Exhibit 99.4
Execution copy
COLLATERAL AGENCY AGREEMENT
DATED 11 FEBRUARY 2004
AMONG
SOLUTIA EUROPE SA/NV,
AS ISSUER,
AMCIS, AG
AND
CARBOGEN AG, AS
SUBSIDIARY GUARANTORS,
AND
KBC BANK NV, AS COLLATERAL AGENT
RELATING TO SOLUTIA EUROPE SA/NV
EUR 200,000,000 10.00 PERCENT NOTES DUE 2008
Execution copy
CONTENTS
CLAUSE PAGE
1. DEFINITIONS; INTERPRETATION.........................................2
2. APPOINTMENT OF THE COLLATERAL AGENT AND RELATED MATTERS.............2
3. ENFORCEMENT OF SECURITY.............................................5
4. PROCEEDS OF ENFORCEMENT.............................................6
5. RESPONSIBILITY OF THE COLLATERAL AGENT..............................7
6. EXPENSES AND INDEMNITIES............................................9
7. RESIGNATION OF THE COLLATERAL AGENT................................10
8. NOTICES............................................................11
9. GENERAL............................................................12
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This Collateral Agency Agreement is dated 11 February 2004 among:
(1) SOLUTIA EUROPE SA/NV, a limited liability company organised under
Belgian law (the "ISSUER");
(2) Amcis, AG, a company organised under Swiss law ("AMCIS") and
Carbogen AG, a company organised under Swiss law, ("CARBOGEN" and
together with Amcis and any other subsidiary of the Issuer that
enters into this Agreement as contemplated by Section 9.12 hereof,
individually a "SUBSIDIARY GUARANTOR" and collectively the
"SUBSIDIARY GUARANTORS");
(3) KBC Bank NV, acting through its registered office at Havenlaan 2,
1080 Brussels, Belgium, and registered in the Register of Legal
Persons under number 0462.920.226, acting as collateral agent as
set out herein (together with its successors and assigns as
provided herein, the "COLLATERAL AGENT"); and
(4) the Noteholders party hereto.
WHEREAS:
(A) The Issuer has agreed to amend and restate its euro 200,000,000
6.25 percent Notes due 2005 (the "ORIGINAL NOTES"), with its 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, including all exhibits
and schedules hereto, the "TERMS AND CONDITIONS OF NOTES" and such
Notes, as amended, modified, supplemented or replaced from time to
time, including all exhibits and schedules thereto, the "NOTES").
In connection with the Notes, the Issuer has entered into to the
Fiscal Agency Agreement dated 11 February 2004 (as amended,
modified, supplemented or replaced from time to time, together with
all exhibits and schedules thereto, the "FISCAL AGENCY AGREEMENT")
among the Issuer, Kredietbank S.A. Luxembourgeoise as fiscal agent
and paying agent (together with its successors and assigns, the
"FISCAL AGENT") and KBC Bank NV as principal paying agent (together
with its successors and assigns, the "PRINCIPAL PAYING AGENT") and
the Agreement of Understanding and Restructuring dated 30 January
2004 (as amended, modified, supplemental or replaced from time to
time, together with all exhibits and schedules thereto, the
"AGREEMENT OF UNDERSTANDING") among the Issuer and the Noteholders
party thereto. 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) As contemplated by the Agreement of Understanding and the Fiscal
Agency Agreement, the Subsidiary Guarantors have agreed to provide
Subsidiary Guaranties for the benefit of the Collateral Agent and
the Noteholders, and the Issuer and the Subsidiary Guarantors have
agreed to enter into the Collateral Documents and provide
Collateral for the Obligations to the Collateral Agent.
(C) Pursuant to Section 2.1(c) of this Agreement, the Collateral Agent
is the joint creditor, together with the respective Noteholders, of
all the Obligations.
(D) Requisite Noteholders pursuant to the Second Noteholders Meeting
(as defined in the Agreement of Understanding) and the Agreement of
Understanding desire that the Collateral Agent be appointed as
agent for the Noteholders and the Collateral should be vested in
the Collateral Agent, and the Collateral Agent agrees to act as
agent for the Noteholders, all as set out in this Agreement.
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(E) Additional Subsidiaries of the Issuer may enter into this Agreement
from time to time, including Solutia Services International
SCA/Comm. VA, a company organised under Belgian law ("SSI"), and
CPFilms Vertriebs GmbH, a limited liability company organised under
the laws of Germany ("CPFILMS GERMANY"), and, in connection
therewith, such Subsidiaries will enter into a Subsidiary Guaranty
and other Credit Documents.
(F) The Collateral Documents, among other things, grant to the
Collateral Agent a security interest in, and a lien on, certain
real and personal property of the Issuer and the Subsidiary
Guarantors and any proceeds thereof and the Issuer and the
Subsidiary Guarantors may in the future grant to the Collateral
Agent a security interest in, and/or lien on, additional real and
personal property of such Credit Parties (hereinafter all of such
collateral shall be referred to collectively as the "COLLATERAL").
