EXECUTION COPY

               _________________________________________________
                                 e 495,000,000
                                TERM FACILITIES
                        AND REVOLVING CREDIT AGREEMENT
               _________________________________________________


                            DATED 20 DECEMBER 2002



                                      FOR


                         SGL CARBON AKTIENGESELLSCHAFT
                  AS THE COMPANY AND AS AN ORIGINAL BORROWER


                               DEUTSCHE BANK AG
                                      AND
                        DRESDNER KLEINWORT WASSERSTEIN
                          AS MANDATED LEAD ARRANGERS


                         DEUTSCHE BANK LUXEMBOURG S.A.
                      AS FACILITY AGENT AND SECURITY AGENT


                                     WITH


                        DRESDNER KLEINWORT WASSERSTEIN
                            AS DOCUMENTATION AGENT








                               BAKER & MCKENZIE
                                   FRANKFURT




<PAGE>


                                   CONTENTS

Clause                                                                     Page


                                   SECTION 1

                                 INTERPRETATION

1.    DEFINITIONS AND INTERPRETATION...........................................1



                                   SECTION 2

                                THE FACILITIES

2.    THE FACILITIES..........................................................28
3.    PURPOSE.................................................................30
4.    CONDITIONS OF UTILISATION...............................................30

                                   SECTION 3

                                  UTILISATION

5.    UTILISATION.............................................................32
6.    CHANGE OF CURRENCY......................................................30

                                   SECTION 4

                    REPAYMENT, PREPAYMENT AND CANCELLATION

7.    REPAYMENT...............................................................38
8.    COMPANY'S LIABILITIES IN RELATION TO THE LETTER OF CREDIT...............30
9.    PREPAYMENT AND CANCELLATION.............................................41

                                   SECTION 5

                             COSTS OF UTILISATION

10.   INTEREST................................................................48
11.   INTEREST PERIODS AND THE TERM...........................................51
12.   CHANGES TO THE CALCULATION OF INTEREST..................................53
13.   FEES....................................................................54

                                   SECTION 6

                        ADDITIONAL PAYMENT OBLIGATIONS

14.   TAX GROSS UP AND INDEMNITIES............................................56
15.   INCREASED COSTS.........................................................58
16.   OTHER INDEMNITIES.......................................................59
17.   MITIGATION BY THE LENDERS...............................................60
18.   COSTS AND EXPENSES......................................................61

                                   SECTION 7

                                   GUARANTEE

19.   GUARANTEE AND INDEMNITY.................................................62

                                   SECTION 8

              REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

20.   REPRESENTATIONS.........................................................67
21.   INFORMATION UNDERTAKINGS................................................77
22.   FINANCIAL COVENANTS.....................................................82


<PAGE>

23.   GENERAL UNDERTAKINGS....................................................86
24.   EVENTS OF DEFAULT.......................................................86

                                   SECTION 9

                              CHANGES TO PARTIES

25.   CHANGES TO THE LENDERS.................................................102
26.   CHANGES TO THE OBLIGORS................................................105

                                  SECTION 10

                             THE FINANCE  PARTIES

27.   ROLE  OF THE FACILITY AGENT, THE SECURITY AGENT, THE DOCUMENTATION AGENT,
      THE MANDATED LEAD ARRANGERS AND THE COMPANY AS AGENT OF THE OBLIGORS...106
28.   THE LENDERS, THE FRONTING BANKS AND THE SUFACILITY BANKS...............116
29.   CONDUCT OF BUSINESS BY THE FINANCE PARTIES.............................116
30.   SHARING AMONG THE LENDERS AND THE FRONTING BANKS.......................116

                                  SECTION 11

                                ADMINISTRATION

31.   PAYMENT MECHANICS......................................................117
32.   SET-OFF................................................................120
33.   NOTICES................................................................120
34.   CALCULATIONS AND CERTIFICATES..........................................121
35.   PARTIAL INVALIDITY.....................................................122
36.   REMEDIES AND WAIVERS...................................................122
37.   AMENDMENTS AND WAIVERS.................................................122
38.   COUNTERPARTS...........................................................123

                                  SECTION 12

                         GOVERNING LAW AND ENFORCEMENT

39.   GOVERNING LAW..........................................................123
40.   ENFORCEMENT............................................................123

Schedules

SCHEDULE 1...................................................................125
The Original Parties.........................................................125
SCHEDULE 2...................................................................129
Conditions Precedent and Conditions Subsequent...............................129
SCHEDULE 3...................................................................137
Requests.....................................................................137
SCHEDULE 5...................................................................142
Form of Transfer Certificates................................................142
SCHEDULE 6...................................................................146
Form of Accession Letter.....................................................146
SCHEDULE 7...................................................................148
Form of Compliance Certificate...............................................148
SCHEDULE 8...................................................................149
Existing Security............................................................149
SCHEDULE 9...................................................................150
LMA Form of Confidentiality Undertaking......................................150





<PAGE>



SCHEDULE 10....................................................................1
Timetables.....................................................................1
SCHEDULE 11 ...................................................................3
Form of Security Trust Agreement...............................................3
SCHEDULE 12 Approved Additional Borrowers and their Allocations................4
Term Facility A................................................................4
SCHEDULE 13 ...................................................................5
Current Material Subsidiaries..................................................5
SCHEDULE 14....................................................................7
Form of the Letter of Credit...................................................7
SCHEDULE 15....................................................................8
Existing Competition Law Proceedings and Anti-Trust Lawsuits/..................8
SCHEDULE 16....................................................................1
Existing Intra-Group Loans.....................................................1
SCHEDULE 17....................................................................1
Mandatorily Discharged Indebtedness............................................1
SCHEDULE 18....................................................................1
Form of US Opinion.............................................................1



<PAGE>


THIS AGREEMENT is dated 20 December 2002 and made between:

(1)   SGL CARBON AKTIENGESELLSCHAFT, Wiesbaden (the "COMPANY");

(2)   THE COMPANY  and THE COMPANIES listed in Part I of Schedule 1 as original
      borrowers (the "ORIGINAL BORROWERS");

(3)   THE COMPANIES  listed in Part I of Schedule 1 as original guarantors (the
      "ORIGINAL GUARANTORS");

(4)   DEUTSCHE BANK AG  and  DRESDNER  KLEINWORT  WASSERSTEIN,  THE  INVESTMENT
      BANKING  DIVISION  OF  DRESDNER  BANK AG as Mandated Lead Arrangers  (the
      "MANDATED LEAD ARRANGERS");

(5)   THE FINANCIAL INSTITUTIONS listed  in  Part  II  of Schedule 1 as lenders
      (the "ORIGINAL LENDERS");

(6)   DEUTSCHE BANK LUXEMBOURG S.A. as Facility Agent and  Security  Agent  for
      the Lenders (the "FACILITY AGENT" and the "SECURITY AGENT"); and

(7)   DRESDNER  KLEINWORT  WASSERSTEIN,  THE  INVESTMENT  BANKING  DIVISION  OF
      DRESDNER BANK AG as Documentation Agent (the "DOCUMENTATION AGENT").

IT IS AGREED as follows:

                                   SECTION 1

                                INTERPRETATION

1.    DEFINITIONS AND INTERPRETATION

1.1   DEFINITIONS

      In this Agreement:

      "ACCESSION  LETTER"  means  a  Borrower  Accession  Letter or a Guarantor
      Accession Letter and "ACCESSION LETTERS" shall be construed accordingly.

      "ACQUISITION" means:

      (i)    the purchase, subscription for or other acquisition  of any shares
             (or other securities or any interest therein) in, or incorporation
             of, any other company; or

      (ii)   the  purchase  or  other  acquisition  of  any  assets or (without
             limitation to any of the foregoing) acquisition of any business or
             interest therein.

      "ADDITIONAL  BORROWER"  means  any Approved Additional Borrower  and  any
      other  Material  Subsidiary  that  becomes   an  Additional  Borrower  in
      accordance with Clause 26 (Changes to the Obligors).

      "ADDITIONAL  GUARANTOR"  means  a  company  that  becomes  an  Additional
      Guarantor in accordance with Clause 26 (Changes to the Obligors).

      "ADDITIONAL  OBLIGOR"  means  an  Additional  Borrower or  an  Additional
      Guarantor.

<PAGE>

      "AFFILIATE" means, in relation to any person, a Subsidiary of that person
      or  a  Holding  Company of that person or any other  Subsidiary  of  that
      Holding Company.

      "ALLOCATION" means:

      (a)    in relation to the Company, e 145,000,000; and

      (b)    in relation  to  an  Approved  Additional Borrower, the amount set
             opposite  its  name under the heading  "Amount  of  such  Approved
             Additional  Borrower's   Allocation"   in  Schedule  12  (Approved
             Additional Borrowers and their Allocations),

      being the maximum amount of Term Facility A that  may  be  drawn  down by
      that particular Borrower.

      "APPROVED   ADDITIONAL   BORROWERS"   means  the  companies  as  Approved
      Additional Borrowers listed in Schedule 12 (Approved Additional Borrowers
      and their Allocations).

      (ii)

      "AUTHORISATION" means an authorisation,  consent,  approval,  resolution,
      licence, exemption, filing or registration.

      "AVAILABILITY PERIOD" means:

      (a)    in  relation  to each Term Facility, the period from and including
             the date of this  Agreement  to  and  including the date occurring
             three (3) Months after the date of this Agreement; and

      (b)     in relation to the Revolving Credit Facility, the period from and
             including the date of this Agreement to  and  including  the  date
             occurring  one  (1)  Month  prior to the Term Facility B Repayment
             Date.

      "AVAILABLE COMMITMENT" means:

      (a)    in  relation  to  a Facility, a  Lender's  Commitment  under  that
             Facility minus the  amount  of  its participation in the Letter of
             Credit issued under Term Facility  B  and/or minus the Euro Amount
             of its participation in any outstanding  Term Facility A Loans and
             Revolving Credit Facility Loans and/or minus  the  amount in Euros
             of  its  participation  in any amount outstanding under  the  Term
             Facility C Loan; and

      (b)    in relation to any proposed  Utilisation, the difference under (a)
             above adjusted as follows:

             (i)   by subtracting therefrom  the amount of its participation in
                   any Loans (and subtracting  therefrom the Euro Amount in the
                   case of Term Facility A and the  Revolving  Credit Facility)
                   that are due to be made or issued under that  Facility on or
                   before the proposed Utilisation Date; and

             (ii)  in relation to the Revolving Credit Facility only, by adding
                   thereto  the  Euro  Amount  of  its  participation  in   any
                   Revolving Credit Facility Loans that are due to be repaid or
                   prepaid (or, if any Revolving Credit Facility Loan is due to
                   be  repaid  or  prepaid  in  part,  the  Euro  Amount of its
                   participation  in  that  part)  on  or  before  the proposed
                   Utilisation Date.


                                       2

<PAGE>

      "AVAILABLE FACILITY" means, in relation to a Facility, the aggregate  for
      the  time  being of each Lender's Available Commitment in respect of that
      Facility.

      "BASE FINANCIAL STATEMENTS" means:

      (a)    the  consolidated  financial  statements  of  the  Group  for  the
             financial  year ended 31 December 2001 prepared by the Company and
             audited by KPMG; and

      (b)    the unaudited  consolidated  9 months interim financial statements
             of 2002 of the Company.

      "BORROWER" means an Original Borrower or an Additional Borrower unless it
      has ceased to be a Borrower in accordance  with Clause 26 (Changes to the
      Obligors).

      "BORROWER ACCESSION LETTER" means a document  substantially  in  the form
      set out in Part I of Schedule 6 (Form of Accession Letter).

      "BREAK COSTS" means the amount (if any) by which:

      (a)    the  interest  which a Finance Party should have received for  the
             period from the  date  of  receipt  of  all  or  any  part  of its
             participation  in  a  Loan  or  Unpaid  Sum to the last day of the
             current Interest Period or Term in respect  of that Loan or Unpaid
             Sum, had the principal amount or Unpaid Sum received  been paid on
             the last day of that Interest Period or Term,

      exceeds:

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

      "BUDGET" means with respect to each financial year commencing on or after
      1 January 2003, the latest annual budget delivered by  the Company to the
      Facility  Agent pursuant to Clause 21.4 (Budgets), including  profit  and
      loss accounts,  balance  sheets  and cash flow projections, in the agreed
      form, relating to the Group.

      "BUSINESS DAY" means a day (other  than  a  Saturday  or Sunday) on which
      banks  are  open for general business in London, Frankfurt  am  Main  and
      Luxembourg and:

      (a)    (in relation  to  any  date  for payment or purchase of a currency
             other than Euro) the principal  financial centre of the country of
             that currency; or

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

      "CASH COLLATERAL" means, in relation to the Letter of Credit or Letter of
      Credit Proportion of the Letter of Credit, a cash deposit in an interest-
      bearing  account  or  accounts  with  the  Facility  Agent (or such other
      financial institution reasonably acceptable to the Facility Agent) in the
      name of the Company (and identified as a Cash Collateral  account),  that
      cash  deposit  and  account to be secured in favour of the Security Agent
      and the relevant Lenders  on  terms  and  conditions  acceptable  to  the
      Facility Agent and the Security Agent.


                                        3

<PAGE>


      "CASH  COLLATERAL  DOCUMENTS"  means any documents, as the Facility Agent
      and  the  Security Agent may (each  acting  reasonably)  specify,  to  be
      entered into in relation to the Cash Collateral.

      "CASH EQUIVALENTS"  has the meaning given to it in Clause 22.1 (Financial
      Definitions).

      "CHANGE OF CONTROL" means  if  any  person  or group of persons acting in
      concert gains control of the Company or becomes  a Holding Company of the
      Company.

      For the purposes of this definition:

      (a)    "CONTROL" means:

             (i)   the holding of more than fifty (50) per  cent. of the issued
                   share capital of the Company; and

             (ii)  the  power  (whether  by  way  of ownership, shares,  proxy,
                   contract, agency or otherwise) to  (A)  cast, or control the
                   casting of, more than fifty (50) per cent.  of  the  maximum
                   number  of votes that might be cast at a general meeting  of
                   the Company,  (B) appoint or remove all, or the majority of,
                   the directors or  other  equivalent officers of the Company,
                   or (C) give directions with  respect  to  the  operating and
                   financial  policies  of  the Company which the directors  or
                   other equivalent officers  thereof  are  obliged  to  comply
                   with; and

      (b)    "PERSONS  ACTING IN CONCERT" comprise persons who, pursuant to  an
             agreement or  understanding (whether formal or informal), actively
             co-operate to obtain or consolidate control of an entity.

      "CHARGED ASSETS" means  any  assets  of  any  Obligor that are secured in
      favour of the Security Agent and/or the other Finance Parties pursuant to
      the Security Documents or any of them.

      "CLOSING" means the date on which all the conditions precedent as set out
      in Part I of Schedule 2 (Conditions Precedent and  Conditions Subsequent)
      are satisfied in accordance with Clause 4 (Conditions of Utilisation), or
      waived.

      "CLOSING DATE" means the date on which the Closing takes place.

      "CODE"  means the United States Internal Revenue Code  of  1986  and  the
      regulations promulgated and rulings issued under that code.

      "COMMITMENT"  means  a  Term  Facility  A  Commitment,  a Term Facility B
      Commitment,  a Term Facility C Commitment or a Revolving Credit  Facility
      Commitment in  each case as reduced or increased from time to time by any
      transfer or assignment pursuant to Clause 25 (Changes to the Lenders) and
      in the case of a  Subfacility, as reduced or increased pursuant to Clause
      2.2(c), and "COMMITMENTS" shall be construed accordingly.

      "COMPETITION LAW LIABILITIES"  means  the fines imposed on the Company or
      any member of the Group by any relevant authority in relation to Existing
      Competition  Law  Proceedings  as  set  out   in  Schedule  15  (Existing
      Competition Law Proceedings and Anti-Trust Lawsuits).


                                        4

<PAGE>



      "COMPLIANCE CERTIFICATE" means a certificate substantially  in  the  form
      set out in Schedule 7 (Form of Compliance Certificate).

      "CONFIDENTIALITY   UNDERTAKING"   means   a  confidentiality  undertaking
      substantially in a recommended form of the  LMA  as set out in Schedule 9
      (LMA  Form of Confidentiality Undertaking) or in any  other  form  agreed
      between the Company and the Facility Agent.

      "DANGEROUS  SUBSTANCE"  means  any  radioactive  emissions, noise and any
      natural  or  artificial  substance  (in  whatever form)  the  generation,
      transportation, storage, treatment, use or  disposal  of  which  (whether
      alone or in combination with any other substance) gives rise to a risk of
      causing  harm  to  man  or  any  other  living  organism  or damaging the
      Environment  or public health or welfare, including (without  limitation)
      any controlled,  special,  hazardous,  toxic,  radioactive  or  dangerous
      waste.

      "DEBT  ISSUE" means any issue after the date of this Agreement of  public
      or privately placed debt securities of any member of the Group.

      "DEEMED  FACILITY  B  UTILISATION" means a Utilisation of Term Facility B
      deemed to be made for all  purposes  of  this Agreement on the day of the
      Facility  Agent's  notification  in respect of  receipt  of  all  of  the
      documents and other evidence listed  in  Part I of Schedule 2 pursuant to
      Clause 4.1, such day being deemed to be the  Utilisation  Date in respect
      of  Term  Facility  B by way of (i) the Fronting Banks being regarded  as
      having issued the Existing  L/Cs  pursuant  to  a  respective Utilisation
      request  and  (ii)  the  Fronting Banks being entitled to  fees  in  such
      capacities as further set  out  in  this  Agreement.  For the purposes of
      Clause  28,  the  respective  Term Facility B Lenders' indemnity  is  not
      limited  to the nominal amount of  respective  Existing  L/Cs,  but  also
      includes any interests and costs incurred in respect of the Existing L/Cs
      not exceeding the Total Term Facility B Commitments.

      "DEEMED FACILITY  C  UTILISATION"  means  a  Utilisation  Term Facility C
      deemed to be made for all purposes of this Agreement on the  day  of  the
      Facility  Agent's  notification  in  respect  of  receipt  of  all of the
      documents  and other evidence listed in Part I of Schedule 2 pursuant  to
      Clause 4.1,  such  day being deemed to be the Utilisation Date in respect
      of Term Facility C.

      "DEFAULT"  means  an Event  of  Default  or  any  event  or  circumstance
      specified in Clause 24  (Events  of Default) which would (with the expiry
      of a grace period, the giving of notice,  the making of any determination
      under the Finance Documents or any combination  of  any of the foregoing)
      be an Event of Default.

      "DEFAULT MARGIN" means 4.00 per cent. per annum.

      "EMPLOYEE  PLAN" means an "EMPLOYEE BENEFIT PLAN" as defined  in  section
      3(3) of ERISA,  other than a Multiemployer Plan, which is maintained for,
      or under which contributions  are  made  on  behalf of, employees of a US
      Group Member or any ERISA Affiliate.

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

      "ENVIRONMENTAL CLAIM" means any claim by any person:



                                        5

<PAGE>


      (a)    in  respect  of any loss or liability suffered or incurred by that
             person as a result  of  or  in  connection  with  any violation of
             Environmental Law; or

      (b)    that  arises  as  a  result of or in connection with Environmental
             Contamination and that  could  give  rise to any remedy or penalty
             (whether interim or final) that may be  enforced  or  assessed  by
             private   or  public  legal  action  or  administrative  order  or
             proceedings.

      "ENVIRONMENTAL CONTAMINATION"  means  each  of  the  following  and their
             consequences:

      (a)    any  release,  discharge,  emission,  leakage  or  spillage of any
             Dangerous Substance at or from any site owned, leased, occupied or
             used by any member of the Group into any part of the  Environment;
             or

      (b)    any  accident, fire, explosion or sudden event at any site  owned,
             leased,  occupied  or  used  by  any  member of the Group which is
             directly or indirectly caused by or attributable  to any Dangerous
             Substance; or

      (c)    any other pollution of the Environment.

      "ENVIRONMENTAL LAW" means all laws (including, without limitation, common
      law),  regulations,  directives,  codes of practice, circulars,  guidance
      notices and the like having legal effect  concerning  the  protection  of
      human  health,  the  Environment, the conditions of the work place or the
      generation, transportation,  storage,  treatment or disposal of Dangerous
      Substances.

      "ENVIRONMENTAL LICENCE" means any permit, licence, authorisation, consent
      or other approval required by any Environmental Law.

      "EQUITY ISSUE" means any issue of shares  by  any  member of the Group or
      any issue or grant of rights to subscribe for shares in any member of the
      Group,  whereby such issue or granting of rights is funded  through  cash
      payments provided by any third party not being a member of the Group.

      "ERISA" means  the  US Employee Retirement Income Security Act of 1974 or
      any successor legislation to that Act and the regulations promulgated and
      rulings issued under that Act or any such successor legislation.

      "ERISA AFFILIATE" means any person that for purposes of Title I and Title
      IV of ERISA and section  412  of  the  Code  is  a  member  of a US Group
      Member's  controlled  group,  or  under  common  control with a US  Group
      Member, within the meaning of section 414(b) or (c) of the Code.

      "ERISA EVENT" means:

      (a)    any reportable event, as defined in section  4043  of  ERISA, with
             respect  to  an  Employee  Plan,  as  to  which  PBGC  has  not by
             regulation waived the requirement of section 403(a) of ERISA  that
             it  be notified within thirty days of the occurrence of such event
             (provided  that  a failure to meet the minimum funding standard of
             section 412 of the  Code  or  section  302  of  ERISA  shall  be a
             reportable event for the purposes of this paragraph (a) regardless
             of  the  issuance of any waivers in accordance with section 412(d)
             of the Code)  or  the  requirements  of  subsection (1) of section
             403(b)  of  ERISA  (taking  into account subsection  (2)  of  such
             section) are

                                       6

<PAGE>

            met with respect to a  contributing  sponsor,  as defined in section
            4001(a)(13) of ERISA,  of an Employee Plan and an event described in
            paragraph (9), (10), (11) (12 or (13) of section 4043(c) of ERISA is
            reasonably  expected  to occur with  respect to such  Employee  Plan
            within the following 30 days;

      (b)    the filing under section 4041(c) of ERISA of a notice of intent to
             terminate  any Employee Plan or the termination  of  any  Employee
             Plan under section 4041(c) of ERISA;

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

      (d)    the failure to make a required contribution  to  any Employee Plan
             that  would  result  in  the  imposition  of an Encumbrance  under
             section 412 of the Code or section 302 of ERISA; and

      (e)    an  engagement in a non-exempt prohibited transaction  within  the
             meaning  of section 4795 of the Code or section 406 of ERISA which
             upon the occurrence  of  any of the events described in paragraphs
             (a) to (c) (inclusive) above  could reasonably be expected to have
             a Material Adverse Effect.

      "EURIBOR" means, in relation to any Loans in Euros:

      (a)    the applicable Screen Rate; or

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

      as  of  the  Specified  Time  on  the  Quotation Day for the offering  of
      deposits in Euros for a period comparable  to  the Interest Period of the
      relevant Loan.

      "EURO AMOUNT" means, in relation to a Term Facility A Loan or a Revolving
      Credit Facility Loan, the amount specified in the Utilisation Request for
      that Term Facility A Loan or Revolving Credit Facility  Loan  (or, if the
      amount requested is not denominated in Euros, that amount converted  into
      Euros at the Facility Agent's Spot Rate of Exchange on the date which  is
      in  relation  to  a  Utilisation  three  (3)  Business  Days  before  the
      Utilisation  Date  or,  if later, on the date the Facility Agent receives
      the Utilisation Request,  adjusted  to reflect any repayment, prepayment,
      consolidation or division or reduction  of  the  Term  Facility A Loan or
      Revolving Credit Facility Loan).

      "EVENT OF DEFAULT" means any event or circumstance specified  as  such in
      Clause 24 (Events of Default).

      "EXCESS  CASH FLOW" has the meaning given to it in Clause 22.1 (Financial
      Definitions).

      "EXISTING  COMPETITION LAW PROCEEDINGS" means the competition law related
      litigation,  civil  lawsuits  and/or  other  proceedings of or before any
      court  or  agency  set  out  in  Schedule  15 (Existing  Competition  Law
      Proceedings and Anti-Trust Lawsuits).

      "EXISTING INDEBTEDNESS" means the Financial  Indebtedness  of  the  Group
      outstanding on the date of this Agreement.



                                        7

<PAGE>


      "EXISTING L/CS" means the letters of credit currently issued in favour of
      the   European   Commission   in  connection  with  the  Competition  Law
      Liabilities by Bayerische Hypo-  und  Vereinsbank  AG  by letter dated 12
      October 2001 in the amount of e 25,600,000, by Deutsche Bank AG by letter
      dated 11 October 2001 in the amount of e 29,000,000 and  by Dresdner Bank
      AG by letter dated 22 October 2001 in the amount of e 25,600,000.

      "EXPIRY  DATE" means, in relation to the Letter of Credit,  the  date  on
      which the maximum aggregate liability under it is to be reduced to zero.

      "FACILITIES"  means Term Facility A, Term Facility B, Term Facility C and
      the  Revolving  Credit   Facility   and  "FACILITY"  shall  be  construed
      accordingly.

      "FACILITY AGENT'S SPOT RATE OF EXCHANGE"  means the Facility Agent's spot
      rate of exchange for the purchase of the relevant  currency with Euros in
      the London foreign exchange markets at or about 11:00 a.m. London time on
      a particular day.

      "FACILITY OFFICE" means the office or offices notified  by  a Lender or a
      Fronting Bank to the Facility Agent in writing on or before the  date  it
      becomes a Lender or a Fronting Bank (or, following that date, by not less
      than  five  (5)  Business  Days' written notice) as the office or offices
      through which it will perform its obligations under this Agreement.

      "FEE LETTERS" means any letter  or  letters dated on or about the date of
      this Agreement between the Mandated Lead  Arrangers  and  the Company (or
      the  Facility  Agent  or  the Security Agent or a Fronting Bank  and  the
      Company) setting out any of the fees referred to in Clause 13 (Fees).

      "FINANCE DOCUMENTS" means this  Agreement,  any  Fee Letter, any Security
      Document,  any  Accession  Letter,  any Hedging Agreement,  any  Transfer
      Certificate, any Subfacility Document  and  any other document designated
      as  such  by the Facility Agent and the Company  and  "FINANCE  DOCUMENT"
      means any of them.

      "FINANCE PARTIES"  means the Documentation Agent, the Facility Agent, the
      Security  Agent,  the   Mandated  Lead  Arrangers,  a  Fronting  Bank,  a
      Subfacility Bank, and the Lenders and "FINANCE PARTY" means any of them.

      "FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect of:

      (a)    moneys borrowed and debt balances at banks;

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

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

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

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

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


                                        8

<PAGE>


             avoidance  of doubt,  this does not  include any  deferred  payment
             arrangements with trade creditors as customary in the industry;

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

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

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

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

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

      "FINANCIAL QUARTER" means each of those periods of approximately thirteen
      weeks ending on any Quarter Date in each financial year.

      "FRONTING BANK" means Bayerische Hypo- und Vereinsbank AG,  Deutsche Bank
      AG and Dresdner Bank as issuers of the Existing L/Cs.

      "FRONTING  FEE"  means  the  fronting  fee determined in accordance  with
      Clause  13.6  (Fronting Fee) and to be paid  to  each  Fronting  Bank  in
      accordance with Clause 5.9  (Existing L/Cs).

      "GROUP" means the  Company  and  its  Subsidiaries  from time to time and
      "MEMBER OF THE GROUP" shall be construed accordingly.

      "GROUP STRUCTURE CHART" means a group structure chart  of  the  Group, in
      agreed  form, delivered by the Company to the Facility Agent pursuant  to
      Clause 4 (Conditions of Utilisation).

      "GUARANTOR"  means  an  Original  Guarantor  or  an Additional Guarantor,
      unless  it  has  ceased  to be a Guarantor in accordance  with  Clause 26
      (Changes to the Obligors).

      "GUARANTOR ACCESSION LETTER"  means  a document substantially in the form
      set out in Part II of Schedule 6 (Form of Accession Letter).

      "HEDGE COUNTERPARTY" means any financial  institution  that is a party to
      an outstanding Hedging Agreement with any member of the  Group  from time
      to  time  and entitled to the same security rights as the Finance Parties
      under this Agreement after accession to the Security Trust Agreement upon
      notification  to  the Security Agent by the Company pursuant to the terms
      of the Security Trust  Agreement.  Such  Hedge  Counterparty will benefit
      from   the   Transaction   Security   up   to  its  Hedge  Counterparty's
      Participation Amount as notified by the Company.  The Security Agent will
      keep  updated  lists of the Hedging Counterparties and  their  respective
      Hedge Counterparty's  Participation  Amounts  by  means  of  the  List of
      Secured Parties

      "HEDGE   COUNTERPARTIES  MAXIMUM  SECURED  AMOUNT"  means  an  amount  of
      e 45,000,000  at  maximum  which will be applied from the proceeds of the
      enforcement of the Transaction

                                       9

<PAGE>

      Security pursuant to the provisions  of  the  Security Trust Agreement in
      order  to  discharge the claims of any Hedge Counterparty  in  accordance
      with the respective Hedge Counterparty's Participation Amount as notified
      by the Company.

      "HEDGE COUNTERPARTY'S  PARTICIPATION  AMOUNT" has the meaning ascribed to
      such term in the Security Trust Agreement.

      "HEDGING AGREEMENTS" means each of the  agreements  entered into or to be
      entered  into  between the members of the Group and hedge  counterparties
      for the purpose  of  hedging interest rate liabilities and currency risks
      in accordance with Clause 23.28 (Hedging).

      "HITCO OPTIONS" means  (i)  the  option  exercisable under a shareholders
      agreement between Hitco Carbon Composites,  Inc.  and Paul W. Pendorf and
      (ii)  the  option  exercisable  under an option agreement  between  Hitco
      Carbon Composites, Inc. and AMT II,  each  as described in more detail in
      the  annual report on Form 20-F filed with the  Securities  and  Exchange
      Commission on 1 July 2002.

      "HOLDING  COMPANY"  means,  in  relation to a company or corporation, any
      other company or corporation in respect of which it is a Subsidiary.

      "IAS" means International Accounting  Standards  generally  accepted  and
      consistently applied.

      "INFORMATION  MEMORANDUM"  means  the  document  dated  5  November  2002
      concerning  the Company and the Group which, at the Company's request and
      on its behalf,  has been prepared in relation to this transaction, agreed
      between the Mandated  Lead  Arrangers  and  the  Company, approved by the
      Company and distributed by the Mandated Lead Arrangers  prior to the date
      of this Agreement to the Original Lenders.

      "INITIAL MARGIN" means 2.75 per cent. per annum.

      "INSURANCE  PROCEEDS"  means  the  total proceeds of any insurance  claim
      intended  to  compensate  for damage to  any  asset  or  interruption  of
      business received by any member of the Group, after deducting:

      (a)    any reasonable out of  pocket  expenses  incurred by any member of
             the Group in relation to such a claim;

      (b)    proceeds relating to third party claims, which are applied towards
             meeting such claims; and

      (c)    Taxes paid (or reasonably estimated to be  payable)  by any member
             of the Group in respect of such claims.

      "INTELLECTUAL  PROPERTY" means any and all rights and interests  existing
      now or in the future  in  any  part  of  the  world  in  or  relating  to
      registered  and unregistered trade marks and service marks, domain names,
      patents, registered designs, utility models, trade names, business names,
      titles,  registered   or   unregistered   copyrights   in  published  and
      unpublished   works,  unregistered  designs,  inventions  registered   or
      unregistered, data base rights, know-how, any other intellectual property
      rights and any  applications  for  any  of the foregoing and any goodwill
      therein.

                                       10

<PAGE>


      "INTELLECTUAL PROPERTY RIGHTS" means any  Intellectual  Property owned by
      any member of the Group.

      "INTEREST PERIOD" means, in relation to a Loan, each period determined in
      accordance  with  Clause 11  (Interest  Periods  and  the Term)  and,  in
      relation  to  an  Unpaid  Sum, each period determined in accordance  with
      Clause 10.6 (Default Interest and Penalty).

      "INTRA-GROUP LOAN" means any loan between members of the Group.

      "INTRA-GROUP LOAN DOCUMENT"  means  any  document,  in  the  agreed form,
      setting  out  the  terms  on  which  an  Intra-Group  Loan  is to be made
      available in accordance with the terms of this Agreement.

      "ISSUING BANKS" means each of the creditors having issued the  Letter  of
      Credit  II  in their capacity as Lender pursuant to their respective Term
      Facility B Commitment  at  the  time  when  such  Letter of Credit II was
      issued.

      "JOINT  VENTURE"  means  any  joint  venture entity, whether  a  company,
      unincorporated   firm,  undertaking,  association,   joint   venture   or
      partnership or any other entity.

      "KFW" means Kreditanstalt fur Wiederaufbau.

      "KFW INDEBTEDNESS"  means  at  the  date  of this Agreement the Financial
      Indebtedness  of  the  Company outstanding to  KfW  under  the  KfW  Loan
      Agreement dated 30 January 2002.

      "KFW LOAN AGREEMENT" means the loan agreement entered into by the Company
      and KFW dated 30 January 2002 as amended from time to time.

      "LENDER" means:

      (a)   any Original Lender; and

      (b)   anybank  or  financial  institution  which  has  become  a Party  in
            accordance with Clause 25 (Changes to the Lenders),

      which in each case has not ceased to  be  a  Party in accordance with the
      terms of this Agreement and shall include any Lender in its capacity as a
      Subfacility Bank.

      "LETTER OF CREDIT " means (i) collectively, the Existing L/Cs upon Deemed
      Facility B Utilisation and/or (ii) the Letter of Credit II, respectively.

      "LETTER OF CREDIT II" means the letter of credit  of  up  to an amount of
      e 80,200,000, plus interest accruing thereon at 6.04 per cent.  per annum
      since 24 October 2001, issued or to be issued by the Issuing Banks  under
      Term  Facility B by way of replacement of the Existing L/Cs substantially
      in the  form  set out in Schedule 14 (Form of Letter of the Credit) or in
      such other form  requested  by  the  Company  which  is acceptable to the
      Facility Agent and the Issuing Banks.

      "LETTER OF CREDIT AMOUNT" means:

      (a)   each sum paid, or due and payable,  by an Issuing Bank or a Fronting
            Bank to the  beneficiary of a Letter of Credit pursuant to the terms
            of the respective Letter of Credit; and

                                       11

<PAGE>


      (b)    all liabilities, costs (including,  without  limitation, any costs
             incurred  in funding any amount which falls due  from  an  Issuing
             Bank or a Fronting  Bank  under  the  Letter  of  Credit), claims,
             losses  and  expenses  which  that  Issuing Bank or Fronting  Bank
             incurs  or  sustains under or in connection  with  the  respective
             Letter of Credit,

      in  each  case which has  not  been  reimbursed  pursuant  to  Clause 8.2
      (Company's Indemnity to Lenders).

      "LETTER OF CREDIT COMMISSION PERIOD" means, save as otherwise provided in
      this Agreement,  any of those periods mentioned in Clause 13.4 (Letter of
      Credit Commission).

      "LETTER OF CREDIT  PROPORTION"  means, (i) in relation to an Issuing Bank
      and/or a Term Facility B Lender in respect of the Letter of Credit II and
      save as otherwise provided in this  Agreement,  the proportion (expressed
      as a percentage) borne by that Issuing Bank's or Term Facility B Lender's
      Available  Commitment  in respect of Term Facility  B  to  the  Available
      Facility immediately prior to the issue of the Letter of Credit II and/or
      (ii) in relation to a Term  Facility  B Lender in respect of the Existing
      L/Cs and save as otherwise provided in  this  Agreement,  the  proportion
      (expressed  as  a  percentage)  borne  by  that  Term Facility B Lender's
      Available  Commitment  in  respect of Term Facility B  to  the  Available
      Facility immediately prior to  the  Deemed  Facility  B  Utilisation,  as
      applicable in each case.

      "LIBOR" means, in relation to any Loan not in Euros:

      (a)    the applicable Screen Rate; or

      (b)    (if no Screen Rate is available for the currency or period of that
             Loan)  the  arithmetic  mean of the rates (rounded upwards to four
             decimal places) as supplied  to  the Facility Agent at its request
             quoted  by  the  Reference  Banks to Prime  Banks  in  the  London
             interbank market,

      as  of  the  Specified Time on the Quotation  Day  for  the  offering  of
      deposits in the  currency of that Loan and for a period comparable to the
      Interest Period for that Loan.

      "LMA" means the Loan Market Association.

      "LOAN" means a Term  Facility  A  Loan,  the  Term  Facility  C Loan or a
      Revolving   Credit   Facility   Loan   and  "LOANS"  shall  be  construed
      accordingly.

      "LONDON BUSINESS DAY" means a day (other  than  a  Saturday or Sunday) on
      which banks are open for general business in London.

      "MAJORITY LENDERS" means:

      (a)   if there are no Loans or the Letter of Credit  then  outstanding,  a
            Lender or Lenders whose  Commitments  aggregate more than 66 2/3% of
            the  Total  Commitments  (or,  if the  Total  Commitments  have been
            reduced  to  zero,  aggregated  more  than  66  2/3%  of  the  Total
            Commitments immediately prior to the reduction); or

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

      "MANDATORY  CASH  COLLATERAL" means Cash Collateral that the Company must
      provide in relation  to interest accruing on the Letter of Credit from 24
      October 2002 onwards.

                                       12

<PAGE>


      "MANDATORY COST" means  the  percentage  rate per annum calculated by the
      Facility Agent in accordance with Schedule 4 (Mandatory Cost Formula).

      "MANAGEMENT AND EMPLOYEE BENEFIT PLANS" means  (i) the stock option plan,
      the  matching shares plan, the share bonus plan and  the  employee  share
      ownership  plan,  each relating to shares in the Company and each adopted
      in the ordinary shareholders' meeting of the Company on 27 April 2000 and
      (ii) the stock option plan relating to shares in Hitco Carbon Composites,
      Inc. adopted in January  2002,  each  as  described in more detail in the
      annual  report  on  Form  20-F  filed  with the Securities  and  Exchange
      Commission in 1 July 2002.

      "MANDATORILY DISCHARGED INDEBTEDNESS" means  any Existing Indebtedness of
      the  Borrowers  as  identified  in  Schedule 17 hereto  which  is  to  be
      discharged by the Borrowers from the proceeds of the first Utilisation of
      Term Facility A pursuant to Clause 23.37.

      "MARGIN" means the percentage rate per  annum  determined  in  accordance
      with Clause 10.2 (Margin Ratchets) to Clause 10.4 (No Margin Ratchets  in
      Default) (inclusive).

      "MATERIAL ADVERSE EFFECT" means a material adverse effect on:

      (a)   the  business,   operations,   property,   condition  (financial  or
            otherwise) or prospects of the Group taken as whole;

      (b)   the   ability  of  any  Obligor  to  perform  and  comply  with  its
            obligations under any Finance Document;

      (c)   the validity,  legality or enforceability of any Finance Document or
            any  rights or  remedies  of any  Finance  Party  under any  Finance
            Document; or

      (d)   the validity,  legality or  enforceability  of any Security  created
            pursuant to the Security Documents or on the priority and ranking of
            any such Security.

      "MATERIAL SUBSIDIARY" means:

      (a)   any company listed in Schedule 13 (Current  Material  Subsidiaries);
            and

      (b)   any  member of the  Group  having  more  than five (5) per cent.  of
            EBITDA and/or  turnover of the Group by reference to the most recent
            respective annual audited financial statements.

      "MONTH" means a period starting on one day in a calendar month and ending
      on  the numerically corresponding day in the next calendar month,  except
      that:

      (a)   (subject to paragraph  (c) below) if the  numerically  corresponding
            day is  not a  Business  Day,  that  period  shall  end on the  next
            Business Day in that  calendar  month in which that period is to end
            if there is one,  or if there is not, on the  immediately  preceding
            Business Day;

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

      (c)   for the purpose of determining  the last day of an Interest  Period,
            if an Interest  Period begins on the last Business Day of a calendar
            month, that Interest Period

                                       13

<PAGE>


      shall  end  on  the last Business Day in the calendar month in which that
      Interest Period is to end.

      The above rules (a)  to  (c)  will  only  apply  to the last Month of any
      period.

      "MULTIEMPLOYER PLAN" means a "MULTIEMPLOYER PLAN"  as  defined in section
      4001(a)(3) of ERISA, maintained or contributed to for employees  of  a US
      Group Member or any ERISA Affiliate.

      "NET PROCEEDS" means, in relation to:

      (a)    any  disposal  of  an  asset  by  a member of the Group, the total
             proceeds of such disposal received  by  such  member of the Group,
             after deducting:

             (i)   any out of pocket costs and expenses incurred  by any member
                   of the Group in respect of such disposal;

             (ii)  the  unpaid  balance  on  the date of such disposal  of  any
                   Permitted Indebtedness which must be repaid by the seller on
                   such disposal (together with  any  premium, interest or fees
                   required to be paid in connection therewith);

             (iii) Taxes paid (or reasonably estimated  to  be  payable) by any
                   member of the Group in connection with such disposal; and

             (iv)  in the case of a disposal effected by a member of the Group,
                   other  than a Borrower, such provision as is reasonable  for
                   all costs  and  Taxes  incurred  by  the  Group  and  fairly
                   attributable to upstreaming the cash proceeds or making  any
                   distribution in connection with such proceeds to enable them
                   to  reach  a Borrower by such means as results in the lowest
                   possible liability in respect of costs and Taxes; and

      (b)    any Debt Issue and/or  any  Equity Issue by a member of the Group,
             the total proceeds of such issue  received  by  such member of the
             Group, after deducting:

             (i)   any out of pocket costs and expenses incurred  by any member
                   of the Group in respect of such issue; and

             (ii)  Taxes  paid (or reasonably estimated to be payable)  by  any
                   member of the Group in connection with such issue.

      "OBLIGORS" means each  Borrower and each Guarantor and "OBLIGOR" shall be
      construed accordingly.

      "ORIGINAL OBLIGOR" means an Original Borrower or an Original Guarantor.

      "OUTSTANDINGS" means, at  any  time,  the aggregate of the amounts of the
      outstanding Loans  and the maximum actual  and  contingent liabilities of
      the Fronting Banks upon a Deemed Facility B Utilisation or Issuing Banks,
      as the case may be, in respect of the outstanding Letter of Credit.

      "PARTICIPATING  MEMBER  STATE"  means any member state  of  the  European
      Communities that adopts or has adopted the Euro as its lawful currency in
      accordance with legislation of the  European  Union  relating to European
      Monetary Union.

                                       14

<PAGE>


      "PARTY"  means a party to this Agreement and includes its  successors  in
      title, permitted assigns and permitted transferees.

      "PBGC" means  the  US Pension Benefit Guaranty Corporation, or any entity
      succeeding to all or any of its functions under ERISA.

      "PERMITTED ACQUISITIONS" means Acquisitions:

      (a)   made in the ordinary course of business; and/or

      (b)   where the  consideration for such Acquisitions in aggregate does not
            exceed e  10,000,000  (or its  equivalent  in  another  currency  or
            currencies) per annum; and/or

      (c)   where the  consideration for such Acquisitions in aggregate does not
            exceed 25 per cent. of the net proceeds of any Equity Issue realised
            after the date of this Agreement,

      PROVIDED THAT where any assets are so acquired by any Obligor such assets
      are  not  subject  to  any material liabilities or to Security other than
      Permitted Security.

      "PERMITTED DISPOSAL" means:

      (a)    disposals made on  customary  terms  in  the  ordinary  course  of
             trading of the disposing entity;

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

      (c)    disposals between members of the Group PROVIDED THAT if the assets
             are pledged or assigned in favour  of  the Security Agent prior to
             the disposals that they remain subject to  the  same or equivalent
             security  after  the  disposal  and  FURTHER  PROVIDED  THAT  this
             disposal  does  not  include  a  disposal  by  an Obligor  or  its
             Subsidiary to a member of the Group which is not an Obligor or its
             Subsidiary;

      (d)    disposals  on  arm's  length terms of any surplus or  obsolete  or
             worn-out assets which in  the  reasonable opinion of the member of
             the Group making the disposal are  not  required for the efficient
             operation of the business of the Group as a whole or by any member
             of the Group;

      (e)    disposals of Cash Equivalents on arm's length terms;

      (f)    disposals of cash where such disposal is  not otherwise prohibited
             by the Finance Documents;

      (g)    disposals constituted by the creation of any Permitted Security;

      (h)    a sale or securitisation of receivables only to the extent that it
             is  entered into with the prior written consent  of  the  Majority
             Lenders;

      (i)    any disposal constituted by the proposed merger between SGL Carbon
             S.A., Sacz, Poland and ZEW S.A., Raciborz, Poland; or

      (j)    disposals  where  the  higher of the market value or consideration
             receivable (when aggregated with the higher of the market value or
             consideration receivable for any

                                       15

<PAGE>


            other  sale,  lease,  transfer  or other  disposal,  other  than any
            permitted  under  paragraphs  (a) to (i)  above)  does not  exceed e
            25,000,000 (or its equivalent in another  currency or currencies) in
            any financial year.

      "PERMITTED GUARANTEES AND CONTINGENT LIABILITIES" means:

      (a)    any guarantees and indemnities required by the Finance Documents;

      (b)    any guarantees and indemnities given by any member of the Group in
             the ordinary course of and  on  terms customary in its business in
             respect of obligations not constituting Financial Indebtedness;

      (c)    any guarantees constituting Permitted Indebtedness;

      (d)    any guarantees issued by any member  of  the  Group  in respect of
             liabilities of an Obligor, or an Affiliate of an Obligor which are
             secured  by  any  Security  contemplated  in Schedule 11 (Form  of
             Security Trust Agreement); and

      (e)    any guarantees and indemnities to which the Facility Agent (acting
             on the instructions of the Majority Lenders)  shall have given its
             prior written consent.

      "PERMITTED INDEBTEDNESS" means any Financial Indebtedness:

      (a)    arising under or permitted pursuant to the Finance Documents;

      (b)    to the extent that such Financial Indebtedness  is subordinated on
             terms acceptable to the Majority Lenders (acting reasonably);

      (c)    arising  under  any  Existing  Indebtedness,  PROVIDED  THAT  such
             Financial  Indebtedness is repaid or prepaid in  full  by  way  of
             Utilisations of Term Facility A;

      (d)    arising under  any  KfW  Indebtedness,  PROVIDED THAT the KfW Loan
             Agreement  governing  such Financial Indebtedness  is  temporarily
             replaced  until  Termination  Date  by  way  of  Utilisation  Term
             Facility C by the terms of this Agreement;

      (e)    arising under Permitted Loans;

      (f)    arising under Permitted Guarantees and Contingent Liabilities;

      (g)    arising   under  and   permitted   by   Clause   23.27   (Treasury
             Transactions) and Clause 23.28 (Hedging);

      (h)    to which the Majority Lenders shall have given their prior written
             consent;

      (i)    in respect  of  current  accounts  payable  and  accrued  expenses
             incurred in the ordinary course of business;

      (j)    incurred  under leasing arrangements existing at the date of  this
             Agreement in  an  amount  not  exceeding  a  net  present value of
             e 5,000,000 at any time;

      (k)    incurred  for  leasing  arrangements  over assets in the  ordinary
             course of business in an amount not exceeding  a net present value
             of e 5,000,000 at any time

                                       16

<PAGE>


      (l)    incurred  by  the  Company  and  arising  under  unsecured,   non-
             amortising term loans maturing after the Termination Date;

      (m)    incurred by an Obligor other than the Company, individually in  an
             amount  not  exceeding e 1,000,000 at any time and in aggregate in
             an amount not  exceeding  e 10,000,000 at any time (which may also
             be guaranteed by the Company);

      (n)    incurred  by  a  member of the  Group  that  is  not  an  Obligor,
             individually in an  amount  not  exceeding e 5,000,000 at any time
             and in aggregate in an amount not  exceeding  e 25,000,000  at any
             time (which may also be guaranteed by the Company);

      (o)    subject  to  the  provisions of this Agreement, incurred under the
             Existing L/Cs;

      (p)    in  the  case  of the  acquisition  of  Fortafil,  an  amount  not
             exceeding e 10,000,000  of state subsidised Financial Indebtedness
             of such company;

      (q)   incurred with banks or financial  institutions  providing lines for
            commercial    letters   of   credit   and   guarantees   (including
            confirmations and  avals)  for  the Group and having registered the
            maximum amount and tenor of such  lines  (with  the approval of the
            Company) with the Security Agent PROVIDED THAT the aggregate amount
            of such lines shall not at any time be in excess  of  e 100,000,000
            (or its equivalent in another currency or currencies),  which banks
            or financial institutions are at the date of this Agreement  or  at
            any  time  hereafter  a  creditor  and accede to the Security Trust
            Agreement and therefore benefit from  the Transaction Security as a
            Secured Creditor PROVIDED THAT any such  creditor shall cease to be
            a Secured Creditor if:

             (A)   the Company so notifies the Security Agent; and

             (B)   such Secured Creditor confirms in writing  to  the  Security
                   Agent  that all  claims in respect to the relevant Financial
                   Indebtedness incurred have been satisfied in full;

      (r)   incurred by SGL  Carbon  S.A.,  Nowy Sacz,, ZEW S.A., Raciborz, and
            SGL Angraph SP.ZO.O., all of them Poland, in an aggregate amount of
            an equivalent of e 15,000,000, granted  by  BNP  Paribas Bank Polsk
            S.A., Poland, pursuant to a bilateral credit facility  based  on  a
            certain term sheet dated 26 November 2002, providing for a facility
            not  maturing  before  31 May 2005 on which no repayments are to be
            made prior to this date;

      (s)   not falling within paragraphs  (a)  to  (r) above PROVIDED THAT the
            aggregate  amount  of Financial Indebtedness  falling  within  this
            paragraph (s) does not  exceed  e 10,000,000  (or its equivalent in
            another currency or currencies) at any time.

      "PERMITTED LOANS" means:

      (a)    trade  credit  given by any member of the Group  in  the  ordinary
             course of and on terms customary in its business;

      (b)    any loans to employees  under  benefit  schemes PROVIDED THAT such
             loans do not exceed e 5,000,000 at any time;

      (c)    any Intra-Group Loan, PROVIDED THAT:

                                       17

<PAGE>


            (i)   such  Intra-Group  Loan is  specified  in the Group  Structure
                  Chart;

            (ii)  the  borrower of such  Intra-Group  Loan is an Obligor and the
                  lender is another Obligor or a non-Obligor;

            (iii) the borrower of such  Intra-Group  Loan is a non-Obligor,  the
                  lender is an Obligor and the aggregate  outstandings from such
                  Intra-Group Loans do not exceed e 25,000,000 at any time; or

            (iv)  neither the borrower nor the lender of such  Intra-Group  Loan
                  are Obligors; and

      (d)   any loans to which the Majority Lenders shall have given their prior
            written consent.

