Exhibit 99.14
Execution version
SHARE PLEDGE AGREEMENT
between
SOLUTIA EUROPE SA/NV,
a Belgian company limited by shares, having its registered office at
Boondaelse Steenweg 6, 1050 Brussels, Belgium and registered at the
Crossroads Bank for Enterprises, under enterprise number 0460.474.440,
(the PLEDGOR)
and
KBC BANK NV,
a Belgian bank, with registered office at Havenlaan 2, B-1080 Brussels,
Belgium, registered at the Crossroads Bank for Enterprises under enterprise
number 0462.92.0.226, acting for itself and as joint creditor pursuant to
Clause 2.1 of the Collateral Agency Agreement (as defined below),
(the PLEDGEE)
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WHEREAS
(A) The Pledgor and the Noteholders have agreed to amend and restate the
Pledgor's euro 200,000,000 6.25 percent Notes due 2005, as amended and
restated, the euro 200,000,000 10.00 percent Senior Secured Notes due
2008 (together with the Terms and Conditions of Notes annexed thereto,
as amended, modified or supplemented from time to time, the NOTES and
such Terms and Conditions of Notes, as amended, modified or
supplemented from time to time, the TERMS AND CONDITIONS OF NOTES)
pursuant to an Agreement of Understanding and Restructuring dated
30 January 2004 among the Pledgor and the Noteholders party thereto (as
amended, modified or supplemented from time to time, the AGREEMENT OF
UNDERSTANDING). In connection with the Notes, the Pledgor will enter
into a Fiscal Agency Agreement dated on or about the date of this
Agreement among the Pledgor, Kredietbank S.A. Luxembourgeoise as fiscal
agent and paying agent and KBC Bank NV as principal paying agent (as
amended, modified or supplemented from time to time, the FISCAL AGENCY
AGREEMENT). The Noteholders and the Couponholders are entitled to the
benefit of, are bound by and are deemed to have notice of all of the
provisions of the Fiscal Agency Agreement.
(B) It is a requirement of the Agreement of Understanding and the Terms and
Conditions of Notes that the Pledgor pledge its shares in the Company
(as defined below) to the Pledgee to secure its obligations to the
Pledgee as provided herein and undertake the obligations contemplated
by this Agreement.
(C) Pursuant to Clause 2.1 of the Collateral Agency Agreement (as defined
below), the Pledgee shall be the joint creditor (together with the
relevant Noteholder) of each and every obligation of the Pledgor
towards each of the Noteholders under the Notes and the other Credit
Documents to which the Pledgor is party, and accordingly the Pledgee
will have its own independent right to demand performance by the
Pledgor of those obligations. There is as a result a joint creditorship
under New York law between the Noteholders and the Pledgee with regard
to the sums owed under the Notes and the other Credit Documents.
(D) The Pledgor is the legal and beneficial owner of the entire share
capital of CarboGen AG (CARBOGEN or COMPANY), a stock corporation
(Aktiengesellschaft) organised under the laws of Switzerland, having
its corporate seat at c/o Carbogen Laboratories AG, Schachenallee 29,
CH-5000 Aarau, Switzerland, which is registered in the Commercial
Register (Handelsregister) of the Canton of Aargau,
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under registration number CH-400.3.020.068-6. The entire share capital
of the Company consists of 14,000 registered shares with a nominal value
of CHF 100.00 each (the EXISTING SHARES and together with any shares of
the Company owned by the Pledgor in the future, the SHARES).
(E) In consideration of the agreements set forth herein and in the Terms
and Conditions of Notes, the Agreement of Understanding and the other
Credit Documents, the Pledgor agrees to create a first ranking pledge
in respect of the pledged assets described herein in favor of the
Pledgee under the following terms (the AGREEMENT).
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Parties hereto agree as follows:
1. INTERPRETATION
In this Agreement the following terms have the following meanings:
AGREEMENT has the meaning given to it in the Preamble.
CHF means the lawful currency of Switzerland.
