EXHIBIT 4.4
EXECUTION COPY
TRANCHE A CREDIT FACILITY
U.S. $4,578,126
TERM LOAN AGREEMENT,
dated as of December 31, 2001
among
PIONEER AMERICAS LLC,
as the Borrower,
THE GUARANTORS NAMED HEREIN,
as Guarantors
THE LENDERS FROM TIME TO TIME
PARTIES HERETO,
as the Lenders
and
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as the Administrative Agent for the Lenders
TABLE OF CONTENTS
SECTION PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.............................................................. 2
SECTION 1.1. Defined Terms...................................................................... 2
SECTION 1.2. Use of Defined Terms............................................................... 32
SECTION 1.3. Cross-References................................................................... 32
SECTION 1.4. Accounting and Financial Determinations............................................ 32
SECTION 1.5. Use of UCC Terms................................................................... 32
SECTION 1.6. Officers' Certificates and Opinions................................................ 32
ARTICLE II NEW DEBT, PROCEDURES AND NOTES............................................................... 33
SECTION 2.1. Old Debt for New Debt.............................................................. 33
SECTION 2.2. Lenders Not Permitted or Required to Make Loans.................................... 33
SECTION 2.3. Term Notes......................................................................... 33
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES.................................................. 34
SECTION 3.1. Repayments and Prepayments; Application............................................ 34
SECTION 3.1.1 Repayments and Prepayments................................................... 34
SECTION 3.1.2 Application.................................................................. 35
SECTION 3.2. Interest Provisions................................................................ 36
SECTION 3.2.1 Rates ....................................................................... 36
SECTION 3.2.2 Post-Maturity Rates.......................................................... 36
SECTION 3.2.3 Payment Dates................................................................ 36
SECTION 3.3. Fees .............................................................................. 36
SECTION 3.3.1 Administrative Agent Fee..................................................... 36
ARTICLE IV CERTAIN OTHER PROVISIONS..................................................................... 37
SECTION 4.1. Taxes ............................................................................. 37
SECTION 4.2. Payments, Computations, etc........................................................ 39
SECTION 4.3. Sharing of Payments................................................................ 39
SECTION 4.4. Setoff............................................................................. 40
ARTICLE V CONDITIONS TO EFFECTIVENESS OF AGREEMENT...................................................... 40
SECTION 5.1. Resolutions etc.................................................................... 40
SECTION 5.1.1 Secretary of States' Certificates............................................ 41
SECTION 5.2. Loan Documents..................................................................... 41
SECTION 5.3. Delivery of Term Note.............................................................. 41
SECTION 5.4. Mortgages of Real Property Situated in the United States........................... 41
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SECTION 5.5. Mortgages of Real or Immovable Property Situated in Canada......................... 42
SECTION 5.6. Security Documents................................................................. 43
SECTION 5.7. Transaction Documents.............................................................. 44
SECTION 5.8. Canadian Corporate Reorganization.................................................. 44
SECTION 5.9. Confirmation Orders................................................................ 44
SECTION 5.10. Plan of Reorganization............................................................. 44
SECTION 5.11. Conditions Precedent to the Effectiveness of the Plan of Reorganization, etc....... 45
SECTION 5.12. Implementation of Plan of Reorganization........................................... 45
SECTION 5.13. [Intentionally Omitted.]........................................................... 45
SECTION 5.14. [Intentionally Omitted.]........................................................... 45
SECTION 5.15. Litigation......................................................................... 45
SECTION 5.16. Consents and Approvals, etc........................................................ 45
SECTION 5.17. Opinions of Counsel................................................................ 45
SECTION 5.18. No Default, Compliance with Representations
and Warranties and Closing Date Certificates ...................................... 46
SECTION 5.19. Closing Fees, Expenses, etc........................................................ 46
SECTION 5.20. Satisfactory Legal Form............................................................ 46
ARTICLE VI REPRESENTATIONS AND WARRANTIES............................................................... 47
SECTION 6.1. Organization, etc.................................................................. 47
SECTION 6.2. Due Authorization, Non-Contravention, etc.......................................... 47
SECTION 6.3. No Conflicts....................................................................... 47
SECTION 6.4. Validity and Binding Effect........................................................ 48
SECTION 6.5. No Default......................................................................... 48
SECTION 6.6. [Intentionally Omitted.]........................................................... 48
SECTION 6.7. Insurance.......................................................................... 48
SECTION 6.8. Litigation; Contingent Liabilities................................................. 48
SECTION 6.9. Liens ............................................................................. 48
SECTION 6.10. Subsidiaries....................................................................... 48
SECTION 6.11. Partnerships; Joint Ventures....................................................... 49
SECTION 6.12. Transaction Documents.............................................................. 49
SECTION 6.13. Intellectual Property.............................................................. 49
SECTION 6.14. Solvency........................................................................... 49
SECTION 6.15. Contracts; Labor Matters........................................................... 50
SECTION 6.16. Employee Benefit Plans............................................................. 50
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SECTION 6.17. Regulations U and X................................................................ 51
SECTION 6.18. Compliance......................................................................... 51
SECTION 6.19. Taxes ............................................................................. 51
SECTION 6.20. Investment Company Act Representation.............................................. 52
SECTION 6.21. Public Utility Holding Company Act Representation.................................. 52
SECTION 6.22. Environmental and Safety and Health Matters........................................ 52
SECTION 6.23. Related Agreements and Transaction Documents....................................... 53
SECTION 6.24. Holding Companies.................................................................. 53
SECTION 6.25. Security Interests and Priority.................................................... 54
SECTION 6.26. Related Business................................................................... 54
SECTION 6.27. Plan of Reorganization............................................................. 54
ARTICLE VII COVENANTS................................................................................... 54
SECTION 7.1. Affirmative Covenants.............................................................. 54
SECTION 7.1.1 Financial Information, Reports, Notices, etc................................. 54
SECTION 7.1.2 Corporate Existence.......................................................... 57
SECTION 7.1.3 Maintenance of Properties.................................................... 57
SECTION 7.1.4 Insurance.................................................................... 58
SECTION 7.1.5 Taxes, etc................................................................... 58
SECTION 7.1.6 Books and Records............................................................ 58
SECTION 7.1.7 Authorizations............................................................... 59
SECTION 7.1.8 ERISA and Canadian Benefit Plans............................................. 59
SECTION 7.1.9 Compliance with Laws and Environmental Matters............................... 61
SECTION 7.1.10 [Intentionally Omitted.]..................................................... 61
SECTION 7.1.11 Additional Guarantees........................................................ 61
SECTION 7.1.12 Stock Pledges................................................................ 61
SECTION 7.1.13 Concerning the Collateral and the Loan Documents............................. 62
SECTION 7.1.14 Maintenance of Corporate Separateness........................................ 63
SECTION 7.1.15 Working Capital Line......................................................... 63
SECTION 7.1.16 Plan of Reorganization....................................................... 63
SECTION 7.1.17 Change of Control............................................................ 63
SECTION 7.1.18 Further Assurances........................................................... 64
SECTION 7.1.19 Qualified Equity Offerings................................................... 64
SECTION 7.1.20 Qualification in Foreign Jurisdictions....................................... 64
SECTION 7.2. Negative Covenants................................................................. 64
SECTION 7.2.1 Indebtedness................................................................. 65
SECTION 7.2.2 Liens ....................................................................... 67
SECTION 7.2.3 Restricted Payments, etc..................................................... 67
SECTION 7.2.4 Payment Restrictions Affecting Subsidiaries.................................. 68
SECTION 7.2.5 Consolidation, Merger, etc................................................... 68
SECTION 7.2.6 Asset Dispositions, etc...................................................... 71
SECTION 7.2.7 Modification of Certain Agreements........................................... 72
SECTION 7.2.8 Transactions with Affiliates................................................. 72
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SECTION 7.2.9 Impairment of Security Interest.............................................. 73
SECTION 7.2.10 Stock of Subsidiaries........................................................ 74
SECTION 7.2.11 Sale and Leaseback........................................................... 74
SECTION 7.2.12 Nature of Business, Organizational Documents and Capital
Structure and New Subsidiaries .............................................. 75
SECTION 7.2.13 Fiscal Year.................................................................. 75
SECTION 7.2.14 Capital Expenditures......................................................... 75
Article VIII GUARANTY................................................................................... 75
SECTION 8.1.1 Guaranty; Limitation of Liability............................................ 75
SECTION 8.1.2 Guaranty Absolute............................................................ 76
SECTION 8.1.3 Waivers and Acknowledgements................................................. 77
SECTION 8.1.4 Subrogation.................................................................. 78
SECTION 8.1.5 Guaranty Supplements......................................................... 79
SECTION 8.1.6 Subordination................................................................ 79
SECTION 8.1.7 Continuing Guaranty; Assignments............................................. 80
Article IX EVENTS OF DEFAULT............................................................................ 80
SECTION 9.1. Listing of Events of Default....................................................... 80
SECTION 9.1.1 Non-Payment of Obligations................................................... 80
SECTION 9.1.2 Breach of Warranty........................................................... 81
SECTION 9.1.3 Non-Performance of Certain Covenants and Obligations......................... 81
SECTION 9.1.4 Non-Performance of Other Covenants and Obligations........................... 81
SECTION 9.1.5 Disaffirmation of Obligations................................................ 81
SECTION 9.1.6 Effectiveness and Enforceability of Guarantees............................... 81
SECTION 9.1.7 Default...................................................................... 81
SECTION 9.1.8 Liens ....................................................................... 82
SECTION 9.1.9 Judgments.................................................................... 82
SECTION 9.1.10 Bankruptcy, Insolvency, etc.................................................. 82
SECTION 9.1.11 Impairment of Security, etc.................................................. 83
SECTION 9.1.12 ERISA Default................................................................ 83
SECTION 9.2. Action if Bankruptcy, etc.......................................................... 83
SECTION 9.3. Action if Other Event of Default................................................... 83
Article X THE ADMINISTRATIVE AGENT; THE COLLATERAL AGENT................................................ 84
SECTION 10.1. Appointment of Administrative Agent................................................ 84
SECTION 10.2. Nature of Duties of the Administrative Agent....................................... 84
SECTION 10.3. General Immunity................................................................... 85
SECTION 10.4. Successor.......................................................................... 85
SECTION 10.5. Administrative Agent in its Capacity as Lender..................................... 86
SECTION 10.6. Actions by Administrative Agent.................................................... 86
SECTION 10.7. Right to Indemnity................................................................. 87
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SECTION 10.8. Collateral Agent................................................................... 87
SECTION 10.9. Suits to Protect Collateral........................................................ 88
SECTION 10.10. Determinations Relating to Collateral.............................................. 88
SECTION 10.11. Trust Moneys....................................................................... 88
SECTION 10.12. Release of Collateral.............................................................. 89
SECTION 10.13. Application of Proceeds of Collateral.............................................. 89
SECTION 10.14. Rights and Remedies to be Exercised by Administrative Agent Only................... 89
SECTION 10.15. Credit Decisions................................................................... 89
SECTION 10.16. Copies, etc........................................................................ 90
SECTION 10.17. The Administrative Agent........................................................... 90
SECTION 10.18. Agreement to Cooperate............................................................. 90
SECTION 10.19. Lenders to Act as Agent............................................................ 90
Article XI MISCELLANEOUS PROVISIONS..................................................................... 91
SECTION 11.1. Waivers, Amendments, etc........................................................... 91
SECTION 11.2. Notices............................................................................ 91
SECTION 11.3. Payment of Costs and Expenses...................................................... 92
SECTION 11.4. Indemnification.................................................................... 93
SECTION 11.5. Survival........................................................................... 94
SECTION 11.6. Severability....................................................................... 94
SECTION 11.7. Headings........................................................................... 94
SECTION 11.8. Execution in Counterparts, Effectiveness, etc...................................... 94
SECTION 11.9. Governing Law; Entire Agreement.................................................... 94
SECTION 11.10. Successors and Assigns............................................................. 94
SECTION 11.11. Sale and Transfer of Term Loans and Term Notes; Participations in
Term Loans and Term Notes ......................................................... 94
SECTION 11.11.1 Assignments.................................................................. 95
SECTION 11.11.2 Participations............................................................... 96
SECTION 11.12. Other Transactions................................................................. 97
SECTION 11.13. Forum Selection and Consent to Jurisdiction........................................ 97
SECTION 11.14. Waiver of Jury Trial............................................................... 98
SECTION 11.15. Power of Attorney for Collateral in Quebec......................................... 98
SECTION 11.16. Acknowledgement.................................................................... 99
SCHEDULE I - Disclosure Schedule
EXHIBIT A - Form of Term Note
EXHIBIT B - [Intentionally Omitted]
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EXHIBIT C - Forms of Mortgages
EXHIBIT D - Form of Common Security and Intercreditor Agreement
EXHIBIT E - Forms of Closing Date Certificates
EXHIBIT F - Form of Guaranty Supplement
EXHIBIT G - Form of Lender Assignment Agreement
EXHIBIT H - Form of Election Form
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TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT, dated as of December 31, 2001, is among Pioneer
Americas LLC, a Delaware limited liability company (the "Borrower"), each
Guarantor (as hereinafter defined) as is or may from time to time become a party
hereto (the Borrower and each Guarantor party to this Agreement as of the date
hereof are herein collectively referred to as the "Pioneer Companies"), the
various lenders as are or may from time to time become parties hereto (each
individually, a "Lender," and collectively, the "Lenders"), and Xxxxx Fargo Bank
Minnesota, National Association ("Xxxxx Fargo"), as administrative agent (the
"Administrative Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, the Pioneer Companies are successors to the debtors that
commenced the Chapter 11 Cases (as hereinafter defined) and whereas the Lenders
parties hereto as of the date hereof, prior to the coming into effect of the
Plan of Reorganization (as hereinafter defined), together beneficially hold part
of the Old Debt (as hereinafter defined);
WHEREAS, pursuant to the Plan of Reorganization and the implementation
thereof and upon the Plan of Reorganization becoming effective, the applicable
Pioneer Companies are willing and required (among other things) to remain
indebted to certain lenders and holders of the Old Debt by accepting the New
Debt and to issue the New Common Stock (as each such term is hereinafter
defined) in exchange for the cancellation and the extinguishment of the Old Debt
by such holders and lenders;
WHEREAS, such lenders and holders of Old Debt are willing and required to
accept the New Debt and the New Common Stock upon such cancellation and
extinguishment; and
WHEREAS, the New Debt comprises indebtedness represented by the New
Tranche A Term Notes, the New Tranche A Notes and the New Tranche B Notes (as
each such term is hereinafter defined) and the Pioneer Companies and the Lenders
wish to enter into this Agreement to consummate that part of the exchange of Old
Debt for New Debt that relates to the issuance by the Borrower of the New
Tranche A Term Notes (guaranteed by the Guarantors jointly and severally) and to
govern the indebtedness assumed and incurred hereby.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Additional Guarantor" is defined in Section 8.1.5.
"Administrative Agent" is defined in the preamble to this Agreement and
includes each other Person as shall have subsequently been appointed as the
successor Administrative Agent pursuant to Section 10.4.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) any director or
controlling shareholder of such other Person, or (iii) any senior officer of
such specified Person or such other Person. For purposes of this definition,
"control" (including with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; provided,
however, that beneficial ownership of 5% or more of the voting equity securities
(or of warrants or other rights to acquire such voting equity securities) of a
Person shall be deemed to be control; and provided further, that notwithstanding
the first proviso to this definition of "Affiliate", creditors of the debtors in
the Chapter 11 Cases receiving New Common Stock that beneficially own, at any
time, 20% or less of the voting securities of any Obligor or Obligor Subsidiary
shall not be "Affiliates" of such Obligor or Obligor Subsidiary.
"Agreement" means, on any date, this Term Loan Agreement (including each
Guaranty, the Disclosure Schedule, each other schedule hereto and all exhibits)
as originally in effect on the Closing Date and as thereafter from time to time
amended, supplemented, amended and restated, or otherwise modified and in effect
on such date.
"Allowed Other Secured Claim" means any Other Secured Claim (as defined in
the Plan of Reorganization) that is also Allowed (as defined in the Plan of
Reorganization).
"Allowed Secured Tax Claim" means any Secured Tax Claim (as defined in the
Plan of Reorganization) that is also Allowed (as defined in the Plan of
Reorganization).
"Asset Sale" means, with respect to any Obligor or any Obligor Subsidiary,
the sale (including Sale and Leaseback Transactions), lease, conveyance,
transfer or other disposition (including, without limitation, by way of merger
or consolidation, and whether indirectly or directly or by operation of law or
otherwise) to any Person, other
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than any Obligor or any Obligor Subsidiary, of any of such Obligor's or such
Obligor Subsidiary's assets (including, without limitation, (x) any sale, lease,
conveyance, transfer or other disposition of Capital Stock of any Obligor
Subsidiary, and (y) any sale, lease, conveyance, transfer or other disposition
of any non-cash consideration received by any Obligor or any Obligor Subsidiary
from any prior transaction or series of related transactions that constituted an
Asset Sale hereunder), whether owned on the date hereof or subsequently
acquired, in one transaction or a series of related transactions; provided,
however, that the following will not constitute an Asset Sale: (i) transactions
(other than transactions described in clause (y) above), including Sale and
Leaseback Transactions, in any calendar year with aggregate cash and/or Fair
Market Value of any other consideration received (including, without limitation,
the unconditional assumption of Indebtedness) of less than $1,000,000; (ii) a
transaction or series of related transactions that results in a Change of
Control; (iii) any sale of assets of any Obligor or any Obligor Subsidiary or
merger permitted pursuant to Section 7.2.5; (iv) any sale or other disposition
of inventory, property (whether real, personal or mixed) or equipment that has
become worn out, obsolete or damaged or otherwise unsuitable or no longer needed
for use in connection with the business of any Obligor or any Obligor
Subsidiary, as the case may be, in the good faith determination of the Boards of
Directors of PCI and the Borrower and so certified to the Administrative Agent
(provided that no such determination by the Boards of Directors and no such
certification to the Administrative Agent shall be required in respect of such
sales or dispositions with aggregate cash and/or fair market value of any
non-cash consideration received in respect of such sales or dispositions being
equal to or less than $100,000 individually and up to $500,000 in the aggregate
in any calendar year); (v) any sale of inventory to customers in the ordinary
and customary course of business; (vi) sales of cash and cash equivalents in the
ordinary course of business; (vii) transfers resulting from any casualty or
condemnation of property or assets; (viii) the sale or discount of overdue
accounts receivable in the ordinary course of business, in connection with the
compromise or collection thereof; and (ix) the sale of the Pioneer Technology
Centre situated at Xxxxxxxxxxx, Xxxxxxx, Xxxxxx.
"Assignee Lender" is defined in Section 11.11.1(b).
"Assignor Lender" is defined in Section 11.11.1.
"Attributable Indebtedness" means, with respect to any Sale and Leaseback
Transaction, as at the time of determination, the greater of (i) the Fair Market
Value of the property subject to such transaction, and (ii) the present value
(discounted at a rate equivalent to the Borrower's then current weighted average
cost of funds for borrowed money, compounded on a semi-annual basis) of the
total net obligations of the lessee for rental payments during the remaining
term of the lease (or the lease back in the case of a lease and leaseback
transaction) included in such arrangement (including any period for which such
lease has been extended). As used in the preceding sentence, the "total net
obligations of the lessee for rental payments" under any lease (or any lease
back in the case of a lease and leaseback transaction) for any such period means
the sum of rental and other payments required to be paid (including any step-up
in interest rate of any financing) with respect to such period by the lessee
thereunder excluding any amounts required to be paid by such lessee on account
of maintenance and repairs, insurance,
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taxes, assessments, water rates or similar charges. In the case of any lease (or
any lease back in the case of a lease and leaseback transaction) which is
terminable by the lessee upon payment of a penalty, such net amount of rent also
includes the amount of such penalty, but no rent will be considered as required
to be paid under such lease subsequent to the first date upon which it may be so
terminated.
"Average Liquidity" means, in respect of any period, the average
(arithmetical mean) Liquidity in dollars during such period, with Liquidity
being determined on each Friday of each calendar week and, accordingly, Average
Liquidity for any given period shall be determined by determining the Liquidity
for each Friday during such period (each, a "Friday Liquidity Total") and then
by dividing the sum of all the Friday Liquidity Totals for such period by the
number of Fridays during such period.
"Authorized Officer" means, with respect to any Obligor, those of its
officers whose signatures and incumbency shall have been certified to the
Administrative Agent and the Lenders pursuant to Section 5.1.
"Bankruptcy Code" means Title 11 of the United States Code, as amended, or
any similar United States federal or state law relating to bankruptcy,
insolvency, receivership, winding-up, liquidation, reorganization or relief of
debtors or any amendment to, succession to or change in any such law.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of Texas, Houston Division, having jurisdiction over the
Chapter 11 Cases, or if such court ceases to exercise jurisdiction over the
Chapter 11 Cases, such other court or adjunct thereof that exercises
jurisdiction over the Chapter 11 Cases in lieu of the United States Bankruptcy
Court for such district.
"Bankruptcy Law" means the Bankruptcy Code, Canadian Bankruptcy Law, or
any law of any other country or jurisdiction relating to bankruptcy, insolvency,
receivership, winding-up, liquidation, reorganization or relief of debtors.
"Board of Directors" means, in respect of any Person, its Board of
Directors or equivalent body or any committee thereof duly authorized to act on
behalf of such Board of Directors or equivalent body in respect of such matters
as are referred to herein as requiring such action on behalf of such Board of
Directors or equivalent body.
"Board Resolution" of any corporation, limited liability company or other
entity means a copy of a resolution or limited liability company corporate
action or other equivalent action certified by the Secretary or an Assistant
Secretary or equivalent officer of such corporation, limited liability company
or other entity to have been duly adopted by the Board of Directors of such
corporation, limited liability company or other entity, as the case may be, and
to be in full force and effect on the date of such certification and delivered
to the Administrative Agent.
"Borrower" is defined in the preamble to this Agreement.
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"Business Day" means any day which is neither a Saturday or Sunday nor a
legal holiday or other day on which commercial banks are authorized or required
to be closed in New York City.
"Calendar Quarter" means each three month period ending on the last day of
each December, March, June and September, with the first such three month period
ending on the last day of March 2002 and the last such three month period ending
on the last day in December, 2006.
"Canadian Act of Bankruptcy" means, with respect to any Person:
(i) an admission in writing by such Person of its inability to
pay its debts generally as they become due;
(ii) a general assignment by such Person for the benefit of
its creditors pursuant to the Bankruptcy and Insolvency Act
(Canada);
(iii) such Person becoming subject to any bankruptcy
proceedings in Canada which it is not contesting in good faith,
diligently and by appropriate means or which continue undischarged,
unstayed or undismissed for a period of 30 days;
(iv) any application under any Canadian Bankruptcy Law to any
tribunal or authority for the purpose of suspending payment or
performance of any of the liabilities of such Person;
(v) a petition or application by such Person under any
Canadian Bankruptcy Law to any tribunal or authority for the
appointment of an administrator, receiver, trustee or intervenor for
it or for any substantial part of such Person's property;
(vi) the commencement against such Person of any proceedings
(including a notice of intention or a proposal under the Bankruptcy
and Insolvency Act (Canada)) or any Canadian Bankruptcy Law,
statute, regulation or decree whether now or hereafter in effect in
Canada, relating to it or its debt, or to any reorganization,
arrangement, adjustment, dissolution or liquidation involving such
Person, which proceedings are not being contested in good faith,
diligently and by appropriate means or which continue undischarged,
unstayed or undismissed for a period of 30 days;
(vii) the bankruptcy of such Person within the meaning of the
Bankruptcy and Insolvency Act (Canada), or any successor or
equivalent legislation; or
(viii) any act by such Person signifying its consent to,
approval of, or acquiescence in any bankruptcy, reorganization or
insolvency proceeding in Canada under any law relating to
bankruptcy, insolvency or
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relief of debtors or any proceeding for the appointment of a
receiver or trustee for itself or for any substantial part of its
property where such receiver or trustee remains undischarged for a
period of 30 days.
"Canadian Bankruptcy Law" means the Bankruptcy and Insolvency Act
(Canada), the Companies' Creditors Arrangement Act (Canada), the Winding-Up and
Restructuring Act (Canada), or any similar Canadian federal or provincial law
relating to bankruptcy, insolvency, receivership, winding-up, liquidation,
reorganization or relief of debtors, each as amended or changed.
"Canadian Benefits Plan" means any plan, program, practice, arrangement or
policy, whether registered or unregistered, written or unwritten, funded or
unfunded, insured or uninsured, that is maintained, administered or contributed
to by any Obligor or any of its Obligor Subsidiaries (or under which any Obligor
or any of its Obligor Subsidiaries has or may have any obligation) in respect of
employees or former employees in Canada (or their spouses, beneficiaries or
dependents), and relating to pensions, supplemental pensions, retirement or
retirement savings, profit sharing or deferred profit sharing, deferred or
incentive compensation, bonuses, death benefits, life or disability insurance,
medical or dental insurance or benefits or other similar employee benefits, but
excluding employment insurance, health insurance, workers compensation and
pension benefits provided by statutes.
"Canadian Corporate Reorganization" has the meaning given to it in Section
5.8.
"Canadian Security Agreements" means any general security agreement and
deed of hypothec charging all of the personal and movable property of PCI
Chemicals Canada Company and any other Obligor having property, assets or any
place of business or office in Canada, including, without limitation, the Quebec
Mortgage and Security Agreement, a deed of hypothec charging all of the
immovable property of PCI Chemicals Canada Company located in the province of
Quebec and deeds of mortgage charging all the real property of PCI Chemicals
Canada Company located in the provinces of Ontario and New Brunswick.
"Capital Expenditures" means, for any Person for any period, the sum of,
without duplication, (a) all expenditures made, directly or indirectly, by such
Person during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or equipment on a consolidated balance sheet of
such Person or have a useful life of more than one year, plus (b) the aggregate
principal amount of all Indebtedness assumed or incurred (to the extent
permitted by this Agreement) in connection with any such expenditures. For
purposes of this definition, the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the seller of
such equipment for the equipment being traded in at such time or the amount of
such proceeds, as the case may be.
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"Capital Stock" means, with respect to any Person, any common stock,
preferred stock and any other capital stock of such Person and shares,
interests, participations or other ownership interest (however designated), of
any Person and any rights (other than debt securities convertible into, or
exchangeable for, capital stock or such other ownership interests), warrants,
options or other rights to purchase any of the foregoing, including each class
of common stock and preferred stock of such Person if such Person is a
corporation and each general and/or limited partnership interest of such Person
if such Person is a partnership and/or limited liability company interest of
such Person if such Person is a limited liability company.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Change of Control" means the occurrence of any of the following: (i) a
"person" or "group" (as such terms are used in Sections 14(d)(2) and 13(d)(3),
respectively, of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of at least 35% of the outstanding
voting power of the fully diluted Voting Stock of PCI or the Borrower (other
than in respect of the Borrower, if such "person" is PCI or an Affiliate of
PCI), (ii) the adoption of a plan relating to the liquidation or dissolution of
the Borrower or PCI, taken individually or on a consolidated basis with their
respective Subsidiaries, (iii) the merger or consolidation of PCI or the
Borrower with or into another corporation with the effect that the stockholders
of PCI or the Borrower immediately prior to such merger or consolidation cease
to be the "beneficial owners" (as defined in Rule 13d-3 under the Exchange Act)
of 35% or more of the combined voting power of the securities of the surviving
corporation of such merger or the corporation resulting from such merger or
consolidation ordinarily (and apart from rights arising under special
circumstances) having the right to vote in the election of directors outstanding
immediately after such merger or consolidation, or (iv) during any period of two
consecutive calendar years individuals who at the beginning of such period
constituted the Board of Directors of PCI (together with any new directors whose
election by the Board of Directors of PCI, or whose nomination for election by
the shareholders of PCI, was approved by a vote of a majority of the directors
then still in office who either were directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the directors of PCI then in office.
Notwithstanding the foregoing, a Change of Control shall not be deemed to have
occurred under clause (iii) above solely as a result of a merger or
consolidation of the Borrower with or into PCI provided that such merger or
consolidation is permitted under Section 7.2.5.
"Chapter 11 Cases" means each and all of the cases under Chapter 11 of the
Bankruptcy Code commenced by Pioneer Companies, Inc., Pioneer Corporation of
America, Imperial West Chemical Co., Kemwater North America Company, PCI
Chemicals Canada, Inc./PCI Chimie Canada Inc., Pioneer Americas, Inc., Pioneer
(East), Inc., Pioneer Water Technologies, Inc., Pioneer Licensing, Inc., and
KWT, Inc., and
7
styled In re Pioneer Companies, Inc. et al, Chapter 11 Case No. 01-38259-H3-11
Jointly Administered.
"Closing Date" is defined in the first paragraph of Article V.
"Closing Date Certificate" means a certificate of an Authorized Officer of
the relevant Obligor, substantially in the form of Exhibit E hereto, delivered
pursuant to Section 5.18.
"Code" means the United States Internal Revenue Code of 1986, as amended,
reformed or otherwise modified.
"Collateral" means all of the property and assets of each Obligor and
Obligor Subsidiary now existing or hereafter acquired which secures the
Indebtedness of the Borrower hereunder and under the Term Notes pursuant to, and
as otherwise defined in, the Security Documents.
"Collateral Agent" means Xxxxx Fargo Bank Minnesota, National Association,
as collateral agent under the Common Security and Intercreditor Agreement, and
any successor thereto.
"Collateral Proceeds" is defined in Section 7.2.6(a).
"Commission" means the United States Securities and Exchange Commission.
"Common Security and Intercreditor Agreement" means the Common Security
and Intercreditor Agreement, dated as of December 31, 2001, by and among the
Obligors and others, the New Tranche B Notes Indenture Trustee (for itself and
for the benefit the New Tranche B Notes Holders), the Collateral Agent, the New
Tranche A Notes Indenture Trustee (for itself and for the benefit of the New
Tranche A Notes Holders) and the Administrative Agent (for itself and for the
benefit of the Lenders), substantially in the form of Exhibit D hereto, and as
may be amended, supplemented, amended and restated or otherwise modified from
time to time.
"Confirmation Order" means the order of the Bankruptcy Court confirming
the Plan of Reorganization pursuant to Section 1129 of the Bankruptcy Code.
