SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND
AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT (this “Amendment”), dated as
of October 15, 2009, to the Credit Agreement, dated as of February 28, 2008, as
amended by that certain First Amendment to Credit Agreement dated as of May 29,
2009 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”),
among SOLUTIA INC., a Delaware corporation (the “U.S. Borrower”);
SOLUTIA EUROPE SPRL/BVBA, a private limited liability company incorporated under
Belgian law with registered office Xxxxxxxx xx Xxxxxxxx 0, 0000 Xxxxxxxxx,
registered with the Crossroads Bank for Enterprises under number 0460.474.440,
Commercial Court of Brussels (formerly known as Solutia Europe SA/NV, a limited
liability company) (“Solutia Europe”);
FLEXSYS SA/NV, a limited liability company incorporated under Belgian law
(“société anonyme” / “naamloze vennootschap”), having its registered office at
Xxxxxxxxxxxxxxxxxx 0, 0000 Xxxxxxxx, Xxxxxxx and registered with the Crossroads
Bank for Enterprises under number 454.045.419, Commercial Court of Brussels
(“Flexsys” and
together with Solutia Europe, the “European Borrowers”,
and each, a “European
Borrower”; the European Borrowers, together with the U.S. Borrower, are
the “Borrowers”
and each, a “Borrower”); each of
the Lenders; CITIBANK, N.A., as administrative agent for the Lenders (together
with its successors in such capacity, the “Administrative
Agent”), and as collateral agent for the Secured Parties (together with
its successors in such capacity, the “Collateral Agent”)
and as Issuer (the “Issuer”); CITIBANK INTERNATIONAL PLC, as collateral agent
for the European Secured Parties, and the other parties party
thereto. Capitalized terms used herein without definition shall have
the meanings ascribed to them in the Credit Agreement.
RECITALS
A. Borrowers,
the Administrative Agent, the Lenders and other parties thereto are party to the
Credit Agreement.
B. Borrowers
have requested that certain amendments be made to the Credit Agreement as set
forth herein.
C. The
Lenders signatory to an acknowledgement and consent in the form attached hereto
as Annex A (a “Lender
Consent Letter”) and the Administrative Agent have consented to this
Amendment on the terms and subject to the conditions set forth
herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Amendments to Credit
Agreement. As of the Second Amendment Effective Date (as
defined below) and subject to the satisfaction of the conditions set forth in
Section 2 hereof, the Credit Agreement shall be amended as set forth
below:
(a) Amendments to Section 1.01 –
Defined Terms. Section 1.01 of the Credit Agreement is hereby
amended by adding the following definitions to Section 1.01, which shall be
inserted in the proper alphabetical order.
“FAS 5” means the
Statement of Financial Accounting Standards No. 5 of The Financial Accounting
Standards Board.
“Permitted Loan
Purchase” has the meaning assigned to such term in the Term Loan Credit
Agreement as in effect on the date hereof (after giving effect to the first
amendment thereto).
“Permitted Other Debt”
shall mean senior secured or unsecured notes or loans (which in either case, if
secured, are secured by a Lien ranking junior to the Lien securing the Term Loan
Obligations with respect to such Collateral), in either case issued by a U.S.
Loan Party, (a) the terms of which do not provide for any scheduled repayment,
mandatory redemption, mandatory prepayment or sinking fund obligations prior to,
at the time of incurrence, the Scheduled Termination Date (other than customary
offers to repurchase or mandatory prepayment provisions, as applicable, upon a
change of control, asset sale, debt issuance, sale of the company, excess cash
flow or casualty or condemnation event and customary acceleration rights after
an event of default and scheduled amortization payments not in excess of 1% of
the original principal amount of any such notes or loans constituting Permitted
Other Debt during any Fiscal Year), (b) the covenants, events of default and
other terms of which (other than interest, fees, discount and other pricing and
economic provisions and redemption or prepayment provisions and call protection
and prepayment premiums), taken as a whole, are not more restrictive to the U.S.
Borrower and its Restricted Subsidiaries than the Term Loan Documents, (c) no
Subsidiary of the U.S. Borrower (other than a Subsidiary Guarantor that is a
Domestic Subsidiary of the U.S. Borrower) is an obligor with respect thereto,
(d) if secured, are not secured by any assets other than the Collateral and (e)
the U.S. Borrower shall deliver a certificate of an Authorized Officer of the
U.S. Borrower to the Administrative Agent at least five Business Days (or such
shorter period as the Administrative Agent may reasonably agree) prior to the
incurrence of such Indebtedness, together with a reasonably detailed description
of the material terms and conditions of such Indebtedness or drafts of the
documentation relating thereto, stating that the U.S. Borrower has determined in
good faith that such terms and conditions satisfy the foregoing
requirements.
“Permitted Other Debt
Documents” shall mean any document or instrument (including any
guarantee, security agreement or mortgage) issued or executed and delivered with
respect to any Permitted Other Debt by any Loan Party.
“Permitted Other Debt
Obligations” shall mean, if any Permitted Other Debt is issued, all
advances to, and debts, liabilities, obligations, covenants and duties of, any
Loan Party arising under any Permitted Other Debt Document, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired and
whether or not evidenced by any note, guaranty or other instrument or for the
payment of money, including all fees and interest (including interest accruing
after the maturity of such Permitted Other Debt and interest accruing (or that
would accrue but for the commencement of any bankruptcy, insolvency,
reorganization or like proceeding) after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding). Without limiting the generality of the foregoing,
the Permitted Other Debt Obligations of the applicable Loan Parties under the
Permitted Other Debt Documents include the obligation (including guarantee
obligations) to pay principal, interest, fees, premiums, charges, expenses,
attorneys’ fees and disbursements and other sums chargeable to any such Loan
Party under any Permitted Other Debt Document.