      "PERMITTED SECURITY" means:

      (a)   any Security listed in Schedule 8 (Existing  Security) except to the
            extent that the principal  amount  secured by that Security  exceeds
            the amount stated in that Schedule;

      (b)   any netting or set-off arrangement entered into by any member of the
            Group in the  ordinary  course of its banking  arrangements  for the
            purpose of netting debit and credit balances (but not any netting or
            set-off  relating  to such  hedging  agreement  in  respect  of cash
            collateral  or any  other  Security  except as  otherwise  permitted
            hereunder);

      (c)   any lien arising by  operation of law and in the ordinary  course of
            trading other than by reason of default, PROVIDED THAT any such lien
            (other than a landlord's lien  (Vermieterpfandrecht) or contractor's
            lien  (Werkunternehmerpfandrecht)  existing in respect of agreements
            made prior to the date of this  Agreement) is discharged  within ten
            (10) days after having arisen;

      (d)   any  Security  over any  assets of any member of the Group (if any),
            existing  at the date of this  Agreement,  PROVIDED  THAT the amount
            thereby  secured is not  increased  and further  PROVIDED  THAT such
            Security  shall be  released  as soon as  possible  but in any event
            prior to or concurrently with the Closing Date;

      (e)   any Security over or affecting any asset acquired by a member of the
            Group after the date of this Agreement if:

            (i)   the  Security  was  not  created  in   contemplation   of  the
                  acquisition of that asset by a member of the Group;

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

            (iii) the Security is removed or discharged  within three (3) Months
                  of the date of acquisition of such asset;

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

                                       18

<PAGE>

             (i)   the  Security  was  not  created  in  contemplation  of  the
                   acquisition of that company;

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

             (iii) the  Security  is  removed  or  discharged  within three (3)
                   Months of that company becoming a member of the Group;

      (g)   any retention of title arrangement entered into by any member of the
            Group  in  the  normal  course  of  its  trading  activities  on the
            counterparty's standard or usual terms to the extent that such terms
            are customary;

      (h)   any lien in favour of a bank over  goods and  documents  of title to
            goods  arising  in  the  ordinary   course  of  documentary   credit
            transactions  entered into in the ordinary  course of trade PROVIDED
            THAT such lien is discharged within fifteen (15) days of arising;

      (i)   any Security  arising under the general  business  conditions of any
            German  credit  institution   (Kreditinstitut)  or  similar  foreign
            institution  with  whom a member of the  Group  maintains  a banking
            relationship in its ordinary course of business;

      (j)   any  Security   arising  by  operation  of  law  in  favour  of  any
            governmental,   state  or  local  authority  in  respect  of  taxes,
            assessments or government  charges which are being  contested by the
            relevant member of the Group in good faith;

      (k)   any  security  (restricted  to  mortgages,  charges to  equipment or
            inventory,assignment  of  accounts  receivables,   pledges  of  bank
            accounts or assignment of  intellectual  property  rights)  securing
            indebtedness   not   exceeding    indebtedness    under   "Permitted
            Indebtedness"  para.  (r) and being  limited  to assets  located  or
            generated in Poland (real  estate,  equipment,  inventory,  accounts
            receivables,  bank accounts or intellectual  property rights) of the
            relevant borrowers identified in "Permitted Indebtedness" para. (r);

      (l)   any Security securing indebtedness the principal  amount  of  which
            (when   aggregated   with   the   principal  amount  of  any  other
            indebtedness which has the benefit  of  Security  (other  than  any
            Security  permitted  under  paragraphs  (a) to (k) above)) does not
            exceed  e 10,000,000  (or  its equivalent in  another  currency  or
            currencies);

      (m)   any Security to which the Majority  Lenders  shall have given their
            prior written consent (PROVIDED THAT the principal  amount  of  the
            indebtedness secured by such Security shall not be increased beyond
            the amount expressly so permitted); and

      (n)    any of the Security created pursuant to the Security Documents.

      "PREPAYMENT  ACCOUNT"  means an interest-bearing account or accounts held
      with the Facility Agent  (or  such other financial institution reasonably
      acceptable  to the Facility Agent)  in  the  name  of  the  Company  (and
      identified as  a  Prepayment  Account)  and pledged to the Security Agent
      into which sums are deposited in accordance with Clause 9 (Prepayment and
      Cancellation) and may not be withdrawn by  any  member of the Group other
      than as provided for in Clause 9 (Prepayment and Cancellation).

                                       19

<PAGE>

      "PRIME BANK" means a financial institution with a  rating  of  not  lower
      than  A1  (Moody's  Investor  Services,  Inc.)  or  A+ (Standard & Poor's
      Corporation).

      "QUARTER  DATE"  means  each  of 31 March, 30 June, 30 September  and  31
      December.

      "QUOTATION DAY" means, in relation  to  any  period for which an interest
      rate is to be determined:

      (a)    (if the currency is Euro) two (2) TARGET Days before the first day
             of that period; or

      (b)    (for any other currency) two (2) London  Business  Days before the
             first day of that period,

      unless  market  practice differs in the Relevant Interbank Market  for  a
      currency, in which  case  the  Quotation  Day  for  that currency will be
      determined  by the Facility Agent in accordance with market  practice  in
      the Relevant  Interbank Market (and if quotations would normally be given
      by leading banks  in  the Relevant Interbank Market on more than one day,
      the Quotation Day will be the last of those days).

      "REFERENCE BANKS" means  Deutsche Bank Luxembourg S.A., Dresdner Bank AG,
      Commerzbank Aktiengesellschaft  and  the  principal offices of such other
      banks  or  financial institutions as may from  time  to  time  be  agreed
      between the Company and the Facility Agent.

      "REGULATIONS  T,  U AND X" means, respectively, Regulations T, U and X of
      the Board of Governors of the Federal Reserve System of the United States
      (or any successor).

      "RELEVANT GAAP" means:

      (a)    in respect of the Company, IAS; and

      (b)    in respect of  any  other  member  of  the  Group (either alone or
             including  its  Subsidiaries)  the  generally accepted  accounting
             principles and practices of its jurisdiction of incorporation.

      "RELEVANT  INTERBANK MARKET" means, in relation  to  Euro,  the  European
      interbank market  and,  in  relation  to  any  other currency, the London
      interbank market.

      "RELEVANT JURISDICTION" means, in respect of any person, the jurisdiction
      of the country in which such person is incorporated  and,  if  different,
      where  it  is  resident or has its principal place of business, and  each
      jurisdiction or  state  in  which it owns or leases property or otherwise
      conducts its business.

      "RELEVANT PERIOD" has the meaning  given  to it in Clause 22.1 (Financial
      Definitions).

      "REPEATING REPRESENTATIONS" means each of the  representations set out in
      Clause  20.2  (Status)  to  Clause 20.8 (Governing Law  and  Enforcement)
      (inclusive), Clause 20.11 (No  Default and no Material Adverse Effect) to
      Clause 20.25 (No Immunity) (inclusive), Clause 20.28 (Budgets), paragraph
      (c) of Clause 20.29 (Group Structure  Chart)  and Clause 20.31 (ERISA and
      Multiemployer Plans) to Clause 20.33 (Investment Companies) (inclusive).

      "REVOLVING  CREDIT  FACILITY"  means  the revolving  loan  facility  made
      available under this Agreement as described in Clause 2.1(d).

                                       20

<PAGE>


      "REVOLVING CREDIT FACILITY CANCELLATION  DATE"  means  a  date on which a
      cancellation  of  the  whole  or part of the Available Facility  for  the
      Revolving Credit Facility is to  be  made  under  Clause 9.10  (Voluntary
      Cancellation)   as   specified   in   the  relevant  notice  given  under
      Clause 9.10(a).

      "REVOLVING CREDIT FACILITY COMMITMENT" means:

      (a)    in relation to an Original Lender,  the  Euro  Amount set opposite
             its name under the heading "Revolving Credit Facility  Commitment"
             in  Part  II  of  Schedule  1 (The Original Parties) and the  Euro
             Amount  of  any  other  Revolving   Credit   Facility   Commitment
             transferred to it under this Agreement; and

      (b)    in  relation to any other Lender, the Euro Amount of any Revolving
             Credit Facility Commitment transferred to it under this Agreement,

      to the extent  not  cancelled, reduced or transferred by it in accordance
      with this Agreement.

      "REVOLVING CREDIT FACILITY FINAL REPAYMENT DATE" means 31 May 2005.

      "REVOLVING CREDIT FACILITY  LENDER"  means  a  Lender  providing Loans in
      accordance with the Revolving Credit Facility.

      "REVOLVING CREDIT FACILITY LOAN" means a loan made or to  be  made  under
      the Revolving Credit Facility or the principal amount outstanding for the
      time being of that loan.

      "REVOLVING   CREDIT  FACILITY  OUTSTANDINGS"  means,  at  any  time,  the
      aggregate  of the  Euro  Amounts  of  the  outstanding  Revolving  Credit
      Facility Loans.

      "ROLLOVER LOAN" means one or more Revolving Credit Facility Loans:

      (a)   made or to be made on the same day that a maturing  Revolving Credit
            Facility Loan is due to be repaid;

      (b)   the aggregate  amount of which is equal to or less than the maturing
            Revolving Credit Facility Loan;

      (c)   in the same currency as the maturing  Revolving Credit Facility Loan
            (unless  it  arose  as a  result  of the  operation  of  Clause  6.2
            (Unavailability of Dollars)); and

      (d)    made  or to be made for the purpose of refinancing  such  maturing
             Revolving Credit Facility Loan.

      "SCREEN RATE" means:

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

      (b)   in relation  to LIBOR,  the British  Bankers'  Association  Interest
            Settlement Rate for the relevant currency and period,

      displayed  on  the appropriate page of the Reuters screen.  If the agreed
      page is replaced  or  service  ceases to be available, the Facility Agent
      may specify another page or service displaying the appropriate rate after
      consultation with the Company and the Lenders.

                                       21

<PAGE>


      "SECURED CREDITOR" means any bank  or  financial  institution  which is a
      creditor  of  any  member  of  the Group under any Permitted Indebtedness
      Agreement (as defined in the Security  Trust Agreement) from time to time
      and entitled to the same security rights  as  the  Finance  Parties under
      this  Agreement  after  accession  to  the Security Trust Agreement  upon
      notification to the Security Agent by the  Company  pursuant to the terms
      of the Security Trust Agreement. Such Secured Creditor  will benefit from
      the  Transaction  Security  up  to  its  Secured Creditor's Participation
      Amount as notified by the Company. The Security  Agent  will keep updated
      lists  of  the Secured Creditors and their respective Secured  Creditor's
      Participation Amounts by means of the List of Secured Parties.

      "SECURED  CREDITORS   MAXIMUM   SECURED   AMOUNT   means   an  amount  of
      e 100,000,000 at maximum which will be applied from the proceeds  of  the
      enforcement of the Transaction Security pursuant to the provisions of the
      Security  Trust Agreement in order to discharge the claims of any Secured
      Creditor  in   accordance   with   the   respective   Secured  Creditor's
      Participation Amounts as notified by the Company.

      "SECURED  CREDITOR'S  PARTICIPATION AMOUNT" has the meaning  ascribed  to
      such term in the Security Trust Agreement.

      "SECURED PARTIES" means  the  Finance Parties, the Hedging Counterparties
      and the Secured Creditors, each a "Secured Party".

      "SECURITY"  means a mortgage, charge,  pledge,  lien  or  other  security
      interest securing  any obligation of any person or any other agreement or
      arrangement having a similar effect.

      "SECURITY DOCUMENTS" means:

      (a)    each document referred to in paragraph 3 of Part I, in Part II and
             in paragraph  13  of  Part III of Schedule 2 (Conditions Precedent
             and Conditions Subsequent);

      (b)    any Cash Collateral Document; and

      (c)    any other document  entered  into  by  any  member  of  the  Group
             creating  or  evidencing  or  purporting  to  create  or  evidence
             Security for all or any part of the obligations of the Obligors or
             any of them under the Finance Documents or any of them.

      "SECURITY   TRUST   AGREEMENT"   means   the  security  trust  agreement,
      substantially in the form set out in Schedule  11 (Form of Security Trust
      Agreement)  to  be  made between, amongst others, the  Obligors  and  the
      Secured Parties.

      "SELECTION NOTICE" means  a  notice  substantially in the form set out in
      Part  II  of Schedule 3 (Requests) given  in  accordance  with  Clause 11
      (Interest Periods  and  the  Term)  in relation to Term Facility A and/or
      Term Facility C.

      "SPECIFIED TIME" means a time determined  in  accordance with Schedule 10
      (Timetables).

      "SUBFACILITIES" means any facilities made available by a Subfacility Bank
      pursuant  to  and  in  accordance with Clause 5.10  (Utilisation  of  the
      Subfacilities) and each not exceeding an amount of  e 10,000,000 in total
      at any given time and "SUBFACILITY" shall be construed accordingly.

                                       22

<PAGE>


      "SUBFACILITY BANK" means  each  Revolving  Credit  Facility  Lender which
      becomes a Subfacility Bank by operation of Clause 2.2 (Subfacilities).

      "SUBFACILITY  DOCUMENTS"  means  any  documents setting out the terms  on
      which the Subfacilities are made available as agreed between the relevant
      Borrower, Subfacility Bank and approved by the Facility Agent.

      "SUBSIDIARY"  means,  in  relation  to  any   company,   corporation   or
      partnership, a company, corporation or partnership:

      (a)    a  company,  corporation  or  partnership  which  is "controlled",
             directly   or   indirectly,  by  and  therefore  is  a  "dependent
             enterprise"(abhangiges  Unternehmen)  of  the  first  mentioned
             company,  partnership  or  corporation, in the case of the latter,
             within   the   meaning   of   Sec. 17    Stock   Corporation   Act
             (Aktiengesetz),  or  which is a "subsidiary"  (Tochterunternehmen)
             within the meaning of Sec. 290 Commercial Code (Handelsgesetzbuch)
             of such company, corporation or partnership;

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

      (c)    a partnership in which:

             (i)   there is a participation of more than  fifty  (50) per cent.
                   in  the  assets  of such partnership by the first  mentioned
                   company, corporation or partnership; or

             (ii)  the first mentioned  company, corporation or partnership has
                   the power to (A) cast,  or control the casting of, more than
                   fifty (50) per cent. of the  maximum  number  of  votes that
                   might  be  cast at a general meeting, (B) appoint or  remove
                   all, or the  majority  of, the directors or other equivalent
                   officers,  or  (C)  give  directions  with  respect  to  the
                   operating  and financial policies  which  the  directors  or
                   other equivalent  officers  thereof  are  obliged  to comply
                   with; or

            (iii)  in  the  case  of a limited partnership, the general partner
                   has control over  such  limited  partnership  and  the first
                   mentioned company, corporation or partnership has control of
                   the general partner,

      and,  for  this  purpose, a company, corporation or partnership shall  be
      treated as being controlled by another if that other company, corporation
      or partnership is  able  to  direct  its  affairs  and/or  to control the
      composition of its board of directors or equivalent body.

      "TARGET"   means  Trans-European  Automated  Real-time  Gross  Settlement
      Express Transfer payment system.

      "TARGET DAY"  means any day on which TARGET is open for the settlement of
      payments in Euro.

      "TAX" means any tax, levy, impost, duty or other charge or withholding of
      a similar nature (including any penalty or interest payable in connection
      with any failure to pay or any delay in paying any of the same).

                                       23

<PAGE>


      "TERM" means, in  relation  to  the Letter of Credit, the period from its
      Utilisation Date until its Expiry Date.

      "TERM  FACILITIES"  means Term Facility  A,  Term  Facility  B  and  Term
      Facility C, and "TERM FACILITY" shall be construed accordingly.

      "TERM FACILITY A" means  a  term  loan facility made available under this
      Agreement as described in Clause 2.1(a).

      "TERM FACILITY A COMMITMENT" means:

      (a)    in relation to an Original Lender,  the  Euro  Amount set opposite
             its name under the heading "Term Facility A Commitment" in Part II
             of Schedule 1 (The Original Parties) and the Euro  Amount  of  any
             other  Term  Facility A Commitment transferred to it in accordance
             with this Agreement; and

      (b)    in relation to  any  other  Lender,  the  Euro  Amount of any Term
             Facility  A Commitment transferred to it in accordance  with  this
             Agreement,

      to the extent not  cancelled,  reduced or transferred by it in accordance
      with this Agreement.

      "TERM FACILITY A FINAL REPAYMENT DATE" means 31 May 2005.

      "TERM  FACILITY A LOAN" means a loan  made  or  to  be  made  under  Term
      Facility A or the principal amount outstanding for the time being of that
      loan.

      "TERM FACILITY  A  OUTSTANDINGS" means, at any time, the aggregate of the
      Euro Amounts of the outstanding Term Facility A Loans.

      "TERM FACILITY A REPAYMENT DATE" means each of the dates specified in the
      table in Clause 7.1(a).

      "TERM  FACILITY  A REPAYMENT  INSTALMENT"  means,  in  relation  to  each
      Borrower of a Term  Facility  A  Loan  and each Term Facility A Repayment
      Date,  the  amount  by  which  the  aggregate  Euro  Amount  of  all  the
      outstanding Term Facility A Loans drawn by that Borrower is to be reduced
      on that Term Facility A Repayment Date in accordance with Clause 7.1(a).

      "TERM  FACILITY  B"  means  a term facility  made  available  under  this
      Agreement as described in Clause 2.1(b).

      "TERM FACILITY B COMMITMENT" means:

      (a)    in  relation  to an Original  Lender,  the  amount  in  Euros  set
             opposite its name  under  the heading "Term Facility B Commitment"
             in Part II of Schedule 1 (The  Original Parties) and the amount in
             Euros of any other Term Facility B Commitment transferred to it in
             accordance with this Agreement; and

      (b)    in relation to any other Lender,  the  amount in Euros of any Term
             Facility B Commitment transferred to it  in  accordance  with this
             Agreement,

      to  the  extent not cancelled, reduced or transferred by it in accordance
      with this Agreement.

                                       24

<PAGE>


      "TERM FACILITY B LENDER" means a Lender having committed funds under Term
      Facility B pursuant to its Term Facility B Commitment.

      "TERM FACILITY B OUTSTANDINGS" means the amount of the maximum actual and
      contingent  liabilities of the Fronting Banks and/or the Issuing Banks in
      respect of the issued Letter of Credit.

      "TERM FACILITY B REPAYMENT DATE" means 31 May 2005.

      "TERM FACILITY  C"  means  a term loan facility made available under this
      Agreement as described in Clause 2.1(c).

      "TERM FACILITY C COMMITMENT" means:

      (a)    in  relation  to an Original  Lender,  the  amount  in  Euros  set
             opposite its name  under  the heading "Term Facility C Commitment"
             in Part II of Schedule 1 (The Original Parties); and

      (b)    in relation to any other Lender,  the  amount in Euros of any Term
             Facility C Commitment transferred to it  in  accordance  with this
             Agreement,

      to  the  extent not cancelled, reduced or transferred by it in accordance
      with this Agreement.

      "TERM FACILITY  C  LOAN"  means  the  loan  made or to be made under Term
      Facility C or the principal amount outstanding for the time being of that
      loan.

      "TERM FACILITY C OUTSTANDINGS" means, at any  time,  the aggregate of the
      amount in Euros of the outstanding Term Facility C Loan.

      "TERM FACILITY C REPAYMENT DATE" means each of the dates specified in the
      table in Clause 7.3(a).

      "TERM  FACILITY  C REPAYMENT INSTALMENT" means the amount  by  which  the
      amount of the outstanding Term Facility C Loan drawn by the Company is to
      be reduced on a Term  Facility C Repayment Date in accordance with Clause
      7.3(a).

      "TERMINATION DATE" means  the  date  on  which  all  obligations  of  the
      Obligors  under this Agreement are discharged, except for any obligations
      arising under or in connection with Term Facility C. On Termination Date,
      the KfW Loan  Agreement  shall  be  re-instated  and  from  such date the
      relationship between the Company and the Lenders from time to  time under
      Term Facility C shall be governed by the KfW Loan Agreement only.

      "TOTAL  COMMITMENTS"  means  the  aggregate of the Total Term Facility  A
      Commitments,  the  Total Term Facility  B  Commitments,  the  Total  Term
      Facility  C  Commitments   and   the   Total  Revolving  Credit  Facility
      Commitments, being e 495,000,000 at the date of this Agreement.

      "TOTAL REVOLVING CREDIT FACILITY COMMITMENTS"  means the aggregate of the
      Revolving  Credit  Facility  Commitments,  being  e 55,000,000   (or  its
      equivalent) at the date of this Agreement.

      "TOTAL  TERM  FACILITY  A  COMMITMENTS"  means  the aggregate of the Term
      Facility  A  Commitments,  being  the  aggregate  e 335,000,000  (or  its
      equivalent) at the date of this Agreement.

                                       25

<PAGE>


      "TOTAL  TERM  FACILITY  B COMMITMENTS" means the aggregate  of  the  Term
      Facility B Commitments, being  up  to  e 85,000,000  at  the date of this
      Agreement.

      "TOTAL  TERM  FACILITY  C  COMMITMENTS" means the aggregate of  the  Term
      Facility  C  Commitments,  being   the  aggregate  e 20,000,000  (or  its
      equivalent) at the date of this Agreement.

      "TOTAL  TERM  FACILITY  COMMITMENTS" means  the  Total  Term  Facility  A
      Commitments,  the Total Term  Facility  B  Commitments and the Total Term
      Facility  C Commitments, and "TOTAL TERM FACILITY  COMMITMENT"  shall  be
      construed accordingly.

      "TRANSACTION  SECURITY"  means  any  Security  for all or any part of the
      obligations of the Obligors or any of them under the Finance Documents or
      any of them expressed to be created by or pursuant to, or to be evidenced
      in, the Security Documents or any of them.

      "TRANSFER CERTIFICATE" means a certificate substantially  in  one  of the
      forms  set out in Schedule 5 (Form of Transfer Certificates) or any other
      form agreed between the Facility Agent and the Company.

      "TRANSFER DATE" means, in relation to a transfer, the later of:

      (a)    the  proposed Transfer Date specified in the Transfer Certificate;
             and

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

      "TREASURY  TRANSACTION"  means any currency or interest purchase, cap  or
      collar agreement, forward  rate  agreement,  interest  rate  or  currency
      future or option contract, foreign exchange or currency purchase or  sale
      agreement,  interest  rate  swap, currency swap or combined interest rate
      and currency swap agreement and any other similar agreement.

      "UNPAID SUM" means any sum due and payable but unpaid by an Obligor under
      the Finance Documents.

      "US GROUP MEMBER" means any member of the Group incorporated, resident or
      with its principal place of business  in  the United States of America or
      any state thereof or which  owns or leases property or otherwise conducts
      business in the United States of America or any state thereof.

      "UTILISATION" means a utilisation of a Facility by way of Loan or (in the
      case of the Term Facility B) Letter of Credit.

      "UTILISATION DATE" means the date of a Utilisation,  being  the  date  on
      which  the relevant Loan is made or to be made or the Letter of Credit is
      issued or to be issued.

      "UTILISATION  TERM  FACILITY C" means a Utilisation of Term Facility C by
      way of temporarily replacing  the  rule  of  the  KfW  Loan  Agreement in
      relation  to  the  KfW Indebtedness by the terms of this Agreement  until
      Termination Date.

      "UTILISATION REQUEST" means a notice substantially in the form set out in
      Part I of Schedule 3 (Requests).

      "VALUATION DATE" means  the  first Business Day which falls one (1) Month
      after the date on which the Letter  of  Credit is issued pursuant to this
      Agreement and each day falling at Monthly intervals after that date.

                                       26

<PAGE>


      "VAT" means value added tax and any other tax of a similar nature.

1.2   CONSTRUCTION

(a)   Any reference in this Agreement to:

      (i)    a document being in the "AGREED FORM" is a reference to a document
             which is either initialled as such  on  or before the Closing Date
             for the purposes of identification by or  on behalf of the Company
             and  the  Mandated  Lead  Arrangers or the Facility  Agent  or  is
             executed on or before the date  of  this  Agreement  by any of the
             Obligors and the Mandated Lead Arrangers or the Facility Agent or,
             if  not  so  executed  or  initialled,  is  in  form and substance
             reasonably satisfactory to the Facility Agent;

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

      (iii)  the "EUROPEAN INTERBANK MARKET"  means  the  interbank  market for
             Euro operating in Participating Member States;

      (iv)   a  "FINANCE  DOCUMENT" or any other agreement or instrument  is  a
             reference  to  that   Finance   Document  or  other  agreement  or
             instrument as amended or novated;

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

      (vi)   a  Lender's/Issuing  Bank's  "PARTICIPATION",  in relation to  the
             Letter(s)  of  Credit,  shall be construed as a reference  to  its
             rights and obligations in relation to that Letter of Credit as are
             expressly set out in this Agreement;

      (vii)  a  "PERSON"  includes  any  person,  firm,  company,  corporation,
             government, state or agency of  a  state or any association, trust
             or partnership (whether or not having  separate legal personality)
             or two or more of the foregoing;

      (viii) a "REGULATION" includes any regulation,  rule, official directive,
             request or guideline (whether or not having  the force of law; but
             if  not  having  the  force  of law, being one with  which  it  is
             customary for persons to whom  it  is  directed  to comply) of any
             governmental,  intergovernmental  or  supranational body,  agency,
             department or regulatory, self-regulatory  or  other  authority or
             organisation;

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

      (x)    unless a contrary indication appears, a time of day is a reference
             to Brussels time.

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

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

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

                                       27

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1.3   CURRENCY DEFINITIONS

In this Agreement:

(a)   "$"  and  "DOLLARS"  denote  the lawful currency of the United States  of
America;

(b)   "e" and "EURO" denote the single  currency  of  the  Participating Member
States; and

(c)   "{pound-sterling}"  and  "STERLING"  denote  the lawful currency  of  the
United Kingdom.



                                   SECTION 2

                                THE FACILITIES

2.    THE FACILITIES

2.1   THE FACILITIES

      Subject to the terms of this Agreement, the Lenders  make  available  the
      Facilities  referred  to  below  to the relevant Borrowers in relation to
      each such Facility:

      (a)    (to the Company and, following  their respective accession to this
             Agreement in accordance with Clause  26 (Changes to the Obligors),
             each Approved Additional Borrower, in each case in accordance with
             its respective Allocation) a multicurrency  term  loan facility in
             an   aggregate   amount  equal  to  the  Total  Term  Facility   A
             Commitments;

      (b)    (to the Company) a  term  facility in Euros in an aggregate amount
             equal to the Total Term Facility B Commitments;

      (c)    (to the Company) a term facility  in  Euros in an aggregate amount
             equal to the Total Term Facility C Commitments; and

      (d)    (to all the Borrowers) a multicurrency  revolving  credit facility
             in  an  aggregate  amount  equal  to  the  Total Revolving  Credit
             Facility  Commitments  to be made available by  way  of  revolving
             loans and, in accordance  with  Clause 2.2 (Subfacilities), by way
             of Subfacilities.

2.2   SUBFACILITIES

(a)   Subject to the terms of this Agreement,  any  Borrower  may,  at any time
      during  the  Availability  Period  applicable  to  the  Revolving  Credit
      Facility,  by  notice  in  writing  to  the  Facility  Agent  request the
      conversion  of  the  whole  or  part  of  the  Available Revolving Credit
      Facility into a Subfacility with effect from the  date  specified in such
      notice being a date not less than five (5) Business Days  after  the date
      such notice is received by the Facility Agent (the "EFFECTIVE DATE")  and
      further  provided that not more than three (3) Subfacilities are existing
      at the same time. Any such notice shall specify:

      (i)    the proposed Subfacility Bank;

      (ii)   the proposed Borrower; and

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<PAGE>

      (iii)  the amount of the proposed Subfacility,

      and shall  contain  the  approval by the relevant Subfacility Bank of its
      acting as Subfacility Bank  and of the terms of the proposed Subfacility,
      and the Facility Agent shall  promptly notify each Lender upon receipt of
      any such notice.

(b)   Any  Revolving Credit Facility Lender  may  become  a  Subfacility  Bank;
      however,  no  Revolving  Credit  Facility Lender shall be obliged to make
      available Subfacilities under this Clause 2.2 (Subfacilities).

(c)   In the event of the establishment  of  a  Subfacility  in accordance with
      this  Clause  2.2  (Subfacilities),  then  with  effect on and  from  the
      Effective Date, the Total Revolving Credit Facility  Commitments shall be
      reduced  by  the  amount  of  the  Subfacility,  but  shall automatically
      increase  by  the amount of the relevant Subfacility upon  a  Subfacility
      ceasing to be available  to the relevant Borrower or upon the Subfacility
      being cancelled in accordance with Clause 2.2(d) below.

(d)   Any Borrower which has requested  the  establishment of a Subfacility may
      at any time by notice in writing to the  Facility  Agent and the relevant
      Subfacility Bank cancel such Subfacility in whole or  in  part,  in which
      event on the date specified in the notice, being a date not less than ten
      (10) Business Days after the date such notice is received by the Facility
      Agent,  the  Subfacility  shall  be  cancelled  and  the  Borrower  shall
      immediately repay or pay all amounts outstandings under such Subfacility.

(e)   No  Subfacility  Bank  may  (other  than  at  maturity  of  the  relevant
      Subfacility),   until   notice   has   been  served  under  Clause  24.19
      (Acceleration) or an automatic cancellation  has  occurred  under  Clause
      24.20  (US Obligors) demand repayment of any monies made available by  it
      or withdraw   prior to its original maturity any Subfacility or the right
      to make Utilisations  thereunder (unless an Event of Default has occurred
      which has not been waived  by  the Majority Lenders) or demand cash cover
      in respect of any guarantee or similar contingent liability by it or take
      any action analogous to any of the foregoing under the Subfacility.

2.3   FINANCE PARTIES' RIGHTS AND OBLIGATIONS

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

(b)   The  rights of each Lender, each Subfacility Bank and each Fronting  Bank
      under  or  in  connection  with  the  Finance  Documents are separate and
      independent rights and any debt arising under the  Finance  Documents or,
      as the case may be, the Subfacility Documents to a Lender, a  Subfacility
      Bank or, as the case may be, a Fronting Bank from an Obligor shall  be  a
      separate  and  independent  debt.  The  creation  of  jointly held assets
      (Gesamthandsvermogen) is excluded.

(c)   A Finance Party may, except as otherwise stated in the Finance Documents,
      separately enforce its rights under the Finance Documents  PROVIDED  THAT
      if  any  Lender commences proceedings in respect of the Finance Documents
      it shall promptly notify the other Lenders through the Facility Agent and
      the Facility Agent shall notify the other Lenders accordingly.

                                       29

<PAGE>

3.    PURPOSE

3.1   PURPOSE

(a)   Each Borrower  shall apply all amounts borrowed by it under Term Facility
      A in or towards discharging:

      (i)    its share  of  the Existing Indebtedness including the Mandatorily
             Discharged Indebtedness;

      (ii)   (in relation to a Borrower other than the Company) any Intra-Group
             Loans provided directly  or  indirectly  by  the  Company  to such
             Borrower  in  order  that  the  Company  may apply such repayments
             exclusively in or towards discharging its  share  of  the Existing
             Indebtedness; and/or

      (iii)  in respect of any remaining amounts after application in  relation
             to No. (i) and (ii) above, for general corporate purposes.

(b)   The  Company  may only instruct each Issuing Bank or one or more Fronting
      Banks to issue  the Letter of Credit under Term Facility B in replacement
      of the Existing L/Cs.

(c)   Term  Facility  C temporarily  replaces  the  KfW  Loan  Agreement  until
      Termination Date  and  the Company shall apply all amounts borrowed by it
      under Term Facility C in  or  towards  discharging its respective payment
      obligations in accordance with Clause 7.3.

(d)   Each Borrower shall apply all amounts borrowed  by it under the Revolving
      Credit Facility in or towards financing the general corporate purposes of
      the Group (but not to fund:

      (i)    the  making  or declaration of any dividend,  return  on  capital,
             repayment of capital  contributions or other distribution (whether
             in cash or kind) or making  of  any  other  payment  whatsoever in
             respect  of  share capital whether directly or indirectly  by  the
             Company;

      (ii)   the refinancing  of  the convertible bond issued by the Company in
             2000 and due in 2005; or

      (iii)  any other Financial Indebtedness  incurred  after the date of this
             Agreement).

(e)   Each  Borrower  shall  apply  all  amounts  borrowed  by  it   under  the
      Subfacilities and utilise all other banking arrangements comprised in the
      Subfacilities,  for  the  general  working  capital requirements or other
      general corporate purposes of the Group.

3.2   MONITORING

      No Finance Party is bound to monitor or verify  the  application  of  the
      proceeds of, or the use of, any Utilisation pursuant to this Agreement.

4.    CONDITIONS OF UTILISATION

4.1   INITIAL CONDITIONS PRECEDENT

      No  Borrower  may deliver a Utilisation Request unless the Facility Agent
      has received all  of the documents and other evidence listed in Part I of
      Schedule 2 (Conditions Precedent and

                                       30

<PAGE>


      Conditions Subsequent) in form and substance satisfactory to the Facility
      Agent.  The Facility  Agent  shall  notify  the  Company  and the Lenders
      promptly upon being so satisfied.

4.2   FURTHER CONDITIONS PRECEDENT

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

      (a)   in the case of a Rollover  Loan, no Event of Default  (other than an
            Event of Default pursuant to Clause 24.18 (b) during the time period
            reserved  for  negotiations  of the  parties  set  out  therein)  is
            continuing  or would result from the proposed  Rollover Loan and, in
            the case of any other Loan or the  Letter of  Credit,  no Default is
            continuing  or would result from the proposed  Loan or the Letter of
            Credit;

      (b)   the  Repeating  Representations  made  or  deemed  to be made by the
            Company and each other Obligor are true in all material respects;

      (c)   no Change of Control has occurred.

4.3   MAXIMUM NUMBER OF LOANS AND LETTERS OF CREDIT

(a)   A  Borrower  may not deliver a Utilisation Request if as a result of  the
      proposed Utilisation:

      (i)   more than twelve (12) Term Facility A Loans would be outstanding; or

      (ii)  subject to Clause 5.9 (Existing  L/Cs),  more than one (1) Letter of
            Credit has been issued under Term Facility B; or

      (iii) more than  twelve  (12)  Revolving  Credit  Facility  Loans would be
            outstanding.

(b)   The Company may only deliver one Utilisation Request  in  relation to the
      Term Facility C Loan and such Utilisation Request will be deemed  to have
      been delivered in accordance with Clause 5.1 in case of a Deemed Facility
      C Utilisation.

(c)   A Borrower may not request that a Term Facility Loan be divided if,  as a
      result  of  the  proposed division, there would be outstanding more Loans
      under that Term Facility  than  provided  for  in  paragraphs (a) and (b)
      above.

4.4   MANDATORILY DISCHARGED INDEBTEDNESS

      Each Borrower may only deliver a Utilisation Request  in  respect of Term
      Facility A if evidence satisfactory to the Facility Agent is  provided to
      the Facility Agent that the amounts borrowed by it under such Utilisation
      will   only   be   applied  towards  discharging  Mandatorily  Discharged
      Indebtedness by means  of  requesting in the relevant Utilisation Request
      payment  under such Utilisation  Request  to  be  made  to  the  relevant
      creditors  or  otherwise.  The  discharge  of  the Mandatorily Discharged
      Indebtedness  shall  occur through simultaneous Utilisations  under  Term
      Facility A at one payment date only.

                                       31

<PAGE>

                                   SECTION 3

                                  UTILISATION



5.    UTILISATION

5.1   DELIVERY OF A UTILISATION REQUEST

      A Borrower may utilise a Facility made available to it by delivery to the
      Facility Agent of a duly completed Utilisation Request not later than the
      Specified Time. However, in case of the Deemed Facility B Utilisation and
      the Deemed Facility C  Utilisation,  respectively, no Utilisation Request
      in respect of Term Facility B and the  Term  Facility C, respectively, is
      required.

5.2   COMPLETION OF A UTILISATION REQUEST

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

      (i)    it identifies the Facility to be utilised;

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

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

      (iv)   the proposed Interest Period or, as the case may be, Term complies
             with Clause 11 (Interest Periods and the Term);

      (v)    in relation to a Loan, it provides payment instructions;

      (vi)   if the  Letter  of  Credit is to be issued by a Fronting Bank, the
             relevant  Fronting  Bank   has   prior  to  the  delivery  of  the
             Utilisation  Request  agreed with the  Majority  Lenders  and  the
             Facility Agent to act as a fronting bank in respect of that Letter
             of Credit; and

      (vii)  in relation to the Letter  of  Credit,  the  Issuing  Banks or the
             relevant Fronting Banks and the Facility Agent have prior  to  the
             delivery  of  the  Utilisation  Request approved its terms (which,
             unless the Facility Agent and the  Issuing  Banks  or the relevant
             Fronting Banks agree otherwise, shall be substantially in the form
             set  out  in  Schedule  14  (Form  of the Letter of Credit)),  the
             purpose of its issue and the identity of the beneficiary.

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

(c)   Up  to ten (10) Utilisation Requests may be  delivered  to  the  Facility
      Agent  in  relation to the initial Utilisation and thereafter, only three
      (3) Utilisation  Requests  may  be delivered to the Facility Agent on any
      one Business Day.

5.3   CURRENCY AND AMOUNT

(a)   The currency specified in a Utilisation Request in relation to:

      (i)    a Term Facility A Loan made  to  a  Borrower other than SGL CARBON
             LLC,  the Letter of Credit under Term  Facility  B  and  the  Term
             Facility C Loan must be Euros; and

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<PAGE>

      (ii)   a Revolving Credit Facility Loan or a Term Facility A Loan made to
             SGL CARBON LLC must be Euros or Dollars.

(b)   Neither the:

      (i)    amount  of  the  Letter  of  Credit  under  Term Facility B or the
             proposed Term Facility C Loan; nor

      (ii)   Euro Amount of a proposed Term Facility A Loan or Revolving Credit
             Facility Loan,

      may exceed the applicable Available Commitment.

(c)   The  amount  of  a  proposed  Term  Facility  A Loan or Revolving  Credit
      Facility Loan must be:

      (i)    if the currency selected is Euros, a minimum  of  e 10,000,000 and
             an  integral  multiple of e 1,000,000 for Term Facility  A  and  a
             minimum of e 5,000,000 and an integral multiple of e 1,000,000 for
             the Revolving Credit  Facility  or  in  either  case, if less, the
             applicable Available Facility; or

      (ii)   if the currency selected is Dollars, a minimum of $ 10,000,000 and
             an  integral  multiple of $ 1,000,000 for Term Facility  A  and  a
             minimum of $ 5,000,000 and an integral multiple of $ 1,000,000 for
             the Revolving Credit  Facility  or  in  either  case, if less, the
             applicable Available Facility.

(d)   The  amount  of the proposed Term Facility C Loan must be  equal  to  the
      Total Term Facility C Commitments.

5.4   LENDERS' PARTICIPATION

(a)   If the conditions set out in this Agreement have been met:

      (i)    each Lender shall make its participation in each Loan available by
             the Utilisation Date through its Facility Office; and

      (ii)   each Issuing  Bank  shall  issue  the  Letter  of Credit II by the
             Utilisation Date through its Facility Office.

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

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

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

(e)   The amount  of  each  Lender's  participation  in  each  Revolving Credit
      Facility  Loan  (other  than  under a Subfacility) will be equal  to  the
      proportion borne by its Available

                                       33

<PAGE>

      Commitment to the Available  Facility  immediately  prior to the making of
      such Revolving Credit Facility Loan.

(f)   No Revolving Credit Facility Loan shall be made  on  any Utilisation Date
      if,  as  a  result,  the  aggregate  of  all  Revolving  Credit  Facility
      Outstandings on that Utilisation Date when aggregated at that  time  with
      the  amount  of all Subfacilities effective at that time shall exceed the
      aggregate  of  the   Revolving   Credit   Facility  Commitments  on  that
      Utilisation Date.

(g)   The Facility Agent shall notify each Lender  the currency, the amount and
      the Interest Period in relation to of each Loan  or  the Letter of Credit
      at the Specified Time.

5.5   LETTER OF CREDIT

(a)   Upon  the  Deemed  Facility B Utilisation the Available Commitment  under
      Term Facility B shall  be  reduced  accordingly.  However, such Available
      Commitment  under  Term Facility B shall be re-effective  only  upon  the
      cancellation and return of the Existing L/Cs.

(b)   Each Term Facility B  Lender  is authorised to issue the Letter of Credit
      II pursuant to this Clause 5 (Utilisation)  by  executing  the  Letter of
      Credit  II  and  ensuring that it is delivered to the beneficiary on  the
      Utilisation Date, thus becoming an Issuing Bank.

5.6   CANCELLATION OF A FACILITY

      If, prior to the date  on  which  it  receives  a  Utilisation Request in
      respect  of  a  Facility,  the  Facility  Agent  receives  a   notice  of
      cancellation  of  the  whole  or part of the Available Facility for  such
      Facility   which  is  to  take  effect   under   Clause 9.10   (Voluntary
      Cancellation)  on  a  date  falling on or after such date, such Available
      Facility shall be treated, for  the  purpose  of Clause 5.3 (Currency and
      Amount),  as  if  it  had  already  been reduced by the  amount  of  such
      cancellation (as specified in such notice).   Nothing  in this Clause 5.6
      shall be treated as reducing any Lender's Available Commitment under that
      Facility for the purposes of Clause 13.1 (Commitment Fee)  prior  to  the
      date on which such cancellation would otherwise take effect.

5.7   CANCELLATION OF A LENDER'S COMMITMENT

      If  a  Lender's  Commitment is cancelled under Clause 9.1 (Illegality) or
      Clause 9.11 (Right  of repayment and cancellation in relation to a single
      Lender  or  Issuing  Bank)  after  the  Facility  Agent  has  received  a
      Utilisation Request but  before  the  Loan  requested in that Utilisation
      Request has been made, then the amount of that  Loan  shall be reduced by
      the proportion which such Lender's Term Facility Commitment  or Revolving
      Credit Facility Commitment bore to the Total Term Facility Commitments or
      the  Total  Revolving  Credit  Facility Commitments (as the case may  be)
      immediately prior to such cancellation taking effect.

5.8   CANCELLATION AND REPLACEMENT OF THE LETTER OF CREDIT

(a)   The  Company  shall use its reasonable  efforts  to  cause  the  European
      Commission to return  the Existing L/Cs to the Fronting Banks in exchange
      against the Letter of Credit II.

(b)   However, the Company shall  also  use its reasonable efforts to cause the
      European Commission to return the Letter  of  Credit to the Issuing Banks
      or the relevant Fronting Banks, as the case may be, or cause the European
      Commission to release the Issuing Banks

                                       34

<PAGE>

      and/or  the  relevant  Fronting  Banks,  as the  case may be,  from  their
      liabilities under the Letter of Credit upon:

      (i)    the European Commission waiving the requirement for such Letter of
             Credit to be issued; and

      (ii)   in any event, on the Term Facility B Repayment Date.

(c)   In  the event that the amount required to be covered  by  the  Letter  of
      Credit   is  reduced  by  the  European  Commission,  the  Company  shall
      immediately notify the Facility Agent accordingly, whereupon:

      (i)    a new  Letter of Credit shall immediately be issued for the lesser
             amount  required   by  the  European  Commission  which  shall  be
             effective only upon  the  cancellation  and return of the original
             Letter of Credit to the Facility Agent; and

      (ii)   upon  such  cancellation  and  return of the  original  Letter  of
             Credit, each Issuing Bank's Letter  of  Credit  Proportion  and/or
             relevant  Fronting  Bank's  liability  under  the Letter of Credit
             shall be reduced pro rata.

(d)   To the extent that on the occurrence of the event described  in paragraph
      (b) above the Company does not return to the Facility Agent the  original
      Letter  of  Credit  the Company will provide Cash Collateral in an amount
      equal to the amount by which the Letter of Credit may be reduced.

5.9   EXISTING L/CS

      Upon the Deemed Facility  B  Utilisation  and  until  such  time  as  the
      Existing  L/Cs  are  returned  to  the Fronting Banks and replaced by the
      Letter of Credit II, the relevant banks  having  issued the Existing L/Cs
      will be treated as Fronting Banks and the Company  shall pay the Fronting
      Fee to the Fronting Banks, whereas the Term Facility  B  Lenders  will be
      entitled to the relevant remuneration pursuant to Clause 13.4.

5.10  UTILISATION OF THE SUBFACILITIES

(a)   Subfacilities may comprise overdraft facilities, letters of credit,  bank
      guarantees, short term loans, foreign exchange facilities or, if approved
      by the Facility Agent, any other facilities or financial accommodation as
      may  be  required  in connection with the business of the Group which the
      Company and the relevant Subfacility Bank may agree from time to time.

(b)   The rate of interest,  fees  and  other  remuneration  in respect of each
      Subfacility  and  all  other  terms  and  conditions  thereof  shall   be
      determined  by  agreement  between  the Subfacility Bank and the relevant
      Borrower as set out in the relevant Subfacility  Documents,  and shall be
      based  upon  the normal market rates and terms from time to time  of  the
      Subfacility Bank taking account its fronting function.

(c)   Each Borrower and each Subfacility Bank agree with and for the benefit of
      each Subfacility  Bank  that  any utilisations made under any Subfacility
      provided by such Subfacility Bank shall not exceed the Subfacility.

(d)   In case of any inconsistency between  any  term of a Subfacility Document
      and of this Agreement, the terms of this Agreement shall prevail.

                                       35

<PAGE>


(e)   Each Borrower and each Subfacility Bank shall,  promptly  upon request by
      the  Facility  Agent,  provide  the  Facility Agent with such information
      relating to the operation of each Subfacility  as  the Facility Agent may
      from time to time request. Each Borrower consents to all such information
      being released to the Facility Agent and each Lender.

6.    CHANGE OF CURRENCY

6.1   SELECTION OF CURRENCY

(a)   A  Borrower  shall  select  the  currency of a Term Facility  A  Loan  or
      Revolving Credit Facility Loan in a Utilisation Request.

(b)   A Term Facility A Loan denominated  in  Euros  may  not be converted into
      Dollars;  however, a Borrower may deliver a Selection  Notice  requesting
      that a Term Facility A Loan denominated in Dollars be converted to Euros,
      PROVIDED THAT  this  procedure  of  converting  the  currency  of  a Term
      Facility  A  Loan  may  only  be conducted once and the relevant Borrower
      shall  at  no time be entitled to  request  that  the  relevant  Loan  be
      reconverted into Dollars.

(c)   If a Borrower  fails  to deliver a Selection Notice in relation to a Loan
      to the Facility Agent in  accordance  with  paragraph (b) above, the Loan
      will remain denominated for its next Interest Period in the same currency
      in which it is then outstanding.

(d)   If a Borrower delivers a Selection Notice requesting a change of currency
      and the first day of the requested Interest Period  is not a Business Day
      for Euros, the Facility Agent shall promptly notify the  Borrower and the
      Lenders  and  the  Loan  will  remain  in Dollars (with Interest  Periods
      running from one Business Day until the next Business Day) until the next
      day  which  is  a  Business Day for both currencies,  on  which  day  the
      requested Interest Period will begin.

6.2   UNAVAILABILITY OF DOLLARS

      If before the Specified Time on any Quotation Day:

      (a)    the Facility  Agent has received notice from a Lender that Dollars
             are not readily available to it in the amount required; or

      (b)    a Lender notifies  the  Facility  Agent  that  compliance with its
             obligation  to  participate  in  a Term Facility A Loan  and/or  a
             Revolving Credit Facility Loan in  Dollars  would contravene a law
             or regulation applicable to it,

      the  Facility  Agent will give notice to the relevant  Borrower  to  that
      effect by the Specified Time on that day.  In this event, any Lender that
      gives notice pursuant  to this Clause 6.2 will be required to participate
      in the Term Facility A Loan  and/or the Revolving Credit Facility Loan in
      Euros (in an amount equal to that  Lender's proportion of the Euro Amount
      of that Loan or, in respect of a Rollover  Loan,  an amount equal to that
      Lender's proportion of the Euro Amount of the maturing  Revolving  Credit
      Facility  Loan  that  is  due to be repaid) and its participation will be
      treated as a separate Loan  denominated  in  Euros  during  that Interest
      Period.

                                       36

<PAGE>


6.3   CHANGE OF CURRENCY

(a)   Subject to the provisions of Clause 6.1(b), if a Term Facility  A Loan is
      to  be denominated in different currencies during two successive Interest
      Periods:

      (i)    as  the currency for the second Interest Period will be Euros, the
             amount  of  the  Term  Facility  A  Loan will be equal to the Euro
             Amount;

      (ii)   (unless  the Facility Agent and the Borrower  agree  otherwise  in
             accordance  with  paragraph  (c)  below)  the  Borrower  that  has
             borrowed  the  Term Facility A Loan shall repay it on the last day
             of the first Interest Period in Dollars; and

      (iii)  (subject to Clause 4.2 (Further Conditions Precedent)) the Lenders
             shall re-advance  the  Term Facility A Loan in Euros in accordance
             with Clause 6.4 (Facility Agent's Calculations).

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

      (i)    apply  the amount paid to it by the Lenders pursuant to  paragraph
             (a)(iii)  above  (or so much of that amount as is necessary) in or
             towards purchase of an amount in Dollars; and

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

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

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

(e)   If the relevant  Borrower  repays the relevant Term Facility A Loan under
      Clause 6.3(a)(ii) but the Lenders  do  not  re-advance  it in Euros under
      Clause   6.3(a)(iii)   by   virtue  of  Clause  4.2  (Further  Conditions
      Precedent),  the repayment shall  be  treated  as  a  prepayment  of  the
      relevant Term  Facility  A  Loan  and  may  not  be re-borrowed.  If such
      repayment  is  made  after  the  last  day  of  the  Availability  Period
      applicable  to  the  relevant Term Facility A Loan (or, if  earlier,  the
      first day on which the  Available Facility for the relevant Term Facility
      A  Loan  is zero), it shall  satisfy  the  obligations  of  the  relevant
      Borrower under Clause 7.1 (Repayment of Term Facility A Loans) in inverse
      chronological order.

6.4   FACILITY AGENT'S CALCULATIONS

(a)   All calculations  made  by  the  Facility Agent pursuant to this Clause 6
      will  take  into  account  any repayment,  prepayment,  consolidation  or
      division of Term Facility A Loans to be made on the last day of the first
      Interest Period.

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

                                       37

<PAGE>

                                   SECTION 4

                    REPAYMENT, PREPAYMENT AND CANCELLATION

7.    REPAYMENT

7.1   REPAYMENT OF TERM FACILITY A LOANS

(a)   (i)    The  Company  shall  repay the first  e  75,000,000  of  the  Term
             Facility A Loans which  it  has  drawn  by  repaying  on each Term
             Facility  A  Repayment  Date  an  amount or amounts such that  the
             aggregate Euro Amount of all the outstanding Term Facility A Loans
             drawn by the Company is reduced by  an  amount equal to the amount
             which  appears opposite the three (3) Term  Facility  A  Repayment
             Dates set out in the following table:

<TABLE>
-------------------------------------------------
<CAPTION>
Term Facility A Repayment Date   Repayment Amount
-------------------------------------------------
<S>                              <C>
30 December 2003                 e 25,000,000
-------------------------------------------------
30 June 2004                     e 25,000,000
-------------------------------------------------
30 December 2004                 e 25,000,000
-------------------------------------------------
</TABLE>


      (ii)   Each Borrower  which  has  drawn a Term Facility A Loan (including
             the Company with respect to  Loans  over  and  above  the  first e
             75,000,000  of the Term Facility A Loans referred to in (i) above)
             shall repay that  Loan  by  repaying  on the Term Facility A Final
             Repayment Date an amount or amounts such  that  the aggregate Euro
             Amount of all the outstanding Term Facility A Loans  is  repaid in
             full.

(b)   If  the  aggregate  amount  of  all the outstanding Term Facility A Loans
      drawn  by a Borrower and having an  Interest  Period  ending  on  a  Term
      Facility   A  Repayment  Date  exceeds  the  Term  Facility  A  Repayment
      Instalment applicable  to  that Borrower on that date, then such Borrower
      may,  by  not less than five (5)  Business  Days'  prior  notice  to  the
      Facility Agent,  select  which  of  those  Term  Facility A Loans will be
      wholly  or  partially  repaid  to  enable  the repayment  required  under
      paragraph (a) above to occur, PROVIDED THAT:

      (i)    such Borrower may not make any such selection  if,  as  a  result,
             more than one such Term Facility A Loan would fall to be partially
             repaid; and

      (ii)   if  such  Borrower  fails  to give such notice, the Facility Agent
             shall select the Term Facility  A  Loans to be wholly or partially
             repaid as aforesaid.

(c)   No Borrower may re-borrow any part of Term Facility A which is repaid.

