Document:

<PAGE>
                                                            Exhibit 10.1

                    VCM Settlement and Termination Agreement

         AGREEMENT made as of the 2nd day of February, 2002 by ODD JOB TRADING
CORP. (the "Mazel Member"), a New York corporation and GB RETAILERS, INC. (the
"VCD Member"), a Delaware corporation. The Mazel Member and the VCD Member are
referred to herein individually as a "PARTY" and together as the "PARTIES."

                                     RECITAL

         WHEREAS, the Parties entered into the VCM, Ltd. Operating Agreement
dated July 14, 1997 (the "Agreement") to operate certain operations (the "Joint
Venture");

         WHEREAS, the Mazel Member managed the day-to-day operations of the
Joint Venture pursuant to the terms of Section 5.3 of the Agreement (the
"Management Agreement");

         WHEREAS, there have been substantial ongoing disagreements among the
Parties with respect to the Joint Venture's operations, financial statements,
management fee and its calculations, and respective rights and obligations;

         WHEREAS, purportedly pursuant to Section 5.3.4 of the Agreement, the
VCD Member unilaterally gave notice to the Mazel Member of its election to
terminate and dissolve the Joint Venture in accordance with the provisions of
Section 7.2 of the Agreement; and

         WHEREAS, the Mazel Member disputed the authority of the VCD Member to
invoke Section 5.3.4 of the Agreement and the proposed terms for the termination
of the Joint Venture; and

         WHEREAS, negotiations between the Parties ensued concerning the
aforesaid notice and related and unrelated issues; and

         WHEREAS, the VCD Member desires to resolve, and the Mazel Member has
agreed to resolve, these issues by terminating the Mazel Member's Interest in
the Joint Venture upon the terms and conditions hereinafter stated, and

         WHEREAS, the VCD Member also desires to terminate the Management
Agreement, and the Mazel Member has agreed to such termination upon the terms
and conditions hereinafter stated.

         NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the VCD Member and the Mazel Member hereby
covenant and agree as follows:

         1. TERMINATION OF MEMBERSHIP RIGHTS. The Mazel Member does hereby agree
to extinguish and terminate, effective as of the close of business February 2,
2002 (the "Effective Date") all of the Mazel Member's Interest and other rights
in and to the Joint Venture (collectively, the "Membership Rights"). In
consideration of the foregoing termination of the Mazel Member's Membership
Rights hereunder, the VCD Member shall pay to the Mazel Member or its designee
eight million three hundred and seventy five thousand ($8,375,000) dollars by
wire transfer simultaneous with the execution and delivery of this Agreement.

         2. TERMINATION OF MANAGEMENT AGREEMENT. The Parties agree that the
Management Agreement is likewise deemed terminated as of the Effective Date. The
VCD Member agrees to pay to the Mazel Member or its designee Four Million
Eighty-two Thousand ($4,082,000) Dollars by wire transfer simultaneous with the
execution and delivery of this Agreement, representing the agreed upon amount
due to the Mazel Member under such Management Agreement for the period to and
including the Effective Date.

<PAGE>

         3. REPRESENTATIONS BY THE MAZEL MEMBER. The Mazel Member hereby
represents that: (i) it is the sole owner of its respective fifty (50%) percent
Membership Interest in the Joint Venture and has not previously transferred,
assigned or encumbered the same, and (ii) all of the authorizations and
approvals, as the case may be, necessary under its organizational documents and
under any other agreement or contract by which it may be bound, to enter into
this Agreement and to carry out the provisions hereof, have been received.
Notwithstanding anything herein to the contrary, the Mazel Member and Mazel
Stores, Inc. agree to indemnify and hold harmless the VCD Member and Value City
Department Stores, Inc. from and against any and all actions, proceedings,
suits, judgments, demands, penalties and/or other claims, liabilities or
obligations of whatever kind or nature, including reasonable attorneys' fees,
hereafter suffered or incurred by the VCD Member and Value City Department
Stores, Inc. arising out of or related to a breach of the representation
contained in this paragraph 3.

         4. REPRESENTATIONS BY VCD MEMBER. The VCD Member hereby represents
that: (i) it is the sole owner of its respective fifty (50%) percent Membership
Interest in the Joint Venture and has not previously transferred, assigned or
encumbered the same, and (ii) all of the authorizations and approvals, as the
case may be, necessary under its organizational documents and/or under any other
agreement or contract by which it may be bound, to enter into this Agreement and
to carry out the provisions hereof, have been received. Notwithstanding anything
herein to the contrary, the VCD Member and Value City Department Stores, Inc.
agree to indemnify and hold harmless the Mazel Member and Mazel Stores, Inc..
from and against any and all actions, proceedings, suits, judgments, demands,
penalties and/or other claims, liabilities or obligations of whatever kind or
nature, including reasonable attorneys' fees, hereafter suffered or incurred by
the Mazel Member and Mazel Stores, Inc. arising out of or related to a breach of
the representation contained in this paragraph 4.

         5. RELEASES. A. Subject only to the representations contained in
paragraph 3 above, the VCD Member and Value City Departments Stores, Inc.
hereby: (i) acknowledge and agree that they are accepting the termination of the
Membership Rights without recourse, warranty or other representation of any
kind, express or implied, and (ii) release and discharge the Mazel Member and
Mazel Stores, Inc. from any claim, liability or obligation relating to the Joint
Venture and/or with respect to the Management Agreement, whether known or
unknown, foreseen or unforeseen.

         B. Subject only to the representations contained in paragraph 4 above,
the Mazel Member and Mazel Stores, Inc. hereby release and discharge the VCD
Member and Value City Department Stores, Inc. from any claim, liability or
obligation relating to the Joint Venture and/or with respect to the Management
Agreement, whether known or unknown, foreseen or unforeseen

         6. CAPITALIZED TERMS. All capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Agreement.

         7. CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.

         8. NOTIFICATIONS. Any "notice" as defined in Section 9.2 of the
Agreement shall be given in the manner set forth therein.

         9. APPLICABLE LAW. All questions concerning the construction, validity
and interpretation of this Agreement and the performance of the obligations
imposed by this Agreement shall be governed by the internal law, not the law of
conflicts, of the State of Ohio.

         10. BINDING PROVISIONS. This Agreement is binding upon and inures to
the benefit of the Parties named herein and their respective heirs, executors,
administrators, personal and legal representatives, successors and permitted
assigns.

         11. COMPLETE AGREEMENT. This Agreement constitutes the complete and
exclusive statement

<PAGE>

of the agreement between the Member relating to the material herein. It
supersedes all prior written and oral statements, including any prior
representation, statement, condition or warranty. This Agreement may not be
amended without the written consent of all of the Members. Oral agreements which
purport to amend this Agreement shall not be enforceable.

         12. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of
which, when taken together, constitute one and the same document. The signature
of any Party to any counterpart shall be deemed a signature to, and may be
appended to, any other counterpart.

                  IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed by their duly authorized officers on the date first
above written.

ODD JOB TRADING CORP.

By: /s/ Peter J. Hayes
   --------------------------
Name: Peter J. Hayes
     ------------------------
Title:   CEO
      -----------------------

GB RETAILERS, INC.

By: /s/ James A. McGrady
   --------------------------
Name: James A. McGrady
     ------------------------
Title: CFO
      -----------------------

VALUE CITY DEPARTMENT STORES, INC. (As to the second sentence of Paragraph 4,
and paragraph 5.A. only)

By: /s/ James A. McGrady
   --------------------------
Name: James A. McGrady
     ------------------------
Title: CFO
      -----------------------

MAZEL STORES, INC. (As to the second sentence of Paragraph 3, and Paragraph 5.B.
only)

By: /s/ Peter J. Hayes
    -------------------------
Name:  Peter J. Hayes
     ------------------------
Title: CEO
      -----------------------Exhibit 4.1

                               30TH MARCH, 2001

                         CIBA SPECIALTY CHEMICALS PLC
                     CIBA SPECIALTY CHEMICALS CORPORATION
               CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
                                  AS ISSUERS

                                    - AND -

                     CIBA SPECIALTY CHEMICALS HOLDING INC.
                                 AS GUARANTOR

                                    - AND -

                  CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
                            DEUTSCHE BANK AG LONDON
                          GOLDMAN SACHS INTERNATIONAL
                          J.P. MORGAN SECURITIES LTD.
             UBS AG, ACTING THROUGH ITS BUSINESS GROUP UBS WARBURG
                                  AS DEALERS

                 ---------------------------------------------

                               PROGRAM AGREEMENT
                      IN RESPECT OF A U.S.$2,000,000,000
                         EURO MEDIUM TERM NOTE PROGRAM
                            (AMENDED AND RESTATED)

                 --------------------------------------------

                               [GRAPHIC OMITTED]
                                    London

<PAGE>

                                   CONTENTS

Clause                                                                      Page

1.   Definitions and Interpretation..........................................2
2.   Agreements to Issue and Purchase Notes..................................5
3.   Conditions of Issue; Updating...........................................6
4.   Representations and Warranties..........................................8
5.   Undertakings of the Issuers and the Guarantor..........................10
6.   Indemnity..............................................................14
7.   Authority to Distribute Documents......................................15
8.   Dealers' Undertakings..................................................16
9.   Fees, Expenses and Stamp Duties........................................16
10.  Termination of Appointment of Dealers..................................17
11.  Appointment of New Dealers.............................................18
12.  Increase in the Aggregate Nominal Amount of the Program................18
13.  Status of the Arrangers................................................19
14.  Counterparts...........................................................19
15.  Communications.........................................................19
16.  Benefit of Agreement...................................................19
17.  Currency Indemnity.....................................................20
18.  Calculation Agent......................................................20
19.  Stabilisation..........................................................21
20.  Contracts (Rights of Third Parties) Act 1999...........................21
21.  Governing Law and Jurisdiction.........................................21

Appendices

A.   Initial Documentation List.............................................22
B.   Selling Restrictions...................................................24
C.   Part I - Form of Dealer Accession Letter  - Program....................28
     Part II - Form of Confirmation Letter - Program........................30
     Part III - Form of Dealer Accession Letter - Note Issue................32
     Part IV - Form of  Confirmation Letter - Note Issue....................34
D.   Letter Regarding Increase in the Nominal Amount of the Program.........36
E.   Form of Subscription Agreement.........................................38
F.   Form of Deed of Covenant...............................................44

Signatories.................................................................52

<PAGE>

                               PROGRAM AGREEMENT

                                in respect of a

                         EURO MEDIUM TERM NOTE PROGRAM

THIS AGREEMENT is made on 30th March, 2001 BETWEEN:

(1)  CIBA SPECIALTY CHEMICALS CORPORATION of 560 White Plains Road, Tarrytown,
     New York 10591-9005, United States ("CSC US");

(2)  CIBA SPECIALTY CHEMICALS PLC of Hulley Road, Macclesfield, Cheshire SK10
     2NX, England ("CSC UK");

(3)  CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH of Chemiestrasse, D-
     68623 Lampertheim, Germany ("CSC GERMANY");

(4)  CIBA SPECIALTY CHEMICALS HOLDING INC. of Klybeckstrasse 141, CH-4002
     Basle, Switzerland (the "GUARANTOR");

(5)  CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED of One Cabot Square, London
     E14 4QJ;

(6)  DEUTSCHE BANK AG LONDON of Winchester House, 1 Great Winchester Street,
     EC2N 2DB;

(7)  GOLDMAN SACHS INTERNATIONAL of Peterborough Court, 133 Fleet Street,
     London EC4A 2BB;

(8)  J.P. MORGAN SECURITIES LTD. of 60 Victoria Embankment, London EC4Y 0JP;
     and

(9)  UBS AG, acting through its business group UBS Warburg ("UBS WARBURG") of
     1 Finsbury Avenue, London EC2M 2PP.

IT IS HEREBY AGREED as follows:

WHEREAS:

(A)  CSC US, CSC UK, CSC Germany, the Guarantor and the Dealers (as defined
     below) entered into an amended and restated program agreement dated 16th
     June, 2000 (the "PRINCIPAL PROGRAM AGREEMENT") in respect of a
     U.S.$2,000,000,000 Euro Medium Term Note Program of CSC US, CSC UK and
     CSC Germany unconditionally and irrevocably guaranteed by the Guarantor.

(B)  This Agreement amends and restates the Principal Program Agreement. Any
     Notes issued under the Program on or after the date hereof shall be
     issued pursuant to this Agreement. This does not affect any Notes issued
     under the Program prior to the date of this Agreement.

<PAGE>

                                      2

1.   DEFINITIONS AND INTERPRETATION

(1)  For the purposes of this Agreement, except where the context requires
     otherwise:

     "Agenty Agreement" means the amended and restated agreement of even date
     herewith between the Issuers, the Guarantor, the Agent (as defined below)
     and the other Paying Agents (as defined therein) under which the Agent is
     appointed as issuing agent, principal paying agent and agent bank for the
     purposes of the Program;

     "Agent" means The Chase Manhattan Bank as Agent under the Agency
     Agreement and any successor agent appointed by the Issuers and the
     Guarantor in accordance with the Agency Agreement;

     "Agreement Date" means, in respect of any Note, the date on which
     agreement is reached for the issue of such Note as contemplated in Clause
     2 which, in the case of Notes issued on a syndicated basis or otherwise
     in relation to which a Subscription Agreement is entered into, shall be
     the date upon which the relevant Subscription Agreement is signed by or
     on behalf of all the parties;

     "Arranger" means each of UBS Warburg and any company appointed to the
     position of arranger for the Program or in respect of a particular issue
     of Notes under the Program and references in this Agreement to the
     "Arrangers" shall be references to the relevant Arranger;

     "Clearstream, Luxembourg" means Clearstream Banking, societe anonyme;

     "Confirmation Letter" means:

     (a)  in respect of the appointment of a third party as a Dealer for the
          duration of the Program, the Confirmation Letter substantially in
          the form set out in Part II of Appendix C hereto; and

     (b)  in respect of the appointment of a third party as a Dealer for a
          particular issue of Notes under the Program, the Confirmation Letter
          substantially in the form set out in Part IV of Appendix C hereto;

     "Dealer" means each of Credit Suisse First Boston (Europe) Limited,
     Deutsche Bank AG London, Goldman Sachs International, J.P. Morgan
     Securities Ltd., UBS Warburg, and any New Dealer and excludes any entity
     whose appointment has been terminated pursuant to Clause 10 and notice of
     termination of whose appointment has been given to the Agent by the
     Issuers and the Guarantor, and references in this Agreement to the
     "relevant Dealer" shall, in relation to any Note, be references to the
     Dealer or Dealers with whom the relevant Issuer has agreed the issue and
     purchase of such Note;

     "Dealer Accession Letter" means:

     (a)  in respect of the appointment of a third party as a Dealer for the
          duration of the Program, the Dealer Accession Letter substantially
          in the form of Part I of Appendix C hereto; and

<PAGE>

                                      3

     (b)  in respect of the appointment of a third party as a Dealer for one
          or more particular issue(s) of Notes under the Program, the Dealer
          Accession Letter substantially in the form set out in Part III of
          Appendix C hereto;

