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Exhibit 10 (ll)

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 CLIFFORD CHANCE LLP
                     
CONFORMED COPY
       
USD 225,000,000
 
SECURED FACILITIES AGREEMENT
 
amended and restated as at 23 May 2007
 
for
 
FLEXSYS HOLDING B.V.
 
arranged by
 
KBC BANK N.V.
 
AND
 
CITIGROUP GLOBAL MARKETS LIMITED
 
with
 
KBC BANK N.V.
 
acting as Agent
 
and
 
KBC BANK N.V.
 
acting as Security Trustee
 
 

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AMENDED AND RESTATED MULTICURRENCY TERM AND
REVOLVING FACILITIES AGREEMENT

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CONFORMED COPY

 

CONTENTS
Clause
Page
     

 
1.
Definitions And Interpretation
1
2.
The Facilities
23
3.
Purpose
24
4.
Conditions Of Utilisation
24
5.
Utilisation
26
6.
Utilisation - Letters Of Credit
27
7.
Letters Of Credit
31
8.
Optional Currencies
35
9.
Repayment
38
10.
Prepayment And Cancellation
39
11.
Interest
43
12.
Interest Periods
44
13.
Changes To The Calculation Of Interest
45
14.
Fees
46
15.
Tax Gross Up And Indemnities
47
16.
Increased Costs
50
17.
Other Indemnities
51
18.
Mitigation By The Lenders
52
19.
Costs And Expenses
53
20.
Guarantee And Indemnity
55
21.
Representations
62
22.
Information Undertakings
71
23.
Financial Covenants
76
24.
General Undertakings
79
25.
Events Of Default
98
26.
Changes To The Lenders
105
27.
Changes To The Obligors
110
28.
Role Of The Agent And The Arranger
113
29.
Role Of Security Trustee
118
30.
Conduct Of Business By The Finance Parties
129
31.
Sharing Among The Finance Parties
130
32.
Payment Mechanics
132

 
 

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33.
Set-Off
135
34.
Application Of Proceeds
135
35.
Notices
137
36.
Calculations And Certificates
138
37.
Partial Invalidity
139
38.
Remedies And Waivers
139
39.
Amendments And Waivers
139
40.
Counterparts
140
41.
USA Patriot Act
140
42.
Governing Law
141
43.
Enforcement
141
44.
Waiver Of Jury Trial
142

SCHEDULE 1 The Original Parties
143
    Part I The Original Obligors
143
    Part II The Original Lenders
145
   
SCHEDULE 2 Conditions Precedent And Conditions Subsequent
146
    Part I Conditions Precedent To Initial Utilisation
146
    Part II Conditions Subsequent To Initial Utilisation
156
    Part III Conditions Precedent Required To Be Delivered By An Additional
Obligor
159
   
SCHEDULE 3 Requests
163
    Part I A Utilisation Request Loans
163
    Part I B Utilisation Request Letters Of Credit
165
    Part II Selection Notice
167
   
SCHEDULE 4 Mandatory Cost Formulae
168
   
SCHEDULE 5 Form Of Transfer Certificate
171
   
SCHEDULE 6 Form Of Accession Letter
173
   
SCHEDULE 7 Form Of Resignation Letter
174
   
SCHEDULE 8 Form Of Compliance Certificate
175
   
SCHEDULE 9 Timetables
177
    Part I Loans
177
    Part II Letters Of Credit
179
   
SCHEDULE 10 Form Of Letter Of Credit
180
   
SCHEDULE 11 Centre Of Main Interests And Establishments
183
   
SCHEDULE 12 Agreed Security Principles
185

 
 

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SCHEDULE 13 Sources And Uses Table
188

 

 
 

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THIS AGREEMENT is amended and restated as at 23 May 2007 and made between:
 
(1)
FLEXSYS HOLDING B.V. a private company with limited liability incorporated under
the laws of The Netherlands having its seat in Deventer, The Netherlands and its
registered office at Zutphenseweg 51010, 7418 AJ Deventer, The Netherlands and
registered with the Chamber of Commerce under number 38023104 (the "Company");

 
(2)
THE SUBSIDIARIES of the Company listed in Part I of Schedule 1 (The Original
Parties) as original borrowers (together with the Company the "Original
Borrowers");

 
(3)
THE ENTITIES listed in Part I of Schedule 1 (The Original Parties) as original
guarantors (together with the Company the "Original Guarantors");

 
(4)
KBC BANK N.V. and CITIGROUP GLOBAL MARKETS LIMITED as mandated lead arrangers
(whether acting individually or together the "Arranger");

 
(5)
THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 (The Original
Parties) as lenders (the " Original Lenders");

 
(6)
KBC BANK N.V. as agent of the other Finance Parties (the "Agent"); and

 
(7)
KBC BANK N.V. as security agent and/or as security trustee for the Secured
Parties (the "Security Trustee").

 
IT IS AGREED as follows:
 
SECTION 1
INTERPRETATION
 
 
1.
DEFINITIONS AND INTERPRETATION

 
1.1
Definitions

In this Agreement:
 
"Accession Letter" means a document substantially in the form set out in
Schedule 6 (Form of Accession Letter).
 
"Acquisition Costs" means all non-periodic fees, costs and expenses, stamp,
registration and other Taxes incurred by the Company or any other member of the
Group in connection with the Akzo Nobel Retirement and the Crystex Acquisition.
 
"Account" means any account, subject to Transaction Security, opened or
maintained by a member of the Group with the Security Trustee or any other
person (and any replacement account or subdivision or subaccount of that
account), the debt or debts represented thereby and all Related Rights.
 
"Additional Borrower" means a member of the Group which becomes an Additional
Borrower in accordance with Clause 27 (Changes to the Obligors).
 
"Additional Cost Rate" has the meaning given to it in Schedule 4 (Mandatory Cost
Formulae).
 
 
 
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"Additional Guarantor" means a member of the Group which becomes an Additional
Guarantor in accordance with Clause 27 (Changes to the Obligors).
 
"Additional Obligor" means an Additional Borrower or an Additional Guarantor.
 
"Affiliate" means, in relation to any person, a Subsidiary of that person or a
Holding Company of that person or any other Subsidiary of that Holding Company.
 
"Agent's Spot Rate of Exchange" means the Agent's spot rate of exchange for the
purchase of the relevant currency with the Base Currency in the London foreign
exchange market at or about 11:00 a.m. on a particular day.
 
"Agreed Security Principles" means the security and guarantee principles set out
in Schedule 12 (Agreed Security Principles).
 
"Akzo Nobel Retirement" means the retirement of the entire shareholdings of Akzo
Nobel Chemicals International B.V. (and its affiliates) in the Group.
 
"Amended and Restated Limited Partnership Agreement" means the Limited
Partnership Agreement dated 1 May 1995 entered into by and among Flexsys
International Co., Akzo Nobel Chemicals Inc., Akzo Nobel Properties Inc. and
Monsanto Company, under which Flexsys America L.P. is constituted, as amended
and restated on 26 April 2007 and as further amended or supplemented from time
to time.
 
"Amendment and Restatement Agreement" means the amendment and restatement
agreement to the Intercreditor Agreement and made amongst others, between the
Company, KBC Bank N.V. as Security Trustee, KBC Bank N.V. as agent, Solutia Inc.
and Solutia Europe N.V. as the Parent, the Senior Lenders (as defined in the
Intercreditor Agreement), the Intra-Group Lenders and the Original Obligors
(each as defined in the Intercreditor Agreement) dated on or about 23 May 2007.
 
"Amendment Letter" means the Amendment Letter to the Fee Letter dated 25 April
2007 between the Arranger, the Company and others.
 
"Anti-Terrorism Law" means each of:
 
 
(a)
Executive Order No. 13224 of September 23, 2001 - Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support
Terrorism (the Executive Order);

 
 
(b)
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (commonly known
as the USA Patriot Act);

 
 
(c)
the Money Laundering Control Act of 1986, Public Law 99-570;

 
 
(d)
the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq, the
Trading with the Enemy Act, 50 U.S.C. App. §§ 1 et seq, any Executive Order or
regulation promulgated thereunder and administered by the Office of Foreign
Assets Control ("OFAC") of the U.S. Department of the Treasury; and

 
 
 
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(e)
any similar law enacted in the United States of America subsequent to the date
of this Agreement.

 
"Authorisation" means an authorisation, consent, approval, resolution, licence,
exemption, filing, notarisation or registration.
 
"Availability Period" means:
 
 
(a)
in relation to Facility A the period from and including the date of this
Agreement to and including the day falling 30 days after the date of this
Agreement; and

 
 
(b)
in relation to Facility B, the period from and including the date of this
Agreement to and including the day falling one month prior to the Termination
Date.

 
"Available Commitment" means, in relation to a Facility, a Lender's Commitment
under that Facility minus:
 
 
(a)
the Base Currency Amount of its participation in any outstanding Utilisations
under that Facility; and

 
 
(b)
in relation to any proposed Utilisation, the Base Currency Amount of its
participation in any Utilisations that are due to be made under that Facility on
or before the proposed Utilisation Date,

 
other than, in relation to any proposed Utilisation under Facility B only, that
Lender's participation in any Facility B Utilisations that are due to be repaid
or prepaid on or before the proposed Utilisation Date.
 
"Available Facility" means, in relation to a Facility, the aggregate for the
time being of each Lender's Available Commitment in respect of that Facility.
 
"Base Currency" means dollars.
 
"Base Currency Amount" means, in relation to a Utilisation, the amount specified
in the Utilisation Request delivered by a Borrower for that Utilisation (or, if
the amount requested is not denominated in the Base Currency, that amount
converted into the Base Currency at the Agent's Spot Rate of Exchange on the
date which is three Business Days before the Utilisation Date or, if later, on
the date the Agent receives the Utilisation Request and, in the case of a Letter
of Credit, as adjusted under Clause 6.8 (Revaluation of Letters of Credit))
adjusted to reflect any repayment (other than, in relation to Facility A, a
repayment arising from a change of currency), prepayment, consolidation or
division of the Utilisation.
 
"Belgian Borrower" means a Borrower whose jurisdiction of organisation is
Belgium.
 
"Belgian Guarantor" means a Guarantor whose jurisdiction of organisation is
Belgium.
 
"Belgian Obligor" means Flexsys N.V. and Flexsys Co-ordination Centre N.V. and
any other Belgian Borrower or Belgian Guarantor.
 
 
 
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"Belgian Security Documents" means any Security Documents governed by the laws
of Belgium.
 
"BNM" means the Malaysian Central Bank (also known as Bank Negara Malaysia).
 
"Borrower" means an Original Borrower or an Additional Borrower unless it has
ceased to be a Borrower in accordance with Clause 27 (Changes to the Obligors).
 
"Brazilian Guarantee Agreement" means the guarantee agreement dated 27 April
2007 and made between Flexsys Indústria e Comércio Ltda. as guarantor and KBC
Bank N.V. as Security Trustee and Sergio Caratori Paes de Andrade and Flexsys
Holding B.V. as consent parties, as amended pursuant to the Amended and Restated
Brazilian Guarantee Agreement dated as of 23 May 2007 executed by and between
Flexsys Indústria e Comércio Ltda. as guarantor, KBC Bank N.V. as Security
Trustee and Sergio Caratori Paes de Andrade and Flexsys Holding B.V. as consent
parties and any amendments thereof from time to time.
 
"Brazilian Quota Pledge Agreement" means the quota pledge agreement dated 27
April 2007 and made between the Company and Sergio Caratori Paes de Andrade as
quotaholders, Flexsys Indústria e Comércio Ltda and KBC Bank N.V. as the
Security Trustee, as amended pursuant to the Amended and Restated Brazilian
Quota Pledge Agreement dated as of 23 May 2007 executed by and between the
Company and Sergio Caratori Paes de Andrade as quotaholders, Flexsys Indústria e
Comércio Ltda and KBC Bank N.V. as the Security Trustee and any amendments
thereof from time to time.
 
"Break Costs" means the amount (if any) by which:
 
 
(a)
the interest (excluding the Margin) which a Lender should have received for the
period from the date of receipt of all or any part of its participation in a
Loan or Unpaid Sum to the last day of the current Interest Period in respect of
that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been
paid on the last day of that Interest Period;

 
exceeds:
 
 
(b)
the amount which that Lender would be able to obtain by placing an amount equal
to the principal amount or Unpaid Sum received by it on deposit with a leading
bank in the Relevant Interbank Market for a period starting on the Business Day
following receipt or recovery and ending on the last day of the current Interest
Period.

 
"Business Day" means a day (other than a Saturday or Sunday) on which banks are
open for general business in London, Brussels and New York and:
 
 
(a)
(in relation to any date for payment or purchase of a currency other than euro)
the principal financial centre of the country of that currency; or

 
 
(b)
(in relation to any date for payment or purchase of euro) any TARGET Day.

 
"Charged Portfolio" means the Shares in Flexsys S.p.A and, in relation to these
Shares, all dividends, interest and other monies payable in respect of these
Shares and all rights
 
 
 
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to receive any economic benefit and proceeds in respect of or derived from these
Shares (either by way of transfer, redemption, bonus, preference, substitution,
pre-emption, conversion, winding-up, merger and/or de-merger or otherwise).
 
"Charged Property" means all the assets of the Obligors which from time to time
are, or are expressed to be, the subject of the Transaction Security.
 
"Code" means, at any date, the United States Internal Revenue Code of 1986 and
the regulations promulgated and the judicial and administrative decisions
rendered under it, all as the same may be in effect at such date.
 
"Collateral Rights" means all rights, powers and remedies of the Security
Trustee provided by or pursuant to a Security Document or by law.
 
"Commitment" means a Facility A Commitment or Facility B Commitment as the
context may require.
 
"Compliance Certificate" means a certificate substantially in the form set out
in Schedule 8 (Form of Compliance Certificate).
 
"Crystex Acquisition" means the acquisition of the Kashima Crystex operation
from Akzo Nobel Chemicals International B.V.
 
"Declared Default" has the meaning given to it in Schedule 12 (Agreed Security
Principles).
 
"Default" means an Event of Default or any event or circumstance specified in
Clause 25 (Events of Default) which would (with the expiry of a grace period,
the giving of notice, the making of any determination under the Finance
Documents or any combination of any of the foregoing) be an Event of Default.
 
"Delegate" means any delegate, agent, attorney or co-trustee appointed by the
Security Trustee.
 
"Disruption Event" means either or both of:
 
 
(c)
a material disruption to those payment or communications systems or to those
financial markets which are, in each case, required to operate in order for
payments to be made in connection with the Facilities (or otherwise in order for
the transactions contemplated by the Finance Documents to be carried out) which
disruption is not caused by, and is beyond the control of, any of the Parties;
or

 
 
(d)
the occurrence of any other event which results in a disruption (of a technical
or systems-related nature) to the treasury or payments operations of a Party
preventing that, or any other Party:

 
 
(i)
from performing its payment obligations under the Finance Documents; or

 
 
(ii)
from communicating with other Parties in accordance with the terms of the
Finance Documents,

 
 
 
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(and which (in either such case)) is not caused by, and is beyond the control
of, the Party whose operations are disrupted.

 
"Dutch Civil Code" means the Dutch Civil Code (Burgerlijk Wetboek).
 
"Dutch Obligor" means an Obligor incorporated in The Netherlands.
 
"Dutch FSA" means the Financial Supervision Act (Wet op het financieel toezicht)
including any and all subordinate decrees and regulations issued pursuant
thereto.
 
"Employee Plan" means an employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which a U.S. Obligor
or any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
 
"Environmental Claim" means any claim, proceeding or investigation by any person
in respect of any Environmental Law.
 
"Environmental Law" means any applicable law in any jurisdiction in which any
member of the Group conducts business which relates to the pollution or
protection of the environment or harm to or the protection of human health or
the health of animals or plants.
 
"Environmental Permits" means any permit, licence, consent, approval and other
authorisation and the filing of any notification, report or assessment required
under any Environmental Law for the operation of the business of any member of
the Group conducted on or from the properties owned or used by the relevant
member of the Group.
 
"ERISA" means, at any date, the United States Employee Retirement Income
Security Act of 1974 and the regulations promulgated and ratings issued
thereunder, all as the same may be in effect at such date.
 
"ERISA Affiliate" means any person that for purposes of Title I and Title IV of
ERISA and Section 412 of the Code would be deemed at any relevant time to be a
single employer with an Obligor, pursuant to Section 414(b), (c), (m) or (o) of
the Code or Section 4001 of ERISA.
 
"ERISA Event" means
 
 
(a)
any reportable event, as defined in Section 4043 of ERISA, with respect to an
Employee Plan, as to which PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified of such event;

 
 
(b)
the filing of a notice of intent to terminate any Employee Plan, if such
termination would require material additional contributions in order to be
considered a standard termination within the meaning of Section 4041(b) of
ERISA, the filing under Section 4041(c) of ERISA of a notice of intent to
terminate any Employee Plan or the termination of any Employee Plan under
Section 4041(c) of ERISA;

 
 
 
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(c)
the institution of proceedings under Section 4042 of ERISA by the PBGC for the
termination of, or the appointment of a trustee to administer, any Employee
Plan;

 
 
(d)
the failure to make a required contribution to any Employee Plan that would
result in the imposition of an encumbrance under Section 412 of the Code or
Section 302 of ERISA or the filing of any request for a minimum funding waiver
under Section 412 of the Code with respect to any Employee Plan;

 
 
(e)
an engagement in a non-exempt prohibited transaction within the meaning of
Section 4975 of the Code or Section 406 of ERISA; and

 
 
(f)
an Obligor or an ERISA Affiliate incurring any liability under Title IV of ERISA
with respect to any Employee Plan (other than premiums due and not delinquent
under Section 4007 of ERISA).

 
"EURIBOR" means, in relation to any Loan in euro:
 
 
(a)
the applicable Screen Rate; or

 
 
(b)
(if no Screen Rate is available for the Interest Period of that Loan) the
arithmetic mean of the rates (rounded upwards to four decimal places) as
supplied to the Agent at its request quoted by the Reference Banks to leading
banks in the European interbank market;

 
as of the Specified Time on the Quotation Day for the offering of deposits in
euro for a period comparable to the Interest Period of the relevant Loan.
 
"Event of Default" means any event or circumstance specified as such in
Clause 25 (Events of Default).
 
"Existing Facility" means the US$200,000,000 Multicurrency Term and Revolving
Credit Facility dated 14 February 2003 between, inter alia, the Company, the
Original Borrowers, the Original Guarantors, Commerzbank Aktiengesellschaft, KBC
Bank N.V. and others (as amended).
 
"Extension Letter" means the Extension Letter to the Mandate Letter dated
16 April 2007 between the Arranger, the Company and others.
 
"Facility" means Facility A or Facility B as the context may require.
 
"Facility A" means the term loan facility made available under this Agreement as
described in Clause 2 (The Facilities).
 
"Facility A Commitment" means:
 
 
(a)
in relation to an Original Lender, the amount in the Base Currency set opposite
its name under the heading "Facility A Commitment" in Part II of Schedule 1 (The
Original Parties) and the amount of any other Facility A Commitment transferred
to it under this Agreement; and

 
 
 
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(b)
in relation to any other Lender, the amount in the Base Currency of any Facility
A Commitment transferred to it under this Agreement,

 
to the extent not cancelled, reduced or transferred by it under this Agreement.
 
"Facility A Loan" means a loan made or to be made under Facility A or the
principal amount outstanding for the time being of that loan.
 
"Facility A Repayment Date" means each of the dates specified in Clause 9.1
(Repayment of Facility A Loans) as Repayment Dates, but if any such date is not
a Business Day, then that Repayment Date shall be deemed to be the immediately
succeeding Business Day.
 
"Facility B" means the revolving credit facility made available under this
Agreement as described in Clause 2 (The Facilities).
 
"Facility B Commitment" means:
 
 
(a)
in relation to an Original Lender, the amount in the Base Currency set opposite
its name under the heading "Facility B Commitment" in Part II of Schedule 1 (The
Original Parties) and the amount of any other Facility B Commitment transferred
to it under this Agreement; and

 
 
(b)
in relation to any other Lender, the amount in the Base Currency of any Facility
B Commitment transferred to it under this Agreement,

 
to the extent not cancelled, reduced or transferred by it under this Agreement.
 
"Facility B Loan" means a loan made or to be made under Facility B or the
principal amount outstanding for the time being of that loan.
 
"Facility B Utilisation" means a Facility B Loan or a Letter of Credit.
 
"Facility Office" means the office or offices notified by a Lender to the Agent
in writing on or before the date it becomes a Lender (or, following that date,
by not less than five Business Days' written notice) as the office or offices
through which it will perform its obligations under this Agreement.
 
"Fee Letter" means any letter or letters dated on or about 28 February 2007
between the Arranger and the Company (or the Agent and the Company or the
Security Trustee and the Company) setting out any of the fees referred to in
Clause 14 (Fees), as amended by the Amendment Letter.
 
"FIC" means the Foreign Investment Committee of the Economic Planning Unit of
the Malaysian Prime Minister's Department.
 
"Financial Close" means the date on which consideration is payable pursuant to
the Akzo Nobel Retirement and the Crystex Acquisition and completion under such
retirement and acquisition has occurred.
 
"Finance Document" means this Agreement, the Syndication and Amendment and
Restatement Agreement, the Mandate Letter (as amended by the Extension Letter),
the
 
 
 
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Security Documents, the Intercreditor Agreement, the Amendment and Restatement
Agreement, any Fee Letter (as amended by the Amendment Letter), any Accession
Letter, any Resignation Letter, any Transfer Certificate and any other document
designated as such by the Agent and the Company.
 
"Finance Party" means the Agent, the Arranger, the Security Trustee or a Lender.
 
"Financial Indebtedness" means any indebtedness for or in respect of:
 
 
(a)
moneys borrowed;

 
 
(b)
any amount raised by acceptance under any acceptance credit facility or
dematerialised equivalent;

 
 
(c)
any amount raised pursuant to any note purchase facility or the issue of bonds,
notes, debentures, loan stock or any similar instrument;

 
 
(d)
the amount of any liability in respect of any lease or hire purchase contract
which would, in accordance with GAAP, be treated as a finance or capital lease;

 
 
(e)
receivables sold or discounted (other than any receivables to the extent they
are sold on a non-recourse basis);

 
 
(f)
any amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a borrowing;

 
 
(g)
any derivative transaction entered into in connection with protection against or
benefit from fluctuation in any rate or price (and, when calculating the value
of any derivative transaction, only the marked to market value shall be taken
into account);

 
 
(h)
any counter-indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument issued by a bank
or financial institution;

 
 
(i)
any amount raised by the issue of redeemable shares;

 
 
(j)
any amount of any liability under an advance or deferred purchase agreement if
one of the primary reasons behind the entry into this agreement is to raise
finance; and

 
 
(k)
(without double counting) the amount of any liability in respect of any
guarantee or indemnity for any of the items referred to in paragraphs (a) to (j)
above.

 
"Flexsys America Co." means Flexsys America Co., a corporation incorporated
under the laws of the State of Delaware, United States of America, with its
principal office at 260 Springside Drive, Akron, Ohio 44333, United States of
America.
 
"Flexsys Rubber Chemicals Retirement Benefits Scheme" means the retirement
benefits scheme of Flexsys Rubber Chemicals Limited formed on 1 April 1998.
 
 
 
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"French Security Documents" means any Security Documents governed by the laws of
France.
 
"GAAP" means generally accepted accounting principles in the United States of
America.
 
"German Borrower" means a Borrower whose jurisdiction of organisation is
Germany.
 
"German Debt Pushdown" means the corporate reorganisation and debt push down
steps taken together to be carried out in accordance with Clause 24.34 (German
Debt Pushdown).
 
"German Guarantor" means a Guarantor whose jurisdiction of organisation is
Germany.
 
"German Obligor" means Flexsys Verwaltungs-und Beteiligungs GmbH and Flexsys
Verkauf GmbH and any other German Borrower or German Guarantor.
 
"German Security Documents" means any Security Documents governed by the laws of
Germany.
 
"Group" means, at any time, the Company and its then Subsidiaries, Flexsys
America L.P. and Flexsys Rubber Chemicals Limited.
 
"Group Structure Chart" means the group structure chart showing:
 
 
(a)
all members of the Group, including current name and company registration
number, its jurisdiction of incorporation and/or establishment and a list of
shareholders;

 
 
(b)
any person in which any member of the Group holds shares in its issued share
capital or equivalent ownership interest of such person.

 
"Guarantor" means an Original Guarantor or an Additional Guarantor, unless it
has ceased to be a Guarantor in accordance with Clause 27 (Changes to the
Obligors).
 
"Holding Company" means, in relation to a company or corporation, any other
company or corporation in respect of which it is a Subsidiary.
 
"Information Memorandum" means the document in the form approved by the Company
concerning the Group which, at the Company's request and on its behalf, was
prepared in relation to this transaction and distributed by the Arranger to
selected financial institutions before the date of this Agreement.
 
"Intellectual Property" means any patents, trademarks, service marks, designs,
business names, copyrights, design rights, moral rights, inventions,
confidential information, knowhow and other intellectual property rights and
interests, whether registered or unregistered, and the benefit of all
applications and rights to use such assets of each Obligor.
 
"Intercreditor Agreement" means the agreement dated 27 April 2007 and made
amongst others, between the Company, KBC Bank N.V. as Security Trustee, KBC Bank
 
 
 
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N.V. as agent, Solutia Inc. and Solutia Europe N.V. as the Parent, the Senior
Lenders (as defined in the Intercreditor Agreement), the Intra-Group Lenders and
the Original Obligors (each as defined in the Intercreditor Agreement) as
amended by the Amendment and Restatement Agreement.
 
"Interest Period" means, in relation to a Loan, each period determined in
accordance with Clause 12 (Interest Periods) and, in relation to an Unpaid Sum,
each period determined in accordance with Clause 11.3 (Default interest).
 
"IRS" means the United States Internal Revenue Service or any successor thereto.
 
"Issuing Bank" means, in respect of a Letter of Credit, KBC Bank N.V. or any
other Lender (or its affiliate) that has agreed to act as Issuing Bank in
respect of that Letter of Credit.
 
"Italian Civil Code" means the Italian civil code, enacted by Royal Decree No.
262 of 16 March 1942, as subsequently amended and supplemented.
 
"Italian Security Documents" means any Security Documents governed by the laws
of Italy.
 
"Italian Share Pledge" means the share pledge agreement dated on or about 27
April 2007 and made by the Company as pledgor and the KBC Bank N.V. as secured
creditor and common representative of the other secured creditors.
 
"Japanese Security Documents" means any Security Documents governed by the laws
of Japan.
 
"Legal Opinions" means the legal opinions delivered to the Agent pursuant to
Schedule 2 (Conditions Precedent and Conditions Subsequent).
 
"Lender" means:
 
 
(a)
any Original Lender; and

 
 
(b)
any bank, financial institution, trust, fund or other entity which has become a
Party in accordance with Clause 26 (Changes to the Lenders),

 
which in each case has not ceased to be a Party in accordance with the terms of
this Agreement.
 
"Letter of Credit" means a letter of credit, substantially in the form set out
in Schedule 10 (Form of Letter of Credit) or in any other form requested by a
Borrower and agreed by the Agent (with the prior consent of the Majority
Lenders) and the Issuing Bank.
 
"LIBOR" means, in relation to any Loan:
 
 
(a)
the applicable Screen Rate; or

 
 
(b)
(if no Screen Rate is available for the currency or Interest Period of that
Loan) the arithmetic mean of the rates (rounded upwards to four decimal places)
as

 
 
 
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supplied to the Agent at its request quoted by the Reference Banks to leading
banks in the London interbank market,

 
as of the Specified Time on the Quotation Day for the offering of deposits in
the currency of that Loan and for a period comparable to the Interest Period for
that Loan.
 
"LMA" means the Loan Market Association.
 
"Loan" means a Facility A Loan or a Facility B Loan as the context may require.
 
"Long Term Incentive Compensation" means the management incentive plan covering
the period 2004-2006; successful achievement of the targets set out in the plan
will result in a payout of approximately US$50,000,000, which amount is
scheduled to be paid in early 2007.
 
"Majority Lenders" means:
 
 
(a)
if there are no Utilisations then outstanding, a Lender or Lenders whose
Commitments aggregate more than 66 2/3% of the Total Commitments (or, if the
Total Commitments have been reduced to zero, aggregated more than 66 2/3% of the
Total Commitments immediately prior to the reduction); or

 
 
(b)
at any other time, a Lender or Lenders whose participations in the Utilisations
then outstanding aggregate more than 66 2/3% of all the Utilisations then
outstanding.

 
"Mandate Letter" means the letter dated 28 February 2007 between the Arranger,
the Company and others, as amended by the Extension Letter.
 
"Mandatory Cost" means the percentage rate per annum calculated by the Agent in
accordance with Schedule 4 (Mandatory Cost Formulae).
 
"Margin" means:
 
 
(a)
in relation to Facility A, 1.25% per annum until the date falling six months
from the first Utilisation Date and thereafter the Margin in relation to
Facility A will be adjusted on the basis of the most recently delivered Combined
Financial Statements of the Group (which must be audited if such statements
relate to the Group's financial year) by reference to the ratio of Combined
Senior Total Financial Debt as at the last day of each Relevant Period to EBITDA
for such Relevant Period in accordance with the table set out below:

 
Ratio
Margin % per annum
 
≥2.5
1.5
 
<2.5 ≥2.0
1.25
 
<2.0 ≥1.5
1.00
 
<1.5 ≥1.0
0.80
 
<1.0
0.65
 

 
 
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provided that whilst a Default is continuing the Margin shall be the highest
Margin specified above.
 
 
(b)
in relation to Facility B, 1.00% per annum until the date falling six months
from the date of this Agreement and thereafter the Margin in relation to
Facility B will be adjusted on the basis of the most recently delivered Combined
Financial Statements of the Group (which must be audited if such statements
relate to the Group's financial year) by reference to the ratio of Combined
Senior Total Financial Debt as at the last day of each Relevant Period to EBITDA
for such Relevant Period, in accordance with the table set out below:

 
Ratio
Margin % per annum
 
≥2.5
1.25
 
<2.5 ≥2.0
1.00
 
<2.0 ≥1.5
0.80
 
<1.5 ≥1.0
0.60
 
<1.0
0.50
 

 
 
provided that whilst a Default is continuing the Margin shall be the highest
Margin specified above.
 
Any adjustment to the Margin shall take effect on the date falling five Business
Days after the date of receipt by the Agent of the relevant Compliance
Certificate.
 
For the purposes of determining the Margin, "Combined Senior Total Financial
Debt", "EBITDA", "Combined Financial Statements of the Group" and "Relevant
Period" shall be determined in accordance with Clause 23.1 (Financial
definitions).
 
"Margin Stock" means margin stock or "margin security" within the meaning of
Regulations T, U and X.
 
"Material Adverse Effect" means a material adverse effect on:
 
 
(a)
the business, property or financial condition of the Group taken as a whole;

 
 
(b)
the ability of an Obligor to perform its obligations under the Finance
Documents; or

 
 
(c)
the validity or enforceability of the Finance Documents or the rights or
remedies of any Finance Party under the Finance Documents.

 
 
 
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For the avoidance of doubt, the continuation of Solutia Inc.'s proceedings under
Title 11 of the United States of America Code entitled Bankruptcy shall not
constitute a Material Adverse Effect provided that no member of the Group
becomes subject to such proceedings or those of an affiliated debtor of Solutia
Inc.

 
"Material Group Member" means a member of the Group (other than the Company)
which:
 
 
(a)
has EBITDA representing 5 per cent. or more of the Combined EBITDA as defined in
Clause 23 (Financial Covenants); and/or

 
 
(b)
has assets representing 5 per cent. or more of the aggregate assets of the
Group; and/or

 
 
(c)
has revenue representing 5 per cent. or more of the aggregate revenue of the
Group,

 
in each case calculated on a combined basis.
 
Compliance with the conditions set out in paragraphs (a), (b) and (c) shall be
determined by reference to the most recent Compliance Certificate supplied by
the Company and/or the latest audited financial statements of that member of the
Group and the latest audited Combined Financial Statements of the Group.
 
A report by the auditors of the Company that a member of the Group is or is not
a Material Group Member shall, in the absence of manifest error, be conclusive
and binding on all Parties.
 
"Month" means a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month, except that:
 
 
(a)
(subject to paragraph (c) below) if the numerically corresponding day is not a
Business Day, that period shall end on the next Business Day in that calendar
month in which that period is to end if there is one, or if there is not, on the
immediately preceding Business Day;

 
 
(b)
if there is no numerically corresponding day in the calendar month in which that
period is to end, that period shall end on the last Business Day in that
calendar month; and

 
 
(c)
if an Interest Period begins on the last Business Day of a calendar month, that
Interest Period shall end on the last Business Day in the calendar month in
which that Interest Period is to end.

 
The above rules will only apply to the last Month of any period.
 
"Multiemployer Plan" means a "multiemployer plan" (as defined in Section (3)(37)
of ERISA) contributed to for any employees of a U.S. Obligor or any ERISA
Affiliate.
 
"New German Hold Co" means the new company to be established after the date of
this Agreement by the Company and whose jurisdiction of organisation will be
Germany.
 
 
 
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"Obligors" means a Borrower or a Guarantor.
 
"Optional Currency" means a currency (other than the Base Currency) which
complies with the conditions set out in Clause 4.3 (Conditions relating to
Optional Currencies).
 
"Original Financial Statements" means:
 
 
(a)
in relation to the Company, the audited Combined Financial Statements of the
Group for the financial year ended 2006 prepared under GAAP; and

 
 
(b)
in relation to each Original Obligor other than the Company, its unaudited
financial statements for its financial year ended 2006.

 
"Original Obligor" means an Original Borrower or an Original Guarantor.
 
"Parallel Obligations" has the meaning as that which is contained in the German
Security Documents.
 
"Participating Member State" means any member state of the European Communities
that adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Community relating to Economic and Monetary Union.
 
"Party" means a party to this Agreement.
 
"PBGC" means the U.S. Pension Benefit Guaranty Corporation, or any entity
succeeding to all or any of its functions under ERISA.
 
"Pension Fund Obligations" means any amount that the Buyer Entities (as defined
in the Share Purchase Agreement) are required to contribute to the Flexsys UK
pension plan within ten days after closing pursuant to the Share Purchase
Agreement.
 
"Perfection Requirements" means the making of the appropriate registrations,
filings or notifications of the Security Documents.
 
"Quotation Day" means, in relation to any period for which an interest rate is
to be determined:
 
 
(a)
(if the currency is domestic sterling) the first day of that period;

 
 
(b)
(if the currency is euro) two TARGET Days before the first day of that period;
or

 
 
(c)
(for any other currency) two Business Days before the first day of that period,

 
unless market practice differs in the Relevant Interbank Market for a currency,
in which case the Quotation Day for that currency will be determined by the
Agent in accordance with market practice in the Relevant Interbank Market (and
if quotations would normally be given by leading banks in the Relevant Interbank
Market on more than one day, the Quotation Day will be the last of those days).
 
 
 
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"Real Property" means:
 
 
(a)
any freehold, leasehold or immovable property (including the freehold and
leasehold property in the Relevant Jurisdictions specified in the relevant
Security Document); and

 
 
(b)
any buildings, fixtures, fittings, fixed plant or machinery from time to time
situated on or forming part of that freehold or leasehold property,

 
and all Related Rights.
 
"Receiver" means a receiver or receiver and manager or administrative receiver
of the whole or any part of the Charged Property.
 
"Reference Banks" means, in relation to LIBOR and Mandatory Cost the principal
London offices of the Agent and Citibank N.A. and, in relation to EURIBOR, the
principal office in Brussels or London of the Agent and Citibank N.A. or such
other banks as may be appointed by the Agent in consultation with the Company.
 
"Regulations T, U and X" means, respectively, Regulations T, U and X of the
Board of Governors of the Federal Reserve System of the United States (or any
successor) as now and from time to time in effect from the date of this
Agreement.
 
"Related Rights" means, in relation to any asset:
 
 
(a)
the proceeds of sale of any part of that asset;

 
 
(b)
all rights under any licence, agreement for sale or agreement for lease in
respect of that asset;

 
 
(c)
all rights, powers, benefits, claims, contracts, warranties, remedies, security,
guarantees, indemnities or covenants for title in respect of that asset; and

 
 
(d)
any monies and proceeds paid or payable in respect of that asset.

 
"Relevant Interbank Market" means in relation to euro, the European interbank
market and, in relation to any other currency, the London interbank market.
 
"Relevant Jurisdiction" means:
 
 
(a)
the jurisdiction of incorporation of each member of the Group;

 
 
(b)
the jurisdiction where any asset subject to or intended to be subject to the
Transaction Security is situated;

 
 
(c)
the jurisdiction whose laws govern the perfection of any of the Security
Documents; and

 
 
(d)
the jurisdiction where any member of the Group is conducting its business.

 
"Repayment Instalment" means each instalment for repayment of the Facility A
Loans referred to in Clause 9.1 (Repayment of Facility A Loans).
 