COLLATERAL AGENCY AGREEMENT means the collateral agency agreement dated
on or about the date of this Agreement among the Pledgor, the Subsidiary
Guarantors, the Pledgee and the Noteholders party thereto, as amended,
modified or supplemented from time to time.
PLEDGE means the pledge of the Shares created or arising pursuant
to this Agreement.
SECURED OBLIGATIONS means all present and future actual and contingent
indebtedness, obligations and liabilities of the Pledgor to the Pledgee
which may arise under, out of, or in connection with, the Collateral
Agency Agreement, the Fiscal Agency Agreement, the Notes, any other
Credit Document to which the Pledgor is party.
SHARE CERTIFICATES means the share certificates evidencing the
Shares as set out in the Schedule 1 to this Agreement.
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Unless otherwise defined herein, defined terms shall bear the same
meanings ascribed to them in the Terms and Conditions of Notes, and
if not defined therein, the meaning ascribed to them under Swiss law.
Where the context so admits, the singular includes the plural and
vice versa.
The headings in this Agreement are for convenience only and are to
be ignored in construing this Agreement.
Any reference in this Agreement to a defined document is a reference to
that defined document as amended, supplemented, substituted or novated
from time to time, in accordance with its terms.
2. PLEDGE
2.1. As security for the Secured Obligations, the Pledgor hereby pledges, as
a first ranking pledge, in accordance with article 899 et seq. of the
Swiss Civil Code and the provisions set out below to the Pledgee,
acting in its capacity of joint and several creditor with the
Noteholders pursuant to Clause 2.1 of the Collateral Agency Agreement:
(a) the Shares; and
(b) all additional shares in CarboGen from time to time acquired
or subscribed for by the Pledgor in any manner (including by
way of capital increases) and all aforesaid claims relating
thereto (all such additional shares hereinafter included
when referring to the Shares); and
(c) all present (whether or not due) and future rights
attributable to the Shares, including but not limited to all
purchase and subscription rights relating to the Shares, all
claims for repayment of share capital, payment of
compensation for redemption of shares, credit balances from
settlements and liquidation proceeds including the right to
the liquidation quota, as well as to any other rights and
benefits attributable to the Shares (all such rights
hereinafter included when referring to the Shares).
2.2. This Pledge shall not in any way be affected by any
regrouping or splitting of the Shares, and, as the case may
be, the Future Shares, or by any similar operation, and the
securities resulting from any such operation shall be part
of the Shares, and, as the case may be, the Future Shares.
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3. PERFECTION OF THE PLEDGE
3.1. The Pledge of the Shares shall be completed at the offices of
Schellenberg Wittmer, Lowenstrasse 19, 8001 Zurich, simultaneously with
the signing of this Agreement, whereby the Pledgor or the Pledgor's
duly authorized representative shall deliver to the Pledgee the
following documents:
(a) the Share Certificates, duly endorsed in blank, to the
Pledgee or the Pledgee's duly authorised representative;
(b) a certified true copy of the resolution of the board of
directors of CarboGen acknowledging the pledging of the
Shares in favor of the Pledgee;
(c) a certified and true copy of the articles of incorporation
as they are registered with the Commercial register of the
Canton of Aargau; and
(d) a copy of the share register of the Company evidencing the
existence of the pledge in favor of the Pledgee.
