Attached files
| file | filename |
|---|---|
| EX-4.1 - EXHIBIT 4.1 - SOLUTIA INC | exhibit_4-1.htm |
| EX-4.2 - EXHIBIT 4.2 - SOLUTIA INC | exhibit_4-2.htm |
| EX-1.1 - EXHIBIT 1.1 - SOLUTIA INC | exhibit_1-1.htm |
| EX-10.4 - EXHIBIT 10.4 - SOLUTIA INC | exhibit_10-4.htm |
| EX-10.2 - EXHIBIT 10.2 - SOLUTIA INC | exhibit_10-2.htm |
| EX-10.3 - EXHIBIT 10.3 - SOLUTIA INC | exhibit_10-3.htm |
| EX-10.1 - EXHIBIT 10.1 - SOLUTIA INC | exhibit_10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): October 9,
2009
SOLUTIA
INC.
(Exact
name of registrant as specified in its charter)
DELAWARE
(State
of Incorporation)
|
001-13255
|
43-1781797
|
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
575
Maryville Centre Drive, P.O. Box 66760,
St.
Louis,
Missouri
|
63166-6760
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(314)
674-1000
Registrant's
telephone number, including area code
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
|
ITEM
1.01
|
ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT.
|
Issuance of Senior Notes due
2017
On
October 15, 2009, Solutia Inc. (the “Company”) completed the sale of
$400,000,000 in aggregate principal amount of 8.75% senior notes due 2017 (the
“Notes”). In connection therewith, the Company entered into the
following agreements:
Underwriting
Agreement
On
October 9, 2009, the Company (and the subsidiary guarantors party thereto)
entered into an underwriting agreement (the “Underwriting Agreement”) with
Deutsche Bank Securities Inc., for themselves and acting as representatives of
the several underwriters identified therein (collectively, the “Underwriters”)
with respect to the offering of the Notes. The Notes were offered pursuant to a
prospectus supplement and accompanying prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933, as
amended, in connection with the Company’s registration statement on Form S-3, as
amended (Registration Statement No. 333-160834). Pursuant to
the Agreement, the Underwriters agreed to purchase the Notes subject to certain
closing conditions. The Company, among other things, agreed not to, without the
prior written consent of Deutsche Bank Securities Inc., issue or sell securities
similar to the Notes for 30 days after the date of the Agreement. The
Agreement also contains standard indemnification rights and obligations of the
Company and the Underwriters. One or more of the Underwriters or their
affiliates have either provided investment banking services to the Company in
the past or may do so in the future. The Underwriters receive customary fees and
commissions for these services.
A copy of
the Underwriting Agreement is attached hereto as Exhibit 1.1 to this Current
Report on Form 8-K and is incorporated by reference herein. The above
description of the material terms of the Underwriting Agreement does not purport
to be complete and is qualified in its entirety by reference to such
exhibit.
Indenture
On
October 15, 2009, the Company (and the subsidiary guarantors party thereto)
entered into a base indenture (the “Base Indenture”), dated the same date, with
The Bank of New York Mellon Trust Company, N.A. as trustee (the “Trustee”)
providing for the issuance of notes generally. The terms of the Notes
are reflected in the First Supplemental Indenture (the “Supplemental Indenture”
and with the Base Indenture, the “Indenture”) thereto, dated the same date,
among the Company, the subsidiary guarantors party thereto and the Trustee. The
Supplemental Indenture provides, among other things, that the Notes will be
senior unsecured obligations of the Company. Interest is payable on
the Notes on each May 1 and November 1, commencing May 1, 2010. The
Company may redeem some or all of the Notes at any time prior to November 1,
2013 at a price equal to 100% of the principal amount of the Notes redeemed plus
an applicable make-whole premium. On or after November 1, 2013, the Company may
redeem some or all of the Notes at redemption prices set forth in the
Supplemental Indenture. In addition, at any time prior to November 1, 2013, the
Company may redeem up to 35% of the aggregate principal amount of the Notes at a
redemption price of 108.75% of the principal amount of the Notes redeemed with
the net cash proceeds of certain equity offerings.
The
Company’s payment obligations under the Notes are fully and unconditionally
guaranteed on an unsecured senior basis by certain domestic
subsidiaries. The Notes are not guaranteed by any of the Company’s
foreign subsidiaries.
The terms
of the Indenture, among other things, limit the ability of the Company to incur
additional debt and issue preferred stock; pay dividends or make other
restricted payments; make certain investments; create liens; allow restrictions
on the ability of certain of its subsidiaries to pay dividends or make other
payments to it; sell assets; merge or consolidate with other entities; and enter
into transactions with affiliates.
