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EXHIBIT 4.7
SUBSIDIARY SECURITY AGREEMENT
This SUBSIDIARY SECURITY AGREEMENT (as amended, supplemented, amended
and restated or otherwise modified from time to time, this "Security
Agreement"), dated as of October 30, 1997, is made by PCI Chemicals Canada
Inc./Produits Chimiques PCI Canada Inc., a corporation organized under the laws
of the Province of New Brunswick (the "Grantor") in favor of UNITED STATES
TRUST COMPANY OF NEW YORK, as collateral agent (together with any successor(s)
thereto in such capacity, the "Collateral Agent") under the Intercreditor
Agreement (as defined below) for each of the Secured Parties (as defined
below).
W I T N E S S E T H:
WHEREAS, pursuant to a Term Loan Agreement, dated as of the date
hereof (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Term Loan Agreement"), among Pioneer Americas, Inc., a
corporation organized under the laws of Delaware (the "Borrower"), the Parent
Guarantor named therein, the various financial institutions as are, or may from
time to time become, parties thereto (each, individually, a "Term Loan Lender",
and collectively, the "Term Loan Lenders"), the Collateral Agent, DLJ Capital
Funding, Inc., as Syndication Agent for the Term Loan Lenders, Salomon Brothers
Holding Company Inc, as Documentation Agent for the Term Loan Lenders, Bank of
America National Trust and Savings Association, as Administrative Agent for the
Term Loan Lenders and United States Trust Company of New York, as Collateral
Agent for the Term Loan Lenders (the Syndication Agent, the Documentation
Agent, the Administrative Agent and the Collateral Agent are hereinafter
collectively referred to as the "Term Loan Agents"), the Term Loan Lenders have
extended Term Loan Commitments to make Term Loans to the Borrower, which Term
Loans will be evidenced by notes (as amended, supplemented, amended and
restated, or otherwise modified from time to time, including all notes issued
in exchange or substitution therefor, the "Term Loan Notes") in an aggregate
principal amount of up to U.S.$100,000,000;
WHEREAS, pursuant to that certain Indenture, dated as of the date
hereof (as amended, supplemented, amended and restated, or otherwise modified
from time to time, the "Senior Secured Note Indenture"), among the Grantor, the
Affiliate Guarantors (as defined therein) and United States Trust Company of
New York, as trustee (in such capacity, the "Trustee") for the holders of the
Notes (as defined therein) (the "Holders"), the Grantor will issue its 9 1/4%
Senior Secured Notes due 2007 (as amended, supplemented, amended and restated,
or otherwise modified from time to time, including all notes issued in exchange
or substitution therefor upon the registration of such notes pursuant to the
United States' Securities Act of 1933 or otherwise, the "Senior Secured Notes")
in an aggregate principal amount of U.S.$175,000,000;
WHEREAS, as a condition precedent to the making of the Term Loans
under the Term Loan Agreement the Grantor has given a guarantee (the
"Guarantee") of the obligations of the Borrower under the Term Loan Agreement;
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WHEREAS, as a condition precedent to the purchase of Senior Secured
Notes by the Initial Purchasers (as defined in the Senior Secured Note
Indenture) and the making of the Term Loans under the Term Loan Agreement, the
Grantor is required to execute and deliver this Security Agreement as
collateral security therefor;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
WHEREAS, it is in the best interests of the Grantor to execute this
Security Agreement inasmuch as the Grantor will derive substantial direct and
indirect benefits from the Term Loans made to the Borrower by the Term Loan
Lenders pursuant to the Term Loan Agreement and the purchase of the Senior
Secured Notes by the Initial Purchasers pursuant to the Senior Secured Note
Indenture;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce (i) the
Initial Purchasers to purchase the Senior Secured Notes pursuant to the Senior
Secured Note Indenture and (ii) the Term Loan Lenders to make Term Loans to the
Borrower pursuant to the Term Loan Agreement, the Grantor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"BORROWER" is defined in the first recital.
"COLLATERAL" is defined in Section 2.1.
"COLLATERAL ACCOUNT" is defined in Section 4.1.2(b).
"COLLATERAL AGENT" is defined in the preamble.
"COMPUTER HARDWARE AND SOFTWARE COLLATERAL" means:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units,
memory units, display terminals, printers, features, computer
elements, card readers, tape drives, hard and soft disk drives,
cables, electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer
hardware;
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(b) all software programs (including both source code,
object code and all related applications and data files), whether now
owned, licensed or leased or hereafter acquired by the Grantor,
designed for use on the computers and electronic data processing
hardware described in clause (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic
diagrams, manuals, guides and specifications) with respect to such
hardware, software and firmware described in the preceding clauses (a)
through (c); and
(e) all rights with respect to all of the foregoing,
including any and all copyrights, licenses, options, warranties,
service contracts, program services, test rights, maintenance rights,
support rights, improvement rights, renewal rights and
indemnifications and any substitutions, replacements, additions or
model conversions of any of the foregoing.
"CONTRACTS" is defined in clause (b) of Section 2.1.
