LETTER OF CREDIT AGREEMENT

Exhibit 10.2

 

EXECUTION COPY

 

$40,000,000

 

LETTER OF CREDIT AGREEMENT

 

Dated as of October 21, 2002

 

among

 

FMC C ORPORATION

as Borrower

 

and

 

T HE I SSUERS P ARTY H ERETO

 

and

 

C ITICORP USA, I NC .

as Administrative Agent

 

W EIL , G OTSHAL & M ANGES LLP

767 F IFTH A VENUE

N EW Y ORK , N EW Y ORK 10153-0119

 

 

T ABLE OF C ONTENTS

 

 

i

T ABLE OF C ONTENTS

(C ONTINUED )

 

 

ii

T ABLE OF C ONTENTS

(C ONTINUED )

 

 

iii

T ABLE OF C ONTENTS

(C ONTINUED )

 

 

iv

T ABLE OF C ONTENTS

(C ONTINUED )

 

Schedules

 

 

v

L ETTER OF C REDIT A GREEMENT dated as of October 21, 2002, among FMC C ORPORATION , a Delaware corporation (the “ Borrower ”), the Issuers (as defined below), and C ITICORP USA, I NC . (“ CUSA ”), as agent for the Issuers and as agent for the Secured Parties (as defined below) under the Collateral Documents (as defined below) (in such capacity, the “ Administrative Agent ”).

 

W I T N E S S E T H :

 

W HEREAS , the Borrower has requested that the Issuers make available for the purposes specified in this Agreement a performance letter of credit facility; and

 

W HEREAS , the Issuers are willing to make available to the Borrower such performance letter of credit facility upon the terms and subject to the conditions set forth herein;

 

N OW , T HEREFORE , in consideration of the premises and the covenants and agreements contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

D EFINITIONS , I NTERPRETATION AND A CCOUNTING T ERMS

 

Section 1.1 Defined Terms

 

As used in this Agreement, the following terms have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“ Administrative Agent ” has the meaning specified in the preamble to this Agreement.

 

“ Affected Issuer ” has the meaning specified in Section 2.9 (Substitution of Issuers) .

 

“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling or that is controlled by or is under common control with such Person, each officer, director, general partner or joint-venturer of such Person, and each Person that is the beneficial owner of 5% or more of any class of Voting Stock of such Person. For the purposes of this definition, “ control ” means the possession of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“ Agreement ” means this Letter of Credit Agreement.

 

“ Alternate Currency ” means any lawful currency other than Dollars which is freely transferable into Dollars.

 

“ Applicable Unused Commitment Fee Rate ” means, (a) during the period commencing on the Closing Date and ending on March 31, 2003, a rate equal to 0.50% per annum and (b) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Leverage Ratio (determined on the last day of the most recent Fiscal Quarter, for which Financial Statements have been delivered pursuant to Section 6.1(a) or (b) (Financial Statements) ) set forth below:

 

 

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Changes in the Applicable Unused Commitment Fee Rate resulting from a change in the Leverage Ratio on the last day of any subsequent Fiscal Quarter shall become effective on the date of the delivery by the Borrower to the Administrative Agent of new Financial Statements pursuant to Section 6.1(a) or (b) (Financial Statements) , as applicable. Notwithstanding anything to the contrary set forth in this Agreement (including the then effective Leverage Ratio), if the Borrower shall fail to deliver such Financial Statements within any of the time periods specified in Section 6.1(a) or (b) (Financial Statements) , the Applicable Unused Commitment Fee Rate from and including the 46 ^th day after the end of such Fiscal Quarter or the 91 ^st day after the end of such Fiscal Year, as the case may be, to but not including the date the Borrower delivers to the Administrative Agent such Financial Statements shall conclusively equal the highest possible Applicable Unused Commitment Fee Rate provided for in this definition.

 

“ Approved Deposit Account ” has the meaning specified in the Bank Security Agreement.

 

“ Approved Securities Intermediary ” means a securities intermediary or commodity intermediary selected or approved by the Administrative Agent and with respect to which a Credit Party has delivered to the Administrative Agent an executed Control Account Agreement.

 

“ Asset Sale ” has the meaning specified in Section 8.4 (Sale of Assets).

 

“ Assignment and Acceptance ” means an assignment and acceptance entered into by an Issuer and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of Exhibit A (Form of Assignment and Acceptance).

 

“ Astaris ” means, Astaris LLC, a Delaware limited liability company.

 

“ Astaris Indemnification Agreement ” means the agreement, dated October 5, 2001, among the Borrower, Solutia Inc., Astaris Production LLC, Astaris Idaho LLC and Astaris, as such agreement may be modified, amended, restated or replaced; provided that the terms of any such modification, amendment, restatement or replacement after the Closing Date do not materially increase the Borrower’s or any Subsidiary of the Borrower’s obligations thereunder and such terms (including as to tenor) are no more onerous from a financial perspective, taken as a whole, to the Borrower and its Subsidiaries.

 

“ Astaris Power Payment ” means, collectively, payments by the Borrower made with respect to the “Idaho Power Termination Amount” as defined in and pursuant to the Astaris Indemnification Agreement in an aggregate amount after the Closing Date not to exceed $10,400,000.

 

“ Astaris Secured Payments ” means, the keepwell payments required to be made by the Borrower to Astaris pursuant to that certain Guaranty Agreement dated as of September 14, 2000, as in effect on the date hereof, by the Borrower in favor of Astaris and the lenders under a credit agreement in connection therewith.

 

“ Bank Security Agreement ” has the meaning specified in the Credit Agreement.

 

“ Bankruptcy Code ” means title 11, United States Code.

 

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“ Banks’ Collateral ” has the meaning specified in the Bank Security Agreement.

 

“ Base Rate ” means a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall be equal at all times to the highest of the following:

 

(a) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate;

 

(b) the sum (adjusted to the nearest 0.25% or, if there is no nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum , (ii) the rate per annum obtained by dividing (A) the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if any such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from three New York certificate of deposit dealers of recognized standing selected by Citibank, by (B) a percentage equal to 100% minus the average of the daily percentages specified during such three-week period by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for Citibank in respect of liabilities consisting of or including (among other liabilities) three-month U.S. dollar nonpersonal time deposits in the United States and (iii) the average during such three-week period of the maximum annual assessment rates estimated by Citibank for determining the then current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation (or any successor) for insuring Dollar deposits in the United States; and

 

(c) 0.5% per annum plus the Federal Funds Rate.

 

“ Base Rate Loan ” has the meaning assigned to such term in the Credit Agreement.

 

“ Blockage Notice ” has the meaning specified in each Deposit Account Control Agreement.

 

“ BofA ” means Bank of America, N.A., a national banking association.

 

“ Bonds ” means, collectively, (i) the Industrial Revenue Bonds issued by the Erie County Industrial Development Agency and maturing on February 1, 2003 and (ii) the Industrial Revenue Bonds issued by Lincoln County, Wyoming and maturing on November 1, 2003, in each case of the Borrower.

 

“ Borrower ” has the meaning specified in the preamble to this Agreement.

 

“ Borrower’s Accountants ” means KPMG LLP or other independent nationally-recognized public accountants acceptable to the Administrative Agent.

 

“ Business Day ” means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to notices, determinations, fundings and payments in connection with the Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar deposits are also carried on in the London interbank market.

 

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“ Capital Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases but excluding any amount representing capitalized interest) by the Borrower and its Subsidiaries during that period that, in conformity with GAAP, are or are required to be included in the property, plant or equipment reflected in the Consolidated balance sheet of the Borrower and its Subsidiaries; provided that (i) the 2003 earn-out payment in respect of TG Soda Ash pursuant to the TG Soda Ash Agreement and any true-up payments made in respect of such payment or in respect of other payments made pursuant to the TG Soda Ash Agreement prior to 2004, (ii) any Like Kind Exchange, (iii) any portion of any Reinvestment Deferred Amount actually reinvested pursuant to Section 2.8(e) of the Credit Agreement and (iv) any Permitted Acquisition (to the extent such Permitted Acquisition (A) is permitted by Section 8.7 and (B) would constitute a Capital Expenditure) shall not be considered a Capital Expenditure.

 

“ Capital Lease ” means, with respect to any Person, any lease of, or other arrangement conveying the right to use, property by such Person as lessee that would be accounted for as a capital lease on a balance sheet of such Person prepared in conformity with GAAP.

 

“ Capital Lease Obligations ” means, with respect to any Person, the capitalized amount of all Consolidated obligations of such Person or any of its Subsidiaries under Capital Leases.

 

“ Cash Collateral Account ” has the meaning specified in the Bank Security Agreement.

 

“ Cash Equivalents ” means (a) securities issued or fully guaranteed or insured by the United States government or any agency thereof, (b) certificates of deposit, eurodollar time deposits, overnight bank deposits and bankers’ acceptances of any Issuer or any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, any foreign bank, or its branches or agencies (fully protected against currency fluctuations) that, at the time of acquisition, are rated at least “ A-1 ” by S&P or “ P-1 ” by Moody’s, (c) commercial paper of an issuer rated at least “ A-1 ” by S&P or “ P-1 ” by Moody’s and (d) shares of any money market fund that (i) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (a) , (b) and (c) above, (ii) has net assets of not less than $500,000,000 and (iii) is rated at least “ A-1 ” by S&P or “ P-1 ” by Moody’s; provided , however , that the maturities of all obligations of the type specified in clauses (a) , (b) and (c) above shall not exceed 180 days.

 

“ Cash Management Obligation ” has the meaning specified in the Credit Agreement.

 

“ Change of Control ” means the occurrence of any of the following: (a) any Person or group of Persons (within the meaning of the Securities Exchange Act of 1934, as amended) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934, as amended) of 20% or more of the issued and outstanding Voting Stock of the Borrower, (b) during any period of twenty-four (24) consecutive calendar months, individuals who at the beginning of such period constituted the board of directors of the Borrower (together with any new directors whose election by the board of directors of the Borrower or whose nomination for election by the stockholders of the Borrower was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose elections or nomination for election was previously so approved) cease for any reason other than death or disability to constitute a majority of the directors then in office or (c) any “ Change of Control ” under and as defined in the Senior Secured Notes.

