NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 4.3
NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (hereinafter referred to as the
“Amendment”) is made and entered into as of the 19th day of March, 2007, between and among,
on the one hand, the lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each individually as a
“Lender” and collectively as the “Lenders”), XXXXX FARGO FOOTHILL, INC., a
California corporation (f/k/a Foothill Capital Corporation), as the arranger and administrative
agent for the Lenders (“Agent”), and, on the other hand, PCI CHEMICALS CANADA COMPANY, a
Nova Scotia unlimited liability company, and PIONEER AMERICAS LLC, a Delaware limited liability
company (hereinafter each individually is referred to as a “Borrower” and collectively as
the “Borrowers”).
RECITALS
A. Agent, the Lenders and the Borrowers have entered into that certain Loan and Security
Agreement, dated as of December 31, 2001 (as amended from time to time the “Agreement”).
B. Agent, the Lenders and the Borrowers desire to amend the Agreement as hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used in this Amendment, to the extent
not otherwise defined herein, shall have the same meaning as in the Agreement, as amended hereby.
ARTICLE II
AMENDMENTS
AMENDMENTS
Section 2.01. Amendments to Section 1.1 of the Agreement.
(a) The term “2007 Indenture” and its definition are hereby added to and made a part of
Section 1.1 of the Agreement and shall read as follows:
“ ‘2007 Indenture’ means that certain Indenture dated as of March 26,
2007 between Parent and Xxxxx Fargo Bank, N.A., as Trustee, relating to the issuance
of the 2007 Subordinated Notes.”
(b) The term “2007 Indenture Documents” and its definition are hereby added to and made
a part of Section 1.1 of the Agreement and shall read as follows:
“ ‘2007 Indenture Documents’ means the 2007 Indenture, the 2007
Subordinated Notes and all other agreements and documents executed in connection
with the 2007 Indenture.”
(c) The term “2007 Subordinated Notes” and its definition are hereby added to and made
a part of Section 1.1 of the Agreement and shall read as follows:
“ ‘2007 Subordinated Notes means the 2.75 % Convertible Senior
Subordinated Notes due 2027, issued by the Parent in a principal amount of up to
$120,000,000.00.”
(d) The term “Indenture Documents” in Section 1.1 of the Loan Agreement is
hereby amended in its entirety to hereafter read as follows:
“ ‘Indenture Documents’ means the Tranche B Indenture, the Tranche B
Indenture Documents, the Term Loan Agreement, the Term Loan Agreement Documents, and
the 2007 Indenture Documents.”
(e) The terms “Tranche A Indenture” and “Tranche A Documents” and their respective
definitions are hereby deleted from the Agreement in their entirety.
(f) The term “Tranche B Documents” in Section 1.1 of the Agreement is hereby
amended in its entirety to hereafter read as follows:
“ ‘Tranche B Indenture Documents’ has the meaning set forth in the
Tranche B Indenture.”
Section 2.02. Amendment to Section 2.12(a)(ii). Subsection (ii) of Section 2.12(a) of
the Agreement is hereby amended to hereafter read as follows:
“(ii) the Letter of Credit Usage would exceed $25,000,000.00, or”
Section 2.03. Amendment to Section 5.22. Section 5.22 of the Agreement is
hereby amended in its entirety to hereafter read as follows:
“5.22 Indenture Documents. The Indenture Documents, true and complete
copies of which have been furnished to the Lenders, have been duly authorized,
executed, and delivered by the Borrowers and the Guarantors, and, to the best of
Borrowers’ knowledge, all other parties thereto. The Indenture Documents have not
been amended or otherwise modified, are in full force and effect, and are binding
upon and enforceable against all parties thereto in accordance with their respective
terms. There exists are no default under any of the Indenture Documents by
Borrowers or Guarantors or, to the best of Borrowers’ knowledge, any other party
thereto. The Obligations constitute “senior indebtedness” under the Indenture
Documents and Borrowers and Parent have advised the trustees under the Indenture
Documents that the Obligations constitute “senior indebtedness.”
Section 2.04. Amendment to Section 6.18. Section 6.18 of the Agreement is
hereby amended in its entirety to hereafter read as follows:
“6.18 Indenture Documents. Borrowers shall perform and observe, and
shall cause Guarantors to perform and observe, all the terms and provisions of the
Indenture Documents to be performed and observed by them.”
