EXHIBIT 4.1D
EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of December 20, 2002 to the Amended and
Restated Credit Agreement dated as of April 6, 2000, as amended by Amendment No.
1 and Waiver dated as of October 30, 2000, Amendment No. 2 dated as of January
26, 2001 and Amendment No. 3 dated as of March 1, 2002, and as supplemented by
two Credit Agreement Supplements dated as of August 25, 2000 and October 31,
2000, respectively (as so amended and supplemented, and as otherwise amended,
supplemented and otherwise modified to the date hereof, the "CREDIT AGREEMENT"),
each among SOVEREIGN SPECIALTY CHEMICALS, INC., a Delaware corporation (the
"DOMESTIC BORROWER"), the Offshore Borrowers party thereto, the banks, financial
institutions and other institutional lenders party thereto (the "LENDERS"), X.X.
XXXXXX SECURITIES INC., as joint lead arranger, joint book-running manager and
documentation agent, and JPMORGAN CHASE BANK (formerly THE CHASE MANHATTAN
BANK), as administrative agent (the "ADMINISTRATIVE AGENT"), and as Offshore
Currency Agent, Initial Issuing Bank and Swing Line Bank and certain others.
Capitalized terms not otherwise defined in this Amendment No. 4 have the same
meanings as specified in the Credit Agreement.
PRELIMINARY STATEMENTS:
(a) The Domestic Borrower has requested that the Credit Agreement be
amended on the terms set forth below; and
(b) the undersigned Lenders are willing to so amend the Credit
Agreement on the terms and conditions of this Amendment No. 4;
NOW, THEREFORE, it is hereby agreed as follows:
SECTION 1. Amendments. The Credit Agreement is, effective as of the
Amendment No. 4 Effective Date (as hereinafter defined), amended as follows:
(a) The recital of parties to the Credit Agreement is amended in its
entirety and replaced by the following:
"AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 6,
2000, among SOVEREIGN SPECIALTY CHEMICALS, INC., a Delaware corporation
(the "DOMESTIC BORROWER"), the Offshore Borrowers (as hereinafter
defined), the banks, financial institutions and other institutional
lenders listed on the signature pages hereof as the Initial Lenders
(the "INITIAL LENDERS"), the Swing Line Lenders (as hereinafter
defined), and X.X. XXXXXX SECURITIES INC. ("X.X. XXXXXX"), as sole lead
arranger and sole book-running manager (the "LEAD ARRANGER" and the
"BOOK MANAGER", as the case may be) for the Facilities (as hereinafter
defined), and JPMORGAN CHASE BANK ("JPMC"), as administrative agent
(together with any successor administrative agent appointed pursuant to
Article VII, the "ADMINISTRATIVE AGENT") for the Lender Parties (as
hereinafter defined), as documentation agent for the Facilities (the
"DOCUMENTATION AGENT"), as offshore currency agent (the "OFFSHORE
CURRENCY AGENT") for the Revolving
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Credit Lenders (as hereinafter defined), as the Initial Issuing Bank
(the "INITIAL ISSUING BANK" and, together with the Initial Lenders, the
"INITIAL LENDER PARTIES") and as the Domestic Swing Line Lender (as
hereinafter defined).";
(b) All references to "Amendment Effective Date" contained in the
Credit Agreement are amended by adding "No. 3" immediately after the word
"Amendment";
(c) Other than in Article III, Section 8.01 and in the definition of
"Joint Lead Arranger" in Schedule II, all references to "the Joint Lead
Arrangers" contained in the Credit Agreement are amended by replacing them with
the words "the Lead Arranger";
(d) All references to "a Joint Lead Arranger" contained in the Credit
Agreement are amended by replacing the words "a Joint" with the word "the";
(e) All references to "Joint Book Managers" contained in the Credit
Agreement are amended by replacing them with the words "Book Manager";
(f) Other than in Article III and Schedule II, all references to
"Syndication Agent" contained in the Credit Agreement are amended by replacing
them with the words "Administrative Agent and Lead Arranger";
(g) Clause (ii) of Section 2.01(a) is amended in its entirety and
replaced with the following:
"Each Lender's agreement to make advances to any Offshore
Borrower in US Dollars (each, an "OFFSHORE ACQUISITION
ADVANCE") terminated on the date which was eighteen (18)
months after the Initial Closing Date. No further Offshore
Acquisition Advances may be reborrowed under this Agreement.";
(h) Section 2.01(b) is amended in its entirety and replaced by the
following:
"Term B Advances. Immediately following the consummation of
the Term B Conversion, each New Term B Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance
(each, together with each Converted Term B Advance, a "TERM B ADVANCE")
in an amount not to exceed such Lender's New Term B Commitment at such
time. Notwithstanding anything to the contrary contained in the
preceding sentence, each New Term B Lender shall be deemed to have
satisfied its obligations under this Section 2.01(b) by deducting from
the advances required to be made, an amount equal to the amount of any
fee separately agreed with the Domestic Borrower in connection with the
making of such Lender's New Term B Commitment. The Term B Borrowing
shall consist of (i) the Term B Conversion and (ii) the New Term B
Advances made by the New Term B Lenders ratably according to their New
Term B Commitments. The initial Term B Advance shall be made by one or
more existing Lenders under the Facilities. Amounts borrowed under this
Section 2.01(b) and repaid or prepaid may not be reborrowed.";
(i) Clause (ii) of Section 2.04(a) is amended in its entirety and
replaced with the following:
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"As of the Amendment No. 4 Effective Date, there are no