 

“ Citibank ” means Citibank, N.A., a national banking association.

 

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“ Closing Date ” means October 21, 2002.

 

“ Code ” means the Internal Revenue Code of 1986, as amended.

 

“ Collateral ” means all property and interests in property and proceeds thereof now owned or hereafter acquired by any Credit Party in or upon which a Lien is granted under any Collateral Document.

 

“ Collateral Documents ” means the Bank Security Agreement, the Shared Collateral Security Agreement, the Collateral Trust Agreement, the Restricted Cash Collateral Account Agreement, the Debt Reserve Account Agreement, each Foreign Pledge Agreement, the Sharing Agreement, the Mortgages, the Deposit Account Control Agreements and any other document executed and delivered by a Credit Party granting a Lien or purporting to grant a Lien on any of its property to secure payment of the Secured Obligations.

 

“ Collateral Trust Agreement ” has the meaning specified in the Credit Agreement.

 

“ Collateral Trustee ” means Citibank, N.A. in its capacity as collateral agent for the secured parties under the Collateral Trust Agreement.

 

“ Commitment Reduction ” has the meaning specified in Section 2.2(b) .

 

“ Compliance Certificate ” has the meaning specified in Section 6.1(c) (Financial Statements).

 

“ Consolidated ” means, with respect to any Person, the consolidation of accounts of such Person and its Subsidiaries in accordance with GAAP.

 

“ Consolidated Current Assets ” means, with respect to any Person at any date, the total Consolidated current assets (other than cash and Cash Equivalents) of such Person and its Subsidiaries at such date.

 

“ Consolidated Current Liabilities ” means, with respect to any Person at any date, all liabilities of such Person and its Subsidiaries at such date that should be classified as current liabilities on a Consolidated balance sheet of such Person and its Subsidiaries, but excluding, in the case of the Borrower, the sum of (a) the principal amount of any current portion of long-term Financial Covenant Debt and (b) (without duplication of clause (a) above) the then outstanding principal amount of the Loans.

 

“ Consolidated Indebtedness ” means at any date the total Indebtedness of the Borrower and its Subsidiaries on a Consolidated basis, determined as of such date.

 

“ Consolidated Interest Expense ” means, for the Borrower and its Subsidiaries on a Consolidated basis for any period, total interest expense for such period determined on a Consolidated basis in conformity with GAAP and including, in any event, the amortization of debt discount and premium, the portion of any payments due under any Capitalized Lease Obligation or other obligation allocable to interest expense and the implied interest component under any securitization programs of the Borrower.

 

“ Consolidated Net Income ” means, for any period, the sum of net income (or loss) for such period of the Borrower and its Subsidiaries determined on a Consolidated basis in accordance with

 

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GAAP, but excluding: (a) any income of any Person if such Person is not a Subsidiary of the Borrower, except that the Borrower’s equity in the net income of any such Person for such period shall be included in such net income up to the aggregate amount of cash actually distributed by such Person during such period to the Borrower or a Subsidiary of the Borrower as a dividend or other distribution; (b) the income (or loss) of any Person accrued prior to the date it became a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or such Person’s assets are acquired by the Borrower or any of its Subsidiaries; and (c) the income of any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of that income is prohibited by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Subsidiary.

 

“ Constituent Documents ” means, with respect to any Person, (a) the articles of incorporation, certificate of incorporation or certificate of formation (or the equivalent organizational documents) of such Person, (b) the by-laws, operating agreement (or the equivalent governing documents) of such Person and (c) any document setting forth the manner of election and duties of the directors or managing members of such Person (if any) and the designation, amount or relative rights, limitations and preferences of any class or series of such Person’s Stock.

 

“ Contaminant ” means any material, substance or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including any petroleum or petroleum-derived substance or waste, asbestos and polychlorinated biphenyls.

 

“ Contractual Obligation ” of any Person means any obligation, agreement, undertaking or similar provision of any Security issued by such Person or of any agreement, undertaking, contract, lease, indenture, mortgage, deed of trust or other instrument (excluding a Credit Document) to which such Person is a party or by which it or any of its property is bound or to which any of its property is subject.

 

“ Control Account ” means a securities account or commodity account that is the subject of an effective Control Account Agreement and that is maintained by any Credit Party with an Approved Securities Intermediary. “ Control Account ” includes all financial assets held in a securities account or a commodity account and all certificates and instruments, if any, representing or evidencing the financial assets contained therein.

 

“ Control Account Agreement ” has the meaning specified in the Bank Security Agreement.

 

“ Credit Agreement ” means that certain credit agreement dated as of October 21, 2002, among the Borrower, the lenders and issuers and other financial institutions party thereto and Citicorp USA, Inc., as administrative agent.

 

“ Credit Documents ” means, collectively, this Agreement, the U.S. Subsidiary Guaranty, the Parent Guaranty, each Letter of Credit Reimbursement Agreement, the Collateral Documents and each certificate, agreement or document executed by a Credit Party and delivered to the Administrative Agent or any Issuer in connection with or pursuant to any of the foregoing.

 

“ Credit Party ” means each of the Borrower, each Guarantor and each other Subsidiary of the Borrower that executes and delivers a Credit Document (other than any Foreign Subsidiary that executes a Foreign Pledge Agreement in respect of such Foreign Subsidiary’s Stock).

 

“ CUSA ” has the meaning specified in the preamble to this Agreement.

 

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“ Customary Permitted Liens ” means, with respect to any Person, any of the following Liens:

 

(a) Liens for taxes, assessments, governmental charges, claims or levies in each case that are not yet due or that are being contested in good faith by appropriate proceedings and with respect to which adequate reserves (in the good faith judgment of the management of the respective Person) have been established;

 

(b) Liens of landlords, liens in favor of utilities and liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other liens imposed by law or contract which were incurred in the ordinary course of business and (i) which secure amounts not yet due or (ii)(A) which do not in the aggregate materially detract from the value of such property (other than immaterial property) or materially impair the use thereof in the operation of the business of any Person or (B) which Liens (or the amounts secured thereby) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property subject to such Lien;

 

(c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other types of social security benefits or to secure the performance of trade contracts, bids, tenders, statutory and regulatory obligations, sales, contracts (other than for the repayment of borrowed money), appeal bonds, leases, government contracts or customs bonds and other similar obligations incurred in the ordinary course of business;

 

(d) encumbrances arising by reason of zoning restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other similar encumbrances on the use of real property not materially detracting from the value of such real property or not materially interfering with the ordinary conduct of the business conducted and proposed to be conducted at such real property;

 

(e) encumbrances, easements, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of the business of any Person;

 

(f) encumbrances arising under leases or subleases of real property that do not, in the aggregate, materially detract from the value of such real property or interfere with the ordinary conduct of the business conducted at such real property;

 

(g) financing statements with respect to a lessor’s rights in and to personal property leased to such Person in the ordinary course of such Person’s business;

 

(h) Liens arising from judgments, decrees or attachments and Liens securing appeal bonds arising from judgments, in each case in circumstances not constituting an Event of Default, provided that no cash or property is deposited or delivered to secure any such judgment or award;

 

(i) Liens on tangible property of a Person or a business that are existing at the time such Person or business is acquired pursuant to a Permitted Acquisition, provided that (i) such Liens were not placed on such property in contemplation of the consummation of the acquisition and do not extend to any property other than those of the Person or the business so acquired (and proceeds and products of any of the foregoing), and (ii) the aggregate Indebtedness secured by all Liens permitted by this clause (i) is permitted by Section 8.1 ;

 

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(j) Liens encumbering goods under production and arising from progress or partial payments by the Borrower or any Subsidiary relating to the underlying goods;

 

(k) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Borrower or any Subsidiary in the ordinary course of business;

 

(l) Liens under ERISA to the extent the creation thereof would not breach the representation made in Section 4.16 if made immediately after such creation;

 

(m) deposits or pledges in connection with the entry into or performance of agreements entered into to effect Permitted Acquisitions in an aggregate amount for all such deposits and pledges not to exceed $1,000,000 plus the aggregate of such deposits or pledges returned to Borrower or any Subsidiary or actually applied against the purchase price paid in respect of such Permitted Acquisition;

 

(n) Liens on any proceeds (including, without limitation, insurance, condemnation and eminent domain proceeds) or products of any property, a lien over which is a Lien permitted by Section 8.2 ; and

 

(o) any exception to title set forth in the title insurance policy or title commitment with respect to any property of the Borrower or any Subsidiary Guarantor with respect to which a Mortgage has been executed.

 

“ Debt Reserve Account ” means Account No. 104479 established by the Borrower with Citibank in which cash and Cash Equivalents may from time to time be on deposit or held therein, and the proceeds of which shall be used solely for (x) the redemption or repurchase of the Specified Debt, (y) after the Specified Debt has been repaid in full, the redemption or repurchase of Indebtedness permitted under Section 8.6(b)(vi) and (z) the purposes specified in Section 2.3(a) .

 

“ Debt Reserve Account Agreement ” has the meaning specified in the Credit Agreement.

 

“ Default ” means any event that, with the passing of time or the giving of notice or both, would become an Event of Default.

 

“ Deposit Account ” has the meaning specified in the Bank Security Agreement.

 

“ Deposit Account Bank ” has the meaning specified in the Bank Security Agreement.

 

“ Deposit Account Control Agreement ” has the meaning specified in the Bank Security Agreement.

 

“ Disclosure Documents ” means, collectively, (i) the confidential information memorandum and related materials prepared in connection with the syndication of the loans under the Credit Agreement and (ii) the Offering Memorandum dated October 9, 2002 prepared by the Borrower in connection with the issuance and sale of the Senior Secured Notes.

 

“ Disqualified Stock ” means with respect to any Person, any Stock that, by its terms (or by the terms of any Security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or

 

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otherwise, or is exchangeable for Indebtedness of such Person, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the Scheduled Termination Date.

 

“ Documentary Letter of Credit ” means any letter of credit that is drawable upon presentation of documents evidencing the sale or shipment of goods purchased by the Borrower or any of its Subsidiaries in the ordinary course of its business.

