Exhibit 10.31

 

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STEPAN COMPANY

 

 

 

 

 

SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT

Dated as of April 23, 2014

to:

NOTE PURCHASE AGREEMENT

dated as of September 29, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT

 

THIS SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT, dated as of April 23, 2014
(this “Second Amendment”), is among STEPAN COMPANY, a Delaware corporation (the
“Company”), and each of the institutions which is a signatory to this Second
Amendment (collectively, the “Noteholders”).

 

RECITALS:

 

A.The Company and each of the purchasers named therein have heretofore entered
into (i) a Note Purchase Agreement dated as of September 29, 2005, as amended by
that certain First Amendment, dated as of October 25, 2011 (as so amended, the
“2005 Note Purchase Agreement”), pursuant to which the Company issued its
$40,000,000 5.69% Series 2005-A Senior Notes, due November 1, 2018 (the “2005
Notes”), (ii) a First Supplement to Note Purchase Agreement dated as of June 1,
2010 (the “2010 Supplement”), pursuant to which the Company issued its
$40,000,000 5.88% Series 2010-A Senior Notes, due June 1, 2022 (the “2010
Notes”) and (iii) a Second Supplement to Note Purchase Agreement dated as of
November 1, 2011 (the “2011 Supplement” and, together with the 2005 Note
Purchase Agreement and 2010 Supplement, the “Note Purchase Agreement”), pursuant
to which the Company issued its $65,000,000 4.86% Series 2011-A Senior Notes,
due November 1, 2023 (the “2011 Notes” and, together with the 2005 Notes and
2010 Notes, the “Notes”).

 

B.The Company and the Noteholders now desire to amend the Note Purchase
Agreement in the respects, but only in the respects, hereinafter set forth.

 

C.Capitalized terms used herein shall have the meanings ascribed thereto in the
Note Purchase Agreement unless herein defined or the context shall otherwise
require.

 

D.All requirements of law have been fully complied with and all other acts and
things necessary to make this Second Amendment a valid, legal and binding
instrument according to its terms for the purposes herein expressed have been
done or performed.

 

NOW, THEREFORE, upon the full and complete satisfaction of the conditions
precedent to the effectiveness of this Second Amendment set forth in Section 3.1
hereof, and in consideration of good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Company and the Noteholders do
hereby agree as follows:

 

SECTION 1.SECOND AMENDMENT.

 

Section 1.1.The last paragraph of Section 10.6 of the Note Purchase Agreement is
hereby amended by (i) deleting the word “and” at the end of clause (ii), (ii)
deleting the period at the end of such paragraph and replacing it with “, and”
and (iii) adding a new clause (iv) at the end thereof to read as follows:

 

(iv) the sale by the Company or any Restricted Subsidiary of accounts receivable
owing to it by account debtors which customarily pay on terms longer than
general market practices (“Permitted Supplier Financings”) pursuant to a
receivables purchase agreement or other customary documentation (any such
agreement a “Receivables Purchase Agreement”) with JPMorgan Chase Bank, National
Association or another institution (any such institution a “Receivables Facility
Counterparty”) whereby the Company or such Restricted Subsidiary promptly
receive cash proceeds from such

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Receivables Facility Counterparty equal to the face value of such receivables
net of a commercially reasonable and customary discount rate; provided further
that (i) any such sale is a true sale with recourse to the Company or such
Restricted Subsidiary limited to breach of representation, warranty or covenant
by the Company or such Restricted Subsidiary with respect to the sold
receivables; (ii) such Receivables Purchase Agreement is on customary terms for
such arrangement; and (iii) no Default or Event of Default exists or would
result from the sale of such receivables.

 

Section 1.2.Section 10 of the Note Purchase Agreement is hereby amended by
adding a new Section 10.11 thereto to read as follows:

 

Section 10.11. Lien Restrictions. Notwithstanding anything to the contrary
contained in Section 10.5, no Liens permitted pursuant to the terms of Section
10.5 may secure any obligations under the Bank Credit Agreement or any private
placement document pursuant to which the Company has issued senior notes, either
now existing or existing in the future (each such Bank Credit Agreement or
private placement document, a “Senior Debt Facility”), unless the Company makes,
or causes to be made, effective a provision whereby the Notes will be equally
and ratably secured with any and all other obligations thereby secured, such
security to be pursuant to an agreement reasonably satisfactory to the Required
Holders.