outstanding Offshore Acquisition Advances.";
(j) Section 2.04(b) is amended in its entirety and replaced with the
following:
"The Domestic Borrower shall repay to the Administrative Agent
for the ratable account of the Term B Lenders the aggregate outstanding
principal amount of the Term B Advances on the last day of each fiscal
quarter of the Domestic Borrower, commencing with the fiscal quarter
ending March 31, 2003 and continuing through the Termination Date, in
an amount for each quarter equal to 0.25% of the initial aggregate
principal amount of all Term B Advances (which installment amounts
shall be reduced as a result of the application of prepayments in
accordance with Section 2.06) provided, however, that the final
principal installment shall be repaid on the Termination Date and shall
be in an amount equal to the aggregate principal amount of the Term B
Advances outstanding on such date.";
(k) Section 2.05(a) is amended by (i) inserting the words ", the Term B
Commitments" immediately following the words "the Offshore Acquisition
Commitments" and (ii) deleting the parenthetical at the end of the section;
(l) Clause (i)(A) of Section 2.05(b) is amended by inserting the
following immediately prior to the end thereof:
"The outstanding Term A Advances of each Term A Lender who has
made a Term B Commitment, as set forth in Part 1 of Schedule I-A
attached hereto, shall, to the extent of and in such amount equal to
such Term B Commitment, be converted into Term B Advances (each a
"CONVERTED TERM B ADVANCE"), to be effective upon the Amendment No. 4
Effective Date (the "TERM B CONVERSION"). Upon the occurrence of the
Term B Conversion, the Term A Commitment of each Term A Lender that
makes a Converted Term B Advance shall be automatically and permanently
reduced, by an amount equal to the sum of such Lender's Converted Term
B Advances";
(m) Clause (i)(B) of Section 2.05(b) is amended in its entirety and
replaced with the following:
"All the Offshore Acquisition Commitments of the Offshore Acquisition
Lenders have terminated.";
(n) Clause (ii) of Section 2.05(b) is amended in its entirety and
replaced with the following:
"On the Amendment No. 4 Effective Date, after giving effect to
any Term B Borrowing on such date, and from time to time thereafter
upon each repayment or prepayment of the Term B Advances, the aggregate
Term B Commitments of the Term B Lenders shall be automatically and
permanently reduced, on a pro rata basis, by an amount equal to the
amount by which the aggregate Term B Commitments immediately prior to
such reduction exceed the aggregate unpaid principal amount of the Term
B Advances then outstanding.";
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(o) Section 2.06(a) is amended by (i) inserting the number "(i)"
immediately before the words "accrued interest" and (ii) inserting the following
immediately before the semicolon following the words "aggregate principal amount
prepaid":
", (ii) in the case of any such prepayment of Term B Advances prior to
the first anniversary of the Amendment No. 4 Effective Date, a premium
of 2% of the aggregate principal amount so prepaid, and (iii) in the
case of any such prepayment of Term B Advances on or after the first
anniversary of the Amendment No. 4 Effective Date, but prior to the
second anniversary of the Amendment No. 4 Effective Date, a premium of
1% of the aggregate principal amount so prepaid"
(p) Clause (i) of Section 2.06(b) is amended in its entirety and
replaced with the following:
"Excess Cash Flow. The Domestic Borrower shall, on the 100th
day following the end of each Fiscal Year prepay an aggregate principal
amount of the Advances comprising part of the same Borrowings (or cause
the applicable Offshore Borrowers to prepay Offshore Acquisition
Advances) as follows: (A) commencing following the Domestic Borrower's
Fiscal Year ending on December 31, 2000 through and including the
prepayment required under Section 2.06(b)(i) in respect of the Fiscal
Year ending December 31, 2002, in an aggregate amount equal to fifty
percent (50%) of the amount of Excess Cash Flow for such Fiscal Year;
provided that the aggregate amount of any prepayment of Advances
otherwise required under this clause (A) shall not exceed the amount
which is $1 greater than the smallest aggregate prepayment of Advances
that would be required in order to cause the Total Debt/EBITDA Ratio as
of the last day of the Fiscal Year in respect of which such payment is
to be made to be equal to or less than 3.0:1 (after giving effect to
such prepayment), and provided further that if the Total Debt/EBITDA
Ratio as of the last day of the Fiscal Year in respect of which such
payment is to be made is less than 3.0:1, then no such prepayment shall
be required under this clause (A), and (B) commencing following the
Domestic Borrower's Fiscal Year ending on December 31, 2003, if the
Total Debt/EBITDA Ratio as of the last day of the Fiscal Year in
respect of which such payment is to be made is equal to or greater than
4.25:1, in an aggregate amount equal to seventy five percent (75%) of
the amount of Excess Cash Flow for such Fiscal Year, and if the Total
Debt/EBITDA Ratio as of the last day of the Fiscal Year in respect of
which such payment is to be made is less than 4.25:1, in an aggregate
amount equal to fifty percent (50%) of the amount of Excess Cash Flow
for such Fiscal Year.";
(q) Clause (ii)(B) of Section 2.06(b) is amended by deleting the
reference to the figure "90%" contained therein and replacing it with the figure
"100%";
(r) Clause (ii)(C) of Section 2.06(b) is amended by (i) inserting
immediately after the words "sales or issuances to" in the first parenthetical