"Consolidated Net Income" means, for any period, and as to any Person, the
aggregate Net Income of such Person and its Subsidiaries for such period
determined in accordance with GAAP; provided that (i) the Net Income of any
Person which is not a Subsidiary of such Person but which is consolidated with
such Person or is accounted for by such Person by the equity method of
accounting will be included only to the extent of the amount of cash dividends
or cash distributions paid to such Person or a Wholly-Owned Subsidiary of such
Person, (ii) the Net Income of any Subsidiary of such Person that is subject to
restrictions, direct or indirect, on the payment of dividends or the making of
distributions to such Person will be excluded to the extent of such
restrictions, (iii) the Net Income of any Subsidiary less than 80% of whose
securities having the right (apart from the right under special circumstances)
to vote in the election of directors are
8
owned by PCI, the Borrower or their respective Wholly-Owned Subsidiaries will be
included only to the extent of the amount of cash dividends or cash
distributions actually paid by such Subsidiary to PCI, the Borrower or a
Wholly-Owned Subsidiary of the Borrower or PCI, (iv) all extraordinary gains and
losses, and any gain or loss realized upon the termination of any employee
pension benefit plan, in respect of dispositions of assets other than in the
ordinary course of business and any one-time increase or decrease to Net Income
which is required to be recorded because of the adoption of new accounting
policies, practices or standards required by GAAP (together, in each case, with
any provision for taxes) will be excluded, and (v) all amounts of "other income,
net" classified as such on one or more lines of such Person's statement of
operations, in accordance with GAAP, net of applicable income taxes, will be
excluded from such Person's aggregate Net Income.
"Consolidated Net Worth" means, for any Person, the total of the amounts
shown on the balance sheet of such Person and its Subsidiaries determined on a
consolidated basis without duplication in accordance with GAAP, as of the end of
the most recent Fiscal Quarter of such Person ending at least forty-five (45)
days prior to the taking of any action for the purpose of which the
determination is being made, as (i) the amount of Capital Stock plus (ii) the
amount of surplus and retained earnings (or, in the case of a surplus or
retained earnings deficit, minus the amount of such deficit).
"Continuation Notice" means a notice of continuation or conversion and
certificate duly executed by an Authorized Officer of the Borrower,
substantially in the form of Exhibit B hereto.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Creditors' Committee Lenders" means the secured creditors of the debtors
in the Chapter 11 Cases appointed to the statutory committee of unsecured
creditors appointed in the Chapter 11 Cases.
"CRC Portfolio" means those certain derivatives contracts purported and
alleged by the Colorado River Commission ("CRC") to have been entered into, in
each case before the date hereof, on behalf of the Borrower by the CRC in
connection with that certain (i) Contract No. P03-50, (ii) Xxxxxxxx Xx. X00-00,
(xxx) Xxxxxxxx Xx. X00-00, and (iv) Contract No. P03-70.
"Cumulative Capital Expenditures" at any given time, means the amount in
dollars that is equal to the sum of all Capital Expenditures of PCI, the
Borrower and their respective Subsidiaries, taken as a whole, from January 1,
2002, and up to and including December 31, of the immediately preceding Fiscal
Year of the Borrower.
"Cumulative Capital Expenditure Deficit" for a Fiscal Year of the Borrower
is the amount in dollars equal to the greater of (a) zero, and (b) the Rollover
Amount in respect of such Fiscal Year.
9
"Cumulative Capital Expenditure Limit" for a given Fiscal Year of the
Borrower means a dollar amount determined by reference to the following table:
------------------------------------------------------------------------------------
FISCAL YEAR OF THE BORROWER CUMULATIVE CAPITAL EXPENDITURE LIMIT
------------------------------------------------------------------------------------
Beginning January 1, 2003 and ending
December 31, 2003 $ 30,000,000
------------------------------------------------------------------------------------
Beginning January 1, 2004 and ending
December 31, 2004 $ 54,000,000
------------------------------------------------------------------------------------
Beginning January 1, 2005 and ending
December 31, 2005 $ 78,000,000
------------------------------------------------------------------------------------
Beginning January 1, 2006 and ending
December 31, 2006 $102,000,000
------------------------------------------------------------------------------------
"Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would, unless cured or waived,
constitute an Event of Default.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Administrative Agent and
the Required Lenders.
"Dollar" and the sign "$" mean lawful money of the United States.
"EBITDA" means, for any period, and for any Person, its Consolidated Net
Income for such period, before subtracting its consolidated income taxes,
interest expense, depreciation and amortization (including amortization
associated with good will, deferred debt expenses, restricted stock and option
costs and non-competition agreements), determined in accordance with GAAP.
"Effective Plan Date" means the first Business Day on which the conditions
specified in Section 10.1 of the Plan of Reorganization have been satisfied or
waived.
"Eligible Investments" means, (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof or Canada or any province thereof (provided that the
full faith and credit of the United States of America or Canada, as the case may
be, is pledged in support thereof) having maturities of not more than 90 days
from the date of acquisition, (ii) time deposits and certificates of deposit
with maturities of not more than 90 days from the date of acquisition of any
commercial banking institution that is a member of the Federal Reserve System or
is a Schedule 1 Canadian Bank, in either case having capital and surplus in
excess of $500,000,000 and whose debt has a rating at the time of any such
10
investment of at least "A-1" or the equivalent thereof by S&P or at least "P-1"
or the equivalent thereof by Xxxxx'x, or any Lender, (iii) fully secured
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) entered into with any bank or
financial institution meeting the qualifications specified in clause (ii) above,
(iv) commercial paper issued by the parent corporation of any commercial banking
institution that is a member of the Federal Reserve System or is a Schedule 1
Canadian Bank, in either case having capital and surplus in excess of
$500,000,000 and commercial paper or master notes of issuers rated at the time
of any such investment at least "A-1" or the equivalent thereof by S&P or at
least "P-1" or the equivalent thereof by Xxxxx'x, and in each case maturing
within 270 days after the date of acquisition, and (v) any shares in an open-end
mutual fund organized by a bank or financial institution having combined capital
and surplus of at least $500,000,000 investing solely in investments permitted
by the foregoing clauses (i), (ii) and (iv).
"Environmental Claim" means any claim, assertion, demand, notice of
violation, suit, administrative or judicial proceeding, regulatory action,
investigation, information request or order involving any Hazardous Materials,
Environmental Law, noise or odor pollution or any injury or threat of injury to
human health, property or the environment.
"Environmental Laws" means all international, national, provincial,
regional, federal, state, local and municipal statutes, laws (including
principles of common and decisional law), regulations, by-laws, policies,
guidelines, directives, standards, rules, orders, decrees, judgments,
ordinances, permits, certificates, licenses, registrations, approvals, or
requirements or authorizations of any governmental or administrative authority
relating to the environment, natural resources, safety or health of humans or
other organisms, including the manufacture, distribution in commerce, and use or
Release of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"ERISA Affiliate" means any corporation, partnership, or other trade or
business (whether or not incorporated) that is, along with any Obligor or
Obligor Subsidiary, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in Section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA, or a member of the
same affiliated service group within the meaning of Section 414(m) of the Code.
"ERISA Event" means (a) with respect to a Single Employer Plan, a
"reportable event", as such term is described in Section 4043 of ERISA and the
regulations issued thereunder (other than a "reportable event" with respect to
which notice to the PBGC has been waived under Section 4043 of ERISA or such
regulations) or an event described in Section 4068 of ERISA, (b) the withdrawal
of any Obligor, Obligor Subsidiary or ERISA Affiliate from a Multiple Employer
Plan during a plan year in which it was a "substantial employer", as such term
is defined in Section 4001(a)(2) of ERISA, or the incurrence of
11
liability by any Obligor, Obligor Subsidiary or ERISA Affiliate under Section
4064 of ERISA upon the termination of a Multiple Employer Plan, (c) providing
notice of intent to terminate a Single Employer Plan pursuant to Section 4041(c)
of ERISA or the treatment of a Single Employer Plan amendment as a termination
under Section 4041 of ERISA, (d) the institution of proceedings to terminate a
Plan by the PBGC under Section 4042 of ERISA, (e) a complete or partial
withdrawal by any Obligor, Obligor Subsidiary or ERISA Affiliate from a
Multiemployer Plan, (f) a failure by any Obligor, Obligor Subsidiary or ERISA
Affiliate to make required contributions to a Plan, (g) the adoption of an
amendment to a Single Employer Plan which would require security to be given to
the Plan pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, (h)
the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Obligor,
Obligor Subsidiary or ERISA Affiliate, (i) an application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
with respect to any Single Employer Plan, (j) the imposition of a lien upon any
Obligor, Obligor Subsidiary or ERISA Affiliate pursuant to Section 412 of the
Code or Section 302 of ERISA, (k) any event or condition that results in the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA, or (l) any Obligor, Obligor Subsidiary or ERISA Affiliate engages in a
nonexempt prohibited transaction or otherwise becomes liable with respect to a
nonexempt prohibited transaction that could reasonably be expected to have a
Material Adverse Effect.
"Event of Default" is defined in Section 9.1.
"Excess Cash Flow" means, for any period, (i) the sum of (A) the
Consolidated Net Income of PCI, the Borrower and their respective consolidated
Subsidiaries for such period, and (B) all depreciation, amortization and other
non-cash charges of PCI, the Borrower and their respective consolidated
Subsidiaries for such period (including any non-cash interest expense included
in such Consolidated Net Income) to the extent included in the computation of
such Consolidated Net Income, minus (ii) the sum of (without duplication) (A)
scheduled and mandatory cash principal payments on any Indebtedness made by PCI,
the Borrower or any of their respective Subsidiaries during such period to the
extent such other Indebtedness is permitted herein and such payments are
permitted herein to be made, (B) Capital Expenditures made by PCI, the Borrower
or any of their respective Subsidiaries during such period to the extent
permitted herein, (C) cash reorganization expenses, restructuring fees and
charges actually paid in such period relating to the reorganization and
restructuring of the Debtors (as such term is defined in the Plan of
Reorganization) in connection with the Chapter 11 Cases only to the extent such
expenses, fees and charges are not deducted from the determination of such
Consolidated Net Income, (D) any cash installment required to be paid to the
holder of New Other Secured Notes and Claims, and (E) all extraordinary cash
gains or cash income received (including as a result of transactions excluded
from the definition of Asset Sales), but only to the extent excluded from the
determination of such Consolidated Net Income as a result of clause (v) of the
definition of Consolidated Net Income, plus or minus, as the case may be, (iii)
cash changes in the Working Capital of PCI, the Borrower and their respective
Subsidiaries during such period (in either case, without
12
duplication of adjustments made in respect of such Working Capital pursuant to
clause (i) or (ii) of this definition of Excess Cash Flow).
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" means all Indebtedness (other than the Term Notes
outstanding) of the Obligors existing as of the Effective Plan Date, after
giving effect to the Plan of Reorganization, and listed on Item 7.2.1(c)
("Existing Indebtedness") of the Disclosure Schedule.
"Existing Liens" is defined in paragraph (x) of the definition of
"Permitted Liens."
"Exit Facility" means the Loan and Security Agreement, dated as of
December 31, 2001, among the Borrower and PCI Chemicals Canada Company, as
borrowers, the guarantors parties thereto, the Exit Facility Lenders and the
Exit Facility Agent, and any refinancing thereof as may be permitted pursuant to
this Agreement, as may be amended, supplemented, amended and restated or
otherwise modified from time to time, and all agreements and instruments related
thereto and contemplated thereby, each dated as of December 31, 2001 (including
any security agreement entered into in connection therewith), as each such
agreement or instrument may be amended, supplemented, amended and restated or
otherwise modified from time to time and notwithstanding that there may be a
period of time between such refinancings.
"Exit Facility Agent" means Foothill Capital Corporation and its
successors and assigns under the Exit Facility and any agent party to any
subsequent Exit Facility.
"Exit Facility Lenders" means the lenders and any other secured parties as
are or may from time to time become parties to the Exit Facility and their
respective successors and assigns and any other lenders and secured parties
party to any subsequent Exit Facility.
"Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined by a majority of the members of the Boards of Directors of PCI and
the Borrower and a majority of the disinterested members of the Boards of
Directors of PCI and the Borrower, if any, acting in good faith, and will be
evidenced by a duly and properly adopted resolution of such Boards of Directors.
"Final Order" has the meaning given to it in the Plan of Reorganization.
"Fiscal Quarter" means any fiscal quarter of a Fiscal Year.
"Fiscal Year" means, with respect to any Obligor, any period of twelve
consecutive months ending on December 31; references to a Fiscal Year with a
13
numbering corresponding to any calendar year refer to the fiscal year ending on
the 31st of December during such calendar year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" has the meaning given to it in Section 1.4.
"Guaranteed Obligations" has the meaning given to it in Section 8.1.1.
"Guaranties" means each Guaranty taken together with each other Guaranty.
"Guarantors" means, collectively, Pioneer Companies, Inc., a Delaware
corporation, Imperial West Chemical Co., a Nevada corporation, Kemwater North
America Company, a Delaware corporation, PCI Chemicals Canada Company, an
unlimited liability company organized and existing under the laws of Nova
Scotia, Canada, Pioneer (East), Inc., a Delaware corporation, Pioneer Water
Technologies, Inc., a Delaware corporation, Pioneer Licensing, Inc., a Delaware
corporation, and KWT, Inc., a Delaware corporation, and each other guarantor of
the Borrower that becomes a guarantor pursuant to this Agreement, and each of
their successors, and "Guarantor" shall mean any one of such guarantors.
"Guaranty" means the guaranty of each Guarantor set forth in Article VIII
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time, and each Guaranty Supplement.
"Guaranty Supplement" has the meaning given to it in Section 8.1.5.
"Hazardous Materials" means all pollutants, contaminants, hazardous
substances, hazardous chemicals, hazardous wastes, hazardous materials, residual
hazardous materials, medical and biochemical wastes, special wastes, toxic
substances, petroleum (including crude oil) and petroleum-derived substances,
wastes and additives, asbestos, polychlorinated biphenyls, ozone-depleting
substances, methane, radioactive materials (including source, special nuclear
and by-product materials as defined by 42 U.S.C. Section 2011 et seq. (whether
or not 42 U.S.C. Section 2011 et seq. would apply in respect of any Obligor
incorporated or organized outside of the United States)) and all other
compounds, elements, materials and substances in any form or condition
(including products) regulated, restricted or addressed by or under
Environmental Laws.
"Hedging Obligations" means the obligations of any Person or entity
pursuant to any swap or cap agreement, exchange agreement, collar agreement,
option, futures or forward hedging contract, derivative instrument or other
similar agreement or any arrangement designed to protect such Person or entity
against fluctuations in interest rates or foreign exchange rates or the price of
raw materials and other chemical products used or produced in the Borrower's
business or the business of any other Obligor, as the case may be.
14
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"incur" has the meaning given to it in Section 7.2.1; provided that (i)
with respect to any Indebtedness of any Subsidiary of the Borrower or PCI that
is owing to the Borrower or PCI or another such Subsidiary, any disposition,
pledge or transfer of such Indebtedness to any Person (other than PCI or the
Borrower or a Wholly-Owned Subsidiary of PCI or the Borrower) shall be deemed to
be an incurrence of such Indebtedness, and (ii) with respect to any Indebtedness
of the Borrower or PCI or a Subsidiary of the Borrower or PCI that is owing to
another such Subsidiary, any transaction pursuant to which a Wholly-Owned
Subsidiary of PCI or the Borrower to which such Indebtedness is owing ceases to
be a Wholly-Owned Subsidiary shall be deemed to be an incurrence of such
Indebtedness; and provided further, that any Indebtedness of a Person existing
at the time such Person becomes a Subsidiary of PCI or the Borrower shall be
deemed to be incurred by such Subsidiary at the time it becomes a Subsidiary.
The term "incurrence" has a corresponding meaning.
"Indebtedness" of any Person means, without duplication, all liabilities
with respect to (i) indebtedness for money borrowed or for the deferred purchase
price of property or services or which is evidenced by a bond, debenture, note
or other similar instrument or agreement, but excluding trade credit evidenced
by any such instrument or agreement incurred in the ordinary course of business
and payable on usual and customary terms, or Indebtedness of any partnership of
which such Person is a partner; (ii) reimbursement obligations, letters of
credit and bankers' acceptances; (iii) indebtedness with respect to Hedging
Obligations; (iv) Capitalized Lease Obligations; (v) indebtedness, secured or
unsecured, created or arising in connection with the acquisition or improvement
of any property or asset or the acquisition of any business; (vi) all
indebtedness secured by or for which the obligee has an existing right,
contingent or otherwise, to be secured by any Lien upon property owned by such
Person and all indebtedness secured in the manner specified in this clause even
if such Person has not assumed or become liable for the payment thereof; (vii)
all indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
or otherwise representing the deferred and unpaid balance of the purchase price
of any such property, including all indebtedness created or arising in the
manner specified in this clause even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property; (viii) guarantees, direct or indirect, of
any Indebtedness of other Persons referred to in clauses (i) through (vii)
above, or of dividends or leases, taxes or other obligations of other Persons,
excluding any guarantee
15
arising out of the endorsement of negotiable instruments for collection in the
ordinary course of business; (ix) contingent obligations in respect of, or to
purchase or otherwise acquire or be responsible or liable for, through the
purchase of products or services, irrespective of whether such products are
delivered or such services are rendered, or otherwise, any such indebtedness
referred to in clauses (i) through (vii) above; (x) any obligation, contingent
or otherwise, arising under any surety, performance or maintenance bond; and
(xi) all preferred stock or other redeemable stock of such Person valued at the
greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends. As used herein, Indebtedness with respect to any
Hedging Obligation means, with respect to any specified Person on any date, the
net amount (if any) that would be payable by such specified Person upon the
liquidation, close-out or early termination on such date of such Hedging
Obligation. For purposes of the foregoing, any settlement amount payable upon
the liquidation, close-out or early termination of a Hedging Obligation shall be
calculated by PCI and the Borrower in good faith and in a commercially
reasonable manner on the basis that such liquidation, close-out or early
termination results from an event of default or other similar event with respect
to such specified Person. Any reference in this definition to indebtedness shall
be deemed to include any renewals, extensions and refundings of any such
indebtedness or any indebtedness, issued in exchange for such indebtedness.
"Indemnified Liabilities" is defined in Section 11.4.
"Indemnified Parties" is defined in Section 1l.4.
"Independent Director" means, in relation to any Person, a director other
than a director (i) who (apart from being a director of the Person or any of its
Subsidiaries) is an employee, insider, associate or Affiliate of the Person or
any of its Subsidiaries or has held any such position during the previous year,
or (ii) who is a director, an employee, insider, associate or Affiliate of
another party to the transaction in question.
"Insurance Proceeds" has the meaning given to it in the Common Security
and Intercreditor Agreement.
"Intercreditor Collateral Account" means the Collateral Account as defined
in the Common Security and Intercreditor Agreement.
"Interest Period" means, as to any Term Loan, the period commencing on the
Closing Date for the first interest period of such Term Loan, and ending on the
date three months thereafter with the first such Interest Period commencing on
December 31, 2001, and the last such Interest Period commencing on September 30,
2006.
"Investment" means any direct or indirect advance, loan, other extension
of credit or capital contribution (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others) to purchase or acquire Capital Stock, bonds, notes, debentures or
other securities of, or purchase or acquire all, or a substantial part, of the
business, Capital Stock or other evidence of beneficial ownership of, or any
other investment in or guarantee of any Indebtedness of, any Person
16
or any other item that would be classified as an investment on a balance sheet
prepared in accordance with GAAP. Investments do not include advances to
customers and suppliers in the ordinary course of business on commercially
reasonable terms. If any Obligor or any Obligor Subsidiary sells or otherwise
disposes of any Capital Stock of any direct or indirect Subsidiary of any
Obligor or Obligor Subsidiary such that, after giving effect to any such sale or
disposition, such Person is no longer such a Subsidiary of the Obligor or
Obligor Subsidiary, the Borrower shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the Fair Market Value of the
Capital Stock of such Subsidiary not sold or disposed of.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit G hereto.
"Lenders" and "Lender" are defined in the preamble to this Agreement.
"LIBOR" means, in respect of any Interest Period, the London interbank
offered rate determined on the second London Business Day preceding the first
day of such Interest Period (or in the case of the first Interest Period, the
Closing Date) by the Administrative Agent as follows:
first: on the basis of offered rates for three-month United States dollar
deposits, as this rate appears on the British Bankers' Association website
as of 2:00 p.m. London time on such day;
second: if the rate does not appear on the British Bankers' Association
website as of 2:00 p.m. London time on such day, on the basis of offered
rates for three-month United States dollar deposits, as this rate appears
on Telerate Screen Page 3750, as of 2:00 p.m. London time on such day;
third: if the rate does not appear on Telerate Screen Page 3750 as of 2:00
p.m. London time on such day, the LIBOR shall be the arithmetic mean of
the offered quotations of two or more Reference Banks, rounded to the
nearest whole multiple of 1/16%; and
fourth: if at the time of such determination fewer than two Reference
Banks provide offered quotations, the LIBOR for the relevant Interest
Period shall be the higher of (x) the LIBOR as determined in respect of
the then current Interest Period, and (y) the Reserve Interest Rate.
"Lien" means any mortgage, pledge, lien, security interest, hypothec,
prior claim, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement and any lease in the nature thereof).
"Liquidity", on any day, means the aggregate dollar amount of cash held by
or on behalf of the Obligors and the Obligor Subsidiaries taken as a whole plus
the aggregate principal amount of revolving credit loans or other facilities
that may be borrowed on such day by the Borrower and PCI Chemicals Canada
Company (taken together) under the Exit Facility.
17
"Liquidity Quarterly Prepayment" means, for any mandatory prepayment date
in respect of Section 3.1.1(c)(ii), an amount in dollars equal to Excess Cash
Flow for the Calendar Quarter immediately preceding such mandatory prepayment
date multiplied by a percentage, which percentage shall be determined by
reference to the Average Liquidity during such Calendar Quarter (the "Calendar
Quarter Average Liquidity") and the Average Liquidity during the 45 day period
immediately following the end of such Calendar Quarter (the "Forty Five Day
Average Liquidity") as follows:
-----------------------------------------------------
CALENDAR QUARTER AVERAGE LIQUIDITY ($ MILLIONS)
15 or greater 20 or greater
and less than 20 and less than 25 25 or greater
---------------- ---------------- -------------
------------------
FORTY FIVE DAY
AVERAGE LIQUIDITY
($ MILLIONS)
10 or greater and
less than 15 .......... 10% 10% 10%
15 or greater and
less than 20 .......... 35% 60% 90%
20 or greater and
less than 25 .......... 45% 60% 90%
25 or greater ......... 50% 60% 90%
------------------
----------------------------------------------------
PERCENTAGE OF EXCESS CASH FLOW TO BE MULTIPLIED TO
EXCESS CASH FLOW TO DETERMINE THE AMOUNT IN DOLLARS
OF THE MANDATORY PREPAYMENT IN RESPECT OF SECTION
3.1.1(c)(ii).
----------------------------------------------------
No such Liquidity Quarterly Payment shall be payable pursuant to Section
3.1.1(c)(ii) if the corresponding Forty Five Day Average Liquidity is less than
$10,000,000 or if the corresponding Calendar Quarter Average Liquidity is less
than $15,000,000.
For the avoidance of doubt, and for the purposes only of illustrating the
operation of the above table, the following is a worked example of the use of
the table in determining the
18
Liquidity Quarterly Prepayment for a given period. If the Forty Five Day Average
Liquidity immediately succeeding a Calendar Quarter is $16,000,000 (which figure
can be located on the above table in the second row of the column marked "Forty
Five Day Average Liquidity") and the Calendar Quarter Average Liquidity for such
Calendar Quarter is $21,000,000 (which figure can be located on the above table
in the second column from the right in the box marked "Calendar Quarter Average
Liquidity"), then the dollar amount of the Liquidity Quarterly Prepayment shall
be 60% of the Excess Cash Flow for the preceding Calendar Quarter (which
percentage can be located at the intersection of the row and the column
identified above).
"Loan Documents" means this Agreement, the Term Notes, the Guaranties, the
Common Security and Intercreditor Agreement, each Mortgage (upon execution and
delivery thereof), the other Security Documents and each other agreement,
document or instrument delivered in connection herewith and therewith, whether
or not specifically mentioned herein or therein, each as amended, supplemented,
amended and restated or otherwise modified from time to time.
"London Business Day" means any Business Day on which dealings in U.S.
dollar deposits are transacted in the London interbank Eurodollar market.
"Margin Stock" has the meaning given to such term in Regulation U of the
F.R.S. Board or any regulation substituted therefor, as in effect from time to
time.
"Material Adverse Effect" means (i) any material adverse effect on the
business, assets, debt service capacity, liabilities (including environmental
liabilities but excluding any changes in the financial condition of the Borrower
resulting from the application of FAS 133 to the CRC Portfolio), financial
condition, operations or prospects of the Obligors and the Obligor Subsidiaries,
taken as a whole, (ii) any material adverse effect upon the ability of the
Borrower or any other Obligor, taken as a whole, to timely perform its
respective material obligations under the Loan Documents, the New Tranche B
Notes Indenture (and each of the guaranties thereunder), the New Tranche B
Notes, the New Tranche A Notes Indenture (and each of the guaranties
thereunder), the New Tranche A Notes or the Registration Rights Agreement, or
(iii) any impairment of the legality, validity or enforceability of this
Agreement, any other Loan Document, the New Tranche B Notes Indenture (and each
of the guaranties thereunder), the New Tranche B Notes, the New Tranche A Notes
Indenture (and each of the guaranties thereunder), the New Tranche A Notes or
the Registration Rights Agreement, or any material impairment of the rights,
remedies or benefits available, as the case may be, to the Administrative Agent,
the Collateral Agent or the Lenders under this Agreement or under any other Loan
Document or to the Collateral Agent, the New Tranche B Notes Indenture Trustee,
the New Tranche A Notes Indenture Trustee, the New Tranche B Notes Holders or
the New Tranche A Notes Holders under the Security Documents, the New Tranche B
Notes Indenture (and each of the guaranties thereunder), the New Tranche B
Notes, the New Tranche A Notes Indenture (and each of the guaranties
thereunder), the New Tranche A Notes or the Registration Rights Agreement.
19
"MEIP" means an equity incentive plan which shall become effective on the
Effective Plan Date or as soon as reasonably practicable thereafter,
substantially in the form contained in the Plan Supplement (as such term is
defined in the Plan of Reorganization).
"Minimum Quarterly Prepayment" means, in respect of each Calendar Quarter,
the principal amount set forth in the table immediately below determined by
reference to the Borrower's EBITDA for such Calendar Quarter as follows:
--------------------------------------------------------------------------------
BORROWER'S EBITDA FOR CALENDAR QUARTER PRINCIPAL AMOUNT
--------------------------------------------------------------------------------
less than $20,000,000 $0
--------------------------------------------------------------------------------
$20,000,000 or greater but less than
$25,000,000 $2,500,000
--------------------------------------------------------------------------------
$25,000,000 or greater but less than
$30,000,000 $5,000,000
--------------------------------------------------------------------------------
$30,000,000 or greater $7,500,000
--------------------------------------------------------------------------------
"Monthly Payment Date" means the last day of each calendar month or, if
any such day is not a Business Day, the next succeeding Business Day.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor rating
agency thereto.
"Mortgage" means each mortgage, deed of trust, or similar security
instrument, including the Quebec Mortgage and Security Agreement, substantially
in the forms in Exhibit C attached hereto, which from time to time affects any
property (including real property or immovable property situated in the United
States or in any Canadian province) that secures PCI's, the Borrower's or any
other Obligor's obligations under this Agreement (including the Guaranties), the
Term Notes, the New Tranche B Notes Indenture (including the guaranties
thereunder), the New Tranche B Notes, the New Tranche A Notes Indenture
(including the guaranties thereunder) and the New Tranche A Notes and each other
Loan Document, as such instruments may be amended, supplemented or otherwise
modified from time to time.
"Mortgaged Property" has the meaning given to it in the Common Security
and Intercreditor Agreement and, for the avoidance of doubt, includes the
immovable property, real property, improvements and all other collateral subject
to the Mortgages.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, other than a Canadian Benefits Plan, to which any Obligor,
Obligor Subsidiary or ERISA Affiliate is making or accruing an obligation to
make contributions, or with respect to which it has any liability.
20
"Multiple Employer Plan" means a Single Employer Plan in respect of which
any Obligor, Obligor Subsidiary or ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such Plan has been or were to be
terminated under Section 4041(c) or 4042 of the Code.
"Net Award" has the meaning given to it in the Common Security and
Intercreditor Agreement.
"Net Income" means, for any period and for any Person, the net income of
such Person determined in accordance with GAAP.
"Net Offering Proceeds" means the aggregate cash proceeds of a Qualified
Equity Offering, or of one or more such Qualified Equity Offerings together, net
of the direct, reasonable and customary costs (such as reasonable legal,
accounting and underwriting discounts/sales commissions) relating to such
Qualified Equity Offering, or one or more such Qualified Equity Offerings
together.
"Net Proceeds" means the aggregate cash proceeds received by any Obligor
or any Obligor Subsidiary in respect of any Asset Sale (including any non-cash
consideration received by any Obligor or any Obligor Subsidiary from any Asset
Sale that is converted into or sold or otherwise disposed of for cash within 45
days after the relevant Asset Sale), net of (i) the direct costs relating to
such Asset Sale (including, without limitation, reasonable legal, accounting and
investment banking fees, sales commissions and adjustments of severance costs),
(ii) any taxes paid or payable as a result thereof, (iii) all amounts required
to be applied to the repayment of, or representing the amount of permanent
reductions in the commitments relating to, Indebtedness (other than the Term
Loans) secured by a Lien on the asset or assets the subject of such Asset Sale
which Lien is permitted pursuant hereto, and (iv) any reserve for adjustment in
respect of the sale price of such asset or assets required by GAAP.
"New Common Stock" means the common stock of PCI authorized by and issued
pursuant to the Plan of Reorganization.
"New Debt" means the New Tranche A Term Notes, the New Tranche A Notes and
the New Tranche B Notes.
"New Other Secured Notes" has the meaning given it in the Plan of
Reorganization.
"New Other Secured Notes And Claims" means the Allowed Other Secured
Claims reinstated pursuant to the Bankruptcy Code and Plan of Reorganization and
the New Other Secured Notes.
"New Tranche A Notes" means indebtedness of Pioneer Americas LLC in an
aggregate principal amount of $45,421,874, as evidenced by the notes issued by
Pioneer Americas LLC pursuant to the New Tranche A Notes Indenture.
"New Tranche A Notes Holders" means the holders of the New Tranche A
Notes.
21
"New Tranche A Notes Indenture" means the indenture, dated as of December
31, 2001, by and among Pioneer Americas LLC, as issuer, the guarantors party
thereto and Xxxxx Fargo Bank Minnesota, National Association, as indenture
trustee, pursuant to which the New Tranche A Notes are issued, as may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"New Tranche A Notes Indenture Trustee" means the indenture trustee under
the New Tranche A Notes Indenture.