"COPYRIGHT COLLATERAL" means all copyrights (including all copyrights
for semi-conductor chip product mask works) of the Grantor, whether statutory
or common law, registered or unregistered, now or hereafter in force throughout
the world including all of the Grantor's right, title and interest in and to
all copyrights registered in the United States Copyright Office or anywhere
else in the world and also including the copyrights referred to in Item A of
Schedule IV attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses, including each
copyright license referred to in Item B of Schedule IV attached hereto, the
right to xxx for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions and renewals
of any thereof and all proceeds of the foregoing, including licenses,
royalties, income, payments, claims, damages and proceeds of suit.
"EXCLUDED ASSETS" means (a) the inventory of the Grantor, including
goods held for sale or lease, goods furnished or to be furnished to third
parties under contracts of lease, consignment or service, goods which are raw
materials or work in process, goods used in or procured for packing and
materials used or consumed in the business of the Grantor, (b) accounts due or
accruing due and all records entered or recorded by any system of mechanical or
electronic data processing or any other information storage device, agreements,
books, accounts, invoices, letters, documents and papers recording evidencing
or relating thereto, and (c) all contracts, contract rights, chattel paper,
documents, instruments, and general intangibles arising from or relating to any
of the foregoing.
"EQUIPMENT" is defined in clause (a) of Section 2.1.
"GRANTOR" is defined in the preamble.
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"GUARANTEE" is defined in the third recital.
"HOLDERS" is defined in the second recital.
"INTELLECTUAL PROPERTY COLLATERAL" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral (except
to the extent any of the foregoing arises out of or relates to any inventory or
accounts receivable).
"INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral
Agency Agreement, dated as of October 30, 1997, among the Borrower, the
Grantor, PCI Carolina Inc., Pioneer Licensing Inc., the Trustee, the
Administrative Agent and the Collateral Agent, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"PATENT COLLATERAL" means:
(a) all letters patent and applications for letters
patent throughout the world, including all patent applications in
preparation for filing anywhere in the world and including each patent
and patent application referred to in Item A of Schedule II attached
hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, including each patent license
referred to in Item B of Schedule II attached hereto; and
(d) all proceeds of, and rights associated with, the
foregoing (including license royalties and proceeds of infringement
suits), the right to xxx third parties for past, present or future
infringements of any patent or patent application, including any
patent or patent application referred to in Item A of Schedule II
attached hereto, and for breach or enforcement of any patent license,
including any patent license referred to in Item B of Schedule II
attached hereto, and all rights corresponding thereto throughout the
world.
"PPSA" means the Personal Property Security Act (New Brunswick), as
same may be amended from time to time.
"RELATED CONTRACTS" is defined in clause (b) of Section 2.1.
"SECURED OBLIGATIONS" is defined in Section 2.2.
"SECURED PARTIES" means the Collateral Agent, the Trustee, the
Holders, the Term Loan Agents, the Term Loan Lenders and any holder of a Term
Loan Note.
"SECURITY AGREEMENT" is defined in the preamble.
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"SENIOR SECURED NOTE INDENTURE" is defined in the second recital.
"SENIOR SECURED NOTES" is defined in the second recital.
"TERM LOAN AGREEMENT" is defined in the first recital.
"TERM LOAN LENDER" and "TERM LOAN LENDERS" are defined in the first
recital.
"TERM LOAN NOTES" is defined in the first recital.
"TRADEMARK COLLATERAL" means:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, service marks,
certification marks, collective marks, logos, and general intangibles
of a like nature (all of the foregoing items in this clause (a) being
collectively called a "Trademark"), now existing anywhere in the world
or hereafter adopted or acquired, all registrations and recordings
thereof and all applications in connection therewith, whether pending
or in preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in
any office or agency of the United States of America or any State
thereof or any foreign country, including those referred to in Item A
of Schedule III attached hereto;
(b) all Trademark licenses, including each Trademark
license referred to in Item B of Schedule III attached hereto;
(c) all extensions or renewals of any of the items
described in clauses (a) and (b);
(d) all of the goodwill of the business connected with
the use of, and symbolized by the items described in, clauses (a) and
(b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by the Grantor against third parties
for past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in Item A and
Item B of Schedule III attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach
or enforcement of any Trademark license.
"TRADE SECRETS COLLATERAL" means all confidential or proprietary
information and all know-how obtained by or used in or contemplated at any time
for use in the business of the Grantor (all of the foregoing being collectively
called a "Trade Secret"), whether or not such Trade Secret has been reduced to
a writing or other tangible form, including all documents and things embodying,
incorporating or referring in any way to such Trade Secret, all Trade Secret
licenses, including each Trade Secret license referred to in Schedule V
attached hereto, and including the right to xxx for and to enjoin and to
collect damages for the actual or threatened
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misappropriation of any Trade Secret and for the breach or enforcement of any
such Trade Secret license.
"TRUSTEE" is defined in the second recital.
SECTION 1.2. INTERCREDITOR AGREEMENT DEFINITIONS. Unless otherwise
defined herein or the context otherwise requires, terms used in this Security
Agreement, including its preamble and recitals, have the meanings provided in
the Intercreditor Agreement.
