Exhibit 99.5
EXECUTION COPY
SECURITY TRANSFER AGREEMENT
DATED 4TH MARCH, 2004
BETWEEN
CP FILMS VERTRIEBS GMBH
AS TRANSFEROR
AND
KBC BANK NV
AS TRANSFEREE
ALLEN & OVERY
FRANKFURT
CONTENTS
CLAUSE PAGE
1. Interpretation....................................................2
2. Transfer of Security Assets.......................................3
3. Substitution for Delivery.........................................4
4. Security Purpose..................................................4
5. Identification of Security Assets.................................4
6. Disposal of Security Assets.......................................5
7. Location of Security Assets.......................................5
8. Right of the Transferee to Examine the Security Assets............5
9. Reservation of Title..............................................5
10. Taking Possession by the Transferee...............................6
11. Enforcement and Realisation.......................................6
12. Maintenance of Liable Capital.....................................6
13. Undertakings......................................................8
14. Further Assurance.................................................8
15. Representations and Warranties....................................8
16. Insurance of the Security Assets..................................9
17. Third Party Rights................................................9
18. Release of Security..............................................10
19. Indemnity........................................................10
20. Duration and Independence........................................10
21. Costs and Expenses...............................................11
22. Miscellaneous....................................................11
23. Assignment.......................................................11
24. Severability.....................................................11
25. Notices..........................................................11
26. Governing Law....................................................12
27. Jurisdiction.....................................................12
Signatories...............................................................13
THIS SECURITY TRANSFER AGREEMENT (the AGREEMENT) is made on
4th March, 2004
BETWEEN:
(1) CP FILMS VERTRIEBS GMBH, a limited liability company (Gesellschaft
mit beschrankter Haftung) organised under the laws of Germany,
having its corporate seat in Bielefeld, Germany, which is
registered in the Commercial Register (Handelsregister) at the
Local Court (Amtsgericht) of Bielefeld under registration number
HRB 33407
(the TRANSFEROR)
and
(2) KBC BANK NV, a Belgian bank with registered office at Havenlaan 2,
B-1080 Brussels, Belgium, and registered at the Crossroads Bank for
Enterprises under enterprise number 0462.920.226
(the ASSIGNEE).
WHEREAS:
(A) Solutia Europe SA/NV (the ISSUER) and the holders of the Notes have
agreed to amend and restate the Issuer'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 (as defined below) and as
amended, modified or supplemented from time to time, the NOTES)
pursuant to an Agreement of Understanding and Restructuring dated
30th January, 2004 among the Issuer and the holders of the notes
party thereto (as amended, modified or supplemented from time to
time, the AGREEMENT OF UNDERSTANDING). In connection with the
Notes, the Issuer has entered into the Fiscal Agency Agreement
dated 11th February, 2004 among the Issuer, 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 holders of the
Notes 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 Transferor guarantees the prompt
payment and performance when due of all obligations of the Issuer
under the Credit Documents (as defined below) and grants security
in respect of the Security Assets (as defined below) to the
Transferee to secure its obligations to the Transferee as provided
herein and undertakes the obligations contemplated by this
Agreement.
(C) 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 Transferor agrees to transfer the
Security Assets (as defined below) in favour of the Transferee
under the following terms.
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IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
AGREEMENT OF UNDERSTANDING has the meaning given to that term under
(A) of the preamble.
BUSINESS DAY means a day (other than a Saturday or a Sunday) on
which banks are open for general business in Brussels and Frankfurt
am Main.
COLLATERAL AGENCY AGREEMENT means the collateral agency agreement
dated 11th February, 2004 among the Issuer, Amcis AG, Carbogen AG,
certain holders of the Notes and the Pledgee, as amended, modified
or supplemented from time to time.
CREDIT DOCUMENTS means the Agreement of Understanding, the Fiscal
Agency Agreement, the Collateral Agency Agreement, the Notes
(including without limitation the Terms and Conditions of Notes),
the Subsidiary Guaranties, the Collateral Documents and any other
agreement, instrument, and other document executed and delivered
pursuant hereto or thereto or otherwise evidencing or securing any
Note or any other obligation of the Pledgor, as amended, modified
or supplemented from time to time.
EURO, euro, or EUR means the lawful currency of the Participating
Member States.
EVENT OF DEFAULT has the meaning given to such term in the Terms
and Conditions of Notes.