1. DEFINITIONS; INTERPRETATION
1.1 DEFINITIONS
All terms not otherwise defined herein shall have the meanings set
forth in the Terms and Conditions of Notes annexed hereto as
Exhibit A.
1.2 HEADINGS
Headings in this Agreement are for convenience of reference only
and are not party of the substance hereof or thereof.
1.3 PLURAL TERMS
All terms defined in this Agreement in the singular form shall have
comparable meanings when used in the plural form and vice versa.
1.4 TIME
All references in this Agreement to a time of day means Central
European Time, unless otherwise indicated.
1.5 OTHER INTERPRETATIVE PROVISIONS
References in this Agreement to "Recitals", "Sections", "Exhibits"
and "Schedules" are to recitals, sections, exhibits and schedules
herein and hereto unless otherwise indicated. References in this
Agreement to any document, instrument or agreement shall
(a) include all exhibits, schedules and other attachments thereto,
(b) include all documents, instruments or agreements issued or
executed in replacement thereof, and (c) mean such document,
instrument or agreement, or replacement or predecessor thereto, as
amended, modified and supplemented from time to time and in effect at
any given time. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of
this Agreement. The words "include" and "including" and words of
similar import when used in this Agreement shall not be construed
to be limiting or exclusive.
2. APPOINTMENT OF THE COLLATERAL AGENT AND RELATED MATTERS
2.1 APPOINTMENT AND DUTIES OF THE COLLATERAL AGENT; COLLATERAL AGENT AS
JOINT CREDITOR
(a) The Requisite Noteholders acting pursuant to the Second Noteholders
Meeting have approved the Appointment of the Collateral Agent and,
as a result thereof and pursuant hereto, KBC
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Bank NV is hereby irrevocably appointed to act as collateral agent
hereunder and under the Subsidiary Guaranties and the Collateral
Documents on behalf of and for the benefit of the Noteholders with
such powers as are expressly granted to the Collateral Agent by the
terms of this Agreement, the Subsidiary Guaranties and the
Collateral Documents, together with such other powers as are
reasonably incidental thereto. The Collateral Agent hereby accepts
such appointment, and agrees to act as Collateral Agent as set out
herein and therein. The Credit Parties, by execution of a
counterpart hereof, and the Collateral Agent acknowledge that the
Collateral Agent, as joint creditor of the Obligations, acts in
respect of the Collateral, the Subsidiary Guaranties and the
Collateral Documents, in its own name and for its own account, and
for the benefit of the Noteholders, as set out herein.
(b) In furtherance but not in limitation of the foregoing, the
Collateral Agent is authorised to:
(i) perform the duties and to exercise the rights, powers and
discretions of a secured creditor under the applicable law
in respect of the Subsidiary Guaranties, the Collateral
Documents and the Collateral, together with any other
incidental rights, powers and discretions;
(ii) execute each Subsidiary Guaranty and Collateral Document
expressed to be executed by the Collateral Agent; and
(iii) take the steps required to perfect the Collateral.
(c) The Issuer and each Subsidiary Guarantor agree that the Collateral
Agent shall be the joint creditor (together with the relevant
Noteholders) of each and every obligation of the Issuer and of each
Subsidiary Guarantor towards the Noteholders under the Notes and
under each Subsidiary Guaranty, and the other Credit Documents to
which the Issuer or such Subsidiary Guarantor is party, as the case
may be. Accordingly, the Collateral Agent will have its own
independent right to demand performance by the Issuer and each
Subsidiary Guarantor of those obligations. However, any discharge
of such obligations to one of the Collateral Agent or a Noteholder
shall, to the same extent, discharge the corresponding obligation
owing to the other. Without limiting or affecting the Collateral
Agent's rights against the Issuer or any Subsidiary Guarantor
(whether under this paragraph or under any provision of any
Collateral Document), the Collateral Agent agrees for the benefit
of each Noteholder (on a several and divided basis) that, subject
as set out in the next sentence, it will not exercise its rights as
a joint creditor with a Noteholder except as provided in this
Collateral Agency Agreement. However, for the avoidance of doubt,
nothing in the previous sentence shall in any way limit the
Collateral Agent's right to act in the protection or preservation
of rights under or to enforce any Subsidiary Guaranty or Collateral
Document or other Credit Document (or to do any act reasonably
incidental to any of the foregoing).
2.2 POSITION OF THE COLLATERAL AGENT
(a) To the extent that it is a Noteholder, the Collateral Agent shall
have the same rights and powers as any other Noteholder and may
exercise such rights and powers as though it were not the
Collateral Agent.
(b) The Collateral Agent may:
(i) carry on any business with a Noteholder, the Issuer, a
Subsidiary Guarantor, or any of their respective
Affiliates; and
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(ii) retain any profits or remuneration it receives in relation
to any other business it carries on with a Noteholder, the
Issuer, a Subsidiary Guarantor, or any of their respective
Affiliates.
