EXHIBIT 4.9
RESTATED SECURITY AND GUARANTEE AGREEMENT
RESTATED SECURITY AND GUARANTEE 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"); each of the Subsidiaries of
the Company identified under the caption "SUBSIDIARY GUARANTORS" on the
signature pages hereto or that become "Subsidiary Guarantors" hereunder pursuant
to Section 7.11 after the date hereof (individually, a "SUBSIDIARY GUARANTOR"
and, collectively, the "SUBSIDIARY GUARANTORS" and, together with the Company,
individually a "SECURING PARTY" and, collectively, the "SECURING PARTIES"); and
Citibank, N.A., as collateral agent under the Non-Sharing Intercreditor
Agreement referred to below (in such capacity, together with its successors in
such capacity, the "COLLATERAL AGENT").
The Company, certain lenders (the "SOLUTIA LENDERS") and Citibank,
N.A., as administrative agent (in such capacity, together with its successors in
such capacity, 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" and, together
with the Solutia Administrative Agent, the "ADMINISTRATIVE AGENTS") 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"
and, together with the Solutia Credit Agreement, the "CREDIT AGREEMENTS"),
providing, subject to the terms and conditions thereof, for loans to be made by
said banks to Astaris in an aggregate principal amount not exceeding
$275,000,000. The obligations of Astaris under the Astaris Credit Agreement have
been partially guaranteed by the Company pursuant to a Guaranty Agreement dated
as of September 14, 2000 (as modified and supplemented and in effect from time
to time, the "ASTARIS GUARANTY AGREEMENT") by the Company in favor of Astaris
LLC and in favor of the Astaris Lenders and the Astaris Administrative Agent.
The Company, State Street Bank and Trust Company, as trustee (in such
capacity, together with its successors in such capacity, the "CO-GEN TRUSTEE"),
certain financial institutions named as purchasers therein (collectively, the
"CO-GEN PURCHASERS") and Citibank, N.A., as agent for the Co-gen Purchasers (in
such capacity, together with its successors in such capacity, the "CO-GEN
AGENT"), are parties to an Amended and Restated Participation Agreement dated as
of April 24, 1998 (as modified and supplemented and in effect from time to time,
the "CO-GEN PARTICIPATION AGREEMENT"), providing, subject to the terms and
conditions thereof, for loans and investments to be made by the Co-gen
Purchasers to the Co-gen Trustee in an aggregate principal amount not exceeding
$33,000,000. The obligations of the Co-gen Trustee under the
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 2 -
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 the below-referenced Non-Sharing Intercreditor Agreement as
"Designated Letters of Credit" which are entitled to the benefits of this
Agreement. It is contemplated that, in connection herewith, such Solutia Lenders
will execute and deliver a Letter of Credit Override Agreement (the "LETTER OF
CREDIT OVERRIDE AGREEMENT") providing for certain common terms to be applicable
to such letters of credit.
In connection with the agreements described above, the Securing
Parties, each Administrative Agent, the Co-gen Agent and the Collateral Agent
have entered into a Restated Intercreditor and Collateral Agency Agreement dated
as of July [___], 2002 (as modified and supplemented and in effect from time to
time, the "NON-SHARING INTERCREDITOR AGREEMENT"), providing for the continuing
appointment of the Collateral Agent and for certain other matters relating to
the collateral security for the obligations of the Securing Parties hereunder
and under certain other agreements.
In connection with the transactions described above, the Company, the
Subsidiary Guarantors and Citibank, N.A., as collateral agent, have also entered
into a Security and Guarantee Agreement dated as of November 15, 2001 (the
"EXISTING SECURITY AND GUARANTEE AGREEMENT").
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 Subsidiary Guarantors wish to continue their
guarantee (pursuant to the Existing Security and Guarantee Agreement) of the
obligations of the Company under the Solutia Credit Agreement and the Astaris
Guaranty Agreement, the Co-gen Guaranty Agreement, the Co-gen Lease and in
respect of the Designated Letters of Credit and the Hedging Obligations (as
hereinafter defined), and the Securing Parties wish to similarly continue their
liens (pursuant to the Existing Security and Guarantee Agreement) on certain of
their properties as collateral security for, INTER ALIA, such obligations and
granting new liens on certain other of their properties as collateral security
for, INTER ALIA, such obligations. Accordingly, the parties hereto agree that
the Existing Security and Guarantee Agreement shall be amended and restated as
follows:
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 3 -
Section 1. DEFINITIONS. Terms defined in the Non-Sharing Intercreditor
Agreement are used herein as defined therein.
(a) The terms "ACCOUNTS", "INVENTORY" and "INVESTMENT PROPERTY" have
the respective meanings ascribed thereto in Article 9 of the Uniform Commercial
Code. The term "FINANCIAL ASSETS" shall have the meaning ascribed thereto in
Article 8 of the Uniform Commercial Code.
(b) In addition, as used herein:
"ADVANCE" has the meaning assigned to such term in Section 1.01 of the
Solutia Credit Agreement.
"BORROWERS" has the meaning assigned to such term in Section 1.01 of
the Solutia Credit Agreement.
"COLLATERAL" has the meaning assigned to such term in Section 4.
"COLLATERAL ACCOUNT" has the meaning assigned to such term in Section
5.01.
"COPYRIGHT COLLATERAL" means all material Copyrights, whether now
owned or hereafter acquired by any Securing Party, including each Copyright
identified in Annex 4.
"COPYRIGHTS" means all copyrights, copyright registrations and
applications for copyright registrations, including all renewals and
extensions thereof, the right to recover for all past, present and future
infringements thereof, and all other rights of any kind whatsoever accruing
thereunder or pertaining thereto.
"DESIGNATED LETTER OF CREDIT OBLIGATIONS" means all obligations of the
Company in respect of Designated Letters of Credit, including, without
limitation, any agreements, applications and other instruments entered into
in connection with such Designated Letters of Credit.
"DOCUMENT" has the meaning assigned to such term in Section 4(g).
"DOMESTIC SUBSIDIARY" has the meaning assigned to such term in Section
1.01 of the Solutia Credit Agreement.
"EUROPE" means the countries of Austria, Benelux, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom.
"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.
"GUARANTEED OBLIGATIONS" has the meaning ascribed thereto in
Section 2.01.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 4 -
"HEDGING OBLIGATIONS" means all obligations of the Company in respect
of any interest rate protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement entered into
with any Lender (or any affiliate thereof).
For purposes hereof, it is understood that any Hedging Obligations to
a Person arising under an agreement entered into at the time such Person
(or an affiliate thereof) is a "Lender" party to the Solutia Credit
Agreement shall nevertheless continue to constitute Hedging Obligations for
purposes hereof, notwithstanding that such Person (or its affiliate) may
have assigned all of its Advances and other interests in the Solutia Credit
Agreement and, at the time a claim is to be made in respect of such Hedging
Obligations, such Person (or its affiliate) is no longer a "Lender" party
to the Solutia Credit Agreement.
"INSTRUMENTS" has the meaning assigned to such term in Section 4(d).
"INTELLECTUAL PROPERTY" means collectively, all Copyright Collateral,
all Patent Collateral and all Trademark Collateral, together with (a) to
the extent used in connection with production at the Mortgaged Facilities,
all inventions, processes, software, production methods, proprietary
information, know-how and trade secrets with respect to any of the
foregoing; (b) all licenses or user or other agreements granted to any
Securing Party with respect to any of the foregoing, including software
licenses, in each case whether now or hereafter owned or used including the
licenses or other agreements with respect to the Copyright Collateral, the
Patent Collateral or the Trademark Collateral, listed in Annex 7 and (c) to
the extent used in connection with production at the Mortgaged Facilities,
all information, data, plans, blueprints, specifications, designs,
drawings, recorded knowledge, surveys, engineering reports, test reports,
manuals, materials standards, processing standards, performance standards,
catalogs, computer and automatic machinery software and programs with
respect to any of the foregoing.