"(1) to the extent permitted by Section 5.02(g), the Domestic Borrower or any
other Loan Party, or (2)", (ii) deleting the reference to the figure "50%"
contained therein and replacing with the figure "100%", and (iii) deleting the
proviso contained at the end thereof;
(s) Clause (v)(A) of Section 2.06(b) is amended in its entirety and
replaced with the following:
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"Each prepayment of Advances pursuant to subsections (i) and
(ii) of this Section 2.06(b) (and optional prepayments of Term Advances
pursuant to Section 2.06(a)) shall be applied (1) first, pro rata
between the scheduled amortization installments of the Term Facilities
until all the Term A Advances, the Amortization Amount of the Offshore
Acquisition Advances and the Term B Advances are prepaid in full, (2)
second, to any other outstanding Offshore Acquisition Advances until
such Advances are prepaid in full, and (3) third, to the Revolving
Credit Facility as set forth in clause (vi) below.";
(t) Clause (v)(B) of Section 2.06(b) is amended by inserting the
following immediately before the period at the end thereof:
"; provided, however that all proceeds of the New Term B
Advances, net of the aggregate amount of the Transaction Costs, shall
be applied to the prepayment of the scheduled amortization installments
of the Remaining Term A Advances in direct order of maturity until
either (x) all the Remaining Term A Advances are prepaid in full, or
(y) the entire proceeds of the New Term B Advances (net of the
aggregate amount of the Transaction Costs) have been applied to such
prepayment";
(u) Section 2.14 is amended in its entirety and replaced with the
following:
"Use of Proceeds. (a) The proceeds of the Advances (other than
the New Term B Advances) and issuances of Letter of Credit shall be
available (and the Domestic Borrower and each Offshore Borrower each
agrees that it shall use such proceeds and Letters of Credit) solely
for general corporate purposes other than to make Investments (except
for Investments permitted under Section 5.02(g)(ii) and (iii), (v) and
(vi), (viii) and (ix) through (xi)).
(b) The proceeds of the New Term B Advances shall be
available (and the Domestic Borrower agrees that it shall use such
proceeds) solely to (i) pay the Transaction Costs and (ii) prepay
Remaining Term A Advances.";
(v) Section 2.16(a) is amended by (i) replacing the words "and/or an
Offshore Swing Line Note" with the words ", an Offshore Swing Line Note and/or a
Term B Note" and (ii) replacing the words "and A-4" with the words ", A-4 and
A-5";
(w) Article III is amended by adding the following new section in
proper numerical order:
"SECTION 3.03B Conditions Precedent to Term B Advances. The
obligation of each Term B Lender to make a Term B Advance to the
Domestic Borrower is subject to the occurrence of the Amendment No. 4
Effective Date prior to or concurrently with the making of such Term B
Advance and to the conditions set forth in Section 3.04.";
(x) The proviso at the end of clause (xiii) of Section 5.02(g) is
amended in its entirety and replaced with the following:
"provided, however, that any Investment made pursuant to this
clause (xiii) on or after the Amendment Effective Date shall consist
solely of Equity Interests of the Domestic Borrower and shall not
include any assumption of Debt except to the extent that (x) at any
time after March 31, 2003, such Debt is permitted by clauses (ii),
(vi), (vii)
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and (viii) of Section 5.02(b) or (y) the portion of such Investment
that consists of consideration other than Equity Interests of the
Domestic Borrower (including assumed Debt) does not exceed in the
aggregate $2,500,000 in respect of Investments made after the Amendment
No. 4 Effective Date.";
(y) Section 5.03(c) is amended by (i) deleting the number "(i)" at the
beginning thereof, (ii) replacing the letters "(A)" , "(B)" and "C" in clause
(i) thereof with the numbers "(i)" , "(ii)" and "(iii)" respectively, and (iii)
deleting clause (ii) thereof in its entirety;
(z) Section 5.04 is amended by deleting subsections (a) through (e)
thereof and replacing them with the following:
"(a) Total Debt/EBITDA. Maintain at the end of each fiscal
quarter of the Domestic Borrower a Total Debt/EBITDA Ratio of not more
than the amount set forth below for each period set forth below:
DURING QUARTER ENDING RATIO
--------------------- -----
December 31, 2002 6.00:1
March 31, 2003 6.00:1
June 30, 2003 6.00:1
September 30, 2003 6.00:1
December 31, 2003 5.75:1
March 31, 2004 5.75:1
June 30, 2004 5.50:1
September 30, 2004 5.25:1
December 31, 2004 5.00:1
March 31, 2005 5.00:1
June 30, 2005 4.75:1
September 30, 2005 4.50:1
December 31, 2005 4.50:1
March 31, 2006 4.25:1
June 30, 2006 4.00:1
and thereafter
(b) Senior Debt/EBITDA Ratio. Maintain at the end of each
fiscal quarter of the Domestic Borrower a Senior Debt/EBITDA Ratio of
not more than the amount set forth below for each period set forth
below:
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DURING QUARTER ENDING RATIO
--------------------- -----
December 31, 2002 2.25:1
March 31, 2003 2.25:1
June 30, 2003 2.25:1
September 30, 2003 2.25:1
December 31, 2003 2.00:1
March 31, 2004 2.00:1
June 30, 2004 2.00:1
September 30, 2004 1.75:1
December 31, 2004 1.75:1
March 31, 2005 1.75:1
June 30, 2005 1.50:1
September 30, 2005 1.50:1
December 31, 2005 1.50:1
March 31, 2006 1.50:1
June 30, 2006 1.25:1
and thereafter
(c) Asset Coverage Ratio. Maintain at the end of each fiscal
quarter of the Domestic Borrower ending on or after the Amendment No. 4
Effective Date an Asset Coverage Ratio equal to or greater than 1.25:1.
