EXHIBIT 10.2


 


Execution
Copy


 


US
GUARANTY


 


This US GUARANTY (this “US Guaranty”), dated as
of January    , 2005, by and among the Guarantors
identified as such on the signature page hereof (each, a “Guarantor” and
collectively, “Guarantors”), and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation, individually and as agent (in such
capacity, “US Agent”) for itself and the US Lenders and the Collateral
Agent (as such terms are defined in the Credit Agreement hereinafter defined)
from time to time signatory to the Credit Agreement.


 


W
I T N E S S E T H:


 


WHEREAS, pursuant to that certain Credit Agreement
dated as of the date hereof by and among RESOLUTION PERFORMANCE PRODUCTS INC., a Delaware corporation (“Holdings”),
RESOLUTION PERFORMANCE PRODUCTS LLC, a Delaware limited liability company (“RPP
USA”, and together with any other Credit Party (as defined below) that is
approved by the US Lenders to be a US Borrower thereunder, each, individually,
a “US Borrower” and, collectively and jointly and severally, the “US
Borrowers”), RESOLUTION
EUROPE B.V, a company organized under the laws of The Netherlands (“Netherlands Op. Co.”, and together with any other Credit Party
(as defined below) that is approved by the Netherlands Lenders to be a
Netherlands Borrower thereunder, each, individually, a “Netherlands Borrower” and, collectively and jointly and
severally, the “Netherlands
Borrowers”
and together with the US Borrowers, each, individually, a “Borrower” and, collectively (but not jointly and
severally), the “Borrowers”), the other
persons designated as “Credit Parties” on the signature pages thereof,
the US Lenders, GENERAL
ELECTRIC CAPITAL CORPORATION, as US Agent, US L/C Issuer and as collateral
agent (in such capacity, “Collateral
Agent”), the
Netherlands Lenders, and GE LEVERAGED LOANS LIMITED, as Netherlands Agent,
Netherlands L/C Issuer and Netherlands Security Trustee
(as from time to time amended, restated, supplemented or otherwise modified,
the “Credit Agreement”), Lenders have agreed to make Loans to, and incur
Letter of Credit Obligations for the benefit of, Borrowers;


 


WHEREAS, Guarantors are, in the case of Holdings, the
parent corporation of RPP USA and a Credit Party, and in the case of all other
Guarantors, Domestic Subsidiaries of a US Borrower and Credit Parties, and as
such will derive direct and indirect economic benefits from the making of the
Loans and other financial accommodations provided to US Borrowers pursuant to
the Credit Agreement; and


 


WHEREAS, in order to induce US Agent and US Lenders to
enter into the Credit Agreement and other Loan Documents and to induce US
Lenders to make the US Revolving Credit Advances and US Swing Line Advances
(collectively, “US Loans”) and to incur US Letter of Credit Obligations
as provided for in the Credit Agreement, Guarantors have agreed to guarantee
payment of the US Obligations;


 





















 


NOW, THEREFORE, in consideration of the premises and
the covenants hereinafter contained, and to induce US Lenders to provide the US
Loans and other financial accommodations under the Credit Agreement, it is
agreed as follows:


 


1.                                       DEFINITIONS.


 


Capitalized terms used herein shall have the meanings
assigned to them in the Credit Agreement, unless otherwise defined herein.


 


References to this “US Guaranty” shall mean this US
Guaranty, including all amendments, modifications and supplements and any
annexes, exhibits and schedules to any of the foregoing, and shall refer to
this US Guaranty as the same may be in effect at the time such reference
becomes operative.


 


2.                                       THE GUARANTY.


 


2.1                                 Guaranty
of Guaranteed Obligations of US Borrower. 
Each Guarantor hereby jointly and severally unconditionally guarantees
to US Agent and US Lenders, and their respective successors, endorsees,
transferees and assigns, the prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of the US Obligations of US
Borrowers (hereinafter the “Guaranteed Obligations”).  Guarantors agree that this US Guaranty is a
guaranty of payment and performance and not of collection, and that their
obligations under this US Guaranty shall be primary, absolute and
unconditional, irrespective of, and unaffected by:


 


(a)                                  the
genuineness, validity, regularity, enforceability or any future amendment of,
or change in this US Guaranty, any other Loan Document or any other agreement,
document or instrument to which any US Credit Party is or may become a party;


 


(b)                                 the
absence of any action to enforce this US Guaranty or any other Loan Document or
the waiver or consent by US Agent and/or US Lenders with respect to any of the
provisions thereof;


