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EXHIBIT 10
AMENDMENT NO. 1 TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
March 29, 0000
Xxxxxxx Xxxxxxxx, Inc., formerly known as
Pioneer Americas Acquisition Corp.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Chief Financial officer and Corporate Secretary
and
PCI Chemicals Canada Inc./PCI Chimie Canada Inc. ("PCI Canada")
000 Xxxx-Xxxxxxxx Xxxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
Ladies and Gentlemen:
Reference is made to the Amended and Restated Loan and Security
Agreement dated as of May 29, 1998 among Pioneer Americas, Inc., formerly known
as Pioneer Americas Acquisition Corp. ("PAI"), PCI Chemicals Canada Inc./PCI
Chimie Canada Inc. ("PCI Canada"), the lenders from time to time party thereto
(the "Lenders"), Bank of America National Trust and Savings Association,
formerly known as Bank of America Illinois, as Administrative Agent, as U.S.
Funding Agent and as a Lender and Bank America Xxxxxxxxx Xxxxxxxx, as Arranger
(the "Loan Agreement"). Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such temps in the Loan Agreement.
1. Background. On or about August 20, 1998, Pioneer Americas, Inc.
merged with and into Pioneer Americas Acquisition Corp., with Pioneer Americas
Acquisition Corp. being the surviving entity and changing its name to "Pioneer
Americas, Inc." (the "Merger"). As a consequence of the Merger, "Pioneer
Americas, Inc." became the name of one of the Borrowers under the Loan
Agreement. Borrowers have requested that Agents and Lenders agree to amend the
Loan Agreement to reflect the foregoing transactions. In addition, Borrowers
have requested that Agents and Lenders agree to amend the Loan Agreement in
certain other respects, all as set forth herein.
Agents and Lenders have agreed to the foregoing, on the terms and
conditions described herein.
2. Amendments. The Loan Agreement is hereby amended as follows:
(a) To the extent required by the context, references in the Loan
Agreement to each of "PAAC" and "PAI" are hereby deemed to be references to
"Pioneer Americas, Inc., formerly known as Pioneer Americas Acquisition Corp."
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(b) All references to PAI as a "Designated Subsidiary" are hereby
deleted from the Loan Agreement.
(c) BankAmerica Xxxxxxxxx Xxxxxxxx has been replaced as Arranger by
NationsBanc Xxxxxxxxxx Securities. Consequently, all references in the Loan
Agreement to "Bank America Xxxxxxxxx Xxxxxxxx" as the "Arranger" are hereby
deleted and replaced with references to "NationsBanc Xxxxxxxxxx Securities".
(d) The definition of the term "Borrowing Base" contained in Section
1.l of the Loan Agreement is hereby amended and restated in its entirety, as
follows:
"'Borrowing Base" means an amount equal to 85% of the U.S. Dollar
Equivalent of the net amount (after deduction of such reserves and allowances as
Administrative Agent deems proper and necessary in its reasonable business
judgment) of Eligible Account Receivable of each Borrower and each Designated
Subsidiary.'"
(e) The definition of the term "Kemwater" contained in Section 1.1 of
the Loan Agreement is hereby amended and restated in its entirety, as follows:
"'Kemwater means KWT, Inc., a Delaware corporation and a Subsidiary of
Parent.'"
(f) The definition of the term "Loan Limit" contained in Section 1.1 of
the Loan Agreement is hereby amended and restated in its entirety, as follows:
"'Loan Limit' at any time means with respect to (a) PAAC, an amount
equal to US$27,000,000 (the "PAAC Maximum") and (b) PCI Canada, an amount equal
to the U.S. Dollar Equivalent of $23,000,000 (the "PCI Canada Maximum"), in each
case, minus any permanent reductions in such amounts made pursuant to Section
2.1.2, provided, that the PAAC Maximum and the PCI Canada Maximum may be
reallocated by Borrowers two times during each 12 month period hereafter, by
means of a written notice executed by Borrowers and received by Administrative
Agent at least thirty (30) days prior to the effective date of such
reallocation, so long as (i) the aggregate amount of the PAAC Maximum and the
PCI Maximum does not at any time exceed the U.S. Dollar Equivalent of
$50,000,000 minus any permanent reductions in such amount made pursuant to
Section 2.1.2, (ii) the PAAC Maximum is not at any time less than US$25,000,000
or greater than the sum of the Maximum Loan Amounts of the U.S. Lenders, (iii)
the PCI Canada Maximum is not at any time greater than the U.S. Dollar
Equivalent of the sum of the Maximum Loan Amounts of the Canadian Lenders and
(iv) at the effective date of each reallocation, Borrowers deliver to
Administrative Agent such amended and restated Notes as Administrative Agent
shall reasonably request in order to evidence the reallocated Loan Limits."
