EX-10.1



 





EXHIBIT 10.1




 

 








$1,200,000,000




CREDIT AGREEMENT




Dated as of February 28, 2008




among




SOLUTIA INC.,

as Borrower,




THE LENDERS REFERRED TO HEREIN,




CITIBANK, N.A.,

as Administrative Agent and as Collateral Agent,




GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Syndication Agent,




DEUTSCHE BANK AG, NEW YORK BRANCH,

as Documentation Agent,




and




CITIGROUP GLOBAL MARKETS INC.,

GOLDMAN SACHS CREDIT PARTNERS L.P. and

DEUTSCHE BANK SECURITIES INC.,

as Joint Lead Arrangers and as Joint Bookrunners




 

 






 









 












TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 
	 	 	 	 
	ARTICLE I
	 	 	 
	 	 	 	 
	DEFINITIONS
	 	 	 
	 	 	 	 
	SECTION 1.01.	 	Defined Terms
	 	 	1	 
	SECTION 1.02.	 	Types of Loans and Borrowings
	 	 	37	 
	SECTION 1.03.	 	Terms Generally; Currency Translation; Accounting Terms; GAAP
	 	 	37	 
	SECTION 1.04.	 	Resolution of Drafting Ambiguities
	 	 	38	 
	 	 	 
	 	 	 	 
	ARTICLE II
	 	 	 
	 	 	 	 
	THE CREDITS
	 	 	 
	 	 	 	 
	SECTION 2.01.	 	Commitments
	 	 	39	 
	SECTION 2.02.	 	Procedure for Borrowing
	 	 	39	 
	SECTION 2.03.	 	Conversion and Continuation Options for Loans
	 	 	40	 
	SECTION 2.04.	 	Optional and Mandatory Prepayments of Loans; Repayments of Loans
	 	 	40	 
	SECTION 2.05.	 	Repayment of Loans; Evidence of Debt
	 	 	43	 
	SECTION 2.06.	 	Interest Rates and Payment Dates; Default Interest
	 	 	43	 
	SECTION 2.07.	 	Computation of Interest
	 	 	44	 
	SECTION 2.08.	 	Agent Fees
	 	 	44	 
	SECTION 2.09.	 	Termination of Commitments
	 	 	44	 
	SECTION 2.10.	 	Inability to Determine Interest Rate; Unavailability of Deposits;
Inadequacy of Interest Rate
	 	 	44	 
	SECTION 2.11.	 	Pro Rata Treatment and Payments
	 	 	45	 
	SECTION 2.12.	 	Illegality
	 	 	46	 
	SECTION 2.13.	 	Requirements of Law
	 	 	46	 
	SECTION 2.14.	 	Taxes
	 	 	47	 
	SECTION 2.15.	 	Indemnity
	 	 	50	 
	SECTION 2.16.	 	Change of Lending Office
	 	 	50	 
	SECTION 2.17.	 	Sharing of Setoffs
	 	 	50	 
	SECTION 2.18.	 	Assignment of Commitments Under Certain Circumstances
	 	 	51	 
	SECTION 2.19.	 	Notice of Certain Costs
	 	 	51	 
	 	 	 
	 	 	 	 
	ARTICLE III
	 	 	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES
	 	 	 
	 	 	 	 
	SECTION 3.01.	 	Organization, etc.
	 	 	52	 
	SECTION 3.02.	 	Due Authorization, Non-Contravention, etc.
	 	 	52	 
	SECTION 3.03.	 	Government Approval, Regulation, etc.
	 	 	53	 
	SECTION 3.04.	 	Validity, etc.
	 	 	53	 
	SECTION 3.05.	 	Financial Information
	 	 	53	 
	SECTION 3.06.	 	No Material Adverse Effect
	 	 	54	 
	SECTION 3.07.	 	Litigation
	 	 	54	 






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	 	 	 	 	Page	 
	 
	SECTION 3.08.	 	Compliance with Laws and Agreements
	 	 	54	 
	SECTION 3.09.	 	Ownership of Subsidiaries
	 	 	54	 
	SECTION 3.10.	 	Ownership of Properties
	 	 	55	 
	SECTION 3.11.	 	Intellectual Property
	 	 	56	 
	SECTION 3.12.	 	Taxes
	 	 	56	 
	SECTION 3.13.	 	Pension and Welfare Plans
	 	 	56	 
	SECTION 3.14.	 	Environmental
	 	 	57	 
	SECTION 3.15.	 	Federal Reserve Regulations
	 	 	58	 
	SECTION 3.16.	 	Disclosure; Accuracy of Information; Pro Forma Balance Sheets and
Projected Financial Statements
	 	 	59	 
	SECTION 3.17.	 	Insurance
	 	 	60	 
	SECTION 3.18.	 	Labor Matters
	 	 	60	 
	SECTION 3.19.	 	Solvency
	 	 	60	 
	SECTION 3.20.	 	Consummation of the Reorganization Plan and Related Agreements
	 	 	61	 
	SECTION 3.21.	 	Security Documents
	 	 	61	 
	SECTION 3.22.	 	Use of Proceeds
	 	 	62	 
	SECTION 3.23.	 	Anti-Terrorism Laws
	 	 	62	 
	SECTION 3.24.	 	Status as Senior Debt
	 	 	63	 
	 	 	 
	 	 	 	 
	ARTICLE IV
	 	 	 
	 	 	 	 
	CONDITIONS
	 	 	 
	 	 	 	 
	SECTION 4.01.	 	Effective Date
	 	 	63	 
	SECTION 4.02.	 	Conditions to Each Borrowing
	 	 	69	 
	 	 	 
	 	 	 	 
	ARTICLE V
	 	 	 
	 	 	 	 
	AFFIRMATIVE COVENANTS	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 5.01.	 	Financial Information, Reports, Notices, etc.
	 	 	70	 
	SECTION 5.02.	 	Compliance with Laws, etc.
	 	 	72	 
	SECTION 5.03.	 	Maintenance of Properties
	 	 	73	 
	SECTION 5.04.	 	Insurance
	 	 	73	 
	SECTION 5.05.	 	Books and Records; Visitation Rights; Lender Meetings
	 	 	74	 
	SECTION 5.06.	 	Environmental Covenant
	 	 	74	 
	SECTION 5.07.	 	Information Regarding Collateral
	 	 	75	 
	SECTION 5.08.	 	Existence; Conduct of Business
	 	 	75	 
	SECTION 5.09.	 	Performance of Obligations
	 	 	76	 
	SECTION 5.10.	 	Casualty and Condemnation
	 	 	76	 
	SECTION 5.11.	 	Pledge of Additional Collateral
	 	 	76	 
	SECTION 5.12.	 	Further Assurances
	 	 	77	 
	SECTION 5.13.	 	Use of Proceeds
	 	 	77	 
	SECTION 5.14.	 	Payment of Taxes and Claims
	 	 	77	 
	SECTION 5.15.	 	Additional Guarantors
	 	 	78	 
	SECTION 5.16.	 	Interest Rate Protection
	 	 	78	 
	SECTION 5.17.	 	Post-Closing Covenants
	 	 	78	 
	SECTION 5.18.	 	Designation of Subsidiaries
	 	 	78	 
	SECTION 5.19.	 	Permitted Restructuring
	 	 	79	 
	SECTION 5.20.	 	Certain Properties
	 	 	79	 






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	 	 	 	 	Page	 
	 
	ARTICLE VI
	 	 	 
	 	 	 	 
	NEGATIVE COVENANTS
	 	 	 
	 	 	 	 
	SECTION 6.01.	 	Indebtedness
	 	 	80	 
	SECTION 6.02.	 	Liens
	 	 	83	 
	SECTION 6.03.	 	Fundamental Changes; Line of Business
	 	 	87	 
	SECTION 6.04.	 	Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	87	 
	SECTION 6.05.	 	Asset Sales
	 	 	90	 
	SECTION 6.06.	 	Sale and Leaseback Transactions
	 	 	91	 
	SECTION 6.07.	 	Restricted Payments
	 	 	92	 
	SECTION 6.08.	 	Transactions with Affiliates
	 	 	92	 
	SECTION 6.09.	 	Restrictive Agreements
	 	 	93	 
	SECTION 6.10.	 	Amendments or Waivers of Certain Documents; Prepayments of
Certain Indebtedness
	 	 	94	 
	SECTION 6.11.	 	Accounting Treatment; Fiscal Year
	 	 	94	 
	SECTION 6.12.	 	Fixed Charge Coverage Ratio
	 	 	94	 
	SECTION 6.13.	 	Total Leverage Ratio
	 	 	95	 
	SECTION 6.14.	 	Capital Expenditures
	 	 	96	 
	SECTION 6.15.	 	Hedging Agreements
	 	 	96	 
	SECTION 6.16.	 	Assets, Liabilities and Actions of SFC.
	 	 	97	 
	 	 	 
	 	 	 	 
	ARTICLE VII
	 	 	 
	 	 	 	 
	EVENTS OF DEFAULT
	 	 	 
	 	 	 	 
	SECTION 7.01.	 	Listing of Events of Default
	 	 	97	 
	SECTION 7.02.	 	Action if Bankruptcy
	 	 	99	 
	SECTION 7.03.	 	Action if Other Event of Default
	 	 	99	 
	 	 	 
	 	 	 	 
	
ARTICLE VIII
	 	 	 
	 	 	 	 
	THE AGENTS
	 	 	 
	 	 	 	 
	SECTION 8.01.	 	Appointment and Authority
	 	 	100	 
	SECTION 8.02.	 	Agents Individually
	 	 	100	 
	SECTION 8.03.	 	Duties of Agents; Exculpatory Provisions
	 	 	101	 
	SECTION 8.04.	 	Reliance by Agents
	 	 	102	 
	SECTION 8.05.	 	Delegation of Duties
	 	 	102	 
	SECTION 8.06.	 	Resignation of Agents
	 	 	102	 
	SECTION 8.07.	 	Non-Reliance on Agents and Other Lenders
	 	 	103	 
	SECTION 8.08.	 	No Other Duties, etc
	 	 	104	 
	SECTION 8.09.	 	Security Trust Deed
	 	 	104	 
	 	 	 
	 	 	 	 
	ARTICLE IX
	 	 	 
	 	 	 	 
	
MISCELLANEOUS
	 	 	 
	 	 	 	 
	SECTION 9.01.	 	Notices
	 	 	104	 
	SECTION 9.02.	 	Survival of Agreement
	 	 	106	 






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	 	 	 	 	Page	 
	 
	SECTION 9.03.	 	Binding Effect
	 	 	106	 
	SECTION 9.04.	 	Successors and Assigns
	 	 	106	 
	SECTION 9.05.	 	Expenses; Indemnity
	 	 	109	 
	SECTION 9.06.	 	Right of Setoff
	 	 	110	 
	SECTION 9.07.	 	Applicable Law
	 	 	111	 
	SECTION 9.08.	 	Waivers; Amendment
	 	 	111	 
	SECTION 9.09.	 	Interest Rate Limitation
	 	 	113	 
	SECTION 9.10.	 	Entire Agreement
	 	 	114	 
	SECTION 9.11.	 	WAIVER OF JURY TRIAL
	 	 	114	 
	SECTION 9.12.	 	Severability
	 	 	114	 
	SECTION 9.13.	 	Counterparts
	 	 	114	 
	SECTION 9.14.	 	Headings
	 	 	114	 
	SECTION 9.15.	 	Jurisdiction; Consent to Service of Process
	 	 	114	 
	SECTION 9.16.	 	Confidentiality
	 	 	115	 
	SECTION 9.17.	 	Posting of Approved Electronic Communications
	 	 	116	 
	SECTION 9.18.	 	Treatment of Information
	 	 	117	 
	SECTION 9.19.	 	USA PATRIOT Act Notice
	 	 	118	 
	SECTION 9.20.	 	Intercreditor Agreement
	 	 	118	 
	SECTION 9.21.	 	No Fiduciary Duty
	 	 	119	 






-iv-









 






	 	 	 
	EXHIBIT A

	 	Form of Administrative Questionnaire
	EXHIBIT B

	 	Form of Borrowing Request
	EXHIBIT C

	 	Form of Assignment and Assumption
	EXHIBIT D

	 	Form of Compliance Certificate
	EXHIBIT E

	 	Form of Indemnity, Subrogation and Contribution Agreement
	EXHIBIT F

	 	Form of Note
	EXHIBIT G

	 	Form of Closing Certificate
	EXHIBIT H

	 	Form of Guarantee Agreement
	EXHIBIT I

	 	Form of Pledge Agreement
	EXHIBIT J

	 	Form of Security Agreement
	EXHIBIT K

	 	Form of Exemption Certificate
	EXHIBIT L

	 	Form of Solvency Certificate
	EXHIBIT M

	 	Form of Mortgage
	 
	 	 
	SCHEDULE 1.01(a)

	 	Immaterial Restricted Subsidiaries
	SCHEDULE 1.01(b)

	 	Permitted Restructuring
	SCHEDULE 1.01(c)

	 	Specified Asset Sales
	SCHEDULE 1.01(d)

	 	Existing Joint Ventures
	SCHEDULE 2.01

	 	Lenders and Commitments
	SCHEDULE 3.05

	 	Financial Information
	SCHEDULE 3.09(a)

	 	Subsidiaries
	SCHEDULE 3.09(b)

	 	Securities
	SCHEDULE 3.10(a)

	 	Options, Rights of First Refusal, Etc.
	SCHEDULE 3.10(b)

	 	Leased and Owned Real Property
	SCHEDULE 3.17

	 	Insurance
	SCHEDULE 4.01(f)(i)

	 	Local and Foreign Counsel Jurisdictions (Pledged Equity Interests)
	SCHEDULE 4.01(f)(ii)

	 	Local and Foreign Counsel Jurisdictions (Non-U.S. Pledge Agreements
and Security Documents)
	SCHEDULE 4.01(u)

	 	Initial Mortgaged Properties
	SCHEDULE 4.01(u)(C)

	 	Title Insurance Amounts
	SCHEDULE 5.17(a)

	 	Post-Closing Covenants
	SCHEDULE 5.17(b)

	 	Post-Closing Covenants
	SCHEDULE 5.19

	 	Permitted Restructuring Conditions
	SCHEDULE 5.20

	 	Certain Properties
	SCHEDULE 6.01(ii)(A)

	 	Existing Indebtedness
	SCHEDULE 6.01(ii)(B)

	 	Existing Indebtedness
	SCHEDULE 6.01(xxi)

	 	Intercompany Notes
	SCHEDULE 6.02(iv)(A)

	 	Existing Liens
	SCHEDULE 6.02(iv)(B)

	 	Existing Liens
	SCHEDULE 6.02(xxvi)

	 	Title Policy Exclusions
	SCHEDULE 6.04

	 	Existing Investments
	SCHEDULE 6.09

	 	Existing Restrictions






-v-









 






          CREDIT AGREEMENT (this “Agreement”) dated as of February 28, 2008, among SOLUTIA INC.,
a Delaware corporation (the “Borrower”); each of the Lenders (as defined in Section 1.01);
CITIBANK, N.A. (“Citibank”), as administrative agent for the Lenders (together with its
successors in such capacity, the “Administrative Agent”), and as collateral agent for the
Secured Parties (together with its successors in such capacity, the “Collateral Agent”);
GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”), as syndication agent (in such capacity, the
“Syndication Agent”); DEUTSCHE BANK AG, NEW YORK BRANCH (“DBNY”), as documentation
agent (in such capacity, the “Documentation Agent”); and CITIGROUP GLOBAL MARKETS INC.
(“CGMI”), GSCP and DEUTSCHE BANK SECURITIES INC. (“DBSI”), as joint lead arrangers
and as joint bookrunners (collectively, in such capacities, the “Joint Lead Arrangers and
Bookrunners”).




          The parties hereto agree as follows:




ARTICLE I




DEFINITIONS




          SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the meanings
specified below:




          “ABR Borrowing” means a Borrowing comprised of ABR Loans.




          “ABR Loan” means any Loan bearing interest at a rate determined by reference to the
Alternate Base Rate in accordance with the provisions of Article II.




          “Acquired Permitted Capital Expenditure Amount” has the meaning assigned to such term
in Section 6.14(a).




          “Acquisition Consideration” means the purchase consideration for any Permitted
Acquisition and all other payments by the Borrower or any of its Restricted Subsidiaries in
exchange for, or as part of, or in connection with any Permitted Acquisition, whether paid in cash
or by exchange of Equity Interests or of assets, by the assumption of Indebtedness or otherwise and
whether payable at or prior to the consummation of such Permitted Acquisition or deferred for
payment at any future time, whether or not any such future payment is subject to the occurrence of
any contingency, and includes any and all payments representing the purchase price and any
assumptions of Indebtedness, “earn-outs” and other agreements to make any payment the amount of
which is, or the terms of payment of which are, in any respect subject to or contingent upon the
revenues, income, cash flow or profits (or the like) of any Person or business.




          “Activities” has the meaning assigned to such term in Section 8.02(b).




          “Additional Collateral” has the meaning assigned to such term in Section 5.11.




          “Adjusted LIBO Rate” means, with respect to any Interest Period for any Eurodollar
Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the LIBO
Rate by (b)(i) a percentage equal to 100% minus (ii) the reserve percentage applicable two Business
Days before the first day of such Interest Period under regulations issued from time to time by the
Board of Governors for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System
in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with
respect to any other category of liabilities that includes deposits by reference to which the LIBO
Rate is determined)




 









 







having a term equal to such Interest Period; notwithstanding the calculation of
Adjusted LIBO Rate set forth herein, for all purposes set forth in the Loan Documents, except for
purposes of determining Consolidated Interest Expense, for the period commencing on the Effective
Date and ending on the fourth anniversary of the Effective Date, the applicable Adjusted LIBO Rate
shall be no less than 3.50%.




          “Administrative Agent” has the meaning assigned to such term in the preamble hereto.




          “Administrative Questionnaire” means an Administrative Questionnaire in the form of
Exhibit A or otherwise in the form supplied by the Administrative Agent.




          “Affiliate” of any Person means any other Person which, directly or indirectly through
one or more intermediaries, Controls, is Controlled by or is under common Control with such Person
(excluding any trustee under, or any committee with responsibility for administering, any Plan);
provided, however, that for purposes of Section 6.08, the term “Affiliate” shall
also include (i) any Person that directly or indirectly owns more than 10% of Equity Interests
having ordinary voting power for the election of directors (or Persons performing similar
functions) of the Person specified or (ii) any Person that is an executive officer or director of
the Person specified.




          “Agent Fees” has the meaning assigned to such term in Section 2.08(a).




          “Agents’ Groups” has the meaning assigned to such term in Section 8.02(b).




          “Agents” means the Administrative Agent and the Collateral Agent.




          “Agreement” has the meaning assigned to such term in the preamble hereto.




          “Alternate Base Rate” means, with respect to any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall be equal at all times
to the highest of the following:




          (a) the rate of interest announced publicly by Citibank in New York, New York, from time to
time, as Citibank’s base rate;




          (b) the sum (adjusted to the nearest 0.25% or, if there is no nearest 0.25%, to the next
higher 0.25%) of (i) 0.5% per annum, plus (ii) the rate per annum obtained by dividing (A)
the latest three-week moving average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United States money market banks, such
three-week moving average being determined weekly on each Monday (or, if any such day is not a
Business Day, on the next succeeding Business Day) for the three-week period ending on the previous
Friday by Citicorp on the basis of such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by Citibank, by (B) a percentage
equal to 100% minus the average of the daily percentages specified during such three-week period by
the Board of Governors for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) for Citibank in respect of liabilities
consisting of or including (among other liabilities) three-month Dollar nonpersonal time deposits
in the United States plus (iii) the average during such three-week period of the maximum
annual assessment rates estimated by Citibank for determining the then current annual
assessment payable




-2-









 







by Citibank to the Federal Deposit Insurance Corporation (or any successor) for
insuring Dollar deposits in the United States; and




          (c) the sum of (i) 0.5% per annum plus (ii) the Federal Funds Rate.




          “Anti-Terrorism Laws” has the meaning assigned to such term in Section 3.23(a).




          “Applicable Margin” means, for any day, (a) 4.00% per annum, in the case of ABR Loans,
and (b) 5.00% per annum, in the case of Eurodollar Loans.




          “Approved Electronic Communications” means each Communication that any Loan Party is
obligated to, or otherwise chooses to, provide to the Administrative Agent or the Collateral Agent
pursuant to any Loan Document or the transactions contemplated therein, including any financial
statement, financial and other report, notice, request, certificate and other information material;
provided, however, that, solely with respect to delivery of any such Communication
by any Loan Party to the Administrative Agent and without limiting or otherwise affecting either
the Administrative Agent’s right to effect delivery of such Communication by posting such
Communication to the Approved Electronic Platform or the protections afforded hereby to the
Administrative Agent in connection with any such posting, “Approved Electronic Communication” shall
exclude (i) any notice of borrowing, notice of conversion or continuation, and any other notice,
demand, communication, information, document and other material relating to a request for a new, or
a conversion of an existing, Borrowing, (ii) any notice pursuant to Section 2.04 and any other
notice relating to the payment of any principal or other amount due under any Loan Document prior
to the scheduled date therefor, (iii) all notices of any Default or Event of Default and (iv) any
notice, demand, communication, information, document and other material required to be delivered to
satisfy any of the conditions set forth in Article IV or any other condition to any Borrowing
hereunder or any condition precedent to the effectiveness of this Agreement.




          “Approved Electronic Platform” has the meaning assigned to such term in Section
9.17(a).




          “Asset Sale” means any direct or indirect sale, transfer, lease (as lessor),
conveyance or other disposition (including by way of merger or consolidation and including any Sale
and Leaseback Transaction) by the Borrower or any of its Restricted Subsidiaries of any of its
Property (other than dispositions of cash and cash equivalents in the ordinary course of its
business), including any sale or issuance of any Equity Interests of any Subsidiary;
provided that any such sales, transfers, leases, conveyances or other dispositions of
Property and/or such sales or issuances of Equity Interests (i) from a Loan Party to another Loan
Party or (ii) by a Non-Guarantor Restricted Subsidiary to any other Non-Guarantor Restricted
Subsidiary shall not constitute Asset Sales under the Loan Documents.




          “Asset Sale Cap” means, as of any date of determination, an amount equal to 5.0% of
Consolidated Net Tangible Assets as determined as at the end of the most recently ended Fiscal Year
for which financial statements have been delivered, or are required to have been delivered,
pursuant to Sections 4.01(h) or 5.01(b) as of the date of determination.




          “Asset Sale Prepayment Event” means any Asset Sale, except (a) Asset Sales permitted
by Section 6.05 (other than Sections 6.05(viii) and 6.05(xii) thereof), (b) Small Asset Sales and
(c) any such transaction or series of transactions which, if otherwise constituting an Asset Sale
Prepayment Event, do not generate Net Proceeds in excess of $5.0 million (or, when taken together
with all other such
transactions (and any Destructions and Takings in such Fiscal Year), do not generate Net
Proceeds in excess




-3-









 







of $25.0 million in the aggregate in such Fiscal Year); provided that
each Specified Asset Sale shall constitute an Asset Sale Prepayment Event.




          “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section
9.04(b)), and accepted by the Administrative Agent in accordance with Section 9.04(b), in the form
of Exhibit C or such other form as shall be approved by the Administrative Agent.




          “Authorized Officer” means, with respect to the Borrower, those of its officers whose
signature and incumbency has been certified to the Administrative Agent, the Collateral Agent and
the Lenders by the Secretary of the Borrower in a certificate dated the Effective Date, or any
successor certificate thereto.




          “Bankruptcy Code” means the United States Bankruptcy Code.




          “Bankruptcy Court” means the United States Bankruptcy Court for the Southern District
of New York.




          “Base Amount” has the meaning assigned to such term in Section 6.14(a).




          “Base Rate” means the rate of interest per annum publicly announced from time to time
by the Administrative Agent as its base rate in effect at its principal office in New York City
(the Base Rate not being intended to be the lowest rate of interest charged by the Administrative
Agent in connection with extensions of credit to debtors) (any change in such rate announced by the
Administrative Agent shall take effect at the opening of business on the day specified in the
public announcement of such change).




          “Board of Governors” means the Board of Governors of the Federal Reserve System of the
United States, or any successor thereto.




          “Borrower” has the meaning assigned to such term in the preamble to this Agreement.




          “Borrowing” means a Loan or group of Loans to the Borrower of the same Type made
(including through a conversion or continuation) by the applicable Lenders on a single date and as
to which a single Interest Period is in effect.




          “Borrowing Date” means any Business Day specified in a notice pursuant to Section 2.02
as a date on which the Borrower requests Loans to be made hereunder.




          “Borrowing Request” has the meaning assigned to such term in Section 2.02(a).




          “Bridge Administrative Agent” means Citibank, in its capacity as administrative agent
under the Bridge Credit Agreement, together with its successors in such capacity.




          “Bridge Credit Agreement” means that certain Credit Agreement, dated as of the date
hereof, among the Borrower, as borrower, the lenders from time to time party thereto, the Bridge
Administrative Agent, GSCP, as syndication agent, DBNY, as documentation agent and CGMI, GSCP and
DBSI, as joint lead arrangers and as joint bookrunners, as amended, restated, supplemented or
modified from time to time to the extent permitted by this Agreement.




-4-









 








          “Bridge Loan Documents” means the Bridge Credit Agreement and the other “Loan
Documents” as defined in the Bridge Credit Agreement, including the guarantees and the notes issued
thereunder.




          “Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to close.




          “Capital Expenditures” means, for any period, any and all expenditures made by the
Borrower or any of its Restricted Subsidiaries in such period for assets added to or reflected in
its property, plant and equipment accounts or other similar capital asset accounts or comparable
items or any other capital expenditures that are, or should be, set forth as “additions to plant,
property and equipment” on the financial statements of the Borrower and its Restricted Subsidiaries
prepared in accordance with GAAP, whether such asset is purchased for cash or by the incurrence of
Indebtedness, accrued as a liability or otherwise. Notwithstanding the foregoing, Capital
Expenditures shall not include, without duplication, (a) capital expenditures funded with Net
Proceeds which represent the repair, replacement, substitution, restoration of or reinvestment in
property in accordance with Section 2.04(b), (b) capital expenditures in respect of the purchase
price of equipment to the extent the consideration therefor consists of any combination of
equipment or other property traded in at the time of such purchase pursuant to an Asset Sale
permitted under Section 6.05(xvi) or (c) expenditures that constitute Permitted Acquisitions or
Investments permitted under Section 6.04(xiv).




          Notwithstanding the foregoing, Capital Expenditures for the Fiscal Quarter ended September 30,
2007 shall be deemed to be $32.0 million.




          “Capital Lease Obligations” means all monetary obligations of the Borrower and its
Restricted Subsidiaries under any leasing or similar arrangement conveying the right to use real or
personal property, or a combination thereof, which, in accordance with GAAP, is required to be
classified and accounted for as capital leases, and the amount of such monetary obligations shall
be the capitalized amount thereof determined in accordance with GAAP (except for temporary
treatment of construction-related expenditures paid by any Person other than the Borrower or any of
its Subsidiaries under EITF 97-10, “The Effect of Lessee Involvement in Asset Construction”, which
will ultimately be treated as operating leases upon a Sale and Leaseback Transaction permitted
under this Agreement) and the stated maturity thereof shall be the date of the last payment of rent
or any other amount due under such lease or other arrangement prior to the first date on which such
lease may be terminated by the lessee without payment of a penalty.




          “Captive Insurance Restricted Subsidiary” means any Restricted Subsidiary that is
subject to regulation as an insurance company under applicable Requirements of Law.




          “Cash Equivalents” means Permitted Investments (other than as described in clause (i)
of the definition thereof).




          “Cash Interest Expense” means, for any period, Consolidated Interest Expense for such
period, excluding any such Consolidated Interest Expense not payable in cash (such as, for example,
amortization of discount and amortization of debt issuance costs).




          “CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, 42 U.S.C. § 9601 et seq.




-5-









 








          “CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability
Information System List.




          “CGMI” has the meaning assigned to such term in the preamble hereto.




          “Change of Control” means any one or more of the following events shall occur and be
continuing:




          (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause such person or group shall
be deemed to have “beneficial ownership” of all securities that such person or group has
the right to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of Voting Stock representing 35% or more (or 40%
or more in the case of any such “person” or “group” that is, on the Effective Date, the
beneficial owner (as defined above) of 25% or more of such Voting Stock after giving effect
to the Equity Rights Offering, the Creditors Rights Offering and the substantial
consummation of the Reorganization Plan) of the voting power of the total outstanding
Voting Stock of the Borrower;




          (ii) during any period of two consecutive years, individuals who at the beginning of
such period constituted the board of directors of the Borrower (together with any new
directors whose election to the Board of Directors or whose nomination for election by the
shareholders of the Borrower was approved by a vote of the majority of the directors of the
Borrower then still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for any reason
to constitute a majority of the board of directors of the Borrower then in office; or




          (iii) at any time a “Change of Control” (or any other defined term having a similar
purpose) occurs under any Material Indebtedness.




          For purposes of this definition, a Person shall not be deemed to have beneficial ownership of
Voting Stock subject to a stock purchase agreement, merger agreement or similar agreement until the
consummation of the transactions contemplated by such agreement.




          “Charges” has the meaning assigned to such term in Section 9.09.




          “Citibank” has the meaning assigned to such term in the preamble hereto.




          “Citicorp” means Citicorp USA, Inc.




          “Closing Certificate” means a certificate substantially in the form of Exhibit
G.




          “Code” means the Internal Revenue Code of 1986, as amended.




          “Collateral” means, collectively, each Mortgaged Property and any and all other
Property of whatever kind and nature subject or purported to be subject from time to time to a Lien
under any Security Document.




          “Collateral Agent” has the meaning assigned to such term in the preamble hereto.




-6-









 








          “Commitment” means, with respect to each Lender, the commitment, if any, of such
Lender to make a Loan hereunder on the Effective Date. The initial amount of each Lender’s
Commitment is set forth on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount
of the Lenders’ Commitments is $1,200.0 million.




          “Commitment Letter” means the Commitment Letter, dated October 25, 2007, among CGMI,
GSCP, DBTCA, DBSI and the Borrower.




          “Communications” means each notice, demand, communication, information, document and
other material provided for hereunder or under any other Loan Document or otherwise transmitted
between the parties hereto relating this Agreement, the other Loan Documents, any Loan Party or its
Affiliates, or the transactions contemplated by this Agreement or the other Loan Documents,
including all Approved Electronic Communications.




          “Compliance Certificate” has the meaning assigned to such term in Section 5.01(a) and
shall be substantially in the form of Exhibit D.




          “Confirmation Order” means a final non-appealable order entered by the Bankruptcy
Court that (i) confirms the Reorganization Plan, (ii) is not subject to any stay or appeal of any
kind and (iii) is in a form reasonably acceptable to the Joint Lead Arrangers and Bookrunners.




          “Consolidated Current Assets” means, as at any date of determination, the total assets
of the Borrower and its Restricted Subsidiaries which may properly be classified as current assets
on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries in accordance with
GAAP (other than cash and Cash Equivalents).




          “Consolidated Current Liabilities” means, as at any date of determination, the total
liabilities of the Borrower and its Restricted Subsidiaries which may properly be classified as
current liabilities on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries
in accordance with GAAP (other than the current portion of any Loans).




          “Consolidated EBITDA” means, for any period, the sum of Consolidated Net Income for
such period, plus, without duplication, the following to the extent deducted in calculating
such Consolidated Net Income: (a) Consolidated Interest Expense for such period, (b) income tax
expense determined on a consolidated basis in accordance with GAAP, (c) depreciation expense
determined on a consolidated basis in accordance with GAAP, (d) amortization expense determined on
a consolidated basis in accordance with GAAP, (e) amounts attributable to minority interest, (f)
any unusual or non-recurring non-cash charges (including any impairment charge or asset write-off
pursuant to GAAP) (provided that if any such non-cash charge represents an accrual or reserve for
potential cash items in any future period, the cash payment in respect thereof in such future
period shall be subtracted from Consolidated EBITDA to such extent, and excluding amortization of a
prepaid cash item that was paid in a prior period), (g) non-cash stock compensation expenses,
including any such non-cash expenses arising from stock options, stock grants or other
equity-incentive programs, the granting of stock appreciation rights and similar arrangements, (h)
to the extent the related loss is not added back in calculating such Consolidated Net Income,
proceeds of business interruption insurance policies to the extent of such related loss, (i) costs
and expenses arising from or related to the incurrence or issuance of, or otherwise in connection
with, the Equity Rights Offering, the Loan Documents, the Bridge Loan Documents and the Revolving
Credit Loan Documents and otherwise arising from or related to the Transactions or the Borrower’s
emergence from




-7-









 







chapter 11 protection, in each case which were incurred on or prior to the first anniversary
of the Effective Date, (j) for purposes of calculations pursuant to Section 6.12 and 6.13 only,
one-time cash charges associated with plant closures and other restructuring charges, in all cases
(i) not exceeding $15.0 million during any Test Period and (ii) not exceeding $50.0 million in the
aggregate prior to Maturity Date (excluding any such charges pursuant to the Transactions), and (k)
to the extent non-recurring and not capitalized, any fees, costs and expenses of the Borrower and
its Restricted Subsidiaries incurred as a result of Permitted Acquisitions, Investments, Asset
Sales permitted hereunder and the issuance of Equity Interests or Indebtedness permitted hereunder;
and minus, without duplication, (i) all non-cash items increasing such Consolidated Net
Income (excluding (x) any non-cash item to the extent that it represents an accrual of cash
receipts to be received in a subsequent period and (y) the amount attributable to minority
interests), (ii) any unusual or non-recurring gains and (iii) amounts paid in cash as dividends or
other distributions to holders of minority interests.




          Other than for purposes of calculating Excess Cash Flow, Consolidated EBITDA shall be
calculated on a Pro Forma Basis to give effect to the Transactions, the acquisition of Acquired
Technology, Inc. which was acquired by the Borrower on November 13, 2007, any Permitted Acquisition
and Asset Sales consummated at any time on or after the first day of the Test Period thereof as if
the Transactions and each such Permitted Acquisition and Asset Sale had been effected on the first
day of such Test Period.




          Notwithstanding any of the foregoing, (i) Consolidated EBITDA for the Fiscal Quarter ended
June 30, 2007 shall be deemed to be $101.2 million and (ii) Consolidated EBITDA for the Fiscal
Quarter ended September 30, 2007 shall be deemed to be $105.8 million.




          “Consolidated Fixed Charges” means, for any period, the sum, without duplication, of:





     (a) Cash Interest Expense for such period (net of interest income actually received in
cash during such period);




     (b) all cash payments in respect of income taxes made during such period (net of any
cash refund in respect of income taxes actually received during such period);




     (c) the principal amount of all scheduled amortization payments on all Indebtedness
(including the principal component of all Capital Lease Obligations) of the Borrower and its
Restricted Subsidiaries for such period (as determined on the first day of the respective
period); and




     (d) to the extent not included in Cash Interest Expense for such period, all cash
dividends on any series of Disqualified Equity Interests of the Borrower or any of its
Restricted Subsidiaries declared or paid (without duplication) during such period (other
than dividend payments to the Borrower or any of its Restricted Subsidiaries).



          For purposes of determining Consolidated Fixed Charges as of any date for the period of four
consecutive Fiscal Quarters ended March 31, 2008, June 30, 2008, September 30, 2008 and December
31, 2008, (i) the items described in clauses (a) and (d) of the definition of Consolidated Fixed
Charges shall be deemed to be equal to the product of (x) such items described in clauses (a) and
(d) of the definition of Consolidated Fixed Charges, as applicable, for the period from the
Effective Date to the date in question and (y) a fraction, the numerator of which is 365 and the
denominator of which is the number of days since the Effective Date, and (ii) the items described
in clause (c) of the definition of Consolidated Fixed Charges shall be deemed to be equal to (w)
such items described in clause (c) of the definition of




-8-









 







Consolidated Fixed Charges for the Fiscal Quarter ended March 31, 2008, multiplied by 4, (x)
such items described in clause (c) of the definition of Consolidated Fixed Charges for the two
consecutive Fiscal Quarters ended June 30, 2008, multiplied by 2, (y) such items described in
clause (c) of the definition of Consolidated Fixed Charges for the three consecutive Fiscal
Quarters ended September 30, 2008, multiplied by 4/3, and (z) such items described in clause (c) of
the definition of Consolidated Fixed Charges for the four consecutive Fiscal Quarters ended
December 31, 2008, multiplied by 1, respectively.




          “Consolidated Indebtedness” means, at a particular date, the aggregate stated balance
sheet amount of all Indebtedness of the Borrower and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP at such date, plus, without duplication, the principal
amount of Indebtedness of the Borrower and its Restricted Subsidiaries constituting original issue
discount.




          “Consolidated Interest Expense” means, for any period, the sum, without duplication,
of:




          (a) the interest expense of the Borrower and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently applied (including (i)
amortization of debt issuance costs and debt discount, (ii) the net payments, if any, under Hedging
Agreements (including amortization of discounts), (iii) the interest portion of any deferred
payment obligation, (iv) accrued interest and (v) commissions, discounts and other fees and charges
incurred in respect of letters of credit or bankers-acceptance financings);




          (b) the interest component of all Capital Lease Obligations paid or accrued during such
period;




          (c) all interest capitalized during such period; and




          (d) the product of (x) the amount of all dividends on any series of Preferred Equity Interests
of the Borrower and its Restricted Subsidiaries (other than dividends paid in Equity Interests
(other than Disqualified Equity Interests) and other than dividends paid to the Borrower or to a
Restricted Subsidiary) paid, accrued or scheduled to be paid or accrued during such period
times (y) a fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated Federal, state and local tax rate of the Borrower,
expressed as a decimal.




          Consolidated Interest Expense and Cash Interest Expense (other than for purposes of
calculating Excess Cash Flow) shall be calculated on a Pro Forma Basis to give effect to any
Indebtedness incurred, assumed or permanently repaid or extinguished during the relevant Test
Period in connection with the Transactions, any Permitted Acquisitions and Asset Sales as if such
incurrence, assumption, repayment or extinguishing had been effected on the first day of such Test
Period.




          “Consolidated Net Income” means, for any period, the net income (or loss) of the
Borrower and its Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP consistently applied; provided that there shall not be included in
such Consolidated Net Income:





     (a) any extraordinary gains or losses or expenses;




     (b) any net income or loss of any Person if such Person is not a Restricted Subsidiary,
except Consolidated Net Income shall be increased by the amount of cash actually distributed by
such Person during such period to the Borrower or a Restricted Subsidiary as a dividend or other dis-




-9-









 







tribution (subject, in the case of a dividend or other distribution paid to a Restricted
Subsidiary, to the limitations contained in clause (c) below);




     (c) the net income of any Restricted Subsidiary to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income is not at the
time permitted, directly or indirectly, without prior approval (that has not been obtained),
pursuant to the terms of its charter or any agreement, instrument and governmental regulation
applicable to such Restricted Subsidiary or its equityholders;




     (d) any gain or loss realized upon the sale or other disposition of (x) any assets
(including pursuant to Sale and Leaseback Transactions) which is not sold or otherwise disposed
of in the ordinary course of business or (y) any Equity Interests of any Person;




     (e) any net after-tax income or loss from discontinued operations; and




     (f) the cumulative effect of a change in accounting principles.



          “Consolidated Net Indebtedness” means, at a particular date, (a) the aggregate stated
balance sheet amount of all Funded Indebtedness of the Borrower and its Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP at such date less (b)
Unrestricted cash and Unrestricted Cash Equivalents of the Borrower and its Restricted Subsidiaries
on such date.




          “Consolidated Net Interest Expense” means, for any period, Consolidated Interest
Expense for such period, net of gross interest income of the Borrower and its Restricted
Subsidiaries for such period.




          “Consolidated Net Tangible Assets” means, as of any date of determination, the total
assets less the sum of (i) the goodwill, net, and other intangible assets and (ii) all
Consolidated Current Liabilities, in each case, reflected on the consolidated balance sheet of the
Borrower and its Restricted Subsidiaries as at the end of the most recently ended Fiscal Quarter
for which financial statements have been or are required to have been delivered pursuant to
Sections 4.01(h), 5.01(a) or 5.01(b), as applicable, as of the date of determination, determined on
a consolidated basis in accordance with GAAP (and, in the case of any determination relating to any
Investment, on a Pro Forma Basis including any property or assets being acquired in connection
therewith).




          “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person whether by ownership of voting
securities, by contract or otherwise, and the terms “Controlling” and “Controlled”
shall have meanings correlative thereto.




          “Creditors Rights Offering” means an equity rights offering pursuant to which certain
eligible creditors purchase shares of the Borrower’s common Equity Interests to occur on the
Effective Date.




          “DBNY” has the meaning assigned to such term in the preamble hereto.




          “DBSI” has the meaning assigned to such term in the preamble hereto.




          “Debt Incurrence” has the meaning assigned to such term in Section 2.04(b)(i).




-10-









 








          “Debt Service” means, for any period, Cash Interest Expense for such period net of
gross interest income of the Borrower and its Restricted Subsidiaries for such period plus
scheduled principal amortization of Consolidated Indebtedness for such period.




          “Default” means any Event of Default and any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.




          “Defaulting Lender” has the meaning assigned to such term in Section 2.11(b).




          “Designation Date” has the meaning assigned to such term in Section 5.18.




          “Destruction” means any and all damage to, or loss or destruction of, or loss of title
to, all or any portion of the Property of the Borrower or any of its Restricted Subsidiaries.




          “Disqualified Equity Interest” means any Equity Interest which, by its terms (or by
the terms of any security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is or may become redeemable or repurchaseable at the option of the
holder thereof, in whole or in part, or (iii) is convertible or exchangeable (unless at the sole
option of the issuer thereof) for Indebtedness or Equity Interests described in this definition, in
each case, prior to the 366th day following the Maturity Date.




          “Documentation Agent” has the meaning assigned to such term in the preamble hereto.




          “Dollar Equivalent” means, as to any amount denominated in any currency other than
Dollars as of any date of determination, the amount of Dollars that would be required to purchase
the amount of such currency based upon the Spot Selling Rate as of such date, and as to any amount
denominated in Dollars, such amount in Dollars.




          “Dollars” or “$” means lawful money of the United States of America.




          “Domestic Person” means any “United States person” under and as defined in Section
7701(a)(30) of the Code.




          “Domestic Restricted Subsidiary” means any Restricted Subsidiary that is not a
Non-U.S. Restricted Subsidiary.




          “Effective Date” means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 9.08).




          “Engagement Letter” means the Engagement Letter, dated October 25, 2007, among CGMI,
GS&C, DBSI and the Borrower.




          “Environment” means ambient and indoor air, surface water and groundwater (including
potable water, navigable water and wetlands), the land surface or subsurface strata, natural
resources such as flora and fauna, or as otherwise defined in any Environmental Law.