 


(c)                                  the
existence, value or condition of, or failure to perfect its Lien against, any
US Collateral for the Guaranteed Obligations or any action, or the absence of
any action, by US Agent and/or Collateral Agent in respect thereof (including,
without limitation, the release of any such security); or


 


(d)                                 the
insolvency of any US Credit Party; or


 


(e)                                  any
other action or circumstances which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor,


 


it being agreed by each Guarantor that its obligations
under this US Guaranty shall not be discharged until the US Termination
Date.  Each Guarantor shall be regarded,
and shall be in the same position, as principal debtor with respect to the
Guaranteed Obligations.  Each Guarantor
agrees that any notice or directive given at any time to US Agent which is
inconsistent with the waiver in the immediately preceding sentence shall be
null and void and may be ignored by US


 


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Agent and US Lenders, and, in addition, may not be
pleaded or introduced as evidence in any litigation relating to this US
Guaranty for the reason that such pleading or introduction would be at variance
with the written terms of this US Guaranty, unless US Agent and US Lenders have
specifically agreed otherwise in writing. 
It is agreed among each Guarantor, US Agent and US Lenders that the
foregoing waivers are of the essence of the transaction contemplated by the
Loan Documents and that, but for this US Guaranty and such waivers, US Agent
and US Lenders would decline to enter into the Credit Agreement.


 


2.2                                 Demand
by US Agent or US Lenders.  In
addition to the terms of the US Guaranty set forth in Section 2.1
hereof, and in no manner imposing any limitation on such terms, it is expressly
understood and agreed that, if, at any time, the outstanding principal amount
of the Guaranteed Obligations under the Credit Agreement (including all accrued
interest thereon) is declared to be or shall become immediately due and
payable, then Guarantors shall, without demand, pay to the holders of the
Guaranteed Obligations the entire outstanding Guaranteed Obligations due and
owing to such holders.  Payment by
Guarantors shall be made to US Agent in immediately available funds to an
account designated by US Agent or at the address set forth herein for the
giving of notice to US Agent or at any other address that may be specified in
writing from time to time by US Agent, and shall be credited and applied to the
Guaranteed Obligations.


 


2.3                                 Enforcement
of US Guaranty.  In no event shall US
Agent or Collateral Agent have any obligation (although it is entitled, at its
option) to proceed against any Borrower or any other US Credit Party or any US
Collateral pledged to secure Guaranteed Obligations before seeking satisfaction
from any or all of the Guarantors, and US Agent or Collateral Agent may
proceed, prior or subsequent to, or simultaneously with, the enforcement of US
Agent’s or Collateral Agent’s rights hereunder, to exercise any right or remedy
which it may have against any US Collateral, as a result of any Lien it may
have as security for all or any portion of the Guaranteed Obligations.


 


2.4                                 Waiver.  In addition to the waivers contained in Section 2.1
hereof, Guarantors waive, and agree that they shall not at any time insist
upon, plead or in any manner whatever claim or take the benefit or advantage
of, any appraisal, valuation, stay, extension, marshaling of assets or redemption
laws, or exemption, whether now or at any time hereafter in force, which may
delay, prevent or otherwise affect the performance by Guarantors of their
Guaranteed Obligations under, or the enforcement by US Agent, Collateral Agent
or US Lenders of, this US Guaranty. Guarantors hereby waive diligence,
presentment and demand (whether for non-payment or protest or of acceptance,
maturity, extension of time, change in nature or form of the Guaranteed
Obligations, acceptance of further security, release of further security,
composition or agreement arrived at as to the amount of, or the terms of, the
Guaranteed Obligations, notice of adverse change in any US Borrower’s financial
condition or any other fact which might increase the risk to Guarantors) with respect
to any of the Guaranteed Obligations or all other demands whatsoever and waive
the benefit of all provisions of law which are or might be in conflict with the
terms of this US Guaranty.  Guarantors
represent, warrant and jointly and severally agree that, as of the date of this
US Guaranty, their obligations under this US Guaranty are not subject to any
offsets or defenses against US Agent, Collateral Agent or US Lenders or any US
Credit Party of any kind.  Guarantors
further jointly and severally agree that their obligations under this US
Guaranty shall not be subject to any counterclaims, offsets or


 


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defenses against US Agent or any US Lender or against
any US Credit Party of any kind which may arise in the future.