Subject
to certain limitations, in the event of a change of control of the Company, the
Company will be required to make an offer to purchase the Notes at a price equal
to 101% of the principal amount of the Notes, plus accrued and unpaid interest
to the date of repurchase.
The
Indenture provides for customary events of default which include (subject in
certain cases to customary grace and cure periods), among others, nonpayment of
principal or interest; breach of other agreements in the Indenture; failure to
pay certain other indebtedness; failure to pay certain final judgments; failure
of certain guarantees to be enforceable; and certain events of bankruptcy or
insolvency. Generally, if an event of default occurs, the Trustee or the holders
of at least 25% in aggregate principal amount of the then outstanding series of
Notes may declare all the Notes of such series to be due and payable
immediately.
Copies of
the Base Indenture and the Supplemental Indenture are attached hereto as
Exhibits 4.1 and 4.2 to this Current Report on Form 8-K, respectively, and are
incorporated by reference herein. The above description of the material terms of
the Indenture and the Notes does not purport to be complete and is qualified in
its entirety by reference to such exhibits.
Credit
Agreement Amendments
Amendments
On
October 15, 2009, the Company entered into amendments (the “Amendments”) to (i)
that certain $450,000,000 Credit Agreement dated as of February 28, 2008 among
the Company, as U.S. borrower, Solutia Europe SPRL/BVA and Flexsys SA/NV, as
European borrowers, the lenders named therein, and Citibank, N.A. as
administrative agent and as collateral agent (the “ABL Facility”), and (ii) that
certain $1,200,000,000 Credit Agreement dated as of February 28, 2008 (the “Term
Loan Facility”) among the Company, as borrower, the lenders named therein, and
Citibank, N.A. as administrative agent and as collateral
agent.
The
Amendment to the ABL Facility, among other things, (1) permitted U.S. loan
parties to issue notes that are unsecured or secured by a junior lien so long as
a portion of the proceeds equal to the greater of (x) $200.0 million and (y)
$100.0 million less than the aggregate amount of the notes are used to prepay
the term loans; (2) amended the existing unsecured debt basket to permit up to
$300.0 million of such debt to be secured by a junior lien; (3) provided for
amendments to the intercreditor agreement in connection with the foregoing; (4)
reduced the letter of credit sublimit to $125.0 million from $175.0 million; (5)
increased the cap on receivables subject to factoring by the U.S. Borrower or
any of its restricted subsidiaries to $30.0 million from $15.0 million; (5)
increased the basket for debt of any non-guarantor restricted subsidiary to
$75.0 million from $50.0 million and expanded the basket to include other types
of debt; (6) increased the amounts allowable of investments in non-loan parties;
(7) increased the basket for investments in non-guarantor restricted
subsidiaries or in European loan parties to $125.0 million from $100.0 million;
(8) permitted the sale or transfer of certain specified businesses to a joint
venture or any other third party; (9) permitted the transfer of assets from loan
parties to non-loan parties in an amount equal to (i) $50.0 million plus (ii)
$200.0 million in the case of assets acquired, (10) permitted the transfer of
Brazilian and Japanese subsidiaries of Monchem International, Inc. to non-loan
parties; (11) permitted other intercompany transfers, (12) provided
that fair market value for purposes of investments and certain asset sales will
be calculated net of assumed liabilities; and (13) reset the cap in the general
asset sale basket.
The
Amendment to the Term Loan Facility made similar changes and in addition, among
other things, (i) amended the add-back for restructuring charges in the
“Consolidated EBITDA” definition to permit up to $75.0 million in restructuring
charges in the aggregate, (ii) amended “Excess Cash Flow” to exclude currency
valuation impacts on working capital and make adjustments for cash payments
relating to pension plan contributions, other post-employment benefits and
environmental liabilities; (iii) increased the basket for “Permitted
Acquisitions” of non-loan parties from $100.0 million to $200.0 million; and
(iv) reset “Total Leverage Ratio” covenant levels for test periods through
September 30, 2011, as follows:
|
Date
|
Ratio
|
|
September
30, 2009
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4.50:1.00
|
|
December
31, 2009
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4.50:1.00
|
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March
31, 2010
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4.50:1.00
|
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June
30, 2010
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4.50:1.00
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September
30, 2010
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4.50:1.00
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December
31, 2010
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4.50:1.00
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March
31, 2011
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4.25:1.00
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June
30, 2011
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4.00:1.00
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September
30, 2011
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3.75:1.00
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The
Amendments, including a previous amendment to the Revolving Credit Facility, are
attached as Exhibits 10.1 to 10.3 hereto and are incorporated by reference
herein. The above description of the material terms of the Amendments does not
purport to be complete and is qualified in its entirety by reference to such
exhibits.