SECTION 1.3. PPSA DEFINITIONS. Unless otherwise defined herein or in
the Intercreditor Agreement or the context otherwise requires, terms for which
meanings are provided in the PPSA are used in this Security Agreement,
including its preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. GRANT OF SECURITY. The Grantor hereby assigns and
pledges to the Collateral Agent, for the ratable benefit of each of the Secured
Parties, and hereby grants to the Collateral Agent, for the ratable benefit of
each of the Secured Parties, a security interest in all of the following,
whether now or hereafter existing or acquired by the Grantor (the
"Collateral"):
(a) all pipelines, valves, pipes, pumps and equipment in
all of its forms of the Grantor, wherever located, including all parts
thereof and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor and all
accessories related thereto (any and all of the foregoing being the
"Equipment");
(b) all contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (excluding: (a) tax
refunds as they may arise from or relate solely to the sale of
inventory including, without limitation, excise, retail sales and
goods and services taxes; and (b) any of the foregoing as it may arise
from or relate to inventory or accounts receivable) of the Grantor,
whether or not arising out of or in connection with the sale or lease
of goods or the rendering of services, and all rights of the Grantor
now or hereafter existing in and to all security agreements,
guaranties, leases and other contracts securing or otherwise relating
to any such contracts, contract rights, chattel paper, documents,
instruments, and general intangibles (any and all such contracts,
contract rights, chattel paper, documents, instruments, and general
intangibles being the "Contracts", and any and all such security
agreements, guaranties, leases and other contracts being the "Related
Contracts");
(c) all Intellectual Property Collateral of the Grantor;
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(d) all books, records, writings, data bases, information
and other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section 2.1;
(e) all of the Grantor's other personal property and
rights of every kind and description and interests therein (other than
the Excluded Assets and excluding any Capital Stock (as defined in the
Term Loan Agreement) which is required to be pledged under the
Existing Term Loan Agreement or the Existing Senior Secured Note
Indenture (in each case as defined in the Term Loan Agreement) until
such time as the obligations pursuant to or under such agreements have
been paid in full); and
(f) all products, offspring, rents, issues, profits,
returns, income and proceeds of and from any and all of the foregoing
Collateral (including proceeds which constitute property of the types
described in clauses (a), (b), (c), (d) and (e), proceeds deposited
from time to time in the Collateral Account and in any lock boxes of
the Grantor, and, to the extent not otherwise included, all payments
under insurance (whether or not the Collateral Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral).
Notwithstanding the foregoing, "Collateral" shall not include the Excluded
Assets and any general intangibles or other rights arising under any contracts,
instruments, licenses or other documents as to which the grant of a security
interest would constitute a violation of a valid and enforceable restriction in
favor of a third party on such grant, unless and until any required consents
shall have been obtained. The Grantor shall, upon the request of the
Collateral Agent, use its best commercial efforts to obtain any such required
consent.
SECTION 2.2. SECURITY FOR OBLIGATIONS. This Security Agreement
secures the due, prompt and complete payment, performance and satisfaction by
the Grantor 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 Grantor to the Collateral Agent, the
Administrative Agent and the Term Loan Lenders pursuant to the Guarantee, and
to the Collateral Agent, the Trustee and the Holders pursuant to the Senior
Secured Note 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 herein, the "Secured Obligations").
SECTION 2.3. CONTINUING SECURITY INTEREST; TRANSFER OF TERM LOAN
NOTES. This Security Agreement shall create a continuing security interest in
the Collateral and shall
(a) remain in full force and effect until the full and
complete payment, performance and satisfaction of all of the Secured
Obligations,
(b) be binding upon the Grantor, its successors,
transferees and assigns, and
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(c) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral Agent and
each other Secured Party.
Without limiting the generality of the foregoing clause (c), any Term Loan
Lender may assign or otherwise transfer (in whole or in part) any Term Loan
Note or Term Loan held by it to any other Person or entity, and such other
Person or entity shall thereupon become vested with all the rights and benefits
in respect thereof granted to such Term Loan Lender under any Collateral
Document or any Loan Document (including this Security Agreement) or otherwise,
subject, however, to any contrary provisions in such assignment or transfer,
and to the provisions of Section 11.11 and Article X of the Term Loan
Agreement. Upon the full and complete payment, performance and satisfaction of
all of the Secured Obligations, the security interest granted herein shall
terminate and all rights to the Collateral shall revert to the Grantor. Upon
any such termination, the Collateral Agent will, at the Grantor's sole expense,
execute and deliver to the Grantor such documents as the Grantor shall
reasonably request to evidence such termination. Upon any sale or other
transfer of Collateral permitted by the terms of the Intercreditor Agreement,
the security interest created hereunder in such Collateral (but not in the
proceeds thereof) shall be deemed to be automatically released and the
Collateral Agent will, at the Grantor's sole expense, execute and deliver to
the Grantor such documents as the Grantor shall reasonably request to evidence
such release.
