EXHIBIT 4.1
EXECUTION COPY
AMENDMENT NO. 4
AMENDMENT NO. 4 dated as of December 20, 2002 to the Amended
and Restated Credit Agreement dated as of April 6, 2000, as amended by Amendment
No. 1 and Waiver dated as of October 30, 2000, Amendment No. 2 dated as of
January 26, 2001 and Amendment No. 3 dated as of March 1, 2002, and as
supplemented by two Credit Agreement Supplements dated as of August 25, 2000 and
October 31, 2000, respectively (as so amended and supplemented, and as otherwise
amended, supplemented and otherwise modified to the date hereof, the "CREDIT
AGREEMENT"), each among SOVEREIGN SPECIALTY CHEMICALS, INC., a Delaware
corporation (the "DOMESTIC BORROWER"), the Offshore Borrowers party thereto, the
banks, financial institutions and other institutional lenders party thereto (the
"LENDERS"), J.P. MORGAN SECURITIES INC., as joint lead arranger, joint
book-running manager and documentation agent, and JPMORGAN CHASE BANK (formerly
THE CHASE MANHATTAN BANK), as administrative agent (the "ADMINISTRATIVE AGENT"),
and as Offshore Currency Agent, Initial Issuing Bank and Swing Line Bank and
certain others. Capitalized terms not otherwise defined in this Amendment No. 4
have the same meanings as specified in the Credit Agreement.
PRELIMINARY STATEMENTS:
(a) The Domestic Borrower has requested that the Credit
Agreement be amended on the terms set forth below; and
(b) the undersigned Lenders are willing to so amend the Credit
Agreement on the terms and conditions of this Amendment No. 4;
NOW, THEREFORE, it is hereby agreed as follows:
SECTION 1. Amendments. The Credit Agreement is, effective as
of the Amendment No. 4 Effective Date (as hereinafter defined), amended as
follows:
(a) The recital of parties to the Credit Agreement is amended
in its entirety and replaced by the following:
"AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 6,
2000, among SOVEREIGN SPECIALTY CHEMICALS, INC., a Delaware corporation
(the "DOMESTIC BORROWER"), the Offshore Borrowers (as hereinafter
defined), the banks, financial institutions and other institutional
lenders listed on the signature pages hereof as the Initial Lenders
(the "INITIAL LENDERS"), the Swing Line Lenders (as hereinafter
defined), and J.P. MORGAN SECURITIES INC. ("J.P. MORGAN"), as sole lead
arranger and sole book-running manager (the "LEAD ARRANGER" and the
"BOOK MANAGER", as the case may be) for the Facilities (as hereinafter
defined), and JPMORGAN CHASE BANK ("JPMC"), as administrative agent
(together with any successor administrative agent appointed pursuant to
Article VII, the "ADMINISTRATIVE AGENT") for the Lender Parties (as
hereinafter defined), as documentation agent for the Facilities (the
"DOCUMENTATION AGENT"), as offshore currency agent (the "OFFSHORE
CURRENCY AGENT") for the Revolving
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Credit Lenders (as hereinafter defined), as the Initial Issuing Bank
(the "INITIAL ISSUING BANK" and, together with the Initial Lenders, the
"INITIAL LENDER PARTIES") and as the Domestic Swing Line Lender (as
hereinafter defined).";
(b) All references to "Amendment Effective Date" contained in
the Credit Agreement are amended by adding "No. 3" immediately after the word
"Amendment";
(c) Other than in Section 8.01 and in the definition of "Joint
Lead Arranger" in Schedule II, all references to "the Joint Lead Arrangers"
contained in the Credit Agreement are amended by replacing them with the words
"the Lead Arranger";
(d) All references to "a Joint Lead Arranger" contained in the
Credit Agreement are amended by replacing the words "a Joint" with the word
"the";
(e) All references to "Joint Book Managers" contained in the
Credit Agreement are amended by replacing them with the words "Book Manager";
(f) Other than in Schedule II, all references to "Syndication
Agent" contained in the Credit Agreement are amended by replacing them with the
words "Administrative Agent and Lead Arranger";
(g) Clause (ii) of Section 2.01(a) is amended in its entirety
and replaced with the following:
"Each Lender's agreement to make advances to any Offshore
Borrower in US Dollars (each, an "OFFSHORE ACQUISITION
ADVANCE") terminated on the date which was eighteen (18)
months after the Initial Closing Date. No further Offshore
Acquisition Advances may be reborrowed under this Agreement.";
(h) Section 2.01(b) is amended in its entirety and replaced by
the following:
"Term B Advances. Immediately following the consummation of
the Conversion, each New Term B Lender severally agrees, on the terms
and conditions hereinafter set forth, to make a single advance (each,
together with each Converted Term B Advance, a "TERM B ADVANCE") in an
amount not to exceed such Lender's New Term B Commitment at such time.