“Qualified Unrestricted
Subsidiary” means any Unrestricted Subsidiary designated as a “Qualified
Unrestricted Subsidiary” pursuant to a certificate of an Authorized Officer of
the U.S. Borrower delivered to the Administrative Agent and otherwise in
compliance with Section 5.18; provided that there
shall be no more than one Qualified Unrestricted Subsidiary.
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“Second Amendment”
means that certain Second Amendment to Credit Agreement dated as of October 15,
2009.
“Second Amendment Effective
Date” means October 15, 2009.
“Senior Notes” means
the senior notes to be issued by the U.S. Borrower on or around the Second
Amendment Effective Date, which such notes shall comply with the definition of
Permitted Other Debt (other than clause (b) of that definition, unless such
notes are secured).
“Senior Notes
Documents” means (i) an indenture, dated on or around the Second
Amendment Effective Date, among the U.S. Borrower, certain Domestic Subsidiaries
of the U.S. Borrower and the trustee named therein, and (ii) each other document
and instrument executed in respect thereto, which provisions of such indenture,
documents and instruments shall comply with the definition of Permitted Other
Debt (other than clause (b) of that definition, unless the notes issued
thereunder are secured).
“Senior Notes Secured
Parties” shall mean (i) the holders from time to time of secured Senior
Notes, (ii) the holders from time to time of any secured Indebtedness permitted
pursuant to Section 6.01(xxiv)(y) and (iii) any representative on behalf of any
such holders.
“Specified Businesses”
means the businesses described on Schedule 1.01(n).
“Term Loan
Obligations” means the “Obligations” under and as defined in the Term
Loan Credit Agreement.
“Transferred
Liability” means, in connection with any sale, transfer or other
disposition of assets by the U.S. Borrower or its Restricted Subsidiaries, any
liability (i) that would be recorded on a balance sheet of the U.S. Borrower or
its Restricted Subsidiaries in accordance with GAAP or identified under FAS 5,
(ii) that is related to the assets sold, transferred or otherwise disposed of by
the U.S. Borrower or its Restricted Subsidiaries, (iii) that is (x) expressly
assumed by the purchaser or transferee of such assets or (y) expunged by the
holder of such liability, and (iv) with respect to which the U.S. Borrower and
its Restricted Subsidiaries are fully and unconditionally released upon
consummation of such sale, transfer or other disposition.
(b) The
definition of “Consolidated EBITDA”
in Section 1.01 of the Credit Agreement is hereby amended by:
(i) inserting
the phrase “, but including any gains or income associated with cancellation or
extinguishment of Term Loans (including any gains, income or loss from Permitted
Loan Purchases)” immediately following the phrase “(y) the amount attributable
to minority interests” set forth in the parenthetical located in clause (i)
following the reference to “minus” contained
therein; and
(ii) inserting
the following at the end of such definition:
“For the
avoidance of doubt, Consolidated EBITDA shall not be increased or decreased as a
result of any gains or income or losses associated with cancellation or
extinguishment of Term Loans (including any gains, income or loss from Permitted
Loan Purchases).”
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(c) The
definition of “Consolidated Interest
Expense” in Section 1.01 of the Credit Agreement is hereby amended by
adding the words “, issuance of Equity Interests or Equity Rights” after the
words “Permitted Acquisitions” in the last paragraph thereof.
(d) The
definition of “Eligible European
Inventory” in Section 1.01 of the Credit Agreement is hereby amended by
replacing the words “Permitted Restructuring” with the words “a transaction
between Solutia Europe and Flexsys of the type described in Section 6.03(v)”
where such words appear therein.
(e) The
definition of “European Borrowing
Base” in Section 1.01 of the Credit Agreement is hereby amended by
replacing the words “Permitted Restructuring” with the words “a transaction
between Solutia Europe and Flexsys of the type described in Section 6.03(v)” in
each place that such words appear therein.
(f) The
definition of “Letter
of Credit Sublimit” in Section 1.01 of the Credit Agreement is hereby
amended by replacing the words “$175.0 million” with the words “$125.0
million”.
(g) The
definition of “Permitted
Acquisition” in Section 1.01 of the Credit Agreement is hereby amended by
amending clause (f) by adding the following words at the beginning
thereof:
“in the
case of any acquisition or series of related acquisitions where the Acquisition
Consideration is greater than $10.0 million in the aggregate,”
(h) The
definition of “Permitted Guarantor
Factoring Transactions” in Section 1.01 of the Credit Agreement is hereby
amended by replacing the words “$15.0 million” with the words “$30.0
million”.
(i) The
definition of “Pro
Forma Basis” in Section 1.01 of the Credit Agreement is hereby amended
by:
(i) adding
the following words immediately after the words “Asset Sale” the first time they
appear in clause (ii): “or designation of a Subsidiary as an
Unrestricted Subsidiary (or of an Unrestricted Subsidiary as a Restricted
Subsidiary) pursuant to Section 5.18”;
(ii) adding
the following parenthetical immediately after the word “Investment” where the
term Investment appears in clause (ii)(a)(i): “(including an Investment
resulting from an Unrestricted Subsidiary being designated as a Restricted
Subsidiary pursuant to Section 5.18)”; and
(iii) adding
the following words immediately after the words “Restricted Subsidiaries” in
clause (ii)(a)(ii): “, or in the case of the designation of a Subsidiary as an
Unrestricted Subsidiary pursuant to Section 5.18.”
