As filed with the Securities and Exchange Commission on March 14, 2003
Registration No. 333-102078
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-----------------------
FMC CORPORATION
and the Guarantors identified in Table of Additional Registrants
(Exact Name of Registrant as Specified in Its Charter)
Delaware 2800 94-0479804
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification
Number)
1735 Market Street
Philadelphia, PA 19103
(215) 299-6000
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrants' Principal Executive Offices)
-----------------------
Andrea E. Utecht, Esq.
Vice President, General Counsel and Secretary
FMC Corporation
1735 Market Street
Philadelphia, PA 19103
(215) 299-6000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
-----------------------
Copies of all communications to:
Peter S. Sartorius, Esq.
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
215-963-5000
-----------------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_] _________________
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_] _________________
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TABLE OF ADDITIONAL REGISTRANTS
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EXACT NAME OF STATE OR OTHER JURISDICTION PRIMARY STANDARD I.R.S. EMPLOYER
REGISTRANT AS SPECIFIED OF INCORPORATION OR INDUSTRIAL IDENTIFICATION
IN ITS CHARTER* ORGANIZATION CLASSIFICATION CODE NUMBER
NUMBER
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Intermountain Research and Wyoming 2800 83-0203718
Development Corporation
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FMC Asia-Pacific, Inc. Delaware 2800 13-2500417
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FMC Overseas, Ltd Delaware 2800 36-3265436
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FMC Funding Corporation Delaware 2800 36-4325386
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FMC WFC I, Inc. Wyoming 2800 36-4182574
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FMC Defense Corp. Wyoming 2800 36-4182577
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FMC WFC II, Inc. Wyoming 2800 36-4182571
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FMC Properties, LLC Delaware 2800 N/A
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FMC Defense NL, L.L.C. Wyoming 2800 N/A
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FMC WFC I NL, L.L.C. Wyoming 2800 N/A
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FMC Idaho LLC Delaware 2800 N/A
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*The address of each of the additional registrants is 1735 Market Street,
Philadelphia, Pennsylvania 19103.
Subject to Completion, Dated March 13, 2003
PROSPECTUS
[LOGO OF FMC CORPORATION]
FMC CORPORATION
Offer to Exchange
$355,000,000 of our 10 1/4% Senior Secured Notes due 2009
The Exchange Offer:
We are offering to exchange our 10 1/4% Senior Secured Notes due 2009 offered
hereby for an equal principal amount of our 10 1/4% Senior Secured Notes due
2009 that were issued on October 21, 2002 in a transaction exempt from the
registration requirements of the Securities Act of 1933, as amended. In this
prospectus, we refer to the notes offered hereby as the "new notes" or the
"exchange notes" and to the notes issued on October 21, 2002 as the "old notes"
or the "outstanding notes". We use the term "notes" when describing both the new
notes and the outstanding notes. All outstanding notes that are validly tendered
in the exchange offer and not withdrawn will be exchanged. The exchange offer
expires at 5:00 p.m., New York City time, on April 16, 2003, unless we extend
it.
Tenders of outstanding notes may be withdrawn at any time before the expiration
of the exchange offer. We will pay the expenses of the exchange offer and will
not receive any proceeds from the exchange offer.
The Exchange Notes:
The terms of the new notes that we will issue in the exchange offer will be
substantially identical to the outstanding notes, except that transfer
restrictions and registration rights relating to the outstanding notes will not
apply to the new notes.
The notes bear interest at the rate of 10 1/4% per year. Interest on the notes
is payable on May 1 and November 1 of each year, beginning on May 1, 2003. The
notes mature on November 1, 2009.
We may redeem all or part of the notes on or prior to November 1, 2006 at a
price of 100% of their principal amount, plus a make-whole premium, plus accrued
and unpaid interest, if any. At any time after November 1, 2006, we may redeem
all or part of the notes at fixed redemption prices plus accrued and unpaid
interest, if any. At any time on or prior to November 1, 2005, we may redeem up
to 35% of the notes from the proceeds of one or more public equity offerings by
us at a fixed redemption price plus accrued and unpaid interest, if any. See
"Description of the Notes--Optional Redemption."
The notes are our senior obligations and are guaranteed on a senior basis by our
wholly-owned domestic subsidiaries that guarantee indebtedness under our $500.0
million credit agreement (the "Credit Agreement") and our $40.0 million
supplemental letter of credit facility (the "Letter of Credit Facility", and
together with the Credit Agreement, the "Credit Facilities"). See "Description
of the Notes -- The Subsidiary Guarantees."
The notes are secured on a second-priority basis by collateral consisting of
certain of our domestic manufacturing or processing facilities and our shares of
FMC Wyoming Corporation, our non wholly-owned principal domestic subsidiary. The
second-priority liens are shared on an equal and ratable basis with the holders
of notes issued under our existing indentures and with (i) the lenders and other
credit providers under the Credit Facilities, (ii) certain other lenders and
credit providers to us and our foreign subsidiaries and (iii) lenders to Astaris
LLC, our 50%-owned joint venture, as beneficiaries of our obligations under the
support agreement relating to Astaris. The second-priority liens are subject and
subordinate to the first-priority lien granted to such lenders and other credit
providers in an amount not exceeding 10% of our consolidated net tangible assets
from time to time. In addition, those lenders and credit providers are secured
by liens on substantially all of our other domestic assets that are not included
in the collateral securing the notes and on 65% of the stock of certain of our
foreign subsidiaries. See "Description of Other Indebtedness" and "Description
of the Notes--Security."
No public market currently exists for the outstanding notes. We do not intend to
list the new notes on any securities exchange, and no active public market is
anticipated.
-----------------
Investing in the new notes involves risks. See "Risk Factors" beginning on
page 6.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these notes or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
March , 2003
TABLE OF CONTENTS
AVAILABLE INFORMATION........................................................ii
DOCUMENTS INCORPORATED BY REFERENCE..........................................ii
SUMMARY ......................................................................1
RISK FACTORS..................................................................6
FORWARD-LOOKING INFORMATION..................................................15
THE EXCHANGE OFFER...........................................................16
USE OF PROCEEDS..............................................................25
CAPITALIZATION...............................................................26
SELECTED CONSOLIDATED FINANCIAL DATA.........................................27
DESCRIPTION OF OTHER INDEBTEDNESS............................................29
DESCRIPTION OF THE NOTES.....................................................33
EXCHANGE OFFER; REGISTRATION RIGHTS..........................................72
BOOK-ENTRY; DELIVERY AND FORM................................................74
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES...............................76
PLAN OF DISTRIBUTION.........................................................81
LEGAL MATTERS................................................................81
EXPERTS......................................................................81
You should rely only upon the information contained in, or incorporated into,
this prospectus. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should assume the information appearing in this document is accurate only as of
the date on the front cover of this prospectus. Our business, financial
condition, results of operations and prospects may have changed since that date.
This prospectus incorporates important business and financial information about
us that is not included in or delivered with this document. See "Documents
Incorporated by Reference" on page ii of this prospectus.
i
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, file reports and other information with the Securities and Exchange
Commission (the "SEC"). Reports, proxy statements and other information filed by
us may be inspected and copied at the public reference facilities maintained by
the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference facilities. Copies of such material can be
obtained by mail from the Public Reference Section of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, reports,
proxy statements and other information concerning us may be inspected and copied
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005, the Chicago Stock Exchange, 440 South LaSalle Street, Chicago,
Illinois 60605 and the Pacific Stock Exchange, Inc., 301 Pine Street, San
Francisco, California 94104 or 618 South Spring Street, Los Angeles, California
90014. The SEC also maintains a web site (http://www.sec.gov) that contains
reports, proxy statements and other information regarding registrants that file
electronically with the SEC.
DOCUMENTS INCORPORATED BY REFERENCE
FMC's Annual Report on Form 10-K for the year ended December 31, 2002,
filed with the SEC on March 11, 2003, is incorporated herein by reference.
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus and prior to the
termination of the offering of the notes shall be deemed to be incorporated in
this prospectus by reference and to be a part hereof from the date of filing of
such documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
We will provide without charge to each person to whom a copy of this
prospectus is delivered upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference (other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
into the documentation that this prospectus incorporates). TO OBTAIN TIMELY
DELIVERY OF THIS INFORMATION, WE MUST RECEIVE YOUR REQUEST NO LATER THAN FIVE
(5) BUSINESS DAYS BEFORE THE EXPIRATION DATE OF THE EXCHANGE OFFER.
Written or oral requests for such copies should be directed to FMC
Corporation, 1735 Market Street, Philadelphia, Pennsylvania 19103, Attention:
Andrea E. Utecht, Esq. (telephone (215) 299-6000).
ii
SUMMARY
This summary highlights certain information contained elsewhere in this
prospectus and may not contain all of the information important to you. We urge
you to carefully read this prospectus, including the "Risk Factors" section and
the consolidated financial statements and condensed consolidated financial
statements and related notes thereto, as well as the documents incorporated by
reference into this prospectus. In this prospectus, unless the context requires
otherwise, "FMC," the "company," "we," "us" and "our" each refers to FMC
Corporation and its subsidiaries.
The Exchange Offer
The following summary is provided for your convenience. This summary is
not intended to be complete. You should read the full text and more specific
details contained elsewhere in this prospectus. For a more detailed description
of the notes, see "Description of Notes."
The Exchange Offer..... We are offering to exchange up to $355,000,000
aggregate principal amount of our 10 1/4% Senior
Secured Notes due 2009 which have been registered
under the Securities Act of 1933, as amended (the
"Securities Act"). The outstanding notes were
originally issued and sold by us on October 21, 2002,
in reliance on an exemption from registration under
the Securities Act.
We believe you may offer the new notes for resale,
resell and otherwise transfer them without compliance
with the registration or prospectus delivery
provisions of the Securities Act if:
. you are acquiring the new notes in
the ordinary course of your
business;
. you are not participating, do not
intend to participate, and have no
arrangement or understanding with
any person to participate, in the
distribution of the new notes
issued to you; and
. you are not an affiliate, as
defined in Rule 405 of the
Securities Act, of FMC.
The exchange offer, once commenced, will remain open
for at least 20 business days and will expire at 5:00
p.m., New York City time, on April 16, 2003, unless
we decide to extend the expiration date.
Conditions to the
Exchange Offer....... We may end or amend the exchange offer if:
. any legal proceeding, government
action or other adverse development
materially impairs our ability to
complete the exchange offer;
. any SEC rule, regulation or
interpretation materially impairs
the exchange offer; or
. we have not obtained all necessary
governmental approvals with respect
to the exchange offer.
Please refer to the section in the prospectus
entitled "The Exchange Offer--Conditions to the
Exchange Offer" for a complete discussion of these
conditions. We may waive any or all of these
conditions. At this time, there are no adverse
proceedings, actions or developments pending or, to
our knowledge, threatened against us that would
prohibit us from completing the exchange offer.
Furthermore, no federal or state governmental
approvals are necessary to
1
complete the exchange offer.
Withdrawal Rights ........... You may withdraw the tender of your outstanding
notes at any time before 5:00 p.m., New York
City time, on April 16, 2003.
Procedures for Tendering
Outstanding Notes ......... To participate in the exchange offer, you must:
. complete, sign and date the
accompanying letter of transmittal,
or a facsimile copy of the letter
of transmittal; or
. tender outstanding notes following
the procedures for book-entry
transfer described on pages 17 to
20.
You must mail or otherwise deliver the
documentation and your outstanding notes to
Wachovia Bank, National Association, as exchange
agent, at one of the addresses listed on the
letter of transmittal.
Special Procedures
for Beneficial
Owners ................. If you hold outstanding notes registered in the
name of a broker, dealer, commercial bank, trust
company or other nominee, you should contact
that person promptly if you wish to tender
outstanding notes. Please refer to the section
in this prospectus entitled, "The Exchange
Offer--Procedures for Tendering Outstanding
Notes" for more specific instructions on
tendering your outstanding notes.
Guaranteed Delivery
Procedures ................ If you wish to tender your outstanding notes and
you cannot get required documents to the
exchange agent on time, or you cannot complete
the procedure for book-entry transfer on time,
you may tender your outstanding notes according
to the guaranteed delivery procedures described
in this prospectus under the heading "The
Exchange Offer--Procedures for Tendering
Outstanding Notes."
Use of Proceeds ............. We will not receive any proceeds from the
exchange offer.
Federal Income Tax
Consequences .............. The exchange of notes will not be a taxable
event to you for United States federal income
tax purposes. Please refer to the section in
this prospectus entitled "Certain United States
Federal Tax Considerations" for a more complete
discussion of the tax consequences of tendering
your outstanding notes in the exchange offer.
Exchange Agent .............. Wachovia Bank, National Association is serving
as exchange agent in the exchange offer. Please
refer to the section of this prospectus entitled
"The Exchange Offer--Exchange Agent" for more
information on the exchange agent.
2
The New Notes
The new notes will evidence the same debt as the outstanding notes. The
same indenture will govern both the outstanding notes and the new notes. Please
refer to the section in this prospectus entitled "Description of Notes" for a
more complete description of the terms of the notes.
Issuer................. FMC Corporation.
Notes Offered.......... $355,000,000 aggregate principal amount of 10 1/4%
Senior Secured Notes due 2009.
Maturity............... November 1, 2009.
Interest Payments...... May 1 and November 1, beginning on May 1, 2003.
Optional Redemption.... On or prior to November 1, 2006, we may redeem all or
part of the notes at any time at a redemption price
equal to 100% of the principal amount, plus a
make-whole amount, plus accrued and unpaid interest,
if any, to the date of the redemption. See
"Description of the Notes--Optional Redemption."
After November 1, 2006, we may redeem all or part of
the notes at any time at the redemption prices set
forth in the section "Description of the
Notes--Optional Redemption," plus accrued and unpaid
interest, if any, to the date of redemption.
On or prior to November 1, 2005, we may redeem up to
35% of the notes from the proceeds of certain sales
of our equity securities at 110.25% of the principal
amount, plus accrued and unpaid interest, if any, to
the date of redemption. See "Description of the
Notes--Optional Redemption."
Change of Control...... Upon the occurrence of a change of control, you will
have the right, as a holder of notes, to require us
to repurchase all of your notes at a repurchase price
equal to 101% of their principal amount, plus accrued
and unpaid interest, if any, to the date of
repurchase. We may not have enough funds or the terms
of our other debt may prevent us from purchasing the
notes. See "Description of the Notes--Repurchase at
Option of Holders--Change of Control."
Ranking................ The notes are our senior obligations and rank equal
in right of payment with our existing and future
senior debt.
The notes are structurally subordinated to all
obligations of our subsidiaries that do not guarantee
the notes. As of December 31, 2002, our subsidiaries
that are not guarantors had approximately $212
million of liabilities to which the notes would have
been structurally subordinated.
Collateral............. The notes are secured on a second-priority basis by
collateral consisting of certain of our domestic
manufacturing or processing facilities and our shares
of FMC Wyoming, our non wholly-owned principal
domestic subsidiary. The second-priority liens are
shared on an equal and ratable basis with the holders
of notes issued under our existing indentures and
with (i) the lenders and other credit providers under
the Credit Facilities, (ii) certain other lenders and
credit providers to us and our foreign subsidiaries
and (iii) lenders to Astaris LLC, our 50%-owned joint
venture, as beneficiaries of our obligations under
the support agreement described under "Description of
Other Indebtedness--Astaris Support Agreement." The
second-priority liens are subject and subordinate to
the first-priority lien granted to such lenders and
other credit providers in an amount not exceeding 10%
of our Consolidated Net Tangible Assets (as defined
in "Description of the Notes--Security") from time to
time. In addition, those lenders and credit providers
are also secured by liens on substantially all of our
other domestic assets that are not included in the
collateral securing the notes and on 65% of the stock
of certain of our foreign subsidiaries. As of
December 31,
3
2002, 10% of our Consolidated Net Tangible Assets
would have been approximately $186 million. The
amount of these obligations secured by first-priority
liens on the collateral for the notes may be
increased from time to time as our Consolidated Net
Tangible Assets grow.
Guarantees............. All of our existing and future subsidiaries that
guarantee our obligations under the Credit Facilities
will fully and unconditionally guarantee the notes on
a senior joint and several basis.
Collateral Trust
Agreement............ Under a collateral trust agreement entered into
concurrently with the issuance of the outstanding
notes, the second-priority liens securing the notes
are expressly junior to the first-priority liens
securing the obligations to certain of our lenders
and other credit providers on the collateral for the
notes. These obligations include obligations under
our Credit Facilities, certain indebtedness and
guarantees owed to lenders and credit providers to
our foreign subsidiaries and our obligations under
the Astaris support agreement. In addition, under the
collateral trust agreement, the liens securing the
notes may not be enforced by the holders of the notes
at any time when any obligations to such lenders and
credit providers are outstanding, except for certain
limited exceptions involving payment or bankruptcy
events of default on the notes or on notes issued
under our existing indentures. Amendments or waivers
by such lenders and credit providers shall also be
effective as to the liens securing the notes. Other
than after certain events of default have occurred,
such lenders and credit providers control the
disposition of the collateral and will receive any
proceeds from sales of the collateral.
Restrictive Covenants.. The indenture between us, the guarantors and Wachovia
Bank, National Association, as trustee, limits our
ability and the ability of our subsidiaries to:
. incur additional debt;
. pay dividends on our capital stock
or repurchase our capital stock;
. make certain investments;
. enter into certain types of
transactions with affiliates;
. limit dividends or other payments
by our restricted subsidiaries to
us;
. use assets as security in other
transactions; and
. sell certain assets or merge with
or into other companies.
These covenants are subject to a number of important
exceptions and limitations, which are described under
the heading "Description of the Notes--Certain
Covenants."
Fall-Away of Certain
Covenants............ From and after the time the notes are rated
investment grade by both Moody's Investors Service,
Inc. ("Moody's") and Standard & Poor's Ratings
Service ("Standard & Poor's") many of the restrictive
covenants will cease to apply. See "Description of
the Notes--Certain Covenants--Applicability of
Certain Covenants if Notes Rated Investment Grade."
Risk Factors
You should consider carefully all of the information set forth in this
prospectus and, in particular, should evaluate the specific factors set forth in
the section entitled "Risk Factors" for an explanation of certain risks of
investing in the notes.
4
The Company
We are a diversified, global chemical company providing innovative
solutions, applications and market-leading products to a wide variety of end
markets. We operate in three distinct business segments: Agricultural Products,
Specialty Chemicals and Industrial Chemicals. Agricultural Products provides
crop protection and pest control products for worldwide markets. Specialty
Chemicals includes food ingredients that are used to enhance structure, texture
and taste: pharmaceutical additives for binding and disintegrant use; and
lithium specialties for pharmaceutical synthesis and energy storage. Industrial
Chemicals encompasses a wide range of inorganic materials in which we possess
market and technology leadership, including soda ash, hydrogen peroxide,
phosphorus and specialty peroxygens in both North America and in Europe through
our subsidiary, FMC Foret S.A ("Foret"). At December 31, 2002, we had
approximately 5,500 employees and 37 manufacturing facilities in 19 countries.
------------------
FMC Corporation is a Delaware corporation. Our principal executive
offices are located at 1735 Market Street, Philadelphia, PA 19103. Our telephone
number is (215) 299-6000.
5
RISK FACTORS
You should carefully consider the risks described below and the other
information included in this prospectus and the documents incorporated by
reference herein before investing in the notes. The risks described below are
not the only ones facing our company. Additional risks not currently known to us
or that we currently deem immaterial may also impair our business.
Risks Relating to the Notes and our Other Indebtedness and Obligations
We have a significant amount of indebtedness, which could adversely affect our
financial condition and prevent us from fulfilling our obligations under the
notes.
We have a significant amount of indebtedness. At December 31, 2002,
we had $1,267.0 million of total indebtedness, excluding unused commitments
under our Credit Facilities.
Our amount of indebtedness could have important consequences for you.
For example, it:
. will require us to dedicate a significant portion of our cash
flow to making interest and principal payments on our
indebtedness, thereby reducing the availability of our cash
flow to fund working capital, capital expenditures,
acquisitions or other general corporate purposes;
. may make us less attractive to potential acquirors or
acquisition targets;
. may limit our flexibility to adjust to changing business and
market conditions and make us more vulnerable to a downturn in
general economic conditions as compared to a competitor that
may be less leveraged;
. may limit our activities due to restrictive covenants; and
. may make it more difficult for us to satisfy our obligations
with respect to the notes and our other outstanding
indebtedness.
Furthermore, our ability to satisfy our debt service obligations will
depend, among other things, upon our future operating performance and our
ability to refinance indebtedness when necessary. Each of these factors partly
depends on economic, financial, competitive and other factors beyond our
control. If we cannot generate sufficient cash from our operations to meet our
debt service obligations, we may need to reduce or delay capital expenditures or
curtail research and development. In addition, we may need to refinance our
debt, obtain additional financing or sell assets or equity, which we may not be
able to do on commercially reasonable terms, if at all. Our business may not
generate sufficient cash flow to satisfy our debt service obligations, and we
may not be able to obtain funding sufficient to do so.
In addition, we and our subsidiaries may be able to incur substantial
additional indebtedness in the future and we expect to incur additional
indebtedness, including additional borrowings under our Credit Facilities. If
additional new debt is added to our current debt levels, it could have an
adverse effect on our business, consolidated financial condition and results of
operations, as well as on our ability to satisfy our obligations on the notes.
Any of the foregoing could have a material adverse effect on our future
operations. You should read the discussions under the headings "Capitalization,"
"Selected Consolidated Financial Data," "Description of Other Indebtedness" and
"Description of the Notes" for further information about our high level of
indebtedness.
Our operations are restricted by the terms of our debt, which could adversely
affect us.
The indenture relating to the notes include a number of significant
restrictive covenants. These covenants could adversely affect us by limiting our
ability to plan for or react to market conditions or to meet our capital needs.
These covenants restrict our ability and the ability of our subsidiaries to,
among other things:
. incur additional debt;
6
. make certain investments;
. enter into certain types of transactions with affiliates;
. limit dividends or other payments by our restricted
subsidiaries to us;
. use assets as security in other transactions;
. pay dividends on our equity interest or repurchase our equity
interests; and
. sell certain assets or merge with or into other companies.
Our Credit Facilities also contain restrictive covenants. These
provisions limit the ability of us and our subsidiaries to, among other things:
. borrow money and guarantee the debts of others;
. use assets as security in other transactions;
. enter into new lines of business;
. sell assets or merge with or into other companies;
. make capital expenditures;
. prepay, redeem or exchange our debt;
. finance the operations of our foreign subsidiaries or restrict
the ability of our foreign subsidiaries to pay dividends to
us; and
. form any joint ventures or invest in subsidiaries.
In addition, the Credit Facilities require us to meet financial ratios
and tests, including maximum leverage, minimum net worth and interest coverage
levels. These restrictions could limit our ability to plan for or react to
market conditions or meet extraordinary capital needs and could otherwise
restrict corporate activities.
Our ability to comply with the covenants and other terms of the Credit
Facilities will depend on our future operating performance. If we fail to comply
with such covenants and terms, we would be required to obtain waivers from our
lenders in order to maintain compliance under our Credit Facilities. If we are
unable to obtain any necessary waivers and the debt under the Credit Facilities
is accelerated, it would have a material adverse effect on our financial
condition and future operating performance. For more information on the Credit
Facilities, see "Description of Other Indebtedness."
If the notes are rated investment grade at any time by Moody's and Standard &
Poor's, certain covenants contained in the indenture will fall away and the
holders of the notes will lose the protection of these covenants.
The indenture contains certain covenants that will fall away and cease
to have any effect from and after the first date when the notes are rated
investment grade by both Moody's and Standard & Poor's. See "Description of the
Notes--Certain Covenants--Applicability of Certain Covenants if Notes Rated
Investment Grade." These covenants restrict, among other things, our ability to
pay dividends, incur additional debt and to enter into certain types of
transactions. If after these covenants fall away, Moody's or Standard & Poor's
were to downgrade their rating of the notes, the covenants would not be
reinstated, and the holders of the notes would not have the protection of these
covenants.
The notes are secured only on a second-priority basis by certain of our property
that will also secure other indebtedness, and substantial amounts of other
indebtedness of ours is secured by liens on our assets that do not secure the
notes.
The notes are secured on a second-priority basis by collateral
consisting of certain of our manufacturing facilities and shares of stock
constituting our 87.5% economic interest in FMC Wyoming. The second-priority
liens are shared on an equal and ratable basis with the holders of indebtedness
issued under our existing indentures, which indebtedness was outstanding in the
aggregate principal amount of $386.3 million as of December 31, 2002, and with
the holders of the Bank
7
Obligations (as defined in "Description of the Notes--Certain Definitions"),
which include obligations under our Credit Facilities, certain indebtedness and
guarantees owed to lenders and credit providers to our foreign subsidiaries,
which was outstanding in the principal amount of $64.3 million as of December
31, 2002, and our obligations under the Astaris support agreement. In addition,
holders of the Bank Obligations are secured by first-priority liens on the
collateral for the notes in an amount not exceeding 10% of our Consolidated Net
Tangible Assets (as defined in "Description of the Notes--Certain Definitions").
The amount secured by a first-priority lien was approximately $186 million as of
December 31, 2002, and such amount may grow in the future if Consolidated Net
Tangible Assets increase. The holders of the Bank Obligations are also secured
by liens on other significant assets of us and our subsidiaries that are not
included in the collateral for the notes, and the notes are effectively
subordinated to the Bank Obligations to the extent of the value of such other
assets.
The collateral securing the notes and the quality of the liens thereon are
subject to control by other creditors. If there is a default, the value of the
collateral may not be sufficient to repay the notes and the other obligations
that would share in the proceeds of the collateral.
Under the collateral trust agreement, the second-priority liens
securing the notes may not be enforced by the holders of the notes at any time
when any obligations under our Credit Facilities or other Bank Obligations are
outstanding, subject to limited exceptions. Furthermore, under the terms of the
collateral trust agreement, at any time that the Bank Obligations are
outstanding, any actions that may be taken in respect of the collateral,
including the approval of certain amendments to the collateral documents,
waivers of past defaults, and the ability to cause the commencement of
enforcement proceedings and to control the conduct of such proceedings, will be
at the direction of the holders of the Bank Obligations, and the trustee, on
behalf of the holders of the notes, will not have the ability to control or
direct such actions, even if the rights of the holders of the notes are
adversely affected. In addition, the collateral securing the notes will be
subject to any and all exceptions, defects, encumbrances, liens and other
imperfections as may be accepted by the holders of the Bank Obligations from
time to time, whether on or after the date the notes are issued.
No appraisal of the value of the collateral has been performed in
connection with this offering, and the value of the collateral in the event of
liquidation will depend on market conditions, the availability of buyers and
other factors. The collateral is by its nature illiquid. We cannot assure you
that the proceeds from the sale or sales of such collateral would be sufficient
to satisfy the amounts outstanding under the notes and other obligations secured
by the second-priority liens after payment of the obligations secured by the
first-priority liens on the collateral. If such proceeds were not sufficient to
repay amounts outstanding under the notes, then holders of the notes would have
a general senior unsecured claim against our and the subsidiary guarantors'
remaining assets that are not otherwise pledged to other creditors.
The right of the collateral agent to foreclose upon and sell the
collateral upon the occurrence of a default will also be subject to limitations
under applicable bankruptcy laws if a bankruptcy proceeding is commenced against
us or our subsidiaries.
The notes are our obligations and not obligations of our non-guarantor
subsidiaries and are effectively subordinated to the claims of our non-guarantor
subsidiaries' creditors.
The notes are our direct obligations and are guaranteed by
substantially all of our domestic subsidiaries. All of our foreign subsidiaries,
certain immaterial domestic subsidiaries and FMC Wyoming are not guarantors of
the notes. Our cash flow and our ability to service our debt, including the
notes, depend partly upon the earnings of our non-guarantor subsidiaries. At
December 31, 2002, the non-guarantor subsidiaries represented approximately 28%
of our consolidated assets and had $211.9 million of outstanding liabilities. To
the extent we expand our foreign operations, a larger percentage of our
consolidated assets, revenue and operating income may be derived from
non-guarantor subsidiaries. Our ability to repatriate cash from our subsidiaries
may be limited by jurisdictional legal requirements, and the amounts which are
able to be repatriated may be subject to additional taxes.
Our subsidiaries are separate and distinct legal entities. Except for
the guarantors, our subsidiaries have no obligation to pay any amounts due on
the notes or to provide us with funds for our payment obligations, whether by
dividends, distributions, loans or other payments. Payments to us by our
subsidiaries will also be contingent upon our subsidiaries' earnings and
business considerations. In addition, any payment of dividends, distributions,
loans or advances by our subsidiaries to us could be subject to statutory or
contractual restrictions.
8
Our right to receive any assets of any of our subsidiaries upon their
liquidation or reorganization, and therefore the right of the holders of the
notes to participate in those assets, will be effectively subordinated to the
claims of that subsidiary's creditors, including debtholders and trade
creditors. This means that the holders of that debt would have a claim prior to
that of the noteholders with respect to the assets of that non-guarantor
subsidiary. In addition, even if we were a creditor of any of our subsidiaries,
our rights as a creditor would be subordinate to any security interest in the
assets of our subsidiaries and any indebtedness or our subsidiaries senior to
that held by us.
Federal and state statutes allow courts, under specific circumstances, to void
subsidiary guarantees of the notes.
The issuance of the subsidiary guarantees of the notes may be subject
to review under U.S. federal bankruptcy law and comparable provisions of state
or foreign fraudulent conveyance laws if a bankruptcy or reorganization case or
lawsuit is commenced by or on behalf of a subsidiary guarantor's unpaid
creditors. Generally speaking and depending upon the specific law applicable to
the situation, if a court were to find in such a bankruptcy or reorganization
case or lawsuit that, at the time the subsidiary guarantor issued the guarantee
of the notes:
. it issued the guarantee to delay, hinder or defraud present or
future creditors; or
. it received less than reasonably equivalent value or fair
consideration for issuing the guarantee and at the time it
issued the guarantee:
- it was insolvent or rendered insolvent by reason of
issuing the guarantee, or
- it was engaged, or about to engage, in a business or
transaction for which its assets, after giving effect
to its potential liability under the guarantee,
constituted unreasonably small capital to carry on
its business, or
- it intended to incur, or believed that it would
incur, debts beyond its ability to pay as they mature
then the court could void the obligations under the guarantee of the notes,
subordinate the guarantee of the notes to that subsidiary guarantor's other
obligations or take other action detrimental to holders of the notes. If that
occurs, the notes could become structurally subordinated to other obligations of
the subsidiary guarantor.
The measure of insolvency for purposes of fraudulent conveyance laws
varies depending upon the law of the jurisdiction that is being applied in any
proceeding to determine whether a fraudulent conveyance had occurred. Generally,
however, a person would be considered insolvent if, at the time it incurred the
debt:
. the present fair saleable value of its assets was less than
the amount that would be required to pay its probable
liability on its existing debts, including contingent
liabilities, as they become absolute and mature; or
. it could not pay its debts as they become due.
