Letter of Credit Agreement (2004)Full Document 

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$40,000,000

 

LETTER OF CREDIT AGREEMENT

 

Dated as of October 21, 2002

 

among

 

FMC CORPORATION

as Borrower

 

and

 

THE ISSUERS PARTY HERETO

 

and

 

CITICORP USA, INC.

as Administrative Agent

 

WEIL, GOTSHAL & MANGES LLP

767 FIFTH AVENUE

NEW YORK, NEW YORK 10153-0119

 


 

TABLE OF CONTENTS

 

Article I

  Definitions, Interpretation And Accounting Terms    1

Section 1.1

 

Defined Terms

   1

Section 1.2

 

Computation of Time Periods

   25

Section 1.3

 

Accounting Terms and Principles

   25

Section 1.4

 

Certain Terms

   25

Article II

  The L/C Facility    26

Section 2.1

 

Letters of Credit

   26

Section 2.2

 

Reduction and Termination of the L/C Commitments

   30

Section 2.3

 

Mandatory Cash Collateralization/Prepayments

   31

Section 2.4

 

Interest

   32

Section 2.5

 

Fees

   32

Section 2.6

 

Payments and Computations

   33

Section 2.7

 

Capital Adequacy

   35

Section 2.8

 

Taxes

   35

Section 2.9

 

Substitution of Issuers

   36

Article III

  Conditions To Letters Of Credit    37

Section 3.1

 

Conditions Precedent to Initial Letters of Credit

   37

Section 3.2

 

Conditions Precedent to Each Letter of Credit

   38

Section 3.3

 

Determinations of Initial Issuing Conditions

   38

Article IV

  Representations and Warranties    39

Section 4.1

 

Corporate Existence; Compliance with Law

   39

Section 4.2

 

Corporate Power; Authorization; Enforceable Obligations

   39

Section 4.3

 

Ownership of Borrower; Subsidiaries

   40

Section 4.4

 

Financial Statements

   40

Section 4.5

 

Material Adverse Change

   41

Section 4.6

 

Solvency

   41

Section 4.7

 

Litigation

   41

Section 4.8

 

Taxes

   41

Section 4.9

 

Full Disclosure

   42

Section 4.10

 

Margin Regulations

   42

Section 4.11

 

No Burdensome Restrictions; No Defaults

   42

Section 4.12

 

Investment Company Act; Public Utility Holding Company Act

   42

Section 4.13

 

Use of Proceeds

   43

 

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Section 4.14

 

Insurance

   43

Section 4.15

 

Labor Matters

   43

Section 4.16

 

ERISA

   43

Section 4.17

 

Environmental Matters Except as disclosed in the Borrower’s SEC filings filed on or prior to September 30, 2002:

   44

Section 4.18

 

Intellectual Property

   44

Section 4.19

 

Title; Real Property

   45

Section 4.20

 

Credit Agreement, Indenture and Senior Secured Notes

   45

Section 4.21

 

Deposit Accounts; Securities Accounts

   46

Article V

  Financial Covenants    46

Section 5.1

 

Maximum Leverage Ratio

   46

Section 5.2

 

Minimum Interest Coverage Ratio

   46

Section 5.3

 

Maintenance of Net Worth

   47

Section 5.4

 

Capital Expenditures

   47

Article VI

  Reporting Covenants    47

Section 6.1

 

Financial Statements

   47

Section 6.2

 

Default Notices

   49

Section 6.3

 

Litigation

   50

Section 6.4

 

Asset Sales

   50

Section 6.5

 

Notices under Credit Agreement, Indentures and Senior Secured Notes

   50

Section 6.6

 

SEC Filings; Press Releases

   50

Section 6.7

 

Labor Relations

   50

Section 6.8

 

Tax Returns

   50

Section 6.9

 

Insurance

   51

Section 6.10

 

ERISA Matters

   51

Section 6.11

 

Environmental Matters

   51

Section 6.12

 

Other Information

   52

Article VII

  Affirmative Covenants    52

Section 7.1

 

Preservation of Corporate Existence, Etc.

   52

Section 7.2

 

Compliance with Laws, Etc.

   52

Section 7.3

 

Conduct of Business

   53

Section 7.4

 

Payment of Taxes, Etc.

   53

Section 7.5

 

Maintenance of Insurance

   53

 

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Section 7.6

 

Access

   53

Section 7.7

 

Keeping of Books

   53

Section 7.8

 

Maintenance of Properties, Etc.

   54

Section 7.9

 

Application of Proceeds

   54

Section 7.10

 

Environmental

   54

Section 7.11

 

Additional Collateral and Guaranties

   54

Section 7.12

 

Non-Guarantor Subsidiaries

   55

Section 7.13

 

Real Property

   55

Section 7.14

 

Restricted Cash Collateral Account

   56

Section 7.15

 

Letters of Credit

   56

Article VIII

  Negative Covenants    56

Section 8.1

 

Indebtedness

   56

Section 8.2

 

Liens, Etc.

