Execution Copy Exhibit 4p(1)
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Stepan Company
Amended and Restated Note Agreement
Dated as of December 1, 2002
Re: 6.59% Amended and Restated Senior Notes, due October 1, 2013
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TABLE OF CONTENTS
(Not a part of the Agreement)
Section Heading Page
Section 1. Background...........................................................................1
Section 2. Amendment and Restatement of Existing Agreements and Existing Notes..................1
Section 2.1. Amendment and Restatement of Existing Agreements.....................................1
Section 2.2. Amendment and Restatement of Existing Notes..........................................1
Section 2.3. Agreement and Consent of the Noteholders.............................................2
Section 2.4. Defined Terms, Etc...................................................................2
Section 2.5. Several Obligations..................................................................2
Section 2.6. Effect of Amendment and Restatement..................................................2
Section 3. Effective Date.......................................................................2
Section 3.1. Effective Date.......................................................................2
Section 3.2. Survival of Payment Obligations......................................................3
Section 4. Conditions Precedent.................................................................3
Section 4.1. Representations and Warranties.......................................................3
Section 4.2. Performance; No Default..............................................................3
Section 4.3. Compliance Certificates..............................................................3
Section 4.4. Opinions of Counsel..................................................................4
Section 4.5. Exchange Permitted by Applicable Law, Etc............................................4
Section 4.6. Delivery and Exchange of Notes.......................................................4
Section 4.7. Payment of Special Counsel Fees......................................................4
Section 4.8. Private Placement Number.............................................................4
Section 4.9. Changes in Corporate Structure.......................................................4
Section 4.10. Proceedings and Documents............................................................5
Section 5. Representations and Warranties of the Company........................................5
Section 5.1. Organization; Power and Authority....................................................5
Section 5.2. Authorization, Etc...................................................................5
Section 5.3. Disclosure...........................................................................5
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.....................6
Section 5.5. Financial Statements.................................................................6
Section 5.6. Compliance with Laws, Other Instruments, Etc.........................................7
Section 5.7. Governmental Authorizations, Etc.....................................................7
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders............................7
Section 5.9. Taxes................................................................................7
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Section 5.10. Title to Property; Leases............................................................8
Section 5.11. Licenses, Permits, Etc...............................................................8
Section 5.12. Compliance with ERISA................................................................8
Section 5.13. Private Offering by the Company......................................................9
Section 5.14. [Reserved]...........................................................................9
Section 5.15. Existing Indebtedness; Future Liens..................................................9
Section 5.16. Foreign Assets Control Regulations, Etc.............................................10
Section 5.17. Status under Certain Statutes.......................................................10
Section 5.18. Environmental Matters...............................................................10
Section 6. Representations of the Noteholder...................................................11
Section 6.1. Acquisition for Investment..........................................................11
Section 6.2. Source of Funds.....................................................................11
Section 7. Information as to Company...........................................................12
Section 7.1. Financial and Business Information..................................................12
Section 7.2. Officer's Certificate...............................................................16
Section 7.3. Inspection..........................................................................16
Section 8. Prepayment of the Notes.............................................................17
Section 8.1. Required Prepayments................................................................17
Section 8.2 Optional Prepayments................................................................17
Section 8.3. Prepayment on Failure of Noteholders to Consent to Change of Control................18
Section 8.4. Allocation of Partial Prepayments...................................................18
Section 8.5. Maturity; Surrender, Etc............................................................19
Section 8.6. Purchase of Notes...................................................................19
Section 8.7. Make-Whole Amount...................................................................19
Section 9. Affirmative Covenants...............................................................20
Section 9.1. Compliance with Law.................................................................20
Section 9.2. Insurance...........................................................................21
Section 9.3. Maintenance of Properties...........................................................21
Section 9.4. Payment of Taxes and Claims.........................................................21
Section 9.5. Corporate Existence, Etc............................................................21
Section 9.6. Payment of Principal, Make-Whole Amount and Interest................................22
Section 9.7. Keeping of Books....................................................................22
Section 9.8. Guaranty by Subsidiaries............................................................22
Section 10. Negative Covenants..................................................................22
Section 10.1. Financial Covenants.................................................................22
Section 10.2. Limitations on Restricted Subsidiaries..............................................23
Section 10.3. Limitations on Liens................................................................25
Section 10.4. Limitations on Guaranties...........................................................27
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Section 10.5. Limitations on Investments..........................................................28
Section 10.6. Limitations on Dividends............................................................28
Section 10.7. Limitations on Dispositions of Stock or Indebtedness of Restricted Subsidiaries.....29
Section 10.8. Limitations on Mergers, Consolidations and Sales of Assets..........................29
Section 10.9. Limitations on Sale-and-Leasebacks..................................................30
Section 10.10. Limitations on Rentals..............................................................31
Section 10.11. Transactions with Affiliates........................................................31
Section 11. Events of Default...................................................................31
Section 12. Remedies On Default, Etc............................................................34
Section 12.1. Acceleration........................................................................34
Section 12.2. Other Remedies......................................................................34
Section 12.3. Rescission..........................................................................34
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc...................................35
Section 13. Registration; Exchange; Substitution of Notes.......................................35
Section 13.1. Registration of Notes...............................................................35
Section 13.2. Transfer and Exchange of Notes......................................................35
Section 13.3. Replacement of Notes................................................................36
Section 14. Payments On Notes...................................................................36
Section 14.1. Place of Payment....................................................................36
Section 14.2. Home Office Payment.................................................................36
Section 15. Expenses, Etc.......................................................................37
Section 15.1. Transaction Expenses................................................................37
Section 15.2. Survival............................................................................37
Section 16. Survival of Representations and Warranties; Entire Agreement........................37
Section 17. Amendment and Waiver................................................................38
Section 17.1. Requirements........................................................................38
Section 17.2. Solicitation of Holders of Notes....................................................38
Section 17.3. Binding Effect, Etc.................................................................38
Section 17.4. Notes Held by Company, Etc..........................................................39
Section 18. Notices.............................................................................39
Section 19. Reproduction of Documents...........................................................39
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Section 20. Confidential Information............................................................40
Section 21. Substitution of Noteholder..........................................................41
Section 22. Miscellaneous.......................................................................41
Section 22.1. Successors and Assigns..............................................................41
Section 22.2. Payments Due on Non-Business Days...................................................41
Section 22.3. Severability........................................................................41
Section 22.4. Construction........................................................................41
Section 22.5. Counterparts........................................................................42
Section 22.6. Governing Law.......................................................................42
Signature...................................................................................................43
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Schedule A -- Information Relating to Noteholders
Schedule B -- Defined Terms
Schedule 4.9 -- Changes in Corporate Structure
Schedule 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
Schedule 5.5 -- Financial Statements
Schedule 5.8 -- Certain Litigation
Schedule 5.11 -- Patents, Etc.
Schedule 5.14 -- Use of Proceeds
Schedule 5.15 -- Existing Indebtedness
Schedule 10.5 -- Existing Investments
Exhibit 1 -- Form of 6.59% Amended and Restated Senior Note due October 1, 2013
Exhibit 4.4(a) -- Form of Opinion of Counsel for the Company
Exhibit 4.4(b) -- Form of Opinion of Special Counsel for the Noteholders
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STEPAN COMPANY
XXXXX AND XXXXXXXX XXXXXX
XXXXXXXXXX, XXXXXXXX 00000
6.59% Amended and Restated Senior Notes, due October 1, 2013
Dated as of
December 1, 2002
To the Persons Listed in
The Attached Schedule A:
Ladies and Gentlemen:
Stepan Company, a Delaware corporation (the "Company"), agrees with
each Noteholder listed in the attached Schedule A as follows:
Section 1. Background.
Reference is made to the separate Loan Agreements, each dated as of October
1, 1998, between the Company and, respectively, each purchaser listed in
Schedule I thereto (the "Existing Agreements"), under and pursuant to which the
Company issued its 6.59% Promissory Notes, due October 1, 2013 in the aggregate
principal amount of $30,000,000, of which $30,000,000 in aggregate principal
amount are presently outstanding (the "Existing Notes"). The Company now desires
to amend and restate the Existing Agreements and the Existing Notes in their
entirety. In order to effectuate and reflect the foregoing in the most
expeditious manner, to facilitate dealings with respect to the Existing
Agreements and the Existing Notes and to promote clarity and convenience, the
parties hereto have agreed to amend and restate each of the Existing Agreements
and the Existing Notes.
Section 2. Amendment and Restatement of Existing Agreements and Existing
Notes.
Section 2.1. Amendment and Restatement of Existing Agreements. Effective
the Effective Date (as hereinafter defined), the Company, by its execution of
this Agreement, hereby agrees and consents to the amendment and restatement in
their entirety of all of the Existing Agreements by and into this Agreement.
Section 2.2. Amendment and Restatement of Existing Notes. The Company,
by its execution of this Agreement, hereby agrees and consents to the amendment
and restatement in their entirety of the Existing Notes to be in the form of
Exhibit 1 hereto. The Existing Notes, as so amended and restated, shall be
hereinafter referred to, individually, as a "Note" and,
Stepan Company Amended and Restated Note Agreement
collectively, as the "Notes," and shall include each Note delivered pursuant to
any provision of this Agreement and each Note delivered in substitution or
exchange for any such Note pursuant to any such provision. The Company has duly
authorized the execution and delivery to each Noteholder of the Notes, which
Notes shall (i) be substituted in the place of the Existing Notes, (ii) be dated
and bear interest from the date of the last full payment of interest on the
Existing Notes, (iii) have the terms herein and therein provided, and (iv) be
substantially in the form set out in Exhibit 1, with such changes therefrom, if
any, as may be approved by the Noteholders and the Company.
Section 2.3. Agreement and Consent of the Noteholders. The Noteholders
are, collectively, the holders of one hundred percent (100%) in aggregate
principal amount of the Existing Notes. Subject to the satisfaction of the
conditions precedent set forth in Section 4, the Noteholders, by their execution
of this Agreement, hereby agree and consent to: (a) the amendment and
restatement in their entirety of all of the Existing Agreements by and into this
Agreement and (b) the amendment and restatement in their entirety of all of the
Existing Notes by the exchange for an equal number of Notes in the form of
Exhibit 1 hereto and in an equal outstanding principal amount therefor.
Section 2.4. Defined Terms, Etc. Certain capitalized terms used in this
Agreement are defined in Schedule B; references to a "Schedule" or an "Exhibit"
are, unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement; and references to a "Section" are, unless otherwise specified, to a
Section of this Agreement.
Section 2.5. Several Obligations. The obligations of each Noteholder
hereunder are several and not joint obligations, and no Noteholder shall have
any obligation or liability to any Person for the performance or nonperformance
by any other Noteholder hereunder.
Section 2.6. Effect of Amendment and Restatement. Each of the
Noteholders and the Company agree that (a) the amendment and restatement of the
Existing Notes and the exchange of the Existing Notes for the Notes hereunder
shall not constitute a novation or a prepayment of the Existing Notes and (b) no
Make-Whole Amount or other premium is payable as a result of the amendment and
restatement of the Existing Agreements or the Existing Notes as contemplated
hereby.
Section 3. Effective Date.
Section 3.1. Effective Date. On December 12, 2002, or such other
Business Day thereafter as may be mutually agreed upon by the Company and the
Noteholders (the "Effective Date"), the Company shall execute and deliver to the
Noteholders at the offices of Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, at 10:00 A.M. Chicago time, or at such other place
agreed to by the parties, one or more Notes (as set forth below each
Noteholder's name on Schedule A), registered in the name specified on Schedule
A, and in the denomination or denominations specified on Schedule A, in
replacement of the Existing Notes held by each Noteholder (or such Noteholder's
nominee), in the respective principal amounts, as more particularly set forth
below its name on Schedule A. Contemporaneously with the receipt by each
Noteholder of such Notes, the Existing Notes held by such Noteholder shall be
deemed to
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Stepan Company Amended and Restated Note Agreement
be cancelled and amended and restated by the Notes (regardless of whether such
Noteholder shall have delivered to the Company for cancellation the Existing
Notes held by it). Each Noteholder agrees to use commercially reasonable efforts
to deliver the Existing Notes held by it to the Company in connection with the
foregoing replacement and cancellation. All amounts owing under, and evidenced
by, the Existing Notes as of the Effective Date shall continue to be outstanding
under, and shall from and after the Effective Date be evidenced by, the Notes,
and shall be governed by the terms of this Agreement. It is the intention of the
parties hereto that the amendment and restatement of the Existing Notes by the
Company and the execution, delivery and full effectiveness of this Agreement be
simultaneous. Existing Notes delivered to the Company pursuant to the terms of
this Agreement shall be marked "Cancelled/Amended and Restated by New Notes" by
the Company.
If on the Effective Date the Company shall fail to tender the Notes to any
Noteholder as provided in this Section 3.1, or any of the conditions specified
in Section 4 shall not have been fulfilled to any Noteholder's reasonable
satisfaction, such Noteholder shall, at such Noteholder's election, be relieved
of all further obligations under this Agreement, without thereby waiving any
rights such Noteholder may have under the Existing Agreements, the Existing
Notes or otherwise by reason of such failure or such nonfulfillment.
Section 3.2. Survival of Payment Obligations. All payment obligations of
the Company under the Existing Agreements (including, without limitation,
reimbursement obligations in respect of costs, expenses and fees of or incurred
by the holders of the Existing Notes), other than the obligation to pay the
principal of and interest and Make-Whole Amount on the Existing Notes (which
obligations, after the Effective Date, shall be evidenced by the Notes) shall
survive the amendment and restatement of the Existing Agreements and the
Existing Notes (and the cancellation thereof).
Section 4. Conditions Precedent.
The effectiveness of this Agreement is subject to the fulfillment to such
Noteholder's satisfaction, prior to or on the Effective Date, of the following
conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and on
the Effective Date.
Section 4.2. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or on the Effective
Date, and after giving effect to the transactions contemplated hereby, no
Default or Event of Default shall have occurred and be continuing.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to such
Noteholder an Officer's Certificate, dated the Effective Date, certifying that
the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
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Stepan Company Amended and Restated Note Agreement
(b) Secretary's Certificate. The Company shall have delivered to such
Noteholder a certificate certifying as to the resolutions attached thereto and
other corporate proceedings relating to the authorization, execution and
delivery of the Notes and this Agreement.
Section 4.4. Opinions of Counsel. Such Noteholder shall have received
opinions in form and substance satisfactory to such Noteholder, dated the
Effective Date (a) from F. Xxxxxx Xxxxxx III, General Counsel of the Company,
covering the matters set forth in Exhibit 4.4(a) and covering such other matters
incident to the transactions contemplated hereby as such Noteholder or such
Noteholder's counsel may reasonably request (and the Company hereby instructs
its counsel to deliver such opinion to such Noteholder) and (b) from Xxxxxxx and
Xxxxxx, the Noteholders' special counsel in connection with such transactions,
substantially in the form set forth in Exhibit 4.4(b) and covering such other
matters incident to such transactions as such Noteholder may reasonably request.
Section 4.5. Exchange Permitted by Applicable Law, Etc. On the Effective
Date the exchange of the Existing Notes for the Notes shall (i) be permitted by
the laws and regulations of each jurisdiction to which each Noteholder is
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject any Noteholder to any tax, penalty or liability under or
pursuant to any applicable law or regulation, which law or regulation was not in
effect on the date hereof. If requested by any Noteholder, such Noteholder shall
have received an Officer's Certificate certifying as to such matters of fact as
such Noteholder may reasonably specify to enable such Noteholder to determine
whether such exchange is so permitted.