 
 
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"Repeating Representations" means each of the representations set out in Clauses
21.1 (Status) to 21.6 (Governing law and enforcement), Clause 21.8 (No default),
paragraph (e) of Clause 21.9 (No misleading information), Clause 21.11 (Pari
passu ranking), Clause 21.20 (Ranking) to Clause 21.24 (Legal and Beneficial
Owner), Clause 21.30 (Centre of main interests and establishments), Clause 21.33
(Pensions) and 21.42 (No cluster bombs or anti-personnel mines) and, for each
Additional Obligor on the date of accession to the Finance Documents, also means
each of the representations set out in Clause 21.7 (No filing taxes), Clause
21.10 (Financial statements), Clause 21.12 (No proceedings pending or
threatened), Clauses 21.16 (Deduction of Tax) to 21.19 (Security), Clause 21.25
(Shares), Clause 21.32 (ERISA Plans) and Clauses 21.35 (Federal Reserve
Regulations) to 21.37 (Anti-Terrorism Laws).
 
"Resignation Letter" means a letter substantially in the form set out in
Schedule 7 (Form of Resignation Letter).
 
"Reservations" means any general principles of law limiting the obligations of
any Obligor which are specifically referred to in any legal opinion delivered
pursuant to Clause 4 (Conditions of Utilisation) or Clause 27 (Changes to the
Obligors).
 
"Restricted Party" means any person listed:
 
 
(a)
in the Annex to the Executive Order;

 
 
(b)
on the "Specially Designated Nationals and Blocked Persons" list maintained by
the OFAC; or

 
 
(c)
in any successor list to either of the foregoing.

 
"Rollover Loan" means one or more Facility B Loans:
 
 
(a)
made or to be made on the same day that (i) a maturing Facility B Loan is due to
be repaid or (ii) a Borrower is obliged to pay to the Agent for the Issuing Bank
the amount of any claim under a Letter of Credit;

 
 
(b)
the aggregate amount of which is equal to or less than (i) the maturing Facility
B Loan or (ii) the amount of the claim under the Letter of Credit;

 
 
(c)
in the same currency as (i) the maturing Facility B Loan (unless it arose as a
result of the operation of Clause 8.2 (Unavailability of a currency) or (ii) the
claim under the Letter of Credit; and

 
 
(d)
made or to be made to the same Borrower for the purpose of (i) refinancing a
maturing Facility B Loan or (ii) satisfying the obligations of the Borrower to
pay the amount of a claim under the Letter of Credit to the Agent for the
Issuing Bank.

 
"Screen Rate" means:
 
 
(a)
in relation to LIBOR, the British Bankers' Association Interest Settlement Rate
for the relevant currency and period; and

 
 
 
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(b)
in relation to EURIBOR, the percentage rate per annum determined by the Banking
Federation of the European Union for the relevant period,

 
displayed on the appropriate page of the Reuters screen. If the agreed page is
replaced or service ceases to be available, the Agent may specify another page
or service displaying the appropriate rate after consultation with the Company
and the Lenders.
 
"SEC" means the United States Securities and Exchange Commission or any
successor thereto.
 
"Secured Contracts" has the same meaning as that which is contained in the
Italian Share Pledge.
 
"Secured Obligations" means all obligations at any time due, owing or incurred
by any Obligor to any Secured Party under the Finance Documents, whether present
or future, actual or contingent (and whether incurred solely or jointly and
whether as principal or surety or in some other capacity).
 
"Secured Parties" means the Security Trustee, any Receiver or Delegate, the
Agent, and each Lender from time to time party to this Agreement.
 
"Security" means a mortgage, charge, pledge, lien or other security interest
securing any obligation of any person or any other agreement or arrangement
having a similar effect.
 
"Security Documents" means each of the documents listed as being a Security
Document in paragraph 2(a) of Part I of Schedule 2 (Conditions Precedent and
Conditions Subsequent), any document required to be delivered to the Agent under
paragraph 2 of Part II of Schedule 2 (Conditions Precedent and Conditions
Subsequent) and any document required to be delivered to the Agent under
paragraph 15 of Part III of Schedule 2 (Conditions Precedent and Conditions
Subsequent) as may be amended or substituted from time to time, together with
any other document entered into by any Obligor creating or expressed to create
any Security over all or any part of its assets in respect of the obligations of
any of the Obligors under any of the Finance Documents.
 
"Selection Notice" means a notice substantially in the form set out in Part II
of Schedule 3 (Requests) given in accordance with Clause 12 (Interest Periods)
in relation to Facility A.
 
"Shareholders" means Solutia Inc. and Solutia Europe N.V..
 
"Shares" means the shares or quotas subject to the Transaction Security.
 
"Share Purchase Agreement" means the share purchase agreement in relation to the
Akzo Nobel Retirement between Akzo Nobel Chemicals International B.V., Akzo
Nobel Chemicals Inc., Akzo Nobel N.V., Flexsys Holding B.V., Flexsys America LP,
Flexsys Rubber Chemicals Ltd and Solutia Inc. dated as of 28 March 2007.
 
"Solutia Inc." means Solutia Inc, a corporation incorporated under the laws of
the State of Delaware, United States of America, with its principal office at
575 Maryville Center Drive, St. Louis, Missouri 63166, United States of America.
 
 
 
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"Sources and Uses Table" means the table set out in Schedule 13 (Sources and
Uses Table).
 
"Specified Time" means a time determined in accordance with Schedule 9
(Timetables).
 
"Subordinated Loan" means the non-amortising loans of a minimum aggregate amount
of US$100,000,000 and a maximum aggregate amount of US$175,000,000 to be
provided by Solutia Inc. (or any of its affiliates) to one or more members of
the Group for a term of six years at a market rate, available for corporate
purposes including (but not limited to) the Akzo Nobel Retirement and which
shall be subordinated to the Facilities pursuant to the terms of the
Intercreditor Agreement and on terms and conditions (including (but not limited
to) the determination of the interest rate) satisfactory to the Arranger.
 
"Subordinated Loan Agreement" means the subordinated loan agreements dated 26
April 2007 between Solutia Inc and one or more members of the Group.
 
"Subsidiary" means in relation to any company or corporation, a company or
corporation:
 
 
(a)
which is controlled, directly or indirectly, by the first mentioned company or
corporation;

 
 
(b)
more than half the issued share capital of which is beneficially owned, directly
or indirectly by the first mentioned company or corporation; or

 
 
(c)
which is a Subsidiary of another Subsidiary of the first mentioned company or
corporation,

 
and for this purpose, a company or corporation shall be treated as being
controlled by another if that other company or corporation is able to direct its
affairs and/or to control the composition of its board of directors or
equivalent body.
 
"Syndication and Amendment and Restatement Agreement" means the syndication and
amendment and restatement agreement to this Agreement made amongst others,
between the Company, the Borrowers and the Guarantors (each as defined in the
Syndication and Amendment and Restatement Agreement), KBC Bank N.V. as Agent,
KBC Bank N.V. as Security Trustee, the Existing Lenders and the New Lenders
(each as defined in the Syndication and Amendment and Restatement Agreement)
dated on or about 23 May 2007.
 
"TARGET" means Trans-European Automated Real-time Gross Settlement Express
Transfer payment system.
 
"TARGET Day" means any day on which TARGET is open for the settlement of
payments in euro.
 
"Tax" means any tax, levy, impost, duty or other charge or withholding of a
similar nature (including any penalty or interest payable in connection with any
failure to pay or any delay in paying any of the same).
 
 
 
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"Termination Date" means:
 
 
(a)
in relation to Facility A the fifth anniversary of the date of this Agreement;
and

 
 
(b)
in relation to Facility B the fifth anniversary of the date of this Agreement.

 
"Total Commitments" means the aggregate of the Total Facility A Commitments and
the Total Facility B Commitments, being US$225,000,000 at the date of this
Agreement.
 
"Total Facility A Commitments" means the aggregate of the Facility A
Commitments, being US$75,000,000 at the date of this Agreement.
 
"Total Facility B Commitments" means the aggregate of the Facility B
Commitments, being US$150,000,000 at the date of this Agreement.
 
"Transaction Security" means the Security created or expressed to be created
pursuant to the Security Documents.
 
"Transfer Certificate" means a certificate substantially in one of the forms set
out in Schedule 5 (Form of Transfer Certificate) or any other form agreed
between the Agent and the Company.
 
"Transfer Date" means, in relation to a transfer, the later of:
 
 
(a)
the proposed Transfer Date specified in the Transfer Certificate; and

 
 
(b)
the date on which the Agent executes the Transfer Certificate.

 
"UK Borrower" means a Borrower whose jurisdiction or organisation is England and
Wales.
 
"UK Guarantor" means a Guarantor whose jurisdiction or organisation is England
and Wales.
 
"UK Obligor" means Flexsys Rubber Chemicals Limited and any other UK Borrower or
UK Guarantor.
 
"Unfunded Pension Liability" means the excess of an Employee Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
plan's assets, determined in accordance with the assumptions used for funding
the Employee Plan pursuant to Section 412 of the Code for the applicable plan
year.
 
"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the
Finance Documents.
 
"U.S." and "United States" means the United States of America, its territories,
possessions and other areas subject to the jurisdiction of the United States of
America.
 
"U.S. Borrower" means a Borrower whose jurisdiction of organisation is a state
of the United States of America or the District of Columbia.
 
"U.S. Guarantor" means a Guarantor whose jurisdiction of organisation is a state
of the United States of America or the District of Columbia.
 
 
 
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"U.S. Obligor" means Flexsys America L.P. and any other U.S. Borrower or U.S.
Guarantor which is constituted under the laws of any state of the United States
of America or the District of Columbia.
 
"U.S. Tax" means any federal, state, local income, gross receipts, license,
premium, windfall profits, customs duties, capital stock, franchise, profits,
withholding, social security (or similar), real property, personal property,
sales, use, registration, value added, alternative or add-on minimum, estimated
or other tax of any kind whatsoever, imposed by the United States, including any
interest, penalty or addition thereto, whether disputed or not.
 
"Utilisation" means a Loan or a Letter of Credit.
 
"Utilisation Date" means the date on which a Utilisation is made.
 
"Utilisation Request" means a notice substantially in the form set out in Part I
of Schedule 3 (Requests).
 
"VAT" means value added tax as provided for in the Value Added Tax Act 1994 and
any other tax of a similar nature.
 
1.2
Construction

 
(a)
Unless a contrary indication appears any reference in this Agreement to:

 
 
(i)
the "Agent", the "Arranger", the "Security Trustee", any "Finance Party", any
"Secured Party", any "Lender", any "Obligor" or any "Party" shall be construed
so as to include its successors in title, permitted assigns and permitted
transferees and, in the case of the Security Trustee, any person for the time
being appointed as trustee or trustees in accordance with this Agreement;

 
 
(ii)
"assets" includes present and future properties, revenues and rights of every
description;

 
 
(iii)
a "Finance Document" or any other agreement or instrument is a reference to that
Finance Document or other agreement or instrument as amended, novated,
supplemented, extended, replaced or restated;

 
 
(iv)
"indebtedness" includes any obligation (whether incurred as principal or as
surety) for the payment or repayment of money, whether present or future, actual
or contingent;

 
 
(v)
a "person" includes any individual, firm, company, corporation, government,
state or agency of a state or any association, trust, joint venture, consortium
or partnership (whether or not having separate legal personality);

 
 
(vi)
a "regulation" includes any regulation, rule, official directive, request or
guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation;

 
 
 
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(vii)
a provision of law is a reference to that provision as amended or re-enacted;
and

 
 
(viii)
a time of day is a reference to London time.

 
 
(b)
Section, Clause and Schedule headings are for ease of reference only.

 
 
(c)
Unless a contrary indication appears, a term used in any other Finance Document
or in any notice given under or in connection with any Finance Document has the
same meaning in that Finance Document or notice as in this Agreement.

 
 
(d)
A Default (other than an Event of Default) is "continuing" if it has not been
remedied or waived and an Event of Default is "continuing" if it has not been
waived.

 
1.3
Currency Symbols and Definitions

"US$" and "dollars" denote lawful currency of the United States of America, "£"
and "sterling" denotes lawful currency of the United Kingdom, "EUR" and "euro"
means the single currency unit of the Participating Member States and "¥" and
"yen" denotes lawful currency of Japan.
 
1.4
Dutch Terms

In this Agreement, where it relates to a Dutch entity, a reference to:
 
 
(a)
a necessary action to authorise, where applicable, includes without limitation:

 
 
(i)
any action required to comply with the Dutch Works Council Act (Wet op de
ondernemingsraden); and

 
 
(ii)
obtaining unconditional positive advice (advies) from each competent works
council;

 
 
(b)
a winding-up, administration or dissolution includes a Dutch entity being:

 
 
(i)
declared bankrupt (failliet verklaard);

 
 
(ii)
dissolved (ontbonden);

 
 
(c)
a moratorium includes surseance van betaling and granted a moratorium includes
surseance verleend;

 
 
(d)
a trustee in bankruptcy includes a curator,

 
 
(e)
an administrator includes a bewindvoerder;

 
 
(f)
a receiver or an administrative  receiver does not include a curator or
bewindvoerder, and

 
 
(g)
an attachment includes a beslag.

 
 
 
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1.5
Third party rights
 
A person who is not a Party has no right under the Contracts (Rights of Third
Parties) Act 1999 to enforce or to enjoy the benefit of any term of this
Agreement.

 

 
SECTION 2
THE FACILITIES
 
 
2.
THE FACILITIES

 
2.1
The Facilities
Subject to the terms of this Agreement, the Lenders make available to the
Borrowers:

 
 
(a)
a multicurrency term loan facility in an aggregate amount equal to the Total
Facility A Commitments; and

 
 
(b)
a multicurrency revolving credit facility in an aggregate amount equal to the
Total Facility B Commitments.

 
2.2
Finance Parties' rights and obligations

 
(a)
The obligations of each Finance Party under the Finance Documents are
several.  Failure by a Finance Party to perform its obligations under the
Finance Documents does not affect the obligations of any other Party under the
Finance Documents.  No Finance Party is responsible for the obligations of any
other Finance Party under the Finance Documents.

 
 
(b)
The rights of each Finance Party under or in connection with the Finance
Documents are separate and independent rights and any debt arising under the
Finance Documents to a Finance Party from an Obligor shall be a separate and
independent debt.

 
 
(c)
A Finance Party may, except as otherwise stated in the Finance Documents,
separately enforce its rights under the Finance Documents.

 
2.3
Designated Entities
Where a Lender (each a "Designated Lender") has designated in the signature
pages to this Agreement an Affiliate of itself (each a "Designated Entity") as
its Facility Office for the purposes of participating in or making Loans to a
particular Borrower, the Parties unconditionally and irrevocably agree that such
Designated Entity shall:

 
 
(a)
not have any Commitment (which shall remain with the Designating Lender);

 
 
(b)
be entitled to all rights and benefits (other than voting rights which shall
remain with the Designating Lender) under this Agreement relating to its
participation in any Loan to such a Borrower; and

 
 
(c)
have the corresponding duties of a Lender in relation to such Loans, and shall
be a party to this Agreement for that purpose.

 
 
Such Designating Lender shall procure, subject to the terms of this Agreement,
that the Designated Entity participates in a Loan to such a Borrower in place of
the Designating

 
 
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Lender and the Parties shall be entitled to treat such Designated Entity as a
Lender accordingly.

 
3.
PURPOSE

 
3.1
Purpose

Each Borrower shall apply all amounts borrowed by it under Facility A and
Facility B towards general corporate purposes including (but not limited to) the
Akzo Nobel Retirement (in combination with the Subordinated Loan), the financing
or refinancing of the Crystex Acquisition, payment of the Long Term Incentive
Compensation and payment of the Pension Fund Obligations.
 
3.2
Monitoring

No Finance Party is bound to monitor or verify the application of any amount
borrowed pursuant to this Agreement.
 
 
4.
CONDITIONS OF UTILISATION

 
4.1
Initial conditions precedent

No Borrower may deliver a Utilisation Request unless the Agent has received all
of the documents and other evidence listed in Part I of Schedule 2 (Conditions
Precedent and Conditions Subsequent) in form and substance satisfactory to the
Agent.  The Agent shall notify the Company and the Lenders promptly upon being
so satisfied.
 
4.2
Further conditions precedent

 
(a)
The Lenders will only be obliged to comply with Clause 5.4 (Lenders'
participation) if on the date of the Utilisation Request and on the proposed
Utilisation Date:

 
 
(i)
in the case of a Rollover Loan, no Event of Default is continuing or would
result from the proposed Loan and, in the case of any other Loan, no Default is
continuing or would result from the proposed Loan; and

 
 
(ii)
the Repeating Representations to be made by each Obligor are true in all
material respects.

 
 
(b)
The Lenders will only be obliged to comply with Clause 8.3 (Change of currency)
if, on the first day of an Interest Period, no Default is continuing or would
result from the change of currency and the Repeating Representations to be made
by each Obligor are true in all material respects.

 
 
(c)
In the case of any Utilisation, no Crystallisation Event (as defined in the
applicable Japanese Security Document) has occurred in respect of any Japanese
Security Document given in favour of the Finance Parties.

 
4.3
Conditions relating to Optional Currencies

A currency will constitute an Optional Currency in relation to a Utilisation if:
 
 
(a)
it is readily available in the amount required and freely convertible into the
Base Currency in the Relevant Interbank Market on the Quotation Day and the
Utilisation Date for that Utilisation; and

 
 
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(b)
it is euros, sterling or yen.

 
4.4
Maximum number of Utilisations

 
(a)
A Borrower may not deliver a Facility B Utilisation Request if as a result of
the proposed Utilisation seven or more Facility B Utilisations would be
outstanding.

 
 
(b)
A Borrower may not request that a Facility A Loan be divided.

 
 
(c)
Any Loan made by a single Lender under Clause 8.2 (Unavailability of a currency)
shall not be taken into account in this Clause 4.4.

 
 
 
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SECTION 3
UTILISATION
 
 
5.
UTILISATION

 
5.1
Delivery of a Utilisation Request

A Borrower may utilise a Facility by delivery to the Agent of a duly completed
Utilisation Request not later than the Specified Time.
 
5.2
Completion of a Utilisation Request

 
(a)
Each Utilisation Request is irrevocable and will not be regarded as having been
duly completed unless:

 
 
(i)
it identifies the Facility to be utilised;

 
 
(ii)
the proposed Utilisation Date is a Business Day within the Availability Period
applicable to that Facility;

 
 
(iii)
the currency and amount of the Utilisation comply with Clause 5.3 (Currency and
amount); and

 
 
(iv)
the proposed Interest Period complies with Clause 12 (Interest Periods).

 
 
(b)
Only one Loan may be requested in each Utilisation Request.

 
5.3
Currency and amount

 
(a)
The currency specified in a Utilisation Request must be the Base Currency or an
Optional Currency.

 
 
(b)
The amount of the proposed Loan must be:

 
 
(i)
if the currency selected is the Base Currency, US$75,000,000 for Facility A and
a minimum of US$5,000,000 for Facility B or in either case, if less, the
Available Facility; or

 
 
(ii)
if the currency selected is an Optional Currency for Facility A and Facility B
the equivalent amounts to that specified in paragraph (b)(i) above converted
into the Optional Currency or, if less, the Available Facility; and

 
 
(iii)
in any event such that its Base Currency Amount is less than or equal to the
Available Facility; and

 
 
(iv)
provided that, to the extent ever utilised by a Dutch Obligor, the minimum
amount to be drawn by it shall not be less than the equivalent of EUR 50,000.

 
5.4
Lenders' participation

 
(a)
If the conditions set out in this Agreement have been met, each Lender shall
make its participation in each Loan available by the Utilisation Date through
its Facility Office.

 
 
 
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(b)
The amount of each Lender's participation in each Loan will be equal to the
proportion borne by its Available Commitment to the Available Facility
immediately prior to making the Loan.

 
 
(c)
The Agent shall determine the Base Currency Amount of each Loan which is to be
made in an Optional Currency and shall notify each Lender of the amount,
currency and the Base Currency Amount of each Loan and the amount of its
participation in that Loan, in each case by the Specified Time.

 
5.5
Cancellation of Commitment

 
(a)
The Total Facility A Commitments shall be immediately cancelled at the end of
the Availability Period for Facility A.

 
 
(b)
The Total Facility B Commitments shall be immediately cancelled at the end of
the Availability Period for Facility B.

 
 
6.
UTILISATION - LETTERS OF CREDIT

 
6.1
General

 
(a)
In this Clause 6 and Clause 7 (Letters of Credit):

 
 
(i)
"Expiry Date" means, for a Letter of Credit, the last day of its Term;

 
 
(ii)
"L/C Proportion" means, in relation to a Lender in respect of any Letter of
Credit, the proportion (expressed as a percentage) borne by that Lender's
Available Commitment to the Available Facility immediately prior to the issue of
that Letter of Credit, adjusted to reflect any assignment or transfer under this
Agreement to or by that Lender;

 
 
(iii)
"Renewal Request" means a written notice delivered to the Agent in accordance
with Clause 6.7 (Renewal of a Letter of Credit); and

 
 
(iv)
"Term" means each period determined under this Agreement for which the Issuing
Bank is under a liability under a Letter of Credit.

 
 
(b)
Any reference in this Agreement to:

 
 
(i)
a "Finance Party" includes the Issuing Bank;

 
 
(ii)
the Interest Period of a Letter of Credit will be construed as a reference to
the Term of that Letter of Credit;

 
 
(iii)
an amount borrowed includes any amount utilised by way of Letter of Credit;

 
 
(iv)
a Utilisation made or to be made to a Borrower includes a Letter of Credit
issued on its behalf;

 
 
(v)
a Lender funding its participation in a Utilisation includes a Lender
participating in a Letter of Credit;

 
 
 
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(vi)
amounts outstanding under this Agreement include amounts outstanding under or in
respect of any Letter of Credit;

 
 
(vii)
an outstanding amount of a Letter of Credit at any time is the maximum amount
that is or may be payable by the Borrower that requested the issue of that
Letter of Credit at that time;

 
 
(viii)
a Borrower "repaying" or "prepaying" a Letter of Credit means:

 
 
(A)
that Borrower providing cash cover for that Letter of Credit;

 
 
(B)
the maximum amount payable under the Letter of Credit being reduced in
accordance with its terms; or

 
 
(C)
the Issuing Bank being satisfied that it has no further liability under that
Letter of Credit,

 
and the amount by which a Letter of Credit is repaid or prepaid under
sub-paragraphs (viii)(A) and (viii)(B) above is the amount of the relevant cash
cover or reduction; and
 
 
(ix)
a Borrower providing "cash cover" for a Letter of Credit means a Borrower paying
an amount in the currency of the Letter of Credit to an interest-bearing account
in the name of that Borrower and the following conditions are met:

 
 
(A)
the account is with the Agent or the Issuing Bank (if the cash cover is to be
provided for all the Lenders) or with a Lender (if the cash cover is to be
provided for that Lender);

 
 
(B)
withdrawals from the account may only be made to pay a Finance Party amounts due
and payable to it under this Agreement in respect of that Letter of Credit until
no amount is or may be outstanding under that Letter of Credit; and

 
 
(C)
that Borrower has executed a security document, in form and substance
satisfactory to the Agent or the Finance Party with which that account is held,
creating a first ranking security interest over that account.

 
 
(c)
Clause 5 (Utilisation) does not apply to a Utilisation by way of Letter of
Credit.

 
 
(d)
In determining the amount of the Available Facility and a Lender's L/C
Proportion of a proposed Letter of Credit for the purposes of this Agreement the
Available Commitment of a Lender will be calculated ignoring any cash over
provided for outstanding Letters of Credit.

 
6.2
Facility B

An amount of up to US$50,000,000 of Facility B may be utilised by way of Letters
of Credit.
 
 
 
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6.3
Delivery of a Utilisation Request for Letters of Credit
A Borrower may request a Letter of Credit to be issued by delivery to the Agent
of a duly completed Utilisation Request in the form of Part IB of Schedule 3
(Requests) not later than the Specified Time.

 
6.4
Completion of a Utilisation Request for Letters of Credit
Each Utilisation Request for a Letter of Credit is irrevocable and will not be
regarded as having been duly completed unless:

 
 
(a)
it specifies that it is for a Letter of Credit and identifies the Issuing Bank;

 
 
(b)
the proposed Utilisation Date is a Business Day within the Availability Period;

 
 
(c)
the currency and amount of the Letter of Credit comply with Clause 6.5 (Currency
and amount);

 
 
(d)
the form of Letter of Credit is attached;

 
 
(e)
the Expiry Date of the Letter of Credit falls on or before the Termination Date;

 
 
(f)
the delivery instructions for the Letter of Credit are specified; and

 
 
(g)
it identifies the domicile of the beneficiary.

 
6.5
Currency and amount

 
(a)
The currency specified in a Utilisation Request must be the Base Currency or an
Optional Currency.

 
 
(b)
The amount of the proposed Letter of Credit must be an amount whose Base
Currency Amount is not more than the Available Facility and which is:

 
 
(i)
if the currency selected is the Base Currency, a minimum of US$25,000 or, if
less, the Available Facility; or

 
 
(ii)
if the currency selected is an Optional Currency, the minimum amount (and if
required, integral multiple) specified by the Agent pursuant to paragraph
(b)(ii) of Clause 4.3 (Conditions relating to Optional Currencies) or, if less,
the Available Facility.

 
6.6
Issue of Letters of Credit

 
(a)
If the conditions set out in this Agreement have been met, the Issuing Bank
shall issue the Letter of Credit on the Utilisation Date.

 
 
(b)
The Issuing Bank will only be obliged to comply with paragraph (a) above if on
the date of the Utilisation Request or Renewal Request and on the proposed
Utilisation Date:

 
 
(i)
in the case of a Letter of Credit renewed in accordance with Clause 6.7 (Renewal
of a Letter of Credit), no Event of Default is continuing or would result from
the proposed Utilisation and, in the case of any other Utilisation, no Default
is continuing or would result from the proposed Utilisation; and

 
 
 
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(ii)
the Repeating Representations to be made by each Obligor are true in all
material respects.

 
 
(c)
The amount of each Lender's participation in each Letter of Credit will be equal
to the proportion borne by its Available Commitment to the Available Facility
immediately prior to the issue of the Letter of Credit.

 
 
(d)
The Agent shall determine the Base Currency Amount of each Letter of Credit
which is to be issued in an Optional Currency and shall notify the Issuing Bank
and each Lender of the details of the requested Letter of Credit and its
participation in that Letter of Credit by the Specified Time.

 
6.7
Renewal of a Letter of Credit

 
(a)
A Borrower may request any Letter of Credit issued on its behalf be renewed by
delivery to the Agent of a Renewal Request by the Specified Time.

 
 
(b)
The Finance Parties shall treat any Renewal Request in the same way as a
Utilisation Request for a Letter of Credit except that the conditions set out in
paragraph (d) of Clause 6.4 (Completion of a Utilisation Request for Letters of
Credit) shall not apply.

 
 
(c)
The terms of each renewed Letter of Credit shall be the same as those of the
relevant Letter of Credit immediately prior to its renewal, except that:

 
 
(i)
its amount may be less than the amount of the Letter of Credit immediately prior
to its renewal; and

 
 
(ii)
its Term shall start on the date which was the Expiry Date of the Letter of
Credit immediately prior to its renewal, and shall end on the proposed Expiry
Date specified in the Renewal Request.

 
 
(d)
If the conditions set out in this Agreement have been met, the Issuing Bank
shall amend and re-issue any Letter of Credit pursuant to a Renewal Request.

 
6.8
Revaluation of Letters of Credit

 
(a)
If any Letter of Credit is denominated in an Optional Currency, the Agent shall
at three monthly intervals after the date of the Letter of Credit, recalculate
the Base Currency Amount of that Letter of Credit by notionally converting into
the Base Currency the outstanding amount of that Letter of Credit on the basis
of the Agent's Spot Rate of Exchange on the date of calculation.

 
 
(b)
A Borrower shall, if requested by the Agent within five days of any calculation
under paragraph (a) above, ensure that within three Business Days sufficient
Facility B Utilisations are prepaid to prevent the Base Currency Amount of the
Facility B Utilisations exceeding the Total Facility B Commitments following any
adjustment to a Base Currency Amount under paragraph (a) above.

 

 
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7.
LETTERS OF CREDIT

 
7.1
Immediately payable

If a Letter of Credit or any amount outstanding under a Letter of Credit becomes
payable and no claim (as defined in paragraph (a) of Clause 7.4 (Claims under a
Letter of Credit) has been made in respect of that Letter of Credit or amount
outstanding under that Letter of Credit, the Borrower that requested the issue
of that Letter of Credit shall repay or prepay that amount immediately.
 
7.2
Assignments and transfers

 
(a)
Notwithstanding any other provision of this Agreement, the consent of the
relevant Issuing Bank is required for any assignment or transfer of any Lender's
rights and/or obligations under Facility B.

 
 
(b)
If paragraph (a) and the conditions and procedure for transfer specified in
Clause 26 (Changes to the Lenders) are satisfied, then on the Transfer Date the
Issuing Bank and the New Lender shall acquire the same rights and assume the
same obligations between themselves as they would have acquired and assumed had
the New Lender been an Original Lender with the rights and/or obligations
acquired or assumed by it as a result of the transfer and to that extent the
relevant Issuing Bank and the Existing Lender shall each be released from
further obligations to each other under this Agreement.

 
7.3
Fee payable in respect of Letters of Credit

 
(a)
Each Borrower shall pay to the relevant Issuing Bank a fronting fee in respect
of each Letter of Credit requested by it and issued by such Issuing Bank in the
amount and at the times agreed in writing between the relevant Issuing Bank and
the Company.  A reference in this Agreement to a Fee Letter shall include any
written agreement referred to in this paragraph.

 
 
(b)
Each Borrower shall pay to the Agent (for the account of each Lender) a letter
of credit fee in the Base Currency computed at the same rate as the Margin on
the outstanding amount of each Letter of Credit requested by it for the period
from the issue of that Letter of Credit until its Expiry Date.  This fee shall
be distributed according to each Lender's L/C Proportion of that Letter of
Credit.

 
 
(c)
The accrued letter of credit fee on a Letter of Credit shall be payable on the
first day of each successive period of three months (or such shorter period as
shall end on the Expiry Date for that Letter of Credit) starting on the date of
issue of that Letter of Credit.

 
 
(d)
If a Borrower cash covers any part of a Letter of Credit then:

 
 
(i)
the fronting fee payable to the relevant Issuing Bank and the letter of credit
fee payable for the account of each Lender shall continue to be payable until
the expiry of the Letter of Credit;

 
 
(ii)
the Borrower will be entitled to withdraw the interest accrued on the cash cover
to pay those fees.

 
 
 
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7.4
Claims under a Letter of Credit

 
(a)
Each Borrower irrevocably and unconditionally authorises the relevant Issuing
Bank to pay any claim made or purported to be made under a Letter of Credit
requested by it and which appears on its face to be in order (a "claim").

 
 
(b)
Each Borrower which requested a Letter of Credit shall immediately on demand pay
to the Agent for the relevant Issuing Bank an amount equal to the amount of any
claim under that Letter of Credit.

 
 
(c)
Each Borrower acknowledges that the relevant Issuing Bank:

 
 
(i)
is not obliged to carry out any investigation or seek any confirmation from any
other person before paying a claim; and

 
 
(ii)
deals in documents only and will not be concerned with the legality of a claim
or any underlying transaction or any available set-off, counterclaim or other
defence of any person.

 
 
(d)
The obligations of a Borrower under this Clause will not be affected by:

 
 
(i)
the sufficiency, accuracy or genuineness of any claim or any other document; or

 
 
(ii)
any incapacity of, or limitation on the powers of, any person signing a claim or
other document.

 
7.5
Indemnities

 
(a)
Each Borrower shall immediately on demand indemnify an Issuing Bank against any
cost, loss or liability incurred by such Issuing Bank (otherwise than by reason
of such Issuing Bank's gross negligence or wilful misconduct) in acting as the
Issuing Bank under any Letter of Credit requested by that Borrower.

 
 
(b)
Each Lender shall (according to its L/C Proportion) immediately on demand
indemnify an Issuing Bank against any cost, loss or liability incurred by such
Issuing Bank (otherwise than by reason of such Issuing Bank's gross negligence
or wilful misconduct) in acting as the Issuing Bank under any Letter of Credit
(unless such Issuing Bank has been reimbursed by an Obligor pursuant to a
Finance Document).

 
 
(c)
If any Lender is not permitted (by its constitutional documents or any
applicable law) to comply with paragraph (b) above), then that Lender will not
be obliged to comply with paragraph (b) and shall instead be deemed to have
taken, on the date the Letter of Credit is issued (or if later, on the date the
Lender's participation in the Letter of Credit is transferred or assigned to the
Lender in accordance with the terms of this Agreement), an undivided interest
and participation in the Letter of Credit in an amount equal to its L/C
Proportion of that Letter of Credit.  On receipt of demand from the Agent, that
Lender shall pay to the Agent (for the account of the Issuing Bank) an amount
equal to its L/C Proportion of the amount demanded under paragraph (b) above.

 
 
 
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(d)
The Borrower which requested a Letter of Credit shall immediately on demand
reimburse any Lender for any payment it makes to an Issuing Bank under this
Clause 7.5 (Indemnities) in respect of that Letter of Credit.

 
 
(e)
The obligations of each Lender under this Clause are continuing obligations and
will extend to the ultimate balance of sums payable by that Lender in respect of
any Letter of Credit, regardless of any intermediate payment or discharge in
whole or in part.

 
 
(f)
The obligations of any Lender or any Borrower under this Clause will not be
affected by any act, omission, matter or thing which, but for this Clause, would
reduce, release or prejudice any of its obligations under this Clause  (without
limitation and whether or not known to it or any other person) including:

 
 
(i)
any time, waiver or consent granted to, or composition with, any Obligor, any
beneficiary under a Letter of Credit or other person;

 
 
(ii)
the release of any other Obligor or any other person under the terms of any
composition or arrangement;

 
 
(iii)
the taking, variation, compromise, exchange, renewal or release of, or refusal
or neglect to perfect, take up or enforce, any rights against, or security over
assets of, any Obligor, any beneficiary under a Letter of Credit or other person
or any non-presentation or non-observance of any formality or other requirement
in respect of any instrument or any failure to realise the full value of any
security;

 
 
(iv)
any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of an Obligor, any beneficiary
under a Letter of Credit or any other person;

 
 
(v)
any amendment (however fundamental) or replacement of a Finance Document, any
Letter of Credit or any other document or security;

 
 
(vi)
any unenforceability, illegality or invalidity of any obligation of any person
under any Finance Document, any Letter of Credit or any other document or
security; or

 
 
(vii)
any insolvency or similar proceedings.

 
7.6
Rights of contribution

No Obligor will be entitled to any right of contribution or indemnity from any
Finance Party in respect of any payment it may make under this Clause 7.
 
7.7
Role of the Issuing Bank

 
(a)
Nothing in this Agreement constitutes an Issuing Bank as a trustee or fiduciary
of any other person.

 
 
(b)
An Issuing Bank shall not be bound to account to any Lender for any sum or the
profit element of any sum received by it for its own account.

 
 
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(c)
An Issuing Bank may accept deposits from, lend money to and generally engage in
any kind of banking or other business with any member of the Group.

 
 
(d)
An Issuing Bank may rely on:

 
 
(i)
any representation, notice or document believed by it to be genuine, correct and
appropriately authorised; and

 
 
(ii)
any statement made by a director, authorised signatory or employee of any person
regarding any matters which may reasonably be assumed to be within his knowledge
or within his power to verify.

 
 
(e)
An Issuing Bank may engage, pay for and rely on the advice or services of any
lawyers, accountants, surveyors or other experts.

 
 
(f)
An Issuing Bank may act in relation to the Finance Documents through its
personnel and agents.

 
 
(g)
An Issuing Bank is not responsible for:

 
 
(i)
the adequacy, accuracy and/or completeness of any information (whether oral or
written) provided by the Agent, any Party (including itself), or any other
person under or in connection with any Finance Document, the transactions
contemplated by the Finance Documents or any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or in
connection with any Finance Document; or

 
 
(ii)
the legality, validity, effectiveness, adequacy or enforceability of any Finance
Document or any other agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any Finance Document.

 
7.8
Exclusion of liability

 
(a)
Without limiting paragraph (b) below, an Issuing Bank will not be liable for any
action taken by it under or in connection with any Finance Document, unless
directly caused by its gross negligence or wilful misconduct.

 
 
(b)
No Party (other than an Issuing Bank) may take any proceedings against any
officer, employee or agent of an Issuing Bank in respect of any claim it might
have against the Issuing Bank or in respect of any act or omission of any kind
by that officer, employee or agent in relation to any Finance Document.

 
7.9
Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information supplied by
it or on its behalf in connection with any Finance Document, each Lender
confirms to the relevant Issuing Bank that it has been, and will continue to be,
solely responsible for making its own independent appraisal and investigation of
all risks arising under or in connection with any Finance Document, including
but not limited to, those listed in paragraphs (a) to (d) of Clause 28.14
(Credit appraisal by the Secured Parties).
 