We cannot be certain what standard a court would use to determine
whether a subsidiary guarantor was solvent at the relevant time, or, regardless
of the standard that the court uses, that the issuance of the guarantee of the
notes would not be voided or the guarantee of the notes would not be
subordinated to a subsidiary guarantor's other debt. If such a case were to
occur, a guarantee could also be subject to the claim that, since the guarantee
was incurred for our benefit, and only indirectly for the benefit of the
subsidiary guarantor, the guarantee was incurred for less than fair
consideration.
Our commitments under our support agreement in favor of lenders to our Astaris
joint venture could have an adverse effect on our liquidity and financial
condition.
In connection with the financing of Astaris, our 50%-owned joint
venture with Solutia, we have agreed with Astaris' lenders that we will
contribute cash to make up for half of the shortfalls in Astaris' quarterly
earnings (before interest, taxes, depreciation and amortization) below agreed
targets. We contributed $31.3 million to Astaris in 2001 and $29.6 million in
2002 under the support agreement relating to Astaris and expect to contribute
between $35 million and $50 million of such keep-well payments to Astaris in
2003. Although such contributions increase our investment in Astaris, our rights
to recover on these investments are subordinated to the rights of
9
Astaris' creditors, whose interests are secured by a pledge of Astaris' assets.
Consequently, in the event of financial difficulties affecting Astaris, no
assurance can be given that we will recover our "keep-well" contributions in a
timely fashion, or at all. Furthermore, in the event that Solutia fails to meet
its commitments under its identical "keep-well" arrangement with Astaris'
lenders, we could face a situation in which it would be in our interest to make
additional contributions to Astaris beyond our contractual commitment in order
to preserve the value of our investment. The Credit Facilities and the indenture
governing the notes limit our ability to make additional contributions to
Astaris. The decision to make such additional contributions would increase our
risks associated with the joint venture and could have an adverse effect on our
liquidity and financial condition.
We may not have the ability to finance an offer-to-purchase requirement under
the change of control provision of the indenture.
If we undergo a change of control as defined in the indenture, we will
be required to offer to purchase the notes for a price equal to 101% of their
principal amount, plus accrued and unpaid interest to the purchase date. We
cannot assure you that we will have sufficient funds available to make the
required purchase of the notes in that event. In addition, a change of control
may constitute an event of default under our Credit Facilities, giving rise to a
right of acceleration by the lenders thereunder. Our Credit Facilities will
contain and any future debt that we incur may also contain restrictions on
repurchases in the event of a change of control or similar event. The change of
control provision may not protect you in a transaction in which we incur a large
amount of debt, including a reorganization, restructuring, merger or other
similar transaction, if the transaction does not involve a shift in voting power
or beneficial ownership large enough to trigger a change of control as defined
in the indenture governing the notes. See "Description of the Notes--Repurchase
at Option of Holders--Change of Control."
Your ability to resell the notes may be limited by a number of factors.
The new notes are a new issue of securities for which there is
currently no active trading market. The new notes will be registered under the
Securities Act, but will constitute a new issue of securities with no
established trading market. We do not intend to list the new notes on any
national securities exchange or to seek the admission of the new notes for
quotation through the Nasdaq Stock Market, Inc. In addition, the new notes will
not be eligible for trading on the Private Offerings, Resales, and Trading
through Automatic Linkages Market, also known as the PORTAL Market. PORTAL is a
computerized communications facility for primary offering and secondary trading
of securities that are eligible for resale pursuant to Rule 144A and that are
(1) restricted securities, as defined in Rule 144(a)(3), or (2) contractually
required to be resold only in compliance with Rule 144, Rule 144A, Regulation S
or in secondary private placements. If the new notes are traded after their
initial issuance, they may trade at a discount from their initial offering
price, depending on prevailing interest rates, the market for similar securities
and other factors, including general economic conditions and our financial
condition, performance and prospects. Accordingly, a market for the new notes
may not develop.
If you do not exchange your outstanding notes for new notes, your notes will
continue to have restrictions on transfer.
If you do not exchange your outstanding notes for new notes in the exchange
offer, or if your outstanding notes are tendered but not accepted, your notes
will continue to have restrictions on transfer. In general, you may offer or
sell any outstanding notes only if the notes are registered under the Securities
Act and applicable state laws, or resold under an exemption from these laws. We
do not intend to register the outstanding notes under the Securities Act, other
than in the limited circumstances described in the registration rights agreement
discussed in the section "Exchange Offer; Registration Rights."
Risks Relating to Our Business
Some of our businesses are cyclical, and demand by our customers for our
products weakens during economic downturns.
The businesses of a significant number of our customers, particularly
our customers for industrial chemicals, are, to varying degrees, cyclical, and
have historically experienced periodic downturns. Consequently,
10
some of our businesses are also cyclical. These economic and industry downturns
have been characterized by diminished product demand, excess manufacturing
capacity and, in some cases, lower average selling prices. Therefore, any
continued weakness in our customers' markets and overall global economic
conditions could result in a reduction in demand for our products and could
adversely affect our consolidated results of operations, financial condition or
cash flows. As a result of the depressed economic conditions beginning in the
fourth quarter of 2000 and continuing through the third quarter of 2002, demand
for our soda ash and hydrogen peroxide has fallen among our glass, textile and
pulp and paper customers. Weak conditions in the electronics industry have
suppressed demand for our hydrogen peroxide and specialty peroxygen products.
Overall, weak demand for products in our Industrial Chemicals segment has
adversely affected our consolidated results of operations and cash flows over
this period.
We operate worldwide and are affected by risks of doing business abroad.
Over 50% of our consolidated revenue is derived from sources outside
the U.S., and is therefore affected by general economic conditions and other
factors in Europe, South America and most of Asia, including fluctuations in
interest rates, market demand, labor costs and other factors beyond our control.
The demand for our customers' products and, therefore, our products, is directly
affected by these fluctuations. Our agricultural business in Asia and Brazil is
particularly susceptible to certain of these fluctuations. Although our
Industrial Chemicals segment is largely focused on the North American market, we
sell nearly 40% of our soda ash to markets outside of North America. Our Foret
industrial chemicals business based in Spain is dependent on economic and
political conditions in the European Community and the Middle East. We cannot
assure you that events having an adverse effect on the countries and regions in
which we or our customers operate will not occur or continue or whether there
will be an increase in interest rates, unfavorable currency fluctuations or a
slowdown in industrial activity generally.
Our crop protection business is seasonal and could be negatively impacted by
factors affecting the agricultural industry.
Our crop protection business is seasonal because of the planting,
growing and harvesting cycles of the agricultural industry, which impact our
customers' purchase patterns. The peak quarters for our sales are usually the
second and third quarters and therefore interim period operating results of the
crop business reflect the seasonal nature of the business and are not indicative
of results expected for the full fiscal year. Specifically, approximately
70%-80% of this business's annual earnings have historically been generated in
the second and third quarters.
In addition, our crop protection business faces volatility as a result
of a number of other factors, including weather patterns and field conditions,
levels of pest pressure, current and projected grain stocks and prices, and the
agricultural policies of the United States and foreign governments. These
factors can negatively impact production in the agricultural industry and
thereby reduce the demand for our crop protection products and could have an
adverse effect on our consolidated results of operations, financial condition
and cash flows in any given period.
We face competition from other chemical companies, which could adversely affect
our revenues and financial condition.
We actively compete with companies producing the same or similar
products, as well as, in some instances, with companies producing different
products designed for the same uses. We encounter competition in price,
delivery, service, performance, product innovation, and product recognition and
quality, depending on the product involved. Within our Agricultural Products
segment, most of our competitors are larger and have greater financial resources
than we do. As a result, these competitors may be better able to withstand a
change in conditions within the industries in which we operate and throughout
the economy as a whole.
Our competitors can be expected to continue to develop and introduce
new and enhanced products, which could cause a decline in market acceptance of
our products. In addition, our competitors could cause a reduction in the prices
for some of our products as a result of intensified price competition.
Competitive pressures can also result in the loss of major customers. An
inability to compete successfully could have an adverse effect on our
consolidated results of operations, financial condition and cash flows in any
given period.
11
Failure to make continued improvements in our technology and productivity could
hurt our competitive position.
Many of our products could be affected by rapid technological change
and new product introductions and enhancements. We believe we must continue to
enhance our existing products and to develop and manufacture new products with
improved capabilities in order to continue to be a market leader. We also
believe that we must continue to make improvements in our productivity in order
to maintain our competitive position. When we invest in new technologies,
processes or production facilities, we face risks related to construction
delays, cost over-runs and unanticipated technical difficulties related to
start-up. Our inability to anticipate, respond to or utilize changing
technologies could have an adverse effect on our consolidated results of
operations, financial condition and cash flows in any given period.
We continue to be liable for certain obligations of Technologies, which could
put a burden on our limited capital resources and adversely affect our liquidity
and financial condition.
Effective December 31, 2001, we completed our previously announced plan
to separate into two separately traded public companies, which included an
initial public offering of the stock of FMC Technologies, Inc. ("Technologies")
in the second quarter of 2001, through the distribution of our remaining 83%
ownership in Technologies (the "spin-off"). Prior to the spin-off of
Technologies on December 31, 2001, we were directly liable for or guaranteed
certain debt and contractual obligations of subsidiaries which now are part of
Technologies. As part of the spin- off, Technologies agreed to use reasonable
efforts to obtain releases in our favor and indemnify us against any obligations
for which Technologies cannot obtain a release in our favor. As of December 31,
2002, $14.5 million in face amount of obligations that we guaranteed remained
outstanding. Although we are protected by a contractual indemnity from
Technologies, we cannot assure you that Technologies will have adequate
liquidity to indemnify us or that use of our borrowing capacity to meet such
obligations may not in the future have an adverse effect on our liquidity,
consolidated results of operations, financial condition and cash flows in any
given period.
We are an international company and therefore face exchange rate and other
related risks.
A significant portion of our business is conducted in currencies other
than the U.S. dollar, which is our reporting currency. We recognize foreign
currency gains and losses arising from our operations in the period incurred. As
a result, currency fluctuations among the U.S. dollar and the currencies in
which we do business have caused and will continue to cause foreign currency
translation gains and losses, which could be material. Due to the weakness of
the euro in the period from 1999 through 2002, our business results have been
adversely affected by unfavorable dollar translation of earnings of our Foret
subsidiary and FMC BioPolymer operations in Europe. We cannot predict the
effects of exchange rate fluctuations upon our future operating results because
of the number of currencies involved, the variability of currency exposures and
the potential volatility of currency exchange rates. We take actions to manage
our foreign currency exposure such as entering into hedging transactions, where
available, but we cannot assure you that our strategies will adequately protect
our consolidated results of operations from the effects of exchange rate
fluctuations.
We also face risks arising from the imposition of exchange controls and
currency devaluations. Exchange controls may limit our ability to convert
foreign currencies into U.S. dollars or to remit dividends and other payments by
our foreign subsidiaries or businesses located in or conducted within a country
imposing controls. Currency devaluations result in a diminished value of funds
denominated in the currency of the country instituting the devaluation. Our
lithium business has operations in Argentina which may be adversely affected by
the banking and currency crises in that country and action taken by governmental
authorities to respond to such crises. Actions of this nature, if they occur or
continue for significant periods, could have an adverse affect on our
consolidated results of operations, financial condition and cash flows in any
given period.
Our businesses are subject to substantial government regulation, which prohibit
or restrict the sale of some of our products or increase our operating expenses
in order to comply with those regulations.
All of our businesses face extensive government regulation in the
United States and abroad. In our Agricultural Products segment, all of our
insecticides and herbicides sold or distributed in the United States must
12
first be registered with the U.S. Environmental Protection Agency ("EPA") under
the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"). Several
products of our Industrial Chemicals segment are also registered under FIFRA.
The registration process under FIFRA requires us to demonstrate that our product
will not cause unreasonable adverse effects on the environment or human health.
Many of the products of our Specialty Chemicals segment are used as ingredients
in pharmaceutical and food products. Several products of our Industrial
Chemicals segment are also sold for use in food processing and pharmaceutical
applications. Consequently, a number of our manufacturing operations are subject
to regulation by the U.S. Food and Drug Administration under rules governing
"good manufacturing practices" for materials to be used as ingredients in food
and pharmaceuticals and incorporated in the design of medical devices.
We currently deliver and sell soda ash outside of North America and
Europe through American Natural Soda Ash Corporation ("ANSAC"), a foreign sales
association comprised of U.S.-based soda ash manufacturers and organized under
the Webb-Pomerene Act. While we do not believe any U.S. government action
affecting the status of ANSAC is likely, net prices for soda ash in
international markets may weaken if the U.S. or other governments change their
policies so as to limit the effectiveness of North American soda ash producers
joining together to sell soda ash using a foreign sales association.
Our facilities are subject to operating hazards, which may increase our
liabilities or disrupt our business.
We are dependent upon the continued safe operation of our production
facilities. Our production facilities are subject to hazards associated with the
manufacture, handling, storage and transportation of chemical materials and
products, including leaks and ruptures, explosions, fires, inclement weather and
natural disasters, unscheduled downtime and environmental hazards. From time to
time in the past, we have had incidents that have temporarily shut down or
otherwise disrupted our manufacturing, causing production delays and resulting
in liability for workplace injuries and fatalities. Some of our products involve
the manufacture and/or handling of a variety of reactive, explosive and
flammable materials. Use of these products by our customers could also result in
liability if an explosion, fire, spill or other accident were to occur. We
cannot assure you that we will not experience these types of incidents in the
future or that these incidents will not result in production delays or otherwise
have an adverse effect on our consolidated results of operations, financial
condition or cash flows in any given period.
Environmental matters could have a substantial negative impact on our results of
operations.
We are subject to extensive federal, state, local and foreign
environmental, safety and health laws and regulations concerning, among other
things, emissions to the air, discharges to land and water and the generation,
handling, treatment and disposal of hazardous waste and other materials and
remediation of contaminated soil, surface and ground water. Our operations
entail the risk of violations of those laws and regulations, many of which
provide for substantial fines and criminal sanctions for violations. We believe
our operations are in substantial compliance with these laws and regulations.
However, we cannot assure you that we have been or will be at all times in
compliance with all of these requirements.
In addition, these requirements, and enforcement of these requirements,
may become more stringent in the future. Although we cannot predict the ultimate
cost of compliance with any such requirements, the costs could be material.
Non-compliance could subject us to material liabilities, such as government
fines, damages arising from third-party lawsuits or the suspension, and
potential cessation of non-compliant operations. We may also be required to make
significant site or operational modifications at substantial cost. Future
developments could also restrict or eliminate the use of or require us to make
modifications to our products, which could have an adverse effect on our
consolidated results of operations, financial condition and cash flows in any
given period.
At any given time, we are involved in claims, litigation,
administrative proceedings and investigations of various types in a number of
jurisdictions involving potential environmental liabilities, including clean-up
costs associated with waste disposal sites, natural resource damages, property
damage and personal injury. We cannot assure you that the resolution of these
environmental matters will not have an adverse effect on our consolidated
results of operations, financial condition and cash flows in any given period.
The ultimate costs and timing of environmental liabilities are
difficult to predict. Liability under environmental laws relating to
contaminated sites can be imposed retroactively and on a joint and several
basis. One
13
liable party could be held responsible for all costs at a site, regardless of
fault, percentage of contribution to the site or the legality of the original
disposal. We could incur significant costs, including clean-up costs, natural
resources damages, civil or criminal fines and sanctions and third-party claims,
as a result of past or future violations of, or liabilities under, environmental
laws.
We have obligations under environmental consent decrees relating to
Astaris' former Pocatello, Idaho phosphorus facility and our former fiber
manufacturing facility in Front Royal, Virginia, that will require us to make
significant cash expenditures over a number of years. We believe that we have
accurately estimated future spending and have made adequate reserves for such
expenditures and for other known environmental liabilities related to these and
other sites. However, we cannot assure you that such expenditures or liabilities
will not exceed our current estimates or reserves, or that the discovery of new
conditions or additional claims, such as claims for natural resource damages,
personal injury or property damage, will not arise and have an adverse affect on
our consolidated results of operations and consolidated cash flows.
Legal proceedings and other claims could impose substantial costs on us.
As a manufacturer of chemical-based materials, we have lawsuits
involving environmental, product liability and other claims filed against us
from time to time. We are currently defending a number of legal proceedings.
We have insurance coverage that we believe would be available to
mitigate potential damages in many of these cases. However, there is no
assurance that our available insurance will cover these claims, that our
insurers will not challenge coverage for certain claims, or that the final
damage award will not exceed our available insurance coverage. Any of the
foregoing could have an adverse effect on our results of operations, financial
condition and cash flows in any given period.
Increased raw material and energy costs may reduce our income.
In connection with our operations, we purchase commodity raw materials.
While temporary shortages of raw materials and energy may occasionally occur,
these items are generally sufficiently available to cover current and projected
requirements. We typically purchase major requirements for key raw materials
under medium-term contracts. However, their prices fluctuate under these
contracts as a result of unscheduled plant interruptions and domestic and world
market conditions. Given our competitive markets, it is often not possible to
pass all of these increased costs on to our customers. Any increase in these
costs that we experience in the future may have an adverse effect on our future
operating margins.
14
FORWARD-LOOKING INFORMATION
This prospectus and the documents incorporated by reference herein
include "forward-looking statements" within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 under the
captions "Summary--The Company" and elsewhere. These forward-looking statements
are typically identified by use of the words "anticipate," "believe,"
"estimate," "expect" and similar expressions, although some forward-looking
statements are expressed differently. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those expressed in, or implied by, these statements,
including, among other things:
Risks Relating to the Notes and our other Indebtedness and Obligations:
. the impact our indebtedness will have on our ability to fulfill
our obligations made under the notes;
. the effect the terms of our debt will have on our operations;
. the fallaway of certain covenants contained in the indenture if
the notes are rated investment grade;
. the availability of sufficient proceeds to satisfy the amounts
due under the notes;
. the ability of the trustee to foreclose on secured property and
proceeds from the sale of collateral will be sufficient to
repay the notes in full;
. that the notes are effectively subordinated to the claims of
our non-guarantor subsidiaries' creditors;
. whether subsidiary guarantees are voided by law;
. our commitments under the support agreement for Astaris;
. the availability of sufficient funds to purchase the notes upon
a change of control;
. the ability to resell the new notes;
. the restrictions on resale if the outstanding notes are not
exchanged for new notes;
Risks Relating to Our Business:
. the cyclicality of our business and the overall demand for our
products;
. general economic conditions and other factors affecting our
business abroad;
. the seasonality of our crop protection business and volatility
resulting from climatic conditions;
. competition from other chemical companies;
. our ability to make continued improvements in our technology;
. the effect our guarantees of performance obligations of
Technologies will have on our liquidity and capital resources;
. the impact of changing interest rates;
. the enactment of new government regulations and other changes
in the regulatory environment;
. operating hazards in our facilities which may disrupt our
business;
. environmental matters;
. substantial litigation costs; and
. increased raw material and energy costs.
We undertake no obligation to update forward-looking statements.
15
THE EXCHANGE OFFER
General
We are offering to exchange up to $355,000,000 aggregate principal
amount of new notes for the same aggregate principal amount of outstanding
notes, properly tendered before the expiration date and not withdrawn. We are
making the exchange offer for all of the outstanding notes. Your participation
in the exchange offer is voluntary and you should carefully consider whether to
accept this offer.
Our obligations to accept outstanding notes for exchange pursuant to
the exchange offer are limited by the conditions listed under "--Conditions to
the Exchange Offer" below. We currently expect that each of the conditions will
be satisfied and that no waivers will be necessary.
Purpose of the Exchange Offer
We issued and sold $355,000,000 aggregate principal amount of the
outstanding notes on October 21, 2002 in a transaction exempt from the
registration requirements of the Securities Act. Because the transaction was
exempt under the Securities Act, you may re-offer, resell or otherwise transfer
the outstanding notes only if registered under the Securities Act or if an
applicable exemption from the registration and prospectus delivery requirements
of the Securities Act is available.
In connection with the issuance and sale of the outstanding notes, we
and the subsidiary guarantors entered into a registration rights agreement,
which requires us to consummate this exchange offer by April 18, 2003. If we are
unable to complete the exchange offer, or have a shelf registration statement
declared effective, by April 18, 2003, the interest rate on the outstanding
notes will increase by 0.25% per annum, which rate shall further increase by
0.25% per annum for each subsequent 90-day period during which such registration
default continues (up to a maximum of 1.0% basis points per annum) until we
complete the exchange offer or have a shelf registration statement declared
effective.
In addition, there are circumstances under which we are required to use
our best efforts to file a shelf registration statement with respect to resales
of the outstanding notes. We have filed a copy of the registration rights
agreement as an exhibit to our Quarterly Report on Form 10-Q for the quarter
ended September 30, 2002.
We are making the exchange offer to satisfy our obligations under the
registration rights agreement. Otherwise, we are not required to file any
registration statement to register any outstanding notes. Holders of outstanding
notes that do not tender their outstanding notes or whose outstanding notes are
tendered but not accepted will have to rely on exemptions to registration
requirements under the securities laws, including the Securities Act, if they
wish to sell their outstanding notes.
Terms of the Exchange
We are offering to exchange, upon the terms of this prospectus and the
letter of transmittal, $1,000 in principal amount of new notes for each $1,000
in principal amount of outstanding notes. The terms of the new notes are the
same in all material respects, including principal amount, interest rate,
maturity and ranking, as the terms of the outstanding notes for which they may
be exchanged pursuant to the exchange offer, except that the offering of the new
notes has been registered under the Securities Act and, therefore, the new notes
will not be subject to restrictions on transfer applicable to the outstanding
notes. The new notes will evidence the same indebtedness as the outstanding
notes and will be entitled to the benefits of the indenture. Please refer to the
section in this prospectus entitled "Description of Notes" for a more complete
discussion of the terms of the notes.
The exchange offer is not conditioned upon any minimum aggregate amount
of outstanding notes being tendered for exchange.
We have not requested, and do not intend to request, an interpretation
by the staff of the SEC as to whether the new notes issued pursuant to the
exchange offer in exchange for the outstanding notes may be offered for sale,
resold or otherwise transferred by any holder without compliance with the
registration and prospectus delivery
16
provisions of the Securities Act. Instead, based on an interpretation by the
staff in a series of no-action letters issued to third parties, we believe that
new notes issued in the exchange offer in exchange for outstanding notes may be
offered for sale, resold and otherwise transferred by any holder of new notes
(other than any holder which is an affiliate of ours or a broker-dealer that
purchased outstanding notes from us to resell pursuant to Rule 144A under the
Securities Act or any other available exemption) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that the new notes are acquired in the ordinary course of the holder's business
and the holder has no arrangement or understanding with any person to
participate in the distribution of the new notes and neither the holder nor any
other person is participating in or intends to participate in a distribution of
the new notes. Because the SEC has not considered our exchange offer in the
context of a no-action letter, we cannot assure you that the staff would make a
similar determination with respect to the exchange offer. Any holder that is an
affiliate of ours or that tenders in the exchange offer for the purpose of
participating in a distribution of the new notes may be deemed to have received
restricted securities and will not be allowed to rely on this interpretation by
the staff and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
If you participate in the exchange offer, you must acknowledge, among
other things, that you are not participating in, and do not intend to
participate in, a distribution of the new notes. If you are a broker-dealer that
receives new notes for your own account in exchange for outstanding notes, where
your outstanding notes were acquired by you as a result of your market-making
activities or other trading activities, you must acknowledge that you will
deliver a prospectus in connection with any resale of the new notes. Please
refer to the section in this prospectus entitled "Plan of Distribution" for a
more complete discussion of your ability to resell the new notes.
You will not be required to pay brokerage commissions or fees or, if
you comply with the instructions in the letter of transmittal, transfer taxes
with respect to the exchange of the outstanding notes in the exchange offer.
Expiration Date; Extension; Termination; Amendment
The exchange offer will expire at 5:00 p.m., New York City time, on
April 16, 2003, unless we have extended the period of time that the exchange
offer is open. The expiration date will be at least 20 business days after the
beginning of the exchange offer as required by Rule 14e-1(a) under the Exchange
Act. We reserve the right to extend the period of time that the exchange offer
is open, and delay acceptance for exchange of any outstanding notes, by giving
oral or written notice to the exchange agent and by timely public announcement
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date. During any extension, all outstanding
notes previously tendered will remain subject to the exchange offer unless
properly withdrawn.
We also reserve the right to:
. end or amend the exchange offer and not to accept for exchange
any outstanding notes not previously accepted for exchange
upon the occurrence of any of the events specified below under
"--Conditions to the Exchange Offer" that have not been waived
by us; and
. amend the terms of the exchange offer in any manner which, in
our good faith judgment, is advantageous to you, whether
before or after any tender of the outstanding notes.
If any termination or amendment occurs, we will notify the exchange
agent and will either issue a press release or give oral or written notice to
you as promptly as practicable.
Procedures for Tendering Outstanding Notes
Your tender to us of your outstanding notes and our acceptance of the
notes will constitute a binding agreement between you and us on the terms
contained in this prospectus and in the letter of transmittal. You will tender
outstanding notes by:
. properly completing and signing the letter of transmittal or a
facsimile copy of the letter, and delivering the letter,
together with the certificate or certificates representing the
outstanding notes
17
being tendered and any required signature guarantees and any
other documents required by the letter of transmittal, to the
exchange agent at its address listed below on or before the
expiration date; or
. complying with the procedure for book-entry transfer described
below; or
. complying with the guaranteed delivery procedures described
below.
If your outstanding notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and you wish to tender
the notes, you should contact the registered holder promptly and instruct the
registered holder to tender on your behalf. If you wish to tender on your own
behalf, you must, before completing and executing the letter of transmittal and
delivering the outstanding notes, either make appropriate arrangements to
register ownership of the outstanding notes in your name or obtain a properly
completed bond power from the registered holder. The transfer of registered
ownership may take considerable time.
The method of delivering the outstanding notes, letters of transmittal
and all of the required documents is at the election and risk of the holder. If
delivery is by mail, we recommend that you use registered mail, properly
insured, with return receipt requested. In all cases, sufficient time should be
allowed to insure timely delivery. No notes or letters of transmittal should be
sent to us.
If tendered outstanding notes are registered in the name of the person
who signs the letter of transmittal and the new notes to be issued in exchange
for the tendered notes are to be issued in the name of the registered holder,
the signature of the signer need not be guaranteed.
In addition, if any untendered outstanding notes are to be reissued in
the name of the registered holder, the signature need not be guaranteed. A
registered holder shall include any participant in The Depository Trust Company
("DTC") whose name appears on a security listing as an owner of outstanding
notes.
In any other case, the tendered outstanding notes must be endorsed or
accompanied by written instruments of transfer, in form satisfactory to us and
duly executed by the registered holder. The signature of the endorsement or
instrument of transfer must be guaranteed by an eligible institution. The
following are considered eligible institutions:
. a firm which is a member of a registered national securities
exchange or a member of the National Association of Securities
Dealers, Inc.;
. a clearing agency;
. an insured credit union;
. a savings association or a commercial bank; or
. a trust company having an office or correspondent in the
United States.
If the new notes and/or outstanding notes not exchanged are to be
delivered to an address other than that of the registered holder appearing on
the note registrar for the outstanding notes, the signature in the letter of
transmittal must be guaranteed by an eligible institution.
We understand that the exchange agent has confirmed with DTC that any
financial institution that is a participant in DTC's system may use its
Automated Tender Offer Program to tender outstanding notes. We further
understand that the exchange agent will request, within two business days after
the date the exchange offer commences, that DTC establish an account relating to
the outstanding notes for the purpose of facilitating the exchange offer, and
any participant may make book-entry delivery of outstanding notes by causing DTC
to transfer the outstanding notes into the exchange agent's account in
accordance with the Automated Tender Offer Program procedures for transfer.
However, the exchange of the outstanding notes will only be made after timely
confirmation of the book-entry transfer and timely receipt by the exchange agent
of an agent's message, an appropriate letter of transmittal with any registered
signature guarantee, and any other documents required. The term "agent's
message" means a message, transmitted by DTC and received by the exchange agent
and forming part of a book-entry confirmation, stating that DTC has received an
express acknowledgment from a participant tendering outstanding notes that are
the subject of the book-entry confirmation and that the participant has received
and agrees to be bound by the terms of the letter of transmittal and that we may
enforce such agreement against the participant.
18
If you want to tender outstanding notes in the exchange offer and time
will not permit a letter of transmittal or outstanding notes to reach the
exchange agent before the expiration date or you cannot comply with the
procedure for book-entry transfer on a timely basis, a tender may be effected if
the exchange agent has received at its address listed below before the
expiration date, a letter, telegram or facsimile transmission from an eligible
institution listing your name and address, the names in which the outstanding
notes are registered and, if possible, the certificate number of the outstanding
notes to be tendered, and stating that the tender is being made by the letter,
telegram or facsimile transmission and guaranteeing that within three business
days after the expiration date, the outstanding notes in proper form for
transfer, or a confirmation of book-entry transfer of the outstanding notes into
the exchange agent's account at DTC, will be delivered by the eligible
institution, together with a properly completed and duly executed letter of
transmittal and any other required documents. Unless outstanding notes being
tendered by the method described in the preceding sentence are deposited with
the exchange agent within the time period described in the preceding sentence
and accompanied or preceded by a properly completed letter of transmittal and
any other required documents, we may, at our option, reject the tender. You may
obtain copies of the notice of guaranteed delivery from the exchange agent.
Your tender will be deemed to have been received when the exchange
agent receives:
. your properly completed and duly signed letter of transmittal
accompanied by the outstanding notes, or a confirmation of
book-entry transfer of such outstanding notes into the
exchange agent's account at DTC; or
. a notice of guaranteed delivery or letter, telegram or
facsimile transmission to similar effect from an eligible
institution.
We will issue new notes in exchange for outstanding notes tendered by
means of a notice of guaranteed delivery or letter, telegram or facsimile
transmission to similar effect by an eligible institution only when the exchange
agent receives (1) the letter of transmittal and any other required documents
and (2) the tendered outstanding notes.
We will determine all questions regarding the validity, form,
eligibility, time of receipt and acceptance of outstanding notes tendered for
exchange. You should be aware that:
. We reserve the absolute right to reject any and all tenders of
any particular outstanding notes not properly tendered or not
to accept any particular outstanding notes which acceptance
might, in our judgment or that of our counsel, be unlawful.
. We reserve the absolute right to waive any defects or
irregularities or conditions of the exchange offer as to any
particular outstanding notes either before or after the
expiration date, including the right to waive the
ineligibility of any holder that seeks to tender outstanding
notes in the exchange offer.
. Our interpretation of the terms and conditions of the exchange
offer, including the letter of transmittal and the
instructions, shall be final and binding on all parties.
. Unless waived, any defects or irregularities in connection
with tenders of outstanding notes for exchange must be cured
within a reasonable period of time as we shall determine.
. Neither we, the exchange agent nor any other person shall have
any duty to give notification of any defect or irregularity
with respect to any tender of outstanding notes for exchange.
If the letter of transmittal is signed by a person or persons other
than the registered holder or holders of outstanding notes, the outstanding
notes must be endorsed or accompanied by appropriate powers of attorney, in
either case signed exactly as the name or names of the registered holder or
holders appear on the outstanding notes.
If the letter of transmittal or any outstanding notes or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, they should indicate they are acting in that capacity
when signing, and, unless waived by us, you should provide evidence of their
authority to act in that capacity.
