Exhibit 10(1)
AMENDMENT NO. 2
AMENDMENT NO. 2 (this "Agreement") dated as of February 1,
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2001 among:
SOLUTIA INC., a Delaware corporation (the "Company");
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each of the lenders (the "Lenders") listed on the
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signature pages hereof; and
CITIBANK, N.A., as administrative agent under the Credit
Agreement referred to below (in such capacity, together with its
successors in such capacity, the "Administrative Agent").
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The Company, the Lenders, the Syndication Agent and the
Administrative Agent are parties to an Amended and Restated Five Year
Multi-Currency Credit Agreement dated as of November 23, 1999 (as amended by
Amendment No. 1 thereto dated as of November 21, 2000, the "Credit
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Agreement"). The Company has requested the Lenders to amend the Credit
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Agreement in certain respects, and the Lenders are willing to so amend the
Credit Agreement, all on the terms and conditions set forth herein.
Accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in
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this Agreement, terms defined in the Credit Agreement are used herein as
defined therein.
Section 2. Amendment to Financial Covenants. Subject to
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the Administrative Agent's receipt of this Agreement, duly executed by each
of the Company, the Majority Lenders and the Administrative Agent, but
effective as of the date hereof:
A. Pricing Changes, Etc.
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(1) Definitions. Section 1.01 of the Credit
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Agreement is amended by adding the following definitions
in the appropriate alphabetic locations therein:
"Utilization Fee" has the meaning specified in
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Section 2.04(c).
"Utilization Fee Rate" has the meaning assigned
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to such term in Schedule 2A.
(2) Utilization Fee. The Credit Agreement is
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amended by adding the following as Section 2.04(c)
thereof:
"(c) Utilization Fee. The Company agrees
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to pay a utilization fee (the "Utilization Fee")
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in Dollars to the Administrative Agent for
account of each Lender, which shall accrue at the
Utilization Fee Rate on the daily aggregate
outstanding principal amount of the Advances of
such Lender for each day on which the aggregate
outstanding principal amount of the Advances
(including all B Advances) equals or exceeds an
amount equal to 33% of the Commitments. The
Utilization Fee shall be payable monthly in
arrears on the last Business Day of month and,
for each Lender, on the Commitment Termination
Date of such Lender. The Utilization Fees shall
be "other fees" payable to the Lenders for all
purposes
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
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of the Credit Agreement (including, without
limitation, for purposes of Sections 2.11(c)(ii),
2.12(b) and 2.15(g) thereof) and under Sections
2.13(a), 2.13(b) and 2.13(c) of the Credit
Agreement shall be treated in the same manner as
Facility Fees."
(3) Pricing Schedules. Schedules 2A and 2B to the
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Credit Agreement are amended to read in their entirety as
set forth on Schedules 2A and 2B hereto.
B. Financial Covenants. Section 5.03 of the Credit
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Agreement is amended to read in its entirety as follows:
"SECTION 5.03. Financial Covenants. So long as
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any Advance shall remain unpaid or any Lender shall have
any Commitment hereunder, the Company shall not:
(a) Debt to Adjusted EBITDA. Permit the
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Debt to Adjusted EBITDA Ratio to exceed:
(1) at any time on or prior to
June 30, 2001, 3.50 to 1.00;
(2) at any time from (and
including) July 1, 2001 to (and
including) December 30, 2001, 3.75 to
1.00; and
(3) at any time from and after
December 31, 2001, 3.50 to 1.00.
(b) Interest Coverage Ratio. Permit the
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Interest Coverage Ratio to be less than:
(1) at any time on or prior to
(and including) December 31, 2000, 4.50
to 1.00;
(2) at any time from (and
including) January 1, 2001 to (and
including) June 30, 2001, 3.75 to 1.00;
(3) at any time from (and
including) July 1, 2001 to (and
including) September 30, 2001, 3.50 to
1.00;
(4) at any time from (and
including) October 1, 2001 to (and
including) December 31, 2001, 3.75 to
1.00;
(5) at any time from (and
including) January 1, 2002 to (and
including) March 31, 2002, 4.00 to 1.00;
and
(6) at any time from and after
April 1, 2002, 4.50 to 1.00."
Section 3. Representations and Warranties. The Company
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hereby represents and warrants to the Administrative Agent and the Lenders
that:
(a) the representations and warranties contained in the
Credit Agreement (except the Excluded Representations) are correct
on and as of the date hereof, as though made on and as of
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
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such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific
date); and
(b) no event has occurred and is continuing that
constitutes a Default or an Event of Default.