4. REPRESENTATIONS AND WARRANTIES
Without prejudice and in addition to the representations and
warranties of the Pledgor under the other Credit Documents to which
the Pledgor is party, the Pledgor represents and warrants to the
Pledgee as of the date hereof and undertakes during the subsistence
of this Agreement as follows:
4.1. it is the sole legal and beneficial owner of the Shares, free and
clear from any Lien except for Permitted Liens imposed by mandatory
operation of law; the Shares are validly issued and fully paid up;
4.2. it has full power, authority and legal right to pledge all of its
rights, title and interest in the Shares pursuant to this Agreement
and to perform its obligations hereunder; as a consequence, this
Agreement has been duly and validly executed and delivered by the
Pledgor and constitutes a legal, valid and binding obligation of
the Pledgor, enforceable against it in accordance with its terms;
4.3. the Shares are free and clear of all Liens, except for Permitted
Liens imposed by mandatory operation of law; there is no cause for
suspension of the voting rights attached to the Shares; as of the
date hereof, none of the Shares is subject to any seizure or
enforcement measure;
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4.4. no other certificates have been issued for the Shares than the
Share Certificates listed in Schedule 1;
4.5. the Shares are free and clear of all transfer restrictions under
the Company's Articles of Association, and are free and clear of
options, purchase or similar rights or claims or any other similar
interests in favor of any third party, except for Permitted Liens
imposed by mandatory operation of law. As a consequence, the
entering into, execution, delivery and performance by the Pledgor
of this Agreement does not require any consent of the Company or
any other Person (except for those consents which have been
obtained);
4.6. there are no silent partnership agreements or similar arrangements
by which a person is entitled to a participation in the profits or
revenue of the Company;
4.7. this Agreement creates a valid and enforceable Pledge over the
Shares in favour of the Pledgee under the laws of Switzerland which
pledge shall not be subject to any prior Lien (other than Permitted
Liens imposed by mandatory operation of law);
4.8. the entering into, execution, delivery and performance by the
Pledgor of this Pledge Agreement and the consummation by the
Pledgor of the transactions hereby contemplated will not conflict
with any law of Belgium as of the date hereof, or result in a
breach or default of the articles of association, by-laws,
regulations or other similar charter documents of the Pledgor,
or a breach of or default under any material agreement or other
instrument to which the Pledgor is a party or by which the Pledgor
may be bound.
4.9. the Pledgor is a corporation duly incorporated and validly existing
under the laws of its jurisdiction of incorporation and is not in
liquidation, with the power to enter into this Agreement and to
exercise its rights and perform its obligations hereunder and that
all corporate and other actions required to authorise the execution
and performance of this Agreement have been duly taken;
4.10. the Company is duly incorporated and validly existing as a stock
corporation (Aktiengesellschaft) under the laws of Switzerland, has
the power to own its assets and conduct its business as currently
conducted, and has a share capital of CHF 1,400,000, divided into
14,000 registered shares with a nominal value of CHF 100 each, (all
of which have been validly issued and) are fully paid-in, and none
of which is subject to any seizure or enforcement measure as of the
date hereof; and
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4.11. Neither the Pledgor nor the Company is insolvent, nor subject to
any insolvency proceedings or in any other similar situation of
conflicting claims of creditors in a way, which could give these
creditors reasonable grounds for a claim against the Company or the
Pledgor. No resolutions have been taken, nor has any petition been
filed, to dissolve or liquidate any of the Pledgor or the Company,
nor has the Pledgor or the Company been declared bankrupt nor has a
suspension of payments been granted to either of the Pledgor or the
Company.
5. UNDERTAKINGS
5.1. The Pledgor undertakes to the Pledgee to the extent not already
effectuated by virtue of Clause 2.1(b) hereof, to pledge hereunder,
immediately upon its acquisition or subscription thereof, any and
all additional shares of stock or other securities of CarboGen.
5.2. The Pledgor undertakes to the Pledgee that at any time and from
time to time it will promptly take all action or execute all such
documents (including assignments, transfers, charges, notices and
instructions) that the Pledgee may reasonably request upon written
instructions of the Requisite Noteholders, in order to perfect the
security interest granted or purported to be granted hereby or for
the exercise of all rights, powers and remedies of the Pledgee
provided by or pursuant to this Agreement or by law and/or to
facilitate the realization of the Shares.
5.3. If so reasonably requested by the Pledgee upon written instructions
of the Requisite Noteholders the Pledgor shall take all such action
as is available to it (including making all filings and
registrations) as may be necessary for the purpose of the creation,
perfection or maintenance of any security conferred or intended to
be conferred on the Pledgee by or pursuant to this Agreement.