Notwithstanding anything to the contrary contained in the preceding
sentence, each New Term B Lender shall be deemed to have satisfied its
obligations under this Section 2.01(b) by deducting from the advances
required to be made, an amount equal to the amount of any fee
separately agreed with the Domestic Borrower in connection with the
making of such Lender's New Term B Commitment. The Term B Borrowing
shall consist of (i) the Conversion and (ii) the New Term B Advances
made by the New Term B Lenders ratably according to their New Term B
Commitments. The initial Term B Advance shall be made by one or more
existing Lenders under the Facilities. Amounts borrowed under this
Section 2.01(b) and repaid or prepaid may not be reborrowed.";
(i) Clause (ii) of Section 2.04(a) is amended in its entirety
and replaced with the following:
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"As of the Amendment No. 4 Effective Date, there are no
outstanding Offshore Acquisition Advances.";
(j) Section 2.04(b) is amended in its entirety and replaced
with the following:
"The Domestic Borrower shall repay to the Administrative Agent
for the ratable account of the Term B Lenders the aggregate outstanding
principal amount of the Term B Advances on the last day of each fiscal
quarter of the Domestic Borrower, commencing with the fiscal quarter
ending March 31, 2003 and continuing through the Termination Date, in
an amount for each quarter equal to 0.25% of the initial aggregate
principal amount of all Term B Advances (which installment amounts
shall be reduced as a result of the application of prepayments in
accordance with Section 2.06) provided, however, that the final
principal installment shall be repaid on the Termination Date and shall
be in an amount equal to the aggregate principal amount of the Term B
Advances outstanding on such date.";
(k) Section 2.05(a) is amended by (i) inserting the words ",
the Term B Commitments" immediately following the words "the Offshore
Acquisition Commitments" and (ii) deleting the parenthetical at the end of the
section;
(l) Clause (i)(A) of Section 2.05(b) is amended by inserting
the following immediately prior to the end thereof:
"The outstanding Term A Advances of each Term A Lender who has
made a Term B Commitment, as set forth in Part 1 of Schedule I-A
attached hereto, shall, to the extent of and in such amount equal to
such Term B Commitment, be converted into Term B Advances (each a
"CONVERTED TERM B ADVANCE"), to be effective upon the Amendment No. 4
Effective Date (the "CONVERSION"). Upon the occurrence of the
Conversion, the Term A Commitment of each Term A Lender that makes a
Converted Term B Advance shall be automatically and permanently
reduced, by an amount equal to the sum of such Lender's Converted Term
B Advances";
(m) Clause (i)(B) of Section 2.05(b) is amended in its
entirety and replaced with the following:
"All the Offshore Acquisition Commitments of the Offshore
Acquisition Lenders have terminated.";
(n) Clause (ii) of Section 2.05(b) is amended in its entirety
and replaced with the following:
"On the Amendment No. 4 Effective Date, after giving effect to
any Term B Borrowing on such date, and from time to time thereafter
upon each repayment or prepayment of the Term B Advances, the aggregate
Term B Commitments of the Term B Lenders shall be automatically and
permanently reduced, on a pro rata basis, by an amount equal to the
amount by which the aggregate Term B Commitments immediately prior to
such reduction exceed the aggregate unpaid principal amount of the Term
B Advances then outstanding.";
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(o) Section 2.06(a) is amended by (i) inserting the number
"(i)" immediately before the words "accrued interest" and (ii) inserting the
following immediately before the semicolon following the words "aggregate
principal amount prepaid":
", (ii) in the case of any such prepayment of Term B Advances prior to
the first anniversary of the Amendment No. 4 Effective Date, a premium
of 2% of the aggregate principal amount so prepaid, and (iii) in the
case of any such prepayment of Term B Advances on or after the first
anniversary of the Amendment No. 4 Effective Date, but prior to the
second anniversary of the Amendment No. 4 Effective Date, a premium of
1% of the aggregate principal amount so prepaid"
(p) Clause (i) of Section 2.06(b) is amended in its entirety