FISCAL AGENCY AGREEMENT has the meaning given to that term under
(A) of the preamble.
GERMAN SUBSIDIARY GUARANTY means the guaranty made by the
Transferor in favour of the Transferee dated on or about the date
of this Agreement.
GERMANY means the Federal Republic of Germany.
ISSUER has the meaning given to that term under (A) of the
preamble.
NOTES has the meaning given to such term under (A) of the Preamble.
PARTICIPATING MEMBER STATE means a member state of the European
Union that adopts or has adopted the euro as its lawful currency
under the legislation of the European Union pertaining to the
Economic and Monetary Union.
PARTY means a party to this Agreement.
PAYMENT DEFAULT means the default of the Transferor to pay to the
Transferee any amounts owed by the Transferor to the Transferee
under the German Subsidiary Guaranty and any other Credit Document
to which it is party when due, provided that the enforcement of the
German Subsidiary Guaranty or the respective Credit Document is not
excluded pursuant to the maintenance of liable capital provisions
of the German Subsidiary Guaranty or the respective Credit
Document.
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SECURED CLAIMS means all present and future rights and claims
(Anspruche) (whether actual or contingent and whether held jointly
or severally or in any other capacity whatsoever) of the Transferee
against the Transferor which may arise under, out of, or in
connection with the Collateral Agency Agreement, the German
Subsidiary Guaranty or any other Credit Document to which the
Transferor is party.
SECURITY means any and all security granted by the Issuer or any
third party to the Transferee with a view to securing the Secured
Claims.
SECURITY ASSETS means (i) all machinery, equipment, tools and other
moveable fixed assets (bewegliches Anlagevermogen) other than
leased assets as set out in Schedule 3 as amended and supplemented
from time to time (MOVEABLE FIXED ASSETS) and (ii) all supplies and
operating materials (Roh-, Hilfs- und Betriebsstoffe) as well as
finished and unfinished products and merchandise (fertige und
unfertige Erzeugnisse und Waren) (INVENTORIES) kept or deposited at
the date of this Agreement and at any time after the date of this
Agreement at each of the Security Locations.
SECURITY LOCATION means the premises rented or owned by the
Transferor as shaded by lines (schraffiert) in the plan attached in
Schedule 1 hereto.
TERMS AND CONDITIONS OF NOTES means the terms and conditions of the
notes as set out in Schedule 1 of the Fiscal Agency Agreement as
amended, modified or supplemented from time to time.
1.2 Where the context so admits, the singular includes the plural and
vice versa.
1.3 The headings in this Agreement are for convenience only and are to
be ignored in construing this Agreement.
1.4 Any reference in this Agreement to a defined document is a
reference to that defined document as amended, supplemented or
novated from time to time.
1.5 Unless defined in this Agreement, words and expressions defined in
the Terms and Conditions of Notes shall have the same meaning when
used in this Agreement.
2. TRANSFER OF SECURITY ASSETS
(a) The Transferor hereby transfers and assigns all title to the
Security Assets to the Transferee. To the extent that the
Transferor holds, or will in future hold, title in the form of
co-ownership (Miteigentum) or joint ownership (Gesamthandseigentum)
in respect of the Security Assets or part thereof, it herewith
transfers such ownership rights to the Transferee. Additionally,
the Transferor transfers and assigns to the Transferee all inchoate
rights (Anwartschaftsrechte) it holds, or will hold in future, in
respect of the Security Assets.
(b) Any ownership rights (Eigentum), co-ownership rights (Miteigentum),
joint ownership rights (Gesamthandseigentum) or inchoate rights
(Anwartschaftsrechte) in respect of assets brought to the Security
Location in future will be automatically transferred to the
Transferee at the time such assets are actually brought to the
Security Location, in any event, however, no later than at the time
the Transferor acquires such rights.
(c) The Transferor hereby assigns to the Transferee all claims against
any suppliers arising from the termination (Auflosung) or
non-performance or partial performance of contracts, including, but
not limited to, repayments of payments made.
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(d) The Transferee accepts such transfers and assignments.
3. SUBSTITUTION FOR DELIVERY
(a) Instead of delivering the Security Assets to the Transferee, the
Transferor and the Transferee (as indirect possessor (mittelbarer
Besitzer)) agree that the Transferor will carefully safeguard the
Security Assets for the Transferee free of charge (kostenlose
Verwahrung).
