exv10w1








EXHIBIT 10.1




SECOND AMENDMENT TO CREDIT AGREEMENT




     THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of September
17, 2010, is by and among AMERICAN PACIFIC CORPORATION, a Delaware corporation (the
“Borrower”), the Domestic Subsidiaries of the Borrower as may from time to time become a
party hereto (collectively, the “Guarantors”), the Lenders party hereto and WELLS FARGO
BANK, NATIONAL ASSOCIATION (successor by merger to Wachovia Bank, National Association), as
administrative agent (in such capacity, the “Administrative Agent”). Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit
Agreement (as defined below).



W I T N E S S E T H




     WHEREAS, the Borrower, the Guarantors, certain banks and financial institutions from time to
time party thereto (the “Lenders”) and the Administrative Agent are parties to that certain
Amended and Restated Credit Agreement dated as of February 6, 2007 (as amended by that certain
First Amendment dated as of July 7, 2009, and as further amended, modified, extended, restated,
replaced, or supplemented from time to time, the “Credit Agreement”);



     WHEREAS, the Credit Parties have requested the Required Lenders amend certain provisions of
the Credit Agreement; and



     WHEREAS, the Required Lenders are willing to make such amendments to the Credit Agreement, in
accordance with and subject to the terms and conditions set forth herein.



     NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good
and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:



ARTICLE I


AMENDMENTS TO CREDIT AGREEMENT




     1.1 Amendment to Definition of Applicable Percentage. The pricing grid contained in
the definition of “Applicable Percentage” set forth in Section 1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:



	 	 	 	 	 	 	 	 	 
	Applicable Percentage
	 	 	 	 	 	 	LIBOR	 	 
	Pricing	 	Total	 	Base Rate	 	Margin &	 	Commitment
	Level	 	Leverage Ratio	 	Margin	 	L/C Fee	 	Fee
	I

	 	3
 4.00 to 1.0
	 	1.75%
	 	2.75%
	 	0.50%
	II
	 	<4.00 to 1.0 but

3 3.25 to 1.0
	 	1.50%
	 	2.50%
	 	0.50%
	III
	 	<3.25 to 1.0 but

3 2.50 to 1.0
	 	1.25%
	 	2.25%
	 	0.50%
	IV
	 	< 2.50 to 1.0
	 	1.00%
	 	2.00%
	 	0.375%






     1.2 Amendment to Definition of Permitted Investments. The reference to “$5,000,000”
contained in the first proviso of clause (m) in the definition “Permitted Investments” set forth in
Section 1.1 of the Credit Agreement is hereby amended to read “$6,000,000.”



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     1.3 Amendments to Section 5.9(b). Section 5.9(b) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:




     (b) Interest Coverage Ratio. The Interest Coverage Ratio, as of the last day
of each fiscal quarter of the Borrower, shall be greater than or equal to the levels set
forth in the grid below for the periods corresponding thereto:



	 	 	 
	Period	 	Minimum Ratio
	September 30, 2010 through June 30, 2011

	 	2.00 to 1.00
	July 1, 2011 and thereafter

	 	2.50 to 1.00






     1.4 Amendments to Section 9.2(a). The contact information set forth in the Section
9.2(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows
and prior notification of such change in address is hereby ratified and confirmed:



	 	 	 

	The Borrower

	 	American Pacific Corporation
	and the other

	 	3883 Howard Hughes Parkway, Suite 700
	Credit Parties:

	 	Las Vegas, Nevada 89169
	 
	 	 
	 

	 	Attention: Dana Kelley, Chief Financial Officer
	 

	 	Telecopier: (702) 699-4163
	 

	 	Telephone: (702) 735-9456
	Borrower’s
	 	 
	Website address:

	 	www.apfc.com
	 
	 	 
	The Administrative
	 	 
	          Agent:

	 	Wells Fargo Bank, National Association,
	 

	 	as Administrative Agent
	 

	 	Charlotte Plaza
	 

	 	201 South College Street, CP8
	 

	 	Charlotte, North Carolina 28288-0680
	 

	 	Attention: Syndication Agency Services
	 

	 	Telecopier: (704) 383-0288
	 

	 	Telephone: (704) 374-2698
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	Wells Fargo Bank, National Association
	 

	 	Nevada Regional Commercial Banking Office
	 

	 	3800 Howard Hughes Parkway, 4th floor
	 

	 	Las Vegas, NV 89169
	 

	 	Attention: Virginia Christenson
	 

	 	                    Vice President/Sr. Relationship Manager
	 

	 	Telecopier: (702) 791-6365
	 

	 	Telephone: (702) 791-6324






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ARTICLE II


CONDITIONS TO EFFECTIVENESS




     2.1 Closing Conditions. This Amendment shall become effective as of the day and year
set forth above (the “Amendment Effective Date”) upon satisfaction (or waiver) of the
following conditions (in each case, in form and substance reasonably acceptable to the
Administrative Agent):




     (a) Executed Amendment. The Administrative Agent shall have received a copy of
this Amendment duly executed by each of the Credit Parties, the Required Lenders and the
Administrative Agent.




