Exhibit 99.2
------------
[EXECUTION COPY]
AMENDMENT NO. 3
AMENDMENT NO. 3 (this "Amendment No. 3") dated as of
---------------
November 15, 2001 among:
SOLUTIA INC., a Delaware corporation (the "Company");
-------
each of the lenders (the "Lenders") listed on the
-------
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").
--------------------
The Company, the Lenders, Bank of America, N.A, as
syndication agent (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, and Amendment No. 2 thereto dated as
of February 1, 2001, the "Credit Agreement"). The Company has requested the
----------------
Lenders to amend the Credit 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
-----------
this Amendment No. 3, terms defined in the Credit Agreement are used herein
as defined therein.
Section 2. Amendment. Subject to the satisfaction of the
---------
conditions set forth in Section 4 hereof, but effective as of the date
hereof:
2.01. Certain Defined Terms. Section 1.01 of the Credit
---------------------
Agreement is amended by adding the following definitions in the appropriate
alphabetic locations (in the case of any new definition) and amending in
their entirety the following definitions (to the extent already included in
Section 1.01 of the Credit Agreement):
"Adjusted EBITDA" means, for any period, the sum, for the
---------------
Company and its Consolidated Subsidiaries (determined on a
Consolidated basis without duplication in accordance with GAAP), of
the following: (a) net income (calculated before taxes, Interest
Expense, extraordinary and unusual items and income or loss
attributable to equity in Affiliates (other than Affiliates that
are Specified Joint Ventures or Consolidated Subsidiaries)) for
such period plus (b) depreciation and amortization (to the extent
deducted in determining net income) for such period plus (c)
impairments of goodwill (to the extent deducted in determining net
income) for such period; provided that:
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 2 -
(1) charges taken (including cash charges in an
aggregate amount not exceeding $44,000,000) and reserves
established by the Company and its Consolidated
Subsidiaries in connection with (x) the Astaris LLC
phosphate joint venture that the Company established with
FMC Corporation during 2000, (y) acquisitions and (z)
restructuring of existing operations (all on or prior to
December 31, 2000) in an aggregate amount not exceeding
$60,000,000 shall be added back to net income for such
period (to the extent such charges and reserves were
deducted in determining net income for such period);
(2) charges taken (including cash charges in an
aggregate amount not exceeding $5,000,000) and reserves
established by the Company and its Consolidated
Subsidiaries in connection with the divestiture of the
Solutia Acrilan business (all on or prior to December 31,
2001) in an aggregate amount not exceeding $35,000,000
shall be added back to net income for such period (to the
extent such charges and reserves were deducted in
determining net income for such period); and
(3) charges taken (including cash charges in an
aggregate amount not exceeding $58,000,000) and reserves
established by the Company, its Consolidated Subsidiaries
and Specified Joint Ventures in connection with (a)
restructuring of existing operations, (b) maintenance of
reserves for self-insurance and environmental remediation,
(c) asset impairments and (d) pension settlement (all on
or before December 31, 2002) in an aggregate amount not
exceeding $148,000,000 shall be added back to net income
for such period (to the extent such charges and reserves
were deducted in determining net income for such period).
"Astaris Administrative Agent" means Bank of America, N.A.
----------------------------
in its capacity, together with its successors in such capacity, as
Administrative Agent under the Astaris Credit Agreement.
"Astaris Credit Agreement" means the Five Year Credit
------------------------
Agreement dated as of September 14, 2000 among Astaris LLC, the
lenders named therein and the Astaris Administrative Agent.
References herein to the "Astaris Credit Agreement" shall, except
as otherwise provided herein, be references to the same as modified
and supplemented and in effect from time to time.
"Astaris Guaranty Agreement" means the Guaranty Agreement
--------------------------
dated as of September 14, 2000 by the Company in favor of Astaris
LLC and in favor of the lenders party to the Astaris Credit
Agreement and the Astaris Administrative Agent. References herein
to the "Astaris Guaranty Agreement" shall, except as otherwise
provided herein, be references to the same as modified and
supplemented and in effect from time to time.
"Co-gen Agent" means Citibank, N.A., in its capacity,
------------
together with its successors in such capacity, as Agent under the
Co-gen Participation Agreement.
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 3 -
"Co-gen Guaranty Agreement" means the Amended and Restated
-------------------------
Instrument Guaranty dated as of April 24, 1998 by the Company in
favor of State Street Bank and Trust Company and in favor of the
purchasers party to the Co-gen Participation Agreement. References
herein to the "Co-gen Guaranty Agreement" shall, except as
otherwise provided herein, be references to the same as modified
and supplemented and in effect from time to time.
"Co-gen Lease" means the Amended and Restated Lease dated
------------
as of April 24, 1998 between the Trustee and the Company.
References herein to the "Co-gen Lease" shall, except as otherwise
provided herein, be references to the same as modified and
supplemented and in effect from time to time.
"Co-gen Participation Agreement" means the Amended and
------------------------------
Restated Participation Agreement dated as of April 24, 1998 among
the Company, State Street Bank and Trust Company, as trustee,
certain financial institutions named as purchasers therein and the
Co-gen Agent. References herein to the "Co-gen Participation
Agreement" shall, except as otherwise provided herein, be
references to the same as modified and supplemented and in effect
from time to time.
"Collateral Agent" means Citibank, N.A., in its capacity
----------------
as Collateral Agent under the Intercreditor and Collateral Agency
Agreement.
"Debt Incurrence" means the incurrence by the Company or
---------------
any of its Subsidiaries of any Debt after the effectiveness of
Amendment No. 3 hereto, other than any such Debt permitted under
clauses (i) through (vii), clause (ix) or clause (x), of Section
5.02(g).
"Designated Letters of Credit" has the meaning specified
----------------------------
in the Intercreditor and Collateral Agency Agreement.
"Disposition" means any sale, assignment, transfer or
-----------
other disposition of any property (whether now owned or hereafter
acquired) by the Company or any of its Subsidiaries to any other
Person, excluding any sale, assignment, transfer or other
disposition of any property (x) sold or disposed of in the ordinary
course of business and on ordinary business terms or (y) in an
amount not in excess of $1,000,000.
"Dividend Payment" means any dividend or other
----------------
distribution (whether in cash, securities or other property) with
respect to any shares of any class of capital stock of the Company
or any of its Subsidiaries, or any payment (whether in cash,
securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such
shares of capital stock of the Company or any option, warrant or
other right to acquire any such shares of capital stock of the
Company.
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 4 -
"Domestic Subsidiary" means any Subsidiary of the Company
-------------------
organized under the laws of a State of the United States of
America.
"German Security Documents" means, collectively, one or
-------------------------
more assignments, security agreements and other instruments from
time to time executed and delivered by Solutia Germany and creating
Liens for the benefit of the Administrative Agent and the Lenders
as security for the obligations of Solutia Germany hereunder
covering its inventory and receivables, in each case as the same
shall be modified and supplemented and in effect from time to time.
