exv10w2



 







Exhibit 10.2




ISDA ®




International Swaps and Derivatives Association, Inc.




SCHEDULE

to the

2002 Master Agreement




dated as of December 1, 2005




between




BANK OF AMERICA, N.A.,

a national banking association

organized and existing under the laws of the United States of America,




(“Party A”)




and




AMERICAN PACIFIC CORPORATION,

a corporation

organized and existing under the laws of Delaware,




(“Party B”)




PART 1: Termination Provisions





	(a)	 	“Specified Entity” means in relation to Party A for the purpose of Sections 5(a)(v),
5(a)(vi), 5(a)(vii) and 5(b)(v):
	 
	 	 	None;
	 
	 	 	“Specified Entity” means in relation to Party B for the purpose of Sections 5(a)(v),
5(a)(vi), 5(a)(vii) and 5(b)(v):
	 
	 	 	None.
	 
	(b)	 	“Specified Transaction” will have the meaning specified in Section 14.
	 
	(c)	 	The “Cross-Default” provisions of Section 5(a)(vi) (as amended in Part 5(d))

          will apply to Party A and

          will apply to Party B.
	 
	 	 	In connection therewith, “Specified Indebtedness” will not have the meaning specified in
Section 14, and such definition shall be replaced by the following: “any obligation in




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	 	 	respect of the payment of moneys (whether present or future, contingent or otherwise, as
principal or surety or otherwise), except that such term shall not include obligations in
respect of deposits received in the ordinary course of a party’s banking business.”






	 	 	“Threshold Amount” means with respect to Party A an amount equal to three percent (3%) of
the Shareholders’ Equity of Bank of America Corporation and with respect to Party B, one
million dollars ($1,000,000).
	 
	 	 	With respect to Party B, the occurrence and continuance (beyond any specified cure periods)
of an “Event of Default” as defined under the Credit Agreement shall be an Event of Default
under this Agreement.
	 
	 	 	“Credit Agreement” means the First Lien Credit Agreement dated as of November 30, 2005,
among Party A, Party B, the Guarantors and Lenders named therein, Wachovia Bank National
Association, as Administrative Agent and Wachovia Capital Markets, LLC, as Sole Lead
Arranger and Sole Book Runner (as amended, extended, supplemented or otherwise modified in
writing from time to time).
	 
	 	 	“Shareholders’ Equity” means with respect to an entity, at any time, the sum (as shown in
the most recent annual audited financial statements of such entity) of (i) its capital
stock (including preferred stock) outstanding, taken at par value, (ii) its capital surplus
and (iii) its retained earnings, minus (iv) treasury stock, each to be determined in
accordance with generally accepted accounting principles.
	 
	(d)	 	The “Credit Event Upon Merger” provisions of Section 5(b)(v)

          will apply to Party A

          will apply to Party B.
	 
	(e)	 	The “Automatic Early Termination” provision of Section 6(a)

          will not apply to Party A

          will not apply to Party B.
	 
	(f)	 	“Termination Currency” means United States Dollars.
	 
	(g)	 	Additional Termination Event will apply.
	 
	 	 	It shall be an Additional Termination Event hereunder, with respect to which Party B shall
be the sole Affected Party, if for any reason either Party A’s obligation to lend under the
Credit Agreement is terminated or Party A ceases to be a party to the Credit Agreement.





PART 2: Tax Representations





	(a)	 	Payer Tax Representations. For the purpose of Section 3(e) of this Agreement, Party A and
Party B will make the following representation:-
	 
	 	 	It is not required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than interest under
Section 9(h) of this Agreement) to be made by it to the other party under this Agreement.
In making this representation, it may rely on (i) the accuracy of any representations made
by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the




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	 	 	agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party
contained in Section 4(d) of this Agreement, except that it will not be a breach of this
representation where reliance is placed on clause (ii) above and the other party does not
deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its
legal or commercial position.






