EXHIBIT 4.8
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (hereinafter
referred to as the "Amendment") is made and entered into as of this 29th day of
July, 2002, between and among, on the one hand, the lenders identified on the
signature pages hereof (such lenders, together with their respective successors
and assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), FOOTHILL CAPITAL CORPORATION, a California
corporation, as the arranger and administrative agent for the Lenders ("Agent"),
and, on the other hand, PCI CHEMICALS CANADA COMPANY, a Nova Scotia unlimited
liability company, and PIONEER AMERICAS LLC, a Delaware limited liability
company (hereinafter each individually is referred to as a "Borrower" and
collectively as the "Borrowers").
RECITALS
A. Agent, the Lenders and the Borrowers have entered into that certain
Loan and Security Agreement, dated as of December 31, 2001 (as amended by that
certain First Amendment to Loan and Security Agreement dated as of April 15,
2002 and that certain Second Amendment to Loan and Security Agreement dated as
of June 3, 2002 but effective as of May 31, 2002, herein the "Agreement").
B. Agent, the Lenders and the Borrowers desire to amend the Agreement
as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meaning as in the
Agreement, as amended hereby.
ARTICLE II
AMENDMENTS
Section 2.01. Amendment to Definitions. The following definitions shall
be amended within Section 1.1 of the Agreement:
(a) The definition of "Loan Documents" is hereby deleted in its
entirety and amended to read as follows:
"Loan Documents" means this Agreement, the Canadian Security
Documents, the Bank Product Agreements, the Cash Management Agreements,
the Control Agreements, the Disbursement Letter, the Fee Letter, the
Guaranty, the Reimbursement Agreement, the Letters of Credit and the
applications and agreements executed in connection therewith, the
Officers' Certificate, the Intercreditor Agreement, the Notice and
Acknowledgment of the Oral Agreements, the Hedge Agreements, the
Collateral Access Agreements, any note or notes executed by a Borrower
in connection with this Agreement and payable to a member of the Lender
Group, and any other agreement entered into, now or in the future, by
any Borrower and the Lender Group in connection with this Agreement.
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 1
(b) The definition of "Obligations" is hereby deleted in its entirety
and amended to read as follows:
"Obligations" means (a) all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the
Bankruptcy Law, would have accrued), contingent reimbursement
obligations with respect to outstanding Letters of Credit (including,
without limitation, all participations purchased by Agent, on behalf of
Lenders, under that certain Participation Agreement dated as of July
29, 2002 between Agent and Xxxxx Fargo with respect to the purchase by
Agent, for the benefit of the Lenders, of one hundred percent (100%)
participation in all reimbursement obligations of the Borrowers under
the Reimbursement Agreement), premiums, liabilities (including all
amounts charged to Borrowers' Loan Account pursuant hereto),
obligations, fees (including the fees provided for in the Fee Letter),
charges, costs, Lender Group Expenses (including any fees or expenses
that, but for the provisions of the Bankruptcy Code, would have
accrued), lease payments, guaranties, covenants, and duties of any kind
and description owing by Borrowers to the Lender Group pursuant to or
evidenced by the Loan Documents and irrespective of whether for the
payment of money, whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, and including
all interest not paid when due and all Lender Group Expenses that
Borrowers are required to pay or reimburse by the Loan Documents, by
law, or otherwise, and (b) all Bank Product Obligations. Any reference
in this Agreement or in the Loan Documents to the Obligations shall
include all amendments, changes, extensions, modifications, renewals
replacements, substitutions, and supplements, thereto and thereof, as
applicable, both prior and subsequent to any Insolvency Proceeding.
Section 2.02. New Definition of Reimbursement Agreement. The definition
of "Reimbursement Agreement" is hereby amended and restated in its entirety to
read as follows:
"Reimbursement Agreement" means that certain Reimbursement
Agreement dated as of July 29, 2002 between the Borrowers and Agent, on
behalf of Xxxxx Fargo, as Issuing Lender of that certain Irrevocable
Letter of Credit No. __________ dated July 29, 2002 in the amount of
U.S. One Million Seven Hundred Ninety-Four Thousand Seven Hundred
Seventeen and 81/100 Dollars ($1,794,717.81) and for the benefit of
U.S. Bank National Association, as trustee (the "Successor Trustee")
under that certain Trust Indenture between the Successor Trustee and
Economic Development Corporation of Xxxxxx County governing the
Economic Development Corporation of Xxxxxx County Variable Rate Demand
Revenue Bonds, 1994 (T.C. Products, Inc. Project).
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Conditions. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent, unless
specifically waived by Agent:
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 2
(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) The Reimbursement Agreement, duly executed by Borrowers;
and
(iii) Company General 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.
ARTICLE IV
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
Section 4.01. Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Borrowers and the Agent agree that the Agreement, as amended hereby, and
the other Loan Documents shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms.
Section 4.02. Representations and Warranties. Borrowers hereby
represent and warrant to Agent as follows:
(a) the execution, delivery and performance of this Amendment
and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate
action on the part of Borrowers and do not and will not conflict with
or violate any provision of any Applicable Law, the Articles of
Incorporation/Organization or Bylaws/Operating Agreement of Borrower or
any agreement, document, judgment, license, order or permit applicable
to or binding upon any of the Borrowers or their respective Property.
No consent, approval, authorization or order of and no notice to or
filing with, any court or governmental authority or third person is
required in connection with the execution, delivery or performance of
this Amendment or to consummate the transactions contemplated hereby.;
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 3
(b) the representations and warranties contained in the
Agreement, as amended hereby, and any other Loan Document are true and
correct on and as of the date hereof as though made on and as of the
date hereof, except to the extent such representations and warranties
relate to an earlier date;
(c) Borrower is in full compliance with all covenants and
agreements contained in the Agreement, as amended hereby; and the other
Loan Documents; and
(d) Borrower has not amended its Articles of
Incorporation/Organization or Bylaws/Operating Agreement or other
organizational documents since the date of the execution of the
Agreement.