 

“ Dollar Equivalent ” of any amount means, at the time of determination thereof, (a) if such amount is expressed in Dollars, such amount, (b) if such amount is expressed in an Alternate Currency, the equivalent of such amount in Dollars determined by using the rate of exchange quoted by Citibank in New York, New York at 11:00 a.m. (New York time) on the date of determination to prime banks in New York for the spot purchase in the New York foreign exchange market of such amount of Dollars with such Alternate Currency and (c) if such amount is denominated in any other currency, the equivalent of such amount in Dollars as determined by the Administrative Agent using any method of determination it deems appropriate.

 

“ Dollars ” and the sign “ $ ” each mean the lawful money of the United States of America.

 

“ Domestic Subsidiary ” means any Subsidiary of the Borrower organized under the laws of any state of the United States of America or the District of Columbia.

 

“ EBITDA ” means, for any period, Consolidated Net Income for such period, plus , without duplication and to the extent deducted from revenues in determining Consolidated Net Income for such period, the sum of (a) the aggregate amount of Consolidated Interest Expense for such period, (b) the aggregate amount of income and franchise tax expense for such period, (c) all amounts attributable to depreciation and amortization for such period, (d) all non-recurring non-cash charges during such period (other than any non-cash item of expense requiring an accrual or reserve for future cash expense) and minus , without duplication and to the extent added to revenues in determining Consolidated Net Income for such period, all non-recurring non-cash gains during such period, all as determined on a consolidated basis with respect to the Borrower and its Subsidiaries in accordance with GAAP on the last day of such period.

 

“ Eligible Assignee ” means (A) an Issuer or (B) a commercial bank having total assets in excess of $5,000,000,000.

 

“ Environmental Laws ” means all applicable Requirements of Law now or hereafter in effect and as amended or supplemented from time to time, relating to pollution or the regulation and protection of human health, safety, the environment or natural resources, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq. ); the Hazardous Material Transportation Act, as amended (49 U.S.C. § 1801 et seq. ); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. § 136 et seq. ); the Resource Conservation and Recovery Act, as amended (42 U.S.C. § 6901 et seq. ); the Toxic Substance Control Act, as amended (42 U.S.C. § 7401 et seq. ); the Clean Air Act, as amended (42 U.S.C. § 740 et seq. ); the Federal Water Pollution Control Act, as amended (33 U.S.C. § 1251 et seq. ); the Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et seq. ); the Safe Drinking Water Act, as amended (42 U.S.C. § 300f et seq. ); and each of their state and local counterparts or equivalents and any transfer of ownership notification or approval statute, including the Industrial Site Recovery Act (N.J. Stat. Ann. § 13:1K-6 et seq. ).

 

“ Environmental Liabilities and Costs ” means, with respect to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses, damages, punitive damages, consequential

 

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damages, treble damages, costs and expenses (including all fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any other Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute and whether arising under any Environmental Law, Permit, order or agreement with any Governmental Authority or other Person, in each case relating to any environmental, health or safety condition or to any Release or threatened Release and resulting from the past, present or future operations of, or ownership of property by, such Person or any of its Subsidiaries.

 

“ Environmental Lien ” means any Lien in favor of any Governmental Authority for Environmental Liabilities and Costs.

 

“ Equity Issuance ” means (x) the issue or sale of any Stock of the Borrower or any Subsidiary of the Borrower by the Borrower or any Subsidiary of the Borrower to any Person other than the Borrower or any Subsidiary of the Borrower or (y) the receipt by the Borrower of any capital contributions.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

 

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control or treated as a single employer with the Borrower or any of its Subsidiaries within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

“ ERISA Event ” means (a) a reportable event described in Section 4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a Title IV Plan or a Multiemployer Plan, (b) the withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA, (c) the complete or partial withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from any Multiemployer Plan, (d) notice of reorganization or insolvency of a Multiemployer Plan, (e) the filing of a notice of intent to terminate a Title IV Plan or the treatment of a plan amendment as a termination under Section 4041 of ERISA, (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC, (g) the failure to make any required contribution to a Title IV Plan or Multiemployer Plan, (h) the imposition of a lien under Section 412 of the Code or Section 302 of ERISA on the Borrower or any of its Subsidiaries or any ERISA Affiliate or (i) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA.

 

“ Eurodollar Rate Loan ” has the meaning assigned to such term in the Credit Agreement.

 

“ Event of Default ” has the meaning specified in Section 9.1 (Events of Default) .

 

“ Excess Cash Flow ” means, for the Borrower and its Subsidiaries for any period, (a) the sum, without duplication, of (i) EBITDA for such period; provided that for purposes hereof, EBITDA shall not be calculated on a pro forma basis with respect to any Permitted Acquisitions made within the last twelve (12) months, (ii) extraordinary or non-recurring cash receipts of the Borrower and its Subsidiaries, if any, during such period and not included in EBITDA, (iii) reductions to non-cash working capital of the Borrower and its Subsidiaries for such period ( i.e ., the decrease, if any, in Consolidated Current Assets minus Consolidated Current Liabilities from the beginning to the end of such period), (iv) repayments to the Borrower of intercompany loans made by the Borrower to any Foreign Subsidiaries

 

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to the extent included in clause (iv) below, and (v) provisions taken for environmental remediation, pensions and post employment benefits related to discontinued businesses, in each case to the extent such provisions result in the reduction of EBITDA, minus (b) the sum, without duplication, of (i) the amount of any cash income and franchise taxes payable by the Borrower and its Subsidiaries with respect to such period, (ii) cash interest paid by the Borrower and its Subsidiaries during such period, (iii) Capital Expenditures committed or made in cash in accordance with Section 5.4 during such period (and not deducted from Excess Cash Flow in any prior year), (iv) principal repayments permitted by Section 8.6 and optional prepayments (to the extent such optional prepayments are made from Internally Generated Funds) of Indebtedness made by the Borrower and its Subsidiaries during such period (other than repayments or prepayments of intercompany loans); provided that, with respect to payments of Revolving Loans under the Credit Agreement, such payments shall only be included in this clause (iv) to the extent that such payment is accompanied by a simultaneous reduction of the commitments of the lenders thereunder to make such Revolving Loans), (v) Investments permitted under Section 8.3(i) or (j) , (vi) extraordinary or non-recurring expenses and losses to the extent paid in cash by the Borrower and its Subsidiaries, if any, during such period and not included in EBITDA, (vii) additions to non-cash working capital for such period ( i.e ., the increase, if any, in Consolidated Current Assets minus Consolidated Current Liabilities from the beginning to the end of such period), (viii) phosphorus restructuring cash payments not to exceed in the aggregate the amount of the outstanding reserves as of September 30, 2002, as set forth on Schedule IX hereto, (ix) the Astaris Secured Payments and the Astaris Power Payment, (x) the 2003 earn-out payment in respect of TG Soda Ash pursuant to the TG Soda Ash Agreement and any true-up payments made in respect of such payment or in respect of other payments made pursuant to the TG Soda Ash Agreement prior to 2004, (xi) expenditures (net of recoveries) in respect of environmental remediation (other than as set forth in clause (viii) above) not to exceed $125,000,000 in the aggregate for the five Fiscal Year period ending December 31, 2007, and (xii) payments for post employment benefits related to discontinued businesses and contributions to pensions; provided that, to the extent otherwise included herein, the Net Cash Proceeds of Asset Sales, Property Loss Events, issuances of Indebtedness described in clauses (a) and (b) of the definition of “ Indebtedness ” and Equity Issuances shall be excluded from the calculation of Excess Cash Flow.

 

“ Existing Agent ” means Citibank, N.A. in its capacity as administrative agent under the Existing Credit Agreements.

 

“ Existing Credit Agreements ” means, collectively, (i) the 364-Day Credit Agreement dated as of December 6, 2001, among the Borrower, the institutions party thereto as lenders and the Existing Agent and (ii) the Credit Agreement dated as of January 31, 2002, as amended, among the Borrower, the institutions party thereto as lenders and the Existing Agent.

 

“ Existing Indebtedness ” means Indebtedness of the Borrower and its Subsidiaries in existence on the Closing Date (other than Indebtedness in respect of Foreign Credit Lines) and disclosed on Schedule 8.1 (Existing Indebtedness) .

 

“ Existing Letters of Credit ” means, collectively, (i) the letter of credit for the account of the Borrower in favor of the New York State Department of Energy Conservation in the amount of $6,060,265 and (ii) the letter of credit for the account of the Borrower in favor of EPA Region 10 in the amount of $16,036,600, in each case issued by Citibank prior to the Closing Date.

 

“ Existing Public Debt ” means each of the indentures and other Indebtedness of the Borrower listed on Schedule VII .

 

“ Fair Market Value ” means (a) with respect to any asset or group of assets (other than a marketable Security) at any date, the value of the consideration obtainable in a sale of such asset at such

 

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date assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, as reasonably determined, in the case of any Asset Sale in excess of $5,000,000, by the Board of Directors of the Borrower or a Subsidiary of the Borrower, as the case may be, or, if such asset shall have been the subject of a relatively contemporaneous appraisal by an independent third party appraiser, the basic assumptions underlying which have not materially changed since its date, the value set forth in such appraisal and (b) with respect to any marketable Security at any date, the closing sale price of such Security on the Business Day next preceding such date, as appearing in any published list of any national securities exchange or the NASDAQ Stock Market or, if there is no such closing sale price of such Security, the final price for the purchase of such Security at face value quoted on such Business Day by a financial institution of recognized standing regularly dealing in securities of such type and selected by the Administrative Agent.

 

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

 

“ Federal Reserve Board ” means the Board of Governors of the United States Federal Reserve System, or any successor thereto.

 

“ Financial Covenant Debt ” of any Person means Indebtedness of the type specified in clauses (a) , (b) , (c) , (d) , (e) , (f) , (g) and (h) of the definition of “ Indebtedness ”; provided that in the case of clause (c) , such obligations shall be included in this definition of Financial Covenant Debt only to the extent such obligations are in respect of unreimbursed drawings under letters of credit or the guarantees referred to in clause (b) of the definition of “ Permitted Vendor Indebtedness ”; and provided further , that, in the case of a guaranty of any obligation to Astaris under clause (g) , such obligations shall be included in this definition of Financial Covenant Debt only to the extent that any such obligation is due and payable on the date on which any calculation of Financial Covenant Debt is made.