(g) The definition of the term "Revolving Credit Amount" contained in
Section 1.1 of the Loan Agreement is hereby amended and restated in its
entirety, as follows:
"'Revolving Credit Amount' means an amount equal to US$50,000,000, as
such amount may be reduced from time to time pursuant to this Agreement."
(h) A new definition of the term "TCP" is hereby inserted into Section
1.1 of the Loan Agreement, in appropriate alphabetical order, as follows:
"'TCP' means T.C. Products, Inc., a Washington corporation and a
Subsidiary of TCH.
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(i) Section 4.29 of the Loan Agreement is hereby amended and restated
in its entirety, as follows:
"4.29 Holding Companies: Licensing Companies.
As of March 29, 1999, each of Parent, PAI, BMPC, TCH and Imperial is a
holding company without material assets, operations or business, other than the
ownership by (a) Parent of the common stock of PAI and Pioneer Water
Technologies, Inc., (b) PAI of the common stock of its Subsidiaries, (c) TCH of
the common stock of TCP and (d) Imperial of the common stock of Kemwater North
America Company. As of March 29, 1999, neither of East or Pioneer Licensing,
Inc. has any material assets, operations or business, other than the ownership
of certain intellectual property held for license to the other Companies in the
ordinary course of business. As of March 29, 1999, none of Parent, PAI, BMPC,
East, TCH, Imperial or Pioneer Licensing, Inc. has any Indebtedness or other
obligations other than Indebtedness of each of them in respect of the Seller
Notes, the Senior Secured Loans, the Term Loans and this Agreement."
(j) Section 5.32 of the Loan Agreement is hereby amended and restated
in its entirety, as follows:
"5.32 Interest Coverage Ratio.
Not permit the Interest Coverage Ratio (a) measured on the last day of
any calendar month for the preceding twelve (12) month period or for the period
from the beginning of the then current Fiscal Year through such measurement
date, whichever yields the higher ratio, (a) to be less than 1.1:1.0 for more
than one period of consecutive measurement dates, such period not to exceed
fifteen (15) months, OR (b) within such period, to be less than 0.7:1.0 on any
measurement date (except as provided in clause (c) below) OR (c) to be less than
0.6:1.0 on any measurement date between October 1, 1999 and March 31, 2000,
inclusive. For purposes of this Section 5.32. interest expense shall include,
without limitation, implicit interest expense on Capitalized Leases."
(k) Section 6.1(n)(iii) of the Loan Agreement is hereby amended to
delete therefrom the reference to "PAAC" and replace it with a reference to
"Parent".
(l) The Maximum Loan Amounts of the Lenders set forth in the signature
pages to the Loan Agreement are hereby amended and restated in their entirety,
as follows:
US Lender Maximum Loan Amount
--------- -------------------
Bank of America National Trust and US $ 3,858,000
Savings Association
Transamerica Business Credit Corporation US $11,571,000
Sanwa Business Credit Corporation US $11,571,000
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Total US $27,000,000
Canadian Lender Maximum Loan Amount
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Bank of America Canada US Dollar Equivalent of $15,333,000
Credit Lyonnais Canada US Dollar Equivalent of $ 7,667,000
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Total US Dollar Equivalent of $23,000,000
(m) This Amendment No. 1 to Amended and Restated Loan and Security
Agreement (the
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"Amendment") shall have the effect of amending the Loan Agreement and the
Related Agreements as appropriate to express the agreements contained herein. In
all other respects, the Loan Agreement and the Related Agreements shall remain
in full force and effect in accordance with their respective terms.
