EXHIBIT 4.10
INTERCREDITOR AND COLLATERAL TRUST AGREEMENT
INTERCREDITOR AND COLLATERAL TRUST AGREEMENT dated as of July 25,
2002, between SOLUTIA INC., a corporation duly organized and validly existing
under the laws of the State of Delaware (the "COMPANY"); CPFILMS INC. ("CPFILMS"
and, individually, a "SUBSIDIARY GUARANTOR"); each of the subsidiaries of the
Company that become "Subsidiary Guarantors hereunder pursuant to Section 8.13
after the date hereof (individually a "SUBSIDIARY GUARANTOR" and, collectively,
with CPFilms, the "SUBSIDIARY GUARANTORS" and, together with the Company, the
"GRANTORS"); CITIBANK, N.A., as administrative agent under the Solutia Credit
Agreement referred to below; BANK OF AMERICA, N.A., as administrative agent
under the Astaris Credit Agreement referred to below; CITIBANK, N.A., as agent
under the Co-gen Participation Agreement referred to below; CITIBANK, N.A., as
collateral agent under the Non-Sharing Intercreditor Agreement referred to
below; and HSBC Bank USA, a banking corporation and trust company duly organized
and validly existing under the laws of the State of New York, as collateral
trustee (in such capacity, together with its successors in such capacity, the
"COLLATERAL TRUSTEE") for the Sharing Secured Parties (as defined below).
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
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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 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 this 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 (a) an Indenture dated as of October 1,
1997 (the "1997 NOTES INDENTURE") between the Company and JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank), as trustee, pursuant to which the
Company has issued its 6.50% Notes due 2002, 7.375% Debentures due 2027 and
6.72% Debentures due 2037 in an aggregate outstanding principal amount of
$600,000,000 as of the date hereof and (b) a Fiscal Agency Agreement dated as of
February 11, 2000 (the "EURO NOTES AGREEMENT") between Solutia Europe S.A./N.V.,
the Company and Kreidietbank S.A. Luxembourgeoise, as Fiscal Agent, pursuant to
which Solutia Europe S.A./N.V. has issued its 6.25% Notes due 2005, guaranteed
by the Company in an aggregate principal amount of EURO200,000,000 as of the
date hereof.
Pursuant to the provisions of the 1997 Notes Indentures and the Euro
Notes Agreement, the Company in certain circumstances may not, and may not
permit any of its Restricted Subsidiaries (as defined therein) to, secure Debt
(as defined in the 1997 Notes Indenture and Euro Notes Agreement) with a lien on
any Principal Property (as defined below) or any shares of stock or indebtedness
of the Company or any such Restricted Subsidiary (such Principal Property,
shares and indebtedness being herein collectively referred to as the "SHARED
PROPERTY") without equally and ratably securing the notes, debentures and other
instruments issued under the 1997 Notes Indenture and the Euro Notes Agreement.
Accordingly, to induce the Solutia Lenders to enter into the Solutia
Credit Agreement as described above and to continue to extend credit under the
Solutia Credit Agreement, to induce the Astaris Lenders to enter into an
Amendment No. 3 to the Astaris Credit Agreement and to continue to extend credit
under the Astaris Credit Agreement, to induce the Co-gen Purchasers to continue
to extend credit and make investments under the Co-gen Participation Agreement
and to induce the Solutia Lenders to extend credit in respect of Designated
Letters of Credit and hedging agreements, the parties hereto hereby agree as
follows:
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Section 1. DEFINITIONS, ETC.
(a) DEFINED TERMS. As used in this Agreement, the following terms have
the meanings specified below:
"ADMINISTRATIVE AGENTS" means collectively, the Solutia Administrative
Agent, together with its successors in such capacity, and the Astaris
Administrative Agent, together with its successors in such capacity.
"ASTARIS ADMINISTRATIVE AGENT" has the meaning assigned to such term
in the preamble to this Agreement.
"ASTARIS COMMITMENTS" means the "Commitments" under and as defined in
the Astaris Credit Agreement or, if no "Commitments" are then outstanding,
then the aggregate unpaid principal amount of the "Advances" (under and as
defined in the Astaris Credit Agreement) owing to the Astaris Lenders.
"BANKRUPTCY EVENT" means, with respect to any Grantor, the institution
of any proceeding by or against any Grantor seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 60 days, or
any of the actions sought in such proceeding (including the entry of an
order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of
its property) shall occur; or any Grantor shall take any corporate action
to authorize any of the actions set forth above.
"CAPITALIZED LEASE OBLIGATION" means, with respect to any Person for
any period, an obligation of such Person to pay rent or other amounts under
a lease that is required to be capitalized for financial reporting purposes
in accordance with GAAP; and the amount of such obligation shall be the
capitalized amount shown on the balance sheet of such Person as determined
in accordance with GAAP.
"CO-GEN INSTRUMENTS" "means the "Instruments" under and as defined in
the Co-gen Participation Agreement.
"COLLATERAL AGENT" means Citibank, N.A., in its capacity as Collateral
Agent under the Non-Sharing Intercreditor Agreement.
"COLLATERAL TRUSTEE" has the meaning assigned to such term in the
preamble to this Agreement.
"COLLATERAL TRUSTEE'S FEES" means all fees, costs and expenses of the
Collateral Trustee of the type described in Section 5.03.
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"COMPANY" has the meaning assigned to such term in the preamble to
this Agreement.
"CREDIT AGREEMENT OBLIGATIONS" means, collectively, (a) in the case of
the Company, the Solutia Credit Agreement Obligations, the Make-Whole
Obligations, the Synthetic Lease Obligations, the Designated Letter of
Credit Obligations, the Hedging Obligations and Term Loan Facility
Obligations, (b) in the case of the Subsidiary Guarantors, all present and
future obligations of the Subsidiary Guarantors under the Non-Sharing
Security and Guarantee Agreement and (c) in the case of both Grantors, all
present and future obligations of the Grantors to the Credit Agreement
Secured Parties hereunder.
"CREDIT AGREEMENT SECURED PARTIES" means, collectively, the Collateral
Agent, the Co-gen Agent, the Co-gen Purchasers, the Solutia Lenders, the
Astaris Lenders, any Term Loan Facility Lenders and the Administrative
Agents (and any affiliate of a Solutia Lender that shall have entered into
the respective hedging agreement giving rise to such Hedging Obligations).
"CREDIT AGREEMENTS" means, collectively the Solutia Credit Agreement,
the Astaris Credit Agreement and the Co-gen Participation Agreement.
"DEBT" of any Person means, without duplication: (a) indebtedness of
such Person for borrowed money, (b) obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) obligations of
such Person to pay the deferred purchase price of property or services
(other than trade accounts payable arising, and accrued expenses incurred,
in the ordinary course of business so long as such trade accounts payable
are payable on customary trade terms or on other trade terms that are more
advantageous to the Company), (d) Capitalized Lease Obligations of such
Person and (e) obligations of such Person under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against
loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (d) above.
"DEBT INSTRUMENTS" means, collectively, (i) the Solutia Credit
Agreement, (ii) the Astaris Guarantee Agreement, (iii) the Co-gen
Participation Agreement, (iv) the Co-gen lease, (v) the Co-gen Instruments,
(vi) the L/C Agreements, (vii) each Hedging Agreement under which a Credit
Agreement Obligation exists, (viii) any agreement pursuant to which a Term
Loan Facility is established and (ix) each Existing Note Indenture and New
Notes Indenture, and any notes or debentures issued thereunder.
"DEFAULT RATE" means, with respect to any advance made by any Sharing
Secured Party hereunder or under any other Sharing Security Document, the
rate per annum at which interest would then be payable on past due
Revolving Credit Base Rate Advances under Section 2.07(b) of the Solutia
Credit Agreement.
"DESIGNATED LETTER OF CREDIT" means, collectively, (a) each letter of
credit issued by a Solutia Lender for the account of the Company or a
Subsidiary that is identified in
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Appendix A hereto and (b) each letter of credit for the account of the
Company hereafter designated by the Company as a "Designated Letter of
Credit" pursuant to Section 3 of the Non-Sharing Intercreditor Agreement.
"DESIGNATED LETTER OF CREDIT OBLIGATIONS" means all obligations of the
Company in respect of Designated Letters of Credit, including any
agreements, applications and other instruments entered into in connection
with such Designated Letters of Credit.
"DISTRIBUTION DATE" means the date on which any funds are distributed
by the Collateral Trustee in accordance with the provisions of Section
4.01.
"EVENT OF DEFAULT" means (i) any "Event of Default" under and as
defined in the Solutia Credit Agreement or the Co-gen Participation
Agreement, (ii) any failure of the Company to pay amounts that become due
and payable under the Astaris Guarantee, (iii) any failure of the Company
to pay principal or interest when due and payable under any L/C Agreement
or (iv) any "Event of Default" under and as defined in any Senior Notes
Document.
"EXISTING MORTGAGED FACILITIES" means the facilities of the Company
located in or near Decatur, Alabama, Indian Orchard, Massachusetts,
Trenton, Michigan, Greenwood, South Carolina and Alvin, Texas, each of
which is subject to a Non-Sharing Mortgage in favor of the Collateral Agent
as security, INTER ALIA, for the Non-Sharing Obligations.
"EXISTING NOTES 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 S.A./N.V., as
applicable, have been issued: the 6.50% notes due 2002, the 7.375%
debentures due 2027, the 6.72% debentures due 2037 and the 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.
"GRANTORS" has the meaning assigned to such term in the preamble to
this Agreement.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement
or other interest or currency exchange rate or commodity price hedging
arrangement entered into with any Solutia Lender (or any affiliate
thereof).
"HEDGING OBLIGATIONS" means obligations of the Company under any
Hedging Agreement.
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
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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.
"INDENTURE TRUSTEES" means (a) in the case of the Existing Notes
Indentures, (i) JPMorgan Chase Bank (as successor to The Chase Manhattan
Bank), in its capacity as indenture trustee under the Indenture dated as of
October 1, 1997 relating to the Company's 6.50% notes due 2002, 7.375%
debentures due 2027 and 6.72% debentures due 2037 and (ii) Kredietbank S.A.
