REGISTRATION RIGHTS AGREEMENT
Execution Copy
THIS REGISTRATION RIGHTS AGREEMENT, dated as of June 18, 2009, by and among Solutia Inc., a
Delaware corporation (the “Company”), Harbinger Capital Partners Master Fund I, Ltd., an exempted
company organized under the laws of the Cayman Islands (the “Master Fund”) and Harbinger Capital
Partners Special Situations Fund, L.P., a Delaware limited partnership (the “Special Fund”, and
together with the Master Fund, the “HCP Funds”).
Whereas, concurrently with the execution and delivery of this Agreement, the HCP Funds, the
Company and Xxxxxxxxx & Company, Inc., as representative of the underwriters listed on Schedule
I of the Underwriting Agreement (the “Underwriters”), have entered into an Equity Underwriting
Agreement (the “Underwriting Agreement”), providing for the public offering (the “Public Offering”)
by the Underwriters of a certain number of shares of the common stock, par value $0.01 per share,
of the Company (the “Common Stock”);
Whereas, concurrently with the execution and delivery of this Agreement and as a condition to
the inducement of the Company’s willingness to enter into this Agreement, the HCP Funds have agreed
to execute and deliver a lock-up agreement in favor of the Company;
Now, therefore, in consideration of the foregoing, the covenants and agreements contained
herein and other good and valuable consideration, the receipt of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereby agree as follows:
AGREEMENT
1. Definitions. For the purposes of this Agreement, the following terms shall have the
following meanings
“Agreement” means this Registration Rights Agreement.
“Commission” means the Securities and Exchange Commission.
“Exchange Act” means the Securities Exchange Act of 1934, as amended and all applicable rules
and regulations promulgated thereunder.
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“Free Writing Prospectus” means a free writing prospectus, as defined in Rule 405 of the
Securities Act.
“Holder” means the HCP Funds or any record or beneficial owner of Registrable Securities who
becomes a party to this Agreement in accordance with Section 9 hereof.
“Holders of a Majority of the Registrable Securities” means the Person or Persons who are the
Holders of greater than 50% of the Registrable Securities then outstanding.
“Person” means any natural person, corporation, trust, association, company, partnership,
limited liability company, joint venture and other entity and any government, governmental agency,
instrumentality or political subdivision.
The terms “register,” “registered” and “registration” refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement by the Commission.
“Registration Date” means the date that is the thirtieth(30th) day after the date hereof.
“Registrable Securities” means the Requisite Number of shares of Common Stock, which number
shall be adjusted from time to time to reflect a spin-off, split-off, dividend, stock split or
other distribution or in connection with a combination of shares, reclassification, merger,
consolidation, reorganization or similar transaction and not for any additional acquisition of
shares of Common Stock by the Holders after the date hereof; provided, however, that such shares of
Common Stock or other securities shall constitute Registrable Securities only so long as (x) they
have not been sold by a Holder to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction pursuant to an effective registration statement
under the Securities Act, (y) they have not been sold by a Holder in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof
so that all transfer restrictions and restrictive legends with respect to such Common Stock or
other securities are removed upon the consummation of such sale and the seller and purchaser of
such Common Stock or other securities receive an opinion of counsel for the Company, which shall be
in form and content reasonably satisfactory to the seller and purchaser and their respective
counsel, to the effect that such Common Stock or other securities in the hands of the purchaser are
freely transferable without restriction or registration under the Securities Act in any public or
private transaction, or (z) they and all other shares of Common Stock (which amount of Common Stock
for purposes of this clause shall not be greater than that number of shares held after giving
effective to the Public Offering held by the signatories on the date hereof )are not capable of
being sold under Rule 144 in a single transaction without regard to the volume or manner of sale
requirements therein.
“Requisite Number” means the aggregate number of shares of Common Stock beneficially owned by
the Holders (within the meaning of Regulation 13D/G under the Exchange Act) in excess of ten
percent (10%) of the total number of shares of Common Stock issued and outstanding.