   57

Section 8.3

 

Investments

   58

Section 8.4

 

Sale of Assets

   59

Section 8.5

 

Restricted Payments

   60

Section 8.6

 

Prepayment and Cancellation of Indebtedness

   61

Section 8.7

 

Restriction on Fundamental Changes; Permitted Acquisitions

   61

Section 8.8

 

Change in Nature of Business

   61

Section 8.9

 

Transactions with Affiliates

   61

Section 8.10

 

Limitations on Restrictions on Subsidiary Distributions; No New Negative Pledge

   62

Section 8.11

 

Modification of Constituent Documents

   62

Section 8.12

 

Accounting Changes; Fiscal Year

   62

Section 8.13

 

Margin Regulations

   62

Section 8.14

 

Operating Leases; Sale/Leasebacks

   62

Section 8.15

 

No Speculative Transactions

   63

Section 8.16

 

Compliance with ERISA

   63

Section 8.17

 

Transfer of Principal Properties

   63

Section 8.18

 

Debt Reserve Collateral Account and Restricted Cash Collateral Account

   63

Article IX

  Events of Default    63

Section 9.1

 

Events of Default

   63

Section 9.2

 

Remedies

   65

 

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Section 9.3

 

Actions in Respect of Letters of Credit

   65

Section 9.4

 

Rescission

   66

Article X

  The Administrative Agent    66

Section 10.1

 

Authorization and Action

   66

Section 10.2

 

Administrative Agent’s Reliance, Etc.

   67

Section 10.3

 

The Administrative Agent Individually

   67

Section 10.4

 

Issuer Credit Decision

   67

Section 10.5

 

Indemnification

   68

Section 10.6

 

Successor Administrative Agent

   68

Section 10.7

 

Concerning the Collateral and the Collateral Documents

   68

Article XI

  Miscellaneous    69

Section 11.1

 

Amendments, Waivers, Etc.

   69

Section 11.2

 

Assignments and Participations

   71

Section 11.3

 

Costs and Expenses

   72

Section 11.4

 

Indemnities

   73

Section 11.5

 

Limitation of Liability

   75

Section 11.6

 

Right of Set-off

   75

Section 11.7

 

Sharing of Payments, Etc.

   75

Section 11.8

 

Notices, Etc.

   76

Section 11.9

 

No Waiver; Remedies

   76

Section 11.10

 

Binding Effect

   77

Section 11.11

 

Governing Law

   77

Section 11.12

 

Submission to Jurisdiction; Service of Process

   77

Section 11.13

 

Waiver of Jury Trial

   78

Section 11.14

 

Marshaling; Payments Set Aside

   78

Section 11.15

 

Section Titles

   78

Section 11.16

 

Execution in Counterparts

   78

Section 11.17

 

Entire Agreement

   78

Section 11.18

 

Confidentiality

   79

 

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TABLE OF CONTENTS

(CONTINUED)

 

Schedules

 

Schedule I

 

-

   L/C Commitments and L/C Exposures

Schedule II

 

-

   Addresses for Notices

Schedule III

 

-

   Non-Guarantor Subsidiaries

Schedule VI

 

-

   Permitted Vendor Indebtedness

Schedule VII

 

-

   Existing Public Debt

Schedule VIII

 

-

   Material Subsidiaries

Schedule IX

 

-

   Outstanding Reserves

Schedule 4.2

 

-

   Consents

Schedule 4.3

 

-

   Ownership of Subsidiaries

Schedule 4.7

 

-

   Litigation

Schedule 4.15

 

-

   Labor Matters

Schedule 4.16

 

-

   List of Plans

Schedule 4.17

 

-

   Environmental Matters

Schedule 4.21

 

-

   Deposit Accounts; Securities Accounts

Schedule 8.1

 

-

   Existing Indebtedness

Schedule 8.2

 

-

   Existing Liens

Schedule 8.3

 

-

   Existing Investments

Schedule 8.10

 

-

   Exceptions to Negative Pledge
EXHIBITS

Exhibit A

 

-

   Form of Assignment and Acceptance

Exhibit B

 

-

   Form of Letter of Credit Request

 

v


LETTER OF CREDIT AGREEMENT dated as of October 21, 2002, among FMC CORPORATION, a Delaware corporation (the “Borrower”), the Issuers (as defined below), and CITICORP USA, INC. (“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:

 

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

 

WHEREAS, 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;

 

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

 

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:

 

LEVERAGE RATIO


  

APPLICABLE UNUSED COMMITMENT

FEE RATE


Greater than or equal to 4 to 1

   0.75%

Less than 4 to 1

   0.50%

 


L/C AGREEMENT

FMC CORPORATION

 

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 46th day after the end of such Fiscal Quarter or the 91st 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.

 

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