Luxembourgeoise, as Fiscal Agent, relating to Solutia Europe S.A./N.V.'s
6.25% Notes due 2005, guaranteed by the Company (b) in the case of the 2009
Notes Indenture, HSBC Bank USA, in its capacity as indenture trustee, and
(c) in the case of any other New Notes Indenture, any indenture trustee or
fiscal agent under such New Notes Indenture.
"L/C AGREEMENTS" means the reimbursement agreements pursuant to which
Designated Letters of Credit have been (or are in the future) issued.
"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 easement, right of way or other encumbrance on title to real property.
"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.
"MARTINSVILLE FACILITY" means the production facility of CPFilms
located in or near Martinsville, Virginia.
"MORTGAGED FACILITIES" means the Existing Mortgaged Facilities and the
New Mortgaged Facilities.
"NEW MORTGAGED FACILITIES" means the Martinsville Facility and
Pensacola Facility.
"NEW NOTES INDENTURE" means any indenture pursuant to which any senior
debt securities of the Company are issued which, at the time of such
issuance, is designated by the Company as a "New Notes Indenture" pursuant
to Section 7.03 for purposes hereof. The parties hereto acknowledge that
the 2009 Notes Indenture is a "New Notes Indenture".
"NEW NOTES INDENTURE DESIGNATION LETTER" has the meaning ascribed
thereto in Section 7.03.
"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
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Agent, the Co-gen Agent and the Collateral Agent, as the same shall be
modified and supplemented and in effect from time to time.
"NON-SHARING MORTGAGES" means, collectively, one or more instruments
of Mortgage, Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing executed by the Company in favor of the Collateral Agent for
the benefit of the holders of the Non-Sharing Obligations (or in favor of a
trustee for the benefit of the Collateral Agent and the holders of the
Non-Sharing Obligations), covering the Existing Mortgaged Facilities and
securing the Non-Sharing Obligations.
"NON-SHARING OBLIGATIONS" means, collectively, (i) the obligations of
the Grantors 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, each Term Loan Facility Lender
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 Term Loan Facility
Obligations, the Designated Letter of Credit Obligations and the Hedging
Obligations and (ii) any Debt incurred by the Company under a Term Loan
Facility.
"NON-SHARING SECURITY AND GUARANTEE AGREEMENT" means the Restated
Security and Guarantee Agreement dated as of July [___], 2002 between the
Company, the Subsidiary Guarantors and the Collateral Agent, as the same
shall be modified and supplemented and in effect from time to time.
"PENSACOLA FACILITY" means the manufacturing facility of the Company
located in or near Pensacola, Florida.
"PERMITTED INVESTMENTS" shall mean: (a) direct obligations of the
United States of America, or of any agency thereof, or obligations
guaranteed as to principal and interest by the United States of America, or
of any agency thereof, in either case maturing not more than 90 days from
the date of acquisition thereof; (b) certificates of deposit or time
deposits issued by any bank or trust company organized under the laws of
the United States of America or any state thereof and having capital,
surplus and undivided profits of at least $500,000,000, maturing not more
than 90 days from the date of acquisition thereof; (c) fully collateralized
repurchase agreements with a term of not more than 90 days for securities
described in clause (a) of this definition and entered into with a
financial institution satisfying the criteria described in clause (b) of
this definition; (d) commercial paper rated A-1 or better or P-1 by
Standard & Poor's Ratings Services, a division of XxXxxx-Xxxx Companies,
Inc., or Xxxxx'x Investors Services, Inc., respectively, maturing not more
than 90 days from the date of acquisition thereof; in each case so long as
the same (x) provide for the payment of principal and interest (and not
principal alone or interest alone) and (y) are not subject to any
contingency regarding the payment of principal or interest; and (e) mutual
funds which invest in securities issued or guaranteed by the United States
of America or an agency or instrumentality thereof representing a full
faith and credit obligation of the United States of America and, with
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respect to each of the foregoing, that is maintained in book-entry form on
the records of a Federal Reserve Bank.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government
or any political subdivision or agency thereof.
"PRINCIPAL PROPERTY" has the meaning assigned to such term in the
Existing Notes Indentures, in each case as in effect on the date hereof and
without giving effect to any modifications or supplements after the date
hereof.
"RELEVANT SHARING OBLIGATIONS" means at any time (a) in the case of
any Credit Agreement Secured Party, the aggregate amount of Credit
Agreement Obligations held by such Credit Agreement Secured Party at such
time that are due and payable (including for these purposes amounts
required to be delivered as cover for letters of credit) and (b) in the
case of any holder of Senior Notes, the sum of (x) the aggregate principal
amount of such Senior Note outstanding at such time PLUS (y) accrued and
unpaid interest on such Senior Note outstanding at such time PLUS (z) any
other amounts owing on such Senior Notes at such time. For purposes hereof,
prior to the date upon which the Collateral Trustee shall have been
notified of a Triggering Event, Hedging Obligations shall be excluded from
the determination of Relevant Sharing Obligations.
"REQUISITE SHARING SECURED PARTIES" means, at any time, Solutia
Lenders, Astaris Lenders, Co-gen Purchasers, Term Loan Facility Lenders and
holders of the Senior Notes holding at such time a majority in principal
amount of the sum of (a) the Solutia Revolving Credit Exposures,
outstanding Solutia Term Advances and unused Solutia Commitments (each as
defined in the Solutia Credit Agreement), (b) the Make-Whole Obligations
(which, for purposes hereof, shall be deemed to be equal to 50% of the
Astaris Commitments), (c) the Co-gen Instruments, (d) the Term Loan
Facility Obligations and (e) the Senior Notes of all Series then
Outstanding (as the term "Outstanding" is defined in the Senior Notes
Indentures). For purposes hereof, the Collateral Trustee shall be entitled
to conclusively rely and act upon a certification from the Solutia
Administrative Agent as to the Solutia Revolving Credit Exposures,
outstanding Solutia Term Advances and unused Solutia Commitments, upon a
certification from the Astaris Administrative Agent as to the Make-Whole
Obligations, upon a certification from the Co-gen Agent as to the Co-gen
Instruments, upon a certificate from the Company or the relevant agent
under the Term Loan Facility as to the Term Loan Facility Obligations and
upon a certification from the Indenture Trustees as to the aggregate amount
of Senior Notes of all Series Outstanding at any time.
Notwithstanding the foregoing, to authorize any release pursuant to
Section 7.02(b), or any amendment pursuant to Section 8.02(ii), "Requisite
Sharing Secured Parties" means (i) the Majority Lenders under the Solutia
Credit Agreement, (ii) the Majority Lenders under the Astaris Credit
Agreement, (iii) the Majority Purchasers under the Co-gen Participation
Agreement, (iv) the holders of a majority in principal amount of the Term
Loan Facility Obligations and (v) the holders of not less than a majority
in principal amount of each Series (voting separately) of Senior Notes
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then Outstanding. For purposes hereof, the Collateral Trustee shall be
entitled to conclusively rely upon a certification from the Solutia
Administrative Agent that such Majority Lenders under the Solutia Credit
Agreement have authorized such release or amendment, upon a certification
from the Astaris Administrative Agent that such Majority Lenders under the
Astaris Credit Agreement have authorized such release or amendment, upon a
certification from the Co-gen Agent that such Majority Purchasers have
authorized such release or amendment, upon a certification from the Company
or the relevant agent under the Term Loan Facility that holders of a
majority of the Term Loan Facility Obligations have authorized such release
or amendment and upon a certification from the Indenture Trustees that such
majority in principal amount of each Series of Senior Notes have authorized
such release or amendment.
"RESPONSIBLE OFFICER" means any officer within the corporate trust
department of the Collateral Trustee, including any vice president,
assistant vice president, assistant secretary, assistant treasurer, trust
officer or any other officer of the Collateral Trustee who customarily
performs functions similar to those performed by the Persons who at the
time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such Person's knowledge of and familiarity
with the particular subject and who shall have direct responsibility for
the administration of this Agreement.
"RESTRICTED SUBSIDIARY" has the meaning assigned to such term in the
Existing Notes Indentures, in each case as in effect on the date hereof and
without giving effect to any modifications or supplements after the date
hereof.
"SECURITY DOCUMENTS" means, collectively, the Sharing Security
Documents and the Non-Sharing Security Documents under and as defined in
the Non-Sharing Intercreditor Agreement.
"SENIOR NOTES" means the notes and debentures issued pursuant to any
Existing Notes Indenture or New Notes Indenture.
"SENIOR NOTES DOCUMENTS" means, collectively, the Existing Notes
Indenture, each New Notes Indenture and the Senior Notes issued pursuant to
any Existing Notes Indenture or New Notes Indenture.
"SENIOR NOTES OBLIGATIONS" means the obligations of the Company to pay
the principal of, premium, if any, interest on and any other amount owing
on, the notes and debentures issued under the Existing Notes Indentures and
any New Notes Indenture.
"SERIES" means, with respect to any Senior Notes, all of the Senior
Notes having the same interest rate, maturity and designation.
"SHARED COLLATERAL" means the property from time to time subject to
the Liens of the Sharing Security Documents.
"SHARED PROPERTY" has the meaning assigned to such term in the
preamble to this Agreement.
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"SHARING MORTGAGES" means, collectively, one or more instruments of
Mortgage, Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing executed by the Company or CPFilms in favor of the
Collateral Trustee for the benefit of the holders of the Sharing
Obligations (or in favor of a trustee for the benefit of the Collateral
Trustee and the holders of the Sharing Obligations), covering the Mortgaged
Facilities and securing the Sharing Obligations.
"SHARING OBLIGATIONS" means, collectively, (i) the Non-Sharing
Obligations and (ii) the Senior Notes Obligations.