     "Deed of Covenant" means the deed poll of even date herewith,
     substantially in the form set out in Appendix F hereto, executed as a
     deed by each Issuer in favour of certain accountholders with relevant
     clearing systems;

     "Deed of Guarantee" means the deed of guarantee of even date herewith
     executed by the Guarantor under which the Guarantor irrevocably
     guarantees the obligations of the Issuers in relation to the Program;

     "Euroclear" means Euroclear Bank S.A./N.V. as operator of the Euroclear
     System, or any successor to the business thereof;

     "FSA" means the Financial Services Act 1986;

     "Initial Documentation List" means the list of documents set out in
     Appendix A to this Agreement;

     "Issuer" means any of CSC US, CSC UK or CSC Germany in its capacity as an
     issuer of Notes, and references in this Agreement to the "relevant
     Issuer" shall, in relation to any issue of Notes, be references to the
     Issuer which is, or is intended to be, the issuer of such Notes;

     "Lead Manager" means, in relation to any Tranche of Notes, the person
     defined as the Lead Manager in the applicable Subscription Agreement or,
     when only one Dealer signs such Subscription Agreement, such Dealer;

     "Listing Agent" means, in relation to Notes which are, or are to be:

     (a)  listed on the Luxembourg Stock Exchange, Banque Internationale a
          Luxembourg S.A. or such other listing agent as the Issuers and the
          Guarantor may from time to time appoint for the purposes of liaising
          with the Luxembourg Stock Exchange; and

     (b)  listed on a Stock Exchange other than the Luxembourg Stock Exchange,
          such listing agent as the Issuers and the Guarantor may from time to
          time appoint for the purposes of liaising with such Stock Exchange;

     "Listing Rules" means, in the case of Notes which are, or are to be,
     listed on a Stock Exchange (including the Luxembourg Stock Exchange), the
     listing rules and regulations for the time being in force for such Stock
     Exchange;

     "Moody's" means Moody's Investors Service, Inc., or any successor to the
     rating agency business thereof;

     "New Dealer" means any entity appointed as an additional Dealer for the
     duration of the Program or for a particular issue of Notes in accordance
     with Clause 11;

<PAGE>

                                      4

     "Note" means a note issued or to be issued by an Issuer pursuant to this
     Agreement, which Note may be represented by a Global Note or be in
     definitive form;

     "Offering Circular" means, subject to Clause 5(2), the Offering Circular
     relating to the Program as revised, supplemented, amended or updated from
     time to time, including in relation to each Tranche of Notes, the Pricing
     Supplement relating to such Tranche and such other documents as are from
     time to time incorporated therein by reference except that for the
     purpose of Clause 4(2) in respect of the Agreement Date and the Issue
     Date, the Offering Circular means the Offering Circular as at the
     Agreement Date but not including any subsequent revision, supplement or
     amendment thereto;

     "Pricing Supplement" means the pricing supplement issued in relation to
     each Tranche of Notes (substantially in the form of Annexe C to the
     Procedures Memorandum) as a supplement to the Offering Circular and
     giving details of that Tranche;

     "Procedures Memorandum" means the Operating and Administrative Procedures
     Memorandum dated 30th as amended or varied from time to time (in respect
     of any Tranche) by agreement between the relevant Issuer, the Guarantor
     and the relevant Dealer with the approval in writing of the Agent;

     "Program" means the Euro Medium Term Note Program established by this
     Agreement;

     "Relevant Party" means the Arranger, each Dealer (and for the purposes of
     Clause 8(3) each Issuer and the Guarantor), each of their respective
     affiliates and each person who controls them (within the meaning of
     section 15 of the Securities Act or section 20 of the Exchange Act) and
     each of their respective directors, officers, employees and agents;

     "Securities Act" means the Securities Act of 1933, as amended, of the
     United States of America;

     "Standard & Poor's" means Standard & Poor's Ratings Service, a division
     of the McGraw-Hill Companies Inc., or any successor to the rating agency
     business thereof;

     "Stock Exchange" means the Luxembourg Stock Exchange or any other or
     further stock exchange(s) on which any Notes may from time to time be
     listed or admitted to trading, and references in this Agreement to the
     "relevant Stock Exchange" shall, in relation to any Notes, be references
     to the Stock Exchange on which such Notes are from time to time, or are
     intended to be, listed or admitted to trading; and

     "Subscription Agreement" means an agreement (by whatever name called) in
     or subsequently in the form set out in Appendix E hereto or in such other
     form as may be agreed in writing between the relevant Issuer, the
     Guarantor and the Lead Manager which agreement shall be supplemental to
     this Agreement.

(2)  Terms and expressions defined in the Agency Agreement, the Conditions and
     the Pricing Supplement applicable to any Notes and not otherwise defined
     in this Agreement shall have the same meanings in this Agreement, except
     where the context otherwise requires.

(3)  In this Agreement, clause headings are inserted for convenience and ease
     of reference only and shall not affect the interpretation of this
     Agreement.

<PAGE>

                                      5

(4)  All references in this Agreement to the provisions of any statute shall
     be deemed to be references to that statute as from time to time modified,
     extended, amended or re-enacted.

(5)  All references in this Agreement to an agreement, instrument or other
     document (including this Agreement, the Agency Agreement, the Deed of
     Covenant, the Deed of Guarantee, any Series of Notes and any Conditions
     appertaining thereto) shall be construed as a reference to that
     agreement, instrument or document as the same may be amended, modified,
     varied, supplemented or novated from time to time including, but without
     prejudice to the generality of the foregoing, this Agreement as
     supplemented by any Subscription Agreement.

(6)  Words denoting the singular number only shall include the plural number
     also and vice versa; words denoting the masculine gender only shall
     include the feminine gender also; and words denoting persons only shall
     include firms and corporations and vice versa.

(7)  Any reference herein to Euroclear and/or Clearstream, Luxembourg shall,
     wherever the context so permits, be deemed to include reference to any
     additional or alternative clearance system approved by the relevant
     Issuer, the Guarantor and the Agent.

2.      AGREEMENTS TO ISSUE AND PURCHASE NOTES

(1)  Subject to the terms and conditions of this Agreement, any Issuer and the
     Guarantor may from time to time agree with any Dealer to issue, and any
     Dealer may agree to purchase, Notes.

(2)  On each occasion upon which an Issuer, the Guarantor and any Dealer agree
     on the terms of the issue and purchase of one or more Notes by such
     Dealer:

     (a)  the relevant Issuer shall cause such Notes (which shall be initially
          represented by a Temporary Global Note) to be issued and delivered
          to a common depositary for Euroclear and Clearstream, Luxembourg so
          that the securities account(s) of such Dealer with Euroclear and/or
          with Clearstream, Luxembourg (as specified by such Dealer) is/are
          credited with such Notes on the agreed Issue Date, as described in
          the Procedures Memorandum; and

     (b)  the relevant Dealer shall, subject to such Notes being so credited,
          cause the net purchase moneys for such Notes to be paid in the
          relevant currency by transfer of funds to the relevant cash
          account(s) of the Agent with Euroclear and/or Clearstream,
          Luxembourg or (in the case of syndicated issues) the relevant
          account of the relevant Issuer so that such payment is credited to
          such account(s) for value on the agreed Issue Date, as described in
          the Procedures Memorandum.

(3)  Unless otherwise agreed, the procedures which the parties must apply for
     the purposes of subclause (2) are set out in the Procedures Memorandum.
     Unless otherwise agreed between the relevant Issuer and the relevant
     Dealers, where more than one Dealer has agreed with the relevant Issuer
     to purchase a particular issue of Notes pursuant to this Clause, the
     obligations of such Dealers so to purchase the Notes shall be joint and
     several.

(4)  Where the relevant Issuer and the Guarantor agree with two or more
     Dealers to issue, and such Dealers agree to purchase, Notes on a

<PAGE>

                                      6

     syndicated basis, the relevant Issuer and the Guarantor shall enter into
     a Subscription Agreement with such Dealers. The Issuer and the Guarantor
     may also enter into a Subscription Agreement with one Dealer only. For
     the avoidance of doubt, the Agreement Date in respect of any such issue
     shall be the date on which the Subscription Agreement is signed by or on
     behalf of all the parties to it.

(5)  Each issue of Notes denominated in a currency in respect of which
     particular laws, guidelines, regulations, restrictions or reporting
     requirements apply will only be issued in circumstances which comply with
     such laws, guidelines, regulations, restrictions or reporting
     requirements.

3.      CONDITIONS OF ISSUE; UPDATING

(1)  First issue

     The Arrangers shall circulate to each Dealer all of the documents and
     confirmations described in the Initial Documentation List immediately
     after those documents and confirmations have been given to the Arrangers
     by each Issuer and the Guarantor. Before any Issuer and the Guarantor
     reach their first agreement with any Dealer for the issue and purchase of
     Notes, that Dealer shall have received, and found satisfactory, in its
     reasonable opinion, all of the documents and confirmations described in
     the Initial Documentation List.

(2)  Each issue

     The obligations of a Dealer under any agreement for the issue and
     purchase of Notes made pursuant to Clause 2 are conditional upon:

     (a)  there having been, as at the proposed Issue Date, no adverse change
          in the condition (financial or otherwise) of the relevant Issuer and
          the Guarantor (as the case may be) which is material in the context
          of the issue and offering of the Notes from that set forth in the
          Offering Circular on the relevant Agreement Date, nor the occurrence
          of any event making untrue or incorrect to an extent which is
          material as aforesaid any of the warranties contained in Clause 4;

     (b)  there being no outstanding breach of any of the obligations of
          either the relevant Issuer or (as the case may be) the Guarantor
          under this Agreement, the Notes, the Agency Agreement, the Deed of
          Covenant or the Deed of Guarantee which has not been waived by the
          relevant Dealer on or prior to the proposed Issue Date;

     (c)  subject to Clause 12, the aggregate nominal amount of the Notes to
          be issued, when added to the aggregate nominal amount of all Notes
          outstanding (as defined in the Agency Agreement) on the proposed
          Issue Date, not exceeding U.S.$2,000,000,000 or its equivalent in
          other currencies as determined pursuant to subclause (5);

     (d)  in the case of Notes which are intended to be listed, the relevant
          Stock Exchange having agreed to list such Notes;

     (e)  no meeting of the holders of Notes (or any of them) issued by the
          relevant Issuer (to consider matters which might in the reasonable
          opinion of the relevant Dealer be considered to have a material
          adverse effect on the issue of the Notes) having been duly convened
          but not yet held or, if held but adjourned, the adjourned meeting

<PAGE>

                                      7

          having not been held and neither the relevant Issuer nor the
          Guarantor being aware of any circumstances which are likely to lead
          to the convening of such a meeting;

     (f)  there having been, between the Agreement Date and the Issue Date for
          such Notes, no such change in national or international financial,
          political or economic conditions or currency exchange rates or
          exchange controls as would, in the opinion of the relevant Dealer
          (after consultation with the relevant Issuer and the Guarantor if
          practicable), be likely to prejudice materially the success of the
          offer, sale or distribution by such Dealer of the Notes proposed to
          be issued;

     (g)  the forms of the Pricing Supplement, the Temporary Global Note, the
          Permanent Global Note and/or the Definitive Notes in relation to the
          relevant Tranche and the relevant settlement procedures, having been
          agreed by the relevant Issuer, the Guarantor, the relevant Dealer
          and the Agent;

     (h)  the relevant currency being generally accepted for settlement by
          Euroclear and Clearstream, Luxembourg; and

     (i)  any calculations or determinations which are required by the
          relevant Conditions prior to the Issue Date having been duly made.

(3)  Waiver

     Any Dealer, on behalf of itself only (or, in relation to a syndicated
     issue, the Lead Manager on behalf of itself and the other Managers) may
     by notice in writing to the relevant Issuer and the Guarantor waive any
     of the conditions precedent contained in subclauses (1) and (2) (save for
     the condition precedent contained in subclause (2)(c)) in so far as they
     relate to an issue of Notes to that Dealer.

(4)  Updating of legal opinions

     Before the first issue of Notes occurring after the end of each annual
     period commencing on the date hereof and on such other occasions as a
     Dealer so requests in relation either to any Issuer or the Guarantor or
     both (on the basis of reasonable grounds), the Issuers and/or the
     Guarantor will procure that a further legal opinion in such form and with
     such content as the Dealers may reasonably require is delivered, at the
     expense of the Issuers (as to which each of the Issuers shall have joint
     and several responsibility as between itself and the Guarantor to the
     Dealers). If at, or prior to, the time of any agreement to issue and
     purchase Notes under Clause 2 such request is given in writing with
     respect to the Notes to be issued, the receipt of such opinion in a form
     satisfactory to the relevant Dealer shall be a further condition
     precedent to the issue of those Notes to the relevant Dealer.

(5)  Determination of amounts outstanding

     For the purposes of subclause (2)(c):

     (a)  the U.S. dollar equivalent of Notes denominated in a currency other
          than U.S. dollars shall be determined, at the discretion of the
          Issuer, either as of the Agreement Date for such Notes or on the
          preceding day on which commercial banks and foreign exchange markets
          are open for general business in London, in each case on the basis

<PAGE>

                                      8

          of the spot rate for the sale of U.S. dollars against the purchase
          of the relevant currency in the London foreign exchange market
          quoted by any leading bank selected by the relevant Issuer or the
          Guarantor on the relevant day of calculation;

     (b)  the U.S. dollar equivalent of Dual Currency Notes and Indexed Notes
          shall be calculated in the manner specified above by reference to
          the original nominal amount of such Notes;

     (c)  the U.S. dollar equivalent of Zero Coupon Notes and other Notes
          issued at a discount or premium shall be calculated in the manner
          specified above by reference to the net proceeds received by the
          relevant Issuer for the particular issue; and

     (d)  the U.S. dollar equivalent of Partly Paid Notes shall be the nominal
          amount regardless of the amount of purchase moneys paid.

