EXHIBIT 10.2

                                                             CONFORMED COPY






                             DEFINITIONS AGREEMENT



                                  between



                  EQUATE PETROCHEMICAL CO. K.S.C. (CLOSED)
                               as the Company



                   PETROCHEMICAL INDUSTRIES COMPANY K.S.C.
                          UNION CARBIDE CORPORATION
                               as the Sponsors



                        NATIONAL BANK OF KUWAIT S.A.K.
          as Intercreditor Agent and Project Assets Security Trustee 



                                     and



                       CITICORP TRUSTEE COMPANY LIMITED
                               as Debt Trustee
















                               Clifford Chance 
                                   London


                                    CONTENTS


Clause                                                             Page No.

1.     Definitions......................................................  1

2.     Amendments.......................................................  1

3.     Succession.......................................................  1

4.     Determination of whether UCC has become an Expropriated Sponsor..  1

5.     Governing Law....................................................  3

6.     Jurisdiction.....................................................  3

Schedule:   Section 1: Defined Terms
            Section 2: Rules of Construction and Interpretation


THIS AGREEMENT is made on 15 day of September 1996

BETWEEN:

(1)   EQUATE PETROCHEMICAL CO. K.S.C. (CLOSED) (the "Company");

(2)   PETROCHEMICAL INDUSTRIES COMPANY K.S.C. ("PIC");

(3)   UNION CARBIDE CORPORATION ("UCC");

(4)   NATIONAL BANK OF KUWAIT S.A.K. (in its capacity as intercreditor agent 
under the Common Terms Agreement, as defined in the Schedule hereto the 
"Intercreditor Agent" and in its capacity as project assets security 
trustee under the Security Trust Agreement, as defined in the Schedule 
hereto, the "Project Assets Security Trustee"); and

(5)   CITICORP TRUSTEE COMPANY LIMITED (in its capacity as debt trustee under 
the Security Trust Agreement, as defined in the Schedule hereto, the 
"Debt Trustee").


NOW IT IS HEREBY AGREED as follows:

1.    Definitions

      Unless otherwise expressly defined or construed therein, each of the 
defined terms and rules of construction and interpretation set out in 
the Schedule hereto shall apply in relation to each Finance Document (as 
defined in the Schedule hereto) in which such defined terms and rules of 
construction and interpretation appear.

2.    Amendments

2.1   The Intercreditor Agent and the Trustees may, in accordance with the 
relevant provisions of the Common Terms Agreement, agree with the 
Company and the Sponsors any amendment to any of the defined terms and 
rules of construction and interpretation set out in the Schedule.

2.2   All amendments to the provisions of this Agreement and the Schedule 
shall be in writing, signed by the Intercreditor Agent, the Trustees, 
the Company and the Sponsors.

3.    Succession

3.1   This Agreement shall enure to the benefit of, and be binding upon, the 
parties hereto and each of their respective successors, transferees and 
assigns.

4.    Determination of whether UCC has become an Expropriated Sponsor

4.1   UCC shall promptly after becoming aware of the same notify the 
Intercreditor Agent (or, after the occurrence of an Event of Default 
which has not been waived by the Majority Term Banks or remedied, the 
Debt Trustee) of any facts or circumstances which could result in UCC 
becoming an Expropriated Sponsor.  If UCC is of the view that it has 
become an Expropriated Sponsor it shall notify the Intercreditor Agent 
(or, after the occurrence of an Event of Default which has not been 
waived by the Majority Term Banks or remedied, the Debt Trustee) and if 
the Intercreditor Agent (or, as the case may be, the Debt Trustee), 
after consultation with the Term Banks, agrees in writing with UCC's 
view then UCC shall be an Expropriated Sponsor for all purposes of the 
Finance Documents.  If the Intercreditor Agent (or, as the case may be, 
the Debt Trustee), does not agree with UCC's view at the end of the 
period of 15 days following the notification in the preceding sentence 
then the matter shall be referred to arbitration and determined in 
accordance with Clause 4.2.

4.2   (a)   Arbitration of Disputes as to whether UCC has become an 
Expropriated Sponsor

            Any disagreement, dispute or controversy relating to whether UCC 
has become an Expropriated Sponsor shall be settled exclusively 
and finally by arbitration.  

      (b)   Arbitration Rules

            Except as set forth otherwise herein, the arbitration shall be 
conducted in accordance with UNCITRAL Arbitration Rules as in 
effect at the effective date of this Agreement, and such 
arbitration shall be administered by the London Court of 
International Arbitration ("LCIA").

      (c)   Situs and language

            The place of the arbitration shall be London, England and the 
language used for all purposes in connection with the arbitration 
shall be English.

      (d)   Commencement of arbitration

            Either UCC or the Intercreditor Agent (or, after the occurrence of 
an Event of Default which has not been waived by the Majority Term 
Banks or remedied, the Debt Trustee) may initiate the arbitration 
at any time by the service of a notice of arbitration on the other 
party.  The arbitration shall be deemed to commence on the date on 
which the notice of arbitration is received by the relevant 
addressee.

      (e)   Number, appointment and qualifications of the arbitrators

            The arbitration panel ("tribunal") shall consist of three 
arbitrators, one chosen by each of UCC and the Intercreditor Agent 
(or, as the case may be, the Debt Trustee) and the third chosen by 
the two party-appointed arbitrators.  The third arbitrator shall 
act as the presiding arbitrator and shall not be resident in or a 
citizen of Kuwait or the United States of America.  Each party 
shall have ten (10) days from the date of the commencement of the 
arbitration to select its party-appointed arbitrator.  The third 
arbitrator shall be chosen as follows: the party-appointed 
arbitrators shall attempt to agree on the selection of the third 
arbitrator.  If no agreement is reached within ten (10) days after 
the appointment of the two arbitrators, the two party-appointed 
arbitrators shall each exchange a list of three (3) candidates.  
Within ten (10) days thereafter, each party-appointed arbitrator 
shall strike two names from the other's list.  The third 
arbitrator shall be selected from the remaining two names by 
drawing of lots.  If, for any reason, the third arbitrator is not 
chosen within the required time frame, the LCIA shall act as 
appointing authority for such arbitrator.

            The three arbitrators shall be disinterested in the outcome of the 
arbitration, shall not in any way be connected with UCC or the 
Intercreditor Agent (or, as the case may be, the Debt Trustee) and 
each shall be one of the following: 

                  (i)   a present, former or retired officer, underwriter or 
in-house counsel with an insurance company, 
reinsurance company, Lloyd's syndicate, multilateral 
or bilateral agency or other government or quasi-
government agency (including without limitation, OPIC, 
MIGA or any export credit agency) which, as a 
substantial part of its business, underwrites, issues 
or provides political risk insurance or reinsurance; 
or

                  (ii)  a present, former or retired officer or risk manager 
of a company which procures or purchases political 
risk insurance, or an individual presently or formerly 
with such company who as part of his employment 
responsibilities is or was involved in the procurement 
of political risk insurance or the submission or 
handling of claims connected with policies or 
contracts of political risk insurance; or

                  (iii) an active or retired attorney or judge with more than 
five (5) years' experience in the field of insurance 
or reinsurance as a substantial part of his/her 
practice or professional responsibilities; or

                  (iv)  an active or retired attorney or judge with more than 
five (5) years' experience in public international law 
as a substantial part of his/her practice or 
professional responsibilities.

      (f)   Statement of Claim and Defence

            The party initiating the arbitration ("Claimant") shall submit a 
Statement of Claim within thirty (30) working days after its 
submission of the Notice of Arbitration.  The other party 
("Respondent") shall submit a Statement of Defence within twenty 
(20) days after receiving the Statement of Claim.

      (g)   Hearings

            At the request of either party (such request to be made no later 
than ten (10) days after submission of the Statement of Defence), 
the tribunal shall hold hearings for the presentation of evidence 
by witnesses, including expert witnesses, or for oral argument.  
Any such hearing shall be held no later than fifty (50) days after 
the submission of the Respondent's Statement of Defence and the 
tribunal shall take all reasonable measures to ensure that the 
hearing be concluded as expeditiously as possible and, to the 
extent practicable, that the hearing last no longer than ten (10) 
days.

      (h)   Finality of Decision

            Any decision by the majority of the arbitrators shall be final and 
binding upon the parties.  The tribunal shall take all reasonable 
measures to render a final, binding decision within the later of 
(i) ten (10) days after the completion of the hearing, if any, 
referred to in paragraph (g) above or (ii) if no hearing is held, 
twenty (20) days after the submission of the Respondent's 
Statement of Defence.  The parties hereby waive, to the extent 
permitted by law, any rights to appeal or to review such decision 
by any court or tribunal.

      (i)   Costs

            The Company shall reimburse the Intercreditor Agent (or, as the 
case may be, the Debt Trustee) in respect of any costs incurred by 
the Intercreditor Agent (or, as the case may be, the Debt Trustee) 
in connection with such arbitration.

5.    Governing Law

      This Agreement shall be governed by, and construed in accordance with, 
English law.

6.    Jurisdiction

6.1   Subject to Clause 4, each of the Company and the Sponsors irrevocably 
agrees that the courts of England shall have jurisdiction to hear and 
determine any suit, action or proceeding, and to settle any disputes, 
which may arise out of or in connection with this Agreement and, for 
such purposes, irrevocably submits to the jurisdiction of such courts.

6.2   Subject to Clause 4, each of the Company and UCC irrevocably agrees
that the courts of the State of New York and the courts of the United
States of America in New York shall have jurisdiction to hear and determine
any suit, action or proceeding, and to settle any disputes, which may arise
out of or in connection with this Agreement and, for such purposes, 
irrevocably submits to the jurisdiction of such courts.

6.3   Each of the Company and UCC and (in the case of Clause 6.1 only) PIC 
irrevocably waives any objection which it might now or hereafter have to 
the courts referred to in Clauses 6.1 and 6.2 being nominated as the 
forum to hear and determine any suit, action or proceeding, and to 
settle any disputes, which may arise out of or in connection with this 
Agreement and agrees not to claim that any such court is not a 
convenient or appropriate forum.

6.4   Each of the Company and (with respect to proceedings in England only) 
each of the Sponsors agrees that the process by which any suit, action 
or proceeding is begun may be served on it by being delivered (in the 
case of any suit, action or proceeding in England) to Hackwood 
Secretaries Limited of Barrington House, 59-67 Gresham Street, London, 
EC2V 7JA or its principal place of business in England from time to time 
or (in the case of any suit, action or proceeding in New York) to CT 
Corporation System Inc. at 1633 Broadway, New York, N.Y. 10019, USA or 
its principal place of business in New York from time to time.  If the 
appointment of either person identified in this Clause 6.4 ceases to be 
effective the Company, UCC or PIC (as the case may be) shall immediately 
appoint a further person in England or, as the case may be, New York to 
accept service of process on its behalf in England, or as the case may 
be, New York and, failing such appointment within 15 days, the Debt 
Trustee shall be entitled to appoint such person by notice to the 
Company and each of the Sponsors.  Nothing contained herein shall affect 
the right to serve process in any other manner permitted by law.

6.5   The submission to the jurisdiction of the courts referred to in Clauses 
6.1 and 6.2 shall not (and shall not be construed so as to) limit the 
right of the Intercreditor Agent, the Debt Trustee, the Project Assets 
Security Trustee, or any of them to take proceedings against any of the 
Company and either of the Sponsors in any other courts of competent 
jurisdiction nor shall the taking of proceedings in any one or more 
jurisdictions preclude the taking of proceedings in any other 
jurisdiction (whether concurrently or not) if and to the extent 
permitted by applicable law.

6.6   Each of the Company and the Sponsors hereby consents generally in 
respect of any legal action or proceeding arising out of or in 
connection with this Agreement to the giving of any relief or the issue 
of any process in connection with such action or proceeding including, 
without limitation, the making, enforcement or execution against any 
property whatsoever (irrespective of its use or intended use) of any 
order or judgment which may be made or given in such action or 
proceeding.

6.7   To the extent that any of the Company and the Sponsors may in any 
jurisdiction claim for itself or its assets immunity from suit, 
execution, attachment (whether in aid of execution, before judgment or 
otherwise) or other legal process and to the extent that in any such 
jurisdiction there may be attributed to itself or its assets such 
immunity (whether or not claims), each of the Company and the Sponsors 
hereby irrevocably agrees not to claim and herby irrevocably waives such 
immunity to the full extent permitted by the laws of such jurisdiction 
and, in particular, to the intent that in any proceedings taken in New 
York the foregoing waiver of immunity shall have effect under and be 
construed in accordance with the United States Foreign Sovereign 
Immunities Act 1976.
  
6.8   Each party hereto hereby waives any rights that it may have in any 
jurisdiction to trial by jury.


IN WITNESS WHEREOF this Agreement has been duly executed on the date first 
written at the start of the Agreement.



                                  SCHEDULE

                            Common Defined Terms

Section 1 - Defined Terms

"Accounts" means the Disbursement Account, the Collection Accounts, the 
Regional Accounts, the Master Accounts, the Operations Accounts, CERF 1, CERF 
2, the Debt Service Payments Account, the Debt Service Reserve Fund, the 
Distributions Account, the Excess Cash Flow Fund, the Insurance Accounts, the 
Net Swap Receivables Account, the Dinar Petty Cash Account and the 
Polypropylene Operations Account;

"Account Bank" means Citibank, N.A., London branch or such other bank as shall 
be appointed Account Bank from time to time in accordance with Clause 45.2 of 
the Common Terms Agreement;

"Actual EG Sales Volume" in relation to any Relevant EG Period means the 
aggregate volume of EG (in tonnes) sold by the Company by way of True Sale 
during such Relevant EG Period (but excluding all Excluded EG Sales);

"Actual PE Sales Volume" in relation to any Relevant PE Period means the 
aggregate volume of PE (in tonnes) sold by the Company by way of True Sale 
during such Relevant PE Period (but excluding all Excluded PE Sales);

"Actual Lease Drawings" means the aggregate amount by which the Available 
Lease Facility is reduced (otherwise than on cancellation or on its reduction 
to zero on the last day thereof) during the Availability Period, as determined 
under Clause 28 of the Common Terms Agreement;

"Actual Term Loan Drawings" means the aggregate amount of all Drawings under 
the Term Loan Facility on or before the last day of the Availability Period 
(less the aggregate amount of all repayments in accordance with Clause 15 
(Illegality) of the Term Loan Facility Agreement on or before such day (if 
any));

"Actual Tranche A Term Loan Drawings" means the amount of the Actual Term Loan 
Drawings advanced by the Tranche A Term Loan Banks;

"Actual Tranche B Term Loan Drawings" means the amount of the Actual Term Loan 
Drawings advanced by the Tranche B Term Loan Banks;

"Additional Company" means any person who, from time to time, becomes an 
additional party to the Sponsor Support Agreement and an additional party to 
one or more Step-in Documents in accordance with Clause 25 of the Sponsor 
Support Agreement;

"Additional Shareholder Contributions" means payments by Shareholders to the 
Company under Clause 6 of the Sponsor Support Agreement;

"Affiliate" of any company means any subsidiary or holding company, or any 
subsidiary of any holding company, of that company and, with respect to PIC, 
the State of Kuwait (or the government thereof) or any of its Agencies;

"Agency" means in respect of any nation, government or state, any political 
sub-division thereof and any entity exercising executive, legislative, 
judicial, regulatory or administrative functions of any of the foregoing and 
shall include, without limitation, any corporation or company which would be 
an Affiliate of any Agency referred to above if such Agency were a company;

"Agents" means the Intercreditor Agent, the Facility Agent, the Working 
Capital Facility Agent and any  New Agent;

"Agreed Form" in relation to any document means the agreed form thereof as 
initialled by the appropriate parties or their representatives and delivered 
in satisfaction of the condition precedent relating thereto set out in the 
Third Schedule to the Common Terms Agreement;

""A" EG Volume" in relation to any Relevant EG Period means the volume of EG 
(in tonnes) specified for such Relevant EG Period in Column 3 of the Second 
Schedule to the Sales Volume Guarantee;


"A" PE Volume" in relation to any Relevant PE Period means the volume of PE 
(in tonnes) specified for such Relevant PE Period in Column 3 of the First 
Schedule to the Sales Volume Guarantee;

"Alternate Market Consultants" means Chemical Marketing Associates Inc. and 
Petrochemical Consultants International, or, if any of the Sponsors, the 
Company or any member of the Approval Group is not satisfied with the services 
provided by either Alternate Market Consultant or if either of them ceases to 
exist or to be willing to act in such capacity, any replacement approved by 
the Approval Group and the Sponsors and appointed as such by the Intercreditor 
Agent;

"Annual Bank Case" means a project forecast prepared and approved or otherwise 
finalised in accordance with Clause 15 of the Common Terms Agreement;

"Annual Budget" means an operating phase budget prepared and approved or 
otherwise finalised in accordance with Clause 14 of the Common Terms 
Agreement;

"Annual Debt Service Ratio" for any Fiscal Year means the ratio of:

(i)   actual or projected Cash Flow Available for Debt Service for that Fiscal 
Year; to

(ii)  all Debt Service Payments made or projected to be made in that Fiscal 
Year;

"Applicable Margin" means:

(i)   with respect to the Term Facilities, 1_% per annum until the earlier of 
the date upon which either Sponsor is released from its obligations 
under Clauses 2 and 3 of the Completion Guarantee and 30 September 1998, 
and 1_% per annum thereafter; and

(ii)  with respect to the Working Capital Facility, 3/4% per annum;

