**Exhibit 10.1**

 

**EXECUTIONVERSION**

 

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.

 

SECUREDCO-ORDINATION AGREEMENT

 

**DATED 23RD DECEMBER, 2003**

 

**BETWEEN**

 

**RHODIA S.A.**

**the Company and the Guarantor**

 

**BORROWING GROUP MEMBERS**

 

**THE LENDERS**

 

**and**

 

**BNP PARIBAS**

**as Intercreditor Agent**

 

**and**

 

**FACILITY AGENTS**

 

**THIS AGREEMENT IS ENTERED INTO WITH THE BENEFIT OF ANDSUBJECT TO THE TERMS OF A SECURITY SHARING AGREEMENT AND SUBORDINATIONAGREEMENT WHEN ENTERED INTO**

 

ALLEN& OVERY

 

PARIS

 

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**CONTENTS**

 
| **Clause** |   |                                   |
|------------|--------|----------------------------------------|
|       |   |                                   |   |   |
| 1.         |   | Interpretation                         |   |   |
| 2.         |   | Conditions  precedent                  |   |   |
| 3.         |   | Secured Intercreditor  Period          |   |   |
| 4.         |   | Affected  Facilities                   |   |   |
| 5.         |   | Payments                               |   |   |
| 6.         |   | New Guarantee                          |   |   |
| 7.         |   | Mandatory  prepayment and cancellation |   |   |
| 8.         |   | Representations and  warranties        |   |   |
| 9.         |   | Undertakings                           |   |   |
| 10.        |   | Financial  covenants                   |   |   |
| 11.        |   | Default                                |   |   |
| 12.        |   | The Administrative Parties             |   |   |
| 13.        |   | Expenses                               |   |   |
| 14.        |   | Changes  to the Parties                |   |   |
| 15.        |   | Amendments  and waivers                |   |   |
| 16.        |   | Confidentiality                        |   |   |
| 17.        |   | Stamp duties                           |   |   |
| 18.        |   | Indemnities                            |   |   |
| 19.        |   | Co-ordinating  Committee               |   |   |
| 20.        |   | Severability                           |   |   |
| 21.        |   | Counterparts                           |   |   |
| 22.        |   | Notices                                |   |   |
|            |        |                                        |  |  |  |

 

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| 23.           |   | Language                                                    |                                                                                                                                       |   |
|---------------|--------|-------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 24.           |   | Jurisdiction                                                |                                                                                                                                       |   |
| 25.           |   | Waiver of immunity                                          |                                                                                                                                       |   |
| 26.           |   | Governing law                                               |                                                                                                                                       |   |
| **Schedules** |   |
| 1.            |   | Various Parties                                             |                                                                                                                                       |   |
|          |   | Part 1                                                      | The Borrowing  Group                                                                                                                       |   |   |
|          |   | Part  2                                                     | The  Original Obligors                                                                                                                     |   |   |
|          |   | Part 3                                                      | Original Lenders                                                                                                                           |   |   |
|          |   | Part 4                                                      | Facility Agents                                                                                                                            |   |   |
| 2.            |   | Conditions precedent documents                              |                                                                                                                                       |   |
|          |   | Part  1                                                     | Conditions  Precedent documents to be provided in form and substance satisfactory to each  Original Lender are marked with an asterisk (*) |   |   |
|          |   | Part 2                                                      | Conditions precedent  documents                                                                                                            |   |   |
|          |   | Part  3                                                     | Additional  Obligor Conditions Precedent Documents                                                                                         |   |   |
| 3.            |   | The Existing Facilities, Affected Facilities  and Exposures |                                                                                                                                       |   |
| 4.            |   | Security—Existing Security Interests                   |                                                                                                                                       |   |
| 5.            |   | Accession Agreement                                         |                                                                                                                                       |   |
| 6.            |   | Business Plan including Liquidity Analysis                  |                                                                                                                                       |   |
|          |   | Part 1                                                      | Rhodia Business  Plan After Disposals                                                                                                      |   |   |
|          |   | Part 2                                                      | Liquidity  Analysis                                                                                                                        |   |   |
| 7.            |   | Inter-Company Loans                                         |                                                                                                                                       |   |
|          |   | Part 1                                                      | Intercompany  Loans/Borrowings between Rhodia S.A. and its Subsidiaries                                                                    |   |   |
|          |   | Part 2                                                      | Intercompany  Loans/Borrowings between the Rhodia Subsidiaries (as of 30th November, 2003)                                                 |   |   |
| 8.            |   | ERISA Events                                                |                                                                                                                                       |   |
| 9.            |   | Agreed Lease Amendment Principles                           |                                                                                                                                       |   |
| 10.           |   | Form of Compliance Certificate                              |                                                                                                                                       |   |
| 11.           |   | Agreed Security Principles                                  |                                                                                                                                       |   |
|          |   | Part 1                                                      | General                                                                                                                                    |   |   |
|          |   | Part 2                                                      | Secured Assets                                                                                                                             |   |   |
|          |   | Part 3                                                      | Beneficiaries                                                                                                                              |   |   |
|          |   | Part 4                                                      | Security Sharing Principles                                                                                                                |   |   |
| Signatories   |   |                                                        |
|               |        |                                                             |                                                                                                                                            |        |  |  |  |  |

 

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**THISAGREEMENT** is dated23rd December, 2003 between:

 

(1)**                                 ****RHODIA S.A.** (a company incorporated in France(Registered No. 352-170-161) with its registered office at 26 quai Alphonse LeGallo 92100 Boulogne Billancourt) (the **Company**);

 

(2)**                                 ****BORROWING GROUP MEMBERS** listed in Part 2 of Schedule 1 (each an **Original Obligor** and together the **Original Obligors**);

 

(3)**                                 ****RHODIA S.A.** (the **Guarantor**);

 

(4)**                                 ****THE FINANCIAL INSTITUTIONS** listed in Part 3 of Schedule 1 (the **Original Lenders**);

 

(5)**                                 ****BNP PARIBAS** as intercreditor agent for the Lenders (inthis capacity the **Intercreditor Agent**);and

 

(6)**                                 ****AGENTS UNDER AFFECTEDFACILITIES** listed in Part 4of Schedule 1 (each a **Facility Agent**,together the **Facility Agents**).

 

**IT ISAGREED** as follows:

 

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**1.****                                     ****INTERPRETATION**

 

**1.1****                              ****Definitions**

 

In this Agreement:

 

**Additional Obligor** means a Borrowing Group Member which becomes an Obligor after the dateof this Agreement.

 

**Accession Agreement** means an agreement in the form of Schedule 5 (Accession Agreement)with such amendments as the Intercreditor Agent may approve or reasonablyrequire.

 

**Affected Facility** means each of the facilities referred to in Schedule 3 and designated as“Affected Facilities” and in respect of which the relevant Lender is a Party tothis Agreement.

 

**Affected Facility Agreement** means any Facility Agreement constituting orevidencing any Affected Facility.

 

**Affiliate** means a Subsidiary or a Holding Company of a person or any otherSubsidiary of that Holding Company.

 

**Agent**means the Intercreditor Agent and/or the Security Agent.

 

**Agreed Lease Amendment Principles** means the agreed lease amendment principlesset out in Schedule 9 (Agreed Lease Amendment Principles).

 

**Agreed Security Principles** means the security principles set out inSchedule 11.

 

**Asset**means:

 

(a)                                  each asset of the Group included in the AssetDisposal Programme from time to time;

 

(b)                                 any shares or capital stock or equivalent inany member of the Group; and

 

(c)                                  any assets which are disposed of under Clause9.9(b)(iv), (but excluding, for the avoidance of doubt, assets disposed ofunder Clause 9.9(b)(i), (ii) and (iii)).

 

**Asset Disposal Programme** means together:

 

(a)                                  an asset disposal programme generating netcash 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 cashby that date without condition, with the balance to be received in cash, subjectonly to satisfaction of conditions outside the control of the buyer or seller(or their respective affiliates) under binding sale and purchase agreementsentered into prior to 30th June, 2004, and where such balance is actuallyreceived in cash in any event on or before 31st December, 2004); and

 

(b)                                 an additional asset disposal programmegenerating additional net cash proceeds of not less than €700,000,000 minus thenet cash proceeds generated from the first disposal programme referred to inparagraph (a) above, to be received by the Company by no later than 31stDecember, 2004,

 

in each case where **net cash proceeds** means cash proceeds netof any Taxes payable in the financial year in which the disposal is effected orproceeds received and reasonable third party costs and expenses attributable tothe disposal, receipt or recovery, as set out in reasonable detail in acertificate provided to the Intercreditor Agent by the chief financial officerof the Company.

 

**Borrowing Group** means each entity listed in Part 1 of Schedule 1.

 

**Borrowing Group Member** means each member of the Borrowing Group.

 

**Business Day** means a day (other than a Saturday or a Sunday) on which banks aregenerally open for business in London and Paris and:

 

(a)                                  if on that day a payment in or a purchase ofa currency (other than Euro), is to be made, the principal financial centre ofthat currency; or

 

(b)                                 if on that day a payment in or a purchase ofEuro is to be made, which is also a Target Day.

 

**Business Plan** means the business plan to be provided by the Company to the Lendersas updated on a quarterly basis to include the liquidity analysis in the formset out in Schedule 6 (Business Plan including Liquidity Analysis).

 

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**Calculation Point** means 5.00 p.m. (Paris time) on 30th November, 2003.

 

**Code**means the United States Internal Revenue Code of 1986, as amended and the rulesand regulations promulgated thereunder from time to time in effect.

 

**Commencement Date** means the date on which the Intercreditor Agent provides thenotification to each Party as specified in Clause 2 (Conditions Precedent).

 

**Compliance Certificate** means a certificate signed by the chieffinancial officer or statutory auditors of the Company, as applicable,substantially in the form of Schedule 10.

 

**Co-ordinating Committee** means the committee appointed in accordancewith a co-ordinating committee letter dated 30th November, 2003.

 

**Dangerous Substance** means any radioactive emissions, noise and any natural or artificialsubstance (in whatever form) the generation, transportation, storage, treatmentor disposal 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.

 

**Declared Default** means (following a request by any Lender) a notification by theIntercreditor Agent (acting on the instructions of the Majority Lenders) thatan Event of Default has occurred and is outstanding.

 

**Default** means (a) an Event of Default; or (b) an event or circumstance whichwith the expiry of a grace period, the giving of notice, lapse of time,determination of materiality or fulfilment of any other applicable condition(or any combination of the foregoing) is likely to constitute an Event ofDefault.

 

**Derivative Deposit** means, in relation to Lenders under Derivative Instruments referred toin Schedule 3, the deposit or payment of collateral in an amount equal to thepositive difference (if any) by which that Lender’s Exposure in respect ofDerivative Instruments on the last Business Day of each calendar month exceedsits maximum Exposure in respect of Derivative Instruments as set out againstits name in Schedule 3 up to a maximum aggregate amount not exceeding€40,000,000 (or its equivalent in other currencies).

 

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

 

**Derivative Liability** means, on any date and in respect of any Derivative Instrument betweenany member of the Group, any Borrowing Group Member and any creditor, theamount (if any) payable by that member of the Group or Borrowing Group Memberto that creditor on termination of that Derivative Instrument on that date (orwhich would have been payable by that member of the Group or Borrowing GroupMember to that creditor had that Derivative Instrument been terminated on thatdate) (where the amount shall be the “marked-to-market” value of that contractor instrument and shall take into account the operation of any netting provisionscontained within that instrument or contract or master agreement including thenetting of one or more Derivative Instruments between the same creditor andmember of the Group or Borrowing Group Member under the same master agreement).

 

**EMTN**means a Euro medium term note programme for the Company in an amount of€1,800,000,000 as described in an offering circular dated 5th October, 2001.

 

**Enforcement Action** in respect of an Affected Facility means any of the following actions:

 

(a)                                  to submit a petition for (or vote in favourof any resolution in any insolvency proceedings) or initiate or support or takeany steps with a view to any bankruptcy, insolvency, liquidation, businessreorganisation or rehabilitation, administration receivership, execution or dissolutionproceedings under any insolvency and composition laws or any similarproceedings (or any analogous proceedings in any other jurisdiction) involvingthe Company or any of its subsidiaries;

 

(b)                                 to serve a notice of a default, event ofdefault or termination event (howsoever described) on the relevant BorrowingGroup Member, to place on demand, to make demand for or accelerate the due datefor, or declare prematurely payable any moneys under any Affected Facility;

 

(c)                                  to commence or continue any action to enforcethe payment of any amount under any Affected Facility;

 

----

 

(d)                                 where a breach of contract ormisrepresentation by a Borrowing Group Member under an Affected Facilityresults in or from a default, event of default or termination event (howsoeverdescribed), to commence or continue any legal action against that member forrepudiation or rescission of that Affected Facility or damages for loss (orequivalent), in each case, as a consequence of that breach of contract ormisrepresentation;

 

(e)                                  to take any action to cancel any fundedcommitment to lend or to close out or terminate or cancel any swap or similarhedging arrangement, any guarantee, letter of credit or like commitment infavour of a third party or any foreign exchange facility, in each case, underany Affected Facility but excluding any action to close out or terminate anyswap or similar hedging arrangements where any Borrowing Group Member is “inthe money” as a result of close out or termination;

 

(f)                                    to exercise any right of appropriation,amalgamation of accounts counter-claim or set-off in reduction of outstandingsunder any Affected Facility, except that Lenders may continue to apply nettingarrangements in effect as at date of this letter in accordance with theexisting terms thereof; or

 

(g)                                 to take any action to perfect (except ifrequired to maintain a Security Interest then existing) or to enforce or makeany demand under any Security Interest or any guarantee, indemnity or likecommitment or similar support (except as contemplated by Clause 4.3(d)(iv))given in connection with an Affected Facility by any Borrowing Group Member orany other person.

 

**Environment** means all, or any of, the following media: the air (including airwithin other natural or man-made structures above or below ground), water(including, without limitation, ground and surface water) and land (including,without limitation, surface and sub-surface soil).

 

**Environmental Law** means all laws (including, without limitation, common law),regulations, directives, codes of practice, circulars, guidance notes and thelike having legal effect concerning the protection of human health, theEnvironment, the conditions 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 by any Environmental Law.

 

**ERISA**means the United States Employee Retirement Income Security Act of 1974 and therules and regulations promulgated thereunder from time to time in effect.

 

**ERISA Event** means any event specified in Schedule 7 Part 2.

 

**ERISA Affiliate** means any trade or business (whether or not incorporated) that istreated as a single employer together with the Company under section 414 of theCode.

 

**Euro**means the single currency of the Participating Member States.

 

**Event of Default** means an event or circumstance specified as such in this Agreement.

 

**Excluded Facility** means:

 

(a)                                  an uncommitted Facility which is not anAffected Facility;

 

(b)                                 the Euro 12,420,000 term loan facility dated21st January, 1995 between CCF and Rhodia Silicone backed by the EuropeanInvestment Bank;

 

(c)                                  any Unaffected Credit Facility to the extentany reduction in Exposures under that Facility is refinanced in full at thetime of that reduction by an Unaffected Credit Facility with a final maturitydate no earlier than that of the refinanced Unaffected Credit Facility and onterms which do not put or seek to put the creditor of the refinanced UnaffectedCredit Facility in a preferred position as against any Lender as provided inClause 4.7(b);

 

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(d)                                 any Unaffected Committed Facility to theextent that:

 

(A)                              any reduction in Exposures under thatFacility is refinanced at the time of the reduction by an Unaffected CreditFacility (i) with a final maturity date falling no earlier than both (x) theTerm Date; and (y) the final maturity date of the refinanced Facility; and (ii)on terms that do not put or seek to put the creditor of the refinanced Facilityin a preferred position as against any Lender as provided in Clause 4.7(b); and

 

(B)                                the aggregate amount of Exposures under theUnaffected Committed Credit Facilities is not less than 95% of the aggregateamount of Exposures under the Unaffected Committed Facilities on the date ofthis Agreement at any time;

 

(e)                                  any sale of receivables or forfaitingFacility which is not an Affected Facility; and

 

(f)                                    each Refinanced Facility to the extentprepaid in full by the Refinancing Facilities Agreement.

 

**Existing Facility** means those Facilities which exist at the date of this Agreement,brief details of which are listed in Schedule 3.

 

**Existing Facility Agreement** means any agreement or instrumentconstituting or evidencing any Existing Facility.

 

**Existing Security Interests** means any Security Interest granted by anymember of the Group or any Borrowing Group Member over any asset of that memberin respect of any Existing Facility as at the date of this Agreement which iseither over the assets leased under existing Lease Facilities or as listed inSchedule 4.

 

**Exposure** in relation to any creditor under a Facility means at any time:

 

(a)                                  in relation to loan facilities, overdraftsand credit lines made available to any Borrowing Group Member the actualaggregate principal amount outstanding to that creditor at that time net ofcredit balances to the extent of any netting arrangement in effect at the time;

 

(b)                                 in relation to guarantees, letters of creditand similar financial accommodation issued by that creditor for the account ofany Borrowing Group Member the maximum aggregate contingent liability of thatcreditor under that instrument at that time;

 

(c)                                  in relation to any other financialaccommodation made available to any member of the Borrowing Group, the maximumaggregate net exposure or exposures or contingent liability of that creditor atthat time determined in accordance with the usual market practice and inrespect of a US synthetic lease shall be calculated by reference to the totaloutstanding notes and unrepaid investment of each lessor and owner participantthereunder;

 

(d)                                 in relation to any Derivative Instrument, theDerivative Liability in respect thereof; and

 

(e)                                  for the avoidance of doubt, excluding, ineach case, all related interest, fees, commission, banking, legal and othercharges and expenses,

 

and provided that: (i) anycontingent claim (including without limitation a contingent claim with respectto a guarantee or letter of credit facility) shall, until the contrary isdemonstrated to the reasonable satisfaction of the relevant creditor, becalculated on the basis that the amount claimed corresponds to a principalamount and the contingent claim will become payable in full; and (ii) if thereis a dispute between a Lender and the Company with respect to the calculationof its Exposure that Lender and the Company shall appoint (at the cost of theCompany) an independent expert to act as an expert and not as an arbitrator todetermine the same. The determination by such expert shall be binding on theparties.

 

**Facility** means any facility under which a member of the Group, any RelevantEntity or any Joint Venture Entity has or may incur Financial Indebtedness orunder which there is recourse to a member of the Group in respect of FinancialIndebtedness.

 

**Facility Agreement** means any agreement or instrument constituting or evidencing anyFacility.

 

**Fee Letter** means the letter(s) dated on or about the date of this Agreement andentered into between amongst others the Intercreditor Agent and the Companysetting out the amount of certain fees to be paid in connection with thisAgreement.

 

**Finance Document** means:

 

(a)                                  this Agreement;

 

(b)                                 an Accession Agreement;

 

(c)                                  the Security Sharing Agreement;

 

----

 

(d)                                 each Security Document;

 

(e)                                  the Subordination Agreement;

 

(f)                                    the Fee Letter; and

 

(g)                                 any other document designated as such inwriting by the Company and the Intercreditor Agent.

 

**Finance Party** means a Lender, each Facility Agent, the Security Agent and theIntercreditor Agent.

 

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

 

(a)                                  moneys borrowed and debit balances at banks;

 

(b)                                 any debenture, bond, note, loan stock orother similar instrument;

 

(c)                                  any acceptance credit;

 

(d)                                 receivables sold or discounted (otherwisethan on a non-recourse basis) including, for the avoidance of doubt,Securitisation Programmes and sale of receivables under Existing Facilities;

 

(e)                                  the acquisition cost of any asset to theextent payable before or after its acquisition or possession by the partyliable where the advance or deferred payment is arranged primarily as a methodof raising finance or financing the acquisition of that asset;

 

(f)                                    any lease (including, without limitation, acapital lease and each lease listed in Schedule 3) entered into primarily as amethod of raising finance or financing the acquisition of the asset leased;

 

(g)                                 any Derivative Instrument;

 

(h)                                 any amount outstanding under a Facility orany amount raised through any other transaction (including any forward sale orpurchase agreement) which has the commercial effect of a borrowing or raisingof money;

 

(i)                                     any counter-indemnity obligation in respectof any guarantee, indemnity, bond, letter of credit or any other instrumentissued by a bank or financial institution; or

 

(j)                                     any guarantee, indemnity or similar assuranceagainst financial loss of any person.

 

**Group**means the Company and its Subsidiaries.

 

**Group Structure Chart** means the chart describing the capital andshare ownership of all the members of the Group and the Borrowing Group deliveredas a condition precedent under Schedule 2.

 

**High Yield Bonds** means the 7.625% US dollar denominated senior notes due 2010, the 8.0%Euro denominated senior notes due 2010, the 8.875% US dollar denominated seniornotes due 2011 and the 9.25% Euro denominated senior notes due 2011 referred toin Schedule 3.

 

**Holding Company** means, in relation to a person, a company in respect of which thatperson is a Subsidiary.

 

**Insolvency Event** means any Event of Default specified in Clauses 11.7 (Insolvency) to11.12 (Analogous proceedings) (inclusive).

 

**Inter-Company Debt** means any debt incurred by an Obligor and outstanding to an Affiliateof the Company.

 

**Joint Venture Entity** means any unconsolidated subsidiary of the Company or joint ventureentity, in each case:

 

(a)                                  in which the Company owns or effectivelycontrols, directly or indirectly at least twenty per cent. (20%) of the capitaland voting rights; and

 

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(b)                                 in relation to the Financial Indebtedness ofwhich, no Borrowing Group Member has given a guarantee, indemnity or similarassurance against financial loss.

 

**Lease Facility** means a lease facility appearing under thesub-heading “Operating Lease” in Schedule 3.

 

**Lease Under Construction Facility** means an Existing Facility in relation to aleasing of a site under construction.

 

**Lender**means:

 

(a)                                  an Original Lender; or

 

(b)                                 any bank or financial institution which hasexecuted and delivered to the Intercreditor Agent an Accession Agreement inaccordance with Clause 14.3 (Transfers by Lenders) and Clause 14.4 (Accession),

 

in each case in its capacityas a Lender under each Affected Facility to which it is party and not any otherFacility.

 

**Lessor Reduction** means, in relation to certain Lease Facilities, the reduction ofExposure thereunder by provision of cash collateral or by way of an earlyprepayment of rent or the purchase by the lessee of the assets leased in anamount equal to 5 per cent. of the relevant lessor’s exposure under therelevant lease as such Exposure is set out against its name under the heading“Prepayable” in Schedule 3 to be made on or around the date of this Agreementand on the Term Date.

 

**Limited Recourse** means customary recourse by any provider of Financial Indebtednessincurred by a member of the Group in connection with securitisation ofreceivables pursuant to the existing terms of an existing SecuritisationProgramme referred to in Schedule 3 to the extent such recourse may be incurredby that member of the Group in accordance with such terms on the date of thisAgreement.

 

**Majority Lenders** means, on any date on which a determination is to be made, Lenderswhose Exposures aggregate at least 66 2/3 per cent. ofthe aggregate Exposures of all Lenders where the Exposures (converted into Euroat the Spot Rate of Exchange) are calculated by reference to the amount andSpot Rate of Exchange as at the last day of the month ending immediately priorto the date on which a determination is to be made.

 

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

 

(a)                                  the business, assets or financial conditionof the Company, a Material Subsidiary or the Group (taken as a whole); or

 

(b)                                 the ability of any Borrowing Group Member toperform or comply with any of its payment obligations (after taking intoaccount any guarantee in relation to that payment obligation which is availableon demand) or to comply with or perform any other material obligation under anyFinance Document or any Facility Agreement; or

 

(c)                                  the validity or enforceability of any FinanceDocument or any Facility Agreement or the effectiveness of any SecurityInterest over the assets purported to be covered by any Security Document, orthe value of the security (taken as a whole).

 

**Material Subsidiary** means at any time any Subsidiary of the Company whose net assets orEBITDA then equal or exceed 5 per cent. of the total net assets or EBITDA ofthe Group.

 

For this purpose:

 

(i)                                     the net assets or EBITDA of the relevantentity will be determined from its financial statements (consolidated if it hasSubsidiaries) upon which the latest audited financial statements of the Grouphave been based;

 

(ii)                                  if a Subsidiary of the Company becomes amember of the Group after the date on which the latest audited financialstatements of the Group have been prepared, the net assets or EBITDA of thatSubsidiary will be determined from its latest financial statements;

 

(iii)                               the total net assets or EBITDA of the Groupwill be determined from its latest audited financial statements, adjusted(where appropriate) to reflect the net assets or EBITDA of any company orbusiness subsequently acquired or disposed of; and

 

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(iv)                              if a Material Subsidiary disposes of all orsubstantially all of its assets to another Subsidiary of the Company, it willimmediately cease to be a Material Subsidiary and the other Subsidiary (if itis not already) will immediately become a Material Subsidiary; the subsequentfinancial statements of those Subsidiaries and the Group will be used todetermine whether those Subsidiaries are Material Subsidiaries or not.

 

If there is a dispute as towhether or not a company is a Material Subsidiary under paragraph (b) of thisdefinition, 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 10.1(Financial covenant definitions).

 

**Member**means, at any time, a member of the Co-ordinating Committee.

 

**Multiemployer Plan** means a multiemployer plan, as defined in Section 400(a)(3) of ERISA,to which the Company or any ERISA Affiliate is making or accruing (or isrequired to make or accrue) an obligation to make contributions, or has withinany of the preceding five plan years made or accrued (or was required to makeor accrue) an obligation to make contributions.

 

**Obligor** means: (i) the Company, an Original Obligor or an Additional Obligor(in each case party to this Agreement); (ii) a Borrowing Group Member (whetheror not party to this Agreement) and (iii) for the purposes of Clause 11(Default) only, any other member of the Group which is party to any FinanceDocument.

 

**Original Business Plan** means the Business Plan provided on 30thNovember, 2003 as validated by Ernst & Young.

 

**Original Financial Statements** means the consolidated financial statementsof the Company for the half-year ended 30th June, 2003 subject to a limitedreview by the Company’s statutory auditors.

 

**Overdraft Facilities** means any overdraft facility provided by a creditor to any member ofthe Group including any other facility which in the normal course of usageoperates on a fluctuating basis, together with any facility under which anyFinance Party guarantees such facility.

 

**Participating Member States** means a member state of the EuropeanCommunities that adopts or has adopted the Euro as its lawful currency underthe legislation of the European Union for European Monetary Union.

 

**Party**means a party to this Agreement.

 

**PBGC**means the Pension Benefit Guaranty Corporation referred to and defined in ERISAor any successor thereto.

 

**Permitted Reorganisation** means an amalgamation, demerger, merger orreconstruction involving the Company:

 

(a)                                  full details of which are provided by theCompany to the Intercreditor Agent in a timely manner prior to its takingplace; and

 

(b)                                 where the surviving entity (whether or not itis the Company) has a long-term corporate credit rating from Standard &Poor’s of BBB- or higher or an equivalent rating from Moody’s; and

 

(c)                                  in relation to which the Intercreditor Agenthas first received legal opinions from external counsel addressed to theFinance Parties, in form and substance satisfactory to the Intercreditor Agent,confirming:

 

(i)                                     either that the Company shall be thesurviving entity and that notwithstanding such amalgamation, demerger orreconstruction, the Transaction Documents shall remain at all times the legal,valid and binding obligations of the Company, enforceable in accordance withtheir terms; or

 

(ii)                                  that upon such amalgamation, demerger orreconstruction the surviving entity (not being the Company) will accede to theobligations of the Company under the Transaction Documents in full and that theTransaction Documents shall be the legal, valid and binding obligations of thesurviving entity, enforceable in accordance with their terms; and

 

(d)                                 where the place of incorporation andregistered head office of the surviving entity is within the European Union,

 

and to which theIntercreditor Agent (acting on the instructions of the Requisite Lenders) hasgiven its prior written consent.

 

----

 

**Plan**means a Single Employer Plan or a Multiemployer Plan.

 

**Prepayment Event** means any of:

 

(a)                                  the entry by the Company into anyamalgamation, demerger, merger or reconstruction which is not a PermittedReorganisation (including, without limitation, an amalgamation, demerger,merger or reconstruction resulting from or constituted by the Company making adisposal or disposals of assets, or a Material Subsidiary making a disposal ordisposals of assets to the Company, in each case under Clause 9.9 (Disposals)but excluding, for the avoidance of doubt, assets disposed of under Clause9.9(b)(iv)); or

 

(b)                                 any person, or group of persons acting inconcert, acquiring more than 50% of the issued and fully paid up share capitalor voting rights in the Company; or

 

(c)                                  the direct or indirect sale, transfer,conveyance or other disposition (other than by way of merger or consolidationpermitted by and made in accordance with the provisions of this Agreement) inone or a series of related transactions, of all or substantially all of theproperties or assets or business of the Company and its Subsidiaries taken as awhole; or

 

(d)                                 the adoption of a plan relating to theliquidation or dissolution of the Company.

 

**Refinanced Facilities** means each of the Existing Facilities to berefinanced under the Refinancing Facilities Agreement referred to in Schedule 3as “Refinanced Facilities”.

 

**Refinancing Facilities Agreement** means the refinancing facilities agreementto be entered into between, amongst others, the Company, each Borrowing GroupMember which is a borrower under the Refinanced Facilities and the OriginalLenders which are lenders under the Refinanced Facilities on terms set out inthe Refinancing Facilities Term Sheet in a form agreed between the partiesthereto.

 

**Refinancing Facilities Term Sheet** means the term sheet attached to therefinancing facilities term sheet letter from the Lenders party thereto to theCompany dated on or around the date of this Agreement in respect of theRefinancing Facilities Agreement, delivered to the Intercreditor Agent as acondition precedent document under Schedule 2 for identification purposes only.

 

**Relevant Entity** means an unconsolidated subsidiary of the Company or joint ventureentity, in each case:

 

(a)                                  in which the Company owns or effectivelycontrols, directly or indirectly, at least twenty per cent. (20%) of thecapital and voting rights; and

 

(b)                                 in relation to the Financial Indebtedness ofwhich, a Borrowing Group Member has given a guarantee, indemnity or similarassurance against financial loss.

 

**Relevant Proportion** in relation to an Affected Facility means the proportion which theaggregate of the Exposures of the Lenders with respect to that AffectedFacility bears to the aggregate of the Exposures of all the Lenders in relationto the Affected Facilities (and for these purposes, the Exposures are taken attheir Euro amount on any date on which a Relevant Proportion is ascertained).

 

**Requisite Lenders** means, at any date on which a determination is to be made, the Lenderswhose Exposures aggregate at least 50% of the aggregate Exposures of allLenders where the Exposures (converted into Euro at the Spot Rate of Exchange)are calculated by reference to the amount and Spot Rate of Exchange as at thelast day of the month ending immediately prior to the date on which adetermination is to be made.

 

**Rights Issue** means any equity rights issue by the Company generating net cashproceeds of no less than €300,000,000 to be launched by the Company by no laterthan 15th May, 2004 where net cash proceeds means cash proceeds net of anyTaxes and third party costs and expenses attributable to the issue as set outin reasonable detail in a certificate provided to the Intercreditor Agent bythe chief financial officer of the Company.

 

**Secured Intercreditor Period** means the period from the Commencement Dateup to and including the earlier of:

 

(a)                                  the Term Date; and

 

(b)                                 the date of notification of a DeclaredDefault by the Intercreditor Agent.

 

----

 

**Secured Intra Group Loan** means a loan made by a member of the Groupwhich is or, in accordance with the Security Principles is intended to be,subject to a Security Document.

 

**Securitisation Programmes** means each of the securitisation programmesreferred to under the heading “Securitisation Programmes” in Schedule 3existing at the date of this Agreement.

 

**Security Agent** means the security agent appointed pursuant to the Security SharingAgreement.

 

**Security Document** means any document entered into by a member of the Group with the SecurityAgent in an agreed form evidencing or creating a Security Interest over any ofits assets in accordance with the Agreed Security Principles***.***

 

**Security Interest** means any:

 

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

 

(b)                                 mortgage, pledge, lien, charge, assignment byway of security or for the purpose of providing security, hypothecation, rightin security, security interest or (to the extent applicable) trust arrangementfor the purpose of providing security; and

 

(c)                                  other security agreement or other arrangementhaving the effect of providing security (including, without limitation, cashcollateral and the deposit of moneys or property with a person with the primaryintention of affording such person a right of set-off).

 

**Security Sharing Agreement** means the security sharing agreement to beentered into between, among others, the Company and the Finance Parties in anagreed form in accordance with the Agreed Security Principles.

 

**Single Employer Plan** means a single employer plan, as defined in Section 400(a)(15) ofERISA, that is subject to Title IV of ERISA and that (a) is maintained for theemployees of the Company or any ERISA Affiliate or which is subject to theminimum funding requirements of Section 302 of ERISA or Section 412 of the Codeor (b) was so maintained and in respect of which the Company or any ERISAAffiliate could reasonably be expected to have liability under Section 4069 ofERISA in the event such plan has been or were to be terminated.

 

**Spot Rate of Exchange** means the Intercreditor Agent’s spot rate ofexchange for the purchase of the relevant currency with another currency at orabout 11.00 a.m. on a particular day.

 

**Subordination Agreement** means the subordination agreement to beentered into between, among others, certain Obligors, the Senior Agent (asdefined therein) and the Senior Creditors (as defined therein) in an agreedform.

 

**Subsidiary** means an entity from time to time of which a person has direct orindirect control or owns directly or indirectly more than fifty per cent (50%)of the share capital or similar right of ownership.

 

**Target Day** means a day on which the Trans-European Automated Real-Time GrossSettlement Express Transfer payment system is open for the settlement ofpayments in Euro.

 

**Tax**means any tax, levy, impost, duty or other charge or withholding of a similarnature (including any related penalty or interest).

 

**Tax Deduction** means a deduction or withholding for or on account of Tax from apayment under a Finance Document.

 

**Term Date** means the earlier of:

 

(a)                                  15th May, 2004; and

 

(b)                                 the date on which the Refinanced Facilitiesare unconditionally refinanced in full,

 

Provided that:

 

(A)                              where the Rights Issue is launched prior to15th May, 2004 but where the net proceeds are not received on or prior to 15thMay, 2004, (1) if the Rights Issue has been fully underwritten or subscribed onor prior to 15th May, 2004 on 

 

----

 

customary market terms, theTerm Date in paragraph (a) above will be extended to the expected date ofreceipt of such net proceeds; or (2) if the Rights Issue has not been fullyunderwritten or subscribed on or prior to 15th May, 2004, the IntercreditorAgent (at the request of the Company or any Finance Party, but acting on theinstructions of the Majority Lenders) may agree to extend the Term Date inparagraph (a) above to the expected date of receipt of such net proceeds; and

 

(B)                                in any event the Term Date may not beextended to a date falling after 30th June, 2004.