"ISSUERS" means, collectively, (a) the respective corporations,
partnerships or other entities identified under the names of the Securing
Parties on Annex 3 under the caption "Issuer" and (b) any other entity that
shall at any time be a Subsidiary Guarantor that is not a Restricted
Subsidiary.
"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 Inc.
located in or near Martinsville, Virginia.
"MORTGAGED FACILITIES" means the Existing Mortgaged Facilities and the
New Mortgaged Facilities.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 5 -
"NEW MORTGAGED FACILITIES" means the Martinsville Facility and the
Pensacola Facility.
"PATENT COLLATERAL" means all material Patents used in connection with
production at the Mortgaged Facilities, whether now owned or hereafter
acquired by any Securing Party, including each Patent identified in Annex
5.
"PATENTS" means to the extent used, registered or applied for in the
United States of America or Europe all patents, including the inventions
and improvements described and claimed therein together with the reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof, all income, royalties, damages and payments now or hereafter due
and/or payable under and with respect thereto, including damages and
payments for past or future infringements thereof, the right to xxx for
past, present and future infringements thereof.
"PLEDGED DEBT" means any Debt (as defined in the Solutia Credit
Agreement) of any Domestic Subsidiary (other than a Restricted Subsidiary)
held by any Securing Party.
"PLEDGED STOCK" has the meaning assigned to such term in Section 4(a).
"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; and (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.
"RESTRICTED ISSUERS" means, collectively, Monchem International, Inc.,
a corporation duly organized and validly existing under the laws of the
State of Delaware, Solutia Europe and Solutia UK Holdings Ltd., a
corporation organized under the laws of England and Wales.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 6 -
"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.
"SECURED 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 any Term Loan Facility
Obligations, (b) in the case of the Subsidiary Guarantors, the obligations
of the Subsidiary Guarantors in respect of the Guaranteed Obligations
pursuant to Section 2.01 and (c) in the case of all Securing Parties, all
present and future obligations of the Securing Parties to the Secured
Parties, or any of them, hereunder.
"SECURED PARTIES" means, collectively, the Collateral Agent, the
Co-gen Agent, the Co-gen Purchasers, the Solutia Lenders, the Astaris
Lenders, the Administrative Agents and the Term Loan Facility Lenders (and,
in respect of any Hedging Obligations, any affiliate of a Solutia Lender
that shall have entered into the respective hedging agreement giving rise
to such Hedging Obligations).
"SOLUTIA CREDIT AGREEMENT OBLIGATIONS" means the principal and
interest on the Advances made by the Solutia Lenders to the Borrowers and
all other amounts from time to time owing to the Solutia Lenders or the
Administrative Agent by the Borrowers under the Loan Documents under and as
defined in the Solutia Credit Agreement.
"SOLUTIA EUROPE" means Solutia Europe S.A./N.V., a corporation
organized under the laws of Belgium.
"STOCK COLLATERAL" has the meaning assigned to such term in
Section 4(a)(ii).
"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 "Secured
Obligation" hereunder.
"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.
"TRADEMARK COLLATERAL" means all material Trademarks, whether now
owned or hereafter acquired by any Securing Party, including each Trademark
identified in
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 7 -
Annex 6. Notwithstanding the foregoing, the Trademark Collateral does not
and shall not include any Trademark that would be rendered invalid,
abandoned, void or unenforceable by reason of its being included as part of
the Trademark Collateral.
"TRADEMARKS" means, to the extent used, registered or applied for in
the United States of America or Europe, all trade names, trademarks and
service marks, logos, trademark and service xxxx registrations, and
applications for trademark and service xxxx registrations, including all
renewals of trademark and service xxxx registrations, all rights
corresponding thereto throughout the United States of America and Europe,
the right to recover for all past, present and future infringements
thereof, all other rights of any kind whatsoever accruing thereunder or
pertaining thereto, together, in each case, with the product lines and
goodwill of the business connected with the use of, and symbolized by, each
such trade name, trademark and service xxxx.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as in
effect from time to time in the State of New York.
Section 2. THE GUARANTEE.
2.01 THE GUARANTEE. The Subsidiary Guarantors hereby jointly and
severally guarantee 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 Administrative Agent, each Co-gen Purchaser and the Co-gen
Agent and their respective successors and assigns the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) of the
Solutia Credit Agreement Obligations, the Make-Whole Obligations, the Synthetic
Lease Obligations, the Designated Letter of Credit Obligations and the Hedging
Obligations, in each case strictly in accordance with the terms thereof (such
obligations being herein collectively called the "GUARANTEED OBLIGATIONS"). The
Subsidiary Guarantors hereby further jointly and severally agree that if any
Borrower shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary
Guarantors will promptly pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or renewal of any of
the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal.
2.02 OBLIGATIONS UNCONDITIONAL. The obligations of the Subsidiary
Guarantors under Section 2.01 are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the Solutia Credit Agreement, the Astaris Guaranty Agreement, the Co-gen
Guaranty Agreement, the Co-gen Lease, the Co-gen Participation Agreement, the
Designated Letters of Credit or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 2.02 that the obligations of the Subsidiary Guarantors hereunder shall
be absolute and unconditional, joint and several, under any and all
circumstances. Without limiting the generality of the
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 8 -
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the Subsidiary
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions of the Solutia
Credit Agreement, the Astaris Guaranty Agreement, the Co-gen Guaranty
Agreement, the Co-gen Lease, the Co-gen Participation Agreement, the
Designated Letters of Credit or any other agreement or instrument referred
to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under or in respect of
the Solutia Credit Agreement, the Astaris Guaranty Agreement, the Co-gen
Guaranty Agreement, the Co-gen Lease, the Co-gen Participation Agreement,
the Designated Letters of Credit or any other agreement or instrument
referred to herein or therein shall be waived or any other guarantee of any
of the Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Collateral Agent or any other Secured Party as security for any of the
Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Collateral Agent, either Administrative Agent, any Solutia Lender, any Astaris
Lender, any Co-gen Purchaser or the Co-gen Agent exhaust any right, power or
remedy or proceed against any Borrower under or in respect of the Solutia Credit
Agreement, the Astaris Guaranty Agreement, the Co-gen Guaranty Agreement, the
Co-gen Lease, the Co-gen Participation Agreement, the Designated Letters of
Credit or any other agreement or instrument referred to herein or therein, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.
2.03 REINSTATEMENT. The obligations of the Subsidiary Guarantors under
this Section 2 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of any Borrower in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Subsidiary Guarantors jointly
and severally agree that they will indemnify each Administrative Agent, each
Solutia Lender, each Astaris Lender, each Co-gen Purchaser and the Co-gen Agent
on demand for all reasonable costs and expenses (including fees of counsel)
incurred by such Administrative Agent, such Lender, such Co-gen Purchaser or the
Co-gen Agent in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 9 -
2.04 SUBROGATION. Until payment in full of all Guaranteed Obligations,
each Subsidiary Guarantor hereby waives all rights of subrogation or
contribution, whether arising by contract or operation of law (including any
such right arising under the Bankruptcy Code) or otherwise by reason of any
payment by it pursuant to the provisions of this Section 2.