"Approved Custodian" means the Account Bank and any other person approved as a 
custodian in respect of Permitted Investments by the Approval Group;

"Approval Group" means the Technical Bank, the Modelling Bank, the Insurance 
Bank, the Intercreditor Agent, the Lessor (for so long as it is a Bank) and 
Citibank, N.A. (for so long as it is a Bank) and (if either the Lessor or 
Citibank, N.A., or any successor to it as a member of the Approval Group, 
ceases to be a Bank) such other Bank as the Majority Term Banks and the 
Company may agree;

"Approved FX/LC Facilities" means any letter of credit, foreign exchange or 
guarantee facilities entered into in the ordinary course of the Company's 
business provided:

(i)   that the maximum aggregate amount of such facilities does not exceed 
$100,000,000 (in the case of foreign exchange facilities only, taking 
account for this purpose of the maximum net exposure of the relevant 
counterparty thereunder): 

(ii)  each of the counterparties thereto has executed a CTA Deed of Accession 
and thereby become party to the Common Terms Agreement as a Bank (and 
thereby subject to the restrictions on enforcement and acceleration 
contained therein); and

(iii) such facilities shall be unsecured save for any Permitted Liens in 
respect thereof;

"Approved Hedging Agreement" means any interest rate swap agreement entered 
into by the Company pursuant to an ISDA master agreement substantially in the 
form set out in the Tenth Schedule to the Common Terms Agreement and otherwise 
in accordance with the Hedging Programme in relation to which a Designating 
Instrument has been duly executed and delivered pursuant to Clause 8 of the 
Security Trust Agreement and the counterparty to the Company thereunder has 
executed and delivered to the Intercreditor Agent a CTA Deed of Accession and 
to the Trustees an STA Deed of Accession and thereby become party to the 
Common Terms Agreement and the Security Trust Agreement as a Bank;

"Approved Hedging Counterparty" means Citibank, N.A., The Chase Manhattan Bank 
and JP Morgan & Co. and any other financial institution which is party to an 
Approved Hedging Agreement as counterparty;

"Arrangers" means the persons named as such in the Common Terms Agreement;

"ASC Adjustment Date" means the later to occur of:

(i)   the date falling two years after the first date on which a Sponsor is 
released from its obligations under Clauses 2 and 3 of the Completion 
Guarantee; and

(ii)  the fourth Payment Date after the Commencement Date (or the date that 
would have been the fourth Payment Date after the Commencement Date if 
such Payment Date had not been deferred in accordance with Clause 31 of 
the Common Terms Agreement);

"ASC Availability Period" means the period starting on the first date upon 
which a Sponsor is released from its obligations under Clauses 2 and 3 of the 
Completion Guarantee and ending on the earlier to occur of:

(i)   the first date prior to the ASC Adjustment Date upon which either (a) 
the credit balance on the Debt Service Reserve Fund (net of any amount 
required to discharge any Debt Service Payments to the extent accrued up 
to the Completion Date) or (b) the aggregate amount of all Additional 
Shareholder Contributions actually made reaches $120,000,000; and

(ii)  the first date after the ASC Adjustment Date upon which either (a) the 
credit balance on the Debt Service Reserve Fund is equal to or greater 
than the maximum aggregate amount of Debt Service Payments forecast in 
the current Annual Bank Case to be payable in any subsequent six month 
period or (b) the aggregate amount of Additional Shareholder 
Contributions made after the ASC Adjustment Date reaches the ASC 
Facility Amount;

"ASC Facility Amount" means:

(i)   at all times up to and including the ASC Adjustment Date, $120,000,000; 
and

(ii)  thereafter, an amount equal to the lesser of:

      (a)   the amount by which $120,000,000 exceeds the aggregate amount of 
all Additional Shareholder Contributions made up to and including 
the ASC Adjustment Date; and

      (b)   the amount by which the maximum aggregate amount of Debt Service 
Payments forecast in the current Annual Bank Case to be payable in 
any subsequent six month period after the ASC Adjustment Date 
exceeds the credit balance on the Debt Service Reserve Fund at 
close of business in London on the ASC Adjustment Date;

"Assigned Company Property" in relation to:

(i)   the English Law Security Agreement means all of the right, title and 
interest, present and future, of the Company in and to (a) each Assigned 
London Account, all moneys from time to time to standing to the credit 
thereof and all entitlements to interest and any other rights and 
benefits accruing to or arising in connection therewith, (b) the Sponsor 
Support Agreement, the Feedstock Interruption Agreement, the Sales 
Volume Guarantee, any hedging agreement from time to time entered into 
by the Company and any future Documents governed by English law to which 
it is party, (c) all claims, rights and remedies of the Company 
(including, without limitation, all damages and compensation payable for 
or in respect thereof) arising out of or in connection with a breach of 
or default under or in connection with the Sponsor Support Agreement, 
the Feedstock Interruption Agreement, the Sales Volume Guarantee, any 
hedging agreement from time to time entered into by the Company  and any 
future Documents governed by English law to which it is party, (d) all 
rights of the Company to terminate the Sponsor Support Agreement, the 
Feedstock Interruption Agreement, the Sales Volume Guarantee, any 
hedging agreement from time to time entered into by the Company and any 
future Documents governed by English law to which it is a party and 
otherwise to exercise all rights and remedies thereunder, pursuant 
thereto or in connection therewith and (e) all sums from time to time 
payable to the Company (or EMC on its behalf) in respect of all sales of 
Product;

(ii)  the New York Law Security Agreement means all of the right, title and 
interest, present and future, of the Company in and to (a) the New York 
Accounts, all moneys from time to time to standing to the credit thereof 
and all entitlements to interest and any other rights and benefits 
accruing to or arising in connection therewith, (b) all of the 
agreements listed in Schedule 1 thereto, any bonds issued under the 
Principal Project Documents included therein and any future Documents 
governed by New York law to which it is party, (c) all claims, rights 
and remedies of the Company (including, without limitation, all damages 
and compensation payable for or in respect thereof) arising out of or in 
connection with a breach of or default under or in connection with any 
of the agreements listed in Schedule 1 thereto, any bonds issued under 
the Principal Project Documents included therein and any future 
Documents governed by New York law to which it is party and (d) all 
rights of the Company to terminate any of the agreements listed in 
Schedule 1 thereto, any bonds issued under the Principal Project 
Documents included therein and any future Documents governed by New York 
law to which it is party and otherwise to exercise all rights and 
remedies thereunder, pursuant thereto or in connection therewith;

"Assigned EMC Property" in relation to:

(i)   the English Law Security Agreement means all of the right, title and 
interest, present and future, of EMC in and to (a) each Assigned London 
Account, all monies from time to time standing to the credit thereof and 
all entitlements to interest and any other rights and benefits accruing 
to or arising in connection therewith, (b) the Sponsor Support Agreement 
and any future Documents governed by English law to which it is party, 
(c) all claims, rights and remedies of EMC (including, without 
limitation, all damages and compensation payable for or in respect 
thereof) arising out of or in connection with a breach of or default 
under or in connection with the Sponsor Support Agreement and any future 
Documents governed by English law to which it is party, (d) all rights 
of EMC to terminate the Sponsor Support Agreement and any future 
Documents governed by English law to which it is party and otherwise to 
exercise all rights and remedies thereunder, pursuant thereto or in 
connection therewith and (e) all sums from time to time payable to EMC 
(or to EMC on behalf of the Company) in respect of all sales of Product;

(ii)  the New York Law Security Agreement means all of the right, title and 
interest, present and future, of EMC in and to (a) each New York 
Account, all monies from time to time standing to the credit thereof and 
all entitlements to interest and any other rights and benefits accruing 
to or arising in connection therewith, (b) all of the agreements listed 
in Schedule 1 thereto and any future Documents governed by New York law 
to which it is party, (c) all claims, rights and remedies of EMC 
(including, without limitation, all damages and compensation payable for 
or in respect thereof) arising out of or in connection with a breach of 
or default under or in connection with any of the agreements listed in 
Schedule 1 thereto and any future Documents governed by New York law to 
which it is party and (d) all rights of the EMC to terminate any of the 
agreements listed in Schedule 1 thereto and any future Documents 
governed by New York law to which it is party and otherwise to exercise 
all rights and remedies thereunder, pursuant thereto or in connection 
therewith; 

"Assigned London Accounts" means each of the following:

(i)    the Business Interruption Insurance Account;
(ii)   CERF 1;
(iii)  CERF 2;
(iv)   the Debt Service Payments Account;
(v)    the Debt Service Reserve Fund;
(vi)   the Distributions Account;
(vii)  the Excess Cash Flow Fund;
(viii) the Master Accounts;
(ix)   the Net Swap Receivables Account;
(x)    the Property Damage Insurance Account; and
(xi)   any other account (other than the Polypropylene Operations Account) 
opened in the United Kingdom by the Company or EMC, including any 
Regional Account, any replacement for any of (i)-(x) above and any 
account the credit balance on which constitutes a Permitted Investment;

"Assigned Property" in relation to:

(i)    the English Law Security Assignment means, collectively, the Assigned 
Company Property and the Assigned EMC Property thereunder;

(ii)   the New York Law Security Assignment means, collectively, the Assigned 
Company Property and the Assigned EMC Property thereunder;

"Assignment and Assumption Agreements" means the Assignment and Assumption 
Agreement governed by Kuwaiti law and the Assignment and Assumption Agreement 
governed by New York law, each of even date herewith and made between the 
Sponsors and the Company pursuant to which the Sponsors shall transfer or have 
transferred their rights and obligations under various Project Documents to 
the Company; 

"Availability Period" means:

(i)    with respect to the Term Facilities, the period from the Effective Date 
to the earliest of:

       (a)  30 September 2000;

       (b)  the Plant Completion Date;

       (c)  the date on which  any of  the Plant Completion Tests is failed 
for the fifth time; and

       (d)   the date upon which the Available Term Facilities are first 
reduced to zero;

(ii)   with respect to the Working Capital Facility and provided that the 
Intercreditor Agent shall have notified the other parties to the Common 
Terms Agreement that all conditions precedent have been satisfied under 
Clause 2.7 thereof, the period from 1 January 1997 to the Working 
Capital Maturity Date;

"Available Lease Facility" means $200,000,000 less the aggregate amount paid 
by the Purchaser to the Company under the Sale Agreement and the aggregate of 
the amounts by which the same is reduced under Clause 2.5 of the Common Terms 
Agreement;

"Available Term Facilities" means the Available Term Loan Facility and the 
Available Lease Facility;

"Available Term Loan Facility" means the sum of the Available Tranche A 
Facility and the Available Tranche B Facility;

"Available Tranche A Commitment" in relation to a Term Loan Bank means 
(subject as provided in the Term Loan Facility Agreement) the amount set out 
opposite its name in Part 1 of the First Schedule to the Term Loan Facility 
Agreement less the aggregate amount it has advanced under Tranche A of the 
Term Loan Facility;

"Available Tranche B Commitment" in relation to a Term Loan Bank means 
(subject as provided in the Term Loan Facility Agreement) the amount set 
opposite its name in Part 2 of the First Schedule to the Term Loan Facility 
Agreement less the aggregate amount it has advanced under Tranche B of the 
Term Loan Facility;

"Available Tranche A Facility" means the sum of the Available Tranche A 
Commitments of all the Term Loan Banks;

"Available Tranche B Facility" means the sum of the Available Tranche B 
Commitments of all the Term Loan Banks;

"Available WC Commitment" in relation to a Working Capital Bank at any time 
means, save as otherwise provided in the Working Capital Facility Agreement, 
the amount set out opposite its name in the First Schedule to the Working 
Capital Facility Agreement less its share of the Outstandings under the 
Working Capital Facility at such time Provided that such amount shall not be 
less than zero;

"Available WC Facility" means the sum of the Available WC Commitments of all 
the Working Capital Banks;

"Average EG Price" in relation to any Relevant EG Period means the average 
price per tonne achieved by the Company for sales of EG Principal Products by 
way of True Sale during the last 30 days of such Relevant EG Period (provided 
that at least five percent (5%) of such sales of EG during such Relevant EG 
Period were made during such 30 day period) or, if no such sales (or 
insufficient sales) were made, the immediately prior 30 days of such Relevant 
EG Period provided that at least five percent (5%) of such sales of EG during 
such Relevant EG Period were made during such thirty day period) or, if prices 
still cannot be so determined the average of the prices of EG published during 
such period by the Market Consultant adjusted (where necessary to represent 
the net revenue, before deducting production costs, received or receivable by 
the Company in respect of each tonne of EG sold by the Company at such price) 
so as to:

(i)   deduct the average cost, per tonne, of freight and insurance to the 
Principal Markets (to the extent such costs are not usually borne by the 
purchasers); 

(ii)  reflect credit terms of no longer than thirty days following delivery; 
and

(iii) deduct the average cost per tonne to the Company of sales commissions 
(calculated, in the case of commissions paid to EMC, on the assumption 
that EMC achieved sales of the full Target EG Sales Volume), import and 
export duties and sales taxes and duties,

as determined by the Market Consultant; 

"Average Ex-Works Price" for any type of Product, any market and any period 
means the average price per metric tonne of such type of Product sold into 
such market by the Company but so that the actual price of each delivery shall 
be adjusted (where necessary) so as to:

(i)    reflect credit terms of no longer than thirty days following delivery; 
and

(ii)  reflect the price that would have applied if the purchaser were to bear 
the full cost of freight (by whatever means) and insurance:

"Average PE Price" in relation to any Relevant PE Period means the average 
price per tonne achieved by the Company for sales of PE Principal Products by 
way of True Sale during the last 30 days of such Relevant PE Period (provided 
that at least five percent (5%) of such sales of PE during such Relevant PE 
Period were made during such 30 day period) or, if no such sales (or 
insufficient sales) were made, the immediately prior 30 days of the Relevant 
PE Period (provided that at least five percent (5%) of such sales of PE during 
such Relevant PE Period were made during such 30 day period) or, if prices 
still cannot be so determined, the average of the prices of PE published 
during such period by the Market Consultant adjusted (where necessary to 
represent the net revenue, before deducting production costs, received or 
receivable by the Company in respect of each tonne of PE sold by the Company 
at such price) so as to:

(i)   deduct the average cost, per tonne, of freight and insurance to the 
Principal Markets (to the extent such costs are not usually borne by the 
purchasers); 

(ii)  reflect credit terms of no longer than thirty days following delivery; 
and

(iii) deduct the average cost per tonne to the Company of sales commissions 
(calculated, in the case of commissions paid to EMC, on the assumption 
that EMC achieves sales of the full Target PE Sales Volume), import and 
export duties and sales taxes and duties,

as determined by the Market Consultant;

"Banks" means the Term Loan Banks, the Lessor, the Working Capital Banks and 
any other financial institution which accedes to the Common Terms Agreement as 
a Bank Provided that any Bank which is no longer owed any sum under the 
Facilities and the New Facilities and which has complied with all its 
obligations under the Finance Documents shall cease to be a Bank;

"Base Case" means the financial forecast established by using, inter alia, the 
price assumptions representing long term averages for the industry provided by 
the Market Consultant and cost and production assumptions provided by the 
Company, showing the projected cash flows from the Project and set out in 
Appendix H to the Information Memorandum under the title "Base Trend Case";

"Beneficiaries" means the Primary Beneficiaries, the Secondary Beneficiaries 
and the Tertiary Beneficiaries;

""B" EG Volume" in relation to any Relevant EG Period means the volume of EG 
(in tonnes) specified for such Relevant EG Period in Column 4 of the Second 
Schedule to the Sales Volume Guarantee;

""B" PE Volume" in relation to any Relevant PE Period means the volume of PE 
(in tonnes) specified for such Relevant PE Period in Column 4 of the First 
Schedule to the Sales Volume Guarantee;

"Boubyan" means Boubyan Petrochemical Company K.S.C.;

"Boubyan Subordinated Loan Agreement" means the $42,000,000 loan agreement to 
be dated on or before the Effective Date between Boubyan and the Company;

"Bridge Agent" means National Bank of Kuwait S.A.K. in its capacity as agent 
under the First Bridge Facility and the Second Bridge Facility;

"Bridge Facilities" means the First Bridge Facility and the Second Bridge 
Facility;

"Bridge Lenders" means the First Bridge Lenders and the Second Bridge Lenders;

"Budget Month" means any of the successive calendar months comprised in the 
period covered by an Annual Budget;

"Business Interruption Insurance Account" means the account in London so 
designated in the name of the Company and held with the Account Bank;

"Butene-1 Unit" means the unit to be constructed as part of the Project 
designed to produce butene-1; 

"Calculation Date" means the date falling 15 business days after the date on 
which the Debt Trustee gives notice to the Primary Beneficiaries of the 
occurrence of the Enforcement Date;

"Cash Flow Available for Debt Service" for any Fiscal Year or other period 
means operating profits and interest income of the Company for that period, 
before deductions on account of debt service, depreciation and amortisation 
but after taxes (including any mandatory contribution to KFAS) and:

(i)   less any increase (or plus any decrease) in Working Capital (excluding 
for these purposes any credit balance on the Operations Accounts) over the 
period;

(ii)  plus any increase over the period in the Outstandings under the Working 
Capital Facility and/or the outstanding principal amount of the Company's 
borrowings under working capital facilities approved in accordance with the 
Common Terms Agreement;

(iii) less capital expenditure incurred in the period (other than that funded 
prior to the Plant Completion Date by drawings under the Term Facilities or 
other facilities approved in accordance with the Common Terms Agreement, from 
CERF 1 and CERF 2 or from Shareholder Contributions); and

