Amendment No. 2 to Amended and Restated Five Year Multi-Currency Credit Agreement among Solutia Inc., Citibank, N.A., and Lenders

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Summary

This amendment updates the terms of a multi-currency credit agreement between Solutia Inc., several lender banks, and Citibank, N.A. as administrative agent. The changes include new definitions, adjustments to financial covenants, and the introduction of a utilization fee. The amendment specifies revised debt-to-EBITDA and interest coverage ratios that Solutia must maintain, and confirms that all other terms of the original agreement remain in effect. The amendment is effective as of February 1, 2001, and is governed by New York law.

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EX-10.1 2 ex10p2.txt AMENDMENT NO. 2 TO CREDIT AGREEMENT Exhibit 10(1) AMENDMENT NO. 2 AMENDMENT NO. 2 (this "Agreement") dated as of February 1, --------- 2001 among: SOLUTIA INC., a Delaware corporation (the "Company"); ------- each of the lenders (the "Lenders") listed on the ------- signature pages hereof; and CITIBANK, N.A., as administrative agent under the Credit Agreement referred to below (in such capacity, together with its successors in such capacity, the "Administrative Agent"). -------------------- The Company, the Lenders, the Syndication Agent and the Administrative Agent are parties to an Amended and Restated Five Year Multi-Currency Credit Agreement dated as of November 23, 1999 (as amended by Amendment No. 1 thereto dated as of November 21, 2000, the "Credit ------ Agreement"). The Company has requested the Lenders to amend the Credit - --------- Agreement in certain respects, and the Lenders are willing to so amend the Credit Agreement, all on the terms and conditions set forth herein. Accordingly, the parties hereto hereby agree as follows: Section 1. Definitions. Except as otherwise defined in ----------- this Agreement, terms defined in the Credit Agreement are used herein as defined therein. Section 2. Amendment to Financial Covenants. Subject to -------------------------------- the Administrative Agent's receipt of this Agreement, duly executed by each of the Company, the Majority Lenders and the Administrative Agent, but effective as of the date hereof: A. Pricing Changes, Etc. --------------------- (1) Definitions. Section 1.01 of the Credit ----------- Agreement is amended by adding the following definitions in the appropriate alphabetic locations therein: "Utilization Fee" has the meaning specified in --------------- Section 2.04(c). "Utilization Fee Rate" has the meaning assigned -------------------- to such term in Schedule 2A. (2) Utilization Fee. The Credit Agreement is --------------- amended by adding the following as Section 2.04(c) thereof: "(c) Utilization Fee. The Company agrees --------------- to pay a utilization fee (the "Utilization Fee") --------------- in Dollars to the Administrative Agent for account of each Lender, which shall accrue at the Utilization Fee Rate on the daily aggregate outstanding principal amount of the Advances of such Lender for each day on which the aggregate outstanding principal amount of the Advances (including all B Advances) equals or exceeds an amount equal to 33% of the Commitments. The Utilization Fee shall be payable monthly in arrears on the last Business Day of month and, for each Lender, on the Commitment Termination Date of such Lender. The Utilization Fees shall be "other fees" payable to the Lenders for all purposes AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) - 2 - of the Credit Agreement (including, without limitation, for purposes of Sections 2.11(c)(ii), 2.12(b) and 2.15(g) thereof) and under Sections 2.13(a), 2.13(b) and 2.13(c) of the Credit Agreement shall be treated in the same manner as Facility Fees." (3) Pricing Schedules. Schedules 2A and 2B to the ----------------- Credit Agreement are amended to read in their entirety as set forth on Schedules 2A and 2B hereto. B. Financial Covenants. Section 5.03 of the Credit ------------------- Agreement is amended to read in its entirety as follows: "SECTION 5.03. Financial Covenants. So long as ------------------- any Advance shall remain unpaid or any Lender shall have any Commitment hereunder, the Company shall not: (a) Debt to Adjusted EBITDA. Permit the ----------------------- Debt to Adjusted EBITDA Ratio to exceed: (1) at any time on or prior to June 30, 2001, 3.50 to 1.00; (2) at any time from (and including) July 1, 2001 to (and including) December 30, 2001, 3.75 to 1.00; and (3) at any time from and after December 31, 2001, 3.50 to 1.00. (b) Interest Coverage Ratio. Permit the ----------------------- Interest Coverage Ratio to be less than: (1) at any time on or prior to (and including) December 31, 2000, 4.50 to 1.00; (2) at any time from (and including) January 1, 2001 to (and including) June 30, 2001, 3.75 to 1.00; (3) at any time from (and including) July 1, 2001 to (and including) September 30, 2001, 3.50 to 1.00; (4) at any time from (and including) October 1, 2001 to (and including) December 31, 2001, 3.75 to 1.00; (5) at any time from (and including) January 1, 2002 to (and including) March 31, 2002, 4.00 to 1.00; and (6) at any time from and after April 1, 2002, 4.50 to 1.00." Section 3. Representations and Warranties. The Company ------------------------------ hereby represents and warrants to the Administrative Agent and the Lenders that: (a) the representations and warranties contained in the Credit Agreement (except the Excluded Representations) are correct on and as of the date hereof, as though made on and as of AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) - 3 - such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); and (b) no event has occurred and is continuing that constitutes a Default or an Event of Default. Section 4. Miscellaneous. Except as herein provided, the ------------- Credit Agreement shall remain unchanged and in full force and effect. 