     (b) Default. After giving effect to this Amendment, no Default or Event of
Default shall exist.




     (c) Fees and Expenses.




     (i) The Administrative Agent shall have received from the Borrower, for the
account of each Lender, an amendment fee in an amount equal to 25 basis points on
the aggregate Revolving Commitments of such Lender (prior to giving effect to this
Amendment).




     (ii) The Administrative Agent shall have received from the Borrower such other
fees and expenses that are payable in connection with the consummation of the
transactions contemplated hereby and Moore & Van Allen PLLC shall have received from
the Borrower payment of all outstanding fees and expenses previously incurred and
all fees and expenses incurred in connection with this Amendment.




     (d) Legal Opinion. The Administrative Agent shall have received an
opinion or opinions of counsel for the Credit Parties, dated the Amendment Effective Date
and addressed to the Administrative Agent and the Lenders which shall be in form and
substance satisfactory to the Administrative Agent.




     (e) Miscellaneous. All other documents and legal matters in connection
with the transactions contemplated by this Amendment shall be reasonably satisfactory in
form and substance to the Administrative Agent and its counsel.



ARTICLE III


MISCELLANEOUS




     3.1 Amended Terms. On and after the Amendment Effective Date, all references to the
Credit Agreement in each of the Credit Documents shall hereafter mean the Credit Agreement as
amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit
Agreement is hereby ratified and confirmed and shall remain in full force and effect according to
its terms.



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     3.2 Representations and Warranties of Credit Parties. Each of the Credit Parties
represents and warrants as follows:




     (a) It has taken all necessary action to authorize the execution, delivery and
performance of this Amendment.




     (b) This Amendment has been duly executed and delivered by such Person and constitutes
such Person’s legal, valid and binding obligation, enforceable in accordance with its terms,
except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights
generally and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity).




     (c) No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental authority or third party is required in
connection with the execution, delivery or performance by such Person of this Amendment.




     (d) The representations and warranties set forth in Article III of the Credit Agreement
are true and correct as of the date hereof (except for those which expressly relate to an
earlier date).




     (e) After giving effect to this Amendment, no event has occurred and is continuing
which constitutes a Default or an Event of Default.




     (f) The Security Documents continue to create a valid security interest in, and Lien
upon, the Collateral in favor of the Administrative Agent, for the benefit of the Lenders,
which security interests and Liens are perfected in accordance with the terms of the
Security Documents and prior to all Liens other than Permitted Liens.




     (g) The Credit Party Obligations are not reduced or modified by this Amendment and are
not subject to any offsets, defenses or counterclaims.



     3.3 Reaffirmation of Credit Party Obligations. Each Credit Party hereby ratifies the
Credit Agreement and acknowledges and reaffirms (a) that it is bound by all terms of the Credit
Agreement applicable to it and (b) that it is responsible for the observance and full performance
of its respective Credit Party Obligations.



     3.4 Credit Document. This Amendment shall constitute a Credit Document under the
terms of the Credit Agreement.



     3.5 Expenses. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery of this Amendment,
including without limitation the reasonable fees and expenses of the Administrative Agent’s legal
counsel.



     3.6 Further Assurances. The Credit Parties agree to promptly take such action, upon
the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.



     3.7 Entirety. This Amendment and the other Credit Documents embody the entire
agreement among the parties hereto and supersede all prior agreements and understandings, oral or
written, if any, relating to the subject matter hereof.



     3.8 Counterparts; Telecopy. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original, but all of which
shall



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constitute one and the same instrument. Delivery of an executed counterpart to this Amendment
by telecopy or other electronic means shall be effective as an original and shall constitute a
representation that an original will be delivered.



     3.9 No Actions, Claims, Etc. As of the date hereof, each of the Credit Parties hereby
acknowledges and confirms that it has no knowledge of any actions, causes of action, claims,
demands, damages and liabilities of whatever kind or nature, in law or in equity, against the
Administrative Agent, the Lenders, or the Administrative Agent’s or the Lenders’ respective
officers, employees, representatives, agents, counsel or directors arising from any action by such
Persons, or failure of such Persons to act under this Credit Agreement on or prior to the date
hereof.



     3.10 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402
OF THE NEW YORK GENERAL OBLIGATIONS LAW).



