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EXHIBIT 4.6(c)
MASTER SECURITY AGREEMENT
THIS MASTER SECURITY AGREEMENT is made as of the 17th day of
June, 1997 by each of the parties listed on Exhibit A attached hereto
(collectively, "GUARANTORS" and individually a "GUARANTOR"), in favor of Bank
of America Illinois ("AGENT"), as agent for itself and each other Lender (each,
a "LENDER") party to the "Loan Agreement" (as defined herein), with an address
at 231 South LaSalle Street, Chicago, Illinois 60697.
1. DEFINITIONS.
As used in this Agreement:
"AGREEMENT" shall mean this Security Agreement, as it may be
amended, modified or supplemented from time to time.
"BORROWER" shall mean Pioneer Americas Acquisition Corp., a
Delaware corporation and the direct or indirect owner of one hundred percent
(100%) of the issued and outstanding capital stock of each Guarantor.
"COLLATERAL" shall mean all of the following property of each
Guarantor, whether now owned or existing, or hereafter acquired or coming into
existence, wherever now or hereafter located:
(a) Accounts Receivable (whether or not Eligible Accounts
Receivable); Contract Rights; any and all security deposits and other
security held by or granted to such Guarantor to secure payments from
any and all persons who are or may become obligated to such Guarantor
under, with respect to, or on account of any Account Receivable or
Contract Right; and all chattel paper and instruments evidencing,
arising out of or relating to any obligations to such Guarantor for
goods sold or leased or services rendered, or otherwise arising out of
or relating to any Collateral;
(b) Inventory (whether or not Eligible Inventory);
(c) General Intangibles;
(d) Any and all balances, credits, deposits (general or
special, time or demand, provisional or final), accounts or monies of
or in the name of such Guarantor now or hereafter with Agent, any
Lender or any Participant and any and all property of every kind or
description of or in the name of such Guarantor now or hereafter, for
any reason or purpose whatsoever, in the possession or control of, or
in transit to, or standing to such Guarantor's credit on the books of,
Agent, any agent or bailee for Agent, any Lender or any Participant;
(e) To the extent related to the property described in
clauses (a) through (d) above, all books, correspondence, credit
files, records, invoices and
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other papers and documents, including without limitation, to the
extent so related, all tapes, cards, computer runs, computer programs
and other papers and documents in the possession or control of such
Guarantor or any computer bureau from time to time acting for such
Guarantor, and, to the extent so related, all rights in, to and under
all policies of insurance, including claims of rights to payments
thereunder and proceeds therefrom, including any credit insurance; and
(f) All products and proceeds (including but not limited
to any Accounts Receivable or other proceeds arising from the sale or
other disposition of any property described above, any returns of
Inventory sold by such Guarantor, and the proceeds of any insurance
covering any of the property described above) of any of the foregoing.
"DEFAULT" shall mean the occurrence or existence of any
of the events listed in Section 5 of this Agreement.
"GUARANTY" shall mean the Master Corporate Guaranty of
even date herewith executed by each Guarantor in favor of Agent, as it may be
amended, modified or supplemented from time to time.
"GUARANTY DOCUMENTS" shall mean, collectively, this
Agreement, the Guaranty and all other agreements, instruments and documents now
or hereafter executed and/or delivered by any Guarantor to Agent in connection
with the transactions contemplated thereby, as each may be amended, modified or
supplemented from time to time.
"LOAN AGREEMENT" shall mean the Loan and Security
Agreement of even date herewith among Borrower, Agent and each Lender, together
with Supplement A thereto, as each may be amended, modified or supplemented
from time to time.
"OBLIGATIONS" shall mean all obligations with respect
to the Guaranty and all other loans and all other advances, debts, liabilities,
obligations, covenants and duties arising, due or payable from any Guarantor to
Agent and each Lender of any kind or nature, present or future, and arising
under the Guaranty, the Loan Agreement, the Related Agreements or any of the
other Guaranty Documents, whether direct or indirect (including those acquired
by assignment), absolute or contingent, primary or secondary, due or to become
due, now existing or hereafter arising and however acquired. The term
includes, without limitation, all interest, charges, expenses, fees, attorneys'
fees and any other sums chargeable to any Guarantor under the Guaranty, this
Agreement, the Related Agreements or any other Guaranty Documents.