 

Section 1.3.Section 10 of the Note Purchase Agreement is hereby amended by
adding a new Section 10.12 thereto to read as follows:

 

Section 10.12. Most Favored Lender Status. If at any time (including, for the
avoidance of doubt, on the date of the Second Amendment) any Senior Debt
Facility contains any covenant (whether set forth as a covenant, undertaking,
event of default, restriction or other such provision (or any thereof shall be
amended or otherwise modified)) similar in nature to the provisions set out in
Section 10.6 of this Agreement with respect to Permitted Supplier Financings and
such covenant (howsoever expressed) is more restrictive on the Company or would
be more beneficial to the holders of Notes than the provisions of Section 10.6
of this Agreement (any such covenant, a “More Favorable Covenant”), then (i)
such More Favorable Covenant shall be deemed automatically incorporated by
reference into this Agreement, mutatis mutandis, as if set forth in full herein,
effective as of the date when such More Favorable Covenant shall have become
effective under such Senior Debt Facility, and (ii) the Company shall provide a
More Favored Lender Notice in respect of such More Favorable Covenant.

 

Any More Favorable Covenant incorporated into this Agreement (herein referred to
as an “Incorporated Covenant”) pursuant to this Section 10.12, (a) shall
thereafter be waived, amended or otherwise modified under this Agreement at such
time as the applicable Senior Debt Facility shall be so waived, amended or
otherwise modified, provided that (A) if a Default or Event of Default then
exists (including in respect of such Incorporated Covenant), such Incorporated
Covenant shall only be deemed to be so waived, amended or otherwise modified
hereunder at such time, if it should occur, when such Default or Event of
Default no longer exists and (B) if any fee or other cash consideration is given
to the lenders under the applicable Senior Debt Facility for the waiver,
amendment or other modification of such More Favorable Covenant, the equivalent
of such fee or other cash consideration shall also be given pro rata to the
holders of the Notes at substantially the same time, and (b) shall be deemed
automatically deleted from this Agreement at such time as such applicable Senior
Debt Facility shall be

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terminated and no amounts shall be outstanding thereunder provided that, if a
Default or Event of Default then exists (including in respect of such
Incorporated Covenant), such Incorporated Covenant shall only be deemed
automatically deleted from this Agreement at such time, if it should occur, when
such Default or Event of Default no longer exists.

 

“Most Favored Lender Notice” means, in respect of any More Favorable Covenant, a
written notice to each of the holders of the Notes delivered promptly, and in
any event within five Business Days after the inclusion of such More Favorable
Covenant in any Senior Debt Facility (including by way of amendment or other
modification of any existing provision thereof), by a Senior Financial Officer
referring to the provisions of this Section 10.12 and setting forth a reasonably
detailed description of such More Favorable Covenant (including any defined
terms used therein).

 

Section 1.4.The provisions of Paragraph 6 in each of the First Supplement and
the Second Supplement are hereby deleted in their entirety and replaced by
“Reserved.”.

 

Section 1.5.Schedule B of the Note Purchase Agreement is hereby amended by
adding the following new defined term in the appropriate alphabetical order
therein:

 

“Second Amendment” means the Second Amendment to Note Purchase Agreement dated
as of April [___], 2014, among the Company and each of the institutions which is
a signatory thereto.

 

SECTION 2.REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.

 

Section 2.1.To induce the Noteholders to execute and deliver this Second
Amendment, the Company represents and warrants to the Noteholders (which
representations and warranties shall survive the execution and delivery of this
Second Amendment) that:

 

(a)

this Second Amendment has been duly authorized, executed and delivered by it and
this Second Amendment, and the Note Purchase Agreement as amended by this Second
Amendment, constitutes the legal, valid and binding obligations, contracts and
agreements of the Company enforceable against it in accordance with their
respective terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors’ rights generally;

 

(b)

the execution, delivery and performance by the Company of this Second Amendment
(i) has been duly authorized by all requisite corporate action and, if required,
shareholder action, (ii) does not require the consent or approval of any
governmental or regulatory body or agency, and (iii) will not (A) violate (1)
any provision of law, statute, rule or regulation or its certificate of
incorporation or bylaws, (2) any order of any court or any rule, regulation or
order of any other agency or government binding upon it, or (3) any provision of
any material indenture, agreement or other instrument to which it is a party or
by which its properties or assets are or may be bound, or (B) result in a breach
or constitute (alone or with due notice or lapse of time or both) a default
under any indenture, agreement or other instrument referred to in clause
(iii)(A)(3) of this Section 2.1(b);

 

(c)

as of the date hereof and after giving effect to this Second Amendment, no
Default or Event of Default under the Note Purchase Agreement has occurred which
is continuing; and

 

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(d)all of the representations and warranties contained in Section 5 of the Note
Purchase Agreement are true and correct in all material respects with the same
force and effect as if made by the Company on and as of the date hereof, except
that any representation or warranty made as of a specific date shall be deemed
made as of such specific date.