SECTION 2.4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding
(a) the Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and shall perform all of its duties and obligations under such
contracts and agreements,
(b) the exercise by the Collateral Agent of any of its rights
hereunder shall not release the Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral, and
(c) neither the Collateral Agent nor any other Secured Party
shall have any obligation or liability under any such contracts or
agreements included in the Collateral by reason of this Security
Agreement, nor shall the Collateral Agent or any other Secured Party
be obligated to perform any of the obligations or duties of the
Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
SECTION 2.5. SECURITY INTEREST ABSOLUTE. All rights of the
Collateral Agent and the security interests granted to the Collateral Agent
hereunder, and all obligations of the Grantor hereunder, shall be absolute and
unconditional, irrespective of
(a) any lack of validity or enforceability of the
Intercreditor Agreement, the Senior Secured Note Indenture, the Term
Loan Agreement, any Term Loan Note, any Senior Secured Note, any
Collateral Document or any other Loan Document;
(b) the failure of any Secured Party
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(i) to assert any claim or demand or to enforce
any right or remedy against the Borrower or any other Person
under the provisions of the Intercreditor Agreement, the
Senior Secured Note Indenture, the Term Loan Agreement, any
Term Loan Note, any Senior Secured Note, any Collateral
Document or any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Secured
Obligations;
(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations or
any other extension, compromise or renewal of any Secured Obligations;
(d) any reduction, limitation, impairment or termination
of any Secured Obligations for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be
subject to (and the Grantor hereby waives any right to or claim of)
any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or
occurrence affecting, any Secured Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the Intercreditor Agreement, the Senior Secured Note Indenture, the
Term Loan Agreement, any Term Loan Note, any Senior Secured Note, any
Collateral Document, or any other Loan Document;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, the Borrower, any surety or any guarantor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES. The Grantor represents
and warrants to each Secured Party (a) as to all matters contained in Article
VI of the Term Loan Agreement insofar as the representations and warranties
contained therein are applicable to the Grantor and its properties, each such
representation and warranty set forth in such Article (insofar as applicable as
aforesaid) and all other terms of the Term Loan Agreement to which reference is
made therein, together with all related definitions and ancillary provisions,
being hereby
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incorporated into this Security Agreement by reference as though specifically
set forth in this Section and (b) insofar as the representations and warranties
contained herein are applicable to the Grantor and its properties, as set forth
in this Section.
SECTION 3.1.1. LOCATION OF COLLATERAL, ETC. All of the Equipment of
the Grantor is located at the places specified in Item A of Schedule I hereto.
All of the lock boxes of the Grantor are located at the places specified in
Item B of Schedule I hereto. The place(s) of business and chief executive
office of the Grantor and the office(s) where the Grantor keeps its records
concerning the Contracts, and all originals of all chattel paper which evidence
Contracts, are located at the address set forth in Item C of Schedule I hereto.
The Grantor has no trade names. The Grantor has not been known by any legal
name different from the one set forth on the signature page hereto, nor has the
Grantor been the subject of any amalgamation, merger or other corporate
reorganization. All Contracts evidenced by a promissory note or other
instrument, negotiable document or chattel paper have been duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Collateral Agent and delivered and pledged to
the Collateral Agent pursuant to Section 4.1.7. The Grantor is not a party to
any federal, state, provincial, municipal or local government contract except
as set forth in Item F of Schedule I hereto.
SECTION 3.1.2. OWNERSHIP, NO LIENS, ETC. The Grantor owns its
Collateral free and clear of any Lien, security interest, charge or encumbrance
except for the security interest created by this Security Agreement and except
(a) as permitted under Section 7.2.2 of the Term Loan Agreement or (b) for any
Permitted Liens (as defined in the Senior Secured Note Indenture). No
effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any recording office, except
such as may have been filed in favor of the Collateral Agent relating to this
Security Agreement or as have been filed in connection with Liens permitted
pursuant to the Intercreditor Agreement.
SECTION 3.1.3. POSSESSION AND CONTROL. The Grantor has exclusive
possession and control (subject only to (a) Liens permitted under Section 7.2.2
of the Term Loan Agreement or (b) Permitted Liens (as defined in the Senior
Secured Note Indenture) of its Equipment.
SECTION 3.1.4. NEGOTIABLE DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER.
Subject to the proviso to clause (a) of Section 4.1.7, the Grantor has,
contemporaneously herewith, delivered to the Collateral Agent possession of all
originals of all negotiable documents, instruments and chattel paper currently
owned or held by the Grantor (duly endorsed in blank, if requested by the
Collateral Agent).
SECTION 3.1.5. INTELLECTUAL PROPERTY COLLATERAL. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting
and has not been adjudged invalid or unenforceable, in whole or in
part;
(b) such Intellectual Property Collateral is valid and
enforceable;
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(c) the Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property
Collateral, including recordations of all of its interests in the
Patent Collateral and Trademark Collateral in the United States Patent
and Trademark Office and in corresponding offices throughout the world
and its claims to the Copyright Collateral in the United States
Copyright Office and in corresponding offices throughout the world;
(d) the Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted
rights of any third party; and
(e) the Grantor has performed and will continue to
perform all acts and has paid and will continue to pay all required
fees and taxes to maintain each and every item of Intellectual
Property Collateral in full force and effect throughout the world, as
applicable.
The Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of the Grantor's
business except (a) as permitted under Section 7.2.2 of the Term Loan Agreement
or (b) for any Permitted Liens (as defined in the Senior Secured Note
Indenture).
SECTION 3.1.6. VALIDITY, ETC. Except (a) as permitted under Section
7.2.2 of the Term Loan Agreement or (b) for any Permitted Liens (as defined in
the Senior Secured Note Indenture), this Security Agreement creates a valid
first priority security interest in the Collateral, securing the payment of the
Secured Obligations, and all filings and other actions necessary or desirable
to perfect and protect such security interest have been duly taken.