19
If you tender, you will be representing to us that:
. the new notes you acquire pursuant to the exchange offer are
being acquired in the ordinary course of business of the
person receiving new notes, whether or not the person is the
holder;
. you are not an affiliate of ours;
. you are not participating in, and do not intend to participate
in, and have no arrangement or understanding with any person
to participate in, a distribution of the outstanding notes or
the new notes; and
. if you are a broker or dealer registered under the Exchange
Act, you will receive the new notes for your own account in
exchange for outstanding notes that were acquired as a result
of market-making activities or other trading activities. You
must acknowledge that you will deliver a prospectus in
connection with any resale of the new notes. Please refer to
the section in this prospectus entitled "Plan of Distribution"
for a more complete discussion of your ability to resell the
new notes.
Terms and Conditions of the Letter of Transmittal
By signing and returning the letter of transmittal you will be agreeing
to the following terms and conditions, which are part of the exchange offer.
. You are exchanging, assigning and transferring the outstanding
notes to us and irrevocably constitute and appoint the
exchange agent as your agent and attorney-in-fact to cause the
outstanding notes to be assigned, transferred and exchanged.
. You represent and warrant that you have full power and
authority to tender, exchange, assign and transfer the
outstanding notes and acquire new notes issuable upon the
exchange of tendered outstanding notes.
. When we accept outstanding notes for exchange, we will acquire
good and unencumbered title to the tendered outstanding notes,
free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim.
. You will, upon request, execute and deliver any additional
documents deemed by the exchange agent or us to be necessary
or desirable to complete the exchange, assignment and transfer
of tendered outstanding notes or transfer ownership of such
outstanding notes on the account books maintained by DTC.
Your acceptance of any tendered outstanding notes and our issuance of
new notes in exchange for the outstanding notes will constitute performance in
full by us of our obligations under the registration rights agreement to
complete the exchange offer.
All authority conferred by you will survive your death or incapacity
and every obligation of yours will be binding upon your heirs, legal
representatives, successors, assigns, executors and administrators. You will
also make the representations described above under "--Procedures for Tendering
Outstanding Notes."
Withdrawal Rights
You may withdraw your tender of outstanding notes at any time before
5:00 p.m., New York City time, on the expiration date.
For a withdrawal to be effective, the exchange agent must receive a
written notice of withdrawal, sent by telegram, facsimile transmission, receipt
confirmed by telephone, or letter, before the expiration date. Any notice of
withdrawal must:
. specify the name of the person that tendered the outstanding
notes to be withdrawn;
. identify the outstanding notes to be withdrawn, including the
certificate number or numbers and principal amount of such
outstanding notes;
. specify the principal amount of outstanding notes to be
withdrawn;
20
. include a statement that the holder is withdrawing its
election to have the outstanding notes exchanged;
. be signed by the holder in the same manner as the original
signature on the letter of transmittal by which the
outstanding notes were tendered or as otherwise described
above, including any required signature guarantees, or be
accompanied by documents of transfer sufficient to have the
trustee under the indenture register the transfer of the
outstanding notes into the name of the person withdrawing the
tender; and
. specify the name in which any of the outstanding notes are to
be registered, if different from that of the person that
tendered the outstanding notes.
The exchange agent will return the properly withdrawn outstanding notes
promptly following receipt of notice of withdrawal. If outstanding notes have
been tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawn outstanding notes or otherwise comply with DTC's procedures.
Any outstanding notes withdrawn will not have been validly tendered for
exchange for purposes of the exchange offer. Any outstanding notes that have
been tendered for exchange but which are not exchanged for any reason will be
returned to the holder without cost to the holder as soon as practicable after
withdrawal, rejection of tender or termination of the exchange offer. In the
case of outstanding notes tendered by book-entry transfer into the exchange
agent's account at DTC pursuant to its book-entry transfer procedures, the
outstanding notes will be credited to an account with DTC specified by the
holder, as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. Properly withdrawn outstanding notes may be
retendered by following one of the procedures described under "--Procedures for
Tendering Outstanding Notes" above at any time on or before the expiration date.
Acceptance of Outstanding Notes for Exchange; Delivery of New Notes
Upon satisfaction or waiver of all of the conditions to the exchange
offer, we will accept, promptly after the exchange date, all outstanding notes
properly tendered and will issue the new notes promptly after the acceptance.
However, please refer to the section in this prospectus entitled "--Conditions
to the Exchange Offer" below for a discussion of the conditions under which we
may end the exchange offer and reject for exchange any outstanding notes. For
purposes of the exchange offer, we will be deemed to have accepted properly
tendered outstanding notes for exchange when we give notice of acceptance to the
exchange agent.
For each outstanding note accepted for exchange, the holder of the
outstanding note will receive a new note having a principal amount at maturity
equal to that of the surrendered outstanding note.
In all cases, we will issue new notes for outstanding notes that are
accepted for exchange pursuant to the exchange offer only after the exchange
agent timely receives certificates for the outstanding notes or a book-entry
confirmation of the outstanding notes into the exchange agent's account at DTC,
a properly completed and duly executed letter of transmittal and all other
required documents.
Conditions to the Exchange Offer
We will not be required to accept for exchange, or to issue new notes
in exchange for, any outstanding notes and may end or amend the exchange offer,
by notice to the exchange agent or by a timely press release, if at any time
before the acceptance of the outstanding notes for exchange or the exchange of
the new notes for the outstanding notes, any of the following conditions exist:
. any action or proceeding is instituted or threatened in any
court or by or before any governmental agency or regulatory
authority or any injunction, order or decree is issued, in
each case, with respect to the exchange offer that, in our
sole judgment, might materially impair our ability to proceed
with the exchange offer or have a material adverse effect on
the contemplated benefits of the exchange offer to us; or
21
. any change, or any development involving a prospective change,
shall have occurred or be threatened in our business,
properties, assets, liabilities, financial condition,
operations, results of operations or prospects that is or may
be adverse to us, or we become aware of facts that have or may
have adverse significance with respect to the value of the
outstanding notes or the new notes or that may materially
impair the contemplated benefits of the exchange offer to us;
or
. any law, rule or regulation or applicable interpretation of
the staff of the SEC is issued or promulgated that, in our
good faith determination, does not permit us to effect the
exchange offer; or
. any governmental approval has not been obtained, which we
think is necessary for the completion of the exchange offer;
or
. there shall have been proposed, adopted or enacted any law,
statute, rule or regulation, or an amendment to any existing
law, statute, rule or regulation, which might materially
impair our ability to proceed with the exchange offer or have
a material adverse effect on the contemplated benefits of the
exchange offer to us; or
. there shall occur a change in the current interpretation by
the staff of the SEC that permits the new notes issued
pursuant to the exchange offer in exchange for outstanding
notes to be offered for resale, resold and otherwise
transferred by holders, other than any holder that is a
broker-dealer or an affiliate of ours within the meaning of
Rule 405 under the Securities Act, without compliance with the
registration and prospectus delivery provisions of the
Securities Act, provided that the new notes are acquired in
the ordinary course of the holders' business and the holders
have no arrangement with any person to participate in the
distribution of such new notes.
We reserve the right to end the exchange offer and reject for exchange
any outstanding notes upon the occurrence of any of the preceding conditions. In
addition, we may amend the exchange offer at any time before the expiration date
if any of these conditions exist.
In addition, we will reject for exchange any outstanding notes
tendered, and no new notes will be issued in exchange for any outstanding notes,
if at the time any stop order is threatened or in effect with respect to the
registration statement of which this prospectus constitutes a part or the
qualification of the indenture under the Trust Indenture Act of 1939. If any
stop order is in effect we will be required to use our best efforts to obtain
its withdrawal at the earliest possible time.
The exchange offer is not conditioned upon any minimum principal amount
of outstanding notes being tendered for exchange.
Exchange Agent
We have appointed Wachovia Bank, National Association as the exchange
agent for the exchange offer. You should direct all executed letters of
transmittal to the exchange agent at the addresses listed below:
By Mail, Hand or Overnight Delivery:
Wachovia Bank, National Association
1525 West W.T. Harris Boulevard
By Facsimile Transmission: NC 1153 3C3 Confirm by Telephone:
(Eligible Institutions Only): Charlotte, NC 28262-1153 (704) 590-7410
(704) 590-7628 Attn: Corporate Trust Operation
You should direct questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for notices of guaranteed delivery to the exchange agent at the address
and telephone number listed above.
22
Delivery to an address other than as listed above, or transmissions of
instructions by a facsimile number other than as listed above, will not
constitute a valid delivery.
Solicitation of Tenders; Fees and Expenses
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. However, we will pay the exchange agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses in connection with the exchange offer. We will
pay the expenses to be incurred in connection with the exchange offer, including
fees and expenses of the exchange agent and trustee, registration fees,
accounting, legal and printing expenses and other related fees and expenses.
Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of
outstanding notes under the exchange offer. If, however, certificates
representing new notes or outstanding notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be issued in the name
of any person other than the registered holder of the outstanding notes
tendered, or if tendered outstanding notes are registered in the name of any
person other than the person signing the letter of transmittal, or if a transfer
tax is imposed for any reason other than the exchange of outstanding notes in
the exchange offer, then the amount of the transfer taxes whether imposed on the
registered holder or any other person, will be payable by the tendering holder.
If satisfactory evidence of payment of the taxes or exemption therefrom is not
submitted with the letter of transmittal, the amount of the transfer taxes will
be billed directly to the tendering holder.
Accounting Treatment
The new notes will be recorded at the carrying value of the outstanding
notes as reflected in our accounting records on the date the exchange offer is
completed. Accordingly, we will not recognize any gain or loss for accounting
purposes upon the exchange of new notes for outstanding notes. We will amortize
the expenses incurred in connection with the issuance of the new notes over the
term of the new notes.
Consequences of Failure to Exchange
If you do not exchange your outstanding notes for new notes pursuant to
the exchange offer, you will continue to be subject to the restrictions on
transfer of the outstanding notes as described in the legend on such notes. In
general, the outstanding notes may be offered or sold only if registered under
the Securities Act, unless they are sold under an exemption from, or in a
transaction not subject to, the Securities Act and applicable state securities
laws. We do not currently anticipate that we will register the outstanding notes
under the Securities Act. However, under limited circumstances we may be
required to file with the SEC a shelf registration statement to cover resales of
the outstanding notes by the holders of notes who satisfy conditions relating to
the provision of information in connection with the shelf registration
statement. Please refer to the section in this prospectus entitled "Exchange
Offer; Registration Rights" for a more complete discussion of these registration
rights.
Your participation in the exchange offer is voluntary, and you should
carefully consider whether to participate. You may wish to consult your
financial and tax advisors in making a decision whether or not to tender your
outstanding notes. Please refer to the section in this prospectus entitled
"Certain United States Federal Tax Considerations" for a more complete
discussion of the tax consequences of participating in the exchange offer.
As a result of the making of, and upon acceptance for exchange of all
validly tendered outstanding notes pursuant to the terms of, this exchange
offer, we will have fulfilled a covenant contained in the registration rights
agreement. If you do not tender your outstanding notes in the exchange offer,
you will be entitled to all the rights and limitations applicable to the
outstanding notes under the indenture, except for any rights under the
registration rights agreement that by their terms end or cease to have further
effectiveness as a result of the making of this exchange offer. To the extent
that outstanding notes are tendered and accepted in the exchange offer, the
trading market for untendered, or tendered but unaccepted, outstanding notes
could be adversely affected. Please refer to the
23
section in this prospectus entitled "Risk Factors--If you do not exchange your
outstanding notes for new notes, your notes will continue to have restrictions
on transfer" for an additional discussion of the consequences of not
participating in the exchange offer.
We may in the future seek to acquire, subject to the terms of the
indenture, untendered outstanding notes in open market or privately negotiated
transactions, through subsequent exchange offers or otherwise. The terms of
these purchases or offers may differ from the terms of the exchange offer.
Resale of New Notes
As noted above, we are making the exchange offer in reliance on the
position of the staff of the SEC in interpretive letters addressed to third
parties in other transactions. However, we have not sought an interpretive
letter from the staff and we cannot assure you that the staff would make a
similar determination with respect to the exchange offer as it has in past
interpretive letters to third parties. Any holder who is an affiliate of ours or
who has an arrangement or understanding with respect to the distribution of the
new notes to be acquired pursuant to the exchange offer, or any broker-dealer
who purchased outstanding notes from us to resell pursuant to Rule 144A or any
other available exemption under the Securities Act:
. cannot rely on the applicable interpretations of the staff;
and
. must comply with the registration and prospectus delivery
requirements of the Securities Act.
A broker-dealer who holds outstanding notes that were acquired for its
own account as a result of market-making or other trading activities may be
deemed to be an underwriter within the meaning of the Securities Act and must,
therefore, deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of new notes. Each broker-dealer that receives new
notes for its own account in exchange for outstanding notes, where the
outstanding notes were acquired by a broker-dealer as a result of market-making
activities or other trading activities, must acknowledge in the letter of
transmittal that it will deliver a prospectus in connection with any resale of
the new notes. A secondary resale transaction in the United States by a holder
using the exchange offer to participate in a distribution of outstanding notes
must be covered by an effective registration statement containing the selling
security holder information required by Item 507 of Regulation S-K. Please refer
to the section in this prospectus entitled "Plan of Distribution" for a more
complete discussion of your ability to resell the new notes.
In addition, to comply with the securities laws of some jurisdictions,
the new notes may be offered or sold only if they have been registered or
qualified for sale in the jurisdiction or an exemption from registration or
qualification is available and is complied with. We have agreed, pursuant to the
registration rights agreement and subject to specified limitations in the
registration rights agreement, to register or qualify the new notes for offer or
sale under the securities or blue sky laws of these jurisdictions as any holder
of the new notes reasonably requests. Registration or qualification may require
the imposition of restrictions or conditions, including suitability requirements
for offerees or purchasers, in connection with the offer or sale of any new
notes.
24
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In
consideration for issuing the new notes, we will receive in exchange outstanding
notes of like principal amount, the terms of which are substantially identical
in all material respects to the new notes. The outstanding notes surrendered in
exchange for new notes will be retired and cancelled and cannot be reissued.
Accordingly, issuance of the new notes will not result in any increase in our
indebtedness.
We used the net proceeds from the offering of the outstanding notes and
borrowings under the Credit Agreement to (i) terminate our then-existing
accounts receivable securitization facility, (ii) repay borrowings under and
terminate our then-existing revolving credit facility, (iii) fund into a debt
reserve account amounts sufficient to repay our $99.5 million aggregate
principal amount of 7.125% medium-term notes due November 2002 (which have now
been paid at maturity) and our $160.5 million aggregate principal amount of
6.375% debentures due September 2003, (iv) fund into a restricted cash account
amounts sufficient to refinance or replace with cash collateral certain surety
bonds and letters of credit and (v) pay fees and expenses.
Sources (1) Uses (1)
($ in millions)
Revolving credit facility (2) ........... $ 17.4 Terminate existing accounts receivable
Term loan ............................... 244.9 securitization facility ......................... $ 65.0
Notes ................................... 350.6 Repay existing revolving credit facility .......... 136.1
Debt reserve account .............................. 260.0
Restricted cash account ........................... 130.8
Fees and expenses ................................. 21.0
-------- ---------
Total ................................... $ 612.9 Total ............................................. $ 612.9
======== =========
________________
(1) As of October 21, 2002.
(2) $250.0 million in aggregate commitments. Our revolving credit facility
is available for general corporate purposes. See "Description of Other
Indebtedness--Credit Facilities."
25
CAPITALIZATION
The following table sets forth our capitalization as of December 31,
2002. The information set forth below should be read in conjunction with
"Selected Consolidated Financial Data" included elsewhere in this prospectus and
with our consolidated financial statements and related notes incorporated by
reference herein.
December 31, 2002
----------------
($ in millions)
Cash and cash equivalents................................................................ $ 89.6
Restricted cash.......................................................................... 274.6
--------
Total.............................................................................. $ 364.2
========
Foreign credit lines..................................................................... $ 64.3
Credit Agreement
Revolving credit facility (1)...................................................... --
Term loan.......................................................................... 245.1
6.375% debentures due September 2003..................................................... 143.3
Medium-term notes, 6.53% to 7.32%, due 2003 to 2008...................................... 197.5
Outstanding notes........................................................................ 350.7
7.75% debentures due July 2011........................................................... 45.2
Pollution control and industrial revenue bonds, 1.5% to 7.1% due 2003 through 2032....... 220.9
--------
Total consolidated debt............................................................ 1,267.0
Total consolidated stockholders' equity............................................ 406.0
--------
Total consolidated capitalization.................................................. $1,673.0
========
________________
(1) $250.0 million in aggregate commitments.
26
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial and other data presented below for, and
as of the end of, each of the years in the five-year period ended December 31,
2002, are derived from our consolidated financial statements, which have been
audited by KPMG LLP, independent auditors. The consolidated financial statements
as of December 31, 2002 and 2001, and for each of the years in the three-year
period ended December 31, 2002, and the report thereon, are included in our
Annual Report on Form 10-K for the year ended December 31, 2002, which is
incorporated herein by reference. The selected consolidated financial data
should be read in conjunction with our consolidated financial statements for the
year ended December 31, 2002, the related notes, and the independent auditors'
report, which refers to the adoption of Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets" on January 1, 2002 and
Statement of Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities" on January 1, 2001, included in our Annual
Report on Form 10-K.
Years Ended December 31
------------------------------------------------
2002 2001 2000(2) 1999(3) 1998
-------- -------- -------- -------- --------
(In Millions, Except Per Share Data and Ratios)
Income Statement Data (1):
Revenue.......................................................................... $1,852.9 $1,943.0 $2,050.3 $2,320.5 $2,356.9
Cost of sales and services....................................................... 1,359.9 1,417.3 1,469.4 1,695.6 1,741.8
Selling, general and administrative expenses..................................... 224.1 243.3 231.3 273.0 274.9
Research and development expenses................................................ 82.0 99.8 97.8 100.6 107.0
Gains on divestitures of businesses.............................................. -- -- -- (55.5) --
Asset impairments................................................................ -- 323.1 10.1 23.1 --
Restructuring and other charges.................................................. 30.1 280.4 35.2 11.1 --
-------- -------- -------- -------- --------
Total costs and expenses......................................................... 1,696.1 2,363.9 1,843.8 2,047.9 2,123.7
Income (loss) from continuing operations before equity in earnings of affiliates,
minority interests, interest expense, net, income taxes and cumulative effect of
change in accounting principle.................................................. 156.8 (420.9) 206.5 272.6 233.2
Equity in earnings of affiliates................................................. (4.7) (8.6) (18.5) (4.0) (3.1)
Minority interests............................................................... 3.4 2.3 4.6 5.1 6.2
Interest expense, net............................................................ 71.6 58.3 61.8 76.4 75.3
-------- -------- -------- -------- --------
Income (loss) from continuing operations before income taxes and cumulative
effect of change in accounting principle........................................ 86.5 (472.9) 158.6 195.1 154.8
Provision (benefit) for income taxes............................................. 17.4 (166.6) 33.0 36.4 37.7
-------- -------- -------- -------- --------
Income (loss) from continuing operations before cumulative effect of change in
accounting principle............................................................ 69.1 (306.3) 125.6 158.7 117.1
Discontinued operations, net of income taxes (4)................................. (3.3) (30.5) (15.0) 53.9 25.5
Cumulative effect of change in accounting principle, net of income taxes......... -- (0.9) -- -- (36.1)
-------- -------- -------- -------- --------
Net income (loss)................................................................ $ 65.8 $ (337.7) $ 110.6 $ 212.6 $ 106.5
======== ======== ======== ======== ========
Balance Sheet Data (5):
Total assets..................................................................... $2,872.0 $2,477.2
Long-term debt................................................................... $1,202.7 $ 787.0
Other Data:
Ratio of earnings to fixed charges (6)........................................... 2.0x -- 2.7x 3.1x 2.7x
27
___________________________
(1) In 2001 we spun off Technologies. This business has been accounted for as a
discontinued business. Accordingly, the consolidated statements of income
for the years ended December 31, 2001, 2000, 1999 and 1998 have been
reclassified to reflect Technologies as a discontinued operation.
(2) Effective April 1, 2000, we and Solutia Inc. formed Astaris, LLC, a joint
venture that includes the North American and Brazilian phosphorus chemicals
operations of both companies. We have accounted for our investment in
Astaris under the equity method. Prior to the formation of Astaris, revenue
from our phosphorus chemicals business was $327.0 million for the year
ended December 31, 1999 and $79.2 million for the three months ended March
31, 2000.
(3) In 1999, we completed the following transactions relating to our Specialty
Chemicals segment: (i) sold our Bioproducts business which had 1999 revenue
of $13.3 million; (ii) sold our process additives business which had 1999
revenue of $98.5 million; and (iii) acquired the assets of Pronova
Biopolymer AS. Additionally, in 1999 we acquired the assets of Tg Soda Ash,
Inc., which are now included in our Industrial Chemicals segment.
(4) Discontinued operations, net of income taxes includes the following items
related to our discontinued businesses: gains and losses, increased
estimates of our liabilities for general liability, workers' compensation,
postretirement benefit obligations, legal defense, property maintenance and
other costs, losses for the settlement of litigation and increases in
environmental reserves.
(5) Balance sheet data is not presented for periods prior to December 31, 2001
because these balance sheets would not be comparable due to the spin-off of
Technologies that became effective on December 31, 2001.
(6) In calculating this ratio, earnings consist of income (loss) from
continuing operations before income taxes and cumulative effect of change
in accounting principle less minority interests, less interest expense,
net, less amortization expense related to debt discounts, fees and
expenses, less amortization of capitalized interest, less interest included
in rental expenses (assumed to be one third of rent) and plus undistributed
earnings of affiliates. Fixed charges consist of interest expense, net,
amortization of debt discounts, fees and expenses, interest capitalized as
part of fixed assets and interest included in rental expenses. For the year
ended December 31, 2001 earnings did not cover fixed charges, with
deficiencies of $331.4 million. The ratio of earnings to fixed charges
would have been a negative 5.4x at December 31, 2001.
28
DESCRIPTION OF OTHER INDEBTEDNESS
Credit Facilities
On October 21, 2002, we entered into our Credit Facilities.
The Credit Agreement provides for up to $500.0 million in borrowings.
Of this amount, FMC borrowed $250.0 million in a single draw term loan on the
closing date of the Credit Facilities. Each quarter, 0.25% of the original
principal amount of the term loan will be due with the balance maturing five
years from the issue date. The Credit Agreement also provides for a $250.0
million revolving credit facility maturing in three years. Up to $50.0 million
of the revolving credit facility is available for the issuance of letters of
credit on our behalf. The Credit Agreement provides that, at the request of the
Company and subject to the availability of additional commitments thereunder,
the aggregate commitment under the revolving credit facility can be increased by
up to $90.0 million to a total of $340.0 million. To the extent the commitments
under the revolving credit facility are increased to an amount in excess of
$300.0 million, such excess shall be used to reduce the Letter of Credit
Facility.
The Letter of Credit Facility provides up to $40.0 million for the
issuance of standby letters of credit. We intend to use letters of credit issued
under the Letter of Credit Facility to support our obligations with respect to
environmental remediation and other obligations for which standby letters of
credit are required.
Guarantees; Security
Our obligations under the Credit Facilities are guaranteed by each of
our existing and subsequently acquired direct and indirect wholly-owned domestic
subsidiaries, subject to certain exceptions for subsidiaries that are
insignificant to our operations.
Our obligations under the Credit Facilities (and other obligations
referred to in the last sentence of this paragraph) are secured on a
first-priority basis (other than as described below) by substantially all of the
domestic tangible and intangible assets of FMC and our domestic wholly-owned
subsidiaries, including a pledge of 100% of the stock of domestic subsidiaries
and at least 65% of the stock of first-tier foreign subsidiaries and amounts
held in the debt reserve account and the restricted cash account referred to
under "Use of Proceeds." The first-priority liens on our Principal Properties
(as defined under "Description of the Notes--Security") and our 87.5% interest
in FMC Wyoming secures an aggregate amount of indebtedness not to exceed 10% of
Consolidated Net Tangible Assets (as defined under "Description of the
Notes--Certain Definitions") from time to time. The full amount of the Credit
Facilities are also secured on a second-priority basis by our Principal
Properties and our interest in FMC Wyoming, with such security interest shared
on an equal and ratable basis with outstanding indebtedness under our Existing
Indentures (as defined under "Description of the Notes--Certain Definitions")
and the notes and junior only in priority to the first-priority security
interests described above. The Credit Facilities are secured equally and ratably
with our indebtedness under the foreign lines of credit and our obligations
under our support agreement relating to Astaris.
Interest; Fees
Borrowings under the Credit Agreement bear interest at a floating rate,
which is, at our option, either a base rate or a LIBO rate, in each case plus an
applicable margin. The base rate is Citibank's alternate base rate. The
applicable margin for the term loan is 3.75% per annum over the base rate and
4.75% per annum over the LIBO rate. The initial applicable margin for borrowings
under the revolving credit facility is 2.5% per annum over the base rate and
3.5% per annum over the LIBO rate. After March 31, 2003, the applicable margins
on our revolving credit facility will be subject to adjustment based on our
leverage ratio. The interest rates under the Credit Agreement increase by 2.0%
upon and during the continuation of an event of default.
Under the Credit Agreement, we are required to pay a commitment fee on
the difference between the total amount of the revolving credit facility and the
amount borrowed by us, or for which letters of credit were issued on our behalf,
under that facility. The initial commitment fee is initially 0.50% per annum.
The commitment fee is subject to adjustment based on our leverage ratio.
29
We pay fees under the Letter of Credit Facility on the face amount of
the letters of credit issued thereunder at a per annum rate equal to the
applicable margin for LIBO loans under the revolving credit facility plus 0.25%.
We also pay a commitment fee on the unused portion of the Letter of Credit
Facility at the same rate applicable to our revolving credit facility.
Prepayments
Voluntary prepayments of any principal amounts outstanding under the
Credit Agreement, and voluntary reductions of the unutilized portion of the
revolving credit facility, are permitted at any time without fee (other than
breakage costs) upon the proper notice and subject to minimum dollar amounts.
The Credit Agreement requires us to prepay any principal amounts
outstanding, subject to certain exceptions to be agreed upon, with cash proceeds
from asset sales, casualty event and condemnation proceeds, equity issuances and
excess cash flow.
Covenants
The Credit Facilities require us to meet certain financial tests,
including, but not limited to, maximum leverage and minimum interest coverage
ratios and minimum net worth. In addition, the Credit Facilities contain certain
covenants which, among other things, will limit capital expenditures,
indebtedness, guarantees, liens, investments, asset sales, dividends, restricted
payments, acquisitions, mergers and consolidations, change of business,
transactions with affiliates, prepayments, repurchases and redemptions of
certain other indebtedness, and other matters customarily restricted in such
agreements, subject to customary carveouts and exceptions.
Events of Default
The Credit Facilities contain events of default, including, but not
limited to, payment defaults, breaches of representations and warranties,
covenant defaults, cross default and cross acceleration to certain other
agreements or indebtedness, certain events of bankruptcy and insolvency,
judgment defaults, invalidity of security interests supporting the Credit
Facilities, the existence of certain adverse employee benefit or environmental
liabilities and a change of control of FMC. Certain of the events of default are
subject to exceptions, materiality qualifiers and threshold amounts.
Debentures
At December 31, 2002, we had outstanding $188.9 million aggregate
principal amount of debentures issued in two series. The 6.375% debentures have
an aggregate principal amount of $143.4 million outstanding, pay interest
semiannually at 6.375% per annum and mature on September 1, 2003. The 7.75%
debentures have an aggregate principal amount of $45.5 million outstanding, pay
interest semiannually at 7.75% and mature on July 1, 2011.
We may not redeem the 6.375% debentures prior to their maturity. The
7.75% debentures are redeemable at our option at any time prior to their
maturity at a redemption price equal to the greater of 100% of the outstanding
principal amount and the aggregate present value of all remaining scheduled
payments of principal and interest discounted to the redemption date.
The 6.375% debentures were issued under an indenture dated as of April
1, 1992 and the 7.75% debentures were issued under an indenture dated as of July
1, 1996. Other than as set forth above, the material terms of the senior debt
securities are identical.
These debentures are secured equally and ratably with the notes. The
indentures do not limit the amount of other indebtedness or securities that may
be issued by us or our subsidiaries, except as set forth below. The indentures
prohibit us or our restricted subsidiaries from securing any indebtedness with
any assets of our principal properties without providing that the senior debt
securities shall be secured equally and ratably with such secured indebtedness
except to the extent that such secured indebtedness does not exceed 10% of our
consolidated net tangible assets. The indentures also contain certain enumerated
exceptions to this prohibition. A principal property is
30
any manufacturing or processing plant or any mineral producing property located
in the United States or Canada owned by us or that we subsequently acquire and
whose gross book value exceeds 1% of our consolidated net tangible assets as of
the date of the determination, subject to certain exceptions. Consolidated net
tangible assets is the aggregate net book value of all assets excluding goodwill
and other intangible assets less current liabilities. The indentures also
contain prohibitions against sale-leaseback transactions related to our
principal properties with terms that are similar to the above lien limitation.
Under the indentures, we may consolidate or merge with, or sell or
otherwise convey substantially all of our assets, if we are the continuing
corporation in such transaction or if our successor is a domestic corporation
that expressly assumes all obligations related to the senior debt securities,
provided that we or our successor are not in material default under the
indentures.
Medium-Term Notes
As of December 31, 2002, we had outstanding $197.5 million in aggregate
principal amount of senior notes issued pursuant to our medium-term note
programs. The maturity, interest rate and amount outstanding as of December 31,
2002 were as follows:
Principal
Maturity Rate Outstanding
- -------- ---- -----------
December 22, 2003 .............................. 6.53% 20,000,000
May 5, 2005 .................................... 6.75% 60,000,000
February 5, 2007 ............................... 7.32% 40,000,000
May 15, 2008 ................................... 7.00% 77,500,000
We may not redeem the medium-term notes prior to their scheduled
maturity. Interest accrues semiannually.
The medium-term notes are secured equally and ratably with the notes.
The medium-term notes were issued under the same indenture under which we issued
our 7.75% debentures and, therefore, are subject to the same restrictions
related to secured indebtedness, sale-leaseback transactions and business
combinations that apply to the 7.75% debentures as described above.
Pollution Control and Industrial Revenue Bonds
From time to time, we have borrowed from municipalities and counties in
connection with capital projects pursuant to pollution control and industrial
revenue bond arrangements. At December 31, 2002, we had outstanding borrowings
of $220.9 million in aggregate principal amount under these arrangements. Of our
total industrial revenue bond obligations, $176.9 million is in the form of
fixed rate indebtedness with annual interest rates ranging from 5.625% to
7.050%. The remaining $44.0 million is in the form of floating rate indebtedness
with annual interest rates ranging from 1.500% to 3.200% as of December 31,
2002. A schedule of maturities for our industrial revenue bond obligations as of
December 31, 2002 is as follows:
Maturity Principal Amount
- -------- ----------------
Within 1 year ................................. $ 1,885,000
1 to 5 years .................................. 14,665,000
6 to 10 years ................................. 22,665,000
11 to 15 years ................................ 36,470,000
Over 15 years ................................. 145,230,000
The underlying bonds have varying redemption terms. The floating rate
bonds contain provisions requiring that we repurchase the bonds upon tender by
the holders.