 

“ Financial Statements ” means the financial statements of the Borrower and its Subsidiaries delivered in accordance with Sections 4.4 (Financial Statements) and 6.1 (Financial Statements).

 

“ Fiscal Quarter ” means each of the three month periods ending on March 31, June 30, September 30 and December 31.

 

“ Fiscal Year ” means the twelve month period ending on December 31.

 

“ FMC Wyoming ” means FMC Wyoming Corporation, a Delaware corporation.

 

“ FMC Wyoming Agreement ” means that certain Joint Venture Agreement dated June 30, 1995, by and among the Borrower, FMC Wyoming, Nippon Sheet Glass Co., Ltd. and Sumitomo Corporation, as amended through the date hereof.

 

“ FMC’s Business ” means the business of developing, manufacturing and/or selling, and providing research and development, marketing and/or other services and support for, chemical-based and

 

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formulated products and related organic and inorganic materials and any business reasonably related, incidental, complementary or ancillary thereto.

 

“ Foreign Borrower ” means each Foreign Subsidiary owing obligations pursuant to (i) any Foreign Credit Line or (ii) Hedging Contracts and Cash Management Obligations that are otherwise guaranteed by the Borrower.

 

“ Foreign Credit Line ” means a credit facility or similar credit arrangement (including any arrangement in connection with Permitted Vendor Indebtedness) made available by a financial institution to Foreign Subsidiaries or their customers, as applicable.

 

“ Foreign Subsidiary ” means any Subsidiary of the Borrower that is not a Domestic Subsidiary.

 

“ Foreign Pledge Agreements ” means each of the foreign pledge and/or security agreements delivered pursuant to the Credit Agreement.

 

“ Fund ” means any Person (other than a natural Person) that is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“ GAAP ” means generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.

 

“ Governmental Authority ” means any nation, sovereign or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any central bank.

 

“ Guarantor ” means the Borrower (with respect to the Parent Guaranty) and each Subsidiary Guarantor.

 

“ Guaranty ” means each of the Parent Guaranty and the U.S. Subsidiary Guaranty.

 

“ Guaranty Obligation ” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person with respect to any Indebtedness of another Person, if the purpose or intent of such Person in incurring the Guaranty Obligation is to provide assurance to the obligee of such Indebtedness that such Indebtedness will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Indebtedness will be protected (in whole or in part) against loss in respect thereof, including (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of Indebtedness of another Person and (b) any liability of such Person for Indebtedness of another Person through any agreement (contingent or otherwise) (i) to purchase, repurchase or otherwise acquire such Indebtedness or any security therefor, or to provide funds for the payment or discharge of such Indebtedness (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (ii) to maintain the solvency or any balance sheet item, level of income or financial condition of another Person, (iii) to make take-or-pay or similar payments outside of the ordinary course of business, if required, regardless of non-performance by any other party or parties to an

 

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agreement, (iv) to purchase, sell or lease (as lessor or lessee) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss or (v) to supply funds to, or in any other manner invest in, such other Person (including to pay for property or services irrespective of whether such property is received or such services are rendered), if in the case of any agreement described under clause (b)(i) , (ii) , (iii) , (iv) or (v) above the primary purpose or intent thereof is to provide assurance that Indebtedness of another Person will be paid or discharged, that any agreement relating thereto will be complied with or that any holder of such Indebtedness will be protected (in whole or in part) against loss in respect thereof. The amount of any Guaranty Obligation shall be equal to the amount of the Indebtedness so guaranteed or otherwise supported.

 

“ Hedging Contracts ” means all Interest Rate Contracts, foreign exchange contracts, currency swap or option agreements, forward contracts, commodity swap, purchase or option agreements, other commodity price hedging arrangements, and all other similar agreements or arrangements designed to alter the risks of any Person arising from fluctuations in interest rates, currency values or commodity prices.

 

“ Indebtedness ” of any Person means without duplication (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments or that bear interest, (c) all reimbursement and all obligations with respect to letters of credit, bankers’ acceptances, surety bonds and performance bonds, whether or not matured, (d) all indebtedness for the deferred purchase price of property or services, other than trade payables incurred in the ordinary course of business that are not overdue, (e) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (f) all Capital Lease Obligations of such Person and the present value of future rental payments under all synthetic leases, (g) all Guaranty Obligations of such Person, (h) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any Stock or Stock Equivalents of such Person, valued, in the case of redeemable preferred stock, at the greater of its voluntary liquidation preference and its involuntary liquidation preference plus accrued and unpaid dividends, (i) all payments that such Person would have to make in the event of an early termination on the date Indebtedness of such Person is being determined in respect of Hedging Contracts of such Person and (j) all Indebtedness of the type referred to above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and general intangibles) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness.

 

“Indemnified Matter” has the meaning specified in Section 11.4 (Indemnities) .

 

“Indemnitee” has the meaning specified in Section 11.4 (Indemnities) .

 

“ Indenture ” means the Indenture, dated as of October 21, 2002, among the Borrower, the Subsidiary Guarantors and Wachovia, as trustee.

 

“ Indenture Trustee ” means Wachovia, as successor to Harris Trust and Savings Bank, an Illinois banking corporation, and any further successor, as trustee under (i) the Indenture dated as of April 1, 1992 and (ii) the Indenture dated as of July 1, 1996, in each case entered into with the Borrower.

 

“ Interest Coverage Ratio ” means, with respect to the Borrower and its Subsidiaries on a Consolidated basis for any period, the ratio of EBITDA for such period to Net Consolidated Interest Expense for such period.

 

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“ Interest Income ” means, for the Borrower and its Subsidiaries on a Consolidated basis for any period, total interest income for such period on a Consolidated basis in conformity with GAAP.

 

“ Interest Rate Contracts ” means all interest rate swap agreements, interest rate cap agreements, interest rate collar agreements and interest rate insurance.

 

“ Internally Generated Funds ” means all cash, income and other funds of the Borrower and its Subsidiaries other than proceeds of (i) insurance and condemnation policies, (ii) Asset Sales, (iii) sale and leaseback transactions, (iv) Equity Issuances and (v) issuances of Indebtedness of the type specified in clause (a) or (b) of the definition of “ Indebtedness ” by the Borrower or any of its Subsidiaries.

 

“ Investment ” means, with respect to any Person, (a) any purchase or other acquisition by such Person of (i) any Security issued by, (ii) a beneficial interest in any Security issued by, or (iii) any other equity ownership interest in, any other Person, (b) any purchase by such Person of all or a significant part of the assets of a business conducted by any other Person, or all or substantially all of the assets constituting the business of a division, branch or other unit operation of any other Person, (c) any loan, advance (other than deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts receivable and similar items made or incurred in the ordinary course of business as presently conducted) or capital contribution by such Person to any other Person, including all Indebtedness of any other Person to such Person arising from a sale of property by such Person other than in the ordinary course of its business, and (d) any Guaranty Obligation incurred by such Person in respect of Indebtedness of any other Person.

 

“ Inventory ” has the meaning specified in each Pledge and Security Agreement.

 

“ IRB Obligations ” means the variable rate industrial and pollution control revenue bonds of the Borrower.

 

“ IRS ” means the Internal Revenue Service of the United States or any successor thereto.

 

“ Issue ” means, with respect to any Letter of Credit, to issue, extend the expiry of, renew or increase the maximum face amount (including by deleting or reducing any scheduled decrease in such maximum face amount) of, such Letter of Credit. The terms “ Issued ” and “ Issuance ” shall have a corresponding meaning.

 

“ Issuer ” means each financial institution that (a) is listed on the signature pages hereof as an “ Issuer ” or (b) from time to time becomes a party hereto by execution of an Assignment and Acceptance with the approval of the Administrative Agent.

 

“ L/C Commitment ” means, with respect to each Issuer, the commitment of such Issuer to issue Letters of Credit and acquire interests in other L/C Outstandings in the aggregate face amount outstanding not to exceed the amount set forth opposite such Issuer’s name on Schedule I ( L/C Commitments and L/C Exposures) , as such amount may be increased or reduced from time to time to reflect each Assignment and Acceptance executed by such Issuer and as such amount may be reduced pursuant to this Agreement.

 

“L/C Exposure ” of any Issuer means the sum of (i) the outstanding face amount of all Letters of Credit Issued by such Issuer, minus (ii) the face amount of all participations in such Letters of Credit purchased by the other Issuers pursuant to Section 2.1(g) , plus (iii) the face amount of all participations in Letters of Credit Issued by other Issuers purchased by such Issuer pursuant to Section

 

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2.1(g) . The initial L/C Exposure of each Issuer is set forth opposite such Issuer’s name on Schedule I (L/C Commitments and L/C Exposures ). The initial aggregate amount of the L/C Exposures of all Issuers shall not exceed $40,000,000.

 

“ L/C Facility ” means the L/C Commitments and the provisions herein related to the Letters of Credit.

 

“ L/C Outstandings ” means, at any particular time, the Letter of Credit Obligations outstanding at such time.

 

“ Leases ” means, with respect to any Person, all of those leasehold estates in real property of such Person, as lessee, as such may be amended, supplemented or otherwise modified from time to time.

 

“ Letter of Credit ” means any Standby Letter of Credit issued or deemed issued pursuant to Section 2.1 (Letters of Credit) .

 

“ Letter of Credit Obligations ” means, at any time, the aggregate of all liabilities at such time of the Borrower to all Issuers with respect to Letters of Credit, whether or not any such liability is contingent, including, without duplication, the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of Credit Undrawn Amounts at such time.

 

“Letter of Credit Reimbursement Agreement” has the meaning specified in Section 2.1(e) (Letters of Credit) .

 

“Letter of Credit Request” has the meaning specified in Section 2.1(c) (Letters of Credit) .

 

“ Letter of Credit Undrawn Amounts ” means, at any time, the aggregate undrawn face amount of all Letters of Credit outstanding at such time.