2.3 RELIANCE
The Collateral Agent may:
(a) rely on any notice or document believed by it in good faith to be
genuine and correct and to have been signed by, or with the
authority of, the proper Person or Persons;
(b) rely on any statement made by any Person regarding any matters
which may reasonably be assumed to be within his knowledge or
within his power to verify;
(c) rely on the written direction of the Requisite Noteholders or
certifying that the Persons signing such direction constitute the
Requisite Noteholders;
(d) engage, pay for and rely on professional advisers selected by it;
and
(e) act under the Subsidiary Guaranties and the Collateral Documents
through its personnel and agents.
2.4 REQUISITE NOTEHOLDERS' INSTRUCTIONS
(a) The Collateral Agent shall be entitled to act and shall be fully
protected if it acts upon the instructions of the Requisite
Noteholders in the exercise of any right, power or discretion or
any matter not expressly provided for in the Subsidiary Guaranties
or the Collateral Documents. Any such instructions given by the
Requisite Noteholders will be binding on all the Noteholders. In
the absence of instructions from the Requisite Noteholders, the
Collateral Agent may act as it considers to be in the best
interests of all the Noteholders.
(b) The Collateral Agent may assume that, unless it has received notice
to the contrary, any right, power, authority or discretion vested
in any Noteholder has not been exercised.
(c) The Collateral Agent may require the receipt of security reasonably
satisfactory to it, whether by way of payment in advance or
otherwise, against any liability or loss which it may incur in
complying with the instructions of the Requisite Noteholders.
(d) Persons indirectly holding Notes through accounts held with
intermediary institutions shall be entitled to instruct the
Collateral Agent, shall be deemed to be a "Noteholder" for purposes
of such instructions and the Collateral Agent shall be entitled to
rely thereon.
2.5 APPOINTMENT OF CO-COLLATERAL AGENT
The Collateral Agent may and, upon the request of the Requisite
Noteholders, shall, upon the consent of the Issuer (which consent
shall not be unreasonably withheld and shall not be required if an
Event of Default has occurred and is continuing) and by an
instrument in writing delivered to the Issuer, the Subsidiary
Guarantors and each Noteholder, appoint a bank or trust company or
an individual to act as separate Collateral Agent or co-Collateral
Agent in a jurisdiction where the Collateral Agent is disqualified
from acting or for any other purpose deemed by the Collateral Agent
or the Requisite Noteholders to be advantageous to their respective
interests, such separate Collateral Agent or co-Collateral Agent to
exercise only such rights and to have only such duties as shall be
specified in the instrument of appointment. The Issuer will pay the
reasonable compensation and expenses of any such
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separate Collateral Agent or co-Collateral Agent and, if requested
by the Collateral Agent, such separate Collateral Agent or
co-Collateral Agent or the Requisite Noteholders, the Issuer and
the Subsidiary Guarantors will enter into an amendment to this
Agreement, satisfactory in substance and form to the Collateral
Agent or the Requisite Noteholders and such separate Collateral
Agent or co-Collateral Agent, confirming the rights and duties of
such separate Collateral Agent or co-Collateral Agent.
3. ENFORCEMENT OF SECURITY
(a) Subject to the terms of this Agreement and the relevant Subsidiary
Guaranties and Collateral Documents, the Requisite Noteholders may
give or refrain from giving instructions to the Collateral Agent to
enforce or to refrain from enforcing or otherwise exercising its
rights and remedies under or pursuant to the Subsidiary Guaranties,
the Collateral Documents and the Collateral as Requisite
Noteholders see fit.
If so instructed by the Requisite Noteholders, the Collateral Agent
shall enforce or otherwise exercise its rights and remedies under
or pursuant to the Collateral Documents and the Collateral in its
own name and for its account as a joint creditor of the relevant
Noteholders.
(b) Subject to the terms of this Agreement, the Collateral Agent shall
enforce or refrain from enforcing or otherwise exercising its
rights and remedies under or pursuant to the Subsidiary Guaranties,
the Collateral Documents and the Collateral in such manner as the
Requisite Noteholders shall instruct or, in the absence of such
instructions, as it sees fit and, subject as required by applicable
law, solely having regard to the interests of the Noteholders.
(c) The Collateral Agent shall at all times (whether before or after
the occurrence and continuance of an Event of Default) have the
right and authority to direct the time, method and place of
conducting any proceeding or the exercise of any right or remedy
available to the Collateral Agent with respect to the Collateral or
for taking any other action authorised by the Collateral Documents;
provided that (i) following the occurrence and continuance of an
Event of Default, upon delivering to the Collateral Agent a notice
(a "NOTICE OF ENFORCEMENT") stating (a) that an Event of Default
has occurred and is continuing, and (b) the aggregate principal
amount of the Notes held by the Noteholders delivering such notice,
the Requisite Noteholders shall have the right to assume such right
and authority of the Collateral Agent and thereafter shall have the
exclusive right and authority to direct the Collateral Agent as to
such matters and (ii) nothing in this Section 3 shall impair the
right of the Collateral Agent in its discretion to take any action
deemed proper by the Collateral Agent which is not inconsistent
with the direction by the Requisite Noteholders.