"Hedging Agreement" means any interest rate protection
-----------------
agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate or
commodity price hedging arrangement.
"Hedging Obligations" has the meaning specified in the
-------------------
Security and Guarantee Agreement.
"Immaterial Subsidiary" means (a) any Domestic Subsidiary
---------------------
whose aggregate assets (measured by book value), as a percentage of
the total consolidated assets of the Company and its Subsidiaries,
is less than 1% and (b) Solutia Management Company, Inc. and
Solutia Investments LLC, so long as substantially all of the assets
of such entities consist of intercompany accounts receivable and
notes.
"Intercreditor and Collateral Agency Agreement" means an
---------------------------------------------
Intercreditor and Collateral Agency Agreement substantially in the
form of Exhibit A to Amendment No. 3 hereto between the Company,
each of the Subsidiary Guarantors, the Administrative Agent, the
Astaris Administrative Agent and the Co-gen Agent.
"Investment" means, for any Person: (a) the acquisition
----------
(whether for cash, property, services or securities or otherwise)
of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities of any other Person or any
agreement to make any such acquisition (including any "short sale"
or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making of
any deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of property from another
Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such Person), but excluding
any such advance, loan or extension of credit arising in connection
with the sale of inventory or supplies by such Person in the
ordinary course of business on customary terms; (c) the entering
into of any guarantee of, or other contingent obligation with
respect to, Debt or other liability of any other Person and
(without duplication) any amount committed to be advanced, lent or
extended to such Person; or (d) the entering into of any Hedging
Agreement.
"Letter of Credit Obligations" has the meaning specified
----------------------------
in the Security and Guarantee Agreement.
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 5 -
"Loan Documents" means, collectively, this Agreement, the
--------------
Notes and the Security Documents.
"Make-Whole Obligations" has the meaning specified in the
----------------------
Security and Guarantee Agreement.
"Mortgages" means, collectively, one or more instruments
---------
of Mortgage, Deed of Trust, Assignment of Rents, Security Agreement
and Fixture Filing executed by the Company in favor of the
Collateral Agent for the benefit of the Secured Parties (or in
favor of a trustee for the benefit of the Collateral Agent and the
Secured Parties) and covering the properties identified in Schedule
3 to Amendment No. 3 hereto.
"Net Cash Proceeds" means:
-----------------
(i) in the case of any Disposition, the aggregate amount
of all cash payments received by the Company and its Subsidiaries
directly or indirectly in connection with such Disposition;
provided that (a) Net Cash Proceeds shall be net of (i) the amount
--------
of any legal, title and recording tax expenses, commissions and
other fees and expenses paid by the Company and its Subsidiaries in
connection with such Disposition and (ii) any Federal, state and
local income or other taxes estimated to be payable by the Company
and its Subsidiaries as a result of such Disposition and (b) Net
Cash Proceeds shall be net of any repayments by the Company or any
of its Subsidiaries of Debt to the extent that (i) such Debt is
secured by a Lien on the property that is the subject of such
Disposition (other than a Lien that is junior to any Lien of the
Lenders in such property) and (ii) the transferee of (or holder of
a Lien on) such property requires that such Debt be repaid as a
condition to the purchase of such property; and
(ii) in the case of any Debt Incurrence, the aggregate
amount of all cash received by the Company and its Subsidiaries in
respect of such Debt Incurrence net of reasonable expenses incurred
by the Company and its Subsidiaries in connection therewith.
"Obligors" means, collectively, the Company, Solutia
--------
Germany and the Subsidiary Guarantors.
"Permitted Investments" shall mean: (a) direct obligations
---------------------
of the United States of America, or of any agency thereof, or
obligations guaranteed as to principal and interest by the United
States of America, or of any agency thereof, in either case
maturing not more than 90 days from the date of acquisition
thereof; (b) certificates of deposit or time deposits issued by any
bank or trust company organized under the laws of the United States
of America or any state thereof and having capital, surplus and
undivided profits of at least $500,000,000, maturing not more than
90 days from the date of acquisition thereof; (c) fully
collateralized repurchase agreements with a term of not more than
90 days for securities described in clause (a) of this definition
and entered into with a financial institution satisfying the
criteria described in clause (b) of this definition; and (d)
commercial paper rated A-1 or better or P-1 by Standard & Poor's
Ratings Services, a
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 6 -
division of McGraw-Hill Companies, Inc., or Moody's Investors
Services, Inc., respectively, maturing not more than 90 days from
the date of acquisition thereof; in each case so long as the same
(x) provide for the payment of principal and interest (and not
principal alone or interest alone) and (y) are not subject to any
contingency regarding the payment of principal or interest.
"Relevant Percentage" means, at any time, the percentage
-------------------
corresponding to the fraction (a) the numerator of which shall be
each of the following respectively (i) in the case of the Lenders,
the greater of the aggregate amount of Commitments or Advances
under this Agreement then outstanding, (ii) in the case of the
lenders under the Astaris Credit Agreement, the Make-Whole
Obligations then due and payable, (iii) in the case of the
purchasers under the Co-gen Participation Agreement, the Synthetic
Lease Obligations then due and payable, (iv) in the case of the
issuers of the Designated Letters of Credit, Letter of Credit
Obligations having unreimbursed drawings then due and payable or
(v) in the case of the holders of any Hedging Obligations, Hedging
Obligations then due and payable and (b) the denominator of which
shall be the sum of (i) the greater of the aggregate amount of
Commitments and Advances under this Agreement then outstanding,
(ii) the Make-Whole Obligations then due and payable, (iii) the
Synthetic Lease Obligations then due and payable, (iv) such Letter
of Credit Obligations having unreimbursed drawings then due and
payable and (v) such Hedging Obligations then due and payable.
"Security and Guarantee Agreement" means a Security and
--------------------------------
Guarantee Agreement substantially in the form of Exhibit B to
Amendment No. 3 hereto between the Company, each of the Subsidiary
Guarantors and the Collateral Agent.
"Security Documents" means, collectively, the Security and
------------------
Guarantee Agreement, the Mortgages, the German Security Documents
and all Uniform Commercial Code financing statements required by
this Agreement or any of the foregoing to be filed with respect to
the security interests in personal property and fixtures created
pursuant thereto, in each case as from time to time amended.
"Secured Parties" means, collectively, the Collateral
---------------
Agent, the Lenders and Administrative Agent hereunder, the lenders
and the Astaris Administrative Agent under the Astaris Credit
Agreement and the purchasers and the Co-gen Agent under the Co-gen
Participation Agreement (and, in respect of any Hedging
Obligations, any affiliate of a Lender that shall have entered into
the respective hedging agreement giving rise to such Hedging
Obligations).
"Senior Note Indentures" means, collectively, the
----------------------
indentures (or other comparable document or instrument) pursuant to
which the following notes or debentures of the Company have been
issued: 6.50% notes due 2002, 7.375% debentures due 2027, 6.72%
debentures due 2037 and 6.25% euro notes due 2005, as in effect on
the date hereof and without giving effect to any modifications or
supplements after the date hereof.