 

**Testing Date** has the meaning given to it in Clause 10.1 (Financial covenantdefinitions).

 

**Transaction Document** means:

 

(a)                                  a Finance Document;

 

(b)                                 any underwriting or subscription agreements(or other contractual arrangements having a similar effect) entered into inrelation to the Rights Issue;

 

(c)                                  any sale and purchase agreements (or othercontractual arrangements having a similar effect) entered into in relation tothe Asset Disposal Programme;

 

(d)                                 each Facility Agreement; or

 

(e)                                  any other document designated as such inwriting by the Company and the Intercreditor Agent.

 

**Unaffected Committed Facilities** means the Unaffected Credit Facilitieslisted under the heading “Committed Bank lines” in Schedule 3 (as refinancedfrom time to time after the date of this Agreement).

 

**Unaffected Credit Facility** means any debt or commercial paper Facilitywhich is not an Affected Facility with banks or other institutions forrevolving loans, term loans, overdraft facilities, letters of credit andguarantee facilities and excluding, for the avoidance of doubt, the USPP, theHigh Yield Bonds, EMTN and any other bonds, notes or similar instruments.

 

**USPP**means the USD 215,000,000 note purchase agreement and USD 75,000,000 note purchaseagreement each dated 30th July, 2002, as amended.

 

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

 

**1.2****                              ****Construction**

 

(a)                                  In this Agreement, unless the contraryintention appears, a reference to:

 

(i)**                                    ****acting in concert** has the meaning given to it in ArticleL.233-10 of the French *Code de Commerce*;

 

(ii)                                  documents being in an **agreed form** means documents (A) in a formpreviously agreed in writing by or on behalf of the Intercreditor Agent and theCompany, or (B) in a form substantially as set out in any Schedule to anyFinance Document, or (C) (if not falling within (A) or (B) above) in form andsubstance satisfactory to the Intercreditor Agent (acting on the instructionsof the Lenders);

 

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

 

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

 

an **authorisation** includes an authorisation,consent, approval, resolution, license, exemption, filing, registration ornotarisation;

 

**control** means the power to direct the management and policies of an entity,whether through the ownership of voting capital, by contract or otherwise;

 

**disposal** means a sale, transfer, grant, lease or other disposal, whethervoluntary or involuntary, including, without limitation, a capital contributionand “dispose” will be treated accordingly;

 

----

 

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

 

a **person** includes any individual, company, corporation,unincorporated association or body (including a partnership, trust, jointventure or consortium), government, state, agency, organisation or other entitywhether or not having separate legal personality;

 

a **regulation** includes any regulation, rule, official directive,request or guideline (whether or not having the force of law but if not havingthe force of law, being of a type with which any person to which it applies isaccustomed to comply) of any governmental, intra-governmental or supranationalbody, agency, department or regulatory, self-regulatory or other authority ororganisation;

 

the **equivalent in other currencies** or liketerms, unless otherwise agreed or the context otherwise requires, means inrelation to any amount expressed to be denominated in a currency other thanEuro, the equivalent thereof in Euro converted at the Spot Rate of Exchange forthe notional purchase of Euro with the currency concerned in the Paris foreignexchange market at or about 11.00 a.m. on the day on which any such calculationfalls to be made;

 

(iii)                               a currency is a reference to the lawfulcurrency for the time being of the relevant country;

 

(iv)                              a Default being **outstanding** means that it has not been remedied or waived;

 

(v)                                 a provision of law is a reference to thatprovision as extended, applied, amended or re-enacted and includes anysubordinate legislation;

 

(vi)                              a Clause, a Subclause or a Schedule is areference to a clause or subclause of, or a schedule to, this Agreement;

 

(vii)                           a person includes its successors, permittedassigns and permitted transferees;

 

(viii)                        a Finance Document, Transaction Document oranother document is a reference to that Finance Document, Transaction Documentor other document as amended or supplemented including without limitation bythis Agreement;

 

(ix)                                a time of day is a reference to Paris time;

 

(x)                                   for the purposes of Clause 4.2(a), **pro rata basis** means the amount by whichany Existing Facility is repaid, prepaid, redeemed, repurchased, purchased,defeased or otherwise reduced below its Exposure at the Calculation Pointexpressed as a percentage of such Existing Facility; and

 

(xi)                                for the purposes of Clause 8.25 (UnitedStates laws) and Clause 9.29 (United States laws) **Federal Power Act** means the United States Federal Power Act of1920, as amended, **holding company, affiliate**and **subsidiary company** have themeanings given to them in the PUHCA, **investmentcompany** and **controlled**have the meanings given to them in the United States Investment Company Act of1940, as amended, **public utility**has the meaning given to it in the Federal Power Act and **PUHCA** means The Limited States PublicUtility Holding Company Act of 1935, as amended.

 

(b)                                 Unless the contrary intention appears, areference to a “month” or “months” is a reference to a period starting on oneday in a calendar month and ending on the numerically corresponding day in thenext calendar month or the calendar month in which it is to end, except that:

 

(i)                                     if the numerically corresponding day is not aBusiness Day, the period will end on the next Business Day in that month (ifthere is one) or the preceding Business Day (if there is not);

 

(ii)                                  if there is no numerically corresponding dayin that month, that period will end on the last Business Day in that month; and

 

(iii)                               notwithstanding sub-paragraph (i) above, aperiod which commences on the last Business Day of a month will end on the lastBusiness Day in the next month or the calendar month in which it is to end, asappropriate.

 

(c)                                  Unless the contrary intention appears:

 

(i)                                     reference to a Party will not include thatparty if it has ceased to be a Party under this Agreement;

 

----

 

(ii)                                  an amount in Euro is payable only in the Eurounit;

 

(iii)                               a term used in any other Finance Document orin any notice given in connection with any Finance Document has the samemeaning in that Finance Document or notice as in this Agreement;

 

(iv)                              if there is an inconsistency between thisAgreement and any other Finance Document, this Agreement will prevail;

 

(v)                                 any obligation of an Obligor under theFinance Documents which is not a payment obligation remains in force for solong as any payment obligation is or may be outstanding under the FinanceDocuments; and

 

(vi)                              the headings in this Agreement do not affectits interpretation.

 

**1.3****                              ****Third Party Rights**

 

(a)                                  Unless expressly provided to the contrary ina Finance Document, a person who is not a party to a Finance Document may notenforce any of its terms under the Contracts (Rights of Third Parties) Act1999.

 

(b)                                 Notwithstanding any term of any FinanceDocument, the consent of any third party is not required for any variation(including any release or compromise of any liability under) or termination ofthat Finance Document.

 

**1.4****                              ****Security Sharing Agreementand Subordination Agreement**

 

This Agreement is to beentered into with the benefit of and subject to the Security Sharing Agreementand the Subordination Agreement.

 

**2.****                                     ****CONDITIONS PRECEDENT**

 

(a)                                  The obligations and acknowledgements of eachFinance Party to any other Party under this Agreement are subject to thecondition precedent that the Intercreditor Agent has notified each Party thatit has received the documents and other matters set out in Part 1 of Schedule 2in form and substance satisfactory to the Intercreditor Agent or (as required)the Lenders. Each Lender undertakes to confirm to the Intercreditor Agent inwriting that it is satisfied with the relevant documents referred to in Part 1of Schedule 2, promptly upon receipt of the same in a form and substancesatisfactory to it.

 

(b)                                 Unless otherwise expressly stated, theobligations and undertakings of the Obligors (but not the Lenders) under thisAgreement shall take effect on the date of this Agreement and continue in fullforce and effect until (i) the Term Date; or (ii) if a Default is outstandingon the Term Date until no Default is outstanding.

 

**3.****                                     ****SECURED INTERCREDITOR PERIOD**

 

**3.1****                              ****Duration**

 

The undertakings in thisClause remain in force during the Secured Intercreditor Period.

 

**3.2****                              ****No Enforcement Action**

 

Subject to Clause 3.1(Duration) no Finance Party shall take any Enforcement Action in respect of anydefault, event of default or termination event (howsoever described) under theAffected Facilities except in respect of a Default or an Event of Default underand in accordance with this Agreement as permitted under Clause 11.20(Enforcement Action) and otherwise in accordance with the Security SharingAgreement (when entered into).

 

**3.3****                              ****No additional Security Interest**

 

(a)                                  Subject to Clause 3.1 (Duration) no FinanceParty shall take any cash collateral, cash cover, guarantee, indemnity orSecurity Interest in respect of any Affected Facility.

 

(b)                                 Paragraph (a) does not apply to:

 

(i)                                     an Existing Security Interest;

 

(ii)                                  any Security Interest permitted under Clause9.7(b)(iv) or (v);

 

----

 

(iii)                               the Security Documents;

 

(iv)                              any guarantee existing on the date of thisAgreement and the guarantee given by the Guarantor under this Agreement; and

 

(v)                                 subject always to the provisions of theSecurity Sharing Agreement, the provision of Lessor Reduction and/or DerivativeDeposit.

 

**3.4****                              ****Novation**

 

Subject to Clause 3.1(Duration), no Finance Party shall assign, transfer or novate all or any partof its rights or obligations under any Affected Facility unless it has procuredthat the assignee, transferee or person to whom its rights and/or obligationsare novated, is a Lender under this Agreement or, on that assignment, transferor novation, becomes a Lender, in each case, under and in accordance with theprovisions of this Agreement.

 

**4.****                                     ****AFFECTED FACILITIES**

 

**4.1****                              ****Duration**

 

Each Obligor agrees to bebound by and the Company shall ensure that each of its Subsidiaries and eachBorrowing Group Member performs and complies with, the undertakings set out inthis Clause. The undertakings in this Clause shall, subject to the provisionsof Clause 2(b) (Conditions precedent) and 7.2(b)(iii) remain in force until theTerm Date. Subject to Clause 15 (Amendments and waivers) the consent of allFinance Parties is required for any amendment or waiver of the undertakings inthis Clause. Subject to Clause 15 (Amendments and waivers) any amendment orwaiver not agreed by a Finance Party in respect of the undertakings in thisClause shall not be binding on that Finance Party.

 

**4.2****                              ****Pro rata repayments**

 

(a)                                  If the Exposure owed to any person by theCompany, a Borrowing Group Member or other member of the Group under a Facility(other than an Excluded Facility) is repaid or prepaid (whether or not a voluntaryor mandatory prepayment), redeemed, repurchased, purchased, defeased (whetherby way of legal or covenant defeasance) or otherwise reduced below the Exposureof that person as at the Calculation Point, the Company and each BorrowingGroup Member shall and the Company will procure that each Borrowing GroupMember will ensure that the Exposure of each Lender under the AffectedFacilities to which that Borrowing Group Member is a party will be repaid,prepaid (whether or not a voluntary or mandatory prepayment), redeemed,repurchased, purchased (whether by way of legal or covenant defeasance) orotherwise reduced simultaneously by that Borrowing Group Member on a *pro rata* basis.

 

(b)                                 Paragraph (a) does not apply to any reductionin the Exposures of any person which arises solely as a result of:

 

(i)                                     any fluctuation in Exposures under anyOverdraft Facility;

 

(ii)                                  subject to and in accordance with Clause4.3(c), any fluctuation in Exposures under any foreign exchange Facilities orDerivative Instrument including the unwinding or replacement of any DerivativeInstrument or master agreement relating thereto prior to its original scheduledexpiry date provided that, except in the case of a replacement or unwindingpermitted under Clause 4.3(c)(iv), at the time of unwinding or replacement andafter the operation of any netting provision contained in that DerivativeInstrument or master agreement relating to that Derivative Instrument, the netExposure is “in the money” for the relevant member of the Group;

 

(iii)                               any fluctuation in exchange rates between theCalculation Point and the Commencement Date;

 

(iv)                              any reimbursement of an amount paid by acreditor in respect of its Exposure set out against its name in Schedule 3 forguarantees or letter of credits;

 

(v)                                 for the avoidance of doubt, the making of anyDerivative Deposit or Lessor Reduction;

 

(vi)                              subject to and in accordance with Clause 3.4(Novation), any person transferring, novating or assigning its Exposures to anyperson under any Facility Agreement;

 

(vii)                           operation of law;

 

----

 

(viii)                        any application of Excess Proceeds as definedin and subject to and in accordance with clause 4.10 of the High Yield Bondsand this Agreement;

 

(ix)                                subject to and in accordance with Clause4.3(d), any letter of credit, confirmation or guarantee expiring at itsoriginal maturity to the extent not required to be extended, replaced orrenewed by the relevant Borrowing Group Member;

 

(x)                                   subject to and in accordance with Clause4.4(a), original scheduled payments of rent under leasing Facilities;

 

(xi)                                subject to and in accordance with Clause4.4(b), any fluctuations in Exposures under the Securitisation Programmes;

 

(xii)                             prepayments under Lease Under ConstructionFacilities in a maximum aggregate amount equal to €15,000,000 (or itsequivalent in other currencies);

 

(xiii)                          a mandatory prepayment required to be madeunder a Lease Facility with the sale proceeds from a disposal of an assetleased under that Lease Facility or a payment required to be made under a LeaseFacility following the exercise of a purchase option by the lessee thereunderin respect of assets sold or contracted to be sold to a person outside theGroup;

 

(xiv)                         the transfer of Affected Facilities fromRhodia Ying Long to Rhodia China Co. Limited; or

 

(xv)                            the transfer of the loan drawn under thePrimester Facility from Primester to the Company and to the extent Primesterhas previously acceded to this Agreement as an Additional Obligor from theCompany to Primester.

 

(c)                                  Paragraph (a) does not apply to any reductionin the Exposures of any person under any Facility which is made with the priorwritten consent of the Requisite Lenders.

 

(d)                                 Paragraph (a) does not apply to any Facilitymade to a Borrowing Group Member from the date on which the disposal of thatBorrowing Group Member occurs and that Borrowing Group Member shall no longerbe a Borrowing Group Member for the purposes of this Agreement from that date.

 

**4.3****                              ****Maintenance of AffectedFacilities**

 

Subject to the provisions ofthis Agreement, the Affected Facilities will be maintained at the level (and inthe currency) of Exposures as at the Calculation Point and otherwise on thefollowing basis:

 
|   | (a) | (i) | each Affected Facility  will, on maturity or roll-over dates, be renewed or rolled over in accordance  with the terms of the relevant Affected Facility; |
|--------|-----|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

 

(ii)                                  any drawstop (howsoever described) under eachAffected Facility other than in respect of (A) an Event of Default referred toin Clause 11.20(a) or (B) any Declared Default shall be suspended and have noeffect for such purpose;

 

(iii)                               in the case of a renewal of a maturity or aroll-over under an Affected Facility, the new maturity or roll-over date shallbe renewed or rolled-over in accordance with Clause 4.6 (Renewals andRoll-Overs); and

 

(iv)                              on any renewal or roll-over there will be nochange in the level or currency of Exposures under the relevant AffectedFacility as at the Calculation Point.

 

(b)                                 Undrawn or unutilised portions of anyAffected Facility in excess of the maximum Exposure as at the Calculation Pointin respect of any Affected Facility as set out in Schedule 3, whether,committed or uncommitted, shall be permanently cancelled on the date of thisAgreement (save where necessary to maintain the level of principal Exposureunder the relevant Facility) and no fees or costs shall be payable on suchamounts with effect therefrom.

 
|   | (c) | (i) | Existing foreign exchange  facilities and Derivative Instruments will continue to be made available up  to the maximum net Exposure of the Lender concerned as at the Calculation  Point; |
|--------|-----|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

(ii)                                  Derivative Instruments that expire may beextended or replaced by the same Obligor up to the maximum Exposure of theapplicable Lender as at the Calculation Point;

 

----

 

(iii)                               payments on original scheduled due datesunder any foreign exchange facilities and Derivative Instruments will continueto be made (including by way of netting if so provided in the relevant instrument)in accordance with their terms; and

 

(iv)                              the Company will provide Derivative Depositin favour of the relevant Lender where required by that Lender and the amountsof such collateral will be adjusted (upwards or downwards by the payment orrelease of such collateral as the case may be) at the latest on the firstBusiness Day of each calendar month (commencing with January, 2004) PROVIDEDTHAT where the aggregate amount of Derivative Deposit provided pursuant to thisClause would (but for the limitations under this Agreement) otherwise haveexceeded €40,000,000 (or its equivalent in other currencies) then the Company:

 

(A)                              may substitute; or

 

(B)                                if required by that Lender shall unwind witha corresponding payment as the case may be,

 

that or another DerivativeInstrument (at the cost and expense of the Company) so that the aggregateamount of Derivative Deposit which the Company is to provide is equal to orless than €40,000,000 (or its equivalent in other currencies).

 

Prior to any substitution orunwinding of a Derivative Instrument, the cost and expense thereof and in thecase of an unwinding the corresponding payment shall be agreed between therelevant Lender and the Company. In the absence of such agreement such amountshall be determined by an independent third party expert appointed by theCompany and relevant Lender (at the cost of the Company) to act as an expertand not as an arbitrator for such purpose.

 
|   | (d) | (i) | Existing documentary  letter of credit facilities, confirmation facilities, bond facilities and  guarantee facilities will continue to be made available (in the same  currency) up to the maximum Exposure of the applicable Lender under such  facilities (as applicable) as at the Calculation Point subject to and in  accordance with paragraph (d)(ii) below; |
|--------|-----|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

(ii)                                  if any letter of credit, confirmation orguarantee expires it shall (A) if required by the relevant Borrowing GroupMember at any time during the Secured Intercreditor Period or (B) in the caseof an “extend or pay” letter of credit, confirmation or guarantee if the Lenderhas the option to extend or pay, in each case, be extended (whether by way ofre-issue or replacement or otherwise) within the maximum Exposure of theapplicable Lender to a date no earlier than the Term Date;

 

(iii)                               any scheduled payment of interest, fees andcommission in respect of any letter of credit facilities, confirmationfacilities, bond facilities and guarantee facilities will continue to be madein accordance with their terms; and

 

(iv)                              if any Lender makes a payment under any suchletter of credit facilities, confirmation facilities, bond facilities andguarantee facilities in favour of the beneficiary, that Lender may inaccordance with the terms of that Affected Facility make a claim on therelevant Borrowing Group Member for reimbursement of any sum paid or otherwisetreat any such sum paid by it as an advance of that amount to that memberbearing interest with a margin at the rate set out in Clause 4.5 (Interest,fees and commission).

 

(e)                                  Affected Facilities that are OverdraftFacilities will be made available and continue to be operated in accordancewith the net and gross limits (and in the currency) as at the Calculation Pointup to the maximum utilised amount under such Overdraft Facilities at the CalculationPoint.

 

(f)                                    This Clause 4.3 does not apply to anyAffected Facility which is made to a Borrowing Group Member from the date onwhich the disposal of that Borrowing Group Member occurs and that BorrowingGroup Member shall no longer be a Borrowing Group Member from that date.

 

**4.4****                              ****Continuation of otherFacilities**

 

(a)                                  Original scheduled payments of rent(including for the avoidance of doubt the capital/principal element of any rentor payment under Lease Facilities referred to in Schedule 3) shall continue tobe made in accordance with their terms under the relevant Lease Facilities.

 

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(b)                                 The Company shall maintain the SecuritisationProgrammes and related back-up lines in force at the date of this Agreement inaccordance with their terms.

 

**4.5****                              ****Interest, fees andcommission**

 

(a)                                  Subject to paragraphs (b) and (c), interest,fees, commissions and costs and expenses accrued under any Facility will bepaid promptly as they fall due in accordance with that Facility. Any paymentshall be made by the relevant Obligor free and clear and without deduction foror on account of any taxes.

 

(b)                                 Any amount advanced to any Obligor under anyExisting Facility in accordance with Clause 4.3(d)(iv) will be repayable at theend of the Secured Intercreditor Period.

 

(c)                                  The aggregate of the margin over theapplicable base rate, facility fee, guarantee fee or commission applicable toeach Affected Facility, as the case may be (excluding Derivative Instruments,the Lease Facilities and the Securitisation Programmes), from the date of thisAgreement will be the greater of (i) such margin, facility fee, guarantee feeor commission applicable to each Affected Facility on the date of thisAgreement; and (ii) 3.05 per cent. per annum on the relevant Exposure andotherwise in accordance with its terms.

 

(d)                                 The Company will pay to each Lender directlyon the date of the signing of this Agreement a flat fee calculated and payablein accordance with the Fee Letter.

 

(e)                                  The Company shall pay to the IntercreditorAgent (for its own account) agency fees in the manner and amount agreed in theFee Letter.

 

(f)                                    From the Commencement Date, the interestperiod for each Affected Facility:

 

(i)                                     shall be rolled over for periods of one monthin accordance with its terms;

 

(ii)                                  where a roll-over date falls within one monthof 26th March, 2004, the next interest period shall be shortened to fall onthat date and will be monthly thereafter; and

 

(iii)                               after 26th March, 2004, the payment dates forinterest, any facility fee, guarantee fee or commission applicable to eachAffected Facility during the Secured Intercreditor Period will be re-aligned sothat due dates for their payment will fall on the same roll-over date.

 

(g)                                 Where a letter of credit or guarantee orequivalent facility continues beyond the Term Date without the benefit of acounter-guarantee under the Refinancing Facilities Agreement or any otherguarantee or cash deposit, the guarantee fee or commission referred to inparagraph (c) above shall continue beyond the Term Date.

 

**4.6****                              ****Renewals and Roll-Overs**

 

(a)                                  The final maturity date of any AffectedFacility which occurs during the Secured Intercreditor Period shall be extendedto a date corresponding to the Term Date.

 

(b)                                 Any roll-over date which occurs under anAffected Facility during the Secured Intercreditor Period shall be adjusted tooccur on the date referred to in Clause 4.5(f).

 

----

 

(c)                                  The final maturity date of each RefinancedFacility shall be amended to occur on a date corresponding to the Term Date.

 

**4.7****                              ****Undertakings of theBorrowing Group**

 

Each BorrowingGroup Member shall and will procure that each of its Subsidiaries will ensurethat throughout the term of this Agreement and subject always to the SecuritySharing Agreement and the Subordination Agreement (when entered into):

 

(a)                                  subject to Clause 9.7(b) and Clause 9.16(d),no Security Interest or guarantee indemnity or like commitment, in any suchcase of whatever nature, shall be created or permitted to subsist by theCompany or any of its Subsidiaries in favour of any person under a Facility;

 

(b)                                 it shall not put or seek to put any creditorunder any Facility in a preferred position as against any Lender in particular,but without limitation, any covenant or default provision more favourable tothe counterparty in respect of a Facility than those under this Agreement,unless at the same time this Agreement is amended to substantially the sameextent and on substantially the same terms as provided to that counterparty;

 

(c)                                  no Borrowing Group Member shall make anypayment of or otherwise discharge any principal amount due or owing by it toany other member of the Group or a Relevant Entity:

 

(i)                                     if in respect of a Secured Intra Group Loanat any time; and

 

(ii)                                  if not in respect of a Secured Intra GroupLoan except:

 

(A)                              whilst no Default is outstanding if made inaccordance with the cash pooling arrangements existing at the date of thisAgreement or if made with respect to sales and purchases of goods, services ortrade receivables in its ordinary course of trading and which does not resultin a Default; and

 

(B)                                otherwise as permitted by and in accordancewith Clause 9.19 (Repayments of inter-group Financial Indebtedness),

 

unless otherwise agreed bythe Requisite Lenders; and

 

(d)                                 no amendment is made to, no interest amountspayable are increased and no scheduled maturity or repayment dates are advancedunder any Facility on or after the date of this Agreement, in each case, exceptas expressly set out herein.

 

**4.8****                              ****Restoration**

 

If the Exposure of anyLender reduces from its Exposure as at the Calculation Point other than inaccordance with this Agreement and the Security Sharing Agreement, the Lenderswill take such action as is necessary to ensure that the Exposure of thatLender is restored as if reduced subject to and in accordance with thisAgreement and the Security Sharing Agreement.

 

**4.9****                              ****Acknowledgements by eachParty**

 

(a)                                  Subject to Clauses 4.3(c) and 4.3(d) nothingcontained in this Agreement will oblige any Lender to make any further advance,or extend any credit to, any member of the Group.

 

(b)                                 Except as amended or supplemented by thisAgreement, the Facility Agreements remain in full force and effect.

 

(c)                                  Each Finance Document and Facility Agreementis subject to this Agreement. If there is any conflict between any otherFinance Document or Facility Agreement and this Agreement, this Agreement shallprevail.

 

**4.10****                       ****Override**

 

(a)                                  Clause 7 (Mandatory prepayment andcancellation), Clause 8 (Representations and warranties), Clause 9(Undertakings) and Clause 10 (Financial covenants) shall (i) take effect fromthe date of this Agreement; and (ii) with effect from the Commencement Date andthroughout the Secured Intercreditor Period shall override any representationsand warranties or undertakings in the Affected Facility Agreements which relateto the same or corresponding subject (but not otherwise).

 

----

 

(b)                                 The terms of each Affected Facility(including, in each case without limitation, the Affected Facility Agreements)are only overridden to the extent set out in paragraph (a) above and in allother respects the terms of each Affected Facility shall except as amended orsupplemented by or in accordance with another provision of this Agreementotherwise remain in full force and effect.

 

(c)                                  Nothing in this Agreement shall override,amend or replace any provision of an Affected Facility relating to the purposefor which the relevant Affected Facility may be used.

 

(d)                                 No Finance Document nor any act or omissionof any Finance Party during the Secured Intercreditor Period will constitute awaiver by that Finance Party of any rights or remedies available to it underany Transaction Document to which it is a party and those rights and remediesare reserved by the Finance Parties.

 

**4.11****                       ****Amendments to AffectedFacilities**

 

(a)                                  If this Agreement is not fully effective withrespect to any Affected Facility under its governing law or the place ofincorporation of the applicable Borrowing Group Member this Agreement shalloperate as a separate or collateral contract between each of the parties to theAffected Facility and the parties thereto shall (at the cost and expense of theCompany) and the Company shall procure that the applicable Borrowing GroupMember does promptly take all such reasonable steps and actions as may be necessaryto give full effect to the terms of this Agreement under such governing law orplace of incorporation including, without limitation, amendments to the termsof the corresponding Affected Facility Agreements under and in accordance withits governing law or place of incorporation.

 

(b)                                 Each Lender authorises its Facility Agent (ifany) to make any amendment required to be made pursuant to paragraph (a) aboveunder the Affected Facility Agreement to which it is a party.

 

**4.12****                       ****Negotiation in good faith**

 

If an event or circumstanceoccurs before 15th May, 2004 which could have a material impact (whetherpositive or negative) on the appropriateness of the Company’s refinancing planas contemplated by the Rights Issue, the Asset Disposal Programme and the RefinancingFacilities Term Sheet, as determined by the Majority Lenders and the Company,without prejudice to their rights under the Transaction Documents, the Lendersand the Company will negotiate in good faith with a view to agreeingappropriate amendments to that refinancing plan.

 

**4.13****                       ****Term Date Prepayment**

 

Each Obligor shall and theCompany shall ensure that each Borrowing Group Member shall ensure that anamount equal to 5 per cent. of the Exposure under each of the AffectedFacilities listed under the heading “Prepayable” in Schedule 3 (other than theRefinanced Facilities) and calculated by reference to the amount set out underthe heading “Exposure” in Schedule 3 is prepaid and cancelled on the Term Date.

 

**5.****                                     ****PAYMENTS**

 

**5.1****                              ****Place**

 

Unless otherwise expresslystated, all payments by an Obligor or a Lender under the Finance Documentsshall be made to the Intercreditor Agent at such office or bank in a principalfinancial centre of the country of the relevant currency as it may notify tothat Obligor or Lender for this purpose. Each Obligor and each Facility Agentshall provide satisfactory evidence to the Intercreditor Agent of each and allpayments made under a Facility Agreement. Unless otherwise expressly stated inthis Agreement, all other payments shall continue to be made as provided inthat Affected Facility (as amended pursuant to this Agreement).

 

**5.2****                              ****Funds**

 

Payments to theIntercreditor Agent shall be made for value on the due date at such times andin such funds as the Intercreditor Agent may specify to the Party concerned asbeing customary at the time for the settlement of transactions in the relevantcurrency in the place for payment.

 

----

 

**5.3****                              ****Distribution**

 

Where a sum is to be paid tothe Intercreditor Agent under the Finance Documents for another Party, theIntercreditor Agent is not obliged to pay that sum to that Party until it hasestablished that it has actually received that sum. The Intercreditor Agentmay, however, assume that the sum has been paid to it in accordance with thisAgreement, and, in reliance on that assumption, make available to that Party acorresponding amount. If the sum has not been made available but theIntercreditor Agent has paid a corresponding amount to another Party, thatParty shall forthwith on demand by the Intercreditor Agent refund thecorresponding amount together with interest on that amount from the date ofpayment to the date of receipt, calculated at a rate determined by theIntercreditor Agent to reflect its cost of funds.

 

**5.4****                              ****Currency**

 

(a)                                  A repayment or prepayment of any amount undera Facility is payable in the currency in which the Facility is denominated onits due date.

 

(b)                                 Interest is payable in the currency in whichthe relevant amount in respect of which it is payable is denominated.

 

(c)                                  Amounts payable in respect of costs, expensesand Taxes and the like are payable in the currency in which they are incurred.

 

(d)                                 Any other amount payable under the FinanceDocuments is, except as otherwise provided in this Agreement, payable in Euro.

 

**5.5****                              ****Set-off and counterclaim**

 

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

 

**5.6****                              ****Taxes**

 

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

 

(b)                                 If a Tax Deduction is required by law to bemade on a payment by an Obligor or any Finance Party to a Finance Party underthe Finance Documents, the amount of the payment due from the Obligor will beincreased to an amount which (after making the Tax Deduction) leaves an amountequal to the payment which would have been due if no Tax Deduction had beenrequired.

 

(c)                                  Any amount (including fees, costs andexpenses) payable under a Finance Document by an Obligor is exclusive of anyTax (including value added tax) which might be chargeable in connection withthat amount. If any such tax is chargeable, the Obligor must pay to the FinanceParty (in addition to and at the same time as paying that amount) an amountequal to the amount of that Tax.

 

**5.7****                              ****Non-Business Days**

 

If a payment under theFinance Documents is due on a day which is not a Business Day, the due date forthat payment shall instead be the next Business Day in the same calendar month(if there is one) or the preceding Business Day (if there is not).

 

**5.8****                              ****Taux effectif global**

 

In respect of a BorrowingGroup Member which is incorporated in France, for the purpose of ArticlesL.313-1, L.313-2, R 313-1 and R 313-2 of the Consumer Code (*Code de la Consommation*), each Partyacknowledges that:

 

(a)                                  by virtue of certain characteristics of theFacilities (including, without limitation, the variable interest rate and thatmember’s right to select the duration of an interest period), there-calculation *taux effectif global*in respect of a Facility for that member as a result of the adjustmentsreferred to in Clause 4.5 (Interest, fees and commission), above cannot becalculated on the date of this Agreement, but that, an indicative calculationof the *taux effectif global,*based on assumptions as to the period rate (*tauxde période*) and the period (*duréede période*)*,* will beset out in a letter from the Lender or its agent (as the case may be) to therelevant Borrowing Group Member; and

 

(b)                                 that letter shall form part of the Facilityto which it applies.

 

----

 

**6.****                                     ****NEWGUARANTE****E**

 

**6.1****                              ****Guarantee**

 

(a)                                  Subject to paragraph (b) below, the Guarantorirrevocably and unconditionally:

 

(i)                                     guarantees to each Finance Party under theAffected Facility Agreements to which such Finance Party is party, punctualperformance by each Borrowing Group Member which is party thereto of all itspayment obligations thereunder as amended or supplemented by this Agreement(including without limitation pursuant to Clause 4.5 (whether or not such amendmentor supplement is effective));

 

(ii)                                  undertakes with that Finance Party that,whenever that Borrowing Group Member does not pay any amount when due under orin connection with that Affected Facility Agreement, it must immediately ondemand by the Intercreditor Agent pay that amount as if it were the principalobligor; and

 

(iii)                               indemnifies that Finance Party immediately on demand against any cost,loss or liability suffered by that Finance Party if any obligation guaranteedby it is or becomes unenforceable, invalid or illegal or any amendment orsupplement of a payment obligation under an Affected Facility made or intendedto be made pursuant to this Agreement including without limitation Clause 4.5,is not effective for any reason; the amount of the cost, loss or liabilityunder this indemnity will be equal to the amount that Finance Party wouldotherwise have been entitled to recover.

 

(b)                                 The guarantee given by the Guarantor underthis Clause 6 is supplemental to and does not substitute or replace any otherguarantee existing at the date of this Agreement.

 

**6.2****                              ****Continuing guarantee**

 

This guarantee is acontinuing guarantee and will extend to the ultimate balance of all sumspayable by each Borrowing Group Member under the Affected Facility Agreements towhich it is party, regardless of any intermediate payment or discharge in wholeor in part.

 

**6.3****                              ****Reinstatement**

 

(a)                                  If:

 

(i)                                     any discharge (whether in respect of theobligations of any Borrowing Group Member or any security for those obligationsor otherwise) is made in whole or in part; or

 

(ii)                                  any arrangement is made on the faith of anypayment, security or other disposition which is avoided or must be restored oninsolvency, liquidation or otherwise without limitation,

 

the liability of the Guarantor will continue as if the discharge orarrangement had not occurred.

 

(b)                                 Each Finance Party may concede or compromiseany claim that any payment, security or other disposition is liable toavoidance or restoration.

 

**6.4****                              ****Waiver of defences**

 

The obligations of theGuarantor under this Clause 6 will not be affected by any act, omission orthing which, but for this provision, would reduce, release or prejudice any ofits obligations under this Clause 6 (whether or not known to it or any FinanceParty). This includes:

 

(a)                                  any time or waiver granted to, or compositionwith, any Obligor or other person;

 

(b)                                 any release of an Obligor or other personunder the terms of any composition or arrangement;

 

(c)                                  the taking, variation, compromise, exchange,renewal or release of, or refusal or neglect to perfect, take up or enforce,any rights against, or security over assets of, any Obligor or other person;

 

(d)                                 any non-presentation or non-observance of anyformality or other requirement in respect of any instrument or any failure torealise the full value of any security;

 

(e)                                  any incapacity or lack of power, authority orlegal personality of or dissolution or change in the members or status of anObligor or any other person;

 

(f)                                    any amendment (however fundamental) of a TransactionDocument or any other document or security;

 

(g)                                 any unenforceability, illegality orinvalidity of any obligation of any person under any Transaction Document orany other document or security; or

 

----

 

(h)                                 any insolvency or similar proceedings.

 

**6.5****                              ****Immediate recourse**

 

The Guarantor 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 Guarantor under thisClause.

 

**6.6****                              ****Appropriations**

 

Until all amounts which maybe or become payable by the Obligors under the Transaction Documents to theFinance Parties have been irrevocably paid in full, each Finance Party (or anytrustee or agent on its behalf) may:

 

(a)                                  without affecting the liability of theGuarantor under this Clause 6:

 

(i)                                     refrain from applying or enforcing any othermoneys, security or rights held or received by that Finance Party (or anytrustee or agent on its behalf) in respect of those amounts; or

 

(ii)                                  apply and enforce them in such manner andorder as it sees fit (whether against those amounts or otherwise); and

 

(b)                                 hold in an interest-bearing suspense accountany moneys received from the Guarantor or on account of the Guarantor’sliability under this Clause 6.