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. This Agreement shall be governed by, and construed in accordance with, the law of the State of New York. [remainder of page intentionally blank] AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) - 4 - IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. SOLUTIA INC. By: /s/ Kevin Wilson ------------------------------------------- Name: Kevin Wilson Title: Vice President & Treasurer CITIBANK, N.A., as Administrative Agent By: /s/ Wajeeh Faheem ------------------------------------------- Name: Wajeeh Faheem Title: Vice President AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) - 5 - COMMITMENTS THE LENDERS ----------- ----------- $78,333,333.31 CITIBANK, N.A. By: /s/ Wajeeh Faheem ------------------------------------------- Name: Wajeeh Faheem Title: Vice President $125,000,000.00 BANK OF AMERICA, N.A. By: /s/ David Noda ------------------------------------------- Name: David Noda Title: Managing Director $46,666,666.67 THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH By: /s/ H. Miyashiro ------------------------------------------- Name: Hisashi Miyashiro Title: Deputy General Manager $46,666,666.67 THE CHASE MANHATTAN BANK By: /s/ Lawrence Palumbo, Jr. ------------------------------------------- Name: Lawrence Palumbo, Jr. Title: Vice President $46,666,666.67 KBC BANK N.V. By: /s/ R. Snauffer ------------------------------------------- Name: Robert Snauffer Title: First Vice President AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) - 6 - $46,666,666.67 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: /s/ Carl J. Mehldau, Jr. ------------------------------------------- Name: Carl J. Mehldau, Jr. Title: Vice President $46,666,666.67 THE NORTHERN TRUST COMPANY By: /s/ A. Bhagwat ------------------------------------------- Name: Ashish S. Bhagwat Title: Second Vice-President $46,666,666.67 ROYAL BANK OF CANADA By: ------------------------------------------- Name: Title: $46,666,666.67 WACHOVIA BANK, N.A. By: /s/ Robert Wilson ------------------------------------------- Name: Robert Wilson Title: Vice President $30,000,000.00 BANKBOSTON By: /s/ Renata Lucia Valgas Salgado ------------------------------------------- Name: Renata Lucia Valgas Salgado Title: Vice President AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) - 7 - $30,000,000.00 BANK ONE, N.A., MAIN OFFICE CHICAGO By: /s/ William J. Oleferchik ------------------------------------------- Name: William J. Oleferchik Title: Director $30,000,000.00 CREDIT AGRICOLE INDOSUEZ By: /s/ Paul A. Dytrych ------------------------------------------- Name: Paul A. Dytrych Title: Vice President Senior Relationship Manager By: /s/ C. Hiatt ------------------------------------------- Name: Charles Hiatt Title: Vice President Manager $30,000,000.00 HSBC BANK USA By: /s/ Christopher M. Samms ------------------------------------------- Name: Christopher M. Samms Title: Officer #9426, First V.P. $30,000,000.00 MELLON BANK, N.A. By: /s/ Charles Frankenberry ------------------------------------------- Name: Charles E. Frankenberry Title: Vice President $30,000,000.00 FIRSTAR BANK, N.A. By: /s/ Joseph P. Howard ------------------------------------------- Name: Joseph P. Howard Title: Vice President AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) - 8 - $30,000,000.00 THE SANWA BANK, LIMITED By: /s/ Lee E. Prewitt ------------------------------------------- Name: Lee E. Prewitt Title: Vice President $30,000,000.00 SOCIETE GENERALE By: /s/ Eric E.O. Siebert, Jr. ------------------------------------------- Name: Eric E.O. Siebert, Jr. Title: Director $30,000,000.00 THE SUMITOMO BANK, LIMITED By: /s/ John H. Kemper ------------------------------------------- Name: John H. Kemper Title: Senior Vice President AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) SCHEDULE 2A Pricing Grid ------------ "Applicable Margin" means, for any A Advance (whether ----------------- denominated in Dollars or Euros) that is a Eurocurrency Rate Advance for any period during which the Rated Securities are within any Rating Level set forth below, the rate set forth below opposite the reference to such Rating Level: Rating Level Applicable Margin (p.a.) ------------ ------------------------ Rating Level 1 0.335% Rating Level 2 0.425% Rating Level 3 0.590% Rating Level 4 0.770% Rating Level 5 1.000% Rating Level 6 1.200%; provided that, if the ratings of the Rated Securities established by S&P and Moody's shall fall within different Rating Levels, the Applicable Margin shall be determined by reference to the higher of the two Rating Levels (except that, if the lower such Rating Level is more than one Rating Level below the higher such Rating Level, the Applicable Margin shall be determined by reference to the Rating Level that is one Rating