The foregoing definitions shall be equally applicable
to both the singular and plural forms of the defined terms. Capitalized terms
used in this Agreement without definition and defined in the Loan Agreement
shall have the meanings ascribed to such terms in the Loan Agreement. Terms
used in this Agreement and not defined herein or in the Loan Agreement shall
have the meanings given such terms in the Uniform Commercial Code.
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2. SECURITY INTEREST.
2.1.Grant of Security Interest. To secure the payment
and performance of the Obligations, each Guarantor hereby grants to Agent, for
the benefit of itself and Lenders, a continuing security interest in the
Collateral.
2.2.Accounts Receivable.
(a) If requested by Agent, each Guarantor shall
notify Agent immediately of all material disputes or claims by any Account
Debtor and, if reasonably requested by Agent after the occurrence and during
the continuance of a Default, settle or adjust them, or cause them to be
settled or adjusted, at no expense to Agent or Lenders. If Agent directs after
the occurrence and during the continuance of a Default, no discount or credit
allowance shall be granted thereafter by any Guarantor to any Account Debtor,
other than discounts and trade allowances offered in the ordinary course of
such Guarantor's business. If requested by Agent, each Guarantor will make
proper entries in its books and records, disclosing the assignment of Accounts
Receivable to Agent, for the benefit of itself and Lenders.
(b) Each Guarantor warrants and covenants that:
(i) all of such Guarantor's Accounts Receivable are and will continue to be
bona fide existing obligations created by the sale of goods, the rendering of
services, or the furnishing of other good and sufficient consideration to such
Guarantor's Account Debtors in the regular course of business; (ii) all
shipping or delivery receipts and other documents furnished or to be furnished
to Agent by such Guarantor upon Agent's request in connection therewith are and
will be genuine; and (iii) none of such Guarantor's Accounts Receivable
identified or included on any schedule, Borrowing Base Certificate or report as
Eligible Accounts Receivable fail at the time so identified or included to
satisfy any of the requirements for eligibility set forth in the definition of
Eligible Accounts Receivable.
(c) Agent is authorized and empowered (which
authorization and power, being coupled with an interest, is irrevocable until
the last to occur of termination of this Agreement and the Guaranty Documents,
termination of the Loan Agreement, and payment and performance in full of all
of the Obligations) at any time in its sole and absolute discretion:
(i) To request, in the name of Agent, Borrower, any
Guarantor or a third party, confirmation from any Account Debtor or
party obligated under or with respect to any Collateral of the amount
shown by the Accounts Receivable or other Collateral to be payable, or
any other matter stated therein;
(ii) To endorse in any Guarantor's name and to collect any
chattel paper, checks, notes, drafts, instruments or other items of
payment tendered to or received by Agent in payment of any Account
Receivable or other obligation owing to such Guarantor;
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(iii) After the occurrence and during the continuance of a
Default, to notify, either in Agent's name, Borrower's name or any
Guarantor's name, and/or to require any Guarantor to notify, any
Account Debtor or other Person obligated under or in respect of any
Collateral, of the fact of Agent's Lien thereon, for the benefit of
itself and Lenders, and of the collateral assignment thereof to Agent,
for the benefit of itself and Lenders;
(iv) After the occurrence and during the continuance of a
Default, to direct, either in any Guarantor's name or Agent's name,
and/or to require any Guarantor to direct, any Account Debtor or other
Person obligated under or in respect of any Collateral to make payment
directly to Agent of any amounts due or to become due thereunder or
with respect thereto; and
(v) After the occurrence and during the continuance of a
Default, to demand, collect, surrender, release or exchange all or any
part of any Collateral or any amounts due thereunder or with respect
thereto, or compromise or extend or renew for any period (whether or
not longer than the initial period) any and all sums which are now or
may hereafter become due or owing upon or with respect to any of the
Collateral, or enforce, by suit or otherwise, payment or performance
of any of the Collateral either in Agent's own name or in the name of
any Guarantor.
Under no circumstances shall Agent be under any duty to act in regard to any of
the foregoing matters. The costs relating to any of the foregoing matters,
including Attorneys' Fees and out-of-pocket expenses, and the cost of any
Depository Account, Assignee Deposit Account, or other bank account or accounts
which may be required hereunder, shall be borne solely by Guarantors whether
the same are incurred by Agent or Guarantors.