4.   REPRESENTATIONS AND WARRANTIES

(1)  As at the date of this Agreement each of the Issuers and the Guarantor
     (each Issuer severally as to itself and the Guarantor jointly and
     severally with the relevant Issuer as to the relevant Issuer and
     severally as to itself) warrant to and agree with the Dealers and each of
     them as follows:

     (a)  that the Offering Circular contains all information with regard to
          the Issuers, the Guarantor and the Notes which is material in the
          context of the Program and the issue and offering of Notes
          thereunder, that the information contained in the Offering Circular
          with respect to the Issuers, the Guarantor and the Notes is true and
          accurate in all material respects and is not misleading in any
          material respect, that the opinions and intentions expressed therein
          with respect to the Issuers, the Guarantor and the Notes are
          honestly held, that there are no other facts with respect to the
          Issuers, the Guarantor and the Notes the omission of which would
          make the Offering Circular as a whole or any of such information or
          the expression of any such opinions or intentions misleading in any
          material respect and that each of the Issuers and the Guarantor have
          made all reasonable enquiries to ascertain all facts material for
          the purposes aforesaid, provided that the warranty and agreement in
          this paragraph (a) shall not extend to information in the Offering
          Circular under the heading "Subscription and Sale";

     (b)  that, except as otherwise indicated in the Offering Circular, there
          has been no adverse change in the financial position or results of
          operations of the Guarantor and its consolidated subsidiaries taken
          as a whole which is material in the context of the issue and
          offering of any Notes to be issued under the Program since the date
          as at which the last published audited consolidated accounts of the
          Guarantor were prepared;

     (c)  that each of the Issuers and the Guarantor is duly incorporated and
          validly existing under the laws of its jurisdiction of incorporation
          and that the creation of Notes under the Program, their offering on
          the terms and subject to the conditions contained herein, the
          execution and issue by the relevant Issuer of, and compliance by the
          relevant Issuer with the terms of, the Notes, the Receipts and the
          Coupons and the execution and delivery by or on behalf of each

<PAGE>

                                      9

          Issuer of, and compliance by each Issuer with the terms of, this
          Agreement, the Deed of Covenant and the Agency Agreement and the
          execution and delivery by or on behalf of the Guarantor, and
          compliance by the Guarantor with the terms of, the Deed of
          Guarantee:

          (i)  are in accordance with the provisions of the laws of the
               jurisdiction of the relevant company and with the
               constitutional documents of the relevant company;

          (ii) do not infringe the terms of, or constitute a default under,
               any trust deed, agreement or other instrument or obligation to
               which any of the Issuers or the Guarantor is a party or by
               which it is bound; and

          (iii) have been duly authorised by each of the Issuers and/or the
               Guarantor (as the case may be),

          so that Notes issued under the Program, the Receipts, the Coupons
          and the aforesaid agreements constitute, or upon due authentication
          and issue or delivery will constitute, valid and legally binding
          obligations of the relevant Issuer and/or the Guarantor (as the case
          may be) in accordance with their respective terms (subject to
          applicable bankruptcy, reorganisation, insolvency, fraudulent
          transfer, moratorium and other similar laws affecting creditors'
          rights generally from time to time in effect, and to general
          principles of equity, regardless of whether considered in a
          proceeding in law or at equity);

     (d)  that no condition, omission, event or act has occurred which would
          (or, with the giving of notice and/or the lapse of time would)
          constitute an Event of Default;

     (e)  that, except as disclosed in the Offering Circular, none of the
          Issuers or the Guarantor is engaged (whether as defendant or
          otherwise) in, nor has any of the Issuers or the Guarantor knowledge
          of the existence of, or any threat of, any legal, arbitration,
          administrative or other proceedings the result of which might have a
          material adverse effect on the financial position or operations of
          any of the Issuers or the Guarantor in the context of the issue of
          Notes under the Program;

     (f)  that all consents, approvals, authorisations, orders and clearances
          of all regulatory authorities required by the Issuers or the
          Guarantor under the laws of Germany, the United States of America,
          Switzerland, the Grand Duchy of Luxembourg and the United Kingdom
          (as the case may be) for or in connection with the creation and
          offering of Notes under the Program, the execution and issue of, and
          compliance by each Issuer and the Guarantor with the terms of, Notes
          issued under the Program (including any Global Note), the Receipts
          and the Coupons and the execution and delivery of, and compliance
          with the terms of, this Agreement, the Agency Agreement, the Deed of
          Covenant and the Deed of Guarantee have been obtained and are in
          full force and effect and that the Issuers and the Guarantor have
          complied with all legal and other requirements necessary to ensure
          that, upon due authentication and issue in the manner aforesaid,
          Notes issued under the Program, the Receipts and the Coupons will
          represent valid and legally binding obligations of the relevant
          Issuer and the Guarantor, payable (as regards the Notes, any Global
          Note, the Receipts and the Coupons) in accordance with their terms,
          that this Agreement, the Agency Agreement, the Deed of Covenant and

<PAGE>

                                      10

          the Deed of Guarantee constitute valid and legally binding
          obligations of the Issuers and/or the Guarantor (as the case may be)
          in accordance with their respective terms (subject to applicable
          bankruptcy, reorganisation, insolvency, fraudulent transfer,
          moratorium and other similar laws affecting creditors' rights
          generally from time to time in effect, and to general principles of
          equity, regardless of whether considered in a proceeding in law or
          at equity) and that on issuance, due payment of the principal and
          interest (including any additional amounts payable under the
          Conditions of the Notes) in respect of Notes issued under the
          Program and compliance by the Issuers and/or the Guarantor with
          their terms and with the terms of this Agreement, the Agency
          Agreement, the Deed of Covenant and the Deed of Guarantee will not
          infringe any existing such laws or the terms of any such consent,
          approval, authorisation, order or clearance;

     (g)  that the net proceeds from the issue of the Notes will be used
          outside Switzerland; and

     (h)  that none of the Issuers, the Guarantor nor any affiliate (as
          defined in Rule 405 under the Securities Act) nor any persons (other
          than the Dealers, any of their respective affiliates or any person
          acting on behalf of any of the foregoing) acting on behalf of any of
          them has engaged or will engage in any directed selling efforts (as
          defined in Regulation S under the Securities Act) with respect to
          the Notes, and the Issuers, the Guarantor and any affiliate and all
          persons (other than the Dealers, any of their respective affiliates
          or any person acting on behalf of any of the foregoing) acting on
          behalf of any of them with respect to the Notes have complied and
          will comply with the offering restrictions requirements of
          Regulation S under the Securities Act with respect thereto.

(2)  With regard to each issue of Notes under the Program, the relevant Issuer
     and the Guarantor shall be deemed to repeat the warranties and agreements
     contained in subclause (1) as at the Agreement Date for such Notes (any
     agreement on such Agreement Date being deemed to have been made on the
     basis of, and in reliance on, such warranties and agreements) and as at
     the Issue Date of such Notes.

(3)  The Issuers and the Guarantor shall be deemed to repeat the
     representations and warranties contained in subclause (1)(a) on each date
     on which the Offering Circular is revised, supplemented or amended. The
     Issuers and the Guarantor shall be deemed to repeat the representations
     and warranties contained in subclause (1) on each date on which the
     aggregate nominal amount of the Program is increased in accordance with
     Clause 12.

(4)  The warranties and agreements contained in this Clause 4 shall continue
     in full force and effect notwithstanding any investigation by or on
     behalf of the Dealers or completion of the subscription and issue of any
     Notes.

5.   UNDERTAKINGS OF THE ISSUERS AND THE GUARANTOR

(1)  Notification of material developments

     Each Issuer and the Guarantor shall, prior to the time of an agreement
     under Clause 2 (or, if such party becomes aware of the occurrence thereof
     after such time but prior to the completion of the distribution by the

<PAGE>

                                      11

     Dealers of the relevant Notes, promptly upon becoming aware of the
     occurrence thereof), notify each Dealer of:

     (a)  any Event of Default or any condition, event or act in relation to
          itself of which it is aware which, with the giving of notice and/or
          the lapse of time (after the issue of any Notes) would constitute an
          Event of Default or any breach of the representations and warranties
          or undertakings contained in this Agreement, the Agency Agreement,
          the Deed of Covenant, the Deed of Guarantee or any of them; and

     (b)  any development affecting such Issuer or the Guarantor or their
          respective businesses of which it is aware which, in the reasonable
          opinion of such Issuer or the Guarantor (as the case may be), is
          material in the context of the Program or any issue of Notes
          thereunder.

     If, following the time of an agreement under Clause 2 and before the
     issue of the relevant Notes, the relevant Issuer or the Guarantor becomes
     aware that the conditions specified in Clause 3(2) will not be satisfied
     in relation to that issue, the relevant Issuer or the Guarantor (if
     applicable), as the case may be, shall forthwith notify the relevant
     Dealer to that effect giving full details thereof. In such circumstances,
     the relevant Dealer shall be entitled (but not bound) by written notice
     to the relevant Issuer and the Guarantor to be released and discharged
     from its obligations under the agreement reached under Clause 2. Without
     prejudice to the generality of the foregoing, each Issuer and the
     Guarantor shall from time to time promptly furnish to each Dealer such
     information relating to such Issuer and/or the Guarantor (as the case may
     be) as such Dealer may reasonably request, provided that such information
     is relevant in the context of the Program or an issue of Notes
     thereunder.

(2)  UPDATING OF OFFERING CIRCULAR

     Following the publication of the Guarantor's audited financial
     information for the year ended 31st December, 2001, and at the end of
     each annual period thereafter and in the event of a change in the
     condition of any or all of the Issuers or the Guarantor which is material
     in the context of the Program or the issue of the Notes thereunder, the
     Issuers and the Guarantor shall update or amend the Offering Circular
     (following consultation with the Arrangers on behalf of the Dealers) by
     the publication of a supplement thereto, in a form approved by the
     Dealers, in the light of such change in condition. The Offering Circular
     shall, as specified therein, be deemed to incorporate by reference
     therein the most recently published annual accounts (if any) of each
     Issuer and the Guarantor and the most recently published annual report of
     the Guarantor from time to time. Upon any new financial statements being
     incorporated in the Offering Circular as aforesaid or upon the
     publication of a revised Offering Circular or a supplement to the
     Offering Circular, the Issuers or the Guarantor (as the case may be)
     shall promptly supply to each Dealer and the Agent such number of copies
     of such financial statements, revised Offering Circular or supplement as
     each Dealer or the Agent (as the case may be) may reasonably request.
     Until a Dealer receives such financial statements, revised Offering
     Circular or supplement, the definition of "Offering Circular" in Clause
     1(1) shall, in relation to such Dealer, mean the Offering Circular prior
     to the publication of such financial statements, revised Offering
     Circular or supplement.

<PAGE>

                                      12

(3)  LISTING

     The Issuers and the Guarantor shall cause an initial application to be
     made for Notes issued under the Program to be listed on the Luxembourg
     Stock Exchange or on such other Stock Exchange as the Issuers, the
     Guarantor and the Arrangers may agree. In connection with such
     application in respect of any Series of Notes which is intended to be so
     listed, the relevant Issuer and the Guarantor (if applicable) shall
     endeavour to obtain the listing as promptly as reasonably practicable and
     the relevant Issuer and the Guarantor (if applicable) shall make
     reasonable endeavours to furnish any and all documents, instruments,
     information and undertakings that may be necessary or advisable in order
     to obtain and maintain the listing. If, after the preparation of the
     Offering Circular for submission to the relevant Stock Exchange and
     before whichever is the later of the Issue Date of any Notes and the date
     on which listing becomes effective:

     (a)  there is a significant change which is material in the context of
          the Notes affecting any matter contained in the Offering Circular
          whose inclusion was required by the relevant Stock Exchange; or

     (b)  a significant new matter arises which is material in the context of
          the Notes and the inclusion of information in respect of which would
          have been so required if it had arisen when the Offering Circular
          was prepared,

     the relevant Issuer and the Guarantor shall give to the Listing Agent and
     to each Dealer full information about the change or matter and shall
     publish such supplementary listing particulars (in a form approved by the
     Listing Agent) as may be required by the relevant Stock Exchange, and
     shall otherwise comply with the Listing Rules in that regard.

     Each Issuer and the Guarantor shall comply with any undertakings given by
     it from time to time to the relevant Stock Exchange(s) in connection with
     any Notes listed on such Stock Exchange(s) or the listing thereof and,
     without prejudice to the generality of the foregoing, shall furnish or
     procure to be furnished to the relevant Stock Exchange(s) all such
     information as the relevant Stock Exchange(s) may require in connection
     with the listing on such Stock Exchange(s) of any Notes.

     If any Notes cease to be listed on the relevant Stock Exchange, the
     relevant Issuer and the Guarantor shall endeavour promptly to list such
     Notes on a stock exchange to be agreed between the Issuers, the Guarantor
     and the relevant Dealers.

(4)  AGENCY AGREEMENT, DEED OF COVENANT AND DEED OF GUARANTEE

     Each Issuer and the Guarantor undertakes that it will not:

     (a)  without prior consultation with the Dealers terminate the Agency
          Agreement, the Deed of Covenant or the Deed of Guarantee or effect
          or permit to become effective any amendment to the Agency Agreement,
          the Deed of Covenant or the Deed of Guarantee which, in the case of
          an amendment, would or might adversely affect the interests of any
          Dealer or of any holder of Notes issued before the date of such
          amendment; or

     (b)  without prior consultation with the Dealers appoint a different
          Agent or paying agent(s) under the Agency Agreement,

<PAGE>

                                      13

     and each Issuer and the Guarantor will promptly notify each of the
     Dealers of any termination of, or amendment to, the Agency Agreement, the
     Deed of Covenant or the Deed of Guarantee and of any change in the Agent
     or paying agent(s) under the Agency Agreement.

(5)  LAWFUL COMPLIANCE

     Each Issuer and the Guarantor will at all times ensure that all necessary
     action is taken and all necessary conditions are fulfilled (including,
     without limitation, the obtaining of all necessary consents) so that it
     may lawfully comply with its obligations under the Notes, this Agreement,
     the Agency Agreement, the Deed of Covenant and the Deed of Guarantee and,
     further, so that it may comply with any applicable laws, regulations and
     guidance from time to time promulgated by any governmental and regulatory
     authorities relevant in the context of the issue of Notes under the
     Program.

(6)  AUTHORISED REPRESENTATIVE

     Each Issuer and the Guarantor will notify the Dealers immediately in
     writing if any of the persons named in the list referred to in paragraph
     3 of the Initial Documentation List ceases to be authorised to take
     action on behalf of such Issuer and the Guarantor or if any additional
     person becomes so authorised together, in the case of an additional
     authorised person, with evidence satisfactory to the Dealers that such
     person has been so authorised.

(7)  AUDITORS' COMFORT LETTERS

     Each Issuer and the Guarantor will at the time of the preparation of the
     initial Offering Circular and thereafter upon each occasion when the same
     may be amended or updated, whether by means of information incorporated
     by reference or otherwise (insofar as such amendment or up-dating
     concerns or contains financial information about any of the Issuers or
     the Guarantor), at the expense of the Issuers and the Guarantor (as to
     which each of the Issuers will have joint and several responsibility as
     between itself and the Guarantor) and at other times whenever so
     requested by the Dealers or any of them (on the basis of reasonable
     grounds) deliver to the relevant Dealer a comfort letter or comfort
     letters from independent auditors of the Issuers (or any of them) and the
     Guarantor in such form and with such content as the relevant Dealer may
     reasonably request.

(8)  NO OTHER ISSUES

     During the period commencing on an Agreement Date in respect of any Notes
     and ending on the Issue Date with respect to those Notes, none of the
     Issuers or the Guarantor will, without prior consultation with the
     relevant Dealer, issue or agree to issue any other listed notes, bonds or
     other securities of whatsoever nature (other than Notes to be issued
     under the Program) where such notes, bonds or other securities would have
     the same maturity and currency as the Notes to be issued on the relevant
     Issue Date.

(9)  INFORMATION ON NOTEHOLDERS' MEETINGS

     Each Issuer or the Guarantor will, at the same time as it is despatched,
     furnish the Dealers with a copy of every notice of a meeting of the
     holders of the Notes (or any of them) which is despatched at the

<PAGE>

                                      14

     instigation of the relevant Issuer or the Guarantor (as the case may be)
     and will notify the Dealers immediately after it becomes aware that a
     meeting of the holders of the Notes (or any of them) has been convened by
     holders of the Notes.

