Exhibit 10.6
EXECUTION VERSION
AMENDMENT NO. 1
Dated as of September 29, 2023
to
CREDIT AGREEMENT
Dated as of June 24, 2022
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”) is made as of September 29, 2023 (the “Amendment No. 1 Effective Date”) by and among Stepan Company (the “Borrower”), the “Lenders” (as defined below) signatory hereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”), under that certain Credit Agreement dated as of June 24, 2022 by and among the Borrower, the Foreign Subsidiary Borrowers from time to time party thereto, the financial institutions from time to time party thereto (the “Lenders”) and the Administrative Agent (as amended, the “Credit Agreement”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement.
WHEREAS, the Borrower has requested that the Lenders agree to certain modifications to the Credit Agreement; and
WHEREAS, the Borrower, the Lenders party hereto and the Administrative Agent have agreed to amend the Credit Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders party hereto and the Administrative Agent hereby agree as follows.
“ “Note Purchase Amendment Condition” means that each Note Purchase Agreement has been amended, on terms reasonably acceptable to the Administrative Agent, as follows:
“Qualified Cash” means, as of any date of determination, (a) with respect to the calculation of the Net Leverage Ratio prior to the satisfaction of clauses (d) and (f) of the Note Purchase Amendment Condition, unrestricted and unencumbered cash or Permitted Investments of the Company and its Domestic Subsidiaries on deposit in accounts located in the United States on such date in excess of $50,000,000 and in an aggregate amount not to exceed $150,000,000, (b) with respect to the calculation of the Net Leverage Ratio following the satisfaction of the clause (d) (as it references this clause (b)) and clause (f) of the Note Purchase Amendment Conditions, the sum of the following (solely to the extent that such sum is in excess of $50,000,000 and in an aggregate amount not to exceed $150,000,000): (i) 100% of unrestricted and unencumbered cash or Permitted Investments of the Company and its Domestic Subsidiaries on deposit in accounts located in the United States (collectively, “Domestic Cash”) on such date, plus (ii) 65% of unrestricted and unencumbered cash or Permitted Investments of the Company and its Subsidiaries which does not qualify as “Domestic Cash”, and (c) with respect to calculation of the Pricing Leverage Ratio, or with respect to the calculation of the Net Leverage Ratio following the satisfaction of clause (d) (as it references this clause (c)) and clause (f) of the Note Purchase Amendment Conditions, unrestricted and unencumbered cash or Permitted Investments of the Company and its Subsidiaries in excess of $50,000,000 and in an aggregate amount not to exceed $300,000,000. For the avoidance of doubt, cash and Permitted Investments of any Captive Insurance Subsidiary shall be considered restricted and therefore shall not constitute Qualified Cash.
“(a) Maximum Net Leverage Ratio. The Company will not permit the ratio (the “Net Leverage Ratio”), determined as of the end of each of its fiscal quarters ending on and after June 30, 2022, of (i) Consolidated Indebtedness minus Qualified Cash, in each case as of the last day of the applicable fiscal quarter (it being understood that such difference shall not be less than zero) to (ii)
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Consolidated EBITDA for the period of four (4) fiscal quarters then ended, all calculated for the Company and its Subsidiaries on a consolidated basis, to be greater than, 3.50 to 1.00; provided, that the Company may, not more than one (1) time during the term of this Agreement, elect (an “Acquisition Holiday Election”) to increase the maximum Net Leverage Ratio permitted under this Section 6.12(a)(i) to 4.00 to 1.00 for a period of four (4) consecutive fiscal quarters in connection with, and commencing with the first fiscal quarter ending after, an Acquisition (the “Acquisition Holiday Election Quarter”) if the aggregate consideration paid or to be paid in respect of such Acquisition equals or exceeds $75,000,000 (it being understood that the Net Leverage Ratio shall return to less than or equal to 3.50 to 1.00 no later than the fifth fiscal quarter following the Acquisition Holiday Election Quarter);
provided, further, that:
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[Signature Pages Follow]
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.