5.4. The Pledgor shall not:
(a) create or permit to arise any Lien on the Shares or any interest
in or part of the Shares (irrespective of whether ranking behind
the pledge created hereby), except for Permitted Liens imposed by
mandatory operation of law;
(b) permit or resolve on the re-introduction of any transfer
restrictions relating to the Shares in the articles of
incorporation of the Company;
(c) not take any steps, including, without limitation, the exercise of
any right it has under any agreement pertaining to or in relation
with the Shares, which
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may jeopardise or adversely affect the security interest
constituted in this Agreement, except as permitted in the
Terms and Conditions of Notes; or
(d) sell or attempt to sell or otherwise dispose of the Shares or
any interest in or part of the Shares except in accordance
with the provisions of this Agreement and the Terms and
Conditions of Notes.
6. VOTING RIGHTS AND SUBSCRIPTION RIGHTS
6.1. So long as no Event of Default has occurred and is continuing, the
Pledgor shall be entitled to exercise any and all membership rights
pertaining to the Shares, including, without limitation, the right
to vote in the general meeting of CarboGen in a manner (i) which
does not adversely affect the validity or enforceability of this
Pledge, and (ii) which does not cause an Event of Default to occur.
In particular, and unless agreed otherwise by the Requisite
Noteholders or as permitted under the Credit Documents, the Pledgor
shall cast its votes against any proposal for the liquidation,
merger or split-up of the Company, or against any proposal which is
liable to result in a dilution of the rights attaching to the
Shares.
6.2. Upon the occurrence of an Event of Default which is continuing, in
addition to all the rights and remedies of a secured party on
default under applicable law and subject to the Collateral Agency
Agreement and the Terms and Conditions of Notes, the Pledgor shall
exercise the membership rights conferred by the Shares, including,
without limitation, the right to vote in the general meeting of
CarboGen in accordance with the instructions received from the
Pledgee, which instructions the Pledgee shall seek in due time.
6.3. The Pledgor shall forthwith give the Pledgee a copy of any
convening notice or agenda of general shareholders meetings of the
Company and inform the Pledgee about the exercise of the membership
rights pertaining to the Shares.
6.4 Unless agreed otherwise by the Pledgee and subject to the Terms and
Conditions of Notes, the Pledgor shall exercise all subscription
rights to which it may be entitled. The Pledgor shall cause shares
resulting form the exercise of any such right to be pledged to the
Pledgee as collateral for the Secured Obligations, and these shares
shall be part of the Shares for the purpose of this Agreement, and
shall be delivered immediately to the Pledgee, endorsed in blank,
together with a copy of the updated share register of the Company
evidencing the existence of the pledge of those new Shares in favor
of the Pledgee.
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7. DIVIDENDS
7.1. Subject at all times to the restrictions set forth in the Terms and
Conditions of Notes, any payment of dividends or other payments by
CarboGen relating to the Shares and claims pledged under this Agreement
shall be made to the Pledgor, provided no Event of Default has occurred
which is continuing.
7.2. Upon the occurrence of an Event of Default which is continuing, any
payment of dividends or other payments by CarboGen relating to the
Shares and claims pledged under this Agreement shall be made to the
Pledgee which shall apply the same towards the Secured Obligations as
provided under, and subject to the terms of, the Collateral Agency
Agreement.
7.3. Similarly, upon occurrence of an Event of Default that is continuing,
any and all:
(a) dividends and interest paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, the Shares;
(b) dividends and other distributions paid or payable in cash in
respect of the Shares in connection with a partial or total
liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in-surplus; and
(c) cash paid, payable or otherwise distributed in respect of
principal (nominal value/stated capital) of, or in
redemption of, or in exchange for, the Shares;
shall be exclusively made and/or paid to the Pledgee which shall
apply the same towards the Secured Obligations as provided under,
and subject to the terms of, the Collateral Agency Agreement.