 

**6.7****                              ****Non-competition**

 

Unless:

 

(a)                                  all amounts which may be or become payable bythe Obligors under the Transaction Documents to the Finance Parties have beenirrevocably paid in full; or

 

(b)                                 the Intercreditor Agent otherwise directs,

 

the Guarantor will not, after a claim has been made or by virtue of anypayment or performance by it under this Clause 6:

 

(i)                                     be subrogated to any rights, security ormoneys held, received or receivable by any Finance Party (or any trustee oragent on its behalf); or

 

(ii)                                  claim, rank, prove or vote as a creditor ofany Obligor or its estate in competition with any Finance Party (or any trusteeor agent on its behalf).

 

The Guarantor must hold intrust for and immediately pay or transfer to the Intercreditor Agent for theFinance Parties any payment or distribution or benefit of security received byit (A) contrary to paragraphs (i) or (ii) above or (B) with respect to anycontribution or indemnity in respect of any payment made or moneys received onaccount of the Guarantor’s liability under this Clause 6 or in respect of anypayment or distribution or security from or on account of any Borrowing GroupMember or any right of set-off as against any Borrowing Group Member, subjectto and in accordance with the Subordination Agreement and in accordance withany directions given by the Intercreditor Agent.

 

**6.8****                              ****Termination**

 

The provisions of thisClause 6 shall continue in full force and effect and shall survive thetermination of this Agreement with respect to any Default which occurs on orbefore the Term Date notwithstanding the expiry of the Secured IntercreditorPeriod.

 

**7.****                                     ****MANDATORY PREPAYMENT AND CANCELLATIO****N**

 

**7.1****                              ****Prepayment Event**

 

(a)                                  The Company will notify the IntercreditorAgent promptly upon the occurrence of a Prepayment Event. Upon being notifiedby the Company of a Prepayment Event, the Intercreditor Agent shall promptlyinform each Lender.

 

----

 

(b)                                 Upon and at any time after having receivednotice of a Prepayment Event from the Intercreditor Agent, each Lender, actingthrough the Intercreditor Agent, may serve a notice of mandatory prepayment andcancellation on the Company in respect of its Facility and:

 

(i)                                     on the date of the notice the commitment ofsuch Lender under its Facility shall be cancelled; and

 

(ii)                                  on the date falling 30 Business Days afterthe date of service of such notice the Company shall prepay all participationsof such Lender in the Facility made to it in full through the IntercreditorAgent together with any other amounts then due in connection with suchparticipations.

 

(c)                                  The Company and each Lender party to anyDerivatives Instruments or letter of credit facilities, confirmationfacilities, bond facilities and guarantee facilities will negotiate in goodfaith with a view to providing to any such Lender the economic benefit of theprovisions of this Clause 7 if such Lender serves a notice on the Company forsuch purpose.

 

(d)                                 If the Company seeks the consent of theLenders to a proposed Permitted Reorganisation, no Lender will unreasonablydelay in informing the Intercreditor Agent whether it consents to such proposedPermitted Reorganisation.

 

**7.2****                              ****Disposals, equity andcapital market issues**

 

(a)                                  Where a disposal is made by any member of theGroup of any Asset including a disposal made pursuant to the Asset DisposalProgramme, for which aggregate proceeds since the date of this Agreement exceed€700,000,000 (or its equivalent in another currency), the Company must,promptly on completion of that disposal, apply an amount equal to 50 per cent.of the net disposal proceeds from any disposal which when aggregated with othersuch disposal proceeds exceeds €700,000,000 (or its equivalent in othercurrencies) in prepayment and/or cancellation of the principal amount of theAffected Facilities in accordance with Clause 7.3 (Application of proceeds)below.

 

(b)                                 (i)                                     Where the aggregate proceeds of a rightsissue launched by the Company prior to the Term Date exceed €300,000,000 (orits equivalent in another currency), the Company must promptly apply an amountequal to 25 per cent. of the net issuance proceeds of any issue in excessof€300,000,000 in prepayment and/or cancellation of the principal amount of theAffected Facilities in accordance with Clause 7.3 (Application of proceeds)below.

 

(ii)                                  This paragraph (b) shall not apply inrelation to shares issued:

 

(A)                              in connection with employee share optionschemes; or

 

(B)                                to another member of the Group;

 

(iii)                               The provisions of this Clause 7.2(b) shallsurvive termination of this Agreement and shall apply in respect of the netproceeds of any such rights issue launched prior to the Term Date but which arereceived after such date.

 

(c)                                  The Company must promptly upon receipt of thesame by any member of the Group apply an amount equal to 50 per cent. of thenet issuance proceeds of any issue of bonds or notes (including convertiblebonds or other equity-linked debt instruments), debt securities or othercapital markets instruments of any kind (whether publicly listed or privatelyplaced) by any member of the Group in prepayment and/or cancellation of theprincipal amount of the Affected Facilities in accordance with Clause 7.3(Application of proceeds) below.

 

(d)                                 In paragraphs (a), (b) and (c) above:

 

**net disposal proceeds** means any amount received by a member of theGroup as consideration for a disposal to a person which is not a BorrowingGroup Member, including the amount of any intercompany loan repaid tocontinuing members of the Group and including any Financial Indebtednessassumed or repaid, less all Taxes payable in the financial year in which thedisposal is effected or proceeds received and reasonable costs and expensesincurred by members of the Group in connection with the disposal or receipt asset out in reasonable detail in a certificate provided by the chief financialofficer of the Company; and

 

**net issuance proceeds** means any amount received by any member ofthe Group less all Taxes and reasonable costs and expenses incurred by membersof the Group in connection with that receipt.

 

----

 

**7.3****                              ****Application of proceeds**

 

(a)                                  Where an amount (the **Prepayment Amount**) is to be applied inprepayment and cancellation of the principal amount of the Affected Facilitiesin accordance with Clauses 7.1 (Prepayment Event) and 7.2 (Disposals, equityand capital market issues) above, the Company shall (subject to paragraphs (b)and (c) below) prepay and/or cancel the principal amount of each such AffectedFacility in accordance with paragraph (d) below in an amount equal to thatAffected Facility’s Relevant Proportion of the Prepayment Amount on the day onwhich the obligation under this Clause 7.3 to prepay and cancel arises.

 

(b)                                 Where the Prepayment Amount relates to netdisposal proceeds from the disposal of shares in a Borrowing Group Member (the **Disposed Group Member**), the Company mustensure that the Borrowing Group Members apply that amount in prepayment andcancellation *pro rata* accordingto their respective Relevant Proportions of the Affected Facilities (other thanan Affected Facility made to that Disposed Group Member). For the purposes ofthis Clause 7, any Facility made to a Disposed Group Member shall be deemed notto be an Affected Facility on and following the date on which the disposal ofthe Disposed Group Member occurs and the Disposed Group Member shall no longerbe a Borrowing Group Member from such date.

 

(c)                                  Where the Prepayment Amount relates to netdisposal proceeds from the disposal of an asset (other than shares in aBorrowing Group Member), the Company must apply, and must ensure that theBorrowing Group Members apply, an amount equal to such net disposal proceeds inprepayment and cancellation *pro rata*according to their respective Relevant Proportions of the Affected Facilities.

 

(d)                                 Any amount required by this Clause 7.3 to beapplied in prepayment and cancellation of an Affected Facility must be appliedby the Company to that Affected Facility (in accordance with its terms) firstin prepayment and cancellation of the principal amount outstanding under thatAffected Facility (if any) and second to any other amount in permanentprepayment and cancellation thereof and thirdly in permanent cancellation ofundrawn amounts (if any) under that Affected Facility. Where the Companyprepays an amount outstanding under an Affected Facility pursuant to thisClause it must at the same time permanently cancel the commitments of theLenders under that Affected Facility which correspond to the amount prepaid.

 

(e)                                  Any amount required by this Clause 7.3 to beapplied in prepayment and cancellation of the principal amount of an AffectedFacility and which is paid to or for the benefit of the relevant Lender shall,for the purposes of this Agreement and irrespective of any other appropriationof that amount by a Lender in connection with that Affected Facility, be takenas having reduced that principal amount *protanto*.

 

(f)                                    Where an amount is to be applied under thisClause 7.3 in prepayment of any amount outstanding under the AffectedFacilities, unless the date on which the payment is to be made by the Companyis the last day of an interest period (as defined in the relevant AffectedFacility Agreement), that amount shall be paid through the Intercreditor Agentinto an interest bearing blocked and secured account in France in the name ofthe Security Agent or the Intercreditor Agent. The Company irrevocablyauthorises the Intercreditor Agent to apply any amount deposited with it underthis paragraph (f) towards prepayment of the Affected Facilities on the lastday of the relevant interest period (as defined in the relevant AffectedFacilities Agreement) or earlier at the discretion of the Intercreditor Agent.

 

(g)                                 For the purposes of this Clause 7.3, acontingent claim of a Lender under an Affected Facility with respect to anybond, letter of credit, guarantee or similar instrument is prepaid by theCompany providing cash cover in an interest bearing blocked and secured accountin the name of the Security Agent or the Intercreditor Agent in respect of thatclaim to that Lender.

 

**8.****                                     ****REPRESENTATIONS AND WARRANTI****ES**

 

**8.1****                              ****Representations andwarranties**

 

Each Obligor makes therepresentations and warranties set out in this Clause 8 in respect of itselfand each of its Subsidiaries to each Finance Party. In addition, the Company makesthe representations and warranties set out in this Clause 8 in respect ofitself and each Borrowing Group Member to each Finance Party.

 

**8.2****                              ****Status**

 

(a)                                  It is a limited liability company, dulyincorporated and in good standing and validly existing under the laws of thejurisdiction of its incorporation; and

 

(b)                                 it has the power to own its assets and carryon its business as it is being conducted.

 

----

 

**8.3****                              ****Powers and 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, theTransaction Documents and the Refinancing Facilities Term Sheet to which it isor will be a party and the transactions contemplated by those documents.

 

**8.4****                              ****Legal validity**

 

Each Transaction Documentand the agreements relating to the Refinancing Facilities Term Sheet to whichit is or will be a party constitutes, or when executed in accordance with itsterms will constitute, its legally binding, valid and enforceable obligation.

 

**8.5****                              ****Non-conflict**

 

The entry into andperformance by it of, and the transactions contemplated by, the TransactionDocuments and the Refinancing Facilities Term Sheet do not and will notconflict with:

 

(a)                                  any law or regulation or judicial or officialorder; or

 

(b)                                 its or any of its Subsidiaries’constitutional documents; or

 

(c)                                  any document which is binding upon it or anyof its or its Subsidiaries’ assets.

 

**8.6****                              ****No Default**

 

(a)                                  No Default is outstanding on the date of thisAgreement or the Commencement Date and thereafter no Event of Default isoutstanding.

 

(b)                                 No event or circumstance is outstanding whichconstitutes (or, with the giving of notice, lapse of time, determination ofmateriality or the fulfilment of any other applicable condition or anycombination of the foregoing, might constitute) a default, termination event orearly prepayment event under any document which is binding on it or any of itsSubsidiaries.

 

(c)                                  Paragraphs (a) and (b) do not apply toDefaults or events or circumstances the full details of which have beennotified in writing to the Intercreditor Agent and the Lenders prior to thedate of this Agreement.

 

**8.7****                              ****Authorisations**

 

All authorisations requiredby it or desirable in connection with the entry into, performance, validity andenforceability of, and the transactions contemplated by, the TransactionDocuments and the implementation of the Refinancing Facilities Term Sheet, theAsset Disposal Programme and the Rights Issue have been, or will be when necessary,obtained or effected (as appropriate) and are, or will be when obtained oreffected, in full force and effect.

 

**8.8****                              ****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.

 

**8.9****                              ****Litigation**

 

(a)                                  No litigation, arbitration or administrativeproceedings are current or, to its knowledge, pending or threatened against iton the date of this Agreement and the Commencement Date which have or couldreasonably be expected to involve a claim or related claims in excess of€15,000,000 (or its equivalent in other currencies) and thereafter which haveor could reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Paragraph (a) does not apply to proceedingsthe full details of which have been provided to the Intercreditor Agent.

 

**8.10****                       ****Pari Passu Ranking**

 

Its obligations under theFinance Documents rank and will rank at least *paripassu* with all its other unsecured and unsubordinated obligationsexcept for obligations mandatorily preferred by law applying to companiesgenerally.

 

----

 

**8.11****                       ****Taxes on payments**

 

All amounts payable by eachObligor under the Finance Documents can be made free and clear of and withoutdeduction for or on account of any Tax.

 

**8.12****                       ****Stamp duties**

 

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

 

**8.13****                       ****Immunity**

 

(a)                                  The execution by each Obligor of each FinanceDocument constitutes, and its exercise of its rights and performance of itsobligations under each Finance Document will constitute, private and commercialacts done and performed for private and commercial purposes; and

 

(b)                                 no Obligor will be entitled to claim immunityfrom suit, execution, attachment or other legal process in any proceedingstaken in its jurisdiction of incorporation in relation to any Finance Document.

 

**8.14****                       ****No adverse consequences**

 

(a)                                  It is not necessary under the laws of itsjurisdiction of incorporation:

 

(i)                                     in order to enable any Finance Party toenforce its rights under any Finance Document; or

 

(ii)                                  by reason of the execution of any FinanceDocument or the performance by it of its obligations under any Finance Document,

 

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

 

(b)                                 no Finance Party is or will be deemed to beresident, domiciled or carrying on business in its jurisdiction ofincorporation by reason only of the execution, performance and/or enforcementof any Finance Document.

 

**8.15****                       ****Jurisdiction/governing law**

 

(a)                                  Each Obligor’s:

 

(i)                                     irrevocable submission under Clause 24(Jurisdiction) to the jurisdiction of the courts of England and the UnitedStates;

 

(ii)                                  agreement that this Agreement is governed byEnglish law; and

 

(iii)                               agreement not to claim any immunity to whichit or its assets may be entitled,

 

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

 

(b)                                 any judgement obtained in England or in theUnited States will be recognised and be enforceable by the courts of itsjurisdiction of incorporation.

 

**8.16****                       ****Security Interests andguarantees**

 

(a)                                  It is the legal and beneficial owner of theproperty which it purports to charge pursuant to the Security Documents. NoSecurity Interests, third party rights, options, claims and competing interestswhatsoever exist over any of its assets other than as permitted by Clause 9.7(Negative pledge).

 

(b)                                 The Security Interests granted or intended tobe granted under the Security Documents constitute first ranking security infavour of the Finance Parties.

 

(c)                                  The guarantees given by any Borrowing GroupMember in respect of an Affected Facility continue in full force and effectwith respect to the Affected Facilities as supplemented by this Agreement.

 

----

 

**8.17****                       ****Environmental matters**

 

It has obtained any and allEnvironmental 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.

 

**8.18****                       ****Financial Statements andBusiness Plan**

 

(a)                                  The consolidated financial statements of theCompany most recently delivered to the Intercreditor Agent (which, at the dateof this Agreement, are the Original Financial Statements):

 

(i)                                     have been prepared in accordance withaccounting principles and practices generally accepted in its jurisdiction ofincorporation, consistently applied; and

 

(ii)                                  give a true and fair view of its financialcondition (consolidated, if applicable) as at the date to which they were drawnup,

 

(b)                                 There has been no material adverse change inthe consolidated financial condition of the Group since the date of theOriginal Business Plan.

 

(c)                                  The projections and forecasts contained inthe Business Plan most recently delivered to the Intercreditor Agent were madein good faith and are based on reasonable assumptions and such Business Plandoes not as at its date omit any projections or forecasts which would make thatBusiness Plan misleading.

 

**8.19****                       ****Information**

 

(a)                                  (Unless the Company has notified theIntercreditor Agent (which shall notify the Lenders) in writing to the contraryprior to the date of this Agreement, correcting the relevant inaccuracy or lackof completeness) all written information (other than the Business Plan) (andincluding all reports) provided to the Co-ordinating Committee or any otherFinance Party by or on behalf of an Obligor prior to the date of, and inconnection with, this Agreement (the **Information**)was true, complete and accurate in all material respects as at the date it wassupplied.

 

(b)                                 All expressions of opinion contained in theInformation were made after careful consideration and were believed by theCompany or a Borrowing Group Member to be reasonable as at the date at whichthey were stated to be given.

 

(c)                                  The financial projections contained in theInformation were prepared on the basis of assumptions believed by the Companyor a Borrowing Group Member to be reasonable and prudent as at the date atwhich they were stated to be given.

 

(d)                                 Save as otherwise disclosed on or before thedate of delivery of the Information nothing has occurred since the date of thatInformation (or, if applicable, the date of any factual information containedtherein as referred to therein) which, if disclosed, would make thatInformation untrue or misleading in any material respect.

 

**8.20****                       ****Existing Facilities**

 

(a)                                  The details in Schedule 3 given in relationto each Existing Facility are, as at the date of this Agreement or, in the caseof the Exposures, the Calculation Point, true, accurate and complete.

 

(b)                                 Schedule 3 identifies each agreement underwhich any member of the Group or Relevant Entity can incur or has outstandingFinancial Indebtedness or to which there is recourse in respect of FinancialIndebtedness to any Borrowing Group Member in each case on the date of thisAgreement.

 

**8.21****                       ****Asset Disposal Programme andRights Issue**

 

The Company has no reason tobelieve that the Asset Disposal Programme and Rights Issue cannot be completedin full in accordance with the timetable applicable thereto and that anyauthorisation or consent necessary for the disposal of an asset referred to inthe Asset Disposal Programme or for the launch and implementation of the RightsIssue will not be forthcoming in time to allow that disposal or Rights Issue tobe implemented in accordance with that timetable.

 

----

 

**8.22****                       ****Inter-Company Indebtedness**

 

The list of Inter-Companyloans made to or by each Obligor provided to the Intercreditor Agent pursuantto this Agreement, being on the date of this Agreement the list set out inSchedule 7 (Inter Company Loans), is complete and correct in all materialrespects as at its date.

 

**8.23****                       ****Solvency of Obligors**

 

(a)                                  No proceedings of any nature are current or,to its knowledge, pending or threatened, for the winding-up or dissolution(other than a solvent winding up or dissolution) of, or in respect of anyinsolvency proceeding of any nature relating to any Obligor or each of itsSubsidiaries.

 

(b)                                 It has not defaulted on any of its paymentobligations under any Facility and the Obligors and each of its Subsidiariesare in a position to meet their respective scheduled payments as they fall due.

 

(c)                                  In relation to each Obligor (other thanPrimester in the case of paragraphs (i) and (ii) below) and its Subsidiariesincorporated or organised in the United States of America (on a consolidatedbasis):

 

(i)                                     the aggregate amount of its debts (includingits obligations (if any) under the Finance Documents and the FacilityAgreements) is less than the aggregate value (being the lesser of fair presentvaluation and present fair saleable value) of its assets (which for, avoidanceof doubt, include, without limitation, all rights of indemnification,contribution and subrogation);

 

(ii)                                  its capital is not unreasonably small tocarry on its business as it is being conducted;

 

(iii)                               it did not incur (on the date incurred) andwill not incur, debts beyond its ability to pay as they mature; and

 

(iv)                              it has not made a transfer or incurred anyobligation under any Finance Document or Facility Agreement with the intent tohinder, delay or defraud any of its present or future creditors.

 

Terms used in this paragraph(c) have the meanings given to them in the United States Bankruptcy Code of1978, as amended, and applicable fraudulent conveyance laws in the UnitedStates of America.

 

**8.24****                       ****Group Structure Chart**

 

As at the date of thisAgreement, the Group Structure Chart describes the corporate ownershipstructure of all members of the Group and the Borrowing Group and is true,complete and correct in all material respects.

 

**8.25****                       ****United States laws**

 

(a)                                  It is not:

 

(i)                                     a holding company, an affiliate of a holdingcompany or a subsidiary company of a holding company within the meaning of, orotherwise subject to regulation under PUHCA;

 

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

 

(iii)                               an investment company or a company controlledby an investment company; or

 

(iv)                              subject to regulation under any United StatesFederal or State law or regulation that limits its ability to incur orguarantee indebtedness.

 

(b)                                 ERISA

 

(i)                                     No ERISA Event that could reasonably beexpected to have a Material Adverse Effect has occurred or is reasonablyexpected to occur with respect to any Plan.

 

(ii)                                  The present value of the benefit liabilitiesunder each Plan, as determined for the purposes of Schedule B (ActuarialInformation) to such Plan’s most recently completed annual report (Form 5500Series) that has been filed with the required United States governmentalagencies, which Schedule B is complete and accurate in all material respects,did not, as of the date of such valuation, exceed the fair market value of theassets of such Plan by an amount that, when aggregated with any such excessunder any other Plan, could reasonably be expected to have a Material AdverseEffect, and since the date of such valuation there has been no material adversechange in such funding status that, when aggregated with any such change withrespect to any other Plan, could reasonably be expected to have a MaterialAdverse Effect.

 

----

 

(iii)                               Except as could not reasonably be expected tohave a Material Adverse Effect, neither it nor any ERISA Affiliate has incurredor is reasonably expected to incur any Withdrawal Liability to anyMultiemployer Plan.

 

(iv)                              Except as could not reasonably be expected tohave a Material Adverse Effect, neither it nor any ERISA Affiliate has beennotified by the sponsor of a Multiemployer Plan that such Multiemployer Plan isin reorganisation or has been terminated, within the meaning of Title IV ofERISA, and no such Multiemployer Plan is reasonably expected to be inreorganisation or to be terminated, within the meaning of Title IV of ERISA.

 

**8.26****                       ****Times for makingrepresentations and warranties**

 

The representations and warranties set out in this Clause 8:

 

(a)                                  are made by each Obligor on the date of thisAgreement; and

 

(b)                                 are deemed to be repeated by each Obligor onthe Commencement Date with reference to the facts and circumstances thenexisting; and

 

(c)                                  except those made under Clause 8.6(b) (NoDefault), Clause 8.8 (Title), Clause 8.11 (Taxes on payments), Clause 8.12(Stamp duties), Clause 8.18(c) (Financial Statements and Business Plan), Clause8.19 (Information), Clause 8.20 (Existing Facilities), Clause 8.21 (AssetDisposal Programme and Rights Issue), Clause 8.23 (Solvency of Obligors) andClause 8.24 (Group Structure Chart) are deemed to be repeated on each roll-overdate determined in accordance with Clause 4.6 (Renewals and Roll-Overs) and inthe case of Clause 8.18(c) (Financial Statements and Business Plan), on eachdate that a Business Plan is delivered after the Commencement Date, and in thecase of Clause 8.22 (Inter-Company Indebtedness) on each date that a list ofInter-Company loans referred to therein is delivered after the CommencementDate, in each case, with reference to the facts and circumstances thenexisting.

 

**9.****                                     ****UNDERTAKINGS**

 

**9.1****                              ****Duration**

 

The undertakings in thisClause 9 remain in force from the date of this Agreement until (i) the TermDate; or (ii) if a Default is outstanding on the Term Date, until no Default isoutstanding.

 

**9.2****                              ****Financial information**

 

(a)                                  The Company shall supply or procure that therelevant member of the Group supplies to the Intercreditor Agent in sufficientcopies for the Lenders:

 

(i)                                     as soon as the same are available (andsubject to paragraph (B) below in any event within 60 days of the end of itsrespective financial years):

 

(A)                              the audited consolidated financial statementsof the Company for the financial year; and

 

(B)                                the audited financial statements of eachBorrowing Group Member to the extent the same are required to be supplied underthe Facility Agreement to which it is party, subject to and in accordance withits terms;

 

(ii)                                  as soon as the same are available (and in anyevent with 60 days of the end of its respective financial half-years) therevised consolidated financial statements of the Company and to the extent thesame are required to be supplied under the Facility Agreement to which it isparty, a Borrowing Group Member for that half-year;

 

(iii)                               as soon as the same are available (and in anyevent within 60 days of the end of each of its respective financial quarters)the consolidated financial statements of the Company and to the extent the sameare required to be supplied under the Facility Agreement to which it is party,a Borrowing Group Member for that financial quarter;

 

(iv)                              as soon as they become available (and in anyevent within 30 days of the end of each calendar month) a copy of itsmanagement accounts for that calendar month which shall contain a profit andloss statement and cashflow and liquidity;

 

----

 

and

 

(v)                                 in respect of each Relevant Entity:

 

(A)                              as soon as the same are available (and in anyevent within 120 days of the end of each financial year of each RelevantEntity) the audited consolidated financial statements of that Relevant Entityfor that financial year; or

 

(B)                                if the audited consolidated financialstatements referred to in paragraph (A) above are not prepared by a RelevantEntity, as soon as the same are available (and in any event within 60 days ofthe end of each financial year of that Relevant Entity) the financialstatements of that Relevant Entity for that financial year; and

 

(C)                                provided the same are prepared by a RelevantEntity and the Company is entitled to receive them, as soon as the same areavailable (and in any event within 45 days of the end of each financial halfyear of each Relevant Entity) the financial statements (consolidated if prepared)of that Relevant Entity for that half year.

 

(b)                                 Subject to paragraph (c) below, the Companyshall ensure that:

 

(i)                                     each set of financial statements delivered byit pursuant to paragraphs (a)(i) to (a)(iv) above:

 

(A)                              is prepared in accordance with accountingprinciples and practices generally accepted in France consistently applied;

 

(B)                                shall give a true and fair view of thefinancial condition of the Group as at the end of the period to which thosefinancial statements relate and of the results of its operations during thatperiod; and

 

(C)                                is (in the case of the financial statementsreferred to in paragraph (a)(i)(A) above) audited by an internationallyrecognised independent qualified firm of auditors.

 

(c)                                  The Company shall ensure that each set offinancial statements delivered pursuant to paragraph (a)(v) above is preparedin accordance with either:

 

(i)                                     accounting principles and practices generallyaccepted internationally if, in the place of establishment or incorporation ofthe Relevant Entity concerned there is a legal requirement to do so; or

 

(ii)                                  if no such requirement exists, accountingprinciples and practices generally accepted in the place of establishment orincorporation of the Relevant Entity concerned,

 

in each case consistently appliedand shall give a true and fair view of the financial condition of the RelevantEntity to which they relate as at the end of the period to which those accountsrelate and of the results of its operations during that period.

 

(d)                                 Together with each set of financialstatements delivered under paragraph (a)(i)(A) above, the Company shall delivera Compliance Certificate signed by its statutory auditors setting out inreasonable detail (to the Intercreditor Agent’s reasonable satisfaction)computations in respect of the definitions used in and for the purposes ofestablishing compliance with the financial covenants in Clause 10 (Financialcovenants) as at the Testing Date (as defined in Clause 10) to which thefinancial statements with which the relevant Compliance Certificate wasdelivered were made.

 

(e)                                  Together with each set of financialstatements delivered under paragraph (a)(ii) above, the Company shall deliver aCompliance Certificate signed by its chief financial officer setting out inreasonable detail computations in respect of the definitions used in and forthe purposes of establishing compliance with the financial covenants in Clause10 (Financial covenants) as at the Testing Date (as defined in Clause 10) towhich those financial statements were made up.

 

(f)                                    Together with each set of financialstatements delivered under paragraph (a)(i) and (a)(ii) above, the Companyshall deliver to the Intercreditor Agent a certificate listing the MaterialSubsidiaries as determined from those financial statements.

 

(g)                                 The Company shall supply the IntercreditorAgent (in sufficient copies for the Lenders) with:

 

(i)                                     an update of the Business Plan validated byErnst & Young (to include an analysis and projections of liquidity andcash) on 31st December, 2003 and quarterly thereafter in accordance with theagreed scope of work;

 

(ii)                                  (A) as soon as the same are available and inany event within 12 Business Days of the end of each calendar month, details ofthe amounts of consolidated gross and net cash available to the Company and theExposures under the Facilities commencing with the calendar month ending 31stDecember, 2003; and (B) shall use its best efforts to supply monthly liquidityand cash flow forecasts for each calendar month including a 12-month rollingforecast for the next twelve months commencing with the calendar month ending30th April, 2004;

 

----

 

(iii)                               as soon as the same are available and in anyevent within 10 Business Days of the end of each calendar month, a list of allInter-Company loans made to or by each Obligor as at the end of that calendarmonth;

 

(iv)                              such information, access to personnel andother assistance as is necessary to enable the Finance Parties to monitor thecash flow of the Group and compare it with the liquidity and cash flowforecast; and

 

(v)                                 such other information in respect of any ofthe Obligors as the Intercreditor Agent (acting on the instructions of theMajority Lenders) may reasonably request.

 

(h)                                 Promptly on the supply to the IntercreditorAgent of the annual financial statements for the financial year of 2003, theCompany shall ensure the availability of senior management of the Company for apresentation to the Lenders.

 

**9.3****                              ****Information-miscellaneous**

 

Each Obligor shall and theCompany shall ensure that each Borrowing Group Member will supply to theIntercreditor Agent in sufficient copies for the Lenders:

 

(a)                                  all notices and documents dispatched by it toits shareholders (or any class of them) or its creditors (or any class of them)at the same time as they are dispatched;

 

(b)                               (i)                                       to the extent legally permissible, anyreport, notice or statement made or issued to any regulatory authority or stockexchange of an Obligor promptly upon making or issuing the report, notice orstatement; and

 

(ii)                                  where the report, notice or statement refersto the Lenders, the Company shall where legally permissible, give theIntercreditor Agent opportunity to comment on the report, notice or statementprior to its making or issue;

 

(c)                                  promptly, a copy of any material notificationreceived from any rating agency in respect of the Company’s long term creditrating;

 

(d)                                 promptly upon becoming aware of them, detailsof any material litigation, arbitration or administrative proceedings which arecurrent, threatened or pending which it is or may become involved in; and

 

(e)                                  promptly, such further information in thepossession or control of any member of the Group regarding its financialcondition, structure, business and management as any Finance Party mayreasonably request.

 

**9.4****                              ****Notification of Default**

 

(a)                                  The Company or relevant Obligor shall,promptly upon becoming aware of the occurrence of the same, notify theIntercreditor Agent of:

 

(i)                                     any Default in respect of it or itsSubsidiaries (and the steps, if any, being taken to remedy it); or

 

(ii)                                  any event or circumstance which constitutes(or, with the giving of notice, lapse of time, determination of materiality orthe fulfilment of any applicable condition or any combination of the foregoing,might constitute) a default, termination event or early prepayment event underany document which is binding on it or any of its Subsidiaries.

 

(b)                                 The Intercreditor Agent will promptly notifyeach Lender (or where appropriate each Facility Agent acting on behalf of aLender) of any such Default or event or circumstance upon receipt ofnotification from the Obligor.

 

(c)                                  Promptly upon any request by theIntercreditor Agent (acting in good faith) the Company must supply to theIntercreditor Agent a certificate, signed by two of its authorised signatorieson its behalf, certifying that no Default is outstanding or, if a Default isoutstanding, specifying the Default and the steps, if any, being taken toremedy it.

 

----

 

**9.5****                              ****Authorisations**

 

Each Obligor shall and theCompany shall ensure that each Borrowing Group Member will promptly:

 

(a)                                  obtain, maintain and comply with the termsof; and

 

(b)                                 supply certified copies to the IntercreditorAgent of,

 

any authorisation requiredor desirable under any law or regulation to enable it to enter into or to performits obligations under, or for the performance, validity or enforceability of,and the transactions contemplated by, any Transaction Document and theimplementation of the Asset Disposal Programme, the Rights Issue and theRefinancing Facilities Term Sheet.

 

**9.6****                              ****Pari passu ranking**

 

Each Obligor shall and theCompany shall ensure that each Borrowing Group Member will procure that itsobligations under the Finance Documents and the Affected Facility Agreements doand will rank at least *pari passu*with all its other present and future unsecured and unsubordinated obligations,except for obligations mandatorily preferred by law applying to companiesgenerally.

 

**9.7****                              ****Negative pledge**

 

(a)                                  No Obligor shall, and the Company shallprocure that no other member of the Group or a Borrowing Group Member will,create or permit to subsist any Security Interest on any of its assets.

 

(b)                                 Paragraph (a) does not apply to:

 

(i)                                     Existing Security Interests as set out inPart 1 of Schedule 4 (List of Existing Security Interests);

 

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

 

(iii)                               any Security Interest over assets granted orto be granted in favour of a Finance Party under a Security Document or underor in accordance with Clause 7.3(g);

 

(iv)                              any Security Interest over assets other thanthose identified in the Agreed Security Principles or referred to in paragraph(iii) above, to the extent necessary in order to maintain, refinance, replace or,to the extent permitted by this Agreement, incur new Financial Indebtedness upto a maximum aggregate amount of €60,000,000 (or its equivalent in othercurrencies); or

 

(v)                                 any Derivative Deposit or Lessor Reduction.

 

**9.8****                              ****Transactions similar tosecurity**

 

(a)                                  No Obligor shall, and the Company shallprocure that no other member of the Group or a Borrowing Group Member will:

 

(i)                                     sell, transfer or otherwise dispose of any ofits assets on terms whereby it is or may be leased to or re-acquired oracquired by a member of the Group or any of its related entities; or

 

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

 

in circumstances where thetransaction 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 anydisposal of receivables made in respect of the existing SecuritisationProgrammes with Limited Recourse only.

 

**9.9****                              ****Disposals**

 

(a)                                  No Obligor shall, and the Company shallprocure that no other member of the Group or a Borrowing Group Member will,either in a single transaction or in a series of transactions, whether relatedor not, dispose of all or any part of its assets.

 

(b)                                 Paragraph (a) does not apply to:

 

----

 

(i)                                     disposal of stock-in-trade, businessinventories, fixtures and fittings, furniture and other office equipment, madein the ordinary course of business of the disposing entity;

 

(ii)                                  disposal of assets (other than shares) inexchange for other assets comparable or superior as to type, value and quality;

 

(iii)                               disposal of assets (other than the businessof the Company) or shares as part of an intra-group re-organisation from oneObligor to another Obligor on arms’-length terms, in each case, subject to andin accordance with Clause 9.11 (Mergers, acquisitions and intra-groupre-organisations);

 

(iv)                              disposal of assets for cash in accordancewith the Asset Disposal Programme and other disposal of assets for cash where50% of the net proceeds of any such disposal are applied in mandatoryprepayment and cancellation of the Affected Facilities subject to and inaccordance with Clause 7.2 (Disposals, equity and capital market issues) ofthis Agreement;

 

(v)                                 disposal of assets made in respect of theexisting Securitisation Programmes with Limited Recourse only;

 

(vi)                              disposal for cash on a non-recourse basis ofVAT credits; or

 

(vii)                           transactions with the prior written approvalof the Majority Lenders.

 

**9.10****                       ****Change ofbusiness/registered office**

 

(a)                                  The Company shall procure that no substantialchange is made to the general nature or scope of the business of the Company orthe Group (taken as a whole) from that carried on at the date of thisAgreement.