(d) Each Guarantor will notify its Account Debtors to
make all payments in respect of such Guarantor's Accounts Receivable directly
to one or more lockbox accounts evidenced by agreements in form and substance
satisfactory to Agent. All deposits to such lockbox accounts, and all checks,
drafts, cash and other remittances in payment or as proceeds of, or on account
of, any of the Accounts Receivable or other Collateral, shall be deposited in
special bank accounts (the "Depository Accounts") at such banks or financial
institutions as Agent shall consent. Said proceeds shall be deposited in
precisely the form received except for such Guarantor's endorsement where
necessary to permit collection of items, which endorsement such Guarantor
agrees to make. Pending such deposit, each Guarantor agrees not to commingle
any such checks, drafts, cash and other remittances with any of its funds or
property, but will hold them separate and apart therefrom and upon an express
trust for Agent, for the benefit of itself and Lenders, until deposit thereof
is made in the Depository Accounts. All funds in the Depository Accounts at
the end of each Banking Day will be wire transferred or transferred by other
means acceptable to Agent to a special bank account (the "Assignee Deposit
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Account") at Bank of America Illinois over which Agent alone has power of
withdrawal. Each Guarantor acknowledges that the maintenance of the Assignee
Deposit Account is solely for the convenience of Agent in facilitating its own
operations, and no Guarantor has or shall have any right, title or interest in
the Assignee Deposit Account or in the amounts at any time appearing to the
credit thereof, it being understood that if proceeds in the Assignee Deposit
Account are subsequently transferred to the Demand Deposit Account or operating
account, or a cash collateral account in accordance with Section 2.10(b)(i) of
the Loan Agreement, at the direction of Borrower, one or more of the Guarantors
may be entitled to such proceeds. Each Guarantor agrees not to maintain any
depository accounts other than Depository Accounts, the Demand Deposit Account
and the Assignee Deposit Account established pursuant to this Section 2.2(d).
Upon the full and final liquidation of all Payment Liabilities, Agent will pay
over to Borrower, on behalf of such Guarantor any excess amounts received by
Agent as payment or proceeds of Collateral, whether received by Agent as a
deposit in the Assignee Deposit Account, contained in a lockbox account or any
Depository Account or received by Agent as a direct payment on any of the sums
due hereunder.
(e) Each Guarantor appoints Agent, or any Person whom
Agent may from time to time designate, as such Guarantor's attorney and
agent-in-fact with power: (i) after the occurrence and during the continuance
of a Default, to notify the post office authorities to change the address for
delivery of such Guarantor's mail to an address designated by Agent; (ii) to
receive, open and dispose of all mail addressed to such Guarantor, but received
by Agent; (iii) to send requests for verification of Accounts Receivable or
other Collateral to Account Debtors; (iv) to open, under Agent's sole control
(subject, where applicable, to the provisions of the Loan Agreement), an
Assignee Deposit Account, Depository Accounts, Lockbox accounts or other
accounts required under this Agreement for the collection of Accounts
Receivable or other Collateral, if not required contemporaneously with the
execution hereof and if not previously opened by such Guarantor; and (v) to do
all other things which Agent is permitted to do under this Agreement or any
Guaranty Documents or which are necessary to carry out this Agreement and the
Guaranty Documents. Neither Agent nor any of its directors, officers,
employees or agents will be liable for any acts of commission or omission nor
for any error in judgment or mistake of fact or law, unless the same shall have
resulted from gross negligence or willful misconduct. The foregoing
appointment and power, being coupled with an interest, is irrevocable until all
Obligations under this Agreement are paid and performed in full and this
Agreement, the Guaranty Documents, and the Loan Agreement are each terminated.
Each Guarantor expressly waives presentment, demand, notice of dishonor and
protest of all instruments and any other notice to which it might otherwise be
entitled.
(f) If any Guarantor's Account Receivable or Contract
Right, in either case in excess of $2,000,000, and designated by Borrower as an
Eligible Account, arises out of a contract with the United States or any state
or local governmental entity, or any department, agency, or instrumentality
thereof, such Guarantor will immediately notify Agent in writing and execute
any instruments and take any steps reasonably required by Agent in order that
all monies due and to become due under such contract shall be assigned to
Agent, for the benefit of itself and Lenders, and notice thereof given to the
applicable government under the Federal Assignment of Claims Act of 1940, as
amended, or other applicable laws or regulations, provided, that with respect
to such Accounts Receivable and Contract Rights in existence on
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the Closing Date or within 90 days thereafter, such steps need not be completed
until 90 days after the Closing Date. The failure of a Guarantor to comply
with this clause (f) shall not by itself constitute a Default; rather, such
failure will cause the applicable Account Receivable or Contract Right to be
deemed not to be an Eligible Account under the Loan Agreement.
