EXHIBIT 4.12
JUNIOR INTERCREDITOR AGREEMENT
JUNIOR INTERCREDITOR AGREEMENT dated as of July 25, 2002 between
SOLUTIA INC., a Delaware corporation (the "COMPANY"); each of the subsidiaries
of the Company identified under the caption "SUBSIDIARY GUARANTORS" on the
signature pages hereto (individually, a "SUBSIDIARY GUARANTOR" and,
collectively, the "SUBSIDIARY GUARANTORS" and, together with the Company, the
"SECURING PARTIES"); CITIBANK, N.A., as Collateral Agent for the Senior Secured
Parties referred to below (in such capacity, the "COLLATERAL AGENT"); and HSBC
BANK USA, a banking corporation duly organized and validly existing under the
laws of the State of New York, as trustee under the 2009 Notes Indenture
referred to below (in such capacity, together with its successors in such
capacity, the "TRUSTEE").
The Company, certain lenders (the "SOLUTIA LENDERS") and Citibank,
N.A., as administrative agent (in such capacity, together with its successors
and assigns, the "SOLUTIA ADMINISTRATIVE AGENT") are parties to a Second Amended
and Restated Credit Agreement dated as of July 25, 2002 (as modified and
supplemented and in effect from time to time, the "SOLUTIA CREDIT AGREEMENT"),
providing, subject to the terms and conditions thereof, for extensions of credit
(by means of loans and letters of credit) to be made by said lenders to the
Company and the other borrowers referred to therein in an aggregate principal or
face amount not exceeding $600,000,000. In addition, the Company may from time
to time be obligated to various of the Solutia Lenders (or their affiliates) in
respect of one or more hedging agreements permitted under Section 6.02(g)(v) of
the Solutia Credit Agreement.
Astaris LLC, a limited liability company organized under the laws of
Delaware ("ASTARIS"), certain lenders (the "ASTARIS LENDERS") and Bank of
America, N.A., as administrative agent (in such capacity, together with its
successors in such capacity, the "ASTARIS ADMINISTRATIVE AGENT") are parties to
a Credit Agreement dated as of September 14, 2000 (as modified and supplemented
and in effect from time to time, the "ASTARIS CREDIT AGREEMENT"), providing,
subject to the terms and conditions thereof, for loans to be made by said
lenders to Astaris in an aggregate principal amount not exceeding $275,000,000.
The obligations of Astaris under the Astaris Credit Agreement have been
partially guaranteed by the Company pursuant to a Guaranty Agreement dated as of
September 14, 2000 (as modified and supplemented and in effect from time to
time, the "ASTARIS GUARANTY AGREEMENT") by the Company in favor of Astaris LLC
and in favor of the Astaris Lenders and the Astaris Administrative Agent.
The Company, State Street Bank and Trust Company, as trustee (in such
capacity, together with its successors in such capacity, the "CO-GEN TRUSTEE"),
certain financial institutions named as purchasers therein (collectively, the
"CO-GEN PURCHASERS") and Citibank, N.A., as agent for the Co-gen Purchasers (in
such capacity, together with its successors in such capacity, the "CO-GEN
AGENT"), are parties to an Amended and Restated Participation Agreement dated as
of April 24, 1998 (as modified and supplemented and in effect from time to time,
the "CO-GEN PARTICIPATION AGREEMENT"), providing, subject to the terms and
conditions thereof, for loans and investments to be made by the Co-gen
Purchasers to the Co-gen Trustee in an aggregate principal amount not exceeding
$33,000,000. The obligations of the Co-gen Trustee under the Co-gen
Participation Agreement have been guaranteed by the Company pursuant to an
Amended and Restated Instrument Guaranty dated as of April 24, 1998 (as modified
and supplemented and in effect from time to time, the "CO-GEN GUARANTY
AGREEMENT") by the Company in favor of the
JUNIOR INTERCREDITOR AGREEMENT
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Co-gen Trustee and the Co-gen Purchasers. In addition, the Co-gen Trustee, as
lessor, and the Company, as lessee, are party to an Amended and Restated Lease
dated as of April 24, 1998 (as modified and supplemented and in effect from time
to time, the "CO-GEN LEASE") pursuant to which the Company agrees to make
certain rent payments to the Co-gen Trustee in consideration of the lease of the
co-generation facility referred to therein, which rent payments service the
loans and investments made by the Co-gen Purchasers.