Section 4.6. Delivery and Exchange of Notes. On the Effective Date, the
Company shall execute and deliver to the Noteholders, in exchange for the
Existing Notes held by such Noteholders, Notes as specified on Schedule A.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the
Effective Date the fees, charges and disbursements of the Noteholders' special
counsel referred to in Section 4.4 to the extent reflected in a statement of
such counsel rendered to the Company at least one Business Day prior to the
Effective Date.
Section 4.8. Private Placement Number. A Private Placement Number issued
by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
Section 4.9. Changes in Corporate Structure. Except as specified in
Schedule 4.9, at any time following the date of the most recent financial
statements referred to in Schedule 5.5, the Company shall not have changed its
jurisdiction of incorporation or been a party to any merger or consolidation and
shall not have succeeded to all or any substantial part of the liabilities of
any other entity.
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Stepan Company Amended and Restated Note Agreement
Section 4.10. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to such Noteholder and such Noteholder's special counsel, and such
Noteholder and such Noteholder's special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such
Noteholder or such Noteholder's special counsel may reasonably request.
Section 5. Representations and Warranties of the Company.
The Company represents and warrants to each Noteholder, as of the Effective
Date, that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Notes
and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company has delivered to each Noteholder
copies of (a) the annual report as filed with the Securities and Exchange
Commission on Form 10-K for the fiscal year ended December 31, 2001 (the "10-K")
which generally sets forth the business conducted by the Company and its
Subsidiaries and the principal properties of the Company and its Subsidiaries,
and (b) the quarterly reports as filed with the Securities and Exchange
Commission on Form 10-Q for the quarterly fiscal periods ended March 31, 2002
and June 30, 2002 (the "10-Qs"). This Agreement, the 10-K, the 10-Qs and the
other financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Since December 31, 2001, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
other documents, certificates and other writings delivered to the Noteholders by
or on behalf of the Company specifically for use in connection with the
transactions contemplated hereby.
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Stepan Company Amended and Restated Note Agreement
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Restricted Subsidiaries and Unrestricted
Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class of
its capital stock or similar equity interests outstanding owned by the Company
and each other Subsidiary, (ii) of the Company's Affiliates, other than
Subsidiaries, and (iii) of the Company's directors and Executive Officers (as
defined in Rule 405 of the Securities Act).
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other
legal entity duly organized or formed, validly existing and in good standing
under the laws of its jurisdiction of organization or formation, and is duly
qualified as a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to
transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Noteholder copies of the financial statements of the Company and its
Subsidiaries listed on Schedule 5.5. All of said financial statements (including
in each case the related schedules and notes) fairly present in all material
respects the consolidated financial position of the Company and its Subsidiaries
as of the respective dates specified in such financial statements and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except (a) as set forth in the notes
thereto (subject, in the case of any interim financial statements, to normal
year-end adjustments) and (b) as specifically disclosed in writing by the
Company (i) to the Noteholders in their capacity as holders of existing notes of
the Company in that certain Waiver Agreement dated as of August 12, 2002
(including the Memorandum from the Company entitled "Accounting For Deferred
Management Compensation and Deferred Directors' Fees" attached to said Waiver
Agreement as Exhibit A) and (ii) in its public filings with the Securities and
Exchange Commission.
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Stepan Company Amended and Restated Note Agreement
Section 5.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (i) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, and excluding environmental matters
which are covered in Section 5.18, there are no actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or any Subsidiary in
any court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term of
any agreement or instrument to which it is a party or by which it is bound, or
any order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws and ERISA) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have been audited by
the Internal Revenue Service and paid for all fiscal years up to and including
the fiscal year ended December 31, 1997.
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Stepan Company Amended and Restated Note Agreement
Section 5.10. Title to Property; Leases. The Company and its Subsidiaries
have good and sufficient title to their respective properties that individually
or in the aggregate are Material, including all such properties reflected in the
most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement. No financing statement
under the Uniform Commercial Code which names the Company or any of its
Restricted Subsidiaries as debtor has been filed in any jurisdiction, and
neither the Company nor any of such Restricted Subsidiaries has signed any
financing statement or any security agreement authorizing any secured party
thereunder to file any such financing statement, except for precautionary
filings described in Schedule 5.10 made in connection with leased equipment and
as may otherwise be permitted by Section 10.3.
All leases that individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material respects. The
Company and each Subsidiary enjoys peaceful and undisturbed possession of the
premises occupied under all of the leases that are Material under which it is
operating, none of which contains any unusual or burdensome provisions that
could reasonably be expected to have a Material Adverse Effect. None of the
assets or property the value of which is reflected in the Company's consolidated
balance sheet as of December 31, 2001, is held by the Company as lessee under
any lease or as conditional vendee under any conditional sale contract or other
title retention agreement, other than Capitalized Leases included on such
consolidated balance sheet and leasehold improvements on leased property in an
aggregate amount (net after subtracting the reserve for amortization with
respect to such leasehold improvements) not exceeding $3,000,000.
Section 5.11. Licenses, Permits, Etc. Except as disclosed in
Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, service marks, trademarks and
trade names, or rights thereto, except where the failure to own or possess could
not reasonably be expected to have a Material Adverse Effect;
(b) to the best knowledge of the Company, no product of the Company
infringes any license, permit, franchise, authorization, patent, copyright,
service xxxx, trademark, trade name or other right owned by any other Person,
except for any such infringement which could not reasonably be expected to have
a Material Adverse Effect; and
(c) to the best knowledge of the Company, there is no violation by any
Person of any right of the Company or any of its Subsidiaries with respect to
any patent, copyright, service xxxx, trademark, trade name or other right owned
or used by the Company or any of its Subsidiaries, except violations which could
not reasonably be expected to have a Material Adverse Effect.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to
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Stepan Company Amended and Restated Note Agreement
result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not be individually or in the aggregate
reasonably likely to have a Material Adverse Effect.
(b) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $5,000,000 in the aggregate
for all Plans. The term "benefit liabilities" has the meaning specified in
Section 4001 of ERISA and the terms "current value" and "present value" have the
meanings specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
delivery of the Notes hereunder will not involve any transaction that is subject
to the prohibitions of Section 406 of ERISA or in connection with which a tax
could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to the accuracy of each Noteholder's
representation in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Existing Notes to be exchanged by such Noteholder for the
Notes.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Noteholders. Neither the Company nor anyone acting on its behalf has taken, or
will take, any action that would subject the issuance of the Notes to the
registration requirements of Section 5 of the Securities Act.
Section 5.14. [Reserved].
Section 5.15. Existing Indebtedness; Future Liens. (a) Schedule 5.15
sets forth a complete and correct list of all outstanding Indebtedness of the
Company and its Subsidiaries as
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Stepan Company Amended and Restated Note Agreement
of June 30, 2002, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
such Indebtedness of the Company or its Subsidiaries. Neither the Company nor
any Subsidiary is in default and no waiver of default is currently in effect, in
the payment of any principal or interest on any Indebtedness for borrowed money
or Capitalized Leases of the Company or such Subsidiary and no event or
condition exists with respect to any Indebtedness of the Company or any
Subsidiary that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to become due and
payable before its stated maturity or before its regularly scheduled dates of
payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.3.
Section 5.16. Foreign Assets Control Regulations, Etc. The exchange of
the Existing Notes for the Notes by the Company hereunder and compliance by the
Company with the provisions hereof and of the Notes will not violate the Trading
with the Enemy Act, as amended, any of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended), or the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (enacted October 26, 2001),
or any enabling legislation or executive order relating to any of the foregoing.
Without limiting the foregoing, neither the Company nor any of its Subsidiaries
(a) is a blocked person described in Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit and Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49049
(2001)) or (b) knowingly engages in any dealings or transactions, or is
otherwise associated, with any such blocked person.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is an "investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, or is subject to
regulation under the Public Utility Holding Company Act of 1935, as amended, the
ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.
Section 5.18. Environmental Matters. Except as set forth in Schedule 5.18
and in the 10-K and the 10-Qs,
(a) the Company complies with all applicable Environmental Laws,
except where the failure to comply could not reasonably be expected to
have a Material Adverse Effect; and
(b) neither the Company nor any Subsidiary has knowledge of any
claim or has received any written notice of any claim, and no proceeding
has been instituted raising any claim against the Company or any of its
Subsidiaries or any of their respective real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws,
except,
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Stepan Company Amended and Restated Note Agreement
in each case, such as could not reasonably be expected to result in a
Material Adverse Effect.
Section 6. Representations of the Noteholder.
Section 6.1. Acquisition for Investment. Each Noteholder represents that
it acquired the Existing Notes amended and restated hereunder for its own
account or for one or more separate accounts maintained by it or for the account
of one or more pension or trust funds and not with a view to the distribution
thereof, provided that the disposition of such Noteholder's or such pension or
trust funds' property shall at all times be within such Noteholder's or such
pension or trust funds' control. Each Noteholder understands that the Notes have
not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
Section 6.2. Source of Funds. Each Noteholder represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") used by it to pay the purchase price of the Existing Notes
amended and restated hereunder:
(a) the Source is an "insurance company general account" within
the meaning of Department of Labor Prohibited Transaction Exemption ("PTE")
95-60 (issued July 12, 1995) and there is no employee benefit plan,
treating as a single plan, all plans maintained by the same employer or
employee organization, with respect to which the amount of the general
account reserves and liabilities for all contracts held by or on behalf of
such plan, exceed ten percent (10%) of the total reserves and liabilities
of such general account (exclusive of separate account liabilities) plus
surplus, as set forth in the NAIC Annual Statement for such Noteholder most
recently filed with such Noteholder's state of domicile; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as such Noteholder has disclosed to the
Company in writing pursuant to this paragraph (b), no employee benefit plan
or group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c)
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Stepan Company Amended and Restated Note Agreement
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM (applying the definition of "control"
in Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment fund
have been disclosed to the Company in writing pursuant to this paragraph
(c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Company in writing pursuant
to this paragraph (e); or
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
If any Noteholder or any subsequent transferee of the Notes indicates in
writing that such Noteholder or such transferee is relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall deliver on the
Effective Date and on the date of any applicable transfer a certificate, which
shall either state that (i) it is neither a party in interest nor a
"disqualified person" (as defined in Section 4975(e)(2) of the Code), with
respect to any plan identified pursuant to paragraphs (b) or (e) above, or (ii)
with respect to any plan, identified pursuant to paragraph (c) above, neither it
nor any "affiliate" (as defined in Section V(c) of the QPAM Exemption) has at
such time, and during the immediately preceding one year, exercised the
authority to appoint or terminate said QPAM as manager of any plan identified in
writing pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan. As used in this
Section 6.2, the terms "employee benefit plan", "governmental plan", "party in
interest" and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
Section 7. Information as to Company.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies
of:
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries for such quarter and (in the case of the second and
third quarters) for the portion of the fiscal year ending with
such quarter,
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Stepan Company Amended and Restated Note Agreement
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments, provided that
delivery within the time period specified above of copies of the Company's
Quarterly Report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this Section 7.1(a);
(b) Annual Statements-- within 90 days after the end of each
fiscal year of the Company, duplicate copies of:
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP,
and accompanied by
(A) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion
shall state that such financial statements present fairly,
in all material respects, the financial position of the
companies being reported upon and their results of
operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has
been made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable basis
for such opinion in the circumstances, and
(B) a certificate of such accountants stating that they
have reviewed this Agreement and containing substantially
the following: "We have audited, in accordance with auditing
standards generally accepted in the United States of
America, the balance sheet of Stepan Company as of December
31, 20xx, and the related statements of income,
stockholders' equity, and cash flows for the year then
ended, and have issued our report thereon. In connection
with our audit, nothing came to our attention that caused us
to believe that the Company failed to comply with the terms,
covenants, provisions or conditions of Section 10.1,
10.2(a)(iii) and 10.6 of the Amended and Restated Note
Agreement dated as of December __, 2002, with the holders of
the Notes stated therein (the "Noteholders") insofar as they
relate to financial and accounting matters (except as
hereinafter specified). However, our audit was not directed
primarily toward obtaining knowledge of noncompliance with
such Sections. This
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Stepan Company Amended and Restated Note Agreement
report is intended solely for the information and use of the
boards of directors and management of Stepan Company and the
Noteholders, and is not intended to be and should not be
used by anyone other than these specified parties."
provided that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with
the Company's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in clause
(B) above, shall be deemed to satisfy the requirements of this Section
7.1(b);
(c) Restricted Subsidiaries and Unrestricted Subsidiaries -- if,
and so long as, the Company has (i) one or more Restricted Subsidiaries,
the financial statements referred to in Section 7.1(a) and Section 7.1(b)
shall be on a consolidated basis prepared in accordance with GAAP, or (ii)
one or more Unrestricted Subsidiaries, the Company shall deliver to the
holders of the Notes, promptly after receipt thereof, copies of balance
sheets and income and surplus and cash flows statements of each such
Subsidiary, prepared in accordance with GAAP, which are not included in the
financial statements furnished pursuant to Section 7.1(b), in the form
delivered to the Company for the fiscal year of each such Subsidiary;
(d) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public securities
holders generally, and (ii) each regular or periodic report, each
registration statement (without exhibits except as expressly requested by
such holder), and each prospectus and all amendments thereto filed by the
Company or any Subsidiary with the Securities and Exchange Commission and
of all press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that are
Material;
(e) Notice of Default or Event of Default -- promptly, and in any
event within five Business Days (i) after a Responsible Officer becoming
aware of the existence of any Default or Event of Default or that any
Person has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any
action with respect to a claimed default of the type referred to in Section
11(f), a written notice specifying the nature and period of existence
thereof and what action the Company is taking or proposes to take with
respect thereto and (ii) of their becoming available, one copy of any
letter, certificate or other writing supplied by the Company's independent
public accountants to any other Person pertaining to whether such
accountants have cause to believe that there has been any default by the
Company under any other agreement or evidence of Indebtedness;
(f) ERISA Matters -- promptly, and in any event within five
Business Days after a Responsible Officer becoming aware of any of the
following, a written notice
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Stepan Company Amended and Restated Note Agreement
setting forth the nature thereof and the action, if any, that the Company
or an ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived pursuant
to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or
(iii) any event, transaction or condition that could result
in the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with any
other such liabilities or Liens then existing, could reasonably
be expected to have a Material Adverse Effect;
(g) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary of which a Responsible Officer is aware from any
Federal or state Governmental Authority relating to any order, ruling,
statute or other law or regulation that could reasonably be expected to
have a Material Adverse Effect, provided that, with respect to notices
regarding environmental matters at the Company's Maywood, New Jersey
property, the Company shall only be required to send copies of such notices
containing information regarding (i) adverse developments which are
Material or (ii) matters not previously disclosed that could reasonably be
expected to have a Material Adverse Effect; and
(h) Notice of Change of Control -- without limiting the
obligations of the Company set forth in Section 8.3, promptly, and in any
event within two Business Days of the earlier of becoming aware of the
execution of a Definitive Agreement by the Company or the consummation of a
Change of Control (as defined in Section 8.3), give notice thereof to all
holders of the Notes; and
(i) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes.