 

“ Leverage Ratio ” means, with respect to the Borrower and its Subsidiaries on a Consolidated basis as of any date, the ratio of Net Debt as of such date to EBITDA for the last four Fiscal Quarters ending on or before such date.

 

“ Lien ” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any Indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement, the interest of a lessor under a Capital Lease and any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the UCC or comparable law of any jurisdiction naming the owner of the asset to which such Lien relates as debtor.

 

“ Like Kind Exchange ” means an Asset Sale of property for Fair Market Value to the extent that (a) the consideration received in exchange therefor consists of property of equivalent value that is useful in the conduct of the business of the Borrower and its Subsidiaries and (b) such Asset Sale qualifies for non-recognition treatment under Section 1031 of the Code; provided that no Like Kind Exchange shall be for all or substantially all of the assets of any Subsidiary of the Borrower.

 

“ Loans ” has the meaning assigned to such term in the Credit Agreement.

 

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“ Material Adverse Change ” means a material adverse change in any of (a) the condition (financial or otherwise), business, prospects, operations or properties of the Borrower and its Subsidiaries taken as a whole, (b) the legality, validity or enforceability of any Credit Document, (c) the perfection or priority of the Liens granted pursuant to the Collateral Documents, (d) the ability of the Borrower to repay the Obligations or of the other Credit Parties to perform their respective obligations under the Credit Documents or (e) the rights and remedies of the Administrative Agent or the Issuers under the Credit Documents.

 

“ Material Adverse Effect ” means an effect that results in or causes, or could reasonably be expected to result in or cause, a Material Adverse Change.

 

“ Material Real Property ” means (i) each Principal Property (as such term is defined in the indentures governing the Existing Public Debt) and (ii) each piece of real property of the Borrower or its Subsidiaries having a net book value of $2,500,000 or more.

 

“ Material Subsidiary ” means any Subsidiary of the Borrower from time to time in which the Borrower has an Investment, direct or indirect, of at least $10,000,000 (excluding Investments by such Subsidiary in other Subsidiaries in the form of Stock or Stock Equivalents), which Subsidiaries on the Closing Date are listed on Schedule VIII hereto.

 

“ Moody’s ” means Moody’s Investors Services, Inc.

 

“ Mortgages ” means the mortgages, deeds of trust or other real estate security documents made or required herein to be made by the Borrower or any other Credit Party.

 

“ Multiemployer Plan ” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or any ERISA Affiliate has any obligation or liability, contingent or otherwise.

 

“ Net Cash Proceeds ” means proceeds received by, (x) in the case of clauses (a) and (b) below, the Borrower or any of its Subsidiaries, and (y) in the case of clause (c) below, any Credit Party, in each case after the Closing Date in cash or Cash Equivalents from any (a) Asset Sale described in Section 8.4(h) , net of (i) the reasonable cash costs of sale, assignment or other disposition, (ii) taxes paid or reasonably estimated to be payable as a result thereof and (iii) any amount required to be paid or prepaid on Indebtedness (other than the Obligations) secured by the assets subject to such Asset Sale; provided , however , that evidence of each of (i) , (ii) and (iii) above is provided to the Administrative Agent in form and substance satisfactory to it, (b) Property Loss Event or (c) Equity Issuance (other than any such issuance of common Stock of the Borrower occurring in the ordinary course of business to any director, member of the management or employee of the Borrower or its Subsidiaries), net of brokers’ and advisors’ fees and other costs incurred in connection with such transaction; provided , however , that in the case of this clause (c) , evidence of such costs is provided to the Administrative Agent in form and substance satisfactory to it.

 

“ Net Consolidated Interest Expense ” means, for any period, Consolidated Interest Expense for such period less the sum of (x) amortization of debt discount and premium for such period and (y) Interest Income for such period.

 

“ Net Debt ” means, as of any date of determination, the aggregate amount of Financial Covenant Debt of the Borrower and its Subsidiaries as of such date less an amount equal to the sum of (i) aggregate amount held in the Debt Reserve Account and (ii) that portion of the aggregate amount held in the Restricted Cash Collateral Account designated to be applied solely to secure letters of credit

 

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supporting the IRB Obligations and amounts disbursed from the Restricted Cash Collateral Account actually used for such purpose, in each case as of such date.

 

“ Net Worth ” of any Person means, at any date, the stockholders’ equity that would be reflected on a Consolidated balance sheet of such Person and its Subsidiaries at such date prepared in conformity with GAAP (except, for the purposes hereof, such amount shall (i) exclude changes after June 30, 2002 in the cumulative foreign currency translation adjustment and any mark to market of a derivative or hedging instrument (or any other adjustment related thereto) required under FAS 133 and (ii) be adjusted on each date of determination, by an amount equal to the non-cash charges to other comprehensive income made with respect to Fiscal Year 2002 to the extent such non-cash charges relate to pension plans of the Borrower and its Subsidiaries, as if such non-cash charges were made as of such date).

 

“ Non-Guarantor Subsidiary ” means each Subsidiary of the Borrower listed on Schedule III hereto.

 

“ Non-U.S. Issuer ” means each Issuer (or the Administrative Agent) that is not a United States person as defined in Section 7701(a)(30) of the Code.

 

“ Obligations ” means the Letter of Credit Obligations and all other amounts, obligations, covenants and duties owing by the Borrower to the Administrative Agent, any Issuer, any Affiliate of any of them or any Indemnitee, of every type and description (whether by reason of an extension of credit, opening or amendment of a letter of credit or payment of any draft drawn thereunder, loan, guaranty, indemnification, foreign exchange or currency swap transaction, interest rate or commodity hedging transaction or otherwise), present or future, arising under this Agreement, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired and whether or not evidenced by any note, guaranty or other instrument or for the payment of money, including all letter of credit, cash management and other fees, interest, charges, expenses, attorneys’ fees and disbursements and other sums chargeable to the Borrower under this Agreement and all obligations of the Borrower hereunder to provide cash collateral for Letter of Credit Obligations.

 

“ Outstanding Notes ” means, collectively, (i) the 6 3/8% Senior Notes due September 1, 2003 issued under the indenture dated as of April 1, 1992 between the Borrower and Wachovia, as trustee, (ii) the 7.125% Fixed Rate Series B Medium Term Notes due November 25, 2002 and the 2007 Notes (both issued under the indenture dated as of July 1, 1996 between the Borrower and Wachovia, as trustee).

 

“ Parent Guaranty ” has the meaning specified in the Credit Agreement.

 

“ PBGC ” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“ Permit ” means any permit, approval, authorization, license, variance or permission required from a Governmental Authority under an applicable Requirement of Law.

 

“ Permitted Acquisition ” means the acquisition by the Borrower or any of its Subsidiaries of all or substantially all of the assets or Stock of any Person or of any operating division thereof (the “ Target ”), or the merger of the Target with or into the Borrower or any Subsidiary of the Borrower (with the Borrower, in the case of a merger with the Borrower, being the surviving corporation) subject to the satisfaction of each of the following conditions:

 

(a) the Administrative Agent shall receive at least 30 days’ prior written notice of such acquisition, which notice shall include, without limitation, a reasonably detailed description of such acquisition;

 

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(b) such acquisition shall only involve assets comprising a business, or those assets of a business, of the type described in the definition of “ FMC’s Business ”;

 

(c) such acquisition shall be consensual and shall have been approved by the Target’s board of directors;

 

(d) no additional Indebtedness or other liabilities shall be incurred, assumed or otherwise reflected on a Consolidated balance sheet of the Borrower and Target after giving effect to such acquisition, except (i) loans made under the Credit Agreement, (ii) ordinary course trade payables and accrued expenses and (iii) Indebtedness permitted under Section 8.1 (Indebtedness) ;

 

(e) the sum of all amounts payable in connection with such acquisition and all other Permitted Acquisitions (including all transaction costs and all Indebtedness, liabilities and Guaranty Obligations incurred or assumed in connection therewith or otherwise reflected in a Consolidated balance sheet of the Borrower and Target) shall not exceed $50,000,000, of which not more than $25,000,000 in the aggregate, may be used to purchase assets located outside the United States; provided that, solely with respect to acquisitions of assets located within the United States, the Borrower may exceed such limitation, to the extent the Leverage Ratio shall be less than 2.5 to 1.0 after giving effect to such acquisition on a pro forma basis;

 

(f) at or prior to the closing of such acquisition, the Borrower (or the Subsidiary making such acquisition) and the Target shall have executed such documents and taken such actions as may be required under Section 7.11 (Additional Collateral and Guaranties) ;

 

(g) concurrently with delivery of the notice referred to in clause (a) above, the Borrower shall have delivered to the Administrative Agent, in form and substance satisfactory to the Administrative Agent and the Requisite Issuers, such other financial information, financial analysis, documentation or other information relating to such acquisition as the Administrative Agent or any Issuer shall reasonably request;

 

(h) on or prior to the date of such acquisition, the Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent and the Requisite Issuers, copies of the acquisition agreement, related Contractual Obligations and instruments, and all opinions, certificates, lien search results and other documents reasonably requested by the Administrative Agent; and

 

(i) at the time of such acquisition and after giving effect thereto, (i) no Default or Event of Default shall have occurred and be continuing and (ii) all representations and warranties contained in Article IV (Representations and Warranties) and in the other Credit Documents shall be true and correct in all material respects.

 

“ Permitted Refinancing ” has the meaning specified in Section 8.1 .

 

“ Permitted Vendor Indebtedness ” means Indebtedness incurred by Subsidiaries of the Borrower organized in Brazil (and the guarantees by the Borrower thereof) consisting of (a) import financing Indebtedness incurred directly by any such Subsidiary for the purpose of conducting vendor

 

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financing programs in South America and (b) guarantees by any such Subsidiary or the Borrower of Indebtedness incurred by customers in order to finance the purchase of products of the Borrower and its Subsidiaries or the purchase of third-party agricultural products, in an aggregate principal amount not to exceed the amount set forth on Schedule VI .