 


2.5                                 Benefit
of US Guaranty.  The provisions of
this US Guaranty are for the benefit of US Agent and US Lenders and their
respective successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between any US Credit Party and US Agent, Collateral
Agent or US Lenders, the obligations of any US Credit Party under the Loan
Documents.  In the event all or any part
of the Guaranteed Obligations are transferred, indorsed or assigned by US
Agent, Collateral Agent or any US Lender to any Person or Persons, any
reference to “US Agent”, “Collateral Agent” or “US Lender” herein shall be
deemed to refer equally to such Person or Persons.


 


2.6                                 Modification
of Guaranteed Obligations, Etc.  Each
Guarantor hereby acknowledges and agrees that US Agent, Collateral Agent and US
Lenders may at any time or from time to time, with or without the consent of,
or notice to, Guarantors or any of them:


 


(a)                                  change
or extend the manner, place or terms of payment of, or renew or alter all or
any portion of, the Guaranteed Obligations;


 


(b)                                 take
any action under or in respect of the Loan Documents in the exercise of any
remedy, power or privilege contained therein or available to it at law, equity
or otherwise, or waive or refrain from exercising any such remedies, powers or
privileges;


 


(c)                                  amend
or modify, in any manner whatsoever, the Loan Documents;


 


(d)                                 extend
or waive the time for any US Credit Party’s performance of, or compliance with,
any term, covenant or agreement on its part to be performed or observed under
the Loan Documents, or waive such performance or compliance or consent to a
failure of, or departure from, such performance or compliance;


 


(e)                                  take
and hold US Collateral for the payment of the Guaranteed Obligations guaranteed
hereby or sell, exchange, release, dispose of, or otherwise deal with, any
property pledged, mortgaged or conveyed, or in which US Agent, Collateral Agent
or US Lenders have been granted a Lien, to secure any Guaranteed Obligations;


 


(f)                                    release
anyone who may be liable in any manner for the payment of any amounts owed by
any US Credit Party to US Agent, Collateral Agent or any US Lender;


 


(g)                                 modify
or terminate the terms of any intercreditor or subordination agreement pursuant
to which claims of other creditors of any US Credit Party are subordinated to
the claims of US Agent, Collateral Agent and US Lenders; and/or


 


(h)                                 apply
any sums by whomever paid or however realized to any amounts owing by any
Credit Party to US Agent, Collateral Agent or any US Lender in such manner as
US Agent or any US Lender shall determine in its discretion;


 


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and US Agent, Collateral Agent and US Lenders shall
not incur any liability to Guarantors as a result thereof, and no such action
shall impair or release the Guaranteed Obligations of Guarantors or any of them
under this US Guaranty.


 


2.7                                 Reinstatement.  This US Guaranty shall remain in full force
and effect and continue to be effective should any petition be filed by or against
any US Credit Party or any Guarantor for liquidation or reorganization, should
any US Credit Party or any Guarantor become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all
or any significant part of such US Credit Party’s or such Guarantor’s assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Guaranteed Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by US Agent, Collateral Agent or any US
Lender, whether as a “voidable preference”, “fraudulent conveyance”, or
otherwise, all as though such payment or performance had not been made.  In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Guaranteed
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.


 


2.8                                 Waiver
of Subrogation, Etc.  Notwithstanding
anything to the contrary in this US Guaranty, or in any other Loan
Document,  each Guarantor hereby:


 


(a)                                  expressly
and irrevocably waives, on behalf of itself and its successors and assigns
(including any surety), any and all rights at law or in equity to subrogation,
to reimbursement, to exoneration, to contribution, to indemnification, to set
off or to any other rights that could accrue to a surety against a principal,
to a guarantor against a principal, to a guarantor against a maker or obligor,
to an accommodation party against the party accommodated, to a holder or
transferee against a maker, or to the holder of any claim against any Person,
and which such Guarantor may have or hereafter acquire against any US Credit
Party in connection with or as a result of such Guarantor’s execution, delivery
and/or performance of this US Guaranty, or any other documents to which such
Guarantor is a party or otherwise; and


 


(b)                                 acknowledges
and agrees (i) that this waiver is intended to benefit US Agent and US Lenders
and shall not limit or otherwise effect any Guarantor’s liability hereunder or
the enforceability of this US Guaranty, and (ii) that US Agent, Collateral
Agent, US Lenders and their respective successors and assigns are intended
third party beneficiaries of the waivers and agreements set forth in this Section 2.8
and their rights under this Section 2.8 shall survive payment in
full of the Guaranteed Obligations.