"SHARING PERCENTAGE" means at any time (a) in the case of any Credit
Agreement Secured Party, the aggregate amount of Credit Agreement
Obligations held by such Credit Agreement Secured Party at such time that
are due and payable (including for these purposes amounts required to be
delivered as cover for letters of credit) expressed as a percentage of the
sum (herein, the "RELEVANT SUM") of (w) the total amount of Credit
Agreement Obligations that are then due and payable PLUS (x) the sum of the
aggregate principal amount of the Senior Notes outstanding at such time
PLUS (y) accrued and unpaid interest on such Senior Notes PLUS (z) any
other amounts owing on such Senior Notes and (b) in the case of any holder
of Senior Notes, the sum of (x) the aggregate principal amount of the
Senior Notes held by such holder PLUS (y) accrued and unpaid interest on
such Senior Notes PLUS (z) any other amounts owing on such Senior Notes
expressed as a percentage of the Relevant Sum. For purposes hereof, (i)
prior to the date upon which the Collateral Trustee shall have been
notified of a Triggering Event, Hedging Obligations shall be excluded from
the determination of Sharing Percentages and (ii) for purposes of
calculations hereunder, all amounts denominated in Euros (as defined in the
Solutia Credit Agreement) shall be converted into the Dollar Equivalent (as
therein defined) thereof as of the applicable date of calculation.
"SHARING SECURED PARTIES" means, collectively, the Collateral Agent,
the Collateral Trustee and the other holders from time to time of the
Sharing Obligations.
"SHARING SECURITY AGREEMENT" means the Sharing Security Agreement
dated as of July [___], 2002 between the Company, CPFilms and the
Collateral Trustee, as the same shall be modified and supplemented and in
effect from time to time.
"SHARING SECURITY DOCUMENTS" means, collectively, the Sharing Security
Agreement, each Sharing Mortgage, and any other pledge agreements, security
agreements, assignment agreements, mortgages, deeds of trust or other
instruments providing for collateral security on Shared Property from time
to time executed by any Grantor in favor of the Collateral Trustee.
"SOLUTIA ADMINISTRATIVE AGENT" has the meaning assigned to such term
in the preamble to this Agreement.
"SOLUTIA COMMITMENTS" means the "Commitments" under and as defined in
the Solutia Credit Agreement .
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"SOLUTIA CREDIT AGREEMENT OBLIGATIONS" means the principal and
interest on the Advances 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.
"SOLUTIA REVOLVING CREDIT EXPOSURES" means the "Revolving Credit
Exposures" under and as defined in the Solutia Credit Agreement.
"SOLUTIA TERM ADVANCES" means the "Term Advances" under and as defined
in the Solutia Credit Agreement.
"SUBSIDIARY" has the meaning assigned to such term in the Existing
Notes Indenture, in each case as in effect on the date hereof and without
giving effect to any modifications or supplements after the date hereof.
"SUBSIDIARY GUARANTORS" has the meaning assigned to such term in the
Solutia Credit Agreement.
"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".
"TERM LOAN FACILITY" means any term loan facility satisfying the
conditions set forth in Section 6.02(f)(x) of the Solutia Credit Agreement
and designated by the Company at the time of such incurrence as a
"Non-Sharing Obligation" hereunder (with a copy of such designation being
delivered to the Collateral Trustee).
"TERM LOAN FACILITY LENDERS" means the lenders from time to time
holding any Term Loan Facility Obligations.
"TERM LOAN FACILITY OBLIGATIONS" means any Debt incurred by the
Company under a Term Loan Facility.
"TRIGGERING EVENT" means the occurrence of any one or more of the
following: (i) the failure to pay in full the principal of any Sharing
Obligation upon final maturity thereof, (ii) the occurrence of any "Event
of Default" under and as defined in any Senior Notes Document, (iii) the
occurrence of a Bankruptcy Event with respect to any Grantor, (iv) the
acceleration of the maturity of any Sharing Obligations (other than solely
the Make-Whole Obligations or the Hedging Obligations) upon the occurrence
of an "Event of Default" under and as defined in the documentation
governing such Sharing Obligation or (v) the issuance of any direction by
the Collateral Agent to the Collateral Trustee, following the occurrence
and during the continuance of any Event of Default, to
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commence exercise of any of the Collateral Trustee's rights and remedies
hereunder or under any of the Sharing Security Documents.
"TRUST ESTATE" means the right, title and interest of the Collateral
Trustee in, to and under the Sharing Security Documents.
"2009 NOTES INDENTURE" means the Indenture dated as of July 9, 2002
between SOI Funding Corp., a Delaware corporation, and HSBC Bank USA, a New
York banking corporation, as trustee, providing for the issuance by SOI
Funding Corp. of its 11.25% Senior Secured Notes due 2009, as modified
pursuant to a Supplemental Indenture providing for the assumption by the
Company of all of the obligations of SOI Funding Corp. under such Indenture
and in respect of such Senior Secured Notes.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as in
effect from time to time in the State of New York.
(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.
Section 2. REPRESENTATIONS AND WARRANTIES BY GRANTORS. Each Grantor
represents and warrants to the Sharing Secured Parties that:
2.01. INCORPORATION; GOOD STANDING. Such Grantor has been duly
organized, is validly existing and in good standing as a corporation or other
applicable entity under the laws of the jurisdiction of its organization, is
duly qualified to transact business and is in good standing in each state where
any Shared Collateral is located except where failure to be so qualified would
not have a Material Adverse Effect (as defined in the Solutia Credit Agreement).
2.02. CORPORATE AUTHORITY; NO BREACH. The execution, delivery and
performance by such Grantor of this Agreement and the Sharing Security Documents
to which it is a party, and the other transactions contemplated hereby and
thereby, are within such Grantor's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene (i) such
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Grantor's charter or bylaws or (ii) law or any contractual restriction binding
on or affecting such Grantor.
2.03. NO CONSENTS OR APPROVALS. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for the due execution,
delivery and performance by such Grantor of this Agreement or the Sharing
Security Documents to which it is a party, other than those authorizations,
approvals, notices, filings and actions that have been obtained, filed or taken
on or before the date hereof by such Grantor or the Company. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is required for the
transactions contemplated hereby or thereby, except for (i) filings and
recordings in respect of the Security Documents and (ii) the authorizations,
approvals, actions, notices and filings (x) the failure to obtain would not have
a Material Adverse Effect (as defined in the Solutia Credit Agreement) or (y)
which have been duly obtained, taken, given or made and are in full force and
effect.
2.04. ENFORCEABLE OBLIGATIONS, ETC. This Agreement has been and each
of the Sharing Security Documents to which it is a party when delivered
hereunder will have been, duly executed and delivered by such Grantor. This
Agreement is, and each of the Sharing Security Documents to which it is a party
when delivered hereunder will be, the legal, valid and binding obligation of
such Grantor enforceable against such Grantor in accordance with their
respective terms.
Section 3. DECLARATION AND ACCEPTANCE OF TRUST; REMEDIES.
3.01 DECLARATION AND ACCEPTANCE OF TRUST. The Collateral Trustee
hereby declares, and each of the Grantors agrees, that the Collateral Trustee
holds the Trust Estate as trustee in trust under this Agreement for the equal
and ratable benefit of the Sharing Secured Parties as provided herein. By
acceptance of the benefits of this Agreement and the Sharing Security Documents,
each Sharing Secured Party (whether or not a signatory hereto) (i) consents to
the appointment of the Collateral Trustee as trustee hereunder, (ii) confirms
that the Collateral Trustee shall have the authority to act as the exclusive
agent of such Sharing Secured Party for enforcement of any remedies under or
with respect to the Sharing Security Documents and the giving or withholding of
any consent or approval under the Shared Collateral or any Grantor's obligations
with respect thereto and (iii) agrees that, except as expressly provided in this
Agreement, it shall not take any action to enforce any of such remedies or give
any such consents or approvals.
3.02 DETERMINATIONS RELATING TO SHARED COLLATERAL. In the event (i)
the Collateral Trustee shall at any time receive any written request from any
Grantor under a Sharing Security Document for consent or approval with respect
to any matter or thing relating to any Shared Collateral or such Grantor's
obligations with respect thereto or (ii) there shall be due to or from the
Collateral Trustee under the provisions of any Sharing Security Document any
performance or the delivery of any instrument or (iii) a Responsible Officer of
the Collateral Trustee shall receive notice of any nonperformance by any Grantor
of any covenant or any breach of any representation or warranty set forth in any
Sharing Security Document, then, in each such event, the Collateral Trustee
shall advise each Administrative Agent, the Co-gen Agent, the Collateral
SHARING INTERCREDITOR AGREEMENT
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Agent and each Indenture Trustee of the matter or thing as to which consent has
been requested or the performance or instrument or other document required to be
delivered or the nonperformance or breach of which the Collateral Trustee has
received notice. Subject to the provisions of Section 7.02(b) and 8.02(ii), the
Collateral Agent shall at all times have the exclusive authority to direct the
Collateral Trustee's response to any of the events or circumstances contemplated
in clauses (i), (ii) or (iii) above.
3.03 ACKNOWLEDGEMENT OF LIEN PRIORITY. The Grantors and the Sharing
Secured Parties (by acceptance of this Agreement) each agrees that the Lien of
the Non-Sharing Mortgages on each Existing Mortgaged Facility is senior in right
of security to the Lien of the Sharing Mortgages on each such Existing Mortgaged
Facility to the extent of the "Senior Lien Limit" under and as defined in the
Non-Sharing Mortgages covering the Existing Mortgaged Facilities. The Collateral
Trustee agrees at any time and from time to time, prior to the time that a
Responsible Officer of the Collateral Trustee shall have actual knowledge of the
occurrence of a Triggering Event, to execute and deliver such supplements to the
Sharing Mortgages covering the Existing Mortgaged Facilities, as the Collateral
Agent shall request in order to acknowledge an increase in the "Senior Lien
Limit" under and as defined in the Non-Sharing Mortgages covering the Existing
Mortgaged Facilities.