(10) RATING

     Each Issuer (failing whom the Guarantor) undertakes promptly to notify
     the Dealers of any change in the rating given by Standard & Poor's,
     Moody's or such other rating agency as notified to the Dealers for any of
     the Notes to be issued under the Program by it, or upon it becoming aware
     that such rating is listed on 'Creditwatch' or other similar publication
     of formal review by the relevant rating agency.

6.   INDEMNITY

(1)  Without prejudice to the other rights or remedies of the Dealers, each
     Issuer (severally as to itself) and the Guarantor (jointly and severally
     with the relevant Issuer and severally as to itself) undertakes to the
     Arranger and each Dealer that if that Arranger or Dealer or any Relevant
     Party relating to that Arranger or Dealer incurs any liability, damages,
     cost, loss or expense (including, without limitation, legal fees, costs
     and expenses) (a "Loss") arising out of, in connection with, or based on:

     (a)  any failure by the relevant Issuer to issue on the agreed Issue Date
          any Notes which a Dealer has agreed to purchase (unless such failure
          is as a result of the failure by the relevant Dealer to pay the
          aggregate purchase price for such Notes); or

     (b)  any actual or alleged breach of the representations, warranties and
          undertakings contained in, or made or deemed to be made by the
          relevant Issuer and/or the Guarantor under, this Agreement (any such
          allegation being made by a person other than a Relevant Party); or

     (c)  any untrue or misleading (or allegedly untrue or misleading)
          statement, which is material (or allegedly material) in the context
          of the Program and the issue and offering of Notes by such Issuer
          thereunder, in, or any material omission (or alleged omission) from,
          the Offering Circular or any part thereof (any such allegation being
          made by a person other than a Relevant Party).

     the relevant Issuer or, as the case may be, the Guarantor shall (subject
     as provided in subclause (2)) pay to that Arranger or Dealer on demand an
     amount equal to such Loss. No Arranger or Dealer shall have any duty or
     obligation, whether as fiduciary or trustee for any Relevant Party or
     otherwise, to recover any such payment or to account to any other person
     for any amounts paid to it under this Clause 6(1).

(2)  If any action, proceeding, claim or demand shall be brought or asserted
     against any Relevant Party in respect of which an indemnity is to be
     sought against another party under Clause 6(1) (the "Indemnifying
     Person"), the Relevant Party shall promptly notify the Indemnifying
     Person in writing, and the Indemnifying Person shall have the option in
     the name of the Relevant Party to assume the defence thereof, including
     the employment of legal advisers approved by the Relevant Party (which
     approval shall not be unreasonably withheld or delayed) subject to the
     payment by the Indemnifying Person of all fees and expenses relating
     thereto provided that such legal advisers shall not, save with the
     consent of the Relevant Party (which consent shall not be unreasonably
     withheld or delayed), also be legal advisers to the Indemnifying Person

<PAGE>

                                      15

     and provided further that if the defendants in any such action,
     proceeding, claim or demand include the Relevant Party and the Relevant
     Party shall have reasonably concluded that there may be legal defences
     available to the Relevant Party which are different from or additional to
     those available to the Indemnifying Person and in the event that the
     Indemnifying Person does not wish to assume, or is prevented from
     assuming, such different or additional legal defences on behalf of the
     Relevant Party, the Relevant Party shall have the right, at the expense
     of the Indemnifying Person, to select separate legal advisers to assume
     such legal defences and otherwise to participate in the defence of such
     action, proceeding, claim or demand on behalf of the Relevant Party.

     Upon receipt of notice from the Indemnifying Person of its election so to
     assume the defence of any such action, proceeding, claim or demand and
     approval by the Relevant Party as aforesaid of legal advisers, the
     Indemnifying Person will not be liable to any Relevant Party for any fees
     or expenses subsequently incurred by such Relevant Party in connection
     with the defence thereof unless:

     (i)  the Relevant Party shall have employed legal advisers in connection
          with the assumption of legal defences in accordance with the proviso
          to the preceding paragraph; or

     (ii) the Indemnifying Person shall not have employed legal advisers, or
          taken other measures, approved by or on behalf of the Relevant Party
          to represent such Relevant Party within a reasonable time after
          notice has been received by the Indemnifying Person of commencement
          of the action or proceedings or the making of any claim or demand;
          or

    (iii) the Indemnifying Person has authorised the employment of separate
          legal advisers by the Indemnifying Person,

     in which case the Indemnifying Person will reimburse the Relevant Party
     all such reasonable fees and expenses.

     Each Relevant Party undertakes not to compromise or settle any such
     action, proceedings, claim or demand effected without the written consent
     of the Indemnifying Person. Each Indemnifying Person undertakes not to
     compromise or settle any such action, proceedings, claims or demands
     effected without the written consent of the Relevant Party (consent is
     not to be unreasonably withheld or delayed). If any such action,
     proceeding, claim or demand shall be settled with the authority and
     written consent of the Indemnifying Person or if there be a final
     judgment for the plaintiff in relation thereto in respect of which the
     Relevant Party is entitled to indemnification hereunder, the Indemnifying
     Person agrees to indemnify and hold harmless the Relevant Party from and
     against any loss or liability by reason of such settlement or judgment
     (other than any fees and expenses incurred in circumstances where the
     Indemnifying Person is not to be liable therefor under the preceding
     paragraph).

7.   AUTHORITY TO DISTRIBUTE DOCUMENTS

     Subject to Clause 8 below, each Issuer and the Guarantor hereby
     authorises each of the Dealers on behalf of each Issuer and the Guarantor
     to provide copies of the Offering Circular and such additional written
     information as the relevant Issuer or the Guarantor shall, in writing,

<PAGE>

                                      16

     provide to and authorise the Dealers so to use to actual and potential
     purchasers of Notes.

8.   DEALERS' UNDERTAKINGS

(1)  Each Dealer agrees to comply with the restrictions and agreements set out
     in Appendix B hereto.

(2)  Each Dealer acknowledges that:

     (i)  none of the Issuers nor the Guarantor has authorised it to give any
          information or make any representation in connection with any
          offering, issue, subscription or sale of any Notes other than those
          contained in the Offering Circular or the information approved in
          writing and provided by such Issuer or the Guarantor pursuant to
          Clause 7;

     (ii) it will not circulate any version of the Offering Circular other
          than the latest version of the Offering Circular published by such
          Issuer and made available to such Dealer from time to time; and

    (iii) it shall promptly cease use or distribution of the Offering
          Circular or any additional written information provided for in
          Clause 7 upon receipt of notice from any Issuer or the Guarantor
          that the Offering Circular or such information requires updating or
          correction.

(3)  Each Dealer undertakes with each of the Issuers, the Guarantor and the
     other Dealers to indemnify, defend and hold harmless the Relevant Party
     against any losses, liabilities, claims, charges, actions and demands,
     and any reasonable out-of-pocket costs and expenses which the Relevant
     Party may incur or which may be made against the Relevant Party arising
     out of, or in connection with:

     (a)  the making by such Dealer of any unauthorised representation or the
          giving by it of any information which is not contained in the
          Offering Circular or otherwise authorised in accordance with Clause
          7; or

     (b)  any failure by such Dealer to observe any of the restrictions or
          agreements contained in Appendix B hereto.

(4)  If any claim, demand or action is brought against any such Relevant Party
     in respect of which indemnity may be sought from a Dealer pursuant to
     Clause 8(3), the provisions of Clause 6(2) shall apply, mutatis mutandis,
     in relation thereto.

9.   FEES, EXPENSES AND STAMP DUTIES

(1)  The Issuers and the Guarantor jointly and severally undertake that they
     shall:

     (a)  pay to each Dealer all commissions from time to time agreed in
          connection with the sale of any Notes to that Dealer (and any value
          added or other similar tax thereon); and

<PAGE>

                                      17

     (b)  pay (together with any value added tax or other similar tax
          thereon):

          (i)  the fees and expenses of their legal advisers and auditors; and

          (ii) the cost of listing and maintaining the listing of any Notes to
               be issued under the Program which are to be listed on a Stock
               Exchange;

(2)  The Issuers and the Guarantor jointly and severally undertake that they
     shall:

     (a)  pay (together with any value added tax or other similar tax
          thereon):

          (i)  the fees and expenses payable to the Agent and any paying
               agents;

          (ii) all expenses (other than those of the Agent, any paying agent
               or the Dealers) in connection with the issue, authentication,
               packaging and initial delivery of Notes and the preparation of
               Global Notes, this Agreement, the Agency Agreement, the Deed of
               Guarantee and the preparation and printing of Notes, the
               Offering Circular and any amendments or supplements thereto
               (including the updating of any legal opinions issued pursuant
               to Clause 3(4) and of any auditors' comfort letters issued
               pursuant to Clause 5(7)); and

         (iii) the cost of any publicity agreed in writing by any Issuer or
               the Guarantor in connection with the Program or any issue of
               any Notes;

     (b)  pay to UBS Warburg such amount as is separately agreed in relation
          to the fees and disbursements of the legal advisers appointed to
          represent the Dealers (including any value added tax or other
          similar tax thereon) in connection with the negotiation,
          preparation, execution and delivery of this Agreement, the Agency
          Agreement, the Deed of Covenant, the Deed of Guarantee and any
          documents referred to in any of them and any other documents
          required in connection with the creation of the Program; and

     (c)  pay promptly, and in any event before any penalty becomes payable,
          any stamp, documentary, registration or similar duty or tax
          (including any stamp duty reserve tax) payable in Germany, the
          United States of America, the United Kingdom, Switzerland or the
          Grand Duchy of Luxembourg in connection with the entry into,
          performance, enforcement or admissibility in evidence of this
          Agreement, any communication pursuant hereto, the Agency Agreement,
          the Deed of Covenant, the Deed of Guarantee or any Note and shall
          indemnify each Dealer against any liability with respect to or
          resulting from any delay in paying or omission to pay any such duty
          or tax.

10.  TERMINATION OF APPOINTMENT OF DEALERS

     The Issuers, the Guarantor or (as to itself) a Dealer may terminate the
     arrangements described in this Agreement by giving not less than 30 days'
     written notice to the other parties hereto. The Issuers or the Guarantor
     may terminate the appointment of a Dealer or Dealers by giving not less
     than 30 days' written notice to such Dealer or Dealers (with a copy
     promptly thereafter to all the other Dealers and the Agent). Termination
     shall not affect any rights or obligations (including but not limited to

<PAGE>

                                      18

     those arising under Clause 6, 8 or 9) which have accrued at the time of
     termination or which accrue thereafter in relation to any act or omission
     or alleged act or omission which occurred prior to such time.

11.  APPOINTMENT OF NEW DEALERS

(1)  Nothing in this Agreement shall prevent the Issuers or the Guarantor from
     appointing one or more New Dealers for the duration of the Program or,
     with regard to a particular issue of Notes, the relevant Issuer and the
     Guarantor (if applicable) from appointing one or more New Dealers for the
     purposes of that issue, in either case upon the terms of this Agreement
     and provided that, unless such appointment is effected pursuant to a
     Subscription Agreement:

     (a)  any New Dealer shall have first delivered to the Issuers and the
          Guarantor a Dealer Accession Letter; and

     (b)  the Issuers and the Guarantor shall have delivered to such New
          Dealer a Confirmation Letter.

     Upon receipt of the relevant Confirmation Letter or execution of the
     relevant Subscription Agreement, as the case may be, each such New Dealer
     shall, subject to the terms of the relevant Dealer Accession Letter and
     the relevant Confirmation Letter or the relevant Subscription Agreement,
     as the case may be, become a party to this Agreement, vested with all
     authority, rights, powers, duties and obligations of a Dealer as if
     originally named as a Dealer hereunder provided that, except in the case
     of the appointment of a New Dealer for the duration of the Program,
     following the issue of the Notes of the relevant Tranche, the relevant
     New Dealer shall have no further such authority, rights, powers, duties
     or obligations except such as may have accrued or been incurred prior to
     or in connection with the issue of such Notes.

(2)  The Issuers and/or the Guarantor shall promptly notify the Agent and the
     other Dealers of any appointment of a New Dealer for the duration of the
     Program by supplying to such parties a copy of any Dealer Accession
     Letter and Confirmation Letter. No such notice shall be required to be
     given in the case of an appointment of a New Dealer for a particular
     issue of Notes.

12.  INCREASE IN THE AGGREGATE NOMINAL AMOUNT OF THE PROGRAM

(1)  From time to time the Issuers and the Guarantor may wish to increase the
     aggregate nominal amount of the Notes that may be issued under the
     Program. In such circumstances, the Issuers and the Guarantor may request
     such an increase (subject as set out in subclause (2)) by delivering to
     the Listing Agent and the Dealers the letter substantially in the form
     set out in Appendix D hereto. Unless notice to the contrary is received
     by the Issuers or the Guarantor no later than 10 days after notice was
     given to the Dealers and the Listing Agent, each such Dealer and the
     Listing Agent will be deemed to have given its consent to the increase in
     the nominal amount of the Program, whereupon all references in this
     Agreement and the Procedures Memorandum to a Euro Medium Term Note
     Program of a certain nominal amount, shall be and shall be deemed to be
     references to a Euro Medium Term Note Program of the increased nominal
     amount.

(2)  Notwithstanding subclause (1), the right of the Issuers and the Guarantor
     to increase the aggregate nominal amount of the Program shall be subject
     to each Dealer having received and found satisfactory all the documents

<PAGE>

                                      19

     and confirmations described in the Initial Documentation List (with such
     changes as may be relevant, with reference to the circumstances at the
     time of the proposed increase as are agreed between the Issuers, the
     Guarantor and the Dealers), and the delivery of any further conditions
     precedent that any of the Dealers may reasonably require, including,
     without limitation, the production of a supplementary Offering Circular
     by the Issuers and the Guarantor and any further or other documents
     required by the relevant Stock Exchange(s) for the purpose of listing the
     Notes to be issued under the Program on the relevant Stock Exchange(s).
     The Arrangers shall circulate to the Dealers all the documents and
     confirmations described in the Initial Documentation List and any further
     conditions precedent so required. Any Dealer must notify the Arrangers,
     the Issuers and the Guarantor within 10 business days of receipt if it
     considers, in its reasonable opinion, such documents, confirmations and,
     if applicable, such further conditions precedent to be unsatisfactory.

13.  STATUS OF THE ARRANGERS

(1)  Each of the Dealers agrees that each Arranger has only acted in an
     administrative capacity to facilitate the establishment and/or
     maintenance of the Program and has no responsibility to it for (a) the
     adequacy, accuracy, completeness or reasonableness of any representation,
     warranty, undertaking, agreement, statement or information in the
     Offering Circular, any Pricing Supplement, this Agreement or any
     information provided in connection with the Program or (b) the nature and
     suitability of it of all legal, tax and accounting matters and all
     documentation in connection with the Program or any Tranche.

(2)  The Arrangers shall have only those duties, obligations and
     responsibilities expressly specified in this Agreement.