2.05 REMEDIES. The Subsidiary Guarantors jointly and severally agree
that, as between the Subsidiary Guarantors and the Solutia Lenders, the
obligations of any Borrower under the Solutia Credit Agreement may be declared
to be forthwith due and payable as provided in Article VII of the Solutia Credit
Agreement (and shall be deemed to have become automatically due and payable in
the circumstances provided in said Article VII) for purposes of Section 2.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against such Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by such Borrower) shall forthwith
become due and payable by the Subsidiary Guarantors for purposes of said Section
2.01.
2.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each Subsidiary Guarantor
hereby acknowledges that the guarantee in this Section 2 constitutes an
instrument for the payment of money, and consents and agrees that any Solutia
Lender or Astaris Lender, any Administrative Agent, any Co-gen Purchaser or the
Co-gen Agent, at its sole option, in the event of a dispute by such Subsidiary
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion action under New York CPLR Section 3213. In addition, each
Subsidiary Guarantor hereby agrees that in the event it shall fail to pay in
full any amount owing by it hereunder on the date upon which the same shall
become due (whether upon demand or otherwise), it shall be obligated to pay
interest at a rate per annum equal to that specified in Section 2.07(b) of the
Solutia Credit Agreement in respect of such amount for each day during the
period from and including the due date thereof to but excluding the date the
same shall be paid in full, such interest to be payable upon demand of such
Administrative Agent or the Co-gen Agent.
2.07 CONTINUING GUARANTEE. The guarantee in this Section 2 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
2.08 RIGHTS OF CONTRIBUTION. The Company and the Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the payment
by such Subsidiary Guarantor of any Guaranteed Obligations, the Company and each
other Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor
(but subject to the next sentence), pay to such Excess Funding Guarantor an
amount equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of the
Company and a Subsidiary Guarantor to any Excess Funding Guarantor under this
Section 2.08 shall be subordinate and subject in right of payment to the prior
payment in full of the obligations of the Company and such Subsidiary Guarantor
under the other provisions of this Section 2 and such Excess Funding Guarantor
shall
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 10 -
not exercise any right or remedy with respect to such excess until payment
and satisfaction in full of all of such obligations.
For purposes of this Section 2.08, (i) "EXCESS FUNDING GUARANTOR"
means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has
paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) "EXCESS PAYMENT" means, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations and (iii) "PRO RATA SHARE" means, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate fair saleable value of all properties of such Subsidiary Guarantor
(excluding any shares of stock or other equity interest of any other Subsidiary
Guarantor) exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all properties of the Company and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Securing Parties hereunder) of the Company and
all of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary
Guarantor that is a party hereto on the date hereof, as of the date hereof, and
(B) with respect to any other Subsidiary Guarantor, as of the date such
Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
2.09 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 2.01 would otherwise, taking into account the provisions of Section
2.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 2.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, any Administrative Agent, any Solutia
Lender, any Astaris Lender, any Co-gen Purchaser, the Co-gen Agent or any other
Person, be automatically limited and reduced to the highest amount that is valid
and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
Section 3. REPRESENTATIONS AND WARRANTIES. Each Securing Party
represents and warrants to the Secured Parties that:
(a) TITLE AND PRIORITY. Such Securing Party is the sole beneficial
owner of the Collateral in which it purports to grant a security interest
pursuant to Section 4 and no Lien exists or will exist upon such Collateral
at any time, except for Liens permitted under Section 6.02(a) of the
Solutia Credit Agreement and except for such security interest in favor of
the Collateral Agent for the benefit of the Secured Parties created
pursuant hereto. The security interest created pursuant hereto constitutes
a valid and perfected security interest in the Collateral in which such
Securing Party purports to grant a security interest pursuant to Section 4,
subject to no equal or prior Lien except as expressly permitted by said
Section 6.02(a) of the Solutia Credit Agreement.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 11 -
(b) NAMES, ETC. The full and correct legal name, type of organization,
jurisdiction of organization, organizational ID number (if applicable) and
mailing address of each Securing Party as of the date hereof are correctly
set forth in Annex 1. Annex 1 correctly specifies (x) the place of business
of each Securing Party or, if such Securing Party has more than one place
of business, the location of the chief executive office of such Securing
Party, and (y) each location of the Securing Parties where in excess of
$5,000,000 of Inventory as of March 31, 2002 of the Securing Parties is
located.
(c) CHANGES IN CIRCUMSTANCES. Such Securing Party has not (i) within
the period of four months prior to the date hereof, changed its "location"
(as defined in Section 9-307 of the Uniform Commercial Code), (ii) except
as specified in Annex 1, heretofore changed its name, or (iii) except as
specified in Annex 2, heretofore become a "new debtor" (as defined in
Section 9-102(a)(56) of the Uniform Commercial Code) with respect to a
currently effective security agreement previously entered into by any other
Person.
(d) PLEDGED STOCK. The Pledged Stock, if any, identified under the
name of such Securing Party in Annex 3 is, and all other Pledged Stock in
which such Securing Party shall hereafter grant a security interest
pursuant to Section 4 will be, duly authorized, validly issued, fully paid
and non-assessable and none of such Pledged Stock is or will be subject to
any contractual restriction, or any restriction under the charter, by-laws
or other organizational document of the respective Issuer of such Pledged
Stock, upon the transfer of such Pledged Stock (except for any restriction
contained herein or under such organizational documents).
(e) OWNERSHIP OF PLEDGED STOCK. The Pledged Stock, if any, identified
under the name of such Securing Party in Annex 3 constitutes (i) in the
case of each Issuer other than a Restricted Issuer, 100% of all the issued
and outstanding shares of capital stock of whatever class of such Issuer
beneficially owned by such Securing Party on the date hereof (whether or
not registered in the name of such Securing Party) and (ii) in the case of
each Restricted Issuer, 65% of the issued and outstanding shares of voting
stock of such Restricted Issuer (it being understood that, in the case of
Solutia Europe, shares of treasury stock or stock of Solutia Europe held by
Solutia Europe shall not be deemed to be outstanding) and 100% of all other
issued and outstanding shares of capital stock of whatever class of such
Restricted Issuer beneficially owned by such Securing Party on the date
hereof (whether or not registered in the name of such Securing Party);
Annex 3 correctly identifies, as at the date hereof, the respective Issuers
of such Pledged Stock and the respective class and par value of the shares
constituting such Pledged Stock and the respective number of shares (and
registered owners thereof) represented by each such certificate.
(f) FAIR LABOR STANDARDS ACT. Any goods now or hereafter produced by
such Securing Party or any of its Subsidiaries in the United States of
America included in the Collateral have been and will be produced in
compliance with the requirements of the Fair Labor Standards Act, as
amended.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 12 -
(g) INTELLECTUAL PROPERTY. Annexes 4, 5, and 6, respectively, set
forth under the name of such Securing Party a complete and correct list of
all material Copyrights, material Patents and material Trademarks (in each
case to the extent encompassed within the definition of "Intellectual
Property" in Section 1(b) hereof) owned by such Securing Party on the date
hereof, and all registrations listed in Annexes 4, 5, and 6, are properly
issued and in full force and effect. Annex 7 sets forth under the name of
such Securing Party all licenses and other user agreements pursuant to
which such Securing Party has been granted the right to use any Copyrights,
Patents or Trademarks owned by others and material to the business of such
Securing Party (and, in the case of Patents, used in connection with
production at the Mortgaged Facilities).