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 7 -
"Solutia Europe" means Solutia Europe S.A./N.V., a
--------------
corporation organized under the law of Belgium.
"Solutia Germany" means Solutia Germany GmbH and Co KG,
---------------
a partnership organized under the laws of the Federal Republic of
Germany.
"Solutia UK" means Solutia UK Holdings Ltd., a corporation
----------
organized under the law of England and Wales.
"Subsidiary Guarantors" means, collectively, (a) each of
---------------------
the Subsidiaries of the Company contemplated to be signatories, as
"Subsidiary Guarantors" to the Security and Guarantee Agreement (as
provided in the form thereof attached as Exhibit B to Amendment No.
3 hereto), (b) each Domestic Subsidiary of the Company that holds
any pledged shares of capital stock of Solutia Europe or Solutia UK
and (c) each other Subsidiary of the Company that becomes a party
to the Security and Guarantee Agreement as contemplated by Section
5.01(m).
"Synthetic Lease Obligations" has the meaning specified in
---------------------------
the Security and Guarantee Agreement.
2.02. Interest on A Advances. Section 2.07(a)(i) of the
----------------------
Credit Agreement is hereby amended to read in its entirety as follows:
"(i) Base Rate Advances. During such periods as such A
------------------
Advance is a Base Rate Advance, a rate per annum equal at all times
to the sum of (x) the Base Rate in effect from time to time plus
(b) the Applicable Margin in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September
and December during such periods and on the date such Base Rate
Advance shall be Converted or paid in full."
2.03. Interest Rate Determination; Changes in Rating
----------------------------------------------
Systems. The heading of Section 2.08 of the Credit Agreement is hereby
- -------
renamed from "Interest Rate Determination; Changes in Rating Systems" to
"Interest Rate Determination" and Section 2.08(g) of the Credit Agreement is
hereby deleted.
2.04. Prepayments, Etc. Section 2.10(a) of the Credit
----------------
Agreement is hereby amended to read in its entirety as follows:
"(a) Optional Payments of A Advances. Each Borrower may,
-------------------------------
upon notice by the Company to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment,
given to the Administrative Agent not later than 11:00 A.M. (New
York City time) on the proposed date in the case of Base Rate
Advances and at least two Business Days prior to the proposed date
in the case of Eurocurrency Rate Advances, and if such notice is
given by the Company the applicable Borrower shall, prepay the
outstanding principal amount of the A Advances owing by such
Borrower in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 8 -
amount prepaid; provided that (x) each partial prepayment shall be
in an aggregate principal amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and (y) in the event of
any such prepayment of a Eurocurrency Rate Advance, the applicable
Borrower and the Company shall be jointly and severally obligated
to reimburse the Lenders in respect thereof pursuant to Section
8.04(c); provided further that, anything herein to the contrary
notwithstanding, no prepayments may be applied to the Advances made
to Solutia Germany until all Advances made to the Company that are
at the time outstanding have been paid in full or are concurrently
paid in full."
2.05. Mandatory Prepayments. New Sections 2.10(e) and
---------------------
2.10(f) are hereby inserted into the Credit Agreement to read as follows:
"(e) Sale of Assets. Without limiting any obligation of
--------------
the Company to obtain the consent of the Majority Lenders pursuant
to Section 8.01 to any Disposition not otherwise permitted
hereunder, in the event that the Net Cash Proceeds of any
Disposition (herein, the "Current Disposition"), and of all
-------------------
Dispositions after the date of Amendment No. 3 hereto but prior to
the date of the Current Disposition as to which a prepayment has
not yet been made under this paragraph, shall exceed $10,000,000
then, no later than two Business Days prior to the occurrence of
the Current Disposition, the Company will deliver to the Lenders a
statement, certified by a senior financial officer of the Company,
in form and detail satisfactory to the Administrative Agent, of the
estimated amount of the Net Cash Proceeds of the Current
Disposition and of all such prior Dispositions and will, and will
cause each other Borrower to, prepay the Advances, and the
Commitments shall be subject to automatic reduction, in an
aggregate amount equal to 100% of the Net Cash Proceeds of the
Current Disposition and such prior Dispositions; provided that,
anything herein to the contrary notwithstanding, (i) the first
$150,000,000 (reduced by the aggregate amount of unsecured Debt
issued pursuant to Section 5.02(g)(x) in anticipation of the
payment of the 6.50% notes due 2002) of such Net Cash Proceeds
received after the date of Amendment No. 3 hereto shall not result
in a reduction of Commitments (but shall be required to be applied
to the prepayment of Advances hereunder) and (ii) no prepayments
may be applied to the Advances made to Solutia Germany until all
Advances made to the Company that are at the time outstanding have
been paid in full or are concurrently paid in full.
(f) Debt Incurrence. Upon any Debt Incurrence, the Company
---------------
will, and will cause each other Borrower to, prepay the Advances,
and the Commitments shall be subject to automatic reduction, in an
aggregate amount equal to 100% of the Net Cash Proceeds thereof;
provided that, anything herein to the contrary notwithstanding, no
prepayments may be applied to the Advances made to Solutia Germany
until all Advances made to the Company that are at the time
outstanding have been paid in full or are concurrently paid in
full.
Notwithstanding any other provision hereof to the contrary, if any amounts
are due and payable under this Agreement, the Astaris Guaranty Agreement,
the Co-gen Guaranty Agreement, the Co-gen Lease, any Designated Letters of
Credit, or any Hedging Agreements at the time of a
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 9 -
Disposition or upon any Debt Incurrence then prepayments in accordance with
Sections 2.10(e) and 2.10(f) are to be shared ratably by the Secured Parties
in accordance with their respective Relevant Percentages and the Commitments
shall be reduced only by the amount of prepayments allocable to this
Agreement."
2.06. Designation of Borrower. As contemplated by Section
-----------------------
4(e) hereof, the Company is designating Solutia Germany GmbH & Co. KG as a
Borrower under the Credit Agreement.
2.07. Financial Statements. Section 4.01(e) of the Credit
--------------------
Agreement is hereby amended to read in its entirety as follows:
"(e) Financial Statements, Etc.
--------------------------
(i) The consolidated statement of financial position of
the Company as at December 31, 2000 and the related consolidated
statements of income and cash flows of the Company for the twelve
months then ended, accompanied by an opinion of Deloitte & Touche
LLP, independent public accountants, and the consolidated balance
sheet of the Company as at September 30, 2001 and the related
consolidated statements of income and cash flows of the Company for
the nine months then ended, copies of which have been made
available to each Lender, present fairly, in all material respects
(subject, in the case of said balance sheet as at September 30,
2001, and said statements of income and cash flows for the nine
months then ended, to year-end audit adjustments) the consolidated
financial condition of the Company as at such dates and the
consolidated results of the operations of the Company for the
periods ended on such dates, all in accordance with generally
accepted accounting principles applied on a consistent basis.