 


2.9                                 Election
of Remedies.  If US Agent and/or Collateral
Agent may, under applicable law, proceed to realize benefits under any of the
Loan Documents giving US Agent, Collateral Agent and US Lenders a Lien upon any
US Collateral owned by any US Credit Party, either by judicial foreclosure or
by non-judicial sale or enforcement, US Agent or Collateral Agent may, at its
sole option, determine which of such remedies or rights it may pursue without
affecting any of such rights and remedies under this US Guaranty.  If, in the exercise of any of its rights and remedies,
US Agent or Collateral Agent shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any US Credit Party,
whether because


 


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of any applicable laws pertaining to “election of
remedies” or the like, Guarantors hereby consent to such action by US Agent or
Collateral Agent and waive any claim based upon such action, even if such
action by US Agent or Collateral Agent shall result in a full or partial loss
of any rights of subrogation which Guarantors might otherwise have had but for
such action by US Agent or Collateral Agent. 
Any election of remedies which results in the denial or impairment of
the right of US Agent or Collateral Agent to seek a deficiency judgment against
any Credit Party shall not impair each Guarantor’s obligation to pay the full
amount of the Guaranteed Obligations.  In
the event US Agent shall bid at any foreclosure or trustee’s sale or at any
private sale permitted by law or the Loan Documents, US Agent or Collateral
Agent may bid all or less than the amount of the Guaranteed Obligations and the
amount of such bid need not be paid by US Agent or Collateral Agent but shall
be credited against the Guaranteed Obligations. 
The amount of the successful bid at any such sale shall be conclusively
deemed to be the fair market value of the collateral and the difference between
such bid amount and the remaining balance of the Guaranteed Obligations shall
be conclusively deemed to be the amount of the Guaranteed Obligations
guaranteed under this US Guaranty, notwithstanding that any present or future
law or court decision or ruling may have the effect of reducing the amount of
any deficiency claim to which US Agent or Collateral Agent and US Lenders might
otherwise be entitled but for such bidding at any such sale.


 


2.10                           Funds
Transfers.  If any Guarantor shall
engage in any transaction as a result of which any Borrower is required to make
a mandatory prepayment with respect to the Guaranteed Obligations under the
terms of the Credit Agreement (including any issuance or sale of such Guarantor’s
Stock or any sale of its assets), such Guarantor shall distribute to, or make a
contribution to the capital of, one or more of the Borrowers an amount equal to
the mandatory prepayment required under the terms of the Credit Agreement.


 


3.                                       DELIVERIES.


 


In a form reasonably satisfactory to US Agent,
Guarantors shall deliver to US Agent (with sufficient copies for each US
Lender), concurrently with the execution of this US Guaranty and the Credit
Agreement, the Loan Documents and other instruments, certificates and documents
as are required to be delivered by Guarantors to US Agent under the Credit
Agreement.


 


4.                                       OMITTED.


 


5.                                       FURTHER
ASSURANCES.


 


Each Guarantor agrees, upon the written request of US
Agent, Collateral Agent or any US Lender, to execute and deliver to US Agent,
Collateral Agent or such US Lender, from time to time, any additional
instruments or documents reasonably considered necessary by US Agent or such US
Lender to cause this US Guaranty to be, become or remain valid and effective in
accordance with its terms.


 


6.                                       PAYMENTS
FREE AND CLEAR OF TAXES.


 


All payments required to be made by each Guarantor
hereunder shall be made to US Agent, Collateral Agent and US Lenders free and
clear of, and without deduction for, any


 


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and all present and future Taxes.  If any Guarantor shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder, (a) the sum
payable shall be increased as much as shall be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 6) US Agent, Collateral Agent or US
Lenders, as applicable, receive an amount equal to the sum they would have
received had no such deductions been made, (b) such Guarantor shall make such
deductions, and (c) such Guarantor shall pay the full amount deducted to the
relevant taxing or other authority in accordance with Applicable Law.  Within thirty (30) days after the date of any
payment of Taxes, each applicable Guarantor shall furnish to US Agent the
original or a certified copy of a receipt evidencing payment thereof. Each
Guarantor shall jointly and severally indemnify and, within ten (10) days of
demand therefor, pay US Agent, Collateral Agent and each US Lender for the full
amount of Taxes (including any Taxes imposed by any jurisdiction on amounts
payable under this Section 6) paid by US Agent, Collateral Agent or
such US Lender, as appropriate, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or
not such Taxes were correctly or legally asserted.  Notwithstanding the foregoing, in no event
shall US Agent, Collateral Agent or any US Lender be entitled to receive a
gross-up amount in excess of that amount to which it would be entitled under
the Credit Agreement with respect to the Guaranteed Obligations.


