Note Purchase Agreement



 Exhibit 10(a) 
 Execution Copy 
  

 
  
  

 
  
  

STEPAN COMPANY 
  

 

FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT

 Dated as of October 25, 2011 
 to: 
 NOTE PURCHASE AGREEMENT

 dated as of September 29, 2005 
  

 
  

 
  
  

 
  
  

 
  
  

 
  

 







 FIRST AMENDMENT TO NOTE
PURCHASE AGREEMENT 
 THIS FIRST AMENDMENT
TO NOTE PURCHASE AGREEMENT, dated as of October 25, 2011 (this “First Amendment”), is among STEPAN COMPANY, a Delaware corporation (the
“Company”), and each of the institutions which is a signatory to this First Amendment (collectively, the “Noteholders”). 
 R E C I T A L S: 
 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 (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”) and (ii) a First Supplement to Note Purchase Agreement dated as of
June 1, 2010 (the “2010 Supplement” and, together with the 2005 Note Purchase Agreement, the “Note Purchase Agreement”), 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, together with the 2005 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 First 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 First 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. FIRST AMENDMENT. 

 Section 1.1. Section 10.4 of the Note Purchase Agreement is hereby deleted in its entirety and replaced with the following: 

Section 10.4. Priority Debt. The Company will not at any time permit the aggregate amount of all Priority
Debt to exceed 25% of Consolidated Adjusted Tangible Net Worth (Consolidated Adjusted Tangible Net Worth to be determined as of the end of the then most recently ended fiscal quarter of the Company). 

  
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 Section 1.2. Section 10.8 of the Note Purchase Agreement is hereby deleted
in its entirety and replaced with the following: 
 Section 10.8. Restrictions on Investments. The
Company will not and will not permit any Restricted Subsidiary to make any Investment, or commit to make any Investment, in any Unrestricted Subsidiaries after June 30, 2011, if, immediately after giving effect to any such proposed Investment,
the aggregate amount of such proposed Investment (together with all prior Investments in Unrestricted Subsidiaries made after June 30, 2011 pursuant to this Section 10.8 (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 after June 30, 2011) shall exceed 30% of Consolidated
Tangible Net Worth as of the date of such proposed Investment. 
 Section 1.3. Schedule B of the Note Purchase
Agreement is hereby amended by (i) deleting the definition of “Priority Debt” in its entirety and replacing it with the following: 
 “Priority Debt” means (without duplication), as of the date of any determination thereof, the sum of (i) all unsecured Debt of Subsidiaries (including all Guaranties of Debt but
excluding (x) Debt owing to the Company or any other Subsidiary, (y) Debt outstanding at the time such Person became a Subsidiary, provided that such Debt shall have not been incurred in contemplation of such Person becoming a
Subsidiary, and (z) all Guaranties of Debt of the Company by any Subsidiary which has also guaranteed the Notes) and (ii) all Debt of the Company and its Subsidiaries secured by Liens other than Debt secured by Liens permitted by
subparagraphs (a) through (i), inclusive, of Section 10.5 (including for purposes of such subparagraphs, Debt secured by Liens on assets of Unrestricted Subsidiaries in the same manner as Liens are permitted on the assets of Restricted
Subsidiaries in such subparagraphs, except that, solely for purposes of this definition of Priority Debt, subparagraph (f) of Section 10.5 shall be read as permitting only Liens existing as of the Closing Date and reflected in
Schedule 10.5 and Liens existing on the date of the First Amendment and reflected in Exhibit A thereto with respect to Unrestricted Subsidiaries). 
 and (ii) adding the following new defined terms in the appropriate alphabetical order therein: 
 “Consolidated Adjusted Tangible Net Worth” shall mean the sum of the amounts set forth on the consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with
GAAP and as of any date selected by the Company 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


  
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on such balance sheet) representing the cost of acquisitions of 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 the 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 provisions, 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 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 the Company 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. 
 “First Amendment” means the
First Amendment to Note Purchase Agreement dated as of October 25, 2011, 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 First Amendment, the Company
represents and warrants to the Noteholders (which representations and warranties shall survive the execution and delivery of this First Amendment) that: 
 (a) this First Amendment has been duly authorized, executed and delivered by it and this First Amendment, and the Note Purchase Agreement as amended by this First 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 First 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); 

  
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 (c) as of the date hereof and after giving effect to this First Amendment, no Default or
Event of Default under the Note Purchase Agreement has occurred which is continuing; and 
 (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 First 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 FIRST AMENDMENT.


 Section 3.1. This First 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 First 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 First 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 First Amendment. 
  

	SECTION	5. MISCELLANEOUS. 


Section 5.1. This First Amendment shall be construed in connection with and as part of the Note Purchase Agreement, and
except as modified and expressly amended by this First 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 First Amendment may refer to the Note Purchase Agreement without making specific reference to this First Amendment but nevertheless all such references shall include this First Amendment unless the context otherwise requires.


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

Section 5.4. This First Amendment shall be governed by and construed in accordance with Illinois law. 

