**EXHIBIT 10.2**

 

**CONFORMEDCOPY**

 

Certain sections of thisdocument have been the subject of a confidential treatment request.  Any text that has been removed pursuant toRhodia’s confidential treatment request has been separately submitted to the U.S.Securities and Exchange Commission. Deleted text herein is marked [“***”]. Where several pages of text have been deleted the number of pagesremoved has been noted.

 

**AGREEMENT**

 

DATED 31ST MARCH, 2004€638,497,197MULTICURRENCY REVOLVING CREDIT AND GUARANTEE FACILITYand€119,224,721MULTICURRENCY REVOLVING CREDIT FACILITYFORRHODIAAND CERTAIN OF ITS SUBSIDIARIESARRANGED BYBNP PARIBASCRÉDIT AGRICOLE INDOSUEZ S.A.andHSBC CCFas ArrangerswithBNP PARIBASas Facility AgentandBNP PARIBASas Security Agent

 

**THIS AGREEMENT IS ENTERED INTO WITHTHE BENEFIT OF AND SUBJECT TO THE TERMS OF THEINTERCREDITOR AND SHARING DEED AND THE SUBORDINATION AGREEMENT**

 

**ALLEN & OVERY**

 

**AVOCATS À LA COUR**

 

***SOLICITORS***

 

**PARIS**

 

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**CONTENTS**

 
| **Clause** |   |   |                            |
|------------|--------|--------|---------------------------------|
| 1.         |   |   | Interpretation                  |   |
| 2.         |   |   | Facility                        |   |
| 3.         |   |   | Purpose                         |   |
| 4.         |   |   | Conditions  Precedent           |   |
| 5.         |   |   | Loan Utilisations               |   |
| 6.         |   |   | Guarantee  Utilisations         |   |
| 7.         |   |   | Optional  Currencies            |   |
| 8.         |   |   | Repayment                       |   |
| 9.         |   |   | Prepayment and Cancellation     |   |
| 10.        |   |   | Interest and Guarantee Fees     |   |
| 11.        |   |   | Terms                           |   |
| 12.        |   |   | Market  Disruption              |   |
| 13.        |   |   | Taxes                           |   |
| 14.        |   |   | Increased  Costs                |   |
| 15.        |   |   | Mitigation                      |   |
| 16.        |   |   | Payments                        |   |
| 17.        |   |   | Guarantee  and Indemnity        |   |
| 18.        |   |   | Representations and  Warranties |   |
| 19.        |   |   | Information  Covenants          |   |
| 20.        |   |   | Financial  Covenants            |   |
| 21.        |   |   | General  Covenants              |   |
| 22.        |   |   | Default                         |   |
| 23.        |   |   | The Administrative Parties      |   |
| 24.        |   |   | Evidence and Calculations       |   |
| 25.        |   |   | Fees                            |   |
| 26.        |   |   | Indemnities and Break Costs     |   |
| 27.        |   |   | Expenses                        |   |
| 28.        |   |   | Amendments  and Waivers         |   |
| 29.        |   |   | Changes  to the Parties         |   |
| 30.        |   |   | Disclosure of Information       |   |
| 31.        |   |   | Set-off                         |   |
| 32.        |   |   | Pro Rata  Sharing               |   |
| 33.        |   |   | Severability                    |   |
| 34.        |   |   | Counterparts                    |   |
| 35.        |   |   | Notices                         |   |
| 36.        |   |   | Language                        |   |
| 37.        |   |   | Governing Law                   |   |
| 38.        |   |   | Enforcement                     |   |

 

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| **Schedule** |   |   |                                                                                            |
|--------------|--------|--------|-------------------------------------------------------------------------------------------------|
| 1.           |   |   | Original Parties                                                                                |   |
|         |   |   | Part 1 Original Borrowers                                                                  |   |
|         |   |   | Part 2 Issuing Banks                                                                       |   |
|         |   |   | Part 3 Lenders—Medium-Term Facility                                                   |   |
|         |   |   | Part 4 Lenders—Short-Term Facility                                                    |   |
| 2.           |   |   | Conditions precedent documents                                                                  |   |
|         |   |   | Part 1 To be delivered before the First  Request                                           |   |
|         |   |   | Part 2 For an Additional Borrower                                                          |   |
| 3.           |   |   | Form of Request                                                                                 |   |
| 4.           |   |   | Form of Guarantee                                                                               |   |
| 5.           |   |   | Calculation of the Mandatory Cost                                                               |   |
| 6.           |   |   | Forms of Transfer Certificate                                                                   |   |
|         |   |   | Part 1 Form for Transfers by Assignment                                                    |   |
|         |   |   | Part 2 Form for Transfers by Novation                                                      |   |
| 7.           |   |   | Existing Security and Existing  Indebtedness                                                    |   |
|         |   |   | Part 1 Existing Security Interest                                                          |   |
|         |   |   | Part 2 Existing Indebtedness                                                               |   |
| 8.           |   |   | Form of Compliance Certificate                                                                  |   |
| 9.           |   |   | Form of Accession Agreement                                                                     |   |
| 10.          |   |   | Form of Resignation Request                                                                     |   |
| 11.          |   |   | Form of *Taux Effectif Global* Letter                                                           |   |
| 12.          |   |   | ERISA Events                                                                                    |   |
| 13.          |   |   | Intra-Group Loans                                                                               |   |
|         |   |   | Part 1 Intercompany  Loans / Borrowings between Rhodia S.A. and its Subsidiaries |   |
|         |   |   | Part 2 Intercompany  Loans / Borrowings between the Rhodia Subsidiaries          |   |
| 14.          |   |   | Business Plan including Liquidity  Analysis                                                     |   |
|         |   |   | Part 1 Rhodia Business Plan After Disposals                                                |   |
|         |   |   | Part 2 Liquidity Analysis                                                                  |   |
| 15.          |   |   | Supplemental Secured Assets                                                                     |   |
| 16.          |   |   | Agreed Lease Amendment Principles                                                               |   |
|         |   |   | Part 1 Original Agreed Lease Amendment  Principles                                         |   |
|         |   |   | Part 2 Supplemental Lease Amendment  Principles                                            |   |
| 17.          |   |   | Signatories                                                                                     |   |
|              |        |        |                                                                                                 |  |  |

 

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**THIS AGREEMENT** isdated 31st March, 2004

 

BETWEEN:

 

(1)**                                  RHODIA**,a company incorporated as a French *société anonyme* under the Laws of France,the registered office of which is at 26 quai Alphonse le Gallo, 92100 BoulogneBillancourt, registered with the Trade and Companies Registry (*Registre duCommerce et des Sociétés*) of Nanterre under the number 352-170-161as borrower and guarantor (the **Company**);

 

(2)**                                  THESUBSIDIARIES OF THE COMPANY** listed in Schedule 1 (Original Parties) asoriginal borrowers (in this capacity the **Original Borrowers**);

 

(3)**                                  BNPPARIBAS, CRÉDIT AGRICOLE INDOSUEZ S.A.** and **HSBC CCF** as arrangers (inthis capacity the **Arrangers**);

 

(4)**                                  THEFINANCIAL INSTITUTIONS** listed in Schedule 1 (Original Parties) asoriginal lenders (the **Original Lenders**);

 

(5)**                                  BNPPARIBAS** as facility agent (in this capacity the **Facility Agent**); and

 

(6)**                                  BNPPARIBAS** as security agent (in this capacity the **Security Agent**).

 

**IT IS AGREED** asfollows: 

 

**1.****                                      INTERPRETATION**

 

**1.1****                               Definitions**

 

In this Agreement:

 

**Accession Agreement**means a letter, substantially in the form of Schedule 9 (Form of AccessionAgreement), with such amendments as the Facility Agent may approve orreasonably require.

 

**Additional Borrower**means a member of the Group which becomes a Borrower after the date of thisAgreement.

 

**Administrative Party**means an Arranger, the Facility Agent, the Security Agent or an Issuing Bank.

 

**Agreed Affected Lease Facilities**means each of the SG and Cranbury US synthetic leases and the leasing “Chase”referred to under the heading “Operating leases” in Schedule 7 Part 2(Existing Indebtedness) in each case once and only to the extent amended inaccordance with the Agreed Lease Amendment Principles and provided as adocumentary condition precedent under Schedule 2 (Conditions precedentdocuments) in a form and substance satisfactory to the Majority Lenders. Forthe avoidance of doubt the definition of Agreed Affected Lease Facilities shallnot have any effect under this Agreement until and only to the extent that theamendments referred to in this definition have been made in accordance withthis definition and are in full force and effect.

 

**Affiliate** means aSubsidiary or a Holding Company of a person or any other Subsidiary of thatHolding Company.

 

**Agreed Lease Amendment Principles**means the original agreed lease amendment principles set out in Part 1 ofSchedule 16 (Original Agreed Lease Amendment Principles) as supplementedby the supplemental lease amendment principles set out in Part 2 ofSchedule 16 (Supplemental Lease Amendment Principles) together with anyother amendments satisfactory to the Majority Lenders.

 

**Agreed Security Principles**has the meaning set out in the Secured Co-ordination Agreement as supplementedfrom time to time and in any event including the supplemental secured assetsset out in Schedule 15 (Supplemental Secured Assets).

 

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**Asset Disposal Programme**means together:

 

(a)                                  anasset disposal programme generating net cash proceeds of not less than€400,000,000 by no later than 30th June, 2004 (of which no less than€200,000,000 is actually received by the Company in cash by that date withoutcondition, with the balance to be received in cash, subject only tosatisfaction of conditions outside the control of the buyer or seller (or theirrespective affiliates) under binding sale and purchase agreements entered intoprior to 30th June, 2004, and where such balance is actually received in cashin any event on or before 31st December, 2004); and

 

(b)                                 anadditional asset disposal programme generating additional net cash proceeds ofnot less than €700,000,000 minus the net cash proceeds generated from the firstdisposal programme referred to in paragraph (a) above, to be received by theCompany by no later than 31st December, 2004,

 

in each case where **net cashproceeds** means cash proceeds net of any Taxes payable in thefinancial year in which the disposal is effected or proceeds received andreasonable third party costs and expenses attributable to the disposal, receiptor recovery, as set out in reasonable detail in a certificate provided to theFacility Agent by the chief financial officer of the Company.

 

**Availability Period**means the Medium-Term Facility Availability Period or the Short-Term Facility AvailabilityPeriod.

 

**Borrower** means theCompany, an Original Borrower or an Additional Borrower.

 

**Break Costs** meansthe amount (if any) which a Lender is entitled to receive under Clause 26.3(Break Costs) as compensation if any part of a Loan or overdue amount is repaidor prepaid.

 

**Business Day** meansa day (other than a Saturday or a Sunday) on which banks are open for generalbusiness in London, New York and Paris and:

 

(a)                                  inrelation to a transaction involving a currency other than euro, the principalfinancial centre of the country of that currency; or

 

(b)                                 inrelation to a payment date for euro, a TARGET Day.

 

**Business Plan** meansthe business plan to be provided by the Company to the Lenders in the form setout in Schedule 14 (Business Plan including Liquidity Analysis) as updatedon a quarterly basis to include the Liquidity Analysis.

 

**Chargor** means eachmember of the Group granting a Security Interest under a Security Document.

 

**Code** means theUnited States Internal Revenue Code of 1986, as amended and the rules andregulations promulgated thereunder from time to time in effect.

 

**Commitment** means aMedium-Term Facility Commitment or a Short-Term Facility Commitment.

 

**Compliance Certificate**means a certificate substantially in the form of Schedule 8 (Form ofCompliance Certificate) setting out, among other things, calculations of thefinancial covenants.

 

**Consolidated Net Income**means the consolidated net income of the Company and its Subsidiaries for anyperiod, adjusted by:

 

(a)                                  deductingany amount attributable to minority interests;

 

(b)                                 excludingany gain or loss, together with any related provision for taxes on such gain(but not loss), realised in connection with: (i) any sale of assets; or (ii)the disposal of any securities by the Company or any of its Subsidiaries; and

 

2

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(c)                                  excludingthe termination or discharge of any Financial Indebtedness of the Company orany of its Subsidiaries.

 

**Co-ordinating Committee**means the committee appointed in accordance with a co-ordinating committeeletter dated 30th November, 2003.

 

**Dangerous Substance**means any radioactive emissions, noise and any natural or artificial substance(in whatever form) the generation, transportation, storage, treatment ordisposal of which (whether alone or in combination with any other substance)gives rise to a risk of causing harm to man or any other living organism ordamaging the Environment or public health or welfare including (withoutlimitation) any controlled, special, hazardous, toxic, radioactive or dangerouswaste.

 

**Default** means:

 

(a)                                  anEvent of Default; or

 

(b)                                 anevent or circumstance which with the expiry of a grace period, the giving ofnotice, the making of any determination of materiality or fulfilment of any otherapplicable condition (or any combination of the foregoing) is likely toconstitute an Event of Default.

 

**Derivative Deposit**has the meaning given to that term in the Secured Co-ordination Agreement.

 

**Derivative Instrument**means any swap, cap, collar, floor, option, forward or any other agreement orarrangement in the nature of a derivative instrument.

 

**Dollars** means thelawful currency for the time being of the United States of America.

 

**Environment** meansall, or any of, the following media: the air (including air within othernatural or man-made structures above or below ground), water (including,without limitation, ground and surface water) and land (including, withoutlimitation, surface and sub-surface soil).

 

**Environmental Law**means all laws (including, without limitation, common law), regulations,directives, codes of practice, circulars, guidance notes and the like havinglegal effect concerning the protection of human health, the Environment, theconditions of the workplace or the generation, transportation, storage,treatment or disposal of Dangerous Substances.

 

**Environmental Licence**means any permit, licence, authorisation, consent or other approval required byany Environmental Law.

 

**ERISA** means theUnited States Employee Retirement Income Security Act of 1974 and the rules andregulations promulgated thereunder from time to time in effect.

 

**ERISA Affiliate**means any trade or business (whether or not incorporated) that is treated as asingle employer together with the Company under section 414 of the Code.

 

**ERISA Event** meansany event specified in Schedule 12 (ERISA Events).

 

**EURIBOR** means for aTerm of any Loan or overdue amount in euro:

 

(a)                                  theapplicable Screen Rate; or

 

(b)                                 ifno Screen Rate is available for that Term of that Loan or overdue amount, thearithmetic mean (rounded upward to four decimal places) of the rates assupplied to the Facility Agent at its request quoted by the Reference Banks toleading banks in the European interbank market,

 

as of 11.00 a.m.(Brussels time) on the Rate Fixing Day for the offering of deposits in euro fora period comparable to that Term.

 

3

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**EURIBOR Reference Banks**means, subject to Clause 29.8 (Changes to the Reference Banks), BNP Paribas,Crédit Agricole Indosuez and CCF acting through their Paris branches and TheRoyal Bank of Scotland plc.

 

**euro** means thesingle currency of the Participating Member States.

 

**Event of Default**means an event specified as such in Clause 22 (Default).

 

**Existing Facility**means each of the facilities made available to the Group and the RelevantEntities under the Facility Agreements, brief details of which are listed inSchedule 7 Part 2 (Existing Indebtedness).

 

**Existing Security Interests**means any Security Interest granted by any member of the Group over any assetof that member in respect of any Existing Facility as listed in Schedule 7Part 1 (Existing Security).

 

**Facility** means theMedium-Term Facility or the Short-Term Facility.

 

**Facility Agent’s Spot Rate ofExchange** has the meaning given in Clause 7.1 (General).

 

**Facility Agreement**means any agreement or instrument constituting or evidencing any facility forfinancial accommodation for a member of the Group or a Relevant Entity.

 

**Facility Office**means the office(s) notified by a Lender to the Facility Agent:

 

(a)                                  onor before the date it becomes a Lender; or

 

(b)                                 bynot less than five Business Days’ notice,

 

as the office(s) throughwhich it will perform its obligations under this Agreement.

 

**Fee Letter** meansany letter entered into by reference to this Agreement between one or moreAdministrative Parties and the Company setting out the amount of certain feesreferred to in this Agreement.

 

**Final Maturity Date**means in relation to the Medium-Term Facility the Medium-Term Facility FinalMaturity Date and in relation to the Short-Term Facility the Short-TermFacility Final Maturity Date.

 

**Finance Document**means:

 

(a)                                  thisAgreement;

 

(b)                                 aSecurity Document;

 

(c)                                  theIntercreditor and Sharing Deed;

 

(d)                                 theSubordination Agreement;

 

(e)                                  aGuarantee;

 

(f)                                    aFee Letter;

 

(g)                                 aTransfer Certificate;

 

(h)                                 anAccession Agreement; or

 

(i)                                     anyother document designated as such by the Facility Agent and the Company.

 

**Finance Party** meansa Lender or an Administrative Party.

 

**Financial Indebtedness**means any indebtedness for or in respect of:

 

(a)                                  moneysborrowed and debit balances at banks;

 

4

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(b)                                 anydebenture, bond, note, loan stock or other similar instrument;

 

(c)                                  anyacceptance credit;

 

(d)                                 receivablessold or discounted (otherwise than on a non-recourse basis) including, for theavoidance of doubt, Securitisation Programmes and sale of receivables underExisting Facilities;

 

(e)                                  theacquisition cost of any asset to the extent payable before or after itsacquisition or possession by the party liable where the advance or deferredpayment is arranged primarily as a method of raising finance or financing theacquisition of that asset;

 

(f)                                    anylease (including, without limitation, a capital lease and each lease listed inSchedule 7 Part 2 (Existing Indebtedness)) entered into primarily as amethod of raising finance or financing the acquisition of the asset leased;

 

(g)                                 anyDerivative Instrument (and the amount of Financial Indebtedness in relation tosuch Derivative Instrument shall be the “marked to market” value of thatinstrument and shall take into account the operation of any netting provisionscontained within that Derivative Instrument);

 

(h)                                 anyamount outstanding or any amount raised through any other transaction(including any forward sale or purchase agreement) which has the commercialeffect of a borrowing or raising of money;

 

(i)                                     anycounter-indemnity obligation in respect of any guarantee, indemnity, bond,letter of credit or any other instrument issued by a bank or financialinstitution; or

 

(j)                                     anyguarantee, indemnity or similar assurance against financial loss of any personin respect of any indebtedness incurred under paragraphs (a) to (i) above.

 

**Group** means theCompany and its Subsidiaries.

 

**Group Structure Chart**means the chart describing the capital and share ownership of all the membersof the Group delivered as a condition precedent under Schedule 2(Conditions precedent documents).

 

**Guarantee** means anyguarantee issued or to be issued by the Issuing Banks under Tranche A (a **Tranche AGuarantee**) or Tranche B (a **Tranche B Guarantee**) up to a maximumaggregate amount of €100,000,000 at the request of the Borrowers under thisAgreement.

 

**Guarantee Account Party**means a member of the Group (other than a Borrower) on whose account aGuarantee is requested or issued from time to time at the request of theCompany.

 

**Guarantee Facility**means the guarantee facility referred to in Clause 2.1(a) (Facility).

 

**High Yield Bonds**means the 7.625% US dollar denominated senior notes due 2010, the 8.0% eurodenominated senior notes due 2010, the 8.875% US dollar denominated seniornotes due 2011 and the 9.25% euro denominated senior notes due 2011.

 

**Holding Company** ofany other person, means a company in respect of which that other person is aSubsidiary.

 

**IBOR** means LIBOR,PIBOR or EURIBOR.

 

**Increased Cost**means:

 

(a)                                  anadditional or increased cost;

 

(b)                                 areduction in the rate of return from a Facility or on its overall capital; or

 

(c)                                  areduction of an amount due and payable under any Finance Document,

 

which is incurred orsuffered by a Finance Party or any of its Affiliates but only to the extentattributable to that Finance Party having entered into any Finance Document orfunding or performing its obligations under any Finance Document.

 

5

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**Inter-Company Creditor**means each member of the Group, other than the Company, which is the creditorof an Intra-Group Loan.

 

**Intercreditor and Sharing Deed**means the intercreditor and sharing deed to be entered into between, amongothers, the Obligors and the Finance Parties (referred to in the SecuredCo-ordination Agreement as the Security Sharing Agreement).

 

**Intra-Group Loan**means any intra-group loan made by a member of the Group not forming part ofthe Group’s cash pooling arrangements or, if it is included in the Group’s cashpooling arrangements, is a loan with a maturity of fifteen days or greater.

 

**Issuing Bank** meanseach Lender specified in Part 2 of Schedule 1 (Original Parties) and anyother Lender from time to time designated an Issuing Bank in accordance withClause 6.16(g).

 

**Joint Venture Entity**means any unconsolidated subsidiary of the Company or joint venture entity inwhich the Company owns or effectively controls, directly or indirectly at leasttwenty per cent. (20%) of the capital and voting rights.

 

**Lender** means:

 

(a)                                  anOriginal Lender; or

 

(b)                                 anyperson which becomes a Lender after the date of this Agreement.

 

**LIBOR** means for aTerm of any Loan or overdue amount:

 

(a)                                  theapplicable Screen Rate; or

 

(b)                                 ifno Screen Rate is available for the relevant currency or Term of that Loan oroverdue amount, the arithmetic mean (rounded upward to four decimal places) ofthe rates, as supplied to the Facility Agent at its request, quoted by theReference Banks to leading banks in the London interbank market,

 

as of 11.00 a.m. on theRate Fixing Day for the offering of deposits in the currency of that Loan oroverdue amount for a period comparable to that Term.

 

**LIBOR Reference Banks**means, subject to Clause 29.8 (Changes to the Reference Banks), BNP Paribas,Crédit Agricole Indosuez, HSBC Bank Plc and The Royal Bank of Scotland plcacting through their London branches.

 

**Limited Recourse** meansany of:

 

(a)                                  customaryrecourse by any provider of Financial Indebtedness incurred by a member of theGroup in connection with securitisation of receivables pursuant to the existingterms of an existing Securitisation Programme to the extent such recourse maybe incurred by that member of the Group in accordance with such terms on thedate of this Agreement; or

 

(b)                                 recourseby any provider of Financial Indebtedness incurred by a member of the Group inconnection with the refinancing or replacement of a Securitisation Programme bya securitisation programme on substantially the same terms as the existingterms of that Securitisation Programme; or

 

(c)                                  recourseby any provider of Financial Indebtedness incurred by a member of the Group inconnection with securitisation of receivables pursuant to a securitisationprogramme to:

 

(i)                                     thereceivables;

 

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(ii)                                  thedebtor in respect of the Financial Indebtedness for the purpose of enforcing aSecurity Interest against it, so long as:

 

(A)                              theSecurity Interest is permitted pursuant to Clause 21.4 (Negative pledge);

 

(B)                                therecourse is limited to recoveries in respect of the receivables; and

 

(C)                                theprovider of the Financial Indebtedness does not have the right to take any steptowards the debtor’s winding up or dissolution or the appointment of aliquidator, administrator, administrative receiver or similar officer inrespect of it or its assets (other than the receivables);

 

(iii)                               anothermember of the Group, so long as:

 

(A)                              therecourse is limited to its shareholding or other interest in a company orentity incorporated solely for the purpose of owning and whose assets consistsolely of the receivables; and

 

(B)                                theprovider of the Financial Indebtedness does not have the right to take any steptowards the debtor’s winding-up or dissolution or the appointment of aliquidator, administrator, administrative receiver or similar officer inrespect of it or its assets (other than its shareholding or other interest inthe debtor); or

 

(iv)                              amember of the Group under any form of assurance, undertaking or supportprovided that:

 

(A)                              recourseis limited to a claim for damages (not being liquidated damages or damagesrequired to be calculated in a specified way) for breach of a warranty orundertaking;

 

(B)                                anyclaim for breach of warranty relates to the receivables and is subject to anaggregate maximum limit not exceeding the net proceeds received from thesecuritisation of the receivables;

 

(C)                                anyclaim for breach of undertaking relates to the management and/or collection ofthe receivables; and

 

(D)                               solong as the obligation is not in any way a guarantee, indemnity or otherassurance against financial loss or an obligation to ensure compliance byanother with a financial ratio or other test of financial condition.

 

**Liquidity Analysis**means the liquidity analysis forming part of the Business Plan and in the formset out in Part 2 of Schedule 14 (Business Plan including LiquidityAnalysis) as updated from time to time by the Company and submitted to theLenders pursuant to Clauses 19.1(g)(i) or 19.1(g)(ii).

 

**Liquidity Headroom**means €350,000,000.

 

**Loan** means, unlessotherwise stated in this Agreement, the principal amount of each borrowingunder this Agreement or the principal amount outstanding of that borrowing.

 

**Majority Lenders**means, at any time, Lenders:

 

(a)                                  whoseshare in the outstanding Utilisations and whose undrawn Commitments thenaggregate 66 2/3 per cent. or more of the aggregate of all the outstandingUtilisations and the undrawn Commitments of all the Lenders;

 

(b)                                 ifthere is no Utilisation then outstanding, whose undrawn Commitments thenaggregate 66 2/3 per cent. or more of the Total Commitments; or

 

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(c)                                  ifthere is no Utilisation then outstanding and the Total Commitments have beenreduced to zero, whose Commitments aggregated 66 2/3 per cent. or more of theTotal Commitments immediately before the reduction.

 

**Mandatory Cost**means the cost of complying with certain regulatory requirements, expressed asa percentage rate per annum and calculated by the Facility Agent underSchedule 5 (Calculation of the Mandatory Cost).

 

**Margin** means 3.05per cent. per annum.

 

**Material Adverse Effect**means a material adverse effect on or circumstance affecting:

 

(a)                                  thebusiness, assets or financial condition of the Company, a Material Subsidiaryor the Group (taken as a whole); or

 

(b)                                 theability of any Obligor (other than an Additional Borrower) or MaterialSubsidiary to perform or comply with any of its payment obligations or tocomply with or perform any other material obligation in each case under anyFinance Document; or

 

(c)                                  theability of any Additional Borrower to perform or comply with any of its paymentobligations (after taking into account any realisation of the guarantee underClause 17 (Guarantee and Indemnity)) or to comply with any other materialobligation in each case under any Finance Document; or

 

(d)                                 thevalidity or enforceability of any Finance Document or the effectiveness of anySecurity Interest over the assets purported to be covered by any SecurityDocument, or the value of the security (taken as a whole).

 

**Material Subsidiary**means, at any time, a Subsidiary of the Company whose net assets or EBITDA thenequal or exceed five per cent. (5%) of the total net assets or EBITDA of theGroup.

 

For this purpose:

 

(a)                                  thenet assets or EBITDA of a Subsidiary of the Company will be determined from itsfinancial statements (consolidated if it has Subsidiaries) upon which thelatest audited annual or unaudited semi-annual financial statements of theGroup have been based;

 

(b)                                 ifa Subsidiary of the Company becomes a member of the Group after the date onwhich the latest audited financial statements of the Group have been prepared,the net assets or EBITDA of that Subsidiary will be determined from its latestfinancial statements;

 

(c)                                  thetotal net assets or EBITDA of the Group will be determined from its latestaudited annual or unaudited semi-annual financial statements, adjusted (whereappropriate) to reflect the net assets or EBITDA of any company or businesssubsequently acquired or disposed of; and

 

(d)                                 ifa Material Subsidiary disposes of all or substantially all of its assets toanother Subsidiary of the Company, it will immediately cease to be a MaterialSubsidiary and the other Subsidiary (if it is not already) will immediatelybecome a Material Subsidiary; the subsequent financial statements of thoseSubsidiaries and the Group will be used to determine whether those Subsidiariesare Material Subsidiaries or not.

 

If there is a dispute asto whether or not a company is a Material Subsidiary under paragraph (b) ofthis definition, a certificate of the auditors of the Company will be, in theabsence of manifest error, conclusive.

 

For the purposes of theabove, each reference to EBITDA is to EBITDA as defined in Clause 20.1(Financial covenant definitions).

 

**Maturity Date** meansthe last day of the Term of a Utilisation.

 

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**Medium-Term Facility**means the multicurrency revolving credit and guarantee facility referred to inClause 2.1(a) (Facility) divided into Tranche A and Tranche B.

 

**Medium-Term Facility AvailabilityPeriod** means the period from and including the date of thisAgreement to and including the date falling one month prior to the Medium-TermFacility Final Maturity Date.

 

**Medium-Term Facility Commitment**means:

 

(a)                                  foran Original Lender:

 

(i)                                     theamount set opposite its name in Part 3 (Lenders—Medium-Term Facility) ofSchedule 1 (Original Parties) under the heading “Tranche A” (**Tranche AMedium-Term Facility Commitment**) and the amount of any other TrancheA Medium-Term Facility Commitment it acquires; and

 

(ii)                                  theamount set opposite its name in Part 3 (Lenders—Medium-Term Facility) ofSchedule 1 (Original Parties) under the heading “Tranche B” (**Tranche BMedium-Term Facility Commitment**) and the amount of any other TrancheB Medium-Term Facility Commitment it acquires; and

 

(b)                                 forany other Lender, the amount of any Tranche A Medium-Term Facility Commitmentor Tranche B Medium-Term Facility Commitment it acquires,

 

to the extent notcancelled, transferred or reduced under this Agreement (collectively, the **TotalMedium-Term Facility Commitments**).

 

**Medium-Term Facility Final MaturityDate** means 31st March, 2006.

 

**Medium-Term Facility Lenders**means the Lenders referred to in Part 3 of Schedule 1 (Original Parties).

 

**Medium-Term Facility Loan**means the principal amount of a borrowing by a Borrower under Tranche A (a **Tranche ALoan**) and Tranche B (a **Tranche B Loan**) of the Medium-TermFacility, or the principal amount outstanding of that borrowing.

 

**Multiemployer Plan**means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, towhich the Company or any ERISA Affiliate is making or accruing (or is requiredto make or accrue) an obligation to make contributions, or has within any ofthe preceding five plan years made or accrued (or was required to make oraccrue) an obligation to make contributions.

 

**Obligor** means theCompany, a Borrower, a Chargor, an Inter-Company Creditor or a GuaranteeAccount Party.

 

**Optional Currency**means Dollars, Sterling, Swiss Francs and Yen.

 

**Original Business Plan**means the Business Plan as validated by Ernst & Young on 26th January,2004.

 

**Original Financial Statements**means the audited consolidated financial statements of each Borrower for theyear ended 31st December, 2003.

 

**Original Obligor**means the Company, an Original Borrower, a Chargor or an Inter-Company Creditor.

 

**Participating Member State**means a member state of the European Communities that adopts or has adopted theeuro as its lawful currency under the legislation of the European Community forEconomic Monetary Union.

 

**Party** means a partyto this Agreement.

 

9

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**PBGC** means thePension Benefit Guaranty Corporation referred to and defined in ERISA or anysuccessor thereto.

 

**Permitted Reorganisation**means an amalgamation, demerger, merger or reconstruction involving a Borrower:

 

(a)                                  fulldetails of which are provided by the Company to the Facility Agent in a timelymanner prior to its taking place; and

 

(b)                                 wherethe surviving entity (whether or not it is the Company) has a long-termcorporate credit rating from Standard & Poor’s of BBB-or higher or anequivalent rating from Moody’s; and

 

(c)                                  inrelation to which the Facility Agent has first received legal opinions fromexternal counsel addressed to the Finance Parties, in form and substancesatisfactory to the Facility Agent, confirming:

 

(i)                                     eitherthat the Company shall be the surviving entity and that notwithstanding suchamalgamation, demerger or reconstruction, the Finance Documents shall remain atall times the legal, valid and binding obligations of the Company, enforceablein accordance with their terms; or

 

(ii)                                  thatupon such amalgamation, demerger or reconstruction the surviving entity (notbeing the Company) will accede to the obligations of the Company under theFinance Documents in full and that the Finance Documents shall be the legal,valid and binding obligations of the surviving entity, enforceable inaccordance with their terms; and

 

(d)                                 inthe case of the Company, where the surviving entity remains parent of the Groupand in the case of any other Borrower, where the surviving entity remains aSubsidiary of the Group; and

 

(e)                                  wherethe place of incorporation and registered head office of the surviving entityin the case of the Company is within the European Union at the date of thisAgreement and in the case of Rhodia Inc. is within the United States of Americaor the European Union at the date of this Agreement,

 

and to which the FacilityAgent (acting on the instructions of the Requisite Lenders) has given its priorwritten consent.

 

**PIBOR** means for aTerm of any Loan or overdue amount in Sterling the arithmetic mean (roundedupward to four decimal places) of the rates as supplied to the Facility Agentat its request quoted by the Reference Banks to leading banks in the Parisinterbank market at or about 11.00 a.m. (Paris time) on the Rate Fixing Day forthe offering of deposits in Sterling for a period comparable to that Term.

 

**PIBOR Reference Banks**means, subject to Clause 29.8 (Changes to the Reference Banks), BNP Paribas,Crédit Agricole Indosuez and CCF acting through their Paris branches.

 

**Plan** means a SingleEmployer Plan or a Multiemployer Plan.

 

**Prepayment Event**means any of:

 

(a)                                  theentry by a Borrower into any amalgamation, demerger, merger or reconstructionwhich is not a Permitted Reorganisation (including, without limitation, anamalgamation, demerger, merger or reconstruction resulting from or constitutedby a Borrower making a disposal or disposals of assets, or a MaterialSubsidiary making a disposal or disposals of assets to a Borrower in each caseunder Clause 21.6 (Disposals) but excluding, for the avoidance of doubt, assetsdisposed of under Clause 21.6(b)(iv)); or

 

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(b)                                 anyperson, or group of persons acting in concert, acquires control of more thanfifty per cent. (50%) of the issued and fully paid up share capital or votingrights in a Borrower; or

 

(c)                                  thedirect or indirect sale, transfer, conveyance or other disposition (other thanby way of merger or consolidation permitted by and made in accordance with theprovisions of this Agreement) in one or a series of related transactions, ofall or substantially all of the properties or assets or business of a Borrowerand its Subsidiaries taken as a whole; or

 

(d)                                 theadoption of a plan relating to the liquidation or dissolution of a Borrower,without prejudice to the provisions of Clauses 22.7(b) and 22.7(d).

 

**Pro Rata Share**means:

 

(a)                                  forthe purpose of determining a Lender’s share in a Utilisation under a Tranche ofthe Medium-Term Facility, the proportion which its Commitment bears to theTotal Commitments in respect of that Tranche of that Facility;

 

(b)                                 forthe purpose of determining a Lender’s share in any other Utilisation of aFacility, the proportion which its Commitment bears to the Total Commitments inrespect of that Facility; and

 

(c)                                  forany other purpose on a particular date:

 

(i)                                     theproportion which a Lender’s share of the Utilisations (if any) bears to all theUtilisations under that Facility;

 

(ii)                                  ifthere is no Utilisation outstanding on that date, the proportion which itsCommitment bears to the Total Commitments on that date in respect of thatFacility; or

 

(iii)                               ifthe Total Commitments have been cancelled, the proportion which its Commitmentbore to the Total Commitments in respect of that Facility immediately beforebeing cancelled.

 

**Rate Fixing Day**means:

 

(a)                                  thefirst day of a Term for a Loan denominated in domestic Sterling;

 

(b)                                 thesecond Business Day before the first day of a Term for a Loan denominated inany other currency (other than euro); or

 

(c)                                  thesecond TARGET Day before the first day of a Term for a Loan denominated ineuro,

 

or such other day as theFacility Agent determines is generally treated as the rate fixing day by marketpractice in the relevant interbank market.

 

**Reference Banks**means:

 

(a)                                  inrelation to a Loan or an amount outstanding in euro, the EURIBOR ReferenceBanks;

 

(b)                                 inrelation to a Loan or an amount outstanding in Dollars, domestic Sterling,Swiss Francs or Yen, the LIBOR Reference Banks; and

 

(c)                                  inrelation to a Loan or an amount outstanding in euro Sterling, the PIBORReference Banks.

 

**Refinanced Facilities**means each of the Existing Facilities identified in Schedule 7 Part 2(Existing Indebtedness) designated as “Refinanced Facilities”.

 

**Relevant Entity**means a Joint Venture Entity in relation to the Financial Indebtedness ofwhich, a member of the Group has given a guarantee, indemnity or similarassurance against financial loss.

 

**Repeating Representations**means the representations which are deemed to be repeated under Clause 18.26(Times for making representations).

 

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**Request** means arequest for a Utilisation, substantially in the form of Schedule 3 (Formof Request).

 

**Requisite Lenders**means, at any time, Lenders:

 

(a)                                  whoseshares in the Utilisations then outstanding aggregate more than fifty per cent.(50%) of all the Utilisations then outstanding; or

 

(b)                                 ifthere are no Utilisations then outstanding, whose Commitments then aggregatemore than fifty per cent. (50%) of the Total Commitments; or

 

(c)                                  ifthere are no Utilisations then outstanding and the Total Commitments have beenreduced to nil, whose Commitments aggregated more than fifty per cent. (50%) ofthe Total Commitments immediately before the reduction.

 

**Rights Issue** meansany equity rights issue by the Company generating net cash proceeds of no lessthan €300,000,000 to be launched by the Company by no later than 15th May, 2004where net cash proceeds means cash proceeds net of any Taxes and third partycosts and expenses attributable to the issue as set out in reasonable detail ina certificate provided to the Facility Agent by the chief financial officer ofthe Company.

 

**Rollover Utilisation**means one or more Utilisations:

 

(a)                                  tobe made on the same day that a maturing Utilisation is due to be repaid;

 

(b)                                 theaggregate amount of which is equal to or less than the maturing Utilisation;

 

(c)                                  inthe same currency as the maturing Utilisation; and

 

(d)                                 tobe made to the same Borrower for the purpose of refinancing a maturing Loan orextending a Guarantee pursuant to 6.5 (Extension of a Guarantee).

 

**Screen Rate** means:

 

(a)                                  forLIBOR, the British Bankers Association Interest Settlement Rate; and

 

(b)                                 forEURIBOR, the percentage rate per annum determined by the Banking Federation ofthe European Union,

 

for the relevant currencyand Term displayed on the appropriate page of the Telerate screen selected bythe Facility Agent. If the relevant page is replaced or the service ceases tobe available, the Facility Agent (after consultation with the Company and theLenders) may specify another page or service displaying the appropriate rate.

 

**Second Amendment Agreement**means the second amendment agreement to the USPP.

 

**Secured Co-ordination Agreement**means the secured co-ordination agreement entered into on 23rd December, 2003between, amongst others, the Company, the Intercreditor Agent (as definedtherein) and the Lenders (as defined therein).

 

**Secured Intra-Group Loan**means a loan made by the Company to a member of the Group which is, or inaccordance with the Agreed Security Principles is intended to be, directly and/orindirectly subject to a Security Document granted in favour of the Company.

 

**Securitisation Programmes**means the securitisation programmes arranged by the Company from time to time,being at the date of this Agreement with each of BNP Paribas, Wachovia, ABNAmro and CIC/Crédit Mutuel.

 

**Security Agent**means the security agent appointed or to be appointed pursuant to theIntercreditor and Sharing Deed.

 

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**Security Document**means any document entered into by a member of the Group evidencing orconferring a Security Interest over any of its assets in favour of the Companywith respect to its obligations under a Secured Intra-Group Loan or in favourof the Finance Parties with respect to its obligations under the FinanceDocuments.

 

**Security Interest**means any:

 

(a)*                                  hypothèque,nantissement, privilège*, *cession de créance à titre de garantie par bordereauDailly, gage-espèces* or any *sûreté réelle* or *droit de rétention*;

 

(b)                                 mortgage,pledge, lien, charge, assignment by way of security or for the purpose ofproviding security, hypothecation, right in security, security interest or (tothe extent applicable) trust arrangement for the purpose of providing security;and

 

(c)                                  othersecurity agreement or other arrangement having the effect of providing security(including, without limitation, cash collateral and the deposit of moneys orproperty with a person with the primary intention of affording such person aright of set-off).

 

**Short-Term Facility**means the multicurrency revolving credit facility referred to in Clause 2.1(b)(Facility).

 

**Short-Term Facility AvailabilityPeriod** means the period from and including the date of thisAgreement to and including 31st July, 2004 or, if a valid Request for a Loan inrespect of the Short-Term Facility is made before 31st July, 2004, 1stDecember, 2004.

 

**Short-Term Facility Commitment**means:

 

(a)                                  foran Original Lender, the amount set opposite its name in Part 4(Lenders—Short-Term Facility) of Schedule 1 (Original Parties) and theamount of any other Short-Term Facility Commitment it acquires; and

 

(b)                                 forany other Lender, the amount of any Short-Term Facility Commitment it acquires,

 

to the extent notcancelled, transferred or reduced under this Agreement (collectively the **TotalShort-Term Facility Commitments**).

 

**Short-Term Facility Final MaturityDate** means 31st July, 2004 or, if a valid Request for a Loanin respect of the Short-Term Facility is made before 31st July, 2004, 31stDecember, 2004.

 

**Short-Term Facility Lenders**means the Lenders referred to in Part 4 of Schedule 1 (Original Parties).

 

**Short-Term Facility Loan**means the principal amount of a borrowing by the Company under the Short-TermFacility, or the principal amount outstanding of that borrowing.

 

**Single Employer Plan**means a single employer plan, as defined in Section 4001(a)(15) of ERISA,that is subject to Title IV of ERISA and that (a) is maintained for theemployees of a Borrower or any ERISA Affiliate or which is subject to theminimum funding requirements of Section 302 of ERISA or Section 412of the Code or (b) was so maintained and in respect of which the Company or anyERISA Affiliate could reasonably be expected to have liability underSection 4069 of ERISA in the event such plan has been or were to be terminated.

 

**Subordination Agreement**means the subordination agreement to be entered into on or around the date ofthis Agreement between, among others, the Company, the Intercreditor Agent (asdefined therein), the Senior Creditors (as defined therein) and theInter-Company Creditors.

 

**Subsidiary** means anentity of which a person has direct or indirect control or owns directly orindirectly more than fifty per cent. (50%) of the share capital or similarright of ownership.

 

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**TARGET Day** means aday on which the Trans-European Automated Real-time Gross Settlement ExpressTransfer payment system 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 related penalty or interest).

 

**Tax Deduction** meansa deduction or withholding for or on account of Tax from a payment under aFinance Document.

 

**Tax Payment** means apayment made by an Obligor to a Finance Party in any way relating to a TaxDeduction or under any indemnity given by that Obligor in respect of Tax underany Finance Document.

 

**Term** means eachperiod determined under this Agreement:

 

(a)                                  byreference to which interest on a Loan or an overdue amount is calculated; or

 

(b)                                 forwhich the Issuing Banks may be under a liability under a Guarantee.

 

**Term Date** has themeaning given to that term in the Secured Co-ordination Agreement.

 

**Total Commitments**means the aggregate of the Commitments of all the Lenders under each and anyFacility.

 

**Tranche A** meansthat tranche of the Medium-Term Facility referred to in Clause 2.2 (Division ofthe Medium-Term Facility) in a amount of up to €532,522,724.

 

**Tranche A Lender**means a Lender with a Tranche A Medium-Term Facility Commitment.

 

**Tranche B** meansthat tranche of the Medium-Term Facility referred to in Clause 2.2 (Division ofthe Medium-Term Facility) in a amount of up to €105,974,473.

 

**Tranche B Lender**means a Lender with a Tranche B Medium-Term Facility Commitment.

 

**Tranche B Majority Lenders**means, at any time, the Tranche B Lenders:

 

(a)                                  whoseshare in the outstanding Utilisations and whose undrawn Commitments underTranche B then aggregate 66 2/3 per cent. or more of the aggregate of all theoutstanding Utilisations and the undrawn Commitments of all the Tranche BLenders;

 

(b)                                 ifthere is no Utilisation then outstanding under Tranche B, whose undrawnCommitments then aggregate 66 2/3 per cent. or more of the Total Commitmentsunder Tranche B; or

 

(c)                                  ifthere is no Utilisation then outstanding under Tranche B and the TotalCommitments under Tranche B have been reduced to zero, whose Commitmentsaggregated 66 2/3 per cent. or more of the Total Commitments under Tranche Bimmediately before the reduction.

 

**Transaction Document**means:

 

(a)                                  aFinance Document;

 

(b)                                 anyunderwriting or subscription agreements (or other contractual arrangementshaving a similar effect) entered into in relation to the Rights Issue;

 

(c)                                  anysale and purchase agreements (or other contractual arrangements having asimilar effect) entered into in relation to the Asset Disposal Programme; or

 

(d)                                 anyother document designated as such in writing by the Company and the FacilityAgent.

 

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**Transfer Certificate**means:

 

(a)                                  fora transfer by assignment, a certificate, substantially in the form of Part 1 ofSchedule 6 (Form of Transfer Certificate); and

 

(b)                                 fora transfer by novation, a certificate, substantially in the form of Part 2 ofSchedule 6 (Form of Transfer Certificate),

 

in each case with suchamendments as the Facility Agent may approve or reasonably require or any otherform agreed between the Facility Agent and the Company.

 

**U.K.** means theUnited Kingdom of Great Britain and Northern Ireland.

 

**USPP** means the US$215,000,000 note purchase agreement and US$ 75,000,000 note purchase agreementeach dated 30th July, 2002, as amended.

 

**Utilisation** means:

 

(a)                                  forLoans, all Loans made or to be made; or

 

(b)                                 forGuarantees, all the Guarantees issued or to be issued,

 

following the giving bythe relevant Borrower of a Request for those Loans or Guarantees.

 

**Utilisation Date**means each date on which a Facility is utilised.

 

**Withdrawal Liability**has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

 

**1.2****                               Construction**

 

(a)                                  Thefollowing definitions have the meanings given to them in Clause 20 (FinancialCovenants):

 

(i)                                     AdjustedEBITDAR;

 

(ii)                                  ConsolidatedNet Indebtedness;

 

(iii)                               ConsolidatedNet Worth;

 

(iv)                              EBITDA;

 

(v)                                 OperatingIncome;

 

(vi)                              Depreciationand Amortisation of Assets;

 

(vii)                           EBITDAR;

 

(viii)                        NetFinancial Expenses;

 

(ix)                                InterestExpenses;

 

(x)                                   InterestIncome;

 

(xi)                                RatioPeriod; and

 

(xii)                             TestingDate.