14.  COUNTERPARTS

     This Agreement may be signed in any number of counterparts, all of which
     taken together shall constitute one and the same instrument.

15.  COMMUNICATIONS

(1)  All communications shall be by fax or letter delivered by hand or (but
     only where specifically provided in the Procedures Memorandum) by
     telephone. Each communication shall be made to the relevant party at the
     fax number or address or telephone number and, in the case of a
     communication by fax or letter, marked for the attention of, or (in the
     case of a communication by telephone) made to, the person(s) from time to
     time specified in writing by that party to the other for the purpose. The
     initial telephone number, fax number and address of, and person(s) so
     specified by, each party are set out on the signature pages hereof.

(2)  A communication shall be deemed received (if by fax) when an
     acknowledgement of receipt is received, (if by telephone) when made or
     (if by letter) when delivered, in each case in the manner required by
     this clause. Every communication shall be irrevocable save in respect of
     any manifest error therein.

16.  BENEFIT OF AGREEMENT

(1)  This Agreement shall be binding upon and shall inure for the benefit of
     each Issuer, the Guarantor and each Dealer and their respective
     successors and permitted assigns.

<PAGE>

                                      20

(2)  The Dealers may assign or transfer their rights or obligations under this
     Agreement with the prior written consent of the Issuers and the Guarantor
     (except for an assignment and/or transfer of all of a Dealer's rights and
     obligations under this Agreement by operation of law resulting directly
     from a merger by, or sale of all or substantially of all the assets of,
     such Dealer). If the Dealers assign their rights or transfer their
     obligations as provided in this clause, the relevant assignee or
     transferee shall be treated as if it were a party to this Agreement with
     effect from the date on which such assignment or transfer takes effect;
     provided that any transfer shall only become effective when the Issuers
     and the Guarantor have received an undertaking from the transferee to be
     bound by this Agreement and to perform the obligations transferred to it
     (in form and substance reasonably satisfactory to the Issuers and the
     Guarantor).

17.  CURRENCY INDEMNITY

     If, under any applicable law and whether pursuant to a judgment being
     made or registered against any Issuer and/or (as the case may be) the
     Guarantor or in the liquidation, insolvency or analogous process of the
     relevant Issuer and/or (as the case may be) the Guarantor or for any
     other reason, any payment under or in connection with this Agreement is
     made or falls to be satisfied in a currency (the "other currency") other
     than that in which the relevant payment is expressed to be due (the
     "required currency") under this Agreement, then, to the extent that the
     payment (when converted into the required currency at the rate of
     exchange on the date of payment or, if it is not practicable for the
     relevant Dealer to purchase the required currency with the other currency
     on the date of payment, at the rate of exchange as soon thereafter as it
     is practicable for it to do so) actually received by the relevant Dealer
     falls short of the amount each due under the terms of this Agreement, the
     relevant Issuer and the Guarantor each undertakes that it shall, as a
     separate and independent obligation, indemnify and hold harmless each
     Dealer against the amount of such shortfall. For the purpose of this
     clause "rate of exchange" means the rate at which the relevant Dealer is
     able on the London foreign exchange market on the relevant date to
     purchase the required currency with the other currency and shall take
     into account any premium and other reasonable costs of exchange. The
     Dealers understand and agree that in the event that the required currency
     is replaced by the Euro after the date hereof, the Euro will not be
     considered an "other currency" for the purposes of this Clause 17.

18.  CALCULATION AGENT

(1)  In the case of any Series of Notes which require the appointment of a
     Calculation Agent the Agent shall act as Calculation Agent, unless (a)
     the relevant Issuer or the Guarantor appoints another person as
     Calculation Agent with the approval of the relevant Dealer or (in the
     case of a syndicated issue) the Lead Manager or (b) the relevant Dealer
     or (in the case of a syndicated issue) the Lead Manager requests the
     relevant Issuer to appoint such Dealer or Lead Manager, or a person
     nominated by such Dealer or Lead Manager (a "Nominee"), as Calculation
     Agent.

(2)  Should such an appointment be made by the relevant Issuer or Guarantor
     (with such approval) or such a request be made to the relevant Issuer and
     agreed to by the relevant Issuer and the Guarantor, the appointment of
     that other person, Dealer, Lead Manager or Nominee shall be automatic
     upon the issue of the relevant Series of Notes, and shall, except as
     agreed, be on the terms set out in the Calculation Agency Agreement

<PAGE>

                                      21

     attached as Appendix A to the Agency Agreement, and no further action
     shall be required to effect the appointment of such Dealer, other person,
     Lead Manager or Nominee as Calculation Agent in relation to that Series
     of Notes. The name of the other person, Dealer, Lead Manager or Nominee
     so appointed will be entered in the relevant Pricing Supplement.

19.  STABILISATION

     In connection with the distribution of any Tranche of Notes, the Dealer
     (if any) designated as stabilising manager in the applicable Pricing
     Supplement may over-allot or effect transactions which stabilise or
     maintain the market price of Notes of the Series of which such Tranche
     forms a part at a level which might not otherwise prevail, but in doing
     so such Dealer shall act as principal and not as agent of the relevant
     Issuer. Such stabilising, if commenced, may be discontinued at any time.
     Any loss resulting from over-allotment and stabilisation shall be borne,
     and any net profit arising therefrom shall be retained, by the
     stabilising manager for its own account. Such stabilising shall be done
     in accordance with the applicable laws.

20.  CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

     A person who is not a party to this Agreement has no right under the
     Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
     Agreement, but this does not affect any right or remedy of a third party
     which exists or is available apart from that Act.

21.  GOVERNING LAW AND JURISDICTION

(1)  This Agreement and every agreement for the issue and purchase of Notes as
     referred to in Clause 2 shall be governed by, and construed in accordance
     with, the laws of England.

(2)  Each party to this Agreement hereby irrevocably agrees for the exclusive
     benefit of the other parties to this Agreement that the courts of England
     are to have jurisdiction to settle any disputes which may arise out of or
     in connection with this Agreement and that accordingly any suit, action
     or proceedings (together referred to as "Proceedings") arising out of or
     in connection with this Agreement may be brought in such courts. Each
     party to this Agreement hereby irrevocably waives any objection which it
     may have to the laying of the venue of any Proceedings in any such courts
     and any claim that any such Proceedings have been brought in an
     inconvenient forum and hereby further irrevocably agrees that a judgment
     in any Proceedings brought in the English courts shall be conclusive and
     binding upon such party and may be enforced in the courts of any other
     jurisdiction (subject to the laws of the jurisdiction in which
     enforcement is sought). Nothing contained herein shall limit any right to
     take Proceedings against any party to this Agreement in any other court
     of competent jurisdiction (outside the Contracting States as defined in
     Section 1(3) of the Civil Jurisdiction and Judgments Act 1982), nor shall
     the taking of Proceedings in one or more jurisdictions preclude the
     taking of Proceedings in any other jurisdiction, whether concurrently or
     not (subject to the laws of the relevant jurisdictions). Each of CSC US,
     CSC Germany and the Guarantor hereby appoints CSC UK as its agent for
     service of process and agrees that, in the event of ceasing so to act or
     ceasing to be registered in England, it will appoint another person as
     its agent for service of process in England in respect of any
     Proceedings.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above written.

<PAGE>

                                       22

                                  APPENDIX A

                          INITIAL DOCUMENTATION LIST

1.   A certified copy of:

     (a)  the Certificate of Incorporation of CSC US;

     (b)  the Memorandum and Articles of Association of CSC UK;

     (c)  the Articles of Association of CSC Germany; and

     (d)  the Articles of Incorporation of the Guarantor,

     unless these have not changed since the date they were last provided to
     the Dealers.

2.   A certified copy of all resolutions and other authorisations required to
     be passed or given, and evidence of any other action required to be
     taken, on behalf of each Issuer and the Guarantor, as applicable:

     (a)  to approve this Agreement, the Agency Agreement, the Deed of
          Covenant, the creation of the Program, the issue of Notes under the
          Program and the execution of the Deed of Guarantee by the Guarantor;

     (b)  to authorise appropriate persons to execute each of this Agreement,
          the Agency Agreement, the Deed of Covenant, the Deed of Guarantee
          and Notes issued under the Program and to take any other action in
          connection therewith; and

     (c)  to authorise appropriate persons to enter into agreements with any
          Dealer on behalf of each Issuer and the Guarantor to issue Notes in
          accordance with Clause 2 of this Agreement.

3.   A certified list of the names, titles and specimen signatures of the
     persons authorised on behalf of each Issuer and the Guarantor in
     accordance with paragraph 2(c) above unless these have not changed since
     the date they were last provided to the Dealers.

4.   Certified copies of any other governmental or other consents (including,
     but not limited to, confirmation that the Bank of England has been
     notified of the establishment of the Program) required for each Issuer
     and the Guarantor to issue Notes under the Program, for the Guarantor to
     guarantee Notes issued under the Program, for each Issuer and the
     Guarantor (as the case may be) to execute and deliver this Agreement, the
     Deed of Covenant and the Agency Agreement and for each Issuer and the
     Guarantor to fulfil its respective obligations under this Agreement, the
     Agency Agreement, the Deed of Covenant and the Notes.

5.   Confirmation that master Global Notes (from which copies may be made for
     each Tranche), duly executed by a person or persons authorised to take
     action on behalf of the relevant Issuer as specified in paragraph (2)(b)
     above, have been delivered to the Agent.

6.   Legal opinions addressed to each of the Dealers dated on or after the
     date of this Agreement, in such form and with such content as the Dealers
     may reasonably require, from:

<PAGE>

                                      23

     (a)  Freshfields Bruckhaus Deringer, legal advisers to CSC Germany as to
          German law;

     (b)  Cravath, Swaine & Moore, legal advisers to CSC US as to U.S. law;

     (c)  Homburger Rechtsanwalte, legal advisers to the Guarantor as to Swiss
          law; and

     (d)  Allen & Overy, legal advisers to the Dealers as to English law.

7.   A conformed copy of the Agency Agreement and the Deed of Guarantee and
     confirmation that an executed copy of each such document has been
     delivered to the Paying Agents and the Common Depositary for Euroclear
     and Clearstream, Luxembourg.

8.   A conformed copy of the Deed of Covenant and confirmation that an
     executed copy of such deed has been delivered to the Agent and the Common
     Depositary for Euroclear and Clearstream, Luxembourg.

9.   A printed final version of the Offering Circular.

10.  Confirmation from the Listing Agent that the Luxembourg Stock Exchange
     will list Notes to be issued under the Program.

11.  A comfort letter from the independent auditors of each Issuer and the
     Guarantor, in such form and with such content as the Dealers may
     reasonably request.

12.  Confirmation that the Program has been rated A by Standard & Poor's and
     A2 by Moody's.

<PAGE>

                                       24

                                  APPENDIX B

                             SELLING RESTRICTIONS

1.   UNITED STATES

(1)  The Notes have not been and will not be registered under the Securities
     Act of 1933, as amended (the "Securities Act"), and may not be offered or
     sold within the United States or to, or for the account or benefit of,
     U.S. persons except in accordance with Regulation S under the Securities
     Act or pursuant to an exemption from the registration requirements of the
     Securities Act. Each Dealer represents and agrees that it and any of its
     affiliates and any person acting on its or their behalf have offered and
     sold any Notes, and will offer and sell any Notes (i) as part of their
     distribution at any time and (ii) otherwise until 40 days after the
     completion of the distribution of all Notes of the Tranche of which such
     Notes are a part, as determined and notified by the Agent to such Dealer,
     as provided below, only in accordance with Rule 903 of Regulation S under
     the Securities Act. Accordingly, each Dealer, its affiliates and any
     persons acting on its or their behalf have not engaged and will not
     engage in any directed selling efforts with respect to the Notes, and
     have complied and will comply with the offering restrictions requirement
     of Regulation S. Each Dealer who has purchased Notes of a Tranche
     hereunder (or in the case of a sale of a Tranche of Notes issued to or
     through more than one Dealer, each of such Dealers as to the Notes of
     such Tranche purchased by or through it) shall determine and certify to
     the Agent the completion of the distribution of the Notes of such
     Tranche. On the basis of such certification or certifications, the Agent
     agrees to notify such Dealer or Dealers of the end of the distribution
     compliance period with respect to such Tranche. Each Dealer also agrees
     that, at or prior to confirmation of sale of Notes, it will have sent to
     each distributor, dealer or person receiving a selling concession, fee or
     other remuneration that purchases Notes from it or any of its affiliates
     or any person acting on its or their behalf during the distribution
     compliance period a confirmation or notice to substantially the following
     effect:

               "The Securities covered hereby have not been registered under
               the U.S. Securities Act of 1933 (the "Securities Act") and may
               not be offered or sold within the United States or to, or for
               the account or benefit of, U.S. persons (i) as part of their
               distribution at any time or (ii) otherwise until 40 days after
               the completion of the distribution of the Securities as
               determined and notified by the Agent for the Securities to
               [name of Dealer(s)], except in either case in accordance with
               Regulation S under the Securities Act. Terms used above have
               the meanings given to them by Regulation S."

     Terms used in this sub-clause 1(1) have the meanings given to them by
     Regulation S.

(2)  In addition:

     (1)  except to the extent permitted under U.S. Treas. Reg. Section
          1.163-5(c)(2)(i)(D) (the "D Rules"), each Dealer (a) represents that
          it has not offered or sold, and agrees that during the restricted
          period it will not offer or sell, Notes in bearer form to a person
          who is within the United States or its possessions or to a United
          States person, and (b) represents that it has not delivered and

<PAGE>

                                      25

          agrees that it will not deliver within the United States or its
          possessions definitive Notes in bearer form that are sold during the
          restricted period;

     (2)  each Dealer represents that it has and agrees that throughout the
          restricted period it will have in effect procedures reasonably
          designed to ensure that its employees or agents who are directly
          engaged in selling Notes in bearer form are aware that such Notes
          may not be offered or sold during the restricted period to a person
          who is within the United States or its possessions or to a United
          States person, except as permitted by the D Rules;

     (3)  if it is a United States person, each Dealer represents that it is
          acquiring the Notes for purposes of resale in connection with their
          original issuance and if it retains Notes in bearer form for its own
          account, it will only do so in accordance with the requirements of
          U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6); and

     (4)  with respect to each affiliate that acquires Notes from a Dealer for
          the purpose of offering or selling such Notes during the restricted
          period, such Dealer repeats and confirms the representations and
          agreements contained in sub-clauses (1), (2) and (3) on such
          affiliate's behalf.

     Terms used in this sub-clause 1(2) have the meanings given to them by the
     U.S. Internal Revenue Code and regulations thereunder, including the D
     Rules.

(3)  Each Dealer represents that it has not entered and agrees that it will
     not enter into any contractual arrangement with respect to the
     distribution or delivery of Notes, so as to cause any person to become a
     "distributor" within the meaning of Regulation S or the D Rules except
     with their affiliates or with the prior written consent of the relevant
     Issuer and the Guarantor (in which case such Dealer will obtain for the
     benefit of the Issuer and the Guarantor the agreement of such person to
     the representations and agreements contained in Clauses 1(1) and 1(2)
     above).