(e) No Borrower or Guarantor is in default in any of its
indebtedness, liabilities or obligations under any of the Supplier
Credit Agreements or under either of the Notes to Professionals and
there are, to Borrowers' knowledge, no other defaults or events of
default under any of the Supplier Credit Agreements or Notes to
Professionals.
ARTICLE V
MISCELLANEOUS
Section 5.01. Survival of Representations and Warranties. All
representations and warranties made in the Agreement or any other document or
documents relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment, shall survive the execution and
delivery of this Amendment and the other Loan Documents, and no investigation by
Agent or any closing shall affect the representations and warranties or the
right of Agent to rely upon them.
Section 5.02. Reference to Agreement. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement, as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement, as amended hereby.
Section 5.03. Expenses of Agent. As provided in the Agreement, each
Borrower agrees to pay on demand all reasonable costs and expenses incurred by
Agent in connection with the preparation, negotiation and execution of this
Amendment and the other Loan Documents executed pursuant hereto and any and all
amendments, modifications, and supplements hereto, including, without
limitation, the reasonable costs and fees of Agent's legal counsel, and all
reasonable costs and expenses incurred by Agent in connection with the
enforcement or preservation of any rights under the Agreement, as amended
hereby, or any other Loan Document, including, without limitation, the
reasonable costs and fees of Agent's legal counsel.
Section 5.04. RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO
DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR
NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF
ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES
OF ANY KIND OR NATURE FROM THE AGENT OR THE LENDERS. EACH BORROWER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES THE AGENT AND THE
LENDERS, THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL
POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES,
AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED,
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 4
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 HERTO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN DALLAS, TEXAS, AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 5.07. Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Agent, the Lenders and the Borrowers and their
respective successors and assigns, except the Borrowers may not assign or
transfer any of their rights or obligations hereunder without the prior written
consent of Agent.
Section 5.08. Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.
Section 5.09. Effect of Waiver. No consent or waiver, express or
implied, by Agent to or for any breach of or deviation from any covenant or
condition of the Agreement shall be deemed a consent or waiver to or of any
other breach of the same or any other covenant, condition or duty.
Section 5.10. Headings. The headings, captions, and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 5.11. FINAL AGREEMENT. THE AGREEMENT, AS AMENDED HEREBY AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATED
TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 5
IN WITNESS WHEREOF, the Borrowers, Agent and the Lenders have caused
this Amendment to be executed on the date first written above by their duly
authorized officers.
PCI CHEMICALS CANADA COMPANY
a Nova Scotia unlimited liability company
By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxxxx
-------------------------------------
Title: Vice President
------------------------------------
PIONEER AMERICAS LLC
a Delaware limited liability company
PCI CHEMICALS CANADA COMPANY
a Nova Scotia unlimited liability company
By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxxxx
-------------------------------------
Title: Vice President
------------------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and
as a Lender
By: /s/ Xxxx Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxx
-------------------------------------
Title: Vice President
------------------------------------
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 6
CONSENT AND RATIFICATION
The undersigned, Pioneer Companies, Inc., Pioneer (East), Inc., Pioneer
Licensing, Inc., Imperial West Chemical Co., KNA California, Inc., Pioneer Water
Technologies, Inc., and KWT, Inc. (each a "Guarantor" and collectively the
"Guarantors") have executed that certain continuing general guaranty dated as of
December 31, 2001 (the "Guaranty"), in favor of FOOTHILL CAPITAL CORPORATION, a
California corporation, as the arranger and administrative agent for the Lenders
(as defined in the Guaranty). The Guarantors hereby consent and agree to the
terms of the Third Amendment to Loan and Security Agreement dated as of July
___, 2002 (the "Amendment"), executed by PCI CHEMICALS CANADA COMPANY, a Nova
Scotia unlimited liability company, and PIONEER AMERICAS LLC, a Delaware limited
liability company (hereinafter each individually is referred to as a "Borrower"
and collectively as the "Borrowers"), the Lenders and Agent, a copy of which is
attached hereto, and the undersigned agree that the Guaranty shall remain in
full force and effect and shall continue to be the legal, valid and binding
obligation of the Guarantors in enforceable against the Guarantors in accordance
with its terms. Furthermore, each Guarantor hereby agrees and acknowledges that
(a) the Guaranty is a "Loan Document" as such term is defined in the Amendment
and as such term is defined in the Agreement, (b) the Guaranty is not subject to
any claims, defenses or offsets, (c) nothing contained in this Amendment or any
other Loan Document shall adversely affect any right or remedy of Agent under
the Guaranty, (d) the execution and delivery of the Amendment shall in no way
reduce, impair or discharge any obligations of the undersigned as guarantors
pursuant to the Guaranty and shall not constitute a waiver by Agent of any of
Agent's rights against the undersigned, (e) by virtue hereof and by virtue of
the Guaranty, each Guarantor hereby guarantees to Agent the prompt and full
payment and full and faithful performance by the Borrowers of the entirety of
the Obligations (as defined in the Agreement) on the terms and conditions set
forth in the Agreement as amended by the Amendment and any time further modified
or amended, (f) the Guarantors' consent is not required to the effectiveness of
the Amendment, and (g) no consent by the Guarantors is required for the
effectiveness of any future amendment, modification, forbearance or other action
with respect to the Agreement or any present or future Loan Document.
Pioneer Companies, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
Pioneer (East), Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 7
Pioneer Licensing, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
Imperial West Chemical Co.
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
KNA California, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
Pioneer Water Technologies, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
KWT, Inc.
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 8