 

(b)                                 The Company shall not change its place ofincorporation or registered head office to one outside the European Union.

 

**9.11****                       ****Mergers, acquisitions andintra-group re-organisations**

 

(a)                                  No Obligor shall, and the Company shallprocure that no other member of the Group or a Borrowing Group Member willenter into any amalgamation, demerger, merger, reconstruction orre-organisation otherwise than under an intra-group re-organisation involvingthe transfer of assets (including of a business other than the business of theCompany) and/or shares provided that such intra-group re-organisation:

 

(i)                                     unless a Permitted Reorganisation, does notinvolve the Company;

 

(ii)                                  does not affect any of its assets which areor are intended to be subject to Security Interests granted in favour of theLenders or, to the extent that it does affect any such assets, substituteSecurity Interests are granted over assets of a greater or equivalent valueprior to such intra-group re-organisation (together with legal opinions) ineach case in a form and substance satisfactory to the Majority Lenders;

 

(iii)                               does not or is not reasonably likely toresult in a Material Adverse Effect or a Default;

 

(iv)                              does not affect any of the rights or remediesof the Lenders under the Finance Documents or the Affected Facility Agreements;and

 

(v)                                 where it involves a Borrowing Group Member(other than by way of a transfer of its shares), the Lender or Lenders party toa Facility with that Borrowing Group Member, have provided their prior writtenconsent.

 

(b)                                 Save as allowed by paragraph (c) below,

 

(i)                                     each Obligor which is not a Joint VentureEntity shall not;

 

(ii)                                  each Obligor which is a Joint Venture Entityshall use its best efforts not to; and

 

(iii)                               the Company shall ensure that no member ofthe Group will, and to the fullest extent within its power or control that no JointVenture Entity will,

 

acquire any assets orbusiness or make any investment in any business, shares or other securities.

 

----

 

(c)                                  Paragraph (b) above shall not prevent:

 

(i)                                     acquisitions or investments made in theordinary course of trade;

 

(ii)                                  acquisitions with an aggregate considerationin any financial year of the Group not in excess of €10,000,000 or itsequivalent;

 

(iii)                               acquisitions made with the prior consent ofthe Intercreditor Agent (acting on the instructions of the Majority Lenders);or

 

(iv)                              capital contributions made to RelevantEntities or Joint Venture Entities by way of inter-company loan or sharecapital provided that the aggregate amount of such contributions made since thedate of this Agreement less the aggregate amount of (A) contributions repaiddirectly or indirectly to the Company; and (B) the amount of any dividenddistributed directly or indirectly to the Company with respect to that capitalcontribution to the extent in excess of the dividends projected to be receivedby the Company and Subsidiaries on a fully consolidated basis by reference tothe Original Business Plan does not exceed at any time € 50,000,000 (or itsequivalent in another currency), taking into account any capital contributionsmade under Clause 9.16 (Lending and borrowing).

 

**9.12****                       ****Capital expenditure**

 

No Obligor (except if aRelevant Entity) shall and the Company shall procure that no other member ofthe Group shall incur any tangible or intangible capital expenditure exceptwhere such capital expenditure in aggregate does not exceed 110 per cent. perannum of the aggregate amount of capital expenditure per annum set out in theBusiness Plan.

 

**9.13****                       ****Insurance**

 

Each Obligor shall and theCompany shall ensure that each Material Subsidiary and each Borrowing GroupMember insures its business and assets with insurance companies to such anextent and against such risks as companies engaged in a similar businessnormally insure.

 

**9.14****                       ****Maintenance of status**

 

Each Obligor shall, and theCompany shall procure that each Material Subsidiary and each Borrowing GroupMember will:

 

(a)                                  do all such things as are necessary tomaintain its corporate existence; and

 

(b)                                 ensure that it has the right and is dulyqualified to conduct its business as it is conducted in all applicablejurisdictions.

 

**9.15****                       ****Amendments to Facilities**

 

(a)                                  No Obligor shall and the Company shall ensurethat no Borrowing Group Member will agree to amend, or seek a waiver of, anyterm of any Facility or exercise any right to terminate or reduce any amountavailable for drawing under any Facility Agreement.

 

(b)                                 Paragraph (a) does not apply to:

 

(i)                                     any term of any Facility preventing anyObligor from complying with its obligations under this Agreement; or

 

(ii)                                  any agreement to extend the maturity of anyFacility; or

 

(iii)                               any amendment required to be made under theterms of this Agreement including, without limitation, under Clause 9.21(a)(Rights Issue and Other Matters).

 

**9.16****                       ****Lending and borrowing**

 

(a)                                  Subject to paragraphs (b) and (c) below, noObligor shall and the Company shall ensure that no member of the Group or anyBorrowing Group Member will make any loans or provide any other form of credit(including, without limitation, vendor credit) to any person.

 

(b)                                 Paragraph (a) does not apply to loans or anyother form of credit provided to an Obligor in accordance with theSubordination Agreement when entered into and otherwise in accordance with itscash pooling arrangements.

 

----

 

(c)                                  Paragraph (a) does not apply to 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 this Agreement less the aggregate amount of (A) such contributions repaiddirectly or indirectly to the Company; and (B) the amount of any dividenddistributed directly or indirectly to the Company with respect to that capitalcontribution to the extent in excess of the dividends expected to be receivedby reference to the latest Business Plan, does not exceed at any time €50,000,000 (and after the Term Date, subject to and in accordance with theRefinancing Facilities Agreement, €90,000,000), taking into account any capitalcontributions made under Clause 9.11 (Mergers, acquisitions).

 

(d)                                 Subject to the provisions of Clause 9.17(c),no Obligor shall and the Company shall ensure that no Borrowing Group Memberwill give any guarantee or indemnity to or for the benefit of any person inrespect of any obligation of any other person or enter into any document underwhich it assumes any liability of any other person except under the ExistingFacilities and this Agreement.

 

**9.17****                       ****Financial Indebtedness**

 

The Company shall not and itshall ensure that no member of the Group will and, to the fullest extent withinits power or control, no Relevant Entity shall incur any Financial Indebtedness(including, without limitation, guarantees of joint venture entities) except:

 

(a)                                  Financial Indebtedness outstanding under theExisting Facilities at the date of this Agreement and the RefinancingFacilities Agreement;

 

(b)                                 Financial Indebtedness owed to another memberof the Group on the date of this Agreement and thereafter in accordance withits cash pooling arrangements and in each case which is subordinated subject toand in accordance with the Subordination Agreement when entered into;

 

(c)                                  refinancing of Financial Indebtedness underUnaffected Credit Facilities (other than Unaffected Committed Facilities)existing at the date of this Agreement up to a maximum aggregate amount of€50,000,000 (or its equivalent in other currencies) by an Unaffected CreditFacility with a final maturity date no earlier than both (A) the Term Date; and(B) the final maturity of the refinanced Unaffected Credit Facility and onterms which do not put or seek to put the creditor of the refinanced UnaffectedCredit Facility in a preferred position as against any Lender;

 

(d)                                 refinancing of Financial Indebtedness underUnaffected Committed Facilities by Unaffected Credit Facilities (i) with afinal maturity date falling no earlier than (x) the Term Date; or (y) the finalmaturity date of the refinanced Facility; and (ii) on terms that do not put orseek to put the creditor of the refinanced Facility in a preferred position asagainst any Lender as provided in Clause 4.7(b);

 

(e)                                  Financial Indebtedness incurred by theCompany under any Facility which is not an Existing Facility which does not orcould not be expected to have a Material Adverse Effect or result in a Default;

 

(f)                                    Financial Indebtedness in respect ofOverdraft Facilities that may fluctuate in accordance with their terms up tothe maximum Exposure under such overdraft facilities as at the CalculationPoint;

 

(g)                                 Financial Indebtedness in respect of anyissue of bonds, notes, debt securities or capital markets instruments, 50% ofthe net proceeds of which are applied pursuant to Clause 7.2(c) in mandatoryprepayment and cancellation of the Affected Facilities; or

 

(h)                                 any other Financial Indebtedness incurredafter the date of this Agreement, by a Subsidiary of the Company or a RelevantEntity, which at any time does not exceed a maximum aggregate amount of€50,000,000 (or its equivalent in other currencies).

 

**9.18****                       ****Shares and dividends**

 

(a)                                  The Company shall not:

 

(i)                                     convene a meeting of shareholders to considera resolution to make any distribution or pay any dividend, or other payment (incash or in kind) in respect of any of its share capital or any management feesor charges in favour of its shareholders’ or its shareholders’ Affiliates; or

 

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(ii)                                  reduce, redeem, repurchase or retire any ofits share capital.

 

(b)                                 The Company shall (to the fullest extentpermitted by applicable law):

 

(i)                                     procure that no Material Subsidiary entersinto any arrangement or agreement which may restrict its ability to declare,make or pay any dividend on or in respect of its share capital (or any class ofits share capital) or restrict its ability to distribute any dividend; and

 

(ii)                                  procure that each Material Subsidiary will tothe extent necessary to ensure that the Company has funds available to it toservice its payment obligations under the Finance Documents and the FacilityAgreements, declare, make and pay in cash dividends in respect of its shares orreimburse intercompany loans unless doing so will prevent that MaterialSubsidiary from being able to meet its payment obligations which are then due andpayable and provided that (A) no more than an aggregate amount equal to €150,000,000 (or its equivalent in other currencies) shall be distributed byRhodia Inc. by way of dividend or reimbursement of intercompany loans on andafter the date of this Agreement with sale proceeds from disposals of itsassets and (B) such reimbursement of intercompany loans shall be made inpriority to any such distribution of dividends.

 

**9.19****                       ****Repayments of inter-groupFinancial Indebtedness**

 

Subject to Clause 4.7(c), noObligor shall and the Company shall ensure that no Borrowing Group Member willprepay or repay any amounts of Financial Indebtedness owed to its shareholdersor any member of the Group except directly or indirectly (including via RhodiaFinances and Rhodia Financial Services Inc.) to the Company and otherwise tothe extent permitted in the Subordination Agreement.

 

**9.20****                       ****No set-off**

 

No Obligor shall and theCompany shall ensure that no Borrowing Group Member will exercise any right ofset-off or counterclaim against any person nor agree to or permit any set-offto occur without the prior written consent of the Majority Lenders except for:

 

(a)                                  any right of set-off or consolidation ofaccounts which is (i) contractual or arising as a matter of law; or (ii) pursuantto legally binding netting arrangements in force on the date of this Agreementin each case with any person outside the Group; or

 

(b)                                 to the extent expressly permitted by theSubordination Agreement.

 

**9.21****                       ****Rights Issue and OtherMatters**

 

(a)                                  The Company shall:

 

(i)                                     launch the Rights Issue by no later than 15thMay, 2004;

 

(ii)                                  initiate and implement the Asset DisposalProgramme (in accordance with the terms of the definition thereof);

 

(iii)                               use its best endeavours to execute theRefinancing Facilities Agreement on or before 15th January, 2004 and shall inany event enter into the Refinancing Facilities Agreement by 15th February,2004;

 

(iv)                              use its best endeavours to execute amendmentsto the USPP documents to allow it to implement the Agreed Security Principleson or before the 15th January, 2004; and

 

(v)                                 use its best endeavours to amend the leasesnot inconsistent with the Agreed Lease Amendment Principles prior to enteringinto the Refinancing Facilities Agreement and in any event on or before 15th February,2004.

 

(b)                                 The Company shall notify the IntercreditorAgent promptly upon becoming aware of:

 

(i)                                     any failure to obtain or maintain anyauthorisation, consent or other condition necessary for the disposal of anasset referred to in the Asset Disposal Programme or the launch andimplementation of the Rights Issue in order to enable the Asset DisposalProgramme and the Rights Issue to be implemented; or

 

(ii)                                  of any decision by it not to implement theAsset Disposal Programme or the Rights Issue.

 

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**9.22****                       ****Joint Ventures**

 

No Obligor will, and theCompany will ensure that no other member of the Group or a Borrowing GroupMember 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.

 

**9.23****                       ****Compliance with laws**

 

Each Obligor shall and the Companyshall ensure that each Material Subsidiary and each Borrowing Group Member willcomply in all material respects with all applicable laws and regulations of anygovernmental authority, whether domestic or foreign, having jurisdiction overit or any of its assets, where failure to comply with any such laws orregulations has, or could be expected to have, in each case in the reasonableopinion of the Majority Lenders, a Material Adverse Effect.

 

**9.24****                       ****Compliance withEnvironmental Laws and Indemnity**

 

(a)                                  Each Obligor shall and the Company shallensure that each Material Subsidiary and each Borrowing Group Member will:

 

(i)                                     obtain any and all Environmental Licencesrequired for the carrying on of its business as currently conducted; and

 

(ii)                                  comply in all material respects with (i) theterms and conditions of such Environmental Licences and (ii) all otherapplicable Environmental Law which in each case, if not complied with, has, orcould be expected to have, in each case in the reasonable opinion of the MajorityLenders, a Material Adverse Effect or result in any liability for the FinanceParties in excess of €5,000,000 in aggregate.

 

(b)                                 The Company shall indemnify each FinanceParty and their respective officers, employees, agents and delegates (togetherthe **Indemnified Parties**) againstany cost or expense suffered or incurred by them (except if caused by their ownnegligence or wilful default) which:

 

(i)                                     arises by virtue of any actual or allegedbreach of any Environmental Law (whether by any Obligor, an Indemnified Partyor any other person); or

 

(ii)                                  arises by virtue of the release or threatenedrelease of, or exposure to, any Dangerous Substance stored or handled upon,transported from, or otherwise associated with, the past or present facilitiesor operations of any Obligor or Group member.

 

Each Indemnified Party mayrely on this Clause 9.24 and enforce its terms under the Contracts (Rights ofThird Parties) Act 1999.

 

**9.25****                       ****Arm’s-length terms**

 

No Obligor will, and eachObligor will ensure that no member of the Group or a Borrowing Group Memberwill, enter into any transaction with any person except on ordinary commercialterms and on the basis of arm’s-length arrangements, or enter into anytransaction whereby any Obligor or member of the Group might pay more than theordinary commercial consideration for any purchase or acquisition or mightreceive less than full commercial consideration for its services or products.

 

**9.26****                       ****Access**

 

Upon the occurrence of anEvent of Default which is continuing, each Obligor shall and the Company shallensure that each Material Subsidiary and each Borrowing Group Member must allowany one or more representatives of the Intercreditor Agent and/or accountantsor other professional advisers appointed by the Intercreditor 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.

 

**9.27****                       ****Security and Subordination**

 

The Obligors shall and theCompany shall ensure that each relevant member of the Group will at their ownexpense:

 

(a)                                  enter into the Security Sharing Agreement andthe Security Documents with the Finance Parties and other creditors underFacilities which are to benefit from a Security Document under the AgreedSecurity Principles as soon as reasonably practicable and in any event within15 Business Days following the date on which it is not prevented from doing sounder the terms of the USPP;

 

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(b)                                 enter into the Subordination Agreement assoon as reasonably practicable and in any event within 45 days of the date ofthis Agreement; and

 

(c)                                  execute and do all such assurances, acts andthings as the Intercreditor Agent and the Security Agent may reasonably requireto effect the above including perfecting or protecting the security intended tobe afforded by the Security Documents and shall deliver to the IntercreditorAgent and the Security Agent at the same time such directors’ and shareholders’resolutions, title documents and other documents and legal opinions as set outin Part 2 of Schedule 2 (Conditions precedent) and otherwise as theIntercreditor Agent and the Security Agent may reasonably require in relationto the same.

 

**9.28****                       ****ERISA Reporting Requirements**

 

The following shall beprovided to the Intercreditor Agent:

 

(a)                           (i)                  promptlyand in any event within 10 Business Days after any Obligor or any ERISAAffiliate knows or has reason to know that any ERISA Event has occurred that isreasonably expected to have a Material Adverse Effect, a statement of the ChiefFinancial Officer of the Obligor describing such ERISA Event and the action, ifany, that such Obligor or such ERISA Affiliate has taken and proposes to takewith respect thereto; and

 

(ii)                                  on the date any records, documents or otherinformation must be furnished to the PBGC with respect to any Plan pursuant toSection 4010 of ERISA, a copy of such records, documents and information;

 

(b)                                 promptly and in any event within fiveBusiness Days after receipt thereof by any Obligor or any ERISA Affiliate,copies of each notice from the PBGC stating its intention to terminate any Planor to have a trustee appointed to administer any Plan;

 

(c)                                  promptly upon request of the IntercreditorAgent/a Finance Party, copies of each Schedule B (Actuarial Information) to themost recent annual report (Form 5500 Series) with respect to each Plan; and

 

(d)                                 promptly and in any event within fiveBusiness Days after receipt thereof by any Obligor or any ERISA Affiliate fromthe sponsor of a Multiemployer Plan, copies of each notice concerning (i) theimposition of Withdrawal Liability by any such Multiemployer Plan that isreasonably expected to have a Material Adverse Effect, (ii) the reorganisationor termination, within the meaning of Title IV of ERISA, of any such MultiemployerPlan that is reasonably expected to have a Material Adverse Effect or (iii) theamount of liability incurred, or that may be incurred, by such Obligor or anyERISA Affiliate in connection with any event described in Clause (i) or (ii).

 

**9.29****                       ****United States laws**

 

(a)                                  The Company will not, either by act oromission, become, or permit any other Obligor, to become, subject to regulationunder PUHCA.

 

(b)                                 The Company will not, either by act oromission, become, or permit any other Obligor, to become, subject to regulationunder the Federal Power Act.

 

(c)                                  The Company will not, either by act oromission, become, or permit any other Obligor to become, an investment companyor a company controlled by an investment company.

 

**9.30****                       ****Cash pooling / Inter-Companyloan arrangements**

 

(a)                                  The Company shall use its best efforts tomaintain its existing cash pooling arrangements as are currently in force atthe date of this Agreement where failure to so maintain has or would bereasonably likely to have a Material Adverse Effect.

 

(b)                                 The Company will ensure that all SecuredIntra Group Loans and, subject to and in accordance with the SubordinationAgreement, long-term Inter-Company Debt between any member of the Group whichis a creditor of an Obligor is documented in the form of the agreedInter-Company Debt loan agreement.

 

(c)                                  The Company will ensure that allInter-Company Debts between any member of the Group which is a creditor of theCompany are subject to the Subordination Agreement on or before incurring any suchInter-Company Debt.

 

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**10.****                              ****FINANCIAL COVENANTS**

 

**10.1****                       ****Financial covenantdefinitions**

 

In this Clause 10:

 

**Adjusted EBITDAR** means, in respect of a particular period, the Company’s EBITDARadjusted to reflect the EBITDAR of each Relevant Entity (**Relevant Entity EBITDAR**), provided that theamount of such adjustment shall be *pro rata*to the Company’s participation in the capital of the Relevant Entity.

 

**Consolidated Net Indebtedness** means, without double counting, theaggregate of (A) the Company’s long term debt (including participating loans),bank overdrafts, current portion of long term debt, (B) guarantees given withrespect to Financial Indebtedness of third parties or joint ventures in whichthe Company is involved or the Company’s unconsolidated subsidiaries orotherwise (C) outstanding amounts with respect to any securitisation programme,sale of receivables and any outstanding amount under a lease (being defined asthe aggregate of the net present value of (i) lease rentals and (ii) theresidual 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 Intercreditor Agent under Clause9.2 (Financial information).

 

**EBITDA**means, in respect of a particular period, (before restructuring costs and aftercash impact of provisions other than provisions for restructuring) and inrespect of the Company or a Relevant Entity, the aggregate of the Company’s orthe Relevant Entity’s (as the case may be) (as determined from the accounts ofthe Relevant Entity most recently delivered by the Company to the IntercreditorAgent under Clause 9.2(a)(v)) Operating Income, Depreciation and Amortisationof Assets, where:

 

(a)**                                 ****Operating Income** means net sales minus operating expenses(operating expenses being production costs and expenses, administrative andselling expenses, research and development expenses, Depreciation andAmortisation of Assets, additional goodwill amortisation (if any) and provisionfor environmental costs);

 

(b)**                                ****Depreciation andAmortisation of Assets**means:

 

(i)                                     amortisation of acquisition goodwill and equitygoodwill in net income of affiliated companies;

 

(ii)                                  amortisation of patents, licenses,trade-marks and software;

 

(iii)                               amortisation of other intangible assets;

 

(iv)                              depreciation of land, buildings and othertangible assets;

 

(v)                                 additional goodwill amortisation (if any);and

 

(vi)                              investments allowance.

 

**EBITDAR** means in respect of a particular period, EBITDA for that period plusthe aggregate amount of any lease rental payments paid or payable in thatperiod to the extent such payments are taken into account as an operatingexpense in the calculation of EBITDA.

 

**Net Financial Expenses** means, in respect of a particular period,Interest Expenses **minus** InterestIncome, where:

 

(a)**                                 ****Interest Expenses** means the aggregate of the Company’sinterest on financial debts and financing operations (being interest on loanspayable and bank overdrafts, financial expenses related to securitisations, theinterest element of lease rental payments, discounts of notes receivable andamortisation of redemption premium) after capitalisation of financial expensesrelated to the financing of certain assets and incorporated in the purchasecost 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

 

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(b)                                 **Interest income** means the Company’s interest income onfinancial assets (loans receivable, 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 from theitems so described in the English language version of the consolidatedfinancial statements of the Company most recently delivered by the Company tothe Intercreditor Agent under Clause 9.2 (Financial information).

 

**Ratio Period** means each twelve month period ending on the date to which each set offinancial statements delivered by the Company pursuant to Clause 9.2 (Financialinformation) was prepared.

 

**Testing Date** means 31st March, 30th June, 30th September and 31st December of eachyear.

 

**10.2**                        **Ratio of Consolidated NetIndebtedness 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, greater than:

 

(a)                                  9.0:1.0 in respect of the Ratio Period endingon 31st December, 2003; and

 

(b)                                 9.5:1.0 in respect of the Ratio Period endingon 31st March, 2004.

 

**10.3**                        **Ratio of EBITDAR to NetFinancial Expenses**

 

The Company shall procurethat the ratio of its EBITDAR to its Net Financial Expenses is not, at the endof each Ratio Period, less than:

 

(a)                                  2.0 to 1.0 in respect of the Ratio Periodending on 31st December, 2003; and

 

(b)                                 1.75 to 1.0 in respect of the Ratio Periodending on 31st March, 2004.

 

**10.4**                        **Net Debt**

 

The Company shall procurethat the Consolidated Net Indebtedness is not on each Testing Date greaterthan:

 

(a)                                  €3,850,000,000 on the Testing Date falling on31st December, 2003; and

 

(b)                                 €4,050,000,000 on the Testing Date falling on31st March, 2004.

 

**10.5**                        **Calculation andinterpretation**

 

(a)                                  All the terms used in Clause 10.1 (Financialcovenant definitions) are to be calculated in accordance with the accountingprinciples and practices applied in connection with the Original FinancialStatements, consistently applied.

 

(b)                                 The Company shall promptly notify theIntercreditor Agent of:

 

(i)                                     each change in the accounting principles andpractices in accordance with which the Company’s consolidated financialstatements are prepared; and

 

(ii)                                  each change in the end of the Company’sfinancial year.

 

(c)                                  Following each change of the type referred toin paragraph (b) above, the Company shall:

 

(i)                                     procure that its chief financial officer or(if the Intercreditor Agent so requests) its statutory auditors deliver withthe audited financial statements of the Company next delivered under Clause 9.2(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 **OldAccounts**) and information:

 

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(A)                              sufficient, in the reasonable opinion of theMajority Lenders, to allow the Finance Parties to make an accurate comparisonof the Company’s financial position as set out in the Old Accounts and that setout in the New Accounts and any adjustments necessary to ensure that the NewAccounts reflect the format, and/or basis used in the preparation, of the OldAccounts; and

 

(B)                                sufficient, in the reasonable opinion of theIntercreditor Agent, to enable the Intercreditor Agent to ascertain thecompliance by the Company with the financial covenants contained in Clauses10.2 (Ratio of Consolidated Net Indebtedness to Adjusted EBITDAR) and 10.3(Ratio of EBITDAR to Net Financial Expenses); and

 

(ii)                                  at the request of the Intercreditor Agent(acting on the instructions of the Majority Lenders), negotiate in good faithwith the Intercreditor Agent with a view to agreeing such amendments to thisClause 10 as may be necessary to ensure that the Finance Parties’ interestsunder this Agreement are not prejudiced by such change.

 

(d)                                 If:

 

(i)                                     the Intercreditor Agent, acting reasonably,disputes (1) the Company’s statutory auditors’ interpretation of any term inClause 10.1 (Financial covenant definitions) or any computation under thisClause 10, in each case, contained in a certificate delivered by the Companyunder Clause 9.2 (Financial information) or (2) any certificate or the contentsthereof delivered by the Company’s statutory auditors; or

 

(ii)                                  if no agreement is reached within 30 days ofa request by the Intercreditor Agent under paragraph (c)(ii) above),

 

the Intercreditor 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.

 

**11.**                               **DEFAULT**

 

11.1                           On and from the Commencement Date and (i)until the Term Date; or (ii) if a Default is outstanding on the Term Date,until no Default is outstanding, the expression **Event of Default** as defined in this Agreement shall supplementall events of default or termination events (howsoever defined or described)contained in the documentation relating to each Affected Facility as if suchEvents of Default were set out therein *mutatismutandis*.

 

11.2                           Each of the events or circumstances set outin this Clause 11 is an Event of Default (whether or not caused by any reasonwhatsoever outside the control of any Obligor or any other person).

 

**11.3**                        **Non-payment**

 

An Obligor does not pay onthe due date any amount payable by it under any Finance Document or FacilityAgreement in the manner required under the Finance Documents or FacilityAgreements, unless the non-payment:

 

(a)                                  is caused by technical or administrativeerror; and

 

(b)                                 is remedied within three Business Days of thedue date.

 

**11.4**                        **Breach of other obligations**

 

(a)       (i)                TheCompany does not comply with any term of Clause 10 (Financial covenants) orClause 9.21 (Rights Issue and Other Matters); or

 

(ii)                                  at any time the projections set out in themost recent Business Plan show that the Company will not be in compliance withany term of Clause 10 (Financial covenants) on the then next Testing Date.

 

(b)                                 An Obligor does not comply with any of itsobligations (other than as referred to in paragraph (a) above) under anyFinance Document or any Facility Agreement not already referred to in paragraph(a) above unless the non-compliance is capable of remedy and is remediedwithin:

 

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(i)                                     fifteen calendar days of the earlier of theIntercreditor Agent giving notice and the Obligor becoming aware of thenon-compliance; or

 

(ii)                                  where the non-compliance is in respect of anObligor’s obligations under a Facility Agreement, within the applicable graceperiod provided in that Facility Agreement.

 

**11.5**                        **Misrepresentation**

 

(a)                                  A representation, warranty or statement madeor repeated in or in connection with any Finance Document or FacilityAgreements or in any document delivered by or on behalf of any Obligor under orin connection with any Finance Document or Facility Agreement is incorrect inany material respect when made or deemed to be made or repeated.

 

(b)                                 The Majority Lenders determine that arepresentation, warranty or statement made or repeated in or in connection withthe Rights Issue or in any document delivered by or on behalf of any Obligorunder or in connection with the Rights Issue is incorrect in any materialrespect when made or deemed to be made or repeated.

 

**11.6**                        **Cross-default**

 

(a)                                  Any of the following occurs in respect of anyObligor or a Material Subsidiary:

 

(i)                                     any of its Financial Indebtedness is not paidwhen due after the expiry of any applicable grace periods; or

 

(ii)                                  any event of default, termination event,early repayment event or prepayment event or circumstance howsoever describedoccurs under any document relating to its Financial Indebtedness (other thanthis Agreement) including, without limitation, under the High Yield Bonds; or

 

(iii)                               any of its Financial Indebtedness is (orbecomes capable of being) declared prematurely due and payable or placed ondemand as a result of an event of default, termination event, early repaymentevent or prepayment event (howsoever described) under the document relating tothat Financial Indebtedness including, without limitation, under the High YieldBonds; or

 

(iv)                              any commitment for, or underwriting of, anyFinancial Indebtedness is cancelled or suspended as a result of an event ofdefault, termination event, early repayment event or prepayment event(howsoever described) under the document relating to that FinancialIndebtedness; or

 

(v)                                 any Security Interest securing FinancialIndebtedness over any of its asset(s) becomes enforceable,

 

(b)                                 Provided that there shall only be an Event ofDefault under this Clause 11.6, (i) if the aggregate amount of FinancialIndebtedness which is not paid when due or after the expiry of any applicablegrace period and/or to which that event of default, termination event, earlyrepayment event or prepayment event relates and/or which is (or becomes capableof being) declared prematurely due and payable or placed on demand in each caseunder paragraph (a) above exceeds €15,000,000 (or the equivalent in othercurrencies) and (ii) in the case of a prepayment event in respect of FinancialIndebtedness under the High Yield Bonds, where (A) such Financial Indebtednesshas become due and payable or placed on demand; and (B) such prepayment eventdoes not relate to Excess Proceeds as defined in and paid in accordance withclause 4.10 of the High Yield Bonds and this Agreement.

 

**11.7**                        **Insolvency**

 

Any of the following occursin respect of an Obligor or a Material Subsidiary:

 

(a)                                  it is, or is deemed for the purposes of anylaw to be, unable to pay its debts as they fall due or insolvent (includingwithout limitation “*en état de cessation despaiements*”);

 

(b)                                 it admits inability to pay its debts as theyfall due;

 

(c)                                  it suspends making payments on all or of itsor any class of its debts or announces an intention to do so;

 

(d)                                 a moratorium is declared in respect of any ofits indebtedness;

 

(e)                                  by reason of financial difficulties, appliesfor, or is subject to, an amicable settlement or a “*réglement amiable*” pursuant to Article L-611-3 of the *Code de Commerce* of France, or beginsnegotiations with one or more of its creditors with a view to the readjustmentor rescheduling of any of its indebtedness; or

 

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(f)                                    its situation becomes irremediablycompromised or it acts otherwise within the meaning of L-313-12 of the *Code Monétaire et Financier*.

 

**11.8**                        **Insolvency proceedings**

 

Any of the following occursin respect of an Obligor or a Material Subsidiary:

 

(a)                                  any step (including petition, proposal orconvening a meeting) is taken with a view to a composition, assignment orarrangement with any of its creditors;

 

(b)                                 a meeting is convened for the purpose ofconsidering any resolution for (or to petition for) its winding-up,administration or dissolution (including without limitation “*dissolution, liquidation or redressement judiciaire*”)or any such resolution is passed;

 

(c)                                  any person presents a petition for itswinding-up or administration;

 

(d)                                 an order for its winding-up, administration,dissolution or bankruptcy is made; or

 

(e)                                  a judgement is issued for the judicialliquidation (“*liquidation judiciaire*”)or the transfer of the whole of its business (“*cessionde l’entreprise*”); or

 

(f)                                    any other step (including petition, proposalor convening a meeting) is taken with a view to its rehabilitation,administration, custodianship, liquidation, winding-up or dissolution or anyother insolvency proceedings involving it.

 

**11.9**                        **Appointment of receivers andmanagers**

 

Any of the following occursin respect of an Obligor or a Material Subsidiary:

 

(a)                                  any liquidator, trustee in bankruptcy,judicial custodian, compulsory manager, receiver, administrative receiver,administrator, *administrateur judiciaire,provisoire mandataire ad hoc, conciliateur* or *mandataire liquidateur* or similar officeris appointed in respect of it or any of its assets;

 

(b)                                 its directors or other officers request theappointment of a liquidator, trustee in bankruptcy, judicial custodian,compulsory manager, receiver, administrative receiver, administrator, *administrateur judiciaire, provisoire mandataire adhoc, conciliateur* or *mandataireliquidateur* or similar officer; or

 

(c)                                  any other steps are taken to enforce anySecurity Interest over any part of its assets.

 

**11.10**                 **United States BankruptcyLaws**

 

(a)                                  In this Subclause:

 

**U.S. Bankruptcy Law** means the United States Bankruptcy Code 1978 or any other UnitedStates Federal or State bankruptcy, insolvency or similar law.

 

**U.S. Obligor** means an Obligor incorporated or organised under the laws of theUnited States of America or any state of the United States of America(including the District of Columbia).

 

Terms used in this Subclausehave the meanings given to them in the United States Bankruptcy Code 1978, asamended, and applicable fraudulent conveyance laws in the United States ofAmerica.

 

(b)                                 Any of the following occurs in respect of aU.S. Obligor (other than Primester in the case of paragraphs (iv) or (v) below)(on a consolidated basis):

 

(i)                                     it makes a general assignment for the benefitof creditors;

 

(ii)                                  it commences a voluntary case or proceedingunder any U.S. Bankruptcy Law; or

 

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(iii)                               an involuntary case under any U.S. BankruptcyLaw is commenced against it and is not controverted within 21 days or is notdismissed or stayed within 45 days after commencement of the case; or

 

(iv)                              the aggregate amount of its debts (includingits obligations (if any) under the Finance Documents and the FacilityAgreements) is greater than the aggregate value (being the lesser of fair presentvaluation and present fair saleable value) of its assets (which for, avoidanceof doubt, include, without limitation, all rights of indemnification,contribution and subrogation); or

 

(v)                                 its capital is unreasonably small to carry onits business as it is being conducted; or

 

(vi)                              it incurs debts beyond its ability to pay asthey mature on the date on which the debts were incurred; or

 

(vii)                           it has made a transfer or incurred anobligation under a Finance Document or a Facility Agreement with the intent tohinder, delay or defraud any of its present or future creditors.

 

**11.11**                 **Creditors’ process**

 

Any attachment,sequestration, distress execution or analogous event or circumstance affectsany material asset(s) of an Obligor or a Material Subsidiary and which in thereasonable opinion of the Majority Lenders has or could be expected to have aMaterial Adverse Effect.

 

**11.12**                 **Analogous proceedings**

 

There occurs, in relation toan Obligor or a Material Subsidiary, any event or circumstance anywhere which,in the opinion of the relevant Lender or the Majority Lenders (acting in goodfaith), appears to correspond with any of those mentioned in Clauses 11.7(Insolvency) to 11.11 (Creditors’ process) (inclusive).

 

**11.13**                 **Cessation of 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.

 

**11.14**                 **Effectiveness of FinanceDocuments and Facility Agreements**

 

(a)                                  It is or becomes unlawful for an Obligor orany other person (other than a Finance Party) to perform any of its obligationsunder the Finance Documents or the Facility Agreements.

 

(b)                                 Any Finance Document or Facility Agreement isnot effective or is alleged by an Obligor to be ineffective for any reason.

 

(c)                                  An Obligor repudiates a Finance Document orFacility Agreement or evidences an intention to repudiate a TransactionDocument.

 

(d)                                 A Security Document does not create thesecurity it purports to create in any respect considered by the MajorityLenders to be materially adverse to the interests of the Finance Parties underthe Finance Documents or the Facility Agreements.

 

(e)                                  A guarantee of any Obligor is invalid orunenforceable in any respect considered by the Majority Lenders to bematerially adverse to the interests of the Finance Parties under the FinanceDocuments or the Facility Agreements.