Section 2.05. Amendment to Section 7.1. Section 7.1 of the Agreement is
hereby amended in its entirety to be hereafter read as follows:
“7.1 Indebtedness. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan Documents,
together with Indebtedness owed to Underlying Issuers with respect to Underlying
Letters of Credit;
(b) Indebtedness comprising Permitted Indebtedness;
(c) Permitted Purchase Money Indebtedness;
(d) refinancings, renewals, or extensions of Indebtedness permitted under
clauses (b), (c) of this Section 7.1 so long as: (i) the terms and conditions of
such refinancings, renewals, or extensions do not, in Agent’s judgment, materially
impair the prospects of repayment of the Obligations by Borrowers or Guarantors or
materially impair the creditworthiness of Borrower or Guarantors, (ii) such
refinancings, renewals, or extensions do not result in an increase in the principal
amount of, or interest rate with respect to, the Indebtedness so refinanced,
renewed, or extended, (iii) such refinancings, renewals, or extensions do not result
in a shortening of the average weighted maturity of the Indebtedness so refinanced,
renewed, or extended, nor are they on terms or conditions, that, taken as a whole,
are materially more burdensome or restrictive to the applicable Borrower or
Guarantor, and (iv) if the Indebtedness that is refinanced, renewed, or extended was
subordinated in right of payment to the Obligations, then the terms and conditions
of the refinancing, renewal, or extension Indebtedness must be include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness;
(e) Notes to Professionals; and
(f) The 2007 Subordinated Notes and other Indebtedness of the Parent under and
pursuant to the 2007 Indenture Documents provided (i) the proceeds of the 2007
Subordinated Notes are used by the Parent, among other things, to repay the
Indebtedness of the Borrowers under the Tranche B Indenture Documents, and (ii) the
terms and conditions of the 2007 Indenture Documents include subordination terms and
conditions that are at least as favorable to the Lender
Group as those that are applicable to the Indebtedness of the Borrowers
evidenced by the Tranche B Indenture Documents.”
Section 2.06. Amendment to Section 7.8. Section 7.8 of the Agreement is
hereby amended in its entirety to hereafter read as follows:
“7.8 Prepayments and Amendments.
(a) Except in connection with a refinancing permitted by Section
7.1(d), prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness
of any Borrower or any Guarantor, other than (i) the Obligations in accordance with
this Agreement and (ii) Indebtedness owing by Borrowers under the Tranche B
Indenture Document to the extent paid with proceeds from Indebtedness incurred by
the Parent under the 2007 Indenture Documents; and
(b) Except in connection with a refinancing permitted by Section 7.1(d),
directly or indirectly, amend, modify, alter, increase, or change any of the terms
or conditions of any agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under Sections 7.1(b), (c), (e), or
(f).”
Section 2.07. Amendment to Section 7.11. Section 7.11 of the Agreement is
hereby amended in its entirety to hereafter read as follows:
“7.11 Distributions. Make any distributions or declare or pay any
dividends (in cash or other property, other than common Stock) on, or purchase,
acquire redeem, or retire any stock of any of the Borrowers or Guarantors, of any
class, whether now or hereafter outstanding; provided, however, so
long as no Default or Event of Default has occurred and is continuing, the foregoing
restrictions shall not apply to:
(a) dividends and distributions payable (i) by Pioneer Americas to PCI
Chemicals and (ii) by PCI Chemicals to the Parent, provided the aggregate amount of
such dividends and distributions together with investments permitted to be made to
the Parent by Pioneer Americas pursuant to Section 7.13(b) do not exceed
$500,000.00 in any calendar year during the term of this Agreement; and
(b) repurchases by the Parent of up to $25,000,000.00 of Parent’s common Stock
during calendar year 2007 provided (i) the repurchases are made by Parent solely
with proceeds of the 2007 Subordinated Notes and (ii) immediately after each such
repurchase by Parent of its common Stock and after giving effect thereto, (aa)
Adjusted EBITDA of the Parent and its Subsidiaries shall be at least $75,000,000.00
and (bb) Liquidity shall be at least $50,000,000.00.”