Substantially all of our fixed rate industrial revenue bond
indebtedness is unsecured. The majority of our floating rate industrial revenue
bond obligations are supported by letters of credit issued by banks. Generally,
the letters of credit have a term of 13 months and are automatically extended
each month unless a notice of non-renewal
31
is received. Our reimbursement obligations with respect to these letters of
credit are unsecured, but using the proceeds of the outstanding notes and the
Credit Agreement, we cash collateralized our reimbursement obligations
thereunder.
Generally, other than payment of principal and interest, our only
obligations pursuant to the industrial revenue bond arrangements are to keep the
capital projects that have been financed with the bonds in good repair and to
comply with certain reporting requirements.
Foreign Subsidiary Indebtedness
Certain of our foreign subsidiaries have lines of credit with foreign
banks to support local cash flow requirements. Generally, these obligations are
unsecured obligations and are guaranteed by FMC. As of December 31, 2002, the
outstanding balance under these foreign lines of credit was $64.3 million. In
addition, in certain countries, we and our subsidiaries provide guarantees to
financial institutions of indebtedness of certain of our customers incurred in
connection with purchase of our products and the importation of third party
agricultural products. Our guarantees of indebtedness of our foreign
subsidiaries and such customers will be equally and ratably secured with
obligations under the Credit Facilities.
Astaris Support Agreement
In connection with our Astaris joint venture, we have entered into an
agreement with Astaris' lenders to make equity contributions to the joint
venture if it fails to meet quarterly earnings benchmarks. The amount of our
obligation is equal to one half of any such earnings deficit. Solutia, our joint
venture partner, has agreed to fund the other half of any shortfall. Astaris did
not meet its earnings benchmark in 2001 and, as a result, we contributed $31.3
million to Astaris in 2001 and $29.6 million in 2002 under this arrangement. We
expect our payments in 2003 to be between $35 million and $50 million. Our
proportional amount of Astaris' indebtedness subject to this commitment at
December 31, 2002 was approximately $84 million. Our obligation to make equity
contributions to Astaris under this agreement is secured equally and ratably
with our obligations under the Credit Facilities.
32
DESCRIPTION OF THE NOTES
The outstanding notes were, and the new notes will be, issued under an
indenture dated as of October 21, 2002 (the "Indenture"), between FMC
Corporation, the Subsidiary Guarantors and Wachovia Bank, National Association,
as trustee. The following is a summary of the material terms and provisions of
the notes, the Subsidiary Guarantees, the Indenture and the Security Documents.
The terms of the notes include those set forth in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), as in effect on the date of the Indenture.
The notes are subject to all such terms, and prospective purchasers of the notes
are referred to the Indenture and the Trust Indenture Act for a statement of
such terms. The Security Documents referred to below under "Security" describe
the security interests that secure the notes.
Definitions of certain terms are set forth under "Certain Definitions"
and throughout this description. For the purposes of this "Description of the
Notes," the "Company" means FMC Corporation and not any of its Subsidiaries.
Capitalized terms that are used but not otherwise defined herein have
the meanings assigned to them in the Indenture, and those definitions are
incorporated herein by reference.
General
The notes will mature on November 1, 2009 and bear interest at the rate
of interest per annum indicated on the cover page of this prospectus. Interest
on the notes issued in this offering accrues from October 21, 2002, and is
payable semiannually in arrears on May 1 and November 1 of each year, commencing
May 1, 2003. We will make each interest payment to the holders of record of the
notes at the close of business on the April 15 or October 15 preceding such
interest payment date. Interest is computed on the basis of a 360-day year of
twelve 30-day months.
Principal and interest is payable at the office or agency of FMC
maintained for that purpose, which initially is the office of the Trustee in The
City of New York; provided that all payments with respect to Global Notes, the
holders of which have given wire transfer instructions on or prior to the
relevant record date, are required to be made by wire transfer of immediately
available funds and, at the option of FMC, payment of interest on notes not in
global form may be made by check mailed to the address of the Person entitled
thereto as it appears in the register of the notes maintained by the Registrar.
Initially, the Trustee also acts as Paying Agent and Registrar for the notes.
Additional Notes
Subject to the covenants described below, FMC may issue additional
notes ("Additional Notes") under the Indenture having the same terms in all
respects as the notes (or in all respects except for the payment of interest
scheduled and paid prior to the date of issuance of the notes). The notes and
any Additional Notes would be treated as a single class for all purposes under
the Indenture. Unless the context otherwise requires, references to the notes
include the Additional Notes.
Ranking
The notes are secured obligations (on a second priority basis) of FMC
and rank pari passu in right of payment with all unsubordinated Indebtedness of
FMC and senior in right of payment to all future Indebtedness of FMC that by its
terms is expressly junior or subordinated in right of payment to the notes.
The Subsidiary Guarantees
The notes are guaranteed (the "Subsidiary Guarantees") by each domestic
Subsidiary of FMC that guarantees FMC's obligations under the Credit Agreement
(the "Subsidiary Guarantors"). The Indenture also requires that each existing
and future Restricted Subsidiary that guarantees any other Indebtedness of FMC
be a Subsidiary Guarantor. FMC is permitted to cause any Unrestricted Subsidiary
to be a Subsidiary Guarantor.
33
Each of the Subsidiary Guarantors unconditionally guarantee, on a joint
and several basis, all of FMC's obligations under the notes, including its
obligations to pay principal, interest, premium, if any, with respect to the
notes. The Subsidiary Guarantees are general unsecured obligations of the
Subsidiary Guarantors and rank pari passu with all existing and future
Indebtedness of the Subsidiary Guarantors that is not, by its terms, expressly
subordinated in right of payment to the Subsidiary Guarantees. The obligations
of each Subsidiary Guarantor are limited to the maximum amount which, after
giving effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
its contribution obligations under the Indenture, would result in the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. Each Subsidiary Guarantor that makes a payment or distribution under
a Subsidiary Guarantee shall be entitled to a contribution from each other
Subsidiary Guarantor in an amount pro rata, based on the net assets of each
Subsidiary Guarantor determined in accordance with GAAP. Except as provided in
"Repurchase at Option of Holders--Asset Sales," FMC will not be restricted from
selling or otherwise disposing of any of the Subsidiary Guarantors.
A sale of assets or Capital Stock of a Subsidiary Guarantor or
Restricted Subsidiary may constitute an Asset Sale subject to the provisions
contained under "Repurchase at Option of Holders--Asset Sales," and a
consolidation, merger or sale of all or substantially all of the assets of a
Subsidiary Guarantor must also comply with the provisions described under
"Consolidation, Merger and Sale of Assets."
The Indenture provides that:
(i) in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all the Capital Stock of any
Subsidiary Guarantor to any person that is not an Affiliate of FMC,
such Subsidiary Guarantor will be released and relieved of any
obligations under its Subsidiary Guarantee; provided that the Net
Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of the Indenture. See "Repurchase at
Option of Holders--Asset Sales";
(ii) upon the release or discharge of another guaranty of a
Subsidiary Guarantor that resulted in the creation of the Subsidiary
Guarantee of such Subsidiary Guarantor, such Subsidiary Guarantor will
be released and relieved of any obligations under its Subsidiary
Guarantee; and
(iii) upon the designation of any Subsidiary Guarantor as an
Unrestricted Subsidiary in accordance with the terms of the Indenture,
such Subsidiary Guarantor will be released and relieved of any
obligations under its Subsidiary Guarantee.
Security
Security Documents
Pursuant to the Security Documents, the notes are secured by a
second-priority lien, which is shared with the holders of the Bank Obligations
and the holders of Indebtedness under the Existing Notes Indentures (as defined)
(such Indebtedness and the Bank Obligations are collectively referred to as the
"Other Secured Obligations"; the Trustee and the holders of the notes and the
holders of the Other Secured Obligations are collectively referred to as the
"Secured Parties") on the Pledged Stock and the Pledged Principal Properties
(collectively, the "Collateral"). The aggregate principal amount of Other
Secured Obligations outstanding as of December 31, 2002, excluding obligations
under the Astaris Support Agreement, would have been approximately $701 million.
FMC contributed $31.3 million to Astaris under the Astaris Support Agreement in
2001, $29.6 million in 2002 and anticipates that in 2003 it will contribute
between $35 million and $50 million.
"Bank Obligations" means, without duplication, the Obligations of FMC
and the Restricted Subsidiaries under the Credit Agreement, the Astaris Support
Agreement and Hedging Obligations in respect of the Credit Agreement, and the
Obligations of Foreign Subsidiaries (and FMC's Guarantee thereof) in respect of
Permitted Foreign Indebtedness.
"Pledged Principal Properties" means all FMC's right, title and
interest in the Principal Properties.
34
"Pledged Stock" means all FMC's right, title and interest in (i) the
Capital Stock of FMC Wyoming Corporation and (ii) the Capital Stock of any other
Subsidiary at any time owning a Principal Property.
"Principal Property" means any manufacturing or processing plant or
facility (other than any pollution control facility) or any mineral producing
property which is located within the continental United States of America and is
owned by FMC or any Subsidiary of FMC, whether owned at or acquired after the
date hereof, the gross book value on the books of FMC or such Subsidiary
(without deduction of any depreciation reserve) of which on the date as of which
the determination is being made exceeds 1% of the Consolidated Net Tangible
Assets, except (i) any such property, plant or facility which the Board of
Directors by resolution declares is not of material importance to the total
business conducted by FMC and its Restricted Subsidiaries as an entirety, (ii)
any portion of such property, plant or facility which the Board of Directors by
resolution declares is not of material importance to the total business
conducted by FMC and its Restricted Subsidiaries as an entirety or (iii) any
such property, plant or facility which is financed by industrial development
bonds which are tax exempt pursuant to Section 103 of the United States Internal
Revenue Code of 1986, as amended (or which receive similar tax treatment under
any subsequent amendments thereto or successor laws thereof).
The holders of the Bank Obligations also have the benefit of a
first-priority lien on the Collateral that is limited in amount to Bank
Obligations totaling 10% of our Consolidated Net Tangible Assets (the "First
Lien Amount"). After giving pro forma effect to the application of the net
proceeds of this offering and the application of borrowings under the Credit
Agreement as described under "Use of Proceeds," the First Lien Amount as of
December 31, 2002 would have been approximately $186 million. The dollar amount
equaling the First Lien Amount may be further increased from time to time as our
Consolidated Net Tangible Assets grow. In addition, the Bank Obligations are
secured by liens on substantially all the other assets of FMC and its
wholly-owned domestic subsidiaries, except that the lien on Capital Stock of
foreign subsidiaries is, in certain cases, limited to 65% of the Capital Stock
of "first tier" foreign subsidiaries. See "Description of Other
Indebtedness--Credit Facilities."
The Liens securing the notes on any or all of the Collateral will be
released when the second-priority liens on such Collateral securing the Bank
Obligations have been permanently released, including in connection with asset
sales not prohibited by the Indenture or upon payment in full of the Bank
Obligations.
The Collateral securing the notes will also be released upon (1)
payment in full of the principal of, accrued and unpaid interest on the notes
and the Subsidiary Guarantees that are due and payable at or prior to the time
such principal, accrued and unpaid interest are paid and (2) a defeasance and
discharge of the Indenture as described under "Defeasance and Discharge."
No appraisals of any of the Collateral were prepared by or on behalf of
FMC in connection with the offering of the outstanding notes. There can be no
assurance that the proceeds from the sale of the Collateral in whole or in part
following a Default or Event of Default would be sufficient to satisfy payments
due on the notes. By its nature, some or all of the Collateral will be illiquid
and may have no readily ascertainable market value. Accordingly, there can be no
assurance that the Collateral can be sold in a short period of time, if ever.
The Collateral securing the notes is subject to any and all exceptions,
defects, encumbrances, liens and other imperfections as may be accepted by the
holders of the Bank Obligations from time to time to the extent the effect
thereof is identical for all Secured Parties other than the interests and rights
of the Secured Parties having the First Lien Amount. In addition, the holders of
the Bank Obligations control the enforcement of waiver of all covenants and
undertakings in the Security Documents, and the noteholders have no right to
consent to any term thereof or amend or waive any term thereof to the extent the
effect thereof is identical for all Secured Parties other than the interests and
rights of the Secured Parties having the First Lien Amount.
To the extent that third parties enjoy Liens permitted by the Security
Documents and the Indenture, such third parties have rights and remedies with
respect to the assets subject to such Liens that, if exercised, could adversely
affect the value of the Collateral or the ability of the Collateral Trustee,
acting on behalf of the Secured Parties, to realize or foreclose on the
Collateral. In addition, the ability of the Collateral Trustee, acting on behalf
of the Secured Parties, to realize upon the collateral may be subject to certain
bankruptcy law limitations in the event of a bankruptcy. See "--Certain
Bankruptcy Limitations."
35
Collateral Trust Agreement
FMC, the administrative agent under the Credit Agreement (who is also
the representative of the other Bank Obligations), the Trustee on behalf of the
holders of the notes and the trustees under the Existing Notes Indentures and
the collateral trustee (the "Collateral Trustee") entered into the collateral
trust agreement (the "Collateral Trust Agreement") on October 21, 2002.
Pursuant to the terms of the Collateral Trust Agreement, the Collateral
Trustee was appointed as collateral agent for each of the Secured Parties and
holds the liens and security interests in the Collateral granted pursuant to the
Security Documents with sole authority to exercise remedies under the Security
Documents. The Collateral Trustee agreed to act as mortgagee under all
mortgages, beneficiary under all deeds of trust and as secured party under the
applicable security agreements, to follow the instructions provided to it under
the Collateral Trust Agreement and to carry out certain other duties.
Pursuant to the Collateral Trust Agreement, the second-priority Liens
securing the notes and the Other Secured Obligations will be expressly junior to
the liens securing the First Lien Amount on the Collateral. In addition, under
the Collateral Trust Agreement, the Liens securing the notes and the Other
Secured Obligations may not be enforced by the holders of the notes, except for
certain limited exceptions involving payment or bankruptcy events of default
under the Indenture or the Existing Notes Indentures (each a "Triggering
Event"). Amendments or waivers by the holders of the Bank Obligations shall also
be effective as to the Liens securing the notes, but no amendment or waiver of
certain provisions of the Security Documents that is adverse to the holders of
the notes may be made without the consent of the Collateral Trustee. Except for
any time on and after the occurrence of a Triggering Event, the holders of the
Bank Obligations will control the disposition of the Collateral and will receive
any proceeds from sales of the Collateral (even from and after the time when
proceeds in excess of the First Lien Amount are generated from such sales) until
the Bank Obligations are repaid in full. If a Triggering Event has occurred and
is continuing the actions of the Collateral Trustee will be directed by holders
of at least a majority in principal amount of the notes and the Other Secured
Obligations, and all proceeds of the Collateral in excess of the First Lien
Amount will be equally and ratably shared among all holders of the notes and the
Other Secured Obligations.
Certain Bankruptcy Limitations
The right of the Collateral Trustee to repossess and dispose of, or
otherwise exercise remedies in respect of, the Collateral upon the occurrence of
an Event of Default is likely to be significantly impaired by applicable
bankruptcy law if a bankruptcy proceeding were to be commenced by or against FMC
prior to the Collateral Trustee having repossessed and disposed of, or otherwise
exercised remedies in respect of, the Collateral. Under the United States
Bankruptcy Code, a secured creditor such as the Collateral Trustee is prohibited
from repossessing its security from a debtor in a bankruptcy case, or from
disposing of security repossessed from such debtor, without bankruptcy court
approval. Moreover, the United States Bankruptcy Code permits the debtor to
continue to retain and to use collateral even though the debtor is in default
under the applicable debt instruments, provided that the secured creditor is
given "adequate protection." The meaning of the term "adequate protection" may
vary according to circumstances, but it is intended in general to protect the
value of the secured creditor's interest in the collateral and may include cash
payments or the granting of additional security, if and at such times as the
court in its discretion determines, for any diminution in the value of the
collateral as a result of the stay of repossession or disposition or any use of
the collateral by the debtor during the pendency of the bankruptcy case. In view
of the lack of a precise definition of the term "adequate protection" and the
broad discretionary powers of a bankruptcy court, it is impossible to predict
how long payments with respect to the notes could be delayed following
commencement of a bankruptcy case, whether or when the Collateral Trustee could
repossess or dispose of the Collateral or whether or to what extent holders of
the notes would be compensated for any delay in payment or loss of value of the
Collateral.
36
Optional Redemption
At any time on or prior to November 1, 2006, the notes are redeemable,
in whole at any time or in part from time to time, at the option of FMC, at a
redemption price equal to the sum of:
. 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the redemption date, plus
. the Make Whole Amount.
"Make Whole Amount" means, with respect to any note at any redemption
date, the greater of (i) 1.0% of principal amount of such note and (ii) the
excess, if any, of (A) an amount equal to the present value of (1) the
redemption price of such note at November 1, 2006 plus (2) the remaining
scheduled interest payments on the notes to be redeemed (subject to the right of
holders on the relevant record date to receive interest due on the relevant
interest payment date) to November 1, 2006 (other than interest accrued to the
redemption date), computed using a discount rate equal to the Treasury Rate plus
50 basis points over (B) the principal amount of the notes being redeemed.
"Treasury Rate" means, at the time of computation, the yield to
maturity of United States Treasury Securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the redemption date or, if such Statistical Release is no longer published,
any publicly available source of similar market data) most nearly equal to the
period from the redemption date to November 1, 2006; provided, however, that if
the period from the redemption date to November 1, 2006 is not equal to the
constant maturity of a United States Treasury Security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury Securities for which such yields are
given, except that if the period from the redemption date to November 1, 2006 is
less than one year, the weekly average yield on actually traded United States
Treasury Securities adjusted to a constant maturity of one year shall be used.
In addition, the notes are redeemable at the option of FMC, in whole or
in part, at any time after November 1, 2006, at the redemption prices (expressed
as a percentage of principal amount) set forth below, plus accrued and unpaid
interest thereon, if any, to the redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the twelve-month period
beginning on November 1 of the years indicated below:
Year Redemption Price
---- ----------------
2006........................................... 105.125%
2007........................................... 102.563%
2008 and thereafter............................ 100.000%
Notwithstanding the foregoing, at any time on or prior to November 1,
2005, FMC may at its option on any one or more occasions redeem notes (including
Additional Notes, if any) in an aggregate principal amount not to exceed 35% of
the aggregate principal amount of notes (including Additional Notes, if any)
issued under the Indenture at a redemption price of 110.25% of the principal
amount, plus accrued and unpaid interest, if any, to the redemption date, with
the net cash proceeds of one or more Public Equity Offerings; provided that:
(1) at least 65% of the aggregate principal amount of notes
(including Additional Notes, if any) issued under the Indenture remains
outstanding immediately after the occurrence of such redemption
(excluding notes held by FMC and its Subsidiaries); and
(2) the redemption occurs within 90 days of the date of the
closing of such Public Equity Offering.
Selection and Notice
If fewer than all the notes issued under the Indenture are to be
redeemed at any time, the Trustee will select notes for redemption on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
37
provided that no notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each holder of notes to be redeemed at its
registered address. Notices of redemption may not be conditional. If any note is
to be redeemed in part only, the notice of redemption that relates to such note
shall state the portion of the principal amount thereof to be redeemed. A new
note in principal amount equal to the unredeemed portion thereof will be issued
in the name of the holder thereof upon cancellation of the original note. Notes
called for redemption become due on the date fixed for redemption. On and after
the redemption date, interest shall stop accruing on notes or portions of them
called for redemption.
Repurchase at Option of Holders
Change of Control
Upon the occurrence of a Change of Control, each holder of notes will
have the right to require FMC to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of such holder's notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, thereon to the date of purchase (the "Change of Control
Payment") on a date that is not more than 90 days after the occurrence of such
Change of Control (the "Change of Control Payment Date"). Within 30 days
following any Change of Control, FMC will mail, or at FMC's request the Trustee
will mail, a notice to each holder offering to repurchase the notes held by such
holder pursuant to the procedures specified in such notice. FMC will comply with
the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the notes as a result of a Change of Control.
On the Change of Control Payment Date, FMC will, to the extent lawful,
. accept for payment all notes or portions thereof properly
tendered and not withdrawn pursuant to the Change of Control
Offer
. deposit with the applicable Paying Agent an amount equal to
the aggregate Change of Control Payments in respect of all
notes or portions thereof so tendered, and
. deliver or cause to be delivered to the Trustee the notes so
accepted together with an Officers' Certificate stating the
aggregate principal amount of notes or portions thereof being
purchased by FMC.
The Paying Agent will promptly mail (or deliver by wire transfer) to
each holder of notes so tendered the Change of Control Payment for such notes,
and the Trustee will promptly authenticate and mail (or cause to be transferred
by book entry) to each holder a note equal in principal amount to any
unpurchased portion of the notes surrendered, if any; provided that each such
note will be in a principal amount of $1,000 or an integral multiple thereof.
A failure by FMC to comply with the provisions of the two preceding
paragraphs will constitute an Event of Default under the Indenture. Except as
described above with respect to a Change of Control, the Indenture will not
contain provisions that permit the holders of the notes to require that FMC
purchase or redeem the notes in the event of a takeover, recapitalization or
similar transaction. See "Events of Default."
There can be no assurance that FMC will have the financial resources to
purchase the notes, particularly if a Change of Control triggers a similar
repurchase requirement for, or results in the acceleration of, other
Indebtedness. The Credit Agreement will provide that certain events constituting
a Change of Control could result in the acceleration of the maturity of the
Credit Agreement. Future Indebtedness of FMC might contain similar provisions.
If a Change of Control occurs, FMC could try to refinance the Credit Agreement
and any such future Indebtedness. Accordingly, FMC might not be able to fulfill
its obligation to repurchase any notes if a Change of Control occurs. See "Risk
Factors--Risks Relating to the Notes and our Other Indebtedness and
Obligations--We may not have the ability to finance an offer to purchase
requirement under the change of control provision of the indenture."
FMC will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer at the same
or a higher purchase price, at the same times and otherwise in
38
substantial compliance with the requirements applicable to a Change of Control
Offer otherwise required to be made by FMC and purchases all notes validly
tendered and not withdrawn under such Change of Control Offer.
"Change of Control" means the occurrence of any of the following:
(1) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of securities representing 50% or
more of the voting power of all Capital Stock of FMC; or
(2) Continuing Directors shall cease to constitute at least a
majority of the directors constituting the Board of Directors; or
(3) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of FMC
and its Restricted Subsidiaries taken as a whole to any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act); or
(4) FMC consolidates with, or merges with or into, any Person,
or any Person consolidates with, or merges with or into, FMC, in any
such event pursuant to a transaction in which any of the outstanding
Capital Stock of FMC is converted into or exchanged for cash,
securities or other property, other than any such transaction where the
Capital Stock of FMC outstanding immediately prior to such transaction
is converted into or exchanged for Capital Stock (other than
Disqualified Stock) of the surviving or transferee Person representing
at least a majority of the voting power of all Capital Stock of such
surviving or transferee Person immediately after giving effect to such
issuance; or
(5) the adoption by the stockholders of FMC of a plan or
proposal for the liquidation or dissolution of FMC.
The phrase "all or substantially all" the assets of FMC will likely be
interpreted under applicable state law and will be dependent upon particular
facts and circumstances. As a result, there may be a degree of uncertainty in
ascertaining whether a sale or transfer of "all or substantially all" the assets
of FMC has occurred, in which case a holder's ability to obtain the benefit of a
Change of Control Offer may be impaired.
Asset Sales
FMC will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless:
(i) FMC and/or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to
the fair market value (as conclusively evidenced by an Officers'
Certificate delivered to the Trustee, or, if such Asset Sale involves
aggregate consideration in excess of $20.0 million, a resolution of the
Board of Directors that is set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Capital Stock issued or sold
or otherwise disposed of,
(ii) at least 75% of the consideration therefor received by
FMC and/or such Restricted Subsidiary is in the form of cash or Cash
Equivalents, and
(iii) if such Asset Sale involves Collateral, (a) it complies
with the applicable provisions of the Security Documents and (b) all
consideration received in such Asset Sale (including Additional Assets)
shall, to the extent required by the Security Documents, be expressly
made subject to the Lien under the Security Documents;
provided that the amount of (x) any liabilities (as shown on FMC's or such
Restricted Subsidiary's most recent balance sheet) of FMC or any Restricted
Subsidiary (other than Subordinated Debt) that are assumed by the transferee of
any such assets pursuant to a customary novation agreement that releases FMC or
such Restricted Subsidiary from further liability and (y) any securities, notes
or other obligations received by FMC or any such Restricted Subsidiary from such
transferee to the extent they are promptly converted or monetized by FMC or such
39
Restricted Subsidiary into cash (to the extent of the cash received), shall be
deemed to be cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, FMC or such Restricted Subsidiary may apply such Net Proceeds, at its
option:
(a) to permanently repay Bank Obligations or Indebtedness of
any Restricted Subsidiary that is not a Subsidiary Guarantor (and to
correspondingly reduce commitments with respect thereto in the case of
revolving borrowings); or
(b) to acquire Additional Assets (to the extent otherwise
permitted by the Indenture) or make a capital expenditure, in each case
in a Permitted Business (or enter into a binding commitment for any
such acquisition or expenditure so long as any such Additional Assets
are acquired or any such capital expenditure is made pursuant thereto
within 180 days of the expiration of the aforementioned 360-day
period).
Pending the final application of any such Net Proceeds, FMC may
temporarily reduce the revolving Indebtedness under the Credit Agreement or
otherwise invest such Net Proceeds in any manner that is not prohibited by the
Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the first sentence of this paragraph will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $20.0
million, FMC will be required to make an offer to all holders of notes issued
under the Indenture (an "Asset Sale Offer") to purchase the maximum principal
amount of notes and, if FMC is required to do so under the terms of any other
Indebtedness ranking pari passu with such notes, such other Indebtedness on a
pro rata basis with the notes, that may be purchased out of the Excess Proceeds,
at a purchase price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, thereon, to the date of
purchase in accordance with the procedures set out in the Indenture. To the
extent that the aggregate principal amount of notes (and any other pari passu
Indebtedness subject to such Asset Sale Offer) tendered pursuant to such Asset
Sale Offer is less than the Excess Proceeds, FMC may, subject to the other terms
of the Indenture, use any remaining Excess Proceeds for any purpose not
prohibited by the Indenture. If the aggregate principal amount of notes
surrendered by holders thereof in connection with any Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee shall select the notes to be
purchased on a pro rata basis. Upon completion of the offer to purchase made
under the Indenture, the amount of Excess Proceeds that was the subject of such
offer to purchase shall be reset at zero.
Certain Covenants
Restricted Payments
FMC will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:
(1) declare or pay any dividend or make any distribution on
account of FMC's or any of its Restricted Subsidiaries' Capital Stock,
other than (x) dividends or distributions payable in Qualified Capital
Stock of FMC and (y) dividends or distributions payable to FMC or any
Restricted Subsidiary of FMC and the other owners of Capital Stock of
such Restricted Subsidiaries to the extent of their respective interest
therein;
(2) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of FMC, other than any such Capital Stock owned by
any Restricted Subsidiaries that are Subsidiary Guarantors;
(3) make any principal payment on, or purchase, redeem,
defease or otherwise acquire or retire for value any Subordinated Debt
of FMC or any Restricted Subsidiary, other than Indebtedness owed to
FMC or any Restricted Subsidiary that is a Subsidiary Guarantor,
except, in each case, payment of interest or principal at Stated
Maturity; or
(4) make any Restricted Investment
(all such payments and other actions set forth in clauses (1) through (4) above
(other than any exception thereto) being collectively referred to as "Restricted
Payments") (the amount of any such Restricted Payment, if other than cash, shall
be the fair market value of the assets proposed to be transferred by FMC or a
Restricted Subsidiary (as
40
conclusively evidenced by a resolution of the Board of Directors)), unless, at
the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing after giving effect thereto; and
(b) FMC would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the most recently ended four full fiscal
quarters for which financial statements have been filed with the SEC
pursuant to the covenant described under "--Reports" immediately
preceding the date of such Restricted Payment, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of the
covenant described under "--Limitation on Incurrence of Additional
Indebtedness and Issuance of Preferred Stock;" and
(c) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by FMC and its Restricted
Subsidiaries on or after October 1, 2002 (excluding Restricted Payments
permitted by clause (c) or (d) of the next succeeding paragraph), is
less than the sum, without duplication, of:
(i) 50% of the Consolidated Net Income of FMC for
the period (taken as one accounting period) from October 1,
2002 to the end of FMC's most recently ended fiscal quarter
for which financial statements have been filed with the SEC
pursuant to the covenant described under "--Reports" at the
time of such Restricted Payment (or, if Consolidated Net
Income of FMC for such period is a deficit, less 100% of such
deficit), plus
(ii) 100% of the aggregate net cash proceeds
received by FMC from the issue or sale after October 1, 2002
of Qualified Capital Stock of FMC or of debt securities of FMC
or any of its Restricted Subsidiaries that have been converted
into or exchanged for such Qualified Capital Stock of FMC,
plus
(iii) to the extent that any Restricted Investment
that was made after October 1, 2002 and was included in the
calculation of aggregate Restricted Payments under this clause
(c) is sold for cash or otherwise liquidated, repaid or
otherwise reduced, including by way of dividend or
distribution (to the extent not included in calculating
Consolidated Net Income), for cash, the lesser of (A) the cash
return with respect to such Restricted Investment (less the
cost of disposition, if any) or (B) the initial amount of such
Restricted Investment, plus
(iv) an amount equal to the sum of (A) the net
reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or other
transfers of assets (to the extent not included in calculating
Consolidated Net Income), in each case, to FMC or any
Restricted Subsidiary from Unrestricted Subsidiaries and (B)
the portion (proportionate to FMC's equity interest in such
Subsidiary) of the fair market value of the net assets of an
Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case
of any Unrestricted Subsidiary, the amount of Restricted
Investments previously made after October 1, 2002 by FMC or
any Restricted Subsidiary in such Unrestricted Subsidiary that
were included in the calculation above of aggregate Restricted
Payments under this clause (c).