“Rule 144” means Rule 144 as promulgated under the Securities Act.
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“Securities Act” means the Securities Act of 1933, as amended and all applicable rules and
regulations promulgated thereunder.
“WKSI” means a well-known seasoned issuer as defined under Rule 405 of the Securities Act.
2. Shelf Registration.
(a) On or prior to the Registration Date, (i) the Company shall
file a shelf registration statement (a “Shelf Registration Statement”) pursuant to Rule 415 of the
Securities Act covering all of the Registrable Securities to enable the resale on a delayed or
continuous basis of such Registrable Securities (a “Shelf Demand Registration”) or (ii) if the
Company is a WKSI and has an outstanding effective Form S-3 Registration Statement, the Company
shall file a post-effective amendment to such Form S-3 Registration Statement covering all of the
Registrable Securities. Subject to Section 2(b), the Company shall use its commercially
reasonable best efforts to cause the Shelf Registration Statement to become effective within 75
days of the date hereof and to remain effective until the earlier of (x) the time all Registrable
Securities subject thereto have been sold and (y) the second anniversary of the initial effective
time, including by filing necessary post-effective amendments and prospectus supplements reasonably
required by a Holder, subject to any blackout periods described in Section 2(b). The
Holders of Registrable Securities participating in the Shelf Registration Statement shall have the
right to determine the plan and method of distribution for the Registrable Securities.
Notwithstanding anything contained herein to the contrary, the Holders of Registrable Securities
may not file, or request that the Company file, as required by Rule 424 of the Securities Act, more
than three (3) prospectuses or prospectus supplements in connection with any Shelf Registration
Statement in any thirty (30) day period.
(b) Notwithstanding the provisions of Section 2(a), if the Company has a Shelf
Registration Statement in effect pursuant to this Section 2, and the Company furnishes to
the Holders of Registrable Securities included in such Shelf Registration Statement a certificate
signed by the President and Chief Executive Officer of the Company stating that such officers have
made a good faith determination that a registration would (i) require the disclosure of material
nonpublic information concerning the Company, its business or prospects and that such disclosure
would be materially adverse to the Company, and/or (ii) materially interfere with a pending
transaction involving the Company or a subsidiary or affiliate of the Company, then, the Company
shall have the right to prevent Holders of Registrable Securities from selling Registrable
Securities pursuant to an effective Shelf Registration Statement for a period of not more than
sixty (60) days after the Company delivers such certificate to the applicable Holder and demands
that such Holder cease sales of securities under the Shelf Registration Statement (and during such
period the Company shall not be obligated to file another Shelf Registration Statement); provided,
that the Company may not exercise its rights under this Section 2(b) more than four times
in any consecutive 12-month period; and provided further, that the Company may not suspend the
effectiveness any Shelf
Registration Statement under this Section 2(b) for more than 60 days in the aggregate
during any consecutive 12-month period.
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(c) The Company may elect to register in any Shelf Registration Statement any additional
shares of Common Stock (including, without limitation, any shares of Common Stock to be distributed
in a primary offering made by the Company) so long as the inclusion of such Common Stock by the
Company would not (as determined in the reasonable discretion of Holders of Registrable Securities
to be included in the Shelf Registration Statement), (i) be reasonably likely to delay in any
material respect such Holder’s ability timely to sell the Registrable Securities pursuant to the
Shelf Registration Statement or (ii) cause a reduction in the number of Registrable Securities
included in the Shelf Registration Statement as a result of the Company’s election to so register
additional shares of Common Stock. Such election of the Company, if made, shall be made by the
Company giving written notice to the Holders of Registrable Securities to be included in the Shelf
Registration Statement stating (A) that the Company proposes to include additional shares of Common
Stock in such Shelf Registration Statement, and (B) the number of shares of Common Stock proposed
to be included.