SECTION 3.1.7. AUTHORIZATION, APPROVAL, ETC. Except as have been
obtained or made and are in full force and effect, no authorization, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required either
(a) for the grant by the Grantor of the security interest
granted hereby or for the execution, delivery and performance of this
Security Agreement by the Grantor, or
(b) for the perfection of or the exercise by the
Collateral Agent of its rights and remedies hereunder.
SECTION 3.1.8. COMPLIANCE WITH LAWS. The Grantor is in compliance
with the requirements of all applicable laws, rules, regulations and orders of
every governmental authority, the non-compliance with which would be reasonably
likely to have a Material Adverse Effect or materially adversely affect the
value of the Collateral or the worth of the Collateral as collateral security.
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ARTICLE IV
COVENANTS
SECTION 4.1. CERTAIN COVENANTS. The Grantor covenants and agrees
that, so long as any portion of the Secured Obligations shall remain unpaid,
any Term Loan Lender shall have any outstanding Term Loan Commitment, or any
obligations under the Intercreditor Agreement shall remain outstanding, the
Grantor will, unless the Collateral Agent (with the consent of the Term Loan
Lenders and the Holders as specified in the Intercreditor Agreement) shall
otherwise consent in writing, perform, comply with and be bound by (a) all of
the agreements, covenants and obligations contained in Article VII of the Term
Loan Agreement and in Article Ten of the Senior Secured Note Indenture which
are applicable to the Grantor or its properties, each such agreement, covenant
and obligation contained in each such Article and all other terms of each of
the Term Loan Agreement and the Senior Secured Note Indenture to which
reference is made herein, together with all related definitions and ancillary
provisions, being hereby incorporated into this Security Agreement by reference
as though specifically set forth in this Section and (b) the obligations set
forth in this Section.
SECTION 4.1.1. AS TO EQUIPMENT. The Grantor hereby agrees that it shall
(a) keep all the Equipment at the places therefor
specified in Section 3.1.1 or, upon 30 days' prior written notice to
the Collateral Agent, at such other places in a jurisdiction where all
representations and warranties set forth in Article III (including
Section 3.1.6) shall be true and correct, and all action required
pursuant to the first sentence of Section 4.1.7 shall have been taken
with respect to the Equipment;
(b) cause the Equipment to be maintained and preserved in
the same condition, repair and working order as when new, ordinary
wear and tear excepted, and in accordance with any manufacturer's
manual; and forthwith, or in the case of any loss or damage to any of
the Equipment, as quickly as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements, and other
improvements in connection therewith which are necessary or desirable
to such end; and promptly furnish to the Collateral Agent a statement
respecting any loss or damage to any of the Equipment; and
(c) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Equipment, except to the extent the validity thereof is being
contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been set aside.
SECTION 4.1.2. AS TO CONTRACTS.
(a) The Grantor shall keep its place(s) of business and
chief executive office and the office(s) where it keeps its records
concerning the Contracts, and all originals of all chattel paper which
evidences Contracts, located at the address(es) set forth in Item
- 12 -
13
D of Schedule I hereto, or, upon 30 days' prior written notice to the
Collateral Agent, at such other locations in a jurisdiction where all
actions required by the first sentence of Section 4.1.7 shall have
been taken with respect to the Contracts; not change its name except
upon 30 days' prior written notice to the Collateral Agent; hold and
preserve such records and chattel paper; and permit representatives of
the Collateral Agent at any time during normal business hours to
inspect and make abstracts from such records and chattel paper.
(b) Upon written notice by the Collateral Agent to the
Grantor pursuant to this Section 4.1.2(b), all proceeds of Collateral
received by the Grantor shall be delivered in kind to the Collateral
Agent for deposit to a deposit account (the "Collateral Account") of
the Grantor maintained with the Collateral Agent, and the Grantor
shall not commingle any such proceeds, and shall hold separate and
apart from all other property, all such proceeds in express trust for
the benefit of the Collateral Agent until delivery thereof is made to
the Collateral Agent. The Collateral Agent will not give the notice
referred to in the preceding sentence unless there shall have occurred
and be continuing a Default of the nature set forth in Section 8.1.9
of the Term Loan Agreement, a Default of the nature set forth in
Clause 10 or 11 of Section 501 of the Senior Secured Note Indenture or
an Event of Default.
(c) The Collateral Agent shall have the right to apply
any amount in the Collateral Account to the payment of any Secured
Obligations which are due and payable or payable upon demand, or to
the payment of any Secured Obligations at any time that an Event of
Default shall exist.
SECTION 4.1.3. AS TO COLLATERAL.
