EXHIBIT 10.9
LIABILITY AND INDEMNITY AGREEMENT
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AGREEMENT (for convenience called "Liability and Indemnity Agreement")
made as of the 28/th/ day of December, 1981, by and among Rubicon Inc.
("Rubicon"), a Louisiana corporation having its principal office at Geismar,
Louisiana, Rubicon Chemicals Inc. ("RCI"), a Louisiana corporation having its
principal office at Geismar, Louisiana, Imperial Chemical Industries PLC ("ICI
PLC"), an English company having its registered office at Imperial Xxxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, ICI American Holdings Inc. ("ICI"), a
Delaware corporation and a wholly-owned subsidiary of ICI PLC, having its
principal office at Xxx Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, ICI Americas
Inc. ("ICI-AM"), a Delaware corporation and a wholly-owned subsidiary of ICI,
having its principal office at Xxx Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
and UNIROYAL, Inc. ("Uniroyal"), a New Jersey corporation having its principal
xxxxxx xx Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000;
WHEREAS:
(1) Uniroyal (formerly named Untied States Rubber Company) and ICI PLC
caused RCI to be formed in 1963 and thereafter, directly or indirectly, each
owned 50% of RCI's capital stock until Uniroyal sold its 50% to ICI.
(2) Pursuant to Agreements entered into in 1963 and 1964 RCI built and
operated plants to manufacture toluene diisocyanate ("TDI"), diphenylamine
("DPA") and aniline.
(3) RCI, ICI PLC and Uniroyal are parties to a Liability and Indemnity
Agreement, dated May 7, 1964 ("the 1964 Agreement").
(4) Pursuant to Agreements entered into in 1972, RCI built and operated a
plant to manufacture diphenylmethane diisocyanate ("MDI").
(5) RCI, ICI PLC and Uniroyal are parties to a Liability and Indemnity
Agreement, dated April 1, 1972 ("the 1972 Agreement").
(6) Pursuant to agreements entered into as of April 1, 1977, RCI
constructed expansions of its facilities for the manufacture of aniline and DPA,
its waste
disposal capacity and certain of its Off-sites, and, upon Completion thereof,
operated certain parts of its facilities to perform conversion services for ICI-
AM and Uniroyal in accordance with an agreement, dated as of April 1, 1977
("Original Operating Agreement") among RCI, ICI-AM and Uniroyal.
(7) RCI, ICI PLC, ICI-AM and Uniroyal are the parties to a Liability and
Indemnity Agreement, dated April 1, 1977 ("the 1977 Agreement").
(8) In December 1981 RCI caused the formation of Rubicon and entered into a
so-called Exchange Agreement, dated as of December 28, 1981, with Rubicon
pursuant to which RCI transferred to Rubicon certain of its assets and
liabilities and Rubicon issued to RCI 400,000 shares of its Class A and 400,000
shares of its Class B common stock and assumed certain liabilities of RCI.
(9) On December 31, 1981 RCI distributed as dividends its 400,000 Class A
shares of Rubicon's common stock to Uniroyal and its 400,000 Class B shares of
Rubicon's common stock to ICI, which were then the respective owners of all of
RCI's Class A and Class B common stock.
(10) Pursuant to an agreement, dated as of December 28, 1981 ("Operating
Agreement") among ICI-AM, Uniroyal, RCI and Rubicon, which amends and restates
the Original Operating Agreement, Rubicon will operate certain parts of its
facilities to perform conversion services for ICI-AM and Uniroyal, will operate
certain facilities belonging to RCI for RCI and will operate certain parts of
its facilities to perform other services for ICI-AM, Uniroyal and RCI.
(11) In contemplation of such arrangements, the parties desire to provide
certain allocations of liability among them which, in some instances, may not be
consistent with findings or judgments rendered in litigation but which are
consistent with what the parties consider to be their respective contractual
rights and obligations.
(12) In contemplation of such arrangements, the parties desire to supersede
the 1977 Agreement and incorporate into this Agreement the allocation of
liability among the parties on the terms and conditions hereinafter set forth,
except that such supersession will apply solely and exclusively to liabilities
which are based upon events occurring after the date of this Agreement.
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NOW, THEREFORE, for and in consideration of the covenants herein contained,
the parties hereto, intending to be legally bound hereby, agree as follows.
1. Definitions
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1.1 All terms which are defined in the Operating Agreement and any Exhibit
thereto are used in this Agreement as so defined.
1.2 The words "Liability" and "Liabilities", when capitalized, shall mean
those liabilities described in paragraphs 3.1, 3.2 and 3.3.