Section 5.5. This First 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 First Amendment as of the date first written above 
  

							
		 		 	STEPAN COMPANY
				
		 		 	By	 	/s/ James E. Hurlbutt
		 		 		 	Name: James E. Hurlbutt
		 		 		 	Title: Vice President and Chief Financial Officer


  








 Accepted as of the date first written above: 

 

			
	CONNECTICUT GENERAL LIFE INSURANCE COMPANY
		
	By:	 	CIGNA Investments, Inc.


  

			
	By  	 	/s/ Robert W. Eccles
		 	Name: Robert W. Eccles
		 	Title: Sr. Managing Director


  

			
	We acknowledge that Connecticut General Life Insurance Company holds $15,000,000 5.69% Series 2005-A Senior Notes, due November 1, 2018.
	
	We acknowledge that Connecticut General Life Insurance Company holds $8,000,000 5.88% Series 2010-A Senior Notes Due June 1, 2022.
	
	LIFE INSURANCE COMPANY OF NORTH AMERICA
		
	By:	 	CIGNA Investments, Inc.


  

			
	By  	 	/s/ Robert W. Eccles
		 	Name: Robert W. Eccles
		 	Title: Sr. Managing Director


  

			
	We acknowledge that Life Insurance Company of North America holds $5,000,000 5.69% Series 2005-A Senior Notes, due November 1, 2018.
	
	We acknowledge that Life Insurance Company of North America holds $2,000,000 5.88% Series 2010-A Senior Notes Due June 1, 2022.









 Accepted as of the date first written above. 

 

					
	MONY LIFE INSURANCE COMPANY
		
	By	 	/s/ Amy Judd
		 	Name:	 	Amy Judd
		 	Title:	 	Investment Advisor
	
	 We acknowledge that MONY Life Insurance
 Company holds $5,500,000 5.69% Series 2005-A
 Senior Notes, due November 1,
2018.

	
	AXA EQUITABLE LIFE INSURANCE COMPANY
		
	By	 	/s/ Amy Judd
		 	Name:	 	Amy Judd
		 	Title:	 	Investment Advisor
	
	 We acknowledge that AXA Equitable Life
 Insurance Company holds $12,000,000 5.69%
 Series 2005-A Senior Notes, due November 1,
2018.

	
	 We acknowledge that AXA Equitable Life
 Insurance Company holds $10,000,000 5.88%
 Series 2010-A Senior Notes Due June 1,
2022.










 Accepted as of the date first written above. 

HORIZON BLUE CROSS BLUE SHIELD
OF NEW JERSEY 
 By: Alliance Capital Management LP, its

 Investment Advisor 

 

					
	By	 	 
			
		 	Name:	 	 
			
		 	Title:	 	 
		 		 	


 We acknowledge that Horizon Blue Cross Blue 

Shield of New Jersey holds $2,500,000 5.69% 

Series 2005-A Senior Notes, due November 1, 2018. 







 Accepted as of the date first written above. 

 

			
	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
		
	By:  	 	/s/ Anthony Coletta
		 	Vice President


  

			
	 We acknowledge that The Prudential Insurance Company of America holds $10,400,000 5.88% Series 2010-A Senior Notes
Due June 1, 2022.
  

PRUDENTIAL RETIREMENT INSURANCE AND
ANNUITY COMPANY
  
 By:   Prudential Investment Management, Inc.,
as investment manager

		
	        By:	 	/s/ Anthony Coletta
		 	Vice President


  

			
	 We acknowledge that Prudential Retirement Insurance and Annuity Company holds $6,600,000 5.88% Series 2010-A Senior
Notes Due June 1, 2022.
  
 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/ Anthony Coletta
		 	Vice President


  

			
	We acknowledge that Forethought Life Insurance Company holds $3,000,000 5.88% Series 2010-A Senior Notes Due June 1, 2022.









 EXHIBIT A 

EXISTING LIENS 
  

													
	 


OBLIGOR
	  	 


CREDITOR
	  	
DESCRIPTION
OF
INDEBTEDNESS
	  	 

SECURITY
	  	 


MATURITY
	  	OUTSTANDING
PRINCIPAL
AMOUNT

(000’S)	 
	 Stepan Europe S.A.S.
	  	CIC	  	Short-Term Credit Line	  	Accounts Receivable	  	2016	  	$	6,693	  
	 Stepan Europe S.A.S.
	  	LCL	  	Short-Term Credit Line	  	Accounts Receivable	  	2015	  	$	5,355	  
	 Stepan Europe S.A.S.
	  	CIC, Paribas-BNP	  	Short-Term Credit Line	  	Accounts Receivable	  	Periodic	  	$	0	  
	 Stepan UK Limited
	  	HSBC	  	Short-Term Credit Line	  	Accounts Receivable	  	2012	  	$	126	  
	 Stepan Quimica Ltda.
	  	Banco Itau	  	Short-Term Credit Line	  	Accounts Receivable	  	2012	  	$	0	  
	 Stepan Philippines, Inc.
	  	United Coconut Planters Bank	  	Term Loan	  	PP&E	  	2014	  	$	1,697	  
	 Stepan Philippines Quaternaries, Inc.
	  	United Coconut Planters Bank	  	Term Loan	  	PP&E	  	2014	  	$	6,417