7.2   SATISFACTION OF LIABILITIES IN RELATION TO TERM FACILITY B

      Each  Borrower shall ensure that no amount is  outstanding  on  the  Term
      Facility B Repayment Date in relation to a Utilisation in the form of the
      issuance  of  the  Letter  of  Credit  and shall ensure that the original
      Letter of Credit is returned to the Facility Agent, or

                                       38

<PAGE>


      else provide sufficient Cash Collateral  to  the  Facility Agent to cover
      such Borrower's payment obligations thereunder in full.

7.3   SATISFACTION OF LIABILITIES IN RELATION TO TERM FACILITY C

(a)   The Company shall repay the Term Facility C Loan until  Termination  Date
      only  by  repaying  on  each  Term Facility C Repayment Date an amount or
      amounts such that the aggregate amount in Euros of all outstandings under
      the Term Facility C Loan drawn  by  the  Company  is reduced by an amount
      equal to the amount which appears opposite the relevant  Term  Facility C
      Repayment  Date  in  the  following  table  (after  Termination  Date any
      repayment  obligations  are  governed  by  the  terms  of  the  KfW  Loan
      Agreement):

<TABLE>
-------------------------------------------------
<CAPTION>
Term Facility C Repayment Date  Repayment Amount
-------------------------------------------------
<S>                             <C>
30 September 2004               e 2,333,335
-------------------------------------------------
31 March 2005                   e 2,333,333
-------------------------------------------------
30 September 2005               e 2,333,333
-------------------------------------------------
31 March 2006                   e 2,333,333
-------------------------------------------------
30 September 2006               e 2,333,333
-------------------------------------------------
31 March 2007                   e 2,333,333
-------------------------------------------------
30 September 2007               e 6,000,000
-------------------------------------------------
TOTAL                           e 20,000,000
-------------------------------------------------
</TABLE>


(b)   The  Company  may  not  re-borrow  any  part  of Term Facility C which is
      repaid.

7.4   REPAYMENT OF REVOLVING CREDIT FACILITY LOANS

      Each Borrower shall repay each Revolving Credit Facility Loan that it has
      drawn on the last day of that Revolving Credit  Facility  Loan's Interest
      Period  and  no  Interest  Period  shall fall after the Revolving  Credit
      Facility Final Repayment Date.

8.    COMPANY'S LIABILITIES IN RELATION TO THE LETTER OF CREDIT

8.1   DEMANDS UNDER THE LETTER OF CREDIT

      If a demand is made under the Letter of Credit, as the case may be, or an
      Issuing Bank or Fronting Bank incurs  in  connection  with  the Letter of
      Credit any other liability, cost, claim, loss or expense which  is  to be
      reimbursed  pursuant  to  this  Agreement,  the  relevant Issuing Bank or
      Fronting Bank shall promptly notify the Facility Agent  of  the amount of
      such  demand  or  such  liability,  cost, claim, loss or expense and  the
      Facility Agent shall promptly make demand  upon the Company in accordance
      with this Agreement and notify the Company.

                                       39

<PAGE>


8.2   THE COMPANY'S INDEMNITY TO ISSUING BANKS AND FRONTING BANKS

      The Company shall irrevocably and unconditionally as a primary obligation
      indemnify (on demand of the Facility Agent)  any Issuing Bank or Fronting
      Bank which has issued the Letter of Credit at  the request of the Company
      against:

      (a)    any sum paid, or due and payable, by that Issuing Bank or Fronting
             Bank  to  the  beneficiary of the Letter of  Credit  under  or  in
             connection with the Letter of Credit; and

      (b)    all liabilities,  costs  (including, without limitation, any costs
             incurred in funding any amount  which  falls due from that Issuing
             Bank or Fronting Bank under the Letter of  Credit or in connection
             with it), claims, losses and expenses which  that  Issuing Bank or
             Fronting  Bank  may  at  any  time reasonably incur or sustain  in
             connection with or arising out of the Letter of Credit.

8.3   THE COMPANY'S INDEMNITY TO TERM FACILITY B LENDERS

      The Company shall irrevocably and unconditionally as a primary obligation
      indemnify (on demand of the Facility Agent)  each  Term Facility B Lender
      against,  in  respect  of  the  Existing  L/Cs  upon  Deemed  Facility  B
      Utilisation:

      (a)    any sum paid, or due and payable, by that Term Facility  B  Lender
             (whether  under  Clause 28.1  (Lenders'  Indemnity),  Clause  28.2
             (Direct  Participation)  or  otherwise)  in  connection  with  the
             Existing L/Cs; and

      (b)    all  liabilities,  costs (including, without limitation, any costs
             incurred in funding  any  amount  which  falls  due from that Term
             Facility B Lender in connection with the Existing L/Cs upon Deemed
             Facility  B  Utilisation, claims, losses and expenses  which  that
             Term Facility B Lender may at any time reasonably incur or sustain
             in connection  with  any  Existing  L/Cs  upon  Deemed  Facility B
             Utilisation.

8.4   PRESERVATION OF RIGHTS

      Neither the obligations of the Company set out in this Clause 8  nor  any
      rights,  powers  and  remedies  conferred  on any Term Facility B Lender,
      Issuing  Bank  or Fronting Bank derived therefrom  or  by  law  shall  be
      discharged, impaired or otherwise affected by:

      (a)    the winding-up,  dissolution, administration or re-organisation of
             the relevant upon  Term  Facility B Lender, Issuing Bank, Fronting
             Bank or any other person or  any  change  in the status, function,
             control or ownership of any of them;

      (b)    any  of the obligations of the relevant Term  Facility  B  Lender,
             Issuing  Bank,  Fronting Bank or any other person under any of the
             Finance Documents,  under  the Letter of Credit or under any other
             security taken in respect of  the  Company's obligations under any
             of  the Finance Documents, or otherwise  in  connection  with  the
             Letter   of   Credit,   being   or   becoming   illegal,  invalid,
             unenforceable or ineffective in any respect;

      (c)    time or other indulgence being granted or agreed  to be granted to
             the relevant Term Facility B Lender, Issuing Bank,  Fronting  Bank
             or  any  other person in respect of the obligations of any of them
             under any  of  the  Finance Documents, under or in connection with
             the Letter of Credit  or under any other security taken in respect
             of

                                       40

<PAGE>


            the Company's  obligations  under any of the Finance  Documents,  or
            otherwise in connection with the Letter of Credit;

      (d)    any amendment to, or any  variation,  waiver  or  release  of, any
             obligation  of  the relevant Term Facility B Lender, Issuing Bank,
             Fronting Bank or  any  other  person under the Letter of Credit or
             under any of the Finance Documents; or

      (e)    any other act, event or omission  which,  but  for  this Clause 8,
             might operate to discharge, impair or otherwise affect  any of the
             obligations of the Company set out in this Clause 8 or any  of the
             rights,  powers  or  remedies  conferred upon any  Issuing Bank by
             this Agreement or by law.

      The obligations of the Company set out  in  this  Clause 8  shall  be  in
      addition  to  and  independent  of  every  other  security which any Term
      Facility B Lender, Issuing Bank or Fronting Bank may  at any time hold in
      respect of the Company's obligations under this Agreement or otherwise in
      connection with the Letter of Credit.

8.5   SETTLEMENT CONDITIONAL

      Any  settlement  or discharge between the Company and a Term  Facility  B
      Lender, an Issuing  Bank  or a Fronting Bank shall be conditional upon no
      security or payment to that  Term  Facility  B  Lender,  Issuing  Bank or
      Fronting  Bank  by  the  Company,  or  any  other person on behalf of the
      Company,  being  avoided or reduced by virtue of  any  laws  relating  to
      bankruptcy,  insolvency,   liquidation   or   similar   laws  of  general
      application  and,  if  any  such  security  or  payment is so avoided  or
      reduced, that Term Facility B Lender, Issuing Bank or Fronting Bank shall
      be entitled to recover the value or amount of such  security  or  payment
      from the Company subsequently as if such settlement or discharge had  not
      occurred.

8.6   RIGHT TO MAKE PAYMENTS UNDER THE LETTER OF CREDIT

      Each Issuing Bank and Fronting Bank shall be entitled to make any payment
      in  accordance  with  the  terms  of  the  Letter  of  Credit without any
      reference  to,  or  further  authority  from,  the Company or  any  other
      investigation or enquiry. The Company irrevocably authorises each Issuing
      Bank  and Fronting Bank to comply with any demand  under  the  Letter  of
      Credit which is valid on its face.

9.    PREPAYMENT AND CANCELLATION

9.1   ILLEGALITY

      If it becomes  unlawful in any jurisdiction for a Lender, an Issuing Bank
      or Fronting Bank  to  perform  any  of its obligations as contemplated by
      this  Agreement or to fund, issue, participate  in  or  allow  to  remain
      outstanding any Loan or the Letter of Credit:

      (a)    that  Lender,  the  Issuing  Bank or, as the case may be, Fronting
             Bank shall promptly notify the  Facility Agent upon becoming aware
             of that event;

      (b)    upon the Facility Agent notifying  the  Company, any Commitment of
             that Lender will be immediately cancelled  or, as the case may be,
             any obligation of that Issuing Bank or Fronting  Bank to issue the
             Letter of Credit will immediately cease; and

                                       41

<PAGE>


      (c)    each  Borrower shall, on the last day of the Interest  Period  for
             each Loan  or  Term  for  the Letter of Credit occurring after the
             Facility Agent has notified  the  Company or, if earlier, the date
             specified by the Lender, Issuing Bank  or  Fronting  Bank  in  the
             notice  delivered to the Facility Agent (being no earlier than the
             last day of any applicable grace period permitted by law):

             (i)   repay  that Lender's participation in the Loans made to that
                   Borrower together with accrued interest thereon, Break Costs
                   and all other amounts owing to such Lender under the Finance
                   Documents;

             (ii)  (if the  circumstance  relates  to  an Issuing Bank) procure
                   either that such Issuing Banks's Letter of Credit Proportion
                   of the Letter of Credit be reduced to  zero (by reduction of
                   the  amount of the Letter of Credit in an  amount  equal  to
                   that Issuing  Bank's  Letter  of  Credit Proportion) or that
                   Cash Collateral be provided in an amount  in  Euros equal to
                   such  Issuing  Bank's  Letter  of Credit Proportion  of  the
                   Letter of Credit; and

             (iii) (if the circumstance relates to  a  Fronting  Bank)  procure
                   either  that such Fronting Bank's liability under the Letter
                   of Credit  be  reduced  to  zero  or that Cash Collateral be
                   provided in an amount in Euros equal to such Fronting Bank's
                   maximum actual and contingent liabilities  under  the Letter
                   of Credit.

9.2   MANDATORY PREPAYMENT FROM DEBT ISSUE OR EQUITY ISSUE

      The  Company  shall ensure that an amount equal to one hundred (100)  per
      cent. of the Net  Proceeds  arising from a Debt Issue and an amount equal
      to seventy-five (75) per cent. of the Net Proceeds arising from an Equity
      Issue (such Equity Issue only  to  be  made in accordance with applicable
      laws) by any member of the Group are paid  to the Facility Agent promptly
      upon the receipt of such Net Proceeds by such Group member and applied in
      prepayment of the Outstandings in accordance with Clause 9.6 (Application
      of Prepayments).

9.3   MANDATORY PREPAYMENT FROM ASSET DISPOSALS

(a)   Subject to paragraph (b) and (c) below, the Company shall ensure that the
      Net Proceeds arising from the disposal of any  asset by any member of the
      Group are paid to the Facility Agent promptly upon  the  receipt  of such
      Net  Proceeds  by  such  Group  member  and  applied in prepayment of the
      Outstandings in accordance with Clause 9.6 (Application of Prepayments).

(b)   Paragraph (a) shall not apply to Net Proceeds  arising  from any disposal
      referred to in paragraph (a) above:

      (i)    to the extent that such Net Proceeds are promptly  upon receipt by
             the relevant Group member deposited in the Prepayment  Account  in
             accordance  with  paragraph  (c)  below  and  the  Company  or the
             relevant  member  of the Group can demonstrate to the satisfaction
             of the Facility Agent that such disposal was on arms' length terms
             and that the Net Proceeds are to be re-invested in similar or like
             assets of a comparable or superior quality, type or value within a
             period of 180 days  from  the date of receipt of such Net Proceeds
             by such Group member;

                                       42

<PAGE>


      (ii)   if such disposal falls within  paragraphs  (a), (b), (c) or (e) of
             the   definition   of   "PERMITTED   DISPOSAL"   in   Clause   1.1
             (Definitions);

      (iii)  if  such  disposal  relates  to  a  sale  of  electrical  contacts
             (graphite specialties) by SGL PanTrac GmbH, Delta Ringsdorff  S.A.
             and Risomesa S.p.A.;

      (iv)   if  the  Net Proceeds per disposal do not exceed e 250,000 (or its
             equivalent  in  another currency) or, when aggregated with the Net
             Proceeds received by members of the Group from any other disposals
             of assets made in  the  immediately preceding twelve (12) calendar
             month period (excluding the  Net  Proceeds  from disposals falling
             within  sub-paragraphs (i); (ii) or (iii) above),  do  not  exceed
             e 5,000,000 (or its equivalent in another currency).

(c)   The  Company shall  ensure  that  any  Net  Proceeds  to  be  applied  in
      accordance  with  paragraph  (b)(i)  above  are promptly deposited in the
      Prepayment  Account  upon  receipt  by the relevant  Group  member.   The
      relevant Group member that received the  Net  Proceeds shall be entitled,
      during  the  period  of 180 days from the date of  receipt  of  such  Net
      Proceeds, to withdraw  such Net Proceeds from the Prepayment Account only
      to the extent that it is  able  to demonstrate to the satisfaction of the
      Facility Agent that such Net Proceeds will be immediately  re-invested in
      accordance with paragraph (b)(i)  above.   Any amounts not so re-invested
      during such 180 day period shall thereafter be paid to the Facility Agent
      and applied in repayment of the Outstandings  in  accordance  with Clause
      9.6 (Application of Prepayments).

9.4   MANDATORY PREPAYMENT FROM INSURANCE PROCEEDS

(a)   Subject  to  paragraphs (b) and (c) below, the Company shall ensure  that
      any Insurance  Proceeds  received  by any member of the Group are paid to
      the Facility Agent promptly upon the  receipt  of such Insurance Proceeds
      by  such Group member and applied in prepayment of  the  Outstandings  in
      accordance with Clause 9.6 (Application of Prepayments).

(b)   Paragraph  (a)  shall  not  apply  to  any  Insurance Proceeds unless the
      Insurance  Proceeds  exceed  e 250,000  (or  its  equivalent  in  another
      currency)  or,  when aggregated with the Insurance Proceeds  received  by
      members of the Group from claims made in the immediately preceding twelve
      (12)  calendar  month  period  (excluding  the  Insurance  Proceeds  from
      disposals falling  within  paragraphs  (c) below), exceed e 5,000,000 (or
      its equivalent in another currency).

(c)   Paragraph (a) shall not apply to any Insurance  Proceeds  to  the  extent
      that:

      (i)    such  Insurance Proceeds are promptly upon receipt by the relevant
             member  of  the  Group  deposited  in  the  Prepayment  Account in
             accordance with paragraph (d) below; and

      (ii)   such  Insurance Proceeds are applied, to the satisfaction  of  the
             Facility  Agent,  towards  the  replacement,  reinstatement and/or
             repair   of  the  assets  and/or  the  satisfaction  of   business
             interruption  losses  in  respect  of which the relevant insurance
             claim was made (or to refinance any  expenditure  incurred  in the
             replacement, reinstatement and/or repair of such assets and/or the
             satisfaction  of business interruption losses) within a period  of
             180 days from the  date  of  receipt of such Insurance Proceeds by
             the relevant Group member.

                                       43

<PAGE>


(d)   The Company shall ensure that any Insurance  Proceeds  to  be  applied in
      accordance  with  paragraph  (c)  above  are  promptly  deposited  in the
      Prepayment  Account,  upon  receipt  by  the  relevant Group member.  The
      relevant  Group  member  that received the Insurance  Proceeds  shall  be
      entitled, during the period  of  180 days from the date of its receipt of
      such Insurance Proceeds, to withdraw  such  Insurance  Proceeds  from the
      Prepayment  Account only to the extent that it is able to demonstrate  to
      the satisfaction  of the Facility Agent that such Insurance Proceeds will
      be immediately applied  in accordance with paragraph (c) above.  Any sums
      not so withdrawn during the  180  day  period shall thereafter be paid to
      the  Facility  Agent and applied in prepayment  of  the  Outstandings  in
      accordance with Clause 9.6 (Application of Prepayments).

9.5   MANDATORY PREPAYMENT FROM EXCESS CASH FLOW

      The Company shall ensure that, within thirty (30) days of delivery to the
      Facility  Agent  of   the  most  recent  audited  consolidated  financial
      statements of the Company pursuant to Clause 21.1(a), commencing with the
      audited  consolidated  financial   statements  of  the  Company  for  the
      financial year ending 31 December 2003, an amount equal to fifty (50) per
      cent. of the amount of the Excess Cash Flow exceeding a minimum amount of
      e10,000,000 for the financial year to  which  such  financial  statements
      relate  shall  be applied in prepayment of the Outstandings in accordance
      with Clause 9.6 (Application of Prepayments).

9.6   APPLICATION OF PREPAYMENTS

(a)   Any amounts paid  to  the  Facility  Agent  in accordance with Clause 9.2
      (Mandatory  Prepayment from Debt Issue or Equity  Issue)  to  Clause  9.5
      (Mandatory  Prepayment  from  Excess  Cash  Flow)  (inclusive)  shall  be
      applied:

      (i)    first,  in  prepayment  of  all  outstanding Term Facility A Loans
             drawn by the Company in inverse order of maturity;

      (ii)   secondly, in prepayment on a pro rata  basis  of  all  outstanding
             Term Facility A Loans drawn by Borrowers other than the Company in
             inverse order of maturity;

      (iii)  thirdly,  that  Cash Collateral be provided in an amount equal  to
             each Issuing Bank's Letter of Credit Proportion or Fronting Bank's
             liability under the Letter of Credit in Euros;

      (iv)   fourthly, in permanent  prepayment  on  a  pro  rata  basis of all
             outstanding Revolving Credit Facility Loans (in such order  as the
             Company  may  select  or, in the absence of such selection, as the
             Facility Agent shall determine); and

      (v)    fifthly, if any excess  remains,  in payment of such excess to the
             relevant member of the Group.

(b)   Any  prepayment  of the Term Facility A Loans  in  accordance  with  this
      Clause 9.6 shall reduce  (and there shall be a corresponding cancellation
      in) the Available Facility  in  respect  of  Term  Facility  A.  Any such
      cancellation  shall reduce the Commitments of the Lenders rateably  under
      Term Facility A.  No amount so cancelled may be reborrowed.

(c)   Any prepayment  of the Revolving Credit Facility Loans in accordance with
      this  Clause  9.6 shall  reduce  (and  there  shall  be  a  corresponding
      cancellation in)  the  Available  Facility  in  respect  of the Revolving
      Credit Facility.  Any such cancellation shall reduce the

                                       44

<PAGE>

      Commitments  of the Lenders  rateably  under that  Facility.  No amount so
      cancelled may be reborrowed.

9.7   DATE FOR PREPAYMENT

(a)   If Clause 9.2 (Mandatory Prepayment from Debt Issue or Equity  Issue)  to
      Clause 9.5 (Mandatory Prepayment from Excess Cash Flow) (inclusive) would
      require  the  prepayment  of  a Loan otherwise than on the last day of an
      Interest Period relating to that Loan, the Company may, by written notice
      to the Facility Agent (to be received  not  less  than three (3) Business
      Days prior to the date on which such prepayment would  be  required to be
      made  (but  for  this  Clause  9.7)),  request  that  the amount of  such
      prepayment be placed in an identified Prepayment Account  in  which event
      such  amount  shall be paid to the credit of such Prepayment Account  and
      shall be applied by the Facility Agent in prepayment of the relevant Loan
      on the last day  of  the  then  current  Interest Period relating to that
      Loan.  The interest earned on such Prepayment  Account will be applied by
      the Facility Agent towards the interest due in respect  of  the  relevant
      Loan at the time the amount is applied in prepayment of that Loan.

(b)   So  long  as  any Loan remains outstanding or any of the Commitments  are
      available for drawing,  no amount shall be withdrawn from such Prepayment
      Account  except  for  immediate  application  in  making  any  prepayment
      pursuant to Clause 9.2  (Mandatory  Prepayment  from Debt Issue or Equity
      Issue)  to  Clause  9.5  (Mandatory  Prepayment  from Excess  Cash  Flow)
      (inclusive) or as provided in paragraph (c) below.

(c)   The Facility Agent shall be entitled (but not obliged) to apply the whole
      or any part of the sums standing to the credit of such Prepayment Account
      in or towards payment of any unpaid sums at any time due from any Obligor
      under this Agreement.

9.8   VOLUNTARY PREPAYMENT

(a)   A Borrower to which a Term Facility A Loan has been made may, if it gives
      the Facility Agent not less than five (5) Business Days' (or such shorter
      period as the Majority Lenders may agree) prior notice,  prepay the whole
      or any part of any Term Facility A Loan (but, if in part, being an amount
      that reduces the amount of the relevant Term Facility A Loan by a minimum
      amount of e 500,000 and represents an integral multiple of e 250,000).

(b)   A  Term  Facility A Loan may only be prepaid after the last  day  of  the
      Availability  Period  applicable  to Term Facility A (or, if earlier, the
      first day on which the Available Facility  applicable  to Term Facility A
      is zero).

(c)   Any  prepayment under this Clause 9.8 shall be applied in  the  order  of
      maturity set out in Clause 7.1 (Repayment of Term Facility A Loans).

(d)   The Company  may  not,  prior  to  the  Revolving  Credit  Facility Final
      Repayment Date, prepay the whole or any part of the Term Facility C Loan.
      However,  in  case  the  Lenders  of  the  Term  Facility C Loan consent,
      contrary to the preceding sentence, to a prepayment  of  the whole or any
      part of the Term Facility C Loan, any such prepayment shall  be  set  off
      against  the  outstanding Repayment Amounts of Term Facility C in inverse
      chronological order.

                                       45

<PAGE>

9.9   CASH COLLATERALISATION OF THE LETTER OF CREDIT

      The Company may  provide  Cash  Collateral  in Euros to reduce an Issuing
      Bank's Letter of Credit Proportion or a Fronting  Bank's  liability under
      the  Letter of Credit at any time, PROVIDED THAT to the extent  that  the
      Letter  of  Credit  is  issued  by  more than one Issuing Bank, such Cash
      Collateral  shall  be applied towards the  pro  rata  reduction  of  each
      Issuing Bank's Letter of Credit Proportion.

9.10  VOLUNTARY CANCELLATION

(a)   Except in relation to  Term  Facility C, the Company may, if it gives the
      Facility Agent not less than five  (5)  Business  Days'  (or such shorter
      period as the Majority Lenders may agree) prior notice, cancel  the whole
      or  any  part  (being  a minimum amount of e 500,000 and representing  an
      integral  multiple  of  e250,000)   of   an   Available   Facility.   Any
      cancellation under this Clause 9.10 shall reduce the Commitments  of  the
      Lenders rateably under that Facility.

(b)   The  Company  may give the Facility Agent not less than five (5) Business
      Days' (or such  shorter  period  as the Majority Lenders may agree) prior
      notice  of its intention to procure  that  the  relevant  Issuing  Bank's
      liability  under  the  Letter of Credit is reduced to zero (whereupon the
      Company shall do so).

9.11  RIGHT OF REPAYMENT AND CANCELLATION  IN  RELATION  TO  A  SINGLE  LENDER,
      ISSUING BANK OR FRONTING BANK

(a)   If:

      (i)    any  sum  payable to any Lender or Fronting Bank by an Obligor  is
             required to be increased under Clause 14.2(c); or

      (ii)   any Lender  or  Fronting  Bank  claims  indemnification  from  the
             Company (or that the Company procures that the liabilities of each
             of Issuing Banks or Fronting Banks under or in connection with the
             Letter  of  Credit are promptly reduced to zero) under Clause 14.3
             (Tax Indemnity) or Clause 15.1 (Increased Costs); or

      (iii)  any Lender notifies the Facility Agent of its Additional Cost Rate
             under paragraph 3 of Schedule 4 (Mandatory Cost Formula),

      the Company may, whilst  (in  the  case of paragraphs (i) and (ii) above)
      the  circumstance  giving  rise  to the  requirement  or  indemnification
      continues or (in the case of paragraph  (iii) above) that Additional Cost
      Rate is greater than zero, give the Facility  Agent  at  least  ten  (10)
      Business Days' prior written notice:

      (A)    of  cancellation  of  the  Commitments  of  that  Lender  and  its
             intention  to procure the repayment of that Lender's participation
             in the Loans; or

      (B)    (if such circumstance relates to an Issuing Bank or Fronting Bank)
             the reduction  to  zero  of that Issuing Bank's or Fronting Bank's
             liability in respect of the  Letter  of Credit or the provision of
             Cash Collateral in respect of that Issuing Bank's Letter of Credit
             Proportion  or  Fronting  Bank's liability  under  the  Letter  of
             Credit.

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

                                       46

<PAGE>

(c)   On the last day of each Interest Period  or,  as  the  case  may be, Term
      which ends after the Company has given notice under paragraph  (a)  above
      (or,  if earlier, the date specified by the Company in that notice), each
      Borrower  to  which  a Loan is outstanding and the Company in relation to
      the Letter of Credit shall:

      (i)    repay that Lender's participation in that Loan; and

      (ii)   procure  either   that   such  Issuing  Bank's  Letter  of  Credit
             Proportion  of  the  Letter of  Credit  be  reduced  to  zero  (by
             reduction of the amount of the Letter of Credit in an amount equal
             to that Issuing Bank's  Letter  of Credit Proportion) or that Cash
             Collateral be provided in an amount  equal  to such Issuing Bank's
             Letter of Credit Proportion of the Letter of Credit in Euros); and

      (iii)  (if the circumstance relates to a Fronting Bank) procure that such
             Fronting Bank's liability under the Letter of  Credit shall either
             be  reduced  to  zero  or that Cash Collateral be provided  in  an
             amount equal to such Fronting Bank's maximum actual and contingent
             liabilities under the Letter of Credit.

9.12  RESTRICTIONS

(a)   Any notice of cancellation or prepayment  given  by  any Party under this
      Clause 9  shall be irrevocable and, unless a contrary indication  appears
      in this Agreement,  shall  specify  the  date  or  dates  upon  which the
      relevant cancellation or prepayment is to be made and the amount  of that
      cancellation or prepayment.

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

(c)   No Borrower may reborrow any part of a Term Facility that is prepaid.

(d)   Unless a contrary indication appears  in  this Agreement, any part of the
      Revolving Credit Facility that is prepaid (other  than pursuant to Clause
      9.6 (Application of Prepayments)) may be reborrowed  in  accordance  with
      the terms of this Agreement.

(e)   The  Borrowers  shall  not  repay or prepay all or any part of the Loans,
      reduce the liabilities of the  Issuing  Banks  and/or  Fronting  Banks or
      provide  Cash  Collateral  in  respect  of  the Letter of Credit, and the
      Company shall not cancel all or any part of the  Commitments,  except  at
      the times and in the manner expressly provided for in this Agreement.

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

(g)   If the  Facility  Agent  receives  a  notice under this Clause 9 it shall
      promptly forward a copy of that notice  to  either  the  Company  or  the
      affected Lender, as appropriate.

(h)   Any  reduction  or  cancellation  of a Term Facility A Commitment, a Term
      Facility B Commitment, the Term Facility C Commitment or, as the case may
      be, a Revolving Credit Facility Commitment  under  this  Clause  9  shall
      reduce  the Total Term Facility A Commitments, the Total Term Facility  B
      Commitments, the Total Term Facility C Commitment or, as the case may be,
      Total Revolving  Credit  Facility  Commitments  by  the  amount  of  such
      reduction or cancellation.

                                       47

<PAGE>

                                   SECTION 5

                             COSTS OF UTILISATION

10.   INTEREST

10.1  CALCULATION OF INTEREST IN RESPECT OF TERM FACILITY A LOANS AND REVOLVING
      CREDIT FACILITY LOANS

      The  rate  of  interest  on  each Term Facility A Loan and each Revolving
      Credit Facility Loan for each  Interest Period is the percentage rate per
      annum which is the aggregate of the applicable:

      (a)    Margin;

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

      (c)    Mandatory Cost, if any.

10.2  MARGIN RATCHETS

(a)   Save as provided in paragraph (b)  below,  the  Margin,  in relation to a
      Term Facility A Loan and a Revolving Credit Facility Loan, respectively,,
      shall  be  the  percentage rate per annum specified in the definition  of
      "INITIAL MARGIN" in Clause 1.1 (Definitions).

(b)   Save as provided  in  Clause  10.4 (No Margin Ratchets in Default) and in
      accordance with Clause 10.3 (Margin  Changes),  if  after  six (6) Months
      from  the  date  of  this Agreement any unaudited consolidated management
      accounts  of  the Group  in  respect  of  the  preceding  four  Financial
      Quarters, and the  Compliance  Certificate  relating  to  such  financial
      statements,  delivered  to  the  Facility  Agent  pursuant to Clause 21.1
      (Financial   Statements)   and  Clause  21.2  (Compliance   Certificates)
      respectively, disclose that  the  Leverage Ratio as at and for the period
      of twelve (12) months ending on the  last  day  of that Financial Quarter
      falls within a range of the ratios specified in Column  A below, then the
      Margin, in respect of all Loans, shall be the reduced percentage rate per
      annum set out opposite such ratios in Column B below:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                     COLUMN A                                COLUMN B
                 (LEVERAGE RATIO)                 (MARGIN (PER CENT. PER ANNUM))
--------------------------------------------------------------------------------
<S>                                                <C>
Greater than 4.0:1                                   2.75 per cent. per annum
--------------------------------------------------------------------------------
Equal to or less than 4.0:1 but greater than 3.5:1   2.50 per cent. per annum
--------------------------------------------------------------------------------
Equal to or less than 3.5:1 but greater than 3.0:1   2.25 per cent. per annum
--------------------------------------------------------------------------------
Equal to or less than 3.0:1 but greater than 2.5:1   1.75 per cent. per annum
--------------------------------------------------------------------------------
Equal to or less than 2.5:1 but greater than 2.0:1   1.50 per cent. per annum
--------------------------------------------------------------------------------
Equal to or less than 2.0:1 but greater than 1.0:1   1.00 per cent. per annum
--------------------------------------------------------------------------------
Equal to or less than 1.0:1                          0.75 per cent. per annum
--------------------------------------------------------------------------------
</TABLE>

                                       48

<PAGE>

PROVIDED THAT, in the event that Term Facility A Outstandings:

      (i)    exceed e 200,000,000 on or after 31 December 2003,  the  Margin as
             calculated above will automatically increase by 0.50 per cent. per
             annum; and

      (ii)   exceed  e 175,000,000  on  or  after  30 June 2004, the Margin  as
             calculated above will automatically increase by a further 1.00 per
             cent. per annum.

10.3  MARGIN CHANGES

(a)   Save as provided in this Clause 10.3 and Clause  10.4 (No Margin Ratchets
      in  Default), any reduction in the Margin provided  for  by  Clause  10.2
      (Margin  Ratchets)  shall  take  effect,  in relation to all existing and
      future  Term  Facility  A  Loans  and Revolving  Credit  Facility  Loans,
      respectively,  during (but only during)  the  period from (and including)
      the  date  on  which  the  next  subsequent  Interest   Period  commences
      immediately  after the conclusion of the current Interest  Period  during
      which the Facility Agent has received the relevant consolidated financial
      statements of  the  Group,  and  the  Compliance  Certificate pursuant to
      Clause 21.2 (Compliance Certificates) for the relevant Financial Quarter,
      until  (but  excluding)  the  date on which the next subsequent  Interest
      Period commences immediately after the conclusion of the current Interest
      Period (a "READJUSTMENT DATE")  during which the earlier of the following
      occurs:

      (i)    the  date  on which the Facility  Agent  next  receives  quarterly
             consolidated  financial statements of the Group pursuant to Clause
             21.1 (Financial Statements); and

      (ii)   the latest date  by  which the Facility Agent should have received
             any such quarterly consolidated  financial statements of the Group
             in accordance with Clause 21.1 (Financial Statements), but has not
             done so.

(b)   On each Readjustment Date the Margin in respect  of  all  Term Facility A
      Loans  and  Revolving  Credit Facility Loans shall revert to the  Initial
      Margin for the applicable Facility, unless a reduced Margin is applicable
      to any such Loans in accordance with Clause 10.2 (Margin Ratchets).

(c)   If in any financial year of the Group:

      (i)    the Margin has been  reduced  pursuant  to  this  Clause  10.3  in
             reliance  on  a  Compliance  Certificate  relating to consolidated
             financial  statements of the Group delivered  pursuant  to  Clause
             21.1 (Financial Statements) in respect of any Financial Quarter in
             that financial year; and

      (ii)   the  audited   consolidated  financial  statements  of  the  Group
             delivered  pursuant  to  Clause  21.1  (Financial  Statements)  in
             respect of that financial year show that such reduction should not
             have been made,

      that reduction shall  be  reversed  with retrospective effect, the Margin
      applicable  to  the relevant Facility shall  be  that  justified  by  the
      audited consolidated financial statements,

                                       49

<PAGE>

      amounts  of interest  calculated  by  reference  to  the  reduced  Margin
      (whether or  not  already paid) shall be recalculated by reference to the
      Margin justified by  such financial statements and the Borrowers shall be
      required to make a payment  to the Facility Agent, in such amounts as the
      Facility Agent may specify, to cover any shortfall in amounts of interest
      which  should  have  been  received   by   the   Lenders   following  any
      recalculation.  The Facility Agent's determination of any such  shortfall
      shall, save in the case of manifest error, be conclusive and the Facility
      Agent  shall  provide   the   Company  with  reasonable  details  of  the
      calculation of such shortfall.

10.4  NO MARGIN RATCHETS IN DEFAULT

(a)   No reduction in the Margin provided  for by Clause 10.2 (Margin Ratchets)
      shall take effect from the date determined by the Facility Agent as being
      the date on which a Default has occurred  or come into existence (and the
      Margin shall thereafter immediately convert  to the Default Margin) until
      the date specified by the Facility Agent as being  the  date  on which it
      has been demonstrated to its reasonable satisfaction that such Default is
      no longer continuing or has been waived or in the case of a breach  of  a
      financial  covenant  under  Clause  21 (Financial Covenants), the date on
      which  the  Facility Agent receives a Compliance  Certificate  confirming
      that such breach  has  been  remedied (and the Margin shall thereafter be
      determined in accordance with  Clause 10.2 (Margin Ratchets) on the basis
      of the unaudited consolidated management accounts of the Group in respect
      of the preceding four Financial  Quarters  last delivered to the Facility
      Agent pursuant to Clause 21.1 (Financial Statements),  together  with the
      Compliance  Certificate  relating  to such financial statements delivered
      pursuant to Clause 21.2 (Compliance  Certificates). If the Facility Agent
      has reasonable doubts (berechtigte Zweifel)  that  such  breach  has been
      remedied,  the  Facility Agent (acting on behalf of the Majority Lenders)
      may request that the management accounts are to be reviewed by auditors.

(b)   The Facility Agent  shall  promptly notify the Lenders and the Company of
      any determination that a Default  has  occurred or exists or, as the case
      may be, that it has been demonstrated to its reasonable satisfaction that
      such Default is no longer continuing.

10.5  PAYMENT OF INTEREST

      The Borrower to which a Term Facility A  Loan  or,  as the case may be, a
      Revolving Credit Facility Loan has been made shall pay  accrued  interest
      on  that  Loan  on  the  last  day  of  each Interest Period (and, if the
      Interest Period is longer than six (6) Months,  on  the  dates falling at
      six-monthly intervals after the first day of the Interest Period).

10.6  CALCULATION  AND  PAYMENT OF INTEREST IN RESPECT OF THE TERM  FACILITY  C
      LOAN

      The rate of interest  on  the  Term Facility C Loan is 7,36 per cent. per
      annum calculated on the basis of  30  days per month and otherwise of the
      actual number of days elapsed and a 360 days' year. The Borrower to which
      a Term Facility C Loan has been made shall  pay  accrued interest on that
      Loan  on  each  31  March  and each 30 September of each  calendar  year.
      However, in respect of the interest payment due in relation to the period
      ending 31 March 2003, the Lender  under  Term  Facility C will notify the
      amount of interest due on such date to the Facility  Agent  in writing in
      advance and the Facility Agent will collect such amount from  the Company
      for distribution to such Lender.

                                       50

<PAGE>

10.7  DEFAULT INTEREST AND PENALTY

(a)   An  Obligor  shall  be in default (Verzug) if it fails to pay any  amount
      (other than in payment  of interest and fees, other than commitment fees)
      payable by it under a Finance Document on its due date. On the occurrence
      of such a default (Verzug),  interest  shall accrue on the overdue amount
      from the due date up to the date of actual payment (both before and after
      judgment) at a rate per annum determined  by the Facility Agent from time
      to time to be the aggregate of (i) EURIBOR or, in relation to any Loan in
      Dollars, LIBOR, (ii) 4.00 per cent. and (iii) the Mandatory Cost for such
      period as the Facility Agent may select on  the  Business Day immediately
      following such date, such rate to be recalculated  on  the  same basis at
      the  end  of each such period until such sum is received by the  Facility
      Agent. Any  interest accruing under this Clause 10.7 shall be immediately
      payable by the Obligor on demand by the Facility Agent.

(b)   If an Obligor  fails  to  pay  any amounts in payment of interest or fees
      under  a  Finance  Document on its  due  date,  such  Obligor  shall  pay
      liquidated damages to  the Facility Agent for the account of the relevant
      Lenders in an amount determined  by  the  Facility  Agent  as  being,  in
      respect  of  the period from the due date of payment until receipt by the
      Facility Agent  of  the  relevant amount, the equivalent of interest at a
      rate determined in accordance with Clause 10.7(a) applied to the relevant
      overdue amount.

(c)   In the circumstances described  in  sub-Clauses  (a)  and  (b) above, the
      Company  shall  be  entitled  to  demonstrate  that  the  damage actually
      suffered  by  the  Lenders  is  lower  than  the  amounts  determined  in
      accordance  therewith,  and  the  Lenders shall be entitled to prove  and
      claim for any higher damage.

10.8  NOTIFICATION OF RATES OF INTEREST

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

11.   INTEREST PERIODS AND THE TERM

11.1  SELECTION OF INTEREST PERIODS

(a)   A  Borrower  may  select an Interest Period for a Loan in the Utilisation
      Request for that Loan  or (in relation to a Term Facility A Loan that has
      already been borrowed) in a Selection Notice.

(b)   Each Selection Notice for  a Term Facility A Loan is irrevocable and must
      be delivered to the Facility  Agent  by  the  Borrower to which that Term
      Facility A Loan was made not later than the Specified Time.

(c)   If a Borrower fails to deliver a Selection Notice  to  the Facility Agent
      in  accordance  with  paragraph  (b) above, the relevant Interest  Period
      will, subject to Clause 11.2 (Changes  to  Interest  Periods), be one (1)
      Month,  except  for  a  Term Facility A Loan, in relation  to  which  the
      relevant  Interest  Period  will,  subject  to  Clause 11.2  (Changes  to
      Interest Periods), be three (3) Months.

(d)   Subject to this Clause 11,  a  Borrower  may select an Interest Period of
      one (1) (but not in relation to a Term Facility  A  Loan), two (2), three
      (3)  or  six (6) Month(s) or any other period (except in  relation  to  a
      Revolving  Credit Facility Loan) agreed between the relevant Borrower and
      the Facility  Agent  (acting  on  the  instructions  of all the Lenders);
      however, in

                                       51

<PAGE>

      relation to a Revolving  Credit Facility Loan,  there may not be more than
      twelve (12) one Month Interest Periods in any one year.

(e)   Subject  to Clause 11.3, an Interest Period for a Term  Facility  A  Loan
      shall not  extend  beyond  the  Term Facility A Final Repayment Date.  An
      Interest Period for a Revolving Credit  Facility  Loan  shall  not extend
      beyond the Revolving Credit Facility Final Repayment Date.  The  Term for
      the  Letter  of  Credit  shall  not  extend  beyond  the  Term Facility B
      Repayment Date.

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

(g)   A  Revolving  Credit Facility Loan has one Interest  Period  only,  which
      shall start on the Utilisation Date.

(h)   The Term for the Letter of Credit shall start on the Utilisation Date.

11.2  CHANGES TO INTEREST PERIODS

(a)   Prior to determining  the  interest  rate for a Term Facility A Loan, the
      Facility Agent may, but is not obliged to, shorten an Interest Period for
      any Term Facility A Loan to ensure that  the  Loans drawn by any Borrower
      in respect of that Term Facility A and having an  Interest  Period ending
      on  a Term Facility A Repayment Date have an aggregate Euro Amount  equal
      to or  greater  than the relevant Repayment Instalment applicable to that
      Borrower and that Loan on that date.

(b)   Prior to determining  the  interest  rate for a Revolving Credit Facility
      Loan, the Facility Agent may, but is not  obliged to, shorten an Interest
      Period for any Revolving Credit Facility Loan,  so  that  it  ends  on  a
      Revolving  Credit Facility Cancellation Date (or, if any such date is not
      a Business Day,  on  the preceding Business Day), in order to ensure that
      the aggregate Euro Amount of the Revolving Credit Facility Loans will not
      exceed the Total Revolving  Credit Facility Commitments immediately after
      any Revolving Credit Facility Cancellation Date.

(c)   If the Facility Agent makes any  of  the  changes  to  an Interest Period
      referred to in this Clause 11.2, it shall promptly notify the Company and
      the Lenders.

11.3  NON-BUSINESS DAYS

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

11.4  CONSOLIDATION AND DIVISION OF TERM FACILITY A LOANS

(a)   Subject to paragraph (b) below, if two or more Interest Periods:

      (i)    relate  to  Loans  under  the  Term  Facility  A  and  in the same
             currency; and

      (ii)   end on the same date; and

      (iii)  are made to the same Borrower,

                                       52

<PAGE>

      those Term Facility A Loans will, unless that Borrower specifies  to  the
      contrary  in  the  Selection  Notice  for  the  next  Interest Period, be
      consolidated into, and treated as, a single Loan under  the Term Facility
      A on the last day of the Interest Period.

(b)   Subject to Clause 4.3 (Maximum Number of Loans and Letters of Credit) and
      Clause 5.3 (Currency and Amount), if a Borrower requests  in  a Selection
      Notice  that  a  Term  Facility A Loan be divided into two or more  Loans
      under Term Facility A, that Term Facility A Loan will, on the last day of
      its  Interest Period, be  so  divided  with  amounts  specified  in  that
      Selection Notice, being an aggregate Euro Amount equal to the Euro Amount
      of the Term Facility A Loan immediately before its division, having taken
      into account any repayment to be made on that day.

12.   CHANGES TO THE CALCULATION OF INTEREST

12.1  ABSENCE OF QUOTATIONS

      Subject to Clause 12.2 (Market Disruption), if EURIBOR or, if applicable,
      LIBOR  is  to  be  determined  by  reference to the Reference Banks but a
      Reference Bank does not supply a quotation  by  the Specified Time on the
      Quotation Day, the applicable EURIBOR or LIBOR shall be determined on the
      basis of the quotations of the remaining Reference Banks.

12.2  MARKET DISRUPTION

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

      (i)    the Margin;

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

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

(b)   In this Agreement "MARKET DISRUPTION EVENT" means:

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

      (ii)   before close of business in Luxembourg  on  the  Quotation Day for
             the   relevant   Interest  Period,  the  Facility  Agent  receives
             notifications from  a Lender or Lenders (whose participations in a
             Loan exceed fifty (50) per cent. of that Loan) that the cost to it
             of obtaining matching  deposits  in  the Relevant Interbank Market
             would be in excess of EURIBOR or, if applicable, LIBOR.

12.3  ALTERNATIVE BASIS OF INTEREST OR FUNDING

(a)   If a Market Disruption Event occurs and the Facility Agent or the Company
      so  requires,  the  Facility  Agent  and  the Company  shall  enter  into
      negotiations (for a period of not more than

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      thirty  (30)  days)  with  a view  to  agreeing  a  substitute  basis  for
      determining the rate of interest. If no agreement is reached,  Clause 12.2
      (Market Disruption) shall continue to apply.

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

12.4   BREAK COSTS

(a)   Each  Borrower  shall,  within  three  (3) Business Days of demand by the
      Facility Agent acting on behalf of a Finance  Party,  pay to the Facility
      Agent  on  demand for the account of that Finance Party its  Break  Costs
      attributable  to  all  or  any part of a Loan or Unpaid Sum being paid by
      that Borrower on a day other  than  the last day of an Interest Period or
      Term for that Loan or Unpaid Sum.

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

13.   FEES

13.1  COMMITMENT FEE

(a)   The Company  shall,  in  respect  of  each Term Facility (except for Term
      Facility C), pay to the Facility Agent (for the account of each Lender) a
      commitment fee in Euros, as the case may  be,  computed  at  the  rate of
      fifty  (50) per cent. of the Margin on that Lender's Available Commitment
      under each  Term  Facility for the Availability Period applicable to that
      Term Facility.

(b)   The Company shall,  in  respect  of the Revolving Credit Facility, pay to
      the Facility Agent (for the account  of  each Lender) a commitment fee in
      Euros computed at the rate of fifty (50) per  cent. of the Margin on that
      Lender's Available Commitment under the Revolving Credit Facility for the
      Availability Period applicable to the Revolving Credit Facility.

(c)   Accrued commitment fees are payable on the last  day  of  each successive
      period  of  three  (3) Months which ends during the relevant Availability
      Period, on the last  day  of  the relevant Availability Period and on the
      cancelled amount of the relevant  Lender's  Commitment  at  the  time the
      cancellation is effective.

13.2  AGENCY FEE

      The  Company  shall  pay  to the Facility Agent (for its own account)  an
      agency fee in the amount and at the times agreed in a Fee Letter.

13.3  SECURITY AGENT FEE

      The Company shall pay to the  Security  Agent  (for  its  own  account) a
      security agent fee in the amount and at the times agreed in a Fee Letter.

13.4  LETTER OF CREDIT COMMISSION

(a)   The  Company  shall,  in respect of the Letter of Credit II or, upon  the
      Deemed  Facility  B Utilisation  ,  in  respect  of  the  Existing  L/Cs,
      respectively, pay to  the  Facility Agent (for the account of each Term B
      Facility Lender) (for distribution in proportion to each Term B

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      Facility  Lender's Letter of Credit  Proportion of the Letter of Credit) a
      letter of credit  commission  in Euros  computed at the rate of the Margin
      (as may be adjusted in accordance  with Clause 10.2 (Margin  Ratchets)) on
      the  maximum  actual  and  contingent  liabilities  of the Term B Facility
      Lenders under the Letter of Credit less the amount of any Cash  Collateral
      provided  in  respect  of that  Letter of Credit  (the  "LETTER  OF CREDIT
      COMMISSION RATE").

(b)   The letter of credit commission shall be paid in arrears  in  respect  of
      each  preceding  period  of  three  (3) Months (or such shorter period as
      shall end on the Expiry Date) which begins  during the Term of the Letter
      of Credit, the first payment to be made on the  Utilisation  Date for the
      Letter of Credit and after that on the first day of each such  successive
      period.

13.5  ARRANGEMENT FEE

      The  Company shall pay to the Mandated Lead Arrangers an arrangement  fee
      in the amount and at the times agreed in a Fee Letter.

13.6  FRONTING FEE

      The Fronting  Fee in Euros of 0.25 per cent. per annum to be paid to each
      Fronting Bank on  the  amount  of such Fronting Bank's maximum actual and
      contingent liabilities as a Fronting  Bank  under the Existing L/Cs (less
      the amount of any Cash Collateral provided for  such liabilities and less
      the amount of the own commitment of the Fronting  Bank in its capacity as
      Lender) payable in arrears in respect of each preceding  period  of three
      (3) Months (or such shorter period as shall end on the Expiry Date) which
      begins during the Term of the Letter of Credit, the first payment  to  be
      made  on  the Utilisation Date for the Letter of Credit and after that on
      the first day of each such successive period..

13.7  SUBFACILITY MARGIN AND COMMITMENT FEE

(a)   Each Subfacility  Bank  shall,  in  respect of its Subfacility and to the
      extent such amounts are actually received  from  the relevant Borrower by
      the Subfacility Bank, pay to the Facility Agent (for  the account of each
      Lender) (for distribution in proportion to each Lender's Revolving Credit
      Facility  Commitment)  (i) interest equal to the Margin applicable  to  a
      Revolving Credit Facility  Loan  (as  may  be adjusted in accordance with
      Clause 10.2 (Margin Ratchets)) on the daily  utilised  amount  under  the
      Subfacility (the "SUBFACILITY MARGIN") and (ii) a commitment fee computed
      at  the  rate  per  annum  set  out in Clause 13(1)(b) above on the daily
      unutilised  amount  under the Subfacility  (the  "SUBFACILITY  COMMITMENT
      FEE").

(b)   The Subfacility Margin  and  the  Subfacility  Commitment  Fee  shall  be
      payable monthly in arrears.

13.8  SUBFACILITY FEE

      Each  Borrower  shall, in respect of each Subfacility established for it,
      pay to the relevant  Subfacility  Bank for the latter's own account a fee
      on the amount of such Subfacility from  day  to  day  during  the  period
      beginning  with  the  date  of  the  establishment of the Subfacility and
      ending on the date on which such Subfacility  expires  in accordance with
      the  terms of this Agreement, such fee to be calculated at  the  rate  of
      0,25 per cent. per annum payable monthly in arrears.

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                                  SECTION 6

                        ADDITIONAL PAYMENT OBLIGATIONS

14.   TAX GROSS UP AND INDEMNITIES

14.1  DEFINITIONS

(a)   In this Clause 14:

      "PROTECTED PARTY" means a Finance Party that is or will be subject to any
      liability,  or  required to make any payment, for or on account of Tax in
      relation to a sum  received  or  receivable  (or  any  sum deemed for the
      purposes of Tax to be received or receivable) under a Finance Document.

      "TAX  CREDIT"  means  a  credit  against,  relief  or remission  for,  or
      repayment of, any Tax.

      "TAX DEDUCTION" means a deduction or withholding for or on account of Tax
      from a payment under a Finance Document.

      "TAX PAYMENT" means an increased payment made by an  Obligor to a Finance
      Party  under  Clause 14.2  (Tax Gross-up) or a payment under  Clause 14.3
      (Tax Indemnity).

(b)   In this Clause 14 a reference  to  "DETERMINES"  or  "DETERMINED" means a
      determination  made in the absolute discretion of the person  making  the
      determination.

14.2  TAX GROSS-UP

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

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

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

(d)   An Obligor is not required to make an increased payment to a Lender under
      paragraph (c) above for a Tax Deduction  in  respect  of tax imposed on a
      payment of interest on a Loan, if on the date on which  the payment falls
      due,  the  Obligor  making  the payment is able to demonstrate  that  the
      payment:

      (i)    relates to a Tax referred to in Clause 14.3(b); or

      (ii)   could have been made to  the  Lender without the Tax Deduction had
             that  Lender  complied with its obligations  under  paragraph  (g)
             below.

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<PAGE>

(e)   If an Obligor is required  to  make  a  Tax Deduction, that Obligor shall
      make that Tax Deduction and any payment required  in connection with that
      Tax Deduction within the time allowed and in the minimum  amount required
      by law.

(f)   Within thirty (30) days of making either a Tax Deduction or  any  payment
      required  in connection with that Tax Deduction, the Obligor making  that
      Tax Deduction  shall  deliver to the Facility Agent for the Finance Party
      entitled to the payment  evidence reasonably satisfactory to that Finance
      Party  that the Tax Deduction  has  been  made  or  (as  applicable)  any
      appropriate payment paid to the relevant taxing authority.