3.04 REMEDIES.
(a) NOTICE OF TRIGGERING EVENT. Upon becoming aware of the occurrence
of any Triggering Event, the Solutia Administrative Agent, the Astaris
Administrative Agent, the Co-gen Agent, the Collateral Agent or any Indenture
Trustee, as applicable, shall promptly give written notice thereof to the
Collateral Trustee, and the Collateral Trustee, upon receipt of such notice,
shall promptly notify the Solutia Administrative Agent, the Astaris
Administrative Agent, the Co-gen Agent, the Collateral Agent, the Indenture
Trustees and the Grantors in writing that a Triggering Event has occurred.
(b) DIRECTIONS TO COLLATERAL TRUSTEE. The Collateral Agent shall at
all times (whether before or after the occurrence of a Triggering Event) have
the right and authority to direct the time, method and place of conducting any
proceeding for the exercise of any right or remedy available to the Collateral
Trustee with respect to the Shared Collateral, or of exercising any trust or
power conferred on the Collateral Trustee, or for the taking of any other action
authorized by the instruments comprising the Trust Estate (including the making
of any determinations to be made by the Collateral Trustee thereunder); PROVIDED
that (i) following the occurrence of a Triggering Event, the Requisite Sharing
Secured Parties shall have the right at any time to assume such right and
authority of the Collateral Agent by notice to the Administrative Agents, the
Co-gen Agent, the Indenture Trustees, the Collateral Agent and the Collateral
Trustee and, thereafter, shall have the exclusive right and authority to direct
the Collateral Trustee as to such matters and (ii) nothing in this Section 3.04
shall impair the right of the Collateral Trustee in its discretion to take any
action deemed proper by the Collateral Trustee and which is not inconsistent
with such direction by the Collateral Agent or Requisite Sharing Secured
Parties, as applicable.
3.05 RIGHT TO MAKE ADVANCES. In the event an advance of funds shall at
any time be required in the reasonable judgment of the Collateral Agent, for the
preservation or
SHARING INTERCREDITOR AGREEMENT
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maintenance of any Shared Collateral, any Credit Agreement Secured Party, with
the consent of the Collateral Agent (or, if the Requisite Sharing Secured
Parties shall have assumed the right and authority of the Collateral Agent as
contemplated by Section 3.04(b), with the consent of the Requisite Sharing
Secured Parties), shall be entitled to make such advance on behalf of, or in
lieu of, the Collateral Trustee after reasonable notice to the Company of its
intention to do so but without notice to any other Sharing Secured Party. Each
such advance shall constitute a Collateral Trustee's Fee and shall be repaid as
if such advance were a Collateral Trustee's Fee, with interest at the applicable
Default Rate, by the Company upon demand by the Collateral Trustee, and in any
event, whether or not such demand shall have been made, out of the proceeds of
any Shared Collateral distributed pursuant to clause FIRST of Section 4.01. In
the event any Sharing Secured Party shall receive any funds which, under this
Section 3.05, belong to the Collateral Trustee or any other Sharing Secured
Party, such Sharing Secured Party shall remit such funds promptly to the
Collateral Trustee for distribution to the Collateral Trustee or such other
Sharing Secured Party, as the case may be, and prior to such remittance shall
hold such funds in trust for the Collateral Trustee or such other Sharing
Secured Party, as the case may be.
3.06 NATURE OF SHARING SECURED PARTIES' RIGHTS. All of the Sharing
Secured Parties shall be bound by any instruction or direction given by the
Collateral Agent or the Requisite Sharing Secured Parties, as applicable,
pursuant to this Section 3.
Section 4. APPLICATION OF CERTAIN AMOUNTS.
4.01 APPLICATION OF PROCEEDS. Except as otherwise herein expressly
provided, including Section 3.03 hereof, the proceeds of any collection, sale or
other realization of all or any part of the Shared Collateral pursuant to any of
the Sharing Security Documents, and any other cash at the time held by the
Collateral Trustee under this Agreement or any of the Sharing Security
Documents, shall be applied by the Collateral Trustee as soon as practicable
after receipt (or as and when required by the relevant Sharing Security
Document) as follows:
FIRST, to the Collateral Trustee in an amount equal to the Collateral
Trustee's Fees which are unpaid as of the applicable Distribution Date PLUS
the amount of Collateral Trustee's Fees advanced or paid by any Person
(other than the Company) which has theretofore advanced or paid any such
Collateral Trustee's Fees and any amount referred to in Section 3.05 paid
by any Person (with interest thereon at the applicable Default Rate) which
amount the Collateral Trustee shall pay to such Person (and to the extent
such amount refers to amounts advanced pursuant to Section 3.05, a like
amount of such advance shall be discharged);
SECOND, after and giving effect to the payment in full of the Sharing
Obligations referred to in clause FIRST above, to the Sharing Secured
Parties equally and ratably, each in proportion to their respective Sharing
Percentages of the Relevant Sharing Obligations then held by them, until
all the Sharing Obligations have been paid in full (or monies set aside for
such payment in full as provided in the next paragraph); and
THIRD, after payment in full of all Sharing Obligations (or the set
aside of monies for such payment in full as provided in the next paragraph)
and the termination of all of
SHARING INTERCREDITOR AGREEMENT
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the commitments and letters of credit under the Credit Agreements, to the
applicable Grantor or its successors or assigns, as its interests may
appear.
In the event that at the time of any application of monies pursuant to
clause SECOND above any Senior Note Obligations held by any holder of Senior
Notes shall not have been declared (or become) due and payable, then on the date
of such application, the Collateral Trustee shall set aside the monies that
would otherwise have been paid to such holder in respect of such Senior Note
Obligations into a segregated collateral account for the exclusive right and
benefit of such holder, and shall notify the respective Indenture Trustee for
such Senior Note Obligations of the amount so deposited into such segregated
collateral account; PROVIDED that solely with respect to Senior Notes
Obligations under the 2009 Notes Indenture and solely with respect to the
proceeds of a disposition constituting an Asset Sale (as defined in the 2009
Notes Indenture), if no Triggering Event or Event of Default (as defined in the
2009 Notes Indenture) has occurred and is continuing, the monies otherwise
allocable to the 2009 Notes pursuant to the foregoing shall be paid to the
Company for use in accordance with the third and fourth paragraphs of Section
4.12(a) of the 2009 Notes Indenture and otherwise subject to the terms and
conditions set forth therein. The balance from time to time held in any such
segregated collateral account shall be invested in such Permitted Investments as
the Collateral Trustee shall from time to time in its discretion determine and
shall be available for application to the Senior Note Obligations held by such
holder upon request of such holder (or an Indenture Trustee on its behalf) until
such time as all such Senior Note Obligations have been paid in full, PROVIDED
that if (a) any such Senior Note Obligations shall have been declared (or
become) due and payable and (b) no such request shall have been received by the
Collateral Trustee for application to such Senior Note Obligations within the
Applicable Period after such Senior Note Obligations have been declared (or
become) due and payable, then the portion of such monies that would otherwise
have been applied to such Senior Note Obligations shall be applied by the
Collateral Trustee in the manner specified in clause SECOND or, if applicable,
clause THIRD above.
For purposes hereof, "APPLICABLE PERIOD" means (a) two years with
respect to the 6.25% Euro Notes due 2005 issued by Solutia Europe S.A./N.V., (b)
three years with respect to the 6.50% notes due 2002, 7.375% debentures due 2027
and 6.72% debentures due 2037, in each case issued by the Company and (c) with
respect to Senior Note Obligations under any New Notes Indenture, such period as
is prescribed in such New Notes Indenture for the discharge from trust of
unclaimed monies deposited with the applicable trustee or paying agent.
The Company shall deliver to the applicable Indenture Trustee, within
5 days after the applicable Senior Note Obligations have been declared (or
become) due and payable, notice that monies referred to in the second paragraph
of this Section 4.01 have been set aside into a segregated collateral account
for the exclusive right and benefit of the holders of such Senior Notes
Obligations.
4.02 RELIANCE BY COLLATERAL TRUSTEE; PAYMENTS. The Collateral Trustee
shall be entitled to conclusively rely upon a certificate from each
Administrative Agent and the Co-gen Agent as to the aggregate amount of Credit
Agreement Sharing Obligations that on any Distribution Date are held by any
Credit Agreement Secured Party and as to the amount thereof that are due and
payable, and shall remit the amount of any cash to be applied pursuant to clause
SECOND of Section 4.01 to the Credit Agreement Sharing Obligations that are then
due and
SHARING INTERCREDITOR AGREEMENT
- 17 -
payable directly to such Administrative Agent or the Co-gen Agent, as applicable
(it being understood that, for purposes hereof, amounts to be applied to
Designated Letter of Credit Obligations shall be remitted directly to the
Collateral Agent to be held as cover for the Designated Letter of Credit
Obligations as provided in Section 5.04 of the Non-Sharing Security and
Guarantee Agreement). Similarly, the Collateral Trustee shall be entitled to
conclusively rely upon a certificate from the Indenture Trustees as to the
aggregate amount of Senior Note Obligations that on any Distribution Date are
held by any holder of Senior Notes and as to the amount thereof that are due and
payable, and shall, except to the extent provided in the second paragraph of
Section 4.01, remit the amount of any cash to be applied pursuant to clause
SECOND of Section 4.01 to the Senior Note Obligations that are then due and
payable directly to the respective Indenture Trustees.
4.03 PAYMENT PROVISIONS. For the purposes of applying the provisions
of Section 4.01, all interest to be paid on any of the Sharing Obligations
pursuant to the terms of any Debt Instrument shall, as among the Sharing Secured
Parties and irrespective of whether such interest is or would be recognized or
allowed in any bankruptcy or similar proceeding, be treated as a Sharing
Obligation for purposes hereof.
4.04 CERTAIN PROCEEDS OF SHARED COLLATERAL. Anything herein or in any
of the other Sharing Security Documents to the contrary notwithstanding, the
Collateral Trustee shall promptly remit to the Company any amounts standing to
the credit of the Shared Collateral Account under and as defined in the Sharing
Security Agreement if, prior to the time that a Responsible Officer of the
Collateral Trustee shall have actual knowledge of the occurrence of a Triggering
Event, the Collateral Trustee shall be instructed by the Collateral Agent to
remit such amounts to the Company.