(j) Amendment to Section 2.05 –
Reduction and Termination of Revolving Credit
Commitment. Section 2.05 of the Credit Agreement is hereby
amended by deleting the second proviso at the end thereof and substituting the
following new provisos therefore:
“provided further that in
connection with any such reduction, the U.S. Borrower may specify (i) a
reduction of the European Sublimit by an amount determined by it, and (ii) a
reduction in the unused portions of the Eurocurrency Sublimits of the
Eurocurrency
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Lenders
in an amount equal to the percentage by which the European Sublimit is reduced,
such reductions to be effective contemporaneously with the reduction of the
Revolving Credit Commitment; and provided finally, that in no
event shall the European Sublimit exceed an amount equal to 50% of the aggregate
Revolving Credit Commitments.”
(k) Amendment to Section 6.01 –
Indebtedness.
(i) Clause
(xii) of Section 6.01 of the Credit Agreement is hereby amended in its entirety
as follows:
“(xii) Indebtedness
of any Non-U.S. Restricted Subsidiary that is a Non-Guarantor Restricted
Subsidiary, and Guarantees by any Non-U.S. Restricted Subsidiary that is a
Non-Guarantor Restricted Subsidiary in respect of such Indebtedness; provided
that (A) no Default shall have occurred and be continuing or would immediately
result therefrom and (B) the aggregate principal amount of all such Indebtedness
shall not exceed an aggregate of $75.0 million at any one time
outstanding;”
(ii) Clause
(xiv) of Section 6.01 of the Credit Agreement is hereby amended in its entirety
with the following:
“(xiv) Indebtedness
of the Loan Parties (other than the Senior Notes), that is either (x)
Indebtedness in an aggregate principal amount not to exceed $300.0 million at
any one time outstanding secured by a Lien ranking junior to the Liens securing
the Obligations and the Term Loan Obligations or (y) unsecured Indebtedness;
provided that
in each case (A) such Indebtedness will not mature prior to the date that is one
year following the Scheduled Termination Date, (B) the terms of such
Indebtedness do not provide for any scheduled repayment, mandatory redemption,
mandatory prepayment or sinking fund obligations prior to the date that is one
year following the Scheduled Termination Date (other than customary offers to
repurchase or mandatory prepayment provisions, as applicable, upon a change of
control, asset sale, debt issuance, sale of the company, excess cash flow or
casualty or condemnation event and customary acceleration rights after an event
of default and scheduled amortization payments not in excess of 1% of the
original principal amount of any such Indebtedness during any Fiscal Year), (C)
after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis,
the Net Interest Expense Coverage Ratio shall be not less than 2.0:1.0 as of the
most recent Test Period (assuming that such incurrence of Indebtedness, and each
other incurrence of Indebtedness under this Section 6.01 consummated since the
first day of such Test Period, and the application of the proceeds thereof, had
occurred on the first day of such Test Period) and the Borrowers shall have
delivered to the Administrative Agent a certificate of a Financial Officer of
the U.S. Borrower to such effect setting forth in reasonable detail the
computations necessary to determine such compliance (together with a reasonably
detailed description of the material terms and conditions of such Indebtedness
or drafts of the documentation relating thereto), (D) no Default shall have
occurred and be continuing or would immediately result therefrom, (E)
immediately after giving effect thereto, the U.S. Borrower and its Restricted
Subsidiaries are in compliance, on a Pro Forma Basis after giving effect to the
incurrence of such Indebtedness (and any other Indebtedness incurred since the
last day of the immediately preceding Test Period), and the application of the
proceeds thereof, with the covenant set forth in Section 6.12 (tested as if a
Liquidity Event Period (Fixed Charge Coverage Ratio) was continuing) recomputed
as at the date of such Test Period as if all such Indebtedness was incurred on
the first day of the immediately preceding Test Period and (F) except in the
case of Guarantees by Excluded Non-U.S. Restricted Subsidiaries of such
Indebtedness of Non-U.S. Restricted Subsidiaries, no Restricted Subsidiary shall
Guarantee any such Indebtedness unless such Restricted Subsidiary is also a
Subsidiary Guarantor under this Agreement and the other Loan Documents; provided further that in the
case of Indebtedness that is secured pursuant to clause (x) above, (1) the
covenants, events of default and other terms of such Indebtedness (other than
interest, fees, discount and other pricing and economic provisions and
redemption or prepayment provisions and call protection and prepayment
premiums), taken as a whole, shall not be more restrictive to the U.S. Borrower
and its Restricted Subsidiaries than those in the Term Loan Documents, (2) no
Subsidiary of the U.S. Borrower (other than a Loan Party) shall be an obligor in
respect of such Indebtedness, (3) such Indebtedness shall not be secured by any
assets other than the Collateral of the U.S. Loan Parties of the U.S. Loan
Parties, and (4) not less than five Business Days prior to the incurrence of
such Indebtedness, the U.S. Borrower shall have delivered a certificate of an
Authorized Officer of the U.S. Borrower to the Administrative Agent, together
with a reasonably detailed description of the material terms and conditions of
such Indebtedness or drafts of the documentation relating thereto, stating that
the U.S. Borrower has determined in good faith that such terms and conditions
satisfy the foregoing requirements;”
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(iii) Section
6.01 of the Credit Agreement is hereby amended by deleting the word “and” at the
end of clause (xxii) thereof, replacing the period at the end of clause (xxiii)
with a semicolon and inserting the following new clauses (xxiv) and
(xxv):
“(xxiv) Indebtedness
of the U.S. Borrower and the U.S. Loan Parties in respect of (x) the Senior
Notes, to the extent that the net cash proceeds therefrom are applied to the
prepayment of the Term Loans (provided, however, that the Borrower shall not be
required to apply more than an aggregate amount equal to the greater of (i)
$200.0 million and (ii) the amount which is $100.0 million less than the
aggregate original principal amount of the Senior Notes); provided that (A) no
Default shall have occurred and be continuing or would immediately result
therefrom, and (B) immediately after giving effect thereto, the U.S. Borrower
and its Restricted Subsidiaries are in compliance, on a Pro Forma Basis after
giving effect to the incurrence of such Indebtedness (and any other Indebtedness
incurred since the last day of the immediately preceding Test Period), and the
application of the proceeds thereof, with the covenant set forth in Section 6.12
(tested as if a Liquidity Event Period (Fixed Charge Coverage Ratio) was
continuing) recomputed as at the date of such Test Period, as if all such
Indebtedness was incurred on the first day of the immediately preceding Test
Period, and (y) any Permitted Refinancing of such Senior Notes specified in
subclause (x) above; provided that such
Indebtedness pursuant to this Section 6.01(xxiv) otherwise complies with the
definition of Permitted Other Debt (other than clause (b) of that definition,
unless such Senior Notes are secured); and
(xxv)
intercompany notes evidencing obligations relating to Investments made pursuant
to Section 6.04(xxii) or asset transfers made pursuant to Section 6.05(xix);
provided that (A) such intercompany notes are pledged pursuant to the Pledge
Agreement in accordance with Section 5.11 and (B) the obligations of any obligor
evidenced by such intercompany notes shall be subordinated to the Obligations on
terms reasonably satisfactory to the Administrative Agent.”