(g) If any Guarantor's Account Receivable or Contract
Right is evidenced by chattel paper or promissory notes, trade acceptances, or
other instruments for the payment of money, such Guarantor will, unless Agent
shall otherwise agree, deliver the originals of same to Agent, appropriately
endorsed to Agent's order and, regardless of the form of such endorsement, such
Guarantor hereby expressly waives presentment, demand, notice of dishonor,
protest and notice of protest and all other notices with respect thereto.
2.3. Inventory.
(a) Each Guarantor warrants and covenants that: (i) all
of the Inventory is, and at all times shall be, owned by such Guarantor free of
all claims and Liens (except as set forth in Section 5.15 of the Loan
Agreement); and no Guarantor will make any further assignment of any thereof or
create or permit to exist any further Lien thereon, unless approved in writing
by Requisite Lenders, nor permit any of Agent's rights therein to be affected
by any attachment, levy, garnishment or other judicial process.
(b) Neither Agent nor any Lender shall be liable or
responsible in any way for the safekeeping of any Inventory delivered to it, to
any bailee appointed by or for it, to any warehouseman, or under any other
circumstances, other than for losses caused by its gross negligence or willful
misconduct. Neither Agent nor any Lender shall be responsible for collection
of any proceeds or for losses in collected proceeds held by any Guarantor in
trust for Agent. Any and all risk of loss for any or all of the foregoing
shall be upon Guarantors.
(c) Any material change in the value or condition of any
Inventory, and any errors discovered in any monthly inventory certificate under
Section 5.1.3 of the Loan Agreement or any other inventory schedule delivered
to Agent and Lenders, shall be reported to Agent promptly. Each Guarantor
represents and warrants that, as to each schedule of Inventory delivered by
Borrower to Agent or any Lender:
(i) The descriptions, origins, sizes, qualities,
quantities, weights, and markings of all of such Guarantor's goods
stated thereon, or on any attachment thereto, are true and correct in
all respects;
(ii) None of such Guarantor's goods are defective, of
second quality, used, or goods returned after shipment, except where
described as such; and
(iii) All of such Guarantor's Inventory not included on
such schedule has been previously scheduled.
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2.4. Supplemental Documentation. At Agent's request, each
Guarantor shall execute and deliver, or cause to be executed and delivered, to
Agent, at any time or times hereafter, such agreements, documents, financing
statements, warehouse receipts, bills of lading, notices of assignment of
Accounts Receivable, schedules of Accounts Receivable assigned, and other
written matter necessary or reasonably requested by Agent to perfect and
maintain perfected Agent's security interest in the Collateral, for the benefit
of itself and Lenders (all the above hereinafter referred to as "Supplemental
Documentation"), in form and substance acceptable to Agent, and pay all taxes,
fees and other costs and expenses associated with any recording or filing of
the Supplemental Documentation. Each Guarantor hereby irrevocably makes,
constitutes and appoints Agent (and all Persons designated by Agent for that
purpose) as such Guarantor's true and lawful attorney (and agent-in-fact)
(which appointment and power, being coupled with an interest, is irrevocable
until the last to occur of termination of this Agreement and the Guaranty
Documents, termination of the Loan Agreement, and payment and performance in
full of all of the Obligations under this Agreement) to sign the name of such
Guarantor on any of the Supplemental Documentation and to deliver any of the
Supplemental Documentation to such Persons as Agent in its sole and absolute
discretion, may elect. Each Guarantor agrees that a carbon, photographic,
photostatic, or other reproduction of this Agreement or of a financing
statement is sufficient as a financing statement.
2.5. Collateral for the Benefit of Agent and Lenders. All
Liens granted to Agent hereunder and under the Guaranty Documents and all
Collateral delivered to Agent hereunder and under the Guaranty Documents shall
be deemed to have been granted and delivered to Agent, for the benefit of
itself and Lenders, to secure the Obligations.
2.6. Certain Intellectual Property. Each Guarantor hereby
grants Agent, for the benefit of Lenders, a world-wide irrevocable license or
other right to use, without charge, labels, rights of use of any name,
tradenames, trademarks and advertising matter, or any assets and property of a
similar nature (collectively, the "Intangible Rights"), as they pertain to the
Collateral, in advertising for sale and selling any Collateral and such
Guarantor's rights under all applicable licenses and license agreements related
to the foregoing shall inure to Agent's benefit. Such license shall remain in
full force and effect until all of the Obligations have been repaid in full.