(ii) Since September 30, 2001, there has been no material
adverse change in the consolidated financial condition or results
of operations of the Company and its Subsidiaries, taken as a
whole."
2.08. Affirmative Covenants.
---------------------
(1) Section 5.01(j) of the Credit Agreement is hereby
amended to read in its entirety as follows:
"(j) Use of Proceeds. Use the proceeds of the Advances
---------------
made to the Borrowers (other than Solutia Germany) hereunder solely
to finance the working capital needs and other general corporate
purposes of such Borrowers (including to support the commercial
paper programs of the respective Borrowers, to finance
acquisitions, treasury stock purchases and capital investments), in
each case in compliance with all applicable legal and regulatory
requirements and use the proceeds of the Advances made to Solutia
Germany directly or indirectly solely to prepay Advances made to
the Company; provided that (x) neither the Administrative Agent nor
any Lender shall have any responsibility as to the use of any such
proceeds and (y) none of the proceeds of any of the Advances shall be
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 10 -
applied to the prepayment of principal of other Debt of the Company
or any of its Subsidiaries (other than intercompany Debt or Debt
owing under the Astaris Guaranty Agreement), to the extent that the
aggregate amount of such prepayments after the date of Amendment
No. 3 hereto would exceed $20,000,000."
(2) New clauses (k) through (n) are hereby inserted into
Section 5.01 of the Credit Agreement to read as follows:
"(k) Mortgages. Take such action as shall be necessary to
---------
ensure that it delivers to the Collateral Agent each of the
following documents not later than the date specified below, each
of which shall be executed (and, where appropriate, acknowledged)
by Persons satisfactory to the Administrative Agent:
(i) not later than November 30, 2001 (or such
later date as shall be agreed to by the Administrative
Agent), one or more Mortgages covering the properties
identified in Schedule 3 to Amendment No. 3 hereto, in
each case duly executed and delivered by the Company in
recordable form (in such number of copies as the
Administrative Agent shall have requested), together with
any Uniform Commercial Code financing statements covering
fixtures, if applicable, in the appropriate county land
office(s), and evidence of payment by the Company of all
recording and stamp taxes, and filing fees, payable in
connection with the recording of such Mortgages and
financing statements; and
(ii) not later than November 30, 2001 (or such
later date as shall be agreed to by the Administrative
Agent), to the extent requested by the Administrative
Agent with respect to the Mortgages covering property in
any State, an opinion of local counsel in such State,
substantially in the form of Exhibit C to Amendment No. 3
hereto, covering such matters as the Administrative Agent
may reasonably request (and the Company hereby instructs
such counsel to deliver such opinions to the Lenders and
the Administrative Agent).
Each Mortgage executed and delivered by the Company shall equally
and ratably secure the obligations of the Company under the Loan
Documents, the Astaris Guaranty Agreement, the Co-gen Guaranty
Agreement, the Co-gen Lease, Designated Letters of Credit and the
Hedging Obligations; each Mortgage executed and delivered by any
Subsidiary Guarantor shall secure the obligations of such
Subsidiary Guarantor under the Security and Guarantee Agreement.
Anything herein or in the Mortgages to the contrary
notwithstanding, the aggregate amount of obligations under the Loan
Documents, under the Astaris Guaranty Agreement, under the Co-gen
Guaranty Agreement, under the Co-gen Lease, under the Designated
Letters of Credit and under the Hedging Obligations that constitute
"Debt" under the Senior Note Indentures entitled to the benefits of
the Mortgages taken as a whole shall not exceed $236,000,000.
(l) German Security Documents. Cause Solutia Germany to
-------------------------
take such action as shall be necessary to ensure that it delivers
to the Administrative Agent the documents,
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 11 -
agreements and other instruments contemplated in the definition of
the term "German Security Documents" in Section 1.01 not later than
November 30, 2001 (or such later date as shall be agreed to by the
Administrative Agent), each of which shall be executed (and, where
appropriate, acknowledged) by Persons satisfactory to the
Administrative Agent and, to the extent requested by the
Administrative Agent, one or more opinions of local counsel
covering such matters as the Administrative Agent may reasonably
request (and the Company hereby instructs such counsel to deliver
such opinions to the Lenders and the Administrative Agent).
(m) Further Assurances. Take, and cause each of its
------------------
Subsidiaries to take such action from time to time as shall
reasonably be requested by the Administrative Agent to effectuate
the purposes and objectives of this Agreement and the Security
Documents.
Without limiting the generality of the foregoing, the
Company will take such action, and will cause each of its Domestic
Subsidiaries (other than Immaterial Subsidiaries, unless such
Immaterial Subsidiary holds shares of stock of Solutia Europe or
Solutia UK) to take such action, from time to time as shall be
necessary to ensure that each Domestic Subsidiary (other than an
Immaterial Subsidiary) is a "Subsidiary Guarantor" under the
Security and Guarantee Agreement. Accordingly, in the event that
(x) any new Domestic Subsidiary (other than an Immaterial
Subsidiary) is formed or acquired by the Company after the date
hereof, or (y) any Subsidiary shall cease as of the end of any
fiscal quarter to be an "Immaterial Subsidiary", the Company will
cause such new Domestic Subsidiary (other than an Immaterial
Subsidiary), or such Subsidiary that as of the end of any fiscal
quarter ceases to be an "Immaterial Subsidiary", to become a
"Subsidiary Guarantor" and a "Securing Party" under the
Intercreditor and Collateral Agency Agreement and Security and
Guarantee Agreement pursuant to a Guarantee Assumption Agreement in
the form of Exhibit E to Amendment No. 3 hereto, and to deliver
such proof of corporate action, incumbency of officers, opinions of
counsel and other documents as is consistent with those delivered
by the Company pursuant to Section 3.01 hereof upon the Restatement
Date or as the Administrative Agent shall have requested (and the
Company hereby instructs such counsel to deliver such opinions to
the Secured Parties).
Furthermore, without limiting the generality of the
foregoing, the Company will, and will cause each of its
Subsidiaries to take such action from time to time (including
filing appropriate Uniform Commercial Code financing statements and
executing and delivering such assignments, security agreements and
other instruments) as shall be reasonably requested by the
Administrative Agent to create, in favor of the Collateral Agent
for the benefit of the Secured Parties, perfected security
interests and Liens in (i) all inventory and third-party accounts
receivable of the Company and the Subsidiary Guarantors, (ii) 65%
of the issued and outstanding voting stock and 100 % of all other
issued and outstanding stock of both Solutia Europe and Solutia UK
(it being understood that, in the case of Solutia Europe, shares of
treasury stock or stock of Solutia Europe held by Solutia Europe
shall not be deemed to be outstanding), and (iii) the property
identified in Schedule 3 to Amendment No. 3 hereto, as collateral
security for its
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 12 -
obligations hereunder, under the Astaris Guaranty Agreement, under
the Co-gen Guaranty Agreement, under the Co-gen Lease, in respect
of the Designated Letters of Credit, in respect of the Hedging
Obligations and under the Security Documents; provided that any
--------
such security interest or Lien shall be subject to the relevant
requirements of the Security Documents (and, in the case of the
Mortgages covering property identified in said Schedule 3, to the
provisions of the last paragraph of clause (k) above). In
connection with the pledge of the shares of stock of Solutia Europe
and Solutia UK, the Company will, and will cause each of its
Subsidiaries to, execute and deliver such pledge agreements and
other instruments, under the law of Belgium (in the case of Solutia
Europe) and England and Wales (in the case of Solutia UK) to ensure
that such pledge is valid, perfected and enforceable under such
law, as applicable.