 


7.                                       OTHER
TERMS.


 


7.1                                 Entire
Agreement.  This US Guaranty,
together with the other Loan Documents, constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements relating to a guaranty of the loans and advances under the
Loan Documents and/or the Guaranteed Obligations.


 


7.2                                 Headings.  The headings in this US Guaranty are for
convenience of reference only and are not part of the substance of this US
Guaranty.


 


7.3                                 Severability.  Whenever possible, each provision of this US
Guaranty shall be interpreted in such a manner to be effective and valid under
Applicable Law, but if any provision of this US Guaranty shall be prohibited by
or invalid under Applicable Law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this US Guaranty.


 


7.4                                 Notices.  Whenever it is provided herein that any
notice, demand, request, consent, approval, declaration or other communication
shall or may be given to or served upon any of the parties by any other party,
or whenever any of the parties desires to give or serve upon another any such
communication with respect to this US Guaranty, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be addressed to the party to be notified as follows:


 


(a)                                  If
to US Agent, at:


 


GENERAL
ELECTRIC CAPITAL CORPORATION


335 Madison Avenue


 


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New York, New York 10017


ATTN:  RPP Account Officer


Fax:  (212) 370-8767


 


With a copy
to:


 


GENERAL ELECTRIC CAPITAL CORPORATION


201 Merritt 7


Norwalk, Connecticut  06851


ATTN:  Corporate Counsel


Global Sponsor Finance


Fax:  (203) 956-4216


 


(b)                                 If
to any US Lender, at the address of such US Lender specified in the Credit
Agreement.


 


(c)                                  If
to any Guarantor, at the address of such Guarantor specified on Schedule I
hereto.


 


or at such other address as may be substituted by notice given as
herein provided.  The giving of any
notice required hereunder may be waived in writing by the party entitled to
receive such notice.  Every notice,
demand, request, consent, approval, declaration or other communication
hereunder shall be deemed to have been validly served, given or delivered (i)
upon the earlier of actual receipt and three (3) Business Days after the same
shall have been deposited with the United States mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (ii) upon transmission,
when sent by telecopy or other similar facsimile transmission (with such
telecopy or facsimile promptly confirmed by delivery of a copy by personal
delivery or United States mail as otherwise provided in this Section 7.4),
(iii) one (1) Business Day after deposit with a reputable overnight carrier
with all charges prepaid, or (iv) when delivered, if hand-delivered by
messenger.


 


7.5                                 Successors
and Assigns.  This US Guaranty and
all obligations of Guarantors hereunder shall be binding upon the successors
and assigns of each Guarantor (including a debtor-in-possession on behalf of
such Guarantor) and shall, together with the rights and remedies of US Agent,
for itself and for the benefit of US Lenders, hereunder, inure to the benefit
of US Agent and US Lenders, all future holders of any instrument evidencing any
of the US Obligations and their respective successors and assigns.  No sales of participations, other sales,
assignments, transfers or other dispositions of any agreement governing or
instrument evidencing the US Obligations or any portion thereof or interest
therein shall in any manner affect the rights of US Agent and US Lenders
hereunder.  Guarantors may not assign,
sell, hypothecate or otherwise transfer any interest in or obligation under
this US Guaranty.


 


7.6                                 No
Waiver; Cumulative Remedies; Amendments. 
Neither US Agent, Collateral Agent nor any US Lender shall by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
US Agent and then only to the extent therein set forth.  A waiver by US Agent or Collateral Agent, for
itself and the ratable benefit of US Lenders, of any right or remedy


 


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hereunder on any one occasion shall not be construed
as a bar to any right or remedy which US Agent or Collateral Agent would
otherwise have had on any future occasion. 
No failure to exercise nor any delay in exercising on the part of US
Agent, Collateral Agent or any US Lender, any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
future exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies
hereunder provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law.  None of the terms or provisions of this US
Guaranty may be waived, altered, modified, supplemented or amended except by an
instrument in writing, duly executed by US Agent and Guarantors.