 

(b)                                 Inthis Agreement, unless the contrary intention appears, a reference to:

 

(i)**                                     actingin concert** has the meaning given to it in Article L.233-10 of theFrench *Codede Commerce*;

 

(ii)                                  documentsbeing in an **agreed form** means documents (A) in a form previously agreed inwriting by or on behalf of the Facility Agent and the Company, or (B) in a formsubstantially as 

 

15

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set out in anySchedule to any Finance Document, or (C) (if not falling within (A) or (B)above) in form and substance satisfactory to the Facility Agent (acting on theinstructions of the Lenders);

 

(iii)                               an **amendment**includes a supplement, novation, restatement or re-enactment and **amended**will be construed accordingly;

 

(iv)**                              assets**includes present and future properties, revenues and rights of everydescription;

 

(v)                                 an**authorisation**includes an authorisation, consent, approval, resolution, licence, exemption,filing, registration or notarisation;

 

(vi)**                              control**means the power to direct the management and policies of an entity, whetherthrough the ownership of voting capital, by contract or otherwise and/or hasthe meaning give to it in Article L.233-3 of the French *Code deCommerce*;

 

(vii)**                           disposal**means a sale, transfer, grant, lease or other disposal, whether voluntary orinvoluntary including, without limitation, a capital contribution and **dispose**will be construed accordingly;

 

(viii)**                        indebtedness**includes any obligation (whether incurred as principal or as surety) for thepayment or repayment of money;

 

(ix)                                a **person**includes any individual, company, corporation, unincorporated association orbody (including a partnership, trust, joint venture or consortium), government,state, agency, organisation or other entity whether or not having separatelegal personality;

 

(x)                                   a**regulation**includes any regulation, rule, official directive, request or guideline(whether or not having the force of law but, if not having the force of law,being of a type with which any person to which it applies is accustomed tocomply) of any governmental, intra-governmental or supranational body, agency,department or regulatory, self-regulatory or other authority or organisation;

 

(xi)                                the**equivalentin other currencies** or like terms, unless otherwise agreed or thecontext otherwise requires, means in relation to any amount expressed to bedenominated in a currency other than euro, the equivalent thereof in euroconverted at the Facility Agent’s Spot Rate of Exchange for the notional purchaseof euro with the currency concerned in the Paris foreign exchange market at orabout 11.00 a.m. on the day on which any such calculation falls to be made;

 

(xii)                             acurrency is a reference to the lawful currency for the time being of therelevant country;

 

(xiii)                          aDefault being **outstanding** means that it has not been remedied or waived;

 

(xiv)                         aprovision of law is a reference to that provision as extended, applied, amendedor re-enacted and includes any subordinate legislation;

 

(xv)                            aClause or a Schedule is a reference to a clause of, or a Schedule to,this Agreement;

 

(xvi)                         a Partyor any other person includes its successors in title, permitted assigns andpermitted transferees;

 

(xvii)                      a FinanceDocument, Transaction Document or another document is a reference to thatFinance Document, Transaction Document or other document as amended; and

 

(xviii)                   a time of dayis a reference to Paris time; and

 

(xix)                           for thepurposes of Clause 18.25 (United States laws) and Clause 21.25 (United Stateslaws) **FederalPower Act** means the United States Federal Power Act of 1920, asamended, **holdingcompany, affiliate** and **subsidiary company** have the meanings givento them in the PUHCA, **investment company** and **controlled** have the meaningsgiven to them in the United States 

 

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Investment Company Act of1940, as amended, **public utility** has the meaning given to itin the Federal Power Act and **PUHCA** means The Limited States PublicUtility Holding Company Act of 1935, as amended.

 

(c)                                  Unlessthe contrary intention appears, a reference to a **month** or **months** is a reference to aperiod starting on one day in a calendar month and ending on the numericallycorresponding day in the next calendar month or the calendar month in which itis to end, except that:

 

(i)                                     ifthe numerically corresponding day is not a Business Day, the period will end onthe next Business Day in that month (if there is one) or the preceding BusinessDay (if there is not);

 

(ii)                                  ifthere is no numerically corresponding day in that month, that period will endon the last Business Day in that month; and

 

(iii)                               notwithstandingsub-paragraph (i) above, a period which commences on the last Business Day of amonth will end on the last Business Day in the next month or the calendar monthin which it is to end, as appropriate.

 

(d)                                 Unlessexpressly provided to the contrary in a Finance Document, a person who is not aparty to a Finance Document may not enforce any of its terms under theContracts (Rights of Third Parties) Act 1999 and, notwithstanding any term ofany Finance Document, no consent of any third party is required for anyvariation (including any release or compromise of any liability) or terminationof that Finance Document.

 

(e)                                  Unlessthe contrary intention appears:

 

(i)                                     areference to a Party will not include that Party if it has ceased to be a Partyunder this Agreement;

 

(ii)                                  aword or expression used in any other Finance Document or in any notice given inconnection with any Finance Document has the same meaning in that FinanceDocument or notice as in this Agreement; and

 

(iii)                               anyobligation of an Obligor under the Finance Documents which is not a paymentobligation remains in force for so long as any payment obligation of an Obligoris or may be outstanding under the Finance Documents.

 

(f)                                    Theheadings in this Agreement do not affect its interpretation.

 

**1.3****                               Intercreditorand Sharing Deed and Subordination Agreement**  This Agreement is to be entered into with the benefit of andsubject to the Intercreditor and Sharing Deed and the Subordination Agreement. 

 

**2.****                                      FACILITY**

 

**2.1****                               Facility**  Subject to the terms of this Agreement, theLenders make available to the Borrowers the following facilities:

 

(a)                                  amulticurrency revolving loan and guarantee facility under which the Medium-TermLenders shall make Medium-Term Facility Loans and issue Guarantees in euro orin Optional Currencies up to in an aggregate amount equal to the TotalCommitments under the Medium-Term Facility; and

 

(b)                                 amulticurrency revolving loan facility under which the Short-Term Lenders shallmake Short-Term Facility Loans in euro or in Optional Currencies to the Companyup to in an aggregate amount equal to the Total Commitments under theShort-Term Facility.

 

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**2.2****                               Divisionof the Medium-Term Facility**

 

(a)                                  TheMedium-Term Facility shall be divided into two parts designated Tranche A andTranche B respectively.

 

(b)                                 Onlythe Tranche A Lenders shall be obliged to make Utilisations under Tranche A of theMedium-Term Facility and only the Tranche B Lenders shall be obliged to makeUtilisations under Tranche B of the Medium-Term Facility.

 

(c)                                  RhodiaInc. may request Loans under Tranche A until the USPP is prepaid and cancelledin full but in any event not later than 30th June, 2004 in a maximum euroAmount not to exceed €25,000,000 and in each case for a Term of no longer thanone month.

 

(d)                                 OnlyRhodia Inc. may request Utilisations under Tranche B of the Medium-TermFacility.

 

**2.3****                               Facilitylimits**

 

(a)                                  Theaggregate amount of all outstanding Loans and Guarantees shall not, at anytime, exceed the Total Commitments at that time.

 

(b)                                 Theaggregate amount of a Lender’s participation in all outstanding Medium-TermFacility Loans and its liability in respect of all outstanding Guaranteesissued by the relevant Issuing Bank under the relevant Tranche shall not, atany time, exceed its Medium-Term Facility Commitment under that Tranche.

 

(c)                                  Theaggregate amount of a Lender’s participation in all outstanding Short-TermFacility Loans shall not, at any time, exceed its Short-Term FacilityCommitment.

 

(d)                                 Themaximum aggregate amount of all outstanding and/or requested Guarantees shallnot, at any time, exceed €100,000,000.

 

**2.4****                               Natureof a Finance Party’s rights and obligations**

 

Unless otherwise agreedby all the Finance Parties:

 

(a)                                  theobligations of a Finance Party under the Finance Documents are several;

 

(b)                                 failureby a Finance Party to perform its obligations does not affect the obligationsof any other Party under the Finance Documents;

 

(c)                                  noFinance Party is responsible for the obligations of any other Finance Partyunder the Finance Documents;

 

(d)                                 therights of a Finance Party under the Finance Documents are separate andindependent rights;

 

(e)                                  aFinance Party may, except as otherwise stated in the Finance Documents,separately enforce those rights; and

 

(f)                                    adebt arising under the Finance Documents to a Finance Party is a separate andindependent debt. 

 

**3.****                                      PURPOSE**

 

**3.1****                               Loans**

 

(a)                                  EachMedium-Term Facility Loan must be used first for refinancing the RefinancedFacilities in full and thereafter for general corporate, working capital andfinancing purposes.

 

(b)                                 EachShort-Term Facility Loan must be used for general corporate or working capitalpurposes only.

 

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**3.2****                               Guarantees**

 

Each Guarantee must beused for general corporate purposes only.

 

**3.3****                               Illegality**

 

Each Borrower undertakesthat no Utilisation requested by it shall be used in any way which would beillegal under any provisions of law applicable to the relevant Borrower orcause the invalidity or unenforceability of any Finance Document under anyapplicable law and in particular, applicable financial assistance rules.

 

**3.4****                               Noobligation to monitor**

 

No Finance Party is boundto monitor or verify the utilisation of the Facility. 

 

**4.****                                      CONDITIONS PRECEDENT**

 

**4.1****                               Conditionsprecedent documents**

 

A Request may not begiven until the Facility Agent has notified the Company and the Lenders that ithas received all of the documents and evidence set out in Part 1 ofSchedule 2 (Conditions precedent documents) in form and substancesatisfactory to the Facility Agent. The Facility Agent must give thisnotification to the Company and the Lenders promptly upon being so satisfied.

 

**4.2****                               Furtherconditions precedent—All Facilities**

 

The obligations of eachLender to participate in any Utilisation are subject to the further conditionsprecedent that on both the date of the Request and the Utilisation Date forthat Utilisation:

 

(a)                                  theRepeating Representations are correct in all respects;

 

(b)                                 noDefault is outstanding or would result from the Utilisation;

 

(c)                                  withoutprejudice to the generality of paragraph (b) above, no event has occurred whichin the reasonable opinion of the Majority Lenders is likely to have a MaterialAdverse Effect; and

 

(d)                                 theprojections set out in the most recent Business Plan show that the Company willbe in compliance with Clause 20 (Financial Covenants) on the then next TestingDate.

 

**4.3****                               Furtherconditions precedent—Medium-Term Facility**

 

(a)                                  Theobligations of each Lender to participate in any Medium-Term Facility Loan aresubject to the further condition precedent that immediately following theUtilisation Date for that Loan, the Utilisations outstanding under each Tranchewill be *prorata* to the Total Commitments of each Tranche.

 

(b)                                 Wherethe difference in the aggregate amount of Guarantees issued or to be issued onthe Utilisation Date under each Tranche of the Medium-Term Facility is greaterthan €2,500,000 (or its equivalent in other currencies), the obligations ofeach Lender to participate in any Guarantee are subject to the furthercondition precedent that immediately following the Utilisation Date for thatGuarantee, the Utilisations outstanding under each Tranche will be *pro rata*to the Total Commitments of each Tranche.

 

**4.4****                               Furtherconditions precedent—Short-Term Facility**

 

The obligations of eachLender to participate in any Short-Term Facility Loan are subject to thefurther conditions precedent that on both the date of the Request and theUtilisation Date for that Loan:

 

(a)                                  theMedium-Term Facility is fully drawn; and

 

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(b)                                 theactual liquidity (including intra-month cash balances) of the Company for themonth in which the proposed Utilisation Date falls set out in the latestLiquidity Analysis (the **Actual Liquidity**) is less than theLiquidity Headroom; and

 

(c)                                  theaggregate amount outstanding under the Short-Term Facility is, or will be onthe Utilisation Date, no greater than the difference between the LiquidityHeadroom and the Actual Liquidity.

 

**4.5****                               Maximumnumber**

 

Unless the Facility Agentagrees, a Request may not be given if, as a result, there would be more than110 Utilisations (of which no more than 10 are Loans and no more than 100 areGuarantees and of which no more than 5 Guarantees are under Tranche B)outstanding.

 

**5.****                                      LOAN UTILISATIONS**

 

**5.1****                               Givingof Requests**

 

(a)                                  ABorrower may borrow a Loan by giving to the Facility Agent a duly completedRequest.

 

(b)                                 Unlessthe Facility Agent otherwise agrees, the latest time for receipt by theFacility Agent of a duly completed Request is 11.00 a.m. one Business Daybefore the Rate Fixing Day for the proposed borrowing.

 

(c)                                  EachRequest is irrevocable.

 

(d)                                 Subjectto paragraph (e) below, only the Company or an Additional Borrower may requesta Loan under Tranche A of the Medium-Term Facility and only Rhodia Inc. mayrequest a Loan under Tranche B of the Medium-Term Facility.

 

(e)                                  RhodiaInc. may request Loans under Tranche A until the USPP is prepaid and cancelledin full but in any event not later than 30th June, 2004 in a maximum euroAmount not to exceed €25,000,000 and in each case for a Term of no longer thanone month.

 

(f)                                    Onlythe Company may request a Loan under the Short-Term Facility.

 

**5.2****                               Completionof Requests**

 

A Request for a Loan willnot be regarded as having been duly completed unless:

 

(a)                                  itspecifies the Facility under which that Loan is to be drawn;

 

(b)                                 itspecifies which Tranche of the Facility is to be utilised;

 

(c)                                  itidentifies the Borrower;

 

(d)                                 theUtilisation Date is a Business Day falling within the Availability Period forthat Facility;

 

(e)                                  theamount of the Loan requested is:

 

(i)                                     aminimum amount of €25,000,000 or its equivalent in other currencies inaccordance with Clause 7 (Optional Currencies) and an integral multiple of5,000,000 units of that currency or, when such amount is aggregated with anyother Loan required to be made at that time pursuant to Clause 4.3 (Furtherconditions precedent—Medium-Term Facility), is a minimum amount of €25,000,000and an integral multiple of 5,000,000 units of that currency;

 

(ii)                                  themaximum undrawn amount available under that Facility on the proposed UtilisationDate; or

 

(iii)                               suchother amount as the Facility Agent may agree; and

 

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(f)                                    therequested currency and Term comply with this Agreement.

 

Only one Medium-TermFacility Loan may be requested in a Request. Only one Short-Term Facility Loanmay be requested in a Request.

 

**5.3****                               Advanceof Loan**

 

(a)                                  TheFacility Agent must promptly notify each Lender of the details of the requestedLoan and the amount of its share in that Loan.

 

(b)                                 Theamount of each Lender’s share of the Loan will be its Pro Rata Share on theproposed Utilisation Date.

 

(c)                                  NoLender is obliged to participate in a Loan under a Facility if, as a result:

 

(i)                                     itsshare in the Utilisations under that Facility would exceed its Commitment underthat Facility or, in the case of the Medium-Term Facility, under the relevantTranche of that Facility; or

 

(ii)                                  theUtilisations under a Facility would exceed the Total Commitments under thatFacility or, in the case of the Medium-Term Facility, under the relevantTranche of that Facility.

 

(d)                                 Wherea Request is made for a Loan under the Medium-Term Facility:

 

(i)                                     theTranche A Loan shall be made available by the Tranche A Lenders only; and

 

(ii)                                  theTranche B Loan shall be made available by the Tranche B Lenders only.

 

(e)                                  Ifthe conditions set out in this Agreement have been met, each Lender must makeits share in the Loan available to the Facility Agent for the relevant Borrowerthrough its Facility Office on the Utilisation Date.

 

(f)                                    Wherea Borrower makes a request for a Loan for the purpose of repaying any amountdemanded by an Issuing Bank under a Guarantee it has issued pursuant to Clause6.7 (Demands under the Guarantee), the Facility Agent shall and is herebyirrevocably authorised to apply such Loan towards that amount on itsUtilisation Date in satisfaction *pro tanto* of that Borrower’s obligationsin relation to that demand under Clause 6.7(a) and in making that Loanavailable to the Facility Agent the Lenders shall have no further obligation tothe Issuing Bank in relation to such demand under Clause 6.7(b). 

 

**6.****                                      GUARANTEE UTILISATIONS**

 

**6.1****                               Receiptof Guarantee Requests**

 

(a)                                  ABorrower may request a Guarantee to be issued under the Medium-Term Facility bygiving to the Facility Agent with a copy to the relevant Issuing Bank a dulycompleted Request.

 

(b)                                 Thelatest time for receipt by the Facility Agent and the relevant Issuing Bank ofa duly completed Request for Guarantees to be issued for a beneficiary with anationality or place of incorporation in the United States of America or Franceis 11.00 a.m. five Business Days before the Utilisation Date of the Guaranteeor such shorter period as the Facility Agent and the relevant Issuing Bank mayagree. The latest time for receipt by the Facility Agent and the relevantIssuing Bank of a duly completed Request in respect of Guarantees in respect ofany other nationality or place of incorporation is 11.00 a.m. eight BusinessDays before the Utilisation Date of the Guarantee or such shorter period as theFacility Agent and the relevant Issuing Bank may agree.

 

(c)                                  EachRequest is irrevocable.

 

(d)                                 OnlyRhodia Inc. may request a Guarantee under Tranche B of the Medium-TermFacility.

 

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**6.2****                               Givingof Requests**

 

A Request for a Guaranteewill not be regarded as having been duly completed unless:

 

(a)                                  itspecifies that it is for a Guarantee;

 

(b)                                 theUtilisation Date is a Business Day falling within the Medium-Term FacilityAvailability Period;

 

(c)                                  itidentifies the Issuing Bank from the list of Issuing Banks in Part 2 ofSchedule 1 (Original Parties) where (i) in the case of a Request for aGuarantee under Tranche B the Issuing Bank is CSFB (or its permitted successor)and (ii) in the case of a Request for a Guarantee under Tranche A the IssuingBank is identified according to the governing law for the Guarantee required asset out in Part 2 of Schedule 1 (Original Parties) and notwithstanding thegoverning law required by the Borrower, the relevant Borrower shall use itsbest efforts to request a Guarantee from the Issuing Banks *pro rata* to their maximumamount of Guarantees set out opposite each of their names in Part 2 ofSchedule 1 (Original Parties) and when making the choice for an IssuingBank shall take into account the duration, currency, purpose, beneficiary ofthe other Guarantees previously requested and outstanding with a view todistributing the issue of each Guarantee amongst the Issuing Banks on an equaland rateable basis;

 

(d)                                 itidentifies the Borrower or, subject to and in accordance with Clause 6.3, theGuarantee Account Party;

 

(e)                                  itspecifies which Tranche of the Facility is to be utilised;

 

(f)                                    theamount of the Guarantee requested is:

 

(i)                                     aminimum aggregate amount of €100,000 or its equivalent in other currencies inaccordance with Clause 7 (Optional Currencies) (and an integral multiple of1,000 units of the largest currency unit);

 

(ii)                                  themaximum undrawn amount available under that Tranche of the Facility on theproposed Utilisation Date; or

 

(iii)                               suchother amount as the Facility Agent may agree;

 

(g)                                 theissue date of the Guarantee is specified;

 

(h)                                 theexpiry date of the liability of the relevant Issuing Bank under the Guaranteeis specified and falls on or before the date falling one month prior to theFinal Maturity Date and is no sooner than one month from the date of issue;

 

(i)                                     itidentifies the proposed beneficiary and its nationality or place ofincorporation and the nature of the underlying guaranteed obligations;

 

(j)                                     therequested currency complies with this Agreement;

 

(k)                                  theform of the Guarantee is attached to the Request and must be substantially inthe form of Schedule 4 (Form of Guarantee) as confirmed by that IssuingBank in accordance with Clause 6.4(a) adapted for the relevant governing law orin such other form as may be agreed between the Facility Agent (acting on theinstructions of the Majority Lenders), that Issuing Bank and the relevantBorrower; and

 

(l)                                     thedelivery instructions of the Guarantee are specified.

 

Only one Guarantee may berequested in a Request.

 

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**6.3****                               Guaranteesissued for the account of a Guarantee Account Party**

 

(a)                                  TheCompany may request that a Guarantee be issued for the account of a GuaranteeAccount Party provided that the Company first uses its best endeavors toprocure that such Guarantee Account Party accedes to this Agreement as anAdditional Borrower prior to 15th May, 2004 or, if later, prior to making thatRequest and, in which case, that Additional Borrower shall make that Requestfor its own account.

 

(b)                                 Ifthe Company does request a Guarantee for the account of a Guarantee AccountParty then:

 

(i)                                     theCompany represents to each Finance Party on the date of that Request and theUtilisation Date for that Guarantee that:

 

(A)                              theCompany is duly authorised by that Guarantee Account Party to make that Requestand that Guarantee Account Party has full knowledge of the terms and conditionsof that Guarantee (including its governing law and, as the case may be, itsautonomous nature); and

 

(B)                                theCompany and that Guarantee Account Party are aware of the legal and commercialconsequences arising from the issue of that Guarantee for the account of theGuarantee Account Party;

 

(ii)                                  theobligations of a Lender or an Issuing Bank to participate in any such Guaranteeare subject to the additional condition precedent that the representationreferred to in paragraph (b) (i) is correct in all respects on the date it ismade;

 

(iii)                               noFinance Party is bound or shall have any duty to verify the matters referred toin paragraph (b)(i) above; and

 

(iv)                              theCompany will be and shall remain fully and solely liable for all obligationsunder the Finance Documents in respect of any such Guarantee, as if theGuarantee was requested by and issued for the account of the Company as aBorrower.

 

**6.4****                               Issueof Guarantees**

 

(a)                                  Therelevant Issuing Bank will promptly notify the Facility Agent whether or notthe form of Guarantee attached to the Request is substantially in the form ofSchedule 4 (Form of Guarantee).

 

(b)                                 TheFacility Agent must promptly notify the relevant Issuing Bank of the details ofthe requested Guarantee and the amount of its share of that Guarantee.

 

(c)                                  Followingconfirmation from the relevant Issuing Bank that the form of Guarantee attachedto the Request is substantially in the form of Schedule 4 (Form ofGuarantee) in accordance with paragraph (a) above, the Facility Agent mustpromptly notify each Lender of the details of the requested Guarantee includingthe date on which the Guarantee is issued and the amount of its share of thatGuarantee. The amount of each Lender’s share in a Guarantee will be its ProRata Share on the proposed Utilisation Date.

 

(d)                                 Subjectto the terms of this Agreement the relevant Issuing Bank shall, on theUtilisation Date specified in the relevant Request, issue a Guarantee inaccordance with that Request. An Issuing Bank will not be required to issue aGuarantee for an amount greater than the maximum amount set opposite thatIssuing Bank’s name in Part 2 of Schedule 1 (Original Parties), takinginto account any Guarantees issued by the relevant Issuing Bank and outstandingas at the date of the Request. An Issuing Bank will not be required to issue aGuarantee through a correspondent bank without that Issuing Bank’s priorwritten consent.

 

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(e)                                  NoIssuing Bank is obliged to issue any Guarantee if as a result:

 

(i)                                     aLender’s share in the Utilisations would exceed its Commitment under therelevant Tranche of that Facility;

 

(ii)                                  theUtilisations would exceed the Total Commitments under the relevant Tranche ofthat Facility;

 

(iii)                               theissue of a Guarantee to a beneficiary would contravene any applicable law orregulations binding on it or any other Lender; or

 

(iv)                              theissue of a Guarantee by an Issuing Bank would contravene the internal policy ofsuch Issuing Bank including in relation to such matters as environmentalmatters, the identity and/or nationality of a beneficiary, the governing law orthe purpose of the Guarantee.

 

(f)                                    AnIssuing Bank which has refused to issue a Guarantee in the circumstancesreferred to in paragraph (e) above shall notify the Facility Agent and theCompany of the circumstances in reasonable detail.

 

(g)                                 EachLender’s liability in respect of a Guarantee shall be governed by Clause 6.7(Demands under the Guarantee).

 

**6.5****                               Extensionof a Guarantee**

 

(a)                                  ABorrower may request that a Guarantee issued on its behalf is extended with thesame Issuing Bank by delivery to the Facility Agent and that Issuing Bank of anotice specifying the new proposed Maturity Date five Business Days before theMaturity Date of that Guarantee.

 

(b)                                 Anextension request will be treated the same way as a Request except that theinformation set out in Clauses 6.2(c), 6.2(d) and 6.2(i) will not be requiredto be completed.

 

(c)                                  Theterms of each extended Guarantee will remain the same as before the extension,except that:

 

(i)                                     itsamount may be reduced; and

 

(ii)                                  itsMaturity Date will be the date specified in the extension request being a datefalling no later than one month prior to the Medium-Term Facility MaturityDate.

 

(d)                                 Ifthe conditions set out in this Agreement have been met, the relevant IssuingBank must extend the Guarantee in the manner requested.

 

**6.6****                               Indemnities**

 

(a)                                  EachBorrower hereby undertakes to indemnify and hold harmless on demand eachIssuing Bank, the Facility Agent and each Lender from and against allliabilities, costs, losses, damages and expenses which that Issuing Bank, theFacility Agent or Lender may incur or sustain by reason of, or arising inconnection with, or by reference to, the issue of any Guarantee in respect ofsuch Borrower or the performance by such Borrower of the obligations expressedto be assumed by such Borrower under this Agreement in connection with theissue of any Guarantee in respect of such Borrower.

 

(b)                                 EachBorrower unconditionally and irrevocably:

 

(i)                                     authoriseseach Issuing Bank to pay any demand made on it which appears on its face to bein order and which is made in accordance with the Guarantee issued by it underor by reference to such Guarantee without carrying out any investigation orseeking any confirmation from any other person before making such payment orrequiring proof or the agreement of any Obligor that the amounts so demanded orpaid are or were due and notwithstanding that any Obligor or any other personmay dispute the validity of any such request, demand or payment;

 

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(ii)                                  authoriseseach Issuing Bank to exercise the rights and powers conferred on it by theGuarantee issued by such Issuing Bank and confirms that the relevant IssuingBank shall deal in documents only and shall not be concerned with the legalityof the claim or any other underlying transaction or any available set-off,counterclaim or defence of any person;

 

(iii)                               agreesthat each Issuing Bank need not have regard to the sufficiency, accuracy orgenuineness of any demand or any certificate or statement in connection withany demand or any incapacity of or limitation upon the powers of any personsigning or issuing such demand, certificate or statement which appears on itsface to be in order and agrees that each Issuing Bank shall not be obliged toenquire as to any such matters and may assume that any such demand, certificateor statement which appears on its face to be in order is correct and properlymade; and

 

(iv)                              agreesto reimburse the Issuing Banks, the Facility Agent and the Lenders immediatelyon demand all moneys whatsoever paid by the Issuing Banks or the Lendersrespectively as contemplated by sub-paragraph (i) above or Clause 6.7 (Demandsunder the Guarantee) below respectively, together with interest from the timeof payment to the date of reimbursement at the rate specified in Clause 10.3(Interest on overdue amounts).

 

**6.7****                               Demandsunder the Guarantee**

 

(a)                                  Ifan Issuing Bank receives a demand for payment under a Guarantee it has issued,it shall notify the relevant Borrower forthwith of:

 

(i)                                     theamount demanded; and

 

(ii)                                  thedate on which it is payable,

 

and the relevant Borrowershall forthwith pay to the Facility Agent for the account of that Issuing Bankthe amount demanded and in any event within three Business Days.

 

(b)                                 Ifpayment in full has not been made by the relevant Borrower to an Issuing Bankin accordance with paragraph (a) above, such Issuing Bank may make demandthrough the Facility Agent on each Medium-Term Facility Lender under theTranche under which that Guarantee has been issued for immediate payment to theFacility Agent for that Issuing Bank (and each Medium-Term Facility Lenderhereby agrees with such Issuing Bank to make payment of sums so demanded of it)in an amount equal to the proportion of the sum not paid by the relevantBorrower which that Lender’s Commitment bears to the Total Commitments in eachcase under the relevant Tranche of the Medium-Term Facility immediately priorto such payment.

 

(c)                                  EachLender hereby undertakes to indemnify and hold harmless on demand in theproportion referred to in Clause 6.7(b) each Issuing Bank from and against allliabilities, costs, losses, damages and expenses which that Issuing Bank mayincur or sustain by reason of, or arising in connection with, or by referenceto, any Guarantee and which has not been paid for by an Obligor except to theextent that the loss or liability is directly caused by the gross negligence orwilful misconduct of that Issuing Bank.

 

(d)                                 Ifan Issuing Bank has received or receives cash cover from a Borrower payableunder a Guarantee then such Issuing Bank shall forthwith utilise such amount ofcash cover received to repay all amounts due and payable under a Guaranteebefore making demand on each of the Medium-Term Facility Lenders in accordancewith paragraph (b) above.

 

(e)                                  Theprovisions of Clause 6.6 (Indemnities) shall apply to any Lender which makes apayment in accordance with paragraphs (b) and (c) above.

 

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**6.8****                               Defaultby Banks**

 

(a)                                  Ifany Medium-Term Facility Lender (a **Defaulting Lender**) fails to make anypayment due from it for account of an Issuing Bank under Clause 6.7 (Demandsunder the Guarantee) then, until the relevant Issuing Bank has been reimbursedin respect of that payment in full (but without prejudice to the obligations ofthat Defaulting Lender to make that payment):

 

(i)                                     theDefaulting Lender shall to the fullest extent permitted by applicable law holdon trust for the relevant Issuing Bank the benefit of any security now orhereafter created to secure the obligations of the Borrowers under thisAgreement and to which such Defaulting Lender would have been entitled had itmade such payment; and

 

(ii)                                  forthe purposes of determining the constitution of the Majority Lenders therelevant Issuing Bank shall be treated as having a Medium-Term FacilityCommitment under the relevant Tranche equal to the Medium-Term FacilityCommitment of the Defaulting Lender under the relevant Tranche (in addition tothe Medium-Term Facility Commitment (if any) which the Issuing Bank already hadin its capacity as a Lender) (that Defaulting Lender being treated for suchpurpose only as having no Medium-Term Facility Commitment).

 

(b)                                 Therights conferred upon the Issuing Banks in this Clause 6.8 shall be in additionto any other rights it may have against a Defaulting Lender.

 

**6.9****                               Severalobligations**

 

The rights andobligations of each Lender under this Clause 6 are several and separate sothat:

 

(a)                                  failureby a Lender to carry out its obligations under this Clause 6 shall not releasethe other Lenders from their obligations hereunder; and

 

(b)                                 noLender shall be liable for the failure of any other Lender to perform itsobligations under this Clause 6.

 

**6.10****                        Rightsof contribution and subrogation**

 

No Obligor shall, byvirtue of any payment made by it or them under this Clause 6 or otherwise, besubrogated to any rights, security or moneys held or received by the FacilityAgent, the Issuing Banks or any Lender or be entitled at any time to exercise,claim or have the benefit of any right of contribution or subrogation orsimilar right against the Facility Agent or any Lender. All rights ofcontribution or similar rights against the Facility Agent and the Lenders inrelation to this Agreement are hereby waived by the Borrowers and each Obligor.

 

**6.11****                        Waiverof defences**

 

Each Borrower agrees thatits obligations under this Clause 6 shall not be affected by any act, omission,matter or thing which but for this provision, might operate to release orotherwise exonerate it from its obligations hereunder, in whole or in part,including, without limitation and whether or not known to it:

 

(a)                                  anytime or waiver granted to or composition with a Lender, an Issuing Bank, abeneficiary of any Guarantee or any other person;

 

(b)                                 anytaking, variation, compromise, renewal or release of, or refusal or neglect toperfect or enforce, any rights, remedies or securities available to an IssuingBank, any Lender or any other person or arising under any Guarantee;

 

(c)                                  anynon-presentation or non-observance of any formality or other requirement inrespect of any instrument or any failure to realise the full value of anysecurity;

 

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(d)                                 anyincapacity or lack of power, authority or legal personality of or dissolutionor change in the members or status of any person;

 

(e)                                  anyamendment (however fundamental) of a Finance Document, any Guarantee or otherdocument or security;

 

(f)                                    anyunenforceability, illegality or invalidity of any obligation of any personunder any Finance Document, any Guarantee or any other document or security;and

 

(g)                                 anyvariation or extension of or increase in liabilities under the Guarantee sothat references in this Agreement to the Guarantee shall include each suchvariation, extension and variation.

 

**6.12****                        Continuingindemnity**

 

This Clause 6 shall be acontinuing guarantee and indemnity, shall extend to the ultimate balance of theobligations and liabilities of the Borrowers under this Clause 6 and shallcontinue in force notwithstanding any intermediate payment in part of suchobligations or liabilities.

 

**6.13****                        Additionalsecurity**

 

The obligations of theBorrowers under this Clause 6 shall be in addition to and shall not be in any wayprejudiced by any collateral or other security now or hereafter held by anyFinance Party as security or any lien to which any Finance Party may beentitled.

 

**6.14****                        Preservationof rights**

 

No invalidity orunenforceability of all or any part of this Clause 6 shall affect any rights ofindemnity or otherwise which any Finance Party would or may have in the absenceof or in addition to this Clause 6.

 

**6.15****                        Noamendments**

 

Each Borrower agrees thatit will not make, agree to or accept any amendment or variation to the terms ofany issued Guarantee without the prior written consent of the Facility Agent(acting on the instructions of all the Lenders or, subject to Clause 28(Amendments and Waivers) the Majority Lenders) and the relevant Issuing Bank,other than amendments of an immaterial nature as agreed by the relevant IssuingBank and the Facility Agent.

 

**6.16****                        General**

 

(a)                                  AGuarantee is **repaid** or **prepaid** if:

 

(i)                                     themaximum amount payable under the Guarantee is reduced in accordance with itsterms; or

 

(ii)                                  therelevant Issuing Bank is satisfied that it has no further liability under thatGuarantee.

 

The amount bywhich a Guarantee is repaid or prepaid under sub-paragraph (i) above is theamount of the relevant reduction.

 

(b)                                 Therelevant Issuing Bank shall use its best endeavours to notify the FacilityAgent and the relevant Borrower of the circumstances referred to in paragraph(a) above immediately on their occurrence.

 

(c)                                  Ifa Guarantee or any amount outstanding under a Guarantee is expressed to be immediatelypayable, the Borrower that requested the issue of that Guarantee must repay orprepay that amount immediately.

 

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(d)**                                 Cashcover** is provided for a Guarantee by a Borrower if that Borrower pays an amountin the currency of the Guarantee requested by it to an interest-bearing accountwith a Finance Party in Paris or other jurisdiction applicable to the relevantcurrency or Finance Party or other jurisdiction with the consent of therelevant Borrower (such consent not to be unreasonably withheld), in the nameof the Borrower and the following conditions are met:

 

(i)                                     theaccount is with the Facility Agent (if, subject as provided below, the cashcover is to be provided for all the Lenders), the relevant Issuing Bank (if thecash cover is to be provided solely for that Issuing Bank, in which case theaccount will be an internal account of the relevant Issuing Bank in the name ofthe relevant Borrower for identification purposes only) or with a Lender (if thecash cover is to be provided for that Lender);

 

(ii)                                  untilno amount is or may be outstanding under that Guarantee, withdrawals from theaccount may only be made to pay a Finance Party amounts due and payable to itunder that Guarantee or this Clause; and

 

(iii)                               theBorrower has executed a security document including by way of a *gage-espèces*or by way of *gage de compte d’instruments financiers* in favour of therelevant Issuing Bank, Facility Agent or relevant Lender over that account incase of an account held in France or other similar form of security in case ofan account held outside France, in each case in a form and substancesatisfactory to the Facility Agent or the relevant Issuing Bank or the relevantLender, creating a first ranking security interest over that account.

 

Where cash coveris to be provided to all the Lenders, a Lender may require its portion of thecash cover to be paid into its account instead of an account with the FacilityAgent.

 

(e)                                  Ifa Borrower provides cash cover to the Facility Agent or the relevant IssuingBank the amount so paid shall earn interest or be remunerated by way of an *indemnitéd’immobilisation*, as the case may be, at the rate agreed in writingbetween the Borrower and the Facility Agent and the relevant Issuing Bank fromthe Business Day after receipt by the Facility Agent or the relevant IssuingBank to the date on which it is applied in payment of a demand under aGuarantee issued by the relevant Issuing Bank or otherwise withdrawn from theapplicable account in accordance with the terms of this Agreement.

 

(f)                                    The**outstanding**or **principal**amount of a Guarantee at any time is the maximum amount that is or may bepayable by the relevant Borrower in respect of that Guarantee at that time.

 

(g)                                 Subjectto Clause 23.17 (Resignation of the Issuing Banks) the Issuing Banks shall bethe Lenders set out in Part 2 of Schedule 1 (Original Parties) and anyother Lender who agrees to act as an Issuing Bank from time to time with theprior written agreement of the Facility Agent, the Company and the MajorityLenders and as set out in an updated list of the Issuing Banks in the form ofPart 2 of Schedule 1 (Original Parties) provided to the Company and theLenders by the Facility Agent. At any one time there may be no more than sixIssuing Banks.

 

**6.17****                        Illegality**

 

(a)                                  AnIssuing Bank must notify the Company and the Facility Agent promptly if itbecomes aware that it is unlawful in any jurisdiction for that Issuing Bank toperform any of its obligations under a Finance Document or to have outstandingany Guarantee.

 

(b)                                 Afternotification under paragraph (a) above:

 

(i)                                     theCompany must use its best endeavours to ensure the release of the liability ofthe relevant Issuing Bank under each outstanding Guarantee;

 

(ii)                                  failingthis, each Borrower must provide cash cover to the relevant Issuing Bank foreach Guarantee requested by it on the date specified in paragraph (c) below;and

 

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(iii)                               nofurther Guarantee will be issued by the relevant Issuing Bank.

 

(c)                                  Thedate for repayment or prepayment of a relevant Issuing Bank’s share in aGuarantee will be the date specified by the relevant Issuing Bank in thenotification under paragraph (a) above and which must not be earlier than thelast day of any applicable grace period allowed by law. 

 

**7.****                                      OPTIONAL CURRENCIES**

 

**7.1****                               General**

 

In this Clause:

 

**euro Amount** of aUtilisation or part of a Utilisation means:

 

(a)                                  ifthe Utilisation is denominated in euro, its amount; or

 

(b)                                 ifthe Utilisation is a Guarantee denominated in an Optional Currency, itsequivalent in euro calculated on the basis of the Facility Agent’s Spot Rate ofExchange three Business Days before the Utilisation Date for that Guarantee, asadjusted below at three monthly intervals; or

 

(c)                                  inthe case of any other Utilisation denominated in an Optional Currency, itsequivalent in euro calculated on the basis of the Facility Agent’s Spot Rate ofExchange three Business Days before the Utilisation Date for that Utilisation.

 

**Facility Agent’s Spot Rate ofExchange** means the Facility Agent’s spot rate of exchange forthe notional purchase of the relevant Optional Currency in the Paris foreignexchange market with euro at or about 11.00 a.m. on a particular day.

 

**domestic Sterling**and **euroSterling** have the meaning given to them below.

 

**7.2****                               Selection**

 

(a)                                  ABorrower shall select the currency of a Utilisation in the relevant Request.

 

(b)                                 Thecurrency of each Utilisation must be euro or an Optional Currency.

 

(c)                                  ABorrower may not choose a currency if as a result the Utilisations would bedenominated at any one time in more than five currencies.

 

(d)                                 TheFacility Agent shall notify each Lender and the Borrower of the currency andthe euro Amount of each Utilisation to be denominated in an Optional Currency,and the applicable Facility Agent’s Spot Rate of Exchange, promptly after theyare ascertained.

 

(e)                                  TheFacility Agent shall in good faith notify the Borrower of the source or basisof the Facility Agent’s Spot Rate of Exchange at the same time as it gives thenotification to the Borrower and the Lenders under paragraph (d) above.

 

**7.3****                               Revocationof currency**

 

If before 9.30 a.m.(London time in the case of a Utilisation in Dollars, Swiss Francs or Yen) onany Rate Fixing Day, the Facility Agent receives notice from a Lender that:

 

(a)                                  itis impracticable for the Lender to fund its participation in the relevantUtilisation in the relevant Optional Currency during its Term in the ordinarycourse of business in the relevant interbank market; and/or

 

(b)                                 theuse of the proposed Optional Currency might contravene any law or regulation,the Facility Agent shall give notice to the Company and to the Lenders to thateffect before 11.00 a.m. (London time in the case of a Loan in Dollars, SwissFrancs or Yen) on that day. In this event:

 

(i)                                     theCompany and the Lenders may agree that the drawdown will not be made; or

 

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(ii)                                  inthe absence of agreement and in any other case in respect of a Loan only:

 

(A)                              thatLender’s participation in the Loan (or, if more than one Lender is similarlyaffected, those Lenders’ participations in the Loans) shall be treated as aseparate Loan denominated in euro;

 

(B)                                inthe definition of **EURIBOR** (insofar as it applies to thatLoan) in Clause 1.1 (Definitions):

 

I.                                         thereshall be substituted for the time “11.00 a.m.” the time “1.00 p.m.”; and

 

II.                                     paragraph(b) of that definition shall apply.

 

**7.4****                               Sterling**

 

(a)                                  EachLender may advance its share in any Loan in Sterling through a Facility Officeeither in, or outside, the U.K.

 

(b)                                 Ifa Lender advances its share in a Loan in Sterling through a Facility Office inthe U.K., that part of the Loan will be treated as a separate Loan in **domesticSterling**. The remaining part of the Loan will be treated as aseparate Loan in **euro Sterling**.

 

**7.5****                               OptionalCurrency equivalents**

 

The equivalent in euro ofa Utilisation or part of a Utilisation in an Optional Currency for the purposesof calculating:

 

(a)                                  whetherany limit under this Agreement has been exceeded;

 

(b)                                 theamount of a Utilisation;

 

(c)                                  theshare of a Lender in a Utilisation;

 

(d)                                 theamount of any repayment of a Utilisation; or

 

(e)                                  theundrawn amount of a Lender’s Commitment,

 

is its euroAmount.

 

**7.6****                               Guaranteesin Optional Currency**

 

(a)                                  Ifa Guarantee is denominated in an Optional Currency, the Facility Agent must atthree monthly intervals after the date of this Agreement, recalculate the euroAmount of that Guarantee by notionally converting the outstanding amount ofthat Guarantee into euro on the basis of the Facility Agent’s Spot Rate ofExchange on the date of calculation.

 

(b)                                 EachBorrower must, if requested by the Facility Agent within five Business Days ofany calculation under paragraph (a) above, ensure that sufficient Utilisationsare prepaid under the relevant Tranche of the Medium-Term Facility to preventthe euro Amount of the Utilisations under the relevant Tranche of theMedium-Term Facility exceeding the Total Commitments under the relevant Trancheof the Medium-Term facility following any adjustment to a euro Amount underparagraph (a) above. 

 

**8.****                                      REPAYMENT**

 

**8.1****                               Repaymentof Loans**

 

(a)                                  EachBorrower must repay each Loan made to it in full on its Maturity Date.

 

(b)                                 Subjectto the other terms of this Agreement, any amounts repaid under paragraph (a)above may be re-borrowed.

 

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**8.2****                               Repaymentof Guarantees**

 

(a)                                  EachGuarantee shall be repaid in full on its Maturity Date.

 

(b)                                 Subjectto the other terms of this Agreement, any amounts repaid under paragraph (a)above may be re-utilised. 

 

**9.****                                      PREPAYMENT AND CANCELLATION**

 

**9.1****                               Mandatoryprepayment—illegality**

 

(a)                                  ALender must notify the Company promptly if it becomes aware that it is unlawfulin any jurisdiction for that Lender to perform any of its obligations under aFinance Document or to fund or maintain its share in any Utilisation.

 

(b)                                 Afternotification under paragraph (a) above:

 

(i)                                     eachBorrower must repay or prepay the share of that Lender in each Loan made to iton the date specified in paragraph (c) below;

 

(ii)                                  theobligation of that Lender to fund or maintain its share in any Guarantee willbe cancelled provided that the relevant Issuing Bank receives cash cover fromthe relevant Borrower for the same amount;

 

(iii)                               theCommitment of that Lender will be immediately cancelled.

 

(c)                                  Thedate for repayment or prepayment of a Lender’s share in a Utilisation will be:

 

(i)                                     thelast day of the current Term of that Utilisation; or

 

(ii)                                  ifearlier, the date specified by the Lender in the notification under paragraph(a) above and which must not be earlier than the last day of any applicablegrace period allowed by law.

 

**9.2****                               Mandatoryprepayment—Prepayment Event**

 

(a)                                  TheCompany will notify the Facility Agent promptly upon the occurrence of aPrepayment Event. Upon being notified by the Company of a Prepayment Event, theFacility Agent shall promptly inform each Lender.

 

(b)                                 Uponand at any time after having received notice of a Prepayment Event from the FacilityAgent, each Lender, acting through the Facility Agent, may serve a notice ofmandatory prepayment and cancellation on the Company and:

 

(i)                                     onthe date of the notice the Commitment of such Lender shall be cancelled; and

 

(ii)                                  onthe date falling 30 Business Days after the date of service of such notice therelevant Borrower shall prepay all participations of that Lender in theUtilisations or in the case of a Utilisation by way of a Guarantee, providecash cover in an amount equal to that Lender’s participation in that Guarantee,in each case, issued for the account of or made to it in full together with anyother amounts then due in connection with such participations.

 

(c)                                  Ifthe Company seeks the consent of the Lenders to a proposed Permitted Reorganisation,no Lender will unreasonably delay in informing the Facility Agent whether itconsents to such proposed Permitted Reorganisation.

 

**9.3****                               MandatoryPrepayment—disposals, equity and capital market issues**

 

(a)                                  (i)Prior to the Term Date, the provisions of clause 7.2 (Disposals, equity andcapital market issues) of the Secured Co-ordination Agreement shall applyequally in prepayment and/or cancellation of the principal amount of theFacilities under this Agreement as such provisions apply to a 

 

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prepayment of aRefinanced Facility (as defined in the Secured Co-ordination Agreement) as ifset out herein in full *mutatis mutandis*;

 

(ii)                                  priorto the Term Date, any amount to be applied towards the prepayment and/orcancellation of the principal amount of the Facilities pursuant to paragraph(a)(i) above shall be applied first against Commitments under the Short-TermFacility and second against Commitments under the Medium-Term Facility;

 

(iii)                               onand after the Term Date this paragraph (a) will cease to apply and the otherprovisions of this Clause 9.3 shall apply.