 
 
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7.10
Address for notices

The address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of the relevant Issuing Bank for any
communication or document to be made or delivered under or in connection with
the Finance Documents is that notified in writing to the Agent prior to the date
of this Agreement or any substitute address, fax number, department or officer
as the Issuing Bank may notify to the Agent by not less than five Business Days'
notice.
 
7.11
Amendments and Waivers

Notwithstanding any other provision of this Agreement, an amendment or waiver
which relates to the rights or obligations of the Issuing Bank may not be
effected without the consent of the relevant Issuing Bank.
 
 
8.
OPTIONAL CURRENCIES

 
8.1
Selection of currency

 
(a)
A Borrower (or the Company on behalf of a Borrower) shall select the currency of
a Utilisation:

 
 
(i)
(in the case of an initial Utilisation) in a Utilisation Request; and

 
 
(ii)
(afterwards in relation to a Facility A Loan made to it) in a Selection Notice.

 
 
(b)
If a Borrower (or the Company on behalf of a Borrower) fails to issue a
Selection Notice in relation to a Facility A Loan, the Loan will remain
denominated for its next Interest Period in the same currency in which it is
then outstanding.

 
 
(c)
If a Borrower (or the Company on behalf of a Borrower) issues a Selection Notice
requesting a change of currency and the first day of the requested Interest
Period is not a Business Day for the new currency, the Agent shall promptly
notify the Borrower and the Lenders and the Loan will remain in the existing
currency (with Interest Periods running from one Business Day until the next
Business Day) until the next day which is a Business Day for both currencies, on
which day the requested Interest Period will begin.

 
8.2
Unavailability of a currency

If before the Specified Time on any Quotation Day:
 
 
(a)
a Lender notifies the Agent that the Optional Currency requested is not readily
available to it in the amount required; or

 
 
(b)
a Lender notifies the Agent that compliance with its obligation to participate
in a Loan in the proposed Optional Currency would contravene a law or regulation
applicable to it,

 
 
the Agent will give notice to the relevant  Borrower to that effect by the
Specified Time on that day.  In this event, any Lender that gives notice
pursuant to this Clause 8.2 will be required to participate in the Loan in the
Base Currency (in an amount equal to that Lender's proportion of the Base
Currency Amount, or in respect of a Rollover Loan, an

 
 
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amount equal to that Lender's proportion of the Base Currency Amount of the
Rollover  Loan that is due to be made) and its participation will be treated as
a separate Loan denominated in the Base Currency during that Interest Period.

 
8.3
Change of currency

 
(a)
If a Facility A Loan is to be denominated in different currencies during two
successive Interest Periods:

 
 
(i)
if the currency for the second Interest Period is an Optional Currency, the
amount of the Loan in that Optional Currency will be calculated by the Agent as
the amount of that Optional Currency equal to the Base Currency Amount of the
Loan at the Agent's Spot Rate of Exchange at the Specified Time;

 
 
(ii)
if the currency for the second Interest Period is the Base Currency, the amount
of the Loan will be equal to the Base Currency Amount;

 
 
(iii)
(unless the Agent and the Borrower agree otherwise in accordance with paragraph
(b) below) the Borrower that has borrowed the Loan shall repay it on the last
day of the first Interest Period in the currency in which it was denominated for
that Interest Period; and

 
 
(iv)
(subject to Clause 4.2 (Further conditions precedent)) the Lenders shall
re-advance the Loan in the new currency in accordance with Clause 8.5 (Agent's
calculations).

 
 
(b)
If the Agent and the Borrower that has borrowed the Facility A Loan agree, the
Agent shall:

 
 
(i)
apply the amount paid to it by the Lenders pursuant to paragraph (a)(iv) above
(or so much of that amount as is necessary) in or towards purchase of an amount
in the currency in which the Facility A Loan is outstanding for the first
Interest Period; and

 
 
(ii)
use the amount it purchases in or towards satisfaction of the relevant
Borrower's obligations under paragraph (a)(iii) above.

 
 
(c)
If the amount purchased by the Agent pursuant to paragraph (b)(i) above is less
than the amount required to be repaid by the relevant Borrower, the Agent shall
promptly notify that Borrower and that Borrower shall, on the last day of the
first Interest Period, pay an amount to the Agent (in the currency of the
outstanding Facility A Loan for the first Interest Period) equal to the
difference.

 
 
(d)
If any part of the amount paid to the Agent by the Lenders pursuant to paragraph
(a)(iv) above is not needed to purchase the amount required to be repaid by the
relevant Borrower, the Agent shall promptly notify that Borrower and pay that
Borrower, on the last day of the first Interest Period that part of that amount
(in the new currency).

 
 
 
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8.4
Same Optional Currency during successive Interest Periods

 
(a)
If a Facility A Loan is to be denominated in the same Optional Currency during
two successive Interest Periods, the Agent shall calculate the amount of the
Facility A Loan in the Optional Currency for the second of those Interest
Periods (by calculating the amount of Optional Currency equal to the Base
Currency Amount of that Facility A Loan at the Agent's Spot Rate of Exchange at
the Specified Time) and (subject to paragraph (b) below):

 
 
(i)
if the amount calculated is less than the existing amount of that Facility A
Loan in the Optional Currency during the first Interest Period, promptly notify
the Borrower that has borrowed that Facility A Loan and that Borrower shall pay,
on the last day of the first Interest Period, an amount equal to the difference;
or

 
 
(ii)
if the amount calculated is more than the existing amount of that Facility A
Loan in the Optional Currency during the first Interest Period, promptly notify
each Lender and, if no Event of Default is continuing, each Lender shall, on the
last day of the first Interest Period, pay its participation in an amount equal
to the difference.

 
 
(b)
If the calculation made by the Agent pursuant to paragraph (a) above shows that
the amount of the Facility A Loan in the Optional Currency for the second of
those Interest Periods converted into the Base Currency at the Agent's Spot Rate
of Exchange at the Specified Time has increased or decreased by less than 5 per
cent. compared to its Base Currency Amount (taking into account any payments
made pursuant to paragraph (a) above), no notification shall be made by the
Agent and no payment shall be required under paragraph (a) above.

 
8.5
Agent's calculations

 
(a)
All calculations made by the Agent pursuant to this Clause 8 will take into
account any repayment, prepayment, consolidation or division of Facility A Loans
to be made on the last day of the first Interest Period.

 
 
(b)
Each Lender's participation in a Loan will, subject to paragraph (a) above, be
determined in accordance with paragraph (b) of Clause 5.4 (Lenders'
participation).

 
 
 
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SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
 
 
9.
REPAYMENT

 
9.1
Repayment of Facility A Loans

 
(a)
Each Borrower shall repay the Facility A Loans made to it in instalments by
repaying on each Repayment Date the amount set out opposite each Repayment Date
below:

 
Repayment Date
Repayment Instalment
 
On the first anniversary of the date of this Agreement
US$15,000,000
 
On the second anniversary of the date of this Agreement
US$15,000,000
 
On the third anniversary of the date of this Agreement
US$15,000,000
 
On the fourth anniversary of the date of this Agreement
US$15,000,000
 
On the fifth anniversary of the date of this Agreement
An amount in dollars equal to the Facility A Loan then outstanding in relation
to the relevant Borrower shall be repaid in full.
 

 
(b)
Any repayment or prepayment of a Facility A Loan denominated in an Optional
Currency shall reduce the amount of that Facility A Loan by the amount of that
Optional Currency repaid and shall reduce the Base Currency Amount of that
Facility A Loan proportionally.

 
 
(c)
No Borrower may reborrow any part of Facility A which is repaid.

 
9.2
Repayment of Facility B Loans

 
(a)
Each Borrower which has drawn a Facility B Loan shall repay that Loan on the
last day of its Interest Period and, in any event, shall repay in full an amount
in dollars equal to the Facility B Loan then outstanding in relation to the
relevant Borrower no later than the Termination Date.

 
 
(b)
Any reduction of the Total Facility B Commitments shall reduce rateably the
Commitment of each Lender.

 
 
(c)
A Borrower may reborrow any part of Facility B which is repaid.

 
 
 
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10.
PREPAYMENT AND CANCELLATION

 
10.1
Illegality

 
(a)
If, at any time, it is or will become unlawful in any applicable jurisdiction
for a Lender to perform any of its obligations as contemplated by this Agreement
or to fund or maintain its participation in any Utilisation:

 
 
(i)
that Lender shall promptly notify the Agent upon becoming aware of that event;

 
 
(ii)
upon the Agent notifying the Company, the Commitment of that Lender will be
immediately cancelled; and

 
 
(iii)
each Borrower shall repay that Lender's participation in the Utilisations made
to that Borrower on the last day of the Interest Period for each Utilisation
occurring after the Agent has notified the Company or, if earlier, the date
specified by the Lender in the notice delivered to the Agent.

 
 
(b)
If, at any time, it is or will become unlawful for the Issuing Bank to issue or
leave outstanding any Letter of Credit the Issuing Bank shall promptly notify
the Agent upon becoming aware of that event and upon the Agent notifying the
Company, Facility B shall cease to be available for the issue of Letters of
Credit and each Borrower shall use its best endeavours to procure the release of
each Letter of Credit requested by that Borrower and outstanding at such time.

 
10.2
Change of control

 
(a)
As of the Akzo Nobel Retirement, if Solutia Inc. or any of its Subsidiaries
cease to control, either directly or indirectly:

 
 
(i)
the Company;

 
 
(ii)
Flexsys Rubber Chemicals Limited; or

 
 
(iii)
the partnership interests in Flexsys America L.P.

 
 (being a "Change of Control"), the Company and the relevant Obligor shall
immediately notify the Agent.
 
 
(b)
For the purposes of paragraph (a) of this Clause 10.2, the cessation or change
of ownership of the Company, Flexsys America L.P. or Flexsys Rubber Chemicals
Limited that does not have an adverse effect (whether legal or otherwise) on the
nature of any transaction Security or any further security granted (or that may
be granted) pursuant to the Finance Documents or on the rights or remedies of
the Lenders under any such Transaction Security or other such Security or under
the Finance Documents, shall be disregarded, provided that the Group remains
wholly owned by Solutia Inc, or any of its subsidiaries.

 
 For the purposes of paragraph (a) above "control" means:
 
 
(i)
the power (whether by way of ownership of shares, proxy, contract, agency or
otherwise) to:

 
 
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(A)
cast, or control the casting of, more than one half of the maximum number of
votes that might be cast at a general meeting of the relevant Obligor; or

 
 
(B)
appoint or remove all, or the majority, of the directors or other equivalent
officers of the relevant Obligor; or

 
 
(C)
give directions with respect to the operating and financial policies of the
Company which the directors or other equivalent officers of the relevant Obligor
are obliged to comply with; or

 
 
(D)
the holding more than one half of the issued share capital of the relevant
Obligor (excluding any part of that issued share capital that carries no right
to participate beyond a specified amount in a distribution of either profits or
capital).

 
 
(c)
If a Lender so requires and notifies the Agent within 30 days of the Company
notifying the Agent of a Change of Control, the Agent shall, by not less than 30
days notice to the Company, cancel the Commitment of that Lender and declare the
participation of that Lender in all outstanding Utilisations, together with
accrued interest, and all other amounts accrued under the Finance Documents
immediately due and payable, whereupon the Commitment of that Lender will be
cancelled and all such outstanding amounts will become immediately due and
payable.

 
10.3
Voluntary cancellation
The Company may, if it gives notice to the Agent by no later than 11:00 am on
the Business Day immediately preceding the day the cancellation is to take
effect, cancel the whole or any part (being a minimum amount of US$10,000,000
and the integral multiples thereof) of the undrawn Commitments under the
Facility B Loan.  Any cancellation under this Clause 10.3 shall reduce the
Commitments of the Lenders rateably under that Facility.

 
10.4
Voluntary prepayment of Facility A Loans

 
(a)
A Borrower to which a Facility A Loan has been made may, if it gives the Agent
not less than 5 Business Days' (or such shorter period as the Agent acting on
instruction of the Majority Lenders may agree) prior notice, prepay the whole or
any part of any Facility A Loan (but, if in part, being an amount that reduces
the Base Currency Amount of the Facility A Loan by a minimum amount of
US$1,000,000 and integral multiples thereof).

 
 
(b)
A Facility A Loan may only be prepaid on the last day of an Interest Period (or,
if earlier, the day on which the applicable Available Facility is zero).

 
 
(c)
Any prepayment under this Clause 10 shall satisfy the obligations under Clause
9.1 (Repayment of Facility A Loans) pro rata for each repayment instalment prior
to the occurrence of a Default and, thereafter, in inverse chronological order.

 
 
 
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10.5
Right of repayment and cancellation in relation to a single Lender

 
(a)
If:

 
 
(i)
any sum payable to any Lender by an Obligor is required to be increased under
paragraph (c) of Clause 15.2 (Tax gross-up); or

 
 
(ii)
any Lender claims indemnification from the Company under Clause 15.3 (Tax
indemnity) or Clause 16.1 (Increased costs); or

 
 
(iii)
any Lender notifies the Agent of its Additional Cost Rate under paragraph 3 of
Schedule 4 (Mandatory Cost Formulae);

 
 
 
the Company may, whilst (in the case of paragraphs (i) and (ii) above) the
circumstance giving rise to the requirement or indemnification continues or (in
the case of paragraph (iii) above) that Additional Cost Rate is greater than
zero, give the Agent notice of cancellation of the Commitment of that Lender and
its intention to procure the repayment of that Lender's participation in the
Utilisations.

 
 
(b)
On receipt of a notice referred to in paragraph (a) above, the Commitment of
that Lender shall immediately be reduced to zero.

 
 
(c)
On the last day of each Interest Period which ends after the Company has given
notice under paragraph (a) above (or, if earlier, the date specified by the
Company in that notice), each Borrower to which a Utilisation is outstanding
shall repay that Lender's participation in that Utilisation.

 
10.6
Restrictions

 
(a)
Any notice of cancellation or prepayment given by any Party under this Clause 10
shall be irrevocable and, unless a contrary indication appears in this
Agreement, shall specify the date or dates upon which the relevant cancellation
or prepayment is to be made and the amount of that cancellation or prepayment.

 
 
(b)
Any prepayment under this Agreement shall be made together with accrued interest
on the amount prepaid and, subject to any Break Costs, without premium or
penalty.

 
 
(c)
No Borrower may reborrow any part of Facility A which is prepaid.

 
 
(d)
Unless a contrary indication appears in this Agreement, any part of Facility B
which is prepaid may be reborrowed in accordance with the terms of this
Agreement.

 
 
(e)
The Borrowers shall not repay or prepay all or any part of the Utilisations or
cancel all or any part of the Commitments except at the times and in the manner
expressly provided for in this Agreement.

 
 
(f)
No amount of the Total Commitments cancelled under this Agreement may be
subsequently reinstated.

 
 
 
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(g)
If the Agent receives a notice under this Clause 10 it shall promptly forward a
copy of that notice to either the Company or the affected Lender, as
appropriate.

 
 
 
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SECTION 5
COSTS OF UTILISATION
 
 
11.
INTEREST

 
11.1
Calculation of interest

The rate of interest on each Loan for each Interest Period is the percentage
rate per annum which is the aggregate of the applicable:
 
 
(a)
Margin;

 
 
(b)
LIBOR or, in relation to any Loan in euro, EURIBOR; and

 
 
(c)
Mandatory Cost, if any.

 
11.2
Payment of interest

The Borrower to which a Loan has been made shall pay accrued interest on that
Loan on the last day of each Interest Period (and, if the Interest Period is
longer than six Months, on the dates falling at six Monthly intervals after the
first day of the Interest Period).
 
11.3
Default interest

 
(a)
To the extent permitted under applicable law, if an Obligor fails to pay any
amount payable by it under a Finance Document on its due date, interest shall
accrue on the overdue amount from the due date up to the date of actual payment
(both before and after judgment) at a rate which, subject to paragraph (b)
below, is one per cent higher than the rate which would have been payable if the
overdue amount had, during the period of non-payment, constituted a Loan in the
currency of the overdue amount for successive Interest Periods, each of a
duration selected by the Agent (acting reasonably).  Any interest accruing under
this Clause 11.3 shall be immediately payable by the Obligor on demand by the
Agent.

 
 
(b)
If any overdue amount consists of all or part of a Loan which became due on a
day which was not the last day of an Interest Period relating to that Loan:

 
 
(i)
the first Interest Period for that overdue amount shall have a duration equal to
the unexpired portion of the current Interest Period relating to that Loan; and

 
 
(ii)
the rate of interest applying to the overdue amount during that first Interest
Period shall be one per cent. higher than the rate which would have applied if
the overdue amount had not become due.

 
 
(c)
To the extent permitted under applicable law, default interest (if unpaid)
arising on an overdue amount will be compounded with the overdue amount at the
end of each Interest Period applicable to that overdue amount but will remain
immediately due and payable.

 
11.4
Notification of rates of interest

The Agent shall promptly notify the Lenders and the relevant Borrower of the
determination of a rate of interest under this Agreement.
 
 
 
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12.
INTEREST PERIODS

 
12.1
Selection of Interest Periods

 
(a)
A Borrower (or the Company on behalf of a Borrower) may select an Interest
Period for a Loan in the Utilisation Request for that Loan or (if the Loan has
already been borrowed) in a Selection Notice.

 
 
(b)
Each Selection Notice for a Loan is irrevocable and must be delivered to the
Agent by the Borrower (or the Company on behalf of a Borrower) to which that
Loan was made not later than the Specified Time.

 
 
(c)
If a Borrower (or the Company) fails to deliver a Selection Notice to the Agent
in accordance with paragraph (b) above, the relevant Interest Period will,
subject to Clause 12.2 (Changes to Interest Periods), be one Month.

 
 
(d)
Subject to this Clause 12, a Borrower (or the Company) may select an Interest
Period of one, three or six Months or any other period agreed between the
Company and the Agent (acting on the instructions of all the Lenders).  In
addition, in relation to Facility A, a Borrower (or the Company on its behalf)
may select an Interest Period of a period of less than one Month, if necessary
to ensure that there are sufficient Facility A Loans (with an aggregate Base
Currency Amount equal to or greater than the Repayment Instalment) which have an
Interest Period ending on a Facility A Repayment Date for the Borrowers to make
the Repayment Instalment due on that date.

 
 
(e)
An Interest Period for a Loan shall not extend beyond the Termination Date
applicable to its Facility.

 
 
(f)
Each Interest Period for a Loan shall start on the Utilisation Date or (if
already made) on the last day of its preceding Interest Period.

 
12.2
Changes to Interest Periods

 
(a)
Prior to determining the interest rate for a Facility A Loan, the Agent may
shorten an Interest Period for any Facility A Loan to ensure there are
sufficient Facility A Loans (with an aggregate Base Currency Amount equal to or
greater than the Repayment Instalment) which have an Interest Period ending on a
Facility A Repayment Date for the Borrowers to make the Repayment Instalment due
on that date.

 
 
(b)
If the Agent makes any of the changes to an Interest Period referred to in this
Clause 12.2, it shall promptly notify the Company and the Lenders.

 
12.3
Non-Business Days

If an Interest Period would otherwise end on a day which is not a Business Day,
that Interest Period will instead end on the next Business Day in that calendar
month (if there is one) or the preceding Business Day (if there is not).
 
 
 
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13.
CHANGES TO THE CALCULATION OF INTEREST

 
13.1
Absence of quotations

Subject to Clause 13.2 (Market disruption), if LIBOR or, if applicable, EURIBOR
is to be determined by reference to the Reference Banks but a Reference Bank
does not supply a quotation by the Specified Time on the Quotation Day, the
applicable LIBOR or EURIBOR shall be determined on the basis of the quotations
of the remaining Reference Banks.
 
13.2
Market disruption

 
(a)
If a Market Disruption Event occurs in relation to a Loan for any Interest
Period, then the rate of interest on each Lender's share of that Loan for the
Interest Period shall be the percentage rate per annum which is the sum of:

 
 
(i)
the Margin;

 
 
(ii)
the rate notified to the Agent by that Lender as soon as practicable and in any
event before interest is due to be paid in respect of that Interest Period, to
be that which expresses as a percentage rate per annum the cost to that Lender
of funding its participation in that Loan from whatever source it may reasonably
select; and

 
 
(iii)
the Mandatory Cost, if any, applicable to that Lender's participation in the
Loan.

 
 
(b)
In this Agreement "Market Disruption Event" means:

 
 
(i)
at or about noon on the Quotation Day for the relevant Interest Period the
Screen Rate is not available and none or only one of the Reference Banks
supplies a rate to the Agent to determine LIBOR or, if applicable, EURIBOR for
the relevant currency and Interest Period; or

 
 
(ii)
before close of business in London on the Quotation Day for the relevant
Interest Period, the Agent receives notifications from a Lender or Lenders
(whose participations in a Loan exceed 35 per cent. of that Loan) that the cost
to it of obtaining matching deposits in the Relevant Interbank Market would be
in excess of LIBOR or, if applicable, EURIBOR.

 
13.3
Alternative basis of interest or funding

 
(a)
If a Market Disruption Event occurs and the Agent or the Company so requires,
the Agent and the Company shall enter into negotiations (for a period of not
more than thirty days) with a view to agreeing a substitute basis for
determining the rate of interest.

 
 
(b)
Any alternative basis agreed pursuant to paragraph (a) above shall, with the
prior consent of all the Lenders and the Company, be binding on all Parties.

 
13.4
Break Costs

 
(a)
Each Borrower shall, within three Business Days of demand by a Finance Party,
pay to that Finance Party its Break Costs attributable to all or any part of a
Loan

 
 
 
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or Unpaid Sum being paid by that Borrower on a day other than the last day of an
Interest Period for that Loan or Unpaid Sum.

 
 
(b)
Each Lender shall, as soon as reasonably practicable after a demand by the
Agent, provide a certificate confirming the amount of its Break Costs for any
Interest Period in which they accrue.

 
 
14.
FEES

 
14.1
Commitment fee

 
(a)
The Company shall pay to the Agent (for the account of each Lender) a fee
computed at the rate of 40 per cent. per annum of the Margin applicable to
Facility B on the daily undrawn and uncancelled Available Commitment under
Facility B accruing from the date of this Agreement until the end of the
Facility B Availability Period.

 
 
(b)
The accrued commitment fee is payable quarterly in arrears, on the last day of
the Facility B Availability Period and, if cancelled in full, on the cancelled
amount of the Facility B Commitment at the time the cancellation is effective.

 
14.2
Utilisation Fee

The Company shall pay to the Agent (for the account of each Lender) a
utilisation fee at the rate of:
 
 
(a)
0.05 per cent. per annum on the Facility B Loans then outstanding, payable
quarterly in arrears whenever the aggregate of the Facility B Loans borrowed but
not yet repaid are equal to or greater than 33.33 per cent. of the Total
Facility B Commitments.

 
 
(b)
0.15 per cent. per annum on the Facility B Loans then outstanding, payable
quarterly in arrears whenever the aggregate of the Facility B Loans borrowed but
not yet repaid are equal to or greater than 66.67 per cent. of the Total
Facility B Commitments.

 
14.3
Front end fee

The Company shall pay to the Arrangers a front end fee in the amount and at the
times agreed in a Fee Letter.
 
14.4
Agency/Security Trustee fee

The Company shall pay to the Agent (for its own account) an agency/security
trustee fee in the amount and at the times agreed in a Fee Letter.
 
 
 
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SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
 
 
15.
TAX GROSS UP AND INDEMNITIES

 
15.1
Definitions

 
(a)
In this Agreement:

 
"Protected Party" means a Finance Party which is or will be subject to any
liability, or required to make any payment, for or on account of Tax in relation
to a sum received or receivable (or any sum deemed for the purposes of Tax to be
received or receivable) under a Finance Document.
 
"Tax Credit" means a credit against, relief or remission for, or repayment of
any Tax.
 
"Tax Deduction" means a deduction or withholding for or on account of Tax from a
payment under a Finance Document.
 
"Tax Payment" means either the increase in a payment made by an Obligor to a
Finance Party under Clause 15.2 (Tax gross-up) or a payment under Clause 15.3
(Tax indemnity).
 
 
(b)
Unless a contrary indication appears, in this Clause 15 a reference to
"determines" or "determined" means a determination made in the absolute
discretion of the person making the determination.

 
15.2
Tax gross-up

 
(a)
Each Obligor shall make all payments to be made by it under the Finance
Documents without any Tax Deduction, unless a Tax Deduction is required by law.

 
 
(b)
The Company shall promptly upon becoming aware that an Obligor must make a Tax
Deduction (or that there is any change in the rate or the basis of a Tax
Deduction) notify the Agent accordingly.  Similarly, a Lender shall notify the
Agent on becoming so aware in respect of a payment payable to that Lender.  If
the Agent receives such notification from a Lender it shall notify the Company
and that Obligor.

 
 
(c)
If a Tax Deduction is required by law to be made by an Obligor, the amount of
the payment due from that Obligor shall be increased to an amount which (after
making any Tax Deduction) leaves an amount equal to the payment which would have
been due if no Tax Deduction had been required.

 
 
(d)
An Obligor is not obliged to pay any additional amounts pursuant to paragraph
(c) above in respect of any Tax Deduction which would not have been required if
the relevant Finance Party had complied with its obligations under paragraph (g)
below.

 
 
(e)
If an Obligor is required to make a Tax Deduction, that Obligor shall make that
Tax Deduction and any payment required in connection with that Tax

 
 
 
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Deduction within the time allowed and in the minimum amount required by law.

 
 
(f)
Within thirty days of making either a Tax Deduction or any payment required in
connection with that Tax Deduction, the Obligor making that Tax Deduction shall
deliver to the Agent for the Finance Party entitled to the payment evidence
reasonably satisfactory to that Finance Party that the Tax Deduction has been
made or (as applicable) any appropriate payment paid to the relevant taxing
authority.

 
 
(g)
A Finance Party and each Obligor which makes a payment to which that Finance
Party is entitled shall co-operate promptly in completing any procedural
formalities necessary for that Obligor to obtain authorisation to make that
payment without a Tax Deduction on time.

 
15.3
Tax indemnity

 
(a)
The Company shall (within three Business Days of demand by the Agent) pay to a
Protected Party an amount equal to the loss, liability or cost which that
Protected Party determines will be or has been (directly or indirectly) suffered
for or on account of Tax by that Protected Party in respect of a Finance
Document or the transactions occurring under such Finance Document.

 
 
(b)
Paragraph (a) above shall not apply:

 
 
(i)
with respect to any Tax assessed on a Finance Party:

 
 
(A)
under the law of the jurisdiction in which that Finance Party is incorporated
or, if different, the jurisdiction (or jurisdictions) in which that Finance
Party is treated as resident for tax purposes; or

 
 
(B)
under the law of the jurisdiction in which that Finance Party's Facility Office
is located in respect of amounts received or receivable in that jurisdiction,

 
if that Tax is imposed on or calculated by reference to the net income received
or receivable (but not any sum deemed to be received or receivable) by that
Finance Party; or
 
 
(ii)
to the extent a loss, liability or cost:

 
 
(A)
is compensated for by an increased payment under Clause 15.2 (Tax gross-up); or

 
 
(B)
would have been compensated for by an increased payment under Clause 15.2 (Tax
gross-up) but was not so compensated solely because of the exclusion in
paragraph (d) of Clause 15.2 (Tax gross-up) applied.

 
 
(c)
A Protected Party making, or intending to make a claim under paragraph (a) above
shall promptly notify the Agent of the event which will give, or has given, rise
to the claim, following which the Agent shall notify the Company.

 
 
 
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(d)
A Protected Party shall, on receiving a payment from an Obligor under this
Clause 15.3, notify the Agent.

 
15.4
Tax Credit

If an Obligor makes a Tax Payment and the relevant Finance Party (acting
reasonably) determines that:
 
 
(a)
a Tax Credit is attributable either to an increased payment of which that Tax
Payment forms part, or to that Tax Payment; and

 
 
(b)
that Finance Party has obtained, utilised and fully retained that Tax Credit on
an affiliated group basis,

 
the Finance Party shall pay an amount to the Obligor which that Finance Party
determines (acting reasonably) will leave it (after that payment) in the same
after-Tax position as it would have been in had the Tax Payment not been
required to be made by the Obligor.
 
15.5
Stamp taxes

The Company shall pay and, within three Business Days of written demand,
indemnify each Finance Party against any cost, loss or liability that Finance
Party incurs in relation to all stamp duty, registration, excise and other
similar Taxes payable in respect of any Finance Document or the transactions
occurring under any of them.
 
15.6
Value added tax

 
(a)
All amounts set out, or expressed to be payable under a Finance Document by any
Party to a Finance Party which (in whole or in part) constitute the
consideration for VAT purposes shall be deemed to be exclusive of any VAT which
is chargeable on such supply, and accordingly, subject to paragraph (c) below,
if VAT is chargeable on any supply made by any Finance Party to any Party under
a Finance Document, that Party shall pay to the Finance Party (in addition to
and at the same time as paying the consideration) an amount equal to the amount
of the VAT (and such Finance Party shall promptly provide an appropriate VAT
invoice to such Party).

 
 
(b)
If VAT is chargeable on any supply made by any Finance Party (the "Supplier") to
any other Finance Party (the "Recipient") under a Finance Document, and any
Party (the "Relevant Party") is required by the terms of any Finance Document to
pay an amount equal to the consideration for such supply to the Supplier (rather
than being required to reimburse the Recipient in respect of that
consideration), such Party shall also pay to the Supplier (in addition to and at
the same time as paying such amount) an amount equal to the amount of such
VAT.  The Recipient will promptly pay to the Relevant Party an amount equal to
any credit or repayment from the relevant tax authority which it reasonably
determines relates to the VAT chargeable on that supply.

 
 
(c)
Where a Finance Document requires any Party to reimburse a Finance Party for any
costs or expenses, that Party shall also at the same time pay and indemnify the
Finance Party against all VAT incurred by the Finance Party in respect of the
costs or expenses to the extent that the Finance Party reasonably determines

 
 
 
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that neither it nor any other member of any group of which it is a member for
VAT purposes is entitled to credit or repayment from the relevant tax authority
in respect of the VAT.

 
 
16.
INCREASED COSTS

 
16.1
Increased costs

 
(a)
Subject to Clause 16.3 (Exceptions) the Company shall, within three Business
Days of a written demand by the Agent, pay for the account of a Finance Party
the amount of any Increased Costs incurred by that Finance Party or any of its
Affiliates as a result of (i) the introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation or (ii)
compliance with any law or regulation made, in force and enforceable or required
to be complied with or with which compliance is customary after the date of this
Agreement.

 
 
(b)
In this Agreement "Increased Costs" means:

 
 
(i)
a reduction in the rate of return from the Facility or on a Finance Party's (or
its Affiliate's) overall capital;

 
 
(ii)
an additional or increased cost; or

 
 
(iii)
a reduction of any amount due and payable under any Finance Document,

 
 
 
which is incurred or suffered by a Finance Party or any of its Affiliates to the
extent that it is attributable to that Finance Party having entered into its
Commitment or funding or performing its obligations under any Finance Document.

 
16.2
Increased cost claims

 
(a)
A Finance Party intending to make a claim pursuant to Clause 16.1 (Increased
costs) shall notify the Agent of the event giving rise to the claim, following
which the Agent shall promptly notify the Company.

 
 
(b)
Each Finance Party shall, as soon as practicable after a demand by the Agent,
provide a certificate confirming the amount of its Increased Costs.

 
16.3
Exceptions

 
(a)
Clause 16.1 (Increased costs) does not apply to the extent any Increased Cost
is:

 
 
(i)
attributable to a Tax Deduction required by law to be made by an Obligor;

 
 
(ii)
compensated for by Clause 15.3 (Tax indemnity) (or would have been compensated
for under Clause 15.3 (Tax indemnity) but was not so compensated solely because
any of the exclusions in paragraph (b) of Clause 15.3 (Tax indemnity) applied);

 
 
(iii)
compensated for by the payment of the Mandatory Cost; or

 
 
(iv)
attributable to the wilful breach by the relevant Finance Party or its
Affiliates of any law or regulation.

 
 
 
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(b)
In this Clause 16.3, a reference to a "Tax Deduction" has the same meaning given
to the term in Clause 15.1 (Definitions).

 
 
17.
OTHER INDEMNITIES

 
17.1
Currency indemnity

 
(a)
If any sum due from an Obligor under the Finance Documents (a "Sum"), or any
order, judgment or award given or made in relation to a Sum, has to be converted
from the currency (the "First Currency") in which that Sum is payable into
another currency (the "Second Currency") for the purpose of:

 
 
(i)
making or filing a claim or proof against that Obligor;

 
 
(ii)
obtaining or enforcing an order, judgment or award in relation to any litigation
or arbitration proceedings,

 
 
 
that Obligor shall as an independent obligation, within three Business Days of
demand, indemnify each Finance Party to whom that Sum is due against any cost,
loss or liability arising out of or as a result of the conversion including any
discrepancy between (A) the rate of exchange used to convert that Sum from the
First Currency into the Second Currency and (B) the rate or rates of exchange
available to that person at the time of its receipt of that Sum.

 
 
(b)
Each Obligor waives any right it may have in any jurisdiction to pay any amount
under the Finance Documents in a currency or currency unit other than that in
which it is expressed to be payable.

 
17.2
Other indemnities

The Company shall (or shall procure that an Obligor will), within three Business
Days of written demand, indemnify each Finance Party against any cost, loss or
liability incurred by that Finance Party as a result of:
 
 
(a)
the occurrence of any Event of Default;

 
 
(b)
a failure by an Obligor to pay any amount due under a Finance Document on its
due date, including without limitation, any cost, loss or liability arising as a
result of Clause 31 (Sharing among the Finance Parties);

 
 
(c)
funding, or making arrangements to fund, its participation in a Utilisation
requested by a Borrower in a Utilisation Request but not made by reason of the
operation of any one or more of the provisions of this Agreement (other than by
reason of default or negligence by that Finance Party alone); or

 
 
(d)
a Utilisation (or part of a Utilisation) not being prepaid in accordance with a
notice of prepayment given by a Borrower or the Company.

 
 
 
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17.3
Indemnity to the Agent

The Company shall, within three Business Days of a written demand, indemnify the
Agent against any cost, loss or liability incurred by the Agent (acting
reasonably) as a result of:
 
 
(a)
investigating any event which it reasonably believes is a Default; or

 
 
(b)
entering into or performing any foreign exchange contract for the purposes of
paragraph (b) of Clause 8.3 (Change of Currency); or

 
 
(c)
acting or relying on any notice, request or instruction which it reasonably
believes to be genuine, correct and appropriately authorised.

 
17.4
Indemnity to the Security Trustee

 
(a)
Each Obligor shall, within three Business Days of a written demand, indemnify
the Security Trustee and every Receiver and Delegate against any cost, loss or
liability incurred by any of them as a result of:

 
 
(i)
the taking, holding, protection or enforcement of the Transaction Security;

 
 
(ii)
the exercise of any of the rights, powers, discretions and remedies vested in
the Security Trustee and each Receiver and Delegate by the Finance Documents or
by law; and

 
 
(iii)
any default by any Obligor in the performance of any of the obligations
expressed to be assumed by it in the Finance Documents.

 
 
(b)
The Security Trustee may, in priority to any payment to the Secured Parties,
indemnify itself out of the Charged Property in respect of, and pay and retain,
all sums necessary to give effect to the indemnity in this Clause 17.4 and shall
have a lien on the Transaction Security and the proceeds of the enforcement of
the Transaction Security for all moneys payable to it.

 
 
18.
MITIGATION BY THE LENDERS

 
18.1
Mitigation

 
(a)
Each Finance Party shall, in consultation with the Company, take all reasonable
steps to mitigate any circumstances which arise and which would result in any
facility ceasing to be available or any amount becoming payable under or
pursuant to, or cancelled pursuant to, any of Clause 10.1 (Illegality), Clause
15 (Tax gross-up and indemnities), Clause 16 (Increased costs) or paragraph 3 of
Schedule 4 (Mandatory Cost Formulae) including (but not limited to) transferring
its rights and obligations under the Finance Documents to another Affiliate or
Facility Office.

 
 
(b)
Paragraph (a) above does not in any way limit the obligations of any Obligor
under the Finance Documents.

 
 
 
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18.2
Limitation of liability

 
(a)
The Company shall, within three Business Days of written demand, indemnify each
Finance Party for all costs and expenses reasonably incurred by that Finance
Party as a result of steps taken by it under Clause 18.1 (Mitigation).

 
 
(b)
A Finance Party is not obliged to take any steps under Clause 18.1 (Mitigation)
if, in the opinion of that Finance Party (acting reasonably), to do so might be
prejudicial to it.

 
 
19.
COSTS AND EXPENSES

 
19.1
Transaction expenses

The Company shall, within three Business Days of a written demand, pay the
Agent, the Arranger and the Security Trustee the amount of all costs and
expenses (including, but not limited to, legal fees) incurred by any of them
(each acting reasonably) in connection with the negotiation, preparation,
printing, execution, syndication and perfection of:
 
 
(a)
this Agreement and any other documents referred to in this Agreement and the
Transaction Security; and

 
 
(b)
any other Finance Documents executed after the date of this Agreement.