(a) Until the occurrence and continuance of a Default of
the nature set forth in Section 8.1.9 of the Term Loan Agreement, a
Default of the nature set forth in Clause 10 or 11 of Section 501 of
the Senior Secured Note Indenture or an Event of Default, and such
time as the Collateral Agent shall notify the Grantor of the
revocation of such power and authority, the Grantor (i) may use and
consume, in the ordinary course of its business (except as otherwise
permitted under the Intercreditor Agreement), any raw materials, work
in process or materials normally held by the Grantor for such purpose,
(ii) will, at its own expense, endeavour to collect, as and when due,
all amounts due with respect to any of the Collateral, including the
taking of such action with respect to such collection as the
Collateral Agent may reasonably request following the occurrence of a
Default of the nature set forth in Section 8.1.9 of the Term Loan
Agreement, a Default of the nature set forth in Clause 10 or 11 of
Section 501 of the Senior Secured Note Indenture or an Event of
Default or, in the absence of such request, as the Grantor may deem
advisable,(iii) may grant, in the ordinary course of business (except
as otherwise permitted under the Intercreditor Agreement), to any
party obligated on any of the Collateral, any rebate, refund or
allowance to which such party may be lawfully entitled, and may
accept, in connection therewith, the return of goods, the sale or
lease of which shall have given rise to such Collateral, and (iv) may
commercially exploit the Intellectual Property Collateral, defend it,
enforce its rights in it against third parties and
- 13 -
14
be entitled to receive any damages with respect to any infringement of
it. The Collateral Agent, however, may, at any time following a
Default of the nature set forth in Section 8.1.9 of the Term Loan
Agreement, a Default of the nature set forth in Clause 10 or 11 of
Section 501 of the Senior Secured Note Indenture or an Event of
Default, whether before or after any revocation of such power and
authority or the maturity of any of the Secured Obligations, notify
any parties obligated on any of the Collateral to make payment to the
Collateral Agent of any amounts due or to become due thereunder and
enforce collection of any of the Collateral by suit or otherwise and
surrender, release, or exchange all or any part thereof, or compromise
or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder or evidenced thereby.
Upon request of the Collateral Agent following a Default of the nature
set forth in Section 8.1.9 of the Term Loan Agreement, a Default of
the nature set forth in Clause 10 or 11 of Section 501 of the Senior
Secured Note Indenture or an Event of Default, the Grantor will, at
its own expense, notify any parties obligated on any of the Collateral
to make payment to the Collateral Agent of any amounts due or to
become due thereunder.
(b) The Collateral Agent is authorized to endorse, in the
name of the Grantor, any item, howsoever received by the Collateral
Agent, representing any payment on or other proceeds of any of the
Collateral.
SECTION 4.1.4. AS TO INTELLECTUAL PROPERTY COLLATERAL. The Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of the Grantor that:
(a) the Grantor shall not, unless the Grantor shall
either (i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that
any of the Patent Collateral is of negligible economic value to the
Grantor, or (ii) have a valid business purpose to do otherwise, do any
act, or omit to do any act, whereby any of the Patent Collateral may
lapse or become abandoned or dedicated to the public or unenforceable.
(b) the Grantor shall not, and the Grantor shall not
permit any of its licensees to, unless the Grantor shall either (i)
reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that
any of the Trademark Collateral is of negligible economic value to the
Grantor, or (ii) have a valid business purpose to do otherwise,
(i) fail to continue to use any of the Trademark
Collateral in order to maintain all of the Trademark
Collateral in full force free from any claim of abandonment
for non-use,
(ii) fail to maintain as in the past the quality
of products and services offered under all of the Trademark
Collateral,
- 14 -
15
(iii) fail to employ all of the Trademark
Collateral registered with any federal, state, provincial,
municipal, local or foreign authority with an appropriate
notice of such registration,
(iv) adopt or use any other Trademark which is
confusingly similar or a colourable imitation of any of the
Trademark Collateral,
(v) use any of the Trademark Collateral registered
with any federal, state, provincial, municipal, local or
foreign authority except for the uses for which registration
or application for registration of all of the Trademark
Collateral has been made, and
(vi) do or permit any act or knowingly omit to do
any act whereby any of the Trademark Collateral may lapse or
become invalid or unenforceable.
(c) the Grantor shall not, unless the Grantor shall
either
(i) reasonably and in good faith determine (and
notice of such determination shall have been delivered to the
Collateral Agent) that any of the Copyright Collateral or any
of the Trade Secrets Collateral is of negligible economic
value to the Grantor, or
(ii) have a valid business purpose to do
otherwise, do or permit any act or knowingly omit to do any
act whereby any of the Copyright Collateral or any of the
Trade Secrets Collateral may lapse or become invalid or
unenforceable or placed in the public domain except upon
expiration of the end of an unrenewable term of a registration
thereof.
(d) the Grantor shall notify the Collateral Agent
immediately if it knows, or has reason to know, that any application
or registration relating to any material item of the Intellectual
Property Collateral may become abandoned or dedicated to the public or
placed in the public domain or invalid or unenforceable, or of any
adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office
or any foreign counterpart thereof or any court) regarding the
Grantor's ownership of any of the Intellectual Property Collateral,
its right to register the same or to keep and maintain and enforce the
same.
(e) in no event shall the Grantor or any of its agents,
employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United
States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency in any other country or any political
subdivision thereof, unless it promptly informs the Collateral Agent,
and upon request of the Collateral Agent, executes and delivers any
and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral
Agent's
- 15 -
16
security interest in such Intellectual Property Collateral and the
goodwill and general intangibles of the Grantor relating thereto or
represented thereby.