(iv)  less the sum of $5,000,000, Indexed (being the required annual 
contribution to CERF 1 for Major Plant Overhaul),

in each case calculated by the Company from time to time, by reference to 
projected values where and to the extent necessary, and confirmed by the 
Modelling Bank;

"Catalyst Supply Agreements" means:

(i)   the PE Catalyst Supply Agreement dated 28 May 1996 between UCC and the 
Company;

(ii)  the Ethylene Oxide Catalyst Supply Agreement dated as of 28 May 1996 
between UCC and the Company; 

(iii) the Hydrolysis Catalyst Supply Agreement dated as of 28 May 1996 between 
UCC and the Company; and 

(iv)  the Catalyst Supply Agreement dated on or prior to the Effective Date 
between the Company and IFP Enterprises, Inc.

in the case of (i) to (iii) above, each as amended by the Supplemental 
Agreement dated or to be dated on or prior to the Effective Date between UCC 
and the Company;

"Cedel" means the clearance system operated in Luxembourg by Cedel;

"CERF 1" means the dollar account in London so designated in the name of the 
Company and held with the Account Bank;

"CERF 1 Required Cumulative Balance" for any month means, on the basis of a 
thirty-six month cycle (the first such cycle commencing on Start-up and each 
successive one commencing with the date on which the Company incurs the 
expense of a Major Plant Overhaul), the sum of $15,000,000, Indexed, 
multiplied by the number of that month in the cycle and divided by thirty-six 
Provided that if the relevant month falls after the end of any such cycle but 
a new cycle has not commenced by reason of the Major Plant Overhaul being 
delayed, the duration of such first-mentioned cycle shall, for the purposes of 
this definition,  be increased accordingly but the denominator of thirty-six 
shall remain the same;

"CERF 2" means the dollar account in London so designated in the name of the 
Company and held with the Account Bank;

"CERF 2 Required Balance" means $15,000,000, Indexed;

"Collection Accounts"  means:

(i)   each account opened by the Company from time to time and designated by 
the Company as a Collection Account:

      (a)   over which effective security has been granted and perfected by 
the Company and EMC in favour of the Debt Trustee on terms and 
conditions approved by the Approval Group or in respect of which 
the designated account holder is the Debt Trustee;

      (b)   in respect of which the Debt Trustee has received legal opinions 
in form and substance satisfactory to the Approval Group from 
counsel in all relevant jurisdictions confirming that effective 
security has been granted over such account or (where the 
designated account holder is the Debt Trustee) that the Debt 
Trustee alone shall have a proprietary interest in funds credited 
thereto; and

      (c)   in respect of which the relevant account bank has (x) (where 
security shall have been granted) acknowledged such security, (y) 
agreed to make transfers from such account only in accordance with 
Clause 16.2 of the Common Terms Agreement (or as otherwise 
instructed by the Debt Trustee) and (z) not to permit the Company 
otherwise to make withdrawals from such account; or

(ii)  such other account (together with the mechanics for deposits therein and 
withdrawals therefrom) as the Approval Group (acting reasonably having 
regard to, amongst other things, the ability of the Company to market 
its Products competitively in the market in which the Collection Account 
is proposed to be opened) may have approved in writing, 

unless, in any case, the Intercreditor Agent (acting reasonably) or (following 
the occurrence of an Event of Default which has not been waived by the 
Majority Term Banks or remedied) the Debt Trustee notifies the Company that 
such account may no longer be used as a Collection Account;

"Collection Account Bank" means a bank with which a Collection Account is 
held;

"Commencement Date" means (subject to Clause 30 of the Common Terms Agreement) 
the earliest of:

(i)   30 September, 1998; 

(ii)  the date falling six months after the Plant Completion Date; and

(iii) the date falling six months after the date on which any of the Plant 
Completion Tests is failed for the fifth time;

"Commercial Completion Test"  means the test specified in Part 5 of the 
Seventh Schedule to the Common Terms Agreement;

"Common Terms Agreement" means the agreement entitled "Common Terms and 
Intercreditor Agreement" dated of even date herewith between the Company, EMC, 
the Intercreditor Agent, the Project Assets Security Trustee, the Debt 
Trustee, the Lessor, the Facility Agent, the Working Capital Agent, the 
Political Risk Agent, the Arrangers, the Underwriters, the Function Banks, the 
Term Loan Banks and the Working Capital Facility Banks;

"Company" means Equate Petrochemical Co. K.S.C. (Closed);

"Completion" means the occurrence of the Completion Date;

"Completion Conditions" means:

(i)    each of the Plant Completion Tests shall have been satisfied (provided 
that the Company shall have no more than five opportunities to satisfy any 
Plant Completion Test and that the Plant Completion Tests must be satisfied on 
or before 30 September 2000);

(ii)   the Commercial Completion Test shall have been satisfied;

(iii)  the Financial Test shall have been satisfied;

(iv)   (subject to the provisions of Clause 4.2 of the Completion Guarantee) 
the Letters of Credit required under Clause 9 of the Sponsor Support 
Agreement shall have been issued;

(v)    no Event of Default or Potential Event of Default (which has not been 
waived by the Majority Term Banks or remedied) shall have occurred;

(vi)   the Company shall have complied with its obligations under Clause 
8.1(xii) of the Common Terms Agreement and granted and perfected 
security in favour of the Primary Beneficiaries over the relevant 
Approved Hedging Agreements, in form, substance and manner satisfactory 
to the Approval Group;

(vii)  all of the representations (except for those in Clauses 6.2(x), 6.3(i) 
and 6.3(ii) of the Common Terms Agreement and Clauses 12.2(ix) and 
12.2(x) of the Sponsor Support Agreement) made by each of the Company, 
EMC and the Sponsors in any of the Finance Documents shall be true with 
reference to the facts and circumstances then existing; 

(viii) the Insurance Bank shall be satisfied that the Insurances shall be in 
place; and

(ix)   the Company shall have granted to the Project Assets Security Trustee a 
commercial premises mortgage and a buildings mortgage, in each case in 
respect of the Site and in the Agreed Form;

Provided that, on the date on which it is proposed that either or both of the 
Sponsors be released from the Completion Guarantee, the Annual Bank Case 
prepared in accordance with Clause 15.6 of the Common Terms Agreement for the 
purposes of the Financial Test shall not be more than thirty days old;

"Completion Date" means the first day on which both of the Sponsors shall have 
been released from their respective obligations under Clauses 2 and 3 of the 
Completion Guarantee;

"Completion Guarantee" means the agreement so entitled dated of even date 
herewith between the Sponsors, the Intercreditor Agent and the Debt Trustee;

"Completion Tests" means the Mechanical Completion Test, the Unit Performance 
Tests, the Reliability Test, the Commercial Completion Test and the Financial 
Test;

"Construction Budget" means a budget for the construction of the Plant and the 
preliminary Operating Expenses of the Company (including for this purpose the 
fees payable by the Company to the Political Risk Indemnitors under the 
Political Risk Indemnity during the period up to the Plant Completion Date) 
prepared by the Company and approved by the Technical Bank and the Technical 
Consultant;

"Construction Event of Force Majeure" means an Event of Force Majeure under 
the EPC Contracts or any of them;

"Construction Schedule" means a progress report with respect to the 
construction of the Plant and a schedule up to the estimated Plant Completion 
Date, prepared by the Technical Consultant within thirty days prior to the 
proposed Effective Date and agreed by the Technical Bank;

"Consultants" means the Market Consultant, the Insurance Consultant and the 
Technical Consultant;

"Consultancy Agreements" means:

      (i)   the Market Consultancy Services Agreement; 

      (ii)  the agreement dated or to  be dated on or prior to the Effective 
Date between the Technical Bank, the Company and the Technical 
Consultant, relating to the services of the Technical Consultant 
contemplated in the Finance Documents; and

      (iii) the agreement dated or to  be dated on or prior to the Effective 
Date between the Insurance Bank, the Company and the Insurance 
Consultant, relating to the services of the Insurance Consultant 
contemplated in the Finance Documents;

"Contingent O&M Services Agreement" means the agreement so entitled to be 
dated on or prior to the Effective Date between the Company, UCC and the 
Technical Bank;

"Contract Quantities" has the meaning ascribed thereto in the Feedstock Supply 
Agreement (namely, in respect of Feed Gas, an amount sufficient to yield 
seventy million standard cubic feet of contained ethane per day, and in 
respect of Fuel Gas, twenty billion British thermal units per day);

"Contractors" means, together, the persons that, from time to time, supply 
goods and/or services to the Company pursuant to the Project Documents;

"Contractual Rights" means all representations, covenants, guarantees, 
indemnities and other contractual provisions made, given or otherwise agreed 
by any of the Obligors in favour of either Trustee (other than any such made, 
given or agreed solely for its own benefit) made, given or granted in or 
pursuant to any of the Finance Documents;

"Cost Overrun Facility Agreement" means the $26,000,000 loan agreement to be 
dated on or prior to the Effective Date between the Sponsors and the Company;

"Cost Overruns" means Project Costs to the extent they exceed $1,995,000,000;

"CTA Deed of Accession" means a deed of accession in the form set out in the 
Fifth Schedule to the Common Terms Agreement;

"Debt Service Payments" means all amounts of principal, interest, lease 
rentals, fees, commissions, costs and expenses payable by the Company in 
respect of its Indebtedness for Borrowed Money other than:

(i)   in respect of Subordinated Liabilities; and

(ii)  any repayment of a Working Capital Advance to the extent the same is to 
be met from a further Working Capital Advance,

but including all Net Swap Payments;

"Debt Service Payments Account"  means the dollar account in London so 
designated in the name of the Company and held with the Account Bank;

"Debt Service Reserve Fund" means the dollar account in London so designated 
in the name of the Company and held with the Account Bank;

"Debt Service Shortfall" means, in respect of any Payment Date or Intermediate 
Payment Date falling during the ASC Availability Period, the amount by which 
the aggregate amount of Debt Service Payments due on such Payment Date or 
Intermediate Payment Date in respect of Term Outstandings (but not including 
such Debt Service Payments to the extent guaranteed by the Completion 
Guarantee) exceeds the sum of the funds referred to in sub-paragraphs (i) to 
(x) of Clause 18.2 of the Common Terms Agreement as of such date;

"Debt Trustee" means Citicorp Trustee Company Limited as debt trustee and/or 
any other person appointed as such from time to time under the Security Trust 
Agreement;

"Deed of Subordination" means the agreement so entitled dated of even date 
herewith between the Company, the Shareholders, EMC, the Residual Trustee, the 
Project Assets Security Trustee, the Political Risk Agent and the Bridge 
Agent; 

"Deed of Transfer" means the deed of transfer dated of even date herewith 
between the Project Assets Security Trustee and the Debt Trustee pursuant to 
which all the right, title and interest of the Debt Trustee in the Trust 
Property (if any) will, subject to the terms thereof, be transferred to the 
Project Assets Security Trustee on the Primary Beneficiary Release Date;

"Definitions Agreement" means this Agreement;

"Designating Instrument" means an instrument in the form set out in the Fourth 
Schedule to the  Security Trust Agreement;

"Dinar Operations Account" means the dinar account in Kuwait so designated in 
the name of the Company and held with National Bank of Kuwait S.A.K. (or such 
other account with such other bank, and the security arrangements in relation 
to which, as the Approval Group may from time to time approve);

"Dinar Petty Cash Account" means the dinar account in Kuwait so designated in 
the name of the Company and held with National Bank of Kuwait S.A.K. (or such 
other account or accounts with such other bank or banks, and the security 
arrangements in relation to which, as the Approval Group may from time to time 
approve);

"Disbursement Account" means the dollar account in New York so designated, in 
the name of the Company held with National Bank of Kuwait S.A.K. (or such 
other account with such other bank, and the security arrangements in relation 
to which, as the Approval Group may from time to time approve);

"Distribution" means (in the particular case of the Company) any payment in 
respect of the Subordinated Liabilities and (generally) any dividends on any 
class of share capital, any reduction, redemption or repurchase of any class 
of share capital or any similar transaction;

"Distributions Account" means the dollar account in London so designated, in 
the name of the Company and held with the Account Bank;

"Documents" means the Finance Documents and the Project Documents;

"Dollar Operations Account" means the dollar account in New York so designated 
in the name of the Company and held with National Bank of Kuwait S.A.K.;

"Drawings" means drawings by the Company of advances under the Term Loan 
Facility and of consideration monies under the Sale Agreement, in accordance 
with the provisions of the Common Terms Agreement;

"Drawings Certificate" means a certificate substantially in the form set out 
in the Eighth Schedule to the Common Terms Agreement issued by the Technical 
Consultant in respect of a Drawing Period in which the Company wishes to make 
Drawings;

"Drawing Period" means each successive period of one month as from the date of 
the second Drawing under the Term Facilities and commencing in the 
Availability Period for the Term Facilities Provided that the final Drawing 
Period shall end on the last day of the Availability Period for the Term 
Facilities and may, if the Company so requests in writing to the Intercreditor 
Agent prior to the commencement thereof, be such period not exceeding forty-
five days as will end on the last day of the Availability Period or on the 
date which the Company reasonably believes (as certified by it in such 
respect) will be the last day of the Availability Period;

"Due Amounts" at any time in relation to a Beneficiary means all amounts which 
are due and payable at such time by the Company to such Beneficiary under or 
in relation to the Finance Documents (and for the avoidance of doubt, in the 
case of Term Banks who are also Political Risk Indemnitors, amounts which were 
due to such Term Banks under the Completion Guarantee which have been properly 
set off against amounts due from such Term Banks to UCC pursuant to the 
Political Risk Indemnity shall not constitute "Due Amounts" of such Term 
Banks);

"Effective Date" means the date on which the Intercreditor Agent notifies each 
of the other parties to the Common Terms Agreement, pursuant to Clause 2.7 
thereof, that all conditions precedent thereunder have been satisfied;

"EG" means ethylene glycol;

"EG Applicable Amount" in relation to any Relevant EG Period means the 
aggregate sums (if any) received by the Company (i) in respect of sales of EG, 
other than by way of True Sales, during such Relevant EG Period and (ii) by 
way of insurance proceeds in respect of EG lost or destroyed which shall have 
been contracted to be sold;

"EG Licence Agreement" means the Ethylene Glycol Licence Agreement between UCC 
and the Company dated 28 May 1996;

"EG Marketing Phase III" means Phase III of the marketing plan for EG produced 
at the Plant as described in the EG Marketing Services Agreement;

"EG Sales Assumption Date" means the last day of the Relevant EG Period during 
which (as demonstrated and certified by the Company, to the satisfaction of 
the Majority Term Banks) EMC succeeds in selling on an independent basis (as 
such phrase is defined in Clause 5.5 of the Sales Volume Guarantee) at least 
fifty percent (50%) of the Target EG Sales Volume for such Relevant EG Period 
or such earlier date upon which UCC becomes an Expropriated Sponsor;

"EG Sales Volume Shortfall" in relation to any Relevant EG Period means the 
Guaranteed EG Sales Volume for such Relevant EG Period less (but not so as to 
produce a negative figure) the Actual EG Sales Volume for such Relevant EG 
Period;

"EG Start-up" means the Initial Operation Date as defined in the EG Licence 
Agreement;

"EG Unit" means the process unit to be constructed as part of the Project 
designed to produce EG at the rate of at least 340,000 tonnes per annum;

"Eligible Sponsor Sales Agreement" mean an agreement (which may, in the case 
of PE, constitute an amendment to the PE Sales Support Agreement) for the sale 
of fixed quantities of Product, over each year or shorter specified period of 
such agreement, by the Company (or EMC on its behalf) to or via either 
Sponsor, which agreement:

(i)   provides for prices of PE or EG which are reflective of the generally 
prevailing prices at the time of sale of PE or, as the case may be, EG 
in the market of which the initial country of import forms part;

(ii)  provides for the sale of Product over a total period exceeding five 
years or shorter periods which are automatically renewed at the end of 
each successive period;  and

(iii) shall not be terminable except by the Company (or EMC on its behalf) 
acting with the written consent of the Majority Term Banks;

"EMC" means Equate Marketing Company E.C., a company organised under the laws 
of Bahrain;

"EMC Documents" means each Document to which EMC is party;

"EMC Shares" means the UCC EMC Shares and the PIC EMC Shares;

"Enforcement Date" means the first date on which the Majority Term Banks (or 
the Intercreditor Agent acting on the instructions of the Majority Term Banks) 
instruct either of the Trustees to enforce any of the Security or the date on 
which the Intercreditor Agent or the Debt Trustee declares that an Event of 
Default has occurred and requires that  the Facilities be repaid in full 
pursuant to Clause 33 of the Common Terms Agreement;

"English Law Security Agreement" means the agreement so entitled dated of even 
date herewith 1996 between the Company, EMC and the Debt Trustee;

"EPC Contracts" means:

(i)    the Engineering, Procurement & Construction Contract (Inside Kuwait) 
(Contract No. 511-872418) dated 1 July 1994 between Fluor International 
Limited and the Sponsors, as amended by a letter dated as of 26 June 
1995;

(ii)   the Engineering, Procurement and Construction Contract (Outside Kuwait) 
(Contract No. 511-872419) dated 1 July 1994 between Fluor Daniel 
Intercontinental, Inc. and the Sponsors, as amended by a letter dated 
as of 26 June 1995;

(iii)  the Co-ordination Letter (re: Inside and Outside Kuwait EPC Contracts) 
dated as of 1 July 1994 between Fluor Daniel Intercontinental, Inc., 
Fluor International Limited and the Sponsors;