 

“ Person ” means an individual, partnership, corporation (including a business trust), joint stock company, estate, trust, limited liability company, unincorporated association, joint venture or other entity, or a Governmental Authority.

 

“ Pledge and Security Agreement ” means each of the Bank Security Agreement and the Shared Collateral Security Agreement.

 

“ Pledged Notes ” has the meaning specified in each Pledge and Security Agreement.

 

“ Pledged Stock ” has the meaning specified in each Pledge and Security Agreement.

 

“ Pocatello Equipment ” means the equipment no longer used in the Borrower’s operations and located at the Borrower’s Pocatello, Idaho facility.

 

“ Property Loss Event ” means (a) any loss of or damage to property of the Borrower or any of its Subsidiaries that results in the receipt by such Person of proceeds of insurance in excess of $5,000,000 (individually or in the aggregate) or (b) any taking of property of the Borrower or any of its Subsidiaries that results in the receipt by such Person of a compensation payment in respect thereof in excess of $5,000,000 (individually or in the aggregate).

 

“ Purchasing Issuer ” has the meaning specified in Section 11.7 (Sharing of Payments, Etc.) .

 

“ Ratable Portion ” or “ ratably ” means, with respect to any Issuer, with respect to the L/C Facility, the percentage obtained by dividing (i) the L/C Commitment of such Issuer by (ii) the aggregate L/C Commitments of all Issuers (or, at any time after the Termination Date, the percentage obtained by dividing the aggregate outstanding amount of the L/C Outstandings owing to such Issuer by the aggregate outstanding amount of the L/C Outstandings owing to all Issuers).

 

“ Register ” has the meaning specified in Section 11.2(c) (Assignments and Participations) .

 

“ Reimbursement Date ” has the meaning specified in Section 2.1(h) (Letters of Credit) .

 

“ Reimbursement Obligations ” means all matured reimbursement or repayment obligations of the Borrower to any Issuer with respect to amounts drawn under Letters of Credit.

 

“ Reinvestment Deferred Amount ” has the meaning assigned to such term in the Credit Agreement.

 

“ Release ” means, with respect to any Person, any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration, in each case, of any Contaminant into the indoor or outdoor environment or into or out of any property owned by such Person, including the movement of Contaminants through or in the air, soil, surface water, ground water or property.

 

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“ Remedial Action ” means all actions required to (a) clean up, remove, treat or in any other way address any Contaminant in the indoor or outdoor environment, (b) prevent the Release or threat of Release or minimize the further Release so that a Contaminant does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform pre-remedial studies and investigations and post-remedial monitoring and care.

 

“ Requirement of Law ” means, with respect to any Person, the common law and all federal, state, local and foreign laws, rules and regulations, orders, judgments, decrees and other determinations of any Governmental Authority or arbitrator, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“ Requisite Issuers ” means, collectively, Issuers having at least one hundred percent (100%) of the aggregate outstanding amount of the L/C Commitments or, after the Termination Date, the aggregate L/C Outstandings; provided that if there shall be more than two (2) Issuers in number, “ Requisite Issuers ” shall mean Issuers having more than fifty percent (50%) of the aggregate outstanding amount of the L/C Commitments or, after the Termination Date, the aggregate L/C Outstandings.

 

“ Responsible Officer ” means, with respect to any Person, any of the principal executive officers, managing members or general partners of such Person but, in any event, with respect to financial matters, the chief financial officer or treasurer of such Person.

 

“ Restricted Cash Collateral Account ” means Account No. 104480 established by the Borrower with Citibank in which cash and Cash Equivalents may from time to time be on deposit or held therein, and the proceeds of which shall be used from time to time solely to refinance and/or replace or secure with cash collateral certain surety bonds, letters of credit or trust arrangements supporting self-insurance programs, environmental obligations, future business commitments and letters of credit in an amount not exceeding $44,030,000 supporting IRB Obligations, in each case issued by or for the benefit of the Borrower and its Subsidiaries.

 

“ Restricted Cash Collateral Account Agreement ” has the meaning specified in the Credit Agreement.

 

“ Restricted Payment ” means (a) any dividend, distribution or any other payment whether direct or indirect, on account of any Stock or Stock Equivalents of the Borrower or any of its Subsidiaries now or hereafter outstanding and (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Stock or Stock Equivalents of the Borrower or any of its Subsidiaries now or hereafter outstanding.

 

“ Revolving Loan ” has the meaning assigned to such term in the Credit Agreement.

 

“ S&P ” means Standard & Poor’s Rating Services.

 

“ Sarbanes-Oxley Act ” means the United States Sarbanes-Oxley Act of 2002.

 

“ Scheduled Termination Date ” means the third anniversary of the Closing Date.

 

“ SEC ” means the United States Securities and Exchange Commission.

 

“ Secured Obligations ” means, (i) in the case of the Borrower, (A) the Obligations, (B) the “ Obligations ” as defined in the Credit Agreement, (C) the “ Obligations, ” as defined in the Parent Guaranty and (D) the Astaris Secured Payments, and (ii) in the case of any other Credit Party, the

 

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obligations of such Credit Party under the Guaranties and the other Credit Documents to which it is a party.

 

“ Secured Parties ” means the Issuers, the Administrative Agent and any other holder of any Secured Obligation.

 

“ Securities Account ” has the meaning specified in the Bank Security Agreement.

 

“ Securitization Facility ” means the Receivables Purchase Agreement dated as of November 24, 1999 among FMC Funding Corporation, as seller, the Borrower, as initial servicer, CIESCO, L.P., as investor, Citibank, as a bank, and Citicorp North America, Inc., as agent, and any other transaction or series of related transactions that effect the securitization of accounts, payment intangibles or other cash flow streams of the Borrower.

 

“ Security ” means any Stock, Stock Equivalent, voting trust certificate, bond, debenture, note or other evidence of Indebtedness, whether secured, unsecured, convertible or subordinated, or any certificate of interest, share or participation in, any temporary or interim certificate for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing, but shall not include any evidence of the Obligations.

 

“ Selling Issuer ” has the meaning specified in Section 11.7 (Sharing of Payments, Etc.) .

 

“ Senior Secured Notes ” means, the senior notes of the Borrower due 2009 issued on the Closing Date pursuant to the Indenture and the senior notes of the Borrower due 2009 issued in exchange therefor pursuant to the registration rights agreement dated as of the Closing Date by and between the Borrower and the initial purchasers of the Senior Secured Notes.

 

“ Shared Collateral ” has the meaning specified in the Shared Collateral Security Agreement.

 

“ Shared Collateral Security Agreement ” has the meaning specified in the Credit Agreement.

 

“ Sharing Agreement ” has the meaning specified in the Credit Agreement.

 

“ Solvent ” means, with respect to any Person, that the value of the assets of such Person (both at fair value and present fair saleable value) is, on the date of determination, greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as of such date and that, as of such date, such Person is able to pay all liabilities of such Person as such liabilities mature and does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“ Specified Debt ” means the Borrower’s $99,500,000 Medium-Term Notes due November 2002 and $160,500,000 Debentures due September 2003.

 

“ Standby Letter of Credit ” means any letter of credit that is not a Documentary Letter of Credit.

 

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“ Stock ” means shares of capital stock (whether denominated as common stock or preferred stock), beneficial, partnership or membership interests, participations or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity, whether voting or non-voting.

 

“ Stock Equivalents ” means all securities convertible into or exchangeable for Stock and all warrants, options or other rights to purchase or subscribe for any Stock, whether or not presently convertible, exchangeable or exercisable.

 

“ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company or other business entity of which an aggregate of more than 50% of the outstanding Voting Stock is, at the time, directly or indirectly, owned or controlled by such Person or one or more Subsidiaries of such Person. Notwithstanding the foregoing, Astaris shall not be deemed a Subsidiary of the Borrower at any time solely by virtue of the Borrower’s control of the voting power to elect more than 50% of the managers of Astaris, so long as the Borrower and its Subsidiaries have not, directly or indirectly, made any Investment in Astaris other than pursuant to the Astaris Support Agreement (as defined in the Senior Secured Notes) or the Astaris Indemnification Agreement.

 

“ Subsidiary Guarantor ” means each Domestic Subsidiary party to or that becomes party to the U.S. Subsidiary Guaranty.

 

“ Substitute Institution ” has the meaning specified in Section 2.9 (Substitution of Issuers) .

 

“ Substitution Notice ” has the meaning specified in Section 2.9 (Substitution of Issuers) .

 

“ Swiss Note ” means the promissory note (or notes) in the aggregate principal amount of approximately $85,000,000 due March 26, 2003 and given by FMC Chemical International AG to the Borrower.

 

“ Tax Affiliate ” means, with respect to any Person, (a) any Subsidiary of such Person, and (b) any Affiliate of such Person with which such Person files or is eligible to file consolidated, combined or unitary tax returns.

 

“ Tax Return ” has the meaning specified in Section 4.8(a) (Taxes) .

 

“ Taxes ” has the meaning specified in Section 2.8(a) (Taxes) .

 

“ Termination Date ” shall mean the earliest of (a) the Scheduled Termination Date, (b) the date of termination in whole of the L/C Commitments pursuant to Section 2.2 (Reduction and Termination of the L/C Commitments) and (c) the date on which the Obligations become due and payable pursuant to Section 9.2 (Remedies) .

 

“ Term Loan ” has the meaning assigned to such term in the Credit Agreement.

 

“ TG Soda Ash ” means Tg Soda Ash, Inc., a corporation the Stock of which was acquired by FMC Wyoming and then merged into FMC Wyoming, effective December 31, 2000.

 

“ TG Soda Ash Agreement ” means that certain Stock Purchase Agreement dated June 30, 1999, as in effect on the date hereof, by and among Elf Atochem North America, Elf Atochem Wyoming Holdings, Inc., the Borrower and FMC Wyoming.

 

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“ Title IV Plan ” means a pension plan, other than a Multiemployer Plan, covered by Title IV of ERISA and to which the Borrower any of its Subsidiaries or any ERISA Affiliate has any obligation or liability (contingent or otherwise).