(f) the Grantor shall take all necessary steps, including
in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, to
maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any registration
of, the Intellectual Property Collateral, including the filing of
applications for renewal, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation
proceedings and the payment of fees and taxes (except to the extent
that dedication, abandonment or invalidation is permitted under the
foregoing clauses (a), (b) and (c)).
(g) the Grantor shall, if requested by the Collateral
Agent, execute and deliver to the Collateral Agent a Patent Security
Agreement, a Trademark Security Agreement and a Copyright Security
Agreement in the forms of Exhibit A, Exhibit B and Exhibit C hereto,
respectively, and shall execute and deliver to the Collateral Agent
any other document required to acknowledge or register or perfect the
Collateral Agent's interest in any part of the Intellectual Property
Collateral.
SECTION 4.1.5. INSURANCE. The Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment) against such casualties and
contingencies and of such types and in such amounts as is required pursuant to
each of the Term Loan Agreement and the Senior Secured Note Indenture, and
will, upon the request of the Collateral Agent, furnish a certificate of a
reputable insurance broker setting forth the nature and extent of all insurance
maintained by the Grantor in accordance with this Section. Without limiting
the foregoing, the Grantor further agrees as follows:
(a) Each policy for property insurance shall show the
Collateral Agent as loss payee.
(b) Each policy for liability insurance shall show the
Collateral Agent as an additional insured.
(c) Each insurance policy shall provide that at least 30
days' prior written notice of cancellation or of lapse shall be given
to the Collateral Agent by the insured.
(d) The Grantor shall, if so requested by the Collateral
Agent, deliver to the Collateral Agent a copy of each insurance
policy.
(e) All payments in respect of property insurance shall
be deposited to the Collateral Account and if there shall be no
Collateral Account shall be paid to the Grantor.
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17
SECTION 4.1.6. TRANSFERS AND OTHER LIENS. The Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the
Intercreditor Agreement; or
(b) create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral to secure
Indebtedness of any Person or entity, except for the security interest
created by this Security Agreement and except as permitted by the
Intercreditor Agreement.
SECTION 4.1.7. FURTHER ASSURANCES, ETC. The Grantor agrees that,
from time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Collateral Agent may request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, the Grantor will
(a) if any Contract shall be evidenced by a promissory
note or other instrument, negotiable document or chattel paper,
deliver and pledge to the Collateral Agent hereunder such promissory
note, instrument, negotiable document or chattel paper duly endorsed
and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Collateral
Agent; provided, however, that unless there shall have occurred and be
continuing a Default of the nature set forth in Section 8.1.9 of the
Term Loan Agreement, a Default in the nature set forth in Clause 10 or
11 of Section 501 of the Senior Secured Note Indenture or an Event of
Default,
(i) no such promissory note, instrument,
negotiable document or chattel paper that has
a fair market value of less than $500,000
individually, or
(ii) such promissory notes, instruments,
negotiable documents or chattel paper that
collectively have a fair market value in the
aggregate of less than $1,000,000,
shall be required to be delivered unless otherwise required pursuant
to the Term Loan Agreement, any other Loan Document (as such term is
defined in the Term Loan Agreement) the Senior Secured Indenture or
any other Collateral Document;
(b) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices (including any assignment of claim form under or pursuant to
the PPSA, any successor or amended version thereof or any regulation
promulgated under or pursuant to any version thereof), as may be
necessary or desirable, or as the Collateral Agent may request, in
order to perfect and preserve the security interests and other rights
granted or purported to be granted to the Collateral Agent hereby; and
- 17 -
18
(c) furnish to the Collateral Agent, from time to time at
the Collateral Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Collateral Agent may reasonably
request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all
or any part of the Collateral without the signature of the Grantor where
permitted by law. A carbon, photographic or other reproduction of this
Security Agreement or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.
ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. The
Grantor hereby irrevocably appoints the Collateral Agent the Grantor's
attorney-in-fact, with full authority in the place and stead of the Grantor and
in the name of the Grantor or otherwise, from time to time in the Collateral
Agent's discretion, following the occurrence and continuation of a Default of
the nature set forth in Section 8.1.9 of the Term Loan Agreement, a Default of
the nature set forth in Clause 10 or 11 of Section 501 of the Senior Secured
Note Indenture or an Event of Default, to take any action and to execute any
instrument which the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Security Agreement, including:
(a) to ask, demand, collect, xxx for, recover,
compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) above;
(c) to file any claims or take any action or institute
any proceedings which the Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Collateral Agent with respect to any of the
Collateral; and
(d) to perform the affirmative obligations of the Grantor
hereunder (including all obligations of the Grantor pursuant to
Section 4.1.7).
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. COLLATERAL AGENT MAY PERFORM. If the Grantor fails to
perform any agreement contained herein, the Collateral Agent may itself
perform, or cause performance of,
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19
such agreement, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by the Grantor pursuant to Section 6.2.
SECTION 5.3. COLLATERAL AGENT HAS NO DUTY. In addition to, and not
in limitation of, Section 2.4, the powers conferred on the Collateral Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining
to any Collateral.