In addition, certain of the Solutia Lenders may have issued letters of
credit for the account of the Company or a Subsidiary, or may in the future
issue letters of credit for the account of the Company, which are or will be
identified in the below-referenced Senior Non-Sharing Intercreditor Agreement as
"Designated Letters of Credit" (as hereinafter defined). It is contemplated
that, in connection herewith, such Solutia Lenders will execute and deliver a
Letter of Credit Override Agreement providing for certain common terms to be
applicable to such letters of credit.
The Company is also party to an Indenture dated as of July 9, 2002
(the "2009 NOTES INDENTURE") between the Company, SOI Funding Corp. and HSBC
Bank USA, as trustee, pursuant to which SOI Funding Corp. has issued its 11.25%
Senior Secured Notes due 2009 (the "2009 NOTES"), in an aggregate principal
amount of $223,000,000 as of July 9, 2002, and which 2009 Notes have been
assumed by the Company pursuant to a Supplemental Indenture thereto, and
guaranteed by the Subsidiary Guarantors as provided in Section 10.01 thereof.
Pursuant to the Senior Non-Sharing Security Documents (as defined
below), the Securing Parties have granted to the Collateral Agent liens on
certain of the property of the Securing Parties as collateral security for the
obligations of the Securing Parties under the Solutia Credit Agreement, the
Astaris Credit Agreement, the Co-gen Guaranty Agreement, Hedging Obligations (as
defined below) and the Designated Letters of Credit.
In connection with the foregoing, the parties hereto wish to provide
for the subordination of the liens granted pursuant to the Junior Security
Documents (as defined below) in favor of the Trustee to the liens granted to the
Collateral Agent pursuant to the Senior Non-Sharing Security Documents.
Accordingly, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS, ETC.
(a) DEFINED TERMS. As used in this Agreement, the following terms have
the meanings specified below:
"ADVANCE" has the meaning assigned to such term in Section 1.01 of the
Solutia Credit Agreement.
"COLLATERAL" means, collectively, the assets of the Securing Parties
subject to the Liens of the Junior Security Documents.
"DESIGNATED LETTER OF CREDIT" has the meaning ascribed thereto in the
Senior Non-Sharing Intercreditor Agreement.
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"DESIGNATED LETTER OF CREDIT OBLIGATIONS" means all obligations of the
Company in respect of Designated Letters of Credit.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Company organized
under the laws of a State of the United States of America.
"EXISTING NOTE INDENTURES" means, collectively, the indenture and/or
the fiscal agency agreement, as applicable, pursuant to which the following
notes or debentures of the Company or Solutia Europe, as applicable, have
been issued: 6.50% notes due 2002, 7.375% debentures due 2027, 6.72%
debentures due 2037 and 6.25% euro notes due 2005, as in effect on the date
hereof and without giving effect to any modifications or supplements after
the date hereof.
"GAAP" means the generally accepted accounting principles in the
United States of America.
"HEDGING OBLIGATIONS" means all obligations of the Company in respect
of any interest rate protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement entered into
with any Lender (or any affiliate thereof).
For purposes hereof, it is understood that any Hedging Obligations to
a Person arising under an agreement entered into at the time such Person
(or an affiliate thereof) is a "Lender" party to the Solutia Credit
Agreement shall nevertheless continue to constitute Hedging Obligations for
purposes hereof, notwithstanding that such Person (or its affiliate) may
have assigned all of its Advances and other interests in the Solutia Credit
Agreement and, at the time a claim is to be made in respect of such Hedging
Obligations, such Person (or its affiliate) is no longer a "Lender" party
to the Solutia Credit Agreement.
"JUNIOR SECURED OBLIGATIONS" has the meaning ascribed thereto in the
Junior Security Agreement.
"JUNIOR SECURITY AGREEMENT" means the Junior Security Agreement dated
as of July [___], 2002 between the Securing Parties, the Collateral Agent
and the Trustee, as the same shall be modified and supplemented and in
effect from time to time.
"JUNIOR SECURITY DOCUMENTS" means (a) this Agreement, (b) the Junior
Security Agreement, and (c) each other security agreement, pledge
agreement, mortgage, deed of trust, assignment agreement and other
instrument (including any Uniform Commercial Code financing statements)
executed pursuant to Section 3 or Section 5 of the Junior Security
Agreement.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including the lien or retained security title of a conditional vendor and
any mortgage, easement, right of way or other encumbrance on title to real
property.
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"MAJORITY SOLUTIA LENDERS" means the Majority Lenders under and as
defined in the Solutia Credit Agreement.