(iv)   the Parent Company Guarantee relating to the contracts referred to in 
(i) and (ii) above dated 1 July 1994 between Fluor Daniel, Inc. and the 
Sponsors;

(v)    the Engineering, Procurement & Construction Contract (Outside Kuwait) 
(Contract No. 688000-9-003K) effective as of 9 March 1995 between Brown 
& Root, Inc. and the Sponsors;

(vi)   the Engineering, Procurement & Construction Contract (inside Kuwait) 
(Contract No. 688000-9-004K) effective as of 9 March 1995 between Brown 
& Root International, Inc. and the Sponsors;

(vii)  the Parent Company Guarantee relating to the contract referred to in 
(v) and (vi) above dated as of 6 November 1995 between Brown & Root 
Holdings Inc. and the Sponsors;

(viii) the Outside Kuwait Services Agreement dated as of 5 April 1994 between 
Brown & Root, Inc. and the Sponsors, as amended by a letter dated 10 
May 1995;

(ix)   the Engineering, Procurement & Construction Contract (Inside Kuwait) 
(Contract No. 688000-9-006K) effective as of 23 May 1995 between World 
Services Italiana S.p.A. and the Sponsors, as amended by a letter 
effective as of 11 September 1995;

(x)    the Parent Company Guarantee relating to the contract referred to in 
(ix) above dated as of 23 May 1995 between Foster Wheeler International 
Corporation and the Sponsors;

(xi)   the Engineering, Procurement & Construction Contract (Outside Kuwait) 
(Contract No. 688000-9-005K) effective as of 23 May 1995 between Foster 
Wheeler Italiana S.p.A. and the Sponsors, as amended by a letter 
effective as of 11 September 1995;

(xii)  the Parent Company Guarantee relating to the Contract referred to in 
(xi) above dated as of 23 May 1995 between Foster Wheeler International 
Corporation and the Sponsors;

(xiii) the Engineering, Procurement & Construction Contract (Inside Kuwait) 
(Contract No. 688000-9-008K) effective as of 9 August 1995 between 
Aquater, S.p.A. and the Sponsors, as amended by a letter effective as 
of 14 November 1995; and

(xiv)  the Engineering, Procurement & Construction Contract (Outside Kuwait) 
(Contract No. 688000-9-007K) effective as of 9 August 1995 between 
Snamprogetti, S.p.A. and the Sponsors, as amended by a letter effective 
as of 15 November 1995; and 

(xv)   the Parent Company Guarantee relating to the Contracts referred to in 
(xiii) and (xiv) above dated as of 15 January 1996 between E.N.I. 
S.p.A. and the Company,

each (apart from that mentioned in (xv) above) as assigned by the Sponsors to 
the Company pursuant to the Assignment and Assumption Agreements;

"ETR Suspension Period" shall have the meaning ascribed thereto in Clause 23.2 
of the Sponsor Support Agreement; 

"Ethylene Unit" means the process unit to be constructed as part of the 
Project designed to produce ethylene at the rate of at least 650,000 tonnes 
per annum;

"Ethylene Glycol Marketing Agreement" means the agreement so entitled dated as 
of 28 May, 1996 between the Company and EMC;

"Ethylene Glycol Marketing Services Agreement" means the agreement so entitled 
dated 28 May 1996 between EMC and UCC;

"Euroclear" means the clearance system operated by Morgan Guaranty Trust 
Company of New York, Brussels office;

"Event of Default" means any of those events listed in Clause 32 of the Common 
Terms Agreement;

"Event of Force Majeure" means any event the occurrence of which under the 
terms of any of the Project Documents would entitle any party thereto to claim 
that its material obligations under such Project Documents were deferred or 
suspended for a period or indefinitely, without incurring liability in respect 
of its failure to perform such obligations on time;

"Excess Cash Flow" for any period means the excess of:

(i)   Cash Flow Available for Debt Service for that period; over

(ii)  the sum of:

      (a)   Debt Service Payments paid during such period;

      (b)   the Priority Distributions Account Credits paid for that period;

      (c)   the payments into the Debt Service Reserve Fund for that period 
pursuant to Clause 17.1(v) of the Common Terms Agreement; and

      (d)   the required payments into CERF 2 for that period,

as determined from time to time by the Company and confirmed by the Modelling 
Bank;

"Excess Cash Flow Fund" means the dollar account in London so designated in 
the name of the Company held with the Account Bank;

"Excluded Company" means at the relevant time:

(i)   any person whom the Debt Trustee shall not have demonstrated to be 
permitted under all applicable laws and regulations of Kuwait (in case 
of the Company) or Bahrain (in the case of EMC) to do business in Kuwait 
or, as the case may be, Bahrain and to assume the obligations of the 
Company and/or EMC under the specified Step-in Document(s) (it being 
acknowledged that a legal opinion from the Debt Trustee's (or such 
person's) Kuwaiti legal counsel (in the case of the Company) or Bahraini 
legal counsel (in the case of EMC) to such effect will be satisfactory 
for these purposes); or

(ii)  any person whom KPC shall not have approved (such approval not to be 
unreasonably withheld) as an Additional Company or, as the case may be, 
a Substitute Company; or

(iii) any of:

      (a)   BP Chemicals Incorporated;
            Montell Polyolefins;
            Nova Corporation;
            Phillips Petroleum Company;
            BASF Aktiengesellschaft;
            Mitsui Petrochemical Industries;
            Amoco Corporation/Chiesso Corporation;
            Shell Oil Company/Royal Dutch Petroleum Company;
            Nippon Shokubai Kagaku Kogyo Co., Ltd; and
            Scientific Design Co., Inc.,

            or any other person created as a result of a merger, amalgamation, 
restructuring, reorganisation or sub-division, however effected, 
of any of the abovementioned persons and irrespective of any 
change of name of any such person after the date hereof; or

      (b)   any person who at the relevant time is actively licensing either 
PE or EG technology other than to an Affiliate (for which purpose 
a person shall be considered to be actively licensing PE or EG 
technology if it shall have licensed at least one PE or EG unit to 
an unaffiliated person within the immediately preceding 6 years or 
if the relevant Sponsor(s) can demonstrate to the reasonable 
satisfaction of the Approval Group that such person has a 
programme to license competitive technology); or 

      (c)   any Affiliate of any of the persons mentioned in (a) or (b) above; 
or

      (d)   any person (the "Relevant Company") in or with which any of the 
persons mentioned in (a), (b) or (c) above (the "Competitor"): 

            (x)   holds fifteen percent. (15%) or more of the shares in the 
Relevant Company or any shares which give the Competitor 
control over the Relevant Company; or 

            (y)   has employee secondment or other similar arrangements 
pursuant to which employees of the Competitor are seconded 
to the Relevant Company to perform functions which give them 
access to engineering, scientific or technical information;

"Excluded EG Sales" means sales of EG into any country in which patent 
infringement action in respect of EG has been threatened or commenced against 
the Company, EMC, either Sponsor, any purchaser of EG or any agent of any 
thereof at any time until such patent infringement action has been settled 
such that no future sales into such country will be subject to such action; 

"Excluded PE Sales" means sales of PE into any country in which patent 
infringement action in respect of PE has been threatened or commenced against 
the Company, EMC, either Sponsor, any purchaser of PE or any agent of any 
thereof at any time until such patent infringement action has been settled 
such that no future sales into such country will be subject to such action;

"Expropriated Sponsor" means a Sponsor:

(i)   which suffers, and whose Affiliates (to the extent any Affiliate has an 
interest in the Project or the Company) suffer, Total Expropriation; and

(ii)  which satisfies the criteria that neither its share capital nor the 
share capital of any of its Affiliates nor any guarantor of any of its 
obligations in respect of the Project is beneficially owned, directly or 
indirectly, as to more than fifty percent (50%) by the State of Kuwait 
or any Agency thereof;

"Extraordinary Shareholder Contribution" means any payment by way of loan to 
the Company by any of the Shareholders other than an Initial Shareholder 
Contribution or an Additional Shareholder Contribution;

"Facilities" means the Term Facilities and the Working Capital Facility;

"Facility Agent" means National Bank of Kuwait S.A.K. as facility agent or any 
other person appointed as such from time to time under the Term Loan Facility 
Agreement;

"Facility Agreement" means the facility agreement or similar instrument 
whereby any of the Facilities or New Facilities is made available to the 
Company;

"Facility Office" means, in relation to any Bank, the office identified with 
its signature on the Common Terms Agreement (or, in the case of a Transferee, 
at the end of the Transfer Certificate to which it is party as Transferee) or 
such other office as such person may from time to time select;

"Feed Gas" means ethane rich gas produced at the LPG Plant conforming to the 
specifications set out in Section 5.1(a) of the Feedstock Supply Agreement;

"Feedstock Interruption Agreement" means the agreement so entitled dated of 
even date herewith between the Sponsors, the Company, the Debt Trustee and the 
Intercreditor Agent;

"Feedstock Supply Agreement" means the agreement so entitled dated 1 June 1996 
between the Company and PIC;

"Final Maturity Date" in respect of the Term Facilities means the date falling 
ninety-six months after the Commencement Date;

"Final Release Date" means the date on which all Secured Obligations owed to 
all Beneficiaries have been fully and finally discharged and none of the 
Beneficiaries is under any commitment, obligation or liability (whether actual 
or contingent) to make advances or provide other financial accommodation to 
the Company or UCC;

"Finance Documents" means this Agreement, the Security Documents, the Security 
Trust Agreement, the Deed of Transfer, the Second Deed of Transfer, the Common 
Terms Agreement, the Term Loan Facility Agreement, the Lease, the Sale 
Agreement, the Working Capital Facility Agreement, any facility agreement of 
any kind referred to in a Designating Instrument, the Contingent O&M Services 
Agreement, any Approved Hedging Agreement, the Completion Guarantee, the 
Sponsor Support Agreement, the Feedstock Interruption Agreement, the Sales 
Volume Guarantee, the KPC Comfort Letter, the Consultancy Agreements, each New 
Facility and the Letters of Credit;

"Financial Model" means the financial spreadsheet prepared by the Modelling 
Bank to calculate the sensitivity of cash flows of the Project under multiple 
price and cost scenarios and used by the Modelling Bank to prepare the Base 
Case;

"Financial Test" means, on the date upon which it is proposed that the last of 
the Completion Conditions should be satisfied, the satisfaction of each of the 
following:

(i)   as demonstrated by the Annual Bank Case prepared under Clause 15.6 of 
the Common Terms Agreement:

      (a)   the Loan Life Cover Ratio is at least 1.25:1;

      (b)   the projected Annual Debt Service Ratio for the next following 
twelve month period is at least 1.1:1: and

      (c)   the projected Annual Debt Service Ratio for the twelve month 
period following that referred to in (b) above is at least 1.25:1;

(ii)  the Term Outstandings do not exceed $1,200,000,000;

(iii) the Initial Shareholder Contributions shall have been made in full;

(iv)  the ratio of Total Debt to Project Capitalisation shall be no greater 
than 7:10; and

(v)   the sum of the balance on the Debt Service Reserve Fund and the value of 
the Letters of Credit issued pursuant to Clause 9 of the Sponsor Support 
Agreement shall be not less than the lesser of (a) $120,000,000 and (b) 
the highest aggregate amount of Debt Service Payments (ignoring for 
these purposes Debt Service Payments relating to the Working Capital 
Facility) shown for any six month period in the Annual Bank Case;

"First Bridge Facility" means the $450,000,000 guaranteed bridge facility made 
available to the Company pursuant to a facility agreement dated 24 December, 
1995 between the Company as borrower, the Bridge Agent and the financial 
institutions named therein;

"First Bridge Lenders" means the lenders under the First Bridge Facility;

"Fiscal Year" means each financial year of the Company;

"FS Interruption" means any complete or partial interruption in the supply by 
PIC to the Company of the Contract Quantities of Feed Gas and Fuel Gas in 
accordance with and in the manner required by the Feedstock Supply Agreement 
(or the manner which would have been required thereby but for any event or 
circumstances relaxing or relieving such requirement) at any time and for any 
reason (whether by reason of default, or by virtue of force majeure events or 
circumstances or otherwise) other than:

(i)   interruptions which do not subsist for more than six days (whether 
consecutive or otherwise) in any two month period; and

(ii)  partial interruptions which do not reduce the supply of Feed Gas to 
below 70% of the Contract Quantities;

"FS Interruption Period"  means, in respect of an FS Interruption, the period 
starting on the first day of such FS Interruption and ending on the last day 
such FS Interruption;

"FS Loan" means any loan deemed to be made by a Sponsor to the Company 
pursuant to Clause 4.5 of the Feedstock Interruption Agreement (but not, for 
the avoidance of doubt, any other loans made or deemed to be made by the 
Sponsors to the Company pursuant to the Feedstock Interruption Agreement);

"FS (No Support) Interruption" means any FS Interruption arising as a result 
of:

(i)   the exercise by the Company of its rights under Clause 4.5 of the 
Feedstock Supply Agreement (voluntary reductions);

(ii)  a suspension of supply of Feed Gas and/or Fuel Gas to the extent and in 
the circumstances permitted by Clause 4.6 of the Feedstock Supply 
Agreement ( maintenance outages); or

(iii) PIC being relieved of its obligations under the Feedstock Supply 
Agreement pursuant to Clause 10.2(c) thereof;

"FS (PIC) Shortfall" means an FS Shortfall classified as such in accordance 
with Clause 4.1(ii) of the Feedstock Interruption Agreement;

"FS (PIC Support) Interruption" means any FS Interruption arising as a result 
of:

(i)   any breach by PIC of its obligations under the Feedstock Supply 
Agreement;

(ii)  a reduction in oil production in Kuwait to below 1 million barrels per 
day; or

(iii) PIC being relieved of its obligations under the Feedstock Supply 
Agreement as a result of the circumstances or events referred to in 
Clause 10.2(b) thereof (acts of the Kuwait Government);

"FS (PIC) Support Period" means a number of days equal to the sum of the 
number of days of each FS (PIC Support) Interruption provided that whenever 
each FS (PIC) Shortfall arising during any particular Budget Month is paid in 
full in accordance with Clause 4.3 of the Feedstock Interruption Agreement, 
the FS (PIC) Support Period shall be reduced by 30 days;

"FS (PIC & UCC) Shortfall" is an FS Shortfall classified as such in accordance 
with Clause 4.1(ii) of the Feedstock Interruption Agreement;

"FS (PIC & UCC Support) Interruption" means any FS Interruption which is not 
an FS (PIC Support) Interruption or an FS (No Support) Interruption;

"FS (PIC & UCC) Support Period" means a number of days equal to the sum of the 
number of days of each FS (PIC & UCC Support) Interruption provided that:

(i)   the FS (PIC & UCC) Support Period in respect of any FS (PIC & UCC 
Support) Interruption shall not exceed 1095 days; and

(ii)  if all FS (PIC & UCC) Shortfalls arising during any particular Budget 
Month are paid in full in accordance with Clause 4.2 of the Feedstock 
Interruption Agreement, the FS (PIC & UCC) Support Period shall be 
reduced by 30 days;

"FS Shortfall" means, without prejudice to Clause 4.1(i) of the Feedstock 
Interruption Agreement, in respect of any Budget Month the sum of:

      (i)   the amount by which the sums in the Master Accounts and (to the 
extent received in respect of an FS Interruption under any 
contingent business interruption insurance policies from time to 
time taken out by the Company) the Business Interruption Insurance 
Account are insufficient to fund the Operations Accounts and the 
Debt Service Payments Account with the amounts required to be 
deposited therein and/or to fund Debt Service Payments, in 
accordance with Clauses 17.1(i) and (iv) and 18.2(ii) of the 
Common Terms Agreement; and 

      (ii)  the amount (if any) by which the sums in the Master Accounts are 
insufficient to repay that portion of the Working Capital Loan 
required to be repaid during such Budget Month to ensure that the 
amount of the Working Capital Loan does not exceed the Working 
Capital; 

"FS Supported Interruption" means any FS (PIC Support) Interruption or FS (PIC 
& UCC Support) Interruption;

"Fuel Gas" means methane rich gas available in Kuwait conforming to the 
specifications set out in Section 5.1(b) of  the Feedstock Supply Agreement;

"Function Banks" means the Account Bank, the Insurance Bank, the Modelling 
Bank and the Technical Bank;

"Guaranteed EG Sales Volume" means in respect of any Relevant EG Period or 
part thereof falling prior to the date upon which the Sponsors' obligations to 
achieve sales of at least the Target EG Sales Volumes have terminated in 
accordance with Clause 5 of the Sales Volume Guarantee either:

(i)   the Target EG Sales Volume for such Relevant EG Period; or

(ii)  such lesser volume as may be determined in accordance with Clause 4 of 
the Sales Volume Guarantee for such Relevant EG Period;

"Guaranteed Obligations" means the obligations of the Company to pay:

(i)   any monies which become due and payable by it under or pursuant to any 
of the Common Terms Agreement, the Term Loan Facility Agreement, the 
Lease, the Sale Agreement, the Working Capital Facility Agreement and 
any Approved Hedging Agreement on or before the Completion Date; and/or

(ii)  in the event that the Completion Date falls on a date which is not a 
Payment Date or an Intermediate Payment Date:

      (a)   any interest which accrues in respect of the Term Loan or the 
Working Capital Loan for the period of time up to and including 
the Completion Date but which becomes due and payable by it after 
the Completion Date;