8. CONTINUING SECURITY AND OTHER MATTERS
8.1. Continuing Security
(a) This Pledge shall be a continuing security for the due
performance of the Secured Obligations, and shall remain in
force until expressly released in accordance with Clause 10
of this Agreement.
(b) This Pledge shall not be discharged or in any way prejudiced
or affected by any change in the constitution or status of
the Pledgor or any other Person or by any legal limitation,
disability, incapacity or other circumstances relating to the
Pledgor
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or any other Person, by any invalidity, illegality or
unenforceability of the obligations of the Pledgor or any
other Person.
(c) The Pledgee or, as the case may be, Requisite Noteholders may at
any time without discharging or in any way affecting this Pledge
(a) grant the Pledgor or any Subsidiary Guarantor any time or
indulgence, (b) concur in any moratorium of the Secured
Obligations, (c) amend the terms and conditions of the Secured
Obligations in accordance with the provisions of the Terms and
Conditions of Notes and the applicable laws, (d) abstain from
taking or perfecting any other security and discharge any other
security, (e) abstain from exercising any right or recourse or
from proving or claiming any debt and waive any right or recourse
and (f) apply any payment received from the Pledgor or for its
account towards the Secured Obligations or any other
obligations of the Pledgor of the Pledgee's choice.
8.2. Rights Additional
All the rights of the Pledgee hereunder shall be in addition to any
other right vested in the Pledgee and all such rights may be
exercised from time to time and as often as the Pledgee may deem
expedient. The Pledgor waives any right it may have of first
requiring the Pledgee to proceed against or claim payment from any
other party, or enforce any guarantee or security before enforcing
the Pledge.
8.3. Preservation of Security in Case of Transfer
Without prejudice to the scope of the Secured Obligations, the
Pledgor and the Pledgee agree that in the event of transfer of all
or any part of the Secured Obligations by way of assignment or
novation in accordance with the Credit Documents or in the event of
a change or replacement of the Pledgee or the Pledgor in accordance
with the Credit Documents, this Pledge will be maintained,
automatically and without any further formality or consent, to
secure the Secured Obligations as assigned or novated in favour of
the Pledgee (or the new Pledgee, if any). To the extent that any
such further formality or consent on the part of Pledgor or of the
Company will, nevertheless, be required, Pledgor hereby undertakes
to perform, and to have the Company perform, any such formality or
consent without delay upon the Pledgee's request.
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9. ENFORCEMENT
9.1. At any time after the occurrence of an Event of Default which is
continuing, the pledge created hereunder shall become immediately
enforceable and the Pledgee shall in particular have the right,
subject to the Collateral Agency Agreement and to the Terms and
Conditions of Notes, to:
(a) enforce the Pledge in respect of any or all of the Shares, in
accordance with applicable legal provisions and as set forth in
this Agreement; and
(b) apply any payments which may be received or receivable by the
Pledgee in respect of the Shares to satisfaction of the Secured
Obligations and as provided in the Collateral Agency Agreement;
and
(c) exercise all rights and remedies it possesses, and to act
generally in relation to the Shares in such manner as it shall
determine within the limit of the applicable law and its rights
under this Agreement.
9.2. When exercising its right to enforce the Pledge after the
occurrence of an Event of Default which is continuing, the Pledgee
shall be entitled, at its discretion,
(a) to sell all or part of the Shares either through public
auction (offentliche Versteigerung) or in a private sale
(Selbstverkaufsrecht), without regard to the procedures and
formalities provided for in the Swiss Federal Act Debt
Collection and Bankruptcy of 1889, as amended, and without
any notice thereof to the Pledgor other than a notice
intending to inform the Pledgor that a sale of the Shares will
take place, this notice being sent in accordance with
Clause 14.6 of this Agreement to the Pledgor no later than
10 (ten) Business Days prior to such sale; or
(b) notwithstanding the foregoing and the provisions of Art. 41 of
the Swiss Federal Law on the Recovery of Debts and Bankruptcy
or any other applicable law, to institute and pursue the ordinary
procedure for recovery of debt without having first to dispose of
the Shares or to institute statutory proceedings for the
realization thereof.