and replaced with the following:
"Excess Cash Flow. The Domestic Borrower shall, on the 100th
day following the end of each Fiscal Year prepay an aggregate principal
amount of the Advances comprising part of the same Borrowings (or cause
the applicable Offshore Borrowers to prepay Offshore Acquisition
Advances) as follows: (A) commencing following the Domestic Borrower's
Fiscal Year ending on December 31, 2000 through and including the
prepayment required under Section 2.06(b)(i) in respect of the Fiscal
Year ending December 31, 2002, in an aggregate amount equal to fifty
percent (50%) of the amount of Excess Cash Flow for such Fiscal Year;
provided that the aggregate amount of any prepayment of Advances
otherwise required under this clause (A) shall not exceed the amount
which is $1 greater than the smallest aggregate prepayment of Advances
that would be required in order to cause the Total Debt/EBITDA Ratio as
of the last day of the Fiscal Year in respect of which such payment is
to be made to be equal to or less than 3.0:1 (after giving effect to
such prepayment), and provided further that if the Total Debt/EBITDA
Ratio as of the last day of the Fiscal Year in respect of which such
payment is to be made is less than 3.0:1, then no such prepayment shall
be required under this clause (A), and (B) commencing following the
Domestic Borrower's Fiscal Year ending on December 31, 2003, if the
Total Debt/EBITDA Ratio as of the last day of the Fiscal Year in
respect of which such payment is to be made is equal to or greater than
4.25:1, in an aggregate amount equal to seventy five percent (75%) of
the amount of Excess Cash Flow for such Fiscal Year, and if the Total
Debt/EBITDA Ratio as of the last day of the Fiscal Year in respect of
which such payment is to be made is less than 4.25:1, in an aggregate
amount equal to fifty percent (50%) of the amount of Excess Cash Flow
for such Fiscal Year.";
(q) Clause (ii)(B) of Section 2.06(b) is amended by deleting
the reference to the figure "90%" contained therein and replacing it with the
figure "100%";
(r) Clause (ii)(C) of Section 2.06(b) is amended by (i)
inserting immediately after the words "sales or issuances to" in the first
parenthetical "(1) to the extent permitted by Section 5.02(g), the Domestic
Borrower or any other Loan Party, or (2)", (ii) deleting the reference to the
figure "50%" contained therein and replacing with the figure "100%", and (iii)
deleting the proviso contained at the end thereof;
(s) Clause (v)(A) of Section 2.06(b) is amended in its
entirety and replaced with the following:
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"Each prepayment of Advances pursuant to subsections (i) and
(ii) of this Section 2.06(b) (and optional prepayments of Term Advances
pursuant to Section 2.06(a)) shall be applied (1) first, pro rata
between the scheduled amortization installments of the Term Facilities
until all the Term A Advances, the Amortization Amount of the Offshore
Acquisition Advances and the Term B Advances are prepaid in full, (2)
second, to any other outstanding Offshore Acquisition Advances until
such Advances are prepaid in full, and (3) third, to the Revolving
Credit Facility as set forth in clause (vi) below.";
(t) Clause (v)(B) of Section 2.06(b) is amended by inserting
the following immediately before the period at the end thereof:
"; provided, however that all proceeds of the New Term B
Advances, net of the aggregate amount of the Transaction Costs, shall
be applied to the prepayment of the scheduled amortization installments
of the Remaining Term A Advances in direct order of maturity until
either (x) all the Remaining Term A Advances are prepaid in full, or
(y) the entire proceeds of the New Term B Advances (net of the
aggregate amount of the Transaction Costs) have been applied to such
prepayment";
(u) Section 2.14 is amended in its entirety and replaced with
the following:
"Use of Proceeds. (a) The proceeds of the Advances (other than
the New Term B Advances) and issuances of Letter of Credit shall be
available (and the Domestic Borrower and each Offshore Borrower each
agrees that it shall use such proceeds and Letters of Credit) solely
for general corporate purposes other than to make Investments (except
for Investments permitted under Section 5.02(g)(ii) and (iii), (v) and
(vi), (viii) and (ix) through (xi)).