(d) Interest Coverage Ratio. Maintain at the end of each
fiscal quarter of the Domestic Borrower an Interest Coverage Ratio of
not less than the amount set forth below for each period set forth
below:
DURING QUARTER ENDING RATIO
--------------------- -----
December 31, 2002 1.65:1
March 31, 2003 1.65:1
June 30, 2003 1.65:1
September 30, 2003 1.65:1
December 31, 2003 1.65:1
March 31, 2004 1.65:1
June 30, 2004 1.70:1
September 30, 2004 1.75:1
December 31, 2004 1.75:1
March 31, 2005 1.75:1
June 30, 2005 1.85:1
September 30, 2005 1.95:1
December 31, 2005 2.00:1
March 31, 2006 2.00:1
June 30, 2006 2.25:1
September 30, 2006 2.25:1
December 31, 2006 2.25:1
March 31, 2007 2.50:1
and thereafter
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(aa) Section 7.03 is amended in its entirety and replaced by the
following:
"SECTION 7.03. X.X. Xxxxxx, JPMC and Affiliates. With respect to its
Commitments or the Commitments of its Affiliates, the Advances made by it or the
Advances made by its Affiliates and the Notes issued to it or to its Affiliates,
X.X. Xxxxxx and JPMC and their Affiliates shall have the same rights and powers
under the Loan Documents as any other Lender Party and may exercise the same as
though it or its Affiliate were not an Agent; and the term "Lender Party" or
"Lender Parties" shall, unless otherwise expressly indicated, include JPMC and
X.X. Xxxxxx in their respective individual capacities. JPMC and X.X. Xxxxxx and
their respective Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person that may do business with or own securities of any
Loan Party or any such Subsidiary, all as if X.X. Xxxxxx and JPMC were not
Agents and without any duty to account therefor to the Lender Parties.";
(bb) Section 8.02 is amended in its entirety and replaced by the
following:
"SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to the Domestic Borrower, at its address at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, XX 00000, Telecopy Number: (000) 000-0000, Attention: Xxxxx
Xxxxx; if to an Offshore Borrower or any other Loan Party, to it c/o the
Domestic Borrower with a copy to the address provided on Schedule I to the
Credit Agreement Supplement executed and delivered by such Offshore Borrower; if
to any Initial Lender Party, at its Domestic Lending Office specified opposite
its name on Schedule I hereto; if to any other Lender Party (other than any
Offshore Swing Line Lender), at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender Party; if to any
Offshore Swing Line Lender, to the Offshore Currency Agent, with a copy to the
notice address specified in the Joinder Agreement pursuant to which it became an
Offshore Swing Line Lender; if to JPMC, in its capacity as the Administrative
Agent, Documentation Agent or Offshore Currency Agent, at its address at 000
Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy Number: (212)
270-4584, Attention: Xxxxxxxx Xxxxxxx; if to X.X. Xxxxxx in its capacity as a
Lead Arranger or Book Manager, at its address at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Telecopy Number: (000) 000-0000, Attention: Xxxxxxxx
Xxxxxxx; or, as to the Domestic Borrower or the Administrative Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Domestic Borrower and the
Administrative Agent. All such notices and other communications shall, when
mailed, telegraphed, telecopied or telexed, be effective when deposited in the
mails, delivered to the telegraph company, transmitted by telecopier or
confirmed by telex answerback, respectively, except that notices and
communications to any Agent pursuant to Article II, III or VII shall not be
effective until received by such Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered hereunder shall be
effective as delivery of an original executed counterpart thereof.";
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(cc) Section 8.07(e) is amended by deleting the words "or A-4" and
replacing them with the words ", A-4 or A-5";
(dd) Sections 8.12, 8.13, 8.14, 8.15 and 8.16 are amended by being
renumbered as Sections 8.13, 8.14, 8.15, 8.16 and 8.17, respectively, and all
cross references to Sections 8.12, 8.13, 8.14, 8.15, and 8.16 contained in the
Credit Agreement are amended by replacing them with references to Sections 8.13,
8.14, 8.15, 8.16 and 8.17, respectively;
(ee) A new Section 8.12 is inserted in proper numerical order as
follows:
"SECTION 8.12. Term B Amendments. (a) The provisions of
Section 8.01(b) shall apply to any amendment, waiver or consent that
directly affects any Lender that has a commitment under the Term B
Facility;
(b) no amendment, waiver or consent shall, unless in writing
and signed by Lenders holding more than 50% of the aggregate
Commitments under the Term B Facility, change the order of application
of any reduction in the Commitments or any prepayment of Advances among
the Term A Facility, the Offshore Acquisition Facility and the Term B
Facility from the application thereof set forth in the applicable
provisions of Section 2.06(b)(v) in any manner that materially affects
the Lenders under the Term B Facility or require the permanent
reduction of the Revolving Credit Facility at any time when all or a
portion of the Term B Facility remains in effect;
(c) no amendment, waiver or consent shall, unless in writing
and signed by all of the Term B Lenders, amend this Section 8.12.";
(ff) The Credit Agreement is amended by inserting Schedule I-A - Term B
Commitments, attached hereto as Schedule I-A, in proper numerical order;
(gg) Schedule II is amended by adding the following new definitions in
proper alphabetical order:
" "AMENDMENT NO. 4" means Amendment No. 4 to the Credit
Agreement dated as of December 20, 2002, among the Domestic Borrower,
the Offshore Borrowers, the Lender Parties party thereto and the
Administrative Agent.