 

(b)                                 Wherea disposal is made by any member of the Group of any asset including a disposalmade pursuant to the Asset Disposal Programme, for which aggregate net disposalproceeds since the date of the Secured Co-ordination Agreement exceed€850,000,000 (or its equivalent in other currencies), the Company must andshall ensure that each Borrower does, promptly on completion of that disposal,apply in prepayment and/or cancellation of the Facilities an amount equal tofifty per cent. (50%) of the net disposal proceeds from any disposal which whenaggregated with other such disposal proceeds exceeds €850,000,000 (or itsequivalent in other currencies) in accordance with Clause 9.4 (MandatoryPrepayment—application of proceeds) below.

 

(c)                                  (i)The Company must and shall ensure that each Borrower does promptly apply inprepayment and/or cancellation of the principal amount of the Facilities anamount equal to twenty-five per cent. (25%) of the net issuance proceeds of anyequity or related rights issue in accordance with Clause 9.4 (MandatoryPrepayment—application of proceeds) below.

 

(ii)                                  Thisparagraph (c) shall not apply in relation to shares issued:

 

(A)                              inconnection with employee share option schemes; or

 

(B)                                toanother member of the Group.

 

(d)                                 TheCompany must and shall ensure that each Borrower does promptly upon receipt ofthe same by any member of the Group apply in prepayment and/or cancellation ofthe Facilities an amount equal to fifty per cent. (50%) of the net issuanceproceeds of any issue of bonds or notes (including convertible bonds or otherequity-linked debt instruments), debt securities (excluding, for the avoidanceof doubt, *billetsde trésorie* with a tenor of less than one year) or other capitalmarkets instruments of any kind (whether publicly listed or privately placed)by any member of the Group in accordance with Clause 9.4 (MandatoryPrepayment—application of proceeds) below.

 

(e)                                  Inparagraphs (a), (b), (c) and (d) above:

 

**net disposal proceeds**means any amount received by a member of the Group as consideration for adisposal to a person which is not a member of the Group, including the amountof any intercompany loan repaid to continuing members of the Group andincluding any Financial Indebtedness assumed, repaid, or prepaid (whether ornot a voluntary or mandatory prepayment), redeemed, repurchased, purchased,defeased (whether by way of legal or covenant defeasance) or otherwise reducedless all Taxes payable in the financial year in which the disposal is effectedor proceeds received and reasonable costs and expenses incurred by members ofthe Group in connection with the disposal or receipt as set out in reasonabledetail in a certificate provided by the chief financial officer of the Company;and

 

**net issuance proceeds**means any amount received by any member of the Group less all Taxes andreasonable costs and expenses incurred by members of the Group in connectionwith that receipt.

 

(f)                                    Wherean amount equal to any net proceeds from an Asset Sale (as defined in the HighYield Bonds) is not or has not been on or prior to constituting Excess Proceeds(as defined in and for the 

 

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purposes of the HighYield Bonds) applied by the relevant Borrower in prepayment of Utilisationsunder this Agreement, the Company must and shall ensure that each Borrower doespromptly apply in prepayment and/or cancellation of the Facilities an amountequal to such net proceeds in accordance with Clause 9.4 (MandatoryPrepayment—application of proceeds) below.

 

(g)                                 Wherean amount of a Secured Intra-Group Loan is recovered or discharged by theCompany, the Company shall forthwith ensure that an amount equal to thatrecovery or discharge shall be applied in prepayment and/or cancellation of theFacilities in accordance with Clause 9.4 (Mandatory Prepayment—application ofproceeds) below.

 

**9.4****                               MandatoryPrepayment—application of proceeds**

 

(a)                                  Subjectto Clause 9.3(a), amounts to be prepaid under Clause 9.3 (MandatoryPrepayment—disposals, equity and capital market issues) shall be appliedagainst each Facility *pro rata* to the Total Commitments undereach Facility and in accordance with paragraphs (b) and (c) below.

 

(b)                                 Amountsto be applied pursuant to paragraph (a) above shall be applied against eachTranche of the Medium-Term Facility *pro rata*to the aggregate Commitments undereach Tranche and in accordance with paragraph (c) below.

 

(c)                                  Anyand all amounts required to be applied against a Facility or Tranche as thecase may be pursuant to paragraphs (a) or (b) above shall be applied:

 

(i)                                     first,in prepayment of the Loans outstanding under each Facility or Tranche as thecase may be on a *pro rata* basis; and

 

(ii)                                  secondly,in prepayment of the Guarantees outstanding under Tranche A and Tranche B ofthe Medium-Term Facility on a *pro rata* basis; and

 

(iii)                               thirdly,to the extent that such amounts exceed the aggregate amount of Utilisationsunder that Facility or Tranche as the case may be in prepayment andcancellation of the aggregate Commitments under that Facility or Tranche as thecase may be until cancelled in full.

 

(d)                                 Wherean amount is to be applied under this Clause 9.4 in prepayment of any amount ofa Loan outstanding under a Facility, unless the date on which the payment is tobe made by the Company is the last day of a Term, that amount shall be paidthrough the Facility Agent into an interest bearing blocked and secured accountin France including by way of *gage-espèces* or *gage de comptes d’instrumentsfinanciers* held with Facility Agent or when appointed the SecurityAgent and in the case of a prepayment of any amount of a Guarantee that amountmay be provided by way of cash cover. The Company irrevocably authorises theFacility Agent to apply any amount deposited with it under this paragraph (d)towards prepayment of the Facility on the last day of the relevant Term orearlier at the discretion of the Facility Agent.

 

**9.5****                               Voluntaryprepayment**

 

(a)                                  TheCompany may, by giving not less than five Business Days’ prior written noticeto the Facility Agent, prepay (or ensure that a Borrower prepays) any Loanunder each Facility, and in the case of the Medium-Term Facility each Trancheon a *prorata* basis, at any time in whole or in part.

 

(b)                                 Aprepayment of part of a Loan must be in a minimum amount of €10,000,000 and anintegral multiple of €5,000,000 or, if such Loan is denominated in an OptionalCurrency, an integral multiple of 100,000 of the largest currency unit of thatOptional Currency.

 

(c)                                  TheCompany’s notice shall specify the euro Amount of the specific Loan to beprepaid and the proposed date of prepayment.

 

(d)                                 Loansprepaid under this Clause 9.5 shall be applied against the participations ofthe Lenders in the relevant Loans *pro rata*.

 

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**9.6****                               Automaticcancellation**

 

The Commitment of eachLender will be automatically cancelled at the close of business on the last dayof the Availability Period.

 

**9.7****                               Voluntarycancellation**

 

(a)                                  TheCompany may, by giving not less than ten Business Days’ prior written notice tothe Facility Agent, cancel the unutilised amount of the Total Commitments undera Facility, as the case may be, in whole or in part.

 

(b)                                 Partialcancellation of the Total Commitments must be in a minimum amount of€30,000,000 and an integral multiple of €5,000,000.

 

(c)                                  TheCompany’s notice shall specify the amount and date of the cancellation.

 

(d)                                 Anycancellation of the Medium-Term Facility in part will be applied againstTranche A and Tranche B of the Medium-Term Facility Commitments of each Lender *pro rata*.

 

**9.8****                               Involuntaryprepayment and cancellation**

 

(a)                                  Ifan Obligor is, or will be, required to pay to a Lender a Tax Payment or anIncreased Cost, the Company may, while the requirement continues, give noticeto the Facility Agent requesting prepayment and cancellation in respect of thatLender.

 

(b)                                 Afternotification under paragraph (a) above:

 

(i)                                     eachBorrower must repay or prepay that Lender’s share in each Utilisation made toit on the date specified in paragraph (c) below; and

 

(ii)                                  theCommitment of that Lender will be immediately cancelled.

 

(c)                                  Thedate for repayment or prepayment of a Lender’s share in a Utilisation will bethe last day of the Term for that Utilisation or, if earlier, the datespecified by the Company in its notification.

 

**9.9****                               Re-borrowingof Utilisations**

 

Any voluntary prepaymentof a Utilisation may be re-borrowed on the terms of this Agreement. Anymandatory or involuntary prepayment of a Utilisation may not be re-borrowed andthe corresponding Commitment shall be cancelled.

 

**9.10****                        Miscellaneousprovisions**

 

(a)                                  Anynotice of prepayment and/or cancellation under this Agreement is irrevocableand must specify the relevant date(s) and the affected Utilisations andCommitments. The Facility Agent must notify the Lenders promptly of receipt ofany such notice.

 

(b)                                 Allprepayments under this Agreement must be made with accrued interest on theamount prepaid. No premium or penalty is payable in respect of any prepaymentexcept for Break Costs.

 

(c)                                  TheMajority Lenders may agree a shorter notice period for a voluntary prepaymentor a voluntary cancellation.

 

(d)                                 Noprepayment or cancellation is allowed except in accordance with the expressterms of this Agreement.

 

(e)                                  Noamount of the Total Commitments cancelled under a Facility may subsequently bereinstated. 

 

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**10.****                               INTEREST AND GUARANTEE FEES**

 

**10.1****                        Calculationof interest**

 

The rate of interest oneach Loan for each Term is the percentage rate per annum equal to the aggregateof the applicable:

 

(a)                                  Margin;

 

(b)                                 EURIBORor, in the case of a Loan in an Optional Currency, LIBOR or, in the case of aLoan in euro-Sterling, PIBOR; and

 

(c)                                  MandatoryCost.

 

**10.2****                        Paymentof interest**

 

Except where it isprovided to the contrary in this Agreement, each Borrower must pay accruedinterest on each Loan made to it on the last day of each Term and also, if theTerm is longer than six months, on the dates falling at six-monthly intervalsafter the first day of that Term.

 

**10.3****                        Intereston overdue amounts**

 

(a)                                  Ifan Obligor fails to pay any amount payable by it under the Finance Documents,it must immediately on demand by the Facility Agent pay interest on the overdueamount from its due date up to the date of actual payment, both before, on andafter judgment.

 

(b)                                 Intereston an overdue amount is payable at a rate determined by the Facility Agent tobe two per cent. per annum above the rate which would have been payable if theoverdue amount had, during the period of non-payment, constituted a Loan in thecurrency of the overdue amount. For this purpose, the Facility Agent may(acting reasonably):

 

(i)                                     selectsuccessive Terms of any duration of up to three months; and

 

(ii)                                  determinethe appropriate Rate Fixing Day for that Term.

 

(c)                                  Notwithstandingparagraph (b) above, if the overdue amount is a principal amount of a Loan andbecomes due and payable prior to the last day of its current Term, then:

 

(i)                                     thefirst Term for that overdue amount will be the unexpired portion of that Term;and

 

(ii)                                  therate of interest on the overdue amount for that first Term will be two percent. per annum above the rate then payable on that Loan.

 

After the expiry of thefirst Term for that overdue amount, the rate on the overdue amount will becalculated in accordance with paragraph (b) above.

 

(d)                                 Interest(if unpaid) on an overdue amount will be compounded with that overdue amount atthe end of each of its Terms but will remain immediately due and payable.

 

**10.4****                        Notificationof rates of interest and fees**

 

The Facility Agent mustpromptly notify each relevant Party of the determination of a rate of interestunder this Agreement. The Facility Agent will also notify each relevant Partyon a quarterly basis of the Guarantees which have been issued and remainoutstanding and of the calculations it has made in respect of fees payableunder this Agreement.

 

**10.5****                        Guaranteefee**

 

(a)                                  EachBorrower must pay to the Facility Agent for each Lender a guarantee feecomputed at the rate of 3.05 per cent. per annum on the outstanding amount ofeach Guarantee requested by it for the period from the issue of that Guaranteeuntil its Maturity Date. This fee will be distributed 

 

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according to eachLender’s Pro Rata Share, adjusted to reflect any assignment or transfer to orby that Lender.

 

(b)                                 Guaranteefee is payable on the date of issue of a Guarantee and quarterly in advancethereafter on a *pro rata temporis* basis (or any shorter period that ends onthe Maturity Date for that Guarantee).

 

**10.6****                        EffectiveGlobal Rate (*Taux Effectif Global*)**

 

For the purpose ofArticles L.313-1, L.313-2, R 313-1 and R 313-2 of the French Consumer Code (*Code de laConsommation*), each Party acknowledges that:

 

(a)                                  byvirtue of certain characteristics of this Agreement (including the variableinterest rate applicable to Loans and a Borrower’s right to select the currencyand the duration of a Term), the *taux effectif global* cannot be calculatedon the date of this Agreement, but that an indicative calculation of the *tauxeffectif global*, based on assumptions as to the *taux de période* and the *durée depériode*, will be set out in a letter from the Facility Agent to eachOriginal Borrower incorporated in France substantially in the form ofSchedule 11 (Form of *Taux effectif global* Letter); and

 

(b)                                 thatletter forms part of this Agreement. 

 

**11.****                               TERMS**

 

**11.1****                        Selection**

 

(a)                                  EachUtilisation has one Term only.

 

(b)                                 ABorrower must select the Term for a Utilisation in the relevant Request.

 

(c)                                  Subjectto the following provisions of this Clause, each Term for a Medium-TermFacility Loan will be one, two or three months or any other period agreed bythe Company and the Lenders up to a maximum period of twelve months. Each Termfor a Short-Term Facility Loan will be one month only.

 

(d)                                 Subjectto the following provisions of this Clause, each Term for a Guarantee will bethe expiry date of the liability of the relevant Issuing Bank under theGuarantee and will fall on or before the date falling one month prior to theFinal Maturity Date and will be no shorter than one month from the date ofissue.

 

**11.2****                        Nooverrunning the Final Maturity Date**

 

If a Term would otherwiseoverrun the relevant Final Maturity Date, it will be shortened so that it endson that Final Maturity Date.

 

**11.3****                        Notification**

 

The Facility Agent mustnotify the Borrower and the Lenders of the duration of each Term promptly afterascertaining its duration. 

 

**12.****                               MARKET DISRUPTION**

 

**12.1****                        Failureof a Reference Bank to supply a rate**

 

If EURIBOR, LIBOR orPIBOR is to be calculated by reference to the Reference Banks but a ReferenceBank does not supply a rate by 11.30 a.m. (London time in the case of LIBORReference Banks) on a Rate Fixing Day, the applicable EURIBOR, LIBOR or PIBORwill, subject as provided below, be calculated on the basis of the rates of theremaining Reference Banks.

 

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**12.2****                        Marketdisruption**

 

(a)                                  Inthis Clause, each of the following events is a **market disruption event**:

 

(i)                                     EURIBOR,LIBOR or PIBOR is to be calculated by reference to the Reference Banks but no,or only one, Reference Bank supplies a rate by 11.30 a.m. (London time in thecase of LIBOR Reference Banks) on the Rate Fixing Day; or

 

(ii)                                  theFacility Agent receives by close of business on the Rate Fixing Daynotification from Lenders whose shares in the relevant Loan exceed thirty-fiveper cent. (35%) of that Loan in their opinion:

 

(A)                              matchingdeposits may not be available to them in the relevant interbank market in theordinary course of business to fund their participations in that Loan for therelevant Term; or

 

(B)                                thatthe cost to them of obtaining matching deposits in the relevant interbankmarket is in excess of EURIBOR, LIBOR or PIBOR for the relevant Term.

 

(b)                                 TheFacility Agent must promptly notify the Company and the Lenders of a marketdisruption event.

 

(c)                                  Therate of interest on each Lender’s share in the affected Loan for the relevantTerm will be the aggregate of the applicable:

 

(i)                                     Margin;

 

(ii)                                  ratenotified to the Facility Agent by that Lender as soon as practicable, and inany event before interest is due to be paid in respect of that Term, to be thatwhich expresses as a percentage rate per annum the cost to that Lender offunding its share in that Loan from whatever source it may reasonably select;and

 

(iii)                               MandatoryCost.

 

**12.3****                        Alternativebasis of interest or funding**

 

(a)                                  Ifa market disruption event occurs and the Facility Agent or the Company sorequires, the Company and the Facility Agent must enter into negotiations for aperiod of not more than 30 days with a view to agreeing an alternative basisfor determining the rate of interest and/or funding for the affected Loan andany future Loan.

 

(b)                                 Anyalternative basis agreed will be, with the prior consent of all the Lenders,binding on all the Parties. 

 

**13.****                               TAXES**

 

**13.1****                        General**

 

In this Clause **Tax Credit**means a credit against any Tax or any relief or remission for Tax (or itsrepayment).

 

**13.2****                        Taxgross-up**

 

(a)                                  EachObligor must make all payments to be made by it or, by the Facility Agent to aFinance Party, under the Finance Documents without any Tax Deduction, unless aTax Deduction is required by law.

 

(b)                                 Ifan Obligor or a Lender is aware that an Obligor must make a Tax Deduction (orthat there is a change in the rate or the basis of a Tax Deduction), it mustpromptly notify the Facility Agent. The Facility Agent must then promptlynotify the affected Parties.

 

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(c)                                  Ifa Tax Deduction is required by law to be made by an Obligor or the FacilityAgent, the amount of the payment due from the Obligor will be increased to anamount which (after making the Tax Deduction) leaves an amount equal to thepayment which would have been due if no Tax Deduction had been required.

 

(d)                                 Ifan Obligor is required to make a Tax Deduction, that Obligor must make theminimum Tax Deduction allowed by law and must make any payment required inconnection with that Tax Deduction within the time allowed by law.

 

(e)                                  Within30 days of making either a Tax Deduction or a payment required in connectionwith a Tax Deduction, the Obligor making that Tax Deduction must deliver to theFacility Agent for the relevant Finance Party evidence satisfactory to thatFinance Party (acting reasonably) that the Tax Deduction has been made or (asapplicable) the appropriate payment has been paid to the relevant taxingauthority.

 

(f)                                    Ifan Obligor is, or becomes obliged, to make a Tax Deduction and is prevented byapplicable law from paying the additional amounts referred to in paragraph (c)above:

 

(i)                                     theFinance Party (if a Lender) may, by notice to the Obligor through the FacilityAgent, require the Obligor to prepay all or part of its participation in theUtilisations; and

 

(ii)                                  theCommitment of that Finance Party shall be cancelled forthwith and the Obligorshall prepay the participations of that Finance Party in each Utilisation onthe date falling ten days after the date of the notice,

 

provided thatnotwithstanding such prepayment the Obligor shall be obliged to pay theadditional amounts to that Finance Party which it is prevented from paying assoon as it may legally do so and such obligation shall survive any cancellationor termination of this Agreement.

 

**13.3****                        Taxindemnity**

 

(a)                                  Exceptas provided below, the Company must indemnify a Finance Party against any lossor liability which that Finance Party (in its absolute discretion) determineswill be or has been suffered (directly or indirectly) by that Finance Party foror on account of Tax in relation to a payment received or receivable (or anypayment deemed to be received or receivable) under a Finance Document.

 

(b)                                 Paragraph(a) above does not apply to any Tax assessed on a Finance Party under the lawsof the jurisdiction in which:

 

(i)                                     thatFinance Party is incorporated or, if different, the jurisdiction (orjurisdictions) in which that Finance Party has a Facility Office and is treatedas resident for tax purposes; or

 

(ii)                                  thatFinance Party’s Facility Office is located in respect of amounts received orreceivable in that jurisdiction,

 

if that Tax is imposed onor calculated by reference to the net income received or receivable by thatFinance Party. However, any payment deemed to be received or receivable,including any amount treated as income but not actually received by the FinanceParty, such as a Tax Deduction, will not be treated as net income received orreceivable for this purpose.

 

(c)                                  AFinance Party making, or intending to make, a claim under paragraph (a) abovemust promptly notify the Company of the event which will give, or has given,rise to the claim.

 

**13.4****                        TaxCredit**

 

If an Obligor makes a TaxPayment and the relevant Finance Party in its absolute discretion (acting ingood faith) determines that:

 

(a)                                  aTax Credit is attributable to that Tax Payment; and

 

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(b)                                 ithas used and retained that Tax Credit,

 

the Finance Party mustpay an amount to the Obligor which that Finance Party determines in itsabsolute discretion (acting in good faith) will leave it (after that payment)in the same after-tax position as it would have been if the Tax Payment had notbeen required to be made by the Obligor.

 

**13.5****                        Stamptaxes**

 

The Company must pay andindemnify each Finance Party against any stamp duty, registration or othersimilar Tax payable in connection with the entry into, performance orenforcement of any Finance Document, except for any such Tax payable in connectionwith the entry into of a Transfer Certificate unless such Transfer Certificateis entered into at the request of an Obligor.

 

**13.6****                        Valueadded taxes**

 

(a)                                  Anyamount (including costs and expenses) payable under a Finance Document by anObligor is exclusive of any value added tax or any other Tax of a similarnature which might be chargeable in connection with that amount. If any suchTax is chargeable, the Obligor must pay to the Finance Party (in addition toand at the same time as paying that amount) an amount equal to the amount ofthat Tax.

 

(b)                                 Theobligation of any Obligor under paragraph (a) above will be reduced to theextent that the Finance Party determines (acting reasonably) that it isentitled to repayment or a credit in respect of the relevant Tax. 

 

**14.****                               INCREASED COSTS**

 

**14.1****                        IncreasedCosts**

 

Except as provided belowin this Clause, each Borrower must pay to a Finance Party the amount of anyIncreased Cost incurred by that Finance Party or any of its Affiliates as aresult of:

 

(a)                                  theintroduction of, or any change in, or any change in the interpretation,administration or application of, any law or regulation; or

 

(b)                                 compliancewith any law or regulation,

 

made after the date ofthis Agreement.

 

**14.2****                        Exceptions**

 

No Borrower need make anypayment for an Increased Cost to the extent that the Increased Cost is:

 

(a)                                  compensatedfor under another Clause or would have been but for an exception to thatClause;

 

(b)                                 atax on the overall net income of a Finance Party or any of its Affiliates; or

 

(c)                                  attributableto a Finance Party or its Affiliate wilfully failing to comply with any law orregulation.

 

**14.3****                        Claims**

 

A Finance Party intendingto make a claim for an Increased Cost must notify the Company promptly of thecircumstances giving rise to, and the amount of, the claim. 

 

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**15.****                               MITIGATION**

 

**15.1****                        Mitigation**

 

(a)                                  EachFinance Party must, in consultation with the Company, take all reasonable stepsto mitigate any circumstances which arise and which result or would result in:

 

(i)                                     anyTax Payment or Increased Cost being payable to that Finance Party;

 

(ii)                                  thatFinance Party being able to exercise any right of prepayment and/orcancellation under this Agreement by reason of any illegality; or

 

(iii)                               thatFinance Party incurring any cost of complying with the minimum reserverequirements of the European Central Bank,

 

including transferringits rights and obligations under the Finance Documents to an Affiliate orchanging its Facility Office.

 

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

 

(c)                                  TheCompany must indemnify each Finance Party for all costs and expenses reasonablyincurred by that Finance Party as a result of any step taken by it under thisClause.

 

(d)                                 AFinance Party is not obliged to take any step under this Clause if, in theopinion of that Finance Party (acting reasonably), to do so might beprejudicial to it.

 

**15.2****                        Conductof business by a Finance Party**

 

No term of this Agreementwill:

 

(a)                                  interferewith the right of any Finance Party to arrange its affairs (Tax or otherwise)in whatever manner it thinks fit;

 

(b)                                 obligeany Finance Party to investigate or claim any credit, relief, remission orrepayment available to it in respect of Tax or the extent, order and manner ofany claim; or

 

(c)                                  obligeany Finance Party to disclose any information relating to its affairs (Tax orotherwise) or any computation in respect of Tax. 

 

**16.****                               PAYMENTS**

 

**16.1****                        Place**

 

Unless a Finance Documentspecifies that payments under it are to be made in another manner, all paymentsby a Party (other than the Facility Agent) under the Finance Documents must bemade to the Facility Agent to its account at such office or bank:

 

(a)                                  inthe principal financial centre of the country of the relevant currency; or

 

(b)                                 inthe case of euro, in the principal financial centre of a Participating MemberState or London,

 

as it may notify to thatParty for this purpose by not less than five Business Days’ prior notice.

 

**16.2****                        Funds**

 

Payments under theFinance Documents to the Facility Agent must be made for value on the due dateat such times and in such funds as the Facility Agent may specify to the Partyconcerned as being customary at the time for the settlement of transactions inthe relevant currency in the place for payment.

 

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**16.3****                        Distribution**

 

(a)                                  Eachpayment received by the Facility Agent under the Finance Documents for anotherParty must, except as provided below, be made available by the Facility Agentto that Party by payment (as soon as practicable after receipt) to its accountwith such office or bank:

 

(i)                                     inthe principal financial centre of the country of the relevant currency; or

 

(ii)                                  inthe case of euro, in the principal financial centre of a Participating MemberState or London,

 

as it may notify to theFacility Agent for this purpose by not less than five Business Days’ priornotice.

 

(b)                                 TheFacility Agent may apply any amount received by it for an Obligor in or towardspayment (as soon as practicable after receipt) of any amount due from thatObligor under the Finance Documents or in or towards the purchase of any amountof any currency to be so applied.

 

(c)                                  Wherea sum is paid to the Facility Agent under this Agreement for another Party, theFacility Agent is not obliged to pay that sum to that Party until it hasestablished that it has actually received it. However, the Facility Agent mayassume that the sum has been paid to it, and, in reliance on that assumption,make available to that Party a corresponding amount. If it transpires that thesum has not been received by the Facility Agent, that Party must immediately ondemand by the Facility Agent refund any corresponding amount made available toit together with interest on that amount from the date of payment to the dateof receipt by the Facility Agent at a rate calculated by the Facility Agent toreflect its cost of funds.

 

(d)                                 TheCompany irrevocably and unconditionally instructs the Facility Agent to applydirectly towards repayment of the Refinanced Facilities such proportion of theproceeds of the first Utilisation as is necessary to ensure that, whenaggregated with the amounts which the Company notifies the Facility Agent itintends to apply towards repayment of the Refinanced Facilities from its ownresources, the Refinanced Facilities are repaid in full by close of business onthe Utilisation Date of the first Utilisation (and to the extent of suchrepayment not to make those proceeds available to the Company under paragraph(a) above).

 

**16.4****                        Currency**

 

(a)                                  Unlessa Finance Document specifies that payments under it are to be made in adifferent manner, the currency of each amount payable under the FinanceDocuments is determined under this Clause.

 

(b)                                 Interestis payable in the currency in which the relevant amount in respect of which itis payable is denominated.

 

(c)                                  Arepayment or prepayment of any principal amount is payable in the currency inwhich that principal amount is denominated on its due date.

 

(d)                                 Amountspayable in respect of costs and expenses are payable in the currency in whichthey are incurred.

 

(e)                                  Eachother amount payable under the Finance Documents is payable in euro.

 

**16.5****                        Noset-off or counterclaim**

 

All payments made by anObligor under the Finance Documents must be made without set-off orcounterclaim.

 

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**16.6****                        BusinessDays**

 

(a)                                  Ifa payment under the Finance Documents is due on a day which is not a BusinessDay, the due date for that payment will instead be the next Business Day in thesame calendar month (if there is one) or the preceding Business Day (if thereis not) or whatever day the Facility Agent determines is market practice.

 

(b)                                 Duringany extension of the due date for payment of any principal under this Agreementinterest is payable on that principal at the rate payable on the original duedate.

 

**16.7****                        Partialpayments**

 

(a)                                  Ifany Administrative Party receives a payment insufficient to discharge all theamounts then due and payable by an Obligor under the Finance Documents, theAdministrative Party must apply that payment towards the obligations of thatObligor under the Finance Documents in the following order:

 

(i)**                                     first**,in or towards payment *pro rata* of any unpaid fees, costs andexpenses of the Administrative Parties under the Finance Documents;

 

(ii)**                                  secondly**,in or towards payment *pro rata* of any accrued interest or feedue but unpaid under this Agreement by that Obligor;

 

(iii)**                               thirdly**,in or towards payment *pro rata* of any principal amount due butunpaid under this Agreement by that Obligor; and

 

(iv)**                              fourthly**,in or towards payment *pro rata* of any other sum due but unpaidunder the Finance Documents by that Obligor.

 

(b)                                 TheFacility Agent must, if so directed by all the Lenders, vary the order set outin sub-paragraphs (a)(ii) to (iv) above.

 

(c)                                  ThisClause will override any appropriation made by an Obligor.

 

**16.8****                        Timingof payments**

 

If a Finance Documentdoes not provide for when a particular payment is due, that payment will be duewithin three Business Days of demand by the relevant Finance Party. 

 

**17.****                               GUARANTEE AND INDEMNITY**

 

**17.1****                        Guaranteeand indemnity**

 

The Company irrevocablyand unconditionally:

 

(a)                                  guaranteesto each Finance Party punctual performance by each Borrower of all its paymentobligations under the Finance Documents;

 

(b)                                 undertakeswith each Finance Party that, whenever a Borrower does not pay any amount whendue under any Finance Document, the Company must immediately on demand by theFacility Agent pay that amount as if it were the principal obligor; and

 

(c)                                  indemnifieseach Finance Party immediately on demand against any loss or liability sufferedby that Finance Party if any payment obligation guaranteed by it is or becomesunenforceable, invalid or illegal; the amount of the loss or liability underthis indemnity will be equal to the amount the Finance Party would otherwisehave been entitled to recover.

 

**17.2****                        Continuingguarantee**

 

This guarantee is acontinuing guarantee and will extend to the ultimate balance of all sumspayable by any Borrower under the Finance Documents, regardless of anyintermediate payment or discharge in whole or in part.

 

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**17.3****                        Reinstatement**

 

(a)                                  Ifany discharge (whether in respect of the obligations of any Borrower or anysecurity for those obligations or otherwise) or arrangement is made in whole orin part on the faith of any payment, security or other disposition which isavoided or must be restored on insolvency, liquidation or otherwise withoutlimitation, the liability of the Company under this Clause will continue as ifthe discharge or arrangement had not occurred.

 

(b)                                 EachFinance Party may concede or compromise any claim that any payment, security orother disposition is liable to avoidance or restoration.

 

**17.4****                        Waiverof defences**

 

The obligations of theCompany under this Clause will not be affected by any act, omission or thingwhich, but for this provision, would reduce, release or prejudice any of itsobligations under this Clause (whether or not known to it or any FinanceParty). This includes:

 

(a)                                  anytime or waiver granted to, or composition with, an Obligor or any person;

 

(b)                                 anyrelease of an Obligor or any person under the terms of any composition orarrangement;

 

(c)                                  thetaking, variation, compromise, exchange, renewal or release of, or refusal orneglect to perfect, take up or enforce, any rights against, or security overassets of, an Obligor or any other person;

 

(d)                                 anynon-presentation or non-observance of any formality or other requirement inrespect of any instrument or any failure to realise the full value of anysecurity;

 

(e)                                  anyincapacity or lack of power, authority or legal personality of or dissolutionor change in the members or status of an Obligor or any person;

 

(f)                                    anyamendment (however fundamental) of a Transaction Document or any other documentor security;

 

(g)                                 anyunenforceability, illegality, invalidity or non-provability of any obligationof any person under any Transaction Document or any other document or security;or

 

(h)                                 anyinsolvency or similar proceedings.

 

**17.5****                        Immediaterecourse**

 

The Company waives anyright it may have of first requiring any Finance Party (or any trustee or agenton its behalf) to proceed against or enforce any other right or security orclaim payment from any person before claiming from the Company under thisClause.

 

**17.6****                        Appropriations**

 

Until all amounts whichmay be or become payable by the Borrowers under the Finance Documents have beenirrevocably paid in full, each Finance Party (or any trustee or agent on itsbehalf) may without affecting the liability of the Company under this Clause:

 

(a)                                  refrainfrom applying or enforcing any other moneys, security or rights held orreceived by that Finance Party (or any trustee or agent on its behalf) inrespect of those amounts; or

 

(b)                                 applyand enforce them in such manner and order as it sees fit (whether against thoseamounts or otherwise); and

 

(c)                                  holdin an interest-bearing suspense account any moneys received from the Company oron account of the Company’s liability under this Clause.

 

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**17.7****                        Non-competition**

 

Unless:

 

(a)                                  allamounts which may be or become payable by the Obligors under the FinanceDocuments have been irrevocably paid in full; or

 

(b)                                 theFacility Agent otherwise directs,

 

the Company will not,after a claim has been made or by virtue of any payment or performance by itunder this Clause:

 

(i)                                     besubrogated to any rights, security or moneys held, received or receivable byany Finance Party (or any trustee or agent on its behalf);

 

(ii)                                  beentitled to any right of contribution or indemnity in respect of any paymentmade or moneys received on account of the Company’s liability under thisClause;

 

(iii)                               claim,rank, prove or vote as a creditor of any Obligor or its estate in competitionwith any Finance Party (or any trustee or agent on its behalf); or

 

(iv)                              receive,claim or have the benefit of any payment, distribution or security from or onaccount of any Borrower, or exercise any right of set-off as against anyBorrower.

 

The Company must to thefullest extent permitted by law hold in trust for and immediately pay ortransfer to the Facility Agent for the Finance Parties any payment ordistribution or benefit of security received by it (A) contrary to paragraphs(i), (ii) or (iii) above or (B) with respect to any contribution or indemnityin respect of any payment made or moneys received on account of the Guarantor’sliability under this Clause 17 or in respect of any payment or distribution orsecurity from or on account of any member of the Group or any right of set-offas against any member of the Group, subject to and in accordance with theSubordination Agreement and in accordance with any directions given by theFacility Agent.

 

**17.8****                        Additionalsecurity**

 

This guarantee is inaddition to and is not in any way prejudiced by any other security now orsubsequently held by any Finance Party. 

 

**18.****                               REPRESENTATIONS AND WARRANTIES**

 

**18.1****                        Representationsand warranties**

 

Each Obligor party tothis Agreement makes the representations and warranties set out in this Clause18 in respect of itself and each of its Subsidiaries to each Finance Party. Inaddition the Company makes the representations and warranties set out in thisClause 18 in respect of itself and each Obligor not party to this Agreement.

 

**18.2****                        Status**

 

(a)                                  Itis a limited liability company, duly incorporated and in good standing andvalidly existing under the laws of the jurisdiction of its incorporation; and

 

(b)                                 ithas the power to own its assets and carry on its business as it is beingconducted.

 

**18.3****                        Powersand authority**

 

It has the power to enterinto and perform, and has or will have taken at the relevant time all necessaryaction to authorise the entry into, performance and delivery of the TransactionDocuments to which it is or will be a party and the transactions contemplatedby those Transaction Documents.

 

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**18.4****                        Legalvalidity**

 

Each Transaction Documentto which it is or will be a party constitutes, or when executed in accordancewith its terms will constitute, its legally binding, valid and enforceableobligation.

 

**18.5****                        Non-conflict**

 

(a)                                  Theentry into and performance by it of, and the transactions contemplated by, theTransaction Documents do not and will not conflict with:

 

(i)                                     anylaw or regulation or judicial or official order; or

 

(ii)                                  itsor any of its Subsidiaries’ constitutional documents; or

 

(iii)                               anydocument which is binding upon it or any of its or its Subsidiaries’ assets.

 

(b)                                 Theborrowing of the Total Commitments in full will not cause any borrowing limitbinding on any Borrower to be exceeded.

 

**18.6****                        NoDefault**

 

(a)                                  NoDefault is outstanding on the date of this Agreement or will result from theexecution of, or the performance of any transaction contemplated by, anyTransaction Document to which it or any of its Subsidiaries is or will be aparty.

 

(b)                                 Noevent or circumstance is outstanding which constitutes (or, with the giving ofnotice, lapse of time, determination of materiality or the fulfilment of anyother applicable condition or any combination of the foregoing, mightconstitute) a default, termination event or early prepayment event under anydocument which is binding on it or any of its Subsidiaries.

 

**18.7****                        Authorisations**

 

All authorisationsrequired by it or desirable in connection with the entry into, performance,validity and enforceability of, and the transactions contemplated by, theTransaction Documents and the implementation of the Asset Disposal Programmeand the Rights Issue have been, or will be when necessary (and in any eventprior to the first Request), obtained or effected (as appropriate) and are, orwill be when obtained or effected, in full force and effect.

 

**18.8****                        Title**

 

It and each member of theGroup has good title to, or valid leases of, or is otherwise entitled to useall material assets necessary to conduct its business as it is conducted at thedate of this Agreement.

 

**18.9****                        Litigation**

 

(a)                                  Nolitigation, arbitration or administrative proceedings are current or, to itsknowledge, pending or threatened against it on the date of this Agreement whichhave or could reasonably be expected to involve a claim or related claims inexcess of €15,000,000 (or its equivalent in other currencies) and thereafterwhich have or could reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Paragraph(a) does not apply to proceedings the full details of which have been providedto the Facility Agent on or prior to the date of this Agreement.

 

**18.10****                 PariPassu Ranking**

 

Its obligations under theFinance Documents rank and will rank at least pari passu with all its unsecuredand unsubordinated obligations except for obligations mandatorily preferred bylaw applying to companies generally.

 

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**18.11****                 Taxeson payments**

 

All amounts payable byeach Obligor under the Finance Documents can be made free and clear of andwithout deduction for or on account of any Tax.

 

**18.12****                 Stampduties**

 

No stamp or registrationduty or similar taxes or charges are payable in its jurisdiction ofincorporation in respect of any Finance Document.

 

**18.13****                 Immunity**

 

(a)                                  Theexecution by each Obligor of each Finance Document constitutes, and itsexercise of its rights and performance of its obligations under each FinanceDocument will constitute, private and commercial acts done and performed forprivate and commercial purposes; and

 

(b)                                 noObligor will be entitled to claim immunity from suit, execution, attachment orother legal process in any proceedings taken in its jurisdiction ofincorporation in relation to any Finance Document.

 

**18.14****                 Noadverse consequences**

 

(a)                                  Itis not necessary under the laws of its jurisdiction of incorporation:

 

(i)                                     inorder to enable any Finance Party to enforce its rights under any FinanceDocument; or

 

(ii)                                  byreason of the execution of any Finance Document or the performance by it of itsobligations under any Finance Document,

 

that any Finance Partyshould be licensed, qualified or otherwise entitled to carry on business in itsjurisdiction of incorporation; and

 

(b)                                 noFinance Party is or will be deemed to be resident, domiciled or carrying onbusiness in its jurisdiction of incorporation by reason only of the execution,performance and/or enforcement of any Finance Document.

 

**18.15****                 Jurisdiction/governinglaw**

 

(a)                                  EachObligor’s:

 

(i)                                     irrevocablesubmission under Clause 38.1 (Jurisdiction) to the jurisdiction of the courtsof England and New York;

 

(ii)                                  agreementthat this Agreement is governed by English law; and

 

(iii)                               agreementnot to claim any immunity to which it or its assets may be entitled,

 

are legal, valid andbinding under the laws of its jurisdiction of incorporation; and

 

(b)                                 anyjudgement obtained in England or in the United States will be recognised and beenforceable by the courts of its jurisdiction of incorporation.

 

**18.16****                 SecurityInterests**

 

(a)                                  Itis the legal and beneficial owner of the property which it purports to chargepursuant to the Security Documents. No Security Interests, third party rights,options, claims and competing interests whatsoever exist over any of its assetsother than as permitted by Clause 21.4 (Negative pledge).

 

(b)                                 TheSecurity Interests granted or intended to be granted under the SecurityDocuments pursuant to the Agreed Security Principles constitute first rankingsecurity in favour of the Finance Parties and implementation of the AgreedSecurity Principles in full does not breach any document binding on the Companyand any of its Subsidiaries.

 

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**18.17****                 Environmentalmatters**

 

It has obtained any andall Environmental Licences required for the carrying on of its business ascurrently conducted and is in compliance in all material respects with (a) theterms and conditions of such Environmental Licences and (b) all otherapplicable Environmental Law which in each case, if not complied with, has, orcould reasonably be expected to have a Material Adverse Effect.

 

**18.18****                 FinancialStatements and Business Plan**

 

(a)                                  Theconsolidated and unconsolidated financial statements of the Company and eachBorrower most recently delivered to the Facility Agent (being, at the date ofthis Agreement, the Original Financial Statements only):

 

(i)                                     havebeen prepared in accordance with accounting principles and practices generallyaccepted in its jurisdiction of incorporation, consistently applied; and

 

(ii)                                  givea true and fair view of its financial condition (consolidated, if applicable)as at the date to which they were drawn up,

 

(b)                                 Therehas been no material adverse change in the consolidated financial condition ofthe Group since the date of the Original Business Plan.

 

(c)                                  Theprojections and forecasts contained in the Business Plan and liquidity andcashflow forecasts most recently delivered to the Facility Agent were made ingood faith and are based on reasonable assumptions and such Business Plan doesnot as at its date omit any projections or forecasts which would make thatBusiness Plan misleading.

 

**18.19****                 Information**

 

(a)                                  (Unlessthe Company has notified the Facility Agent (which shall notify the Lenders) inwriting to the contrary prior to the date of this Agreement, correcting therelevant inaccuracy or lack of completeness) all written information (otherthan the Business Plan) (and including all reports) provided to the FinanceParties by or on behalf of an Obligor or other member of the Group prior to thedate of, and in connection with, this Agreement (the **Information**) was true,complete and accurate in all material respects as at the date it was supplied.

 

(b)                                 Allexpressions of opinion contained in the Information were made after carefulconsideration and were believed by the Company or an Obligor or other member ofthe Group to be reasonable as at the date at which they were stated to begiven.

 

(c)                                  Thefinancial projections contained in the Information were prepared on the basisof assumptions believed by the Company or an Obligor or other member of theGroup to be reasonable and prudent as at the date at which they were stated tobe given.

 

(d)                                 Saveas otherwise disclosed on or before the date of delivery of the Informationnothing has occurred since the date of that Information (or, if applicable, thedate of any factual information contained therein as referred to therein)which, if disclosed, would make that Information untrue or misleading in anymaterial respect.

 

**18.20****                 ExistingFacilities**

 

(a)                                  Thedetails in Schedule 7 Part 2 (Existing Indebtedness) given in relation toeach Existing Facility are, as at the date of this Agreement true, accurate andcomplete.

 

(b)                                 Schedule 7Part 2 (Existing Indebtedness) identifies each agreement under which any memberof the Group or Relevant Entity can incur or has outstanding FinancialIndebtedness or to which there is recourse in respect of Financial Indebtednessto any Obligor or Material Subsidiary in each case on the date of thisAgreement.

 

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**18.21****                 AssetDisposal Programme and Rights Issue**

 

The Company has no reasonto believe that the Asset Disposal Programme and Rights Issue cannot becompleted in full in accordance with the timetable applicable thereto and thatany authorisation or consent necessary for the disposal of an asset referred toin the Asset Disposal Programme or for the launch and implementation of theRights Issue will not be forthcoming in time to allow that disposal or RightsIssue to be implemented in accordance with that timetable.

 

**18.22****                 Inter-CompanyIndebtedness**

 

The list of Intra-GroupLoans made to or by each Obligor provided to the Facility Agent pursuant tothis Agreement, being on the date of this Agreement the list set out inSchedule 13 (Intra-Group Loans), is complete and correct in all materialrespects as at its date.

 

**18.23****                 Solvencyof Obligors**

 

(a)                                  Noproceedings of any nature are current or, to its knowledge, pending orthreatened, for the winding-up or dissolution (including without limitation *dissolution*,*liquidation*or *redressementjudiciaire*) (other than a solvent winding up or dissolution) of, orin respect of any insolvency proceeding of any nature relating to any Obligoror each of its Subsidiaries.

 

(b)                                 Ithas not defaulted on any of its payment obligations under any FacilityAgreement and the Obligors and each of its Subsidiaries are in a position tomeet their respective scheduled payments as they fall due.

 

(c)                                  Inrelation to each Obligor and its Subsidiaries incorporated or organised in theUnited States of America (on a consolidated basis):

 

(i)                                     theaggregate amount of its debts (including its obligations (if any) under theFinance Documents) is less than the aggregate value (being the lesser of fairpresent valuation and present fair saleable value) of its assets (which for,avoidance of doubt, include, without limitation, all rights of indemnification,contribution and subrogation);

 

(ii)                                  itscapital is not unreasonably small to carry on its business as it is beingconducted;

 

(iii)                               itdid not incur (on the date incurred) and will not incur, debts beyond itsability to pay as they mature; and

 

(iv)                              ithas not made a transfer or incurred any obligation under any Finance Documentwith the intent to hinder, delay or defraud any of its present or futurecreditors.

 

Terms used in thisparagraph (c) have the meanings given to them in the United States BankruptcyCode of 1978, as amended, and applicable fraudulent conveyance laws in theUnited States of America.

 

**18.24****                 GroupStructure Chart**

 

As at the date of this Agreement,the Group Structure Chart describes the corporate ownership structure of allmembers of the Group and is true, complete and correct in all materialrespects.

 

**18.25****                 UnitedStates laws**

 

(a)                                  Itis not:

 

(i)                                     aholding company, an affiliate of a holding company or a subsidiary company of aholding company within the meaning of, or otherwise subject to regulation underPUHCA;

 

(ii)                                  apublic utility, or subject to regulation, under the Federal Power Act;

 

(iii)                               aninvestment company or a company controlled by an investment company; or

 

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(iv)                              subjectto regulation under any United States Federal or State law or regulation thatlimits its ability to incur or guarantee indebtedness.

 

**(b)****                                  Marginstock**

 

(i)                                     Theproceeds of the Utilisations have been and will be used only for the purposesdescribed in Clause 3 (Purpose).

 

(ii)                                  Itis not engaged in the business of extending credit for the purpose ofpurchasing or carrying margin stock (within the meaning of Regulations U and Xof the Board of Governors of the United States Federal Reserve System), and noportion of any Utilisation has been or will be used, directly or indirectly, topurchase or carry margin stock or to extend credit to others for the purpose ofpurchasing or carrying margin stock.

 

(iii)                               Noportion of any Utilisation will be used to acquire any security in atransaction that is subject to Section 13 or 14 of the United StatesSecurities Exchange Act of 1934, as amended.

 

**(c)****                                  ERISA**

 

(i)                                     NoERISA Event that could reasonably be expected to have a Material Adverse Effecthas occurred or is reasonably expected to occur with respect to any Plan.

