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EXHIBIT 4.6(a)
DEBENTURE PLEDGE AGREEMENT
THIS AGREEMENT is made the 30th day of October, 1997.
BY: PCI CHEMICALS CANADA INC.
(the "Corporation")
IN FAVOUR OF: UNITED STATES TRUST COMPANY OF NEW
YORK, as collateral agent for its own
benefit and the benefit of the Trustee
and each of the Noteholders, and the
Administrative Agent and each of the
Lenders
(in such capacity, the "Collateral
Agent")
WHEREAS the Corporation is or will become indebted, liable and
obligated to the Collateral Agent, the Trustee, the Noteholders, the
Administrative Agent and the Lenders;
AND WHEREAS the Corporation has agreed to execute and deliver this
Agreement to and in favour of the Collateral Agent as continuing collateral
security for the due, prompt and complete payment, performance and
satisfaction of all Obligations (as defined below).
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the
foregoing and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the Corporation hereby covenants
and agrees as follows:
ARTICLE 1
INTERPRETATION
1.1 INTERPRETATION. This Agreement shall be interpreted in accordance
with the following:
(a) words denoting the singular include the plural and vice versa
and words denoting any gender include all genders;
(b) the division of this Agreement into Articles and Sections and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this
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Agreement; and
(c) the word "including" shall mean "including without limitation"
and "includes" shall mean "includes without limitation".
1.2 DEBENTURE DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Debenture (as hereinafter defined).
1.3 SEVERABILITY. If any provision of this Agreement is, or becomes,
illegal, invalid or unenforceable, such provision shall be severed from this
Agreement and be ineffective to the extent of such illegality, invalidity or
unenforceability. The remaining provisions hereof shall be unaffected by such
provision and shall continue to be valid and enforceable.
1.4 GOVERNING LAW. This Agreement shall be governed by, and interpreted
in accordance with, the Laws of the Province of Ontario and the Laws of Canada
applicable therein, without giving effect to any conflicts of law rules
thereof. The Corporation hereby irrevocably attorns and submits to the
non-exclusive jurisdiction of the courts of Ontario with respect to any matter
arising under or relating to this Agreement.
ARTICLE 2
PLEDGE OF DEBENTURE
2.1 PLEDGE OF DEBENTURE. The Corporation hereby pledges to and deposits
with the Collateral Agent the Demand Debenture (Ontario) of even date herewith
issued by the Corporation to and in favour of the Collateral Agent, in the
principal amount of $500,000,000 in lawful money of the United States of
America, together with all renewals thereof, substitutions thereafter and
supplements thereto (the "Debenture"), as well as interest thereon and proceeds
thereof, to be held by the Collateral Agent in accordance with the provisions
hereof as continuing security for the due, prompt and complete payment,
performance and satisfaction of all of the Obligations.
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2.2 OBLIGATIONS SECURED.
(a) The pledge granted by this Agreement (the "Pledge") shall be
continuing collateral security for the due, prompt and complete payment,
performance and satisfaction by the Corporation of all indebtedness,
liabilities and obligations, present or future, direct or indirect, absolute or
contingent, matured or unmatured, at any time due or accruing due, owing by the
Corporation to the Collateral Agent, the Administrative Agent and the Lenders
pursuant to the Guarantee, and to the Collateral Agent, the Trustee and the
Noteholders pursuant to the Indenture, and any ultimate unpaid balance thereof,
respectively, and in any currency, and whether incurred prior to, at the time
of or subsequent to the execution hereof (collectively, and together with the
expenses, costs and charges set out in Section 2.2(b), the "Obligations").
(b) All expenses, costs and charges incurred by or on behalf of
the Collateral Agent, the Trustee, the Noteholders, the Administrative Agent or
the Lenders, or any of them, in connection with this Debenture, the Security
Interest or the realization of the Collateral, including, after the occurrence
and during the continuance of a Default (as defined therein) of the nature set
forth in Section 8.1.9 of the Term Loan Agreement or a Default (as defined
therein) of the nature set forth in Section 501(10) of the Indenture, or an
Event of Default (as defined in the Term Loan Agreement or the Indenture, as
the case may be), all legal fees, court costs, Receiver's remuneration and
other expenses of taking possession of, repairing, protecting, insuring,
preparing for disposition, realizing, collecting, selling, transferring,
delivering or obtaining payment of the Collateral shall be added to and form a
part of the Obligations.