To such Securing Party's knowledge, (i) except as set forth in Annex
4, 5 or 6, there is no violation by others of any right of such Securing
Party with respect to any material Copyright, Patent or Trademark listed in
Annexes 4, 5, and 6, respectively, under the name of such Securing Party
and (ii) such Securing Party is not infringing in any material respect upon
any copyright, patent or trademark of any other Person by virtue of the
conduct of its business or, in the case of any such patent, use in
connection with production at any of such Securing Party's facilities, as
applicable; and no proceedings have been instituted or are pending against
such Securing Party or, to such Securing Party's knowledge, threatened, and
no claim against such Securing Party has been received by such Securing
Party, alleging any such violation, except as may be set forth in Annex 7.
As of the date hereof, such Securing Party does not own any Trademarks
registered in the United States of America to which the last sentence of
the definition of Trademark Collateral applies.
Section 4. COLLATERAL. As collateral security for the prompt payment
in full when due (whether at stated maturity, by acceleration or otherwise) of
the Secured Obligations, each Securing Party hereby pledges and grants to the
Collateral Agent, for the benefit of the Secured Parties as hereinafter
provided, a security interest in and to all of such Securing Party's right,
title and interest in the following property, whether now owned by such Securing
Party or hereafter acquired and whether now existing or hereafter coming into
existence (all being collectively referred to herein as "COLLATERAL"):
(a) the shares of voting stock of the Issuers identified in Annex 3
under the name of such Securing Party and all other shares of capital stock
of whatever class of the Issuers together with all rights, privileges,
authority and power of such Issuer with respect to such shares, in each
case together with the certificates, instruments and agreements, if any,
evidencing the same (collectively, the "PLEDGED STOCK"), together with:
(i) all shares, securities, moneys or property representing a
dividend on any of the Pledged Stock, or representing a distribution
or return of capital upon or in respect of the Pledged Stock, or
resulting from a split-up, revision, reclassification or other like
change of the Pledged Stock or otherwise received in
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 13 -
exchange therefor, and any subscription warrants, rights, agreements
or options issued to the holders of, or otherwise in respect of, the
Pledged Stock; and
(ii) without affecting the obligations of such Securing Party
under any provision prohibiting such action hereunder or under the
Solutia Credit Agreement, in the event of any consolidation or merger
in which an Issuer is not the surviving corporation, all shares of
each class of the capital stock of the successor corporation (unless
such successor corporation is such Securing Party itself) formed by or
resulting from such consolidation or merger (the Pledged Stock,
together with all other certificates, shares, securities, properties
or moneys as may from time to time be pledged hereunder pursuant to
this clause (ii) and clause (i) above being herein collectively called
the "STOCK COLLATERAL");
PROVIDED that, notwithstanding the foregoing, the Stock Collateral of any
Restricted Issuer shall be limited to 65% of the issued and outstanding
shares of voting stock of such Restricted Issuer (it being understood that,
in the case of Solutia Europe, shares of treasury stock or stock of Solutia
Europe held by Solutia Europe shall not be deemed to be outstanding) and
100% of all other issued and outstanding shares of capital stock of
whatever class of such Issuer;
(b) the Pledged Debt;
(c) all Accounts and all Intellectual Property;
(d) all instruments, chattel paper (whether tangible or electronic) or
letters of credit (each as defined in the Uniform Commercial Code) of such
Securing Party evidencing, representing, arising from or existing in
respect of, relating to, securing or otherwise supporting the payment of,
any of the Accounts, including (but not limited to) promissory notes,
drafts, bills of exchange and trade acceptances (herein collectively called
"INSTRUMENTS");
(e) all Inventory;
(f) each contract and other agreement of such Securing Party relating
to the sale or other disposition of Inventory;
(g) all documents of title (as defined in the Uniform Commercial Code)
or other receipts of such Securing Party covering, evidencing or
representing Inventory (herein collectively called "DOCUMENTS");
(h) all rights, claims and benefits of such Securing Party against any
Person arising out of, relating to or in connection with Inventory
purchased by such Securing Party, including any such rights, claims or
benefits against any Person storing or transporting such Inventory;
(i) all Investment Property and Financial Assets contained in the
Collateral Account;
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 14 -
(j) the balance from time to time in the Collateral Account; and
(k) all proceeds, products, offspring, accessions, rents, profits,
income, benefits, substitutions and replacements of and to any of the
Collateral and, to the extent related to any Collateral, all books,
correspondence, credit files, records, invoices and other papers, including
without limitation all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Securing Party or
any computer bureau or service company from time to time acting for such
Securing Party;
PROVIDED that (i) Debt (as defined in the Existing Note Indentures), or shares
of stock, of any Restricted Subsidiary (as defined in the Existing Note
Indentures) owned or held by the Company or any other Restricted Subsidiary
shall not be included as part of the Collateral under this Agreement and (ii)
licenses and other user agreements pursuant to which any Securing Party has been
granted the right to use any Copyrights, Patents or Trademarks owned by others
shall be included in the Collateral only to the extent permitted under the
applicable instruments pursuant to which such licenses and user agreements are
created or granted.
The Securing Parties hereto contemplate that the pledge of shares of
capital stock of Solutia Europe and Solutia UK Holdings Ltd. provided above may
be supplemented by one or more separate pledge agreements or confirmations or
restatements (to the extent such pledge agreement has heretofore been executed)
executed and delivered by the relevant Securing Parties in favor of the
Collateral Agent, which pledge agreements will provide for the pledge of shares
in accordance with the requirements of the law of Belgium or of England and
Wales, as applicable; upon the execution and delivery of any such pledge
agreement or confirmation or restatement, as applicable, (whether on the date
hereof or thereafter), the provisions of such pledge agreement or confirmation
or restatement, as applicable, shall supersede in their entirety the provisions
of this Agreement with respect to the shares of capital stock of Solutia Europe
or Solutia UK Holdings Ltd. pledged by such Securing Party hereunder.
Section 5. CASH PROCEEDS OF COLLATERAL.
5.01 COLLATERAL ACCOUNT. The Collateral Agent will cause to be
established at a banking institution to be selected by the Collateral Agent one
or more cash collateral accounts (collectively, the "COLLATERAL ACCOUNT"), which
(i) to the extent of all Investment Property or Financial Assets
(other than cash) shall be a "securities account" (as defined in Section
8-501 of the Uniform Commercial Code) in respect of which the Collateral
Agent shall be the "entitlement holder" (as defined in Section 8-102(a)(7)
of the Uniform Commercial Code) and
(ii) to the extent of any cash, shall be a deposit account in respect
of which the Collateral Agent is the customer (as contemplated by Section
9-104(a)(3) of the Uniform Commercial Code) and
into which there shall be deposited from time to time the cash proceeds of any
of the Collateral (including proceeds of insurance thereon) that the Collateral
Agent requests pursuant to Section 5.02 be delivered hereunder and into which a
Securing Party may from time to time
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 15 -
deposit any additional amounts that any of them wishes to pledge to the
Collateral Agent for the benefit of the Secured Parties as additional collateral
security hereunder. The balance from time to time in the Collateral Account
shall constitute part of the Collateral hereunder and shall not constitute
payment of the Secured Obligations until applied as hereinafter provided. If at
any time following request by the Collateral Agent pursuant to Section 5.02 no
Event of Default shall be continuing, the Collateral Agent shall remit the
collected balance standing to the credit of the Collateral Account to or upon
the order of the respective Securing Party as such Securing Party through the
Company shall from time to time instruct, PROVIDED that at any time during the
continuance of an Event of Default, the Collateral Agent may (and, if instructed
by the Majority Solutia Lenders, shall) in its (or their) discretion apply or
cause to be applied (subject to collection) the balance from time to time
standing to the credit of the Collateral Account to the payment of any Secured
Obligation then due and payable in the manner specified in Section 6.09. In
addition, the Company may at any time request that the balance from time to time
standing to the credit of the Collateral Account be applied to the payment of
any Secured Obligations then due and payable in the manner specified in
Section 6.09. The balance from time to time in the Collateral Account shall be
subject to withdrawal only as provided herein.