(b) The proceeds of the New Term B Advances shall be
available (and the Domestic Borrower agrees that it shall use such
proceeds) solely to (i) pay the Transaction Costs and (ii) prepay
Remaining Term A Advances.";
(v) Section 2.16(a) is amended by (i) replacing the words
"and/or an Offshore Swing Line Note" with the words ", an Offshore Swing Line
Note and/or a Term B Note" and (ii) replacing the words "and A-4" with the words
", A-4 and A-5";
(w) Article III is amended by adding the following new section
in proper numerical order:
"SECTION 3.03B Conditions Precedent to Term B Advances. The
obligation of each Term B Lender to make a Term B Advance to the
Domestic Borrower is subject to the occurrence of the Amendment No. 4
Effective Date prior to or concurrently with the making of such Term B
Advance and to the conditions set forth in Section 3.04.";
(x) The proviso at the end of clause (xiii) of Section 5.02(g)
is amended in its entirety and replaced with the following:
"provided, however, that any Investment made pursuant to this
clause (xiii) on or after the Amendment Effective Date shall consist
solely of Equity Interests of the Domestic Borrower and shall not
include any assumption of Debt except to the extent that (x) at any
time after March 31, 2003, such Debt is permitted by clauses (ii),
(vi), (vii)
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and (viii) of Section 5.02(b) or (y) the portion of such Investment
that consists of consideration other than Equity Interests of the
Domestic Borrower (including assumed Debt) does not exceed in the
aggregate $2,500,000 in respect of Investments made after the Amendment
No. 4 Effective Date.";
(y) Section 5.03(c) is amended by (i) deleting the number
"(i)" at the beginning thereof, (ii) replacing the letters "(A)", "(B)" and "C"
in clause (i) thereof with the numbers "(i)", "(ii)" and "(iii)" respectively,
and (iii) deleting clause (ii) thereof in its entirety;
(z) Section 5.04 is amended by deleting subsections (a)
through (e) thereof and replacing them with the following:
"(a) Total Debt/EBITDA. Maintain at the end of each fiscal
quarter of the Domestic Borrower a Total Debt/EBITDA Ratio of not more
than the amount set forth below for each period set forth below:
DURING QUARTER ENDING RATIO
--------------------- -----
December 31, 2002 6.00:1
March 31, 2003 6.00:1
June 30, 2003 6.00:1
September 30, 2003 6.00:1
December 31, 2003 5.75:1
March 31, 2004 5.75:1
June 30, 2004 5.50:1
September 30, 2004 5.25:1
December 31, 2004 5.00:1
March 31, 2005 5.00:1
June 30, 2005 4.75:1
September 30, 2005 4.50:1
December 31, 2005 4.50:1
March 31, 2006 4.25:1
June 30, 2006 4.00:1
and thereafter
(b) Senior Debt/EBITDA Ratio. Maintain at the end of each
fiscal quarter of the Domestic Borrower a Senior Debt/EBITDA Ratio of
not more than the amount set forth below for each period set forth
below:
DURING QUARTER ENDING RATIO
--------------------- -----
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December 31, 2002 2.25:1
March 31, 2003 2.25:1
June 30, 2003 2.25:1
September 30, 2003 2.25:1
December 31, 2003 2.00:1
March 31, 2004 2.00:1
June 30, 2004 2.00:1
September 30, 2004 1.75:1
December 31, 2004 1.75:1
March 31, 2005 1.75:1
June 30, 2005 1.50:1
September 30, 2005 1.50:1
December 31, 2005 1.50:1
March 31, 2006 1.50:1
June 30, 2006 1.25:1
and thereafter
(c) Asset Coverage Ratio. Maintain at the end of each fiscal
quarter of the Domestic Borrower ending on or after the Amendment No. 4
Effective Date an Asset Coverage Ratio equal to or greater than 1.25:1.
(d) Interest Coverage Ratio. Maintain at the end of each
fiscal quarter of the Domestic Borrower an Interest Coverage Ratio of
not less than the amount set forth below for each period set forth
below:
DURING QUARTER ENDING RATIO
--------------------- -----
December 31, 2002 1.65:1
March 31, 2003 1.65:1
June 30, 2003 1.65:1
September 30, 2003 1.65:1
December 31, 2003 1.65:1
March 31, 2004 1.65:1
June 30, 2004 1.70:1
September 30, 2004 1.75:1
December 31, 2004 1.75:1
March 31, 2005 1.75:1
June 30, 2005 1.85:1
September 30, 2005 1.95:1
December 31, 2005 2.00:1
March 31, 2006 2.00:1
June 30, 2006 2.25:1
September 30, 2006 2.25:1
December 31, 2006 2.25:1
March 31, 2007 2.50:1
and thereafter
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(aa) Section 7.03 is amended in its entirety and replaced by
the following:
"SECTION 7.03. J.P. Morgan, JPMC and Affiliates. With respect
to its Commitments or the Commitments of its Affiliates, the Advances
made by it or the Advances made by its Affiliates and the Notes issued
to it or to its Affiliates, J.P. Morgan and JPMC and their Affiliates
shall have the same rights and powers under the Loan Documents as any
other Lender Party and may exercise the same as though it or its
Affiliate were not an Agent; and the term "Lender Party" or "Lender
Parties" shall, unless otherwise expressly indicated, include JPMC and
J.P. Morgan in their respective individual capacities. JPMC and J.P.