      (b)   the first repayment of the Term Loan, the first Lease Payment and 
the first payment of principal under or pursuant to the Working 
Capital Facility falling due and payable by it after the 
Completion Date  Provided that the portion of such repayment, 
Lease Payment or payment of principal which is a Guaranteed 
Obligation shall be limited in each case to a sum which bears the 
same proportion to the total amount of such repayment, Lease 
Payment or, as the case may be, payment of principal as (1) the 
number of days (inclusive) from the Payment Date or, as the case 
may be, Intermediate Payment Date which occurs immediately prior 
to the Completion Date bears to (2) the total number of days 
(inclusive) from such Payment Date or, as the case may be, 
Intermediate Payment Date to the date such repayment, Lease 
Payment or, as the case may be, payment of principal becomes due 
and payable;

"Guaranteed PE Sales Volume" means, in respect of any Relevant PE Period or 
part thereof falling prior to the date upon which the Sponsors' obligations to 
achieve sales of at least the Target PE Sales Volumes have terminated in 
accordance with Clause 5 of the Sales Volume Guarantee either:

(i)   the Target PE Sales Volume for such Relevant PE Period; or

(ii)  such lesser volume as may be determined in accordance with Clause 4 of 
the Sales Volume Guarantee for such Relevant PE Period;

"HDPE" means high density polyethylene;

"Hedging Programme" means the programme for, and agreed form of ISDA Master 
Agreement and Schedule to be utilised for the purposes of, hedging the 
Company's interest rate exposure under the Finance Documents set out in the 
Ninth and Tenth Schedules to the Common Terms Agreement, as the same may be 
amended from time to time with the approval of the Approval Group (such 
approval not to be unreasonably withheld);

"Imputed Lease Drawings" means the amount agreed as such in accordance with 
Clauses 27.3 to 27.5 of the Common Terms Agreement;

"Imputed Term Loan Drawings" mean the amount agreed as such in accordance with 
Clauses 27.2, 27.4 and 27.5 of the Common Terms Agreement;

"Imputed Tranche A Term Loan Drawings" means the portion of the Imputed Term 
Loan Drawings advanced or to be advanced by the Tranche A Term Loan Banks;

"Imputed Tranche B Term Loan Drawings" means the portion of the Imputed Term 
Loan Drawings advanced or to be advanced by the Tranche B Term Loan Banks;

"Indebtedness for Borrowed Money" means any indebtedness for or in respect of 
monies borrowed or raised by whatever means, including in respect of loans, 
overdrafts, acceptances, finance leases, the obtaining of credit or the 
deferral of the purchase price for assets or services (other than trade credit 
on ordinary commercial terms), commercial paper, bonds, debentures, notes or 
any financial obligation arising out of any financial instrument similar in 
form or effect to any of the foregoing;

"Indexed" in relation to any amount means annually such amount increased up to 
the date of calculation by three per cent. (3%) per annum (compounded 
annually) since 1 January 1995;

"Industrial Licence" means the licence to be granted to the Company by the 
Ministry of Commerce and Industry of the State of Kuwait approving the 
production by the Company of 650,000 tonnes per annum of ethylene, 340,000 
tonnes per annum of EG and 450,000 tonnes per annum of PE;

"Industrial Utility Rates" means the utility rates for the supply of 
desalinated water, sea water coolant and electricity generally available to 
the industrial sector in Kuwait;

"Information Memorandum" means the information memorandum dated 24 June 1996, 
relating to the Project;

"Initial Shareholder Contributions" means the equity injections, subordinated 
loans and Technology Licensing which the Shareholders are required to provide 
to the Company pursuant to Clause 2 of the Sponsor Support Agreement;

"Initial Working Capital" means budgeted Operating Expenses for the first two 
months of the first Annual Budget;

"Insurance Accounts" means the Business Interruption Insurance Account and the 
Property Damage Insurance Account;

"Insurance Bank" means Gulf International Bank B.S.C. as insurance bank or 
such other person appointed as such from time to time in accordance with 
Clause 45.2 of the Common Terms Agreement;

"Insurance Consultant" means Johnson & Higgins as insurance consultant or such 
other person appointed as such in connection with the Project and approved by 
the Majority Term Banks; 

"Insurance Renewal Date" means, in respect of any Insurances, each of the 
dates specified in Section 4 of Part 1 of the Fourth Schedule to the Common 
Terms Agreement; 

"Insurances" means the insurances required to be maintained by the Company 
and/or EMC in accordance with the Fourth Schedule to the Common Terms 
Agreement; 

"Intercreditor Agent" means National Bank of Kuwait S.A.K. as intercreditor 
agent or such other person appointed as such from time to time in accordance 
with Clause 42.2 of the Common Terms Agreement;

"Interest Period" in relation to the Term Loan Facility means each period from 
one Payment Date or Intermediate Payment Date to the next following Payment 
Date or Intermediate Payment Date or, in the case of the first Interest Period 
for any Term Loan Advance, the period from the date the same was advanced 
under the Term Loan Facility to the first Payment Date or Intermediate Payment 
Date thereafter;

"Intermediate Payment Date" means any date determined as such under Clauses 
29.2 and 31 of the Common Terms Agreement;

"Intermediate Release Date" means the Primary Beneficiary Release Date or, if 
any payment has been made under the Completion Guarantee, the date upon which 
all payments made by the Political Risk Indemnitors under the Political Risk 
Indemnity have been recovered in full pursuant to the Deed of Subordination 
and the Security Trust Agreement and none of the Political Risk Indemnitors is 
under any commitment, obligation or liability (whether actual or contingent) 
under the Political Risk Indemnity;

"International Accounting Standards" means International Accounting Standards 
as published by the International Accounting Standards Committee;

"Invoice" means an invoice from the Company to the Purchaser under Clause 6.2 
of the Sale Agreement and substantially in the form of the Second  Schedule to 
the Sale Agreement;

"ISC Facility Amount" means the aggregate amount of Initial Shareholder 
Contributions required to be made by the Shareholders in accordance with 
Clause 2 of the Sponsor Support Agreement;

"Joint Venture Agreement"  means the agreement so entitled dated 15 July 1995 
between the Sponsors;

"KFAS" means the Kuwait Fund for the Advancement of Science;

"KIBOR" for any period and any amount means the rate per annum which is the 
arithmetic mean (rounded upwards, if not already such a multiple, to the 
nearest whole multiple of one-sixteenth of one per cent.) of the rates (as 
notified to the Working Capital Facility Agent) at which each of the Reference 
Banks was offering to prime banks in the Kuwait Interbank Market deposits in 
dinars for such period, in each case at or about 10.00 am (Kuwait time) on the 
Quotation Date for such period;

"KNPC" means Kuwait National Petroleum Company K.S.C;

"KPC" means Kuwait Petroleum Corporation;

"KPC Comfort Letter" means the letter so entitled dated 20 May 1996 from KPC 
to PIC and the Intercreditor Agent;

"Kuwait Law Assignment" means the Arabic language assignment dated or to be 
dated on or prior to the Effective Date between the Company, EMC, the Lessor 
and the Debt Trustee;

"Kuwait Law Mortgage" means the Arabic language agreement dated or to be dated 
on or prior to the Effective Date between, among others, the Company, EMC, the 
Sponsors, the Lessor and the Project Assets Security Trustee;

"Kuwait Law Security Agreements" means the Kuwait Law Mortgage and the Kuwait 
Law Assignment;

"Land Licence" means the Contract for the Allotment of a Plot of Land between 
the Company and the Directorate General of Shuaiba Area;

"Lease" means the Lease Agreement of even date herewith between the Company 
and the Lessor;

"Lease Assets" means the Project Assets acquired or to be acquired by the 
Lessor pursuant to the Sale Agreement;

"Lease Facility" means the lease facility made available by the Lessor 
pursuant to the Sale Agreement and the Lease;

"Lease Outstandings" means the aggregate of the Reimbursement Elements of all 
future Lease Payments (or, prior to such Reimbursement Elements being 
ascertained, the aggregate of all Drawings under the Lease and all reductions 
in the Available Lease Facility pursuant to Clause 2.5 of the Common Terms 
Agreement, less the sum of all rentals paid to the Lessor pursuant to 
Clause 5.5 of the Common Terms Agreement, if applicable);

"Lease Payments" means rental payments in respect of the leasing under the 
Lease;

"Lease Payments Adjustment" means the difference between:

(i)   the aggregate of the Reimbursement Elements of all Lease Payments paid 
before the Actual Lease Drawings shall have been ascertained; and

(ii)  what would have been the aggregate of the Reimbursement Elements of all 
such Lease Payments had the Imputed Lease Drawings equalled the Actual 
Lease Drawings;

"Lessor" means Kuwait Finance House K.S.C. or such other person party to the 
Lease from time to time as lessor and/or the party to the Sale Agreement from 
time to time as purchaser which shall have executed a CTA Deed of Accession;

"Letters of Credit" means:

(i)   the standby letters of credit which the Sponsors are required to provide 
pursuant to Clause 9.1 of the Sponsor Support Agreement;

(ii)  any standby letter of credit which UCC provides under Clause 4.2 of the 
Completion Guarantee; and

(iii) any letter of credit which the Sponsors provide under the provisions of 
Section 5 of Part 1 of the Fourth Schedule to the Common Terms 
Agreement;

and/or any replacement of any of them satisfying the requirements of the 
relevant provisions of such Agreements;

"LIBOR" for any period and any amount means the rate per annum determined by 
the Intercreditor Agent which is the arithmetic mean (rounded upwards, if not 
already such a multiple, to the nearest whole multiple of one-sixteenth of one 
per cent.) of the Screen Rates for such period, at or about 11.00 a.m. (London 
time) on the Quotation Date for such period;

"Licences" means the Land Licence, the Industrial Licence and the Commercial 
Licence of the Company;

"Liquid Air Contract" means the purchase order dated 8 June 1996 and accepted 
on 28 June 1996 (as amended by a charge order dated 28 June 1996) between 
Fluor Daniel Intercontinental Inc. (as agent for the Company) and Liquid Air 
Engineering Corporation, for the purchase of an air separation unit;

"LLDPE" means linear low density polyethylene;

"Loan Facility" means the Term Loan Facility, the Working Capital Facility or 
any New Loan Facility;

"Loan Life Cover Ratio" at any time means the ratio of:

(i)   the figure referred to in Clause 15.2(v)(d) of the Common Terms 
Agreement (present value of future cash flows); to

(ii)  the figure referred to in Clause 15.2(v)(b) of the Common Terms 
Agreement (current Term Outstandings),

in each case derived from the then current Annual Bank Case;

"LPG Plant" means KNPC's liquid petroleum gas plant located in Shuaiba, 
Kuwait;

"Majority Term Banks" means, subject to Clause 57 of the Common Terms 
Agreement, Term Banks which are owed at least 66_% of both the Tranche A Term 
Outstandings and the Tranche B Term Outstandings, for which purpose:

(i)   the "Tranche A Term Outstandings" shall mean the sum of:

      (a)   Tranche A of the Term Loan;

      (b)   one half of each Bank's Outstandings under any New Term Facility; 
and

      (c)   one half of the Lease Outstandings; and

(ii)  the "Tranche B Term Outstandings" shall mean the sum of:

      (a)  Tranche B of the Term Loan;

      (b)  one half of each Bank's Outstandings under any New Term Facility; 
and

      (c)  one half of the Lease Outstandings,

Provided that if on any particular issue which is required to be determined or 
approved by the Majority Term Banks, Term Banks holding at least 66_% of the 
Tranche A Term Outstandings vote differently from Term Banks holding at least 
66_% of the Tranche B Term Outstandings, the Majority Term Banks shall be 
those owed more than 50% of all Term Outstandings and Provided further that if 
there are no Term Outstandings at the relevant time, references above to sums 
owed to Term Banks shall be construed as references to the maximum commitments 
of the Term Banks to advance or otherwise pay monies to the Company under the 
Term Facilities (unless all Term Outstandings shall have been discharged, in 
which case they shall be taken to be at their levels immediately prior to 
their discharge);

"Majority Term Loan Banks" means, subject to Clause 57 of the Common Terms 
Agreement, Term Loan Banks which are owed at least 66_% of both the Tranche A 
and Tranche B of the Term Loan, Provided that if on any particular issue which 
is required to be determined or approved by the Majority Term Loan Banks, Term 
Loan Banks holding at least 66_% of Tranche A of the Term Loan vote 
differently from Term Loan Banks holding at least 66_% of Tranche B of the 
Term Loan, the Majority Term Loan Banks shall be those owed more than 50% of 
the Term Loan and Provided further that if there are is no Term Loan 
outstanding at the relevant time, references above to sums owed to Term Loan 
Banks shall be construed as references to the maximum commitments of the Term 
Loan Banks to advance or otherwise pay monies to the Company under the Term 
Loan Facility (unless all commitments shall have been discharged, in which 
case they shall be taken to be at the levels immediately prior to their 
discharge);

"Majority Working Capital Banks" means Working Capital Banks which are owed at 
least 66_% of the Working Capital Loan Provided that if there is no Working 
Capital Loan outstanding at the relevant time, the reference above to sums 
owed to Working Capital Banks shall be construed as a reference to the maximum 
commitments of the Working Capital Banks to advance monies to the Company 
under the Working Capital Facility (unless all commitments shall have been 
discharged, in which case they shall be deemed to be at their levels 
immediately prior to their discharge);

"Major Plant Overhaul" means an overhaul of each of the Units and other 
elements of the Plant which, in accordance with the maintenance cycle for the 
Plant, takes place approximately three years after commencement of production 
and at three yearly intervals thereafter;

"Management Contracts" means:

(i)   the Kuwait Management Contract - Inside Kuwait Services (Contract No. 
0511-872416) dated as of 1 July 1994 between Fluor International Limited 
and the Sponsors;

(ii)  the Kuwait Management Contract - Outside Kuwait Services (Contract No. 
0511-872417) dated as of 1 July 1994 between Fluor Daniel 
Intercontinental, Inc. and the Sponsors;

(iii) the Co-ordination Letter (re: Inside and Outside Kuwait Management 
Contracts) dated as of 1 July 1994 between Fluor International Limited, 
Fluor Daniel Intercontinental, Inc. and the Sponsors; and

(iv)  the Parent Company Guarantee (re: Inside and Outside Kuwait Management 
Contracts) dated 1 July 1994 between Fluor Daniel, Inc. and the 
Sponsors,

each as assigned by the Sponsors to the Company pursuant to the Assignment and 
Assumption Agreements;

"Market Consultant" means Chem Systems Limited or such other firm or company 
as the Majority Term Banks may approve from time to time or, as the context 
may require, such Alternate Consultant as, in accordance with Clause 19.2 of 
the Sponsor Support Agreement, is agreed upon to provide a Pricing Forecast 
Report for the purposes of the preparation of  a particular Annual Bank Case;

"Market Consultancy Services Agreement" means the agreement dated or to be 
dated on or prior to the Effective Date between the Market Consultant, the 
Company, the Sponsors, the Intercreditor Agent and the Modelling Bank;

"Marketing Agreements" means the PE Sales Support Agreement, the Polyethylene 
Marketing Agreement, the Ethylene Glycol Marketing Agreement, and the Ethylene 
Glycol Marketing Services Agreement;

"Mark-up" means, in connection with the Lease and at any time, such amount as 
shall be calculated in accordance with the letter of even date herewith from 
the Lessor to the Intercreditor Agent and the  Company;

"Master Accounts"  means each of the accounts in London so designated (each by 
reference to a particular currency) in the name of the Company and held with 
the Account Bank;

"Material Loss" in relation to the Plant or any part thereof means any loss, 
damage or destruction where the estimated cost of repair or restoration 
exceeds $100,000,000;

"Maximum Drawing Amount" in respect of any Drawing Period means the amount 
which the Technical Consultant considers, on the basis of information provided 
to it by the Company which it shall have considered adequate for the purpose, 
is equal to the amount of expenditure (including interest accruing on the Term 
Loan Facility) falling within the Construction Budget which the Company will 
make during such Drawing Period, net of the balance on the Disbursements 
Account at the commencement of such Drawing Period;

"Mechanical Completion Test" means the test specified in Part 1 of the Seventh 
Schedule to the Common Terms Agreement;

"Modelling Bank" means JP Morgan & Co. as modelling bank or such other person 
appointed as such from time to time in accordance with Clause 45.2 of the 
Common Terms Agreement;

"Net Debt" at any time means Term Outstandings less an amount equal to the 
lower of:

(i)   the maximum aggregate amount of Debt Service Payments (ignoring for 
these purposes Debt Service Payments in respect of the Working Capital 
Facility) for any future six month period as shown in the then current 
Annual Bank Case; and

(ii)  the sum of:

      (a)   the credit balance on the Debt Service Reserve Fund; 

      (b)   the credit balance on the Excess Cash Flow Fund; and

      (c)   the undrawn balance of Additional Shareholder Contributions to the 
extent covered by the Letters of Credit,

as determined by time to time by the Company and confirmed by the Modelling 
Bank;

"Net Swap Receivables" means net swap payments receivable by the Company from 
time to time under Approved Hedging Agreements;

"Net Swap Payments"  means net swap payments payable by the Company from time 
to time under Approved Hedging Agreement;

"Net Swap Receivables Account" means the account in London so designated in 
the name of the Company and held with the Account Bank;

"Net Worth" of any company means its share capital and consolidated net 
reserves, as those terms are interpreted in accordance with International 
Accounting Standards;

"New Agent" means any financial institution which accedes as such to the 
Common Terms Agreement and the Security Trust Agreement;