Notwithstanding anything herein to the contrary (i) amounts deposited
in the Collateral Account pursuant to Section 6.01(n) of the Solutia Credit
Agreement shall be subject to release by the Collateral Agent as provided
therein and (ii) upon the direction of the Solutia Administrative Agent, the
Collateral Agent shall release funds from the Collateral Account to the Company
or its Subsidiaries in accordance with such Section.
5.02 PROCEEDS OF ACCOUNTS AND PLEDGED DEBT. If requested by the
Collateral Agent at any time after the occurrence and during the continuance of
an Event of Default, each Securing Party shall instruct (i) all account debtors
and other Persons obligated in respect of all Accounts to make all payments in
respect of the Accounts either (a) directly to the Collateral Agent (by
instructing that such payments be remitted to a post office box which shall be
in the name and under the control of the Collateral Agent) or (b) to one or more
other banks in the United States of America (by instructing that such payments
be remitted to a post office box which shall be in the name and under the
control of the Collateral Agent) under arrangements, in form and substance
reasonably satisfactory to the Collateral Agent, pursuant to which such Securing
Party shall have irrevocably instructed such other bank (and such other bank
shall have agreed) to remit all proceeds of such payments directly to the
Collateral Agent for deposit into the Collateral Account and (ii) all Domestic
Subsidiaries obligated in respect of all Pledged Debt to make all payments in
respect of the Pledged Debt directly to the Collateral Agent. All payments made
to the Collateral Agent, as provided in the preceding sentence, shall be
immediately deposited in the Collateral Account. In addition to the foregoing,
each Securing Party agrees that, at any time after the occurrence and during the
continuance of an Event of Default, if the proceeds of any Collateral hereunder
(including the payments made in respect of Accounts and Pledged Debt) shall be
received by it, such Securing Party shall, upon the request of the Collateral
Agent, as promptly as possible deposit such proceeds into the Collateral
Account. Until so deposited, all such proceeds shall be held in trust by such
Securing Party for and as the property of the Collateral Agent and shall not be
commingled with any other funds or property of such Securing Party.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 16 -
5.03 INVESTMENT OF BALANCE IN COLLATERAL ACCOUNT. The cash balance
standing to the credit of the Collateral Account shall be invested from time to
time in such Permitted Investments as the respective Securing Party through the
Company (or, after the occurrence and during the continuance of a Default, the
Collateral Agent) shall determine, which Permitted Investments shall be held in
the name and be under the control of the Collateral Agent (and, if the
Collateral Account is a securities account, credited to the Collateral Account),
PROVIDED that at any time after the occurrence and during the continuance of an
Event of Default, the Collateral Agent may (and, if instructed by the Majority
Solutia Lenders, shall) in its (or their) discretion at any time and from time
to time elect to liquidate any such Permitted Investments and to apply or cause
to be applied the proceeds thereof to the payment of the Secured Obligations
then due and payable in the manner specified in Section 6.09.
5.04 COVER FOR DESIGNATED LETTERS OF CREDIT. In the event that the
Company shall be required pursuant to Section 2.10(i) of the Solutia Credit
Agreement, or pursuant to Section 5.01 of the Non-Sharing Intercreditor
Agreement or pursuant to the Letter of Credit Override Agreement, to provide
cover for Designated Letters of Credit, such cover shall be paid in cash to the
Collateral Agent and deposited by the Collateral Agent into a separate
sub-account in the Collateral Account and shall constitute collateral security
FIRST for the obligations of the Company in respect of the Designated Letters of
Credit outstanding from time to time and SECOND as collateral security for the
other Secured Obligations hereunder. Any amounts that remain in the Collateral
Account at the time that all obligations of the Securing Parties in respect of
Designated Letters of Credit have been paid in full, and all Designated Letters
of Credit expired or terminated, shall (x) if no Event of Default shall at the
time be continuing, be applied to the prepayment and/or reduction of commitments
as provided in Section 2.10(i) of the Solutia Credit Agreement and (y) if an
Event of Default shall at the time be continuing, be applied to the Secured
Obligations in accordance with the applicable provisions of the Security
Documents.
Section 6. FURTHER ASSURANCES; REMEDIES. In furtherance of the grant
of the pledge and security interest pursuant to Section 4, the Securing Parties
hereby jointly and severally agree with each Secured Party as follows:
6.01 DELIVERY AND OTHER PERFECTION. Each Securing Party shall:
(a) if any of the shares, securities, moneys or property required to
be pledged by such Securing Party under clauses (a)(i) or (a)(ii) of
Section 4 are received by such Securing Party forthwith, either (x)
transfer and deliver to the Collateral Agent such shares or securities so
received by such Securing Party (together with the certificates for any
such shares and securities duly endorsed in blank or accompanied by undated
stock powers duly executed in blank), all of which thereafter shall be held
by the Collateral Agent, pursuant to the terms of this Agreement, as part
of the Collateral or (y) take such other action as the Collateral Agent
shall deem reasonably necessary or appropriate to duly record the Lien
created hereunder in such shares, securities, moneys or property in said
clauses (a)(i) and (a)(ii);
(b) deliver and pledge to the Collateral Agent any and all Instruments
constituting part of the Collateral in which such Securing Party purports
to grant a security interest hereunder, endorsed and/or accompanied by such
instruments of
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 17 -
assignment and transfer in such form and substance as the Collateral Agent
may request; PROVIDED, that so long as no Event of Default shall have
occurred and be continuing, such Securing Party may retain for collection
in the ordinary course any Instruments received by such Securing Party in
the ordinary course of its business and the Collateral Agent shall,
promptly upon request of such Securing Party through the Company, make
appropriate arrangements for making any Instrument pledged by such Securing
Party available to such Securing Party for purposes of presentation,
collection or renewal (any such arrangement to be effected, to the extent
deemed appropriate by the Collateral Agent, against trust receipt or like
document);
(c) deliver and pledge to the Collateral Agent any and all promissory
notes or other instruments evidencing any of the Pledged Debt, endorsed
and/or accompanied by such instruments of assignment and transfer in such
form and substance as the Collateral Agent may request;
(d) give, execute, deliver, file, register and record, authorize or
obtain all such financing statements, notices, instruments, documents,
agreements or other papers, and take such other action, as may be necessary
or desirable (in the reasonable judgment of the Collateral Agent) to
create, preserve, publish notice of, perfect, validate or preserve the
priority of the security interest granted pursuant hereto or to enable the
Collateral Agent to exercise and enforce its rights hereunder with respect
to such pledge and security interest, including causing any or all of the
Stock Collateral to be transferred of record into the name of the
Collateral Agent or its nominee (and the Collateral Agent agrees that if
any Stock Collateral is transferred into its name or the name of its
nominee, the Collateral Agent will thereafter promptly give to the
respective Securing Party copies of any notices and communications received
by it with respect to the Stock Collateral pledged by such Securing Party
hereunder), PROVIDED that notices to account debtors in respect of any
Accounts or Instruments shall be subject to the provisions of clause (h)
below;
(e) keep accurate books and records relating to the Collateral, and
stamp or otherwise xxxx such books and records in such manner as the
Collateral Agent may reasonably require in order to reflect the security
interests granted by this Agreement;
(f) permit representatives of the Collateral Agent, upon reasonable
notice, at any time during normal business hours to inspect and make
abstracts from its books and records pertaining to the Collateral, and,
during the continuance of an Event of Default, permit representatives of
the Collateral Agent to be present at such Securing Party's place of
business to receive copies of all communications and remittances relating
to the Collateral, and forward copies of any notices or communications
received by such Securing Party with respect to the Collateral, all in such
manner as the Collateral Agent may reasonably require;
(g) execute and deliver and, subject to the execution thereof by the
Collateral Agent, cause to be filed, such continuation statements, and do
such other acts and things, as may be necessary to maintain the perfection
of the security interest granted pursuant hereto; and
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 18 -
(h) without limiting the provisions of Section 5.02 hereof, upon the
occurrence and during the continuance of any Default, upon request of the
Collateral Agent, promptly notify (and such Securing Party hereby
authorizes the Collateral Agent so to notify) each account debtor in
respect of any Accounts or Instruments that such Collateral has been
assigned to the Collateral Agent hereunder, and that any payments due or to
become due in respect of such Collateral are to be made directly to the
Collateral Agent.