Morgan and their respective Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person that may do business
with or own securities of any Loan Party or any such Subsidiary, all as
if J.P. Morgan and JPMC were not Agents and without any duty to account
therefor to the Lender Parties.";
(bb) Section 8.02 is amended in its entirety and replaced by
the following:
"SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to the Domestic Borrower, at its
address at 225 West Washington Street, Suite 2200, Chicago, IL 60606,
Telecopy Number: (312) 419-4034, Attention: Terry Smith; if to an
Offshore Borrower or any other Loan Party, to it c/o the Domestic
Borrower with a copy to the address provided on Schedule I to the
Credit Agreement Supplement executed and delivered by such Offshore
Borrower; if to any Initial Lender Party, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; if to any
other Lender Party (other than any Offshore Swing Line Lender), at its
Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender Party; if to any Offshore Swing
Line Lender, to the Offshore Currency Agent, with a copy to the notice
address specified in the Joinder Agreement pursuant to which it became
an Offshore Swing Line Lender; if to JPMC, in its capacity as the
Administrative Agent, Documentation Agent or Offshore Currency Agent,
at its address at 270 Park Avenue, 4th Floor, New York, New York 10017,
Telecopy Number: (212) 270-4584, Attention: Lawrence Palumbo; if to
J.P. Morgan in its capacity as a Lead Arranger or Book Manager, at its
address at 270 Park Avenue, 4th Floor, New York, New York 10017,
Telecopy Number: (212) 270-4584, Attention: Lawrence Palumbo; or, as to
the Domestic Borrower or the Administrative Agent, at such other
address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as
shall be designated by such party in a written notice to the Domestic
Borrower and the Administrative Agent. All such notices and other
communications shall, when mailed, telegraphed, telecopied or telexed,
be effective when deposited in the mails, delivered to the telegraph
company, transmitted by telecopier or confirmed by telex answerback,
respectively, except that notices and communications to any Agent
pursuant to Article II, III or VII shall not be effective until
received by such Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and
delivered hereunder shall be effective as delivery of an original
executed counterpart thereof.";
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(cc) Section 8.07(e) is amended by deleting the words "or A-4"
and replacing them with the words ", A-4 or A-5";
(dd) Sections 8.12, 8.13, 8.14, 8.15 and 8.16 are amended by
being renumbered as Sections 8.13, 8.14, 8.15, 8.16 and 8.17, respectively, and
all cross references to Sections 8.12, 8.13, 8.14, 8.15, and 8.16 contained in
the Credit Agreement are amended by replacing them with references to Sections
8.13, 8.14, 8.15, 8.16 and 8.17, respectively;
(ee) A new Section 8.12 is inserted in proper numerical order
as follows:
"SECTION 8.12. Term B Amendments. (a) The provisions of
Section 8.01(b) shall apply to any amendment, waiver or consent that
directly affects any Lender that has a commitment under the Term B
Facility;
(b) no amendment, waiver or consent shall, unless in writing
and signed by Lenders holding more than 50% of the aggregate
Commitments under the Term B Facility, change the order of application
of any reduction in the Commitments or any prepayment of Advances among
the Term A Facility, the Offshore Acquisition Facility and the Term B
Facility from the application thereof set forth in the applicable
provisions of Section 2.06(b)(v) in any manner that materially affects
the Lenders under the Term B Facility or require the permanent
reduction of the Revolving Credit Facility at any time when all or a
portion of the Term B Facility remains in effect;
(c) no amendment, waiver or consent shall, unless in writing
and signed by all of the Term B Lenders, amend this Section 8.12.";
(ff) The Credit Agreement is amended by inserting Schedule
I-A - Term B Commitments, attached hereto as Schedule I-A, in proper numerical
order;
(gg) Schedule II is amended by adding the following new
definitions in proper alphabetical order:
" "AMENDMENT NO. 4" means Amendment No. 4 to the Credit
Agreement dated as of December 20, 2002, among the Domestic Borrower,
the Offshore Borrowers, the Lender Parties party thereto and the
Administrative Agent.
"AMENDMENT NO. 4 EFFECTIVE DATE" has the meaning specified in
Section 3 of Amendment No. 4.
"ASSET COVERAGE RATIO" means, at any date of determination,
the ratio of (a) the sum of (i) all inventory in all of its forms, (ii)
all accounts receivable, (iii) all real property (including leasehold
interests and fixtures), and (iv) all equipment in all of its forms, in
each case of Domestic Borrower and its Subsidiaries on a consolidated
basis as of such date, to (b) the aggregate outstanding amount of all
Advances under the Facilities as of such date (after giving effect to
all Borrowings, payments or prepayments of Advances made on such date).
"CONVERSION" has the meaning specified in Section 2.05(b).
"CONVERTED TERM B ADVANCE" has the meaning specified in
Section 2.05(b).
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"CONVERTED TERM B COMMITMENT" means that portion of each Term
B Lender's Term B Commitment that consists of Converted Term B
Advances.
"NEW TERM B ADVANCE" means that portion of the Term B Advances
that are not Converted Term B Advances.
"NEW TERM B LENDERS" means those Term B Lenders that have New
Term B Commitments.