          “Environmental Claim” means any accusation, allegation, notice of violation, claim,
demand, order, directive, proceeding, cost recovery action or other cause of action by, or on
behalf of, any Governmental Authority or any other Person for damages, injunctive or equitable
relief, personal injury




-11-









 







(including sickness, disease or death), Remedial Action costs, tangible or intangible property
damage, natural resource damages, nuisance, pollution, any adverse effect on the Environment caused
by any Hazardous Material, or for fines, penalties or restrictions, resulting from or based upon:
(a) the existence, or the continuation of the existence, of a Release or threatened Release
(including sudden or non-sudden, accidental or non-accidental Releases); (b) exposure to any
Hazardous Material; (c) the presence, generation, use, handling, transportation, storage, treatment
or disposal of any Hazardous Material; or (d) the violation or alleged violation of, or any other
potential liability arising under, any Environmental Law or Environmental Permit.




          “Environmental Laws” means any and all applicable treaties, laws (including common
law), statutes, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions or
binding agreements or other Requirements of Law issued, promulgated or entered into by any
Governmental Authority, relating in any way to the protection of public health from environmental
hazards, protection of the Environment, preservation or reclamation of natural resources, natural
resource damages, occupational safety or health, the management, Release or threatened Release of,
or exposure to, any Hazardous Material, and any and all Environmental Permits.




          “Environmental Liability” means any liability, contingent or otherwise (including, but
not limited to, any liability for damages, natural resource damage, costs of environmental
investigation, remediation and other response costs, administrative oversight costs, fines,
penalties or indemnities), of the Borrower or any of its Restricted Subsidiaries directly or
indirectly resulting from or based upon (a) the existence, or the continuation of the existence, of
a Release or threatened Release (including sudden or non-sudden, accidental or non-accidental
Releases); (b) exposure to any Hazardous Material; (c) the presence, generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material; or (d) the violation or
alleged violation of any Environmental Law or Environmental Permit.




          “Environmental Permit” means any permit, approval, authorization, certificate,
license, registration, notification, exemption, variance, filing or permission required by or from
any Governmental Authority pursuant to any Environmental Law.




          “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person.




          “Equity Rights” means all securities convertible or exchangeable for Equity Interests
and all warrants, options or other rights to purchase or subscribe for any Equity Interests,
whether or not presently convertible, exchangeable or exercisable.




          “Equity Rights Offering” means that certain issuance of the Borrower’s new common
Equity Interests for gross cash proceeds in the amount of $175.0 million to occur on the Effective
Date.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as the same may be
amended from time to time.




          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower or any Restricted Subsidiary, is treated as a single employer under
Sections 414(b) or (c) of the Code, and for the purpose of Section 302 of ERISA and/or Section 412,
4971, 4977, 4980D, 4980E and/or each “applicable section” under Section 414(t)(2) of the Code,
within the meaning of Section 414(b), (c), (m) or (o) of the Code.




-12-









 








          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043(c) of ERISA
or the regulations issued thereunder, with respect to a Pension Plan (other than an event for which
the 30-day notice period is waived by regulation); (b) the existence with respect to any Pension
Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302
of ERISA), whether or not waived, the failure to make by its due date a required installment under
Section 412(m) of the Code with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect
to any Pension Plan; (d) the incurrence by the Borrower or any Restricted Subsidiary or ERISA
Affiliate of any liability under Title IV of ERISA with respect to any Pension Plan; (e) the
receipt by the Borrower or any Restricted Subsidiary or ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Pension Plan, to appoint a
trustee to administer any Pension Plan, or to take any other action with respect to a Pension Plan
that could result in material liability to the Borrower or any Restricted Subsidiary or ERISA
Affiliate, or the occurrence of any event or condition which could reasonably be expected to
constitute grounds under ERISA for the termination of or the appointment of a trustee to
administer, any Pension Plan; (f) the incurrence by the Borrower or any Restricted Subsidiary or
ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any
Pension Plan or Multiemployer Plan; (g) the receipt by the Borrower or any Restricted Subsidiary or
ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, Insolvent or in Reorganization or is, or is
reasonably expected to be, in endangered or critical status within the meaning of Section 305 of
ERISA; (h) any act or omission with respect to a Pension Plan that could result in the imposition
of a lien on any assets of the Borrower or any Restricted Subsidiary or the posting of a bond or
other security in favor of the participants and/or beneficiaries of any Pension Plan, the PBGC or
any other Person; (i) the occurrence of a nonexempt prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) which could result in liability to the Borrower
or any Restricted Subsidiary or ERISA Affiliate; or (j) a Pension Plan that is, or is reasonably
expected to be, in an “at risk” status within the meaning of Title IV of ERISA.




          “Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D.




          “Eurodollar Borrowing” means a Borrowing comprised of Eurodollar Loans.




          “Eurodollar Loan” means any Loan bearing interest at a rate determined by reference to
the Adjusted LIBO Rate in accordance with the provisions of Article II.




          “Event of Default” has the meaning assigned to such term in Section 7.01.




          “Excess Cash Flow” means, for the Borrower and its Restricted Subsidiaries, for any
Excess Cash Flow Period, (a) the sum, without duplication, of:





     (i) Consolidated EBITDA for such Excess Cash Flow Period;




     (ii) income or gain excluded from the calculation of Consolidated Net Income by
operation of clauses (a), (d) or (e) of the definition thereof that is realized in cash
during such Excess Cash Flow Period;




     (iii) reductions to working capital of the Borrower and its Restricted Subsidiaries
for such Excess Cash Flow Period (i.e., the decrease, if any, in Consolidated Current
Assets minus



-13-









 






Consolidated Current Liabilities from the beginning to the end of such Excess Cash Flow
Period);




     (iv) to the extent subtracted in determining Consolidated EBITDA, all items that did
not result from a cash payment by the Borrower or any of its Restricted Subsidiaries on a
consolidated basis during such Excess Cash Flow Period;




     (v) to the extent subtracted in determining Consolidated EBITDA, all non-recurring
gains that are realized in cash during such Excess Cash Flow Period; and




     (vi) to the extent any Capital Expenditures (and the corresponding delivery of
equipment), Permitted Acquisitions or other Investments referred to in clause (b)(iv) below
do not occur in the Excess Cash Flow Period of the Borrower specified in the applicable
certificate of the Borrower provided pursuant to clause (b)(iv) below, the aggregate amount
of such Capital Expenditures, Permitted Acquisitions or other Investments that were not so
made in the Excess Cash Flow Period of the Borrower specified in such certificates; and



minus (b) the sum, without duplication, of:





     (i) the amount of any income and franchise taxes paid in cash by the Borrower and its
Restricted Subsidiaries on a consolidated basis during such Excess Cash Flow Period;




     (ii) Debt Service of the Borrower and its Restricted Subsidiaries during such Excess
Cash Flow Period (except to the extent funded with the proceeds of Indebtedness or the
issuance of Equity Interests);




     (iii) to the extent made from internally generated funds of the Borrower and its
Restricted Subsidiaries (including any cash and Cash Equivalents actually received by the
Borrower or any of its Restricted Subsidiaries as a return on Investments and, in the case
of clause (y), the Net Proceeds of asset sales not required to be used to prepay the Loans
pursuant to Section 2.04(b)(ii)), (x) Capital Expenditures by the Borrower and its
Restricted Subsidiaries on a consolidated basis during such Excess Cash Flow Period that
are paid in cash, and (y) the aggregate consideration paid in cash during such Excess Cash
Flow Period in respect of Permitted Acquisitions and other Investments (less any
cash received in respect thereof as a return of capital), in each case, permitted by
Section 6.04, but excluding Capital Expenditures, Permitted Acquisitions and other such
Investments made in such Excess Cash Flow Period where a certificate in the form
contemplated by the following clause (iv) was previously delivered);




     (iv) to the extent they will be made from internally generated funds of the Borrower
and its Restricted Subsidiaries (including any cash and Cash Equivalents actually received
by the Borrower or any of its Restricted Subsidiaries as a return on Investments and, in
the case of Permitted Acquisitions and other Investments, the Net Proceeds of asset sales
not required to be used to prepay the Loans pursuant to Section 2.04(b)(ii)), Capital
Expenditures, Permitted Acquisitions and other Investments (less any cash received
in respect thereof as a return of capital), in each case, permitted by Section 6.04, that
the Borrower or any Restricted Subsidiary have, during such Excess Cash Flow Period,
executed a binding written commitment to make but that are not made during such Excess Cash
Flow Period, provided that the Borrower shall deliver a certificate to the
Administrative Agent not later than 90 days after the end of such Excess Cash Flow Period,
signed by a Financial Officer of the Borrower and certifying that such Capital Ex-



-14-









 






penditures, Permitted Acquisition or other such Investments, as the case may be, will be
made in the next Excess Cash Flow Period and from (to the extent deducted pursuant to this
clause (b)(iv)) internally generated funds of the Borrower and its Restricted Subsidiaries;




     (v) additions to working capital of the Borrower and its Restricted Subsidiaries for
such Excess Cash Flow Period (i.e., the increase, if any, in Consolidated Current Assets
minus Consolidated Current Liabilities from the beginning to the end of such Excess Cash
Flow Period);




     (vi) to the extent made from internally generated funds of the Borrower and its
Restricted Subsidiaries (including any cash and Cash Equivalents actually received by the
Borrower or any of its Restricted Subsidiaries as a return on Investments), dividends or
distributions on, or repurchases of, Equity Interests of the Borrower paid in cash by the
Borrower during such Excess Cash Flow Period, in each case, permitted by Section 6.07;




     (vii) to the extent made from internally generated funds of the Borrower and its
Restricted Subsidiaries (including any cash and Cash Equivalents actually received by the
Borrower or any of its Restricted Subsidiaries as a return on Investments), any voluntary
prepayment permitted hereunder of term Indebtedness (other than the Loans) (for the
avoidance of doubt, it being expressly understood and agreed that Indebtedness under the
Revolving Credit Agreement shall not constitute term Indebtedness) during such Excess Cash
Flow Period, so long as the amount of such prepayment is not already reflected in Debt
Service;




     (viii) expenses or losses excluded from the calculation of Consolidated Net Income
during such Excess Cash Flow Period by operation of clauses (a), (d) or (e) of the
definition thereof, to the extent paid in cash during such Excess Cash Flow Period;




     (ix) to the extent added to determine Consolidated EBITDA, all fees, costs and
expenses arising from or related to the Equity Rights Offering, the Loan Documents, the
Bridge Loan Documents, the Exchange Note Documents or the Revolving Credit Loan Documents
which were incurred prior to the first anniversary of the Effective Date, which were paid
in cash during such Excess Cash Flow Period; and




     (x) to the extent added to determine Consolidated EBITDA, all items that did not
result from a cash payment to the Borrower or any of its Restricted Subsidiaries on a
consolidated basis during such Excess Cash Flow Period;


provided that, to the extent otherwise included herein and without duplication, the Net
Proceeds of Asset Sale Prepayment Events, Destructions, Takings and Debt Incurrences which are
applied towards the prepayment of Loans and/or the repair, replacement, substitution, restoration
of or reinvestment in property in accordance with Section 2.04(b) shall be excluded from the
calculation of Excess Cash Flow; and provided, further, that there shall be
excluded from the calculation of Excess Cash Flow for any Excess Cash Flow Period any amounts
attributable to any Person (other than an Unrestricted Subsidiary) that was acquired in a Permitted
Acquisition consummated during such Excess Cash Flow Period to the extent such amounts relate to
the period prior to the consummation of the relevant Permitted Acquisition.




          “Excess Cash Flow Percentage” means, as of any date of determination, (i) 50% if the
Total Net Leverage Ratio is greater than or equal to 3.0:1.0 as of such date and (ii) 25% if the
Total Net Leverage Ratio is less than 3.0:1.0 as of such date.




-15-









 








          “Excess Cash Flow Period” means (i) the Fiscal Year ending on December 31, 2008 and
(ii) each Fiscal Year thereafter.




          “Exchange Act” means the Securities Exchange Act of 1934.




          “Exchange Note Documents” means the Exchange Notes, the Exchange Notes Indenture, the
Exchange Notes Registration Rights Agreement and all other documents executed and delivered with
respect to the Exchange Notes, the Exchange Notes Indenture or the Exchange Notes Registration
Rights Agreement.




          “Exchange Notes” has the meaning assigned to such term in the Bridge Credit Agreement.




          “Exchange Notes Indenture” has the meaning assigned to such term in the Bridge Credit
Agreement.




          “Exchange Notes Registration Rights Agreement” has the meaning assigned to such term
in the Bridge Credit Agreement.




          “Excluded Joint Venture” means each Restricted Joint Venture and each Existing Joint
Venture.




          “Excluded Non-U.S. Restricted Subsidiary” means any Non-U.S. Restricted Subsidiary to
the extent that such Subsidiary’s Guarantee of the Obligations would, in the good faith judgment of
the Borrower, result in material adverse tax consequences to the Borrower or its Restricted
Subsidiaries.




          “Excluded Subsidiaries” means, collectively, (a) each Immaterial Restricted
Subsidiary, (b) each Unrestricted Subsidiary, (c) each Excluded Non-U.S. Restricted Subsidiary, (d)
each Restricted Subsidiary of a Non-U.S. Restricted Subsidiary that is organized under the laws of
the United States, any State thereof or the District of Columbia, to the extent such Subsidiary’s
Guarantee of the Obligations would, in the good faith judgment of the Borrower, result in material
adverse tax consequences to the Borrower or its Restricted Subsidiaries, (e) each Captive Insurance
Restricted Subsidiary, (f) each Non-Profit Restricted Subsidiary, (g) each Non-Wholly Owned
Restricted Subsidiary that was a Non-Wholly Owned Restricted Subsidiary on the Effective Date, to
the extent that Requirements of Law or the terms of such Person’s Organizational Documents prohibit
such Person from providing a Guarantee of the Obligations and (h) SFC, to the extent that
Requirements of Law or the terms of SFC’s Organizational Documents or the terms of the Monsanto
Settlement Agreement prohibit SFC from providing a Guarantee of the Obligations.




          “Executive Order” has the meaning assigned to such term in Section 3.23(a).




          “Existing Credit Agreement” means the Financing Agreement, dated as of January 16,
2004, as amended, by and among the Borrower, as a debtor and debtor-in-possession, and Solutia
Business Enterprises, Inc., a New York corporation, as a debtor and debtor-in-possession, each
subsidiary of the Borrower listed as a “Guarantor” on the signature pages thereto, each as a debtor
and debtor-in-possession, the lenders from time to time party thereto, and Citicorp, as collateral
agent, as administrative agent, and as documentation agent.




-16-









 








          “Existing Joint Venture” means each investment or Person listed on Schedule
1.01(d) hereto.




          “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing selected by it.




          “Fee Letter” means the Fee Letter, dated February 28, 2008, among CGMI, GSCP, GS&C,
DBSI and the Borrower.




          “Financial Covenants” means those covenants and agreements of the Loan Parties set
forth in Sections 6.12 through 6.14, inclusive.




          “Financial Officer” of any corporation, partnership or other entity means the chief
financial officer, the chief executive officer, the principal accounting officer, treasurer,
assistant treasurer or controller of such corporation, partnership or other entity.




          “FIRREA” means the Federal Institutions Reform, Recovery and Enforcement Act of 1989.




          “Fiscal Quarter” means any quarter of a Fiscal Year.




          “Fiscal Year” means any period of twelve consecutive calendar months which form the
basis for the Borrower’s financial statements in its Form 10-K; references to a Fiscal Year with a
number corresponding to any calendar year (e.g., the “2008 Fiscal Year”) refer to the
Fiscal Year as disclosed in the Borrower’s SEC filings.




          “Fixed Charge Coverage Ratio” means, for any Test Period, the ratio of (a) (i)
Consolidated EBITDA for such Test Period minus (ii) the aggregate amount of Capital
Expenditures for such Test Period to (b) Consolidated Fixed Charges for such Test Period.




          “Foreign Plan” means any employee benefit plan, program, policy, arrangement or
agreement maintained or contributed to outside the United States by any Loan Party or any
Restricted Subsidiary primarily for the benefit of employees of any Loan Party or any Restricted
Subsidiary employed outside the United States.




          “Funded Indebtedness” means, with respect to the Borrower and its Restricted
Subsidiaries, all Indebtedness of such Person for borrowed money (including, in respect of the
Borrower and its Restricted Subsidiaries, the Loans and the Revolving Credit Loans) that by its
terms matures more than one year after the date of its creation or matures within one year from
such date but is renewable or extendible, at the option of such Person, to a date more than one
year after such date or arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year after such date, including
all amounts of Funded Indebtedness of such Person required to be paid or prepaid within one year
after the date of determination.




-17-









 








          “GAAP” means generally accepted accounting principles in the United States applied on
a consistent basis.




          “Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state, provincial or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government (including any supra-national bodies such as the European Union or the
European Central Bank).




          “GSCP” has the meaning assigned to such term in the preamble hereto.




          “GS&C” means Goldman, Sachs & Co.




          “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof (including pursuant to a “synthetic lease”), (c) to maintain
working capital, equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or
(d) as an account party in respect of any letter of credit or letter of guaranty issued to support
such Indebtedness or obligation, and the term “Guaranteed” shall have a meaning correlative
thereto; provided that the term “Guarantee” shall not include endorsements for collection
or deposit in the ordinary course of business of the Borrower and its Restricted Subsidiaries. The
amount of the obligation under any Guarantee shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of which such Guarantee
is made (including principal, interest and fees) and (b) the maximum amount for which such
guarantor may be liable pursuant to the terms of the instrument embodying such Guarantee, unless
such primary obligation and the maximum amount for which such guarantor may be liable are not
stated or determinable, in which case the amount of the obligation under such Guarantee shall be
such guarantor’s maximum reasonably anticipated liability in respect thereof as determined by the
guarantor in good faith; irrespective, in any such case, of any amount thereof that would, in
accordance with GAAP, be required to be reflected on a balance sheet of such Person.




          “Guarantee Agreement” means the Guarantee Agreement, substantially in the form of
Exhibit H, made by the Restricted Subsidiaries party thereto.




          “Hazardous Materials” means all pollutants, contaminants, wastes, substances,
chemicals, materials and constituents, including crude oil, petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls (“PCBs”) or
PCB-containing equipment, radon or any other radioactive materials including any source, special
nuclear or by-product material, mold, fungi, or other biological materials of any nature, which
could reasonably be expected to have an adverse effect on human health or the environment, or which
can give rise to liability under, or are subject to regulation pursuant to, any Environmental Law.




          “Headquarters Building” means that certain Real Property located at 575 Maryville
Centre Drive, St. Louis, Missouri.




-18-









 








          “Hedging Agreement” means any interest rate protection agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or currency exchange
rate or commodity price hedging arrangement and any swap, forward, future or derivative transaction
or option and all other similar agreements or arrangements designed to alter the risks of any
Person arising from fluctuations in interest rate, currency values or commodity prices.




          “Hedging Obligations” means obligations under or with respect to Hedging Agreements.




          “Immaterial Restricted Subsidiary” means, at any date of determination, any Restricted
Subsidiary (other than any Loan Party) designated as such in writing by the Borrower to the
Administrative Agent that, together with all other Restricted Subsidiaries constituting Immaterial
Restricted Subsidiaries (i) contributed 2.5% or less of Consolidated EBITDA for the period of four
Fiscal Quarters most recently ended for which financial statements have been or are required to
have been delivered pursuant to Sections 4.01(h), 5.01(a) or 5.01(b), as applicable, as of the date
of determination and (ii) had consolidated assets representing 2.5% or less of the consolidated
total assets of the Borrower and its Subsidiaries on the last day of the most recent Fiscal Quarter
ended for which financial statements have been or are required to have been delivered pursuant to
Sections 4.01(h), 5.01(a) or 5.01(b), as applicable, as of the date of determination. The
Immaterial Restricted Subsidiaries as of the Effective Date are listed on Schedule 1.01(a).




          “Impermissible Qualification” means, relative to the opinion or certification of any
independent public accountant as to any financial statement of the Borrower, any qualification or
exception to such opinion or certification:





     (a) which is of a “going concern” or similar nature;




     (b) which relates to the limited scope of examination of matters relevant to such
financial statement; or




     (c) which relates to the treatment or classification of any item in such financial
statement (excluding treatment or classification changes which are the result of changes in
GAAP or the interpretation of GAAP) and which, as a condition to its removal, would require
an adjustment to such item the effect of which would be to cause the Borrower to be in
Default of any of its obligations under Sections 6.12 or 6.13.



          “Increased Cost Lender” has the meaning assigned to such term in Section 2.18.




          “Indebtedness” of any Person means, without duplication, (i) obligations of such
Person for borrowed money or evidenced by bonds, debentures, notes and similar instruments; (ii)
all Capital Lease Obligations of such Person; (iii) all Indebtedness of others secured by any Lien
on any Property of such Person, whether or not the obligations secured thereby have been assumed;
provided that if such Indebtedness shall not have been assumed by such Person and is
otherwise non-recourse to such Person, the amount of such obligation treated as Indebtedness shall
not exceed the fair market value of such Property; (iv) all indebtedness of such Person
representing the deferred purchase price of Property or services (excluding (A) trade payables and
accrued expenses incurred in the ordinary course of business of the Borrower and its Restricted
Subsidiaries and (B) any earn-out obligation until such obligation becomes a liability on the
balance sheet of such Person in accordance with GAAP and if not paid after becoming due and
payable); (v) all obligations of such Person for the reimbursement of any obligor in respect of
letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions; (vi)
all obligations of




-19-









 







such Person under conditional sale or other title retention agreements relating to property
purchased by such Person; (vii) all net Hedging Obligations; (viii) all Disqualified Equity
Interests of such Person; and (ix) all Guarantees by such Person in respect of liabilities,
obligations or indebtedness of the kind described in clauses (i) through (viii). The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable therefor as a result of
such Person’s ownership interest in or other relationship with such entity, except (other than in
the case of general partner liability) to the extent that terms of such Indebtedness expressly
provide that such Person is not liable therefor. The amount of any net Hedging Obligations on any
date shall be deemed to be the Termination Value.




          “Indemnified Taxes” has the meaning assigned to such term in Section 2.14(a).




          “Indemnity, Subrogation and Contribution Agreement” means the Indemnity, Subrogation
and Contribution Agreement, substantially in the form of Exhibit E.




          “Information” has the meaning assigned to such term in Section 9.16.




          “Information Memorandum” means the confidential information memorandum dated January
2008 in the form approved by the Borrower concerning the Loan Parties and their Subsidiaries which,
at the Borrower’s request and on its behalf, was prepared in relation to this transaction and
distributed by the Joint Lead Arrangers and Bookrunners to selected financial institutions before
the date of this Agreement.




          “Insolvent” means, with respect to any Multiemployer Plan, the condition that such
plan is insolvent within the meaning of Section 4245 of ERISA.




          “Installment Payment Date” has the meaning assigned to such term in Section 2.04(c).




          “Intellectual Property” has the meaning assigned to such term in the Security
Agreement.




          “Intercompany Notes” has the meaning assigned to such term in Section 4.01(t)(B).




          “Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date
hereof, among the Administrative Agent, the Collateral Agent, the Revolving Credit Administrative
Agent, the Revolving Credit Collateral Agent and the Borrower.




          “Interest Payment Date” means, with respect to any Loan, (a) the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day that
would have been an Interest Payment Date had successive Interest Periods of three months’ duration
been applicable to such Borrowing and (b) the date of any refinancing of such Borrowing with a
Borrowing of a different Type.




          “Interest Period” means (a) as to any Eurodollar Borrowing, the period commencing on
the date of such Borrowing (including any date on which such Borrowing shall have been converted
from a Borrowing of a different Type) or on the last day of the immediately preceding Interest
Period applicable to such Borrowing, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months (or if available to all Lenders, one or two weeks or 9
or 12 months) thereafter, as the Borrower may elect; or (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing (including any date




-20-









 







on which such Borrowing shall have been converted from a Borrowing of a different Type) or on
the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the earliest of (i) the next succeeding March 31, June 30, September 30 or
December 31, (ii) the Maturity Date and (iii) the date such Borrowing is prepaid in accordance with
Section 2.04 or converted in accordance with Section 2.03; provided, however, that
if any Interest Period would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only,
such next succeeding Business Day would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day. Interest shall accrue from and
including the first day of an Interest Period to but excluding the last day of such Interest
Period.




          “Investment” has the meaning assigned to such term in Section 6.04.




          “Joint Lead Arrangers and Bookrunners” has the meaning assigned to such term in the
preamble hereto.




          “Joint Venture” means any Person not more than 50% of the voting Equity Interests of
which is owned by the Borrower or any Restricted Subsidiary but which is not a Wholly Owned
Restricted Subsidiary and which is engaged in a line of business permitted under Section 6.03.




          “Leased Real Property” has the meaning assigned to such term in Section 3.10(b).




          “Lender Affiliate” means (a) with respect to any Lender, (i) an Affiliate of such
Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged
in making, purchasing, holding or otherwise investing in bank loans and similar extensions of
credit in the ordinary course and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund which invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and similar extensions of credit
and is managed by the same investment advisor as such Lender or by an Affiliate of such investment
advisor.




          “Lender Appointment Period” has the meaning assigned to such term in Section 8.06.




          “Lender Parties” has the meaning assigned to such term in Section 9.21.




          “Lenders” means the banks, financial institutions and other institutional lenders
listed on the signature pages hereof as the initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 9.04 for so long as such initial Lender or Person, as the case
may be, shall be a party to this Agreement as a Lender.




          “LIBO Rate” means, as with respect to any Interest Period for any Eurodollar
Borrowing, the rate determined by the Administrative Agent to be the offered rate for deposits in
Dollars for the applicable Interest Period appearing on the Reuters LIBOR01 Screen as of 11:00
a.m., London time, on the second full Business Day next preceding the first day of each Interest
Period. In the event that such rate does not appear on the Reuters LIBOR01 Screen (or otherwise on
the Reuters screen), the LIBO Rate for the purposes of this definition shall be determined by
reference to such other comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent, or, in the absence of such availability, the LIBO Rate
shall be the rate of interest determined by the Administrative Agent to be the rate per annum at
which deposits in Dollars are offered by the principal office of Citibank in London to major banks
in the London interbank market at 11:00 a.m. (London time) two Business




-21-









 







Days before the first day of such Interest Period in an amount substantially equal to the
Eurodollar Loan of Citibank for a period equal to such Interest Period.




          “Lien” means, with respect to any Property, (a) any mortgage, deed of trust, deed to
secure debt, lien, pledge, encumbrance, charge, assignment, hypothecation or security interest in
or on such Property, or any arrangement to provide priority or preference or any filing of any
financing statement under the UCC or any other similar notice of lien under any similar notice or
recording statute of any Governmental Authority, including any easement, right-of-way or other
encumbrance on title to Real Property, in each of the foregoing cases whether voluntary or imposed
by law, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially the same economic
effect as any of the foregoing) relating to such Property, (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such securities, (d) in the
case of any investment property or deposit account, any contract or other agreement under which any
third party has “control” (as defined in the UCC) of such investment property or deposit account
and (e) any other agreement intended to give or create any of the foregoing.




          “Loan Documents” means this Agreement, the Indemnity, Subrogation and Contribution
Agreement, the Guarantee Agreement, any Non-U.S. Guarantee Agreements, the Security Documents, each
Note, the Intercreditor Agreement, each Perfection Certificate and, solely for purposes of Section
7.01(a), the Fee Letter.




          “Loan Parties” means the Borrower and the Subsidiary Guarantors.




          “Loans” means the Loans made pursuant to Section 2.01(a).




          “Master Intercompany Note” means that certain master intercompany promissory note
evidencing certain intercompany Indebtedness owed to any Loan Party (excluding any intercompany
promissory note issued in connection with the Permitted Restructuring).




          “Material Adverse Effect” means (a) a material adverse effect on the business, assets,
operations, properties, prospects or financial condition of the Borrower and its Subsidiaries,
taken as a whole, or (b) material impairment of the ability of any of the Loan Parties to perform
their obligations under any Loan Document, (c) material impairment of the rights of or benefits
available to the Lenders or the Collateral Agent under any Loan Document or (d) a material adverse
effect on the value of the Collateral or the validity, enforceability, perfection or priority of
the Liens granted to the Collateral Agent (for the benefit of the Secured Parties) on the
Collateral pursuant to the Security Documents; provided, however, for the purposes
of the conditions under Section 4.01 or any other conditions precedent to the initial funding and
closing of the Loans on the Effective Date, nothing as disclosed in (i) the Borrower’s Annual
Report on Form 10-K for the Fiscal Year ended December 31, 2006, (ii) the Borrower’s Quarterly
Report on Form 10-Q for the Fiscal Quarters ended March 31, 2007 and June 30, 2007, each as filed
prior to October 25, 2007, and/or (iii) the Disclosure Statement filed in connection with the
Reorganization Plan prior to October 25, 2007 shall, in any case, in and of itself and based solely
on facts as disclosed therein (without giving effect to any developments not disclosed therein), be
deemed to constitute a Material Adverse Effect.




          “Material Indebtedness” means (a) Indebtedness under the Revolving Credit Loan
Documents, (b) Indebtedness under the Bridge Loan Documents (and any Permitted Refinancing thereof)
and (c) other Indebtedness (other than the Loans) and Hedging Obligations of any one or more of the
Borrower and its Restricted Subsidiaries, individually or in an aggregate principal amount
exceeding




-22-









 







$25.0 million. For purposes of determining Material Indebtedness, the “principal amount” of any
Hedging Obligations of the Borrower or any Restricted Subsidiary at any time shall be the
Termination Value thereof at such time.




          “Material Lease” means a lease on a Mortgaged Property as of the Effective Date which
(i) affects the ability of the applicable mortgagor to conduct its business as operated on the
Mortgaged Property or to utilize the Mortgaged Property for its intended use or (ii) permits the
lessee under such lease to operate a manufacturing facility or similar business on the Mortgaged
Property (unrelated directly to the applicable mortgagor’s business).




          “Maturity Date” means the sixth anniversary of the Effective Date.




          “Maximum Rate” has the meaning assigned to such term in Section 9.09.




          “Maximum Revolving Credit Facility Amount” means $450.0 million.




          “Monsanto Settlement Agreement” means the Amended and Restated Settlement Agreement,
dated the date hereof, among the Borrower, Monsanto Company and SFC.




          “Moody’s” means Moody’s Investors Service, Inc., and any successor thereto.




          “Mortgage” means an agreement (including a mortgage, deed of trust or other document
creating and evidencing a Lien on any Mortgaged Property), which shall be substantially in the form
of Exhibit M, with such schedules and including such provisions as shall be necessary to
conform such document to applicable local or foreign law or as shall be customary under applicable
local or foreign law.




          “Mortgaged Property” means, (a) each parcel of fee owned real property of the Loan
Parties identified on Schedule 4.01(u), and the improvements thereto, and (b) each other
parcel of fee owned real property and improvements thereto with respect to which a Mortgage is
granted following the Effective Date pursuant to Section 5.11, 5.12 or 5.17.




          “Multiemployer Plan” means a multiemployer plan within the meaning of Section
4001(a)(3) of ERISA (i) to which any Loan Party or ERISA Affiliate is then making or has an
obligation to make contributions, (ii) to which any Loan Party or ERISA Affiliate has within the
preceding six plan years made contributions, including any Person which ceased to be an ERISA
Affiliate during such six year period, or (iii) with respect to which any Loan Party or any ERISA
Affiliate could incur liability.




          “Net Interest Expense Coverage Ratio” means, as of any date for any Test Period, the
ratio of (a) Consolidated EBITDA to (b) Consolidated Net Interest Expense, in each case for such
Test Period. For purposes of determining the Net Interest Expense Coverage Ratio for the period of
four consecutive Fiscal Quarters ended March 31, 2008, June 30, 2008, September 30, 2008 and
December 31, 2008, Consolidated Net Interest Expense shall be deemed to be equal to the product of
(x) Consolidated Net Interest Expense since the Effective Date to the date in question and (y) a
fraction, the numerator of which is 365 and the denominator of which is the number of days since
the Effective Date.




          “Net Proceeds” means, with respect to any Debt Incurrence, Asset Sale, Destruction or
Taking, (a) the cash proceeds actually received in respect of such event, including (i) any cash
received in respect of any non-cash proceeds, but only as and when received, and (ii) in the case
of a Destruction or a




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Taking, insurance proceeds, condemnation awards and similar payments, only to the extent in
excess of $5.0 million for any individual Destruction or Taking, or in excess of $25.0 million in
the aggregate for all such events (together with all Asset Sales (other than Asset Sales described
in clauses (a) and (b) of the definition of Asset Sale Prepayment Event) in such Fiscal Year) in
any Fiscal Year, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by
the Borrower and its Restricted Subsidiaries in connection with such event, (ii) the amount of all
taxes paid (or reasonably and in good faith estimated to be payable) by the Borrower and its
Restricted Subsidiaries in connection with such event, including any withholding taxes imposed on
the repatriation of proceeds, (iii) in the case of an Asset Sale, Destruction or Taking, the
principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for
borrowed money which is secured by a Lien on the properties subject to such Asset Sale, Destruction
or Taking (so long as such Lien was permitted to encumber such properties under the Loan Documents
at the time of such Asset Sale, Destruction or Taking) and which is repaid with such proceeds
(other than any such Indebtedness assumed by the purchaser of such properties), and (iv) the amount
of any reasonable reserves established by, and reflected on the financial statements of, the
Borrower and its Restricted Subsidiaries in accordance with GAAP (other than any taxes deducted
pursuant to clause (ii) above) (x) associated with the assets that are the subject of such event
and (y) retained by the Borrower or any Restricted Subsidiary to fund contingent liabilities that
are directly attributable to such event and that are reasonably estimated to be payable by the
Borrower or any Restricted Subsidiary within 18 months following the date that such event occurred
(other than in the case of contingent tax liabilities, which shall be reasonably estimated to be
payable within the current or immediately succeeding tax year); provided that any amount by
which such reserves are reduced for reasons other than payment of any such contingent liabilities
shall be considered “Net Proceeds” on the date of such reduction.




          “Non-Consenting Lender” has the meaning assigned to such term in Section 2.18.




          “Non-Guarantor Restricted Subsidiary” means each Restricted Subsidiary that is not a
Subsidiary Guarantor.




          “Non-Profit Subsidiaries” means any Restricted Subsidiary that is exempt from income
taxes and is organized and operated exclusively for charitable, scientific, testing for public
safety or educational purposes (within the meaning of Section 501(c)(3) of the Code or, in the case
of any Non-U.S. Restricted Subsidiary, any similar provision under the laws of the jurisdiction in
which such Non-U.S. Restricted Subsidiary is organized). As of the Effective Date, there are no
Non-Profit Subsidiaries.




          “Non-U.S. Guarantee Agreements” means one or more guarantee agreements in form and
substance reasonably satisfactory to the Collateral Agent, providing for the guarantee of the
Obligations by the Non-U.S. Restricted Subsidiaries party thereto, made by the Non-U.S. Restricted
Subsidiaries party thereto.




          “Non-U.S. Jurisdiction” means each jurisdiction of organization of a Subsidiary of the
Borrower other than the United States (or any State thereof) or the District of Columbia.




          “Non-U.S. Lender” means (a) each Lender (or Agent) that is not a United States person
as defined in Section 7701(a)(30) of the Code and (b) each Lender (or Agent) that is a wholly-owned
domestic entity that is disregarded for United States federal tax purposes under Treasury
Regulations Section 301.7701-2(c)(2) as an entity separate from its owner and whose single owner is
not a United States person as defined in Section 7701(a)(30) of the Code.




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          “Non-U.S. Pledge Agreements” means one or more pledge agreements in form and substance
reasonably satisfactory to the Collateral Agent, among the Loan Parties party thereto and the
Collateral Agent for the benefit of the Secured Parties.




          “Non-U.S. Restricted Subsidiary” means any Restricted Subsidiary that is or becomes
organized under the laws of a Non-U.S. Jurisdiction.




          “Non-U.S. Security Agreements” means one or more security agreements in form and
substance reasonably satisfactory to the Collateral Agent, among the Loan Parties party thereto and
the Collateral Agent for the benefit of the Secured Parties.




          “Non-U.S. Subsidiary” means any Subsidiary that is or becomes organized under the laws
of a Non-U.S. Jurisdiction.




          “Non-Wholly Owned Restricted Subsidiary” means each Restricted Subsidiary that is not
a Wholly Owned Restricted Subsidiary.




          “Note” means a note substantially in the form of Exhibit F.




          “Obligations” means, collectively, (a) the Loans and all other amounts, obligations,
covenants and duties owing by any Loan Party to the Administrative Agent, the Collateral Agent, any
Lender, any Affiliate of any of them or any Indemnitee, of every type and description (whether by
reason of an extension of credit, loan, guaranty, indemnification or otherwise), present or future,
arising under this Agreement or any other Loan Document, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired and whether or not evidenced by any note, guaranty or other
instrument or for the payment of money, including all fees, interest (including interest accruing
after the maturity of the Loans made to the Borrower and interest accruing (or that would accrue
but for the commencement of any bankruptcy, insolvency, reorganization or like proceeding) after
the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), premiums, charges, expenses, attorneys’ fees and disbursements and other sums
chargeable to the Borrower or any other Loan Party under this Agreement or any other Loan Document,
and (b) the due and punctual payment and performance of all obligations of the Borrower and the
other Loan Parties under each Pari Passu Secured Hedging Agreement.




          “Organizational Document” means (i) relative to each Person that is a corporation, its
charter and its by-laws (or similar documents) and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized Equity Interests, (ii) relative to each
Person that is a limited liability company, its certificate of formation and operating agreement
(or similar documents) and any other similar arrangements applicable to any membership interests or
other Equity Interests in such Person, (iii) relative to each Person that is a limited partnership,
its certificate of formation and limited partnership agreement (or similar documents) and any other
similar arrangements applicable to any partnership interests or other Equity Interests in such
Person, (iv) relative to each Person that is a general partnership, its partnership agreement (or
similar document) and any other similar arrangements applicable to any partnership interests or
other Equity Interests in such Person and (v) relative to any Person that is any other type of
legal entity, such documents as shall be the functional legal equivalent of the foregoing.




          “Other Taxes” has the meaning assigned to such term in Section 2.14(b).




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          “Overnight Rate” means, for any day, the greater of (a) the Federal Funds Rate and (b)
an overnight rate determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation.




          “Pari Passu Secured Hedging Agreement” means any Hedging Agreement permitted by
Section 6.15 that is entered into by the Borrower or any of its Restricted Subsidiaries with any
counterparty that was a Joint Lead Arranger and Bookrunner or an Affiliate of a Joint Lead Arranger
and Bookrunner, an Agent or an Affiliate of an Agent, or a Lender or a Lender Affiliate on the date
hereof or at the time such Hedging Agreement was entered into if, at the date of entering into such
Hedging Agreement (or, with respect to Hedging Agreements in effect at the date hereof, at the date
hereof), such Hedging Agreement is designated in writing as a “Pari Passu Secured Hedging
Agreement” by the Borrower in certificate of a Financial Officer of the Borrower delivered to the
Administrative Agent.




          “Participant” has the meaning assigned to such term in Section 9.04(f).




          “PATRIOT Act” has the meaning assigned to such term in Section 9.19.




          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.




          “Pension Plan” means a “pension plan,” as such term is defined in Section 3(2) of
ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Plan) and to which any
Loan Party or any ERISA Affiliate may have liability, including any liability by reason of having
been a substantial employer within the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069
of ERISA.




          “Perfection Certificate” means a certificate in the form of Annex II to the
Security Agreement or any other form approved by the Administrative Agent.




          “Permitted Acquisition” means any acquisition, whether by purchase, merger,
consolidation or otherwise, by the Borrower or any Restricted Subsidiary of all or substantially
all the assets of, or all the Equity Interests in, a Person or a division, line of business or
other business unit of a Person so long as:





     (a) such acquisition shall have been approved by the board of directors of the Person
(or similar governing body if such Person is not a corporation) which is the subject of such
acquisition and such Person shall not have announced that it will oppose such acquisition;




     (b) such assets are to be used in, or such Person so acquired is engaged in, as the
case may be, a business of the type conducted by the Borrower and its Restricted
Subsidiaries on the Effective Date or in a business reasonably related or ancillary thereto
or otherwise permitted by Section 6.03(c);




     (c) no Default has occurred and is continuing or would result therefrom;




     (d) (i) all transactions related thereto are consummated in all material respects in
accordance with applicable Requirements of Law, (ii) (x) in the case of an acquisition of
Equity Interests, the Person acquired shall become, immediately after giving effect thereto,
a Restricted Subsidiary or be merged into the Borrower or a Restricted Subsidiary and (y) in
the case of an ac-



-26-









 






-quisition of assets or a division, line of business or other business unit, immediately
after giving effect thereto, the Property acquired shall be conveyed to the Borrower or a
Restricted Subsidiary, and, in the case of each of the foregoing clauses (x) and (y), all
actions required to be taken under Sections 5.11, 5.12 and 5.15 shall have been taken, (iii)
immediately after giving effect thereto, the Borrower and its Restricted Subsidiaries are in
compliance, on a Pro Forma Basis after giving effect to such acquisition, with the covenant
contained in Section 6.12 recomputed as at the date of the last ended Test Period, as if
such acquisition (and any related incurrence or repayment of Indebtedness) had occurred on
the first day of the relevant Test Period, (iv) immediately after giving effect thereto, the
Borrower and its Restricted Subsidiaries are in compliance, on a Pro Forma Basis after
giving effect to such acquisition, with the covenant contained in Section 6.13 recomputed as
at the date of the last ended Test Period, as if such acquisition (and any related
incurrence or repayment of Indebtedness) had occurred on the first day of the relevant Test
Period, and to be tested based on a ratio 50 basis points tighter than the applicable ratio
for such Test Period set forth in Section 6.13 and (v) any Indebtedness that is incurred,
acquired or assumed in connection with such acquisition shall be in compliance with Section
6.01; and




     (e) the Borrower has delivered to the Administrative Agent an officers’ certificate
certifying that (i) such transaction complies with this definition (which shall have
attached thereto reasonably detailed backup data and calculations showing such compliance,
including compliance with clause (d) above) and (ii) such transaction could not reasonably
be expected to result in a Material Adverse Effect, together with all other relevant
financial information for the Person or assets to be acquired.



          “Permitted Guarantor Factoring Transactions” means the factoring of receivables solely
for cash consideration on a non-recourse basis by the Borrower or any of its Restricted
Subsidiaries structured as a true sale to a Person that is not an Affiliate of the Borrower or any
of its Subsidiaries pursuant to a structured factoring program on fair market terms;
provided that the book value of all receivables subject to such factoring programs at any
one time outstanding shall not exceed an aggregate of $15.0 million; provided,
further, however, for the avoidance of doubt the internal factoring of receivables
by Solutia Systems, Inc. with another Loan Party shall not constitute a use of this definition.