 

Execution and delivery by the Company of this Second Amendment constitutes the
certification by the Company that the foregoing representations and warranties
are true and correct on and with respect to the date hereof.

 

SECTION 3.CONDITIONS TO EFFECTIVENESS OF THIS SECOND AMENDMENT.

 

Section 3.1.This Second Amendment shall not become effective until, and shall
become effective when, each and every one of the following conditions shall have
been satisfied:

 

(a)

executed counterparts of this Second Amendment, duly executed by the Company and
the Required Holders of the Notes under the Note Purchase Agreement, shall have
been delivered to the Noteholders; and

 

(b)the representations and warranties of the Company set forth in Section 2
hereof are true and correct on and with respect to the date hereof.

 

Upon receipt of all of the foregoing, this Second Amendment shall become
effective.

 

SECTION 4.PAYMENT OF NOTEHOLDERS’ COUNSEL FEES AND EXPENSES.

 

Section 4.1.The Company agrees to pay upon demand, the reasonable fees and
expenses of Chapman and Cutler LLP, counsel to the Noteholders, in connection
with the negotiation, preparation, approval, execution and delivery of this
Second Amendment.

 

SECTION 5.MISCELLANEOUS.

 

Section 5.1.This Second Amendment shall be construed in connection with and as
part of the Note Purchase Agreement, and except as modified and expressly
amended by this Second Amendment, all terms, conditions and covenants contained
in the Note Purchase Agreement and each of the Notes are hereby ratified and
shall be and remain in full force and effect.

 

Section 5.2.Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this Second Amendment
may refer to the Note Purchase Agreement without making specific reference to
this Second Amendment but nevertheless all such references shall include this
Second Amendment unless the context otherwise requires.

 

Section 5.3.The descriptive headings of the various Sections or parts of this
Second Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.

 

Section 5.4.This Second Amendment shall be governed by and construed in
accordance with New York law.

 

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Section 5.5.This Second Amendment may be executed in any number of counterparts,
each executed counterpart constituting an original, but all together only one
agreement.

 

[Signature Pages Follow]

 

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In Witness Whereof, the parties hereto have executed and delivered this Second
Amendment as of the date Second written above

 

STEPAN COMPANY

 

 

By  /s/ Scott D. Beamer

Name:  Scott D. Beamer

 

Title:

Vice President and Chief
Financial Officer

 

Signature page to Second Amendment to 2005 Note Purchase Agreement

 

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Accepted as of the first date written above.

 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

 

 

 

 

By  /s/ illegible

Vice President

 

We acknowledge that we hold $10,400,000.00 5.88% Series 2010-A Senior Notes, due
November 1, 2018.

We acknowledge that we hold $22,500,000.00 4.86% Series 2011-A Senior Notes, due
November 1, 2023

 

 

PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY

 

By:

Prudential Investment Management, Inc., as investment manager

 

 

By  /s/ illegible

Vice President

 

 

We acknowledge that w

old $6,600,000.00 5.88% Series 2010-A Senior Notes, due November 1, 2018.

 

 

FORETHOUGHT LIFE INSURANCE COMPANY

 

 

By:

Prudential Private Placement Investors, L.P. (as Investment Advisor)

 

By:

Prudential Private Placement Investors, Inc. (as its General Partner)

 

 

By  /s/ illegible

Vice President

 

We acknowledge that we hold $3,000,000.00 5.88%

Series 2010-A Senior Notes, due November 1, 2018.

 

Signature page to Second Amendment to 2005 Note Purchase Agreement

 

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Accepted as of the first date written above.

 

MUTUAL OF OMAHA INSURANCE COMPANY

 

 

By:

Prudential Private Placement Investors, L.P. (as Investment Advisor)

 

 

By:

Prudential Private Placement Investors, Inc. (as its General Partner)

 

 

 

By  /s/ illegible

Vice President

We acknowledge that we hold $15,000,000.00 4.86% Series 2011-A Senior Notes, due
November 1, 2023

 

RGA REINSURANCE COMPANY

 

 

By:

Prudential Private Placement Investors, L.P. (as Investment Advisor)

 

By:

Prudential Private Placement Investors, Inc. (as its General Partner)

 

 

By  /s/ illegible

Vice President

We acknowledge that we hold $7,500,000.00 4.86% Series 2011-A Senior Notes, due
November 1, 2023

 

Signature page to Second Amendment to 2005 Note Purchase Agreement

 

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Accepted as of the date first written above.