Without limiting the generality of the foregoing, the
Company will, and will cause Solutia Germany to take such action
from time to time as shall be necessary for the Administrative
Agent and the Lenders to have the benefit of Liens, securing the
obligations, contemplated in the definition of the term "German
Security Documents" in Section 1.01; provided that any such
--------
security interest or Lien shall be subject to the relevant
requirements of the German Security Documents.
(n) Excess Cash. In the event that at any time the
-----------
aggregate amount of cash and cash equivalents held by the Company
and its Subsidiaries in the United States of America shall exceed
for three or more consecutive Business Days $25,000,000, or the
aggregate amount of cash and cash equivalents held by the Company
and all of its Subsidiaries throughout the world shall, without
duplication, exceed for three or more consecutive Business Days
$65,000,000 (or the equivalent thereof in foreign currencies),
then, to the extent of such excess in either of such events, prepay
(without reduction of Commitments) Advances in an amount at least
equal to such excess; provided that, anything herein to the
contrary notwithstanding, no prepayments may be applied to the
Advances made to Solutia Germany until all Advances made to the
Company that are at the time outstanding have been paid in full or
are concurrently paid in full."
2.09. Liens, Etc. Section 5.02(a) of the Credit Agreement
----------
is hereby amended to read in its entirety as follows:
"(a) Liens, Etc. Create or suffer to exist, or permit any
-----------
of its Consolidated Subsidiaries to create or suffer to exist, any
Lien on or with respect to any of its properties (other than, in
the case of the Company, the Company's treasury stock), whether now
owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income in order to
secure Debt or any other obligation, other than:
(i) (A) Liens for taxes, assessments,
governmental charges or levies or other amounts owed to
governmental entities other than for borrowed money; (B)
Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other
similar Liens arising in the ordinary course of business
securing obligations that are not overdue for a period of
more than 30
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 13 -
days or that are being contested in good faith; (C)
pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure
public or statutory obligations; (D) easements, rights of
way and other encumbrances on title to real property that
do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of
such property for its present purposes; and (E) Liens in
favor of a landlord arising in the ordinary course of
business,
(ii) purchase money Liens upon or in any
property, assets or stock acquired or held by the Company
or any Subsidiary in the ordinary course of business to
secure the purchase price or construction cost of such
property or to secure Debt incurred solely for the purpose
of financing the acquisition or construction of such
property whether incurred prior or subsequent to such
acquisition or construction, or Liens existing on such
property at the time of its acquisition (other than any
such Lien created in contemplation of such acquisition) or
extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that
no such Lien shall extend to or cover any property other
than the property being acquired, and no such extension,
renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being
extended, renewed or replaced,
(iii) Liens securing Debt, judgments and ERISA
claims existing on the date of Amendment No. 3 hereto and
identified in Schedule 1 to Amendment No. 3,
(iv) Liens created pursuant to the Security
Documents,
(v) additional Liens securing obligations in an
aggregate amount not exceeding $5,000,000 at any one time
outstanding,
(vi) a pledge of the proceeds of any unsecured
Debt issued pursuant to Section 5.02(g)(x) to secure the
6.50% notes due 2002,
(vii) the replacement, extension or renewal of
any Lien permitted by clauses (ii) and (iii) above upon or
in the same property theretofore subject thereto or the
replacement, extension or renewal (without increase in the
amount or change in any direct or contingent obligor) of
the amount secured thereby, and
(viii) intercompany Liens.
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 14 -
2.10. Mergers, Etc. Section 5.02(b) of the Credit
------------
Agreement is hereby amended to read in its entirety as follows:
"(b) Mergers, Etc.
------------
(i) Mergers and Consolidations. Not, and not permit any of
--------------------------
its Subsidiaries to, enter into any merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution), provided that any Subsidiary of
the Company may merge with and into the Company or any other
Subsidiary of the Company, so long as (x) after giving effect
thereto no Default shall have occurred and be continuing, (y) in
any such transaction involving a wholly owned Subsidiary, the
continuing or surviving corporation shall be a wholly owned
Subsidiary, and (z) if any such merger shall be between a
Subsidiary Guarantor and a Subsidiary not a Subsidiary Guarantor,
and such Subsidiary Guarantor is not the continuing or surviving
corporation, then the continuing or surviving corporation shall
have assumed all of the obligations of such Subsidiary Guarantor
hereunder and under the other Loan Documents.
(ii) Acquisitions. Not, and not permit any of its
------------
Subsidiaries to, acquire any business or property from, or capital
stock of, or be a party to any acquisition of, any Person except
for purchases of inventory and other property to be sold or
processed in the ordinary course of business, Investments permitted
under Section 5.02(h), and capital expenditures incurred in the
ordinary course of business of the Company and its Subsidiaries,
provided that (x) the Company and any Subsidiary may acquire a
business or property and capital stock from any Subsidiary, subject
to the requirements set forth in subclause (iii) below, (y) acquire
other business or property and capital stock in one or more
transactions not to exceed $10,000,000 individually or $15,000,000
in the aggregate and (z) repurchase shares of Class B Preferred
Stock of Solutia Management Company in an aggregate amount not
exceeding $1,500,000 from the holders of such shares.
(iii) Dispositions. Not, and not permit any of its
------------
Subsidiaries to, convey, sell, lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, any part of its
business or property, whether now owned or hereafter acquired
(including, without limitation, receivables and leasehold
interests, but excluding
(v) obsolete or worn-out property, tools or
equipment no longer used or useful in its business,
(w) any inventory, cash equivalents or other
property sold or disposed of in the ordinary course of
business and on ordinary business terms, including,
without limitation, sale of delinquent receivables for
collection purposes,
(x) the sale by the Company and its Subsidiaries
of any Subsidiary, business, property or Investment, so
long as not less than 80% of the
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 15 -
consideration to be received by the respective seller
thereof is in the form of cash to be received at the time
of the consummation of such sale,
(y) the sublease of two floors of the Company's
headquarter facility located at 575 Maryville Center
Drive, St. Louis, Missouri 63141, and any other lease,
transfer or other disposition of property that
individually is not in excess of $2,500,000 for each
particular piece of property the subject of any such other
lease, transfer or other disposition, and
(z) licensing arrangements entered into in the
ordinary course of business,
provided that any Subsidiary may sell, transfer, lease or otherwise
dispose of its assets to the Company or to another Subsidiary, so
long as (A) after giving effect thereto, no Default shall have
occurred and be continuing, (B) no such disposition may be made by
any wholly owned Subsidiary other than to the Company or another
wholly owned Subsidiary and (C) if any such disposition is by a
Subsidiary Guarantor to a Subsidiary of the Company not a
Subsidiary Guarantor, then such Subsidiary shall have assumed all
of the obligations of such Subsidiary Guarantor hereunder and under
the other Loan Documents."