Any transfer of or Lien on the Intangible Rights granted by any Guarantor to
any other Person shall be subject in all respects to Agent's rights granted
hereunder.
3. REPRESENTATIONS AND WARRANTIES.
Each Guarantor hereby makes with respect to itself those
representations and warranties to Agent and Lenders applicable to such
Guarantor as are set forth in Section 4 of the Loan Agreement.
4. COVENANTS AND CONTINUING AGREEMENTS.
Each Guarantor hereby covenants and agrees that, as long as
any of the Obligations remain outstanding, and even if there shall be no
Obligations outstanding, as long
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as this Agreement, any Guaranty Document or the Loan Agreement remains in
effect, each Guarantor shall comply, with respect to itself, with each of the
covenants set forth in Section 5 of the Loan Agreement.
5. DEFAULT.
5.1. Default. Each of the following occurrences shall
constitute a Default under this Agreement:
(a) Breach of Loan Agreement. The occurrence of any
Event of Default under the Loan Agreement.
(b) Breach of Payment Obligations. Any Guarantor's
failure to pay when due any Obligations of such Guarantor under the
Guaranty.
(c) Breach of This Agreement. The occurrence of any
breach of any of the covenants contained herein.
(d) Termination of Guaranty. The termination of the
Guaranty by any Guarantor.
(e) Bankruptcy. Any Guarantor applies for, consents to,
or acquiesces in the appointment of a trustee, receiver or other
custodian for Borrower, such Guarantor or any other Guarantor, or for
a substantial part of the property of Borrower, such Guarantor or any
other Guarantor, or makes a general assignment for the benefit of
creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for
Borrower or any Guarantor or for a substantial part of the property of
Borrower or any Guarantor and is not discharged or dismissed within
sixty (60) days; or any bankruptcy, reorganization, debt arrangement
or other proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding, is instituted by or against
Borrower or any Guarantor; or any warrant of attachment or similar
legal process is issued against any substantial part of the property
of Borrower or any Guarantor.
5.2. Effect of Event of Default; Remedies.
(a) In the event that one or more Events of Default
described in Section 6.1(e) of the Loan Agreement or one or more Defaults
described in Section 5.1(e) of this Agreement shall occur, then all
Obligations shall be immediately due and payable without demand, notice or
declaration of any kind whatsoever.
(b) In the event an Event of Default other than one
described in Section 6.1(e) of the Loan Agreement or one or more Defaults
described in Section 5.1(e) of this Agreement shall occur, then Agent may
declare all Obligations immediately due and payable
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without demand or notice of any kind whatsoever. Agent shall promptly advise
Guarantors of any such declaration.
(c) In the event of the occurrence of any Default, Agent
may exercise any one or more or all of the following remedies, all of which are
cumulative and non-exclusive:
(i) Any remedy contained in this Agreement or in any of
the Guaranty Documents;
(ii) Any rights and remedies available to Agent or any
Lender under the UCC, and any other applicable law;
(iii) To the extent permitted by applicable law, Agent may,
without notice, demand or legal process of any kind, take possession
of any or all of the Collateral (in addition to Collateral which it
may already have in its possession), wherever it may be found, and for
that purpose may pursue the same wherever it may be found, and may
enter into any premises where any of the Collateral may be or is
supposed to be, and search for, take possession of, remove, keep and
store any of the Collateral until the same shall be sold or otherwise
disposed of, and Agent shall have the right to store the same on any
Guarantor's premises without cost to Agent;
(iv) At Agent's request, each Guarantor will, at such
Guarantor's expense, assemble the Collateral and make it available to
Agent at a place or places to be designated by Agent which is
reasonably convenient to Agent and such Guarantor; and
(v) Agent at its option, and pursuant to notification
given to a Guarantor as provided for below, may sell any Collateral
actually or constructively in its possession at public or private sale
and apply the proceeds thereof as provided below.
5.3. Notice of Disposition of Collateral. Any
notification of intended disposition of any of the Collateral required by law
shall be deemed reasonably and properly given if given at least ten (10)
calendar days before such disposition.