"MAKE-WHOLE OBLIGATIONS" means all obligations of the Company under
the Astaris Guaranty Agreement as in effect on the date hereof and without
giving effect to any amendments or supplements made to the Astaris Guaranty
Agreement after the date hereof.
"NON-SHARING OBLIGATIONS" means, collectively, the obligations of the
Securing Parties to each Solutia Lender (and, in respect of any Hedging
Obligations, any affiliate of a Solutia Lender that shall have entered into
the respective hedging agreement giving rise to such Hedging Obligations),
each Astaris Lender, each Co-gen Purchaser and each Administrative Agent
and their respective successors and assigns in respect of the Solutia
Credit Agreement Obligations, the Make-Whole Obligations, the Synthetic
Lease Obligations, the Designated Letter of Credit Obligations and the
Hedging Obligations.
"PERSON" means any individual, corporation (including a business
trust), company, voluntary association, partnership, limited liability
company, joint venture, trust, unincorporated organization or governmental
authority or other entity of whatever nature.
"SENIOR NON-SHARING INTERCREDITOR AGREEMENT" means the Restated
Intercreditor and Collateral Agency Agreement dated as of July [___], 2002
between the Company, the Subsidiary Guarantors, the Solutia Administrative
Agent, the Astaris Administrative Agent, the Co-gen Agent and the
Collateral Agent, as the same shall be modified and supplemented and in
effect from time to time.
"SENIOR NON-SHARING SECURITY AND GUARANTEE AGREEMENT" means the
Restated Security and Guarantee Agreement dated as of July [___], 2002
between the Securing Parties and the Collateral Agent, as the same shall be
modified and supplemented and in effect from time to time.
"SENIOR NON-SHARING SECURITY DOCUMENTS" means, collectively, (a) the
Senior Non-Sharing Security and Guarantee Agreement and (b) any other
pledge agreements, security agreements, assignment agreements, mortgages,
deeds of trust or other instruments providing for collateral security from
time to time executed pursuant to Section 4 or Section 6 of the Senior
Non-Sharing Security and Guarantee Agreement.
"SENIOR SECURED OBLIGATIONS" means, collectively, (a) in the case of
the Company, the Non-Sharing Obligations, (b) in the case of the Subsidiary
Guarantors, the obligations of the Subsidiary Guarantors in respect of the
Guaranteed Obligations (as defined in the Senior Non-Sharing Security and
Guarantee Agreement pursuant to Section 2.01 of the Senior Non-Sharing
Security and Guarantee Agreement and (c) in the case of all Securing
Parties, all present and future obligations of the Securing Parties to the
Senior Secured Parties, or any of them, under the Senior Non-Sharing
Security Documents.
"SENIOR PAYMENT DATE" means the date on which all the Non-Sharing
Obligations have been paid in full, all Designated Letters of Credit, and
Letters of Credit issued under
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the Solutia Credit Agreement, have expired or terminated and the
"Commitments" under and as defined in the Solutia Credit Agreement have
been terminated.
"SENIOR SECURED PARTIES" means, collectively, the Collateral Agent,
the Solutia Lenders, the Astaris Lenders, the Co-gen Purchasers, the
Administrative Agents and the Co-gen Agent (and, in respect of any Hedging
Obligations, any affiliate of a Solutia Lender that shall have entered into
the respective hedging agreement giving rise to such Hedging Obligations).
"SOLUTIA CREDIT AGREEMENT OBLIGATIONS" means the principal and
interest on the Advances (as defined in the Solutia Credit Agreement) made
by the Solutia Lenders to the Borrowers under and as defined in the Solutia
Credit Agreement, all obligations of the Company in respect of Letters of
Credit issued thereunder and all other amounts from time to time owing to
the Solutia Lenders or the Solutia Administrative Agent under the Solutia
Credit Agreement.
"SUBSIDIARY" has the meaning assigned to such term in the Existing
Note Indentures, in each case as in effect on the date hereof and without
giving effect to any modifications or supplements after the date hereof.
"SYNTHETIC LEASE OBLIGATIONS" means all obligations of the Company
under the Co-gen Guaranty Agreement, the Co-gen Lease and the other
Operative Documents (as defined in the Co-gen Participation Agreement);
PROVIDED that if such obligations exceed $33,000,000, then only the portion
of such obligations that do not exceed $33,000,000, together with interest
thereon at the rate specified in the Co-gen Participation Agreement, shall
be deemed to be "Synthetic Lease Obligations".