 

“ Total L/C Commitment ” means the aggregate commitments of all Issuers to Issue Letters of Credit in an aggregate face amount not to exceed $40,000,000, as reduced by Section 2.2 (Reduction and Termination of Commitments ) and Section 2.3 (Mandatory Cash Collateralization/Prepayments) .

 

“ 2007 Notes ” means the Borrower’s 7.320% Fixed Rate Medium Term Notes due February 2007.

 

“ UCC ” has the meaning specified in each Pledge and Security Agreement.

 

“ Unfunded Pension Liability ” means, with respect to the Borrower or any of its Subsidiaries at any time, the sum of (a) the amount, if any, by which the present value of all accrued benefits under each Title IV Plan (other than any Title IV Plan subject to Section 4063 of ERISA) exceeds the fair market value of all assets of such Title IV Plan allocable to such benefits in accordance with Title IV of ERISA, as determined as of the most recent valuation date for such Title IV Plan using the actuarial assumptions in effect under such Title IV Plan, (b) the aggregate amount of withdrawal liability that could be assessed under Section 4063 with respect to each Title IV Plan subject to such section, separately calculated for each such Title IV Plan as of its most recent valuation date and (c) for a period of five years following a transaction reasonably likely to be covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that could be avoided by the Borrower, any of its Subsidiaries or any ERISA Affiliate as a result of such transaction.

 

“ Unused Commitment Fee ” has the meaning specified in Section 2.5(a) (Fees) .

 

“ U.S. Subsidiary Guaranty ” has the meaning specified in the Credit Agreement.

 

“ Voting Stock ” means Stock of any Person having ordinary power to vote in the election of members of the board of directors, managers, trustees or other controlling Persons, of such Person (irrespective of whether, at the time, Stock of any other class or classes of such entity shall have or might have voting power by reason of the happening of any contingency).

 

“ Wachovia ” means Wachovia Bank, National Association.

 

“ Wholly-Owned Subsidiary ” means, in respect of any Person, any Subsidiary of such Person, all of the Stock of which (other than director’s qualifying shares, as may be required by law) is owned by such Person, either directly or indirectly through one or more Wholly-Owned Subsidiaries of such Person.

 

“ Withdrawal Liability ” means, with respect to the Borrower or any of its Subsidiaries at any time, the aggregate liability incurred (whether or not assessed) with respect to all Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in contributions required to be made pursuant to Section 4243 of ERISA.

 

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Section 1.2 Computation of Time Periods

 

In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ” and the words “ to ” and “ until ” each mean “ to but excluding ” and the word “ through ” means “ to and including. ”

 

Section 1.3 Accounting Terms and Principles

 

(a) Except as set forth below, all accounting terms not specifically defined herein shall be construed in conformity with GAAP and all accounting determinations required to be made pursuant hereto (including for purpose of measuring compliance with Article V (Financial Covenants) ) shall, unless expressly otherwise provided herein, be made in conformity with GAAP.

 

(b) If any change in the accounting principles used in the preparation of the most recent Financial Statements referred to in Section 6.1 (Financial Statements) is hereafter required or permitted by the rules, regulations, pronouncements and opinions of the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or any successors thereto) and such change is adopted by the Borrower with the agreement of the Borrower’s Accountants and results in a change in any of the calculations required by Article V (Financial Covenants) or VIII (Negative Covenants) had such accounting change not occurred, for purposes of the calculation of such covenants and the definitions related thereto, such calculation shall be made using GAAP as used by the Borrower in its December 31, 2001 financial statements.

 

(c) For purposes of calculating compliance with each of the financial covenants set forth in Article V in respect of a Permitted Acquisition or an Asset Sale permitted under Section 8.4(h) , such transaction shall be deemed to have occurred as of the first day of the four Fiscal Quarter period ending as of the most recent Fiscal Quarter end preceding the date of such transaction with respect to which the Administrative Agent has received the Financial Statements required to be delivered pursuant to Section 6.1(a) (each such transaction, a “ Pro Forma Transaction ”). In respect of each Pro Forma Transaction, (i) for purposes of any such calculation in respect of any such Asset Sale, (A) income statement items (whether positive or negative) attributable to the assets and/or property disposed of shall be excluded and (B) any Indebtedness which is retired in connection with such transaction shall be excluded and deemed to have been retired as of the first day of the applicable period, and (ii) for purposes of any such calculation in respect of any such Permitted Acquisition, (A) any Indebtedness incurred by the Borrower or any of its Subsidiaries on a Consolidated basis in connection with such transaction (x) shall be deemed to have been incurred as of the first day of the applicable period and (y) if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this clause (c) determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination, (B) income statement items (whether positive or negative) attributable to the Person or property acquired shall be included beginning as of the first day of the applicable period and (C) pro forma adjustments may be included to the extent that such adjustments meet the requirements of Regulation S-X under the Securities Act of 1933, as amended, and all other accounting rules and regulations of the SEC promulgated thereunder.

 

Section 1.4 Certain Terms

 

(a) The terms “ herein, ” “ hereof ” and “ hereunder ” and similar terms refer to this Agreement as a whole, and not to any particular Article, Section, subsection or clause in, this Agreement.

 

(b) Unless otherwise expressly indicated herein, (i) references in this Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause refer to the appropriate Exhibit or Schedule to,

 

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or Article, Section, clause or sub-clause in this Agreement and (ii) the words “ above ” and “ below ”, when following a reference to a clause or a sub-clause of any Credit Document, refer to a clause or sub-clause within, respectively, the same Section or clause.

 

(c) Each agreement defined in this Article I shall include all appendices, exhibits and schedules thereto. Unless the prior written consent of the Requisite Issuers is required hereunder for an amendment, restatement, supplement or other modification to any such agreement and such consent is not obtained, references in this Agreement to such agreement shall be to such agreement as so amended, restated, supplemented or modified.

 

(d) References in this Agreement to any statute shall be to such statute as amended or modified from time to time and to any successor legislation thereto, in each case as in effect at the time any such reference is operative.

 

(e) The term “ including ” when used in any Credit Document means “ including without limitation ” except when used in the computation of time periods.

 

(f) The terms “ Issuer ” and “ Administrative Agent ” include, without limitation, their respective successors.

 

(g) Upon the appointment of any successor Administrative Agent pursuant to Section 10.6 (Successor Administrative Agent) , references to CUSA in Section 10.3 (The Administrative Agent Individually) and to Citibank in the definitions of “ Base Rate ” and “ Dollar Equivalent ” shall be deemed to refer to the financial institution then acting as the Administrative Agent or one of its Affiliates if it so designates.

 

ARTICLE II

 

T HE L/C F ACILITY

 

Section 2.1 Letters of Credit

 

(a) On the terms and subject to the conditions contained in this Agreement, each Issuer severally agrees to Issue one or more Letters of Credit (and/or participate in any Letter of Credit Obligations as set forth in clause (g) below, as applicable) at the request of the Borrower and for the account of the Borrower from time to time on any Business Day during the period from the date hereof until the earlier of the Termination Date and 30 days prior to the Scheduled Termination Date in an aggregate face amount at any time outstanding for all such Letters of Credit not to exceed the Total L/C Commitment; provided , however , that at no time shall any Issuer be obligated to issue a Letter of Credit and/or participate in any Letter of Credit Obligations in excess of such Issuer’s L/C Commitment. Within the limits of the Total L/C Commitment, amounts of Letters of Credit repaid or prepaid may be reissued or replaced under this Section 2.1 and the Borrower may continue to request such reissuances or replacements of Letters of Credit through the earlier of the Termination Date and 30 days prior to the Scheduled Termination Date; provided , however , that the aggregate face amount of all Letter of Credit Obligations shall not exceed the Total L/C Commitment at any time; and provided further, however , that each Issuer’s Ratable Portion of the aggregate face amount of all Letter of Credit Obligations shall not exceed such Issuer’s L/C Exposure at any time. Notwithstanding anything to the contrary contained in this Section 2.1 , no Issuer shall be under any obligation to Issue any Letter of Credit upon the occurrence of any of the following:

 

(i) any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain such Issuer from Issuing such Letter of Credit or any Requirement of Law applicable to such Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuer shall prohibit, or request that such Issuer refrain from, the Issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuer with respect to such Letter of Credit any restriction or reserve or capital requirement (for which such Issuer is not otherwise compensated) not in effect on the date of this Agreement or result in any unreimbursed loss, cost or expense that was not applicable, in effect or known to such Issuer as of the date of this Agreement and that such Issuer in good faith deems material to it;

 

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(ii) such Issuer shall have received any written notice of the type described in clause(d) below;

 

(iii) after giving effect to the Issuance of such Letter of Credit, the aggregate L/C Outstandings would exceed the Total L/C Commitment in effect at such time;

 

(iv) after giving effect to the Issuance of such Letter of Credit, the sum of (i) the Letter of Credit Undrawn Amounts at such time and (ii) the Reimbursement Obligations at such time exceeds the Total L/C Commitment in effect at such time;

 

(v) any fees due in connection with any Issuance have not been paid;

 

(vi) such Letter of Credit is requested to be Issued in a form that is not acceptable to such Issuer; or

 

(vii) such Letter of Credit is requested to be denominated in any currency other than Dollars.

 

(b) In no event shall the expiration date of any Letter of Credit (x) be more than one year after the date of issuance thereof or (y) be less than thirty (30) days prior to the Scheduled Termination Date; provided , however , that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the expiry date referred to in clause (y) above).

 

(c) In connection with the Issuance of each Letter of Credit, the Borrower shall give the relevant Issuer and the Administrative Agent at least two Business Days’ prior written notice, in substantially the form of Exhibit B (Form of Letter of Credit Request) (or in such other written or electronic form as is acceptable to the Issuer), of the requested Issuance of such Letter of Credit (a “ Letter of Credit Request ”). Such notice shall be irrevocable and shall specify the Issuer of such Letter of Credit, the currency of issuance and face amount of the Letter of Credit requested, the date of Issuance of such requested Letter of Credit, the date on which such Letter of Credit is to expire (which date shall be a Business Day) and, in the case of an issuance, the Person for whose benefit the requested Letter of Credit is to be issued. Such notice, to be effective, must be received by the relevant Issuer and the Administrative Agent not later than 11:00 a.m. (New York time) on the second Business Day prior to the date of the requested Issuance of such Letter of Credit.