5.4. Application of Proceeds of Collateral. Any proceeds
of any disposition by Agent of any of the Collateral may be applied by Agent to
the payment of expenses in connection with the taking possession of, storing,
preparing for sale, and disposition of Collateral, including Attorneys' Fees
and legal expenses, and any balance of such proceeds may be applied by Agent
toward the payment of such of the Obligations, and in such order of
application, as Agent may from time to time elect.
5.5. Care of Collateral. Agent shall be deemed to have
exercised reasonable care in the custody and preservation of a Guarantor's
Collateral in its possession if it takes such
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action for that purpose as such Guarantor requests in writing, but failure of
Agent to comply with such request shall not, of itself, be deemed a failure to
exercise reasonable care, and no failure of Agent to preserve or protect any
rights with respect to such Collateral against prior parties, or to do any act
with respect to the preservation of such Collateral not so requested by such
Guarantor, shall be deemed a failure to exercise reasonable care in the custody
or preservation of such Collateral.
5.6. Performance of Guarantor's Obligations. Agent shall
have the right, but shall not be obligated, to discharge any claims or Liens
against, and any Taxes at any time levied or placed upon any or all Collateral,
including without limitation those arising under statute or in favor of
landlords, taxing authorities, government, public and/or private warehousemen,
common and/or private carriers, processors, finishers, draymen, coopers,
dryers, mechanics, artisans, laborers, attorneys, courts, or others. Agent may
also pay for maintenance and preservation of Collateral. Agent may, but is not
obligated to, perform or fulfill any Guarantor's responsibilities under this
Agreement which such Guarantor has failed to perform or fulfill.
5.7. Agent's Rights. None of the following shall affect the
obligations of any Guarantor to Agent or any Lender under this Agreement or
Agent's right with respect to the remaining Collateral (any or all of which
actions may be taken by Agent at any time, whether before or after an Event of
Default, at its sole and absolute discretion and without notice to any
Guarantor):
(a) acceptance or retention by Agent or any Lender of
other property or interests in property as security for the
Obligations, or acceptance or retention of any Obligor(s), in addition
to Guarantors, with respect to any of the Obligations;
(b) release of its Lien on, or surrender or release of,
or the substitution or exchange of or for, all or any part of the
Collateral or any other property securing any of the Obligations
(including but not limited to any property of any Obligor other than
Guarantors), or any extension or renewal for one or more periods
(whether or not longer than the original period), or release,
compromise, alteration or exchange, of any obligations of any
guarantor or other Obligor with respect to any Collateral or any such
property;
(c) extension or renewal for one or more periods (whether
or not longer than the original period), or release, compromise,
alteration or exchange of any of the Obligations, or release or
compromise of any obligation of any Obligor with respect to any of the
Obligations; or
(d) failure by Agent or any Lender to resort to other
security or pursue any Person liable for any of the Obligations before
resorting to the Collateral.
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6. GENERAL.
6.1. Guarantor Waiver. Except as otherwise provided for
in this Agreement, each Guarantor waives (a) presentment, demand and protest
and notice of presentment, protest, default, non-payment, maturity, release,
compromise, settlement, one or more extensions or renewals of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent or any Lender on which any
Guarantor may in any way be liable and hereby ratifies and confirms whatever
Agent or any Lender may do in this regard; (b) all rights to notice and a
hearing prior to Agent's or any Lender's taking possession or control of, or
Agent's or any Lender's relevy, attachment or levy on or of, the Collateral or
any bond or security which might be required by any court prior to allowing
Agent or any Lender to exercise any of Agent's or any Lender's remedies; and
(c) the benefit of all valuation, appraisement and exemption laws. Each
Guarantor acknowledges that it has been advised by counsel of its choice with
respect to this Agreement and the transactions evidenced by this Agreement.