          “Permitted Investments” means:





     (a) marketable direct obligations issued by, or unconditionally guaranteed by, the
United States Government or issued by any agency or instrumentality thereof and backed by
the full faith and credit of the United States of America, in each case maturing within one
year from the date of acquisition thereof;




     (b) marketable direct obligations issued by any State of the United States of America
or any political subdivision of any such State or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s;




     (c) commercial paper issued by any Person organized in the United States of America and
maturing no more than one year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s;




     (d) time deposits, demand deposits, certificates of deposit, Eurodollar time deposits
or bankers’ acceptances maturing within one year from the date of acquisition thereof or
over-



-27-









 






-night bank deposits, in each case, issued by any bank organized under the laws of the
United States of America or any State thereof or the District of Columbia or any U.S. branch
of a foreign bank, in any case, having at the date of acquisition thereof combined capital
and surplus of not less than $500.0 million;




     (e) repurchase obligations with a term of not more than 90 days for underlying
securities of the types described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (d) above;




     (f) with respect to any Non-U.S. Restricted Subsidiary, non-Dollar denominated (i)
certificates of deposit of, bankers acceptances of, or time deposits with, any commercial
bank having combined capital and surplus of not less than $500.0 million (or the Dollar
Equivalent thereof); which is organized and existing under the laws of the country in which
such Person maintains its chief executive office or principal place of business or is
organized provided such country is a member of the Organization for Economic Cooperation and
Development, and which has a short-term commercial paper rating of at least A-1 or the
equivalent thereof from S&P or of at least P-1 or the equivalent thereof from Moody’s (any
such bank being an “Approved Foreign Bank”) and maturing within one year of the date
of acquisition and (ii) equivalents of demand deposit accounts which are maintained with an
Approved Foreign Bank;




     (g) readily marketable obligations issued or directly and fully guaranteed or insured
by the government or any agency or instrumentality of any member nation of the European
Union (and the United Kingdom) whose legal tender is the Euro or British Pounds Sterling and
which are denominated in Euros or British Pounds Sterling or any other foreign currency
comparable in credit quality and tenor to those referred to above and customarily used by
corporations for cash management purposes in any jurisdiction outside the United States to
the extent reasonably required in connection with any business conducted by any Non-U.S.
Restricted Subsidiary organized in such jurisdiction, maturing within one year from the date
of acquisition thereof and, at the time of acquisition, having one of the two highest
ratings obtainable from either S&P or Moody’s or a comparable rating from an international
recognized rating agency; provided that the full faith and credit of any such member
nation of the European Union is pledged in support thereof;




     (h) investments in money market funds which invest substantially all their assets in
securities of the types described in clauses (a) through (g) above; and




     (i) Hedging Agreements entered into for non-speculative purposes.



          “Permitted Lien” has the meaning assigned to such term in Section 6.02.




          “Permitted Non-Guarantor Factoring Transactions” means the factoring of receivables
solely for cash consideration on a recourse or non-recourse basis by Non-Guarantor Restricted
Subsidiaries structured as a true sale to a Person that is not an Affiliate of the Borrower or any
of its Subsidiaries pursuant to a structured factoring program on fair market terms;
provided that the book value of all receivables subject to such factoring programs at any
one time outstanding shall not exceed an aggregate of $50.0 million.




          “Permitted Refinancing” means, with respect to any Indebtedness, any refinancing,
refunding, extension or renewal thereof; provided, however, that (i) except in the
case of any refinancing of any Indebtedness under the Bridge Loan Documents, no Default shall have
occurred and be continuing or




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would immediately arise therefrom, (ii) any such refinanced, refunded, extended or renewed
Indebtedness shall (a) not have a final maturity date or Weighted Average Life to Maturity,
respectively, that is shorter than the final maturity date or Weighted Average Life to Maturity,
respectively, of the Indebtedness being refinanced, refunded, extended or renewed, (b) be at least
as subordinate to the Loans and other Obligations as the Indebtedness being refinanced, refunded,
extended or renewed (and unsecured if the refinanced, refunded, extended or renewed Indebtedness is
unsecured (except, in the case of Indebtedness permitted under Section 6.01(ii)(A), to the extent
such Indebtedness may be secured under Section 6.02(xvi))), and the covenants, events of default
and other provisions thereof (including any guarantees thereof) shall be, in the aggregate, no less
favorable to the Lenders than those contained in the Indebtedness being refinanced, refunded,
extended or renewed and (c) be in an aggregate principal amount (or accreted value, if applicable)
that does not exceed the aggregate principal amount (or accreted value, if applicable) of the
Indebtedness so refinanced, refunded, extended or renewed, plus an amount equal to all
accrued and unpaid interest thereon, plus the stated amount of any premium and other
reasonable amounts required to be paid in connection with such refinancing, refunding, extension or
renewal pursuant to the terms of the Indebtedness being refinanced, refunded, extended or renewed,
plus the amount of reasonable expenses of the Borrower or any of its Restricted
Subsidiaries incurred in connection with such refinancing, refunding, extension or renewal, (iii)
in the case of any Indebtedness of a Non-Guarantor Restricted Subsidiary being refinanced,
refunded, extended or renewed, no Loan Party that is not already an obligor on such Indebtedness
being refinanced, refunded, extended or renewed shall become an obligor on such refinanced,
refunded, extended or renewed Indebtedness, and (iv) in the case of any Indebtedness of a Loan
Party being refinanced, refunded, extended or renewed, no Non-Guarantor Restricted Subsidiary that
is not already an obligor on such Indebtedness being refinanced, refunded, extended or renewed
shall become an obligor on such refinanced, refunded, extended or renewed Indebtedness.




          “Permitted Restructuring” means the corporate restructuring of the Borrower and its
Subsidiaries described on Schedule 1.01(b) and consummated in accordance with Section 5.19.




          “Person” or “person” means any natural person, corporation, trust, joint
venture, association, company, partnership, limited liability company, Governmental Authority or
other entity.




          “PIK Interest Amount” means the aggregate amount of all increases in the principal
amount of Indebtedness outstanding under the Bridge Loan Documents or Exchange Note Documents in
connection with an election by the Borrower to pay interest in kind.




          “Plan” means any Pension Plan or Welfare Plan.




          “Pledge Agreement” means the Pledge Agreement, substantially in the form of
Exhibit I, among the Loan Parties party thereto and the Collateral Agent for the benefit of
the Secured Parties.




          “Pledged Securities” means the “Pledged Securities” (as defined in the Pledge
Agreement) and/or the Equity Interests pledged under any Non-U.S. Pledge Agreement, as applicable.




          “Preferred Equity Interests” means , with respect to any Person, any and all preferred
or preference Equity Interests (however designated) of such Person, whether or not outstanding or
issued on the Effective Date.




          “Pro Forma Basis” means (i) on a pro forma basis in accordance with Regulation S-X
under the Exchange Act and otherwise reasonably satisfactory to the Administrative Agent; and (ii)
for purposes of calculating Consolidated EBITDA in connection with a Permitted Acquisition, other
Invest-




-29-









 







-ment or an Asset Sale and with respect to compliance with any test or covenant hereunder, the
following transactions in connection therewith shall be deemed to have occurred as of the first day
of the applicable period of measurement in such covenant: (a) income statement items (whether
positive or negative) attributable to the Property or Person subject to such transaction, (i) in
the case of a Permitted Acquisition or Investment shall be included and (ii) in the case of an
Asset Sale of all or substantially all of the assets of or all of the Equity Interests of any
Subsidiary of the Borrower or any division or project line of the Borrower or any of its Restricted
Subsidiaries, shall be excluded, (b) any retirement of Indebtedness, and (c) any Indebtedness
incurred or assumed by the Borrower or any of its Restricted Subsidiaries in connection therewith
and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for
the applicable period for purposes of this definition determined by utilizing the rate which is or
would be in effect with respect to such Indebtedness as at the relevant date of determination;
provided that the foregoing pro forma adjustments may be applied solely to the extent such
adjustments are consistent with the definition of Consolidated EBITDA and give effect to events
that are (x) directly attributable to such transaction, (y) expected to have a continuing impact on
the Borrower and its Restricted Subsidiaries and (z) factually supportable.




          “Projected Financial Statements” has the meaning assigned to such term in Section
3.16(c).




          “Property” or “property” means any right, title or interest in or to property
or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible and including any ownership interests of any Person.




          “Real Property” means all right, title and interest of any Restricted Subsidiary in
and to a parcel of real property owned or leased by any Restricted Subsidiary together with, in
each case, all improvements and appurtenant fixtures, easements and other property and rights
incidental to the ownership, lease or operation thereof.




          “Refinancing” means the distributions on Allowed Claims (as defined in the
Reorganization Plan) and the other payments required pursuant to the Reorganization Plan (including
the repayment in full of certain Indebtedness of the Borrower and its Subsidiaries in existence
before the Effective Date and the making of certain contributions to Plans of the Borrower and its
Subsidiaries).




          “Register” has the meaning assigned to such term in Section 9.04(d).




          “Regulation D” means Regulation D of the Board of Governors as from time to time in
effect.




          “Regulation U” means Regulation U of the Board of Governors as from time to time in
effect and all official rulings and interpretations thereunder or thereof.




          “Regulation X” means Regulation X of the Board of Governors as from time to time in
effect and all official rulings and interpretations thereunder or thereof.




          “Related Parties” means, with respect to any Person, such Person’s Affiliates and such
Person’s and such Person’s Affiliates respective managers, administrators, trustees, partners,
directors, officers, employees, agents, fund managers and advisors.




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          “Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating
or migrating of any Hazardous Material in, into, onto or through the Environment.




          “Remedial Action” means (a) “remedial action” as such term is defined in CERCLA, 42
USC Section 9601(24), and (b) all other actions required by any Governmental Authority or
voluntarily undertaken to: (i) clean up, remove, treat, abate or otherwise take corrective action
to address any Hazardous Material in the Environment; (ii) prevent the Release or threat of
Release, or minimize the further Release of any Hazardous Material so it does not migrate or
endanger or threaten to endanger public health, welfare or the Environment; or (iii) perform
studies and investigations in connection with, or as a precondition to, (i) or (ii) above.




          “Reorganization” means, with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.




          “Reorganization Plan” means the Borrower’s Fifth Amended Joint Plan of Reorganization,
dated October 15, 2007 (as amended, restated or supplemented from time to time prior to the
Effective Date).




          “Requirement of Law” means, as to any Person, collectively, any and all requirements
of an arbitrator or a court or other Governmental Authority, including any and all laws, judgments,
orders, decrees, ordinances, rules, regulations or statutes, in each case applicable to or binding
upon such Person or any of its property or assets or to which such Person or any of its property or
assets is subject.




          “Requisite Lenders” means, at any time, Lenders having more than 50% of the aggregate
outstanding amount of all Loans at such time.




          “Restricted” means, when referring to cash or Cash Equivalents of the Borrower or any
of its Restricted Subsidiaries, that such cash or Cash Equivalents (a) appears (or would be
required to appear) as “restricted” on a consolidated balance sheet of the Borrower or of any such
Restricted Subsidiary (unless such appearance is related solely to the Loan Documents or Liens
created thereunder or the Revolving Credit Loan Documents or Liens created thereunder), (b) are
subject to any Lien in favor of any Person other than the Collateral Agent for the benefit of the
Secured Parties or the Revolving Credit Collateral Agent for the benefit of the Revolving Credit
Secured Parties (other than Liens permitted by Section 6.02(xv)) or (c) are not otherwise generally
available for use by the Borrower or such Restricted Subsidiary.




          “Restricted Joint Venture” means each Joint Venture formed or otherwise acquired after
the Effective Date, which the grant of any Lien on the Equity Interests thereof held by any Loan
Party (a) is prohibited by provisions of any contract, agreement, instrument or indenture governing
such Equity Interests, including any Organizational Document of such Joint Venture, (b) is
permitted only with the consent of any other Person (other than a Loan Party), and such consent has
not been obtained after the applicable Loan Party has made commercially reasonable efforts to
obtain such consent, (c) is prohibited by any Requirement of Law or requires a consent not obtained
of any Governmental Authority pursuant to such Requirement of Law after the applicable Loan Party
has made commercially reasonable efforts to obtain such consent, or (d) would trigger (1) an option
to purchase such Equity Interests held by any Loan Party, (2) the termination, dissolution or
liquidation of such Joint Venture or (3) any similar right by a third party, under, any contract,
license, agreement, instrument or other document evidencing or related to such Equity Interests,
including, with limitation, any Organizational Document of such Joint Venture.




-31-









 







Notwithstanding any provision of any Loan Document to the contrary, the Borrower and its
Subsidiaries shall not be required to seek the consent of any Person or Governmental Authority
described in this definition if the Borrower reasonably determines that such consent or seeking
such consent could trigger any event or circumstance described under clause (d) of this definition.




          “Restricted Payment” means any direct or indirect dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity Interests or Equity
Rights in the Borrower or any Restricted Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any Equity Interests or Equity
Rights in the Borrower or any Restricted Subsidiary. Without limiting the foregoing, “Restricted
Payments” with respect to any Person shall also include all payments made or required to be made by
such Person with respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing purposes.




          “Restricted Subsidiary” means any Subsidiary of the Borrower other than an
Unrestricted Subsidiary.




          “Restricting Information” has the meaning assigned to such term in Section 9.18(a).




          “Revolving Credit Administrative Agent” means Citibank, in its capacity as
administrative agent under the Revolving Credit Agreement, together with its successors in such
capacity.




          “Revolving Credit Agreement” means (i) that certain Credit Agreement, dated as of the
date hereof, among the Borrower, as the U.S. borrower, Solutia Europe SA/NV and Flexsys SA/NV, as
European borrowers, the lenders from time to time party thereto, the Revolving Credit
Administrative Agent, the Revolving Credit Collateral Agent, Citibank International plc, as
European collateral agent, DBNY, as syndication agent, GSCP, as documentation agent and CGMI, GSCP
and DBSI, as joint lead arrangers and as joint bookrunners, as amended, restated, supplemented or
modified from time to time to the extent permitted by this Agreement and the Intercreditor
Agreement and (ii) any other credit agreement, loan agreement, note agreement, promissory note,
indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or
other financial accommodation that has been incurred to extend (subject to the limitations set
forth herein and in the Intercreditor Agreement) or refinance in whole or in part the indebtedness
and other obligations outstanding under the (x) credit agreement referred to in clause (i) or (y)
any refinancing or renewal of the Revolving Credit Agreement, unless such agreement or instrument
expressly provides that it is not intended to be and is not a refinancing or renewal of the
Revolving Credit Agreement. Any reference to the Revolving Credit Agreement hereunder shall be
deemed a reference to any Revolving Credit Agreement then in existence.




          “Revolving Credit Collateral Agent” means Citibank, in its capacity as collateral
agent under the Revolving Credit Agreement, together with its successors in such capacity.




          “Revolving Credit Commitments” means the commitments of the lenders under the
Revolving Credit Agreement to make Revolving Credit Loans under the Revolving Credit Agreement.




          “Revolving Credit Loan Documents” means the Revolving Credit Agreement and the other
“Loan Documents” as defined in the Revolving Credit Agreement, including the mortgages and other
security documents, the guarantees and the notes issued thereunder.




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          “Revolving Credit Loans” means the revolving loans and swingline loans outstanding
under the Revolving Credit Agreement.




          “Revolving Credit Secured Parties” means the Revolving Credit Collateral Agent and
each other Person that is a “Secured Party” under the Revolving Credit Agreement and the other
Revolving Credit Loan Documents.




          “S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies,
Inc., and any successor thereto.




          “Sale and Leaseback Transaction” has the meaning assigned to such term in Section
6.06.





          “SEC” means the Securities and Exchange Commission.




          “Secured Parties” means each Agent, each Lender that holds Loans or has Commitments
(in its capacity as such) and each counterparty under any Pari Passu Secured Hedging Agreements (in
its capacity as such).




          “Security Agreement” means the Security Agreement, substantially in the form of
Exhibit J, among the Loan Parties party thereto and the Collateral Agent for the benefit of
the Secured Parties.




          “Security Documents” means the Security Agreement, the Non-U.S. Security Agreements,
the Security Trust Deed, the Pledge Agreement, the Non-U.S. Pledge Agreements, the Mortgages and
each other security agreement, pledge agreement or other instrument or document executed and
delivered pursuant to Section 5.11, 5.12, 5.15, 5.17 or 5.19 to secure any of the Obligations.




          “Security Trust Deed” means the Security Trust Deed, dated as of the date hereof,
among the Administrative Agent, the Collateral Agent, the Borrower and the Persons named therein as
Chargors.




          “Senior Debt Repayments” means, for any period, optional prepayments of the Loans and
permanent optional reductions of the Revolving Credit Commitments to the extent that an equal
amount of the Revolving Credit Loans is simultaneously repaid during such period (to the extent
such prepayments of the Loans and repayments of the Revolving Credit Loans are made from internally
generated funds of the Borrower and its Restricted Subsidiaries, including cash and Cash
Equivalents received by the Borrower or any of its Restricted Subsidiaries as a return on
Investments).




          “SFC” means SFC LLC, a Delaware limited liability company, a bankruptcy-remote entity
which will receive certain proceeds under the Creditors Rights Offering on the Effective Date.




          “SFC Limited Liability Company Agreement” means the Limited Liability Company
Agreement of SFC in the form attached as Exhibit O2 to the Monsanto Settlement Agreement.




          “Small Asset Sale” means any sale or other disposition by the Borrower or any of its
Restricted Subsidiaries, of Property, that, when taken together with the fair market value of any
other Property sold or otherwise disposed of by the Borrower or any of its Restricted Subsidiaries
in any related sales or dispositions, has an aggregate fair market value of not more than $500,000.




          “Specified Asset Sales” means the sale or other disposition of the Property described
on Schedule 1.01(c); provided that (i) no Default has occurred and is continuing or
would immediately result




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therefrom and (ii) immediately after giving effect to such sale or other
disposition (and any related
repayment of the Loans), the Total Net Leverage Ratio (computed on a Pro Forma Basis as at the
date of the last ended Test Period, as if such sale or other disposition (and any related repayment
of the Loans) had occurred on the first day of such Test Period) would be lower than the Total Net
Leverage Ratio as at the date of the last ended Test Period without giving effect to such
transactions and, prior to the consummation thereof, the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer of the Borrower setting forth in
reasonable detail the calculations demonstrating compliance with the foregoing.




          “Spot Selling Rate” means, on any date of determination, the spot selling rate
determined by the Administrative Agent which shall be the spot selling rate posted by Reuters on
its website for the sale of the applicable currency for Dollars at approximately 5:00 p.m., New
York City time, on the prior Business Day; provided that if such rate is not available,
such rate shall be the spot selling rate posted by the Federal Reserve Bank of New York on its
website for the sale of the applicable currency for Dollars at approximately 5:00 p.m., New York
City time, on the prior Business Day.




          “Subordinated Debt” means Indebtedness of the Borrower or any Restricted Subsidiary
that is by its terms expressly subordinated in right of payment to the Obligations of the Borrower
or such Restricted Subsidiary, as applicable, but excluding intercompany Indebtedness.




          “Subordinated Debt Documents” means each document governing or pursuant to which is
issued any Subordinated Debt, as the same may be in effect from time to time in accordance with the
terms hereof and thereof.




          “Subsidiary” means, with respect to any Person (“parent”), (i) any
corporation, limited liability company, association or other business entity of which more than 50%
of the outstanding Equity Interests having ordinary voting power to elect a majority of the board
of directors of such corporation, limited liability company, association or other business entity
(irrespective of whether at the time any other class or classes of Equity Interests of such
corporation, limited liability company, association or other business entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by
the parent, by the parent and one or more other Subsidiaries of the parent, or by one or more other
Subsidiaries of the parent; (ii) any partnership of which more than 50% of the outstanding
partnership interests having the power to act as a general partner of such partnership
(irrespective of whether at the time any partnership interests other than general partnership
interests of such partnership shall or might have voting power upon the occurrence of any
contingency) are at the time directly or indirectly owned by the parent, by the parent and one or
more other Subsidiaries of the parent, or by one or more other Subsidiaries of the parent; or (iii)
any other Person that is otherwise Controlled by the parent, by the parent and one or more other
Subsidiaries of the parent, or by one or more other Subsidiaries of the parent. Unless otherwise
indicated, when used in this Agreement, the term “Subsidiary” shall refer to a Subsidiary of the
Borrower.




          “Subsidiary Guarantor” means each of the Borrower’s Restricted Subsidiaries that
Guarantees the Obligations pursuant to (a) the Guarantee Agreement or (b) a Non-U.S. Guarantee
Agreement and has not been released from such guarantees. For the avoidance of doubt, “Subsidiary
Guarantor” shall exclude each Excluded Subsidiary (other than Excluded Subsidiaries executing the
Guarantee Agreement on the Effective Date).




          “Survey” means a survey of any Mortgaged Property which is (a) (i) prepared by a
surveyor or engineer licensed to perform surveys in the jurisdiction where such Mortgaged Property
is loc-




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-ated, (ii) current as of a date which shows all exterior construction on the site of such
Mortgaged Property
or any easement, right of way or other interest in the Mortgaged Property has been
granted or become effective through operation of law or otherwise with respect to such Mortgaged
Property which, in either case, can be depicted on a survey, unless otherwise acceptable to the
Collateral Agent, (iii) certified by the surveyor (in a manner reasonably acceptable to the
Administrative Agent) to the Administrative Agent, the Collateral Agent and the Title Company, (iv)
complying in all respects with the minimum detail requirements of the American Land Title
Association (or the local equivalent) as such requirements are in effect on the date of preparation
of such survey and (v) sufficient for the Title Company to remove all standard survey exceptions
from the title insurance policy (or commitment) relating to such Mortgaged Property and issue the
endorsements of the type required by Section 4.01(u)(C) or (b) otherwise acceptable to the
Collateral Agent.




          “Syndication Agent” has the meaning assigned to such term in the preamble hereto.




          “Taking” means any taking of any Property of the Borrower or any Restricted Subsidiary
or any portion thereof, in or by condemnation or other eminent domain proceedings pursuant to any
law, general or special, or by reason of the temporary requisition or use of any Property of the
Borrower or any Restricted Subsidiary or any portion thereof, by any Governmental Authority.




          “Tax Return” means all returns, statements, filings, attachments and other documents
or certifications required to be filed in respect of Taxes.




          “Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority, including
any interest, additions to tax or penalties applicable thereto.




          “Terminated Lender” has the meaning assigned to such term in Section 2.18.




          “Termination Value” means, on any date in respect of any Hedging Agreement, after
taking into account the effect of any netting agreement relating to such Hedging Agreement, (a) if
such Hedging Agreement has been terminated as of such date, an amount equal to the termination
value determined in accordance with such Hedging Agreement and (b) if such Hedging Agreement has
not been terminated as of such date, an amount equal to the mark-to-market value for such Hedging
Agreement, which mark-to-market value shall be determined by the Administrative Agent by reference
to one or more mid-market or other readily available quotations provided by any recognized dealer
(including any Lender or an Affiliate of any Lender) of such Hedging Agreements.




          “Test Period” means (i) for the covenants contained in Sections 6.12 and 6.13, the
four consecutive complete Fiscal Quarters then last ended as of the date closest to each date
listed under the heading “Date” therein and (ii) for all other provisions in this Agreement, the
four consecutive complete Fiscal Quarters then last ended as of the time indicated. Except as
otherwise set forth herein, compliance with such covenants shall be tested, as of the end of each
Test Period, on the date on which the financial statements pursuant to Sections 5.01(a) or 5.01(b)
have been, or should have been, delivered for the applicable fiscal period. For the avoidance of
doubt, it is expressly understood and agreed that where the permissibility of a transaction or
designation hereunder depends upon compliance with (i) the covenant contained in Section 6.12 at
any date of determination prior to the completion of the second full Fiscal Quarter following the
Effective Date, the term “Test Period” means the period of four consecutive complete Fiscal
Quarters then last ended as of such date of determination, and for purposes of compliance with the
covenant set forth in Section 6.12, the applicable ratio specified in Section 6.12 for such Test
Period shall




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be the ratio set forth opposite the first date listed under the heading “Date” in
Section 6.12; and (ii) the
covenant contained in Section 6.13 at any date of determination prior to the completion of the
first full Fiscal Quarter following the Effective Date, the term “Test Period” means the period of
four consecutive complete Fiscal Quarters then last ended as of such date of determination, and for
purposes of compliance with the covenant set forth in Section 6.13, the applicable ratio specified
in Section 6.13 for such Test Period shall be the ratio set forth opposite the first date listed
under the heading “Date” in Section 6.13.




          “Title Company” means Chicago Title Insurance Company and its affiliated title
insurance companies or such other title insurance or abstract company as shall be selected by the
Borrower and reasonably approved by the Administrative Agent, subject to the right of the
Collateral Agent to require co-insurance from one or more additional title insurance companies as
it reasonably requires.




          “Title Policy” has the meaning assigned to such term in Section 4.01(u)(C).




          “Total Leverage Ratio” means, at any date, the ratio of (a) Consolidated Indebtedness
as of such date to (b) Consolidated EBITDA for the Test Period most recently ended.




          “Total Net Leverage Ratio” means, at any date, the ratio of (a) Consolidated Net
Indebtedness as of such date to (b) Consolidated EBITDA for the Test Period most recently ended.




          “Transaction Documents” means the Loan Documents (other than Hedging Agreements), the
Revolving Credit Loan Documents, the Bridge Loan Documents and the Reorganization Plan.




          “Transactions” means, collectively, the transactions to occur on or prior to the
Effective Date pursuant to the Transaction Documents, including (a) the execution, delivery and
performance of the Loan Documents and the Borrowings hereunder on the Effective Date; (b) the
execution, delivery and performance of the Revolving Credit Loan Documents and the initial
borrowings thereunder; (c) the execution, delivery and performance of the Bridge Loan Documents and
the borrowings thereunder on the Effective Date; (d) the Refinancing; and (e) the payment of all
fees and expenses to be paid on or prior to the Effective Date and owing in connection with the
foregoing and the Borrower’s emergence from chapter 11 protection.




          “Treasury Regulations” means the final and temporary (but not proposed) income tax
regulations promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).




          “Treasury Services Agreements” means, with respect to the Borrower or any of its
Restricted Subsidiaries, any direct or indirect liability, contingent or otherwise, of such Person
in respect of cash pooling services, cash management services (including treasury, depository,
overdraft (daylight and temporary), credit or debit card, electronic funds transfer and other cash
management arrangements), including obligations for the payment of fees, interest, charges,
expenses, attorneys’ fees and disbursements in connection therewith to the extent provided for in
the documents evidencing such cash management services.




          “Type”, when used in respect of any Loan or Borrowing, refers to the Rate by reference
to which interest on such Loan or on the Loans comprising such Borrowing is determined. For
purposes hereof, “Rate” means the Adjusted LIBO Rate or the Alternate Base Rate, as
applicable.




-36-









 








          “UCC” means the Uniform Commercial Code as in effect from time to time in any
applicable state or jurisdiction.




          “Unrestricted” means, when referring to cash or Cash Equivalents of the Borrower or
any of its Restricted Subsidiaries, that such cash or Cash Equivalents are not Restricted.




          “Unrestricted Subsidiary” means any Subsidiary of the Borrower designated as an
Unrestricted Subsidiary pursuant to Section 5.18 following the Effective Date.




          “Voting Stock” of a Person means all classes of Equity Interests of such Person then
outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof.




          “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any
date, the number of years obtained by dividing (a) the original aggregate principal amount of such
Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount
of each scheduled installment, sinking fund, serial maturity or other required payment of principal
including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) which will elapse between such date and the making of such payment.




          “Welfare Plan” means a “welfare plan,” as such term is defined in Section 3(1) of
ERISA, that is maintained or contributed to by a Loan Party or any Subsidiary or with respect to
which a Loan Party or any Subsidiary could incur liability.




          “Wholly Owned Restricted Subsidiary” means any Restricted Subsidiary that is a Wholly
Owned Subsidiary of the Borrower.




          “Wholly Owned Subsidiary” means, with respect to any Person, any corporation,
partnership or other entity of which all of the Equity Interests (other than, in the case of a
corporation, directors’ qualifying shares) are directly or indirectly owned or controlled by such
Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more
Wholly Owned Subsidiaries of such Person.




          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part 1 of
Subtitle E of Title IV of ERISA.




          SECTION 1.02. Types of Loans and Borrowings. For purposes of this Agreement, Loans may be
classified and referred to by Type (e.g., a “Eurodollar Loan”). Borrowings also
may be classified and referred to by Type (e.g., a “Eurodollar Borrowing”).




          SECTION 1.03. Terms Generally; Currency Translation; Accounting Terms; GAAP. (a) The definitions
of terms herein shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed
by the phrase “without limitation”. The word “will” shall be construed to have the same meaning
and effect as the word “shall.” Unless the context requires otherwise or otherwise specified in
any applicable Loan Document, (a) any definition of or reference to any Loan Document, agreement,
instrument or other document herein shall be construed as referring to such agreement, instrument
or other document as




-37-









 







from time to time amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person’s successors and assigns,
(c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed
to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any
law or regulation herein shall refer to such law or regulation as amended, modified or supplemented
from time to time, (f) the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights and (g) “on,” when used with respect to the
Mortgaged Property or any property adjacent to the Mortgaged Property, means “on, in, under, above
or about”. For purposes of this Agreement and the other Loan Documents, where the permissibility
of a transaction or determinations of required actions or circumstances depend upon compliance
with, or are determined by reference to, amounts stated in Dollars, such amounts shall be deemed to
refer to Dollars or Dollar Equivalents and any requisite currency translation shall be based on the
Spot Selling Rate in effect on the Business Day immediately preceding the date of such transaction
or determination and the permissibility of actions taken under Article VI shall not be affected by
subsequent fluctuations in exchange rates (provided that if Indebtedness is incurred to
refinance or renew other Indebtedness, and such refinancing or renewal would cause the applicable
Dollar denominated limitation to be exceeded if calculated at the Spot Selling Rate in effect on
the Business Day immediately preceding the date of such refinancing or renewal, such Dollar
denominated restriction shall be deemed not to have been exceeded so long as (x) such refinancing
or renewal Indebtedness is denominated in the same currency as such Indebtedness being refinanced
or renewed and (y) the principal amount of such refinancing or renewal Indebtedness does not exceed
the principal amount of such Indebtedness being refinanced or renewed except as permitted by the
definition of Permitted Refinancing (or in the case of a refinancing or renewal of the Indebtedness
incurred under the Revolving Credit Agreement, the Maximum Revolving Credit Facility Amount)). For
purposes of this Agreement and the other Loan Documents, unless the context otherwise requires, the
word “foreign” shall refer to jurisdictions other than the United States, the States thereof and
the District of Columbia.




          (b) Except as otherwise specified, if any payment under this Agreement or any other Loan
Document shall be due on any day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and in the case of any payment accruing interest, interest
thereon shall be paid for the period of such extension.




          (c) All terms of an accounting or financial nature shall be construed in accordance with GAAP,
as in effect from time to time; provided, however, that for purposes of determining
compliance with the covenants contained in Article VI, all accounting terms herein shall be
interpreted and all accounting determinations hereunder shall be made in accordance with GAAP as in
effect on the Effective Date and applied on a basis consistent with the application used in the
financial statements referred to in Section 3.05(a).




          SECTION 1.04. Resolution of Drafting Ambiguities. The Borrower acknowledges and agrees, on behalf
of itself and the other Loan Parties, that each of the Loan Parties was represented by counsel in
connection with the execution and delivery of the Loan Documents to which it is a party, that it
and its counsel reviewed and participated in the preparation and negotiation hereof and thereof and
that any rule of construction to the effect that ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation hereof or thereof.




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ARTICLE II




THE CREDITS




          SECTION 2.01. Commitments. (a) Subject to the terms and conditions hereof, each Lender severally
agrees to make a single Loan in Dollars to the Borrower on the Effective Date in a principal amount
equal to such Lender’s Commitment.




          (b) The Loans may from time to time be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a
combination thereof, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.02 and 2.03.




          (c) Each Loan shall be made as part of a Borrowing consisting of Loans of the same Type made
by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender
to make any Loan required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.




          (d) Amounts repaid or prepaid in respect of Loans may not be reborrowed.




          SECTION 2.02. Procedure for Borrowing. (a) The Borrower may borrow under the Commitments by giving
the Administrative Agent notice substantially in the form of Exhibit B (a “Borrowing
Request”), which notice must be received by the Administrative Agent prior to (a) 2:00 p.m.,
New York City time, three Business Days prior to the requested Borrowing Date, in the case of a
Eurodollar Borrowing, or (b) 2:00 p.m., New York City time, on the Business Day prior to the
requested Borrowing Date, in the case of an ABR Borrowing. The Borrowing Request for each
Borrowing shall specify (i) the amount to be borrowed, (ii) the requested Borrowing Date (which, in
the case of the initial Borrowings hereunder, shall be the Effective Date), (iii) whether the
Borrowing is to be of Eurodollar Loans or ABR Loans, (iv) if the Borrowing is to be of Eurodollar
Loans, the length of the initial Interest Period therefor, and (v) the location and number of the
account or accounts to which funds are to be disbursed, which shall comply with the requirements of
this Agreement. If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration.




          (b) Each Borrowing shall be in a minimum aggregate principal amount of $1.0 million or an
integral multiple of $500,000 in excess thereof.




          (c) Upon receipt of the Borrowing Request, the Administrative Agent shall promptly notify each
Lender of the aggregate amount of the Borrowing and of the amount of such Lender’s pro rata portion
thereof, which shall be based on their respective Commitments. Each Lender will make the amount of
its pro rata portion of the Borrowing available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in Section 9.01 prior to 10:00 a.m.,
New York City time, on the Borrowing Date in funds immediately available to the Administrative
Agent. Amounts so received by the Administrative Agent will promptly be made available to the
Borrower by the Administrative Agent depositing in the account or accounts specified in the
relevant Borrowing Request the aggregate of the amounts made available to the Administrative Agent by the Lenders
and in like funds as received by the Administrative Agent.




-39-









 









          SECTION 2.03. Conversion and Continuation Options for Loans. (a) The Borrower may elect from time to
time to convert (i) Eurodollar Loans to ABR Loans, by giving the Administrative Agent prior notice
of such election not later than 2:00 p.m., New York City time, on the Business Day prior to a
requested conversion or (ii) ABR Loans to Eurodollar Loans by giving the Administrative Agent prior
notice of such election not later than 2:00 p.m., New York City time, three Business Days prior to
a requested conversion; provided that such conversions of Eurodollar Loans may be made only on the
last day of the Interest Period with respect thereto. Any such notice of conversion to Eurodollar
Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon
receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof. All
or any part of the outstanding Eurodollar Loans or ABR Loans may be converted as provided herein;
provided that (i) no Loan may be converted into a Eurodollar Loan with an Interest Period
in excess of one month when any Event of Default has occurred and is continuing, (ii) the Borrower
shall not be entitled to elect any Interest Period in respect of any Eurodollar Loan if such
Interest Period would extend beyond the Maturity Date, and (iii) each conversion to or continuation
of Eurodollar Loans shall be in a minimum principal amount of $1.0 million or a whole multiple of
$500,000 in excess thereof.




          (b) Any Eurodollar Loans may be continued as such upon the expiration of the then current
Interest Period with respect thereto by the Borrower giving prior notice to the Administrative
Agent, not later than 2:00 p.m., New York City time, three Business Days prior to a requested
continuation setting forth the length of the next Interest Period to be applicable to such Loans;
provided that (i) no Eurodollar Loan with an Interest Period in excess of one month may be
continued as such when any Event of Default has occurred and is continuing, and (ii) the Borrower
shall not be entitled to elect any Interest Period in respect of any Eurodollar Loan if such
Interest Period would extend beyond the Maturity Date; and provided, further, that if the
Borrower shall fail to give any required notice as described above in this Section 2.03 or if such
continuation is not permitted pursuant to the preceding proviso, then such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring Interest Period (in
which case the Administrative Agent shall notify the Borrower of such conversion).




          (c) In connection with any Eurodollar Loans, there shall be no more than ten Interest Periods
outstanding at any time.




          SECTION 2.04. Optional and Mandatory Prepayments of Loans; Repayments of Loans. (a) The Borrower
may at any time and from time to time prepay the Loans (without premium or penalty except as
provided below and subject to compliance with the terms of Section 2.15), in whole or in part, upon
irrevocable notice to the Administrative Agent not later than 2:00 p.m., New York City time, (i) in
the case of prepayment of Eurodollar Loans, three Business Days before the date of prepayment and
(ii) in the case of prepayment of an ABR Loans, one Business Day before the date of prepayment,
specifying (A) the date and amount of prepayment, and (B) whether the prepayment is of Eurodollar
Loans, ABR Loans or a combination thereof (including in the case of Eurodollar Loans, the Borrowing
to which such prepayment is to be applied and, if of a combination thereof, the amount allocable to
each); provided, in the event that, prior to the date which is three years following the
Effective Date, there shall occur any voluntary prepayment of Loans pursuant to this Agreement, any
refinancing of the Loans with proceeds of new term loans having lower applicable margins or
applicable yield (after giving effect to the premiums paid on such new term loans) than the Applicable Margin or the
yield on the Loans as of the Effective Date (yield being determined in a manner reasonably
determined by the Administrative Agent and consistent with generally accepted financial practice)
or any amendment, amendment and restatement or other modification of this Agreement which reduces
the Applicable Margin or modifies the definition of Adjusted LIBO Rate to reduce the minimum rate
set forth therein, each such amendment, amendment and restatement, modification, prepayment or
refinancing, as the case may be, shall be accompanied by a




-40-









 







fee or prepayment premium, as
applicable, equal to (x) 3.00% of the principal amount prepaid or repaid or, with respect to such
reduction or such repricing, the principal amount outstanding on the date such amendment, amendment
and restatement or modification becomes effective, if such amendment, amendment and restatement,
modification, prepayment or refinancing, as the case may be, occurs after the Effective Date but
prior to the first anniversary of the Effective Date, (y) 2.00% of the principal amount prepaid or
repaid or, with respect to such reduction or such repricing, the principal amount outstanding on
the date such amendment, amendment and restatement or modification becomes effective, if such
amendment, amendment and restatement, modification, prepayment or refinancing, as the case may be,
occurs on or after the first anniversary of the Effective Date but prior to the second anniversary
of the Effective Date and (z) 1.00% of the principal amount prepaid or repaid or, with respect to
such reduction or such repricing, the principal amount outstanding on the date such amendment,
amendment and restatement or modification becomes effective, if such amendment, amendment and
restatement, modification, prepayment or refinancing, as the case may be, occurs on or after the
second anniversary of the Effective Date but prior to the third anniversary of the Effective Date.
As a condition to the effectiveness of any assignment pursuant to Section 2.18(b) in respect of any
amendment, amendment and restatement or modification to this Agreement effective prior to the third
anniversary of the Effective Date that has the effect of reducing the Applicable Margin in effect
on the Effective Date or modifying the definition of Adjusted LIBO Rate to reduce the minimum rate
set forth therein, the Borrower shall pay to such Non-Consenting Lender a premium equal to the
premium that would apply if such Non-Consenting Lender’s Loans being assigned were being prepaid
and subject to the premium set forth in the immediately preceding sentence. Upon receipt of any
such notice of prepayment the Administrative Agent shall promptly notify each Lender thereof. If
any such notice is given, the amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to such date on the amount prepaid. Partial
prepayments of Loans shall be in an aggregate principal amount of $1.0 million or a whole multiple
of $500,000 in excess thereof (or, if less, the remaining outstanding principal amount thereof).




          (b) (i) If the Borrower or any of its Restricted Subsidiaries shall incur any Indebtedness
(other than as permitted by Section 6.01) (each, a “Debt Incurrence”), 100% of the Net
Proceeds thereof shall be applied within three Business Days after receipt thereof toward the
prepayment of the Loans in accordance with Section 2.04(d) below.




          (ii) If the Borrower or any of its Restricted Subsidiaries shall receive Net Proceeds from any
Asset Sale Prepayment Event, 100% of such Net Proceeds shall be applied within five Business Days
after receipt thereof toward the prepayment of the Loans in accordance with Section 2.04(d) below;
provided that the Net Proceeds from Asset Sale Prepayment Events permitted by Section 6.05
(other than Specified Asset Sales to the extent necessary to satisfy the condition set forth in
clause (ii) of the definition of Specified Asset Sales) shall not be required to be applied toward
the prepayment of the Loans as provided herein on such date if and to the extent that (1) no Event
of Default or Default under Section 7.01(a) or under Section 7.01(i) then exists or would
immediately arise therefrom and (2) the Borrower delivers an officers’ certificate to the
Administrative Agent on or prior to or within five Business Days after the date of such Asset Sale
Prepayment Event stating that such Net Proceeds shall be reinvested or committed to be reinvested
in assets used or useful in the business of the Borrower or any
Restricted Subsidiary in each case within 365 days following the date of such Asset Sale
Prepayment Event (which certificate shall set forth the estimates of the proceeds to be so
expended), and if all or any portion of such Net Proceeds not so applied as provided herein is not
so used within such 365-day period (or if, prior to such 365th day, the Borrower or any such
Subsidiary shall have entered into a binding agreement to so use any such Net Proceeds, within 180
days following the end of such 365-day period), such remaining portion shall be applied toward the
prepayment of the Loans on the first Business Day to occur following such period as specified in
this Section 2.04(b)(ii); provided, further, if the Prop-




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-erty subject to such Asset
Sale Prepayment Event constituted Collateral under the Security Documents, then any assets
purchased with the Net Proceeds thereof pursuant to this Section 2.04(b)(ii) shall be mortgaged or
pledged, as the case may be, to the Collateral Agent, for the benefit of the Secured Parties, in
accordance with Section 5.11.




          (iii) If the Borrower or any of its Restricted Subsidiaries shall receive Net Proceeds from
insurance or condemnation recoveries in respect of any Destruction or any Net Proceeds in respect
of any Taking, 100% of the Net Proceeds thereof shall be applied within three Business Days after
receipt thereof toward the prepayment of the Loans in accordance with Section 2.04(d) below;
provided, that (x) so long as no Event of Default or Default under Section 7.01(a) or under
Section 7.01(i) then exists or would arise therefrom, such Net Proceeds shall not be required to be
so applied to the extent that the Borrower has delivered an officers’ certificate to the
Administrative Agent promptly following the receipt of such Net Proceeds stating that such proceeds
shall be used to (1) repair, replace or restore any Property in respect of which such Net Proceeds
were paid or (2) fund the substitution of other Property used or usable in the business of the
Borrower or the Restricted Subsidiaries, in each case within 365 days following the date of the
receipt of such Net Proceeds and (y) if all or any portion of such Net Proceeds not so applied as
provided herein is not so used within 365 days (or if, prior to such 365th day, the Borrower or any
such Subsidiary shall have entered into a binding agreement to so use any such Net Proceeds, within
180 days following the end of such 365-day period) after the date of the receipt of such Net
Proceeds, such remaining portion shall be applied on the first Business Day to occur following such
period as specified in this Section 2.04(b)(iii); provided, further, if the
Property subject to such Destruction or Taking constituted Collateral under the Security Documents,
then any replacement or substitution Property purchased with the Net Proceeds thereof pursuant to
this Section 2.04(b)(iii) shall be mortgaged or pledged, as the case may be, to the Collateral
Agent, for the benefit of the Secured Parties, in accordance with Section 5.11; provided,
further, notwithstanding the foregoing, no notice or officers’ certificate shall be
required to be delivered in connection with any such reinvestment hereunder if the proceeds of the
Destruction, Taking or other such events described in this clause, do not exceed $7.5 million.




          (iv) If there shall be Excess Cash Flow for any Excess Cash Flow Period, an amount equal to
(a) the Excess Cash Flow Percentage of such Excess Cash Flow less (b) the aggregate amount
of Senior Debt Repayments made during such Excess Cash Flow Period shall be applied, not later than
10 days after the date upon which the Borrower is required to deliver its annual audit report
pursuant to Section 5.01(b), toward the prepayment of the Loans in accordance with Section 2.04(d)
below.