 

(d) Subject to the satisfaction of the conditions set forth in this Section 2.1 , the relevant Issuer shall, on the requested date, Issue a Letter of Credit on behalf of the Borrower in accordance with such Issuer’s usual and customary business practices. No Issuer shall Issue any Letter of Credit in the period commencing on the first Business Day after it receives written notice from any other

 

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Issuer or the Administrative Agent that one or more of the conditions precedent contained in Section 3.2 (Conditions Precedent to Each Letter of Credit) shall not on such date be satisfied or duly waived and ending when such conditions are satisfied or duly waived. The relevant Issuer shall not otherwise be required to determine that, or take notice whether, the conditions precedent set forth in Section 3.2 (Conditions Precedent to Each Letter of Credit) have been satisfied in connection with the Issuance of any Letter of Credit.

 

(e) If requested by the relevant Issuer, prior to the issuance of each Letter of Credit by such Issuer, and as a condition of such Issuance and of the participation of each other Issuer in the Letter of Credit Obligations arising with respect thereto in accordance with clause (g) below, the Borrower shall have delivered to such Issuer a letter of credit reimbursement agreement, in such form as the Issuer may employ in its ordinary course of business for its own account (a “ Letter of Credit Reimbursement Agreement ”), signed by the Borrower, and such other documents or items as may be required pursuant to the terms thereof. In the event of any conflict between the terms of any Letter of Credit Reimbursement Agreement and this Agreement, the terms of this Agreement shall govern.

 

(f) Each Issuer shall:

 

(i) give the Administrative Agent written notice (or telephonic notice confirmed promptly thereafter in writing, which writing may be a telecopy or electronic mail), of the Issuance of a Letter of Credit Issued by it, of all drawings under a Letter of Credit Issued by it and the payment (or the failure to pay when due) by the Borrower of any Reimbursement Obligation when due (which notice the Administrative Agent shall promptly transmit by telecopy, electronic mail or similar transmission to each other Issuer);

 

(ii) upon the request of any other Issuer, furnish to such other Issuer copies of any Letter of Credit Reimbursement Agreement to which such Issuer is a party and such other documentation as may reasonably be requested by such other Issuer; and

 

(iii) no later than 10 Business Days following the last day of each calendar month, provide to the Administrative Agent (and the Administrative Agent shall provide a copy to each other Issuer requesting the same) and the Borrower a schedule for the Letters of Credit issued by it, in form and substance reasonably satisfactory to the Administrative Agent, setting forth the aggregate Letter of Credit Obligations outstanding at the end of each month and any information requested by the Borrower or the Administrative Agent relating thereto.

 

(g) Immediately upon the issuance by an Issuer of a Letter of Credit in accordance with the terms and conditions of this Agreement, such Issuer shall be deemed to have sold and transferred to each other Issuer, and each such other Issuer shall be deemed irrevocably and unconditionally to have purchased and received from such Issuer, without recourse or warranty, an undivided interest and participation, to the extent of such other Issuer’s Ratable Portion of the L/C Commitments, in such Letter of Credit and the obligations of the Borrower with respect thereto (including all Letter of Credit Obligations with respect thereto) and any security therefor and guaranty pertaining thereto.

 

(h) The Borrower agrees to pay to the Issuer of any Letter of Credit the amount of all Reimbursement Obligations owing to such Issuer under any Letter of Credit issued for its account no later than the date that is the next succeeding Business Day after the Borrower receives written notice from such Issuer that payment has been made under such Letter of Credit (the “ Reimbursement Date ”), irrespective of any claim, set-off, defense or other right that the Borrower may have at any time against such Issuer or any other Person. In the event that any Issuer makes any payment under any Letter of Credit and the Borrower shall not have repaid such amount to such Issuer pursuant to this clause (h) or

 

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any such payment by the Borrower is rescinded or set aside for any reason, such Reimbursement Obligation shall be payable on demand with interest thereon computed (i) from the date on which such Reimbursement Obligation arose to the Reimbursement Date, at the rate of interest applicable during such period to Revolving Loans that are Base Rate Loans under the Credit Agreement and (ii) from the Reimbursement Date until the date of repayment in full, at the rate of interest applicable during such period to past due Revolving Loans that are Base Rate Loans under the Credit Agreement, and such Issuer shall promptly notify the Administrative Agent, which shall promptly notify each other Issuer of such failure, and each other Issuer shall promptly and unconditionally pay to the Administrative Agent for the account of such Issuer the amount of such other Issuer’s Ratable Portion of such payment in Dollars and in immediately available funds. If the Administrative Agent so notifies such other Issuer prior to 11:00 a.m. (New York time) on any Business Day, such other Issuer shall make available to the Administrative Agent for the account of such Issuer its Ratable Portion of the amount of such payment on such Business Day in immediately available funds. Upon such payment by such other Issuer, such other Issuer shall, except during the continuance of a Default or Event of Default under Section 9.1(f) (Events of Default) and notwithstanding whether or not the conditions precedent set forth in Section 3.2 (Conditions Precedent to Each Letter of Credit) shall have been satisfied (which conditions precedent the Issuers hereby irrevocably waive), be deemed to have issued a Letter of Credit to the Borrower in the principal amount of such payment. Whenever any Issuer receives from the Borrower a payment of a Reimbursement Obligation as to which the Administrative Agent has received for the account of such Issuer any payment from another Issuer pursuant to this clause (h) , such Issuer shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to such other Issuer, in immediately available funds, an amount equal to such other Issuer’s Ratable Portion of the amount of such payment adjusted, if necessary, to reflect the respective amounts such other Issuers have paid in respect of such Reimbursement Obligation.

 

(i) If and to the extent such other Issuer shall not have so made its Ratable Portion of the amount of the payment required by clause (h) above available to the Administrative Agent for the account of such Issuer, such other Issuer agrees to pay to the Administrative Agent for the account of such Issuer forthwith on demand any such unpaid amount together with interest thereon, for the first Business Day after payment was first due at the Federal Funds Rate and, thereafter until such amount is repaid to the Administrative Agent for the account of such Issuer, at the rate per annum applicable to Base Rate Loans under the Credit Agreement.

 

(j) The Borrower’s obligation to pay each Reimbursement Obligation and the obligations of the other Issuers to make payments to the Administrative Agent for the account of such Issuer with respect to Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under any and all circumstances whatsoever, including the occurrence of any Default or Event of Default, and irrespective of any of the following:

 

(i) any lack of validity or enforceability of any Letter of Credit or any Credit Document, or any term or provision therein;

 

(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of any Letter of Credit or any Credit Document;

 

(iii) the existence of any claim, set off, defense or other right that the Borrower, any other party guaranteeing, or otherwise obligated with, the Borrower, any Subsidiary or other Affiliate thereof or any other Person may at any time have against the beneficiary under any Letter of Credit, the Administrative Agent or any Issuer or any other

 

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Person, whether in connection with this Agreement, any other Credit Document or any other related or unrelated agreement or transaction;

 

(iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

 

(v) payment by the Issuer under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit; and

 

(vi) any other act or omission to act or delay of any kind of any Issuer, the Administrative Agent or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.1 , constitute a legal or equitable discharge of the Borrower’s obligations hereunder.

 

Any action taken or omitted to be taken by the relevant Issuer under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not put such Issuer under any resulting liability to the Borrower or any other Issuer. In determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof, the Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit, the Issuer may rely exclusively on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever and any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute willful misconduct or gross negligence of the Issuer.

 

(k) On the Closing Date (i) the Existing Letters of Credit, to the extent outstanding, shall be automatically and without further action by the parties thereto converted to Letters of Credit issued pursuant to this Section 2.1 for the account of the Borrower and subject to the provisions hereof, and for this purpose the fees specified in Section 2.5(b) (Fees) shall be payable (in substitution for any fees set forth in the applicable letter of credit reimbursement agreements or applications relating to such Existing Letters of Credit) as if such Existing Letters of Credit had been issued on the Closing Date, (ii) the issuer of such Existing Letters of Credit shall be deemed to be an “ Issuer ” hereunder solely for the purpose of maintaining such Existing Letters of Credit and (iii) all liabilities of the Borrower with respect to such Existing Letters of Credit shall constitute Obligations. No Existing Letter of Credit converted in accordance with this clause (k) shall be amended, extended or renewed without the prior written consent of the Administrative Agent.

 

Section 2.2 Reduction and Termination of the L/C Commitments

 

(a) The Borrower may, upon at least three Business Days’ prior notice to the Administrative Agent, terminate in whole or reduce in part ratably the unused portions of the respective L/C Commitments of the Issuers; provided , however , that each partial reduction shall be in an aggregate amount of not less than $5,000,000 or an integral multiple of $500,000 in excess thereof and the Borrower shall have provided the Administrative Agent with cash collateral in an amount equal to the

 

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amount by which the aggregate L/C Obligations exceed the Total L/C Commitment after giving effect to any such reduction.

 

(b) As of any Increase Date (as defined in the Credit Agreement), the Total L/C Commitment shall automatically be reduced (a “ Commitment Reduction ”) by the amount by which the commitments to make Revolving Loans under the Credit Agreement after giving effect to the Commitment Increase (as defined in the Credit Agreement), exceed $300,000,000 and, to the extent the aggregate amount of Letters of Credit issued prior to such Increase Date exceeds the reduced Total L/C Commitment, the Borrower shall provide cash collateral equal to the amount of such excess. Each Commitment Reduction shall be applied to reduce each Issuer’s L/C Commitment, and shall be applied to reduce each Issuer’s L/C Exposure on a pro rata basis.

 

Section 2.3 Mandatory Cash Collateralization/Prepayments

 

(a) Upon receipt by the Borrower or any of its Subsidiaries of Net Cash Proceeds arising (i) from an Asset Sale in excess of (A) $5,000,000, in the case of any single Asset Sale or (B) $15,000,000 in the aggregate for all Asset Sales in any calendar year (excluding any Asset Sale described in clause (i)(A) above in respect of which a mandatory prepayment has previously been made