(b) To the extent that third parties have or obtain actual possession
of the Security Assets, the Transferor hereby transfers and assigns
to the Transferee any existing or future claims it may have for the
surrender (Herausgabeanspruch) of the Security Assets. The
Transferee accepts such transfers and assignments.
4. SECURITY PURPOSE
The Security Assets shall serve as collateral for the Secured Claims.
5. IDENTIFICATION OF SECURITY ASSETS
(a) The Transferor undertakes to promptly (but in any event within 10
Business Days) deliver to the Transferee upon the occurrence of a
Payment Default (or at such other time as the Transferee may
request in order to safeguard its legitimate interests) an
up-to-date, accurate and complete list of all the Security Assets
each having a book value equal to or exceeding EUR 1,000. An
up-to-date, accurate and complete list of all the Security Assets
as per the date of this Agreement is attached hereto as Schedule 2.
(b) The list referred to above shall comprise a description of the type
and amount of goods, their standard cost per item and the total
value of items of the Inventories and of the nature and book value
of the Moveable Fixed Assets and such other data and information in
relation to the Security Assets as from time to time may be
reasonably requested by the Transferee in order to safeguard its
legitimate interests.
(c) The Transferor shall have the right to deliver the relevant lists
on a hard disk readable with standard business hard- and software.
The Transferee may contact the Transferor from time to time with a
view to agreeing the necessary details.
(d) For the avoidance of doubt, the Transferee shall also be entitled
to any and all Security Assets if for any reason whatsoever such
Security Assets are not, or are incompletely contained in any of
the lists provided to the Transferee pursuant to this Clause 5.
(e) If the Transferor employs a third party for its bookkeeping and/or
data-processing, the Transferor hereby authorises the Transferee to
obtain the lists of Security Assets directly from such third party
at the Transferor's expense and hereby instructs the third party to
provide the Transferee with the list in accordance with the terms
and conditions of this Agreement.
(f) The Transferor shall promptly provide the Assignee with an amended
and supplemented copy of Schedule 3 if any leased assets other than
currently set out in Schedule 3 are brought to or removed from the
Security Location after the date of this Agreement.
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6. DISPOSAL OF SECURITY ASSETS
The Transferor may dispose of any Security Assets in the ordinary
course of its business.
7. LOCATION OF SECURITY ASSETS
(a) The Transferor is obliged to keep the Security Assets in the
Security Location. The Transferor shall deal carefully with the
Security Assets and shall give due regard to all necessary care and
maintenance of the Security Assets at its own expense.
(b) Upon the occurrence of a Payment Default, the Transferee has the
right to mark the Security Assets as its property. The Transferor
shall keep accurate records of the Security Assets transferred and
assigned to the Transferee.
(c) A removal of Security Assets from the Security Locations specifying
the respective Security Asset, or a disposal of Security Assets,
other than removals or disposals in the ordinary course of
business, are only allowed with the prior written consent of the
Transferee.
8. RIGHT OF THE TRANSFEREE TO EXAMINE THE SECURITY ASSETS
(a) The Transferee or any representative of its choice acting
reasonably is entitled to inspect the Security Assets, the Security
Location and any documentation or records of the Transferor
concerning the Security Assets during normal business hours upon 3
Business Days' prior notice to the Transferor. The Transferee may
examine the Security Assets without such notice in order to permit
the safeguarding of its legitimate interests. The Transferor shall
provide all necessary information and has to allow access to
documentation relating to the Security Assets and the Security
Location respectively.
(b) If, and to the extent, documents required for the evaluation or
realisation of the Security Assets have been delivered by the
Transferor to a third party (especially to an accountant or tax
advisor) the Transferor hereby assigns to the Transferee its claims
against such third party for providing information and for
delivering such documents and hereby authorises the third party to
provide the Transferee with such information and documents required
to evaluate and realise the Security Assets. The Transferee accepts
such assignments.
(c) To the extent that information in connection with the Security
Assets have been stored in an electronic data processing system,
the Transferor shall allow the Transferee access to the computer,
including the peripheral equipment and all data concerning the
Claims. Moreover, software operators shall be made available
insofar as required, and any assistance required shall be provided
to the Transferee. If a third party handles the electronic
processing of data, the Transferor hereby assigns to the Transferee
all its claims to obtain these services, and hereby instructs such
third party to handle the processing of data for the Transferee
upon its instructions as it did for the Transferor. The Transferee
hereby accepts such assignment.