 

(f)                                    The subordination provisions under theSubordination Agreement or the ranking of security under the Security Documentsis not effective.

 

(g)                                 The Rights Issue is not completed by the TermDate or the Company repudiates, declares or states in writing that it cannot ordoes not intend to, or it becomes unlawful for the Company to, complete theRights Issue by the Term Date.

 

(h)                                 The Asset Disposal Programme is not initiatedor implemented in accordance with the terms of the definition thereof or theCompany repudiates, declares or states in writing that it cannot or does notintend to, or it becomes unlawful for the Company to, initiate or implement theAsset Disposal Programme in accordance with the terms of the definitionthereof.

 

----

 

**11.15**                 **Audit qualification**

 

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).

 

**11.16**                 **Shares and Dividends**

 

A meeting of shareholders ofthe Company is convened at which a resolution is passed to pay any dividend, orother distribution (in cash or in kind) in respect of its share capital or anymanagement fees or charges in favour of its shareholders or its shareholders’Affiliates.

 

**11.17**                 **ERISA**

 

(a)                                  Any Plan fails to satisfy the minimum fundingstandards of ERISA or the Code for any plan year or part thereof or a waiver ofsuch standards or extension of any amortisation period is sought or grantedunder section 412 of the Code; or

 

(b)                                 a notice of intent to terminate any Plan is,or is reasonably expected to be, filed with the PBGC or the PBGC institutesproceedings under ERISA section 4042 to terminate or appoint a trustee toadminister any Plan or the PBGC notifies the Company or any ERISA Affiliatethat a Plan may become a subject of any such proceedings; or

 

(c)                                  the aggregate accumulated benefit obligations(as defined in Statement of Financial Accounting Standards 87) under all Plansexceeds the fair market value of all assets of such Plans allocable to suchbenefits by more than US$50,000,000, all determined as of the date of the mostrecent financial statements for such Plans; or

 

(d)                                 the Company or any ERISA Affiliate incurs oris reasonably expected to incur any liability pursuant to Title I or IV ofERISA or the penalty or excise tax provisions of the Code relating to employeebenefit plans; or

 

(e)                                  the Company or any ERISA Affiliate withdrawsfrom any Multiemployer Plan; or

 

(f)                                    any member of the Group establishes or amendsany employee welfare benefit plan that provides post-employment welfarebenefits in a manner that would increase the liability of any member of theGroup thereunder,

 

and such events (whetherindividually or taken together) could reasonably be expected to have a MaterialAdverse Effect.

 

**11.18**                 **Litigation**

 

Any litigation, arbitrationor administrative proceeding or claim is threatened, pending, commenced orongoing against any Obligor, any Material Subsidiary or any of the assets ofthe Group which in the opinion of the Majority Lenders has or could reasonablybe expected to have by itself or together with any other such proceedings orclaims to have a Material Adverse Effect.

 

**11.19**                 **Material adverse 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.

 

**11.20**                 **Enforcement Action**

 

(a)                                  On and at any time after the occurrence of anEvent of Default and whilst the same is outstanding:

 

(i)                                     a Lender may, upon the occurrence of an Eventof Default under Clause 11.3 (Non-payment) or under Clauses 11.7 (Insolvency)through to 11.12 (Analogous proceedings) (inclusive) or under Clause 11.14(Effectiveness of Finance Documents);

 

(ii)                                  a Lender to Rhodia Inc. may upon theoccurrence of an Event of Default occurring under Clause 11.6 (Cross-default)with respect to the USPP and any enforcement action having been taken withrespect to the guarantee of the USPP by Rhodia Inc.;

 

(iii)                               a Lender to Rhodia Inc. may upon theoccurrence of an Event of Default occurring under Clause 11.6 (Cross-default)as a result of any Financial Indebtedness of the Company and/or Rhodia HoldingsInc. and/or Rhodia Inc. exceeding €30,000,000 (or its equivalent in othercurrencies) becoming due and payable before its stated maturity by way of adeclared default under the document relating to that Financial Indebtednessafter expiry of any applicable grace period;

 

----

 

and

 

(iv)                              a Lender to Rhodia Inc. may if Rhodia Inc.makes a payment or distribution on or after the date of this Agreement to theCompany with sale proceeds from disposals of its assets in an aggregate amountexceeding €150,000,000 (or its equivalent in other currencies),

 

exercise any and all rightsand remedies (including without limitation subject to the Security SharingAgreement, taking any Enforcement Action) as it has under or in connection withany Affected Facility subject to and in accordance with its terms.

 

(b)                                 On and at any time after notification by theIntercreditor Agent of a Declared Default (which Intercreditor Agent shallnotify to all Parties if so instructed by the Majority Lenders) and whilst thesame is outstanding a Lender may:

 

(i)                                     exercise any and all rights and remedies(including without limitation, subject to the Security Sharing Agreement, takeany Enforcement Action) as it has under or in connection with any AffectedFacility or otherwise; and/or

 

(ii)                                  take or instruct the Security Agent orIntercreditor Agent to take such Enforcement Action as is permitted by and inaccordance with the Security Sharing Agreement and the other Finance Documents.

 

(c)                                  A Lender shall notify the Intercreditor Agentbefore exercising the rights referred to in paragraphs (a) and (b) above.

 

(d)                                 The provisions of this Clause 11.20(Enforcement Action) shall continue in full force and effect and shall survivethe termination of this Agreement with respect to any outstanding Default orDeclared Default notwithstanding the expiry of the Secured IntercreditorPeriod.

 

**12.**                               **THE ADMINISTRATIVE PARTIES**

 

**12.1**                        **Appointment and duties ofthe Intercreditor Agent**

 

(a)                                  Each Finance Party (other than theIntercreditor Agent) irrevocably appoints the Intercreditor Agent to act as itsagent under the Finance Documents.

 

(b)                                 Each Finance Party (other than theIntercreditor Agent) irrevocably authorises the Intercreditor Agent to:

 

(i)                                     perform the duties and to exercise therights, powers and discretions that are specifically given to it under theFinance Documents, together with any other incidental rights, powers anddiscretions; and

 

(ii)                                  execute each Finance Document in an agreedform expressed to be executed by the Intercreditor Agent.

 

(c)                                  The Intercreditor Agent has only those dutieswhich are expressly specified in this Agreement. Those duties are solely of amechanical and administrative nature.

 

**12.2**                        **The Members**

 

Except as specificallyprovided in the Finance Documents, no Member has any obligations of any kind toany other Party in connection with any Finance Document.

 

**12.3**                        **No fiduciary duties**

 

Nothing in the FinanceDocuments makes the Intercreditor Agent a trustee or fiduciary for any otherParty or any other person. The Intercreditor Agent need not hold in trust anymoneys paid to it for a Party or be liable to account for interest on thosemoneys.

 

**12.4**                        **Individual position of theIntercreditor Agent**

 

(a)                                  If it is also a Lender, the IntercreditorAgent has the same rights and powers under the Finance Documents as any otherLender and may exercise those rights and powers as though it were not an agent.

 

(b)                                 The Intercreditor Agent may:

 

(i)                                     carry on any business with any Obligor or itsrelated entities (including acting as an agent or a trustee for any otherfinancing); and

 

(ii)                                  retain any profits or remuneration itreceives under the Finance Documents or in relation to any other business itcarries on with any Obligor or its related entities.

 

----

 

**12.5**                        **Reliance**

 

The Intercreditor Agent may:

 

(a)                                  rely on any notice or document believed by itto be genuine and correct and to have been signed by, or with the authority of,the proper person;

 

(b)                                 rely on any statement made by any personregarding any matters which may reasonably be assumed to be within hisknowledge or within his power to verify;

 

(c)                                  engage, pay for and rely on professionaladvisers selected by it (including those representing a Party other than theIntercreditor Agent); and

 

(d)                                 act under the Finance Documents through itspersonnel and agents.

 

**12.6**                        **Majority Lenders’instructions**

 

(a)                                  The Intercreditor Agent is fully protected ifit acts on the instructions of the Majority Lenders or where expressly requiredby the terms of the Finance Documents, the Lenders in the exercise of anyright, power or discretion or any matter not expressly provided for in theFinance Documents. Any such instructions given by the Majority Lenders or theLenders as the case may be will be binding on all the Lenders. In the absenceof instructions, the Intercreditor Agent may act as it considers to be in thebest interests of all the Lenders.

 

(b)                                 The Intercreditor Agent is not authorised toact on behalf of a Lender (without first obtaining that Lender’s consent) inany legal or arbitration proceedings in connection with any Finance Document.

 

(c)                                  The Intercreditor Agent may require thereceipt of security satisfactory to it, whether by way of payment in advance orotherwise, against any liability or loss which it may incur in complying withthe instructions of the Majority Lenders.

 

**12.7**                        **Responsibility**

 

(a)                                  The Intercreditor Agent is not responsible toany other Finance Party for the adequacy, accuracy or completeness of:

 

(i)                                     any Finance Document or any other document;or

 

(ii)                                  any statement or information (whether writtenor oral) made in or supplied in connection with any Finance Document.

 

(b)                                 Without affecting the responsibility of anyObligor for information supplied by it or on its behalf in connection with anyFinance Document, each Lender confirms that it:

 

(i)                                     has made, and will continue to make, its ownindependent appraisal of all risks arising under or in connection with theFinance Documents (including the financial condition and affairs of eachObligor and its related entities and the nature and extent of any recourseagainst any Party or its assets); and

 

(ii)                                  has not relied exclusively on any informationprovided to it by the Intercreditor Agent in connection with any FinanceDocument.

 

**12.8**                        **Exclusion of liability**

 

(a)                                  The Intercreditor Agent is not liable to anyother Finance Party for any action taken or not taken by it in connection withany Finance Document, unless directly caused by its negligence or wilfulmisconduct.

 

(b)                                 No Party may take any proceedings against anyofficer, employee or agent of the Intercreditor Agent in respect of any claimit might have against the Intercreditor Agent or in respect of any act oromission of any kind by that officer, employee or agent in connection with anyFinance Document. Any officer, employee or agent of the Intercreditor Agent mayrely on this Subclause.

 

----

 

**12.9**                        **Default**

 

(a)                                  The Intercreditor Agent is not obliged tomonitor or enquire whether a Default has occurred. The Intercreditor Agent isnot deemed to have knowledge of the occurrence of a Default.

 

(b)                                 If the Intercreditor Agent:

 

(i)                                     receives notice from a Party referring tothis Agreement, describing a Default and stating that the event is a Default;or

 

(ii)                                  is aware of the non-payment of any principalor interest or any fee payable to a Lender under this Agreement,

 

it must promptly notify theLenders.

 

**12.10**                 **Information**

 

(a)                                  The Intercreditor Agent must promptly forwardto the person concerned the original or a copy of any document which isdelivered to the Intercreditor Agent by a Party for that person.

 

(b)                                 Except where a Finance Document specificallyprovides otherwise, the Intercreditor Agent is not obliged to review or checkthe adequacy, accuracy or completeness of any document it forwards to anotherParty.

 

(c)                                  Except as provided above, the IntercreditorAgent has no duty:

 

(i)                                     either initially or on a continuing basis toprovide any Lender with any credit or other information concerning the risksarising under or in connection with the Finance Documents (including anyinformation relating to the financial condition or affairs of any Obligor orits related entities or the nature or extent of recourse against any Party orits assets) whether coming into its possession before, on or after the date ofthis Agreement; or

 

(ii)                                  unless specifically requested to do so by aLender in accordance with a Finance Document, to request any certificate orother document from any Obligor.

 

(d)                                 In acting as the Intercreditor Agent, itsagency division is treated as a separate entity from its other divisions anddepartments. Any information acquired by it which, in its opinion, is acquiredby it otherwise than in its capacity as the Intercreditor Agent may be treatedas confidential by the Intercreditor Agent and will not be treated asinformation possessed by the Intercreditor Agent in its capacity as such.

 

(e)                                  Each Obligor irrevocably authorises theIntercreditor Agent to disclose to the other Finance Parties any informationwhich, in its opinion (acting reasonably), is received by it in its capacity asthe Intercreditor Agent.

 

**12.11**                 **Indemnities**

 

(a)                                  Without limiting the liability of any Obligorunder the Finance Documents, each Lender must indemnify the Intercreditor Agentfor that share of any loss or liability incurred by it in acting as theIntercreditor Agent, except to the extent that the loss or liability is causedby its gross negligence or wilful misconduct. A Lender’s share of any loss orliability is the proportion which the Exposure of the Lender bears to theaggregate of the Exposures of all the Lenders.

 

(b)                                 The Intercreditor Agent may deduct from anyamount received by it for a Lender any amount due to the Intercreditor Agentfrom that Lender under a Finance Document but unpaid.

 

**12.12**                 **Compliance**

 

The Intercreditor Agent mayrefrain from doing anything (including the disclosure of any information) whichmight, in its opinion, constitute a breach of any law or regulation or be otherwiseactionable at the suit of any person, and may do anything which, in itsopinion, is necessary or desirable to comply with any law or regulation.

 

**12.13**                 **Resignation of theIntercreditor Agent**

 

(a)                                  The Intercreditor Agent may resign andappoint any of its Affiliates as successor Intercreditor Agent by giving noticeto the Lenders and the Company.

 

----

 

(b)                                 Alternatively, the Intercreditor Agent mayresign by giving notice to the Lenders and the Company, in which case theMajority Lenders (after prior consultation with the Company) may appoint asuccessor Intercreditor Agent.

 

(c)                                  If no successor Intercreditor Agent has beenappointed under paragraph (b) above within 30 days after notice of resignationwas given, the Intercreditor Agent (after prior consultation with the Company)may appoint a successor Intercreditor Agent.

 

(d)                                 The person(s) appointing a successorIntercreditor Agent must, if practicable, consult with the Company prior to theappointment.

 

(e)                                  The resignation of the Intercreditor Agentand the appointment of any successor Intercreditor Agent will both becomeeffective only when the successor Intercreditor Agent notifies all the Partiesthat it accepts its appointment. On giving the notification, the successorIntercreditor Agent will succeed to the position of the retiring IntercreditorAgent and **Intercreditor Agent** willmean the successor Intercreditor Agent.

 

(f)                                    The retiring Intercreditor Agent must, at itsown cost, make available to the successor Intercreditor Agent such documents andrecords and provide such assistance as the successor Intercreditor Agent mayreasonably request for the purposes of performing its functions as theIntercreditor Agent under the Finance Documents.

 

(g)                                 Upon its resignation becoming effective, thisClause will continue to benefit a retiring Intercreditor Agent in respect ofany action taken or not taken by it in connection with the Finance Documentswhile it was the Intercreditor Agent, and, subject to paragraph (f) above, itwill have no further obligations under any Finance Document.

 

(h)                                 The Majority Lenders may, by notice to theIntercreditor Agent, require it to resign under paragraph (b) above.

 

**12.14**                 **Relationship with Lenders**

 

(a)                                  The Intercreditor Agent may treat each Lenderas a Lender, entitled to payments under this Agreement and as acting throughits Facility Office(s) until it has received not less than five Business Days’prior notice from that Lender to the contrary.

 

(b)                                 The Intercreditor Agent may at any time, andmust if requested to do so by the Majority Lenders, convene a meeting of theLenders.

 

**12.15**                 **Intercreditor Agent’smanagement time**

 

If the Intercreditor Agentrequires, any amount payable to the Intercreditor Agent by any Party under anyindemnity or in respect of any costs or expenses incurred by the IntercreditorAgent under the Finance Documents after the date of this Agreement may includethe cost of using its management time or other resources and will be calculatedon the basis of such reasonable daily or hourly rates as the IntercreditorAgent may notify to the relevant Party. This is in addition to any amount inrespect of fees or expenses paid or payable to the Intercreditor Agent underany other term of the Finance Documents.

 

**13.**                               **EXPENSES**

 

**13.1**                        **Initial and special costs**

 

The Company shall forthwithon demand pay the amount of all costs and expenses (including legal fees)properly incurred by any Lender and the Intercreditor Agent in connection with:

 

(a)                                  the negotiation, preparation, printing andexecution of:

 

(i)                                     this Agreement and any other documentsreferred to in this Agreement; and

 

(ii)                                  any other Finance Document (other than anAccession Agreement) executed after the date of this Agreement; and

 

(b)                                 any amendment, waiver, consent or suspensionof rights (or any proposal for any of the foregoing) requested by or on behalfof an Obligor and relating to a Finance Document or a document referred to inany Finance Document.

 

**13.2**                        **Enforcement costs**

 

The Company shall forthwithon demand pay to each Finance Party the amount of all costs and expenses(including legal fees) incurred in connection with the enforcement of, or thepreservation of any rights under, any Finance Document.

 

----

 

**14.**                               **CHANGES TO THE PARTIES**

 

**14.1**                        **Transfer by Obligors**

 

No Obligor may assign,transfer or novate or dispose of any of, or any interest in, any of its rightsand/or obligations under the Finance Documents.

 

**14.2**                        **Accession by AdditionalObligors**

 

(a)                                  The Company must ensure that each BorrowingGroup Member (other than an Original Obligor) which is a party to an AffectedFacility becomes an Additional Obligor in the manner required by this Clause14.2 as soon as reasonably practicable and in any event not later than 31stJanuary, 2004.

 

(b)                                 The relevant Borrowing Group Member willbecome an Additional Obligor and be bound by all the obligations under theFinance Documents as if it had been originally party to those documents as anObligor when the Intercreditor Agent notifies the other Finance Parties and theCompany that it has received all of the documents and evidence listed in Part 3of Schedule 2 (Additional Obligor conditions precedent documents) in form andsubstance satisfactory to it. The Intercreditor Agent must give thisnotification as soon as reasonably practicable.

 

(c)                                  Delivery of an Accession Agreement, executedby the relevant Borrowing Group Member and the Company, to the Facility Agentconstitutes confirmation by that Subsidiary and the Company that therepresentations set out in Clause 8 which are to be repeated and under Clauses8.19, 8.20 and 8.23 as if repeated are then correct.

 

(d)                                 Paragraph (a) does not apply to Primester foras long as it has no loan outstanding under the Primester Facility.

 

**14.3**                        **Transfers by Lenders**

 

(a)                                  No Lender may assign, transfer or novate anyof its rights and/or obligations under any of the Finance Documents unless anduntil the assignee or transferee has delivered a duly executed AccessionAgreement to the Intercreditor Agent.

 

(b)                                 Notwithstanding paragraph (a) above, noLender which is or is to become a party to the Refinancing Facilities Agreementmay assign, transfer or novate any of its rights and/or obligations under anyof the Finance Documents (except to an Affiliate which has delivered anAccession Agreement pursuant to paragraph (a)) unless and until the RefinancingFacilities Agreement has been executed by all parties thereto.

 

**14.4**                        **Accession by Lenders**

 

(a)                                  During the Secured Intercreditor Period, uponthe delivery to the Intercreditor Agent of a duly executed Accession Agreementthe bank or financial institution which is party to that Accession Agreementwill become a party to:

 

(i)                                     this Agreement; and, to the extent enteredinto at that time,

 

(ii)                                  the Security Sharing Agreement;

 

(iii)                               the Subordination Agreement; and

 

(together the **Agreements**) as a Lender; or

 

(b)                                 Any person becoming a party to the Agreementsunder paragraph (a) shall be entitled to the benefit of all the provisions andbound by all of the obligations in the Agreements with effect from the date ofaccession as if it had been an original party to those Agreements.

 

**14.5**                        **Register**

 

The Intercreditor Agentshall keep a register of all the Parties and shall supply any other Party (atthat Party’s expense) with a copy of the register on request.

 

----

 

**15.**                               **AMENDMENTS AND WAIVERS**

 

**15.1**                        **Procedure**

 

(a)                                  Except as provided in this Clause, any termof a Finance Document may be amended or waived with the agreement of theCompany, the Intercreditor Agent and the Majority Lenders. The IntercreditorAgent may effect, on behalf of any Finance Party, an amendment or waiverpermitted under this Clause.

 

(b)                                 The Intercreditor Agent shall promptly notifythe other Parties of any amendment or waiver effected under paragraph (a), andany such amendment or waiver shall be binding on all the Parties.

 

**15.2**                        **Exceptions**

 

(a)                                  An amendment or waiver not agreed by aFinance Party which:

 

(i)                                     relates to the definition of **Insolvency Event**, **Majority Lenders**, **Finance Documents**, **Transaction Documents, Exposure, Enforcement Action**or **Term Date** (other than asexpressly provided in the definition thereof) in Clause 1.1 (Definitions);

 

(ii)                                  an extension of the date of payment of anyamount to a Lender payable under the Finance Documents;

 

(iii)                               relates to a reduction in the amount of anypayment of fees or other amount payable to a Lender under the Finance Documentsor Facility Agreement to which that Party is a party;

 

(iv)                              relates to Clause 3 (Secured IntercreditorPeriod), Clause 4.1 (Affected Facilities), Clause 7 (Mandatory prepayment andcancellation), Clause 11.3 (Non-payment), Clause 11.7 (Insolvency) through to11.12 (Analogous proceedings) (inclusive), Clause 11.14 (Effectiveness ofFinance Documents) or Clause 11.20(a) (Enforcement Action);

 

(v)                                 relates to Clause 14.1 (Transfer by Obligors)and Clause 14.3 (Transfers by Lenders);

 

(vi)                              relates to Clause 4.11 (Amendments toAffected Facilities);

 

(vii)                           relates to a guarantee under this Agreementor a Security Document in favour of that Finance Party or any of the AgreedSecurity Principles;

 

(viii)                        relates to this Clause 15 (Amendments andwaivers); or

 

(ix)                                relates to a term or satisfaction of acondition of a Finance Document which expressly requires the consent ordetermination of that Party,

 

is not binding on thatParty.

 

(b)                                 An amendment or waiver which affects therights and/or obligations of the Intercreditor Agent, or the rights of theCo-ordinating Committee in respect of Clauses 12.2 (The Members) and 19(Co-ordinating Committee) may not be effected without respectively the priorwritten consent of the Intercreditor Agent or the Co-ordinating Committee asapplicable.

 

**15.3**                        **Waivers and remediescumulative**

 

The rights of each FinanceParty under this Agreement:

 

(a)                                  may be exercised as often as necessary;

 

(b)                                 are cumulative and not exclusive of itsrights under the general law; and

 

(c)                                  may be waived only in writing andspecifically.

 

Delay in exercising ornon-exercise of any such right is not a waiver of that right.

 

----

 

**16.**                               **CONFIDENTIALITY**

 

(a)                                  Each Finance Party must keep confidential theterms of the Finance Documents and any information supplied to it by or onbehalf of any Obligor in connection with the Finance Documents. However, aFinance Party is entitled to disclose information:

 

(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, regulatory orarbitration proceedings;

 

(iii)                               if required to do so under any law orregulation;

 

(iv)                              to a government, banking, taxation or otherregulatory authority;

 

(v)                                 to its officers, directors, employees andprofessional advisers;

 

(vi)                              to the extent allowed under paragraph (b)below; or

 

(vii)                           with the agreement of the relevant Obligor.

 

The provisions of thisparagraph supersede and override any other confidentiality agreement orundertaking signed between any Finance Party and any member of the Group inrespect of any information supplied pursuant to the Finance Documents exceptinformation expressly provided to the Finance Parties prior to the date of thisAgreement subject to that other confidentiality agreement or undertaking.

 

(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)                                     a copy of this Agreement and any otherFinance Document to which it is a party; and

 

(ii)                                  any information which that Finance Party hasacquired under or in connection with any 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.

 

**17.**                               **STAMPDUTIES**

 

The Company shall pay, andforthwith on demand indemnify each Finance Party against any liability itincurs in respect of, any stamp, registration and similar tax which is orbecomes payable in connection with the entry into, performance or enforcementof any Finance Document.

 

**18.**                               **INDEMNITIES**

 

**18.1**                        **Currency indemnity**

 

(a)                                  Each Obligor must, as an independentobligation, indemnify each Finance Party against any loss or liability(including any exchange costs and taxes) which that Finance Party incurs as aconsequence of:

 

(i)                                     that Finance Party receiving an amount inrespect of an Obligor’s liability under the Finance Documents; or

 

(ii)                                  that liability being converted into a claim,proof, judgement or order,

 

in a currency other than thecurrency in which the amount is expressed to be payable under the relevantFinance Document.

 

(b)                                 Unless otherwise required by law, eachObligor waives any right it may have in any jurisdiction to pay any amountunder the Finance Documents in a currency other than that in which it isexpressed to be payable.

 

**18.2**                        **Other indemnities**

 

(a)                                  The Company must indemnify each Finance Partyagainst any loss or liability which that Finance Party incurs as a consequenceof:

 

(i)                                     the occurrence of any Default;

 

----

 

(ii)                                  any failure by an Obligor to pay any amountdue under a Finance Document on its due date, including any resulting from anydistribution or redistribution of any amount among the Lenders under thisAgreement or under the Subordination Agreement.

 

(b)                                 The Company must indemnify the IntercreditorAgent against any loss or liability incurred by the Intercreditor Agent as aresult of:

 

(i)                                     investigating any event which theIntercreditor Agent reasonably believes to be a Default; or

 

(ii)                                  acting or relying on any notice which theIntercreditor Agent reasonably believes to be genuine, correct andappropriately authorised.

 

**19.**                               **CO-ORDINATING COMMITTEE**

 

(a)                                  It is acknowledged by each Lender and by eachBorrowing Group Member that:

 

(i)                                     each Member will be entitled to receive andretain for its own use and benefit from Borrowing Group Members the fees inrespect of the performance of its respective role as such which have beenagreed prior to the date upon which this Agreement becomes effective;

 

(ii)                                  in connection with this Agreement and thematters the subject hereof or referred to herein no Lender has relied uponinformation or advice provided by any Member and to the extent it has anyrelationship with that party in its capacity as a Member, none of the Membersshall be liable to any signatory for any action taken or omitted to be taken orfor the exercise of any discretion by it in connection with any mattercontemplated hereby and shall not be responsible for the efficiency, validity,enforceability or sufficiency of this Agreement or any matter the subjecthereof or referred to in this Agreement; and

 

(iii)                               the Borrowing Group Members shall be jointlyand severally liable to reimburse each Member for all out-of-pocket expenses(including the fees of professional advisers appointed to advise theCo-ordinating Committee) together with value added tax thereon, if any, incurredby it in connection with the performance of its role as such.

 

(b)                                 The provisions of Clause 12.2 (The Members)and this Clause 19 shall survive termination of this Agreement and each Membermay rely upon and enforce Clauses 12.2 (The Members), Clause 15.2(b) and thisClause under the Contracts (Rights of Third Parties Act) 1999.

 

**20.**                               **SEVERABILITY**

 

If a provision of anyFinance Document is or becomes illegal, invalid or unenforceable in anyjurisdiction, that shall not affect:

 

(a)                                  the legality, validity or enforceability inthat jurisdiction of any other provision of the Finance Documents; or

 

(b)                                 the legality, validity or enforceability inother jurisdictions of that or any other provision of the Finance Documents.

 

**21.**                               **COUNTERPARTS**

 

Each Finance Document may beexecuted in any number of counterparts, and this has the same effect as if thesignatures on the counterparts were on a single copy of the Finance Document.

 

**22.**                               **NOTICES**

 

**22.1**                        **Giving of Notices**

 

(a)                                  All notices or other communications under orin connection with the Finance Documents shall be given in writing and, unlessotherwise stated, may be given in person, by post, facsimile or e-mail. Anysuch notice will be deemed to be given as follows:

 

(i)                                     if delivered in person, at the time ofdelivery;

 

(ii)                                  if posted, five days after being deposited inthe post, postage prepaid, in a correctly addressed envelope;

 

(iii)                               if by facsimile, when received in legibleform; and

 

----

 

(iv)                              if by e-mail or any other electroniccommunication, when received in legible form.

 

However, a notice given inaccordance with the above but received on a non-working day or after businesshours in the place of receipt will only be deemed to be given on the nextworking day in that place.

 

(b)                                 For the purposes of the Finance Documents, anelectronic communication will be treated as being in writing.

 

(c)                                  Unless it is agreed to the contrary, anyconsent or agreement required under a Finance Document must be given inwriting.

 

**22.2**                        **Addresses for Notices**

 

(a)                                  The address, facsimile number and e-mailaddress of each Party (other than the Company and Intercreditor Agent) for allnotices under or in connection with the Finance Documents are those mostrecently notified in writing by that Party for this purpose to theIntercreditor Agent.

 

(b)                                 The contact details of the Company for thispurpose are:

 

Rhodia26 quai Alphonse le Gallo92100 Boulogne Billancourt Cedex

 

Facsimile number: +33 (1) 5538 44 71 / 21

 

Attention: Chief FinancialOfficer and General Counsel

 

(c)                                  The contact details of the IntercreditorAgent for this purpose are:

 

BNP ParibasEuropean Agency/Middle Office Group37, Place du Marché St. Honoré75031 Paris Cedex 01

 

Facsimile number: + 33 (1)42 98 43 17

 

Attention: RaymondBanzon/Isabelle Blandin/Catherine Staneso

 

(d)                                 The Intercreditor Agent shall, promptly uponrequest from any Party, give to that Party the address, facsimile number ore-mail address of any other Party applicable at the time for the purposes ofthis Clause.

 

**22.3**                        **Obligors**

 

(a)                                  All communications under the FinanceDocuments to or from an Obligor must be sent through the Intercreditor Agent.

 

(b)                                 All communications under the FinanceDocuments to or from an Obligor (other than the Company) must be sent throughthe Company.

 

(c)                                  Each Obligor (other than the Company)irrevocably appoints the Company to act as its agent:

 

(i)                                     to give and receive all communications underthe Finance Documents; and

 

(ii)                                  to sign all documents under or in connectionwith the Finance Documents.

 

(d)                                 Any communication given to the Company inconnection with a Finance Document will be deemed to have been given also tothe other Obligors.

 

(e)                                  The Intercreditor Agent may assume that anycommunication made by the Company is made with the consent of each otherObligor.

 

----

 

**23.**                               **LANGUAGE**

 

(a)                                  Any notice given under or in connection withany Finance Document shall be in English.

 

(b)                                 Any Existing Facility if not in English shallif requested by the Intercreditor Agent (acting in good faith) be accompaniedby a certified English translation and, for the purposes of this Agreementonly, the English translation shall prevail unless the document is a statutoryor other official document.

 

(c)                                  All other documents provided under or inconnection with any Finance Document shall be:

 

(i)                                     in English; or

 

(ii)                                  if not in English, accompanied by a certifiedEnglish translation and, in this case, the English translation shall prevailunless the document is a statutory or other official document.

 

**24.**                               **JURISDICTION**

 

**24.1**                        **Submission**

 

Forthe benefit of each Finance Party, each Obligor agrees that:

 

(a)                                  the courts of England have exclusivejurisdiction to settle any disputes in connection with the Finance Documentsand the English Courts are the most appropriate and convenient courts to settleany such disputes.

 

(b)                                 Without prejudice to paragraph (a) above andfor the benefit of each Finance Party, each Obligor agrees that any New YorkState Court or Federal Court sitting in New York has jurisdiction to settle anydisputes in connection with this Agreement and accordingly submits to thejurisdiction of those courts.

 

**24.2**                        **Service of process**

 

Withoutprejudice to any other mode of service, each Obligor not incorporated inEngland and Wales:

 

(a)                                  irrevocably appoints Rhodia Limited as itsagent for service of process in relation to any proceedings before the Englishcourts in connection with any Finance Document;

 

(b)                                 irrevocably appoints Rhodia Inc. as its agentfor service of process, where required, in relation to any proceedings beforeany courts located in the State of New York in connection with any FinanceDocument;

 

(c)                                  agrees that failure by the process agent tonotify the relevant Obligor of the process will not invalidate the proceedingsconcerned;

 

(d)                                 consents to the service of process relatingto any such proceedings by prepaid posting of a copy of the process to itsaddress for the time being notified under Clause 22 (Notices).

 

If any person appointed asprocess agent is unable for any reason to act as agent for service of process,the Company (on behalf of all the Obligors) must immediately appoint anotheragent on terms acceptable to the Intercreditor Agent. Failing this, theIntercreditor Agent may appoint another agent for this purpose.

 

**24.3**                        **Forum convenience andenforcement abroad**

 

Each Obligor:

 

(a)                                  waives objection to the English and New YorkState and Federal Courts on grounds of inconvenient forum or otherwise asregards proceedings in connection with a Finance Document; and

 

(b)                                 agrees that a judgement or order of anEnglish or New York State or Federal Court in connection with a FinanceDocument is conclusive and binding on it and may be enforced against it in thecourts of any other jurisdiction.

 

**24.4**                        **Non-exclusivity**

 

Nothing in this Clause 24limits the right of any Finance Party to bring proceedings against an Obligorin connection with the Finance Documents:

 

(a)                                  in any other court of competent jurisdiction;or

 

(b)                                 concurrently in more than one jurisdiction.

 

----

 

**25.**                               **WAIVER OF IMMUNITY**

 

**25.1**                        **Waiver of immunity**

 

Each Obligor irrevocably andunconditionally:

 

(a)                                  agrees that if a Finance Party bringsproceedings against it or its assets in relation to the Finance Documents, noimmunity from those proceedings (including, without limitation, suit,attachment prior to judgement, other attachment, the obtaining of judgement,execution or other enforcement) will be claimed by or on behalf of itself orwith respect to its assets;

 

(b)                                 waives any such right of immunity which it orits assets now has or may subsequently acquire; and

 

(c)                                  consents generally in respect of any suchproceedings to the giving of any relief or the issue of any process inconnection with those proceedings, including, without limitation, the making,enforcement or execution against any assets whatsoever (irrespective of its useor intended use) of any order or judgment which may be made or given in thoseproceedings.

 

**25.2**                        **Waiver of trial by jury**

 

THE OBLIGORS AND THE FINANCEPARTIES WAIVE ANY RIGHTS THEY MAY HAVE TO A JURY TRIAL OR ANY CLAIM OR CAUSE OFACTION BASED ON OR ARISING FROM ANY FINANCE DOCUMENT OR THE TRANSACTIONSCONTEMPLATED BY THE FINANCE DOCUMENTS. IN THE EVENT OF LITIGATION, THISAGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE COURT.

 

**26.**                               **GOVERNINGLAW**

 

This Agreement shall begoverned by English law.

 

This Agreement has beenentered into on the date stated at the beginning of this Agreement.