"New Tranche A Term Notes" means the indebtedness of the Borrower in an
aggregate principal amount of $4,578,126, which indebtedness is continued and
incurred by the Borrower pursuant to Section 2.1 hereof and is governed by the
terms of this Agreement.
"New Tranche B Notes" means indebtedness of PCI Chemicals Canada Company
in an aggregate principal amount of $150,000,000 as evidenced by the notes
issued by PCI Chemicals Canada Company pursuant to the New Tranche B Notes
Indenture.
"New Tranche B Notes Holders" means the holders of the New Tranche B
Notes.
"New Tranche B Notes Indenture" means the indenture, dated as of December
31, 2001, by and among PCI Chemicals Canada Company, as issuer, the guarantors
party thereto and Xxxxx Fargo Bank Minnesota, National Association, as indenture
trustee, pursuant to which the New Tranche B Notes are issued, as may be
amended, supplemented, amended and restated, or otherwise modified from time to
time.
"New Tranche B Notes Indenture Trustee" means the indenture trustee under
the New Tranche B Notes Indenture.
"Non-U.S. Lender" has the meaning given to it in Section 4.1(d).
"Obligations" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor (including under or pursuant to each Guaranty)
arising under or in connection with this Agreement, the Term Notes, and each
other Loan Document.
"Obligor" means the Borrower, each of the Guarantors and any other Person
(other than the Administrative Agent, the Collateral Agent, the New Tranche B
Notes Indenture Trustee, the New Tranche A Notes Indenture Trustee, any Lender,
any New Tranche B Notes Holder or any New Tranche A Notes Holder) obligated
under any Loan Document.
"Obligor Subsidiary" means, in respect of an Obligor, any Subsidiary of
such Obligor.
"Occupational Safety and Health Laws" means all national, federal, state,
provincial, regional, municipal or local statutes, laws, ordinances, codes,
rules, regulations, by-laws, policies, guidelines, directives, judgments, orders
or decrees
22
regulating, relating to, or imposing liability or standards of conduct
concerning, employee health and/or safety.
"Offering Proceeds" has the meaning given to it in Section 7.1.19.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, the President or a Vice President (regardless of vice
presidential designation), and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the relevant Obligor or Obligor
Subsidiary, as the case may be, and delivered to the Administrative Agent.
"Old Debt" means indebtedness under (i) those certain $175,000,000 9.25%
Senior Secured Guaranteed Notes due October 2007 issued by PCI Chemicals Canada,
Inc. pursuant to that certain Indenture, dated as of October 30, 1997, among PCI
Chemicals Canada, Inc., the Guarantors (as such term is defined therein) and the
United States Trust Company of New York ("USTC"), in its capacity as trustee and
as collateral agent, (ii) that certain Term Loan Agreement, dated as of October
30, 1997, among Pioneer Corporation of America, the Lenders (as such term is
defined therein), certain other parties and BNY Asset Solutions LLC, in its
capacity as administrative agent, (iii) those certain $200,000,000 9.25% Senior
Secured Guaranteed Notes due June 2007 issued by Pioneer Corporation of America
pursuant to that certain Indenture, dated as of June 17, 1997 among Pioneer
Corporation of America, the Subsidiary Guarantors (as such term is defined
therein) and USTC, in its capacity as trustee, and (iv) that certain Term Loan
Agreement, dated as of June 17, 1997, among Pioneer Corporation of America, the
Lenders (as such term is defined therein), certain other parties and BNY Asset
Solutions LLC, in its capacity as administrative agent.
"Opinion of Counsel" means a written opinion of counsel in form and
substance satisfactory to the Administrative Agent, who shall be counsel for the
relevant Obligor or Obligor Subsidiary, as the case may be, and who shall be
reasonably acceptable to the Required Lenders.
"Organizational Documents" means, in respect of any Obligor or other
Person, its certificate of incorporation and its by-laws (or equivalent
constitutive documents) and all shareholder agreements, voting trusts and
similar arrangements to which such Obligor or other Person is a party applicable
to any authorized shares, or other units or forms, of its Capital Stock.
"Participant" is defined in Section 11.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PCI" means Pioneer Companies, Inc., a Delaware corporation, in its
capacities as the parent of the Borrower and a Guarantor.
"Permitted Investments" means (i) any Eligible Investment, (ii) any
Investment in the Borrower or any other Obligor, (iii) Investments in existence
on the date hereof and
23
listed on Item 7.2.3 ("Existing Investments") of the Disclosure Schedule hereto,
(iv) Indebtedness permitted pursuant to Section 7.2.1(e) herein, (v) other
investments by any Obligor after the date hereof in joint ventures,
corporations, limited liability companies, partnerships or Obligor Subsidiaries
engaged in a Related Business that do not at any one time outstanding exceed
$5,000,000, (vi) promissory notes and other non-cash consideration received by
the Obligors or the Obligor Subsidiaries in connection with Asset Sales
permitted hereunder, (vii) Investments by PCI or the Borrower in Hedging
Obligations permitted hereunder, (viii) investments (including debt obligations
and Capital Stock) received by the Borrower or its Subsidiaries in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with customers and
suppliers arising in the ordinary course of business, in each case of the
Borrower or its Subsidiaries, or (ix) other Investments not permitted by the
foregoing clauses (i) through (viii) (including loans and advances to officers
or employees of the Borrower or its Subsidiaries) in an aggregate amount not to
exceed $500,000 at any one time outstanding.
"Permitted Issuance" means (i) the issuance by PCI of shares of Capital
Stock as dividends on issued and outstanding Capital Stock of the same class of
PCI or pursuant to any dividend reinvestment plan, (ii) the issuance by PCI of
options or other equity securities of PCI to outside directors, members of
management or employees of PCI or any Subsidiary of PCI, (iii) the issuance of
securities as interest or dividends on pay-in-kind debt or preferred equity
securities in accordance with the terms permitted hereunder and under the other
Loan Documents, (iv) the issuance to PCI or any of its Subsidiaries (or any
director, with respect to such director's qualifying shares) by any of PCI's
Subsidiaries of any of their respective Capital Stock, in each case with respect
to this clause (iv) to the extent such Capital Stock issued to PCI or such
Subsidiary is pledged to the Collateral Agent pursuant to the applicable Loan
Document, (v) the issuance by PCI of shares of its Capital Stock in connection
with an acquisition permitted under this Agreement, (vi) cash payments made in
lieu of fractional shares of PCI's Capital Stock in connection with an
acquisition referred to in clause (v) above in an aggregate amount not to exceed
$250,000 during the term of this Agreement, and (vii) the issuance by PCI of
additional shares of Capital Stock of PCI to infuse additional capital into PCI
and its Subsidiaries in an aggregate amount not to exceed $5,000,000 during the
term of this Agreement.
"Permitted Liens" means as of any particular time, any one or more of the
following:
(i) Liens for taxes, rates and assessments not yet past due or, if
past due, the validity of which is being contested in good faith by the
Obligors and the Obligor Subsidiaries by appropriate proceedings promptly
instituted and diligently conducted and against which such Obligors and
Obligor Subsidiaries have established appropriate reserves in accordance
with GAAP;
(ii) the Lien of any judgment rendered for an amount and for a
period not resulting in an Event of Default which is being contested in
good faith by the Obligors and the Obligor Subsidiaries by appropriate
proceedings promptly
24
instituted and diligently conducted and against which the Obligors and the
Obligor Subsidiaries have established appropriate reserves in accordance
with GAAP and which does not have a Material Adverse Effect;
(iii) other than in connection with Indebtedness, any Lien (other
than any Lien imposed by ERISA) arising in the ordinary course of business
(a) to secure payments of workers' compensation, unemployment insurance,
pension or other social security or retirement benefits, or to secure the
performance of bids, tenders, leases, progress payments, contracts (other
than for the payment of money) or to secure public or statutory
obligations of any Obligor or Obligor Subsidiary, or to secure surety or
appeal bonds to which any Obligor or Obligor Subsidiary is a party, (b)
imposed by law dealing with materialmen's, mechanics', workmen's,
repairmen's, warehousemen's, landlords', vendors' or carriers' Liens
created by law, or deposits or pledges which are not yet due or, if due,
the validity of which is being contested in good faith by the Obligors and
the Obligor Subsidiaries by appropriate proceedings promptly instituted
and diligently conducted and against which the Obligors and the Obligor
Subsidiaries have established appropriate reserves in accordance with
GAAP, and (c) rights of financial institutions to setoff and chargeback
arising by operation of law.
(iv) servitudes, licenses, easements, encumbrances, restrictions,
rights-of-way and rights in the nature of easements or similar charges,
minor title defects and irregularities which shall not in the aggregate
materially adversely impair the use of the subject property by any Obligor
or Obligor Subsidiary;
(v) zoning and building by-laws and ordinances, municipal by-laws
and regulations, and restrictive covenants, which do not materially
interfere with the use of the subject property by any Obligor or any
Obligor Subsidiary as such property is used as of the date hereof;
(vi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in connection with
the importation of goods by the Borrower or its Subsidiaries;
(vii) deposits to secure statutory obligations in the form of excise
taxes;
(viii) Liens arising from precautionary UCC financing statement
filings in respect of operating leases or consignment arrangements entered
into by the Borrower or its Subsidiaries with a supplier of goods in the
ordinary course of business, which Liens are customarily filed as
precautionary liens by such supplier of goods in the ordinary course of
its business;
(ix) any extension, renewal, substitution or replacement (or
successive extensions, renewals, substitutions or replacements), as a
whole or in part, of any of the Liens referred to in clauses (i) through
(viii) of this definition or the Indebtedness secured thereby; provided
that (a) such extension, renewal, substitution or replacement Lien is
limited to that portion of the property or assets,
25
now owned or hereafter acquired, that secured the Lien prior to such
extension, renewal, substitution or replacement Lien, and (b) the
Indebtedness secured by such Lien (assuming all available amounts were
borrowed) at such time is not increased;
(x) Liens (a) securing obligations owed in respect of Allowed
Secured Tax Claims and obligations owed in respect of Allowed Other
Secured Claims reinstated in accordance with the Bankruptcy Code and
pursuant to the Plan of Reorganization and listed in Item 7.2.2 ("Existing
Liens") of the Disclosure Schedule, (b) securing the Obligations, (c) on
accounts receivable, inventory and related general intangibles securing
obligations under the Exit Facility, (d) securing the obligations under
the Transaction Documents, (e) securing obligations under New Other
Secured Notes (to the extent the corresponding Allowed Other Secured
Claims shall not have been reinstated), and (f) any other Lien granted by
the Obligors as permitted by the Plan of Reorganization;
(xi) Liens on assets or property of the Borrower, or on assets or
property of Subsidiaries of the Borrower, to secure the payment of all or
a part of the purchase price of assets or property acquired or constructed
in the ordinary course of business after the Closing Date; provided,
however, that (a) the aggregate principal amount of Indebtedness secured
by such Liens does not exceed the original cost or purchase price of the
assets or property so acquired (including the reasonable and customary
costs associated with the acquisition of such acquired assets) or
constructed, (b) the Indebtedness secured by such Liens is otherwise
permitted to be incurred hereunder, (c) such Liens do not encumber any
other assets or property of any Obligor or Obligor Subsidiary, and (d) the
Indebtedness secured by such Liens may not be created more than 100 days
after the later of the acquisition, completion of construction, repair,
improvement, addition or commencement of full operation of the property
subject to such Liens;
(xii) Liens on the assets or property permitted to be acquired
hereby by the Borrower or any of its Subsidiaries after the date hereof;
provided, however, that (a) such Liens existed on the date such assets or
property were acquired and were not incurred as a result of or in
anticipation of such acquisition, and (b) such Liens do not extend to or
cover any property or assets of any Obligor or Obligor Subsidiary, other
than the property or assets so acquired;
(xiii) Liens securing Indebtedness which is incurred to refinance
Indebtedness which has been secured by a Lien permitted hereunder and
which is permitted to be refinanced hereunder; provided, however, that
such Liens do not extend to or cover any assets or property of any Obligor
or any Obligor Subsidiary not securing the Indebtedness so refinanced;
(xiv) Liens on any property or assets of any Obligor or Obligor
Subsidiary that is subject (and only subject) to a Sale and Leaseback
Transaction; provided, however, that the aggregate principal amount of
Attributable
26
Indebtedness in respect of all Sale and Leaseback Transactions then
outstanding does not at the time such a Lien is incurred exceed
$1,000,000;
(xv) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Borrower or any of its Subsidiaries in the ordinary course of business
in accordance with past practices of the Borrower or any of its
Subsidiaries;
(xvi) Liens arising out of barter transactions or arrangements for
the sale or purchase of goods or services entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business in accordance
with past practices of the Borrower or any of its Subsidiaries;
(xvii) Liens in favor of any Obligor or its Obligor Subsidiaries;
and
(xviii) In addition to the Liens referred to in clauses (i) through
(xvii) of this definition of "Permitted Liens", Liens securing
Indebtedness of the Obligors and Obligor Subsidiaries, taken together, in
an aggregate principal amount not to exceed $200,000 at any one time
outstanding; provided, however, that such Liens secure Indebtedness
permitted by this Agreement; and provided further, that such Indebtedness
is permitted pursuant to the terms of this Agreement to be secured by a
Lien.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"Pipeline" has the meaning given to it in the Common Security and
Intercreditor Agreement.
"Pioneer Companies" is defined in the preamble of this Agreement.
"Plan" means any Single Employer Plan or Multiemployer Plan.
"Plan of Reorganization" means the Debtors' Amended Joint Plan of
Reorganization under Chapter 11 of the Bankruptcy Code, dated September 21,
2001, filed with the United States Bankruptcy Court, Southern District of Texas,
Houston Division, Case No. 01-38259-H3-11, on behalf of Pioneer Companies, Inc.,
Pioneer Corporation of America, Imperial West Chemical Co., Kemwater North
America Company, PCI Chemicals Canada, Inc./PCI Chimie Canada Inc., Pioneer
Americas, Inc., Pioneer (East), Inc., Pioneer Water Technologies, Inc., Pioneer
Licensing, Inc., and KWT, Inc.
"Post Petition Interest" is defined in Section 8.1.6(b).
"Qualified Equity Offering" means an offer and sale of common stock (which
is Capital Stock) of PCI made on a primary basis by PCI pursuant to a
registration statement that has been declared effective by the Commission or any
successor thereto
27
pursuant to the Securities Act (other than a registration statement on Form S-8
or otherwise relating to equity securities issuable under any employee benefit
plan of any Obligor), or an offer and sale of common stock (which is Capital
Stock) of PCI which may be made pursuant to an exemption from registration under
the Securities Act, in each case, only to the extent permitted pursuant to
clause (vii) of the definition of "Permitted Issuance."
"Quebec Mortgage and Security Agreement" means a deed of hypothec executed
by an authorized representative of PCI Chemicals Canada Company in respect of
Collateral located in Quebec, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Reference Banks" means leading banks engaged in transactions in
Eurodollar deposits with an established place of business in London, England and
which have been designated by the Administrative Agent.
"Refinancing Indebtedness" is defined in clause (l) of Section 7.2.1.
"Registration Rights Agreement" has the meaning given to it in the Plan of
Reorganization.
"Related Business" means the manufacture or distribution of chlorine,
caustic soda, bleach, hydrochloric acid and other chlorides and aluminum
sulfate, and in lines of business reasonably related thereto.
"Release" means any release, discharge, deposit, pumping, pouring,
emptying, injecting, escaping, leaching, migrating, dumping, seepage, spill,
leak, flow, discharge, disposal or emission.
"Reserve Interest Rate" means, with respect to any date upon which the
Administrative Agent is required to determine the LIBOR pursuant to this
Agreement, the rate per annum that the Administrative Agent determines to be
either the arithmetic mean, rounded to the nearest whole multiple of 1/16%, of
the three-month U.S. dollar lending rates which leading New York City banks
selected by the Administrative Agent are quoting on such date to the principal
London offices of leading banks in the London interbank market or, in the event
that the Administrative Agent cannot determine the arithmetic mean, the lowest
three-month U.S. dollar lending rate which such New York City banks selected by
the Administrative Agent are quoting on such date to leading European banks.
"Required Lenders" means the Tranche A Majority Holders (as such term is
defined in the Common Security and Intercreditor Agreement).
"Restoration" has the meaning given to it in the Common Security and
Intercreditor Agreement.
"Restricted Payments" is defined in Section 7.2.3.
28
"Rollover Amount" for a Fiscal Year of the Borrower is the amount in
dollars equal to the Cumulative Capital Expenditure Limit for such Fiscal Year
minus the Cumulative Capital Expenditures.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw Hill
Companies, Inc. or any successor rating agency thereto.
"Sale and Leaseback Transaction", with respect to any Person, means any
arrangement with another Person for the leasing of any real or tangible personal
property, which property has been or is to be sold or transferred or initially
leased by such Person to such other Person in contemplation of such leasing
(including a lease and leaseback transaction).
"Security Agreement Supplement" means the "Security and Intercreditor
Supplement" as such term is defined in the Common Security and Intercreditor
Agreement.
"Secured Parties" has the meaning given to it in the Security Documents.
"Securities Act" means the United States Securities Act of 1933, as
amended from time to time.
"Security Documents" means (i) each Mortgage, (ii) the Common Security and
Intercreditor Agreement, (iii) the Canadian Security Agreements, and (iv) all
security agreements, mortgages, deeds of trust, pledges, collateral assignments,
UCC filings, financing statements and registrations or any other instrument
evidencing or creating any security interest in favor of the Collateral Agent in
all or any portion of the Collateral, in each case as amended, supplemented,
amended or restated, or otherwise modified from time to time.
"Single Employer Plan" means a single-employer plan, as defined in Section
4001(a)(15) of ERISA, other than a Canadian Benefits Plan, which any Obligor,
Obligor Subsidiary or ERISA Affiliate maintains, administers, contributes to or
is required to contribute to, or under which any Obligor, Obligor Subsidiary or
ERISA Affiliate has any liability.
"Stated Maturity Date" means, in the case of all Term Loans, December 31,
2006.
"Subordinated Indebtedness" means Indebtedness of the Borrower or any
Guarantor subordinated in right of payment to the Obligations.
"Subordinated Obligations" is defined in Section 8.1.6.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors, under ordinary circumstances,
is at the time owned, directly or indirectly, by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries
or (ii) any other Person of which at least a majority
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of voting interest, under ordinary circumstances, is at the time owned, directly
or indirectly, by such Person, by such Person and one or more of its
Subsidiaries or by one or more of such Person's Subsidiaries, whether or not
such corporation or other Person is incorporated or organized in or under the
laws of the United States of America or any state thereof.
"Taxes" is defined in Section 4.1.
"Telerate Screen Page 3750" means the display designated on page 3750 on
the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank rates of major banks).
"Term Loans" is defined in Section 2.1.
"Term Note" means a promissory note of the Borrower payable to the order
of any Lender, in the form of Exhibit A hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term Loans, and also means all other promissory notes accepted from time to time
in substitution therefor or renewal thereof.
"Tranche A Documents" means collectively, the New Tranche A Notes
Indenture (including the guaranties thereunder), the New Tranche A Notes, the
Common Security and Intercreditor Agreement, each Mortgage (upon execution and
delivery thereof), the other Security Documents and each other agreement,
document or instrument delivered in connection therewith, whether or not
specifically mentioned herein or therein, each as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Tranche B Documents" means collectively, the New Tranche B Notes
Indenture (including the guaranties thereunder), the New Tranche B Notes, the
Common Security and Intercreditor Agreement, each Mortgage (upon execution and
delivery thereof), the other Security Documents and each other agreement,
document or instrument delivered in connection therewith, whether or not
specifically mentioned herein or therein, each as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Transaction Documents" means the various documents, instruments and
agreements, implementing the Plan of Reorganization other than the Loan
Documents (except for the Security Documents which shall also be "Transaction
Documents"), including the Tranche A Documents, the Tranche B Documents, the
Amended PCI Certificate of Incorporation (as such term is defined in the Plan of
Reorganization), the Amended PCI By-laws (as such term is defined in the Plan of
Reorganization), the amended by-laws and certificates of incorporation of each
of the Subsidiaries of PCI and of the Borrower, the Exit Facility, the MEIP, the
New Common Stock, the New Other Secured Notes And Claims, the Shelf Registration
Statements (as such term in defined in the Plan of Reorganization), the
Registration Rights Agreement, the documents relating to the Canadian Corporate
Reorganization and all other agreements, documents, instruments, certificates,
filings, consents, approvals, Board of Directors resolutions and
30
opinions executed, delivered or furnished pursuant to or in connection with the
implementation of the Plan of Reorganization, each as amended, supplemented,
amended and restated or otherwise modified from time to time.
"Trust Moneys" means all cash or Eligible Investments received by the
Collateral Agent: (i) in exchange for the release of property from the Lien of
any of the Security Documents, including the Collateral Proceeds, or (ii) as
compensation for or proceeds of the sale of all or any part of the Collateral
taken by eminent domain or purchased by, or sold pursuant to any order of, a
governmental authority or otherwise disposed of, including any Net Award, or
(iii) as proceeds of insurance upon any, all or part of the Collateral (other
than any liability insurance proceeds payable to the Collateral Agent for any
loss, liability or expense incurred by it), including any Insurance Proceeds, or
(iv) as proceeds of any other sale or other disposition of all or any part of
the Collateral by or on behalf of the Collateral Agent or any collection,
recovery, receipt, appropriation or other realization of or from all or any part
of the Collateral pursuant to the Security Documents or otherwise, or (v) for
application under this Agreement as provided in this Agreement or any other
Security Document, or whose disposition is not otherwise specifically provided
for in this Agreement or in any other Security Document, as the case may be.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York.
"Unfunded Pension Liabilities" means the excess of current liability over
the current value of assets as calculated in the most recent actuarial valuation
report with respect to a Single Employer Plan.
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Xxxxx Fargo" is defined in the preamble to this Agreement.
"Wholly-Owned Subsidiary" means, with respect to any Person, a Subsidiary
of such Person all of the outstanding Capital Stock or other ownership interests
of which (other than capital stock constituting directors' qualifying shares or
interests held by directors or shares or interests required to be held by
foreign nationals, to the extent mandated by applicable law) are owned by such
Person or by one or more Wholly-Owned Subsidiaries of such Person.
"Withdrawal Liability" has the meaning set forth under Part I of Subtitle
E of Title IV of ERISA.
"Working Capital" means, for any period, with respect to any Person, (i)
its consolidated current assets (excluding cash and cash equivalents), minus
(ii) its
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consolidated current liabilities (excluding current maturities in respect of its
long term Indebtedness), determined in accordance with GAAP.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Disclosure Schedule and in each other
Loan Document, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder shall be made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in United States Dollars and in
accordance with those United States generally accepted accounting principles
("GAAP"), as in effect from time to time and, unless otherwise expressly
provided herein, shall be computed or determined on a consolidated basis and
without duplication.
SECTION 1.5. Use of UCC Terms. Unless the context otherwise requires, the
terms "accounts receivable", "inventory" and "general intangibles" shall have
the meanings ascribed thereto in the UCC.
SECTION 1.6. Officers' Certificates and Opinions. Every Officers'
Certificate or Opinion of Counsel with respect to compliance with a covenant or
condition provided for in this Agreement or any other Loan Document shall be
addressed to the Administrative Agent and each of the Lenders and shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinion contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such covenant or condition has been complied with.
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Absent any actual knowledge to the contrary, the Administrative Agent may rely
on any such certificate without further inquiry.
ARTICLE II
NEW DEBT, PROCEDURES AND NOTES
SECTION 2.1. Old Debt for New Debt. On the terms and subject to the
conditions of this Agreement (including Article V), on the Closing Date, in
exchange for the cancellation and extinguishment of the Old Debt pursuant to and
in accordance with the Plan of Reorganization, the Borrower shall (together with
such other actions as are required of the Borrower or as are deemed to occur
pursuant to the Plan of Reorganization, including the issuance of the New
Tranche A Notes, the New Tranche B Notes and the New Common Stock) incur (and
shall without more be deemed to have continued and incurred) indebtedness in an
aggregate principal amount of $4,578,126 hereunder, which indebtedness shall be
owed by the Borrower to each Lender in an amount equal to the amount distributed
to each Lender pursuant to, and in accordance with, the Plan of Reorganization
and set forth opposite such Lender's name on its signature page hereto (such
amount relative to such Lender, its "Term Loans", it being acknowledged by the
parties hereto that each Lender's signature on the signature page of that
certain election form distributed to holders of Old Debt and substantially in
the form of Exhibit H hereto, which signature pages and signatures are attached
to, and form a part of, this Agreement, shall constitute the signature of such
Lender to this Agreement). No amounts paid or prepaid with respect to any Term
Loans may be reborrowed.
SECTION 2.2. Lenders Not Permitted or Required to Make Loans. No Lender
shall be permitted or required to, and no Obligor shall request any Lender to
make any loan to the Borrower, to any other Obligor or to any Affiliate of any
Obligor under or pursuant to this Agreement other than the exchange of Old Debt
for New Debt as set forth in Section 2.1.
SECTION 2.3. Term Notes. Each Lender's Term Loans shall be evidenced by a
Term Note payable to the order of such Lender in a principal amount equal to
such Lender's Term Loan. The Borrower hereby irrevocably authorizes each Lender
to make (or cause to be made) appropriate notations on the grid attached to such
Lender's Term Note (or on any continuation of such grid), which notations, if
made, shall evidence, inter alia, the date of, the outstanding principal amount
of, and the interest rate and Interest Period applicable to the Term Loans
evidenced thereby. Such notations shall be conclusive and binding on the
Borrower absent manifest error; provided, however, that the failure of any
Lender to make any such notations in respect of any Term Loans shall not limit
or otherwise affect any Obligations of the Borrower or any other Obligor.
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ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application.
SECTION 3.1.1 Repayments and Prepayments. The Borrower shall repay in full
the unpaid principal amount of each Term Loan upon the Stated Maturity Date. The
Borrower:
(a) may, from time to time on any Business Day prior to the Stated
Maturity Date, make a voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Term Loans upon notice to the
Administrative Agent, which notice shall specify the date of prepayment
and the amount of prepayment; provided, however, that
(i) any such prepayment shall be made pro rata among
outstanding Term Loans of all Lenders;
(ii) all such voluntary prepayments shall require at least one
Business Day's notice; and
(iii) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $1,000,000 or any larger integral
multiple of $1,000,000 or in the aggregate principal amount of all
Term Loans then outstanding;
(b) shall make a mandatory prepayment of the Term Loans on account
of Net Proceeds or Collateral Proceeds in accordance with Section 7.2.6;
(c) shall make a mandatory prepayment of the Term Loans on account
of Minimum Quarterly Prepayments or Liquidity Quarterly Prepayments and
comply with the other covenants set forth in this Section 3.1.1(c) as
follows:
(i) within 45 days of the end of each Calendar Quarter in the
Borrower's Fiscal Year 2001 and 2002, the Borrower shall make a
mandatory prepayment of the Term Loans pro rata among outstanding
Term Loans of all Lenders, together with accrued interest to the
date of such prepayment on the principal amount prepaid, in an
amount equal to the Minimum Quarterly Prepayment for such Calendar
Quarter;
(ii) within 60 days of the end of each Calendar Quarter in
each of the Borrower's Fiscal Years form and including Fiscal Year
2003 and up to and including Fiscal Year 2006, the Borrower shall
make a mandatory prepayment of the Term Loan pro rata among
outstanding Term Loans of all the Lenders, together with accrued
interest to the date of such prepayment on the principal amount
prepaid, in an amount equal to the
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greater of the Liquidity Quarterly Prepayment for such date and the
Minimum Quarterly Prepayment for such Calendar Quarter; and
(iii) in respect of each mandatory prepayment made by or on
behalf of the Borrower pursuant to Section 3.1.1.(c)(i) or Section
3.1.1(c)(ii), the Borrower shall provide to the Administrative Agent
a certificate of the chief financial officer of the Borrower
certifying the amount of the Minimum Quarterly Prepayment or the
Liquidity Quarterly Prepayment and setting out in reasonable detail
the calculation and methods used in determining the Minimum
Quarterly Prepayment and/or the Liquidity Quarterly Prepayment, as
the case may be, and such other information as the Trustee may
reasonably request.
(d) shall, on the Stated Maturity Date, make a scheduled repayment
of all the outstanding principal amount of all Term Loans (in each case as
such amounts may have otherwise been reduced by prepayment by the Borrower
pursuant to this Agreement);
(e) shall make a mandatory prepayment of all the outstanding
principal amount of all the Term Loans upon the occurrence of a Change of
Control;
(f) shall, immediately upon the acceleration of the Stated Maturity
Date of any Term Loans pursuant to Section 9.2 or Section 9.3, repay all
outstanding Term Loans, unless, pursuant to Section 9.3, only a portion of
all Term Loans are so accelerated (in which case the portion so
accelerated shall be so prepaid); and
(g) shall make a mandatory prepayment of the Term Loans on account
of the Net Offering Proceeds in accordance with Section 7.1.19.
Each prepayment of any Term Loans made pursuant to this Section shall be without
premium or penalty and any prepayment pursuant to Sections 3.1.1(a), (b) and (g)
shall be subject to the terms of the Common Security and Intercreditor Agreement
and Section 11.16 hereof.
SECTION 3.1.2 Application. Each prepayment of Term Loans made pursuant to
clause (b), (c) or (g) of Section 3.1.1 shall be applied to the outstanding
principal amount of all Term Loans, except that, (i) with respect to the amount
of any such prepayment, the Administrative Agent will as soon as is practicable
(but in any event (A) no later than the date on which the Borrower has provided
such prepayment to the Administrative Agent so long as the Administrative Agent
receives such funds no later than 11.00 A.M., New York City time, on such date
or (B) no later than the next Business Day if received thereafter) provide
notice of such prepayment to each Lender prior to the distribution of the funds
from such prepayment, and (ii) each Lender will have, in its sole discretion,
the right to refuse any such prepayment by giving written notice of such refusal
to the Administrative Agent within three Business Days after such Lender's
receipt of notice from the Administrative Agent of such prepayment.
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SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of the Term Loans shall accrue at the rates and be payable in accordance
with this Section 3.2.
SECTION 3.2.1 Rates. Each Term Loan shall accrue interest on the unpaid
principal amount thereof for each day at a rate per annum equal to the sum of
the three-month LIBOR plus 3.50% per annum until such Term Loan is paid in full.
SECTION 3.2.2 Post-Maturity Rates. Upon the occurrence and continuance of
(a) any Default described in Section 9.1.1, or (b) any Event of Default which
shall remain uncured for 10 days (without giving effect to any grace period
therefor), all Term Loans shall bear, and the Borrower shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) thereon
at a rate per annum equal to the rate that would otherwise be applicable to such
Term Loans pursuant to Section 3.2.1 plus 2.0% on each Monthly Payment Date in
arrears.