          (c) The Loans shall be repaid in consecutive quarterly installments of $3.0 million on the
last day of each March, June, September and December (each such day, an “Installment Payment
Date”), commencing on March 31, 2008. To the extent not previously paid, all Loans shall be
due and payable on the Maturity Date.




          (d) (i) Optional prepayments in respect of Loans under this Agreement shall be applied to
reduce remaining scheduled installments of principal due in respect of outstanding Loans under
Section 2.04(c) in the order directed by the Borrower. Mandatory prepayments in respect of Loans
under this Agreement shall be applied first to reduce remaining scheduled installments of principal
due in respect of outstanding Loans under Section 2.04(c) in direct order of maturity up to but not
including the first scheduled installment due after the date that is 24 months following the date
of such prepayment. After application of prepayments pursuant to the immediately preceding
sentence and to the extent there are mandatory prepayment amounts remaining after such application,
such excess prepayments shall be applied to reduce outstanding Loans pro rata
against the remaining scheduled installments of principal




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due in respect of the Loans under Section
2.04(c) (including the final installment of principal due on the Maturity Date).




          (ii) Except as otherwise may be directed by the Borrower, any prepayment of Loans pursuant to
this Section 2.04 shall be applied, first, to any ABR Loans then outstanding and the balance of
such prepayment, if any, to the Eurodollar Loans then outstanding.




          SECTION 2.05. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of the Lenders, on the Maturity Date
(or such earlier date as, and to the extent that, such Loan becomes due and payable pursuant to
Section 2.04 or Article VII), the unpaid principal amount of each Loan held by each such Lender.
The Borrower hereby further agrees to pay interest in immediately available funds at the office of
the Administrative Agent specified in Section 2.11(a) on the unpaid principal amount of the Loans
made to it from time to time from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.06. All payments required hereunder shall be made
in Dollars.




          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender from time to time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.




          (c) The Administrative Agent shall maintain the Register pursuant to Section 9.04, and a
subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded
(i) the amount of each such Loan, the Type of each such Loan and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder in respect of each such Loan and (iii) the amount of any
sum received by the Administrative Agent hereunder from the Borrower in respect of each such Loan
and each Lender’s share thereof.




          (d) The entries made in the Register and accounts maintained pursuant to paragraphs (b) and
(c) of this Section 2.05 and the Notes maintained pursuant to paragraph (e) of this Section 2.05
shall, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to maintain such
account, such Register or such subaccount, as applicable, or any error therein, shall not in any
manner affect the obligation of the Borrower to repay (with applicable interest) the Loans in
accordance with the terms of this Agreement.




          (e) If requested by any Lender (which request shall be made to the Administrative Agent), the
Borrower shall duly execute and deliver to such Lender a Note or Notes, in substantially the form
attached hereto as Exhibit F, with the blanks appropriately filled, payable to such Lender
and its registered assigns, to evidence such Lender’s Loans.




          SECTION 2.06. Interest Rates and Payment Dates; Default Interest. (a) Each Eurodollar Loan shall
bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days)
for each day during each Interest Period with respect thereto at a rate per annum equal to the
Adjusted LIBO Rate determined for such Interest Period plus the Applicable Margin.




          (b) Each ABR Loan shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, or over a year of 360 days when the




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Alternate Base Rate is determined by reference to clause (c) of the definition of “Alternate Base
Rate”) at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.




          (c) If all or a portion of (i) the principal amount of any Loan, (ii) any interest payable
thereon or (iii) any other amount payable hereunder shall not be paid when due (whether at the
stated maturity thereof or by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum which is (x) in the case of overdue principal (except as otherwise provided in
clause (y) below), the rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section 2.06 plus 2.00% per annum or (y) in the case of any overdue
interest or other amount, the rate described in Section 2.06(b) applicable to an ABR Loan
plus 2.00% per annum, in each case from the date of such nonpayment to (but excluding) the
date on which such amount is paid in full (after as well as before judgment).




          (d) Interest shall be payable in arrears on each Interest Payment Date and on the Maturity
Date; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand and (ii) in the event of any repayment or prepayment of any Loan, accrued
interest on the principal amount repaid or prepaid shall be payable on the date of such repayment
or prepayment. Interest in respect of each Loan shall accrue from and including the first day of
an Interest Period to but excluding the last day of such Interest Period.




          SECTION 2.07. Computation of Interest. Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower
and the Lenders in the absence of manifest error.




          SECTION 2.08. Agent Fees. (a) The Borrower agrees to pay to the Administrative Agent the
administrative fee set forth in the Fee Letter (the “Agent Fees”).




          (b) All Agent Fees shall be paid on the dates due, in immediately available funds, to the
Administrative Agent. Once paid, none of the Agent Fees shall be refundable.




          SECTION 2.09. Termination of Commitments. Unless previously terminated, the Commitments shall
terminate at 5:00 p.m., New York City time, on the Effective Date.




          SECTION 2.10. Inability to Determine Interest Rate; Unavailability of Deposits; Inadequacy of Interest
Rate. If prior to 11:00 a.m., London time, two Business Days before the first day of any Interest
Period, including an initial Interest Period, for a requested Eurodollar Borrowing:





     (i) the Administrative Agent shall have determined in good faith (which
determination shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market generally, adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate for such Eurodollar Borrowing for such
Interest Period, or




     (ii) the Administrative Agent shall have received notice from the Requisite Lenders
that the Adjusted LIBO Rate determined or to be determined for such Interest Period for
such Eurodollar Borrowing will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their affected Loans during such Interest Period,



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then the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders by 12:00 noon, New York City time, on the same day. The Administrative Agent shall
give telecopy or telephonic notice to the Borrower and the Lenders as soon as practicable after the
circumstances giving rise to such notice no longer exist, and until such notice has been given, any
affected Eurodollar Loans shall not be (x) converted or continued pursuant to Section 2.03 or (y)
made pursuant to a Borrowing Request, and shall be continued or made as ABR Loans, as the case may
be.




          SECTION 2.11. Pro Rata Treatment and Payments. (a) Each payment (including each prepayment) by the
Borrower on account of principal of and interest on Loans which are ABR Loans shall be made pro
rata according to the respective outstanding principal amounts of such ABR Loans then held by the
Lenders. Each payment (including each prepayment) by the Borrower on account of principal of and
interest on Loans which are Eurodollar Loans designated by the Borrower to be applied to a
particular Eurodollar Borrowing shall be made pro rata according to the respective outstanding
principal amounts of such Loans then held by the Lenders. All such payments shall be made to the
Administrative Agent at the Administrative Agent’s office as set forth in Section 9.01(a) or at
such other office as the Administrative Agent shall specify for such purpose by notice to the
Borrower, except payments pursuant to Sections 2.14, 2.15 and 9.05 shall be made directly to the
Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons
specified therein. The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following receipt thereof.
If any payment hereunder (other than payments on Eurodollar Loans) becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding Business Day, and,
with respect to payments of principal, interest thereon shall be payable at the then applicable
rate during such extension. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next succeeding Business
Day (and, with respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension) unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be made on the immediately
preceding Business Day.




          (b) Subject to Section 2.10, unless the Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing that such Lender will not make the amount that would
constitute its share of such Borrowing available to the Administrative Agent, the Administrative
Agent may assume that such Lender is making such amount available to the Administrative Agent, and
the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent
by such Lender (a “Defaulting Lender”) and the Administrative Agent has made available
such amount to the Borrower, the Administrative Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor the Administrative Agent shall promptly
notify the Borrower and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover from such Lender
or the Borrower interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the Borrower to the date
such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to
(i) if paid by such Lender, the Overnight Rate or (ii) if paid by the Borrower, the then-applicable
rate of interest, calculated in accordance with Section 2.06, for the respective Loans.




          (c) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall
be




-45-









 







applied (i) first, towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal then due to such parties.




          SECTION 2.12. Illegality. Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law, or in the interpretation or application thereof, shall make it
unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a)
the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such
and convert ABR Loans to Eurodollar Loans shall forthwith be suspended until such time as the
making or maintaining of Eurodollar Loans shall no longer be unlawful, and (b) such Lender’s Loans
then outstanding as Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the
respective last days of the then current Interest Periods with respect to such Loans or within such
earlier period as required by law.




          SECTION 2.13. Requirements of Law. (a) If at any time any Lender reasonably determines that the
introduction of, or any change in or in the interpretation of, any law, treaty or governmental
rule, regulation or order (other than any change by way of imposition or increase of reserve
requirements included in determining the Adjusted LIBO Rate) or the compliance by such Lender with
any guideline, request or directive from any central bank or other Governmental Authority (whether
or not having the force of law), shall have the effect of increasing the cost to such Lender for
agreeing to make or making, funding or maintaining any Eurodollar Loans, then the Borrower shall
from time to time, within 20 days of written demand therefor by such Lender (with a copy of such
written demand to the Administrative Agent), pay to the Administrative Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower and the Administrative Agent by such Lender, shall
be conclusive and binding for all purposes, absent manifest error. Such Lender shall promptly
notify the Administrative Agent and the Borrower in writing of the occurrence of any such event,
such notice to state, in reasonable detail, the reasons therefor and the additional amount required
fully to compensate such Lender for such increased cost or reduced amount. Such additional amounts
shall be payable directly to such Lender within 20 days of the Borrower’s receipt of such
written notice, and such notice shall, in the absence of manifest error, be conclusive and binding
on the Borrower.




          (b) If any change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator or other
Governmental Authority after the Effective Date affects or would affect the amount of capital
required or expected to be maintained by any Lender (or a holding company controlling such Lender)
and such Lender reasonably determines that the rate of return on its capital (or the capital of its
holding company, as the case may be) as a consequence of the Loans made by it is reduced to a level
below that which such Lender (or its holding company) could have achieved but for the occurrence of
any such circumstance, then, in any such case upon written notice from time to time by such Lender
to the Borrower, the Borrower shall, within 20 days of the Borrower’s receipt of such notice, pay
directly to such Lender additional amounts sufficient to compensate such Lender (or its holding
company) for such reduction in rate of return. A statement of such Lender as to any such
additional amount or amounts (including calculations thereof in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding. In determining such amount, such Lender may
use any reasonable method of averaging and attribution that it shall deem applicable.




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          SECTION 2.14. Taxes. (a) Subject to Section 2.14(g), any and all payments by any Loan Party under
any Loan Document shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges, fees, duties, or withholdings of any nature
whatsoever and all liabilities (including for penalties, interest and reasonable expenses) arising
therefrom or with respect thereto, but excluding (i) taxes imposed on or measured by the
recipient’s net income or net profits (including branch profits or similar taxes imposed in lieu of
net income taxes), and franchise taxes imposed in lieu of net income taxes, by a jurisdiction (or
political subdivision thereof) under the laws of which such Lender or Agent (as the case may be) is
organized or, in the case of a Lender, has its applicable lending office, and (ii) any U.S.
withholding taxes imposed on amounts payable to a Lender under the Loan Documents under laws
(including any statue, treaty or regulation) in effect on the date hereof (or, in the case of (x)
an assignee, the date of the relevant Assignment and Assumption, but not excluding U.S. withholding
taxes to the extent that its assignor was entitled at the date of the Assignment and Assumption to
receive additional amounts from the Borrower with respect to such U.S. withholding taxes and (y) a
successor Agent, the date of the appointment of such Agent, but not excluding U.S. withholding
taxes to the extent that the predecessor Agent was entitled at the date of the appointment to
receive additional amounts from the Borrower with respect to such U.S. withholding taxes), but not
excluding any U.S. withholding taxes payable as a result of any change in such laws occurring after
the date such Lender becomes a party hereto (or the date of such Assignment and Assumption or the
date of such appointment as the case may be) (such non-excluded items being called “Indemnified
Taxes”). In the event that any withholding or deduction from or in respect of any payment
under any Loan Document is required in respect of any Indemnified Taxes pursuant to any applicable
law then the Borrower will, or will cause each relevant Loan Party to, (i) make such required
withholding or deduction and pay directly to the relevant authority the full amount required to be
so withheld or deducted in accordance with applicable law, (ii) promptly forward to the
Administrative Agent at its address referred to in Section 9.01 documentation reasonably
satisfactory to the Administrative Agent evidencing such payment to such authority and (iii) pay to
the Administrative Agent for the account of the Lenders and the Agents such additional amount or
amounts as are necessary to ensure that the net amount actually received by each Lender or Agent
(as the case may be), after making all required withholdings and deductions (including withholdings
and deductions applicable to additional sums payable under this Section 2.14), will equal the full amount such Lender or Agent (as the case
may be) would have received had no such withholding or deduction been required.




          (b) In addition, the Borrower will, and will cause each relevant Loan Party to, pay any
present or future stamp or documentary taxes or any other excise, property, intangible, mortgage,
recording or similar taxes, charges or similar levies of any jurisdiction, and all liabilities
(including for penalties, interest and reasonable expenses) arising therefrom or with respect
thereto, in each case arising from any payment made under any Loan Document or from the execution,
delivery or registration of, or otherwise with respect to, any Loan Document (collectively,
“Other Taxes”).




          (c) The Borrower will, and will cause each other Loan Party to, jointly and severally,
indemnify each Lender and each Agent for the full amount of Indemnified Taxes and Other Taxes
(including any Indemnified Taxes and Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.14) paid by such Lender or Agent (as the case may be) and any liability
(including for penalties, interest and reasonable and documented expenses) arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legal
asserted. In addition, the Borrower will, and will cause each other Loan Party to, jointly and
severally, indemnify each Lender and each Agent, upon the written request of such Lender or Agent,
for taxes imposed on or measured by the net income of such Person, as such Person shall reasonably
determine are or were payable by such Person, in respect of amounts payable to such Person pursuant
to this Section 2.14 taking into account the




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amount of Indemnified Taxes that are (x) allowed as a
deduction in determining taxes imposed on or measured by the net income or allowed as a credit
against any taxes imposed on or measured by net income and (y) payable to such Person pursuant to
this Section 2.14. This indemnification shall be made within 20 days after the date such Lender or
Agent (as the case may be) makes written demand therefore. Such written demand shall set forth the
amount of such indemnification, and shall be presumed to be correct in the absence of manifest
error. The Borrower or other relevant Loan Party shall not be obligated to make a payment to any
Lender or Agent pursuant to this Section 2.14 in respect of any penalties, interest and other
liabilities attributable to any Indemnified Taxes and Other Taxes if such penalties, interest and
other liabilities are attributable to the gross negligence or willful misconduct of such Lender or
Agent. After a Lender or an Agent receives notice of the imposition of the Indemnified Taxes or
Other Taxes that are subject to this Section, such Lender or Agent will act in good faith to
promptly notify the Borrower of its obligations thereunder; provided, that the failure to
provide such notice shall not relieve the Borrower of the Borrower’s obligation to indemnify such
Lender or Agent pursuant to this Section 2.14. For purposes of this Section 2.14, a distribution
hereunder by the Administrative Agent to or for the account of any Lender or Agent shall be deemed
a payment by the Borrower or such other relevant Loan Party.




          As soon as practical after the date of any payment of Indemnified Taxes or Other Taxes by any
Loan Party pursuant to this Section 2.14, the Borrower will, or will cause the relevant Loan Party
to, furnish to the Administrative Agent, at its address referred to in Section 9.01, evidence of
such payment reasonably satisfactory to the Administrative Agent. If the Borrower or other
relevant Loan Party fails to remit to the Administrative Agent, for the account of the respective
Lenders and Agents, such documentary evidence, the Borrower shall indemnify the Lenders and Agents
for any incremental taxes, interest, penalties or other costs (including reasonable attorneys’ fees
and expenses) that may become payable by any Lender or Agent as a result of any such failure.




          For the avoidance of doubt, any amount payable by the Borrower or each relevant Loan Party
pursuant to this Section 2.14(c) shall not be duplicative of any amounts otherwise payable by the
Borrower or such relevant Loan Party pursuant to Section 2.14(a) or 2.14(b).




          (d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 2.14 shall survive the payment
in full of the Obligations and the termination of this Agreement.




          (e) Prior to the date hereof in the case of each Non-U.S. Lender that is a signatory hereto
(and on the date of the Assignment and Assumption pursuant to which it becomes a Lender in the case
of an assignee) and from time to time thereafter if reasonably requested by the Borrower or the
Administrative Agent, each Non-U.S. Lender that is entitled at such time to an exemption from
United States withholding tax, or that is subject to such U.S. tax at a reduced rate under an
applicable tax treaty, shall provide, if legally able to do so, the Administrative Agent and the
Borrower with two completed signed originals of the following: (i) Form W-8ECI (claiming exemption
from U.S. withholding tax because the income is effectively connected with a U.S. trade or
business) or any successor form, (ii) Form W-8BEN (claiming exemption from, or a reduction of, U.S.
withholding tax under an income tax treaty) or any successor form, (iii) in the case of such a
Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certificate, in substantially the form of Exhibit K, or any other form approved
by the Administrative Agent and the Borrower, to the effect that such Lender is not (A) a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the
Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code and (y) duly completed copies of United
States Internal Revenue Service Form W-8BEN or (iv) any other applicable form, certificate or
document prescribed




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by the IRS certifying as to such Non-U.S. Lender’s entitlement to such
exemption from United States withholding tax or reduced rate with respect to all payments to be
made to such Non-U.S. Lender under the Loan Documents. Each Non-U.S. Lender shall also provide to
each of the Borrower and the Administrative Agent two completed copies of the relevant forms (or
successor forms), certificates or documents described in clauses (i) through (iv) of the
immediately preceding sentence (x) promptly upon request prior to the date that the most recent
form, certificate or document previously provided expires or becomes obsolete and (y) promptly
after the occurrence of any event requiring a change in the most recent form, certificate or
document previously provided, in each case, if legally able to do so, certifying that such Non-U.S.
Lender is exempt from or entitled to a reduced rate of U.S. withholding tax on payments made under
any Loan Document or to or for such Non-U.S. Lender, unless a change in law (including any change
in treaty or regulation) has occurred prior to the date on which any such delivery would otherwise
be required that renders all such documentation inapplicable or that would prevent such Non-U.S.
Lender from duly completing and delivering any documentation with respect to it. Unless the
Borrower and the Administrative Agent have received, prior to making any payments under any Loan
Document to or for a Non-U.S. Lender, forms or other documents satisfactory to them indicating that
such payments are not subject to U.S. withholding tax or are subject to such tax at a rate reduced
by an applicable tax treaty, the Loan Parties and the Administrative Agent shall withhold U.S.
withholding taxes required to be withheld by applicable Requirements of Law from such payments at
the applicable U.S. statutory rate.




          (f) Each Lender and the Administrative Agent that is a Domestic Person and that is not an
“exempt recipient” (as defined in Treasury Regulations Section 1.6049-4(c)) with respect to which
no back-up withholding is required shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Lender and the Administrative Agent that is a signatory hereto,
and on or prior to the date of the Assignment and Assumption pursuant to which it becomes a Lender
in the case of each assignee (and on or prior to the date on which a successor Administrative Agent
becomes the Administrative Agent), provide to the Borrower and the Administrative Agent two
complete copies or Form W-9 (certifying that such Person is entitled to an exemption from U.S.
backup withholding tax) or any successor from. Each of such Lender and the Administrative Agent
shall also provide to each of the Borrower and the Administrative Agent two completed copies of the
relevant forms (or successor forms) in
the immediately preceding sentence (x) promptly upon request by the Borrower or the
Administrative Agent prior to the date that the most recent form, certificate or document
previously provided expires or become obsolete and (y) promptly after the occurrence of any event
requiring a change in the most recent form, certificate or document previously provided, in each
case, if legally able to do so, certifying that such Lender or the Administrative Agent is entitled
to an exemption from U.S. backup withholding tax unless a change in law (including any change in
treaty or regulation) has occurred prior to the date on which any such delivery would otherwise be
required that renders all such documentation inapplicable or that would prevent such Lender or
Administrative Agent from duly completing and delivering any documentation with respect to it.




          (g) For any period (or portion of a period) with respect to which any Lender has failed to
comply with Section 2.14(e) or Section 2.14(f), such Lender shall not be entitled to
indemnification under Section 2.14(a) or Section 2.14(c) of any Indemnified Taxes or Other Taxes
imposed for such period (or portion of a period) by reason of such failure.




          (h) If the Administrative Agent or a Lender determines, in its good faith discretion, that it
has received a refund in respect of any Indemnified Tax or Other Taxes with respect to which the
Borrower has paid additional amount pursuant to this Section 2.14, it shall pay over such refund to
the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the
Borrower or other relevant Loan Party under this Section 2.14 with respect to the Taxes giving rise
to such





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refund), net of all out-of-pocket expenses of such Lender or Administrative Agent and
without interest (other than any interest paid by the relevant Governmental Authority with respect
to such refund); provided, that the Borrower, upon the request of such Lender or Administrative
Agent, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender
in the event the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section 2.14 shall not be construed to require the Administrative
Agent or any Lender to make available its tax returns (or any other information relating to its
taxes which it deems confidential) to the Borrower or any other Person.




          SECTION 2.15. Indemnity. The Borrower shall compensate each Lender, within 20 days after written
demand, for all losses, expenses and liabilities (including any loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender’s Eurodollar Loans to the Borrower but excluding any loss of the Applicable
Margin on the relevant Loans) that such Lender may sustain (a) if for any reason (other than solely
by reason of such Lender being a Defaulting Lender) a proposed Borrowing, conversion into or
continuation of Eurodollar Loans does not occur on a date specified therefor in a Borrowing Request
or any notice of conversion or continuation of any Loans delivered by the Borrower pursuant to
Sections 2.02 or 2.03 or otherwise, or a successive Interest Period does not commence after notice
therefor is given pursuant to Section 2.03, (b) if for any reason any Eurodollar Loan is prepaid
(including mandatorily pursuant to Section 2.04) on a date that is not the last day of the
applicable Interest Period, (c) as a consequence of a required conversion of a Eurodollar Loan to
an ABR Loan as a result of any of the events indicated in Section 2.12 or otherwise or (d) as a
consequence of any failure by the Borrower to repay Eurodollar Loans when required by the terms
hereof. The Lender making written demand for such compensation shall deliver to the Borrower
concurrently with such written demand a written statement as to such losses, expenses and
liabilities (which shall include calculations in reasonable detail), and such statement shall, in
the absence of manifest error, be conclusive as to the amount of compensation due to such Lender
and binding on the Borrower.




          SECTION 2.16. Change of Lending Office. Each Lender agrees that, upon the occurrence of any event
giving rise to the operation of Section 2.12, 2.13 or 2.14 with respect to such Lender, it will, if
requested by the Borrower, use commercially reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided that such
designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its
respective lending offices to suffer no material economic, legal or regulatory disadvantage; and
provided, further, that nothing in this Section 2.16 shall affect or postpone any
of the obligations of the Borrower or the rights of any Lender pursuant to Sections 2.12, 2.13 and
2.14.




          SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise of a
right of banker’s lien, setoff or counterclaim against the Borrower, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security or interest arising from,
or in lieu of, such secured claim received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain payment (voluntary or
involuntary) in respect of any Loans which at the time shall be due and payable as a result of
which the unpaid principal portion of its Loans which at the time shall be due and payable shall be
proportionately less than the unpaid principal portion of such Loans of any other Lender, it shall
be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly
pay to such other Lender the purchase price for, a participation in such Loans of such other
Lender, so that the aggregate unpaid principal




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amount of such Loans held by each Lender shall be in
the same proportion to the aggregate unpaid principal amount of all such Loans as prior to such
exercise of banker’s lien, setoff or counterclaim or other event; provided,
however, that if any such purchase or purchases or adjustments shall be made pursuant to
this Section 2.17 and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustments restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in a Loan deemed to have
been so purchased may exercise any and all rights of banker’s lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such Lender by reason thereof as fully as if
such Lender were a direct creditor directly to the Borrower in the amount of such participation.




          SECTION 2.18. Assignment of Commitments Under Certain Circumstances. In the event that (a) any
Lender shall have delivered a notice or certificate pursuant to Section 2.12 or 2.13, or the
Borrower shall be required to make additional payments to any Lender under Section 2.14 (each, an
“Increased Cost Lender”) or (b) subject to the terms and conditions of Section 9.08(e), in
connection with any proposed amendment, modification, termination, waiver or consent with respect
to any of the provisions hereof described in Section 9.08(e) with respect to which the consent of
the Requisite Lenders is obtained but the required consent of such Lender is not obtained (such
Lender, a “Non-Consenting Lender”); then, with respect to each such Increased Cost Lender
and each such Non-Consenting Lender (each, a “Terminated Lender”), the Borrower shall have
the right, but not the obligation, at its own expense, upon notice to such Terminated Lender and
the Administrative Agent, to replace such Terminated Lender with an assignee (in accordance with
and subject to the restrictions contained in Section 9.04) approved by the Administrative Agent
(which approval shall not be unreasonably withheld), and such Terminated Lenders hereby agree to
transfer and assign without recourse (in accordance with and subject to the restrictions contained
in Section 9.04) all its interests, rights and obligations under this Agreement to such assignee;
provided, however, that no Terminated Lender shall be obligated to make
any such assignment unless (i) such assignment shall not conflict with any law or any rule,
regulation or order of any Governmental Authority and (ii) such assignee or the Borrower shall pay
to each affected Terminated Lender in immediately available funds on the date of such assignment
the principal of and interest accrued to the date of payment on the Loans made by such Terminated
Lender and all other amounts accrued for such Terminated Lender’s account or owed to it hereunder.
Each Lender agrees that, if it becomes a Terminated Lender, it shall execute and deliver to the
Administrative Agent an Assignment and Assumption to evidence such sale and purchase and shall
deliver to the Administrative Agent any Note (if the assigning Lender’s Loans are evidenced by
Notes) subject to such Assignment and Assumption; provided, however, that the
failure of any Terminated Lender to execute an Assignment and Assumption shall not render such sale
and purchase (and the corresponding assignment) invalid and such assignment shall be recorded in
the Register.




          SECTION 2.19. Notice of Certain Costs. Notwithstanding anything to the contrary contained in Section
2.13 of this Agreement, to the extent any notice required by Section 2.13 is given by any Lender
more than 180 days after such Lender has actual knowledge of the occurrence of the event giving
rise to the additional cost, reduction in amounts, loss or other additional amounts described in
such Sections, such Lender shall not be entitled to compensation under Section 2.13 for any such
amounts incurred or accruing prior to the 181st day prior to the giving of such notice to the
Borrower.




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ARTICLE III




REPRESENTATIONS AND WARRANTIES




          In order to induce the Lenders and the Administrative Agent to enter into this Agreement and
to extend credit hereunder and under the other Loan Documents, the Borrower hereby makes the
representations and warranties set forth in this Article III on and as of the Effective Date (after
giving effect to the Transactions) and on and as of each other date required by Section 5.19 or
Schedule 5.19:




          SECTION 3.01. Organization, etc. (a) Each Loan Party and each of its Restricted Subsidiaries is a
corporation or other form of legal entity, duly organized or incorporated, as the case may be, and
validly existing and in good standing (to the extent such concept is applicable in the applicable
jurisdiction) under the laws of the jurisdiction of its organization or incorporation, as the case
may be, except, in the case of a Non-Guarantor Restricted Subsidiary, to the extent the failure to
be so organized or incorporated, existing and in good standing could not reasonably be expected to
have a Material Adverse Effect; (b) each Loan Party and each of its Restricted Subsidiaries, except
in the case of any Immaterial Restricted Subsidiary, has all requisite corporate or other
organizational power and authority to carry on its business as now conducted and to own and operate
its Property or hold under lease its Property operated under lease; (c) each Loan Party and each of
its Restricted Subsidiaries is duly qualified to do business and is in good standing as a foreign
corporation, foreign limited liability company, foreign partnership (or comparable foreign
qualification, if applicable, in the case of any other form of legal entity), as the case may be,
in each jurisdiction where the nature of its business requires such qualification, except where the
failure to so qualify or be in good standing, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect; (d) each Loan Party has full corporate or
other organizational power and authority to, and holds all requisite material licenses, permits and
other approvals of Governmental Authorities to, enter into and perform its obligations under each
Loan Document to which it is a party; and (e) each Loan Party and
each of its Restricted Subsidiaries has full corporate or other organizational power and
authority to, and holds all requisite material licenses, permits and other approvals of
Governmental Authorities to, own or hold under lease its Property and to conduct its business as
currently conducted by it, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.




     SECTION 3.02. Due Authorization, Non-Contravention, etc. The execution, delivery and performance by
each Loan Party of each Loan Document to which it is a party (including the execution, delivery and
performance by the Borrower of this Agreement), the borrowing of the Loans and the use of the
proceeds thereof and the consummation of each of the other Transactions are within each Loan
Party’s corporate, partnership or comparable powers, as the case may be, have been duly authorized
by all necessary corporate, limited liability company, partnership or comparable and, if required,
stockholder, action, as the case may be, and do not and will not:




     (a) contravene the Organizational Documents of any Loan Party or any of its respective
Restricted Subsidiaries;




     (b) contravene any material Requirement of Law;




     (c) result in any breach of any of the terms, covenants, conditions or provisions of,
or constitute a default or event of default or an acceleration of any rights or benefits
under, any Material Indebtedness or any other indenture, agreement or other instrument
binding upon any



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Loan Party or any of its respective Restricted Subsidiaries which could
reasonably be expected to result in a Material Adverse Effect; or




     (d) result in, or require the creation or imposition of, any Lien on any assets of any
Loan Party, except (i) Liens securing the intercompany note pledged to the Collateral Agent
and issued by Solutia Europe SA/NV in connection with the Permitted Restructuring, in each
case as described on Schedule 5.19, and (ii) Liens created under the Loan Documents
and the Revolving Credit Loan Documents.



          SECTION 3.03. Government Approval, Regulation, etc. No consent, authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority or any other Person is
required for the due execution, delivery or performance by any Loan Party of any Loan Document
(including the due execution, delivery and performance by the Borrower of this Agreement), the
borrowing of the Loans and the use of the proceeds thereof and the consummation of each of the
other Transactions except such as have been obtained or made and are in full force and effect and
except the filings necessary to perfect Liens under the Security Documents referred to in Section
3.21. No Loan Party or any of its respective Restricted Subsidiaries is an “investment company” or
a company “controlled” by an “investment company,” within the meaning of, or subject to regulation
under, the Investment Company Act of 1940.




          SECTION 3.04. Validity, etc. Each Loan Document delivered on the Effective Date has been duly
executed and delivered by each Loan Party party thereto and constitutes, and each other Loan
Document to which any Loan Party is to be a party will, on the due execution and delivery thereof
by such Loan Party, constitute, the
legal, valid and binding obligation of each such Loan Party enforceable in accordance with its
respective terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditors’ rights generally and to general principles
of equity, regardless of whether considered in a proceeding in equity or at law.




          SECTION 3.05. Financial Information. (a) The consolidated balance sheets of the Borrower and its
Subsidiaries and the related consolidated statements of income, stockholders’ equity and cash flow,
as of and for the 2004, 2005 and 2006 Fiscal Years, audited by and accompanied by the opinion of
Deloitte & Touche LLP, independent public accountants, copies of which have been furnished to the
Administrative Agent, have been prepared in accordance with GAAP except to the extent provided in
the notes to said financial statements, and present fairly in all material respects the
consolidated financial condition of the Borrower and its Subsidiaries as of the dates thereof and
the results of their operations and cash flows for the periods then ended.




          (b) The unaudited interim consolidated balance sheets of the Borrower and its Subsidiaries and
the related unaudited interim consolidated statements of income, stockholders’ equity and cash
flow, as of and for the Fiscal Quarters ended March 31, 2007, June 30, 2007 and September 30, 2007,
copies of which have been furnished to the Administrative Agent, have been prepared in accordance
with GAAP consistently applied except to the extent provided in the notes to said financial
statements, and on a basis consistent with audited financial statements referred to in Section
3.05(a), and present fairly in all material respects the consolidated financial condition of the
Borrower and its Subsidiaries as of the dates thereof and the results of their operations and cash
flows for the periods then ended (subject to normal year-end audit adjustments and the absence of
notes).




          (c) As of the Effective Date, except as disclosed in the financial statements referred to
above or the notes thereto or on Schedule 3.05, none of the Borrower or its Restricted
Subsidiaries has




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any material Indebtedness, accrued, contingent, absolute, determined, determinable
or other liabilities or unrealized losses.




          SECTION 3.06. No Material Adverse Effect. Since December 31, 2006, no event or circumstance has
occurred that has had, or could reasonably be expected to have, a Material Adverse Effect.




          SECTION 3.07. Litigation. There is no pending or, to the knowledge of the Loan Parties, threatened,
litigation, action or proceeding affecting the Borrower or any of its Restricted Subsidiaries, or
any of their respective operations, properties, businesses or assets, or any of the Transaction
Documents or the ability of the parties to consummate the Transactions and the other transactions
contemplated hereby, (i) which has a reasonable likelihood of adverse determination and, if
determined adversely, in the case of the Borrower and its Restricted Subsidiaries, could reasonably
be expected to have a Material Adverse Effect or (ii) which purports to affect the legality,
validity or enforceability of this Agreement or any other Loan Document or the Transactions or any
of the other transactions contemplated hereby or thereby.




          SECTION 3.08. Compliance with Laws and Agreements. None of the Loan Parties or any of their respective Restricted Subsidiaries has violated,
is in violation of or has been given written notice of any violation of any Requirement of Law
(other than Environmental Laws, which are the subject of Section 3.14) or has violated, is in
violation of or default under, or has been given written notice of any violation of or default
under, any and all indentures, agreements and other instruments binding upon it or its property,
except, in each case, for any such violations or defaults which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. No Default or Event of Default
has occurred and is continuing.




          SECTION 3.09. Ownership of Subsidiaries. (a) As of the Effective Date, Schedule 3.09(a)
sets forth the legal name and jurisdiction of organization of, the number of each class of
authorized Equity Interests of, the number of each class of outstanding Equity Interests of, and
the number of Equity Interests covered by outstanding options, warrants, rights of conversion or
purchase and similar rights in respect of such Equity Interests of each Subsidiary of the Borrower
and identifies each Subsidiary that is a Loan Party and each Subsidiary that is an Excluded
Subsidiary, in each case as of the Effective Date. All Equity Interests of each Loan Party are
duly and validly issued and are fully paid and non-assessable (to the extent applicable), and,
except as set forth on Schedule 3.09(a), other than the Equity Interests of the Borrower,
are owned by the Borrower, directly or indirectly through Wholly Owned Restricted Subsidiaries.




          (b) As of the Effective Date, except as set forth on Schedule 3.09(b), all Equity
Interests of each Restricted Subsidiary (other than Loan Parties) are duly and validly issued and
are fully paid and non-assessable (to the extent applicable) and are owned by the Borrower or
directly or indirectly through Wholly Owned Restricted Subsidiaries. Each Loan Party is the record
and beneficial owner of, and has good and marketable title to, the Equity Interests pledged by it
under any Security Document. The Equity Interests of each Restricted Subsidiary held, directly or
indirectly, by the Borrower are owned, directly or indirectly, by the Borrower free and clear of
all Liens other than Liens permitted by Sections 6.02(i), (v), (ix) or (xviii). There are not, as
of the Effective Date, any existing options, warrants, calls, subscriptions, convertible or
exchangeable securities, rights, agreements, commitments or arrangements for any Person to acquire
any Equity Interests of the Borrower or its Restricted Subsidiaries or any other securities
convertible into, exchangeable for or evidencing the right to subscribe for any such Equity




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Interests, or that require the issuance or sale of any such Equity Interests, except as set forth
on Schedule 3.09(b).




          (c) Other than consents which have been obtained and are in full force and effect, as of the
Effective Date, no consent of any Person including any other general or limited partner, any other
member of a limited liability company, any other shareholder or any other trust beneficiary is
necessary in connection with the creation, perfection or first priority status of the security
interest of the Collateral Agent in any Equity Interests pledged to the Collateral Agent for the
benefit of the Secured Parties under the Security Documents or the exercise by the Collateral Agent
of the voting or other rights provided for in the Security Documents or the exercise of remedies in
respect thereof.




          SECTION 3.10. Ownership of Properties. (a) Each of the Borrower and its Restricted Subsidiaries
has good and marketable title to (or other similar title in jurisdictions outside the United States
of America), or valid leasehold interests in, or easements or other limited property interests in,
or is licensed to use, all its material Properties (including all Mortgaged Properties) except for
minor defects in title that, individually or in the aggregate, do not interfere with its ability to
conduct its business as currently conducted at such Property or to utilize
each Property for its intended purpose. All such Properties are free and clear of Liens,
other than Permitted Liens. The property of the Borrower and its Restricted Subsidiaries, taken as
a whole, (i) is in good operating order, condition and repair (ordinary wear and tear and casualty
and condemnation excepted) in all material respects and (ii) except as could not reasonably be
expected to have a Material Adverse Effect, constitutes all the property which is required for the
business and operations of the Borrower and its Restricted Subsidiaries as presently conducted.
The use by each of the Borrower and its Restricted Subsidiaries of their material Properties and
all their respective rights with respect to the foregoing do not infringe on the rights of any
Person, except such infringements that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. No claim has been made and remains outstanding that
any of the Borrower’s or any of its Restricted Subsidiaries’ use of any of their respective
Properties violates the rights of any third party which could reasonably be expected to have a
Material Adverse Effect. As of the Effective Date, except as set forth on Schedule
3.10(a), no Loan Party is obligated under, or a party to, any option, right of first refusal or
other contractual right to purchase, acquire, sell, assign or dispose of any material Properties.
The representations and warranties set forth in this Section 3.10(a) shall not apply to
Intellectual Property, the representations and warranties of which are addressed separately in
Section 3.11.




          (b) As of the Effective Date, Schedule 3.10(b) contains a true and complete list of
each parcel of Real Property (i) owned by any Loan Party with a fair market value in excess of
$500,000 as of the date hereof and describes the type of interest therein held by such Loan Party
and (ii) leased, subleased or otherwise occupied or utilized by any Loan Party, as lessee, where
the aggregate annual rent, as of the Effective Date, with respect to such Property is in excess of
$100,000 (the “Leased Real Property”), as of the date hereof and describes the type of
interest therein held by such Loan Party.




          (c) As of the Effective Date, each of the Borrower and its Restricted Subsidiaries has
complied with all obligations under all leases with respect to the Leased Real Property to which it
is a party, and all such leases are in full force and effect, and no default by any Loan Party
party to such leases (and to the knowledge of the applicable Loan Party, by any other party
thereto) exists, except such noncompliance, failure to be in full force and effect and defaults
which could not reasonably be expected to have a Material Adverse Effect. As of the Effective
Date, each of the Borrower and its Restricted Subsidiaries enjoys in all material respects peaceful
and undisturbed possession under all such leases.




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          (d) As of the Effective Date, no Loan Party or any of its respective Restricted Subsidiaries
has received any written notice of, or has any actual knowledge of, any pending or contemplated
Taking affecting all or any portion of its Property or any sale or disposition thereof in lieu of a
Taking that remains unresolved as of the Effective Date. No Mortgage encumbers improved Real
Property that is located in an area that is designated a “flood hazard area” in any Flood Insurance
Rate Map published by the Federal Emergency Management Agency (or any successor agency) unless
flood insurance available under the National Flood Insurance Act of 1968 has been obtained in
accordance with Section 5.04.




          SECTION 3.11. Intellectual Property. Each of the Borrower and its Restricted Subsidiaries owns, is
licensed or otherwise has the right to use, all Intellectual Property necessary for the present
conduct of its business, except for those the failure to own or license or otherwise have the right
to use, could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No claim has been asserted and is pending by any Person challenging or questioning
the Borrower’s or any of its Restricted Subsidiaries’ use of any Intellectual Property, or the
validity or effectiveness of any Intellectual Property owned by the Borrower or its Restricted
Subsidiaries, nor does the Borrower or any Restricted Subsidiary know of any valid basis
for any such claim, except for such claims that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. The use of such Intellectual Property by
each of the Borrower and its Restricted Subsidiaries does not infringe the rights of any Person,
except for such claims and infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.




          SECTION 3.12. Taxes. Except as could not reasonably be expected to result in a Material Adverse
Effect, each of the Borrower and its Restricted Subsidiaries has (a) timely filed (subject to any
applicable extensions) all federal, state, local and foreign income and franchise Tax Returns and
all other Tax Returns required to have been filed by it and all such Tax Returns are true and
correct and (b) duly and timely paid, collected or remitted or caused to be duly and timely paid,
collected or remitted all Taxes (whether or not shown on any such Tax Return) due and payable,
collectible or remittable by it and all assessments received by it, except any such Taxes which are
being diligently contested in good faith by appropriate proceedings and for which adequate reserves
have been established on the books of the Borrower or its Restricted Subsidiary in accordance with
GAAP. Except as could not reasonably be expected to result in a Material Adverse Effect, each of
the Borrower and its Restricted Subsidiaries has made adequate provision in accordance with GAAP
for all Taxes not yet due and payable. None of the Borrower or any of its Restricted Subsidiaries
is aware of any proposed or pending Tax assessments, deficiencies or audits that, individually or
in the aggregate, could be reasonably expected to have a Material Adverse Effect. Except as could
not reasonably be expected to result in a Material Adverse Effect, the Borrower and its Restricted
Subsidiaries have complied with the payroll tax, wage withholding, social security and unemployment
withholding provisions of applicable Requirements of Law and has timely paid (subject to applicable
extensions) the amounts withheld over to the respective Governmental Authorities.




          SECTION 3.13. Pension and Welfare Plans. (a) No ERISA Event has occurred or is reasonably expected
to occur which could reasonably be expected to have a Material Adverse Effect or give rise to a
Lien on the assets of the Borrower or any of its Restricted Subsidiaries. The Borrower and its
Restricted Subsidiaries and their ERISA Affiliates are in compliance in all respects with the
presently applicable provisions of ERISA and the Code with respect to each Plan except for failures
to so comply which could not reasonably be expected to have a Material Adverse Effect. No
condition exists or event or transaction has occurred with respect to any Plan which reasonably
might result in the incurrence by the Borrower or any of its Restricted Subsidiaries or ERISA
Affiliates of any liability, fine or penalty which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.




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Neither the Borrower nor any of its
Restricted Subsidiaries has any direct, indirect, actual or contingent liability with respect to
post-retirement benefits under a Welfare Plan, other than (i) liability for continuation coverage
described in Part 6 of Subtitle B of Title I of ERISA and (ii) liabilities that, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse Effect.




          (b) Except as could not reasonably be expected to have a Material Adverse Effect, (i) each
Foreign Plan has been maintained in compliance with its terms and with the requirements of any and
all applicable laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities, and (ii) neither the Borrower
nor any of its Restricted Subsidiaries has incurred or is reasonably expected to incur any
obligation (whether direct, indirect, actual or contingent) in connection with the termination of
or withdrawal from any Foreign Plan.




          SECTION 3.14. Environmental. (a) Except as, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect, all facilities and property owned, leased or
operated by the Borrower or any of its Restricted Subsidiaries, and all operations conducted
thereon, are in compliance with all Environmental Laws.