"NEW TERM B COMMITMENT" means those Term B Commitments that
are not Converted Term B Commitments.
"REMAINING TERM A ADVANCES" means those Term A Advances that
are not converted to Term B Advances pursuant to the Conversion.
"TRANSACTION COSTS" means the aggregate amount (which amount
shall in no event exceed $4,000,000 in the aggregate) of fees,
expenses, discounts or costs reasonably incurred in connection with the
negotiation, execution, delivery and consummation of Amendment No. 4
and with the other instruments and documents to be delivered in
connection with Amendment No. 4.: provided however that the aggregate
amount of Transaction Costs shall be reduced by an amount equal to the
sum of any amounts deducted from the advances required to be made by
New Term B Lenders, pursuant to Section 2.01(b).";
(hh) The definition of "Agents" in Schedule II is amended by
(i) inserting the word "and" immediately prior to the words "the Documentation
Agent" and (ii) deleting the words "and the Syndication Agent";
(ii) The definition of "Facility" in Schedule II is amended by
inserting the words "Term B Facility," immediately after the words "Offshore
Acquisition Facility,";
(jj) The definition of "Information Memorandum" in Schedule II
is amended by inserting the words "and Merrill Lynch, Pierce, Fenner & Smith
Incorporated" immediately following the word "Arranger" at each place it appears
therein;
(kk) The definition of "Lenders" in Schedule II is amended by
deleting the words "pursuant to Section 8.07";
(ll) The definition of "Loan Documents" in Schedule II is
amended by inserting the phrase ", in each case as amended," immediately after
the word "means";
(mm) The definition of "Material Adverse Change" in
Schedule II is amended by deleting the phrase "since September 30, 1999"
therefrom;
(nn) The definition of "Termination Date" in Schedule II is
amended by (i) deleting the word "and" immediately prior to the number "(iii)"
and replacing it with a comma, and (ii) inserting the following immediately
before the period at the end thereof "and (iv) for the purposes of the Term B
Facility, December 31, 2007";
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(oo) The following definitions in Schedule II are amended in
their entirety and replaced as follows:
" "APPLICABLE MARGIN" means a percentage per annum as set
forth below:
TERM A AND REVOLVING CREDIT FACILITIES TERM B FACILITY
------------------------------------------- -------------------------------------------
EURODOLLAR MARGIN BASE RATE MARGIN EURODOLLAR MARGIN BASE RATE MARGIN
----------------- ---------------- ----------------- ----------------
3.75% 2.75% 4.50% 3.50 %
For purposes of this definition, the Swing Line Advances are
extended pursuant to subfacilities of the Revolving Credit Facility.";
"JOINT LEAD ARRANGER" means the Lead Arranger.
"TERM ADVANCE" means a Term A Advance, an Offshore Acquisition
Advance or a Term B Advance.
"TERM B ADVANCE" has the meaning specified in Section 2.01(b).
"TERM B BORROWING" means a borrowing consisting of
simultaneous Term B Advances of the same Type made by the Term B
Lenders.
"TERM B COMMITMENT" means, with respect to any Term B Lender
at any time, the amount set forth opposite such Lender's name on
Schedule I-A hereto under the caption "Term B Commitment" or, if such
Lender has entered into one or more Assignment and Acceptances, set for
such Lender in the Register maintained by the Administrative Agent
pursuant to Section 8.07(d) as such Lender's "Term B Commitment", as
such amount may be reduced at or prior to such time pursuant to Section
2.05.
"TERM B FACILITY" means, at any time, the aggregate amount of
the Term B Lenders' Term B Commitments at such time. As of the date
hereof, the Term B Facility is equal to $47,500,000.
"TERM B LENDER" means any Lender that has a Term B Commitment.
"TERM B NOTE" means a promissory note of the Domestic Borrower
payable to the order of any Term B Lender, in substantially the form of
Exhibit A-5 attached hereto, evidencing the indebtedness of the
Domestic Borrower to such Lender resulting from the Term B Advances
made by such Lender, as amended.
"TERM BORROWING" means any Term A Borrowing, Offshore
Acquisition Borrowing or Term B Borrowing.
"TERM COMMITMENT" means any Term A Commitment, Offshore
Acquisition Commitment, or Term B Commitment.
"TERM FACILITY" means the Term A Facility, the Offshore
Acquisition Facility or the Term B Facility.
"TERM LENDER" means any Term A Lender, Offshore Acquisition
Lender or Term B Lender.