"New Facility" means any New Secured Facility or any New Unsecured Facility;

"New Loan Facility" means any New Facility pursuant to which a loan facility 
is provided to the Company;

"New Secured Facility" means any Approved Hedging Agreement or any other 
facility which would otherwise have been a New Unsecured Facility but for the 
fact that (i) the Majority Term Banks have agreed that the relevant financiers 
or hedging counterparty may share in the Security, (ii) a Designating 
Instrument has been duly executed and delivered in respect thereof pursuant to 
Clause 8 of the Security Trust Agreement and (iii) such financiers or such 
hedging counterparty have executed an STA Deed of Accession and thereby become 
party to the Security Trust Agreement as Primary Beneficiaries;

"New Term Facility" means any New Loan Facility other than a working capital 
facility;

"New Unsecured Facility" means any facility (including a hedge facility and an 
unsecured Approved FX/LC Facility but excluding any New Secured Facility) in 
favour of the Company approved by the Majority Term Banks, provided each of 
the financiers or the hedging counterparty thereunder shall have executed a 
CTA Deed of Accession and thereby become party to the Common Terms Agreement 
as a Bank;

"New York Accounts" means the Dollar Operations Account and the Disbursement 
Account;

"New York Law Security Agreement" means the agreement entitled "New York 
Assignment and Security Agreement" dated of even date herewith between the 
Company, EMC and the Debt Trustee;

"Novation Date" shall have the meaning ascribed thereto in Clause 26.3(iii) of 
the Sponsor Support Agreement;

"Obligors" means Boubyan, the Company, EMC, PIC, UCC and (for the purposes 
only of the Security Trust Agreement and until the Primary Beneficiary Release 
Date) the Lessor;

"Operating Expenses" means all costs and expenses (other than Subordinated 
Liabilities) incurred or to be incurred in operating and maintaining the Plant 
and the Site and the production, transportation and sale of Product and all 
treasury and other legitimate business expenses of the Company relating to the 
Project (and not, for the avoidance of doubt, relating to the Company's 
obligations under the Polypropylene Agreements), including taxes payable by 
the Company, mandatory contributions to KFAS, the fees payable by the Company 
to the Political Risk Indemnitors under the Political Risk Indemnity, all 
payments payable under Article 4.1(b) of the Contingent O&M Services Agreement 
and all fees payable to, or indemnities given to any of the Function Banks in 
respect of fees payable to, any of the Consultants;

"Operations Accounts" means the Dollar Operations Account, the Dinar 
Operations Account and the Dinar Petty Cash Account;

"Operations Event of Force Majeure" means (i) an Event of Force Majeure under 
any of the Project Documents (other than the Feedstock Supply Agreement), or 
any other event beyond the reasonable control of any Obligor (other than an FS 
Supported Interruption) which results in the Plant being unable to produce 
substantially all of the Product assumed by the current Annual Bank Case to be 
produced for a period exceeding seven days or (ii) any SVG Transportation 
Force Majeure Event which prevents the Company being able to distribute 
substantially all its Product to the relevant markets;

"Original Financial Statements" means:

(i)   in relation to PIC, its audited financial statements for the year ended 
30 June 1995 ; and

(ii)  in relation to UCC, its audited financial statements for the year ended 
31 December 1995;

"Outstandings" in relation to any Loan Facility means the aggregate principal 
amount outstanding thereunder (which, for the avoidance of doubt, may include 
capitalised interest) or, generally, the Lease Outstandings and the 
Outstandings under all Loan Facilities together;

"Payment Dates" for the purposes of the Lease and the Term Loan means the 
dates established as such under Clause 29 of the Common Terms Agreement;

"PE" means polyethylene;

"PE Applicable Amount" in relation to any Relevant PE Period means the 
aggregate sums (if any) received by the Company (i) in respect of sales of PE, 
other than by way of True Sales, during such Relevant PE Period and (ii) by 
way of insurance proceeds in respect of PE lost or destroyed which shall have 
been contracted to be sold;

"PE Licence Agreement" means the UNIPOL Polyethylene Technology Agreement 
dated 28 May, 1996 between UCC and the Company;

"Permitted Investment" means:

(i)   a certificate of deposit, promissory note or other debt security, 
denominated in dollars and for which a recognised market exists and for 
which quotations are readily available, which either:

      (a)   is issued or guaranteed by the Government of the United States of 
America; or

      (b)   has a rating of not less than:

            (i)   in the case of a short term security, A1 by Standard & 
Poor's Corporation or P1 if granted by Moody's Investors 
Service, Inc.; or

            (ii)  in the case of a long term security, AA by Standard & Poor's 
Corporation or Aa2 by Moody's Investors Service, Inc.;

(ii)  a deposit in dollars callable on not more than twelve (12) months' 
notice or otherwise maturing within twelve (12) months placed with the 
London branch of a financial institution authorised by the Bank of 
England some or all of the issued securities of which have a rating of 
not less than:

      (a)   in the case of its short term securities, A1 by Standard & Poor's 
Corporation or P1 by Moody's Investors Service, Inc.; and

      (b)   in the case of its long term securities, A+ by Standard & Poor's 
Corporation or A1 by Moody's Investors Service; Inc.;

(iii) a certificate of deposit, promissory  note or other debt security, 
denominated in dollars maturing within twelve (12) months, issued by a 
financial institution authorised by the Bank of England which has a 
rating of not less than:

      (a)   in the case of its short term securities, A1 by Standard & Poor's 
Corporation or P1 by Moody's Investors Service, Inc.; and

      (b)   in the case of its long term securities, A+ by Standard & Poor's 
Corporation or A1 by Moody's Investors Service; Inc.; or

(iv)  such other debt instrument or deposit as may be approved by the Approval 
Group;

Provided that the above-mentioned instruments shall only be capable of being 
Permitted Investments if capable of being valued in accordance with Clause 
16.9 of the Common Terms Agreement;

"Permitted Investment Conditions" means

(i)   all Permitted Investments will be registered or held in the name of the 
Debt Trustee (or in the name of an Approved Custodian for account of the 
Debt Trustee) and the Company will ensure that any person with whom any 
investment is made places that investment in the name of the Debt 
Trustee (or in the name of an Approved Custodian for account of the Debt 
Trustee);

(ii)  the Company will at all time procure that there are maintained a prudent 
spread of Permitted Investments (and will, if so requested by the 
Intercreditor Agent, demonstrate the same to its reasonable 
satisfaction), will match the maturities of the Permitted Investments 
made out of monies standing to the credit of each relevant Account and 
shall liquidate (or procure that there are liquidated) Permitted 
Investments to the extent necessary, for the purpose of payment of any 
amount due under the Finance Documents;

(iii) all documents of title or other documentary evidence of ownership with 
respect to Permitted Investments made out of any Account will be held in 
the custody of the Account Bank for the Debt Trustee and, if any such 
document or other evidence comes into the possession or control of the 
Company, it shall procure that the same is to be promptly delivered to 
the Account Bank on behalf of the Debt Trustee; and

(iv)  all Permitted Investments held in Cedel shall be held through the 
Account Bank in its capacity as an Approved Custodian;

"Permitted Investments Security Agreement" means the document so entitled 
dated of even date hereof between the Company, EMC, the Debt Trustee and the 
Account Bank as custodian;

"Permitted Lien" means 

(i)   liens arising as a matter of law in the ordinary course of such person's 
business and for the purposes thereof; or

(ii)  encumbrances as contemplated or created by the Finance Documents; or

(iii) pledges of goods, the related documents of title and/or other related 
documents arising or created in the ordinary course of such person's 
business as security for indebtedness to a bank or financial institution 
directly relating to the goods or documents on or over which that pledge 
exists; or

(iv)  security arising out of title retention provisions in a supplier's 
standard conditions of supply of goods acquired by such person in the 
ordinary course of its business; or

(v)   any other encumbrance created or outstanding with the prior consent of 
the Majority Term Banks;

"Personnel Services Agreements"  means:

(i)   the Personnel Services Agreement of even date herewith between the 
Company and PlC; 

(ii)  the Personnel Services Agreement of even date herewith between the 
Company and UCC;

(iii) the Secondment Agreement of even date herewith between the Company and 
PIC; and

(iv)  the Secondment Agreement of even date herewith between the Company and 
UCC;

"PE Sales Support Agreement" means the UCC PE Support Agreement dated 28 May, 
1996 between UCC and the Company;

"PE Sales Volume Shortfall" in relation to any Relevant PE Period means the 
Guaranteed PE Sales Volume for such Relevant PE Period less (but not so as to 
produce a negative figure) the Actual PE Sales Volume for such Relevant PE 
Period;

"PE Start-up" means Start-up as defined in the PE Licence Agreement;

"PE Units" means the two process units to be constructed as part of the 
Project designed to produce together PE at the rate of at least 450,000 tonnes 
per annum;

"PIC" means Petrochemical Industries Company, K.S.C.;

"PIC Charged EMC Securities" means (i) all rights, title and interest of PIC 
in and to the PIC EMC Shares (and all dividends, distributions, interest or 
other monies paid or payable thereon), (ii) all stocks, shares, warrants, 
rights, monies or property (and the dividends, distributions, interest or 
other monies paid or payable thereon) accruing or acquired at any time and 
from time to time by way of redemption, purchase, bonus, preference, option or 
otherwise to or in respect of or derived from all or any of the PIC EMC Shares 
or any derivative thereof and (iii) any cash or other consideration for the 
time being forming part of the net proceeds of sale of any of the above 
mentioned property;

"PIC Current Ratio" means the ratio of PIC's consolidated current assets to 
its consolidated current liabilities, as those terms are interpreted in 
accordance with generally accepted international accounting standards;

"PIC EMC Shares" means the shares in EMC details of which are set out in the 
First Schedule to the PIC EMC Share Pledge Agreement;

"PIC EMC Share Pledge Agreement" means the Deposit and Pledge Agreement of 
even date herewith between PIC and the Debt Trustee relating to the PIC EMC 
Shares;

"PIC Leverage Ratio" means the ratio of all PIC's consolidated liabilities 
(including all contingent liabilities whether or not noted on any financial 
statements of PIC and also, for this purpose, its commitments  to make 
Additional Shareholder Contributions) to its Net Worth;

"PIC Subordinated Loan Agreement" means the $220,000,000 loan agreement dated 
30 April, 1996 between PIC and the Company;

"Plant" means the Units and the other Project Assets and facilities on the 
Site designed for the purposes of the Project;

"Plant Completion Date" means the first date on which all the Plant Completion 
Tests shall have been satisfied (provided that (i) the Company shall have no 
more than five opportunities to satisfy any of the Plant Completion Tests and 
(ii) the Plant Completion Date shall not be capable of occurring after 30 
September, 2000);

"Plant Completion Tests" means the Mechanical Completion Test, the Unit 
Performance Tests and the Reliability Test;

"Political Risk Agent" means National Bank of Kuwait S.A.K. in its capacity as 
administrative agent under the Political Risk Indemnity;

"Political Risk Indemnity" means the agreement so entitled of even date 
herewith between UCC, the Company, the Political Risk Agent and certain 
financial institutions;

"Political Risk Indemnitors" means the financial institutions which are party 
to the Political Risk Indemnity as indemnitors of UCC;

"Polyethylene Marketing Agreement" means the agreement so entitled dated as of 
28 May  1996 between the Company and EMC;

"Polypropylene Agreements" means:

(i)   the Equate Material Supply Agreement dated on or about the Effective 
Date between the Company and PIC; and

(ii)  the Operation and Maintenance Services Agreement dated on or about the 
Effective Date between the Company and PIC;

"Polypropylene Operations Account" means an account in  the name of the 
Company and held with National Bank of Kuwait S.A.K. for the purpose of 
holding advance payments from PIC in respect of the Company's services under 
any Polypropylene Agreement (or such other account as the Company may from 
time to time open and maintain for the same purpose provided that the Company 
has notified the Intercreditor Agent thereof);

"Potential Event of Default" means any event which will (assuming no 
intervening remedy or waiver), with the passage of time and/or the giving of 
notice and/or the making of any required determination, become an Event of 
Default;

"Pricing Forecast Report" means each project pricing forecast provided or, as 
the case may be, to be provided by the Market Consultant or an Alternate 
Market Consultant, containing relevant economic assumptions in relation to the 
Project and the sale of Product and to be utilised by the Company in preparing 
Annual Bank Cases in accordance with Clause 15 of the Common Terms Agreement;

"Primary Beneficiaries" means any of the Agents, the Trustees, the Arrangers, 
the Underwriters, the Banks, the Function Banks, the Approved Hedging 
Counterparties and any other party providing financial accommodation under a 
New Secured Facility;

"Primary Beneficiary Release Date" means the date upon which the Secured 
Obligations owed to the Primary Beneficiaries have been fully and finally 
discharged and none of the Primary Beneficiaries is under any commitment, 
obligation or liability (whether actual or contingent) to make advances or 
provide other financial accommodation to the Company;

"Primary Trustees" means the Debt Trustee and the Project Assets Security 
Trustee;

"Principal Documents" means the Finance Documents and the Principal Project 
Documents;

"Principal Markets" means Europe, the Far East (Taiwan and Japan) and the 
Middle East;

"Principal Products" means:

(i)   in the case of EG, fibre grade monoethylene glycol and diethylene 
glycol; and

(ii)  in the case of PE, film grade LLPDE and injection moulding grade HDPE;

"Principal Project Documents" means:

(i)     the EPC Contracts;
(ii)    the Management Contracts;
(iii)   the Marketing Agreements;
(iv)    the Technology Agreements;
(v)     the Feedstock Supply Agreement;
(vi)    the Catalyst Supply Agreements;
(vii)   the Licences;
(viii)  the Subordinated Loan Agreements;
(ix)    the Utility Agreements;
(x)     the Personnel Services Agreements;
(xi)    the Joint Venture Agreement;
(xii)   the Assignment and Assumption Agreements;
(xiii)  the Political Risk Indemnity;
(xiv)   any Polypropylene Agreements;
(xv)    the Eligible Sponsor Sale Agreements (if any);
(xvi)   the Liquid Air Contract;
(xvii)  all sales agency contracts relating to the sale of Product; and
(xviii) each contract between the Company and any other person under which 
such other person is to supply to the Company goods and/or services 
having an approximate contract value in excess of $10,000,000;

"Priority Distributions Account Credits" means payments into the Distributions 
Account pursuant to Clause 17.1(vi) of the Common Terms Agreement;

"Proceeds" means all receipts or recoveries by either Trustee (or by any of 
the Obligors and paid over to either Trustee) pursuant to, or upon enforcement 
of, any of the Rights and all other monies which are by the terms of any of 
the Finance Documents to be applied in accordance with Clause 3.2 of the 
Security Trust Agreement, (excluding any such sums which have been paid by the 
Debt Trustee to the credit of any suspense account and which are for the time 
being standing to the credit of such account, but including any sums withdrawn 
from any such account by the Debt Trustee for the purpose of further applying 
the same in accordance with Clause 3.2 of the Security Trust Agreement), after 
deducting (to the extent not already deducted or retained prior to such 
receipt or recovery by either Trustee):

(i)   all sums which are by law or contract payable to any Receiver;

(ii)  all sums which such Trustee is required by the terms of any of the 
Security Documents to pay to any other person before any such receipts 
or recoveries are to be available to any of the Beneficiaries and/or 
discharging any of the obligations secured thereby; and

(iii) all sums which such Trustee is by law required to pay to any person in 
priority to the Beneficiaries;

"Proceeds Account" means any account in London in the name of the Debt 
Trustee, the Project Assets Security Trustee or the Residual Trustee opened by 
it for the purposes of the Security Trust Agreement;

"Product" means all commercially saleable petrochemical products produced at 
the Plant;

"Profit Element" in relation to a Lease Payment means (subject to Clause 2.5 
of the Lease) an amount equal to the Profit Element Reference Amount 
multiplied by the sum of LIBOR for the period covered by such Lease Payment 
and the Applicable Margin (expressed as a percentage rate per annum), 
multiplied further by the number of days in such period and divided by 360;

"Profit Element Reference Amount" means the sum of (i) all Drawings under the 
Sale Agreement and (ii) all reductions of the Available Lease Facility under 
Clause 2.5 of the Common Terms Agreement less the aggregate (a) all payments 
of the Reimbursement Elements of all Lease Payments under the Lease and (b) of 
all prepayments of the Reimbursement Elements of the Lease Payments under 
Clauses 4 and 5 of the Common Terms Agreement (or, if the Actual Lease 
Drawings (and hence the final amount of the Reimbursement Elements of the 
Lease Payments) have yet to be calculated, all amounts paid to the Lessor 
which in accordance with Clause 5.7 of the Common Terms Agreement constitute 
rentals);

"Project" means the design, financing, construction and operation of an 
olefins complex in Shuaiba, Kuwait with a production capability of 650,000 
tonnes per year of ethylene, 450,000 tonnes per year of PE and 340,000 tonnes 
per year of EG and the sale of Product produced thereby;

"Project Assets" means all physical assets acquired and to be acquired by the 
Company for the purposes of the Project, whether by purchase or lease;

"Project Assets Security Trustee" means National Bank of Kuwait S.A.K. as 
project assets security trustee or such other person appointed as such from 
time to time under the Security Trust Agreement;

"Project Capitalisation" at any time means the aggregate of:

(i)   Total Debt;