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Stepan Company Amended and Restated Note Agreement
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including reasonably
detailed calculations) required in order to establish whether the Company
was in compliance with the requirements of Section 10.1 through Section
10.10 hereof, inclusive, during the quarterly or annual period covered by
the statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists,
at the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to discuss
the affairs, finances and accounts of the Company and its Subsidiaries with
the Company's officers, and (with the consent of the Company, which consent
will not be unreasonably withheld) its independent public accountants with
a representative of the Company being present, at the option of the
Company, and (with the consent of the Company, which consent will not be
unreasonably withheld) to visit the other offices and properties of the
Company and each Subsidiary, all at such reasonable times and as often as
may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at
the expense of the Company, to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public
accountants (and by this provision the Company authorizes said accountants
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries), all at such times and as often as may be requested.
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Stepan Company Amended and Restated Note Agreement
Section 8. Prepayment of the Notes.
Section 8.1. Required Prepayments. In addition to paying the entire
outstanding principal amount and the interest due on the Notes on the maturity
date thereof, on October 1 in each year, commencing October 1, 2003 and ending
October 1, 2012 (herein called "Fixed Payment Dates"), both inclusive, the
Company will prepay $2,727,272 principal amount (or such lesser principal amount
as shall then be outstanding) of the Notes at par and without payment of the
Make-Whole Amount or any premium, provided that upon any partial prepayment of
the Notes pursuant to Section 8.2 or Section 8.3 or purchase of the Notes
permitted by Section 8.6 the principal amount of each required prepayment of the
Notes becoming due under this Section 8.1 on and after the date of such
prepayment or purchase shall be reduced in the same proportion as the aggregate
unpaid principal amount of the Notes is reduced as a result of such prepayment
or purchase.
Section 8.2. Optional Prepayments. (a) Without Make-Whole Amount. In
addition to the prepayments required by Section 8.1, the Company, at its option,
upon notice as provided below, shall have the privilege (which shall be
non-cumulative) of prepaying outstanding Notes on any Fixed Payment Date in
units of $100,000 or an integral multiple of $10,000 in excess thereof, by
payments of the principal amount of the Notes to be prepaid and accrued interest
thereon to the date of such payment and without premium; provided however that
(i) the principal amount of Notes that may be prepaid pursuant to this Section
8.2(a) on any one Fixed Payment Date shall not exceed the principal amount of
the Notes required to be prepaid pursuant to Section 8.1 on such Fixed Payment
Date and (ii) the aggregate amount of all Notes prepaid pursuant to this Section
8.2 shall not exceed an amount equal to $10,000,000.
(b) With Make-Whole Amount. In addition to the prepayments required by
Section 8.1 and the rights of prepayment set forth in Section 8.2(a), the
Company may, at its option, upon notice as provided below, prepay at any time
all, or from time to time any part of, the Notes, in units of $1,000,000 or an
integral multiple of $10,000 in excess thereof in the case of a partial
prepayment, at 100% of the principal amount so prepaid, together with interest
accrued thereon to the date of such prepayment, plus the Make-Whole Amount
determined for the prepayment date with respect to such principal amount.
(c) Notices of Optional Prepayments. The Company will give each holder of
Notes written notice of each optional prepayment under Section 8.2(a) and
Section 8.2(b) not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such date, the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.4), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and, in the case of
prepayments made pursuant to Section 8.2(b), shall be accompanied by a
certificate of a Senior Financial Officer as to the estimated Make-Whole Amount
due in connection with such prepayment (calculated as if the date of such notice
were the date of the prepayment), setting forth the details of such computation.
Two Business Days prior to such prepayment, the Company shall deliver to each
holder of Notes a certificate of a Senior Financial Officer specifying the
calculation of such Make-Whole Amount as of the specified prepayment date.
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Stepan Company Amended and Restated Note Agreement
Section 8.3. Prepayment on Failure of Noteholders to Consent to Change
of Control. In the event that the Company shall request the holders of the Notes
in writing to consent to a Change of Control and the holder or holders of any
Notes shall, within 30 days following the receipt of such a request, have
refused in writing to consent to such a Change of Control, then the Company may
at its option, but shall prior to the Change of Control, at any time within 30
days after the earlier of (x) the receipt of a response to such request from the
holder or holders of 100% of the outstanding Notes, or (y) the expiration of
such 30 day period, and upon not less than three Business Days prior written
notice, prepay all (but not less than all) Notes held by each holder which has
refused to consent to such Change of Control by prepayment of the principal
amount thereof and accrued interest thereon to the date of such prepayment, but
without any premium or Make Whole Amount. Any holder which has failed to respond
in writing to such request prior to the expiration of such 30 day period shall,
for all purposes hereof, be deemed to have consented to such Change of Control.
Any request by the Company made pursuant to this Section 8.3 shall set forth (i)
a summary of the transaction or transactions causing the Change of Control, (ii)
the name and address of the "person" described in clause (i) or (ii) of the
definition of the term "Change of Control" set forth below, (iii) such
information relating to the acquiror and pro forma financial or other
information as would be reasonably necessary for each holder to make an informed
decision with respect to such request, (iv) a statement as to whether, at the
time of such Change of Control and after giving effect thereto, either any Event
of Default or any event which, with the passage of time or giving of notice, or
both, would become an Event of Default, shall have occurred and be continuing
and (v) a specific reference to this Section 8.3 and the requirement that the
holders must respond in writing by the date set forth in the notice and that
failure to respond in writing by such specified date shall be deemed consent by
such holder to the Change of Control. In the event that the Company shall
receive a response to its request from any holder of a Note, it will promptly
deliver a copy thereof to all other holders of Notes.
For purposes of this Agreement, the term "Change of Control" shall mean and
shall be deemed to have occurred, (i) upon the Acquisition by any "person" (as
that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) of
beneficial ownership, direct or indirect, of more than 50% of the outstanding
Voting Stock of the Company, or (ii) upon the Acquisition of the Company, or all
or substantially all of its assets by, or the combination of the Company, or all
or substantially all of its assets with, another "person" (as defined above),
unless, in the case of either of the foregoing clauses (i) or (ii), the
acquiring or surviving "person" shall be a corporation more than 50% of the
outstanding Voting Stock of which is owned, immediately after such Acquisition
or combination, by the owners of the Voting Stock of the Company immediately
prior to such Acquisition or combination. The term "Acquisition" shall mean the
earlier to occur of (x) the actual possession of the subject Voting Stock or
assets, and (y) the consummation of any transaction or series of related
transactions which, with the passage of time, will give such person the actual
possession thereof. The term "Voting Stock" shall mean securities of any class
or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
persons performing similar functions).
Section 8.4. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes pursuant to Sections 8.2(a) and 8.2(b), the
principal amount of the Notes to be
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Stepan Company Amended and Restated Note Agreement
prepaid shall be allocated among all of the Notes at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof. All partial prepayments made pursuant to Section 8.3 shall be applied
only to the Notes of the holders who have refused in writing to consent to a
Change of Control.
Section 8.5. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.6. Purchase of Notes. The Company will not and will not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.
Section 8.7. Make-Whole Amount. The term "Make-Whole Amount" means, with
respect to any Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal
of such Note over the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 8.2(b) or has become
or is declared to be immediately due and payable pursuant to Section 12.1,
as the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the
Notes is payable) equal to the Reinvestment Yield with respect to such
Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal
of any Note, 0.50% over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on
page "PX-1" of the Bloomberg Financial Markets Service Screen (or, if not
available, any other nationally recognized trading screen reporting on-line
intraday trading in U.S. Treasury securities) for actively traded U.S.
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Stepan Company Amended and Restated Note Agreement
Treasury securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date, or (ii) if no such
nationally recognized trading screen reporting on-line intraday trading in
United States government securities is available, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields
have been so reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by
(a) converting U.S. Treasury xxxx quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between (1) the actively traded U.S. Treasury security with the duration
closest to and greater than the Remaining Average Life and (2) the actively
traded U.S. Treasury security with the duration closest to and less than
the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or
12.1.
"Settlement Date" means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant
to Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
Section 9. Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their
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Stepan Company Amended and Restated Note Agreement
respective businesses, in each case, except to the extent that non-compliance
with such laws, ordinances or governmental rules or regulations, or failure to
obtain or maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations, could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Company will, and will cause
each of its Subsidiaries to, maintain and keep, or cause to be maintained and
kept, their respective Material properties in good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business.
Section 9.4. Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (a) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (b) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to have
a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Section 10.8, the Company will at all times preserve and keep in full force and
effect the corporate existence of each of its Restricted Subsidiaries (unless
merged into the Company or a Wholly-Owned Restricted Subsidiary or dissolved and
the property and assets of such Subsidiary are dividended up to the Company or
to a Wholly-Owned Restricted Subsidiary) and all rights and franchises of the
Company and its Subsidiaries unless, in the good faith judgment of the Company,
the termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.
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Stepan Company Amended and Restated Note Agreement
Section 9.6. Payment of Principal, Make-Whole Amount and Interest. The
Company will pay or cause to be paid when due the principal and interest, and
Make-Whole Amount, if any, to become due in respect of all the Notes according
to the terms thereof.
Section 9.7. Keeping of Books. The Company will, and will cause each
Subsidiary to, (a) at all times keep proper books of record and account in which
full, true and correct entries will be made of its transactions in accordance
with GAAP; and (b) set aside on its books from its earnings, for the fiscal year
ending December 31, 2002, and each fiscal year thereafter, proper reserves
which, in accordance with GAAP, should be set aside from such earnings in
connection with its business.
Section 9.8. Guaranty by Subsidiaries. The Company will cause each
Subsidiary which delivers a Guaranty to any Person (collectively, the
"Subsidiary Guarantors") in respect of any Indebtedness of the Company
outstanding under the Revolving Credit Agreement to concurrently enter into a
Subsidiary Guaranty, and within five Business Days thereafter shall deliver to
each of the holders of the Notes the following items:
(a) an executed counterpart of such Subsidiary Guaranty or
joinder agreement in respect of an existing Subsidiary Guaranty, as
appropriate;
(b) an executed counterpart of an intercreditor agreement among
the holders of the Notes and each such Person to which a Subsidiary is then
delivering a Guaranty giving rise to the requirements of this Section 9.8,
which agreement shall be in form and substance reasonably satisfactory to
the holders of the Notes and shall provide that the proceeds from the
enforcement of all such Subsidiary Guaranties shall be shared on an equal
and ratable basis among the holders of the Notes and such other Persons;
and
(c) an opinion of counsel satisfactory to the Required Holders to
the effect that such Subsidiary Guaranty has been duly authorized, executed
and delivered and constitutes the legal, valid and binding contract and
agreement of such Subsidiary enforceable in accordance with its terms,
except as an enforcement of such terms may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
Section 10. Negative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Financial Covenants.
(a) Interest Coverage Ratio. The Company and its Restricted
Subsidiaries will maintain a ratio of Consolidated Earnings Before Interest
and Taxes to Consolidated Interest Expense, as of the end of each fiscal
quarter of the Company, such that the ratio calculated for such fiscal
quarter and the preceding three fiscal quarters taken as one accounting
period is at least 2.0 to 1.0.
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Stepan Company Amended and Restated Note Agreement
(b) Funded Indebtedness Limitation. At no time shall the Company
permit the ratio of (i) Consolidated Funded Indebtedness of the Company and
its Restricted Subsidiaries to (ii) Consolidated Capitalization to exceed
0.55 to 1.00; provided that for purposes of this Section 10.1(b) all
Indebtedness secured pursuant to the provisions of Sections 10.3(b), (c)
and (d) shall constitute Funded Indebtedness.
(c) Secured Funded Indebtedness Limitation. The Company will not
create, incur, issue, assume or become liable, contingently or otherwise,
in respect of any secured Funded Indebtedness other than secured Funded
Indebtedness incurred or assumed solely for the purpose of financing the
acquisition of any property and secured only as permitted under Sections
10.3(b), (c) and (d), provided that
(x) the aggregate unpaid principal amount of all
Indebtedness of the Company and its Restricted Subsidiaries
secured by the mortgages or Liens permitted by Sections 10.3(b),
(c) and (d) shall not at any time exceed an amount equal to 10%
of Consolidated Capitalization, and
(y) the sum, without duplication, of (i) the aggregate
unpaid principal amount of all Indebtedness of Restricted
Subsidiaries permitted by Section 10.2(a)(iii)(A) (excluding
Specified Subsidiary Indebtedness), (ii) the aggregate unpaid
principal amount of all Indebtedness of the Company secured
pursuant to the provisions of Sections 10.3(b), (c) and (d), and
(iii) the aggregate amount of liabilities of the Company and its
Restricted Subsidiaries secured by Liens permitted pursuant to
the provisions of Section 10.3(k), shall not at any time exceed
20% of Consolidated Capitalization.
Section 10.2. Limitations on Restricted Subsidiaries. The Company will
not cause, suffer or permit any Restricted Subsidiary to:
(a) create, incur, issue, assume or become or be liable,
contingently or otherwise, in respect of any Indebtedness except:
(i) Indebtedness owing to the Company or to a Wholly-Owned
Restricted Subsidiary,
(ii) unsecured accounts payable and other unsecured
obligations (other than as a result of borrowing) incurred in the
ordinary course of business of such Subsidiary, and
(iii) Indebtedness in addition to that described in
subclauses (i) and (ii) above; provided that
(A) the aggregate principal amount of all Indebtedness
of Restricted Subsidiaries (other than as described in
subclauses (i) and (ii) above and other than Specified
Subsidiary Indebtedness) shall not at any time exceed 10% of
Consolidated Capitalization;
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Stepan Company Amended and Restated Note Agreement
(B) the sum, without duplication, of (x) the aggregate
unpaid principal amount of all such Indebtedness permitted
by subclause (iii)(A), (y) the aggregate unpaid principal
amount of all Indebtedness of the Company secured pursuant
to the provisions of Sections 10.3(b), (c) and (d), and (z)
the aggregate amount of liabilities of the Company and its
Restricted Subsidiaries secured by Liens permitted pursuant
to the provisions of Section 10.3(k), shall not at any time
exceed 20% of Consolidated Capitalization; and
(C) at the time of creation, incurrence, issuance,
assumption or guarantee thereof and after giving effect
thereto and to the application of the proceeds thereof, no
Default or Event of Default would exist (including, without
limitation, under Section 10.1(b) hereof); or
(b) issue or sell any shares of its capital stock or securities
convertible into such capital stock except (i) issuance or sale of
directors' qualifying shares, (ii) issuance or sale to the Company or to
any Wholly-Owned Restricted Subsidiary, (iii) issuance or sale of
additional shares of stock of any such Subsidiary to any holders thereof
entitled to receive or purchase such additional shares through the
declaration of a stock dividend or through the exercise of preemptive
rights and (iv) issuance or sale to any Substantially-Owned Restricted
Subsidiary for fair value, provided that the Dilution of the Company's and
its Restricted Subsidiaries' interests in the Subsidiary whose shares of
capital stock or convertible securities are so issued or sold shall be
treated as a sale of assets by the Company and such sale or deemed sale
shall be permitted by Section 10.8; or
(c) sell, assign, transfer or otherwise dispose of any shares of
capital stock of any class of any other Restricted Subsidiary, or any other
security of, or any Indebtedness owing to it by, any other Restricted
Subsidiary (except in each case to the Company or to a Wholly-Owned
Restricted Subsidiary) unless such sale, assignment, transfer or other
disposition (i) shall be to a Substantially-Owned Restricted Subsidiary for
fair value and the Dilution of the Company's and its Restricted
Subsidiaries' interests in the Subsidiary whose shares of capital stock,
securities or Indebtedness are so sold, assigned, transferred or disposed
of shall be treated as a sale of assets of the Company and such sale or
deemed sale shall be permitted by Section 10.8 or (ii) shall meet all the
conditions set forth in Section 10.7 which would be applicable to a similar
disposition made by the Company; or
(d) consolidate with or merge into any other corporation or
permit any other corporation to merge into it, except a merger into or
consolidation with (i) the Company, (ii) any Wholly-Owned Restricted
Subsidiary or (iii) any other corporation if, immediately thereafter, (y)
the surviving corporation shall be a Restricted Subsidiary, and (z) the
Company shall be in full compliance with all the terms and provisions of
this Agreement and the Notes; or
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Stepan Company Amended and Restated Note Agreement
(e) sell, lease, transfer or otherwise dispose of all or any
substantial part of its property and assets except (i) to the Company or
any Wholly-Owned Restricted Subsidiary or (ii) in the case of a sale to any
other Person, in compliance with all applicable requirements of Sections
10.7, 10.8 and 10.11; or
(f) make any Investments or commitments to make Investments
except as expressly permitted by Section 10.5.