          (b) There are no pending or threatened (in writing):





     (i) Environmental Claims received by the Borrower or any of its Restricted
Subsidiaries, or




     (ii) written claims, complaints, notices or inquiries received by the Borrower or
any of its Restricted Subsidiaries regarding Environmental Liability,


in each case which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.




          (c) There have been no Releases of Hazardous Materials at, on, under or from any property or
facility now or, to any Loan Party’s knowledge, previously owned, leased or operated by the
Borrower or any of its Restricted Subsidiaries that, individually or in the aggregate, have had or
could reasonably be expected to have a Material Adverse Effect.




          (d) The Borrower and its Restricted Subsidiaries have obtained and are in compliance with all
Environmental Permits necessary for their operations, facilities and businesses and each is in full
force and effect, except for such Environmental Permits and except for any such failure to obtain,
comply, or maintain in effect which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.




          (e) No property now or, to any Loan Party’s knowledge previously, owned, leased or operated by
the Borrower or any of its Restricted Subsidiaries is listed or, to any Loan Party’s knowledge,
proposed (with respect to owned property only) for listing (i) on the National Priorities List
pursuant to CERCLA or (ii) on the CERCLIS or on any similar list of sites requiring investigation
or clean-up, which, in each of the foregoing cases, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.




          (f) There are no underground storage tanks, active or abandoned, including petroleum storage
tanks, surface impoundments or disposal areas, on or under any property now or, to any Loan Party’s
knowledge previously, owned or leased by the Borrower or any of its Restricted Subsidiaries




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that could result in liabilities under Environmental Law which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.




          (g) Neither the Borrower nor any of its Restricted Subsidiaries has transported or arranged
for the transportation of any Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar list
or which transportation could reasonably be expected to lead to any Environmental Claim against the
Borrower or such Restricted Subsidiary which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.




          (h) Except for Permitted Liens, no Liens have been recorded pursuant to any Environmental Law
with respect to any property or other assets currently owned or leased by the Borrower or its
Restricted Subsidiaries.




          (i) Neither the Borrower nor any of its Restricted Subsidiaries is currently conducting any
Remedial Action pursuant to any Environmental Law, nor has any of the Loan Parties or any of their
respective Restricted Subsidiaries assumed by contract, agreement or operation of law, any Remedial
Action or other obligation under Environmental Law, the cost of which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.




          (j) There are no polychlorinated biphenyls or friable asbestos present at any property or
facility owned, leased or operated by the Borrower or any of its Restricted Subsidiaries, which,
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.




          (k) No Person with an indemnity or contribution obligation to the Borrower and its Restricted
Subsidiaries relating to compliance with or liability under Environmental Laws is in default with
respect to such obligation, except such defaults that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.




          (l) To the knowledge of any Loan Party, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including the release, emission, discharge,
presence or disposal of any Hazardous Substance, that could form the basis of any Environmental
Claim against the Borrower or any of its Restricted Subsidiaries or against any Person whose
liability for any Environmental Claim the Borrower or any of its Restricted Subsidiaries has
retained or assumed either contractually or by operation of law, or otherwise result in any costs
or liabilities under Environmental Law, which Environmental Claim, costs or liabilities could
reasonably be expected to have a Material Adverse Effect.




          (m) The Borrower and its Restricted Subsidiaries have made available to the Lenders
information and documents concerning compliance with or potential liability under Environmental
Laws, including those concerning the actual or suspected existence of Hazardous Material at Real
Property or facilities currently or formerly owned, operated, leased or used by the Borrower and
its Restricted Subsidiaries sufficient to enable a fair and accurate review and assessment of such
matters which, individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.




          SECTION 3.15. Federal Reserve Regulations. Neither the Borrower nor any of its Restricted
Subsidiaries is engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock (as defined in Regulation U).
The Loans, the use of the proceeds thereof, this Agreement, the pledge of the Pledged Securities
pursuant to the Security Documents, the Transactions and the other transactions contemplated hereby
will not result in a viola-




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tion of any provision of the regulations of the Board of Governors,
including Regulation U and Regulation X.




          SECTION 3.16. Disclosure; Accuracy of Information; Pro Forma Balance Sheets and Projected Financial
Statements. (a) There is no fact known to any Loan Party that could reasonably be expected to
have a Material Adverse Effect that has not been disclosed herein, in the other Loan Documents, in
the Information Memorandum, in the Disclosure Statement under the Reorganization Plan, in public
filings with the SEC or in any other documents or certificates furnished to the Administrative
Agent and the Lenders for use in connection with the transactions contemplated hereby and by the
other Loan Documents. Neither this Agreement nor any other material document, certificate or
written data furnished (taken as a whole and when furnished) to the Administrative Agent or any
Lender by or on behalf of any Loan Party in connection herewith (including the Information
Memorandum and the Projected Financial Statements) contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements contained herein and
therein not (taken as a whole and when furnished) materially misleading, in light of the
circumstances under which they were made; provided that to the extent this or any such
document, certificate or data (including the Information Memorandum and the Projected Financial
Statements) was based upon or constitutes a forecast, forward-looking statement or projection, the
Loan Parties represent only that they acted in good faith and utilized assumptions believed by
management of the Loan Parties to be reasonable at the time made. The Administrative Agent and the
Lenders understand, however, that forecasts, forward-looking statements and projections as to
future events are subject to significant uncertainties and contingencies which may be beyond the
Borrower’s and/or its Subsidiaries’ control and are not to be viewed as representations with
respect to future performance and no assurance is given by any of the Borrower or its Subsidiaries
that the results forecast in any such projections will be realized and that the actual results
during the period or periods covered by the forecasts, forward-looking statements or projections
may differ from the projected results and that such difference may be material.




          (b) The Borrower has heretofore furnished to the Administrative Agent the Borrower’s
pro forma consolidated balance sheet as of the Effective Date, prepared giving
effect to the Transactions as if the Transactions had occurred on such date. Such pro
forma consolidated balance sheet (i) was prepared in good faith by the Loan Parties on a
Pro Forma Basis based on the assumptions stated therein (which assumptions are believed by the Loan
Parties on the date hereof and on the Effective Date to be reasonable) and is based on the best
information reasonably available to the Loan Parties as of the date of delivery thereof, (ii)
accurately reflects in all material respects all adjustments necessary to give effect to the
Transactions as if they had occurred on such date and (iii) presents fairly in all material
respects the pro forma financial position of the Borrower and its consolidated
Subsidiaries at such date, assuming the Transactions had occurred on such date.




          (c) The Borrower has heretofore furnished to the Administrative Agent pro
forma consolidated income statement projections for the Borrower and its Restricted
Subsidiaries, pro forma consolidated balance sheet projections for the Borrower and
its Restricted Subsidiaries, and pro forma consolidated cash flow projections for
the Borrower and its Restricted Subsidiaries through the 2014 Fiscal Year, which shall be prepared
on a quarterly basis through the 2008 Fiscal Year and annually thereafter (the “Projected
Financial Statements”), which give effect to the Transactions and all Indebtedness and Liens
incurred or created in connection with the Transactions, and have been prepared in good faith by
the Borrower and based on assumptions believed by the Borrower on the date hereof and on the
Effective Date to be reasonable. Notwithstanding anything contained herein to the contrary, it is
hereby understood by the Administrative Agent and each Lender that (i) any financial or business
projections furnished to the Administrative Agent or any Lender by the Borrower or any of its
Subsidiaries under any Loan




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Document are subject to significant uncertainties and contingencies,
which may be beyond the Borrower’s and/or its Subsidiaries’ control, (ii) no assurance is given by any of the Borrower or
its Subsidiaries that the results forecast in any such projections will be realized and (iii) the
actual results may differ from the forecast results set forth in such projections and such
differences may be material.




          SECTION 3.17. Insurance. Set forth on Schedule 3.17 is a summary of all material insurance
policies maintained by the Borrower and each of its Restricted Subsidiaries as of the Effective
Date and such insurance policies constitute all insurance policies required to be maintained
pursuant to the Security Documents as of the Effective Date. The material insurance policies
maintained by the Borrower and its Restricted Subsidiaries (a) are in full force and effect, and
all premiums thereon have been duly paid to the extent due and neither the Borrower nor any of its
Restricted Subsidiaries has received any notice of cancellation or material violation thereof or if
otherwise in default thereunder, and the use, occupancy and operation of the property covered
thereby comply in all material respects with all applicable provisions thereof, in each case, as of
the Effective Date, (b) are maintained with financially sound and responsible insurance companies,
and (c) cover all properties material to the business of the Borrower and its Restricted
Subsidiaries against such casualties and contingencies and of such types, and in such amounts, as
are customary in the case of similar businesses of similar size operating in the same or similar
locations.




          SECTION 3.18. Labor Matters. Except as, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, (a) there are no strikes, lockouts or slowdowns against
the Borrower or any Restricted Subsidiary pending or, to the knowledge of any Loan Party,
threatened; (b) the hours worked by and payments made to employees of the Borrower and its
Restricted Subsidiaries have not been in violation of the Fair Labor Standards Act of 1938 or any
other applicable Federal, state, local or foreign law dealing with such matters; and (c) all
payments due from the Borrower or any Restricted Subsidiary, or for which any claim may be made
against the Borrower or any Restricted Subsidiary, on account of wages, have been paid or accrued
as a liability on the books of the Borrower or such Restricted Subsidiary. The consummation of the
Transactions will not give rise to any right of termination or right of renegotiation on the part
of any union under any collective bargaining agreement to which the Borrower or any of its
Restricted Subsidiaries is bound.




          SECTION 3.19. Solvency. Immediately following the making of each Loan and after giving effect to
the application of the proceeds of such Loans, and immediately after the consummation of the other
Transactions, (a) the fair value of the properties of the Borrower, individually, and the Borrower
on a consolidated basis with its Restricted Subsidiaries, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of the property of the
Borrower, individually, and the Borrower on a consolidated basis with its Restricted Subsidiaries,
will be greater than the amount that will be required to pay the probable liability of its debts
and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) the Borrower, individually, and the Borrower on a consolidated
basis with its Restricted Subsidiaries, does not intend to, and does not believe that it or its
Restricted Subsidiaries (on a consolidated basis with the Borrower) will, incur debts or
liabilities beyond the ability of the Borrower (individually) and its Restricted Subsidiaries (on a
consolidated basis with the Borrower) to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d) the Borrower,
individually, and the Borrower on a consolidated basis with its Restricted Subsidiaries, will not
have unreasonably small capital with
which to conduct its business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Effective Date.




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          SECTION 3.20. Consummation of the Reorganization Plan and Related Agreements. The Refinancing
and the other transactions contemplated by the Reorganization Plan will be “substantially
consummated” (within the meaning of Section 1101 of the Bankruptcy Code) on the Effective Date in
accordance with the terms of the Reorganization Plan.




          SECTION 3.21. Security Documents. (a) The Pledge Agreement is effective to create in favor of the
Collateral Agent, for the benefit of the Secured Parties, legal, valid and enforceable security
interests in the Collateral (as defined in the Pledge Agreement) and, when such Collateral is
delivered to the Collateral Agent and appropriate filings have been made in accordance with the
applicable UCC (and any such foreign filings necessary with respect to pledge entities organized
outside the United States), the Pledge Agreement shall constitute fully perfected Liens on, and
security interests in, all right, title and interest of the pledgor thereunder in such Collateral
to the extent such Liens and security interests can be perfected by filing and by possession.




          (b) (i) The Security Agreement, each Non-U.S. Security Agreement and each Non-U.S. Pledge
Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured
Parties, legal, valid and enforceable security interests in the Collateral referred to therein and
(ii) when (1) financing statements in appropriate form are filed in the offices specified on
Schedule 7 to the Perfection Certificate dated the Effective Date, (2) filings in
appropriate form are filed with the Unites States Patent and Trademark Office and the United States
Copyright Office, (3) upon the taking of possession or control by the Collateral Agent of any such
Collateral in which a security interest may be perfected only by possession or control (which
possession or control shall be given to the Collateral Agent to the extent possession or control by
the Collateral Agent is required by the Security Agreement, such Non-U.S. Security Agreement or
such Non-U.S. Pledge Agreement, as the case may be), and (4) any necessary filings, registrations
and other actions required under local law with respect to perfection in connection with each
Non-U.S. Pledge Agreement, each of the Security Agreement, each Non-U.S. Security Agreement and
each Non-U.S. Pledge Agreement shall constitute fully perfected Liens on, and security interests
in, all right, title and interest of the grantors thereunder in such Collateral to the extent such
Liens and security interests can be perfected by the filing of a financing statement pursuant to
the UCC or by possession or control by the Collateral Agent, in each case prior and superior in
right to any other Person, other than with respect to Permitted Liens.




          (c) When the filings in clause (b)(ii)(x) above are made and when the Security Agreement (or a
summary or short form thereof) is filed in the United States Patent and Trademark Office and the
United States Copyright Office, the Security Agreement shall constitute fully perfected Liens on,
and security interests in, all right, title and interest of the Loan Parties in the Intellectual
Property in which a security interest may be perfected by filing, recording or registering a
security agreement, financing statement or analogous document in the United States Patent and
Trademark Office or the United States Copyright Office, as applicable (it being understood that
subsequent recordings in the United States Patent and Trademark Office and the United States
Copyright Office may be necessary to perfect Liens on registered trademarks, trademark applications
and copyrights acquired by the Loan Parties after the Effective Date), in each case prior and
superior in right to any other Person other than with respect to Permitted Liens.




          (d) Each Mortgage executed and delivered to the Collateral Agent to secure the Obligations as
of the Effective Date is, or, to the extent any Mortgage is duly executed and delivered thereafter
by the relevant Loan Party, will be, effective to create, subject to the exceptions listed in each
title insurance policy covering each such Mortgage, in favor of the Collateral Agent, for the
benefit of the Secured Parties, legal, valid and enforceable Liens on and security interests in all
of the Loan Parties’ right,




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title and interest in and to the Mortgaged Properties thereunder and
the proceeds thereof, and when such Mortgages are recorded in the applicable office of each
political subdivision where each such Mortgaged Property is situated, such Mortgages shall
constitute fully perfected Liens on, and security interests in, all right, title and interest of
the Loan Parties in such Mortgaged Properties and the proceeds thereof, in each case prior and
superior in right to any other Person, other than with respect to the rights of Persons under the
exceptions listed in each title insurance policy covering each such Mortgage.




          (e) Each Security Document (other than any Mortgage) delivered pursuant to Sections 5.11,
5.12, 5.17 and 5.19 will, upon execution and delivery thereof and the filings set forth therein and
in this Section 3.21, be effective to create in favor of the Collateral Agent, for the benefit of
the Secured Parties, legal, valid and enforceable Liens on, and security interests in, all of the
Loan Parties’ right, title and interest in and to the Collateral thereunder, and (i) when all
appropriate filings or recordings are made in the appropriate offices as may be required under
applicable law and (ii) upon the taking of possession or control by the Collateral Agent of such
Collateral with respect to which a security interest may be perfected only by possession or control
(which possession or control shall be given to the Collateral Agent to the extent required by any
Security Document, except as directed by the Collateral Agent or the Administrative Agent), such
Security Document will constitute fully perfected Liens on, and security interests in, all right,
title and interest of the Loan Parties in such Collateral, in each case subject to no Liens other
than the applicable Permitted Liens.




          SECTION 3.22. Use of Proceeds. The Borrower will use the proceeds of the Borrowings on the
Effective Date to finance the Transactions, for working capital needs and for general corporate
purposes.




          SECTION 3.23. Anti-Terrorism Laws. (a) None of the Loan Parties or their respective Subsidiaries
and, to the knowledge of any Loan Party, none of their respective Affiliates is in violation of
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive
Order”), or the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (collectively, “Anti-Terrorism
Laws”).




          (b) None of the Loan Parties or their respective Subsidiaries and, to the knowledge of any
Loan Party, none of their respective Affiliates or their respective brokers or other agents acting
or benefiting in any capacity in connection with the Loans is any of the following:





     (i) a Person or entity that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order;




     (ii) a Person or entity owned or controlled by, or acting for or on behalf of, any
Person or entity that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;




     (iii) a Person or entity with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;




     (iv) a Person or entity that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order; or




     (v) a Person or entity that is named as a “specially designated national and
blocked person” on the most current list published by the U.S. Treasury Department
Office of



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Foreign Assets Control at its official website or any replacement website or
other replacement official publication of such list.




          (c) No Loan Party or, to the knowledge of any Loan Party, any of its brokers or other agents
acting in any capacity in connection with the Loans (i) conducts any business or engages in making
or receiving any contribution of funds, goods or services to or for the benefit of any Person
described in clause (b) above, (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in
or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or the purpose of attempting to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.




          SECTION 3.24. Status as Senior Debt. The Obligations constitute “Senior Debt” or “Designated Senior
Indebtedness” (or any other defined term having a similar purpose) within the meaning of all
outstanding Subordinated Debt Documents. The Commitments and the Loans and other extensions of
credit under the Loan Documents constitute “Credit Facilities” (or any other defined term having a
similar purpose) or liabilities payable under the documentation related to “Credit Facilities” (or
any other defined term having a similar purpose), in each case, within the meaning of all
outstanding Subordinated Debt Documents, the Bridge Loan Documents (to the extent applicable) and
the Exchange Note Documents (and any Permitted Refinancing thereof).




ARTICLE IV




CONDITIONS




          SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans on the Effective Date
are subject, at the time of the making of such Loans, to satisfaction or waiver of the following
conditions on or prior to the Effective Date:





     (a) The Administrative Agent shall have received from each party hereto a counterpart
of this Agreement signed on behalf of such party.




     (b) The Administrative Agent shall have received (i) counterparts of the Guarantee
Agreement signed on behalf of each Loan Party party thereto, and (ii) counterparts of the
Indemnity, Subrogation and Contribution Agreement signed on behalf of each Loan Party.




     (c) The Administrative Agent shall have received from the Borrower a Closing
Certificate, dated the Effective Date and signed on behalf of the Borrower by a Financial
Officer of the Borrower.




     (d) The Administrative Agent shall have received:




     (A) a certificate of the secretary, assistant secretary or managing director
(where applicable) or other authorized officer of each Loan Party dated the
Effective Date, certifying (i) that attached thereto is a true and complete copy of
each Organizational Document of such Loan Party certified (to the extent customary
in the applicable state) as of a recent date by the Secretary of State (or
equivalent Governmental Authority) of the jurisdiction of its organization, (ii)
that attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors and/or shareholders, as applicable, of such Loan Party
authorizing the execution, delivery and performance of the Loan



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Documents to which
such person is a party and, in the case of the Borrower, the borrowings hereunder,
and that such resolutions, or any other document attached thereto, have not been
modified, rescinded, amended or superseded and are in full force and effect and
(iii) as to the incumbency and specimen signature of each officer executing any Loan
Document on behalf of such Loan Party (together with a certificate of another
officer as to the incumbency and specimen signature of the secretary, assistant
secretary, managing director or other authorized officer executing the certificate
in this clause (A), and other customary evidence of incumbency); and





     (B) a certificate as to the good standing (where applicable, or such other
customary functionally equivalent certificates or abstracts, to the extent available
in the applicable jurisdiction) of each Loan Party (in so-called “long-form” if
available) as of a recent date, from the Secretary of State (or other applicable
Governmental Authority) of such Loan Party’s jurisdiction of organization.




     (e) The Administrative Agent shall have received from Kirkland & Ellis LLP, special
counsel to the Loan Parties, a customary written opinion addressed to each Agent and the
Lenders and dated the Effective Date, customary in form, scope and substance.




     (f) The Administrative Agent shall have received customary written opinions of (i)
local and foreign counsel to the Loan Parties in each of the jurisdictions (in each case
unless, and to the extent otherwise agreed by the Administrative Agent) specified in
Schedule 4.01(f)(i), in each case reasonably satisfactory to the Administrative
Agent, which opinions shall (x) be addressed to each Agent and the Lenders and be dated the
Effective Date, (y) cover various matters regarding the perfection and priority of the
security interests granted in respect of the Equity Interests of Persons organized in such
Non-U.S. Jurisdiction, and such other matters incident to the transactions contemplated
herein as the Agents may reasonably request and (z) be customary in form, scope and
substance in the jurisdiction of the relevant counsel, and (ii) local and foreign counsel to
the Loan Parties in each of the jurisdictions specified in Schedule 4.01(f)(ii),
which opinions (x) shall be addressed to each Agent and the Lenders and be dated the
Effective Date, (y) shall cover the enforceability of the respective Mortgages and Non-U.S.
Pledge Agreements and perfection of the Liens and security interests granted pursuant to the
relevant Security Documents and such other matters incident to the transactions contemplated
herein as the Administrative Agent may reasonably request and (z) shall be customary in
form, scope and substance in the jurisdiction of the relevant counsel.




     (g) The Joint Lead Arrangers and Bookrunners shall have received, sufficiently in
advance of the Effective Date, all documentation and other information requested by the
Lenders at least two Business Days prior to the Effective Date in order to enable compliance
with applicable “know your customer” and anti-money laundering rules and regulations
(including the PATRIOT Act), including the information described in Section 9.19.




     (h) The Administrative Agent shall have received the audited and unaudited consolidated
balance sheets and related statements of income, stockholders’ equity and cash flows of the
Borrower described in Section 3.05.




     (i) The Collateral Agent shall have received evidence and be reasonably satisfied that
the insurance required by Section 5.04 and the Security Documents is in effect in form and
substance reasonably satisfactory to the Collateral Agent.



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     (j) The Administrative Agent shall have received counterparts of the Intercreditor
Agreement signed on behalf of each party thereto.




     (k) The Administrative Agent shall have received Notes signed on behalf of the Borrower
in favor of each Lender that has requested a Note at least four Business Days prior to the
Effective Date.




     (l) The Administrative Agent shall have received certificates of the chief financial
officer of the Borrower (i) substantially in the form of Exhibit L, confirming the
solvency of the Borrower (individually and on a consolidated basis with its Restricted
Subsidiaries) after giving effect to the Transactions and (ii) confirming that, after giving
effect to the Transactions on a Pro Forma Basis, the Total Leverage Ratio as of the last day
of the most recent Test Period was not greater than 4.75:1.00, in each case, together with
such other supporting schedules and other evidence as may be reasonably requested by the
Administrative Agent.




     (m) The Administrative Agent shall have received (i) the pro forma consolidated balance
sheet referred to in Section 3.16(b), together with the certificate of the chief financial
officer of the Borrower certifying as to clauses (i)-(iii) of Section 3.16(b) and (ii) the
Projected Financial Statements.




     (n) The Reorganization Plan shall have been confirmed pursuant to the Confirmation
Order and not less than five Business Days shall have elapsed since the date that the
Confirmation Order became final and non-appealable. The Refinancing shall be consummated
contemporaneously with the transactions contemplated hereby in full to the reasonable
satisfaction of the Administrative Agent with all Liens in favor of the holders of the
Allowed Claims and Indebtedness being paid or repaid in connection with the Refinancing
being unconditionally released and de-registered, except for the de-registration of the
security for the €200.0 million, 10% Euro Notes issued by Solutia Europe SA/NV; the
Administrative Agent shall have received from any Person holding any Lien securing any such
Allowed Claims or Indebtedness, such UCC termination statements, mortgage releases, releases
of assignments of leases and rents, releases of security interests in Intellectual Property,
de-registrations and other instruments, in each case in proper form for recording, as the
Administrative Agent shall have reasonably requested to release and terminate of record the
Liens securing such Allowed Claims and Indebtedness; and the Administrative Agent shall have
received a “pay-off” letter in form and substance reasonably satisfactory to the
Administrative Agent with respect to such Allowed Claims and Indebtedness as may be reasonably
specified by the Administrative Agent. The Administrative Agent shall have
received a certificate of an authorized officer of the Borrower, certifying that attached
thereto is a true and complete copy of the Monsanto Settlement Agreement




     (o) After giving effect to the Transactions, the Borrower and its Subsidiaries shall
have no outstanding indebtedness other than (i) the Loans and other extensions of credit
under this Agreement, (ii) the loans and other extensions of credit under the Revolving
Credit Agreement, (iii) the loans under the Bridge Credit Agreement and (iv) Indebtedness
permitted to remain outstanding under the Reorganization Plan as confirmed pursuant to the
Confirmation Order or otherwise as permitted under this Agreement.




     (p) All approvals of Governmental Authorities and third parties necessary to consummate
the Transactions shall have been obtained and shall be in full force and effect and there
shall be no judicial or regulatory action by a Governmental Authority, actual or threatened,
that



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could reasonably be expected to restrain, prevent or impose materially burdensome
conditions on the Transactions or the other transactions contemplated hereby. The
Administrative Agent shall be reasonably satisfied that the Borrower, its Subsidiaries and
the Transactions shall be in full compliance with all material Requirements of Law,
including Regulation U and Regulation X, and shall have received reasonably satisfactory
evidence of such compliance reasonably requested by the Administrative Agent.




     (q) On or prior to the Effective Date, (i) the Revolving Credit Agreement shall have
become effective and (ii) the Borrower shall have received an aggregate amount equal to
$400.0 million in gross proceeds from the Bridge Credit Agreement.




     (r) The Administrative Agent shall have received all fees payable to the Administrative
Agent, any of the Joint Lead Arrangers and Bookrunners or any of the Lenders on or prior to
the Effective Date under the Fee Letter and all other amounts due and payable pursuant to
the Loan Documents on or prior to the Effective Date, including reimbursement or payment of
all reasonable and invoiced out-of-pocket expenses (including reasonable fees, charges and
disbursements of Skadden, Arps, Slate, Meagher & Flom LLP) required to be reimbursed or paid
by any Loan Party hereunder or under any other Loan Document.




     (s) The Administrative Agent shall have received subordination agreements in form and
substance reasonably satisfactory to it covering all Intercompany Notes or other obligations
owed by a Loan Party to a Subsidiary of the Borrower that is not a Loan Party.




     (t) The Collateral Agent shall have received (i) counterparts of the Security Agreement
signed by each Loan Party party thereto, (ii) counterparts of the Pledge Agreement signed by
each Loan Party party thereto and covering pledges of 100% of the Equity Interests held by
such Loan Parties in all of their Restricted Subsidiaries (other than Excluded Subsidiaries)
and all their Non-U.S. Restricted Subsidiaries that are Subsidiary Guarantors, 65% (or such
greater percentage as could not, in the good faith judgment of the Borrower, reasonably be
expected to have material adverse tax consequences to the Borrower or its Restricted
Subsidiaries) of the Equity Interests held by such Loan Parties in all of their “first tier”
Non-U.S. Restricted Subsidiaries (other than Excluded Subsidiaries described in clauses (a),
(b), (e), (f) and (g) of the definition thereof) and other Equity Interests held by such
Loan Parties (excluding Equity Interests in Excluded Joint Ventures held by such Loan
Parties), other than any Equity Interests of such Subsidiaries pledged pursuant to Non-U.S.
Pledge Agreements, and (iii) counterparts of each Non-U.S.
Pledge Agreement reasonably requested by the Collateral Agent signed by each Loan Party
party thereto and covering pledges of 65% (or such greater percentage as could not, in the
good faith judgment of the Borrower, reasonably be expected to have material adverse tax
consequences to the Borrower or its Restricted Subsidiaries) of the Equity Interests held by
such Loan Parties in all of their “first tier” Non-U.S. Restricted Subsidiaries (other than
Excluded Subsidiaries described in clauses (a), (b), (e), (f) and (g) of the definition
thereof), together with the following in form and substance reasonably satisfactory to the
Collateral Agent:




     (A) to the extent certificated or in bearer form, certificates representing all
Pledged Securities (and in the case of certificates representing Equity Interests in
Non-U.S. Subsidiaries, to the extent permitted to leave the jurisdiction of
formation of such Non-U.S. Subsidiary) or bearer form securities, together with
executed and undated stock powers and/or assignments in blank (if applicable);



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     (B) all promissory notes (including the Master Intercompany Note) evidencing
all intercompany Indebtedness (“Intercompany Notes”) owed to any Loan Party
by the Borrower or any Subsidiary as of the Effective Date and all other instruments
representing any other intercompany Indebtedness owed to any Loan Party, together
with executed and undated instruments of assignment endorsed in blank;




     (C) all endorsements and certificates of insurance required under this
Agreement;




     (D) appropriate financing statements or comparable documents authorized by (and
executed by, to the extent applicable) the appropriate entities in proper form for
filing under the provisions of the UCC and applicable domestic, local and foreign
laws, rules or regulations in each of the offices where such filing is necessary or
appropriate, in the Collateral Agent’s reasonable discretion, to grant to the
Collateral Agent perfected Liens on the Collateral, superior and prior to the rights
of all third persons other than the holders of Permitted Liens;




     (E) evidence of the preparation for recording or filing, as applicable, of all
recordings and filings of each such Security Document, including with the United
States Patent and Trademark Office and the United States Copyright Office, and
delivery and recordation, if necessary, of such other security and other documents
as may be necessary to perfect the Liens created, or purported to be created, by
such Security Documents; and




     (F) a completed Perfection Certificate dated the Effective Date and signed by a
Financial Officer or other authorized officer of the Borrower and each other Loan
Party, together with all attachments contemplated thereby, including the results of
a search of the UCC (or equivalent) filings made with respect to the Loan Parties in
the jurisdictions contemplated by the Perfection Certificate and copies of the
financing statements (or similar documents) disclosed by such search and evidence
reasonably satisfactory to the Administrative Agent that the Liens indicated by such
financing statements (or similar documents) (i) are Permitted Liens, (ii) have been
released (including delivery and recordation of UCC-3 termination statements with
respect to UCC filings that do not constitute Permitted Liens) or (iii) relate to
Indebtedness for which the Administrative Agent has received the payoff letter
required by Section 4.01(n) above.




     (u) The Collateral Agent shall have received the following documents and instruments in
respect of each of the Mortgaged Properties identified on Schedule 4.01(u):




     (A) a Mortgage encumbering each of the same in favor of the Collateral Agent,
for the benefit of the Secured Parties, duly executed and acknowledged by each Loan
Party that holds any direct interest in such Mortgaged Property, and otherwise in
form for recording in the applicable office of each political subdivision where each
such Mortgaged Property is situated, together with such certificates, affidavits,
questionnaires or returns as shall be required in connection with the recording or
filing thereof to create a lien under applicable Requirements of Law, in favor of
the Collateral Agent for the benefit of the Secured Parties, and such financing
statements and any other instruments as are contemplated by the counsel opinions
described in Section 4.01(f) in respect of such Mortgages and any other instruments
necessary to grant a mortgage lien under the laws of any applicable jurisdiction,
all of which shall be in form and substance reasonably satis-



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factory to the
Collateral Agent, which Mortgages and financing statements and other instruments
shall when recorded be effective to create Liens on such Mortgaged Property subject
to no other Liens other than Permitted Liens;




     (B) such consents, approvals, amendments, supplements, tenant subordination
agreements or other instruments, in form reasonably satisfactory to the Collateral
Agent, as necessary to consummate the transactions contemplated hereby in order for
the owner or holder of the fee interest constituting such Mortgaged Property to
grant the Liens contemplated by the Mortgages with respect to such Mortgaged
Property;




     (C) with respect to each Mortgage of property located in the United States or,
to the extent reasonably requested by the Collateral Agent, any other jurisdictions,
a policy of title insurance (or marked title commitment having the effect of a title
insurance policy) insuring the Lien of such Mortgage as a valid perfected mortgage
lien on the real property and fixtures described therein in favor of the Collateral
Agent for the benefit of the Secured Parties in an amount equal to not less than
115% of the fair market value of such real property and fixtures (which fair market
value is set forth on Schedule 4.01(u)(C)), which policies (or marked
commitments having the effect of title insurance policies) (each, a “Title
Policy”) shall (v) be issued by the Title Company, (w) to the extent necessary,
include such reinsurance arrangements (with provisions for direct access) as shall
be reasonably acceptable to the Collateral Agent, (x) contain a “tie-in” or
“cluster” endorsement (if available under applicable law) (i.e., policies
which insure against losses regardless of location or allocated value of the insured
property up to a stated maximum coverage amount), (y) have been supplemented by such
endorsements as shall be reasonably requested by the Collateral Agent (including, if
available in the applicable jurisdiction, endorsements on matters relating to usury,
first loss, last dollar, zoning, contiguity, variable rate, revolving credit, doing
business, access, survey, address, subdivision, separate tax lot, non-imputation and
so-called comprehensive coverage over covenants and restrictions) and (z) contain
only such exceptions to title as shall be reasonably acceptable to the Collateral
Agent;




     (D) policies or certificates of insurance as required hereby or by the Mortgage
relating thereto, which policies or certificates shall comply with the insurance
requirements contained herein or in such Mortgage;




     (E) either (x) a Survey in form and substance reasonably acceptable to the
Collateral Agent or (y) an aerial survey, ExpressMapTM, or equivalent
photographic depiction of the Mortgaged Property which is reasonably acceptable to
the Collateral Agent and which is sufficient for the Title Company to remove all
standard survey exceptions from the title insurance policy (or commitment) relating
to such Mortgaged Property and issue the endorsements of the type required by
Section 4.01(u)(C); provided, however, that notwithstanding the
foregoing, a Survey will be provided to the Collateral Agent in the event it is
required in connection with the syndication of the Commitments and Loans;




     (F) to the extent available, environmental reports, including Phase I reports,
in form and substance reasonably satisfactory to the Collateral Agent;



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     (G) zoning compliance reports or other evidence reasonable satisfactory to the
Collateral Agent and which is sufficient for the Title Company to issue a zoning
endorsement for each Mortgaged Property as required by Section 4.01(u)(C);




     (H) such affidavits, certificates, information (including financial data) and
instruments of indemnification (including a so-called “gap” indemnification) as
shall be required to induce the Title Company to issue the Title Policy or Title
Policies and endorsements contemplated in subparagraph (C) above;




     (I) evidence acceptable to the Collateral Agent of payment by the appropriate
Loan Party of all applicable Title Policy premiums, search and examination charges,
survey costs and related charges, mortgage recording taxes, fees, charges, costs and
expenses required for the recording of the Mortgages and issuance of the Title
Policies referred to in subparagraph (C) above;




     (J) copies of all Material Leases or other agreements relating to the Mortgaged
Property where the aggregate annual rent, as of the Effective Date, with respect to
such Property is in excess of $2.0 million per year; and




     (K) a completed Federal Emergency Management Agency Standard Flood Hazard
Determination with respect to each Mortgaged Property located in the United States.



          SECTION 4.02. Conditions to Each Borrowing. The agreement of each Lender to make any Loan
(excluding continuations and conversions of Loans) requested to be made by it on any date is
subject to the satisfaction (or waiver) of the following conditions:





     (a) The Administrative Agent shall have received a notice of such Borrowing as required
by Section 2.02.




     (b) The representations and warranties set forth in Article III hereof and in the other
Loan Documents shall be true and correct (or true and correct in all material respects if
not otherwise qualified by materiality or by a Material Adverse Effect) with the same effect
as if then made (unless expressly stated to relate to an earlier date, in which case such
representations and warranties shall be true and correct (or true and correct in all material respects if
not otherwise qualified by materiality or by a Material Adverse Effect) as of such earlier
date).




     (c) At the time of and immediately after such Borrowing, no Default shall have occurred
and be continuing.


Each submission of a Borrowing Request and each Borrowing shall be deemed to constitute a
representation and warranty by the Borrower on the date of such Borrowing, as to the matters
specified in paragraphs (b) and (c) of this Section 4.02.




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ARTICLE V




AFFIRMATIVE COVENANTS




          The Borrower hereby covenants and agrees that on and after the Effective Date and until the
principal of and interest on each Loan and all fees and other amounts due and payable hereunder or
under any other Loan Document have been paid in full (other than unasserted contingent
indemnification obligations not due and payable):




          SECTION 5.01. Financial Information, Reports, Notices, etc. The Borrower will furnish, or will
cause to be furnished, to the Administrative Agent (for distribution to each Lender) copies of the
following financial statements, reports, notices and information:





     (a) within 45 days (or such shorter period for the filing of the Borrower’s Form 10-Q
as may be required by the SEC) after the end of each of the first three Fiscal Quarters of
each Fiscal Year, a consolidated balance sheet of the Borrower and its Restricted
Subsidiaries as of the end of such Fiscal Quarter and consolidated statements of earnings,
stockholders’ equity and cash flows of the Borrower and its Restricted Subsidiaries for such
Fiscal Quarter and for the same period in the prior Fiscal Year and for the period
commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal
Quarter, certified by a Financial Officer of the Borrower as fairly presenting, in all
material respects, the financial position, results of operations and cash flows of the
Borrower and its Restricted Subsidiaries as of the dates and for the periods specified on a
consolidated basis in accordance with GAAP consistently applied, and on a basis consistent
with audited financial statements referred to in Section 5.01(b) (subject to normal year-end
audit adjustments and the absence of notes), it being understood and agreed that the
delivery of the Borrower’s Form 10-Q (as filed with the SEC), if certified as required in
this Section 5.01(a), shall satisfy the requirements set forth in this clause to the extent
such Form 10-Q includes the information specified in this clause, together with a
certificate from a Financial Officer of the Borrower on behalf of the Borrower (a
“Compliance Certificate”) containing a computation in reasonable detail of, and
showing compliance with, each of the financial ratios and restrictions contained in the
Financial Covenants and to the effect that, in making the examination necessary for the
signing of such certificate, such Financial Officer has not become aware of any Default or
Event of Default that has occurred and is continuing, or, if such Financial Officer has
become aware of such Default or Event of Default, describing such Default or Event of
Default and the steps, if any, being taken to cure it;




     (b) within 90 days (or such shorter period as may be required for the filing of the
Borrower’s Form 10-K by the SEC) after the end of each Fiscal Year of the Borrower, a copy
of the annual audit report for such Fiscal Year for the Borrower, including therein a
consolidated balance sheet of the Borrower and its Restricted Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings, stockholders’ equity and cash
flows of the Borrower and its Restricted Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion (without any Impermissible Qualification) of Deloitte & Touche LLP
or other independent public accountants of recognized national standing selected by the
Borrower and reasonably acceptable to the Administrative Agent, stating that such financial
statements fairly present, in all material respects, the consolidated financial condition,
results of operations and cash flows of the Borrower and its Restricted Subsidiaries as of
the dates and for the periods specified on a consolidated basis in accordance with GAAP (it
being understood and agreed that the delivery of the Borrower’s Form 10-K (as filed with the
SEC) shall satisfy such delivery requirement in this clause to the ex-



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tent such Form 10-K
includes the information and opinion specified in this clause), together with a Compliance
Certificate and a certificate of the accounting firm that delivered its opinion with respect
to such financial statements stating whether they obtained knowledge during the course of
their examination of such financial statements of any Event of Default under any of the
Financial Covenants and, if in the opinion of such accounting firm such an Event of Default
has occurred, identifying such Event of Default (which certificate may be limited to the
extent required by accounting rules or guidelines); provided that, for any period,
the Borrower shall not be required to deliver such certificate if the Borrower certifies to
the Administrative Agent that its is unable to do so following the use of commercially
reasonable efforts;




     (c) no later than February 28 of each Fiscal Year of the Borrower, a detailed
consolidated budget by Fiscal Quarter for such Fiscal Year (including a projected
consolidated balance sheet and related statements of projected operations and cash flows as
of the end of and for each Fiscal Quarter during such Fiscal Year) and the next two
succeeding Fiscal Years and, promptly when available, any significant revisions of such
budgets;




     (d) promptly upon receipt thereof, copies of all final material reports submitted to
the Borrower by independent public accountants (except to the extent that would violate any
confidentiality provision not waiveable by the Borrower) in connection with each annual,
interim or special audit of the books of the Borrower or any of its Restricted Subsidiaries
made by such accountants, including any final management letters submitted by such
accountants to management in connection with their annual audit;




     (e) as soon as possible and in any event within five Business Days after becoming aware
of the occurrence of any Default, a statement of a Financial Officer of the Borrower on
behalf of the Borrower setting forth details of such Default and the action (if any) which
the Borrower and it Subsidiaries have taken or propose to take with respect thereto;




     (f) promptly and in any event within five Business Days after obtaining knowledge of
(i) the occurrence of any adverse development with respect to any litigation, action or
proceeding that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or (ii) the commencement of any litigation, action or proceeding
that could reasonably be expected to have a Material Adverse Effect or that purports to
affect the legality, validity or enforceability of this Agreement or any other Loan Document
or the transactions contemplated hereby or thereby, notice thereof and, upon the request of
the Administrative Agent, copies of all material documentation relating thereto;




     (g) promptly after the sending or filing thereof, copies of all reports which the
Borrower sends to any of its security holders (in their capacity as such) or any trustee,
agent or other representative therefor, and all reports, registration statements (other than
on Form S-8 or any successor form) or other materials (including affidavits with respect to
reports) which the Borrower or any of its Subsidiaries files with the SEC or any national
securities exchange;




     (h) promptly upon becoming aware of the taking of any specific actions by the Borrower
or any other Person to terminate any Pension Plan (other than a termination pursuant to
Section 4041(b) of ERISA which can be completed without the Borrower or any Subsidiary
having to provide more than $5.0 million in addition to the normal contribution required for
the plan year in which termination occurs to make such Pension Plan sufficient), or the
occurrence of an ERISA Event which could result in a Lien on the assets of the Borrower or
any Restricted Sub-



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sidiary or in the incurrence by the Borrower or any Restricted
Subsidiary of any liability, fine or penalty which could reasonably be expected to have a Material
Adverse Effect, or any increase in the contingent liability of the Borrower or any
Restricted Subsidiary with respect to any post-retirement Welfare Plan benefit if the
increase in such contingent liability which could reasonably be expected to have a Material
Adverse Effect, notice thereof and copies of all documentation relating thereto;




     (i) upon request by the Administrative Agent, copies of: (i) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by the Borrower or any
Restricted Subsidiary or ERISA Affiliate with the Internal Revenue Service with respect to
each Pension Plan; (ii) the most recent actuarial valuation report for each Pension Plan and
each Foreign Plan for which a report is prepared; (iii) all notices received by the Borrower
or any Restricted Subsidiary or ERISA Affiliate from a Multiemployer Plan sponsor or any
Governmental Authority concerning an ERISA Event; and (iv) such other documents or
governmental reports or filings relating to any Plan or Foreign Plan as the Administrative
Agent shall reasonably request;




     (j) promptly and in any event within five Business Days after obtaining knowledge
thereof, notice of any other development that has resulted in or could reasonably be
expected to have a Material Adverse Effect;




     (k) such other information respecting the condition or operations, financial or
otherwise, of the Borrower or any of its Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request; and




     (l) upon becoming aware of any newly arising environmental matters, facts or conditions
affecting any property or facilities owned or operated by the Borrower or any of its
Restricted Subsidiaries, or which relate to any Environmental Liabilities of the Borrower or
any of its Restricted Subsidiaries, to the extent reflecting any matters which, in any such
case, could reasonably be expected to result in a new Environmental Liability or an increase
in an existing Environmental Liability in excess of $5.0 million, promptly notify the
Administrative Agent of such matters and any Remedial Actions or other corrective actions of
the Borrower or any of its Restricted Subsidiaries in respect thereof.