 
19.2
Amendment costs

If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment
is required pursuant to Clause 32.9 (Change of currency), the Company shall,
within three Business Days of written demand, reimburse each of the Agent and
the Security Trustee for the amount of all costs and expenses (including, but
not limited to, legal fees) reasonably incurred by the Agent and the Security
Trustee (and in the case of the Security Trustee, by any Receiver or Delegate)
in responding to, evaluating, negotiating or complying with that request or
requirement.
 
19.3
Security Trustee's ongoing costs

 
(a)
In the event of (i) the occurrence of a Default or (ii) the Security Trustee
considering it necessary or expedient or (iii) the Security Trustees being
requested by an Obligor or the Majority Lenders to undertake duties which the
Security Trustee and the Company agree to be of an exceptional nature and/or
outside the scope of the normal duties of the Security Trustee under the Finance
Documents, the Company shall pay to the Security Trustee any additional
remuneration that may be agreed between them.

 
 
(b)
If the Security Trustee and the Company fail to agree upon the nature of the
duties or upon any additional remuneration, that dispute shall be determined by
a investment bank (acting as an expert and not as an arbitrator) selected by the
Security Trustee and approved by the Company or, failing approval, nominated (on
the application of the Security Trustee) by the President for the time being of
the Law Society of England and Wales (the costs of the nomination and of the
investment bank being payable by the Company) and the determination of any
investment  bank shall be final and binding upon the parties to this Agreement.

 
 
 
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19.4
Enforcement and preservation costs

The Company shall, within three Business Days of written demand, pay to each
Finance Party the amount of all costs and expenses (including but not limited to
legal fees) incurred by it in connection with the enforcement of, or the
preservation of any rights under, any Finance Document and the Transaction
Security and any proceedings instituted by or against the Security Trustee as a
consequence of taking or holding the Transaction Security or enforcing these
rights.
 
19.5
For the purposes of Clauses 16.1, 17.2 to 17.4, 18.2, 19.1, 19.2 and 19.4 any
written demand shall be accompanied by reasonable evidence of the relevant
amount claimed (which in the case of any cost or expense shall be the relevant
invoice together with an explanation as to why the cost or expense was
incurred).

 
 
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SECTION 7
GUARANTEE
 
 
20.
GUARANTEE AND INDEMNITY

 
20.1
Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:
 
 
(a)
guarantees to each Finance Party punctual performance by each Borrower of all
that Borrower's obligations under the Finance Documents;

 
 
(b)
undertakes with each Finance Party that whenever a Borrower does not pay any
amount when due under or in connection with any Finance Document, that Guarantor
shall immediately on demand pay that amount as if it was the principal obligor;
and

 
 
(c)
indemnifies each Finance Party immediately on demand against any cost, loss or
liability suffered by that Finance Party if any obligation guaranteed by it is
or becomes unenforceable, invalid or illegal.  The amount of the cost, loss or
liability shall be equal to the amount which that Finance Party would otherwise
have been entitled to recover.

 
20.2
Continuing guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance
of sums payable by any Obligor under the Finance Documents, regardless of any
intermediate payment or discharge in whole or in part.
 
20.3
Reinstatement

If any payment by an Obligor or any discharge given by a Finance Party (whether
in respect of the obligations of any Obligor or any security for those
obligations or otherwise) is avoided or reduced as a result of insolvency or any
similar event:
 
 
(a)
the liability of each Obligor shall continue as if the payment, discharge,
avoidance or reduction had not occurred; and

 
 
(b)
each Finance Party shall be entitled to recover the value or amount of that
security or payment from each Obligor, as if the payment, discharge, avoidance
or reduction had not occurred.

 
20.4
Waiver of defences

The obligations of each Guarantor under this Clause 20 will not be affected by
an act, omission, matter or thing which, but for this Clause, would reduce,
release or prejudice any of its obligations under this Clause 20 (without
limitation and whether or not known to it or any Finance Party) including:
 
 
(a)
any time, waiver or consent granted to, or composition with, any Obligor or
other person;

 
 
(b)
the release of any other Obligor or any other person under the terms of any
composition or arrangement with any creditor of any member of the Group;

 
 
 
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(c)
the taking, variation, compromise, exchange, renewal or release of, or refusal
or neglect to perfect, take up or enforce, any rights against, or security over
assets of, any Obligor or other person or any non-presentation or non-observance
of any formality or other requirement in respect of any instrument or any
failure to realise the full value of any security;

 
 
(d)
any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of an Obligor or any other
person;

 
 
(e)
any amendment, novation, supplement, extension (whether of maturity or
otherwise) or restatement (in each case however fundamental and of whatsoever
nature, and whether or not more onerous) or replacement of a Finance Document or
any other document or security;

 
 
(f)
any unenforceability, illegality or invalidity of any obligation of any person
under any Finance Document or any other document or security; or

 
 
(g)
any insolvency or similar proceedings.

 
20.5
Guarantor Intent

Without prejudice to the generality of Clause 20.4 (Waiver of Defences), each
Guarantor expressly confirms that it intends that this guarantee shall extend
from time to time to any (however fundamental and of whatsoever nature and
whether or not more onerous) variation, increase, extension or addition of or to
any of the Finance Documents and/or any facility or amount made available under
any of the Finance Documents for the purposes of or in connection with any of
the following: acquisitions of any nature; increasing working capital; enabling
investor distributors to be made; carrying out restructurings; refinancing
existing facilities; refinancing any other indebtedness; making facilities
available to new borrowers; any other variation or extension of the purposes for
which any such facility or amount might be made available from time to time; and
any fees, costs and/or expenses associated with any of the foregoing.
 
20.6
Immediate recourse

Each Guarantor waives any right it may have of first requiring any Finance Party
(or any trustee or agent on its behalf) to proceed against or enforce any other
rights or security or claim payment from any person before claiming from that
Guarantor under this Clause 20.  This waiver applies irrespective of any law or
any provision of a Finance Document to the contrary.
 
20.7
Appropriations

Until all amounts which may become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in full, each
Finance Party (or any trustee or agent on its behalf) may:
 
 
(a)
refrain from applying or enforcing any other moneys, security or rights held or
received by that Finance Party (or any trustee or agent on its behalf) in
respect of those amounts, or apply and enforce the same in such manner and order
as it sees fit (whether against those amounts or otherwise) and no Guarantor
shall be entitled to the benefit of the same; and

 
 
 
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(b)
hold in an interest-bearing suspense account any moneys received from any
Guarantor or on account of any Guarantor's liability under this Clause 20.

 
20.8
Deferral of Guarantors' rights

Until all amounts which may be or become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in full and
unless the Agent otherwise directs, no Guarantor will exercise any rights which
it may have by reason of performance by it of its obligations under the Finance
Documents:
 
 
(a)
to be indemnified by an Obligor;

 
 
(b)
to claim any contribution from any other guarantor of any Obligor's obligations
under the Finance Documents; and/or

 
 
(c)
to take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any rights of the Finance Parties under the Finance Documents or
of any other guarantee or security taken pursuant to, or in connection with, the
Finance Documents by any Finance Party.

 
If a Guarantor receives any benefit, payment or distribution in relation to such
rights it shall hold that benefit, payment or distribution to the extent
necessary to enable all amounts which may be or become payable to the Finance
Parties by the Obligors under or in connection with the Finance Documents to be
repaid in full on trust for the Finance Parties and shall promptly pay or
transfer the same to the Agent or as the Agent may direct for application in
accordance with Clause 32 (Payment mechanics) of this Agreement.
 
20.9
Release of Guarantors' right of contribution

If any Guarantor (a "Retiring Guarantor") ceases to be a Guarantor in accordance
with the terms of the Finance Documents for the purpose of any sale or other
disposal of that Retiring Guarantor then on the date such Retiring Guarantor
ceases to be a Guarantor:
 
 
(a)
that Retiring Guarantor is released by each other Guarantor from any liability
(whether past, present or future and whether actual or contingent) to make a
contribution to any other Guarantor arising by reason of the performance by any
other Guarantor of its obligations under the Finance Documents; and

 
 
(b)
each other Guarantor waives any rights it may have by reason of the performance
of its obligations under the Finance Documents to take the benefit (in whole or
in part and whether by way of subrogation or otherwise) of any rights of the
Finance Parties under any Finance Document or of any other security taken
pursuant to, or in connection with, any Finance Document where such rights or
security are granted by or in relation to the assets of the Retiring Guarantor.

 
20.10
Additional security

This guarantee is in addition to and is not in any way prejudiced by any other
guarantee or security now or subsequently held by any Finance Party.
 
 
 
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20.11
Limitations

 
(a)
Any term or provision of this Clause 20.11 or any other term in this Agreement
or any Finance Document notwithstanding, the maximum aggregate amount of the
obligations for which any U.S. Guarantor shall be liable under this Agreement
shall in no event exceed an amount equal to the largest amount that would not
render such U.S. Guarantor's obligations under this Agreement, subject to
avoidance under applicable United States federal or state fraudulent conveyance
laws.

 
 
(b)
Flexsys Indústria e Comércio Ltda expressly waives any right or benefit it may
have under articles 827, 835, 837 and 838 of the Brazilian Civil Code in
connection with the guarantee and indemnity granted under this Clause 20.

 
 
(c)
If the guarantee and indemnity granted in this Clause 20 (Guarantee and
Indemnity) (the "Guarantee") is given by a Guarantor incorporated in Germany in
the legal form of (i) a limited liability company (Gesellschaft mit beschränkter
Haftung (GmbH)) (a "German GmbH Guarantor") or (ii) a limited partnership
(Kommanditgesellschaft) with a limited liability company as sole general partner
(a "German GmbH & Co. KG Guarantor" and together with the German GmbH Guarantor
referred to as the "German Guarantor"; a reference made in this paragraph (c) to
the "Relevant Limitation Company" shall, in case of a German GmbH Guarantor,
refer to the relevant German Guarantor and, in case of a German GmbH & Co. KG
Guarantor, refer to the German Guarantor's general partner), the following shall
apply:

 
 
(i)
The Finance Parties shall be entitled to enforce the Guarantee against the
relevant German Guarantor without limitation in respect of:

 
 
(A)
all and any amounts which are owed under the Finance Documents by such German
Guarantor itself or by any of its Subsidiaries; and

 
 
(B)
all and any amounts which correspond to funds that have been borrowed under this
Agreement or financial accommodation provided in connection with a Letter of
Credit, in each case to the extent on-lent, or issued for the benefit of, the
relevant German Guarantor or any of its Subsidiaries, or for the benefit of any
of their creditors and in each case not repaid and outstanding from time to
time.

 
(in aggregate, the "Unlimited Enforcement Amount").
 
 
(ii)
If the German Guarantor's liability under the Guarantee exceeds the Unlimited
Enforcement Amount applicable to such German Guarantor, the Finance Parties
shall not be entitled to enforce the Guarantee against such German Guarantor in
excess of the Unlimited Enforcement Amount if and to the extent that:

 
 
(A)
the Guarantee secures the obligations of an Obligor which is (a) a shareholder
of the German Guarantor or (b) an affiliated company

 
 
 
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(verbundenes Unternehmen) within the meaning of section 15 of the German Stock
Corporation Act (Aktiengesetz) of a shareholder of the German Guarantor (other
than the German Guarantor and its Subsidiaries); and

 
 
(B)
the enforcement would have the effect of (a) reducing the Relevant Limitation
Company's net assets (Reinvermögen) (the "Net Assets") to an amount of less than
the Relevant Limitation Company's stated share capital (Stammkapital) or, if the
Net Assets are already an amount of less than the Relevant Limitation Company's
stated share capital, of causing such amount to be further reduced and (b) would
thereby affect the assets required for the obligatory preservation of the
Relevant Limitation Company's stated share capital (Stammkapital) according to
section 30, 31 German Limited Liability Companies Act (Gesetz betreffend die
Gesellschaften mit beschränkter Haftung) provided that the amount of the stated
share capital to be taken into consideration shall be the amount registered in
the commercial register at the date hereof, and any increase of the stated share
capital registered after the date of this Agreement provided that such increase
shall only be taken into account (i) if such increase is not subject to any
consent under the terms of this Agreement; or (ii) if such increase is subject
to any consent under the terms of this Agreement, such consent has been granted
in writing prior to effecting the increase of the stated share capital.

 
 
(iii)
The Net Assets shall be calculated as an amount equal to the sum of the values
of the Relevant Limitation Company 's assets (consisting of all assets which
correspond to the items set forth in section 266 sub-section (2) A, B and C of
the German Commercial Code (Handelsgesetzbuch) less the aggregate amount of the
Relevant Limitation Company's liabilities (consisting of all liabilities and
liability reserves which correspond to the items set forth in section 266
sub-section (3) B, C and D of the German Commercial Code), save that:

 
 
(A)
any asset that is shown in the balance sheet with a book value (Buchwert) that
is significantly lower than the market value of such asset and that is not
necessary for the Relevant Limitation Company's business (nicht
betriebsnotwendig) shall be taken into account with its market value;

 
 
(B)
obligations under loans provided to the Relevant Limitation Company by any
member of the Group or any other affiliated company shall not be taken into
account as liabilities; and

 
 
(C)
obligations under loans or other contractual liabilities incurred by the
Relevant Limitation Company in violation of the provisions of the Finance
Documents shall not be taken into account as liabilities.

 
 
 
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The Net Assets shall be determined in accordance with the generally accepted
accounting principles applicable from time to time in Germany (Grundsätze
ordnungsmäßiger Buch-führung) and be based on the same principles that were
applied by the German Guarantor in the preparation of its most recent annual
balance sheet (Jahresbilanz).

 
 
(iv)
The limitations set out in paragraph (ii) above shall only apply if the German
Guarantor delivers to the Agent, without undue delay but not later than within 3
months after receipt of a request for payment under the Guarantee by the Agent,
an up to date balance sheet prepared by a firm of auditors of international
standard and reputation which shows the value of the Relevant Limitation
Company's Net Assets (the "Balance Sheet"). The Balance Sheet shall be prepared
in accordance with the principles set out in paragraph (iii) above and shall
contain reasonable details relating to items to be adjusted pursuant to
paragraph (iii) above.

 
 
If the German Guarantor fails to deliver a Balance Sheet within the
aforementioned time period, the Finance Parties shall be entitled to enforce the
Guarantee irrespective of the limitations set out in paragraph (ii) above.

 
 
(v)
If the Finance Parties disagree with the Balance Sheet, they shall be entitled
to enforce the Guarantee up to the amount which, according to the Balance Sheet,
can be enforced in compliance with the limitations set out in paragraph (ii)
above. In relation to any additional amounts for which the German Guarantor is
liable under the Guarantee, the Finance Parties shall be entitled to further
pursue their claims (if any) and the relevant German Guarantor shall be entitled
to prove that this amount is necessary for maintaining the Relevant Limitation
Company's stated share capital (calculated as of the date the demand under the
Guarantee was made).

 
 
(vi)
No reduction of the amount enforceable under this paragraph (c) of Clause 20.11
(Limitations) will prejudice the right of the Finance Parties to continue
enforcing the Guarantee (subject always to the operation of the limitations set
out above at the time of such enforcement) until full satisfaction to the claims
guaranteed.

 
 
(d)
Notwithstanding any other provision of this Clause 20 (Guarantee and Indemnity)
the guarantee, indemnity and other obligations of any Obligor expressed to be
assumed in this Clause 20 (Guarantee and Indemnity) shall be deemed not to be
assumed by such Obligor to the extent that the same would constitute unlawful
financial assistance within the meaning of any applicable financial assistance
rules under any Relevant Jurisdiction (the "Prohibition") and the provisions of
this Agreement and the other Finance Documents shall be construed accordingly.
For the avoidance of doubt it is expressly acknowledged that the relevant
Obligor will continue to guarantee all such obligations which, if included, do
not constitute a violation of the Prohibition.

 
 
 
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(e)
Flexsys Indústria e Comércio Ltda. acknowledges and agrees that the lawful
currency of the United States of America or any Optional Currency under this
Agreement shall be the currency of account in any and all events, and guarantees
that the obligations will be paid in the lawful currency of the United States of
America or any Optional Currency, as applicable, in accordance with the terms
and provisions of this Agreement and the Finance Documents, regardless of any
law, regulation or decree now or hereafter in effect in Brazil that might in any
manner affect the Secured Obligations, the Security Documents or the rights of
the Secured Parties with respect thereto as against Flexsys Indústria e Comércio
Ltda., or cause or permit to be invoked any alteration in the time, amount or
manner of payment by Flexsys Indústria e Comércio Ltda. of any of or all the
Secured Obligations.  Further to and without limiting the currency indemnities
set forth in Section 17.1 of this Agreement, and any other indemnity,
reimbursement or liability set forth under the Finance Documents, Flexsys
Indústria e Comércio Ltda. shall (i) at all times comply with, and perform such
acts as may be required by Brazilian law, including all laws relating to (A)
dealings with public officials and (B) foreign exchange, Brazilian Central Bank
and Federal Revenue Office regulations (as from time to time amended), in order
to preserve and maintain the validity, perfection and enforceability of the
Security Documents to which it is a party as well as the Secured Obligations.

 
 
(f)
In relation to any member of the Group which becomes a Guarantor after the date
of this Agreement, this Guarantee is also subject to any limitations set out in
the Accession Letter application to that Guarantor.

 
 
 
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SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
 
 
21.
REPRESENTATIONS

 
Each Obligor in respect of itself only, and the Company in respect of itself and
each other member of the Group (and, in the case of the Company, references in
this Clause 21 to "it" or “its shall be to the Company on behalf of itself and
in respect of each Obligor) makes the representations and warranties set out in
this Clause 21 to each Finance Party on the date of this Agreement.
 
21.1
Status

 
(a)
In the case of each Obligor other than Flexsys America L.P., it is a
corporation, duly incorporated and validly existing under the law of its
jurisdiction of incorporation.

 
 
(b)
In the case of Flexsys America L.P., it is a limited partnership, duly formed
and validly existing under the laws of the State of Delaware, United States of
America.

 
 
(c)
In the case of Flexsys Indústria e Comércio Ltda, it is a limited liability
company (sociedade limitada) duly incorporated and validly existing under the
laws of Brazil.

 
 
(d)
It has the power to own its assets and carry on its business as it is being
conducted.

 
21.2
Binding obligations

The obligations expressed to be assumed by it in each Finance Document are,
subject to the Reservations and to any applicable Perfection Requirements,
legal, valid, binding and enforceable obligations.
 
21.3
Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by,
the Finance Documents do not and will not conflict with:
 
 
(a)
any law or regulation applicable to it;

 
 
(b)
its constitutional documents; or

 
 
(c)
any agreement or instrument binding upon it or any of its assets other than
under the Existing Facility up to and including the first Utilisation Date.

 
21.4
Power and authority

It has the power to enter into, perform and deliver, and has taken all necessary
action to authorise its entry into, performance and delivery of, the Finance
Documents to which it is a party and the transactions contemplated by those
Finance Documents.
 
 
 
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21.5
Validity and admissibility in evidence

All Authorisations required:
 
 
(a)
to enable it lawfully to enter into, exercise its rights and comply with its
obligations in the Finance Documents to which it is a party; and

 
 
(b)
to make the Finance Documents to which it is a party admissible in evidence in
each Relevant Jurisdiction subject to any Reservation,

 
have been obtained or effected and are in full force and effect.
 
21.6
Governing law and enforcement

 
(a)
Subject to any applicable Reservations, the choice of governing law of each of
the Finance Documents will be recognised and enforced in each Relevant
Jurisdiction, other than as specifically referred to in any legal opinion
delivered pursuant to Clause 4 (Conditions of Utilisation) or Clause 27 (Changes
to the Obligors).

 
 
(b)
Subject to any applicable Reservations, any judgment obtained in the
jurisdiction whose laws are expressed to govern a Finance Document will be
recognised and enforced in each Relevant Jurisdiction applicable to the
governing law or jurisdiction of incorporation of relevant parties to or assets
specifically secured by that Finance Document.

 
21.7
No filing taxes

Under the law of each Relevant Jurisdiction it is not necessary that the Finance
Documents be filed, recorded or enrolled with any court or other authority in
that jurisdiction or that any registration, stamp or similar tax be paid on or
in relation to the Finance Documents or the transactions contemplated by the
Finance Documents, other than in connection with Perfection Requirements or as
specifically referred to in any legal opinion delivered pursuant to Clause 4
(Conditions of Utilisation) or Clause 27 (Changes to the Obligors).
 
21.8
No default

 
(a)
No Event of Default is continuing or might be reasonably likely to result from
the making of any Utilisation.

 
 
(b)
No other event or circumstance is outstanding which constitutes a default under
any other agreement or instrument which is binding on it or any of its
Subsidiaries or to which its (or its Subsidiaries') assets are subject which
might be reasonably likely to have a Material Adverse Effect.

 
21.9
No misleading information

 
(a)
Any written factual information provided by any member of the Group for the
purposes of the Information Memorandum was true and accurate in all material
respects as at the date it was provided or as at the date (if any) at which it
is stated.

 
 
 
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(b)
The financial projections contained in the Information Memorandum have been
prepared on the basis of recent historical information and on the basis of
reasonable assumptions.

 
 
(c)
Nothing has occurred or been omitted from the Information Memorandum and no
information has been given or withheld that results in the information contained
in the Information Memorandum being untrue or misleading in any material respect
and nothing has been omitted from the Information Memorandum which, if
disclosed, might adversely affect the decision of a person considering whether
to enter into this Agreement.

 
 
(d)
Since the date of the Information Memorandum, no event has occurred which has
had or might reasonably be likely to have a Material Adverse Effect.

 
 
(e)
All material information (other than the Information Memorandum) supplied by any
member of the Group under or in connection with any Finance Document is true,
complete and accurate in all material respects as at the date it was given and
is not misleading in any material respect and all information which, if
disclosed, might materially adversely affect the decision of a person
considering whether to enter into this Agreement, has been disclosed.

 
21.10
Financial statements

 
(a)
The Original Financial Statements were prepared in accordance with GAAP,
consistently applied unless expressly disclosed to the Agent in writing to the
contrary before the date of this Agreement.

 
 
(b)
Its Original Financial Statements fairly represent its financial condition and
operations (or the financial condition and operations of the Group, in the case
of the Company) during the relevant financial year unless expressly disclosed to
the Agent in writing to the contrary before the date of this Agreement.

 
 
(c)
There has been no material adverse change in its financial condition (or the
combined financial condition of the Group, in the case of the Company) since the
date of the Original Financial Statements.

 
21.11
Pari passu ranking
Its payment obligations under the Finance Documents rank at least pari passu
with the claims of all its other unsecured and unsubordinated creditors, except
for obligations mandatorily preferred by law applying to companies generally.

 
21.12
No proceedings pending or threatened
Save as disclosed in the Information Memorandum, no litigation, arbitration or
administrative proceedings (including, for the avoidance of doubt, insolvency or
similar proceedings) of or before any court, arbitral body or agency which, if
adversely determined, might reasonably be likely to have a Material Adverse
Effect have (to the best of its knowledge and belief) been started or threatened
against it or any of its Subsidiaries, other than as specifically referred to in
any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation) or
Clause 27 (Changes to the Obligors).

 
 
 
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21.13
Environmental compliance
Save as disclosed in the Information Memorandum, each member of the Group has
performed and observed in all material respects all Environmental Law,
Environmental Permits and all other material covenants, conditions, restrictions
or agreements directly or indirectly concerned with any contamination, pollution
or waste or the release or discharge of any toxic or hazardous substance in
connection with any real property which is or was at any time owned, leased or
occupied by any member of the Group or on which any member of the Group has
conducted any activity where failure to do so might reasonably be likely to have
a Material Adverse Effect.
 

 
21.14
Environmental Claims
Save as disclosed in the Information Memorandum, no Environmental Claim has been
commenced or (to the best of its knowledge and belief) is threatened against any
member of the Group where that claim might be reasonably likely, if determined
against that member of the Group to have a Material Adverse Effect.

 
21.15
Taxation

 
(a)
It has duly and punctually paid and discharged all Taxes imposed upon it or its
assets within the time period allowed without incurring penalties (save to the
extent that (i) payment is being contested in good faith, (ii) it has maintained
adequate reserves for those Taxes and (iii) payment can be lawfully withheld).

 
 
(b)
It is not materially overdue in the filing of any Tax returns.

 
 
(c)
No claims are being or are reasonably likely to be asserted against it with
respect to Taxes.

 
 
(d)
It has properly filed or caused to be filed (and, where applicable, has been
included in) all material U.S. Tax returns, reports and statements (whether
federal, state, local or otherwise) applicable to it in all jurisdictions in
which such returns, reports and statements are required to be filed.  All such
U.S. Tax returns are correct and complete in all material respects.

 
 
(e)
It has paid all material U.S. Taxes due whether or not shown on any tax return,
together with applicable interest and penalties, except to the extent such U.S.
Taxes are contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or lien resulting from the non-payment of such
U.S. Taxes and with respect to which adequate reserves have been set aside for
the payment of such U.S. Taxes.

 
21.16
Deduction of Tax
It is not required to make any deduction for or on account of Tax from any
payment it may make under any Finance Document.

 
21.17
No Immunity
In any proceedings taken in a Relevant Jurisdiction in relation to the Finance
Documents, it will not be entitled to claim for itself or any of its assets
immunity from suit, execution, attachment or other legal process.

 
 
 
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21.18
Private and commercial acts
Its execution of the Finance Documents constitutes, and its exercise of its
rights and performance of its obligations hereunder will constitute, private and
commercial acts done and performed for private and commercial purposes.

 
21.19
Security
No Security exists over all or any of the present or future assets of any member
of the Group other than any Security permitted or contemplated under Clause 24.3
(Negative Pledge).

 
21.20
Ranking
Subject to the Reservations and applicable Perfection Requirements, the
Transaction Security has or will have first ranking priority and it is not
subject to any prior ranking or pari passu ranking Security unless purported
otherwise in any Security Documents.

 
21.21
Transaction Security
Subject to the Reservations and applicable Perfection Requirements, each
Security Document to which it is a party validly creates the Security which is
expressed to be created by that Security Document and evidences the Security it
is expressed to evidence.

 
21.22
Good Title to Assets
It has good, valid and marketable title to, or valid leases or licences of, and
all appropriate Authorisations to use, the material assets necessary to carry on
its business as presently conducted.

 
21.23
No disposal of interests
It has not sold or granted (or agreed to sell or grant) any right or pre-emption
over, or any lease or tenancy of or otherwise disposed of any of its interest in
any of the Charged Property.

 
21.24
Legal and Beneficial Owner
It is the absolute legal owner and beneficial owner or the sole beneficial owner
of the assets subject to the Transaction Security and, in the case of assets
that are subject to Security Documents governed by the laws of Germany, may
freely dispose thereof without restrictions.

 
21.25
Shares

 
(a)
The Shares are fully paid and not subject to any option to purchase or similar
rights.  The constitutional documents of companies whose shares are subject to
the Transaction Security do not and could not restrict or inhibit any transfer
of those shares on creation or on enforcement of the Transaction Security.

 
 
(b)
The Shares in Flexsys S.p.A are free and clear of any encumbrance, security
interest, option right (diritto di opzione), pre-emption right (diritto di
prelazione) or any other third-party lien or right, except as created by the
Italian Share Pledge and the Company represents that it has not sold or disposed
of or granted any option or pre-emption right in respect of any of its right,
title and interest in the Charged Portfolio (other than as permitted under the
Secured Contracts).

 
 
 
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(c)
The Shares in Flexsys Indústria e Comércio Ltda. have been duly authorized and
validly issued in compliance with applicable laws and are fully paid in. There
are no outstanding warrants, options, subscriptions, reserved quotas or other
contractual arrangements for the purchase of the Shares, and there are no
outstanding arrangements, preemptive rights, redemption rights or any other
rights or claims of any character relating to the issuance, purchase,
repurchase, redemption, transfer, voting or preemptive rights with respect to
the Shares (which are duly paid in) that restrict the transfer of, require the
issuance of, or otherwise relate to any class of the capital stock of Flexsys
Indústria e Comércio Ltda., in either case that would affect the pledge and
usufruct granted by it under the Brazilian Quota Pledge Agreement.

 
 
(d)
The Charged Portfolio is not subject to foreclosure (pignoramento) or seizure
(sequestro) and there does not exist any restriction on the ability to transfer
or realise all or any part of the Charged Portfolio.

 
21.26
No listed securities
None of the Belgian Obligors has issued listed securities, or is a Subsidiary of
a Belgian company that has issued listed securities.

 
21.27
Group Structure
The Group Structure Chart delivered to the Agent pursuant to Schedule 2
(Conditions Precedent) is true, complete and accurate.

 
21.28
Ownership of the Obligors
Each Obligor (other than Flexsys America L.P., Flexsys Rubber Chemicals Limited
and the Company itself) is a Subsidiary of the Company.

 
21.29
Ownership of the Company
On and from the Akzo Nobel Retirement:

 
 
(a)
Solutia Inc. owns 50 per cent. of the issued ordinary share capital of the
Company and Solutia Europe N.V. owns 50 per cent. of the issued preference share
capital of the Company, with the balance of such issues ordinary shares and
issued preference shares being held by the Company itself;

 
 
(b)
Flexsys America Co and Solutia Inc. own all of the partnership interests of
Flexsys America L.P.; and

 
 
(c)
Solutia UK Capital Limited owns all of the issued share capital of Flexsys
Rubber Chemicals Limited.

 
21.30
Centre of main interests and establishments

 
(a)
Each Obligor listed in Schedule 11 (Centre of Main Interests and Establishments)
has its "centre of main interests" (as that term is used in Article 3(1) of The
Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings
(the "Regulation") as set out in Schedule 11 (Centre of Main Interests and
Establishments).

 
 
 
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(b)
The Original Obligors listed in Schedule 11 (Centre of Main Interests and
Establishments) have an "establishment" (as defined in Article 2(h) of the
Regulation) in the countries set out in Schedule 11 (Centre of Main Interests
and Establishments).

 
21.31
Akzo Nobel Retirement
The Akzo Nobel Retirement is legally valid and enforceable and is in compliance
with all laws and legal requirements in each Relevant Jurisdiction.

 
21.32
ERISA Plans

 
(a)
Each Employee Plan is in compliance in form and operation with ERISA and the
Code and all other applicable laws and regulations save where any failure to
comply would not reasonably be expected to have a Material Adverse Effect.

 
 
(b)
Each Employee Plan which is intended to be qualified under Section 401(a) of the
Code has been determined by the IRS to be so qualified or is in the process of
being submitted to the IRS for approval or will be so submitted during the
applicable remedial amendment period, and, nothing has occurred since the date
of such determination that would adversely affect such determination (or, in the
case of an Employee Plan with no determination, nothing has occurred that would
materially adversely affect such qualification).

 
 
(c)
There exists no Unfunded Pension Liability with respect to Employee Plans in the
aggregate, taking into account only Employee Plans with positive Unfunded
Pension Liability, except as would not have a Material Adverse Effect.

 
 
(d)
There are no actions, suits or claims pending against or involving an Employee
Plan (other than routine claims for benefits) or, to the knowledge of the
Borrowers, any U.S. Obligor or any ERISA Affiliate, threatened, which would
reasonably be expected to be asserted successfully against any Employee Plan
and, if so asserted successfully, would reasonably be expected either singly or
in the aggregate to have a Material Adverse Effect.

 
 
(e)
Each U.S. Obligor and any ERISA Affiliate has made all material contributions to
or under each such Employee Plan required by law within the applicable time
limits prescribed thereby, the terms of such Employee Plan, or any contract or
agreement requiring contributions to an Employee Plan save where any failure to
comply would not reasonably be expected to have a Material Adverse Effect.

 
 
(f)
Neither any U.S. Obligor nor any ERISA Affiliate has ceased operations at a
facility so as to become subject to the provisions of Section 4068(a) of ERISA,
withdrawn as a substantial employer so as to become subject to the provisions of
Section 4063 of ERISA or ceased making contributions to any Employee Plan
subject to Section 4064(a) of ERISA to which it made contributions.

 
 
(g)
Neither any U.S. Obligor nor any ERISA Affiliate has incurred or reasonably
expects to incur any liability to PBGC save for any liability for premiums due
in the ordinary course or other liability which would not reasonably be expected
to have a Material Adverse Effect.

 
 
 
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21.33
Pensions

 
 
(a)
No UK Obligor is or has at any time been an employer (for the purpose of
sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme
which is not a money purchase scheme (both terms as defined in the Pension
Schemes Act 1993) save in respect of the Flexsys Rubber Chemicals Retirement
Benefits Scheme.

 
 
(b)
No UK Obligor is or has at any time been "connected" with or an "associate" of
(as those terms are used in sections 39 and 43 of the Pensions Act 2004) such an
employer.

 
 
(c)
No member of the Group has any Multiemployer Plan and no member of the Group
will acquire or establish a Multiemployer Plan.

 
21.34
Financial assistance

 
(a)
The provision of guarantees and security required under the Finance Documents do
not constitute unlawful financial assistance or breach any similar laws in any
jurisdiction.

 
 
(b)
The proceeds of the Facilities have not been and will not be used to finance or
refinance the acquisition of or subscription for shares in any member of the
Group other than in connection with the Akzo Nobel Retirement.

 
 
(c)
The acquisition of shares in connection with the Akzo Nobel Retirement will be
performed in compliance with all relevant laws.

 
21.35
Federal Reserve Regulations

 
(a)
No Obligor is engaged or will engage, principally or as one of its important
activities, in the business of purchasing or carrying Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.

 
 
(b)
None of the proceeds of the Loans or other extensions of credit under this
Agreement will be used, directly or indirectly, for the purpose of buying or
carrying any Margin Stock, for the purpose of reducing or retiring any Financial
Indebtedness that was originally incurred to buy or carry any Margin Stock or
for any other purpose which might cause all or any Loans or other extensions of
credit under this Agreement to be considered a "purpose credit" within the
meaning of Regulation U or Regulation X.

 
21.36
Investment Companies
No Obligor, person controlling an Obligor or Subsidiary of an Obligor is or is
required to be registered as an "investment company" under the U.S. Investment
Company Act of 1940 (the "1940 Act").

 
21.37
Anti-Terrorism Laws

 
(a)
To the best of the Obligors' knowledge, no Obligor nor any Affiliate thereof:
(i) is, or is controlled by, a Restricted Party; (ii) has received funds or
other property from a Restricted Party; or (iii) is in breach of or is the
subject of any action or investigation under any Anti-Terrorism Law.

 
 
 
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(b)
Each Obligor and, to the best of the Obligors' knowledge, each Affiliate thereof
has taken reasonable measures to ensure compliance with the Anti-Terrorism Laws.

 
21.38
Germany money laundering
Each German Borrower is the beneficiary (within the meaning of section 8 of the
German Money Laundering Act (Gesetz über das Aufspüren von Gewinnen aus schweren
Straftaten Geldwäschegesetz) for each Loan made or to be made available to it.

 
 

21.39
Flexsys Chemicals (M) Sdn. Bhd.

 
(a)
Flexsys Chemicals (M) Sdn. Bhd. is not connected with any director of any
Borrower of which it is not a Subsidiary.

 
 
(b)
No director of any Borrower of which Flexsys Chemical (M) Sdn. Bhd. is not a
Subsidiary holds 15 per cent or more of the issued Shares in Flexsys Chemicals
(M) Sdn. Bhd..

 
 
(c)
Flexsys Chemicals (M) Sdn. Bhd. is not accustomed to act (nor is it under an
obligation to act) in accordance with the directions, instructions or wishes of
a director of any Borrower of which it is not a Subsidiary.

 
21.40
On-lending

 
(a)
Each Obligor confirms that there is a corporate benefit in it fulfilling its
obligations under this Agreement.

 
 
(b)
Flexsys Chemicals (M) Sdn. Bhd. ("Flexsys Malaysia") has no domestic borrowings
in Malaysia and as and when the need arises and/or to comply with any condition
which may be imposed by the FIC, either a Borrower shall advance funds from the
Facilities to Flexsys Malaysia as inter-company loans or Flexsys Malaysia shall
borrow hereunder in either case to fund its business operations in Malaysia.

 
21.41
Initial Utilisation
The initial Utilisation will be performed in accordance with the Funds Flow
Statement provided in satisfaction of the condition precedent contained in Part
8(d) of Schedule 2 (Conditions Precedent) of this Agreement.

 
 

21.42
No cluster bombs or anti-personnel mines
None of the Borrowers and none of their Subsidiaries carries out activities
related to manufacturing, use, repair, exhibition for sale, sale, import,
export, stockpiling or transport of cluster bombs, submunitions or
anti-personnel mines.

 
 

21.43
Repetition
The Repeating Representations are deemed to be made by the Company (on its own
behalf and on behalf of each other Obligor) (by reference to the facts and
circumstances then existing) on:

 
 
(a)
the date of each Utilisation Request and the first day of each Interest Period;
and

 
 
(b)
in the case of an Additional Obligor, the day on which the company becomes (or
it is proposed that the company becomes) an Additional Obligor.

 
 
 
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22.
INFORMATION UNDERTAKINGS
The undertakings in this Clause remain in force from the date of this Agreement
for so long as any amount is outstanding under the Finance Documents or any
Commitment is in force.