(ii)  Initial Shareholder Contributions and Extraordinary Shareholder 
Contributions (as reduced by repayments of Subordinated Liabilities and any 
permitted redemptions of the equity element of the Initial Shareholder 
Contributions or any Extraordinary Shareholder Contributions); and

(iii) any net positive shareholder reserves in the Company (as demonstrated by 
the most recently delivered financial statements delivered by the Company),

in each case as at such time;

"Project Costs" means the aggregate of:

(i)   all capital costs (determined in accordance with International 
Accounting Standards) of whatever nature incurred by the Company in 
connection with the Project prior to the first date on which a Sponsor 
is released from its obligations under Clauses 2 and 3 of the Completion 
Guarantee, including the full capital cost of all Project Assets 
acquired under finance leases;

(ii)  to the extent not included in (i) above, and to the extent capitalised 
by the Company, the landed costs of Project-related equipment and 
facilities, construction and installation expenditure (including re-
work, engineering, testing and pre-production expenses), payments under 
Approved Hedging Agreements (taken as a positive sum for Net Swap 
Payments and as a negative sum for Net Swap Receivables), interest, 
duties, taxes, management and commitment fees and other interim 
expenditure, in each case incurred by the Company prior to the first 
date on which a Sponsor is released from its obligations under Clauses 2 
and 3 of the Completion Guarantee, 

(iii) to the extent not included in (i) or (ii) above, the capitalised cost to 
the Company of the Technology Licensing, such cost being $220,000,000; 
and

(iv)  (whether or not capitalised by the Company) all preliminary Operating 
Expenses related to the Project incurred prior to the first date on 
which a Sponsor is released from its obligations under Clauses 2 and 3 
of the Completion Guarantee, to the extent provided for in the 
Construction Budget

Provided that

      (a)   the cost referred to in (iii) above shall be treated as incurred 
after all other Project Costs for the purposes of Clause 2.2(v) of the 
Common Terms Agreement and Clause 5(i) of the Sponsor Support Agreement; 
and

      (b)   Project Costs shall not include any costs relating to the 
provision of materials, utilities, and/or services under the 
Polypropylene Agreements;

"Project Documents" means all the Principal Project Documents and all other 
agreements (other than any of the Finance Documents) whereunder any person is 
to provide services or supply goods for the purposes of the Project or to 
market Product produced by the Project on behalf of the Company or EMC;

"Property Damage Insurance Account" means the account in London so designated 
in the name of the Company and held with the Account Bank;

"Purchaser" means Kuwait Finance House K.S.C. or such other person party to 
the Sale Agreement from time to time as purchaser;

"Quotation Date" means, in relation to any date on which an interest rate is 
to be determined, the day on which quotation would ordinarily be given by 
prime banks in the relevant market for deposits in the relevant currency for 
delivery on the first day of that period Provided that, if for such period 
quotations would ordinarily be given on more than one date, it shall be the 
last of those dates;

"Receiver" means a receiver and/or manager, administrative receiver, trustee 
or similar officer appointed by a Trustee pursuant to any of the Security 
Documents or by any court for the purposes of realising, getting in or 
disposing of any of the assets or revenues the subject of any of the Security;

"Recognised PE Sales" means sales of PE by UCC into the UCC Territory 
satisfying in whole or in part its obligations under the PE Sales Support 
Agreement, during the period of twelve consecutive months (the "First PE 
Period") immediately preceding a twelve month period (the "Second PE Period") 
in respect of which either of the following conditions shall be satisfied, 
namely:

(i)   EMC shall have entered into an agreement with an independent third party 
whereby such third party shall have achieved sales of PE in the UCC 
Territory during the Second PE Period of an aggregate volume of PE at 
least equal to that sold by UCC in the UCC Territory during the First PE 
period; or

(ii)  EMC shall, through its own sales organisation, have achieved sales of PE 
in the UCC Territory during the Second PE Period of an aggregate volume 
of PE at least equal to that sold by UCC in the UCC Territory during the 
First PE Period;

"Reference Banks" means (for the purposes of determining LIBOR) the principal 
London offices of Citibank, N.A., The Chase Manhattan Bank, National Bank of 
Kuwait S.A.K. and Gulf International Bank B.S.C. and (for the purposes of 
determining KIBOR) the principal Kuwait City offices of National Bank of 
Kuwait S.A.K., The Gulf Bank K.S.C. and Burgan Bank S.A.K.;

"Regional Accounts" means:

(i)   each account opened by the Company from time to time and designated by 
the Company as a Regional Account : 

      (a)   over which effective security has been granted and perfected by 
the Company and EMC in favour of the Debt Trustee (for and on 
behalf of the Primary Beneficiaries), and acknowledged by the 
account bank, on terms and conditions approved by the Approval 
Group;

      (b)   in respect of which the Debt Trustee (for and on behalf of the 
Primary Beneficiaries) has received legal opinions in form and 
substance satisfactory to the Approval Group from counsel in all 
relevant jurisdictions confirming that effective security has been 
granted over such account;

      (c)   in respect of which the proposed regional account bank, the 
Company and the Approval Group have reached agreement as to:

            (1)   the timing and manner of the clearing of such account, once 
a month, to one of the Master Accounts; and

            (2)   the procedures for the settlement from such account of 
forward foreign exchange contracts for the purchase of 
dollars or dinars; and

      (d)   in respect of which the proposed regional account bank has agreed 
that it shall only permit withdrawals by the Company as referred 
to in (c) above or otherwise with the approval of the 
Intercreditor Agent or, following its receipt of notification by 
the Debt Trustee of the occurrence of an Event of Default, upon 
the instruction of the Debt Trustee,

unless, in any case, the Intercreditor Agent (acting reasonably) or (following 
the occurrence of an Event of Default which has not been waived by the 
Majority Term Banks or remedied) the Debt Trustee notifies the Company that 
such account may no longer be used as a Regional Account;

"Regional Account Bank" means a bank with which a Regional Account is held;

"Reimbursement Element" of any Lease Payment means an amount equal to the 
Tranche A Reimbursement Element and the Tranche B Reimbursement Element 
thereof;

"Relevant Approval Body" means:

      (i)   (at all times prior to the Primary Beneficiary Release Date) the 
Majority Term Banks (or, in circumstances where the Political Risk 
Indemnitors in their capacity as Term Banks are, in accordance 
with Clause 57 of the Common Terms Agreement, precluded from 
voting on Relevant Decisions (as defined in Clause 57 of the 
Common Terms Agreement), the Non-Political Risk Majority (as 
defined in that Clause); 

      (ii)  (at all times after the Primary Beneficiary Release Date but prior 
to the Intermediate Release Date) the Political Risk Agent; and

      (iii) (at all times after the Intermediate Release Date but prior to the 
Final Release Date) the Residual Trustee;

"Relevant EG Period" means a period specified in Column 1 of the Second 
Schedule to the Sales Volume Guarantee;

"Relevant PE Period" means a period specified in Column 1 of the First 
Schedule to the Sales Volume Guarantee;

"Reliability Test" means the process specified in Part 3 of the Seventh 
Schedule to the Common Terms Agreement;

"Residual Trustee" means EMC in its capacity as residual trustee for the 
Tertiary Beneficiaries under the Security Trust Agreement;

"Respective Percentage" means, in the case of PIC, 55 per cent. and, in the 
case of UCC, 45 per cent.;

"Rights" means the Security, all Contractual Rights, all rights vested by law 
in the Trustees by virtue of their holding the Security and all rights to make 
demands, bring proceedings or take any other action in respect thereof;

"Royalty Payment" means any payment of royalties or technology fees under any 
of the Technology Agreements;

"Sale Agreement" means the agreement so entitled dated of even date herewith 
between the Company and the Lessor;
"Sales Volume Guarantee" means the agreement so entitled dated of even date 
herewith between  UCC, PIC, the Company, the Debt Trustee and the 
Intercreditor Agent;

"Screen Rates" for the purposes of the definition of "LIBOR" means:

(i)   the page LIBO of the Reuter Monitor Money Rates Service for the display 
of London Interbank Offered Rates for dollars (or, if such page or such 
service shall cease to be available, such other page or such other 
service (as the case may be) for the purpose of displaying London 
Interbank Offered Rates for dollars as the Intercreditor Agent, after 
consultation with the Term Banks and the Company, shall select); or

(ii)  if less than two quotations for the relevant period are displayed and 
the Intercreditor Agent has not selected an alternative service on which 
two or more such quotations are displayed the rates (as notified to the 
Intercreditor Agent) at which each of the Reference Banks was offering 
to prime banks in the London Interbank Market deposits in dollars and 
for such period at or about 11.00 a.m. (London time) on the Quotation 
Date for such period;

"Second Bridge Facility" means the $200,000,000 bridge facility made available 
to the Company pursuant to a facility agreement dated 19 August 1996 between 
the Company as borrower, the Bridge Agent and the financial institutions named 
therein;

"Second Bridge Lenders" means the lenders under the Second Bridge Facility;

"Secondary Beneficiaries" means, with effect from the Primary Beneficiary 
Release Date and at all times thereafter until the Intermediate Release Date, 
PIC and the Political Risk Indemnitors;

"Second Deed of Transfer" means the deed of transfer dated of even date 
herewith between the Project Assets Security Trustee and the Residual Trustee 
pursuant to which all the rights, title and interest of the Project Assets 
Security Trustee in the Trust Property (if any) will, subject to the terms 
thereof, be transferred to the Residual Trustee on the Intermediate Release 
Date;

"Secured Obligations" means (i) all of the present and future, and actual and 
contingent, obligations of the Company under the Finance Documents owed to the 
Primary Beneficiaries and (ii) all such obligations owed by the Company to 
PIC, UCC and the Political Risk Indemnitors (to the extent that there are any) 
arising as a result of any payments made by the Sponsors to the Primary 
Beneficiaries under the Completion Guarantee or of any payments made by the 
Political Risk Indemnitors to UCC under the Political Risk Indemnity whether 
by way of set-off or otherwise;

"Security" means all encumbrances constituted or created by the Security 
Documents;

"Security Documents" means each of the following:

(i)    the Kuwait Law Security Agreements;
(ii)   the English Law Security Agreement;
(iii)  the New York Law Security Agreement;
(iv)   the Deed of Subordination;
(v)    any security agreement entered into from time to time in respect of 
Regional Accounts or Collection Accounts;
(vi)   the UCC EMC Share Pledge Agreement;
(vii)  the PIC EMC Share Pledge Agreement;
(viii) the Permitted Investments Security Agreement;
(ix)   the Completion Guarantee;
(x)    the Bahrain account assignment agreement of even date herewith between 
EMC and the Debt Trustee;
(xi)   any other agreement pursuant to which security is granted to either 
Primary Trustee from time to time to secure the Secured Obligations,

and all notices and acknowledgements required to be executed or delivered in 
connection therewith;

"Security Period" means the period commencing on the date of this Agreement 
and terminating on the Final Release Date;

"Security Trust Agreement" means the agreement so entitled dated of even date 
herewith between the Company, EMC, the Sponsors, the Trustees, the Agents, the 
Political Risk Agent, the Lessor, the Term Loan Banks, the Working Capital 
Banks and the Political Risk Indemnitors;

"Senior Creditors" means:

(i)   up until and including the Primary Beneficiary Release Date, the Primary 
Beneficiaries; and

(ii)  after the Primary Beneficiary Release Date until and including the 
Intermediate Release Date, the Political Risk Indemnitors and (to the 
extent that it shall be owed Secured Obligations by virtue of payments 
by it under the Completion Guarantee), PIC; 

"Senior Liabilities" means (a) (up until and including the Primary Beneficiary 
Release Date) all Secured Obligations owed to the Primary Beneficiaries and 
(b) (after the Primary Beneficiary Release Date) any amounts owed by the 
Company to the Sponsors and/or the Political Risk Indemnitors arising as a 
result of any payments made by the Sponsors to the Primary Beneficiaries under 
the Completion Guarantee or payments made by the Political Risk Indemnitors to 
UCC under the Political Risk Indemnity by way of set-off or otherwise;

"Shareholders" means Boubyan, PIC and UCC;

"Shareholder Contributions" means any of the Initial Shareholder 
Contributions, the Additional Shareholder Contributions and any Extraordinary 
Shareholder Contributions;

"Site" means the area within the Shuaiba Industrial Area described in the Land 
Licence;

"Sponsor Documents" means all the Documents to which either or both of the 
Sponsors are party;

"Sponsors" means PIC and UCC;

"Sponsor Support Agreement" means the agreement so entitled of even date 
herewith between the Sponsors, the Company, EMC, the Debt Trustee and the 
Intercreditor Agent;

"Start-up" means the first day on which the Plant shall have operated at an 
annual rate of 337,500 tonnes of PE and 255,000 tonnes of EG for seven 
consecutive days, whilst meeting product quality standards throughout, as 
determined by the Technical Bank after consulting the Technical Consultant and 
the Company;

"STA Deed of Accession" means a deed of accession in the form set out in the 
Fifth Schedule to the Security Trust Agreement;

"Step-in Date" shall have the meaning ascribed thereto in Clause 25.3 of the 
Sponsor Support Agreement;

"Step-in Documents" means the Feedstock Supply Agreement, the Feedstock 
Interruption Agreement, the Sales Volume Guarantee, the PE Licence Agreement, 
the EG Licence Agreement, the Catalyst Supply Agreements, the Marketing 
Agreements, the Contingent O & M Services Agreement and any other Document 
entered into from time to time between either or both of the Sponsors and 
either or both of EMC and the Company, or between EMC and the Company;

"STR Suspension Period" shall have the meaning ascribed thereto in Clause 23.1 
of the Sponsor Support Agreement;

"Subordinated Creditors" means:

      (i)   up until and including the Primary Beneficiary Release Date, the 
Shareholders and the Political Risk Indemnitors;

      (ii)  after the Primary Beneficiary Release Date up until and including 
the Intermediate Release Date, the Shareholders (save, in the case 
of PIC, to the extent of any Secured Obligations owed to it by 
virtue of payments made by it under the Completion Guarantee);

"Subordinated Liabilities" means any present and future sums, liabilities and 
obligations whatsoever (actual or contingent) payable, owing due or incurred 
by the Company to any Shareholder under or in relation to any of the 
Subordinated Loan Agreements, the Finance Documents, the Technology 
Agreements, Article 4.1(a) of the Contingent O&M Services Agreement and any 
Polypropylene Agreement (including, without limitation, until the Primary 
Beneficiary Release Date, any amounts owed by the Company to the Sponsors 
and/or the Political Risk Indemnitors arising as a result of any payments made 
by the Sponsors to the Primary Beneficiaries under the Completion Guarantee or 
payments made by the Political Risk Indemnitors to UCC under the Political 
Risk Indemnity by way of set-off or otherwise), but excluding any FS Loans or 
interest payable thereon Provided that the following payments to UCC under the 
Technology Agreements shall not constitute Subordinated Liabilities:

(i)   any costs and expenses incurred by UCC in providing goods and/or 
services pursuant to the Technology Agreements which the Company is 
obliged to reimburse to UCC thereunder; and

(ii)  any increase in the Royalty Payments payable to UCC under the Technology 
Agreements which relate to improvements in the licensed processes the 
subject thereof, which are covered by any Annual Budget; 

"Subordinated Loan Agreements" means:

(i)   the PIC Subordinated Loan Agreement"; 

(ii)  the Boubyan Subordinated Loan Agreement; and

(iii) the Cost Overrun Facility Agreement;

"Substitute Company" any person who, from time to time, becomes an additional 
party to the Sponsor Support Agreement and a party (in place of the Company 
and/or EMC) to one or more Step-in Documents, in accordance with Clause 26.1 
of the Sponsor Support Agreement;

"Supplier" in relation to any Lease Asset means the person which shall have 
contracted to supply the same to the Company;

"SVG Transportation Force Majeure Event" means an occurrence, beyond the 
reasonable control of the Company, EMC and the Sponsors, which consists of an 
act of God, fire, flood, war, blockade, voluntary or involuntary compliance 
with acts or regulations of governmental agencies and authorities, or strikes 
or labour disputes (except where the same relate only to personnel of the 
Company, EMC or either Sponsor) which:

(i)   affects Kuwait, the Arabian Gulf or the Straits of Hormuz  and prevents 
the transportation of Product out of Kuwait; or

(ii)  affects any dispatched shipment of Product and prevents delivery of such 
Product to the intended purchasers;

"Target EG Sales Volume" in relation to any Relevant EG Period means the 
target sales volume (in tonnes) of EG specified for such Relevant EG Period in 
Column 2 of the Second Schedule to the Sales Volume Guarantee;

"Target PE Sales Volume" in relation to any Relevant PE Period means the 
target sales volume (in tonnes) of PE specified for such Relevant PE Period in 
Column 2 of the First Schedule to the Sales Volume Guarantee;

"Technology Agreements" means:

(i)   the PE Licence Agreement;

(ii)  the EG Licence Agreement;

(iii) the Olefin Technology Agreement dated as of 5 April 1994 as amended by a 
letter effective as of 10 May 1995 between Brown & Root International 
Inc., Union Carbide Chemicals and Plastics Company Inc. and PIC as 
assigned by the Sponsors to the Company pursuant to the Assignment and 
Assumption Agreement governed by New York law;

(iv)  the Alphabutol Technology Agreement dated as of 15 January, 1995 between 
Institut Francais du Petrole, UCC and PIC as assigned by the Sponsors to 
the Company pursuant to the Assignment and Assumption Agreement governed 
by New York law; 

(v)   the Amine Guard System License Agreement dated or to be dated on or 
before the Effective Date between UOP and the Company; and