 

(ii)                                  Thepresent value of the benefit liabilities under each Plan, as determined for thepurposes of Schedule B (Actuarial Information) to such Plan’s mostrecently completed annual report (Form 5500 Series) that has been filed withthe required United States governmental agencies, which Schedule B iscomplete and accurate in all material respects, did not, as of the date of suchvaluation, exceed the fair market value of the assets of such Plan by an amountthat, when aggregated with any such excess under any other Plan, couldreasonably be expected to have a Material Adverse Effect, and since the date ofsuch valuation there has been no material adverse change in such funding statusthat, when aggregated with any such change with respect to any other Plan,could reasonably be expected to have a Material Adverse Effect.

 

(iii)                               Exceptas could not reasonably be expected to have a Material Adverse Effect, neitherit nor any ERISA Affiliate has incurred or is reasonably expected to incur anyWithdrawal Liability to any Multiemployer Plan.

 

(iv)                              Exceptas could not reasonably be expected to have a Material Adverse Effect, neitherit nor any ERISA Affiliate has been notified by the sponsor of a MultiemployerPlan that such Multiemployer Plan is in reorganisation or has been terminated,within the meaning of Title IV of ERISA, and no such Multiemployer Plan isreasonably expected to be in reorganisation or to be terminated, within themeaning of Title IV of ERISA.

 

**18.26****                 Timesfor making representations**

 

(a)                                  Therepresentations set out in this Clause are made by each Original Obligor on thedate of this Agreement.

 

(b)                                 Unlessa representation is expressed to be given at a specific date and subject toparagraph (c) below, each representation is deemed to be repeated by:

 

(i)                                     eachAdditional Borrower and the Company on the date that Additional Borrowerbecomes an Obligor; and

 

(ii)                                  eachObligor on the date of each Request and the first day of each Term.

 

(c)                                  Arepresentation made under Clause 18.8 (Title), Clause 18.11 (Taxes onpayments), Clause 18.12 (Stamp duties), Clause 18.19 (Information), Clause18.21 (Asset Disposal Programme and Rights Issue), Clause 18.23 (Solvency ofObligors) and Clause 18.24 (Group Structure Chart) shall not 

 

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be repeated and arepresentation made under Clause 18.18(c) (Financial Statements and BusinessPlan) shall only be repeated on each date that a Business Plan or liquidity andcashflow forecast referred to therein is delivered, and a representation madein the case of Clause 18.22 (Inter-Company Indebtedness) shall be repeated onlyon each date that a list of Intra-Group Loans referred to therein is delivered.

 

(d)                                 Whena representation in Clause 18.6 (No Default) is repeated on a Request for aRollover Utilisation, the reference to a Default will be construed as areference to an Event of Default.

 

(e)                                  Whena representation is repeated, it is applied to the circumstances existing atthe time of repetition. 

 

**19.****                               INFORMATION COVENANTS**

 

**19.1****                        Financialinformation**

 

(a)                                  TheCompany shall supply or procure that the relevant member of the Group orRelevant Entity supplies to the Facility Agent in sufficient copies for theLenders:

 

(i)                                     assoon as the same are available and in any event within 60 days of the end ofits respective financial years:

 

(A)                              theaudited consolidated and unconsolidated financial statements of the Company forthe financial year;

 

(B)                                theaudited or unaudited unconsolidated financial statements of Rhodia Inc. for thefinancial year; and

 

(C)                                theunaudited financial statements of each other Obligor, which may constitutethose prepared for the consolidated financial statements of the Company;

 

(ii)                                  assoon as the same are available and in any event within 90 days of the end ofits financial year the audited consolidated or unconsolidated financialstatements of Rhodia Inc. for the financial year;

 

(iii)                               assoon as the same are available and in any event within 180 days of the end ofits respective financial years the audited unconsolidated financial statementsof each Obligor for the financial year;

 

(iv)                              assoon as the same are available (and in any event within 60 days of the end ofits respective financial half-years):

 

(A)                              theconsolidated and unconsolidated financial statements subject to a limitedreview by the auditors of each Original Borrower for that financial half-year; and

 

(B)                                theunaudited financial statements of each other Obligor, which may constitutethose prepared for the consolidated financial statements of the Company forthat financial half-year;

 

(v)                                 assoon as the same are available (and in any event within 60 days of the end ofeach of its respective financial quarters):

 

(A)                              theconsolidated financial statements of each Borrower for that financial quarter;and

 

(B)                                theunaudited financial statements of each other Obligor, which may constitutethose prepared for the consolidated financial statements of the Company forthat financial quarter;

 

(vi)                              assoon as they become available (and in any event within 30 days of the end ofeach calendar month) a copy of the management accounts of the Company for thatcalendar month which shall contain a profit and loss statement and details ofcashflow and liquidity for that calendar month; and

 

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(vii)                           inrespect of each Relevant Entity:

 

(A)                              assoon as the same are available (and in any event within 180 days of the end ofeach financial year of each Relevant Entity) the audited consolidated financialstatements of that Relevant Entity for that financial year; or

 

(B)                                ifthe audited consolidated financial statements referred to in paragraph (A)above are not prepared by a Relevant Entity, as soon as the same are available(and in any event within 90 days of the end of each financial year of thatRelevant Entity) the financial statements of that Relevant Entity for thatfinancial year; and

 

(C)                                providedthe same are prepared by a Relevant Entity and the Company is entitled toreceive them, as soon as the same are available (and in any event within 60days of the end of each financial half year of each Relevant Entity) the financialstatements (consolidated if prepared and otherwise unconsolidated) of thatRelevant Entity for that half year.

 

(b)                                 Subjectto paragraph (c) below, the Company shall ensure that:

 

(i)                                     eachset of financial statements delivered by it pursuant to paragraphs (a)(i) to(a)(vi) above:

 

(A)                              isprepared in accordance with accounting principles and practices generallyaccepted in France consistently applied;

 

(B)                                shallgive a true and fair view of the financial condition of the Group as at the endof the period to which those financial statements relate and of the results ofits operations during that period; and

 

(C)                                is(in the case of the financial statements referred to in paragraphs (a)(i)(A),(a)(ii) and (a)(iii) above) audited by an internationally recognisedindependent qualified firm of auditors.

 

(c)                                  TheCompany shall ensure that each set of financial statements delivered pursuantto paragraph (a)(vii) above is prepared in accordance with either:

 

(i)                                     accountingprinciples and practices generally accepted internationally if, in the place ofestablishment or incorporation of the Relevant Entity concerned there is alegal requirement to do so; or

 

(ii)                                  ifno such requirement exists, accounting principles and practices generallyaccepted in the place of establishment or incorporation of the Relevant Entityconcerned,

 

in each case consistentlyapplied and shall give a true and fair view of the financial condition of theRelevant Entity to which they relate as at the end of the period to which thoseaccounts relate and of the results of its operations during that period.

 

(d)                                 Togetherwith each set of financial statements delivered under paragraphs (a)(i)(A),(a)(ii) and (a)(iv) above, the Company shall deliver a Compliance Certificatesigned by its statutory auditors setting out in reasonable detail (to theFacility Agent’s reasonable satisfaction) computations in respect of thedefinitions used in and for the purposes of establishing compliance with thefinancial covenants in Clause 20 (Financial Covenants) as at the Testing Date(as defined in Clause 20) to which the financial statements with which therelevant Compliance Certificate was delivered were made.

 

(e)                                  Togetherwith each set of financial statements delivered under paragraph (a)(v) above,the Company shall deliver a Compliance Certificate signed by its chieffinancial officer setting out in reasonable detail computations in respect ofthe definitions used in and for the purposes of establishing compliance withthe financial covenants in Clause 20 (Financial Covenants) as at the TestingDate (as defined in Clause 20) to which those financial statements were madeup.

 

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(f)                                    Togetherwith each set of audited financial statements delivered under paragraphs,(a)(i)(A), (a)(ii) and (a)(iv) above, the Company shall deliver to the FacilityAgent a certificate listing the Material Subsidiaries as determined from thosefinancial statements.

 

(g)                                 TheCompany shall supply the Facility Agent (in sufficient copies for the Lenders)with:

 

(i)                                     assoon as available and in any event within 20 Business Days of the end of eachquarter starting with the quarter ending on 31st March, 2004 an updatedBusiness Plan which shall be validated by Ernst & Young in accordance withthe agreed scope of work (to include an analysis and projections of liquidityand cash as at the end of that quarterly period) for each of the periods endingon 31st March, 2004, 30th June, 2004, 31st December, 2004 and 30th June, 2005;

 

(ii)                                  assoon as the same are available and in any event within 15 Business Days of theend of each of the first two calendar months of each quarter, (A) details ofthe amounts of consolidated gross and net cash available to the Company as atthat date commencing with the calendar month ending 31st December, 2003; and(B) monthly analysis and projections of liquidity and cash as at the end ofeach of the first two calendar months of each quarter including a 12-monthrolling forecast for the next twelve months commencing with the calendar monthending 30th April, 2004 in the same form as the Liquidity Analysis providedwith the Original Business Plan;

 

(iii)                               assoon as the same are available and in any event:

 

(A)                              within10 Business Days of the end of each calendar month, a list of all Intra-GroupLoans made to or by the Company as at the end of that calendar month; and

 

(B)                                within20 Business Days of the end of each calendar month, a list of all Intra-GroupLoans made to or by each Obligor other than the Company as at the end of thatcalendar month;

 

(iv)                              nomore than once in any quarterly period, such information, access to personneland other assistance as is necessary to enable the Finance Parties, actingthrough the Facility Agent, to monitor the cash flow of the Group and compareit with the liquidity and cash flow forecast.

 

(h)                                 TheCompany shall ensure the availability of senior management of the Company formeetings or conference calls with the Lenders on a semi-annual and annualbasis.

 

**19.2****                        Information—miscellaneous**

 

Each Obligor shall supplyto the Facility Agent in sufficient copies for, or make available to, theLenders:

 

(a)                                  allnotices and documents dispatched by it to its shareholders (or any class ofthem) or its creditors (or any class of them) at the same time as they aredispatched;

 

(b)                                 (i)to the extent legally permissible, any report, notice or statement made orissued to any regulatory authority or stock exchange by an Obligor which is tobe made available to the public promptly upon making or issuing the report,notice or statement; and

 

(ii)                                  wherethe report, notice or statement refers to the Lenders, the Company shall wherelegally permissible, give the Facility Agent opportunity to comment on thereport, notice or statement prior to its making or issue;

 

(c)                                  promptly,a copy of any material notification received from any rating agency in respectof the Company’s long term credit rating;

 

(d)                                 promptlyupon becoming aware of them, details of any material litigation, arbitration oradministrative proceedings which are current, threatened or pending which it isor may become involved in;

 

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(e)                                  promptly,reasonable details of any disposal made or to be made pursuant to the AssetDisposal Programme; and

 

(f)                                    promptly,such further information in the possession or control of any member of theGroup regarding the financial condition, structure, business and management ofthe Obligors, the Group as a whole or any Material Subsidiary as the FacilityAgent may reasonably request.

 

**19.3****                        Notificationof Default**

 

(a)                                  TheCompany or relevant Obligor shall, promptly upon becoming aware of theoccurrence of the same, notify the Facility Agent of:

 

(i)                                     anyDefault in respect of it or its Subsidiaries (and the steps, if any, beingtaken to remedy it); or

 

(ii)                                  anyevent or circumstance which constitutes (or, with the giving of notice, lapseof time, determination of materiality or the fulfilment of any applicablecondition or any combination of the foregoing, might constitute) a default,termination event or early prepayment event under any document which is bindingon it or any of its Subsidiaries.

 

(b)                                 TheFacility Agent will promptly notify each Lender of any such Default or event orcircumstance upon receipt of notification from the Obligor.

 

(c)                                  Promptlyupon any request by the Facility Agent (acting in good faith) the Company mustsupply to the Facility Agent a certificate, signed by two of its authorisedsignatories on its behalf, certifying that no Default is outstanding or, if aDefault is outstanding, specifying the Default and the steps, if any, beingtaken to remedy it. 

 

**20.****                               FINANCIAL COVENANTS**

 

**20.1****                        Financialcovenant definitions**

 

In this Clause 20:

 

**Adjusted EBITDAR**means, in respect of a particular period, the Company’s EBITDAR adjusted toreflect the EBITDAR of each Relevant Entity (**Relevant Entity EBITDAR**),provided that the amount of such adjustment shall be *pro rata* to the Company’sparticipation in the capital of the Relevant Entity.

 

**Consolidated Net Indebtedness**means, without double counting, the aggregate of (A) the Company’s long termdebt (including participating loans), bank overdrafts, current portion of longterm debt, (B) guarantees given with respect to Financial Indebtedness of thirdparties or joint ventures in which the Company is involved or the Company’sunconsolidated subsidiaries or otherwise (C) outstanding amounts with respectto any securitisation programme, sale of receivables and any outstanding amountunder a lease (being defined as the aggregate of the net present value of (i)lease rentals and (ii) the residual value or lease balance of such lease) and(D) short term borrowings **minus** the aggregate of cash, short termdeposits, marketable securities, each as calculated from the items so describedin the English language version of the consolidated accounts of the Companymost recently delivered by the Company to the Facility Agent under Clause 19.1(Financial information).

 

**EBITDA** means, inrespect of a particular period, (before restructuring costs and after cashimpact of provisions other than provisions for restructuring) and in respect ofthe Company or a Relevant Entity, the aggregate of the Company’s or theRelevant Entity’s (as the case may be) Operating Income, Depreciation and Amortisationof Assets, where:

 

(a)**                                  OperatingIncome** means net sales minus operating expenses (operating expenses beingproduction costs and expenses, administrative and selling expenses, researchand development 

 

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expenses, Depreciationand Amortisation of Assets, additional goodwill amortisation (if any) andprovision for environmental costs);

 

(b)**                                 Depreciationand Amortisation of Assets** means:

 

(i)                                     amortisationof acquisition goodwill and equity goodwill in net income of affiliatedcompanies;

 

(ii)                                  amortisationof patents, licenses, trade-marks and software;

 

(iii)                               amortisationof other intangible assets;

 

(iv)                              depreciationof land, buildings and other tangible assets;

 

(v)                                 additionalgoodwill amortisation (if any); and

 

(vi)                              investmentsallowance,

 

as determined from theaccounts of the Company and the Relevant Entity most recently delivered by theCompany to the Facility Agent under Clause 19.1 (Financial information) and ifan acquisition or disposal of a Subsidiary has been made which is not takeninto account in the accounts of the Company for the relevant period suchaccounts shall be adjusted by way of pro forma audited financial statements(based on audited financial statements for that Subsidiary (consolidated if ithas Subsidiaries) for the Ratio Period ending immediately prior to thatacquisition or disposal and other assumptions approved by the Facility Agent)in respect of that Subsidiary as if the relevant acquisition or disposal hadbeen made during that relevant period.

 

**EBITDAR** means inrespect of a particular period, EBITDA for that period plus the aggregateamount of any lease rental payments paid or payable in that period to theextent such payments are taken into account as an operating expense in thecalculation of EBITDA.

 

**Net Financial Expenses**means, in respect of a particular period, Interest Expenses **minus**Interest Income, where:

 

(a)**                                  InterestExpenses** means the aggregate of the Company’s interest on financial debtsand financing operations (being interest on loans payable and bank overdrafts,financial expenses related to securitisations, the interest element of leaserental payments, discounts of notes receivable and amortisation of redemptionpremium) after capitalisation of financial expenses related to the financing ofcertain assets and incorporated in the purchase cost of such assets, **excluding**penalties or commissions for loan prepayment, losses on financial instrumentssuch as interest rate options and interest rate swaps, interest payable on nonfinancial debts (commercial or other), loans issuing costs whether or notspread over the duration of the loan, net losses on disposals of marketablesecurities, decreases in the probable stock exchange value of tradingsecurities, losses on repurchase of shares, debentures and other securitiesissued by the Company or its Subsidiaries; and

 

(b)**                                 Interestincome** means the Company’s interest income on financial assets (loansreceivable, debit balance on bank current accounts, etc.), **excluding** income from nonfinancial receivables, gains on financial instruments such as interest rateswaps or interest rate options, gains on disposal of marketable securities,increase in the probable stock exchange value of trading securities, incomefrom marketable securities, gains on repurchase of shares, debentures or othersecurities issued by the Company or its Subsidiaries,

 

each as calculated fromthe items so described in the English language version of the consolidatedfinancial statements of the Company most recently delivered by the Company tothe Facility Agent under Clause 19.1 (Financial information).

 

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**Ratio Period** meanseach twelve month period ending on the date to which each set of financial statementsdelivered by the Company pursuant to Clause 19.1 (Financial information) wasprepared.

 

**Testing Date** means31st March, 30th June, 30th September and 31st December of each year.

 

**20.2****                        Ratioof Consolidated Net Indebtedness to Adjusted EBITDAR**

 

The Company shall procurethat the ratio of its Consolidated Net Indebtedness to its Adjusted EBITDAR isnot, on each Testing Date in relation to any Ratio Period ending on thatTesting Date set out in the column under the heading “Testing Date” in thetable below, greater than the ratio set out opposite that Testing Date in thetable below:

 
| **Ratio**   |   | **Testing Date**     |
|-------------|--------|----------------------|
| 9.50 to 1.0 |   | 31st March, 2004     |
| 9.50 to 1.0 |   | 30th June, 2004      |
| 9.00 to 1.0 |   | 30th September, 2004 |
| 9.00 to 1.0 |   | 31st December, 2004  |
| 7.60 to 1.0 |   | 31st March, 2005     |
| 6.40 to 1.0 |   | 30th June, 2005      |
| 6.00 to 1.0 |   | 30th September, 2005 |
| 5.70 to 1.0 |   | 31st December, 2005  |

 

**20.3****                        Ratioof EBITDAR to Net Financial Expenses**

 

The Company shall procurethat the ratio of its EBITDAR to its Net Financial Expenses is not, at the endof each Ratio Period ending on the Testing Date set out in the column under theheading “Testing Date” in the table below, less than the ratio set out oppositethat Testing Date in the table below:

 
| **Ratio**   |   | **Testing Date**     |
|-------------|--------|----------------------|
| 1.75 to 1.0 |   | 31st March, 2004     |
| 1.20 to 1.0 |   | 30th June, 2004      |
| 1.20 to 1.0 |   | 30th September, 2004 |
| 1.20 to 1.0 |   | 31st December, 2004  |
| 1.35 to 1.0 |   | 31st March, 2005     |
| 1.60 to 1.0 |   | 30th June, 2005      |
| 1.80 to 1.0 |   | 30th September, 2005 |
| 2.00 to 1.0 |   | 31st December, 2005  |

 

**20.4****                        ConsolidatedNet Indebtedness**

 

The Company shall procurethat the Consolidated Net Indebtedness is not on each Testing Date set out inthe column under the heading “Testing Date” in the table below greater than theamount set out opposite that Testing Date in the table below:

 
| **Amount** |          | **Testing Date** |
|------------|---------------|------------------|
| €     | 4,050,000,000 |             |   | 31st March, 2004 |
| €     | 3,450,000,000 |             |   | 30th June, 2004 |
| €     | 3,450,000,000 |             |   | 30th September, 2004 |
| €     | 3,350,000,000 |             |   | 31st December, 2004 |
| €     | 3,350,000,000 |             |   | 31st March, 2005 |
| €     | 3,250,000,000 |             |   | 30th June, 2005 |
| €     | 3,250,000,000 |             |   | 30th September, 2005 |
| €     | 3,250,000,000 |             |   | 31st December, 2005 |

 

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**20.5****                        RestructuringCosts**

 

The consolidatedrestructuring costs of the Group accumulated since the date of the OriginalBusiness Plan (based on the latest consolidated semi-annual or annual financialstatements of the Company) shall not exceed on the date set out in the tablebelow the percentage of the restructuring costs set out opposite that date andreferred to in the Original Business Plan:

 
| **Date**            |   | **% of restructuring costs  of Original Business Plan** |
|---------------------|--------|---------------------------------------------------------|
| 31st December, 2004 |   | 115%                                                    |
| 30th June, 2005     |   | 120%                                                    |
| 31st December, 2005 |   | 130%                                                    |

 

**20.6****                        Calculationand interpretation**

 

(a)                                  Allthe terms used in Clause 20.1 (Financial covenant definitions) are to becalculated in accordance with the accounting principles and practices appliedin connection with the Original Financial Statements, consistently applied.

 

(b)                                 TheCompany shall promptly notify the Facility Agent of:

 

(i)                                     eachchange in the accounting principles and practices in accordance with which theCompany’s consolidated financial statements are prepared; and

 

(ii)                                  eachchange in the end of the Company’s financial year.

 

(c)                                  Followingeach change of the type referred to in paragraph (b) above, the Company shall:

 

(i)                                     procurethat its chief financial officer or (if the Facility Agent so requests) itsstatutory auditors deliver with the audited financial statements of the Companynext delivered under Clause 19.1 (Financial information) (the **New Accounts**)a certificate containing a description of the change in the basis on which theCompany’s consolidated financial statements are prepared from that used in thepreparation of the consolidated financial statements of the Company deliveredimmediately prior to the change (the **Old Accounts**) and information:

 

(A)                              sufficient,in the reasonable opinion of the Majority Lenders, to allow the Finance Partiesto make an accurate comparison of the Company’s financial position as set outin the Old Accounts and that set out in the New Accounts and any adjustmentsnecessary to ensure that the New Accounts reflect the format, and/or basis usedin the preparation, of the Old Accounts; and

 

(B)                                sufficient,in the reasonable opinion of the Facility Agent, to enable the Facility Agentto ascertain the compliance by the Company with the financial covenantscontained in Clauses 20.2 (Ratio of Consolidated Net Indebtedness to AdjustedEBITDAR) and 20.3 (Ratio of EBITDAR to Net Financial Expenses); and

 

(ii)                                  atthe request of the Facility Agent (acting on the instructions of the MajorityLenders), negotiate in good faith with the Facility Agent with a view toagreeing such amendments to this Clause 20 as may be necessary to ensure thatthe Finance Parties’ interests under this Agreement are not prejudiced by suchchange.

 

(d)                                 If:

 

(i)                                     theFacility Agent, acting reasonably, disputes (1) the Company’s statutoryauditors’ interpretation of any term in Clause 20.1 (Financial covenantdefinitions) or any computation under this Clause 20, in each case, containedin a certificate delivered by the Company under Clause 19.1 (Financialinformation) or (2) any certificate or the contents thereof delivered by theCompany’s statutory auditors; or

 

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(ii)                                  ifno agreement is reached within 30 days of a request by the Facility Agent underparagraph (c)(ii) above),

 

the Facility Agent may,at the expense of the Company, instruct an independent expert (which shall bean internationally recognised independent qualified firm of auditors) to act asan expert and not as an arbitrator, and the determination of such expert shallbe final and binding on the Parties and, in the case of an instruction madepursuant to paragraph (d)(ii) above, this Agreement will be amended to theextent such expert advises to be necessary to ensure that the Finance Parties’interests under this Agreement are not prejudiced by the change of the typereferred to in paragraph (b) above. 

 

**21.****                               GENERAL COVENANTS**

 

**21.1****                        General**

 

Each Obligor party tothis Agreement agrees to be bound by the covenants set out in this Clauserelating to it and, where the covenant is expressed to apply to another Obligoror member of the Group or Material Subsidiary, the Company must ensure that suchObligor or member of the Group or Material Subsidiary performs and complieswith that covenant.

 

**21.2****                        Authorisations**

 

Each Obligor and MaterialSubsidiary shall promptly:

 

(a)                                  obtain,maintain and comply with the terms of; and

 

(b)                                 supplycertified copies to the Facility Agent of,

 

any authorisationrequired or desirable under any law or regulation to enable it to enter into orto perform its obligations under, or for the performance, validity orenforceability of, and the transactions contemplated by, any TransactionDocument to which it is a party and to enable the implementation of the AssetDisposal Programme and the Rights Issue.

 

**21.3****                        Paripassu ranking**

 

Each Obligor shall ensurethat its obligations under the Finance Documents and Secured Intra-Group Loansdo and will rank at least *pari passu* with all its present and futureunsecured and unsubordinated obligations, except for obligations mandatorilypreferred by law applying to companies generally.

 

**21.4****                        Negativepledge**

 

(a)                                  NoObligor or Material Subsidiary shall create or permit to subsist any SecurityInterest on any of its assets.

 

(b)                                 Paragraph(a) does not apply to:

 

(i)                                     anySecurity Interest constituted by the Security Documents securing FinancialIndebtedness referred to therein (including refinancing thereof provided thatthe amount of such Financial Indebtedness is not increased);

 

(ii)                                  anySecurity Interest listed in Schedule 7 Part 1 (Existing Security) securingFinancial Indebtedness referred to therein (including refinancing thereofprovided that the amount of such Financial Indebtedness is not increased);

 

(iii)                               anySecurity Interest constituted for the purpose of a Derivative Deposit securingFinancial Indebtedness under Derivative Instruments in an amount no greaterthan the lower of €40,000,000 and the aggregate amount of Derivative Depositsmade on the Term Date;

 

(iv)                              anySecurity Interest constituted by the giving of cash cover pursuant to thisAgreement;

 

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(v)                                 anylien arising by operation of law in the ordinary course of business andsecuring amounts not more than 30 days overdue;

 

(vi)                              anySecurity Interest arising out of title retention provisions in a supplier’sstandard conditions of supply in respect of goods acquired by the relevantObligor or Material Subsidiary in the ordinary course of business;

 

(vii)                           anySecurity Interest created in the ordinary course of business in connection withworkers’ compensation, unemployment insurance, deferred compensation plans orretirement plans for key managers and other types of social security;

 

(viii)                        anySecurity Interest arising out of orders of attachment, distraint or similarlegal process arising in connection with court proceedings so long as theclaims secured are being contested in good faith;

 

(ix)                                anySecurity Interest over assets other than those referred to in paragraph (i)above, to the extent necessary in order to maintain, refinance or replace anyexisting Financial Indebtedness or, to the extent permitted by this Agreement, incurnew Financial Indebtedness provided that the aggregate amount of all suchFinancial Indebtedness when aggregated with the amount of the finance raisedunder Clause 21.5(b)(ii) below does not exceed a maximum aggregate amount of€200,000,000 (or its equivalent in other currencies) of which a maximum aggregateamount of €150,000,000 (or its equivalent in other currencies) may be incurredby the Obligors.

 

**21.5****                        Transactionssimilar to security**

 

(a)                                  NoObligor or Material Subsidiary shall:

 

(i)                                     sell,transfer or otherwise dispose of any of its assets (including withoutlimitation sale and lease back and sale and repurchase agreements) on termswhereby it is or may be leased to or re-acquired or acquired by a member of theGroup or any of its related entities; or

 

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

 

in circumstances wherethe transaction is entered into primarily as a method of raising finance or offinancing the acquisition of an asset.

 

(b)                                 Paragraph(a) above does not apply to:

 

(i)                                     anydisposal of receivables made in respect of Securitisation Programmes withLimited Recourse only; or

 

(ii)                                  anyother transaction provided the amount of finance raised when aggregated withthe Financial Indebtedness secured by a Security Interest pursuant to Clause21.4(b)(ix) does not exceed €200,000,000 (or its equivalent in othercurrencies) of which a maximum amount of €150,000,000 (or its equivalent inother currencies) may be incurred by the Obligors.

 

**21.6****                        Disposals**

 

(a)                                  NoObligor or Material Subsidiary shall, either in a single transaction or in aseries of transactions, whether related or not, dispose of all or any part ofits assets.

 

(b)                                 Paragraph(a) does not apply to:

 

(i)                                     disposalof stock-in-trade, business inventories, fixtures and fittings, furniture andother office equipment, made in the ordinary course of business of thedisposing entity;

 

(ii)                                  disposalof assets (other than shares) in exchange for other assets comparable orsuperior as to type, value and quality;

 

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(iii)                               disposalof assets (other than the business of the Company) or shares as part of anintra-group re-organisation from one Obligor to another Obligor on arms’-lengthterms, in each case, subject to and in accordance with Clause 21.8 (Mergers, acquisitionsand intra-group re-organisations);

 

(iv)                              disposalof assets for cash in accordance with the Asset Disposal Programme and otherdisposal of assets for cash where an amount equal to fifty per cent. (50%) ofthe net disposal proceeds of any such disposal are applied in mandatoryprepayment and cancellation of the Facilities subject to and in accordance withClause 9.3 (Mandatory Prepayment—disposals, equity and capital market issues)of this Agreement;

 

(v)                                 disposalof assets made in respect of the Securitisation Programmes with LimitedRecourse only;

 

(vi)                              disposalfor cash on a non-recourse basis of VAT credits; or

 

(vii)                           transactionswith the prior written approval of the Majority Lenders.

 

**21.7****                        Changeof business/registered office**

 

(a)                                  TheCompany shall procure that no substantial change is made to the general natureor scope of the business of the Company or the Group (taken as a whole) fromthat carried on at the date of this Agreement.

 

(b)                                 TheCompany shall not change its place of incorporation or registered head officeto one outside the European Union.

 

**21.8****                        Mergers,acquisitions and intra-group re-organisations**

 

(a)                                  NoObligor or Material Subsidiary shall enter into any amalgamation, demerger,merger, reconstruction or re-organisation otherwise than under an intra-Groupre-organisation on a solvent basis involving the transfer of assets (includinga business other than the business of the Company) and/or shares provided thatsuch intra-group re-organisation:

 

(i)                                     unlessa Permitted Reorganisation, does not involve the Company;

 

(ii)                                  doesnot affect any assets which are or are intended to be subject to SecurityInterests granted in favour of the Lenders under the Security Documents or, tothe extent that it does affect any such assets, substitute Security Interestsare granted over assets of a greater or equivalent value prior to suchintra-group re-organisation (together with legal opinions and auditorsvaluations) in each case in a form and substance satisfactory to the MajorityLenders;

 

(iii)                               doesnot or is not reasonably likely to result in a Material Adverse Effect or in aDefault;

 

(iv)                              doesnot affect any of the rights or remedies of the Lenders under the FinanceDocuments; and

 

(v)                                 whereit involves an Obligor (other than transfer of its shares) the Lenders haveprovided their prior written consent.

 

(b)                                 Saveas allowed by paragraph (c) below, no Obligor or Material Subsidiary shall andthe Company shall ensure to the fullest extent within its power or control thatno Joint Venture Entity will, acquire any assets or business or make anyinvestment in any business, shares or other securities.

 

(c)                                  Paragraph(b) above shall not prevent:

 

(i)                                     acquisitionsor investments made in the ordinary course of trade or other acquisitions orinvestments which when taken together do not have a maximum aggregateconsideration since the date of the Secured Co-ordination Agreement until 31stDecember, 2004 in excess of €10,000,000 

 

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or its equivalent in othercurrencies and thereafter a maximum aggregate consideration in excess of€20,000,000 per annum or its equivalent in other currencies;

 

(ii)                                  acquisitionsor investments made with the prior written consent of the Facility Agent(acting on the instructions of the Majority Lenders); or

 

(iii)                               capitalcontributions made to Relevant Entities or Joint Venture Entities by way ofinter-company loan or share capital provided that the aggregate amount of suchcontributions made since the date of the Secured Co-ordination Agreement lessthe aggregate amount of (A) contributions repaid directly or indirectly to theCompany; and (B) the amount of any dividend distributed directly or indirectlyto the Company with respect to that capital contribution to the extent in excessof the dividends projected to be received by the Company and Subsidiaries on afully consolidated basis by reference to the latest Business Plan does notexceed at any time €90,000,000 (or its equivalent in other currencies), takinginto account any capital contributions made under Clause 21.12(c)(i) (Lending,borrowing and guarantees).

 

**21.9****                        Capitalexpenditure**

 

No Obligor or othermember of the Group shall incur any tangible or intangible capital expenditureexcept where such capital expenditure (excluding to the extent otherwiseincluded amounts resulting solely from the re-consolidation of non-consolidatedoperating leases existing on 31st December, 2003) in aggregate does not exceed110 per cent. per annum of the aggregate amount of capital expenditure perannum set out in the latest Business Plan.

 

**21.10****                 Insurance**

 

Each Obligor and MaterialSubsidiary shall insure its business and assets with insurance companies tosuch an extent and against such risks as companies engaged in a similarbusiness normally insure.

 

**21.11****                 Maintenanceof status**

 

Each Obligor and MaterialSubsidiary shall:

 

(a)                                  doall such things as are necessary to maintain its corporate existence; and

 

(b)                                 ensurethat it has the right and is duly qualified to conduct its business as it isconducted in all applicable jurisdictions.

 

**21.12****                 Lending,borrowing and guarantees**

 

(a)                                  Subjectto paragraphs (b),(c) and (d) below, no Obligor or member of the Group shallmake any loans or provide any other form of credit (including, without limitation,vendor credit) to any person.

 

(b)                                 Paragraph(a) does not apply to Intra-Group Loans and any other form of credit providedto the Company subject to and in accordance with the Subordination Agreementwhen entered into and otherwise in accordance with its cash poolingarrangements.

 

(c)                                  Paragraph(a) does not apply to:

 

(i)                                     capitalcontributions made to Relevant Entities or Joint Venture Entities by way ofinter-company loan or share capital provided that the aggregate amount ofcontributions made by way of share capital or inter-company loan since the dateof the Secured Co-ordination Agreement less the aggregate amount of (A) suchcontributions repaid directly or indirectly to the Company; and (B) the amountof any dividend distributed directly or indirectly to the Company with respectto that capital contribution to the extent in excess of the dividends expectedto be received by reference to the latest Business Plan, does not exceed at anytime €90,000,000, taking into account 

 

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any capital contributionsmade under Clause 21.8 (Mergers, acquisitions and intra- groupre-organisations); or

 

(ii)                                  capitalcontributions made to Primester Inc. by way of capital contribution orintercompany loan for the purpose of refinancing its Existing Facility in amaximum aggregate amount equal to €115,000,000 (or its equivalent in othercurrencies).

 

(d)                                 Paragraph(a) does not apply to trade credit which does not constitute FinancialIndebtedness, which is made on customary terms and in the ordinary course ofbusiness and in respect of which the credit is repayable within 120 days.

 

(e)                                  NoObligor or member of the Group shall give any guarantee or indemnity to or forthe benefit of any person in respect of any obligation of any other person orenter into any document under which it assumes any liability of any otherperson.

 

(f)                                    Paragraph(e) does not apply to:

 

(i)                                     guaranteesor indemnities under the Existing Facilities (as refinanced from time to timeprovided that the amount outstanding is not increased);

 

(ii)                                  guaranteesor indemnities under this Agreement;

 

(iii)                               customaryvendor warranties, *garanties de passif* or indemnitiesincluding in respect of employees’ compensation, insurance, environmental lawsin respect of sale and purchase agreements permitted under this Agreement andwhich are reasonable in the context of such sale and purchase agreements;

 

(iv)                              customary*garantiesde passif* or indemnities or guarantees referred to in paragraph (d)above made in the ordinary course of business in favour of trade customers withrespect to its supply contracts and purchase agreements which do not constituteFinancial Indebtedness;

 

(v)                                 guaranteesgiven by the Company in respect of Financial Indebtedness of any of itsSubsidiaries permitted pursuant to Clause 21.13 (Financial Indebtedness); or

 

(vi)                              notwithstandingClause 21.13(h) the re-issue of the guarantee by Rhodia Brazil Ltda in respectof the factoring facility provided for the benefit of Rhodia Ster expiring inMarch 2005 in a maximum amount of US$40,000,000 in substantially the sameform as at 31st December, 2003.

 

**21.13****                 FinancialIndebtedness**

 

The Company shall not andit shall ensure that no member of the Group will and, to the fullest extentwithin its power or control, no Relevant Entity shall incur any Financial Indebtedness(including, without limitation, guarantees of joint venture entities) except:

 

(a)                                  anyFinancial Indebtedness incurred under the Finance Documents;

 

(b)                                 FinancialIndebtedness outstanding under the Existing Facilities at the date of thisAgreement;

 

(c)                                  FinancialIndebtedness owed to another member of the Group on the date of this Agreementand thereafter in accordance with its cash pooling arrangements and in the caseof an Intra-Group Loan and any other form of credit provided to the Companywhich is subordinated subject to and in accordance with the SubordinationAgreement;

 

(d)                                 refinancingof Financial Indebtedness with a Facility Agreement on terms which do not bringforward the maturity date or put or seek to put the creditor under that FacilityAgreement in a preferred position as against any Lender;

 

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(e)                                  FinancialIndebtedness incurred by the Company under any Facility Agreement on termswhich do not put the creditor under that Facility Agreement in a preferredposition against any Lender and which does not or could not be expected to havea Material Adverse Effect or result in a Default;

 

(f)                                    FinancialIndebtedness in respect of any issue of bonds, notes, debt securities orcapital markets instruments, fifty per cent. (50%) of the net proceeds of whichare applied pursuant to Clause 9.3(d) in mandatory prepayment and cancellationof the Facilities; or

 

(g)                                 FinancialIndebtedness permitted pursuant to Clauses 21.12(b) and 21.12(c) (Lending, borrowingand guarantees).

 

(h)                                 providedthat as a result there is no Material Adverse Effect, any other FinancialIndebtedness incurred after the date of this Agreement, by a Subsidiary of theCompany or a Relevant Entity, provided that at no time does the ratio expressedas a percentage of the aggregate Financial Indebtedness of the Subsidiaries ofthe Company (other than Rhodia Inc.) (excluding Intra-Group Loans) to theCompany’s unconsolidated Financial Indebtedness (excluding Intra- Group Loans)exceed 22%.

 

**21.14****                 Sharesand dividends**

 

(a)                                  TheCompany shall not:

 

(i)                                     convenea meeting of shareholders to consider a resolution to make any distribution orpay any dividend, or other payment (in cash or in kind) in respect of any ofits share capital or any management fees or charges in favour of itsshareholders’ or its shareholders’ Affiliates; or

 

(ii)                                  reduce,redeem, repurchase or retire any of its share capital,

 

except,

 

(A)                              distributionsof dividends by the Company made by way of equity securities issued by theCompany; or

 

(B)                                providedthat no Default has occurred which is continuing, any other distribution ofdividends by the Company provided that the Company’s Consolidated Net Income ispositive and such distributions do not exceed a maximum aggregate amount of€20,000,000 (or its equivalent in other currencies) and the actual payment ofsuch distribution does not occur prior to the Medium-Term Facility FinalMaturity Date.

 

(b)                                 Beforedeclaring or making any distribution permitted under paragraph (a) above, theCompany will provide a certificate signed by its chief financial officer to theFacility Agent setting out projections demonstrating compliance with eachfinancial covenant ratio under Clauses 20 (Financial Covenants) for the thennext Testing Date having taken into account such distribution.

 

(c)                                  TheCompany shall (to the fullest extent permitted by applicable law):

 

(i)                                     procurethat no Material Subsidiary enters into any arrangement or agreement which mayrestrict its ability to declare, make or pay any dividend on or in respect ofits share capital (or any class of its share capital) or restrict its abilityto distribute any dividend; and

 

(ii)                                  procurethat each Material Subsidiary will to the extent necessary and in the case ofRhodia Inc. to the fullest extent permitted to do so under the Agreed AffectedLease Facilities to ensure that the Company has funds available to it toservice its payment obligations under the Finance Documents, declare, make andpay in cash dividends in respect of its shares or reimburse intercompany loansunless doing so will prevent that Material Subsidiary from being able to meetits payment obligations which are then due and payable.

 

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**21.15****                 Repaymentsof inter-group Financial Indebtedness**

 

No Obligor or MaterialSubsidiary shall prepay or repay any amounts of Financial Indebtedness owed toits shareholders or any member of the Group except:

 

(a)                                  ifa Secured-Intra Group Loan an amount equal to that repayment is prepaid subjectto and in accordance with Clause 9.3(g); and

 

(b)                                 ifnot a Secured-Intra Group Loan:

 

(i)                                     ifmade to the Company directly or indirectly (including via Rhodia Finances andRhodia Financial Services Inc.); and

 

(ii)                                  whilstno Default is outstanding if made:

 

(A)                              inaccordance with the cash pooling arrangements existing at the date of thisAgreement; or

 

(B)                                withrespect to sales and purchases of goods and services or trade receivables inits ordinary course of business and which does not result in a Default; or

 

(C)                                otherwiseto the extent permitted in the Subordination Agreement

 

**21.16****                 Noset-off**

 

No Obligor or MaterialSubsidiary shall exercise any right of set-off or counterclaim against anyperson nor agree to or permit any set-off to occur without the prior writtenconsent of the Majority Lenders except for:

 

(a)                                  anyright of set-off or consolidation of accounts which is (i) contractual orarising as a matter of law; or (ii) pursuant to legally binding nettingarrangements in force on the date of this Agreement in each case with anyperson outside the Group; or

 

(b)                                 tothe extent expressly permitted by the Subordination Agreement.

 

**21.17****                 RightsIssue and Other Matters**

 

(a)                                  TheCompany shall:

 

(i)                                     launchthe Rights Issue by no later than 15th May, 2004; and

 

(ii)                                  implementthe Asset Disposal Programme (in accordance with the terms of the definitionthereof).

 

(b)                                 TheCompany shall notify the Facility Agent promptly upon becoming aware of:

 

(i)                                     anyfailure to obtain or maintain any authorisation, consent or other conditionnecessary for the disposal of an asset referred to in the Asset DisposalProgramme or the launch and implementation of the Rights Issue in order toenable the Asset Disposal Programme and the Rights Issue to be implemented; or

 

(ii)                                  ofany decision by it not to implement the Asset Disposal Programme or the RightsIssue.

 

**21.18****                 JointVentures**

 

No Obligor or MaterialSubsidiary will enter into or acquire any interest in any new joint venture,partnership or similar arrangement except where any such interest is heldthrough an entity incorporated with limited liability and does not result in orcould not reasonably be expected to result in a breach of any other provisionsof any Finance Document.

 

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**21.19****                 Compliancewith laws**

 

Each Obligor and MaterialSubsidiary shall comply in all material respects with all applicable laws andregulations of any governmental authority, whether domestic or foreign, havingjurisdiction over it or any of its assets, where failure to comply with anysuch laws or regulations has, or could be expected to have, in each case in thereasonable opinion of the Majority Lenders, a Material Adverse Effect.

 

**21.20****                 Compliancewith Environmental Laws and Indemnity**

 

(a)                                  EachObligor and Material Subsidiary shall:

 

(i)                                     obtainany and all Environmental Licences required for the carrying on of its businessas currently conducted; and

 

(ii)                                  complyin all material respects with (i) the terms and conditions of such EnvironmentalLicences and (ii) all other applicable Environmental Law which in each case, ifnot complied with, has, or could be expected to have, in each case in thereasonable opinion of the Majority Lenders, a Material Adverse Effect or resultin any liability for the Finance Parties in excess of €5,000,000 in aggregate.

 

(b)                                 TheCompany shall indemnify each Finance Party and their respective officers,employees, agents and delegates (together the **Indemnified Parties**) againstany cost or expense suffered or incurred by them (except if caused by their ownnegligence or wilful default) which:

 

(i)                                     arisesby virtue of any actual or alleged breach of any Environmental Law (whether byany Obligor, an Indemnified Party or any other person); or

 

(ii)                                  arisesby virtue of the release or threatened release of, or exposure to, anyDangerous Substance stored or handled upon, transported from, or otherwiseassociated with, the past or present facilities or operations of any Obligor orGroup member.

 

Each IndemnifiedParty may rely on this Clause 21.20 and enforce its terms under the Contracts(Rights of Third Parties) Act 1999.

 

**21.21****                 Arm’s-lengthterms**

 

No Obligor or MaterialSubsidiary will enter into any transaction with any person except on ordinarycommercial terms and on the basis of arm’s-length arrangements, or enter intoany transaction whereby any Obligor or Material Subsidiary might pay more thanthe ordinary commercial consideration for any purchase or acquisition or mightreceive less than full commercial consideration for its services or products.

 

**21.22****                 Access**

 

Upon the occurrence of anEvent of Default which is continuing, each Obligor and Material Subsidiary mustallow any one or more representatives of the Facility Agent and/or accountantsor other professional advisers appointed by the Facility Agent (at theCompany’s risk and expense) to have access during normal business hours to theassets, books and records of that member of the Group and to inspect the same.

 

**21.23****                 Securityand Subordination**

 

The Obligors shall andthe Company shall ensure that each relevant member of the Group will at theirown expense:

 

(a)                                  enterinto the Security Documents in accordance with the Agreed Security Principleswith the Finance Parties and other creditors under facilities which are tobenefit from the Security Documents as soon as reasonably practicable and inany event within 15 Business Days following the date on which it is notprevented from doing so under the terms of the USPP;

 

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(b)                                 provideto the Lenders prior to the date of the first Request a certificate from thechief financial officer of the Company confirming that the total net assets andEBITDA directly or indirectly subject to the Security Documents are greater or equalto 95% of the total net assets and EBITDA of the Group in each case calculatedby reference to the latest audited financial statements and thereafter on eachoccasion that an asset subject directly or indirectly to a Security Document isreplaced;

 

(c)                                  executeand do all such assurances, acts and things as the Facility Agent and theSecurity Agent when appointed may reasonably require to effect the aboveincluding perfecting or protecting the security intended to be afforded by theSecurity Documents and shall deliver to the Facility Agent and the SecurityAgent, at the same time, such directors’ and shareholders’ resolutions, titledocuments and other documents and legal opinions as set out in Part 1 ofSchedule 2 (Conditions precedent documents) and otherwise as the FacilityAgent and the Security Agent may reasonably require in relation to the same.

 

**21.24****                 ERISAReporting Requirements**

 

The following shall beprovided to the Facility Agent:

 

(a)                                  (i)promptly and in any event within 10 Business Days after any Obligor or anyERISA Affiliate knows or has reason to know that any ERISA Event has occurredthat is reasonably expected to have a Material Adverse Effect, a statement ofthe chief financial officer of the Obligor describing such ERISA Event and theaction, if any, that such Obligor or such ERISA Affiliate has taken andproposes to take with respect thereto; and

 

(ii)                                  onthe date any records, documents or other information must be furnished to thePBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy ofsuch records, documents and information;

 

(b)                                 promptlyand in any event within five Business Days after receipt thereof by any Obligoror any ERISA Affiliate, copies of each notice from the PBGC stating itsintention to terminate any Plan or to have a trustee appointed to administerany Plan;

 

(c)                                  promptlyupon request of the Facility Agent/a Finance Party, copies of eachSchedule B (Actuarial Information) to the most recent annual report (Form5500 Series) with respect to each Plan; and

 

(d)                                 promptlyand in any event within five Business Days after receipt thereof by any Obligoror any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of eachnotice concerning (i) the imposition of Withdrawal Liability by any such MultiemployerPlan that is reasonably expected to have a Material Adverse Effect, (ii) thereorganisation or termination, within the meaning of Title IV of ERISA, of anysuch Multiemployer Plan that is reasonably expected to have a Material AdverseEffect or (iii) the amount of liability incurred, or that may be incurred, bysuch Obligor or any ERISA Affiliate in connection with any event described inClause (i) or (ii).