ARTICLE 3
DEFAULT AND ENFORCEMENT
3.1 DEFAULT. The Pledge shall be and become enforceable against the
Corporation if and only if and when the Corporation shall fail to pay, perform
or satisfy any of the Obligations when due and payable or required to be
performed or satisfied, as the case may be (including pursuant to any
acceleration thereof in accordance with the provisions governing the
Obligations) but not otherwise.
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3.2 REALIZATION UPON DEFAULT. Whenever the Pledge has become enforceable,
the Collateral Agent may at any time realize upon or otherwise dispose of the
Debenture by sale, transfer and/or delivery and/or exercise and/or enforce any
and all rights and remedies of a holder of the Debenture as if the Collateral
Agent was the absolute owner thereof, without notice to or control by the
Corporation (except as may be required by applicable Law) and any such remedy
may be exercised separately or in combination and shall be in addition to and
not in substitution for any rights the Collateral Agent may have, however
created.
3.3 APPLICATION OF PROCEEDS. All proceeds of the Debenture shall be
applied by the Collateral Agent may choose in accordance with the provisions
governing the Obligations, without prejudice to any claim on the Corporation
for any deficiency.
3.4 SATISFACTION OF OBLIGATIONS. Payment of the Obligations from time to
time shall be deemed to be payment of the principal and interest from time to
time due under the Debenture. Upon satisfaction in full of the Obligations,
the Collateral Agent shall, at the request and expense of the Corporation,
deliver the Debenture to the Corporation for cancellation or assign the
Debenture (without recourse to the Lenders) to such other person or entity as
the Corporation may direct.
3.5 DEALING WITH THE DEBENTURE.
(a) The Collateral Agent shall not be obliged to exhaust its
recourse against the Corporation or any other person or persons or against any
other security the Collateral Agent may hold in respect of the Obligations
before realizing upon or otherwise dealing with the Debenture in such manner as
the Collateral Agent may consider desirable.
(b) The Collateral Agent may grant extensions or other
indulgences, take and give up securities, accept compositions, grant releases
and discharges and otherwise deal with the Corporation and with other parties,
sureties or securities as the Collateral Agent may see fit without prejudice to
the Obligations or the rights of the Collateral Agent in respect of the
Debenture.
(c) The Collateral Agent shall not be: (i) liable or accountable
for any failure to collect,
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realize or obtain payment in respect of the Debenture; (ii) bound to institute
proceedings for the purpose of collecting, enforcing, realizing or obtaining
payment of the Debenture or for the purpose of preserving any rights of the
Collateral Agent, the Corporation or any other parties in respect thereof;
(iii) responsible for any loss occasioned by any sale or other dealing with the
Debenture or by the retention of or failure to sell or otherwise deal
therewith; or (iv) bound to protect the Debenture from depreciating in value or
becoming worthless.
ARTICLE 4
MISCELLANEOUS
4.1 NOTICES. Any and all demands, notices or other communications to be
made or given pursuant to this Agreement shall be given and received in the
manner and at the addresses set forth in Section [11.2] of the Intercreditor
Agreement.
4.2 DISCHARGE. The Pledge shall be released and discharged upon the full
and complete payment, performance and satisfaction of all of the Obligations
and at the request and sole cost and expense of the Corporation. The
Collateral Agent shall execute and deliver to the Corporation such releases and
discharges as the Corporation may reasonably require.
4.3 WAIVER. No failure on the part of the Collateral Agent to exercise,
and no delay in exercising, any right under this Agreement shall operate as a
waiver of such right; nor shall any single or partial exercise of any right
under this Agreement preclude any other or further exercise thereof or the
exercise of any other right; nor shall any waiver of one provision be deemed to
constitute a waiver of any other provision (whether or not similar). No waiver
of any of the provisions of this Agreement shall be effective unless it is in
writing duly executed by the waiving party or parties.
4.4 NON-MERGER. The Debenture shall not operate by way of merger of any
of the Obligations and no judgment recovered by the Collateral Agent, or any of
them, shall operate by way of merger of or in any way affect the security of
the Debenture which is in addition to and not in substitution for any other
security now or hereafter held by the Collateral Agent, or any of them, in
respect of the Obligations.