(vi)  the Benfield Technology License Agreement dated or to be dated on or 
before the Effective Date between UOP and the Company; 

"Technical Bank" means Arab Petroleum Investments Corporation (APICORP) as 
technical bank or such other person appointed as such from time to time in 
accordance with Clause 45.2 of the Common Terms Agreement;

"Technical Consultant" means The Pace Consultants Inc. or any other person 
appointed as such in connection with the Project and approved by the Majority 
Term Banks;

"Technology Licensing" means the licensing by UCC to the Company of technology 
under the PE Licence Agreement and the EG Licence Agreement  in return for 
Royalty Payments;

"Term" in relation to any Working Capital Advance means, save as otherwise 
provided in the Working Capital Facility Agreement, the period for which such 
Working Capital Advance is borrowed Provided that, if any event contemplated 
by Clauses 32(xiii) or 32(xiv) of the Common Terms Agreement occurs, the term 
of such Working Capital Advance shall be extended to the Working Capital 
Maturity Date;

"Term Banks" means the Term Loan Banks and the Lessor;

"Term Facilities" means the Term Loan Facility and the Lease Facility;

"Term Facilities Notice of Drawdown" means a notice of drawdown in the form 
set out in the Sixth Schedule to the Common Terms Agreement;

"Term Loan" means the principal amount outstanding from time to time under the 
Term Loan Facility;

"Term Loan Advance" means, save as otherwise provided in the Term Loan 
Facility Agreement, an advance made or to be made by the Term Loan Banks under 
the Term Loan Facility (or, as the case may be, the principal amount thereof 
outstanding from time to time);

"Term Loan Arrangers" means the Arrangers other than the Lessor;

"Term Loan Banks" means the Tranche A Term Loan Banks and the Tranche B Term 
Loan Banks;

"Term Loan Facility Agreement" means the agreement so entitled of even date 
herewith between the Company, the Facility Agent, the Term Loan Arrangers, the 
Term Loan Underwriters and the Term Loan Banks;

"Term Loan Facility" means the loan facility made available by the Term Loan 
Banks pursuant to the Term Loan Facility Agreement;

"Term Loan Underwriters" means the Underwriters other than the Lessor;

"Term Outstandings" means the Lease Outstandings and the Outstandings under 
the Term Loan Facility and any New Term Facility;

"Tertiary Beneficiaries" means, with effect from the Intermediate Release Date 
and at all times thereafter until the Final Release Date, PIC and UCC in their 
respective capacities as guarantors under the Completion Guarantee;

"Total Debt" means the aggregate of all Outstandings and the principal amounts 
actually owed by the Company to any other persons constituting Indebtedness 
for Borrowed Money (other than Subordinated Liabilities);

"Total Expropriation" means any acts attributable to a governmental authority, 
in violation of international law, that deprive a Sponsor and its Affiliates 
(to the extent any Affiliate has an interest in the Project) of their 
fundamental rights in their investments in the Project ("fundamental rights" 
meaning rights the deprivation of which substantially deprive a Sponsor and 
its Affiliates of the benefits of their investments);

"Total Project Costs" means the aggregate of all Project Costs incurred by the 
Company in connection with the Project up to the first date upon which either 
Sponsor is released from its obligations under Clauses 2 and 3 of the 
Completion Guarantee (or, if earlier, 30 September, 2000);

"Tranche A" in relation to the Term Loan or the Term Loan Facility means the 
portion thereof so designated under the Term Loan Facility Agreement;

"Tranche A Reimbursement Element" in relation to any Lease Payment means the 
sum of:

(i)   one half of the Imputed Lease Drawings (or, after they have been 
ascertained, one half of the Actual Lease Drawings), divided by 
seventeen; and

(ii)  in the case only of the first Lease Payment after the Actual Lease 
Drawings have been ascertained, one half of the Lease Payments 
Adjustment (expressed as a negative figure if the Actual Lease Drawings 
are less than the Imputed Lease Drawings);

"Tranche A Term Loan Adjustment" means the difference between:

(i)   the aggregate of all instalments of Tranche A of the Term Loan repaid in 
accordance with Clause 9 of the Term Loan Agreement before the Actual 
Tranche A Term Loan Drawings shall have been ascertained; and

(ii)  what would have been the aggregate of such instalments of Tranche A of 
the Term Loan had the Imputed Tranche A Term Loan Drawings equalled the 
Actual Tranche A Term Loan Drawings;

"Tranche A Term Loan Banks" means the lenders making Tranche A of the Term 
Loan Facility available under the Term Loan Facility Agreement;

"Tranche B Final Maturity Date" means 31 March 2005;

"Tranche B" in relation to the Term Loan or the Term Loan Facility means the 
portion thereof so designated under the Term Loan Facility Agreement;

"Tranche B Reimbursement Element" in relation to any Lease Payment means the 
sum of:

(i)   one half of the Imputed Lease Drawings (or, after they have been 
ascertained, one half of the Actual Lease Drawings), divided by 
thirteen; and 

(ii)  in the case only of the first Lease Payment after the Actual Lease 
Drawings have been ascertained, one half of the Lease Payments 
Adjustment (expressed as a negative figure if the Actual Lease Drawings 
are less than the Imputed Lease Drawings);

"Tranche B Term Loan Adjustment" means the difference between:

(i)   the aggregate of all instalments of Tranche B of the Term Loan repaid in 
accordance with Clause 9 of the Term Loan Agreement before the Actual 
Tranche B Term Loan Drawings shall have been ascertained; and

(ii)  what would have been the aggregate of such instalments of Tranche B of 
the Term Loan had the Imputed Tranche B Term Loan Drawings equalled the 
Actual Tranche B Term Loan Drawings;

"Tranche B Term Loan Banks" means the lenders making Tranche B of the Term 
Loan Facility available under the Term Loan Facility Agreement;

"Transfer Certificate" means in relation to any Bank the form of certificate 
required to be executed under its Facility Agreement to effect a transfer of 
all or part of such Bank's rights, benefits and obligations to a Transferee;

"Transfer Date" means in relation to any Transfer Certificate the date for the 
making of the transfer as specified in such Transfer Certificate;

"Transferee" in relation to a Bank means a bank or other financial institution 
to which such Bank seeks to transfer all or part of its rights, benefits and 
obligations under its Facility Agreement; 


"True Sale" in relation to any sale by the Company of any given volume of EG 
or PE produced by the Plant means a sale where:

(i)   the sale price for such volume of EG or, as the case may be, PE is no 
less than the then prevailing price for EG or, as the case may be, PE in 
the relevant markets therefor at the time of the contract for such sale; 
and



(ii)  the terms and conditions of the sale are consistent with market practice 
for the relevant market;

"Trustee" means either the Projects Assets Security Trustee or the Debt 
Trustee, and "Trustees" means both of them;

"Trust Property" means the Rights, the Proceeds and all Proceeds Accounts;

"UCC" means Union Carbide Corporation;

"UCC Charged EMC Securities" means (i) all rights, title and interest of UCC 
in and to the UCC EMC Shares (and all dividends, distributions, interest or 
other monies paid or payable thereon), (ii) all stocks, shares, warrants, 
rights, monies or property (and the dividends, distributions, interest or 
other monies paid or payable thereon) accruing or acquired at any time and 
from time to time by way of redemption, purchase, bonus, preference, option or 
otherwise to or in respect of or derived from all or any of the UCC EMC Shares 
or any derivative thereof and (iii) any cash or other consideration from the 
time being forming part of the net proceeds of sale of any of the above 
mentioned property;

"UCC EMC Share Pledge Agreement" means the Deposit and Pledge Agreement of 
even date herewith between UCC and the Debt Trustee relating to the UCC EMC 
Shares;

"UCC EMC Shares" means the shares in EMC details of which are set out in the 
First Schedule to the UCC EMC Share Pledge Agreement;

"UCC Territory" means the countries for which UCC is appointed the Company's 
exclusive sub-agent for sales of PE;

"Underwriters" means the persons named as such in the Common Terms Agreement;

"Unit" means any of the Butene-1 Unit, the Ethylene Unit, the EG Unit and the 
PE Units;

"Unit Performance Tests" means the series of individual operating tests 
specified in Part 2 of the Seventh Schedule to the Common Terms Agreement;

"Utility Agreements" means:

(i)   the Cooling Water Supply Agreement dated or to be dated on or prior to 
the Effective Date between the General Administration of the Shuaiba 
Area Authority and the Company;

(ii)  the Power Supply Letter dated 12 July 1994 from the Ministry of 
Electricity and Water of Kuwait to PIC; and

(iii) the Utilities and Services Letter dated or to be dated on or prior to 
the Effective Date from Shuaiba Area Authority to the Company;

"WC Notice of Drawdown" means a notice of drawdown in the form set out in the 
Third Schedule to the Working Capital Facility Agreement;

"WC Repayment Date" means, in relation to any Working Capital Advance, the 
last day of the Term thereof;

"Working Capital" means the sum of:

(i)   the balance on the Operations Accounts;

(ii)  the Company's inventory of raw materials, spare parts (other than its 
capital stock of spare parts), work in progress and unsold Product;

(iii) the amount of the Company's receivables (adjusted for bad and doubtful 
debts in respect of sales of Product); 

(iv)  all prepaid expenses and  security deposits; and

(v)   in respect of the first two months of the first Annual Budget, the 
amount of the Initial Working Capital;

less sums owed to trade creditors, all (other than paragraph (v) above) as 
calculated in accordance with International Accounting Standards and the bases 
of valuation applied in the Company's audited financial statements;

"Working Capital Advance" means, save as otherwise provided in the Working 
Capital Facility Agreement, an advance made or to be made by the Working 
Capital Banks under the Working Capital Facility (or, as the case may be, the 
principal amount thereof outstanding from time to time);

"Working Capital Agent" means National Bank of Kuwait S.A.K. as working 
capital agent or such other person appointed as such from time to time under 
the Working Capital Facility Agreement;

"Working Capital Banks" means the financial institutions which are party to 
the Working Capital Facility Agreement as lenders;

"Working Capital Facility" means the facility provided to the Company under 
the Working Capital Facility Agreement; 

"Working Capital Facility Agreement"  means the agreement so entitled of even 
date herewith between the Company, the Working Capital Facility Agent and the 
Working Capital Banks;

"Working Capital Loan" means the principal amount outstanding from time to 
time under the Working Capital Facility; and

"Working Capital Maturity Date" means 30 September 2004.

Section 2 - Rules of Interpretation and Construction

2.1   References to:

"this Agreement", "this Assignment", "this Deed" or "this Schedule" shall be 
construed as references to the agreement or document or Schedule in which such 
reference appears together with all recitals and Schedules thereto;

an "Annex" or an "Appendix" or a "Schedule" shall, subject to any contrary 
indication, be construed as a reference to an annex or appendix or schedule of 
or to the agreement or document in which such reference appears;

a "business day" shall be construed as a reference to a day on which banks are 
generally open for business in London, New York and Kuwait City Provided 
however that if any such reference includes a reference to a day on which 
payment or purchase of any sum is due, then on such day, in addition to the 
above requirements, banks must generally be open in the principal financial 
centre of the country of such currency; 

a "Clause" shall, subject to any contrary indication, be construed as a 
reference to a clause of the agreement or document in which such reference 
appears;

an "encumbrance" shall be construed as a reference to a mortgage, charge, 
pledge, lien or other encumbrance of any kind whatsoever securing any 
obligation of any person or any other type of preferential arrangement having 
a similar effect (including, without limitation, title transfer and retention 
arrangements but excluding the Lease Facility and its effects);

the "equivalent" on any given date in any currency  (the "first currency") of 
an amount denominated in another currency (the "second currency") is a 
reference to the amount of the first currency which could be purchased with 
the amount of the second currency at the spot rate of exchange (or spot cross 
rates of exchange using dollars) quoted on the relevant page of the Reuters 
Screen or, if no such rate of exchange is quoted, the rate of exchange quoted 
by the relevant Agent at or about 11.00 a.m. on such date for the purchase of 
the first currency with the second currency for delivery on the second 
business day thereafter;

"hereunder", "herein" and similar expressions shall mean "under" or "in" the 
agreement or document in which they appear and shall not be restricted to the 
Clause or Schedule of the agreement or document in which they appear;

a "holding company" of a company or corporation shall be construed as a 
reference to any company or corporation of which the first-mentioned company 
or corporation is a subsidiary;

"indebtedness" shall be construed so as to include any obligation (whether 
incurred as principal or as surety) for the payment or repayment of money, 
whether present or future, actual or contingent;

"interest" shall be construed so as to include any financing charge or cost 
(howsoever described) calculated with respect to the amount of any 
Indebtedness for Borrowed Money and any period for which such indebtedness is 
outstanding;

a "month" is a reference to a period starting on one day in a calendar month 
and ending on the numerically corresponding day in the next succeeding 
calendar month save that, where any such period would otherwise end on a day 
which is not a business day, it shall end on the next succeeding business day, 
unless that day falls in the calendar month succeeding that in which it would 
otherwise have ended, in which case it shall end on the immediately preceding 
business day  Provided that, if a period starts on the last business day in a 
calendar month or if there is no numerically corresponding day in the month in 
which that period ends, that period shall end on the last business day in that 
later month (and references to "months" shall be construed accordingly);

a "Part" shall, subject to any contrary indication, be construed as a 
reference to a part of the agreement or document in which such reference 
appears;

a "person" shall be construed as a reference to any person, firm, company, 
corporation, government, state or agency of a state or any association or 
partnership (whether or not having separate legal personality) of two or more 
of the foregoing;

"repay" (or any derivative form thereof) shall, subject to any contrary 
indication, be construed to include "prepay" (or, as the case may be, the 
corresponding derivative form thereof);

a Clause or a Schedule shall, subject to any contrary indication, be construed 
as a reference to the particular Clause of or Schedule to the agreement or 
document in which such reference appears;

a "subsidiary" of a person shall be construed as a reference to any company or 
corporation:

(i)   which is controlled, directly or indirectly, by such person;

(ii)  more than half the issued share capital of which is beneficially owned, 
directly or indirectly, by such person; or

(iii) which is a subsidiary of another subsidiary of such person;

a company or corporation shall be treated as being "controlled" by a person if 
such person is able to direct its affairs and/or to control the composition of 
its board of directors or equivalent body;

"tax" means any present or future tax, levy, duty, charge, fee, deduction or 
withholding in the nature of tax, whatever called, wherever imposed, levied, 
collected, withheld or assessed and shall include, without limitation, any 
failure to pay or any delay in paying any of the same ;

"transferee" shall be construed so as to include any Transferee;

"VAT" shall be construed as a reference to value added tax including any 
similar tax which may be imposed in place thereof from time to time;  and

the "winding-up", "dissolution", "administration", "insolvency" or 
"reorganisation" of a company or corporation and references to the 
"liquidator", "assignee", "administrator", "receiver", "administrative 
receiver", "receiver" and "manager", "manager" or "trustee" of a company or 
corporation shall be construed so as to include any equivalent or analogous 
proceedings or, as the case may be, insolvency representatives or officers 
under the law of the jurisdiction in which such company or corporation is 
incorporated or any jurisdiction in which such company or corporation or, as 
the case may be, insolvency representatives or officers is incorporated or 
constituted or any jurisdiction in which such company or corporation or, as 
the case may be, insolvency representatives or officers carries on business 
including the seeking of liquidation, winding-up, reorganisation, dissolution, 
administration, arrangement, adjustment, protection or relief of debtors.

2.2   "$" and "dollars" denote lawful currency of the United States of 
America, and "KD" and "dinars" denotes the lawful currency of the State of 
Kuwait.

2.3   Words in any agreement or document importing the singular shall include 
the plural and vice versa.

2.4   Save where the contrary is indicated, any reference in any Finance 
Document to:

      (i)   any person shall be construed so as to include (a) its and any 
subsequent successors, transferees and assigns in accordance with their 
respective interests and (b) any person to whom its rights and/or obligations 
are novated, assigned and/or transferred pursuant to any of the Documents;

      (ii)  such agreement or document or any other agreement or document 
shall be construed as a reference to each such agreement or document or, as 
the case may be, such other agreement or document as the same may have been, 
or may from time to time be, amended, varied, novated, replaced or 
supplemented;

      (iii) a statute or enactment shall be construed as a reference to such 
statute as the same may have been, or may from time to time be, 
amended or re-enacted; and

      (iv)  a time of day shall, save as otherwise provided in any agreement 
or document, be construed as a reference to London time.

2.5   Clause, Part and Schedule headings contained in, and any index or table 
of contents to, any agreement or document are for ease of reference only.

2.6   All calculations or determinations to be made under any of the Security 
Documents in respect  for the purposes of determining voting rights and 
distribution shall be made in dollars and any amount denominated in a currency 
other than dollars shall be taken into account for the purposes of such 
calculation or, as the case may be, determination at its equivalent in dollars 
on the date such calculation or determination falls to be made.


The Company
EQUATE PETROCHEMICAL CO. K.S.C. (CLOSED)

By:   CHARLES R. KLINE



The Sponsors
PETROCHEMICAL INDUSTRIES COMPANY K.S.C.

By:   KHALED BUHAMRAH



UNION CARBIDE CORPORATION

By:   THOMAS J. LA FORGE



The Intercreditor Agent and Project Assets Security Trustee
NATIONAL BANK OF KUWAIT S.A.K.

By:   ISAM AL SAGER



The Debt Trustee
CITICORP TRUSTEE COMPANY LIMITED

By:   WAGDI RABBATT




                                                                   KP$01D6.29