3. Registration Procedures.
(a) If and whenever the Company is required by the
provisions of Section 2 to effect the registration of Registrable Securities under the
Securities Act, the Company, at its expense and as expeditiously as possible, shall use its
reasonable best efforts to effect such registration and so as to permit the sale of the applicable
Registrable Securities in accordance with the intended method or methods of distribution thereof in
conformity with any required time period set forth therein, and in connection therewith the Company
agrees to:
(i) in accordance with the Securities Act, prepare and file with the Commission a
registration statement with respect to such securities and use its reasonable best efforts
to cause such registration statement to become and remain effective until the earlier of
(x) the time all Registrable Securities subject thereto have been sold and (y) the fourth
anniversary of the initial effectiveness thereof, subject to the Company’s rights to cause
Holders of Registrable Securities to cease sales under an effective Shelf Registration
Statement pursuant to Section 2(b)), and prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus contained
therein as may be necessary to keep such registration statement effective and such
registration statement and prospectus accurate and complete and to permit the Holders of
Registrable Securities subject to such registration statement to sell such securities;
provided, that the Company shall provide counsel selected by the Holders of a majority of
the Registrable Securities being registered in such registration (“Holders’ Counsel”) with
a reasonable opportunity to participate in the preparation of such registration statement
and each prospectus included therein (and each amendment or supplement thereto) to be filed
with the Commission;
(ii) furnish, at its expense, to the Holders of securities participating in such
registration such number of copies of the registration statement and each amendment and
supplement thereto, preliminary prospectus,
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final prospectus, prospectus supplement and
such other documents as such Holders may reasonably request;
(iii) use its reasonable best efforts to register and qualify the securities covered
by such registration statement under such state securities or blue sky laws of such
jurisdictions as such participating Holders of Registrable Securities may reasonably
request, except that the Company shall not for any purpose be required to execute a general
consent to service of process or to qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified;
(iv) notify the Holders of Registrable Securities, promptly after it shall receive
notice thereof, of the date and time when (A) such registration statement and each
post-effective amendment thereto has become effective or a prospectus or supplement to any
prospectus relating to a registration statement has been filed and (B) any registration or
qualification has become effective under a state securities or blue sky law or any
exemption thereunder has been obtained;
(v) notify the Holders of Registrable Securities promptly of any request by the
Commission for the amending or supplementing of such registration statement or prospectus
or for additional information;
(vi) notify the Holders of Registrable Securities promptly upon learning of the
occurrence of any event as the result of which any such prospectus or any other prospectus
as then in effect would include an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein not
misleading;
(vii) prepare and file promptly with the Commission, and notify such Holders of
Registrable Securities prior to the filing of, such amendments or supplements to such
registration statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is required to be
delivered under the Securities Act, when any event has occurred as the result of which any
such prospectus or any other prospectus as then in effect would include an untrue statement
of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(viii) in case any of such Holders of Registrable Securities is required to deliver a
prospectus at a time when the prospectus then in circulation is not in compliance with the
Securities Act, the Company shall use reasonable best efforts to prepare promptly upon
request such amendments or supplements to such registration statement and such prospectus
as may be
necessary in order for such prospectus to comply with the requirements of the
Securities Act;
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(ix) advise such Holders of Registrable Securities and Holders’ Counsel (if any),
promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for that purpose, and promptly use its
reasonable best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
(x) list the Registrable Securities (and to maintain such listing during the pendency
of the relevant registration period) on any exchange on which the securities of the Company
of the same class with Registrable Securities are listed;
(xi) make available for inspection by any Holder of Registrable Securities covered by
the registration statement, Holders’ Counsel (if any) and any attorney, accountant or other
agent retained by any such Holder (each, an “Inspector” and collectively, the
“Inspectors”), during regular business hours and upon reasonable advance notice, all
financial and other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”) as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company’s officers, directors and
employees, and the independent public accountants of the Company, to supply all information
reasonably requested by any such Inspector in connection with such registration statement,
subject to obligations of confidentiality; and
(xii) prepare other offering materials in a form customarily used in similar
transactions or on the request of any Holder of Registrable Securities.