6.02 OTHER FINANCING STATEMENTS AND LIENS. Except as otherwise
permitted in Section 6.02(a) of the Solutia Credit Agreement, without the prior
written consent of the Collateral Agent, no Securing Party shall file or suffer
to be on file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement or like instrument with respect to the
Collateral in which the Collateral Agent is not named as the sole secured party
for the benefit of the Secured Parties.
6.03 PRESERVATION OF RIGHTS. The Collateral Agent shall not be
required to take steps necessary to preserve any rights against prior parties to
any of the Collateral.
6.04 SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.
(a) STOCK COLLATERAL.
(1) PERCENTAGE PLEDGED. The Securing Parties will cause the Stock
Collateral to constitute at all times (i) in the case of the Issuers other
than Restricted Issuers, 100% of all the total number of shares of capital
stock of each such Issuer then issued and outstanding and (ii) in the case
of the Restricted Issuers, 65% of the total number of shares of the voting
stock of the Restricted Issuers (it being understood that, in the case of
Solutia Europe, shares of treasury stock or stock of Solutia Europe held by
Solutia Europe shall not be deemed to be outstanding) and 100% of the total
number of shares of all other classes of capital stock of each Restricted
Issuer then issued and outstanding.
(2) VOTING AND OTHER RIGHTS. So long as no Event of Default shall have
occurred and be continuing, the Securing Parties shall have the right to
exercise all voting, consensual and other powers of ownership pertaining to
the Stock Collateral for all purposes not inconsistent with the terms of
this Agreement, the Non-Sharing Intercreditor Agreement, the Solutia Credit
Agreement or any other instrument or agreement referred to herein or
therein, PROVIDED that the Securing Parties jointly and severally agree
that they will not vote the Stock Collateral in any manner that results in
a violation of the terms of this Agreement, the Non-Sharing Intercreditor
Agreement, the Solutia Credit Agreement or any such other instrument or
agreement; and the Collateral Agent shall execute and deliver to the
Securing Parties or cause to be executed and delivered to the Securing
Parties all such proxies, powers of attorney, dividend and other orders,
and all such instruments, without recourse, as the Securing Parties may
reasonably request for the purpose of enabling the Securing Parties to
exercise the rights and powers that they are entitled to exercise pursuant
to this Section 6.04(a)(2).
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 19 -
(3) DIVIDENDS. Unless and until an Event of Default has occurred and
is continuing, the Securing Parties shall be entitled to receive and retain
any dividends on the Stock Collateral paid in cash out of earned surplus.
(4) RIGHTS FOLLOWING DEFAULT. If any Event of Default shall have
occurred, then so long as such Event of Default shall continue, and whether
or not the Collateral Agent or any other Secured Party exercises any
available right to declare any Secured Obligation due and payable or seeks
or pursues any other relief or remedy available to it under applicable law
or under or in respect of this Agreement, the Non-Sharing Intercreditor
Agreement, the Solutia Credit Agreement, the Astaris Guaranty Agreement,
the Co-gen Guaranty Agreement, the Co-gen Lease, the Designated Letters or
Credit or any other agreement relating to such Secured Obligation, all
dividends and other distributions on the Stock Collateral shall be paid
directly to the Collateral Agent and retained by it in the Collateral
Account as part of the Stock Collateral, subject to the terms of this
Agreement, and, if the Collateral Agent shall so request in writing, the
Securing Parties jointly and severally agree to execute and deliver to the
Collateral Agent appropriate additional dividend, distribution and other
orders and documents to that end, PROVIDED that if such Event of Default is
cured, any such dividend or distribution theretofore paid to the Collateral
Agent shall, upon request of the Securing Parties (except to the extent
theretofore applied to the Secured Obligations), be returned by the
Collateral Agent to the Securing Parties.
(b) INTELLECTUAL PROPERTY.
(1) For the purpose of enabling the Collateral Agent to exercise
rights and remedies under Section 6.05 at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, each Securing Party hereby grants to the Collateral Agent,
to the extent assignable, an irrevocable, non-exclusive right (exercisable
without payment of royalty or other compensation to such Securing Party) to
use, assign, license or sublicense any of the Intellectual Property now
owned or hereafter acquired by such Securing Party, wherever the same may
be located, including in such right reasonable access to all media in which
any of the Intellectual Property may be recorded or stored and to all
computer programs used for the compilation or printout thereof.
(2) Notwithstanding anything contained herein to the contrary, the
Securing Parties will be permitted to exploit, use, enjoy, protect,
license, sublicense, assign, sell, dispose of or take other actions with
respect to the Intellectual Property in the ordinary course of the business
of the Securing Parties. In furtherance of the foregoing, unless an Event
of Default shall have occurred and be continuing the Collateral Agent shall
from time to time, upon the request of the respective Securing Party,
execute and deliver any instruments, certificates or other documents, in
the form so requested, that such Securing Party through the Company shall
have certified are appropriate (in its judgment) to allow it to take any
action permitted above (including relinquishment of the right provided
pursuant to clause (1) immediately above as to any specific Intellectual
Property). Further, upon the payment in full of all of the Secured
Obligations and cancellation, termination or expiration of the Commitments
(as defined in the Solutia Credit
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 20 -
Agreement), Letters of Credit (as so defined) and Designated Letters of
Credit or earlier expiration of this Agreement or release of the
Collateral, the Collateral Agent shall grant back to the Securing Parties
the right granted pursuant to clause (1) immediately above. The exercise of
rights and remedies under Section 6.05 by the Collateral Agent shall not
terminate the rights of the holders of any licenses or sublicenses
theretofore granted by the Securing Parties in accordance with the first
sentence of this clause (2).
(3) The Securing Parties will furnish to the Collateral Agent from
time to time (but, unless a Default (as defined in the Solutia Credit
Agreement) shall have occurred and be continuing, no more frequently than
semi-annually) statements and schedules further identifying and describing
the Copyright Collateral, the Patent Collateral and the Trademark
Collateral, respectively, and such other reports in connection with the
Copyright Collateral, the Patent Collateral and the Trademark Collateral as
the Collateral Agent may reasonably request, all in reasonable detail; and
promptly upon request of the Collateral Agent, following receipt by the
Collateral Agent of any statements, schedules or reports pursuant to this
clause (3), modify this Agreement by amending Annexes 4, 5 and/or 6, as the
case may be, to include any Copyright, Patent or Trademark that becomes
part of the Collateral under this Agreement.