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

14.3  TAX INDEMNITY

(a)   The  Company  shall  (within  three (3) Business Days of  demand  by  the
      Facility Agent) pay to a Protected  Party  an  amount  equal to the loss,
      liability  or cost that that Protected Party determines will  be  or  has
      been (directly  or  indirectly) suffered for or on account of Tax by that
      Protected Party.

(b)   Paragraph (a) above shall not apply with respect to any Tax assessed on a
      Finance Party:

      (i)    under the law  of  the jurisdiction in which that Finance Party is
             incorporated or, if different, the jurisdiction (or jurisdictions)
             in  which that Finance  Party  is  treated  as  resident  for  tax
             purposes  or,  for  the  avoidance  of doubt, caused by its German
             limited tax liability (beschrankte Steuerpflicht); or

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

      if in either case that Tax is imposed on or  calculated  by  reference to
      the  net  income  received  or receivable (but not any sum deemed  to  be
      received or receivable) by that Finance Party.

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

(d)   A Protected Party shall,  on  receiving  a  payment from an Obligor under
      this Clause 14.3, notify the Facility Agent.

14.4  TAX CREDIT

(a)   If  an  Obligor  makes  a  Tax  Payment  and the relevant  Finance  Party
      determines that:

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

      (ii)   that Finance Party has obtained, utilised  and  retained  that Tax
             Credit,

      the  Finance  Party shall pay an amount to the Obligor which that Finance
      Party determines will leave it (after that payment) in the same after-Tax
      position as it would have been in had the Tax Deduction not been required
      by law.

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<PAGE>

(b)   If such a Tax Credit  by  reference  to  which a Finance Party has made a
      payment  to  an  Obligor  under  paragraph  (a)   above  is  subsequently
      disallowed  or  cancelled, the Obligor must reimburse  any  payment  made
      under paragraph (a) above to the relevant Finance Party.

(c)   If an Obligor makes  a  Tax  Payment,  a  Finance  Party  shall  take all
      reasonable  steps  to  claim  a  Tax Credit unless in the opinion of that
      Finance Party the making of such claim  might  have  an adverse effect on
      its business, operations, property, condition or prospects  (financial or
      otherwise).   The  relevant  Obligor shall bear any costs incurred  by  a
      Finance Party in making such a claim.

14.5  STAMP TAXES

      The Company shall pay and, within  three  (3)  Business  Days  of demand,
      indemnify  each  Finance  Party against any cost, loss or liability  that
      Finance Party incurs in relation  to  all  stamp  duty,  registration and
      other  similar  Taxes  payable in respect of any Finance Document.   Each
      Finance Party shall use  best efforts to avoid incurring such stamp duty,
      registration and other similar  Taxes  in circumstances where it would be
      reasonable for it to do so.

14.6  VALUE ADDED TAX

(a)   All consideration payable under a Finance  Document  by  an  Obligor to a
      Finance  Party  shall  be deemed to be exclusive of any VAT.  If  VAT  is
      chargeable, the Obligor  shall  pay  to the Finance Party (in addition to
      and at the same time as paying the consideration)  an amount equal to the
      amount of the VAT.

(b)   Where a Finance Document requires an Obligor to reimburse a Finance Party
      for any costs or expenses, that Obligor shall also at  the  same time pay
      and indemnify that Finance Party against all VAT incurred by that Finance
      Party  in respect of the costs or expenses save to the extent  that  that
      Finance Party is entitled to repayment or credit in respect of the VAT.

15.   INCREASED COSTS

15.1  INCREASED COSTS

(a)   Subject  to  Clause 15.3 (Exceptions) the Company shall, within three (3)
      Business Days of a demand by the Facility Agent, pay for the account of a
      Finance Party  the amount of any Increased Costs incurred by that Finance
      Party or any of its Affiliates as a result of:

      (i)    the introduction  of or any change in (or in the interpretation or
             application of) any law or regulation; or

      (ii)   compliance with any  law or regulation made after the date of this
             Agreement.

(b)   In this Agreement "INCREASED COSTS" means:

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

      (ii)   an additional or increased cost; or

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

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<PAGE>

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

15.2  INCREASED COST CLAIMS

(a)   A  Finance  Party  intending  to  make  a  claim  pursuant to Clause 15.1
      (Increased  Costs) shall notify the Facility Agent of  the  event  giving
      rise to the claim,  following  which  the  Facility  Agent shall promptly
      notify the Company.

(b)   Each Finance Party shall, as soon as practicable after  a  demand  by the
      Facility  Agent  or  the  Company,  provide  a certificate confirming the
      amount of its Increased Costs in and supported  in  reasonable  detail in
      abstract terms.

15.3  EXCEPTIONS

(a)   Clause 15.1  (Increased Costs) does not apply to the extent any Increased
      Cost is:

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

      (ii)   compensated for by Clause 14.3 (Tax Indemnity) (or would have been
             compensated for under  Clause 14.3  (Tax Indemnity) but was not so
             compensated solely because one of the exclusions in Clause 14.3(b)
             applied);

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

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

(b)   In  this  Clause 15.3,  a  reference  to  a  "TAX DEDUCTION" has the same
      meaning given to the term in Clause 14.1 (Definitions).

16.   OTHER INDEMNITIES

16.1  CURRENCY INDEMNITY

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

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

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

      that  Obligor shall  as  an  independent  obligation,  within  three  (3)
      Business Days of demand, indemnify each Finance Party to whom that Sum is
      due against  any cost, loss or liability arising out of or as a result of
      the conversion including any discrepancy between (A) the rate of exchange
      used to convert that Sum from the First Currency into the Second Currency
      and (B) the rate  or  rates  of  exchange available to that person at the
      time of its receipt of any amount paid to it in satisfaction, in whole or
      in part, of such claim, proof, order, judgment or award.

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<PAGE>

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

16.2  OTHER INDEMNITIES

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

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

      (b)    issuing, or making arrangements to issue the Letter of  Credit but
             not  issued by reason of the operation of any one or more  of  the
             provisions of this Agreement; or

      (c)    any Outstandings  (or  part of any Outstandings) not being prepaid
             in accordance with a notice of prepayment given by a Borrower.

16.3  INDEMNITY TO THE FACILITY AGENT AND THE SECURITY AGENT

      The Company shall promptly indemnify  the Facility Agent and the Security
      Agent against any cost, loss or liability  incurred by the Facility Agent
      or the Security Agent (in each case acting reasonably) as a result of:

      (a)    investigating any event which it reasonably believes is a Default;

      (b)    (in the case of the Facility Agent) entering  into  or  performing
             any foreign exchange contract for the purposes of Clause 6 (Change
             of Currency); or

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

17.   MITIGATION BY THE LENDERS

17.1  MITIGATION

(a)   Each  Finance  Party  shall, in consultation with the Company,  take  all
      reasonable steps to mitigate  any  circumstances  which  arise  and which
      would  result in any amount becoming payable under, or cancelled pursuant
      to,  any   of   Clause 9.1  (Illegality),  Clause 14  (Tax  Gross-Up  and
      Indemnities) or Clause 15  (Increased  Costs)  including (but not limited
      to) transferring its rights and obligations under  the  Finance Documents
      to another Affiliate or Facility Office.

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

17.2  LIMITATION OF LIABILITY

(a)   The Company shall indemnify each Finance Party for all costs and expenses
      reasonably incurred by that  Finance  Party as a result of steps taken by
      it under Clause 17.1 (Mitigation).

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(b)   A  Finance  Party  is not obliged to take  any  steps  under  Clause 17.1
      (Mitigation)  if,  in   the   opinion   of  that  Finance  Party  (acting
      reasonably),  to  do  so  might  be prejudicial  to  it  or  any  of  its
      Affiliates.

18.   COSTS AND EXPENSES

18.1  TRANSACTION EXPENSES

      Unless and to the extent agreed otherwise,  the Company shall promptly on
      demand pay to the Documentation Agent, the Facility  Agent,  the Security
      Agent  and  the  Mandated  Lead  Arrangers  the  amount of all costs  and
      expenses (including legal fees) reasonably incurred  by  any  of  them in
      connection   with  the  negotiation,  preparation,  printing,  execution,
      syndication and performance of:

      (a)    this Agreement  and  any  other  documents  referred  to  in  this
             Agreement; and

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

18.2  AMENDMENT COSTS

      If:

      (a)    an Obligor requests an amendment, waiver or consent; or

      (b)    an  amendment  is  required  pursuant  to  Clause 31.9 (Change  of
             Currency),

      the  Company shall, within three (3) Business Days of  demand,  reimburse
      the Documentation  Agent,  the  Facility Agent and the Security Agent for
      the amount of all costs and expenses  (including  legal  fees) reasonably
      incurred by the Facility Agent or the Security Agent, as the case may be,
      in responding to, evaluating, negotiating or complying with  that request
      or requirement.

18.3  ENFORCEMENT COSTS

      The Company shall, within three (3) Business Days of demand, pay  to each
      Finance Party the amount of all costs and expenses (including legal fees)
      reasonably  incurred  by  that  Finance  Party  in  connection  with  the
      enforcement  of,  or  the  preservation  of any rights under, any Finance
      Document.

18.4  SECURITY AGENT EXPENSES

      The Company shall promptly on demand pay to the Security Agent the amount
      of all costs and expenses (including legal  fees)  reasonably incurred by
      the Security Agent (for its own account and that of any Finance Party) in
      connection with the constitution, administration or release of any of the
      Transaction Security.

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                                    SECTION 7

                                    GUARANTEE

19.   GUARANTEE AND INDEMNITY

19.1  GUARANTEE AND INDEMNITY

      Subject  to  Clause  19.9 (Limitations for German Guarantors)  to  Clause
      19.15 (Limitations for  Canadian  Guarantors)  inclusive,  each Guarantor
      irrevocably and unconditionally jointly and severally:

      (a)    guarantees (garantiert) to each Finance Party punctual performance
             by  each  Borrower  of  all that Borrower's obligations under  the
             Finance Documents;

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

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

19.2  CONTINUING GUARANTEE

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

19.3  REINSTATEMENT

      If any payment by an Obligor or any discharge  given  by  a Finance Party
      (whether in respect of the obligations of any Obligor or any security for
      those  obligations  or  otherwise) is avoided or reduced as a  result  of
      insolvency or any similar event:

      (a)    the liability of each  Obligor  shall  continue as if the payment,
             discharge, avoidance or reduction had not occurred; and

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

19.4  WAIVER OF DEFENCES

      The  obligations  of  each  Guarantor under this Clause 19  will  not  be
      affected by an act, omission, matter or thing which, but for this Clause,
      would reduce, release or prejudice  any  of  its  obligations  under this
      Clause 19  (without  limitation  and  whether  or not known to it or  any
      Finance Party) including:

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      (a)    any time, waiver or consent granted to, or  composition  with, any
             Obligor or other person;

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

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

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

      (e)    any  amendment  (however  fundamental) or replacement of a Finance
             Document or any other document or security;

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

      (g)    any insolvency or similar proceedings.

19.5  IMMEDIATE RECOURSE

      Each  Guarantor  waives  any  right  it may have of first  requiring  any
      Finance Party (or any trustee or the Facility  Agent  on  its  behalf) to
      proceed against or enforce any other rights or security or claim  payment
      from any person before claiming from that Guarantor under this Clause 19.
      This waiver applies irrespective of any law or any provision of a Finance
      Document to the contrary.

19.6  APPROPRIATIONS

      Until all amounts which may be or become payable by the Obligors under or
      in  connection  with the Finance Documents have been irrevocably paid  in
      full, each Finance  Party  (or  any  trustee or the Facility Agent on its
      behalf) may:

      (a)    refrain from applying or enforcing  any  other moneys, security or
             rights held or received by that Finance Party  (or  any trustee or
             Facility  Agent  on  its  behalf) in respect of those amounts,  or
             apply and enforce the same in such manner and order as it sees fit
             (whether against those amounts  or  otherwise)  and  no  Guarantor
             shall be entitled to the benefit of the same; and

      (b)    hold  in  an interest-bearing suspense account any moneys received
             from any Guarantor  or  on  account  of  any Guarantor's liability
             under this Clause 19.

19.7  DEFERRAL OF GUARANTORS' RIGHTS

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

      (a)    to be indemnified by an Obligor;

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

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

19.8  ADDITIONAL SECURITY

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

19.9  LIMITATIONS FOR GERMAN GUARANTORS

(a)   Each  Finance  Party  agrees  that  the enforcement of the guarantee  and
      indemnity pursuant to this Clause 19,  and  any  Security  provided  by a
      Guarantor pursuant to the terms of the Security Documents, other than  in
      respect  of  Loans made available to such Guarantor or to a Subsidiary of
      such Guarantor  by  a  Lender, or by another Obligor from the proceeds of
      Loans, shall be limited,  in  relation  to  any  Obligor  (other than the
      Company)  which  is a German limited liability company (Gesellschaft  mit
      beschrankter Haftung  - GmbH) (a "GERMAN OBLIGOR"), to the extent that
      payment under that guarantee  and  indemnity,  or  the enforcement of the
      Security, would cause the higher of (i) the German Obligor's  net  assets
      (including, for the avoidance of doubt, the amount corresponding to  such
      German Obligor's registered share capital (Stammkapital)) as per the date
      of  this  Agreement minus 10% (the "BASE NET ASSETS") and (ii) the German
      Obligor's net  assets  (including, for the avoidance of doubt, the amount
      corresponding to such German  Obligor's  Stammkapital)  as per the end of
      the  calendar  month preceding the date of enforcement of this  guarantee
      and indemnity or of any Security (the "CURRENT NET ASSETS") to fall below
      its Stammkapital PROVIDED THAT for the purposes of the calculation of the
      Base Net Assets  and  the  Current Net Assets the following balance sheet
      items shall be adjusted as follows:

      (i)    the amount of any increase  of  the  Stammkapital  of the relevant
             German Obligor after the date of this Agreement shall  be deducted
             from the relevant  Stammkapital;

      (ii)   loans provided to the relevant German Obligor (or to any direct or
             indirect Subsidiary of such German Obligor) by any member  of  the
             Group  shall  be  disregarded if and to the extent such loans have
             been made from funds  made available to a  German Obligor pursuant
             to  the  terms of this Agreement,  or  are  subordinated,  or  are
             considered subordinated pursuant to Sec. 32a GmbHG; and

      (iii)  loans  and   other   liabilities  incurred  in  violation  of  the
             provisions of this Agreement shall be disregarded,

      and FURTHER PROVIDED THAT the  relevant  German  Obligor  shall  for  the
      purposes  of the determination of the Base Net Assets and the Current Net
      Assets dispose  of  all assets where the relevant assets are shown in the
      balance sheet of the German Obligor with a book value (Buchwert) which is
      significantly lower than  the  market  value  of  such  assets. The above
      limitations shall not apply if following notification by  a Finance Party
      of  claims  raised  under  the guarantee and indemnity pursuant  to  this
      Clause 19, or of the enforcement  of  Security by such Finance Party, the
      relevant German Obligor does not provide  conclusive  evidence, including
      in  particular  interim financial statements up to the end  of  the  last
      completed calendar  month (which shall be audited if reasonably requested
      by the Facility

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      Agent), within twenty five (25) days after the date of such notification,
      or if after receipt of such unaudited statements notification is given to
      the relevant German Obligor to provide audited financial statements up to
      the end of that same calendar month and such audited financial statements
      are  not  provided  within  fifty  (50)  days  after  the  date  of  such
      notification.

(b)   Each German Obligor may  at  any time request by giving written notice to
      the Facility Agent that the amount  of  the  Base Net Assets relevant for
      the purpose of Clause 19.9 (a)  is reduced to  an  amount  (the  "REDUCED
      AMOUNT") corresponding to the amount of such German Obligor's actual  net
      assets (to be determined as set out in para. (a) above), less or plus, as
      the  case  may  be, any decrease or increase to be reasonably expected in
      the course of a period  of  one  Month  from  the  date of receipt by the
      Facility  Agent of the notice (the "NOTICE PERIOD").  Together  with  any
      such written  request,  the  relevant  German  Obligor  shall provide the
      Facility  Agent  with   reasonable  evidence (substantially applying  the
      rules  applicable  for  setting  up  a  statement   of   overindebtedness
      ("{U"}berschuldungsstatus"))  showing  the  German Obligor's  net  assets
      position  (to be determined as set out in para.  (a)  above),  and  shall
      further provide  the  Facility  Agent with a written confirmation setting
      out the German Obligor's projected  net  assets  as  per  the  end of the
      Notice Period and stating the reasons therefor in reasonable detail. Upon
      the  lapse  of the Notice Period, the Base Net Assets shall be deemed  to
      correspond to the Reduced Amount, unless the Lenders have terminated this
      Agreement in  accordance  with  the  provisions  of  this  Agreement  and
      notified the respective German Guarantor thereof before the lapse of such
      Notice Period.

19.10 LIMITATIONS FOR AUSTRIAN OBLIGORS



(a)   Each Guarantor established in Austria ("AUSTRIAN GUARANTOR") acknowledges
      that:

      (i)    it  will  receive valuable direct or indirect benefits as a result
             of the Facilities  or  Subfacilities  made  available  under  this
             Agreement;

      (ii)   the  Borrowers  of  the  Facilities  shall  pay  to  each Austrian
             Guarantor an adequate and arm's length annual fee for granting the
             guarantee under this Clause 19;

      (iii)  each Finance Party has acted in good faith in connection  with the
             guarantee  given  by  that Austrian Guarantor and the transactions
             contemplated by the Finance Documents; and

      (iv)   it has not incurred and  does not intend to incur debts, including
             contingent liabilities beyond its ability to pay as they mature.

(b)   Notwithstanding anything to the contrary  contained  herein  or any other
      Finance Document the liability of each Austrian Guarantor:

      (i)    shall  be  limited  to  funds  applied  by  the Borrowers for  the
             valuable  direct or indirect benefits of the Austrian  Guarantors;
             and

      (ii)   shall be limited to an amount of:

             (A)   the Future  Additional  Net  Asset  Value  of  that Austrian
                   Guarantor; in addition, if applicable,

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             (B)   the  equivalent in Euro of the aggregate Utilisations  (plus
                   accrued  interest commission and fee thereon) on-lent to the
                   respective  Austrian  Guarantor  calculated  by the Facility
                   Agent on the date which Utilisation(s) are made.

             For  the  purposes  of  this Clause 19.10  "FUTURE ADDITIONAL  NET
             ASSET VALUE"means the future  increase of the value of the balance
             sheet positions "Eigenkapital" (as defined under the provisions of
             Austrian accounting laws, currently Art. 224 sec. 3 lit A Austrian
             Commercial Code) as of the date of the execution of this Agreement
             (the "REFERENCE NET ASSET VALUE")  as opposed to the value of this
             balance sheet position on the day of  the payment demand under the
             Guarantee  pursuant  to  this  Clause  19.  An  interim  financial
             statement of that Austrian Guarantor established  upon the date of
             the  execution  of  this Agreement and certified by the  statutory
             auditors of that Austrian  Guarantor shall be prima facie evidence
             as to the amount of the Reference Net Asset Value.

(c)   Each Austrian Guarantor shall procure  to record its potential obligation
      under its guarantee and indemnity pursuant  to  this  Clause  19  in  its
      financial  statements  to  be  established  after  the  execution of this
      Agreement or its Accession to this Agreement, respectively,  pursuant  to
      Art. 199 Austrian Commercial Code.

(d)   Each  Austrian  Guarantor  agrees  that the benefit of this guarantee and
      indemnity shall be transferred and shall remain in full legal effect when
      an Existing Lender (as defined in Clause 25 (Changes to Lenders) seeks to
      transfer  its  rights and obligations  under  the  Finance  Documents  by
      assignment or by  novation to a New Lender pursuant to Clause 25 (Changes
      to Lenders).

19.11 LIMITATIONS FOR FRENCH OBLIGORS

      [TO BE AGREED UPON ACCESSION OF A FRENCH OBLIGOR]

[(a)  Each Guarantor organised  under the laws of France (a "FRENCH GUARANTOR")
      acknowledges that

      (i)   [it has not incurred  and does not intend to incur debts,  including
            contingent liabilities beyond its ability to pay as they mature];

      (ii)  the   guarantee   and   indemnity   has  been   authorised   by  the
            administration  council  before  the  contract  had been  signed  as
            defined  in  article  L 225-35  of the  French  Commercial  Code and
            article  89, 90 of the decree n* 67-236 from 23rd march 1967 (if the
            French Guarantor is a joint stock company);

      (iii) the   guarantee   and   indemnity   has  been   authorised   by  the
            administration  council (in case of the joint stock  company) or the
            assembly of the partners  (in case of a limited  company) if such an
            authorisation is necessary according to article L 225-38 and article
            L 223-19 French Commercial Code.

(b)   The liability of each French  Guarantor under this Clause 19.11 (A) shall
      not include any obligation which  does not present an economic, social or
      financial interest for the entire group,  (B)  shall  be limited to funds
      applied by the Borrowers for the valuable direct or indirect  benefits of
      the  French  Guarantors;  (C)  shall not include any obligation which  is
      contrary to the statutory object  of  the French Guarantor, (D) shall not
      include any obligation which if incurred  would  constitute the provision
      of financial assistance as defined by article

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      L 225-216  of the French  Commercial  Code and (E) shall be limited at any
      time to the greater of:

      (aa)   the equivalent to Euros of the Loans (plus  any  accrued  interest
      thereon, commissions and fees) made available to any Obligor (other than,
      if applicable, the French Guarantor) to the extent directly or indirectly
      on-lent  to the French Guarantor calculated by the Facility Agent on  the
      date on which such Loan(s) are made, to the extent that such Loan(s) have
      been on lent by such Obligor to the French Guarantor; and

      (bb)   [80]/[60]% of the greater of:

            (i)    the  Net  Asset Value of the French Guarantor calculated and
                   certified by  the statutory auditors of the French Guarantor
                   on  the  basis of  the  last  audited  financial  statements
                   available at the date hereof; and

            (ii)   the Net Asset  Value  of the French Guarantor calculated and
                   certified by the statutory  auditors of the French Guarantor
                   on  the  basis  of  the  last audited  financial  statements
                   available at the date on which demand is made on it pursuant
                   to Clause 18 (Guarantee).

      For the purposes of this Clause 19.11(b)  "NET ASSET VALUE" of the French
      Guarantor means the capitaux propres (as defined  under the provisions of
      French accounting laws, decrees and regulations consistently  applied) of
      the  French  Guarantor.  A certificate of the statutory auditors  of  the
      French Guarantor  as to the Net Asset Value shall be prima facie evidence
      as to the amount to which it relates.]

19.12 LIMITATIONS FOR ITALIAN OBLIGORS

      Each Finance Party  agrees  that  the  enforcement  of  the guarantee and
      indemnity given pursuant to this Clause 19 by any Guarantor  incorporated
      in  Italy  (an  "ITALIAN  GUARANTOR")  shall be limited as follows:  each
      Italian Guarantor shall not be liable for  any  amounts in respect of the
      guarantee and indemnity pursuant to this Clause 19 in excess of an amount
      of e 40,000,000.

19.13 LIMITATIONS FOR SPANISH OBLIGORS

      Each  Finance Party agrees that the guarantee, indemnity  and  any  other
      obligations   of   each  Guarantor  incorporated  in  Spain  (a  "SPANISH
      GUARANTOR") assumed  under  this  Agreement  and  any  Security  provided
      pursuant to the terms of this Agreement by a Spanish Guarantor shall  not
      include  and shall not extend to any amount of the Facilities utilised in
      breach of  Article  81.1 of Spanish Corporation's Act ("Ley de Sociedades
      An{o'}nimas") to fund  the  acquisition  of such Spanish Guarantor and/or
      the acquisition of its dominant company and/or  future  upstream dominant
      companies, together with interest accrued thereon or other  amounts owing
      in respect thereof under this Agreement..

19.14 LIMITATIONS FOR US OBLIGORS

(b)   Each  Finance  Party  agrees that the  enforcement  of the  Guarantee  and
      Indemnity  pursuant  to this  Clause 19, and any  Security  provided  by a
      Guarantor  organized  under  the laws of a state of the  United  States of
      America  (a "U.S.  GUARANTOR")  pursuant  to the terms of this  Agreement,
      other than in respect of Loans made available to such U.S. Guarantor or to
      a Subsidiary  of such U.S.  Guarantor by a Lender,  or by another  Obligor
      from the  proceeds  of Loans,  shall be  limited,  in relation to any U.S.
      Guarantor, to an amount not to exceed the

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      greater of (i) 95% of the Adjusted  Net Assets (as defined  below) of such
      U.S.  Guarantor on the date of delivery of this  Agreement and (ii) 95% of
      the Adjusted Net Assets of such U.S.  Guarantor on the date of any payment
      under or pursuant to the terms of this Agreement.

(c)   "ADJUSTED NET ASSETS" of any U.S.  Guarantor at any date means the greater
      of (i) the  amount by which the fair value of the  property  and assets of
      such U.S.  Guarantor  exceeds the aggregate  amount of liabilities of such
      U.S. Guarantor, including, without limitation, contingent liabilities, but
      excluding  liabilities  under this  Clause 19 at such  date,  and (ii) the
      amount by which the present fair salable  value of the property and assets
      of such  U.S.  Guarantor  at such date  exceeds  the  amount  that will be
      required to pay the  probable  liabilities  of such U.S.  Guarantor on its
      debts  (excluding  debt in respect of this Clause 19) as such debts become
      absolute and matured.

19.15 LIMITATIONS FOR CANADIAN OBLIGORS

      Each guarantor organised under the federal laws  of  Canada or any of the
      Provinces of Canada (a "CANADIAN GUARANTOR") hereby acknowledges, being a
      direct or indirect subsidiary of the Company, that it will be receiving a
      direct and indirect benefit from the Loans being provided  to the Company
      and the other Borrowers, and hereby acknowledges and confirms  that it is
      providing the guarantee contained herein in consideration of such  direct
      or indirect benefit, and for other good and valuable consideration.



                                   SECTION 8

              REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

20.    REPRESENTTIONS

20.1  REPRESENTATION AND WARRANTIES

      (a)   On the date of this  Agreement,  the  Company (in respect of its own
            affairs, each member of the Group and each Original Obligor) and, on
            the date of its accession to this Agreement, each Additional Obligor
            (in respect of its own affairs and those of its Subsidiaries)  makes
            the representations and warranties set out in this Clause 20 to each
            Finance Party.

      (b)   The Obligors  acknowledge that the Finance Parties have entered into
            this Agreement in reliance on these representations and warranties.

20.2  STATUS

      (a)   It is a corporation or limited  partnership,  duly  incorporated  or
            formed and validly existing under the law of the jurisdiction of its
            place of incorporation or its seat.

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

20.3  NO WINDING-UP

      No administrator, receiver, insolvency trustee,  examiner,  liquidator or
      similar officer or official has been appointed with respect to  it or any
      of its assets and (to the best of its

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      knowledge and belief) no petition by a third party or proceeding  for any
      such  appointment  is  pending  nor  has  any  resolution  for  any  such
      appointment been passed.

20.4  BINDING OBLIGATIONS

      The obligations expressed to be assumed by it in each Finance Document to
      which  it  is  a  party  are,  subject  to  any general principles of law
      limiting its obligations which are specifically  referred to in any legal
      opinion delivered pursuant (i) to Clause 4 (Conditions of Utilisation) or
      (ii)  Clause  26  (Changes  to  the  Obligors) and (iii)  the  conditions
      precedent set forth in the Finance Documents,  legal,  valid, binding and
      enforceable obligations.

20.5  NON-CONFLICT WITH OTHER OBLIGATIONS

      The   entry   into  and  performance  by  it  of,  and  the  transactions
      contemplated by,  the Finance Documents to which it is a party do not and
      will not conflict with:

      (a)    any law or regulation applicable to it;

      (b)    its constitutional documents;

      (c)    any agreement or instrument binding upon it or any of its assets,

      nor (except as provided in any Security Documents) result in the creation
      of, or oblige it to  create, any Security (other than Permitted Security)
      over any of its assets.

20.6  POWER AND AUTHORITY

      It has the power to enter  into,  perform  and deliver, and has taken all
      necessary action to authorise its entry into,  performance  and  delivery
      of,  the  Finance  Documents  to which it is a party and the transactions
      contemplated by those Finance Documents.   No limit on its powers will be
      exceeded as a result of such entry, delivery or performance.

20.7  VALIDITY AND ADMISSIBILITY IN EVIDENCE

      All Authorisations required:

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

      (b)    to make the Finance Documents to which it is a party admissible in
             evidence in its jurisdiction of incorporation;

      (c)    to enable it to own its material  assets and carry on its business
             as it is being conducted; and

      (d)    to enable it to create any Security  expressed to be created by it
             by or pursuant to, or as the case may  be,  any Security expressed
             to have been created by it and to be evidenced  in,  any  Security
             Document  and  to  ensure that such Security has the priority  and
             ranking it is expressed to have,

      have (save for any filings  or  registrations required in relation to the
      Security Documents, which filings  or registrations will be made promptly
      after  execution  of  the relevant documents  and  in  any  event  within
      applicable time limits)  been  obtained or effected and are in full force
      and effect.

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20.8  GOVERNING LAW AND ENFORCEMENT

      (a)   The  choice  of  German  law as  the  governing  law of the  Finance
            Documents (or, in respect of any Security  Document to which it is a
            party,  the choice of the relevant  governing  law of that  Security
            Document)  will be recognised  and enforced in its  jurisdiction  of
            incorporation.

      (b)   Any judgment obtained in the Federal Republic of Germany in relation
            to a Finance  Document  (or, in respect of any Security  Document to
            which it is a party,  any judgment  obtained in the courts which are
            expressed to have  jurisdiction to hear disputes under that Security
            Document)  will be recognised  and enforced in its  jurisdiction  of
            incorporation.

20.9  DEDUCTION OF TAX

      It is not required under the law of its jurisdiction of incorporation  to
      make  any deduction for or on account of Tax from any payment it may make
      under any Finance Document.

20.10 NO FILING OR STAMP TAXES

      It is not  necessary  that the Facilities Agreement be filed, recorded or
      enrolled with any court  or  other authority in any jurisdiction where an
      Obligor is domiciled or that any  stamp,  registration  or similar tax be
      paid  on  or in relation to the Facilities Agreement or the  transactions
      contemplated therein.

20.11 NO DEFAULT AND NO MATERIAL ADVERSE EFFECT

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

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

      (c)   No  Material  Adverse  Effect  has  occurred  since  the   date  of
            submission  of  the  latest financial statements pursuant to Clause
            21.1(b).

20.12 INFORMATION

      Any written information provided,  by the Company on its own behalf or on
      behalf of any member of the Group, to  any  Finance  Party  in connection
      with the Finance Documents was true and accurate in all material respects
      as at the date it was provided or as at the date (if any) at  which it is
      stated and is not untrue or misleading in any material respect.

20.13 GOOD TITLE TO ASSETS

      Except  in  relation  to  certain  toll manufacturing equipment, it  has,
      subject to Permitted Security, good  and  marketable  title  to  or valid
      leases or licenses of or is otherwise entitled to use all material assets
      necessary to carry on its business as it is being conducted.

20.14 INTELLECTUAL PROPERTY RIGHTS

      (a)   It owns or has licensed to it all the  Intellectual  Property Rights
            which are required by it in order for it to carry on its business in
            all material respects as it is currently

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            being  conducted  (the  "MATERIAL  IPR")  and,  to the  best  of its
            knowledge  and belief,  it does not,  in  carrying on its  business,
            infringe any Intellectual  Property Rights of any third party in any
            material respect.

      (b)   It has taken all formal or procedural  actions (including payment of
            fees)  required to maintain in full force and effect any  registered
            Material IPR owned by it.

      (c)   It is not aware of any adverse  circumstance  relating to  validity,
            subsistence or use of any of its  Intellectual  Property which might
            reasonably be expected to have a Material Adverse Effect.

20.15 CREATION OF SECURITY

      (a)   It is, or upon the execution  (and the  fulfilment of any conditions
            included  therein) of the Security  Documents to which it is a party
            will be, subject to any Permitted  Security,  the absolute legal and
            beneficial  owner of all the material  assets over which it purports
            to create Security by or pursuant to or as evidenced in the Security
            Documents.

      (b)   Subject to any general  principles  of law limiting its  obligations
            which are  specifically  referred to in any legal opinion  delivered
            pursuant (i) to Clause 4 (Conditions of  Utilisation) or (ii) Clause
            26 (Changes to the Obligors) and (iii) the conditions  precedent set
            forth in the Finance  Documents,  each Security Document to which it
            is or is to be a party creates,  or upon such execution will create,
            the Security which that Security  Document purports to create or, if
            that Security  Document  purports to evidence  Security,  accurately
            evidences,  or upon such execution will so evidence,  Security which
            has been validly created.

20.16 PENSION SCHEMES

      Each member of  the  Group  is in compliance with all applicable laws and
      contracts relating to the pension  schemes  (if  any)  for the time being
      operated by it or in which it participates and each such  pension  scheme
      is  adequately  provided for (either by way of being funded or by way  of
      provision in the balance sheet) based on reasonable actuarial assumptions
      applicable to the  jurisdiction  in  which the relevant pension scheme is
      maintained and administered and funded in accordance with applicable law.

20.17 PARI PASSU RANKING

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

20.18 INTRA-GROUP LOANS

      Other  than   the   existing  Intra-Group  Loans  and  similar  financial
      arrangements set out  in  Schedule  16 (Existing Intra-Group Loans) there
      are no other Intra-Group Loans.

20.19 NO PROCEEDINGS PENDING OR THREATENED

      (a)   Subject  to  paragraph  (c) below,  no  litigation,  arbitration  or
            administrative  proceedings of or before any court, arbitral body or
            agency which, if adversely
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            determined,  might reasonably be expected to have a Material Adverse
            Effect  have  been  started  or (to the  best of its  knowledge  and
            belief) threatened against it.

      (b)   No labour  disputes,  which might  reasonably  be expected to have a
            Material  Adverse  Effect,  have (to the best of its  knowledge  and
            belief) been started or threatened against it.

      (c)   Other than the Existing  Competition  Law  Proceedings as set out in
            Schedule 15 (Existing  Competition  Law  Proceedings  and Anti-Trust
            Lawsuits),  no competition law related (i) civil  litigation,  civil
            lawsuits or other civil proceedings of or before any court have been
            started in accordance  with the applicable  procedural  rules or (to
            the best of its  knowledge  and belief)  threatened  in any relevant
            jurisdiction  against any member of the Group  which,  if  adversely
            determined,  might reasonably be expected to have a Material Adverse
            Effect nor have (ii) any fines in the aggregate  amount  exceeding e
            2,500,000 been assessed by way of any administrative  proceedings by
            the relevant  authorities  nor have (iii) any fines in the aggregate
            amount exceeding the existing fines of e 80,200,000 and additional e
            27,750,000  by at least e  2,500,000  in  relation  to the  Existing
            Competition  Law  Proceedings  identified  in Schedule 15 No. I been
            assessed by way of any  administrative  proceedings  by the relevant
            authorities.

20.20 ENVIRONMENTAL COMPLIANCE

      (a)   It  and  each  of  its   Subsidiaries  has  obtained  all  requisite
            Environmental  Licences required for the carrying on of its business
            as currently conducted and has at all times complied with:

             (i)   all applicable Environmental Laws;

             (ii)  the terms and conditions of such Environmental Licences; and

             (iii) all other covenants, conditions, restrictions and agreements
                   directly  or  indirectly  concerned  with  any Environmental
                   Contamination,

             where failure to do so might have a Material Adverse Effect.

             There are to its knowledge no circumstances which  may  prevent or
             interfere  in  any  material  respect  with the compliance in  the
             future  of  it and each of its Subsidiaries  with  all  applicable
             Environmental  Laws,  the  terms  of  all  Environmental  Licences
             referred  to in paragraph (a) above and all covenants, conditions,
             restrictions and agreements referred to in such paragraph.

20.21 ENVIRONMENTAL CLAIMS

      No Environmental Claim  has been started or (to the best of its knowledge
      and belief) threatened against  it or any of its Subsidiaries which might
      reasonably be expected to have a Material Adverse Effect.

20.22 TAXATION

      (a)   It has duly and  punctually  paid and  discharged  all Taxes imposed
            upon  it or its  assets  within  the  time  period  allowed  without
            incurring  penalties  (save to the extent that: (i) payment is being
            contested in good faith, (ii) adequate reserves are being

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            maintained  for  those  Taxes  and  (iii)  payment  can be  lawfully
            withheld; or failure to pay is caused by administrative or technical
            error  that is  remedied  as  soon  as  possible  after  receipt  of
            notification thereof from the relevant Tax authorities).

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

      (c)   No claims  are being or are  likely to be  asserted  against it with
            respect  to Taxes  which  might  reasonably  be  expected  to have a
            Material Adverse Effect.

20.23 NO INDEBTEDNESS

      It has:

             (i)   no   Financial    Indebtedness    (other    than   Permitted
                   Indebtedness); and

            (ii)   no  other  indebtedness,  except  for  any  which  has  been
                   incurred in the ordinary course of its business.

20.24 NO SECURITY OR GUARANTEES

      (a)    Save for any Permitted Security:

             (i)   no Security exists over all or any of its assets; and

             (ii)  no arrangement or transaction as described in Clause 23.3(b)
                   has been entered into by it and is outstanding.

      (b)   Save for any Permitted Guarantees or Contingent Liabilities,  it has
            not granted or agreed to grant any guarantee.

20.25 NO IMMUNITY

      In any proceedings taken in its jurisdiction of incorporation in relation
      to any Finance  Document  to which it is a party, it will not be entitled
      to  claim  for itself or any  of  its  assets  any  immunity  from  suit,
      execution, attachment or other legal process.

20.26 INFORMATION MEMORANDUM

      (a)   The  Information  Memorandum  is  not  misleading  in  any  material
            respects and all factual information provided by or on behalf of any
            Obligor to the Mandated Lead Arrangers

             was true and accurate  at  the  date  it was provided or as at the
             date at which it is stated.

      (b)   There is no expression of opinion,  forecast or projection contained
            in  the  Information   Memorandum  or  conclusion   reached  in  the
            Information  Memorandum  which  is not fair  and  reasonable  in all
            material  respects and all  expressions of opinion,  forecasts,  and
            projections  provided by or on behalf of any Obligor to the Mandated
            Lead Arrangers

      were arrived at after careful  consideration,  were fair and were based on
      reasonable grounds.

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      (c)   Nothing has occurred or been omitted from the Information Memorandum
            and no  information  has been given or withheld  that results in the
            information contained in the Information  Memorandum being untrue or
            misleading in any material respect.

      (d)   Nothing has occurred or been omitted from the Information Memorandum
            and no  information  has been given or withheld  that results in the
            opinions,  forecasts,  projections and conclusions  contained in the
            Information  Memorandum  being other than fair and reasonable in all
            material respects.

20.27 BASE FINANCIAL STATEMENTS

      (a)   The Base Financial Statements:

            (i)    were  prepared  in  accordance with IAS or the Relevant GAAP
                   consistently applied; and

            (ii)   (in the case of the unaudited  9 months consolidated interim
                   financial  statements  of  2002  of   the   Company)  fairly
                   represent  the  financial  condition and operations  of  the
                   Group as at the date to which  they were prepared and during
                   the relevant financial period for  which they were prepared,
                   subject to normal year end adjustments,  and take account of
                   all material liabilities (contingent or otherwise),  and all
                   unrealised  or  anticipated  losses,  of the Group as at the
                   date to which they were prepared.

      (b)   There  has  been no  material  adverse  change  in the  business  or
            financial  condition of any Original Obligor since the date to which
            the latest of the Base Financial Statements was prepared.

      (c)   The financial year of the Group is the calendar year.

20.28 BUDGETS

      (a)    It:

             (i)   regards  (as  at  the  date that the most recent  Budget  is
                   delivered to the Facility Agent under Clause 21.4 (Budgets))
                   as  neither  unreasonable,   nor   to  any  material  extent
                   unattainable, any of the forecasts or projections set out in
                   that Budget;

             (ii)  believes (after having made all reasonable  enquiries)  that
                   the  assumptions,  upon  which the forecasts and projections
                   relating to the Group contained  in  the  most recent Budget
                   delivered  under Clause 21.4 (Budgets) are based,  are  fair
                   and reasonable; and

             (iii) has made full  disclosure  of all material facts relating to
                   the Group to all the persons responsible for the preparation
                   of each Budget.

20.29 GROUP STRUCTURE CHART

      (a)   The  Group  Structure  Chart  contains  descriptions  which  in  all
            material  respects are true,  complete and correct of the  corporate
            ownership  structure  of the Group as it will be  immediately  after
            Closing, including details of:

             (i)   all Subsidiaries, direct or indirect, of the Company;

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             (ii)  all  minority shareholdings in any member of the Group  held
                   by any person who is not a member of the Group;

             (iii) all companies,  partnerships and Joint Ventures in which any
                   member of the Group has an interest or participation; and

             (iv)  all Intra-Group Loans  in an amount of more than e 1,000,000
                   which are not merely temporary trading balances,

             in each case as they will be immediately after Closing.

      (b)   There  are no  re-organisational  steps  relating  to the  corporate
            ownership  structure of the Group  contemplated  at the date of this
            Agreement (including,  without limitation, any significant transfers
            of  businesses  or assets  from one member of the Group to  another)
            which are not reflected in the Group Structure Chart.

      (c)   All  re-organisational   steps  resulting  in  the  Group  corporate
            ownership  structure set out in the Group  Structure Chart have been
            or will be taken in  compliance  in all material  respects  with all
            relevant laws and regulations  and all  requirements of all relevant
            regulatory authorities.

20.30 ISSUE OF SHARE CAPITAL

      Except for the Management and Employee Benefit Plans, the  Hitco  Options
      and  the  conversion  rights  under  the  convertible bonds issued by the
      Company in September 2000, there are no agreements  in force or corporate
      resolutions  passed  which  call  for  the  present or further  issue  or
      allotment of, or grant to any person the right  (whether  conditional  or
      otherwise)  to call for the issue or allotment of, any share, partnership
      interest, loan note or loan capital of any member of the Group (including
      an option or right of pre-emption or conversion).

20.31 ERISA AND MULTIEMPLOYER PLANS

      (a)   Neither  any US Group  Member nor any ERISA  Affiliate  is making or
            accruing an  obligation to make  contributions  or has within any of
            the  five  calendar  years  immediately  preceding  the date of this
            Agreement made or accrued an obligation to make contributions to any
            Multiemployer  Plan  to  an  extent  or  in  a  manner  which  might
            reasonably be expected to have a Material Adverse Effect.

      (b)   Each Employee Plan is in compliance in all material respects in form
            and operation with ERISA and the Code and all other  applicable laws
            and regulations.

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

      (d)   The fair market value of the assets of each Employee Plan subject to
            Title  IV of ERISA is at  least  equal to the  present  value of all
            accumulated  benefit  obligations under such Employee Plan (based on
            the assumptions used for the purposes of

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<PAGE>

            Statement of Financial Accounting No. 87) as of the date of the most
            recent financial statement reflecting such amounts or, if additional
            contributions  are required to make such Employee  Plan  sufficient,
            the Company does not believe that such might  reasonably be expected
            to have a Material Adverse Effect.

      (e)   There are no material  actions,  suits or claims pending  against an
            Employee Plan (other than routine claims for  benefits),  or (to the
            knowledge  of  the  Company,  any  US  Group  Member  or  any  ERISA
            Affiliate)  threatened,  which  might  reasonably  be expected to be
            asserted successfully against any Employee Plan.

      (f)   Each US Group Member and any ERISA  Affiliate  has made all material
            contributions  to or under each such  Employee  Plan required by law
            within the applicable time limits prescribed by law, by the terms of
            such  Employee  Plan,  or by any  contract  or  agreement  requiring
            contributions to an Employee Plan.

      (g)   Neither  any US Group  Member  nor any ERISA  Affiliate  has  ceased
            operations at a facility so as to become  subject to the  provisions
            of section 4068(a) of ERISA,  withdrawn as a substantial employer so
            as to become  subject to the  provisions of section 4063 of ERISA or
            ceased making  contributions to any Employee Plan subject to section
            4064(a) of ERISA to which it made contributions.

      (h)   Neither any US Group Member nor any ERISA  Affiliate has incurred or
            reasonably expects to incur any material liability to PBGC.
20.32 MARGIN STOCK

      (a)   No US  Group  Member  is  engaged  principally,  or as  one  of  its
            important activities,  in the business of owning or extending credit
            for the purpose of purchasing or carrying any Margin Stock.

      (b)   The Facilities  will not be used,  directly or  indirectly,  for any
            purpose which might  constitute  all or any part of the Facilities a
            "purpose credit" within the meaning of Regulation U or Regulation X.

      (c)   No US Group  Member or any  Facility  Agent acting on its behalf has
            taken  or will  take  any  action  which  might  cause  the  Finance
            Documents to violate any regulation of the Board of Governors of the
            Federal Reserve System of the United States.

20.33 INVESTMENT COMPANIES

      No  US  Group  Member  is  subject to regulation under the United  States
      Public  Utility  Holding  Company  Act  of  1935  or  the  United  States
      Investment Company Act of 1940  or  any  United  States  federal or state
      statute or regulation limiting its ability to incur indebtedness.

20.34 TIME FOR MAKING REPRESENTATIONS AND WARRANTIES

      (a)   The  representations  and  warranties  set out in this Clause 20 are
            made:

             (i)   in the case of an Obligor which is a Party on  the  date  of
                   this  Agreement,  by  that Obligor on that date, the date of
                   the first Utilisation Request  under  this Agreement and the
                   first Utilisation Date; and

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             (ii)  in the case of an Obligor which becomes  a  Party  after the
                   date of this Agreement, by that Obligor on the day on  which
                   it becomes an Additional Obligor.

      (b)   The Repeating  Representations are deemed to be made by each Obligor
            to each Finance  Party by  reference to the facts and  circumstances
            then existing on each of the following days or dates:

             (i)   (other  than  in   respect  of  Utilisations  on  the  first
                   Utilisation Date) the  date of each Utilisation Request, the
                   first day of each Interest  Period  and on each Quarter Date
                   throughout the Term of the Letter of Credit; and

             (ii)  the day on which a company becomes or  it is proposed that a
                   company becomes an Additional Obligor.

21.   INFORMATION UNDERTAKINGS

      The undertakings in this Clause 21 remain in force from  the date of this
      Agreement  for  so  long  as any amount is outstanding under the  Finance
      Documents or any Commitment is in force.

21.1  FINANCIAL STATEMENTS

      The Company shall supply to  the  Facility Agent in sufficient copies for
      all the Lenders:

      (a)    as soon as the same become available,  but in any event within one
             hundred  and  twenty  (120) days after the  end  of  each  of  its
             financial years:

             (i)   its  audited  consolidated   and   unconsolidated  financial
                   statements for that financial year; and

             (ii)  at  the  request  of  the  Facility  Agent,   the  financial
                   statements of each Obligor (audited where audited  financial
                   statements are available) for that financial year;

            each  comprising of its respective  balance  sheet,  profit and loss
            account and cash flow statement; and

      (b)    as soon as the same  become  available,  but  in  any event within
             ninty (90) days after the end of each Financial Quarter in each of
             its   financial   years,   its  unaudited  consolidated  financial
             statements (in a form satisfactory to the Facility Agent) for that
             Financial Quarter comprising of its balance sheet, profit and loss
             account and cash flow statement,  together  with  a description of
             the business, market and financial developments of the Company and
             each Obligor.

21.2  COMPLIANCE CERTIFICATE

      (a)   The Company  shall  supply to the Facility  Agent,  with each set of
            financial  statements delivered pursuant to Clause 21.1(a)(i) or (b)
            (Financial  Statements),  a Compliance  Certificate  setting out (in
            reasonable  detail),  in each  case as at the  date to  which  those
            financial statements were drawn up:

            (i)   computations  as  to  compliance  with  Clause  22  (Financial
                  Covenants);

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            (ii)   (in  the  case  of  a   Compliance Certificate  accompanying
                   audited financial statements) computations:

                   (A)   establishing the amount  of  Excess Cash Flow (if any)
                         for the purpose of Clause 9.5  (Mandatory  Prepayments
                         from Excess Cash), together with a calculation  of how
                         that amount has been determined; and

                   (B)   establishing  calculations  with respect to any Margin
                         reductions  for  the purpose of  Clause  10.2  (Margin
                         Ratchets);

             (iii) in  the case of the annual  audited  consolidated  financial
                   statements  by  the  Company's auditors, a confirmation that
                   the Minimum Guarantor  Coverage  (as  defined in Clause 22.5
                   (Minimum  Guarantor  Coverage))  has been  met  as  per  the
                   relevant balance sheet date; and

             (iv)  (in  the  case  of  a  Compliance  Certificate  accompanying
                   unaudited quarterly financial statements)  computations with
                   respect to any margin reductions for the purpose  of  Clause
                   10.2   (Margin   Ratchets)   and  a  list  of  all  Material
                   Subsidiaries.

      (b)   The Company shall ensure that each Compliance  Certificate  shall be
            signed by two  directors  of the  Company  and,  if  required  to be
            delivered with the financial statements delivered pursuant to Clause
            21.1(a)(i), by the auditors that certified such statements.

21.3  REQUIREMENTS AS TO FINANCIAL STATEMENTS

      (a)   Each set of financial  statements  delivered by the Company pursuant
            to Clause  21.1(a) shall be audited and certified  without  material
            qualification by an  internationally  recognised firm of independent
            auditors approved by the Facility Agent.

      (b)   Each set of financial  statements  delivered by the Company pursuant
            to Clause 21.1  (Financial  Statements)  shall be  certified  by two
            directors  or, as the case may be,  two  members  of the  management
            board of the Company or relevant Obligor as fairly  representing its
            financial  condition  as at the  date as at  which  those  financial
            statements were drawn up.

      (c)   Each set of financial  statements  delivered by the Company pursuant
            to Clause  21.1(b)  shall be in such form as the Facility  Agent may
            reasonably   require  and  shall  include  a  comparison  of  actual
            performance  with the  performance  projected by the relevant Budget
            for the period to which those financial  statements  relate, as well
            as  a  comparison   with  the  preceding  year,  and  shall  provide
            management commentary explaining any differences in such performance
            and any material  developments  or proposals  affecting the Group or
            its business.

      (d)   The  Company  will  ensure  that  each set of  financial  statements
            delivered by it pursuant to Clause 21.1  (Financial  Statements)  is
            prepared  using  the  IAS and  accounting  practices  and  financial
            reference  periods  consistent with those applied in the preparation
            of the Base Financial  Statements  unless, in relation to any set of
            financial  statements,  it  notifies  the  Facility  Agent that such
            financial  statements  have been prepared on a different  basis as a
            result of a change in accounting

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            principles  and its auditors  (being an  internationally  recognised
            firm of independent auditors approved by the Facility Agent) deliver
            to the Facility Agent:

            (i)    a description of any change  necessary  for  those financial
                   statements  to  reflect  the  IAS, accounting practices  and
                   reference periods upon which the  Base  Financial Statements
                   were prepared; and

            (ii)   sufficient  information,  in form and substance  as  may  be
                   reasonably required by the  Facility  Agent,  to  enable the
                   Lenders to determine whether Clause 22 (Financial Covenants)
                   has  been  complied  with and to establish any of the  other
                   matters referred to in  Clause 21.2 (Compliance Certificate)
                   and  to make an accurate comparison  between  the  financial
                   position  indicated  in  those  financial statements and the
                   Base Financial Statements.

             Any  reference  in  this Agreement to those  financial  statements
             shall be construed as a reference to those financial statements as
             adjusted  to reflect the  basis  upon  which  the  Base  Financial
             Statements were prepared.

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

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

             (ii)  if  so,  any amendments  to  this  Agreement  which  may  be
                   necessary  to  ensure that the change does not result in any
                   material alteration in the commercial effect of those terms,
                   and if any amendments  are agreed they shall take effect and
                   be binding on each of the  Parties  in accordance with their
                   terms.