6.2. Power of Attorney. Each Guarantor appoints Agent, or
any Person whom Agent may from time to time designate, as such Guarantor's
attorney and agent-in-fact with power (which appointment and power, being
coupled with an interest, is irrevocable until all Obligations under this
Agreement and the Guaranty Documents are paid and performed in full and this
Agreement, the Guaranty Documents and the Loan Agreement are terminated),
without notice to such Guarantor, to:
(a) At such time or times hereafter as Agent or its
agent, in its sole and absolute discretion, may determine in such
Guarantor's or Agent's name (i) endorse such Guarantor's name on any
checks, notes, drafts or any other items of payment relating to and/or
proceeds of the Collateral which come into the possession of Agent or
under Agent's control and apply such payment or proceeds to the
Obligations; (ii) endorse such Guarantor's name on any chattel paper,
document, instrument, invoice, freight bill, bill of lading or similar
document or agreement in Agent's possession relating to such
Guarantor's Accounts Receivable, Inventory or any other Collateral;
(iii) use the information recorded on or contained in any data
processing equipment and computer hardware and software to which such
Guarantor has access relating to such Guarantor's Accounts Receivable,
Inventory and/or other Collateral; (iv) use such Guarantor's
stationery and sign the name of such Guarantor to verification of such
Guarantor's Accounts Receivable and notices thereof to such
Guarantor's Account Debtors; and (v) if not done by such Guarantor, do
all acts and things determined by Agent to be necessary, to obtain
repayment of the Obligations and to fulfill such Guarantor's other
obligations under this Agreement; and
(b) At such time or times after the occurrence and during
the continuance of a Default, as Agent or its agent, in its sole and
absolute discretion, may determine, in such Guarantor's or Agent's
name: (i) demand
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payment of such Guarantor's Accounts Receivable; (ii) enforce payment
of such Guarantor's Accounts Receivable, by legal proceedings or
otherwise; (iii) exercise all of such Guarantor's rights and remedies
with respect to the collection of such Guarantor's Accounts Receivable
and other Collateral; (iv) settle, adjust, compromise, extend or renew
such Guarantor's Accounts Receivable; (v) settle, adjust or compromise
any legal proceedings brought to collect such Guarantor's Accounts
Receivable; (vi) if permitted by applicable law, sell or assign such
Guarantor's Accounts Receivable and/or other Collateral upon such
terms for such amounts and at such time or times as Agent may deem
advisable; (vii) discharge and release such Guarantor's Accounts
Receivable and/or other Collateral; (viii) prepare, file and sign such
Guarantor's name on any proof of claim in bankruptcy or similar
document against any Account Debtor of such Guarantor; (ix) prepare,
file and sign such Guarantor's name on any notice of lien, assignment
or satisfaction of lien or similar document in connection with such
Guarantor's Accounts Receivable and/or other Collateral; and (x) do
all acts and things necessary, in Agent's sole and absolute
discretion, to obtain repayment of the Obligations and to fulfill such
Guarantor's other obligations under this Agreement.
6.3. Expenses; Attorneys' Fees. Each Guarantor agrees to
pay upon demand all Attorneys' Fees (as defined in Section 12.3 of the Loan
Agreement) and all other reasonable expenses incurred by Agent at any time,
including fees, costs and expenses incurred in connection with Collateral field
audits or other due diligence investigations by Agent and all Attorneys' Fees
(as defined in Section 12.3 of the Loan Agreement) and other Attorneys' Fees
incurred by any Lender as provided in the Loan Agreement. Each Guarantor also
agrees to pay, and save Agent and each Lender harmless from all liability for,
any stamp or other taxes which may be payable with respect to the execution or
delivery of this Agreement, or any Guaranty Document, or the issuance of any
other instruments or documents provided for herein or to be delivered hereunder
or in connection herewith. Each Guarantor's obligations described herein shall
survive the termination of this Agreement.
6.4. Agent Fees and Charges. To the extent not already
covered by Section 6.3, each Guarantor agrees to pay Bank of America Illinois
on demand the customary fees and charges of Agent for maintenance of accounts
with it or for providing other services to such Guarantor.
6.5. No Waiver by Agent or any Lender; Amendments. No
failure or delay on the part of Agent or any Lender in the exercise of any
power or right, and no course of dealing between any Guarantor and Agent or any
Lender shall operate as a waiver of such power or right with respect to such
Guarantor or any other Guarantor, nor shall any single or partial exercise of
any power or right with respect to any Guarantor preclude other or further
exercise thereof or the exercise of any other power or right with respect to
such Guarantor or any other Guarantor. The remedies provided for herein are
cumulative and not exclusive of any remedies which may be available to Agent or
any Lender at law or in equity. No notice to or
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demand on any Guarantor not required hereunder shall in any event entitle such
Guarantor or any other Guarantor to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the right of Agent or
any Lender to any other or further action in any circumstances without notice
or demand. No amendment, modification or waiver of, or consent with respect
to, any provision of this Agreement or any Guaranty Document shall in any event
be effective unless the same shall be in writing and signed and delivered by
Requisite Lenders. Any waiver of any provision of this Agreement, and any
consent to any departure by any Guarantor from the terms of any provision of
this Agreement, shall be effective only with respect to such Guarantor and in
the specific instance and for the specific purpose for which given.