9.3. The Pledgee has the right to acquire for itself all or any part
of the Shares in any such public auction or private sale
(Selbsteintrittsrecht). In case of an acquisition of the Shares by the
Pledgee in a private sale, such sale has to be at arm's length, i.e. at
the real value (the REAL VALUE (wirklicher Wert)) of the acquired
Shares. If the
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Pledgor and the Pledgee do not reach an agreement on the Real Value
within 30 calendar days following the Pledgee's corresponding offer, the
Real Value shall be determined by an independent expert to be mutually
appointed by the Parties. The expert's determination of the Real Value
shall be final (Schiedsgutachten). If the parties cannot, within
60 days following the Pledgee's offer, agree on the expert to be
appointed, the independent expert shall be appointed by the president
of the "Treuhand-Kammer", Zurich, Switzerland.
9.4. In view of a realization of the Pledge in accordance with the terms
and conditions set forth above, the Pledgor, being the sole owner
and holder of the Shares, hereby expressly declares its approval of
the assignment and transfer of the Shares being subject to such
realization to the acquirer of such Shares. The Pledgor further
agrees that the respective acquirer will hold the Shares following
their assignment and transfer and Pledgor will see for it that such
acquirer will without any delay be entered in the Company's share
register as the owner of the Shares.
9.5. The proceeds from the realization of the Pledge shall be applied to
towards the Secured Obligations, including any costs and expenses
of the Pledgee, in accordance with the Collateral Agency Agreement,
but without prejudice to the rights of the Pledgee to recover any
shortfall from the Pledgor.
10. DURATION AND RELEASE
10.1. This Agreement shall remain in full force and effect until the
earlier of (a) the date upon which all Secured Obligations have
been irrevocably paid and discharged in full; and (b) the date
notified by the Pledgee to the Pledgor. The Pledge shall not cease
to exist if any payments made in satisfaction of the Secured
Obligations have only temporarily discharged the Secured
Obligations.
10.2. This Pledge is in addition to any existing or future collateral,
guarantee or other security held by the Pledgee.
10.3. This Pledge shall be discharged by, and only by, the express
release thereof granted by the Pledgee.
10.4. The Pledgee shall, in accordance with the Collateral Agency
Agreement, grant an express release of this Pledge without delay
upon demand of the Pledgor, as soon as all Secured Obligations
shall have been fully and finally discharged.
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10.5. Any release or discharge of the Pledge shall be null and void and
without effect if any payment received by the Pledgee and applied
towards satisfaction of all or part of the Secured Obligations
(a) is avoided or declared invalid as against the creditors of the
maker of such payment; or
(b) becomes repayable by the Pledgee to a third party; or
(c) proves not to have been effectively received by the Pledgee;
and the Pledgee shall be entitled to enforce the Pledge as if such
release or discharge had not occurred.
11. DUTIES OF THE PLEDGEE
The Pledgee shall not be liable for any acts or omissions with
respect to the Shares or the enforcement or the losses arising in
connection with the exercise of any of its rights, powers and
discretions hereunder, save for liabilities and expenses arising
from the gross negligence or willful misconduct of the Pledgee. The
Pledgee shall not be under any obligation to the Pledgor to take
any steps necessary to preserve any rights in the Shares against
any other parties but may do so at its option, and all expenses
reasonably incurred in connection therewith shall be for the
account of the Pledgor and shall be part of the Secured
Obligations. If any such expenses are borne by the Pledgee, the
Pledgor shall on first demand reimburse the Pledgee therefor, and
its reimbursement obligation shall be part of the Secured
Obligations.