SECTION 3.2.3 Payment Dates. Interest accrued on each Term Loan shall be
payable by the Borrower, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in part,
of principal outstanding on such Term Loan;
(c) on March 31, 2002, and quarterly thereafter on each June 30,
September 30, December 31 and March 31 of each year up to and including
September 30, 2006; and
(d) on that portion of any Term Loans the Stated Maturity Date of
which is accelerated pursuant to Section 9.2 or Section 9.3, immediately
upon such acceleration.
Interest accrued on Term Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in this
Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1 Administrative Agent Fee. The Borrower agrees to pay an
annual administration fee to the Administrative Agent, for its own account, in
the amounts mutually agreed to between the Borrower and the Administrative
Agent, payable in advance on the Closing Date and annually thereafter for so
long as this Agreement shall remain in effect.
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ARTICLE IV
CERTAIN OTHER PROVISIONS
SECTION 4.1. Taxes. (a) All payments by the Borrower of principal of, and
interest on, the Term Loans and all other amounts payable hereunder (including
any payment by any of the Guarantors) shall be made free and clear of and
without deduction for any present or future income, excise, stamp, documentary,
property or franchise taxes and other taxes, fees, duties, levies, imposts,
deductions, withholdings or other charges of any nature whatsoever imposed by
any taxing authority, including, without limitation, any penalties, interest or
additions to tax with respect thereto, but excluding franchise taxes and taxes
imposed on or measured by any Lender's net income or receipts (such non-excluded
items being called "Taxes"). In the event that any withholding or deduction from
any payment to be made hereunder by the Borrower or any Guarantor is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Borrower or such Guarantor will: (i) pay directly to the relevant authority
the full amount required to be so withheld or deducted; (ii) promptly forward to
the Administrative Agent an official receipt or other documentation satisfactory
to the Administrative Agent evidencing such payment to such authority; and (iii)
pay to the Administrative Agent for the account of the Lenders such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required; provided, however,
that no Obligor shall be required to increase any such amount payable to any
Lender with respect to any such Taxes that are (A) attributable to such Lender's
failure to comply with the requirements of this Section, (B) withholding taxes
imposed on amounts payable to such Lender if the obligation to withhold existed
on such date, or (C) withholding taxes imposed solely as a result of any action
or inaction of the Lender occurring after the date the Lender becomes a Lender
other than a change in law or regulation or the introduction of any law or
regulation or a change in interpretation or administration of any law.
(b) Moreover, if any Taxes are directly asserted against the
Administrative Agent or any Lender with respect to any payment received by the
Administrative Agent or such Lender hereunder, the Administrative Agent or such
Lender may pay such Taxes and the Borrower will promptly pay such additional
amounts (including any penalties, interest or expenses due solely by reason of
the action or inaction of the Borrower) as is necessary in order that the net
amount received by such person after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such person would have
received had not such Taxes been asserted subject to the limitation in Section
4.1(c).
(c) If the Borrower (or in the case of a direct payment pursuant to
the terms of this Agreement by any Guarantor, such Guarantor) fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent, for the account of the respective Lenders, or the Lenders,
as the case may be, the required receipts or other required documentary
evidence, the Borrower, or such Guarantor, shall indemnify the Lenders for any
incremental Taxes, interest or penalties that may become
37
payable by any Lender as a result of any such failure. For purposes of this
Section 4.1, a distribution hereunder by the Administrative Agent or any Lender
to or for the account of any Lender shall be deemed a payment by the Borrower.
The agreements in this Section 4.1 shall survive termination of this Agreement
and payment of the Term Loans and all other amounts payable hereunder for a
period of nine (9) months thereafter.
(d) Each Lender (or any Assignee Lender) that is not a United States
person described in Section 7701(a)(30) of the Code (such Lender or Assignee
Lender being a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from which
the related participation shall have been purchased) two copies of either (i)
Internal Revenue Service Form W-8BEN or Internal Revenue Service Form W-8ECI, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
or (ii) in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest," an Internal Revenue Service Form W-8BEN, or
any subsequent versions thereof or successors thereto and an annual certificate
representing, under penalty of perjury, that such Non-U.S. Lender is not a
"bank" for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code), properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by the Borrower
under this Agreement and the other Loan Documents. Such forms shall be delivered
by each Non-U.S. Lender on or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation) and, if necessary, obtain any
extensions of time reasonably requested by the Borrower or Administrative Agent
for filing and completing such forms. In addition, each Non-U.S. Lender shall
deliver such forms on or before the expiration or obsolescence and promptly upon
the invalidity of any form previously delivered by such Non-U.S. Lender and
after the occurrence of any event requiring a change in the most recently
provided form and, if necessary, obtain any extensions of time reasonably
requested by the Borrower or the Administrative Agent for filing and completing
such forms. Each Non-U.S. Lender agrees, to the extent legally entitled to do
so, upon reasonable request by the Borrower, to provide to the Borrower (for the
benefit of the Borrower and the Administrative Agent) such other forms as may be
reasonably required in order to establish the legal entitlement of such Lender
to an exemption from withholding with respect to payments of interest under this
Agreement or the other Loan Documents; provided that in determining the
reasonableness of such a request, such Lender shall be entitled to consider the
cost of complying with such request (to the extent unreimbursed by the Borrower)
that would be imposed on such Lender. Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this Section 4.1(d), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 4.1(d) that
such Non-U.S. Lender is not legally able to deliver.
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(e) Any Lender claiming any additional amounts payable pursuant to
this Section 4.1 shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
applicable lending office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that would be payable
or may thereafter accrue and would not, in the sole determination of such
Lender, be otherwise disadvantageous to such Lender in any manner.
SECTION 4.2. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by or on behalf of the Borrower pursuant to this
Agreement, the Term Notes or any other Loan Document shall be made by the
Borrower to the Administrative Agent for the pro rata account of the Lenders and
for the account of the Administrative Agent, as applicable. All such payments
required to be made to the Lenders or the Administrative Agent (whether for the
account of the Administrative Agent or the Lenders or both) shall be made,
without setoff, deduction or counterclaim, not later than 12:00 p.m. (New York
City time) on the date due, in same day or immediately available funds, to such
account as the Administrative Agent shall specify from time to time by notice to
the Borrower. Funds received after that time shall be, deemed to have been
received by the Administrative Agent on the next succeeding Business Day. The
Administrative Agent shall promptly remit in same day funds to each Lender its
share, if any, of such payments received by the Administrative Agent for the
account of such Lender. All interest and fees shall be computed on the basis of
the actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days. Whenever any payment to be made shall otherwise be
due on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment.
SECTION 4.3. Sharing of Payments. If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Term Loan in excess of its pro rata share of
payments then or therewith obtained by all Lenders entitled thereto, such Lender
shall purchase from the other Lenders such participations in the Term Loans made
by them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided, however,
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of (a) the amount of such selling Lender's required repayment
to the purchasing Lender in respect of such recovery, to (b) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section may, to the full extent permitted by law,
exercise all its rights of payment (including pursuant to Section 4.4) with
respect to such participation as fully as if such Lender were the direct
39
creditor of the Borrower in the amount of such participation. If, on or after
the Closing Date, under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 4.4. Setoff. Each Lender shall, upon the occurrence of any Event
of Default described in clause (a) or (b) of Section 9.1.10 with respect to any
Obligor or, with the consent of the Required Lenders, upon the occurrence of any
other Event of Default, to the full extent permitted by law, have the right to
appropriate and apply to the payment of the Obligations then owing to it
(whether or not then due), and (as security for such Obligations) the Borrower
and each Guarantor hereby grant to each Lender a continuing security interest
in, any and all balances, credits, deposits, accounts or moneys of the Borrower
and each Guarantor then or thereafter maintained with or otherwise held by such
Lender; provided, however, that any such appropriation and application shall be
subject to the provisions of Section 4.3. Each Lender agrees promptly to notify
the Borrower (or if applicable, the relevant Guarantor) and the Administrative
Agent after any such setoff and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Lender may have.
ARTICLE V
CONDITIONS TO EFFECTIVENESS OF AGREEMENT
Each Lender's obligation to exchange Old Debt for New Debt and its other
obligations in respect of the Term Loans, and the effectiveness of this
Agreement, shall be subject to the prior or concurrent satisfaction of each of
the conditions precedent set forth in this Article V (the latest date upon which
all of such conditions precedent are satisfied, the "Closing Date"). The Closing
Date shall be no later than December 31, 2001, shall be specified in an
Officer's Certificate of PCI and the Borrower and shall be agreed to by the
Creditor's Committee Lenders and the Administrative Agent.
SECTION 5.1. Resolutions etc. The Lenders and the Administrative Agent
shall have received from each Obligor a certificate, dated the Closing Date, of
its secretary or assistant secretary (a) stating that attached thereto is a true
and complete copy of such Obligor's by-laws or equivalent organizational
document as in effect on the Closing Date and at all times since the date of the
resolutions described in clause (b) of this Section 5.1, (b) stating that
attached thereto is a true and complete copy of resolutions duly adopted by its
Board of Directors authorizing the execution, delivery and performance of each
Loan Document to be executed by it and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (c) stating
that the certificate of incorporation or equivalent constitutive document of
such Obligor has not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to Section 5.1.1
hereof, and (d) as to the incumbency
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and signatures of those of its officers authorized to act with respect to each
Loan Document executed by it, upon which certificate the Administrative Agent
and each Lender may conclusively rely until it shall have received a further
certificate of the secretary or assistant secretary of such Obligor canceling or
amending such prior certificate.
SECTION 5.1.1 Secretary of States' Certificates. The Lenders and the
Administrative Agent shall have received a copy of the certificate of
incorporation or other equivalent constitutive document of each Obligor, as in
effect on the Closing Date, certified by the Secretary of State of its
jurisdiction of incorporation or organization, and a certificate from such
Secretary of State as to the good standing of such Obligor, in each case as of a
date reasonably close to the Closing Date.
SECTION 5.2. Loan Documents. The Lenders shall have received this
Agreement, duly executed and delivered by each of the Administrative Agent, the
Lenders, the Borrower, PCI and the other Guarantors and shall have received each
other Loan Document duly executed and delivered by each of the parties thereto.
SECTION 5.3. Delivery of Term Note. Each Lender shall have received its
Term Note duly executed and delivered by the Borrower and the Guarantors.
SECTION 5.4. Mortgages of Real Property Situated in the United States. PCI
or the Borrower shall have caused to be delivered to the Lenders, with copies to
the Administrative Agent and the Collateral Agent, the following documents and
instruments with regard to each Mortgaged Property located in Henderson, Nevada,
St. Xxxxxxx, Louisiana (including the Pipeline), Tacoma, Washington, Antioch,
California, and Pittsburg, California, providing for first priority mortgages:
(a) a Mortgage, duly executed by the owner of the applicable
Mortgaged Property, and dated as of the Closing Date, together with
evidence of the due recordation thereof in the appropriate recording
office of the political subdivision where such Mortgaged Property is
situated (or evidence reasonably satisfactory to the Creditors' Committee
Lenders that each Mortgage, as appropriate, has been delivered to a
nationally-recognized title insurance company for recording and that all
fees, taxes and other expenses associated with such recording have been
paid);
(b) a mortgagee policy of title insurance (or endorsement thereto,
as appropriate) in favor of the Collateral Agent, issued by such title
insurance company, in such amounts, with such endorsements, affirmative
coverages, and reinsurance agreements as the Creditors' Committee Lenders
shall reasonably require, and otherwise in form and substance reasonably
satisfactory to the Creditors' Committee Lenders, insuring each Mortgage
as a first lien on the property and interests covered thereby subject only
to such other matters as are acceptable to the Collateral Agent, together
with evidence that all premiums in respect of such policies have been paid
in full and true and complete copies of all documents referred to therein;
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(c) certified perimeter surveys of the real property covered by each
Mortgage by registered surveyors as of a date and in form and substance
acceptable to the Creditors' Committee Lenders, bearing legal descriptions
conforming exactly to those contained in the title insurance policy
referred to in the immediately preceding clause (b); indicating the length
of exterior boundary lines of the Mortgaged Property, locations of all
buildings, utility or other easements, showing the location of all
easements of record, encroachments, if any, and means of access to the
real property from a public way; and the surveyor's original certification
to the Collateral Agent and the title insurance company issuing the
policies described in the preceding clause (b) of this Section 5.4 and in
the case of surveys with respect to the Mortgaged Properties in Henderson,
Nevada, and St. Xxxxxxx, Louisiana, such "affidavits of no change" as may
be required by such title companies to omit the standard survey exception
from such title insurance policies or endorsements;
(d) evidence reasonably satisfactory to the Creditors' Committee
Lenders of all filings of financing statements under the UCC necessary or
desirable to perfect the lien granted by each Mortgage, together with such
searches of UCC, judgment and tax lien records as the Creditors' Committee
Lenders shall reasonably require;
(e) policies or certificates of insurance with respect to the
insurance required to be maintained in respect of the property covered by
each Mortgage pursuant to the terms of the Common Security and
Intercreditor Agreement, naming the Collateral Agent as loss payee or
additional named insured, as appropriate;
(f) a non-disturbance and attornment agreement among Saguaro Power
Company, a Limited Partnership and the Collateral Agent with respect to
the first priority lien Nevada Mortgage, each in form and substance
acceptable to the Creditors' Committee Lenders;
(g) a Waiver of the Nevada "One-Action Rule" by the Guarantors with
respect to this Agreement, the New Tranche A Notes Indenture and the New
Tranche B Notes Indenture, each in form and substance acceptable to the
Creditors' Committee Lenders; and
(h) such other agreements, instruments, approvals, consents,
opinions, or documents as the New Tranche B Notes Indenture Trustee, the
Administrative Agent, the New Tranche A Notes Indenture Trustee, the
Collateral Agent, the Lenders or their respective counsel may reasonably
request. Notwithstanding the foregoing Sections 5.4(b) and (c), the survey
and title opinion (or title insurance) requirements with respect to the
Pipeline are set forth in the Common Security and Intercreditor Agreement.
SECTION 5.5. Mortgages of Real or Immovable Property Situated in Canada.
PCI or the Borrower shall have caused to be delivered to the Lenders, with
copies to the
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Administrative Agent and the Collateral Agent, the following documents and
instruments with regard to each Mortgaged Property located in Dalhousie, Xxx
Xxxxxxxxx, Xxxxxxxxxxx xxx Xxxxxxxx, Xxxxxxx:
(a) a Mortgage (which for Mortgaged Property located in the province
of Quebec shall be the Quebec Mortgage and Security Agreement), duly
executed by PCI Chemicals Canada Company and dated as of the Closing Date,
together with evidence of the due registration thereof in the appropriate
recording office of the registration division where such Mortgaged
Property is situated;
(b) certificates of location, surveyors reports or other certified
perimeter surveys of the Mortgaged Property covered by each such Mortgage
prepared by registered surveyors as of a date and in form and substance
acceptable to the Creditors' Committee Lenders, bearing legal descriptions
conforming exactly to those contained in the relevant Mortgage indicating
the length of exterior boundary lines of the Mortgaged Property, locations
of all buildings, utility or other easements, showing the location of all
easements of record, encroachments, if any, and means of access to the
real property from a public way; and the surveyor's original certification
to the Collateral Agent;
(c) title opinions rendered in form and substance satisfactory to
the Creditors' Committee Lenders respecting the title of PCI Chemicals
Canada Company to such Mortgaged Property;
(d) evidence reasonably satisfactory to the Creditors' Committee
Lenders of all registrations necessary or desirable to perfect the lien
granted by each Mortgage, together with such reports on movable and
personal property searches, judgment and tax lien records as the
Creditors' Committee Lenders shall reasonably require;
(e) policies or certificates of insurance with respect to the
insurance required to be maintained in respect of the property covered by
each Mortgage pursuant to the terms of the Common Security and
Intercreditor Agreement, naming the Collateral Agent as loss payee
pursuant to an acceptable mortgage endorsement;
(f) such other agreements, instruments, approvals, consents,
opinions, or documents as the New Tranche A Notes Indenture Trustee, the
New Tranche B Notes Indenture Trustee, the Administrative Agent, the
Collateral Agent, the Lenders or their respective counsel may reasonably
request.
SECTION 5.6. Security Documents. PCI or the Borrower shall have caused to
be delivered to the Lenders, with copies to the Administrative Agent and
Collateral Agent, each of the Security Documents (including the Quebec Mortgage
and Security Agreement but not including the other Mortgages), duly executed and
delivered by each party thereto, together with:
43
(a) duly executed UCC-1 financing statements or other financing
statements or registration documents under the provisions of the UCC or
any other applicable state or provincial law in proper form for filing in
each office where such filing is necessary or appropriate to grant to the
Collateral Agent the Liens of the character and priority contemplated by
such Security Documents;
(b) share certificates (or other certificates representing Capital
Stock that is not in the form of shares) representing all Pledged Shares
(as defined in the Common Security and Intercreditor Agreement) and
undated stock powers (or other appropriate powers in respect of Capital
Stock that is not in the form of shares) for such certificates executed
and endorsed in blank; and
(c) evidence that all other actions necessary to perfect and protect
and set-up against third persons the Liens created by such Security
Documents have been taken.
SECTION 5.7. Transaction Documents. The Lenders and the Administrative
Agent shall have received executed and delivered copies of all other Transaction
Documents, certified to be true and complete copies thereof by an Authorized
Officer of PCI and the Borrower, and the Creditors' Committee Lenders shall, as
provided for in the Plan of Reorganization, be reasonably satisfied with the
form of each such Transaction Document.
SECTION 5.8. Canadian Corporate Reorganization. PCI Chemicals Canada
Inc./PCI Chimie Canada Inc. shall have been duly continued under the laws of the
province of Nova Scotia, shall have incorporated a Nova Scotia unlimited
liability company as a wholly-owned subsidiary and shall have amalgamated with
such subsidiary, such that the resulting company is (a) an unlimited liability
company duly and validly subsisting under the laws of the province of Nova
Scotia, and (b) a disregarded entity for U.S. Federal income tax purposes (the
"Canadian Corporate Reorganization").
SECTION 5.9. Confirmation Orders. The Lenders and the Administrative Agent
shall have received a certificate of the secretary or assistant secretary of PCI
and the Borrower, dated as of the Closing Date, certifying:
(a) that attached thereto are true, correct and complete copies of
each of the Confirmation Orders (including the Plan of Reorganization
attached to such Confirmation Orders) and;
(b) that no appeal or motion for rehearing has been filed in
connection with such Confirmation Orders.
SECTION 5.10. Plan of Reorganization. The terms and conditions of the Plan
of Reorganization shall not have been amended or modified from the form of the
Plan of Reorganization attached to the Confirmation Orders without the prior
approval of the Lenders; provided, however, that modifications which in the
judgment of the Creditors' Committee Lenders do not impair or adversely affect
the rights of the Lenders may be implemented without such approval.
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SECTION 5.11. Conditions Precedent to the Effectiveness of the Plan of
Reorganization, etc. All conditions precedent to the effectiveness of the Plan
of Reorganization shall have been satisfied or waived in accordance with the
terms of the Plan of Reorganization, the Confirmation Order shall have become a
Final Order and the Effective Plan Date shall have occurred.
SECTION 5.12. Implementation of Plan of Reorganization. The transactions
contemplated by the Plan of Reorganization to have been consummated on or before
the Closing Date shall have been consummated on or before the Closing Date in
accordance with terms of the Plan of Reorganization, including the issuance of
the New Common Stock, the New Tranche A Notes, the New Tranche B Notes and the
granting of Liens securing the Collateral.
SECTION 5.13. [Intentionally Omitted.]
SECTION 5.14. [Intentionally Omitted.]
SECTION 5.15. Litigation. There shall exist no pending or threatened
material litigation, proceedings or investigations with respect to any of the
Obligors which could reasonably be expected to have a Material Adverse Effect.
SECTION 5.16. Consents and Approvals, etc. All governmental, judicial and
third party approvals necessary or advisable in connection with each aspect of
the Loan Documents and the Transaction Documents, and the transactions
contemplated therein, and the continuing operations of each Obligor and each
Obligor Subsidiary shall have been obtained and be in full force and effect or
waived, and all applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on any aspect of the Loan
Documents and the Transaction Documents, or the transactions contemplated
therein.
SECTION 5.17. Opinions of Counsel. The Administrative Agent, the
Collateral Agent and the Lenders shall have received favorable opinions, dated
the Closing Date and addressed to the Administrative Agent, the Collateral Agent
and each Lender from:
(a) Xxxx Xxxxxxx & Xxxxxx, special New York counsel and tax counsel
to each Obligor, in form and substance satisfactory to counsel to the
Creditors' Committee Lenders and counsel to the Administrative Agent,
(b) McNamara, Dodge, Ney, Beatty, Xxxxxxxx & Xxxxxxx LLP, special
California counsel to each Obligor regarding matters of California law, in
form and substance satisfactory to counsel to the Creditors' Committee
Lenders and counsel to the Administrative Agent,
(c) Xxxxx Xxxxxx, special Nevada counsel to each Obligor regarding
matters of Nevada law, in form and substance satisfactory to counsel to
the Creditors' Committee Lenders and counsel to the Xxxxxxxxxxxxxx Xxxxx,
00
(x) Kean, Miller, Hawthorne, X'Xxxxxx, XxXxxxx & Xxxxxx, L.L.P.,
special Louisiana counsel to each Obligor regarding matters of Louisiana
law, in form and substance satisfactory to counsel to the Creditors'
Committee Lenders and counsel to the Administrative Agent,
(e) Preston, Gates & Xxxxx LLP, special Washington counsel to each
Obligor regarding matters of Washington law, in form and substance
satisfactory to counsel to the Creditors' Committee Lenders and counsel to
the Administrative Agent,
(f) Stikeman Elliott, special Canadian, Ontario and Quebec counsel
to each Obligor, in form and substance satisfactory to counsel to the
Creditors' Committee Lenders and counsel to the Administrative Agent, and
(g) Xxxxxxx XxXxxxxx Stirling Scales, special Nova Scotia and New
Brunswick counsel to each Obligor, in form and substance satisfactory to
counsel to the Creditors' Committee Lenders and counsel to the
Administrative Agent.
SECTION 5.18. No Default, Compliance with Representations and Warranties
and Closing Date Certificates. On the Closing Date,
(a) the representations and warranties set forth in Article VI
hereof and in each other Loan Document shall, in each case, be true and
correct as if made on the Closing Date, except to the extent they relate
to an earlier date, in which case they shall be true and correct as of
such earlier date, and no Default shall have occurred and be continuing;
and
(b) the Lenders and the Administrative Agent shall have received the
Closing Date Certificates, substantially in the form of Exhibit E hereto,
dated the Closing Date, and duly executed and delivered by the chief
executive or financial (or equivalent) Authorized Officer of the Borrower
and of each other Obligor certifying as to the matters set forth in
Section 5.18(a).
SECTION 5.19. Closing Fees, Expenses, etc. The Administrative Agent and
the Collateral Agent shall have received, each for its own respective account,
as the case may be, all fees, costs and expenses due and payable pursuant to
Sections 3.3 and 11.3 or any other Loan Document or Transaction Document if such
fees shall have by then been invoiced.
SECTION 5.20. Satisfactory Legal Form. All documents executed or submitted
pursuant hereto by or on behalf of the Borrower, any other Obligor or any
Obligor Subsidiary shall be satisfactory in form and substance to the Creditors'
Committee Lenders and their counsel; the Creditors' Committee Lenders and their
counsel shall have received all other information, approvals, opinions,
documents or instruments as the Creditors' Committee Lenders and their counsel
may reasonably request.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Administrative Agent to enter into
this Agreement and to make, maintain and continue the Term Loans hereunder, each
Obligor represents and warrants unto the Administrative Agent and each Lender as
set forth in this Article VI.
SECTION 6.1. Organization, etc. Each Obligor and each Obligor Subsidiary
is a corporation or entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its respective incorporation or
organization. Each Obligor and each Obligor Subsidiary is in good standing and
is duly qualified to do business in each jurisdiction where, because of the
nature of its activities or properties, such qualification is required, except
for those states in which its failure to qualify to do business could not be
reasonably expected to have a Material Adverse Effect and except for the
Borrower, which, as of the date hereof, is not qualified to do business in any
such jurisdiction other than the State of Delaware. Set forth in Item 6.1 of the
Disclosure Schedule is a complete and accurate list of the chief executive
office and registered address of each Obligor as of the date hereof
(collectively, the "Organizational Matters").
SECTION 6.2. Due Authorization, Non-Contravention, etc. Each Obligor and
each Obligor Subsidiary is duly authorized to execute and deliver this Agreement
(including in the case of each Guarantor, the Guaranty of such Guarantor), the
Term Notes, and each other Loan Document to be executed by it and is duly
authorized to assume or incur indebtedness hereunder and to perform its
obligations under this Agreement, the Term Notes and each other Loan Document to
be executed by it. The execution, delivery and performance by each Obligor and
each Obligor Subsidiary of this Agreement (including, with respect to each
Guarantor, its Guaranty), the Term Notes and each other Loan Document to which
it is a party do not and will not require any consent, filing or notice with or
approval of any governmental agency or authority, except for such consents or
approvals which have been obtained and such filings or notices which have been
made or given, as the case may be or filings required to perfect the security
interests created by the Loan Documents.
SECTION 6.3. No Conflicts. The execution, delivery and performance by each
Obligor and each Obligor Subsidiary of each Loan Document to which it is a
party, do not and will not conflict with (a) any provision of law, (b) its
Organizational Documents, (c) any agreement binding upon any Obligor or any
Obligor Subsidiary, which conflict could reasonably be expected to have a
Material Adverse Effect, or (d) any court or administrative order or decree
applicable to any Obligor or any Obligor Subsidiary, and in each case do not and
will not require, or result in, the creation or imposition of any Lien on the
Collateral or on any other asset of any Obligor or any Obligor Subsidiary, other
than Liens created under or pursuant to the Security Documents or otherwise
permitted by the Security Documents.
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SECTION 6.4. Validity and Binding Effect. This Agreement, the Term Notes
and each other Loan Document, when duly executed and delivered, will be legal,
valid and binding obligations of each Obligor party hereto or thereto, as
applicable, enforceable against each such Obligor in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and principles of
equity.
SECTION 6.5. No Default. Other than as set forth in Item 6.5 ("Defaults")
of the Disclosure Schedule, no Obligor or Obligor Subsidiary is in default under
any agreement or instrument to which it is a party or by which any of its
respective properties or assets is bound or affected, except to the extent that
any liability of the Obligors or Obligor Subsidiaries as a result, or in
respect, of all such defaults, taken together, could not reasonably be expected
to exceed $200,000. No Default has occurred and is continuing.
SECTION 6.6. [Intentionally Omitted.]
SECTION 6.7. Insurance. Item 6.7 ("Insurance") of the Disclosure Schedule
is a complete and accurate summary of the property and casualty insurance
program carried by each Obligor and each Obligor Subsidiary on the date hereof.
Such Item 6.7 includes names of insurer(s), policy number(s), expiration
date(s), amounts of coverage, types of coverage, the annual premium(s),
deductibles and self-insured retention and describes any retrospective rating
plan, fronting arrangement or any other self-insurance or risk assumption agreed
to by any Obligor or any Obligor Subsidiary or imposed upon any Obligor or any
Obligor Subsidiary by any such insurer. This summary also includes any
self-insurance program that is in effect.
SECTION 6.8. Litigation; Contingent Liabilities. (a) As of the date
hereof, except for those referred to in Item 6.8 ("Litigation") of the
Disclosure Schedule, there are no claims, litigation, arbitration proceedings,
including Environmental Claims, or governmental proceedings pending or
threatened against or affecting any Obligor or any Obligor Subsidiary or any
related party of any Obligor or Obligor Subsidiary.
(b) As of the date hereof, other than any liability incident to the
claims, litigation or proceedings disclosed in Item 6.8 of the Disclosure
Schedule or provided for or disclosed in the financial statements referred to in
Section 6.6, neither any Obligor nor any Obligor Subsidiary has any contingent
liabilities.
SECTION 6.9. Liens. None of the Collateral or other property, revenues or
assets of any Obligor or any Obligor Subsidiary is subject to any Lien except
Liens permitted by Section 7.2.2.
SECTION 6.10. Subsidiaries. Item 6.10 ("Subsidiaries") lists each Obligor
Subsidiary as of the date hereof. Item 6.10 of the Disclosure Schedule sets
forth, for each Obligor Subsidiary, a complete and accurate statement of (a) the
relevant Obligor's percentage ownership of each of such Subsidiary, (b) the
state or other jurisdiction of formation or incorporation of each such
Subsidiary, and (c) each state or other
48
jurisdiction in which each such Subsidiary is qualified to do business. Each
Obligor Subsidiary has executed and delivered its Guaranty.
SECTION 6.11. Partnerships; Joint Ventures. As of the date hereof, neither
any Obligor nor any Obligor Subsidiary is a partner or joint venturer in any
partnership or joint venture other than the partnerships and joint ventures
listed in Item 6.11 ("Partnerships and Joint Ventures") of the Disclosure
Schedule. Item 6.11 of the Disclosure Schedule sets forth, for each such
partnership or joint venture, a complete and accurate statement of (a) each
Obligor's or each Obligor Subsidiary's percentage ownership of each such
partnership or joint venture, (b) the state or other jurisdiction of formation
or incorporation, as appropriate, of each such partnership or joint venture, and
(c) each state or other jurisdiction in which each such partnership or joint
venture is qualified to do business.
SECTION 6.12. Transaction Documents. The New Tranche A Notes, the New
Tranche B Notes and the New Other Secured Notes have been issued in accordance
with and in compliance with all applicable laws, including the Bankruptcy Laws,
the Securities Act, the Securities Acts of each of Canada's provinces, and all
other applicable federal, state and provincial securities laws, each as amended.
The issuance of the New Tranche A Notes, the New Tranche B Notes and the New
Other Secured Notes and the execution and delivery by each Obligor and each
Obligor Subsidiary of the other Transaction Documents to which it is a party,
the performance by each Obligor and each Obligor Subsidiary of its obligations
thereunder, and the consummation of all transactions implementing the Plan of
Reorganization (a) have been duly authorized by all necessary corporate and
other actions on the part of each Obligor and each Obligor Subsidiary, (b) will
not require any consent or approval of any governmental agency or authority that
has not been obtained prior to the date hereof, (c) do not conflict with (i) any
provision of law, (ii) the Organizational Documents of any Obligor or Obligor
Subsidiary, (iii) any agreement binding upon any Obligor or Obligor Subsidiary,
the conflict with which could reasonably be expected to have a Material Adverse
Effect or (iv) any court or administrative order or decree applicable to any
Obligor or Obligor Subsidiary, and (d) do not and will not require, or result
in, the creation or imposition of any Lien on the Collateral or any other asset
of any Obligor or Obligor Subsidiary (other than the Liens created under the
Security Documents or permitted thereunder).