"2009 NOTEHOLDERS" means each Person from time to time holding any of
the 2009 Notes under the 2009 Notes Indenture.
(b) TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (i) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iv) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (v)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
JUNIOR INTERCREDITOR AGREEMENT
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Section 2. PRIORITY OF LIENS. It is the intent of the parties that the
Liens created pursuant to the Junior Security Documents in favor of the Trustee
shall be junior and subject in all respects to the Liens created pursuant to the
Senior Non-Sharing Security Documents. Accordingly, anything herein or in any of
the other Junior Security Documents, the 2009 Notes Indenture or any other
agreement or instrument between any of the Securing Parties and any of the 2009
Noteholders to the contrary notwithstanding, the Trustee, on behalf of itself
and each of the 2009 Noteholders, hereby agrees for the benefit of the
Collateral Agent and the Senior Secured Parties that, notwithstanding the time
of filing or recording of the Liens created by the Junior Security Documents, to
the extent securing such Lien in favor of any of the Senior Secured Parties is
valid and enforceable, the Liens created pursuant to the Junior Security
Documents shall be subordinate to the Liens created pursuant to the Senior
Non-Sharing Security Documents in any "Collateral" under and as defined in the
Senior Non-Sharing Security Documents.
The Collateral Agent and the Senior Secured Parties may release their
Liens against all or any portion of the Collateral at any time but are not
entitled to release or affect the Liens of the Trustee which shall thereafter
continue to be valid and enforceable (as first priority Liens) in and to such
released Collateral unless the conditions in Section 3 hereof are met, at which
time the Liens of the Trustee shall be released. If (i) the Collateral Agent and
the Senior Secured Parties have released all or a portion of their Liens, (ii)
the conditions for an automatic release of the Liens of the Junior Secured
Parties (as defined in the Junior Security Agreement) securing the Junior
Secured Obligations against the Senior Collateral set forth in Section 3 shall
not have been satisfied and (iii) at any later time such Liens in favor of the
Collateral Agent and the Senior Secured Parties are reinstated or re-granted,
the Collateral Agent shall, subject to the applicable provisions of the 2009
Notes Indenture and the Junior Security Documents, be entitled to (and at the
request of the Company, shall) subordinate the Liens of the Trustee and the 2009
Noteholders under the Junior Security Documents to such reinstated Liens in
favor of the Collateral Agent and the Senior Secured Parties, such subordination
to be on the same terms and subject to the same conditions as provided in the
first paragraph of this Section 2.
The Trustee, on behalf of itself and each 2009 Noteholder, hereby
waives any requirement on the part of the Collateral Agent or the Senior Secured
Parties in respect of marshalling of assets upon any exercise of remedies by the
Collateral Agent or the Senior Secured Parties and any requirement that the
Collateral Agent or any Senior Secured Party exercise remedies with respect to
collateral security for the Senior Secured Obligations in any particular order
or any particular manner.
Section 3. RELEASE OF LIENS AND GUARANTEES. The Liens of the Junior
Secured Parties securing the Junior Secured Obligations against the Senior
Collateral will be released automatically (and without any action or consent by
the Trustee or the 2009 Noteholders) at such time, if (1) the Lien of the
Collateral Agent against the Senior Collateral has been released and (2) all the
Solutia Credit Agreement Obligations are unsecured and the revolving facility
thereunder (x) is in a minimum amount of $50,000,000 and (y) has a tenor of no
less than 364 days. In addition, the Liens of the Junior Secured Parties
securing the Junior Secured Obligations against any particular item of Senior
Collateral will be released automatically (and without any action or consent by
the Trustee or the 2009 Noteholders) at such time as such item is sold or
otherwise disposed of and the proceeds thereof applied to the Senior Secured
JUNIOR INTERCREDITOR AGREEMENT
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Obligations to the extent required by the Solutia Credit Agreement or,
alternatively, paid over to the Trustee for application to the Junior Secured
Obligations. In either such event, the Trustee shall execute and deliver such
documents, and do such other acts and things, as may be reasonably requested by
the Company to confirm such release.