(l) Amendment to Section 6.02 –
Liens.
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(i) Clause
(xvi) of Section 6.02 of the Credit Agreement is hereby amended by deleting the
words “in the ordinary course of business of the U.S. Borrower and its
Restricted Subsidiaries”.
(ii) Clause
(xviii) of Section 6.02 of the Credit Agreement is amended in its entirety with
the following:
“(xviii) (x)
Liens securing the “Obligations” (as defined in the agreement referenced in
clause (i) of the definition of “Term Loan Credit Agreement”) and (y) Liens
securing the “Obligations” or comparable term in any agreement referenced in
clause (ii) of the definition of “Term Loan Credit Agreement”); provided that (A) the
applicable secured parties (or a representative thereof on behalf of such
holders) shall be parties to the Intercreditor Agreement.”
(iii) Section
6.02 of the Credit Agreement is hereby further amended by deleting the word
“and” at the end of clause (xxix) thereof and inserting the following new
clauses (xxxi), (xxxii) and (xxxiii):
“(xxxi) Liens
securing Indebtedness permitted to be incurred under clause (x) of Section
6.01(xiv); provided that the
applicable secured parties with respect to such Indebtedness (or a
representative thereof on behalf of such holders) shall have entered into an
intercreditor agreement providing that the Liens securing such Indebtedness
shall rank junior to the Liens securing the Obligations and the Term Loan
Obligations, and which shall also provide, among other provisions to be
determined by the U.S. Borrower, the Administrative Agent, the Collateral Agent
and such secured parties (or a representative thereof on behalf of such
holders), terms substantially similar to those set forth on Exhibit T to this
Agreement (with any changes thereto being reasonably acceptable to the
Administrative Agent and the Collateral Agent). Without any further consent of
the Lenders, the Administrative Agent and the Collateral Agent shall be
authorized to (i) negotiate, execute and deliver on behalf of the Secured
Parties any intercreditor agreement (or amendment to the Intercreditor
Agreement) contemplated by this Section 6.02(xxxi) and (ii) amend any Security
Documents to the extent necessary or advisable in connection
therewith;
(xxxii)
Liens securing Indebtedness permitted to be incurred under Section 6.01(xxiv);
provided that
the Senior Notes Secured Parties (or a representative thereof on behalf of such
holders) shall have entered into an intercreditor agreement providing that the
Liens securing such Indebtedness shall rank junior to the Liens securing the
Obligations and the Term Loan Obligations, and which shall also provide, among
other provisions to be determined by the U.S. Borrower, the Administrative
Agent, the Collateral Agent and the Senior Notes Secured Parties (or a
representative thereof on behalf of such holders), terms substantially similar
to those set forth on Exhibit T to this
Agreement (with any changes thereto being reasonably acceptable to the
Administrative Agent and the Collateral Agent). Without any further consent of
the Lenders, the Administrative Agent and the Collateral Agent shall be
authorized to (i) negotiate, execute and deliver on behalf of the Secured
Parties any intercreditor agreement (or amendment to the Intercreditor
Agreement) contemplated by this Section 6.02(xxxii) and (ii) amend any Security
Documents to the extent necessary or advisable in connection therewith;
and
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(xxxiii) Liens
securing intercompany notes pledged to the Collateral Agent pursuant to the
Pledge Agreement and issued by Restricted Subsidiaries of the U.S. Borrower that
are not Loan Parties in connection with an Investment made pursuant to Section
6.04(xxii) or an asset transfer made pursuant to Section
6.05(xix);”
(m) Amendment to Section 6.03 –
Fundamental Changes; Line of Business.