 

----

 

**SCHEDULE 1**

**VARIOUS PARTIES**

**PART 1**

**THEBORROWING GROUP**

 
| **Country**          |   | **Borrowing  Group Member**                                                                               |
|----------------------|--------|-----------------------------------------------------------------------------------------------------------|
|                 |   |                                                                                                      |
| Algeria              |   | RHODIA ALGERIE SPA                                                                                        |
| Belgium              |   | RHODIA BELGIUM (ex  RHONE-POULENC BELGIQUE)                                                               |
| Belgium              |   | RHODIA CHEMIE N.V. (ex  RHONE-POULENC CHEMIE N.V.)                                                        |
| Brazil               |   | RHODIA BRASIL LTDA                                                                                        |
| Brazil               |   | RHODIA POLIAMIDA E  ESPECIALIDADES LTDA.                                                                  |
| Canada               |   | RHODIA CANADA INC. (ex  RHONE-POULENC SPECIALTY CHEMICALS LTD) (ex ALKARIL CANADA LTD)                    |
| China                |   | RHODIA CHINA CO. LIMITED                                                                                  |
| China                |   | BAOTOU RHODIA RARE EARTH  COMPANY LTD (ex BAOTOU LUXI RHONE RARE EARTHS CO LTD)                           |
| China                |   | BEIJING RHODIA EASTERN  CHEMICAL Co. Ltd (ex Beijing Rhodia Eastern Chemical Co Ltd)                      |
| China                |   | JADE FINE CHEMICALS (Wuxi)  Co. Ltd                                                                       |
| China                |   | LIYANG RHODIA FOUNDER RARE  EARTH NEW MATERIAL CO LTD                                                     |
| China                |   | RHODIA HENGCHANG  (ZHANGJIAGANG) SPECIALTY CHEMICAL CO. LTD                                               |
| China                |   | RHODIA INTERNATIONAL  TRADING                                                                             |
| China                |   | RHODIA SILICA QINGDAO Co  Ltd (ex Rhodia Qingdao Silica Co Ltd)                                           |
| China                |   | RHODIA SPECIALTY CHEMICALS  WUXI Co Ltd (ex RHONE-POULENC SPECIALTY CHEMICALS WUXI Co Ltd)                |
| China                |   | RHODIA WUXI PHARMACEUTICAL  CO. LTD                                                                       |
| China                |   | RUOHAI (ZHEJIANG) FINE  CHEMICALS CO. LTD                                                                 |
| China                |   | SHANGHAI LONGMA  ENGINEERING PLASTICS CO LTD                                                              |
| China                |   | YINGKOU YINGLONG CHEMICAL FIBER  COMPANY LIMITED                                                          |
| Colombia             |   | RHODIA COLOMBIA LTDA                                                                                      |
| Denmark              |   | RHODIA DANMARK A/S                                                                                        |
| Egypt                |   | RHODIA EGYPT CHEMICALS  S.A.E. (ex RP EGYPT CHEMICALS)                                                    |
| Egypt                |   | RHODIA EGYPT DISTRIBUTION                                                                                 |
| France               |   | RHODIA S.A.                                                                                               |
| France               |   | NOVACARB (ex Rhod M)                                                                                      |
| France               |   | ORELIS (ex TECH SEP)                                                                                      |
| France               |   | RHODIA ACETOL (ex  RHONE-POULENC ACETOL)                                                                  |
| France               |   | RHODIA CHIMIE (ex  RHONE-POULENC CHIMIE)                                                                  |
| France               |   | RHODIA ECO SERVICES (ex  RHODIA FIN)                                                                      |
| France               |   | RHODIA ELECTRONICS AND  CATALYSIS (ex Rhodia Terres Rares)                                                |
| France               |   | RHODIA ENERGY (ex RHOD E)                                                                                 |
| France               |   | RHODIA ENGINEERING  PLASTICS S.A.S.                                                                       |
| France               |   | RHODIA ETANCHEITE (ex  RHONE-POULENC ETANCHEITE FRANCE)                                                   |
| France               |   | RHODIA FOOD (ex TEXEL)                                                                                    |
| France               |   | RHODIA HPCII (ex RHOD C)                                                                                  |
| France               |   | RHODIA INTERMEDIAIRES (ex  RHOD F)                                                                        |
| France               |   | RHODIA ORGANIQUE (ex RHONE  J)                                                                            |
| France               |   | RHODIA P.I. BELLE ETOILE  (ex RHODIA BELLE ETOILE)                                                        |
| France               |   | RHODIA P.I. CHALAMPE (ex  RHODIA ALSACHIMIE)                                                              |
| France               |   | RHODIA PERFORMANCE FIBRES                                                                                 |
| France               |   | RHODIA POLYAMIDE  INTERMEDIATES (ex RHODIA FIBER AND RESIN INTERMEDIATES)                                 |
| France               |   | RHODIA PPMC (ex BEVALOID)                                                                                 |
| France               |   | RHODIA RECHERCHES (ex RP  RECHERCHES)                                                                     |
| France               |   | RHODIA SERVICES (ex  RHODIA)                                                                              |
| France               |   | RHODIA SILICES (ex RHOD B)                                                                                |
| France               |   | RHODIA SILICONES (ex RHOD  A)                                                                             |
| France               |   | RHODIGAZ                                                                                                  |
| France               |   | RHODITECH (ex RHOD D)                                                                                     |
| Germany              |   | RHODIA ACETOW GMBH (ex  RHONE-POULENC RHODIA AG)                                                          |
| Germany              |   | RHODIA DEUTSCHLAND GmbH  (ex RHONE-POULENC DEUTSCHLAND GmbH)                                              |
| Germany              |   | RHODIA SILICON GmbH (ex  RHONE-POULENC SILICON GMBH)                                                      |
| Great-Britain        |   | RHODIA CONSUMER  SPECIALTIES LIMITED (ex Albright & Wilson UK Ltd)                                    |
| Great-Britain        |   | RHODIA ECO SERVICES  LIMITED (ex Staveley Chemicals Ltd)                                                  |
| Great-Britain        |   | RHODIA FOOD UK LIMITED (ex  Sisyphus 014 Ltd)                                                             |
| Great-Britain        |   | RHODIA HPCII UK LIMITED  (ex Sisyphus 013 Ltd)                                                            |
| Great-Britain        |   | RHODIA INDUSTRIAL  SPECIALTIES (ex Sisyphus 012 Ltd)                                                      |
| Great-Britain        |   | RHODIA LIMITED (ex  Rhône-Poulenc Chemicals Ltd)                                                     |
| Great-Britain        |   | RHODIA ORGANIQUE FINE  LIMITED (ex Sisyphus 011 Ltd)                                                      |
| Great-Britain        |   | RHODIA PHARMA SOLUTIONS  LIMITED (ex Rhodia Chirex Ltd)                                                   |
| Great-Britain        |   | RHODIA SEALANTS LIMITED  (ex Rhône-Poulenc Vispak Ltd)                                               |
| Greece               |   | RHODIA HELLAS SA (ex  Rhône-Poulenc Hellas S.A.)                                                     |
| Guatemala            |   | RHODIA DE CENTROAMERICA  S/A (EX— RHODIA GUATEMALA)                                                  |
| Hong Kong            |   | RHODIA HONG KONG LIMITED  (ex Rhône-Poulenc Asia Ltd)                                                |
| India                |   | ALBRIGHT & WILSON  CHEMICALS INDIA LIMITED (ex Albright Morarji and Pandit Ltd)                       |
| India                |   | RHODIA CHEMICALS INDIA LTD  (ex Rhône-Poulenc Chemicals (India) Ltd)                                 |
| Italy                |   | RHODIA ENGINEERING  PLASTICS Srl                                                                          |
| Italy                |   | RHODIA GERONAZZO SpA (ex  RHONE-POULENC GERONAZZO Spa)                                                    |
| Italy                |   | RHODIA ITALIA S.p.A. (ex  Rhône-Poulenc Chimica)                                                     |
| Italy                |   | RHODIA PERF FIBRES s.r.l.                                                                                 |
| Italy                |   | RHODIA SILICONI ITALIA                                                                                    |
| Ivory Coast          |   | RHODIA OUEST AFRIQUE                                                                                      |
| Japan                |   | ANAN KASEI CO., LTD                                                                                       |
| Japan                |   | RHODIA JAPAN LTD                                                                                          |
| Japan                |   | RHODIA NICCA Ltd (ex  RHONE-POULENC NICCA)                                                                |
| Korea (South)        |   | RHODIA SILICA KOREA (ex  Rhodia Kofran Ltd)                                                               |
| Korea (South)        |   | RHODIA KOREA LTD (ex  Rhône-Poulenc Korea Ltd)                                                       |
| Korea (South)        |   | RHODIA POLYAMIDE CO Ltd                                                                                   |
| Lebanon              |   | RHODIA MASHREK (ex Rhodia  Liban Sal)                                                                     |
| Malaysia             |   | ALBRIGHT & WILSON  (MALAYSIA) Sdn Bhd (ex Josen Chemical Sdn Bhd) / Rhodia Consummer Specialties  (?) |
| Malaysia             |   | RHODIA MALAYSIA SDN.BHD  (ex RHONE-POULENC MALAYSIA SDN.BHD)                                              |
| Malaysia             |   | RHODIA SILICONES MALAYSIA  SDN BHD (formerly Rhône-Poulenc Malaysia Sdn Bhd)                         |
| Mexico               |   | RHODIA FOSFATADOS DE  MEXICO S.A. DE CV                                                                   |
| Morocco              |   | RHODIA MAROC (ex  RHONE-POULENC MAROC)                                                                    |
| Peru                 |   | RHODIA PERU S/A                                                                                           |
| Philippines          |   | RHODIA PHILIPPINES INC.                                                                                   |
| Poland               |   | RHODIA FOOD BIOLACTA  Sp.z.o.o. (ex BIOLACTA TEXEL)                                                       |
| Romania              |   | RHODIA ROMANIA SRL (ex  Rhône-Poulenc Romania SRL)                                                   |
| Singapore            |   | RHODIA ASIA PACIFIC PTE  LTD (ex Rhodia Consumer Specialties Asia Pacific Pte Ltd)                        |
| Singapore            |   | RHODIA SINGAPORE PTE LTD  (ex Rhône-Poulenc Singapore Pte Ltd)                                       |
| Slovak Republic      |   | RHODIA INDUSTRIAL YARNS,  a.s.                                                                            |
| South Africa         |   | RHODIA SOUTH AFRICA (PTY)  Ltd (ex RHONE-POULENC SOUTH AFRICA (PTY) LTD)                                  |
| Spain                |   | RHODIA HOME, PERSONAL CARE  AND INDUSTRIAL INGREDIENTS ESPANA SA                                          |
| Spain                |   | RHODIA IBERIA SA (ex  RHONE-POULENC INDUSTRIAL SA)                                                        |
| Spain                |   | RHODIA IBERLATEX                                                                                          |
| Spain                |   | RHODIA SILICONAS ESPANA  S.A.                                                                             |
| Sweden               |   | RHODIA SVERIGE AB (ex  Rhône-Poulenc Sverige AB)                                                     |
| Switzerland          |   | RHODIA CAPITAL MARKET (ex  RHONE-POULENC (SUISSE) S.A.)                                                   |
| Switzerland          |   | RHODIA INDUSTRIAL YARNS  A.G. (ex RHODIA FILTEC A.G.)                                                     |
| Taiwan               |   | RHODIA ENGINEERING  PLASTICS Co, Ltd                                                                      |
| Thailand             |   | RHODIA PPMC THAILAND (ex  Awat Thai Ltd)                                                                  |
| Thailand             |   | RHODIA THAI INDUSTRIES LTD  (ex Rhône-Poulenc Thai Industries Ltd)                                   |
| Thailand             |   | RHODIA THAILAND LTD (ex  Rhône-Poulenc Chemicals (Thailand) Ltd)                                     |
| United Arab Emirates |   | RHODIA FZE (ex Rhodia  Trading FZE)                                                                       |
| United States        |   | PRIMESTER                                                                                                 |
| United States        |   | RHODIA ELECTRONICS AND  CATALYSIS INC.                                                                    |
| United States        |   | RHODIA INC                                                                                                |
| Venezuela            |   | RHODIA ACETOW VENEZUELA  C.A.                                                                             |
| Venezuela            |   | RHODIA SILICES DE  VENEZUELA C.A.                                                                         |

 

----

 

**PART 2**

**THEORIGINAL OBLIGORS**

 
| **Country**   |   | **Original  Obligors**                                      |
|---------------|--------|-------------------------------------------------------------|
|          |   |                                                        |
| Brazil        |   | RHODIA POLIAMIDA E  ESPECIALIDADES LTDA.                    |
| China         |   | RHODIA HENGCHANG  (ZHANGJIAGANG) SPECIALTY CHEMICAL CO. LTD |
| China         |   | RHODIA WUXI PHARMACEUTICAL  CO. LTD                         |
| China         |   | RHODIA CHINA CO. LIMITED                                    |
| France        |   | RHODIA S.A.                                                 |
| Japan         |   | RHODIA JAPAN LTD                                            |
| Mexico        |   | RHODIA FOSFATADOS DE  MEXICO S.A. DE CV                     |
| Switzerland   |   | RHODIA CAPITAL MARKET (ex  RHONE-POULENC (SUISSE) S.A.)     |
| Taiwan        |   | RHODIA ENGINEERING  PLASTICS Co, Ltd                        |
| United States |   | RHODIA INC                                                  |
| Venezuela     |   | RHODIA ACETOW VENEZUELA  C.A.                               |

 

----

 

**PART 3**

**ORIGINALLENDERS**

 
| BNP PARIBAS                                               |
|-----------------------------------------------------------|
| CRÉDIT LYONNAIS S.A.                                 |
| CRÉDIT INDUSTRIEL ET  COMMERCIAL                     |
| BANQUE DE L’ECONOMIE DU  COMMERCE ET DE LA MONETIQUE |
| CSFB                                                      |
| WACHOVIA                                                  |
| BAYERISCHE LANDESBANK                                     |
| SOCIÉTÉ GÉNÉRALE                      |
| THE BANK OF  TOKYO-MITSUBISHI, LTD.                       |
| FORTIS BANK N.V.                                          |
| NATEXIS BANQUES POPULAIRES                                |
| CCF                                                       |
| STANDARD CHARTERED BANK                                   |
| THE ROYAL BANK OF SCOTLAND  PLC                           |
| BANCO BILBAO VIZCAYA  ARGENTARIA                          |
| JPMORGAN CHASE BANK                                       |
| ING BANK N.V.                                             |
| UNICREDITO ITALIANO                                       |
| UFJ BANK NEDERLAND N.V.                                   |
| UFJ BANK LIMITED                                          |
| CITIBANK INTERNATIONAL PLC                                |
| LANDES GIROZENTRALE                                       |
| COMERICA                                                  |

 

**PART 4**

**FACILITYAGENTS**

 

BNP PARIBAS

 

----

 

**SCHEDULE 2**

**CONDITIONS PRECEDENT DOCUMENTS**

 

**PART 1**

**CONDITIONS PRECEDENT DOCUMENTS TO BE PROVIDED IN FORM ANDSUBSTANCE SATISFACTORY**

**TO EACH ORIGINAL LENDER ARE MARKED WITH AN ASTERISK (*)**

 

**1.**                                      **Authorisations**

 

1.1                                 A copy of the memorandum and articles ofassociation, certificate of incorporation and certificate of incorporation onchange of name (if any) or any other constitutional document of each OriginalObligor including, for any Original Obligor incorporated in France, a K-bisextract from the Trade and Companies Registry related to it.

 

1.2                                 A copy of a resolution of the board of directorsof each Original Obligor authorising the entry into, execution and performanceof this Agreement and the Finance Documents to which it is a party, and relatedor ancillary documents and authorising specified persons to execute those onits behalf.

 

1.3                                 A certificate of an authorised signatory ofeach Original Obligor or the Company on behalf of each Original Obligorcertifying:

 

(a)                                  that each document delivered under thisSchedule is correct, complete and in full force and effect as at a date no earlierthan the date of this Agreement;

 

(b)                                 that the execution of and assumption ofobligations under the Finance Documents will not result in any breach of anyrestriction binding on that Obligor;

 

(c)                                  as to the identity and specimen signatures ofthe directors and signatories of that Original Obligor;

 

(d)                                 that no Default is outstanding relating toit; and

 

(e)                                  that the representations and warranties madeby it in the Finance Documents are correct.

 

----

 

**2.**                                      **Financial Information**

 

(a)                                  A copy of the Original Financial Statements.

 

(b)                                 Consolidated management accounts, consistingof a balance sheet, profit and loss account and cashflow for the Company.

 

(c)                                  ***** The final version (updated from the draft ofNovember, 2003) of the due diligence report of Ernst & Young dated 28thNovember, 2003 together with confirmation from Ernst & Young that it can berelied upon by the Finance Parties in form and substance satisfactory to theLenders.

 

**3.**                                      **Agreements and documents**

 

(a)                                  An original of this Agreement executed by eachParty.

 

(b)                                 An original of the Fee Letter(s) and theletter attaching the agreed form of the Refinancing Facilities Term Sheet andeach Affected Facilities Agreement listed under heading “Committed Bank lines”in Schedule 3, Securitisation Programme and Lease Facilities.

 

(c)                                  ***** An original of the agreed form of theRefinancing Facilities Term Sheet.

 

(d)                                 Evidence that the amendments referred to inSchedule 9 (Agreed Lease Amendments Principles) have become effective or waiverand consent letters (and notices of satisfaction with conditions precedentthereto where applicable) from each of the lessors under the Lease Facilitiesto (i) this Agreement, (ii) the Agreed Lease Amendment Principles, (iii) theAgreed Security Principles and (iv) the Refinancing Facilities Term Sheet.

 

**4.**                                      **Legal opinions**

 

* A legal opinion in the agreed form ofShearman & Sterling LLP, legal advisers to the Company and the Obligors,addressed to the Finance Parties in respect of the Company and Rhodia Inc.

 

**5.**                                      **Miscellaneous**

 

(a)                                  Confirmation that no insolvency proceedingsof the type referred to in Clauses 11.7 (Insolvency) and 11.12 (Analogousproceedings) have been commenced against any Obligor or Material Subsidiary.

 

(b)                                 Evidence that any process agent referred toin Clause 24.2 (Service of process) has accepted its appointment to beappointed under this Agreement.

 

(c)                                  Evidence that all fees, expenses and costsproperly incurred and then due to any of the Finance Parties, the Lenders, theMembers and their legal advisors have been paid in full.

 

(d)                                 ***** Evidence that (A) an amount equal to 5 percent. of the Exposure under each of the Affected Facilities listed under theheading “Prepayable” in Schedule 3 and calculated by reference to the amountset out under the heading “Exposure” in Schedule 3 in respect of each AffectedFacility has been prepaid and corresponding commitment cancelled; and (B) theDerivative Deposit (if any) in respect of each Lender (or Affiliate) which hasexecuted this Agreement has been deposited with the relevant Lender (or itsAffiliate).

 

(e)                                  ***** A copy of the Original Business Plan(including liquidity/analysis).

 

(f)                                    A copy of the Group Structure Chart.

 

(g)                                 ***** Evidence of the status of the renegotiationfor the maintenance of and relevant waivers of covenants under theSecuritisation Programmes and back-up lines and USPP amendment discussions.

 

(h)                                 Due diligence reports with respect to theFacility Agreements by Shearman & Sterling and Jones Day.

 

(i)                                     Information regarding cash pooling.

 

(j)                                     A copy of any other authorisation or otherdocument, opinion or assurance which the Intercreditor Agent has notified theCompany is considered in good faith to be necessary at that time in connectionwith the entry into and performance of, and the transactions contemplated by,any Transaction Document or for the validity and enforceability of anyTransaction Document.

 

----

 

**PART 2**

**CONDITIONSPRECEDENT DOCUMENTS**

 

In respect of the SecurityDocuments, Security Sharing Agreement or Subordination Agreement as the casemay be (the **Relevant Documents**)

 

**1.**                                      **Relevant Documents**

 

An original of each executedRelevant Document.

 

**2.**                                      **Authorisations**

 

2.1                                 A copy of the memorandum and articles ofassociation, certificate of incorporation and certificate of incorporation onchange of name (if any) or any other constitutional document of each member ofthe Group party to the Relevant Document including, for any party incorporatedin France, a K-bis extract from the Trade and Companies Registry related to it(to the extent not already supplied under Schedule 2 Part 1).

 

2.2                                 A copy of a resolution of the board ofdirectors of each member of the Group party to the Relevant Documentsauthorising the entry into, execution and performance of the Relevant Documentsto which it is a party, and related or ancillary documents and authorisingspecified persons to execute those on its behalf.

 

2.3                                 A certificate of an authorised signatory ofeach member of the Group party to the Relevant Documents certifying:

 

(a)                                  that each document delivered under thisSchedule is correct, complete and in full force and effect as at a date noearlier than the date of the Relevant Document;

 

(b)                                 that the execution of and assumption of itsobligations under the Relevant Documents will not result in any breach of anyrestriction binding on it;

 

(c)                                  as to the identity and specimen signatures ofits directors and signatories;

 

(d)                                 that no Default is outstanding relating toit; and

 

(e)                                  that the representations and warranties madeby it in the Relevant Documents are correct.

 

**3.**                                      **Security Documents**

 

(a)                                  At least 2 copies (or, if required in therelevant jurisdiction, such additional copies as are requested by the FinanceParties) of the Security Documents to be entered into in accordance with theAgreed Security Principles, each duly executed by the parties to it.

 

(b)                                 Registration requirements of SecurityDocuments effected.

 

(c)                                  Documents necessary for perfection ofSecurity Documents.

 

(d)                                 A copy of all notices required to be sentunder the Security Documents.

 

(e)                                  A copy of all transfers, share certificatesand stock transfer forms or equivalent relating to assets charged by theSecurity Documents.

 

(f)                                    Evidence that each creditor has waived inwriting any negative pledge or other restriction in its favour that would orcould be breached by any member of the Group entering into the SecurityDocuments.

 

(g)                                 Copies of the Secured Intra Group Loans in anagreed form.

 

**4.**                                      **Legal opinions**

 

(a)                                  A legal opinion in the agreed form ofShearman & Sterling, legal advisers to the Company and the Obligors,addressed to the Finance Parties.

 

(b)                                 Other legal opinions in the agreed form fromlegal advisors to the Company or the Lenders with respect to the SecurityDocuments to be entered into as the Intercreditor Agent or Security Agentconsiders desirable (acting in good faith).

 

**5.**                                      **Miscellaneous**

 

(a)                                  Evidence that any process agent referred toin the Relevant Document has accepted its appointment to be appointedthereunder.

 

(b)                                 Evidence that all fees, expenses and costsproperly incurred and then due to any of the Finance Parties, or othercreditors party to a Relevant Document, the Members and their legal advisorshave been paid in full.

 

(c)                                  A copy of any other authorisation or otherdocument, opinion or assurance which the Intercreditor Agent or Security Agent(as the case may be) has notified the Company is considered in good faith to benecessary in connection with the entry into and performance of, and thetransactions contemplated by, any Relevant Document or for the validity andenforceability of any Relevant Document.

 

----

 

**PART 3**

**ADDITIONAL OBLIGOR CONDITIONS PRECEDENT DOCUMENTS**

 

**1.**                                      An Accession Agreement duly executed by theCompany and the Additional Obligor.

 

**2.**                                      **Authorisations**

 

2.1                                 A copy of the memorandum and articles ofassociation, certificate of incorporation and certificate of incorporation onchange of name (if any) or any other constitutional document of each AdditionalObligor including, for any Additional Obligor incorporated in France, a K-bisextract from the Trade and Companies Registry related to it.

 

2.2                                 A copy of a resolution of the board ofdirectors of each Additional Obligor authorising the entry into, execution andperformance of this Agreement and the Finance Documents to which it is a party,and related or ancillary documents and authorising specified persons to executethose on its behalf.

 

2.3                                 A certificate of an authorised signatory ofeach Additional Obligor certifying:

 

(a)                                  that each document delivered under thisSchedule is correct, complete and in full force and effect as at a date noearlier than the date of the Accession Agreement;

 

(b)                                 that the execution of and assumption ofobligations under the Finance Documents will not result in any breach of anyrestriction binding on that Obligor;

 

(c)                                  as to the identity and specimen signatures ofthe directors and signatories of that Additional Obligor;

 

(d)                                 that no Default is outstanding relating toit; and

 

(e)                                  that the representations and warranties madeby it in the Finance Documents are correct.

 

**3.**                                      A legal opinion from legal advisers to theCompany with respect to the entry into of the Finance Documents by thatAdditional Obligor with respect to the law of the place of its incorporation.

 

**4.**                                      **Miscellaneous**

 

(a)                                  Evidence that any process agent referred toin the Finance Documents has accepted its appointment to be appointedthereunder.

 

(b)                                 Evidence that all fees, expenses and costsproperly incurred and then due to any of the Finance Parties, or othercreditors party to a Finance Document, the Members and their legal advisorshave been paid in full.

 

(c)                                  A copy of any other authorisation or otherdocument, opinion or assurance which the Intercreditor Agent or Security Agent(as the case may be) has notified the Company is considered in good faith to benecessary 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.

 

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**Any text that has been deleted pursuant toRhodia's confidential treatment request is marked [“***”] herein and has beenseparately submitted with the U.S. Securities and Exchange Commission.**

 

**SCHEDULE 3**

**THE EXISTING FACILITIES, AFFECTED FACILITIES AND EXPOSURES**

 

[***]

 

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[3 PAGES DELETED, INCLUDING THIS PAGE, ANDFILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTEDWITH RESPECT TO THE OMITTED SCHEDULE.]

 

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**SCHEDULE 4**

**SECURITY - EXISTING SECURITY INTERESTS**

 

**Existing Security Interests**

 

***More than 50% owned Subsidiaries***

 
| **Mature of the security interest**        |   | **Entity  Enterprises**                                |   | **Beneficiary**                         |   | **Amount  (EUR)** |   | **Purpose*** |   |
|--------------------------------------------|--------|--------------------------------------------------------|--------|-----------------------------------------|--------|-------------------|--------|--------------|--------|
| Cash Deposit                               |   | Rhodia  Engineering  Plastics Taiwan Co. Ltd.     |   | BNP Paribas                             |   | 50,844            |   | NO           |   |
| Fixed assets Mortgage                      |   | Baotou  Rhodia Rare Earth Co. Ltd.                     |   | Bank of  China                          |   | 2,968,668         |   | YES          |   |
| Cash deposit                               |   | Rhodia Wuxi  Pharmaceutical Co. Ltd.                   |   | Bank of  China                          |   | 70,512            |   | YES          |   |
| Cash deposit                               |   | Rhodia  Finance International B.V.                     |   | Natexis  Banques Popularies]            |   | 10,579,529        |   | NO           |   |
| Mortgage                                   |   | Rhodia  Brazil                                         |   | Social  Security Authority              |   | 1,611,303         |   | NO           |   |
| Equipments                                 |   | Rhodia  Poliamida & Especialidados                 |   | Tax Judicial  Proceedings               |   | 848,064           |   | NO           |   |
| Cash deposit                               |   | Rhodia  Brazil + Rhodia Poliamida & Especialidados |   | Judicial  Proceedings                   |   | 9,490,208         |   | NO           |   |
| Fixed Assets                               |   | Rhodia  Mexicana SA de CV                              |   | Mexican  Customs                        |   | 31,015,508        |   | NO           |   |
| Cash deposit                               |   | Rhodia SA                                              |   | Natexis                                 |   | 1,491,000         |   | NO           |   |
| Collateral Cash                            |   | Rhodia  Italia                                         |   | Mediobanca                              |   | 11,924,291        |   | NO           |   |
| Cash Deposit                               |   | Rhodia  Silicones                                      |   | Credit  Mutual-Sales of Receivables     |   | 256,602           |   | NO           |   |
| Cash Deposit                               |   | Rhodia  Silicas                                        |   | Credit  Mutual-Sales of Receivables     |   | 621,647           |   | NO           |   |
| Cash Deposit                               |   | Rhodia PPMC                                            |   | Credit  Mutual-Sales of Receivables     |   | 1,180,711         |   | NO           |   |
| Cash Deposit                               |   | Rhodia HPCII                                           |   | Credit  Mutual-Sales of Receivables     |   | —            |   | NO           |   |
| Cash Deposit                               |   | Rhodia  Polyamide Intermediates                        |   | Credit  Mutual-Sales of Receivables     |   | 2,454,177         |   | NO           |   |
| Cash Deposit                               |   | Rhodia  Performances Fibres                            |   | Credit  Mutual-Sales of Receivables     |   | 20,083            |   | NO           |   |
| Cash Deposit                               |   | Rhodia  Electronics & Catalysis                    |   | Credit  Mutual-Sales of Receivables     |   | 783,884           |   | NO           |   |
| Cash Deposit                               |   | Rhodiatech                                             |   | Credit  Mutual-Sales of Receivables     |   | 160,860           |   | NO           |   |
| Cash Deposit                               |   | Rhodia Pi  Belle Etoille                               |   | Credit  Mutual-Sales of Receivables     |   | 140,565           |   | NO           |   |
| Cash Deposit                               |   | Rhodia Pi  Chalampe                                    |   | Credit  Mutual-Sales of Receivables     |   | 12,963            |   | NO           |   |
| Cash Deposit                               |   | Rhodia Acetol                                          |   | Credit  Mutual-Sales of Receivables     |   | 164,195           |   | NO           |   |
| Cash Deposit                               |   | RHODIA  ENERGY                                         |   | Credit  Mutual-Sales of Receivables     |   | 172,817           |   | NO           |   |
| Cash Deposit                               |   | RHODIA ECO  SERVICES SULFURIQUE                        |   | Credit  Mutual-Sales of Receivables     |   | 1,540,766         |   | NO           |   |
| Cash deposit                               |   | Rhodia Asia  Pacifique Pte Ltd                         |   | Standard  Chartered Bank                |   | 32,053            |   | NO           |   |
| Cash deposit                               |   | Albright  & Wilson Chemicals India Ltd             |   | Various  (electricity, Water, phone...) |   | 166,911           |   | NO           |   |
| **Total More than 50% owned Subsidiaries** |   |                                                   |   |                                    |   | 77,847,434        |   |         |   |

 

***Relevant Entities (less than 50% owned)listed in Schedule 1***

 
| **Mature of the security interest**            |   | **Entity  Enterprises**                   | ** ** | **Beneficiary**                    | ** ** | **Amount  (EUR)** |   | **Purpose*** | ** ** |
|------------------------------------------------|--------|-------------------------------------------|------------|------------------------------------|------------|-------------------|--------|--------------|------------|
| Fixed assets                                   |   | Liyang  Rhodia Founder Rare Earth Co. Ltd |       | Banques  chinoises (ICBC,ABC, UAC) |       | 20,055,604        |   | YES          |       |
|                                           |   |                                      |       |                               |       |              |   |         |       |
| Total Relevant Entities (less than 50%  owned) |   |                                      |       |                               |       | 20,055,604        |   |         |       |
|                                           |   |                                      |       |                               |       |              |   |         |       |
| TOTAL                                          |   |                                      |       |                               |       | 97,903,038        |   |         |       |

 

----

* YES if realted to financialdebt of Subsidiaries more than 50% owned or relevant Entities listed inSchedule 1

 

95

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**SCHEDULE 5**

**ACCESSION AGREEMENT**

 
| To:   | [INTERCREDITOR AGENT] as  Intercreditor Agent        |
|-------|------------------------------------------------------|
| From: | [PROPOSED  LENDER][ADDITIONAL OBLIGOR] [and Company] |

 

 

**RHODIAS.A.-Secured Co-ordination Agreement dated[          ] (the SecuredCo-ordination Agreement).**

 

We refer to the Secured Co-ordinationAgreement. This is an Accession Agreement.

 

Capitalised terms used in this AccessionAgreement have the same meaning as in the Secured Co-ordination Agreement.

 

We [Lender][Additional Obligor] hereby agreeto become a party to:

 

(a)                                  the Secured Co-ordination Agreement;

 

(b)                                 the Security Sharing Agreement; and

 

(c)                                  the Subordination Agreement.

 

(together the **Agreements**),

 

as * [a Lender][an Additional Obligor] and tobe bound by and comply with the terms of the Agreements as a[Lender][Additional Obligor] in accordance with the terms of the SecuredCo-ordination Agreement.

 

[We confirm that as at[                    ][today’s date] the following principal amounts were owing [to/by us] under thefollowing Facilities.

 

Details of Facility Principal Exposure

 

[                        ][                        ][**]

 

Our address for notices for the purposes ofthe Secured Co-ordination Agreement is:

 

[                                                   ]

 

This Agreement is governed by English law.

 

[Appropriate execution provision forLender]***

 

**Company**

 

RHODIA S.A.

 

By:

 

----

* Complete as applicable

 

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**Anytext that has been deleted pursuant to Rhodia’s confidential treatment requestis marked [“***”] herein and has been separately submitted with the U.S.Securities and Exchange Commission.**

 

**SCHEDULE 6**

**BUSINESS PLAN INCLUDING LIQUIDITY ANALYSIS**

**PART 1**

**RHODIA BUSINESS PLAN AFTER DISPOSALS**

 

[***]

 

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[2 PAGES DELETED, INCLUDING THIS PAGE, ANDFILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTEDWITH RESPECT TO THE OMITTED PART OF THE SCHEDULE.]

 

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**Anytext that has been deleted pursuant to Rhodia’s confidential treatment requestis marked [“***”] herein and has been separately submitted with the U.S.Securities and Exchange Commission.**

 

**PART 2**

**LIQUIDITYANALYSIS**

 

[***]

 

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[2 PAGES DELETED, INCLUDING THIS PAGE, ANDFILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTEDWITH RESPECT TO THE OMITTED PART OF THE SCHEDULE.]