Level higher than the lower such Rating Level). Each change in the Applicable Margin resulting from a Rating Level Change shall be effective on the effective date of such Rating Level Change. "Facility Fee Rate" means, for any period during which the ----------------- Rated Securities are within any Rating Level set forth below, the rate set forth below opposite the reference to such Rating Level: Rating Level Facility Fee Rate (p.a.) ------------ ------------------------ Rating Level 1 0.065% Rating Level 2 0.075% Rating Level 3 0.085% Rating Level 4 0.105% Rating Level 5 0.125% Rating Level 6 0.175%; provided that, if the ratings of the Rated Securities established by S&P and Moody's shall fall within different Rating Levels, the Facility Fee Rate shall be determined by reference to the higher of the two Rating Levels (except that, if the lower such Rating Level is more than one Rating Level below the higher such Rating Level, the Facility Fee Rate shall be determined by reference to the Rating Level that is one Rating Level higher than the lower such Rating Level). Each change in the Facility Fee Rate resulting from a Rating Level Change shall be effective on the effective date of such Rating Level Change. AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) - 2 - "Utilization Fee Rate" means, for any period during which -------------------- the Rated Securities are within any Rating Level set forth below, the rate set forth below opposite the reference to such Rating Level: Rating Level Utilization Fee Rate (p.a.) ------------ --------------------------- Rating Level 1 0.125% Rating Level 2 0.125% Rating Level 3 0.125% Rating Level 4 0.125% Rating Level 5 0.125% Rating Level 6 0.250%; provided that, if the ratings of the Rated Securities established by S&P and Moody's shall fall within different Rating Levels, the Utilization Fee Rate shall be determined by reference to the higher of the two Rating Levels (except that, if the lower such Rating Level is more than one Rating Level below the higher such Rating Level, the Utilization Fee Rate shall be determined by reference to the Rating Level that is one Rating Level higher than the lower such Rating Level). Each change in the Utilization Fee Rate resulting from a Rating Level Change shall be effective on the effective date of such Rating Level Change. AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT) SCHEDULE 2B SOLUTIA INC.(1) $800MM 5 YEAR REVOLVING CREDIT FACILITY PRICING GRID
- ----------------------------------------------------------------------------------------------------------------------------------- LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6 BASIS FOR Long Term Senior Long Term Senior Long Term Senior Long Term Senior Long Term Senior Long Term Senior PRICING(2) Unsecured Debt Unsecured Debt Unsecured Debt Unsecured Debt Unsecured Debt Unsecured Debt Rated At Least A Rated Less Than Rated Less Than Rated Less Than Rated Less Than Rated Lower Than By Standard & Level 1 But At Level 2 But At Level 3 But At Level 4 But At Level 5 Or Not Poor's or A2 By Least A- By Least BBB+ By Least BBB By Least BBB- By Rated. -- Moody's Standard & Poor's Standard & Poor's Standard & Poor's Standard & Poor's or A3 By or Baa1 By or Baa2 By or Baa3 By -- -- -- -- Moody's Moody's Moody's Moody's - ----------------------------------------------------------------------------------------------------------------------------------- FACILITY FEE 6.5 bps 7.5 bps 8.5 bps 10.5 bps 12.5 bps 17.5 bps - ----------------------------------------------------------------------------------------------------------------------------------- APPLICABLE 33.5 bps 42.5 bps 59.0 bps 77.0 bps 100 bps 120.0 bps MARGIN - ----------------------------------------------------------------------------------------------------------------------------------- DRAWN COST(3) LIBOR + 40.0 bps LIBOR + 50.0 bps LIBOR + 67.5 bps LIBOR + 87.5 bps LIBOR + 112.5 LIBOR + bps 137.5 bps - ----------------------------------------------------------------------------------------------------------------------------------- UTILIZATION FEE USAGE GREATER 12.5 bps 12.5 bps 12.5 bps 12.5 bps 12.5 bps 25.0 bps THAN 33% - ----------------------------------------------------------------------------------------------------------------------------------- FULLY DRAWN LIBOR + 52.5 bps LIBOR + 62.5 bps LIBOR + 80.0 bps LIBOR + 100.0 LIBOR + 125.0 LIBOR + 162.5 COST(4) bps bps bps - ----------------------------------------------------------------------------------------------------------------------------------- (1) This pricing grid is intended to be a summary of the Applicable Margin, Facility Fee Rate and Rating Level definitions in the Credit Agreement. In the event of any inconsistency between this pricing grid and the actual terms of the Credit Agreement (including the definitions set forth on Schedule 2A), the terms of the Credit Agreement shall control and govern. (2) If Solutia Inc. is split-rated and the ratings fall in different Rating Levels, the higher of the two Rating Levels will apply (except that, if the lower such Rating Level is more than one Rating Level below the higher such Rating Level, the Rating Level that is one Rating Level higher than the lower such Rating Level will apply). (3) Facility Fee plus Applicable Margin. (4) Drawn Cost plus Utilization Fee.
AMENDMENT NO. 2 (SOLUTIA FIVE YEAR CREDIT AGREEMENT)