Section 4. Miscellaneous. Except as herein provided, the
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Credit Agreement shall remain unchanged and in full force and effect. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be governed by, and construed in accordance with, the law of
the State of New York.
[remainder of page intentionally blank]
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
SOLUTIA INC.
By: /s/ Kevin Wilson
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Name: Kevin Wilson
Title: Vice President & Treasurer
CITIBANK, N.A.,
as Administrative Agent
By: /s/ Wajeeh Faheem
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Name: Wajeeh Faheem
Title: Vice President
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
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COMMITMENTS THE LENDERS
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$78,333,333.31 CITIBANK, N.A.
By: /s/ Wajeeh Faheem
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Name: Wajeeh Faheem
Title: Vice President
$125,000,000.00 BANK OF AMERICA, N.A.
By: /s/ David Noda
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Name: David Noda
Title: Managing Director
$46,666,666.67 THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
By: /s/ H. Miyashiro
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Name: Hisashi Miyashiro
Title: Deputy General Manager
$46,666,666.67 THE CHASE MANHATTAN BANK
By: /s/ Lawrence Palumbo, Jr.
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Name: Lawrence Palumbo, Jr.
Title: Vice President
$46,666,666.67 KBC BANK N.V.
By: /s/ R. Snauffer
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Name: Robert Snauffer
Title: First Vice President
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
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$46,666,666.67 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Carl J. Mehldau, Jr.
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Name: Carl J. Mehldau, Jr.
Title: Vice President
$46,666,666.67 THE NORTHERN TRUST COMPANY
By: /s/ A. Bhagwat
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Name: Ashish S. Bhagwat
Title: Second Vice-President
$46,666,666.67 ROYAL BANK OF CANADA
By:
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Name:
Title:
$46,666,666.67 WACHOVIA BANK, N.A.
By: /s/ Robert Wilson
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Name: Robert Wilson
Title: Vice President
$30,000,000.00 BANKBOSTON
By: /s/ Renata Lucia Valgas Salgado
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Name: Renata Lucia Valgas Salgado
Title: Vice President
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
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$30,000,000.00 BANK ONE, N.A., MAIN OFFICE CHICAGO
By: /s/ William J. Oleferchik
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Name: William J. Oleferchik
Title: Director
$30,000,000.00 CREDIT AGRICOLE INDOSUEZ
By: /s/ Paul A. Dytrych
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Name: Paul A. Dytrych
Title: Vice President
Senior Relationship Manager
By: /s/ C. Hiatt
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Name: Charles Hiatt
Title: Vice President
Manager
$30,000,000.00 HSBC BANK USA
By: /s/ Christopher M. Samms
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Name: Christopher M. Samms
Title: Officer #9426, First V.P.
$30,000,000.00 MELLON BANK, N.A.
By: /s/ Charles Frankenberry
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Name: Charles E. Frankenberry
Title: Vice President
$30,000,000.00 FIRSTAR BANK, N.A.
By: /s/ Joseph P. Howard
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Name: Joseph P. Howard
Title: Vice President
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
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$30,000,000.00 THE SANWA BANK, LIMITED
By: /s/ Lee E. Prewitt
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Name: Lee E. Prewitt
Title: Vice President
$30,000,000.00 SOCIETE GENERALE
By: /s/ Eric E.O. Siebert, Jr.
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Name: Eric E.O. Siebert, Jr.
Title: Director
$30,000,000.00 THE SUMITOMO BANK, LIMITED
By: /s/ John H. Kemper
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Name: John H. Kemper
Title: Senior Vice President
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
SCHEDULE 2A
Pricing Grid
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"Applicable Margin" means, for any A Advance (whether
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denominated in Dollars or Euros) that is a Eurocurrency Rate Advance for any
period during which the Rated Securities are within any Rating Level set
forth below, the rate set forth below opposite the reference to such Rating
Level:
Rating Level Applicable Margin (p.a.)
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Rating Level 1 0.335%
Rating Level 2 0.425%
Rating Level 3 0.590%
Rating Level 4 0.770%
Rating Level 5 1.000%
Rating Level 6 1.200%;
provided that, if the ratings of the Rated Securities established by S&P and
Moody's shall fall within different Rating Levels, the Applicable Margin
shall be determined by reference to the higher of the two Rating Levels
(except that, if the lower such Rating Level is more than one Rating Level
below the higher such Rating Level, the Applicable Margin shall be
determined by reference to the Rating Level that is one Rating Level higher
than the lower such Rating Level). Each change in the Applicable Margin
resulting from a Rating Level Change shall be effective on the effective
date of such Rating Level Change.