12. EXPENSES AND COSTS
All expenses that the Pledgee may incur in connection with (i) the
administration of this Agreement as further provided in the
Collateral Agency Agreement, (ii) the custody or preservation of,
or the sale of, collection from, or other realization upon, any of
the Shares, (iii) the exercise or enforcement of any of the rights
of the Pledgee hereunder, or (iv) the failure by the Pledgor to
perform or observe any of the provisions hereof, shall be borne by
the Pledgor. All other expenses and duties reasonably incurred in
connection with this Agreement, in particular with regard to the
establishment and perfection of the Pledge, its enforcement and the
granting of any release, shall be borne by the Pledgor. The Pledgor
shall on first demand reimburse the Pledgee for any such expenses
or duties paid by it, and the same shall be part of the Secured
Obligations.
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13. TAXES
The Pledgor shall pay, promptly on demand of the Pledgee all stamp,
registration, notarial and other similar Taxes or fees paid or
payable by the Pledgee in connection with any action taken or
contemplated by or on behalf of the Pledgee for perfecting,
enforcing, releasing, canceling, reassigning or resolving any doubt
concerning, or for any other purpose in relation to this Agreement,
any amendment thereto, any transfer and/or assignment of the rights
and/or obligations under the same or the Security created or
intended to be created in respect of the Share and shall, from time
to time, indemnify the Pledgee promptly on demand against any
liabilities, costs, claims and expenses resulting from any failure
to pay by the Pledgor or any delay by Pledgor in paying any such
Taxes or fees.
14. MISCELLANEOUS
14.1. During the continuation of this Agreement, so long as no Event of
Default has occurred and is continuing, the Pledgee will not
declare itself to be the beneficial owner of the Shares or any
additional pledged shares and the Pledgee may disclose and deliver
a copy of the present Agreement to any tax or other authority, if
asked to do so.
14.2. If any of the provisions of this Agreement should be or become
invalid, unenforceable or impractical in whole or in part, the
validity of the other provisions hereof shall not be affected. In
that case the invalid, unenforceable or impractical provision is
deemed to be replaced by such valid and enforceable provision or
arrangement, which corresponds as closely as possible to the
invalid, unenforceable or impractical provision and to the parties'
economic aims pursued by and reflected in this Agreement. The same
applies in the event that this Agreement does not contain a
provision which it needs to contain in order to achieve the
economic purpose as expressed herein (Regelungslucke).
14.3. Notwithstanding any provision to the contrary contained herein, the
parties hereto agree that this Agreement is subject in all respects
to the terms of the Collateral Agency Agreement and for the
avoidance of doubt, in the event of any inconsistency, the
provisions of the Collateral Agency Agreement shall prevail.
14.4. No modification or amendment of this Agreement shall be binding
upon any party hereto unless such modification or amendment shall
be in writing and signed a duly authorized officer of the Pledgee
and the Pledgor.
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14.5. No failure or delay by a party hereto in exercising any right,
power or privilege under this Agreement shall operate as a waiver
thereof nor shall any single or partial exercise of any right,
power or privilege preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
All the rights of the Pledgee hereunder shall be in addition to any
other right vested in the Pledgee and all such rights may be
exercised from time to time and as often as the Pledgee may deem
expedient. The Pledgor waives any right it may have of first
requiring the Pledgee to proceed against or claim payment from any
other party, or enforce any guarantee or security before enforcing
the Pledge.
14.6. All communications to be made hereunder shall be made in writing to
the following addresses:
If made to the Pledgor: Solutia Europe SA/NV
Boondaelse Steenweg 6
B-1050 Brussels
Belgium
Parc Scientifique-Fleming
rue Laid Burniat 3
B-1348 Louvain-la-Neuve
Belgium
Att.: For the Attention of
Legal Department
Fax: +32 (0)1 048 1224
If made to the Pledgee: KBC Bank NV
Havenlaan 12
B-1080 Brussels
Belgium
Att.: Mr Dirk De Bleser
Fax: +32 (0)2 429 4920
14.7. Any communication or document made or delivered by one
Person to another under or in connection with this Agreement
shall only be effective:
(a) by way of fax, when received in legible form;
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(b) if by way of letter, when it has been left at the relevant
address with acknowledgement of receipt or when it has been
delivered to the addressee by registered mail;
(c) and, if a particular department or officer is specified as
part of its address details provided under Clause 14.6, if
addressed to that department or officer.