     Documents required to be delivered pursuant to Sections 5.01(a) and (b) may be delivered
electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on
which the Borrower posts such documents, or provides a link thereto on the website on the Internet
at the Borrower’s website address listed in Section 9.01(a); (ii) on which such documents are
posted on the Borrower’s behalf on IntraLinksTM or a substantially similar electronic platform chosen by the Administrative
Agent to be its electronic transmission system to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by the Administrative
Agent); or (iii) on which such documents are available via the EDGAR system of the SEC on the
internet; provided that the Borrower shall notify (which may be by facsimile or electronic
mail) the Administrative Agent of the posting of any such documents and, if requested by the
Administrative Agent, provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents.



          SECTION 5.02. Compliance with Laws, etc. The Borrower will, and will cause each of its Restricted
Subsidiaries to, comply in all respects with all Requirements of Law, except where such
noncompliance, individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, such compliance to include, subject to the foregoing and except as
permitted by Section 




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6.03, the maintenance and preservation of their and their respective
Restricted Subsidiaries’ existence and their qualification as a foreign corporation, limited
liability company or partnership (or comparable foreign qualification, if applicable, in the case
of any other form of legal entity).




          SECTION 5.03. Maintenance of Properties. The Borrower will, and will cause each of its Restricted
Subsidiaries to, maintain, preserve, protect and keep its material properties and assets in good
repair, working order and condition (ordinary wear and tear and loss from casualty or condemnation
excepted), and make necessary repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times; provided that nothing in this
Section 5.03 shall prevent the Borrower from discontinuing the operation and maintenance of any of
its properties or any portion thereof or any of those of its Restricted Subsidiaries if such
discontinuance is, in the reasonable commercial judgment of the Borrower, desirable in the conduct
of its or their business and could not, in the aggregate, be reasonably expected to have a Material
Adverse Effect.




          SECTION 5.04. Insurance. The Borrower will, and will cause each of its Restricted Subsidiaries to,
maintain or cause to be maintained with financially sound and reputable insurance companies (a)
insurance with respect to their properties material to the business of the Borrower and its
respective Restricted Subsidiaries against such casualties and contingencies and of such types and
in such amounts with such deductibles as is customary in the case of similar businesses of similar
size operating in the same or similar locations (and, in any event, shall maintain (i) physical
hazard insurance on an “all risk” basis, (ii) commercial general liability against claims for
bodily injury, death or property damage, (iii) explosion insurance in respect of any boilers,
machinery or similar apparatus constituting Collateral, (iv) business interruption insurance, (v)
worker’s compensation insurance as may be required by any Requirement of Law, (vi) if at any time
the area in which any improvements located on such Mortgaged Property is designated a “flood hazard
area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), flood insurance with respect to each Mortgaged Property in such amount required
under the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of
1973, and otherwise in compliance with the National Flood Insurance Program as set forth in the
Flood Disaster Protection Act of 1973 and (vii) such other insurance as is customary in the case of
similar businesses of similar size and nature operating in the same or similar locations) and (b)
all insurance required to be maintained pursuant to the Security Documents, and will, upon
reasonable request of the Administrative Agent or the Collateral Agent (excluding any such requests during the continuation of
an Event of Default, not more than once per year), furnish to the Administrative Agent and the
Collateral Agent (x) at reasonable intervals a certificate of an Authorized Officer of the Borrower
setting forth the nature and extent of all insurance maintained by the Borrower and its respective
Restricted Subsidiaries in accordance with this Section and (y) a report of a reputable insurance
broker with respect to the insurance maintained by the Borrower and its respective Restricted
Subsidiaries and such supplemental reports with respect thereto as the Administrative Agent or the
Collateral Agent may from time to time reasonably request. Each such insurance policy shall (i)
provide that it may not be cancelled or otherwise terminated, or have the coverage thereunder
materially reduced or otherwise materially modified without at least thirty days’ prior written
notice to the Collateral Agent (and to the extent any such policy is cancelled, modified or
renewed, the Borrower shall deliver a copy of the renewal or replacement policy (or other evidence
thereof) to the Administrative Agent and the Collateral Agent, or an insurance certificate with
respect thereto, together with evidence reasonably satisfactory to the Administrative Agent and
Collateral Agent of the payment of the premium therefor); (ii) to the extent reasonably requested
by the Collateral Agent, provide that the Collateral Agent and the Administrative Agent are
permitted to pay any premium therefor within thirty days after receipt of any notice stating that
such premium has not been paid when due; and (iii) name the Collateral Agent, on behalf of the
Secured Parties, as a mortgagee (in the case of property insurance) or an additional insured (in
the case of liability insur-




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ance) or a loss payee (in the case of property insurance), as
applicable. Notwithstanding the inclusion in any insurance policy of the provision described in
clause (ii) of the immediately preceding sentence, in the event the Borrower gives the Collateral
Agent written notice that it (or the relevant Restricted Subsidiary) does not intend to pay any
premium relating to any insurance policy when due, the Collateral Agent shall not exercise its
right to pay such premium so long as the Borrower delivers to the Collateral Agent a replacement
insurance policy or insurance certificate evidencing that such replacement policy or certificate
provides the same insurance coverage required under this Section 5.04 as the policy being replaced
by the Borrower (or the relevant Restricted Subsidiary) with no lapse in such coverage.




          SECTION 5.05. Books and Records; Visitation Rights; Lender Meetings. The Borrower will, and will cause
each of its Restricted Subsidiaries to, keep books and records which accurately reflect its
business affairs in all material respects and material transactions and permit the Administrative
Agent or its representatives, at reasonable times and intervals and upon reasonable notice, to
visit all of its offices, to discuss its financial matters with its officers, employees and
independent public accountants and, upon the reasonable request of the Administrative Agent, to
examine (and, at the expense of the Borrower, photocopy extracts from) any of its books or other
organizational records. Upon written request by the Administrative Agent or the Requisite Lenders,
the Borrower shall give a presentation in each Fiscal Year to the Lenders (within 30 days after the
Borrower has delivered, or should have delivered, its financial statements pursuant to Section
5.01(b)) about the business, financial performance and prospects of the Borrower and its
Subsidiaries, and such other matters as any Lender may (through the Administrative Agent)
reasonably request.




          SECTION 5.06. Environmental Covenant. The Borrower will, and will cause each of its Restricted
Subsidiaries to:





     (a) use and operate all of its facilities and properties in compliance with all
applicable Environmental Laws except for such noncompliance which could not reasonably be
expected to have a Material Adverse Effect and handle all Hazardous Materials in compliance
with all applicable Environmental Laws, except for any noncompliance that could not reasonably be
expected to have a Material Adverse Effect;




     (b) promptly notify the Administrative Agent and provide copies of all written
inquiries, claims, complaints or notices from any Person relating to the environmental
condition of its facilities and properties or compliance with or liability under any
Environmental Law which could reasonably be expected to have a Material Adverse Effect;




     (c) in the event of the presence of any Hazardous Material on any Mortgaged Property
which is in violation of any Environmental Law or which could reasonably be expected to
result in Environmental Liability which violation or Environmental Liability could
reasonably be expected to have a Material Adverse Effect, upon discovery thereof, take
reasonable necessary steps to initiate and expeditiously complete all response, corrective
or other action to mitigate any such Material Adverse Effect in accordance with and to the
extent required by applicable Environmental Laws, and promptly notify the Administrative
Agent and keep the Administrative Agent reasonably informed of its actions;




     (d) at the written request of the Administrative Agent or the Requisite Lenders, which
request shall specify in reasonable detail the basis therefor, provide, at the Borrower’s
sole cost and expense, an environmental site assessment report concerning any Mortgaged
Property now or hereafter owned or leased by such Loan Party or any of its respective
Restricted Subsidi-



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aries, prepared by an environmental consulting firm reasonably acceptable
to the Administrative Agent, reasonable in scope and substance based upon the circumstances
of such request; provided that such request may be made only if (i) there has
occurred and is continuing an Event of Default or (ii) the Administrative Agent or the
Requisite Lenders reasonably believe that any Loan Party or any such Mortgaged Property is
not in compliance with Environmental Law and such noncompliance could reasonably be expected
to have a Material Adverse Effect, or that circumstances exist that could reasonably be
expected to form the basis of an Environmental Claim against such Loan Party or to result in
Environmental Liability, in each case that could reasonably be expected to have a Material
Adverse Effect (in such events as are listed in this subparagraph, the environmental site
assessment shall be focused upon the noncompliance or other circumstances as applicable);
and




     (e) provide such information which the Administrative Agent may reasonably request from
time to time to evidence compliance with this Section 5.06.


If the Borrower or any Restricted Subsidiary fails to undertake the actions described in Sections
5.06(c) and 5.06(d) reasonably promptly, and in any event within 180 days after such request was
made, the Administrative Agent may undertake such actions, and the Borrower will grant and hereby
grants, and will cause each such Restricted Subsidiary to grant, the Administrative Agent and the
Requisite Lenders and their respective agents access to such Mortgaged Property and the Borrower
specifically grants, and will cause each such other Restricted Subsidiary to grant, the
Administrative Agent and the Requisite Lenders a non-exclusive license, subject to the rights of
tenants, acting reasonably and cost-effectively, to perform such actions, all at the Borrower’s
sole cost and expense.




          SECTION 5.07. Information Regarding Collateral. (a) The Borrower will not, and will cause each of
the other Loan Parties not to, effect any change (i) in such Loan Party’s legal name, (ii) in the
location of any Loan Party’s chief executive
office, its principal place of business or any office in which it maintains material books or
records relating to Collateral owned by it (including the establishment of any such new office),
(iii) in any Loan Party’s identity or organizational structure, (iv) in any Loan Party’s Federal
Taxpayer Identification Number or organizational identification number or (v) in any Loan Party’s
jurisdiction of organization (in each case, including by merging with or into any other entity,
reorganizing, dissolving, liquidating, reorganizing or organizing in any other jurisdiction) unless
(A) it shall have given the Administrative Agent and the Collateral Agent at least ten days’ prior
written notice (or such lesser notice period as may be agreed to by the Administrative Agent in its
sole discretion) of its intention so to do, clearly describing such change and providing such other
information in connection therewith as the Collateral Agent or the Administrative Agent may
reasonably request and (B) it shall have taken all action reasonably necessary to maintain the
perfection and priority of the security interest of the Collateral Agent for the benefit of the
Secured Parties in the Collateral following such change, if applicable.




          (b) Each year, at the time of delivery of annual financial statements with respect to the
preceding Fiscal Year pursuant to Section 5.01(b), the Borrower shall deliver to the Administrative
Agent a certificate of a Financial Officer of the Borrower setting forth the information required
pursuant to Sections 1(a) and 8(a) of each Perfection Certificate or confirming that there has been
no change in such information since the date of such Perfection Certificate delivered on the
Effective Date or the date of the most recent certificate delivered pursuant to this Section.




          SECTION 5.08. Existence; Conduct of Business. The Borrower will, and will cause each of its
Restricted Subsidiaries to, do or cause to be done all things reasonably necessary to preserve,




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renew and keep in full force and effect its legal existence and the rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names except to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse Effect;
provided that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03, or any Asset Sale permitted under Section 6.05 or 6.06.




          SECTION 5.09. Performance of Obligations. The Borrower will, and will cause each of its Restricted
Subsidiaries to, perform all of its obligations under the terms of each mortgage, indenture,
security agreement, other debt instrument (including under all Material Indebtedness) and material
contract by which it is bound or to which it is a party except for such noncompliance as in the
aggregate could not reasonably be expected to have a Material Adverse Effect.




          SECTION 5.10. Casualty and Condemnation. The Borrower will, and will cause each of its Restricted
Subsidiaries to, (a) furnish to the Administrative Agent prompt written notice of any casualty or
other insured damage to any Collateral in an amount in excess of $7.5 million or the commencement
of any action or proceeding for the Taking of any Collateral or any part thereof or interest
therein under power of eminent domain or by condemnation or similar proceeding and (b) ensure that
the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are applied in accordance with the applicable provisions of this Agreement and the
Security Documents.




          SECTION 5.11. Pledge of Additional Collateral. Subject to the terms of the Intercreditor Agreement and any applicable exceptions set forth
in the Security Documents, within 60 days (or such longer periods as set forth in the applicable
Security Documents or may be agreed to by the Administrative Agent from time to time in its
reasonable discretion) after the acquisition of assets of the type that would have on the Effective
Date constituted Collateral under the Security Documents (but in any event excluding Equity
Interests of Excluded Joint Ventures acquired by any Loan Party) (the “Additional
Collateral”), the Borrower will, and will cause the Subsidiary Guarantors to, take all action
that may be required under any applicable law, or that the Collateral Agent (or the Collateral
Agent acting at the direction of the Requisite Lenders) may reasonably request (including the
authorization of appropriate financing statements and other filings under the provisions of the UCC
and other applicable domestic, local or foreign laws, rules or regulations, in each of the offices
where such filing is necessary or appropriate, or amending or, with respect to creation or
acquisition of a new Restricted Subsidiary (other than any Excluded Subsidiary) after the Effective
Date, entering into or amending (to add such acquired assets or such new Restricted Subsidiary as a
party to extent required hereunder), the Guarantee Agreement, the Non-U.S. Guarantee Agreements and
the Security Documents, or in the case of the Equity Interests of a Non-U.S. Restricted Subsidiary
that is a Subsidiary Guarantor or “first tier” Non-U.S. Restricted Subsidiary (other than any
Excluded Subsidiary described in clauses (a), (b), (e), (f) and (g) of the definition thereof),
entering into a Non-U.S. Pledge Agreement (upon the request of the Administrative Agent) providing
for the Collateral Agent to have, for the benefit of the Secured Parties, an enforceable and
perfected security interest in 65% (or such greater percentage as could not, in the good faith
judgment of the Borrower, reasonably be expected to have material adverse tax consequences to the
Borrower or its Restricted Subsidiaries) of the Equity Interests in such Subsidiary), to grant to
the Collateral Agent, for the benefit of the Secured Parties, perfected Liens (subject to no Liens
other than Permitted Liens) in such Additional Collateral pursuant to, and with the priority
required by, the Security Documents and this Agreement (including, to the extent reasonably
requested by the Administrative Agent, delivery of an opinion in form reasonably acceptable to the
Administrative Agent) and otherwise reasonably acceptable in form and substance to the Collateral
Agent and satisfaction of the conditions set forth in Sections 4.01(t) and 4.01(u)). Subject to
the terms of the Intercreditor Agreement, in the event that any Loan Party




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acquires a fee interest
in additional Real Property after the Effective Date and the fair market value of such acquired
Real Property is in excess of $5.0 million as determined in good faith by the Borrower, the
Borrower will, and will cause the Subsidiary Guarantors to, take such actions and execute such
documents as the Collateral Agent shall require to create a new Mortgage (including satisfaction of
the conditions set forth in Sections 4.01(f), 4.01(t) and 4.01(u)) (unless, with respect to any
such Real Property, the Administrative Agent determines, in its reasonable discretion, that the
fees and expenses of obtaining a Mortgage with respect to such Real Property and the other related
deliveries required by this Section 5.11 would be disproportionate to the expected benefits to the
Secured Parties of the security to be afforded thereby).




          SECTION 5.12. Further Assurances. Subject to the terms of the Intercreditor Agreement, the Borrower
will, and will cause each of its Restricted Subsidiaries to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further actions (including the
authorization of filing and recording of financing statements, fixture filings, mortgages, deeds of
trust and other documents and, to the extent reasonably requested by the Administrative Agent, the
delivery of appropriate opinions of counsel), which may be required under any applicable law, or
which the Administrative Agent, the Collateral Agent or the Requisite Lenders may reasonably
request, to effectuate the transactions contemplated by the Loan Documents or to grant, preserve,
protect or perfect the Liens created by the Security Documents or the validity or priority of any
such Lien, all at the reasonable expense of the Loan Parties. Upon the exercise by the
Administrative Agent, the Collateral Agent or any Lender of any power, right, privilege or
remedy pursuant to any Loan Document that requires any consent, approval, registration,
qualification or authorization of any Governmental Authority, the Borrower will, and will cause
each of its Restricted Subsidiaries to, execute and deliver all applications, certifications,
instruments and other documents and papers that the Administrative Agent, the Collateral Agent or
such Lender may reasonably require in connection therewith. If the Administrative Agent, the
Collateral Agent or the Requisite Lenders reasonably determine that they are required by a
Requirement of Law to have additional appraisals prepared in respect of the Real Property of any
Loan Party constituting Collateral, the Borrower shall provide to the Administrative Agent and the
Collateral Agent appraisals that satisfy the applicable requirements of the Real Estate Appraisal
Reform Amendments of FIRREA (or other applicable Requirements of Law) and are otherwise in form
reasonably satisfactory to the Administrative Agent and the Collateral Agent.




          SECTION 5.13. Use of Proceeds. The Borrower covenants and agrees that the proceeds of the
Borrowings on the Effective Date will be used to finance the Transactions and for working capital
and other general corporate purposes.




          SECTION 5.14. Payment of Taxes and Claims. The Borrower will, and will cause each of its Restricted
Subsidiaries to, (a) pay and discharge all material Taxes imposed upon it or upon its income or
profits, or upon any Properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims for labor, services, materials and supplies or otherwise that, if
unpaid, might become a Lien (other than a Permitted Lien) or charge upon any Properties of the
Borrower or any of its Restricted Subsidiaries or cause a failure or forfeiture of title thereto;
provided that neither the Borrower nor any of its Restricted Subsidiaries shall be required
to pay any such Tax or claim that is being contested in good faith and by proper proceedings
diligently conducted, which proceedings have the effect of preventing the forfeiture or sale of the
Property or asset that may become subject to such Lien (other than a Permitted Lien), if it has
maintained adequate reserves with respect thereto in accordance with and to the extent required
under GAAP and such failure to pay could not reasonably be expected to have a Material Adverse
Effect; and (b) timely and correctly file all material Tax Returns required to be filed by it, and
withhold, collect and remit all Taxes that it is required to collect, withhold or remit.





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          SECTION 5.15. Additional Guarantors. Subject to the terms of the Intercreditor Agreement, in the event that any Subsidiary (other
than any Excluded Subsidiary) of the Borrower existing on the Effective Date has not previously
executed the Guarantee Agreement or in the event that any Person becomes a Subsidiary (other than
any Excluded Subsidiary) of the Borrower after the Effective Date, the Borrower will promptly
notify the Administrative Agent of that fact and cause such Subsidiary to, (i) within 30 days of
becoming a Subsidiary (or ceasing to be an Excluded Subsidiary, as applicable), execute and deliver
to the Administrative Agent a counterpart of the Guarantee Agreement (or a Non-U.S. Guarantee
Agreement, as applicable) and deliver to the Collateral Agent counterparts of Security Documents
and to take all such further actions and execute all such further documents and instruments
(including actions, documents and certificates comparable to those described in Sections 4.01(t)
and 4.01(u)) as may be necessary or, in the reasonable opinion of the Administrative Agent,
advisable to create in favor of the Collateral Agent, for the benefit of the Secured Parties, valid
and perfected Liens on all of the Property of such Subsidiary described in the applicable forms of
the Security Documents, subject to no Liens other than Permitted Liens, and (ii) in the case of a
Non-U.S. Restricted Subsidiary which is a Subsidiary Guarantor, provide the Administrative Agent
with evidence of the acceptance by a process agent as shall be reasonably approved by the
Administrative Agent of its appointment as process agent by such Subsidiary.




          SECTION 5.16. Interest Rate Protection. No later than the 30th day after the Effective Date, the Borrower shall enter into (or
otherwise be a party to), and for a minimum of two years thereafter maintain, Hedging Agreements
with terms and conditions reasonably acceptable to the Administrative Agent to the extent necessary
to cause at least 50% of the aggregate principal amount of the Borrower’s and its Restricted
Subsidiaries’ term Indebtedness being effectively (or actually) subject to a fixed or maximum
interest rate reasonably acceptable to the Administrative Agent.




          SECTION 5.17. Post-Closing Covenants. (a) The Borrower will, and will cause its Restricted Subsidiaries to, execute and deliver
the documents and complete the tasks set forth on Schedule 5.17(a), in each case within the
respective time periods specified on such schedule (or within such longer periods as may be agreed
to by the Administrative Agent in its sole discretion).




          (b) The Borrower will, and will cause its Restricted Subsidiaries to, execute and deliver the
documents and complete the tasks set forth on Schedule 5.17(b), in each case within the
respective time periods specified on such schedule (or within such longer periods as may be agreed
to by the Administrative Agent in its sole discretion).




          SECTION 5.18. Designation of Subsidiaries. The Borrower may designate any Restricted Subsidiary as an Unrestricted Subsidiary or any
Unrestricted Subsidiary as a Restricted Subsidiary upon prior written notice to the Administrative
Agent; provided that (i) immediately before and after such designation, no Default shall
have occurred and be continuing, (ii) immediately after giving effect to such designation, the
Borrower shall be in compliance, on a Pro Forma Basis, with the covenants set forth in Section 6.12
and 6.13 as at the date of the last ended Test Period (it being understood that as a condition
precedent to the effectiveness of any such designation, the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer of
the Borrower setting forth in reasonable detail the calculations demonstrating such
compliance), (iii) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a
“Restricted Subsidiary” (or any other defined term having a similar purpose) for the purpose of the
Revolving Credit Loan Documents, the Bridge Loan Documents, the Exchange Note Documents or any
Subordinated Debt Documents (unless concurrently designated as an Unrestricted Subsidiary under
such documents as well), (iv) no Restricted Subsidiary may be designated an Unrestricted Subsidiary
if it was previously designated an Unrestricted Subsidiary, (v) no Restricted Subsidiary may be
designated an




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Unrestricted Subsidiary if it owns any Equity Interests of, or holds any Indebtedness
of, any other Restricted Subsidiary, (vi) if a Restricted Subsidiary is being designated as an
Unrestricted Subsidiary hereunder, the sum of (A) the net tangible assets of such Subsidiary as of
such date of designation (the “Designation Date”), as set forth on such Subsidiary’s most
recent balance sheet, plus (B) the aggregate amount of net tangible assets of all
Unrestricted Subsidiaries designated as Unrestricted Subsidiaries pursuant to this Section 5.18
prior to the Designation Date (in each case measured as of the date of each such Unrestricted
Subsidiary’s designation as an Unrestricted Subsidiary) shall not exceed (i) 5.0% of Consolidated
Net Tangible Assets at such date or (ii) 5.0% of Consolidated EBITDA for the period of four Fiscal
Quarters most recently ended for which financial statements have been or are required to have been
delivered pursuant to Sections 4.01(h), 5.01(a) or 5.01(b), as applicable, as of such Designation
Date, in each case, pro forma for such designation, and (vii) the Borrower shall
have delivered to the Administrative Agent a certificate of a Financial Officer of the Borrower on
behalf of the Borrower certifying compliance with the provisions of this Section 5.18 setting forth
in reasonable detail the computations necessary to determine such compliance. The designation of
any Subsidiary as an Unrestricted Subsidiary after the Effective Date shall constitute an
Investment by the Borrower and its Restricted Subsidiaries, as applicable, therein at the
Designation Date in an amount equal to the net book value of the applicable parties’ investment
therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall
constitute (i) the incurrence at the time of designation of all Investments, Indebtedness and Liens
of such Subsidiary existing at such time and (ii) a return on any Investment by the Borrower or any
Restricted Subsidiary in Unrestricted Subsidiaries pursuant to the preceding sentence in an amount
equal to the fair market value at the date of such designation of the Borrower’s and its Restricted
Subsidiaries’ (as applicable) Investment in such Subsidiary. On or promptly after the date of its
formation, acquisition, designation or re-designation, as applicable, each Unrestricted Subsidiary
(other than an Unrestricted Subsidiary that is a Non-U.S. Subsidiary) shall have entered into a tax
sharing agreement containing terms that, in the reasonable judgment of the Administrative Agent,
provide for an appropriate allocation of tax liabilities and benefits.




          SECTION 5.19. Permitted Restructuring. No later than the 90th day after the Effective Date, the Borrower will, and will cause its
Restricted Subsidiaries to, (a) consummate the Permitted Restructuring, (b) deliver to the
Administrative Agent a written opinion of (i) Kirkland & Ellis LLP, special counsel to the Loan
Parties, addressed to each Agent and the Lenders and in a form substantially similar to (as
applicable) the opinion delivered by Kirkland & Ellis LLP hereunder on the Effective Date, and (ii)
Allen & Overy LLP, special counsel to the Loan Parties, addressed to each Agent and the Lenders and
in a form substantially similar to (as applicable) the opinions delivered by Allen & Overy LLP
hereunder on the Effective Date, and (c) execute and deliver to the Administrative Agent or the
Collateral Agent, as applicable, all other documents, agreements and certificates described on
Schedule 5.19 and satisfy all other conditions described on Schedule 5.19, in each
case as denoted on such Schedule 5.19 as being required to be completed within 90 days
after the Effective Date.




          SECTION 5.20. Certain Properties. If any or all of the Properties listed on Schedule 5.20 attached hereto are not
subject to a sale contract, binding letter of intent (or similar agreement) or have not been sold
(including any Sale and Leaseback Transaction permitted hereunder) by the Borrower or a Subsidiary
Guarantor to a bona fide third party purchaser by December 31, 2008, upon the request of the
Administrative Agent, the Borrower will, and will cause each applicable Subsidiary Guarantor to,
take such actions and execute such documents as the Collateral Agent shall require, including
satisfaction of the conditions set forth in Section 4.01(f), 4.01(t) and 4.01(u), to create a new
Mortgage for any or all of such Properties with a fair market value in excess of $5.0 million as
determined in good faith by the Borrower (unless, with respect to such Property or Properties, the
Administrative Agent determines, in its reasonable discretion and taking into consideration the
Borrower’s representation that it still is using good




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faith efforts to sell such Property, that the
fees and expenses of obtaining a Mortgage with respect to such Real Property and the other related
deliveries required herein would be disproportionate to the expected benefits to the Secured
Parties of the security to be afforded thereby).




ARTICLE VI




NEGATIVE COVENANTS




          The Borrower hereby covenants and agrees that on and after the Effective Date and until the
principal of and interest on each Loan and all fees and other amounts due and payable hereunder or
under any other Loan Document have been paid in full (other than unasserted contingent
indemnification obligations not due and payable):




          SECTION 6.01. Indebtedness. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, create, issue, incur, assume or permit to exist (including by way of Guarantee) any
Indebtedness, except:





               (i) Indebtedness incurred and outstanding under this Agreement and the other Loan
Documents;




               (ii) Indebtedness (A) (1) outstanding on the Effective Date and set forth on
Schedule 6.01(ii)(A) and (2) any Permitted Refinancing thereof and (B)
outstanding on the Effective Date and set forth on Schedule 6.01(ii)(B);




               (iii) Indebtedness of the Loan Parties under the Bridge Loan Documents and under
the Exchange Note Documents in an aggregate principal amount not to exceed $400 million
plus the PIK Interest Amount and any Permitted Refinancing thereof; provided
that no Restricted Subsidiary shall Guarantee any such Indebtedness unless such
Restricted Subsidiary is a Subsidiary Guarantor under this Agreement and the other Loan
Documents;




               (iv) Indebtedness permitted by Section 6.04(iii);




               (v) Guarantees in respect of Indebtedness of the Borrower or any Restricted
Subsidiary otherwise permitted hereunder to the extent permitted as an Investment under
Section 6.04 (other than Section 6.04(iv)); provided that (A) if such Guaranteed
Indebtedness is subordinated to the Obligations under the Loan Documents, such Guarantee
is as subordinated to the Obligations and (B) no Restricted Subsidiary shall Guarantee
any Subordinated Debt unless such Restricted Subsidiary is a Subsidiary Guarantor;




               (vi) Indebtedness of the Borrower or any Restricted Subsidiary incurred to finance
the acquisition, installation, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations and purchase money Indebtedness, any
Indebtedness assumed or incurred in connection with the acquisition of any such assets
or secured by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier maturity date or decreased
Weighted Average Life to Maturity thereof; provided that (A) such Indebtedness
is incurred or assumed prior to or within 270 days after such acquisition or the
completion of such construction, installation or improvement, (B) the aggregate amount
of such Indebtedness does not exceed 100% of the cost of such acquisition,



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installation,
construction or improvement, as the case may be, and (C) the aggregate principal amount
of all Indebtedness permitted by this Section 6.01(vi) shall not exceed $50.0 million at
any one time outstanding;




               (vii) Indebtedness under Hedging Obligations entered into in the ordinary course of
business of the Borrower and its Restricted Subsidiaries and not for speculative
purposes;




               (viii) Indebtedness of the Borrower and its Restricted Subsidiaries in respect of
performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion
guarantees and similar obligations and trade-related letters of credit, in each case
issued for the account of the Borrower and its Restricted Subsidiaries in the ordinary
course of business of the Borrower and its Restricted Subsidiaries, including those
incurred to secure health, safety and environmental obligations in the ordinary course
of business of the Borrower and its Restricted Subsidiaries (and in each case other than
for an obligation for borrowed money);




               (ix) Indebtedness arising from agreements of the Borrower or any Restricted
Subsidiary providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the disposition
otherwise permitted under this Agreement of any business, assets or a Subsidiary, other
than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of
such business, assets or a Subsidiary for the purpose of financing such acquisition;




               (x) Indebtedness of the Borrower and its Restricted Subsidiaries in respect of
Treasury Services Agreements (including Indebtedness arising from the honoring by a bank
or other financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds) in the
ordinary course of business of the Borrower and its Restricted Subsidiaries so long as,
in the case of any cash pooling or similar arrangements, any intercompany Investments
relating thereto are otherwise permitted under Section 6.04(iii);




               (xi) Indebtedness of such a Person existing at the time such Person becomes a
Subsidiary in connection with a Permitted Acquisition, but only if such Indebtedness was
not created or incurred in contemplation of such Person becoming a Subsidiary;
provided that the aggregate principal amount of all such Indebtedness does not
exceed an aggregate of $75.0 million at any one time outstanding;




               (xii) Indebtedness of any Non-U.S. Restricted Subsidiary that is a Non-Guarantor
Restricted Subsidiary consisting of working capital facilities, lines of credit or cash
management arrangements for such Subsidiary, and Guarantees by any Non-U.S. Restricted
Subsidiary that is a Non-Guarantor Restricted Subsidiary in respect of such Indebtedness;
provided that (A) no Default shall have occurred and be continuing or would
immediately result therefrom and (B) the aggregate principal amount of all such
Indebtedness shall not exceed an aggregate of $50.0 million at any one time outstanding;




               (xiii) solely to the extent otherwise constituting Indebtedness, Permitted
Guarantor Factoring Transactions and Permitted Non-Guarantor Factoring Transactions;



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               (xiv) unsecured Indebtedness of the Borrower and the Subsidiary Guarantors in an
aggregate principal amount not to exceed $300.0 million at any one time outstanding;
provided that (A) such Indebtedness will not mature prior to the date that is
one year following the Maturity Date, (B) such Indebtedness has no scheduled
amortization of principal (or sinking fund payments or other similar payments) prior to
the date that is one year following the Maturity Date, (C) after giving effect to the
incurrence of such Indebtedness on a Pro Forma Basis, the Net Interest Expense Coverage
Ratio shall be not less than 2.0:1.0 as of the most recent Test Period (assuming that
such incurrence of Indebtedness, and each other incurrence of Indebtedness under this
Section 6.01 consummated since the first day of such Test Period had occurred on the
first day of such Test Period) and the Borrower shall have delivered to the
Administrative Agent a certificate of a Financial Officer of the Borrower to such effect
setting forth in reasonable detail the computations necessary to determine such
compliance (together with a reasonably detailed description of the material terms and
conditions of such Indebtedness or drafts of the documentation relating thereto), (D) no
Default shall have occurred and be continuing or would immediately result therefrom, (E)
immediately after giving effect thereto, the Borrower and its Restricted Subsidiaries
are in compliance, on a Pro Forma Basis after giving effect to the incurrence of such
Indebtedness (and any other Indebtedness incurred since the last day of the immediately
preceding Test Period), with the covenants set forth in Section 6.12 and 6.13 recomputed
as at the date of the last ended Test Period, as if all such Indebtedness was incurred
on the first day of the immediately preceding Test Period, and (F) except in the case of
Guarantees by Excluded Non-U.S. Restricted Subsidiaries of such Indebtedness of Non-U.S.
Restricted Subsidiaries, no Restricted Subsidiary shall Guarantee any such Indebtedness
unless such Restricted Subsidiary is also a Subsidiary Guarantor under this Agreement
and the other Loan Documents;




               (xv) Indebtedness under the Revolving Credit Loan Documents in an aggregate
principal amount at any one time outstanding not to exceed the Maximum Revolving Credit
Facility Amount; provided that except in the case of Guarantees by Excluded
Non-U.S. Restricted Subsidiaries of Indebtedness of Non-U.S. Restricted Subsidiaries
under the Revolving Credit Loan Documents, no Restricted Subsidiary shall Guarantee any
such Indebtedness under the Revolving Credit Loan Documents unless such Restricted
Subsidiary is a Subsidiary Guarantor under this Agreement and the other Loan Documents;




               (xvi) Indebtedness consisting of obligations of the Borrower or its Restricted
Subsidiaries under deferred compensation or other similar arrangements incurred by such
Person in connection with Permitted Acquisitions or any other Investment expressly
permitted hereunder;




               (xvii) Indebtedness of any Non-Guarantor Restricted Subsidiary owing to any other
Non-Guarantor Restricted Subsidiary;




               (xviii) Indebtedness consisting of the financing of insurance premiums;




               (xix) unsecured Indebtedness of Borrower and its Restricted Subsidiaries
representing the obligation of such Person to make payments with respect to the
cancellation or repurchase of Equity Interests and Equity Rights of officers, employees
or directors (or their estates) of the Borrower or its Subsidiaries permitted by Section
6.07;



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               (xx) Indebtedness consisting of take-or-pay obligations arising under supply
agreements entered into in the ordinary course of business and not in connection with
the borrowing of money;




               (xxi) intercompany notes described on Schedule 6.01(xxi); provided
that (A) the obligations evidenced by such intercompany notes relate to the Permitted
Restructuring (with respect to which no cash was loaned or advanced), (B) such
intercompany notes are pledged pursuant to the Pledge Agreement in accordance with
Section 5.11 and (C) the obligations of any Loan Party evidenced by such intercompany
notes shall be subordinated to the Obligations on terms reasonably satisfactory to the
Administrative Agent;




               (xxii) Indebtedness of the Borrower and its Restricted Subsidiaries arising under
Capital Leases entered into in connection with Sale and Leaseback Transactions permitted
by Section 6.06; and




               (xxiii) other Indebtedness of the Borrower and its Restricted Subsidiaries in an
aggregate principal amount not to exceed $75.0 million at any one time outstanding.



          SECTION 6.02. Liens. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, create, incur, assume or permit to exist any Lien on any Property or asset now owned
or hereafter acquired by them, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except the following (herein collectively referred
to as “Permitted Liens”):





               (i) Liens in favor of the Collateral Agent or the Administrative Agent under the
Security Documents;




               (ii) Liens securing Indebtedness permitted by Section 6.01(xi); provided
that such Liens (A) were not incurred in connection with, or in contemplation of, such
acquisition or merger and (B) do not extend to Property not subject to such Liens at the
time of such acquisition or merger (other than improvements thereon, accessions thereto
and proceeds thereof) and are no more favorable to the lienholders than such existing
Lien;




               (iii) Liens to secure the performance of statutory obligations, surety or appeal
bonds or performance bonds, self-insurance obligations and financing of insurance
premiums, and landlords’, carriers’, warehousemen’s, mechanics’, suppliers’,
materialmen’s, attorney’s or other like liens (other than any Lien imposed by ERISA),
and customary Liens in favor of customs and revenue authorities to secure payment of
customs duties in connection with the importation of goods, in any case incurred in the
ordinary course of business of the Borrower and its Restricted Subsidiaries and with
respect to amounts not delinquent for more than 30 days or being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted;
provided that (A) in the case of contested amounts, a reserve or other
appropriate provision, if any, as is required by GAAP shall have been made therefor, (B)
such
Liens could not reasonably be expected to have a Material Adverse Effect, and (C)
such Liens relating to surety or appeal bonds or performance bonds shall only extend to
or cover cash and Cash Equivalents;




               (iv) (A) Liens existing on the Effective Date and identified on Schedule
6.02(iv)(A) to the extent not prohibited by the applicable Security Documents, and
any



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Lien granted as a replacement or substitute therefor; provided that any such
replacement or substitute Lien (1) except as permitted by Section 6.01(ii)(A)(2), does
not secure an aggregate amount of Indebtedness, if any, greater than that secured on the
Effective Date and (2) does not encumber any Property other than the Property subject
thereto on the Effective Date (other than improvements thereon, accessions thereto and
proceeds) and (B) Liens existing on the Effective Date and identified on Schedule
6.02(iv)(B) to the extent not prohibited by the applicable Security Documents;




               (v) Liens for Taxes or governmental charges or claims or other like statutory Liens
(other than any Lien imposed by ERISA), in any case incurred in the ordinary course of
business of the Borrower and its Restricted Subsidiaries, that do not secure
Indebtedness for borrowed money and (A) that are not delinquent more than 30 days or
thereafter payable without premium or penalty or (B) are being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted;
provided that, if being contested, any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made therefor;




               (vi) Liens to secure Indebtedness (including Capital Lease Obligations and purchase
money Indebtedness) permitted by Section 6.01(vi) encumbering only the Property
acquired, installed, constructed or improved (and the procedural products thereof and
accessions thereto) with the proceeds of such Indebtedness;




               (vii) (A) Liens in the form of zoning restrictions, easements, building,
environmental and other land use rules, laws and regulations which are applicable to the
Real Property, licenses, entitlements, servitudes, rights-of-way, restrictions,
reservations, covenants, conditions, utility agreements, minor imperfections of title,
minor survey defects or other similar restrictions on the use of Real Property that do
not (1) secure Indebtedness (other than Indebtedness permitted under Section 6.01) or
(2) individually or in the aggregate materially impair the value of the Real Property
affected thereby or materially interfere with the Borrower or any Restricted Subsidiary
from conducting its business as currently conducted at such Real Property or to utilize
each Real Property for its intended purpose and (B) with respect to leasehold interests
in Real Property, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a landlord or
owner (other than the Borrower or any Subsidiary) of such leased property encumbering
such landlord’s or owner’s interest in such leased property;




               (viii) Liens (including in the form of pledges or deposits) securing (A)
obligations incurred in respect of workers’ compensation, unemployment insurance or
other forms of governmental insurance or benefits and other obligations of a like
nature, (B) bids, tenders, contracts (other than contracts for borrowed money) or leases
to which the Borrower or any Restricted Subsidiary is a party and (C) obligations to any
utility company or other Person in a similar line of business to that of a utility
company or Governmental Authority that is a utility company, in each case, made in the
ordinary course of business of the Borrower and its Restricted Subsidiaries for amounts
(x) not yet due and payable or (y) being contested in
good faith by appropriate proceedings promptly instituted and diligently conducted;
provided that (1) in the case of contested amounts, a reserve or other
appropriate provision, if any, as is required by GAAP shall have been made therefor, and
(2) such Liens shall in no event encumber any Collateral other than cash and Cash
Equivalents;



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               (ix) Liens securing any judgments, awards, decrees or orders in circumstances not
constituting an Event of Default under Section 7.01(f);




               (x) Liens in the form of licenses, leases or subleases in respect of Real Property
granted or created by the Borrower or any Restricted Subsidiary, which licenses, leases
or subleases do not interfere, individually or in the aggregate, in any material respect
with the business of the Borrower or such Subsidiary or individually or in the aggregate
materially impair the use (for its intended purpose) or the value of the property
subject thereto, provided that, to the extent entered into after the Effective
Date relating to Mortgaged Property, such licenses, leases or subleases shall be
subordinate to the Lien granted and evidenced by the Security Documents in accordance
with the provisions thereof; and provided, further, that any such Lien
shall not extend to or cover any assets of the Borrower or any Restricted Subsidiary
that is not the subject of any such license, lease or sublease;




               (xi) Liens securing the refinancing of any Indebtedness secured by any Lien
permitted by Section 6.02(ii) or this Section 6.02(xi), in each case, without any change
in the Property subject to such Liens and to the extent such refinanced Indebtedness is
permitted by Section 6.01;




               (xii) Liens on assets of any Non-U.S. Restricted Subsidiary that is a Non-Guarantor
Restricted Subsidiary securing Indebtedness of such Non-Guarantor Restricted Subsidiary
permitted by Section 6.01(xii);




               (xiii) Liens on receivables subject to Permitted Non-Guarantor Factoring
Transactions securing Indebtedness in respect of such Permitted Non-Guarantor Factoring
Transactions permitted by Section 6.01(xiii);




               (xiv) Liens arising from the filing of UCC financing statements (or similar
filings) solely as a precautionary measure in connection with operating leases or
consignment of goods;




               (xv) (A) bankers’ Liens, rights of setoff and other similar Liens incurred in the
ordinary course of business and existing solely with respect to cash and Cash
Equivalents on deposit in one or more accounts maintained by the Borrower and its
Restricted Subsidiaries; provided that, unless such Liens are non-consensual and
arise by operation of law, in no case shall any such Liens secure (either directly or
indirectly) the repayment of Indebtedness (other than Indebtedness under the Loan
Documents and the Revolving Credit Loan Documents); and (B) customary Liens attaching to
commodity trading accounts, commodities brokerage accounts, securities accounts and
securities intermediary accounts in the ordinary course of business;




               (xvi) Liens incurred in the ordinary course of business of the Borrower and its
Restricted Subsidiaries with respect to obligations that do not in the aggregate exceed
$35.0 million at any one time outstanding;




               (xvii) to the extent constituting a Lien, the existence of the “equal and ratable”
clause in the Exchange Note Documents (and any Permitted Refinancings thereof) (but not
any security interests granted pursuant thereto);



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               (xviii) Liens securing the “Obligations” (as defined in the Revolving Credit
Agreement) under the Revolving Credit Loan Documents;




               (xix) Liens on the Headquarters Building pursuant to the financing agreement among
Borrower and AIG Annuity Insurance Company, American General Life Insurance Company,
Credit Suisse Securities (USA) LLC and Latigo Master Fund, Ltd. (and Permitted
Refinancings thereof permitted under Section 6.01);




               (xx) Liens on goods or inventory the purchase, shipment or storage price of which
is financed by a documentary letter of credit or banker’s acceptance issued or created
for the account of the Borrower or any Restricted Subsidiary; provided that such Lien
secures only the obligations of the Borrower or such Restricted Subsidiary in respect of
such letter of credit or banker’s acceptance to the extent permitted under Section 6.01;




               (xxi) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale of goods (including under Article 2 of the UCC) and Liens
that are contractual rights of set-off relating to purchase orders and other similar
agreements entered into by the Borrower or any of its Restricted Subsidiaries;




               (xxii) Liens on insurance policies and the proceeds thereof securing the financing
of the premiums with respect thereto incurred in the ordinary course of business;




               (xxiii) ground leases in respect of real property on which facilities owned or
leased by the Borrower or any of its Restricted Subsidiaries are located;




               (xxiv) Liens on property subject to Capital Leases entered into in connection with
Sale and Leaseback Transactions permitted by Section 6.01(xxii);




               (xxv) Liens consisting of an agreement to sell or otherwise dispose of any property
in an Asset Sale permitted under Section 6.05, in each case solely to the extent such
Asset Sale would have been permitted on the date of the creation of such Lien;




               (xxvi) Liens or other matters disclosed in the approved Title Policies (excluding
those items listed on Schedule 6.02(xxvi));




               (xxvii) Liens constituting (A) licenses, sublicenses, leases or subleases (on a
non-exclusive basis with respect to any intellectual property) granted in the ordinary
course of business not interfering in any material respect with the business of the
Borrower or any of its Restricted Subsidiaries, (B) other agreements entered into in the
ordinary course of business in connection with an asset sale permitted under the Loan
Documents or (C) customary rights reserved or vested in any Person in the ordinary
course of business by the terms of any lease, sublease, license, sublicense, franchise,
grant or permit held by Borrower or any of its Restricted Subsidiaries or by a statutory
provision, to terminate any such lease, sublease, license, sublicense, franchise, grant
or permit, or to require annual or periodic payments as a condition to the continuance
thereof;




               (xxviii) netting or set-off arrangements entered into under Indebtedness permitted
by Section 6.01(vii) where the obligations of the parties are calculated by reference to
the net exposure under such Indebtedness;



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               (xxix) Liens securing the intercompany note pledged to the Collateral Agent
pursuant to a Pledge Agreement and issued by Solutia Europe SA/NV in connection with the
Permitted Restructuring, in each case as described on Schedule 5.19; and




               (xxx) with respect to any Restricted Subsidiary organized under the laws of
Germany, Liens created or subsisting to the extent mandatorily required under Section 8a
of the German Partial Retirement Act (Altersteilzeitgesetz) and/or Section 7d of the
German Sozialgesetzbuch IV;


provided, however, that no Liens shall be permitted to exist, directly or
indirectly, on any Securities Collateral (as defined in the Security Agreement) other than Liens in
favor of the Collateral Agent and Liens permitted by Sections 6.02(v), 6.02(ix) and 6.02(xviii).