2.11. Additional Covenants. New clauses (g) through (k)
--------------------
are hereby inserted into Section 5.02 of the Credit Agreement to read as
follows:
"(g) Debt. Create, incur, assume or permit to exist, or
----
permit any Consolidated Subsidiary to create, incur, assume or
permit to exist, any Debt, except:
(i) Debt created hereunder;
(ii) Debt existing on the date of Amendment No. 3
hereto and set forth in Schedule 4 thereto (including
Debt, if any, in respect of Designated Letters of Credit,
and drawn and undrawn amounts under agreements set forth
on such Schedule 4), and extensions, renewals and
replacements of any such Debt that do not increase the
outstanding principal amount thereof;
(iii) Debt of the Company to any Subsidiary and
of any Subsidiary to the Company or any other Subsidiary;
(iv) (x) guarantees by the Company of Debt of any
Subsidiary, (y) unsecured guarantees by the Company of up
to 50% of the Debt under the Astaris Credit Agreement, the
amount of Debt to be guaranteed pursuant to this
sub-clause (iv)(y) not to in any event be in a principal
amount greater than $137,500,000 and (z) unsecured
guarantees by the Company of the Debt under the Co-gen
Guaranty Agreement and under the Co-gen Lease, the amount
of Debt to be guaranteed pursuant to this sub-clause
(iv)(z) not to in any event be in a principal amount
greater than $33,000,000;
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 16 -
(v) obligations under the Astaris Guaranty
Agreement as in effect on the date of Amendment No. 3
hereto and without giving effect to any amendments or
supplements made to the Astaris Guaranty Agreement after
said date;
(vi) obligations under the Co-gen Guaranty
Agreement and the Co-gen Lease as in effect on the date of
Amendment No. 3 hereto and without giving effect to any
amendments or supplements made to the Co-gen Guaranty
Agreement or the Co-gen Lease after said date;
(vii) Debt incurred after the date of Amendment
No. 3 hereto and secured by any Lien permitted under
Section 5.02(a)(ii), provided that the aggregate principal
amount of Debt permitted by this subclause (vi) shall not
exceed $25,000,000 at any time outstanding;
(viii) Debt of the Company or any Subsidiary as
an account party in respect of trade letters of credit;
(ix) other unsecured Debt of the Company, the Net
Cash Proceeds of which are applied to the prepayment of
Advances, and the reduction of Commitments, hereunder;
(x) other unsecured Debt of the Company in an
aggregate principal amount not exceeding $150,000,000
(reduced by the aggregate amount of Net Cash Proceeds
applied in connection with Section 2.10(e)(i)) issued in
anticipation of the payment of the 6.50% notes due 2002;
and
(xi) other unsecured Debt in an aggregate
principal amount not exceeding $50,000,000 at any time
outstanding; provided that the aggregate principal amount
--------
of Debt of the Company's Subsidiaries permitted by this
sub-clause (xi) shall not exceed $10,000,000 at any time
outstanding.
(h) Investments. Not, and not permit any of its
-----------
Subsidiaries to, make or permit to remain outstanding any
Investments except:
(i) Investments outstanding on the date of
Amendment No. 3 hereto;
(ii) operating deposit accounts with banks;
(iii) cash and Permitted Investments;
(iv) Investments by the Company and its
Subsidiaries in the Company and its Subsidiaries;
(v) Hedging Agreements entered into by the
Company or its Subsidiaries in the ordinary course of
their business and not for speculative purposes;
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 17 -
(vi) Investments consisting of security deposits
with utilities and other like Persons made in the ordinary
course of business;
(vii) advances to employees in the ordinary
course of business;
(viii) Investments received in connection with
the bankruptcy or reorganization of suppliers, customers
and other Persons having obligations in favor of the
Company or any Subsidiary in settlement of delinquent
obligations of, and other disputes with customers,
suppliers and such other Persons arising in the ordinary
course of business;
(ix) Investments in Astaris (x) consisting of its
obligations under the Astaris Guaranty Agreement or (y)
consisting of payments made pursuant to the Astaris
Guaranty Agreement, as the Astaris Guaranty Agreement is
in effect on the date of Amendment No. 3 hereto and
without giving affect to any amendments or supplements
made to the Astaris Guaranty Agreement after said date;
(x) Investments (x) consisting of its obligations
under the Co-gen Guaranty Agreement and the Co-gen Lease
or (y) consisting of payments made pursuant to the Co-gen
Guaranty Agreement and the Co-gen Lease, as the Co-gen
Guaranty Agreement and the Co-gen Lease are in effect on
the date of Amendment No. 3 hereto and without giving
effect to any amendments or supplements made to the Co-gen
Guaranty Agreement or the Co-gen Lease after said date;
and
(xi) additional Investments up to but not
exceeding $25,000,000 in the aggregate.
For purposes of clause (xi) of this Section, the aggregate amount
of an Investment at any time shall be deemed to be equal to (A) the
aggregate amount of cash, together with the aggregate fair market
value of property, loaned, advanced, contributed, transferred or
otherwise invested that gives rise to such Investment minus (B) the
-----
aggregate amount of dividends, distributions or other payments
received in cash in respect of such Investment; the amount of an
Investment shall not in any event be reduced by reason of any
write-off of such Investment nor increased by any increase in the
amount of earnings retained in the Person in which such Investment
is made that have not been dividended, distributed or otherwise
paid out.
(i) Dividend Payments. Not, and not permit any of its
-----------------
Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Dividend Payment, except that (w) the Company
may declare and pay dividends with respect to its capital stock
payable solely in additional shares of its common stock, (x) the
Company may make Dividend Payments pursuant to and in accordance
with stock option plans or other benefit plans for management or
employees of the Company and its Subsidiaries, (y) so long as at
the time thereof and after giving effect thereto no Default shall
have occurred and be continuing, the Company may make Dividend
Payments up to but not exceeding $5,000,000 during
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 18 -
any fiscal year and (z) Solutia Management Company may declare and
pay annual dividends to holders of its Class B Preferred Stock in
an aggregate amount not exceeding $25,000, in any fiscal year.
Nothing herein shall be deemed to prohibit the payment of
pro rata dividends to its stockholders by any Subsidiary of the
Company to the Company or to any other Subsidiary of the Company.
