ARCH CHEMICALS, INC.
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
Dated as of February 27, 2004
Re: Note Purchase Agreement dated as of March 20, 2002
and
$149,000,000 Senior Notes, Series A, due March 20, 2007
$62,000,000 Senior Notes, Series B, due March 20, 2009
To each of the Noteholders named
in Schedule I attached hereto
Ladies and Gentlemen:
Reference is made to the Note Purchase Agreement dated as of March 20,
2002 (the "Note Purchase Agreement") among Arch Chemicals, Inc., a Virginia
corporation (the "Company"), and the institutional investors named in Schedule
A attached thereto (the "Noteholders"), under and pursuant to which
$149,000,000 in aggregate principal amount of the Senior Notes, Series A, due
March 20, 2007 (the "Series A Notes") and $62,000,000 in aggregate principal
amount of the Senior Notes, Series B, due March 20, 2009 (the "Series B
Notes," and together with the Series A Notes, the "Notes") were originally
issued and sold by the Company to the Noteholders. Terms used but not
otherwise defined herein shall have the meanings set forth in the Note
Purchase Agreement.
The Company hereby agrees with you in this First Amendment to Note
Purchase Agreement (the "First Amendment") as follows; provided that in the
case of the amendments to the Note Purchase Agreement set forth in Section 1.1
and 1.5 of this First Amendment and the definitions of "Applicable Quarter",
"Series A Applicable Rate" and "Series B Applicable Rate" set forth in Section
1.4 of this First Amendment, such amendments shall not become effective unless
the Company shall have substantially completed the acquisition of the entity
disclosed and discussed in the presentation and telephone conference conducted
by the Company on February 13, 2004 with the Noteholders:
SECTION 1. AMENDMENTS TO NOTE PURCHASE AGREEMENT.
Section 1.1. Amendment to Section 10.1 (Limitation on Debt). Section
10.1(a) and Section 10.1(b) of the Note Purchase Agreement shall be and are
hereby amended in their entirety to read as follows:
"(a) the Consolidated Leverage Ratio to exceed (i) 3.50 to 1.00
as of the last day of each fiscal quarter on or prior to December
31, 2003, (ii) 4.25 to 1.00 as of the last day of the fiscal quarter
ending March 31, 2004, (iii) 4.00 to 1.00 as of the last day of the
fiscal quarter ending June 30, 2004, and (iv) 3.50 to 1.00 as of the
last day of each fiscal quarter thereafter;
(b) Consolidated Debt to at any time exceed (i) 55% of Total
Capitalization on or prior to December 31, 2003, (ii) 65% of Total
Capitalization, during the period beginning on January 1, 2004 to
and including June 30, 2004, (iii) 60% of Total Capitalization,
during the period beginning on July 1, 2004 to and including
September 30, 2004, and (iv) 55% of Total Capitalization, during the
period beginning on October 1, 2004 and at all times thereafter;
and".
Section 1.2. Amendment to Section 10.4 (Limitation on Liens). Section
10.4(i) of the Note Agreement shall be and is hereby amended in its entirety
as follows:
"(i) Liens granted by the Company and its Subsidiaries to
secure obligations incurred in connection with a Securitization
Transaction; provided that (i) such Liens shall extend solely to the
Receivables which are included in such Securitization Transaction
and (ii) the obligations secured by such Liens do not constitute
Debt of the Company or any Subsidiary;".
Section 1.3. Amendment to Schedule B (Definition of "Debt"). The
definition of Debt in Schedule B to the Note Purchase Agreement shall be and
is hereby amended by deleting the first four words of the last sentence of
such definition and clause (i) of such last sentence and substituting in lieu
thereof the following: "Notwithstanding anything herein to the contrary, Debt
of any Person shall not include (i) obligations arising under Securitization
Transactions which are not required under GAAP to appear as liabilities on the
consolidated balance sheet of the Company,".
Section 1.4. Amendment to Schedule B (Amended Definitions). The
definitions of "Applicable Quarter," "Securitization Transaction," "Series A
Applicable Rate" and "Series B Applicable Rate" in Schedule B to the Note
Purchase Agreement shall be and are hereby amended in their entirety to read
as follows:
"`Applicable Quarter' means each of the fiscal quarters of the
Company ending on March 31, 2004, June 30, 2004 and September 30,
2004."