 

**21.25****                 UnitedStates laws**

 

(a)                                  TheCompany will not, either by act or omission, become, or permit any otherObligor, to become, subject to regulation under PUHCA.

 

(b)                                 TheCompany will not, either by act or omission, become, or permit any otherObligor, to become, subject to regulation under the Federal Power Act.

 

(c)                                  TheCompany will not, either by act or omission, become, or permit any otherObligor to become, an investment company or a company controlled by aninvestment company.

 

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**21.26****                 Cashpooling / Intra-Group loan arrangements**

 

(a)                                  TheCompany shall use its best efforts to maintain its and its Subsidiaries’existing cash pooling arrangements as are currently in force at the date ofthis Agreement where failure to so maintain has or would be reasonably likelyto have a Material Adverse Effect.

 

(b)                                 TheCompany will ensure that all Secured Intra-Group Loans, and all otherIntra-Group Loans directly or indirectly subject to a Security Document and,subject to and in accordance with the Subordination Agreement, Intra-GroupLoans are documented in the relevant form of the agreed Intra-Group Loanagreement.

 

(c)                                  TheCompany will ensure that all Intra-Group Loans provided to it are subject tothe Subordination Agreement on or before incurring any such Intra- Group Loan.

 

**21.27****                 Leasing**

 

No Obligor or MaterialSubsidiary will enter into any lease or leasing arrangements (or amend theterms thereof) other than:

 

(a)                                  (i)the existing arrangements for the leasing of assets set out in Schedule 7Part 2 (Existing Indebtedness), as may be replaced with lease arrangements ifmade or amended on the same or on no less favourable terms to such Obligor orMaterial Subsidiary as the existing arrangements;

 

(ii)                                  anynew lease or leasing arrangements for other assets if made or amended oncustomary terms for such assets in the ordinary course of its business,

 

and provided thatin each case above, doing so does not and could not reasonably be expected tobe adverse to the interests of an Obligor or a Material Subsidiary or theLenders or otherwise result in a Default;

 

(b)                                 amendmentsmade to the Affected Lease Facilities in the form of the Agreed Affected LeaseFacilities.

 

**21.28****                 ExistingFacilities and Treasury Transactions**

 

(a)                                  NoObligor or Material Subsidiary shall:

 

(i)                                     makeany voluntary prepayment or cancellation of any amount outstanding or drawableunder any Existing Facility or the Refinanced Facilities prior to itsoriginally scheduled maturity date or scheduled expiry date other than theFirst Payment, Second Payment and mandatory prepayment amount under and asdetailed in the USPP in accordance with the Second Amendment Agreement or inaccordance with the Secured Co-ordination Agreement; or

 

(ii)                                  makeany amendment to the terms of any Existing Facility in any way that is or couldreasonably be expected to be adverse to its interests (including, withoutlimitation, by advancing any scheduled maturity date or other paymentobligation or any covenant or default provision more favourable to thecounterparty in respect of a Facility Agreement than those under thisAgreement, unless at the same time this Agreement is amended to substantiallythe same extent and on substantially the same terms as provided to thatcounterparty).

 

(b)                                 TheCompany and each Material Subsidiary will utilise, and draw down under, its FacilityAgreements in full and for the longest interest period permitted under any suchfacility prior to utilising and drawing down under the Agreement.

 

(c)                                  NoObligor or Material Subsidiary will enter into any Derivative Instrument or anysimilar treasury transaction save where entered into in the ordinary course ofits business for non-speculative

 

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purposes and which isconsistent with the prudent management of its business and for hedgingpurposes.

 

(d)                                 NoObligor or Material Subsidiary will terminate, close out or otherwise cancelany of its Derivative Instruments unless (i) it (acting reasonably) does so inorder to minimise or limit further losses or (ii) the underlying transactionhedged by any such swap or derivative instrument has been cancelled orterminated or (iii) at the date of termination, close out or cancellation suchswap or derivative instrument is **in the money** for it or (iv) if the Exposure(as that term is defined in the Secured Co-ordination Agreement) under thatDerivative Instrument has increased since the Term Date and the Obligor orMaterial Subsidiary is not permitted to provide a Derivative Deposit under thisAgreement with respect to that Exposure.

 

**21.29****                 MarginRegulation**

 

The Borrowers will usethe proceeds of the Utilisations only for the purpose described in Clause 3(Purpose). No Obligor will engage in the business of extending credit for thepurpose of purchasing or carrying margin stock (within the meaning ofRegulations U and X issued by the Board of Governors of the United StatesFederal Reserve System), and no portion of any Utilisation will be used,directly or indirectly, to purchase or carry margin stock or to extend creditto others for the purpose of purchasing or carrying margin stock.

 

**21.30****                 RefinancedFacilities**

 

The Company shall ensurethat each Refinanced Facility is cancelled and prepaid in full on or prior tothe date of the first Request. 

 

**22.****                               DEFAULT**

 

**22.1****                        Eventsof Default**

 

Each of the events setout in this Clause is an Event of Default (whether or not caused by any reasonwhatsoever outside the control of any Obligor or other person).

 

**22.2****                        Non-payment**

 

An Obligor does not payon the due date any amount payable by it under any Finance Document in the mannerrequired under the Finance Documents, unless the non-payment:

 

(a)                                  iscaused by technical or administrative error; and

 

(b)                                 isremedied within three Business Days of the due date.

 

**22.3****                        Breachof other obligations**

 

(a)                                  (i)The Company does not comply with any term of Clause 20 (Financial Covenants) orClause 21.17 (Rights Issue and Other Matters); or

 

(ii)                                  atany time the projections set out in the most recent Business Plan show that theCompany will not be in compliance with any term of Clause 20 (FinancialCovenants) on the then next Testing Date.

 

(b)                                 AnObligor does not comply with any of its obligations (other than as referred toin paragraph (a) above) under any Finance Document not already referred to inparagraph (a) above unless the non-compliance is capable of remedy and isremedied within fifteen calendar days of the earlier of the Facility Agentgiving notice and the Obligor becoming aware of the non-compliance.

 

**22.4****                        Misrepresentation**

 

(a)                                  Arepresentation, warranty or statement made or repeated in or in connection withany Finance Document or in any document delivered by or on behalf of anyObligor under or in 

 

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connection with anyFinance Document is incorrect in any material respect when made or deemed to bemade or repeated.

 

(b)                                 TheMajority Lenders determine that a representation, warranty or statement made orrepeated in or in connection with the Rights Issue or in any document deliveredby or on behalf of any Obligor under or in connection with the Rights Issue isincorrect in any material respect when made or deemed to be made or repeated.

 

**22.5****                        Cross-default**

 

(a)                                  Anyof the following occurs in respect of any Obligor or Material Subsidiary:

 

(i)                                     anyof its Financial Indebtedness is not paid when due after the expiry of anyapplicable grace periods; or

 

(ii)                                  anyevent of default, termination event, early repayment event or prepayment eventor circumstance howsoever described occurs under any document relating to itsFinancial Indebtedness (other than this Agreement) including, withoutlimitation, under the High Yield Bonds; or

 

(iii)                               anyof its Financial Indebtedness is (or becomes capable of being) declaredprematurely due and payable or placed on demand as a result of an event ofdefault, termination event, early repayment event or prepayment event(howsoever described) under the document relating to that FinancialIndebtedness including, without limitation, under the High Yield Bonds; or

 

(iv)                              anycommitment for, or underwriting of, any Financial Indebtedness is cancelled orsuspended as a result of an event of default, termination event, earlyrepayment event or prepayment event (howsoever described) under the documentrelating to that Financial Indebtedness; or

 

(v)                                 anySecurity Interest securing Financial Indebtedness over any of its asset(s)becomes enforceable.

 

(b)                                 Thereshall only be an Event of Default under this Clause 22.5, (i) if the aggregateamount of Financial Indebtedness which is not paid when due or after the expiryof any applicable grace period and/or to which that event of default,termination event, early repayment event or prepayment event relates and/orwhich is (or becomes capable of being) declared prematurely due and payable orplaced on demand in each case under paragraphs (a)(i), (a)(iii) or (a)(v) aboveexceeds €15,000,000 (or the equivalent in other currencies) or under paragraphs(a)(ii) or (a)(iv) above exceeds €35,000,000 (or the equivalent in othercurrencies).

 

(c)                                  Paragraphs(a)(ii) and (a)(iii) do not apply only in the case of an early prepayment eventunder the Agreed Affected Lease Facilities on the terms of the sections headed“Disposals in accordance with ADP from Rhodia Inc. assets” or “MandatoryPrepayments—ADP” of Schedule 16 Part 2 (Supplemental Lease AmendmentPrinciples).

 

**22.6****                        Insolvency**

 

Any of the followingoccurs in respect of an Obligor or a Material Subsidiary:

 

(a)                                  itis, or is deemed for the purposes of any law to be, unable to pay its debts asthey fall due or insolvent (including without limitation *en état de cessation des paiements*);

 

(b)                                 itadmits inability to pay its debts as they fall due;

 

(c)                                  itsuspends making payments on all or of its or any class of its debts orannounces an intention to do so;

 

(d)                                 amoratorium is declared in respect of any of its indebtedness;

 

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(e)                                  byreason of financial difficulties, applies for, or is subject to, an amicablesettlement or a *réglement amiable* pursuant to Article L-611-3 of the *Code deCommerce* of France, or begins negotiations with one or more of itscreditors with a view to the readjustment or rescheduling of any of itsindebtedness; or

 

(f)                                    itssituation becomes irremediably compromised or it acts otherwise within themeaning of Article L.313-12 of the *Code Monétaire et Financier*.

 

**22.7****                        Insolvencyproceedings**

 

Any of the followingoccurs in respect of an Obligor or a Material Subsidiary:

 

(a)                                  anystep (including petition, proposal or convening a meeting) is taken with a viewto a composition, assignment or arrangement with any of its creditors;

 

(b)                                 ameeting is convened for the purpose of considering any resolution for (or topetition for) its winding-up, administration or dissolution (including withoutlimitation *dissolution,liquidation* or *redressement judiciaire*) or any suchresolution is passed;

 

(c)                                  anyperson presents a petition for its winding-up or administration;

 

(d)                                 anorder for its winding-up, administration, dissolution or bankruptcy is made; or

 

(e)                                  ajudgement is issued for the judicial liquidation (*liquidation judiciaire*) orthe transfer of the whole of its business (*cession de l’entreprise*); or

 

(f)                                    anyother step (including petition, proposal or convening a meeting) is taken witha view to its rehabilitation, administration, custodianship, liquidation,winding-up or dissolution or any other insolvency proceedings involving it.

 

**22.8****                        Appointmentof receivers and managers**

 

Any of the followingoccurs in respect of an Obligor or a Material Subsidiary:

 

(a)                                  anyliquidator, trustee in bankruptcy, judicial custodian, compulsory manager,receiver, administrative receiver, administrator, *administrateur judiciaire,administrateur provisoire, mandataire ad hoc, conciliateur* or *mandataireliquidateur* or similar officer is appointed in respect of it or anyof its assets;

 

(b)                                 itsdirectors or other officers request the appointment of a liquidator, trustee inbankruptcy, judicial custodian, compulsory manager, receiver, administrativereceiver, administrator, *administrateur judiciaire, administrateur provisoire,mandataire ad hoc, conciliateur* or *mandataire liquidateur* orsimilar officer; or

 

(c)                                  anyother steps are taken to enforce any Security Interest over any part of itsassets.

 

**22.9****                        UnitedStates Bankruptcy Laws**

 

(a)                                  Inthis Clause:

 

**U.S. Bankruptcy Law**means the United States Bankruptcy Code 1978 or any other United States Federalor State bankruptcy, insolvency or similar law.

 

**U.S. Obligor** meansan Obligor incorporated or organised under the laws of the United States ofAmerica or any state of the United States of America (including the District ofColumbia).

 

Terms used in thisClause have the meanings given to them in the United States Bankruptcy Code1978, as amended, and applicable fraudulent conveyance laws in the UnitedStates of America.

 

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(b)                                 Anyof the following occurs in respect of a U.S. Obligor (on a consolidated basis):

 

(i)                                     itmakes a general assignment for the benefit of creditors;

 

(ii)                                  itcommences a voluntary case or proceeding under any U.S. Bankruptcy Law; or

 

(iii)                               aninvoluntary case under any U.S. Bankruptcy Law is commenced against it and isnot controverted within 21 days or is not dismissed or stayed within 45 daysafter commencement of the case; or

 

(iv)                              theaggregate amount of its debts (including its obligations (if any) under theFinance Documents) is greater than the aggregate value (being the lesser offair present valuation and present fair saleable value) of its assets (whichfor, avoidance of doubt, include, without limitation, all rights ofindemnification, contribution and subrogation); or

 

(v)                                 itscapital is unreasonably small to carry on its business as it is beingconducted; or

 

(vi)                              itincurs debts beyond its ability to pay as they mature on the date on which thedebts were incurred; or

 

(vii)                           it hasmade a transfer or incurred an obligation under a Finance Document with theintent to hinder, delay or defraud any of its present or future creditors.

 

**22.10****                 Creditors’process**

 

Any attachment, sequestration,distress execution or analogous event or circumstance affects any materialasset(s) of an Obligor or a Material Subsidiary and which in the reasonableopinion of the Majority Lenders has or could be expected to have a MaterialAdverse Effect.

 

**22.11****                 Analogousproceedings**

 

There occurs, in relationto an Obligor or a Material Subsidiary, any event or circumstance anywherewhich, in the opinion of the relevant Lender or the Majority Lenders (acting ingood faith), appears to correspond with any of those mentioned in Clauses 22.6(Insolvency) to 22.10 (Creditors’ process) (inclusive).

 

**22.12****                 Cessationof business**

 

Any Obligor or a MaterialSubsidiary ceases, or threatens to cease, to carry on all or a substantial partof its business except in respect of the Asset Disposal Programme.

 

**22.13****                 Effectivenessof Finance Documents**

 

(a)                                  Itis or becomes unlawful for an Obligor or any other person (other than a FinanceParty) to perform any of its obligations under the Finance Documents.

 

(b)                                 AnyFinance Document is not effective or is alleged by an Obligor to be ineffectivefor any reason.

 

(c)                                  AnObligor repudiates a Finance Document or evidences an intention to repudiate aFinance Document.

 

(d)                                 ASecurity Document does not create the security it purports to create in anyrespect considered by the Majority Lenders to be materially adverse to theinterests of the Finance Parties under the Finance Documents.

 

(e)                                  Aguarantee of any Obligor is invalid or unenforceable in any respect consideredby the Majority Lenders to be materially adverse to the interests of theFinance Parties under the Finance Documents.

 

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(f)                                    Thesubordination provisions under the Subordination Agreement or the ranking ofsecurity under the Security Documents is not effective.

 

(g)                                 TheRights Issue is not completed by the Term Date or the Company repudiates,declares or states in writing that it cannot or does not intend to, or itbecomes unlawful for the Company to, complete the Rights Issue by the TermDate.

 

(h)                                 TheAsset Disposal Programme is not implemented in accordance with the terms of thedefinition thereof or the Company repudiates, declares or states in writingthat it cannot or does not intend to, or it becomes unlawful for the Companyto, initiate or implement the Asset Disposal Programme in accordance with theterms of the definition thereof.

 

**22.14****                 Auditqualification**

 

An Obligor’s auditorsqualify their report on any audited consolidated accounts of the relevantObligor in any manner whatsoever (except where such qualification is of a minortechnical or non-material nature) and (except in the case of the Company) wherethat qualification is material in the context of the Group (taken as a whole).

 

**22.15****                 Sharesand Dividends**

 

A meeting of shareholdersof the Company is convened at which a resolution is passed to pay any dividend,or other distribution (in cash or in kind) in respect of its share capital orany management fees or charges in favour of its shareholders or its shareholders’Affiliates unless any such distribution is expressly permitted under Clause21.14 (Shares and dividends).

 

**22.16****                 ERISA**

 

(a)                                  AnyPlan fails to satisfy the minimum funding standards of ERISA or the Code forany plan year or part thereof or a waiver of such standards or extension of anyamortisation period is sought or granted under section 412 of the Code; or

 

(b)                                 anotice of intent to terminate any Plan is, or is reasonably expected to be,filed with the PBGC or the PBGC institutes proceedings under ERISAsection 4042 to terminate or appoint a trustee to administer any Plan orthe PBGC notifies the Company or any ERISA Affiliate that a Plan may become asubject of any such proceedings; or

 

(c)                                  theaggregate accumulated benefit obligations (as defined in Statement of FinancialAccounting Standards 87) under all Plans exceeds the fair market value of allassets of such Plans allocable to such benefits by more than US$50,000,000, alldetermined as of the date of the most recent financial statements for such Plans;or

 

(d)                                 theCompany or any ERISA Affiliate incurs or is reasonably expected to incur anyliability pursuant to Title I or IV of ERISA or the penalty or excise taxprovisions of the Code relating to employee benefit plans; or

 

(e)                                  theCompany or any ERISA Affiliate withdraws from any Multiemployer Plan; or

 

(f)                                    anymember of the Group establishes or amends any employee welfare benefit planthat provides post-employment welfare benefits in a manner that would increasethe liability of any member of the Group thereunder,

 

and such events(whether individually or taken together) could reasonably be expected to have aMaterial Adverse Effect.

 

**22.17****                 Litigation**

 

Any litigation,arbitration or administrative proceeding or claim is threatened, pending,commenced or ongoing against any Obligor, any Material Subsidiary or any of theassets of the Group 

 

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which in the opinion ofthe Majority Lenders has or could reasonably be expected to have by itself ortogether with any other such proceedings or claims to have a Material AdverseEffect.

 

**22.18****                 Materialadverse change**

 

Any event or circumstanceoccurs after the date of this Agreement, which, in the opinion of the MajorityLenders (acting in good faith) has, or could reasonably be expected to have, aMaterial Adverse Effect.

 

**22.19****                 Acceleration**

 

(a)                                  Subjectto paragraph (b) below, on and at any time after the occurrence of an Event ofDefault the Facility Agent may, and shall if so directed by the Majority Lenders,by notice to the Company:

 

(i)                                     cancelthe Total Commitments; and/or

 

(ii)                                  demandthat all or part of the Loans and all other amounts outstanding under theFinance Documents, together with accrued interest and all other amounts accruedunder the Finance Documents be immediately due and payable, whereupon theyshall become immediately due and payable; and/or

 

(iii)                               demandthat all or part of the Loans and all other amounts outstanding under theFinance Documents be payable on demand, whereupon they shall immediately becomepayable on demand by the Facility Agent acting on the instructions of theMajority Lenders; and/or

 

(iv)                              declarethat full cash cover in respect of each Guarantee is immediately provided anddue and payable.

 

(b)                                 Onand at any time after the occurrence of an Event of Default in respect ofinsolvency proceedings or bankruptcy in respect of Rhodia Inc., the FacilityAgent shall, if so directed by the Tranche B Majority Lenders, by notice to theCompany, carry out the actions in paragraphs (a)(i) to (iv) above only and ineach case in respect of the Commitments or Utilisations under Tranche B. 

 

**23.****                               THE ADMINISTRATIVE PARTIES**

 

**23.1****                        Appointmentand duties of the Facility Agent**

 

(a)                                  EachFinance Party (other than the Facility Agent) irrevocably appoints the FacilityAgent to act as its agent under the Finance Documents.

 

(b)                                 EachFinance Party irrevocably authorises the Facility Agent to:

 

(i)                                     performthe duties and to exercise the rights, powers and discretions that arespecifically given to it under the Finance Documents, together with any otherincidental rights, powers and discretions; and

 

(ii)                                  executeeach Finance Document expressed to be executed by the Facility Agent.

 

(c)                                  TheFacility Agent has only those duties which are expressly specified in theFinance Documents. Those duties are solely of a mechanical and administrativenature.

 

**23.2****                        Roleof the Arrangers**

 

No Arranger has anyobligations of any kind to any other Party in connection with any FinanceDocument.

 

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**23.3****                        Nofiduciary duties**

 

Nothing in the FinanceDocuments makes an Administrative Party a trustee or fiduciary for any otherParty or any other person. No Administrative Party need hold in trust anymoneys paid to it for a Party or be liable to account for interest on thosemoneys.

 

**23.4****                        Individualposition of an Administrative Party**

 

(a)                                  Ifit is also a Lender, each Administrative Party has the same rights and powersunder the Finance Documents as any other Lender and may exercise those rightsand powers as though it were not an Administrative Party.

 

(b)                                 EachAdministrative Party may:

 

(i)                                     carryon any business with any Obligor or its related entities (including acting asan agent or a trustee for any other financing); and

 

(ii)                                  retainany profits or remuneration it receives under the Finance Documents or inrelation to any other business it carries on with any Obligor or its relatedentities.

 

**23.5****                        Reliance**

 

The Facility Agent may:

 

(a)                                  relyon any notice or document believed by it to be genuine and correct and to havebeen signed by, or with the authority of, the proper person;

 

(b)                                 relyon any statement made by any person regarding any matters which may reasonablybe assumed to be within his knowledge or within his power to verify;

 

(c)                                  engage,pay for and rely on professional advisers selected by it (including thoserepresenting a Party other than the Facility Agent); and

 

(d)                                 actunder the Finance Documents through its personnel and agents.

 

**23.6****                        MajorityLenders’ instructions**

 

(a)                                  TheFacility Agent is fully protected if it acts on the instructions of theMajority Lenders in the exercise of any right, power or discretion or anymatter not expressly provided for in the Finance Documents. Any suchinstructions given by the Majority Lenders will be binding on all the Lenders.In the absence of instructions, the Facility Agent may act as it considers tobe in the best interests of all the Lenders.

 

(b)                                 TheFacility Agent may assume that unless it has received notice to the contrary,any right, power, authority or discretion vested in any Party or the MajorityLenders has not been exercised.

 

(c)                                  TheFacility Agent is not authorised to act on behalf of a Lender (without firstobtaining that Lender’s consent) in any legal or arbitration proceedings inconnection with any Finance Document.

 

(d)                                 TheFacility Agent may require the receipt of security satisfactory to it, whetherby way of payment in advance or otherwise, against any liability or loss whichit may incur in complying with the instructions of the Majority Lenders.

 

**23.7****                        Responsibility**

 

(a)                                  NoAdministrative Party is responsible to any other Finance Party for theadequacy, accuracy or completeness of:

 

(i)                                     anyFinance Document or any other document; or

 

(ii)                                  anystatement or information (whether written or oral) made in or supplied inconnection with any Finance Document.

 

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(b)                                 Withoutaffecting the responsibility of any Obligor for information supplied by it oron its behalf in connection with any Finance Document, each Lender confirmsthat it:

 

(i)                                     hasmade, and will continue to make, its own independent appraisal of all risksarising under or in connection with the Finance Documents (including thefinancial condition and affairs of each Obligor and its related entities andthe nature and extent of any recourse against any Party or its assets); and

 

(ii)                                  hasnot relied exclusively on any information provided to it by any Finance Partyin connection with any Finance Document.

 

(c)                                  Inconnection with this Agreement and the matters the subject hereof or referredto herein no Lender has relied upon information or advice provided by anymember of the Co-ordinating Committee and to the extent it has any relationshipwith that party in its capacity as a member of the Co-ordinating Committee,none of the members of the Co-ordinating Committee shall be liable to anysignatory for any action taken or omitted to be taken or for the exercise ofany discretion by it in connection with any matter contemplated hereby andshall not be responsible for the efficiency, validity, enforceability orsufficiency of this Agreement or any matter the subject hereof or referred toin this Agreement.

 

**23.8****                        Exclusionof liability**

 

(a)                                  TheFacility Agent is not liable or responsible to any other Finance Party for anyaction taken or not taken by it in connection with any Finance Document, unlessdirectly caused by its gross negligence or wilful misconduct.

 

(b)                                 NoParty (other than the Facility Agent) may take any proceedings against anyofficer, employee or agent of the Facility Agent in respect of any claim itmight have against the Facility Agent or in respect of any act or omission ofany kind by that officer, employee or agent in connection with any FinanceDocument. Any officer, employee or agent of the Facility Agent may rely on thisClause and enforce its terms under the Contracts (Rights of Third Parties) Act1999.

 

**23.9****                        Default**

 

(a)                                  TheFacility Agent is not obliged to monitor or enquire whether a Default hasoccurred. The Facility Agent is not deemed to have knowledge of the occurrenceof a Default.

 

(b)                                 Ifthe Facility Agent:

 

(i)                                     receivesnotice from a Party referring to this Agreement, describing a Default andstating that the event is a Default; or

 

(ii)                                  isaware of the non-payment of any principal or interest or any fee payable to aLender under this Agreement,

 

it must promptly notifythe Lenders.

 

**23.10****                 Information**

 

(a)                                  TheFacility Agent must promptly forward to the person concerned the original or acopy of any document which is delivered to the Facility Agent by a Party forthat person.

 

(b)                                 Exceptwhere a Finance Document specifically provides otherwise, the Facility Agent isnot obliged to review or check the adequacy, accuracy or completeness of anydocument it forwards to another Party.

 

(c)                                  TheFacility Agent will provide copies of the condition precedent documentation toa Lender if a Lender so requests.

 

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(d)                                 Exceptas provided above, the Facility Agent has no duty:

 

(i)                                     eitherinitially or on a continuing basis to provide any Lender with any credit orother information concerning the risks arising under or in connection with theFinance Documents (including any information relating to the financialcondition or affairs of any Obligor or its related entities or the nature orextent of recourse against any Party or its assets) whether coming into itspossession before, on or after the date of this Agreement; or

 

(ii)                                  unlessspecifically requested to do so by a Lender in accordance with a FinanceDocument, to request any certificate or other document from any Obligor.

 

(e)                                  Inacting as the Facility Agent, the agency division of the Facility Agent istreated as a separate entity from its other divisions and departments. Anyinformation acquired by the Facility Agent which, in its opinion, is acquiredby it otherwise than in its capacity as the Facility Agent may be treated asconfidential by the Facility Agent and will not be treated as informationpossessed by the Facility Agent in its capacity as such.

 

(f)                                    TheFacility Agent is not obliged to disclose to any person any confidentialinformation supplied to it by or on behalf of a member of the Group solely forthe purpose of evaluating whether any waiver or amendment is required inrespect of any term of the Finance Documents.

 

(g)                                 EachObligor irrevocably authorises the Facility Agent to disclose to the otherFinance Parties any information which, in its opinion, is received by it in itscapacity as the Facility Agent.

 

**23.11****                 Indemnities**

 

(a)                                  Withoutlimiting the liability of any Obligor under the Finance Documents, each Lendermust indemnify the Facility Agent for that Lender’s Pro Rata Share of any lossor liability incurred by the Facility Agent in acting as the Facility Agent,except to the extent that the loss or liability is caused by the FacilityAgent’s gross negligence or wilful misconduct.

 

(b)                                 TheFacility Agent may deduct from any amount received by it for a Lender anyamount due to the Facility Agent from that Lender under a Finance Document butunpaid.

 

**23.12****                 Compliance**

 

Each Administrative Partymay refrain from doing anything (including disclosing any information) whichmight, in its opinion, constitute a breach of any law or regulation or beotherwise actionable at the suit of any person, and may do anything which, inits opinion, is necessary or desirable to comply with any law or regulation.

 

**23.13****                 Resignationof the Facility Agent**

 

(a)                                  TheFacility Agent may resign and appoint any of its Affiliates as successorFacility Agent by giving notice to the Lenders and the Company.

 

(b)                                 Alternatively,the Facility Agent may resign by giving notice to the Lenders and the Company,in which case the Majority Lenders may appoint a successor Facility Agent.

 

(c)                                  Ifno successor Facility Agent has been appointed under paragraph (b) above within30 days after notice of resignation was given, the Facility Agent may appoint asuccessor Facility Agent.

 

(d)                                 Theperson(s) appointing a successor Facility Agent must, if practicable, consultwith the Company prior to the appointment.

 

(e)                                  Theresignation of the Facility Agent and the appointment of any successor FacilityAgent will both become effective only when the successor Facility Agentnotifies all the Parties that it accepts its appointment. On giving thenotification, the successor Facility Agent will succeed to the position of theFacility Agent and the term **Facility Agent** will mean the successorFacility Agent.

 

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(f)                                    Theretiring Facility Agent must, at its own cost, make available to the successorFacility Agent such documents and records and provide such assistance as thesuccessor Facility Agent may reasonably request for the purposes of performingits functions as the Facility Agent under the Finance Documents.

 

(g)                                 Uponits resignation becoming effective, this Clause will continue to benefit theretiring Facility Agent in respect of any action taken or not taken by it inconnection with the Finance Documents while it was the Facility Agent, and,subject to paragraph (f) above, it will have no further obligations under anyFinance Document.

 

(h)                                 TheMajority Lenders may, by notice to the Facility Agent, require it to resignunder paragraph (b) above.

 

**23.14****                 Relationshipwith Lenders**

 

(a)                                  TheFacility Agent may treat each Lender as a Lender, entitled to payments underthis Agreement and as acting through its Facility Office(s) until it hasreceived not less than five Business Days’ prior notice from that Lender to thecontrary.

 

(b)                                 TheFacility Agent may at any time, and must if requested to do so by the MajorityLenders, convene a meeting of the Lenders.

 

(c)                                  TheFacility Agent must keep a register of all the Parties and supply any other Partywith a copy of the register on request. The register will include each Lender’sFacility Office(s) and contact details for the purposes of this Agreement.

 

**23.15****                 FacilityAgent’s management time**

 

If the Facility Agentrequires, any amount payable to the Facility Agent by any Party under anyindemnity or in respect of any costs or expenses incurred by the Facility Agentunder the Finance Documents after the date of this Agreement may include thecost of using its management time or other resources and will be calculated onthe basis of such reasonable daily or hourly rates as the Facility Agent maynotify to the relevant Party. This is in addition to any amount in respect offees or expenses paid or payable to the Facility Agent under any other term ofthe Finance Documents.

 

**23.16****                 Noticeperiod**

 

Where this Agreementspecifies a minimum period of notice to be given to the Facility Agent, theFacility Agent may, at its discretion, accept a shorter notice period.

 

**23.17****                 Resignationof the Issuing Banks**

 

(a)                                  AnIssuing Bank may resign by giving notice to the Lenders and the Company and bynominating a Lender as a successor Issuing Bank, in which case the successorIssuing Bank will be appointed with the prior written agreement of the FacilityAgent, the Majority Lenders and the Company.

 

(b)                                 Theresignation of an Issuing Bank and the appointment of any successor IssuingBank will be made in accordance with Clause 6.16(g) and will become effectiveonly when the successor Issuing Bank notifies all the Parties that it acceptsits appointment and when the prior written agreement of the Facility Agent, theMajority Lenders and the Company has been obtained. On giving the notificationand on receiving the written agreement of the Facility Agent, the MajorityLenders and the Company, the successor Issuing Bank will succeed to theposition of the Issuing Bank and the term **Issuing Bank** will mean the successorIssuing Bank.

 

(c)                                  Theretiring Issuing Bank must, at its own cost, make available to the successorIssuing Bank such documents and records and provide such assistance as thesuccessor Issuing Bank may reasonably request for the purposes of performingits functions as an Issuing Bank under the Finance Documents.

 

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(d)                                 Uponits resignation becoming effective, this Clause will continue to benefit theretiring Issuing Bank in respect of any action taken or not taken by it inconnection with the Finance Documents while it was an Issuing Bank, and,subject to paragraph (c) above, it will have no further obligations under anyFinance Document.

 

(e)                                  Theresignation of an Issuing Bank will only be effective in respect of outstandingGuarantees on the date on which any such Guarantees are repaid or prepaid.

 

(f)                                    TheMajority Lenders may, by notice to an Issuing Bank, require it to resign underparagraph (a) above. 

 

**24.****                               EVIDENCE AND CALCULATIONS**

 

**24.1****                        Accounts**

 

Accounts maintained by aFinance Party in connection with this Agreement are prima facie evidence of thematters to which they relate for the purpose of any litigation or arbitrationproceedings.

 

**24.2****                        Certificatesand determinations**

 

Any certification ordetermination by a Finance Party of a rate or amount under the FinanceDocuments will be, in the absence of manifest error, conclusive evidence of thematters to which it relates.

 

**24.3****                        Calculations**

 

Any interest or feeaccruing under this Agreement accrues from day to day and is calculated on thebasis of the actual number of days elapsed and a year of 360 or 365 days or otherwise,depending on what the Facility Agent determines is market practice. 

 

**25.****                               FEES**

 

**25.1****                        FacilityAgent’s and Security Agent’s fees**

 

The Company must pay toeach of the Facility Agent and the Security Agent for their own account anagency fee in the manner agreed in the Fee Letter between each of the FacilityAgent and the Security Agent and the Company.

 

**25.2****                        Commitmentfee**

 

(a)                                  TheCompany must pay a commitment fee computed at the rate of 1.3725 per cent. perannum on the undrawn, uncancelled amount of each Lender’s Commitment.

 

(b)                                 Accruedcommitment fee is payable quarterly in arrear from the Term Date. Accruedcommitment fee is also payable to the Facility Agent for a Lender on the dateits Commitment is cancelled in full.

 

**25.3****                        Participationfee**

 

The Company must pay tothe Lenders a participation fee in the amount set out in the Fee Letter on thefirst Drawdown Date.

 

**25.4****                        IssuingBank fee**

 

The Company shall pay tothe Facility Agent an issuing bank fee in respect of the Guarantee Facility forthe account of the relevant Issuing Bank in the amount agreed in the FeeLetter. Accrued issuing bank fee is payable quarterly in arrear. 

 

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**26.****                               INDEMNITIES AND BREAK COSTS**

 

**26.1****                        Currencyindemnity**

 

(a)                                  TheCompany must, as an independent obligation, indemnify each Finance Partyagainst any loss or liability which that Finance Party incurs as a consequenceof:

 

(i)                                     thatFinance Party receiving an amount in respect of an Obligor’s liability underthe Finance Documents; or

 

(ii)                                  thatliability being converted into a claim, proof, judgement or order,

 

in a currency other thanthe currency in which the amount is expressed to be payable under the relevantFinance Document.

 

(b)                                 Unlessotherwise required by law, each Obligor waives any right it may have in anyjurisdiction to pay any amount under the Finance Documents in a currency otherthan that in which it is expressed to be payable.

 

**26.2****                        Otherindemnities**

 

(a)                                  TheCompany must indemnify each Finance Party against any loss or liability whichthat Finance Party incurs as a consequence of:

 

(i)                                     theoccurrence of any Default;

 

(ii)                                  anyfailure by an Obligor to pay any amount due under a Finance Document on its duedate, including any resulting from any distribution or redistribution of anyamount among the Lenders under this Agreement or under the SubordinationAgreement;

 

(iii)                               (otherthan by reason of negligence or default by that Finance Party) a Utilisationnot being made after a Request has been delivered for that Utilisation; or

 

(iv)                              aUtilisation (or part of a Utilisation) not being prepaid in accordance with anotice of prepayment.

 

The Company’s liabilityin each case includes any loss or expense on account of funds borrowed,contracted for or utilised to fund any amount payable under any FinanceDocument, any amount repaid or prepaid or any Utilisation.

 

(b)                                 TheCompany must indemnify the Facility Agent against any loss or liabilityincurred by the Facility Agent as a result of:

 

(i)                                     investigatingany event which the Facility Agent reasonably believes to be a Default; or

 

(ii)                                  actingor relying on any notice which the Facility Agent reasonably believes to begenuine, correct and appropriately authorised.

 

**26.3****                        BreakCosts**

 

(a)                                  EachBorrower must pay to each Lender its Break Costs.

 

(b)                                 BreakCosts are the amount (if any) determined by the relevant Lender by which:

 

(i)                                     theinterest which that Lender would have received for the period from the date ofreceipt of any part of its share in a Loan or an overdue amount to the last dayof the applicable Term for that Loan or overdue amount if the principal oroverdue amount received had been paid on the last day of that Term;

 

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exceeds

 

(ii)                                  theamount which that Lender would be able to obtain by placing an amount equal tothe amount received by it on deposit with a leading bank in the appropriateinterbank market for a period starting on the Business Day following receiptand ending on the last day of the applicable Term.

 

(c)                                  EachLender must supply to the Facility Agent for the relevant Borrower details ofthe amount of any Break Costs claimed by it under this Clause. 

 

**27.****                               EXPENSES**

 

**27.1****                        Initialcosts**

 

The Company must pay toeach Administrative Party the amount of all costs and expenses (including legalfees) incurred by it in connection with the negotiation, preparation, printing,execution and perfection of the Finance Documents.

 

**27.2****                        Subsequentcosts**

 

(a)                                  TheCompany shall forthwith on demand pay to the Facility Agent the amount of allcosts and expenses (including legal fees) properly incurred by it in connectionwith:

 

(i)                                     thenegotiation, preparation, printing, syndication and execution of:

 

(A)                              thisAgreement and any other document referred to in this Agreement; and

 

(B)                                anyFinance Document (other than a Transfer Certificate) executed after the date ofthis Agreement; and

 

(ii)                                  anyamendment, waiver, consent or suspension of rights (or any proposal for theforegoing) requested by or on behalf of an Obligor and relating to a FinanceDocument or a document referred to in any Finance Document.

 

(b)                                 TheCompany shall forthwith on demand pay to each Issuing Bank the amount of allcosts and expenses (including legal fees) incurred by it in connection with itscompliance procedures carried out prior to issuing a Guarantee.

 

**27.3****                        Enforcementcosts**

 

The Company shallforthwith on demand pay to each Finance Party the amount of all costs andexpenses (including legal fees) incurred in connection with the enforcement of,or the preservation of any rights under, any Finance Document. 

 

**28.****                               AMENDMENTS AND WAIVERS**

 

**28.1****                        Procedure**

 

(a)                                  Exceptas provided in this Clause, any term of the Finance Documents may be amended orwaived with the agreement of the Company and the Majority Lenders. The FacilityAgent may effect, on behalf of any Finance Party, an amendment or waiverallowed under this Clause.

 

(b)                                 TheFacility Agent must promptly notify the other Parties of any amendment orwaiver effected by it under paragraph (a) above. Any such amendment or waiveris binding on all the Parties.

 

**28.2****                        Exceptions**

 

(a)                                  Anamendment or waiver which relates to:

 

(i)                                     thedefinition of **Majority Lenders** in Clause 1.1 (Definitions);

 

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(ii)                                  anextension of the date of payment of any amount to a Lender under the FinanceDocuments;

 

(iii)                               areduction in the Margin or a reduction in the amount of any payment ofprincipal, interest, fee or other amount payable to a Lender under the FinanceDocuments;

 

(iv)                              anincrease in, or an extension of, a Commitment or the Total Commitments;

 

(v)                                 arelease of an Obligor;

 

(vi)                              aterm of a Finance Document which expressly requires the consent of each Lender;

 

(vii)                           theright of a Lender to assign or transfer its rights or obligations under theFinance Documents;

 

(viii)                        relates toClause 9 (Prepayment and Cancellation) other than Clauses 9.3 (MandatoryPrepayment—disposals, equity and capital market issues) and 9.4 (MandatoryPrepayment—application of proceeds);

 

(ix)                                relatesto a Security Document or any of the Agreed Security Principles including anywaiver of any condition precedent under Schedule 2 (Conditions precedentdocuments) in respect of the Security Documents, the Intercreditor and SharingDeed and the Subordination Agreement;

 

(x)                                   theability of a Borrower to make Utilisations under a Tranche or Facility otherthan a Tranche or Facility permitted on the date of this Agreement or, iflater, the date of its accession to this Agreement as a Borrower; or

 

(xi)                                thisClause,

 

may only be made with theconsent of all the Lenders.

 

(b)                                 Anamendment or waiver which relates to the rights or obligations of anAdministrative Party may only be made with the consent of that AdministrativeParty.

 

(c)                                  Anamendment or waiver which relates to Tranche B under Clauses 2.2 (Division ofthe Medium-Term Facility), 5.1(d), 5.3(d), 6.1(d), 9.4(b) (to the extent itwould alter the amount to be applied or the order of application in respect ofTranche B), 22.19(b) (Acceleration) and 32.1(b) (Pro Rata Sharing), may only bemade with the consent of the Tranche B Majority Lenders.

 

**28.3****                        Changeof currency**

 

If a change in anycurrency of a country occurs (including where there is more than one currencyor currency unit recognised at the same time as the lawful currency of acountry), the Finance Documents will be amended to the extent the FacilityAgent (acting reasonably and after consultation with the Company) determines isnecessary to reflect the change.

 

**28.4****                        Waiversand remedies cumulative**

 

The rights of eachFinance Party under the Finance Documents:

 

(a)                                  maybe exercised as often as necessary;

 

(b)                                 arecumulative and not exclusive of its rights under the general law; and

 

(c)                                  maybe waived only in writing and specifically.

 

Delay in exercising ornon-exercise of any right is not a waiver of that right. 

 

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**29.****                               CHANGES TO THE PARTIES**

 

**29.1****                        Assignmentsand transfers by Obligors**

 

No Obligor may assign,transfer, novate or dispose of any of or any interest in, its rights and/orobligations under the Finance Documents.

 

**29.2****                        Assignmentsand transfers by Lenders**

 

(a)                                  ALender (the **Existing Lender**) may, subject to the following provisions ofthis Clause, at any time assign or transfer (including by way of novation) anyof its rights and obligations under this Agreement to any other bank orfinancial institution (the **New Lender**).

 

(b)                                 Theprior written consent of the Company is required for any assignment or transferunless the New Lender is another Original Lender or an Affiliate of an OriginalLender or if an Event of Default has occurred and is outstanding under any ofClause 22.2 (Non-payment) or Clauses 22.6 (Insolvency) to 22.11 (Analogousproceedings) inclusive. However, the prior consent of the Company must not beunreasonably withheld or delayed and will be deemed to have been given if,within 10 Business Days of receipt by the Company of an application forconsent, it has not been expressly refused.

 

(c)                                  Theprior written consent of the relevant Issuing Bank is required for anyassignment or transfer by a Medium-Term Facility Lender unless the New Lenderhas a credit rating from Standard and Poor’s of BBB+ or higher or an equivalentrating from Moody’s.

 

(d)                                 Anassignment of rights will only be effective if the New Lender confirms to theFacility Agent and the Company in form and substance satisfactory to theFacility Agent that it is bound by obligations to the other Finance Partiesunder this Agreement equivalent to those it would have been under if it were anOriginal Lender.

 

(e)                                  Atransfer of obligations will be effective only if either:

 

(i)                                     therights are assigned, the corresponding obligations released and equivalentobligations assumed in accordance with the following provisions of this Clause;or

 

(ii)                                  theobligations are novated in accordance with the following provisions of thisClause.

 

(f)                                    Unlessthe Facility Agent otherwise agrees, the New Lender must pay to the FacilityAgent for its own account, on or before the date any assignment or transferoccurs, a fee of €1,500.

 

(g)                                 Anyreference in this Agreement to a Lender includes a New Lender but excludes aLender if no amount is or may be owed to or by it under this Agreement.

 

(h)                                 Inthe case of an assignment, the Existing Lender and the New Lender shall ensurethat the assignment is notified by bailiff (*huissier*) to the Company in accordancewith Article 1690 of the French Civil Code.

 

(i)                                     ALender may only transfer its rights and obligations in its capacity as IssuingBank if it complies with Clause 23.17 (Resignation of the Issuing Banks).

 

**29.3****                        TransferCertificates**

 

(a)                                  Inthis Clause:

 

**Transfer Date**means, for a Transfer Certificate, the later of:

 

(i)                                     theproposed Transfer Date specified in that Transfer Certificate;

 

(ii)                                  thedate on which the Facility Agent executes that Transfer Certificate; and

 

(iii)                               areference to an assignment includes any related release and assumption.

 

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(b)                                 Anassignment or novation is effected if:

 

(i)                                     theExisting Lender and the New Lender deliver to the Facility Agent a dulycompleted Transfer Certificate; and

 

(ii)                                  theFacility Agent executes it.

 

The Facility Agent mustexecute as soon as reasonably practicable a Transfer Certificate delivered toit and which appears on its face to be in order.

 

(c)                                  EachParty (other than the Existing Lender and the New Lender) irrevocablyauthorises the Facility Agent to execute any duly completed TransferCertificate on its behalf.

 

(d)                                 Fora transfer by assignment on the Transfer Date:

 

(i)                                     theExisting Lender will assign absolutely to the New Lender the Existing Lender’srights expressed to be the subject of the assignment in the TransferCertificate;

 

(ii)                                  theExisting Lender will be released from the obligations expressed to be thesubject of the release in the Transfer Certificate; and

 

(iii)                               theNew Lender will become a Lender under this Agreement and will be bound byobligations equivalent to those from which the Existing Lender is releasedunder sub-paragraph (ii) above.

 

(e)                                  Fora transfer by novation on the Transfer Date:

 

(i)                                     theNew Lender will assume the rights and obligations of the Existing Lenderexpressed to be the subject of the novation in the Transfer Certificate insubstitution for the Existing Lender;

 

(ii)                                  theExisting Lender will be released from those obligations and cease to have thoserights; and

 

(iii)                               theNew Lender will become a Lender under this Agreement and be bound by the termsof this Agreement as a Lender.

 

(f)                                    Subjectto the terms of this Agreement, the obligations of each Guarantor under thisAgreement will continue in full force and effect following any novation underthis Clause. A novation under this Clause is a novation (*novation*) within the meaningof Article 1271 *et seq.* of the French Civil Code.

 

(g)                                 TheSecurity Interests created pursuant to the Security Documents are expresslyreserved by the Existing Lender including without limitation in respect ofArticle 1278 *et seq.* of the French Civil Code and Article 1278 of theBelgian Civil Code and such Security Interests shall benefit the New Lenderwith the same ranking as that benefiting the Existing Lender prior to thenovation.