Section 5. AGREEMENTS WITH COLLATERAL TRUSTEE.
5.01 DELIVERY OF DEBT INSTRUMENTS. On or before the date hereof, the
Company shall have delivered to the Collateral Trustee a true and complete copy
of each of the Debt Instruments as in effect on the date hereof. Promptly upon
the execution thereof, the Company shall deliver to the Collateral Trustee a
true and complete copy of any and all amendments, modifications or supplements
to any Debt Instrument and of any Hedging Agreement or New Notes Indenture
hereafter entered into constituting a Debt Instrument.
5.02 INFORMATION AS TO HOLDERS. Each Administrative Agent, the Co-gen
Agent and the applicable Indenture Trustee shall deliver to the Collateral
Trustee within 30 days after request by the Collateral Trustee, a list setting
forth (as of the date of such request), (a) in the case of the Administrative
Agents and the Co-gen Agent, for each Debt Instrument pursuant to which any
Credit Agreement Sharing Obligations are outstanding and (b) in the case of the
applicable Indenture Trustee, for the Senior Notes, (i) the aggregate principal
amount then outstanding thereunder, (ii) the interest rate or rates then in
effect thereunder, (iii) the amount thereof then due and payable and (iv) the
names of the holders thereof and the unpaid principal amount thereof then due
and payable to each such holder. In addition, each Administrative Agent, the
Co-gen Agent and the applicable Indenture Trustee shall furnish to the
Collateral Trustee within 30 days of a request therefor a list (as of the date
of such request) setting forth the name and address of each party to whom
notices must be sent under (x) in the case of the
SHARING INTERCREDITOR AGREEMENT
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Administrative Agents and the Co-gen Agent, the Debt Instruments pursuant to
which any Credit Agreement Sharing Obligations are outstanding and (y) in the
case of the applicable Indenture Trustee, the Senior Notes Documents, and the
Company agrees to furnish promptly to the Collateral Trustee any changes or
additions to such list.
5.03 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) COSTS AND EXPENSES. The Grantors jointly and severally agree to
pay (i) to the Collateral Trustee, from time to time upon demand, compensation
(which shall not be limited by any provision of law in regard to compensation of
a trustee of an express trust) for its services hereunder and for administering
the Trust Estate, as heretofore or from time to time agreed upon in writing
between the Collateral Trustee and the Company, (ii) all reasonable
out-of-pocket expenses incurred by the Collateral Trustee and its affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Collateral Trustee, in connection with the preparation and administration of
this Agreement or any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (iii) all reasonable out-of-pocket expenses
incurred or required to be advanced by the Collateral Trustee in connection with
the administration of the Trust Estate or the preservation, protection or
defense of the Collateral Trustee's rights under this Agreement and in and to
the Shared Collateral and the Trust Estate, (iv) all out-of-pocket expenses
incurred by the Collateral Trustee, including the fees, charges and
disbursements of any counsel for the Collateral Trustee, in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section 5.03, including in connection with any
workout, restructuring or negotiations in respect thereof and (v) all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any other document referred to therein.
(b) INDEMNIFICATION BY THE GRANTORS. The Grantors jointly and
severally agree to indemnify and hold harmless the Collateral Trustee and its
directors, officers, employees, agents and advisors from and against any and all
claims, losses, liabilities, obligations, damages and expenses (including
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against the Collateral Trustee or any such Person (hereinafter the
"INDEMNIFICATION AMOUNT") arising out of, related to or in connection with (i)
this Agreement or any other Security Document (including the enforcement of any
Security Document) or (ii) any refund or adjustment of any amount paid or
payable to the Collateral Trustee under or in respect of any Security Document
or any Shared Collateral, or any interest thereon, which may be ordered or
otherwise required by any Person, except to the extent such claims, losses,
liabilities, damages and expenses are found by a court of competent jurisdiction
to have resulted from such Person's gross negligence or willful misconduct. If
the Grantors fail to pay on demand the Indemnification Amount, interest will
accrue thereon at a rate per annum equal to that specified in Section 2.07(b) of
the Solutia Credit Agreement from the scheduled date for payment thereof until
the actual date of payment and such interest shall be added to the
Indemnification Amount.
(c) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the extent permitted by
applicable law, no Grantor shall assert, and each Grantor hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as
SHARING INTERCREDITOR AGREEMENT
- 19 -
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby.
(d) PAYMENTS. All amounts due under this Section 5.03 shall be payable
promptly after written demand therefor.
5.04 FURTHER ASSURANCES. At any time and from time to time, upon the
written request of the Collateral Agent or the Collateral Trustee, and at the
expense of the Grantors, each Grantor shall promptly execute and deliver any and
all such further instruments and documents and take such further action as is
necessary or desirable or as the Collateral Trustee reasonably deems necessary
or desirable in obtaining the full benefits of this Agreement.
Section 6. THE COLLATERAL TRUSTEE.
6.01 CERTAIN DUTIES. The Collateral Trustee's duties in respect of the
Trust Estate shall include the taking of action with respect to applications of
the Grantors or others for consents, waivers, releases or other matters relating
to the Trust Estate or the Shared Collateral as is explicitly required of the
Collateral Trustee pursuant to the terms hereunder and the prosecution following
any Triggering Event of any action or proceeding or the taking of any
nonjudicial remedial action as shall be determined to be required pursuant to
the provisions of Sections 3.02 and 3.04. The Collateral Trustee's sole duty
with respect to the custody, safekeeping and physical preservation of any Shared
Collateral in its possession, under the Uniform Commercial Code or otherwise,
shall be to deal with such Shared Collateral in the same manner as it
customarily deals with similar collateral of other parties held by it.
6.02 EXCULPATORY PROVISIONS.
(a) NO REPRESENTATIONS. The Collateral Trustee shall not be
responsible in any manner whatsoever for the correctness of any recitals,
statements, representations or warranties herein contained, all of which are
made solely by the Grantors. The Collateral Trustee makes no representations as
to the value or condition of the Trust Estate or any part thereof, or as to the
title of the Grantors thereto or as to the security afforded by the Sharing
Security Documents or this Agreement or as to the validity, execution (except
its own execution thereof), enforceability, legality or sufficiency of the
Sharing Security Documents or this Agreement or of the Sharing Obligations, and
the Collateral Trustee shall incur no liability or responsibility with respect
to any such matters. The Collateral Trustee shall not be responsible for
insuring the Trust Estate or for the payment of taxes, charges, assessments or
Liens upon the Trust Estate or otherwise as to the maintenance of the Trust
Estate, including as to the preparation or filing of any Uniform Commercial Code
financing statements.
(b) LIMITATIONS UPON DUTIES. The Collateral Trustee shall not be
required to ascertain or inquire as to the performance by any Grantor or any
other Person of any of the covenants or agreements contained herein, in the
Sharing Security Documents or in any Debt Instrument or any other agreement or
instrument referred to therein. Whenever it is necessary for the Collateral
Trustee to ascertain the amount of Sharing Obligations then held by a Sharing
Secured Party, the Collateral Trustee may conclusively rely on a certificate of
the Solutia Administrative Agent (in the case of the Solutia Credit Agreement
Obligations and the
SHARING INTERCREDITOR AGREEMENT
- 20 -
Designated Letter of Credit Obligations), the Astaris Administrative Agent (in
the case of the Make-Whole Obligations), the Co-gen Agent (in the case of the
Synthetic Lease Obligations), the Company or the relevant agent under the Term
Loan Facility (in the case of the Term Loan Facility Obligations) and the
applicable Indenture Trustee (in the case of the Senior Notes Obligations) as to
such amount.
(c) LIMITATIONS UPON LIABILITY. The Collateral Trustee shall not be
personally liable for any action taken or omitted to be taken by it in
accordance with this Agreement, the Sharing Security Documents or any Debt
Instrument, except for such actions or omissions that are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of the Collateral Trustee. The
Collateral Trustee and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company and its
Subsidiaries as though the Collateral Trustee were not the collateral trustee
hereunder.
6.03 DELEGATION OF DUTIES. The Collateral Trustee may execute any of
the trusts or powers hereof and perform any duty hereunder either directly or by
or through agents or attorneys-in-fact which it shall select with due care. The
Collateral Trustee shall not be responsible for the negligence or willful
misconduct of any agents or attorneys-in-fact selected by it with due care.
6.04 RELIANCE BY COLLATERAL TRUSTEE.
(a) RELIANCE UPON CERTIFICATES OF COMPANY. Whenever in the
administration of the trusts of this Agreement the Collateral Trustee shall deem
it necessary or advisable that a matter be proved or established in connection
with the taking of any action hereunder by the Collateral Trustee, such matter
(unless other evidence in respect thereof be herein or in the Sharing Security
Documents specifically prescribed) may be deemed to be conclusively provided or
established by a certificate of an officer of the Company delivered to the
Collateral Trustee, and such officers' certificate shall be full warranty to
Collateral Trustee for any action taken, suffered or omitted in reliance
thereon.
(b) CONSULTATION WITH COUNSEL. The Collateral Trustee may consult with
counsel of its own selection, and any opinion or advice of such counsel (which
may be in-house counsel for the Collateral Trustee) shall be full and complete
authorization and protection in respect of any action taken or suffered by it
hereunder in accordance therewith. The Collateral Trustee shall have the right
at any time to seek instructions concerning the administration of the Trust
Estate from any court of competent jurisdiction.
(c) RELIANCE UPON RESOLUTIONS, ETC. The Collateral Trustee may
conclusively rely, and shall be fully protected in acting, upon any resolution,
statement, certificate, instrument, opinion, report, notice, request, consent,
order, bond or other paper or document (whether in its original or facsimile
form) which it has no reason to believe to be other than genuine and to have
been signed or presented by the proper party or parties or, in the case of
telecopies and telexes, to have been sent by the proper party or parties. The
Collateral Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
SHARING INTERCREDITOR AGREEMENT
- 21 -
certificates or opinions furnished to the Collateral Trustee and conforming to
the requirements of this Agreement or the Sharing Security Documents.