(d) A Notice of Enforcement shall be deemed to have been given when
such Notice of Enforcement has actually been received by the
Collateral Agent and to have been rescinded when the Collateral
Agent has actually received a notice of such rescindment. A Notice
of Enforcement shall be deemed to be in effect at all times after
such Notice of Enforcement has been given until such time, if any,
as such Notice of Enforcement has been rescinded.
(e) If:
(i) upon enforcement of any of the Collateral, the Collateral
Agent sells or otherwise disposes of any asset; or
(ii) the Issuer or any Subsidiary sells or otherwise disposes
of an asset either when permitted to do so under the Notes
or at the request of or with the consent of the Requisite
Noteholders upon the occurrence and continuance of an
Event of Default under the Notes,
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the Collateral Agent is authorised to, and, at the request of the
Issuer or the Requisite Noteholders, as applicable, shall execute
in the name and on behalf of itself and each Noteholder, without
the need for any further referral to or authority from such
Noteholder, as the case may be:
(A) a release of the Liens on such asset; and/or
(B) if such asset comprises all of the Capital Stock of a
Subsidiary Guarantor, a release of (i) all present and
future liabilities (both actual and contingent) of such
Subsidiary Guarantor under the Notes and (ii) the Liens
created by the Collateral Documents with respect to any
Collateral of such Subsidiary Guarantor.
provided that in each such case the proceeds are to be applied in
the manner provided for in this Agreement and the Terms and
Conditions of Notes.
4. PROCEEDS OF ENFORCEMENT
4.1 APPLICATION OF PROCEEDS
Subject to the rights of any preferential creditor(s) the net
proceeds of enforcement of any of the Subsidiary Guaranties, the
Collateral Documents or the Collateral shall be applied by the
Collateral Agent in the following order:
(a) FIRST, in payment of all costs, charges, expenses, losses
and liabilities incurred by or on behalf of the Collateral
Agent in connection with carrying out its duties or
exercising its powers and discretions under this
Agreement, the Subsidiary Guaranties and the Collateral
Documents;
(b) SECOND, in payment of all costs, charges, expenses, losses
and liabilities incurred by or on behalf of the Fiscal
Agent in connection with carrying out its duties or
exercising its powers and discretions under the Fiscal
Agency Agreement;
(c) THIRD, in payment of the principal of and interest on and
any premium on (if any) Notes in accordance with the
Fiscal Agency Agreement and the Terms and Conditions of
the Notes, it being understood that the Collateral Agent
may pay such amounts to the Principal Paying Agent for
application by the Principal Paying Agent to such amounts;
(d) FOURTH, in payment of any other costs, charges, expenses,
losses, liabilities and other amounts owing in respect of
the other Obligations;
(e) FIFTH, in payment of the surplus (if any) to the Issuer,
for its account and for the account of the Subsidiary
Guarantors as the case may be or as a court of competent
jurisdiction may otherwise direct.
4.2 VALID DISCHARGE
An acknowledgement of receipt signed by the relevant person to whom
payments are to be made under this Clause 4 shall constitute a
valid discharge of the Collateral Agent's duties with respect to
such proceeds.
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5. RESPONSIBILITY OF THE COLLATERAL AGENT
5.1 RESPONSIBILITY
(a) The Collateral Agent shall not be responsible to any Noteholder
for:
(i) the adequacy, accuracy or completeness of any recitals,
statements, representations or warranties contained in any
Subsidiary Guaranty or Collateral Document;
(ii) 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
(iii) 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
handelszaak/contrat de gage sur fonds de commerce) between
the Issuer and the Collateral Agent).
(b) 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).
5.2 EXCLUSION OF LIABILITY
(a) The Collateral Agent shall not be liable to any Noteholder for any
action taken or not taken by it in connection with any Subsidiary
Guaranty or Collateral Document, unless caused by its gross
negligence or wilful misconduct.
(b) No party (other than the Collateral Agent) may commence any case or
proceeding against any officer, employee or agent of the Collateral
Agent in respect of any claim it may have against the Collateral
Agent or in respect of any act or omission of any kind by that
officer, employee or agent. Any officer, employee or agent of the
Collateral Agent may rely on this Subclause.
5.3 DEFAULT
(a) The Collateral Agent shall not be obliged to monitor or enquire
whether an Event of Default has occurred. The Collateral Agent
shall not be deemed to have knowledge of the occurrence of any
Events of Default unless and until it shall have received written
notice from any Credit Party or any Noteholder describing such
Event of Default in reasonable detail.
(b) If the Collateral Agent:
(i) receives notice from a Noteholder referring to this
Agreement, describing an Event of Default and stating that
the event is an Event of Default; or
(ii) becomes aware of the non-payment of any principal or
interest on the Notes by the Issuer that constitutes an
Event of Default,
then the Collateral Agent shall promptly notify the Noteholders of
such event in accordance with Section 14 of the Terms and
Conditions of Notes.