 
22.1
Financial statements
The Company shall supply to the Agent in sufficient copies for all the Lenders:

 
 
(a)
as soon as the same become available, but in any event within 120 days for
sub-paragraph (i) below and 180 days for sub-paragraph (ii) below after the end
of each of its financial years:

 
 
(i)
the audited Combined Financial Statements of the Group for that financial year;
and

 
 
(ii)
the audited financial statements of each Obligor for that financial year; and

 
 
(b)
as soon as the same become available, but in any event within 45 days after the
end of each quarter of each of its financial years:

 
 
(i)
the Combined Financial Statements for that period; and

 
 
(ii)
the financial statements of each Obligor for that period.

 
22.2
Compliance Certificate

 
(a)
The Company shall supply to the Agent, with each set of financial statements
delivered pursuant to paragraph (a)(i) or (b)(i) of Clause 22.1 (Financial
statements), a Compliance Certificate setting out (in reasonable detail)
computations as to compliance with Clause 23 (Financial Covenants) as at the
date as at which those financial statements were drawn up.

 
 
(b)
Each Compliance Certificate shall be signed by two directors of the Company.

 
22.3
Requirements as to financial statements

 
(a)
The Company shall procure that each set of financial statements for each Obligor
and for the Group delivered pursuant to Clause 22.1 (Financial statements) is
prepared using GAAP (or local GAAP as applicable) and that in each case
accounting practices and financial reference periods are materially consistent
with those applied in the preparation of the Original Financial Statements for
that Obligor and the Group, as applicable, unless, in relation to any set of
financial statements, it notifies the Agent that there has been a material
change in GAAP (or Local GAAP, as applicable), or the accounting practices or
reference periods and its auditors (or, if appropriate, the auditors of the
member of the Group) deliver to the Agent:

 
 
(i)
a description of any material change necessary for those financial statements to
reflect the GAAP, accounting practices and reference periods upon which that
Obligor's or the Group's (as applicable) Original Financial Statements were
prepared; and

 

 
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(ii)
sufficient information, in form and substance as may be reasonably required by
the Agent, to enable the Lenders to determine whether Clause 23 (Financial
Covenants) has been complied with and make an accurate comparison between the
financial position indicated in those financial statements and that Obligor's or
the Group's Original Financial Statements, as applicable.

 
 
(b)
If the Company notifies the Agent of a change in accordance with paragraph (i)
above then the Company and Agent shall enter into negotiations in good faith
with a view to agreeing:

 
 
(i)
whether or not the change might result in any material alteration in the
commercial effect of any of the terms of this Agreement; and

 
 
(ii)
if so, any amendments to this Agreement which may be necessary to ensure that
the change does not result in any material alteration in the commercial effect
of those terms

 
 
 
and if any amendments are agreed they shall take effect and be binding on each
of the Parties in accordance with their terms.
 
Any reference in this Agreement to those financial statements shall be construed
as a reference to those financial statements as adjusted to reflect the basis
upon which the Original Financial Statements were prepared.

 
 
(c)
The Combined Financial Statements prepared for the purposes of Clause 23
(Financial Covenants) and the covenant calculations shall be prepared using GAAP
and in the event of there being any material change in GAAP or the accounting
practices applied or reference periods used or its auditors, the provisions of
paragraph (b) of this Clause 22.3 shall apply mutatis mutandis.

 
22.4
ERISA-Related Information

The Company shall supply to the Agent (in sufficient copies for all the Lenders,
if the Agent so requests):
 
 
(a)
promptly and in any event within 15 days after any U.S. Obligor or any ERISA
Affiliate files a Schedule B (or such other schedule as contains actuarial
information) to IRS Form 5500 in respect of an Employee Plan with Unfunded
Pension Liabilities, a copy of such IRS Form 5500 (including the Schedule B);

 
 
(b)
promptly and in any event within 30 days after any U.S. Obligor or any ERISA
Affiliate knows or has reason to know that any ERISA Event which, individually
or when aggregated with any other ERISA Event, would reasonably be expected to
have a Material Adverse Effect has occurred, the written statement of the Chief
Financial Officer of such U.S. Obligor or ERISA Affiliate, as applicable,
describing such ERISA Event and the action, if any, which it proposes to take
with respect to such ERISA Event and a copy of any notice filed with the PBGC or
the IRS pertaining to such ERISA Event; provided that, in the case of ERISA
Events under paragraph (d) of the definition thereof, the 30-day period set
forth above shall be a 10-day period,

 
 
 
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and, in the case of ERISA Events under paragraph (b) of the definition thereof,
in no event shall notice be given later than the occurrence of the ERISA Event;
and

 
 
(c)
promptly, and in any event within thirty days, after becoming aware that there
has been (i) a material increase in Unfunded Pension Liabilities, taking into
account only Employee Plans with positive Unfunded Pension Liabilities; (ii) the
existence of potential withdrawal liability under Section 4201 of ERISA, if the
Parent and its ERISA Affiliates were to completely or partially withdraw from
all Multiemployer Plans; (iii) the adoption of, or the commencement of
contributions to, any Employee Plan subject to Section 412 of the Code by any
Obligor or any ERISA Affiliate; or (iv) the adoption of any amendment to an
Employee Plan subject to Section 412 of the Code which results in a material
increase in contribution obligations of any Obligor, a detailed written
description thereof from the Chief Financial Officer of each affected U.S.
Obligor or ERISA Affiliate, as applicable.

 
22.5
Information: miscellaneous
The Company shall supply to the Agent (in sufficient copies for all the Lenders,
if the Agent so requests):

 
 
(a)
all documents dispatched by the Company to its shareholders (or any class of
them) or its creditors generally at the same time as they are dispatched;

 
 
(b)
promptly upon becoming aware of them, the details of any litigation, arbitration
or administrative proceedings which are current, threatened or pending against
any member of the Group, and which might, if adversely determined, be reasonably
likely to have a Material Adverse Effect; and

 
 
(c)
promptly, such further information regarding the financial condition, business
and operations of any member of the Group as any Finance Party (through the
Agent) may reasonably request (including, but not limited to, such information
required under sections 13, 13a and 18 of the German Banking Act
(Kreditwesengesetz)) but so that prior to a Default, no more than one request
may be made in any three month period.

 
22.6
Notification of default

 
(a)
Each Obligor shall notify the Agent of any Default (and the steps, if any, being
taken to remedy it) promptly upon becoming aware of its occurrence (unless that
Obligor is aware that a notification has already been provided by another
Obligor).

 
 
(b)
Promptly upon a request by the Agent, the Company shall supply to the Agent a
certificate signed by two of its directors or senior officers on its behalf
certifying that to the best of their knowledge after due and careful enquiry no
Default is continuing (or if a Default is continuing, specifying the Default and
the steps, if any, being taken to remedy it).

 
 
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22.7
Use of websites

 
(a)
The Company may satisfy its obligation under this Agreement to deliver any
information in relation to those Lenders ( the "Website Lenders") who accept
this method of communication by posting this information onto an electronic
website designated by the Company and the Agent (the "Designated Website") if:

 
 
(i)
the Agent expressly agrees (after consultation with each of the Lenders) that it
will accept communication of the information by this method;

 
 
(ii)
both the Company and the Agent are aware of the address of and any relevant
password specifications for the Designated Website; and

 
 
(iii)
the information is in a format previously agreed between the Company and the
Agent.

 
If any Lender (a "Paper Form Lender") does not agree to the delivery of
information electronically then the Agent shall notify the Company accordingly
and the Company shall supply the information to the Agent (in sufficient copies
for each Paper Form Lender) in paper form.  In any event the Company shall
supply the Agent with at least one copy in paper form of any information
required to be provided by it.
 
 
(b)
The Agent shall supply each Website Lender with the address of and any relevant
password specifications for the Designated Website following designation of that
website by the Company and the Agent.

 
 
(c)
The Company shall promptly upon becoming aware of its occurrence notify the
Agent if:

 
 
(i)
the Designated Website cannot be accessed due to technical failure;

 
 
(ii)
the password specifications for the Designated Website change;

 
 
(iii)
any new information which is required to be provided under this Agreement is
posted onto the Designated Website;

 
 
(iv)
any existing information which has been provided under this Agreement and posted
onto the Designated Website is amended; or

 
 
(v)
the Company becomes aware that the Designated Website or any information posted
onto the Designated Website is or has been infected by any electronic virus or
similar software.

 
If the Company notifies the Agent under paragraph (c)(i) or paragraph (c)(v)
above, all information to be provided by the Company under this Agreement after
the date of that notice shall be supplied in paper form unless and until the
Agent and each Website Lender is satisfied that the circumstances giving rise to
the notification are no longer continuing.
 
 
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(d)
Any Website Lender may request, through the Agent, one paper copy of any
information required to be provided under this Agreement which is posted onto
the Designated Website.  The Company shall comply with any such request within
ten Business Days.

 
22.8
"Know your customer" checks

 
 
(a)
If:

 
 
(i)
the introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation made after the date of this Agreement;

 
 
(ii)
any change in the status or the shareholders of an Obligor after the date of
this Agreement; or

 
 
(iii)
a proposed assignment or transfer by a Lender of any of its rights and
obligations under this Agreement to a party that is not a Lender prior to such
assignment or transfer,

 
obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any
prospective new Lender) to comply with "know your customer" or similar
identification procedures in circumstances where the necessary information is
not already available to it, each Obligor shall promptly upon the request of the
Agent or any Lender supply, or procure the supply of, such documentation and
other evidence as is reasonably requested by the Agent (for itself or on behalf
of any Lender) or any Lender (for itself or, in the case of the event described
in paragraph (iii) above, on behalf of any prospective new Lender) in order for
the Agent, such Lender or, in the case of the event described in paragraph (iii)
above, any prospective new Lender to carry out and be satisfied it has complied
with all necessary "know your customer" or other similar checks under all
applicable laws and regulations pursuant to the transactions contemplated in the
Finance Documents.
 
 
(b)
Each Lender shall promptly upon the request of the Agent supply, or procure the
supply of, such documentation and other evidence as is reasonably requested by
the Agent (for itself) in order for the Agent to carry out and be satisfied it
has complied with all necessary "know your customer" or other similar checks
under all applicable laws and regulations pursuant to the transactions
contemplated in the Finance Documents.

 
 
(c)
The Company shall, by not less than 10 Business Days' prior written notice to
the Agent, notify the Agent (which shall promptly notify the Lenders) of its
intention to request that one of its Subsidiaries becomes an Additional Obligor
pursuant to Clause 27 (Changes to the Obligors).

 
 
(d)
Following the giving of any notice pursuant to paragraph (c) above, if the
accession of such Additional Obligor obliges the Agent or any Lender to comply
with "know your customer" or similar identification procedures in circumstances
where the necessary information is not already available to it, the

 
 
 
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Company shall promptly upon the request of the Agent or any Lender supply, or
procure the supply of, such documentation and other evidence as is reasonably
requested by the Agent (for itself or on behalf of any Lender) or any Lender
(for itself or on behalf of any prospective new Lender) in order for the Agent
or such Lender or any prospective new Lender to carry out and be satisfied it
has complied with all necessary "know your customer" or other similar checks
under all applicable laws and regulations pursuant to the accession of such
Subsidiary to this Agreement as an Additional Obligor.

 
 
23.
FINANCIAL COVENANTS

 
23.1
Financial definitions

In this Clause 23.1:
 
"Acquisition Costs" means all non-periodic fees, costs and expenses, stamp,
registration and other Taxes incurred by the Company or any other member of the
Group in connection with the Akzo Nobel Retirement.
 
"Borrowings" means, at any time, the outstanding principal, capital or nominal
amount and any fixed or minimum premium payable on prepayment or redemption of
any indebtedness for or in respect of:
 
 
(a)
moneys borrowed and debit balances with financial institutions;

 
 
(b)
any amount raised by acceptance under any acceptance credit facility;

 
 
(c)
any amount raised pursuant to any note purchase facility or the issue of bonds,
notes, debentures, loan stock or any similar instrument;

 
 
(d)
the amount of any liability in respect of any lease or hire purchase contract
which would, in accordance with GAAP, be treated as a finance or capital lease;

 
 
(e)
receivables sold or discounted (other than any receivables to the extent they
are sold on a non-recourse basis);

 
 
(f)
any counter-indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument issued by a bank
or financial institution (excluding any given in respect of trade credit arising
in the ordinary course of business);

 
 
(g)
any amount raised by the issue of redeemable shares which are redeemable before
the Termination Date of each Facility;

 
 
(h)
any amount of any liability under an advance or deferred purchase agreement
arranged primarily as a method of raising finance or financing the acquisition
of an asset;

 
 
(i)
any amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a borrowing; and

 
 
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(j)
(without double counting) the amount of any liability in respect of any
guarantee or indemnity for any of the items referred to in paragraph (a) to (i)
above.

 
"Combined EBITDA" means in respect of any Relevant Period, the combined earnings
before Combined Senior Interest Expenses, taxation, depreciation and
amortisation of the Group,
 
 
(a)
excluding:

 
 
(i)
(to the extent otherwise included) any gain over book value of any member of the
Group or any Affiliate of any such member and after adding back any loss on book
value arising on the sale, lease or disposal of any asset by any member of the
Group or any Affiliate of any such member (other than on the sale of trading
stock) during such period and any gain or loss arising on revaluation of any
asset during such period); and

 
 
(ii)
realised and unrealised exchange gains and losses which do not relate to
ordinary trading activities,

 
 
(b)
and adding back:

 
 
(i)
the non-cash component of any restructuring charges or asset impairments arising
as a result of restructuring incurred during the period; and

 
 
(ii)
the cash component of any restructuring expenditure incurred during the period
(subject to a maximum in any one 12 month period of US$15,000,000 and a
cumulative cap during the term of the Facilities of US$30,000,000); and

 
 
(iii)
any cash expenditures incurred during the period for the purposes of defending
the Group's Intellectual Property rights.

 
"Combined Financial Statements" of the Group means the financial statements
reflecting the combined financial statements of Flexsys Holding B.V. (and its
Subsidiaries), Flexsys Rubber Chemicals Limited and Flexsys America L.P.
(calculated in accordance with GAAP).
 
"Combined Senior Interest Expenses" means, for any Relevant Period, the
aggregate amount of the accrued interest, commission, fees, discounts,
prepayment penalties or premiums and other finance payments in respect of
Borrowings whether paid, payable or capitalised by any member of the Group in
respect of that Relevant Period:
 
 
(a)
excluding any such obligations to any other member of the Group;

 
 
(b)
including the interest element of leasing and hire purchase payments;

 
 
(c)
including any accrued commission, fees, discounts and other finance payments
payable by any member of the Group under any interest rate hedging

 
 
 
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arrangement (but excluding, for the avoidance of doubt, any marked to market
hedging gains or losses);

 
 
(d)
deducting any accrued commission, fees, discounts and other finance payments
owing to any member of the Group under any interest rate hedging instrument (but
excluding, for the avoidance of doubt, any marked to market hedging gains or
losses);

 
 
(e)
excluding any Acquisition Costs; and

 
 
(f)
excluding any interest in respect of the loan made under the Subordinated Loan.

 
"Combined Senior Total Financial Debt" means, at any time, the Combined Total
Debt after deducting the aggregate amount of all obligations of the Group for or
in respect of Borrowings under the Subordinated Loan and so that no amount shall
be included or excluded more than once.
 
"Combined Tangible Net Worth" means, at any time, the aggregate of the amounts
paid up or credited as paid up on the issued ordinary share capital of the
Company and Flexsys America L.P. and Flexsys Rubber Chemicals Limited and the
aggregate amount of the reserves of the Group,
 
including:
 
 
(a)
any amount credited to the share premium account;

 
 
(b)
any capital redemption reserve fund; and

 
 
(c)
any balance standing to the credit of the combined profit and loss account of
the Group,

 
but deducting:
 
 
(a)
any debit balance on the combined profit and loss account of the Group;

 
 
(b)
(to the extent included) any amount shown in respect of goodwill (including
goodwill arising only on consolidation) or other intangible assets of the Group;

 
 
(c)
any amount in respect of interests of non-Group members in Group subsidiaries
(other than the interests in Flexsys America LP and Flexsys Rubber Chemicals
Ltd);

 
 
(d)
(to the extent included) any amounts arising from an upward revaluation of
assets made at any time after 2006; and

 
 
(e)
(to the extent included) any non-cash adjustments arising from accumulated
currency adjustments made at any time after 2006,

 
and so that no amount shall be included or excluded more than once.
 
 
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"Combined Total Debt" means, at any time, the aggregate amount of all
obligations of the Group for or in respect of Borrowings but:
 
 
(a)
excluding any such obligations to any other member of the Group; and

 
 
(b)
including, in the case of finance leases, only the capitalised value therefore,

 
 
and so that no amount shall be included or excluded more than once.
 
"EBITDA" means earnings before Combined Senior Interest Expenses, taxation,
depreciation and amortisation.
 
"Relevant Period" means each period of twelve months ending on the last day of
each quarter of the Company's financial year.
 

23.2
Financial condition
 
The Company shall ensure that:

 
 
(a)
Interest Cover
The ratio of Combined EBITDA to Combined Senior Interest Expenses in respect of
any Relevant Period shall not be less than 4:1.

 
 
(b)
Senior Leverage
The ratio of Combined Senior Total Financial Debt at any time to Combined EBITDA
(the "Senior Leverage Ratio") in respect of any Relevant Period shall not at any
time exceed 3:1.

 
 
(c)
Combined Tangible Net Worth
The Combined Tangible Net Worth in respect of any Relevant Period shall not be
less than US$75,000,000 plus an amount equal to 75 per cent. of the combined net
income of the Group in respect of each complete financial year of the Company
ending after the date of this Agreement.

 
23.3
Financial testing
The financial covenants set out in Clause 23.2 (Financial condition) shall be
tested quarterly by reference to each of the Combined Financial Statements of
the Group and/or each Compliance Certificate delivered pursuant to Clause 22.2
(Compliance Certificate).

 
24.
GENERAL UNDERTAKINGS
The undertakings in this Clause 24 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance Documents
or any Commitment is in force.

 
24.1
Authorisations
Each Obligor shall promptly obtain, comply with and do all that is necessary to
maintain in full force and effect any Authorisation required under any law or
regulation of the Relevant Jurisdictions to enable it to perform its obligations
under the Finance

 
 
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Documents and subject to any Reservation to ensure the legality, validity,
enforceability or admissibility in evidence in each Relevant Jurisdiction of any
Finance Document.
 
24.2
Compliance with laws

 
(a)
Each Obligor shall comply in all respects with all laws to which it may be
subject, if failure so to comply might be reasonably likely to have a Material
Adverse Effect subject to any Reservations.

 
 
(b)
Each Dutch Obligor shall comply in all respects with the Dutch FSA.

 
24.3
Negative pledge

 
(a)
No Obligor shall (and the Company shall ensure that no other member of the Group
will) create or permit to subsist any Security over any of its assets.

 
 
(b)
No Obligor shall (and the Company shall ensure that no other member of the Group
will):

 
 
(i)
sell, transfer or otherwise dispose of any of its assets on terms whereby they
are or may be leased to or re-acquired by an Obligor or any other member of the
Group;

 
 
(ii)
sell, transfer or otherwise dispose of any of its receivables on recourse terms;

 
 
(iii)
enter into any arrangement under which money or the benefit of a bank or other
account may be applied, set-off or made subject to a combination of accounts; or

 
 
(iv)
enter into any other preferential arrangement having a similar effect,

 
in circumstances where the arrangement or transaction is entered into primarily
as a method of raising Financial Indebtedness or of financing the acquisition of
an asset (any such matter being "Quasi-Security").
 
 
(c)
Subject to paragraph (d) below, paragraphs (a) and (b) above do not apply to:

 
 
(i)
any netting or set-off arrangement entered into by any member of the Group in
the ordinary course of its banking arrangements for the purpose of netting debit
and credit balances;

 
 
(ii)
any lien arising by operation of law in the ordinary course of business and
securing amounts not more than 30 days overdue;

 
 
(iii)
any lien arising by operating of law in the ordinary course of business and
securing amounts more than 30 days overdue provided that such overdue amounts
are being contested by the relevant Obligor in good faith;

 
 
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(iv)
any Security over or affecting (or transaction ("Quasi-Security") described in
paragraph (b) above) affecting any asset acquired by a member of the Group after
the date of this Agreement if:

 
 
(A)
the Security or Quasi-Security was not created in contemplation of the
acquisition of that asset by a member of the Group;

 
 
(B)
the principal amount secured has not been increased in contemplation of, or
since the acquisition of that asset by a member of the Group; and

 
 
(C)
the Security or Quasi-Security is removed or discharged within three months of
the date of acquisition of such asset;

 
 
(v)
any Security or Quasi-Security over or affecting any asset of any company which
becomes a member of the Group after the date of this Agreement, where the
Security or Quasi-Security is created prior to the date on which that company
becomes a member of the Group, if:

 
 
(A)
the Security or Quasi-Security was not created in contemplation of the
acquisition of that company;

 
 
(B)
the principal amount secured has not increased in contemplation of or since the
acquisition of that company; and

 
 
(C)
the Security or Quasi-Security is removed or discharged within three months of
that company becoming a member of the Group; or

 
 
(vi)
the Transaction Security;

 
 
(vii)
any netting or set-off arrangement entered into under any hedging transaction
permitted under Clause 24.14 where the obligations of the parties are calculated
by reference to net exposure under that hedging transaction;

 
 
(viii)
any Quasi-Security arising as a result of a sale, transfer or other disposal
which is a permitted under Clause 24.4 (Disposals);

 
 
(ix)
any Security or Quasi-Security created after the commencement of legal
proceedings with a view to preserving the status quo between the litigants
pending the outcome of those proceedings, provided that such Security or
Quasi-Security does not secure Financial Indebtedness exceeding in aggregate
US$1,000,000 (or its equivalent in another currency or currencies) at any time
and is released forthwith upon final determination of such litigation provided
that such Security or Quasi-Security shall be created or arise solely pursuant
to a legal obligation or requirement;

 
 
(x)
any Security or Quasi-Security over goods, documents of title to goods and
related documents and insurances and their proceeds to secure liabilities of any
member of the Group in respect of a letter of credit or other similar instrument
issued for all or part of the purchase price and

 
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costs of shipment, insurance and storage of goods acquired by any member of the
Group in the ordinary course of trading;

 
 
(xi)
easements, zoning restrictions and similar encumbrances on real property and
minor irregularities in the title thereto that do not (i) secure obligations for
the payment of money or (ii) materially impair the value of such property or its
use by any member of the Group in the ordinary course of business;

 
 
(xii)
any Security or Quasi-Security arising under any retention of title, hire
purchase or conditional sale arrangement or arrangements having similar effect
in respect of goods supplied to a member of the Group in the ordinary course of
trading and not as a result of any default or omission by any member of the
Group;

 
 
(xiii)
any Quasi Security arising as a result of any factoring of receivables permitted
under Clause 24.14;

 
 
(xiv)
any Security or Quasi-Security with the consent of the Majority Lenders;

 
 
(xv)
any Security or Quasi-Security created or subsisting to secure any obligations
incurred in order to comply with the requirements of Section 8a of the German
Partial Retirement Act (Altersteilzeitgesetz) and/or Section 7d of the German
Sozialgesetzbuch IV;

 
 
(xvi)
any Security or Quasi-Security securing indebtedness the principal amount of
which (when aggregated with the principal amount of any other indebtedness which
has the benefit of Security or Quasi Security given by any member of the Group
other than any permitted under paragraphs (i) to (xv) above) does not at any
time exceed US$1,500,000 (or its equivalent in another currency or currencies).

 
 
(d)
Flexsys Indústria e Comercío Ltda is not permitted to create or permit to
subsist any Security or Quasi-Security nor incur any secured or quasi-secured
obligations (howsoever described) referred to in paragraph (c)(iv) to (c)(xv)
above.

 
 
(e)
No Belgian Obligor shall create any Security or Quasi-Security (including but by
no means limited to any pledge) over or affecting any inventory of that Belgian
Obligor.

 
24.4
Disposals

 
(a)
No Obligor shall (and the Company shall ensure that no other member of the Group
will), enter into a single transaction or a series of transactions (whether
related or not) and whether voluntary or involuntary to sell, lease, transfer or
otherwise dispose of any asset.

 
 
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(b)
Paragraph (a) above does not apply to any sale, lease, transfer or other
disposal:

 
 
(i)
made in the ordinary course of trading and on arm's length terms of the
disposing entity;

 
 
(ii)
of assets in exchange for other assets comparable or superior as to type, value
and quality;

 
 
(iii)
by one Obligor to another Obligor provided that if the first Obligor has granted
security over any such asset that other Obligor must be party to a legally valid
binding and enforceable Security Document which creates a first priority
Security over the assets transferred;

 
 
(iv)
for cash on arm's length terms of any obsolete assets not required for the
efficient operation of the business of the Group by any member of the Group;

 
 
(v)
of cash where that disposal is not otherwise prohibited by the Finance
Documents;

 
 
(vi)
by the Company of all shares held in Flexsys America Co. to Solutia Inc. (or any
of its affiliates); or

 
 
(vii)
of assets by a member of the Group which is not an Obligor to another member of
the Group which is not an Obligor; or

 
 
(viii)
of assets with the consent of the Majority Lenders; or

 
 
(ix)
not otherwise permitted where the higher of the market value and consideration
receivable (when aggregated with the higher of the market value and/or
consideration (as the case may be) receivable for any other sale, lease,
transfer or other disposal) does not exceed US$10,000,000 (or its equivalent in
another currency or currencies).

 
24.5
Merger

No Obligor shall (and the Company shall ensure that no other member of the Group
will) enter into any amalgamation, demerger, merger or corporate reconstruction
(including by way of dividend in specie), other than:
 
 
(a)
any such arrangements involving only members of the Group; or

 
 
(b)
the transfer of ownership of Flexsys America Co. to Solutia Inc..

 
24.6
Change of Business

Save as may be required in connection with the German Debt Pushdown, the Company
shall procure that no material adverse change is made to the general nature of
the business of the Company or the Group from that carried on at the date of
this Agreement.
 
24.7
Insurance

 
(a)
Each Obligor shall (and the Company shall ensure that each other member of the
Group will) maintain insurances on and in relation to its business and assets
with reputable independent underwriters or insurance companies:

 
 
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(i)
against those risks, and to the extent, usually insured against by prudent
companies located in the same or a similar location and carrying on a similar
business; and

 
 
(ii)
against those risks, and to the extent, required by applicable law or by
contract.

 
 
(b)
Without limiting paragraph (a) above, each Obligor shall (and the Company shall
ensure that each other member of the Group will) maintain insurance on all of
its assets of an insurable nature against loss or damage by fire and other risks
normally insured against by persons carrying on a similar business in a sum or
sums at least equal to their replacement value (meaning the total cost of
entirely rebuilding, reinstating or replacing those assets if completely
destroyed, together with architects', surveyors' and other professional fees).

 
 
(c)
Each Obligor shall (and the Company shall ensure that each other member of the
Group will) promptly pay premiums and do all things necessary to maintain
insurances required of it by paragraphs (a) and (b) above

 
24.8
Environmental Compliance

Each Obligor shall (and the Company shall ensure that each member of the Group
will) comply in all material respects with all Environmental Law and obtain and
maintain any Environmental Permits and take all reasonable steps in anticipation
of known or expected future changes to or obligations under the same where
failure to do so might be reasonably likely to have a Material Adverse Effect.
 
24.9
Environmental Claims

The Company shall inform the Agent in writing as soon as reasonably practicable
upon becoming aware of the same:
 
 
(a)
if any Environmental Claim has been commenced or (to the best of the Company's
knowledge and belief) is threatened against any member of the Group; or

 
 
(b)
of any facts or circumstances which will or are reasonably likely to result in
any Environmental Claim being commenced or threatened against any member of the
Group,

 
where the claim would be reasonably likely, if determined against that member of
the Group, to have a Material Adverse Effect.
 
24.10
Taxation

Each Obligor shall (and the Company shall ensure that each member of the Group
will) duly and punctually pay and discharge all Taxes imposed upon it or its
assets within the time period allowed without incurring penalties (expect to the
extent that (a) such payment is being contested in good faith, (b) adequate
reserves are being maintained for those Taxes and (c) where such payment can be
lawfully withheld).
 
 
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24.11
Acquisitions

 
(a)
No Obligor shall (and the company shall ensure that no other member of the Group
will) acquire any company, business or undertaking.

 
 
(b)
Paragraph (a) above shall not apply to any acquisition by a member of the Group
of any company, business or undertaking (including for the avoidance of doubt,
any acquisition in connection with the German Debt Pushdown) provided that:

 
 
(i)
the Finance Parties will enjoy the same or equivalent Security and recourse to
such asset following completion of that acquisition;

 
 
(ii)
the Company certifies to the Agent (signed by two directors) in form and
substance substantially similar to the certificate contained in Schedule 13
(Sources and Uses Table) that following such acquisition, the Group will
continue to have excess liquidity (as defined in Clause 24.18 (Subordinated
Loan) of this Agreement) of at least US$40,000,000;

 
 
(iii)
the Company delivers financial projections demonstrating compliance with the
financial covenants contained in Clause 23 (Financial Covenants) of this
Agreement for the balance of the term of the Facilities, financial projections
of which shall take into account such acquisition and be prepared on a pro forma
basis; and

 
 
(iv)
the consideration for any acquisition (when aggregated with the consideration
for any other acquisition permitted under this paragraph (b)) does not exceed
US$30,000,000 in any financial year of the Group and if the consideration for
such acquisitions exceeds US$30,000,000 in aggregate in any financial year the
Group must have the prior consent of the Agent (acting on instruction of the
Majority Lenders).

 
24.12
Loans and Guarantees

 
(a)
No Obligor shall (and the Company shall ensure that no member of the Group will)
make any loans, grant any credit (save in the ordinary course of business or to
another member of the Group (including for the avoidance of doubt, as may be
required in connection with the German Debt Pushdown)) or give any guarantee or
indemnity (except as required under any of the Finance Documents) to or for the
benefit of any person or otherwise voluntarily assume any liability, whether
actual or contingent, in respect of any obligation of any person other than:

 
 
(i)
any guarantee, bond, indemnity or counter-indemnity existing at the date of this
Agreement; or

 
 
(ii)
any unsecured guarantee issued by an Obligor in respect of the Financial
Indebtedness of any other member of Group which Financial Indebtedness is
permitted under the Finance Documents;

 
 
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(iii)
any unsecured guarantee issued by a member of the Group on arm's length terms
(including any counter-indemnity obligation) and in the ordinary course of its
trading, not in respect of Financial Indebtedness;

 
 
(iv)
the endorsement of negotiable instruments in the ordinary course of trade;

 
 
(v)
a loan from a member of the Group to its directors and/or employees provided
that the aggregate amount of loans to directors or employees of members of the
Group does not exceed US$10,000 at any time;

 
 
(b)
No Obligor shall (and the Company shall ensure that no member of the Group will)
agree to any arrangement after the date of this Agreement which might increase
the amount which it may be liable to pay in connection with any guarantee, bond,
indemnity or counter-indemnity permitted under paragraph (a)(i) above, other
than in respect of any guarantee, bond, indemnity or counter-indemnity issued by
an Obligor to another member of the Group.

 
 
(c)
Notwithstanding the foregoing, no loans or credit will be provided by any member
of the Group to Solutia Inc. or any of its affiliated debtors and no member of
the Group will give any guarantee or indemnity to any person (except as required
under any of the Finance Documents) to or for the benefit of any person or
otherwise voluntarily assume any liability, whether actual or contingent, in
respect of any obligation of Solutia Inc. or any of its Affiliates.

 
24.13
Dividends

 
(a)
Subject to Clause 24.5(b) and Clause 24.18(c), no Obligor shall (and the Company
shall ensure that no member of the Group will) pay, make or declare any dividend
or other distribution in respect of any financial year of that member of the
Group to any person or persons outside the Group unless and until:

 
 
(i)
Solutia Inc.'s proceedings under Title 11 of the United States of America Code
entitled Bankruptcy have closed and a final decree has been entered by the
bankruptcy court in which such proceedings have been filed; and

 
 
(ii)
after giving effect to the dividend or other distribution, the Combined Tangible
Net Worth as calculated on a pro forma basis will equal or exceed
US$200,000,000; and

 
 
(iii)
after giving effect to the dividend or other distribution, the Senior Leverage
ratio (as calculated on a pro forma basis and in accordance with paragraph (b)
of Clause 23.2 (Financial condition) will be less than 1.75:1.

 
 
(b)
Notwithstanding the foregoing, the Company may distribute in kind its
shareholding in Flexsys America Co.

 
24.14
Indebtedness

 
(a)
The Company shall ensure that no member of the Group shall incur, create or
permit to subsist or have outstanding any Financial Indebtedness for the credit

 
 
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of any person (including, for the avoidance of doubt, Solutia Inc. or any of its
Affiliates) which is not a member of the Group or enter into any agreement or
arrangement whereby it is entitled to incur, create or permit to subsist any
Financial Indebtedness.

 
 
(b)
Paragraph (a) above does not apply to any Financial Indebtedness:

 
 
(i)
arising under or permitted by the Finance Documents;

 
 
(ii)
arising under the Subordinated Loan as in force at the date of this Agreement
and subject always to the terms of this Agreement and the Intercreditor
Agreement;

 
 
(iii)
any Financial Indebtedness arising under a loan or guarantee permitted pursuant
to Clause 24.12;

 
 
(iv)
any Financial Indebtedness arising under any unsecured derivative transaction to
hedge actual or projected interest or currency exposure arising in the ordinary
course of business of a member of the Group and not for speculative purposes; or

 
 
(v)
not falling within paragraph (b)(i) to (b)(iv) above (including letters of
credit issued pursuant to arrangements outside of this Agreement) if the
aggregate amount drawn at any time does not exceed US$30,000,000 (or its
equivalent) and provided that such Financial Indebtedness is not incurred for
the credit of Solutia Inc. or any of its Affiliates.

 
 
(c)
Notwithstanding the foregoing, Flexsys Indústria e Comercío Ltda is not entitled
to incur, create or permit to subsist any Financial Indebtedness other than:

 
 
(i)
Financial Indebtedness arising under or permitted by the Finance Documents;

 
 
(ii)
Financial Indebtedness incurred for the credit of another member of the Group;
and/or

 
 
(iii)
Financial Indebtedness constituting trade credit incurred in the ordinary course
of trading.

 
 
(d)
Notwithstanding the foregoing, Flexsys America L.P. and Flexsys Indústria e
Comercío Ltda are not entitled to incur, create or permit to subsist any
Financial Indebtedness other than:

 
 
(i)
Financial Indebtedness arising under or permitted by the Finance Documents;

 
 
(ii)
Financial Indebtedness incurred for the credit of another member of the Group;

 
 
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(iii)
Financial Indebtedness constituting trade credit incurred in the ordinary course
of trading;

 
 
(iv)
Financial Indebtedness under the Subordinated Loan; and/or

 
 
(v)
Financial Indebtedness not exceeding US$5,000,000 in aggregate between both
Flexsys America L.P. and Flexsys Indústria e Comercío Ltda.

 
24.15
Preservation of Assets
Each Obligor shall, and the Company shall ensure that each member of the Group
shall, maintain and preserve, to a standard of repair consistent with that
maintained by companies carrying on businesses similar to that carried on by the
Group (ordinary wear and tear excepted), all of its assets that are necessary
for the conduct of its business, as conducted at the date of this Agreement.

 
24.16
Access
Each Obligor shall, and the Company shall ensure that each member of the Group
whose shares are the subject of the Transaction Security shall:

 
 
(a)
subject to pre-existing duties of confidentiality, on request of the Agent,
provide the Agent and Security Trustee with any information the Agent or
Security Trustee may reasonably require about that company's business and
affairs, the Charged Property and its compliance with the terms of the Security
Documents; and

 
 
(b)
permit the Security Trustee, its representatives, delegates, professional
advisers and contractors, free access at all reasonable times and on reasonable
notice at the cost of the Obligors, (a) subject to pre-existing duties of
confidentiality, to inspect and take copies and extracts from the books,
accounts and records of that company and (b) to view the Charged Property
(without becoming liable as mortgagee in possession) but so that prior to the
occurrence of an Event of Default, no more than one such inspection and/or
viewings may take place in any financial year in respect of any Obligor.

 
24.17
Pari Passu ranking
Each Obligor shall, and the Company shall ensure that each member of the Group
shall ensure that its payment obligations under the Finance Documents rank at
least pari passu with the claims of all its other unsecured and unsubordinated
creditors, except for obligations mandatorily preferred by law applying to
companies generally.

 
24.18
Subordinated Loan

 
(a)
Any increase to the principal amount of the Subordinated Loan (such increase
being up to a maximum principal amount of US$175,000,000) that may be agreed
between the Company and Solutia Inc. having regard to the liquidity and funding
needs of the Group as a whole shall be permitted, subject to prior approval of
the increase being obtained from the bankruptcy court in which Solutia Inc.'s
proceedings under Title 11 of the United States of America Code entitled
Bankruptcy have been filed, if applicable.