"Facility Fee Rate" means, for any period during which the
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Rated Securities are within any Rating Level set forth below, the rate set
forth below opposite the reference to such Rating Level:
Rating Level Facility Fee Rate (p.a.)
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Rating Level 1 0.065%
Rating Level 2 0.075%
Rating Level 3 0.085%
Rating Level 4 0.105%
Rating Level 5 0.125%
Rating Level 6 0.175%;
provided that, if the ratings of the Rated Securities established by S&P and
Moody's shall fall within different Rating Levels, the Facility Fee Rate
shall be determined by reference to the higher of the two Rating Levels
(except that, if the lower such Rating Level is more than one Rating Level
below the higher such Rating Level, the Facility Fee Rate shall be
determined by reference to the Rating Level that is one Rating Level higher
than the lower such Rating Level). Each change in the Facility Fee Rate
resulting from a Rating Level Change shall be effective on the effective
date of such Rating Level Change.
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
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"Utilization Fee Rate" means, for any period during which
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the Rated Securities are within any Rating Level set forth below, the rate
set forth below opposite the reference to such Rating Level:
Rating Level Utilization Fee Rate (p.a.)
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Rating Level 1 0.125%
Rating Level 2 0.125%
Rating Level 3 0.125%
Rating Level 4 0.125%
Rating Level 5 0.125%
Rating Level 6 0.250%;
provided that, if the ratings of the Rated Securities established by S&P and
Moody's shall fall within different Rating Levels, the Utilization Fee Rate
shall be determined by reference to the higher of the two Rating Levels
(except that, if the lower such Rating Level is more than one Rating Level
below the higher such Rating Level, the Utilization Fee Rate shall be
determined by reference to the Rating Level that is one Rating Level higher
than the lower such Rating Level). Each change in the Utilization Fee Rate
resulting from a Rating Level Change shall be effective on the effective
date of such Rating Level Change.
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
SCHEDULE 2B
SOLUTIA INC.(1)
$800MM 5 YEAR REVOLVING CREDIT FACILITY
PRICING GRID
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LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6
BASIS FOR Long Term Senior Long Term Senior Long Term Senior Long Term Senior Long Term Senior Long Term Senior
PRICING(2) Unsecured Debt Unsecured Debt Unsecured Debt Unsecured Debt Unsecured Debt Unsecured Debt
Rated At Least A Rated Less Than Rated Less Than Rated Less Than Rated Less Than Rated Lower Than
By Standard & Level 1 But At Level 2 But At Level 3 But At Level 4 But At Level 5 Or Not
Poor's or A2 By Least A- By Least BBB+ By Least BBB By Least BBB- By Rated.
--
Moody's Standard & Poor's Standard & Poor's Standard & Poor's Standard & Poor's
or A3 By or Baa1 By or Baa2 By or Baa3 By
-- -- -- --
Moody's Moody's Moody's Moody's
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FACILITY FEE 6.5 bps 7.5 bps 8.5 bps 10.5 bps 12.5 bps 17.5 bps
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APPLICABLE 33.5 bps 42.5 bps 59.0 bps 77.0 bps 100 bps 120.0 bps
MARGIN
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DRAWN COST(3) LIBOR + 40.0 bps LIBOR + 50.0 bps LIBOR + 67.5 bps LIBOR + 87.5 bps LIBOR + 112.5 LIBOR +
bps 137.5 bps
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UTILIZATION FEE
USAGE GREATER 12.5 bps 12.5 bps 12.5 bps 12.5 bps 12.5 bps 25.0 bps
THAN 33%
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FULLY DRAWN LIBOR + 52.5 bps LIBOR + 62.5 bps LIBOR + 80.0 bps LIBOR + 100.0 LIBOR + 125.0 LIBOR + 162.5
COST(4) bps bps bps
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<FN>
(1) This pricing grid is intended to be a summary of the Applicable Margin, Facility Fee Rate and Rating Level definitions in the
Credit Agreement. In the event of any inconsistency between this pricing grid and the actual terms of the Credit Agreement
(including the definitions set forth on Schedule 2A), the terms of the Credit Agreement shall control and govern.
(2) If Solutia Inc. is split-rated and the ratings fall in different Rating Levels, the higher of the two Rating Levels will
apply (except that, if the lower such Rating Level is more than one Rating Level below the higher such Rating Level, the
Rating Level that is one Rating Level higher than the lower such Rating Level will apply).
(3) Facility Fee plus Applicable Margin.
(4) Drawn Cost plus Utilization Fee.
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)