 

(h)                                 Forthe purposes of Article 1528 of the Spanish Civil Code, each Party agreesthat upon transfer of the rights and obligations of an Existing Lender underthis Clause, the Security Interest created under Spanish law shall be preservedfor the benefit of the New Lender.

 

**29.4****                        Limitationof responsibility of Existing Lender**

 

(a)                                  Unlessexpressly agreed to the contrary, an Existing Lender is not responsible to aNew Lender for the legality, validity, adequacy, accuracy, completeness orperformance of:

 

(i)                                     anyFinance Document or any other document; or

 

(ii)                                  anystatement or information (whether written or oral) made in or supplied inconnection with any Finance Document,

 

and any representationsor warranties implied by law are excluded.

 

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(b)                                 EachNew Lender confirms to the Existing Lender and the other Finance Parties thatit:

 

(i)                                     hasmade, and will continue to make, its own independent appraisal of all risksarising under or in connection with the Finance Documents (including thefinancial condition and affairs of each Obligor and its related entities andthe nature and extent of any recourse against any Party or its assets) inconnection with its participation in this Agreement; and

 

(ii)                                  hasnot relied exclusively on any information supplied to it by the Existing Lenderin connection with any Finance Document.

 

(c)                                  Nothingin any Finance Document requires an Existing Lender to:

 

(i)                                     accepta re-transfer from a New Lender of any of the rights and obligations assignedor transferred under this Clause; or

 

(ii)                                  supportany losses incurred by the New Lender by reason of the non-performance by anyObligor of its obligations under any Finance Document or otherwise.

 

**29.5****                        Costsresulting from change of Lender or Facility Office**

 

If:

 

(a)                                  aLender assigns or transfers any of its rights and obligations under the FinanceDocuments or changes its Facility Office; and

 

(b)                                 asa result of circumstances existing at the date the assignment, transfer orchange occurs, an Obligor would be obliged to pay a Tax Payment or an IncreasedCost,

 

then, unless the assignment,transfer or change is made by a Lender to mitigate any circumstance giving riseto the Tax Payment, Increased Cost or a right to be prepaid and/or cancelled byreason of illegality, the Obligor need only pay that Tax Payment or IncreasedCost to the same extent that it would have been obliged to if no assignment,transfer or change had occurred.

 

**29.6****                        AdditionalBorrowers**

 

(a)                                  Ifone of the wholly-owned Subsidiaries of the Company is to become an AdditionalBorrower, then the Company must (following consultation with the FacilityAgent) deliver to the Facility Agent the relevant documents and evidence listedin Part 2 of Schedule 2 (Conditions precedent documents).

 

(b)                                 Theprior consent of all the Lenders is required for all Additional Borrowers.

 

(c)                                  Therelevant Subsidiary will become an Additional Borrower when the Facility Agentnotifies the other Finance Parties and the Company that it has received all ofthe documents and evidence referred to in paragraph (a) above in form andsubstance satisfactory to it. The Facility Agent must give this notification assoon as reasonably practicable.

 

(d)                                 Deliveryof an Accession Agreement, executed by the relevant Subsidiary and the Company,to the Facility Agent constitutes confirmation by that Subsidiary and theCompany that the Repeating Representations are then correct.

 

**29.7****                        Resignationof a Borrower (other than the Original Borrowers)**

 

(a)                                  Inthis Clause, **Resignation Request** means a letter in the form ofSchedule 10 (Form of Resignation Request), with such amendments as theFacility Agent may approve or reasonably require.

 

(b)                                 TheCompany may request that a Borrower (other than an Original Borrower) ceases tobe a Borrower by giving to the Facility Agent a duly completed ResignationRequest.

 

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(c)                                  TheFacility Agent must accept a Resignation Request and notify the Company and theLenders of its acceptance, unless:

 

(i)                                     itis aware that a Default in respect of that Borrower is outstanding or wouldresult from the acceptance of the Resignation Request; or

 

(ii)                                  anyamount owed by that Borrower under this Agreement is still outstanding.

 

(d)                                 TheBorrower will cease to be a Borrower when the Facility Agent gives thenotification referred to in paragraph (c) above.

 

(e)                                  ABorrower (other than the Company) may also cease to be a Borrower in any othermanner approved by the Majority Lenders.

 

**29.8****                        Changesto the 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 Facility Agent must (in consultation with theCompany) appoint another Lender or an Affiliate of a Lender to replace thatReference Bank.

 

**29.9****                        Affiliatesof Lenders**

 

(a)                                  EachLender may fulfil its obligations in respect of any Utilisation through anAffiliate if:

 

(i)                                     therelevant Affiliate is specified in this Agreement as a Lender or becomes aLender by means of a Transfer Certificate in accordance with this Agreement;and

 

(ii)                                  theUtilisations in which that Affiliate will participate are specified in thisAgreement or in a notice given by that Lender to the Facility Agent and theCompany.

 

In this event, the Lenderand the Affiliate will participate in Utilisations in the manner provided forin sub-paragraph (ii) above.

 

(b)                                 Ifparagraph (a) above applies, the Lender and its Affiliate will be treated ashaving a single Commitment and a single vote, but, for all other purposes, willbe treated as separate Lenders. 

 

**30.****                               DISCLOSURE OF INFORMATION**

 

(a)                                  Each Finance Party must keep confidential anyinformation supplied to it by or on behalf of any Obligor in connection withthe Finance Documents. However, a Finance Party is entitled to discloseinformation:

 

(i)                                     which is publicly available, other than as aresult of a breach by that Finance Party of this Clause;

 

(ii)                                  in connection with any legal or arbitrationproceedings;

 

(iii)                               if required to do so under any law orregulation;

 

(iv)                              to a governmental, banking, taxation or otherregulatory authority;

 

(v)                                 to its officers, directors, employees andprofessional advisers;

 

(vi)                              to the extent allowed under paragraph (b)below;

 

(vii)                           to another Obligor; or

 

(viii)                        with the agreement of the relevant Obligor.

 

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(b)                                 A Finance Party may disclose to an Affiliateor any person with whom it may enter, or has entered into, any kind oftransfer, participation or other agreement in relation to this Agreement (a **participant**):

 

(i)                                     acopy of any Finance Document; and

 

(ii)                                  anyinformation which that Finance Party has acquired under or in connection withany Finance Document.

 

However, before aparticipant may receive any confidential information, it must agree with therelevant Finance Party to keep that information confidential on the terms ofparagraph (a) above.

 

(c)                                  ThisClause supersedes any previous confidentiality undertaking given by a FinanceParty in connection with this Agreement prior to it becoming a Party. 

 

**31.****                               SET-OFF**

 

Following the occurrenceof an Event of Default, a Finance Party may set off any matured obligation owedto it by an Obligor under the Finance Documents (to the extent beneficiallyowned by that Finance Party) against any obligation (whether or not matured)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 indifferent currencies, the Finance Party may convert either obligation at amarket rate of exchange in its usual course of business for the purpose of theset-off. If either obligation is unliquidated or unascertained, the FinanceParty may set off in an amount estimated by it in good faith to be the amountof that obligation. 

 

**32.****                               PRO RATA SHARING**

 

**32.1****                        Redistribution**

 

(a)                                  Subjectto paragraph (b) below, if any amount owing by an Obligor under this Agreementto a Lender (the **recovering Lender**) is discharged by payment, set-off or anyother manner other than through the Facility Agent under this Agreement (a **recovery**),then:

 

(i)                                     therecovering Lender must, within three Business Days, supply details of therecovery to the Facility Agent;

 

(ii)                                  theFacility Agent must calculate whether the recovery is in excess of the amountwhich the recovering Lender would have received if the recovery had been receivedby the Facility Agent under this Agreement; and

 

(iii)                               therecovering Lender must pay to the Facility Agent an amount equal to the excess(the **redistribution**).

 

(b)                                 Paragraph(a) does not apply to a recovery made by a Tranche B Lender by way of a distributionby Rhodia Inc. in its insolvency proceedings or bankruptcy in respect of anamount owing by it to that Tranche B Lender in respect of a Tranche BUtilisation.

 

**32.2****                        Effectof redistribution**

 

(a)                                  TheFacility Agent must treat a redistribution as if it were a payment by therelevant Obligor under this Agreement and distribute it among the Lenders,other than the recovering Lender, accordingly.

 

(b)                                 Whenthe Facility Agent makes a distribution under paragraph (a) above, therecovering Lender will be subrogated to the rights of the Finance Parties whichhave shared in that redistribution.

 

(c)                                  Ifand to the extent that the recovering Lender is not able to rely on any rightsof subrogation under paragraph (b) above, the relevant Obligor will owe therecovering Lender a debt which is equal to the redistribution, immediatelypayable and of the type originally discharged.

 

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(d)                                 If:

 

(i)                                     arecovering Lender must subsequently return a recovery, or an amount measured byreference to a recovery, to an Obligor; and

 

(ii)                                  therecovering Lender has paid a redistribution in relation to that recovery,

 

each Finance Party must,within three Business Days of demand by the recovering Lender through theFacility Agent, reimburse the recovering Lender all or the appropriate portionof the redistribution paid to that Finance Party, together with interest forthe period while it held the re-distribution. In this event, the subrogation inparagraph (b) above will operate in reverse to the extent of the reimbursement.

 

**32.3****                        Exceptions**

 

Notwithstanding any otherterm of this Clause, a recovering Lender need not pay a redistribution to theextent that:

 

(a)                                  itwould not, after the payment, have a valid claim against the relevant Obligorin the amount of the redistribution; or

 

(b)                                 itwould be sharing with another Finance Party any amount which the recoveringLender has received or recovered as a result of legal or arbitrationproceedings, where:

 

(i)                                     therecovering Lender notified the Facility Agent of those proceedings; and

 

(ii)                                  theother Finance Party had an opportunity to participate in those proceedings butdid not do so or did not take separate legal or arbitration proceedings as soonas reasonably practicable after receiving notice of them. 

 

**33.****                               SEVERABILITY**

 

If a term of a FinanceDocument is or becomes illegal, invalid or unenforceable in any jurisdiction,that will not affect:

 

(a)                                  thelegality, validity or enforceability in that jurisdiction of any other term ofthe Finance Documents; or

 

(b)                                 thelegality, validity or enforceability in other jurisdictions of that or anyother term of the Finance Documents. 

 

**34.****                               COUNTERPARTS**

 

Each Finance Document maybe executed in any number of counterparts. This has the same effect as if thesignatures on the counterparts were on a single copy of the Finance Document. 

 

**35.****                               NOTICES**

 

**35.1****                        Inwriting**

 

(a)                                  Anycommunication in connection with a Finance Document must be in writing and,unless otherwise stated, may be given:

 

(i)                                     inperson, by post, fax, e-mail or any other electronic communication approved bythe Facility Agent; or

 

(ii)                                  ifbetween the Facility Agent and a Lender and the Facility Agent and the Lenderagree, by e-mail or other electronic communication.

 

(b)                                 Forthe purpose of the Finance Documents, an electronic communication will betreated as being in writing.

 

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(c)                                  Unlessit is agreed to the contrary, any consent or agreement required under a FinanceDocument must be given in writing.

 

**35.2****                        Contactdetails**

 

(a)                                  Exceptas provided below, the contact details of each Party for all communications inconnection with the Finance Documents are those notified by that Party for thispurpose to the Facility Agent on or before the date it becomes a Party.

 

(b)                                 Thecontact details of the Company for this purpose are:

 
| Address:    | 26, quai Alphonse le  Gallo, 92100 Boulogne Billancourt |
|-------------|---------------------------------------------------------|
| Fax number: | +33 (1) 55 38 44  71/21                            |
| Attention:  | Chief Financial Officer  and General Counsel.           |

 

(c)                                  Thecontact details of the Facility Agent for this purpose are:

 
| Address:    | BNP Paribas, European  Agency/Middle Office Group,  37, Place du Marché St. Honoré, 75031, Paris Cedex 01 |
|-------------|---------------------------------------------------------------------------------------------------------------------|
| Fax number: | +33 (1) 42 98 43  17                                                                                           |
| Attention:  | Raymond Banzon/Isabelle  Blandin/Catherine Staneso.                                                                 |

 

(d)                                 AnyParty may change its contact details by giving five Business Days’ notice tothe Facility Agent or (in the case of the Facility Agent) to the other Parties.

 

(e)                                  Wherea Party nominates a particular department or officer to receive a communication,a communication will not be effective if it fails to specify that department orofficer.

 

**35.3****                        Effectiveness**

 

(a)                                  Exceptas provided below, any communication in connection with a Finance Document willbe deemed to be given as follows:

 

(i)                                     ifdelivered in person, at the time of delivery;

 

(ii)                                  ifposted, on actual receipt;

 

(iii)                               ifby fax, when received in legible form; and

 

(iv)                              ifby e-mail or any other electronic communication, when received in legible form.

 

(b)                                 Acommunication given under paragraph (a) above but received on a non-working dayor after business hours in the place of receipt will only be deemed to be givenon the next working day in that place.

 

(c)                                  Forthe purposes of the Finance Documents, an electronic communication will betreated as being in writing.

 

(d)                                 Unlessit is agreed to the contrary, any consent or agreement required under a FinanceDocument must be given in writing.

 

(e)                                  Acommunication to the Facility Agent will only be effective on actual receipt byit.

 

**35.4****                        Obligors**

 

(a)                                  Allcommunications under the Finance Documents to or from an Obligor must be sentthrough the Facility Agent.

 

(b)                                 Allcommunications under the Finance Documents to or from an Obligor (other thanthe Company) must be sent through the Company.

 

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(c)                                  EachObligor (other than the Company) irrevocably appoints the Company to act as itsagent:

 

(i)                                     togive and receive all communications under the Finance Documents; and

 

(ii)                                  tosign all documents under or in connection with the Finance Documents.

 

(d)                                 Anycommunication given to the Company in connection with a Finance Document willbe deemed to have been given also to the other Obligors.

 

(e)                                  TheFacility Agent may assume that any communication made by the Company is madewith the consent of each other Obligor. 

 

**36.****                               LANGUAGE**

 

(a)                                  Any notice given in connection with a FinanceDocument must be in English.

 

(b)                                 Any other document provided in connectionwith a Finance Document must be:

 

(i)                                     in English; or

 

(ii)                                  (unless the Facility Agent otherwise agrees)accompanied by a certified English translation. In this case, the Englishtranslation prevails unless the document is a statutory or other officialdocument. 

 

**37.****                               GOVERNING LAW**

 

This Agreement is governedby English law. 

 

**38.****                               ENFORCEMENT**

 

**38.1****                        Jurisdiction**

 

(a)                                  TheEnglish courts have exclusive jurisdiction to settle any dispute in connectionwith any Finance Document.

 

(b)                                 Notwithstandingand without prejudice to paragraph (a) above, any New York State court orFederal court sitting in New York City also has jurisdiction to settle anydispute in connection with any Finance Document.

 

(c)                                  TheEnglish and New York courts are the most appropriate and convenient courts tosettle any such dispute and each Obligor waives objection to those courts onthe grounds of inconvenient forum or otherwise in relation to proceedings inconnection with any Finance Document.

 

(d)                                 ThisClause is for the benefit of the Finance Parties only. To the extent allowed bylaw, a Finance Party may take:

 

(i)                                     proceedingsin any other court; and

 

(ii)                                  concurrentproceedings in any number of jurisdictions.

 

**38.2****                        Serviceof process**

 

(a)                                  EachObligor not incorporated in England and Wales irrevocably appoints RhodiaLimited as its agent under the Finance Documents for service of process in anyproceedings before the English courts.

 

(b)                                 EachObligor not incorporated in New York State irrevocably appoints Rhodia Inc. asits agent for service of process in any proceedings before any New York Statecourts.

 

(c)                                  Ifany person appointed as process agent is unable for any reason to act as agentfor service of process, the Company (on behalf of all the Obligors) mustimmediately appoint another agent on terms acceptable to the Facility Agent.Failing this, the Facility Agent may appoint another agent for this purpose.

 

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(d)                                 EachObligor agrees that failure by a process agent to notify it of any process willnot invalidate the relevant proceedings.

 

(e)                                  ThisClause does not affect any other method of service allowed by law.

 

**38.3****                        Waiverof immunity**

 

Each Obligor irrevocablyand unconditionally:

 

(a)                                  agreesnot to claim any immunity from proceedings brought by a Finance Party againstit in relation to a Finance Document and to ensure that no such claim is madeon its behalf;

 

(b)                                 consentsgenerally to the giving of any relief or the issue of any process in connectionwith those proceedings; and

 

(c)                                  waivesall rights of immunity in respect of it or its assets.

 

**38.4****                        Waiverof trial by jury**

 

EACH PARTY WAIVES ANYRIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN CONNECTIONWITH ANY FINANCE DOCUMENT OR ANY TRANSACTION CONTEMPLATED BY ANY FINANCEDOCUMENT. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY COURT.

 

This Agreement has beenentered into on the date stated at the beginning of this Agreement.

 

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Any text that has been deleted pursuant to Rhodia’sconfidential treatment request is marked [“***”] herein and has been separatelysubmitted with the U.S. Securities and Exchange Commission.

 

**SCHEDULE 1**

 

**ORIGINAL PARTIES**

 

**PART1**

 

**ORIGINAL BORROWERS**

 
| **Name of Original Borrower** |   | **Registration number  (or equivalent, if any)** |
|-------------------------------|--------|--------------------------------------------------|
|                          |   |                                             |
| Rhodia Inc.                   |   |                                             |

 

 

**PART2**

 

**ISSUING BANKS**

 
| **Name of Issuing Bank**            |   | **Maximum amount of********Guarantee (€)** |   | **Governing law of Guarantee**                                       |
|-------------------------------------|--------|-------------------------------------------------|--------|----------------------------------------------------------------------|
|                                |   |                                            |   |                                                                 |
| BNP Paribas                         |   | [***]                                           |   | French, English, New  York, Spanish, Italian, Belgian, German, Dutch |
|                                |   |                                            |   |                                                                 |
| Crédit Agricole  Indosuez S.A. |   | [***]                                           |   | French, English,  Spanish, Italian, Belgian, German, Dutch           |
|                                |   |                                            |   |                                                                 |
| CSFB (Tranche B  Guarantee only)    |   | [***]                                           |   | English, New York                                                    |

 

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Any text that has been deleted pursuant to Rhodia’sconfidential treatment request is marked [“***”] herein and has been separatelysubmitted with the U.S. Securities and Exchange Commission.

 

**PART3**

 

**LENDERS—MEDIUM-TERM FACILITY**

 
| **Tranche A**                                                                                        |   |                     |       |
|------------------------------------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                                                 |   |                     |       |
| **Name of Original Lender**                                                                          |   | **Commitment  (€)** |       |
| BNP  Paribas                                                                                         |   | [***]                    |       |
| Crédit  Agricole Indosuez S.A.                                                                  |   | [***]                    |       |
| Crédit  Industriel et Commercial                                                                |   | [***]                    |       |
| Banque  de l’Economie du Commerce et de la Monetique                                            |   | [***]                    |       |
| CCF                                                                                                  |   | [***]                    |       |
| Natexis  Banques Populaires                                                                          |   | [***]                    |       |
| The  Royal Bank of Scotland plc                                                                      |   | [***]                    |       |
| Standard  Chartered Bank                                                                             |   | [***]                    |       |
| Comerica  Bank                                                                                       |   | [***]                    |       |
| Citibank  International plc (or Citicorp USA, Inc. in relation to Utilisations by  Rhodia Inc.) |   | [***]                    |       |
| Bayerische  Landesbank                                                                               |   | [***]                    |       |
| Unicredito  Italiano                                                                                 |   | [***]                    |       |
| Landesbank  Saar                                                                                     |   | [***]                    |       |
| Fortis  Bank (Nederland) N.V.                                                                        |   | [***]                    |       |
| Banco  Bilbao Vizcaya Argentaria                                                                     |   | [***]                    |       |
| The  Bank of Tokyo-Mitsubishi, Ltd.                                                                  |   | [***]                    |       |
| **Total Tranche A**                                                                                  |   | **532,522,724**          | ** ** |
|                                                                                                 |   |                     |       |
| **Tranche B**                                                                                        |   |                     | ** ** |
|                                                                                                 |   |                     | ** ** |
| **Name of Original Lender**                                                                          |   | **Commitment (€)**  |       |
| Credit  Suisse First Boston International                                                            |   | [***]                    |       |
| UFJ  Bank Limited                                                                                    |   | [***]                    |       |
| **Total Tranche B**                                                                                  |   | **105,974,473**          | ** ** |
| **Total Medium-Term Facility Commitments**                                                           |   | **638,497,197**          | ** ** |

 

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Any text that has been deleted pursuant to Rhodia’sconfidential treatment request is marked [“***”] herein and has been separatelysubmitted with the U.S. Securities and Exchange Commission.

 

**PART4**

 

**LENDERS—SHORT-TERM FACILITY**

 
| **Name of Original Lender**                                                                     |   | **Commitment (€)** |            |
|-------------------------------------------------------------------------------------------------|--------|-------------------------|-----------------|
| BNP Paribas                                                                                     |   | [***]                   |            |
| Crédit  Agricole Indosuez S.A.                                                             |   | [***]                   |            |
| Crédit  Industriel et Commercial                                                           |   | [***]                   |            |
| Banque  de l’Economie du Commerce et de la Monetique                                       |   | [***]                   |            |
| CCF                                                                                             |   | [***]                   |            |
| Natexis  Banques Populaires                                                                     |   | [***]                   |            |
| The  Royal Bank of Scotland plc                                                                 |   | [***]                   |            |
| Standard  Chartered Bank                                                                        |   | [***]                   |            |
| Comerica  Bank                                                                                  |   | [***]                   |            |
| Citibank  International plc (or Citicorp USA, Inc. in relation to Utilisations by  Rhodia Inc.) |   | [***]                   |            |
| Bayerische  Landesbank                                                                          |   | [***]                   |            |
| Unicredito  Italiano                                                                            |   | [***]                   |            |
| Landesbank  Saar                                                                                |   | [***]                   |            |
| Fortis  Bank (Nederland) N.V.                                                                   |   | [***]                   |            |
| Credit  Suisse First Boston International                                                       |   | [***]                   |            |
| UFJ  Bank Limited                                                                               |   | [***]                   |            |
| The  Bank of Tokyo-Mitsubishi, Ltd.                                                             |   | [***]                   |            |
| **Total Short-Term Facility Commitments**                                                       |   | **119,224,721**         | ** **      |
| **Total Commitments**                                                                           |   | **€**              | **757,721,918** | ** ** |
|                                                                                                 |        |                         |                 |  |

 

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**SCHEDULE 2**

 

**CONDITIONS PRECEDENT DOCUMENTS**

 

**PART1**

 

**TO BE DELIVERED BEFORE THE FIRSTREQUEST**

 

**Original Obligors**

 

1.                                       Acopy of the *statuts*of the Company or a certificate of the authorised signatory of the Company confirmingthat the copy of the *statuts* of the Company in the FacilityAgent’s possession is still correct, complete and in full force and effect asat a date no earlier than the date of this Agreement and a *K-bis* extract from the Tradeand Companies Registry relating to the Company dated no more than one monthprior to the date of this Agreement.

 

2.                                       Acopy of the memorandum and articles of association, certificate ofincorporation and certificate of incorporation on change of name (if any) orany other constitutional document of each Original Obligor including, for anyOriginal Obligor incorporated in France, a *K-bis* extract from the Trade and CompaniesRegistry related to it or a certificate of the authorised signatory of theCompany confirming that the copy of the constitutional documents of eachOriginal Obligor in the Facility Agent’s possession is still correct, completeand in full force and effect as at a date no earlier than the date of thisAgreement.

 

3.                                       (a)A copy of resolutions of the board of directors of each Original Obligorapproving the terms of, and the transactions contemplated by the FinanceDocuments, in particular the guarantee to be provided by the Company under thisAgreement, and the execution by each Original Obligor of each Finance Document.

 

(b)                                 Acertificate of the chief financial officer of each Borrower certifying thatutilisation of the Facility in full would not cause any borrowing limit bindingon each Borrower to be exceeded.

 

4.                                       (a)Evidence satisfactory to the Facility Agent of the authority of a specifiedindividual or individuals to sign each Finance Document and to sign anddespatch Requests, in each case, on behalf of each Original Obligor.

 

(b)                                 Aspecimen of the signature of each person authorised to sign this Agreement andto sign and despatch each Request, in each case on behalf of each Borrower.

 

5.                                       Confirmationfrom each agent, if any, or lender as the case may be, under the RefinancedFacilities that it has received an irrevocable notice of cancellation andprepayment of the Refinanced Facilities such notice to take effect such thatcancellation and prepayment will be made in a manner satisfactory to therelevant lenders on or prior to the first Utilisation Date.

 

6.                                       Alist identifying each Subsidiary of the Borrowers which is a MaterialSubsidiary within the meaning of paragraph (a) of the definition thereof, asdetermined from the Original Financial Statements.

 

7.                                       Acertificate signed by the chief financial officer of each Borrower setting outin reasonable detail computations establishing compliance with the financialcovenants in Clause 20 (Financial Covenants) as at 31st December, 2003.

 

8.                                       Evidencethat the process agents referred to in Clause 38.2 (Service of process) haveaccepted their appointment for the purposes of that Clause.

 

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9.                                       Acertificate of an authorised signatory of each Original Obligor party to theFinance Documents certifying:

 

(a)                                  thateach document delivered by it under this Part 1 of this Schedule iscorrect, complete and in full force and effect as at a date no earlier than thedate of this Agreement;

 

(b)                                 thatthe execution of and assumption of its obligations under the Finance Documentswill not result in any breach of any restriction binding on it;

 

(c)                                  asto the identity and specimen signatures of its directors and signatories;

 

(d)                                 thatno Default is outstanding relating to it; and

 

(e)                                  thatthe representations and warranties made by it in the Finance Documents arecorrect.

 

**Financial Information**

 

1.                                       Acopy of the Original Financial Statements.

 

2.                                       Consolidatedmanagement accounts, consisting of balance sheet, profit and loss account andcashflow for the Company.

 

**Agreements and documents**

 

1.                                       Anoriginal of this Agreement executed by each Party.

 

2.                                       Anoriginal of the Fee Letter(s).

 

3.                                       Anoriginal of the Intercreditor and Sharing Deed executed by each party.

 

4.                                       Anoriginal of the Subordination Agreement executed by each party including RhodiaInc. and Rhodia Holding Inc. with respect to any subrogation rights.

 

**Security Document(s)**

 

1.                                       Atleast 2 copies (or, if required in the relevant jurisdiction, such additionalcopies as are requested by the Finance Parties) of the Security Documents to beentered into in accordance with the Agreed Security Principles, each dulyexecuted by the parties to it.

 

2.                                       Registrationrequirements of Security Documents effected.

 

3.                                       Documentsnecessary for perfection of Security Documents.

 

4.                                       Acopy of all notices required to be sent under the Security Documents.

 

5.                                       Acopy of all transfers, share certificates and stock transfer forms orequivalent relating to assets charged by the Security Documents.

 

6.                                       Evidencethat each creditor has waived in writing any negative pledge or otherrestriction in its favour that would or could be breached by any member of theGroup entering into the Security Documents.

 

7.                                       Copiesof the Secured Intra-Group Loans in an agreed form.

 

8.                                       Anauditor’s certificate in respect of Intra-Group Loans made in respect of RhodiaGermany International GmbH confirming that such loans are not being made forthe purposes of capital.

 

9.                                       Apostilledpowers of attorney in respect of the Security Documents governed by Dutch law.

 

94

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**Legal opinions**

 

1.                                       Alegal opinion in the agreed form of Shearman & Sterling, or other law firmadvising in relation to the Agreed Security Principles or the SubordinationAgreement, as legal advisers to the Company and the Obligors, addressed to theFinance Parties in respect of the laws of the jurisdiction of the place ofincorporation of the relevant Obligor or governing law of the relevant FinanceDocument.

 

2.                                       Alegal opinion in the agreed form of Allen & Overy addressed to the FacilityAgent.

 

**Other documents and evidence**

 

1.                                       Evidencethat all fees and expenses then due and payable from the Company under thisAgreement have been or will be paid by the first Utilisation Date.

 

2.                                       Evidencethat the Refinanced Facilities will be prepaid and cancelled in full on orprior to the first Utilisation Date.

 

3.                                       Evidencethat a minimum of €300,000,000 net cash proceeds has been unconditionallyreceived in respect of the Rights Issue.

 

4.                                       Acopy of the Original Business Plan.

 

5.                                       Acopy of the latest Business Plan validated by Ernst & Young in accordancewith the Secured Co-ordination Agreement.

 

6.                                       Evidencethat the necessary amendments to the USPP are effective.

 

7.                                       Evidencethat the necessary amendments to the Affected Facilities (as defined in theSecured Co-ordination Agreement) are effective.

 

8.                                       Copiesof the executed Agreed Affected Lease Facilities and evidence that the AgreedAffected Lease Facilities are in full force and effect in each case in form andsubstance satisfactory to the Majority Lenders.

 

9.                                       Evidencethat the existing Securitisation Programmes will be maintained or replaced withnew Securitisation Programmes throughout the term of the Agreement.

 

10.                                 Acertificate from the chief financial officer of the Company confirming that thetotal net assets and EBITDA directly or indirectly subject to the SecurityDocuments are greater than or equal to 95% of the total net assets and EBITDAof the Group.

 

11.                                 Abreakdown of the Exposure under the Facilities which are subject to a SecurityDocument (as each term is defined in the Secured Co-ordination Agreement)showing that the total obligations thereunder do not exceed €1,300,000,000 orits equivalent in other currencies.

 

12.                                 Acopy of any other authorisation or other document, opinion or assurance whichthe Facility Agent in good faith has notified the Company is necessary ordesirable in connection with the entry into and performance of, and thetransactions contemplated by, any Finance Document or for the validity andenforceability of any Finance Document.

 

13.                                 Aletter from the Facility Agent to the Company substantially in the form ofSchedule 11 (Form of *Taux Effectif Global* Letter).

 

14.                                 Acopy of the Group Structure Chart.

 

95

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**PART2**

 

**FOR AN ADDITIONAL BORROWER**

 

**Additional Borrowers**

 

1.                                       AnAccession Agreement, duly executed by the Company and the Additional Borrower.

 

2.                                       Acopy of the memorandum and articles of association, certificate ofincorporation and certificate of incorporation on change of name (if any) orany other constitutional document of each Additional Borrower including, forany Additional Borrower incorporated in France, a *K-bis* extract from the Tradeand Companies Registry related to it.

 

3.                                       Acopy of a resolution of the board of directors of the Additional Borrowerapproving the terms of, and the transactions contemplated by, the AccessionAgreement.

 

4.                                       Acertificate of the chief financial officer of the Additional Borrowercertifying that utilisation of the Facility in full would not cause anyborrowing limit binding on the Additional Borrower to be exceeded.

 

5.                                       Acertificate of an authorised signatory of the Additional Borrower certifying:

 

(a)                                  thateach document delivered under this Part 2 of this Schedule is correct,complete and in full force and effect as at a date no earlier than the date ofAccession Agreement;

 

(b)                                 thatthe execution of and assumption of its obligations under the Finance Documentswill not result in any breach of any restriction binding on it;

 

(c)                                  asto the identify and specimen signatures of its directors and signatories;

 

(d)                                 thatno Default is outstanding relating to it; and

 

(e)                                  thatthe representations and warranties made by it in the Finance Documents and therepresentation and warranty set out in Clause 18.23 (Solvency of Obligors) asif set out in the certificate in full in each case on the date of thatcertificate by reference to the facts and circumstances then subsisting arecorrect.

 

6.                                       Acopy of the latest audited accounts of the Additional Borrower.

 

7.                                       Evidencethat the agent of the Additional Borrower under the Finance Documents forservice of process in England and Wales has accepted its appointment.

 

**Security Document(s)**

 

1.                                       Atleast 2 copies (or, if required in the relevant jurisdiction, such additionalcopies as are requested by the Finance Parties) of the Security Documents to beentered into in accordance with the Agreed Security Principles, each dulyexecuted by the parties to it.

 

2.                                       Registrationrequirements of Security Documents effected.

 

3.                                       Documentsnecessary for perfection of Security Documents.

 

4.                                       Acopy of all notices required to be sent under the Security Documents.

 

5.                                       Acopy of all transfers, share certificates and stock transfer forms orequivalent relating to assets charged by the Security Documents.

 

6.                                       Evidencethat each creditor has waived in writing any negative pledge or otherrestriction in its favour that would or could be breached by any member of theGroup entering into the Security Documents.

 

96

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7.                                       Copiesof the Secured Intra-Group Loans and the Intra-Group Loans subject directly orindirectly to the Security Documents in an agreed form.

 

**Legal opinions**

 

1.                                       Ifthe Additional Borrower is incorporated in a jurisdiction other than England, alegal opinion from legal advisers in that jurisdiction, addressed to theFinance Parties.

 

**Other documents and evidence**

 

1.                                       Evidencethat all expenses due and payable from the Company under this Agreement inrespect of the Accession Agreement have been paid.

 

2.                                       Acopy of any other authorisation or other document, opinion or assurance whichthe Facility Agent in good faith has notified the Company is necessary ordesirable in connection with the entry into and performance of, and thetransactions contemplated by, the Accession Agreement or for the validity andenforceability of any Finance Document.

 

3.                                       Aletter from the Facility Agent to any Additional Borrower incorporated inFrance substantially in the form of Schedule 11 (Form of *TauxEffectif Global* Letter).

 

97

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**SCHEDULE 3**

 

**FORM OF REQUEST**

 

To: [AGENT] as FacilityAgent

 

From: [                        ]

 

Date: [                        ]

 

**RHODIA—€757,721,918 Credit Agreement**

**dated [DATE], 2004 (the Agreement)**

 

1.                                       Werefer to the Agreement. This is a Request.

 

2.                                       Wewish to [borrow a Loan]/[request a Guarantee](1) on the following terms:

 

(a)                                  [Medium-TermFacility/Short-Term Facility](2): [                       ]

 

[Tranche A: [                        ]](3)

 

[Tranche B: [                        ]](4)

 

(b)                                 UtilisationDate: [                        ]

 

(c)                                  Borrower:[                        ]

 

(d)                                 [IssuingBank: [                        ]](5)

 

(e)                                  Amount/currency:[                        ]

 

(f)                                    Term:[                        ].

 

3.                                       Ourpayment instructions are: [                        ].

 

4.                                       Weconfirm that each condition precedent under the Agreement which must besatisfied on the date of this Request is so satisfied.

 

5.                                       [Weattach a copy of the proposed Guarantee.](6)

 

6.                                       ThisRequest is irrevocable.

 

By:

 

[                        ]

 

----

(1)                                  Deleteas appropriate.

(2)                                  Deleteas appropriate.

(3)                                  Deleteas appropriate.

(4)                                  Deleteas appropriate.

(5)                                  Deleteas appropriate.

(6)                                  Deleteas appropriate.

 

98

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**SCHEDULE 4**

 

**FORM OF GUARANTEE(7)**

 

To: [BENEFICIARY] asBeneficiary

 

From: [ISSUING BANK] asIssuing Bank

 

Date: [                        ]

 

**Guarantee no. [                        ]**

 

At the request of[ISSUING BANK], (the **Issuing Bank**) issues this irrevocableguarantee (**Guarantee**) in your favour on the following terms andconditions:

 

**1.****                                      Definitions**

 

In this Guarantee:

 

**Business Day** meansa day (other than a Saturday or a Sunday) on which banks are open for generalbusiness in [London].

 

**Demand** means ademand for a payment under this Guarantee in the form of the schedule tothis Guarantee.

 

**Expiry Date** means[                        ].

 

**Total Guarantee Amount**means [                        ].

 

**2.****                                      IssuingBank’s agreement**

 

(a)                                  TheBeneficiary may request a payment [or payments] under this Guarantee by givingto the Issuing Bank a duly completed Demand. A Demand must be received by theIssuing Bank on or before the Expiry Date and by no later than [    ]p.m. ([London] time) on the Expiry Date.

 

(b)                                 Subjectto the terms of this Guarantee, the Issuing Bank unconditionally andirrevocably guarantees to the Beneficiary that, within [ten] Business Days ofreceipt by it of a Demand validly presented under this Guarantee, it must payto the Beneficiary the amount which is demanded for payment in that Demand.

 

(c)                                  TheIssuing Bank will not be obliged to make a payment under this Guarantee if as aresult the aggregate of all payments made by it under this Guarantee wouldexceed the Total Guarantee Amount.

 

**3.****                                      Expiry**

 

(a)                                  On[    ]pm ([London] time) on the ExpiryDate the obligations of the Issuing Bank under this Guarantee will cease withno further liability on the part of the Issuing Bank except for any Demandvalidly presented before such time under the Guarantee that remains unpaid.

 

(b)                                 TheIssuing Bank will be released from its obligations under this Guarantee on thedate prior to the Expiry Date (if any) notified in writing by the Beneficiaryto the Issuing Bank as the date upon which the obligations of the Issuing Bankunder this Guarantee are released.

 

(c)                                  Whenthe Issuing Bank is no longer under any obligation under this Guarantee, theBeneficiary must return the original of the Guarantee to the Issuing Bank, itbeing understood that non-restitution of the original Guarantee shall notaffect the release of the Issuing Bank.

 

----

(7)                                  Tobe adapted for relevant governing law

 

99

----

 

**4.****                                      Payments**

 

All payments under thisGuarantee must be made in [            ]and for value on the due date to the account of the Beneficiary specified inthe Demand.

 

**5.****                                      Deliveryof Demand**

 

Each Demand must be inwriting, and may be given in person, by post, international courier orauthenticated SWIFT message and must be received in legible form by the IssuingBank at its address and by the particular department or officer (if any) asfollows:

 

[
]

 

**6.****                                      Assignment**

 

The Beneficiary’s rightsunder this Guarantee may not be assigned or transferred.

 

**7.****                                      [URDG**

 

Except to the extent itis inconsistent with the express terms of this Guarantee, this Guarantee issubject to the Uniform Rules for Demand Guarantees, International Chamber ofCommerce Publication No. 458 with the exception of article 20 of theURDG.]

 

**8.****                                      [GoverningLaw**

 

This Guarantee isgoverned by [            ] law.]

 

**9.****                                      [Jurisdiction**

 

The [            ] courts have exclusivejurisdiction to settle any dispute in connection with this Guarantee.]

 

Yours faithfully

 

[ISSUING BANK]

 

By:

 

 

100

----

 

**Schedule**

 

**FORM OFDEMAND**

 

To: [ISSUING BANK]

 

From: [BENEFICIARY]

 

Date: [                        ]

 

Dear Sirs

 

**Guarantee no. [           ] issued in favour of [BENEFICIARY] (the Guarantee)**

 

We refer to theGuarantee. Terms defined in the Guarantee have the same meaning when used inthis Demand.

 

1.                                       Wecertify that the sum of [            ]is due [and has remained unpaid for at least [    ] Business Days under [set out underlying contract oragreement]. We therefore demand payment of the sum of [            ].

 

2.                                       Paymentshould be made to the following account:

 

Name:

 

Account Number:

 

Bank:

 

3.                                       Thedate of this Demand is not later than the Expiry Date.

 

Yours faithfully

 
| (Authorised Signatory) | (Authorised Signatory) |
|------------------------|------------------------|
|                   |                   |
|                   |                   |
| For                    |                   |
| [BENEFICIARY]          |                   |

 

101

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**SCHEDULE 5**

 

**CALCULATION OF THE MANDATORY COST**

 

**1.****                                      General**

 

The Mandatory Cost is theweighted average of the rates for each Lender calculated below by the FacilityAgent on the first day of a Term. The Facility Agent must distribute eachamount of Mandatory Cost among the Lenders on the basis of the rate for eachLender.

 

**2.****                                      Fora Lender lending from a Facility Office in the U.K.**

 

(a)                                  Therelevant rate for a Lender lending from a Facility Office in the U.K. iscalculated in accordance with the following formulae:

 

for a Loan in Sterling:

 
| AB+C(B-D)+EX0.01 |  per cent. per  annum |
|------------------|----------------------------|
| 100-(A+C)        |

 

for any other Loan:

 
| EX0.01 |  per cent. per  annum |
|--------|----------------------------|
| 300    |

 

where on the day ofapplication of the formula:

 

A                                      isthe percentage of that Lender’s eligible liabilities (in excess of any statedminimum) which the Bank of England requires it to hold on anon-interest-bearing deposit account in accordance with its cash ratiorequirements;

 

B                                        isLIBOR for that Term;

 

C                                        isthe percentage of that Lender’s eligible liabilities which the Bank of Englandrequires it to place as a special deposit;

 

D                                       isthe interest rate per annum allowed by the Bank of England on a specialdeposit; and

 

E                                         iscalculated by the Facility Agent as being the average of the rates of chargesupplied by the Reference Banks to the Facility Agent under paragraph (d) belowand expressed in pounds per £1 million.

 

(b)                                 Forthe purposes of this paragraph 2:

 

(i)**                                     eligibleliabilities** and **special deposit** have the meanings given tothem at the time of application of the formula by the Bank of England;

 

(ii)**                                  feesrules** means the then current rules on periodic fees in the SupervisionManual of the FSA Handbook; and

 

(iii)**                               tariffbase** has the meaning given to it in the fees rules.

 

(c)                                  (i)                                     Inthe application of the formulae, A, B, C and D are included as figures and notas percentages, e.g. if A = 0.5% and B = 15%, AB is calculated as 0.5 X 15. Anegative result obtained by subtracting D from B is taken as zero.

 

(ii)                                  Eachrate calculated in accordance with a formula is, if necessary, rounded upwardto four decimal places.

 

102

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(d)                                 (i)            Each Reference Bank must supply tothe Facility Agent the rate of charge payable by that Reference Bank to theFinancial Services Authority under the fees rules (calculated by that ReferenceBank as being the average of the rates of charge within fee-block Category A1(Deposit acceptors) applicable to that Reference Bank but, for this purpose,applying any applicable discount and ignoring any minimum fee required underthe fees rules) and expressed in pounds per £1 million of the tariff base ofthat Reference Bank.

 

(ii)                                  EachReference Bank must promptly notify the Facility Agent of any change to therate of charge.

 

(e)                                  (i)            Each Lender and each Reference Bankmust supply to the Facility Agent the information required by it to make acalculation of the rate for that Lender or Reference Bank. The Facility Agentmay assume that this information is correct in all respects.

 

(ii)                                  Ifa Lender or a Reference Bank fails to do so, the Facility Agent may assume thatthe Lender’s or that Reference Bank’s obligations in respect of cash ratiodeposits, special deposits and the fees rules are the same as those of atypical bank from its jurisdiction of incorporation with a Facility Office inthe U.K.

 

(iii)                               TheFacility Agent has no liability to any Party if its calculation over or undercompensates any Lender.

 

**3.****                                      Fora Lender lending from a Facility Office in a Participating Member State**

 

(a)                                  Therelevant rate for a Lender lending from a Facility Office in a ParticipatingMember State is the percentage rate per annum notified by that Lender to theFacility Agent as its cost of complying with the minimum reserve requirementsof the European Central Bank.

 

(b)                                 Ifa Lender fails to specify a rate under paragraph (a) above, the Facility Agentwill assume that the Lender has not incurred any such cost.

 

**4.****                                      Changes**

 

The Facility Agent may,after consultation with the Company and the Lenders, notify all the Parties ofany amendment to this Schedule which is required to reflect:

 

(a)                                  anychange in law or regulation; or

 

(b)                                 anyrequirement imposed by the Bank of England, the Financial Services Authority orthe European Central Bank (or, in any case, any successor authority).

 

Any notification will be,in the absence of manifest error, conclusive and binding on all the Parties.

 

103

----

 

**SCHEDULE 6**

 

**FORMS OF TRANSFER CERTIFICATE**

 

**PART1**

 

**FORM FOR TRANSFERS BY ASSIGNMENT**

 
| To:    | [AGENT] as Facility  Agent                                                                    |
|--------|-----------------------------------------------------------------------------------------------|
|   |                                                                                          |
| From:  | [THE EXISTING LENDER]  (the **Existing Lender**) and [THE  NEW LENDER] (the **New Lender**)   |
|   |                                                                                          |
| Date:  | [                ] |

 

**RHODIA—757,721, 918 Credit Agreement**

**dated [*DATE*], 2004**(the **Agreement**)

 

We refer to theAgreement. This is a Transfer Certificate.

 

1.                                       Inaccordance with the terms of the Agreement:

 

(a)                                  theExisting Lender assigns absolutely to the New Lender all the rights of theExisting Lender under the Agreement specified in the Schedule;

 

(b)                                 theExisting Lender is released from all its obligations under the Agreement whichcorrespond to the Existing Lender’s rights specified in the Schedule; and

 

(c)                                  theNew Lender becomes a Lender under the Agreement and is bound by obligationsequivalent to those from which the Existing Lender is released under paragraph(b) above.

 

2.                                       Theproposed Transfer Date is [           ].

 

3.                                       Theadministrative details of the New Lender for the purposes of the Agreement areset out in the Schedule.

 

4.                                       Inthe case of an assignment, the Existing Lender and the New Lender shall ensurethat the assignment is notified by bailiff (*huissier*) to the Company in accordancewith Article 1690 of the French Civil Code.

 

5.                                       ThisTransfer Certificate is governed by English law.

 

104

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**THE SCHEDULE**

 

**Rights and obligations to betransferred by assignment**

[insert relevantdetails, including applicable Commitment (or part)]

 

**Administrative details of the NewLender**

[insert details ofFacility Office, address for notices and payment details etc.]

 
| [**EXISTING LENDER**]                                                                                                                                               | [**NEW LENDER**] |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|
|                                                                                                                                                                |             |
| By:                                                                                                                                                                 | By:              |
|                                                                                                                                                                |             |
| The Transfer Date is  confirmed by the Facility Agent as  [                 ]. |
|                                                                                                                                                                |
| [AGENT]                                                                                                                                                             |             |
| as Facility Agent, for  and on behalf                                                                                                                               |             |
| of each of the parties  to the                                                                                                                                      |             |
| Agreement (other than  the Existing Lender and                                                                                                                      |             |
| the New Lender)                                                                                                                                                     |             |
|                                                                                                                                                                |             |
| By:                                                                                                                                                                 |             |
|                                                                                                                                                                     |                  |  |

 

 

**Note: It is the responsibility of each individual New Lenderto ascertain whether any other document or formality is required to perfect thetransfer contemplated by this Transfer Certificate including any interest insecurity.**

 

105

----

 

**PART2**

 

**FORM FOR TRANSFERS BY NOVATION**

 
| To:    |   | [AGENT] as Facility  Agent                                                                                                                    |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                          |
| From:  |   | [THE EXISTING LENDER]  (the Existing Lender) and [THE NEW LENDER] (the New Lender)                                                            |
|   |   |                                                                                                                                          |
| Date:  |   | [                        ] |

 

 

**RHODIA—757,721,918 Credit Agreement**

**dated [DATE], 2004**(the **Agreement**)

 

We refer to theAgreement. This is a Transfer Certificate.