(b) Any Holder of Registrable Securities included for registration agrees to:
(i) provide the Company with such information and assistance as reasonably requested
by the Company to effect and maintain such registration under the Securities Act;
(ii) keep confidential that the Company has exercised its rights under
Section 2(b) and any other confidential information provided by the Company in
connection with this Agreement; and
(iii) comply, with the prospectus delivery requirements and other provisions of the
Securities Act and the Exchange Act, particularly Regulation M thereunder (or any successor
rules or regulations), in connection with any offering of Registrable Securities.
(c) Certain legal consequences arise from being named a selling securityholder in a
registration statement and related prospectus. Accordingly, each Holder of Registrable Securities
acknowledges that it has been advised to consult its
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own independent securities law counsel
regarding the consequences of demanding or requesting registration of Registrable Securities
hereunder or being named or not being named as a selling securityholder in the registration
statement and related prospectus.
4. Expenses.(a) With respect to each inclusion of shares of Registrable Securities in
a registration statement pursuant to Section 2, the Company agrees to bear all fees, costs
and expenses of such registration; provided, however, that the expenses of which are not required
to be paid by the Company pursuant to subparagraph (b) below shall be paid by the Holders
of Registrable Securities.
(b) The fees, costs and expenses of registration to be borne by the Company as provided in
paragraph (a) above, shall consist of (i) all registration, filing and FINRA fees, printing
expenses, fees and disbursements of counsel and accountants for the Company and (ii) all legal fees
and disbursements and other expenses of the Company complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be registered or qualified.
5. Indemnification.
(a) The Company hereby agrees to indemnify and hold harmless each
Holder of Registrable Securities which are included in a registration statement pursuant to the
provisions of this Agreement and each of such Holder’s officers, directors, partners, members,
legal counsel and accountants, and each Person who controls such Holder within the meaning of the
Securities Act, from and against, and agrees to reimburse such Holder, its officers, directors,
partners, members, legal counsel, accountants and controlling Persons with respect to, any and all
claims, actions (actual or threatened), demands, losses, damages, liabilities, costs and expenses
to which such Holder, its officers, directors, partners, members, legal counsel, accountants or
controlling Persons, may become subject under the Securities Act or otherwise, insofar as such
claims, actions, demands, losses, damages, liabilities, costs or expenses arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact contained in such
registration statement, any prospectus related thereto, or any amendment or supplement thereto,
(ii) the omission or alleged omission to state therein a material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading or
(iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act,
any federal or state securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any federal or state securities law in connection with the offering covered by
such registration statement; provided, however, that the Company will not be liable to any such
Person to (i) the extent that any such claim, action, demand, loss, damage, liability, cost or
expense is caused by an untrue statement or alleged untrue statement or omission or alleged
omission of material fact so made in strict conformity with written information furnished
by such Holder or such controlling Person specifically for use in the preparation thereof, or
(ii) for sales by Holders in violation of Section 2(b).
(b) Each Holder of shares of Registrable Securities which are included in a registration
statement pursuant to the provisions of this Agreement hereby agrees (severally and not jointly) to
indemnify and hold harmless the Company, its officers, directors, legal counsel and accountants and
each Person who controls the
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Company within the meaning of the Securities Act, from and against,
and agrees to reimburse the Company, its officers, directors, legal counsel, accountants and
controlling Persons with respect to, any and all claims, actions, demands, losses, damages,
liabilities, costs or expenses to which the Company, its officers, directors, legal counsel,
accountants or such controlling Persons may become subject under the Securities Act or otherwise,
insofar as such claims, actions, demands, losses, damages, liabilities, costs or expenses are
caused by any untrue or alleged untrue statement of any material fact contained in such
registration statement, any prospectus related thereto or any amendment or supplement thereto, or
are caused by the omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was so made in
reliance upon and in strict conformity with written information furnished by such Holder
specifically for use in the preparation thereof and such untrue statement or omission of material
fact was not subsequently corrected in a subsequent writing from such Holder to the Company at
least 36 hours prior to sale of Registrable Securities to the Person asserting the claim or loss;
provided, however, that the indemnity agreement contained in this subsection 5(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall not be unreasonably
withheld or delayed; provided, further, that the total amounts payable in indemnity by a Holder
under this subsection 5(b) shall not exceed the net proceeds received by such Holder in the
registered sale out of which such claim, action, demand, loss, damage, liability, cost, or expense
arises.