6.6. Notices. Except as otherwise expressly provided
herein, any notice hereunder to any Guarantor, Agent or any Lender shall be in
writing (including facsimile communication) and shall be given to such
Guarantor, Agent or such Lender at its address or facsimile number set forth on
the signature pages hereof and/or Exhibit A hereto or at such other address or
facsimile number as such Guarantor, Agent or such Lender may, by written
notice, designate as its address or facsimile number for purposes of notices
hereunder. All such notices shall be deemed to be given when transmitted by
facsimile, delivered by courier, personally delivered or, in the case of notice
by mail, three (3) Banking Days following deposit in the United States mails,
properly addressed as herein provided, with proper postage prepaid.
6.7. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
6.8. Successors. This Agreement shall be binding upon
each Guarantor, Agent and each Lender and their respective successors and
permitted assigns, and shall inure to the benefit of each Guarantor, Agent and
each Lender and their respective successors and permitted assigns. No
Guarantor may assign its rights or duties hereunder without the consent of
Agent.
6.9. Construction. Each Guarantor acknowledges that this
Agreement shall not be binding upon Agent or any Lender or become effective
until and unless accepted by Agent or such Lender, as applicable, in writing.
If so accepted by Agent or any Lender, this Agreement and the Guaranty
Documents shall, unless otherwise expressly provided therein, be deemed to have
been negotiated and entered into in, and shall be governed and controlled by
the laws of, the State of Illinois as to interpretation, enforcement, validity,
construction, effect, choice of law, and in all other respects, including but
not limited to the legality of the interest rate and other charges, but
excluding perfection of security interests and liens which shall be governed
and controlled by the laws of the relevant jurisdiction.
6.10. Consent to Jurisdiction. To induce Agent and each
Lender to accept this Agreement, each Guarantor irrevocably agrees that,
subject to Agent's sole and absolute
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election, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT
OF OR FROM OR RELATED TO THIS AGREEMENT, THE GUARANTY DOCUMENTS OR THE
COLLATERAL SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF
CHICAGO, STATE OF ILLINOIS. EACH GUARANTOR HEREBY CONSENTS AND SUBMITS TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID CITY AND
STATE AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON SUCH GUARANTOR,
AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
DIRECTED TO SUCH GUARANTOR AT THE ADDRESS STATED ON THE SIGNATURE PAGES AND/OR
EXHIBIT A HERETO AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON
ACTUAL RECEIPT THEREOF.
6.11. Waiver of Jury Trial. EACH GUARANTOR, AGENT AND EACH
LENDER WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS (A) UNDER THIS AGREEMENT OR ANY GUARANTY DOCUMENT
OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (B) ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
6.12. Termination. This Agreement shall terminate upon the
last to occur of payment and performance in full of all Obligations and
termination of all other Guaranty Documents and the Loan Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed in
Chicago, Illinois, on the day and year specified at the beginning hereof.
BANK OF AMERICA ILLINOIS, as agent for
itself and each other Lender
By /s/ DAVID A. JOHANSON
----------------------------------------
Its Vice President
----------------------------------------
EACH OF THE SUBSIDIARIES SET
FORTH ON EXHIBIT A HERETO
By /s/ PHILIP J. ABLOVE
----------------------------------------
Vice President of each such Subsidiaries
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EXHIBIT A
Pioneer Americas, Inc.
4200 NationsBank Center
700 Louisiana Street
Houston, Texas 77002
Fax (713) 225-6475
Pioneer Chlor Alkali Company, Inc.
4200 NationsBank Center
700 Louisiana Street
Houston, Texas 77002
Fax (713) 225-6475
Imperial West Chemical Co.
2185 N. California Blvd.
Suite 500
Walnut Creek, California 94596
Fax (510) 280-4465
All-Pure Chemical Co.
2185 N. California Blvd.
Suite 500
Walnut Creek, California 94596
Fax (510) 280-4465
All-Pure Chemical Northwest, Inc.
2185 N. California Blvd.
Suite 500
Walnut Creek, California 94596
Fax (510) 280-4465
Black Mountain Power Company
4200 NationsBank Center
700 Louisiana Street
Houston, Texas 77002
Fax (713) 225-6475