	(b)	 	Payee Tax Representations. For the purpose of Section 3(f) of this Agreement, Party A and
Party B will make the following representations specified below, if any:-






	 	(i)	 	The following representations will apply to Party A:
	 
	 	 	 	Party A is a national banking association created or organized under the laws of
the United States of America and the federal taxpayer identification number is
94-1687665.
	 
	 	(ii)	 	The following representations will apply to Party B:
	 
	 	 	 	Party B is a corporation created or organized under the laws of the State of
Delaware and the federal taxpayer identification number is 59-6490478.





PART 3: Agreement to Deliver Documents



For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the
following documents:





	(a)	 	Tax forms, documents or certificates to be delivered are: None
	 
	(b)	 	Other documents to be delivered are:-





	 	 	 	 	 	 	 
	Party	 	 	 	 	 	 
	required to	 	 	 	 	 	Covered by
	deliver	 	 	 	Date by which to	 	Section 3(d)
	document	 	Form/Document/Certificate	 	be delivered	 	Representation
	 
	Party B
	 	Financial Statements,	 	Delivery under	 	Yes
	 
	 	Records and Reports as	 	Credit Agreement	 	 
	 
	 	specified and detailed in	 	satisfies delivery	 	 
	 
	 	the Credit Agreement as	 	requirement	 	 
	 
	 	may be amended from time	 	hereunder.	 	 
	 
	 	to time	 	 	 	 
	 
	 	 	 	 	 	 
	Party B
	 	Credit Support Document(s)	 	Delivery not	 	No
	 
	 	 	 	required as	 	 
	 
	 	 	 	previously	 	 
	 
	 	 	 	delivered.	 	 
	 
	 	 	 	 	 	 
	Party B
	 	Such other documents as	 	Upon Request	 	No
	 
	 	Party A may reasonably	 	 	 	 
	 
	 	request from time to time	 	 	 	 






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	Party	 	 	 	 	 	 
	required to	 	 	 	 	 	Covered by
	deliver	 	 	 	Date by which to	 	Section 3(d)
	document	 	Form/Document/Certificate	 	be delivered	 	Representation
	 
	Party A and Party B
	 	Certified copies of all	 	Upon execution and	 	Yes
	 
	 	corporate authorizations	 	delivery of this	 	 
	 
	 	and any other documents	 	Agreement	 	 
	 
	 	with respect to the	 	 	 	 
	 
	 	execution, delivery and	 	 	 	 
	 
	 	performance of this	 	 	 	 
	 
	 	Agreement and any Credit	 	 	 	 
	 
	 	Support Document	 	 	 	 
	 
	 	 	 	 	 	 
	Party A and Party B
	 	Certificate of authority	 	Upon execution and	 	Yes
	 
	 	and specimen signatures	 	delivery of this	 	 
	 
	 	of individuals executing	 	Agreement and	 	 
	 
	 	this Agreement and any	 	thereafter upon	 	 
	 
	 	Credit Support Document	 	request of the	 	 
	 
	 	 	 	other party	 	 






PART 4: Miscellaneous





	(a)	 	Address for Notices. For the purpose of Section 12(a) of this Agreement:-




Address for notice or communications to Party A:



Bank of America, N.A.

Sears Tower

233 South Wacker Drive, Suite 2800

Chicago, IL 60606

Attention: Swap Operations

Telephone No.: 312-234-2732

Facsimile No.: 312-234-3603



with a copy to:



Bank of America, N.A.

655 Montgomery Street, CA5-522-17-05

San Francisco, California 94111

Attention: Capital Markets Documentation

Facsimile No.: 415-953-7997



Address for financial statements to Party A:



Bank of America, N.A.

530 Lytton Avenue, Suite 101

Palo Alto, California 94301

Attention: Portfolio Management Office, Mail Code: CA5-106-01-05

Facsimile No.: 650.853.4529




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Address for notice or communications to Party B:



American Pacific Corporation

3770 Howard Hughes Parkway, Suite 300

Las Vegas, Nevada 89109

Attn: Dana Kelley, Interim Chief Financial Officer

Telephone No.: 702-699-4163

Facsimile No.: 702-699-9465

Email Address: dkelley@apfc.com





	(b)	 	Process Agent. For the purpose of Section 13(c):
	 
	 	 	Party A appoints as its Process Agent: Not applicable.
	 