Any corporation which becomes a Restricted Subsidiary after the date hereof
shall for all purposes of this Section 10.2 be deemed to have created, assumed
or incurred, at the time it becomes a Restricted Subsidiary, all Indebtedness of
such corporation existing immediately after it becomes a Restricted Subsidiary.
Section 10.3. Limitations on Liens. The Company will not itself, and will
not permit or suffer any Restricted Subsidiary to, create or incur or suffer to
be created or incurred or to exist any mortgage, Lien, security interest, charge
or encumbrance of any kind on, or pledge of, any property or assets of any kind,
real or personal, tangible or intangible, of the Company or any such Subsidiary,
whether owned on the Effective Date or thereafter acquired, or acquire or agree
to acquire any property or assets of any kind under a conditional sale agreement
or other title retention agreement or file or permit the filing of any financing
statement under the Uniform Commercial Code or other similar notice under any
other similar statute without equally and ratably securing the Notes with all
other obligations secured thereby and which security shall be created and
conveyed by documentation (which may include an intercreditor agreement)
determined prior to such conveyance to be satisfactory in scope, form and
substance to the Required Holders and which security shall continue in full
force and effect until either (x) the same is released by the Required Holders,
(y) all other obligations secured thereby are discharged, or (z) the security is
released by the holders of all such other obligations, and in any case the Notes
shall have the benefit, to the full extent that the holders may be entitled
thereto under applicable law, of an equitable Lien on such property or assets
equally and ratably securing the Notes; provided, however, that the provisions
of this Section 10.3 shall not prevent or restrict the creation, incurring or
existence of any of the following:
(a) any mortgage, Lien, security interest, charge or encumbrance
on, or pledge of, any property or assets of any such Subsidiary to secure
Indebtedness owing by it to the Company or a Wholly-Owned Restricted
Subsidiary;
(b) purchase money mortgages or other Liens on real property
(including leaseholds) and fixtures thereon, acquired by the Company or any
such Subsidiary, to secure the purchase price of such property (or to
secure Indebtedness incurred solely for the purpose of financing the
acquisition of any such property to be subject to such mortgage or other
Lien) and created contemporaneously with such acquisition or within 180
days thereafter, or mortgages or other Liens existing on any such property
at the time of acquisition of such property by the Company or by such
Subsidiary, whether or not assumed, or any mortgage or Lien on real
property of such Subsidiary existing at the time of acquisition of such
Subsidiary, provided that at the time of the acquisition of the property by
the Company or a Restricted Subsidiary, or at the time of the acquisition
of
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Stepan Company Amended and Restated Note Agreement
the Restricted Subsidiary by the Company, as the case may be, (i) the
principal amount of the Indebtedness secured by each such mortgage or Lien,
plus the principal amount of all other Indebtedness secured by mortgages or
Liens on the same property, shall not exceed 75% (100% in the case of
Capitalized Leases) of the cost (which shall be deemed to include the
amount of all Indebtedness secured by mortgages or other Liens, including
existing Liens, on such property) of such property to the Company or any
such Subsidiary, or 75% (100% in the case of Capitalized Leases) of the
fair value thereof (without deduction of the Indebtedness secured by
mortgages or Liens on such property) at the time of the acquisition thereof
by the Company or such Subsidiary, whichever is the lesser, and (ii) every
mortgage or Lien shall apply only to the property originally subject
thereto and fixed improvements, accessions and attachments constructed or
located thereon;
(c) refundings or extensions of the mortgages or Liens permitted
in the foregoing clause (b) applying only to the same property theretofore
subject to the same and fixed improvements, accessions and attachments
constructed or located thereon and for amounts not exceeding the greater of
(i) the principal amounts of the Indebtedness so refunded or extended at
the time of the refunding or extension thereof or (ii) amounts of
additional Indebtedness then permitted under all applicable provisions of
Section 10.1, provided that the principal amount of such Indebtedness, plus
the principal amount of all other Indebtedness secured by mortgages or
Liens on the same property, shall not exceed 75% (100% in the case of
Capitalized Leases) of the fair value thereof (without deduction of the
Indebtedness secured by mortgages or Liens on such property) at the time of
the refunding or extension;
(d) the owning or acquiring or agreeing to acquire machinery or
equipment useful for the business of the Company or any such Subsidiary
subject to or upon chattel mortgages or conditional sale agreements or
other title retention agreements, provided that the principal amounts of
the Indebtedness secured by such chattel mortgages, plus the aggregate
amounts payable under such conditional sale agreements and other title
retention agreements, shall not exceed the limitations set forth in Section
10.1(c);
(e) deposits, Liens or pledges to enable the Company or any such
Subsidiary to exercise any privilege or license, or to secure payments of
workmen's compensation, unemployment insurance, old age pensions or other
social security, or to secure the performance of bids, tenders, contracts
(other than for the payment of money) or leases to which the Company or any
such Subsidiary is a party, or to secure public or statutory obligations of
the Company or any such Subsidiary, or to secure surety, stay or appeal
bonds to which the Company or any such Subsidiary is a party, but, as to
all of the foregoing, only if the same shall arise and continue in the
ordinary course of business; or other similar deposits or pledges made and
continued in the ordinary course of business;
(f) mechanic's, workmen's, repairmen's or carriers' Liens, but
only if arising, and only so long as continuing, in the ordinary course of
business; or other similar Liens arising and continuing in the ordinary
course of business; or deposits or pledges in the ordinary course of
business to obtain the release of any such Liens;
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Stepan Company Amended and Restated Note Agreement
(g) Liens arising out of judgments or awards against the Company
or any such Subsidiary with respect to which the Company or such Subsidiary
shall in good faith be prosecuting an appeal or proceedings for review; or
Liens incurred by the Company or any such Subsidiary for the purpose of
obtaining a stay or discharge in the course of any legal proceeding to
which the Company or such Subsidiary is a party;
(h) Liens for taxes not yet subject to penalties for non-payment
or contested as permitted by Section 9.4, or survey exceptions, or
encumbrances, easements or reservations of, or rights of others for, rights
of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which encumbrances, easements, reservations, rights and
restrictions do not in the aggregate materially detract from the value of
said properties or materially impair their use in the operation of the
business of the Company or of such Subsidiary owning the same;
(i) Liens: (x) in favor of the United States of America or any
department or agency thereof or in favor of a prime contractor under a
United States Government contract, and (y) resulting from the acceptance of
progress or partial payments under United States Government contracts or
subcontracts thereunder;
(j) any arrangement permitted by Section 10.9;
(k) inchoate Liens arising under ERISA to secure contingent
liabilities under said Act; or
(l) Liens on accounts receivable and ancillary rights sold (or in
which participating interests are sold) in compliance with all applicable
requirements of Section 10.8,
provided, however, that the aggregate unpaid principal amount of all
Indebtedness of the Company and its Restricted Subsidiaries secured by the
mortgages or Liens of the types described in Sections 10.3(b), (c) and (d) shall
not at any time exceed the amounts permitted pursuant to Sections 10.1(c) and
10.2(a)(iii)(B).
For purposes of this Agreement, the Company or a Restricted Subsidiary
shall be deemed to be the owner of any property which it has acquired or holds
subject to a conditional sale agreement, Capitalized Lease or other arrangement
pursuant to which the property has been retained by or vested in some other
person for security purposes and such retention or vesting shall constitute a
Lien hereunder.
Section 10.4. Limitations on Guaranties. The Company will not itself, and
will not permit any Restricted Subsidiary to, guarantee any dividend, or
guarantee any obligation or Indebtedness, of any other Person other than (a)
guaranties by the Company of obligations or Indebtedness of a Restricted
Subsidiary which such Subsidiary shall be authorized to incur pursuant to the
provisions of this Agreement, (b) guaranties incurred in the ordinary course of
business of the Company or of a Restricted Subsidiary, (c) guaranties by the
Company of
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Stepan Company Amended and Restated Note Agreement
Indebtedness of Persons other than Restricted Subsidiaries if, and to the extent
that, immediately after giving effect thereto, no Default or Event of Default
would exist (including, without limitation, under Section 10.1(b), treating all
such guaranties as Funded Indebtedness for purposes of such determination), (d)
Subsidiary Guaranties and (e) Permitted Guaranties.
Section 10.5. Limitations on Investments. The Company will not itself,
and will not permit any Restricted Subsidiary to, make any Investment, or any
commitment to make any Investment, if, immediately after giving effect to any
such proposed Investment, (a) the aggregate amount of all Investments, including
Investments made prior to the Effective Date (all such Investments to be taken
at the cost thereof at the time of making such Investment without allowance for
any subsequent write-offs or appreciation or depreciation thereof, but less any
amount repaid or recovered on account of capital or principal), shall exceed 30%
of the Consolidated Tangible Net Worth of the Company and its Restricted
Subsidiaries, or (b) Consolidated Funded Indebtedness shall exceed 55% of
Consolidated Capitalization.
Section 10.6. Limitations on Dividends. The Company will not declare or
pay, or set apart any funds for the payment of, any dividends (other than
dividends payable in common stock of the Company) on any shares of capital stock
of any class of the Company, or apply any of its funds, property or assets to,
or set apart any funds, property or assets for, the purchase, redemption or
other retirement of, or make any other distribution, by reduction of capital or
otherwise, in respect of, any shares of capital stock of any class of the
Company, unless, immediately after giving effect to such action (a) no Default
or Event of Default would exist (including, without limitation, under Section
10.1(b) hereof), and (b) the sum of
(1) the amounts declared and paid or payable as, or set apart
for, dividends (other than dividends paid or payable in common stock of the
Company) on, or distributions (taken at cost to the Company or fair value
at time of distribution, whichever is higher) in respect of, all shares of
capital stock of all classes of the Company subsequent to December 31,
2001, and
(2) the excess, if any, of the amounts applied to, or set apart
for, the purchase, redemption or retirement of all shares of capital stock
of all classes of the Company subsequent to December 31, 2001, over the sum
of (i) such amounts as shall have been received as the net cash proceeds of
sales of shares of capital stock of all classes of the Company subsequent
to December 31, 2001, plus (ii) the aggregate principal amount of all
Indebtedness of the Company and its Subsidiaries converted into or
exchanged for shares of capital stock of the Company subsequent to December
31, 2001,
would not be in excess of (x) $30,000,000 plus (or minus in the case of a
deficit) (y) the Consolidated Net Income of the Company and its Restricted
Subsidiaries accrued subsequent to December 31, 2001. The foregoing provisions
of this Section 10.6 to the contrary notwithstanding (i) the Company may pay any
dividend within 90 days of the date of its declaration if, on the date of
declaration, such dividend could properly have been paid within the limitations
of this Section 10.6, and (ii) the Company may pay regular dividends on or make
payments or purchases required to be made at the time when made by the terms of
any sinking fund, purchase fund or mandatory redemption requirement in respect
of any outstanding shares
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Stepan Company Amended and Restated Note Agreement
of preferred stock of the Company originally issued for cash but all amounts so
paid or applied pursuant to clauses (i) and (ii) above shall be included in any
subsequent computation of restricted payments under this Section 10.6. The
Company will not declare any dividend to be payable more than 90 days after the
date of declaration thereof. The Company will not declare any dividend if an
Event of Default shall have occurred and be continuing.
Section 10.7. Limitations on Dispositions of Stock or Indebtedness of
Restricted Subsidiaries. The Company will not sell, assign, transfer or
otherwise dispose of (except to a Wholly-Owned Restricted Subsidiary) any shares
of capital stock of any class of any Restricted Subsidiary, or any other
security of, or any Indebtedness owing to the Company by, any such Restricted
Subsidiary, unless
(a) (i) all of the capital stock and other securities owned by the Company
and its Restricted Subsidiaries, and the entire Indebtedness of such Restricted
Subsidiary at the time owing to the Company and all its other Restricted
Subsidiaries, shall be sold, assigned, transferred or otherwise disposed of, at
the same time for cash, (ii) such Restricted Subsidiary shall not, at the time
of such sale, assignment, transfer or other disposition, own either (x) any
shares of capital stock of any class or any other security or any Indebtedness
of any other Restricted Subsidiary of the Company which is not being
simultaneously disposed of as permitted by this Section 10.7 or (y) any
Indebtedness of the Company, and (iii) such sale, assignment or transfer is
permitted by Section 10.8; or
(b) such sale, assignment, transfer or other disposition is to a
Substantially-Owned Restricted Subsidiary for fair value and the Dilution of the
Company's and its Restricted Subsidiaries' interests in the Subsidiary whose
shares of capital stock, securities or Indebtedness are so sold, assigned,
transferred or disposed of shall be treated as a sale of assets of the Company
and shall be in compliance with the applicable requirements of Section 10.8.
Section 10.8. Limitations on Mergers, Consolidations and Sales of Assets.
The Company will not (a) consolidate with or merge into any other Person, or
permit any other Person to merge into the Company, unless (i) the surviving or
continuing Person shall be either the Company or another solvent corporation
organized under the laws of any state of the United States or the District of
Columbia having long term unsecured debt which is rated "BBB" or better by
Standard & Poor's Corporation or "Baa" or better by Xxxxx'x Investors Service,
Inc., (ii) the due and punctual payment of the principal of and Make-Whole
Amount, if any, and interest on all of the Notes according to their tenor, and
this Agreement to be performed or observed by the Company are expressly assumed
in writing by the surviving corporation and the surviving corporation shall
furnish to the holders of the Notes an opinion of counsel satisfactory to such
holders to the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal, valid and binding
contract and agreement of the surviving corporation enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' right generally and by general equitable
principles, and (iii) no Event of Default shall exist at the time of, or result
from, such merger or consolidation; or (b) sell, lease, transfer or otherwise
dispose of all or any substantial part of its property and assets.
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Stepan Company Amended and Restated Note Agreement
For the purposes of this Section 10.8 and Section 10.2(e), a sale, lease,
transfer or disposition of properties or assets of the Company or a Restricted
Subsidiary shall be deemed to be of a "substantial part" thereof only if the
fair market value of such properties or assets, when added to the fair market
value of all other properties or assets sold, leased, transferred or disposed of
by the Company and its Restricted Subsidiaries, other than (x) in the ordinary
course of business, or (y) in an Approved Transaction, during the 365 day period
ending on the date of the consummation of such sale, lease, transfer or
disposition exceeds 15% of the Consolidated Assets of the Company and its
Restricted Subsidiaries determined as of the end of the Company's immediately
preceding fiscal year.