(i) Clause
(a) of Section 6.03 of the Credit Agreement is hereby amended in its entirety
with the following:
“(a) No
Borrower will, nor will any Borrower permit any of its Restricted Subsidiaries
to, directly or indirectly, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with them, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing, (i) any
Wholly Owned Subsidiary (other than any European Loan Party) may merge into,
consolidate or liquidate into the U.S. Borrower in a transaction in which the
U.S. Borrower is the surviving corporation, and, in the case of a liquidation,
all assets of such Wholly Owned Subsidiary are distributed to the U.S. Borrower,
(ii) any Subsidiary of the U.S. Borrower (other than any European Loan
Party) may merge with or into, liquidate into or consolidate with any Restricted
Subsidiary in a transaction in which the surviving or resulting entity is a
Restricted Subsidiary (provided that if any
party to such merger, liquidation or consolidation is a Subsidiary Guarantor,
the surviving or resulting entity shall be a Subsidiary Guarantor that is a
Wholly Owned Subsidiary of the U.S. Borrower), (iii) any Subsidiary Guarantor
which is a European Loan Party may merge with or into or liquidate into or
consolidate with any European Borrower in a transaction in which the surviving
or resulting entity is a European Borrower, and, in the case of a liquidation,
all assets of such Subsidiary Guarantor are distributed to such European
Borrower, (iv) Permitted Acquisitions as permitted by Section 6.04(vii) may
be consummated and (v) Flexsys may merge into Solutia Europe in connection with
the Permitted Restructuring so long as Solutia Europe is the surviving entity
(or consummate such other business combination with Solutia Europe, liquidation
or transfer of assets to Solutia Europe as may be consented to by Administrative
Agent) and all Liens granted to the European Collateral Agent by Solutia Europe
and on the property of Flexsys acquired by Solutia Europe continue to be fully
perfected to the satisfaction of the European Collateral Agent or the assets of
Solutia Europe or Flexsys or both shall be excluded from the European Borrowing
Base (as determined by the Administrative Agent); provided that in
connection with each of the foregoing, the appropriate Loan Parties shall take
all actions necessary or reasonably requested by the Collateral Agent or the
European Collateral Agent to maintain the perfection of or perfect, as the case
may be, protect and preserve the Liens on the Collateral granted to such
Collateral Agent or European Collateral Agent pursuant to the Security Documents
and otherwise comply with the provisions of Sections 5.11, 5.12 and 5.15,
in each case, on the terms set forth therein and to the extent
applicable.”
(ii) Clause
(c) of Section 6.03 of the Credit Agreement is hereby amended by adding the
following prior to the period thereof:
“and;
provided, further, that for the
avoidance of doubt, businesses related to the manufacturing, sale or
distribution of high performance chemical based products and materials is
permitted under this clause (c)”.
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(n) Amendment to Section 6.04 –
Investments.
(i) Clause
(ii) of Section 6.04 of the Credit Agreement is hereby amended by adding the
following at the end thereof:
“provided that to the
extent any loan described on Schedule 6.04 that is
owing by a Subsidiary not a Loan Party to a Loan Party (the “Scheduled Loans”) (or
any additional Investments made by Loan Parties pursuant to this proviso) has
been repaid, then additional Investments may be made by Loan Parties in any
Restricted Subsidiaries that are not Loan Parties in an aggregate amount up to
the amount actually received by Loan Parties as payment in respect of such
Investments; provided further that
in no event will the aggregate amount of Scheduled Loans and additional
Investments made by Loan Parties in Subsidiaries that are not Loan Parties
pursuant to the first proviso of this clause (ii) exceed the aggregate original
principal amount of the Scheduled Loans on the Effective Date.”
(ii) Clause
(iii)(C) of Section 6.04 of the Credit Agreement is hereby amended by replacing
the words “$100.0 million” with the words “$125.0 million”.
(iii) Clause
(viii) of Section 6.04 of the Credit Agreement is hereby amended to read in its
entirety as follows:
“(A)
Investments in Joint Ventures constituting or consisting of a contribution of or
other transfer or distribution of the assets (other than cash, except that a
de minimus cash amount
directly related to such assets may be contributed, transferred or otherwise
distributed) or capital stock of the Specified Businesses and (B) Investments in
Joint Ventures not described in clause (A) in an aggregate amount made under
this clause (B) not to exceed $50.0 million at any one time
outstanding;”
(iv) Clause
(xv) of Section 6.04 of the Credit Agreement is hereby amended by adding the
words “any non-cash portion or” prior to the words “any deferred
portion”.
(v) Section
6.04 of the Credit Agreement is hereby amended by deleting the word “and” at the
end of clause (xix) thereof, adding the word “and” at the end of clause (xx) and
inserting the following new clauses (xxi) and (xxii):
“(xxi) intercompany
receivables created by any distribution or other transfer by a Subsidiary to a
U.S. Loan Party of an intercompany receivable issued by a Subsidiary that is not
a U.S. Loan Party; provided that any
Loan Party shall pledge any note evidencing any such receivable that it receives
as a result of such distribution or other transfer; provided further, that no Loan
Party shall transfer, or otherwise make any payment or other Investment of, cash
or cash equivalents in exchange for the receipt of such intercompany
receivables; and
(xxii) any
transfer of assets pursuant to Section 6.05(xix) in the form of an
Investment.”
(vi) The last
paragraph of Section 6.04 of the Credit Agreement is hereby amended in its
entirety as follows:
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“The
aggregate amount of an Investment at any one time outstanding for purposes of
this Section 6.04 shall be deemed to be equal to (A) the aggregate amount of
cash, together with the aggregate fair market value of Property (net of any
Transferred Liability) loaned, advanced, contributed, transferred or otherwise
invested that gives rise to such Investment (without adjustment for subsequent
increases or decreases in the value of such Investment) minus (B) the aggregate
amount of dividends, distributions or other payments received in cash in respect
of such Investment (including by way of a sale or other disposition of such
Investment). The amount of an Investment shall not in any event be
reduced by reason of any write-off of such Investment.”
(o) Amendment to Section 6.05 –
Asset Sales.
(i) Clause
(v) of Section 6.05 of the Credit Agreement is hereby amended by adding the
words “, transfer of assets” after the word “liquidations”.
(ii) Clause
(viii) of Section 6.05 of the Credit Agreement is hereby amended by (x) adding
the word “other” at the beginning thereof, (y) deleting the words “not otherwise
permitted under this Section” and (z) amending clause (B) of the proviso to read
in its entirety as follows:
“(B) the
aggregate fair market value of all assets (net of any Transferred Liability)
sold, transferred or otherwise disposed of in reliance upon this Section
6.05(viii) from the Second Amendment Effective Date through the date of such
sale, transfer or other disposition do not exceed the Asset Sale Cap (for the
avoidance of doubt, any subsequent decrease in the Asset Sale Cap shall not
constitute a Default or an Event of Default with respect to sales, transfers and
dispositions previously made as permitted by this Section
6.05(viii)),”.