 

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**SCHEDULE 7**

**INTER-COMPANY LOANS**

 

**PART 1**

**INTERCOMPANYLOANS****/BORROWINGS BETWEEN RHODIA S.A. AND ITS SUBSIDIARIES**

 
| **Transaction**     |   | **Consolidation  method** |   | **Subsidiary**                           |   | **Drawdown** |   | **Maturity** |   | **Interest** |   | **Nominal  Amount** |   | **Currency  Rate** |   | **Closing  Price** |   | **Closing  Amount** |   |
|---------------------|--------|---------------------------|--------|------------------------------------------|--------|--------------|--------|--------------|--------|--------------|--------|---------------------|--------|--------------------|--------|--------------------|--------|---------------------|--------|
|                |   |                      |   |                                     |   |         |   |         |   |         |   |                |   |               |   |               |   |                |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Albright & Wilson  Chemicals Pty Ltd |   | 21/11/03     |   | 19/12/03     |   | 5.07         |   | 15,633,693.18       |   | AUD                |   | /1.65830           |   | 9,427,542.17        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Performance Fibres  GmbH          |   | 28/11/03     |   | 30/01/04     |   | 2.645        |   | 63,355.78           |   | CAD                |   | /1.55520           |   | 40,738.03           |   |
| Subsidiary Lender   |   | Non-conslidated           |   | Rhodia Financial Services                |   | 21/11/03     |   | 19/12/03     |   | 0.055        |   | 800,262.28          |   | CHF                |   | /1.54840           |   | 516,831.75          |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Industrial Yarns AG               |   | 21/11/03     |   | 15/12/03     |   | 0.06333      |   | 29,418,426.88       |   | CHF                |   | /1.54840           |   | 18,999,242.37       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Industrial Yarns AG               |   | 28/11/03     |   | 15/12/03     |   | 0.18         |   | 3,500,000.00        |   | CHF                |   | /1.54840           |   | 2,260,397.83        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Industrial Yarns AG               |   | 27/11/03     |   | 03/12/03     |   | 0.05167      |   | 15,000,000.00       |   | CHF                |   | /1.54840           |   | 9,687,419.27        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Industrial Yarns AG               |   | 28/11/03     |   | 15/12/03     |   | 0.04833      |   | 1,066,139.70        |   | CHF                |   | /1.54840           |   | 688,542.82          |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Participation Et de Gestion              |   | 30/06/03     |   | 30/12/03     |   | 0.01         |   | 21,337,992.07       |   | CHF                |   | /1.54840           |   | 13,780,671.71       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Chem Italia S.P.A.                |   | 07/11/03     |   | 01/12/03     |   | 3.579        |   | 15,500,000.00       |   | EUR                |   | 1                  |   | 15,500,000.00       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Iberia                            |   | 21/11/03     |   | 19/12/03     |   | 1.94         |   | 10,034,730.51       |   | EUR                |   | 1                  |   | 10,034,730.51       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Engineering Plastics  NV          |   | 04/11/03     |   | 04/12/03     |   | 1.969        |   | 17,637,894.77       |   | EUR                |   | 1                  |   | 17,637,894.77       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Acetow AG                         |   | 16/10/03     |   | 16/01/04     |   | 2.963        |   | 5,000,000.00        |   | EUR                |   | 1                  |   | 5,000,000.00        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Acetow AG                         |   | 16/10/03     |   | 16/01/04     |   | 2.963        |   | 5,000,000.00        |   | EUR                |   | 1                  |   | 5,000,000.00        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Chem Italia S.P.A.                |   | 03/11/03     |   | 01/12/03     |   | 3.044        |   | 40,000,000.00       |   | EUR                |   | 1                  |   | 40,000,000.00       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Chimie                            |   | 09/10/03     |   | 07/10/04     |   | 2            |   | 185,000,000.00      |   | EUR                |   | 1                  |   | 185,000,000.00      |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Finance                           |   | 01/08/03     |   | 29/12/03     |   | 1.818        |   | 66,581,152.76       |   | EUR                |   | 1                  |   | 66,581,152.76       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Hpcii Espagne                     |   | 27/11/03     |   | 29/12/03     |   | 1.968        |   | 2,742,946.03        |   | EUR                |   | 1                  |   | 2,742,946.03        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Deutschland GmbH                  |   | 28/11/03     |   | 01/12/03     |   | 1.968        |   | 3,000,000.00        |   | EUR                |   | 1                  |   | 3,000,000.00        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Energy SAS                        |   | 28/11/03     |   | 05/12/03     |   | 3.393        |   | 8,801.36            |   | EUR                |   | 1                  |   | 8,801.36            |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Deutschland GmbH                  |   | 28/11/03     |   | 01/12/03     |   | 1.968        |   | 1,800,000.00        |   | EUR                |   | 1                  |   | 1,800,000.00        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Siliconas Espana SA               |   | 27/11/03     |   | 29/12/03     |   | 1.943        |   | 2,172,626.25        |   | EUR                |   | 1                  |   | 2,172,626.25        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Iberlatex Espana                  |   | 27/11/03     |   | 29/12/03     |   | 1.943        |   | 2,177,134.78        |   | EUR                |   | 1                  |   | 2,177,134.78        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Iberlatex Espana                  |   | 28/11/03     |   | 29/12/03     |   | 1.943        |   | 4,390,455.29        |   | EUR                |   | 1                  |   | 4,390,455.29        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Iberia                            |   | 27/11/03     |   | 10/12/03     |   | 1.943        |   | 8,000,000.00        |   | EUR                |   | 1                  |   | 8,000,000.00        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Intl Holdings BV                  |   | 28/11/03     |   | 15/01/04     |   | 1.9805       |   | 21,034,469.41       |   | EUR                |   | 1                  |   | 21,034,469.41       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Siliconas Espana SA               |   | 28/11/03     |   | 29/12/03     |   | 1.943        |   | 4,401,007.82        |   | EUR                |   | 1                  |   | 4,401,007.82        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Deutschland GmbH                  |   | 27/11/03     |   | 04/12/03     |   | 1.988        |   | 18,000,000.00       |   | EUR                |   | 1                  |   | 18,000,000.00       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Chimie                            |   | 02/09/03     |   | 02/12/03     |   | 2.026        |   | 91,170,904.99       |   | EUR                |   | 1                  |   | 91,170,904.99       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Limited                           |   | 21/11/03     |   | 19/12/03     |   | 4.72031      |   | 17,185,145.28       |   | GBP                |   | /0.69710           |   | 24,652,338.66       |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Limited                           |   | 26/11/03     |   | 19/12/03     |   | 4.71781      |   | 195,087.29          |   | GBP                |   | /0.69710           |   | 279,855.53          |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Reorganisation Ltd                |   | 28/11/03     |   | 31/12/03     |   | 4.7025       |   | 223,026,510.90      |   | GBP                |   | /0.69710           |   | 319,934,745.23      |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Limited                           |   | 28/11/03     |   | 01/12/03     |   | 3.43719      |   | 1,042,050.00        |   | GBP                |   | /0.69710           |   | 1,494,835.75        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Limited                           |   | 28/11/03     |   | 19/12/03     |   | 4.68         |   | 4,477,089.82        |   | GBP                |   | /0.69710           |   | 6,422,449.89        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Limited                           |   | 28/11/03     |   | 19/12/03     |   | 4.68         |   | 1,848,000.00        |   | GBP                |   | /0.69710           |   | 2,650,982.64        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia ind. Yarns  Daugavpils            |   | 24/10/03     |   | 03/12/03     |   | 2.725        |   | 2,510,547.87        |   | LVL                |   | /0.65550           |   | 3,829,973.87        |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Participations Chimiques  c/o Sefige     |   | 30/09/03     |   | 29/12/03     |   | 1.035        |   | 481,569.65          |   | USD                |   | /1.19940           |   | 401,508.80          |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Rhodia Performance Fibres  GmbH          |   | 28/11/03     |   | 30/12/03     |   | 0.99375      |   | 138,766.10          |   | USD                |   | /1.19940           |   | 115,696.26          |   |
| Subsidiary Lender   |   | Fully consolidated        |   | Alaver                                   |   | 25/06/03     |   | 22/12/03     |   | 1.49         |   | 8,076,904.30        |   | USD                |   | /1.19940           |   | 6,734,120.64        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Canada Inc                        |   | 30/09/03     |   | 03/12/03     |   | 4.93833      |   | 14,278,400.00       |   | CAD                |   | /1.55520           |   | 9,181,069.96        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Canada Inc                        |   | 28/10/03     |   | 03/12/03     |   | 4.98667      |   | 2,000,000.00        |   | CAD                |   | /1.55520           |   | 1,286,008.23        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Industrial Yarns AG               |   | 21/11/03     |   | 15/12/03     |   | 0.06333      |   | 2,000,000.00        |   | CHF                |   | /1.54840           |   | 1,291,655.90        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Gesmo                                    |   | 18/09/03     |   | 18/12/03     |   | 3            |   | 5,362,224.53        |   | CHF                |   | /1.54840           |   | 3,463,074.48        |   |
| Subsidiary Borrower |   | Equity method             |   | Nylstar SAS                              |   | 30/09/03     |   | 03/12/03     |   | 3.153        |   | -300,000.00         |   | EUR                |   | 1                  |   | -300,000.00         |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Energy SAS                        |   | 07/11/03     |   | 05/12/03     |   | 3.393        |   | 4,531,190.42        |   | EUR                |   | 1                  |   | 4,531,190.42        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Nederland                         |   | 21/11/03     |   | 19/12/03     |   | 3.365        |   | 506,826.31          |   | EUR                |   | 1                  |   | 506,826.31          |   |
| Subsidiary Borrower |   | Non-consolidated          |   | Rhodia Consomer Spec. BV                 |   | 31/10/03     |   | 30/01/04     |   | 3.453        |   | 584,066.84          |   | EUR                |   | 1                  |   | 584,066.84          |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Particitions                      |   | 29/10/03     |   | 30/04/04     |   | 3.508        |   | 62,252,844.16       |   | EUR                |   | 1                  |   | 62,252,844.16       |   |
| Subsidiary Borrower |   | Equity method             |   | Nylstar NV                               |   | 28/11/03     |   | 29/12/03     |   | 3.093        |   | 17,037,219.65       |   | EUR                |   | 1                  |   | 17,037,219.65       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Engineering Plastics  NV          |   | 07/11/03     |   | 08/11/04     |   | 8.5          |   | 15,500,000.00       |   | EUR                |   | 1                  |   | 15,500,000.00       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Finance Intl                      |   | 28/11/03     |   | 29/12/03     |   | 2.993        |   | 67,063,725.17       |   | EUR                |   | 1                  |   | 67,063,725.17       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Eco Services  Nederland B.V       |   | 21/11/03     |   | 19/12/03     |   | 3.365        |   | 4,500,000.00        |   | EUR                |   | 1                  |   | 4,500,000.00        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Industrial Yarns  Slovakia A.S.   |   | 28/11/03     |   | 31/12/03     |   | 3.393        |   | 3,788,920.00        |   | EUR                |   | 1                  |   | 3,788,920.00        |   |
| Subsidiary Borrower |   | Equity method             |   | Nylstar SAS                              |   | 03/09/03     |   | 03/12/03     |   | 3.153        |   | 2,800,000.00        |   | EUR                |   | 1                  |   | 2,800,000.00        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Germany  International            |   | 31/12/02     |   | 05/07/04     |   | 5.2          |   | 753,350,235.35      |   | EUR                |   | 1                  |   | 753,350,235.35      |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Germany  International            |   | 30/06/03     |   | 01/06/11     |   | 9.345        |   | 65,820,102.42       |   | EUR                |   | 1                  |   | 65,820,102.42       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Deutschland GMBH                  |   | 30/09/03     |   | 30/12/03     |   | 9.345        |   | 44,000,000.00       |   | EUR                |   | 1                  |   | 44,000,000.00       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Limited                           |   | 27/11/03     |   | 19/12/03     |   | 4.72031      |   | 1,500,000.00        |   | GBP                |   | /0.69710           |   | 2,151,771.63        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Limited                           |   | 25/11/03     |   | 19/12/03     |   | 4.72031      |   | 1,761,080.13        |   | GBP                |   | /0.69710           |   | 2,526,294.84        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Holding Limited                   |   | 02/01/02     |   | 04/01/10     |   | 6.301        |   | 58,724,352.50       |   | GBP                |   | /0.69710           |   | 84,240,930.28       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Holding Limited                   |   | 02/01/02     |   | 05/01/09     |   | 6.295        |   | 62,438,838.28       |   | GBP                |   | /0.69710           |   | 89,569,413.69       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Chirex Holdings Ltd               |   | 03/09/01     |   | 03/01/07     |   | 6.28         |   | 18,784,593.91       |   | GBP                |   | /0.69710           |   | 26,946,770.78       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Holding Limited                   |   | 03/09/01     |   | 03/01/07     |   | 6.28         |   | 50,573,906.67       |   | GBP                |   | /0.69710           |   | 72,548,998.24       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Holding Limited                   |   | 03/09/01     |   | 03/01/08     |   | 6.3          |   | 47,528,828.10       |   | GBP                |   | /0.69710           |   | 68,180,789.13       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Holding Limited                   |   | 03/09/01     |   | 03/01/06     |   | 6.25         |   | 53,815,799.10       |   | GBP                |   | /0.69710           |   | 77,199,539.66       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Chirex Holdings Ltd               |   | 03/09/01     |   | 03/01/06     |   | 6.25         |   | 19,988,725.38       |   | GBP                |   | /0.69710           |   | 28,674,114.73       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Chirex Holdings Ltd               |   | 03/09/01     |   | 04/01/05     |   | 5.63         |   | 21,653,612.00       |   | GBP                |   | /0.69710           |   | 31,062,418.59       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Japan Ltd                         |   | 10/11/03     |   | 05/12/03     |   | 1.36         |   | 1,000,236,250       |   | JPY                |   | /131.24000         |   | 7,621,428.30        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Japan Ltd                         |   | 06/11/03     |   | 05/12/03     |   | 1.36         |   | 1,900,448,875       |   | JPY                |   | /131.24000         |   | 14,480,713.77       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Fosfatados de Mexico              |   | 17/10/03     |   | 19/12/03     |   | 1.64         |   | -4,100,000.00       |   | USD                |   | /1.19940           |   | -3,418,375.85       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Energy SAS                        |   | 14/11/03     |   | 05/12/03     |   | 2.41         |   | 200,000.00          |   | USD                |   | /1.19940           |   | 166,750.04          |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Inc                               |   | 13/11/03     |   | 04/12/03     |   | 2.16         |   | 5,002,000.00        |   | USD                |   | /1.19940           |   | 4,170,418.54        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia China                             |   | 10/11/03     |   | 20/05/04     |   | 2.55         |   | 1,100,000.00        |   | USD                |   | /1.19940           |   | 917,125.23          |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Mexicana SA                       |   | 08/10/03     |   | 18/12/03     |   | 1.64         |   | 2,774,186.25        |   | USD                |   | /1.19940           |   | 2,312,978.36        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia de Mexico                         |   | 30/09/03     |   | 18/12/03     |   | 1.66         |   | 20,343,655.03       |   | USD                |   | /1.19940           |   | 16,961,526.62       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Fosfatados de Mexico              |   | 30/09/03     |   | 18/12/03     |   | 1.66         |   | 68,309,434.00       |   | USD                |   | /1.19940           |   | 56,953,004.84       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Especialidados                    |   | 30/09/03     |   | 18/12/03     |   | 1.66         |   | 2,643,403.97        |   | USD                |   | /1.19940           |   | 2,203,938.61        |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Engineering Plastics  Co, LTD     |   | 28/11/03     |   | 30/01/04     |   | 2.6675       |   | 1,003,051.92        |   | USD                |   | /1.19940           |   | 836,294.75          |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Engineering Plastics  Co, LTD     |   | 18/09/03     |   | 18/12/03     |   | 2.64         |   | 2,011,192.38        |   | USD                |   | /1.19940           |   | 1,676,832.07        |   |
| Subsidiary Borrower |   | Non-consolidated          |   | Rhodia Uruguay                           |   | 04/09/03     |   | 04/12/03     |   | 2.44563      |   | 763,906.79          |   | USD                |   | /1.19940           |   | 636,907.45          |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Deutschland GmbH                  |   | 20/06/03     |   | 22/12/03     |   | 2.33875      |   | 13,038,289.69       |   | USD                |   | /1.19940           |   | 10,870,676.75       |   |
| Subsidiary Borrower |   | Fully consolidated        |   | Rhodia Fosfatados de Mexico              |   | 19/09/03     |   | 19/12/03     |   | 1.64         |   | 39,142,502.53       |   | USD                |   | /1.19940           |   | 32,635,069.64       |   |
| Subsidiary Borrower |   | Non-consolidated          |   | Rhodia Argentina S.A.                    |   | 15/09/03     |   | 15/12/03     |   | 1.64         |   | 1,258,586.19        |   | USD                |   | /1.19940           |   | 1,049,346.50        |   |

 

----

 

**PART 2**

**INTERCOMPANY LOANS/BORROWINGS BETWEEN****THE RHODIA SUBSIDIARIES**

**(AS OF 30th NOVEMBER, 2003)**

 
| **Lending  entity**                 |   | **Borrowing entity**                       |   | **Amount (KEUR)** |   |
|-------------------------------------|--------|--------------------------------------------|--------|-------------------|--------|
|                                |   |                                       |   |              |   |
| Rhodia Finances                     |   | Rhodia Inc.                                |   | 175,088           |   |
| Rhodia Inc.                         |   | Rhodia Holding Inc.                        |   | 148,187           |   |
| Rhodia Ltd                          |   | Rhodia Chirex Holdings Ltd                 |   | 64,800            |   |
| Rhodia Financial Services  Inc.     |   | Rhodia Inc.                                |   | 38,528            |   |
| Rhodia Inc.                         |   | Rhodia Pharma Solutions  Inc.              |   | 27,887            |   |
| Rhodia Japan                        |   | Anan Kasei Co Ltd                          |   | 16,417            |   |
| Rhodia Acetow GmbH                  |   | Alexil                                     |   | 13,685            |   |
| Rhodia Benelux                      |   | Rhodia Finance  International BV           |   | 13,059            |   |
| Rhodia Deutschland GmbH             |   | Rhodia Acetow GmbH                         |   | 10,871            |   |
| Rhodia Inc.                         |   | Rhodia Electronics &  Catalysis Inc.   |   | 6,542             |   |
| Rhodia Financial Services  Inc.     |   | Rhodia Ltd                                 |   | 5,402             |   |
| Rhodia Financial Services  Inc.     |   | Rhodia Engineering  Plastics Corp—USA |   | 5,003             |   |
| Rhodia Iberia SA                    |   | Rhodia HPCII—Espagne                  |   | 4,000             |   |
| Rhodia China Co Ltd                 |   | Beijing RP Eastern  Chemical Ltd           |   | 3,212             |   |
| Rhodia China Co Ltd                 |   | Rhodia Wuxi Pharmaceutical  Co Ltd         |   | 2,992             |   |
| Rhodia Trading Australia            |   | Rhodia Australia Pty                       |   | 2,662             |   |
| Rhodia Silicones Shangai  Co Ltd    |   | Rhodia China Co Ltd                        |   | 2,153             |   |
| Rhodia China Co Ltd                 |   | Rhodia Silica Qingdao                      |   | 2,034             |   |
| Rhodia Polyamide  Intermediates     |   | Rhodia Recherches                          |   | 1,878             |   |
| Rhodia Ltd                          |   | Rhodia Asia-Pacific                        |   | 1,842             |   |
| Rhodia Silicones Australia  Pty Ltd |   | Rhodia Australia Pty                       |   | 1,618             |   |
| Rhodia Organique                    |   | Rhodia Recherches                          |   | 1,585             |   |
| Rhodia Inc.                         |   | Rhodia Engineering  Plastics Corp—USA |   | 1,537             |   |
| Rhodia Brésil                  |   | Rhodia Poliamida Brasil                    |   | 1,511             |   |
| Conuben SL                          |   | Rhodia Iberia SA                           |   | 1,350             |   |
| Rhodia Acetow Venezuela SA          |   | Rhodia Silices de  Venezuela C.A.          |   | 1,302             |   |
| Rhodia Hengchang Spec Chem          |   | Rhodia China Co Ltd                        |   | 1,169             |   |
| Rhodia China Co Ltd                 |   | Ruohai Fine Chemicals Co  Ltd              |   | 1,158             |   |
| Rhodia Poliamida Ltda               |   | Rhodia Brésil                         |   | 1,090             |   |
| Rhodia Silicones                    |   | Rhodia Recherches                          |   | 1,039             |   |
| A&W Thai Holding                |   | Rhodia Thai Industries Ltd                 |   | 1,003             |   |
| Rhodia Food SAS                     |   | Rhodia Recherches                          |   | 933               |   |
| Rhodia Iberia SA                    |   | Rhodia Iberlatex                           |   | 800               |   |
| Rhodia Silicones                    |   | GIE Osiris                                 |   | 758               |   |
| Rhodia Nicca                        |   | Rhodia Japan                               |   | 621               |   |
| Rhodia Brésil                  |   | Alexil                                     |   | 469               |   |
| Rhodia PPMC SAS                     |   | Rhodia Recherches                          |   | 468               |   |
| Rhodia China Co Ltd                 |   | Rhodia Specialty Chemicals  Wuxi           |   | 403               |   |
| Rhodia Cons Spec Malaysia           |   | Rhodia Malaysia SDN BHD                    |   | 373               |   |
| Rhodia China Co Ltd                 |   | Baotou Rhodia Rare Earths  Co., Ltd        |   | 302               |   |
| Rhoia Intern. Trading Co  Ltd       |   | Rhodia China Co Ltd                        |   | 235               |   |
| Rhodia Organique                    |   | Rhodia Food SAS                            |   | 186               |   |
| Rhodia HPCII                        |   | Rhodia Recherches                          |   | 181               |   |
| A&W Asia Pacific  Holding       |   | Rhodia Asia Pacific Pte  Ltd               |   | 169               |   |
| Rhodia Poliamida Ltda               |   | Rhodia Poliamida Brasil                    |   | 166               |   |
| Rhodia Electronics &  Catalysis |   | Rhodia Recherches                          |   | 158               |   |
| Rhodia Eco Services                 |   | Rhodia Recherches                          |   | 100               |   |
| Rhodia P.I. Belle Etoile            |   | Rhodia Recherches                          |   | 8                 |   |

 

----

 

**SCHEDULE 8**

**ERISA EVENTS**

 

For the purpose of this Agreement, an **ERISA Event** means:

 
| (a)    |   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | the occurrence of a  reportable event, within the meaning of Section 4043 of ERISA, with respect  to any Plan unless the 30-day notice requirement with respect to such event  has been waived by the PBGC or                                                                                                                                |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | the requirements of  Section 4043(b) of ERISA apply with respect to a contributing sponsor, as  defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in  paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is  reasonably expected to occur with respect to such Plan within the following  30 days; |
| (b)    |   | the application pursuant  to Section 412(d) of the Code or Section 303 of ERISA for a minimum funding  waiver with respect to a Plan;                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (c)    |   | the provision by the  administrator of any Plan of a notice of intent to terminate such Plan,  pursuant to Section 4041(a)(2) of ERISA (including any such notice with  respect to a plan amendment referred to in Section 4041(e) of ERISA);                                                                                                                                                                                                                                                                                                                                                |
| (d)    |   | the cessation of  operations at a facility of any Obligor or any ERISA Affiliate in the  circumstances described in Section 4062(e) of ERISA;                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (e)    |   | the withdrawal by any  Obligor or any ERISA Affiliate from a Multiple Employer Plan during a plan  year for which it was a substantial employer, as defined in Section  4001(a)(2) of ERISA;                                                                                                                                                                                                                                                                                                                                                                                                 |
| (f)    |   | the imposition of a lien  under Section 302(f) of ERISA with respect to any Plan;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (g)    |   | the adoption of an  amendment to a Plan requiring the provision of security to such Plan pursuant  to Section 307 of ERISA; or                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (h)    |   | the institution by the  PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or  the occurrence of any event or condition described in Section 4042 of ERISA  that constitutes grounds for the termination of, or the appointment of a  trustee to administer, such Plan, provided, however, that the occurrence of  the event or condition described in Section 4042(a)(4) of ERISA shall be an  ERISA Event only if the PBGC has notified any Obligor or ERISA Affiliate that  it intends to institute proceedings to terminate a Plan pursuant to such  subsection. |

 

 

**SCHEDULE 9**

**AGREED LEASE AMENDMENT PRINCIPLES**

 

Leases will be renegotiated and amended on abilateral basis within the framework of the arrangements under this Agreementin accordance with the Term Sheets to be provided to the Intercreditor Agent onor prior to the Commencement Date to include:

 

**1.**                                      **Reduction:**

 

(a)                                  5% at the time the consent and waiver letteris supplied to the Intercreditor Agent on or prior to the Commencement Date;

 

(b)                                 5% on the Term Date;

 

(c)                                  Lease Term unchanged or shortened to beco-terminus with the Refinancing Facilities Agreement.

 

**2.**                                      **Security:**

 

(a)                                  Guarantee of Rhodia S.A. on 100% of totallease obligation (same as the one existing today);

 

(b)                                 to share in security offered to FinanceParties under the Shared Security Documents in respect of 80% of obligations ofRhodia S.A. under its guarantee, subject to and in accordance with the AgreedSecurity Sharing Principles.

 

**3.**                                      **Fees:**

 

70bp payable at the signingof the lease amendment or consent and waiver letter referred to above.

 

**4.**                                      **Margin:**

 

305bp on the debt componentof 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.

 

----

 

**SCHEDULE 10**

**FORM OF COMPLIANCE CERTIFICATE**

 

***[To be reviewed, completed by ChiefFinancial Officer/Auditors and to include details of definitions andcomputations of financial covenants]***

 

To: [AGENT]

 

From: [to be completed]

 

[DATE]

 

Dear Sirs

 

**RHODIAS.A.—Secured Co-ordination Agreement (the Secured Co-ordination Agreement)**

 

I refer to the Secured Co-ordinationAgreement and in particular to Clause 10.1 (Financial covenant definitions),Clause 10.2 (Ratio of Consolidated Net Indebtedness to Adjusted EBITDAR) andClause 10.3 (Ratio of EBITDAR to Net Financial Expenses) thereof.

 

Terms defined in the Secured Co-ordinationAgreement shall have the same meaning when used in this certificate.

 

I certify as follows:

 

1.                                       For the Ratio Period ending on [  •  ]:

 

(a)                                  the Borrower’s EBITDAR was[          ];

 

(b)                                 the Borrower’s Adjusted EBITDAR was [            ];

 

(c)                                  the Borrower’s Consolidated Net Indebtednesswas [            ]; and

 

(d)                                 the Borrower’s Net Financial Expenses were[            ].

 

Accordingly for the RatioPeriod referred to above:

 

(i)                                     the ratio of the Borrower’s EBITDAR to itsNet Financial Expenses was: [           ]; and

 

(ii)                                  the ratio of the Borrower’s Consolidated NetIndebtedness to Adjusted EBITDAR was: [            ].

 

2.                                       The following table sets out the informationin relation to Relevant Entities used in the calculation of Adjusted EBITDARreferred 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** |   |
|---------------------------------------------------------------|--------|-------------------------------|--------|---------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|
|                                                          |   |                          |   |                                                                      |   |                                                                       |   |
|                                                          |   |                          |   |                                                                      |   |                                                                       |   |
|                                                          |   |                          |   |                                                                      |   |                                                                       |   |
|                                                          |   |                          |   |                                                                      |   |                                                                       |   |
|                                                          |   |                          |   |                                                                      |   |                                                                       |   |

 

3.                                       The following components were used in thecalculation of the Borrower’s Consolidated Net Indebtedness:

 

(a)                                  Gross debt = [            ];

 

(b)                                 Cash position = [            ];

 

(c)                                  Sale of receivables = [            ];

 

(d)                                 Securitisation outstanding = [            ]; and

 

(e)                                  Leasing = [            ].

 

4.                                       The following components were used in thecalculation of the Borrower’s Net Financial Expenses:

 

(a)                                  Interest Expense including interest portionof lease rentals = [            ]; and

 

(b)                                 Interest income = [            ].

 

 

Chief Financial Officer/Auditors

 

----

 

**SCHEDULE 11**

**AGREED SECURITY PRINCIPLES**

 

**PART 1**

**GENERAL**

 
| **Value:**                       |   | Based on a value-to-loan  ratio of 2.5x (LTV Test);                                                                                                                                                                                                                                         |
|----------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Secured  Assets**:             |   | Assets listed in Part 2 of  this Schedule AND any additional assets of the Group required to obtain a  Valuation Report confirming compliance with the LTV Test on the Security  Testing Date;                                                                                              |
| **Valuation  report**:           |   | Report provided by a third  party reputable international Corporate Finance Advisory firm appointed by  Rhodia confirming the value of the Secured Assets (listed in Part 2 and any  additional assets) on a going concern basis, on terms satisfactory to the  Majority Secured Creditors; |
| **Security  Testing Date**:      |   | Date on which the Shared  Security provided for in the SCA is Effective;                                                                                                                                                                                                                    |
| **Effective:**                   |   | Security package effective  as per SCA;                                                                                                                                                                                                                                                     |
| **Beneficiaries**:               |   | See Part 3 of this  Schedule;                                                                                                                                                                                                                                                               |
| **Amount of  Exposure secured:** |   | €1.2bn;                                                                                                                                                                                                                                                                                |
| **Security  Sharing:**           |   | **Beneficiaries  of Security shall be party to a Security Sharing Agreement which shall  legislate for limitations on and a procedure for Enforcement Action and a  procedure for sharing of security between different creditor groups as set  out tin Part 4.**                           |

 

 

 

----

 

**PART 2**

 

**SECUREDASSETS**

 
| **GRANTOR OF  SECURITY**                       |   | **COMPANY/COMPANIES  SECURED**                                                                                                          |   | **PROPOSED  SECURITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **VALUE  SHARES  (? M)(1)(2)**                                                                                                                                                                                                                                                                                          |   | **VALUE  INTERCO LOAN  (? M)(1)** |   | **TOTAL BOOK  VALUE  (? M)(1)** |   |
|------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|---------------------------------|--------|
|                                           |   |                                                                                                                                    |   | Security granted by:

•        Rhodia S.A. by way of a  share pledge over shares of certain of its subsidiaries listed below as  security for its obligations under the Finance Documents and Facility  Agreements as principal or surety; and

•        an intercompany borrower  under an intercompany loan owed to the Company (referred to in the table  below) over certain of its subsidiaries listed below as security for its  obligations under the intercompany loan. |   | Security granted by the  Company by way of an assignment of intercompany loans owed to it as security  for its obligations as principal debtor and, to the extent permitted by the  governing law of the security, guarantor.   A cession by ILi Daily cannot secure the obligations of the Company as  guarantor. |   |                              |   |                            |   |   |   |
|                                           |   |                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                    |   |                              |   |                            |   |   |   |
| **Rhodia  S.A. and Rhodia International GmbH** |   | **Rhodia  Acetow GmbH**

100% subsidiary of Rhodia  S.A. owned indirectly through Rhodia Germany International GmbH and Sopargest  S.A. |   | •        Share pledge by Rhodia  Germany International GmbH (RGI) of 85% of shares of Rhodia Acetow GmbH;                                                                                                                                                                                                                                                                                                                                                                                                               |   | Intercompany Loan in an  amount no less than ?400 million made to the pledgor by Rhodia S.A.                                                                                                                                                                                                                            |   | 484                               |   | 0                               |   | 558 |   |
|                                           |   |                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                    |   |                              |   |                            |   |   |   |
|                                           |   |                                                                                                                                    |   | **•**        Share pledge by Rhodia S.A.  of 100% of shares of Sopargest S.A. which owns, among others, remaining 15%  of shares of Rhodia Acetow GmbH.                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                    |   | 74                                |   |                            |   |   |   |
|                                           |   |                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                    |   |                              |   |                            |   |   |   |
|                                           |   | Status: Operating company                                                                                                               |   | The share pledge granted by  RGI is to be granted (A) by way of security for an intercompany loan in an  amount not less than ?400m made by Rhodia S.A. to RGI or (B) by RGI  directly by way of a limited recourse pledge, in each case to the fullest  extent permitted by law.  To the  extent not permitted alternative security of equivalent value will be  substituted.                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                    |   |                              |   |                            |   |   |   |
|                                           |   |                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                    |   |                              |   |                            |   |   |   |
| **Rhodia  S.A.**                               |   | **Rhodia  Brazil Ltda**

100% direct subsidiary of  Rhodia S.A.

Status: Operating company                                              |   | •        Share pledge by Rhodia S.A.  of 100% of shares of Rhodia Brazil Ltda (RBL)                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Intercompany loan by Rhodia  S.A. to RBL of Japanese Yen 5,500,000,000 (?43,000,000) due 11/04.                                                                                                                                                                                                                         |   | 201                               |   | 43                              |   | 244 |   |

 

----

(1)  Book value as of September 30, 2003

(2)  Does not take into account any goodwill amortization or otherassets depreciation or amortization that may take place at a later date

 

112

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| **GRANTOR OF  SECURITY**                       |   | **COMPANY/COMPANIES  SECURED**                                           |   | **PROPOSED  SECURITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **VALUE  SHARES  (? M)(1)(2)**                                                                                                                                                                                                                                                                                                   |   | **VALUE  INTERCO LOAN  (? M)(1)** |   | **TOTAL BOOK  VALUE  (? M)(1)** |   |
|------------------------------------------------|--------|--------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|---------------------------------|--------|
|                                           |   |                                                                     |   | Security granted by:

 

•        Rhodia S.A. by way of a  share pledge over shares of certain of its subsidiaries listed below as  security for its obligations under the Finance Documents and Facility  Agreements as principal or surety; and

 

•        an intercompany borrower  under an intercompany loan owed to the Company (referred to in the table  below) over certain of its subsidiaries listed below as security for its  obligations under the intercompany loan. |   | Security granted by the  Company by way of an assignment of intercompany loans owed to it as security  for its obligations as principal debtor and, to the extent permitted by the  governing law of the security, guarantor.   A cession by ILi Dailly cannot secure the obligations of the Company  as guarantor.

  |   |                              |   |                            |   |   |   |
|                                           |   |                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                             |   |                              |   |                            |   |   |   |
| **Rhodia  S.A. and Rhodia Participations SNC** |   | **Rhodia  Participations SNC**                                           |   | [Share pledges granted by  Rhodia S.A. over

•        100% of shares of Rhodia  Participations SNC;

 

•        25% of shares of Rhodia  Nederland](3)                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                             |   |                              |   |                            |   |   |   |
|                                           |   | 100% direct subsidiary of  Rhodia SA                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                             |   |                              |   |                            |   |   |   |
|                                           |   |                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                             |   |                              |   |                            |   |   |   |
|                                           |   | Status: Holding company for  Rhodia S.A.’s main French subsidiaries |   | •        The ?654,000,000  intercompany loan mentioned in the next column will be secured by share  pledges by Rhodia Participation SNC of:                                                                                                                                                                                                                                                                                                                                                                                             |   | Intercompany loan by Rhodia  S.A. to Rhodia Participations:

•    ?654,000,000 presently part  of cash pooling loans will be converted into a medium term loan                                                                                                                                               |   |                              |   | 654                             |   | 654 |   |
|                                           |   |                                                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                             |   |                              |   |                            |   |   |   |
|                                           |   | **Rhodia  Silicones S.A.S.**                                             |   | •        Rhodia Silicones S.A.S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                             |   | 117                               |   |                            |   |   |   |
|                                           |   | **Rhodia Silices  S.A.S.**                                               |   | •        Rhodia Silices S.A.S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                             |   | 37                                |   |                            |   |   |   |
|                                           |   | **Rhodia  Food S.A.S.**                                                  |   | •        Rhodia Food S.A.S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                             |   | 44                                |   |                            |   |   |   |
|                                           |   | **Rhodia  HPCII**                                                        |   | •        Rhodia HPCII                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                                                                                                                                                                                                                                                                             |   | 21                                |   |                            |   |   |   |
|                                           |   | **Rhodia  Organique**                                                    |   | •        Rhodia Organique                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                                                                                                                                                             |   | 88                                |   |                            |   |   |   |
|                                           |   | **Rhodia  PPMC**                                                         |   | •        Rhodia PPMC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                             |   | 46                                |   |                            |   |   |   |
|                                           |   | **Rhodia  Ecoservices**                                                  |   | •        Rhodia Ecoservices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                             |   | 43                                |   |                            |   |   |   |
|                                           |   | **Rhodia  Electronics & Catalysis**                                  |   | •        Rhodia Electronics &  Catalysis                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                             |   | 42                                |   |                            |   |   |   |
|                                           |   | **Rhodia  Intermediates**                                                |   | •        Rhodia Intermedites                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                             |   | 38                                |   |                            |   |   |   |
|                                           |   | **Rhodia  Meyhall**                                                      |   | •        Rhodia Meyhall                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                             |   | 22                                |   |                            |   |   |   |
|                                           |   | **Rhodia  Nederland**                                                    |   | •        75% of Rhodia Nederland                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                             |   | 39                                |   |                            |   |   |   |
|                                           |   | **Rhodia  Hengchang Zhangjiagang**                                       |   | •        Rhodia Hengchang  Zhangjiagang                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                             |   | 9                                 |   |                            |   |   |   |
|                                           |   | **Rhodia  Italia**                                                       |   | •        Rhodia Italia                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                             |   | 18                                |   |                            |   |   |   |

 

----

(3)                                  Assetsto be granted as security in case expert valuation does not meet LTV Test of2.5x in respect of the other Secured Assets on a going concern basis.