(j) Restrictive Agreements. Not, and not permit any of its
----------------------
Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (x) the ability of the
Company or any Subsidiary to create, incur or permit to exist any
Lien upon any of its property or assets, or (y) the ability of any
Subsidiary to pay dividends or other distributions with respect to
any shares of its capital stock or to make or repay loans or
advances to the Company or any other Subsidiary or to Guarantee
Indebtedness of the Company or any other Subsidiary; provided that:
--------
(A) the foregoing shall not apply to (I)
restrictions and conditions imposed by law or by this
Agreement, (II) restrictions and conditions existing on
the date of Amendment No. 3 hereto and identified in
Schedule 5 thereto (but shall apply to any extension or
renewal of, or any amendment or modification expanding the
scope of, any such restriction or condition), (III)
customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is
permitted hereunder and (IV) restrictions or conditions no
more restrictive than those set forth in the Senior Note
Indentures; and
(B) clause (x) of the foregoing shall not apply
to (I) restrictions or conditions imposed by any agreement
relating to secured Debt permitted by this Agreement if
such restrictions or conditions apply only to the property
or assets securing such Debt and (II) customary provisions
in leases and other contracts restricting the assignment
thereof.
(k) Prepayment of Debt under Senior Notes. Not, and not
-------------------------------------
permit any of its Subsidiaries to, purchase, redeem, retire or
otherwise acquire for value, or set apart any money for a sinking,
defeasance or other analogous fund for the purchase, redemption,
retirement or other acquisition of, or make any voluntary payment
or prepayment of the principal of or interest on, or any other
amount owing in respect of, any Debt outstanding under the Senior
Note Indentures, except for (i) regularly scheduled payments,
prepayments or redemptions of principal and interest in respect
thereof required pursuant to the instruments evidencing such Debt
and (ii) the pledge of cash proceeds as permitted under Section
5.02(a)(vi) hereof."
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 19 -
2.12. Financial Covenants. Section 5.03 of the Credit
-------------------
Agreement is hereby amended to read in its entirety as follows:
"SECTION 5.03. Financial Covenants. So long as any Advance
-------------------
shall remain unpaid or any Lender shall have any Commitment
hereunder, the Company shall not:
(a) Debt to Adjusted EBITDA. Permit the Debt to
-----------------------
Adjusted EBITDA Ratio to exceed:
(1) at any time on or prior to (and
including) December 31, 2001, 5.00 to 1; and
(2) at any time from and after January
1, 2002, 5.50 to 1.
(b) Interest Coverage Ratio. Permit the Interest
-----------------------
Coverage Ratio to be less than:
(1) at any time on or prior to (and
including) December 31, 2001, 3.00 to 1; and
(2) at any time from and after January
1, 2002, 2.75 to 1."
2.13. Events of Default.
-----------------
(1) Section 6.01(b) of the Credit Agreement is hereby
amended to read in its entirety as follows:
"(b) Any representation or warranty made or
deemed to have been made by the Company herein or in
connection with this Agreement or any amendment to this
Agreement shall prove to have been incorrect in any
material respect when made and any representation or
warranty made or deemed to have been made by any Obligor
in connection with the Security Documents to which it is a
party shall prove to have been incorrect in any material
respect when made; or"
(2) Section 6.01(c) of the Credit Agreement is hereby
amended to read in its entirety as follows:
"(c) (i) The Company shall fail to perform or
observe any term, covenant or agreement contained in
Sections 5.01(a), 5.01(i)(iii), 5.01(j), 5.01(k), 5.01(l),
5.01(m), 5.01(n), 5.02 or 5.03; (ii) the Obligors shall
fail to perform or observe any term, covenant or agreement
contained in Section 6.01 of the Security and Guarantee
Agreement; or (iii) the Obligors shall fail to perform or
observe any other term, covenant or agreement contained in
this Agreement or any Security Document on its part to be
performed or observed if such failure shall remain
unremedied for 30 days after written notice thereof shall
have been given to the
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 20 -
Company by the Administrative Agent or any Lender (other
than any failure by the Company to comply with the terms
of Section 5.01(i)(iv), (v) or (vi)); or"
(3) Section 6.01 of the Credit Agreement is hereby amended
by inserting a new clause (h) to read as follows:
"(h) the Liens created by the Security Documents
shall at any time not constitute a valid and perfected
Lien on the collateral intended to be covered thereby (to
the extent perfection by filing, registration, recordation
or possession is required herein or therein) in favor of
the Collateral Agent, free and clear of all other Liens
(other than Liens permitted hereunder or under the
respective Security Documents), excluding, however,
collateral released pursuant to the terms thereof or
collateral deemed by the Administrative Agent not to be
material in relation to the collateral security provided
as a whole by the Security Documents, or, except for
expiration in accordance with its terms, any of the
Security Documents shall for whatever reason be terminated
or cease to be in full force and effect, or the
enforceability thereof shall be contested by the
respective Obligor party thereto;"
2.14. Schedules. Schedules 1 and 2A to the Credit
---------
Agreement are amended to read in their entirety as set forth on Schedules 1
and 2A hereto. Schedule 2B to the Credit Agreement is hereby deleted.
2.15. Excluded Representations. Each reference in the
------------------------
Credit Agreement and the Exhibits thereto to "(other than the Excluded
Representations)" is hereby deleted, and shall cease to be of any further
force or effect.
Section 3. Representations and Warranties. The Company
------------------------------
hereby represents and warrants to the Administrative Agent and the Lenders
that:
(a) the representations and warranties contained in the
Credit Agreement (giving effect to all amendments thereto
contemplated hereunder) are correct on and as of the date hereof,
as though made on and as of 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);
(b) the execution, delivery and performance by each
Obligor of the Security Documents to which it is a party are within
such Obligor's corporate powers, have been duly authorized by all
necessary corporate action and do not contravene (i) such Obligor's
charter, by-laws or other organizational documents or (ii) any law
or contractual restriction binding on or affecting such Obligor;
(c) no authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for due
execution of the Security Documents by the applicable Obligor,
except for filings and recordings in respect of the Liens created
pursuant to the Security Documents;
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 21 -
(d) the Security Documents, when duly executed and
delivered by each Obligor party thereto, will be legal, valid and
binding obligations of such Obligor enforceable against such
Obligor in accordance with their respective terms;
(e) none of Solutia Germany, Solutia Europe or Solutia UK
is a "Restricted Subsidiary" under the Senior Note Indentures; and
(f) after giving effect to this Amendment No. 3, no event
has occurred and is continuing that constitutes a Default or an
Event of Default.
Section 4. Conditions Precedent. As provided in Section 2,
--------------------
the amendments to the Credit Agreement set forth in Section 2 are subject
to, and will become effective upon, the satisfaction on or before November
15, 2001 of the following conditions precedent (including, with respect to
each document required below to be delivered, that the Administrative Agent
shall have received each such document, which shall be satisfactory in form
and substance to the Administrative Agent):
(a) Execution. This Amendment No. 3 shall have been duly
---------
executed and delivered by the Company, Lenders constituting the
Majority Lenders and the Administrative Agent as provided on the
signature pages hereof.