The foregoing provisions will not prohibit the following Restricted
Payments:
(a) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of the Indenture;
(b) the redemption, repurchase, retirement or other
acquisition of any Capital Stock of FMC, any Restricted Subsidiary or
any Joint Venture (or the acquisition of all the outstanding Capital
Stock of any Person that conducts no operations and has no assets or
liabilities other than the ownership of Capital Stock in a Joint
Venture) in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary or Joint
Venture of FMC) of, Qualified Capital Stock of FMC; provided that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or
41
other acquisition shall be excluded from (and shall not previously have
been included in) clause (c)(ii) of the preceding paragraph;
(c) the defeasance, redemption or repurchase of Subordinated
Debt with the net cash proceeds from an incurrence of Permitted
Refinancing or in exchange for, or out of the net cash proceeds from
the substantially concurrent sale (other than to a Subsidiary or Joint
Venture of FMC) of, Qualified Capital Stock of FMC; provided that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be
excluded from (and shall not previously have been included in) clause
(c)(ii) of the preceding paragraph;
(d) the repurchase, redemption or other acquisition or
retirement for value of any Capital Stock of FMC or any Subsidiary of
FMC held (i) by any member of FMC's (or any of its Subsidiaries')
management pursuant to any management equity subscription agreement or
stock option agreement and (ii) in connection with the contribution by
FMC of Capital Stock of FMC to any employee benefit plan; provided that
the aggregate price paid for all such repurchased, redeemed, acquired
or retired Capital Stock in reliance on this clause (d) shall not
exceed $5.0 million in any calendar year;
(e) payments by FMC made pursuant to the Astaris Support
Agreement as such agreement was in effect on October 21, 2002 or as
such agreement may be amended, modified, supplemented or replaced, in
whole or in part, and payments by FMC made with respect to the "Idaho
Power Termination Amount" as defined in and pursuant to the Astaris
Indemnification Agreement in an aggregate amount after October 21, 2002
not to exceed $10.4 million; provided that the aggregate amount of
payments made in reliance on this clause (e) shall in no event exceed
the maximum aggregate amount of payments required to be made by FMC
after October 21, 2002 under the Astaris Support Agreement or the
Astaris Indemnification Agreement, as the case may be, in each case as
in effect on October 21, 2002;
(f) repurchases of Capital Stock of FMC deemed to occur upon
the exercise of stock options to the extent that such repurchases
represent payment of the exercise price or the withholding of
applicable taxes; and
(g) additional Restricted Payments in an aggregate amount not
to exceed $25.0 million.
If FMC or any Restricted Subsidiary of FMC sells or otherwise disposes
of any Capital Stock of any direct or indirect Restricted Subsidiary of FMC such
that, after giving effect to any such sale or disposition, such Person is no
longer a Restricted Subsidiary of FMC, FMC shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Capital Stock of such Restricted Subsidiary not sold or disposed of
in an amount determined as provided in the first paragraph of this covenant.
Prior to the first time the notes are rated Investment Grade, FMC may
designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such
designation would not cause a Default. For purposes of making such
determination, all outstanding Investments by FMC and its Restricted
Subsidiaries in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under the first paragraph of this covenant (except to
the extent such Investments were repaid to FMC or a Restricted Subsidiary in
cash). Such designation will only be permitted if any such Restricted Payment
would be permitted at such time and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary. In the case of any
designation by FMC of a Person as an Unrestricted Subsidiary on the first day
that such Person is a Subsidiary of FMC in accordance with the provisions of the
Indenture, such designation shall be deemed to have occurred for all purposes of
the Indenture simultaneously with, and automatically upon, such Person becoming
a Subsidiary.
Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred
Stock
FMC will not:
. , and will not permit any of its Restricted Subsidiaries to,
incur any Indebtedness (including Acquired Debt);
42
. , and will not permit any of its Restricted Subsidiaries to,
issue any Disqualified Stock (including Acquired Disqualified
Stock); and
. permit any of its Restricted Subsidiaries that are not
Subsidiary Guarantors to issue any shares of Preferred Stock
(including Acquired Preferred Stock) other than to FMC or
another Restricted Subsidiary;
provided, however, that FMC and the Subsidiary Guarantors may incur Indebtedness
(including Acquired Debt) and FMC and the Subsidiary Guarantors may issue shares
of Disqualified Stock (including Acquired Disqualified Stock) if the Fixed
Charge Coverage Ratio for FMC's most recently ended four full fiscal quarters
for which financial statements have been filed with the SEC pursuant to the
covenant described under "--Reports" immediately preceding the date on which
such additional Indebtedness is incurred or such Disqualified Stock is issued
would have been at least 2.0 to 1, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Stock had been issued, as the
case may be, at the beginning of such four-quarter period, with any letters of
credit and bankers' acceptances being deemed to have an aggregate principal
amount of Indebtedness equal to the maximum amount available thereunder.
The foregoing provisions will not apply to:
(i) the incurrence by FMC or any Subsidiary Guarantor of
Indebtedness pursuant to the Credit Agreement in an aggregate principal
amount at any time outstanding not to exceed the aggregate principal
amount committed under the Credit Agreement as in effect on October 21,
2002 as set forth in an Officers' Certificate delivered to the Trustee
on October 21, 2002, less the aggregate principal amount of all
mandatory repayments made as a result of Asset Sales as described under
"Repurchase at Option of Holders--Asset Sales" applied to (a) repay
loans (other than revolving credit loans) outstanding thereunder or (b)
permanently reduce the revolving credit commitments thereunder (and the
corresponding guarantees of the Subsidiary Guarantors thereunder);
(ii) the incurrence by FMC and the Subsidiary Guarantors of
Indebtedness represented by the notes (not including any Additional
Notes) and Subsidiary Guarantees thereof, including any exchange notes
issued for the notes issued on October 21, 2002;
(iii) the Existing Indebtedness of FMC and its Restricted
Subsidiaries (other than Indebtedness of the type described in clause
(i), (ii), (v), (ix) or (x) of this covenant); provided, however, that
if FMC or a Subsidiary Guarantor makes any Investments in a Restricted
Subsidiary that is not a Subsidiary Guarantor other than:
(a) pursuant to the agreement governing such Existing
Indebtedness as in effect on October 21, 2002 or any agreement
entered into pursuant to a Permitted Refinancing of such
Existing Indebtedness,
(b) as an Investment pursuant to the first sentence
of the covenant described under "--Restricted Payments,"
(c) for the purpose of financing ordinary course
working capital requirements, or
(d) to the extent required in order to comply with
"thin capitalization" rules of the United States Internal
Revenue Code of 1986, as amended, the capitalization
regulations of any other jurisdiction, or any similar
applicable law,
then any outstanding Indebtedness of any Restricted Subsidiary in which
such Investments were made pursuant to this clause (iii) at the time of
such Investment shall be deemed not permitted by this clause (iii) and no
further Indebtedness shall be permitted by this clause (iii) to be
incurred by any Restricted Subsidiary in which such Investments were made;
(iv) the incurrence by FMC or any of its Restricted
Subsidiaries of any Permitted Refinancing in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace,
defease or refund, Indebtedness that was permitted to be incurred under
(a) the Fixed Charge Coverage Ratio test set forth above, or (b)
clauses (ii) and (iii) above or this clause (iv);
43
(v) the incurrence by FMC or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among FMC and any
of its Restricted Subsidiaries; provided, however, that (a) if FMC or
any Subsidiary Guarantor is the obligor on such Indebtedness, then
(other than intercompany notes that constitute Collateral) such
Indebtedness is expressly subordinated by its terms to the prior
payment in full in cash of all Obligations with respect to the notes or
the Subsidiary Guarantee, as the case may be, and (b)(1) any subsequent
issuance or transfer of Capital Stock that results in any such
Indebtedness being held by a Person other than FMC or a Restricted
Subsidiary and (2) any sale or other transfer of any such Indebtedness
to a Person that is not either FMC or a Restricted Subsidiary shall be
deemed, in each case, to constitute a simultaneous incurrence of such
Indebtedness that is not permitted by this clause (v) by FMC or such
Restricted Subsidiary, as the case may be;
(vi) the incurrence by FMC or any Restricted Subsidiary of
Hedging Obligations that are incurred for the purpose of (a) fixing or
hedging interest rate or currency risk with respect to any fixed or
floating rate Indebtedness that is permitted by the Indenture to be
outstanding which is designed solely to protect FMC or any Restricted
Subsidiary against fluctuations in interest rates or in foreign
currency exchange rates; provided that such Hedging Obligation does not
increase the principal amount of any such Indebtedness other than as a
result of fluctuations in interest rates or in foreign currency
exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder or (b) managing fluctuations in the
price or cost of energy, raw materials, manufactured products or
related commodities; provided that such obligations are entered into
for valid business purposes other than speculative purposes (as
determined by FMC's or such Restricted Subsidiary's principal financial
officer in the exercise of his or her good faith business judgment);
(vii) the issuance by any of FMC's Restricted Subsidiaries of
shares of Preferred Stock to FMC or a Wholly Owned Restricted
Subsidiary; provided that (a) any subsequent issuance or transfer of
Capital Stock that results in such Preferred Stock being held by a
Person other than FMC or a Wholly Owned Restricted Subsidiary or (b)
the transfer or other disposition by FMC or a Wholly Owned Restricted
Subsidiary of any such shares to a Person other than FMC or a Wholly
Owned Restricted Subsidiary shall be deemed, in each case, to
constitute an issuance of such Preferred Stock by such Subsidiary on
such date that is not permitted by this clause (vii);
(viii) the incurrence by FMC or any of its Restricted
Subsidiaries of Indebtedness represented by workers' compensation
claims and other statutory or regulatory obligations, self-insurance
obligations, tender, bid, performance, government contract, surety or
appeal bonds, standby letters of credit and warranty and contractual
service obligations of like nature, trade letters of credit or
documentary letters of credit, in each case to the extent incurred in
the ordinary course of business of FMC or such Restricted Subsidiary;
(ix) the incurrence of Indebtedness by Foreign Subsidiaries
(not including Indebtedness incurred pursuant to clause (iii) above) in
an aggregate principal amount (or accreted value, as applicable) not to
exceed $25.0 million at any one time outstanding;
(x) the Guarantee by FMC or any Subsidiary Guarantor of
Indebtedness of FMC or a Subsidiary Guarantor or the Guarantee by a
Restricted Subsidiary that is not a Subsidiary Guarantor of any
Indebtedness of another Restricted Subsidiary that is not a Subsidiary
Guarantor, so long as in each case such Indebtedness was permitted to
be incurred by another provision of this covenant;
(xi) Indebtedness consisting of take-or-pay obligations
contained in supply agreements entered into in the ordinary course of
business;
(xii) the incurrence by FMC and the Subsidiary Guarantors of
Purchase Money Obligations and Capital Lease Obligations in an
aggregate principal amount not to exceed $25.0 million at any one time
outstanding;
(xiii) Indebtedness arising from agreements of FMC or a
Restricted Subsidiary providing for indemnification, contribution,
earnout, adjustment of purchase price or similar obligation, in each
case, incurred or assumed in connection with the disposition of any
business, assets or Capital Stock of a Restricted Subsidiary;
44
(xiv) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business;
provided that such Indebtedness is extinguished within three business
days of incurrence; and
(xv) the incurrence by FMC or any Subsidiary Guarantor of
Indebtedness or the issuance of Disqualified Stock, the aggregate
principal amount (or accreted value, as applicable) or liquidation
preference of which, together with all other Indebtedness and
Disqualified Stock at the time outstanding and incurred in reliance on
this clause (xv), does not exceed $50.0 million.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness or Preferred Stock meets the criteria of more than
one of the categories of permitted Indebtedness described in clauses (i) through
(xv) above or is entitled to be incurred pursuant to the first paragraph of this
covenant, FMC shall, in its sole discretion, classify on the date of incurrence
(and from time to time reclassify in whole or in part) such item of Indebtedness
or Preferred Stock in any matter that complies with this covenant and such
Indebtedness or Preferred Stock will be treated as having been incurred pursuant
to the clauses or the first paragraph hereof, as the case may be, designated by
FMC (provided that all Indebtedness under the Credit Agreement shall at all
times be deemed to have been incurred pursuant to clause (i) of this covenant to
the extent capacity is available under such clause). The amount of Indebtedness
issued at a price which is less than the principal amount thereof shall be equal
to the amount of the liability in respect thereof determined in accordance with
U.S. GAAP.
Limitation on Liens
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien, except Permitted Liens, on any asset now owned or hereafter
acquired, or on any income or profits therefrom, unless all payments due under
the Indenture and the notes are secured on an equal and ratable basis with the
obligations so secured (or, if such obligations are subordinated by their terms
to the notes or the Subsidiary Guarantees, prior to the obligations so secured)
until such time as such obligations are no longer secured by a Lien.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any restriction on the ability of any Restricted
Subsidiary to:
(i) (A) pay dividends or make any other distributions to FMC
or any of its Restricted Subsidiaries:
(1) on its Capital Stock, or
(2) with respect to any other interest or
participation in, or measured by, its profits, or
(B) pay any Indebtedness owed to FMC or any of its
Restricted Subsidiaries;
(ii) make loans or advances to FMC or any of its Restricted
Subsidiaries; or
(iii) transfer any of its properties or assets to FMC or any
of its Restricted Subsidiaries; except for such restrictions existing under or
by reason of:
(a) existing agreements as in effect on October 21, 2002,
including any amendment, modification or supplement thereof or
replacement therefor so long as any such amendment, modification or
supplement or replacement is not materially more restrictive than such
existing agreement as in effect on October 21, 2002;
(b) Indebtedness permitted by the Indenture to be incurred
containing restrictions on the ability of Restricted Subsidiaries to
consummate transactions of the types described in clause (i), (ii) or
(iii) above not materially more restrictive than those contained in the
Indenture;
(c) the Indenture and the Security Documents;
45
(d) applicable law;
(e) existing restrictions with respect to a Person acquired by
FMC or any of its Restricted Subsidiaries (except to the extent such
restrictions were put in place in connection with or in contemplation
of such acquisition), which restrictions are not applicable to any
Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired;
(f) customary non-assignment provisions in leases and other
agreements entered into in the ordinary course of business;
(g) construction loans and purchase money obligations
(including Capital Lease Obligations) for property acquired in the
ordinary course of business that impose restrictions of the nature
described in clause (iii) above on the property so constructed or
acquired;
(h) in the case of clause (iii) above, restrictions contained
in security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such restrictions restrict the
transfer of the property subject to such security agreements or
mortgages;
(i) a Permitted Refinancing; provided that the restrictions
contained in the agreements governing such Permitted Refinancing are
not materially more restrictive, taken as a whole, than those contained
in the agreements governing the Indebtedness being refinanced;
(j) any restriction with respect to shares of Capital Stock of
a Restricted Subsidiary imposed pursuant to an agreement entered into
for the sale or disposition of such shares of Capital Stock or any
restriction with respect to the assets of a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of such assets or all or substantially all the Capital
Stock of such Restricted Subsidiary pending the closing of such sale or
disposition; and
(k) the Credit Agreement and related documentation as the same
that were in effect on October 21, 2002 and as amended, modified,
extended, renewed, refunded, refinanced, restated or replaced from time
to time; provided that the Credit Agreement and related documentation
as so amended, modified, extended, reviewed, refunded, refinanced,
restated or replaced is not materially more restrictive, taken as a
whole, as to the matters enumerated above than the Credit Agreement and
related documentation as in effect on October 21, 2002.
For purposes of determining compliance with this covenant, in the event
that a restriction meets the criteria of more than one of the categories of
permitted restrictions described in clauses (a) through (k) above, FMC shall, in
its sole discretion, classify such restriction in any matter that complies with
this covenant and such restriction will be treated as existing pursuant to the
clauses designated by FMC.
Limitation on Sale and Lease-Back Transactions
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale and Lease-Back Transaction; provided that
FMC or any Restricted Subsidiary may enter into a Sale and Lease-Back
Transaction if:
(a) FMC or such Restricted Subsidiary, as the case may be,
could have:
(i) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such Sale and Lease-Back
Transaction pursuant to the covenant described under
"--Limitation on Incurrence of Additional Indebtedness and
Issuance of Preferred Stock," and
(ii) incurred a Lien to secure such Indebtedness
pursuant to the covenant described under "-- Limitation on
Liens" without securing the notes; and
(b) the gross cash proceeds of such Sale and Lease-Back
Transaction are at least equal to the fair market value of the property
that is the subject of such Sale and Lease-Back Transaction.
46
Line of Business
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to FMC and its Subsidiaries taken as a
whole.
Transactions with Affiliates
The Company will not, and will not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make any contract, agreement, understanding, loan, advance or Guarantee with,
or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (i) the terms of such Affiliate Transaction are no less
favorable to FMC or such Restricted Subsidiary, as the case may be, than those
that could be obtained in a comparable arm's-length transaction with a Person
that is not an Affiliate of FMC and (ii) FMC delivers to the Trustee (a) with
respect to any Affiliate Transaction involving aggregate consideration in excess
of $10.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction involving aggregate consideration in excess
of $25.0 million, an opinion as to the fairness to FMC or such Restricted
Subsidiary of such Affiliate Transaction from a financial point of view issued
by an investment banking firm of national standing; provided that:
(i) transactions or payments pursuant to any employment
arrangements or employee, officer or director benefit plans or
arrangements entered into by FMC or any of its Restricted Subsidiaries
in the ordinary course of business;
(ii) transactions between or among FMC and/or its Restricted
Subsidiaries;
(iii) customary loans, advances, fees and compensation paid
to, and indemnity provided on behalf of, officers, directors, employees
or consultants of FMC or any of its Restricted Subsidiaries;
(iv) transactions pursuant to any contract or agreement in
effect on October 21, 2002, as the same may be amended, modified or
replaced from time to time, so long as any such contract or agreement
as so amended, modified or replaced is, taken as a whole, no less
favorable to FMC and its Restricted Subsidiaries in any material
respect than the contract or agreement as in effect on October 21,
2002;
(v) any Restricted Payment of the type described in clause (1)
or (2) of the first paragraph of the covenant described under
"--Restricted Payments"; and
(vi) any transaction entered into on an arm's-length basis in
the ordinary course of business between FMC or any of its Restricted
Subsidiaries, on the one hand, and any Joint Venture, on the other
hand; provided that any such transaction (or series of related
transactions) that involves $25.0 million or more in the aggregate
shall be subject to prior approval by the disinterested members of the
Board of Directors,
in each case, shall be deemed not to be Affiliate Transactions and therefore
(except as otherwise specified in such clauses) not subject to the requirements
of clauses (i) and (ii) of the initial paragraph above.
Guarantees by Restricted Subsidiaries
The Company will not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor, directly or indirectly, to Guarantee or secure the payment
of any other Indebtedness of FMC or any of its Restricted Subsidiaries unless
such Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to the Indenture providing for a Subsidiary Guarantee of the payment
of the notes by such Restricted Subsidiary; provided that this paragraph shall
not be applicable to:
47
(i) any Guarantee of any Restricted Subsidiary that existed
at the time such Person became a Restricted Subsidiary and was not
incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary;
(ii) to the extent permitted under "--Limitation on
Incurrence of Additional Indebtedness and Issuance of Preferred Stock,"
Guarantees of Indebtedness of a Restricted Subsidiary that is a Foreign
Subsidiary by a Restricted Subsidiary that is a Foreign Subsidiary;
(iii) any Guarantee arising under or in connection with
performance bonds, indemnity bonds, surety bonds or letters of credit
or bankers' acceptances; or
(iv) Permitted Liens.
If the Guaranteed Indebtedness is subordinated in right of payment to the notes
or any Subsidiary Guarantee, as applicable, pursuant to a written agreement to
that effect, the Guarantee of such guaranteed Indebtedness must be subordinated
in right of payment to the Subsidiary Guarantee to at least the extent that the
Guaranteed Indebtedness is subordinated to the notes.
Reports
Whether or not FMC and the Subsidiary Guarantors are then subject to
Section 13(a) or 15(d) of the Exchange Act, FMC and the Subsidiary Guarantors
will electronically file with the SEC, so long as the notes are outstanding, the
annual reports, quarterly reports and other periodic reports that FMC and the
Subsidiary Guarantors would be required to file with the SEC pursuant to Section
13(a) or 15(d) of the Exchange Act if FMC and the Subsidiary Guarantors were so
subject, and such documents will be filed with the SEC on or prior to the
respective dates (the "Required Filing Dates") by which FMC and the Subsidiary
Guarantors would be required so to file such documents if FMC and the Subsidiary
Guarantors were so subject, unless, in any case, such filings are not then
permitted by the SEC.
If such filings with the SEC are not then permitted by the SEC, or such
filings are not generally available on the Internet free of charge, FMC and the
Subsidiary Guarantors will, without charge to the holders, within 15 days of
each Required Filing Date, transmit by mail to Holders, as their names and
addresses appear in the note register, and file with the Trustee copies of the
annual reports, quarterly reports and other periodic reports that FMC and the
Subsidiary Guarantors would be required to file with the SEC pursuant to Section
13(a) or 15(d) of the Exchange Act if FMC and the Subsidiary Guarantors were
subject to such Section 13(a) or 15(d) and, promptly upon written request,
supply copies of such documents to any prospective holder or beneficial owner at
FMC's cost.
In addition, FMC and the Subsidiary Guarantors will, for so long as any
notes remain outstanding, furnish to the holders of the notes and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Impairment of Security Interest
Except as provided in the Security Documents, FMC will not, and will
not permit any Restricted Subsidiary to, take, or knowingly or negligently omit
to take, any action, which action or omission might or would have the result of
materially impairing the security interest in favor of the Collateral Trustee
for the benefit of the Trustee and the holders of the notes with respect to the
Collateral, and FMC will not, and will not permit any Subsidiary Guarantor to,
grant to any Person (other than the Collateral Trustee for its benefit and the
ratable benefit of the Trustee and the holders of the notes and the Other
Secured Obligations) any interest whatsoever in the Collateral (other than Liens
permitted by the applicable Security Documents).
Applicability of Certain Covenants if Notes Rated Investment Grade
Notwithstanding the foregoing, from and after the first date when the
notes are rated Investment Grade (the "Investment Grade Date"), (i) FMC's
obligations to comply with the provisions of the Indenture described above
48
under the captions "Repurchase at Option of Holders--Asset Sales" and "Certain
Covenants--Restricted Payments," "--Limitation on Incurrence of Additional
Indebtedness and Issuance of Preferred Stock," "--Limitation on Liens,"
"--Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries,"
"--Limitation on Sale and Lease-Back Transactions," "--Lines of Business" and
"--Transactions with Affiliates," and clause (3) of "Consolidation, Merger and
Sale of Assets" will terminate and cease to have any further effect and (ii) the
following paragraphs entitled "Limitation on Liens" and "Limitation on Sale and
Lease-Back Transactions" shall apply.
Limitation on Liens. So long as any notes remain outstanding, FMC will
not, and will not permit any Restricted Subsidiary to, incur, issue, assume or
guarantee any Indebtedness secured by any Lien on or in respect of Principal
Property owned by FMC or any Restricted Subsidiary, or any shares of stock or
Indebtedness of any Restricted Subsidiary, without effectively providing that
the notes (together with, if FMC shall so determine, any other Indebtedness of
FMC or such Restricted Subsidiary then existing or thereafter created which is
not subordinate to the notes) shall be secured equally and ratably with (or
prior to) such secured Indebtedness, so long as such secured Indebtedness shall
be so secured, unless, after giving effect thereto, the aggregate principal
amount of all such secured Indebtedness then outstanding plus all Attributable
Debt of FMC and its Restricted Subsidiaries in respect of any sale and
lease-back transaction (as defined in the next succeeding covenant set forth)
entered into after the Investment Grade Date (other than the sale and lease-back
transactions permitted by the next succeeding covenant set forth) would not
exceed an amount equal to 10% of Consolidated Net Tangible Assets; provided,
however, that nothing contained in this covenant shall prevent, restrict or
apply to, and there shall be excluded from secured Indebtedness in any
computation under this covenant, Indebtedness secured by:
(1) Liens existing as of the Investment Grade Date on any
property or assets owned or leased by FMC or any Restricted Subsidiary;
(2) Liens on property or assets of, or on any shares of stock
or Indebtedness of, any corporation existing at the time such
corporation becomes a Restricted Subsidiary;
(3) Liens on any property or assets or shares of stock or
Indebtedness existing at the time of acquisition thereof (including
acquisition through merger or consolidation) or to secure the payment
of all or any part of the purchase price or construction cost thereof
or to secure any Indebtedness incurred prior to, at the time of or
within 120 days after the later of acquisition of such property or
assets or shares of stock or Indebtedness or the completion of any such
construction and the commencement of operation of such property, for
the purpose of financing all or any part of the purchase price or
construction cost thereof;
(4) Liens on any property or assets to secure all or any part
of the cost of development, operation, construction, alteration, repair
or improvement of all or any part of such property or assets, or to
secure Indebtedness incurred prior to, at the time of or within 120
days after completion of such development, operation, construction,
alteration, repair or improvement, whichever is later, for the purpose
of financing all or any part of such cost;
(5) Liens in favor of, or which secure Indebtedness owing to,
FMC or a Restricted Subsidiary;
(6) Liens arising from the assignment of moneys due and to
become due under contracts between FMC or any Restricted Subsidiary and
the United States of America, any state, commonwealth, territory or
possession thereof or any agency, department, instrumentality or
political subdivision of any thereof; or Liens in favor of the United
States of America, any state, commonwealth, territory or possession
thereof or any agency, department, instrumentality or political
subdivision of any thereof, to secure progress, advance or other
payments pursuant to any contract or provision of any statute, or
pursuant to the provisions of any contract not directly or indirectly
in connection with securing Indebtedness;
(7) any deposit or pledge as security for the performance of
any bid, tender, contract, lease or undertaking not directly or
indirectly in connection with the securing of Indebtedness; any deposit
or pledge with any governmental agency required or permitted to qualify
FMC or any Restricted Subsidiary to conduct business, to maintain
self-insurance or to obtain the benefits of any law pertaining to
worker's compensation, unemployment insurance, old age pensions, social
security or similar matters, or to obtain any stay or discharge in any
legal or administrative proceedings; deposits or pledges to obtain the
release of
49
mechanics', workers', repairmen's, materialmen's or warehousemen's
liens on the release of property in the possession of a common carrier;
any security interest created in connection with the sale, discount or
guarantee of notes, chattel mortgages, leases, accounts receivable,
trade acceptances or other paper, or contingent repurchase obligations,
arising out of sales of merchandise in the ordinary course of business;
Liens for taxes not yet due and payable or being contested in good
faith; or other deposits or pledges similar to those referred to in
this clause (7);
(8) Liens arising by reason of any attachment, judgment,
decree or order of any court or other governmental authority, so long
as any appropriate legal proceedings which may have been initiated for
review of such attachment, judgment, decree or order shall not have
been finally terminated or so long as the period within which such
proceedings may be initiated shall not have expired;
(9) Liens created after the Investment Grade Date on property
leased to or purchased by FMC or any Restricted Subsidiary after the
Investment Grade Date and securing, directly or indirectly, obligations
issued by a state, commonwealth, territory or possession of the United
States of America, or any political subdivision of any of the
foregoing, or the District of Columbia, to finance the cost of
acquisition or cost of construction of such property; and
(10) any extension, renewal, substitution or replacement (or
successive extensions, renewals, substitutions or replacements), as a
whole or in part, of any Lien referred to in clauses (1) through (9)
above or the Indebtedness secured thereby; provided that (1) such
extension, renewal, substitution or replacement Lien shall be limited
to all or any part of the same property or assets, shares of stock or
Indebtedness that secured the Lien extended, renewed, substituted or
replaced (plus improvements on such property and any other property or
assets not then constituting a Principal Property) and (2) to the
extent, if any, that the Indebtedness secured by such Lien at such time
is increased, the amount of such increase shall not be excluded from
secured Indebtedness under any computation under this covenant.
Indebtedness created by FMC or any Restricted Subsidiary shall not be
cumulated with a guarantee of the same Indebtedness by FMC or any other
Restricted Subsidiary for the same financial obligation.
Limitation on Sale and Lease-Back Transactions. As long as any notes
are outstanding, FMC will not itself, and will not permit any Restricted
Subsidiary to, enter into any arrangement after the Investment Grade Date with
any bank, insurance company or other lender or investor (not including FMC or
any Restricted Subsidiary) providing for the leasing by FMC or any such
Restricted Subsidiary for a period, including renewals, in excess of three years
of any Principal Property which was or is owned by FMC or such Restricted
Subsidiary which has been or is to be sold or transferred, more than 120 days
after such property has been owned by FMC or such Restricted Subsidiary and
completion of construction and commencement of full operation thereof, to such
lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such Principal Property
(herein referred to as a "sale and lease-back transaction") unless either:
(a) The Attributable Debt of FMC and its Restricted
Subsidiaries in respect of such sale and lease-back transaction and all
other sale and lease-back transactions entered into after the
Investment Grade Date (other than sale and lease-back transactions
permitted by the following paragraph (b)) plus the aggregate principal
amount of Indebtedness secured by Liens on Principal Properties then
outstanding (excluding any such Indebtedness secured by Liens covered
in clauses (1) through (10) of the covenant set forth immediately
above) without equally and ratably securing the notes then outstanding,
would not exceed 10% of Consolidated Net Tangible Assets, or
(b) The Company, within 120 days after the sale or transfer,
applies an amount equal to the value of the Principal Property so sold
and leased back at the time of entering into such arrangement (as
determined by FMC) to (x) the retirement of Funded Debt (including any
notes constituting Funded Debt to the extent such retirement would not
be prohibited by the terms of the Indenture at such time) of FMC or (y)
the acquisition of properties, facilities or equipment used for general
operating purposes for FMC or any Restricted Subsidiary; provided, that
the amount to be applied to the retirement of Funded Debt of FMC
pursuant to this subparagraph (b) shall be reduced by (i) the principal
amount of any notes delivered within 120 days after such sale or
transfer to the Trustee for redemption and cancellation, and (ii) the
principal
50
amount of any notes delivered within 120 days after such sale or
transfer to the Trustee for redemption and cancellation, and (ii) the
principal amount of Funded Debt other than notes, voluntarily retired
by FMC within 120 days after such sale, whether or not any such
retirement of Funded Debt covered by subclause (i) or (ii) above shall
be specified as being made pursuant to this subparagraph (b).
Notwithstanding the foregoing, no retirement referred to in this
subparagraph (b) may be effected by payment at maturity or pursuant to
any mandatory sinking fund payment or any mandatory prepayment
provision.
Notwithstanding the foregoing, where FMC or any Restricted Subsidiary
is the lessee in any sale and lease-back transaction, Attributable Debt shall
not include any Indebtedness resulting from the guarantee by FMC or any other
Restricted Subsidiary of the lessee's obligation thereunder.
Consolidation, Merger and Sale of Assets
The Company may not consolidate with or merge with or into, or sell,
assign, transfer, convey or otherwise dispose of all or substantially all of its
assets in one or more related transactions to, any Person, or permit any Person
to merge with or into it unless each of the following conditions is satisfied:
(1) immediately after giving effect to such transaction and
any related incurrence of Indebtedness or issuance of Disqualified
Stock, no Default or Event of Default shall have occurred and be
continuing;
(2) the continuing Person, if other than FMC, is a corporation
or limited liability company organized under the laws of the United
States, one of the States thereof or the District of Columbia;
(3) either (i) FMC shall be the continuing Person, or (ii) the
entity formed by such consolidation or into which FMC is merged, or the
Person to which such properties and assets will have been conveyed,
transferred or leased, assumes FMC's obligation as to the due and
punctual payment of the principal of (and premium, if any, on) and
interest, if any, on the notes and the performance and observance of
every covenant to be performed by FMC under the Indenture, the notes
and the Security Documents;
(4) FMC or the entity or the Person formed by or surviving any
such consolidation or merger (if other than FMC), or to which such
sale, assignment, transfer, conveyance or other disposition shall have
been made, at the time of such transaction and after giving pro forma
effect thereto, would be able to incur at least $1.00 of Indebtedness
under the first paragraph of "--Limitation on Incurrence of Additional
Indebtedness and Issuance of Preferred Stock"; provided that the
foregoing provisions of this clause (3) shall not apply in the case of
a consolidation or merger of FMC with or into a Person that has no
outstanding Indebtedness at the time of such consolidation or merger so
long as, after giving pro forma effect thereto on the date thereof, the
Fixed Charge Coverage Ratio does not decrease from what it was
immediately prior to such transaction; and
(5) FMC has delivered to the Trustee an Officers' Certificate
and opinion of counsel stating that the transaction complies with these
conditions.
