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EX-10.1 - EX-10.1 - AMERICAN PACIFIC CORP | p18618exv10w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 31, 2011
AMERICAN PACIFIC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 1-8137 | 59-6490478 | ||
(State or other jurisdiction | (Commission File | (IRS Employer | ||
of incorporation) | Number) | Identification No.) |
3883 Howard Hughes Parkway, Suite 700, Las Vegas, Nevada | 89169 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (702) 735-2200
N/A
(Former name or former address, if changed since last report)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01 | Entry into a Material Definitive Agreement. |
On January 31, 2011, American Pacific Corporation (the Company), as borrower, entered into a
Credit Agreement with Wells Fargo Bank, National Association (Wells Fargo), as agent and as
lender, and certain domestic subsidiaries of the Company, as guarantors, which provides a secured
revolving credit facility in an aggregate principal amount of up to $20.0 million at any time
outstanding (the Revolving Credit Facility) with an initial maturity to be the earlier of (i)
January 31, 2015 and (ii) 90 days prior to the maturity date of the Companys 9% Senior Notes due
2015 (currently, the maturity date of the 9% Senior Notes is February 1, 2015). The Revolving
Credit Facility also provides for the issuance of letters of credit with a letter of credit
sublimit of $5 million, although the letters of credit previously outstanding under the Companys
prior revolving credit facility remain outstanding pursuant to separate bilateral arrangements with
Wells Fargo (in its capacity as an issuer of letters of credit). The maximum borrowing availability
under the Revolving Credit Facility is based upon a percentage of eligible account receivables and
eligible inventory of the Company. The Company may prepay and terminate the Revolving Credit
Facility at any time, without premium or penalty. The Revolving Credit Facility contains certain
mandatory prepayment provisions. The annual interest rates applicable to loans under the Revolving
Credit Facility will be, at the Companys option, either at a Base Rate or LIBOR Rate plus, in
each case, an applicable margin of 2.50 percentage points. The Company paid a closing fee in
connection with the Revolving Credit Facility. In addition, the Company will pay commitment fees,
other fees related to the issuance and maintenance of the letters of credit, and certain agency
fees. The Revolving Credit Facility currently has no outstanding borrowings.
The Revolving Credit Facility is guaranteed by the Companys current and future domestic
subsidiaries and is secured by substantially all of the assets of the Company and the Companys
current and future domestic subsidiaries, subject to certain exceptions as set forth in the
Revolving Credit Facility. The Revolving Credit Facility contains certain negative covenants
restricting and limiting the ability of the Company and its subsidiaries to, among other things:
| incur debt, incur contingent obligations and issue certain types of preferred stock, or prepay certain debt; | |
| create liens; | |
| pay dividends, distributions or make other specified restricted payments; | |
| make certain investments and acquisitions; | |
| enter into certain transactions with affiliates; | |
| enter into sale and leaseback transactions; and | |
| merge or consolidate with any other entity or sell, assign, transfer, lease, convey or otherwise dispose of assets. |
In each case, the covenants set forth above are subject to customary and negotiated exceptions and
exclusions. Certain covenants, including financial covenants, are also only triggered by borrowing
availability not exceeding a designated threshold amount and/or utilization of the Revolving Credit
Facility. The Revolving Credit Facility also limits the Companys capital expenditures in any
fiscal year to amounts set forth in the Revolving Credit Facility.
When the financial covenants are in effect, the Company will be required (i) to have a minimum
level of EBITDA for the twelve month period then ended, which minimum varies for each month end,
commencing with the month ended December 31, 2010 and continuing through the month ending September
30, 2011 and (ii) to maintain a minimum fixed charge coverage ratio on a rolling trailing 12 month
basis of at least 1.10:1.00 initially for the 12 month period ending October 31, 2011 and
thereafter for each 12 month period ending on the last day of the month continuing for the
remainder of the term of the Revolving
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Credit Facility. However, notwithstanding the financial covenants having come into effect, the
Companys obligation to continue to comply with such financial covenants shall terminate upon
satisfaction of certain requirements relating to borrowing availability and utilization set forth
in the Revolving Credit Facility.
The Revolving Credit Facility also contains usual and customary events of default (subject to
certain threshold amounts and grace periods), including cross-default provisions that include the
Companys 9% Senior Notes due 2015. If an event of default occurs and is continuing, the Company
may be required to repay the obligations under the Revolving Credit Facility prior to the Revolving
Credit Facilitys stated maturity and the related commitments may be terminated.
Wells Fargo and its affiliates have provided in the past and may provide in the future, investment
banking, commercial banking and lending and financial advisory services to the Company and its
affiliates.
The foregoing description of the Revolving Credit Facility does not purport to be complete and is
qualified in its entirety by the Revolving Credit Facility attached as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth above under Item 1.01 is hereby incorporated by reference into this Item
2.03.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. | Description | |
10.1
|
Credit Agreement, dated as of January 31, 2011, by and among American Pacific Corporation, Wells Fargo Bank, National Association, and certain domestic subsidiaries of American Pacific Corporation. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
American Pacific Corporation |
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Date: February 4, 2011 | By: | /s/ JOSEPH CARLEONE | ||
Joseph Carleone, PH.D. | ||||
President and Chief Executive Officer |
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EXHIBIT INDEX
Exhibit No. | Description | |
10.1
|
Credit Agreement, dated as of January 31, 2011, by and among American Pacific Corporation, Wells Fargo Bank, National Association, and certain domestic subsidiaries of American Pacific Corporation. |