ARTICLE III
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT
Section 3.01. Conditions. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent, unless specifically waived by Agent:
(a) Agent shall have received the following documents, each in form and substance
satisfactory to Agent:
(i) This Amendment, duly executed by Borrowers, together with the Consent and
Ratification (the “Ratification”) hereto, duly executed by the Guarantors;
(ii) Officers’ Certificates dated as of the date of this Amendment, in form and
substance satisfactory to Agent, certified by the Secretary of the Borrowers and the
Guarantors certifying among other things, that the Borrowers’ and Guarantors’ Board
of Directors have met and have adopted, approved, consented to and ratified
resolutions which authorize the execution, delivery and performance by Borrowers of
this Amendment, and the Guarantors of the Ratification, and each other document,
instrument and agreement executed in connection with or relating to the Agreement,
this Amendment or the Ratification (hereinafter individually referred to as a
“Loan Document” and collectively referred to as the “Loan
Documents”);
(b) The representations and warranties contained herein, in the Agreement, as amended
hereby, and/or in each other Loan Document shall be true and correct as of the date hereof,
as if made on the date hereof;
(c) No Event of Default shall have occurred and be continuing and no Default shall
exist, unless such Event of Default or Default has been specifically waived in writing by
Agent; and
(d) All corporate proceedings taken in connection with the transactions contemplated by
this Amendment and all documents, instruments and other legal matters incident thereto,
shall be satisfactory to Agent.
(e) The terms of subordination of the 2007 Subordinated Notes contained in the 2007
Indenture are consistent with, and the other terms of the 2007 Indenture are materially
consistent with, the terms set forth in the March 15, 2007 draft of the Description of the
Notes previously provided to the Lender.
ARTICLE IV
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
Section 4.01. Ratifications. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and
except as expressly modified and superseded by this Amendment, the terms and provisions of the
Agreement and the other Loan Documents are ratified and confirmed and shall continue in full
force and effect. Borrowers and the Agent agree that the Agreement, as amended hereby, and
the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance
with their respective terms.
Section 4.02. Representations and Warranties. Borrowers hereby represent and warrant
to Agent as follows:
(a) the execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of Borrowers and do not and will not conflict with or
violate any provision of any Applicable Law, the Articles of Incorporation/Organization or
Bylaws/Operating Agreement of any Borrower or any agreement, document, judgment, license,
order or permit applicable to or binding upon any of the Borrowers or their respective
Property; no consent, approval, authorization or order of and no notice to or filing with,
any court or governmental authority or third person is required in connection with the
execution, delivery or performance of this Amendment or to consummate the transactions
contemplated hereby;
(b) the representations and warranties contained in the Agreement, as amended hereby,
and any other Loan Document are true and correct on and as of the date hereof as though made
on and as of the date hereof, except to the extent such representations and warranties
relate to an earlier date;
(c) Borrowers are in full compliance with all covenants and agreements contained in the
Agreement, as amended hereby, and the other Loan Documents; and
(d) Borrowers have not amended their respective Articles of Incorporation/Organization
or Bylaws/Operating Agreement or other organizational documents since the date of the
execution of the Agreement.
ARTICLE V
MISCELLANEOUS
MISCELLANEOUS
Section 5.01. Survival of Representations and Warranties. All representations and
warranties made in the Agreement or any other document or documents relating thereto,
including, without limitation, any Loan Document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents,
and no investigation by Agent or any closing shall affect the representations and warranties or the
right of Agent to rely upon them.
Section 5.02. Reference to Agreement. Each of the Loan Documents, including the
Agreement and any and all other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Agreement, as amended
hereby, are hereby amended so that any reference in such Loan Documents to the Agreement shall mean
a reference to the Agreement, as amended hereby.
Section 5.03. Expenses of Agent. As provided in the Agreement, each Borrower agrees
to pay on demand all reasonable costs and expenses incurred by Agent in connection with the
preparation, negotiation and execution of this Amendment and the other Loan Documents executed
pursuant hereto and any and all amendments, modifications, and supplements hereto, including,
without limitation, the reasonable costs and fees of Agent’s legal counsel, and all reasonable
costs and expenses incurred by Agent in connection with the enforcement or preservation of any
rights under the Agreement, as amended hereby, or any other Loan Document, including, without
limitation, the reasonable costs and fees of Agent’s legal counsel.
Section 5.04. RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE
ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO
SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE AGENT OR THE LENDERS. EACH
BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES THE AGENT AND THE
LENDERS, THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS,
DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL,
AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE AGAINST THE AGENT AND THE LENDERS, THEIR
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY
SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING
FROM ANY OF THE OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING,
RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE
EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION
FOR AND EXECUTION OF THIS AMENDMENT.
Section 5.05. Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder
of this Amendment and the effect thereof shall be confined to the provision so held to be invalid
or unenforceable.
Section 5.06. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
PURSUANT HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.
Section 5.07. Successors and Assigns. This Amendment is binding upon and shall inure
to the benefit of Agent, the Lenders and the Borrowers and their respective successors and assigns,
except the Borrowers may not assign or transfer any of their rights or obligations hereunder
without the prior written consent of Agent.