          SECTION 6.03. Fundamental Changes; Line of Business. The Borrower will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with them, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have occurred and be
continuing, (i) any Wholly Owned Subsidiary may merge into the Borrower in a transaction in which
the Borrower is the surviving corporation, (ii) any Subsidiary of the Borrower may merge with or
into or consolidate with any Restricted Subsidiary in a transaction in which the surviving or
resulting entity is a Restricted Subsidiary (provided that if any party to such merger or
consolidation is a Subsidiary Guarantor, the surviving or resulting entity shall be a Subsidiary
Guarantor that is a Wholly Owned Subsidiary of the Borrower), and (iii) Permitted Acquisitions as
permitted by Section 6.04(vii) may be consummated; provided that in connection with each of
the foregoing, the appropriate Loan Parties shall take all actions necessary or reasonably
requested by the Collateral Agent to maintain the perfection of or perfect, as the case may be,
protect and preserve the Liens on the Collateral granted to the Collateral Agent pursuant to the
Security Documents and otherwise comply with the provisions of Sections 5.11, 5.12 and 5.15, in
each case, on the terms set forth therein and to the extent applicable.




          (b) Notwithstanding the foregoing, (i) any Restricted Subsidiary may dispose of any or all of
its assets (upon voluntary liquidation, dissolution or otherwise) to the Borrower or any Subsidiary
Guarantor that is a Wholly Owned Subsidiary of the Borrower, (ii) any Non-Guarantor Restricted
Subsidiary may dispose of any or all of its assets (upon voluntary liquidation, dissolution or
otherwise) to the Borrower or any other Restricted Subsidiary that is a Wholly Owned Subsidiary of
the Borrower and (iii) any Immaterial Restricted Subsidiary may liquidate or dissolve;
provided that in connection with each of the foregoing, the appropriate Loan Parties shall
take all actions necessary or reasonably requested by the Collateral Agent to maintain the
perfection of or perfect, as the case may be, protect and preserve the Liens on the Collateral
granted to the Collateral Agent pursuant to the Security Documents and otherwise comply with the
provisions of Sections 5.11, 5.12 and 5.15, in each case, on the terms set forth therein and to the
extent applicable).




          (c) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, engage in any business other than businesses of the type conducted by the Borrower
and its Restricted Subsidiaries on the Effective Date and businesses substantially similar,
ancillary or reasonably related thereto.




          SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, purchase, hold or acquire (including pursuant to any merger with any Person that was
not a Wholly Owned




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Restricted Subsidiary prior to such merger) any Equity Interests in or evidences
of Indebtedness or other securities (including any option, warrant or other right to acquire any of
the foregoing) of, make or permit to exist any loans or advances to, or otherwise lend money to,
Guarantee any Indebtedness of, or make or permit to exist any investment in, any other Person, or
provide other credit support (including the provision of letters of credit for the account of such
Person) for any Person or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit, line of business or
division (each of the foregoing, an “Investment” and
collectively, “Investments”), except:





               (i) cash and Permitted Investments;




               (ii) Investments existing on the Effective Date and set forth on Schedule
6.04;




               (iii) Investments (A) by the Borrower or any Restricted Subsidiary in any Loan
Party, (B) by any Non-Guarantor Restricted Subsidiary in any other Non-Guarantor
Restricted Subsidiary and (C) after the Effective Date by any Loan Party in any
Non-Guarantor Restricted Subsidiary; provided that the aggregate amount of such
Investments pursuant to this clause (C) shall not exceed $75.0 million at any one time
outstanding; and provided, further, that (x) any such Investment held by a Loan
Party shall be pledged pursuant to a Pledge Agreement or a Non-U.S. Pledge Agreement in
accordance with Section 5.11 and (y) any such Investment in the form of a loan or
advance to any Loan Party shall be subordinated to the Obligations on terms reasonably
satisfactory to the Administrative Agent;




               (iv) (A) Guarantees by any Non-U.S. Restricted Subsidiary that is a Non-Guarantor
Restricted Subsidiary of Indebtedness permitted by Sections 6.01(xii) and (B) Guarantees
of Indebtedness permitted by 6.01(xv); provided that except in the case of
Guarantees by Excluded Non-U.S. Restricted Subsidiaries of Indebtedness of Non-U.S.
Restricted Subsidiaries under the Revolving Credit Loan Documents, no Restricted
Subsidiary shall Guarantee any such Indebtedness under the Revolving Credit Loan
Documents unless such Restricted Subsidiary is a Subsidiary Guarantor under this
Agreement and the other Loan Documents;




               (v) Investments received in connection with the bankruptcy or reorganization of, or
settlement of delinquent accounts and disputes with, customers and trade creditors, in
each case in the ordinary course of business of the Borrower and its Restricted
Subsidiaries;




               (vi) loans and advances to directors and employees of the Borrower or its
Restricted Subsidiaries in the ordinary course of business of the Borrower and its
Restricted Subsidiaries (including for travel, entertainment and relocation expenses)
(other than any loans or advances to any director or executive officer (or equivalent
thereof) that would violate any Requirement of Law in any material respect) in an
aggregate principal amount (determined without regard to any write-downs or write-offs
of such loans and advances) not to exceed $5.0 million at any one time outstanding;
provided that (A) to the extent such loans or
advances are evidenced by promissory notes, such promissory notes shall be endorsed
in blank and delivered to the Collateral Agent pursuant to the Pledge Agreement and (B)
the Borrower will, and will cause its Restricted Subsidiaries to, take all actions and
execute all documents reasonably requested by the Collateral Agent to confirm the
Collateral Agent’s security interest in such loans and advances and/or promissory notes
pursuant to the applicable Security Documents;



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               (vii) Permitted Acquisitions; provided that the aggregate Acquisition
Consideration used to consummate Permitted Acquisitions following the Effective Date of
(a) Persons that will not, immediately after giving effect to the relevant Permitted
Acquisition, either become Subsidiary Guarantors or be merged into Loan Parties (with
such Loan Parties being the surviving entities) and (b) assets or divisions, lines of
business or other business units that will not be conveyed to Loan Parties immediately
after giving effect to the relevant Permitted Acquisition, may not exceed an aggregate
of $100.0 million;




               (viii) Investments in Joint Ventures in an aggregate amount not to exceed $50.0
million at any one time outstanding;




               (ix) mergers and consolidations and dissolutions and other transactions permitted
under Section 6.03;




               (x) Hedging Agreements permitted under Section 6.15;




               (xi) Investments in deposit accounts in the ordinary course of business of the
Borrower and its Restricted Subsidiaries;




               (xii) security deposits required by utility companies and other Persons in a
similar line of business to that of utility companies and Governmental Authorities that
are utility companies, in each case, made in the ordinary course of business of the
Borrower and its Restricted Subsidiaries;




               (xiii) Investments described on Schedule 1.01(b) in connection with the
Permitted Restructuring;




               (xiv) other Investments in an aggregate amount at any time outstanding not to
exceed the greater of (x) $75.0 million and (y) 3.0% of Consolidated Net Tangible Assets
at such time; provided that (A) any such Investment held by a Loan Party shall
be pledged pursuant to a Pledge Agreement or a Non-U.S. Pledge Agreement in accordance
with, and to the extent required by, Section 5.11 and (B) any such Investment in the
form of a loan or advance to any Loan Party shall be subordinated to the Obligations on
terms reasonably satisfactory to the Administrative Agent;




               (xv) Investments consisting of any deferred portion (including promissory notes and
non-cash consideration) of the sales price received by the Borrower or any Restricted
Subsidiary in connection with any Asset Sale permitted under Section 6.05;




               (xvi) advances of payroll payments to employees in the ordinary course of business;




               (xvii) Investments constituting or resulting from (i) accounts receivable arising
or acquired or (ii) trade debt granted, in each case in the ordinary course of business;




               (xviii) Investments in respect of Treasury Services Agreements permitted under
Section 6.01(x);




               (xix) Investments constituting (A) Sale and Leaseback Transactions permitted under
Section 6.06 or (B) Restricted Payments permitted under Section 6.07; and



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               (xx) the endorsement of negotiable instruments for deposit or collection in the
ordinary course of business;


provided, however, that any intercompany Investments in the form of a loan or
advance held by a Loan Party shall be evidenced by a promissory note in form and substance
reasonably satisfactory to the Administrative Agent.




          The aggregate amount of an Investment at any one time outstanding for purposes of this Section
6.04 shall be deemed to be equal to (A) the aggregate amount of cash, together with the aggregate
fair market value of Property, loaned, advanced, contributed, transferred or otherwise invested
that gives rise to such Investment (without adjustment for subsequent increases or decreases in the
value of such Investment) minus (B) the aggregate amount of dividends, distributions or other
payments received in cash in respect of such Investment (including by way of a sale or other
disposition of such Investment). The amount of an Investment shall not in any event be reduced by
reason of any write-off of such Investment.




          SECTION 6.05. Asset Sales. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, effect
any Asset Sale, except:





               (i) sales of inventory or the disposition (including the abandonment of immaterial
intellectual property) of surplus, obsolete or worn out equipment and other property or
property which is no longer used, in each case in the ordinary course of business of the
Borrower and its Restricted Subsidiaries;




               (ii) sales, transfers and other dispositions of Property (A) by the Borrower or any
Restricted Subsidiary to the Borrower or any Subsidiary Guarantor that is a Wholly Owned
Subsidiary of the Borrower or (B) by any Non-Guarantor Restricted Subsidiary to any
Wholly Owned Restricted Subsidiary; provided that in connection with the
foregoing, the appropriate Loan Parties shall take all actions necessary or reasonably
requested by the Collateral Agent to maintain the perfection of or perfect, as the case
may be, protect and preserve the Liens on the Collateral granted to the Collateral Agent
pursuant to the Security Documents and otherwise comply with the provisions of Sections
5.11, 5.12 and 5.15, in each case, on the terms set forth therein and to the extent
applicable;




               (iii) the lease or sublease of Real Property in the ordinary course of business of
the Borrower and its Restricted Subsidiaries and not constituting a Sale and Leaseback
Transaction;




               (iv) sales and dispositions of Permitted Investments on ordinary business terms;




               (v) Liens permitted by Section 6.02, mergers, consolidations, liquidations and
dissolutions permitted by Section 6.03 and Investments permitted by Section 6.04;




               (vi) Small Asset Sales;




               (vii) Asset Sales described on Schedule 1.01(b) in connection with the
Permitted Restructuring;



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               (viii) sales, transfers and dispositions of assets not otherwise permitted under
this Section (including Sale and Leaseback Transactions permitted under Section 6.06);
provided that (A) immediately after giving effect to any such sale, transfer or
disposition, no Default or Event of Default shall have occurred and be continuing, (B)
the aggregate fair market value of all assets sold, transferred or otherwise disposed of
in reliance upon this Section 6.05(viii) from the Effective Date through the date of
such sale, transfer or other disposition do not exceed the Asset Sale Cap (for the
avoidance of doubt, any subsequent decrease in the Asset Sale Cap shall not constitute a
Default or an Event of Default with respect to sales, transfers and dispositions
previously made as permitted by this Section 6.05(viii)) and (C) the Net Proceeds
thereof are applied as and to the extent required by Section 2.04(b)(ii);




               (ix) the issuance of qualifying shares of Restricted Subsidiaries to officers and
directors of such Restricted Subsidiaries to the extent required by applicable
Requirements of Law;




               (x) Permitted Guarantor Factoring Transactions and Permitted Non-Guarantor
Factoring Transactions;




               (xi) dispositions of accounts receivable in connection with compromise, write down
or collection thereof in the ordinary course of business;




               (xii) Specified Asset Sales; provided that the Net Proceeds thereof are
applied as required by Section 2.04(b)(ii);




               (xiii) transfers of property subject to a Taking or in connection with any
condemnation proceeding upon receipt of the Net Proceeds of such Taking or condemnation
proceeding;




               (xiv) dispositions of the Equity Interests of or other Investments in any Joint
Venture to the extent required by the terms of customary buy/sell type arrangements
entered into in connection with the formation of such Joint Venture;




               (xv) any Sale and Leaseback Transaction in respect of the Headquarters Building;
and




               (xvi) dispositions of property to the extent that such property is exchanged for
credit against the purchase price of similar replacement property which is concurrently
purchased pursuant to a transaction otherwise permitted hereunder, in each case under
Section 1031 of the Code;


provided that all sales, transfers, leases and other dispositions permitted hereby shall be
made for fair value and (other than in the case of sales, transfers, leases and other dispositions
permitted by Sections
6.05(v), 6.05(vii), 6.05(ix), 6.05(xiv) and 6.05(xvi)), for consideration consisting of at least
75% cash and Cash Equivalents.




          SECTION 6.06. Sale and Leaseback Transactions. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any Property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter lease such Property or other
Property that it in-




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tends to use for
substantially the same purpose or purposes as the Property sold or transferred (a “Sale and
Leaseback Transaction”) unless (a) such Sale and Leaseback Transaction is consummated for fair
value as determined at the time of consummation in good faith by (i) the Borrower or such
Restricted Subsidiary and (ii) in the case of any Sale and Leaseback Transaction (or series of
related Sale and Leaseback Transactions) the aggregate proceeds of which exceed $25.0 million, the
board of directors of the Borrower or such Restricted Subsidiary (which such determination may take
into account any retained interest or other Investment of the Borrower or such Restricted
Subsidiary in connection with, and any other material economic terms of, such Sale and Leaseback
Transaction); (b) except in the case of any Sale and Leaseback Transaction in respect of the
Headquarters Building, the sale of such Property is permitted by Section 6.05(viii); and (c) except
in the case of any Sale and Leaseback Transaction in respect of the Headquarters Building, the Net
Proceeds of the sale of such Property are applied as and to the extent required by Section
2.04(b)(ii); provided, this Section 6.06 shall not apply to Sale and Leaseback Transactions
(i) between Loan Parties or (ii) between Non-Guarantor Restricted Subsidiaries.




          SECTION 6.07. Restricted Payments. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, declare or make, any Restricted Payment or incur any obligation (contingent or
otherwise) to do so, except:





               (i) any Restricted Subsidiary may declare and pay dividends to the Borrower, any
other Restricted Subsidiary or any other holder of its Equity Interests ratably with
respect to its Equity Interests or additional Equity Interests (other than Disqualified
Equity Interests) of the same class of Equity Interests as the dividend being paid;
provided that no such dividend or distribution shall be made by any such
Restricted Subsidiary to any Person other than the Borrower or another Restricted
Subsidiary unless ratable dividends or distributions are concurrently made to all
holders of the applicable Equity Interests;




               (ii) the Borrower may pay dividends consisting solely of shares of its common stock
or additional shares of the same class of shares as the dividend being paid or other
Equity Interests (other than Disqualified Equity Interests); and




               (iii) the Borrower and its Restricted Subsidiaries may make Restricted Payments not
to exceed $50.0 million in the aggregate since the Effective Date; provided that
no Default shall have occurred and is continuing or would result therefrom.



          SECTION 6.08. Transactions with Affiliates. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, sell, lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other transactions with,
any of its Affiliates, unless such transactions are in the ordinary course of business of the Borrower and its
Restricted Subsidiaries and are on terms and conditions not less favorable to the Borrower or such
Restricted Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties,
except:





               (i) loans, advances and other transactions between or among the Borrower, any
Restricted Subsidiary or any Joint Venture (regardless of the form of legal entity) in
which the Borrower or any Restricted Subsidiary has invested (and which Restricted
Subsidiary or Joint Venture would not be an Affiliate of the Borrower but for the
Borrower’s or a Subsidiary’s ownership of Equity Interests in such Joint Venture or
Subsidiary) to the extent permitted under Article VI;



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               (ii) reasonable and customary fees and compensation, benefits and incentive
arrangements paid or provided to, and any reasonable and customary indemnity provided on
behalf of, officers, directors or employees of the Borrower or any Restricted
Subsidiary, as determined in good faith by the Borrower or such Restricted Subsidiary;




               (iii) loans and advances to employees of the Borrower or any Subsidiary Guarantor
permitted by Section 6.04(vi); and




               (iv)
transactions permitted by Section 6.07.



          SECTION 6.09. Restrictive Agreements. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of any Loan Party to create,
incur or permit to exist any Lien upon any of its Property, or (b) the ability of any Restricted
Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or
to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee
Indebtedness of the Borrower or any other Restricted Subsidiary or to transfer property to the
Borrower or any of its Restricted Subsidiaries; provided that the foregoing shall not apply
to:





               (i) conditions or restrictions imposed by law or by any Loan Document, Revolving
Credit Loan Document or Bridge Loan Document (or Permitted Refinancings of Bridge Loan
Documents) or the Exchange Note Documents (or Permitted Refinancings of Exchange Note
Documents) so long as, in the case of any such Permitted Refinancing, the conditions or
restrictions imposed pursuant to such Permitted Refinancing are no more restrictive,
taken as a whole, than those conditions or restrictions contained in the Bridge Loan
Documents as of the Effective Date;




               (ii) clause (a) shall not apply to assets encumbered by Permitted Liens as long as
such restriction applies only to the asset encumbered by such Permitted Lien;




               (iii) restrictions and conditions existing on the Effective Date not otherwise
excepted from this Section 6.09 identified on Schedule 6.09 (but shall not apply
to any amendment or modification expanding the scope of any such restriction or
condition);




               (iv) in the case of clause (a) only, any agreement in effect at the time any Person
becomes a Subsidiary of the Borrower; provided that such agreement was not
entered into in contemplation of such Person becoming a Subsidiary;




               (v) customary restrictions and conditions contained in agreements relating to the
sale of a Restricted Subsidiary (or the assets of a Restricted Subsidiary or the
Borrower) pending such sale, provided such restrictions and conditions apply
only to the Restricted Subsidiary that is to be sold (or whose assets are to be sold)
and such sale is permitted hereunder;




               (vi) clause (a) shall not apply to customary provisions in leases, subleases,
licenses, sublicenses and service contracts in the ordinary course of business of the
Borrower and its Restricted Subsidiaries between the Borrower or any Restricted
Subsidiary and its customers and other contracts restricting the assignment thereof;



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               (vii) without affecting the Borrower’s obligations under Sections 5.11, 5.12 and
5.15, customary provisions in joint venture agreements entered into in connection with
the formation of such joint venture in the ordinary course of business that (x) restrict
the transfer of Equity Interests in such joint venture or (y) the case of any joint
venture that is not a Loan Party, provide for other restrictions of the type described
in clauses (a) and (b) above, solely with respect to the Equity Interests in, or
property held in, such joint venture; and




               (viii) any agreement with respect to Indebtedness of a Non-U.S. Restricted
Subsidiary permitted pursuant to this Agreement so long as such prohibitions or
limitations are only with respect to the properties and revenues of such Subsidiary or
any Subsidiary of such Non-U.S. Restricted Subsidiary.



          SECTION 6.10. Amendments or Waivers of Certain Documents; Prepayments of Certain
Indebtedness. (a) The Borrower will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, amend or otherwise change (or waive) the terms of any Organizational
Document in a manner that, taken, as a whole, could reasonably be expected to materially and
adversely affect the interests of the Lenders.




          (b) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, (i) make
(or give any notice or offer in respect of) any voluntary or optional payment or mandatory
prepayment or redemption, or defeasance or acquisition for value of (including by way of depositing
with any trustee with respect thereto money or securities before such Indebtedness is due for the
purpose of paying such Indebtedness when due) or exchange of principal of, any Subordinated Debt,
other than (A) pursuant to any customary registered exchange offer therefor after a private
placement thereof, (B) any Permitted Refinancings thereof or (C) so long as no Default then exists,
any exchange of Equity Interests of the Borrower for any such Indebtedness or (ii) make any payment
on or with respect to any Subordinated Debt wholly among the Loan Parties in violation of the
subordination provisions thereof.




          (c) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, amend or
modify, or permit the amendment or modification of, any provision of any document governing any
Material Indebtedness (other than Indebtedness under the Loan Documents or Revolving Credit Loan
Documents) in any manner that, taken as a whole, could reasonably be expected to materially and
adversely affect the interests of the Lenders.




          SECTION 6.11. Accounting Treatment; Fiscal Year. The Borrower will not, and will not permit any of its Restricted Subsidiaries to:




          (a) make or permit any material change in accounting policies or reporting practices or tax
reporting treatment which is adverse to the Lenders, except changes that are permitted by GAAP or
required by any Requirement of Law and disclosed in writing to the Administrative Agent; or




          (b) change its fiscal year-end to a date other than December 31.




          SECTION 6.12. Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed Charge Coverage Ratio for any Test Period ending on
any date set forth below to be less than the ratio set forth opposite the last day of such Test
Period below:





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	Date	 	Ratio
	September 30, 2008
	 	 	1.00:1.00	 
	December 31, 2008
	 	 	1.05:1.00	 
	March 31, 2009
	 	 	1.15:1.00	 
	June 30, 2009
	 	 	1.15:1.00	 
	September 30, 2009
	 	 	1.15:1.00	 
	December 31, 2009
	 	 	1.15:1.00	 
	March 31, 2010
	 	 	1.35:1.00	 
	June 30, 2010
	 	 	1.35:1.00	 
	September 30, 2010
	 	 	1.35:1.00	 
	December 31, 2010
	 	 	1.35:1.00	 
	March 31, 2011
	 	 	1.55:1.00	 
	June 30, 2011
	 	 	1.55:1.00	 
	September 30, 2011
	 	 	1.55:1.00	 
	December 31, 2011
	 	 	1.55:1.00	 
	March 31, 2012 and the last day of each Fiscal Quarter thereafter
	 	 	1.75:1.00	 






          SECTION 6.13. Total Leverage Ratio. The Borrower will not permit the Total Leverage Ratio as of the last day of any Test Period
ending on any date set forth below to exceed the ratio set forth opposite the last day of such Test
Period below:




	 	 	 	 	 
	Date	 	Ratio
	June 30, 2008
	 	 	5.50:1.00	 
	September 30, 2008
	 	 	5.25:1.00	 
	December 31, 2008
	 	 	5.00:1.00	 
	March 31, 2009
	 	 	4.75:1.00	 
	June 30, 2009
	 	 	4.50:1.00	 
	September 30, 2009
	 	 	4.25:1.00	 
	December 31, 2009
	 	 	4.25:1.00	 
	March 31, 2010
	 	 	3.75:1.00	 
	June 30, 2010
	 	 	3.75:1.00	 
	September 30, 2010
	 	 	3.75:1.00	 
	December 31, 2010
	 	 	3.75:1.00	 






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	Date	 	Ratio
	March 31, 2011
	 	 	3.50:1.00	 
	June 30, 2011
	 	 	3.50:1.00	 
	September 30, 2011
	 	 	3.50:1.00	 
	December 31, 2011
	 	 	3.50:1.00	 
	March 31, 2012 and the last day of each Fiscal Quarter thereafter
	 	 	3.00:1.00	 






          SECTION 6.14. Capital Expenditures. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, make or
commit to make any Capital Expenditures, except that:




          (a) the Borrower and its Restricted Subsidiaries may make or commit to make Capital
Expenditures not exceeding $175.0 million (the “Base Amount”) for each Fiscal Year;
provided that for each Permitted Acquisition consummated in any Fiscal Year, the Base
Amount for such Fiscal Year (subject to the second proviso in this Section 6.14(a)) and for every
Fiscal Year thereafter shall be increased by an amount equal to (i) the quotient obtained by
dividing (A) the amount of Capital Expenditures made by the acquired entity or business for the
36-month period immediately preceding the consummation of such Permitted Acquisition, by (B) three,
or (ii) if the information described in the foregoing clause (i)(A) is not available, 3.0% of
cumulative sales over the immediately preceding 12 months of the acquired Person, division, line of
business or other business unit, as determined in financial statements therefor prepared in
accordance with the standards set forth in Section 5.01(b) (in either case, such amount, the
“Acquired Permitted Capital Expenditure Amount”); provided that, with respect to
the Fiscal Year during which any such Permitted Acquisition occurs, the amount of Capital
Expenditures permitted under this Section 6.14 with respect to such Fiscal Year shall be increased
by an amount equal to the product of (x) the Acquired Permitted Capital Expenditure Amount and (y)
a fraction, the numerator of which is the number of days remaining in such fiscal year and the
denominator of which is 365 or 366, as applicable.




          (b) (i) For any Fiscal Year (commencing with the Fiscal Year ending December 31, 2009), the
Base Amount applicable to such Fiscal Year may be increased for any such Fiscal Year by carrying over to any such Fiscal Year any portion of the Base Amount (without giving effect to
any increase) not spent in the immediately preceding Fiscal Year, and that Capital Expenditures in
any Fiscal Year shall be deemed first made from the Base Amount applicable to such Fiscal Year in
any given Fiscal Year and (ii) an amount equal to not more than 50% of the Base Amount for the next
succeeding Fiscal Year may be carried back to such Fiscal Year and utilized to make such Capital
Expenditures in such Fiscal Year (it being understood and agreed that (x) no Base Amount may be
carried back beyond the Fiscal Year immediately prior to the Fiscal Year of such Base Amount and
(y) the portion of any so carried-back Base Amount actually utilized in such Fiscal Year shall be
deducted from the Base Amount in the Fiscal Year from which it was carried back).




          SECTION 6.15. Hedging Agreements. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter
into any Hedging Agreement, other than (a) Hedging Agreements required by Section 5.16, (b) Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the
Borrower and its Restricted Subsidiaries may be exposed in the conduct of their business or the
management of their liabilities, and (c) Hedging Agreements entered into in order to effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one floating





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rate to
another floating rate or otherwise) with respect to any interest-bearing liability or investment of
the Borrower and its Restricted Subsidiaries.




          SECTION 6.16. Assets, Liabilities and Actions of SFC.
The Borrowers will not permit SFC to own any assets (other than the Funding Co. Accounts (as
such term is defined in the Monsanto Settlement Agreement) and the funds on deposit therein), incur
any obligations (other than obligations under the Monsanto Settlement Agreement, obligations that
are necessary to fulfill such obligations and obligations in connection with the maintenance of its
existence) or take any actions in violation of the SFC Limited Liability Company Agreement.




ARTICLE VII




EVENTS OF DEFAULT




          SECTION 7.01. Listing of Events of Default. Each of the following events or occurrences described in this Section 7.01 shall constitute
an “Event of Default”:





     (a) The Borrower or any other Loan Party shall default (i) in the payment when due of
any principal of any Loan (including on any Installment Payment Date), (ii) in the payment
when due of any interest on any Loan (and such default shall continue unremedied for a
period of five Business Days), or (iii) in the payment when due of any fee described in
Section 2.08 or of any other previously invoiced amount (other than an amount described in
clauses (i) and (ii)) payable under this Agreement or any other Loan Document (and such
default in the payment of any such fee or other amount shall continue unremedied for a
period of 20 Business Days).




     (b) Any representation or warranty of the Borrower or any other Loan Party made or
deemed to be made hereunder or in any other Loan Document or any other writing or
certificate furnished by or on behalf of the Borrower or any other Loan Party to the
Administrative Agent, the Collateral Agent or any Lender for the purposes of or in
connection with this Agreement or
any such other Loan Document is or shall be incorrect in any material respect when made
or deemed made.




     (c) The Borrower or any other Loan Party shall default in the due performance and
observance of any of its obligations under Sections 5.01(e), 5.01(f) or 5.01(j), Section
5.02(a) (with respect to the maintenance and preservation of the Borrower’s corporate
existence), Section 5.17(b), Section 5.19 or Article VI.




     (d) The Borrower or any other Loan Party shall default in the due performance and
observance of any agreement (other than those specified in paragraphs (a) through (c) above)
contained herein or in any other Loan Document, and such default shall continue unremedied
for a period of 30 days after the earlier to occur of (i) knowledge of such default by an
executive officer or Financial Officer (or any other officer or similar official with
responsibility for the administration of the obligations of the Borrower in respect of this
Agreement) of the Borrower and (ii) written notice of such default from the Administrative
Agent or any Lender to the Borrower.




     (e) A default shall occur (i) in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Material Indebtedness or (ii) in the
performance or observance of any obligation or condition with respect to any Material
Indebtedness if the effect of such default referred to in this clause (ii) is to accelerate
the maturity of any



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such Material Indebtedness or enable or permit (with or without the
giving of notice, the lapse of time or both) the holder or holders of any such Material
Indebtedness or any trustee or agent on its or their behalf to cause any such Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity.




     (f) Any judgment or order (or combination of judgments and orders) for the payment of
money equal to or in excess of $25.0 million (to the extent not (i) paid, (ii) covered by
insurance as to which such insurer has been notified of such judgment or order and has not
denied coverage or (iii) covered by an indemnity by a third party as to which such Person
has been notified of such judgment or order and has accepted liability for payment of such
judgment or order) individually or in the aggregate shall be rendered against the Borrower
or any of its Restricted Subsidiaries (or any combination thereof) and




     (i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order and not stayed;




     (ii) such judgment has not been bonded pending appeal, stayed, vacated or
discharged within 60 days of entry; or




     (iii) there shall be any period (after any applicable statutory grace period)
of 10 consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect.




     (g) Any of the following events shall occur:




     (i) the taking of, or failure to take, any specific actions by the Borrower or
any Restricted Subsidiary or ERISA Affiliate or any other Person if, as a result of
such act or omission, the Borrower or any Restricted Subsidiary or ERISA Affiliate
could reasonably expect to incur a liability or obligation to such Pension Plan
which could reasonably be expected to result in a Material Adverse Effect or in the imposition
of a Lien on any properties of the Borrower or any Restricted Subsidiary; or




     (ii) an ERISA Event, or termination, withdrawal or event of noncompliance with
applicable law or plan terms with respect to Foreign Plans, shall have occurred that
when taken together with all other ERISA Events and terminations, withdrawals and
events of noncompliance with respect to Foreign Plans that have occurred, could
reasonably be expected to have a Material Adverse Effect.




     (h) Any Change of Control shall occur.




     (i) The Borrower or any Restricted Subsidiary (other than an Immaterial Restricted
Subsidiary) shall




     (i) become insolvent or generally (and with respect to the European Loan
Parties (as defined in the Revolving Credit Agreement), on a persistent basis) fail
to pay debts as they become due;




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     (ii) apply for, consent to or acquiesce in the appointment of a trustee,
receiver, sequestrator or other custodian for the Borrower or such Restricted
Subsidiary or substantially all of its property, or make a general assignment for
the benefit of creditors;




     (iii) in the absence of such application, consent or acquiescence, permit or
suffer to exist the appointment of a trustee, receiver, sequestrator or other
custodian for the Borrower or any Restricted Subsidiary or for a substantial part of
its property, and such trustee, receiver, sequestrator or other custodian shall not
be discharged or stayed within 60 days, provided that the Borrower hereby
expressly authorizes the Administrative Agent and each Lender to appear in any court
conducting any relevant proceeding during such 60-day period to preserve, protect
and defend their rights under the Loan Documents;




     (iv) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any bankruptcy or
insolvency law, or any dissolution, winding up or liquidation proceeding, in respect
of the Borrower or any Restricted Subsidiary (other than any dissolution or
liquidation permitted under Section 6.03) and, if any such case or proceeding is not
commenced by the Borrower or any Restricted Subsidiary, such case or proceeding
shall be consented to or acquiesced in by the Borrower or any Restricted Subsidiary
or shall result in the entry of an order for relief or shall remain for 60 days
undismissed and unstayed; provided that the Borrower hereby expressly
authorizes the Administrative Agent and each Lender to appear in any court
conducting any such case or proceeding during such 60-day period to preserve,
protect and defend their rights under the Loan Documents; or




     (v) take any corporate or partnership action (or comparable action, in the case
of any other form of legal entity) indicating its consent to, approval of, or
acquiescence in, any of the foregoing.




     (j) The obligations of any Loan Party under the Guarantee Agreement or any Non-U.S.
Guarantee Agreement shall cease to be in full force and effect (except in accordance with
the terms thereof) or any such Loan Party shall repudiate its obligations thereunder.




     (k) Any Loan Document shall cease to be in full force and effect (except in accordance
with its terms) or any Lien purported to be created under any Security Document shall fail
or cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien
on any material portion of the Collateral, with the priority required by the applicable
Security Document, except to the extent such failure results from (i) the gross negligence
or willful misconduct of the Collateral Agent following the request of the Borrower to take
actions with respect to the validity and perfection of such Liens or (ii) the loss of
possessory Collateral by the Collateral Agent or the Administrative Agent, as applicable.



          SECTION 7.02. Action if Bankruptcy. If any Event of Default described in Section 7.01(i) shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding principal amount of all
outstanding Loans and all other Obligations shall automatically be and become immediately due and
payable, without notice or demand, all of which are hereby waived by the Borrower.




          SECTION 7.03. Action if Other Event of Default. If any Event of Default (other than any Event of Default described in Section 7.01(i))
shall occur for any reason, whether voluntary or invol-




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untary, and be continuing, the Administrative
Agent, upon the direction of the Requisite Lenders, shall by written notice to the Borrower and
each Lender declare all or any portion of the outstanding principal amount of the Loans and other
Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of such Loans and other Obligations which shall be so
declared due and payable shall be and become immediately due and payable, without further notice,
demand or presentment and/or, as the case may be, the Commitments shall terminate.




ARTICLE VIII




THE AGENTS




          SECTION 8.01. Appointment and Authority. Each Lender hereby irrevocably appoints Citibank, N.A. to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. Each Lender hereby authorizes the Administrative Agent and the
Collateral Agent to enter into the Intercreditor Agreement on behalf of the Lenders. Each Lender
hereby irrevocably appoints Citibank, N.A. to act on its behalf as the Collateral Agent hereunder
and under the other Loan Documents and authorizes the Collateral Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of the Agents and the Lenders, and neither
the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such
provisions.




          SECTION 8.02. Agents Individually. (a) Each Person serving as an Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent
and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as an Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in any kind of
business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not
an Agent hereunder and without any duty to account therefor to the Lenders.




          (b) Each Lender understands that the respective Persons serving as Agents, Syndication Agent,
Documentation Agent and Joint Lead Arrangers and Bookrunners, acting in their individual
capacities, and their respective Affiliates (collectively, the “Agents’ Groups”) are
engaged in a wide range of financial services and businesses (including investment management,
financing, securities trading, corporate and investment banking and research) (such services and
businesses are collectively referred to in this Section 8.02 as “Activities”) and may
engage in the Activities with or on behalf of one or more of the Loan Parties or their respective
Affiliates. Furthermore, the Agents’ Groups may, in undertaking the Activities, engage in trading
in financial products or undertake other investment businesses for their respective own accounts or
on behalf of others (including the Loan Parties and their Affiliates and including holding, for
their respective own accounts or on behalf of others, equity, debt and similar positions in the
Borrower, another Loan Party or their respective Affiliates), including trading in or holding
long, short or derivative positions in securities, loans or other financial products of one or more
of the Loan Parties or their Affiliates. Each Lender understands and agrees that in engaging in
the Activities, the Agents’ Groups may receive or otherwise obtain information concerning the Loan
Parties or their Affiliates (including information concerning the ability of the Loan Parties to
perform their respective Obligations hereunder and under the other Loan Documents) which
information may not be available to any of the



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Lenders that are not members of the Agents’ Groups.
None of the members of the Agents’ Groups shall have any duty to disclose to any Lender or use on
behalf of the Lenders, and none of the members of the Agents’ Group shall be liable for the failure
to so disclose or use, any information whatsoever about or derived from the Activities or otherwise
(including any information concerning the business, prospects, operations, property, financial and
other condition or creditworthiness of any Loan Party or any Affiliate of any Loan Party) or
required to account for any revenue or profits obtained in connection with the Activities, except
that the Administrative Agent shall deliver or otherwise make available to each Lender such
documents as are expressly required by any Loan Document to be transmitted by the Administrative
Agent to the Lenders.




          (c) Each Lender further understands that there may be situations where members of the Agents’
Groups or their respective customers (including the Loan Parties and their Affiliates) either now
have or may in the future have interests or take actions that may conflict with the interests of
any one or more of the Lenders (including the interests of the Lenders hereunder and under the
other Loan Documents). Each Lender agrees that no member of the Agents’ Groups is or shall be
required to restrict its activities as a result of the Person serving as an Agent, Syndication
Agent, Documentation Agent or Joint Lead Arranger and Bookrunner being a member of the Agents’
Groups, and that each member of the Agents’ Groups may undertake any Activities without further
consultation with or notification to any Lender. None of (i) this Agreement nor any other Loan
Document, (ii) the receipt by the Agents’ Groups of information (including Information) concerning
the Loan Parties or their Affiliates (including information concerning the ability of the Loan
Parties to perform their respective Obligations hereunder and under the other Loan Documents) nor
(iii) any other matter shall give rise to any fiduciary, equitable or contractual duties (including
any duty of trust or confidence) owing by any member of the Agents’ Groups to any Lender including
any such duty that would prevent or restrict the Agents’ Groups from acting on behalf of customers
(including the Loan Parties or their Affiliates) or for their respective own accounts.




          SECTION 8.03. Duties of Agents; Exculpatory Provisions. (a) Each Agent’s duties hereunder and under the other Loan Documents are solely
ministerial and administrative in nature and no Agent shall have any duties or obligations except
those expressly set forth herein and in the other Loan Documents. Without limiting the generality
of the foregoing, no Agent shall have any duty to take any discretionary action or exercise any
discretionary powers, but shall be required to act or refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the written direction of the Requisite
Lenders (or such other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that no Agent shall be required to take
any action that, in its opinion or the opinion of its counsel, may expose such Agent or any of its
Affiliates to liability or that is contrary to any Loan Document or applicable law.




          (b) No member of the Agents’ Groups shall be liable to the Lenders for any action taken or not
taken by it (i) with the consent or at the request of the Requisite Lenders (or such other number
or percentage of the Lenders as shall be necessary, or as such member of the Agents’ Groups shall
believe in good faith shall be necessary, under the circumstances as provided in Sections 7.03 or
9.08) or (ii) in the absence of its own gross negligence or willful misconduct, as determined by a
final judgment of a court of competent jurisdiction. No Agent shall be deemed to have knowledge of any Default
or the event or events that give or may give rise to any Default unless and until the Borrower or
any Lender shall have given notice to such Agent describing such Default and such event or events.




          (c) None of any Agent nor any member of the Agents’ Group shall be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty, representation or other information
made or supplied in or in connection with this Agreement, any other Loan Document or the
In-



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formation Memorandum, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith or the adequacy, accuracy and/or
completeness of the information contained therein, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or document or the perfection
or priority of any Lien or security interest created or purported to be created by the Security
Documents or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein,
other than (but subject to the foregoing clause (ii)) to confirm receipt of items expressly
required to be delivered to such Agent.




          (d) Nothing in this Agreement or any other Loan Document shall require any Agent or any of its
Related Parties to carry out any “know your customer” or other checks in relation to any person on
behalf of any Lender and each Lender confirms to each Agent that it is solely responsible for any
such checks it is required to carry out and that it may not rely on any statement in relation to
such checks made by any Agent or any of its Related Parties.




          SECTION 8.04. Reliance by Agents. Each Agent shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper
Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability for relying
thereon. In determining compliance with any condition hereunder to the making of a Loan that by
its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume
that such condition is satisfactory to such Lender unless an officer of the Administrative Agent
responsible for the transactions contemplated hereby shall have received notice to the contrary
from such Lender prior to the making of such Loan, and in the case of a Borrowing, such Lender
shall not have made available to the Administrative Agent such Lender’s ratable portion of such
Borrowing. Each Agent may consult with legal counsel (who may be counsel for the Borrower or any
other Loan Party), independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of any such counsel,
accountants or experts.




          SECTION 8.05. Delegation of Duties. Each Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more sub-agents appointed by
such Agent. Each Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. Each such sub-agent and the
Related Parties of the applicable Agent and each such sub-agent shall be entitled to the benefits
of all provisions of this Article and Section 9.05 (as though such sub-agents were the
“Administrative Agent” or the “Collateral Agent”, as the case may be, under the Loan Documents) as if set forth in full herein
with respect thereto.




          SECTION 8.06. Resignation of Agents. Each Agent may at any time give notice of its resignation to the Lenders and the Borrower.
Upon receipt of any such notice of resignation, the Requisite Lenders shall have the right, subject
to the reasonable consent of the Borrower (such consent (i) not to be unreasonably withheld or
delayed and (ii) not to be required after the occurrence and during the continuance of an Event of
Default under Section 7.01(a) or Section 7.01(i)), to appoint a successor, which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank with an office in New York,
New York. If no such successor shall have been so appointed by the Requisite Lenders and shall
have accepted such appointment within 30 days after the retiring Agent gives notice of its
resigna-



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tion (such 30-day period, the “Lender Appointment Period”), then the retiring Agent
may on behalf of the Lenders, appoint a successor Agent meeting the qualifications set forth above.
In addition and without any obligation on the part of the retiring Agent to appoint, on behalf of
the Lenders, a successor Agent, the retiring Agent may at any time upon or after the end of the
Lender Appointment Period notify the Borrower and the Lenders that no qualifying Person has
accepted appointment as successor Agent and the effective date of such retiring Agent’s
resignation. Upon the resignation effective date established in such notice and regardless of
whether a successor Agent has been appointed and accepted such appointment, the retiring Agent’s
resignation shall nonetheless become effective and (i) the retiring Agent shall be discharged from
its duties and obligations as Administrative Agent or Collateral Agent, as the case may be,
hereunder and under the other Loan Documents and (ii) all payments, communications and
determinations provided to be made by, to or through such Agent shall instead be made by or to each
Lender directly, until such time as the Requisite Lenders appoint a successor Agent as provided for
above in this paragraph. Upon the acceptance of a successor’s appointment as the Administrative
Agent or Collateral Agent, as the case may be, hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the retiring (or retired)
Agent, and the retiring Agent shall be discharged from all of its duties and obligations as an
Agent hereunder or under the other Loan Documents (if not already discharged therefrom as provided
above in this paragraph). The fees payable by the Borrower to a successor Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After the retiring Agent’s resignation hereunder and under the other Loan Documents,
the provisions of this Article and Section 9.05 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Agent was acting as Administrative Agent
or Collateral Agent, as the case may be.