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5.4 INFORMATION
(a) To the extent that a Noteholder has provided its address tot the
Collateral Agent, the Collateral Agent shall promptly deliver to
the Noteholders the original or a copy of any document which is
delivered to the Collateral Agent for such purpose.
(b) Except where a Subsidiary Guaranty or a Collateral Document
specifically provides otherwise, the Collateral Agent shall not be
obliged to review or check the adequacy, accuracy or completeness
of any document it delivers to the Noteholders or the Credit
Parties.
(c) Except as provided above, the Collateral Agent shall have no duty:
(i) either initially or on a continuing basis to provide any
Noteholder with any credit or other information concerning
the risks arising under or in connection with the Notes,
Subsidiary Guaranties or Collateral Documents (including
any information relating to the financial condition or
affairs of the Issuer or the Subsidiary Guarantors or the
nature or extent of recourse against any party or its
assets) whether coming into its possession before, on or
after the date of this Agreement; or
(ii) unless specifically requested to do so by a Noteholder or
expressly required under this Agreement or a Collateral
Document, to request any certificate or other document
from the Issuer or any Subsidiary Guarantor.
(d) In acting as the Collateral Agent, the agency division of the
Collateral Agent is treated as a separate entity from its other
divisions and departments. Any information acquired by the
Collateral Agent which, in its opinion, is acquired by it other
than in its capacity as the Collateral Agent may be treated as
confidential by the Collateral Agent and shall not be treated as
information possessed by the Collateral Agent in its capacity as
such.
(e) The Collateral Agent will maintain confidential (and will cause its
employees and agents to maintain confidential) any confidential
information that it may receive from any Credit Party in its
capacity as Collateral Agent pursuant to any Collateral Document in
accordance with its established practices for keeping information
confidential (which shall be in compliance with laws applicable to
it) and, prior to the occurrence and continuance of an Event of
Default, shall not disclose such information to third parties
without the prior consent of the relevant Credit Party, except for
disclosure: (a) to legal counsel, accountants and other
professional advisors to the Collateral Agent; (b) to regulatory
officials having jurisdiction over the Collateral Agent; (c) as
required by applicable law or in connection with any legal
proceeding after prior notification to the Issuer; (d) to any
Noteholder or its legal counsel, accountants and other professional
advisors, provided that such Noteholder shall have agreed in
writing to keep such information confidential in the same manner as
the Collateral Agent has agreed pursuant to this paragraph; (e) to
account debtors and other persons as expressly required or
permitted pursuant to the Credit Documents; and (f) of information
that has been previously disclosed publicly without breach of this
provision; provided that this paragraph shall not apply after the
occurrence and during the continuance of any Event of Default.
5.5 COMPLIANCE
The Collateral Agent may refrain from taking any action (including
disclosing any information) which, in its opinion constitutes a
breach of any law or regulation, and may take any action which, in
its opinion, is reasonable necessary or desirable to comply with
any law or regulation.
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5.6 EVIDENCE AND CALCULATIONS - ACCOUNTS
Accounts maintained by the Collateral Agent in connection with this
Agreement shall be prima facie evidence of the matters to which
they relate for the purpose of any litigation or arbitration
proceedings.
5.7 TERMINATION
When all of the Obligations have been indefeasibly paid in full
this Agreement shall terminate and the Collateral Agent will
execute and deliver to the respective Issuer and Subsidiary
Guarantors, at the expense of the Issuer, the proper instruments
acknowledging the termination of this Agreement, and will duly
assign, transfer and deliver to the Issuer and Subsidiary
Guarantors, at the expense of the Issuer and without recourse,
representation or warranty of any kind whatsoever (except with
respect to the absence of any liens created by or arising under the
Collateral Agent), such of the Collateral of the respective Issuer
and Subsidiary Guarantors as may be in possession of the Collateral
Agent and has not theretofore been disposed of, applied or
released.
6. EXPENSES AND INDEMNITIES
(a) The Issuer agrees to indemnify and hold harmless the Collateral
Agent and its directors, officers, employees, agents and advisors
from and against any and all claims, losses, liabilities,
obligations, damages and expenses (including reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded
against the Collateral Agent or any such Person (hereinafter the
"INDEMNIFICATION AMOUNT") arising out of, related to or in
connection with (i) this Agreement or any Subsidiary Guaranty or
Collateral Document (including the enforcement of any Subsidiary
Guaranty or Collateral Document) or (ii) any refund or adjustment
of any amount paid or payable to the Collateral Agent under or in
respect of any Subsidiary Guaranty or Collateral Document or any
Collateral, or any interest thereon, which may be ordered or
otherwise required by any Person, except to the extent such claims,
losses, liabilities, damages and expenses are found by a court of
competent jurisdiction to have resulted from such Person's gross
negligence or wilful misconduct. If the Issuer fails to pay on
demand the Indemnification Amount, interest will accrue thereon at
a rate per annum equal to that specified in Section 1 of the Terms
and Conditions of Notes from the scheduled date for payment thereof
until the actual date of payment and such interest shall be added
to the Indemnification Amount.