21.4  BUDGETS

      (a)   The Company shall, as soon as the same becomes  available and in any
            event no later than three (3) Months  after to the  commencement  of
            each financial  year of the Group,  deliver to the Facility Agent in
            sufficient  copies for the Lenders a budget for that  financial year
            and  the  following  three  (3)  financial  years   (together,   the
            "FINANCIAL YEARS UNDER REVIEW") (in a form and showing such detailed
            information as the Facility Agent may reasonably  require)  prepared
            by reference to each Financial Quarter and including:

             (i)   forecasts of any projected disposals  (including  timing and
                   amount  of any projected disposals) on a consolidated  basis
                   of the Group for each Financial Year under Review;

             (ii)  projected  profit  and  loss  accounts  (including projected
                   turnover  and operating costs), broken down  in  respect  of
                   operating profit  before  depreciation  and  amortisation in
                   different  business  units/divisions, and projected  balance
                   sheets  and cash flow statements,  together  with  the  main
                   operating  assumptions  relating to such projected financial
                   statements, on a quarterly  basis,  for  each Financial Year
                   under Review on a consolidated basis for the Group;

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<PAGE>

             (iii) revisions  to  the  projections  set out in the  Budget  and
                   actuals  of  the  preceding  year, together  with  the  main
                   operating assumptions relating  thereto,  for each Financial
                   Year  under  Review,  based  on the financial condition  and
                   performance and prospects of the Group at such time;

             (iv)  projected Capital Expenditure  as  defined  in  Clause  22.1
                   (Financial  Definitions)  to  be  incurred  on  a  Financial
                   Quarter  basis  for  the  Financial Years under Review on  a
                   consolidated basis for the Group; and

             (v)   projected  Consolidated  EBITDA   as  at  the  end  of  each
                   Financial Quarter.

      (b)   The Company  shall  provide the  Facility  Agent with details of any
            material changes in the projections delivered under this Clause 21.4
            as soon as reasonably practicable after it becomes aware of any such
            change.

21.5  INFORMATION: MISCELLANEOUS

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

            (i)    all material documents dispatched by any member of the Group
                   to its shareholders (or any class of them) or by the Company
                   and its Material Subsidiaries to its creditors  generally at
                   the same time as they are dispatched;

            (ii)   promptly  upon  becoming aware of them, the details  of  any
                   litigation, arbitration  or administrative proceedings which
                   are current, threatened or pending against any member of the
                   Group  and  which might, if  adversely  determined,  have  a
                   Material Adverse Effect and any details of any litigation or
                   administrative   proceedings   regarding   competition   law
                   proceedings  and  related civil lawsuits, including, for the
                   avoidance of doubt,  any  fines  which have been assessed by
                   way  of  any  administrative  proceedings  by  the  relevant
                   authorities,  including  details   regarding   the  Existing
                   Competition  Law  Proceedings  and  Anti-Trust  Lawsuits  as
                   identified in Schedule 15;

            (iii)  in  relation  to  each  Financial  Quarter,  a status report
                   relating to the Existing Competition Law Proceedings  signed
                   by the Company's in-house legal counsel;

             (iv)  promptly  upon  becoming  aware  of them, the details of any
                   labour  dispute  which  is  current, threatened  or  pending
                   against  any  member  of  the  Group  and  which  might,  if
                   adversely determined, have a Material Adverse Effect;

             (v)   promptly upon becoming aware of  them,  the  details  of any
                   rating  or,  following  the issuance of any such rating, any
                   change in an Obligor's credit  rating  by  Moody's  Investor
                   Services, Inc. or by Standard and Poor's Corporation;

             (vi)  promptly  upon  becoming  aware of them, the details of  any
                   proposed acquisition(s) in excess of e 10,000,000 per annum,
                   including, but not limited to:

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                   (A)   the provision of the  target  company's audited annual
                         financial statements;

                   (B)   due diligence reports prepared in connection with such
                         acquisition(s); and

                   (C)   pro  forma  projections  for  the  Group   after   the
                         acquisition of the target company;

             (vii) promptly  upon  becoming  aware  of them, the details on any
                   material change with regard to lines  of credit exceeding in
                   each  case  e  1,000,000 granted by banks  and/or  financial
                   institutions other  than  the  Lenders  in  relation  to the
                   Facilities;

             (viii)details  of  any change in the corporate ownership structure
                   of the Group from that set out in the Group Structure Chart;
                   and

             (ix)  promptly, such  further  information regarding the financial
                   condition, business and operations  of  any  member  of  the
                   Group  as any Finance Party (through the Facility Agent) may
                   reasonably request.

      (b)   The Company shall ensure that,  upon receipt of  reasonable  notice,
            senior  management  is  available  once a year for the  purpose of a
            meeting with the Lenders,  the Facility Agent and the  Documentation
            Agent in relation thereto.

21.6  NOTIFICATION OF DEFAULT

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

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

21.7  ERISA REPORTING REQUIREMENTS

      (a)   The Company  shall  procure that each US Group Member and each ERISA
            Affiliate (each a "RELEVANT COMPANY") shall:

             (i)   promptly  and  in  any event within thirty  days  after  any
                   Relevant Company knows  or has reason to know that any ERISA
                   Event which would reasonably  be expected to have a Material
                   Adverse Effect has occurred; and

             (ii)  promptly and in any event within ten days after any Relevant
                   Company knows or has reason to  know  that  a  request for a
                   minimum  funding  waiver under section 412 of the  Code  has
                   been  filed  with  respect   to   any   Title   IV  Plan  or
                   Multiemployer Plan,

            deliver  to  the  Facility  Agent a written statement of the  Chief
            Financial Officer of the Company  describing  such  ERISA  Event or
            waiver request and the action, if any,


                                       81

<PAGE>




            that  it  proposes  to take with respect thereto and a copy of  any
            notice filed with the PBGC or the IRS pertaining thereto.

      (b)   The Company  shall  procure that each US Group Member and each ERISA
            Affiliate (each a "RELEVANT COMPANY") shall, simultaneously with the
            date that any Relevant Company files a notice of intent to terminate
            any  Title IV Plan  (if  such  termination  would  require  material
            additional  contributions  in  order  to be  considered  a  standard
            termination within the meaning of section 4041(b) of ERISA), deliver
            to the Facility Agent a copy of such notice.

22.   FINANCIAL COVENANTS

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

22.1  FINANCIAL DEFINITIONS

      (a)   In this Clause 22:

            "APPROVED BANK" means any  bank  which  is  an  authorised  banking
            institution  under applicable legislation and whose debt securities
            are rated at least  A1  by Moody's Investor Services, Inc. or A+ by
            Standard  and Poor's Corporation  or  as  the  Facility  Agent  may
            approve.

            "CAPITAL EXPENDITURE"  means  any  capital  expenditure,  including
            expenditure  for  the  acquisition  of  equipment,  tangible  fixed
            assets,  real  property,  intangible  assets  and other assets of a
            capital nature or for the replacement or substitution  therefor  or
            additions or improvements thereto.

            "CASH" means:

             (i)   cash in hand;

             (ii)  any  credit  balance  in  Euro  or any other currency on any
                   current, savings or deposit account  with  any Approved Bank
                   that  is  repayable on demand or upon not more  than  ninety
                   (90) days' notice; and

             (iii) in relation  to Term Facility B, any credit balance relating
                   to cash deposits  made in relation to cancellations, but not
                   in relation to any capitalised interest accrued.

             "CASH EQUIVALENTS" means:

             (i)   debt securities denominated  in  Euro  or any other currency
                   which are not convertible into any other  form  of security,
                   rated or issued by any person rated A1 or better  by Moody's
                   Investor Services, Inc. or A+ or better by Standard & Poor's
                   Corporation  and  not issued or guaranteed by any member  of
                   the Group;

             (ii)  certificates of deposit  denominated  in  Euro  or any other
                   currency  issued  by,  and  acceptances  so denominated  by,
                   banking institutions authorised under applicable legislation
                   which at the time of making such issue or  acceptances, have
                   outstanding debt securities rated as provided  in  paragraph
                   (ii) above;

                                       82

<PAGE>


             (iii) such  other  securities (if any) as are approved as such  in
                   writing by the Facility Agent (acting on the instructions of
                   the Majority Lenders); and

             (iv)  which, in each case, have no more than twelve (12) months to
                   final maturity.

             "CONSOLIDATED EBITDA"  means,  in  respect of any Relevant Period,
             consolidated  net  pre-taxation profits  of  the  Group  for  such
             Relevant Period adjusted by:

             (i)   adding back Net Interest Costs;

             (ii)  adding back any  amount  attributable to the depreciation of
                   tangible assets or impairment of shareholdings;

             (iii) adding back any amount attributable  to  the amortisation of
                   goodwill, intellectual property and other intangible assets;

             (iv)  adding  back  any amount attributable to net  write-offs  of
                   tangible  fixed   assets,   including  but  not  limited  to
                   impairment tests or restructuring measures; and

             (v)   adding back any amount attributable  to  the  provisions for
                   the  Competition  Law  Liabilities and for any other  future
                   competition law related fines.

             "EXCESS CASH FLOW" means, in respect  of any financial year of the
             Group, consolidated cash flow from operating  activities according
             to IAS less:

            (i)   acquisitions and Capital Expenditure for that financial year;

            (ii)  the  payment  of any  fines in  relation  to  Competition  Law
                  Liabilities  and any other  potential  future  competition law
                  related fines;

            (iii) Total Debt Service for that financial year; and

            (iv)  the aggregate  value of  prepayments  of Term Facility A Loans
                  made pursuant to Clause 9.8 (Voluntary Prepayment) during that
                  financial year.

             "INTEREST  COVER"  means  the  ratio of Consolidated EBITDA to Net
             Interest Expense.

             "INTEREST PAYABLE" means, in respect  of  any Relevant Period, the
             aggregate amount of interest (including the  interest  element  of
             leasing  and hire purchase payments), expenses (cash or non-cash),
             commission,   fees,   discounts   and  other  finance  charges  of
             whatsoever nature payable by any member  of  the  Group (including
             any commission, fees, discounts and other finance charges  payable
             by  any  member  of  the  Group  under  any  interest rate hedging
             arrangement) but after deducting any commission,  fees,  discounts
             and  other  finance charges receivable by any member of the  Group
             under any interest rate hedging arrangement.

             "LEVERAGE RATIO" means the ratio of Total Net Debt to Consolidated
             EBITDA.

             "NET INTEREST  COSTS"  means Interest Payable, but after deducting
             any  non-cash interest, interest  receivable  or  accrued  by  any
             member  of the Group on any cash deposit or bank account or on any
             Cash Equivalents.

                                       83
<PAGE>


             "NET INTEREST  EXPENSE"  means  Net  Interest  Costs  less imputed
             interest   on  antitrust  liabilities  less  interest  on  pension
             provisions.

             "NET WORTH"  means  the  shareholders'  equity,  including capital
             stock, additional paid-in capital, revenue reserves  and  minority
             interest  as  reflected  in  the quarterly and annual consolidated
             balance sheet of the Group.

             "RELEVANT PERIOD" means each period  of  twelve (12) months ending
             on  the last day of each of the Company's financial  years  and/or
             each  period  of  twelve  (12)  months  that corresponds with four
             consecutive Financial Quarters ending on the Quarter Date on which
             the relevant calculation falls to be made.

             "TOTAL DEBT SERVICE" means, in respect of any Relevant Period, the
             aggregate of:

             (i)   Net Interest Costs;

             (ii)  all scheduled repayments and mandatory  prepayments  paid or
                   falling  due in respect of the Facilities but excluding  any
                   amounts paid  or  falling  due  under  the  Revolving Credit
                   Facility and capable of being simultaneously  re-drawn under
                   the terms of this Agreement); and

             (iii) all repayments, prepayments and other payments  of principal
                   paid  or  falling  due  in  respect  of  any other Financial
                   Indebtedness  of any member of the Group but  excluding  any
                   amounts paid or falling due under any overdraft or revolving
                   credit facility and capable of being simultaneously re-drawn
                   under the terms of the relevant facility).

             "TOTAL NET DEBT" means,  at  any time (but so that no amount shall
             be   included  or  excluded  more  than   once),   the   aggregate
             indebtedness  of  the  members of the Group constituting Financial
             Indebtedness (but excluding  indebtedness  of  any Group member to
             another Group member) less Cash and Cash Equivalents plus:

             (i)   the amount of receivables sold or securitised; and

             (ii)  liabilities  in  relation  to,  and  provisions   for,   the
                   Competition  Law  Liabilities  as  stated  in  the Company's
                   quarterly or annual balance sheet, any other competition law
                   related  fines, related civil proceedings and costs  related
                   to either  of them, or, if greater, the amount of the Letter
                   of Credit.

      (b)   All accounting  expressions  which are not otherwise defined in this
            Agreement shall be construed in accordance with IAS.

22.2  NET WORTH

      Net Worth shall at all times throughout the term of the Facilities exceed
      e 175,000,000.

22.3  INTEREST COVER

      The  Company  must ensure that the ratio of Consolidated  EBITDA  to  Net
      Interest Expense  for  each  Relevant  Period  ending  on  a Quarter Date
      specified  in  Column  A  below shall equal or exceed the ratio  set  out
      opposite such Quarter Date in Column B below:

                                       85

<PAGE>


<TABLE>
<CAPTION>
    COLUMN A                                  COLUMN B
 (QUARTER DATE)                                (RATIO)
<S>                                              <C>
--------------------------------------------------------
     31 March 2003                             3.00:1
--------------------------------------------------------
     30 June 2003                              3.00:1
--------------------------------------------------------
   30 September 2003                           3.00:1
--------------------------------------------------------
   31 December 2003                            3.00:1
--------------------------------------------------------
     31 March 2004                             3.25:1
--------------------------------------------------------
     30 June 2004                              3.50:1
--------------------------------------------------------
   30 September 2004                           3.75:1
--------------------------------------------------------
   31 December 2004                            4.25:1
--------------------------------------------------------
     31 March 2005                             4.50:1
--------------------------------------------------------
</TABLE>


22.4  TOTAL NET DEBT TO CONSOLIDATED EBITDA

      The Company must ensure that  the  ratio  of  Total  Net  Debt as at each
      Quarter Date specified in Column A below to Consolidated EBITDA  for  the
      Relevant Period ending on such Quarter Date shall not be greater than the
      ratio set out opposite such Quarter Date in  Column B below:

<TABLE>
<CAPTION>
    COLUMN A                                  COLUMN B
 (QUARTER DATE)                                (RATIO)
<S>                                              <C>
--------------------------------------------------------
     31 March 2003                             5.75:1
--------------------------------------------------------
     30 June 2003                              5.25:1
--------------------------------------------------------
   30 September 2003                           5.00:1
--------------------------------------------------------
   31 December 2003                            4.75:1
--------------------------------------------------------
     31 March 2004                             4.50:1
--------------------------------------------------------
     30 June 2004                              4.25:1
--------------------------------------------------------
   30 September 2004                           4.00:1
--------------------------------------------------------
   31 December 2004                            3.50:1
--------------------------------------------------------
     31 March 2005                             3.25:1
--------------------------------------------------------
</TABLE>


                                       85
<PAGE>



22.5  MINIMUM GUARANTOR COVERAGE

      The  Company must ensure that by reference to the annual audited accounts
      of the  Group, the Consolidated EBITDA and/or turnover of the Guarantors,
      in each case  represents  at  least  eighty-five  (85)  per  cent. of the
      Consolidated  EBITDA  and/or  turnover  of  the  Group at all times  (the
      "MINIMUM GUARANTOR COVERAGE").

22.6  CALCULATIONS

      All  calculations  made  for  the purposes of the covenants  set  out  in
      Clause 22.3 (Interest Cover) to  Clause 22.5 (Minimum Guarantor Coverage)
      (inclusive) shall be made by reference  to,  where the Relevant Period to
      which such covenant relates ends on, or the Quarter  Date  to  which such
      covenant relates falls on:

      (a)    any  day  other  than  the  last day of any financial year of  the
             Company, the unaudited consolidated  financial  statements  of the
             Company for each of the four consecutive Financial Quarters within
             that  Relevant  Period  or,  as  the  case  may  be, the unaudited
             consolidated financial statements of the Company for the Financial
             Quarter  ending  on that Quarter Date, in each case  as  delivered
             pursuant to Clause 21 (Information Undertakings); and

      (b)    the last day of any financial year of the Company, as in paragraph
             (a)  above  or,  when   so  delivered,  the  audited  consolidated
             financial statements of the Company for that financial year.

22.7  FINANCIAL TESTING

      (a)   Thefinancial  covenants set out in this Clause 22 shall be tested by
            reference to each of the financial  statements  and each  Compliance
            Certificate delivered pursuant to Clause 21.1 (Financial Statements)
            and Clause 21.2 (Compliance Certificate).

      (b)   All financial  covenants set out in Clause 22.3 (Interest Cover) and
            Clause 22.5 (Minimum Guarantor Coverage) shall be tested against the
            Company's  latest  consolidated   financial  statements  on  a  four
            Financial Quarter rolling basis and adjusted pro forma for Permitted
            Acquisitions and Permitted Disposals.

23.   GENERAL UNDERTAKINGS

      The undertakings in this Clause 23 remain in force  from the date of this
      Agreement  for  so  long as any amount is outstanding under  the  Finance
      Documents or any Commitment is in force.

23.1  AUTHORISATIONS

      (a)   Each  Obligor  shall (and the Company  shall  ensure that each other
            member of the Group will) promptly:

             (i)   obtain, comply with and do all that is necessary to maintain
                   in full force and effect; and

             (ii)  supply certified copies to the Facility Agent of,

      any   Authorisation   required   under  any  law  or  regulation  of  its
      jurisdiction of incorporation to enable  it  to  perform  its obligations
      under the Finance Documents and to ensure the legality,

                                       86
<PAGE>




      validity, enforceability or admissibility in evidence in its jurisdiction
      of incorporation of any Finance Document.

      (b)   Each  Obligor  shall (and the Company  shall  ensure that each other
            member of the Group will):

             (i)   ensure  that  it has the right  and  is  duly  qualified  to
                   conduct its business as it is conducted from time to time in
                   all applicable jurisdictions;

             (ii)  obtain, comply with and do all that is necessary to maintain
                   in  full  force  and   effect  any  Authorisation  which  is
                   necessary for the conduct of its business or the business of
                   the Group as a whole; and

             (iii) upon  the  Facility  Agent's   written  request  supply  the
                   Facility Agent with copies of any such Authorisations.

23.2  COMPLIANCE WITH LAWS

      Each Obligor shall (and the Company shall ensure  that  each other member
      of the Group will) comply in all respects with all laws to  which  it may
      be  subject,  if failure so to comply would materially impair its ability
      to perform its  obligations  under the Finance Documents to which it is a
      party.

23.3  NEGATIVE PLEDGE

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

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

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

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

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

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

             in circumstances where  the  arrangement or transaction is entered
             into primarily as a method of raising Financial Indebtedness or of
             financing the acquisition of an asset.

      (c)   Paragraphs (a) and (b) above do not apply to Permitted Security.

23.4  DISPOSALS

      (a)   Other than pursuant to the  Management  and Employee  Benefit Plans,
            the Hitco Options and the  conversion  rights under the  convertible
            bonds issued by the Company in September 2000, no Obligor shall (and
            the Company  shall  ensure  that no other  member of the Group will)
            enter into a single transaction or a series of

                                       87
<PAGE>




            transactions  (whether  related  or not) and  whether  voluntary  or
            involuntary  to sell,  lease,  transfer or otherwise  dispose of any
            shares in any member of the Group.

      (b)   No Obligor  shall (and the Company shall ensure that no other member
            of the Group  will) enter into a single  transaction  or a series of
            transactions  (whether  related  or not) and  whether  voluntary  or
            involuntary to sell, lease,  transfer or otherwise dispose of all or
            any part of its respective  assets (other than shares referred to in
            paragraph (a) above).

      (c)   Paragraph (b) above does not apply to any Permitted Disposal.

23.5  OPTIONS

      Other than pursuant  to  the  Management  and Employee Benefit Plans, the
      Hitco  Options  and  the conversion rights under  the  convertible  bonds
      issued by the Company  in  September  2000,  no  Obligor  shall  (and the
      Company  shall ensure that no other member of the Group will) enter  into
      or permit  to  subsist any option or other arrangement whereby any person
      has the right (whether  or  not  exercisable  only  on  a contingency) to
      require any member of the Group to purchase or otherwise  acquire or sell
      or  otherwise  dispose  of any material property or any interest  in  any
      material property otherwise  than where any such arrangement is permitted
      by Clause 23.27 (Treasury Transactions).

23.6  CHANGE OF BUSINESS

      No Obligor shall (and the Company  shall  ensure  that no other member of
      the Group will) make, or take any steps to make, any  substantial  change
      to the general nature of its business from that carried on at the date of
      this  Agreement  or  carry  on  any  other  business which results in any
      substantial change to the general nature of the  business of the Group as
      a whole from that carried on at the date of this Agreement.

23.7  YEAR END

      Commencing  1  January 2003, each Obligor shall (and  the  Company  shall
      ensure that each  other member of the Group will) ensure that each of its
      financial years and each Financial Quarter in each of its financial years
      shall end on a Quarter  Date  and  the  Company  shall  ensure  that each
      financial year, and each Financial Quarter of each financial year, of the
      Group shall end on a Quarter Date.

23.8  RECORD KEEPING

      Upon  reasonable notice being given by the Facility Agent to the relevant
      Obligor, that Obligor shall (and the Company shall ensure that each other
      member   of  the  Group  will)  permit  the  Facility  Agent  and/or  any
      professional  advisers  appointed by the Facility Agent to examine during
      normal business hours the records and books of account of such Obligor or
      other member of the Group for the purpose of ascertaining compliance with
      the Finance Documents.

23.9  CONSTITUTIONAL DOCUMENTS

      No Obligor shall (and the  Company  shall  ensure that no other member of
      the Group will) request, permit or make any  change to its constitutional
      documents without prior written notification to  the Facility Agent where
      such  change  relates  to  the  shareholders,  the  share   capital,  the
      management, the registered office or the legal form of such Obligor.

                                       88

<PAGE>



23.10 PRESERVATION OF ASSETS

      Each  Obligor shall (and the Company shall ensure that each other  member
      of the  Group  will)  maintain  and  preserve  all of its assets that are
      necessary  in  the  conduct  of its business in good  working  order  and
      condition, ordinary wear and tear excepted.

23.11 INSURANCE

      (a)   Each  Obligor  shall (and the Company  shall  ensure that each other
            member of the Group will)  maintain  insurance on and in relation to
            its business  and assets with  reputable  underwriters  or insurance
            companies  against  such  risks  and to such  extent as is usual for
            prudent companies  carrying on a business such as that carried on by
            such  Obligor or Group  member in the country or  countries in which
            such  Obligor or Group  member owns or leases  property or otherwise
            conducts its business.

      (b)   Without  limiting  paragraph (a) above,  each Obligor shall (and the
            Company  shall  ensure  that each  other  member of the Group  will)
            maintain  insurance  against  business  interruption,   professional
            indemnity  (i.e.  directors'  and  officers'  liability  insurance),
            pollution and public  liability in each case at levels no lower than
            those in place prior to Closing.

      (c)   Each  Obligor  shall (and the Company  shall  ensure that each other
            member of the Group will) pay all  premiums  and do all other things
            necessary to keep on foot the insurances required to be effected and
            maintained by it pursuant to  paragraphs  (a) and (b) above and will
            procure that all  insurance  policies or  certificates  of insurance
            evidencing  compliance  with paragraphs (a) and (b) above or (in the
            absence of the same) such other  evidence  of the  existence  of any
            insurance  referred  to in  paragraph  (a) and (b)  above  as may be
            reasonably acceptable to the Facility Agent shall contain loss payee
            provisions  acceptable to the Facility  Agent and the Security Agent
            noting the Security Agent's interest thereon and naming the Security
            Agent as loss payee.

      (d)   The Company shall supply the Facility  Agent on  reasonable  request
            with  copies of each  receipt  for all  premiums  and other  amounts
            payable  by any  Obligor  or other  member  of the  Group  under the
            insurances  effected  and  maintained  by any of  them  pursuant  to
            paragraphs  (a) and (b)  above  and  shall,  in any  event,  use all
            reasonable endeavours to procure that the insurer in respect of such
            insurances  undertakes to the Facility Agent to notify it should any
            renewal  fee or other sum  payable  by any  Obligor  or other  Group
            member not be paid when due.

      (e)   Upon reasonable request, the Company shall supply the Facility Agent
            with a copy of all insurance  policies or  certificates of insurance
            evidencing  compliance  with paragraphs (a) and (b) above or (in the
            absence of the same) such other  evidence  of the  existence  of any
            insurance  referred  to in  paragraphs  (a) and (b)  above as may be
            reasonably acceptable to the Facility Agent and shall, in any event,
            notify  the  Facility  Agent  of any  material  changes  to any such
            insurance made from time to time.

23.12 INTELLECTUAL PROPERTY

      Each  Obligor  shall (and the Company shall ensure that each other member
      of the Group will):

      (a)    make such registrations and pay such fees and other amounts as are
             necessary  to  keep  those registered Intellectual Property Rights
             which are necessary for the

                                       89


<PAGE>




             carrying  out of the  business of the Group as a whole in force and
             to record its interest in those Intellectual Property Rights;

      (b)    observe and comply with all material obligations and laws to which
             it  in  its capacity as registered proprietor,  beneficial  owner,
             user, licensor or licensee of the Intellectual Property Rights (or
             any part  thereof)  is  subject  where  failure  to  do  so  might
             reasonably be expected to have a Material Adverse Effect;

      (c)    do  all  acts  as  are  reasonably practicable (including, without
             limitation, the institution  of  legal  proceedings)  to maintain,
             protect  and  safeguard  the  Intellectual Property necessary  for
             carrying out of the business of the Group as a whole; and

      (d)    not terminate or discontinue the  use of any Intellectual Property
             necessary for carrying out of the business of the Group, save that
             licensing arrangements in relation  to  such Intellectual Property
             may  be entered into between members of the  Group  PROVIDED  THAT
             such licensing arrangements:

             (i)   do not allow any further sub-licensing by the licensee; and

             (ii)  do not have a material adverse effect on the value of any of
                   the Intellectual Property licensed under such.

23.13 ENVIRONMENTAL COMPLIANCE

      Each Obligor  shall  (and the Company shall ensure that each other member
      of  the  Group will) obtain  and  maintain  all  requisite  Environmental
      Licences and comply with:

      (a)    all applicable Environmental Laws; and

      (b)    the terms and conditions of all Environmental  Licences  applicable
             to it,

      and take all reasonable steps in anticipation of known or expected future
      changes to or  obligations  under the same, in each case where failure to
      do so would or might reasonably  be  expected  to have a Material Adverse
      Effect.

23.14 ENVIRONMENTAL CLAIMS

      The  Company  shall  inform  the  Facility Agent in writing  as  soon  as
      reasonably practicable upon its becoming aware of:

      (a)    any Environmental Claim which  has  been  commenced  or threatened
             against any member of the Group, or

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

      where the claim might, if  determined  against  that member of the Group,
      reasonably be expected to have a Material Adverse Effect.

23.15 PENSION SCHEMES

      (a)    The Company will, if  reasonably  requested by the Facility  Agent,
             deliver to the Facility Agent:

                                       90

<PAGE>

             (i)   at such time as  those  reports  are  prepared  in  order to
                   comply  with then current statutory or auditing requirements
                   (if any); and

             (ii)  if the Facility  Agent reasonably believes that any relevant
                   statutory or auditing  requirements  are  not being complied
                   with,

            actuarial reports in relation to the pension schemes  for  the time
            being operated by members of the Group.

      (b)    Each Obligor  shall (and the Company  shall procure that each other
             member  of  the  Group  will)  ensure  that  all  pension   schemes
             applicable  to it are fully  provided  for  (either by way of being
             funded  or by way of  provision  in its  balance  sheet)  based  on
             reasonable   actuarial   assumptions  to  the  extent  required  by
             applicable law and are  administered  and funded in accordance with
             applicable law.

23.16 TAXATION

      (a)    Each  Obligor  shall (and the Company  shall ensure that each other
             member of the Group will) pay and  discharge all Taxes imposed upon
             it or its assets within the time period allowed  without  incurring
             penalties, save to the extent that:

            (i)    payment is being contested in good faith;

            (ii)   adequate reserves are being maintained for those Taxes; and

            (iii)  payment can be lawfully withheld.

      (b)    No Obligor shall (and the Company shall ensure that no other member
             of the Group will) be  materially  overdue in the filing of any Tax
             returns.

      (c)    Each  Obligor  shall (and the Company  shall ensure that each other
             member of the Group  will) do all such things as are  necessary  to
             ensure that no claims are or are  reasonably  likely to be asserted
             against  any member of the Group with  respect to Taxes which might
             reasonably be expected to have a Material Adverse Effect.

23.17 SECURITY

      (a)    Each Obligor shall ensure that any Security expressed to be created
             by it by or pursuant to, or, as the case may be,  expressed to have
             been  created by it and to be evidenced  in, any Security  Document
             remains in full force and effect with the  ranking and  priority it
             is expressed to have.

      (b)    No Obligor shall (and the Company shall ensure that no other member
             of the Group will) do or omit to do anything or knowingly permit or
             cause  anything  to be done or omitted  to be done  which  would or
             could adversely affect any Security  expressed to be created by any
             Obligor by or pursuant to, or any  Security  expressed to have been
             created  by  any  Obligor  and to be  evidenced  in,  any  Security
             Document.

      (c)    Each Obligor  shall take all such action as the  Facility  Agent or
             the  Security  Agent may  reasonably  request  for the  purpose  of
             perfecting  any Security  granted or to be granted  pursuant to the
             Finance Documents.

                                       91

<PAGE>


      (d)    Each Obligor shall,  if the Security  Agent lawfully  exercises any
             power  (whether of sale or other  disposal or  otherwise)  or right
             with  respect to the  Charged  Assets,  do all  reasonable  acts to
             permit the exercise of such power or right.

      (e)    Each Obligor shall  satisfy the  conditions  subsequent  set out in
             Part  II  of  Schedule  2   (Conditions   Precedent   andConditions
             Subsequent) as soon as possible after the Closing Date.

23.18 PARI PASSU RANKING

      Without limiting Clause 23.17(a), each Obligor  shall  (and  shall  cause
      each  other  member  of the Group to) ensure that its payment obligations
      under the Finance Documents will rank at least pari passu with the claims
      of all its unsecured and  unsubordinated creditors except for obligations
      mandatorily preferred by law applying to companies generally.

23.19 SHARE CAPITAL

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

      (a)    redeem, purchase, return or make any repayment  in  respect of any
             of  its  share capital or make any capital distribution  or  enter
             into any agreement to do so; or.

      (b)    allot or issue  any  shares  or  grant  to  any  person  the right
             (whether  conditional  or  otherwise)  to  call  for  the issue or
             allotment  of any share, partnership interest, loan note  or  loan
             capital of such  Obligor or other member (including an option or a
             right of pre-emption or conversion) or enter into any agreement or
             pass any corporate  resolution  to  do  any of the foregoing other
             than:

            (i)    for the purposes of an issue of shares  by  one wholly-owned
                   Subsidiary of the Company to another wholly-owned Subsidiary
                   of the Company; or

            (ii)   for the purposes of an issue of shares by any  member of the
                   Group  to  a person who acts or is to act as the trustee  of
                   any Group pension scheme or employee or management incentive
                   scheme PROVIDED  THAT  such  scheme  has  been  approved  in
                   writing  by  the  Facility  Agent   such  approval not to be
                   unreasonably withheld.

23.20 DIVIDENDS AND OTHER DISTRIBUTIONS

      As long as the Leverage Ratio is greater than 2.0:1:

      (a)    the Company shall use its reasonable endeavours to ensure that the
             members  of  its  boards  will  not propose to make any  dividend,
             return  on capital, repayment of capital  contributions  or  other
             distribution (whether in cash or kind) or make any distribution of
             assets or  other  payment  whatsoever  in respect of share capital
             whether directly or indirectly; and

      (b)    the  Company will refrain from making any  share  buy-backs  other
             than as provided for in the Management and Employee Benefit Plans.

23.21 SUBORDINATED DEBT

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

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      (i)   pay, repay, prepay, redeem,  purchase,  return  or otherwise retire
            the principal amount of any indebtedness; or

      (ii)  pay any interest or return on principal or repayment  of  principal
            or  other  distribution  (whether  in  cash  or  kind)  or make any
            distribution  of assets or other payments whatsoever in respect  of
            any indebtedness,

      in each case under any  Intra  Group  Loan  Document with a member of the
      Group which is not an Obligor.

23.22 CASH FLOW RESTRICTIONS

      The Company shall ensure that, save for the Finance  Documents, no member
      of  the  Group will be a party to any contractual or similar  arrangement
      pursuant to  which  any member of the Group is prohibited from making any
      payments of dividends  or other distributions, or from lending monies, to
      another member of the Group.

23.23 MERGER

      With the exception of the  proposed merger of SGL CARBON S.A., Nowy Sacz,
      Poland and ZEW S.A., Raciborz,  Poland  (PROVIDED  THAT the shares in the
      merged entity are pledged, charged or assigned in favour  of the Security
      Agent  and/or  the  Secured  Parties), no Obligor shall (and the  Company
      shall ensure that no other member  of  the  Group  will)  enter  into any
      amalgamation,  demerger, merger or corporate reconstruction which results
      in assets being  transferred  from it to an entity that is not an Obligor
      unless the Facility Agent (acting  on  the  instructions  of the Majority
      Lenders) shall have given its prior written consent thereto, such consent
      not to be unreasonably withheld.

23.24 INDEBTEDNESS

      No  Obligor shall (and the Company shall ensure that no other  member  of
      the Group will) incur, create or permit to subsist or have outstanding:

      (a)    any   Financial  Indebtedness  or  enter  into  any  agreement  or
             arrangement  whereby  it is entitled to incur, create or permit to
             subsist any Financial Indebtedness,  other  than,  in either case,
             Permitted Indebtedness; or

      (b)    any other indebtedness or enter into any agreement or  arrangement
             whereby  it is entitled to incur, create or permit to subsist  any
             other indebtedness, except, in either case, in the ordinary course
             of its business.

23.25 LOANS OUT

      (a)    No Obligor shall (and the Company shall ensure that no other member
             of the Group will) make any loans,  grant any credit or provide any
             other financial  accommodation to or for the benefit of any person,
             including any of its shareholders.

      (b)    Paragraph (a) shall not apply to Permitted Loans.

23.26 GUARANTEES OR CONTINGENT LIABILITIES

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

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            (i)    give any guarantee or indemnity to or for the benefit of any
                   person  or   otherwise  voluntarily  assume  any  liability,
                   whether actual  or  contingent, in respect of any obligation
                   of any person; or

            (ii)   be  or  become  directly   or   indirectly  or  actually  or
                   contingently  liable  for  any  loss,   damage   or  expense
                   resulting  from  the non-payment or breach of any obligation
                   of any other person.

      (b)    Paragraph  (a)  shall  not  apply to any  Permitted  Guarantees  or
             Contingent Liabilities.

23.27 TREASURY TRANSACTIONS

      No Obligor shall (and the Company shall  ensure  that  no other member of
      the Group will) enter into any Treasury Transaction except for:

      (a)    Treasury  Transactions entered into in accordance with Clause 23.28
             (Hedging); and

      (b)    any  other  foreign  exchange  transactions  for spot  or  forward
             delivery entered into in the ordinary course of  business (and not
             for  investment  or  speculative  purposes)  to  hedge  actual  or
             projected   exposures  (including,  without  limitation,  currency
             exposure relating to Loans made in Dollars) incurred by any member
             of the Group.

23.28 HEDGING

      Each Borrower shall  (and the Company shall ensure that each other member
      of the Group will) enter into and/or maintain Hedging Agreements:

      (a)    so as to ensure that for a period of thirty (30) Months commencing
             on the date of  this  Agreement  the Group has hedging of interest
             rate exposure in respect of not less  than fifty (50) per cent. of
             the aggregate Commitments in respect of  the Outstandings relating
             to the Term Facilities from time to time; and

      (b)    which rank pari passu with the claims of the Finance Parties under
             the Finance Documents.

23.29 ACQUISITIONS

      No Obligor shall (and the Company shall ensure that  no  other  member of
      the   Group  will)  engage  in  any  Acquisitions  other  than  Permitted
      Acquisitions or as otherwise permitted by Clause 23.30 (Joint Ventures).

23.30 JOINT VENTURES

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

             (i)   form, or enter into, or permit to subsist;

             (ii)  purchase, subscribe for or otherwise  acquire any shares (or
                   other securities or any interest therein) in; or

             (iii) transfer  any assets to, or lend to, or  guarantee  or  give
                   security for the obligations of,

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             any  partnership,   consortium,   Joint   Venture  or  other  like
             arrangement or agree to do any of the foregoing.

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

             (i)   any  partnership, consortium, Joint Venture  or  other  like
                   arrangement existing at the date of this Agreement;

                         (ii)   any Permitted Loans; and

             (iii) any Permitted Guarantees and Contingent Liabilities.

23.31 MANDATORY CASH COLLATERAL

      Until  the  Expiry  Date,   the  Company  shall  provide  Mandatory  Cash
      Collateral on each anniversary of 24 October 2002.

23.32 AMENDMENTS TO FINANCE AND OTHER DOCUMENTS

      Neither the Company nor any Obligor shall amend, vary, novate, supplement
      or terminate any document delivered  to  the  Facility  Agent pursuant to
      Clause  4  (Conditions  of  Utilisation)  or  Clause 26 (Changes  to  the
      Obligors), or waive any right thereunder, except for:

      (a)    any of the foregoing which is expressly consented to in writing by
             the  Facility Agent (acting on the instructions  of  the  Majority
             Lenders); or

      (b)    any amendment, variation or waiver which is of a minor or technical
             nature.

23.33 COMPLIANCE WITH ERISA

      The  Company  shall  procure  that  each  US  Group Member and each ERISA
      Affiliate shall not cause or permit to occur either  an event which would
      result in the imposition of Security under section 412  of  the  Code  or
      section  302  or  section  4068  of  ERISA  or  an ERISA Event that might
      reasonably be expected to have a Material Adverse Effect.

23.34 FEDERAL RESERVE REGULATIONS

      The  Company  shall  procure  that each US Group Member  and  each  ERISA
      Affiliate will use the Facilities  without violating Regulations T, U and
      X.

23.35 MATERIAL ADVERSE EFFECT

      No Obligor shall (and the Company shall  ensure  that  no other member of
      the Group will) enter into any agreement or obligation:

      (i)    which is reasonably likely to have a Material Adverse Effect; or

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      (ii)   the performance of which would result in a breach of any provision
             of any Finance Document by any Obligor.

23.36 ADDITIONAL GUARANTOR

      The  Company  shall  procure  that  any Subsidiary which qualifies  as  a
      Material Subsidiary becomes an Additional Guarantor no later than 90 days
      after the date of this Agreement or, if such Subsidiary only qualifies as
      a  Material  Subsidiary  after  such date,  after  the  relevant  audited
      financial statements are to be delivered  in  accordance with Clause 21.1
      (Financial Statements) para. (a) (i), that the  shares  in  such Material
      Subsidiary  are pledged or assigned and that the assets of such  Material
      Subsidiary are  pledged  or  assigned in favour of the Finance Parties in
      accordance with the applicable  laws. However, should any Obligor acquire
      shares in a target company which  will qualify as a Material Company, the
      above  applies mutatis mutandis within  90  days  of  the  date  of  such
      acquisition.

23.37 MANDATORILY DISCHARGED INDEBTEDNESS AND PERMITTED INDEBTEDNESS

(a)   The Borrowers  undertake to make a Utilisation of Term Facility A for the
      purposes of discharging the Mandatorily Discharged Indebtedness not later
      than 30 Business  Days  after  the  date  of this Agreement. However, all
      Mandatorily Discharged Indebtedness shall be  discharged  by Utilisations
      of Term Facility A which are made on the same date.

(b)   The Company procures that the contractual arrangements pertaining  to the
      Permitted   Indebtedness   identified  in  the  definition  of  Permitted
      Indebtedness para. (r) will be entered into within 90 days after the date
      of this Agreement and such Permitted  Indebtedness  will  remain in place
      and  such  commitments  will be available or the respective amounts  will
      remain drawn, as the case may be, until Termination Date.

23.38 GERMAN OBLIGORS

      The provisions of Clause  23.4  (Disposals)  to  Clause  23.7 (Year End),
      Clause   23.9  (Constitutional  Documents),  Clause  23.12  (Intellectual
      Property),   Clause  23.22  (Cash  Flow  Restrictions)  to  Clause  23.27
      (Treasury Transactions),  Clause 23.29 (Acquisitions and Investments) and
      Clause 23.30  (Joint Ventures)  (the  "RELEVANT  RESTRICTIVE  COVENANTS")
      shall not apply  to  any  Obligor  whose Relevant Jurisdiction is Germany
      (each a "GERMAN OBLIGOR") or any of  its  Subsidiaries  from time to time
      whose  Relevant  Jurisdiction  is  Germany  (together  with  such  German
      Obligor, a "GERMAN GROUP").

23.39 NOTIFICATION BY A GERMAN OBLIGOR

      Each  German  Obligor undertakes to inform the Facility Agent in  writing
      and in good time  of  the  intention of it or of any member of its German
      Group to carry out any of the  acts  or take any of the steps referred to
      in the Relevant Restrictive Covenant explaining  if  and  how  such steps
      might affect the financial situation of the Company or the Group, or  the
      Finance Parties' risk and security position. Any such notification  shall
      not be made later than forty-five (45) days before such measure shall  be
      implemented,  or in case of urgent matters requiring an implementation on
      shorter notice immediately after the need for the relevant measure arises
      PROVIDED THAT the reasons for such urgent implementation are described in
      the notification.  The  Facility  Agent shall be entitled within ten (10)
      Business  Days  of receipt of the relevant  German  Obligor's  notice  to
      request the relevant  German  Obligor  and  the  Company to supply to the
      Facility  Agent  in  sufficient  copies for the Finance  Parties  further
      relevant information in connection  with  the  proposed  action  or steps
      referred  to  in  such  notice.  If  any  notification  pursuant  to this
      Clause 23.39 is received by the Facility

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<PAGE>




      Agent, the Lenders will determine within twenty (20) Business Days  after
      receipt  of  the  relevant notification, on a case by case basis, whether
      the proposed measure would constitute an Event of Default if implemented.

24.   EVENTS OF DEFAULT

      Each of the events or circumstances set out in this Clause 24 is an Event
      of Default.

24.1  NON-PAYMENT

      An Obligor does not  pay on the due date any amount payable pursuant to a
      Finance Document at the  place  at  and  in  the  currency in which it is
      expressed to be payable, including payment of Mandatory  Cash  Collateral
      by the Company, unless:

      (a)    its failure to pay is caused by  administrative or technical error;
             and

      (b)    payment is made within two (2) Business Days of its due date.

24.2  FINANCIAL COVENANTS

      Any requirement of Clause 22 (Financial Covenants) is not satisfied.

24.3  OTHER OBLIGATIONS

(a)   An  Obligor  does not  comply  with a material  provision  of the  Finance
      Documents (other than those referred to in Clause 24.1  (Non-Payment)  and
      Clause 24.2  (Financial  Covenants)) or does not comply with any provision
      of the  Finance  Documents  which is capable of remedy and fails to remedy
      such breach within a grace period  specified by the Facility  Agent of not
      more than ten (10) Business Days or, in case of a failure by an Obligor to
      comply  with  a   notification   requirement   pursuant  to  Clause  23.39
      (Notification  by a German  Obligor),  does not promptly upon the Facility
      Agent's request comply with its obligations thereunder.

(b)   An  Obligor  implements  a measure  requiring  prior  notification  of the
      Facility Agent pursuant to Clause 23.39 (Notification by a German Obligor)
      after having been informed by the Facility Agent that the Lenders consider
      implementation   of  the  relevant  measure  as  having  material  adverse
      consequences  for their risk or  security  position,  or  implements  such
      measure  prior to the  earlier to occur of (i)  approval by the Lenders of
      such measure and (ii) twenty (20) Business Days after having  notified the
      Facility Agent in accordance with Clause 23.39  (Notification  by a German
      Obligor).

24.4  MISREPRESENTATION

      Any representation or statement made or deemed to be made  by  an Obligor
      in the Finance Documents or any other document delivered by or on  behalf
      of  any  Obligor  under  or in connection with any Finance Document is or
      proves to have been incorrect  or misleading in any material respect when
      made or deemed to be made and which has or is reasonably likely to have a
      Material Adverse Effect.

24.5  CROSS DEFAULT

      (a)    Any Financial  Indebtedness  of any member of the Group is not paid
             when due and payable  nor within any  originally  applicable  grace
             period.

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<PAGE>

      (b)    Any Financial  Indebtedness  of any member of the Group is declared
             to be or otherwise  becomes due and payable  prior to its specified
             maturity as a result of an event of default (however described).

      (c)    Any commitment for any Financial  Indebtedness of any member of the
             Group is  cancelled or suspended by a creditor of any member of the
             Group as a result of an event of default (however described).

      (d)    Any creditor of any member of the Group becomes entitled to declare
             any  Financial  Indebtedness  of any  member  of the  Group due and
             payable prior to its specified  maturity as a result of an event of
             default (however described).

      (e)    No Event of  Default  will  occur  under  this  Clause  24.5 if the
             aggregate  amount  of  Financial  Indebtedness  or  commitment  for
             Financial  Indebtedness  falling within paragraphs (a) to (d) above
             is less than e 2,500,000 (or its  equivalent in any other  currency
             or currencies).

24.6  INSOLVENCY

      (a)    A member of the Group  located  in an OECD  country  or a  Material
             Subsidiary  (each  a  "RELEVANT   COMPANY")  is  unable  or  admits
             inability  to pay its  debts  as they  fall  due,  suspends  making
             payments on any of its debts or, by reason of actual or anticipated
             financial difficulties,  commences negotiations with one or more of
             its creditors with a view to rescheduling any of its  indebtedness.
             In particular,  any Relevant Company incorporated under the laws of
             Germany (a "GERMAN RELEVANT COMPANY") is unable to pay its debts as
             they fall due (Zahlungsunfahigkeit), commences negotiations with
             any  one or  more  of its  creditors  with  a view  to the  general
             readjustment or rescheduling of its indebtedness or makes a general
             assignment  for the benefit of or a composition  with its creditors
             or, for any of the reasons set out in Sections  17-19 of the German
             Insolvenzordnung,  any German Relevant Company files for insolvency
             (Antrag auf Eroffnung eines Insolvenzverfahrens) or the board of
             directors  (Geschaftsfuhrung)  of any German Relevant Company
             is required by law to file for  insolvency or the  competent  court
             takes  any of the  actions  set  out in  Section  21 of the  German
             Insolvenzordnung or institutes  insolvency  proceedings against any
             German Relevant Company (Eroffnung des  Insolvenzverfahrens)  or
             any event occurs with respect to any other Relevant  Company which,
             under the laws of any  jurisdiction  to which it is  subject  or in
             which it has assets, has a similar or analogous effect.

      (b)    Any event or  proceedings  are taken with  respect to any  Relevant
             Company that has a similar  effect to any of the provisions set out
             in paragraph (a) above.

      (c)    A  moratorium  is  declared in respect of any  indebtedness  of any
             Relevant Company.

24.7  INSOLVENCY PROCEEDINGS

      Any  corporate action, legal proceedings or other procedure  or  step  is
      taken in relation to:

      (a)   the  suspension  of  payments,  a  moratorium  of any indebtedness,
            winding-up, dissolution, administration or reorganisation  (by  way
            of  voluntary  arrangement,  scheme of arrangement or otherwise) of
            any  Relevant  Company  other  than   a   solvent   liquidation  or
            reorganisation of any Relevant Company which is not an Obligor;

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<PAGE>

      (b)   a composition, assignment or arrangement with any creditor  of  any
            Relevant Company;

      (c)   the appointment of a liquidator (other than in respect of a solvent
            liquidation  of  a  Relevant  Company  which  is  not  an Obligor),
            receiver,  administrator, provisional administrator, administrative
            receiver, compulsory manager or other similar officer in respect of
            any Relevant Company or any of its assets; or

      (d)    enforcement  of  any  Security  over  any  material  assets  of any
             Relevant Company,

      or  any analogous procedure or step is taken in any jurisdiction,  unless
      such  corporate  action, legal proceedings or analogous procedure or step
      is fully discontinued within fourteen (14) days of its commencement.

24.8  CREDITORS' PROCESS

      Any attachment, sequestration, distress or execution affects any asset or
      assets of a Relevant Company having an aggregate value of e 1,500,000 and
      is not discharged within fourteen (14) days.

24.9  OWNERSHIP OF THE OBLIGORS

      Except in relation  to  a sale of shares in HITCO CARBON COMPOSITES, Inc.
      under  an existing call option  with  its  chief  executive  officer,  an
      Obligor  (other  than  the Company) is not or ceases to be a wholly-owned
      Subsidiary of the Company on or after the Closing Date.

24.10 FINANCE DOCUMENTS

      If:

      (a)    it is or becomes  unlawful  for  an  Obligor to perform any of its
             obligations under the Finance Documents;

      (b)    an Obligor repudiates a Finance Document or evidences an intention
             to repudiate a Finance Document; or

      (c)    any  Finance  Document  is  not or ceases  to  be  binding  on  or
             enforceable against an Obligor,

      and the risk or security position of  the Lenders is materially adversely
      affected thereby.

24.11 TRANSACTION SECURITY

      If:

      (a)    any Transaction Security is not  in full force and effect with the
             ranking and priority it is expressed to have;

      (b)    an Obligor repudiates any of the Transaction Security or evidences
             an intention to repudiate any of the Transaction Security; or

      (c)    a notification is made to the Facility  Agent  pursuant  to Clause
             19.9 (b),

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<PAGE>


      and  the  security or risk position of the Lender is materially adversely
      affected thereby.

24.12 CESSATION OF BUSINESS

      Any Obligor  ceases  to  carry  on  all  or  any  substantial part of its
      business or proposes to do so.

24.13 AUDITORS' QUALIFICATION

      The Company's auditors qualify their report on the  audited  consolidated
      financial  statements of the Group in any manner that is, in the  opinion
      of the Majority  Lenders  (acting  reasonably), materially adverse in the
      context of the Finance Documents and the transactions contemplated by the
      Finance Documents.

24.14 MATERIAL ADVERSE CHANGE OR EFFECT

      Any event or circumstance occurs which  the  Majority  Lenders reasonably
      believe has had or could have a Material Adverse Effect  or,  following a
      notification pursuant to Clause 23.39 (Notification by a German Obligor),
      the  Majority  Lenders  reasonably  believe  has  or  could have material
      adverse consequences for the Lenders' risk and security position.

24.15 GUARANTOR ACCESSION

      Any  of the Material Subsidiaries has not become an Additional  Guarantor
      on or  before the date falling ninety (90) days after the Closing Date or
      a  request   of  the  Facility  Agent  in  accordance  with  Clause  26.3
      (Additional Guarantors), respectively.

24.16 COMPULSORY ACQUISITION

      All or any part  of  the  assets  of  any member of the Group are seized,
      nationalised, expropriated or compulsorily  acquired  by, or by the order
      of, any agency of any state having a value in excess of e 5,000,000.

24.17 CHANGE OF CONTROL

      There is a Change of Control.

24.18 PROCEEDINGS

(a)   Any litigation, arbitration, labour dispute or administrative proceedings
      of  or  before  any  court,  arbitral  body  or  agency (other  than  the
      proceedings  referred  to  in  paragraph (b) below) which,  if  adversely
      determined, could, in the reasonable  opinion of the Majority Lenders, be
      expected  to  have  a  Material  Adverse Effect  is  or  are  started  in
      accordance  with  the  applicable  procedural   rules   in  the  relevant
      jurisdiction or threatened against any member of the Group.