(d) CONFLICT OR DOUBT IN ACTIONS TO BE TAKEN. In the event any
disagreement between the Credit Agreement Secured Parties and the holders of the
Senior Notes shall result in a proceeding in a court of competent jurisdiction
being instituted with respect to the proper action to be taken by the Collateral
Trustee hereunder, and an order shall be issued enjoining the Collateral Trustee
from taking any action hereunder or under any Sharing Security Document, the
Collateral Trustee shall be entitled to refrain from taking action hereunder and
to retain the Trust Estate until the Collateral Trustee shall have received a
replacement or supplemental order of such court with respect to the action to be
taken. Any such replacement or supplemental order of a court shall be
accompanied by a legal opinion by counsel for the presenting party satisfactory
to the Collateral Trustee to the effect that said opinion is final and
nonappealable.
In addition, in the event that the Collateral Trustee in good faith is
in doubt as to what action it should take hereunder, the Collateral Trustee
shall be entitled to refrain from taking action hereunder and to retain the
Trust Estate until the Collateral Trustee shall have received a direction from
the Administrative Agent with respect to the action to be taken (or, if the
Requisite Sharing Secured Parties shall have assumed the right and authority of
the Collateral Agent as contemplated by Section 3.04(b), a direction of the
Requisite Sharing Secured Parties).
6.05 LIMITATIONS ON DUTIES OF COLLATERAL TRUSTEE. The Collateral
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in accordance with the direction of the Collateral Agent or, to the
extent provided in Sections 3.04(b), 7.02(b) and 8.02(ii), the Requisite Sharing
Secured Parties. Except as herein otherwise expressly provided, the Collateral
Trustee shall not be under any obligation to take any action which is
discretionary with the Collateral Trustee under the provisions hereof except
upon the written request of the Collateral Agent or, to the extent provided in
Sections 3.04(b), 7.02(b) and 8.02(ii), the Requisite Sharing Secured Parties.
Upon reasonable prior notice, the Collateral Trustee shall make available for
inspection and copying during normal business hours by any Sharing Secured Party
each certificate or other paper furnished to the Collateral Trustee by any
Grantor, either Administrative Agent, the Co-gen Agent, the Collateral Agent or
any Indenture Trustee under or in respect of this Agreement, the Sharing
Security Documents or any portion of the Trust Estate.
6.06 MONEYS TO BE HELD IN TRUST. All moneys received by the Collateral
Trustee under or pursuant to any provision of this Agreement shall be held in
trust for the purposes for which they were paid or are held.
6.07 RESIGNATION AND REPLACEMENT OF COLLATERAL TRUSTEE.
(a) RESIGNATION. The Collateral Trustee may at any time, by giving 30
days' prior written notice to the Company, the Administrative Agents, the Co-gen
Agent, the Collateral Agent and the Indenture Trustees, resign and be discharged
of the responsibilities hereby created, such resignation to become effective
upon the earlier of (i) 30 days from the date of such notice and (ii) the
appointment of a successor collateral trustee or collateral trustees, proposed
by the Company, reasonably acceptable to the Indenture Trustees and the
Collateral Agent, by the Collateral Agent (determined after consultation with
the Company) and, with respect to any
SHARING INTERCREDITOR AGREEMENT
- 22 -
Indenture Trustee, if no objection has been received from such Indenture Trustee
within 10 days of such proposal, such Indenture Trustee shall have been deemed
to have approved such collateral trustee or collateral trustees. If no successor
collateral trustee or collateral trustees shall be appointed and approved within
30 days from the date of the giving of the aforesaid notice of resignation, the
Collateral Trustee (notwithstanding the termination of all of its other duties
and obligations hereunder by reason of such resignation), the Collateral Agent
or the Company may at the expense of the Company, apply to any court of
competent jurisdiction to appoint a successor collateral trustee or collateral
trustees (which may be an individual or individuals) to act until such time, if
any, as a successor collateral trustee or collateral trustees shall have been
appointed as above provided. Any successor collateral trustee or collateral
trustees so appointed by such court shall immediately and without further act be
superseded by any successor collateral trustee or collateral trustees approved
by the Collateral Agent as above provided. In connection with the foregoing, the
Company hereby agrees with the Sharing Secured Parties to pay the fees, costs
and expenses of any successor collateral trustee, and to provide indemnification
to any successor collateral trustee, to the same extent as it provides the same
to the predecessor collateral trustee.
(b) APPOINTMENT OF SUCCESSOR COLLATERAL TRUSTEE. If at any time the
Collateral Trustee shall resign or otherwise become incapable of acting, or if
at any time a vacancy shall occur in the office of Collateral Trustee for any
other cause, a successor collateral trustee or collateral trustees, reasonably
acceptable to the Indenture Trustees and the Collateral Agent (determined after
consultation with the Company) and, with respect to any Indenture Trustee, if no
objection has been received from such Indenture Trustee within 10 days of such
proposal, such Indenture Trustee shall have been deemed to have approved such
collateral trustee or collateral trustees, may be appointed by the
Administrative Agents, the Co-gen Agent and the Collateral Agent, and the
powers, duties, authority and title of the predecessor collateral trustee or
collateral trustees terminated and canceled without procuring the resignation of
such predecessor collateral trustee or collateral trustees, and without any
other formality (except as may be required by applicable law) other than
appointment and designation of a successor collateral trustee or collateral
trustees in writing, duly acknowledged, delivered to the predecessor collateral
trustee or collateral trustees, and filed for record in each public office, if
any, in which this Agreement is required to be filed.
(c) RIGHTS OF SUCCESSOR COLLATERAL TRUSTEE. The appointment and
designation referred to in Section 6.07(b) shall, after any required filing, be
full evidence of the right and authority to make the same and of all the facts
therein recited, and this Agreement shall vest in such successor collateral
trustee or collateral trustees, without any further act, deed or conveyance, all
of the estate and title of its predecessor or their predecessors, and upon such
filing for record the successor collateral trustee or collateral trustees shall
become fully vested with all the estates, properties, rights, powers, trusts,
duties, authority and title of its predecessor or their predecessors; but such
predecessor or predecessors shall, nevertheless, on the written request of
either Administrative Agent, the Co-gen Agent, the Collateral Agent or any
successor collateral trustee or collateral trustees, execute and deliver an
instrument transferring to such successor or successors all the estates,
properties, rights, powers, trusts, duties, authority and title of such
predecessor or predecessors hereunder and shall deliver all securities and
moneys held by it or them to such successor collateral trustee or collateral
trustees.
SHARING INTERCREDITOR AGREEMENT
- 23 -
(d) FILINGS AT EXPENSE OF COMPANY. Any required filing for record of
the instrument appointing a successor collateral trustees as hereinabove
provided shall be at the expense of and done by the Company.
6.08 QUALIFICATIONS OF SUCCESSORS TO COLLATERAL TRUSTEE. Except as
permitted by Section 6.07, any successor to the Collateral Trustee appointed
pursuant to Section 6.07 shall be a bank or trust company in good standing and
having power so to act, incorporated under the laws of the United States of
America or any State thereof or the District of Columbia, and having its
principal corporate trust office within the forty-eight contiguous States, and
shall also have capital, surplus and undivided profits of not less than
$100,000,000.
6.09 MERGER OF COLLATERAL TRUSTEE. Any Person into which the
Collateral Trustee may be merged, or with which it may be consolidated, or any
Person resulting from any merger or consolidation to which the Collateral
Trustee shall be a party, or any Person acquiring all or substantially all of
the corporate trust business of the Collateral Trustee, shall be the Collateral
Trustee under this Agreement without the execution or filing of any paper or any
further act on the part of the parties hereto.
6.10 APPOINTMENT OF ADDITIONAL AND SEPARATE COLLATERAL TRUSTEE.
Whenever (i) the Collateral Trustee or the Collateral Agent shall deem it
necessary or prudent in order to conform to any law of any jurisdiction in which
all or any part of the Shared Collateral shall be situated or to make any claim
or bring any suit with respect to or in connection with the Shared Collateral,
or (ii) the Collateral Trustee shall be advised by counsel that it is so
necessary or prudent in the interest of the Sharing Secured Parties, then in any
such case, the Collateral Trustee shall execute and deliver from time to time
all instruments and agreements necessary or proper to constitute another bank or
trust company or one or more Persons approved by the Collateral Trustee either
to act as additional trustee or trustees of all or any part of the Trust Estate,
jointly with the Collateral Trustee, or to act as separate trustee or trustees
of all or any part of the Trust Estate, in any such case with such powers as may
be provided in such instruments or agreements, and to vest in such bank, trust
company or Person as such additional trustee or separate trustee, as the case
may be, any property, title, right or power of the Collateral Trustee deemed
necessary or advisable by the Collateral Trustee. Each of the Grantors hereby
consents to all actions taken by the Collateral Trustee under the foregoing
provisions of this Section 6.10.
Section 7. RELEASE OF COLLATERAL; EXPIRATION OF HEDGING RIGHTS;
DESIGNATIONS OF NEW NOTES INDENTURES.
7.01 RELEASE OF TRUST ESTATE; EXPIRATION OF CERTAIN RIGHTS.
Notwithstanding any contrary provision herein, the Trust Estate shall be
assigned and released to (i) the Collateral Agent for the benefit of the Credit
Agreement Secured Parties and the other holders of Credit Agreement Obligations
(and such release confirmed in a written instrument in form satisfactory to the
Collateral Agent) on the earlier of the date (a) on which all the Senior Notes
Obligations shall have been paid in full to the holders thereof or (b) that is
ten days after the provisions of the Senior Notes Documents that require equal
and ratable security shall be held to be invalid, void or unenforceable by the
final judgment of a court of competent jurisdiction, no longer subject to appeal
or review, or (ii) the applicable Grantor on the date on which all the Credit
Agreement
SHARING INTERCREDITOR AGREEMENT
- 24 -
Obligations have been paid in full, all Designated Letters of Credit and Letters
of Credit issued under the Solutia Credit Agreement expired or terminated and
the Solutia Commitments have been terminated, the Solutia Administrative Agent
has given written notice thereof to the Collateral Trustee and all the
Collateral Trustee's Fees have been paid in full.