(b) The Issuer agrees to pay upon demand to the Collateral Agent the
amount of any and all reasonable out-of-pocket expenses, including
the reasonable fees and expenses of its counsel (and any local
counsel) and of any experts and agents, which the Collateral Agent
may incur in connection with (i) the administration of this
Agreement and the other Subsidiary Guaranties and Collateral
Documents including all filings, fees and other matters relating to
or in connection with the perfection of Liens in the Collateral,
(ii) the custody or preservation of, or the sale of, collection
from, or other realisation upon, any of the Collateral, (iii) the
exercise or enforcement (whether through negotiations, legal
proceedings or otherwise) of any of the rights or remedies of the
Collateral Agent under the Subsidiary Guaranties or the Collateral
Documents or (iv) the failure by any Credit Party or any other
Person (other than the Collateral Agent) to perform or observe any
of the provisions of the Subsidiary Guaranties, Collateral
Documents or any other Credit Document. The Issuer hereby agrees to
pay to the Collateral Agent, for its own account, an annual fee in
an amount agreed upon by the Issuer and the Collateral Agent from
time to time, which shall be payable by the Issuer annually in
advance on the date hereof and on each anniversary hereof.
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(c) The obligations of the Issuer under this Section 6 shall survive
the payment and performance of the Obligations and the termination
of this Agreement and all other Credit Documents.
7. RESIGNATION OF THE COLLATERAL AGENT
(a) The Collateral Agent may resign and appoint any of its affiliates
as successor Collateral Agent by giving 30 days' prior written
notice to the Issuer and the Requisite Noteholders.
(b) Alternatively, the Collateral Agent may resign by giving 30 days'
prior written notice to the Issuer, the Subsidiary Guarantors and
the Noteholders, in which case the Requisite Noteholders may
appoint a successor Collateral Agent; provided that, if an Event of
Default has not occurred and is continuing, such successor shall be
reasonably acceptable to the Issuer.
(c) If no successor Collateral Agent has been appointed under paragraph
(b) above within 60 days after notice of resignation was given, the
Collateral Agent may appoint a successor Collateral Agent who is
reasonably acceptable to the Requisite Noteholders and the Issuer.
(d) Any successor Collateral Agent shall be a bank licensed to conduct
banking business in the European Community that is eligible to act
in the capacity as Collateral Agent.
(e) The resignation of the Collateral Agent and the appointment of any
successor Collateral Agent shall become effective upon notification
of the successor Collateral Agent to the Issuer, the Subsidiary
Guarantors and the Noteholders that it accepts its appointment.
Upon receipt of such notification, the successor Collateral Agent
will succeed to the position of the Collateral Agent and the term
"COLLATERAL AGENT" will mean the successor Collateral Agent.
(f) The retiring Collateral Agent shall, at the Issuer's cost and
expense, make available to the successor Collateral Agent such
documents and records and provide such assistance as the successor
Collateral Agent may reasonably request for the purposes of
performing its functions as the Collateral Agent under this
Agreement, the Subsidiary Guaranties and the Collateral Documents.
(g) Upon its resignation becoming effective, this Clause shall continue
to benefit the retiring Collateral Agent in respect of any action
taken or not taken by it in connection with this Agreement, the
Subsidiary Guaranties or the Collateral Documents while it was the
Collateral Agent, and, subject to paragraph (f) above, it will have
no further obligations under any Subsidiary Guaranty or Collateral
Document.
(h) The Requisite Noteholders may, by notice to the Collateral Agent,
require the Collateral Agent to resign under paragraph (b) above.
(i) Notwithstanding the foregoing, the appointment of a successor
Collateral Agent shall not be effective unless and until all
actions have been taken to ensure that all Liens (including the
perfection thereof) under the Collateral Documents will be
maintained after giving effect to the appointment of such successor
Collateral Agent. Both the retiring and successor Collateral Agent
shall use commercially reasonable efforts to minimise any fees and
expenses in connection with this clause (i).
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8. NOTICES
8.1 COMMUNICATION IN WRITING
Any communication to be made under or in connection with this
Agreement shall be made in writing and, unless otherwise stated,
may be made by fax or letter.
8.2 ADDRESSES
The address and fax number (and the department or officer, if any,
for whose attention the communication is to be made) of each party
for any communication or document to be made or delivered under or
in connection with this Agreement is that identified with its name
below or any other substitute address, fax number or department or
officer as any party may notify to the other parties by not less
than five Business Days' notice.