SECTION 6.13. Intellectual Property. Each Obligor and Obligor Subsidiary
possess adequate licenses, patents, patent applications, copyrights, trademarks,
trademark applications, trade styles, and tradenames to conduct its business as
proposed to be conducted following the implementation of the Plan of
Reorganization, other than those which the failure to possess could not
reasonably be expected to have a Material Adverse Effect, and all such licenses,
patents, patent applications, copyrights, trademarks, trademark applications,
trade styles, and tradenames existing on the date hereof of each Obligor and
each Obligor Subsidiary are listed in Item 6.13 ("Intellectual Property") of the
Disclosure Schedule.
SECTION 6.14. Solvency. Each Obligor and each Obligor Subsidiary,
immediately after giving effect to the implementation of the Plan of
Reorganization and
49
on the Closing Date, will be Solvent. As used herein, the term "Solvent" means,
with respect to any such entity on a particular date (a) the fair value of the
property of such entity is greater than the total amount of liabilities
(including contingent liabilities) of such entity, (b) the present fair saleable
value of the assets of such entity is greater than the probable liability of
such entity on its total existing debts (including contingent liabilities) as
they become absolute and matured, (c) such entity will be able to pay its debts
and liabilities as they mature and (d) such entity will not have unreasonably
small capital for the business in which it is engaged, as now conducted and as
proposed to be conducted following the implementation of the Plan of
Reorganization.
SECTION 6.15. Contracts; Labor Matters. Except as disclosed in Item 6.15
("Contracts and Labor Matters") of the Disclosure Schedule: (a) neither any
Obligor nor any Obligor Subsidiary is a party to any contract or agreement, or
is subject to any charge, corporate restriction, judgment, decree or order,
which could reasonably be expected to have a Material Adverse Effect; (b) as of
the date hereof, no labor contract to which any Obligor or any Obligor
Subsidiary is a party or is otherwise subject is scheduled to expire prior to
the Stated Maturity Date; (c) on the date of this Agreement (i) neither any
Obligor nor any Obligor Subsidiary is a party to any labor dispute with any
union or group of employees, and (ii) there are no strikes or walkouts relating
to any labor contracts to which any Obligor or any Obligor Subsidiary is a party
or is otherwise subject, which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.16. Employee Benefit Plans. (a) Each Single Employer Plan has
been and is being maintained in accordance with its terms and in compliance with
all provisions of ERISA and the Code applicable thereto, except where any
failure could not reasonably be expected to have a Material Adverse Effect.
Except as listed in Item 6.16A ("ERISA Events") of the Disclosure Schedule, no
ERISA Event has occurred nor has any other event occurred that may result in an
ERISA Event. Each Single Employer Plan has been determined by the United States
Internal Revenue Service to qualify under Section 401 of the Code, and the
trusts created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the Code, and to the best knowledge of the Obligor
nothing has occurred which would cause the loss of such qualification or
tax-exempt status. The aggregate amount of Unfunded Pension Liabilities of all
Single Employer Plans as of the date hereof does not exceed $ 6.6 million.
Except as listed in Item 6.16B ("Employee Benefit Plans") of the Disclosure
Schedule, neither any Obligor, Obligor Subsidiary nor ERISA Affiliate has any
liability to pay any welfare benefits under any Plan or any employee welfare
benefit plan within the meaning of section 3(1) of ERISA to former employees
thereof or to current employees with respect to claims incurred after the
termination of their employment other than as required by section 4980B of the
Code or Part 6 of Subtitle B of Title 1 of ERISA. Each Obligor, Obligor
Subsidiary and ERISA Affiliate have complied in all respects with the notice and
continuation coverage requirements of Section 4980B of the Code except as could
reasonably be expected to have a Material Adverse Effect. As of the date hereof,
except as listed in Item 6.16C ("Employee Benefit Litigation") of the Disclosure
Schedule, there are no pending or, to the best knowledge of the Obligor,
threatened claims, actions or lawsuits, other than routine claims for benefits
in the usual and ordinary course, with
50
respect to any Single Employer Plan for which any Obligor, Obligor Subsidiary or
ERISA Affiliate may be directly or indirectly liable, through indemnification
obligations or otherwise. Neither the Obligor nor any Obligor Subsidiary or
ERISA Affiliate has transferred any Unfunded Pension Liability to an entity
other than an ERISA Affiliate or otherwise engaged in a transaction that could
be subject to Section 4069 or 4212(c) of ERISA. No condition exists or event or
transaction has occurred in connection with any Plan that could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect; and
(b) Each Canadian Benefit Plan is and has been in all material
respects, established, qualified, registered (when required), administered and
invested in compliance with all applicable federal and provincial laws
(including, without limitation, the Income Tax Act (Canada) and the Supplemental
Pension Plans Act (Quebec)) and any applicable collective bargaining agreements,
and no event or condition has occurred and is continuing as to which any Obligor
or any Obligor Subsidiary would be under an obligation to furnish a report under
Section 7.1.8 hereof. All material obligations of the Obligors under each
Canadian Benefit Plan, including contribution obligations, have been satisfied
and there are no outstanding defaults or violations in respect thereof.
SECTION 6.17. Regulations U and X. No Obligor nor any Obligor Subsidiary
is engaged in the business of purchasing or selling Margin Stock or extending
credit to others for the purpose of purchasing or carrying Margin Stock, and no
part of the proceeds of the Term Loans has been or will be used to purchase or
carry any Margin Stock or for any other purpose which would violate regulations
U or X of the F.R.S. Board.
SECTION 6.18. Compliance. Each Obligor and each Obligor Subsidiary, and/or
each property, operation and facility that each owns, operates or controls, is
in compliance with all international, federal, national, state, provincial,
regional, local and municipal statutes, laws, rules, regulations, by-laws,
guidelines, directives, standards, orders, decrees, judgments, ordinances,
permits, certifications, licenses, registrations, approvals, requirements and
other authorizations applicable to it, the noncompliance with which could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.19. Taxes. Each Obligor and each Obligor Subsidiary has filed,
or caused to be filed, all federal, state, provincial and foreign and other
material tax returns which are required to have been filed (or has timely filed
extensions) and, after giving effect to the Plan of Reorganization and the Final
Order, has paid, or made adequate provisions for the payment of, all of its
Taxes which are due and payable (including interest and penalties), except such
Taxes, if any, as are being contested in good faith and by appropriate
proceedings and as to which such reserves or other appropriate provisions as may
be required by GAAP have been maintained. The federal income tax liability of
each Obligor and each Obligor Subsidiary has been audited by the Internal
Revenue Service and has been finally determined and satisfied (or the time for
audit has expired) for all tax years up to and including the tax year ended
1997. No Obligor and no Obligor Subsidiary is aware of any proposed assessment
against any Obligor or any Obligor Subsidiary for additional Taxes (or any basis
for any such assessment).
51
SECTION 6.20. Investment Company Act Representation. No Obligor and no
Obligor Subsidiary is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 6.21. Public Utility Holding Company Act Representation. No
Obligor and no Obligor Subsidiary is a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.22. Environmental and Safety and Health Matters. Except as
disclosed on Item 6.22 ("Environmental Matters") of the Disclosure Schedule or
as to matters that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, each Obligor and each Obligor
Subsidiary and/or each property, operation and facility that each owns, operates
or controls:
(a) complies, and at all times has complied, in all respects with
(i) all applicable Environmental Laws, and (ii) all applicable
Occupational Safety and Health Laws;
(b) is not subject to any pending judicial or administrative
proceeding alleging any violation of, or liability under, any
Environmental Law or Occupational Safety and Health Law;
(c) has not received any notice which remains outstanding (i) that
it may be in violation of, or liable under, any Environmental Law or
Occupational Safety and Health Law, (ii) threatening the commencement of
any proceeding under any Environmental Law or Occupational Safety and
Health Law, or (iii) alleging that it is or may be responsible for any
response, cleanup, or corrective action (including any remedial
investigation/feasibility studies) at any location under any Environmental
Law or Occupational Safety and Health Law;
(d) has not (in the case of each Obligor or each Obligor
Subsidiary), and its directors, officers and employees have not, been
declared guilty of committing an offence for a violation of Environmental
Laws or Occupational Safety and Health Laws in connection with their
affiliations with any Obligor or Obligor Subsidiary, and has not, and its
directors, officers and employees have not, ever been fined in respect of
or otherwise settled, such a prosecution;
(e) to the knowledge of the Borrower, is not the subject of any
pending federal, state, provincial, regional, municipal or local
investigation, including evaluating whether any investigation, remedial
action or other response is needed to respond to (i) a Release or
threatened Release into the environment of any Hazardous Material, or (ii)
any allegedly unsafe or unhealthy condition regulated under any
Environmental Law or Occupational Safety and Health Law;
(f) has not filed any notice under or relating to any Environmental
Law or Occupational Safety and Health Law indicating or reporting (i) any
past or
52
present Release or threatened Release into the environment of, or
treatment, storage or disposal of, any Hazardous Material, or (ii) any
potentially unsafe or unhealthy condition and there exists no basis for
such notice irrespective of whether such notice was actually filed;
(g) has no contingent liability in connection with any Release or
threatened Release into the environment of, or otherwise with respect to,
any Hazardous Material, whether on any premises owned or occupied by any
Obligor or any Obligor Subsidiary or on any other premises, and has not
been denied insurance coverage by reason of Hazardous Materials on, under,
around or about such premises; and
(h) is not subject to, or the subject of, any outstanding order,
decree, injunction or other arrangement with any governmental authority
relating to compliance with, or liability under, any Environmental Law or
Occupational Safety and Health Law.
There are no circumstances or conditions, including any Hazardous Materials on,
in or under any property or facilities currently or formerly owned, operated or
controlled by any Obligor or any Obligor Subsidiary (including such Hazardous
Materials that may be contained in underground storage tanks) which could
reasonably be expected to result in claims, liability, investigation, or cost
pursuant to any Environmental Law or Occupational Safety and Health Law, or
which could reasonably be expected to have a Material Adverse Effect.
SECTION 6.23. Related Agreements and Transaction Documents. As of the date
hereof, all representations and warranties of each Obligor contained in any Loan
Document (including each of the Security Documents) and all representations and
warranties of any Obligor and any Obligor Subsidiary made pursuant to or in
respect of the New Tranche A Notes Indenture (and each of the guaranties
thereunder), the New Tranche A Notes, the New Tranche B Notes Indenture (and
each of the guaranties thereunder) and the New Tranche B Notes (whether such
representations and warranties were made to the Administrative Agent or any
Lender or to another Person) are true and correct as if made on the date hereof
(except for those representations and warranties which are expressly made as of
another specified date) and each Obligor party to this Agreement hereby adopts
and affirms all such representations and warranties, which each such Obligor
agrees shall be incorporated by reference herein and made a part hereof. All
such representations and warranties shall survive the implementation of the Plan
of Reorganization, the execution and delivery of the Loan Documents and the
Transaction Documents and the consummation of the transactions contemplated
herein and therein.
SECTION 6.24. Holding Companies. PCI is a holding company without material
assets, operations or business other than the stock of its Subsidiaries. As of
the date hereof, no Obligor or Obligor Subsidiary has any Indebtedness other
than: Indebtedness in respect of the Term Loans, the Exit Facility, the New
Other Secured Notes And Claims, the New Tranche A Notes, the New Tranche B
Notes, this Agreement, the Term Loans and the New Tranche A Term Notes.
53
SECTION 6.25. Security Interests and Priority. As of the Closing Date, the
Collateral Agent, for the ratable benefit of the Lenders, the New Tranche A
Notes Holders and the New Tranche B Notes Holders, shall have first priority
perfected Liens on all the Collateral except for Secondary Collateral (as such
term is defined in the Common Security and Intercreditor Agreement) and assets
subject to the Liens of the New Other Secured Notes And Claims (in respect of
each of which the Collateral Agent shall have second priority perfected Liens).
The rights of the Lenders, the New Tranche A Notes Holders and the New Tranche B
Notes Holders rank senior in right of payment to all Indebtedness and
obligations of each Obligor and each Obligor Subsidiary (except with respect to
the Exit Facility, in relation to which such rights rank pari passu).
SECTION 6.26. Related Business. No Obligor and no Obligor Subsidiary
intends to engage, after the Closing Date, in any business other than the
Related Business.
SECTION 6.27. Plan of Reorganization. On or before the Closing Date, the
Confirmation Orders became Final Orders, the conditions precedent to the
effectiveness of the Plan of Reorganization were satisfied, the Effective Plan
Date occurred and each Obligor was and is authorized to, among other things,
enter into the Loan Documents and the Transaction Documents to which it is a
party in order to implement the Plan of Reorganization. All transactions, steps
and actions contemplated in the Plan of Reorganization as having been (or deemed
to have been) taken, completed or consummated on or before the Closing Date have
been so taken, completed or consummated, in each case, in furtherance of the
implementation of the Plan of Reorganization.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. Each of the Obligors (to the extent a
provision of this Section 7.1 applies to such Obligor as specified in the
particular sub-sections of this Section 7.1) covenants and agrees with the
Administrative Agent and each Lender that until all Obligations have been paid
and performed in full it will perform the obligations set forth in this Section
7.1.
SECTION 7.1.1 Financial Information, Reports, Notices, etc. PCI and the
Borrower will furnish, or will cause to be furnished, to the Administrative
Agent (for the benefit of the Administrative Agent and the Lenders) copies of
the following financial statements, reports, notices and information and shall
perform, or cause to be performed, such other covenants as are set forth below:
(a) Annual Audited Financial Statements. Within ninety (90) days
after each Fiscal Year, a copy of the annual audited financial statements
of PCI, the Borrower and their respective Subsidiaries, as well as of any
of the Guarantors as are required to file their annual audited financial
statements with the Commission
54
pursuant to the Securities Act or the Exchange Act and the rules and
regulations thereunder, prepared on a consolidated basis and in conformity
with GAAP and certified by an independent certified public accountant who
shall be satisfactory to the Administrative Agent, together with (i) a
certificate from such accountant to the effect that, in making the
examination necessary for the signing of such annual audit report, such
accountant has not become aware of any Default that has occurred and is
continuing and that relates to financial or other accounting matters or
the covenants set forth in this Article VII or, if such accountant has
become aware of any such event, describing it, and (ii) if prepared in
connection with the annual audit report, the annual operating statements
of PCI, the Borrower and such Subsidiaries prepared on a consolidating
basis and in conformity with GAAP applied in a manner consistent with the
audit report referred to in preceding clause (a)(i) of this Section 7.1.1,
signed by PCI's, the Borrower's and such other Guarantor's chief financial
officer or assistant treasurer.
(b) Quarterly Financial Statements. Within forty-five (45) days
after the end of each Fiscal Quarter, a copy of the unaudited financial
statements of PCI, the Borrower and their respective Subsidiaries, as well
as of any of the Guarantors as are required to file their quarterly
financial statements with the Commission pursuant to the Securities Act or
the Exchange Act and the rules and regulations thereunder, prepared on a
consolidating and consolidated basis and in conformity with GAAP (subject
to normal year-end audit adjustments) and applied in a manner consistent
with the audit report referred to in preceding clause (a)(i) of this
Section 7.1.1, signed by PCI's, the Borrower's and such other Guarantor's
chief financial officer and consisting of at least a balance sheet as at
the close of such Fiscal Quarter and an income statement and cash flow
statement for such Fiscal Quarter compared, in each case, to the actual
results for the same period during the prior Fiscal Year and to the
Borrower's budget delivered pursuant to clause (c) below for the current
Fiscal Year.
(c) Annual Budgets. Within thirty (30) days after the end of each
Fiscal Year of PCI and the Borrower, a copy of an annual budget of PCI,
the Borrower and their respective Subsidiaries for the current Fiscal
Year, prepared on a consolidated basis applied in a manner consistent with
the prior Fiscal Year's financial statements, signed by PCI's and the
Borrower's chief financial officer or assistant treasurer and consisting
of at least a balance sheet, an income statement and a cash flow
statement, each calculated on a quarter by quarter basis.
(d) Officer's Certificate. Together with the financial statements
furnished by PCI and the Borrower under the preceding clauses (a) and (b)
of this Section 7.1.1, a certificate of the chief executive or financial
officer or assistant treasurer of the Borrower stating that a review of
the activities of each Obligor and each Obligor Subsidiary during the
period in respect of which such financial statements have been furnished
and the preceding fiscal year has been made under the supervision of the
signing officers with a view to determining whether each has kept,
observed, performed and fulfilled its obligations under this Agreement and
the other Loan Documents to which it is a party, and further stating, as
to
55
each such officer signing such certificate, that to the best of his or her
knowledge each has kept, observed, performed and fulfilled each and every
covenant contained in this Agreement and the other Loan Documents to which
it is a party and is not in default in the performance or observance of
any of the terms, provisions and conditions hereof or thereof (or, if a
Default shall have occurred, describing all such Defaults of which he or
she may have knowledge and what action each is taking or proposes to take
with respect thereto).
(e) SEC and Other Reports. (i) File, or cause to be filed, all
applicable periodic reports and other reports and documents pursuant to
Sections 13 or 15(d) of the Exchange Act, and the rules and regulations
thereunder, within the time limits or periods specified therein, and
remain, and cause each other applicable Obligor and applicable Obligor
Subsidiary to remain, a company reporting to the Commission under Sections
13 or 15(d) of the Exchange Act and such rules and regulations or part of
a group of consolidated companies, one or more of whom reports or report
to the Commission in such manner, and (ii) copies of each filing and
report made (within five (5) days of such filing or report having been
made) by any Obligor or any Obligor Subsidiary or any third party with
respect to any Obligor or Obligor Subsidiary with or to any securities
exchange or the Commission or any Securities Commission in Canada,
including any registration statements and all amendments thereto filed
with respect to the New Tranche A Notes or the New Tranche B Notes, or as
required pursuant to the New Tranche A Notes Indenture, the New Tranche B
Notes Indenture, the Registration Rights Agreement or any other document
relating thereto.
(f) Notice of Default. Prompt notice of the occurrence of (i) a
Default, or (ii) a default (or of any default of the nature specified in
Section 9.1.1, whether or not in respect of any Indebtedness incurred
hereunder or permitted hereby) by any Obligor or any Obligor Subsidiary
under any material note, indenture, loan agreement, mortgage, lease or
other material similar agreement to which any Obligor or any Obligor
Subsidiary, as the case may be, is a party or by which it is bound
(including any of the Loan Documents or Transaction Documents), in each
case together with an Officers' Certificate specifying such Default or
such other default or event of default and what action the Borrower is
taking or proposes to take with respect thereto.
(g) Notice of Judgment. Notice of the entry of any judgment or
decree, or judgments or decrees, against any Obligor or any Obligor
Subsidiary, if the amount of such individual judgment or decree equals or
exceeds $500,000 or the aggregate amount of all such judgments and decrees
equals or exceeds $1,000,000.
(h) Notice of Other Indebtedness. Subject to Section 7.2.1, copies
of any material amendments, waivers or consents, notices of breach or
default, notices relating to the exercise or nonexercise of any remedy
available to any Person, notices of indemnity or other material claims,
and written materials relating to the exercise of any rights derived from
or arising in connection with, any material
56
Indebtedness of any Obligor or any Obligor Subsidiary and other written
communications of a material nature, including any communications by any
Obligor or Obligor Subsidiary in connection with the Loan Documents other
than any such notice or other written materials already sent to the
Lenders or the Administrative Agent pursuant to any other Section of this
Agreement (in each case such copies shall be furnished promptly).
(i) Security Documents. Any statement, report, notice and/or
information required to be delivered to the Collateral Agent pursuant to
any of the Security Documents at the same time as delivery thereof to the
Collateral Agent.
(j) Other Reports. Any information required to be provided pursuant
to other provisions of this Agreement, and such other reports or
information from time to time reasonably requested by the Administrative
Agent or Collateral Agent or any Lender.
Notwithstanding anything herein to the contrary, any financial statements,
reports, notices or other information required to be furnished pursuant to
Section 7.1.1(f)(ii), Section 7.1.1(c), Section 7.1.1(h) (in respect of
Indebtedness other than that pursuant to this Agreement) or Section 7.1.1(j)
which contain or contains non-public information, as reasonably determined by
PCI and the Borrower, shall be identified in writing as non-public information
by PCI and the Borrower to the Administrative Agent upon delivery thereof to the
Administrative Agent and the Administrative Agent shall not disclose such
non-public information to any Lender without such Lender having entered into a
confidentiality agreement on customary terms with the Administrative Agent
(which terms shall be satisfactory to the Administrative Agent) in respect of
such non-public information pursuant to which agreement such Lender shall be
required to keep such information confidential for so long as such information
shall not be public. The Administrative Agent has no duty to review any
financial or other reports for purposes of determining compliance with this or
any other provisions of this Agreement.
SECTION 7.1.2 Corporate Existence. Subject to Section 7.2.5, each Obligor
shall do or cause to be done all things necessary to preserve and keep in full
force and effect (a) its corporate existence and the corporate existence of each
of its Obligor Subsidiaries, in each case in accordance with their respective
Organizational Documents (as the same may, subject to Section 7.2.12, be amended
from time to time), and (b) its (and its Subsidiaries) rights (charter and
statutory), licenses and franchises necessary or desirable in the normal course
of its business; provided, however, that no Obligor shall be required to
preserve such corporate existence or such licenses, permits or approvals if the
failure to preserve the same could not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
SECTION 7.1.3 Maintenance of Properties. Each Obligor shall, and shall
cause each of its Obligor Subsidiaries to, maintain its properties and assets in
normal working order and condition as of the date hereof (reasonable wear and
tear excepted) and make all repairs, renewals, replacements, additions,
betterments and improvements thereto, as shall be reasonably necessary for the
proper conduct of the business of the Obligors and
57
the Obligor Subsidiaries taken as a whole; provided that nothing herein shall
prevent any Obligor or any Obligor Subsidiary from discontinuing any maintenance
of any such properties if such discontinuance could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 7.1.4 Insurance. Each Obligor shall, and shall cause each of its
Obligor Subsidiaries to, maintain property, liability, casualty, directors' and
officers' (D&O) and other insurance (subject to the customary deductibles and
retentions) with reputable insurance companies in such amounts and against such
risks as is customarily carried by responsible companies engaged in similar
businesses and owning similar assets in the general areas in which the Obligors
and the Obligor Subsidiaries operate (which may include self-insurance in
comparable form to that maintained by such responsible companies) and each
Obligor shall, and shall cause each of its respective Subsidiaries to, have the
Administrative Agent, for its benefit and for the benefit of Lenders, named as
loss payee or additional insured, as the case may be, by endorsement to the
policies for such insurance. Without limiting the foregoing, all such
endorsements shall provide that such policies may not be cancelled or terminated
without providing thirty (30) days' prior written notice to the Administrative
Agent.
SECTION 7.1.5 Taxes, etc. Each Obligor shall, and shall cause each of its
Obligor Subsidiaries to, pay and discharge (a) prior to delinquency, all
federal, foreign, provincial, state and other material Taxes, assessments and
governmental charges or levies imposed upon it, its income, profits and its
properties, except, in each case, as are being contested in good faith and by
appropriate proceedings diligently conducted by the Obligors and in respect of
which appropriate reserves are being maintained in accordance with GAAP, and (b)
all lawful claims for labor, material and supplies which, if unpaid, might by
law become a lien upon the property of an Obligor or Obligor Subsidiary, except,
in each case, as are being contested in good faith by appropriate proceedings
diligently conducted by the Obligors and in respect of which adequate reserves
are being maintained in accordance with GAAP.
SECTION 7.1.6 Books and Records. Each Obligor shall, and shall cause each
of its Obligor Subsidiaries to, keep books and records which accurately reflect
in all material respects all of its business affairs and transactions and permit
the Administrative Agent or its respective representatives at all times during
normal business hours, or such other reasonable times, and upon reasonable
notice (unless a Default has occurred or the Administrative Agent reasonably
suspects that a Default has occurred, in which case no prior notice shall be
required), to visit all of its or their offices, to inspect the properties of
each Obligor and each Obligor Subsidiary, to inspect the Collateral, to discuss
its financial matters, its business, its assets, its liabilities and its
prospects with its officers and with its independent public accountants (and
each Obligor and each Obligor Subsidiary hereby authorizes such independent
public accountants to discuss all such matters with the Administrative Agent or
such representatives whether or not any representative of any Obligor or Obligor
Subsidiary is present and, so long as there shall not have occurred and be
continuing a Default, the Borrower shall be given a reasonable opportunity to be
present) and to examine, and photocopy extracts from, any of its books or other
corporate records including management letters prepared by independent
58
accountants, in each case for the purposes of monitoring each Obligor's
compliance with its obligations under the Loan Documents to which it is a party.
So long as there shall not have occurred and be continuing a Default, the cost
and expense of each such visit shall be borne by the Administrative Agent,
except that the Administrative Agent may make one such visit during each Fiscal
Year of the Borrower at the cost and expense of the Borrower. If there shall
have occurred and be continuing a Default, and so long as the same shall be
continuing, such costs and expenses for all such visits shall be borne by the
Borrower.
SECTION 7.1.7 Authorizations. Each Obligor shall, and shall cause each of
its Obligor Subsidiaries to, make and keep in full force and effect all
authorizations from and registrations with governmental authorities and agencies
required for the validity or enforceability of the Loan Documents.
SECTION 7.1.8 ERISA and Canadian Benefit Plans. (a) Each Obligor shall,
and shall cause each of its Obligor Subsidiaries and ERISA Affiliates to,
furnish to the Administrative Agent:
(i) as soon as possible, and in any event within ten days
after such Obligor or any such Obligor Subsidiary or ERISA Affiliate
knows or has reason to know that any ERISA Event has occurred or
exists with respect to any Plan, or that the aggregate minimum
required contribution amount for any year with respect to all Single
Employer Plans as calculated in the applicable actuarial valuation
reports exceeds $5 million, a statement of a senior financial
officer of such Obligor setting forth details respecting such ERISA
Event or minimum required contribution amount and the action, if
any, which such Obligor, Obligor Subsidiary or ERISA Affiliate, as
the case may be, proposes to take with respect thereto;
(ii) promptly and in any event within ten days after receipt
thereof by such Obligor or any such Obligor Subsidiary or ERISA
Affiliate from the PBGC, copies of each notice received by such
Obligor, Obligor Subsidiary or ERISA Affiliate, as the case may be,
of the PBGC's intention to terminate any Single Employer Plan or to
have a trustee appointed to administer such Plan;
(iii) promptly and in any event within 30 days after the
filing thereof with the IRS, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to
each Single Employer Plan;
(iv) promptly and in any event within 30 days after receipt
thereof, copies of each actuarial valuation report with respect to
each Single Employer Plan;
(v) within ten days after notice is given or required to be
given to the PBGC under Section 302(f)(4)(A) of ERISA of the failure
of such
59
Obligor or any such Obligor Subsidiary or ERISA Affiliate to make
timely payments to a Single Employer Plan, a copy of any such notice
filed and a statement of a senior financial officer of such Obligor
setting forth (A) sufficient information necessary to determine the
amount of the lien under Section 302(f)(3) of ERISA, (B) the reason
for the failure to make the required payments and (C) the action, if
any, which such Obligor, Obligor Subsidiary or ERISA Affiliate, as
the case may be, proposes to take with respect thereto; and
(vi) promptly and in any event within ten days after receipt
thereof by such Obligor or any such Obligor Subsidiary or ERISA
Affiliate from a Multiemployer Plan sponsor, a copy of each notice
received by such Obligor, such Obligor Subsidiary or ERISA
Affiliate, as the case may be, concerning (A) the imposition of
Withdrawal Liability by a Multiemployer Plan, (B) the determination
that a Multiemployer Plan is, or is expected to be, in
reorganization or insolvent within the meaning of Title IV of ERISA,
(C) the termination of a Multiemployer Plan within the meaning of
Title IV of ERISA, or (D) the amount of liability incurred, or which
may be incurred, by such Obligor, such Obligor Subsidiary or ERISA
Affiliate in connection with any event described in clause (A), (B)
or (C) above.
(b) Each Obligor shall, and shall cause each of its Obligor
Subsidiaries to, as soon as possible, and in any event within ten days after any
Obligor or any of its Obligor Subsidiaries knows or has reason to believe that
any of the events or conditions specified below with respect to any Canadian
Benefit Plan has occurred or exists, furnish a statement signed by the chief
financial officer of PCI and of the Borrower setting forth details respecting
such event or condition and the action, if any, such Obligor or such Obligor
Subsidiary proposes to take with respect thereto (and a copy of any notice
required to be filed with or given to any governmental authority in Canada by
such Obligor or such Obligor Subsidiary with respect to such event or
condition):
(i) any Obligor or any of its Obligor Subsidiaries declares,
or any governmental authority orders, or indicates in writing that
it proposes to order, a full or partial termination or wind up of a
Canadian Benefit Plan;
(ii) a failure by any Obligor or any of its Obligor
Subsidiaries to make a contribution to a Canadian Benefit Plan in
accordance with the terms thereof (but excluding contribution
holidays pursuant to such terms), any collective bargaining
agreement or under applicable federal or provincial laws, which
failure has not been remedied within 30 days after such Obligor or
such Obligor Subsidiary is notified of such event and which failure
could reasonably be expected to have a Material Adverse Effect;
(iii) the adoption of any amendment to any Canadian Benefit
Plan that would result in a loss of tax exempt status of the
Canadian Benefit
60
Plan or the trust or other funding medium maintained in respect of
such Canadian Benefit Plan, or, except for amendments required under
relevant legislation, that increases the funding obligations under
any Canadian Benefit Plan, which increase could reasonably be
expected to have a Material Adverse Effect;
(iv) the institution of any proceeding, action, suit or claim
(other than routine claims for payment of benefits) involving any
Canadian Benefit Plan or its assets; or
(v) any event occurring with respect to any Canadian Benefit
Plan that has resulted or could result in any Canadian Benefit Plan
having its registration revoked or refused or being placed under the
administration of any governmental or regulatory authority (or their
representatives).
SECTION 7.1.9 Compliance with Laws and Environmental Matters. Each Obligor
shall, and shall cause each of its Obligor Subsidiaries to, (a) comply, in all
material respects with all applicable laws, statutes, rules, regulations,
by-laws, policies, guidelines, directives, decrees, opinions or agency
requirements or orders (including, without limitation, Environmental Laws and
Occupational Safety and Health Laws), and (b) notify the Administrative Agent
promptly after becoming aware of any Environmental Claim, or any fact or
circumstance that could reasonably be expected to result in an Environmental
Claim or a violation of, or liability under, any laws, statutes, rules,
regulations, by-laws, policies, guidelines, directives, decrees, opinions or
agency requirements or orders (including, without limitation, Environmental Laws
and Occupational Safety and Health Laws), that could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 7.1.10 [Intentionally Omitted.]