 

1.                                       TheExisting Lender transfers by novation to the New Lender the Existing Lender’srights and obligations referred to in the Schedule below in accordancewith the terms of the Agreement.

 

2.                                       Theproposed Transfer Date is [    ].

 

3.                                       Theadministrative details of the New Lender for the purposes of the Agreement areset out in the Schedule.

 

4.                                       TheSecurity Interests created pursuant to the Security Documents are expresslyreserved by the Existing Lender in accordance with Article 1278 *et seq.*of the French Civil Code and Article 1278 of the Belgian Civil Code andsuch Security Interests shall benefit the New Lender with the same ranking asthat benefiting the Existing Lender prior to the novation.

 

5.                                       ThisTransfer Certificate is governed by English law.

 

106

----

 

**THE SCHEDULE**

 

**Rights and obligations to betransferred by novation**

[insert relevantdetails, including applicable Commitment (or part)]

 

**Administrative details of the NewLender**

[insert details ofFacility Office, address for notices and payment details etc.]

 

 
| [**EXISTING LENDER**]                                                                                                                                                                                   | [**NEW LENDER**] |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|
|                                                                                                                                                                                                    |             |
| By:                                                                                                                                                                                                     | By:              |
|                                                                                                                                                                                                    |             |
| The Transfer Date is  confirmed by the Facility Agent as [                        ]. |
|                                                                                                                                                                                                    |
| [AGENT]                                                                                                                                                                                                 |             |
|                                                                                                                                                                                                    |             |
| By:                                                                                                                                                                                                     |             |
|                                                                                                                                                                                                         |                  |  |

 

 

**Note: It is the responsibility of each individual New Lenderto ascertain whether any other document or formality is required to perfect thetransfer contemplated by this Transfer Certificate including any interest insecurity.**

 

107

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**SCHEDULE 7**

 

**EXISTING SECURITY AND EXISTINGINDEBTEDNESS**

 

**PART1**

 

**EXISTING SECURITY INTEREST**

 

***More than 50% owned Subsidiaries***

 
| **Nature of the security interest** |   | **Entity / Entreprise**                            |   | **Beneficiary**                                                                                                |   | **Amount********(EUR)** |   | **Purpose*** |   |
|-------------------------------------|--------|----------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------------|--------|
| Cash  deposit                       |   | Rhodia Silica Korea                                |   | Koram Bank (dépôt  obligatoire afin de conserver le compte bancaire)                                 |   | 1,713                   |   | YES          |   |
| Cash  deposit                       |   | Rhodia Chemie NV                                   |   | ING                                                                                                            |   | 18,000,000              |   | NO           |   |
| Cash  deposit                       |   | Rhodia Energy                                      |   | TotalFina                                                                                                      |   | 6,000,000               |   | YES          |   |
| Cash  deposit                       |   | Rhodia Energy                                      |   | SIDEC (boiler  maintenance)                                                                                    |   | 1,000,000               |   | NO           |   |
| Cash  deposit                       |   | Rhodia Energy                                      |   | PARIS LEASE (Cogen  Chalampé lease)                                                                       |   | 693,000                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Energy                                      |   | CARGIL (trading  activities in Geneva)                                                                         |   | 583,000                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Recherches                                  |   | CMCIC Lease                                                                                                    |   | 194,500                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia SA                                          |   | CMCIC Lease                                                                                                    |   | 1,099,285               |   | NO           |   |
| Cash  deposit                       |   | Rhodia Performances  Fibres SRL                    |   | EGL (LT deposit)                                                                                               |   | 153,000                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Performances  Fibres SRL                    |   | Telecom (letter of  credit)                                                                                    |   | 11,000                  |   | NO           |   |
| Cash  deposit                       |   | Rhodia Pi Belle Etoile                             |   | Air Liquide                                                                                                    |   | 424,000                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Acetow Gmbh                                 |   | Commerzbank                                                                                                    |   | 285,766                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Acetow Gmbh                                 |   | Dresdner                                                                                                       |   | 319,836                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Limited                                     |   | HSBC (contrepartie  d’une garantie émise par HSBC en faveur de Rhodia Consumer Spec. Ltd)            |   | 110,448                 |   | NO           |   |
| Fixed  assets mortgage              |   | Baotou Rhodia Rare  Earth Co. Ltd.                 |   | Bank of China (pledge  d’actifs en contrepartie d’un prêt BOC)                                  |   | 2,868,179               |   | YES          |   |
| Cash  deposit                       |   | Rhodia Finance  International BV                   |   | Natexis Banques  Populaires (achat d’actions)                                                             |   | 8,071,228               |   | NO           |   |
| Cash  deposit                       |   | Rhodia Brasil                                      |   | Banco do Brasil (liée à  une standby letter of credit en faveur de Banco Mercantil Venezuela 2 MUSD) |   | 1,934,580               |   | NO           |   |
| Mortgage                            |   | Rhodia Brasil                                      |   | Social Security  Authority (Pledge de la Casa Rhodia)                                                          |   | 1,575,301               |   | NO           |   |
| Equipments                          |   | Rhodia Poliamida e  Especialidades                 |   | Tax Judicial  Proceedings (pledge d’actifs)                                                               |   | 829,106                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Brasil + Rhodia  Poliamida e Especialidades |   | Judicial Proceedings                                                                                           |   | 9,285,983               |   | NO           |   |
| Fixed  assets                       |   | Rhodia Mexicana SA de  C.V.                        |   | Mexican Customs                                                                                                |   | 34,987,921              |   | NO           |   |
| Short  term investments             |   | CEIMIC-RE                                          |   | AGF                                                                                                            |   | 11,645,930              |   | NO           |   |
| Collateral  cash                    |   | Rhodia Italia                                      |   | Mediobanca (en  contrepartie du financement Nylstar)                                                           |   | 11,924,271              |   | NO           |   |
| Cash  deposit                       |   | Rhodia Silicones                                   |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 293,592                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Silices                                     |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 978,529                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia PPMC                                        |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 1,551,548               |   | NO           |   |
| Cash  deposit                       |   | Rhodia Polyamide  Intermediates                    |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 2,182,619               |   | NO           |   |
| Cash  deposit                       |   | Rhodia Performance  Fibres                         |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 24,698                  |   | NO           |   |
| Cash  deposit                       |   | Rhodia Electronics  & Catalysis                |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 1,820,967               |   | NO           |   |
| Cash  deposit                       |   | Rhoditech                                          |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 129,391                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Pi Belle Etoile                             |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 149,382                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Pi Chalampe                                 |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 40,002                  |   | NO           |   |
| Cash  deposit                       |   | Rhodia Acetol                                      |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 178,175                 |   | NO           |   |
| Cash  deposit                       |   | RHODIA ENERGY                                      |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 1,823,026               |   | NO           |   |
| Cash  deposit                       |   | RHODIA ECO SERVICES  SULFURIQUE                    |   | Crédit Mutuel-Sales of  Receivables                                                                       |   | 1,628,703               |   | NO           |   |
| Cash  deposit                       |   | Rhodia Asia Pacific Pte  Ltd                       |   | Standard Chartered Bank                                                                                        |   | 710,564                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Asia Pacific Pte  Ltd                       |   | Various vendors  (cautions diverses envers fournisseurs, locations...)                                         |   | 281,851                 |   | NO           |   |
| Cash  deposit                       |   | Rhodia Chili Ltda                                  |   | Office rental guarantee                                                                                        |   | 2,852                   |   | NO           |   |
|                                |   | Rhodia Chili Ltda                                  |   | Sudameris (car leasing)                                                                                        |   | 7,605                   |   | NO           |   |
|                                |   | Rhodia Argentina                                   |   | Office rental guarantee                                                                                        |   | 4,200                   |   | NO           |   |

 

108

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| **Nature of the security interest**                                                                           |   | **Entity / Entreprise**                          |   | **Beneficiary**                                                                                                                              |   | **Amount********(EUR)** |   | **Purpose*** |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------------|--------|
| **United States Security Interests (Excluding  SG/JPMorganChase Leases)**                                     |   |                                             |   |                                                                                                                                         |   |                    |   |         |   |
| All  receivables, underlying inventory & related cash collections in  controlled accounts                 |   | Rhodia Inc., Rhodia  E&C, Rhodia Canada Inc. |   | Wachovia Bank, NA, as  Agent (re receivable securitisation program)                                                                          |   | 100,660,332             |   | YES          |   |
| Cash  (LOC Agreement contract sec. interest/offset right chargeable against  securitization cash collections) |   | Rhodia Inc.                                      |   | Wachovia Bank, N.A.                                                                                                                          |   | 5,636,979               |   | YES          |   |
| Equipment                                                                                                     |   | Rhodia Inc.                                      |   | Industrial Development  Revenue Bonds (Stauffer Chemical Company Project) Series 1978 of City of  Chicago Heights, IL                        |   | 805,283                 |   | YES          |   |
| Equipment                                                                                                     |   | Rhodia Inc.                                      |   | Pollution Control  Revenue Bonds (Stauffer Chemical Company Project) Series 1978 of City of  Chicago Heights                                 |   | 2,013,207               |   | YES          |   |
| Equipment                                                                                                     |   | Rhodia Inc.                                      |   | Variable Rate Demand  Pollution Control Revenue Refunding Bonds (Rhone-Poulenc Inc. Project) Series  1992 pf Butte-Silver Bow, State of Mont |   | 2,580,931               |   | YES          |   |
| Equipment                                                                                                     |   | Rhodia Inc.                                      |   | CA Pollution Control  Financing Authority, Pollution Control Revenue Bonds (Stauffer Chemical  Company Project) Series 1982                  |   | 3,543,244               |   | YES          |   |
| Cash                                                                                                          |   | Rhodia Inc.                                      |   | Variable Rate Demand  Pollution Control Revenue Refunding Bonds (Rhone-Poulenc Project) Series 1993  of Parish of Eash Baton Rouge, LA       |   | 3,325,817               |   | YES          |   |
| Cash  (securing fronting insurance policy exposure)                                                           |   | Rhodia Inc.                                      |   | Liberty Mutual  Insurance**                                                                                                                  |   | 805,283                 |   | NO           |   |
| Cash  (securing contractual real property improvement obligations—Madison, WI)                           |   | Rhodia Inc.                                      |   | City of Madison, WI                                                                                                                          |   | 181,994                 |   | NO           |   |
| Cash  (securing contractual environmental remediation obligations—Dominguez, CA)                         |   | Rhodia Inc.                                      |   | California State Lands  Commission                                                                                                           |   | 1,207,924               |   | NO           |   |
| Cash  (securing utility payment obligations)                                                                  |   | Rhodia Inc.                                      |   | So. California Edison                                                                                                                        |   | 147,367                 |   | NO           |   |
| Cash  (securing utility payment obligations)                                                                  |   | Rhodia Inc.                                      |   | Nashville Water Utility  Co.                                                                                                                 |   | 32,211                  |   | NO           |   |
| Cash  (securing lease performance obligations—Malvern, PA)                                               |   | Rhodia ChiRex America  Inc.                      |   | Fox Realty                                                                                                                                   |   | 31,809                  |   | NO           |   |
| Cash  (securing lease performance obligations—Boston, MA)                                                |   | Rhodia ChiRex America  Inc.                      |   | Pinnacle Properties                                                                                                                          |   | 31,406                  |   | NO           |   |
| Cash  (securing lease performance obligations—Winder, GA)                                                |   | Rhodia Inc.                                      |   | Garrard-Smith                                                                                                                                |   | 52,343                  |   | NO           |   |
| Cash  (securing lease performance obligations—Troy, NY)                                                  |   | Rhodia Inc.                                      |   | Rensselear Polytechnic  Institute                                                                                                            |   | 12,079                  |   | NO           |   |
| Cash  (securing lease performance obligations—Farmington Hills, MI)                                      |   | Rhodia Inc.                                      |   | Enco Properties L.C.                                                                                                                         |   | 8,376                   |   | NO           |   |
| Cash  (securing lease performance obligations—Houston, TX)                                               |   | Rhodia Inc.                                      |   | Eureka Hand Ltd.                                                                                                                             |   | 3,337                   |   | NO           |   |
| ***Total More than 50% owned Subsidiaries***                                                                  |   |                                             |   |                                                                                                                                         |   | **246,932,794**         |   |         |   |

 

***Relevant Entities (less than 50% owned)listed in Schedule 1***

 
| **Nature of the security interest**                  |   | **Entity / Entreprise**                   |   | **Beneficiary**                     |   | **Amount  (EUR)** |   | **Purpose*** |   |
|------------------------------------------------------|--------|-------------------------------------------|--------|-------------------------------------|--------|-------------------|--------|--------------|--------|
|                                                 |   |                                      |   |                                |   |              |   |         |   |
| Fixed  assets                                        |   | Liyang Rhodia Founder  Rare Earth Co. Ltd |   | Banques chinoises  (ICBC, ABC, UAC) |   | 19,370,908        |   | YES          |   |
|                                                 |   |                                      |   |                                |   |              |   |         |   |
| ***Total Relevant Entities (less than 50%  owned)*** |   |                                      |   |                                |   | **19,370,908**    |   |         |   |
| ***TOTAL***                                          |   |                                      |   |                                |   | **266,303,701**   |   |         |   |

 

----

*                                         YESif related to financial debt of Subsidiaries (more than 50% owned) or relevantEntities listed in Schedule 1

 

109

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**PART2**

 

**EXISTING INDEBTEDNESS**

 

**Important Note**

All amounts are as of29th February 2004,

based or F/X rates as of29th February 2004

(US$/€: 1.2418;

GBP/€ 0.6700; Yen/€:135.63)

 
| **Existing Facility**  |   | **Refinanced  Facilities** |   | **Lender** |   | **Borrowing Group**     |   | **Country** |   | **Exposure** |
|------------------------|--------|----------------------------|--------|------------|--------|-------------------------|--------|-------------|--------|--------------|
| **Bonds**              |   |                       |   |       |   |                    |   |        |   |         |
| EMTN 6.25% 2005        |   | No                         |   | n/m        |   | Rhodia SA               |   |        |   | 500.0        |
| EMTN 6.0% 2006         |   | No                         |   | n/m        |   | Rhodia SA               |   |        |   | 300.0        |
| High Yield 7.625% 2010 |   | No                         |   | n/m        |   | Rhodia SA               |   |        |   | 161.1        |
| High Yield 8.0% 2010   |   | No                         |   | n/m        |   | Rhodia SA               |   |        |   | 200.0        |
| High Yield 8.875% 2011 |   | No                         |   | n/m        |   | Rhodia SA               |   |        |   | 310.0        |
| High Yield 9.25% 2011  |   | No                         |   | n/m        |   | Rhodia SA               |   |        |   | 300.0        |
| Bond 1.2% 2011         |   | No                         |   | n/m        |   | Rhodia Inc              |   |        |   | 2.5          |
| Bond 1.2% 2016         |   | No                         |   | n/m        |   | Rhodia Inc              |   |        |   | 1.9          |
| Bond 6.25% 2008        |   | No                         |   | n/m        |   | Rhodia Inc              |   |        |   | 1.6          |
| Bond 7.9% 2012         |   | No                         |   | n/m        |   | Rhodia Inc              |   |        |   | 3.5          |
| US PP 9.0% 2009        |   | No                         |   | n/m        |   | Rhodia SA               |   |        |   | 86.6         |
| US PP 9.45% 2012       |   | No                         |   | n/m        |   | Rhodia SA               |   |        |   | 30.2         |
| Bond 2006              |   | No                         |   | n/m        |   | Rhodia Polyamide Polska |   |        |   | 25.0         |
| **Total**              |   |                       |   |       |   |                    |   |        |   | **1,922.5**  |
|                   |   |                       |   |       |   |                    |   |        |   |         |
| **Commercial  Paper**  |   |                       |   |       |   |                    |   |        |   |         |
| Commercial Paper       |   | No                         |   | n/m        |   | Rhodia SA               |   |        |   | 21.5         |
| **Total**              |   |                       |   |       |   |                    |   |        |   | **21.5**     |

 

110

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Any text that has beendeleted pursuant to Rhodia’s confidential treatment request is marked.  [***] herein and has been separatelysubmitted to the Securities and Exchange Commission.

 

[***]

 

[7 PAGES DELETED,INCLUDING THIS PAGE, AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTEDWITH RESPECT TO THE OMITTED PORTION OF THE SCHEDULE.]

 

111

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**SCHEDULE 8**

 

**FORM OF COMPLIANCE CERTIFICATE**

 

***[To be completed by Chief Financial Officer/Auditors and toinclude details of definitions and***

***computations of financial covenants]***

 
| To:    | [AGENT]                                                                                                                                |
|--------|----------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                   |
| From:  | [                      ] |
|   |                                                                                                                                   |
| Date:  | [                      ] |

 

 

Dear Sirs

 

**RHODIA – €757,721,918 CreditAgreement**

**dated [DATE], 2004 (**the**Agreement)**

 

I refer to the Agreementand in particular to Clause 20.1 (Financial covenant definitions), Clause 20.2(Ratio of Consolidated Net Indebtedness to Adjusted EBITDAR), Clause 20.3 (Ratioof EBITDAR to Net Financial Expenses), Clause 20.4 (Consolidated NetIndebtedness) and 20.5 (Restructuring Costs) thereof.

 

Terms defined in theAgreement shall have the same meaning when used in this certificate.

 

I certify as follows:

 

1.                                       Forthe Ratio Period ending on [  •  ]:

 

(a)                                  theBorrower’s EBITDAR was [            ];

 

(b)                                 theBorrower’s Adjusted EBITDAR was [           ];

 

(c)                                  theBorrower’s Consolidated Net Indebtedness was [            ]; and

 

(d)                                 theBorrower’s Net Financial Expenses were [            ].

 

Accordinglyfor the Ratio Period referred to above:

 

(i)                                     theratio of the Borrower’s EBITDAR to its Net Financial Expenses was: [            ];

 

(ii)                                  theratio of the Borrower’s Consolidated Net Indebtedness to Adjusted EBITDAR was:[            ].

 

2.                                       Sincethe date of the Original Business Plan the consolidated restructuring costs ofthe Group are [            ].Accordingly such restructuring costs do not exceed [115%/120%/130%] of therestructuring costs referred to in the Original Business Plan on [31stDecember, 2004/30th June, 2005/31st December, 2005].

 

112

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3.                                       Thefollowing table sets out the information in relation to Relevant Entities usedin the calculation of Adjusted EBITDAR referred to at paragraph 1(b):

 
| **Relevant Entity********and place of********incorporation /********establishment** |   | **Relevant Entity********EBITDAR** |   | **Borrower’s participation in the********capital of the Relevant Entity** |   | **Amount of********adjustment to********Borrower’s  EBITDAR for********Relevant Entity** |   |
|-------------------------------------------------------------------------------------|--------|------------------------------------|--------|--------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|
|                                                                                |   |                               |   |                                                                           |   |                                                                                          |   |
|                                                                                |   |                               |   |                                                                           |   |                                                                                          |   |
|                                                                                |   |                               |   |                                                                           |   |                                                                                          |   |

 

4.                                       Thefollowing components were used in the calculation of the Borrower’sConsolidated Net Indebtedness:

 

(a)                                  Grossdebt = [            ];

 

(b)                                 Cashposition = [            ];

 

(c)                                  Saleof receivables = [            ];

 

(d)                                 Securitisationoutstanding = [            ]; and

 

(e)                                  Leasing= [            ].

 

5.                                       Thefollowing components were used in the calculation of the Borrower’s NetFinancial Expenses:

 

Interest Expenseincluding interest portion of lease rentals = [            ]; and

 

Interest income =[            ].

 

----

Chief FinancialOfficer/Auditors

 

113

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**SCHEDULE 9**

 

**FORM OF ACCESSION AGREEMENT**

 
| To:   | [AGENT] as Facility  Agent                                                                                                                    |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------|
| From: | RHODIA and [Proposed  Borrower]                                                                                                               |
| Date: | [                        ] |

 

**RHODIA – €757,721,918 CreditAgreement**

**dated [DATE], 2004 (**the**Agreement)**

 

We refer to theAgreement. This is an Accession Agreement.

 

[Name of company] of[address/registered office] agrees to become an Additional Borrower and to bebound by the terms of the Agreement as an Additional Borrower.

 

This Accession Agreementis governed by English law.

 

 

RHODIA

 

 

By:

 

 

[PROPOSED BORROWER]

 

 

By:

 

114

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**SCHEDULE 10**

 

**FORM OF RESIGNATION REQUEST**

 
| To:   | [AGENT] as Facility  Agent                                                                                                                    |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------|
| From: | RHODIA and [relevant  Borrower]                                                                                                               |
| Date: | [                        ] |

 

**RHODIA – €757,721,918 CreditAgreement**

**dated [DATE], 2004**(the **Agreement**)

 

1.                                       Werefer to the Agreement. This is a Resignation Request.

 

2.                                       Werequest that [resigning Borrower] be released from its obligations as aBorrower under the Agreement.

 

3.                                       Weconfirm that no Default is outstanding or would result from the acceptance ofthis Resignation Request.

 

4.                                       Weconfirm that as at the date of this Resignation Request no amount owed by[resigning Borrower] under the Agreement is outstanding.

 

5.                                       ThisResignation Request is governed by English law.

 

 
| RHODIA | [Relevant Borrower] |
|--------|---------------------|
|   |                |
| By:    | By:                 |

 

 

The Facility Agentconfirms that this resignation takes effect on [                        ].

 

[AGENT]

 

By:

 

115

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**SCHEDULE 11**

 

**FORM OF *TAUX EFFECTIF GLOBAL* LETTER**

 

**[ON THE LETTERHEAD OF THE FACILITYAGENT]**

 
| From: | [AGENT] as Facility  Agent                                            |
|-------|-----------------------------------------------------------------------|
| To:   | RHODIA                                                                |
| Date: | [            ] |

 

 

Dear Sirs,

 

**RHODIA – €757,721,918 CreditAgreement**

**dated [DATE], 2004 (**the**Agreement)**

 

We refer to theAgreement. Terms defined in the Agreement shall bear the same meaning in thisletter unless otherwise defined in this letter.

 

This is the lettersetting out the applicable effective global rate (*taux effectif global*)referred to in the Agreement.

 

The applicable *tauxeffectif global*, calculated on the basis of a 365 day year, is:

 

(a)                                  Inrespect of the Medium-Term Facility:

 

(i)                                     fora Term of one month and at EURIBOR rate of [   ] per cent. per annum, [TEG rate to be inserted] per cent. (whichcorresponds to a *taux de période* of [Period rate to be inserted] per cent.for a *duréede période* of one month;

 

(ii)                                  fora Term of two months and at EURIBOR rate of [    ] per cent. per annum, [TEG rate to be inserted] per cent.(which corresponds to a *taux de période* of [Period rate to beinserted]% for a *durée de période* of two months; and

 

(iii)                               fora Term of three months and at EURIBOR rate of [    ] per cent. per annum, [TEG rate to be inserted]per cent.(which corresponds to a *taux de période* of [Period rate to beinserted] per cent. for a *durée de période* of three months.

 

(b)                                 Inrespect of the Short-Term Facility for a Term of one month and at EURIBOR rateof [    ] per cent. per annum, [TEG rateto be inserted] per cent. (which corresponds to a *taux de période* of [Periodrate to be inserted] per cent. for a *durée de période* of one month).

 

The above rates:

 

(a)                                  aregiven in order to comply with the provisions of article L.313-1 *et seq.*of the French Code de la Consommation and on an indicative basis and forinformation only;

 

(b)                                 arecalculated on the basis that:

 

(i)                                     drawdownfor the full amount of the Facility has been made by way of Loans in euro on[DATE];

 

(ii)                                  theEURIBOR rate, expressed as an annual rate, is as fixed on [DATE];

 

(iii)                               theMargin is the maximum applicable; and

 

(c)                                  takeinto account the various fees, costs and expenses payable by you under theAgreement.

 

116

----

 

This letter is designateda Finance Document.

 

Please confirm youracceptance of the terms of this letter by signing and returning to us theenclosed copy.

 

Yours faithfully,

 
|                   |   |
|------------------------|--------|
| [AGENT]                |   |
| as Facility Agent      |   |
|                   |   |
|                   |   |
| We agree to the above. |   |
|                   |   |
|                   |   |
| RHODIA                 |   |

 

117

----

 

**SCHEDULE 12**

 

**ERISA EVENTS’**

 

For the purpose of thisAgreement, an **ERISA Event** means:

 

(a)                                  (i)the occurrence of a reportable event, within the meaning of Section 4043of ERISA, with respect to any Plan unless the 30-day notice requirement withrespect to such event has been waived by the PBGC or

 

(ii)                                  therequirements of Section 4043(b) of ERISA apply with respect to acontributing sponsor, as defined in Section 4001(a)(13) of ERISA, of aPlan, and an event described in paragraph (9), (10), (11), (12) or (13) ofSection 4043(c) of ERISA is reasonably expected to occur with respect tosuch Plan within the following 30 days;

 

(b)                                 theapplication pursuant to Section 412(d) of the Code or Section 303 ofERISA for a minimum funding waiver with respect to a Plan;

 

(c)                                  theprovision by the administrator of any Plan of a notice of intent to terminatesuch Plan, pursuant to Section 4041(a)(2) of ERISA (including any suchnotice with respect to a plan amendment referred to in Section 4041(e) ofERISA);

 

(d)                                 thecessation of operations at a facility of any Obligor or any ERISA Affiliate inthe circumstances described in Section 4062(e) of ERISA;

 

(e)                                  thewithdrawal by any Obligor or any ERISA Affiliate from a Multiemployer Planduring a plan year for which it was a substantial employer, as defined inSection 4001(a)(2) of ERISA;

 

(f)                                    theimposition of a lien under Section 302(f) of ERISA with respect to anyPlan;

 

(g)                                 theadoption of an amendment to a Plan requiring the provision of security to suchPlan pursuant to Section 307 of ERISA; or

 

(h)                                 theinstitution by the PBGC of proceedings to terminate a Plan pursuant toSection 4042 of ERISA, or the occurrence of any event or conditiondescribed in Section 4042 of ERISA that constitutes grounds for thetermination of, or the appointment of a trustee to administer, such Plan,provided, however, that the occurrence of the event or condition described inSection 4042(a)(4) of ERISA shall be an ERISA Event only if the PBGC hasnotified any Obligor or ERISA Affiliate that it intends to instituteproceedings to terminate a Plan pursuant to such subsection.

 

118

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**SCHEDULE 13**

 

**INTRA-GROUP LOANS**

 

**PART1**

 

**INTERCOMPANY LOANS / BORROWINGSBETWEEN RHODIA S.A. AND ITS SUBSIDIARIES**

 
| **Transaction**     |   | **Consolidation********method** |   | **subsidiary**                       |   | **drawdown** |   | **Maturity** |   | **Interest********Rate** |   | **Nominal********Amount** |   | **Currency** |   | **Closing********Price** |   | **Closing********Amount** |   |
|---------------------|--------|---------------------------------|--------|--------------------------------------|--------|--------------|--------|--------------|--------|--------------------------|--------|---------------------------|--------|--------------|--------|--------------------------|--------|---------------------------|--------|
| Subsidiary Borrower |   | Fully  Consolidated             |   | GESMO                                |   | 18/12/03     |   | 18/03/04     |   | 3                        |   | 5,402,888.07              |   | CHF          |   | 1.57800                  |   | 3,423,883.44              |   |
| Subsidiary Borrower |   | Equity  Method                  |   | NYLSTAR  NV                          |   | 29/12/03     |   | 29/03/04     |   | 3.142                    |   | 19,609,408.31             |   | EUR          |   | 1.00000                  |   | 19,609,408.31             |   |
| Subsidiary Borrower |   | Equity  Method                  |   | NYLSTAR  NV                          |   | 12/01/04     |   | 29/03/04     |   | 3.10025                  |   | 2,500,000.00              |   | EUR          |   | 1.00000                  |   | 2,500,000.00              |   |
| Subsidiary Borrower |   | Equity  Method                  |   | NYLSTAR  NV                          |   | 20/01/04     |   | 29/03/04     |   | 3.077                    |   | 2,500,000.00              |   | EUR          |   | 1.00000                  |   | 2,500,000.00              |   |
| Subsidiary Borrower |   | Non  Consolidated               |   | RHODIA  ARGENTINA S.A.               |   | 31/12/03     |   | 15/03/04     |   | 1.66813                  |   | 1,263,509.18              |   | USD          |   | 1.24180                  |   | 1,017,482.03              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  ASIA PACIFIC PTE, LTD        |   | 19/12/03     |   | 01/07/04     |   | 2.1959                   |   | 5,000,000.00              |   | SGD          |   | 2.11100                  |   | 2,368,545.71              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CANADA INC                   |   | 27/02/04     |   | 31/03/04     |   | 4.53667                  |   | 20,278,400.00             |   | CAD          |   | 1.67580                  |   | 12,100,728.01             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CANADA INC                   |   | 27/02/04     |   | 31/03/04     |   | 3.29625                  |   | 11,000,000.00             |   | USD          |   | 1.24180                  |   | 8,858,109.20              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CHEMIE NV                    |   | 20/02/04     |   | 22/03/04     |   | 5.103                    |   | 3,625,000.00              |   | EUR          |   | 1.00000                  |   | 3,625,000.00              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CHEMIE NV                    |   | 27/02/04     |   | 22/03/04     |   | 5.12                     |   | 880,000.00                |   | EUR          |   | 1.00000                  |   | 880,000.00                |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CHEMIE NV                    |   | 25/02/04     |   | 22/03/04     |   | 5.115                    |   | 240,000.00                |   | EUR          |   | 1.00000                  |   | 240,000.00                |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CHEMIE NV                    |   | 27/02/04     |   | 30/06/04     |   | 5.123                    |   | 18,100,000.00             |   | EUR          |   | 1.00000                  |   | 18,100,000.00             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CHINA                        |   | 10/11/03     |   | 20/05/04     |   | 2.55                     |   | 1,100,000.00              |   | USD          |   | 1.24180                  |   | 885,810.92                |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CHIREX HOLDINGS LTD          |   | 03/09/01     |   | 04/01/05     |   | 5.63                     |   | 21,653,612.00             |   | GBP          |   | 0.67000                  |   | 32,318,823.88             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CHIREX HOLDINGS LTD          |   | 03/09/01     |   | 03/01/06     |   | 6.25                     |   | 19,988,725.38             |   | GBP          |   | 0.67000                  |   | 29,833,918.48             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  CHIREX HOLDINGS LTD          |   | 03/09/01     |   | 03/01/07     |   | 6.28                     |   | 18,784,593.91             |   | GBP          |   | 0.67000                  |   | 28,036,707.33             |   |
| Subsidiary Borrower |   | Non  Consolidated               |   | RHODIA  CONSOMER SPEC. BV            |   | 30/01/04     |   | 30/04/04     |   | 5.122                    |   | 589,164.82                |   | EUR          |   | 1.00000                  |   | 589,164.82                |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  DE MEXICO                    |   | 31/12/03     |   | 19/03/04     |   | 1.67                     |   | 20,421,429.42             |   | USD          |   | 1.24180                  |   | 16,445,022.89             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  DEUTSCHLAND GMBH             |   | 27/02/04     |   | 04/03/04     |   | 3.05                     |   | 5,000,000.00              |   | EUR          |   | 1.00000                  |   | 5,000,000.00              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  DEUTSCHLAND GMBH             |   | 30/01/04     |   | 30/07/04     |   | 4.22                     |   | 6,430,013.08              |   | USD          |   | 1.24180                  |   | 5,177,978.00              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  ECO SERVICES NEDERLAND B.V   |   | 20/02/04     |   | 22/03/04     |   | 5.103                    |   | 4,748,700.63              |   | EUR          |   | 1.00000                  |   | 4,748,700.63              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  ENERGY SAS                   |   | 06/02/04     |   | 05/03/04     |   | 5.117                    |   | 3,404,758.71              |   | EUR          |   | 1.00000                  |   | 3,404,758.71              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  ENGINEERING PLASTICS CO, LTD |   | 18/12/03     |   | 18/03/04     |   | 2.67                     |   | 2,024,613.74              |   | USD          |   | 1.24180                  |   | 1,630,386.33              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  ENGINEERING PLASTICS CO, LTD |   | 30/01/04     |   | 31/03/04     |   | 2.6                      |   | 1,006,797.82              |   | USD          |   | 1.24180                  |   | 810,756.82                |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  ENGINEERING PLASTICS CO, LTD |   | 18/12/03     |   | 01/07/04     |   | 2.75                     |   | 1,500,000.00              |   | USD          |   | 1.24180                  |   | 1,207,923.98              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  ENGINEERING PLASTICS NV      |   | 07/11/03     |   | 08/11/04     |   | 8.5                      |   | 15,500,000.00             |   | EUR          |   | 1.00000                  |   | 15,500,000.00             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  ESPECIALIDADOS               |   | 31/12/03     |   | 19/03/04     |   | 1.67                     |   | 2,653,509.78              |   | USD          |   | 1.24180                  |   | 2,136,825.40              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  FINANCE INTL                 |   | 26/02/04     |   | 30/03/04     |   | 5.105                    |   | 78,760,614.37             |   | EUR          |   | 1.00000                  |   | 78,760,614.37             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  FOSFATADOS DE MEXICO         |   | 31/12/03     |   | 19/03/04     |   | 1.67                     |   | 35,195,577.06             |   | USD          |   | 1.24180                  |   | 28,342,387.71             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  FOSFATADOS DE MEXICO         |   | 31/12/03     |   | 19/03/04     |   | 1.67                     |   | 44,720,199.52             |   | USD          |   | 1.24180                  |   | 36,012,400.97             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  HOLDING LIMITED              |   | 03/09/01     |   | 03/01/06     |   | 6.25                     |   | 53,815,799.10             |   | GBP          |   | 0.67000                  |   | 80,322,088.21             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  HOLDING LIMITED              |   | 03/09/01     |   | 03/01/07     |   | 6.28                     |   | 50,573,906.67             |   | GBP          |   | 0.67000                  |   | 75,483,442.79             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  HOLDING LIMITED              |   | 03/09/01     |   | 03/01/08     |   | 6.3                      |   | 47,528,828.10             |   | GBP          |   | 0.67000                  |   | 70,938,549.40             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  HOLDING LIMITED              |   | 02/01/02     |   | 05/01/09     |   | 6.295                    |   | 62,438,838.28             |   | GBP          |   | 0.67000                  |   | 93,192,295.94             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  HOLDING LIMITED              |   | 02/01/02     |   | 04/01/10     |   | 6.301                    |   | 58,724,352.50             |   | GBP          |   | 0.67000                  |   | 87,648,287.31             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  IBERIA                       |   | 27/02/04     |   | 30/03/04     |   | 5.10438                  |   | 6,300,643.43              |   | EUR          |   | 1.00000                  |   | 6,300,643.43              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  IBERIA                       |   | 29/12/03     |   | 20/12/04     |   | 3.627                    |   | 50,900,000.00             |   | EUR          |   | 1.00000                  |   | 50,900,000.00             |   |
| Subsidiary Borrower |   | Non  Consolidated               |   | RHODIA  INDONESIA                    |   | 18/12/03     |   | 01/07/04     |   | 2.55                     |   | 500,000.00                |   | USD          |   | 1.24180                  |   | 402,641.33                |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  INDUSTRIAL YARNS AG          |   | 27/02/04     |   | 22/03/04     |   | 3.28                     |   | 13,380,087.69             |   | CHF          |   | 1.57800                  |   | 8,479,143.02              |   |

 

119

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| **Transaction**     |   | **Consolidation********method** |   | **subsidiary**                                  |   | **drawdown** |   | **Maturity** |   | **Interest********Rate** |   | **Nominal********Amount** |   | **Currency** |   | **Closing********Price** |   | **Closing********Amount** |   |
|---------------------|--------|---------------------------------|--------|-------------------------------------------------|--------|--------------|--------|--------------|--------|--------------------------|--------|---------------------------|--------|--------------|--------|--------------------------|--------|---------------------------|--------|
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  INDUSTRIAL YARNS SLOVAKIA A.S.     |   | 27/02/04     |   | 31/03/04     |   | 5.105                    |   | 3,659,755.00              |   | EUR          |   | 1.00000                  |   | 3,659,755.00              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  JAPAN LTD                               |   | 07/01/04     |   | 31/03/04     |   | 3.145                    |   | 2,906,690,746             |   | JPY          |   | 135.63000                |   | 21,431,031.08             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  JAPAN LTD                               |   | 19/12/03     |   | 01/07/04     |   | 1.4                      |   | 1,000,000,000             |   | JPY          |   | 135.63000                |   | 7,373,000.07              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  MEXICANA SA                             |   | 31/12/03     |   | 19/03/04     |   | 1.67                     |   | 71,354,352.25             |   | USD          |   | 1.24180                  |   | 57,460,422.17             |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  NEDERLAND                               |   | 20/02/04     |   | 22/03/04     |   | 5.103                    |   | 1,455,181.73              |   | EUR          |   | 1.00000                  |   | 1,455,181.73              |   |
| Subsidiary Borrower |   | Fully  Consolidated             |   | RHODIA  PARTICITIONS                            |   | 29/10/03     |   | 30/04/04     |   | 3.508                    |   | 62,252,844.16             |   | EUR          |   | 1.00000                  |   | 62,252,844.16             |   |
| Subsidiary Borrower |   | Non  Consolidated               |   | RHODIA  URUGUAY                                 |   | 04/12/03     |   | 04/03/04     |   | 2.48                     |   | 768,629.27                |   | USD          |   | 1.24180                  |   | 618,963.82                |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | ALAVER                                          |   | 22/12/03     |   | 21/06/04     |   | 1.7125                   |   | 8,137,077.24              |   | USD          |   | 1.24180                  |   | 6,552,647.16              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | ALBRIGHT  & WILSON CHEMICALS PTY LTD   |   | 20/02/04     |   | 22/03/04     |   | 5.285                    |   | 14,820,527.30             |   | AUD          |   | 1.61590                  |   | 9,171,685.93              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | PARTICIPATION  ET DE GESTION                    |   | 27/02/04     |   | 31/03/04     |   | 0.0000001                |   | 30,924,229.64             |   | CHF          |   | 1.57800                  |   | 19,597,103.70             |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | PARTICIPATIONS  CHIMIQUES C/O SEFIGE            |   | 29/12/03     |   | 30/03/04     |   | 1.045                    |   | 462,954.68                |   | USD          |   | 1.24180                  |   | 372,809.37                |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  CAPITAL MARKET—GENEVE              |   | 20/01/04     |   | 22/03/04     |   | 0.115                    |   | 600,357.37                |   | CHF          |   | 1.57800                  |   | 380,454.61                |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  CHEM ITALIA S.P.A.                      |   | 27/02/04     |   | 31/03/04     |   | 3.555                    |   | 55,500,000.00             |   | EUR          |   | 1.00000                  |   | 55,500,000.00             |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  CHEM ITALIA S.P.A.                      |   | 12/02/04     |   | 31/03/04     |   | 3.563                    |   | 1,231,279.87              |   | EUR          |   | 1.00000                  |   | 1,231,279.87              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  CHIMIE                                  |   | 02/12/03     |   | 03/03/04     |   | 2.029                    |   | 91,170,904.99             |   | EUR          |   | 1.00000                  |   | 91,170,904.99             |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  CHIMIE                                  |   | 09/10/03     |   | 07/10/04     |   | 2                        |   | 185,000,000.00            |   | EUR          |   | 1.00000                  |   | 185,000,000.00            |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  ENGINEERING PLASTICS NV                 |   | 04/02/04     |   | 04/03/04     |   | 1.947                    |   | 13,216,303.62             |   | EUR          |   | 1.00000                  |   | 13,216,303.62             |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | Rhodia  Finance                                 |   | 29/12/03     |   | 29/06/04     |   | 1.882                    |   | 90,356,900.10             |   | EUR          |   | 1.00000                  |   | 90,356,900.10             |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  HOLDING LIMITED                         |   | 02/01/04     |   | 31/03/04     |   | 9.26445                  |   | 228,719,050.73            |   | GBP          |   | 0.67000                  |   | 341,371,717.51            |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  HPCII ESPAGNE                           |   | 27/02/04     |   | 30/03/04     |   | 1.928                    |   | 2,711,714.75              |   | EUR          |   | 1.00000                  |   | 2,711,714.75              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  IBERLATEX ESPANA                        |   | 27/02/04     |   | 30/03/04     |   | 1.928                    |   | 6,374,820.32              |   | EUR          |   | 1.00000                  |   | 6,374,820.32              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  IND. YARNS DAUGAVPILS                   |   | 13/02/04     |   | 12/03/04     |   | 3.185                    |   | 3,436,274.74              |   | LVL          |   | 0.66480                  |   | 5,168,884.99              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  INDUSTRIAL YARNS AG                     |   | 26/02/04     |   | 03/03/04     |   | 0.105                    |   | 15,000,000.00             |   | CHF          |   | 1.57800                  |   | 9,505,703.42              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  INDUSTRIAL YARNS AG                     |   | 27/02/04     |   | 11/03/04     |   | 0.09                     |   | 2,000,000.00              |   | CHF          |   | 1.57800                  |   | 1,267,427.12              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  INDUSTRIAL YARNS AG                     |   | 20/02/04     |   | 22/03/04     |   | 0.125                    |   | 359,908.49                |   | CHF          |   | 1.57800                  |   | 228,078.89                |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  INDUSTRIAL YARNS AG                     |   | 27/02/04     |   | 22/03/04     |   | 0.11333                  |   | 1,331,960.00              |   | CHF          |   | 1.57800                  |   | 844,081.12                |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  INTL HOLDINGS BV                        |   | 15/01/04     |   | 15/03/04     |   | 1.966                    |   | 20,865,014.43             |   | EUR          |   | 1.00000                  |   | 20,865,014.43             |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  INTL HOLDINGS BV                        |   | 14/01/04     |   | 15/03/04     |   | 1.964                    |   | 1,950,000.00              |   | EUR          |   | 1.00000                  |   | 1,950,000.00              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  LIMITED                                 |   | 20/02/04     |   | 22/03/04     |   | 9.35563                  |   | 10,601,510.13             |   | GBP          |   | 0.67000                  |   | 15,823,149.45             |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  LIMITED                                 |   | 23/02/04     |   | 22/03/04     |   | 9.35563                  |   | 1,822,432.63              |   | GBP          |   | 0.67000                  |   | 2,720,048.70              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  PARTICITIONS                            |   | 27/02/04     |   | 29/03/04     |   | 1.23                     |   | 13,280,067.69             |   | CHF          |   | 1.57800                  |   | 8,415,758.99              |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  PERFORMANCE FIBRES GMBH                 |   | 27/02/04     |   | 31/03/04     |   | 0.965                    |   | 267,259.21                |   | USD          |   | 1.24180                  |   | 215,219.21                |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  PERFORMANCE FIBRES GMBH                 |   | 27/02/04     |   | 31/03/04     |   | 2.22                     |   | 468,218.82                |   | CAD          |   | 1.67580                  |   | 279,400.18                |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  POLIAMIDA & ESPECIALIDADOS LTD |   | 19/12/03     |   | 06/07/04     |   | 4.24                     |   | 50,000,000.00             |   | USD          |   | 1.24180                  |   | 40,264,132.71             |   |
| Subsidiary Lender   |   | Fully  Consolidated             |   | RHODIA  SILICONAS ESPANA SA                     |   | 27/02/04     |   | 30/03/04     |   | 1.928                    |   | 7,318,415.06              |   | EUR          |   | 1.00000                  |   | 7,318,415.06              |   |

 

120

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**PART2**

 