(c) Promptly after receipt by a party indemnified pursuant to the provisions of subsection
(a) or (b) of this Section 5 of notice of the commencement of any action
involving the subject matter of the foregoing indemnity provisions, such indemnified party will, if
a claim therefore is to be made against the indemnifying party pursuant to the provisions of
subsection (a) or (b), notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from any liability which
it may have to an indemnified party otherwise than under this Section 5 and shall not
relieve the indemnifying party from liability under this Section 5 unless such indemnifying
party is actually and materially prejudiced by such omission. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying parties similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different from, conflict with
or additional to those available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel (in which case the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified party or parties). Upon the
permitted assumption by the indemnifying party of the defense of such action, and approval by the
indemnified party of counsel, the
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indemnifying party shall not be liable to such indemnified party
under subsection (a) or (b) of Section 5 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense thereof (other than
reasonable costs of investigation) unless (i) the indemnified party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with the proviso to the
immediately preceding sentence, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified party within a
reasonable time, (iii) the indemnifying party and its counsel do not actively and vigorously pursue
the defense of such action, or (iv) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party. No indemnifying party shall be
liable to an indemnified party for any settlement of any action or claim without the consent of the
indemnifying party and no indemnifying party may unreasonably withhold its consent to any such
settlement. No indemnifying party will consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability with respect to such claim or
litigation.
(d) If the indemnification provided for in subsection (a) or (b) of this
Section 5 is held by a court of competent jurisdiction to be unavailable to a party to be
indemnified with respect to any claims, actions, demands, losses, damages, liabilities, costs or
expenses referred to therein, then each indemnifying party under any such subsection, in lieu of
indemnifying such indemnified party thereunder, hereby agrees to contribute to the amount paid or
payable by such indemnified party as a result of such claims, actions, demands, losses, damages,
liabilities, costs or expenses in such proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and of the indemnified party, on the other, in
connection with the statements or omissions which resulted in such claims, actions, demands,
losses, damages, liabilities, costs or expenses, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount any Holder of Registrable Securities shall be obligated
to contribute pursuant to this subsection (d) shall be limited to an amount equal to the
per share sale price multiplied by the number of shares of Registrable Securities sold by such
Holder pursuant to the registration statement which gives rise to such obligation to contribute
(less the aggregate amount of any damages which such Holder has otherwise been required to pay in
respect
of such claim, action, demand, loss, damage, liability, cost or expense or any substantially
similar claim, action, demand, loss, damage, liability, cost or expense arising from the sale of
such Registrable Securities).
(e) The parties agree that it would not be just and equitable if contribution pursuant to this
Section 5(e) were determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable
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considerations referred to in Section 5(d).
No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution hereunder from any Person who was not guilty of
such fraudulent misrepresentation.
(f) The obligations of the Company and Holders under this Section 5 shall survive the
completion of any offering of Registrable Securities in a registration statement and termination of
this Agreement.
6. Stockholder Information. The Company may request each Holder of Registrable
Securities as to which any registration is to be effected or has been effected pursuant to this
Agreement to furnish the Company with such information with respect to such Holder and the
distribution of such Registrable Securities, including a confirmation of the Requisite Number and
number of Registrable Securities held, as the Company may from time to time reasonably request in
writing and as shall be required by law or by the Commission in connection therewith, and each
Holder of Registrable Securities as to which any registration is to be effected pursuant to this
Agreement agrees to promptly furnish the Company with such information.