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4.5 ASSIGNMENTS AND PARTICIPATIONS. The Collateral Agent may sell,
assign, transfer or otherwise dispose of all or any of the Obligations in
accordance with the provisions governing the Obligations and, in such event,
each and every immediate and successive assignee, transferee or holder of all
or any of the Obligations shall have, in respect of the Obligations sold,
assigned, transferred or otherwise disposed of, the full benefit hereof to the
same extent as if it were an original party to the Obligations or the part
thereof so sold, assigned, transferred or otherwise disposed. None of the
rights or obligations hereunder of the Corporation may be assigned without the
prior written consent of the Collateral Agent, except in accordance with the
provisions of the Intercreditor Agreement.
4.6 ENUREMENT. This Agreement shall enure to the benefit of the
Collateral Agent, the Trustee, the Noteholders, the Administrative Agent, the
Lenders and their respective successors and assigns and be binding upon the
Corporation and its successors and permitted assigns.
4.7 CONFLICTS. Notwithstanding any provision of the Debenture, interest
thereunder shall accrue and be payable in accordance with the terms governing
the Obligations and the principal thereof and interest payable thereunder shall
represent liabilities of the Corporation only to the extent of the Obligations.
To the extent of any conflict or inconsistency between the terms of this
Agreement and the Debenture, this Agreement shall prevail. Notwithstanding the
foregoing, if there exists any right or remedy of any of the Collateral Agent
set out in the Debenture which is not set out or provided for herein, such
additional right or remedy shall not constitute a conflict or inconsistency.
4.8 TIME OF THE ESSENCE. Time shall be of the essence of this Agreement.
4.9 FURTHER ASSURANCES. The Corporation shall from time to time, whether
before or after the Collateral Agent shall become entitled to realize upon or
otherwise dispose of the Debenture, at the sole cost and expense of the
Corporation, do all such acts and things and execute and deliver all such
deeds, transfers, assignments and instruments as the Collateral Agent may
reasonably require for perfecting the security constituted by the Debenture or
exercising all powers, authorities and discretions hereby conferred upon the
Collateral Agent and the Corporation shall from time to time after the
Collateral Agent shall have become entitled to realize upon or otherwise
dispose of the Debenture, at the sole cost
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and expense of the Corporation, do all such acts and things and execute and
deliver all such deeds, transfers, assignments and instruments as the
Collateral Agent may require for facilitating the sale of the Debenture in
connection with any realization thereof.
4.10 AMENDMENT. This Agreement may be amended only by written agreement of
the Corporation and the Collateral Agent.
4.11 JUDGMENT CURRENCY. If, for the purposes of obtaining judgment in any
court, it is necessary to convert any sum due, or owing to the Collateral Agent
in any currency (the "Original Currency") into another currency (the "Other
Currency"), the Corporation hereby agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which, in
accordance with normal banking procedures, the Collateral Agent could purchase
the Original Currency with the Other Currency on the Business Day preceding
that on which the final judgment is granted. The Obligations of the
Corporation in respect of any sum due in the Original Currency from it to the
Collateral Agent shall, notwithstanding any judgment in any Other Currency, be
discharged only to the extent that on the Business Day following receipt by the
Collateral Agent of any such sum adjudged to be so due or owing in such Other
Currency, the Collateral Agent may in accordance with normal banking procedures
purchase the Original Currency with such Other Currency. If the amount of the
Original Currency so purchased is less than the sum originally due or owing to
the Collateral Agent in the Original Currency, the Corporation shall, as a
separate obligation and notwithstanding any such judgment, indemnify the
Collateral Agent for the benefit of the Trustee, on its own account and on
account of each Noteholder, and the Administrative Agent, on its own account
and on account of each of the Lenders, against such loss, and if the amount of
the Original Currency so purchased exceeds the sum originally due or owing to
the Collateral Agent in the Original Currency, the Collateral Agent shall remit
such excess to the Corporation.
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4.12 COPY RECEIVED. The Corporation acknowledges receipt of a copy of this
Agreement.
IN WITNESS WHEREOF the Corporation has executed this Agreement on the
date first above written.
PCI CHEMICALS CANADA INC.
Per:/s/ XXXX X. XXXXXXXXXX
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(Authorized Signing Officer)