 


7.7                                 Termination.  This US Guaranty is a continuing guaranty and
shall remain in full force and effect until the US Termination Date.  Upon payment and performance in full of the
Guaranteed Obligations, US Agent shall deliver to Guarantors such documents as
Guarantors may reasonably request to evidence such termination.


 


7.8                                 Counterparts.  This US Guaranty may be executed in any
number of counterparts, each of which shall collectively and separately
constitute one and the same agreement.


 


7.9                                 Limitation
on Guaranteed Obligations. 
Notwithstanding any provision herein contained to the contrary, each
Guarantor’s liability hereunder shall be limited to an amount not to exceed as
of any date of determination the greater of:


 


(a)                                  the
net amount of all US Loans and other extensions of credit (including US Letters
of Credit) advanced under the Credit Agreement and directly or indirectly
re-loaned or otherwise transferred to, or incurred for the benefit of, such
Guarantor, plus interest thereon at the applicable rate specified in the Credit
Agreement; and


 


(b)                                 the
amount which could be claimed by the US Agent, Collateral Agent and US Lenders
from such Guarantor under this US Guaranty without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law after taking into
account, among other things, such Guarantor’s right of contribution and
indemnification from each other Guarantor under Section 7.10.


 


7.10                           Contribution
with Respect to Guaranteed Obligations.


 


(a)                                  To
the extent that any Guarantor shall make a payment under this US Guaranty of
all or any of the Guaranteed Obligations (a “Guarantor Payment”) which,
taking into account all other Guarantor Payments then previously or
concurrently made by the other Guarantors, exceeds the amount which such
Guarantor would otherwise have paid if each Guarantor had paid the aggregate
Guaranteed Obligations satisfied by such Guarantor Payment in the same
proportion that such Guarantor’s “Allocable Amount” (as defined below) (as
determined immediately prior to such Guarantor Payment) bore to the aggregate
Allocable Amounts of all of Guarantors as determined immediately prior to the
making of such Guarantor Payment, then, following payment in full in
cash of the


 


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Guaranteed
Obligations and termination of the US Commitments, such Guarantor shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each of the other Guarantors for the amount of such excess, pro
rata based upon their respective Allocable Amounts in effect immediately
prior to such Guarantor Payment.


 


(b)                                 As
of any date of determination, the “Allocable Amount” of any Guarantor
shall be equal to the maximum amount of the claim which could then be recovered
from such Guarantor under this US Guaranty without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.


 


(c)                                  This
Section 7.10 is intended only to define the relative rights of
Guarantors and nothing set forth in this Section 7.10 is intended
to or shall impair the obligations of Guarantors, jointly and severally, to pay
any amounts as and when the same shall become due and payable in accordance
with the terms of this US Guaranty.


 


(d)                                 The
rights of the parties under this Section 7.10 shall be exercisable
upon the full payment in cash of the US Obligations
and the termination of the US
Commitments and US Letters of Credit.


 


(e)                                  The
parties hereto acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets of any Guarantor to which such contribution
and indemnification is owing.


 


8.                                       SECURITY.


 


To secure payment of each Guarantor’s obligations
under this US Guaranty, concurrently with the execution of this US Guaranty,
each Guarantor has entered into a Security Agreement pursuant to which each
Guarantor has granted to Collateral Agent for the benefit of US Lenders a
security interest in substantially all of its personal property and has entered
into a Pledge Agreement pursuant to which each Guarantor has pledged all of the
Stock of each of its Domestic Subsidiaries to Collateral Agent for the benefit
of US Lenders.


 


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IN WITNESS WHEREOF, the parties hereto have executed
and delivered this US Guaranty as of the date first above written.


 


	
   

  	
  RESOLUTION PERFORMANCE PRODUCTS INC., as a

  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Thomas Bausch

  	
   

  
	
   

  	
  Title: 
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RPP CAPITAL CORPORATION, as a Guarantor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Bausch

  	
   

  
	
   

  	
  Title: 
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION, as

  US Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly A. Massa

  	
   

  
	
   

  	
  Title: 
  Duly Authorized Signatory

  	
   

  
						



 


[Signature
Page to US Guaranty]


 





















 


SCHEDULE I


 


Resolution Performance Products Inc.


RPP Capital Corporation


 


 


c/o Resolution Performance Products LLC


1600 Smith Street, 24th Floor


Houston, Texas  77002


ATTN:  Chief Financial Officer
and


Global Treasurer


Fax:  817-375-2305


 


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