(4)  Each issue of Indexed Notes and Dual Currency Notes shall be subject to
     such additional U.S. selling restrictions as the relevant Issuer and the
     relevant Dealer or Dealers shall agree as a term of the issue and
     purchase of such Notes, which additional selling restrictions shall be
     set out in the Pricing Supplement. Each Dealer agrees that it shall
     offer, sell and deliver such Notes only in compliance with such
     additional U.S. selling restrictions.

2.   UNITED KINGDOM

     Each Dealer represents and agrees that:

     (i)  in relation to Notes which have a maturity of one year or more, it
          has not offered or sold and, prior to the expiry of the period of
          six months from the Issue Date of such Notes, will not offer or sell
          any such Notes to persons in the United Kingdom except to persons
          whose ordinary activities involve them in acquiring, holding,
          managing or disposing of investments (as principal or agent) for the
          purposes of their businesses or otherwise in circumstances which
          have not resulted and will not result in an offer to the public in
          the United Kingdom within the meaning of the Public Offers of
          Securities Regulations 1995 (as amended);

<PAGE>

                                      26

     (ii) it has only issued or passed on and will only issue or pass on in
          the United Kingdom any document received by it in connection with
          the issue of any Notes to a person who is of a kind described in
          Article 11(3) of the Financial Services Act 1986 (Investment
          Advertisements) (Exemptions) Order 1996 (as amended) or is a person
          to whom such document may otherwise lawfully be issued or passed on;
          and

    (iii) it has complied and will comply with all applicable provisions of
          the FSA with respect to anything done by it in relation to any Notes
          in, from or otherwise involving the United Kingdom.

3.   JAPAN

     The Notes have not been and will not be registered under the Securities
     and Exchange Law of Japan (the "Securities and Exchange Law") and each
     Dealer agrees that it will not offer or sell any Notes, directly or
     indirectly, in Japan or to, or for the benefit of, any resident of Japan
     (which term as used herein means any person resident in Japan, including
     any corporation or other entity organised under the laws of Japan), or to
     others for re-offering or resale, directly or indirectly, in Japan or to
     a resident of Japan except in compliance with the Securities and Exchange
     Law and any other applicable laws or regulations of Japan.

4.   FRANCE

     Each of the Dealers, the Issuer and the Guarantor represents and agrees
     that, in connection with their initial distribution, it has not offered
     or sold and will not offer or sell, directly or indirectly, Notes to the
     public in the Republic of France, and has not distributed or caused to be
     distributed and will not distribute or cause to be distributed to the
     public in the Republic of France, the Offering Circular or any other
     offering material relating to the Notes, and that such offers, sales and
     distributions have been and shall only be made in France to (i) qualified
     investors (investisseurs qualifies) and/or (ii) a restricted circle of
     investors (cercle restreint d'investisseurs), all as defined in and in
     accordance with Article 6 of ordonnance no. 67-833 dated 28th September,
     1967 (as amended) and decret no. 98-880 dated 1st October, 1998.

     Where an issue of Notes is effected as an exception to the rules relating
     to an appel public a l'epargne in the Republic of France (public offer
     rules) by way of an offer to a restricted circle of investors (as
     referred to in (ii) above), such investors must, to the extent that the
     Notes are offered to 100 or more of such investors, provide certification
     as to their personal relationship of a professional or family nature with
     a member of the management of the Issuer. In the context of such
     exception, investors in the Republic of France may only participate in
     the issue of Notes for their own account in accordance with the
     conditions set out in decret no. 98-880 dated 1st October, 1998. Notes
     may only be issued, directly or indirectly, to the public in the Republic
     of France in accordance with articles 6 and 7 of ordonnance no. 67-833
     dated 28th September, 1967 (as amended).

5.   GERMANY

     In connection with the initial placement of any Notes in Germany, each
     Dealer agrees that (i) unless otherwise provided in the relevant
     Subscription Agreement or Pricing Supplement, Notes will be offered and
     sold only in compliance with an exemption from the prospectus requirement
     of the German Securities Selling Prospectus Act Wertpapier-

<PAGE>

                                      27

     Verkaufsprospektgesetz) of 13th December, 1990, as amended, and (ii) in
     any event Notes will be offered and sold in Germany only in accordance
     with the requirements of such Act.

6.   THE NETHERLANDS

     Each Dealer represents and agrees that it has not, directly or
     indirectly, offered or sold and will not, directly or indirectly, offer
     to sell in The Netherlands any Notes other than to persons who trade or
     invest in securities in the conduct of a profession or business (which
     include banks, stockbrokers, insurance companies, pension funds, other
     institutional investors and finance companies and treasury departments of
     large enterprises).

7.   GENERAL

     Each Dealer will (to the best of its knowledge and belief) comply with
     all applicable laws and regulations in force in any jurisdiction in which
     it purchases, offers, sells or delivers Notes or possesses or distributes
     the Offering Circular and will obtain any consent, approval or permission
     required by it for the purchase, offer, sale or delivery by it of Notes
     under the laws and regulations in force in any jurisdiction to which it
     is subject or in which it makes such purchases, offers, sales or
     deliveries and none of the Issuers, the Guarantor nor any other Dealer
     shall have responsibility therefor.

     None of the Issuers, the Guarantor nor any of the Dealers represents that
     Notes may at any time lawfully be sold in compliance with any applicable
     registration or other requirements in any jurisdiction, or pursuant to
     any exemption available thereunder, or assumes any responsibility for
     facilitating such sale.

     With regard to each Tranche, the relevant Dealer will be required to
     comply with such other additional restrictions as the relevant Issuer,
     the Guarantor and the relevant Dealer shall agree and as shall be set out
     in the applicable Pricing Supplement.

<PAGE>

                                       28

                                  APPENDIX C

                                    PART I

                   FORM OF DEALER ACCESSION LETTER - PROGRAM

[Date]

To:     CIBA SPECIALTY CHEMICALS CORPORATION
        CIBA SPECIALTY CHEMICALS PLC
        CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
        (the "Issuers")

and:    CIBA SPECIALTY CHEMICALS HOLDING INC.
        (the "Guarantor")

Attention:

Dear Sirs,

                     CIBA SPECIALTY CHEMICALS CORPORATION
                         CIBA SPECIALTY CHEMICALS PLC
                        CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
               U.S.$2,000,000,000 Euro Medium Term Note Program

We refer to the amended and restated Program agreement dated 30th March, 2001
entered into in respect of the above Euro Medium Term Note Program (the
"Program") and made between the Issuers, the Guarantor and the Dealers party
thereto (which agreement, as amended from time to time, is herein referred to
as the "Program Agreement").

CONDITIONS PRECEDENT

We confirm that we are in receipt of the documents referenced below:

(i)  a copy of the Program Agreement;

(ii) a copy of the current version all documents referred to in Appendix A of
     the Program Agreement;

and have found them to our satisfaction or (in the case of documents referred
to in (ii) above) have waived production of such documents.

For the purposes of the Program Agreement our Notice Details are as follows:

(insert name, address, telephone, telex (+ answerback) and attention).

<PAGE>

                                      29

In consideration of appointment by the Issuers and the Guarantor of us as a
Dealer under the Program Agreement we hereby undertake, for the benefit of
each of the Issuers, the Guarantor and the other Dealers, that we will perform
and comply with all the duties and obligations expressed to be assumed by a
Dealer under the Program Agreement.

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

Yours faithfully,

[Name of New Dealer]

cc:   The Chase Manhattan Bank (Agent)
      [names of Dealers at the date of accession]

<PAGE>

                                       30

                                    PART II

                     FORM OF CONFIRMATION LETTER - PROGRAM

[Date]

To:     [Name and address of new Dealer]

Dear Sirs,

                     CIBA SPECIALTY CHEMICALS CORPORATION
                         CIBA SPECIALTY CHEMICALS PLC
                        CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
               U.S.$2,000,000,000 Euro Medium Term Note Program

We refer to the amended and restated Program Agreement dated 30th March, 2001
(such agreement, as amended from time to time, the "Program Agreement")
entered into in respect to the above Euro Medium Term Note Program and hereby
acknowledge receipt of your Dealer Accession Letter to us dated [ ].

We hereby confirm that, with effect from the date hereof, you shall become a
party to the Program Agreement in accordance with Clause 11 of the Program
Agreement.

Yours faithfully,

For and on behalf of
CIBA SPECIALTY CHEMICALS CORPORATION

By:

For and on behalf of
CIBA SPECIALTY CHEMICALS PLC

By:

For and on behalf of
CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH

By:

<PAGE>

                                       31

For and on behalf of CIBA SPECIALTY CHEMICALS HOLDING INC.

By:                                          By:

cc:    The Chase Manhattan Bank (Agent)
       [names of other Dealers at the date of accession]

<PAGE>

                                       32

                                   PART III

                 FORM OF DEALER ACCESSION LETTER - NOTE ISSUE

[DATE]

To:     CIBA SPECIALTY CHEMICALS CORPORATION
        CIBA SPECIALTY CHEMICALS PLC
        CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH

(the "Issuers")

and:    CIBA SPECIALTY CHEMICALS HOLDING INC.
        (the "Guarantor")

Attention:

Dear Sirs,

                     CIBA SPECIALTY CHEMICALS CORPORATION
                         CIBA SPECIALTY CHEMICALS PLC
                        CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
               U.S.$2,000,000,000 Euro Medium Term Note Program

We refer to the amended and restated Program Agreement dated 30th March, 2001
entered into in respect of the above Euro Medium Term Note Program (the
"Program") and made between the Issuers, the Guarantor and the Dealers party
thereto (which agreement, as amended from time to time, is herein referred to
as the "Program Agreement").

Conditions Precedent

We confirm that we are in receipt of the documents referenced below:

(i)  a copy of the Program Agreement;

(ii) a copy of current versions of all documents referred to in Appendix A of
     the Program Agreement;

and have found them to our satisfaction or (in the case of documents referred
to in (ii) above) have waived production of such documents.

For the purposes of the Program Agreement our Notice Details are as follows:

(insert name, address, telephone, telex (+ answerback) and attention).

<PAGE>

                                      33

In consideration of appointment by the Issuers and the Guarantor of us as a
Dealer in respect of the issue of [ ] Notes due [ ] (the "Issue") under the
Program Agreement we hereby undertake, for the benefit of each of the Issuers,
the Guarantor and each of the other Dealers that in relation to the Issue we
will perform and comply with all the duties and obligations expressed to be
assumed by a Dealer under the Program Agreement.

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

Yours faithfully,

[Name of New Dealer]

By:

cc:    The Chase Manhattan Bank (Agent)
       [names of Dealers at the date of accession]

<PAGE>

                                       34

                                    PART IV

                   FORM OF CONFIRMATION LETTER - NOTE ISSUE

[Date]

To:     [Name and address of new Dealer]

Dear Sirs,

                     CIBA SPECIALTY CHEMICALS CORPORATION
                         CIBA SPECIALTY CHEMICALS PLC
                        CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
               U.S.$2,000,000,000 Euro Medium Term Note Program

We refer to the amended and restated Program Agreement dated 30th March, 2001
(such Agreement, as amended from time to time, the "Program Agreement")
entered into in respect to the above Euro Medium Term Note Program and hereby
acknowledge receipt of your Dealer Accession Letter to us dated [ ].

We hereby confirm that, with effect from the date hereof in respect of the
issue of [ ] Notes due [ ] (the "Issue"), you shall become a party to the
Program Agreement in accordance with Clause 11 of the Program Agreement.

Yours faithfully,

CIBA SPECIALTY CHEMICALS CORPORATION

By:

CIBA SPECIALTY CHEMICALS PLC

By:

CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH

By:

<PAGE>

                                      35

CIBA SPECIALTY CHEMICALS HOLDING INC.

By:                                          By:

cc:    The Chase Manhattan Bank (Agent)
       [names of Dealers at the date of accession]

<PAGE>

                                       36

                                  APPENDIX D

                LETTER REGARDING INCREASE IN THE NOMINAL AMOUNT
                                OF THE PROGRAM

[Date]

          To:  The Dealers and the Listing Agent (as those expressions are
               defined in the amended and restated Program Agreement dated
               30th March, 2001 as amended from time to time, (the "Program
               Agreement"))

Dear Sirs,

                     CIBA SPECIALTY CHEMICALS CORPORATION
                         CIBA SPECIALTY CHEMICALS PLC
                        CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
               U.S.$2,000,000,000 Euro Medium Term Note Program

We hereby request, pursuant to Clause 12 of the Program Agreement, that the
aggregate nominal amount of the above Program be increased to U.S.$[ ] on and
from [insert date]. We would like to draw your attention to such Clause 12,
under which, should you fail to object in accordance with the provisions set
out in that clause, this increase shall (subject as set out below) take effect
on and from [insert date], whereupon all references in the Program Agreement,
the Agency Agreement, the Deed of Covenant and the Deed of Guarantee will be
deemed amended accordingly. We understand that this increase is subject to the
satisfaction of the conditions set out in Clause 12 of the Program Agreement.

Terms used in this letter have the meanings given to them in the Program
Agreement.

Yours faithfully,

For and on behalf of
CIBA SPECIALTY CHEMICALS CORPORATION

By:

CIBA SPECIALTY CHEMICALS PLC

By:

<PAGE>

                                      37

For and on behalf of
CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH

By:

For and on behalf of CIBA SPECIALTY CHEMICALS HOLDING INC.

By:                                          By:

cc:     UBS Warburg
(for distribution to the existing Dealers).

The Chase Manhattan Bank (Agent)

<PAGE>

                                      38

                                  APPENDIX E

                        FORM OF SUBSCRIPTION AGREEMENT
                             [CURRENCY AND AMOUNT]

                    [CIBA SPECIALTY CHEMICALS CORPORATION]
                        [CIBA SPECIALTY CHEMICALS PLC]
                       [CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH]

                            [DESCRIPTION OF NOTES]

                 unconditionally and irrevocably guaranteed by
                     CIBA SPECIALTY CHEMICALS HOLDING INC.

[DATE]

To:     [        ]

        (the "Managers")

c/o     [         ]

        (the "Lead Manager")

Dear Sirs,

[CIBA SPECIALTY CHEMICALS CORPORATION] [CIBA SPECIALTY CHEMICALS PLC] [CIBA
SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH] (the "Issuer") proposes to issue
[CURRENCY AND AMOUNT] [DESCRIPTION OF NOTES] (the "Notes") unconditionally and
irrevocably guaranteed by CIBA SPECIALTY CHEMICALS HOLDING INC. (the
"Guarantor") pursuant to its U.S.$2,000,000,000 Euro Medium Term Note Program.
The terms of the issue shall be as set out in the form of Pricing Supplement
attached to this Agreement as Annexe A.

This Agreement is supplemental to the amended and restated Program Agreement
(the "Program Agreement") dated 30th March, 2001 made between CIBA SPECIALTY
CHEMICALS CORPORATION, CIBA SPECIALTY CHEMICALS PLC and CIBA
SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH (together the "Issuers"), the
Guarantor and the Dealers party thereto. All terms with initial capitals used
herein without definition have the meanings given to them in the Program
Agreement.