"AMENDMENT NO. 4 EFFECTIVE DATE" has the meaning specified in
Section 3 of Amendment No. 4.
"ASSET COVERAGE RATIO" means, at any date of determination,
the ratio of (a) the sum of (i) all inventory in all of its forms, (ii)
all accounts receivable, (iii) all real property (including leasehold
interests and fixtures), and (iv) all equipment in all of its forms, in
each case of Domestic Borrower and its Subsidiaries on a consolidated
basis as of such date, to (b) the aggregate outstanding amount of all
Advances under the Facilities as of such date (after giving effect to
all Borrowings, payments or prepayments of Advances made on such date).
"CONVERTED TERM B ADVANCE" has the meaning specified in
Section 2.05(b).
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"CONVERTED TERM B COMMITMENT" means that portion of each Term
B Lender's Term B Commitment that consists of Converted Term B
Advances.
"NEW TERM B ADVANCE" means that portion of the Term B Advances
that are not Converted Term B Advances.
"NEW TERM B LENDERS" means those Term B Lenders that have New
Term B Commitments.
"NEW TERM B COMMITMENT" means those Term B Commitments that
are not Converted Term B Commitments.
"REMAINING TERM A ADVANCES" means those Term A Advances that
are not converted to Term B Advances pursuant to the Conversion.
"TERM B CONVERSION" has the meaning specified in Section
2.05(b).
"TRANSACTION COSTS" means the aggregate amount (which amount
shall in no event exceed $4,000,000 in the aggregate) of fees,
expenses, discounts or costs reasonably incurred in connection with the
negotiation, execution, delivery and consummation of Amendment No. 4
and with the other instruments and documents to be delivered in
connection with Amendment No. 4.: provided however that the aggregate
amount of Transaction Costs shall be reduced by an amount equal to the
sum of any amounts deducted from the advances required to be made by
New Term B Lenders, pursuant to Section 2.01(b).";
(hh) The definition of "Agents" in Schedule II is amended by (i)
inserting the word "and" immediately prior to the words "the Documentation
Agent" and (ii) deleting the words "and the Syndication Agent";
(ii) The definition of "Facility" in Schedule II is amended by
inserting the words "Term B Facility," immediately after the words "Offshore
Acquisition Facility,";
(jj) The definition of "Information Memorandum" in Schedule II is
amended by inserting the words "and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated" immediately following the word "Arranger" at each place it appears
therein;
(kk) The definition of "Lenders" in Schedule II is amended by deleting
the words "pursuant to Section 8.07";
(ll) The definition of "Loan Documents" in Schedule II is amended by
inserting the phrase ", in each case as amended," immediately after the word
"means";
(mm) The definition of "Material Adverse Change" in Schedule II is
amended by deleting the phrase "since September 30, 1999" therefrom;
(nn) The definition of "Termination Date" in Schedule II is amended by
(i) deleting the word "and" immediately prior to the number "(iii)" and
replacing it with a comma, and (ii) inserting the following immediately before
the period at the end thereof "and (iv) for the purposes of the Term B Facility,
December 31, 2007";
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(oo) The following definitions in Schedule II are amended in their
entirety and replaced as follows:
" "APPLICABLE MARGIN" means a percentage per annum as set
forth below:
TERM A AND REVOLVING CREDIT FACILITIES TERM B FACILITY
-------------------------------------- ------------------------------------
EURODOLLAR MARGIN BASE RATE MARGIN EURODOLLAR MARGIN BASE RATE MARGIN
------------------ ------------------ ----------------- ----------------
3.75% 2.75% 4.50% 3.50 %
For purposes of this definition, the Swing Line Advances are
extended pursuant to subfacilities of the Revolving Credit Facility.";
"JOINT LEAD ARRANGER" means the Lead Arranger.