SECTION 7.1.11 Additional Guarantees. Each Subsidiary of each Obligor
shall be a Guarantor and, accordingly, if any Subsidiary of any Obligor shall be
formed after the Closing Date, each Obligor shall cause such Subsidiary to
execute and deliver to the Administrative Agent a duly executed Guaranty
Supplement, pursuant to which such Subsidiary shall be bound by the Guaranty and
Guaranty Supplement, shall be a Guarantor hereunder and such guaranty shall rank
pari passu with senior Indebtedness of such Subsidiary.
SECTION 7.1.12 Stock Pledges. Each Obligor and each Obligor Subsidiary in
existence as of the Closing Date (except for any such Subsidiary which has no
Subsidiaries) shall pledge the Capital Stock of its Subsidiaries owned by it to
secure the Obligations pro rata (and as further provided for in the Common
Security and Intercreditor Agreement) and each Obligor will, and will cause each
such existing Subsidiary to, pledge such Capital Stock of any Subsidiary of any
Obligor or existing Obligor Subsidiary formed after the Closing Date to secure
the Obligations and will execute and deliver to the Administrative Agent and the
Collateral Agent one or more agreements pledging Capital Stock substantially in
the form of the Security Agreement
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Supplement providing, among other things, for the pledge to the Collateral Agent
for the benefit of the Collateral Agent and, as applicable, of (x) the
Administrative Agent (for itself and the Lenders), (y) the New Tranche B Notes
Indenture Trustee (for itself and the New Tranche B Notes Holders), and (z) the
New Tranche A Indenture Trustee (for itself and for the New Tranche A Notes
Holders) of all the Capital Stock of such newly formed Subsidiary held by such
Obligor or such existing Obligor Subsidiary, as the case may be, and deliver to
the Collateral Agent stock certificates (or other certificates if the Capital
Stock does not take the form of shares) evidencing such Capital Stock (together
with undated stock powers (or other appropriate powers if the Capital Stock does
not take the form of shares) executed in blank), which Capital Stock and stock
(or other) powers will become "Collateral" for purposes of the Security
Documents. This Section 7.1.12 shall apply mutatis mutandis to any such newly
formed Subsidiary.
SECTION 7.1.13 Concerning the Collateral and the Loan Documents(a) . (a)
In order to secure the due and punctual payment of the Obligations, including
principal of, premium (if any) and interest (including interest on overdue
principal) on the Term Loans, when and as the same shall become due and payable,
whether on the scheduled payment date therefor, at maturity, by acceleration or
otherwise, and performance of all other obligations of the Borrower to the
Administrative Agent and the Lenders under this Agreement and each other Loan
Document and of all obligations of the Guarantors under the Guaranty and each
other Loan Document, the Borrower and the other Obligors have entered into each
of the applicable Security Documents to which each is a party. Each Obligor
hereby acknowledges and agrees with each other Obligor, the Administrative
Agent, and the Lenders that such Obligor has secured valuable and fair
consideration and corporate and other benefit for entering into each Security
Document to which it is a party.
(b) Each Obligor shall, and shall cause each of its Obligor
Subsidiaries to, perform at its sole cost and expense any and all acts and
execute any and all documents (including, without limitation, the execution,
amendment or supplementation of any financing statement, continuation statement,
charge, registration or other statement) for filing under the provisions of the
UCC and the rules and regulations thereunder, applicable Canadian federal or
provincial statutes and the rules and regulations thereunder, or any other
statute, rule or regulation of any applicable federal, state, provincial or
local jurisdiction, including any filings in local real estate land record
offices, which are necessary or advisable and shall do such other acts and
execute such other documents as may be required under any of the Security
Documents to which it is a party, from time to time, in order to grant and
maintain valid and perfected Liens on the Collateral relating to it in favor of
the Collateral Agent in the priorities expressed to be created by the Security
Documents, subject only to Liens permitted to be senior or pari passu to the
Liens of the Collateral Agent pursuant to Section 7.2.2. hereof, and to fully
preserve and protect, and set-up against third persons, the rights of the
Administrative Agent, the Collateral Agent and the Lenders under this Agreement
and the other Loan Documents. Each relevant Obligor will, and will cause each of
its Obligor Subsidiaries to, pay and satisfy promptly all mortgage and financing
and continuation statement recording and/or filing fees or registration fees,
charges and taxes relating to this
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Agreement, the Security Documents and the other Loan Documents, any amendments
thereto and any other instruments of further assurance.
(c) The Borrower shall, on each anniversary of the Closing Date beginning
in the year 2002 and upon each delivery of a Security Agreement Supplement
pursuant to Section 7.1.12, furnish to the Administrative Agent an Opinion of
Counsel, dated as of such date, either (a) to the effect that, in the opinion of
such counsel, such action has been taken with respect to the recordings,
registerings, filings, re-recordings, re-registerings and refilings of all
financing statements, continuation statements or other instruments of further
assurance as is necessary to maintain the Lien of each of the Security Documents
and reciting with respect to such Liens the details of such action or
referencing prior Opinions of Counsel in which such details are given, and
stating that all financing statements and continuation statements and other
filings or registrations have been executed and filed that are necessary as of
such date and during the succeeding twelve months fully to preserve and protect,
and set-up against third persons, the rights of the Collateral Agent, the
Lenders and the Administrative Agent hereunder and under each of the Security
Documents with respect to the Liens, or (b) to the effect that, in the opinion
of such counsel, no such action is necessary to maintain such Liens.
SECTION 7.1.14 Maintenance of Corporate Separateness. Each Obligor shall,
and shall cause each of its Obligor Subsidiaries to, satisfy customary corporate
formalities, including the holding of regular Board of Directors' and
shareholders' meetings and the maintenance of corporate offices and records. No
Obligor nor any Obligor Subsidiary shall take any action, or conduct its affairs
in a manner, which is likely to result in the corporate existence of any such
Obligor Subsidiary being ignored by any court of competent jurisdiction.
SECTION 7.1.15 Working Capital Line. Subject to the terms of this
Agreement, the Borrower shall use its best efforts to maintain a revolving
credit facility or similar arrangement with the Borrower and PCI Chemicals
Canada Company as the borrowers thereunder, as provided for in the effective
Plan of Reorganization, to the extent it deems necessary based on its cash
position and cash flows needed to fund the foreseeable capital expenditure and
working capital requirements of the Borrower, PCI Chemicals Canada Company and
their respective Subsidiaries, taken as a whole.
SECTION 7.1.16 Plan of Reorganization. Each Obligor shall, and shall cause
each of its Obligor Subsidiaries to, take all such steps and actions and to
consummate all transactions necessary to implement the Plan of Reorganization to
the extent such steps, actions and transactions are contemplated in the Plan of
Reorganization as occurring after the Closing Date and to the extent the Plan of
Reorganization contemplates that any Obligor or Obligor Subsidiary shall take
such steps and actions or consummate such transactions.
SECTION 7.1.17 Change of Control. Each Obligor shall, and shall cause each
of its Obligor Subsidiaries to, give reasonable notice to the Administrative
Agent and the Lenders of any proposed Change of Control prior to consummating,
or permitting the consummation of, such Change of Control.
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SECTION 7.1.18 Further Assurances. (a) Promptly upon the request of the
Administrative Agent or Collateral Agent, or any Lender through the
Administrative Agent, each Obligor shall correct, and shall cause each of its
Obligor Subsidiaries promptly to correct, any material defect or error that may
be discovered in the execution, acknowledgment, filing or recordation of any
Loan Document, and (b) promptly upon the request by the Administrative Agent or
Collateral Agent, or any Lender through the Administrative Agent, each Obligor
shall, and shall cause each of its Obligor Subsidiaries to do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and re-register
any and all such further acts, deeds, conveyances, pledge agreements, mortgages,
deeds of trust, trust deeds, assignments, financing statements and continuations
thereof, termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Administrative Agent or Collateral
Agent, or any Lender through the Administrative Agent or Collateral Agent, may
reasonably require from time to time in order to (i) carry out more effectively
the purposes of the Loan Documents, (ii) to the fullest extent permitted by
applicable law, subject any Obligor's or any Obligor Subsidiary's properties,
assets, rights or interests intended to be Collateral to the Liens now or
hereafter intended to be covered by any of the Security Documents, (iii) perfect
and maintain the validity, effectiveness and priority of any of the Security
Documents and any of the Liens intended to be created thereunder, and (iv)
assure, convey, grant, assign, transfer, preserve, protect and confirm more
effectively unto the Lenders the rights granted or now or hereafter intended to
be granted to the Lenders under any Loan Document or under any other instrument
executed in connection with any Loan Document to which any Obligor or Obligor
Subsidiary is or is to be a party.
SECTION 7.1.19 Qualified Equity Offerings. PCI may, but shall not be
obliged to, make and consummate one or more Qualified Equity Offerings. If the
Net Offering Proceeds of a consummated Qualified Equity Offering, or of one or
more such Qualified Equity Offerings together, are greater than $5,000,000, then
PCI and the Borrower shall cause the Net Offering Proceeds of such Qualified
Equity Offering, or one or more such Qualified Equity Offerings, that are in
excess of $5,000,000 (such excess proceeds, the "Offering Proceeds") to be
applied to prepay, subject to and in accordance with the terms of the Common
Security and Intercreditor Agreement, all the Term Loans outstanding of all the
Lenders (and if such proceeds are not sufficient to prepay all the Term Loans
then outstanding of all the Lenders, then to prepay such Term Loans on a pro
rata basis), in each case at a price equal to 100% of the principal amount of
the Term Loans required to be prepaid pursuant to this Section 7.1.19 plus
accrued interest thereon to the date of prepayment.
SECTION 7.1.20 Qualification in Foreign Jurisdictions. PCI shall cause the
Borrower to be, and the Borrower shall be, in good standing and duly qualified
to do business in each jurisdiction where, because of the nature of its
activities or properties, such qualification is required by no later than
January 31, 2002, except to the extent such failure to qualify could not
reasonably be expected to have a Material Adverse Effect.
SECTION 7.2. Negative Covenants. Each of the Obligors (to the extent a
provision of this Section 7.2 applies to such Obligor as specified in the
particular sub-sections of this Section 7.2) covenants and agrees with the
Administrative Agent and
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each Lender that until all Obligations have been paid and performed in full it
will perform the obligations set forth in this Section 7.2.
SECTION 7.2.1 Indebtedness. No Obligor shall, nor shall it permit its
Obligor Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guaranty or otherwise become liable with respect to or become responsible for
the payment of, contingently or otherwise ("incur"), any Indebtedness.
Notwithstanding the foregoing, the limitations of this Section 7.2.1 shall not
apply to the incurrence of the following Indebtedness:
(a) Indebtedness evidenced by the Term Notes and Indebtedness in
respect of the Term Loans, this Agreement (including the Guaranties), and
all other Obligations;
(b) Indebtedness of Pioneer Americas LLC evidenced by the New
Tranche A Notes, Indebtedness of PCI Chemicals Canada Company evidenced by
the New Tranche B Notes, Indebtedness of any guarantor in respect of the
guaranties of the New Tranche A Notes and of the New Tranche B Notes, and
Indebtedness in respect of all other Transaction Documents and all other
obligations incurred thereunder;
(c) Indebtedness of any Obligor or Obligor Subsidiary constituting
Existing Indebtedness and any extension, deferral, renewal, refinancing or
refunding thereof, without increasing the aggregate amount of such
Indebtedness then outstanding and covered thereby;
(d) Indebtedness of any Obligor or Obligor Subsidiary in respect of,
and in accordance with the terms of, the Exit Facility; provided that
notwithstanding the terms of the Exit Facility, the aggregate principal
amount of Indebtedness at any time outstanding under the Exit Facility
shall not exceed $65,000,000;
(e) Capitalized Lease Obligations of any Obligor or any Obligor
Subsidiary, including Indebtedness in respect of Capitalized Lease
Obligations of any Obligor or any Obligor Subsidiary secured by Liens that
secure the payment of all or part of the purchase price of assets or
property acquired or constructed in the ordinary course of business after
the date hereof; provided, however, that the aggregate principal amount of
such Capitalized Lease Obligations, including such Indebtedness in respect
of Capitalized Lease Obligations of the Obligors and all Obligor
Subsidiaries, does not exceed $10,000,000 in the aggregate outstanding at
any time;
(f) Indebtedness of PCI or the Borrower to any of their respective
Subsidiaries or of any such Subsidiary to PCI, the Borrower or another
such Subsidiary (but only so long as such Indebtedness is held by PCI, the
Borrower or such Subsidiary);
(g) Indebtedness incurred in connection with the CRC Portfolio and
other Indebtedness, not secured by or subject to any Lien, under Hedging
Obligations incurred in the ordinary course of PCI's or the Borrower's
business or entered
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into by the Borrower (or any other person on behalf of the Borrower with
the express authority of the Borrower to bind the Borrower with respect
thereto) for the sole purpose of offsetting any open position with respect
to the CRC Portfolio and otherwise mitigating any exposure in respect of
the CRC Portfolio; provided, however, that in the case of foreign currency
exchange or similar agreements which relate to other Indebtedness, such
agreements do not increase the Indebtedness of any Obligor or any Obligor
Subsidiary outstanding other than as a result of fluctuations in foreign
currency exchange rates, and in the case of interest rate protection
agreements, only if the notional principal amount of such interest rate
protection agreement does not exceed the principal amount of the
Indebtedness to which such interest rate protection agreement relates;
(h) Indebtedness, not secured by or subject to any Lien (except as
shall, in the ordinary course of business, be backed by cash or cash
equivalents), in respect of performance, completion, guarantee, surety and
similar bonds, banker's acceptances, bills of exchange or letters of
credit provided or endorsed by PCI, the Borrower or any of their
respective Subsidiaries in the ordinary course of business;
(i) Indebtedness, not secured by or subject to any Lien, in respect
of (i) any guaranty (not otherwise referred to above) provided by PCI, the
Borrower or any of their respective Subsidiaries in respect of any other
Indebtedness permitted to be incurred hereunder; provided, however, that
if such Indebtedness guaranteed is (x) subordinated in right of payment to
any other Indebtedness of the obligor thereof, then such guaranty shall be
subordinated to Indebtedness of such guarantor to the same extent, and (y)
secured by a Lien otherwise permitted pursuant to Section 7.2.2, then such
guaranty may be so secured, (ii) indemnities in favor of Persons issuing
title insurance policies, (iii) indemnifications in the Transaction
Documents and in any agreements contemplated thereunder or thereby, (iv)
indemnities in the Organizational Documents of PCI and its Subsidiaries,
and (v) customary indemnities given to a purchaser of assets from the
Borrower; provided that the sale of such assets by the Borrower is
permitted pursuant to the terms hereof;
(j) Indebtedness subject to Liens permitted by Section 7.2.2
(including purchase money Indebtedness and Attributable Indebtedness in
respect of Sale and Leaseback Transactions);
(k) Indebtedness incurred in respect of New Other Secured Notes and
Claims;
(l) any refinancing, refunding, deferral, renewal or extension
(each, a "Refinancing") of any Indebtedness of any Obligor or any Obligor
Subsidiary permitted by subsections (b), (c), (d) and (j) (the
"Refinancing Indebtedness"); provided, however, that (A) such Refinancing
Indebtedness does not exceed the aggregate principal amount of the
Indebtedness so refinanced, plus the amount of any premium required to be
paid in connection with such Refinancing in
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accordance with the terms of such Indebtedness or the amount of any
premium reasonably determined by such Obligor or Obligor Subsidiary as
necessary to accomplish such Refinancing, plus the amount of reasonable
and customary out-of-pocket fees and expenses payable in connection
therewith, (B) the Refinancing Indebtedness does not provide for any
mandatory redemption, amortization or sinking fund requirement in an
amount greater than or at a time prior to the amounts and times specified
in the Indebtedness being refinanced, refunded, deferred, renewed or
extended and (C) if the Indebtedness being refinanced, refunded, deferred,
renewed or extended is subordinated to the Indebtedness of the Obligors or
Obligor Subsidiaries pursuant to this Agreement and the New Tranche A Term
Notes, the Refinancing Indebtedness incurred to refinance, refund, defer,
renew or extend such Indebtedness is subordinated in right of payment to
the Obligations on terms at least as favorable to the Lenders as those
contained in the documentation governing the Indebtedness being so
refinanced, refunded, deferred, renewed or extended; or
(m) in addition to the Indebtedness permitted by clauses (a) through
(k) of this Section 7.2.1, Indebtedness of the Obligors and Obligor
Subsidiaries, taken together, in an aggregate principal amount not to
exceed $200,000 at any one time outstanding;
provided, however, that no Indebtedness permitted to be incurred pursuant to
this Section 7.2.1 (except for the Exit Facility) shall contain any terms that
are more restrictive on or to the obligor of such Indebtedness than those set
forth in this Agreement, whether taken individually or as a whole.
SECTION 7.2.2 Liens. No Obligor shall, nor shall it permit any of its
Obligor Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its assets or properties now owned or acquired after the Closing Date, or
any income or profits therefrom, other than Permitted Liens.
SECTION 7.2.3 Restricted Payments, etc. No Obligor shall, nor shall it
cause, permit or suffer any of its Obligor Subsidiaries to, (a) declare or pay
any dividends or make any other distributions (including through mergers,
liquidations or other transactions but excluding, for the avoidance of doubt,
the issuance of New Common Stock pursuant to the Plan of Reorganization) on any
class of Capital Stock of any Obligor or Obligor Subsidiary (other than
dividends or distributions payable to PCI or by a Wholly-Owned Subsidiary of PCI
or of the Borrower on account of its Capital Stock held by PCI or the Borrower
or another Subsidiary of PCI or the Borrower or payable or paid in shares of
Capital Stock of the Borrower other than preferred stock or redeemable stock),
(b) make any payment on account of, or set apart money for a sinking or other
analogous fund for, the purchase, redemption or other retirement of such Capital
Stock, (c) purchase, defease, redeem or otherwise retire any Subordinated
Indebtedness (other than with the proceeds of the issuance of Capital Stock of
PCI which is permitted to be issued pursuant to the terms of this Agreement), or
(d) make any Investment, either directly or indirectly, whether in cash or
property or in obligations of any Obligor or Obligor Subsidiary (all of the
foregoing being called "Restricted Payments").
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Notwithstanding the foregoing, any Obligor may make (i) Permitted Issuances,
(ii) Restricted Payments made pursuant to the Transaction Documents, and (iii)
Permitted Investments.
SECTION 7.2.4 Payment Restrictions Affecting Subsidiaries. No Obligor
shall, nor shall it permit any of its Obligor Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any such
Obligor Subsidiary to (a) pay dividends or make any other distribution to an
Obligor or its Obligor Subsidiaries on its Capital Stock, (b) pay any
Indebtedness owed to any Obligor or any other such Subsidiary, (c) make loans or
advances to any Obligor or any other such Subsidiary, or (d) transfer any of its
property or assets to any Obligor or any other such Subsidiary, except:
(i) consensual encumbrances or restrictions contained in or
created pursuant to any Loan Documents or the Transaction Documents;
(ii) any restriction, with respect to a Subsidiary of any
Obligor that is not a Subsidiary of such Obligor on the Closing
Date, in existence at the time such entity becomes a Subsidiary of
such Obligor; provided that such encumbrance or restriction is not
created in anticipation of or in connection with such entity
becoming a Subsidiary of the Borrower and is not applicable to any
Person or the properties or assets of any Person other than a Person
that becomes a Subsidiary;
(iii) encumbrances or restrictions contained in any other
Indebtedness permitted to be incurred subsequent to the Closing Date
pursuant to Section 7.2.1; provided that any such encumbrances or
restrictions (except pursuant to the Exit Facility) are not more
restrictive taken individually and as a whole than the most
restrictive of those provided for in the Indebtedness referred to in
clause (i) of this Section 7.2.4;
(iv) any such encumbrance or restriction consisting of
customary nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the
lease;
(v) any restriction with respect to such a Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of
all or substantially all of the Capital Stock or assets of such
Subsidiary in compliance with this Agreement pending the closing of
such sale or disposition; or
(vi) any encumbrance or restriction required or mandated by
applicable law.
SECTION 7.2.5 Consolidation, Merger, etc.(a) (a) No Obligor shall, nor
shall it cause or permit any of its Obligor Subsidiaries to, in a single
transaction or a series of related transactions, consolidate with or merge with
or into, or sell, assign, convey, lease
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or transfer all or substantially all of its assets or those of its Subsidiaries
to any Person (except that any Obligor (other than PCI or the Borrower) or any
Obligor Subsidiary (other than the Borrower) may be merged with or into (x) the
Borrower, if the Borrower shall be the surviving corporation, or (y) any other
such Obligor Subsidiary) unless either:
(i) such merger or consolidation is of the Borrower with or
into such other Person and such other Person is another Obligor or a
Wholly-Owned Subsidiary of PCI (whether or not such other Person
shall exist on the date hereof; provided that any such Subsidiary
created after the date hereof shall not have as its assets those
that are acquired from entities other than one or more of the
Obligors), the resulting, surviving or transferee Person (if not the
Borrower) expressly assumes all the obligations of the Borrower
under this Agreement, the Term Notes, each other Loan Document and
the Transaction Documents pursuant to amendments in form and
substance satisfactory to the Administrative Agent and the Required
Lenders (without prejudice, in the case of the Transaction
Documents, to the terms thereof) and such merger or consolidation is
consummated on or before March 31, 2002; or
(ii) each of the following conditions in this Section
7.2.5(ii) is satisfied:
(1) the resulting, surviving or transferee Person (if
not the Borrower) expressly assumes all the obligations of
such Obligor or of the relevant Obligor Subsidiary under this
Agreement and each other Loan Document to which such Obligor
or Obligor Subsidiary is a party pursuant to amendments
thereto in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders;
(2) such resulting, surviving or transferee Person is
organized and existing under the laws of the United States of
America, a state thereof or the District of Columbia or, in
the case of an assignee or transferee of the assets of PCI
Chemicals Canada Company, under the laws of Canada or one of
Canada's provinces or territories;
(3) at the time of the occurrence of such transaction
and after giving effect to such transaction on a pro forma
basis, such Person could incur $1.00 of additional
Indebtedness (assuming a market rate of interest with respect
to such additional Indebtedness);
(4) (x) at the time of the occurrence of such
transaction and after giving effect to such transaction on a
pro forma basis, the Consolidated Net Worth of such Person is
greater than the Consolidated Net Worth of the Obligors and
the Obligor Subsidiaries, taken together, immediately prior to
such transaction, and (y) the Administrative Agent, the
Lenders, the New Tranche A Notes Indenture Trustee, the New
Tranche A Notes Holders, the New Tranche B Notes Indenture
Trustee and the New Tranche B Notes Holders shall have
received an opinion of a
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nationally recognized investment banking firm not affiliated
to any Person involved in any such merger or consolidation
relating to fairness and confirming that the position of the
Lenders, the New Tranche A Notes Holders and the New Tranche B
Notes Holders will not in any way be less favorable than it
was immediately prior to any such merger or consolidation as a
result of such merger or consolidation;
(5) each Guarantor, to the extent applicable, will
acknowledge and confirm in writing that its Guaranty hereunder
will apply to such Person's obligations under this Agreement,
the Term Notes, each other Loan Document and its guaranty
under the New Tranche A Notes Indenture and in respect of the
New Tranche A Notes, the New Tranche B Notes Indenture and in
respect of the New Tranche B Notes will apply to such Person's
obligations under the New Tranche A Notes Indenture, the New
Tranche A Notes, the New Tranche B Notes Indenture and the New
Tranche B Notes; and
(6) immediately before and immediately after giving
effect to such transaction and treating any Indebtedness which
becomes an obligation of any Obligor or Obligor Subsidiary or
of such Person as a result of such transaction as having been
incurred by such Obligor or such Obligor Subsidiary or such
Person, as the case may be, at the time of such transaction,
no Default shall have occurred and be continuing.
The Borrower shall deliver to the Administrative Agent, prior to the
consummation of any proposed transaction pursuant to this Section 7.2.5, an
Officers' Certificate to the foregoing effect and an Opinion of Counsel, stating
that the proposed transaction and such amendments comply with this Agreement.
The provisions of this Section 7.2.5 will not apply to any transaction
(including any Asset Sale made in accordance with Section 7.2.6) with respect to
any Guarantor if the Guaranty of such Guarantor is released in connection with
such transaction in accordance with the applicable provisions of this Agreement
and the other Loan Documents.
(b) Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer or disposition of all or substantially all of the
properties and assets of any Obligor or Obligor Subsidiary in accordance with
the foregoing provisions of this Section 7.2.5, the successor Person formed by
such consolidation or into which such Obligor or Obligor Subsidiary is merged or
the successor Person to which such sale, assignment, conveyance, transfer, lease
or disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, PCI, the Borrower or a Guarantor, as the case
may be, under this Agreement, the Term Notes, its Guaranty and/or the other Loan
Documents, as the case may be, with the same effect as if such successor had
been named as PCI, the Borrower or a Guarantor, as the case may be, herein, in
the Term Notes, Guaranty and/or other Loan Documents, as the case may be. When a
successor assumes all the obligations of its predecessor under this Agreement,
the Term Notes, the Guaranty and/or other Loan Documents, as the case may be,
the predecessor shall be released from those obligations; provided that in the
case of a
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transfer by lease, the predecessor shall not be released from the payment of
principal and interest on, or any other Obligation relating to, this Agreement,
the Term Notes, each Guaranty or the other Loan Documents, as the case may be.
SECTION 7.2.6 Asset Dispositions, etc.(a) (a) No Obligor shall, and nor
shall it permit any of its Obligor Subsidiaries to, make any Asset Sale (other
than to another Obligor or other such Subsidiary) (i) unless such Obligor or
such Subsidiary receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the assets sold or otherwise disposed of and
at least 85% of the consideration received by such Obligor or such Subsidiary
from such Asset Sale is in the form of cash (in Dollars) and no portion thereof
shall consist of inventory or accounts receivable or other property that would
become subject to a Lien held by any creditor of such Obligor or of any such
Subsidiary other than the Lenders, the New Tranche A Notes Holders or the New
Tranche B Notes Holders; provided, however, that the amount of any cash
equivalent or note or other obligation received by such Obligor or such
Subsidiary from the transferee in any such transaction that is converted within
45 days by such Obligor or such Subsidiary into cash will be deemed upon such
conversion to be cash for purposes of this provision; (ii) to the extent such
Asset Sale involves Collateral, PCI or the Borrower shall cause the aggregate
cash proceeds received by such Obligor or such Subsidiary in respect of such
Asset Sale which are allocated to the Collateral, net of the items set forth in
clauses (i) through (iii) of the definition of Net Proceeds (the "Collateral
Proceeds") to be deposited with the Collateral Agent in the Intercreditor
Collateral Account as and when received by such Obligor or any such Subsidiary
for application in accordance with the Common Security and Intercreditor
Agreement and this Agreement; and (iii) the Net Proceeds received by such
Obligor or such Subsidiary from any Asset Sale are applied in accordance with
the following paragraphs.
(b) The Borrower shall apply 100% of the aggregate amount of Net Proceeds
or Collateral Proceeds from each and every Asset Sale, as the case may be,
subject to Section 3.1.2 and the provisions, if applicable, of the Common
Security and Intercreditor Agreement, to pro rata prepay (at the same time as
New Tranche A Notes shall be redeemed in respect of an Asset Sale (as such term
is defined in the New Tranche A Notes Indenture) pursuant to Section 1009 and
Article Eleven of the New Tranche A Notes Indenture) the Term Loans in each case
then outstanding at a price equal to 100% of the principal amount thereof, plus
accrued interest thereon to the date of prepayment.
(c) Until such time, if any, as the Net Proceeds from any Asset Sale are
applied in accordance with this covenant, such Net Proceeds will be segregated
from the other assets of each Obligor and each Obligor Subsidiary and invested
in cash or Eligible Investments.
(d) No Obligor will, and nor will it permit any of its Obligor
Subsidiaries to, create or permit to exist or become effective any consensual
restriction other than restrictions not more restrictive, taken as a whole (as
determined in good faith by the Boards of Directors of PCI), than those in
effect under the Exit Facility or any other Indebtedness permitted by Section
7.1.1 that would materially impair the ability of any Obligor or any Obligor
Subsidiary to comply with the provisions of this Section.
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(e) If at any time any non-cash consideration permitted by this Section
7.2.6 (other than any such consideration consisting of inventory, accounts
receivable and certain related assets securing or permitted to secure the Exit
Facility) is received by any Obligor or Obligor Subsidiary, as the case may be,
in connection with any Asset Sale of assets permitted by this Section 7.2.6
which includes Collateral, such non-cash consideration shall be made subject to
the Lien of the Security Documents in the manner contemplated in the Common
Security and Intercreditor Agreement to the extent of the purchase price
allocated to the Collateral. If and when any such non-cash consideration
received from any Asset Sale (whether or not relating to Collateral) is
converted into or sold or otherwise disposed of for cash, then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Proceeds or Collateral Proceeds thereof shall be applied in accordance with this
Section 7.2.6 and this Agreement.
(f) All Insurance Proceeds and all Net Awards required to be delivered to
the Collateral Agent pursuant to any Security Document shall constitute Trust
Moneys and shall be delivered, or caused to be delivered, by each Obligor or
each Obligor Subsidiary, as the case may be, to the Collateral Agent promptly
after receipt by any Obligor or Obligor Subsidiary and be deposited into the
appropriate Intercreditor Collateral Account and applied in accordance with the
applicable provisions of the Common Security and Intercreditor Agreement.
Insurance Proceeds and Net Awards so deposited that may be applied by each
Obligor or each Obligor Subsidiary to effect a Restoration of the affected
Collateral under the applicable Security Document may be withdrawn from the
Intercreditor Collateral Account only in accordance with the applicable
provisions of the Common Security and Intercreditor Agreement. Insurance
Proceeds and Net Awards so deposited that are not applied to effect a
Restoration of the affected Collateral under the applicable Security Document
may only be withdrawn in accordance with applicable provisions of the Common
Security and Intercreditor Agreement.
SECTION 7.2.7 Modification of Certain Agreements. Except as expressly
provided for in the Transaction Documents, no Obligor shall, nor shall it permit
any of its Obligor Subsidiaries to, amend, modify or supplement, or permit or
consent to any amendment, modification or supplement of, the Exit Facility, the
New Other Secured Notes And Claims and the Transaction Documents (other than the
Security Documents to which Section 11.1 will apply), except in each case to the
extent such amendment, modification or supplement could not reasonably be
expected to have a Material Adverse Effect.