(iii) Section
6.05 of the Credit Agreement hereby amended by deleting the word “and” at the
end of clause (xvi), and inserting the following new clauses (xviii) and
(xix):
“(xviii) any
transfer or disposition of the assets or capital stock of the Specified
Businesses (any which disposition may be made as part of a larger Asset Sale
transaction, the remainder of which Asset Sale transaction is permitted under
the provisions of one or more other baskets in this Section 6.05);
and
(xix) any
transfer of assets by any Loan Party to a Restricted Subsidiary that is not a
U.S. Loan Party and any intercompany Indebtedness owing to a Loan Party
resulting therefrom; provided that (x) the aggregate amount of such assets shall
not exceed (A) in the case of transfers of assets acquired after the Second
Amendment Effective Date by any Loan Party in a Permitted Acquisition in
compliance with Section 6.04(vii) and any intercompany Indebtedness owing to a
Loan Party resulting therefrom, $200.0 million, and (B) in the case of all other
transfer of assets under this Section 6.05 (xix), $50.0 million, (y) for each
such transfer, the conditions set forth on Schedule 6.05(xix)
have been satisfied, and (z) any such transfer shall be made in exchange for an
intercompany note which shall be pledged pursuant to the Pledge Agreement or a
Non-U.S. Pledge Agreement in accordance with Section 5.11.”
(iv) The
proviso at the end of Section 6.05 of the Credit Agreement is hereby amended in
its entirety with the following:
10
“provided that all
sales, transfers, leases and other dispositions permitted hereby shall be made
(a) for fair value and (b) other than in the case of sales, transfers, leases
and other dispositions permitted by Sections 6.05(ii), 6.05(v), 6.05(vii),
6.05(ix), 6.05(xv), 6.05(xvii) and 6.05(xix)) for consideration (which for
purposes of this proviso, shall not be deemed to include any Transferred
Liability (other than any liability owed or owing to the purchaser or transferee
of the assets sold, transferred or otherwise disposed of or to any affiliates of
such purchaser or transferee)) consisting of at least 75% cash and Cash
Equivalents.”
(p) Amendment to Section 6.07 –
Restricted Payments. Clause (ii) of Section 6.07 of the Credit Agreement
is hereby amended by adding the words “, Equity Rights” prior to the words “or
other Equity Interests”.
(q) Amendment to Section 6.08 –
Transactions with Affiliates.
(i) The
introductory paragraph of Section 6.08 of the Credit Agreement is hereby amended
by deleting the words “are in the ordinary course of business of the U.S.
Borrower and its Restricted Subsidiaries” and replacing them with the words “
are in accordance with the reasonable requirements of the business of the U.S.
Borrower and its Restricted Subsidiaries (as determined by the U.S. Borrower in
its reasonable business judgment)”; and
(ii) Section
6.08 of the Credit Agreement is hereby amended by deleting the word “and” at the
end of clause (iii) thereof, replacing the period at the end of clause (iv) with
“; and” and inserting the following new clause (v):
“(v)
Investments in Qualified Unrestricted Subsidiaries permitted by Section 6.04 and
made in connection with a Permitted Loan Purchase.”
(r) Amendment to Section 6.09 –
Restrictive Agreements.
(i) Clause
(i) of Section 6.09 of the Credit Agreement is hereby amended in its entirety as
follows:
“(i) conditions
or restrictions imposed by law, any Loan Document, any Term Loan Document, or
any Permitted Other Debt Documents (or Permitted Refinancings of Permitted Other
Debt Documents) so long as, in the case of any document evidencing Indebtedness
permitted to be incurred pursuant to Section 6.01(xiv) or such Permitted
Refinancing, the conditions or restrictions imposed pursuant to such Permitted
Refinancing are no more restrictive, taken as a whole, than those conditions or
restrictions contained in the Term Loan Documents;”
(ii) Section
6.09 of the Credit Agreement is hereby amended by deleting the word “and” at the
end of clause (vii), replacing the period at the end of clause (viii) with “;
and” and inserting the following new clause (ix):
“(ix) any
agreement with respect to Indebtedness permitted under Section 6.01(xi), but
only if such restrictions were not created in contemplation of such Permitted
Acquisition and the restrictions only apply to the Person or assets being
acquired.”
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(s) Amendments or Waivers of
Certain Documents; Payments of Certain Indebtedness. Clause (c) of
Section 6.10 of the Credit Agreement is hereby amended in its entirety as
follows:
“(c) No
Borrower will, nor will any Borrower permit any of its Restricted Subsidiaries
or its Qualified Unrestricted Subsidiaries to, make (or give any notice or offer
in respect of) any voluntary or optional payment or redemption, or voluntary or
optional acquisition for value of, any Indebtedness under the Term Loan
Documents, any Indebtedness incurred pursuant to Section 6.01(xiv) or any
Indebtedness incurred pursuant to Section 6.01(xxiv) that, in each case, is
secured by Liens on Collateral ranking junior to the Liens securing the
Obligations, other than pursuant to any refinancings thereof to the extent
permitted by this Agreement and the Intercreditor Agreement (or any relevant
intercreditor agreement) (including any repayment of the Term Loans with the
proceeds of the Senior Notes) unless (i) immediately after giving effect to such
payment, redemption or acquisition for value, the Borrowers and their Restricted
Subsidiaries have Excess Availability, on a Pro Forma Basis after giving effect
to such payment, redemption or acquisition for value, of at least $75.0 million
and (ii) no Default has occurred and is continuing or would result from such
payment, redemption or acquisition for value.”