As used herein, the term "Approved Transaction" shall mean any sale, lease,
transfer or disposition of properties or assets to the extent that the Company
shall, within 5 Business Days of such sale, lease, transfer or disposition,
certify in writing to each holder of outstanding Notes that such transaction
shall constitute an "Approved Transaction" for all purposes hereof.
The Company will, on a date not later than the 365th day after the
occurrence of any Approved Transaction, apply an amount equal to the after tax
proceeds of each Approved Transaction to either
(i) the purchase, acquisition or construction of capital assets
which are useful and to be used in the surfactant, polymer, or specialty
chemical business of the Company or a Restricted Subsidiary or a line of
business reasonably related to the foregoing or any other line of business
in which the Company and its Subsidiaries are engaged as of the Effective
Date and described in the 10-K; or
(ii) the prepayment of unsecured Funded Indebtedness of the
Company, including the concurrent prepayment of Notes pursuant to the
provisions of Section 8.2(b) hereof pro rata with all other unsecured
Funded Indebtedness then being prepaid;
provided, however, that to the extent that, at any time, the fair market value
of all properties or assets which were the subject of Approved Transactions (an
amount equal to the net after tax proceeds of which have not theretofore been
applied as contemplated in clause (i) or clause (ii) above) exceeds 10% of the
Consolidated Assets of the Company and its Restricted Subsidiaries, determined
as of the end of the fiscal year of the Company immediately preceding any
determination hereunder, the Company will, on a date not later than the 30th day
after such determination, apply the net after tax proceeds of such excess
Approved Transactions in the manner contemplated in clause (i) or clause (ii)
above.
Section 10.9. Limitations on Sale-and-Leasebacks. The Company will not
itself, and will not permit any Restricted Subsidiary to, enter into any
arrangement, directly or indirectly, with any person whereby the Company or such
Subsidiary shall sell or transfer any manufacturing plant or equipment owned or
acquired by the Company or such Subsidiary and then or thereafter rent or lease,
as lessee, such property or any part thereof, or other property which the
Company or such Subsidiary, as the case may be, intends to use for substantially
the same purpose or purposes as the property being sold or transferred, unless
(a) the lease covering such property or
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Stepan Company Amended and Restated Note Agreement
other property shall be for a term of not less than three years, and (b) the
Company could then have outstanding unsecured Funded Indebtedness under Section
10.1(b) in an amount not less than the capitalized value of the rentals payable
by the Company or such Subsidiary, as the case may be, under such lease
determined in accordance with GAAP.
Section 10.10. Limitations on Rentals. The Company will not itself, and
will not permit any Restricted Subsidiary to, enter into, as lessee, or be a
party to, any lease of property if, immediately after giving effect to such
lease, the aggregate amount of Rentals (excluding up to $2,500,000 of tank car
rentals incurred during such fiscal year and any Rentals payable under
Capitalized Leases or under leases between the Company and any Wholly-Owned
Restricted Subsidiary or between Wholly-Owned Restricted Subsidiaries) for any
fiscal year of the Company payable by the Company and its Restricted
Subsidiaries with respect to all such leases shall exceed 5% of Consolidated
Tangible Net Worth of the Company and its Restricted Subsidiaries. For the
purposes of this Section 10.10, the term "Rentals," with respect to any lease
and for any period, shall mean the aggregate amount payable by the lessee under
such lease for such period to the lessor.
Section 10.11. Transactions with Affiliates. Notwithstanding any other
provision hereof, the Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into any transaction with any
Affiliate of the Company (other than a Wholly-Owned Restricted Subsidiary)
unless such transaction is in the ordinary course of, and pursuant to the
reasonable requirements of, the Company's or such Restricted Subsidiary's
business and is determined by the Board of Directors of the Company to be at
least as favorable to the Company or such Restricted Subsidiary as generally
obtainable at the time from persons other than Affiliates of the Company in a
similar transaction.
Section 11. Events of Default.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance with
any term contained in Section 10; or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs (a),
(b) and (c) of this Section 11) and such default is not remedied within 30
days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company receiving written notice of
such default from any holder of a Note (any such written
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Stepan Company Amended and Restated Note Agreement
notice to be identified as a "notice of default" and to refer specifically
to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on
behalf of the Company or any Subsidiary Guarantor or by any officer of the
Company or any Subsidiary Guarantor in this Agreement, any Subsidiary
Guaranty or in any writing furnished in connection with the transactions
contemplated hereby proves to have been false or incorrect in any material
respect on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default
(as principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount of at
least $2,500,000 beyond any period of grace provided with respect thereto,
or (ii) the Company or any Restricted Subsidiary is in default in the
performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least
$2,500,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default
or condition such Indebtedness has become, or has been declared (or one or
more Persons are entitled to declare such Indebtedness to be), due and
payable before its stated maturity or before its regularly scheduled dates
of payment, or (iii) as a consequence of the occurrence or continuation of
any event or condition (other than the passage of time or the right of the
holder of Indebtedness to convert such Indebtedness into equity interests),
(x) the Company or any Restricted Subsidiary has become obligated to
purchase or repay Indebtedness before its regular maturity or before its
regularly scheduled dates of payment in an aggregate outstanding principal
amount of at least $2,500,000, or (y) one or more Persons have the right to
require the Company or any Restricted Subsidiary so to purchase or repay
such Indebtedness; or
(g) the Company or any Restricted Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against
it of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Restricted Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Company or any of its
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Stepan Company Amended and Restated Note Agreement
Restricted Subsidiaries, or any such petition shall be filed against the
Company or any of its Restricted Subsidiaries and such petition shall not
be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money in
excess of $1,000,000 are rendered against one or more of the Company and
its Restricted Subsidiaries and which judgments are not, within 30 days
after entry thereof, bonded, discharged or stayed pending appeal or are not
discharged within 60 days after the expiration of such stay or appeal; or
(j) a Change of Control shall occur and continue for more than 40
days or a default shall occur in giving notice of any Change of Control
pursuant to the provisions of Section 7.1(h); or
(k) any Subsidiary Guaranty shall cease to be in full force and
effect for any reason whatsoever (other than with the prior consent of the
Required Holders), including, without limitation, a determination by a
Governmental Authority of competent jurisdiction that either such guaranty
is invalid, void or unenforceable or a Subsidiary Guarantor shall contest
or deny in writing the validity or enforceability of any of its obligations
under any Subsidiary Guaranty; or
(l) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under Section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
Section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of Section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that
provides post-employment welfare benefits in a manner that would increase
the liability of the Company or any Subsidiary thereunder; and any such
event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
As used in Section 11(l), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
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Stepan Company Amended and Restated Note Agreement
Section 12. Remedies On Default, Etc.
Section 12.1. Acceleration. (a) If an Event of Default with respect to
the Company described in paragraph (g) or (h) of Section 11 (other than an Event
of Default described in clause (i) of paragraph (g) or described in clause (vi)
of paragraph (g) by virtue of the fact that such clause encompasses clause (i)
of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any Event of Default described in paragraph (a) of Section 11 has
occurred and is continuing, any holder or holders of 25% or more in principal
amount of the Notes at the time outstanding may, and if any other Event of
Default has occurred and is continuing, the Required Holders may at any time at
its or their option, by notice or notices to the Company, declare all the Notes
then outstanding to be immediately due and payable.
(c) In addition to the collective remedies of the holders of the Notes in
clause (b), if any Event of Default described in paragraph (a) or (b) of Section
11 has occurred and is continuing, any holder of Notes at the time outstanding
affected by such Event of Default may at any time, at its option, by notice or
notices to the Company, declare all the Notes held by it to be immediately due
and payable.
Upon any Note's becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 12.1, the Required
Holders then outstanding, by written notice to the Company, may rescind and
annul any such declaration and its consequences if (a) the Company has paid all
overdue interest on the Notes, all principal of and Make-Whole Amount, if any,
on any Notes that are due and payable and are unpaid other than by reason of
such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and
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Stepan Company Amended and Restated Note Agreement
(to the extent permitted by applicable law) any overdue interest in respect of
the Notes, at the Default Rate, (b) all Events of Default and Defaults, other
than non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
Section 13. Registration; Exchange; Substitution of Notes.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note
at the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, provided that
if necessary to enable the registration of transfer by a holder of its
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Stepan Company Amended and Restated Note Agreement
entire holding of Notes, one Note may be in a denomination of less than
$100,000. Any transferee of a Note, or purchaser of a participation therein,
shall, by its acceptance of such Note be deemed to make the same representations
to the Company regarding the Note or participation as such Noteholder has made
pursuant to Section 6.2, provided that such entity may (in reliance upon
information provided by the Company, which shall not be unreasonably withheld)
make a representation to the effect that the purchase by such entity of any Note
will not constitute a non-exempt prohibited transaction under Section 406(a) of
ERISA.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note is,
or is a nominee for, an original Noteholder or another holder of a Note
with a minimum net worth of at least $15,000,000, such Person's own
unsecured agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
Section 14. Payments On Notes.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Northfield, Illinois, at the principal office of the
Company in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as any Noteholder or such
Noteholder's nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary, the Company
will pay all sums becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for such purpose
below such Noteholder's signature at the foot of this Agreement, or by such
other method or at such other address as such Noteholder shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Noteholder shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently
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Stepan Company Amended and Restated Note Agreement
designated by the Company pursuant to Section 14.1. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by any Noteholder under this
Agreement and that has made the same agreement relating to such Note as such
Noteholder has made in this Section 14.2.
Section 15. Expenses, Etc.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by each Noteholder or holder of a
Note in connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes (whether
or not such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this Agreement
or the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note, and (b) the costs and expenses,
including financial advisors' fees, incurred in connection with the insolvency
or bankruptcy of the Company or any Subsidiary or in connection with any
work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save each Noteholder and each other holder
of a Note harmless from, all claims in respect of any fees, costs or expenses,
if any, of brokers and finders (other than those retained by such Noteholder or
holder).
Section 15.2. Survival. The obligations of the Company under this Section
15 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement or the Notes, and the termination
of this Agreement.
Section 16. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Noteholder of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of such
Noteholder or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement made as of the date given and qualified to the
extent provided therein. Subject to the preceding sentence, this Agreement and
the Notes embody the entire agreement and understanding between each Noteholder
and the Company and supersede all prior agreements and understandings relating
to the subject matter hereof.
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Stepan Company Amended and Restated Note Agreement
Section 17. Amendment and Waiver.
Section 17.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to any Noteholder unless consented
to by such Noteholder in writing, and (b) no such amendment or waiver may,
without the written consent of the holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, (iii) amend any
of Section 8, 11(a), 11(b), 12, 17 or 20 or (iv) give to any Note any preference
over any other Note.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof or of the Notes
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
whether or not such holder consented to such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to
as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
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Stepan Company Amended and Restated Note Agreement
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
Section 18. Notices.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:
(i) if to a Noteholder or such Noteholder's nominee, to such
Noteholder or such Noteholder's nominee at the address specified for such
communications below such Noteholder's signature at the foot of this
Agreement, or at such other address as such Noteholder or such Noteholder's
nominee shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of Chief Financial Officer with a
copy to the Company's General Counsel, or at such other address as the
Company shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
Section 19. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Noteholder on the Effective Date
(except the Notes themselves), and (c) financial statements, certificates and
other information previously or hereafter furnished to each Noteholder, may be
reproduced by such Noteholder by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Noteholder
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Noteholder in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any
-39-
Stepan Company Amended and Restated Note Agreement
other holder of Notes from contesting any such reproduction to the same extent
that it could contest the original, or from introducing evidence to demonstrate
the inaccuracy of any such reproduction.
Section 20. Confidential Information.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any Noteholder by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Noteholder as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to such Noteholder prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such
Noteholder or any Person acting on such Noteholder's behalf, (c) otherwise
becomes known to such Noteholder other than through disclosure by the Company or
any Subsidiary or (d) constitutes financial statements delivered to such
Noteholder under Section 7.1 that are otherwise publicly available. Each
Noteholder will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Noteholder in good faith to protect
confidential information of third parties delivered to such Noteholder, provided
that such Noteholder may deliver or disclose Confidential Information to (i)
such Noteholder's directors, trustees, officers, employees, agents, attorneys
and affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by such Noteholder's Notes), (ii)
such Noteholder's financial advisors and other professional advisors who agree
to hold confidential the Confidential Information substantially in accordance
with the terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which such Noteholder sells or offers to sell such
Note or any part thereof or any participation therein (if such Person has agreed
in writing prior to its receipt of such Confidential Information to be bound by
the provisions of this Section 20), (v) any Person from which such Noteholder
offers to purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (vi) any federal or state regulatory authority
having jurisdiction over such Noteholder, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such
Noteholder's investment portfolio, or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to such Noteholder, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which such Noteholder is a party or (z) if an Event of Default has
occurred and is continuing, to the extent such Noteholder may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under such
Noteholder's Notes and this Agreement. Each holder of a Note, by its acceptance
of a Note, will be deemed to have agreed to be bound by and to be entitled to
the benefits of this Section 20 as though it were a party to this Agreement. On
reasonable request by the Company in connection with the delivery to any holder
of a Note of information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that is a party to
this Agreement or
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Stepan Company Amended and Restated Note Agreement
its nominee or any other holder that shall have previously delivered such a
confirmation), such holder will confirm in writing that it is bound by the
provisions of this Section 20.
Section 21. Substitution of Noteholder.
Each Noteholder shall have the right to substitute any one of such
Noteholder's Affiliates as the purchaser of the Notes that such Noteholder has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Noteholder and such Noteholder's Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with respect to it of
the representations set forth in Section 6. Upon receipt of such notice,
wherever the word "Noteholder" is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such Affiliate in lieu of
such Noteholder. In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to such Noteholder
all of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "Noteholder" is used in this
Agreement (other than in this Section 21), such word shall no longer be deemed
to refer to such Affiliate, but shall refer to such Noteholder, and such
Noteholder shall have all the rights of an original holder of the Notes under
this Agreement.
Section 22. Miscellaneous.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not. The Company may not assign any of its rights hereunder without the written
consent of the holders of the Notes.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
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Stepan Company Amended and Restated Note Agreement
Section 22.5. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by fewer than all, but together signed by all, of the
parties hereto.
Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of Illinois excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
* * * * *
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Stepan Company Amended and Restated Note Agreement
The execution hereof by the Noteholders shall constitute a contract among
the Company and the Noteholders for the uses and purposes hereinabove set forth.
Very truly yours,
Stepan Company
By
---------------------------------------------
Name:
Title:
The foregoing is hereby agreed
to as of the date thereof.