9. RESERVATION OF TITLE
The Transferor shall extinguish any reservation of title arising in
the normal course of business by settling the purchase price when
due for the Security Assets affected by such reservation of title.
The Transferee is entitled but not obliged to make such payments on
behalf of the Transferor, in which case title to such Security
Assets shall pass from any holder of such reservation of title to
the Transferee.
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10. TAKING POSSESSION BY THE TRANSFEREE
(a) The Transferee is entitled to revoke the right of disposal (Clause
6) of the Security Assets and to recover the Security Assets if a
Payment Default has occurred that is continuing. The Transferee
must notify its intention to recover the Security Assets to the
Transferee by giving 5 (five) Business Days' notice. Such notice
period is not necessary if the Transferor has generally ceased to
make payments or upon filing of an application for insolvency
proceedings by the Transferor. However, after all Payment Defaults
have been cured, the Transferee shall retransfer possession of the
Security Assets to the Transferor save to the extent that the
Security Assets have been sold and any proceeds resulting from such
sale have been applied in payment of any of the Secured Claims.
(b) The Transferee is further entitled to revoke the authorisation to
dispose and to request delivery of the Security Assets (i) if the
Transferor is in a material breach of its duty to handle the
Security Assets with care, (ii)if it disposes of the Security
Assets not in the ordinary course of business, or (iii) after the
Transferee has made a claim under the German Subsidiary Guaranty
which the Transferor has not paid when due, if (x) the Transferor
breaches any of the undertakings set out in Clause 13 hereof or (y)
the Transferor fails to deliver on due time any lists of Security
Assets according to Clause 5 (a) hereof.
11. ENFORCEMENT AND REALISATION
(a) The Transferee is entitled to realise the Security Assets and
enforce all other rights arising from this Agreement immediately
upon the occurrence of a Payment Default which has been declared to
the Transferor and is continuing.
(b) The Transferee will notify the Transferor of its intention to
realise the Security Assets by giving 5 (five) Business Days'
notice, whereby this notice may be given together with and at the
same time as the notice required according to Clause 10 (a). Such
notice period is not necessary if the Transferor has generally
ceased to make payments or upon filing of an application for
insolvency proceedings by the Transferor.
(c) The Transferee is entitled to sell the Security Assets by way of
private sale (freihandiger Verkauf) or private auction (freihandige
Versteigerung) in a commercially reasonable manner in its own name
but as trustee for the account of the Transferor. The Transferee is
also entitled to demand from the Transferor that the Transferor
realises the Security Assets in the best way possible or helps with
the realisation. The Transferor is obliged to transfer immediately
all proceeds resulting from such realisation to the Transferee.
(d) After the realisation of the Security Assets the Transferee will
apply the proceeds to cover the Secured Claims pursuant to Clause
4.1 of the Collateral Agency Agreement. If the proceedings of the
realisation are subject to turnover tax, the Transferee will submit
a credit note to the Transferor to the effect that such credit note
is to be seen as an invoice for the delivery of goods. It shall in
any event meet the requirements of German turnover tax law.
(e) The Transferee may determine which of the Security, if applicable,
shall be used to satisfy the Secured Claims.
12. MAINTENANCE OF LIABLE CAPITAL
(a) The enforcement of this Agreement shall be, at the date hereof and
at any time hereafter, limited to an amount equal to the net assets
of the Transferor, which are calculated as the Transferor's total
assets (the calculation of which shall take into account the
captions reflected
6
in Section 266 (2) A, B and C of the German Commercial Code
(Handelsgesetzbuch)) less its reserves for own shares (Section
266 (3) A III. 2. of the German Commercial Code) less its liabilities
(the calculation of which shall take into account the captions
reflected in Section 266 (3) B, C and D of the German Commercial
Code) less its registered share capital (Stammkapital) (the NET
ASSETS).
(b) For the purposes of calculating the Net Assets the balance sheet
shall be adjusted in a way that (i) any amounts which the
Transferor has received from funds from the issuance of the Notes
which have been on-lent by the Issuer to the Transferor and are
still outstanding at the time of the enforcement of this Agreement
shall be disregarded or (ii) the amount of any increase of the
Transferor's registered share capital out of retained earnings
(Kapitalerhohung aus Gesellschaftsmitteln) after the date of this
Agreement that has been effected without the prior written consent
of the Transferee shall be deducted from the Transferor's
registered share capital.