(t) Amendment to Section 9.15 –
Jurisdiction: Consent to Service of Process. Clause
(a) of Section 9.15 of the Credit Agreement is hereby amended by replacing the
word “nonexclusive” with “exclusive” and replace the words “may be heard and
determined” with the words “shall be heard and determined
exclusively”.
(u) Amendment to Article IX –
Miscellaneous. Article IX of the Credit Agreement is hereby
amended by adding the following new Section 9.26 at the end
thereof:
“SECTION
9.26 Permitted Intercompany
Transaction. Notwithstanding any covenant, restriction or
other provision contained in Section 6.01, 6.03, 6.04, 6.05, 6.07 and 6.08 and
any provision of the Intercompany Note, (A) the transfer by Monchem
International, Inc., directly or indirectly, of any of its Subsidiaries
organized in Japan or Brazil (collectively, the “Transferred Assets”)
to Solutia Europe SPRL/BVBA (“Solutia Europe”) in
any transaction or a series of transactions, and the subsequent transfer by
Solutia Europe of such Transferred Assets to Flexsys Holdings B.V. and (B) the
transfer by Solutia Netherlands Holdings BV of Equity Interests in Solutia
Performance Products Solutions Ltd. (Mauritius) to Solutia Europe in exchange
for a promissory note, and the subsequent contribution by Solutia Europe of such
shares in Solutia Performance Products Solutions Ltd. (Mauritius) to Solutia
Greater China, shall be permitted under this Agreement and the Intercompany
Note; provided
that no Event of Default or Default then exists or would immediately arise
therefrom; provided, further, that (i) the
aggregate principal amount of such promissory note shall be an amount equal to
the fair market value of the Equity Interests transferred in exchange for such
promissory note and, in any event, shall not exceed $10,000,000, (ii) the
interest rate of such promissory note shall not exceed 9.0% per annum, (iii) no
principal payments or cash interest payments shall be required under the terms
of such promissory note until no Lender shall have any Revolving Credit
Commitment hereunder, no Letters of Credit remain outstanding and the principal
of and interest on each Loan and all fees and other amounts due and payable
hereunder or under any other Loan Document have been paid in full (other than
unasserted contingent indemnification obligations not due and payable), (iv)
such promissory note shall be unsecured and (v) such promissory note
shall contain subordination provisions satisfactory to the Administrative
Agent.
12
(v) Amendment to
Exhibits. The exhibits to the Credit Agreement are hereby
amended by adding a new Exhibit T (Summary of Terms and Conditions of
Junior Lien Intercreditor Agreement) attached hereto as Exhibit
1.
(w) Amendment to
Schedules.
(i) The
schedules to the Credit Agreement are hereby amended by adding a new Schedule 1.01(n)
(Specified Businesses)
attached hereto as Exhibit 2.
(ii) The
schedules to the Credit Agreement are hereby amended by adding a new Schedule
6.05(xviii) (Non-Guarantor Restricted Subsidiary Investment Conditions) attached
hereto as Exhibit 3.
2. Effectiveness of this
Amendment. This Amendment shall become effective on and as of
the date (the “Second
Amendment Effective Date”) on which all of the following conditions
precedent have been satisfied:
(a) Amendment. The
Administrative Agent shall have received:
(i) this
Amendment duly executed and delivered by each Borrower;
(ii) an
officer’s certificate signed on behalf of the U.S. Borrower by a Financial
Officer of the U.S. Borrower, certifying as of the date on which the Senior
Notes price (the “Pricing Date”)
that: (A) the representations and warranties set forth in Article III
of the Credit Agreement and in the other Loan Documents are true and correct (or
true and correct in all material respects if not otherwise qualified by
materiality or by a Material Adverse Effect) with the same effect as if made on
the Second Amendment Effective Date (unless expressly stated to relate to an
earlier date, in which case such representations and warranties shall be true
and correct (or true and correct in all material respects if not otherwise
qualified by materiality or by a Material Adverse Effect) as of such earlier
date) and (B) the representations and warranties of set forth in Section 3
herein are true and correct (or true and correct in all material respects if not
otherwise qualified by materiality or by a Material Adverse Effect) on the
Pricing Date;
(iii) executed
Lender Consent Letters from the Requisite Lenders;
(iv) the
attached Acknowledgement executed by each Borrower and each Subsidiary
Guarantor; and
(v) from
Xxxxxxxx & Xxxxx LLP, special counsel to the Loan Parties, a customary
written opinion addressed to each Agent and the Lenders, dated the Second
Amendment Effective Date, customary in form, scope and substance.
(b) Costs and
Expenses. The Administrative Agent shall have
received:
(i) for the
account of each Lender that executes and delivers a Lender Consent Letter to the
Administrative Agent on or before 5:00 p.m., New York City time, on October
1,
13
2009, an
amendment fee equal to 0.25% of the amount of such Lender’s Revolving Credit
Commitment; and
(ii) all fees
required to be paid, and all expenses required to be paid under Section 6 of
this Amendment for which invoices have been presented (including the reasonable
fees and expenses of legal counsel), in connection with this Amendment (or
Borrowers shall have made arrangements for the payment thereof satisfactory to
the Administrative Agent).
(c) Prepayment of Term
Loan. The Borrowers shall have prepaid, from the net cash
proceeds of the Senior Notes, the Term Loans in an aggregate principal amount
equal to the greater of (i) $200.0 million and (ii) the amount which is $100.0
million less than the aggregate original principal amount of the Senior Notes,
in each case plus accrued interest thereon.
(d) No Default. No
Default or Event of Default shall have occurred and be continuing or will result
from the execution, delivery or effectiveness of this Amendment.