7.02 RELEASES OF SHARED COLLATERAL.
(a) PRIOR TO TRIGGERING EVENT. At any time during which, to the actual
knowledge of any Responsible Officer of the Collateral Trustee, no Triggering
Event has occurred and is continuing, the Lien of the Sharing Security Documents
may, at any time, be released in whole or in part by the Collateral Trustee
pursuant to written directions signed by the Collateral Agent, PROVIDED that no
such release shall be effected in such a manner so that fewer than all, but not
all, of the Sharing Secured Parties continue to be entitled to the benefits of
such Lien (or become entitled to the benefits of a substitute Lien) without each
of the Sharing Secured Parties hereunder being equally and ratably secured on
the respective property subject to such Lien (to the extent such property is
Shared Property). No such release shall require any consent or approval by any
other Sharing Secured Party.
(b) AFTER TRIGGERING EVENT. At any time during which, to the actual
knowledge of any Responsible Officer of the Collateral Trustee, a Triggering
Event has occurred and is continuing, the Lien of the Sharing Security Documents
may, at any time, be released in whole or in part by the Collateral Trustee only
pursuant to written directions signed by the Requisite Sharing Secured Parties
PROVIDED that no such release shall be effected in such a manner so that fewer
than all, but not all, of the Sharing Secured Parties continue to be entitled to
the benefits of such Lien (or become entitled to the benefits of a substitute
Lien) without each of the Sharing Secured Parties hereunder being equally and
ratably secured on the respective property subject to such Lien (to the extent
such property is Shared Property).
7.03 NEW NOTES INDENTURES. In the event that after the date hereof the
Company issues any senior debt securities in connection with any Capital Markets
Transaction (as defined in the Solutia Credit Agreement) permitted under the
Solutia Credit Agreement then, the Company may at its option designate the
indenture or other agreements pursuant to which such securities are issued as a
"New Notes Indenture" for purposes hereof by furnishing to the Collateral
Trustee (with a copy thereof to the Administrative Agents, the Co-gen Agent and
the Collateral Agent) a letter (a "NEW NOTES INDENTURE DESIGNATION LETTER"), in
such form as shall be acceptable to the Collateral Agent and the Collateral
Trustee, duly completed and executed by the Company. Upon any such designation
of a New Notes Indenture, such New Notes Indenture shall be entitled to the
benefits of the Sharing Obligations subject to the terms and conditions of, and
to the extent provided in, this Agreement.
Section 8. MISCELLANEOUS.
8.01 EQUAL AND RATABLE SECURITY. This Agreement is intended to comply
with the provisions of the Senior Notes Documents to secure the unpaid principal
of, premium, if any, and accrued interest on the Senior Notes equally and
ratably with the Credit Agreement Obligations in respect of the Shared Property.
To the extent that the rights and benefits herein or in any of the Sharing
Security Agreement conferred on the holders of the Senior Notes or the Indenture
SHARING INTERCREDITOR AGREEMENT
- 25 -
Trustees shall be held by a final judgment of a court of competent jurisdiction,
no longer subject to appeal or review, to exceed the rights and benefits
required so to be conferred by such provisions, such rights and benefits shall
be limited so as to provide to such holders and the Indenture Trustees only
those rights and benefits that are required by such provisions. Any and all
rights not herein expressly given to the Indenture Trustees are expressly
reserved to the Collateral Agent and the other Credit Agreement Secured Parties,
it being understood that in the absence of a requirement to provide equal and
ratable security set forth in the Senior Notes Documents, this Agreement would
not have been accepted by the Administrative Agents, the Co-gen Agent, the
Collateral Agent, the Solutia Lenders, the Astaris Lenders or the Co-gen
Purchasers.
8.02 AMENDMENTS, SUPPLEMENTS AND WAIVERS. This Agreement and any other
Sharing Security Document may be amended at any time by an instrument in writing
between the parties hereto; PROVIDED that (i) at any time during which, to the
actual knowledge of any Responsible Officer of the Collateral Trustee, no
Triggering Event has occurred and is continuing, (x) it shall not be necessary
for the Indenture Trustees to join in any such instrument except to the extent
that the same would adversely affect the rights of the holders of the Senior
Notes to equally and ratably share in the security provided for herein and in
the Sharing Security Documents and (y) the Collateral Trustee will upon the
instruction of the Collateral Agent execute such instrument (except that the
Collateral Trustee shall not be obligated to execute any such instrument to the
extent it would affect the Collateral Trustee's own rights, duties or immunities
under this Agreement or the Sharing Security Documents) and (ii) at any time
during which, to the actual knowledge of any Responsible Officer of the
Collateral Trustee, a Triggering Event has occurred and is continuing, the
Collateral Trustee will execute such instrument only upon the instruction of the
Requisite Sharing Secured Parties (except that the Collateral Trustee shall not
be obligated to execute any such instrument to the extent it would affect the
Collateral Trustee's own rights, duties or immunities under this Agreement or
the Sharing Security Documents). To determine that, under the foregoing clause
(i)(x), it is not necessary for the Indenture Trustees to join in such
amendment, the Collateral Trustee shall be provided with (and shall be entitled
to rely upon) an opinion of counsel to the effect that such amendment would not
adversely affect the rights of the holders of the Senior Notes to equally and
ratably share in the security provided for herein and in the Sharing Security
Documents.
8.03 NOTICES. All notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
(i) if to any Grantor, 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 (314)
674-3586, telecopier number (000) 000-0000;
(ii) if to the Solutia Administrative Agent, at its address at
Citibank, N.A., Xxx Xxxxx Xxx, Xxxxx 000, Xxx Xxxxxx, XX 00000, Attention:
Xxxxxxx Xxxxx (or his successor), telephone number (000) 000-0000,
telecopier number (000) 000-0000;
SHARING INTERCREDITOR AGREEMENT
- 26 -
(iii) if to the Astaris Administrative Agent, at its address at Bank
of America, N.A., 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Xx. Xxxxx Xxxxxx and Xx. Xxxxxx Xxxxx, telephone number (704)
388-6483, telecopier number (000) 000-0000;
(iv) if to the Co-gen Agent, at its address at Citibank, N.A., Bank
Loan Syndications, Xxx Xxxxx Xxx, Xxxxx 000, Xxx Xxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx Xxxxxxx, telephone number (000) 000-0000, telecopier
number (000) 000-0000;
(v) if 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;
(vi) if to the Collateral Trustee, at its address at HSBC Bank USA,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (if by mail) or 00 Xxxx 00xx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (if delivered), Attention:
Issuer Services, telephone number (000) 000-0000, telecopier number (212)
525-1300; and
(vii) if to any Indenture Trustee, at the address for notices provided
in the respective Existing Notes Indenture or New Notes Indenture under
which such Indenture Trustee serves as indenture trustee or fiscal agent;
or, in the case of any party, at such other address as shall be designated by it
in a written notice to each of the other parties. All such notices and other
communications given in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.
8.04 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.
8.05 SEVERABILITY. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
8.06 DEALINGS WITH THE GRANTORS. Upon any application or demand by any
Grantor to the Collateral Trustee to take or permit any action under any of the
provisions of this Agreement or under any Sharing Security Document, such
Grantor shall furnish to the Collateral Trustee (with a copy thereof to the
Collateral Agent) a certificate of an appropriate officer and an opinion of
counsel stating that all conditions precedent, if any, provided for in this
Agreement and Sharing Security Document relating to the proposed action have
been complied with, except that in the case of any such application or demand as
to which the furnishing of such documents is specifically required by any
provision of this Agreement or the Sharing Security Documents relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
SHARING INTERCREDITOR AGREEMENT
- 27 -
8.07 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of each Grantor,
the Collateral Trustee, each Sharing Secured Party and each holder of any of the
Sharing Obligations (PROVIDED that no Grantor shall assign or transfer its
rights or obligations hereunder without the prior written consent of the
Collateral Trustee and the Collateral Agent)
8.08 GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
(b) JURISDICTION. Each of the Grantors 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
Sharing 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 of the Grantors 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 Sharing Security Document shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any Sharing Security Document in the courts of any
jurisdiction.
(c) WAIVER OF VENUE. Each Grantor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any Sharing Security Document in any court referred to in paragraph (b) of this
Section 8.08. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) SERVICE OF PROCESS. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
8.03. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
8.09 COUNTERPARTS. This Agreement 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 counterpart of a signature page to this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
8.10 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 ANY LEGAL PROCEEDING DIRECTLY OR
SHARING INTERCREDITOR AGREEMENT
- 28 -
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE SHARING SECURITY
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). 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 AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.10.
8.11 NO WAIVER. No failure on the part of the any Sharing Secured
Party 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 by any Sharing Secured Party
of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.
8.12 SURVIVAL. The provisions of Section 5.03 and Section 6 shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the resignation or removal of the
Collateral Trustee, the repayment of the Sharing Obligations, the termination or
expiration of all Designated Letters of Credit and Letters of Credit issued
under the Solutia Credit Agreement, and the termination of the Solutia
Commitments.
8.13 ADDITIONAL SUBSIDIARY GUARANTORS. As contemplated in Section
6.01(l) of the Solutia Credit Agreement, certain new domestic Restricted
Subsidiaries of the Company formed or acquired by the Company after the date
hereof, are required to become a "Subsidiary Guarantor" under this Agreement, by
executing and delivering to the Collateral Agent and the Collateral Trustee a
Guarantee Assumption Agreement in the form of Exhibit J to the Solutia Credit
Agreement. In addition, as contemplated by Section 4.19 of the 2009 Notes
Indenture, any such newly-formed or acquired domestic Restricted Subsidiary is
required to become a Guarantor under the 2009 Notes Indenture pursuant to a
supplement to the 2009 Notes Indenture. Accordingly, upon the execution and
delivery of any such Guarantee Assumption Agreement or supplement 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 "Grantor" for all purposes of this Agreement. In addition, upon execution
and delivery of any such Guarantee Assumption Agreement, the new Subsidiary
Guarantor makes the representations and warranties set forth in Section 2.