Section 5.08. Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original, but all of which
when taken together shall constitute one and the same instrument.
Section 5.09. Effect of Waiver. No consent or waiver, express or implied, by Agent to
or for any breach of or deviation from any covenant or condition of the Agreement shall be deemed a
consent or waiver to or of any other breach of the same or any other covenant, condition or duty.
Section 5.10. Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of this Amendment.
Section 5.11. FINAL AGREEMENT. THE AGREEMENT, AS AMENDED HEREBY AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATED TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[The Remainder of this Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Borrowers, Agent and the Lenders have caused this Amendment to be
executed on the date first written above by their duly authorized officers.
| PCI CHEMICALS CANADA COMPANY a Nova Scotia unlimited liability company |
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| By: | /s/Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Sr. Vice President and Chief Financial Officer | |||
| PIONEER AMERICAS LLC a Delaware limited liability company |
||||
| By: | /s/Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Sr. Vice President and Chief Financial Officer | |||
| XXXXX FARGO FOOTHILL, INC., a California corporation (f/k/a Foothill Capital Corporation), as Agent and as a Lender |
||||
| By: | /s/Xxxxx Le | |||
| Name: | Xxxxx Le | |||
| Title: | Vice President | |||
CONSENT AND RATIFICATION
The undersigned, Pioneer Companies, Inc., Pioneer (East), Inc., Pioneer Licensing, Inc.,
Imperial West Chemical Co., KNA California, Inc., Pioneer Water Technologies, Inc., and KWT, Inc.
(each a “Guarantor” and collectively the “Guarantors”) have executed that certain
continuing general guaranty dated as of December 31, 2001 (the “Guaranty”), in favor of
XXXXX FARGO FOOTHILL, INC., a California corporation (f/k/a Foothill Capital Corporation), as the
arranger and administrative agent for the Lenders (as defined in the Guaranty). The Guarantors
hereby consent and agree to the terms of the Ninth Amendment to Loan and Security Agreement dated
as of March 19, 2007 (the “Amendment”), executed by PCI CHEMICALS CANADA COMPANY, a Nova
Scotia unlimited liability company, and PIONEER AMERICAS LLC, a Delaware limited liability company
(hereinafter each individually is referred to as a “Borrower” and collectively as the
“Borrowers”), the Lenders and Agent, a copy of which is attached hereto, and the
undersigned agree that the Guaranty shall remain in full force and effect and shall continue to be
the legal, valid and binding obligation of the Guarantors in enforceable against the Guarantors in
accordance with its terms. Furthermore, each Guarantor hereby agrees and acknowledges that (a) the
Guaranty is a “Loan Document” as such term is defined in the Amendment and as such term is defined
in the Agreement, (b) the Guaranty is not subject to any claims, defenses or offsets, (c) nothing
contained in this Amendment or any other Loan Document shall adversely affect any right or remedy
of Agent under the Guaranty, (d) the execution and delivery of the Amendment shall in no way
reduce, impair or discharge any obligations of the undersigned as guarantors pursuant to the
Guaranty and shall not constitute a waiver by Agent of any of Agent’s rights against the
undersigned, (e) by virtue hereof and by virtue of the Guaranty, each Guarantor hereby guarantees
to Agent the prompt and full payment and full and faithful performance by the Borrowers of the
entirety of the Obligations (as defined in the Agreement) on the terms and conditions set forth in
the Agreement as amended by the Amendment and any time further modified or amended, (f) the
Guarantors’ consent is not required to the effectiveness of the Amendment, and (g) no consent by
the Guarantors is required for the effectiveness of any future amendment, modification, forbearance
or other action with respect to the Agreement or any present or future Loan Document.
| Pioneer Companies, Inc. |
||||
| By: | /s/Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Sr. Vice President and Chief Financial Officer |
|||
| Pioneer (East), Inc. |
||||
| By: | /s/Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Sr. Vice President and Chief Financial Officer |
|||
| Pioneer Licensing, Inc. |
||||
| By: | /s/Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Sr. Vice President and Chief Financial Officer |
|||
| Imperial West Chemical Co. |
||||
| By: | /s/Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Sr. Vice President and Chief Financial Officer |
|||
| KNA California, Inc. |
||||
| By: | /s/Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Sr. Vice President and Chief Financial Officer |
|||
| Pioneer Water Technologies, Inc. |
||||
| By: | /s/Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Sr. Vice President and Chief Financial Officer |
|||
| KWT, Inc. |
||||
| By: | /s/Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Sr. Vice President and Chief Financial Officer |
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