 
 
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(b)
Interest on the Subordinated Loan shall be capitalised and shall not be due and
payable unless and until:

 
 
(i)
Solutia Inc.'s proceedings under Title 11 of the United States of America Code
entitled Bankruptcy have closed and a final decree has been entered by the
bankruptcy court in which such proceedings have been filed; and

 
 
(ii)
after giving effect to desired level of interest to be paid, the Combined
Tangible Net Worth as calculated on a pro forma basis will equal or exceed
$200,000,000; and

 
 
(iii)
after giving effect to desired level of interest to be paid, the Senior Leverage
ratio (as calculated on a pro forma basis and in accordance with paragraph (b)
of Clause 23.2 (Financial Condition)) will be less than 1.75:1.

 
 
(c)
If the Borrower determines that there is excess liquidity in the Group ("excess
liquidity" being understood by all parties to this Agreement to be cash and
availability under this Agreement that is readily available to the Group and not
required by the Group to meet its funding requirements, disregarding any cash
that is being used for collateral or similar purposes of the Group) as a direct
result of the Acquisition Costs being less than anticipated at Financial Close,
the Borrower shall be entitled to make a one-time repayment towards the balance
of the debt outstanding under the Subordinated Loan (or by payment of a
preferred dividend to Solutia Europe N.V.) of an amount up to the excess of
liquidity in the Group within 30 days of Financial Close provided that:
 

 
 
(i)
the Borrower certifies that there is excess liquidity in the Group and the
amount thereof;

 
 
(ii)
the Borrower certifies that the Acquisition Costs were or will be less than
anticipated at Financial Close;

 
 
(iii)
the Borrower completes and certifies the Sources and Uses Table set out in
Schedule 13 (Sources and Uses Table);

 
 
(iv)
in calculating the excess liquidity of the Group the Borrower must:

 
 
(A)
take into account all cash and undrawn availability under Facility B; and

 
 
(B)
take into account the principal amount outstanding under the Subordinated Loan
at Financial Close; and

 
 
(C)
take into account the principal amount outstanding under the Facilities at
Financial Close; and

 
 
(D)
take into account any (growth) capital expenditure in excess of the capital
expenditure either included in the financial model or that the Group can
reasonably expect to entertain; and

 
 
 
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(E)
deduct the actual purchase price of the Akzo Nobel Retirement; and

 
 
(F)
deduct the payments made (or to be made) pursuant to the Long Term Incentive
Compensation; and

 
 
(G)
deduct the payments made (or to be made) under the Pension Fund Obligations; and

 
 
(H)
deduct the payments made (or to be made) pursuant to the Crystex Acquisition;
and

 
 
(I)
deduct the repayment in full of all amounts outstanding under the Existing
Facility; and

 
 
(J)
deduct US$40,000,000; and

 
 
(v)
after giving effect to the one-time repayment, the balance of the debt still
outstanding under the Subordinated Loan shall be a minimum of US$100,000,000;

 
 
(vi)
the Borrower shall continue to be in compliance with all applicable provisions
under Clause 22 (Information Undertakings), Clause 23 (Financial covenants) and
Clause 24 (General Undertakings); and

 
 
(vii)
if a portion of the payment is made by way of a preferred dividend to Solutia
Europe N.V., the aggregate amount of such preferred dividend does not exceed
US$10,000,000.

 
24.19
Relationship with Solutia Inc.

 
(a)
The Company shall ensure that no member of the Group shall become a debtor in a
proceeding pursuant to Title 11 of the United States Code including in
connection with the Chapter 11 proceedings of Solutia Inc. and its affiliated
debtors in such proceedings from time to time (collectively, for the purposes of
this Clause 24.19 (Relationship with Solutia Inc.), "Solutia") currently pending
and jointly administered before the United States Bankruptcy Court for the
Southern District of New York 03-17949 (PCB).

 
 
(b)
Ordinary corporate formalities (as construed in accordance with accounting
principles and practices generally accepted in the Relevant Jurisdictions) shall
be maintained and observed at all times between all members of the Group and
Solutia.  In connection therewith, at all times, all members of the Group shall
(i) maintain separate books, accounting records (which includes separate
financial statements (which may be unaudited) showing assets and liabilities
separate and apart from those of any other Person), bank accounts, and other
entity documents and records separate from those of Solutia; (ii) hold itself
out to the public as a legal entity separate from Solutia; (iii) not commingle
its assets with assets of Solutia or any other Person and not hold itself out as
being liable for the debts of another; (iv) conduct business in its own name and
through its own authorised officers and agents and strictly comply with all
organisational formalities necessary to maintain its existence; (v) manage its
liabilities

 
 
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separately from those of Solutia and pay and discharge its own liabilities
(including all administrative expenses) from its own separate assets; (vi)
maintain an arm's length relationship with Solutia and enter into transactions
with Solutia only on a commercially reasonable basis; (vii) not hold out its
credit or assets as being available to satisfy the obligations of others; and
(viii) not pledge its assets for the benefit of Solutia or enter into any
guarantees or otherwise become liable for the obligations of Solutia.

 
24.20
Additional security

 
(a)
Subject to compliance with the Agreed Security Principles, each of the Company
and each Material Group Member shall accede to this Agreement as a Guarantor
within 45 days of becoming a Material Group Member and grant such security as
the Security Trustee reasonably requests within such time period (and having
regard to the type of Security Interests created over relevant classes of assets
under the Security Documents at Financial Close).

 
 
(b)
Subject to the Agreed Security Principles each of the Company and each Material
Group Member shall promptly (and in any event within 45 days of being requested
or such longer period as the Agent (acting on instructions of the Majority
Lenders) may agree, having regard to any practical issues involved in the
granting of such additional Security)) grant to the Security Trustee additional
Security in the form of first ranking fixed Security over all of its assets and
undertakings if so requested by the Agent (acting reasonably on its own behalf
or on instruction of the Majority Lenders) having regard to the circumstances of
the Group and the shareholders of the Group as a whole.

 
24.21
Compliance with ERISA
No Obligor shall:

 
 
(a)
allow, or permit any of its ERISA Affiliates to allow, (i) the termination of
any Employee Plan with respect to which any Obligor or any ERISA Affiliate may
have any liability, (ii) any Obligor or ERISA Affiliates to withdraw from any
Employee Plan, (iii) any ERISA Event to occur with respect to any Employee Plan,
or (iv) any Accumulated Funding Deficiency (as defined in Section 302 of ERISA
and Section 412 of the Code), whether or not waived, to exist involving any of
its Employee Plans; to the extent that any of the events described in (i), (ii),
(iii) or (iv), singly or in the aggregate, could have a Material Adverse Effect;

 
 
(b)
allow, or permit any of its ERISA Affiliates to allow, (i) the aggregate amount
of Unfunded Pension Liability among all Employee Plans (taking into account only
Employee Plans with positive Unfunded Pension Liability) at any time to exist
where such amount could have a Material Adverse Effect; or (ii) the aggregate
potential withdrawal liability under Section 4201 of ERISA, if the Company and
its ERISA Affiliates were to completely or partially withdraw from all
Multiemployer Plans, to exist where such amount could have a Material Adverse
Effect; or

 
 
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(c)
fail, or permit any of its ERISA Affiliates to fail, to comply in any material
respect with ERISA or the related provisions of the Code, if any such
non-compliance, singly or in the aggregate, would be reasonably likely to have a
Material Adverse Effect.

 
24.22
Federal Reserve Regulations
Each U.S. Borrower will use the Facilities without violating Regulations T, U
and X.

 
24.23
Compliance with U.S. Regulations
No Obligor shall (and the Company shall ensure that no other member of the Group
will) become an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the 1940 Act.  Neither the making of any Loan, or the
application of the proceeds or repayment of any Loan by any Obligor nor the
consummation of the other transactions contemplated by this agreement will
violate any provision of such act or any rule, regulation or order of the SEC
under the 1940 Act.

 
24.24
Anti-Money Laundering
Each Obligor will use commercially reasonable efforts to ensure that no funds
used to pay the obligations under the Finance Documents are derived from any
unlawful activity.

 
24.25
Further assurance

 
(a)
Each Obligor shall (and the Company shall ensure that each member of the Group
will) promptly do all such acts or execute all such documents (including
assignments, transfers, mortgages, charges, notices and instructions) as the
Security Trustee may reasonably specify) and in such form as the Security
Trustee may reasonably require in favour of the Security Trustee or its
nominee(s)):

 
 
(i)
to perfect the Security created or intended to be created under or evidenced by
the Security Documents (which may include the execution of a mortgage, charge,
assignment or other Security over all or any of the assets which are, or are
intended to be, the subject of the Transaction Security) or for the exercise of
any rights powers and remedies of the Security Trustee or the Finance Parties
provided by or pursuant to the Finance Documents or by law;

 
 
(ii)
to confer on the Security Trustee or confer on the Finance Parties Security over
any property and assets of that Obligor located in any jurisdiction equivalent
or similar to the Security intended to be conferred by or pursuant to the
Security Documents; and/or

 
 
(iii)
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,
protection or maintenance of any Security conferred or intended to be conferred
on the Security Trustee or the Finance Parties by or pursuant to the Finance
Documents.

 
 
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24.26
Company and Material Group Member profit
Subject to compliance with the Agreed Security Principles, the Obligors shall at
all times represent in aggregate a minimum of:

 
 
(a)
85 per cent. of the Combined EBITDA; and/or

 
 
(b)
85 per cent. of the combined assets of the Group; and/or

 
 
(c)
85 per cent. of the combined revenue (as calculated in accordance with GAAP) of
the Group,

 
 
and to be determined by reference to the quarterly unaudited Combined Financial
Statements of the Group.

 
24.27
Capital reduction

 
(a)
The Company, Flexsys America L.P. and Flexsys Rubber Chemicals Limited shall not
be subject to any cancellation of shares, share buy-back or other reduction of
issued share capital or partnership interests.

 
 
(b)
Paragraph (a) above does not apply to any cancellation of shares or other
capital reduction that arises as a direct consequence of the Akzo Nobel
Retirement (whensoever cancelled or reduced).

 
24.28
Malaysian Central Bank
Flexsys Chemicals (M) Sdn. Bhd. undertakes to submit the following information
in relation to the guarantee given by it under this Agreement and the security
created by it under the deed of debenture, the lien holder's caveat and the
charge of its real property held under HS(D) 20034 PT 8004 and HS(D) 20035 PT
both in the Mukim of Sungai Karang, District of Kuantan, State of Pahang,
Malaysia, to BNM for registration and to obtain an acknowledgement of
registration from BNM prior to delivery of the first Utilisation Request and the
Company undertakes to procure that Flexsys Chemicals (M) Sdn. Bhd. complies with
its obligations under this Clause 24.28 (Malaysian Central Bank) within such
time period:

 
 
(a)
its full name, as issuer of the relevant guarantee, the debenture, the lien
holder's caveat and the charge;

 
 
(b)
the full names of all parties whose obligations are guaranteed under such
guarantee and in favour of whom the debenture and charge are created;

 
 
(c)
the amount guaranteed under such guarantee and the amount secured under the
debenture and the charge;

 
 
(d)
the full name and address of the beneficiary(ies) of such guarantee, debenture
and charge; and

 
 
(e)
the purpose of such guarantee, debenture, the lien holder's caveat and charge;
and

 
 
(f)
any other information required by BNM.

 
 
 
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On and at any time after the occurrence of an Event of Default, Flexsys
Chemicals (M) Sdn. Bhd, undertakes to notify BNM that the guarantee given by it
under this Agreement and the security created by it under the deed of debenture,
the lien holder's caveat and the charge of its real property held under
HS(D) 20034 PT 8004 and HS(D) 20035 PT both in the Mukim of Sungai Karang,
District of Kuantan, State of Pahang, Malaysia to BNM will be called upon,
failing which the Security Trustee shall be entitled to notify BNM of the same.
 
Flexsys Chemicals (M) Sdn. Bhd. further undertakes to notify BNM changes to the
guarantee under this Agreement and the security created by it under the deed of
debenture, the lien holder's caveat and the charge, and to provide BNM with any
information they may require from time to time.

 
24.29
Pensions

 
(a)
The Company shall ensure that all pension schemes maintained or operated by or
for the benefit of any member of the Group and/or any of its employees:

 
 
(i)
are maintained and operated in all material respects in accordance with all
applicable laws and contracts and their governing provisions; and

 
 
(ii)
are funded substantially in accordance with the governing provisions of the
scheme with any funding shortfall advised by actuaries of recognised standing
being rectified in accordance with those governing provisions

 
 
except where failure to maintain or fund could not be reasonably likely to have
a Material Adverse Effect.

 
 
(b)
The Company shall promptly notify the Agent of any material change in the rate
of contributions to any pension schemes referred to in paragraph (a) above paid
or recommended to be paid (whether by the scheme actuary or otherwise) or
required (by law or otherwise).

 
24.30
Perfection
The Obligors shall complete any applicable Perfection Requirements in accordance
with the Finance Documents and, where a time limit is imposed by law or
regulation, in any event within such time limit.

 
24.31
Limitations of General Undertakings

 
(a)
Notwithstanding the introductory provision of Clause 24 (General Undertakings)
(but with-out prejudice to the performance of any of the obligations under
Clause 24 (General Undertakings) by any Obligor whose relevant jurisdiction is
not the Federal Republic of Germany), the undertakings set out in Clauses 24.4
(Disposals), 24.5 (Merger), 24.6 (Change of Business), 24.11 (Acquisitions), and
24.13 (Dividends) (such undertakings, the "Relevant Undertakings") are not and
shall not be given by any German Obligor whose relevant jurisdiction is the
Federal Republic of Germany (each a "German Obligor"). However:

 
 
(i)
each German Obligor shall give to the Agent not less than 20 Business Days'
prior written notice if it or any of its Subsidiaries proposes to take

 
 
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or permit any action or circumstance which, if all the Relevant Undertakings had
been given by that German Obligor on the Closing Date and had thereafter
remained in force, would constitute a breach of any of the Relevant Undertakings
by a member of the German Group. On receipt of any such notice, the Agent shall
without undue delay send a copy to each Lender;

 
 
(ii)
the Agent shall be entitled, within 10 Business Days of receipt of a notice
under sub-paragraph (a) above, to request that the relevant German Obligor
supply to the Agent in sufficient copies for the Lenders, such further relevant
information as the Agent (acting reasonably) may consider necessary for the
purposes of this Clause 24.31 (Limitations of General Undertakings) and such
German Obligor shall supply such further information promptly and in any event
within 10 Business Days of the date of request therefore;

 
 
(iii)
if any Lender considers that the relevant action or circumstance (taken alone or
together with other actions or circumstances, whether or not permitted
hereunder), may have a Material Adverse Effect or materially and adversely
affects its interests as a Lender under the Facility Documents, it may so notify
the Agent in writing;

 
 
(iv)
if, by not later than the date 10 Business Days after receipt by the Agent of a
notice pursuant to sub-paragraph (i) above (or, if later and additional
information has been requested pursuant to sub-paragraph (ii) above, by not
later than the date 10 Business Days after receipt by the Agent of such
additional information if received within the prescribed time or the date 10
Business Days after the request therefore if not), the Agent has received
notices pursuant to sub-paragraph (iii) above from Lenders which constitute the
Majority Lenders, the Agent shall promptly notify the Borrower and the Lenders;
and

 
 
(v)
if the Agent gives notice to the Borrower pursuant to sub-paragraph (iv) above
or the relevant action is undertaken or circumstance is permitted before the
date 2 Business Days after the latest time for the receipt by the Agent of
notices pursuant to sub-paragraph (iv) above, the undertaking of the relevant
action or permitting of the relevant circumstances shall immediately constitute
an Event of Default provided that, for the avoidance of doubt, no failure of any
German Obligor to duly perform or comply with any obligation under a Relevant
Undertaking shall of itself constitute an Event of Default.

 
 
(b)
If, in the opinion of the Agent or the Majority Lenders any of the measures
referred to in the Relevant Undertaking when implemented by a member of the
Group would negatively affect the risk assessment of the Lenders in respect of
the ability of relevant German Obligor to perform its obligations under the
Finance Documents, the Parent will ensure that the relevant German Obligor will,
to the fullest extent legally permissible, provide additional Security to the

 
 
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Finance Parties as soon as possible but in any event within 20 Business Days
following request for the same by the Agent.

 
24.32
Amendment of Constitutional Documents and Shares

 
(a)
Each member of the Group granting Security over Shares (the "Pledgor") in
another Group company shall not without the prior written consent of the
Security Trustee (such consent not to be unreasonably delayed or withheld) vote
in favour of, and undertakes to procure that the Group company whose Shares it
has granted Security over (the "Pledgee") shall not without the prior written
consent of the Security Trustee pass a resolution whereby:

 
 
(i)
the constitutional documents of the Pledgee would otherwise be changed as
regards the Pledgee's capital structure in a way which would adversely affect
the Security Trustee's or the Secured Parties' rights under the relevant
Security Document;

 
 
(ii)
subject to Clause 24.13 (Dividends), the Pledgee would materially change its
policy with respect to dividends (unless such change is required in order to
comply with any applicable law or regulation);

 
 
(iii)
where applicable, the objects clause of the Pledgee contained in its current
constitutional documents would be amended;

 
 
(iv)
the relevant Shares would be modified or altered in a way which would adversely
affect the Security Trustee's or the Secured Parties' rights under the relevant
Security Documents; and

 
 
(v)
any term of the relevant Security Document and/or this Agreement would be
violated.

 
 
(b)
In the event that a Pledgee seeks to issue new shares or quotas the Company will
procure that any such new shares are only issued to existing shareholders in
such Pledgee pro-rata to their existing shareholding as at the date of the
proposed issuance.

 
 
(c)
In the event that the Pledgee changes its constitutional documents as regards
its capital structure (with the prior written consent of the Security Trustee),
the Security created over the Shares of the Pledgee shall to the extent possible
under applicable laws automatically extend to any new shares, quotas,
participation certificates or similar right or rights attaching thereto, created
in connection with such change, and the Pledgor granting Security over the
Shares undertakes to comply fully with all instructions received from the
Security Trustee acting in the name and on behalf of the Secured Parties to
perfect such Security granted under the Security Document.

 
 
 
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24.33
General Property Undertakings
Each member of the Group that has granted Security over Real Property shall:

 
 
(a)
repair and keep in good and substantial repair and condition, in a manner
consistent with a reasonably prudent owner, all the Real Property at any time
forming part of the Transaction Security;

 
 
(b)
comply with and observe and perform (a) all applicable requirements of all
planning and environmental legislation, regulations and by-laws relating to the
Real Property, (b) any conditions attaching to any planning permissions relating
to or affecting the Real Property and (c) any notices or other orders made by
any planning, environmental or other public body in respect of all or any part
of the Real Property as would a prudent owner/operator of such Real Property.

 
24.34
German Debt Pushdown
The Company may undertake a corporate reorganisation and debt push down in
Germany as described below or substantially as described below or as otherwise
agreed to by the Agent acting on the instructions of the Majority Lenders
provided that following such corporate reorganisation and debt push down the
Finance Parties will enjoy the same or equivalent security and recourse under
the relevant Security Documents and this Agreement as they enjoyed immediately
prior thereto.
 
The corporate reorganisation and debt push down referred to above is as follows:

 
 
(a)
Flexsys AG shall sell all, or substantially all, of its 50 per cent. equity
interest in Flexsys Verkauf GmbH to Flexsys Verwaltungs- under Beteiligungs
GmbH;

 
 
(b)
Flexsys AG shall distribute a dividend of all proceeds from the sale of its
interest in Flexsys Verkauf GmbH to the Company. The amount is to be equal to
the net distributable earnings as determined and confirmed by Flexsys AG
statutory auditors under the relevant balance sheet;

 
(c)
the Company shall create New German Hold Co with nominal capital;

 
 
(d)
New German Hold Co shall accede to this Agreement as an Additional Borrower and
as an Additional Guarantor in accordance with this Agreement and comply with all
representations and undertakings required of it in such capacities under Section
8 (Representations, Undertakings and Events of Default) of this Agreement;

 
 
(e)
in accordance with Clause 27.4 (Additional Guarantors), New German Hold Co shall
grant Security over its shares in favour of the Lenders;

 
 
(f)
New German Hold Co shall borrow under any part of Facility B;

 
 
(g)
the Company shall sell/or contribute shares held in Flexsys Verwaltung- und
Beteiligungs GmbH to New German Hold Co;

 
 
(h)
the Company shall provide all funds received either as a dividend from Flexsys
AG or from the sale of shares in Flexsys Verwaltungs- und Beteiligungs GmbH

 
 
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to Flexsys Co-ordination Centre N.V. either by way of a capital contribution or
an intercompany loan;

 
 
(i)
Flexsys Co-ordination Centre N.V. shall apply all funds received from the
Company in accordance with the step outlined in paragraph (h) above towards
repayment of its Utilisations outstanding under either Facility;

 
 
(j)
Flexsys Co-ordination Centre N.V. may transfer by way of novation a portion of
its borrowings under Facility A to the New German Hold Co.  This transfer will
be subject to all necessary measures to be taken by the Obligors and the Lenders
to preserve the existing Security.

 
24.35
Conditions subsequent
The Company will ensure that by the latest date stipulated therefor in Part II
of Schedule 2 it will deliver to the Agent all of the documents and other
evidence listed in Part II of Schedule 2 and will complete all of the matters
referred to therein.

 
25.
EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 25 is an Event of
Default (save for Clause 25.19 (Acceleration)) (whether or not caused by any
reason whatsoever outside the control of any Obligor or any other person).

 
25.1
Non-payment
An Obligor does not pay on the due date any amount payable pursuant to a Finance
Document at the place at and in the currency in which it is expressed to be
payable unless:

 
 
(a)
its failure to pay is caused by:

 
 
(i)
administrative or technical error; or

 
 
(ii)
a Disruption Event; and

 
 
(b)
payment is made within 5 Business Days of its due date.

 
25.2
Financial covenants and indebtedness
Any requirement of Clause 23 (Financial covenants) is not satisfied or any
Obligor does not comply with any provision of Clause 24.14 (Indebtedness) or
Clause 24.35 (Conditions Subsequent).

 
25.3
Company and Material Group Member profit
The requirements of Clause 24.26 (Company and Material Group Member Profit) are
not satisfied and are not remedied within 45 Business Days (or such longer
period as the Majority Lenders may agree).

 
25.4
Other obligations

 
(a)
An Obligor does not comply with any provision of the Finance Documents (other
than those referred to in Clause 25.1 (Non-payment), Clause 25.2 (Financial
covenants and Indebtedness) and Clause 25.3 (Company and Material Group Member
profit)).

 
 
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(b)
No Event of Default under paragraph (a) above will occur if the failure to
comply is capable of remedy and is remedied within 15 Business Days of the Agent
giving notice to the Company or the Company becoming aware of the failure to
comply.

 
25.5
Misrepresentation
Any representation or statement made or deemed to be made by an Obligor in the
Finance Documents or any other document delivered by or on behalf of any Obligor
under or in connection with any Finance Document is or proves to have been
incorrect or misleading in any material respect when made or deemed to be made
and, if capable of remedy within the grace period referred to below, is not
remedied to the reasonably satisfaction of the Agent within 30 days from the
earlier of notice thereof to the Company and the relevant Obligor becoming aware
of it.

 
25.6
Cross default

 
(a)
Any Financial Indebtedness of any member of the Group is not paid when due nor
within any originally applicable grace period.

 
 
(b)
Any Financial Indebtedness of any member of the Group is declared to be or
otherwise becomes due and payable prior to its specified maturity as a result of
an event of default (however described).

 
 
(c)
Any commitment for any Financial Indebtedness of any member of the Group is
cancelled or suspended by a creditor of any member of the Group as a result of
an event of default (however described).

 
 
(d)
Any creditor of any member of the Group becomes entitled to declare any
Financial Indebtedness of any member of the Group due and payable prior to its
specified maturity as a result of an event of default (however described).

 
 
(e)
No Event of Default will occur under this Clause 25.6 if the aggregate amount of
Financial Indebtedness or commitment for Financial Indebtedness falling within
paragraphs (a) to (d) above is less than US$5,000,000 (or its equivalent in any
other currency or currencies).

 
25.7
Insolvency

 
(a)
A member of the Group is unable or admits inability to pay its debts as they
fall due, suspends making payments on any of its debts or, by reason of actual
or anticipated financial difficulties, commences negotiations with one or more
of its creditors with a view to rescheduling any of its indebtedness (including,
without limitation, in respect of a member of the Group incorporated in Germany
it is unable to pay its debts as they fall due (Zahlungsunfähigkeit) or is
deemed unable to pay its debts as they fall due (drohende Zahlungsunfähigkeit)
in the meaning of sections 17 and 18 of the German Insolvency Code
(Insolvenzordnung)).

 
 
(b)
Save in relation to Flexsys Rubber Chemicals Limited, the value of the assets of
any material Subsidiary of the Group is less than its liabilities (taking into
account contingent and prospective liabilities) (including, without limitation,
in respect of a member of the Group incorporated in Germany it is over-indebted

 
 
 
 
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(überschuldet) in the meaning of section 19 of the German Insolvency Code
(Insolvenzordnung)).

 
 
(c)
A moratorium is declared in respect of any indebtedness of any member of the
Group.

 
 
(d)
Any member of the Group which conducts business in France is in a state of
cessation des paiements, or any member of the Group becomes insolvent for the
purpose of any insolvency law.

 
 
(e)
Any Obligor shall in any U.S. jurisdiction:

 
 
(i)
apply for, or consent to, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its property;

 
 
(ii)
make a general assignment for the benefit of its creditors;

 
 
(iii)
commence a voluntary case under Title 11 of the United States of America Code
entitled Bankruptcy (or any successor thereof), as amended;

 
 
(iv)
file a petition with respect to itself seeking to take advantage of any other
law relating to bankruptcy, insolvency, reorganisation, liquidation,
dissolution, arrangement or winding up, or composition or readjustment of debts;
or

 
 
(v)
take any corporate action for the purpose of effecting any of the foregoing with
respect to itself.

25.8 
Insolvency proceedings
 

 
(a)
Any corporate action, legal proceedings or other procedure or step is taken in
relation to:

 
 
(i)
the suspension of payments, a moratorium of any indebtedness (including
concordat judiciaire/gerechtelijk akkoord) winding-up, dissolution,
administration, bankruptcy (including faillite/faillissement), or reorganisation
(by way of voluntary arrangement, scheme of arrangement or otherwise) of any
Obligor or Material Group Member;

 
 
(ii)
a composition, compromise, assignment or arrangement with any creditor of any
Obligor or Material Group Member.  In relation to an Obligor incorporated in
Belgium, these concepts shall mean a "minnelijk akkoord met alle schuldeisers"
/'accord amiable avec tous les créanciers";

 
 
(iii)
the appointment of a liquidator, receiver, administrative receiver,
administrator, an administrateur judiciaire/gerechtelijk bestuurder, a
commissaire spécial/speciaal commissaris, administrateur provisoire/voorlopige
bewindvoerder, compulsory manager or other similar officer in respect of any
Obligor or Material Group Member or any of its assets; or

 
 
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(iv)
the enforcement of any Security over any assets of any Obligor or Material Group
Member where such Security secures Financial Indebtedness in excess of
EUR2,500,000 (or its equivalent in another currency or currencies),

 
 
(v)
or any analogous procedure or step is taken in any jurisdiction, in particular
(in relation to a German Obligor or a Material Group Member incorporated in
Germany and in relation to Flexsys SARL):

 
 
(A)
a petition for insolvency proceedings in respect of its assets (Antrag auf
Eröffnung eines Insolvenzverfahrens) is filed or any event occurs which
constitutes a mandatory cause for the initiation of insolvency proceedings
(Eröffnungsgrund) as set out in sections 17 and 19 of the German Insolvency Code
(Insolvenzordnung) or;

 
 
(B)
actions are taken pursuant to section 21 of the German Insolvency Code by the
competent court.

 
 
(C)
any member of the Group commences proceedings for conciliation in accordance
with article L.611-4 to L.611-15 of the French Code de commerce.

 
 
(D)
a judgment for sauvegarde, redressement judiciare, cession totale de
l'entreprise or liquidiation judiciaire is entered in relation to any member of
the Group under articles L.620-1 to L.670-8 of the French Code de commerce.

 
 
(b)
Paragraph (a) above shall not apply to any winding-up petition which is
frivolous or vexatious and which is discharged, stayed or dismissed within
21 days of commencement or, if earlier, the date on which it is advertised.

 
 
(c)
In respect of any Obligor, a proceeding or case shall be commenced, without the
application or consent of such Obligor, in any US court of competent
jurisdiction, seeking:

 
 
(i)
its reorganisation, liquidation, dissolution, arrangement or winding-up or the
composition or readjustment of its debts;

 
 
(ii)
the appointment of a receiver, custodian, trustee, examiner, liquidator or the
like of the Obligor or of all or any substantial part of its property; or

 
 
(iii)
similar relief in respect of any Obligor under any law relating to the
bankruptcy insolvency, reorganisation, winding-up or composition or adjustment
of debts,

 
 
 
and any such proceeding or case referred to in paragraphs (i) to (iii) above
shall continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of 21 or more days, or an order for relief against such
Obligor shall be

 
 
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entered in an involuntary case under Title 11 of the United States of America
Code entitled Bankruptcy (or any successor thereto) as amended.

 
25.9
Creditors' process
Any expropriation, attachment, sequestration, distress or execution affects any
asset or assets of a member of the Group and is not discharged within 21 days.

 
25.10
Unlawfulness
It is or becomes unlawful for an Obligor or any other member of the Group that
is a party to the Intercreditor Agreement to perform any of its obligations
under the Finance Documents or any Transaction Security created or expressed to
be created or evidenced by the Security Documents ceases to be effective or any
subordination created under the Intercreditor Agreement ceases to be effective.

 
25.11
Repudiation
An Obligor repudiates a Finance Document or any of the Transaction Security or
evidences an intention to repudiate a Finance Document or any of the Transaction
Security.

 
25.12
Governmental Intervention
By or under the authority of any government:

 
 
(a)
the management of any member of the Group is wholly or partially displaced or
the authority of any member of the Group in the conduct of its business is
wholly or partially curtailed; or

 
 
(b)
all or a majority of the issued shares of any member of the Group or the whole
or any part (the book value of which is 20 per cent. or more of the book value
of the whole) of its revenues or assets is seized, nationalised, expropriated or
compulsorily acquired.

 
25.13
Transaction Security

 
(a)
Any Obligor fails to perform or comply with any of the obligations assumed by it
in the Security Documents.

 
 
(b)
At any time any of the Transaction Security is or becomes unlawful or is not, or
ceases to be legal, valid, binding or enforceable or otherwise ceases to be
effective, unless otherwise permitted by the Finance Documents.

 
25.14
Change of Ownership
The Company ceases to own, directly or indirectly, the entire issued share
capital of its Subsidiaries as at the date hereof, other than Flexsys America
Co.

 
25.15
Material adverse change
Any event or circumstance occurs which the Majority Lenders believe is
reasonably likely to have a Material Adverse Effect.

 
25.16
Cessation of business
An Obligor ceases, or threatens to cease, to carry on all or a substantial part
of its business.

 
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25.17
Intercreditor Agreement

 
(a)
Any party to the Intercreditor Agreement (other than a Finance Party or an
Obligor) fails to comply with the provisions of, or does not perform its
obligations under, the Intercreditor Agreement; or

 
 
(b)
a representation or warranty given by that party in the Intercreditor Agreement
is incorrect in any material respect,

 
and, if the non-compliance or circumstances giving rise to the misrepresentation
are capable of remedy, it is not remedied within 15 days of the earlier of the
Agent giving notice to that party or that party becoming aware of the
non-compliance or misrepresentation.
 
25.18
Employee Plans

Any ERISA Event shall have occurred, or Clause 24.21 (Compliance with ERISA)
shall be breached, and the liability of a U.S. Obligor or its ERISA Affiliates,
either individually or in the aggregate, related to such ERISA Event or
breaches, individually or when aggregated with all other ERISA Events, and all
such breaches would have or would be reasonably expected to have a Material
Adverse Effect.
 
25.19
Acceleration

 
(a)
On and at any time after the occurrence of an Event of Default which is
continuing the Agent may, and shall if so directed by the Majority Lenders, by
notice in writing to the Company:

 
 
(i)
cancel the Total Commitments whereupon they shall immediately be cancelled; and

 
 
(ii)
declare that all or part of the Utilisations, together with accrued interest,
and all other amounts accrued or outstanding under the Finance Documents be
immediately due and payable, whereupon they shall become immediately due and
payable; and/or

 
 
(iii)
declare that all or part of the Utilisations be payable on demand, whereupon
they shall immediately become payable on demand by the Agent on the instructions
of the Majority Lenders; and

 
 
(iv)
exercise, or direct the Security Trustee to exercise, any or all of its rights,
remedies and powers under any of the Finance Documents; and/or

 
 
(v)
declare that full cash cover in respect of each Letter of Credit is immediately
due and payable whereupon it shall become immediately due and payable,

 
but, notwithstanding the foregoing, upon the occurrence of an Event of Default
specified in Clause 25.8 (Insolvency proceedings), the Facility shall be
cancelled and all Utilisations, together with accrued interest, and all other
amounts accrued or outstanding under the Finance Documents and full cash cover
in respect of each Letter of Credit shall become immediately due and
 
 
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payable, in each case without declaration, notice or demand by or to any
persons.
 
 
(b)
If an Event of Default under paragraph (e) of Clause 25.7 (Insolvency) or
paragraph (a)(v)(C) or (a)(v)(D) of Clause 25.8 (Insolvency Proceedings) shall
occur in respect of any Obligor and to the extent of the imposition of any
automatic stay, then without notice to such Obligor or any other act by the
Agent or any other person, the loans to such Obligor, interest thereon and all
other amounts owed by such Obligor under the Finance Documents shall become
immediately due and payable without presentment, demand, protest or notice of
any kind, all of which are expressly waived.

 
 
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SECTION 9
CHANGES TO PARTIES
 
 
26.
CHANGES TO THE LENDERS

 
26.1
Assignments and transfers by the Lenders

Subject to this Clause 26, a Lender (the "Existing Lender") may:
 
 
(a)
assign any of its rights; or

 
 
(b)
transfer by novation any of its rights and obligations,

 
to another bank or financial institution or to a trust, fund or other entity
which is regularly engaged in or established for the purpose of making,
purchasing or investing in loans, securities or other financial assets (the "New
Lender").
 
26.2
Conditions of assignment or transfer

 
(a)
In relation to Facility B only, the consent of the Company and in respect of a
Letter of Credit the consent of the relevant Issuing Bank is required for an
assignment or transfer by an Existing Lender, unless the assignment or transfer
is to another Lender or an Affiliate of a Lender or an Event of Default is
continuing.

 
 
(b)
The consent of the Company (and, if relevant, the consent of the relevant
Issuing Bank) to an assignment or transfer referred to in paragraph (a) above
must not be unreasonably withheld or delayed.  The Company will be deemed to
have given its consent five Business Days after the Existing Lender has
requested it unless consent is expressly refused by the Company within that
time.

 
 
(c)
The consent of the Company (and, if relevant, the consent of the relevant
Issuing Bank) to an assignment or transfer referred to in paragraph (a) above
must not be withheld solely because the assignment or transfer may result in an
increase to the Mandatory Cost.

 
 
(d)
The minimum amount transferred to a New Lender in relation to a Loan/Commitment
made to any Borrower shall be at least the equivalent of EUR 50,000 or if it is
less, the New Lender shall confirm in writing to the relevant Borrower that it,
the New Lender, is a professional market party within the meaning of the Dutch
FSA.

 
 
(e)
An assignment will only be effective on:

 
 
(i)
receipt by the Agent of written confirmation from the New Lender (in form and
substance satisfactory to the Agent) that the New Lender will assume the same
obligations to the other Finance Parties and the other Secured Parties as it
would have been under if it was an Original Lender;

 
 
(ii)
performance by the Agent of all necessary "know your customer" or other similar
checks under all applicable laws and regulations relation to such

 
 
 
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assignment to a New Lender, the completion of which the Agent shall promptly
notify to the Existing Lender and the New Lender;

 
 
(iii)
the New Lender entering into the documentation required for it to accede as a
party to the Intercreditor Agreement; and

 
 
(iv)
the New Lender entering into the documentation required for it to accede as a
party to the Security Documents if required under the laws of the Relevant
Jurisdiction.

 
 
(f)
A transfer will only be effective if the New Lender enters into the
documentation required for it to accede as a party to the Intercreditor
Agreement and the procedure set out in Clause 26.5 (Procedure for transfer) is
complied with.

 
 
(g)
If:

 
 
(i)
a Lender assigns or transfers any of its rights or obligations under the Finance
Documents or changes its Facility Office; and

 
 
(ii)
as a result of circumstances existing at the date the assignment, transfer or
change occurs, an Obligor would be obliged to make a payment to the New Lender
or Lender acting through its new Facility Office under Clause 15 (Tax gross-up
and indemnities) or Clause 16 (Increased costs),

 
then the New Lender or Lender acting through its new Facility Office is only
entitled to receive payment under those Clauses to the same extent as the
Existing Lender or Lender acting through its previous Facility Office would have
been if the assignment, transfer or change had not occurred.
 