(c) Furthermore, the Transferor shall, in a situation where
(i) it does not have sufficient assets to maintain its
registered share capital; and
(ii) the Transferee would (but for this Clause) be entitled and
is seeking to enforce the security granted under this
Agreement,
realise any and all of its assets that are shown in the balance sheet
with a book value (Buchwert) which is significantly lower than the
market value of such assets, provided such asset is not necessary
for the Transferor's business (betriebsnotwendig).
(d) For the purpose of the calculation of the Net Assets and thus the
enforceable amount, the Transferor will deliver within 30 Business
Days after the notification by the Transferee of a Payment Default,
to the Transferee an up to date balance sheet drawn-up by its
auditors or any other reputable firm of auditors together with a
determination of the Net Assets by the respective auditors. The
balance sheet and determination of Net Assets shall be prepared in
accordance with accounting principles pursuant to the German
Commercial Code (Handelsgesetzbuch) and be based on the same
principles that were applied when establishing the previous year's
balance sheet.
(e) Should the Transferor fail to deliver such balance sheet and/or
determination of the Net Assets within the 30 Business Day period
referred to above or if the Transferor has generally ceased to make
payments or upon filing of an application for insolvency
proceedings by the Transferor, the Transferee shall be entitled to
enforce this Agreement, without the enforcement limitations
provided for above applying at the time of such enforcement, but is
obliged to retransfer proceeds from such enforcement to the extent
that the Transferor demonstrates in reasonable detail that the
enforcement of this Agreement violated the rules on preservation of
the stated share capital under Sections 30, 31 GmbH-Act as set out
in paragraph (a)-(c) above by resulting or enhancing negative
assets (Unterbilanz) of the Transferor.
(f) This Agreement shall further not be enforced to the extent that the
Transferor demonstrates in reasonable detail that such enforcement
would lead to a breach of the Gebot der Rucksichtnahme auf die
Eigenbelange der Gesellschaft (duty of care owing by the relevant
shareholders vis-a-vis the respective company) and of the Verbot
des existenzvernichtenden Eingriffs (prohibition of
insolvency-causing intervention), as developed by the recent
jurisdiction (in particular BGH II ZR 178/99 "Bremer Vulkan", BGH
II ZR 196/00 and BGH II ZR 300/00 "KBV"), of the Federal Supreme
Court (Bundesgerichtshof), caused for example, as far as this would
be within the scope of the cited court rulings, if the entering
into this Agreement and its enforcement results in the illiquidity
(Zahlungsunfahigkeit) of the
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Transferor. The Transferee shall be obliged to retransfer proceeds
from such enforcement to the extent that the Transferor demonstrates
in reasonable detail that the enforcement of this Agreement violated
the rules of the cited Federal Supreme Court rulings. Otherwise,
any claim for damages to the Transferee (excluding, for the
avoidance of doubt, any claim relating to unjust enrichment) by the
Transferor, any shareholders of the Transferor or its managing
directors shall be excluded.
(g) Notwithstanding paragraph (a)-(f) above the Transferee shall be
entitled to immediate enforcement of the security granted under
this Agreement, if and to the extent the Transferee has already
made a claim under the German Subsidiary Guaranty and the
enforcement of the German Subsidiary Guaranty was not excluded
pursuant to its maintenance of capital rules, but is obliged to
retransfer proceeds from such enforcement of the security granted
under this Agreement in accordance with paragraphs (e) and (f)
above.
13. UNDERTAKINGS
The Transferor undertakes:
(a) to inform the Transferee promptly (unverzuglich) of any
subsequent changes which impacts negatively on the average
aggregate monthly value of the Security Assets, provided
that such change of the average aggregate monthly value of
the Security Assets exceeds Euro 100,000 with respect to
the total number of Security Assets;
(b) to inform the Transferee without undue delay of any
subsequent changes to the Security Locations;
(c) to inform the Transferee promptly of any attachments
(Pfandung) regarding any and all of the Security Assets
or any other measures which may impair or jeopardise the
Transferee's rights relating to the Security Assets. In the
event of an attachment, the Transferor undertakes to forward
to the Transferee without undue delay a copy of the
attachment order and all other documents necessary for a
defence against the attachment. The Transferor shall inform
the attaching creditor promptly;
(d) to notify the Transferee promptly of any event or
circumstance which adversely affects the validity or
enforceability of this Agreement;
(e) to refrain from any acts or omissions which materially
adversely affect the security created under this Agreement
or result in a loss of the Security Assets; and
(f) to promptly provide the Transferee at its request with all
information and documents it may reasonably require in
relation to the Security Assets.