We wish to record the arrangements agreed between us in relation to the issue:

<PAGE>

                                      39

*[1.  Conditions Precedent

     This Agreement appoints each Manager which is not a party to the Program
     Agreement (each a "New Dealer") as a Dealer under the Program Agreement
     for the purposes of the issue of the Notes. The Lead Manager confirms
     that it is in receipt of the documents referenced below:

     (i)  a copy of the Program Agreement;

     (ii) a copy of all documents referred to in Appendix A of the Program
          Agreement; and

    (iii) a copy of the Agency Agreement;

     and has confirmed with (each of) the New Dealer(s) that it/they has/have
     found them to be satisfactory or (in the case of the documents referred
     to in (ii)) has/have waived such production.

     For the purposes of the Program Agreement the details of the Lead Manager
     for service of notices are as follows:

     (insert name, address, telephone, telex (# answerback) and attention).

     In consideration of the Issuer and the Guarantor appointing the New
     Dealer(s) as (a) Dealer(s) in respect of the Notes under the Program
     Agreement, each/the New Dealer hereby undertakes, for the benefit of each
     of the Issuers, the Guarantor and the other Dealers, that, in relation to
     the issue of the Notes, it will perform and comply with all the duties
     and obligations expressed to be assumed by a Dealer under the Program
     Agreement, a copy of which it acknowledges it has received from the Lead
     Manager.]

     The Issuer hereby confirms that [each] [the] New Dealer shall be vested
     with all authority, rights, powers, duties and obligations of a Dealer in
     relation to the issue of Notes as if originally named as a Dealer under
     the Program Agreement provided that following the issue of the Temporary
     Global Note in respect of the Notes [each] [the] New Dealer shall have no
     further such authority, rights, powers, duties and obligations except
     such as may have accrued or been incurred prior to, or in connection
     with, the issue of such Temporary Global Note and the Notes represented
     thereby.

2.   Subject to the terms and conditions of the Program Agreement and this
     Agreement the Issuer hereby agrees to issue the Notes, the Guarantor
     hereby agrees to guarantee the Notes and the Managers jointly and
     severally agree to purchase the Notes at a subscription price of [ ] per
     cent. of the principal amount of the Notes (the "Subscription Price"),
     being the issue price of [ ] per cent. less a selling commission of [ ]
     per cent. of such principal amount and a management and underwriting fee
     of [ ] per cent. of such principal amount.

3.   The net purchase money in respect of the Notes, namely the sum of [ ]
     (representing the Subscription Price, less the amount payable in respect
     of the Managers' expenses specified in Clause 4 hereof) will be paid by
     the Lead Manager on behalf of the Managers to the Issuer at [ ] hours
     (London time) on [ ], or at such other time and/or date as the Issuer and
     the Lead Manager on behalf of the Managers may agree (the "Closing Date")
     against delivery to a common depositary for Clearstream, Luxembourg and
     Euroclear Bank S.A./N.V. as operator of the Euroclear System, or any
     successor to the business thereof of a temporary global note representing
     the Notes, in the manner contemplated in the Program Agreement.

     -----------------------------------
     * Delete this paragraph for a Dealer-only syndicate.

<PAGE>

                                      40

4.   The Issuer or, failing the Issuer, the Guarantor shall bear and pay all
     costs and expenses incurred in or in connection with the printing of the
     Notes, this Agreement and the Pricing Supplement prepared in connection
     with the issue of the Notes, the listing of the Notes on the [ ] Stock
     Exchange and making initial delivery of the Notes. In addition, the
     Issuer or, failing the Issuer, the Guarantor agrees to pay to the Lead
     Manager [ ] in respect of reasonable legal, travelling, telex, facsimile,
     telephone, postage and costs of any publicity agreed in writing by the
     Issuer or the Guarantor incurred and to be incurred by the Managers in
     connection with the preparation and management of the issue and
     distribution of the Notes which sum may be deducted from the Subscription
     Price as provided in Clause 3 hereof.

5.   The obligation of the Managers to purchase the Notes is conditional upon:

     (i)  the conditions set out in Clause 3(2) (other than that set out in
          Clause 3(2)(f)) of the Program Agreement being satisfied as of the
          Closing Date and without prejudice to the aforesaid, the Offering
          Circular dated [ ] [, as supplemented by [ ],] containing all
          material information relating to the assets and liabilities,
          financial position and profits and losses of the Issuer [and the
          Guarantor/Parent] and nothing having happened or being expected to
          happen which would require the Offering Circular [, as so
          supplemented,] to be [further] supplemented or updated; and

     (ii) the delivery to the Lead Manager on the Closing Date of:

          (A)  legal opinions addressed to the Managers dated the Closing Date
               in such form and with such contents as the Lead Manager, on
               behalf of the Managers, may reasonably require [from
               Freshfields Bruckhaus Deringer/Cravath, Swaine & Moore], the
               legal advisers to the Issuer as to [German/United States law,]
               from Homburger Rechtsanwalte, the legal advisers to the
               Guarantor as to Swiss law, and from Allen & Overy, the legal
               advisers to the Managers as to English law;

          (B)  a certificate dated the Closing Date signed by a duly
               authorised officer of each of the Issuer and the Guarantor to
               the effect stated in paragraph (i) of this Clause;

          (C)  a comfort letter dated the Closing Date from the independent
               auditors of each of the Issuer and the Guarantor, in such form
               and with such content as the Managers may reasonably request;
               and

          (D)  [list such other conditions precedent as may be agreed].

     If any of the foregoing conditions is not satisfied on or before the
     Closing Date, this Agreement shall terminate on such date and the parties
     hereto shall be under no further liability arising out of this Agreement
     (except for the liability of the Issuer and the Guarantor in relation to

<PAGE>

                                      41

     expenses as provided in Clause 4 and except for any liability arising
     before or in relation to such termination), provided that the Lead
     Manager, on behalf of the Managers, may in its discretion waive any of
     the aforesaid conditions (other than the conditions precedent contained
     in Clause 3(2)(c) of the Program Agreement) or any part of them.

6.   In connection with the distribution of the Notes, the Lead Manager may
     over-allot or effect transactions in the open market or otherwise with a
     view to stabilising or maintaining the market price of the Notes at
     levels other than those which might otherwise prevail in the open market,
     but in doing so the Lead Manager shall act as principal and not as agent
     of the Issuer. Such stabilising if commenced, may be discontinued at any
     time. Any loss resulting from over-allotment and stabilisation shall be
     borne, and any net profit arising therefrom shall be retained, by the
     Lead Manager for its own account. Such stabilisation shall be done in
     compliance with all applicable laws.

7.   (a)  The Lead Manager, on behalf of the Managers, may, after consultation
          with the Issuer and the Guarantor if practicable and by notice to
          the Issuer and the Guarantor, terminate this Agreement at any time
          prior to payment of the net purchase money to the Issuer if in the
          opinion of the Lead Manager there shall have been such a change in
          national or international financial, political or economic
          conditions or currency exchange rates or exchange controls as would
          in the view of the Lead Manager be likely to prejudice materially
          the success of the offering and distribution of the Notes (whether
          in the primary market or in respect of dealings in the Notes in the
          secondary market).

     (b)  Upon such notice being given, this Agreement shall terminate and no
          party shall be under any liability to any other in respect thereof
          except for the liability of the Issuer and the Guarantor for the
          payment of costs and expenses as provided in Clause 4 of this
          Agreement, the obligations of the Managers under Clause 8 of the
          Program Agreement and the respective obligations of the parties
          under Clause 6 of the Program Agreement.

8.   (1)  This Agreement shall be governed by, and construed in accordance
          with, the laws of England.

     (2)  A person who is not a party to this Agreement has no right under the
          Contracts (Rights of Third Parties) Act 1999 to enforce any term of
          this Agreement, but this does not affect any right or remedy of a
          third party which exists or is available apart from that Act.

     (3)  Each party to this Agreement hereby irrevocably agrees for the
          exclusive benefit of the other parties to this Agreement that the
          courts of England are to have jurisdiction to settle any disputes
          which may arise out of or in connection with this Agreement and that
          accordingly any suit, action or proceedings (together referred to as
          "Proceedings") arising out of or in connection with this Agreement
          may be brought in such courts. Each party to this Agreement hereby
          irrevocably waives any objection which it may have to the laying of
          the venue of any Proceedings in any such courts and any claim that
          any such Proceedings have been brought in an inconvenient forum and
          hereby further irrevocably agrees that a judgment in any Proceedings
          brought in the English courts shall be conclusive and binding upon
          such party and may be enforced in the courts of any other
          jurisdiction (subject to the laws of the jurisdiction in which
          enforcement is sought). Nothing contained herein shall limit any

<PAGE>

                                      42

          right to take Proceedings against the Issuer and/or the Guarantor in
          any other court of competent jurisdiction (outside the Contracting
          States, as defined in Section 1(3) of the Civil Jurisdiction and
          Judgments Act 1982), nor shall the taking of Proceedings in one or
          more jurisdictions preclude the taking of Proceedings in any other
          jurisdiction, whether concurrently or not (subject to the laws of
          the relevant jurisdiction). The [Issuer and the] Guarantor hereby
          appoints [the Issuer/Ciba Specialty Chemicals PLC] as its agent for
          service of process and agrees that, in the event of ceasing so to
          act or ceasing to be registered in England, it will appoint another
          person as its agent for service of process in England in respect of
          any Proceedings.

9.   This Agreement may be signed in any number of counterparts, all of which,
     taken together, shall constitute one and the same agreement and any party
     may enter into this Agreement by executing a counterpart.

Please confirm that this letter correctly sets out the arrangements agreed
between us.

Yours faithfully,

For:    [Issuer]

By:

For:    CIBA SPECIALTY CHEMICALS HOLDING INC.

By:                                          By:

We agree to the foregoing.

For:    [

                              ]

By:

<PAGE>

                                      43

                                   ANNEXE A

                         [FORM OF PRICING SUPPLEMENT]

<PAGE>

                                      44

                                  APPENDIX F

                           FORM OF DEED OF COVENANT

THIS DEED OF COVENANT is made on 30th March, 2001 by each of Ciba Specialty
Chemicals Corporation, Ciba Specialty Chemicals PLC and Ciba
Spezialitatenchemie Holding Deutschland GmbH (each an "Issuer") in favour of
the account holders of Clearstream Banking, societe anonyme ("Clearstream,
Luxembourg") and Euroclear Bank S.A./N.V. as operator of the Euroclear System
("Euroclear"), or any successor to the business thereof or any other
additional clearing system or systems as are specified in the Pricing
Supplement relating to any Note (as defined below) (each a "Clearing System").

WHEREAS:

(A)  Each Issuer has entered into an amended and restated Program Agreement
     (the "Program Agreement", which expression includes the same as it may be
     amended, supplemented, novated or restated from time to time) dated 30th
     March, 2001 with Ciba Specialty Chemicals Holding Inc. (the "Guarantor")
     and the Dealers named therein under which the relevant Issuer proposes
     from time to time to issue Euro Medium Term Notes (the "Notes"), which
     amends and restates the amended and restated program agreement dated 16th
     June, 2000 with Ciba Specialty Chemicals Corporation, Ciba Specialty
     Chemicals PLC, Ciba Spezialitatenchemie Holdings Deutschland GmbH, the
     Guarantor and the Dealers named therein (the "Principal Program
     Agreement").

(B)  Each Issuer has also entered into an amended and restated Agency
     Agreement (the "Agency Agreement", which expression includes the same as
     it may be amended, supplemented, novated or restated from time to time)
     dated 30th March, 2001 between, inter alios, the Issuer and The Chase
     Manhattan Bank (the "Agent").

(C)  The Notes will initially be represented by, and comprised in, Temporary
     Global Notes (the "Temporary Global Notes") and thereafter may be
     represented by, and comprised in, Permanent Global Notes (the "Permanent
     Global Notes" and together with the Temporary Global Notes, the "Global
     Notes"), such Global Notes representing a certain number of underlying
     Notes (the "Underlying Notes").

(D)  Each Global Note will, after issue, be deposited with a common depository
     for one or more Clearing Systems (each such Clearing System or all such
     Clearing Systems together, the "Relevant Clearing System"). Upon such
     deposit of a Global Note the Underlying Notes represented by such Global
     Note will be credited to a securities account or securities accounts with
     the Relevant Clearing System. Any account holder with the Relevant
     Clearing System which has Underlying Notes credited to its securities
     account from time to time (each a "Relevant Account Holder") will,
     subject to and in accordance with the terms and conditions and operating
     procedures or management regulations of the Relevant Clearing System, be
     entitled to transfer such Underlying Notes and (subject to and upon
     payment being made by the relevant Issuer to the bearer in accordance
     with the terms of the relevant Global Note) will be entitled to receive
     payments from the Relevant Clearing System calculated by reference to the
     Underlying Notes credited to its securities account.

(E)  In certain circumstances specified in each Global Note, a Global Note
     will become void. The time at which a Global Note becomes void is
     hereinafter referred to as the "Relevant Time". In such circumstances

<PAGE>

                                      45

     each Relevant Account Holder will, subject to and in accordance with the
     terms of this Deed, acquire against the relevant Issuer all those rights
     which such Relevant Account Holder would have had if, prior to the Global
     Note becoming void, duly executed and authenticated Definitive Note(s)
     (as defined in the Agency Agreement) and, if the Notes are repayable in
     instalments, receipts in respect thereof (the "Receipts") and interest
     coupons (the "Coupons") appertaining to the Definitive Note(s) (if
     appropriate) had been issued in respect of its Underlying Note(s) and
     such Definitive Notes(s), Receipts (if appropriate) and Coupons (if
     appropriate) were held and beneficially owned by such Relevant Account
     Holder.

(F)  The obligations of each Issuer under this Deed have been guaranteed by
     the Guarantor pursuant to the amended and restated Deed of Guarantee (the
     "Guarantee") executed by the Guarantor on 30th March, 2001 and an
     executed copy of the Guarantee has been deposited with and shall be held
     by the Agent for the time being for the Notes. A copy of the Guarantee
     shall be available for inspection at the office of the Agent for the time
     being (being at the date hereof at Trinity Tower, 9 Thomas More Street,
     London E1 9YT).

(G)  This Deed of Covenant amends and restates the amended and restated Deed
     of Covenant entered into by Ciba Specialty Chemicals Corporation, Ciba
     Specialty Chemicals PLC, Ciba Spezialitatenchemie Holding Deutschland
     GmbH dated 16th June, 2000. This Deed of Covenant does not affect any
     Notes issued pursuant to the Principal Program Agreement prior to the
     date hereof.