The Northwestern Mutual Life Insurance Company
By
---------------------------------------------
Name:
Its Authorized Representative
Connecticut General Life Insurance Company
By: CIGNA Investments, Inc. (authorized agent)
By
---------------------------------------------
Name:
Title:
-00-
Xxxxxxxxx Xxxxxx of Notes
to be Exchanged
THE NORTHWESTERN MUTUAL LIFE $20,000,000
INSURANCE COMPANY
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Department
Telecopier Number: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Stepan Company, 6.59% Amended and Restated Senior Notes due October 1, 2013,
PPN 858586 F# 2, principal, premium or interest") to:
Bankers Trust Company
ABA #021-001-033
00 Xxxx Xxxxxx
Insurance Xxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
for credit to: The Northwestern Mutual Life Insurance Company
Account Number 00-000-000
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
to be addressed, Attention: Investment Operations, Fax Number: (000) 000-0000.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Schedule A
(to Amended and Restated Note Agreement)
Principal Amount of Notes
to be Purchased
CONNECTICUT GENERAL LIFE INSURANCE COMPANY $10,000,000
c/o CIGNA Retirement & Investment Services
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Private and Alternative Investments, H16B
Fax: 000-000-0000
Payments
All payments on or in respect of the Notes to be by Federal Funds Wire Transfer
to:
X. X. Xxxxxx Xxxxx Bank
BNF=CIGNA Private Placements/AC=9009001802
ABA #000000000
OBI=Stepan Company, 6.59% Senior Notes due October 2013, PPN 858586 X# 0,
and application (as among principal, premium and interest of the payment
being made); contact name and phone.
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing, H05P
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
CIG & Co.
c/o CIGNA Retirement & Investment Services
Attention: Private and Alternative Investments, H16B
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax: 000-000-0000
with a copy to:
X. X. Xxxxxx Xxxxx Bank
Private Placement Servicing
P. O. Box 0000
Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CIGNA Private Placements
Fax: 000-000-0000/1005
A-2
Address for All Other Notices:
CIG & Co.
c/o CIGNA Retirement & Investment Services
Attention: Private and Alternative Investments, H16B
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax: 000-000-0000
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 00-0000000
A-3
DEFINED TERMS
Where the character or amount of any asset or liability or item of income
or expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, the same
shall be done in accordance with GAAP, to the extent applicable, except where
such principles are inconsistent with the express requirements of this
Agreement.
Where any provision in this Agreement refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether the action in question is taken directly or indirectly by
such Person.
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"Assets" of any corporation means, at any date, the gross book value as
shown by the books of such corporation in accordance with GAAP of all its
property, whether real, personal or mixed (exclusive of franchises, licenses,
permits, patents, patent applications, copyrights, trademarks, trade names, good
will, experimental or organizational expense, leasehold improvements not
recoverable at the expiration of a lease, unamortized debt discount and expense,
deferred charges and other intangibles and treasury stock), less the sum
(without duplication) of (a) all reserves for depreciation, depletion,
obsolescence and amortization of its properties (other than properties excluded
as hereinabove provided) as shown by the books of such corporation and all other
proper reserves which in accordance with GAAP should be set aside in connection
with the business conducted by such corporation, other than reserves for
contingencies not allocated to any particular purpose; and (b) the amount of any
write-up subsequent to December 31, 1986 in the book value of any asset owned by
such corporation on such date resulting from the revaluation thereof subsequent
to such date, or any write-up in excess of the cost of any asset acquired by
such corporation subsequent to such date.
"Business Day" means (a) for the purposes of Section 8.7 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any
Schedule B
(to Amended and Restated Note Agreement)
day other than a Saturday, a Sunday or a day on which commercial banks in
Chicago, Illinois, or New York, New York are required or authorized to be
closed.
"Capitalized Lease" means any lease which, in accordance with GAAP, is of
such a nature that payment obligations of the lessee thereunder shall have been
or should be capitalized and shown as liabilities (other than current
Indebtedness) upon the balance sheet of such lessee.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person, prepared in accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means Stepan Company, a Delaware corporation.
"Confidential Information" is defined in Section 20.
"Consolidated," when used in respect of the Assets, Current Indebtedness
and Funded Indebtedness of the Company and its Restricted Subsidiaries means the
aggregate of the assets, Current Assets, Current Indebtedness, Funded
Indebtedness, respectively, of the Company and its Restricted Subsidiaries,
after eliminating all intercompany items and all other items which should be
eliminated in accordance with GAAP; provided, however, in determining
Consolidated Assets, there shall not be included therein any amount on account
of the excess of (i) the cost of acquisition of shares of any Subsidiary over
the book value of the assets of such Subsidiary attributable to such shares on
the books of such Subsidiary at the date of acquisition of such shares, or (ii)
the book value of the assets of such Subsidiary attributable to such shares at
the date of such acquisition over the cost of acquisition of such shares;
provided, further, in determining Consolidated Funded Indebtedness, there shall
not be included therein any duplication of Indebtedness that may arise from the
guaranty by a Restricted Subsidiary of Indebtedness of the Company which
constitutes Specified Subsidiary Indebtedness.
"Consolidated Capitalization" means the sum of (i) Consolidated Funded
Indebtedness of the Company and its Restricted Subsidiaries, plus (ii)
Consolidated Tangible Net Worth.
"Consolidated Earnings Before Interest and Taxes" means, for any fiscal
quarter, the sum of (i) earnings before income taxes for such fiscal quarter,
plus (ii) Consolidated Interest Expense for such fiscal quarter less (iii)
equity earnings of Unrestricted Subsidiaries of the Company for such quarter
determined on a consolidated basis for the Company and the Restricted
Subsidiaries in accordance with GAAP.
"Consolidated Net Income" means the aggregate of the net income of the
Company and its Restricted Subsidiaries, after eliminating all intercompany
items and portions of income properly attributable to minority interest in the
stock of such Subsidiaries, all computed in accordance with GAAP.
B-2
"Consolidated Tangible Net Worth" means the aggregate of the Tangible Net
Worth of the Company and its Restricted Subsidiaries, consolidated in accordance
with GAAP.
"corporation" shall include corporations, joint stock companies and
business trusts.
"Current Indebtedness" means all Indebtedness other than Funded
Indebtedness, and, without limitation, shall include (a) all Indebtedness
maturing on demand or within one year after the date as of which such
determination is made, (b) final maturities and prepayments of Indebtedness and
sinking fund payments (including, with respect to the Notes, not only (i) fixed
prepayments, but also (ii) other prepayments on and after the date of notice of
prepayment thereof pursuant to Sections 8.2 and 8.3) required to be made in
respect of any Indebtedness within one year after said date, and (c) all other
items (including taxes accrued as estimated) which in accordance with GAAP would
be included as current liabilities.
"Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Default Rate" means that rate of interest that is the greater of (i) 2.00%
per annum above the rate of interest stated in clause (a) of the first paragraph
of the Notes or (ii) the rate of interest publicly announced by Bank One, N.A.
in Chicago, Illinois as its "base" or "prime" rate.
"Definitive Agreement" means any binding, definitive written agreement with
respect to any proposed transaction, event or series of transactions or events
which, when fully performed, is reasonably likely to result in a Change of
Control, excluding in all cases, letters of intent, proposals or similar
non-definitive expressions of interest.
"Dilution" means (a) any decrease in the percentage of capital stock and
other equity securities of a Restricted Subsidiary beneficially owned, directly
or indirectly, by the Company and its Wholly-Owned Subsidiaries resulting from a
sale, assignment, transfer or other disposition of capital stock or equity
securities of a Restricted Subsidiary or (b) any increase in the minority
interests in the capital stock and equity securities of a Restricted Subsidiary
as a result of the issuance of capital stock and equity securities by a
Restricted Subsidiary to a Person other than the Company or a Wholly-Owned
Restricted Subsidiary. For purposes of determining compliance with Section 10.8,
the value of any "Dilution" shall be an amount equal to the fair value of that
portion of the assets of the relevant Subsidiary determined by multiplying the
percentage of the capital stock and other equity securities of such Subsidiary
constituting a Dilution by the fair value of all assets of such Subsidiary
(assuming, in making such calculations, that all securities convertible into
capital stock are so converted and giving full effect to all transactions that
would occur or be required in connection with such conversion), determined at
the time of the Dilution in good faith by the Company and subject to the
approval of the Required Holders (which shall not be unreasonably withheld or
delayed).
"Effective Date" is defined in Section 3.1.
"Environmental Laws" means any and all applicable Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions,
B-3
grants, franchises, licenses, agreements or governmental restrictions relating
to public health, safety or the environment, including, without limitation,
relating to releases, discharges, emissions or disposals to air, water, land or
ground water, to the withdrawal or use of ground water, to the use, handling or
disposal of polychlorinated biphenyls (PCB's), asbestos or urea formaldehyde, to
the treatment, storage, disposal or management of hazardous substances
(including, without limitation, petroleum, its derivatives, by-products or other
hydrocarbons), to exposure to toxic, hazardous or other controlled, prohibited
or regulated substances, or to the transportation, storage, disposal, management
or release of gases or liquid substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under Section 414
of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fixed Payment Date" is defined in Section 8.1.
"Funded Indebtedness" means all Indebtedness (including capitalized payment
obligations under Capitalized Leases) which by its terms matures more than one
year from the date as of which any calculation of Funded Indebtedness is made.
Funded Indebtedness shall also include the amount by which vested benefits under
employee pension benefit plans exceeds the value of assets of such plans
allocable to such vested benefit, if any.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
B-4
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable preferred stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement with respect to any
such property);
B-5
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capitalized Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Institutional Investor" means (a) any original purchaser of a Note, (b)
any holder of a Note holding more than 5% of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Interest Expense" means with respect to any period for which the amount
thereof is to be determined, an amount equal to interest expense on
Indebtedness, including payments in the nature of interest under Capitalized
Lease Obligations and the discount or implied interest component of Off-Balance
Sheet Liabilities, as determined in accordance with GAAP. Interest Expense
determined on a consolidated basis for the Company and its Restricted
Subsidiaries will be referred to herein as "Consolidated Interest Expense."
"Investment" shall include any Investment, in cash or by the delivery of
other property (except against receipt of the fair value thereof in cash or in
the ordinary course of business), whether by acquisition of stock, securities or
other Indebtedness, or by loan, advance, capital contribution, transfer of
property or otherwise; provided, however, that (a) the acquisition of stock,
securities or other Indebtedness of, or a loan, advance capital contribution or
transfer of property to, a Restricted Subsidiary (or a corporation which by
reason of such transaction will become a Restricted Subsidiary) by the Company
or one of its Restricted Subsidiaries, or (b) the purchase, acquisition or
ownership by the Company or a Restricted Subsidiary of (i) readily marketable
securities issued by states or municipalities within the United States of
America or agencies or subdivisions thereof rated "A" or better by any
recognized rating agency, (ii) direct obligations of, or obligations
unconditionally guaranteed by, the United States of America or any agency
thereof, (iii) commercial paper maturing within not more than 270 days from the
date of issuance thereof which is issued by any corporation organized and doing
business under the laws
B-6
of the United States of America or any state thereof and which is rated "Prime
1" by Xxxxx'x Investors Service, Inc. or "A-1" by Standard and Poor's
Corporation (or comparably rated by such organizations or any successors thereto
if the rating system is changed or there are such successors), (iv) certificates
of deposit issued by any commercial bank organized and doing business under the
laws of the United States of America or any state thereof and having (x)
capital, surplus and undivided profits aggregating more than $50,000,000, and
(y) outstanding commercial paper which, at the time of acquisition of such
certificates of deposit by the Company or any Restricted Subsidiary is rated
"Prime 1" by Xxxxx'x Investors Service, Inc. or "A-1" by Standard and Poor's
Corporation (or comparably rated by such organizations or any successors thereto
if the rating system is changed or there are any successors), and (v) trade
accounts payable to the Company or a Restricted Subsidiary within six months
from the date such liability arose, shall not be deemed an "Investment." In
addition, Investments of the Company existing on the Effective Date and
described on Schedule 10.5 hereto, shall not be deemed "Investments."
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.7.
"Material" means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement, the Notes or any Subsidiary
Guaranty.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such
term is defined in Section 4001(a)(3) of ERISA).
"Net Income" of any corporation for any fiscal period shall mean the net
income (or the net deficit, if expenses and charges exceed revenues and other
proper income credits) of such corporation for such period, determined in the
following manner:
(a) the gross revenues and other proper income credits of such
corporation shall be computed for such period in accordance with GAAP;
provided that in any event there shall not be included in such gross
revenues and income credits any write up in the book value of any asset
resulting from the revaluation thereof; and
(b) from the amount of such gross revenues and other proper
income credits for such period determined as provided in the preceding
clause (a), there shall be
B-7
deducted an amount equal to the aggregate of all expenses and other proper
income charges for such period, determined in accordance with GAAP but in
any event deducting (without in any respect limiting the generality of the
foregoing) the following items: (i) all interest charges; (ii) amortization
of debt discount and expense and any other amortization of deferred charges
properly subject to amortization; (iii) provision for all taxes whether in
respect of property, income, excess profits or otherwise; (iv) provisions
for all contingency and other reserves whether general or special; and (v)
provision for depreciation, depletion, obsolescence and amortization of the
properties of such corporation (including depreciation and amortization of
leasehold improvements) in amounts not less than the aggregate amount
actually deducted on its books and not less than the aggregate amount
claimed (but adjusted for any disallowance) or to be claimed by such
corporation for federal income tax purposes for such period; provided,
however, that in lieu of accelerated depreciation permitted under the Code,
the corporation may at its option provide for depreciation and amortization
in amounts based on the normal rates customarily employed by the
corporation for identical or similar types of property in the preparation
of its audited financial statements, and in such event the corporation
shall establish and shall maintain in accordance with GAAP an appropriate
reserve in respect of any tax savings as a result of charging for tax
purposes such accelerated depreciation or accelerated amortization;
provided that, in determining the amount to be included in clauses (a) and (b)
above, (i) any federal tax adjustments for any period prior to January 1, 2002
shall not be a proper charge or credit to income for any period subsequent to
that date, and any federal tax adjustment for any period subsequent to December
31, 2001 shall be included as a proper charge or credit to income for the year
in which actually received or paid, except to the extent, if any, to which the
amount of such latter adjustment is charged to a proper reserve for federal
taxes set up out of income for any period subsequent to December 31, 2001; (ii)
any adjustments for any period prior to January 1, 2002 resulting from any
renegotiation or price redetermination in respect of any Government prime
contract, or any subcontract under any Government prime contract, shall not be
included as a proper charge or credit to income for any period subsequent to
that date, and any such renegotiation or price redetermination adjustment for
any period subsequent to December 31, 2001 shall be included as a proper charge
or credit to income for the year in which actually received or paid, except to
the extent, if any, to which the amount of such adjustment is charged to a
proper reserve for renegotiation or price redetermination set up out of income
for any period subsequent to December 31, 2001; (iii) any earnings of, and
dividends payable to, such corporation in currencies which at the time are
blocked against conversion into United States currency shall not be included as
a proper charge or credit to income for any period subsequent to December 31,
2001; (iv) any undistributed earnings of, and dividends payable by,
unconsolidated Subsidiaries or any other person (other than a Restricted
Subsidiary) shall not be included as a proper charge or credit to income for any
period subsequent to December 31, 2001; (v) any gains on the sale or other
disposition of capital assets and taxes on such excluded gains shall not be
included as a proper charge or credit to income for any period subsequent to
December 31, 2001; (vi) net earnings and losses of any corporation (other than a
Subsidiary) substantially all the assets of which have been acquired in any
manner, realized by such other corporation prior to the date of acquisition
shall not be included as a proper charge or credit to income for any period
subsequent to December 31, 2001; (vii) net earnings or losses of any
B-8
corporation (other than a Restricted Subsidiary) with which the Company or a
Restricted Subsidiary shall have consolidated or which shall have merged into or
with the Company or a Restricted Subsidiary prior to the date of such
consolidation or merger shall not be included as a proper charge or credit to
income for any period subsequent to December 31, 2001; and (viii) any portion of
the net earnings of any Restricted Subsidiary which for any reason is
unavailable for the payment of dividends to the Company or any other Restricted
Subsidiary shall not be included as a proper credit to income for any period
subsequent to December 31, 2001. The term "capital assets" of any corporation as
used herein shall include all fixed assets, both tangible (such as land,
buildings, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, trade names, formulae and good will), and securities.