"SYNDICATION AGENT" means the Administrative Agent and the
Lead Arranger.
"TERM ADVANCE" means a Term A Advance, an Offshore Acquisition
Advance or a Term B Advance.
"TERM B ADVANCE" has the meaning specified in Section 2.01(b).
"TERM B BORROWING" means a borrowing consisting of
simultaneous Term B Advances of the same Type made by the Term B Lenders.
"TERM B COMMITMENT" means, with respect to any Term B Lender
at any time, the amount set forth opposite such Lender's name on Schedule
I-A hereto under the caption "Term B Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, set for such Lender in
the Register maintained by the Administrative Agent pursuant to Section
8.07(d) as such Lender's "Term B Commitment", as such amount may be reduced
at or prior to such time pursuant to Section 2.05.
"TERM B FACILITY" means, at any time, the aggregate amount of
the Term B Lenders' Term B Commitments at such time. As of the date hereof,
the Term B Facility is equal to $47,500,000.
"TERM B LENDER" means any Lender that has a Term B Commitment.
"TERM B NOTE" means a promissory note of the Domestic Borrower
payable to the order of any Term B Lender, in substantially the form of
Exhibit A-5 attached hereto, evidencing the indebtedness of the Domestic
Borrower to such Lender resulting from the Term B Advances made by such
Lender, as amended.
"TERM BORROWING" means any Term A Borrowing, Offshore
Acquisition Borrowing or Term B Borrowing.
"TERM COMMITMENT" means any Term A Commitment, Offshore
Acquisition Commitment, or Term B Commitment.
"TERM FACILITY" means the Term A Facility, the Offshore
Acquisition Facility or the Term B Facility.
"TERM LENDER" means any Term A Lender, Offshore Acquisition
Lender or Term B Lender.
12
"TERM NOTE" means any Term A Note, Offshore Acquisition Note
or Term B Note.";
(pp) Schedule II is amended by moving the definitions of "Lead
Arranger" and "Book Manager" to their proper alphabetical position; and
(qq) The Credit Agreement is amended by inserting Exhibit A-5 - Form of
Term B Note, attached hereto as Exhibit A, in proper numerical order;
SECTION 2. Conditions of Effectiveness. This Amendment No. 4 shall
become effective as of the date first above written (but in no event shall such
date occur after January 2, 2003) (the "AMENDMENT NO. 4 EFFECTIVE DATE") when,
and only when,
(a) the Administrative Agent shall have received the following in form
and substance satisfactory to the Administrative Agent and in sufficient copies
for each Lender Party:
(i) counterparts of this Amendment No. 4 executed by the
undersigned and each Required Lender;
(ii) the Consent attached hereto, executed by each Subsidiary
Guarantor;
(iii) a certificate of the Domestic Borrower and each Domestic
Subsidiary Guarantor, signed on behalf of each such Loan Party
by a Responsible Officer, dated the Amendment No. 4 Effective
Date (the statements made in which certificate shall be true
on and as of the Amendment No. 4 Effective Date), certifying
as to
(A) an attached true, complete and correct copy of a
certificate of the Secretary of State of the jurisdiction of
each such Loan Party, dated reasonably near the Amendment No.
4 Effective Date, certifying (A) as to a true and correct copy
of the charter of such Loan Party and each amendment thereto
on file in such Secretary of State's Office and (B) that such
amendments are the only amendments to such Loan Party's
charter on file in such Secretary of State's Office,
(B) an attached, true, correct and complete copy of
the bylaws of such Loan Party as in effect on the date on
which the resolutions referred to in Section 2(a)(iii)(C) were
adopted and on the Amendment No. 4 Effective Date,
(C) an attached, true, correct and complete copy of
the resolutions of the Board of Directors of such Loan Party
authorizing the execution, delivery and performance by such
Loan Party of each of the foregoing Loan Documents to which it
is a party,
(D) the due incorporation and good standing or valid
existence of such Loan Party as a corporation organized under
the laws of the jurisdiction of its incorporation, and the
absence of any proceeding for the dissolution or liquidation
of such Loan Party,
13
(E) the names and true signatures of the officers of
such Loan Party authorized to sign each Loan Document to which
it is or is to be a party,
(F) the truth in all material respects of the
representations and warranties contained in the Loan Documents
as though made on and as of the Amendment No. 4 Effective
Date, and
(G) the absence of any event occurring and
continuing, or resulting from the making of such Term B
Advance, that constitutes a Default;
(iv) a Notice of Borrowing relating to such Term B Advance;
(v) a favorable opinion of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, counsel for the Loan Parties as to the valid
existence and good standing of the
New York and Delaware Loan
Parties, their due power and authority to execute this
Amendment No. 4, and this Amendment No. 4 representing the
legal, valid, and binding obligation of the Domestic Borrower
(it being acknowledged and agreed that these opinions will be
subject to customary assumptions and limitations), and as to
such additional matters as may arise and be reasonably
requested by the Administrative Agent;
(vi) 6-year pro forma consolidated and consolidating projections,
including pro forma income statements, cash flow statements
and balance sheets, as well as a balance sheet as of September