(b)   Other  than  the  Existing  Competition  Law  Proceedings as set  out  in
      Schedule  15  (Existing  Competition  Law  Proceedings   and   Anti-Trust
      Lawsuits),  any  competition  law  related  (i)  civil  litigation, civil
      lawsuits or other civil proceedings of or before any court are started in
      accordance   with   the  applicable  procedural  rules  in  any  relevant
      jurisdiction  against  any  member  of  the  Group  which,  if  adversely
      determined, could,  in the reasonable opinion of the Majority Lenders, be
      expected to have a Material  Adverse  Effect  or  (ii)  any  fines in the
      aggregate  amount  exceeding  e 2,500,000  are  assessed  by  way of  any
      administrative  proceedings  by  the  relevant authorities  or (iii)  any
      fines in the aggregate amount exceeding

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      the existing fines of e 80,200,000 and additional e 27,750,000 by at least
      e 2,500,000  in  relation  to the  Existing  Competition  Law  Proceedings
      identified in Schedule 15 No. I are assessed by way of any  administrative
      proceedings by the relevant authorities.

      However,  before  accelerating the Facilities pursuant  to  Clause  24.19
      (Acceleration), the  parties  will  enter into negotiations in good faith
      for a period not exceeding 30 days after  the  occurrence  of  any of the
      events set out in No. (i), (ii) and/or (iii) with a view to continue  the
      Facilities.

24.19 ACCELERATION

      On  and at any time after the occurrence of an Event of Default, which is
      continuing  and  in  case  of an Event of Default pursuant to Clause 24.4
      (Misrepresentation),   Clause 24.9    (Ownership    of   the   Obligors),
      Clauses 24.11   (Transaction   Security),   Clause 24.12  (Cessation   of
      Business)  and  Clause 24.16 (Compulsory Acquisition),  if  the  Majority
      Lenders  consider  that  such  Event  of  Default  has  material  adverse
      consequences  for  the  Lenders' risk and security position, the Facility
      Agent may, and shall if so directed by the Majority Lenders, by notice to
      the Company:

      (a)    cancel the Total  Commitments  whereupon they shall  immediately be
             cancelled;

      (b)    declare  that  all  or  part of the Loans, together  with  accrued
             interest,  and  all  other  amounts   accrued  under  the  Finance
             Documents  be immediately due and payable,  whereupon  they  shall
             become immediately due and payable;

      (c)    declare that  all  or  part  of  the  Loans  be payable on demand,
             whereupon they shall immediately become payable  on  demand by the
             Facility Agent on the instructions of the Majority Lenders;

      (d)    require the Borrowers to procure that the liabilities  of  each of
             the  Lenders are promptly reduced to zero, whereupon the Borrowers
             will do so;

      (e)    more specifically, require the Company to:

             (i)   procure  that  the  liabilities of each of the Issuing Banks
                   and Fronting Banks under or in connection with the Letter of
                   Credit are promptly reduced to zero; or

             (ii)  provide Cash Collateral  for  the  Letter of Credit in Euros
                   and in an amount specified by the Facility Agent,

             whereupon the Company will do so;

      (f)    require the Borrowers to repay or pay all  outstandings  under the
             Subfacilities, whereupon the Borrowers will do so; and/or

      (g)    exercise, or direct the Security Agent to exercise, all or  any of
             its or, as the case may be, the Security Agent's rights, remedies,
             powers or discretions under any of the Finance Documents.

24.20 US OBLIGORS

      Notwithstanding  Clause  24.20  (Acceleration), upon the actual or deemed
      entry of an order for relief under the US Bankruptcy Code with respect to
      any US Obligor, the Facilities shall

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      cease to be available to such US  Obligor,  all Loans outstanding to such
      US Obligor shall become immediately due and payable  and  such US Obligor
      shall  be  required  to  provide cash cover in respect of the Letters  of
      Credit issued for its account  in each case automatically and without any
      further action by any party to this Agreement.



                                  SECTION 9

                              CHANGES TO PARTIES

25.   CHANGES TO THE LENDERS

25.1  ASSIGNMENTS AND TRANSFERS BY THE LENDERS

(a)   Subject to this Clause 25, a Lender (the "EXISTING LENDER") may assign and
      transfer or pledge,  as the case may be, any of its rights and obligations
      under this Agreement to another bank, financial institution,  trust, fund,
      special purpose  vehicle or other entity (the "NEW LENDER")  PROVIDED THAT
      in respect of the Revolving Credit Facility,  such Existing Lender may not
      assign and transfer to a New Lender its rights and obligations in relation
      thereto without the prior consent of the Facility Agent,  such consent not
      to be unreasonably withheld or delayed.

(b)   Notwithstading  the  subsequent  provisions  of this  Clause,  an Existing
      Lender  may assign or  pledge,  as the case may be, any claims  under this
      Agreement to any third party for refinancing purposes. The Existing Lender
      shall in case of any such assignments  remain  responsible in all respects
      for the  administration  of the claims so assigned,  and shall ensure that
      all  information  relating to the Obligors and the Finance  Documents made
      available  to any  such  assignee  is  subject  at all  times  to a strict
      confidentiality  obligation,  and that the Obligors  will  following  such
      assignment  be in no less  advantageous  a position,  in terms of cost and
      other potentially detrimental effects, than before such assignment.

25.2  CONDITIONS OF ASSIGNMENT AND TRANSFER

(a)   Theconsent of neither the Company nor any other Obligor is required for an
      assignment  and transfer by a Lender,  but such Lender shall  consult with
      the Company prior to any assignment.

(b)   An assignment and transfer of a Lender's  Commitment and  participation in
      outstanding Loans must be in a minimum amount of e 3,000,000 or any higher
      amount  which is an  integral  multiple  of e 500,000  unless  all of such
      Lender's Commitment and participation in outstanding Loans are assigned or
      transferred.

(c)   If a Lender  wishes to enter into an  assignment  and transfer of its Term
      Facility B Commitment and Term Facility B Outstandings, the consent of the
      beneficiary under the Letter of Credit will be required.  Furthermore,  if
      the  Majority  Lenders  decide  that the  Letter of Credit is to be issued
      through one or more Fronting Banks, the consent of all Fronting Banks will
      be required, such consent not to be unreasonably withheld or delayed.

(d)   An  assignment  and  transfer  will only be  effective  on  receipt by the
      Facility  Agent of written  confirmation  from the New Lender (in form and
      substance satisfactory to the Facility

                                      102

<PAGE>


      Agent) that the New Lender will assume the same  obligations  to the other
      Finance Parties as it would have been under if it was an Original Lender.

(e)   A transfer  will only be effective if the procedure set out in Clause 25.5
      (Procedure for Transfer) is complied with.

(f)   If:

      (i)    a  Lender assigns and transfers any of its rights, obligations  or
             claims under the Finance Documents or changes its Facility Office;
             and

      (ii)   as a  result of circumstances existing at the date the assignment,
             transfer  or  change occurs, an Obligor would be obliged to make a
             payment to the  New  Lender  or  Lender  acting  through  its  new
             Facility  Office under Clause 14 (Tax Gross-up and Indemnities) or
             Clause 15 (Increased Costs),

      then the New Lender  or  Lender acting through its new Facility Office is
      only entitled to receive payment  under  those Clauses to the same extent
      as  the Existing Lender or Lender acting through  its  previous  Facility
      Office  would  have  been  if  the assignment, transfer or change had not
      occurred.

25.3  ASSIGNMENT AND TRANSFER FEE

      Other  than  in  relation  to an assignment  and  transfer  under  Clause
      25.1(b), the New Lender shall,  on  the date upon which an assignment and
      transfer takes effect, pay to the Facility  Agent (for its own account) a
      fee of  e 1,500.

25.4  LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS

(a)   Unless  expressly  agreed to the  contrary,  an Existing  Lender  makes no
      representation  or warranty and assumes no  responsibility to a New Lender
      for:

      (i)   the legality, validity,  effectiveness,  adequacy or enforceability
            of the Finance Documents or any other documents;

      (ii)  the financial condition of any Obligor;

      (iii) the performance and observance by any Obligor  of  its  obligations
            under the Finance Documents or any other documents; or

      (iv)  the accuracy of any statements (whether written or oral) made in or
            in connection with any Finance Document or any other document,

      and any representations or warranties implied by law are excluded.

(b)   Each New Lender  confirms  to the  Existing  Lender and the other  Finance
      Parties that it:

      (i)   has   made  (and  shall  continue  to  make)  its  own  independent
            investigation and assessment of the financial condition and affairs
            of each  Obligor  and  its  related entities in connection with its
            participation in this Agreement  and  has not relied exclusively on
            any information provided to it by the Existing Lender in connection
            with any Finance Document; and

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<PAGE>


      (ii)  will  continue  to  make  its  own  independent  appraisal  of  the
            creditworthiness of each Obligor and  its  related  entities whilst
            any amount is or may be outstanding under the Finance  Documents or
            any Commitment is in force.

(c)   Nothing in any Finance Document obliges an Existing Lender to:

      (i)   accept  a  re-transfer  from  a  New  Lender  of any of the rights,
            obligations   and  claims  assigned  or  transferred   under   this
            Clause 25; or

      (ii)  support any losses  directly  or  indirectly  incurred  by  the New
            Lender  by  reason  of  the  non-performance  by any Obligor of its
            obligations under the Finance Documents or otherwise.

25.5  PROCEDURE FOR TRANSFER

(a)   Subject to the conditions set out in Clause 25.2 (Conditions of Assignment
      and  Transfer) an assignment  and transfer is effected in accordance  with
      paragraph  (b) below when the Facility  Agent  executes an otherwise  duly
      completed Transfer Certificate  delivered to it by the Existing Lender and
      the  New  Lender.   The  Facility  Agent  shall,  as  soon  as  reasonably
      practicable after receipt by it of a duly completed  Transfer  Certificate
      appearing  on its face to  comply  with the  terms of this  Agreement  and
      delivered in  accordance  with the terms of this  Agreement,  execute that
      Transfer Certificate.

(b)   On the Transfer Date:

      (i)   each of the Obligors  and  the  New Lender shall assume obligations
            towards one another and/or acquire  rights  or  claims  against one
            another which differ from the rights, obligations and claims  among
            the  Obligors  and the Existing Lender only insofar as that Obligor
            and the New Lender  have  assumed and/or acquired the same in place
            of that Obligor and the Existing Lender;

      (ii)  the  Facility  Agent,  the  Security   Agent,   the  Mandated  Lead
            Arrangers,  the  New  Lender,  the other Lenders and  any  relevant
            Fronting Banks shall acquire the  same rights and claims and assume
            the same obligations between themselves as they would have acquired
            and assumed had the New Lender been  an  Original  Lender  with the
            rights,  claims and/or obligations acquired or assumed by it  as  a
            result of  the  transfer and to that extent the Facility Agent, the
            Security Agent, the  Mandated Lead Arrangers, any relevant Fronting
            Banks and the Existing  Lender  shall each be released from further
            obligations to each other under this Agreement; and

      (iii) the New Lender shall become a Party as a "LENDER".

25.6  DISCLOSURE OF INFORMATION

      Any Lender may disclose to:

      (a)    any of its Affiliates and any of its or their respective officers,
             employees, Agents, professional advisers or auditors; and

      (b)    any other person:

             (i)   to (or through) whom that  Lender  assigns and transfers (or
                   may  potentially assign and transfer)  all  or  any  of  its
                   rights, obligations and/or claims under this Agreement;

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<PAGE>


             (ii)  with (or  through)  whom  that  Lender  enters  into (or may
                   potentially  enter  into) any sub-participation in  relation
                   to, or any other transaction  under which payments are to be
                   made by reference to, this Agreement or any Obligor; or

             (iii) to whom, and to the extent that,  information is required to
                   be disclosed by any applicable law or regulation,

             (iv)  any information about any Obligor, the Group and the Finance
                   Documents as that Lender shall consider  appropriate  if, in
                   relation  to  paragraphs  (i)  and (ii) above, the person to
                   whom  the  information is to be given  has  entered  into  a
                   Confidentiality Undertaking.

25.7  ANCILLARY PROVISIONS

      Each  Obligor shall execute  and  do  all  such  transfers,  assignments,
      assurances,  acts and things as the Facility Agent may reasonably request
      for perfecting and completing any assignment and transfer by a Lender.

26.   CHANGES TO THE OBLIGORS

26.1  ASSIGNMENTS AND TRANSFER BY OBLIGORS

      No Obligor may  assign any of its rights or transfer any of its rights or
      obligations under the Finance Documents.

26.2  ADDITIONAL BORROWERS

(a)   The Company may request that any of its Material  Subsidiaries  becomes an
      Additional Borrower (and thereby an Additional  Guarantor).  That Material
      Subsidiary shall become an Additional  Borrower (and thereby an Additional
      Guarantor) if:

      (i)   other  than  in  relation  to an Approved Additional Borrower,  the
            Facility Agent approves the addition of that Material Subsidiary;

      (ii)  the Company delivers to the  Facility  Agent  a  duly completed and
            executed Borrower Accession Letter;

      (iii) the Company confirms that no Default is continuing  or  would occur
            as  a  result  of  that  Material Subsidiary becoming an Additional
            Borrower (and thereby an Additional Guarantor);

      (iv)  such Additional Borrower provides  and,  to the extent permitted by
            law, causes any Subsidiary to provide, such Security for all or any
            part of its obligations under the Finance Documents as the Facility
            Agent shall reasonably require; and

      (v)   the  Facility  Agent has received all of the  documents  and  other
            evidence listed in Part III of Schedule 2 (Conditions Precedent and
            Conditions Subsequent)  in  relation  to  that Additional Borrower,
            each in form and substance satisfactory to the Facility Agent.

(b)   The Facility Agent shall notify the Company and the Lenders  promptly upon
      being  satisfied that it has received (in form and substance  satisfactory
      to it) all the documents and other evidence listed in Part III of Schedule
      2 (Conditions Precedent and Conditions Subsequent).

                                      105

<PAGE>


26.3  ADDITIONAL GUARANTORS

(a)   The Company may, and shall at the request of the Facility  Agent,  request
      that any of its Material Subsidiaries become an Additional Guarantor.  The
      Company  may also  request  that any other of its  Subsidiaries  become an
      Additional Guarantor. That Subsidiary (be it a Material Subsidiary or not)
      shall become an Additional Guarantor if:

      (i)   the  Company  delivers  to  the Facility Agent a duly completed and
            executed Guarantor Accession Letter;

      (ii)  such Additional Guarantor provides  and, to the extent permitted by
            law, causes any of its Subsidiaries to  provide,  such Security for
            all or any part of its obligations under the Finance  Documents  as
            the Facility Agent shall require; and

      (iii) the  Facility  Agent  has  received  all of the documents and other
            evidence listed in Part III of Schedule 2 (Conditions Precedent and
            Conditions Subsequent) in relation to  that  Additional  Guarantor,
            each in form and substance satisfactory to the Facility Agent.

(b)   The Facility Agent shall notify the Company and the Lenders  promptly upon
      being  satisfied that it has received (in form and substance  satisfactory
      to it) all the documents and other evidence listed in Part III of Schedule
      2 (Conditions Precedent and Conditions Subsequent).

26.4  REPETITION OF REPRESENTATIONS

      Delivery of an Accession Letter constitutes confirmation  by the relevant
      Subsidiary  that  the Repeating Representations are true and  correct  in
      relation to it as at  the date of delivery as if made by reference to the
      facts and circumstances then existing.



                                   SECTION 10

                              THE FINANCE PARTIES

27.   ROLE OF THE FACILITY AGENT,  THE SECURITY AGENT, THE DOCUMENTATION AGENT,
      THE MANDATED LEAD ARRANGERS AND THE COMPANY AS AGENT OF THE OBLIGORS

27.1  APPOINTMENT OF THE FACILITY AGENT AND THE SECURITY AGENT

(a)   Each of the Finance  Parties  other than the Facility  Agent  appoints the
      Facility  Agent  to act as its  Agent  under  and in  connection  with the
      Finance Documents.

(b)   Each of the Finance  Parties  other than the Security  Agent  appoints the
      Security Agent to act as its security  agent under and in connection  with
      the Finance Documents.

(c)   Each of the Finance  Parties other than the Facility Agent  authorises the
      Facility  Agent,  and each of the Finance  Parties other than the Security
      Agent  authorises  the Security  Agent,  to exercise  the rights,  powers,
      authorities  and  discretions   specifically  given  to  it  under  or  in
      connection with the Finance  Documents  together with any other incidental
      rights, powers, authorities and discretions.

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<PAGE>


(d)   Each of the Finance Parties other than the Facility Agent and the Security
      Agent  hereby  grants  power of  attorney  to the  Facility  Agent and the
      Security Agent,  respectively,  to be exercised for the purposes described
      in Clause  27.1(c).  The Facility  Agent and the  Security  Agent shall be
      released  from the  restrictions  of Section 181 of the German  Civil Code
      (Burgerliches Gesetzbuch); they are authorised to delegate their powers of
      attorney,  including the exemption from the restrictions of Section 181 of
      the German  Civil Code.  At the request of the  Facility  Agent and/or the
      Security  Agent,  the Mandated Lead  Arrangers and the Lenders shall grant
      special powers of attorney to the Facility Agent and/or the Security Agent
      to enter into any Finance Documents,  or any amendments  thereof, on their
      behalf.

27.2  DUTIES OF THE FACILITY AGENT AND THE SECURITY AGENT

(a)   The  Facility  Agent shall  promptly  forward to a Party the original or a
      copy of any document  that is  delivered  to the  Facility  Agent for that
      Party by any other Party.

(b)   If the  Facility  Agent  receives  notice from a Party  referring  to this
      Agreement,   describing  a  Default  and  stating  that  the  circumstance
      described is a Default,  it shall  promptly  notify the Lenders and, where
      appropriate, the Fronting Banks.

(c)   The  Facility  Agent  shall   promptly   notify  the  Lenders  and,  where
      appropriate,  the Fronting Banks of any Default  arising under Clause 24.1
      (Non-payment).

(d)   The Facility  Agent shall  promptly  provide the Security  Agent with such
      certificate(s)  as the Security  Agent may require as to all amounts which
      are owing, actually or contingently,  at any time by any Obligor to all or
      any of the Finance  Parties (other than the Security Agent in its capacity
      as security agent) under the Finance Documents, whether or not due.

(e)   The  Security  Agent  shall  promptly  notify  the  Facility  Agent of the
      contents  of any notice or  document  received  by it, in its  capacity as
      security  agent,  from  any  of the  Obligors  under  any  of the  Finance
      Documents.

(f)   The duties of the Facility  Agent and the Security Agent under the Finance
      Documents are solely mechanical and administrative in nature.

27.3  ROLE OF THE DOCUMENTATION AGENT AND THE MANDATED LEAD ARRANGERS

      Except   as  specifically  provided  in  the   Finance   Documents,   the
      Documentation Agent and each Mandated Lead Arranger has no obligations of
      any kind to  any  other  Party  under  or  in connection with any Finance
      Document.

27.4  NO FIDUCIARY DUTIES

(a)   Nothing in this Agreement  constitutes  the Facility  Agent,  the Security
      Agent (except as expressly provided in Schedule 11 (Form of Security Trust
      Agreement)),  the Documentation  Agent, the Fronting Banks or the Mandated
      Lead Arrangers as a trustee or fiduciary of any other person.

(b)   None of the  Facility  Agent,  the  Security  Agent  (except as  expressly
      provided  in  Schedule 11 (Form of  Security  Trust  Agreement)  or in any
      Security  Document),  the  Documentation  Agent, the Fronting Banks or the
      Mandated  Lead  Arrangers  shall be bound to account to any Lender for any
      sum or the profit element of any sum received by it for its own account.

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<PAGE>



27.5  BUSINESS WITH THE GROUP

      The  Facility  Agent,  the  Security Agent, the Documentation Agent,  the
      Fronting Banks and the Mandated  Lead Arrangers may accept deposits from,
      lend money to and generally engage  in  any  kind  of  banking  or  other
      business with any member of the Group.

27.6  RIGHTS AND DISCRETIONS OF THE FACILITY AGENT AND THE SECURITY AGENT

(a)   The Facility Agent and the Security Agent may rely on:

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

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

(b)   The  Facility  Agent and the  Security  Agent may  assume  (unless  it has
      received  notice to the contrary in its capacity as facility  agent or, as
      the case may be, as security agent) that:

      (i)   no  Default has occurred (unless  it  has  actual  knowledge  of  a
            Default arising under Clause 24.1 (Non-payment));

      (ii)  any right,  power,  authority  or discretion vested in any Party or
            the Majority Lenders has not been exercised; and

      (iii) any notice or request made by the Company (other than a Utilisation
            Request or Selection Notice) is  made  on  behalf  of  and with the
            consent and knowledge of all the Obligors.

(c)   Each of the Facility Agent and the Security Agent may engage,  pay for and
      rely on the advice or services of any lawyers,  accountants,  surveyors or
      other experts.

(d)   Each of the Facility  Agent and the Security  Agent may act in relation to
      the Finance Documents through its personnel and agents.

27.7  MAJORITY LENDERS' INSTRUCTIONS

(a)   Unless a contrary  indication  appears in a Finance Document,  each of the
      Facility Agent and the Security Agent shall:

      (i)   act in accordance with any instructions given to it by the Majority
            Lenders (or, if so instructed by the Majority Lenders, refrain from
            acting  or  exercising  any  right,  power, authority or discretion
            vested in it as Facility Agent or Security  Agent,  as the case may
            be); and

      (ii)  not  be  liable  for any act (or omission) if it acts (or  refrains
            from taking any action)  in  accordance with such an instruction of
            the Majority Lenders.

(b)   Unless  a  contrary   indication  appears  in  a  Finance  Document,   any
      instructions  given by the  Majority  Lenders  will be  binding on all the
      Lenders and the Mandated Lead Arrangers.

(c)   Each of the Facility  Agent and the Security Agent may refrain from acting
      in  accordance  with the  instructions  of the  Majority  Lenders  (or, if
      appropriate, the Lenders) until it has


                                      108

<PAGE>


      received such  security as it may require for any cost,  loss or liability
      (together  with any  associated  VAT) which it may incur in complying with
      the instructions.

(d)   In the  absence  of  instructions  from  the  Majority  Lenders,  (or,  if
      appropriate,  all the Lenders) each of the Facility Agent and the Security
      Agent may act or refrain  from  taking any action or from  exercising  any
      right,  power or  discretion  vested in it as an agent  under any  Finance
      Document unless and until instructed by the Majority Lenders as to whether
      or not such right, power or discretion is to be exercised and, if it is to
      be exercised, as to the manner in which it should be exercised.

(e)   Neither the Facility  Agent nor the Security Agent is authorised to act on
      behalf of a Lender (without first obtaining that Lender's  consent) in any
      legal or arbitration proceedings relating to any Finance Document.

27.8  RESPONSIBILITY FOR DOCUMENTATION

      None  of the Facility Agent, the Security Agent, the Documentation  Agent
      and the Mandated Lead Arrangers:

      (a)    is  responsible  for the adequacy, accuracy and/or completeness of
             any information (whether oral or written) supplied by the Facility
             Agent, the Security  Agent,  the Documentation Agent, the Mandated
             Lead Arrangers, an Obligor or  any other person and given in or in
             connection   with  any  Finance  Document   or   the   Information
             Memorandum; or

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

27.9  EXCLUSION OF LIABILITY

(a)   Without limiting  paragraph (b) below,  neither the Facility Agent nor the
      Security  Agent  will be  liable  for any  action  taken by it under or in
      connection  with,  or for any  omission by it in relation  to, any Finance
      Document,  unless  directly  caused  by its  gross  negligence  or  wilful
      misconduct.

(b)   No Party may take any proceedings  against any officer,  employee or agent
      of the  Facility  Agent or the  Security  Agent in respect of any claim it
      might have against the Facility  Agent or the Security Agent or in respect
      of any act or omission of any kind by that  officer,  employee or agent in
      relation to any Finance Document and any officer, employee or agent of the
      Facility Agent or the Security Agent may rely on this Clause.

(c)   Neither the Facility  Agent nor the Security  Agent will be liable for any
      delay (or any related consequences) in crediting an account with an amount
      required under the Finance  Documents to be paid by it if it has taken all
      necessary  steps as soon as  reasonably  practicable  to  comply  with the
      regulations  or  operating   procedures  of  any  recognised  clearing  or
      settlement system used by it for that purpose.

27.10 LENDERS' INDEMNITY TO THE FACILITY AGENT AND THE SECURITY AGENT

      Each  Lender  shall (in proportion to its share of the Total  Commitments
      or, if the Total  Commitments  are  then  zero, to its share of the Total
      Commitments immediately prior to


                                      109

<PAGE>


       their reduction to zero) indemnify the Facility  Agent  and the Security
      Agent, within three (3) Business Days of demand, against any  cost,  loss
      or  liability  incurred  by  the  Facility  Agent  or  the Security Agent
      (otherwise  than by reason of its gross negligence or wilful  misconduct)
      in acting as  Facility Agent or, as the case may be, Security Agent under
      the Finance Documents  (unless  it  has  been  reimbursed  by  an Obligor
      pursuant to a Finance Document).

27.11 RESIGNATION OF THE FACILITY AGENT OR THE SECURITY AGENT

(a)   The Facility Agent or the Security Agent may resign and appoint one of its
      Affiliates as successor by giving notice to the Lenders and the Company.

(b)   Alternatively  the  Facility  Agent or the  Security  Agent may  resign by
      giving  notice to the Lenders and the Company,  in which case the Majority
      Lenders  (after  consultation  with the  Company)  may appoint a successor
      agent or, as the case may be, security agent.

(c)   If the Majority Lenders have not appointed a successor  facility agent or,
      as the case may be,  security agent in accordance with paragraph (b) above
      within  thirty  (30) days  after  notice of  resignation  was  given,  the
      Facility  Agent  or,  as the  case  may  be,  the  Security  Agent  (after
      consultation  with the Company) may appoint a successor  facility agent or
      security agent (acting through an office in Luxembourg).

(d)   The retiring Facility Agent or Security Agent shall, at its own cost, make
      available to its  successor  such  documents  and records and provide such
      assistance  as its successor  may  reasonably  request for the purposes of
      performing  its  functions as facility  agent or security  agent under the
      Finance Documents.

(e)   The Facility Agent's resignation notice shall only take effect upon:

      (i)   the appointment of a successor; and

      (ii)  the receipt by the Facility Agent of written  confirmation from the
            successor  (in  form  and  substance satisfactory to  the  Facility
            Agent) that the successor agrees  to  be bound by the provisions of
            the Finance Documents and all other related agreements to which the
            Facility Agent is a party in its capacity as facility agent.

(f)   The Security Agent's resignation notice shall only take effect upon:

      (i)   the appointment of a successor;

      (ii)  the receipt by the Security Agent of written  confirmation from the
            successor  (in  form  and  substance satisfactory to  the  Security
            Agent) that the successor agrees  to  be bound by the provisions of
            the Finance Documents and all other related agreements to which the
            Security Agent is a party in its capacity as security agent; and

      (iii) the receipt by the Facility Agent of written  confirmation from the
            Security Agent (in form and substance satisfactory  to the Facility
            Agent)   that   it  has  received,  and  found  satisfactory,   the
            confirmation referred  to  in sub-paragraph (ii) above and that all
            Security created pursuant to  the  Security  Documents  and all the
            Security Agent's rights, benefits and obligations as security agent
            under the Finance Documents have been transferred to its successor.

                                      110

<PAGE>

(g)   Upon any such  resignation  notice taking  effect,  the retiring  Facility
      Agent or Security Agent shall be discharged from any further obligation in
      respect of the Finance  Documents but shall remain entitled to the benefit
      of this Clause 27 and, in the case of the Security  Agent,  of Schedule 11
      (Form of Security Trust  Agreement)).  Its successor and each of the other
      Parties shall have the same rights and obligations  amongst  themselves as
      they would have had if such successor had been an original Party.

(h)   After  consultation with the Company,  the Majority Lenders may, by notice
      to the Facility Agent or, as the case may be, the Security Agent,  require
      it to resign in accordance  with paragraph (b) above.  In this event,  the
      Facility  Agent or, as the case may be, the Security Agent shall resign in
      accordance with paragraph (b) above.

27.12 CONFIDENTIALITY

(a)   The Facility  Agent (in acting as facility  agent) and the Security  Agent
      (in acting as security  agent)  shall be  regarded  as acting  through its
      respective  agency or security  agent division which shall in each case be
      treated  as  a  separate  entity  from  any  other  of  its  divisions  or
      departments.

(b)   If  information  is received  by another  division  or  department  of the
      Facility  Agent  or, as the case may be,  the  Security  Agent,  it may be
      treated as  confidential  to that division or department  and the Facility
      Agent or, as the case may be, the  Security  Agent  shall not be deemed to
      have notice of it.

(c)   Notwithstanding  any  other  provision  of  any  Finance  Document  to the
      contrary,   none  of  the  Facility  Agent,   the  Security   Agent,   the
      Documentation Agent and the Mandated Lead Arrangers is obliged to disclose
      to any other person;

      (i)    any confidential information; or

      (ii)   any  other information if the disclosure would  or  might  in  its
             reasonable opinion constitute a breach of any law or a breach of a
             fiduciary duty.

27.13 RELATIONSHIP WITH THE LENDERS AND FRONTING BANKS

(a)   The Facility Agent may treat each Lender as a Lender, entitled to payments
      under this Agreement and acting through its Facility  Office unless it has
      received  not less than five (5)  Business  Days  prior  notice  from that
      Lender to the contrary in accordance with the terms of this Agreement.

(b)   Each Lender shall supply the Facility Agent with any information  required
      by the  Facility  Agent  in  order  to  calculate  the  Mandatory  Cost in
      accordance with Schedule 4 (Mandatory Cost Formula).

(c)   Neither  the  Facility  Agent  nor  the  Security  Agent  shall  have  any
      obligation  or  liability to any Lender,  and  Fronting  Bank or any other
      person as a result of any  failure by any  Obligor or any other  person to
      perform any of its obligations under the Finance Documents.

27.14 CREDIT APPRAISAL BY THE LENDERS AND FRONTING BANKS

      Without  affecting  the responsibility of  any  Obligor  for  information
      supplied by it or on  its behalf in connection with any Finance Document,
      each Lender and each Fronting  Bank  confirms  to the Facility Agent, the
      Security Agent, the Documentation Agent and the

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      Mandated Lead Arrangers that it has been, and will continue to be, solely
      responsible for making its own independent appraisal and investigation of
      all  risks  arising  under  or  in connection with any  Finance  Document
      including but not limited to:

      (a)    the  financial  condition,  status and nature of each member of the
             Group;

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

      (c)    whether  that  Lender  or,  as the case may be, Fronting Bank  has
             recourse, and the nature and  extent of that recourse, against any
             Party or any of its respective  assets under or in connection with
             any Finance Document, the transactions contemplated by the Finance
             Documents  or  any  other  agreement,   Security,  arrangement  or
             document entered into, made or executed in  anticipation of, under
             or in connection with any Finance Document;

      (d)    the ownership, value or sufficiency of any of  the Charged Assets,
             the adequacy or priority of any of the Security  created  pursuant
             to the Security Documents, the right or title of any person  in or
             to  any  Charged Assets or the existence of any Security affecting
             the same;

      (e)    the adequacy,  accuracy  and/or  completeness  of  the Information
             Memorandum  and  any  other  information provided by the  Facility
             Agent, the Security Agent, any  Party or any other person under or
             in  connection  with  any  Finance  Document,   the   transactions
             contemplated  by  the  Finance  Documents  or any other agreement,
             Security, arrangement or document entered into,  made  or executed
             in  anticipation  of,  under  or  in  connection  with any Finance
             Document; and

      (f)    the  adequacy,  accuracy  and/or completeness of any communication
             delivered to it under any of  the  Finance Documents, any legal or
             other opinions, reports, valuations,  certificates,  appraisals or
             other  documents delivered or made or required to be delivered  or
             made at  any  time in connection with any of the Finance Documents
             or any other report  or  other  document, statement or information
             circulated, delivered or made, whether  orally  or  otherwise  and
             whether before, on or after the date of this Agreement.

27.15 REFERENCE BANKS

      If  a Reference Bank (or, if a Reference Bank is not a Lender, the Lender
      of which  it  is  an Affiliate) ceases to be a Lender, the Facility Agent
      shall appoint another  Lender or an Affiliate of a Lender to replace that
      Reference Bank.

27.16 MANAGEMENT TIME OF THE FACILITY AGENT AND THE SECURITY TRUSTEE

      Any amount payable to the  Facility  Agent  or the Security Trustee under
      Clause 16.3 (Indemnity to the Facility Agent  and  the Security Trustee),
      Clause 18  (Costs and Expenses) and Clause 27.10 (Lenders'  Indemnity  to
      the Facility  Agent  and  the Security Trustee) shall include the cost of
      utilising its management time  or  other resources and will be calculated
      on the basis of such reasonable daily or hourly rates as it may notify to
      the Company and the Lenders, and is  in  addition  to  any  fee  paid  or
      payable to it under Clause 13 (Fees).

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27.17 PARALLEL DEBT

(a)   Each  of the Parties hereto agree, and the Obligors acknowledge by way of
      an abstract  acknowledgement of debt (abstraktes Schuldanerkenntnis) (the
      "ACKNOWLEDGEMENT"),  that  each  and every obligation of any such Obligor
      (and any of its successors pursuant  to  this Agreement), and in relation
      to the Company in the amount of e 495,000,000  under  this  Agreement and
      the  other Finance Documents shall also be owing in full to the  Security
      Agent  (and  each  of  the latter's successors under this Agreement), and
      that accordingly the Security  Agent  will have its own independent right
      to demand performance by such Obligor of  those obligations. The Security
      Agent  undertakes  towards  the relevant Obligor  that  in  case  of  any
      discharge of any such obligation  owing to one of the Security Agent or a
      Finance Party, it will, to the same  extent, not make a claim against any
      Obligor under  the Acknowledgement at  any  time,  PROVIDED THAT any such
      claims can be made against an Obligor if such discharge is made by virtue
      of any set off, counterclaim or similar defence invoked  by  that Obligor
      vis-{a`}-vis the Security Agent.

 (b)  Without  limiting  or  affecting the Security Agent's rights against  any
      Obligor (whether under this paragraph or under any other provision of the
      Finance Documents), the  Security  Agent  agrees  with each other Finance
      Party (on a several and divided basis) that, subject  as  set  out in the
      next  sentence, it will not exercise its rights under the Acknowledgement
      except  with  the consent of the relevant Finance Party. However, for the
      avoidance of doubt,  nothing  in  the  previous sentence shall in any way
      limit the Security Agent's right to act in the protection or preservation
      of rights under or to enforce any Security  Document  as  contemplated by
      this Agreement and/or the relevant Security Document (or to  do  any  act
      reasonably incidental to the foregoing).

27.18 THE COMPANY AS AGENT OF THE OBLIGORS

      Each Obligor other than the Company irrevocably authorises the Company to
      act  on  its behalf as its agent in relation to the Finance Documents and
      irrevocably authorises:

      (a)    the  Company  on its behalf to supply  all  information  concerning
             itself,  its  financial  condition  and  otherwise  to the relevant
             persons  contemplated  under this Agreement and to give all notices
             and instructions (including, in the case of a Borrower (and without
             limitation),  Utilisation  Requests and  Selection  Notices) and to
             make any agreement  capable of being made by it on its behalf under
             the Finance  Documents  without further reference to or the consent
             of such Obligor; and

      (b)    each  Finance  Party  to make  any  communication  or  deliver  any
             document to be made or delivered  to such  Obligor  pursuant to the
             Finance  Documents to the Company on its behalf in accordance  with
             Clause 33 (Notices),

      and  in each such case such Obligor will be bound thereby as though  such
      Obligor  had  itself   supplied  such  information, given such notice and
      instructions or made such agreement or,  as  the  case may be, as if such
      communication or document had been made or delivered  to it in accordance
      with Clause 33 (Notices).

28.   THE LENDERS, THE FRONTING BANKS AND THE SUBFACILITY BANKS

28.1  LENDERS' INDEMNITY

(a)   If  the  Company  fails  to comply with its obligations under  Clause 8.2
      (Company's Indemnity to Issuing  Banks  and Fronting Banks) in respect of
      the Letter of Credit, the Facility Agent


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      shall  make  demand on each Term  Facility  B Lender  for its share of the
      relevant  Letter of Credit  Amount in respect of the Letter of Credit and,
      subject to Clause 28.2 (Direct Participation), each Term Facility B Lender
      shall indemnify each Fronting Bank or each Issuing Bank, respectively, for
      that Term Facility B Lender's  Letter of Credit  Proportion of such Letter
      of Credit Amount.

(b)   If  any  Borrower  fails to comply with its payment obligations under any
      Subfacility in case of termination of such Subfacility in accordance with
      Clause  2.2  (e) or the  scheduled  maturity  of  such  Subfacility,  the
      Facility Agent shall make demand on each Revolving Credit Facility Lender
      for its proportionate  share  of the relevant amount of such Subfacility,
      and subject to Clause 28.2 (Direct  Participation), each Revolving Credit
      Facility Lender shall indemnify each  Subfacility Bank for that Revolving
      Credit Facility Lender's proportion in  such  Subfacility  in relation to
      such  Revolving Credit Facility Lender's Available Commitment  under  the
      Revolving Credit Facility.

28.2  DIRECT PARTICIPATION

(a)   If any Term  Facility  B Lender is not  permitted  (by its  constitutional
      documents or any applicable  law) to comply with Clause 28.1(a)  (Lenders'
      Indemnity)  then that Term Facility B Lender will not be obliged to comply
      with Clause  28.1(a)  (Lenders'  Indemnity) and shall instead be deemed to
      have taken on the date the Letter of Credit is issued  (or,  if later,  on
      the date that any Letter of Credit  Proportion in respect of the Letter of
      Credit  is  transferred  or  assigned  to such Term  Facility  B Lender in
      accordance with the terms of this  Agreement),  an undivided  interest and
      participation  in the  Letter of  Credit  in an amount  equal to that Term
      Facility B Lender's Letter of Credit Proportion of the Letter of Credit.

(b)   On receipt  of demand by the  Facility  Agent in  accordance  with  Clause
      28.1(a) (Lenders'  Indemnity),  each such Term Facility B Lender shall pay
      to the Facility Agent (for the account of the Fronting Bank) its Letter of
      Credit Proportion of any Letter of Credit Amount.

(c)   If  any  Revolving  Credit  Facility  Lender  is  not  permitted  (by  its
      constitutional  documents  or any  applicable  law) to comply  with Clause
      28.1(b)  (Lenders'  Indemnity) then that Revolving  Credit Facility Lender
      will not be obliged to comply with Clause 28.1(b) (Lenders' Indemnity) and
      shall instead be deemed to have taken on the date  Subfacility  is agreed,
      an undivided  interest and  participation  in the Subfacility in an amount
      equal  to  that  Revolving  Credit  Facility  Lender's  proportion  of the
      Subfacility.

(d)   On receipt  of demand by the  Facility  Agent in  accordance  with  Clause
      28.1(b) (Lenders'  Indemnity),  each such Revolving Credit Facility Lender
      shall pay to the Facility Agent (for the account of the Subfacility  Bank)
      its proportion of the relevant Subfacility.

28.3  OBLIGATIONS NOT DISCHARGED

      Neither the obligations of each Term Facility B Lender and/or Subfacility
      Bank in this Clause 28 nor the rights, powers and remedies conferred upon
      any Fronting Bank, Issuing Bank and/or Subfacility Bank by this Agreement
      or by law shall be discharged, impaired or otherwise affected by:

      (a)    the winding-up,  dissolution,  administration or re-organisation of
             the relevant Fronting Bank,  Issuing Bank and/or  Subfacility Bank,
             any  Borrower  or any  other  person or any  change in the  status,
             function, control or ownership of any of them;

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      (b)    any of the obligations of the relevant Fronting Bank,  Issuing Bank
             and/or  Subfacility  Bank,  any  Borrower or any other person under
             this  Agreement,  under the Letter of Credit,  any  Subfacility  or
             under  any  other  security  taken  in  respect  of any  Borrower's
             obligations  under this  Agreement or otherwise in connection  with
             the Letter of Credit and/or any Subfacility, respectively, being or
             becoming  illegal,  invalid,  unenforceable  or  ineffective in any
             respect;

      (c)    time or other  indulgence  being granted or agreed to be granted to
             the relevant  Fronting Bank,  Subfacility Bank, any Borrower or any
             other  person in  respect of the  obligations  of any of them under
             this Agreement,  under the Letter of Credit and/or any Subfacility,
             respectively,  or under any other  security taken in respect of any
             Borrower's   obligations  under  this  Agreement  or  otherwise  in
             connection  with the  Letter  of  Credit  and/or  any  Subfacility,
             respectively;

      (d)    any  amendment  to, or any  variation,  waiver or  release  of, any
             obligation of the relevant  Fronting  Bank,  Subfacility  Bank, any
             Borrower or any other person under this Agreement, under the Letter
             of Credit and/or any Subfacility,  respectively, or under any other
             security taken in respect of any Borrower's  obligations under this
             Agreement  or  otherwise  in  connection  with the Letter of Credit
             and/or Subfacility, resepctively; and

      (e)    any other act,  event or  omission  which,  but for this Clause 28,
             might operate to discharge,  impair or otherwise  affect any of the
             obligations of each Term Facility B Lender and/or  Revolving Credit
             Facility Lender, respectively,contained in this Agreement or any of
             the rights,  powers or remedies  conferred  upon any Fronting  Bank
             and/or Subfacility Bank by this Agreement or by law.

      The obligations of each Lender contained in this Agreement  shall  be  in
      addition  to  and  independent of every other security which any Fronting
      Bank and/or Subfacility  Bank  may  at  any  time  hold in respect of any
      Borrower's  obligations under this Agreement or otherwise  in  connection
      with any Letter of Credit and/or Subfacility, respectively.

28.4  SETTLEMENT CONDITIONAL

      Any settlement  or  discharge  between  a  Term  Facility  B Lender and a
      Fronting  Bank  shall be conditional upon no security or payment  to  any
      Fronting Bank by  a  Term Facility B Lender or any other person on behalf
      of a Term Facility B Lender   being  avoided  or reduced by virtue of any
      laws relating to bankruptcy, insolvency, liquidation  or  similar laws of
      general application and, if any such security or payment is so avoided or
      reduced,  such  Fronting Bank shall be entitled to recover the  value  or
      amount of such security  or  payment  from  such  Term  Facility B Lender
      subsequently  as  if  such settlement or discharge had not occurred.  The
      same shall apply mutatis  mutandis  in  relation  to  a  Revolving Credit
      Facility Lender and a Subfacility Bank.

28.5  EXERCISE OF RIGHTS

      No Fronting Bank and no Subfacility Bank, respectively, shall  be obliged
      before exercising any of the rights, powers or remedies conferred upon it
      in  respect  of any Term Facility B Lender  and Revolving Credit Facility
      Lender, respectively, by this Agreement or by law:

      (a)    to take any  action or obtain  judgment  in any court  against  any
             Obligor;

      (b)    to make or file any claim or proof in a winding-up  or  dissolution
             of any Obligor; or

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      (c)    to enforce or seek to enforce any other  security  taken in respect
             of any of the obligations of the Obligors under this Agreement.

29.   CONDUCT OF BUSINESS BY THE FINANCE PARTIES

      No provision of this Agreement will:

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

      (b)    oblige  any  Finance  Party  to investigate or claim  any  credit,
             relief, remission or repayment  available  to  it  or  the extent,
             order and manner of any claim; or

      (c)    oblige  any Finance Party to disclose any information relating  to
             its affairs  (tax  or otherwise) or any computations in respect of
             Tax.

30.   SHARING AMONG THE LENDERS

30.1  PAYMENTS TO LENDERS

      If a Lender (a "RECOVERING  LENDER") receives or recovers any amount from
      an Obligor (including by way  of  set-off  in  accordance  with Clause 32
      (Set-off))  other  than in accordance with Clause 31 (Payment  Mechanics)
      and applies that amount  to  a  payment  due  under the Finance Documents
      then:

      (a)    the  Recovering  Lender  shall, within three  (3)  Business  Days,
             notify details of the receipt or recovery to the Facility Agent;

      (b)    the Facility Agent shall determine whether the receipt or recovery
             is in excess of the amount  the  Recovering Lender would have been
             paid had the receipt or recovery been  received  or  made  by  the
             Facility  Agent  and  distributed  in  accordance  with  Clause 31
             (Payment Mechanics), without taking account of any Tax which would
             be  imposed  on  the  Facility  Agent  in relation to the receipt,
             recovery or distribution; and

      (c)    the Recovering Lender shall, within three  (3)  Business  Days  of
             demand  by the Facility Agent, pay to the Facility Agent an amount
             (the "SHARING PAYMENT") equal to such receipt or recovery less any
             amount which  the Facility Agent determines may be retained by the
             Recovering Lender  as  its  share  of  any  payment to be made, in
             accordance with Clause 31.5 (Partial Payments).

30.2  REDISTRIBUTION OF PAYMENTS

      The Facility Agent shall treat the Sharing Payment as if it had been paid
      by  the  relevant Obligor and distribute it between the  Finance  Parties
      (other  than  the  Recovering  Lender)  in  accordance  with  Clause 31.5
      (Partial Payments).

30.3  RECOVERING LENDER'S RIGHTS

(a)   On a distribution by the Facility Agent under Clause 30.2  (Redistribution
      of Payments),  the Finance Parties that have shared in the  redistribution
      shall assign to the  Recovering  Lender their rights to the payments  that
      were redistributed.

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(b)   If and to the extent that the Recovering Lender is not able to rely on its
      rights under paragraph (a) above,  the relevant Obligor shall be liable to
      the  Recovering  Lender for a debt equal to the  Sharing  Payment  that is
      immediately due and payable.

30.4  REVERSAL OF REDISTRIBUTION

      If any part of the Sharing Payment received or recovered  by a Recovering
      Lender becomes repayable and is repaid by that Recovering Lender, then:

      (a)    each  Lender  which  has received a share of the relevant  Sharing
             Payment  pursuant  to  Clause 30.2  (Redistribution  of  Payments)
             shall, upon request of the  Facility  Agent,  pay  to the Facility
             Agent for account of that Recovering Lender an amount equal to its
             share  of  the   Sharing  Payment (together with an amount  as  is
             necessary to reimburse that  Recovering  Lender for its proportion
             of  any  interest  on  the Sharing Payment which  that  Recovering
             Lender is required to pay); and

      (b)    that  Recovering  Lender's  rights  to  take  the  benefit  of  an
             assignment in respect  of any reimbursement shall be cancelled and
             the relevant Obligor will  be liable to the reimbursing Lender for
             the amount so reimbursed.

30.5  EXCEPTIONS

(a)   This  Clause 30 shall not apply to the extent that the  Recovering  Lender
      would not, after making any payment pursuant to this Clause,  have a valid
      and enforceable claim against the relevant Obligor.

(b)   A  Recovering  Lender is not  obliged to share  with any other  Lender any
      amount which the  Recovering  Lender has received or recovered as a result
      of taking legal or arbitration proceedings if:

      (i)    it  notified  the  other  Lenders  of  the  legal  or   arbitration
             proceedings; and

      (ii)   the other Lenders had an  opportunity to participate in those legal
             or arbitration  proceedings but did not do so as soon as reasonably
             practicable  having received notice and did not take separate legal
             or arbitration proceedings.



                                  SECTION 11

                                ADMINISTRATION

31.   PAYMENT MECHANICS

31.1  PAYMENTS TO THE FACILITY AGENT

(a)   On  each  date  on  which an Obligor or a Lender is required  to  make  a
      payment under a Finance  Document,  that  Obligor (subject to Clause 31.9
      (Payments  to the Security Agent)) or that Lender  shall  make  the  same
      available to  the Facility Agent (unless a contrary indication appears in
      a Finance Document)  for  value  on  the due date at the time and in such
      funds specified by the Facility Agent  as being customary at the time for
      settlement  of transactions in the relevant  currency  in  the  place  of
      payment.

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(b)   Payment shall  be  made to such account in the principal financial centre
      of the country of that  currency (or, in relation to Euro, in a principal
      financial centre in a Participating  Member  State  or  London) with such
      bank as the Facility Agent specifies.

31.2  DISTRIBUTIONS BY THE FACILITY AGENT

      Each  payment received by the Facility Agent under the Finance  Documents
      for another  Party  shall,  subject  to  Clause 31.3 (Distributions to an
      Obligor),  Clause 31.4  (Clawback)  and  Clause 31.9   (Payments  to  the
      Security  Agent),  be  made available by the Facility Agent  as  soon  as
      practicable after receipt  to  the  Party  entitled to receive payment in
      accordance with this Agreement (in the case  of a Lender, for the account
      of its Facility Office), to such account as that  Party may notify to the
      Facility  Agent by not less than five (5) Business Days'  notice  with  a
      bank in the  principal  financial  centre of the country of that currency
      (or,  in  relation  to  Euro,  in  a  principal  financial  centre  in  a
      Participating Member State or London).

31.3  DISTRIBUTIONS TO AN OBLIGOR

      Each of the Facility Agent and the Security  Agent  may (with the consent
      of  the  Obligor  or  in accordance with Clause 32 (Set-Off))  apply  any
      amount received by it for that Obligor in or towards payment (on the date
      and in the currency and  funds  of  receipt)  of any amount due from that
      Obligor  under  the Finance Documents or in or towards  purchase  of  any
      amount of any currency to be so applied.

31.4  CLAWBACK

(a)   Where a sum is to  be  paid  to  the Facility Agent or the Security Agent
      under the Finance Documents for another  Party, the Facility Agent or, as
      the case may be, the Security Agent is not  obliged  to  pay  that sum to
      that  other  Party  (or  to  enter  into  or perform any related exchange
      contract) until it has been able to establish to its satisfaction that it
      has actually received that sum.

(b)   If the Facility Agent or the Security Agent  pays  an  amount  to another
      Party and it proves to be the case that it had not actually received that
      amount,  then  the  Party  to  whom  that  amount (or the proceeds of any
      related exchange contract) was paid shall on  demand  refund  the same to
      the  Facility Agent or, as the case may be, the Security Agent,  together
      with interest  on  that  amount  from  the date of payment to the date of
      receipt by the Facility Agent or, as the case may be, the Security Agent,
      calculated by it to reflect its cost of funds.

31.5  PARTIAL PAYMENTS

(a)   If the Facility Agent receives a payment that is insufficient to discharge
      all the  amounts  then due and  payable  by an Obligor  under the  Finance
      Documents,  the  Facility  Agent  shall  apply that  payment  towards  the
      obligations  of that Obligor under the Finance  Documents in the following
      order:

      (i)    FIRST, in or towards payment pro rata of any unpaid fees, costs and
             expenses  of  the  Facility   Agent,   the  Security   Agent,   the
             Documentation  Agent  or the  Mandated  Lead  Arrangers  under  the
             Finance Documents;

      (ii)   SECONDLY,  in or towards  payment of any demand  made by an Issuing
             Bank or Fronting Bank in respect of a payment made or to be made by
             it under the Letter of Credit due but unpaid;


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      (iii)  THIRDLY,  in or towards payment pro rata of any accrued interest or
             commission due or Fronting Fees but unpaid under this Agreement;

      (iv)   FOURTHLY,  in or towards payment pro rata of any  Outstandings  due
             but unpaid under this Agreement; and

      (v)    FIFTHLY,  in or towards  payment  pro rata of any other sum due but
             unpaid under the Finance Documents.

(b)   The Facility Agent shall, if so directed by the Majority Lenders, vary the
      order set out in paragraphs (a)(ii) to (iv) above.

(c)   Paragraphs  (a) and (b) above will override any  appropriation  made by an
      Obligor.

31.6  NO SET-OFF BY OBLIGORS

      All payments to be made  by  an Obligor under the Finance Documents shall
      be calculated and be made without  (and  free  and clear of any deduction
      for) set-off or counterclaim, except in respect  of  claims of an Obligor
      which are either undisputed between the relevant Finance  Party  and that
      Obligor or which have been the subject of a final court judgement.