3. Representations and
Warranties. Borrowers represent and warrant as
follows:
(a) Authority. Each
Borrower and each Subsidiary Guarantor has the requisite corporate or other
organizational power and authority to execute and deliver this Amendment and the
attached Acknowledgement, and to perform its obligations hereunder and under the
Loan Documents (as amended or modified hereby) to which it is a
party. The execution, delivery and performance by such Person of this
Amendment and Acknowledgement have been duly approved by all necessary corporate
or other organizational action and no other corporate or other organizational
proceedings are necessary to consummate such transactions.
(b) Enforceability. This
Amendment has been duly executed and delivered by each Borrower. This
Amendment and the Credit Agreement (as amended or modified hereby) are the
legal, valid and binding obligation of each Borrower, enforceable in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization and other similar laws relating to or
affecting creditors’ rights generally and general principles of equity (whether
considered in a proceeding in equity or law).
(c) No
Conflict. The execution, delivery and performance of this
Amendment by Borrowers does not (i) contravene any applicable provision of any
material applicable law of any Governmental Authority, (ii) result in any breach
of any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of such Person
pursuant to, (A) the terms of any material indenture, loan agreement, lease
agreement, mortgage or deed of trust, or (B) any other material contractual
obligation, in the case of either clause (i) and (ii) to which such Person is a
party or by which it or any of its property or assets is bound, (iii) violate
any provision of the Organizational Documents of such Person, except with
respect to any conflict, breach or contravention or default referred to in
clauses (ii)(A) or (ii)(B), to the extent that such conflict, breach,
contravention or default could not reasonably be expected to have a Material
Adverse Effect or (iv) conflict with or violate any provision of the Credit
Agreement, the Loan Documents, the Term Loan Credit Agreement or the Term Loan
Documents.
(d) No
Default. No event has occurred and is continuing or will
result from the execution and delivery of this Amendment that would constitute a
Default or an Event of Default.
4. Applicable
Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
14
5. WAIVER OF JURY
TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT OR
ANY DOCUMENT EXECUTED IN CONNECTION WITH THIS AMENDMENT. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AMENDMENT AND ANY DOCUMENT EXECUTED IN CONNECTION WITH THIS AMENDMENT,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 5.
6. Expenses;
Indemnity. Without limiting Borrowers’ obligations under
Section 9.05(a) of the Credit Agreement, each Borrower hereby agrees to
reimburse the Administrative Agent for reasonable and documented out-of-pocket
expenses, including the reasonable fees and disbursements of counsel, incurred
in connection with this Amendment. The provisions of Section 9.05(b)
of the Credit Agreement are hereby incorporated by reference herein as if fully
set forth and in full force and effect as if written in full herein except that
the term “Indemnitees” shall be deemed to expressly include this Amendment and
the documents executed in connection with this Amendment.
7. Counterparts.
(a) This
Amendment may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original but all of
which when taken together shall constitute a single
contract. Delivery of an executed signature page to this Amendment by
facsimile transmission or other electronic image scan transmission (e.g., “PDF”
or “tif” via e-mail) shall be as effective as delivery of a manually signed
counterpart of this Amendment.
(b) The
execution and delivery of a Lender Consent Letter with respect to this Amendment
by any Lender shall be binding upon each of its successors and assigns and
binding in respect of its Revolving Credit Commitment and all of its Loans,
including any Revolving Credit Commitments and Loans acquired subsequent to its
execution and delivery hereof and prior to the effectiveness
hereof.
8. Reference to and Effect on
the Loan Documents.
(a) Upon and
after the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to “the Credit Agreement”, “thereof” or words of like import referring
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as modified and amended hereby.
(b) Except as
specifically amended above, the Credit Agreement and all other Loan Documents,
are and shall continue to be in full force and effect and are hereby in all
respects ratified and confirmed and shall constitute the legal, valid, binding
and enforceable obligations of Borrowers to the Agents and the other Secured
Parties, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization and other similar laws relating to or
affecting creditors’ rights generally and general principles of equity (whether
considered in a proceeding in equity or law).
15
(c) The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Agent or any other Secured Party under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.
(d) To the
extent that any terms and conditions in any of the Loan Documents shall
contradict or be in conflict with any terms or conditions of the Credit
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Credit Agreement as modified or amended hereby.
9. Integration. This
Amendment, together with the other Loan Documents, incorporates all negotiations
of the parties hereto with respect to the subject matter hereof and is the final
expression and agreement of the parties hereto with respect to the subject
matter hereof.
10. Severability. In
case any provision in this Amendment shall be invalid, illegal or unenforceable,
such provision shall be severable from the remainder of this Amendment and the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
IN
WITNESS WHEREOF, the parties have entered into this Amendment as of the date
first above written.
[signature pages follow]
16
|
a
Delaware corporation
|
|
|
By: /s/ Xxxxx X.
Xxxxxxxx
|
|
|
Xxxxx
X. Xxxxxxxx
Assistant
Treasurer
|
|
SOLUTIA EUROPE
SPRL/BVBA,
|
|
|
as
a European Borrower
|
|
|
By: /s/Xxxxxxx
Xxxxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxxxx
Title: Manager/Director
|
|
| By: /s/Xxx Xxxxxxx | |
| Name: Xxxx Xxxxxxx | |
| Title: Manager |
|
FLEXSYS
NV,
|
|
|
as
a European Borrower
|
|
|
By: /s/Xxxxxxx
Xxxxxxxx
|
|
|
Name:
Xxxxxxx Xxxxxxxx
Title:Administrator
|
|
| By: /s/Xxx Xxxxxxx | |
| Name: Xxxx Xxxxxxx | |
| Title: Director |
|
CITIBANK,
N.A.,
|
|
|
as
Administrative Agent and Issuer
|
|
|
By: /s/ Xxxxx
Xxxxx
|
|
|
Name:
Xxxxx Xxxxx
Title: Director/Vice
President
|