14. FURTHER ASSURANCE
The Transferor shall, at its own costs and expenses, undertake all
actions or make all declarations the Transferee acting reasonably
may require for perfecting or protecting or facilitating the
enforcement or realisation of the Security intended to be created
by this Agreement.
15. REPRESENTATIONS AND WARRANTIES
Without prejudice and in addition to the representations and
warranties of the Transferor under the Subsidiary Guaranty and the
other Credit Documents to which the Transferor is party, the
Transferor represents and warrants to the Transferee as of the date
hereof that:
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(a) it is validly existing and neither insolvent, nor subject
to any insolvency proceedings nor in a financial crisis
(Krise);
(b) the specification of the premises set out in Schedule 1
and to the best of its knowledge and in accordance with
the principles of prudent businessmen (Sorgfalt eines
ordentlichen Kaufmanns) the list of Security Assets in
Schedule 2 each represent a complete and accurate
specification of the German premises the Transferor uses
at the date of this Agreement to keep or deposit
Inventories or of the Security Assets, as the case may be;
(c) to the best of its knowledge the Transferor holds either
full title (Eigentum), or title in the form of
co-ownership (Miteigentum), or title in the form of joint
ownership (Gesamthandseigentum), or inchoate rights
(Anwartschaftsrecht) with regard to the Security Assets;
and
(d) all necessary corporate action has been taken to authorise
the entry into this Agreement.
16. INSURANCE OF THE SECURITY ASSETS
16.1 OBLIGATION TO INSURE
The Transferor undertakes at its own expense to keep the Security
Assets insured against risks normally insured against by companies
carrying on a similar business, and in particular to maintain all
insurance required by mandatory German law.
16.2 ASSIGNMENT
The Transferor herewith assigns any and all present and future
insurance claims (other than liability insurance claims
(Haftpflichtversicherungsanspruche) it holds under the respective
insurance contracts entered into with the insurer(s) as security
for the Secured Claims. The Transferee accepts such assignment. The
Transferor undertakes to notify the insurer(s) about this Agreement
and about the assignment of the insurance claims concerning the
Security Assets. Notwithstanding such assignment the Transferor
will continue to be obliged under the respective insurance
contracts with the proviso that the Transferor is not entitled to
terminate any of the insurance contracts without the prior written
consent of the Transferee. Insofar, as additional declarations and
actions are necessary for the assignment of the insurance claims
the Transferor shall, at the Transferee's request, make such
additional declarations or undertake such actions.
16.3 INSURANCE POLICY
The Transferor undertakes to require the insurer(s) to submit an
insurance policy to the Transferee. If the insurer(s) refuse(s) to
issue insurance policies, the Transferor will request an insurance
confirmation from the respective insurer(s) for the benefit of the
Transferee in the form of a Sicherungsschein or a
Sicherungsbestatigung as the case may be.
To the extent the Transferor is not, or not sufficiently,
insured, the Transferee has the right to insure the Security Assets
at their full value from time to time at the Transferor's expense.
17. THIRD PARTY RIGHTS
If and to the extent that there exists, in relation to the Security
Assets, a pledge by law (gesetzliches Pfandrecht) in favour of any
Person other than the Transferee, the Transferor
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shall, at the Transferee's request, promptly provide that all sums
properly due to such third party have been duly paid. The
Transferee shall be entitled to make such payments if and to the
extent that the Transferor does not promptly provide such evidence.
18. RELEASE OF SECURITY
After the full and complete satisfaction of all Secured Claims or
if so required by German mandatory law, the Transferee shall
retransfer the assigned Security Assets to the Transferor who
accepts such retransfer and surrender the excess proceeds, if any,
resulting from any realisation of the Security Assets or part
thereof. The Transferee will, however, transfer any Security Assets
to a third party to the extent that it is required by compulsory
law or contractual agreement with the Transferor to do so.
19. INDEMNITY
19.1 LIABILITY FOR DAMAGES
The Transferee shall not be liable for any loss or damage suffered
by the Transferor save in respect of such loss or damage which is
suffered as a result of the gross negligence or wilful misconduct
of the Transferee.