"TERM NOTE" means any Term A Note, Offshore Acquisition Note
or Term B Note.";
12
(pp) Schedule II is amended by deleting the definition
"Syndication Agent" in its entirety;
(qq) Schedule II is amended by moving the definitions of "Lead
Arranger" and "Book Manager" to their proper alphabetical position; and
(rr) The Credit Agreement is amended by inserting Exhibit
A-5 - Form of Term B Note, attached hereto as Exhibit A, in proper numerical
order;
SECTION 2. Conditions of Effectiveness. This Amendment No. 4
shall become effective as of the date first above written (but in no event shall
such date occur after January 2, 2003) (the "AMENDMENT NO. 4 EFFECTIVE DATE")
when, and only when,
(a) the Administrative Agent shall have received the following
in form and substance satisfactory to the Administrative Agent and in sufficient
copies for each Lender Party:
(i) counterparts of this Amendment No. 4 executed by the
undersigned and each Required Lender;
(ii) the Consent attached hereto, executed by each
Subsidiary Guarantor;
(iii) a certificate of the Domestic Borrower and each
Domestic Subsidiary Guarantor, signed on behalf of
each such Loan Party by a Responsible Officer, dated
the Amendment No. 4 Effective Date (the statements
made in which certificate shall be true on and as of
the Amendment No. 4 Effective Date), certifying as to
(A) an attached true, complete and correct
copy of a certificate of the Secretary of State of
the jurisdiction of each such Loan Party, dated
reasonably near the Amendment No. 4 Effective Date,
certifying (A) as to a true and correct copy of the
charter of such Loan Party and each amendment thereto
on file in such Secretary of State's Office and (B)
that such amendments are the only amendments to such
Loan Party's charter on file in such Secretary of
State's Office,
(B) an attached, true, correct and complete
copy of the bylaws of such Loan Party as in effect on
the date on which the resolutions referred to in
Section 2(a)(iii)(C) were adopted and on the
Amendment No. 4 Effective Date,
(C) an attached, true, correct and complete
copy of the resolutions of the Board of Directors of
such Loan Party authorizing the execution, delivery
and performance by such Loan Party of each of the
foregoing Loan Documents to which it is a party,
(D) the due incorporation and good standing
or valid existence of such Loan Party as a
corporation organized under the laws of the
jurisdiction of its incorporation, and the absence of
any proceeding for the dissolution or liquidation of
such Loan Party,
13
(E) the names and true signatures of the
officers of such Loan Party authorized to sign each
Loan Document to which it is or is to be a party,
(F) the truth in all material respects of
the representations and warranties contained in the
Loan Documents as though made on and as of the
Amendment No. 4 Effective Date, and
(G) the absence of any event occurring and
continuing, or resulting from the making of such Term
B Advance, that constitutes a Default;
(iv) a Notice of Borrowing relating to such Term B
Advance;
(v) a favorable opinion of Fried, Frank, Harris, Shriver
& Jacobson, counsel for the Loan Parties as to the
valid existence and good standing of the New York and
Delaware Loan Parties, their due power and authority
to execute this Amendment No. 4, and this Amendment
No. 4 representing the legal, valid, and binding
obligation of the Domestic Borrower (it being
acknowledged and agreed that these opinions will be
subject to customary assumptions and limitations),
and as to such additional matters as may arise and be
reasonably requested by the Administrative Agent;
(vi) 6-year pro forma consolidated and consolidating
projections, including pro forma income statements,
cash flow statements and balance sheets, as well as a
balance sheet as of September 30, 2002, after giving
pro forma effect to Amendment No. 4; and
(vii) a certificate from the chief financial officer of the
Domestic Borrower with respect to the solvency (on a
consolidated basis) of the Domestic Borrower and its
Subsidiaries both immediately before and immediately
after the consummation of the transactions to occur
with the making of such Term B Advance;
and
(b) the following events shall have occurred:
(i) the conditions set forth in Section 2(a) above have
been satisfied;
(ii) the Total Term B Commitment shall be equal to or
greater than $30 million;
(iii) on the date of such Term B Advance, after giving
effect to Amendment No. 4:
(A) Consolidated EBITDA of the Domestic
Borrower for the twelve month period ended September
30, 2002 calculated on a pro forma basis after giving
effect to such Term B Advance, shall not be less than
$41 million;
14
(B) the ratio of Consolidated total Debt for
Borrowed Money of the Domestic Borrower and its
Subsidiaries as of September 30, 2002, to
Consolidated EBITDA ended September 30, 2002,
calculated on a pro forma basis after giving effect
to such Term B Advance, shall be equal to or less
than 5.75:1;
(C) the ratio of the sum of (1) Consolidated
total Debt for Borrowed Money of the Domestic
Borrower and its Subsidiaries less (2) Subordinated
Debt, in each case as of September 30, 2002, to
Consolidated EBITDA ended September 30, 2002,
calculated on a pro forma basis after giving effect
to such Term B Advance, shall be equal to or less
than 2.15:1;
(D) neither Moody's nor Standard & Poor's
shall have lowered its credit rating or outlook for
the Facility, or any other obligations of the
Domestic Borrower, from ratings in effect on
September 30, 2002;
(iv) there shall not have occurred or become known any
Material Adverse Change since December 31, 2001; and
(v) the payment to the Administrative Agent of all
accrued and unpaid fees, costs and expenses of the
Administrative Agent including, without limitation,
the accrued and unpaid fees and expenses of counsel
to the Administrative Agent and Lead Arranger, and
the fees, costs and expenses payable pursuant to
Section 4 below.