Section 4. LIMITATION ON RIGHTS AND REMEDIES. Notwithstanding anything
to the contrary herein, in the other Junior Security Documents or in the 2009
Notes Indenture, the Trustee shall not be entitled to exercise (whether upon its
own initiative or at the direction of any one or more of the 2009 Noteholders)
any rights or remedies in respect of the Liens under the Junior Security
Documents, or to enforce any of the Junior Security Documents, until the Senior
Payment Date; PROVIDED that nothing herein shall prevent the 2009 Noteholders or
the Trustee from declaring an "Event of Default" under the 2009 Notes Indenture,
accelerating the Junior Secured Obligations, bringing suit thereon, filing
proofs of claims or otherwise exercising rights or remedies under the 2009 Notes
Indenture or the Junior Security Documents other than exercising rights or
remedies in respect of their Liens under the Junior Security Documents.
Section 5. NOTICE OF SENIOR PAYMENT DATE. The Collateral Agent shall
promptly notify the Trustee of the occurrence of the Senior Payment Date.
Section 6. MISCELLANEOUS
6.01. NOTICES, ETC. All notices and other communications provided for
hereunder shall be in writing, telecopied or delivered:
(a) if to any of the Securing Parties, care of Solutia Inc., 000
Xxxxxxxxx Xxxxxx Xxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Vice
President and Treasurer, telephone number (000) 000-0000, telecopier number
(000) 000-0000, with a copy in care of Solutia Inc., 000 Xxxxxxxxx Xxxxxx
Xxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: General Counsel, telephone
number (000) 000-0000, telecopier number (000) 000-0000;
(b) if to the Collateral Agent, at its address at Citibank, N.A., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxxxxx,
telephone number (000) 000-0000, telecopier number (000) 000-0000; and
(c) if to the Trustee, at its address at HSBC Bank USA, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (if mailed) or 00 Xxxx 00xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (if delivered), Attention: Issuer Services,
telephone number (000) 000-0000, telecopier number (000) 000-0000.
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and communications
shall, when delivered or telecopied, be effective when delivered or transmitted
by telecopier, respectively.
6.02. WAIVERS. No failure on the part of the Collateral Agent to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of
JUNIOR INTERCREDITOR AGREEMENT
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any other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
6.03. AMENDMENTS, ETC. Except as otherwise herein expressly provided,
the terms of this Agreement and the other Junior Security Documents may be
waived, altered or amended only by an instrument in writing duly executed by
each Securing Party, the Collateral Agent (prior to the Senior Payment Date
only) and the Trustee, with the consent (if and to the extent required by the
0000 Xxxxxxxxx) of the Required 2009 Noteholders, PROVIDED that (i) no such
amendment shall adversely affect the relative rights of any Senior Secured Party
or 2009 Noteholder as against any other Senior Secured Party or 2009 Noteholder
without the prior written consent of such first Senior Secured Party or 2009
Noteholder and (ii) any amendment or waiver (other than an amendment or a waiver
releasing any Collateral) of any provision of the Senior Non-Sharing Security
and Guarantee Agreement or any other Senior Non-Sharing Security Document not
inconsistent with clause (i) above shall, at the written election of the Company
delivered to the Collateral Agent and the Trustee (and without the action by any
other party), be deemed to be an amendment or a waiver of the corresponding
provision, if any, of the Junior Security Agreement or other Junior Security
Document with the same effect as if such amendment or waiver of such provision
had been agreed to in writing in compliance with this Section 6.03. Any such
amendment or waiver shall be binding upon the Collateral Agent, the Trustee each
Senior Secured Party, each 2009 Noteholder and each Securing Party.
6.04. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
6.05. JURISDICTION. Each party hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
Junior Security Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each party hereto hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Junior Security Document shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any other Junior Security Document in the courts
of any jurisdiction.
6.06. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of each of the
parties hereto (PROVIDED that no Securing Party shall assign or transfer its
rights or obligations hereunder without the prior written consent of the
Collateral Agent and the Trustee).
6.07. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
JUNIOR INTERCREDITOR AGREEMENT
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6.08. SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and (b) the invalidity or unenforceability of any provision hereof
in any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
6.09. CAPTIONS. The captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
6.10. ADDITIONAL SUBSIDIARY GUARANTORS. Pursuant to Section 4.19 of
the 2009 Notes Indenture, any Subsidiary of the Company that becomes a
Subsidiary Guarantor thereunder after the date hereof, shall become a
"Subsidiary Guarantor" under this Agreement, and shall grant liens on all
property owned by it that constitutes Collateral under the Junior Security
Documents, by executing and delivering to the Collateral Agent and the Trustee a
Guarantee Assumption Agreement in the form of Exhibit A hereto. Accordingly,
upon the execution and delivery of any such Guarantee Assumption Agreement by
any such Subsidiary, such new Subsidiary shall automatically and immediately,
and without any further action on the part of any Person, become a "Subsidiary
Guarantor" and a "Securing Party" for all purposes of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Junior
Intercreditor Agreement to be duly executed as of the day and year first above
written.