19.2 INDEMNIFICATION
The Transferor will indemnify the Transferee against any losses,
actions, claims, expenses, demands and liabilities which may be
reasonably incurred by or made against the Transferee for anything
done or omitted in the exercise or purported exercise of the powers
contained herein and occasioned by any breach of the Transferor of
any of its obligations or undertakings herein contained other than
to the extent that such losses, actions, claims, expenses, demands
and liabilities are incurred or made against the Transferee as a
result of the gross negligence or wilful misconduct of the
Transferee.
20. DURATION AND INDEPENDENCE
20.1 DURATION
This Agreement shall remain in full force and effect until the
earlier of (a) the date upon which all Secured Claims have been
irrevocably paid and discharged in full; and (b) the date notified
by the Transferee to the Transferor. This Agreement shall not cease
to exist if any payments made in satisfaction of the Secured Claims
have only temporarily discharged the Secured Claims.
20.2 CONTINUING SECURITY
This Agreement shall create a continuing security and no change or
amendment or increase whatsoever to the Notes or in any document or
agreement related thereto nor any release of Security shall affect
the validity or the scope of this Agreement.
20.3 INDEPENDENCE
This Agreement is independent from any other Security. No other
such Security shall prejudice, be prejudiced by, or be merged in
any way with, this Agreement.
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21. COSTS AND EXPENSES
The Transferor shall on demand pay (or procure payment) to the
Transferee all expenses that the Transferee 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
realisation upon, any of the Security Assets, (iii) the exercise or
enforcement of any of the rights of the Transferee hereunder, or
(iv) the failure by the Transferor to perform or observe any of the
provisions hereof. The Transferor shall on demand pay (or procure
payment) to the Transferee the amount of all other costs, charges,
fees and expenses (including fees for legal advisers) reasonably
and properly incurred by the Transferee in connection with the
preparation, execution, performance and amendment of this
Agreement, or any waiver in relation thereto, together in each case
with any applicable value added tax or other taxes.
22. MISCELLANEOUS
22.1 AMENDMENTS
Changes to and amendments of this Agreement including this Clause
must be made in writing.
22.2 WAIVERS AND REMEDIES CUMULATIVE
The rights of each Party under this Agreement:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights or remedies provided
by law;
(c) may be waived only in writing and specifically.
Delay in exercising, partial exercising or non-exercising
of any rights is not a waiver of that right.
23. ASSIGNMENT
The Transferor may not assign or transfer any of its rights under
this Agreement, save prior agreement in writing of the Transferee.
24. SEVERABILITY
(a) If a term of this Agreement is or becomes illegal, invalid or
unenforceable, that will not affect the legality, validity or
enforceability of any other terms of this Agreement.
(b) The illegal, invalid or unenforceable term shall be deemed to be
replaced by that term which best meets the intent of the replaced
term.
25. NOTICES
25.1 NOTICES
Any notice or other communication under or in connection with this
Agreement to the Transferor or the Transferee shall be in writing
and shall be delivered personally, by post or facsimile and shall
be sent to the address or facsimile number of the party, and for the
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attention of the individual, as set forth in Schedule 4 or such
other address or facsimile number as is notified by that party for
this purpose to the Transferee from time to time. Any notice under
this Agreement shall also be copied to the Issuer.
25.2 LANGUAGE
Unless otherwise agreed, 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 of
this Agreement, any notice or other communication 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.
25.3 DELIVERY
Any communication made by one Party to another under or in
connection with this Agreement will only be effective:
(a) if by way of fax, when received in legible form; or
(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;
and, if a particular department or officer is specified as
part of its address details, if addressed to that department or
officer.
26. GOVERNING LAW
This Agreement shall be governed by the laws of Germany.
27. JURISDICTION
(a) The courts of Frankfurt am Main, Germany, have exclusive
jurisdiction to settle any dispute in connection with this
Agreement.
(b) The Transferee may also take legal action against the Transferor
before any other competent court of law having jurisdiction over
the Transferor.
This Agreement has been entered into on the date stated at the beginning of
this Agreement and has been executed in three originals.
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SIGNATORIES
CP FILMS VERTRIEBS GMBH
By: /s/ Kristel Deroover
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Kristel Deroover
Attorney
KBC BANK NV
By: /s/ Dirk De Bleser
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Dirk De Bleser
Head of Operations & Accounting
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