1.3 The words "Other Parties", when capitalized, shall mean Uniroyal, ICI
PLC, ICI, ICI-AM and RCI.
2. Supersession of Prior Agreements
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2.1 The provisions of this Agreement will apply solely to Liabilities
which are based upon events occurring after December 28, 1981. After that date,
the provisions of this Agreement shall supersede the 1977 Agreement; provided,
however, that such supersession shall not apply to any Liability which is based
upon events occurring prior to such date; and the 1964 Agreement, the 1972
Agreement and the 1977 Agreement, as appropriate, shall continue in effect as to
any such Liability.
3. Allocation of Liability
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3.1 Except as provided in paragraph 3.3, Rubicon shall defend each of the
Other Parties at Rubicon's expense, using its best efforts, against all claims,
suits, actions or proceedings of any kind, in which it is alleged that any or
all of the Other Parties directly or indirectly controlled, owned, leased,
designed, constructed, maintained, repaired, used or operated any of the
facilities operated by Rubicon pursuant to the Operating Agreement or that any
such party sold, furnished or supplied materials, chemicals, processes or
machinery used at or by those facilities, or that any such party directly or
indirectly produced, stored, handled or used any of the products at such
facilities which were produced by those facilities or any of the materials or
chemicals used in their production, or that any such party directly or
indirectly violated any statute, ordinance, regulation, provision or rule of the
federal, state, county, parish or municipal government in connection therewith.
Rubicon shall defend notwithstanding the identity, status or standing of the
person or entity
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asserting the claim, the theory of liability or the type of relief demanded,
including penalties and fines, or the negligence or fault of any or all of the
Other Parties, and Rubicon shall indemnify each of the Other Parties for any
expense incurred (including investigation costs and attorneys' fees) and any
payment made by them, or any of them, or on their behalf in settlement or in
satisfaction of any judgment, award, decree, penalty or fine (insofar as
permitted by law) notwithstanding the negligence of any or all of the Other
Parties. To the extent that money damages are not involved, such as in an
action for injunctive relief, Rubicon shall defend each of the Other Parties and
indemnify them to the extent that it can reasonably do so.
3.2 Rubicon shall defend each of the Other Parties at Rubicon's expense,
using its best efforts, from all claims, suits, actions, or proceedings of any
kind against them or any of them which involve personal injuries, illness or
death to Rubicon employees occurring in the course of or arising out of their
employment, notwithstanding the identity, status or standing of the claimant,
petitioner or plaintiff, the theory of liability (including, but not limited to,
negligence, implied and express warranty, strict tort liability, workers'
compensation or OSHA regulation or rule), or the type of relief demanded
(including penalties or fines) or the negligence or fault of any or all of the
Other Parties, and Rubicon shall indemnify each of the Other Parties for any
expense incurred (including investigation costs and attorneys' fees) and any
payment made by them, or any of them, or on their behalf in settlement or in
satisfaction of any judgment, award, decree, penalty or fine (insofar as
permitted by law) notwithstanding the negligence of any or all of the Other
Parties.
3.3 Each of Uniroyal, ICI-AM and RCI, severally and not in solido, shall,
at its expense, using its best efforts, defend Rubicon from all claims, suits,
actions or proceedings of any kind against Rubicon, for personal injury or
death, property damage or economic loss to anyone, caused by or resulting from
products produced for it by Rubicon or caused or resulting from reliance upon a
representation or warranty made at any time with respect thereto, but only if
such injury, death, damage or loss occurs away from premises owned by or rented
to Rubicon and after possession of such product has been relinquished by
Rubicon, notwithstanding the identity, status or standing of the claimant,
petitioner or plaintiff, the theory of liability (tort, contract or other) or
the negligence or fault of Rubicon, and each of Uniroyal, ICI-AM and RCI,
severally and not in solido, shall indemnify Rubicon for any expense incurred
(including investigation costs and attorneys' fees) and any payment made by it
or on its behalf in settlement or in satisfaction of any judgment, decree or
award notwithstanding the negligence of Rubicon.