SOLUTIA INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President and Treasurer
SUBSIDIARY GUARANTORS
CPFILMS INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Attorney-in-Fact
MONCHEM, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: President
MONCHEM INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: President
JUNIOR INTERCREDITOR AGREEMENT
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SOLUTIA SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: President
COLLATERAL AGENT
CITIBANK, N.A., as Collateral Agent
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
TRUSTEE
HSBC BANK USA, as Trustee
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
JUNIOR INTERCREDITOR AGREEMENT
EXHIBIT A
[Form of Guarantee Assumption Agreement]
GUARANTEE ASSUMPTION AGREEMENT
GUARANTEE ASSUMPTION AGREEMENT dated as of ________ __, ____ by [NAME
OF ADDITIONAL SUBSIDIARY GUARANTOR], a ________ corporation (the "ADDITIONAL
SUBSIDIARY GUARANTOR"), in favor of HSBC Bank USA, as trustee under the 2009
Notes Indenture under and as defined in the Junior Intercreditor Agreement
referred to below (in such capacity, together with its successors in such
capacity, the "TRUSTEE").
Solutia Inc., a Delaware corporation (the "COMPANY"), the Subsidiary
Guarantors referred to therein (collectively, together with the Company, the
"SECURING PARTIES"), Citibank, N.A., as collateral agent, and the Trustee are
parties to a Junior Intercreditor Agreement dated as of July [___], 2002 (the
"JUNIOR INTERCREDITOR AGREEMENT"). In addition, one or more of the Securing
Parties have executed and delivered in favor of the Trustee one or more "Junior
Security Documents" under and as defined in the Junior Intercreditor Agreement,
including a Junior Security Agreement dated as of July [___] (the "JUNIOR
SECURITY AGREEMENT") between the Securing Parties, said collateral agent and the
Trustee, pursuant to which the Securing Parties have granted collateral
security, in respect of the Junior Secured Obligations as defined the Junior
Secured Obligations. Terms defined in the Junior Intercreditor Agreement and
used herein are used herein as defined therein.
Pursuant to Section 4.19 of the 2009 Notes Indenture, the Additional
Subsidiary Guarantor has guaranteed the obligations of the Company under and in
respect of the 2009 Notes Indenture and the 2009 Notes issued thereunder. As
contemplated by Section 6.10 of the Junior Intercreditor Agreement and Section
6.12 of the Junior Security Agreement, the Additional Subsidiary Guarantor
hereby agrees to become a "Subsidiary Guarantor" and a "Securing Party", under
and for all purposes of the Junior Security Documents, and each of the Annexes
to the Junior Security Agreement shall be deemed to be supplemented in the
manner specified in Appendix A hereto.
In addition, the Additional Subsidiary Guarantor hereby makes the
representations and warranties set forth in Section 2 of the Junior Security
Agreement with respect to itself and the Collateral in which it grants a
security interest thereunder.
GUARANTEE ASSUMPTION AGREEMENT
- 2 -
IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused
this Guarantee Assumption Agreement to be duly executed and delivered as of the
day and year first above written.
[NAME OF ADDITIONAL SUBSIDIARY
GUARANTOR]
By:
------------------------------------
Name:
Title:
Accepted and agreed:
CITIBANK, N.A., as Collateral Agent
By:
--------------------------------
Name:
Title:
HSBC BANK USA, as Trustee
By:
--------------------------------
Name:
Title:
GUARANTEE ASSUMPTION AGREEMENT
- 3 -
Appendix A
SUPPLEMENTS TO ANNEXES TO JUNIOR SECURITY AGREEMENT
SUPPLEMENT TO ANNEX 1:
[to be completed]
SUPPLEMENT TO ANNEX 2:
[to be completed]
SUPPLEMENT TO ANNEX 3:
[to be completed]
SUPPLEMENT TO ANNEX 4:
[to be completed]
SUPPLEMENT TO ANNEX 5:
[to be completed]
SUPPLEMENT TO ANNEX 6:
[to be completed]
SUPPLEMENT TO ANNEX 7:
[to be completed]
SUPPLEMENT TO ANNEX 8:
[to be completed]
JUNIOR SECURITY AGREEMENT