The foregoing shall not prohibit the merger or consolidation of a
Wholly Owned Restricted Subsidiary with FMC; provided that, in connection with
any such merger or consolidation, no consideration, other than Qualified Capital
Stock in the surviving Person or FMC, shall be issued or distributed to the
holders of Capital Stock of FMC.
No Subsidiary Guarantor may:
. consolidate with or merge with or into any Person; or
. sell, assign, transfer, convey or otherwise dispose of, all or
substantially all of its assets, in one or more related
transactions, to any Person; or
. permit any Person to merge with or into the Subsidiary
Guarantor unless FMC has delivered to the Trustee an officers'
certificate and opinion of counsel stating that the
transaction complies with the following conditions and each of
the following conditions is satisfied:
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(A) the other Person is FMC or any Wholly Owned
Restricted Subsidiary that is a Subsidiary Guarantor or
becomes a Subsidiary Guarantor concurrently with the
transaction; or
(B) (1) either (x) the Subsidiary Guarantor shall be
the continuing Person or (y) the entity formed by such
consolidation or into which the Subsidiary Guarantor is
merged, assumes the Subsidiary Guarantor's Guarantee on the
notes and the performance and observance of every covenant to
be performed by the Subsidiary Guarantor under the Indenture,
the notes and the Security Documents; and
(2) the continuing Person, if other than the
Subsidiary Guarantor, is a corporation or limited
liability company organized under the laws of the United
States, one of the States thereof or the District of
Columbia and immediately after giving effect to the
transaction and any related incurrence of Indebtedness of
issuance of Disqualified Stock, no Default or Event of
Default shall have occurred and be continuing; or
(C) the transaction constitutes a sale or other
disposition (including by way of consolidation or merger) of
the Subsidiary Guarantor or the sale or disposition of all or
substantially all the assets of the Subsidiary Guarantor (in
each case other than to FMC or a Restricted Subsidiary) and at
the time of such transaction after giving pro forma effect
thereto, FMC could satisfy the provisions of clause (4) of the
first paragraph of this covenant and the transaction is
otherwise permitted by the Indenture.
The sale, assignment, transfer, conveyance or other disposition by FMC
of all or substantially all its property or assets taken as a whole to one or
more of FMC's Subsidiaries shall not relieve FMC from its obligations under the
Indenture and the notes. In addition, FMC will not lease all or substantially
all its assets in one or more related transactions to another Person.
Events of Default
Each of the following constitutes an "Event of Default" with respect to
the notes:
(1) default for 30 days in the payment when due of interest
on the notes;
(2) default in payment when due of the principal of or
premium, if any, on the notes issued thereunder, at maturity or
otherwise;
(3) failure by FMC to comply with the provisions described
under the captions "Repurchase at Option of Holders--Change of
Control," "--Asset Sales" or "Consolidation, Merger and Sale of
Assets";
(4) failure by FMC for 60 days after receipt of notice by the
Trustee or holders of at least 25% in aggregate principal amount of the
notes then outstanding issued thereunder to comply with any of the
other agreements in the Indenture or the notes;
(5) the occurrence of a default under any mortgage, indenture
or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by FMC or any
of its Significant Subsidiaries (or any Indebtedness for money borrowed
Guaranteed by FMC or any of its Significant Subsidiaries if FMC or a
Significant Subsidiary does not perform its payment obligations under
such Guarantee within any grace period provided for in the
documentation governing such Guarantee), whether such Indebtedness or
Guarantee existed on October 21, 2002 or is thereafter created, which
default (a) constitutes a Payment Default or (b) results in the
acceleration of such Indebtedness prior to its Stated Maturity, and in
each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there
has been a Payment Default or that has been so accelerated, aggregates
$25.0 million or more;
52
(6) failure by FMC or any of its Significant Subsidiaries to
pay a final judgment or final judgments aggregating in excess of $25.0
million, which judgment or judgments are not paid, discharged or stayed
for a period of 60 days;
(7) certain events of bankruptcy or insolvency with respect to
FMC or any of its Significant Subsidiaries; and
(8) any Subsidiary Guarantee or any Security Document (or any
security interest created thereby) shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or FMC or any Subsidiary Guarantor, or
any Person acting on behalf of any Subsidiary Guarantor, shall deny or
disaffirm its obligations under any Subsidiary Guarantee or any
Security Document.
If an Event of Default (other than an Event of Default specified in
clause (7) above with respect to FMC or any Subsidiary Guarantor) occurs and is
continuing under the Indenture, the Trustee or the holders of at least 25% in
aggregate principal amount of the notes then outstanding, by written notice to
FMC (and to the Trustee if such notice is given by the holders) may, and the
Trustee at the request of such holders shall, declare the principal of and
premium, if any, and accrued interest, if any, on the notes to be immediately
due and payable. Upon a declaration of acceleration, such principal, premium, if
any, and accrued interest, if any, shall be immediately due and payable. If an
Event of Default specified in clause (7) above occurs with respect to FMC or any
Subsidiary Guarantor, the principal of and premium, if any, and accrued
interest, if any, on the notes shall become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any holder.
The holders of a majority in principal amount of the outstanding notes,
by written notice to FMC and to the Trustee, may waive all past defaults and
rescind and annul a declaration of acceleration and its consequences if:
(i) all existing Events of Default, other than the nonpayment
of the principal of and premium, if any, and interest, if any, on such
notes that have become due solely by such declaration of acceleration,
have been cured or waived; and
(ii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction.
For information as to the waiver of defaults, see "Modification and
Waiver."
The holders of a majority in aggregate principal amount of the
outstanding notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or the Indenture or that may involve the
Trustee in personal liability. A holder may not pursue any remedy with respect
to the Indenture or the notes unless:
(1) the holder gives the Trustee written notice of a
continuing Event of Default;
(2) the holders of at least 25% in aggregate principal amount
of outstanding notes make a written request to the Trustee to pursue
the remedy;
(3) such holder or holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period, the holders of a majority in
aggregate principal amount of outstanding notes do not give the Trustee
a direction that is inconsistent with the request.
53
However, such limitations do not apply to the right of any holder of a
note to receive payment of the principal of or premium, if any, or interest, if
any, on such note or to bring suit for the enforcement of any such payment, on
or after the due date expressed in the notes, which right shall not be impaired
or affected without the consent of the holder.
The Indenture requires an officer of FMC to certify, on or before a
date not more than 120 days after the end of each fiscal year, that the officer
has conducted or supervised a review of the activities of FMC and its Restricted
Subsidiaries and FMC's and its Restricted Subsidiaries' performance under the
Indenture and that, to the best of such officer's knowledge, based upon such
review, FMC has fulfilled all obligations thereunder or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
and the nature and status thereof. The Company is also obligated to notify the
Trustee promptly of any default or defaults in the performance of any covenants
or agreements under the Indenture.
Modification and Waiver
The Indenture permits FMC, the Guarantors and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal amount
of the notes, to execute supplemental indentures adding any provisions to or
changing or eliminating any provision of the Indenture or any Security Document
or modifying the rights of such holders (it being understood that the provisions
of the Security Documents which may by their terms be amended or waived without
the consent of the noteholders do not require the consent of the noteholders
contemplated hereby). However, no modification or amendment of the Indenture or
the Security Documents may, without the consent of each holder affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any note or alter the provisions with
respect to redemption,
(2) reduce the principal amount of or premium, if any, or
interest, if any, on any note,
(3) reduce any amount payable upon the occurrence of an Event
of Default,
(4) after the obligation has arisen to make a Change of
Control Offer or an Asset Sale Offer, amend, change or modify in any
material respect the obligation of FMC to make and complete such Change
of Control Offer or make and complete such Asset Sale Offer,
(5) change the place or currency of payment of principal of
or premium, if any, or interest, if any, on any note,
(6) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of a
redemption, on or after the applicable Redemption Date) of any note,
(7) reduce the percentage or aggregate principal amount of
outstanding notes the consent of whose holders is necessary for waiver
of compliance with certain provisions of the Indenture or any Security
Document or for waiver of certain defaults or to modify or amend the
Indenture or any Security Document,
(8) waive a default in the payment of principal of or
premium, if any, or interest, if any, on the notes (except as set forth
under "Events of Default"),
(9) modify or change any provision of the Indenture affecting
the ranking of the notes or the Subsidiary Guarantees in a manner
adverse to the holders of the notes (it being understood that
amendments or waivers of Security Documents or releases of Collateral
do not relate to ranking), or
(10) release any Subsidiary Guarantor from any of its
obligations under its Subsidiary Guarantee or the Indenture other than
in accordance with the provisions of the Indenture, or amend or modify
any provision relating to such release.
54
Modification and amendment of the Indenture or any Security Document
may be made by FMC, the Guarantors and the Trustee without the consent of any
holder, for any of the following purposes:
(i) to cure any ambiguity, omission, defect or
inconsistency in the Indenture or any Security Document;
(ii) to the extent permitted by the Indenture, to provide
for the assumption by a successor of FMC of its obligations under the
Indenture or any Security Document;
(iii) to provide for uncertificated notes, subject to certain
conditions;
(iv) to secure the notes under the Indenture, to add
Subsidiary Guarantees with respect to the notes, or to confirm and
evidence the release, termination or discharge of any such security or
Subsidiary Guarantee when such release, termination or discharge is
permitted by the Indenture;
(v) to add to the covenants of FMC for the benefit of the
holders of the notes or to surrender any right or power conferred upon
FMC;
(vi) to the extent permitted by the Indenture, to provide
for or confirm the issuance of Additional Notes;
(vii) to make any other change that does not adversely affect
the rights of any holder;
(viii) to comply with any requirement of the SEC in connection
with qualification of the Indenture under the Trust Indenture Act or
otherwise; or
(ix) to add or release Collateral as permitted under the
terms of the Indenture or the Security Documents.
Defeasance and Discharge
The Company may discharge its obligations under the notes and the
Indenture by irrevocably depositing in trust with the Trustee money or U.S.
Government Obligations sufficient to pay principal of interest on the notes to
maturity or redemption within one year, subject to meeting certain other
conditions.
The Indenture provides that FMC may elect either (i) to defease and be
discharged from any and all obligations with respect to all or a portion of the
notes of any series (except for, among other matters, the obligations to
register the transfer of or exchange notes, replace temporary or mutilated,
destroyed, lost or stolen notes of such series, maintain an office or agency in
respect of such notes and hold moneys for payment in trust) ("legal
defeasance"); or (ii) to be released from its obligations with respect to the
covenants described under the captions "The Guarantees," "Repurchase at Option
of Holders--Change of Control" and "--Asset Sales," "Certain
Covenants--Restricted Payments," "--Limitation on Incurrence of Additional
Indebtedness and Issuance of Preferred Stock," "--Limitation on Liens,"
"--Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries,"
"--Limitation on Sale and Lease-Back Transactions," "--Line of Business,"
"--Transactions with Affiliates," "-- Guarantees by Restricted Subsidiaries,"
"-- Reports," "-- Applicability of Certain Covenants if Notes Rated Investment
Grade -- Limitation on Liens" and "-- Limitation on Sale and Lease-Back
Transactions" and under clauses (1) and (3) of "Consolidation, Merger and Sale
of Assets" (and the events listed in clauses (3), (5) and (6) under "Events of
Default" will no longer constitute Events of Default), and any omission to
comply with such obligations will not constitute a Default or an Event of
Default with respect to such notes ("covenant defeasance"), in either case upon
the irrevocable deposit by FMC with the Trustee (or other qualifying trustee),
in trust, of (i) an amount in cash; (ii) U.S. Government Obligations that,
through the payment of principal and interest in accordance with their terms,
will provide money in an amount; or (iii) a combination thereof in an amount,
sufficient to pay the principal of (and premium, if any, on) and interest, if
any, to Stated Maturity (or redemption) on such notes, on the scheduled due
dates therefor.
55
Such a trust may only be established if, among other things, FMC has
delivered to the Trustee an opinion of counsel to the effect that the holders of
such notes will not recognize income, gain or loss for United States federal
income tax purposes as a result of such legal defeasance or covenant defeasance
and will be subject to United States federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred, and such opinion, in the
case of defeasance under clause (i) above, must refer to and be based upon a
ruling of the Internal Revenue Service or a change in applicable United States
federal income tax law occurring after the date of the Indenture. The defeasance
would in each case be effective when 91 days have passed since the date of the
deposit in trust.
In the case of either discharge or defeasance, the Subsidiary
Guarantees, if any, will terminate and the lien securing the notes will be
released.
Concerning the Trustee
The Indenture contains certain limitations on the rights of the
Trustee, should it become a creditor of FMC, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue or
resign.
The holders of a majority in principal amount of the then outstanding
notes will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the applicable Trustee,
subject to certain exceptions. The Indenture provides that in case an Event of
Default shall occur and be continuing, the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent person in the
conduct of such person's own affairs. Subject to such provisions, the Trustee
will not be under any obligation to exercise any rights or powers under the
Indenture at the request of any holder of notes, unless such holder shall have
offered to the applicable Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator, member of the Board of
Directors or holder of Capital Stock of FMC or any Subsidiary Guarantor, as
such, will have any liability for any obligations of FMC and the Subsidiary
Guarantors under the notes, the Subsidiary Guarantees or the Indenture or for
any claim based on, in respect of, or by reason of, such obligations. Each
holder of notes by accepting a note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the notes. This
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the SEC that such a waiver is against public policy.
Payment, Transfer and Exchange
The Company is required to maintain an office or agency at which the
principal of and premium, if any, and interest, if any, on the notes are
payable. The Company initially designated the office of the agent of the Trustee
in New York City as an office where such principal, premium and interest is
payable. The Company may from time to time designate additional offices or
agencies, approve a change in the location of any office or agency and rescind
the designation of any office or agency.
All moneys paid by FMC to the Trustee or a Paying Agent for the payment
of principal of (or premium, if any, on) or interest, if any, on any notes that
remain unclaimed for two years after such principal, premium or interest becomes
due and payable will be repaid to FMC, and the holder of such notes will
(subject to applicable abandoned property or similar laws) thereafter, as an
unsecured general creditor, look only to FMC.
Subject to the terms of the Indenture, notes may be presented for
registration of transfer and for exchange (i) at each office or agency required
to be maintained by FMC, as described above, and (ii) at each other office or
agency that FMC may designate from time to time for such purposes. Registration
of transfers and exchanges will be effected if the transfer agent is satisfied
with the evidence of ownership and identity of the Person making the request and
if the transfer form thereon is duly executed and the transfer agent is
otherwise satisfied that the transfer
56
is being made in accordance with the Indenture and applicable law. See
"Book-Entry; Delivery and Form" and "Notice to Investors" for a description of
additional transfer restrictions applicable to the notes.
No service charge will be made for any registration of transfer or
exchange of notes, but FMC may require payment of any tax or other governmental
charge payable in connection therewith.
Governing Law
The Indenture, including the Subsidiary Guarantees, and the notes are
governed by, and construed in accordance with, the laws of the State of New
York.
Certain Definitions
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquired Disqualified Stock" means, with respect to any specified
Person, Disqualified Stock of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Disqualified Stock incurred in connection with,
or in contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Acquired Preferred Stock" means, with respect to any specified Person,
Preferred Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Preferred Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Additional Assets" means (a) Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
FMC or another Restricted Subsidiary from any Person other than FMC or an
Affiliate of FMC, (b) any controlling interest or joint venture interest in
another business or (c) any other asset (other than securities, cash, Cash
Equivalents, or other current assets) to be owned by FMC or any Restricted
Subsidiary.
"Affiliate" of any specified Person means any other Person directly or
indirectly, through one or more intermediaries, controlling or controlled by or
under direct or indirect common control with such specified Person. For the
purpose of this definition, "control" when used with respect to any specified
Person means the possession, direct or indirect, of the power to manage or
direct or cause the direction of the management and policies of such Person
directly or indirectly, whether through the ownership of voting stock, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
(other than the creation of a Lien) of any assets (other than the disposition of
inventory or equipment in the ordinary course of business consistent with
industry practices or the disposition of Cash Equivalents) (provided that the
sale, conveyance or other disposition of all or substantially all the assets of
FMC and its Restricted Subsidiaries taken as a whole will be governed by
"Repurchase at the Option of Holders--Change of Control" and/or the provisions
described under the caption "Consolidation, Merger and Sale of Assets" and not
by the provisions of the Asset Sale covenant), (ii) the sale by FMC or any of
its Restricted Subsidiaries of Capital Stock of any of FMC's Restricted
Subsidiaries, Unrestricted Subsidiaries or Joint Ventures and (iii) the issuance
by any of FMC's Restricted Subsidiaries of Capital Stock of such Restricted
Subsidiary, in the case of each of the foregoing clauses (i), (ii) or (iii),
whether in a single transaction or a series of related transactions (A) that
have a fair market value in excess of $10.0 million or (B) for Net Proceeds in
excess of $10.0 million. Notwithstanding the foregoing: (a) a transfer of assets
by FMC to a Restricted Subsidiary or by a Restricted Subsidiary to FMC or to
another Restricted Subsidiary; (b) an issuance of Capital Stock by a Restricted
Subsidiary to FMC or to another Restricted Subsidiary; (c) Sale and Lease-Back
57
Transactions; and (d) Restricted Payments permitted by "Certain
Covenants--Restricted Payments" and Permitted Investments will not be deemed to
be an Asset Sale.
"Astaris" means Astaris LLC, a limited liability company organized and
existing under the laws of Delaware.
"Astaris Support Agreement" means the guaranty agreement, dated
September 14, 2000, made by FMC in favor of Astaris and in favor of the lenders
under the five-year credit agreement dated September 14, 2000 under which
Astaris is the borrower and Bank of America, N.A. is the administrative agent,
as such agreement may be modified, amended, restated or replaced; provided that
the terms of any such modification, amendment, restatement or replacement after
October 21, 2002 do not materially increase FMC's or any Restricted Subsidiary's
obligations thereunder and such terms (including as to tenor) are not more
onerous from a financial perspective, taken as a whole, to FMC and the
Restricted Subsidiaries.
"Astaris Indemnification Agreement" means the agreement, dated October
5, 2001, among FMC, 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 October 21, 2002 do not materially increase FMC's or any
Restricted Subsidiary's obligations thereunder and such terms (including as to
tenor) are not more onerous from a financial perspective, taken as a whole, to
FMC and the Restricted Subsidiaries.
"Attributable Debt" means, as of any date upon which a determination of
the amount thereof shall be computed, an amount determined by multiplying the
greater, at the time a Sale and Lease-Back Transaction (or a sale and lease-back
transaction entered into on or after the Investment Grade Date, if any) was
entered into, of (i) the fair value of the property, plant or facility subject
to such arrangement (as determined by FMC) or (ii) the net proceeds of the sale
of such property, plant or facility to the lender or investor, by a fraction of
which the numerator shall be the unexpired initial term of the lease of such
property as of the date of determination of such computation and of which the
denominator shall be the full initial term of such lease. Attributable Debt
shall not include any such arrangement for financing air, water or noise
pollution control facilities or sewage or solid waste disposal facilities or
involving industrial development bonds which are tax exempt pursuant to Section
103 of the United States Internal Revenue Code of 1986, as amended (or which
receive similar tax treatment under subsequent amendments thereto or successor
laws thereof).
"Bank Obligations" see "Security--Security Documents."
"Board of Directors" means the board of directors of FMC or any duly
authorized committee thereof.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person and (v) all warrants,
options or other rights to acquire any item listed in (i) through (iv) of this
definition.
"Cash Equivalents" means (a) United States dollars, (b) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (c) demand deposits, time
deposits and certificates of deposit with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year from the date of acquisition and overnight bank deposits, in each case with
any bank or trust company organized or licensed under the laws of the United
States or any State thereof having capital, surplus and undivided profits in
58
excess of $250 million, (d) repurchase obligations with a term of not more than
seven days for underlying securities of the type described in clauses (b) and
(c) above entered into with any financial institution meeting the qualifications
specified in clause (c) above, (e) commercial paper and other short-term
obligations (including variable-rate demand bonds), in each case rated at least
P-1 or A-1 by Moody's or S&P, respectively, (f) investments in any U.S.
dollar-denominated money market fund as defined by Rule 2a-7 of the General
Rules and Regulations promulgated under the Investment Company Act of 1940 and
(g) in the case of a Foreign Subsidiary, substantially similar investments
denominated in foreign currencies (including similarly capitalized foreign
banks).
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period, plus in each
case, without duplication:
(i) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period to the extent
that such provision for taxes was included in computing such
Consolidated Net Income;
(ii) the Fixed Charges of such Person and its Restricted
Subsidiaries for such period, to the extent that such Fixed Charges
were deducted in computing such Consolidated Net Income;
(iii) depreciation and amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such
depreciation and amortization were deducted in computing such
Consolidated Net Income; and
(iv) any non-cash charges reducing Consolidated Net Income for
such period (excluding any such non-cash charge to the extent that it
represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a
prior period); minus
(v) any non-cash items increasing Consolidated Net Income for
such period (without duplication, excluding any reversal of a reserve
for cash expenses, if the establishment of such reserve had previously
decreased Consolidated Net Income).
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or
profits of, and the depreciation and amortization of, a Restricted Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that the
Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(i) the Net Income of any Person that is not a Restricted
Subsidiary shall be included only to the extent of the lesser of (x)
the amount of dividends or distributions paid in cash (but not by means
of a loan) to the referent Person or a Restricted Subsidiary thereof or
(y) the referent Person's (or, subject to clause (ii), a Restricted
Subsidiary of the referent Person's) proportionate share of the Net
Income of such other Person;
(ii) the Net Income (but not loss) of any Restricted
Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been
obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary or its
stockholders; and
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(iii) the cumulative effect of a change in accounting
principles shall be excluded.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities (excluding any thereof constituting Funded
Debt by reason of being extendible or renewable), and (b) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the books and records of FMC and its
consolidated Subsidiaries and computed in accordance with generally accepted
accounting principles.
"Continuing Director" means, as of the date of determination, any
Person who:
(i) was a member of the Board of Directors on October 21,
2002; or
(ii) was nominated for election or elected to the Board of
Directors with the affirmative vote of at least a majority of the
Continuing Directors who were members of the Board of Directors at the
time of such nomination or election.
"Default" means any event that is, or with the giving of notice or the
lapse of time, or both, would constitute an Event of Default.
"Disqualified Stock" means any Capital 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 otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the notes mature; provided that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
date on which the notes mature shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are no more favorable to the holders of such Capital Stock than the provisions
described under the caption "Repurchase at Option of Holders" and such Capital
Stock specifically provides that such Person will not repurchase or redeem any
such stock pursuant to such provision prior to FMC's repurchase of such notes as
are required pursuant to such covenants. The "liquidation preference" of any
Disqualified Stock shall be the amount payable thereon upon liquidation prior to
any payment to holders of common stock or, if none, the amount payable by the
issuer thereof upon maturity or mandatory redemption.
"Existing Indebtedness" means (i) Indebtedness in existence on October
21, 2002 of FMC and its Restricted Subsidiaries that are Subsidiary Guarantors,
until such amounts are repaid, including all reimbursement obligations with
respect to letters of credit outstanding as of October 21, 2002 and (ii)
Indebtedness of Foreign Subsidiaries under Foreign Credit Lines in existence on
October 21, 2002, in each case in an amount not to exceed the maximum amount
which was incurred and available to be incurred under the terms thereof at
October 21, 2002 as set forth in an Officers' Certificate delivered to the
Trustee on October 21, 2002.
"Existing Notes Indentures" means, collectively, (i) the indenture
dated as of April 1, 1992 between FMC and Wachovia Bank, National Association,
successor to Harris Trust and Savings Bank, as trustee, and (ii) the indenture
dated as of July 1, 1996 between FMC and Wachovia Bank, National Association,
successor to Harris Trust and Savings Bank, as trustee.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that FMC or
any of its Restricted Subsidiaries or any other applicable Person incurs,
assumes or redeems any Indebtedness (other than revolving credit borrowings) or
issues or redeems Disqualified Stock or Preferred Stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the date on which the event for which the calculation of
the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption or redemption of Indebtedness or such issuance or
redemption of Disqualified Stock or Preferred Stock as if the same had occurred
at the beginning of the applicable four-quarter reference period.
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In addition, for purposes of making the computation referred to above:
(i) acquisitions that have been made by FMC or any of its
Restricted Subsidiaries or any other applicable Person, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to
such reference period and on or prior to the Calculation Date shall be
deemed to have occurred on the first day of the four-quarter reference
period;
(ii) the Consolidated Cash Flow and Fixed Charges attributable
to operations or businesses disposed of prior to the Calculation Date,
shall be excluded, but, in the case of such Fixed Charges, only to the
extent that the obligations giving rise to such Fixed Charges will not
be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date; and
(iii) if since the beginning of the four-quarter reference
period any Person was designated as an Unrestricted Subsidiary or
redesignated as or otherwise became a Restricted Subsidiary, such event
shall be deemed to have occurred on the first day of the four-quarter
reference period.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of:
(i) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
determined in accordance with GAAP;
(ii) all commissions, discounts and other fees and charges
incurred in respect of letters of credit or bankers' acceptance
financings, determined in accordance with GAAP, and net payments or
receipts (if any) pursuant to Hedging Obligations of the types
described in clauses (i) through (iii) of the definition thereof to the
extent such Hedging Obligations relate to Indebtedness that is not
itself a Hedging Obligation;
(iii) the consolidated interest expense of such Person and
its Restricted Subsidiaries that was capitalized during such period;
(iv) any interest expense on Indebtedness of another Person
that is Guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries (whether or not such Guarantee or Lien is called upon);
(v) amortization or write-off of debt discount in connection
with any Indebtedness of FMC and its Restricted Subsidiaries, on a
consolidated basis in accordance with GAAP other than amortization of
deferred financing costs incurred on or prior to October 21, 2002; and
(vi) the product of (a) all dividend payments (other than any
payments to the referent Person or any of its Restricted Subsidiaries
and any dividends payable in the form of Qualified Capital Stock) on
any series of Preferred Stock or Disqualified Stock of such Person and
its Restricted Subsidiaries, times (b) (x) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP or (y) if the dividends are deductible by such
Person for income tax purposes, one.
"Foreign Credit Line" means a credit facility or similar credit
arrangement made available by a financial institution to any Foreign Subsidiary
or to its customers. Foreign Credit Lines do not include Indebtedness
constituting Hedging Obligations or Indebtedness described under clause (xiv) of
the second paragraph under "Certain Covenants--Limitation on Incurrence of
Additional Indebtedness and Issuance of Preferred Stock."
"Foreign Subsidiary" means any Restricted Subsidiary that is not
organized under the laws of the United States, any State thereof or the District
of Columbia.
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"Funded Debt" means all Indebtedness, whether or not evidenced by a
bond, debenture, note or similar instrument or agreement, for the repayment of
money borrowed, having a maturity of more than 12 months from the date of its
creation or having a maturity of less than 12 months from the date of its
creation but by its terms being renewable or extendible beyond 12 months from
such date at the options of the borrower. For the purpose of determining "Funded
Debt" of any corporation, there shall be excluded any particular Indebtedness
if, on or prior to the maturity thereof, there shall have been deposited with
the proper depository in trust the necessary funds for the payment, redemption
or satisfaction of such Indebtedness.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, as in effect on October 21, 2002.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or Disqualified
Stock of any other Person and, without limiting the generality of the foregoing,
any obligation, direct or indirect, contingent or otherwise, of such Person (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or Disqualified Stock of such other Person (including those
arising by virtue of partnership arrangements) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Indebtedness or
Disqualified Stock of the payment thereof or to protect such obligee against
loss in respect thereof in whole or in part (including by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, to
maintain financial statement conditions or otherwise); provided that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) forward foreign
exchange contracts or currency swap agreements, (iii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency values and (iv) commodity price protection agreements or
commodity price hedging agreements designed to manage fluctuations in prices or
costs in energy, raw materials, manufactured products or related commodities.
"incur" means, with respect to any Indebtedness, to incur, create,
issue, assume or Guarantee such Indebtedness. If any Person has become or
becomes a Restricted Subsidiary on any date after October 21, 2002 (including by
redesignation of an Unrestricted Subsidiary), the Indebtedness and Capital Stock
of such Person outstanding on such date will be deemed to have been Incurred by
such Person on such date for purposes of the covenant described under "Certain
Covenants--Limitation on Incurrence of Additional Indebtedness and Issuance of
Preferred Stock" but will not be considered the sale or issuance of Capital
Stock for purposes of the covenant described under "Repurchase at Option of
Holders -- Asset Sales." The accretion of original issue discount or payment of
interest in kind will not be considered an incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person,
. any indebtedness of such Person, whether or not contingent,
in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments;
. letters of credit (or reimbursement agreements in respect
thereof) or banker's acceptances;
. Capital Lease Obligations and Attributable Debt in respect of
Sale and Lease-Back Transactions;
. the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued
expense or trade payable; and
. net Hedging Obligations,
if and to the extent any of the foregoing indebtedness (other than letters
of credit and Hedging Obligations) would appear as a liability on a balance
sheet of such Person prepared in accordance with GAAP, as well as
. all indebtedness of others secured by a Lien on any asset of
such Person whether or not such indebtedness is assumed by
such Person; provided that, for purposes of determining the
amount of any Indebtedness of the type described in this
clause, if recourse with respect to such Indebtedness
62
is limited to such asset, the amount of such Indebtedness
shall be limited to the lesser of the fair market value of
such asset or the amount of such Indebtedness; and
. to the extent not otherwise included, the Guarantee by such
Person of any indebtedness of the types described above of any
other Person.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, in the case of any Indebtedness that does not require
current payments of interest and (ii) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Investment Grade" means a rating of both BBB- or higher by S&P and
Baa3 or higher by Moody's or the equivalent of such ratings by S&P or Moody's.
"Investments" means, with respect to any Person, all investments by
such Person in another Person (including an Affiliate of such Person) in the
form of direct or indirect loans, advances or extensions of credit to such other
Person (including any Guarantee by such Person of the Indebtedness or
Disqualified Stock of such other Person) or capital contributions or purchases
or other acquisitions for consideration of Indebtedness, Capital Stock or other
securities of such other Person, together with all items that are or would be
classified as investments of such investing Person on a balance sheet prepared
in accordance with GAAP; provided that:
(w) investments made in connection with a bankruptcy
proceeding in substitution of FMC's interest as a creditor in such
proceeding;
(x) trade credit and accounts receivable in the ordinary
course of business;
(y) commissions, loans, advances, fees and compensation paid
in the ordinary course of business to officers, directors and
employees; and
(z) reimbursement obligations in respect of letters of credit
and tender, bid, performance, government contract, surety and appeal
bonds,
in each case solely with respect to FMC or any of its Restricted Subsidiaries
shall not be considered Investments.
"Joint Venture" means any joint venture between FMC or any Restricted
Subsidiary and any other Person, whether or not such joint venture is a
Subsidiary of FMC or any Restricted Subsidiary.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, and any
lease in the nature thereof) or the assignment or conveyance of any right to
receive income therefrom.
