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Exhibit 10.1
WAIVER AND CONSENT
THIS WAIVER AND CONSENT, dated as of October 31, 2005 (this
"Waiver
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and Consent"), by and among Solutia Inc., a
Delaware corporation (the
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"Parent"), and Solutia Business
Enterprises, Inc., a New York corporation,
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("Solutia Business" and together with the
Parent, each a "Borrower" and
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collectively, the "Borrowers"), each
subsidiary of the Parent listed as a
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"Guarantor" on the signature pages hereto,
(each a "Guarantor" and
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collectively, the "Guarantors"), the
lenders from time to time party hereto
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(each a "Lender" and collectively, the
"Lenders"), the issuers from time to
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time party hereto (each an "Issuer" and
collectively, the "Issuers"),
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Citicorp USA, Inc. ("CUSA"), as collateral
agent for the Lenders (in such
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capacity, the "Collateral Agent"), CUSA, as
administrative agent for the
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Lenders (in such capacity, the
"Administrative Agent"), and CUSA and Wells
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Fargo Foothill, LLC, as co-documentation
agents for the Lenders, (in such
capacity, the "Documentation Agent" and
together with the Collateral Agent
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and the Administrative Agent, each an
"Agent" and collectively, the
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"Agents").
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RECITALS:
WHEREAS, the Borrowers, the Guarantors, the Lenders, the
Issuers,
and the Agents have heretofore entered into
that certain Financing
Agreement, dated as of January 16, 2004,
(as amended, supplemented, or
otherwise modified from time to time, the
"Financing Agreement");
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WHEREAS, Parent has notified the Agents that Astaris expects to
sell all or substantially all its operating
assets to Israeli Chemicals
Limited, or certain of its affiliates, that
such sale is expected to close
on or about October 31, 2005, and that
Astaris will subsequently distribute
the net proceeds of that sale to its
members, including Parent, as set forth
in the agreements relating to the sale;
WHEREAS, Parent has determined that it is in its best interest
to
retain the proceeds of such sale (whether
received at closing or thereafter
and whether received directly or as a
distribution from Astaris, the
"Astaris Sale Proceeds") and has requested
that the Lenders waive any
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provisions of the Loan Documents that would
otherwise require the any Loan
Party to make a prepayment upon receipt of
the Astaris Sale Proceeds or
require that the Astaris Sale Proceeds be
held as additional collateral by
the Collateral Agent; and
WHEREAS, the Lenders are willing to grant such waiver on the
terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises set forth
above,
the terms and conditions contained herein
and other good and valuable
consideration, the receipt and sufficiency
of which are hereby acknowledged,
the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Unless otherwise defined or the
context
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otherwise requires, terms for which
meanings are provided in the Financing
Agreement shall have such meanings when
used in this Waiver and Consent
(including, without limitation, in the
foregoing recitals).
ARTICLE II
WAIVER AND CONSENT
Section 2.01 Waiver
and Consent. Upon the terms and subject to the
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conditions set forth herein, each of the
Lenders hereby agrees that,
notwithstanding any provision of the
Financing Agreement or any other Loan
Document (including, without limitation,
Sections 2.05(c) and (d) of the
Financing Agreement and Section 7 of the
Pledge Agreement (DIP)), Parent
shall be entitled to retain 100% of the
Astaris Sale Proceeds and waives any
provisions of the Loan Documents that would
otherwise require a different
application or treatment of the Astaris
Sale Proceeds. Furthermore, each
Lender hereby agrees that the Astaris Sale
Proceeds shall be disregarded for
purposes of calculating whether the
Borrowers have received $17,500,000 of
Net Cash Proceeds from events described in
clauses (iii), (iv), or (vii) of
Section 2.05(c).
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01 Conditions to Effectiveness of this Waiver and
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Consent. This Waiver and Consent shall be
effective as of the date hereof,
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upon the satisfaction of the conditions
precedent that:
(a) Executed Counterparts. The Administrative Agent shall
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have received executed counterparts of this
Waiver and Consent, duly
executed by a sufficient number of Lenders
to evidence Supermajority
Consent, each Loan Party, the
Administrative Agent, and the Collateral
Agent.
(b) No Default. As of the date hereof, both before and
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after giving effect to this Waiver and
Consent, no Default or Event of
Default shall have occurred and be
continuing (and by its execution hereof,
the Borrowers shall be deemed to have
represented and warranted such).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Enforceability. Each of the Loan Parties
represents
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and warrants to each of the Agents, each of
the Lenders, and each of the
Issuers that this Waiver and Consent has
been duly and validly executed and
delivered by each of the Loan Parties and
constitutes legal, valid and
binding obligations of each of the Loan
Parties, enforceable in accordance
with the terms hereof except as such
enforceability may be limited by
applicable bankruptcy, insolvency,
reorganization, or other similar laws
affecting creditors' rights generally, and
by general principles of equity
(regardless of whether such enforceability
is considered in a proceeding in
equity or at law).
ARTICLE V
COVENANTS OF THE LOAN PARTIES
Section 5.01 Bankruptcy Court Order. The Loan Parties will use
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commercially reasonable efforts to obtain,
on or before December 31, 2005
(as such date may be extended with the
written approval of the
Administrative Agent in its sole
discretion), an order of the Bankruptcy
Court, in form and substance satisfactory
to the Administrative Agent in its
sole discretion, approving matters related
hereto, which order shall have
been entered by the Bankruptcy Court on or
before such date; provided, that
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if the Loan Parties are unable after use of
commercially reasonable efforts
to comply with the foregoing, the Borrowers
will instead immediately make
such payments as would otherwise have been
required under the Loan Documents
without regard to this Waiver and Consent.
The Borrowers shall promptly
provide to the Administrative Agent a true
and complete copy of such order,
and such order shall remain in full force
and effect and shall not be
reversed, modified, amended, stayed or
vacated absent prior written consent
of the Administrative Agent.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Effect; Ratification. The waivers and consents set
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forth herein are effective solely for the
purposes set forth herein and
shall be limited precisely as written, and
shall not be deemed to (i) be a
consent to, or acknowledgment of, any
amendment, waiver or modification of
any other term or condition of the
Financing Agreement or of any other
instrument or agreement referred to therein
or (ii) prejudice any right or
remedy which the Agents or any other party
may now have or may have in the
future under or in connection with the
Financing Agreement as amended hereby
or any other instrument or agreement
referred to therein. This Waiver and
Consent shall be
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construed in connection with and as part of
the Financing Agreement, and all
terms, conditions, representations,
warranties, covenants and agreements set
forth in the Financing Agreement and each
other instrument or agreement
referred to therein, except as herein
amended, are hereby ratified and
confirmed and shall remain in full force
and effect.
Section 6.02 No Novation. Neither this Waiver and Consent nor
the
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replacement of the terms of the Financing
Agreement by the terms of this
Waiver and Consent shall extinguish the
obligations for the payment of money
outstanding under the Financing Agreement
or discharge or release the Lien
or priority of any security agreement, any
pledge agreement or any other
security therefor. Nothing herein co