SHARING INTERCREDITOR AGREEMENT
- 29 -
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed and delivered as of the date first above written.
SOLUTIA INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President and Treasurer
CPFILMS INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Attorney-in-Fact
ADMINISTRATIVE AGENTS
CITIBANK, N.A., as Administrative Agent
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA, N.A., as Administrative
Agent
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: Managing Director
SHARING INTERCREDITOR AGREEMENT
- 30 -
CO-GEN AGENT
CITIBANK, N.A., as Agent for the Co-gen
Purchasers
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
COLLATERAL AGENT
CITIBANK, N.A., as Collateral Agent
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
COLLATERAL TRUSTEE
HSBC BANK USA, as Collateral Trustee
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
SHARING INTERCREDITOR AGREEMENT
- 31 -
Appendix A
DESIGNATED LETTERS OF CREDIT
SOLUTIA INC. & CONSOLIDATED SUBSIDIARIES
STANDBY LETTERS OF CREDIT
BANK ISSUED ON BEHALF OF AMOUNT L/C NUMBER EXPIRES
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Citibank Solutia Inc. $ 8,000,000 NY-00928-30030824 00-Xxx-00
Xxxxxxxx Solutia Inc. $ 3,875 NY-00928-30027436 11-Feb-03
Citibank Solutia Inc. $ 6,620 NY-00928-30028536 30-Sep-02
Citibank Solutia Inc. $ 7,824 NY-00928-30025958 30-Sep-04
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SUB-TOTAL CITIBANK $ 8,018,319
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Chase Manhattan Bank Solutia Inc. $ 750,000 P-392986 31-Aug-02
Chase Manhattan Bank Solutia Inc. $ 480,000 P-392987 31-Aug-02
Chase Manhattan Bank Solutia Inc. $ 2,000,000 P-393627 31-Aug-02
Chase Manhattan Bank Solutia Inc. $ 6,000,000 P-393629 31-Aug-02
Chase Manhattan Bank Solutia Inc. $ 227,105 P-395392 31-Aug-02
Chase Manhattan Bank Solutia Inc. $ 750,000 P-349116 31-Dec-02
Chase Manhattan Bank Solutia Inc. $ 2,938,000 P-200112 30-Apr-03
Chase Manhattan Bank Solutia Inc. $ 2,107,000 P-200113 30-Apr-03
Chase Manhattan Bank Solutia Inc. $ 768,000 P-200114 30-Apr-03
Chase Manhattan Bank Solutia Inc. $ 852,000 P-200233 30-Apr-03
Chase Manhattan Bank Solutia Inc. $ 7,953,791 P-204020 31-Aug-02
Chase Manhattan Bank Solutia Inc. $ 3,177,062 P-204012 31-Aug-02
Chase Manhattan Bank Solutia Inc. $ 121,583 P-205878 15-Oct-02
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SUB-TOTAL CHASE $28,124,541
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HSBC Solutia Inc. $ 6,382,000 SDCMTN541972 30-Apr-03
HSBC Solutia UK Limited $ 24,517 102/13339798a 28-Feb-07
HSBC Solutia UK Limited $ 630,659 102/146377b 01-Jun-08
HSBC Solutia UK Limited $ 313,060 8852279 open
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SUB-TOTAL HSBC $ 7,350,236
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Sumitomo Mitsui Solutia Inc. $ 158,819 X/XXX-000000 00-Xxx-00
Xxxxxxxx Mitsui Solutia Inc. $ 5,000,000 LG/MIS/NY-431752 14-Aug-02
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SUB-TOTAL SUMITOMO $ 5,158,819
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KBC Solutia Europe S.A/N.V. $ 594,873 0000000000 01-Mar-08
KBC Solutia Europe S.A/N.V. $ 199,738 0000000000 open
KBC Solutia Europe S.A/N.V. $ 74,905 3019723274 open
KBC Solutia Europe S.A/N.V. $ 117,851 500322874 open
KBC Solutia Europe S.A/N.V. $ 21,870 3190826729 open
KBC Solutia Europe S.A/N.V. $ 249,688 3196014411 open
KBC Solutia Europe S.A/N.V. $ 27,167 3196625309 open
KBC Solutia Europe S.A/N.V. $ 4,200 3267502296 25-Sep-02
KBC Solutia Europe S.A/N.V. $ 38,562 3267521801 01-Nov-02
BANK BENEFICIARY PURPOSE
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Citibank Xxxxxx Indemnity Insurance Company Pollution Insurance
Citibank Gas Authority of India (GAIL) Fin. Assurance
Citibank Gas Authority of India (GAIL) Fin. Assurance
Citibank Gas Authority of India (GAIL) Fin. Assurance
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SUB-TOTAL CITIBANK
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Chase Manhattan Bank Texas Department of Health Fin. Assur. - Choc Bayou
Chase Manhattan Bank Massachusetts Dept. of Environmental Protect. Fin. Assur. - Indian Orchard
Chase Manhattan Bank New Jersey Dept. of Environmental Protection Fin. Assur. - Delaware River
Chase Manhattan Bank Florida Dept. of Environmental Regulation Fin. Assur. - Pensacola
Chase Manhattan Bank Florida Dept. of Environmental Regulation Fin. Assur. - Pensacola
Chase Manhattan Bank Texas Natural Res. Conservation Commission Fin. Assur. - Choc Bayou
Chase Manhattan Bank New Jersey Dept. of Environmental Protection Fin. Assur. - Delaware River
Chase Manhattan Bank Georgia Dept. of Natural Resources Fin. Assur. - Xxxxxxx
Xxxxx Manhattan Bank Alabama Dept. of Environmental Management Fin. Assur. - Anniston
Chase Manhattan Bank Illinois Environmental Protection Agency Fin. Assur.- Krummrich
Chase Manhattan Bank CIGNA Insurance Company Liability - General/Product/Automobile
Chase Manhattan Bank Pacific Employers Insurance Co. (CIGNA) Workers Comp - All but MO, WV, MA
Chase Manhattan Bank Xxxxxxx Landfill Remedial Action Fin. Assur. - Environmental Cleanup
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SUB-TOTAL CHASE
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HSBC Florida Dept. of Environmental Protection Financial Assurance - Pensacola
HSBC Environment Agency for GBP15,550 Fin. Assurance
HSBC HM Customs for GBP400,000 Fin. Assur. - Duties
HSBC HM Customs for GBP200,000 Fin. Assur. - Duties
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SUB-TOTAL HSBC
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Sumitomo Mitsui Tennessee Dept. of Environment and Conserv. Fin. Assur. - Columbia, TN Plant
Sumitomo Mitsui Ferro Corporation Pursuant to Asset Purchase Agreement
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SUB-TOTAL SUMITOMO
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KBC OVAM for BEF23,837,000 Fin. Assur. - Ghent
KBC Douane Gent for BEF8,000,000 Fin. Assur. - Duties
KBC Douane Gent for BEF3,000,000 Fin. Assur. - Duties
KBC Douane Gent for EUR117,000 Fin. Assur. - Duties
KBC Betz Dearborn Fin. Assurance
KBC TVA Luxembourg for BEF10,000,000 Fin. Assur. - VAT
KBC Emirate BL Oil & Gas Fin. Assurance
KBC Misr Pour La Rayonne Fin. Assurance
KBC Lungi Xxxxxx for DEM74,880 Fin. Assurance
SHARING INTERCREDITOR AGREEMENT
- 32 -
KBC Solutia Europe S.A/N.V. $ 74,402 3267592630 10-Sep-02
KBC Solutia Europe S.A/N.V. $ 2,242 3267575957 15-Sep-02
KBC Solutia Europe S.A/N.V. $ 1,873 3196573371 31-Mar-04
KBC Solutia Europe S.A/N.V. $ 2,996 3196573977 31-Oct-06
KBC Solutia Europe S.A/N.V. $ 1,311 3196574078 28-Apr-04
KBC Solutia Europe S.A/N.V. $ 2,097 3196574381 14-Apr-04
KBC Solutia Europe S.A/N.V. $ 1,873 3196719982 30-Sep-07
KBC Solutia Europe S.A/N.V. $ 7,491 500068957 31-May-10
KBC Solutia Europe S.A/N.V. $ 4,344 500095532 14-Dec-10
KBC Solutia Europe S.A/N.V. $ 2,696 500166260 30-Sep-10
KBC Solutia Europe S.A/N.V. $ 5,506 500305494 01-Apr-11
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SUB-TOTAL KBC $ 1,435,685
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GRAND TOTAL $50,087,599
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KBC Kirishinefteorgsintez Fin. Assurance
KBC Messrs Misr Polyester Co. Fin. Assurance
KBC J. Lousse / Annbritt Aspholi for BEF75,000 Fin. Assurance
KBC Xxx Xxxxx / Kabir for BEF120,000 Fin. Assurance
KBC Biernaux / Xxxx for BEF52,500 Fin. Assurance
KBC De Poorter / Xxxxxx - Xxxxx for BEF84,000 Fin. Assurance
KBC De Coninck / Xxxxxx for BEF75,000 Fin. Assurance
KBC MR. & MME Xxxxxx-Xxxxx for BEF300,000 Fin. Assurance
KBC TIESA for BEF174,000 Fin. Assurance
KBC Xxxxxx-Xxxxxxx for BEF108,000 Fin. Assurance
KBC Grass-Chardon / Xxxxxxx for EUR5,466 Fin. Assurance
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SUB-TOTAL KBC
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GRAND TOTAL
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SHARING INTERCREDITOR AGREEMENT