**INTERCOMPANY LOANS/BORROWINGS BETWEENTHE RHODIA SUBSIDIARIES**

 
| **Lending entity**                  |   | **Borrowing entity**                       |   | **Amount (KEUR)** |   |
|-------------------------------------|--------|--------------------------------------------|--------|-------------------|--------|
| Rhodia  Holdings Ltd                |   | Rhodia Consumer  Specialties Ltd           |   | 187,687           |   |
| Rhodia  Finances                    |   | Rhodia Inc.                                |   | 169,109           |   |
| Rhodia  Inc.                        |   | Rhodia Holding Inc.                        |   | 152,591           |   |
| Rhodia  Ltd                         |   | Rhodia Holdings Ltd                        |   | 139,730           |   |
| Rhodia  Holdings Ltd                |   | Rhodia Overseas Ltd                        |   | 137,101           |   |
| Rhodia  Consumer Specialties Ltd    |   | Rhodia Ltd                                 |   | 93,490            |   |
| Rhodia  Ltd                         |   | Rhodia Pharma Solutions  Holdings Ltd.     |   | 74,627            |   |
| Rhodia  International Holdings Ltd  |   | Rhodia Overseas Ltd                        |   | 57,761            |   |
| Rhodia  International Holdings Ltd  |   | Rhodia Holdings Ltd                        |   | 44,312            |   |
| Rhodia  Financial Services Inc.     |   | Rhodia Inc.                                |   | 37,212            |   |
| Rhodia  Industrial Specialties Ltd  |   | Rhodia Holdings Ltd                        |   | 27,749            |   |
| Rhodia  Ltd                         |   | Rhodia Organique Fine  Ltd                 |   | 22,836            |   |
| Rhodia  Inc.                        |   | Rhodia Pharma Solutions  Inc.              |   | 20,100            |   |
| Rhodia  Reorganisation Ltd          |   | Rhodia Holdings Ltd                        |   | 17,060            |   |
| Rhodia  Japan                       |   | Anan Kasei Co Ltd                          |   | 16,752            |   |
| Rhodia  Acetow GmbH                 |   | Alexil                                     |   | 13,433            |   |
| Rhodia  Benelux                     |   | Rhodia Finance  International BV           |   | 13,059            |   |
| Rhodia  de Mexico SA de CV          |   | Rhodia Especialidades                      |   | 10,874            |   |
| Meyhall  AG                         |   | Rhodia Participations                      |   | 8,479             |   |
| Rhodia  Financial Services Inc.     |   | RCSL Phosphate UK                          |   | 5,217             |   |
| Rhodia  Deutschland GmbH            |   | Rhodia Acetow GmbH                         |   | 5,178             |   |
| Rhodia  Iberia SA                   |   | Rhodia HPCII—Espagne                  |   | 4,950             |   |
| Rhodia  Financial Services Inc.     |   | Rhodia Engineering  Plastics Corp—USA |   | 4,832             |   |
| Rhodia  Inc.                        |   | Rhodia Electronics  & Catalysis Inc.   |   | 3,313             |   |
| Rhodia  China Co Ltd                |   | Beijing RP Eastern  Chemical Ltd           |   | 3,102             |   |
| Rhodia  de Mexico SA de CV          |   | Rhodia Mexicana SA de  CV                  |   | 2,948             |   |
| Rhodia  Trading Australia           |   | Rhodia Australia Pty                       |   | 2,732             |   |
| Rhodia  China Co Ltd                |   | Rhodia Wuxi  Pharmaceutical Co Ltd         |   | 2,598             |   |
| Rhodia  Consumer Specialties Ltd    |   | Rhodia Eco Services Ltd                    |   | 2,239             |   |
| Rhodia  Brésil                 |   | Rhodia Poliamida Brasil                    |   | 2,176             |   |
| Rhodia  Finance International BV    |   | Rhodia Benelux                             |   | 1,950             |   |
| Rhodia  Silicones Shangai Co Ltd    |   | Rhodia China Co Ltd                        |   | 1,940             |   |
| Rhodia  Polyamide Intermediates     |   | Rhodia Recherches                          |   | 1,848             |   |
| Rhodia  International Holdings Ltd  |   | A&W Thai Holding                       |   | 1,806             |   |
| Conuben  SL                         |   | Rhodia Iberia SA                           |   | 1,800             |   |
| Rhodia  Silicones Australia Pty Ltd |   | Rhodia Australia Pty                       |   | 1,660             |   |
| Rhodia  Organique                   |   | Rhodia Recherches                          |   | 1,569             |   |
| Rhodia  Servicios SA de CV          |   | Rhodia de Mexico SA de  CV                 |   | 1,528             |   |

 

121

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| **Lending entity**                  |   | **Borrowing entity**                       |   | **Amount (KEUR)** |   |
|-------------------------------------|--------|--------------------------------------------|--------|-------------------|--------|
| Rhodia  Fosfatados SA de CV         |   | Rhodia Servicios SA de  CV                 |   | 1,449             |   |
| Rhodia  Especialidades              |   | Rhodia Fosfatados SA de  CV                |   | 1,309             |   |
| Rhodia  Mexicana SA de CV           |   | Rhodia Servicios SA de  CV                 |   | 1,262             |   |
| Rhodia  Hengchang Spec Chem         |   | Rhodia China Co Ltd                        |   | 1,211             |   |
| Rhodia  China Co Ltd                |   | Baotou Rhodia Rare  Earths Co., Ltd        |   | 1,129             |   |
| Rhodia  Silicones                   |   | Rhodia Recherches                          |   | 1,119             |   |
| Rhodia  Siliconas España       |   | Rhodia Iberia SA                           |   | 1,000             |   |
| Rhodia  Food SAS                    |   | Rhodia Recherches                          |   | 883               |   |
| Rhodia  Silicones                   |   | GIE Osiris                                 |   | 797               |   |
| Rhodia  Japan                       |   | Rhodia Nicca                               |   | 707               |   |
| Rhodia  Poliamida Ltda              |   | Rhodia Brésil                         |   | 706               |   |
| A&W  Chemicals Australia        |   | Rhodia Australia Pty                       |   | 619               |   |
| Rhodia  Iberia SA                   |   | Rhodia Iberlatex                           |   | 600               |   |
| Rhodia  China Co Ltd                |   | Rhodia Silica Qingdao                      |   | 586               |   |
| Rhodia  Acetow Venezuela SA         |   | Rhodia Silices de  Venezuela C.A.          |   | 583               |   |
| Rhodia  Brésil                 |   | Alexil                                     |   | 461               |   |
| Rhodia  Especialidades              |   | Rhodia Mexicana SA de  CV                  |   | 429               |   |
| Rhodia  PPMC SAS                    |   | Rhodia Recherches                          |   | 406               |   |
| Rhodia  Reorganisation Ltd          |   | Rhodia Consumer  Specialties Ltd           |   | 382               |   |
| Rhodia  International Holdings Ltd  |   | Rhodia Consumer  Specialties Ltd           |   | 318               |   |
| Rhodia  China Co Ltd                |   | Rhodia Shangai  International Trading      |   | 312               |   |
| Rhodia  Electronics & Catalysis |   | Rhodia Recherches                          |   | 197               |   |
| Rhodia  China Co Ltd                |   | Ruohai Fine Chemicals  Co Ltd              |   | 195               |   |
| Rhodia  Fosfatados SA de CV         |   | Rhodia Mexicana SA de  CV                  |   | 191               |   |
| Rhodia  Organique                   |   | Rhodia Food SAS                            |   | 186               |   |
| A&W  Asia Pacific Holding       |   | Rhodia Asia Pacific Pte  Ltd               |   | 162               |   |
| Rhodia  HPCII                       |   | Rhodia Recherches                          |   | 156               |   |
| Rhodia  Intermédiaires         |   | Rhodia Silicones                           |   | 150               |   |
| Rhodia  China Co Ltd                |   | Rhodia Specialty  Chemicals Wuxi           |   | 146               |   |
| Rhodia  Eco Services                |   | Rhodia Recherches                          |   | 145               |   |
| Rhodia  Fosfatados SA de CV         |   | Rhodia de Mexico SA de  CV                 |   | 100               |   |
| Rhodia  Especialidades              |   | Rhodia Servicios SA de  CV                 |   | 92                |   |
| Rhodia  Inc.                        |   | Rhodia Engineering  Plastics Corp—USA |   | 60                |   |
| Rhodia  Fosfatados SA de CV         |   | Rhodia TGI SA de CV                        |   | 47                |   |
| Rhodia  Poliamida Ltda              |   | Rhodia Poliamida Brasil                    |   | 44                |   |
| Rhodia  Brésil                 |   | Rhodia Poliamida Ltda                      |   | 34                |   |
| Rhodia  P.I. Chalampé          |   | Rhodia Recherches                          |   | 25                |   |
| Rhodia  Performances Fibres SAS     |   | Rhodia Recherches                          |   | 24                |   |
| Rhodia  P.I. Belle Etoile           |   | Rhodia Recherches                          |   | 8                 |   |
| Rhodia  Mexicana SA de CV           |   | Rhodia TGI SA de CV                        |   | 3                 |   |

 

122

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Any text that has been deleted pursuant to Rhodia’sconfidential treatment request is marked [“***”] herein and has been separatelysubmitted with the U.S. Securities and Exchange Commission.

 

**SCHEDULE 14****BUSINESS PLAN INCLUDING LIQUIDITY ANALYSISPART 1RHODIA BUSINESS PLAN AFTER DISPOSALS**

 

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Any text that has been deleted pursuant to Rhodia’sconfidential treatment request is marked [“***”] herein and has been separatelysubmitted with the U.S. Securities and Exchange Commission.

 

**PART 2****LIQUIDITY ANALYSIS**

 

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[2 PAGES DELETED,INCLUDING THIS PAGE, AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTEDWITH RESPECT TO THE OMITTED SCHEDULE.]

 

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**SCHEDULE 15**

 

**SUPPLEMENTAL SECURED ASSETS**

 
| **Type of security** |   | **Grantor of Security** |                                                         | **Company whose shares are pledged** |                                                                                                                   | **Beneficiary** |        | **Governing Law** |
|----------------------|--------|-------------------------|--------------------------------------------------------------|--------------------------------------|------------------------------------------------------------------------------------------------------------------------|-----------------|-------------|-------------------|
| Share Pledges(8)     |   | 1.                      | Rhodia Germany  International GmbH / Rhodia Deutschland GmbH |                                 | 85% of Rhodia Acetow  GmbH(9)                                                                                          |            | Rhodia SA   |              | German |
|                 |   | 2.                      | Rhodia SA                                                    |                                 | 99.99% of Rhodia Brazil  Ltda (RBL)                                                                                    |            | Banks       |              | Brazil |
|                 |   | 3.                      | Rhodia Participations  SNC                                   |                                 | 99.92% of Rhodia PPMC  SAS                                                                                             |            | Rhodia SA   |              | French |
|                 |   | 4.                      | Rhodia Participations  SNC                                   |                                 | 95.96% of Rhodia  Electronics & Catalysis SAS                                                                      |            | Rhodia SA   |              | French |
|                 |   | 5.                      | Rhodia Participations  SNC                                   |                                 | 74.3% of Rhodia  Nederland                                                                                             |            | Rhodia SA   |              | Dutch |
|                 |   | 6.                      | Rhodia Participations  SNC                                   |                                 | 60% of Rhodia Henchang  Zhanjiagang                                                                                    |            | Rhodia SA   |              | Chinese |
|                 |   | 7.                      | Rhodianyl SNC                                                |                                 | 83.7% of Rhodia PI  Chalampe SAS                                                                                       |            | Rhodia SA   |              | French |
|                 |   | 8.                      | Rhodia PI Belle Etoile  SAS                                  |                                 | 16.3% of Rhodia PI  Chalampe SAS                                                                                       |            | Rhodia SA   |              | French |
|                 |   | 9.                      | Rhodianyl SNC                                                |                                 | 49.6% of Rhodia  Poliamida Especialidades Ltda                                                                         |            | Rhodia SA   |              | Brazil |
|                 |   | 10.                     | Rhodia Brazil Ltda                                           |                                 | 42.4% of Rhodia  Poliamida Especialidades Ltda                                                                         |            | Rhodia SA   |              | Brazil |
|                 |   | 11.                     | Rhodia Acetol SAS                                            |                                 | 7.2% of Rhodia  Poliamida Especialidades Ltda                                                                          |            | Rhodia SA   |              | Brazil |
|                 |   | 12.                     | Rhodia SA                                                    |                                 | 100% of Rhodia  Deutschland GmbH                                                                                       |            | Banks       |              | German |
|                 |   | 13.                     | Rhodia SA                                                    |                                 | 89% of Rhodia Holding  Inc.                                                                                            |            | Banks       |              | US |
|                 |   | 14.                     | Rhodia Iberia                                                |                                 | 11% of Rhodia Holding  Inc.                                                                                            |            | Rhodia SA   |              | US |
|                 |   | 15.                     | Rhodia SA                                                    |                                 | 100% of Rhodia Iberia                                                                                                  |            | Banks       |              | Spanish |
|                 |   | 16.                     | Rhodia SA                                                    |                                 | 100% of Rhodia China                                                                                                   |            | Banks       |              | Chinese |
|                 |   | 17.                     | Rhodia SA                                                    |                                 | 100% of Rhodia Mexico                                                                                                  |            | Banks       |              | Mexican |
|                 |   | 18.                     | Rhodia SA                                                    |                                 | 100% of Rhodia Chimie  SAS                                                                                             |            | Banks       |              | French |
|                 |   | 19.                     | Rhodia SA                                                    |                                 | 100% of Rhodia Acetol  SAS                                                                                             |            | Banks       |              | French |
|                 |   | 20.                     | Rhodia SA                                                    |                                 | 99% of Rhodia Chemie NV  (remaining share owned by Rhodia Eco Services)                                                |            | Banks       |              | Belgian |
|                 |   | 21.                     | Rhodia SA                                                    |                                 | 57.6% of Rhodia  Industrial Yarns AG (remaining shares owned by Société de Participations et  de Gestion SA) |            | Banks       |              | Swiss |
|                 |   | 22.                     | Rhodia SA                                                    |                                 | 100% of Rhodia  Silicones Australia                                                                                    |            | Banks       |              | Australian |
|                 |   | 23.                     | Rhodia SA                                                    |                                 | 100% of Rhodia Trading  Australia                                                                                      |            | Banks       |              | Australian |
|                 |   | 24.                     | Rhodia SA                                                    |                                 | 52.25% of Rhodia  Polyamides Co Ltd (remaining shares owned by Banks Rhodianyl SNC)                                    |            | Korean      |              |   |
|                 |   | 25.                     | Rhodia SA                                                    |                                 | 100% of Rhodia Silica  Korea                                                                                           |            | Banks       |              | Korean |
|                 |   | 26.                     | Rhodia Participations  SNC                                   |                                 | 100% of Rhodia Energy  SAS                                                                                             |            | Rhodia S.A. |              | French |
|                 |   | 27.                     | Rhodia Participations  SNC                                   |                                 | 100% of Rhodia Services  SAS                                                                                           |            | Rhodia S.A. |              | French |
|                 |   | 28.                     | Rhodianyl SNC                                                |                                 | 50% of Butachimie SNC                                                                                                  |            | Rhodia S.A. |              | French |

 

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(8)                                  Pursuantto a declaration of Rhodia SA, the considered security package covers more than95% of the EBITDA and Total Net Assets of the Group

(9)                                  Pledgeover shares of Rhodia Acetow is to be granted by either RGI or RhodiaDeutschland GmbH after 15/04/04 depending on the merger between RGI and RDG

 

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**SUPPLEMENTALSECURED ASSETS**

 
| **PART I—Intercompany loans subject to security  document(10)** |
|----------------------------------------------------------------------|
|                                                                 |   |   |
| **Lender under the Intercompany loans**                              |   | **Borrower under the Intercompany loans** |
| Rhodia SA                                                            |   | Rhodia Silicones SAS  (€135,000,000) |
|                                                                 |   | Rhodia Silices SAS  (€48,000,000) |
|                                                                 |   | Rhodia Food SAS  (€60,000,000) |
|                                                                 |   | Rhodia HPCII SAS  (€63,000,000) |
|                                                                 |   | Rhodia Organique SAS  (€185,000,000) |
|                                                                 |   | Rhodia Fosfatados de  Mexico (US$83,000,000) |
|                                                                 |   | Rhodia Pharma Solutions  Holding Ltd (GBP60,000,000) |
|                                                                 |   | Rhodia Canada Inc  (CA$30,000,000) |
|                                                                 |   | Rhodia Mexicana SA de  CV (US$71,000,000) |
|                                                                 |   | Rhodia Engineering  Plastics NV (€15,500,000) |
|                                                                 |   | Rhodia de Mexico  (US$20,000,000) |
|                                                                 |   | Rhodia Japan  (Yen3,900,000,000) |
|                                                                 |   | Rhodia Finance  International (€78,000,000) |
|                                                                 |   | Rhodia Intermédiares  (€75,000,000) |
|                                                                 |   | Rhodia Polyamide  Intermediates (€38,000,000) |
|                                                                 |   | Rhodia Performance  Fibres (€120,000,000) |
|                                                                 |   | Rhodia Engineering  Plastics SRL (€11,500,000) |
|                                                                      |  |  |  |  |

 

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(10)                            At alltimes, at least 80% of all intercompany loans made by Rhodia SA (excluding theintercompany loans made in Part II of this table) to be subject to security,being at the date of the security package as set out under Part I of thistable.

 

126

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| **PART  II—Secured Intercompany loans** |
|----------------------------------------------|
|                                         |   |   |
| **Lender under the Intercompany loans**      |   | **Borrower under the Intercompany loans** |
| Rhodia SA                                    |   | Rhodia Acetol SAS  (€20,000,000) |
|                                         |   | Rhodia Iberia  (€58,000,000) |
|                                         |   | Rhodia PI Belle Etoile  SAS (€23,987,000) |
|                                         |   | Rhodia Participations  SNC (€654,000,000) |
|                                         |   | Rhodia Germany  International GmbH (€400,000,000) |
|                                         |   | Rhodia Brazil Ltda  (€43,000,000) |
|                                         |   | Rhodianyl SNC (€360,000,000) |
|                                         |   | Rhodia Holdings Ltd  (GBP273,000,000) |

 

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**SCHEDULE 16**

 

**AGREED LEASE AMENDMENT PRINCIPLES**

 

**PART1**

 

**ORIGINAL AGREED LEASE AMENDMENTPRINCIPLES**

 

Leases will berenegotiated and amended on a bilateral basis within the framework of thearrangements under the Secured Co-ordination Agreement in accordance with theTerm Sheets to be provided to the Intercreditor Agent on or prior to theCommencement Date to include:

 

**1.****                                      Reduction:**

 

(a)                                  5%at the time the consent and waiver letter is supplied to the IntercreditorAgent on or prior to the Commencement Date;

 

(b)                                 5%on the Term Date;

 

(c)                                  LeaseTerm unchanged or shortened to be co-terminus with the Refinancing FacilitiesAgreement.

 

**2.****                                      Security:**

 

(a)                                  Guaranteeof Rhodia S.A. on 100% of total lease obligation (same as the one existingtoday);

 

(b)                                 toshare in security offered to Finance Parties under the Shared SecurityDocuments in respect of 80% of obligations of Rhodia S.A. under its guarantee,subject to and in accordance with the Agreed Security Sharing Principles.

 

**3.****                                      Fees:**

 

70bp payable at thesigning of the lease amendment or consent and waiver letter referred to above.

 

**4.****                                      Margin:**

 

305bp on the debtcomponent of the lease up to March 2006.

 

**5.****                                      Covenants:**

 

To be amended orsupplemented in line with agreed covenants under this Agreement and thereafterthe Refinancing Facilities Agreement.

 

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**PART2**

 

**SUPPLEMENTAL LEASE AMENDMENTPRINCIPLES**

 
| **Section**                                               |   | **Terms**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-----------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Disposals  in accordance with ADP from Rhodia Inc. assets |   | Seek Lessors’ consent  for certain disposals with respect to the assets of Rhodia Inc., as set forth  below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                      |   | Rhodia Inc. may only  make disposals of its assets on the following conditions. Rhodia Inc. may  only dispose of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                      |   | (a) all, or  substantially all of, Rhodia Eco Services assets with the prior written  consent of the Lessors; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                      |   | (b) all other assets  (including Rhodia Eco Services, with Lessors’ consent) within the ADP and  which would generate aggregate net disposal proceeds from all Rhodia Inc.  asset dispositions since December 23, 2003:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                      |   | (1) up to but not  exceeding USD500M without Lessors’ consent; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                      |   | (2) over USD500M,  subject to (*x*) the prior  written consent of the Lessors and (*y*)  Rhodia Inc. paying to the Lessors (by way of supplemental rent) 50% of the  net disposal proceeds received in excess of USD500M.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                      |   | “Net disposal proceeds”  will have the same meaning as set forth in the March 8, 2004 draft of  Section 9.3(e) of the RFA. For purposes of clarity, net disposal  proceeds are calculated after taking into account any EBO payments made with  respect to the disposition in question.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                      |   | Lease amendment  documentation would include a covenant mirroring Clause 21.6(b)(iv) of the  RFA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                      |   | To the extent that any  payment under (b) arises prior to the date on which the USPP noteholders have  been repaid in full (the “USPP Date”), the payment will be deferred to the  first Business Day falling after the USPP Date (the “Payment Date”). In this  event, Rhodia Inc. will transfer such amounts received promptly to an account  in Rhodia Inc.’s name at one or more depositary institutions chosen by each  agent under each lease transaction and Rhodia Inc. will give a covenant to  the Lessors not to withdraw any amounts in that account other than to pay the  Lessors on the Payment Date (the deposit of funds prior to the USPP Date is  hereafter referred to as the “Deposit Mechanism”). The Lessors will waive  their rights to set-off in respect of amounts standing to the credit of the  accounts through the USPP Date. |
|                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Mandatory  Prepayments—ADP                           |   | Mandatory prepayments  to Lessors from ADP net disposal proceeds above (a) €700M prior to Term Date;  or (b) €850M after Term Date (in either case, “Excess ADP Proceeds”).(11)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 

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(11)                            Netdisposal proceeds aggregated for period commencing on and after 12.23.03.

 

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| **Section** |   | **Terms**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|        |   | Mandatory prepayments  to the Lessors from the seller’s share of Excess ADP Proceeds in proportion  to prepayments based on parity in % of reduction to that of the MTF (e.g., to  extent the total available commitments under the Medium Term Facility are  reduced by X%, the lease balances of the Lessors will be reduced by X%).                                                                                                                                                                                                                                    |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|        |   | The parties agree that  the examples set forth on Exhibit A attached hereto reflect their  understanding of the rules governing mandatory prepayments.                                                                                                                                                                                                                                                                                                                                                                                                                         |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|        |   | The Lessors share in  Excess ADP Proceeds based upon the proportional allocation formula set forth  in the preceding paragraph notwithstanding that ADP net disposal proceeds  generated by Rhodia Inc. have not reached the USD500M level.                                                                                                                                                                                                                                                                                                                                    |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|        |   | In addition, if ADP net  disposal proceeds from a sale by a member of the Group results in either (a)  the €700M prior to the Term Date or (b)€850M, after the Term Date, thresholds  being breached, the proportional reduction with respect to the Lessors will  be calculated by taking into account any mandatory prepayments received under  the heading “Disposals in accordance with ADP from Rhodia Inc. assets” as  well as any entitlement under this headnote.                                                                                  |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|        |   | After the respective  thresholds are breached, Lessors continue to receive mandatory prepayments  from subsequent ADP sales based upon the proportional allocation formula  without offsets for prior distributions that previously breached the Inc.  USD500M threshold.                                                                                                                                                                                                                                                                                                      |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|        |   | If the Lessors  percentage reduction solely from the Rhodia Inc. threshold breach is equal to  or greater than the percentage reduction realized by the MTF Lenders from the  sale in question, then the Lessors are not entitled to any additional  mandatory prepayment under this headnote and shall retain all amounts  received resulting from any mandatory prepayment for the breach of the Rhodia  Inc. USD500M threshold.                                                                                                                                             |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|        |   | To the extent the  Lessors’ percentage reduction is a smaller percentage reduction for the  Lessors than the percentage reduction realized by the MTF Lenders from the Excess  ADP proceeds in question, the Lessors will be entitled to receive an  additional prepayment under this headnote in respect of the ADP net disposal  proceeds, such that after taking into account the prepayment under this  headnote and the other headnote, the Lessors have received the same  percentage reduction from the ADP net disposal proceeds in question as the  MTF Lenders. |

 

130

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| **Section**                                            |   | **Terms**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                   |   | Prepayments which arise  under this section will not give rise to the release of collateral under  the leases. In addition, the Lessors will retain independent waiver rights in  respect of mandatory prepayments from ADP net disposals proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                   |   | To the extent that any  mandatory prepayment arises prior to the USPP Date, the payment will be  deferred to the Payment Date pursuant to the Deposit Mechanism. The Lessors  will waive their rights to set-off in respect of amounts standing to the  credit of the accounts through the USPP Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                   |   | No member of Group will  create or permit to exist or become effective the right of any unaffiliated  third party or financial institution to consent to or approve of any sale or  other disposition of assets by Rhodia Inc. pursuant to the Asset Disposal  Program, except for the consent rights to be granted to the Lessors pursuant  to this Supplement. Further, neither Rhodia S.A. nor any member of the Group  shall grant to any person a mandatory prepayment right arising out of the  sale or other disposition by Rhodia Inc. of any of its assets sold pursuant  to the Asset Disposal Program, except for such rights granted pursuant to  this Supplement, such other agreements as in effect on March 3, 2004 and  the draft of the RFA dated March 8, 2004 (it being understood that  Rhodia S.A. will not, directly or indirectly, in the execution version of the  RFA permit the RFA Lenders to share in ADP proceeds at the Rhodia Inc. level,  however it is further understood that Rhodia Inc. is obliged to make  prepayments/cancellations of loans/commitments made available to it in  relation to such proceeds in accordance with Section 9.3(b) of the RFA). |
|                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Mandatory  Prepayments—Debt Capital Markets Issue |   | Mandatory prepayments  to Lessors from proceeds of debt capital markets issues after the USPP Date  as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                   |   | There will be  proportional reduction based on parity in % of reduction to that of the MTF  (i.e. to extent the total available commitments under the Medium Term  Facility are reduced by 7%, the Lessors will be reduced by 7%). For avoidance  of doubt, equity linked debt issues will be treated as debt.(12)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                   |   | The Lessors will, to  the extent the Medium Term Facility Lenders waive their right to receive net  issuance proceeds from the sale of debt instruments in the capital markets,  be deemed in the same proportion to have waived their entitlement to their  share of net issuance proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

 

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(12)                            Convertibleand exchangeable bonds.

 

131

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| **Section**                                                                                                                    |   | **Terms**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Mandatory  Prepayments—Equity Issue                                                                                       |   | The Lessors will not be  entitled to any reduction of the Leases or share in proceeds from any equity  issue proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Use of first ADP net  disposal proceeds generated from sales of assets by Rhodia Inc.  (“Inc Net Disposal Proceeds”) |   | The Inc Net Disposal  Proceeds will be applied:  (i) *first* towards payment of  the outstanding balance of the USD53M loan due to CSFB and prepayment to the  Lessors of USD14M due on the Term Date;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                           |   | (ii) *second* to fund the cash  collateralisation of USD16M of letters of credit issued by Société Générale  for the account of Rhodia Inc. (which instruments shall remain the primary  obligations of Rhodia Inc.);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                           |   | (iii) *third* to the repayment of the  outstanding balance of intercompany loans owed by Rhodia Inc. to [insert name  of Rhodia company that is the current lender] with the USD210M intercompany  term loan (“USD210 Term Loan”) to be repaid in priority to the USD46M loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                           |   | The application of Inc.  Net Disposal Proceeds to the USD14M lease prepayment will give rise to an  obligation on the part of Rhodia Inc. to repay the corresponding amount of  intercompany loans owed by it to any member of the Group. Such repayment of  this intercompany loan will be made either (a) from proceeds of the sale  of the phosphate business (without regard to whether there is an Event of  Default under the Leases as of such date); or (b) if the phosphate  disposal has not been completed, by way of cancellation of an intercompany  loan in the corresponding amount on the earlier of (*x*) 31 December 2004; and  (*y*) the date as of which  the Lessors shall have notified Rhodia Inc. of the occurrence and continuance  of an Event of Default under the Leases. |
|                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                           |   | Rhodia Inc. will  provide a duly approved board resolution to the Lessors giving effect to the  foregoing and in particular, such resolution shall provide that, *inter alia*, no further action is  required on the part of Rhodia Inc. to give effect to the cancellation(13) of  the intercompany loan as contemplated above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                           |   | Rhodia S.A. agrees to  contribute no less than USD25M to Rhodia Inc. during the first calendar  quarter of 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Intercompany Loans to  SA—Upstream Loans                                                                                  |   | Rhodia Inc. will not be  entitled to grant any new upstream loans to Rhodia S.A. or any other member  of the Group(14) until the first Business Day falling after the date on which  the intercompany loans which are outstanding at the Effective Date have been  repaid in full (and subject to the provisions set out above (see “Use of  First ADP Proceeds)).                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 

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(13)                            RhodiaFinance SA will need to verify whether a board resolution is required.

(14)                            Aseach term Group and Subsidiary are defined in the RFA.

 

132

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| **Section**                                                                   |   | **Terms**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                          |   | Rhodia Inc. will be  entitled to lend up to an aggregate of USD30M on a demand basis to Rhodia  S.A. and any member of the Group pursuant to the cash pooling arrangements  and such intercompany loans will not be subject to the Subordination  Agreement or the subordination provisions of the RFA.                                                                                                                                                                                                                                                                                                                          |
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                          |   | All other upstream  intercompany loans by Rhodia Inc. to Rhodia S.A. will be subject to the  Subordination Agreement and the subordination provisions of the RFA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Minimum Liquidity                                                             |   | Minimum liquidity  levels are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                          |   | 2004 Q4=USD40M,  Q2/Q3=USD20M                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                          |   | 2005 Q1/Q4=USD30M,  Q2/Q3=USD15M                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                          |   | 2006 Q1/Q4=USD30M,  Q2/Q3=USD15M                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                          |   | 2007 Q1=USD30M (for  Cranbury only)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                          |   | No testing for  liquidity level for Q1 of 2004. The liquidity calculation shall include cash  and cash equivalents and available undrawn amounts under the USD50M revolver  (not otherwise subject to suspension for any reason), subject to a  representation from Rhodia S.A. that it has sufficient unrestricted cash and  or cash equivalent amounts at the Rhodia S.A. level and unimpeded  availability under the RFA to fully fund the USD50 million revolver amongst  its other obligations. Tested quarterly (as below).                                                                                                |
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                          |   | In determining the  amount of cash and cash equivalents available to Rhodia Inc. no credit will  be given for cash and cash equivalents held at Rhodia S.A. or other Group  members (other than Rhodia Inc.).                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| USD25M cap for capital  contributions to Primester or other Relevant Entities |   | Rhodia Inc. accepts the  USD25M cap on loan and capital contributions to Primester or any other  Relevant Entity (as defined in the lease), exclusive of the existing USD6.25M  loan by Rhodia Inc. to Primester. For avoidance of doubt, this USD25M cap  does not apply if a capital contribution is made from Rhodia S.A. downstream  to Rhodia Inc. and Rhodia Inc. promptly lends such proceeds to Primester (it  being understood that Rhodia S.A.’s first quarter capital contribution to  Rhodia Inc. will not be considered as the initial contribution for purposes  of completing the back-to-back transaction). |

 

133

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| **Section**                          |   | **Terms**                                                                                                                                                                                                                                                                                                                                                          |
|--------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
| Ratio Levels                         |   | Total Net Debt  (inclusive of receivables securitization of Rhodia Inc. and exclusive of the  USD 210M Term Loan to EBITDAR (“Total Net Debt to EBITDAR”) maximum ratio  levels applicable to forward projections and historical ratios as follows:                                                                                                      |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | 2004 Q1=4.1 and  Q2/3/4=3.50                                                                                                                                                                                                                                                                                                                                       |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | 2005 Q1/2=3.375 and Q3  =3.25 and Q4=3.00                                                                                                                                                                                                                                                                                                                          |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | 2006 Q1/2/3=3.0 and  Q4=2.5                                                                                                                                                                                                                                                                                                                                        |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | 2007 Q1=2.25 (for  Cranbury only)                                                                                                                                                                                                                                                                                                                                  |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
| Financial  Covenants—Historic   |   | Quarterly tests to show  Total Net Debt to EBITDAR on 12 months rolling basis with Total Net Debt as  calculated as of the testing date.                                                                                                                                                                                                                           |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | Ratio testing subject  to Capstone analysis.                                                                                                                                                                                                                                                                                                                       |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | Financial term  definitions to be agreed at drafting stage, Lessors will consider the RFA  language and US specific issues will be included.                                                                                                                                                                                                                       |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
| Financial  Covenants—Projection |   | Total Net Debt to  EBITDAR and liquidity projections to be tested prior to an upstream  distribution subject to a *de minimis*  threshold.                                                                                                                                                                                                                         |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | *De  minimis* threshold is (a) a single distribution in  excess of USD5M and (b) an aggregate distribution in any rolling 3 month  period of USD10M. In addition, the forward looking covenant test is  inapplicable with respect to the first €150 of Inc. net disposal proceeds.                                                                  |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | Mechanics are:                                                                                                                                                                                                                                                                                                                                                     |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | (a) Rhodia Inc. to  deliver projected financials showing pro forma 12 month projections  post-distributions at least 10 Business Days(15) prior to any proposed  upstream payment;                                                                                                                                                                                 |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | (b) these financials  are subject to Capstone analysis and approval of each Lessor;                                                                                                                                                                                                                                                                                |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | (c) Rhodia Inc. may  make upstream payment on the date set forth in its notice, but will not be  entitled to any cure rights if the Lessors notify it prior to the proposed  distribution date that there is a Potential Event of Default as a result of  the 12 month projections failing to comply with the Total Net Debt to EBITDAR  test or liquidity levels; |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                               |
|                                 |   | (d) without regard to  Lessor’s approval of the certificate as per (b) above, if the certificate,  when delivered, demonstrates that there is a breach, the Lessors may notify  Rhodia Inc. of the occurrence of a Potential Event of Default;                                                                                                                |

 

----

(15)                            Capstoneto confirm whether 10 Business Days is sufficient.

 

134

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| **Section**                                     |   | **Terms**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                            |   | (e) upon receipt of a  notice of a Potential Event of Default, Rhodia Inc. shall have, subject to no  distribution having been made, a cure period of 30 days during which it may  cure (whether through a capital contribution or otherwise) the Total Net Debt  to EBITDAR and/or liquidity tests by delivering revised projections (for the  following four quarters) and such other evidence supporting a certificate  demonstrating to the satisfaction of each Lessor that the Total Net Debt to  EBITDAR and liquidity levels will be met throughout the succeeding 12 month  period commencing on the date of the new compliance certificate; |
|                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                            |   | (f) for the avoidance  of doubt, if Rhodia Inc. does not deliver pro forma projections as required  under paragraph (a) above, such failure shall constitute an Event of Default  which shall not be subject to any cure periods or rights;                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                            |   | Financial terms to be  agreed at drafting stage, Lessors will consider the RFA language and US  specific issues will be included.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Selection of Equipment  for both 5% payments    |   | Under the lease  amendment document relating to the JPMorgan lease, JPMorgan will be entitled  to choose the assets to which the each of the 5% prepayment proceeds (as per  the SCA and the waiver and consent letter between Rhodia Inc. and JPMorgan  Leasing Inc. dated 23 December 2003) are applied. For the avoidance of  doubt, this includes a retrospective selection for the December 2003 5%  payment.                                                                                                                                                                                                                          |
|                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Purchase Option at end  of lease                |   | Rhodia Inc. will agree  in the lease amendments to exercise the purchase option at end of lease  period. Rhodia Inc. agrees that the lease amendment documents may be amended,  if appropriate, to delete the return and/or remarketing provisions in the  current lease documents.                                                                                                                                                                                                                                                                                                                                                                   |
|                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Additional  Covenants—RFA covenant package |   | The Lease Transactions  will have two sets of covenant packages: one for the period ending on the  Term Date (the “Standstill Period”) and another set commencing as of the  later of the signing date of the RFA or the lease amendments and ending on  the date all such lease obligations are paid in full (the “Covenant Period”).  Both sets of covenants will be separately stated in the lease documents. For  the Standstill Period, the covenants will be substantially similar to, and  not inconsistent with, those in the SCA.                                                                                        |
|                                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Management Fees                                 |   | The annual management  fee payable by Rhodia Inc. to the Company shall be calculated in accordance  with the past business practices except as otherwise required by changes in  methodology resulting from changes in applicable law and regulations after  the date of the lease amendments.                                                                                                                                                                                                                                                                                                                                                        |

 

135

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| **Section**                             |   | **Terms**                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                    |   | Rhodia Inc. will notify  Lessors if there is a change in the methodology of calculation of the  management fees prior to making such a management fee. The Lessors do not  have a right of default in respect of any change in the methodology due to a  change in applicable law or regulations.                                                                                                                                                                      |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Modification USD50M  Revolver           |   | It is understood that  Rhodia Inc. cannot draw under this revolver or repay any amounts until after  the USPP Date.                                                                                                                                                                                                                                                                                                                                                    |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                    |   | The current revolver is  a downstream loan from Rhodia S.A. to Rhodia Inc. only and will not be  amended to provide any upstream loans from Rhodia Inc. to Rhodia S.A.                                                                                                                                                                                                                                                                                                 |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                    |   | See “Cash Pooling”  hereunder with respect to upstream funding.                                                                                                                                                                                                                                                                                                                                                                                              |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Cash Pooling                            |   | Cash pooling  arrangements shall be put in place with respect to certain new upstream loans  from Rhodia Inc. to Rhodia S.A. only. Such cash pooling arrangement shall be  structured and documented so as to fall within the classification of “cash  pooling arrangement” and will be excluded from the subordination provisions  of the RFA and Subordination Agreement.                                                                                  |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                    |   | The maximum amount  permitted to be outstanding pursuant to the proposed cash pooling arrangement  will be equal to USD30M, to be documented in the form of a short-term on  demand revolving loan (with a maturity of less than 15 days).                                                                                                                                                                                                                             |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                    |   | For avoidance of doubt,  the Note receivables evidencing any such upstream loans by Rhodia Inc. to  other members of the Group pursuant to such cash pooling arrangements will  not constitute cash or cash equivalents for purposes of complying with the  minimum liquidity covenant.                                                                                                                                                                                |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Negative  Pledge/Financial Indebtedness |   | Rhodia Inc. may not  incur any new Financial Indebtedness(16) or create or permit to exist any  consensual liens or security interests on its assets except that it will be  permitted to pledge cash to unaffiliated third party trade creditors  (suppliers of utilities, goods, raw materials and production and packaging  materials) up to an aggregate of USD15M with a sublimit of USD5M for  unsecured loans made by unaffiliated third parties to Rhodia Inc. |

 

----

(16)                            It isassumed that new Financial Indebtedness excludes indebtedness under theRefinancing Facilities Agreement.

 

136

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| **Section**       |   | **Terms**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Additional Points |   | Lessors and members of  their syndicate will have received a signed opinion from Shearman &  Sterling, special counsel to Rhodia S.A. to the effect that, among other  matters, neither execution, delivery and performance of the Lease Amendments  to which Rhodia S.A. or Rhodia Inc. is a party, nor the consummation of the  transactions contemplated thereby, nor compliance with the terms and  provisions thereof, does or will contravene or result in a breach of or  constitute a default under, among other documents, the RFA, the outstanding  high yield indentures, the USPP Note Purchase Agreement, as amended, and any  other material credit facility, lease or any other financing arrangement to  which it or its subsidiaries are a party. |
|              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|              |   | At signing of the Lease  amendments, Rhodia Inc. will represent and confirm to the satisfaction of the  Lessors that it has not granted any guarantee or indemnity to any party,  including BNP Paribas, in respect of the BNP Paribas loan to Primester.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 

137

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**EXHIBITA**

 

**Rhodia SA/Inc Mandatory Prepayment examples**

 

USD/€=1,25

 

Net Disposal Proceedsmeans proceeds AFTER the Early Buy Out of any leased assets made necessary byeach disposal in question.

 

The USD500M threshold isUSD500M of Net Disposal Proceeds

 

**Example 1  Breach ofboth Mandatory Prepayment thresholds**

 

Assume a sale at Incgenerating Net Disposal Proceeds of USD200m in excess of the USD500m threshold

 

Assume that the samedisposal also breaches the RFA threshold of € 850m, by say USD100m

 

Assume lessor debt at thetime is USD250m (€200m) (after EBO’s relating to the disposal in question)

 

Assume RFA availablecommitment at the time = €638m

 

1)                                      Lessorsreceive reduction of USD100m by way of supplemental rents. This represents areduction of 40% for the lessors.

 

2)                                      USD100Mavailable to be upstreamed from Inc to SA, subject to compliance with Inccovenants

 

3)                                      TheRFA will receive a reduction of €40m (USD100/2/1.25). This represents areduction of 6.25%.

 

4)                                      Asthe Lessor reduction is a greater %age than the RFA reduction, the lessorsreceive no “equalisation” from Rhodia in respect of the mandatory prepayment ofthe RFA

 

**Example 2  Breach ofboth Mandatory Prepayment thresholds**

 

Assume a sale of adivision of SA for €400m, of which USD50m of Net Disposal Proceeds is generatedfrom Inc. and all USD50m of those Net Disposal Proceeds are in excess of theUSD500m threshold

 

Assume that the samedisposal also breaches the RFA threshold of € 850m, by €200m

 

Assume lessor debt at thetime is USD250m (€200m) (after EBO’s relating to the disposal in question)

 

Assume RFA availablecommitment at the time = €638m

 

1)                                      Lessorsreceive reduction of USD25m by way of supplemental rents. This represents areduction of 10% for the lessors.

 

2)                                      USD75M(less USD14m see point 4) available to be upstreamed from Inc to SA, subject tocompliance with Inc covenants

 

3)                                      TheRFA will receive a reduction of €100m. This represents a reduction of 15.6%.

 

4)                                      Asthe Lessor reduction is a smaller %age than the RFA reduction, the lessorsreceive “equalisation” from Rhodia’s retained 50% in order to match the 15.6%reduction enjoyed by the RFA In this case the equalisation amount would be 5.6%of USD250m = USD14m. This 14m to be paid by supplemental rents.

 

**Example 3  Breach ofonly the RFA Mandatory Prepayment threshold**

 

Assume a sale at SA for€400m, of which USD100m Net Disposal Proceeds are generated at Inc

 

Assume that the samedisposal ONLY breaches the RFA threshold of € 850m, by €200m

 

138

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Assume lessor debt at thetime is USD250m (€200m) (after EBO’s relating to the disposal)

 

Assume RFA availablecommitment at the time = €638m

 

1)                                      TheRFA will receive a reduction of €100m. This represents a reduction of 15.6%.

 

2)                                      Lessorsreceive “equalisation’ reduction of 15.6% of USD250m = USD39m by way ofsupplemental rents. This comes from Rhodia’s retained € 200m.

 

**Example 4  Breach ofonly the Inc Mandatory Prepayment threshold**

 

Obviously this leads to50% of the Net Disposal Proceeds above USD500m being used to reduce the leasesby way of supplemental rents

 

The remaining 50% of theNet Disposal Proceeds is available for upstreaming to SA subject to Inccovenant compliance

 

As the RFA threshold isnot breached, no mandatory prepayment at the RFA level

 

Reductions of the leasesfrom Mandatory Prepayments are effected by supplemental rents

 

139

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**SIGNATORIES**

 
| **Company**                         |                  |
|-------------------------------------|-----------------------|
|                                |                  |
| RHODIA                              |                  |
|                                |
| By:                                 | JEAN-PIERRE CLAMADIEU |
|                                |                  |
|                                |                  |
| **Original  Borrowers**             |
|                                |                  |
| RHODIA INC.                    |
|                                |                  |
| By:                                 | RAYMOND LEE           |
|                                |                  |
|                                |                  |
| **Arrangers**                       |
|                                |                  |
| BNP PARIBAS                         |
|                                |                  |
| By:                                 | BRUNO TASSART         |
|                                |                  |
|                                |                  |
| CRÉDIT AGRICOLE  INDOSUEZ S.A. |
|                                |                  |
| By:                                 | DIDIER LEBLANC        |
|                                |                  |
|                                |                  |
| HSBC CCF                            |
|                                |                  |
| By:                                 | MARC BOUTIN           |
|                                |                  |
|                                | DOMINIQUE TAUVERON    |
|                                |                  |
|                                |                  |
| **Original  Lenders**               |
|                                |                  |
| BNP PARIBAS                         |
|                                |                  |
| By:                                 | BRUNO TASSART         |
|                                |                  |
|                                |                  |
| CRÉDIT AGRICOLE  INDOSUEZ S.A. |
|                                |                  |
| By:                                 | DIDIER LEBLANC        |
|                                     |                       |  |

 

140

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| CRÉDIT INDUSTRIEL ET  COMMERCIAL                     |
|-----------------------------------------------------------|
|                                                      |
| By:                                                       | DIDIER LEBLANC |
|                                                      |   |
|                                                      |   |
| BANQUE DE L’ECONOMIE DU  COMMERCE ET DE LA MONETIQUE |
|                                                      |
| By:                                                       | DIDIER LEBLANC |
|                                                      |   |
|                                                      |   |
| CREDIT SUISSE FIRST  BOSTON INTERNATIONAL                 |
|                                                      |
| By:                                                       | DIDIER LEBLANC |
|                                                      |   |
|                                                      |   |
| BAYERISCHE LANDESBANK                                     |
|                                                      |
| By:                                                       | DIDIER LEBLANC |
|                                                      |   |
|                                                      |   |
| THE BANK OF  TOKYO-MITSUBISHI, LTD.                  |
|                                                      |
| By:                                                       | DIDIER LEBLANC |
|                                                      |   |
|                                                      |   |
| FORTIS BANK (NEDERLAND)  N.V.                             |
|                                                      |
| By:                                                       | DIDIER LEBLANC |
|                                                      |   |
|                                                      |   |
| NATEXIS BANQUES  POPULAIRES                               |
|                                                      |
| By:                                                       | DIDIER LEBLANC |
|                                                      |   |
|                                                      |   |
| CCF                                                       |
|                                                      |
| By:                                                       | MARC BOUTIN |
|                                                      |   |
|                                                      | DOMINIQUE TAUVERON |
|                                                      |   |
|                                                      |   |
| STANDARD CHARTERED BANK                                   |
|                                                      |
| By:                                                       | DIDIER LEBLANC |
|                                                      |   |
|                                                      |   |
| THE ROYAL BANK OF  SCOTLAND PLC                           |
|                                                      |
| By:                                                       | RICHARD DEVIN |

 

141

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| BANCO BILBAO VIZCAYA  ARGENTARIA |
|----------------------------------|
|                             |
| By:                              | DIDIER LEBLANC |
|                             |   |
|                             |   |
| UNICREDITO ITALIANO              |
|                             |
| By:                              | DIDIER LEBLANC |
|                             |   |
|                             |   |
| UFJ BANK LIMITED                 |
|                             |
| By:                              | DIDIER LEBLANC |
|                             |   |
|                             |   |
| CITIBANK INTERNATIONAL  PLC      |
|                             |
| By:                              | DIDIER LEBLANC |
|                             |   |
|                             |   |
| CITICORP USA, INC.          |
|                             |
| By:                              | DIDIER LEBLANC |
|                             |   |
|                             |   |
| LANDESBANK SAAR                  |
|                             |
| By:                              | DIDIER LEBLANC |
|                             |   |
|                             |   |
| COMERICA BANK                    |
|                             |
| By:                              | DIDIER LEBLANC |
|                             |   |
|                             |   |
| **Facility  Agent**              |
|                             |
| BNP PARIBAS                      |
|                             |   |
| By:                              | DIDIER LEBLANC |
|                             |   |
|                             |   |
| **Security  Agent**              |
|                             |
| BNP PARIBAS                      |
|                             |
| By:                              | DIDIER LEBLANC |

 

142

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