect
at the Effective Time, have required reporting to a
Governmental Authority, monitoring, investigation, clean-
up, removal, treatment or the conduct of an environmental
impact assessment or any other Dealing with Contaminants
in the soil or ground water;
(ii) liability for personal injury, death or property damage
arising out of an alleged Discharge of Contaminants from
Vendor's operation of the Business or the U.S. Business
prior to the Effective Time including Claims arising from
the maintenance of a public or private nuisance by
Vendor;"
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(b) Section 8.1(2)(d) is hereby amended by deleting, under the
column entitled "ENVIRONMENTAL CLAIMS" appearing therein the words
"Closing Date" and replacing such words with the words "Effective Time."
(c) Section 8.1(2)(h)(vi) is hereby amended by deleting the
words "Closing Date" and replacing such words with the words "Effective
Time".
(d) Section 8.1(2)(j)(vi) is hereby amended by deleting the
words "Closing Date" and replacing such words with the words "Effective
Time".
(e) A new Section 8.1(2)(l) is hereby added to Section 8.1(2)
which shall read in its entirety as follows:
(l) The Purchaser shall, after the Effective Time and
until expiration or termination of the Lease
Agreement, provide the services of certain
employees of the Business required to perform
remedial and demolition activities at the Cornwall
site to the Vendor on a sole and exclusive basis,
for so long a period as such employees remain
employees of the Purchaser after the Effective
Time, and until the Vendor notifies the Purchaser
that it no longer requires the services of such
employees, for the purpose of assisting the Vendor
in completing its planned remedial and demolition
activities at the Cornwall site. The Purchaser
shall not terminate the services of any of the
aforesaid employees until notified by the Vendor
that it no longer requires the services of the
employees or unless any such employee has engaged
in conduct, which in the reasonable judgment of
Purchaser, requires such employee's termination.
The Vendor may, at any time, provide such notice
with respect to one or more of the employees. The
aforesaid employees shall be employed by the
Purchaser on substantially the same terms and
conditions of employment as are in effect at the
Effective Time. All salaries and benefits paid by
the Purchaser in accordance with such terms and
conditions to the aforesaid employees shall be
promptly reimbursed by the Vendor. In addition to
the
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indemnities for severance costs and obligations in
Section 4.3(2)(ii), the Vendor shall indemnify and
save harmless the Purchaser from any Claims
suffered or incurred by the Purchaser arising from
the remedial and demolition services provided by
the aforesaid employees to the Vendor."
Amendment to Section 8.8. Section 8.8 shall be amended to
delete the words "simultaneous with or after closing" appearing at the end of
the initial sentence thereof, and to replace such words with the words "on or
after the Effective Date".
Amendment of Article 8. A new Section 8.12 is added to
Article 8 to read as follows:
"8.12 Environmental Permits
For the purposes of Environmental Permits only, the
Purchaser shall be the operator of the Assets as of the
Effective Time and hereby appoints the Vendor as its
mandatary to operate the Assets until the Closing Date.
The Vendor hereby covenants to use reasonable efforts to
comply in all material respects with Environmental Laws
and Environmental Permits in force during the period of
time between the Effective Time and the Closing Date.
In the event that the Closing does not occur and that one
or both parties rescind the Asset Purchase Agreement as
amended, the Vendor and the Purchaser shall use their
reasonable efforts to ensure that the Environmental
Permits are transferred back to the Vendor as soon as
possible.
For greater certainty, the risk of loss associated with
the operation of the Assets during the period of time
between the Effective Time and the Closing Date shall be
borne by the Purchaser."
Amendment to Section 8.7. The first sentence of Section
8.7 is amended hereafter to read in its entirety as follows:
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"No amendment to this Agreement will be valid or binding unless
set forth in writing and duly executed by all of the parties
hereto."
Amendment of Article 10. The first paragraph of Article
10 is hereby amended by adding thereto, after the words "the Vendor or the U.S.
Vendor" appearing therein, the following clause: "or any permitted assignee of
the Vendor or the U.S. Vendor pursuant to Section 8.8 hereof,".
Amendment to Article 11. The first paragraph of Article
11 is hereby amended by adding thereto, after the words "the Purchaser and the
U.S. Purchaser" appearing therein, the following clause: ",or any permitted
assignee of the Purchaser or the U.S. Purchaser pursuant to Section 8.8
hereof,".
Effect of Amendment. Except as amended and modified by
this Amendment, the Purchase Agreement shall be and continue in full force and
effect as originally written. The Purchase Agreement and this Amendment shall
be read, taken and construed as one and the same instrument. Upon the
effectiveness of this Amendment, each reference in the Purchase Agreement to
"this Agreement" shall mean and be a reference to the Purchase Agreement as
amended hereby.
Governing Law. This Amendment shall in all respects be
governed by and construed in accordance with the laws of the Province of Quebec
and the laws of Canada applicable therein.
Benefit and Burden. This Amendment shall inure to the
benefit of and be binding upon each of the Parties and their respective
successors and permitted assigns.
Counterparts. This Amendment may be executed by the
Parties in counterparts and by telecopy, each of which shall be deemed to
constitute an original and all of which together shall constitute one and the
same instrument.
Severability. If any term or provision of this Amendment
shall be found by a court of competent jurisdiction to be illegal, invalid, or
unenforceable to any extent, the remainder of this Amendment shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
Entire Agreement. This Amendment (a) constitutes the
entire contract between the Parties relative to the amendments to the Purchase
Agreement made hereby, (b) supersedes all prior agreements, consents and
understandings relating to such amendments and (c) may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the
Parties.
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Effectiveness. Upon the execution and delivery of this
Amendment by the Parties, this Amendment shall be and become a binding
agreement among the Parties.
IN WITNESS WHEREOF, the Parties have executed this Agreement as
of October 31, 1997.
PCI CHEMICALS CANADA INC.
Per:
--------------------------------
PCI CAROLINA, INC.
Per:
--------------------------------
PIONEER COMPANIES, INC.
Per:
--------------------------------
ICI CANADA INC.
Per:
------------------------------
ICI AMERICAS INC.
Per:
------------------------------
IMPERIAL CHEMICAL INDUSTRIES PLC
Per:
------------------------------
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