31.7  BUSINESS DAYS

(a)   Any  payment  which is due to be made on a day that is not a Business  Day
      shall be made on the next  Business  Day in the same  calendar  month  (if
      there is one) or the preceding Business Day (if there is not).

(b)   During any  extension  of the due date for payment of any  principal or an
      Unpaid Sum under this  Agreement  interest is payable on the  principal at
      the rate payable on the original due date.

31.8  CURRENCY OF ACCOUNT

(a)   Subject  to  paragraphs  (b) to (f)  below,  the Euro is the  currency  of
      account  and  payment  for any sum due from an Obligor  under any  Finance
      Document.

(b)   A  repayment  of a Loan or Unpaid  Sum or a part of a Loan or  Unpaid  Sum
      shall  be made in the  currency  in  which  that  Loan  or  Unpaid  Sum is
      denominated on its due date.

(c)   Each  payment  in  respect  of the  Letter of Credit  (including  any Cash
      Collateral  in  respect  of the  Letter  of  Credit)  shall be made in the
      currency in Euros.

(d)   Each payment of interest shall be made in the currency in which the sum in
      respect  of which  the  interest  is  payable  was  denominated  when that
      interest accrued.

(e)   Each  payment in respect of costs,  expenses or Taxes shall be made in the
      currency in which the costs, expenses or Taxes are incurred.

(f)   Any amount expressed to be payable in a currency other than Euros shall be
      paid in that other currency.

                                      119

<PAGE>


31.9  PAYMENTS TO THE SECURITY AGENT

      Notwithstanding any other provision of any Finance Document, at  any time
      after  any  of the Transaction Security becomes enforceable, the Security
      Agent may require:

      (a)    any Obligor  to  pay  all  sums  due  from  it  under  any Finance
             Document; or

      (b)    the Facility Agent to pay all sums received or recovered  from any
             Obligor under any Finance Document,

      in  each  case  as  the  Security  Agent  may  direct  for application in
      accordance with the terms of the Finance Documents.

32.   SET-OFF

      A  Finance Party may set off any matured obligation due from  an  Obligor
      under  the  Finance  Documents  (to the extent beneficially owned by that
      Finance Party) against any matured  obligation owed by that Finance Party
      to that Obligor, regardless of the place  of  payment,  booking branch or
      currency  of  either  obligation.   If  the obligations are in  different
      currencies, the Finance Party may convert  either  obligation at a market
      rate of exchange in its usual course of business for  the  purpose of the
      set-off.

33.   NOTICES

33.1  COMMUNICATIONS IN WRITING

      Any  communication  to  be  made under or in connection with the  Finance
      Documents shall be made in writing  and,  unless otherwise stated, may be
      made by fax or letter.

33.2  ADDRESSES

      The address and fax number (and the department  or  officer,  if any, for
      whose  attention the communication is to be made) of each Party  for  any
      communication  or document to be made or delivered under or in connection
      with the Finance Documents is:

      (a)    in the case of the Company, that identified with its name below;

      (b)    in the case  of  each  Lender,  each  Fronting  Bank  or any other
             Obligor,  that  notified  in writing to the Facility Agent  on  or
             prior to the date on which it becomes a Party;

      (c)    in  the case of the Mandated  Lead  Arrangers,  the  Documentation
             Agent,  the Facility Agent and the Security Agent, that identified
             with its name below;

      (d)    in the case  of  any  successor Agent, that notified in writing to
             the  retiring  Agent  on  or  prior  to  the  date  on  which  the
             resignation notice of the retiring Agent takes effect; and

      (e)    in the case of any successor  Security  Agent,  that  notified  in
             writing to the Facility Agent on or prior to the date on which the
             resignation notice of the retiring Security Agent takes effect.

      or  any  substitute  address,  fax number or department or officer as the
      Party may notify to the Facility  Agent (or the Facility Agent may notify
      to the other Parties, if a change is  made  by the Facility Agent) by not
      less than five (5) Business Days' notice.

                                      120

<PAGE>

33.3  DELIVERY

(a)   Any communication or document made or delivered  by one person to another
      under or in connection with the Finance Documents will only be effective:

      (i)  if by way of fax, when received in legible form; or

      (ii)  if by way of letter, when it has been left at  the relevant address
            or five (5) Business Days after being deposited in the post postage
            prepaid in an envelope addressed to it at that address,

      and, if a particular department or officer is specified  as  part  of its
      address  details provided under Clause 33.2 (Addresses), if addressed  to
      that department or officer.

(b)   Any communication  or  document  to  be made or delivered to the Facility
      Agent or the Security Agent will be effective only when actually received
      by it and then only if it is expressly  marked  for  the attention of the
      department  or  officer  identified  with  its  signature below  (or  any
      substitute department or officer as it shall specify for this purpose).

(c)   All  notices  from  or to an Obligor shall be sent through  the  Facility
      Agent.

(d)   Any communication or  document  made  or  delivered  to  the  Company  in
      accordance with this Clause will be deemed to have been made or delivered
      to each of the Obligors.

33.4  NOTIFICATION OF ADDRESS, FAX NUMBER

      Promptly  upon  receipt  of  notification of an address and fax number or
      change of address or fax number  pursuant  to  Clause 33.2 (Addresses) or
      changing its own address or fax number, the Facility  Agent  shall notify
      the other Parties.

33.5  ENGLISH LANGUAGE

(a)   Any notice given under or in connection with any Finance Document must be
      in English.

(b)   All  other  documents  provided  under  or in connection with any Finance
      Document must be:

      (i)    in English; or

      (ii)   if not in English,  and if so  reasonably  required by the Facility
             Agent, accompanied by an English translation and, in this case, the
             English   translation   will  prevail  unless  the  document  is  a
             constitutional, statutory or other official document.

34.   CALCULATIONS AND CERTIFICATES

34.1  ACCOUNTS

      In  any  litigation  or  arbitration  proceedings  arising  out  of or in
      connection  with  a  Finance  Document,  the entries made in the accounts
      maintained by a Finance Party are prima facie  evidence of the matters to
      which they relate.

34.2   CERTIFICATES AND DETERMINATIONS

      Any certification or determination by a Finance Party of a rate or amount
      under any Finance Document and by an Issuing Bank  or  a Fronting Bank as
      to the amount paid out by that


                                      121

<PAGE>


      Issuing Bank or Fronting Bank in respect of the Letter of  Credit  is, in
      the  absence  of  manifest  error,  conclusive evidence of the matters to
      which it relates.

34.3  DAY COUNT CONVENTION

      Any interest, commission or fee accruing  under  a  Finance Document will
      accrue  from  day  to day and is calculated on the basis  of  the  actual
      number of days elapsed  and  a year of 360 days or, in any case where the
      practice in the Relevant Interbank  Market  differs,  in  accordance with
      that market practice.

35.   PARTIAL INVALIDITY

      If,  at  any time, any provision of the Finance Documents is  or  becomes
      illegal, invalid  or  unenforceable  in  any respect under any law of any
      jurisdiction, neither the legality, validity  or  enforceability  of  the
      remaining provisions nor the legality, validity or enforceability of such
      provision  under  the  law  of  any other jurisdiction will in any way be
      affected or impaired.

36.   REMEDIES AND WAIVERS

      No failure to exercise, nor any delay  in  exercising, on the part of any
      Finance  Party,  any right or remedy under the  Finance  Documents  shall
      operate as a waiver,  nor  shall  any  single  or partial exercise of any
      right or remedy prevent any further or other exercise  or the exercise of
      any  other  right  or remedy.  The rights and remedies provided  in  this
      Agreement are cumulative  and  not  exclusive  of  any rights or remedies
      provided by law.

37.   AMENDMENTS AND WAIVERS

37.1  REQUIRED CONSENTS

(a)   Subject  to Clause 37.2 (Exceptions), any term of the  Finance  Documents
      may be amended  or  waived  only with the consent of the Majority Lenders
      and the Obligors and any such  amendment or waiver will be binding on all
      Parties.

(b)   The  Facility Agent may effect, on  behalf  of  any  Finance  Party,  any
      amendment or waiver permitted by this Clause 37.

37.2  EXCEPTIONS

(a)   An amendment  or  waiver that has the effect of changing or which relates
      to:

      (i)   the definition of "MAJORITY LENDERS" in Clause 1.1 (Definitions);

      (ii)  the length of any or all of the Availability Periods;

      (iii) an extension to the date of payment of any amount under the Finance
             Documents;

      (iv)  the currency  in which any payment under any Finance Document is to
             be made;

      (v)   a reduction in  the  Margin,  the Letter of Credit Commission Rate,
             the Guarantee Commission Rate  or  the  amount  of  any payment of
             principal, interest, fees or commission payable;

      (vi)  an increase in Commitment;

                                      122

<PAGE>

      (vii)  a change to the  Borrowers or  Guarantors  other than in accordance
             with Clause 26 (Changes to the Obligors);

      (viii) any  provision  which  expressly  requires  the  consent of all the
             Lenders;

      (ix)   Clause 2.2 (Finance  Parties'  Rights and  Obligations),  Clause 25
             (Changes to the Lenders) or this Clause 37; or

      (x)    a release of Security created pursuant to a Security Document,

      shall not be made without the prior consent of all the Lenders.

(b)   An amendment or waiver that relates to the rights  or  obligations of the
      Facility Agent, the Security Agent or the Mandated Lead Arrangers may not
      be effected without the consent of the Facility Agent, the Security Agent
      or the Mandated Lead Arrangers, as the case may be.

37.3  AMENDMENTS BY THE COMPANY AS AGENT OF THE OBLIGORS

      The Company (acting on behalf of each Obligor) may agree to any amendment
      to or modification of the provisions of any of the Finance  Documents, or
      grant any waiver or consent in relation to any of the Finance  Documents,
      and  the  Obligors  will  be  bound  by any such amendment, modification,
      waiver or consent, except where the Facility  Agent  has received written
      notice  to  the contrary from an Obligor prior to the date  of  any  such
      amendment or modification.

38.   COUNTERPARTS

      Each Finance  Document may be executed in any number of counterparts, and
      this has the same effect as if the signatures on the counterparts were on
      a single copy of the Finance Document.



                                   SECTION 12

                         GOVERNING LAW AND ENFORCEMENT

39.   GOVERNING LAW

      This Agreement is governed by German law.

40.   ENFORCEMENT

40.1  JURISDICTION OF GERMAN COURTS

(a)   The courts of Frankfurt am Main have exclusive jurisdiction to settle any
      dispute arising  out of or in connection with this Agreement (including a
      dispute  regarding   the  existence,  validity  or  termination  of  this
      Agreement) (a "Dispute").

(b)   No Finance Party shall be prevented from taking proceedings relating to a
      Dispute in any other courts  of  competent  jurisdiction.  To  the extent
      allowed  by  law, the Finance Parties may take concurrent proceedings  in
      any number of jurisdictions.

                                      123

<PAGE>


40.2  SERVICE OF PROCESS

      Without prejudice to any other mode of service allowed under any relevant
      law, each Obligor  (other  than  an  Obligor  incorporated in the Federal
      Republic of Germany):

      (a)    irrevocably  appoints  the Company as its  agent  for  service  of
             process in relation to any proceedings before the German courts in
             connection with any Finance Document; and

      (b)    agrees that failure by a  process  agent  to  notify  the relevant
             Obligor  of  the  process  will  not  invalidate  the  proceedings
             concerned.

40.3  WAIVER OF IMMUNITY

      To the extent that any of the Obligors 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  claimed), such
      Obligor  irrevocably  agrees  not  to  claim and irrevocably waives  such
      immunity to the full extent permitted by the laws of such jurisdiction.

40.4  CONFIRMATIONS PURSUANT TO SECTION 8 MONEY LAUNDERING ACT

      Each Borrower expressly confirms towards  each  Finance  Party  that  all
      funds  made  available to it under this Agreement have been drawn for the
      its own account,  and that it is the economic beneficiary (wirtschaftlich
      Begunstigter) within  the  meaning  of  Section 8 Money Laundering Act
      (Geldwaschegesetz).

      THIS AGREEMENT HAS BEEN ENTERED INTO ON THE  DATE STATED AT THE BEGINNING
      OF THIS AGREEMENT.


                                      124

<PAGE>


                                  SCHEDULE 1



                             THE ORIGINAL PARTIES

                                    PART I
                             THE ORIGINAL OBLIGORS


<TABLE>
<CAPTION>
NAME OF ORIGINAL BORROWER                  JURISDICTION OF INCORPORATION AND REGISTRATION NUMBER (OR EQUIVALENT, IF ANY)
-------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>
SGL Carbon Aktiengesellschaft              Germany, registered with the local court Wiesbaden under HRB 9448
-------------------------------------------------------------------------------------------------------------------------
SGL Carbon Beteiligung GmbH, Wiesbaden     Germany, registered with the local court Wiesbaden under HRB 11330
-------------------------------------------------------------------------------------------------------------------------
SGL ACOTEC GmbH, Siershahn                 Germany, registered with the local court Montabaur under HRB 6481
-------------------------------------------------------------------------------------------------------------------------
SGL TECHNOLOGIES GmbH, Meitingen           Germany, registered with the local court Augsburg under HRB 18142
-------------------------------------------------------------------------------------------------------------------------
SGL Brakes GmbH, Meitingen                 Germany, registered with the local court Augsburg under HRB 18592
-------------------------------------------------------------------------------------------------------------------------
SGL CARBON S.p.A, Milan                    Italy, [          ]
-------------------------------------------------------------------------------------------------------------------------
SGL CARBON S.A., La Coruna                 Spain, [          ]
-------------------------------------------------------------------------------------------------------------------------
SGL CARBON LLC, Charlotte, North Carolina  USA, [          ]
-------------------------------------------------------------------------------------------------------------------------
</TABLE>




<TABLE>
<CAPTION>
NAME OF ORIGINAL GUARANTOR                  JURISDICTION OF INCORPORATION AND REGISTRATION NUMBER (OR EQUIVALENT, IF ANY)
-------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>
SGL Carbon Aktiengesellschaft               Germany, registered with the local court Wiesbaden under HRB 9448
-------------------------------------------------------------------------------------------------------------------------
SGL Carbon GmbH                             Germany, registered with the local court Augsburg under HRB 16474
-------------------------------------------------------------------------------------------------------------------------
SGL Carbon Beteiligung GmbH, Wiesbaden      Germany, registered with the local court Wiesbaden under HRB 11330
-------------------------------------------------------------------------------------------------------------------------
SGL ACOTEC GmbH, Siershahn                  Germany, registered with the local court Montabaur under HRB 6481
-------------------------------------------------------------------------------------------------------------------------
KCH Beteiligungs GmbH, Siershahn            Germany, registered with the local court Montabaur under HRB 6169
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      125

<PAGE>


<TABLE>
<CAPTION>
<S>                                         <C>
SGL TECHNOLOGIES GmbH, Meitingen            Germany, registered with the local court Augsburg under HRB 18142
-------------------------------------------------------------------------------------------------------------------------
SGL Brakes GmbH, Meitingen                  Germany, registered with the local court Augsburg under HRB 18592
-------------------------------------------------------------------------------------------------------------------------
SGL CARBON S.p.A, Milan                     Italy, [          ]
-------------------------------------------------------------------------------------------------------------------------
SGL CARBON S.A., La Coruna                  Spain, [          ]
-------------------------------------------------------------------------------------------------------------------------
SGL CARBON LLC, Charlotte, North Carolina   USA, [          ]
-------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      126

<PAGE>


                                    PART II
                             THE ORIGINAL LENDERS



<TABLE>
<CAPTION>
NAME OF ORIGINAL LENDER          TERM FACILITY A      TERM FACILITY B      TERM FACILITY C      REVOLVING CREDIT FACILITY
                                   COMMITMENT           COMMITMENT           COMMITMENT                COMMITMENT
-------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                   <C>                 <C>                        <C>
MANDATED LEAD ARRANGERS
-------------------------------------------------------------------------------------------------------------------------
DEUTSCHE BANK LUXEMBOURG S.A.     e 60,358,742         e 11,281,532              e 0                  e 17,329,226
-------------------------------------------------------------------------------------------------------------------------
DRESDNER BANK AG                  e 60,358,742         e 11,281,532              e 0                  e 17,329,226
-------------------------------------------------------------------------------------------------------------------------
ARRANGERS
-------------------------------------------------------------------------------------------------------------------------
BAYERISCHE LANDESBANK             e 45,842,105         e 11,631,579              e 0                   e 7,526,316
-------------------------------------------------------------------------------------------------------------------------
CO-ARRANGERS
-------------------------------------------------------------------------------------------------------------------------
COMMERZBANK AKTIENGESELL-         e 28,210,526          e 7,157,895              e 0                   e 4,631,579
SCHAFT
-------------------------------------------------------------------------------------------------------------------------
WESTLB AG                         e 28,210,526          e 7,157,895              e 0                   e 4,631,579
-------------------------------------------------------------------------------------------------------------------------
SENIOR LEAD MANAGER
-------------------------------------------------------------------------------------------------------------------------
DZ-BANK                           e 21,635,358          5,489,568               e 0                   e 3,552,074
-------------------------------------------------------------------------------------------------------------------------
BAYERISCHE HYPO- UND                   e 0             e 31,000,000              e 0                       e 0
VEREINSBANK AG
-------------------------------------------------------------------------------------------------------------------------
IKB DEUTSCHE INDUSTRIEBANK AG     e 29,784,000              e 0                  e 0                       e 0
-------------------------------------------------------------------------------------------------------------------------
KREDITANSTALT FUR                 e 10,000,000              e 0             e 20,000,000                    e
WIEDERAUFBAU
-------------------------------------------------------------------------------------------------------------------------
MANAGERS
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      127

<PAGE>

<TABLE>
<CAPTION>
NAME OF ORIGINAL LENDER          TERM FACILITY A      TERM FACILITY B      TERM FACILITY C      REVOLVING CREDIT FACILITY
                                   COMMITMENT           COMMITMENT           COMMITMENT                COMMITMENT
-------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                   <C>                 <C>                        <C>
LANDESBANK SACHSEN                     e 10,000,000         e 0              e 0                         e 0
-------------------------------------------------------------------------------------------------------------------------
MHB MITTELEUROPAISCHE HANDELSBANK AG   e 10,000,000         e 0              e 0                         e 0
-------------------------------------------------------------------------------------------------------------------------
NASSAUISCHE SPARKASSE                  e 10,000,000         e 0              e 0                         e 0
-------------------------------------------------------------------------------------------------------------------------
PARTICIPANTS
-------------------------------------------------------------------------------------------------------------------------
KBC                                     e 5,000,000         e 0              e 0                         e 0
-------------------------------------------------------------------------------------------------------------------------
KREISSPARKASSE AUGSBURG                 e 3,000,000         e 0              e 0                         e 0
-------------------------------------------------------------------------------------------------------------------------
LFA FORDERBANK BAYERN                   e 7,500,000         e 0              e 0                         e 0
-------------------------------------------------------------------------------------------------------------------------
RLB OBEROSTERREICH                      e 5,100,000         e 0              e 0                         e 0
-------------------------------------------------------------------------------------------------------------------------
TOTAL                                  e 335,000,000    e 85,000,000    e 20,000,000                  e 55,000,000
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      128

<PAGE>


                                  SCHEDULE 2


                CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT

                                    PART I
                  CONDITIONS PRECEDENT TO INITIAL UTILISATION

1.    CORPORATE DOCUMENTS

(a)   A copy of the  constitutional  documents of each  Original  Obligor in the
      form required by the Facility Agent (i.e. in relation to (1) USA, Articles
      of   Association;   By-Laws;   Good   Standing   Certificate;   Incumbency
      Certificate;  (2)  ITALY,  Articles  of  Association  (atto  costitutivo);
      by-laws (statuto in vigore);  (3) SPAIN, Deed of Incorporation;  certified
      commercial register excerpt), including in relation to a German Obligor an
      up-to-date  officially certified commercial register extract (beglaubigter
      Handelsregisterauszug) and the articles of association (Satzung).

(b)   A copy of a resolution of the  shareholders  (or the  equivalent  thereof,
      i.e. in relation to (1) USA, a Board of Directors' Resolution;  (2) ITALY,
      [Depends on the By-Laws of the company,  information  to be provided,  (3)
      SPAIN, Minutes of the General  Shareholders' Sole Shareholder Decision and
      Board of Directors Meeting) of each Original Obligor:

      (i)   approving the  terms  of, and the transactions contemplated by, the
            Finance Documents to which  it  is  a  party  and resolving that it
            execute the Finance Documents to which it is a party;

      (ii)  authorising  a specified person or persons to execute  the  Finance
            Documents to which it is a party on its behalf; and

      (iii) authorising a  specified  person or persons, on its behalf, to sign
            and/or despatch all documents  and notices (including, if relevant,
            any Utilisation Request and Selection  Notice)  to be signed and/or
            despatched by it under or in connection with the  Finance Documents
            to which it is a party.

(c)   A specimen of the signature of each person authorised by  the  resolution
      referred to in paragraph (b) above.

(d)   A  certificate  of  the Company (signed by a director or other authorised
      officer) confirming that  borrowing  or guaranteeing, as appropriate, the
      Total Commitments would not cause a violation  of  any  contract  of  any
      Original Obligor.

(e)   A  copy of the constitutional documents of each member of the Group whose
      shares  are  subject  to  Security  under  any  of the Security Documents
      referred to in Part I para. 3 (a) in the form required  by  the  Facility
      Agent.

(f)   The  Group  Structure  Chart  showing  all  the Intra-Group Loans and all
      members of the Group.

(g)   A  certificate  of  an  authorised  signatory  of each  Original  Obligor
      certifying that to the best of its knowledge each  copy document relating
      to it specified in this paragraph 1 is correct, complete and has not been
      amended as at a date no earlier than the date of this Agreement.

                                      129

<PAGE>


2.    Finance Documents

      Each of the  following  original  documents  duly  executed  by all of the
      parties thereto:

(a)   this Agreement; and

(b)   each Fee Letter.

3.    TRANSACTION SECURITY DOCUMENTS

      Each of the following documents in form and substance satisfactory to the
      Security Agent duly executed by all the parties thereto:

      (a)    a first  ranking  pledge  over the shares of each  German  Material
             Subsidiary except for SGL PanTrac GmbH;

      (b)    a first ranking mortgage/land charge over the real property of

            - SGL CARBON AG, except for the real property situated in Bonn, Bad
            Godesberg  and registered with the local court Bonn, land  register
            of Lannesdorf,  file  (Blatt)  No.  01017  and  0409 (which will be
            encumbered pursuant Schedule 2, Part II)  (on the  Closing Date all
            necessary  steps  will  be  taken  to  effect registration  in  the
            relevant German land register/s, including the joint instruction of
            a  notary to effect filing as soon as possible  with  the  relevant
            German  land  register/s, including execution of a security purpose
            agreement and a  submission  to immediate foreclosure (Unterwerfung
            unter die sofortige Zwangsvollstrechung) in a partial amount of the
            registered  amount  or  in the whole  registered  amount  upon  the
            Facility Agent's reasonable request);

      (c)    a first ranking  charge/security  assignment over the equipment and
             inventory of

             (i)   SGL CARBON GmbH, Meitingen, Germany,

             (ii)  SGL ACOTEC GmbH, Siershahn, Germany;

             (iii) SGL TECHNOLOGIES GmbH, Meitingen, Germany; and

             (iv)   SGL Brakes GmbH, Meitingen, Germany;

      (d)    a first ranking  charge/assignment over all receivables,  including
             intercompany receivables, of

             (i)   SGL CARBON AG;

             (ii)  SGL CARBON GmbH, Meitingen, Germany;

             (iii) SGL CARBON Beteiligung GmbH, Wiesbaden, Germany;

             (iv)  SGL ACOTEC GmbH, Siershahn, Germany;

             (v)   KCH Beteiligungs GmbH, Siershahn, Germany;

             (vi)  SGL TECHNOLOGIES GmbH, Meitingen, Germany; and



                                      130

<PAGE>

            (vii)  SGL Brakes GmbH, Meitingen, Germany;

      (e)    a pledge of/charge over all bank accounts of

             (i)   SGL CARBON AG;

             (ii)  SGL CARBON GmbH, Meitingen, Germany;

             (iii) SGL CARBON Beteiligung GmbH, Wiesbaden, Germany;

             (iv)  SGL ACOTEC GmbH, Siershahn, Germany,

             (v)   KCH Beteiligungs GmbH, Siershahn, Germany;

             (vi)  SGL TECHNOLOGIES GmbH, Meitingen, Germany; and

             (vii) SGL Brakes GmbH, Meitingen, Germany;

      (f)    an assignment of/charge over the Intellectual Property Rights of

             (i)   SGL CARBON AG;

             (ii)  SGL CARBON GmbH, Meitingen, Germany;

             (iii) SGL CARBON Beteiligung GmbH, Wiesbaden, Germany;

             (iv)  SGL ACOTEC GmbH, Siershahn, Germany;

             (v)   KCH Beteiligungs GmbH, Siershahn, Germany;

             (vi)  SGL TECHNOLOGIES GmbH, Meitingen, Germany; and

             (vii) SGL Brakes GmbH, Meitingen, Germany;

      (g)    the Security Trust Agreement.

4.    ACCOUNTS AND REPORTS

      (a)The Base Financial Statements.

      (b)The Group Structure Chart.

      (c)The Information Memorandum.

5.    LEGAL OPINIONS

(a)   Legal  opinions  of  (i) Shearman & Sterling, Germany,  counsels  to  the
      Company  in  Germany,  (ii)   Parker,  Poe,  Adams  &  Bernstein  L.L.P.,
      Charlotte,  North  Carolina/USA,   US   counsels,   (iii)  Bonelli  Erede
      Pappalardo,  Studio  Legale, Milano, Italy, Italian counsels  and,  Uria,
      Spain, Spanish counsels, addressed to the Secured Parties confirming that
      the Company and the other  members  of  the  Group are duly organised and
      validly  existing and confirming the capacity and  authorisation  of  the
      Company and  the  other  members  of  the Group to enter into the Finance
      Documents in form and substance satisfactory to the Facility Agent.


                                      131
<PAGE>


(b)   A legal opinion of Shearman & Sterling,  USA,  US  legal  advisers to the
      Company, addressed to the Secured Parties and in the form of Schedule 18.

(c)   A  legal  opinion of Baker & McKenzie, legal advisers in Germany  to  the
      Mandated Lead  Arrangers, the Documentation Agent, the Security Agent and
      the Facility Agent  in  the Federal Republic of Germany, substantially in
      the  form distributed to the  Original  Lenders  prior  to  signing  this
      Agreement.

6.    OTHER DOCUMENTS AND EVIDENCE

(a)   Evidence  that  the  fees,  costs  and expenses then due from the Company
      pursuant to Clause 13 (Fees) and Clause 18 (Costs and Expenses) have been
      paid or will be paid by the first Utilisation Date.

(b)   Evidence that the Minimum Guarantor  Coverage  pursuant  to  Clause  22.5
      (Minimum  Guarantor  Coverage)  amounts  to at least eighty-five (85) per
      cent. of the Consolidated EBITDA and/or turnover of the Group.

(c)   If an Original Obligor is incorporated in  a  jurisdiction other than the
      Federal Republic of Germany, evidence that the process agent specified in
      Clause 40.2 (Service of Process) has accepted its appointment in relation
      to that Original Obligor.

                                      132


<PAGE>


                                    PART II

                 CONDITIONS SUBSEQUENT TO INITIAL UTILISATION

      The Company shall ensure that no later than three  (3)  Months  after the
      date of this Agreement, all of the documents and other evidence listed in
      this  Part  II  of  Schedule  2  (Conditions  Subsequent  and  Conditions
      Subsequent)  shall  be delivered to the Facility Agent, each in form  and
      substance satisfactory to the Security Agent:

      (1)   evidence of the  registration  in  the  land register of all German
            mortgages  relating to Transaction Security  and  a  first  ranking
            mortgage/land  charge  over  the  real  property  of  SGL CARBON AG
            situated in Bonn, Bad Godesberg and registered with the local court
            Bonn, land register of Lannesdorf, file (Blatt) No. 01017 and 0409,
            in  respect  of which all necessary steps will have been  taken  to
            effect  registration   in  the  relevant  German  land  register/s,
            including the joint instruction  of  a  notary  to effect filing as
            soon  as  possible  with  the  relevant German land register/s  and
            including a submission to immediate foreclosure (Unterwerfung unter
            die sofortige Zwangsvollstrechung)  in  a  partial  amount  of  the
            registered  amount  or  in  the  whole  registered  amount upon the
            Facility Agent's reasonable request; and

      (2)   each of the  following  documents  duly  executed by all the parties
            thereto:

      (a)   a  first ranking pledge over the shares of each non-German Material
            Subsidiary except for  SGL Carbon S.A., Nowy Sacz, Poland;

      (b)   a first ranking mortgage/land charge over the real property of:

            (i)   SGL CARBON S.p.A., Milan, Italy;

            (ii)  SGL CARBON LLC, Charlotte, U.S.A.; and

            (iii) SGL TECHNIC, Inc., U.S.A.;

      (c)    a first ranking charge/security assignment over the equipment  and
             inventory of

            (i)   SGL CARBON S.p.A., Milan, Italy;

            (ii)  SGL CARBON LLC, Charlotte, U.S.A.; and

            (iii) SGL TECHNIC, Inc., Valencia, U.S.A.;

      (d)   a first  ranking  charge/assignment over all receivables, including
            intercompany receivables, of

            (i)   RADION Finanziaria S.p.A., Milan, Italy;

            (ii)  SGL CARBON S.p.A., Milan, Italy,

            (iii) SGL CARBON LLC, Charlotte, U.S.A.;

            (iv)  SGL TECHNIC, Inc., Valencia, U.S.A.; and

            (v)   SGL HITCO ACQUISITION Corp., Charlotte, U.S.A.;

                                      133

<PAGE>


      (e)   a pledge of/charge over  all bank accounts of

            (i)   RADION Finanziaria S.p.A., Milan, Italy,

            (ii)  SGL CARBON S.p.A., Milan, Italy;

            (iii) SGL CARBON LLC, Charlotte, U.S.A.; and

            (vi)  SGL TECHNIC, Inc., Valencia, U.S.A..

      (f)   an assignment of/charge over the Intellectual Property Rights of

            (i)   RADION Finanziaria S.p.A., Milan, Italy;

            (ii)  SGL CARBON S.p.A., Milan, Italy;

            (iii) SGL CARBON LLC, Charlotte, U.S.A.;

            (iv)  SGL TECHNIC, Inc., Valencia, U.S.A.; and

            (v)   SGL HITCO ACQUISITION Corp., Charlotte, U.S.A.

      (3)   A copy of the constitutional  documents of each member of the Group
            whose shares are subject to Security  under  any  of  the  Security
            Documents referred to in this Part II of Schedule 2 para. 2  in the
            form required by the Facility Agent.

                                      134


<PAGE>

                                   PART III

CONDITIONS PRECEDENT REQUIRED TO BE DELIVERED BY A PROPOSED ADDITIONAL OBLIGOR

1.    An Accession Letter, duly executed by the proposed Additional Obligor and
      the  Company  (and  subject  to  appropriate Guarantee limitation wording
      relating  to  the  respective  Additional   Obligor   in  case  of  legal
      restrictions and potential officer's liability).

2.    A copy of the constitutional documents of the proposed Additional Obligor
      in the form reasonably required by the Facility Agent.

3.    A copy of a resolution of the shareholders and/or board  of directors (or
      the equivalent thereof) of the proposed Additional Obligor:

      (a)    approving the terms of, and the transactions contemplated  by, the
             Accession  Letter and the Finance Documents and resolving that  it
             execute the Accession Letter;

      (b)    authorising a specified person or persons to execute the Accession
             Letter on its behalf; and

      (c)    authorising  a specified person or persons, on its behalf, to sign
             and/or despatch  all  other  documents  and notices (including, in
             relation  to  a  proposed  Additional  Borrower,  any  Utilisation
             Request or Selection Notice) to be signed  and/or despatched by it
             under or in connection with the Finance Documents.

4.    A specimen of the signature of each person authorised  by  the resolution
      referred to in paragraph 3 above.

5.    Where  the  Lenders  determine  such to be either necessary or desirable,
      either  in place of or in addition  to  the  resolution  referred  to  in
      paragraph  3  above,  a  certificate  or extract from a public commercial
      registry or equivalent evidence setting  out  the names and signatures of
      the persons authorised to execute the Accession  Letter  on behalf of the
      proposed Additional Obligor and to sign and/or despatch all documents and
      notices  (including,  if relevant, any Utilisation Request and  Selection
      Notice) to be signed and/or  despatched by it under or in connection with
      the Finance Documents.

6.    A certificate of the proposed Additional Obligor (signed by a director or
      other authorised officer) confirming  that  borrowing or guaranteeing, as
      appropriate,  the  Total  Commitments  would  not  cause  any  borrowing,
      guaranteeing or similar limit binding on it to be exceeded.

7.    A  certificate  of  an  authorised signatory of the  proposed  Additional
      Obligor certifying that each  copy  document  listed  in this Part III of
      Schedule 2 is correct, complete and in full force and effect as at a date
      no earlier than the date of the Accession Letter.

8.    A  copy of any other Authorisation or other document which  the  Facility
      Agent considers to be necessary or desirable in connection with the entry
      into  and  performance  of the transactions contemplated by the Accession
      Letter or for the validity and enforceability of any Finance Document.

9.    If available, the latest  audited  financial  statements  of the proposed
      Additional Obligor.

10.   A legal opinion of Baker & McKenzie, legal advisers to the  Mandated Lead
      Arrangers,  the  Security  Agent  and  the  Facility Agent in the Federal
      Republic of Germany.

                                      135

<PAGE>


11.   A legal opinion satisfactory to the Lenders of  the legal advisers to the
      Company in the jurisdiction in which the proposed  Additional  Obligor is
      incorporated  opining  on  the  due organisation and valid existence  and
      confirming the capacity and authorisation  of  the  Additional Obligor to
      enter into the Finance Documents.

12.   If  the  proposed  Additional Obligor is incorporated in  a  jurisdiction
      other than the Federal  Republic  of  Germany,  evidence that the process
      agent specified in Clause 40.2 (Service of Process),  if  not an Obligor,
      has  accepted  its  appointment  in  relation  to the proposed Additional
      Obligor.

13.   Accession to the Security Trust Agreement.


                                      136

<PAGE>


                                  SCHEDULE 3


                                   REQUESTS

                                    PART I
                              UTILISATION REQUEST



From: [name of relevant Borrower]

To:   Deutsche Bank Luxembourg S.A.

Dated:

Dear Sirs

      SGL CARBON AKTIENGESELLSCHAFT - e 495,000,000 FACILITIES AGREEMENT
         DATED [                   ] 2002 (THE "FACILITIES AGREEMENT")

1.    [We wish to borrow a Loan on the following terms:]  /  [We  wish [name of
      Issuing  Bank  or  Fronting  Bank]  to  issue  the [Letter of Credit]  as
      follows:]

      Proposed Utilisation Date:      [           ]  (or,  if  that  is  not  a
                                      Business Day, the next Business Day)

      Facility to be utilised:        [Term Facility A]/[Term Facility B]/[Term
                                      Facility C]/[Revolving Credit Facility]

      Currency of [Loan]/[Letter of Credit]:[     ]

      Amount:                         [     ]  or,  if  less,   the  [Available
                                      Facility] [amount in such currency  which
                                      will  reduce  the  Available  Facility to
                                      zero]

      Interest Period:                [           ]

      [Expiry Date:]                  [           ]

      [Issuing Bank/Fronting Bank:]   [           ]

2.    We confirm on our own behalf and on behalf of any other Obligor that each
      condition specified in Clause 4.2 (Further Conditions Precedent)  of  the
      Facilities  Agreement  is  satisfied  on  the  date  of  this Utilisation
      Request.  We confirm that the [Loan]/[Letter of Credit] [is]/[are]  to be
      applied  for the following purpose: [purpose permitted pursuant to Clause
      3 (Purpose) of the Facilities Agreement to be specified].

3.    [The proceeds  of  this  Loan  should  be  credited to [account].] / [The
      Letter of Credit should be issued in favour  of  [name of beneficiary] in
      the  form  attached  and  delivered  to  the  recipient  at  [address  of
      beneficiary.]

4.    This Utilisation Request is irrevocable.


                                      137

<PAGE>


      Yours faithfully

                     .....................................

                           authorised signatory for
                          [name of relevant Borrower]



      Confirmed by:

                     .....................................

                           authorised signatory for
                         SGL CARBON AKTIENGESELLSCHAFT


                                      138

<PAGE>

                                    PART II

              SELECTION NOTICE APPLICABLE TO A TERM LOAN FACILITY

From: [name of relevant Borrower]

To:   Deutsche Bank Luxembourg S.A.

Dated:

Dear Sirs

      SGL CARBON AKTIENGESELLSCHAFT - e 495,000,000 FACILITIES AGREEMENT
             DATED [           ] 2002 (THE "FACILITIES AGREEMENT")

1.    We  refer  to  the  following  Term Facility A Loan[s] in Euros  with  an
      Interest Period ending on [               ].

2.    [We request that the above Term  Facility  A  Loan[s]  be  divided into [
      ] Term Facility A Loans with the following amounts and Interest Periods:]

                                      or

      [We request that the next Interest Period for the above Term  Facility  A
      Loan[s] is [      ]].

3.    We confirm on our own behalf and on behalf of any other Obligor that each
      condition  specified  in Clause 4.2 (Further Conditions Precedent) of the
      Facilities Agreement is  satisfied  on the date of this Selection Notice.
      We confirm that the Term Facility A Loan[s]  [is]/[are] to be applied for
      the following purpose: [purpose permitted pursuant  to Clause 3 (Purpose)
      of the Facilities Agreement to be specified].

4.    This Selection Notice is irrevocable.

                               Yours faithfully

                     .....................................

                           authorised signatory for
                          [name of relevant Borrower]

      Confirmed by:

                     .....................................

                           authorised signatory for
                         SGL CARBON AKTIENGESELLSCHAFT


                                      139


<PAGE>


                                  SCHEDULE 4


                            MANDATORY COST FORMULA

1.    The  Mandatory  Cost  is an addition to the interest rate  to  compensate
      Lenders for the cost of  compliance  with  (a)  the  requirements  of the
      Financial  Services Authority (or any other authority which replaces  all
      or any of its  functions) or (b) the requirements of the European Central
      Bank.

2.    On the first day  of  each  Interest  Period  (or  as  soon  as  possible
      thereafter)  the Facility Agent shall calculate, as a percentage rate,  a
      rate (the "ADDITIONAL COST RATE") for each Lender, in accordance with the
      paragraphs set  out  below.  The Mandatory Cost will be calculated by the
      Facility Agent as a weighted  average  of  the  Lenders'  Additional Cost
      Rates  (weighted  in proportion to the percentage participation  of  each
      Lender in the relevant  Loan)  and will be expressed as a percentage rate
      per annum.

3.    The Additional Cost Rate for any Lender lending from a Facility Office in
      a Participating Member State will  be  the  percentage  notified  by that
      Lender  to  the  Facility Agent as the cost of complying with the minimum
      reserve requirements of the European Central Bank.

4.    The Additional Cost Rate for any Lender lending from a Facility Office in
      the United Kingdom will be calculated by the Facility Agent as follows:


           Ex0.01
           ------
             300   per cent. per annum.
Where:

      E      is the rate  of  charge  payable  by  that Lender to the Financial
             Services Authority pursuant to the Fees Regulations (but, for this
             purpose, ignoring any minimum fee required  pursuant  to  the Fees
             Regulations) and expressed in pounds per {pound-sterling}1,000,000
             of the Fee Base of that Lender.

5.    For the purposes of this Schedule:

      (a)    "FEES   REGULATIONS"   means   the   Banking   Supervision  (Fees)
             Regulations  1999 or such other law or regulation  as  may  be  in
             force from time  to  time  in  respect  of the payment of fees for
             banking supervision; and

      (b)    "FEE BASE" has the meaning given to it, and  will be calculated in
             accordance with, the Fees Regulations.

6.    Each Lender shall supply any information required by  the  Facility Agent
      for the purpose of calculating its Additional Cost Rate.  In  particular,
      but   without   limitation,   each  Lender  shall  supply  the  following
      information in writing on or prior  to  the  date  on  which it becomes a
      Lender:

      (a)   its  jurisdiction  of  incorporation  and  the  jurisdiction  of its
            Facility Office; and

      (b)    any  other information that  the  Facility  Agent  may  reasonably
             require for such purpose.


                                      140

<PAGE>

      Each Lender shall  promptly  notify  the Facility Agent in writing of any
      change to the information provided by it pursuant to this paragraph.

7.    The percentages or rates of charge of  each  Lender  for the purpose of E
      above  shall  be  determined  by  the  Facility  Agent  based   upon  the
      information  supplied  to  it  pursuant  to  paragraph 6 above and on the
      assumption  that,  unless a Lender notifies the  Facility  Agent  to  the
      contrary, each Lender's  obligations  in relation to cash ratio deposits,
      Special Deposits and the Fees Regulations  are  the  same  as  those of a
      typical  bank  from  its  jurisdiction  of  incorporation with a Facility
      Office in the same jurisdiction as its Facility Office.

8.    The  Facility  Agent  shall  have  no liability to  any  person  if  such
      determination results in an Additional  Cost  Rate  which  over  or under
      compensates  any  Lender  and  shall  be  entitled  to  assume  that  the
      information  provided  by any Lender pursuant to paragraphs 3 and 6 above
      is true and correct in all respects.

9.    The Facility Agent shall  distribute the additional amounts received as a
      result  of  the Mandatory Cost  to  the  Lenders  on  the  basis  of  the
      Additional Cost Rate for each Lender based on the information provided by
      each Lender pursuant to paragraphs 3 and 6 above.

10.   Any determination  by  the  Facility  Agent  pursuant to this Schedule in
      relation to a formula, the Mandatory Cost, an Additional Cost Rate or any
      amount payable to a Lender shall, in the absence  of  manifest  error, be
      conclusive and binding on all Parties.

11.   The  Facility  Agent  may from time to time, after consultation with  the
      Company  and  the Lenders,  determine  and  notify  to  all  Parties  any
      amendments which  are  required  to  be made to this Schedule in order to
      comply with any change in law, regulation  or  any requirements from time
      to  time  imposed  by the Financial Services Authority  or  the  European
      Central Bank (or, in  any case, any other authority which replaces all or
      any of its functions) and any such determination shall, in the absence of
      manifest error, be conclusive and binding on all Parties.

                                      141

<PAGE>

                                  SCHEDULE 5


                         FORM OF TRANSFER CERTIFICATES



To:   Deutsche Luxembourg S.A. as Facility Agent

From: [The Existing Lender] (the  "EXISTING  LENDER") and [The New Lender] (the
"NEW LENDER")

Dated:

  SGL CARBON AKTIENGESELLSCHAFT - e 495,000,000 FACILITIES AGREEMENT DATED [
  ] 2002 (THE "FACILITIES AGREEMENT") AND SALE AND PURCHASE AGREEMENT DATED [
                           ] (THE "SALE AGREEMENT")

1.    We refer to Clause 25.5 (Procedure for Transfer):

      The Existing Lender and the New Lender agree  to  the Existing Lender and
      the New Lender assignning and transferring  all or  part  of the Existing
      Lender's  Commitment  referred  to  in  the Schedule and all its  related
      rights  and obligations under the Facility  Agreement  and  the  Security
      Trust Agreement in accordance with Clause 25.5 (Procedure for Transfer).

      The New Lender  agrees  to the terms and conditions of the Sale Agreement
      and the Terms and Conditions attached hereto.

      The proposed Transfer Date is [             ].

      The Facility Office and address,  fax  number  and  attention details for
      notices of the New Lender for the purposes of Clause 33.2 (Addresses) are
      set out in the Schedule.

2.    The  New Lender expressly acknowledges the limitations  on  the  Existing
      Lender's obligations set out in Clause 25.2(b).

3.    This Transfer Certificate is governed by German law.



                         By:

                            _______________________



                            _______________________


                                      142

<PAGE>


                                 THE SCHEDULE

                       TRANSFER AND ASSUMPTION AGREEMENT

              COMMITMENT/RIGHTS AND OBLIGATIONS TO BE TRANSFERED


           EXISTING LENDER'S COMMITMENT              TRANSFER AMOUNT






                           [insert relevant details]
  [Facility Office address, fax number and attention details for notices and
                         account details for payments]

Date:                                             Date:

[Existing Lender]                                 [New Lender]

By:                                               By:

This Transfer  Certificate  is  accepted by the Facility Agent and the Transfer
Date is confirmed as [    ].

Dresdner Bank Luxembourg S.A.                     By:


                                      143

<PAGE>


                             TERMS AND CONDITIONS

These  are the Terms and Conditions  applicable  to  the  transfer  certificate
including  the  Schedule thereto (the "TRANSFER CERTIFICATE") to which they are
annexed.

1.    INTERPRETATION

      In  these Terms  and  Conditions  words  and  expressions  shall  (unless
      otherwise expressly defined herein) bear the meaning given to them in the
      Transfer Certificate and the Facilities Agreement.

2.    TRANSFER

      The Existing  Lender  requests  the  New Lender to accept and procure the
      assignment  and  transfer   of  all or a part  (as  applicable)  of  such
      participation of the Existing Lender under the Facilities Agreement as is
      set  out  in  the relevant part of the  Transfer  Certificate  under  the
      heading  "Schedule"  (the  "PURCHASED  ASSETS")  by  counter-signing  and
      delivering  the Transfer Certificate to the Facility Agent at its address
      for the service  of notice specified in the Facilities Agreement.  On the
      Transfer Date the  New  Lender  shall  pay  to  the  Existing  Lender the
      settlement amount as specified in the pricing letter between the Existing
      Lender  and  the  New  Lender  dated the date of the Transfer Certificate
      (adjusted, if applicable, in accordance  with  the  Sale  Agreement)  and
      completion of the transfer will take place.

3.    EFFECTIVENESS OF TRANSFER

      The  New Lender hereby requests the Facility Agent to accept the Transfer
      Certificate  as being delivered to the Facility Agent pursuant to and for
      the purposes of  the  Facilities  Agreement  so  as  to  take  effect  in
      accordance  with  the  terms  of the Facilities Agreement on the Transfer
      Date or on such later date as may  be  determined  in accordance with the
      terms thereof.

4.    NEW LENDER'S UNDERTAKING

      The New Lender hereby undertakes with the Facility Agent and the Existing
      Lender  and each of the other parties to the Finance  Documents  that  it
      will perform  in accordance with its terms all those obligations which by
      the terms thereof  will  be  assumed by it after delivery of the Transfer
      Certificate to the Facility Agent  and satisfaction of the conditions (if
      any) subject to which the Transfer Certificate is to take effect.

5.    PAYMENTS

5.1   PLACE

      All payments by either party to the  other under the Transfer Certificate
      shall be made to the  account of that  other  party specified in the Sale
      Agreement  (the  "RECEIVING  ACCOUNT").   Each  party   may  designate  a
      different  account  as  its Receiving Account for payment by  giving  the
      other not less than five (5) Business Days notice before the due date for
      payment.

                                      144

<PAGE>

5.2   FUNDS

      Payments under the Transfer  Certificate shall be made in the currency in
      which the amount is denominated  for  value on the due date at such times
      and  in  such  funds  as  are customary at the  time  for  settlement  of
      transactions in that currency.

6.    THE FACILITY AGENT

      The Facility Agent shall not  be required to concern itself with the Sale
      Agreement and may rely on the Transfer Certificate without taking account
      of the provisions of such agreement.

7.    ASSIGNMENT OF RIGHTS

      The Transfer Certificate shall  be  binding upon and enure to the benefit
      of  each party and its successors and  permitted  assigns  PROVIDED  THAT
      neither  party  may assign and transfer its rights thereunder without the
      prior written consent of the other party.

8.    GOVERNING LAW AND JURISDICTION

      The Transfer Certificate  (including, without limitation, these Terms and
      Conditions) shall be governed  by  and  construed  in accordance with the
      laws of the Federal Republic of Germany, and the parties  submit  to  the
      non-exclusive jurisdiction of the German courts.

      Each party irrevocably appoints the person described as process agent (if
      any)  specified in the Sale Agreement to receive on its behalf service of
      any action,  suit  or  other  proceedings in connection with the Transfer
      Certificate.  If any person appointed  as process agent ceases to act for
      any reason the appointing party shall notify  the  other  party and shall
      promptly appoint another person incorporated within the Federal  Republic
      of Germany to act as its process agent.

                                      145

<PAGE>


                                  SCHEDULE 6

                           FORM OF ACCESSION LETTER


                                    PART I

                       FORM OF BORROWER ACCESSION LETTER



To:   Deutsche Bank Luxembourg S.A. as Facility Agent

From: [Material Subsidiary] and SGL Carbon Aktiengesellschaft

Dated:

Dear Sirs

      SGL CARBON AKTIENGESELLSCHAFT - e 495,000,000 FACILITIES AGREEMENT
              DATED [             ] (THE "FACILITIES AGREEMENT")

1.    [Material  Subsidiary]  agrees  to  become an Additional Borrower and  an
      Additional Guarantor and to be bound  by  the  terms  of  the  Facilities
      Agreement as an Additional Borrower and an Additional Guarantor  pursuant
      to  Clause  26 (Changes to the Obligors) of the Facilities Agreement  and
      the terms of  the  Security  Trust Agreement.  [Material Subsidiary] is a
      company  duly  incorporated  under   the   laws   of  [name  of  relevant
      jurisdiction].

2.    [Material Subsidiary's] administrative details are as follows:

      Address:

      Fax No:

      Attention:

3.    [Material Subsidiary] agrees to provide and, to the  extent  permitted by
      law, causes any Subsidiary to provide, such Security for all or  any part
      of  its  obligations  under  the  Finance Documents as the Facility Agent
      shall reasonably require.

4.    This letter is governed by German law.



      [Company]                             [Material Subsidiary]


                                      146

<PAGE>

                                       PART II

                      FORM OF GUARANTOR ACCESSION LETTER



To:   Deutsche Bank Luxembourg S.A. as Facility Agent

From: [Subsidiary] and SGL Carbon Aktiengesellschaft

Dated:

Dear Sirs

      SGL CARBON AKTIENGESELLSCHAFT - e 495,000,000 FACILITIES AGREEMENT
            DATED [             ] 2002 (THE "FACILITIES AGREEMENT")

1.    [Subsidiary] agrees to become an Additional  Guarantor and to be bound by
      the terms of the Facilities Agreement as an Additional Guarantor pursuant
      to Clause 26 (Changes to the Obligors) of the  Facilities  Agreement  and
      the  terms  of  the  Security Trust Agreement.  [Subsidiary] is a company
      duly incorporated under the laws of [name of relevant jurisdiction].

2.    [Subsidiary's] administrative details are as follows:

      Address:

      Fax No:

      Attention:

3.    [Subsidiary] agrees to  provide  and,  to  the  extent  permitted by law,
      causes any Subsidiary to provide, such Security for all or  any  part  of
      its  obligations  under the Finance Documents as the Facility Agent shall
      reasonably require.

4.    This letter is governed by German law.



      For and on behalf of

      SGL CARBON AKTIENGESELLSCHAFT               [Subsidiary]


                                      147

<PAGE>


                                  SCHEDULE 7


                        FORM OF COMPLIANCE CERTIFICATE

To:   Deutsche Bank Luxembourg S.A. as Facility Agent

From: SGL Carbon Aktiengesellschaft

Dated:

Dear Sirs

      SGL CARBON AKTIENGESELLSCHAFT - e 495,000,000 FACILITIES AGREEMENT
             DATED [           ] 2002 (THE "FACILITIES AGREEMENT")

1.    We refer to the Facilities Agreement.  This is a Compliance Certificate.

2.    We confirm that:  [Insert details of covenants to be certified, including
      calculations and explanations]

3.    On the basis of above, we confirm that:

      (a)    the Margin in  respect of Term Facility A Loans after your receipt
             of this Compliance  Certificate  will  be [        ] per cent. per
             annum; and

      (b)    the  Margin in respect of Revolving Credit  Facility  Loans  after
             your receipt of this Compliance Certificate will be [
             ] per cent. per annum.