3. Conditions to Effectiveness. This Amendment shall be effective upon
delivery of this Amendment to Administrative Agent, executed by each Agent and
each Lender and accepted by each Borrower and each other Obligor, together with
the following, all in form and substance satisfactory to Administrative Agent:
(a) A new Note payable to each Lender and executed by the applicable
Borrower, reflecting its revised Maximum Loan Amount;
(b) A certificate executed by each Borrower to the effect that no Event
of Default or Unmatured Event of Default has occurred and is continuing and that
all representations and warranties contained in Section 4 of the Loan Agreement
remain true and correct in all material respects as through made on the date
thereof, except for those representations and warranties which were expressly
made as of a specific date; and
(c) a $125,000 amendment fee paid by Borrowers to Administrative Agent,
for distribution to the Lenders in accordance with their respective Pro Rata
Shares.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, formerly
known as BANK OF AMERICA ILLINOIS, as
Administrative Agent and U.S. Funding Agent
By:
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Its:
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BANK OF AMERICA CANADA, as Canadian
Funding Agent
By:
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Its:
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BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, formerly
known as BANK OF AMERICA ILLINOIS, as
a U.S. Lender
By:
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Its:
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TRANSAMERIA BUSINESS CREDIT
CORPORATION, as a U.S. Lender
By:
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Its:
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FLEET BUSINESS CREDIT CORPORATION,
formerly known as SANWA BUSINESS
CREDIT CORPORATION, as a U.S. Lender
By:
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Its:
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BANK OF AMERICA CANADA,
as a Canadian Lender
By:
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Its:
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By:
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Its:
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Acknowledged and agreed to this
____ day of March, 0000
XXXXXXX XXXXXXX, INC.,
formerly known as PIONEER
AMERICAS ACQUISITION CORP.
By:
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Its:
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PCI CHEMICALS CANADA INC./
PCI CHIMIE CANADA INC.
By:
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Its:
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Acknowledgement and Acceptance of Subsidiary Guarantors
Each of the undersigned is a party to the Master Corporate Guaranty
dated as of May 29, 1998 in favor of Bank of America National Trust and Savings
Association, formerly known as Bank of America Illinois, as Administrative Agent
for the benefit of Agents and lenders (the "Guaranty"), pursuant to which each
of the undersigned has guaranteed the Liabilities of each Borrower under the
Loan Agreement and the Related Agreements. Each of the undersigned hereby
acknowledges receipt of the foregoing Amendment No. 1 to Amended and Restated
Loan And Security Agreement, accepts and agrees to be bound by the terms
thereof, ratifies and confirms all of its obligations under the Guaranty, and
agrees that the Guaranty shall continue in full force and effect as to it,
notwithstanding such amendment.
Acknowledged and Agreed to
this ____ day of March, 1999.
PIONEER CHLOR ALKALI COMPANY, INC.
IMPERIAL WEST CHEMICAL CO.
ALL-PURE CHEMICAL CO.
BLACK MOUNTAIN POWER COMPANY
PCI CAROLINA, INC.
By:
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of each company listed above
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Acknowledgement and Acceptance of Subsidiary Guarantors
Each of the undersigned is a party to the Master Corporate Guaranty
dated as of May 29, 1998 in favor of Bank of America National Trust and Savings
Association, formerly known as Bank of America Illinois, as Administrative Agent
for the benefit of Agents and lenders (the "Guaranty"), pursuant to which each
of the undersigned has guaranteed the Liabilities of each Borrower under the
Loan Agreement and the Related Agreements. Each of the undersigned hereby
acknowledges receipt of the foregoing Amendment No. 1 to Amended and Restated
Loan And Security Agreement, accepts and agrees to be bound by the terms
thereof, ratifies and confirms all of its obligations under the Guaranty, and
agrees that the Guaranty shall continue in full force and effect as to it,
notwithstanding such amendment.
Acknowledged and Agreed to
this ____ day of March, 1999.
PIONEER AMERICAS, INC. formerly known
as PIONEER AMERICAS ACQUISITION CORP.
By:
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of each company listed above
PCI CHEMICALS CANADA INC./
PCI CHIMIE CANADA INC.
By:
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Its:
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