6.05 EVENTS OF DEFAULT, ETC. During the period during which an Event
of Default shall have occurred and be continuing:
(a) each Securing Party shall, at the request of the Collateral Agent,
assemble the Collateral owned by it at such place or places, reasonably
convenient to both the Collateral Agent and such Securing Party, designated
in the Collateral Agent's request;
(b) the Collateral Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, any of the Collateral;
(c) the Collateral Agent shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not the Uniform Commercial Code is in effect in
the jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled under
the laws in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including the right, to the fullest extent
permitted by applicable law, to exercise all voting, consensual and other
powers of ownership pertaining to the Collateral as if the Collateral Agent
were the sole and absolute owner thereof (and each Securing Party agrees to
take all such action as may be appropriate to give effect to such right);
(d) the Collateral Agent in its discretion may, in its name or in the
name of any Securing Party or otherwise, demand, xxx for, collect or
receive any money or property at any time payable or receivable on account
of or in exchange for any of the Collateral, but shall be under no
obligation to do so; and
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 21 -
(e) the Collateral Agent may, upon ten Business Days' prior written
notice to the Securing Parties of the time and place, with respect to the
Collateral or any part thereof which shall then be or shall thereafter come
into the possession, custody or control of the Collateral Agent, the other
Secured Parties or any of their respective agents, sell, lease, assign or
otherwise dispose of all or any part of such Collateral, at such place or
places as the Collateral Agent deems best, and for cash or for credit or
for future delivery (without thereby assuming any credit risk), at public
or private sale, without demand of performance or notice of intention to
effect any such disposition or of the time or place thereof (except such
notice as is required above or by applicable statute and cannot be waived),
and the Collateral Agent or any other Secured Party or anyone else may be
the purchaser, lessee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permitted
by law, at any private sale) and thereafter, to the fullest extent
permitted by law, hold the same absolutely, free from any claim or right of
whatsoever kind, including any right or equity of redemption (statutory or
otherwise), of the Securing Parties, any such demand, notice and right or
equity being hereby expressly waived and released, to the fullest extent
permitted by law. In the event of any sale, assignment, or other
disposition of any of the Trademark Collateral, the goodwill connected with
and symbolized by the Trademark Collateral subject to such disposition
shall be included, and the Securing Parties shall supply to the Collateral
Agent or its designee, for inclusion in such sale, assignment or other
disposition, all Intellectual Property relating to such Trademark
Collateral. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from
time to time by announcement at the time and place fixed for the sale, and
such sale may be made at any time or place to which the sale may be so
adjourned.
The proceeds of each collection, sale or other disposition under this
Section 6.05 shall be applied in accordance with Section 6.09.
The Securing Parties recognize that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Collateral Agent may be compelled, with respect to any sale
of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Securing Parties acknowledge that any such private sales may be at prices and on
terms less favorable to the Collateral Agent than those obtainable through a
public sale without such restrictions, and, notwithstanding such circumstances,
agree that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the Company or issuer
thereof to register it for public sale.
6.06 DEFICIENCY. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 6.05 are insufficient
to cover the costs and expenses of such realization and the payment in full of
the Secured Obligations, the Securing Parties shall remain liable for any
deficiency.
6.07 LOCATIONS; NAMES. Without at least 30 days' prior written notice
to the Collateral Agent, no Securing Party shall change its "location" (as
defined in Section 9-307 of
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 22 -
the Uniform Commercial Code) or change its name from the name shown as its
current legal name on Annex 1.
6.08 PRIVATE SALE. The Collateral Agent and the Secured Parties shall
incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 6.05 conducted in a
commercially reasonable manner. Each Securing Party hereby waives any claims
against the Collateral Agent or any other Secured Party arising by reason of the
fact that the price at which the Collateral may have been sold at such a private
sale was less than the price which might have been obtained at a public sale or
was less than the aggregate amount of the Secured Obligations, even if the
Collateral Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.
6.09 APPLICATION OF PROCEEDS. Except as otherwise herein expressly
provided, the proceeds of any collection, sale or other realization of all or
any part of the Collateral pursuant hereto, and any other cash at the time held
by the Collateral Agent under this Section 6, shall be applied by the Collateral
Agent in the manner set forth in Section 5.02 of the Non-Sharing Intercreditor
Agreement.
6.10 ATTORNEY-IN-FACT. Without limiting any rights or powers granted
by this Agreement to the Collateral Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default the Collateral Agent is hereby appointed the attorney-in-fact of each
Securing Party for the purpose of carrying out the provisions of this Section 6
and taking any action and executing any instruments which the Collateral Agent
may reasonably deem necessary or advisable to accomplish the purposes hereof,
which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, so long as the
Collateral Agent shall be entitled under this Section 6 to make collections in
respect of the Collateral, the Collateral Agent shall have the right and power
to receive, endorse and collect all checks made payable to the order of any
Securing Party representing any dividend, payment or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same.
6.11 PERFECTION. Prior to or concurrently with the execution and
delivery of this Agreement, each Securing Party shall (i) file such financing
statements and other documents in such offices as the Collateral Agent may
request to perfect the security interests granted by Section 4 of this
Agreement, (ii) deliver to the Collateral Agent all certificates evidencing any
of the Pledged Stock, accompanied by undated stock powers duly executed in
blank, and, to the extent required by Section 4(b), all promissory notes and
other instruments evidencing any Pledged Debt identified in Annex 8 and (iii)
execute and deliver such short form assignments or security agreements relating
to Collateral consisting of the Intellectual Property as the Collateral Agent
may reasonably request. Without limiting the foregoing, each Securing Party
consents that Uniform Commercial Code financing statements may be filed
describing the Collateral as set forth in Section 4.
6.12 TERMINATION. When all Secured Obligations shall have been paid in
full and the Commitments (as defined in the Solutia Credit Agreement) shall have
been cancelled or terminated, and all Letters of Credit and Designated Letters
of Credit shall have been terminated or expired, this Agreement shall terminate,
and the Collateral Agent shall forthwith cause to be
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 23 -
assigned, transferred and delivered, against receipt but without any recourse,
warranty or representation whatsoever, any remaining Collateral and money
received in respect thereof, to or on the order of the respective Securing
Party. The Collateral Agent shall, at the expense of the Company, also execute
and deliver to the respective Securing Party upon such termination such Uniform
Commercial Code termination statements and such other documentation as shall be
reasonably requested by the respective Securing Party to effect the termination
and release of the Liens on the Collateral.
6.13 FURTHER ASSURANCES. Each Securing Party agrees that, from time to
time upon the written request of the Collateral Agent, such Securing Party will
execute and deliver such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order fully to effect the
purposes of this Agreement.
Section 7. MISCELLANEOUS.
7.01 NOTICES. All notices, requests, consents and demands hereunder
shall be in writing and telecopied or delivered to the respective parties hereto
pursuant to Section 6.01 of the Non-Sharing Intercreditor Agreement. All such
communications shall be deemed to have been given at the times specified in said
Section 6.01.
7.02 NO WAIVER. No failure on the part of the Collateral Agent or any
other 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 the Collateral Agent
or any other 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.