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3.4 If and to the extent that Rubicon fails for any reason effectively to
defend and indemnify any or all of the Other Parties from any Liability referred
to in paragraphs 3.1 and 3.2 and the Other Parties, or any of them, incur such
Liability, then
(i) if such Liability is caused by or results from the Aniline
Facilities, benzene or any product produced by the Aniline Facilities, then
ICI and ICI-AM, on the one hand, and Uniroyal, on the other hand, will, as
between themselves, share the loss, cost or damage (including costs of
defense) resulting form the Liability in the proportions of the percentage
entitlements of Uniroyal and ICI-AM, respectively, to aniline;
(ii) if such Liability is caused by or results from the DPA plant or
DPA, Uniroyal will bear all of the loss, cost or damage (including costs of
defense) resulting from the Liability;
(iii) if such Liability is caused by or derived from the TDI plant,
the MDI plant, the TDA/DNT plant, TDI, MDI, TDA or DNT, RCI and ICI will
bear all of the loss, cost or damage (including costs of defense) resulting
from the Liability; and
(iv) is such Liability is caused by or results from other than as
specified in (i), (ii) or (iii), ICI, ICI-AM and RCI, on the one hand, and
Uniroyal, on the other hand, will, as between themselves, share the loss,
cost or damage (including costs of defense) resulting from the Liability in
the same proportions as the allocations Rubicon would have made to ICI-AM
and RCI, on the one hand, and Uniroyal, on the other hand, in accordance
with the provisions of the Operating Agreement, of the costs which would
have been incurred by Rubicon as a result of such loss, cost or damage
(including costs of defense) if Rubicon had defended and indemnified the
Other Parties as provided in paragraphs 3.1 and 3.2.
4. Insurance
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4.1 Rubicon shall maintain the following insurances in force, in forms
agreeable to both Uniroyal and ICI.
a. Comprehensive general liability insurance with a limit of
$50,000,000 or such other limit as may be agreed upon between Uniroyal and
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ICI from time to time. This insurance shall name the Other Parties as
insureds but need not name such Other Parties with respect to Liabilities
referred to in paragraph 3.3. The policy shall contain a severability of
interests clause to cover each insured as through a separate policy had
been issued to each and shall not exclude a Liability assumed by any
insured under this Agreement.
b. Workers' compensation and employers liability insurance.
c. Environmental impairment liability insurance, with limits as agreed
upon by Uniroyal and ICI to the extent that such coverage is available on
terms acceptable to Uniroyal and ICI.
Rubicon shall annually review with Uniroyal and ICI the amounts and kinds
of the above insurances to be carried in the ensuing period, and shall obtain
such coverage as directed by Uniroyal and ICI.
5. Release of Certain Liabilities
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5.1 ICI-AM and RCI, severally and in solido, Uniroyal and Rubicon hereby
release each other, without limit as to amount, from all liability in respect of
all casualty losses (whether caused by negligence or not), including loss of use
arising therefrom, which could have been covered by policies of Fire and
Extended Coverage Insurance and Boiler and Machinery Insurance.
5.2 The provisions of this Section 5 are in addition to, and not a
limitation of, the provisions of Section 3.
6. General Provisions
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6.1 This Agreement shall continue in effect for as long as the Operating
Agreement continues in effect; provided, however, that the rights and
obligations set forth in this Agreement shall survive its termination as to any
Liability which accrued prior thereto.
6.2 This Agreement shall be binding upon and shall enure to the benefit of
the Parties, their successors and permitted assigns. This Agreement may not be
assigned by Rubicon. It shall be assigned by ICI PLC, ICI, ICI-AM and RCI or
Uniroyal in and only in conjunction with an assignment of the Operating
Agreement
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by ICI-AM and RCI or Uniroyal, as provided therein; provided, however, that the
rights and obligations of the assignor set forth in this Agreement shall survive
its assignment as to any Liability which accrued prior thereto.
6.3 Failure of any party to insist, in any one or more instances, upon a
strict performance of any of the terms of this Agreement or the waiver by any
party of any term or right or any default of any other party hereunder will not
be deemed or construed as a waiver or a relinquishment for the future of any
such term, right or default.
6.4 All questions relating to the validity, interpretation or performance
of this Agreement shall be determined in accordance with the law of the State of
Louisiana.
6.5 This Agreement may be amended from time to time only by written
instrument executed on behalf of Rubicon by its President when specifically
authorized by its Board of Directors and duly executed by each of the Other
Parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day,
month and year first above written.
Rubicon Inc.
By: /s/ [Authorized Officer]
Rubicon Chemicals Inc.
By: /s/ [Authorized Officer]
Imperial Chemicals Industries PLC
By: /s/ [Authorized Officer]
ICI American Holdings Inc.
By: /s/ [Authorized Officer]
ICI Americas Inc.
By: /s/ [Authorized Officer]
UNIROYAL, Inc.
By: /s/ [Authorized Officer]
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