FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (hereinafter
referred to as the "Amendment") is made and entered into as of this ___ day of
December, 2002, between and among, on the one hand, the lenders identified on
the signature pages hereof (such lenders, together with their respective
successors and assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders"), FOOTHILL CAPITAL CORPORATION, a
California corporation, as the arranger and administrative agent for the Lenders
("Agent"), and, on the other hand, PCI CHEMICALS CANADA COMPANY, a Nova Scotia
unlimited liability company, and PIONEER AMERICAS LLC, a Delaware limited
liability company (hereinafter each individually is referred to as a "Borrower"
and collectively as the "Borrowers").
RECITALS
A. Agent, the Lenders and the Borrowers have entered into that certain
Loan and Security Agreement, dated as of December 31, 2001 (as amended by that
certain First Amendment to Loan and Security Agreement dated as of April 15,
2002, that certain Second Amendment to Loan and Security Agreement dated as of
June 3, 2002 but effective as of May 31, 2002 and that certain Third Amendment
to Loan and Security Agreement dated as of July 29, 2002, herein the
"Agreement").
B. Agent, the Lenders and the Borrowers desire to amend the Agreement
as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meaning as in the
Agreement, as amended hereby.
ARTICLE II
AMENDMENTS
Section 2.01. Amendment to Section 6.3(c). Section 6.3(c) of the
Agreement is hereby amended and restated in its entirety to read as follows:
(c) as soon as available, but in any event within 15 days
after the start of each of Borrower's fiscal quarters, copies of
Borrowers' Projections, in form and substance (including as to scope
and underlying assumptions) satisfactory to Agent, in its sole
discretion, for the then current quarter, month by month, and for the
then remaining portion of the fiscal year, quarter by quarter,
certified by the chief financial officer of the Parent as being such
officer's good faith best estimate of the financial performance of the
Borrowers during the period covered thereby,
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Conditions. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent, unless
specifically waived by Agent:
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 1
(a) Agent shall have received this Amendment, duly executed by
Borrowers, together with the Consent and Ratification (the
"Ratification") hereto, duly executed by the Guarantors;
(b) The representations and warranties contained herein, in
the Agreement, as amended hereby, and/or in each other Loan Document
shall be true and correct as of the date hereof, as if made on the date
hereof;
(c) No Event of Default shall have occurred and be continuing
and no Default shall exist, unless such Event of Default or Default has
been specifically waived in writing by Agent; and
(d) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto, shall be
satisfactory to Agent.
ARTICLE IV
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
Section 4.01. Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Borrowers and the Agent agree that the Agreement, as amended hereby, and
the other Loan Documents shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms.
Section 4.02. Representations and Warranties. Borrowers hereby
represent and warrant to Agent as follows:
(a) the execution, delivery and performance of this Amendment
and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate
action on the part of Borrowers and do not and will not conflict with
or violate any provision of any Applicable Law, the Articles of
Incorporation/Organization or Bylaws/Operating Agreement of Borrower or
any agreement, document, judgment, license, order or permit applicable
to or binding upon any of the Borrowers or their respective Property.
No consent, approval, authorization or order of and no notice to or
filing with, any court or governmental authority or third person is
required in connection with the execution, delivery or performance of
this Amendment or to consummate the transactions contemplated hereby.;
(b) the representations and warranties contained in the
Agreement, as amended hereby, and any other Loan Document are true and
correct on and as of the date hereof as though made on and as of the
date hereof, except to the extent such representations and warranties
relate to an earlier date;
(c) Borrower is in full compliance with all covenants and
agreements contained in the Agreement, as amended hereby; and the other
Loan Documents; and
(d) Borrower has not amended its Articles of
Incorporation/Organization or Bylaws/Operating Agreement or other
organizational documents since the date of the execution of the
Agreement.
(e) No Borrower or Guarantor is in default in any of its
indebtedness, liabilities or obligations under any of the Supplier
Credit Agreements or under either of the Notes to
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 2
Professionals and there are, to Borrowers' knowledge, no other defaults
or events of default under any of the Supplier Credit Agreements or
Notes to Professionals.
ARTICLE V
MISCELLANEOUS
Section 5.01. Survival of Representations and Warranties. All
representations and warranties made in the Agreement or any other document or
documents relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment, shall survive the execution and
delivery of this Amendment and the other Loan Documents, and no investigation by
Agent or any closing shall affect the representations and warranties or the
right of Agent to rely upon them.
Section 5.02. Reference to Agreement. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement, as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement, as amended hereby.