ISSUER: Solutia Europe SA/NV
Boondaelse Steenweg 6
B-1050 Brussels
Belgium
Parc Scientifique Fleming
Rue Laid Burniat 3
B-1348 Louvain-la-Neuve
Belgium
Fax: +32 10 48 12 24
Attention: Legal Department
COLLATERAL AGENT: KBC Bank NV
Havenlaan 12
B-1080 Brussels
Belgium
Fax: +32 2 429 49 20
Attention: Mr. Dirk De Bleser
8.3 DELIVERY
Any communication or document made or delivered by one person to
another under or in connection with this Agreement will only be
effective:
(a) by way of fax, when received in legible form;
(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 9.2
(Addresses), if addressed to that department or officer.
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9. GENERAL
9.1 THIRD PARTY BENEFICIARIES; FREE EXERCISE OF RIGHTS
Nothing expressed in or to be implied from this Agreement is
intended to give, or shall be construed to give, any Person
(including the Issuer and its Subsidiaries), other than the
Noteholders and the Collateral Agent, their permitted successors
and assigns hereunder and the indemnities referred to in Section 6
hereof, any benefit or legal or equitable right, remedy or claim
under or by virtue of this Agreement or under or by virtue of any
provision herein.
Each Noteholder may exercise its rights and remedies under and in
accordance with the Credit Documents and all related documents,
instruments and agreements for its sole benefit and no Noteholder
shall have any obligation or duty to exercise any such rights or
duties for the benefit of any other Noteholder. None of the
Noteholders party hereto or any of their respective successors and
assigns shall have any obligations or liabilities pursuant hereto.
Amendments or waivers hereto with the consent of the Requisite
Noteholders shall not require any further consent of any Noteholder
party hereto.
9.2 AMENDMENTS; WAIVERS
Any term, covenant, agreement or condition of this Agreement or any
of the Subsidiary Guaranties or Collateral Documents may be amended
or waived if such amendment or waiver is in writing and is signed
by the Requisite Noteholders; provided, however that:
(a) Any amendment or waiver which affects the rights or duties
of the Collateral Agent must be in writing and be signed
by the Collateral Agent;
(b) Any amendment to Section 6 of this Agreement or this
Section 9.2 must be in writing and acknowledged and agreed
to by the Issuer.
9.3 NO WAIVER
No failure or delay by the Collateral Agent or the Noteholders in
exercising any right, power or remedy under this Agreement shall
operate as a waiver thereof nor shall any single or partial
exercise or waiver of any right, power or remedy. The remedies
provided in this Agreement are cumulative and are not exclusive of
any remedies provided by law. Unless otherwise specified in such
waiver or consent, a waiver or consent given hereunder shall be
effective only in the specific instance and for the specific
purpose for which given.
9.4 SEVERABILITY
Each of the provisions of this Agreement is several and distinct
from the others and if at any time one or more of such provisions
is or becomes invalid illegal or unenforceable the validity,
legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
In case of any such illegality, invalidity or unenforceability, the
parties shall negotiate in good faith with a view to agree on the
replacement of such provision by a provision which is legal, valid
and enforceable and which is to the extent practicable in
accordance with the intents and purposes of this Agreement and
which in its economic effect comes as close as practicable to the
provision being replaced.
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9.5 BENEFIT OF THIS AGREEMENT
This Agreement shall be binding on, and inure for the benefit of,
the Collateral Agent and the Noteholders and their respective
successors and assigns.
9.6 ASSIGNMENT
Except as expressly provided herein, no party may assign or
transfer any of its rights or obligations under this Agreement
without the prior written consent of the other parties hereto.
9.7 GOVERNING LAW
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE ISSUER, THE
SUBSIDIARY GUARANTORS AND THE COLLATERAL AGENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
9.8 JURISDICTION
Each of the Issuer, the Subsidiary Guarantors and the Collateral
Agent hereby irrevocably submits to the non-exclusive jurisdiction
of any state or United States Federal court sitting in the Borough
of Manhattan, New York City, State of New York and of any Belgian
court sitting in Brussels over any suit, action or proceeding
arising out of or relating to this Agreement. Each of the Issuer,
the Subsidiary Guarantors and the Collateral Agent irrevocably
waives, to the fullest extent permitted by law, any objection which
it may have to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that any such
suit, action or proceeding brought in such a court has been brought
in an inconvenient forum.
9.9 INDEPENDENT INVESTIGATION
None of the Collateral Agent or any Noteholder, nor any of its
respective directors, officer, agents or employees, shall be
responsible to any other such Persons for the solvency or
financial condition of any Credit Party or the ability of any
Credit Party to repay any of the Obligations, or for the value,
sufficiency, existence or ownership of any of the Collateral, or
the statements of any Credit Party, oral or written, or the
validity, sufficiency or enforceability of any of the Obligations
or any document or agreement executed or delivered in connection
with or pursuant to any of the foregoing.