          SECTION 8.07. Non-Reliance on Agents and Other Lenders. (a) Each Lender confirms to each Agent, each other Lender and each of their respective
Related Parties that it (i) possesses (individually or through its Related Parties) such knowledge
and experience in financial and business matters that it is capable, without reliance on any Agent,
any other Lender or any of their respective Related Parties, of evaluating the merits and risks
(including tax, legal, regulatory, credit, accounting and other financial matters) of (x) entering
into this Agreement, (y) making Loans and other extensions of credit hereunder and under the other
Loan Documents and (z) in taking or not taking actions hereunder and thereunder, (ii) is
financially able to bear such risks and (iii) has determined that entering into this Agreement and
making Loans and other extensions of credit hereunder and under the other Loan Documents is
suitable and appropriate for it.




          (b) Each Lender acknowledges that (i) it is solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection with this Agreement and the
other Loan Documents, (ii) that it has, independently and without reliance upon any Agent, any
other Lender or any of their respective Related Parties, made its own appraisal and investigation
of all risks associated with, and its own credit analysis and decision to enter into, this
Agreement based on such documents and information, as it has deemed appropriate and (iii) it will,
independently and without reliance upon any Agent, any other Lender or any of their respective
Related Parties, continue to be solely responsible for making its own appraisal and investigation
of all risks arising under or in connection with, and its own credit analysis and decision to take
or not take action under, this Agreement and the other Loan Documents based on such documents and
information as it shall from time to time deem appropriate, which may include, in each case:





               (i) the financial condition, status and capitalization of the Borrower and each
other Loan Party;



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               (ii) the legality, validity, effectiveness, adequacy or enforceability of this
Agreement and each other Loan Document and any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in connection with any Loan
Document;




               (iii) determining compliance or non-compliance with any condition hereunder to the
making of a Loan and the form and substance of all evidence delivered in connection with
establishing the satisfaction of each such condition; and




               (iv) the adequacy, accuracy and/or completeness of the Information Memorandum and
any other information delivered by any Agent, any other Lender or by any of their
respective Related Parties under or in connection with this Agreement or any other Loan
Document, the transactions contemplated hereby and thereby or any other agreement,
arrangement or document entered into, made or executed in anticipation of, under or in
connection with any Loan Document.



          SECTION 8.08. No Other Duties, etc. Anything herein to the contrary notwithstanding, none of the Persons acting as Joint Lead
Arrangers and Bookrunners, Syndication Agent or Documentation Agent listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent
or as a Lender hereunder.




          SECTION 8.09. Security Trust Deed. Each Lender acknowledges the terms of the Security Trust Deed and, in particular, the
terms, basis and limitation on which the Collateral Agent holds the Transaction Security (as
defined therein) and specifically agrees and accepts (i) such terms, basis and limitation; (ii)
that the Collateral Agent shall, as trustee, have only those duties, obligations and
responsibilities expressly specified in the Security Trust Deed; (iii) the limitation and exclusion
of the Collateral Agent’s liability as set out therein; and (iv) all other provisions of the
Security Trust Deed as if it were a party thereto.




ARTICLE IX




MISCELLANEOUS




          SECTION 9.01. Notices. (a) All notices, demands, requests, consents and other communications provided for in this
Agreement shall be given in writing, or by any telecommunication device capable of creating a
written record (including electronic mail), and addressed to the party to be notified as follows:





	 	(i)	 	if to the Borrower or any other Loan Party,




Solutia Inc.

575 Maryville Centre Drive

P.O. Box 66760

St. Louis, Missouri 63166-6760

(courier delivers to: 575 Maryville Centre Drive, St. Louis, Missouri 63141)

Attention of: James Tichenor and Rosemary Klein

Telecopier No.: 314-674-2721

E-Mail Address:





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Website Address: www.solutia.com





	 	(ii)	 	if to the Administrative Agent,




Citibank, N.A.

2 Penn’s Way

New Castle, DE 19720

Attention of: Brenna Makin

Telecopier No.: 212-994-0849

E-Mail Address: Brenna.Makin@citi.com





	 	(iii)	 	if to the Collateral Agent,




Citibank, N.A.

2 Penn’s Way

New Castle, DE 19720

Attention of: Brenna Makin

Telecopier No.: 212-994-0849

E-Mail Address: Brenna.Makin@citi.com





     (iv) if to any other Lender, to it at its address (or telecopier number) set forth in
its Administrative Questionnaire,


or at such other address as shall be notified in writing (x) in the case of the Borrower and the
Administrative Agent, to the other parties and (y) in the case of all other parties, to the
Borrower and the Administrative Agent.




          (b) All notices, demands, requests, consents and other communications described in Section
9.01(a) shall be effective (i) if delivered by hand, including any overnight courier service, upon
personal delivery, (ii) if delivered by mail, when deposited in the mails, (iii) if delivered
by posting to an Approved Electronic Platform, an Internet website or a similar telecommunication
device requiring that a user have prior access to such Approved Electronic Platform, website or
other device (to the extent permitted by Section 9.17 to be delivered thereunder), when such
notice, demand, request, consent and other communication shall have been made generally available
on such Approved Electronic Platform, Internet website or similar device to the class of Person
being notified (regardless of whether any such Person must accomplish, and whether or not any such
Person shall have accomplished, any action prior to obtaining access to such items, including
registration, disclosure of contact information, compliance with a standard user agreement or
undertaking a duty of confidentiality) and such Person has been notified in respect of such posting
that a communication has been posted to the Approved Electronic Platform and (iv) if delivered by
electronic mail or any other telecommunications device, when transmitted to an electronic mail
address (or by another means of electronic delivery) as provided in Section 9.01(a);
provided, however, that notices and communications to the Administrative Agent
pursuant to Article II or Article VIII) shall not be effective until received by the Administrative
Agent.




          (c) Notwithstanding Sections 9.01(a) and 9.01(b) (unless the Administrative Agent requests
that the provisions of Sections 9.01(a) and 9.01(b) be followed) and any other provision in this
Agreement or any other Loan Document providing for the delivery of any Approved Electronic
Communication by any other means, the Loan Parties shall deliver all Approved Electronic
Communications to the Administrative Agent by properly transmitting such Approved Electronic
Communications in an elec-



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tronic/soft medium in a format reasonably acceptable to the Administrative
Agent to oploanswebadmin@citigroup.com or such other electronic mail address (or similar means of
electronic delivery) as the Administrative Agent may notify to the Borrower. Nothing in this
Section 9.01(c) shall prejudice the right of the Administrative Agent or any Lender to deliver any
Approved Electronic Communication to any Loan Party in any manner authorized in this Agreement or
to request that the Borrower effect delivery in such manner.




          SECTION 9.02. Survival of Agreement. All covenants, agreements, representations and warranties made by the Loan Parties herein
and in the certificates or other instruments prepared or delivered in connection with or pursuant
to this Agreement or any other Loan Document shall be considered to have been relied upon by
Lenders hereto and shall survive the making by the Lenders of the Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of
Default or incorrect representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement or any other Loan Document is
outstanding and so long as the Commitments have not been terminated. The provisions of Sections
2.12, 2.13, 2.14, 2.15, 9.05 and 9.16 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby, the repayment of the
Loans, the termination of the Commitments or the termination of this Agreement or any provision
hereof.




          SECTION 9.03. Binding Effect. Subject to Section 4.01, this Agreement shall become effective when it shall have been
executed by the Borrower and the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof (which may be by facsimile transmission or other electronic image scan
transmission (e.g., “PDF” or “tif” via e-mail)) which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective permitted successors and assigns.




          SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of the parties hereto is referred to, such reference
shall be deemed to include the permitted successors and assigns of such party. All covenants,
promises and agreements by or on behalf of the Borrower, the Agents or the Lenders that are
contained in this Agreement shall bind and inure to the benefit of their respective successors and
assigns. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in Section 9.04(f) below and, solely to the extent expressly
contemplated hereby, the Related Parties of each of the Agents and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.




          (b) Each Lender may assign to one or more assignees (other than a natural person, the Borrower
or any of the Borrower’s Affiliates or Subsidiaries or any Person engaged principally in the
business of manufacture or sale of high performance chemical based products that is a competitor of
the Borrower or any of its Subsidiaries) all or a portion of its interests, rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans at the time owing
to it); provided, however, that (i) except in the case of an assignment to a Lender
or a Lender Affiliate or in connection with the initial syndication of the Commitments and Loans,
the Borrower and the Administrative Agent must give their prior written consent to such assignment
(which consents shall not be unreasonably withheld or delayed), (ii) except in the case of an
assignment to a Lender, a Lender Affiliate or a Federal Reserve Bank or in connection with the
initial syndication of the Commitments and Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date



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the Assignment and
Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be
less than $1.0 million and increments of $1.0 million in excess thereof (or (A) if the aggregate
amount of the Commitment or Loans of the assigning Lender is a lesser amount, the entire amount of
such Commitment or Loans, or (B) in any other case, such lesser amount as the Borrower and the
Administrative Agent otherwise agree), (iii) except in the case of the assignment to an Affiliate
of such Lender or an assignment required to be made pursuant to Section 2.18, the parties to each
such assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500 (provided that only one such fee shall be
payable in the event of contemporaneous assignments to two or more Lender Affiliates by a Lender or
by two or more Lender Affiliates to a Lender and such fee shall not be payable by the Borrower) and
(iv) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; provided, further, that any consent of the Borrower
otherwise required under this paragraph shall not be required if an Event of Default has occurred
and is continuing. Subject to acceptance and recording pursuant to paragraph (e) of this Section
9.04, from and after the effective date specified in each Assignment and Assumption, which
effective date shall be at least five Business Days after the execution thereof (unless otherwise
determined by the Administrative Agent), (A) the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering all or the
remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections
2.12, 2.13, 2.14, 2.15 and 9.05 with respect to facts and circumstances occurring prior to the
effective date of such assignment). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender
of a participation in such rights and obligations in accordance with paragraph (f) of this Section.




          (c) By executing and delivering an Assignment and Assumption, the assigning Lender thereunder
and the assignee thereunder shall be deemed to confirm to and agree with each other and the other
parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse claim and that its
Commitment, and the outstanding balances of its Loans, in each case without giving effect to
assignments thereof which have not become effective, are as set forth in such Assignment and
Assumption; (ii) except as set forth in (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other Loan Document or any
other instrument or document furnished pursuant hereto, or the financial condition of the Borrower
or any Subsidiary or the performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Assumption; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent financial statements, if
any, delivered pursuant to Section 5.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such Assignment and
Assumption; (v) such assignee will independently and without reliance upon either Agent, such
assigning Lender or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (vi) such assignee appoints and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are delegated to such Agent
by the terms hereof, together with such



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powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.




          (d) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in The City of New York a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of the Lenders, and
the Commitment of, and principal amount of (and interest on) the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). Except to the extent
inconsistent with Section 2.05(d), the entries in the Register shall be conclusive and the
Borrower, the Agents and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender (with respect to its own interest only), at any reasonable time and from
time to time upon reasonable prior notice.




          (e) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, an Administrative Questionnaire completed in respect of the assignee
(unless the assignee shall already be a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) above and, if required, the written consent of the Borrower and the
Administrative Agent to such assignment, the Administrative Agent shall (i) accept such Assignment
and Assumption, (ii) record the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower. No assignment shall be effective unless it has been recorded in
the Register as provided in this paragraph (e).




          (f) Each Lender may without the consent of the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided, however, that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) each Participant shall be entitled to the
benefit of the cost protection provisions contained in Sections 2.12, 2.13, 2.14 and 2.15 and the
provisions of Section 5.01 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section 9.04 (provided that no participant
shall be entitled to receive any greater amount pursuant to such Sections than the Lender would
have been entitled to receive in respect of the interest transferred unless either (x) such
transfer to such Participant is made with the Borrower’s prior written consent (not to be
unreasonably withheld) or (y) a Default or an Event of Default has occurred and is continuing at
the time of such participation), and (iv) the Borrower, the Agents and the Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, and such Lender shall retain the sole right (which each Lender
agrees will not be limited by the terms of any participation agreement or other agreement with a
participant) to enforce the Loan Documents and to approve any amendment, modification or waiver of
any provision of the Loan Documents (other than, without the consent of the Participant,
amendments, modifications or waivers described in clauses (i), (ii), (iii) and (iv) of Section
9.08(c) that affect such Participant). To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 9.06 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.17 as though it were a Lender.




          (g) Any Lender, without the consent of or notice to the Borrower or the Administrative Agent,
may at any time pledge or assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or assignment to secure
obligations



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to a Federal Reserve Bank and this Section 9.04 shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto. In order to facilitate such a pledge or
assignment, the Borrower shall, at the request of the assigning Lender, duly execute and deliver to
the assigning Lender a promissory note or notes evidencing the Loans made to the Borrower by the
assigning Lender hereunder.




          (h) The Borrower shall not assign or delegate any of its rights or duties hereunder without
the prior written consent of the Administrative Agent and each Lender, and any attempted assignment
without such consent shall be null and void.




          SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay (i) all reasonable and documented out-of-pocket expenses
incurred by the Administrative Agent, the Collateral Agent, each of the Joint Lead Arrangers and
Bookrunners and their respective Affiliates, including the reasonable fees, charges and
disbursements of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Administrative Agent and
the Joint Lead Arrangers and Bookrunners (and appropriate foreign and local counsel in applicable
foreign and local jurisdictions, but limited to one local counsel in each such jurisdiction), in
connection with the syndication of the Loans and Commitments provided for herein, the preparation
and administration of this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated), and (ii) all reasonable and documented
out-of-pocket expenses incurred by any of the Joint
Lead Arrangers and Bookrunners, the Administrative Agent, the Collateral Agent or any Lender
in connection with the enforcement or protection of its rights in connection with this Agreement
(including its rights under this Section), the other Loan Documents or the Loans made, including
all such reasonable and documented out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans, and, in connection with any such
enforcement or protection, the reasonable and documented fees, charges and disbursements of any
other counsel for the Administrative Agent, the Collateral Agent, any of the Joint Lead Arrangers
and Bookrunners or any Lender; provided that in the absence of conflicts, reimbursement of
legal fees and expenses shall be limited to reasonable fees, charges and disbursements of one
counsel for the Administrative Agent, the Collateral Agent, the Joint Lead Arrangers and
Bookrunners and the Lenders (which counsel shall be designated by the Administrative Agent) (and
any appropriate foreign and local counsel in applicable foreign and local jurisdictions).




          (b) The Borrower agrees to indemnify the Administrative Agent, the Collateral Agent, the
Syndication Agent, the Documentation Agent, each of the Joint Lead Arrangers and Bookrunners, each
Lender, each Affiliate of any of the foregoing Persons and each of their respective Related Parties
(each such Person being called an “Indemnitee”) against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and out-of-pocket expenses,
including reasonable counsel fees, charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the execution, delivery
and enforcement of this Agreement or any other Loan Document or the Commitment Letter, Engagement
Letter or Fee Letter or any agreement or instrument contemplated thereby, the performance by the
parties hereto or thereto of their respective obligations thereunder, the Transactions or the other
transactions contemplated thereby, (ii) any claim, litigation, investigation or proceeding relating
to any of the foregoing, whether or not any Indemnitee is a party thereto, or (iii) any actual or
alleged presence or Release of Hazardous Materials at, on, under or from any property owned or
operated by the Borrower or any of the Subsidiaries, or any Environmental Liability or
Environmental Claim related in any way to the Borrower or the Subsidiaries; provided that
such indemnity shall not, as to any Indemnitee, be available solely to the extent of counsel fees,
charges and dis-



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bursements incurred by counsel to such Indemnitee in defending such Indemnitee
against the action described in the Complaint filed in the United States Bankruptcy Court for the
Southern District of New York In re: Solutia Inc., et al. Debtors. Solutia Inc., Plaintiff and
CGMI, GSCP, DBSI and Deutsche Bank Trust Company Americas, Defendants and any settlement related
thereto and all such fees, charges and disbursements shall be excluded in their entirety from this
indemnity; provided further that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or expenses (A) are
determined by a final judgment of a court of competent jurisdiction to have arisen by reason of the
Indemnitee’s gross negligence, bad faith or willful misconduct or (B) arise from any action solely
among Indemnitees, other than any such actions that arise from an act or an omission of the
Borrower or any Subsidiary (and provided that withstanding the foregoing provisions of this
clause (B), the Administrative Agent, acting in such capacity, shall in any event be indemnified
subject to the other limitations set forth in this Section); and provided, further,
that in the absence of conflicts, reimbursement of reasonable legal fees, charges and disbursements
in respect of any matter for which indemnification is sought shall be limited to reasonable fees,
charges and disbursements of one counsel for all such Indemnitees (which counsel shall be
designated by the Administrative Agent) (and any appropriate foreign and local counsel in
applicable foreign and local jurisdictions).




          (c) To the extent that the Borrower fails to promptly pay any amount to be paid by it to any
Agent, the Syndication Agent, the Documentation Agent or any of the Joint Lead Arrangers and
Bookrunners under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to such
Agent, the Syndication Agent, the Documentation Agent or such Joint Lead Arrangers and Bookrunners,
as the case may be, such Lender’s pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount (other than syndication
expenses); provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against the
applicable Agent, the Syndication Agent, the Documentation Agent or the applicable Joint Lead
Arranger and Bookrunner in its capacity as such. For purposes hereof, a Lender’s “pro rata share”
shall be determined based upon its share of the sum of the total outstanding Loans and unused
Commitments at the time.




          (d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, and no Indemnitee shall assert, and each Indemnitee hereby waives, any claim against the
Borrower or any Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as
a result of, this Agreement, any other Loan Document or any other agreement or instrument
contemplated hereby, the Transactions or any Loan or the use of the proceeds thereof;
provided that notwithstanding the foregoing, to the extent required by Section 9.05(b), the
Borrower shall be required to indemnify each Indemnitee for any special, indirect, consequential or
punitive damages of Persons other than any Indemnitee.




          (e) The provisions of this Section 9.05 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the expiration of the Commitments, the
invalidity or unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent or any Lender. All
amounts due under this Section 9.05 shall be payable on written demand (together with customary
backup documentation supporting such reimbursement request) therefor.




          SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and its
Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or de-



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mand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or its
Affiliates, in each case whether direct or indirect, absolute or contingent, matured or unmatured,
to or for the credit or the account of any Loan Party upon any amount becoming due and payable by
any Loan Party hereunder or under any other Loan Document (whether at stated maturity, by
acceleration or otherwise) against any amount held by such Lender or its Affiliates, irrespective
of whether or not such Lender or its Affiliates shall have made any demand under this Agreement or
such other Loan Document. In connection with exercising its rights pursuant to the previous
sentence, a Lender or its Affiliates may at any time use any Loan Party’s credit balances with the
Lender or its Affiliates to purchase at the Lender’s or its Affiliates’ applicable spot rate of
exchange any other currency or currencies which the Lender or its Affiliates considers necessary to
reduce or discharge any amount due by such Loan Party to the Lender or its Affiliates, and may
apply that currency or those currencies in or towards payment of those amounts. The rights of each
Lender or its Affiliates under this Section are in addition to other rights and remedies (including
other rights of setoff) which such Lender or its Affiliates may have. Each Lender or its
Affiliates agrees promptly to notify the Borrower and the Administrative Agent after making any
such setoff; provided that the failure to give such notice shall not affect the validity of
such setoff.




          SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER
LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.




          SECTION 9.08. Waivers; Amendment. (a) No failure or delay of any Agent or any Lender in exercising any power or right
hereunder or under any Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Agents and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document
or consent to any departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. Without limiting the generality
of the foregoing, the making of a Loan shall not be construed as a waiver of any Default or Event
of Default regardless of whether an Agent, any Lender may have had notice or knowledge of such
Default or Event of Default at the time. No notice or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or other circumstances.




          (b) Subject to Sections 9.08(c), 9.08(d), 9.08(f) and 9.08(g), no amendment, modification,
termination or waiver of any provision of any Loan Document, or consent to any departure by any
Loan Party therefrom, shall in any event be effective without the written concurrence of the
Requisite Lenders (or the Administrative Agent with the written consent of the Requisite Lenders).




          (c) Without the written consent of each Lender that would be directly adversely affected
thereby (whose consent shall be sufficient therefor without the consent of the Requisite Lenders),
no amendment, modification, termination, waiver or consent shall be effective if the effect thereof
would:





     (i) extend the scheduled final maturity of any Loan or Note;




     (ii) reduce or forgive the rate of interest on any Loan (other than any waiver of
any increase in the interest rate applicable to any Loan pursuant to Section 2.06(c));



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     (iii) extend the time for payment of any such interest;




     (iv) reduce or forgive the principal amount of any Loan or waive, reduce or
postpone any scheduled repayment pursuant to Section 2.04(c);




     (v) amend, modify, terminate or waive any provision of Section 9.08 (except for
technical amendments with respect to additional extensions of credit pursuant to this
Agreement consented to by the Requisite Lenders which afford the protections to such
additional extensions of credit of the type provided to the Loans on the Effective
Date);




     (vi) except as expressly provided in the Loan Documents, release all or
substantially all of the Collateral or all or substantially all of the Subsidiary
Guarantors from the Guarantee Agreement or the Non-U.S. Guarantee Agreements, as
applicable;




     (vii) consent to the assignment or transfer by any Loan Party of any of its rights
and obligations under any Loan Document; or




     (viii) amend the indemnification obligations of the Lenders set forth in Section
9.05(c) or amend Sections 2.02(c), 2.11(a) or 2.17 (only to the extent relating to pro
rata treatment of Lenders).



          (d) No amendment, modification, termination, waiver or consent with respect to any provision
of the Loan Documents, or consent to any departure by any Loan Party therefrom, shall:





     (i) increase any Commitment of any Lender over the amount thereof then in effect
without the consent of such Lender; provided no amendment, modification,
termination, waiver or consent with respect to any condition precedent, covenant,
Default or Event of Default shall constitute an increase in any Commitment of any
Lender;




     (ii) amend, modify, terminate or waive any provision of Article VIII as the same
applies to any Agent, or any other provision hereof as the same applies to the rights or
obligations of, or fees payable to, any Agent, in each case without the consent of such
Agent;




     (iii) amend, modify, terminate or waive any provision of any Loan Document
specifying the percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination to grant any consent thereunder without the written
consent of each Lender; or




     (iv) increase the maximum duration of Interest Periods hereunder without the
consent of all Lenders.



          (e) If, in connection with any proposed change, waiver, discharge or termination of or to any
of the provisions of this Agreement, the consent of the Requisite Lenders is obtained but the
consent of one or more of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right to either (i) replace such Non-Consenting Lender or Lenders (or, at
the option of the Borrower if the respective Lender’s consent is required with respect to less than
all Loans (or related Commitments), to replace only the Commitments and/or Loans of the respective
Non-Consenting Lender that gave rise to the need to obtain such Lender’s individual consent) with
one or more assignees pursuant to, and with the effect of an assignment under, Section 2.18 so long
as at the time of such re-



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placement, each such assignee consents to the proposed change, waiver,
discharge or termination or (ii) terminate such Non-Consenting Lender’s Commitment (if such
Lender’s consent is required as a result of its Commitment) and/or repay each of the outstanding
Loans of such Lender that gave rise to the need to obtain such Lender’s consent; provided
that, unless the Commitments that are terminated and Loans that are repaid pursuant to the
preceding clause (ii) are immediately replaced in full at such time through the addition of new
Lenders or the increase of the Commitments and/or outstanding Loans of existing Lenders (who in
each case must specifically consent thereto), then in the case of any action pursuant to the
preceding clause (ii), the Requisite Lenders (determined after giving effect to the proposed
action) shall specifically consent thereto.




          (f) Without the consent of any other Person, the Loan Parties and the Administrative Agent
and/or Collateral Agent may (in their respective sole discretion, or shall, to the extent required
by any Loan Document) enter into any amendment, modification or waiver of any Loan Document, or
enter into any new agreement or instrument, to effect the granting, perfection, protection,
expansion or enhancement of any security interest in any Collateral or additional property to become
Collateral for the benefit of the Secured Parties, or as required by local law to give effect to,
or protect any security interest for the benefit of the Secured Parties, in any property or so that
the security interests therein comply with applicable law. Notwithstanding anything to the
contrary contained in this Section 9.08, the Guarantee Agreement, the Non-U.S. Guarantee
Agreements, the Security Documents and any related documents executed by Non-U.S. Subsidiaries in
connection with this Agreement may be in a form reasonably determined by the Administrative Agent
and may, together with this Agreement, be amended and waived with the consent of the Administrative
Agent and the Collateral Agent at the request of the Borrower without the need to obtain the
consent of any other Lender if such amendment or waiver is delivered in order (i) to comply with
local Requirements of Law or advice of local counsel, (ii) to cure ambiguities or defects or (iii)
to cause such Guarantee Agreement, Non-U.S. Guarantee Agreement, Security Document or other
document to be consistent with this Agreement and the other Loan Documents.




          (g) Notwithstanding the foregoing, this Agreement and each Loan Document may be amended (or
amended and restated) with the written consent of the Requisite Lenders, the Administrative Agent
and the Borrower (a) to add one or more additional credit facilities to this Agreement and to
permit the extensions of credit from time to time outstanding thereunder and the accrued interest
and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan
Documents with the Obligations and (b) to include appropriately the Lenders holding such credit
facilities in any determination of the Requisite Lenders.




          (h) Further, notwithstanding anything to the contrary contained in Section 9.08, if the
Administrative Agent and the Borrower shall have jointly identified an obvious error or any error
or omission of a technical nature, in each case that is immaterial (as determined by the
Administrative Agent), in any provision of the Loan Documents, then the Administrative Agent and
the Borrower shall be permitted to amend such provision and such amendment shall become effective
without any further action or consent of any other party to any Loan Document if the same is not
objected to in writing by the Requisite Lenders within five Business Days following receipt of
notice thereof.




          SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate
applicable to any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively, the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan or participation in accordance with applicable
law, the rate of interest payable in respect of such Loan or participation hereunder, together with
all



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Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or participations or
periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been
received by such Lender.




          SECTION 9.10. Entire Agreement. This Agreement and the other Loan Documents constitute the entire contract between the
parties relative to the subject matter hereof. Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the other Loan Documents;
provided that any letter agreement relating to the subject matter hereof between or among the Borrower
and any of the Agents, the Joint Lead Arrangers and Bookrunners and the Lenders shall remain
effective in accordance with its terms. Nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any party other than the parties hereto and
thereto any rights, remedies, obligations or liabilities under or by reason of this Agreement or
the other Loan Documents.




          SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.




          SECTION 9.12. Severability. In the event any one or more of the provisions contained in this Agreement or in any other
Loan Document should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and therein shall not in
any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.




          SECTION 9.13. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original but all of which when taken
together shall constitute a single contract, and shall become effective as provided in Section
9.03. Delivery of an executed signature page to this Agreement by facsimile transmission or other
electronic image scan transmission (e.g., “PDF” or “tif” via e-mail) shall be as effective as
delivery of a manually signed counterpart of this Agreement.




          SECTION 9.14. Headings. Article and Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.




     SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive ju-



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risdiction of any New York State court or Federal court of
the United States of America for the Southern District of New York, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right
that the Administrative Agent, the Collateral Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents against the Borrower or
its properties in the courts of any jurisdiction.




          (b) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
or the other Loan Documents in any New York State or Federal court referred to in paragraph (a) of
this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.




          (c) Each party to this Agreement irrevocably consents to service of process by hand or
overnight courier service, or mailed by certified or registered mail. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to serve process in
any other manner permitted by law.




          SECTION 9.16. Confidentiality. Each of the Administrative Agent, the Collateral Agent and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that Information may be disclosed
(a) to its Related Parties (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory authority purporting to
have jurisdiction over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process (it being understood that, to the extent
permitted, the Administrative Agent, the Collateral Agent or such Lender, as the case may be, shall
provide the Borrower with prompt notice thereof to the extent permitted by law or such legal
process), (d) to any other party hereto, (e) in connection with (i) the exercise of any remedies
hereunder or under any other Loan Document, (ii) any action or proceeding relating to this
Agreement or any other Loan Document, (iii) the enforcement of rights under this Agreement or under
any other Loan Document or (iv) any litigation or proceeding to which the Administrative Agent, the
Collateral Agent or any Lender or any of its respective Affiliates may be a party;
provided, however, in each case in this clause (e), the applicable Agent or Lender
or their Affiliates, as the case may be, shall take reasonable steps to preserve the confidential
nature of the information, (f) subject to an agreement containing provisions substantially the same
as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement, (ii) any actual or
prospective direct or indirect party (or its managers, administrators, trustees, partners,
directors, officers, employees, agents, advisors and other representatives), surety, reinsurer,
guarantor or credit liquidity enhancer (or their advisors) to or in connection with any swap,
derivative or other similar transaction under which payments are to be made by reference to the
Obligations or to the Borrower and its obligations or to this Agreement or payments hereunder,
(iii) any rating agency when required by it, (iv) the CUSIP Service Bureau or any similar
organization, (g) in customary fashion to market data collectors, similar services providers to the
lending industry, and service



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providers to any of the Joint Lead Arrangers and Bookrunners, the Agents, the Syndication Agent, the Documentation Agent and the
Lenders in connection with the administration and management of this Agreement and the other Loan
Documents, (h) with the consent of the Borrower or (i) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent, the Collateral Agent any Lender or any of their respective Affiliates on
a nonconfidential basis from a source other than any Loan Party not in violation of any written
confidentiality agreement to the knowledge of such Agent, Lender or Affiliate. For purposes of
this Section, “Information” means all non-public information received from any Loan Party
or any of its respective Subsidiaries relating to any Loan Party or any of its respective
Subsidiaries or any of their respective businesses, other than any such information that is
available to the Administrative Agent, the Collateral Agent or any Lender on a nonconfidential
basis prior to disclosure by any Loan Party or any of its respective Subsidiaries. Any Person
required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has complied with
Requirements of Law or exercised commercially reasonable care.




          SECTION 9.17. Posting of Approved Electronic Communications. (a) Each of the Lenders and each Loan Party agree that the Administrative Agent may, but
shall not be obligated to, make the Approved Electronic Communications available to the Lenders by
posting such Approved Electronic Communications on IntraLinksTM or a substantially similar secured
electronic platform chosen by the Administrative Agent to be its electronic transmission system
(the “Approved Electronic Platform”).




          (c) Although the Approved Electronic Platform and its primary web portal are secured with
generally-applicable security procedures and policies implemented or modified by the Administrative
Agent from time to time (including, as of the Effective Date, a dual firewall and a User
ID/Password Authorization System) and the Approved Electronic Platform is secured through a
single-user-per-deal authorization method whereby each user may access the Approved Electronic
Platform only on a deal-by-deal basis, each of the Lenders and each Loan Party acknowledges and
agrees that the distribution of material through an electronic medium is not necessarily the most
secure method of communication and that there are confidentiality and other risks associated with
such distribution. In consideration for the convenience and other benefits afforded by such
distribution and for the other consideration provided hereunder, the receipt and sufficiency of
which is hereby acknowledged, each of the Lenders and each Loan Party hereby approves distribution
of the Approved Electronic Communications through the Approved Electronic Platform and understands
and assumes the risks of such distribution.




          (c) THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS ARE PROVIDED
“AS IS” AND “AS AVAILABLE”. NONE OF THE ADMINISTRATIVE AGENT NOR ANY OTHER MEMBER OF THE AGENT’S
GROUP WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED ELECTRONIC COMMUNICATIONS OR
THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS ANY LIABILITY FOR ERRORS OR OMISSIONS
IN THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OTHER MEMBER
OF THE AGENT’S GROUP IN CONNECTION WITH THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED
ELECTRONIC PLATFORM.




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          (d) Each of the Lenders and each Loan Party agree that the Administrative Agent may, but
(except as may be required by applicable law) shall not be obligated to, store the Approved
Electronic Communications on the Approved Electronic Platform in accordance with the Administrative
Agent’s generally-applicable document retention procedures and policies.




          SECTION 9.18. Treatment of Information. (a) Certain of the Lenders may enter into this Agreement and take or not take action
hereunder or under the other Loan Documents on the basis of information that does not contain
material non-public information with respect to any of the Loan Parties or their securities
(“Restricting Information”). Other Lenders may enter into this Agreement and take or not
take action hereunder or under the other Loan Documents on the basis of information that may
contain Restricting Information. Each Lender acknowledges that United States federal and state
securities laws prohibit any person from purchasing or selling securities on the basis of material,
non-public information concerning the such issuer of such securities or, subject to certain limited
exceptions, from communicating such information to any other Person. Neither the Administrative
Agent nor any of its Related Parties shall, by making any Communications (including Restricting
Information) available to a Lender, by participating in any conversations or other interactions
with a Lender or otherwise, make or be deemed to make any statement with regard to or otherwise
warrant that any such information or Communication does or does not contain Restricting Information
nor shall the Administrative Agent or any of its Related Parties be responsible or liable in any
way for any decision a Lender may make to limit or to not limit its access to Restricting
Information. In particular, none of the Administrative Agent nor any of its Related Parties (i)
shall have, and the Administrative Agent, on behalf of itself and each of its Related Parties,
hereby disclaims, any duty to ascertain or inquire as to whether or not a Lender has or has not
limited its access to Restricting Information, such Lender’s policies or procedures regarding the
safeguarding of material, nonpublic information or such Lender’s compliance with applicable laws
related thereto or (ii) shall have, or incur, any liability to any Loan Party or Lender or any of
their respective Related Parties arising out of or relating to the Administrative Agent or any of
its Related Parties providing or not providing Restricting Information to any Lender.




          (b) Each Loan Party agrees that (i) all Communications it provides to the Administrative Agent
intended for delivery to the Lenders whether by posting to the Approved Electronic Platform or
otherwise shall be clearly and conspicuously marked “PUBLIC” if such Communications do not contain
Restricting Information which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof, (ii) by marking Communications “PUBLIC,” each Loan Party
shall be deemed to have authorized the Administrative Agent and the Lenders to treat such
Communications as either publicly available information or not material information (although, in
this latter case, such Communications may contain sensitive business information and, therefore,
remain subject to the confidentiality undertakings of Section 9.16) with respect to such Loan Party
or its securities for purposes of United States Federal and state securities laws, (iii) all
Communications marked “PUBLIC” may be delivered to all Lenders and may be made available through a
portion of the Approved Electronic Platform designated “Public Side Information,” and (iv) the
Administrative Agent shall be entitled to treat any Communications that are not marked “PUBLIC” as
Restricting Information and may post such Communications to a portion of the Approved Electronic
Platform not designated “Public Side Information.” Neither the Administrative Agent nor any of its
Affiliates shall be responsible for any statement or other designation by an Loan Party regarding
whether a Communication contains or does not contain material non-public information with respect
to any of the Loan Parties or their securities nor shall the Administrative Agent or any of its
Affiliates incur any liability to any Loan Party, any Lender or any other Person for any action
taken by the Administrative Agent or any of its Affiliates based upon such statement or
designation, including any action as a result of which Restricting Information is provided to a Lender that
may decide not to take access to Restricting Information. Nothing in this Section 9.18 shall
modify or limit a



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Lender’s obligations under Section 9.16 with regard to Communications and the
maintenance of the confidentiality of or other treatment of Information.




          (c) Each Lender acknowledges that circumstances may arise that require it to refer to
Communications that might contain Restricting Information. Accordingly, each Lender agrees that it
will nominate at least one designee to receive Communications (including Restricting Information)
on its behalf and identify such designee (including such designee’s contact information) on such
Lender’s Administrative Questionnaire. Each Lender agrees to notify the Administrative Agent from
time to time of such Lender’s designee’s e-mail address to which notice of the availability of
Restricting Information may be sent by electronic transmission.




          (d) Each Lender acknowledges that Communications delivered hereunder and under the other Loan
Documents may contain Restricting Information and that such Communications are available to all
Lenders generally. Each Lender that elects not to take access to Restricting Information does so
voluntarily and, by such election, acknowledges and agrees that the Administrative Agent and other
Lenders may have access to Restricting Information that is not available to such electing Lender.
None of the Administrative Agent nor any Lender with access to Restricting Information shall have
any duty to disclose such Restricting Information to such electing Lender or to use such
Restricting Information on behalf of such electing Lender, and shall not be liable for the failure
to so disclose or use, such Restricting Information.




          (e) The provisions of the foregoing clauses of this Section 9.18 are designed to assist the
Administrative Agent, the Lenders and the Loan Parties, in complying with their respective
contractual obligations and applicable law in circumstances where certain Lenders express a desire
not to receive Restricting Information notwithstanding that certain Communications hereunder or
under the other Loan Documents or other information provided to the Lenders hereunder or thereunder
may contain Restricting Information. Neither the Administrative Agent nor any of its Related
Parties warrants or makes any other statement with respect to the adequacy of such provisions to
achieve such purpose nor does the Administrative Agent or any of its Related Parties warrant or
make any other statement to the effect that an Loan Party’s or Lender’s adherence to such
provisions will be sufficient to ensure compliance by such Loan Party or Lender with its
contractual obligations or its duties under applicable law in respect of Restricting Information
and each of the Lenders and each Loan Party assumes the risks associated therewith.




          SECTION 9.19. USA PATRIOT Act Notice. Each Lender that is subject to the PATRIOT Act and each Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower and the other Loan Parties that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “PATRIOT Act”), it is required to obtain, verify and record information that
identifies the Borrower and the other Loan Parties, which information includes the name, address
and tax identification number of the Borrower and the other Loan Parties and other information
regarding the Borrower and the other Loan Parties that will allow such Lender or Agent, as
applicable, to identify the Borrower and the other Loan Parties in accordance with the PATRIOT Act.
This notice is given in accordance with the requirements of the PATRIOT Act and is effective as to
the Lenders and the Agents.




          SECTION 9.20. Intercreditor Agreement. Notwithstanding anything to the contrary contained herein, each Lender acknowledges
that the Lien and security interest granted to the Collateral Agent pursuant to the Security
Documents and the exercise of any right or remedy by such Collateral Agent thereunder are subject
to the provisions of the Intercreditor Agreement. In the event of any conflict



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between the terms
of the Intercreditor Agreement and the Security Documents, the terms of the Intercreditor Agreement
shall govern and control.




          SECTION 9.21. No Fiduciary Duty. Each Agent, the Syndication Agent, the Documentation Agent, each Joint Lead Arranger
and Bookrunner and each Lender and their respective Affiliates (collectively, the “Lender
Parties”), may have economic interests that conflict with those of the Borrower and its
Subsidiaries. The Borrower agrees that nothing in the Loan Documents or otherwise will be deemed
to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between
the Lender Parties and the Borrower, its Subsidiaries, its stockholders or its other affiliates.
The Borrower acknowledges and agrees that (i) the transactions contemplated by the Loan Documents
are arm’s-length commercial transactions between the Lender Parties, on the one hand, and the
Borrower and its applicable Subsidiaries, on the other, (ii) in connection therewith and with the
process leading to such transaction each of the Lender Parties is acting solely as a principal and
not the agent or fiduciary of the Borrower or any of its Subsidiaries, or their respective
management, stockholders, creditors or any other Person, (iii) no Lender Party has assumed an
advisory or fiduciary responsibility in favor of the Borrower or any of its Subsidiaries with
respect to the transactions contemplated hereby or the process leading thereto (irrespective of
whether any Lender Party or any of its affiliates has advised or is currently advising the Borrower
or any of its Subsidiaries on other matters) or any other obligation to the Borrower except the
obligations expressly set forth in the Loan Documents and (iv) each of the Borrower and its
Subsidiaries have consulted their own legal and financial advisors to the extent they have deemed
appropriate. The Borrower further acknowledges and agrees that it and each of its Subsidiaries is
responsible for making its own independent judgment with respect to such transactions and the
process leading thereto. The Borrower agrees that it will not, and will cause each of its
Subsidiaries not to, claim that any Lender Party has rendered advisory services of any nature or
respect, or owes a fiduciary or similar duty to the Borrower or any of its Subsidiaries, in
connection with such transactions or the process leading thereto.




[Signature Pages Follow]




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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.




	 	 	 	 	 
	 	SOLUTIA INC.,

as Borrower

 	 
	 	By:  	/s/ James A. Tichenor
 	 
	 	 	Name:  	James A Tichenor 	 
	 	 	Title:  	Authorized Officer 	 
	 








S -1









 











	 	 	 	 	 
	 	CITIBANK, N.A.,

as Administrative Agent and Collateral Agent and

as a Lender

 	 
	 	By:  	/a/ Aaron Dannenberg
 	 
	 	 	Name:  	Aaron Dannenberg 	 
	 	 	Title:  	Vice President 	 



S -2









 






	 	 	 	 	 



	 	 	 	 	 
	 	CITIGROUP GLOBAL MARKETS INC.,

as a Joint Lead Arranger and Bookrunner

 	 
	 	By:  	/s/ Aaron Dannenberg
 	 
	 	 	Name:  	Aaron Dannenberg 	 
	 	 	Title:  	Vice President 	 



S -3









 






	 	 	 	 	 



	 	 	 	 	 
	 	GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Syndication Agent, as a Joint Lead Arranger and

Bookrunner and as a Lender

 	 
	 	By:  	/s/ Walter A. Jackson
 	 
	 	 	Name:  	Walter A. Jackson 	 
	 	 	Title:  	Authorized Signatory 	 



S -4









 






	 	 	 	 	 



	 	 	 	 	 
	 	DEUTSCHE BANK AG, NEW YORK BRANCH,

as Documentation Agent

 	 
	 	By:  	/s/ Mark B. Cohen
 	 
	 	 	Name:  	Mark B. Cohen 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                 /s/ Marguerite Sutton
 	 
	 	 	Name:  	Marguerite Sutton 	 
	 	 	Title:  	Director 	 
	 
	 	DEUTSCHE BANK SECURITIES INC.,

as a Joint Lead Arranger and Bookrunner

 	 
	 	By:  	/s/ Kevin Sherlock
 	 
	 	 	Name:  	Kevin Sherlock 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                 /s/ Martin Arzac
 	 
	 	 	Name:  	Martin Arzac 	 
	 	 	Title:  	Director 	 



S -5









 






	 	 	 	 	 



	 	 	 	 	 
	 	GERMAN AMERICAN CAPITAL CORPORATION

as Lender

 	 
	 	By:  	/s/ Mark B. Cohen
 	 
	 	 	Name:  	Mark B. Cohen 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                   /s/ Jeffrey Lehocky
 	 
	 	 	Name:  	Jeffrey Lehocky 	 
	 	 	Title:  	Managing Director 	 
	 




S -6