	 	 	Party B appoints as its Process Agent: Not applicable.
	 
	(c)	 	Offices. The provisions of Section 10(a) will apply to this Agreement.
	 
	(d)	 	Multibranch Party. For the purpose of Section 10(b) of this Agreement:-
	 
	 	 	Party A is a Multibranch Party and may enter into a Transaction through its Charlotte,
North Carolina, Chicago, Illinois, San Francisco, California, New York, New York, Boston,
Massachusetts or London, England Office or such other Office as may be agreed to by the
parties in connection with a Transaction.
	 
	 	 	Party B is not a Multibranch Party.
	 
	(e)	 	Calculation Agent. The Calculation Agent is Party A.
	 
	(f)	 	Credit Support Document. Details of any Credit Support Document:-
	 
	 	 	The following documents are “Credit Support Documents.” Party B agrees that the collateral
securing the obligations of Party B to Party A as described in the Credit Support Documents
shall also secure the obligations of Party B to Party A under this Agreement:






(i) Each Guaranty, as such term is defined in the Credit Agreement.




(ii) The First Lien Security Agreement dated as of November 30, 2005, among Party
B, the Guarantors, as such term is defined in the Credit Agreement, Wachovia Bank
National Association, in its capacity as Administrative Agent and Control Agent, in
favor of Party A;




(iii) The First Lien Pledge Agreement dated as of November 30, 2005, among Party B,
the Guarantors, as such term is defined in the Credit Agreement, Wachovia Bank
National Association, in its capacity as Administrative Agent and Control Agent, in
favor of Party A;




(iv) Each other guaranty of the obligations of Party B under this Agreement or
under the other Credit Support Documents; and




(vii) Each amendment, supplement, modification, renewal, replacement, consolidation,
substitution and extension to the foregoing.



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	(g)	 	Credit Support Provider.





	 	 	 	 	 
	 

	 	Credit Support Provider means in relation to Party A:
	 	Not applicable.
	 
	 	 	 	 
	 

	 	Credit Support Provider means in relation to Party B:
	 	each of the Guarantors, as such term
is defined in the Credit Agreement.







	(h)	 	Governing Law. This Agreement will be governed by and construed in accordance with the laws
of the State of New York (without reference to its conflict of laws provisions, except for
Sections 5-1401 and 5-1402 of the New York General Obligations Law).
	 
	(i)	 	Netting of Payments. Unless the parties otherwise so agree, “Multiple Transaction Payment
Netting” will apply for the purpose of Section 2(c) of this Agreement, starting as of the date
of this Agreement, within the following group of Transactions, and not otherwise:
	 
	 	 	FX Transactions (as defined in the FX Definitions) and Currency Option Transactions (as
defined in the FX Definitions) (but excluding payments with respect to option premiums and
cash settled options); and
	 
	 	 	Transactions (as defined in the 1993 Commodity Derivatives Definitions, published by the
International Swaps and Derivatives Association, Inc.) (but excluding payments with respect
to option premiums).
	 
	(j)	 	“Affiliate” will have the meaning specified in Section 14 of this Agreement.
	 
	(k)	 	Absence of Litigation. For the purpose of Section 3(c):- “Specified Entity” means in relation
to Party A, none;
	 
	 	 	“Specified Entity” means in relation to Party B, any Affiliate of Party B.
	 
	(l)	 	No Agency. The provisions of Section 3(g) will apply to this Agreement.
	 
	(m)	 	Additional Representation will apply. For the purpose of Section 3 of this Agreement, each of
the following will constitute an Additional Representation:-
	 
	 	 	Relationship Between Parties. Each party will be deemed to represent to the other party on
the date on which it enters into a Transaction that (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary for that
Transaction):-






	 	(A)	 	Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction, it being understood that information
and explanations related to the terms and conditions of a Transaction shall not be
considered investment advice or a recommendation to enter into that Transaction. No
communication (written or oral) received from the other party will be deemed to be an
assurance or guarantee as to the expected results of that Transaction.