9.10 JURY TRIAL
THE ISSUER, THE SUBSIDIARY GUARANTORS AND THE COLLATERAL AGENT,
EACH AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE SUBSIDIARY GUARANTIES OR THE COLLATERAL
DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE
ISSUER, THE SUBSIDIARY GUARANTORS
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AND THE COLLATERAL AGENT, EACH (I) ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
THE ISSUER, THE SUBSIDIARY GUARANTORS AND THE COLLATERAL AGENT,
HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT,
THE SUBSIDIARY GUARANTIES AND THE COLLATERAL DOCUMENTS, AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS, AND (II) FURTHER WARRANTS AND REPRESENTS THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS OF THIS AGREEMENT, THE SUBSIDIARY GUARANTIES AND THE
COLLATERAL DOCUMENTS. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
9.11 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.
9.12 ADDITIONAL SUBSIDIARY GUARANTORS
Each Subsidiary of the Issuer (including SSI and CPFilms Germany)
which enters into a Subsidiary Guaranty after the date hereof shall
execute a counterpart to this Agreement in the form of Exhibit B
hereto and thereby become a Subsidiary Guarantor for all purposes
hereof, including for purposes of Section 2.1 (c) hereof.
9.13 FURTHER ASSURANCES
The Issuer and each Subsidiary Guarantor covenants and agrees to
execute and deliver all such agreements, instruments and documents
and to take all such further actions as the Collateral Agent may
reasonably deem necessary from time to time to carry out the intent
and purposes of this Agreement and to consummate the transactions
contemplated hereby.
9.14 COUNTERPARTS; EFFECTIVENESS
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate
counterparts so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the
execution of a counterpart hereof by each party hereto.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered by its duly authorised officers as of the date
first above written.
By execution below, the Noteholders identified below consent to this
Agreement and the transactions contemplated hereby:
DB DISTRESSED OPPORTUNITIES FUND, L.P.
DB DISTRESSED OPPORTUNITIES FUND, LTD.
SPHINX DISTRESSED FUND SPC
SOUTH DAKOTA INVESTMENT COUNCIL
HFR ASSET MANAGEMENT, LLC
LIGHTHOUSE MULTI-STRATEGY MASTER FUND, L.P.
THE OPPORTUNITY FUND LLC
POST TOTAL RETURN FUND, L.P.
POST HIGH YIELD, L.P.
POST BALANCED FUND, L.P.
POST OPPORTUNITY FUND, L.P.
MW POST PORTFOLIO FUND LTD.
MW POST OPPORTUNITY OFFSHORE FUND, LTD.
MW POST LONG/SHORT OPPORTUNITY FUND, LTD.
SPRUGOS INVESTMENTS IV, LLC
By: POST ADVISORY GROUP, LLC
By: _______________________________________________
Lawrence A. Post
Title: Chief Executive Officer
S-1 Collateral Agency Agreement
Execution copy
FARALLON CAPITAL INSTITUTIONAL PARTNERS III, L.P.
FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P.
FARALLON CAPITAL PARTNERS, L.P.
TINICUM PARTNERS, L.P.
FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.
By: FARALLON PARTNERS, L.L.C.
By: _______________________________________________
Monica R. Landry
Title: Managing Member
FARALLON CAPITAL OFFSHORE INVESTORS, INC.
By: FARALLON CAPITAL MANAGEMENT, L.L.C.
By: _______________________________________________
Monica R. Landry
Title: Managing Member
S-2 Collateral Agency Agreement
Execution copy
WATERSHED CAPITAL PARTNERS, L.P.
WATERSHED CAPITAL INSTITUTIONAL PARTNERS, L.P.
By: WS PARTNERS, L.L.C.
By: _______________________________________________
Meridee Moore
Title: Senior Managing Member
WATERSHED CAPITAL PARTNERS (OFFSHORE), LTD.
By: WATERSHED ASSET MANAGEMENT, L.L.C.
By: _______________________________________________
Meridee Moore
Title: Senior Managing Member
S-3 Collateral Agency Agreement
Execution copy
CASPIAN CAPITAL PARTNERS, L.P.
MARINER OPPORTUNITIES FUND, LP
MARINER LDC
By: MARINER INVESTMENT GROUP, INC.
By: _______________________________________________
Peter O'Rourke
Title: General Counsel and Assistant Secretary
MARINER OPPORTUNITIES II, LP
By: OPPORTUNITIES II, L.L.C.
By: _______________________________________________
Jonathan Rosenstein
Title: Managing Member
TRILOGY PORTFOLIO COMPANY LLC
By: TRILOGY CAPITAL, LLC
By: _______________________________________________
Jonathan Rosenstein
Title: Managing Member
S-4 Collateral Agency Agreement
Execution copy
KBC BANK NV, AS COLLATERAL AGENT
By KBC Bank as Collateral Agent
Name: Dirk De Belser
Title: Head Operations & Accounting
SOLUTIA EUROPE SA/NV
By /s/ Kristel Deroover
Name: Kristel Deroover
Title: Attorney
AMCIS AG
By /s/ Kristel Deroover
Name: Kristel Deroover
Title: Attorney
CARBOGEN AG
By /s/ Kristel Deroover
Name: Kristel Deroover
Title: Attorney
S-5 Collateral Agency Agreement