7.03 AMENDMENTS, ETC. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by each
Securing Party and the Collateral Agent in accordance with the provisions of
Section 6.03 of the Non-Sharing Intercreditor Agreement. Any such amendment or
waiver shall be binding upon the Collateral Agent, each Secured Party and each
Securing Party.
7.04 EXPENSES. The Securing Parties jointly and severally agree to
reimburse each of the Collateral Agent and the other Secured Parties for all
reasonable costs and expenses of the Collateral Agent and the other Secured
Parties (including the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement or collection proceeding
resulting therefrom, including all manner of participation in or other
involvement with (w) performance by the Collateral Agent of any obligations of
the Securing Parties in respect of the Collateral that the Securing Parties have
failed or refused to perform, (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, or any actual or attempted
sale, or any exchange, enforcement, collection, compromise or settlement in
respect of any of the Collateral, and for the care of the Collateral and
defending or asserting rights and claims of the Collateral Agent in respect
thereof, by litigation or otherwise, including expenses of insurance, (y)
judicial or regulatory proceedings and (z) workout, restructuring or other
negotiations or proceedings (whether or not the workout, restructuring or
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 24 -
transaction contemplated thereby is consummated) and (ii) the enforcement of
this Section 7.04, and all such costs and expenses shall be Secured Obligations
entitled to the benefits of the collateral security provided pursuant to
Section 4.
7.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of each Securing
Party, the Collateral Agent, each Secured Party and each holder of any of the
Secured Obligations (PROVIDED that no Securing Party shall assign or transfer
its rights or obligations hereunder without the prior written consent of the
Collateral Agent).
7.06 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
7.07 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
7.08 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.
7.09 AGENTS AND ATTORNEYS-IN-FACT. The Collateral Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be responsible
for the gross negligence or willful misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
7.10 SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and (b) the invalidity or unenforceability of any provision hereof
in any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
7.11 ADDITIONAL SUBSIDIARY GUARANTORS. As contemplated by Section
6.01(l) of the Solutia Credit Agreement, new Domestic Subsidiaries of the
Company formed or acquired by the Company after the date hereof, and any
Domestic Subsidiary that ceases to be an "Immaterial Subsidiary" (as defined in
the Solutia Credit Agreement), 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. Accordingly, upon the execution and delivery of
any such Guarantee Assumption Agreement by any such Subsidiary, such new
Subsidiary shall automatically and immediately, and without any further action
on the part of any Person, become a "Subsidiary Guarantor" and a "Securing
Party" for all purposes of this Agreement, and Annexes 1 through 7, inclusive,
hereto shall be deemed to be supplemented in the manner specified in such
Guarantee Assumption 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 3 of the Non-Sharing
Intercreditor Agreement.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 25 -
IN WITNESS WHEREOF, the parties hereto have caused this Restated
Security and Guarantee Agreement to be duly executed and delivered as of the day
and year first above written.
SOLUTIA INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President and Treasurer
SUBSIDIARY GUARANTORS
CPFILMS INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Attorney-in-Fact
MONCHEM, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: President
MONCHEM INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: President
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 26 -
SOLUTIA SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: President
COLLATERAL AGENT
CITIBANK, N.A., as Collateral Agent
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
ANNEX 1
FILING DETAILS
------------------------------------------------------------------------------------------------------------------------------------
TYPE OF
ORGANIZATION ORGANIZATIONAL PLACE OF BUSINESS OR FORMER
CURRENT LEGAL (CORPORATION, JURISDICTION ID LOCATION OF CHIEF LOCATION LEGAL
NAME (NO TRADE LIMITED LIABILITY OF NUMBER CURRENT MAILING EXECUTIVE OF NAME(s)
NAMES) COMPANY, ETC.) ORGANIZATION (IF APPLICABLE) ADDRESS OFFICER GOODS (IF ANY)
------------------------------------------------------------------------------------------------------------------------------------
Solutia Inc. Corporation Delaware 2735025 575 Maryville 000 Xxxxxxxxx Xxxxx, XX Queeny
Centre Drive Centre Drive Cantonment, Chemical
St. Louis, MO St. Louis, MO FL Company
63141 63141 Decatur, AL
Foley, AL
Greenwood,
SC
Springfield,
MA
St. Louis,
MO
Trenton, MI
------------------------------------------------------------------------------------------------------------------------------------
Solutia Corporation Delaware 2976482 575 Maryville 575 Maryville Not None
Systems, Inc. Centre Drive Centre Drive applicable
St.Louis, MO St. Louis, MO
63141 63141
------------------------------------------------------------------------------------------------------------------------------------
Monchem Corporation Delaware 2735035 The Corporation 575 Maryville Not None
International, Trust Company Centre Drive applicable
Inc. 0000 Xxxxxx Xxxxxx Xx. Xxxxx, XX
Xxxxxxxxxx, XX 00000
19801
------------------------------------------------------------------------------------------------------------------------------------
Monchem, Inc. Corporation Delaware 2735322 The Corporation 575 Maryville Not None
Trust Company Centre Drive applicable
0000 Xxxxxx Xxxxxx Xx. Xxxxx, XX
Xxxxxxxxxx, XX 00000
19801
------------------------------------------------------------------------------------------------------------------------------------
CPFilms Inc. Corporation Delaware 0312016 4210 The Great 4210 The Great Fieldale, Courtaulds
Road Road VA Performance
Fieldale, VA Fieldale, VA Films, Inc.
24089 24089 Xxxxxx
Processing,
Inc.
Hat
Corporation
of
America
------------------------------------------------------------------------------------------------------------------------------------
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
ANNEX 2
"NEW DEBTOR" EVENTS
None.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
ANNEX 3
PLEDGED STOCK
Solutia Inc.
-----------------------------------------------------------------------------------------------------------
NUMBER OF SHARES
ISSUER CERTIFICATE NO(s). REGISTERED OWNER PLEDGED
-----------------------------------------------------------------------------------------------------------
Monchem International, Inc. 3 Solutia Inc. 6.5 shares of common stock
with par value $1.00 each
-----------------------------------------------------------------------------------------------------------
Solutia Systems, Inc. 2 Solutia Inc. 100 shares of common stock
with par value $0.01 each
-----------------------------------------------------------------------------------------------------------
Monchem International, Inc.
-----------------------------------------------------------------------------------------------------------
NUMBER OF SHARES
ISSUER CERTIFICATE NO(s). REGISTERED OWNER PLEDGED
-----------------------------------------------------------------------------------------------------------
Monchem, Inc. 3 Monchem International, Inc. 10 shares of common stock
with par value $1.00 each
-----------------------------------------------------------------------------------------------------------
Solutia UK Holdings Ltd. 2 Monchem International, Inc. 4,602,926 ordinary shares
of L0.01 each
-----------------------------------------------------------------------------------------------------------
Solutia Europe No certificates, but Monchem International, Inc. 11,870 registered shares
S.A./N.V. shares are numbered without nominal value
488,321 through
500,190
------------------------------------------------------------------------------------------------------------
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
ANNEX 4
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
[To Come]
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
ANNEX 5
LIST OF PATENTS AND PATENT APPLICATIONS
[To Come]
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
ANNEX 6
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE XXXX REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE XXXX REGISTRATIONS
[To Come]
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
ANNEX 7
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
[To Come]
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
ANNEX 8
PLEDGED DEBT
[See Definition of "Pledged Debt"]
None.
NON-SHARING SECURITY AND GUARANTEE AGREEMENT
- 2 -
ANNEX 6 TO SECURITY AGREEMENT