3.    The following entities are Material Subsidiaries (as this term is defined
      in the Facilities Agreement): [identify relevant entities]

4.    We confirm that no Default is continuing.

Signed: ...............                     ...............

      Director                              Director

      of                                    of

      SGL CARBON AKTIENGESELLSCHAFT         SGL CARBON AKTIENGESELLSCHAFT

[insert applicable certification language]

......................

for and on behalf of

[name of auditors of the Company]

                                      148

<PAGE>


                                  SCHEDULE 8

                               EXISTING SECURITY


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Name of Obligor         Security          Total Principal Amount of
                                          Indebtedness Secured
--------------------------------------------------------------------------------
<S>                       <C>                     <C>
</TABLE>

Details of any existing  security, which will remain in place after the Closing
Date, to be inserted.

                                NOT APPLICABLE

                                      149

<PAGE>


                                  SCHEDULE 9

                    LMA FORM OF CONFIDENTIALITY UNDERTAKING


                      LMA CONFIDENTIALITY LETTER (SELLER)

                 [LETTERHEAD OF SELLER/SELLER'S AGENT/BROKER]


To:

                                [insert name of Potential
                                 Buyer/Buyer's Agent/broker]



RE:   SGL CARBON AKTIENGESELLSCHAFT - e 495,000,000 FACILITIES AGREEMENT DATED
[                   ] (THE "FACILITIES AGREEMENT")


BORROWER: SGL CARBON AKTIENGESELLSCHAFT
DATE:
AMOUNT:  e 495,000,000
AGENT:


Dear Sirs

We understand that you are considering [acquiring] delete if addressee is acting
as broker or Agent [1]  /[arranging  the  acquisition of] delete if addressee is
acting  as  principal  [2]  an  interest  in  the   Facilities   Agreement  (the
"ACQUISITION"). In consideration of us agreeing to make available to you certain
information, by your signature of a copy of this letter you agree as follows:

1.    Confidentiality Undertaking   You  undertake (a) to keep the Confidential
      Information confidential and not to  disclose  it  to  anyone  except  as
      provided  for  by  paragraph  2 below and to ensure that the Confidential
      Information is protected with security measures and a degree of care that
      would  apply  to  your  own confidential  information,  (b)  to  use  the
      Confidential Information  only  for the Permitted Purpose, (c) to use all
      reasonable endeavours to ensure that  any  person  to  whom  you pass any
      Confidential  Information  (unless  disclosed  under paragraph 2[(c)/(d)]
      below) acknowledges and complies with the provisions of this letter as if
      that person were also a party to it, and (d) not to make enquiries of any
      member  of  the Group or any of their officers, directors,  employees  or
      professional advisers relating directly or indirectly to the Acquisition.

2.    Permitted   Disclosure  We  agree  that  you  may  disclose   Confidential
      Information:


1 delete if addressee is acting as broker or Agent
2 delete if addressee is acting as principal

                                      150

<PAGE>


      (a)    to  members  of  the  Buyer  Group  and their officers, directors,
             employees and professional advisers to  the  extent  necessary for
             the Permitted Purpose and to any auditors of members of  the Buyer
             Group;

      (a)    [subject  to  the  requirements  of  the Facilities Agreement,  in
             accordance with the Permitted Purpose  so  long as any prospective
             buyer  has delivered a letter to you in equivalent  form  to  this
             letter;]

      [(b/c] subject  to  the  requirements of the Facilities Agreement, to any
             person to (or through)  whom  you  assign  and  transfer  (or  may
             potentially  assign  and  transfer)  all  or  any  of  the rights,
             benefits   and   obligations  which  you  may  acquire  under  the
             Facilities Agreement  or with (or through) whom you enter into (or
             may potentially enter into)  any sub-participation in relation to,
             or any other transaction under  which  payments  are to be made by
             reference  to,  the  Facilities Agreement or the Borrower  or  any
             member of the Group so  long as that person has delivered a letter
             to you in equivalent form to this letter; and

      [c/d]  (i)  where  requested  or  required  by  any  court  of  competent
             jurisdiction or any competent  judicial, governmental, supervisory
             or regulatory body, (ii) where required  by the rules of any stock
             exchange on which the shares or other securities  of any member of
             the Buyer Group are listed or (iii) where required  by the laws or
             regulations of any country with jurisdiction over the  affairs  of
             any member of the Buyer Group.

3.    Notification  of  Required  or Unauthorised Disclosure  You agree (to the
      extent permitted by law) to inform  us  of  the full circumstances of any
      disclosure  under  paragraph  2[(c)/(d)]  or  upon  becoming  aware  that
      Confidential Information has been disclosed in breach of this letter.

4.    Return of Copies    If we so request in writing,  you  shall  return  all
      Confidential Information supplied to you by us and destroy or permanently
      erase  all  copies  of  Confidential  Information made by you and use all
      reasonable endeavours to ensure that anyone to whom you have supplied any
      Confidential Information destroys or permanently erases such Confidential
      Information and any copies made by them,  in each case save to the extent
      that you or the recipients are required to  retain  any such Confidential
      Information by any applicable law, rule or regulation or by any competent
      judicial, governmental, supervisory or regulatory body  or  in accordance
      with  internal  policy,  or  where the Confidential Information has  been
      disclosed under paragraph 2[(c)/(d)] above.

5.    Continuing Obligations  The obligations  in  this  letter  are continuing
      and,  in particular, shall survive the termination of any discussions  or
      negotiations  between you and us.  Notwithstanding the previous sentence,
      the obligations  in  this letter shall cease (a) if you become a party to
      or otherwise acquire (by  assignment  or  sub-participation) an interest,
      direct or indirect, in the Facilities Agreement or (b) twelve (12) months
      after you have returned all Confidential Information  supplied  to you by
      us  and  destroyed  or  permanently  erased  all  copies  of Confidential
      Information made by you (other than any such Confidential Information  or
      copies which have been disclosed under paragraph 2 above (other than sub-
      paragraph 2(a)) or which, pursuant to paragraph 4 above, are not required
      to be returned or destroyed)).

6.    No  Representation;  Consequences  of Breach etc You acknowledge and agree
      that:


                                      151

<PAGE>


      (a)    neither  we,  [nor  our principal] nor any member of the Group nor
             any of our or their respective  officers,  employees  or  advisers
             (each   a  "RELEVANT  PERSON")  (i)  make  any  representation  or
             warranty,  express or implied, as to, or assume any responsibility
             for, the accuracy,  reliability  or  completeness  of  any  of the
             Confidential  Information or any other information supplied by  us
             or the assumptions on which it is based or (ii) shall be under any
             obligation to update or correct any inaccuracy in the Confidential
             Information  or  any  other  information  supplied  by  us  or  be
             otherwise liable  to  you  or  any  other person in respect to the
             Confidential Information or any such information; and

      (a)    we [or our principal] or members of the  Group  may be irreparably
             harmed by the breach of the terms hereof and damages may not be an
             adequate remedy; each Relevant Person may be granted an injunction
             or specific performance for any threatened or actual breach of the
             provisions of this letter by you.

7.    No Waiver; Amendments, etc  This letter sets out the full  extent of your
      obligations of confidentiality owed to us in relation to the  information
      the subject of this letter.  No failure or delay in exercising any right,
      power  or  privilege hereunder will operate as a waiver thereof nor  will
      any single or  partial exercise of any right, power or privilege preclude
      any further exercise thereof or the exercise of any other right, power or
      privileges hereunder.   The  terms  of  this  letter and your obligations
      hereunder  may only be amended or modified by written  agreement  between
      us.

8.    Inside Information  You  acknowledge that some or all of the Confidential
      Information is or may be price-sensitive  information and that the use of
      such information may be regulated or prohibited by applicable legislation
      relating to insider dealing and you undertake not to use any Confidential
      Information for any unlawful purpose.

9.    Nature of Undertakings  The undertakings given  by  you under this letter
      are  given to us and (without implying any fiduciary obligations  on  our
      part)  are  also  given for the benefit of [our principal,]4 the Borrower
      and each other member of the Group.

10.   Governing Law and Jurisdiction   This  letter  (including  the  agreement
      constituted  by  your acknowledgement of its terms) shall be governed  by
      and construed in accordance  with  the  laws  of  the Federal Republic of
      Germany and the parties submit to the non-exclusive  jurisdiction  of the
      German courts.

11.   Definitions  In this letter (including the acknowledgement set out below)
      terms  defined  in  the  Facilities  Agreement  shall, unless the context
      otherwise requires, have the same meaning and:

      "BUYER GROUP" means you, each of your holding companies  and subsidiaries
      and each subsidiary of each of your holding companies;

      "CONFIDENTIAL  INFORMATION"  means  any  information  relating   to   the
      Borrower,  the  Group,  the  Facilities  Agreement and/or the Acquisition
      provided to you by us or any of our affiliates  or  advisers, in whatever
      form, and includes information given orally and any document,  electronic
      file  or  any  other  way  of representing or recording information which
      contains  or is derived or copied  from  such  information  but  excludes
      information  that  (a)  is  or  becomes  public knowledge other than as a
      direct or indirect result of any breach of this letter or (b) is known by
      you before the date the information is disclosed to you by us or any

                                      152

<PAGE>


      of our affiliates or advisers or is lawfully  obtained by you thereafter,
      other than from a source which is connected with  the Group and which, in
      either case, as far as you are aware, has not been  obtained in violation
      of, and is not otherwise subject to, any obligation of confidentiality;

      "GROUP"  means  the  Borrower  and  each  of  its  holding companies  and
      subsidiaries and each subsidiary of each of its holding companies; and

      "PERMITTED PURPOSE" means [subject to the terms of this  letter,  passing
      on information to a prospective buyer for the purpose of] considering and
      evaluating whether to enter into the Acquisition.

Please  acknowledge  your  agreement  to the above by signing and returning the
enclosed copy.

Yours faithfully


............................

For and on behalf of

[Seller/Seller's Agent/broker]

To:   [Seller]
      [Seller's Agent/broker]

      The Borrower and each other member of the Group


We acknowledge and agree to the above:


.............................
For and on behalf of

[POTENTIAL BUYER/BUYER'S AGENT/BROKER]


                                      153

<PAGE>

                                  SCHEDULE 10


                                  TIMETABLES

                                    PART I

                                     LOANS

<TABLE>
<CAPTION>
                                                                                    LOANS IN EURO                      LOANS IN
                                                                                                                       DOLLARS
<S>                                                                                  <C>                                  <C>
Delivery  of a duly completed Utilisation  Request  (Clause 5.1  (Delivery  of  a    D-3                                D-3
Utilisation  Request)  or  a  Selection Notice Clause 11.1 (Selection of Interest    12.00 noon                         12.00 noon
Periods)
Facility Agent notifies the Lenders  of  the  amount  and currency of the Loan in    D-3                                D-3
accordance with Clause 5.4 (Lenders' Participation)                                  05.00 p.m.                         05.00 p.m.
Facility   Agent   receives  a  notification  from  a  Lender  under   Clause 6.2    D-2                                D-2
(Unavailability of a Currency)                                                       11.00 a.m.                         11.00 a.m.
Facility  Agent  gives  notice  to  the  relevant  Borrower  in  accordance  with    D-2                                D-2
Clause 6.2 (Unavailability of a Currency)                                            11.00 a.m.                         11.00 a.m.
Facility Agent calculates  amount  of  the  Loan  in  Dollars  in accordance with    D-3                                D-3
Clause 6.3 (Change of Currency)                                                      12.00 noon                         12.00 noon
LIBOR or EURIBOR is fixed                                                            Quotation  Day as of 11:00 a.m.
                                                                                     London time in respect             Quotation
                                                                                     of  LIBOR  and  as of              Day  as of
                                                                                     11:00 am (Brussels time)           11:00 a.m.
                                                                                     in respect of EURIB                London
                                                                                                                        time
</TABLE>


D =   first day of relevant Interest Period.

D - X = X Business Days prior to D.


                                       1


<PAGE>

                                    PART II

                               LETTERS OF CREDIT


<TABLE>
<CAPTION>
                                                                              LETTERS
                                                                              OF
                                                                              CREDIT
<S>                                                                           <C>
Delivery of a duly completed Utilisation Request
(Clause 5.1 (Delivery of a Utilisation Request))
                                                                               U-5
                                                                               12.00 noon.

Facility  Agent  notifies the Lenders and the
Issuing Banks of the Letter of Credit in accordance
with Clause 5.4 (Lenders'
Participation).                                                                U-3
                                                                               12.00 noon
</TABLE>


U = date of utilisation.

U - X = X Business Days prior to U.



                                       2

<PAGE>

                                  SCHEDULE 11


                       FORM OF SECURITY TRUST AGREEMENT


                                       3


<PAGE>


                                  SCHEDULE 12

             APPROVED ADDITIONAL BORROWERS AND THEIR ALLOCATIONS

                               TERM FACILITY A



<TABLE>
<CAPTION>
NAME OF APPROVED ADDITIONAL BORROWER             AMOUNT OF SUCH APPROVED ADDITIONAL BORROWER'S ALLOCATION
---------------------------------------------------------------------------------------------------------
<S>                                              <C>
SGL CARBON BETEILIGUNG GMBH, WIESBADEN, GERMANY  e 20,000,000
---------------------------------------------------------------------------------------------------------
SGL ACOTEC GMBH, SIEHRSHAHN, GERMANY             e 15,000,000
---------------------------------------------------------------------------------------------------------
SGL TECHNOLOGIES GMBH, MEITINGEN, GERMANY        e 25,000,000
---------------------------------------------------------------------------------------------------------
SGL BRAKES GMBH, MEITINGEN, GERMANY              e 20,000,000
---------------------------------------------------------------------------------------------------------
SGL CARBON S.P.A., MILAN, ITALY                  e 20,000,000
---------------------------------------------------------------------------------------------------------
SGL CARBON S.A., LA CORUNA, SPAIN                e 5,000,000
---------------------------------------------------------------------------------------------------------
SGL CARBON LLC, CHARLOTTE, NORTH CAROLINA, USA   e 70,000,000
---------------------------------------------------------------------------------------------------------
</TABLE>

                                       4

<PAGE>


                                  SCHEDULE 13

                        CURRENT MATERIAL SUBSIDIARIES

<TABLE>
<CAPTION>
NAME OF MATERIAL SUBSIDIARY                     JURISDICTION OF INCORPORATION AND REGISTRATION
                                                NUMBER (OR EQUIVALENT, IF ANY)
---------------------------------------------------------------------------------------------------------

<S>                                             <C>
SGL CARBON GMBH, MEITINGEN                      GERMANY
---------------------------------------------------------------------------------------------------------
SGL CARBON BETEILIGUNG GMBH, WIESBADEN          GERMANY
---------------------------------------------------------------------------------------------------------
SGL PANTRAC, BERLIN                             GERMANY
---------------------------------------------------------------------------------------------------------
SGL ACOTEC GMBH, SIEHRSHAHN                     GERMANY
---------------------------------------------------------------------------------------------------------
KCH BETEILIGUNGSS GMBH, SIEHRSHAHN              GERMANY
---------------------------------------------------------------------------------------------------------
SGL TECHNOLOGIES GMBH, MEITINGEN                GERMANY
---------------------------------------------------------------------------------------------------------
SGL BRAKES GMBH, MEITINGEN                      GERMANY
---------------------------------------------------------------------------------------------------------
SGL CARBON GMBH, SEEG                           AUSTRIA
---------------------------------------------------------------------------------------------------------
SGL CARBON GMBH & CO, SEEG                      AUSTRIA
---------------------------------------------------------------------------------------------------------
SGL CARBON LT., ALCESTER                        ENGLAND
---------------------------------------------------------------------------------------------------------
RK CARBON INTERNATIONAL LTD., WILMSLOW          ENGLAND
---------------------------------------------------------------------------------------------------------
RK TECHNOLOGIES INTERNATIONAL LTD., WILMSLOW    ENGLAND
---------------------------------------------------------------------------------------------------------
SGL TECHNIC LTD., MUIR OF ORD                   SCOTLAND
---------------------------------------------------------------------------------------------------------
SGL CARBON S.A., CHEDDE                         FRANCE
---------------------------------------------------------------------------------------------------------
SGL ALCOTEC S.A.R.L., HOUDAIN                   FRANCE
---------------------------------------------------------------------------------------------------------
SGL TECHNIC S.A., GRENOBLE                      FRANCE
---------------------------------------------------------------------------------------------------------
SGL CARBON S.P.A., MILAN                        ITALY
---------------------------------------------------------------------------------------------------------
RADION FINANZIARIA S.P.A., MILAN                ITALY
---------------------------------------------------------------------------------------------------------
SGL CARBON S.A., LA CORUNA                      SPAIN
---------------------------------------------------------------------------------------------------------
SGL CARBON S.A., SACZ                           POLAND
---------------------------------------------------------------------------------------------------------
ZEW S.A., RACIBORZ                              POLAND
---------------------------------------------------------------------------------------------------------
SGL CARBON LLC, CHARLOTTE, NORTH CAROLINA       NORTH CAROLINA, USA
---------------------------------------------------------------------------------------------------------
</TABLE>

                                       5

<PAGE>



<TABLE>
<CAPTION>
<S>                                                    <C>
SGL TECHNIC, INC., VALENCIA, [            ]     [            ], USA
---------------------------------------------------------------------------------------------------------
SGL HITCO ACQUISITION CORP., CHARLOTTE,
NORTH CAROLINA                                  [            ], USA
---------------------------------------------------------------------------------------------------------
HITCO CARBON COMPOSITES, INC., GARDENA,
[            ]                                  [            ], USA
---------------------------------------------------------------------------------------------------------
SGL ACOTEC, INC., STONGSVILLE, [            ]   [            ], USA
---------------------------------------------------------------------------------------------------------
SGL CANADA, INC., LACHUTE                       CANADA
---------------------------------------------------------------------------------------------------------
</TABLE>


                                       6


<PAGE>


                                  SCHEDULE 14

                         FORM OF THE LETTER OF CREDIT

[Letterhead]

                                                                         [Date]


BANKBURGSCHAFT NR. [      ]
SACHE COMP/E - 1/36.490 - GRAPHITELEKTRODEN


Wir, [     ], bestatigen Ihnen hiermit, dass wir fur die Erfullung des
Teilbetrages von

                                  EUR [     ]
                       (IN WORTEN: EURO [     ] 00/100)

der folgenden Verbindlichkeiten  der SGL CARBON AG, Rheingaustrabe 182, D-
65203 Wiesbaden, gegenuber der Kommission der Europaischen Gemeinschaften
die Burgschaft ubernehmen:


{circle}   Geldbube in Hohe von 80,2 Mio.  EUR,  die der SGL CARBON AG durch die
           Entscheidung der Kommission der Europaischen  Gemeinschaften  vom 18.
           Juli 2001 in der Sache COMP/E-1/36.490 auferlegt worden ist.

{circle}   Die fur diesen  Betrag vom 24.  Oktober 2001 bis zu diesem  Zeitpunkt
           der  tatsachlichen  Zahlung der  Geldbube  berechneten  Zinsen zu dem
           Zinssatz,      den     die      Europaische      Zentralbank      fur
           Hauptrefinanzierungsgeschafte  im  Monat  Juli  2001  anwendet  (d.h.
           4,54%, wie im Amtsblatt der Europaischen  Gemeinschaften  Nr. C 188/1
           vom 4. Juli 2001 bekanntgegeben,  erhoht um eineinhalb Prozentpunkte,
           insgesamt 6,04 %).

Dieses  Burgschaftsversprechen  kann  nur  mit Zustimmung der Kommission der
Europaischen Gemeinschaften widerrufen werden.

Wir verzichten auf die Einrede der Vorausklage.

Die genannte Burgschaft wird fallig auf Ihre  erste Anforderung durch mit
Einschreibebrief ubersandte, beglaubigte Abschrift  des Urteils des Gerichts
erster Instanz bzw. des Gerichtshofs der Europaischen  Gemeinschaften in der
Sache COMP/E-1/36.490.

Die  Burgschaft erlischt, abgesehen von der Erfullung  der  Anspruche,
durch Ruckgabe dieser Urkunde an uns.

Ausschlieblicher   Gerichtsstand   fur   diese  Burgschaft  ist  der
Gerichtshof  / das Gericht erster Instanz der Europaischen  Gemeinschaft  in
Luxemburg.

[Bank/s]
[Signatures]

                                       7

<PAGE>


                                  SCHEDULE 15

         EXISTING COMPETITION LAW PROCEEDINGS AND ANTI-TRUST LAWSUITS



<TABLE>
<CAPTION>
ALL PENDING ANTITRUST
PROCEEDINGS OF SGL GROUP:
<S>                             <C>         <C>                <C>               <C>
I.  PLAINTIFF /INVESTIGATING                                   CAUSE OF
    AUTHORITY                    DEFENDANT  COURT / FILING     ACTION /          STATUS
                                            NUMBER             PLAINTIFF'S
                                                               CLAIMS
1. EU Commission                 SGL AG     EuG/Az.: T-239/01  Graphite          Fine imposed on 18.07.01;
                                                               electrodes        Appeal at European Court
2. EU Commission                 SGL AG     Sache COMP/E-      Isostatic         Fines imposed by 17 December 2002
                                            1/37.667           and extruded
                                                               speciality
                                                               products
3. EU Commission                 SGL Carbon Sache COMP/E-      Electrical        Request for Information
                                 Group      1/38.359           a.
                                                               mechanical
                                                               carbon a.
                                                               graphite
                                                               products
4. Korean Fair Trade Commission  SGL AG     Case               Graphite          Interim Appeal denied; Appeal filed
                                            No.:2002Shinsam058 electrodes        with Court on 27-09-02
                                            5
II. ALL PENDING ANTITRUST
    RELATED CIVIL LAW SUITS
    CONCERNING SGL GROUP:
                                                               CAUS OF
PLAINTIFF                        DEFENDANT  COURT / FILING     ACTION /          STATUS
                                            NUMBER             PLAINTIFF'S
                                                               CLAIMS
1. Bethlehem Steel Corporation   SGL AG/SGL D.C. of            civil action      pending, pretrial discovery
                                 U.S. and   Pennsylvania Case  for damages
                                 other      No. 00 CV 3592     (GE)

2. Ferromin Internat. trade      SGL AG/SGL D.C. of            civil action      dismissed for lack of standing and lack of subject
Corp. and others                 U.S. and   Pennsylvania Case  for damages       matter jurisdiction, decision of DC on appeal
                                 other      No. 99 CV 693      (GE)

3. Broken Hill Proprietary Co.   SGL AG/SGL D.C. of            civil action      dismissed for lack of standing and lack of subject
Ltd (Australia) and others       U.S. and   Pennsylvania Case  for damages       matter jurisdiction, decision of DC on appeal
                                 other      No. 99 CV 4772     (GE)

4. Saudi Iron and Steel Company  SGL AG/SGL D.C. of            civil action      dismissed subject to reinstatement upon resolution
                                 U.S. and   Pennsylvania Case  for damages       of me Ferromin and BHP appeals
                                 other      No. 00 CV 5414     (GE)

5.Arbed S.A.                     SGL AG/SGL D.C. of            civil action      stayed
                                 U.S. and   Pennsylvania Case  for damages
                                 other      No. 02 CV 822      (GE)

6.Industrial Graphite Antitrust  SGL AG/SGL D.C. of            Class action      pending, pretrial discovery
litigation                       U.S. and   Pennsylvania Case  (Iso)
                                 other      No. 00Master
                                            File No. 00 CV
                                            1857
                                            (for all iso)

7. Northwest Aluminium/Company/  SGL AG/SGL District Court of  civil action      Service of Complaint
Goldendale Aluminium Company     U.S. and O region             for damages
                                 other                         (GE)


                                                                                 D.C: of Pennsylvania = United States
                                                                                 District Court for
Iso = Isostatic graphite         GE =       SGL AG = SGL       SGL U.S. =        the Eastern District of Pennsylvania
                                 Graphite   Carbon AG          SGL Carbon
                                 electrodes                    LLC (former
                                                               Corp.)
</TABLE>


                                       8

<PAGE>

                                  SCHEDULE 16

                          EXISTING INTRA-GROUP LOANS


<TABLE>
<CAPTION>
LENDER                          BORROWER                         KIND OF LOAN                   CURR.       LIMIT
-----------------------------------------------------------------------------------------------------------------
<S>                              <C>                               <C>                           <C>          <C>
KCH BETEILIGUNGS GMBH           SGL ACOTEC Inc., USA             IC loans gewahrt kurzfristig    USD    5.501.435
-----------------------------------------------------------------------------------------------------------------
                                SGL ACOTEC GmbH, Siershahn       IC loans gewahrt kurzfristig    EUR    5.177.998
-----------------------------------------------------------------------------------------------------------------
SGL ACOTEC GMBH, SIERSHAHN (HAW)SGL CARBON AG                    IC balances daily due           EUR    1.677.988
-----------------------------------------------------------------------------------------------------------------
SGL ACOTEC GMBH MEITINGEN       SGL Composites SA, France        IC balances daily due           EUR       81.785
-----------------------------------------------------------------------------------------------------------------
SGL ACOTEC GMBH, SIERSHAHN      SGL ACOTEC China Ltd., Wuhan     IC loans gewahrt kurzfristig    EUR       50.000
-----------------------------------------------------------------------------------------------------------------
                                KCH Beteiligungs GmbH            IC loans gewahrt kurzfristig    EUR   14.465.272
-----------------------------------------------------------------------------------------------------------------
SGL ACOTEC LTD. SANDBACH        SGL CARBON AG                    IC loans gewahrt kurzfristig    GBP      360.497
-----------------------------------------------------------------------------------------------------------------
SGL ACOTEC S.A.R.L., LA COMTE   SGL ACOTEC GmbH, Siershahn       IC balances daily due           EUR      400.000
-----------------------------------------------------------------------------------------------------------------
SGL ACOTEC SPA, ITALY           SGL CARBON SpA, Italy            IC balances daily due           EUR      323.864
-----------------------------------------------------------------------------------------------------------------
SGL CARBON AG                   SGL CARBON Beteiligung GmbH      IC balances daily due           EUR  241.593.289
-----------------------------------------------------------------------------------------------------------------
                                SGL TECHNOLOGIES GmbH            IC balances daily due           EUR   57.573.258
-----------------------------------------------------------------------------------------------------------------
                                SGL ACOTEC GmbH Meitingen        IC balances daily due           EUR   13.730.070
-----------------------------------------------------------------------------------------------------------------
                                SGL PanTrac GmbH, Berlin         IC balances daily due           EUR      924.838
-----------------------------------------------------------------------------------------------------------------
                                SGL TECHNIC Ltd., UK             IC loans gewahrt kurzfristig    GBP   31.037.906
-----------------------------------------------------------------------------------------------------------------
                                SGL CARBON Asia-Pacific Sdn. Bhd.IC loans gewahrt kurzfristig    USD       50.000
-----------------------------------------------------------------------------------------------------------------
                                SGL CARBON LLC., USA             IC balances daily due           USD   11.325.132
-----------------------------------------------------------------------------------------------------------------
                                SGL CARBON LLC., USA             IC loans gewahrt kurzfristig    USD   12.250.000
-----------------------------------------------------------------------------------------------------------------
                                SGL CARBON LLC., USA             IC loans gewahrt langfristig    USD   56.432.248
-----------------------------------------------------------------------------------------------------------------
                                SGL CARBON LLC., USA             IC loans gewahrt langfristig    USD   63.225.435
-----------------------------------------------------------------------------------------------------------------
                                SGL ACOTEC Ltda., Brazil         IC loans gewahrt kurzfristig    USD    1.800.000
-----------------------------------------------------------------------------------------------------------------
                                SGL ACOTEC GmbH, Siershahn       IC balances daily due           EUR      271.580
-----------------------------------------------------------------------------------------------------------------
                                SGL ACOTEC China Ltd., Wuhan     IC loans gewahrt kurzfristig    USD    3.600.000
-----------------------------------------------------------------------------------------------------------------
                                SGL ACOTEC Singapore Pte. Ltd.   IC loans gewahrt kurzfristig    SGD    2.007.332
-----------------------------------------------------------------------------------------------------------------
                                SGL Brakes GmbH                  IC balances daily due           EUR    6.168.515
-----------------------------------------------------------------------------------------------------------------
                                ZEW, Ratibor                     IC loans gewahrt kurzfristig    PLN    3.590.000
-----------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>



<TABLE>
<CAPTION>
LENDER                          BORROWER                         KIND OF LOAN                   CURR.       LIMIT
-----------------------------------------------------------------------------------------------------------------
<S>                             <C>                             <C>                             <C>          <C>
SGL CARBON GMBH & CO., AUSTRIA  SGL CARBON AG                   IC balances daily due           EUR     3.652.423
-----------------------------------------------------------------------------------------------------------------
SGL CARBON GMBH                 SGL CARBON AG                   IC balances daily due           EUR    63.404.714
-----------------------------------------------------------------------------------------------------------------
                                SGL CARBON SA, Belgium          IC loans gewahrt kurzfristig    EUR       600.000
-----------------------------------------------------------------------------------------------------------------
                                SGL CARBON SA, Belgium          IC loans gewahrt kurzfristig    EUR       150.000
-----------------------------------------------------------------------------------------------------------------
                                SGL CARBON SA, Belgium          IC loans gewahrt kurzfristig    EUR       250.000
-----------------------------------------------------------------------------------------------------------------
SGL CARBON SA, FRANCE           SGL CARBON AG                   IC balances daily due           EUR    12.724.059
-----------------------------------------------------------------------------------------------------------------
                                SGL TECHNIC S.A., France        IC balances daily due           EUR     2.847.398
-----------------------------------------------------------------------------------------------------------------
SGL CARBON SA, SPAIN            SGL CARBON AG                   IC balances daily due           EUR    25.074.695
-----------------------------------------------------------------------------------------------------------------
SGL CARBON SPA, ITALY           Radion Finanziaria SpA, Italy   IC balances daily due           EUR     3.442.010
-----------------------------------------------------------------------------------------------------------------
                                SGL CARBON AG                   IC balances daily due           EUR     2.046.250
-----------------------------------------------------------------------------------------------------------------
SGL INFORMATION SERVICES GMBH   SGL CARBON AG                   IC balances daily due           EUR     1.766.454
-----------------------------------------------------------------------------------------------------------------
SPEER CANADA INC., KITCHENER    SGL CARBON Inc. Canada          IC loans gewahrt kurzfristig    CAD     3.000.000
-----------------------------------------------------------------------------------------------------------------
STOHRER GMBH, RUTESHEIM         SGL ACOTEC GmbH, Siershahn      IC balances daily due           EUR     1.010.927
-----------------------------------------------------------------------------------------------------------------
OSKO GMBH, PASCHING             SGL ACOTEC GmbH, Siershahn      IC loans gewahrt kurzfristig    EUR     2.398.203
-----------------------------------------------------------------------------------------------------------------
                                SGL ACOTEC GmbH, Siershahn      IC loans gewahrt kurzfristig    EUR       125.000
-----------------------------------------------------------------------------------------------------------------
</TABLE>

                                       2

<PAGE>


                                  SCHEDULE 17

                      MANDATORILY DISCHARGED INDEBTEDNESS


<TABLE>
<CAPTION>
               BANK                         ART               WaHR.        SALDO          VERTRAG VOM
<S>                                <C>                        <C>          <C>            <C>
--------------------------
SGL ACOTEC GMBH, SIERSHAHN
--------------------------
Kreissparkasse Hildesheim            langfristige Aufnahme      EUR          -110.695
Kreissparkasse Hildesheim            langfristige Aufnahme      EUR           -63.887

--------------------------                                      TOTAL:       -174.582
SGL CARBON SA LA CORUNA
--------------------------
Banco Pastor, La Coruna              langfristige Aufnahme      EUR        -1.760.461
Banco Bilbao-Vizcaya, Madrid         kurzfristige Aufnahme      EUR        -7.000.000
Caja de Ahorros de Galicia, Madrid   kurzfristige Aufnahme      EUR        -7.000.000
Banco Popular, La Coruna             kurzfristige Aufnahme      EUR        -2.500.000
Banco Urquijo, La Coruna             kurzfristige Aufnahme      EUR        -5.000.000
                                                                TOTAL:    -23.260.461
--------------------------
SGL CARBON SPA MAILAND
--------------------------
Ministerio ICA                       langfristige Aufnahme      EUR          -898.859
Credito Artigiano, Mailand           kurzfristige Aufnahme      EUR        -5.000.000
BNL, Mailand                         kurzfristige Aufnahme      EUR       -17.500.000
                                                                TOTAL:    -23.398.859
--------------------------
SGL TECHNOLOGIES, MEITINGEN
--------------------------
IKB Bank AG, Dusseldorf              langfristige Aufnahme      EUR        -6.250.000     03.04.2001
IKB Bank AG, Dusseldorf              langfristige Aufnahme      EUR        -7.500.000     03.04.2001
                                                                TOTAL:    -13.750.000
--------------------------
--------------------------

--------------------------
ZEW, RATIBOR
--------------------------
ING Bank Slaski                      kurzfristige Aufnahme      EUR        -1.318.001

--------------------------
SGL TECHNIC UK, MUIR OF ORD
--------------------------
DZ Bank Frankfurt                    langfristige Aufnahme      GBP        -4.500.000
Bank of America, London              Kontokorrent               GBP          -500.000
                                     TOTAL:                     GBP        -5.000.000
                                                                EUR        -7.814.942

--------------------------
SGL CARBON AG
--------------------------
Bay. Landesbank, Munchen             langfristige Aufnahme      EUR       -10.000.000     18.02.2002
IKB Bank, Dusseldorf                 langfristige Aufnahme      EUR        -3.195.570     05.09.1997
IKB Bank, Dusseldorf                 langfristige Aufnahme      EUR        -5.000.000     03.04.2001
DZ Bank London                       KonsortialKredit           EUR       -71.580.863     18.04.2000
Bank of America, Frankfurt           kurzfristige Aufnahme      USD        -8.100.000mdl. Zusage
Bay. Landesbank, Munchen             kurzfristige Aufnahme      EUR       -40.000.000     31.01.2002
Bay. Landesbank, Munchen             kurzfristige Aufnahme      EUR       -15.000.000     31.01.2002
Kreissparkasse Augsburg              kurzfristige Aufnahme      EUR        -2.500.000     01.07.2002
Deutsche Bank AG, Augsburg           kurzfristige Aufnahme      EUR       -15.000.000     18.12.2001
Mitteleurop. Handelsbank, Frankfurt  kurzfristige Aufnahme      EUR       -10.000.000     17.04.2002
</TABLE>

                                       2

<PAGE>


<TABLE>
<CAPTION>
               BANK                         ART               WaHR.        SALDO          VERTRAG VOM
<S>                                <C>                        <C>          <C>            <C>
HypoVereinsbank AG, Augsburg        Kontokorrentkonto           EUR          -876.000       21.02.2002
Commerzbank AG, Augsburg            Kontokorrentkonto           EUR        -4.614.000       11.01.2002
Commerzbank AG, Augsburg            Kontokorrentkonto           USD        -2.873.000
Deutsche Bank AG, Augsburg          Kontokorrentkonto           EUR        -8.584.000       18.12.2001
Deutsche Bank AG, Augsburg          Kontokorrentkonto           USD          -690.000
Dresdner Bank AG, Augsburg          Kontokorrentkonto           EUR        -6.769.000       24.10.2002
Nassauische Sparkasse, Wiesbaden    Kontokorrentkonto           EUR        -9.985.495       01.12.2001
BHF-Bank AG, Frankfurt              Kontokorrentkonto           EUR        -9.942.574       06.11.2001
                                                                TOTAL:   -224.710.503


GESAMTKREDITAUFNAHME                 -297.427.348

</TABLE>

                                       2

<PAGE>

                                  SCHEDULE 18

                              FORM OF US OPINION


                                                                   CONFIDENTIAL
                                                                      S&S DRAFT
                                                                      6.11.2002



                             [S&S U.S. LETTERHEAD]




Dresdner Bank Aktiengesellschaft
Jurgen-Ponto-Platz 1
D-60301 Frankfurt am Main
Germany

as Documentation Agent for the
Lenders referred to below
                                                                         [Date]
                                                              PRDOCS01/153400.4




                         SGL CARBON AKTIENGESELLSCHAFT
                          SYNDICATED CREDIT AGREEMENT

                  __________________________________________



Ladies and Gentlemen:

           We   are   acting   as   United   States   counsel  for  SGL  CARBON
Aktiengesellschaft   (the  "Company")  in  connection  with  the   transactions
contemplated by the [syndicated  credit  agreement][3],  dated  as  of the date
hereof,  among the Company, [insert names of Lenders] (together, the "Lenders")
[and [insert names of any other parties]] (the "Credit Agreement"). Capitalized
terms used  herein  and not otherwise defined have the meaning set forth in the
Credit Agreement.


In this capacity, we have examined copies of:

      (ii)    the Credit Agreement;

1 Adjust title of relevant credit document(s) as appropriate

                                       3

<PAGE>

     (iii)   the plea  agreement  between  the  United  States and the Company,
             filed June 16, 1999; the plea agreement between  the United States
             and  Robert J. Koehler, filed June 16, 1999; the judgment  of  the
             United   States   District  Court  for  the  Eastern  District  of
             Pennsylvania (the "District Court") dated June 16, 1999; the Order
             of  the District Court  dated  July  11,  2001  (the  "2001  Court
             Order"); the Order of the District Court dated April 11, 2002 (the
             "2002  Court  Order"  and, together with the 2001 Court Order, the
             "Court Orders"), in each  case in connection with United States v.
             SGL Carbon Aktiengesellschaft and Robert J. Koehler, Crim. No. 99-
             244,  (E.D.  Pa., filed May 4,  1999)  (collectively,  the  "Court
             Documents"); and

      (iii)  such other documents,  agreements and instruments as we have deemed
             necessary as a basis for the opinions hereinafter expressed.

In  such  examination,  we  have assumed the genuineness of all signatures, the
authenticity  of  all  agreements,   certificates,  documents  and  instruments
submitted  to us as originals and the conformity  with  the  originals  of  all
agreements, certificates, documents and instruments submitted to us as copies.

           The opinions stated herein are limited to the federal law of the
United States of America and we express no opinion as to the effect of the laws
of any other jurisdiction.

           Based upon and subject to the foregoing, and having regard for such
legal considerations as we deem relevant, we are of the opinion that:

(1)   In a proceeding  under  the  United  States  Bankruptcy  Code,  11 U.S.C.
      {section}  101  et  seq  (the  "Bankruptcy  Code"), a claim of the United
      States  based an the non-payment by the Company  of  obligations  to  the
      United States  government  resulting  from the Company's (and, insofar as
      the  Company  has  agreed to pay fines owed  by  Mr.  Koehler,  from  Mr.
      Koehler's)  plea  to violating  United  States  antitrust  law  (as  such
      obligations are set  forth in the Court Documents, the "U.S. Fine") would
      not have any priority  right  to receive payment or distribution from the
      assets of the Company's bankruptcy estate.

(2)   To the best of our knowledge, the  execution  and  delivery of the Credit
      Agreement,  the grant by the Company and certain of its  subsidiaries  in
      favor of the  Lenders  of the pledges, mortgages, charges and assignments
      described in [Schedule *] to the Credit Agreement and the consummation of
      the transactions contemplated  in  the Credit Agreement will not conflict
      with, or constitute a breach of or default under, the Court Orders.

(3)   The Company has not granted any security interests in favor of the United
      States  to secure payment of the U.S.  Fine.  The  Court  Orders  do  not
      entitle the  United  States to require the Company to grant such security
      interests at any time prior to the payment in full of the U.S. Fine.

           We note that the  2002  Court  Order,  which  extended  the  payment
schedule for the U.S. Fine, reserves to the United States the right to move the
District  Court  for  an acceleration of the payment schedule at any time after
January 1, 2004, in the  event  of a change in the Company's ability to pay all
or an increased amount of the U.S.  Fine  balance  due  at  the  time  the U.S.
government makes such a motion.

           We  note  further  that  this  letter  does  not  address  any issue
regarding  the  discharge  of  a  debt  arising  from a criminal fine under the
Bankruptcy Code following the distribution of assets  of  a  corporate debtor's
bankruptcy estate.

           Our  opinions  are  subject  to the effect of general principles  of
equity, including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing.


                                       4


<PAGE>


           We are furnishing this letter to you, as Documentation Agent for the
Lenders, solely for the benefit of the Lenders  in  connection  with the Credit
Agreement.  This  letter  is  not  to  be used, circulated, quoted or otherwise
referred to for any other purpose.

                                           Very truly yours,


                                       5


<PAGE>


SIGNATURES

THE COMPANY

SGL CARBON AKTIENGESELLSCHAFT

BY:

ADDRESS:     RHEINGAUSTR. 196
             65203 WIESBADEN
ATTENTION:


PHONE:
FAX:


THE ORIGINAL BORROWERS

SGL CARBON AKTIENGESELLSCHAFT

BY:

ADDRESS:     RHEINGAUSTR. 196
             65203 WIESBADEN
ATTENTION:


PHONE:
FAX:


SGL CARBON BETEILIGUNG GMBH

BY:

ADDRESS:     RHEINGAUSTRABE 182
             65203 WIESBADEN
ATTENTION:


PHONE:
FAX:

                                       6


<PAGE>


SGL ACOTEC GMBH

BY:

ADDRESS:     BERGGARTEN 1
             56427 SIERSHAHN
ATTENTION:


PHONE:
FAX:


SGL TECHNOLOGIES GMBH

BY:

ADDRESS:     WERNER-VON-SIEMENS-STRABE 18
             86406 MEITINGEN
ATTENTION:


PHONE:
FAX:


SGL BRAKES GMBH

BY:

ADDRESS:     WERNER-VON-SIEMENS-STRABE 18
             86406 MEITINGEN
ATTENTION:


PHONE:
FAX:


SGL CARBON S.P.A.

BY:

ADDRESS:     PIAZZALE S. TUERR # 5
             I-20149 MILANO
ATTENTION:


PHONE:
FAX:

                                       7

<PAGE>


SGL CARBON S.A.

BY:

ADDRESS:     ZI DE LA GRELA-APDO. 478
             E-15080 LA CORUNA
ATTENTION:


PHONE:
FAX:


SGL CARBON LLC

BY:

ADDRESS:     P.O.BOX 563960
             CHARLOTTE, NC 28256-3960, USA
ATTENTION:

PHONE:
FAX:


THE ORIGINAL GUARANTORS

SGL CARBON AKTIENGESELLSCHAFT

BY:

ADDRESS:     RHEINGAUSTR. 196
             65203 WIESBADEN
ATTENTION:

PHONE:
FAX:


SGL CARBON GMBH

BY:

ADDRESS:     WERNER-VON-SIEMENS-STRABE 18
             86406 MEITINGEN
ATTENTION:


PHONE:
FAX:

                                       8

<PAGE>


SGL CARBON BETEILIGUNG GMBH

BY:

ADDRESS:     RHEINGAUSTRABE 182
             65203 WIESBADEN
ATTENTION:


PHONE:
FAX:


SGL ACOTEC GMBH

BY:

ADDRESS:     BERGGARTEN 1
             56427 SIERSHAHN
ATTENTION:

PHONE:
FAX:


KCH BETEILIGUNGS GMBH

BY:

ADDRESS:     BERGGARTEN 1
             56427 SIERSHAHN
ATTENTION:


PHONE:
FAX:


SGL TECHNOLOGIES GMBH

BY:

ADDRESS:     WERNER-VON-SIEMENS-STRABE 18
             86406 MEITINGEN
ATTENTION:


PHONE:
FAX:


SGL BRAKES GMBH

                                       9

<PAGE>


BY:

ADDRESS:     WERNER-VON-SIEMENS-STRABE 18
             86406 MEITINGEN
ATTENTION:


PHONE:
FAX:


SGL CARBON S.P.A.

BY:

ADDRESS:     PIAZZALE S. TUERR # 5
             I-20149 MILANO
ATTENTION:


PHONE:
FAX:


SGL CARBON S.A.

BY:

ADDRESS:     ZI DE LA GRELA-APDO. 478
             E-15080 LA CORUNA
ATTENTION:


PHONE:
FAX:


SGL CARBON LLC

BY:

ADDRESS:     P.O.BOX 563960
             CHARLOTTE, NC 28256-3960, USA
ATTENTION:


PHONE:
FAX:

                                       10

<PAGE>


THE MANDATED LEAD ARRANGERS

DRESDNER KLEINWORT WASSERSTEIN,
THE INVESTMENT BANKING DIVISION
OF DRESDNER BANK AG

BY:

ADDRESS:     JURGEN-PONTO-PLATZ 1
             60301 FRANKFURT AM MAIN
ATTENTION:   THOMAS MULDNER
             DIRECTOR, CAPITAL MARKETS, DEBT ORIGINATION
             THOMAS.MUELDNER@DRKW.COM

PHONE:       +49-69-713-19267
FAX:         +49-69-713-2342


DEUTSCHE BANK AG

BY:

ADDRESS:     TAUNUSANLAGE 12
             60325 FRANKFURT AM MAIN
ATTENTION:   KARL-HEINZ HERWECK
             GLOBAL CORPORATE FINANCE / SYNDICATED LOANS

PHONE:       +49-69-910-33313
FAX:         +49-69-910-38793




THE FACILITY AGENT AND SECURITY AGENT

DEUTSCHE BANK LUXEMBOURG S.A.

BY:

ADDRESS:     2, BOULEVARD KONRAD ADENAUER
             L-1115 LUXEMBOURG
ATTENTION:   INTERNATIONAL LOANS & AGENCY SERVICES


PHONE:       +352-42122-331/4778
FAX:         +352-42122-287


                                       11


<PAGE>


THE DOCUMENTATION AGENT

DRESDNER KLEINWORT WASSERSTEIN,
THE INVESTMENT BANKING DIVISION
OF DRESDNER BANK AG

BY:

ADDRESS:     JURGEN-PONTO-PLATZ 1
             60301 FRANKFURT AM MAIN
ATTENTION:   THOMAS MULDNER
             DIRECTOR, CAPITAL MARKETS, DEBT ORIGINATION
             THOMAS.MUELDNER@DRKW.COM

PHONE:       +49-69-713-19267
FAX:         +49-69-713-2342


THE LENDERS

DEUTSCHE BANK LUXEMBOURG S.A.

BY:

ADDRESS:     2, BOULEVARD KONRAD ADENAUER
             L-1115 LUXEMBOURG
ATTENTION:   INTERNATIONAL LOANS & AGENCY SERVICES


PHONE:       +352-42122-331/4778
FAX:         +352-42122-287


DRESDNER BANK AG

BY:


ADDRESS:     DRESDNER BANK AUGSBURG
             HOLBEINSTR. 2
             86150 AUGSBURG
ATTENTION:   JURGEN BAUMANN
             JURGEN.BAUMANN@DRESDNER-BANK.COM

PHONE:       +49-821-3254-240
FAX:         +49-821-3254-270


                                       12

<PAGE>


BAYERISCHE LANDESBANK

BY:

ADRESS:      BRIENNER STRASSE 20
             80333 MUNCHEN
ATTENTION:   DR. WOLFGANG HUTTER/DEPT. 2530
             WOLFGANG.HUETTER@BAYERNLB.DE

PHONE        +49-89-2171-22417
FAX:         +49-89-2171-22429


COMMERZBANK AKTIENGESELLSCHAFT

BY:

ADRESS:      KAISERPLATZ
             60261 FRANKFURT AM MAIN
ATTENTION:   BERNARD SCHULTZ/ROLAND THIELE, ZRA IB II
             zra-ib3-doc@commerzbank.com

PHONE:       069-136-20
FAX:         069-136-27111


WEST LB AG

BY:

ADDRESS:     HERZOGSTR. 15
             40217 DUSSELDORF
ATTENTION:   ROLF MUWELER
             ROLF-MUEWELER@WESTLB.DE

PHONE:       +49-211-826-11-659
FAX:         +49-211-826-8752


DZ-BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK

BY:

ADRESS:      PLATZ DER REPUBLIK
             60265 FRANKFURT AM MAIN
ATTENTION:   FRIEDRICH MEYER/GUNTER TUTTENBERG
             friedrich.meyer@dzbank.de/guenter.tuettenberg@dzbank.de

PHONE:       +49-69-7447-6643/+49-69-7447-7848
FAX:         +49-69-7447-3428/+49-69-7447-1511

                                       13

<PAGE>

BAYERISCHE HYPO- UND VEREINSBANK AG

BY:

ADRESS:      NL AUGSBURG
             BAHNHOFSTR. 11
             86150 AUGSBURG
ATTENTION:   ANDREA KNOLL
             ANDREA.KNOELL@HVB.DE

PHONE:       +49-821-316-1501
FAX:         +49-821-316-1583

IKB DEUTSCHE INDUSTRIEBANK AG

BY:

ADRESS:

ATTENTION:


PHONE:
FAX:


KREDITANSTALT FUR WIEDERAUFBAU

BY:

ADDRESS:     PALMENGARTENSTRABE 5-9
             60325 FRANKFURT AM MAIN
ATTENTION:   STEFAN WOLF/ABT. KIIA2
             STEFAN.WOLF@KFW.DE

PHONE.       +49-69-7431-4492
FAX:         +49-69-7431-2016


LB SACHSEN
LANDESBANK SACHSEN GIROZENTRALE

BY:

ADDRESS:     HUMBOLDTSTRABE 25
             04105 LEIPZIG
ATTENTION:   BEATE UECKER
             BEATE.UECKER@SACHSENLB.DE

PHONE:       +49-341-979-3142
FAX:         +49-341-979-3139

                                       14

<PAGE>


MHB MITTELEUROPAISCHE HANDELSBANK AKTIENGESELLSCHAFT
DEUTSCH-POLNISCHE BANK

BY:

ADRESS:

ATTENTION:


PHONE:
FAX:
NASSAUISCHE SPARKASSE

BY:

ADRESS:

ATTENTION:


PHONE:
FAX:


KBC BANK DEUTSCHLAND AKTIENGESELLSCHAFT

BY:

ADRESS:      VOLTASTRA. 81
             60486 FRANKFURT/MAIN
ATTENTION:   PIETER RUBAAK
             PIERTER.RUBAAK@KBC.DE

PHONE:       +49-69-75619325
FAX:         +49-69-75619360


KREISSPARKASSE AUGSBURG

BY:

ADDRESS:     FIRMENKUNDENABTEILUNG
             MARTIN-LUTHER-PLATZ 5
             86150 AUGSBURG
ATTENTION:   GERHARD ROHDE
             GERHARD.ROHDE@KREISSPARKASSE-AUGSBURG.DE

PHONE:       0821-3251-1390
FAX:         0821-3251-1543

                                       15

<PAGE>


LFA FORDERBANK BAYERN

BY:

ADRESS:      KONIGINSTR. 17
             80539 MUNCHEN
ATTENTION:   THOMAS KRAFT/BIRGIT JAKOB
             THOMAS.KRAFT@LFA.DE/BIRGIT.JAKOB@LFA.DE

PHONE:       +49-89-1204-2571/+49-89-2124-2292
FAX:         +49-89-2124-2561
RAIFFEISEN LANDESBANK OBEROSTERREICH REG. GEN. M.B.H.

BY:

ADDRESS:     EUROPAPLATZ 1A
             A-4020 LINZ
ATTENTION:   MAG. MARGARETE MOSER/DR. HELMUT ZEINDLINGER
             M.MOSER@RLBOOE.AT/ZEINDLINGER@RLBOOE.AT

PHONE:       +43-732-6596-4135/+43-732-6596-3113
FAX:         +43-732-6596-4141/+43-732-6596-3131


                                       16