SECTION 7.2.8 Transactions with Affiliates(a) . (a) No Obligor shall, nor
shall it permit any of its Obligor Subsidiaries to, directly or indirectly,
enter into any transaction, or series of related transactions, with or for the
benefit of any of their respective Affiliates, except on an arm's-length basis
and if (x)(i) in the case of any such transaction (other than with any Obligor
or Obligor Subsidiary) in which the aggregate rental value, remuneration or
other consideration (including the value of a loan), together with the aggregate
rental value, remuneration or other consideration (including the value of a
loan) of all such other transactions consummated in the year during which such
transaction is proposed to be consummated, is less than or equal to $750,000,
PCI and the
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Borrower shall deliver Board Resolutions of their respective Boards of Directors
to the Administrative Agent evidencing that the Boards of Directors and the
Independent Directors of each of PCI and the Borrower that are disinterested
each, acting together in the first instance and separately in the second, have
(by a majority vote) determined in good faith that the aggregate rental value,
remuneration or other consideration (including the value of any loan) inuring to
the benefit of such Affiliate from any such transaction is not greater than that
which would be charged to or extended by such Obligor or such Obligor
Subsidiaries, as the case may be, on an arm's-length basis for similar
properties, assets, rights, goods or services by or to a Person not affiliated
with any Obligor or any of its Obligor Subsidiaries, as the case may be, and
(ii) in the case of any such transaction in which the aggregate rental value,
remuneration or other consideration (including the value of any loan), together
with the aggregate rental value, remuneration or other consideration (including
the value of any loan) of all such other transactions consummated in the year
during which such transactions are proposed to be consummated, exceeds $750,000,
PCI and the Borrower shall deliver to the Administrative Agent Board Resolutions
of their respective Boards of Directors as described in clause (x)(i) of this
Section 7.2.8 and an opinion of a nationally recognized investment banking firm,
not affiliated with any Obligor or Obligor Subsidiary or the Affiliate which is
party to such transaction, to the effect that the aggregate rental price,
remuneration or other consideration (including the value of a loan) inuring to
the benefit of such Affiliate from any such transaction is not greater than that
which would be charged to or extended by any Obligor or any of its Obligor
Subsidiaries, as the case may be, on an arm's-length basis for similar
properties, assets, rights, goods or services by or to a Person not affiliated
with such Obligor or any of its Obligor Subsidiaries, as the case may be, and
(y) all such transactions referred to in clauses (x)(i) and (ii) of this Section
7.2.8 are entered into in good faith.
(b) The provisions of the preceding paragraph do not prohibit (i) the
execution and delivery of the Loan Documents and the Transaction Documents and
the consummation of the transactions contemplated herein or therein or the
implementation of the Plan of Reorganization, (ii) any permitted payment on, or
with respect to, Capital Stock of PCI held by creditors of PCI, the Borrower or
any other Obligor, (iii) any issuance of securities, or other payments, awards
or grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved by the
Board of Directors of PCI and the Borrower pursuant to and consistent with the
MEIP, (iv) loans or advances to employees in the ordinary course of business
consistent with past practices, which together with such other investments as
are referred to in clause (ix) of the definition of Permitted Investments, do
not exceed $500,000 in the aggregate at any one time outstanding, (v) the
payment of fees and compensation to, and indemnity provided on behalf of,
officers, directors, employees or consultants of PCI, the Borrower or any of
their respective Subsidiaries, as determined by the Board of Directors of PCI,
the Borrower or any of their respective Subsidiaries in good faith, or (vi)
employment agreements entered in the ordinary course of business on an
arm's-length basis, and (vii) transactions permitted pursuant to Section 7.2.3.
SECTION 7.2.9 Impairment of Security Interest(a) . (a) No Obligor will,
nor will it cause or permit any of its Obligor Subsidiaries to, take or omit to
take any action which
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action or omission might or would have the result of affecting or impairing the
Liens and security interest in favor of the Collateral Agent for the benefit of
the Secured Parties with respect to the Collateral and no Obligor will grant,
nor will it cause or permit any Obligor Subsidiary to grant, to any Person, or
suffer any Person to have any interest whatsoever in the Collateral, in each
case other than as otherwise permitted by this Agreement, the New Tranche A
Notes Indenture, the New Tranche B Notes Indenture, the Term Notes, the New
Tranche A Notes, the New Tranche B Notes and the Security Documents.
(b) No Obligor will, and nor will it cause or permit any of its Obligor
Subsidiaries to, enter into any agreement or instrument that by its terms
requires that the proceeds received from any sale of Collateral be applied to
repay, redeem, defease or otherwise acquire or retire any Indebtedness of any
Person, other than pursuant to this Agreement, the New Tranche A Notes
Indenture, the New Tranche B Notes Indenture, the Term Notes, the New Tranche A
Notes, the New Tranche B Notes and the Security Documents, or any instrument
governing Indebtedness permitted to be secured by a Lien on the Collateral
pursuant to Section 7.2.2.
SECTION 7.2.10 Stock of Subsidiaries. No Obligor and no Obligor Subsidiary
(a) shall, nor shall it permit any of its Wholly-Owned Subsidiaries to,
transfer, convey, sell or otherwise dispose of any Capital Stock of such
Wholly-Owned Subsidiary to any Person (other than to any Obligor, any Obligor
Subsidiary or another such Wholly-Owned Subsidiary), unless (i) such transfer,
conveyance, sale or other disposition is of all the Capital Stock of such
Wholly-Owned Subsidiary, and (ii) the Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 7.2.6 (unless such disposition does not constitute an Asset Sale
hereunder), and (b) shall permit any Wholly-Owned Subsidiary of any Obligor or
Obligor Subsidiary to issue any of its Capital Stock (other than, if necessary,
Capital Stock constituting directors' qualifying shares or interests held by
directors or shares or interests required to be held by foreign nationals, to
the extent mandated by applicable law) to any Person other than to any Obligor
or another Wholly-Owned Subsidiary of any Obligor.
SECTION 7.2.11 Sale and Leaseback. No Obligor shall, nor shall it permit
any of its Obligor Subsidiaries to, enter into any Sale and Leaseback
Transaction unless (a) at the time of the occurrence of such transaction and
after giving effect to such transaction and (x) in the case of a Sale and
Leaseback Transaction which is a Capitalized Lease Obligation, giving effect to
the Indebtedness in respect thereof, the Obligor or any Obligor Subsidiary
entering into such transaction will remain in compliance with the provisions of
Section 7.2.1(d), and (y) in the case of any other Sale and Leaseback
Transaction, giving effect to the Attributable Indebtedness in respect thereof,
the aggregate Attributed Indebtedness of the Obligors and the Obligor
Subsidiaries, taken as a whole, does not exceed $1,000,000, (b) at the time of
the occurrence of such transaction such Obligor or Obligor Subsidiary could
incur Indebtedness secured by a Lien on property in a principal amount equal to
or exceeding the Attributable Indebtedness in respect of such Sale and Leaseback
Transaction pursuant to Section 7.2.2, and (c) the transfer of assets in such
Sale and Leaseback Transaction is permitted by, and the Borrower will apply the
proceeds of such transaction in compliance with, Section 7.2.6.
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SECTION 7.2.12 Nature of Business, Organizational Documents and Capital
Structure and New Subsidiaries. No Obligor shall, nor shall it cause or permit
any of its Obligor Subsidiaries to, (a) engage directly or indirectly in any
business activity other than in a Related Business, (b) amend or modify any
provision of its Organizational Documents except to the extent such amendment
could not reasonably be expected to have a Material Adverse Effect, or (c)
change its legal or capital structure other than as otherwise permitted under
Section 7.2.5.
SECTION 7.2.13 Fiscal Year. Each of PCI and the Borrower will not change
its Fiscal Year.
SECTION 7.2.14 Capital Expenditures. Each of PCI and the Borrower shall
not, and shall cause each of its Subsidiaries not to, permit Capital
Expenditures for PCI, the Company and their respective Subsidiaries, taken as a
whole, to exceed:
(a) $30,000,000 for the Borrower's Fiscal Year commencing January 1,
2002 and ending on December 31, 2002; and
(b) for each subsequent Fiscal Year of the Borrower up to and
including the Fiscal Year of the Company ending on December 31, 2006,
$30,000,000 plus the Cumulative Capital Expenditure Deficit for such
Fiscal Year of the Borrower.
ARTICLE VIII
GUARANTY
SECTION 8.1.1 Guaranty; Limitation of Liability. (a) Each Guarantor,
jointly and severally, hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or on
any date of a required or optional prepayment or by acceleration, demand or
otherwise, of all Obligations of the Borrower now or hereafter existing under or
in respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such Obligations being the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including, without
limitation, reasonable fees and expenses of counsel) incurred by the
Administrative Agent, the Collateral Agent or the Lenders in enforcing any
rights under each Guaranty or any other Loan Document. Without limiting the
generality of the foregoing, each Guarantor's liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
the Borrower to the Administrative Agent, the Collateral Agent or the Lenders
under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower.
(b) Each Guarantor, and by its acceptance of this Guaranty, the
Administrative Agent, the Collateral Agent and each Lender, hereby confirms that
it is the intention of
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all such Persons that this Guaranty and the Obligations of each Guarantor
hereunder not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar foreign, federal or state law to the extent
applicable to this Guaranty and the Obligations of each Guarantor hereunder. To
effectuate the foregoing intention, the Administrative Agent, the Collateral
Agent and the Lenders and the Guarantors hereby irrevocably agree that the
Obligations of each Guarantor under this Guaranty at any time shall be limited
to the maximum amount as will result in the Obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance.
(c) Each Guarantor hereby unconditionally and irrevocably agrees that in
the event any payment shall be required to be made to the Administrative Agent,
the Collateral Agent or any Lender under this Guaranty or any other guaranty,
such Guarantor will contribute, to the maximum extent permitted by law, such
amounts to each other Guarantor and any other guarantor or surety so as to
maximize the aggregate amount paid to the Administrative Agent, the Collateral
Agent and the Lenders under or in respect of the Loan Documents.
SECTION 8.1.2 Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent, the Collateral Agent or any Lender with respect thereto.
The obligations of each Guarantor under or in respect of this Guaranty are
independent of the Guaranteed Obligations or any other Obligations of any other
Obligor under or in respect of the Loan Documents, and a separate action or
actions may be brought and prosecuted against each Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Borrower,
any other Guarantor or any of their respective Subsidiaries or whether the
Borrower, any other Guarantor or any of their respective Subsidiaries is joined
in any such action or actions. The liability of each Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional irrespective of, and
each Guarantor hereby irrevocably waives any defenses it may now have or
hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations or any other Obligations of
any other Obligor under or in respect of the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Obligor or any of its
Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any Collateral or
any other collateral, or any taking, release or amendment or waiver of, or
consent to departure from, any other guaranty, for all or any of the Guaranteed
Obligations;
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(d) any manner of application of Collateral or any other collateral, or
proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any Collateral or any other collateral for all or
any of the Guaranteed Obligations or any other Obligations of any Obligor under
the Loan Documents any other assets of any Obligor or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate structure or
existence of any Obligor or any of its Subsidiaries;
(f) any failure of any of the Administrative Agent, the Collateral Agent
or any Lender to disclose to any Obligor any information relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Obligor now or hereafter known to the
Administrative Agent, the Collateral Agent or any Lender (each Guarantor waiving
any duty on the part of the Administrative Agent, the Collateral Agent or any
Lender to disclose such information);
(g) the failure of any other Person to execute or deliver this Guaranty,
any Guaranty Supplement or any other guaranty or agreement or the release or
reduction of liability of any Guarantor or other guarantor or surety with
respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, an statute of
limitations) or any existence of or reliance on any representation by the
Administrative Agent, the Collateral Agent or any Lender that might otherwise
constitute a defense available to, or a discharge of, any or any Obligor or any
other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent, the Collateral Agent,
or any Lender or any other Person upon the insolvency, bankruptcy or
reorganization of the Borrower or any other Obligor or otherwise, all as though
such payment had not been made.
SECTION 8.1.3 Waivers and Acknowledgements. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Administrative Agent, the Collateral Agent, or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against any Obligor or any Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any right
to revoke this Guaranty and acknowledges that this Guaranty is continuing in
nature and applies to all Guaranteed Obligations, whether existing now or in the
future.
(c) Each Guarantor hereby unconditionally and irrevocably waives to the
extent permitted by law (i) any defense arising by reason of any claim or
defense based upon an election of remedies by the Administrative Agent, the
Collateral Agent, or any Lenders
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that in any manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification rights
of such Guarantor or other rights of such Guarantor to proceed against any of
the other Obligors, any other guarantor or surety or any other Person or any
Collateral and (ii) any defense based on any right of set-off or counterclaim
against or in respect of the Obligations of such Guarantor hereunder.
(d) Each Guarantor acknowledges that the Administrative Agent or the
Collateral Agent may, without notice to or demand upon such Guarantor and
without affecting the liability of such Guarantor under this Guaranty, foreclose
under any mortgage or other security interest by nonjudicial sale, and each
Guarantor hereby waives any defense to the recovery by the Administrative Agent,
the Collateral Agent or the Lenders against such Guarantor of any deficiency
after such nonjudicial sale and any defense or benefits that may be afforded by
applicable law.
(e) Each Guarantor hereby unconditionally and irrevocably waives any duty
on the part of the Administrative Agent, the Collateral Agent, or any Lender to
disclose to such Guarantor any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any other Obligor or any of its Subsidiaries now or hereafter known
by the Administrative Agent, the Collateral Agent, or any Lender.
(f) Each Guarantor acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 8.1.2 and this Section 8.1.3
are knowingly made in contemplation of such benefits.
SECTION 8.1.4 Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower, any other Obligor or any other insider guarantor
that arise from the existence, payment, performance or enforcement of such
Guarantor's Obligations under or in respect of this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Administrative Agent, the Collateral
Agent, or any Lender against the Borrower, any other Obligor or any other
insider guarantor or any Collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrower, any other Obligor or
any other insider guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security on account of such
claim, remedy or right, unless and until all of the Guaranteed Obligations and
all other amounts payable under this Guaranty shall have been paid in full in
cash. If any amount shall be paid to any Guarantor in violation of the
immediately preceding sentence at any time prior to the latest of (a) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty and (b) the full and complete payment and
performance of the Obligations, such amount shall be received and held in trust
for the benefit of the Administrative Agent, the Collateral Agent, and the
Lenders, shall be segregated from other property and funds of
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such Guarantor and shall forthwith be paid or delivered to the Administrative
Agent in the same form as so received (with any necessary endorsement or
assignment) to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Loan Documents, or to be held as Collateral for
any Guaranteed Obligations or other amounts payable under this Guaranty
thereafter arising. If (i) any Guarantor shall make payment to the
Administrative Agent, the Collateral Agent or any Lender of all or any part of
the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Guaranty shall have been paid in full in cash and
(iii) the Obligations shall have been paid and performed completely and fully,
the Administrative Agent, the Collateral Agent, and the Lenders will, at such
Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment made by such
Guarantor pursuant to this Guaranty.
SECTION 8.1.5 Guaranty Supplements. Upon the execution and delivery by any
Person of a guaranty supplement in substantially the form of Exhibit F hereto
(each, a "Guaranty Supplement"), (a) such Person shall be referred to as an
"Additional Guarantor" and shall become and be a Guarantor hereunder, and each
reference in this Guaranty to a "Guarantor" shall also mean and be a reference
to such Additional Guarantor, and each reference in any other Loan Document to a
"Guarantor" shall also mean and be a reference to such Additional Guarantor, and
(b) each reference herein to "this Guaranty", "hereunder", "hereof" or words of
like import referring to this Guaranty, and each reference in any other Loan
Document to the "Guaranty", "thereunder", "thereof" or words of like import
referring to this Guaranty, shall mean and be a reference to this Guaranty as
supplemented by such Guaranty Supplement.
SECTION 8.1.6 Subordination. Each Guarantor hereby subordinates any and
all debts, liabilities and other obligations owed to such Guarantor by each
other Obligor (the "Subordinated Obligations") to the Guaranteed Obligations to
the extent and in the manner hereinafter set forth in this Section 8.1.6.
(a) Prohibited Payments, Etc. Except during the continuance of any Event
of Default (including the commencement and continuation of any proceeding under
any Bankruptcy Law relating to any other Obligor), each Guarantor may receive
regularly scheduled payments from any other Obligor on account of the
Subordinated Obligations. After the occurrence and during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any Bankruptcy Code relating to any other Obligor), however, unless the
Required Lenders otherwise agree, no Guarantor shall demand, accept or take any
action to collect any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any proceeding under any
Bankruptcy Law relating to any other Obligor, each Guarantor agrees that the
Administrative Agent, the Collateral Agent, and the Lenders shall be entitled to
receive payment in full in cash of all Guaranteed Obligations (including all
interest and expenses
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accruing after the commencement of a proceeding under any Bankruptcy Law,
whether or not constituting an allowed claim in such proceeding ("Post Petition
Interest")) before such Guarantor receives payment of any Subordinated
Obligations.
(c) Turn-Over. After the occurrence and during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Obligor), each Guarantor shall,
if the Administrative Agent so requests, collect, enforce and receive payments
on account of the Subordinated Obligations as trustee for the Administrative
Agent, the Collateral Agent, and the Lenders and deliver such payments to the
Administrative Agent on account of the Guaranteed Obligations (including all
Post Petition Interest as referred to in Section 8.1.6(b)), together with any
necessary endorsements or other instruments of transfer, but without reducing or
affecting in any manner the liability of such Guarantor under the other
provisions of this Guaranty.
SECTION 8.1.7 Continuing Guaranty; Assignments. This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the
latest of (i) the payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Guaranty and (ii) the payment and performance
in full of all the Obligations of all the Obligors under any Loan Document, (b)
be binding upon each Guarantor, its successors and assigns permitted by this
Agreement, and (c) inure to the benefit of and be enforceable by the
Administrative Agent, the Collateral Agent, and the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of clause
(c) of the immediately preceding sentence, the Administrative Agent, the
Collateral Agent or any Lender may assign or otherwise transfer all or any
portion of its rights under this Guaranty (including, without limitation, all or
any portion of its Term Notes held by it) to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to the Administrative Agent, the Collateral Agent, or such Lender herein
or otherwise, in each case as and to the extent provided in Section 11.11. No
Guarantor shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Administrative Agent, the
Collateral Agent and each of the Lenders and New Tranche A Notes Holders.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default. Each of the following events or
occurrences described in this Section 9.1 shall constitute an "Event of
Default".
SECTION 9.1.1 Non-Payment of Obligations. (a) The Borrower shall default
in the payment or prepayment (optional or mandatory) of any principal of any
Term Loan when due (whether by acceleration or otherwise), or (b) the Borrower
shall fail to pay any interest, fee or penalty on the Term Loans, or any other
amount payable hereunder, within three (3) days after any such interest or other
amount becomes due in accordance with the terms hereof, or (c) any other Obligor
shall default (and such default shall continue unremedied for a period of three
(3) days) in the payment when due of any fee
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with respect to any Term Loan or any other monetary Obligation (other than those
covered by clauses (a) or (b) above).
SECTION 9.1.2 Breach of Warranty. Any representation or warranty of any
Obligor (including the Borrower) made or deemed to be made hereunder or in any
other Loan Document executed by it, or pursuant to or in respect of the New
Tranche A Notes Indenture (or any of the guaranties thereunder), the New Tranche
A Notes, the New Tranche B Notes Indenture (or any of the guaranties
thereunder), the New Tranche B Notes or in any other writing or certificate
(including each Closing Date Certificate) furnished by or on behalf of any
Obligor (including the Borrower) for the purposes of or in connection with this
Agreement, such other Loan Document (including any certificates delivered
pursuant to Article V) or pursuant to or in respect of the New Tranche A Notes
Indenture (or any of the guaranties thereunder), the New Tranche A Notes, the
New Tranche B Notes Indenture (or any of the guaranties thereunder) or the New
Tranche B Notes is or shall be incorrect when made or deemed made in any
material respect.
SECTION 9.1.3 Non-Performance of Certain Covenants and Obligations. Any
Obligor (including the Borrower) shall default in the due performance and
observance of any of its obligations under Sections 7.1.2, 7.1.7, and 7.2.
SECTION 9.1.4 Non-Performance of Other Covenants and Obligations. Any
Obligor (including the Borrower) shall default in the due performance and
observance of any other agreement, covenant or condition contained herein or in
any other Loan Document executed by it, and such default shall continue
unremedied for a period of 30 days after notice thereof shall have been given to
the Borrower by the Administrative Agent specifying such default and demanding
that it be remedied.
SECTION 9.1.5 Disaffirmation of Obligations. Any Obligor (including the
Borrower) shall deny, disaffirm or repudiate its obligations under this
Agreement or any other Loan Document (including any Guaranty), the New Tranche A
Notes Indenture (including any guaranty thereunder), the New Tranche A Notes,
the New Tranche B Notes Indenture (including any guaranty thereunder), the New
Tranche B Notes or the Registration Rights Agreement, or any material provision
of any Loan Document, the New Tranche A Notes Indenture (including any guaranty
thereunder), the New Tranche A Notes, the New Tranche B Notes Indenture
(including any guaranty thereunder), the New Tranche B Notes or the Registration
Rights Agreement shall cease to be valid or binding or any Obligor shall so
assert in writing.
SECTION 9.1.6 Effectiveness and Enforceability of Guarantees. The Guaranty
of any Guarantor for any reason ceases to be, or is asserted by any Guarantor or
the Borrower not to be, in full force and effect or enforceable in accordance
with its terms, except to the extent contemplated in the Guaranty.
SECTION 9.1.7 Default. A default shall occur (a) in the payment when due,
whether by acceleration or otherwise, of any amount (including principal,
premium or interest) in respect of Indebtedness of any Obligor (including the
Borrower), under the New Tranche B Notes Indenture, the New Tranche B Notes, the
New Tranche A Notes
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Indenture, the New Tranche A Notes or in respect of any other Indebtedness of
any Obligor (including the Borrower) but not including the Indebtedness
described in Section 9.1.1 (subject only to any applicable grace period pursuant
to the terms of such Indebtedness), having a principal amount equal to or in
excess of $500,000 in respect of an individual Indebtedness or having principal
amounts equal to or in excess of $1,000,000 in the aggregate in respect of more
than one individual Indebtedness taken as a whole, or (b) a default shall occur
in the performance or observance of any obligation or condition with respect to
such Indebtedness if the effect of such default is to accelerate the maturity of
any such Indebtedness or such default shall continue unremedied for any
applicable period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its expressed maturity, or (c) a
default or an event of default shall occur in the performance or observance of
any obligation or condition of any agreement (including any Transaction
Document) to which any Obligor is party or by which it is bound and such default
or event of default could reasonably be expected to have a Material Adverse
Effect.
SECTION 9.1.8 Liens. A warrant of attachment or execution or similar
process shall be issued or levied against the property of any Obligor or Obligor
Subsidiary having an aggregate value in excess of $1,000,000 which is not stayed
or lifted within thirty (30) days.
SECTION 9.1.9 Judgments. A final judgment is, or final judgments are,
entered by a court or courts of competent jurisdiction against any Obligor or
any Obligor Subsidiary and such judgment or judgments remain undischarged,
unbonded or unstayed for a period of thirty (30) days; provided that the
aggregate of all such judgments exceeds $1,000,000 or any such individual
judgement exceeds $500,000 (other than, in each case, any judgment as to which,
and only to the extent that, a reputable insurance company has acknowledged,
whether subject to its customary reservation of rights or otherwise, coverage of
such claim in writing).
SECTION 9.1.10 Bankruptcy, Insolvency, etc.
(a) Any Obligor or any Obligor Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case in which it is a debtor,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) admits in writing its inability to pay debts as the same
become due; or
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(b) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against any Obligor or any Obligor
Subsidiary in an involuntary case in which it is a debtor,
(ii) appoints a Custodian of any Obligor or any Obligor
Subsidiary or for all or substantially all of its property,
(iii) orders the liquidation of any Obligor or any Obligor
Subsidiary,
and the order or decree remains unstayed and in effect for sixty days; or
(c) commits or suffers to occur a Canadian Act of Bankruptcy.
SECTION 9.1.11 Impairment of Security, etc. Any of the Security Documents
ceases to give the Collateral Agent a valid and perfected Lien of the priority
required thereby or the rights, powers and privileges expressed to be created
thereby (other than in accordance with their respective terms or if released by
the Collateral Agent in accordance with the terms hereof), or any of the
Security Documents is declared null and void, or any Obligor denies any of its
obligations under any of the Security Documents or any Collateral becomes
subject to any Lien other than the Liens created or permitted by the Security
Documents or this Agreement or any Collateral (or part thereof) is seized or
taken by any governmental agency or authority, which taking or seizure could
reasonably be expected to have a Material Adverse Effect.
SECTION 9.1.12 ERISA Default. The aggregate minimum required contribution
amount for any year with respect to all Single Employer Plans as calculated in
the applicable actuarial valuation reports shall exceed $5 million or one or
more ERISA Events shall occur or exist with respect to any Plan, which could
reasonably be expected to subject any Obligor, Obligor Subsidiary or ERISA
Affiliate, individually or in the aggregate, to a liability equal to or in
excess of $500,000 in respect of a single ERISA Event or $1,000,000 in the
aggregate in respect of more than one ERISA Event.
SECTION 9.2. Action if Bankruptcy, etc. If any Event of Default described
in clause (a) or (b) of Section 9.1.10 shall occur, the outstanding principal
amount of all outstanding Term Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand, and the other rights and remedies of the Lenders shall be as set forth
in the Common Security and Intercreditor Agreement.
SECTION 9.3. Action if Other Event of Default. If any Event of Default
(other than an Event of Default described in clause (a) or (b) of Section
9.1.10) shall occur for any reason, whether voluntary or involuntary, and be
continuing, then the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrower (or the Lenders and New Tranche A Notes
Holders together holding at least 25% of the aggregate principal amount of the
Term Loans and New Tranche A Notes
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then outstanding shall by notice to the Administrative Agent and the Borrower)
declare all or any portion of the outstanding principal amount of the Term Loans
and other Obligations to be due and payable, whereupon the full unpaid amount of
such Term Loans and other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further notice, demand
or presentment, and the other rights and remedies of the Lenders shall be as set
forth in the Common Security and Intercreditor Agreement.
ARTICLE X
THE ADMINISTRATIVE AGENT; THE COLLATERAL AGENT
SECTION 10.1. Appointment of Administrative Agent. Each Lender hereby
irrevocably appoints Xxxxx Fargo as its Administrative Agent under and for the
purposes of this Agreement, the Term Notes and each other Loan Document. Each
Lender authorizes the Administrative Agent to act on behalf of such Lender under
this Agreement, the Term Notes and each other Loan Document and, in the absence
of other written instructions from the Required Lenders received from time to
time by the Administrative Agent (with respect to which the Administrative Agent
agrees that it will comply, except as otherwise provided in this Section or as
otherwise advised by counsel), to exercise such powers hereunder and thereunder
as are specifically delegated to or required of the Administrative Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto. Except as set forth in Section 10.4, the provisions of this
Article X are solely for the benefit of the Administrative Agent, the Collateral
Agent (as applicable) and the Lenders, and no Obligor shall have any rights as a
third-party beneficiary of any of the provisions hereof. In performing its
function and duties under this Agreement and each other Loan Document, the
Administrative Agent shall act solely on behalf of itself, the Collateral Agent
and the Lenders and the Administrative Agent does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Obligor.
SECTION 10.2. Nature of Duties of the Administrative Agent. The
Administrative Agent shall have no duties, obligations or responsibilities
except those expressly set forth in this Agreement and each other Loan Document.
Neither the Administrative Agent nor any of its officers, directors, employees
or agents shall be liable for any action taken or omitted by it as such
hereunder or under each other Loan Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct
to the extent a court of competent jurisdiction shall have so determined by a
final non-appealable judgment. The duties of the Administrative Agent shall be
mechanical and administrative in nature; the Administrative Agent shall not have
by reason of this Agreement or any other Loan Document a fiduciary relationship
in respect of any Lender; and nothing in this Agreement or any other Loan
Document, expressed or implied, is intended to or shall be so construed as to
impose upon the Administrative Agent any obligations in respect of this
Agreement or any other Loan Document except as expressly set forth herein or
therein. No duty to act, or refrain from acting, and no other obligation
whatsoever, shall be implied on the basis of or
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imputed in respect of any right, power or authority granted to the
Administrative Agent or shall become effective in the event of any temporary or
partial exercise of such rights, power or authority.
SECTION 10.3. General Immunity. Neither the Administrative Agent nor any
of its directors, officers, agents, attorneys or employees shall be liable to
any Lender for any action taken or omitted to be taken by it or them under this
Agreement or any other Loan Document or in connection herewith or therewith
except for its or their own willful misconduct or gross negligence to the extent
a court of competent jurisdiction shall have so determined by a final
non-appealable judgment. Without limiting the generality of the foregoing, the
Administrative Agent: (a) shall not be responsible to the Lenders for any
recitals, statements, warranties or representations under this Agreement or any
other Loan Document or any agreement or document relative hereto or thereto or
for the financial or other condition of any Obligor, (b) shall not be
responsible for the authenticity, accuracy, completeness, value, validity,
effectiveness, due execution, legality, genuineness, enforceability,
collectibility or sufficiency of this Agreement or any other Loan Document or
any other agreements or any assignments, certificates, requests, financial
statements, projections, notices, schedules or opinions of counsel executed and
delivered pursuant hereto or thereto, (c) shall not be bound to ascertain or
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or any other Loan Document on the part of any
Obligor or of any of the terms of any such agreement by any party hereto or
thereto and shall have no duty to inspect the property (including the books and
records) of any Obligor, (d) shall have no obligation whatsoever to the Lenders
or to any other Person to assure that the Collateral exists or is owned by an
Obligor or is cared for, protected or insured or that the Liens granted to the
Administrative Agent in any Loan Document or pursuant hereto or thereto have
been properly or sufficiently or lawfully created, perfected, protected,
enforced, realized upon or are entitled to any particular priority, and (e)
shall incur no liability under or in respect of this Agreement or any other Loan
Document or any other document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, cable, telex,
telecopier or similar form of facsimile transmission) believed by the
Administrative Agent to be genuine and signed or sent by the proper party. The
Administrative Agent may consult with legal counsel, independent public
accountants and other experts selected by the Administrative Agent and shall not
be liable for any action taken or omitted to be taken in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 10.4. Successor. The Administrative Agent may resign as such at
any time by giving written notice thereof to the Borrower and all Lenders. The
Administrative Agent may be removed at any time for any or no reason by the vote
of the Required Lenders. Anything in this Agreement to the contrary
notwithstanding, no resignation or removal of the Administrative Agent and no
appointment of a successor administrative agent shall become effective until the
acceptance of appointment by the successor administrative agent in accordance
with this Section 10.4. If the Administrative Agent at any time shall resign or
be removed, Lenders together holding and owed at least 51% of the aggregate
principal amount of the Term Loans then outstanding may, in their absolute
discretion, appoint a successor administrative agent
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which shall thereupon become the Administrative Agent hereunder (provided such
successor administrative agent shall have been approved by the Borrower, which
approval shall not be unreasonably withheld). If an instrument of acceptance by
a successor administrative agent shall not have been delivered to the
Administrative Agent within thirty (30) days after the giving of such notice of
resignation, the resigning Administrative Agent or any Lender may, on behalf of
itself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor administrative agent. Such court
may thereupon, after such notice, if any, as it may deem proper, appoint a
successor administrative agent. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor administrative agent, such
successor administrative agent shall be entitled to receive from the retiring
Administrative Agent such documents of transfer and assignment as such successor
administrative agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Administrative Agent. After any retiring Administrative Agent's resignation
hereunder as the Administrative Agent, the provisions of (a) this Article X
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent under this Agreement, and (b) Section 11.3
and Section 11.4 shall continue to inure to its benefit.