-2-
"`Securitization Transaction' means the sale, assignment or
transfer of Receivables or interests therein by the Company or any
Subsidiary (a) to an SPE that funds the acquisition of such
Receivables or interests in whole or in part through the sale,
assignment, transfer, pledge, grant of a security interest in or
other disposition of such Receivables or interests (or
participations, beneficial interests or other debt or equity
securities that are to receive payments from, or represent interests
in, such Receivables or interests or the cash flows derived from
such Receivables or interests) to one or more investors, lenders or
other purchasers, including, without limitation, borrowings by such
SPE secured in whole or in part by such Receivables or interests, or
(b) directly to one or more investors or other purchasers."
"`Series A Applicable Rate' means the rate per annum equal to
7.94%; provided that the Series A Applicable Rate shall be 8.19% in
the case of a Tier One Interest Adjustment, and shall be 8.44% in
the case of a Tier Two Interest Adjustment. The interest adjustment
shall be determined in each case for the Applicable Quarter
immediately preceding the Determination Date for such quarter. Any
increase or decrease in the Series A Applicable Rate shall be in
effect from and including the first day of the fiscal quarter
immediately following the Applicable Quarter for which a
determination is made to and including the last day of such fiscal
quarter. Except for adjustments in the interest rate for the Series
A Notes in respect of any Applicable Quarter, the interest rate
borne by the Series A Notes shall be 7.94% per annum. If any
determination hereunder would result in both a Tier One Interest
Adjustment and a Tier Two Interest Adjustment, the Tier Two Interest
Adjustment shall be controlling."
"`Series B Applicable Rate' means the rate per annum equal to
8.24%; provided that the Series B Applicable Rate shall be 8.49% in
the case of a Tier One Interest Adjustment, and shall be 8.74% in
the case of a Tier Two Interest Adjustment. The interest adjustment
shall be determined in each case for the Applicable Quarter
immediately preceding the Determination Date for such quarter. Any
increase or decrease in the Series B Applicable Rate shall be in
effect from and including the first day of the fiscal quarter
immediately following the Applicable Quarter for which a
determination is made to and including the last day of such fiscal
quarter. Except for adjustments in the interest rate for the Series
B Notes in respect of any Applicable Quarter, the interest rate
borne by the Series B Notes shall be 8.24% per annum. If any
-3-
determination hereunder would result in both a Tier One Interest
Adjustment and a Tier Two Interest Adjustment, the Tier Two Interest
Adjustment shall be controlling."
Section 1.5 Amendment to Schedule B (Definitions - Addition of New
Definitions). Schedule B of the Note Agreement is hereby amended by the
addition thereto of the following new definitions which shall read as follows:
"`Tier One Interest Adjustment' shall mean either (x) the
Consolidated Leverage Ratio was greater than 3.5 but was equal to or
less than 4.0 as of the last day of the Applicable Quarters ending
March 31, 2004 or June 30, 2004, and/or (y) Consolidated Debt was
greater than 55% but was equal to or less than 60% of Total
Capitalization at any time during the Applicable Quarters ending
March 31, 2004, June 30, 2004 or September 30, 2004."
"`Tier Two Interest Adjustment' shall mean either (x) the
Consolidated Leverage Ratio was greater than 4.0 but was equal to or
less than 4.25 as of the last day of the Applicable Quarter ending
March 31, 2004 and/or (y) Consolidated Debt was greater than 60% but
was equal to or less than 65% of Total Capitalization at any time
during the Applicable Quarters ending March 31, 2004 or June 30,
2004."
SECTION 2. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that as of the date hereof:
Section 2.1. First Amendment is Legal and Authorized. (a) The execution
and delivery of the First Amendment by the Company and compliance by the
Company with all of the provisions of the Note Purchase Agreement, as amended
by this First Amendment --
(i) are within the corporate powers of the Company; and
(ii) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company, or any indenture or other
agreement or instrument to which the Company is a party or by which
the Company may be bound or result in the imposition of any Liens or
encumbrances on any property of the Company.
(b) The execution and delivery of the First Amendment has been duly
authorized by all necessary corporate action on the part of the Company (no
action by the stockholders of the Company being required by law, by the
Articles of Incorporation or By-laws of the Company or
-4-
otherwise, other than those actions which have been obtained or effected); and
the First Amendment has been duly executed and delivered by the Company, and
the Note Purchase Agreement, as amended by the First Amendment, constitutes
the legal, valid and binding obligation, contract and agreement 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).
(c) 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 First Amendment.