SECTION 5.4. REASONABLE CARE. The Collateral Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as the Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the Collateral
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the PPSA (whether or not the PPSA
applies to the affected Collateral) and also may
(i) require the Grantor to, and the Grantor
hereby agrees that it will, at its expense and upon request of
the Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place to be designated
by the Collateral Agent which is reasonably convenient to both
parties, and
(ii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent
may deem commercially reasonable. The Grantor agrees that, to
the extent notice of sale shall be required by law, at least
ten days' prior notice to the Grantor of the time and place of
any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any
- 19 -
20
sale of Collateral regardless of notice of sale having been
given. The Collateral Agent may adjourn any public or private
sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Collateral Agent in
respect of any sale of, collection from, or other realization upon all
or any part of the Collateral may, in the discretion of the Collateral
Agent, be held by the Collateral Agent as collateral for, and/or then
or at any time thereafter applied (after payment of any amounts
payable to the Collateral Agent pursuant to Section 6.2) in whole or
in part by the Collateral Agent for the ratable benefit of the Secured
Parties against, all or any part of the Secured Obligations in such
order as the Collateral Agent shall elect. Any surplus of such cash
or cash proceeds held by the Collateral Agent and remaining after
payment in full in cash of all the Secured Obligations shall be paid
over to the Grantor or to whomsoever may be lawfully entitled to
receive such surplus.
SECTION 6.2. INDEMNITY AND EXPENSES.
(a) The Grantor agrees to indemnify the Collateral Agent
from and against any and all claims, losses and liabilities arising
out of or resulting from this Security Agreement (including
enforcement of this Security Agreement), except claims, losses or
liabilities resulting from the Collateral Agent's gross negligence or
wilful misconduct.
(b) The Grantor will upon demand pay to the Collateral
Agent the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any experts
and agents, which the Collateral Agent may incur in connection with
(i) the administration of this Security
Agreement,
(ii) the custody, preservation, use or operation
of, or, after the occurrence and during the continuance of an
Event of Default, the sale of, collection from, or other
realization upon, any of the Collateral, and
(iii) the exercise or enforcement of any of the
rights of the Collateral Agent or the Secured Parties
hereunder, or (iv) the failure by the Grantor to perform or
observe any of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. COLLATERAL DOCUMENT. This Security Agreement is a
Collateral Document executed pursuant to the Intercreditor Agreement and shall
(unless otherwise expressly indicated herein) be construed, administered and
applied in accordance with the terms and provisions of the Intercreditor
Agreement.
- 20 -
21
SECTION 7.2. AMENDMENTS; ETC. No amendment to or waiver of any
provision of this Security Agreement nor consent to any departure by the
Grantor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Collateral Agent (on behalf of the Secured Parties),
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 7.3. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing or by facsimile and,
if to the Grantor, addressed, delivered or transmitted to the Grantor in care
of the Borrower at the address or facsimile number of the Borrower specified in
the Intercreditor Agreement, if to the Collateral Agent, addressed, delivered
or transmitted to it at the address or facsimile number of the Collateral Agent
specified in the Intercreditor Agreement. 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 which transmitted (and
electronic confirmation of receipt thereof has been received).
SECTION 7.4. SECTION CAPTIONS. Section captions used in this
Security Agreement are for convenience of reference only, and shall not affect
the construction of this Security Agreement.
SECTION 7.5. SEVERABILITY. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Security Agreement.
SECTION 7.6. COUNTERPARTS. This Security Agreement may be executed
by the parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.7. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS
OF THE PROVINCE OF NEW BRUNSWICK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE PROVINCE OF NEW BRUNSWICK. THIS SECURITY AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
- 21 -
22
IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
PCI CHEMICALS CANADA INC./PRODUITS
CHIMIQUES PCI CANADA INC., a New
Brunswick corporation
By: /s/ XXXX X. XXXXXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
UNITED STATES TRUST COMPANY OF NEW
YORK, as Collateral Agent
By: /s/ XXXXXXXX XXXXXXX
------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Assistant Vice President
23
SCHEDULE I
TO SUBSIDIARY
SECURITY AGREEMENT
ITEM A. LOCATION OF EQUIPMENT
DESCRIPTION LOCATION
The Equipment of the Grantor is located at the
following address:
1. 000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx
2. 0000 Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
3. Dalhousie, New Brunswick
4. Point Xxxxxx, Nova Scotia
ITEM B. LOCATION OF LOCK BOXES
Nil
Contact
----------------------------------
Bank Name and Address Account Number Person
--------------------- -------------- ------
1. Nil
2.
3.
ITEM C. PLACE(S) OF BUSINESS AND CHIEF EXECUTIVE OFFICE
1. PCI Chemicals Canada Inc.
000 Xxxx-Xxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0X0
24
2. 000 Xxxxxxxx-Xxxxxxxx Xxxxxxxxx
Xxxx xx Xxxxxxxxxx
Xxxxxx, Xxxxxx
X0X 0X0
3. 000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx
4. 0000 Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
5. Dalhousie, New Brunswick
ITEM D. TRADE NAMES
Nil
ITEM E. MERGER OR OTHER CORPORATE REORGANIZATION
Nil
ITEM F. GOVERNMENT CONTRACTS
1. Purchase Order with City of Windsor November 26, 1996
Public Works Department
2. Energy Supply Agreement between New April 1, 1996
Brunswick Power Corp. and ICI Canada Inc.
3. Energy Supply Agreement with Cornwall January 26, 1993
Street Railway Light and Power Co. Ltd.
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