NOW THIS DEED WITNESSES AS FOLLOWS:

1.   If any Global Note becomes void in accordance with the terms thereof the
     relevant Issuer hereby undertakes and covenants with each Relevant
     Account Holder (other than when any Relevant Clearing System is an
     account holder of any other Relevant Clearing System) that each Relevant
     Account Holder shall automatically acquire at the Relevant Time, without
     the need for any further action on behalf of any person, against the
     relevant Issuer all those rights which such Relevant Account Holder would
     have had if at the Relevant Time it held and beneficially owned duly
     executed and authenticated Definitive Note(s), Receipts (if appropriate)
     and Coupons (if appropriate) in respect of each Underlying Note
     represented by such Global Note which such Relevant Account Holder has
     credited to its securities account with the Relevant Clearing System at
     the Relevant Time. The relevant Issuer's obligation pursuant to this
     clause shall be a separate and independent obligation by reference to
     each Underlying Note which a Relevant Account Holder has credited to its
     securities account with the Relevant Clearing System and the relevant
     Issuer agrees that a Relevant Account Holder may assign its rights
     hereunder in whole or in part.

2.   The records of the Relevant Clearing System shall be conclusive evidence
     of the identity of the Relevant Account Holders and the number of
     Underlying Notes credited to the securities account of each Relevant
     Account Holder. For the purposes hereof a statement issued by the
     Relevant Clearing System stating:

     (i)  the name of the Relevant Account Holder to which such statement is
          issued; and

     (ii) the aggregate nominal amount of Underlying Notes credited to the
          securities account of such Relevant Account Holder as at the opening

<PAGE>

                                      46

          of business on the first day following the Relevant Time on which
          the Relevant Clearing System is open for business,

     shall be conclusive evidence of the records of the Relevant Clearing
     System at the Relevant Time.

3.   In the event of a dispute, the determination of the Relevant Time by the
     Relevant Clearing System shall be final and conclusive for all purposes
     in connection with the Relevant Account Holders with securities accounts
     with the Relevant Clearing System.

4.(a) Where the Issuer is Ciba Specialty Chemicals Corporation:

     The Issuer will, subject to the exceptions and limitations set forth
     below, pay as additional interest on an Underlying Note such additional
     amounts as are necessary in order that the net amounts receivable
     pursuant to the terms of the Underlying Note by each Relevant Account
     Holder who is a United States Alien (as such term is defined below),
     after deduction for any present or future tax, assessment or governmental
     charge of the United States (as such term is defined below), or a
     political subdivision or authority thereof or therein, imposed by
     withholding with respect to the payment, will not be less than the
     amounts provided for in such Underlying Note to be then due and payable;
     provided, however, that the foregoing obligation to pay additional
     amounts shall not apply to:

     (i)  any tax, assessment or governmental charge that would not have been
          so imposed but for the existence of any present or former connection
          between such Relevant Account Holder (or between a fiduciary,
          settlor, beneficiary, member or shareholder of, or holder of power
          over, such holder, if such Relevant Account Holder is an estate,
          trust, partnership or corporation) and the United States, including,
          without limitation, such Relevant Account Holder (or fiduciary,
          settlor, beneficiary, member, shareholder or holder of a power)
          being considered as:

          (A)  being or having been present or engaged in a trade or business
               in the United States or having or having had a permanent
               establishment therein;

          (B)  having a current or former relationship with the United States,
               including a relationship as a citizen or resident or being
               treated as a resident thereof;

          (C)  being or having been a personal holding company, a controlled
               foreign corporation, a passive foreign investment company, a
               foreign personal holding company with respect to the United
               States, a corporation that has accumulated earnings to avoid
               United States Federal income tax or a private foundation or
               other tax-exempt organisation; or

          (D)  an actual or a constructive "10-per cent shareholder" of the
               Issuer as defined in Section 871(h)(3) of the United States
               Internal Revenue Code of 1986, as amended (the "Code");

     (ii) any Relevant Account Holder who is a fiduciary or partnership or
          other than the sole beneficial owner of the Underlying Note, but
          only to the extent that a beneficiary or settlor with respect to
          such fiduciary or member of such partnership or a beneficial owner
          of the Underlying Note would not have been entitled to the payment

<PAGE>

                                      47

          of an additional amount had such beneficiary, settlor, member or
          beneficial owner been the Relevant Account Holder of such Underlying
          Note;

    (iii) any tax, assessment or governmental charge that would not have been
          imposed or withheld but for the failure of the Relevant Account
          Holder, if required, to comply with certification, identification or
          information reporting requirements under United States income tax
          laws, without regard to any tax treaty, with respect to the payment,
          concerning the nationality, residence, identity or connection with
          the United States of the Relevant Account Holder or a beneficial
          owner of such Underlying Note, if such compliance is required by
          United States income tax laws, without regard to any tax treaty, as
          a precondition to relief or exemption from such tax, assessment or
          governmental charge;

     (iv) any estate, inheritance, gift, sales, transfer, excise, wealth or
          personal property tax or any similar tax, assessment or governmental
          charge;

     (v)  any tax, assessment or governmental charge that is payable otherwise
          than by withholding from the payment of the amounts receivable in
          respect of such Underlying Note;

     (vi) any tax, assessment or governmental charge required to be withheld
          by any paying agent from such payment of amounts receivable in
          respect of any Underlying Note, if such payment can be made without
          such withholding by any other paying agent; or

     (vii) any combination of items (i), (ii), (iii), (iv), (v) or (vi).

     As used in this Clause, "United States" means the United States of
     America, the Commonwealth of Puerto Rico and each possession of the
     United States of America and place subject to its jurisdiction and
     "United States Alien" means any corporation, partnership, individual or
     fiduciary that, as to the United States, is for United States Federal
     income tax purposes (A) a foreign corporation, (B) a foreign partnership
     one or more of the members of which is, for United States Federal income
     tax purposes, a foreign corporation, a non-resident alien individual or a
     non-resident alien fiduciary of a foreign estate or trust, (C) a
     non-resident alien individual or (D) a non-resident alien fiduciary of a
     foreign estate or trust.

(b)  Where the Issuer is Ciba Spezialitatenchemie Holding Deutschland GmbH:

     All payments in respect of the Underlying Note by the Issuer will be made
     without withholding or deduction for or on account of any present or
     future taxes or duties of whatever nature imposed or levied by or on
     behalf of Germany or any state (Bundesland), municipality or other
     political subdivision or any authority thereof or therein having power to
     tax, unless such withholding or deduction is required by law. In such
     event, the Issuer will pay such additional amounts as shall be necessary
     in order that the net amounts received by the Relevant Account Holders
     after such withholding or deduction shall equal the amounts which would
     otherwise have been receivable in respect of the Underlying Note in the
     absence of such withholding or deduction; except that no such additional
     amounts shall be payable with respect to any Underlying Note to or to the
     order of a Relevant Account Holder who is liable for such taxes or duties
     in respect of such Underlying Note by reason of his having some
     connection with Germany other than the mere holding of such Underlying

<PAGE>

                                      48

     Note or with respect to any Underlying Note presented for payment to a
     paying agent which is required to deduct or withhold an amount for or on
     account of such taxes or duties if such amount can be paid without any
     deduction or withholding for or on account of any taxes or duties by any
     other paying agent. Any advance income tax (Zinsabschlagsteuer) levied in
     Germany since 1993 as well as the solidarity surcharge
     (Solidaritatszuschlag) imposed thereon since 1995 do not constitute a
     withholding or deduction within the meaning of this Clause 4(b).

(c)  Where the Issuer is Ciba Specialty Chemicals PLC:

     All payments by the Issuer in respect of the Underlying Notes shall be
     made without withholding or deduction for or on account of any present or
     future tax, duty or charge of whatever nature imposed or levied by or on
     behalf of the United Kingdom, or any authority thereof or therein having
     power to tax unless the withholding or deduction is required by law. In
     that event, the Issuer shall pay such additional amounts as will result
     (after such withholding or deduction) in the receipt by the Relevant
     Account Holders of the sums which would have been receivable (in the
     absence of such withholding or deduction) from the Issuer in respect of
     their Underlying Notes; except that no such additional amounts shall be
     payable with respect to any Underlying Note to or to the order of a
     person liable to such tax, duty or charge in respect of such Underlying
     Note by reason of his having some connection with the United Kingdom
     other than the mere holding or ownership of such Underlying Note or with
     respect to any Underlying Note presented for payment to a paying agent
     which is required to deduct or withhold an amount for or on account of
     such tax, duty or charge if such amount can be paid without any deduction
     or withholding for or on account of any tax, duty or charge by any other
     paying agent.

5.   Each Issuer hereby warrants, represents and covenants with each Relevant
     Account Holder that it has all corporate power, and has taken all
     necessary corporate or other steps, to enable it to execute, deliver and
     perform this Deed, and that this Deed constitutes a legal, valid and
     binding obligation of the relevant Issuer enforceable in accordance with
     its terms subject to the laws of bankruptcy and other laws affecting the
     rights of creditors generally.

6.   This Deed shall take effect as a Deed Poll for the benefit of the
     Relevant Account Holders from time to time and for the time being. This
     Deed shall be deposited with and held by a depository for Clearstream,
     Luxembourg and Euroclear, or any successor to the business thereof and
     for the time being (being at the date hereof The Chase Manhattan Bank at
     Trinity Tower, 9 Thomas More Street, London E1 9YT) until all the
     obligations of each Issuer hereunder have been discharged in full.

7.   Each Issuer hereby acknowledges the right of every Relevant Account
     Holder to the production of, and the right of every Relevant Account
     Holder to obtain (upon payment of a reasonable charge) a copy of, this
     Deed, and further acknowledges and covenants that the obligations binding
     upon it contained herein are owed to, and shall be for the account of,
     each and every Relevant Account Holder, and that each Relevant Account
     Holder shall be entitled severally to enforce the said obligations
     against the relevant Issuer.

8.   No rights are conferred on any person under the Contracts (Rights of
     Third Parties) Act 1999 to enforce any term of this Deed, but this does
     not affect any right or remedy of any person which exists or is available
     apart from that Act.

<PAGE>

                                      49

9.   This Deed is governed by, and shall be construed in accordance with, the
     laws of England.

     Each Issuer hereby irrevocably agrees, for the exclusive benefit of the
     Relevant Account Holders, that the courts of England are to have
     jurisdiction to settle any dispute which may arise out of, or in
     connection with, this Deed and that accordingly any suit, action or
     proceedings (together referred to as "Proceedings") arising out of, or in
     connection with, this Deed may be brought in such courts. Each Issuer
     irrevocably waives any objection which it may have now or hereafter to
     the laying of the venue of any Proceedings in any such court and any
     claim that any such Proceedings have been brought in an inconvenient
     forum and further irrevocably agrees that a judgment in any Proceedings
     brought in the English courts shall be conclusive and binding upon the
     relevant Issuer and may be enforced in the courts of any other
     jurisdiction (subject to the laws of the jurisdiction in which
     enforcement is sought). Nothing contained in this Clause shall limit any
     right to take Proceedings against any Issuer in any other court of
     competent jurisdiction, nor shall the taking of Proceedings in one or
     more jurisdictions preclude the taking of Proceedings in any other
     jurisdiction, whether concurrently or not (subject to the laws of the
     relevant jurisdictions). Ciba Specialty Chemicals Corporation and Ciba
     Spezialitatenchemie Holding Deutschland GmbH each hereby appoints Ciba
     Specialty Chemicals PLC at its registered office for the time being to
     accept service of process on its behalf. If Ciba Specialty Chemicals PLC
     shall cease to be registered under the laws of England and Wales, the
     relevant Issuer shall appoint another person with an office in London to
     accept such service. Nothing herein shall affect the right to serve
     process in any other manner permitted by law.

10.  This Deed may be executed by any one or more of the parties hereto in any
     number of counterparts, each of which shall be deemed to be an original,
     but all such counterparts shall together constitute one and the same
     instrument.

IN WITNESS whereof each Issuer has caused this Deed to be duly executed the
day and year first above mentioned.

<PAGE>

                                      50

EXECUTED as a Deed under            )
Seal by CIBA SPECIALTY CHEMICALS    )
CORPORATION                         )
and SIGNED and                      )
DELIVERED as a deed on its          )
behalf by                           )
in the presence of:                 )

Witness's
Signature ....................................

Name       ...................................

Address   ....................................

            ..................................

EXECUTED as a Deed under            )
Seal by CIBA SPECIALTY CHEMICALS    )
PLC and SIGNED and DELIVERED as     )
a deed on its behalf by             )
in the presence of:                 )

Witness's
Signature ....................................

Name       ...................................

Address   ....................................

            ..................................

<PAGE>

                                      51

EXECUTED as a Deed under            )
Seal by CIBA SPEZIALITATENCHEMIE    )
HOLDING DEUTSCHLAND GMBH            )
and SIGNED and DELIVERED as         )
a deed on its behalf by             )
                                    )
in the presence of:                 )

Witness's
Signature ....................................

Name       ...................................

Address   ....................................

            ..................................

<PAGE>

                                      52

                                  SIGNATORIES

The Issuers

CIBA SPECIALTY CHEMICALS CORPORATION
560 White Plains Road
Tarrytown
New York
10591-9005

Telephone:             001 914 785 2000
Telefax:               001 914 785 2183
Attention:             Treasurer

By:     OLIVER STRUB                         KIRK ERSTLING

CIBA SPECIALTY CHEMICALS PLC
Hulley Road
Macclesfield
Cheshire
SK10 2NX

Telephone:             44 1 625 421 933
Telefax:               44 1 625 619 637
Attention:             Treasurer

By:     OLIVER STRUB                         KIRK ERSTLING

CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
Chemiestrasse
D-68623 Lampertheim
Germany

Telephone:             00 49 620 6150
Telefax:               00 49 620 6151368
Attention:             Treasurer

By:     OLIVER STRUB                         KIRK ERSTLING

<PAGE>

                                      53

The Guarantor

CIBA SPECIALTY CHEMICALS HOLDING INC.
Klybeckstrasse 141
CH-4002 Basle
Switzerland

Telephone:             00 41 61 636 2740
Telefax:               00 41 61 636 6828
Attention:             Group Treasurer

By:     OLIVER STRUB                         KIRK ERSTLING

The Dealers

CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
One Cabot Square
London E14 4QJ

Telephone:             020 7888 4021
Telex:                 892131 CSFB G
Telefax                020 7888 3719
Attention:             MTN Trading

DEUTSCHE BANK AG LONDON
Winchester House
1 Great Winchester Street
London EC2N 2DB

Telephone:             020 7545 2761
Telefax:       020 7541 2761
Telex:                 94015555 DBLN G
Attention:             MTN Desk

GOLDMAN SACHS INTERNATIONAL
Peterborough Court
133 Fleet Street
London EC4A 2BB

Telephone:             020 7774 2295
Telex:                 94012165 GSHH G
Telefax:               020 7774 5711
Attention:             Euro Medium Term Note Desk

<PAGE>

                                      54

J.P. MORGAN SECURITIES LTD.
60 Victoria Embankment
London EC4Y 0JP

Telephone:             020 7779 3469
Telex:                 8954804 MGLTD G
Telefax:               020 7325 8225
Attention:             Euro Medium Term Note Desk

Each by its duly authorised signatory:  ALISTAIR FERGUSON

UBS AG, acting through its business group UBS Warburg
1 Finsbury Avenue
London EC2M 2PP

Telephone:             44 20 7567 2324
Telex:                 887434 UBSW G
Telefax:               44 20 7568 3349
Attention:             MTNs and Private Placements

By:     BERT SUER             By:     ALISTAIR FERGUSON

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