"Make Whole Amount" see "Optional Redemption."
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined, in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however,
(i) any gain or loss, together with any related provision for
taxes on such gain or loss, realized in connection with
(a) any Asset Sale or any disposition pursuant to a
Sale and Lease-Back Transaction or
63
(b) the disposition of any securities by such Person
or any of its Restricted Subsidiaries or the extinguishment of
any Indebtedness of such Person or any of its Restricted
Subsidiaries; and
(ii) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds (excluding any
proceeds deemed to be "cash" pursuant to the provisions described under
"Repurchase at Option of Holders--Asset Sales") received by FMC or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of (i) the direct out-of-pocket
costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees and sales commissions) and any relocation
expenses incurred as a result thereof, (ii) taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), (iii) amounts required to be applied to the
repayment of Indebtedness (other than Indebtedness under the Credit Agreement)
secured by a Lien on any asset sold in such Asset Sale, or which must by the
terms of such Lien or by applicable law be repaid out of the proceeds of such
Asset Sale, (iv) all payments made with respect to liabilities directly
associated with the assets which are the subject of the Asset Sale, including,
without limitation, trade payables and other accrued liabilities and (v) any
reserves for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP and any reserve for future liabilities
established in accordance with GAAP; provided that the reversal of any such
reserve that reduced Net Proceeds when issued shall be deemed a receipt of Net
Proceeds in the amount of such proceeds on such day.
"Credit Agreement" means the credit agreement to be dated October 21,
2002 by and among FMC, the Subsidiary Guarantors and the other parties thereto,
including the related notes, instruments and agreements executed in connection
therewith, as amended, restated, modified, extended, renewed, refunded, replaced
or refinanced, in whole or in part, from time to time, whether or not with the
same lenders or agent and whether or not for a different principal amount.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.
"Officer" means any of the following officers of FMC: Chairman,
President, Chief Executive Officer, Treasurer, Chief Financial Officer, Chief
Accounting Officer, Secretary, Controller or any Executive Vice President or
Senior Vice President.
"Officers' Certificate" means a certificate signed by two Officers.
"Pari Passu Indebtedness" means any Indebtedness of FMC or a Subsidiary
Guarantor that is not subordinated to the notes or such Subsidiary Guarantor's
Subsidiary Guarantee, as the case may be.
"Payment Default" means, with respect to any Indebtedness, a failure to
pay the principal of such Indebtedness at its Stated Maturity after giving
effect to any applicable grace period provided in the instrument(s) governing
such Indebtedness.
"Permitted 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 formulated products and related
organic and inorganic materials and any business reasonably related, incidental,
complementary or ancillary thereto.
"Permitted Foreign Indebtedness" means Indebtedness of a Foreign
Subsidiary incurred pursuant to clauses (iii), (iv) or (ix) of "Certain
Covenants--Limitation on Incurrence of Additional Indebtedness and Issuance of
Preferred Stock."
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"Permitted Investments" means:
(a) any Investment in FMC or in a Restricted Subsidiary of
FMC;
(b) any Investment in Cash Equivalents;
(c) any Investment by FMC or any Subsidiary of FMC in a
Person, if as a result of such Investment: (i) such Person becomes a
Restricted Subsidiary of FMC that is a Subsidiary Guarantor or (ii)
such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all its assets to, or is liquidated
into, FMC or a Restricted Subsidiary of FMC that is a Subsidiary
Guarantor;
(d) any non-cash consideration received as consideration in an
Asset Sale that was made pursuant to and in compliance with "Repurchase
at Option of Holders--Asset Sales";
(e) any acquisition of assets or Capital Stock solely in
exchange for, or out of the net cash proceeds of a substantially
concurrent, issuance of Capital Stock (other than Disqualified Stock)
of FMC;
(f) Hedging Obligations entered into in the ordinary course
of business and otherwise permitted under the Indenture;
(g) any Investment received by FMC or any Restricted
Subsidiary as consideration for the settlement of any litigation,
arbitration or claim in bankruptcy or in partial or full satisfaction
of accounts receivable owed by a financially troubled Person to the
extent reasonably necessary in order to prevent or limit any loss by
FMC or any of its Restricted Subsidiaries in connection with such
accounts receivable;
(h) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary
course of business;
(i) Investments consisting of guarantees constituting
Permitted Vendor Indebtedness or payments on guarantees constituting
Permitted Vendor Indebtedness;
(j) loans and advances to suppliers and customers of FMC and
its Subsidiaries that are made in the ordinary course of business and
are consistent with past practice in an aggregate amount not to exceed
at any time outstanding $5.0 million; and
(k) Investments in an aggregate amount, taken together with
all other Investments made in reliance on this clause (k), not to
exceed at any time outstanding $25.0 million (after giving effect to
any reductions in the aggregate amount of such Investments as a result
of the disposition thereof, including through liquidation, repayment or
other reduction, including by way of dividend or distribution, for
cash, the aggregate amount of such reductions not to exceed the
aggregate amount of such Investments outstanding and previously made
pursuant to this clause (k)).
"Permitted Liens" means:
(1) Liens in favor of FMC or any Subsidiary Guarantor;
(2) Liens securing the notes and the Subsidiary Guarantees;
(3) Liens on property of a Person existing at the time it
becomes a Subsidiary or at the time it is merged into or consolidated
with FMC or a Subsidiary; provided that such Liens were in existence
prior to the contemplation of such merger, consolidation or acquisition
and do not extend to any assets of FMC or its Restricted Subsidiaries
other than those of the Person merged into or consolidated with FMC or
that becomes a Restricted Subsidiary of FMC;
65
(4) Liens on property (together with general intangibles and
proceeds related to such property) existing at the time of acquisition
thereof by FMC or any Restricted Subsidiary of FMC; provided that such
Liens were in existence prior to the contemplation of such acquisition;
(5) Liens (including the interest of a lessor under a capital
lease) on any asset (together with general intangibles and proceeds
related to such property) existing at the time of acquisition thereof
or incurred within 180 days following the time of acquisition or
completion of construction thereof, whichever is later, to secure or
provide for the payment of all or any part of the purchase price (or
construction price) thereof (including obligations of the lessee under
any such capital lease);
(6) Liens imposed by law, such as laborers', other
employees', vendors', materialmen's, carriers', warehousemen's and
mechanics' Liens on the property of FMC or any Restricted Subsidiary,
including Liens arising out of letters of credit issued to secure FMC's
obligations thereunder;
(7) easements, building restrictions, rights-of-ways,
irregularities of title and such other encumbrances or charges not
interfering in any material respect with the ordinary conduct of
business of FMC or any of its Restricted Subsidiaries;
(8) leases, subleases or licenses by FMC or any of its
Restricted Subsidiaries as lessor, sublessor or licensor in the
ordinary course of business and otherwise permitted by the Indenture;
(9) Liens securing reimbursement obligations with respect to
commercial letters of credit obtained in the ordinary course of
business which encumber documents and other property or assets relating
to such letters of credit and products and proceeds thereof;
(10) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of nondelinquent customs duties in
connection with the importation of goods;
(11) Liens encumbering customary initial deposits and margin
deposits, netting provisions and setoff rights, in each case securing
Indebtedness under Hedging Obligations that are permitted to be
incurred under clause (vi) under "Certain Covenants--Limitation on
Incurrence of Additional Indebtedness and Issuance of Preferred Stock";
(12) Liens incurred in the ordinary course of business to
secure nondelinquent obligations arising from statutory, regulatory,
contractual or warranty requirements of FMC or its Restricted
Subsidiaries, including Liens securing letters of credit issued to
secure FMC's obligations thereunder, or any tender, bid, performance,
government contract, surety or appeal bonds or other obligations of a
like nature for which a reserve or other appropriate provision, if any,
as shall be required by GAAP shall have been made;
(13) Liens arising out of consignment or similar arrangements
for the sale of goods entered into by FMC or any Restricted Subsidiary
in the ordinary course of business in accordance with industry
practice;
(14) Liens arising by reason of deposits necessary to qualify
FMC or any Restricted Subsidiary to conduct business, maintain
self-insurance or comply with any law;
(15) netting provisions and setoff rights in favor of
counterparties to agreements creating Hedging Obligations;
(16) Liens securing the Bank Obligations on any tangible or
intangible asset or property of FMC or any Restricted Subsidiary,
whether such asset or property is real, personal or mixed, to the
extent such Liens are or would have been permitted by the provisions of
the Existing Notes Indentures as such Existing Notes Indentures were in
effect on October 21, 2002 (and whether or not in effect after October
21, 2002) without equally and ratably securing any other Indebtedness
(including the notes) of FMC;
(17) Liens on any tangible or intangible asset or property of
a Foreign Subsidiary securing Permitted Foreign Indebtedness of such
Foreign Subsidiary;
66
(18) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings, prejudgment Liens that are being
contested in good faith by appropriate proceedings and Liens arising
out of judgments or awards against FMC or any Restricted Subsidiary
with respect to which FMC or such Restricted Subsidiary at the time
shall be prosecuting an appeal or proceedings for review and with
respect to which a stay of execution shall have been secured pending
such appeal or proceedings for review; provided that in each case any
reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor;
(19) Liens securing assets under construction arising from
progress or partial payments by a customer of FMC or its Restricted
Subsidiaries relating to such property or assets;
(20) Liens resulting from the deposit of funds or evidences of
Indebtedness for the purpose of defeasing Indebtedness ranking pari
passu with the notes;
(21) Liens resulting from the deposit of funds or evidences of
Indebtedness in amounts sufficient to cash-collateralize letters of
credit in an aggregate principal amount not to exceed $43.4 million
supporting Indebtedness of FMC consisting of industrial and pollution
control revenue bonds;
(22) customary Liens for the fees, costs and expenses of
trustees and escrow agents pursuant to any indenture, escrow agreement
or similar agreement establishing a trust or escrow arrangement, and
Liens pursuant to merger agreements, stock purchase agreements, asset
sale agreements, option agreements and similar agreements in respect of
the disposition of property or assets of FMC or any Restricted
Subsidiary on the property to be disposed of, to the extent such
dispositions are permitted hereunder;
(23) Liens on assets (other than any Principal Property) of
FMC or any Restricted Subsidiary arising as a result of a Sale and
Lease-Back Transaction with respect to such assets; provided that the
proceeds from such Sale and Lease-Back Transaction are applied to the
repayment of Indebtedness or acquisition of Additional Assets or the
making of capital expenditures pursuant to the provisions described
under the caption "Repurchase at Option of Holders--Asset Sales";
(24) Liens existing on October 21, 2002, other than Liens
permitted by clauses (16) and (17) hereof;
(25) the interest of a lessor or licensor under an operating
lease or license under which FMC or any of its Restricted Subsidiaries
is lessee, sublessee or licensee, including protective financing
statement filings;
(26) any extension, renewal, substitution or replacement (or
successive extensions, renewals, substitutions or replacements), as a
whole or in part, of any of the Liens described in clauses (1) through
(24) of this definition; provided that such extension, renewal or
replacement Lien shall be limited to the same property or assets that
secured the Lien being so extended, renewed or replaced;
(27) licenses or leases by FMC or any of its Restricted
Subsidiaries as licensor or lessor in the ordinary course of business
and otherwise permitted by the Indenture for patents, copyrights,
trademarks, trade names and other intellectual property;
(28) Liens resulting from operation of law with respect to any
judgments, awards or orders to the extent that such judgments, awards
or orders do not cause or constitute an Event of Default; provided that
any such Liens shall be paid, discharged, bonded or stayed prior to the
sale or forfeiture of any property on account of such Liens; and
(29) other Liens or assets of FMC or any Restricted Subsidiary
of FMC securing Indebtedness or other obligations to be outstanding
that are permitted under the Indenture at any one time outstanding not
to exceed $10.0 million;
67
provided that, in the case of Collateral, Permitted Liens shall mean those Liens
permitted to be incurred against the Collateral under the Credit Agreement.
"Permitted Refinancing" means any Indebtedness of FMC or any of its
Subsidiaries issued in exchange for, or the net proceeds of which are used
solely to extend, refinance, renew, replace, defease or refund, other
Indebtedness of FMC or any of its Restricted Subsidiaries (including without
limitation Foreign Credit Lines); provided that:
(i) the principal amount (or liquidation preference in the
case of Preferred Stock) of such Permitted Refinancing (or if such
Permitted Refinancing is issued at a discount, the initial issuance
price of such Permitted Refinancing) does not exceed the principal
amount of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of any premiums paid and
reasonable expenses incurred in connection therewith);
(ii) such Permitted Refinancing has a Stated Maturity date
later than the Stated Maturity date of, and has a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated by its terms in right of
payment to the notes or the Subsidiary Guarantees, such Permitted
Refinancing has a Stated Maturity date later than the Stated Maturity
date of, and is subordinated by its terms in right of payment to, the
notes on subordination terms at least as favorable to the holders of
notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(iv) such Indebtedness is incurred by FMC or a Subsidiary
Guarantor if FMC or a Subsidiary Guarantor is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(v) such Indebtedness is incurred by FMC or a Restricted
Subsidiary if a Restricted Subsidiary that is not a Subsidiary
Guarantor is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Permitted Vendor Indebtedness" means Indebtedness under Foreign Credit
Lines incurred by Subsidiaries of FMC organized in Brazil (and Guarantees by FMC
thereof) consisting of (a) import financing Indebtedness incurred directly by
any such Subsidiary for the purpose of conducting vendor financing programs in
South America, and (b) Guarantees by any such Subsidiary of Indebtedness
incurred by customers in order to finance the purchase of products of FMC and
such Subsidiaries or the purchase of third-party agricultural products, in an
aggregate principal amount not to exceed the amount incurred and available to be
incurred at October 21, 2002 as set forth in an Officers' Certificate delivered
to the Trustee on October 21, 2002.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof or other entity of any kind.
"Pledged Principal Properties" see "Security--Security Documents."
"Pledged Stock" see "Security--Security Documents."
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of preferred or preference stock of such Person
(including any such stock constituting Disqualified Stock) which is outstanding
or issued on or after the date of the Indenture.
"Principal Property" see "Security--Security Documents."
68
"Public Equity Offering" means any underwritten public offering of
common stock of FMC generating gross proceeds to FMC of at least $50.0 million.
"Purchase Money Obligations" means Indebtedness of FMC or a Subsidiary
Guarantor incurred in the ordinary course of business for the purpose of
financing all or any part of the purchase price, cost of installation,
construction or improvement of an asset; provided, however, that (1) the amount
of such Indebtedness shall not exceed such purchase price or cost, (2) such
Indebtedness shall not be secured by any asset other than the asset being
financed, or in the case of real property or fixtures, the real property or
fixtures to which such asset is attached and (3) such Indebtedness shall be
incurred within 180 days after the acquisition of such asset by FMC or such
Subsidiary Guarantor, or such installation, construction or improvement.
"Qualified Capital Stock" shall mean all Capital Stock of a Person
other than Disqualified Stock of such Person.
"Reference Treasury Dealer" means each of (1) Salomon Smith Barney Inc.
or any successor; provided that if the foregoing shall not be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"),
Issuer shall substitute therefor another Primary Treasury Dealer and (2) any
Primary Treasury Dealer selected by Issuer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer on any date of redemption, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such date of redemption.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means (a) prior to the Investment Grade Date,
any Subsidiary of FMC that is not an Unrestricted Subsidiary and (b) from and
after the Investment Grade Date, any Subsidiary of FMC (i) substantially all the
property of which is located within the continental United States of America or
Canada and (ii) which owns or leases a Principal Property. Unless the context
otherwise requires, each reference to a "Restricted Subsidiary" shall refer to a
Subsidiary of FMC.
"S&P" means Standard & Poor's Ratings Service, a division of the
McGraw-Hill Companies, and its successors.
"Sale and Lease-Back Transaction" means any arrangement with any Person
(other than FMC or a Subsidiary), or to which any such Person is a party,
providing for the leasing, pursuant to a capital lease that would at such time
be required to be capitalized on a balance sheet in accordance with GAAP, to FMC
or a Restricted Subsidiary of any property or asset which has been or is to be
sold or transferred by FMC or such Restricted Subsidiary to such Person or to
any other Person (other than FMC or a Subsidiary) to which funds have been or
are to be advanced by such Person.
"Security Documents" mean, collectively:
(1) the Collateral Trust Agreement, the Shared Collateral
Security Agreement and the Principal Property Mortgages (each as
defined in the Collateral Trust Agreement); and
(2) all security agreements, mortgages, deeds of trust,
pledges, collateral assignments and other agreements or instruments
evidencing or creating any security interests or Liens in favor or for
the benefit of any Trustee and any holders of the notes in any or all
of the Collateral,
in each case as amended from time to time in accordance with its terms and the
terms of the Indenture.
"Significant Subsidiary" means any Restricted Subsidiary of FMC that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act of 1933, as amended,
as such Regulation was in effect on October 21, 2002.
69
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness (or any later date established by any amendment to
such original documentation) and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Debt" means Indebtedness that is by its terms
subordinated to the notes and the Subsidiary Guarantees, as applicable.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) or (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof). Notwithstanding the
foregoing, Astaris shall not be deemed a Subsidiary of FMC at any time solely by
virtue of FMC's control of the voting power to elect more than 50% of the
managers of Astaris, so long as FMC and its Restricted Subsidiaries have not,
directly or indirectly, made any Investment in Astaris other than as an
Investment pursuant to the first sentence of the covenant described under
"Certain Covenants--Restricted Payments" or other than pursuant to the Astaris
Support Agreement or the Astaris Indemnification Agreement.
"Subsidiary Guarantor" means any Subsidiary that executes a Subsidiary
Guarantee in accordance with the provisions of the Indenture, in each case,
until the Subsidiary Guarantee of such Person is released in accordance with the
provisions of the Indenture.
"Treasury Rate" see "Optional Redemption."
"Treasury Securities" means obligations issued or guaranteed by the
United States government or any agency thereof.
"Unrestricted Subsidiary" means (i) any Subsidiary of FMC that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
resolution and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors may designate any Subsidiary of FMC (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary
or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds
any Lien on any property of, FMC or any other Subsidiary of FMC that is not a
Subsidiary of the Subsidiary to be so designated; provided that
(a) any Guarantee by FMC or any Restricted Subsidiary of any
Indebtedness of the Subsidiary being so designated or any of its
Subsidiaries shall be deemed an "Incurrence" of such Indebtedness and
an "Investment" by FMC or such Restricted Subsidiary (or both, if
applicable) at the time of such designation,
(b) such designation would be permitted under the covenant
described under "Certain Covenants--Restricted Payments," and
(c) if applicable, the Investment and the incurrence of
Indebtedness referred to in clause (a) of this proviso would be
permitted under "Certain Covenants--Limitation on Incurrence of
Additional Indebtedness and Issuance of Preferred Stock" and
"--Restricted Payments."
Any such designation by the Board of Directors pursuant to clause (i)
above shall be evidenced to the Trustee by filing with the Trustee a certified
copy of the resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by "Certain Covenants--Restricted Payments" and
"--Limitation on Incurrence of Additional Indebtedness and Issuance of Preferred
Stock."
70
If at any time FMC or any Restricted Subsidiary Guarantees any
Indebtedness of such Unrestricted Subsidiary or makes any other Investment in
such Unrestricted Subsidiary and such incurrence of Indebtedness or Investment
would not be permitted under "Certain Covenants--Limitation on Incurrence of
Additional Indebtedness and Issuance of Preferred Stock" and "--Restricted
Payments," it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of FMC as of such date (and, if
such Indebtedness is not permitted to be incurred as of such date under "Certain
Covenants--Limitation on Incurrence of Additional Indebtedness and Issuance of
Preferred Stock," FMC shall be in default of such covenant). The Board of
Directors may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of FMC of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under "Certain
Covenants--Limitation on Incurrence of Additional Indebtedness and Issuance of
Preferred Stock" and (ii) no Default or Event of Default would be in existence
following such designation.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(i) the sum of the products obtained by multiplying
(a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect
thereof, by
(b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making
of such payment, by
(ii) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all the outstanding Capital Stock of which (other than
directors' qualifying shares) shall at the time be owned by such Person or by
one or more Wholly Owned Restricted Subsidiaries of such Person or by such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
71
EXCHANGE OFFER; REGISTRATION RIGHTS
FMC, the subsidiary guarantors and the initial purchasers entered into
a registration rights agreement relating to the outstanding notes. Pursuant to
the registration rights agreement, FMC and the subsidiary guarantors agreed, at
our cost, for the benefit of the holders of the notes, to:
. no later than December 20, 2002, file a registration statement
with the SEC with respect to a registered offer to exchange
the notes for our new notes having terms substantially
identical in all material respects to the outstanding notes
(except that the exchange notes will not contain terms with
respect to transfer restrictions);
. use our respective best efforts to cause the exchange offer
registration statement to be declared effective under the
Securities Act not later than March 20, 2003; and
. use our respective best efforts to cause the exchange offer to
be consummated not later than April 18, 2003.
Upon the effectiveness of the exchange offer registration statement, we
and the subsidiary guarantors will offer the new notes in exchange for the
surrender of the outstanding notes. We and the subsidiary guarantors will keep
the exchange offer open for not less than 20 business days (or longer if
required by applicable law) after the date notice of the exchange offer is
mailed to the holders. For each outstanding note surrendered to us pursuant to
the exchange offer, the holder of such outstanding note will receive a new note
having a principal amount equal to that of the surrendered outstanding note.
Interest on new note will accrue from the last interest payment date on which
interest was paid on the outstanding note surrendered in exchange therefor or,
if no interest has been paid on such outstanding note, from the date of its
original issue.
Under existing SEC interpretations, the new notes will be freely
transferable by holders other than our affiliates after the exchange offer
without further registration under the Securities Act if the holder of the new
notes represents that it is acquiring the new notes in the ordinary course of
its business, that it has no arrangement or understanding with any person to
participate in the distribution of the new notes and that it is not our
affiliate, as such terms are interpreted by the SEC; provided that
broker-dealers receiving new notes in the exchange offer will have a prospectus
delivery with respect to resales of such new notes. While the SEC has not taken
a position with respect to this particular transaction, under existing SEC
interpretations relating to transactions structured substantially like the
exchange offer, participating broker-dealers may fulfill their prospectus
delivery requirements with respect to new notes (other than a resale of an
unsold allotment from the original sale of the notes) with the prospectus
contained in the exchange offer registration statement. Under the registration
rights agreement, we are required to allow participating broker-dealers and
other persons, if any, with similar prospectus delivery requirements to use the
prospectus contained in the exchange offer registration statement in connection
with the resale of such new notes for 180 days following the effective date of
such exchange offer registration statement (or such shorter period during which
participating broker-dealers are required by law to deliver such prospectuses).
A holder of outstanding notes (other than certain specified holders)
who wishes to exchange such outstanding notes for new notes in the exchange
offer will be required to represent that any new notes to be received by it will
be acquired in the ordinary course of its business and that at the time of the
commencement of the exchange offer it has no arrangement or understanding with
any person to participate in the distribution (within the meaning of the
Securities Act) of the new notes and that it is not our "affiliate," as defined
in Rule 405 of the Securities Act, or if it is our affiliate, that it will
comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable. If a holder is a broker-dealer that
will receive new notes for its own account in exchange for outstanding notes
that were acquired as a result of market-making or other trading activities, it
will be required to acknowledge that it will deliver a prospectus in connection
with any resale of such new notes.
In the event that:
. applicable interpretations of the staff of the SEC do not
permit us and the subsidiary guarantors to effect such an
exchange offer; or
. for any other reason the exchange offer is not consummated
within 180 days after the issue date; or
72
. prior to the 20th day following consummation of the exchange
offer:
- the initial purchasers so request with respect to
outstanding notes not eligible to be exchanged for
new notes in the exchange offer;
- any holder of outstanding notes notifies us that it
is not eligible to participate in the exchange offer;
or
- an initial purchaser notifies us that it will not
receive freely tradeable new notes in exchange for
outstanding notes constituting any portion of an
unsold allotment,
we and the subsidiary guarantors will, subject to certain conditions, at our
cost:
. as promptly as practicable, file a shelf registration
statement covering resales of the outstanding notes or the new
notes, as the case may be;
. use our respective best efforts to cause the shelf
registration statement to be declared effective under the
Securities Act; and
. keep the shelf registration statement effective until the
earliest of (A) the time when the notes covered by the shelf
registration statement can be sold pursuant to Rule 144
without any limitations under clauses (c), (e), (f) and (h) of
Rule 144, (B) two years from the effective date of the shelf
registration statement (or until one year from the effective
date of the shelf registration statement if the shelf
registration statement is filed at the request of an initial
purchaser) and (C) the date on which all notes registered
thereunder are disposed of in accordance therewith.
We and the subsidiary guarantors will, in the event a shelf
registration statement is filed, among other things, provide to each holder for
whom such shelf registration statement was filed copies of the prospectus which
forms a part of the shelf registration statement, notify each such holder when
the shelf registration statement has become effective and take certain other
actions as are required to permit unrestricted resales of the outstanding notes
or the new notes, as the case may be. A holder selling such notes or new notes
pursuant to the shelf registration statement generally would be required to be
named as a selling security holder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will be
bound by the provisions of the registration rights agreements which are
applicable to such holder (including certain indemnification obligations).
In the event that:
. on or before December 20, 2002, neither the exchange offer
registration statement nor the shelf registration statement
has been filed with the SEC;
. on or before March 20, 2002, the exchange offer registration
statement has not been declared effective;
. on or before April 18, 2003, neither the exchange offer has
been consummated nor the shelf registration statement has been
declared effective; or
. after either the exchange offer registration statement or the
shelf registration statement has been declared effective, such
registration statement thereafter ceases to be effective or
usable (subject to certain exceptions) in connection with
resales of notes or new notes in accordance with and during
the period specified in the registration rights agreements
(each such event a "registration default"),
additional interest will accrue on the aggregate principal amount of the
outstanding notes and the new notes (in addition to the stated interest on the
outstanding notes and the exchange notes) from and including the date on which
any such registration default has occurred to but excluding the date on which
all registration defaults have been cured. Additional interest will accrue at an
initial rate of 0.25% per annum, which rate shall increase by 0.25% per annum
for each subsequent 90-day period during which such registration default
continues up to a maximum of 1.00% per annum.
The summary herein of certain provisions of the registration rights
agreement and the notes does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all the provisions of the
registration rights agreement, the indenture and the notes.
73
BOOK-ENTRY; DELIVERY AND FORM
Except as set forth below, the new notes will initially be issued in
the form of one or more fully registered notes in global form without coupons.
Each global note shall be deposited with the trustee, as custodian for, and
registered in the name of DTC or a nominee thereof. The outstanding notes to the
extent validly tendered and accepted and directed by their holders in their
letters of transmittal, will be exchanged through book-entry electronic transfer
for the global note.
Except as set forth below, the global note may be transferred, in which
but not in part, solely to another nominee of DTC or to a successor of DTC or
its nominee. Beneficial interests in the global note may not be exchanged for
notes in certificated form except in the limited circumstances described below.
The Global Notes
We expect that pursuant to procedures established by DTC
. upon the issuance of the global notes, DTC or its custodian
will credit, on its internal system, the principal amount of
notes of the individual beneficial interests represented by
such global notes to the respective accounts of persons who
have accounts with such depositary, and
. ownership of beneficial interests in the global notes will be
shown on, and the transfer of such ownership will be effected
only through:
- records maintained by DTC or its nominee with respect
to interests of persons who have accounts with DTC
"participants" and
- the records of participants with respect to interests
of persons other than participants.
So long as DTC, or its nominee, is the registered owner or holder of
the global notes, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the notes represented by such global notes for all
purposes under the indenture. No beneficial owner of an interest in the global
notes will be able to transfer that interest except in accordance with DTC's
procedures, in addition to those provided for under the indenture with respect
to the notes.
Payments of the principal of, premium, if any, and interest on the
global notes will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. None of us, the trustee or any paying agent will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global notes
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interest.
We expect that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, and interest on the global notes, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global notes as
shown on the records of DTC or its nominee. We also expect that payments by
participants to owners of beneficial interests in the global notes held through
such participants will be governed by standing instructions and customary
practice, as is now the case with securities held for the accounts of customers
registered in the names of nominees for such customers. Such payments will be
the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary
way through DTC's same-day funds system in accordance with DTC rules and will be
settled in same-day funds. If a holder requires physical delivery of a
certificated note for any reason, including to sell notes to persons in states
that require physical delivery of the notes, or to pledge such securities, such
holder must transfer its interest in the global notes, in accordance with the
normal procedures of DTC and with the procedures set forth in the indenture.
Consequently, the ability to transfer notes or to pledge notes as collateral
will be limited to such extent.
Notes that are issued as described below under "--Certificated Notes,"
will be issued in registered definitive form without coupons (each, a
"Certificated Note"). Upon the transfer of Certificated Notes, such
74
certificated notes may, unless the global note has previously been exchanged for
certificated notes, be exchanged for an interest in the global note representing
the principal amount of notes being transferred.
DTC has advised us that it will take any action permitted to be taken
by a holder of notes (including the presentation of notes for exchange as
described below) only at the direction of one or more participants to whose
account the DTC interests in the global notes are credited and only in respect
of such portion of the aggregate principal amount of notes as to which such
participant or participants has or have given such direction. However, if there
is an event of default under the indenture, DTC will exchange the global notes
for certificated notes, which it will distribute to its participants.
DTC has advised us as follows:
. DTC is a limited-purpose trust company organized under the
laws of the State of New York,
. a member of the Federal Reserve System,
. a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and
. a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act.
DTC was created to hold securities for its participants and facilitate
the clearance and settlement of securities transactions between participants
through electronic bookentry changes in accounts of its participants, thereby
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing corporations
and certain other organizations. Indirect access to the DTC system is available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly ("indirect participants").
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the global notes among participants of DTC,
it is under no obligation to perform such procedures and such procedures may be
discontinued at any time. Neither we nor the trustee will have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
Certificated Notes
If (1) we notify the Trustee in writing that DTC is no longer willing
or able to act as a depository and we are unable to locate a qualified successor
within 90 days or (2) we, at our option, notify the Trustee in writing that we
elect to cause the issuance of new notes in definitive form under the indenture,
then, upon surrender by DTC of its global note, certificated securities will be
issued to each person that DTC identifies as the beneficial owner of the
exchange notes represented by the global note. In addition, any person having a
beneficial interest in a global note or any holder of outstanding notes whose
outstanding notes have been accepted for exchange may, upon request to the
Trustee or the Exchange Agent, as the case may be, exchange such beneficial
interest or outstanding notes for Certificated Notes.
Upon any such issuance, the Trustee is required to register such
Certificated Notes in the name of such person or persons (or the nominee of any
thereof), and cause the same to be delivered thereto.
Neither we nor the Trustee shall be liable for any delay by DTC or any
particular or indirect participant in identifying the beneficial owners of the
related new notes and each such person may conclusively rely on, and shall be
protected in relying on, instructions from DTC for all purposes (including with
respect to the registration and delivery, and the respective principal amounts,
of the exchange notes to be issued).