"Notes" is defined in Section 1.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries
(calculated to include the unrecovered investment of purchasers or transferees
of accounts or any other obligation of such Person or such transferor to
purchasers/transferees of interests in accounts or notes receivable or the agent
for such purchasers/transferees), (ii) any liability under any sale and
leaseback transaction which is not a Capitalized Lease, (iii) any liability
under any financing lease or Synthetic Lease or "tax ownership operating lease"
transaction entered into by such Person, including any Synthetic Lease
Obligations, or (iv) any obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person, but excluding from this clause (iv) Operating Leases.
"Officer's Certificate" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Permitted Guaranties" means and includes each unsecured Guaranty by a
Subsidiary of the Company's obligations under (a) the Revolving Credit Agreement
and (b) the Company's then outstanding private placement note purchase
agreements, provided that the Indebtedness of such Subsidiary under each such
Guaranty qualifies as Specified Subsidiary Indebtedness.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
B-9
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"property" or "properties" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, xxxxxx or
inchoate.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
"Required Holders" means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Subsidiary" means any Subsidiary of the Company which (a) is
organized under the laws of any state of the United States of America or under
the laws of Canada or any province thereof, (b) has substantially all of its
assets located within, and operates substantially within, the United States of
America or Canada, (c) at least 50% of the outstanding voting stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by the Company, by
one or more of its Wholly-Owned Restricted Subsidiaries or by the Company and
one or more of its Wholly-Owned Restricted Subsidiaries, and (d) which the
Company designates as a Restricted Subsidiary, by notice to the holders of the
Notes in the manner provided in Section 18; provided, however, that the Company
may not designate any Unrestricted Subsidiary as a Restricted Subsidiary, or any
Restricted Subsidiary as an Unrestricted Subsidiary, unless at the time of such
designation, and after giving effect thereto, no Default or event which the
passage of time or giving of notice, or both, would constitute an Event of
Default would exist; and provided further that the Company may not subsequently
change the designation of any Subsidiary from Restricted Subsidiary to
Unrestricted Subsidiary, or from Unrestricted Subsidiary to Restricted
Subsidiary, unless (w) the Company shall have given not less than 10 days' prior
notice to the holders of the Notes that a Responsible Officer has made such a
determination, (x) at the time of such designation and, on a pro forma basis,
treating such designation as having occurred on the last day of the immediately
preceding fiscal quarter, no Default or event which the passage of time or
giving of notice, or both, would constitute an Event of Default would exist, (y)
any designation of a Restricted Subsidiary to an Unrestricted Subsidiary is
treated as a sale of assets subject to the provisions of Section 10.8 and
immediately after such designation and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing under Section 10.8 and
(z)(i) a Subsidiary initially designated a Restricted Subsidiary shall not
subsequently be designated an Unrestricted Subsidiary more than once or
subsequently be designated a Restricted Subsidiary more than once
B-10
and (ii) a Subsidiary initially designated an Unrestricted Subsidiary shall not
subsequently be designated a Restricted Subsidiary more than once or
subsequently be designated an Unrestricted Subsidiary more than once. For all
purposes of this Agreement, the Company shall, on Schedule 5.4, designate each
Subsidiary which exists as of the Effective Date as an Unrestricted Subsidiary.
"Revolving Credit Agreement" means that certain Revolving Credit Agreement
dated as of May 3, 2002 among the Company, Bank One, N.A., as Agent and the
other financial institutions named therein, such term to include any credit
facility or other instrument evidencing borrowed money replacing all or part of
such Revolving Credit Agreement.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Specified Subsidiary Indebtedness" means Indebtedness of Subsidiaries
consisting of unsecured Guaranties of the Company's obligations under and
pursuant to (a) the Revolving Credit Agreement and (b) each of the Company's
then outstanding private placement note purchase agreements and notes, provided
that, within the time period required by Section 9.8 of this Agreement, the
Company shall have executed and delivered, or shall have caused to be executed
and delivered, to the holders of the Notes (i) an executed counterpart of a
Subsidiary Guaranty or joinder agreement in respect of an existing Subsidiary
Guaranty, from each of the Subsidiaries guaranteeing the Company's obligations
under such Revolving Credit Agreement, and (ii) an executed counterpart of an
intercreditor agreement among the holders of the Notes, each Person which is a
party to the Revolving Credit Agreement as a lender or creditor (or an
authorized agent on their behalf), each holder of the Company's other private
placement notes then outstanding, the Company and each such guaranteeing
Subsidiary, all as and to the extent required by Section 9.8 of this Agreement.
"Subsidiary" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Guarantors" is defined in Section 9.8.
"Subsidiary Guaranty" means any Guaranty of any Subsidiary with respect to
the payment of the Notes and all other sums due and owing by the Company under
this Agreement, which Guaranty shall be in form and substance reasonably
satisfactory to the Required Holders.
B-11
"Substantially-Owned Restricted Subsidiary" means any Restricted Subsidiary
90% or more of the equity interests (other than directors' qualifying shares)
and voting interests at the time are owned directly or indirectly by the
Company, or by one or more of its Substantially-Owned Restricted Subsidiaries or
by the Company and one or more of its Substantially-Owned Restricted
Subsidiaries.
"substantial part" is defined in Section 10.8.
"Swaps" means, with respect to any Person, payment obligations with respect
to interest rate swaps, currency swaps and similar obligations obligating such
Person to make payments, whether periodically or upon the happening of a
contingency. For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof as of the end
of the then most recently ended fiscal quarter of such Person, based on the
assumption that such Swap had terminated at the end of such fiscal quarter, and
in making such determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person thereunder or if any
such agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the net
amount so determined.
"Synthetic Lease" means each so-called synthetic, off-balance sheet or tax
retention lease or other arrangement, however described, under which (a) the
obligor accounts for its interest in the property covered thereby under GAAP as
lessee of a lease which is not a capital lease and accounts for its interest in
the property covered thereby for Federal income tax purposes as the owner or (b)
the obligations of the obligor do not appear on the balance sheet of such
obligor but which, upon the insolvency or bankruptcy of such obligor, would be
characterized as the indebtedness of such obligor (without regard to accounting
treatment).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under a Synthetic Lease.
"Tangible Net Worth" of any corporation shall mean the sum of the amounts
set forth on the balance sheet of such corporation, prepared in accordance with
GAAP and as of any date selected by such corporation not more than 45 days prior
to the taking of any action for the purpose of which the determination is being
made, which appears as (a) the par or stated value of all outstanding stock, (b)
capital, paid-in and earned surplus and (c) long term deferred tax liabilities,
less the sum of (i) any surplus resulting from any write-up of assets, (ii) good
will, including any amounts (however designated on such balance sheet)
representing the cost of acquisitions of Restricted Subsidiaries in excess of
underlying tangible assets, unless an appraisal of such assets made by a
reputable firm of appraisers at the time of acquisition shall indicate
sufficient value to cover such excess, (iii) any amounts by which Investments in
persons appearing on the asset side of such balance sheet exceed the lesser of
cost or the proportionate share of such corporation in the book value of the
assets of such persons, provided that such book value shall be reduced by any
amounts representing restrictions on the payment of dividends by such persons
pursuant to any law, charter provision, mortgage or indenture or, in lieu of the
foregoing, any Investment may be carried at its market value if the securities
representing such Investment are publicly traded, (iv) patents, trademarks,
copyrights, leasehold improvements not
B-12
recoverable at the expiration of a lease and deferred charges (including, but
not limited to, unamortized debt discount and expense, organization expenses,
experimental and development expenses, but excluding prepaid expenses), (v) any
amounts at which shares of capital stock of such corporation appear on the asset
side of such balance sheet, (vi) any amount of Indebtedness not included on the
liability side of such balance sheet and (vii) other comprehensive income or
expense (as defined by GAAP), to the extent included in subclause (a), (b) or
(c) above.
"10-K" is defined in Section 5.3.
"10-Qs" is defined in Section 5.3.
"Unrestricted Subsidiary" means any Subsidiary other than a Subsidiary
which has been designated a Restricted Subsidiary. Any Subsidiary which is not
expressly designated a Restricted Subsidiary or an Unrestricted Subsidiary shall
be deemed designated an Unrestricted Subsidiary.
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary all of
the equity interests (other than directors' qualifying shares) and voting
interests at the time is owned directly or indirectly by the Company, or by one
or more of its Wholly-Owned Restricted Subsidiaries or by the Company and one or
more of its Wholly-Owned Restricted Subsidiaries.
B-13
SCHEDULE 4.9
CHANGES IN CORPORATE STRUCTURE
None.
Schedule 4.9
(to Amended and Restated Note Agreement)
SCHEDULE 5.4
SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK
Subsidiaries of the Company
Percentage of
Jurisdiction Shares Held or Restricted
of Incorporation Beneficially Subsidiary
Corporate Name or Formation Owned (Y/N)
----------------------------------------------------------------------------------------------------
Stepan Europe S.A. France 100% N
Stepan Canada, Inc. Canada 100% N
Stepan Mexico, S.A. de C.V. Mexico 100% N
Stepan Quimica Ltda. Brazil 100% N
Stepan Colombiana de Quimicos Colombia 100% N
Stepan UK Limited England and Wales 100% (by Stepan N
Europe S.A.)
Stepan Deutschland GmbH Germany 100% (by Stepan N
Europe S.A.)
Affiliates of the Company
Percentage of
Jurisdiction Shares Held or Restricted
of Incorporation Beneficially Subsidiary
Corporate Name or Formation Owned (Y/N)
----------------------------------------------------------------------------------------------------
Stepan Philippines S.A. (Joint Philippines 50% N
Venture)
Directors and Senior Officers of the Company
Name Title/office
-------------------------------------------------------------------------------------------
F. Xxxxx Xxxxxx Chairman and Chief Executive Officer
F. Xxxxx Xxxxxx, Jr. President and Chief Operating Officer and Director
Xxxx X. Xxxxxxxx Vice President and General Manager - Surfactants
Schedule 5.4
(to Amended and Restated Note Agreement)
Directors and Senior Officers of the Company (cont'd)
Xxxxxx X. Xxxx Vice President and General Manager - Polymers
F. Xxxxxx Xxxxxx III Vice President, General Counsel and Secretary
Xxxxxxx X. Xxxxxx Vice President - Manufacturing and Engineering
Xxxxx X. Xxxxxxxx Vice President and Corporate Controller
Xxxxxxxx X. Xxxxx Senior Attorney and Assistant Corporate Secretary
Xxxxx X. Xxxxxxxx Director
Xxxxxx X. Xxxxxxx Director
Xxxx X. Xxxxxx Director
Xxxxxx X. Xxxxxxx Director
Xxxxxx X. Xxxxxx Director
Liens On Capital Stock of Subsidiaries of the Company
As guarantee of payment and reimbursement of all sums due in respect to Stepan
Europe S.A. term loan, the stock of Stepan UK and Stepan Deutschland were
pledged as security to Credit Lyonnais and Xxxxxxxxx xx Xxxxxx, xxxx xx Xxxx,
Xxxxxx.
In addition, Stepan Europe S.A. also assigned a EUR 3 million mortgage on the
land and fixed assets located at Voreppe (Isere, France).
Agreements Containing Restrictions On Ability of Subsidiaries
to Pay Dividends
Stepan Europe S.A. term loan prohibits dividend payments.
Agreements With Requirements Affecting Parent Company
Stepan Europe S.A. bank term loan requires inter-company loans from Stepan
Company, as of any year-end, to be equal in amount to the balance then
outstanding on the bank term loan.
Schedule 5.4 (cont'd)
(to Amended and Restated Note Agreement)
SCHEDULE 5.5
FINANCIAL STATEMENTS
December 31, 2000 Form 10-K and Financial Statements (audited):
Consolidated Balance Sheets as of December 31, 2000 and 1999
Consolidated Statements of Income - December 31, 2000, 1999 and 1998
Consolidated Statements of Cash Flows - December 31, 2000, 1999 and 1998
December 31, 2001 Form 10-K and Financial Statements (audited):
Consolidated Balance Sheets as of December 31, 2001 and 2000
Consolidated Statements of Income - December 31, 2001, 2000 and 1999
Consolidated Statements of Cash Flows - December 31, 2001, 2000 and 1999
Interim (unaudited) quarterly Financial Statements - 2002
March 31, 2002 Form 10-Q
June 30, 2002 Form 10-Q
Schedule 5.5
(to Amended and Restated Note Agreement)
SCHEDULE 5.8
CERTAIN LITIGATION
None.
Schedule 5.8
(To Amended and Restated Note Agreement
SCHEDULE 5.10
PRECAUTIONARY UCC FILINGS
SECURED PARTY DEBTOR FILING DATE/FILE # FILING OFFICE DOCUMENT TYPE -- PROPERTY COVERED
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx/XxXxxxxx Associates, Stepan Company 2/25/93, 3089608 Illinois SOS UCC-1: Leased computer, data processing,
Inc., Lessor telecommunications and other equipment
including attachments, accessories,
replacements, products and proceeds
relating thereto
Xxxxxxxx/XxXxxxxx Associates, Stepan Company 8/28/97, 3733310 Illinois SOS UCC-3: Continues 3089608
Inc.
Pitney Xxxxx Credit Corporation Stepan Company 10/27/97, 3755618 Illinois SOS UCC-1: All equipment of whatever nature
manufactured, sold or distributed by Pitney
Xxxxx Credit Inc., Monarch Marketing
Systems Inc., Pitney Xxxxx Credit Corp.,
Dictaphone Corp. and subject to lease
between debtor and secured party, including
proceeds, additions and replacements
relating thereto
Minolta Business Systems, Inc. Stepan Company 11/21/97, 3766297 Illinois SOS UCC-1: Leased Minolta Copier and
Controller
Minolta Business Systems, Inc. Stepan Company 2/1/99, 3981526 Illinois SOS UCC-1: Leased Minolta Controller
IBM Credit Corporation, Xxxxxx Xxxxxx Company 3/22/00, 4184547 Illinois SOS UCC-1: Leased computer information
processing and other peripheral equipment
and goods wherever located, including
additions, accessions, upgrades and
replacements
Amcore Consumer Finance, Inc., Stepan Company 12/12/97, 1806897 New Jersey SOS UCC-1: 4 leased Stainless Steel 350 Gal
Tanks, Assignee includes proceeds
Schedule 5.10
(to Amended and Restated Note Agreement)
SCHEDULE 5.11
PATENTS, ETC.
None.
Schedule 5.11
(to Amended and Restated Note Agreement)
SCHEDULE 5.14
USE OF PROCEEDS
Loan proceeds will be used to repay existing debt as well as for capital
expenditures, working capital, acquisitions, dividends and other corporate
purposes.
Schedule 5.14
(to Amended and Restated Note Agreement)
SCHEDULE 5.15
EXISTING INDEBTEDNESS
Indebtedness of the Company and Its Subsidiaries Outstanding On
September 30, 2002, Excluding Intercompany Loans.