(d) No Default or Event of Default exists under the Note Purchase
Agreement.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THE FIRST AMENDMENT.
This First Amendment shall become effective as of the date (the
"Effective Date") upon which the following conditions have been satisfied:
(a) The Required Holders shall have delivered an executed
counterpart of this First Amendment;
(b) The Company shall have delivered to the Noteholders a
certificate of an authorized officer, dated as of the Effective Date, to
the effect that the representations and warranties set forth in Section 2
of this First Amendment are true and correct;
(c) Sarah A. O'Connor, General Counsel for the Company shall have
delivered an opinion in form and substance reasonably satisfactory to the
Noteholders and their special counsel to the effect that this First
Amendment constitutes the legal, valid and binding obligation of the
Company;
(d) The Company shall have paid a fee to each Noteholder in an
amount equal to .075% of the outstanding principal amount of the Notes
held by such Noteholder; and
(e) The Company shall have paid the fees, costs, expenses and
disbursements of Chapman and Cutler LLP, special counsel to the
Noteholders, incurred in connection with the consummation of the
transactions contemplated by this First Amendment.
SECTION 4. MISCELLANEOUS
Section 4.1. Ratification of Note Purchase Agreement. Except as herein
expressly amended, the Note Purchase Agreement is in all respects ratified and
confirmed. If and to the extent that any of the terms or provisions of the
Note Purchase Agreement is in conflict or
-5-
inconsistent with any of the terms or provisions of this First Amendment, this
First Amendment shall govern.
Section 4.2. No Legend Required. References in the Note Purchase
Agreement or in any Note, certificate, instrument or other document related to
or delivered in connection with the transactions contemplated by the Note
Purchase Agreement shall be deemed to be references to the Note Purchase
Agreement as amended hereby and as further amended from time to time.
Section 4.3. Successors and Assigns. This First Amendment shall be
binding upon the Company and its respective successors and assigns and shall
inure to the benefit of you and to the benefit of your successors and assigns,
including each successive holder or holders of any Notes.
Section 4.4. Counterparts. This First Amendment may be executed in any
number of counterparts, each executed counterpart constituting an original but
all together only one agreement. Signatures to this First Amendment may be
given by facsimile or other electronic transmission, and such signatures shall
be effective as originals.
Section 4.5. Governing Law. The Note Purchase Agreement as amended by
this First Amendment and the Notes shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law
of the State of New York 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.
Signature Pages Follow
-6-
IN WITNESS WHEREOF, the Company has executed this First Amendment to Note
Purchase Agreement as of the day and year first above written.
ARCH CHEMICALS, INC.
By: /s/ Louis Massimo
---------------------------------
Its Executive Vice President and Chief
Financial Officer
This First Amendment to Note Purchase Agreement is accepted and agreed to
as of the day and year first above written.
RELIASTAR LIFE INSURANCE COMPANY
SECURITY LIFE OF DENVER INSURANCE COMPANY
ING USA ANNUITY AND LIFE INSURANCE COMPANY
By:ING Investment Management LLC,
as Agent
By: /s/ Christopher P. Lyons
-----------------------------------
Name: Christopher P. Lyons
Title: Senior Vice President
This First Amendment to Note Purchase Agreement is accepted and agreed to
as of the day and year first above written.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Judith A. Gulotta
------------------------------------
Name: Judith A. Gulotta
Title: Director
This First Amendment to Note Purchase Agreement is accepted and agreed to
as of the day and year first above written.
NEW YORK LIFE INSURANCE COMPANY
By: /s/ Kathleen A. Haberkern
------------------------------------
Name: Kathleen A. Haberkern
Title: Investment Vice President
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By New York Life Investment Management
LLC, Its Investment Manager
By: /s/ Kathleen A. Haberkern
------------------------------------
Name: Kathleen A. Haberkern
Title: Director
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION INSTITUTIONALLY OWNED LIFE
INSURANCE SEPARATE ACCOUNT
By New York Life Investment Management
LLC, Its Investment Manager
By: /s/ Kathleen A. Haberkern
------------------------------------
Name: Kathleen A. Haberkern
Title: Director
This First Amendment to Note Purchase Agreement is accepted and agreed to
as of the day and year first above written.