 

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

 

By:Cigna Investments, Inc. (authorized agent)

 

 

By  /s/ Elisabeth V. Piker

Name:Elisabeth V. Piker

Title:Managing Director

We acknowledge that we hold $6,428,565.00 5.69% Series 2005-A Senior Notes, due
November l, 20 l 8.

We acknowledge that we hold $6,000,000 5.88% Series 2010-A Senior Notes, due
November l, 2018.

 

 

LIFE INSURANCE COMPANY OF NORTH AMERICA

 

By:Cigna Investments, Inc. (authorized agent)

 

 

By  /s/ Elisabeth V. Piker

Name:Elisabeth V. Piker

Title:Managing Director

We acknowledge that we hold $4,999,995.00 5.69% Series 2005-A Senior Notes, due
November 1, 2018.

We acknowledge that we hold $2,000,000 5.88% Series 2010-A Senior Notes, due
November 1, 2018.

 

Signature page to Second Amendment to 2005 Note Purchase Agreement

 

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Accepted as of the date first written above.

 

CIGNA HEALTH AND LIFE INSURANCE COMPANY

 

By:Cigna Investments, Inc. (authorized agent)

 

 

By  /s/ Elisabeth V. Piker

Name:Elisabeth V. Piker

Title:Managing Director

We acknowledge that we hold $2,142,855 .00 5.69% Series 2005-A Senior Notes, due
November 1, 2018.

We acknowledge that we hold $2,000,000 5.88% Series 2010-A Senior Notes, due
November l, 2018.

 

 

HEALTHSPRJNG LIFE& HEALTH INSURANCE COMPANY, INC.

 

By:Cigna Investments, Inc. (authorized agent)

 

 

By  /s/ Elisabeth V. Piker

Name:Elisabeth V. Piker

Title:Managing Director

We acknowledge that we hold $714,285.00 5.69% Series 2005-A Senior Notes, due
November l, 2018.

 

Signature page to Second Amendment to 2005 Note Purchase Agreement

 

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Accepted as of the date first written above.

 

AXA EQUITABLE LIFE INSURANCE COMPANY

 

 

 

By  /s/ Amy Judd

Name:Amy Judd

Title:Investment Officer

 

We acknowledge that we hold $8,571,420.00 5.69% Series 2005-A Senior Notes, due
November 1, 2018.

 

We acknowledge that we hold $10,000,000 5.88% Series 2010-A Senior Notes, due
November 1, 2018.

 

Signature page to Second Amendment to 2005 Note Purchase Agreement

 

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Accepted as of the date first written above.

 

HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY

 

By:AllianceBernstein LP,

its Investment Advisor

 

 

By  /s/ Amy Judd

Name:Amy Judd

Title:Investment Officer

We acknowledge that we hold $1,785,712.50 5.69% Series 2005-A Senior Notes, due
November 1, 2018.

 

Signature page to Second Amendment to 2005 Note Purchase Agreement

 

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Accepted as of the date first written above.

 

NEW YORK LIFE INSURANCE COMPANY

 

 

By  /s/ James Belletire

Name:James Belletire

Title:Vice President

We acknowledge that we hold $9,400,000 4.86% Series 2011-A Senior Notes, due
November 1, 2023

 

 

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

 

By  NYL Investors LLC, its Investment Manager

 

 

By  /s/ James Belletire

Name:James Belletire

Title:Managing Director

We acknowledge that we hold $9,200,000 4.86% Series 2011-A Senior Notes, due
November 1, 2023

 

 

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLY OWNED LIFE
INSURANCE SEPARATE ACCOUNT (BOLI 30C)

 

By  NYL Investors LLC, its Investment Manager

 

 

By  /s/ James Belletire

Name:James Belletire

Title:Managing Director

We acknowledge that we hold $1,200,000 4.86% Series 2011-A Senior Notes, due
November 1, 2023

 

Signature page to Second Amendment to 2005 Note Purchase Agreement

 

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Accepted as of the date first written above.

 

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLYOWNED LIFE
INSURANCE SEPARATE ACCOUNT (BOLI 3-2)

 

By NYL Investors LLC, its Investment Manager

 

 

By  /s/ James Belletire

Name:James Belletire

Title:Managing Director

 

We acknowledge that we hold $200,000 4.86% Series 2011-A Senior Notes, due
November l, 2023

Signature page to Second Amendment to 2005 Note Purchase Agreement