Intercreditor
Agreement
In
addition, the Company and certain of its subsidiaries, Citibank, N.A., as
administrative agent and collateral agent under the Term Loan Facility, and
Citibank, N.A., as administrative agent and collateral agent under the ABL
Facility, have also entered into an amended Intercreditor Agreement that sets
forth the rights of such agents in the collateral described herein, including
the relative lien priorities of the agents, restrictions on enforcement against
the collateral, access rights, application of proceeds and restrictions on
amendments of the loan documents. These changes were made in connection with the
amendments described in numbered clauses (1) to (3) above. The description of
the amended Intercreditor Agreement is qualified in its entirety by reference to
the full text of such agreement, a copy of which is attached as Exhibit 10.4 to
this report and incorporated herein by reference.
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ITEM
2.03
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Creation
of a Direct Financial Obligation or an Obligation Under an Off-Balance
Sheet Arrangement of a Registrant.
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The
information under “Indenture” in Item 1.01 above is incorporated herein by
reference.
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ITEM 9.01
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Financial
Statements and Exhibits.
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(c)
Exhibits:
Exhibit
Number
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1.1
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Underwriting
Agreement dated October 9, 2009, between the Company, the subsidiary
guarantors party thereto and Deutsche Bank Securities Inc., as
representative of the several Underwriters.
|
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4.1
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Indenture
dated October 15, 2009, by and between the Company, the subsidiary
guarantors and the Trustee.
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4.2
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First
Supplemental Indenture to the Indenture dated October 15, 2009, by and
between the Company, the subsidiary guarantors and the
Trustee.
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10.1
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First
Amendment dated as of May 29, 2009, to the Credit Agreement,
dated as of February 28, 2008, among Solutia Inc., Solutia Europe
SPRL/BVBA, Flexsys SA/NV, and Citibank, N.A., as administrative agent for
the lenders.
|
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10.2
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Second
Amendment dated as of October 15, 2009, to the Credit Agreement, dated as
of February 28, 2008, to Credit Agreement dated as of May 29, 2009
among Solutia Inc., Solutia Europe SPRL/BVBA, Flexsys SA/NV,
and Citibank, N.A., as administrative agent for the
lenders.
|
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10.3
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First
Amendment, dated as of October 15, 2009, to the Credit Agreement, dated as
of February 28, 2008 among Solutia Inc., the lending institutions party
thereto and Citibank, N.A., as administrative agent for the
lenders.
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10.4
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Amended
Intercreditor Agreement, dated as of October 15, 2009, by and among
Solutia Inc., each of the subsidiaries from time to time party thereto,
Citibank, N.A., in its capacity as administrative agent and collateral
agent for the holders of the Term Loan Obligations, and Citibank, N.A., in
its capacity as administrative agent and collateral agent for the holders
of the Revolving Credit
Obligations.
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SIGNATURES
PURSUANT
TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS
DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED.
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SOLUTIA INC.
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(Registrant)
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/s/ Paul J. Berra, III
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Senior
Vice President, General Counsel,
and
Chief Administrative Officer
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DATE:
October 15, 2009
Exhibit
Table
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1.1
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Underwriting
Agreement dated October 9, 2009, between the Company, the subsidiary
guarantors party thereto and Deutsche Bank Securities Inc., as
representative of the several Underwriters.
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4.1
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Indenture
dated October 15, 2009, by and between the Company, the subsidiary
guarantors and the Trustee.
|
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4.2
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First
Supplemental Indenture to the Indenture dated October 15, 2009, by and
between the Company, the subsidiary guarantors and the
Trustee.
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10.1
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First
Amendment dated as of May 29, 2009, to the Credit Agreement,
dated as of February 28, 2008, among Solutia Inc., Solutia Europe
SPRL/BVBA, Flexsys SA/NV, and Citibank, N.A., as administrative agent for
the lenders.
|
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10.2
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Second
Amendment dated as of October 15, 2009, to the Credit Agreement, dated as
of February 28, 2008, to Credit Agreement dated as of May 29, 2009
among Solutia Inc., Solutia Europe SPRL/BVBA, Flexsys SA/NV,
and Citibank, N.A., as administrative agent for the
lenders.
|
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10.3
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First
Amendment, dated as of October 15, 2009, to the Credit Agreement, dated as
of February 28, 2008 among Solutia Inc., the lending institutions party
thereto and Citibank, N.A., as administrative agent for the
lenders.
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10.4
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Amended
Intercreditor Agreement, dated as of October 15, 2009, by and among
Solutia Inc., each of the subsidiaries from time to time party thereto,
Citibank, N.A., in its capacity as administrative agent and collateral
agent for the holders of the Term Loan Obligations, and Citibank, N.A., in
its capacity as administrative agent and collateral agent for the holders
of the Revolving Credit
Obligations.
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