14.8. This Agreement shall become effective on 11 February 2004.
15. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance
with, the domestic substantive laws of Switzerland.
16. JURISDICTION
Any and all disputes arising out of or in connection with this
Agreement including but not limited to matters of validity,
conclusion, binding effect, interpretation, construction,
performance or non-performance and remedies shall be subject to the
non-exclusive jurisdiction of the Commercial Court (Handelsgericht)
of the Canton of Zurich, Switzerland, venue being Zurich 1. If
there is no ordinary place of foreclosure in Switzerland according
to the Federal Statute on Debt Collection and Bankruptcy (SchKG),
the place of foreclosure (Betreibungsort) shall be Zurich 1, which
shall be the place of performance for obligations arising under
this Agreement.
17. DELEGATION OF POWERS
The Pledgee shall be entitled, at any time and as often as may be
expedient, to delegate all or any of the powers and discretion
vested in it by, this Agreement in such manner, upon such terms and
to such Person as the Pledgee in its absolute discretion may think
fit.
18. BENEFIT OF THIS AGREEMENT
This Agreement shall be binding on, and inure for the benefit of,
the Pledgor, the Pledgee and their respective successors and
assigns. The expressions Pledgee and Pledgor include their
respective successors, and, in the case of the Pledgee, its nominee
or such other Person as may from time to time be appointed
Collateral Agent.
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19. ASSIGNMENT
The Pledgee shall be entitled to assign or otherwise transfer any
and all of its rights and duties under this Agreement to third
parties. The Pledgor may not assign or transfer any of its rights
or obligations under this Agreement, save prior agreement in
writing of the Pledgee.
20. EVIDENCE OF THE SECURED OBLIGATIONS OWING BY THE PLEDGOR
A certificate by the Pledgee as to the amount and the terms and
conditions of the Secured Obligations owing to the Pledgee from the
Pledgor is, prima facie evidence of the matters to which it
relates.
21. ENGLISH LANGUAGE
This Agreement is executed in English only, and no translation
thereof shall be binding on the parties hereto or consulted in
order to interpret this Agreement. Without prejudice to any other
procedural rule applicable to any dispute, any notice or other
communication under or in connection with this Agreement shall be
in the English language or, if in any other language, accompanied
by a translation into English. In the event of any conflict between
the English text and the text in any other language, the English
text shall prevail except that where a German translation of a
legal term appears in such text, the German translation shall
prevail.
22. RESPONSIBILITY OF THE PLEDGEE
22.1. The Pledgee shall not be responsible to any Noteholder for:
(a) the adequacy, accuracy or completeness of any recitals,
statements, representations or warranties contained in any
Subsidiary Guaranty or Collateral Document;
(b) the adequacy, accuracy or completeness of any statement or
information (whether written or oral) made in or supplied in
connection with any Subsidiary Guaranty or Collateral Document;
or
(c) the legality, validity, effectiveness, adequacy or enforceability
of any Subsidiary Guaranty or Collateral Document (including but
not limited to validity of the Floating Charge Agreement
(overeenkomst pand op
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handelszaak/contrat de gage sur fonds de commerce) between the
Issuer and the Pledgee).
22.2. Each Noteholder is responsible to make, and to continue to make,
its own independent appraisal of all risks arising under or in
connection with the Notes, the Subsidiary Guaranties and the
Collateral Documents (including but not limited to the financial
condition and affairs of the Issuer and the Subsidiary Guarantors,
the nature and extent of any recourse against any party or its
assets or the legality, validity, effectiveness, adequacy or
enforceability of any Subsidiary Guaranty or Collateral Document).
11 February 2004
Executed by:
SOLUTIA EUROPE SA/NV, AS PLEDGOR
/s/ Kristel DeRoover
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Attorney
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KBC BANK NV, AS PLEDGEE
/s/ Dirk De Blesser
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Head Operations and Accounting
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