 
(h)
Subject to the terms of this Agreement, the obligations of each Guarantor under
this Agreement will continue in full force and effect following any novation
(novation) within the meaning of article 1271 et seq. of the French and Belgian
Code civil.  In the event of an assignment, a transfer, a novation or disposal
of all part of the rights and obligations by any Lender, each Lender expressly
reserves the rights, powers, privileges and actions that it enjoys under any
Security Documents governed by French and Belgian law in favour of its
assignees, or, as the case may be, its successors, in accordance with the
provisions of article 1278 et seq. of the French and Belgian Code civil.

 
26.3
Assignment or transfer fee

The New Lender shall, on the date upon which an assignment or transfer takes
effect, pay to the Agent (for its own account) a fee of US$2,500.
 
26.4
Limitation of responsibility of Existing Lenders

 
(a)
Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New Lender for:

 
 
(i)
the legality, validity, effectiveness, adequacy or enforceability of the Finance
Documents, the Transaction Security or any other documents;

 
 
 
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(ii)
the financial condition of any Obligor;

 
 
(iii)
the performance and observance by any Obligor of its obligations under the
Finance Documents or any other documents; or

 
 
(iv)
the accuracy of any statements (whether written or oral) made in or in
connection with any Finance Document or any other document,

 
and any representations or warranties implied by law are excluded.
 
 
(b)
Each New Lender confirms to the Existing Lender and the other Finance Parties
that it:

 
 
(i)
has made (and shall continue to make) its own independent investigation and
assessment of the financial condition and affairs of each Obligor and its
related entities in connection with its participation in this Agreement and has
not relied exclusively on any information provided to it by the Existing Lender
in connection with any Finance Document; and

 
 
(ii)
will continue to make its own independent appraisal of the creditworthiness of
each Obligor and its related entities whilst any amount is or may be outstanding
under the Finance Documents or any Commitment is in force.

 
 
(c)
Nothing in any Finance Document obliges an Existing Lender to:

 
 
(i)
accept a re-transfer from a New Lender of any of the rights and obligations
assigned or transferred under this Clause 26; or

 
 
(ii)
support any losses directly or indirectly incurred by the New Lender by reason
of the non-performance by any Obligor of its obligations under the Finance
Documents or otherwise.

 
26.5
Procedure for transfer

 
(a)
Subject to the conditions set out in Clause 26.2 (Conditions of assignment or
transfer) a transfer is effected in accordance with paragraph (c) below when the
Agent executes an otherwise duly completed Transfer Certificate delivered to it
by the Existing Lender and the New Lender and the Agent makes a corresponding
entry in the Register pursuant to Clause 26.9 (The Register).  The Agent shall,
subject to paragraph (b) below as soon as reasonably practicable after receipt
by it of a duly completed Transfer Certificate appearing on its face to comply
with the terms of this Agreement and delivered in accordance with the terms of
this Agreement, execute that Transfer Certificate and make such corresponding
entry in the Register.

 
 
(b)
The Agent shall only be obliged to execute a Transfer Certificate delivered to
it by the Existing Lender and the New Lender and make a corresponding entry in
the Register once it is satisfied it has complied with all necessary "know your
customer" or other similar checks under all applicable laws and regulations in
relation to the transfer to such New Lender.

 
 
 
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(c)
On the Transfer Date:

 
 
(i)
to the extent that in the Transfer Certificate the Existing Lender seeks to
transfer by novation its rights and obligations under the Finance Documents and
in respect of the Transaction Security each of the Obligors and the Existing
Lender shall be released from further obligations towards one another under the
Finance Documents and in respect of the Transaction Security and their
respective rights against one another shall be cancelled (being the "Discharged
Rights and Obligations");

 
 
(ii)
each of the Obligors and the New Lender shall assume obligations towards one
another and/or acquire rights against one another which differ from the
Discharged Rights and Obligations only insofar as that Obligor and the New
Lender have assumed and/or acquired the same in place of that Obligor and the
Existing Lender;

 
 
(iii)
the Agent, the Arranger, the Security Trustee, the New Lender and other Lenders
shall acquire the same rights and assume the same obligations between themselves
and in respect of the Transaction Security as they would have acquired and
assumed had the New Lender been an Original Lender with the rights and/or
obligations acquired or assumed by it as a result of the transfer and to that
extent the Agent, the Arranger, the Security Trustee and the Existing Lender
shall each be released from further obligations to each other under the Finance
Documents;

 
 
(iv)
the benefit of each Security Document shall be maintained in favour of the New
Lender; and

 
 
(v)
the New Lender shall become a Party as a "Lender".

 
26.6
Copy of Transfer Certificate to Company

The Agent shall, as soon as reasonably practicable after it has executed a
Transfer Certificate, send to the Company a copy of that Transfer Certificate.
 
26.7
Disclosure of information

 
(a)
Any Lender may disclose to any of its Affiliates and any other person:

 
 
(i)
to (or through) whom that Lender assigns or transfers (or may potentially assign
or transfer) all or any of its rights and obligations under this Agreement;

 
 
(ii)
with (or through) whom that Lender enters into (or may potentially enter into)
any sub-participation in relation to, or any other transaction under which
payments are to be made by reference to, this Agreement or any Obligor; or

 
 
(iii)
to whom, and to the extent that, information is required to be disclosed by any
applicable law or regulation,

 
 
 
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any information about any Obligor, the Group and the Finance Documents as that
Lender shall consider appropriate if the recipient has agreed with the relevant
Lender to keep the document or information confidential on the same terms (with
consequential changes) as are set out in paragraph (b) below.

 
 
(b)
Subject to paragraph (a) above, each Finance Party shall keep confidential and
shall not, without the prior consent of the Company, use any information (other
than information which is publicly available other than as a result of a breach
by that Finance Party of this paragraph (b)) supplied by or on behalf of any
Obligor under the Finance Documents otherwise than in connection with the
Finance Documents.  However, the restriction set out in this paragraph (b) shall
not apply to, and each Finance Party shall be entitled to disclose, information:

 
 
(i)
in connection with any legal proceedings arising out of or in connection with a
Finance Document; or

 
 
(ii)
if required to do so by an order of a court of competent jurisdiction whether
under any procedure for discovering documents or otherwise; or

 
 
(iii)
pursuant to any law or regulation in accordance with which that Lender is
required or accustomed to act; or

 
 
(iv)
to a governmental, banking, taxation or other regulatory authority of any
competent jurisdiction; or

 
 
(v)
to its accountants or legal advisers.

 
Notwithstanding any of the provisions of the Finance Documents, the Obligors and
the Finance Parties hereby agree that each Party and each employee,
representative or other agent of each Party may disclose to any and all persons,
without limitation of any kind, the "tax structure" and "tax treatment" (in each
case within the meaning of the U.S. Treasury Regulation Section 1.6011-4) of the
Facility and any materials of any kind (including opinions or other tax
analyses) that are provided to any of the foregoing relating to such tax
structure and tax treatment.
 
26.8
Assignment to Federal Reserve Bank

Any Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement, without notice to or consent of any
Party, to any U.S. Federal Reserve Bank provided that (i) no Lender shall be
relieved of any of its obligations under this Agreement as a result of any such
assignment and pledge and (ii) in no event shall such U.S. Federal Reserve Bank
be considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action under this Agreement.
 
26.9
The Register

For U.S. federal income tax purposes only, the Agent, acting solely for this
purpose as an agent of the Obligors, shall maintain at one of its offices a copy
of each Transfer Certificate delivered to it and a register (the "Register") for
the recordation of the names and addresses of each Lender and the Commitments of
and obligations owing to each Lender.  Without limitation of any other provision
of this Clause 26 (Changes to the
 
 
 
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Lenders), no transfer shall be effective until recorded in the Register.  The
entries in the Register shall be conclusive absent manifest error and each
Obligor, the Agent and each Lender may treat each person whose name is recorded
in the Register as a Lender notwithstanding any notice to the contrary.  The
Register shall be available for inspection by each Obligor at any reasonable
time and from time to time upon reasonable prior notice.
 
 
27.
CHANGES TO THE OBLIGORS

 
27.1
Assignment and transfers by Obligors

No Obligor may assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.
 
27.2
Additional Borrowers

 
(a)
Subject to compliance with the provisions of paragraphs (c) and (d) of Clause
22.8 ("Know your customer" checks), the Company may request that any of its
Subsidiaries becomes an Additional Borrower.  That Subsidiary shall become an
Additional Borrower if:

 
 
(i)
all the Lenders approve the addition of that Subsidiary (such approval not to be
unreasonably withheld or delayed);

 
 
(ii)
the Company delivers to the Agent a duly completed and executed Accession Letter
and duly completed and executed documentation required for it to accede as a
party to the Intercreditor Agreement;

 
 
(iii)
the Subsidiary is (or becomes) a Guarantor prior to becoming a Borrower;

 
 
(iv)
the Company confirms that no Default is continuing or would occur as a result of
that Subsidiary becoming an Additional Borrower; and

 
 
(v)
the Agent has received all of the documents and other evidence listed in Part I
of Schedule 2 (Conditions Precedent) in relation to that Additional Borrower,
each in form and substance satisfactory to the Agent.

 
 
(b)
The Agent shall notify the Company and the Lenders promptly upon being satisfied
that it has received (in form and substance satisfactory to it) all the
documents and other evidence listed in Part I of Schedule 2 (Conditions
Precedent).

 
27.3
Resignation of a Borrower

 
(a)
The Company may request that a Borrower (other than the Company) ceases to be a
Borrower by delivering to the Agent a Resignation Letter.

 
 
(b)
The Agent shall accept a Resignation Letter and notify the Company and the
Lenders of its acceptance if:

 
 
(i)
no Default is continuing or would result from the acceptance of the Resignation
Letter (and the Company has confirmed this is the case); and

 
 
 
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(ii)
the Borrower is under no actual or contingent obligations as a Borrower under
any Finance Documents,

 
whereupon that company shall cease to be a Borrower and shall have no further
rights or obligations under the Finance Documents and the Security Trustee shall
be instructed by the Agent to release any Transaction Security granted by the
Borrower, in accordance with Clause 29.22 (Releases).
 
27.4
Additional Guarantors

 
(a)
Subject to compliance with the provisions of Clause 22.8 ("Know your customer"
checks), the Company may request that any of its Subsidiaries become an
Additional Guarantor.

 
 
(b)
The Company shall procure that any other member of the Group which is a Material
Group Member shall as soon as possible after becoming a Material Group Member
become an Additional Guarantor and, subject to the Agreed Security Principles,
grant Security as the Agent may require and shall accede to the Intercreditor
Agreement.

 
 
(c)
A member of the Group shall become an Additional Guarantor if:

 
 
(i)
the Company delivers to the Agent a duly completed and executed Accession
Letter; and

 
 
(ii)
the Agent has received all of the documents and other evidence listed in Part I
of Schedule 2 (Conditions Precedent) in relation to that Additional Guarantor,
each in form and substance satisfactory to the Agent.

 
 
(d)
The Agent shall notify the Company and the Lenders promptly upon being satisfied
that it has received (in form and substance satisfactory to it) all the
documents and other evidence listed in Part II of Schedule 2 (Conditions
Precedent).

 
27.5
Repetition of Representations

Delivery of an Accession Letter constitutes confirmation by the relevant
Subsidiary that the Repeating Representations are true and correct in relation
to it as at the date of delivery as if made by reference to the facts and
circumstances then existing.
 
27.6
Resignation of a Guarantor

 
(a)
The Company may request that a Guarantor (other than the Company) ceases to be a
Guarantor by delivering to the Agent a Resignation Letter.

 
 
(b)
The Agent shall accept a Resignation Letter and notify the Company and the
Lenders of its acceptance if:

 
 
(i)
no Default is continuing or would result from the acceptance of the Resignation
Letter (and the Company has confirmed this is the case); and

 
 
(ii)
all the Lenders have consented to the Company's request.

 
 
 
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(c)
If the resignation of a Guarantor is accepted in accordance with paragraph (b)
above the Agent shall instruct the Security Trustee to release any Transaction
Security granted by that Guarantor, in accordance with Clause 29.22 (Releases).

 
 
 
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SECTION 10
THE FINANCE PARTIES
 
 
28.
ROLE OF THE AGENT AND THE ARRANGER

 
28.1
Appointment of the Agent

 
(a)
Each other Finance Party (other than the Security Trustee) appoints the Agent to
act as its agent under and in connection with the Finance Documents.

 
 
(b)
Each other Finance Party authorises the Agent to exercise the rights, powers,
authorities and discretions specifically given to the Agent under or in
connection with the Finance Documents together with any other incidental rights,
powers, authorities and discretions.

 
 
(c)
Each other Finance Party hereby releases the Agent to the extent permissible
under each Finance Party's respective constitutional documentation from any
restrictions on representing several persons and self-dealing under any
applicable law, and in particular from the restrictions of Section 181 of the
German Civil Code (Bürgerliches Gesetzbuch), to make use of any authorisation
granted under this Agreement and to perform its duties and obligations as Agent
hereunder.

 
28.2
Duties of the Agent

 
(a)
The Agent shall promptly forward to a Party the original or a copy of any
document which is delivered to the Agent for that Party by any other Party.

 
 
(b)
Except where a Finance Document specifically provides otherwise, the Agent is
not obliged to review or check the adequacy, accuracy or completeness of any
document it forwards to another Party.

 
 
(c)
If the Agent receives notice from a Party referring to this Agreement,
describing a Default and stating that the circumstance described is a Default,
it shall promptly notify the other Finance Parties.

 
 
(d)
If the Agent is aware of the non-payment of any principal, interest, commitment
fee or other fee payable to a Finance Party (other than the Agent, the Arranger
or the Security Trustee) under this Agreement it shall promptly notify the other
Finance Parties.

 
 
(e)
The Agent's duties under the Finance Documents are solely mechanical and
administrative in nature.

 
 
(f)
The Agent shall promptly forward to the Security Trustee a copy of all notices
issued pursuant to Clause 25.19 (Acceleration).

 
28.3
Role of the Arranger

Except as specifically provided in the Finance Documents, the Arranger has no
obligations of any kind to any other Party under or in connection with any
Finance Document.
 
 
 
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28.4
No fiduciary duties

 
(a)
Nothing in this Agreement constitutes the Agent or the Arranger as a trustee or
fiduciary of any other person.

 
 
(b)
Neither the Agent nor the Arranger shall be bound to account to any Lender for
any sum or the profit element of any sum received by it for its own account.

 
28.5
Business with the Group
The Agent and the Arranger may accept deposits from, lend money to and generally
engage in any kind of banking or other business with any member of the Group.

 
28.6
Rights and discretions of the Agent

 
(a)
The Agent may rely on:

 
 
(i)
any representation, notice or document believed by it to be genuine, correct and
appropriately authorised; and

 
 
(ii)
any statement made by a director, authorised signatory or employee of any person
regarding any matters which may reasonably be assumed to be within his knowledge
or within his power to verify.

 
 
(b)
The Agent may assume (unless it has received notice to the contrary in its
capacity as agent for the Lenders) that:

 
 
(i)
no Default has occurred (unless it has actual knowledge of a Default arising
under Clause 25.1 (Non-payment));

 
 
(ii)
any right, power, authority or discretion vested in any Party or the Majority
Lenders has not been exercised; and

 
 
(iii)
any notice or request made by the Company (other than a Utilisation Request or
Selection Notice) is made on behalf of and with the consent and knowledge of all
the Obligors.

 
 
(c)
The Agent may engage, pay for and rely on the advice or services of any lawyers,
accountants, surveyors or other experts.

 
 
(d)
The Agent may act in relation to the Finance Documents through its personnel and
agents.

 
 
(e)
The Agent may disclose to any other Party any information it reasonably believes
it has received as agent under this Agreement.

 
 
(f)
Notwithstanding any other provision of any Finance Document to the contrary,
neither the Agent nor the Arranger is obliged to do or omit to do anything if it
would or might in its reasonable opinion constitute a breach of any law or
regulation or a breach of a fiduciary duty or duty of confidentiality.

 
28.7
Majority Lenders' instructions

 
(a)
Unless a contrary indication appears in a Finance Document, the Agent shall (i)
exercise any right, power, authority or discretion vested in it as Agent in
accordance with any instructions given to it by the Majority Lenders (or, if so

 
 
 
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instructed by the Majority Lenders, refrain from exercising any right, power,
authority or discretion vested in it as Agent) and (ii) not be liable for any
act (or omission) if it acts (or refrains from taking any action) in accordance
with an instruction of the Majority Lenders.

 
 
(b)
Unless a contrary indication appears in a Finance Document, any instructions
given by the Majority Lenders will be binding on all the Finance Parties other
than the Security Trustee.

 
 
(c)
The Agent may refrain from acting in accordance with the instructions of the
Majority Lenders (or, if appropriate, the Lenders) until it has received such
security as it may require for any cost, loss or liability (together with any
associated VAT) which it may incur in complying with the instructions.

 
 
(d)
In the absence of instructions from the Majority Lenders, (or, if appropriate,
the Lenders) the Agent may act (or refrain from taking action) as it considers
to be in the best interest of the Lenders.

 
 
(e)
The Agent is not authorised to act on behalf of a Lender (without first
obtaining that Lender's consent) in any legal or arbitration proceedings
relating to any Finance Document.

 
28.8
Responsibility for documentation

Neither the Agent nor the Arranger:
 
 
(a)
is responsible for the adequacy, accuracy and/or completeness of any information
(whether oral or written) supplied by the Agent, the Arranger, an Obligor or any
other person in or in connection with any Finance Document or the Information
Memorandum or the transactions contemplated in the Finance Documents; or

 
 
(b)
is responsible for the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document or the Transaction Security or any other
agreement, arrangement or document entered into, made or executed in
anticipation of or in connection with any Finance Document or the Transaction
Security.

 
28.9
Exclusion of liability

 
(a)
Without limiting paragraph (b) below (and without prejudice to the provisions of
paragraph (e) of Clause 32.10 (Disruption to Payment Systems etc.), the Agent
will not be liable (including, without limitation, for negligence or any other
category of liability whatsoever) for any action taken by it under or in
connection with any Finance Document or the Transaction Security, unless
directly caused by its gross negligence or wilful misconduct.

 
 
(b)
No Party (other than the Agent) may take any proceedings against any officer,
employee or agent of the Agent in respect of any claim it might have against the
Agent or in respect of any act or omission of any kind by that officer, employee
or agent in relation to any Finance Document and any officer, employee or agent
of the Agent may rely on this Clause.

 
 
 
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(c)
The Agent will not be liable for any delay (or any related consequences) in
crediting an account with an amount required under the Finance Documents to be
paid by the Agent if the Agent has taken all necessary steps as soon as
reasonably practicable to comply with the regulations or operating procedures of
any recognised clearing or settlement system used by the Agent for that purpose.

 
 
(d)
Nothing in this Agreement shall oblige the Agent or the Arranger to carry out
any "know your customer" or other checks in relation to any person on behalf of
any Lender and each Lender confirms to the Agent and the Arranger that it is
solely responsible for any such checks it is required to carry out and that it
may not rely on any statement in relation to such checks made by the Agent or
the Arranger.

 
28.10
Lenders' indemnity to the Agent

Each Lender shall (in proportion to its share of the Total Commitments or, if
the Total Commitments are then zero, to its share of the Total Commitments
immediately prior to their reduction to zero) indemnify the Agent, within three
Business Days of demand, against any cost, loss or liability (including, without
limitation, for negligence or any other category of liability whatsoever)
incurred by the Agent (otherwise than by reason of the Agent's gross negligence
or wilful misconduct) (or, in the case of any cost, loss or liability pursuant
to Clause 32.10 (Disruption to Payment Systems etc.) notwithstanding the Agent's
negligence, gross negligence, or any other category of liability whatsoever but
not including any claim based on the fraud of the Agent) in acting as Agent
under the Finance Documents (unless the Agent has been reimbursed by an Obligor
pursuant to a Finance Document).
 
28.11
Resignation of the Agent

 
(a)
The Agent may resign and appoint one of its Affiliates as successor by giving
notice to the other Finance Parties and the Company.

 
 
(b)
Alternatively the Agent may resign by giving notice to the other Finance Parties
and the Company, in which case the Majority Lenders (after consultation with the
Company) may appoint a successor Agent.

 
 
(c)
If the Majority Lenders have not appointed a successor Agent in accordance with
paragraph (b) above within 30 days after notice of resignation was given, the
Agent (after consultation with the Company) may appoint a successor Agent.

 
 
(d)
The retiring Agent shall, at its own cost, make available to the successor Agent
such documents and records and provide such assistance as the successor Agent
may reasonably request for the purposes of performing its functions as Agent
under the Finance Documents.

 
 
(e)
The Agent's resignation notice shall only take effect upon the appointment of a
successor.

 
 
 
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(f)
Upon the appointment of a successor, the retiring Agent shall be discharged from
any further obligation in respect of the Finance Documents but shall remain
entitled to the benefit of this Clause 28.  Its successor and each of the other
Parties shall have the same rights and obligations amongst themselves as they
would have had if such successor had been an original Party.

 
 
(g)
After consultation with the Company, the Majority Lenders may, by notice to the
Agent, require it to resign in accordance with paragraph (b) above.  In this
event, the Agent shall resign in accordance with paragraph (b) above.

 
28.12
Confidentiality

 
(a)
In acting as agent for the Finance Parties, the Agent shall be regarded as
acting through its agency division, or as appropriate, trustee division which
shall be treated as a separate entity from any other of its divisions or
departments.

 
 
(b)
If information is received by another division or department of the Agent, it
may be treated as confidential to that division or department and the Agent
shall not be deemed to have notice of it.

 
28.13
Relationship with the Lenders

 
(a)
The Agent may treat each Lender as a Lender, entitled to payments under this
Agreement and acting through its Facility Office unless it has received not less
than five Business Days prior notice from that Lender to the contrary in
accordance with the terms of this Agreement.

 
 
(b)
Each Lender shall supply the Agent with any information required by the Agent in
order to calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory
Cost Formulae).

 
 
(c)
Each Secured Party shall supply the Agent with any information that the Trustee
may reasonably specify (through the Agent) as being necessary or desirable to
enable the Security Trustee to perform its functions as security trustee.  Each
Lender shall deal with the Security Trustee exclusively through the Agent and
shall not deal directly with the Security Trustee.

 
28.14
Credit appraisal by the Secured Parties

Without affecting the responsibility of any Obligor for information supplied by
it or on its behalf in connection with any Finance Document, each Secured Party
confirms to the Agent and the Arranger that it has been, and will continue to
be, solely responsible for making its own independent appraisal and
investigation of all risks arising under or in connection with any Finance
Document including but not limited to:
 
 
(a)
the financial condition, status and nature of each member of the Group;

 
 
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Finance
Document and the Transaction Security and any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or in
connection with any Finance Document or the Transaction Security;

 
 
 
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(c)
whether that Secured Party has recourse, and the nature and extent of that
recourse, against any Party or any of its respective assets under or in
connection with any Finance Document, the Transaction Security, the transactions
contemplated by the Finance Documents or any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or in
connection with any Finance Document;

 
 
(d)
the adequacy, accuracy and/or completeness of the Information Memorandum and any
other information provided by the Agent, the Security Trustee, any Party or by
any other person under or in connection with any Finance Document, the
transactions contemplated by the Finance Documents or any other agreement,
arrangement or document entered into, made or executed in anticipation of, under
or in connection with any Finance Document; and

 
 
(e)
the right or title of any person in or to, or the value or sufficiency of any
part of the Charged Property, the priority of any of the Transaction Security or
the existence of any Security affecting the Charged Property.

 
28.15
Reference Banks

If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of
which it is an Affiliate) ceases to be a Lender, the Agent shall (in
consultation with the Company) appoint another Lender or an Affiliate of a
Lender to replace that Reference Bank.
 
28.16
Agent's Management Time

Any amount payable to the Agent under Clause 17.3 (Indemnity to the Agent),
Clause 19 (Costs and expenses) and Clause 28.10 (Lenders' indemnity to the
Agent) shall include the cost of utilising the Agent's management time or other
resources and will be calculated on the basis of such reasonable daily or hourly
rates as the Agent may notify to the Company and the Lenders, and is in addition
to any fee paid or payable to the Agent under Clause 14 (Fees).
 
28.17
Deduction from amounts payable by the Agent

If any Party owes an amount to the Agent under the Finance Documents the Agent
may, after giving notice to that Party, deduct an amount not exceeding that
amount from any payment to that Party which the Agent would otherwise be obliged
to make under the Finance Documents and apply the amount deducted in or towards
satisfaction of the amount owed.  For the purposes of the Finance Documents that
Party shall be regarded as having received any amount so deducted.
 
 
29.
ROLE OF SECURITY TRUSTEE

 
29.1
Trust

 
(a)
The Security Trustee declares that it shall hold the Transaction Security on
trust for the Secured Parties (and both on trust for the Secured Parties and as
agent on behalf of the other Secured Parties in respect of any Transaction
Security governed by French Law) on the terms contained in this Agreement.  Each
of the parties to this Agreement agrees that the Security Trustee shall have
only those duties, obligations and responsibilities expressly specified in this

 
 
 
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Agreement, the Intercreditor Agreement  or in the Security Documents (and no
others shall be implied).

 
29.2
Appointment of the Security Trustee

 
(a)
The Security Trustee shall:

 
 
(i)
hold and administer any Transaction Security governed by German law which is
security assigned (Sicherungseigentum/Sicherungsabtretung) or otherwise
transferred under a non-accessory security right (nicht-akzessorische
Sicherheit) to it as trustee (treuhänderisch) for the benefit of the Secured
Parties; and

 
 
(ii)
administer any Transaction Security governed by German law which is pledged
(Verpfändung) or otherwise transferred to any Secured Party under an accessory
security right (akzessorische Sicherheit) as agent.

 
 
(b)
Each Secured Party hereby appoints the Security Trustee to act as its trustee
and its agent in connection herewith (with power to sub-delegate and under
exemption from any restrictions regarding acting on behalf of several parties
and acting both on its own behalf as well as on behalf of other parties, as may
be contained in applicable local law).

 
 
(c)
Each Secured Party hereby authorises the Security Trustee (whether or not by or
through employees or agents):

 
 
(i)
to exercise such rights, remedies, powers and discretions as are specifically
delegated to or conferred upon the Security Trustee by the terms hereof and/or
under the Security Documents together with such rights, remedies, powers and
discretions as are reasonably incidental thereto or necessary to give effect to
the rights, remedies, powers and discretions of the Security Trustee hereby
created;

 
 
(ii)
to enter into each Security Document for and on their behalf as trustee and as
agent;

 
 
(iii)
to hold the Transaction Security on trust and as security agent for and on their
behalf in connection herewith unless otherwise provided under any Transaction
Security;

 
 
(iv)
to acknowledge the provisions of each Security Document, including without
limitation any "parallel debt" provision contained therein;

 
 
(v)
to take such action on its behalf as may from time to time be authorised under
or in accordance with the Security Documents and this Agreement; and

 
 
(vi)
to accept as its representative (Stellvertreter) any pledge or other creation of
any accessory security right granted in favour of such Secured Party in
connection with the Finance Documents under German law and to agree to and
execute on its behalf as its representative (Stellvertreter) any

 
 
 
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amendments and/or alterations to any Security Document governed by German law
which creates a pledge or any other accessory security right (akzessorische
Sicherheit) including the release or confirmation of re-lease of such Security.

 
 
(d)
Each of the Secured Parties hereby releases the Security Trustee to the extent
permissible under each Secured Party's respective constitutional documentations
from any restrictions on representing several persons and self-dealing under any
applicable law, and in particular from the restrictions of Section 181 of the
German Civil Code (Bürgerliches Gesetzbuch), to make use of any authorisation
granted under this Agreement and to perform its duties and obligations as
Security Trustee hereunder and under the Security Documents.

 
 
(e)
Each Secured Party hereby ratifies and approves all acts and declarations
previously done by the Security Trustee on such Secured Party's behalf
(including for the avoidance of doubt the declarations made by the Security
Trustee as representative without power of attorney (Vertreter ohne
Vertretungsmacht) in relation to the creation of any pledge (Pfandrecht) on
behalf and for the benefit of any Secured Party as future pledgee or otherwise).

 
29.3
Italian Security Documents

Each of the Secured Parties hereby:
 
 
(a)
appoints, with the express consent pursuant to article 1395 of the Italian Civil
Code, the Security Trustee to be its mandatario con rappresentanza and common
representative for the purpose of executing in the name and on behalf of the
Secured Parties any Security Document which is expressed to be governed by
Italian law;

 
 
(b)
grants the Security Trustee the power to negotiate and approve the terms and
conditions of such Security Document, execute any other agreement or instrument,
give or receive any notice and take any other action in relation to the
creation, perfection, maintenance, enforcement and release of the security
created thereunder in the name and on behalf of the Secured Parties; and

 
 
(c)
undertakes to ratify and approve any such action taken in the name and on behalf
of the Secured Parties by the Security Trustee acting in its appointed capacity.

 
29.4
Japanese Security Documents

 
(a)
Each of the Secured Parties irrevocably appoints the Security Trustee to be its
attorney and in its name and on its behalf to execute, deliver and perfect all
documents and do all things which the attorney may in its absolute discretion
consider necessary or desirable in connection with any Japanese Security
Documents.

 
 
(b)
Each of the Secured Parties shall ratify and confirm all things done and all
Japanese Security Documents executed by any attorney and further confirm that it
accepts the terms of such Japanese Security Document.

 
 
 
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(c)
The Secured Parties will procure the enforcement of the Japanese Security
Documents pursuant to clause 11 (Enforcement of Security) of the Intercreditor
Agreement only at the request of the Agent.  In relation to the manner of
enforcement (apart from the decision or right to commence an enforcement, which
shall be in accordance with the other provisions of this Agreement) of the
Japanese Security Documents, the Secured Parties and Security Trustee will
always act on the directions of the Agent.

 
 
(d)
All amounts received by a Secured Party pursuant to any enforcement of the
Japanese Security Documents shall be immediately paid to the Security Trustee
for application in accordance with Clause 34 (Application of Proceeds) save that
any Secured Party instructed by the Security Trustee to enforce any Japanese
Security Document in accordance with this Clause shall be entitled to deduct
from the proceeds of each enforcement its costs, charges and expenses incurred
in connection with such enforcement prior to paying the proceeds of such
enforcement to the Security Trustee in accordance with Clause 34 (Application of
Proceeds).

 
29.5
Brazilian Security Documents

Each of the Secured Parties hereby expressly appoints the Security Trustee to
act in the name and on behalf of the Secured Parties in any Security Document
which is governed by Brazilian law, with powers to execute, deliver and perfect
all documents and enforce, collect and/or take any and all measures as deemed
necessary to create, perfect and enforce the securities under such Security
Documents (including, but not limited to, the pledge and usufruct over the
quotas issued by Flexsys Indústria e Comércio Ltda and the Brazilian Guarantee
Agreement.
 
29.6
Parallel Debt (Covenant to pay the Security Trustee)

 
(a)
Notwithstanding any other provision of this Agreement, each Obligor hereby
irrevocably and unconditionally undertakes to pay to the Security Trustee, as
creditor in its own right and not as representative of the other Finance
Parties, sums equal to and in the currency of each amount payable by such
Obligor to each of the Finance Parties under each of the Finance Documents as
and when that amount falls due for payment under the relevant Finance Document
or would have fallen due but for any discharge resulting from failure of another
Finance Party to take appropriate steps, in insolvency proceedings affecting
that Obligor, to preserve its entitlement to be paid that amount.

 
 
(b)
The Security Trustee shall have its own independent right to demand payment of
the amounts payable by each Obligor under this Clause 29.6, irrespective of any
discharge of such Obligor's obligation to pay those amounts to the other Finance
Parties resulting from failure by them to take appropriate steps, in insolvency
proceedings affecting that Obligor, to preserve their entitlement to be paid
those amounts.

 
 
(c)
Any amount due and payable by an Obligor to the Security Trustee under this
Clause 29.6 shall be decreased to the extent that the other Finance Parties have
received (and are able to retain) payment in full of the corresponding amount

 
 
 
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under the other provisions of the Finance Documents and any amount due and
payable by an Obligor to the other Finance Parties under those provisions shall
be decreased to the extent that the Security Trustee has received (and is able
to retain) payment in full of the corresponding amount under this Clause 29.6.

 
 
(d)
The rights of the Finance Parties (other than the Security Trustee) to receive
payment of amounts payable by each Obligor under the Finance Documents are
several and are separate and independent from, and without prejudice to, the
rights of the Security Trustee to receive payment under this Clause 29.6.

 
29.7
No Independent Power

The Secured Parties shall not have any independent power to enforce, or have
recourse to, any of the Transaction Security or to exercise any rights or powers
arising under the Security Documents except through the Security Trustee.
 
29.8
Security Trustee's Instructions

The Security Trustee shall:
 
 
(a)
unless a contrary indication appears in a Finance Document, act in accordance
with any instructions given to it by the Agent and shall be entitled to assume
that (i) any instructions received by it from the Agent are duly given by or on
behalf of the Majority Lenders or, as the case may be, the Lenders in accordance
with the terms of the Finance Documents and (ii) unless it has received actual
notice of revocation that any instructions or directions given by the Agent have
not been revoked;

 
 
(b)
be entitled to request instructions, or clarification of any direction, from the
Agent as to whether, and in what manner, it should exercise or refrain from
exercising any rights, powers and discretions and the Security Trustee may
refrain from acting unless and until those instructions or clarification are
received by it; and

 
 
(c)
be entitled to, carry out all dealings with the Lenders through the Agent and
may give to the Agent any notice or other communication required to be given by
the Security Trustee to the Lenders.

 
29.9
Security Trustee's Actions

Subject to the provisions of this Clause 29:
 
 
(a)
the Security Trustee may, in the absence of any instructions to the contrary,
take such action in the exercise of any of its powers and duties under the
Finance Documents which in its absolute discretion it considers to be for the
protection and benefit of all the Secured Parties; and

 
 
(b)
at any time after receipt by the Security Trustee of notice from the Agent
directing the Security Trustee to exercise all or any of its rights, remedies,
powers or discretions under any of the Finance Documents, the Security Trustee
may, and shall if so directed by the Agent, take any action as in its sole
discretion it thinks fit to enforce the Transaction Security.

 
 
 
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29.10
Security Trustee's Discretions
 
The Security Trustee may:

 
 
(a)
assume (unless it has received actual notice to the contrary in its capacity as
trustee for the Secured Parties) that (i) no Default has occurred and no Obligor
is in breach of or default under its obligations under any of the Finance
Documents and (ii) any right, power, authority or discretion vested in any
person has not been exercised;

 
 
(b)
if it receives any instructions or directions from the Agent to take any action
in relation to the Transaction Security, assume that all applicable conditions
under the Finance Documents for taking that action have been satisfied;

 
 
(c)
engage, pay for and rely on the advice or services of any lawyers, accountants,
surveyors or other experts (whether obtained by the Security Trustee or by any
other Secured Party) whose advice or services may at any time seem necessary,
expedient or desirable;

 
 
(d)
rely upon any communication or document believed by it to be genuine and, as to
any matters of fact which might reasonably be expected to be within the
knowledge of a Secured Party or an Obligor, upon a certificate signed by or on
behalf of that person; and

 
 
(e)
refrain from acting in accordance with the instructions of the Agent or Lenders
(including bringing any legal action or proceeding arising out of or in
connection with the Finance Documents) until it has received any indemnification
and/or security that it may in its absolute discretion require (whether by way
of payment in advance or otherwise) for all costs, losses and liabilities which
it may incur in bringing such action or proceedings.

 
29.11
Security Trustee's Obligations
The Security Trustee shall promptly inform the Agent of:

 
 
(a)
the contents of any notice or document received by it in its capacity as
Security Trustee from any Obligor under any Finance Document; and

 
 
(b)
the occurrence of any Default or any default by an Obligor in the due
performance of or compliance with its obligations under any Finance Document of
which the Security Trustee has received notice from any other party to this
Agreement.

 
29.12
Excluded Obligations
Notwithstanding anything to the contrary expressed or implied in the Finance
Documents, the Security Trustee shall not:

 
 
(a)
be bound to enquire as to (i) whether or not any Default has occurred or (ii)
the performance, default or any breach by an Obligor of its obligations under
any of the Finance Documents;

 
 
(b)
be bound to account to any other Party for any sum or the profit element of any
sum received by it for its own account;

 
 
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(c)
be bound to disclose to any other person (including but not limited to any
Secured Party) (i) any confidential information or (ii) any other information if
disclosure would, or might in its reasonable opinion, constitute a breach of any
law or be a breach of fiduciary duty;

 
 
(d)
be under any obligations other than those which are specifically provided for in
the Finance Documents; or

 
 
(e)
have or be deemed to have any duty, obligation or responsibility to, or
relationship of trust or agency with, any Obligor.

 
29.13
Exclusion of Security Trustee's liability
The Security Trustee shall not accept responsibility or be liable for:

 
 
(a)
the adequacy, accuracy and/or completeness of any information (whether oral or
written) supplied by the Security Trustee or any other person in or in
connection with any Finance Document or the Information Memorandum or the
transactions contemplated in the Finance Documents.