7. Forms. All
references in this Agreement to particular forms of registration statements are intended to
include, and shall be deemed to include, references to all successor forms which are intended to
replace, or to apply to similar transactions as, the forms herein referenced.
8. Agreements of
the Holders of Registrable Securities. Each Holder represents that it has not prepared or had
prepared on its behalf or used or referred to, and agrees that it will not prepare or have prepared
on it behalf or use or refer to, any Free Writing Prospectus, and has not distributed and will not
distribute any written materials in connection with the offer or sale of the Common Stock without
the prior express written consent of the Company.
9. Transfer of Registration Rights. The
rights to cause the Company to register securities granted to the Holders of Registrable Securities
pursuant to this Agreement may be transferred or assigned only to an affiliate or immediate family
member of a Holder of Registrable Securities; provided, that the transferee first agrees in writing
to be bound by the terms of this Agreement.
10. Miscellaneous.
10.1 Waivers and Amendments.
(a) With the written consent of the Holders of a Majority of the Registrable
Securities, the obligations of the Company and the rights of the Holders of Registrable Securities
under this Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or indefinitely), and with
such consent the Company may enter into a supplementary agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and obligations hereunder of
the Holders of Registrable Securities and the Company; provided, however, that no such waiver or
supplemental agreement shall reduce the aforesaid proportion of Registrable Securities, the Holders
of which are required to consent to any waiver or supplemental agreement, without the consent of
the Holders of all of the Registrable Securities.
(b) Upon the effectuation of each such waiver, consent or agreement of amendment or
modification, the Company agrees to give
prompt written
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notice thereof to the Holders of the Registrable Securities who
have not previously consented thereto in writing.
(c) Neither this Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is sought. Specifically,
but without limiting the generality of the foregoing, the failure of any party hereunder at any
time or times to require performance of any provision hereof by the Company shall in no manner
affect the right of such party at a later time to enforce the same. No waiver by any party of the
breach of any term or provision contained in this Agreement, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
10.2 Effect of Waiver or Amendment. Each Holder of Registrable Securities
acknowledges that by operation of Section 10.1 the Holders of a Majority of the Registrable
Securities will, subject to the limitations contained in Section 10.1, have the right and
power to diminish or eliminate certain rights of such Holder under this Agreement.
10.3 Rights of Holders of Registrable Securities. Each Holder of Registrable
Securities shall have the absolute right to exercise or refrain from exercising any right or rights
which such Holder may have by reason of this Agreement or any Registrable Security, including,
without limitation, the right to consent to the waiver of any obligation of the Company under this
Agreement and to enter into an agreement with the Company for the purpose of modifying this
Agreement or any
agreement effecting any such modification, and such Holder shall not incur any liability to
any other Holder with respect to exercising or refraining from exercising any such right or
rights.
10.4 Notices. All notices, requests or consents required or permitted under this
Agreement shall be made in writing and shall be given to the other parties by personal delivery,
registered or certified mail (with return receipt), overnight air courier (with receipt signature)
or facsimile transmission (with “answerback” confirmation of transmission), sent to such party’s
addresses or telecopy numbers as follows:
If to the Company:
with a copy to:
Xxxxxxxx & Xxxxx LLP
Citicorp Center
000 Xxxx 00 xx Xxxxxx
Xxx Xxxx, XX 00000
Citicorp Center
000 Xxxx 00 xx Xxxxxx
Xxx Xxxx, XX 00000
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Fax: (000) 000-0000
Attn: Xxxxxxxxx X. Xxxxxx
Attn: Xxxxxxxxx X. Xxxxxx
If to HCP Funds:
c/o Harbinger Capital Partners
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: General Counsel
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: General Counsel
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx
Each such notice, request or consent shall be deemed effective upon the date of actual receipt,
receipt signature or confirmation of transmission, as applicable (or if given by registered or
certified mail, upon the earlier of (i) actual receipt or (ii) three days after deposit thereof in
the United States mail (with respect to addresses within the United
States) or ten (10) days after deposit thereof in the United States mail (with respect to addresses
outside of the United States).