     3.11 Successors and Assigns. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.



     3.12 General Release. In consideration of the Administrative Agent’s and the Required
Lender’s willingness to enter into this Amendment, each Credit Party hereby releases and forever
discharges the Administrative Agent, the Lenders and the Administrative Agent’s and the Lenders’
respective predecessors, successors, assigns, officers, managers, directors, employees, agents,
attorneys, representatives, and affiliates (hereinafter all of the above collectively referred to
as “Bank Group”), from any and all claims, counterclaims, demands, damages, debts, suits,
liabilities, actions and causes of action of any nature whatsoever, including, without limitation,
all claims, demands, and causes of action for contribution and indemnity, whether arising at law or
in equity, whether known or unknown, whether liability be direct or indirect, liquidated or
unliquidated, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore
asserted, which any Credit Party may have or claim to have against any of the Bank Group in any way
related to or connected with the Credit Documents and the transactions contemplated thereby.



     3.13 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The
jurisdiction, services of process and waiver of jury trial provisions set forth in Sections 9.14
and 9.17 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




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AMERICAN PACIFIC CORPORATION


SECOND AMENDMENT TO CREDIT AGREEMENT




     IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly executed on
the date first above written.



	 	 	 	 	 

	BORROWER:	 	AMERICAN PACIFIC CORPORATION,
	 	 	a Delaware corporation
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ DANA KELLEY
	 

	 	 	 	 
	 

	 	Name:
	 	Dana M. Kelley
	 

	 	Title:
	 	Vice President, Chief Financial Officer & Treasurer
	 
	 	 	 	 
	 
	 	 	 	 
	GUARANTORS:	 	AMERICAN PACIFIC CORPORATION,
	 	 	a Nevada corporation
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ DANA KELLEY
	 

	 	 	 	 
	 

	 	Name:

Title:
	 	Dana M. Kelley
Chief Financial Officer & Treasurer
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	AMPAC FINE CHEMICALS LLC,
	 	 	a California limited liability company
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ LINDA G. FERGUSON
	 

	 	 	 	 
	 

	 	Name:

Title:
	 	Linda G. Ferguson
Secretary
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	ENERGETIC ADDITIVES INC., LLC,
	 	 	a Nevada limited liability company
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ DANA KELLEY
	 

	 	 	 	 
	 

	 	Name:
	 	Dana M. Kelley
	 

	 	Title:
	 	Manager
	 
	 	 	 	 
	 	 	AMPAC-ISP CORP.,
	 	 	a Delaware corporation
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ DANA KELLEY
	 

	 	 	 	 
	 

	 	Name:
	 	Dana M. Kelley
	 

	 	Title:
	 	Chief Financial Officer & Treasurer






Page 6 of Exhibit 10.1









 








AMERICAN PACIFIC CORPORATION


SECOND AMENDMENT TO CREDIT AGREEMENT




	 	 	 	 	 

	 	 	AMERICAN AZIDE CORPORATION,
	 	 	a Nevada corporation
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ DANA KELLEY
	 

	 	 	 	 
	 

	 	Name:
	 	Dana M. Kelley
	 

	 	Title:
	 	Treasurer
	 
	 	 	 	 
	 	 	AMPAC FARMS, INC.,
	 	 	a Nevada corporation
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ DANA KELLEY
	 

	 	 	 	 
	 

	 	Name:
	 	Dana M. Kelley
	 

	 	Title:
	 	Treasurer
	 
	 	 	 	 
	 	 	AMPAC FINE CHEMICALS TEXAS, LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ LINDA G. FERGUSON
	 

	 	 	 	 
	 

	 	Name:
	 	Linda G. Ferguson
	 

	 	Title:
	 	Secretary






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AMERICAN PACIFIC CORPORATION


AMENDMENT TO CREDIT AGREEMENT




	 	 	 	 	 

	ADMINISTRATIVE AGENT
	 	 	 	 
	AND LENDERS:	 	WELLS BANK, NATIONAL ASSOCIATION (successor-by-merger to Wachovia Bank, National Association), as a Lender and as Administrative Agent
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ VIRGINIA S. CHRSTENSON
	 

	 	 	 	 
	 

	 	Name:
	 	Virginia S. Christenson
	 

	 	Title:
	 	Vice President/Senior Relationship Manager






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AMERICAN PACIFIC CORPORATION


AMENDMENT TO CREDIT AGREEMENT




	 	 	 	 	 

	 	 	BANK OF AMERICA, N.A.,
	 	 	as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ JOHN C. PLECQUE
	 

	 	 	 	 
	 

	 	Name:
	 	John C. Plecque
	 

	 	Title:
	 	Senior Vice President







Page 9 of Exhibit 10.1