SECTION 10.5. Administrative Agent in its Capacity as Lender. Any
Administrative Agent that is also a Lender under this Agreement shall have the
same rights and powers under this Agreement and each other Loan Document as any
Lender and may exercise the same as though it were not an Administrative Agent.
"Lender" or "Lenders" shall, unless the context otherwise indicates, include any
Administrative Agent in its capacity as a Lender hereunder. The Administrative
Agent, any Lender and their respective affiliates may accept deposits from, lend
money to, and generally engage in any kind of banking or trust business with any
Obligor, as if it were not an Administrative Agent or as if it or they were not
a Lender hereunder and without any duty to account therefor to the other parties
to this Agreement; provided that the obligations of any Obligor under such
transactions shall not be deemed to be Obligations secured by any Collateral
without the prior written agreement of the Required Lenders. In furtherance of
the foregoing, each Lender acknowledges that, as of the date hereof, Xxxxx Fargo
is not a Lender under this Agreement.
SECTION 10.6. Actions by Administrative Agent. (a) The Administrative
Agent may assume that no Event of Default has occurred and is continuing unless
it has received written notice from any Obligor or its independent certified
public accountants or legal counsel stating than an Event of Default has
occurred and is continuing or the nature of the Event of Default, or has
received written notice from a Lender stating that an Event of Default has
occurred and is continuing or the nature of the Event of Default.
(b) The Administrative Agent shall have the right to request instructions
from the Required Lenders by notice to each Lender and each New Tranche A Notes
Holder. If the Administrative Agent shall request instructions from the Required
Lenders with respect to any act or action (including any failure to act) in
connection with this Agreement or any other Loan Document, the Administrative
Agent shall be entitled to refrain from such act or taking such action unless
and until it shall have received
86
instructions from the Required Lenders, and the Administrative Agent shall not
incur liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender or New Tranche A Notes Holder shall have any right of
action whatsoever against the Administrative Agent as a result of the
Administrative Agent acting or refraining from acting hereunder or under any
other Loan Document in accordance with the instructions of the Required Lenders.
The Administrative Agent may give any notice required under Article X hereof
without the consent of any of the Lenders or New Tranche A Notes Holders unless
otherwise directed by the Required Lenders in writing and will, at the direction
of the Required Lenders, give any such notice required under Article X. Except
for any obligation expressly set forth in this Agreement or any other Loan
Document, the Administrative Agent may, but shall not be required to, exercise
its discretion to act or not act, except that such Administrative Agent shall be
required to act or not act upon the instructions of the Required Lenders (unless
all of the Lenders and New Tranche A Notes Holders are required to provide such
instructions as provided in Section 11.1) and those instructions shall be
binding upon the Administrative Agent and all Lenders; provided, however, that
the Administrative Agent shall not be required to act or not act if to do so
would, in the good faith judgment of the Administrative Agent, expose the
Administrative Agent to liability or would be contrary to this Agreement or any
other Loan Document or to applicable law.
SECTION 10.7. Right to Indemnity. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document or in relation hereto or thereto unless it shall first be
indemnified (upon requesting such indemnification) to its satisfaction by the
Lenders against any and all liability and expense which it may incur by reason
of taking or continuing to take any such action. The Lenders further agree to
indemnify the Administrative Agent ratably in accordance with their pro rata
holding of the Term Loans for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or the other Loan Documents or the transactions contemplated
hereby or thereby, or the enforcement of any of the terms hereof or thereof or
of any other documents, and either not indemnified by PCI or the Borrower
pursuant to Section 11.4 or with respect to which PCI or the Borrower has failed
to fully honor its indemnification obligations under Section 11.4; provided,
however, that no such liability, obligation, loss, damage, penalty, action,
judgment, suit, cost, expense or disbursement results from the Administrative
Agent's gross negligence or willful misconduct to the extent a court of
competent jurisdiction shall have so determined by a final non-appealable
judgment. Each Lender agrees to reimburse the Administrative Agent in the amount
of its pro rata share (based on its holding of Term Loans) of any reasonable
out-of-pocket expenses for which the Administrative Agent is entitled to
receive, but has not received, reimbursement pursuant to this Agreement. The
agreements in this Section 10.7 shall survive the payment and fulfillment of the
Obligations and termination of this Agreement.
SECTION 10.8. Collateral Agent. Each Lender consents and agrees to all of
the terms and provisions of the Common Security and Intercreditor Agreement and
the
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Security Documents, as the same may be in effect from time to time or may be
amended, supplemented or otherwise modified from time to time in accordance with
the provisions of the Security Documents and this Agreement, and authorizes and
directs the Collateral Agent to act as mortgagee or secured party with respect
thereto or to act as collateral agent pursuant to the Common Security and
Intercreditor Agreement (including pursuant to the appointment thereof under the
Common Security and Intercreditor Agreement). Among other things, the duties,
obligations and rights of the Collateral Agent are set forth in the Common
Security and Intercreditor Agreement.
SECTION 10.9. Suits to Protect Collateral. Subject to the provisions of
the Common Security and Intercreditor Agreement, the Administrative Agent,
acting at the written direction of the Required Lenders, shall have power to
institute and to maintain, or direct the Collateral Agent to institute and
maintain, such suits and proceedings as the Administrative Agent may deem
expedient to prevent any impairment of the Collateral by any acts which may be
unlawful or in violation of any of the Security Documents or this Agreement, and
such suits and proceedings as the Administrative Agent may deem expedient to
preserve or protect its interest and the interests of the Lenders in the
Collateral (including the power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the Liens of the Collateral Agent in the Collateral or be
prejudicial to the interests of the Lender or the Administrative Agent). Nothing
in this Section 10.9 shall prohibit, restrict or prevent the Lenders and New
Tranche A Notes Holders, upon the vote or consent of the Required Lenders, to
institute such suits or proceedings independently of the Administrative Agent
and/or the Collateral Agent.
SECTION 10.10. Determinations Relating to Collateral. If (a) the
Administrative Agent shall receive any written request from the Borrower or any
other Obligor under any Security Document for consent or approval with respect
to any matter relating to any Collateral or any Obligor's obligations with
respect thereto, or (b) there shall be due to or from the Administrative Agent
under the provisions of any Security Document, any performance or the delivery
of any instrument, or (c) the Administrative Agent shall become aware of any
nonperformance by any Obligor of any covenant or any breach of any
representation or warranty of any Obligor set forth in any Security Document,
then, in each such event, the Administrative Agent shall be entitled, at the
expense of the Borrower, and subject to Section 10.6(b), to hire experts,
consultants, agents and attorneys (including internal counsel) to advise the
Administrative Agent on the manner in which the Administrative Agent should
respond to such request or render any requested performance or response to such
nonperformance or breach. The Administrative Agent shall be fully protected in
the taking of any action recommended or approved by any such expert, consultant,
agent or attorney (including internal counsel) or agreed to by the Required
Lenders pursuant to Section 10.6(b).
SECTION 10.11. Trust Moneys. To the extent Trust Moneys consist of
insurance proceeds or condemnation or other taking awards, any such moneys which
may be used, pursuant to the terms of the Common Security and Intercreditor
Agreement, to
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effect a restoration of the affected Collateral shall be permitted to be
withdrawn by the Borrower and paid by the Collateral Agent in accordance with
the Common Security and Intercreditor Agreement.
SECTION 10.12. Release of Collateral. Each Lender hereby irrevocably
authorizes the Administrative Agent, at its option and in its discretion, to
release any and all Guaranties of the Obligations and any Lien granted to or
held by or for the benefit of the Administrative Agent with respect to any
Obligor or the Collateral (a) upon payment and satisfaction of all Term Loans
and all other Obligations which the Administrative Agent has been notified in
writing have been fully and irrevocably paid and satisfied; (b) constituting
Collateral being sold or disposed of if each of PCI and the Borrower certifies
to the Administrative Agent pursuant to an Officers' Certificate that the sale
or disposition is made in compliance with the terms of this Agreement, the other
Loan Documents and the relevant Transaction Documents (and the Administrative
Agent may rely conclusively on any such certificate, without further inquiry);
(c) constituting property in which any Obligor owned no interest at the time the
Lien was granted and at all times thereafter; or (d) if approved, authorized or
ratified in writing by the Administrative Agent at the direction of all Lenders
and New Tranche A Notes Holders. Upon request by the Administrative Agent at any
time, each Lender and/or each New Tranche A Notes Holder, as the case may be,
will confirm in writing the Administrative Agent's authority to release
particular types or items of Collateral pursuant to this Section 10.12.
SECTION 10.13. Application of Proceeds of Collateral. Subject to the
Common Security and Intercreditor Agreement, the Administrative Agent shall
apply the proceeds of any collection of the Collateral payable to the
Administrative Agent for the benefit of itself and the Lenders, first, to the
payment of all costs and expenses incurred by the Administrative Agent in
connection with such collection or otherwise in connection with this Agreement
or any other Loan Document, including and together with any amounts then due and
payable to the Administrative Agent (in its capacity as such) hereunder
(including any amount then due and payable to the Administrative Agent pursuant
to its rights to indemnification under Sections 11.4 and 10.7), and, second, to
the payment in full of the Obligations then due and payable to the Lenders (such
payment to be distributed among the Lenders pro rata in accordance with the
amount of such Obligations owed to them on the date of such distribution).
SECTION 10.14. Rights and Remedies to be Exercised by Administrative Agent
Only. If any remedy may be exercised with respect to this Agreement or any other
Loan Document or the Collateral, the Administrative Agent shall pursue remedies
designated by the Required Lenders subject to the proviso set forth in Section
10.6(b). Each Lender agrees that no Lender shall have any right individually to
realize upon the security created by this Agreement or any other Loan Document.
SECTION 10.15. Credit Decisions. Each Lender acknowledges that it has,
independently of and without reliance upon the Administrative Agent and each
other Lender, and based on such Lender's review of the financial information of
each Obligor, this Agreement, the other Loan Documents (the terms and provisions
of which being
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satisfactory to such Lender), the Plan of Reorganization and such other
documents, information and investigations as such Lender has deemed appropriate,
made its own decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently of and without reliance upon the
Administrative Agent or any other Lender, and based on such other documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this Agreement
or any other Loan Document. Except as otherwise expressly provided for herein,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs,
financial condition, litigation, liabilities or business of any Obligor.
SECTION 10.16. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by any Obligor pursuant to the terms of this
Agreement (unless concurrently delivered to the Lenders by the Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received for such Lender's account and copies of all other communications
received by the Administrative Agent from any Obligor for distribution to the
Lenders by the Administrative Agent in accordance with the terms of this
Agreement (except to the extent any such Lender shall have provided written
notice to the Administrative Agent that it is not to receive any such documents,
instruments or communications). If such information is so furnished by the
Administrative Agent, the Administrative Agent shall have no duty to confirm or
verify its accuracy or completeness and shall have no liability whatsoever with
respect thereto.
SECTION 10.17. The Administrative Agent. Notwithstanding anything else to
the contrary contained in this Agreement or any other Loan Document, the
Administrative Agent, in its capacity as such, shall have no duties or
responsibilities under this Agreement or any other Loan Document nor any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent in such capacity
except as are explicitly set forth herein or in the other Loan Documents.
SECTION 10.18. Agreement to Cooperate. Each Lender agrees to cooperate to
the end that the terms and provisions of this Agreement may be promptly and
fully carried out. The Lenders also agree, from time to time, at the request of
the Administrative Agent, to execute and deliver any and all other agreements,
documents or instruments and to take such other actions, all as may be
reasonably necessary or desirable to effectuate the terms, provisions and intent
of this Agreement and the other Loan Documents.
SECTION 10.19. Lenders to Act as Agent. If any Collateral or proceeds
thereof at any time comes into the possession or under the control of any
Lender, such Lender shall hold such Collateral or proceeds thereof as agent for
the joint benefit of the Lenders, and will, upon receipt therefor, deliver such
Collateral or proceeds thereof to the Administrative Agent.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by PCI, the Borrower and the Required Lenders; provided, however, that no such
amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action be
taken by all the Lenders or by the Required Lenders shall be effective
unless consented to by each Lender and each New Tranche A Notes Holder;
(b) modify this Section 11.1, or clause (a) of Section 11.10, change
the definition of "Required Lenders", reduce any fees described in Section
3.3, release any Guarantor from its obligations under its Guaranty or
release any Collateral (except in each case as otherwise specifically
provided in this Agreement, such Guaranty or applicable Security Document)
shall be made without the consent of each Lender and each New Tranche A
Notes Holder adversely affected thereby;
(c) extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of principal (or premium) of or interest on or
fees payable in respect of any Term Loan or reduce the principal amount of
or rate of interest on any Term Loan shall be made without the consent of
each of the Lenders and New Tranche A Notes Holders; or
(d) affect the interests, rights or obligations of the
Administrative Agent or the Collateral Agent, unless consented to by the
Administrative Agent or the Collateral Agent, as applicable.
No failure or delay on the part of the Administrative Agent, any Lender or the
holder of any Term Note in exercising any power or right under this Agreement or
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower or any other Obligor in any case shall entitle it to any
notice or demand in similar or other circumstances. No waiver or approval by the
Administrative Agent, any Lender or the holder of any Term Note under this
Agreement or any other Loan Document shall, except as may be otherwise stated in
such waiver or approval, be applicable to subsequent transactions. No waiver or
approval hereunder shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder.
SECTION 11.2. Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or
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facsimile number set forth in its signature page hereto or, in the case of a
Lender that becomes a party hereto after the date hereof, as set forth in the
Lender Assignment Agreement pursuant to which such Lender becomes a Lender
hereunder or at such other address or facsimile number as may be designated by
such party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if transmitted
by facsimile, shall be deemed given when transmitted (and electronic
confirmation of receipt thereof has been received).
SECTION 11.3. Payment of Costs and Expenses. PCI and the Borrower jointly
and severally agree to pay on demand all expenses of the Administrative Agent
(including the fees and out-of-pocket expenses of one or more separate United
States and Canadian counsel to the Administrative Agent (including internal
counsel) and of one or more separate local counsel, if any, who may be retained
by counsel to the Administrative Agent) in connection with
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits (provided that such expenses in connection with such negotiation,
preparation and execution incurred on or prior to the date of the
Confirmation Order shall not be payable hereunder to the extent paid
pursuant to the Confirmation Order or other order of the Bankruptcy Court
in the Chapter 11 Cases), and any amendments, waivers, consents,
supplements or other modifications to this Agreement or any other Loan
Document as may from time to time hereafter be required, whether or not
the transactions contemplated hereby or thereby are consummated;
(b) the filing, recording, refiling, rerecording or registering of
each Mortgage and the other Security Documents and/or any UCC financing
statements relating thereto or any other registration and all amendments,
supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be filed or
recorded or refiled or rerecorded by the terms hereof or of such Mortgage
or Security Documents; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
PCI and the Borrower further jointly and severally agree to pay, and to keep the
Administrative Agent and the Collateral Agent harmless from all liability for,
any stamp or other similar taxes which may be payable in connection with the
execution or delivery of this Agreement, the Term Loans continued and incurred
hereunder or the issuance of the Term Notes or any other Loan Documents. PCI and
the Borrower also jointly and severally agree to reimburse the Administrative
Agent and the Collateral Agent upon demand for all out-of-pocket expenses
(including attorneys' fees and legal expenses (including those of internal
counsel)) incurred by the Administrative Agent or the Collateral Agent in
connection with (x) the negotiation of any restructuring or "work-out", whether
or not consummated, of any Obligations, (y) the enforcement of any
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Obligations, and (z) any litigation relating to the Obligations, this Agreement
or any Loan Document.
SECTION 11.4. Indemnification. In consideration of the execution, delivery
and performance of this Agreement by each Lender party hereto and the
Administrative Agent, PCI and the Borrower hereby jointly and severally, to the
fullest extent permitted under applicable law, indemnify, exonerate and hold the
Administrative Agent and its Affiliates, and each of their respective partners,
officers, directors, employees and agents, and each other Person controlling any
of the foregoing within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act (collectively, the "Indemnified Parties"),
free and harmless from and against any and all actions, causes of action
(including negligence and strict or absolute liability), suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including attorneys' fees and
disbursements (including those of internal counsel) (collectively, the
"Indemnified Liabilities") including as incurred by the Indemnified Parties or
any of them as a result of, or arising out of, or relating to:
(a) the entering into and performance of this Agreement or any other
Loan Document by any of the Indemnified Parties or any other document or
instrument contemplated by any Loan Document, the performance of the
parties thereto of their respective obligations under any Loan Document,
the consummation of the transactions contemplated by any Loan Document or
the use of the proceeds of any Term Loan;
(b) any investigation, litigation or proceeding related to any
environmental cleanup, audit or compliance or the issuance of any order,
demand or directive or any other matter relating to Environmental Laws,
Occupational Safety and Health Laws, the protection of the environment or
the Release or threatened Release by any Obligor or any Obligor Subsidiary
of any Hazardous Material; or
(c) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned, controlled or operated by any Obligor or Obligor
Subsidiary of any Hazardous Material (including any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the control
of, any Obligor or any Obligor Subsidiary;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct to the extent a court of competent jurisdiction
shall have so determined by a final non-appealable judgment. If and to the
extent that the foregoing undertaking may be unenforceable for any reason, PCI
and the Borrower hereby jointly and severally agree to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
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SECTION 11.5. Survival. The obligations of the Obligors under, or in
respect of, Sections 4.1, 11.3 and 11.4, the obligations of the Lenders under
Section 10.1, and the obligations of the parties hereto under Sections 11.9,
11.13 and 11.14 shall in each case survive any termination of this Agreement and
the payment in full of all Obligations. The representations and warranties made
by PCI, the Borrower and each other Obligor in this Agreement and in each other
Loan Document shall survive the execution and delivery of this Agreement and
each such other Loan Document.
SECTION 11.6. Severability. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such other Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this Agreement and of each
other Loan Document are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or such other Loan Document or any
provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SECTION 11.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE TERM
NOTES AND, EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED THEREIN, EACH OTHER
LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement, the Term Notes and
the other Loan Documents constitute the entire understanding among the parties
hereto and thereto with respect to the subject matter hereof and thereof and
supersede any prior agreements, written or oral, with respect thereto.
SECTION 11.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that (a) except as expressly set
forth herein, neither the Borrower nor any other Obligor may assign or transfer
its rights or obligations hereunder without the prior written consent of the
Administrative Agent and all of the Lenders and New Tranche A Notes Holders, and
(b) the rights of sale, assignment and transfer of the Lenders are subject to
Section 11.11.
SECTION 11.11. Sale and Transfer of Term Loans and Term Notes;
Participations in Term Loans and Term Notes. Each Lender may assign, or sell
participations in, its Term Loan or assign its Term Note to one or more other
Persons in accordance with this Section 11.11.
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SECTION 11.11.1 Assignments. Any Lender (the "Assignor Lender"), with
written notice to the Administrative Agent and to the Borrower (but without the
consent of either), may at any time assign and delegate:
(a) to one or more commercial banks or other financial institutions
(including funds engaged in the business of investing in loans) or other
entities or Persons, and
(b) to any of its Affiliates or to any other Lender or to any Person
whose investment manager or investment advisor is the investment manager
or investment advisor of such Lender (each Person described in Section
11.11.1(a) or this Section 11.1.1(b) as being the Person to whom such
assignment and delegation is to be made, being hereinafter referred to as
an "Assignee Lender"), all or any fraction of such Assignor Lender's total
Term Loans in a minimum aggregate amount of (x) $1,000,000, or (y) the
then remaining amount of such Lender's Term Loans; provided, however, that
any such Assignee Lender will comply, if applicable, with the provisions
contained in Section 4.1; and provided further, that, the Borrower, each
other Obligor, the Administrative Agent and the Collateral Agent shall be
entitled to continue to deal solely and directly with such Assignor Lender
in connection with the interests so assigned and delegated to an Assignee
Lender until:
(i) written notice of such assignment and delegation, together
with payment instructions, addresses and related information with
respect to such Assignee Lender, shall have been given to the
Borrower, the Collateral Agent and the Administrative Agent by such
Assignor Lender and such Assignee Lender;
(ii) such Assignor Lender and such Assignee Lender shall have
executed and delivered to the Borrower, the Collateral Agent and the
Administrative Agent, a Lender Assignment Agreement, acknowledged by
the Administrative Agent; and
(iii) the processing fees described below shall have been
paid.
From and after the date that the Administrative Agent acknowledges such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the Assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within ten (10) Business Days after its receipt of notice that
the Administrative Agent has acknowledged an executed the Lender Assignment
Agreement, the Borrower shall execute and deliver to the Administrative Agent
(for delivery to the relevant Assignee Lender) a new Term Note
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evidencing such Assignee Lender's assigned Term Loans and, if the Assignor
Lender has retained Term Loans hereunder, a replacement Term Note in the
principal amount of the Term Loans retained by the Assignor Lender hereunder
(such Term Note to be in exchange for, but not in payment of, that Term Note
then held by such Assignor Lender). Each such Term Note shall be dated the date
of the predecessor Term Note. The Assignor Lender shall xxxx the predecessor
Term Note "exchanged" and deliver it to the Borrower. Accrued interest on that
part of the predecessor Term Note evidenced by the new Term Note, and accrued
fees, shall be paid as provided in the Lender Assignment Agreement. Accrued
interest on that part of the predecessor Term Note evidenced by the replacement
Term Note shall be paid to the Assignor Lender. Accrued interest and accrued
fees shall be paid at the same time or times provided in the predecessor Term
Note and in this Agreement. Such Assignor Lender or such Assignee Lender must
also pay a processing fee to the Administrative Agent upon delivery of any
Lender Assignment Agreement in the amount of $50.00 (fifty dollars), unless such
assignment and delegation is by a Lender to its Affiliate or if such assignment
and delegation is by a Lender to a Federal Reserve Bank, as provided below or is
otherwise consented to by the Administrative Agent. Any attempted assignment and
delegation not made in accordance with this Section 11.11.1 shall be null and
void. Nothing contained in this Section 11.11.1 shall prevent or prohibit any
Lender from pledging its rights under this Agreement and/or its Loans and/or its
Term Note hereunder to a Federal Reserve Bank in support of Borrowings made by
such Lender from such Federal Reserve Bank.
SECTION 11.11.2 Participations. Any Lender may at any time sell to one or
more commercial banks, or other Persons (each such commercial bank and other
Person being herein called a "Participant") participating interests in any of
the Term Loans or other interests of such Lender hereunder; provided, however,
that
(a) no participation contemplated in this Section shall relieve such
Lender from its obligations hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the performance
of such obligations;
(c) the Borrower and each other Obligor and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and each of
the other Loan Documents; and
(d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, agree to (i) any
reduction in the interest rate or amount of fees that such Participant is
otherwise entitled to, (ii) a decrease in the principal amount, or an
extension of the final Stated Maturity Date, of any Term Loan in which
such Participant has purchased a participating interest, or (iii) a
release of
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the Collateral under the Loan Documents or of any Guarantor under the
Guaranty, in each case except as otherwise specifically provided in a Loan
Document.
Each Obligor acknowledges and agrees that each Participant, for purposes of
Sections 4.1, 4.3, 4.4, 11.3 and 11.4., shall be considered a Lender.
SECTION 11.12. Other Transactions. Nothing contained herein shall preclude
the Administrative Agent, or the Collateral Agent or any Lender from engaging in
any transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with any Obligor or any of its Affiliates in which such
Obligor or such Affiliate is not restricted hereby from engaging with any other
Person.
SECTION 11.13. Forum Selection and Consent to Jurisdiction. ANY DISPUTE
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT, THE LENDERS, THE BORROWER OR ANY OTHER OBLIGOR RELATING
THERETO SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY (TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW) IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY,
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
EACH OF PCI AND THE BORROWER AND EACH OTHER OBLIGOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK,
NEW YORK COUNTY, AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH DISPUTE AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH DISPUTE. EACH OF PCI AND THE BORROWER AND EACH OTHER OBLIGOR
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH OF
PCI AND THE BORROWER AND EACH OTHER OBLIGOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH DISPUTE HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY OF PCI, THE BORROWER OR
ANY OTHER OBLIGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS
97
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH OF
PCI, THE BORROWER AND SUCH OTHER OBLIGOR HEREBY IRREVOCABLY WAIVES (TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW) SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11.14. Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT, THE LENDERS, PCI, THE BORROWER AND EACH OTHER OBLIGOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, THE LENDERS, PCI, THE BORROWER OR OTHER OBLIGOR
RELATING THERETO. EACH OF PCI AND THE BORROWER AND EACH OTHER OBLIGOR
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH LOAN DOCUMENT TO WHICH IT
IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH LOAN
DOCUMENT. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO WAIVES ANY RIGHT IT MAY
HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS SECTION 11.14 ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR IN ADDITION TO, ACTUAL DAMAGES.
SECTION 11.15. Power of Attorney for Collateral in Quebec. For the
purposes of the security on the Collateral located in Quebec, the validity,
publication and perfection of which is governed by the laws of the Province of
Quebec, each of the Administrative Agent and the Lenders hereby irrevocably
grants to the Collateral Agent, for the purposes of holding, on behalf of and
for the benefit of all present and future Administrative Agents and the Lenders,
the security constituted by PCI Chemicals Canada Company under the Quebec
Mortgage and Security Agreement executed by an authorized representative of PCI
Chemicals Canada Company in respect of Collateral located in Quebec, a power of
attorney within the meaning of the Civil Code of Quebec (the "Power of
Attorney") for all present and future Administrative Agents and Lenders. The
Collateral Agent hereby accepts such Power of Attorney for the purposes of
holding the security created under the Quebec Mortgage and Security Agreement on
behalf of and for the benefit of all present and future Administrative Agents
and the Lenders. To the extent that any such Person becomes a Lender or an
Administrative Agent, whether by assignment or otherwise, such Person shall be
automatically deemed to have ratified and consented to the irrevocable granting
by the Administrative Agent and the Lenders to the
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Collateral Agent of the Power of Attorney constituted hereunder. Each Lender
agrees (i) with the other Lenders that it will not, without the prior consent of
the Administrative Agent and the Lenders, take or obtain any Lien on any
property of PCI Chemicals Canada Company to secure the Obligations of the
Borrower hereunder, except for the benefit of the Collateral Agent for and on
behalf of, the Administrative Agent and the Lenders, or as may otherwise be
required by law; and (ii) that, notwithstanding the provisions of Section 32 of
An Act respecting Special Powers of Legal Persons (Quebec), the Collateral Agent
may, as a Person holding the Power of Attorney of the Administrative Agent and
Lenders, acquire any title to indebtedness secured by any hypothec in its favor
related to the Loan Documents or any other document contemplated hereunder.
SECTION 11.16. Acknowledgement. Notwithstanding anything contained herein
to the contrary, the Lenders hereby acknowledge that (i) any and all prepayments
of the Terms Loans (whether mandatory or voluntary) shall be made pro rata
between the Lenders hereunder and the Tranche A Holders (as such term is defined
in the Common Security and Intercreditor Agreement), in accordance with the
terms of the Common Security and Intercreditor Agreement, and (ii) holders of
PCA U.S. Secured Term and Note Claims (as such term is defined in the Plan of
Reorganization) that are Allowed (as such term is defined in the Plan of
Reorganization) and PCA Canadian Secured Term and Note Claims (as such term is
defined in the Plan of Reorganization) that are Allowed were given the option,
as a matter of convenience for certain such holders, of taking either Term Notes
or New Tranche A Notes, and in that regard, there is to be no economic or legal
distinction between the treatment of Tranche A Holders and the Lenders hereunder
(other than with respect to the nature of the debt obligation held by such
Person).
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
PIONEER AMERICAS LLC,
as Borrower
By:______________________________
Name:
Title:
PIONEER COMPANIES, INC.,
as Parent of the Borrower
By:______________________________
Name:
Title:
Guarantors
PIONEER COMPANIES, INC.,
PCI CHEMICALS CANADA
COMPANY,
IMPERIAL WEST CHEMICAL CO.,
KEMWATER NORTH AMERICA
COMPANY,
PIONEER WATER TECHNOLOGIES,
INC.,
KWT, INC.
By:______________________________
Name:
Title:
PIONEER (EAST), INC.,
PIONEER LICENSING, INC.
By:______________________________
Name:
Title:
Address for Notices to the
Borrower, PCI and
Guarantors:
PIONEER COMPANIES, INC.
000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000,
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxxxx, Esq.
Vice President, General Counsel
and Secretary
Facsimile: 000-000-0000
with a copy to:
Attention:
Facsimile:
LENDER:
_____________________________________
Name:
Title:
Term Loan Amount $ [-] ( %)
Address for Notices to Lender:
Attention:
Facsimile:
with a copy to:
Attention:
Facsimile:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Administrative Agent
By:___________________________________
Name:
Title:
Address for Notices to Administrative
Agent:
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: [-]
Facsimile: 000-000-0000
SCHEDULE I - DISCLOSURE SCHEDULE
EXHIBIT A
Form of Term Note
EXHIBIT B
[Intentionally Omitted]
EXHIBIT C
Forms of Mortgages
EXHIBIT D
Form of Common Security and Intercreditor Agreement
EXHIBIT E
Forms of Closing Date Certificates
EXHIBIT F
Form of Guaranty Supplement
EXHIBIT G
Form of Lender Assignment Agreement
EXHIBIT H
Form of Election Form