Section 5.03. Expenses of Agent. As provided in the Agreement, each
Borrower agrees to pay on demand all reasonable costs and expenses incurred by
Agent in connection with the preparation, negotiation and execution of this
Amendment and the other Loan Documents executed pursuant hereto and any and all
amendments, modifications, and supplements hereto, including, without
limitation, the reasonable costs and fees of Agent's legal counsel, and all
reasonable costs and expenses incurred by Agent in connection with the
enforcement or preservation of any rights under the Agreement, as amended
hereby, or any other Loan Document, including, without limitation, the
reasonable costs and fees of Agent's legal counsel.
Section 5.04. RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO
DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR
NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF
ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES
OF ANY KIND OR NATURE FROM THE AGENT OR THE LENDERS. EACH BORROWER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES THE AGENT AND THE
LENDERS, THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL
POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES,
AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE AGAINST THE AGENT AND THE
LENDERS, THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY,
AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT,
VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY OF THE
OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING,
TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST
LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS
AMENDMENT.
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 3
Section 5.05. Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 5.06. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS EXECUTED PURSUANT HERTO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN DALLAS, TEXAS, AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 5.07. Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Agent, the Lenders and the Borrowers and their
respective successors and assigns, except the Borrowers may not assign or
transfer any of their rights or obligations hereunder without the prior written
consent of Agent.
Section 5.08. Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.
Section 5.09. Effect of Waiver. No consent or waiver, express or
implied, by Agent to or for any breach of or deviation from any covenant or
condition of the Agreement shall be deemed a consent or waiver to or of any
other breach of the same or any other covenant, condition or duty.
Section 5.10. Headings. The headings, captions, and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 5.11. FINAL AGREEMENT. THE AGREEMENT, AS AMENDED HEREBY AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATED
TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 4
IN WITNESS WHEREOF, the Borrowers, Agent and the Lenders have caused
this Amendment to be executed on the date first written above by their duly
authorized officers.
PCI CHEMICALS CANADA COMPANY
a Nova Scotia unlimited liability company
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
PIONEER AMERICAS LLC
a Delaware limited liability company
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a Lender
By: /s/ Xxxx Xxxxxx
----------------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 5
CONSENT AND RATIFICATION
The undersigned, Pioneer Companies, Inc., Pioneer (East), Inc., Pioneer
Licensing, Inc., Imperial West Chemical Co., KNA California, Inc., Pioneer Water
Technologies, Inc., and KWT, Inc. (each a "Guarantor" and collectively the
"Guarantors") have executed that certain continuing general guaranty dated as of
December 31, 2001 (the "Guaranty"), in favor of FOOTHILL CAPITAL CORPORATION, a
California corporation, as the arranger and administrative agent for the Lenders
(as defined in the Guaranty). The Guarantors hereby consent and agree to the
terms of the Fourth Amendment to Loan and Security Agreement dated as of
December ___, 2002 (the "Amendment"), executed by PCI CHEMICALS CANADA COMPANY,
a Nova Scotia unlimited liability company, and PIONEER AMERICAS LLC, a Delaware
limited liability company (hereinafter each individually is referred to as a
"Borrower" and collectively as the "Borrowers"), the Lenders and Agent, a copy
of which is attached hereto, and the undersigned agree that the Guaranty shall
remain in full force and effect and shall continue to be the legal, valid and
binding obligation of the Guarantors in enforceable against the Guarantors in
accordance with its terms. Furthermore, each Guarantor hereby agrees and
acknowledges that (a) the Guaranty is a "Loan Document" as such term is defined
in the Amendment and as such term is defined in the Agreement, (b) the Guaranty
is not subject to any claims, defenses or offsets, (c) nothing contained in this
Amendment or any other Loan Document shall adversely affect any right or remedy
of Agent under the Guaranty, (d) the execution and delivery of the Amendment
shall in no way reduce, impair or discharge any obligations of the undersigned
as guarantors pursuant to the Guaranty and shall not constitute a waiver by
Agent of any of Agent's rights against the undersigned, (e) by virtue hereof and
by virtue of the Guaranty, each Guarantor hereby guarantees to Agent the prompt
and full payment and full and faithful performance by the Borrowers of the
entirety of the Obligations (as defined in the Agreement) on the terms and
conditions set forth in the Agreement as amended by the Amendment and any time
further modified or amended, (f) the Guarantors' consent is not required to the
effectiveness of the Amendment, and (g) no consent by the Guarantors is required
for the effectiveness of any future amendment, modification, forbearance or
other action with respect to the Agreement or any present or future Loan
Document.
Pioneer Companies, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
Pioneer (East), Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 6
Pioneer Licensing, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
Imperial West Chemical Co.
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
KNA California, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
Pioneer Water Technologies, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
KWT, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 7