(b) Corporate Action. The Administrative Agent shall have
----------------
received certified copies of (i) the charter, by-laws or other
organizational documents of the Obligors (or, in the case of the
Company, a certificate to the effect that the neither of said
instruments have been modified or supplemented since the date of
the last certification of such instruments delivered to the
Administrative Agent), (ii) the resolutions of the Board of
Directors or other governing body of each of the Obligors
authorizing and approving this Amendment No. 3 and the Security
Documents, and (iii) all documents evidencing other necessary
corporate and other action and governmental approvals, if any, with
respect to this Amendment No. 3 and the Security Documents by the
Obligors.
(c) Security Documents. The Intercreditor and Collateral
------------------
Agency Agreement and the Security and Guarantee Agreement shall
have been duly executed and delivered by the Obligors, the
Collateral Agent and each other Person contemplated to be a party
thereto. In that connection, the Majority Lenders hereby authorize
the Administrative Agent to execute on its behalf the Intercreditor
and Collateral Agency Agreement and to appoint Citibank, N.A., as
Collateral Agent on its behalf, as contemplated in Section 2 of the
Intercreditor and Collateral Agency Agreement.
(d) Opinions. The Administrative Agent shall have received
--------
a favorable opinion of the General Counsel of the Company,
substantially in the form of Exhibit D hereto (and the Company
hereby instructs such counsel to deliver such opinion to the
Secured Parties).
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 22 -
(e) Designation Letter. The Administrative Agent shall
------------------
have received a Designation Letter designating Solutia Germany as a
Borrower duly executed by the Company and Solutia Germany.
(f) Borrowings by Solutia Germany. Solutia Germany shall
-----------------------------
have made borrowings in an amount at least equal to $50,000,000,
the proceeds of which shall be concurrently applied directly or
indirectly to prepay Advances of the Company that are then
outstanding.
(g) Termination of 364-Day Facility. The Administrative
-------------------------------
Agent shall have received evidence that all commitments to extend
credit under the 364-Day Multicurrency Credit Agreement dated as of
November 21, 2000 among the Company, certain lenders party thereto
and the Administrative Agent have been or are simultaneously being
terminated and that all advances thereunder and other amounts
payable in respect thereof have been or are simultaneously being
paid in full.
(h) Certain Consents and Authorizations. The requisite
-----------------------------------
lenders under the Astaris Credit Agreement shall have authorized
the execution and delivery of the Intercreditor and Collateral
Agency Agreement by the Astaris Administrative Agent and, to the
extent necessary under the Astaris Guaranty Agreement, shall have
executed and delivered a consent to the transactions contemplated
hereby pursuant to an instrument in form and substance satisfactory
to the Administrative Agent. In addition, the requisite purchasers
under the Co-gen Participation Agreement shall have authorized the
execution and delivery of the Intercreditor and Collateral Agency
Agreement by the Co-gen Agent and, to the extent necessary under
the Co-gen Guaranty Agreement and the Co-gen Lease, shall have
consented to the transactions contemplated hereby, and shall have
amended said facility in a manner consistent with the amendments
provided for herein, pursuant to an instrument in form and
substance satisfactory to the Administrative Agent.
(i) Other Documents. The Administrative Agent shall have
---------------
received such other documents as the Administrative Agent or
Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to
the Administrative Agent, may reasonably request.
Section 5. Miscellaneous. Except as herein provided, the
-------------
Credit Agreement shall remain unchanged and in full force and effect. This
Amendment No. 3 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 Amendment No. 3 by signing any such
counterpart. This Amendment No. 3 shall be governed by, and construed in
accordance with, the law of the State of New York.
[remainder of page intentionally blank]
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 23 -
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 3 to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
SOLUTIA INC.
By: /s/ Kevin Wilson
--------------------------------------
Name: C. Kevin Wilson
Title: Vice President and Treasurer
CITIBANK, N.A.,
as Administrative Agent
By: /s/ Wajeeh Faheem
--------------------------------------
Name: Wajeeh Faheem
Title: Vice President
390 Greenwich Street, 1st Floor
(202) 723-6769
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 24 -
THE LENDERS
-----------
CITIBANK, N.A. BANK OF AMERICA, N.A.
By: /s/ James N. Simpson By: /s/ David Noda
--------------------------------------- ------------------------------
Name: Name: David Noda
Title: Title: Managing Director
BANK ONE, N.A., MAIN OFFICE CREDIT AGRICOLE INDOSUEZ
CHICAGO
By: /s/ Suzanne Ergastolo By: /s/ Laurence F. Grant
--------------------------------------- ----------------------------
Name: Suzanne Ergastolo Name: Laurence F. Grant
Title: Director Title: Vice President
Senior Relationship
Manager
By: /s/ Thomas P. Gillis
------------------------------
Name: Thomas P. Gillis
Title: Vice President, Manager
FLEET NATIONAL BANK HSBC BANK USA
By: /s/ Esteban Arrondo By: /s/ Melissa Moy
--------------------------------------- ------------------------------
Name: Esteban Arrondo Name: Melissa Moy
Title: Vice President Title: First Vice President
12243
By:
---------------------------------------
Name:
Title:
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 25 -
JPMORGAN CHASE BANK, as successor to KBC BANK N.V.
The Chase Manhattan Bank and as
successor to Morgan Guaranty Trust
Company of New York
By: /s/ Lawrence Palumbo, Jr. By: /s/ R. Snauffer /s/ Eric Raskin
--------------------------------------- ---------------------------------------
Name: Lawrence Palumbo, Jr. Name: Robert Snauffer
Title: Vice President Title: First Vice President
Name: Eric Raskin
Title: Vice President
MELLON BANK, N.A. ROYAL BANK OF CANADA
By: /s/ Mark F. Johnston By: /s/ Sheryl L. Greenberg
--------------------------------------- ------------------------------
Name: Mark F. Johnston Name: Sheryl L. Greenberg
Title: Vice President Title: Senior Manager
SOCIETE GENERALE SUMITOMO MITSUI BANKING
CORPORATION
By: /s/ Eric Siebert By: /s/ John H. Kemper
--------------------------------------- ------------------------------
Name: Eric E.O. Siebert Jr. Name: John H. Kemper
Title: Director Title: Senior Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD., THE NORTHERN TRUST COMPANY
CHICAGO BRANCH
By: /s/ Shinichiro Munechika By: /s/ A. S. Bhagwat
--------------------------------------- ------------------------------
Name: Shinichiro Munechika Name: Ashish S. Bhagwat
Title: Deputy General Manager Title: Second Vice-President
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)
- 26 -
THE SANWA BANK, LIMITED U.S. BANK NATIONAL ASSOCIATION
By: /s/ Lee E. Prewitt By: /s/ Joseph P. Howard
--------------------------------------- ------------------------------
Name: Lee E. Prewitt Name: Joseph P. Howard
Title: Vice President Title: Vice President
WACHOVIA BANK, N.A.
By: /s/ Walter R. Gillikin
---------------------------------------
Name: Walter R. Gillikin
Title: Senior Vice President
AMENDMENT NO. 3 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)