NATIONWIDE LIFE INSURANCE COMPANY
NATIONWIDE LIFE AND ANNUITY INSURANCE
COMPANY
By: /s/ Mark W. Poeppelman
------------------------------------
Name: Mark W. Poeppelman
Title: Authorized Signatory
This First Amendment to Note Purchase Agreement is accepted and agreed to
as of the day and year first above written.
THE CANADA LIFE ASSURANCE COMPANY
By: /s/ Tad Anderson
------------------------------------
Name: Tad Anderson
Title: Manager, Investments, U.S.
Operations
By: /s/ Wayne Hoffman
------------------------------------
Name: Wayne Hoffman
Title: Senior Vice President,
Investments,
U.S. Operations
CANADA LIFE INSURANCE COMPANY OF AMERICA
By: /s/ Tad Anderson
------------------------------------
Name: Tad Anderson
Title: Manager, Investments, CLICA
By: /s/ Wayne Hoffman
------------------------------------
Name: Wayne Hoffman
Title: Senior Vice President,
Investments,
CLICA
This First Amendment to Note Purchase Agreement is accepted and agreed to
as of the day and year first above written.
ERIE INDEMNITY COMPANY, as attorney in fact,
for Erie Insurance Exchange
ERIE FAMILY LIFE INSURANCE COMPANY
ERIE INDEMNITY COMPANY
ERIE INSURANCE GROUP RETIREMENT TRUST
COMPANY
By: /s/ Douglas F. Ziegler
------------------------------------
Name: Douglas F. Ziegler
Title: Senior Vice President,
Treasurer & Chief Investment
Officer
This First Amendment to Note Purchase Agreement is accepted and agreed to
as of the day and year first above written.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By: /s/ Jed R. Martin
------------------------------------
Name: Jed R. Martin
Title: Investment Vice President
Private Placements
This First Amendment to Note Purchase Agreement is accepted and agreed to
as of the day and year first above written.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Douglas H. Allen
------------------------------------
Douglas H. Allen
By: /s/ Jerry D. Zinkula
------------------------------------
Jerry D. Zinkula
Authorized Signatories
ALLSTATE LIFE INSURANCE COMPANY OF NEW
YORK
By: /s/ Douglas H. Allen
------------------------------------
Douglas H. Allen
By: /s/ Jerry D. Zinkula
------------------------------------
Jerry D. Zinkula
Authorized Signatories
This First Amendment to Note Purchase Agreement is accepted and agreed to
as of the day and year first above written.
BENEFICIAL LIFE INSURANCE COMPANY
By: /s/ Robert R. Dalley
------------------------------------
Name: Robert R. Dalley
Title: Senior Vice President and CFO
ING USA Annuity and Life Insurance Company
c/o ING Investment Management LLC
Minneapolis, Minnesota 55401-2121
Security Life of Denver Insurance Company
c/o ING Investment Management LLC
Minneapolis, Minnesota 55401-2121
ReliaStar Life Insurance Company
c/o ING Investment Management LLC
Minneapolis, Minnesota 55401-2121
Metropolitan Life Insurance Company
New York, New York 10010-3690
New York Life Insurance Company
c/o New York Life Investment Management LLC
New York, New York 10010
New York Life Insurance and Annuity Corporation
c/o New York Life Investment Management LLC
New York, New York 10010
New York Life Insurance and Annuity Corporation
Institutionally Owned Life Insurance Separate Account
c/o New York Life Investment Management LLC
New York, New York 10010
Nationwide Life Insurance Company
Columbus, Ohio 43215-2220
Nationwide Life and Annuity Insurance Company
Columbus, Ohio 43215-2220
The Canada Life Assurance Company
Winnipeg, Manitoba
Canada R3C 3A5
Canada Life Insurance Company of America
c/o Great-West Life & Annuity Insurance Company
Greenwood, Colorado 80111
SCHEDULE I
(to First Amendment to Note Purchase Agreement)
Erie Indemnity Company
Erie, Pennsylvania 16530
Erie Family Life Insurance Company
Erie, Pennsylvania 16530
Erie Indemnity Company, as attorney in fact,
for Erie Insurance Exchange
Erie, Pennsylvania 16530
Erie Insurance Group Retirement Trust Company
Erie, Pennsylvania 16530
The Ohio National Life Insurance Company
Cincinnati, Ohio 45242
Allstate Life Insurance Company
Northbrook, Illinois 60062-7127
Allstate Life Insurance Company of New York
Northbrook, Illinois 60062-7127
Beneficial Life Insurance Company
Salt Lake City, Utah 84136
-2-