10.5 Severability. Should any one or more of the provisions of this Agreement or of
any agreement entered into pursuant to this Agreement be determined to be illegal or unenforceable,
all other provisions of this Agreement and of each other agreement entered into pursuant to this
Agreement, shall be given effect separately from the provision or provisions determined to be
illegal or unenforceable and shall not be affected thereby.
10.6 No Third Parties. Subject
to Section 5 hereof, this Agreement shall not run to the benefit of or be enforceable by
any Person other than a party to this Agreement or, with respect to the Company, any successor
thereto.
10.7 Headings. The headings of the sections, subsections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not constitute a part of this
Agreement.
10.8 Choice of Law. It is the intention of the parties that the internal
substantive laws, and not the laws of conflicts, of the State of New York should govern the
enforceability and validity of this Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties.
10.9 Waiver of Jury Trial.
(a) EACH PARTY WAIVES
ITS RIGHT TO A JURY TRIAL IN ANY COURT ACTION ARISING AMONG ANY OF THE PARTIES, WHETHER UNDER OR
RELATING TO THIS AGREEMENT, AND WHETHER MADE BY CLAIM, COUNTER-CLAIM, THIRD PARTY CLAIM OR
OTHERWISE.
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(b) The agreement of each Party to waive its right to a jury trial will be binding on its
successors and assigns and will survive the termination of this Agreement.
10.10 Counterparts. This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, with the same effect as if all parties had
signed the same document. All such counterparts shall be deemed an original, shall be construed
together and shall constitute one and the same instrument.
10.11 Reports Under the Exchange
Act. In order to provide the Holders the use of Section 2, and so long as there are
Registrable Securities outstanding, the Company will (i) file in a timely manner (giving effect to
any delay permitted by the Securities Act and the Exchange Act) the reports required to be filed by
it pursuant to the Securities Act and the Exchange Act; (ii) make and keep public information
available, as those terms are understood and defined in the General Instructions to Form S-3, or
any successor or substitute form, and in Rule 144 under the Securities Act, or (iii) will take such
further action as any Holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such Holder to sell Registrable Securities on
Form S-3 (or any successor or substitute form) or without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 or Rule 144A under the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities, the Company will
deliver to such holder a written statement as to whether it has complied with such information and
requirements and, to the extent available, with a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company as a Holder may
reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder
to sell securities without registration only if such report is not available at xxx.xxx.xxx or on
the Company’s website.
10.12 Entire Agreement/Effectiveness. This Agreement contains the
entire understanding of the parties hereto in respect of its subject matter and supersedes all
prior and contemporaneous agreements and understandings, oral and written, between the parties with
respect to such subject matter.
10.13 The signatories hereto represent and warrant that the
Requisite Number is 14,463,847 as of the date hereof without giving effect to the Public Offering.
10.14 Termination. This Agreement shall terminate and any Registration Statement
filed hereunder may be withdrawn if there are no Registrable Securities outstanding.
[Signature Page Follows]
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IN WITNESS WHEREOF, each party hereto, intending to be bound by the terms of this Agreement,
has caused this Agreement to be executed by its duly authorized officer as of the date first above
written.
| SOLUTIA INC. | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| HARBINGER CAPITAL PARTNERS | ||||||||
| MASTER FUND I, LTD. | ||||||||
| By: | Harbinger Capital Partners LLC | |||||||
| By: | Harbinger Holdings, LLC, | |||||||
| Its Managing Member | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| HARBINGER CAPITAL PARTNERS | ||||||||
| SPECIAL SITUATIONS FUND, L.P. | ||||||||
| By: | Harbinger Capital Partners Special | |||||||
| Situations GP, LLC | ||||||||
| By: | Harbinger Holdings, LLC, | |||||||
| Its Managing Member | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
[REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE]