30, 2002, after giving pro forma effect to Amendment No. 4;
and
(vii) a certificate from the chief financial officer of the Domestic
Borrower with respect to the solvency (on a consolidated
basis) of the Domestic Borrower and its Subsidiaries both
immediately before and immediately after the consummation of
the transactions to occur with the making of such Term B
Advance;
and
(b) the following events shall have occurred:
(i) the conditions set forth in Section 2(a) above have been
satisfied;
(ii) the Total Term B Commitment shall be equal to or greater than
$30 million;
(iii) on the date of such Term B Advance, after giving effect to
Amendment No. 4:
(A) Consolidated EBITDA of the Domestic Borrower for
the twelve month period ended September 30, 2002 calculated on
a pro forma basis after giving effect to such Term B Advance,
shall not be less than $41 million;
14
(B) the ratio of Consolidated total Debt for Borrowed
Money of the Domestic Borrower and its Subsidiaries as of
September 30, 2002, to Consolidated EBITDA ended September 30,
2002, calculated on a pro forma basis after giving effect to
such Term B Advance, shall be equal to or less than 5.75:1;
(C) the ratio of the sum of (1) Consolidated total
Debt for Borrowed Money of the Domestic Borrower and its
Subsidiaries less (2) Subordinated Debt, in each case as of
September 30, 2002, to Consolidated EBITDA ended September 30,
2002, calculated on a pro forma basis after giving effect to
such Term B Advance, shall be equal to or less than 2.15:1;
(D) neither Xxxxx'x nor Standard & Poor's shall have
lowered its credit rating or outlook for the Facility, or any
other obligations of the Domestic Borrower, from ratings in
effect on September 30, 2002;
(iv) there shall not have occurred or become known any Material
Adverse Change since December 31, 2001; and
(v) the payment to the Administrative Agent of all accrued and
unpaid fees, costs and expenses of the Administrative Agent
including, without limitation, the accrued and unpaid fees and
expenses of counsel to the Administrative Agent and Lead
Arranger, and the fees, costs and expenses payable pursuant to
Section 4 below.
SECTION 3. Effect on Credit Agreement. (a) On and after the
effectiveness of this Amendment No. 4, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof" or words of like import referring to the
Credit Agreement, and each reference in the Notes and each of the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as amended by this Amendment No. 4. The execution, delivery
and effectiveness of this Amendment No. 4 shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of any Lender
or the Agent under any of the Loan Documents, nor constitute a waiver of any
provision of any of the Loan Documents.
(b) Each party hereto hereby acknowledges and consents to the amendment
to the Credit Agreement and the terms and provisions thereof on the terms set
forth in this Amendment No. 4. Each party hereto hereby reaffirms the covenants
and agreements contained in each Loan Document and confirms that each Loan
Document, as specifically amended by Amendment No. 4 in the case of the Credit
Agreement, is and shall continue to be in full force and effect and the same are
hereby ratified and confirmed in all respects, except that upon the
effectiveness of this Agreement, all references contained therein to the "Credit
Agreement" shall mean the Credit Agreement as amended by Amendment No. 4.
SECTION 4. Payment of Fees. The Domestic Borrower agrees to pay on
demand all reasonable fees, costs and expenses (including, without limitation,
as separately agreed to in writing) of the Administrative Agent in connection
with the preparation, execution,
15
delivery and administration, modification and amendment of this Amendment No. 4
and the other instruments and documents to be delivered hereunder (including,
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent) in accordance with the terms of Section 8.04 of the Credit
Agreement.
SECTION 5. Execution in Counterparts. This Amendment No. 4 may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment No. 4 by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment No. 4.
SECTION 6. Governing Law. This Amendment No. 4 shall be governed by,
and construed in accordance with, the laws of the State of
New York.
IN WITNESS WHEREOF, the undersigned have caused this Amendment
No. 4 to be executed and delivered by their duly authorized officer as of the
date first above written.
Domestic Borrower: SOVEREIGN SPECIALTY CHEMICALS, INC.
By /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Offshore Borrowers: SOVEREIGN SPECIALTY CHEMICALS LIMITED
By /s/ Xxxxx X. Xxxx
------------------------------------------
Name: Xxxxx X. Xxxx
Title: Director
SOVEREIGN SPECIALTY CHEMICALS (S) PTE. LTD.
By /s/ Xxxxx X. Xxxx
------------------------------------------
Name: Xxxxx X. Xxxx
Title: Director
Agreed as of the date first above written:
X.X. XXXXXX SECURITIES INC.,
as Lead Arranger
By
------------------------------------------
Title:
JPMORGAN CHASE BANK,
as Administrative Agent and as a Lender
By /s/ Xxxxxxxx Xxxxxxx, Xx.
------------------------------------------
Name: Xxxxxxxx Xxxxxxx, Xx.
Title: Vice President
BLACK DIAMOND INTERNATIONAL FUNDING, LTD
By /s/ Xxxx Xxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxx
Title: Director
BLACK DIAMOND CLO 1998-1 LTD.
By /s/ Xxxx Xxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxx
Title: Director
BLACK DIAMOND CLO 2000-1 LTD.