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	 	(B)	 	Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of that Transaction. It is
also capable of assuming, and assumes, the risks of that Transaction.
	 
	 	(C)	 	Status of Parties. The other party is not acting as a fiduciary for or an
advisor to it in respect of that Transaction.
	 
	 	(D)	 	Eligible Contract Participant. It is an “eligible contract participant” as
defined in Section 1a(12) of the U.S. Commodity Exchange Act, 7 U.S.C. Section 1a(12).






	(n)	 	Recording of Conversations. Each party (i) consents to the recording of telephone
conversations between the trading, marketing and other relevant personnel of the parties in
connection with this Agreement or any potential Transaction and (ii) agrees, to the extent
permitted by applicable law, that recordings may be submitted in evidence in any Proceedings.





PART 5: Other Provisions





	(a)	 	Delivery of Confirmations. For each Transaction entered into hereunder, Party A shall
promptly send to Party B a Confirmation (which may be via facsimile transmission). Party B
agrees to respond to such Confirmation within two Local Business Days, either confirming
agreement thereto or requesting a correction of any error(s) contained therein. Failure by
Party A to send a Confirmation or of Party B to respond within such period shall not affect
the validity or enforceability of such Transaction. Absent manifest error, there shall be a
presumption that the terms contained in such Confirmation are the terms of the Transaction.
	 
	(b)	 	Furnishing Specified Information. Section 4(a)(iii) is hereby amended by inserting “promptly
upon the earlier of (1)” in lieu of the word “upon” at the beginning thereof and inserting “or
(2) such party learning that the form or document is required” before the word “any” on the
first line thereof.
	 
	(c)	 	Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO
TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY CREDIT SUPPORT DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
	 
	(d)	 	Cross Default. Section 5(a)(vi) of this Agreement is hereby amended adding the following
after the semicolon at the end thereof:






“provided, however, that notwithstanding the foregoing (but subject to any
provision to the contrary contained in any such agreement or instrument), an Event
of Default shall not occur under either (1) or (2) above if the default, event of
default or other similar condition or event referred to in (1) or the failure to
pay referred to in (2) is caused not (even in part) by the unavailability of funds
but is caused solely due to a technical or administrative error which has been
remedied within three Local Business Days after notice of such failure is given to
the party.”



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	(e)	 	2002 Master Agreement Protocol. Annexes 1 to 18 and Section 6 of the ISDA 2002 Master
Agreement Protocol as published by the International Swaps and Derivatives Association, Inc.
on July 15, 2003 are incorporated into and apply to this Agreement. References in those
definitions and provisions to any ISDA Master Agreement will be deemed to be references to
this Master Agreement.
	 
	(f)	 	Consent to Disclosure. Party B consents to Party A effecting such disclosure as Party A may
deem appropriate to enable Party A to transfer Party B’s records and information to process
and execute Party B’s instructions, or in pursuance of Party A’s or Party B’s commercial
interest, to any of its Affiliates. For the avoidance of doubt, Party B’s consent to
disclosure includes the right on the part of Party A to allow access to any intended recipient
of Party B’s information, to the records of Party A by any means.
	 
	(g)	 	USA PATRIOT Act Notice.1 Party A hereby notifies Party B that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies Party B, which information includes the name and address of Party B and other
information that will allow Party A to identify Party B in accordance with the Act.




IN WITNESS WHEREOF, the parties have executed this Schedule by their duly authorized officers as of
the date hereof.




	 	 	 	 	 	 	 	 	 	 	 
	BANK OF AMERICA, N.A.	 	 	 	AMERICAN PACIFIC CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Name:

	 	Susan K. Payunk
	 	 	 	Name:
	 	Dana M. Kelley	 	 
	Title:

	 	Senior Vice President
	 	 	 	Title:
	 	Treasurer and Acting Chief Financial Officer	 	 








 




			
	1This provision is included as a means of
compliance with the notice requirements contained in the regulations under the
USA PATRIOT Act.






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