SECTION 3. Effect on Credit Agreement. (a) On and after the
effectiveness of this Amendment No. 4, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof" or words of like import referring to the
Credit Agreement, and each reference in the Notes and each of the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as amended by this Amendment No. 4. The execution, delivery
and effectiveness of this Amendment No. 4 shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of any Lender
or the Agent under any of the Loan Documents, nor constitute a waiver of any
provision of any of the Loan Documents.
(b) Each party hereto hereby acknowledges and consents to the
amendment to the Credit Agreement and the terms and provisions thereof on the
terms set forth in this Amendment No. 4. Each party hereto hereby reaffirms the
covenants and agreements contained in each Loan Document and confirms that each
Loan Document, as specifically amended by Amendment No. 4 in the case of the
Credit Agreement, is and shall continue to be in full force and effect and the
same are hereby ratified and confirmed in all respects, except that upon the
effectiveness of this Agreement, all references contained therein to the "Credit
Agreement" shall mean the Credit Agreement as amended by Amendment No. 4.
SECTION 4. Payment of Fees. The Domestic Borrower agrees to
pay on demand all reasonable fees, costs and expenses (including, without
limitation, as separately agreed to in writing) of the Administrative Agent in
connection with the preparation, execution,
15
SECTION 5. delivery and administration, modification and
amendment of this Amendment No. 4 and the other instruments and documents to be
delivered hereunder (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent) in accordance with the terms
of Section 8.04 of the Credit Agreement.
SECTION 6. Execution in Counterparts. This Amendment No. 4 may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment No. 4 by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment No. 4.
SECTION 7. Governing Law. This Amendment No. 4 shall be
governed by, and construed in accordance with, the laws of the State of
New York.
IN WITNESS WHEREOF, the undersigned have caused this Amendment
No. 4 to be executed and delivered by their duly authorized officer as of the
date first above written.
Domestic Borrower: SOVEREIGN SPECIALTY CHEMICALS, INC.
By /s/ Terry D. Smith
------------------------------------------
Name: Terry D. Smith
Title: Vice President
Offshore Borrowers: SOVEREIGN SPECIALTY CHEMICALS LIMITED
By /s/ Louis M. Pace
------------------------------------------
Name: Louis M. Pace
Title: Director
SOVEREIGN SPECIALTY CHEMICALS (S) PTE. LTD.
By: /s/ Louis M. Pace
------------------------------------------
Name: Louis M. Pace
Title: Director
Agreed as of the date first above written:
J.P. MORGAN SECURITIES INC.,
as Lead Arranger
By:
------------------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
as Administrative Agent and as a Lender
By: /s/ Lawrence Palumbo, Jr.
------------------------------------------
Name: Lawrence Palumbo, Jr.
Title: Vice President
BLACK DIAMOND INTERNATIONAL FUNDING, LTD
By: /s/ Alan Corkish
------------------------------------------
Name: Alan Corkish
Title: Director
BLACK DIAMOND CLO 1998-1 LTD.
By: /s/ Alan Corkish
------------------------------------------
Name: Alan Corkish
Title: Director
BLACK DIAMOND CLO 2000-1 LTD.
By: /s/ Alan Corkish
------------------------------------------
Name: Alan Corkish
Title: Director
THE BANK OF NOVA SCOTIA
By: /s/ Mara Sparrow
------------------------------------------
Name: Mara Sparow
Title: Director
MERRILL LYNCH CAPITAL CORPORATION
By: /s/ Lawrence Temlock
------------------------------------------
Name: Lawrence Temlock
Title: Vice President
NATIONAL CITY BANK
By: /s/ Dexter L. James
------------------------------------------
Name: Dexter L. James
Title:
TRS 1 LLC
By: /s/ Rosemary F. Dunne
------------------------------------------
Name: Rosemary F. Dunne
Title: Attorney-in-Fact
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Robert M. Kadlick
------------------------------------------
Name: Robert M. Kadlick
Title: Duly Authorized Signatory
Schedule I-A
[Schedule I-A - Term B Commitments]
EXHIBIT A
[Exhibit A-5 - Form of Term B Note]