STEPAN COMPANY,
as the Borrower
By: /s/ Luis E. Rojo
Name: Luis E. Rojo
Title: Vice President and Chief Financial Officer
Amendment No. 1 to
Stepan Company Credit Agreement
JPMORGAN CHASE BANK, N.A., as a Lender and as Administrative Agent
By: /s/ Jacqueline Panos
Name: Jacqueline Panos
Title: Vice President
Amendment No. 1 to
Stepan Company Credit Agreement
BANK OF AMERICA, N.A.,
as a Lender
By: /s/ A. Quinn Richardson
Name: A. Quinn Richardson
Title: Senior Vice President
Amendment No. 1 to
Stepan Company Credit Agreement
HSBC Bank USA, N.A., as a Lender
By: /s/ Matt Brannon
Name: Matt Brannon
Title: Vice President, Global Relationship Manager
Amendment No. 1 to
Stepan Company Credit Agreement
BANK OF THE WEST, as a Lender
By: /s/ Patricia Delgrande
Name: Patricia Delgrande
Title: Managing Director
Amendment No. 1 to
Stepan Company Credit Agreement
ING Bank N.V., DUBLIN BRANCH, as a Lender
By: /s/ Sean Hassett
Name: Sean Hassett
Title: Director
By: /s/ Ciaran Dunne
Name: Ciaran Dunne
Title: Director
Amendment No. 1 to
Stepan Company Credit Agreement
U.S. Bank National Association, as a Lender
By: /s/ Jason Hall
Name: Jason Hall
Title: Assistant Vice President
Amendment No. 1 to
Stepan Company Credit Agreement
CITIZENS BANK, N.A., as a Lender
By: /s/ Arianna DeMarco
Name: Arianna DeMarco
Title: Vice President
Amendment No. 1 to
Stepan Company Credit Agreement
Credit Industriel et Commercial, NY, as a Lender
By: /s/ Eugene Kenny
Name: Eugene Kenny
Title: Vice President
By: /s/ Eric Longuet
Name: Eric Longuet
Title: Managing Director
Amendment No. 1 to
Stepan Company Credit Agreement
ATTACHMENT A
REAFFIRMATION
The undersigned hereby acknowledges receipt of a copy of Amendment No. 1, dated as of September 29, 2023 (the “Amendment”), to the Credit Agreement dated as of June 24, 2022 by and among Stepan Company (the “Borrower”), the Foreign Subsidiary Borrowers from time to time party thereto, the financial institutions from time to time party thereto (the “Lenders”) and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”) (as amended, restated, supplemented or otherwise modified from time to time, including by the Amendment, the “Credit Agreement”). Capitalized terms used in this Reaffirmation and not defined herein shall have the meanings given to them in the Credit Agreement. The undersigned acknowledges and agrees that nothing in the Credit Agreement, the Amendment or any other Loan Document shall be deemed to require the Administrative Agent or any Lender to consent to any future amendment or other modification to the Credit Agreement or any Loan Document. The undersigned reaffirms the terms and conditions of each of the Loan Documents executed by it and acknowledges and agrees that such agreement and each and every such Loan Document executed by the undersigned in connection with the Credit Agreement remains in full force and effect and is hereby reaffirmed, ratified and confirmed. All references to the Credit Agreement contained in the above-referenced documents shall be a reference to the Credit Agreement as so modified by the Amendment and as the same may from time to time hereafter be amended, modified or restated.
Dated: September 29, 2023
[signature pages follows]
STEPAN SPECIALTY PRODUCTS, LLC
By: /s/ Luis E. Rojo
Name: Luis E. Rojo
Title: Vice President and Chief Financial Officer
STEPAN SURFACTANTS HOLDINGS, LLC
By: /s/ Luis E. Rojo
Name: Luis E. Rojo
Title: Vice President and Chief Financial Officer
Signature Page to Reaffirmation