75
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
SCOPE OF DISCUSSION
The following general discussion summarizes certain United States
federal income tax consequences that apply to "United States Holders" and
certain United States federal income and estate tax consequences that apply to
"Non-United States Holders" who acquire the notes at their original issue price
for cash and hold the notes as "capital assets", generally, for investment,
under Section 1221 of the Internal Revenue Code of 1986, as amended. This
summary, however, does not consider state, local or foreign tax laws. In
addition, it does not include all of the rules which may affect the United
States tax treatment of your investment in the notes. For example, special rules
not discussed here may apply to you if you are:
. a broker-dealer;
. a dealer in securities or a financial institution;
. an S corporation;
. a bank;
. a thrift;
. an insurance company;
. a tax-exempt organization;
. subject to the alternative minimum tax provisions of the Code;
. holding the notes as part of a hedge, straddle or other risk
reduction or constructive sale transaction;
. a person with a "functional currency" other than the U.S.
dollar;
. or a United States expatriate.
This discussion only represents our best attempt to describe certain
United States federal income tax consequences that may apply to you based on
current United States federal tax law. We have not and will not seek any rulings
from the Internal Revenue Service regarding the matters discussed below. This
discussion may in the end inaccurately describe the federal income tax
consequences which are applicable to you because the law may change, possibly
retroactively, and because the IRS or any court may disagree with this
discussion. If you are a partner in a partnership, you should consult your own
tax advisor regarding special rules that may apply.
THIS SUMMARY MAY NOT COVER YOUR PARTICULAR CIRCUMSTANCES BECAUSE IT
DOES NOT CONSIDER FOREIGN, STATE OR LOCAL TAX RULES, DISREGARDS CERTAIN FEDERAL
TAX RULES, AND DOES NOT DESCRIBE FUTURE CHANGES IN FEDERAL TAX RULES. PLEASE
CONSULT YOUR TAX ADVISOR RATHER THAN RELYING ON THIS GENERAL DESCRIPTION.
EXCHANGE OF OUTSTANDING NOTES PURSUANT TO THE EXCHANGE OFFER
The exchange of the outstanding notes for the new notes pursuant to the
exchange offer will not be a taxable event for United States federal income tax
purposes. You will not recognize gain or loss upon the receipt of the new notes.
If you are not exempt from United States federal income tax, you will be subject
to such tax on the same amount, in the same manner and at the same time as you
would have been as a result of holding the outstanding notes. If you are a
cash-basis holder who is exchanging the outstanding notes for the new notes, you
will not recognize in income any accrued and unpaid interest on the outstanding
notes by reason of the exchange. The basis and holding period of the new notes
will be the same as the basis and holding period of the corresponding
outstanding notes.
United States Holders
If you are a "United States Holder," as defined below, this section
applies to you. Otherwise, the next section, "Non-United States Holders,"
applies to you.
76
Definition of United States Holder. You are a "United States Holder"
if you hold the notes and you are:
. a citizen or resident of the United States, including an alien
individual who is a lawful permanent resident of the United
States or meets the "substantial presence" test under Section
7701(b) of the Code;
. a corporation or partnership created or organized in the
United States or under the laws of the United States or of any
political subdivision of the United States (except that under
regulations to be published, certain partnerships created or
organized under the foreign laws may be classified as domestic
partnerships if such classification is more appropriate);
. an estate, the income of which is subject to United States
federal income tax regardless of its source;
. a trust, if a United States court can exercise primary
supervision over the administration of the trust and one or
more United States persons can control all substantial
decisions of the trust, or if the trust was in existence on
August 20, 1996 and has elected to continue to be treated as a
United States person; or
. otherwise subject to United States federal income tax on your
worldwide income on a net income basis.
Taxation of Stated Interest. Generally, you must include the interest
on the notes in ordinary income:
. when it accrues, if you use the accrual method of accounting
for United States federal income tax purposes; or
. when you receive it, if you use the cash method of accounting
for United States federal income tax purposes.
Market Discount. If a United States Holder of a note, other than a
holder who purchased the note upon original issuance, acquires the note for an
amount that is less than its principal amount (i.e., at a market discount), and
such difference exceeds a statutorily-defined DE MINIMIS amount, and the United
States Holder thereafter recognizes gain upon a disposition or retirement of the
note, then the United States Holder will recognize ordinary income at the time
of the disposition in the amount of the lesser of the gain recognized and the
portion of the market discount that accrued on a ratable basis (or, if elected,
on a constant interest rate basis). In addition, market discount with respect to
a note may be taxable to a United States Holder to the extent of appreciation in
the value of the note at the time of certain otherwise nontaxable transactions
(i.e., gifts). Absent an election to include market discount in income as it
accrues, a United States Holder of a market discount note may be required to
defer a portion of any interest expense that may otherwise be deductible on any
indebtedness incurred or maintained to purchase or carry such note until the
United States Holder disposes of the note in a taxable transaction.
Any market discount will be considered to accrue ratably during the
period from the date of acquisition to the maturity date of the note, unless the
United States Holder elects to accrue the market discount using a constant
interest method. A United States Holder may elect to include market discount in
income currently as it accrues (on either a ratable or constant interest
method), in which case the rule described above regarding deferral of interest
deductions will not apply. This election to include market discount in income
currently, once made, applies to all market discount obligations acquired after
the first taxable year to which the election applies and may not be revoked
without the consent of the Internal Revenue Service.
Bond Premium. A United States Holder that purchases a note for an
amount in excess of the principal amount will be considered to have purchased
the note at a premium equal to such excess, and may elect to amortize the
premium over the remaining term of the note using a constant yield method.
However, if the note is purchased at a time when FMC Corporation has the option
to redeem the note for an amount that is in excess of its principal amount,
special rules may apply that could result in a deferral of the amortization of
bond premium until later in the term of the note. The amount amortized in any
year will be treated as a reduction of the United States Holder's interest
income from the note. A United States Holder that elects to amortize bond
premium must reduce its tax basis in the note by the premium amortized. Bond
premium on a note held by a United States Holder that does not make this
election will decrease the gain or increase the loss otherwise recognized on the
disposition of the note. The election to amortize premium using the constant
yield method, once made, applies to all obligations held or
77
subsequently acquired by the electing United States Holder on or after the first
day of the first taxable year to which the election applies and may not be
revoked without the consent of the Internal Revenue Service.
Sale or Other Taxable Disposition of the Notes. You must recognize
taxable gain or loss on the sale, exchange, redemption, retirement or other
taxable disposition of a note. The amount of your gain or loss equals the
difference between the amount you receive for the note (in cash or other
property, valued at fair market value), except to the extent amounts received
are attributable to accrued interest on the note (which amounts will be taxed as
ordinary income), minus your adjusted tax basis in the note. Your initial tax
basis in a note equals the price you paid for the note.
Your gain or loss will generally be a long-term capital gain or loss if
you have held the note for more than one year. Otherwise, it will be a
short-term capital gain or loss. Payments attributable to accrued interest which
you have not yet included in income will be taxed as ordinary interest income.
Liquidated Damages/Exchange With Registered Notes. We intend to take
the position that the likelihood of our failing to exchange the outstanding
notes with the new notes pursuant to the registration rights and this exchange
offer is remote. However, if we fail to exchange the notes pursuant to the
registration rights and this exchange offer, you must include the payment of
liquidated damages as ordinary income only when such payment is accrued or paid,
in accordance with your own method of accounting. The exchange of outstanding
notes with the new notes pursuant to the registration rights and this exchange
offer will not be a taxable event. Your basis in the outstanding notes will
carry over to the new notes received and the holding period of the new notes
will include the holding period of the outstanding notes surrendered.
Backup Withholding. You may be subject to a 30% backup withholding tax
when you receive interest payments on the note or proceeds upon the sale or
other disposition of a note. Certain holders (including, among others,
corporations, financial institutions and certain tax-exempt organizations) are
generally not subject to backup withholding. In addition, the backup withholding
tax will not apply to you if you provide your social security or other taxpayer
identification number, or TIN, using a Form W-9, unless:
. the IRS notifies us or our paying agent that the TIN you
provided is incorrect;
. you underreport interest and dividend payments that you
receive on your tax return and the IRS notifies us or our
paying agent that withholding is required;
. you fail to certify under penalties of perjury that you are
not subject to backup withholding; or
. you fail to certify under penalties of perjury that you are
not a U.S. person (including a U.S. resident alien).
If the backup withholding tax does apply to you, you may use the
amounts withheld as a refund or credit against your United States federal income
tax liability as long as you provide certain information to the IRS.
United States Holders should consult their tax advisors as to their
qualification for exemption from backup withholding and the procedures for
obtaining such exemption.
Non-United States Holders
The following general discussion is limited to the United States
federal income and estate tax consequences relevant to a "Non-United States
Holder." A "Non-United States Holder" is any person other than a United States
Holder.
Interest
Portfolio Interest Exemption. You will generally not have to pay United
States federal income tax on interest paid on the notes because of the
"portfolio interest exemption" if either:
. you represent that you are not a United States person for
United States federal income tax purposes and you provide your
name and address to us or our paying agent on a properly
executed IRS Form W-8BEN (or a suitable substitute form)
signed under penalties of perjury (a Non-United
78
States Holder that is treated as a partnership for United
States federal income tax purposes must provide a Form W-8IMY
and attach a certification from each beneficial owner of
interests in the Non-United States Holder); or
. a securities clearing organization, bank, or other financial
institution that holds customers' securities in the ordinary
course of its business holds the note on your behalf,
certifies to us or our paying agent under penalties of perjury
that it has received IRS Form W-8BEN (or a suitable
substitute) from you or from another qualifying financial
institution intermediary, and provides a copy of the Form
W8-BEN (or a suitable substitute) to us or our paying agent.
You will not, however, qualify for the portfolio interest exemption
described above if:
. you own, actually or constructively, 10% or more of the total
combined voting power of all classes of our capital stock;
. you are a controlled foreign corporation with respect to which
we are a "related person" within the meaning of Section
864(d)(4) of the Code;
. you are a bank receiving interest described in Section
881(c)(3)(A) of the Code; or
. the interest received in connection with the notes constitutes
(or the IRS determines that such interest constitutes)
contingent interest as described in Section 871(h)(4) of the
Code.
Withholding Tax if the Interest is Not Portfolio Interest. If you do
not claim, or do not qualify for, the benefit of the portfolio interest
exemption, you may be subject to a 30% withholding tax on interest payments made
on the notes.
However, if the payments of interest on a note are effectively
connected with the conduct by you of a trade or business in the United States,
such payments will be subject to United States federal income tax on a net basis
at the rates applicable to United States persons generally (and, if paid to
corporate holders, may also be subject to a 30% branch profits tax). If payments
are subject to United States federal income tax on a net basis in accordance
with the rules described in the preceding sentence, such payments will not be
subject to United States withholding tax so long as you provide us or our paying
agent with a properly executed IRS Form W-8ECI.
Non-United States Holders should consult any applicable income tax
treaties, which may provide for a lower rate of withholding tax, exemption from
or reduction of the branch profits tax, or other rules different from those
described above. Generally, in order to claim any treaty benefits you must
submit a properly executed IRS Form W-8BEN.
Reporting. We may report annually to the IRS and to you the amount of
interest paid to, and the tax withheld, if any, with respect to you.
Sale or Other Disposition of the Notes. You will generally not be
subject to United States federal income tax or withholding tax on gain
recognized on a sale, exchange, redemption, retirement, or other disposition of
a note unless:
. such gain is effectively connected with the conduct by you of
a trade or business within the United States, in which case
such gain will be subject to United States federal income tax
on a net basis at the rates applicable to United States
persons generally; or
. you are an individual who was present in the United States for
183 days or more in the taxable year of the disposition and
certain other conditions are satisfied, in which case you will
generally be required to pay a United States federal income
tax of 30% (or a reduced treaty rate) on such gain.
United States Federal Estate Taxes. If you qualify for the portfolio
interest exemption under the rules described above when you die, the notes will
not be included in your estate for United States federal estate tax purposes,
unless the income on the notes is effectively connected with the conduct by you
of a trade or business in the United States.
79
Backup Withholding and Information Reporting
Payments from United States Office. If you receive payments of interest
or principal directly from us or through the United States office of a
custodian, nominee, agent or broker, there is a possibility that you will be
subject to both backup withholding at a rate of 30% and information reporting.
With respect to interest payments made on the note, however, backup
withholding and information reporting will not apply if you certify, generally
on a Form W-8BEN (or Form W-8ECI) or substitute form, that you are not a United
States person in the manner described above under the heading "Non-United States
Holders - Interest." Form W-8BEN must also be filed by beneficial owners of
interests in a Non-United States Holder that is treated as a partnership for
United States federal income tax purposes.
Moreover, with respect to proceeds received on the sale, exchange,
redemption, or other disposition of a note, backup withholding or information
reporting generally will not apply if you properly provide, generally on Form
W-8BEN (or Form W-8ECI) (or a suitable substitute form), a statement that you
are an "exempt foreign person" for purposes of the broker reporting rules, and
other required information. If you are not subject to United States federal
income or withholding tax on the sale or other disposition of a note, as
described above under the heading "Non-United States Holders - Sale or Other
Disposition of the Notes", you will generally qualify as an "exempt foreign
person" for purposes of the broker reporting rules.
Payments from Foreign Office. If payments of principal and interest are
made to you outside the United States by or through the foreign office of your
foreign custodian, nominee or other agent, or if you receive the proceeds of the
sale of a note through a foreign office of a "broker," as defined in the
pertinent United States Treasury Regulations, you will generally not be subject
to backup withholding or information reporting. You will, however, be subject to
backup withholding and information reporting if the foreign custodian, nominee,
agent or broker has actual knowledge or reason to know that you are a United
States person. You will also be subject to information reporting, but not backup
withholding, if the payment is made by a foreign office of a custodian, nominee,
agent or broker that (i) is a United States person; (ii) is a controlled foreign
corporation for United States federal income tax purposes; (iii) is a foreign
partnership if, at any time during its tax year, one or more of its partners are
United States persons who, in the aggregate, hold more than 50 percent of the
income or capital interest of the partnership or if, at any time during its
taxable year, the partnership is engaged in the conduct of a U.S. trade or
business; or (iv) derives 50% or more of its gross income from the conduct of a
United States trade or business for a specified three year period, unless the
broker has in its records documentary evidence that you are a Non-United States
Holder and certain other conditions are met.
Backup withholding is not an additional tax. Any amounts so withheld
may be credited against the United States federal income tax liability of the
holder or refunded if the amounts withheld exceed such liability, provided that
the required information is furnished to the Internal Revenue Service. The
information reporting requirements may apply regardless of whether withholding
is required. Copies of the applicable information returns may be made available
to the tax authorities in the country in which a Non-United States Holder is a
resident under the provisions of an applicable income tax treaty or agreement.
This summary does not completely describe the withholding regulations.
Please consult your tax advisor to determine how the withholding regulations
apply to your particular circumstances.
80
PLAN OF DISTRIBUTION
Until 90 days after the date of this prospectus, all dealers effecting
transactions in the new notes, whether or not participating in this
distribution, may be required to deliver a prospectus. This is in addition to
the obligation of dealers to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.
Each broker-dealer that receives new notes for its own account pursuant
to this exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such new notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new notes received in exchange for outstanding notes
only where such outstanding notes were acquired as a result of market-making
activities or other trading activities. We have agreed that, for a period of 180
days from the date on which this exchange offer is consummated, we will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account
pursuant to this exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the new notes or a combination of such methods of
resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any new notes. Any
broker-dealer that resells new notes that were received by it for its own
account pursuant to this exchange offer and any broker or dealer that
participates in a distribution of such new notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of new notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The letter of transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days from the date on which this exchange offer is
consummated, we will promptly send additional copies of this prospectus and any
amendment or supplement to this prospectus to any broker-dealer that requests
such documents in the letter of transmittal. We have agreed to pay all expenses
incident to this exchange offer, other than commissions or concessions of any
broker-dealers and will indemnify the holders of the notes, including any
broker-dealers, against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Legal matters with respect to the validity of the exchange notes will
be passed upon for us by Morgan, Lewis & Bockius LLP, Philadelphia,
Pennsylvania.
EXPERTS
The consolidated financial statements and schedule of FMC Corporation as
of December 31, 2002 and 2001, and for each of the years in the three-year
period ended December 31, 2002, have been incorporated by reference herein in
reliance upon the report of KPMG LLP, independent accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
The audit report covering the December 31, 2002, consolidated financial
statements contains an explanatory paragraph that states that the Company
adopted Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" on January 1, 2002 and Statement of Financial Accounting
Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities"
on January 1, 2001.
81
[LOGO OF FMC]
FMC CORPORATION
Offer to Exchange
$355,000,000 of our 10 1/4% Senior Secured Notes due 2009
PROSPECTUS
March , 2003
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Company is a Delaware corporation. Reference is made to Section 145 of the
Delaware General Corporation Law, as amended (the "GCL"), which provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe that such person's conduct was
unlawful. A Delaware corporation may indemnify officers and directors in an
action by or in the right of a corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses that
such officer or director actually and reasonably incurred.
Article XI of the Company's Restated By-laws provides that the Company shall
indemnify its directors and officers to the fullest extent permitted by the GCL.
The Company's Restated Certificate of Incorporation provides that the Company's
directors will not be personally liable to the Company or its stockholders for
monetary damages resulting from breaches of their fiduciary duty as directors,
except (a) for any breach of the directors' duty of loyalty to the Company or
its stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) for unlawful payments
of dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the GCL or (d) for transactions from which directors derive improper
personal benefit.
The Company maintains directors' and officers' liability insurance coverage.
Item 21. Exhibits and Financial Statement Schedules.
The following documents are filed herewith or incorporated herein by reference.
Exhibit No. Description
- ----------- -----------
4.1* Indenture, dated as of October 21, 2002, among FMC Corporation, the Subsidiary Guarantors and
Wachovia Bank, National Association, as Trustee.
4.2* Form of FMC Corporation 10 1/4% Senior Secured Note due 2009 (included as part of the Indenture at
Exhibit 4.1).
4.3* Registration Rights Agreement, dated October 21, 2002, of FMC Corporation and the Initial
Purchasers relating to 10 1/4% Senior Secured Notes due 2009.
4.4* Credit Agreement, dated as of October 21, 2002, among FMC Corporation, Citicorp USA, Inc., as
Administrative Agent, ABN AMRO N.V. as Documentation Agent, Bank of America N.A. and Wachovia
Bank, National Association as Co-Syndication Agents and Salomon Smith Barney Inc., Banc of America
Securities LLC and Wachovia Securities Inc. as Co-Lead arrangers and Co-Bank Managers.
4.5* Shared Collateral Pledge and Security Agreement, dated as of October 21, 2002, by FMC Corporation
in favor of Citibank N.A., as Collateral Trustee.
4.6* Collateral Trust Agreement, dated as of October 21, 2002, among FMC Corporation Citicorp USA,
Inc., as the Bank Administrative Agent, Wachovia Bank, National Association, as Indenture Trustee,
and Citibank, N.A. as Collateral Trustee.
5.1 Opinion of Morgan, Lewis & Bockius LLP.
5.2 Opinion of Holland & Hart LLP.
12.1** Statement regarding Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of KPMG LLP.
II-1
23.3 Consent of Morgan, Lewis & Bockius LLP (included as part of the Opinion at Exhibit 5.1).
24.1*** Powers of Attorney.
25.1*** Statement of Eligibility of Trustee on Form T-1.
99.1*** Form of Letter of Transmittal.
99.2*** Form of Notice of Guaranteed Delivery.
99.3*** Form of Instruction to Registered Holder and/or Depository Trust Company Participant from
Beneficial Owner.
*Previously filed as an exhibit to FMC Corporation's Form 10-Q for the
quarter ended September 30, 2002 and incorporated by reference herein.
**Previously filed as an exhibit to FMC's Annual Report on Form 10-K for
the year ended December 31, 2002 and incorporated by reference herein.
***Previously filed.
Item 22. Undertakings.
The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day
of receipt of such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC CORPORATION
By: /s/ W. Kim Foster
------------------------------
W. Kim Foster
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ * Senior Vice President and March 13, 2003
- ------------------------------------ Chief Financial Officer
W. Kim Foster
/s/ * Vice President, Controller and March 13, 2003
- ------------------------------------ Principal Accounting Officer
Graham R. Wood
/s/ * Chairman of the Board and March 13, 2003
- ------------------------------------ Chief Executive Officer
William G. Walter
/s/ * Director March 13, 2003
- ------------------------------------
B.A. Bridgewater, Jr.
/s/ * Director March 13, 2003
- ------------------------------------
Patricia A. Buffler
/s/ * Director March 13, 2003
- ------------------------------------
Edward J. Mooney
/s/ * Director March 13, 2003
- ------------------------------------
William F. Reilly
/s/ * Director March 13, 2003
- ------------------------------------
Enrique J. Sosa
/s/ * Director March 13, 2003
- ------------------------------------
James R. Thompson
Director
- ------------------------------------
G. Peter D'Aloia
Director
- ------------------------------------
C. Scott Greer
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
-----------------------------------
Thomas C. Deas, Jr., as attorney-in-fact
for the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
INTERMOUNTAIN RESEARCH AND DEVELOPMENT
CORPORATION
By: /s/ Thomas C. Deas, Jr.
------------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ * President March 13, 2003
- ------------------------------------
James M. Pearce
/s/ Thomas C. Deas, Jr. Principal Financial Officer March 13, 2003
- ------------------------------------
Thomas C. Deas, Jr.
/s/ * Principal Accounting Officer March 13, 2003
- ------------------------------------
Terry J. Harding
/s/ * Director March 13, 2003
- ------------------------------------
Michael J. Cheney
/s/ * Director March 13, 2003
- ------------------------------------
John V. Corra
/s/ * Director March 13, 2003
- ------------------------------------
James M. Pearce
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
-----------------------------------
Thomas C. Deas, Jr., as attorney-in-fact
for the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC ASIA-PACIFIC, INC.
By: /s/ Thomas C. Deas, Jr.
------------------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ * President March 13, 2003
- ------------------------------------
Rakesh S. Sikand
/s/ Thomas C. Deas, Jr. Treasurer March 13, 2003
- ------------------------------------
Thomas C. Deas, Jr.
/s/ * Principal Accounting Officer March 13, 2003
- ------------------------------------
Bessie Kan Yu
/s/ * Director March 13, 2003
- ------------------------------------
Milton Steele
/s/ * Director March 13, 2003
- ------------------------------------
W. Kim Foster
/s/ * Director March 13, 2003
- ------------------------------------
Rakesh S. Sikand
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
-----------------------------------
Thomas C. Deas, Jr., as attorney-in-fact
for the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC OVERSEAS, LTD.
By: /s/Thomas C. Deas, Jr.
-----------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ Thomas C. Deas, Jr. Principal Financial Officer March 13, 2003
- ------------------------------------
Thomas C. Deas, Jr.
/s/ * Director, Chairman March 13, 2003
- ------------------------------------ and President
Theodore H. Laws
/s/ * Director March 13, 2003
- ------------------------------------
Joseph E. Pattison
/s/ * Director and Principal March 13, 2003
- ------------------------------------ Accounting Officer
Graham R. Wood
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
------------------------------------------
Thomas C. Deas, Jr., as attorney-in-fact
for the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC FUNDING CORPORATION
By: /s/ Thomas C. Deas, Jr.
-----------------------------
Thomas C. Deas, Jr.
President
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ * Director and Principal March 13, 2003
- ------------------------------------ Accounting Officer
Theodore H. Laws
/s/ Thomas C. Deas, Jr. Director and President March 13, 2003
- ------------------------------------
Thomas C. Deas, Jr.
/s/ * Director and Principal March 13, 2003
- ------------------------------------ Financial Officer
Charles Witherspoon
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
-----------------------------
Thomas C. Deas, Jr., as attorney-in-fact
for the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC WFC I, INC.
By: /s/ Thomas C. Deas, Jr.
-----------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ Thomas C. Deas, Jr. Principal Financial Officer March 13, 2003
- ------------------------------------
Thomas C. Deas, Jr.
/s/ * Director March 13, 2003
- ------------------------------------
James M. Pearce
/s/ * Director, President and March 13, 2003
- ------------------------------------ Principal Accounting Officer
Terry J. Harding
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
-----------------------------
Thomas C. Deas, Jr., as attorney-in-fact
for the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC DEFENSE CORP.
By: /s/ Thomas C. Deas, Jr.
-------------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ Thomas C. Deas, Jr. Principal Financial Officer March 13, 2003
- ------------------------------------
Thomas C. Deas, Jr.
/s/ * Director March 13, 2003
- ------------------------------------
James M. Pearce
/s/ * Director, President and March 13, 2003
- ------------------------------------ Principal Accounting Officer
Terry J. Harding
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
-----------------------------------
Thomas C. Deas, Jr., as attorney-in-fact
for the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC WFC II, INC.
By: /s/ Thomas C. Deas, Jr.
----------------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ Thomas C. Deas, Jr. Principal Financial Officer March 13, 2003
- ------------------------------------
Thomas C. Deas, Jr.
/s/ * Director March 13, 2003
- ------------------------------------
James M. Pearce
/s/ * Director, President and March 13, 2003
- ------------------------------------ Principal Accounting Officer
Terry J. Harding
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
-----------------------------------
Thomas C. Deas, Jr., as attorney-in-fact for
the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC PROPERTIES LLC
By: FMC Corporation, Sole Member of
FMC Properties LLC
By: /s/ Thomas C. Deas, Jr.
------------------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------ Member of FMC Properties LLC
B.A. Bridgewater, Jr.
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------ Member of FMC Properties LLC
Patricia A. Buffler
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------ Member of FMC Properties LLC
Edward J. Mooney
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------ Member of FMC Properties LLC
William F. Reilly
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------ Member of FMC Properties LLC
Enrique J. Sosa
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------ Member of FMC Properties LLC
James R. Thompson
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------ Member of FMC Properties LLC
William G. Walter
Director of FMC Corporation, Sole
- ------------------------------------ Member of FMC Properties LLC
G. Peter D'Aloia
Director of FMC Corporation, Sole
- ------------------------------------ Member of FMC Properties LLC
C. Scott Greer
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
--------------------------------------------
Thomas C. Deas, Jr., as attorney-in-fact for
the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC DEFENSE NL, L.L.C.
By: FMC Defense Corp., Sole Member of
FMC Defense NL, L.L.C.
By: /s/ Thomas C. Deas, Jr.
----------------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ * Director of FMC Defense Corp., March 13, 2003
- ------------------------------------ Sole Member of FMC Defense NL,
James M. Pearce L.L.C.
/s/ * Director of FMC Defense Corp., March 13, 2003
- ------------------------------------ Sole Member of FMC Defense NL,
Terry J. Harding L.L.C.
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
------------------------------------
Thomas C. Deas, Jr., as attorney-in-fact
for the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC WFC I NL, L.L.C.
By: FMC Defense Corp., Sole Member of
FMC WFC I NL, L.L.C.
By: /s/ Thomas C. Deas, Jr.
------------------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ * Director of FMC Defense Corp., March 13, 2003
- ------------------------------------ Sole Member of FMC WFC I NL, L.L.C.
James M. Pearce
/s/ * Director of FMC Defense Corp., March 13, 2003
- ------------------------------------ Sole Member of FMC WFC I NL, L.L.C.
Terry J. Harding
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
----------------------------------------
Thomas C. Deas, Jr., as attorney-in-fact
for the above noted individuals
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia, Commonwealth of Pennsylvania on
March 13, 2003.
FMC IDAHO LLC
By: FMC Corporation, Sole Member of
FMC Idaho LLC
By: /s/ Thomas C. Deas, Jr.
---------------------------------
Thomas C. Deas, Jr.
Authorized Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ * Chief Executive Officer March 13, 2003
- ------------------------------------
Robert I. Harries
/s/ * Chief Accounting Officer March 13, 2003
- ------------------------------------
Roger Kunz
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------
B.A. Bridgewater, Jr. Member of FMC Idaho LLC
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------
Patricia A. Buffler Member of FMC Idaho LLC
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------
Edward J. Mooney Member of FMC Idaho LLC
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------
William F. Reilly Member of FMC Idaho LLC
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------
Enrique J. Sosa Member of FMC Idaho LLC
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------
James R. Thompson Member of FMC Idaho LLC
/s/ * Director of FMC Corporation, Sole March 13, 2003
- ------------------------------------
William G. Walter Member of FMC Idaho LLC
Director of FMC Corporation, Sole
- ------------------------------------
G. Peter D'Aloia Member of FMC Idaho LLC
Director of FMC Corporation, Sole
- ------------------------------------
C. Scott Greer Member of FMC Idaho LLC
* Thomas C. Deas, Jr., by signing his name hereto, does sign this document on
behalf of the above noted individuals, pursuant to powers of attorney duly
executed by such individuals which have been filed as an Exhibit to this
Registration Statement.
/s/ Thomas C. Deas, Jr.
-------------------------------------
Thomas C. Deas, Jr., as attorney-in-
fact for the above noted individuals
Index to Exhibits
Exhibit No. Description of Exhibits
4.1* Indenture, dated as of October 21, 2002, among FMC Corporation,
the Subsidiary Guarantors and Wachovia Bank, National
Association, as Trustee.
4.2* Form of FMC Corporation 10 1/4% Senior Secured Note due 2009
(included as part of the Indenture at Exhibit 4.1).
4.3* Registration Rights Agreement, dated October 21, 2002, of FMC
Corporation and the Initial Purchasers relating to 10 1/4% Senior
Secured Notes due 2009.
4.4* Credit Agreement, dated as of October 21, 2002, among FMC
Corporation, Citicorp USA, Inc., as Administrative Agent, ABN
AMRO N.V. as Documentation Agent, Bank of America N.A. and
Wachovia Bank, National Association as Co-Syndication Agents and
Salomon Smith Barney Inc., Banc of America Securities LLC and
Wachovia Securities Inc. as Co-Lead arrangers and Co-Bank
Managers.
4.5* Shared Collateral Pledge and Security Agreement, dated as of
October 21, 2002, by FMC Corporation in favor of Citibank N.A.,
as Collateral Trustee.
4.6* Collateral Trust Agreement, dated as of October 21, 2002, among
FMC Corporation Citicorp USA, Inc., as the Bank Administrative
Agent, Wachovia Bank, National Association, as Indenture Trustee,
and Citibank, N.A. as Collateral Trustee.
5.1 Opinion of Morgan, Lewis & Bockius LLP.
5.2 Opinion of Holland & Hart LLP.
12.1** Statement regarding Computation of Ratios of Earnings to Fixed
Charges.
23.1 Consent of KPMG LLP.
23.3 Consent of Morgan, Lewis & Bockius LLP (included as part of the
Opinion at Exhibit 5.1).
24.1*** Powers of Attorney.
25.1*** Statement of Eligibility of Trustee on Form T-1.
99.1*** Form of Letter of Transmittal.
99.2*** Form of Notice of Guaranteed Delivery.
99.3*** Form of Instruction to Registered Holder and/or Depository Trust
Company Participant from Beneficial Owner.
*Previously filed as an exhibit to FMC Corporation's Form 10-Q for the quarter
ended September 30, 2002 and incorporated by reference herein.
** Previously filed as an exhibit to FMC's Annual Report on Form 10-K for the
year ended December 31, 2002 and incorporated by reference herein.
*** Previously filed.