 

113

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| **GRANTOR OF  SECURITY** |   | **COMPANY/COMPANIES  SECURED**                                                                                                                                                                                             |   | **PROPOSED  SECURITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **VALUE  SHARES  (? M)(1)(2)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **VALUE  INTERCO LOAN  (? M)(1)** |   | **TOTAL BOOK  VALUE  (? M)(1)** |
|--------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|---------------------------------|
|                     |   |                                                                                                                                                                                                                       |   | Security granted by: 

 

•    Rhodia S.A. by way of a share pledge over  shares of certain of its subsidiaries listed below as security for its  obligations under the Finance Documents and Facility Agreements as principal  or surety; and 

 

•    an intercompany borrower under an  intercompany loan owed to the Company (referred to in the table below) over  certain of its subsidiaries listed below as security for its obligations  under the intercompany loan. |   | Security granted by the  Company by way of an assignment of intercompany loans owed to it as security  for its obligations as principal debtor and, to the extent permitted by the  governing law of the security, guarantor.   A cession by ILi Dailly cannot secure the obligations of the Company  as guarantor.                                                                                                                                                                                            |   |                              |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |
| **Rhodia  S.A.**         |   | **Rhodia  Participations SNC Subsidiaries**

 

Status: Operating companies

 

**Rhodia  Silicones**

**SASRhodia  Silices**

**SASRhodia  Food SAS**

 

**Rhodia  HPCII**

 

**Rhodia  Organique** |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Intercompany loans by  Rhodia S.A. to each of the companies listed below which are presently part of  cash pooling will be converted into medium term loans to be secured for:

 

•    Rhodia Silicones SAS of €76,000,000

•    Rhodia Silices SAS of €32,000,000

•    Rhodia Food SAS of €39,000,000

•    Rhodia HPCII of €29,000,000

•    Rhodia Organique of €126,000,000 |   | 0                                 |   | 302                             |   | 302 |
|                     |   |                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |
| **Rhodia  S.A.**         |   | **Rhodianyl  SNC**                                                                                                                                                                                                         |   | •    [Share pledge of 100% of Rhodianyl](4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |
|                     |   | 100% direct subsidiary of  Rhodia SA

 

                                                                                                                                                                        |   | •    The ?360,000,000 intercompany loan  mentioned in the next column will be secured by:                                                                                                                                                                                                                                                                                                                                                                                                                     |   | Intercompany loans by  Rhodia S.A. to Rhodianyl which are presently part of cash pooling to be  converted into medium term loans in an amount of ? 360,000,000.                                                                                                                                                                                                                                                                                                                                                     |   |                              |   | 360                             |   | 360 |
|                     |   |                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   | •    share pledge of 100% of Rhodia Eng.  Plastics,                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 32                                |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |
|                     |   | Status: Holding company for  Rhodia S.A.’s Polyamide activities                                                                                                                                                       |   | •    share pledge of 100% of Rhodia PI Chalampe  (Rhodianyl SNC owns only 87%)                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 93                                |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   | •    share pledge of 100% of Rhodia Polyamide  Intermediares                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 35                                |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   | •    share pledge of 100% of Rhodia Poliamida Especialidades  (Rhodianyl owns only 50% of Rhodia Poliamida Especialidades Ltda)                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 194                               |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |
|                     |   |                                                                                                                                                                                                                       |   | •    To be released if Short Term Facility is  not drawn in whole or in part or is cancelled in full by end of its  availability period.                                                                                                                                                                                                                                                                                                                                                                      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                              |   |                            |   |   |

 

----

(4)                                  Assetsto be granted as security in case expert valuation does not meet LTV Test of2.5x in respect of the other Secured Assets on a going concern basis.

 

114

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| **GRANTOR OF  SECURITY**                  |   | **COMPANY/COMPANIES  SECURED**         |   | **PROPOSED SECURITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | **VALUE  SHARES  (? M)(1)(2)**                                                                                                                                                                                                                                                                                           |   | **VALUE  INTERCO LOAN  (? M)(1)** |   | **TOTAL BOOK  VALUE  (? M)(1)** |
|-------------------------------------------|--------|----------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|---------------------------------|
|                                      |   |                                   |   | Security granted by:

•    Rhodia S.A. by way of a share pledge over  shares of certain of its subsidiaries listed below as security for its obligations  under the Finance Documents and Facility Agreements as principal or surety;  and

 

•    an intercompany borrower under an  intercompany loan owed to the Company (referred to in the table below) over  certain of its subsidiaries listed below as security for its obligations  under the intercompany loan. |   | Security granted by the  Company by way of an assignment of intercompany loans owed to it as security  for its obligations as principal debtor and, to the extent permitted by the  governing law of the security, guarantor.   A cession by ILi Dailly cannot secure the obligations of the Company  as guarantor. |   |                              |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
| **Rhodia  S.A. and Rhodia Holdings Ltd.** |   | **Rhodia  Holdings Ltd.**              |   | •    Share pledge by Rhodia S.A. of 100% of  Rhodia Holdings Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | Intercompany loans by  Rhodia S.A. to Rhodia Holdings Ltd as set out below:                                                                                                                                                                                                                                              |   | 817                               |   | 391                             |   | 1,208 |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
|                                      |   | 100% direct subsidiary of  Rhodia S.A. |   | •    The ?390,847,013 (GBP 273,045,723)  intercompany loans mentioned in the next column to be secured by share  pledges granted by Rhodia Holding Ltd. over:                                                                                                                                                                                                                                                                                                                                       |   | •    GBP 58,724,352 due on 04/01/10

 

•    GBP 62,438,838 due on 05/01/09

 

•    GBP 47,528,828 due on 03/01/08                                                                                                                                |   |                              |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
|                                      |   | Status: Holding company                |   | •    Rhodia Overseas Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | •    GBP 53,815,799 due on 03/01/06                                                                                                                                                                                                                                                                  |   | 1                                 |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
|                                      |   |                                   |   | •    Rhodia Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | •    GBP 50,537,906 due on 03/01/07.                                                                                                                                                                                                                                                                 |   | 354                               |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
|                                      |   |                                   |   | •    Rhodia HPC ?? UK Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                     |   | 8                                 |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
|                                      |   |                                   |   | •    Rhodia Food UK Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                     |   | 4                                 |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
|                                      |   |                                   |   | •    Rhodia Ecoservices Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                     |   | 26                                |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
|                                      |   |                                   |   | •    Rhodia Pharma Solutions (Holdings) Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                     |   | 66                                |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
|                                      |   |                                   |   | •    Rhodia Consumer Specialities Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                                                                                                                                                                                                                                                                                     |   | 1                                 |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
|                                      |   |                                   |   | •    Rhodia Industrial Specialities Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                                                                                                     |   | 28                                |   |                            |   |   |
|                                      |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   |   |
| Total                                     |   |                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                                                                                                                                                                                                                                                                                     |   |                              |   |                            |   | 3,326 |

 

115

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**PART 3**

**BENEFICIARIES**

 
| **Affected Facilities (as per  Schedule 3 of the SCA)** |   | **Pre-term  date(5)  Exposure secured by shared  security**                                                                                                                                                                                                                                                                          |   | **Post-term  date  Secured by  Exposure  shared security**                                                                                                                                                                                                                                       |   | **Pre-term  date  Non-shared security**                                                                                                                                                  |   | **Post-term  date  Non-shared security**                                                                                                                                                                                          |
|---------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                    |   |                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                     |   |                                                                                                                                                                                                                              |
| Committed Bank lines/Refinancing Facilities Agreement   |   | 100% of Exposure as set  out in Schedule 3 of SCA                                                                                                                                                                                                                                                                                    |   | As under the Refinancing  Facilities Agreement                                                                                                                                                                                                                                                   |   | Existing Security, if any,  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement                                                                                         |   | Existing security, if any,  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement where  not refinanced under the Refinancing Facilities Agreement                                                                 |
| Uncommitted Facilities including Overdraft Facilities   |   | 100% of Exposure as set  out in Schedule 3 of SCA as reduced in accordance with the SCA                                                                                                                                                                                                                                              |   | 100% of Exposure at Term  Date, not to exceed 100% of Exposure as set out in Schedule 3 of SCA as  reduced in accordance with the SCA                                                                                                                                                            |   | Existing security, if any,  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement                                                                                         |   | Existing security, if any,  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement                                                                                                                                  |
| Leases                                                  |   | 80% of Exposure as set out  in Schedule 3 of SCA (to include equity/recourse obligations) [as reduced in  accordance with the SCA]                                                                                                                                                                                                   |   | 80% of Exposure as set out  in Schedule 3 of SCA as reduced in accordance with the SCA(6) [and after  taking into account permitted lease payments during SCA]                                                                                                                                   |   | Existing security as per  Part 1 of Schedule 4 of SCA under relevant Facility Agreement and where  applicable 5% Lessor Reduction in accordance with Agreed Lease Agreeement  Principles |   | Existing security as per  Part 1 of SCA under relevant Facility Agreement and where applicable 5%  Lessor Reduction on Term Date                                                                                                  |
| Letters of credit/banking guarantees                    |   | 30% of Exposure as set out  in Schedule 3 of SCA and 100% of that Exposure in respect of a claim made by  a Lender following a payment under that letter of credit or guarantee by that  Lender (except in respect of a payment under an “extend or pay” letter of  creditor or guarantee made at the time of its maturity |   | 30% of Exposure as set out  in Schedule 3 of SCA except for letters of credit/banking guarantees (i)  maturing post-Term Date to be negotiated on a bilateral basis upwards or  downwards on or around the maturity date or (ii) counter-indemnified under  the Refinancing Facilities Agreement |   | Existing security as per  Part 1 of Schedule 4 of SCA under relevant Facility Agreement                                                                                                  |   | Existing security as per  Part 1 of Schedule 4 of SCA under relevant Facility Agreement and cash  collateral and/or a counter-guarantee under the Refinancing Facilities  Agreement up to a maximum aggregate amount to be agreed |
| Derivative Instruments                                  |   | 100% of its Derivative  Liability up to the maximum Exposure under that Derivative Instrument as set  out in Schedule 3 of SCA                                                                                                                                                                                                       |   | 100% of its Derivative  Liability up to the maximum Exposure under that Derivative Instrument as set  out in Schedule 3 of the SCA                                                                                                                                                               |   | Derivative Deposit as per  the SCA up to a maximum aggregate amount for all Derivative Instruments not  exceeding Euros 40,000,000                                                       |   | Derivative Deposit as per  the SCA up to a maximum aggregate amount for all Derivative Instruments not  exceeding the amount secured at the Term Date                                                                             |

 

 
| **Non-Affected Facilities (as  per Schedule 3 of the SCA)**              |   | **Pre-term  date(5)  Exposure secured by shared  security** |   | **Post-term  date  Secured by  Exposure  shared security** |   | **Pre-term  date  Non-shared security** |   | **Post-term  date  Non-shared security** |
|--------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|------------------------------------------------------------|--------|-----------------------------------------|--------|------------------------------------------|
|                                                                     |   |                                                        |   |                                                       |   |                                    |   |                                     |
| High Yield Bonds                                                         |   | None                                                        |   | None                                                       |   | None                                    |   | None                                     |
| USPP                                                                     |   | None                                                        |   | None                                                       |   | None                                    |   |                                     |
| EMTN                                                                     |   | None                                                        |   | None                                                       |   | None                                    |   | None                                     |
| Credit facilities (committed and uncommitted bank lines and  overdrafts) |   | None                                                        |   | None                                                       |   | None                                    |   | None                                     |
| Securitisations                                                          |   | None                                                        |   | None                                                       |   | None                                    |   | None                                     |
| Sales of receivables/forfeiting                                          |   | None                                                        |   | None                                                       |   | None                                    |   | None                                     |
| Operating leases                                                         |   | None                                                        |   | None                                                       |   | None                                    |   | None                                     |
| Letters of credit/banking guarantees                                     |   | None                                                        |   | None                                                       |   | None                                    |   | None                                     |
| Forfeiting programmes                                                    |   | None                                                        |   | None                                                       |   | None                                    |   | None                                     |

 

----

(5)                                  Dilution percentage Secured Debt to SharedSecurity approximately 91/98%.

 

(6)                                  Schedule 3 will be updated to reflect agreedcommercial terms and Exposure as reduced.

 

----

 

**PART 4**

**SECURITYSHARING PRINCIPLES**

 

1.                                       **Parties to the SecuritySharing Agreement:**  The Company, the Senior Secured Creditors(and relevant Facility/Security Agents), the Security Agent and theIntercreditor Agent. The USPP Noteholders shall not be parties to, but may havethe benefit of, the provisions of the Security Sharing Agreement.

 

2.                                       **Senior Secured Creditors:**  Thecreditors listed in the attached Schedule pre/post Term Date (as defined in theSCA) including beneficiaries of both the Shared Security and the Non-SharedSecurity.

 

3.                                       **Majority Secured Creditors:** Senior Secured Creditors who together represent 66.67% of outstandingExposure of the Senior Secured Creditors (including after the Term Date (butnot before) the commitments/outstandings under the Refinancing FacilitiesAgreement).

 

4.                                       **Security Agent:**  Tobe agreed.

 

**5.**                                      **Security:**

 

•                                          **Shared Security-**The Secured Assets as listed in Part 2 ofSchedule 11 of the SCA (including for these purposes the new Company Guarantee)and any other assets designated as Shared Security by the Company and theIntercreditor Agent in accordance with the SCA.

 

•                                          **Non-Shared Security**-The security listed in the attached Schedulepre/post Term Date (as defined in the SCA) being the Existing Security (asdefined in the SCA) and any existing guarantees (including any existingguarantees from the Company but excluding the Rhodia Inc and the Rhodia HoldingInc. guarantee of the USPP) and any security interests/guarantees permitted tobe created by the SCA in respect of each Facility (other than the SharedSecurity) and including equipment/assets subject to a lease but excluding, forthe avoidance of doubt, receivables under securitisation programmes.

 

**6.**                                      **Secured Debt:**

 

•                                          The aggregate amount of Exposure under eachFacility which is to be secured by the Shared Security up to the maximum amountper Facility set out in the attached Schedule pre/post Term Date.

 

•                                          The maximum aggregate amount of Secured Debthas been determined having regard to security interests permitted under thesenior High Yield Bonds being Euros 1.3 billion minus (i) up to €40 million ofDerivative Deposit permitted by SCA and (ii) up to €60 million of additionalnon-Shared Security permitted by SCA.

 

•                                          The maximum aggregate amount of the presentvalue of net rental payments under leases(7) which can be secured as SecuredDebt is € 150 million.

 

 

----

(7)                                  Only including Cranbury, SG Synthetic Leaseand Leasing “Chase”.

 

•                                          The USPP will not be Secured Debt for thepurposes of the Security Sharing Agreement and Security Documents (see point 12below for treatment of USPP).

 

•                                          It is intended that the Shared Security willsecure any Exposure which was secured on the Shared Security and which isreplaced, refinanced, refunded or renewed to the fullest extent legallypossible.

 

**7.**                                      **Ranking of Secured Debt:**

 

•                                          The Senior Secured Creditors (including theParticipants in the Rhodia Inc Synthetic Lease) will rank *pari passu* in right of priority andpayment in respect of the Secured Debt secured by the Shared Security.

 

•                                          The *paripassu* ranking of the Secured Debt secured by the Shared Securitywill apply regardless of any matter or thing whatsoever which might otherwiseimpact that ranking including, for example, the order of registration, notice orexecution of any document any fluctuation in the outstanding amount of, or anyintermediate discharge of, any Secured Debt.

 

**8.**                                      **Consents:**  TheSenior Secured Creditors will:

 

•                                          consent to the granting of the SharedSecurity both pre-Term Date and post-Term Date;

 

•                                          co-operate (but not take or refrain fromtaking action otherwise prejudicial to it) so that the Secured Debt continuesto be secured on the Shared Security until the Senior Discharge Date; and

 

•                                          consent to the granting of new securitypermitted to be granted by the SCA and intended to benefit the lenders underthe Refinancing Facilities Agreement.

 

**9.**                                      **Security DischargeDate/Release:**

 

•                                          The Security Sharing Agreement will applyfrom the date of signature through to the Security Discharge Date as regardsthe Security except that it will cease to apply to Non-Shared Security afterthe Term Date (unless a default under the SCA is outstanding at such date) orif all obligations in respect of the USPP have not been unconditionally paid ordischarged in full.

 

•                                          Security Discharge Date means the date onwhich the Intercreditor Agent notifies the Company (acting on the instructionsof the Secured Creditors) in writing that all Secured Debt has beenunconditionally paid or discharged in full and that the total commitments underthe secured Facilities have been cancelled in full. Notwithstanding theforegoing and with exceptions to be agreed, the Security shall not be releasedexcept to the extent that all obligations in respect of the USPP have been unconditionallypaid or discharged in full.

 

•                                          The Security Sharing Agreement will provide arelease mechanism (to be agreed) for Shared Security assets on and to theextent of a disposal permitted under and in accordance with the SCA pre-Termdate and/or the Refinancing Facilities Agreement post-Term Date and/or for thepurpose of the paragraph above.

 

•                                          For the purposes of the Shared Security, therelease date means the date on which the Security Agent notifies the Company(acting on the instructions of the Secured Creditors) in writing that the longterm credit rating for the Company quoted by both Moody’s and S&P hasreached investment grade and provided that other security for all otherfacilities (other than Non-Shared Security and existing guarantees) has been oris simultaneously released.

 

----

 

**10.**                               **Enforcement of SharedSecurity:**

 

•                                          Until the Security Discharge Date, theSecurity Agent and /or the Majority Secured Creditors shall have the exclusiveright to enforce the Shared Security and to give instructions to the SecurityAgent to do the same, irrespective of whether any event of default or declareddefault has occurred under any Facility.

 

•                                          The USPP Noteholders shall have no votingrights under the Security Sharing Agreement nor any right to direct theSecurity Agent or any Senior Secured Creditor in respect of any action relatingto the Shared Security and/or the Non-Shared Security.

 

**11.**                               **Enforcement of Non-SharedSecurity:**

 

•                                          Until the Term Date (but not thereafterunless a Default is outstanding under the SCA) no Senior Secured Creditor shallenforce any Non-Shared Security or generally take any Enforcement Action (asdefined in the SCA) (other than as permitted by and in accordance with the SCA)unless (i) the Majority Secured Creditors have agreed to the same in writing or(ii) one or other of the following Events of Default is outstanding: a paymentdefault, an insolvency event, unenforceability, invalidity/failure to grantpriority ranking of lease security, failure to maintain required insurances orlessor/participants good faith opinion that non-exercise of rights in respectof non-shared security would jeopardise recovery of uncovered portion (20%) ofSecured Debt under the Shared Security. For the avoidance of doubt, the priorwritten consent of the Majority Secured Creditors is not required by the USPPNoteholders to claim on or enforce the Rhodia Inc. or Rhodia Holding Inc.guarantees.

 

•                                          Rights and remedies shall be exercised andenforcement action taken(8) against the Non-Shared Security (where suchSecurity has become enforceable) by the Senior Secured Creditor benefitingtherefrom prior to being entitled to receive any proceeds of any SharedSecurity.

 

----

(8)                                  Time period to be agreed.

 

•                                          There may be a limited number of exceptionsto the above principle, for example with respect to Leases and/or DerivativeInstruments where the Company cannot provide the required amount of DerivativeDeposit or a creditor action required to preserve a claim ininsolvency/liquidation.

 

**12.**                               **USPP Noteholders/Trustee:**

 

•                                          USPP Noteholders will benefit from the creditenhancement of Rhodia Inc. and Rhodia Holding Inc. (the “USPP Guarantors”) (tobe agreed) and benefit from the provisions of the Security Sharing Agreementbut will not be Senior Secured Creditors or parties thereto.

 

•                                          The contractual turnover mechanism wouldprovide that the Senior Secured Creditors agree to turnover an amount of netenforcement proceeds with regard to the Shared Security to the USPP Noteholderscalculated by reference to the relevant Exposures/recoveries (to be agreed) tothe extent the USPP Noteholders have been unable to recover any debt throughtheir recourse to any guarantor of the notes.

 

•                                          No Senior Secured Creditor would have anyobligation to turnover any amount which would otherwise become due under theSecurity Sharing Agreement to the USPP noteholders where in its good faithopinion it would not be able to maintain and/or enforce an unsecured claim forthe full amount otherwise to be turned-over (whether as a result of a clawbackrisk or otherwise).

 

----

 

•                                          The Company will indemnify and hold harmlesseach Secured Senior Creditor in a form to be agreed for any amounts turned overby it to the USPP Noteholders (such indemnity claim will not be secured asSecured Debt). Standard subrogation/assignment provisions to be included in theSecurity Sharing Agreement in respect of amounts turned over to USPPNoteholders.

 

•                                          No representation or warranty would be madeby any Senior Secured Creditor (or relevant Facility/Security Agents), theSecurity Agent or the Intercreditor Agent to the USPP noteholders as to thelegality, enforceability, collectibility or value, maintenance, enforcement,release or discharge of the Security.

 

•                                          No Senior Secured Creditor (nor relevantFacility/Security Agents), the Security Agent or the Intercreditor Agent wouldhave any obligation to the USPP noteholders to monitor business, assets,condition, operations, prospects, credit or the Security and USPP noteholderswill expressly waive any rights/recourse in respect thereof.

 

•                                          The USPP Noteholders will exercise rights andremedies and take enforcement action(9) against Rhodia Inc and any otherguarantor prior to being entitled to receive any amount of the turnoverproceeds in respect of the Shared Security mentioned above (seePayments/distributions below).

 

----

(9)                                  Time period to be agreed.

 

•                                          The prior written consent of the MajoritySecured Creditors is not required by the USPP Noteholders to claim on orenforce the USPP Guarantors’ guarantees.

 

**13.**                               **Payments/distributions:**

 

•                                          Enforcement proceeds of Shared Security willbe paid to and distributed by the Intercreditor Agent/Security Agent.

 

•                                          Enforcement proceeds of Non-Shared Securitywill be paid to and distributed by the relevant Facility Agent or paid to therelevant Secured Creditor.

 

•                                          An escrow arrangement will need to beestablished pending receipt of proceeds of enforcement of Shared Security toensure that proceeds are not distributed prior to enforcement action(10)against Non-Shared Security/existing guarantees and to preserve Senior SecuredCreditors net entitlement to any distribution such that Senior SecuredCreditors benefiting from Non-Shared Security are not disadvantaged in relationto any other Secured Creditors.

 

----

(10)                            Time period to be agreed.

 

•                                          The order of application of enforcementproceeds is to be agreed.

 

**14.**                               **Loss Sharing:**

 

•                                          Each Senior Secured Creditor must account forand deduct the amount of proceeds received from the enforcement of theNon-Shared Security/existing guarantees from its global individual Exposure forthe purposes of determining its *pro rata*entitlement to any proceeds of enforcement from the Shared Security.

 

•                                          No obligation on a Senior Secured Creditor toshare proceeds received from the enforcement of the Non-SharedSecurity/existing guarantees.

 

•                                          Recoveries from enforcement over securedIntercompany Loans will be treated on a *paripassu* basis between Secured Senior Creditors having Shared Securitynotwithstanding that if taken by way of a French law security (*Loi Dailly*) assignment this can onlysecure the direct borrowing obligations of the Company and cannot secure its’obligations as guarantor.

 

•                                          For the purposes of the Security SharingAgreement, set-off against deposits shall be dealt with in the same way as ifShared/non-Shared Security, as the case may be.

 

•                                          General principle of loss-sharing in respectof Shared Security as per the SCA.

 

•                                          The loss-sharing provisions in respect ofShared Security only shall also be for the benefit of the USPP Noteholders.

 

----

 

15.                                 **Security Agent:** Customary provisions for the appointment of Security Agent and standardindemnity and other protections to be included.

 

16.                                 **Co-operation between SeniorSecured Creditors:**  Customary provisions concerning notificationof default, termination events, prepayment events, notification of amount ofSecured Debt under each Facility and authorisation by the Company for SeniorSecured Creditors to disclose information to each other.

 

17.                                 **Transfers:** Customary provisions to ensure that any transferee from a Secured SeniorCreditor accedes to and is bound by the Security Sharing Agreement.

 

18.                                 **Several obligations:**  Theobligations of each Senior Secured Creditor are several and no liability forthe obligations of any other Senior Secured Creditor; failure by one SeniorSecured Creditor to perform not affect rights/obligations of any other person.

 

19.                                 **Amendments/waivers:** Appropriate quorum for amendments/waivers to Security SharingAgreement/release of security to be agreed. Certain amendments (to be agreed)to be subject to the approval of the Required Holders (as defined in the USPP)

 

20.                                 **Governing law andJurisdiction:**  English law by way of deed. Jurisdictionclause to track SCA.

 
| **Affected Facilities (as per  Schedule 3 of the SCA)** |   | **Pre-term  date(11)  Exposure secured by shared  security**                                                                                                                                                                                                                                                                         |   | **Post-term  date  Exposure  secured by  shared security**                                                                                                                                                                                                                                       |   | **Pre-term  date  Non-shared security**                                                                                                                                                 |   | **Post-term  date  Non-shared security**                                                                                                                                                                                          |
|---------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                    |   |                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                    |   |                                                                                                                                                                                                                              |
| Committed Bank lines/Refinancing Facilities Agreement   |   | 100% of Exposure as set  out in Schedule 3 of SCA                                                                                                                                                                                                                                                                                    |   | As under the Refinancing  Facilities Agreement                                                                                                                                                                                                                                                   |   | Existing Security, if any,  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement                                                                                        |   | Existing security, if any,  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement where  not refinanced under the Refinancing Facilities Agreement                                                                 |
| Uncommitted Facilities including Overdraft Facilities   |   | 100% of Exposure as set  out in Schedule 3 of SCA as reduced in accordance with the SCA                                                                                                                                                                                                                                              |   | 100% of Exposure at Term  Date, not to exceed 100% of Exposure as set out in Schedule 3 of SCA as  reduced in accordance with the SCA                                                                                                                                                            |   | Existing security, if any,  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement                                                                                        |   | Existing security, if any,  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement                                                                                                                                  |
| Leases                                                  |   | 80% of Exposure as set out  in Schedule 3 of SCA (to include equity/recourse obligations) [as reduced in  accordance with the SCA]                                                                                                                                                                                                   |   | 80% of Exposure as set out  in Schedule 3 of SCA as reduced in accordance with the SCA(12) [and after  taking into account permitted lease payments during SCA]                                                                                                                                  |   | Existing security as per  Part 1 of Schedule 4 of SCA under relevant Facility Agreement and where  applicable 5% Lessor Reduction in accordance with Agreed Lease Agreement  Principles |   | Existing security as per  Part 1 of SCA under relevant Facility Agreement and where applicable 5%  Lessor Reduction on Term Date                                                                                                  |
| Letters of credit/banking guarantees                    |   | 30% of Exposure as set out  in Schedule 3 of SCA and 100% of that Exposure in respect of a claim made by  a Lender following a payment under that letter of credit or guarantee by that  Lender (except in respect of a payment under an “extend or pay” letter of  creditor or guarantee made at the time of its maturity |   | 30% of Exposure as set out  in Schedule 3 of SCA except for letters of credit/banking guarantees (i)  maturing post-Term Date to be negotiated on a bilateral basis upwards or  downwards on or around the maturity date or (ii) counter-indemnified under  the Refinancing Facilities Agreement |   | Existing security as per  Part 1 of Schedule 4 of SCA under relevant Facility Agreement                                                                                                 |   | Existing security as per  Part 1 of Schedule 4 of SCA under relevant Facility Agreement and cash  collateral and/or a counter-guarantee under the Refinancing Facilities  Agreement up to a maximum aggregate amount to be agreed |
| Derivative Instruments                                  |   | 100% of its Derivative  Liability up to the maximum Exposure under that Derivative Instrument as set  out in Schedule 3 of SCA                                                                                                                                                                                                       |   | 100% of its Derivative  Liability up to the maximum Exposure under that Derivative Instrument as set  out in Schedule 3 of the SCA                                                                                                                                                               |   | Derivative Deposit as per  the SCA up to a maximum aggregate amount for all Derivative Instruments not  exceeding Euros 40,000,000                                                      |   | Derivative Deposit as per  the SCA up to a maximum aggregate amount for all Derivative Instruments not  exceeding the amount secured at the Term Date                                                                             |

 

 
| **Non-Affected Facilities (as  per Schedule 3 of the SCA)**             |   | **Pre-term  date(11)  Exposure secured by shared  security** |   | **Post-term  date  Exposure  secured by  shared security** |   | **Pre-term  date  Non-shared security** |   | **Post-term  date  Non-shared security** |
|-------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|------------------------------------------------------------|--------|-----------------------------------------|--------|------------------------------------------|
|                                                                    |   |                                                         |   |                                                       |   |                                    |   |                                     |
| High Yield Bonds                                                        |   | None                                                         |   | None                                                       |   | None                                    |   | None                                     |
| USPP                                                                    |   | None                                                         |   | None                                                       |   | None                                    |   |                                     |
| EMTN                                                                    |   | None                                                         |   | None                                                       |   | None                                    |   | None                                     |
| Credit facilities (committed and uncommitted bank lines and overdrafts) |   | None                                                         |   | None                                                       |   | None                                    |   | None                                     |
| Securitisations                                                         |   | None                                                         |   | None                                                       |   | None                                    |   | None                                     |
| Sales of receivables/forfeiting                                         |   | None                                                         |   | None                                                       |   | None                                    |   | None                                     |
| Operating leases                                                        |   | None                                                         |   | None                                                       |   | None                                    |   | None                                     |
| Letters of credit/banking guarantees                                    |   | None                                                         |   | None                                                       |   | None                                    |   | None                                     |
| Forfeiting programmes                                                   |   | None                                                         |   | None                                                       |   | None                                    |   | None                                     |

 

----

(11)                            Dilution percentage Secured Debt to SharedSecurity approximately 91/98%.

 

(12)                            Schedule 3 will be updated to reflect agreedcommercial terms and Exposure as reduced.

 

----

 

**SIGNATORIES**

 
| **The  Company**                                            |
|-------------------------------------------------------------|
|                                                        |
| RHODIA S.A.                                                 |
|                                                        |
| By:                                                         |
|                                                        |
| **Original  Obligors**                                      |
|                                                        |
| RHODIA POLIAMIDA E  ESPECIALIDADES LTDA.                    |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA HENGCHANG  (ZHANGJIAGANG) SPECIALTY CHEMICAL CO. LTD |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA WUXI PHARMACEUTICAL  CO. LTD                         |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA S.A.                                                 |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA JAPAN LTD                                            |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA FOSFATADOS DE MEXICO  S.A. DE CV                     |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA CAPITAL MARKET (ex  RHONE-POULENC (SUISSE) S.A.)     |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA ENGINEERING  PLASTICS Co, Ltd                        |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA INC                                                  |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA ACETOW VENEZUELA  C.A.                               |
|                                                        |
| By:                                                         |
|                                                        |
| RHODIA CHINA CO. LIMITED                                    |
|                                                        |
| By:                                                         |
|                                                        |
| **The  Guarantor**                                          |
|                                                        |
| RHODIA S.A.                                                 |
|                                                        |
| By:                                                         |
|                                                        |
| **Original  Lenders**                                       |
|                                                        |
| BNP PARIBAS                                                 |
|                                                        |
| By:                                                         |
|                                                        |
| CRÉDIT LYONNAIS S.A.                                   |
|                                                        |
| By:                                                         |
|                                                        |
| CRÉDIT INDUSTRIEL ET  COMMERCIAL                       |
|                                                        |
| By:                                                         |
|                                                        |
| BANQUE DE L’ECONOMIE DU  COMMERCE ET DE LA MONETIQUE   |
|                                                        |
| By:                                                         |
|                                                        |
| CSFB                                                        |
|                                                        |
| By:                                                         |
|                                                        |
| WACHOVIA                                                    |
|                                                        |
| By:                                                         |
|                                                        |
| BAYERISCHE LANDESBANK                                       |
|                                                        |
| By:                                                         |
|                                                        |
| SOCIÉTÉ GÉNÉRALE                        |
|                                                        |
| By:                                                         |
|                                                        |
| THE BANK OF  TOKYO-MITSUBISHI, LTD.                         |
|                                                        |
| By:                                                         |
|                                                        |
| FORTIS BANK N.V.                                            |
|                                                        |
| By:                                                         |
|                                                        |
| NATEXIS BANQUES POPULAIRES                                  |
|                                                        |
| By:                                                         |
|                                                        |
| CCF                                                         |
|                                                        |
| By:                                                         |
|                                                        |
| STANDARD CHARTERED BANK                                     |
|                                                        |
| By:                                                         |
|                                                        |
| THE ROYAL BANK OF SCOTLAND  PLC                             |
|                                                        |
| By:                                                         |
|                                                        |
| BANCO BILBAO VIZCAYA  ARGENTARIA                            |
|                                                        |
| By:                                                         |
|                                                        |
| JPMORGAN CHASE BANK                                         |
|                                                        |
| By:                                                         |
|                                                        |
| ING BANK N.V.                                               |
|                                                        |
| By:                                                         |
|                                                        |
| UNICREDITO ITALIANO                                         |
|                                                        |
| By:                                                         |
|                                                        |
| UFJ NEDERLAND N.V.                                          |
|                                                        |
| By:                                                         |
|                                                        |
| UFJ BANK LIMITED                                            |
|                                                        |
| By:                                                         |
|                                                        |
| CITIBANK INTERNATIONAL PLC                                  |
|                                                        |
| By:                                                         |
|                                                        |
| LANDES GIROZENTRALE                                         |
|                                                        |
| By:                                                         |
|                                                        |
| COMERICA                                                    |
|                                                        |
| By:                                                         |
|                                                        |
| **Intercreditor  Agent**                                    |
|                                                        |
| BNP PARIBAS                                                 |
|                                                        |
| By:                                                         |
|                                                        |
| **Agents  under Affected Facilities**                       |
|                                                        |
| BNP PARIBAS                                                 |
|                                                        |
| By:                                                         |

 

----