Description of
Indebtedness Outstanding
(Including Collateral Principal Amount
Obligor Creditor Interest Rate) (If Any) Maturity ($000'S)
----------------------------------------------------------------------------------------------------------------
Stepan Company The Northwestern 9.70% Notes None Original Stated: $ 667
Mutual Life 2006
Insurance Company Current:
2003
Stepan Company The Northwestern 7.22% Notes None Original Stated: $ 5,000
Mutual Life 2008
Insurance Company Current:
2007
Stepan Company The Northwestern 7.69% Notes None 2005 $ 2,250
Mutual Life
Insurance Company
Stepan Company The Northwestern 7.77% Notes None 2010 $ 8,182
Mutual Life
Insurance Company
Stepan Company The Northwestern 6.59% Notes None 2013 $ 20,000
Mutual Life
Insurance Company
Stepan Company The Northwestern 6.86% Notes None 2015 $ 20,000
Mutual Life
Insurance Company
Schedule 5.15
(to Amended and Restated Note Purchase Agreement)
Stepan Company The Northwestern 6.86% Notes None 2015 $ 1,000
Mutual Life
Insurance
Company for its
Group Annuity
Separate Account
Stepan Company Aid Association 7.22% Notes None Original Stated: $ 5,000
for Lutherans 2008
Current:
2007
Stepan Company Aid Association 7.69% Notes None 2005 $ 2,250
for Lutherans
Stepan Company Aid Association 7.77% Notes None 2010 $ 8,182
for Lutherans
Stepan Company Thrivent 6.86% Notes None 2015 $ 3,000
Financial for
Lutherans
Stepan Company The Mutual Life 7.22% Notes None Original Stated: $ 5,000
Insurance 2008
Company of New Current:
York 2007
Stepan Company The Mutual Life 7.69% Notes None 2005 $ 1,500
Insurance
Company of New
York
Stepan Company The Mutual Life 7.77% Notes None 2010 $ 5,454
Insurance
Company of New
York
Stepan Company MONY Life 6.86% Notes None 2015 $ 3,000
Insurance Company
Stepan Company Connecticut 6.59% Notes None 2013 $ 10,000
General Life
Insurance Company
Schedule 5.15 (cont'd)
(to Amended and Restated Note Agreement)
Stepan Company Connecticut 6.86% Notes None 2015 $ 3,000
General Life
Insurance Company
Stepan Europe S.A. Credit Lyonnais Term Loan Shares of Stepan 2008 EUR 12,904
(50%) UK and Stepan
Deutschland, EUR
Lyonnaise de 3MM mortgage on
Banque (50%) the land & fixed
assets located at
Voreppe (Isere,
France).
Stepan Europe S.A. Water Agency Government None 2007 EUR 103
Subsidy
Stepan Deutschland SEB AG 5.50% term None 2006 EUR 1,125
GmbH loan
Agreements Providing for Future Liens On Properties of the Company
and Its Subsidiaries:
None.
Schedule 5.15 (cont'd)
(to Amended and Restated Note Agreement)
SCHEDULE 5.18
ENVIRONMENTAL MATTERS
The company's site in Maywood, New Jersey and property formerly owned by the
company adjacent to its current site, were listed on the National Priorities
List in September 1993 pursuant to the provisions of the Comprehensive
Environmental Response Compensation and Liabilities Act (CERCLA) because of
certain alleged chemical contamination. Pursuant to an Administrative Order on
Consent entered into between the United States Environmental Protection Agency
(USEPA) and the company for property formerly owned by the company, and the
issuance of an order by USEPA to the company for property currently owned by the
company, the company completed a Remedial Investigation Feasibility Study
(RI/FS) in 1994. The company has also submitted additional information regarding
the remediation, most recently in February 2002. Discussions between USEPA and
the company are continuing. The company is awaiting the issuance of a Record of
Decision (ROD) from USEPA relating to the currently owned and formerly owned
company property and the proposed remediation. The final ROD will be issued
sometime after the public comment period.
In 1985, the company entered into a Cooperative Agreement with the United States
of America represented by the Department of Energy (Agreement). Pursuant to this
Agreement, the Department of Energy (DOE) took title to radiological
contaminated materials and was to remediate, at its expense, all radiological
waste on the company's property in Maywood, New Jersey. The Maywood property
(and portions of the surrounding area) were remediated by the DOE under the
Formerly Utilized Sites Remedial Action Program, a federal program under which
the U.S. Government undertook to remediate properties which were used to process
radiological material for the U.S. Government. In 1997, responsibility for this
clean-up was transferred to the United States Army Corps of Engineers (USACE).
On January 29, 1999, the company received a copy of a USACE Report to Congress
dated January 1998 in which the USACE expressed their intention to evaluate,
with the USEPA, whether the company and/or other parties might be responsible
for cost recovery or contribution claims related to the Maywood site. Subsequent
to the issuance of that report, the USACE advised the company that it had
requested legal advice from the Department of Justice as to the impact of the
Agreement.
By letter dated July 28, 2000, the Department of Justice advised the company
that the USACE and USEPA had referred to the Justice Department claims against
the company for response costs incurred or to be incurred by the USACE, USEPA
and the DOE in connection with the Maywood site and the Justice Department
stated that the United States is entitled to recovery of its response costs from
the company under CERCLA. The letter referred to both radiological and
non-radiological hazardous waste at the Maywood site and stated that the United
States has incurred unreimbursed response costs to date of $138 million. Costs
associated with radiological waste at the Maywood site, which the company
believes represent all but a small portion of the amount referred to in the
Justice Department letter, could be expected to aggregate substantially in
excess of that amount. In the letter, the Justice Department invited the company
to discuss settlement of the matter in order to avoid the need for litigation.
The company believes that its liability, if any, for such costs has been
resolved by the aforesaid Agreement. Despite the fact that the company continues
to believe that it has no liability to the United States for such costs,
discussions with the Justice Department are currently ongoing to attempt to
resolve this matter.
Schedule 5.18
(to Amended and Restated Note Agreement)
The company believes it has adequate reserves for claims associated with the
Maywood site. However, depending on the results of the ongoing discussions
regarding the Maywood site, the final cost of the remediation could differ from
the current estimates.
As reported previously, the company has been named as a potentially responsible
party (PRP) in the case USEPA v. Xxxxxx Xxxxxxxx (92 CV 4710 D. N. J.) which
involves the Ewan and D'Imperio Superfund Sites located in New Jersey. Trial on
the issue of the company's liability at these sites was completed in March 2000.
The company is awaiting a decision from the court. If the company is found
liable at either site, a second trial as to the company's allocated share of
clean-up costs at these sites will likely be held in 2003. The company believes
it has adequate defenses to the issue of liability. In the event of an
unfavorable outcome related to the issue of liability, the company believes it
has adequate reserves. On a related matter, the company has filed an appeal to
the United States Third Circuit Court of Appeals objecting to the lodging of a
partial consent decree in favor of the United States Government in this action.
Under the partial consent decree, the government recovered past costs at the
site from all PRPs including the company. The company paid its assessed share
but by objecting to the partial consent decree, the company is seeking to
recover back the sums it paid.
Regarding the D'Imperio Superfund Site, USEPA has indicated it will seek penalty
claims against the company based on the company's alleged noncompliance with the
modified Unilateral Administrative Order. The company is currently negotiating
with USEPA to settle its proposed penalty against the company but does not
believe that a settlement, if any, will have a material impact on the financial
condition of the company. In addition, the company also received notice from the
New Jersey Department of Environmental Protection (NJDEP) dated March 21, 2001,
that NJDEP has indicated it will pursue cost recovery against the alleged
responsible parties, including the company. The NJDEP's claims include costs
related to remediation of the D'Imperio Superfund Site in the amount of
$434,405.53 and alleged natural resource damages in the amount of $529,584.00
(as of November 3, 2000). The NJDEP settled such claims against the alleged
responsible parties, resulting in the company paying its portion of $83,061.00
in July 2002. This payment is subject to reallocation after the allocation phase
of the above-identified trial, if any. The payment did not have a material
impact on the financial condition of the company.
As reported previously, the company received a Section 104(e) Request for
Information from USEPA dated March 21, 2000, regarding the Lightman Drum Company
Site located in Xxxxxxx Township, New Jersey. The company responded to this
request on May 18, 2000. In addition, the company received a Notice of Potential
Liability and Request to Perform RI/FS dated June 30, 2000, from USEPA. The
company has decided that it will participate in the performance of the RI/FS.
However, based on the current information known regarding this site, the company
is unable to predict what its liability, if any, will be for this site.
Schedule 5.18 (cont'd)
(to Amended and Restated Note Agreement)
SCHEDULE 10.5
EXISTING INVESTMENTS AS OF DECEMBER 31, 2001
Amount of Investment*
Investment In ($000's)
--------------------------------------------------------------
Stepan Europe S.A. $ 26,762
Stepan Philippines S.A. $ 8,814
Stepan Mexico S.A. de C.V. $ 5,754
Stepan Colombiana de Quimicos $ 4,311
Stepan Canada, Inc. $ 880
Stepan Quimica Ltda. $ 221
* Investments are shown at cost at the time of investment, without allowance for
any subsequent write-offs, appreciation or depreciation, less any amounts repaid
or recovered on account of capital or principal.
Schedule 10.5
(to Amended and Restated Note Agreement)
[FORM OF AMENDED AND RESTATED NOTE]
STEPAN COMPANY
6.59% Amended and Restated Senior Note, due October 1, 2013
No. _________ [Date]
$____________ PPN 858586 F#2
For Value Received, the undersigned, Stepan Company (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to ________________, or registered assigns, the
principal sum of ________________ Dollars on October 1, 2013, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 6.59% per annum from the date hereof,
payable semiannually, on the first day of each April and October in each year,
commencing with the April 1 or October 1 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Amended and Restated Note Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 8.59% or (ii) the rate of interest publicly
announced by Bank One, N.A. from time to time in Chicago, Illinois as its "base"
or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the Company's office in Northfield, Illinois or at such other place
as the Company shall have designated by written notice to the holder of this
Note as provided in the Amended and Restated Note Agreement referred to below.
This Note is one of the Senior Notes (herein called the "Notes") issued
pursuant to the Amended and Restated Note Agreement, dated as of December 1,
2002 (as from time to time amended, the "Amended and Restated Note Agreement"),
among the Company and the respective Noteholders named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Amended and Restated Note Agreement and (ii) to have
made the representation set forth in Section 6.2 of the Amended and Restated
Note Agreement, provided that such holder may (in reliance upon information
provided by the Company, which shall not be unreasonably withheld) make a
representation to the effect that the purchase by such holder of any Note will
not constitute a non-exempt prohibited transaction under Section 406(a) of
ERISA.
This Note is a registered Note and, as provided in the Amended and Restated
Note Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be
Exihibit 1
(to Amended and Restated Note Agreement)
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
The Company will make required prepayments of principal on the dates and in
the amounts specified in the Amended and Restated Note Agreement. This Note is
also subject to optional prepayment, in whole or from time to time in part, at
the times and on the terms specified in the Amended and Restated Note Agreement,
but not otherwise.
If an Event of Default, as defined in the Amended and Restated Note
Agreement, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Amended and
Restated Note Agreement.
This Agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
Stepan Company
By
----------------------------------------------
Name:
Title:
E-1-2
DESCRIPTION OF OPINION OF COUNSEL
TO THE COMPANY
The legal opinion of F. Xxxxxx Xxxxxx III, General Counsel of the Company,
which is called for by Section 4.4(a) of the Amended and Restated Note
Agreement, shall be dated the Effective Date and addressed to the Noteholders,
shall be satisfactory in scope and form to the Noteholders and shall be to the
effect that:
1. The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, has
the corporate power and the corporate authority to execute and perform the
Amended and Restated Note Agreement and to issue the Notes and has the full
corporate power and the corporate authority to conduct the activities in
which it is now engaged and is duly licensed or qualified and is in good
standing as a foreign corporation in each jurisdiction in which the
character of the properties owned or leased by it or the nature of the
business transacted by it makes such licensing or qualification necessary.
2. The Amended and Restated Note Agreement has been duly
authorized by all necessary corporate action on the part of the Company,
has been duly executed and delivered by the Company and constitutes the
legal, valid and binding contract of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent conveyance
and similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
4. No order, permission, consent or approval of any federal or
state commission, board or regulatory body is required as a condition to
the lawful execution and delivery of the Amended and Restated Note
Agreement or the Notes.
5. The issuance of the Notes and the execution, delivery and
performance by the Company of the Amended and Restated Note Agreement do
not conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of any
Lien upon any of the property of the Company pursuant to the provisions of
the Certificate of Incorporation or By-laws of the Company, any law or any
agreement or other instrument known to such counsel to which the Company is
a party or by which the Company may be bound.
Exhibit - 4.4(a)
6. The issuance and delivery of the Notes under the circumstances
contemplated by the Amended and Restated Note Agreement do not, under
existing law, require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
7. Except as set forth in the 10-K or in Schedule 5.8, there are
no actions, suits or proceedings pending or, to the best knowledge and
belief of such counsel, threatened against or affecting the Company, at law
or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, an adverse determination with respect
to which may result in any material adverse change in the business,
properties, assets or condition, financial or otherwise, of the Company.
The opinion of F. Xxxxxx Xxxxxx III shall cover such other matters relating
to the amendment and restatement of the Existing Agreements and the exchange of
the Existing Notes as the Noteholders may reasonably request. With respect to
matters of fact on which such opinion is based, such counsel shall be entitled
to rely on appropriate certificates of public officials and officers of the
Company.
E-4.4(a)-2
DESCRIPTION OF OPINION OF SPECIAL COUNSEL
TO THE NOTEHOLDERS
The legal opinion of Xxxxxxx and Xxxxxx, special counsel to the
Noteholders, called for by Section 4.4(b) of the Amended and Restated Note
Agreement, shall be dated the Effective Date and addressed to the Noteholders,
shall be satisfactory in form and substance to the Noteholders and shall be to
the effect that:
1. The Company is a corporation, validly existing and in good
standing under the laws of the State of Delaware and has the corporate
power and the corporate authority to execute and deliver the Amended and
Restated Note Agreement and to issue the Notes.
2. The Amended and Restated Note Agreement has been duly
authorized by all necessary corporate action on the part of the Company,
has been duly executed and delivered by the Company and constitutes the
legal, valid and binding contract of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent conveyance
and similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, and the Notes being delivered on the
date hereof have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
4. The issuance and delivery of the Notes under the circumstances
contemplated by the Amended and Restated Note Agreement do not, under
existing law, require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
The opinion of Xxxxxxx and Xxxxxx shall also state that the opinions of F.
Xxxxxx Xxxxxx III is satisfactory in scope and form to Xxxxxxx and Xxxxxx and
that, in their opinion, the Noteholders are justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxx and Xxxxxx
may rely solely upon an examination of the Certificate of Incorporation
certified by, and a certificate of good standing of the Company from, the
Secretary of State of the State of Delaware, the By-laws of the Company and the
General Corporation Law of the State of Delaware. The opinion of Xxxxxxx and
Xxxxxx is limited to the laws of the State of Illinois, the General Corporation
Law of the State of Delaware and the Federal laws of the United States.
With respect to matters of fact upon which such opinion is based, Xxxxxxx
and Xxxxxx may rely on appropriate certificates of public officials and officers
of the Company and upon
Exhibit 4.4(b)
representations of the Company and the Noteholders delivered in connection with
the issuance of the Notes.
E-4.4(b)-2