By /s/ Xxxx Xxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxx
Title: Director
THE BANK OF NOVA SCOTIA
By /s/ Xxxx Xxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxx
Title: Director
XXXXXXX XXXXX CAPITAL CORPORATION
By /s/ Xxxxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
NATIONAL CITY BANK
By /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title:
TRS 1 LLC
By /s/
------------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Duly Authorized Signatory
SCHEDULE I-A
TERM B COMMITMENTS AND APPLICABLE LENDING OFFICES
NAME OF INITIAL LENDER TERM B COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
---------------------- ----------------- ----------------------- -------------------------
JPMorgan Chase Bank $30,000,000.00 000 Xxxx Xxxxxx 000 Xxxx Xxxxxx
0xx Xxxxx 0xx Xxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxx Attn: Xxxxxxxx Xxxxxxx
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
EXHIBIT A
FORM OF TERM B NOTE
US$_______________ Dated: ________________
FOR VALUE RECEIVED, the undersigned, SOVEREIGN SPECIALTY
CHEMICALS, INC., a Delaware corporation (the "Domestic Borrower"), HEREBY
PROMISES TO PAY _________________________ or its registered assigns (the
"Lender") for the account of its Applicable Lending Office (as defined in the
Credit Agreement referred to below) the aggregate principal amount of the Term B
Advances (as defined below) owing to the Lender by the Domestic Borrower
pursuant to the Amended and Restated Credit Agreement dated as of April 6, 2000
as amended by Amendment No. 1 and Waiver dated as of October 30, 2000, Amendment
No. 2 dated as of January 26, 2001, Amendment No. 3 dated as of March 1, 2002,
and Amendment No. 4 dated as of December 20, 2002 (as further amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein, unless otherwise defined herein, being used
herein as therein defined), each among the Domestic Borrower, the Lender and
certain other lender parties party thereto, and JPMorgan Chase Bank, as
Administrative Agent for the Lender and such other lender parties on the dates
and in the amounts specified in the Credit Agreement.
The Domestic Borrower promises to pay to the Lender interest
on the unpaid principal amount of each Term B Advance from the date of such Term
B Advance until such principal amount is paid in full, at such interest rates,
and payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to the Administrative Agent, at the Administrative
Agent's Account in same day funds. The Term B Advances owing to the Lender by
the Domestic Borrower and the maturity thereof, and all payments made on account
of principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto, which is part of this Promissory
Note; provided, however, that the failure of the Lender to make any such
recordation or endorsement shall not affect the Obligations of the Domestic
Borrower under this Promissory Note.
This Promissory Note is one of the Term B Notes referred to
in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of Term B Advances by
the Lender to the Domestic Borrower in an aggregate amount not to exceed the
U.S. dollar amount first above mentioned, the indebtedness of the Domestic
Borrower resulting from such Term B Advances being evidenced by this Promissory
Note, and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The obligations of the Domestic Borrower under this
Promissory Note and the other Loan Documents, and the obligations of the other
Loan Parties under the Loan Documents, are secured by the Collateral as provided
in the Loan Documents.
This Promissory Note and the obligations evidenced hereby may
not be transferred or assigned in whole or in part, except pursuant to and in
accordance with the provisions of Section 8.07 of the Credit Agreement,
including, without limitation, the requirement that the Administrative Agent
shall have accepted and recorded each such transfer or assignment in the
Register.
SOVEREIGN SPECIALTY CHEMICALS, INC.
By
--------------------------------
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Principal Unpaid Principal Notation
Date Amount of Advance Paid or Prepaid Balance Made By
---- ----------------- ------------------- ---------------- --------
CONSENT
CONSENT dated as of December 20, 2002 (this "CONSENT"), to the
foregoing Amendment No. 4 dated as of the date (the "AMENDMENT") hereof to
Amended and Restated Credit Agreement dated as of April 6, 2000, as amended,
supplemented or otherwise modified to the date hereof (the "CREDIT AGREEMENT"),
among Sovereign Specialty Chemicals, Inc., as Domestic Borrower, and the
Offshore Borrowers, Lender Parties and the Agents referred to therein.
Capitalized terms used in this Consent without definition shall have the
respective meanings provided in the Credit Agreement.
Each of the undersigned, as a Subsidiary Guarantor under one or more of
the Guaranties in favor of the Secured Parties, hereby consents to the foregoing
Amendment and hereby confirms and agrees that notwithstanding the effectiveness
of such Amendment, the Guaranties are, and shall continue to be, in full force
and effect and each is hereby ratified and confirmed in all respects, except
that, on and after the effectiveness of such Amendment, each reference in each
Guaranty to the "Credit Agreement", "thereunder", "thereof" or words of like
import shall mean and be a reference to the Credit Agreement, as amended by such
Amendment.
IN WITNESS WHEREOF, the undersigned have caused this Consent to be
executed and delivered by their duly authorized officers as of the date first
above written.
IMPERIAL ADHESIVES, INC. SOVEREIGN PACKAGING GROUP, INC.
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President Title: Vice President
SIA ADHESIVES, INC. OSI SEALANTS, INC.
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President Title: Vice President
SOVEREIGN HOLDINGS, LLC XXXXXX CHEMICALS, INC.
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President Title: Vice President
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
SOVEREIGN SPECIALTY CHEMICALS LIMITED
By /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Director