 
 
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Finance
Document or the Transaction Security or any other agreement, arrangement or
document entered into, made or executed in anticipation of or in connection with
any Finance Document or the Transaction Security;

 
 
(c)
any losses to any person or any liability arising as a result of taking or
refraining from taking any action in relation to any of the Finance Documents or
the Transaction Security or otherwise, whether in accordance with an instruction
from the Agent or otherwise, unless directly caused by its gross negligence or
wilful misconduct;

 
 
(d)
the exercise of, or the failure to exercise, any judgement, discretion or power
given to it by or in connection with any of the Finance Documents, the
Transaction Security or any other agreement, arrangement or document entered
into, made or executed in anticipation of or in connection with the Finance
Documents or the Transaction Security; or

 
 
(e)
any shortfall which arises on the enforcement of the Transaction Security.

 
29.14
No proceedings
No Party (other than the Security Trustee) may take any proceedings against any
officer, employee or agent of the Security Trustee in respect of any claim it
might have against the Security Trustee or in respect of any act or omission of
any kind by that officer, employee or agent in relation to any Finance Document
or any Transaction Security and any officer, employee or agent of the Security
Trustee may rely on this Clause.

 
29.15
Own responsibility
Without affecting the responsibility of any Obligor for information supplied by
it or on its behalf in connection with any Finance Document, each Secured Party
confirms to the Security Trustee that it has been, and will continue to be,
solely responsible for making

 
 
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its own independent appraisal and investigation of all risks arising under or in
connection with any Finance Document including but not limited to:
 
 
(a)
the financial condition, status and nature of each member of the Group;

 
 
(b)
the legality, validity, effectiveness, adequacy and enforceability of any
Finance Document and the Transaction Security and any other agreement,
arrangement or document entered into, made or executed in anticipation of, under
or in connection with any Finance Document or the Transaction Security;

 
 
(c)
whether that Secured Party has recourse, and the nature and extent of that
recourse, against any Party or any of its respective assets under or in
connection with any Finance Document, the Transaction Security, the transactions
contemplated by the Finance Documents or any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or in
connection with any Finance Document or the Transaction Security;

 
 
(d)
the adequacy, accuracy and/or completeness of the Information Memorandum and any
information provided by the Security Trustee or by any other person under or in
connection with any Finance Document, the transactions contemplated by the
Finance Documents or any other agreement, arrangement or document entered into,
made or executed in anticipation of, under or in connection with any Finance
Document; and

 
 
(e)
the right or title of any person in or to, or the value or sufficiency of any
part of the Charged Property, the priority of any of the Transaction Security or
the existence of any Security affecting the Charged Property.

 
29.16
No responsibility to perfect Transaction Security
The Security Trustee shall not be liable for any failure to:

 
 
(a)
require the deposit with it of any deed or document certifying, representing or
constituting the title of any Obligor to any of the Charged Property;

 
 
(b)
obtain any licence, consent or other authority for the execution, delivery,
legality, validity, enforceability or admissibility in evidence of any of the
Finance Documents or the Transaction Security;

 
 
(c)
register, file or record or otherwise protect any of the Transaction Security
(or the priority of any of the Transaction Security) under any applicable laws
in any jurisdiction or to give notice to any person of the execution of any of
the Finance Documents or of the Transaction Security;

 
 
(d)
take, or to require any of the Obligors to take, any steps to perfect its title
to any of the Charged Property or to render the Transaction Security effective
or to secure the creation of any ancillary Security under the laws of any
jurisdiction; or

 
 
(e)
require any further assurances in relation to any of the Security Documents.

 
 
 
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29.17
Insurance by Security Trustee

 
(a)
The Security Trustee shall not be under any obligation to insure any of the
Charged Property, to require any other person to maintain any insurance or to
verify any obligation to arrange or maintain insurance contained in the Finance
Documents.  The Security Trustee shall not be responsible for any loss which may
be suffered by any person as a result of the lack of or inadequacy of any such
insurance.

 
 
(b)
Where the Security Trustee is named on any insurance policy as an insured party,
it shall not be responsible for any loss which may be suffered by reason of,
directly or indirectly, its failure to notify the insurers of any material fact
relating to the risk assumed by the insurers or any other information of any
kind, unless any Secured Party has requested it to do so in writing and the
Security Trustee has failed to do so within fourteen days after receipt of that
request.

 
29.18
Custodians and Nominees

The Security Trustee may appoint and pay any person to act as a custodian or
nominee on any terms in relation to any assets of the trust as the Security
Trustee may determine, including for the purpose of depositing with a custodian
this Agreement or any document relating to the trust created under this
Agreement and the Security Trustee shall not be responsible for any loss,
liability, expense, demand, cost, claim or proceedings incurred by reason of the
misconduct, omission or default on the part of any person appointed by it under
this Agreement or be bound to supervise the proceedings or acts of any person.
 
29.19
Acceptance of Title

The Security Trustee shall be entitled to accept without enquiry, and shall not
be obliged to investigate, any right and title that any of the Obligors may have
to any of the Charged Property and shall not be liable for or bound to require
any Obligor to remedy any defect in its right or title.
 
29.20
Refrain from Illegality

The Security Trustee may refrain from doing anything which in its opinion will
or may be contrary to any relevant law, directive or regulation of any
jurisdiction which would or might otherwise render it liable to any person, and
the Security Trustee may do anything which is, in its opinion, necessary to
comply with any law, directive or regulation.
 
29.21
Business with the Obligors

The Security Trustee may accept deposits from, lend money to, and generally
engage in any kind of banking or other business with any of the Obligors.
 
29.22
Releases

Upon a disposal of any of the Charged Property or the resignation of an Obligor
in accordance with Clause 27 (Changes to the Obligors):
 
 
(a)
pursuant to the enforcement of the Transaction Security by a Receiver or the
Security Trustee; or

 
 
(b)
if that disposal is permitted under the Finance Documents; or

 
 
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(c)
if the Security Trustee is instructed to release the Transaction Security
granted by the resigning Obligor under the terms of Clause 27 (Changes to the
Obligors),

 
the Security Trustee shall (at the cost of the Obligors) release that property
from the Transaction Security or the Transaction Security given by that Obligor
and is authorised to execute, without the need for any further authority from
the Secured Parties, any release of the Transaction Security or other claim over
that asset or Obligor and to issue any certificates of non-crystallisation of
floating charges that may be required or desirable.
 
29.23
Winding up of Trust

If the Security Trustee, with the approval of the Majority Lenders, determines
that (a) all of the Secured Obligations and all other obligations secured by any
of the Security Documents have been fully and finally discharged and (b) none of
the Secured Parties is under any commitment, obligation or liability (actual or
contingent) to make advances or provide other financial accommodation to any
Obligor pursuant to the Finance Documents, the trusts set out in this Agreement
shall be wound up and the Security Trustee shall release, without recourse or
warranty, all of the Transaction Security and the rights of the Security Trustee
under each of the Security Documents.
 
29.24
Perpetuity Period

The perpetuity period under the rule against perpetuities, if applicable to this
Agreement, shall be the period of eighty years from the date of this Agreement.
 
29.25
Powers Supplemental

The rights, powers and discretions conferred upon the Security Trustee by this
Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000
and in addition to any which may be vested in the Security Trustee by general
law or otherwise.
 
29.26
Trustee division separate

 
(a)
In acting as trustee for the Secured Parties, the Security Trustee shall be
regarded as acting through its agency or trustee division which shall be treated
as a separate entity from any other of its divisions or departments.

 
 
(b)
If information is received by another division or department of the Security
Trustee, it may be treated as confidential to that division or department and
the Security Trustee shall not be deemed to have notice of it.

 
29.27
Lender' indemnity to the Security Trustee

Each Lender shall (in proportion to its share of the Total Commitments or, if
the Total Commitments are then zero, to its share of the Total Commitments
immediately prior to their reduction to zero) indemnify the Security Trustee,
within three Business Days of demand, against any cost, loss or liability
incurred by the Security Trustee (otherwise than by reason of the Security
Trustee's gross negligence or wilful misconduct) in acting as Security Trustee
under the Finance Documents (unless the Security Trustee has been reimbursed by
an Obligor pursuant to a Finance Document).
 
 
 
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29.28    Disapplication
 
Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security
Trustee in relation to the trusts constituted by this Agreement.  Where there
are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and
the provisions of this Agreement, the provisions of this Agreement shall, to the
extent allowed by law, prevail and, in the case of any inconsistency with the
Trustee Act 2000, the provisions of this Agreement shall constitute a
restriction or exclusion for the purposes of that Act.
 
29.29
Resignation of Security Trustee

 
(a)
The Security Trustee may resign and appoint one of its Affiliates as successor
by giving notice to the Company and to the Agent on behalf of the Lenders.

 
 
(b)
Alternatively the Security Trustee may resign by giving notice to the other
Parties (or to the Agent on behalf of the Lenders) in which case the Majority
Lenders may appoint a successor Security Trustee.

 
 
(c)
If the Majority Lenders have not appointed a successor Security Trustee in
accordance with paragraph (b) above within 30 days after the notice of
resignation was given, the Security Trustee (after consultation with the Agent)
may appoint a successor Security Trustee.

 
 
(d)
The retiring Security Trustee shall, at its own cost, make available to the
successor Security Trustee such documents and records and provide such
assistance as the successor Security Trustee may reasonably request for the
purposes of performing its functions as Security Trustee under the Finance
Documents.

 
 
(e)
The Security Trustee's resignation notice shall only take effect upon (i) the
appointment of a successor and (ii) the transfer of all of the Transaction
Security to that successor.

 
 
(f)
Upon the appointment of a successor, the retiring Security Trustee shall be
discharged from any further obligation in respect of the Finance Documents but
shall remain entitled to the benefit of Clauses 28 (Role of the Agent and the
Arranger) and 29 (Role of Security Trustee).  Its successor and each of the
other Parties shall have the same rights and obligations amongst themselves as
they would have had if such successor had been an original Party.

 
 
(g)
The Majority Lenders may, by notice to the Security Trustee, require it to
resign in accordance with paragraph (b) above.  In this event, the Security
Trustee shall resign in accordance with paragraph (b) above.

 
29.30
Delegation

 
(a)
The Security Trustee may, at any time, delegate by power of attorney or
otherwise to any person for any period, all or any of the rights, powers and
discretions vested in it by any of the Finance Documents.

 
 
(b)
The delegation may be made upon any terms and conditions (including the power to
sub-delegate) and subject to any restrictions that the Security Trustee may
think fit in the interests of the Secured Parties and it shall not be bound to

 
 
 
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supervise, or be in any way responsible for any loss incurred by reason of any
misconduct or default on the part of any delegate or sub-delegate.

 
29.31
Additional Security Trustees

 
(a)
The Security Trustee may at any time appoint (and subsequently remove) any
person to act as a separate trustee or as a co-trustee jointly with it (i) if it
considers that appointment to be in the interests of the Secured Parties or (ii)
for the purposes of conforming to any legal requirements, restrictions or
conditions which the Security Trustee deems to be relevant or (iii) for
obtaining or enforcing any judgment in any jurisdiction, and the Security
Trustee shall give prior notice to the Company and the Agent of that
appointment.

 
 
(b)
Any person so appointed shall have the rights, powers and discretions (not
exceeding those conferred on the Security Trustee by this Agreement) and the
duties and obligations that are conferred or imposed by the instrument of
appointment.

 
 
(c)
The remuneration that the Security Trustee may pay to any person, and any costs
and expenses incurred by that person in performing its functions pursuant to
that appointment shall, for the purposes of this Agreement, be treated as costs
and expenses incurred by the Security Trustee.

 
29.32
Voting Rights

 
(a)
Notwithstanding any other provision of this Agreement or any other Finance
Document the Security Trustee may in its absolute discretion and without any
consent or authority from the Secured Parties by notice in accordance with the
notice provisions of each Security Document that grants Security over Shares
(which notice shall be irrevocable) elect to give up the right to exercise (or
refrain from exercising) voting rights in respect of those Shares conferred or
to be conferred on the Security Trustee pursuant to the relevant clauses of that
Security Document.

 
 
(b)
The Secured Parties unconditionally waive any rights they may otherwise have
either to prevent the Security Trustee from making the election referred to in
paragraph (a) above or to require the Security Trustee to indemnify or otherwise
compensate them for any losses, costs or liabilities incurred by any of them in
relation to or as a consequence of the Security Trustee making such election.

 
 
30.
CONDUCT OF BUSINESS BY THE FINANCE PARTIES

 
No provision of this Agreement will:
 
 
(a)
interfere with the right of any Finance Party to arrange its affairs (tax or
otherwise) in whatever manner it thinks fit;

 
 
(b)
oblige any Finance Party to investigate or claim any credit, relief, remission
or repayment available to it or the extent, order and manner of any claim; or

 
 
(c)
oblige any Finance Party to disclose any information relating to its affairs
(tax or otherwise) or any computations in respect of Tax.

 
 
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31.
SHARING AMONG THE FINANCE PARTIES

 
31.1
Payments to Finance Parties

If a Finance Party (a "Recovering Finance Party") receives or recovers any
amount from an Obligor other than in accordance with Clause 32 (Payment
mechanics) or Clause 34 (Application of Proceeds) and applies that amount to a
payment due under the Finance Documents then:
 
 
(a)
the Recovering Finance Party shall, within three Business Days, notify details
of the receipt or recovery, to the Agent;

 
 
(b)
the Agent shall determine whether the receipt or recovery is in excess of the
amount the Recovering Finance Party would have been paid had the receipt or
recovery been received or made by the Agent and distributed in accordance with
Clause 32 (Payment mechanics), without taking account of any Tax which would be
imposed on the Agent in relation to the receipt, recovery or distribution; and

 
 
(c)
the Recovering Finance Party shall, within three Business Days of demand by the
Agent, pay to the Agent an amount (the "Sharing Payment") equal to such receipt
or recovery less any amount which the Agent determines may be retained by the
Recovering Finance Party as its share of any payment to be made, in accordance
with Clause 32.5 (Partial payments).

 
31.2
Redistribution of payments

The Agent shall treat the Sharing Payment as if it had been paid by the relevant
Obligor and distribute it between the Finance Parties (other than the Recovering
Finance Party) in accordance with Clause 32.5 (Partial payments).
 
31.3
Recovering Finance Party's rights

 
(a)
On a distribution by the Agent under Clause 31.2 (Redistribution of payments),
the Recovering Finance Party will be subrogated to the rights of the Finance
Parties which have shared in the redistribution.

 
 
(b)
If and to the extent that the Recovering Finance Party is not able to rely on
its rights under paragraph (a) above, the relevant Obligor shall be liable to
the Recovering Finance Party for a debt equal to the Sharing Payment which is
immediately due and payable.

 
31.4
Reversal of redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance
Party becomes repayable and is repaid by that Recovering Finance Party, then:
 
 
(a)
each Finance Party which has received a share of the relevant Sharing Payment
pursuant to Clause 31.2 (Redistribution of payments) shall, upon request of the
Agent, pay to the Agent for account of that Recovering Finance Party an amount
equal to the appropriate part of its share of the  Sharing Payment (together
with an amount as is necessary to reimburse that Recovering Finance Party for
its proportion of any interest on the Sharing Payment which that Recovering
Finance Party is required to pay); and

 
 
 
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(b)
that Recovering Finance Party's rights of subrogation in respect of any
reimbursement shall be cancelled and the relevant Obligor will be liable to the
reimbursing Finance Party for the amount so reimbursed.

 
31.5
Exceptions

 
(a)
This Clause 31 shall not apply to the extent that the Recovering Finance Party
would not, after making any payment pursuant to this Clause, have a valid and
enforceable claim against the relevant Obligor.

 
 
(b)
A Recovering Finance Party is not obliged to share with any other Finance Party
any amount which the Recovering Finance Party has received or recovered as a
result of taking legal or arbitration proceedings, if:

 
 
(i)
it notified that other Finance Party of the legal or arbitration proceedings;
and

 
 
(ii)
that other Finance Party had an opportunity to participate in those legal or
arbitration proceedings but did not do so as soon as reasonably practicable
having received notice and did not take separate legal or arbitration
proceedings.

 
 
 
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SECTION 11
ADMINISTRATION
 
 
32.
PAYMENT MECHANICS

 
32.1
Payments to the Agent

 
(a)
On each date on which an Obligor or a Lender is required to make a payment under
a Finance Document, that Obligor or Lender shall make the same available to the
Agent (unless a contrary indication appears in a Finance Document) for value on
the due date at the time and in such funds specified by the Agent as being
customary at the time for settlement of transactions in the relevant currency in
the place of payment.

 
 
(b)
Payment shall be made to such account in the principal financial centre of the
country of that currency (or, in relation to euro, in a principal financial
centre in a Participating Member State or London) with such bank as the Agent
specifies.

 
32.2
Distributions by the Agent

Each payment received by the Agent under the Finance Documents for another Party
shall, subject to Clause 32.3 (Distributions to an Obligor), Clause 32.4
(Clawback) and Clause 28.17 (Deduction from amounts payable by the Agent) be
made available by the Agent as soon as practicable after receipt to the Party
entitled to receive payment in accordance with this Agreement (in the case of a
Lender, for the account of its Facility Office), to such account as that Party
may notify to the Agent by not less than five Business Days' notice with a bank
in the principal financial centre of the country of that currency (or, in
relation to euro, in the principal financial centre of a Participating Member
State or London).
 
32.3
Distributions to an Obligor

The Agent may (with the consent of the Obligor or in accordance with Clause 33
(Set-off)) apply any amount received by it for that Obligor in or towards
payment (on the date and in the currency and funds of receipt) of any amount due
from that Obligor under the Finance Documents or in or towards purchase of any
amount of any currency to be so applied.
 
32.4
Clawback

 
(a)
Where a sum is to be paid to the Agent under the Finance Documents for another
Party, the Agent is not obliged to pay that sum to that other Party (or to enter
into or perform any related exchange contract) until it has been able to
establish to its satisfaction that it has actually received that sum.

 
 
(b)
If the Agent pays an amount to another Party and it proves to be the case that
the Agent had not actually received that amount, then the Party to whom that
amount (or the proceeds of any related exchange contract) was paid by the Agent
shall on demand refund the same to the Agent together with interest on that
amount from the date of payment to the date of receipt by the Agent, calculated
by the Agent to reflect its cost of funds.

 
 
 
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32.5
Partial payments

 
 
(a)
If the Agent receives a payment that is insufficient to discharge all the
amounts then due and payable by an Obligor under the Finance Documents, the
Agent shall apply that payment towards the obligations of that Obligor under the
Finance Documents in the following order:

 
 
(i)
first, in or towards payment pro rata of any unpaid fees, costs and expenses of
the Agent, the Issuing Bank, the Security Trustee (including of any Receiver or
Delegate) and the Arranger under the Finance Documents;

 
 
(ii)
secondly, in or towards payment pro rata of any accrued interest, fee or
commission due but unpaid under this Agreement;

 
 
(iii)
thirdly, in or towards payment pro rata of any principal due but unpaid under
this Agreement and any amount due but unpaid under Clauses 7.4 (Claims under a
Letter of Credit) and 7.5 (Indemnities); and

 
 
(iv)
fourthly, in or towards payment pro rata of any other sum due but unpaid under
the Finance Documents.

 
 
(b)
The Agent shall, if so directed by the Majority Lenders, vary the order set out
in sub-paragraphs (a)(ii) to (iv) above.

 
 
(c)
Paragraphs (a) and (b) above will override any appropriation made by an Obligor.

 
32.6
No set-off by Obligors

All payments to be made by an Obligor under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for) set-off
or counterclaim.
 
32.7
Business Days

 
(a)
Any payment which is due to be made on a day that is not a Business Day shall be
made on the next Business Day in the same calendar month (if there is one) or
the preceding Business Day (if there is not).

 
 
(b)
During any extension of the due date for payment of any principal or Unpaid Sum
under this Agreement interest is payable on the principal or Unpaid Sum at the
rate payable on the original due date.

 
32.8
Currency of account

 
(a)
Subject to paragraphs (b) to (e) below, the Base Currency is the currency of
account and payment for any sum due from an Obligor under any Finance Document.

 
 
(b)
A repayment of a Utilisation or Unpaid Sum or a part of a Utilisation or Unpaid
Sum shall be made in the currency in which that Utilisation or Unpaid Sum is
denominated on its due date.

 
 
 
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(c)
Each payment of interest shall be made in the currency in which the sum in
respect of which the interest is payable was denominated when that interest
accrued.

 
 
(d)
Each payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are incurred.

 
 
(e)
Any amount expressed to be payable in a currency other than the Base Currency
shall be paid in that other currency.

 
32.9
Change of currency

 
(a)
Unless otherwise prohibited by law, if more than one currency or currency unit
are at the same time recognised by the central bank of any country as the lawful
currency of that country, then:

 
 
(i)
any reference in the Finance Documents to, and any obligations arising under the
Finance Documents in, the currency of that country shall be translated into, or
paid in, the currency or currency unit of that country designated by the Agent
(after consultation with the Company); and

 
 
(ii)
any translation from one currency or currency unit to another shall be at the
official rate of exchange recognised by the central bank for the conversion of
that currency or currency unit into the other, rounded up or down by the Agent
(acting reasonably).

 
 
(b)
If a change in any currency of a country occurs, this Agreement will, to the
extent the Agent (acting reasonably and after consultation with the Company)
specifies to be necessary, be amended to comply with any generally accepted
conventions and market practice in the Relevant Interbank Market and otherwise
to reflect the change in currency.

 
32.10
Disruption to Payment Systems etc.

If either the Agent determines (in its discretion) that a Disruption Event has
occurred or the Agent is notified by the Company that a Disruption Event has
occurred:
 
 
(a)
the Agent may, and shall if requested to do so by the Company, consult with the
Company with a view to agreeing with the Company such changes to the operation
or administration of the Facilities as the Agent may deem necessary in the
circumstances;

 
 
(b)
the Agent shall not be obliged to consult with the Company in relation to any
changes mentioned in paragraph (a) above if, in its opinion, it is not
practicable to do so in the circumstances and, in any event, shall have no
obligation to agree to such changes;

 
 
(c)
the Agent may consult with the Finance Parties in relation to any changes
mentioned in paragraph (a) above but shall not be obliged to do so if, in its
opinion, it is not practicable to do so in the circumstances;

 
 
 
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(d)
any such changes agreed upon by the Agent and the Company shall (whether or not
it is finally determined that a Disruption Event has occurred) be binding upon
the Parties as an amendment to (or, as the case may be, waiver of) the terms of
the Finance Documents notwithstanding the provisions of Clause 39 (Amendments
and Waivers);

 
 
(e)
the Agent shall not be liable for any damages, costs or losses
whatsoever  (including, without limitation for negligence, gross negligence or
any other category of liability whatsoever but not including any claim based on
the fraud of the Agent) arising as a result of its taking, or failing to take,
any actions pursuant to or in connection with this Clause 32.10; and

 
 
(f)
the Agent shall notify the Finance Parties of all changes agreed pursuant to
paragraph (d) above.

 
 
33.
SET-OFF

 
Following the occurrence of an Event of Default, a Finance Party may set off any
matured obligation due from an Obligor under the Finance Documents (to the
extent beneficially owned by that Finance Party) against any matured obligation
owed by that Finance Party to that Obligor, regardless of the place of payment,
booking branch or currency of either obligation.  If the obligations are in
different currencies, the Finance Party may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of the
set-off.
 
 
34.
APPLICATION OF PROCEEDS

 
34.1
Order of Application

All moneys from time to time received or recovered by the Security Trustee under
Clause 29.6 (Parallel Debt (Covenant to pay the Security Trustee)) and/or in
connection with the realisation or enforcement of all or any part of the
Transaction Security shall be held by the Security Trustee on trust to apply
them at such times as the Security Trustee sees fit, to the extent permitted by
applicable law, in the following order of priority:
 
 
(a)
in discharging any sums owing to the Security Trustee (in its capacity as
trustee), any Receiver or any Delegate;

 
 
(b)
in payment to the Agent, on behalf of the Secured Parties, for application
towards the discharge of all sums due and payable by any Obligor under any of
the Finance Documents in accordance with Clause 32.5 (Partial Payments);

 
 
(c)
if none of the Obligors is under any further actual or contingent liability
under any Finance Document, in payment to any person to whom the Security
Trustee is obliged to pay in priority to any Obligor; and

 
 
(d)
the balance, if any, in payment to the relevant Obligor.

 
34.2
Investment of Proceeds

Prior to the application of the proceeds of the Transaction Security in
accordance with Clause 34.1 (Order of Application) the Security Trustee may, at
its discretion, hold all or part of those proceeds in an interest bearing
suspense or impersonal account(s) in the
 
 
 
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name of the Security Trustee or Agent with any financial institution (including
itself) and for so long as the Security Trustee thinks fit (the interest being
credited to the relevant account) pending the application from time to time of
those monies at the Security Trustee's discretion in accordance with the
provisions of this Clause 34.
 
34.3
Currency Conversion

 
(a)
For the purpose of or pending the discharge of any of the Secured Obligations
the Security Trustee may convert any moneys received or recovered by the
Security Trustee from one currency to another, at the spot rate at which the
Security Trustee is able to purchase the currency in which the Secured
Obligations are due with the amount received.

 
 
(b)
The obligations of any Obligor to pay in the due currency shall only be
satisfied to the extent of the amount of the due currency purchased after
deducting the costs of conversion.

 
34.4
Permitted Deductions

The Security Trustee shall be entitled (a) to set aside by way of reserve
amounts required to meet and (b) to make and pay, any deductions and
withholdings (on account of Tax or otherwise) which it is or may be required by
any applicable law to make from any distribution or payment made by it under
this Agreement, and to pay all Tax which may be assessed against it in respect
of any of the Charged Property, or as a consequence of performing its duties, or
by virtue of its capacity as Trustee under any of the Finance Documents or
otherwise (except in connection with its remuneration for performing its duties
under this Agreement).
 
34.5
Discharge of Secured Obligations

 
(a)
Any payment to be made in respect of the Secured Obligations by the Security
Trustee may be made to the Agent on behalf of the Lenders and that payment shall
be a good discharge to the extent of that payment, to the Security Trustee.

 
 
(b)
The Security Trustee is under no obligation to make payment to the Agent in the
same currency as that in which any Unpaid Sum is denominated.

 
34.6
Sums received by Obligors

If any of the Obligors receives any sum which, pursuant to any of the Finance
Documents, should have been paid to the Security Trustee, that sum shall
promptly be paid to the Security Trustee for application in accordance with this
Clause.
 
34.7
Security Trustee application of proceeds

In consideration for the covenants given to the Security Trustee by each Obligor
in Clause 29.6 (Parallel Debt (Covenant to pay the Security Trustee)), the
Security Trustee agrees with each Obligor to apply all moneys from time to time
paid by such Obligor to the Security Trustee in accordance with the provisions
of Clause 34.1 (Order of Application).
 
 
 
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35.         NOTICES
 
35.1
Communications in writing

Any communication to be made under or in connection with the Finance Documents
shall be made in writing and, unless otherwise stated, may be made by fax or
letter.
 
35.2
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 the Finance
Documents is:
 
 
(a)
in the case of the Company, that identified with its name below;

 
 
(b)
in the case of each Lender or any other Original Obligor, that notified in
writing to the Agent on or prior to the date on which it becomes a Party; and

 
 
(c)
in the case of the Agent and Security Trustee, that identified with its name
below,

 
or any substitute address or fax number or department or officer as the Party
may notify to the Agent (or the Agent may notify to the other Parties, if a
change is made by the Agent) by not less than five Business Days' notice.
 
35.3
Delivery

 
(a)
Any communication or document made or delivered by one person to another under
or in connection with the Finance Documents will only be effective:

 
 
(i)
if by way of fax, when received in legible form; or

 
 
(ii)
if by way of letter, when it has been left at the relevant address or five
Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address,

 
 
 
and, if a particular department or officer is specified as part of its address
details provided under Clause 35.2 (Addresses), if addressed to that department
or officer.

 
 
(b)
Any communication or document to be made or delivered to the Agent or to the
Security Trustee will be effective only when actually received by the Agent or
the Security Trustee and then only if it is expressly marked for the attention
of the department or officer identified with the Agent's or the Security
Trustee's signature below (or any substitute department or officer as the Agent
shall specify for this purpose).

 
 
(c)
All notices from or to an Obligor shall be sent through the Agent.

 
 
(d)
Any communication or document made or delivered to the Company in accordance
with this Clause will be deemed to have been made or delivered to each of the
Obligors.

 
 
(e)
All notices to a Lender from the Security Trustee shall be sent through the
Agent.

 
 
 
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35.4
Notification of address and fax number

Promptly upon receipt of notification of an address and fax number or change of
address or fax number pursuant to Clause 35.2 (Addresses) or changing its own
address or fax number, the Agent shall notify the other Parties.
 
35.5
Electronic communication

 
(a)
Any communication to be made between the Agent or the Security Trustee and a
Lender under or in connection with the Finance Documents may be made by
electronic mail or other electronic means, if the Agent, the Trustee and the
relevant Lender:

 
 
(i)
agree that, unless and until notified to the contrary, this is to be an accepted
form of communication;

 
 
(ii)
notify each other in writing of their electronic mail address and/or any other
information required to enable the sending and receipt of information by that
means; and

 
 
(iii)
notify each other of any change to their address or any other such information
supplied by them.

 
 
(b)
Any electronic communication made between the Agent and a Lender or the Security
Trustee will be effective only when actually received in readable form and in
the case of any electronic communication made by a Lender to the Agent or the
Security Trustee only if it is addressed in such a manner as the Agent or
Security Trustee shall specify for this purpose.

 
35.6
English language

 
(a)
Any notice given under or in connection with any Finance Document must be in
English.

 
 
(b)
All other documents provided under or in connection with any Finance Document
must be:

 
 
(i)
in English; or

 
 
(ii)
if not in English, and if so required by the Agent, accompanied by a certified
English translation and, in this case, the English translation will prevail
unless the document is a constitutional, statutory or other official document.

 
 
36.
CALCULATIONS AND CERTIFICATES

 
36.1
Accounts

In any litigation or arbitration proceedings arising out of or in connection
with a Finance Document, the entries made in the accounts maintained by a
Finance Party are prima facie evidence of the matters to which they relate.
 
 
 
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36.2
Certificates and Determinations

Any certification or determination by a Finance Party of a rate or amount under
any Finance Document is, in the absence of manifest error, conclusive evidence
of the matters to which it relates.
 
36.3
Day count convention

Any interest, commission or fee accruing under a Finance Document will accrue
from day to day and is calculated on the basis of the actual number of days
elapsed and a year of 360 days or, in any case where the practice in the
Relevant Interbank Market differs, in accordance with that market practice.
 
 
37.
PARTIAL INVALIDITY

 
If, at any time, any provision of the Finance Documents is or becomes illegal,
invalid or unenforceable in any respect under any law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions nor
the legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.
 
 
38.
REMEDIES AND WAIVERS

 
No failure to exercise, nor any delay in exercising, on the part of any Secured
Party or the Arranger, any right or remedy under the Finance Documents shall
operate as a waiver, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise or the exercise of any other right
or remedy.  The rights and remedies provided in this Agreement are cumulative
and not exclusive of any rights or remedies provided by law.
 
 
39.
AMENDMENTS AND WAIVERS

 
39.1
Required consents

 
(a)
Subject to Clause 39.2 (Exceptions) and Clause 29.22 (Releases) any term of the
Finance Documents may be amended or waived only with the consent of the Majority
Lenders and the Obligors and any such amendment or waiver will be binding on all
Parties.

 
 
(b)
The Agent, or in respect of the Security Documents the Security Trustee, may
effect, on behalf of any Finance Party, any amendment or waiver permitted by
this Clause.

 
39.2
Exceptions

 
(a)
An amendment or waiver that has the effect of changing or which relates to:

 
 
(i)
the definition of "Majority Lenders" in Clause 1.1 (Definitions);

 
 
(ii)
an extension to the date of payment of any amount under the Finance Documents;

 
 
(iii)
a reduction in the Margin or a reduction in the amount of any payment of
principal, interest, fees or commission payable;

 
 
(iv)
an increase in or an extension of any Commitment;

 
 
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(v)
a change to the Borrowers or Guarantors other than in accordance with Clause 27
(Changes to the Obligors);

 
 
(vi)
any provision which expressly requires the consent of all the Lenders;

 
 
(vii)
Clause 2.2 (Finance Parties' rights and obligations), Clause 26 (Changes to the
Lenders) or this Clause 39;

 
 
(viii)
the nature or scope of the Charged Property or the manner in which the proceeds
of enforcement of the Transaction Security are distributed;

 
 
(ix)
any amendment to the order of priority or subordination under the Intercreditor
Agreement;

 
shall not be made without the prior consent of all the Lenders.
 
 
(b)
An amendment or waiver which relates to the rights or obligations of the Agent,
the Security Trustee or the Arranger may not be effected without the consent of
the Agent, the Security Trustee or the Arranger.

 
39.3
Amendments required to Security Documents

Any amendment made to any term of this Agreement (including but not limited to
an amendment or waiver that relates to an increase in or extension of any
Commitment and the payment of principal, interest, fees or commission payable),
is not effective unless and until all Security Documents which, in the
reasonable opinion of the Secured Trustee, require any confirmation or amendment
as a result thereof in order to preserve the security thereby created shall have
been confirmed or amended (including, without limitation, the Brazilian Quota
Pledge Agreement and the Italian Share Pledge).
 
 
40.
COUNTERPARTS

 
Each Finance Document may be executed in any number of counterparts, and this
has the same effect as if the signatures on the counterparts were on a single
copy of the Finance Document.
 
 
41.
USA Patriot Act

 
Each Lender hereby notifies each Obligor that pursuant to the requirements of
the USA Patriot Act, such Lender is required to obtain, verify and record
information that identifies such Obligor, which information includes the name
and address of such Obligor and other information that will allow such Lender to
identify such Obligor in accordance with the USA Patriot Act.
 
 
 
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SECTION 12
GOVERNING LAW AND ENFORCEMENT
 
 
42.
GOVERNING LAW

 
This Agreement is governed by English law.
 
 
43.
ENFORCEMENT

 
43.1
Jurisdiction of English courts

 
(a)
The courts of England have exclusive jurisdiction to settle any dispute arising
out of or in connection with this Agreement (including a dispute regarding the
existence, validity or termination of this Agreement) (a "Dispute").

 
 
(b)
The Parties agree that the courts of England are the most appropriate and
convenient courts to settle Disputes and accordingly no Party will argue to the
contrary.

 
 
(c)
This Clause 43.1 is for the benefit of the Finance Parties only.  As a result,
no Finance Party shall be prevented from taking proceedings relating to a
Dispute in any other courts with jurisdiction.  To the extent allowed by law,
the Finance Parties may take concurrent proceedings in any number of
jurisdictions.

 
43.2
Service of process

Without prejudice to any other mode of service allowed under any relevant law,
each Obligor (other than an Obligor incorporated in England and Wales):
 
 
(a)
irrevocably appoints Flexsys Rubber Chemicals Limited as its agent for service
of process in relation to any proceedings before the English courts in
connection with any Finance Document; and

 
 
(b)
agrees that failure by an agent for service of process to notify the relevant
Obligor of the process will not invalidate the proceedings concerned.

 
43.3
Waiver of Immunity

Each Obligor waives generally all immunity it or its assets or revenues may
otherwise have in any jurisdiction, including immunity in respect of:
 
 
(a)
the giving of any relief by way of injunction or order for specific performance
or for the recovery of assets or revenues; and

 
 
(b)
the issue of any process against its assets or revenues for the enforcement of a
judgment or, in an action in rem, for the arrest, detention or sale of any of
its assets and revenues.

 
43.4
Título Executivo Extrajudicial

In accordance with Section 585, item II and Section 585, second paragraph of the
Brazilian Code of Civil Procedure (Law 5,869/73 as amended from time to time),
this Agreement shall be deemed as an out-of-court document (título executivo
extrajudicial) for all purposes under Brazilian law, including but not limited
to for the purposes of execution, collection, receipt or otherwise for the
taking of any and all measures required
 
 
 
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to perfect and enforce the Guarantee and the Security created herein and under
the Security Documents against Flexsys Indústria e Comércio Ltda., being
understood and agreed that the Parties appoint Brazil as the place for
compliance by Flexsys Indústria e Comércio Ltda. of its obligations under this
Agreement, the Security Documents and the Finance Documents.
 
 
44.
WAIVER OF JURY TRIAL

 
EACH OF THE PARTIES TO THIS AGREEMENT AGREES TO WAIVE IRREVOCABLY ITS RIGHTS TO
A JURY TRIAL OF ANY CLAIM BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF
THE DOCUMENTS REFERRED TO IN THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN
THIS AGREEMENT.  This waiver is intended to apply to all Disputes.  Each party
acknowledges that (a) this waiver is a material inducement to enter into this
Agreement, (b) it has already relied on this waiver in entering into this
Agreement and (c) it will continue to rely on this waiver in future
dealings.  Each party represents that it has reviewed this waiver with its legal
advisers and that it knowingly and voluntarily waives its jury trial rights
after consultation with its legal advisers.  In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
 
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
 

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