Document:

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                                                              Exhibit 10(e)

                                  AGREEMENT

         AGREEMENT by and between Solutia Inc., a Delaware corporation (the
"Company"), and John F. Saucier (the "Executive"), dated as of the 19th day
of July 2004 (the "Effective Date").

         The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its stakeholders to
assure that the Company will have the continued dedication of the Executive
for a substantial period of time. To induce the Executive to continue to
serve the Company until June 30, 2006, the Company will provide the
Executive with, among other things, a cash retention payment, payable in
installments, and a special transaction bonus. It is the Board's judgment
that such a retention arrangement and special bonus arrangement is in the
best interest of the Company and its stakeholders, and is consistent with
the desire of the Board to maximize the value of the Company. Therefore, in
order to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.

         NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

         1. Retention and Special Bonus Payments.
            ------------------------------------

                  (a) The Company shall pay to the Executive a cash
retention payment of $600,000 in four equal installments of $150,000 payable
on each of the date on which this agreement is approved by the United States
Bankruptcy Court for the Southern District of New York, December 31, 2004,
June 30, 2005 and December 31, 2005, provided that, with respect to each
such installment payment, the Executive has been continuously employed by
the Company from the Effective Date through the date of such installment
payment.

                  (b) If, upon the occurrence of a Change in Control, the
Executive (i) is employed by the Company and (ii) is not offered an
employment agreement providing terms of employment substantially similar to
those under which he is employed at the Effective Date, then the Company
shall pay to the Executive both (x) a special bonus of $400,000, and (y) any
cash retention payments referred to in Section 1(a) that have accrued but
not theretofore been paid, both such special bonus and retention payments to
be paid in a lump sum in cash within ten days of the Company's receipt from
the Executive of a Waiver and Release executed and delivered in the manner
described in Section 10(g) hereof. If the special bonus is paid to the
Executive pursuant to this paragraph, then no amounts except for the Accrued
Obligations (as defined below), if any, and the Other Benefits (as defined
below), if any, shall be payable to the Executive pursuant to Section 5.

         2. Employment Period. The Company hereby agrees to continue the
            -----------------
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this Agreement,
for the period (the "Employment Period") commencing on the Effective Date
and ending on June 30, 2006. Where the context permits, all references to
the Company shall include an affiliate of the Company by which the Executive
is employed. As used in this Agreement, the term "affiliate" or "affiliated
companies" shall include any company controlled by, controlling or under
common control with the Company. The obligations of the Company and the
Executive under this Agreement including, without limitation, the obligations

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under Sections 5, 6 and 7, shall survive the termination of the Employment
Period to the extent necessary to accomplish the purposes thereof.

         3. Terms of Employment.
            -------------------

                  (a) Position and Duties.
                      -------------------

                           (i) During the Employment Period, (A) the
         Executive shall serve as President, Integrated Nylon of the
         Company, with such authority, duties, responsibilities and
         reporting requirements as may be reasonably assigned to him from
         time to time by the Company's Chief Executive Officer and (B) the
         Executive's services shall be performed at the location where the
         Executive was employed immediately preceding the Effective Date or
         at any office or location of the Company not more than 50 miles
         from the Company's headquarters in St. Louis, Missouri.

                           (ii) During the Employment Period, the Executive
         shall serve the Company faithfully, diligently and to the best of
         his ability, and shall devote substantially all of his time and
         efforts during normal business hours to the business and affairs of
         the Company. During the Employment Period it shall not be a
         violation of this Agreement for the Executive to (A) deliver
         lectures, fulfill speaking engagements or teach at educational
         institutions, and (B) manage personal investments, so long as such
         activities described in clauses A and B do not interfere with the
         performance of the Executive's responsibilities as an employee of
         the Company in accordance with this Agreement, and (C) with the
         advance approval of the Board, serve on corporate, civic or
         charitable boards or committees.

                  (b) Compensation.
                      ------------

                           (i) Base Salary. The Executive shall receive an
                               -----------
         annual base salary ("Annual Base Salary") of not less than $320,000
         which shall be retroactive to May 5, 2004, and which shall be paid
         in accordance with the Company's normal payroll practices.

                           (ii) Annual Bonuses. In addition to Annual Base
                                --------------
         Salary, the Executive shall participate in the Company's Annual
         Incentive Program, or any successor annual bonus plan(s), with a
         target annual bonus opportunity equal to 100% of his Annual Base
         Salary. In addition, during the Employment Period, the Executive
         shall be entitled to participate in all long-term and other
         incentive plans, practices, policies and programs generally
         applicable to senior executives of the Company and its affiliated
         companies.

                           (iii) Savings and Retirement Plans. During the
                                 ----------------------------
         Employment Period, the Executive shall be entitled to participate
         in all savings and retirement plans, practices, policies and
         programs generally applicable to senior executives of the Company
         and its affiliated companies, subject to the Board's authority to
         modify or terminate any such plans, practices, policies and
         programs on a Company-wide basis at any time.

                           (iv) Welfare Benefit Plans. During the Employment
                                ---------------------
         Period, the Executive and/or the Executive's family, as the case
         may be, shall be eligible for

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         participation in and shall receive all benefits under welfare
         benefit plans, practices, policies and programs provided by the
         Company and its affiliated companies (including, without
         limitation, medical, prescription, dental, disability, salary
         continuance, employee life, group life, accidental death and travel
         accident insurance plans and programs) to the extent generally
         applicable to senior executives of the Company and its affiliated
         companies, subject to the Board's authority to modify or terminate
         any such plans, practices, policies and programs on a Company-wide
         basis at any time.

                           (v) Expenses. During the Employment Period, the
                               --------
         Executive shall be entitled to receive prompt reimbursement, in
         accordance with Company policy, for all reasonable expenses
         incurred by the Executive in performing his duties hereunder.

                           (vi) Vacation. During the Employment Period, the
                                --------
         Executive shall be entitled to paid vacation in accordance with the
         plans, policies, programs and practices of the Company and its
         affiliated companies as in effect from time to time.

         4. Termination of Employment.
            -------------------------

                  (a) Death or Disability. The Executive's employment shall
                      -------------------
terminate automatically upon the Executive's death during the Employment
Period. If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 9(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" shall mean
the Executive's long-term disability for purposes of any reasonable
occupation as determined under the Company's disability plan that is
applicable to the Executive.

                  (b) Cause. The Company may terminate the Executive's
                      -----
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:

                           (i) the willful and continued failure of the
         Executive to perform substantially the Executive's duties with the
         Company or one of its affiliates (other than any such failure
         resulting from incapacity due to physical or mental illness), after
         a written demand for substantial performance is delivered to the
         Executive by the Board or the Chief Executive Officer of the
         Company which specifically identifies the manner in which the Board
         or Chief Executive Officer believes that the Executive has not
         substantially performed the Executive's duties;

                           (ii) the willful engaging by the Executive in
         illegal conduct or gross misconduct which is materially and
         demonstrably injurious to the Company;

                           (iii) the Executive's conviction of, or plea of
         guilty or no contest to, a felony or any other crime involving
         moral turpitude, fraud, theft, embezzlement or dishonesty; or

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                           (iv) the Executive's habitual drug or alcohol
         abuse.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests
of the Company. The cessation of employment of the Executive shall not be
deemed to be for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than a majority of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable notice is
provided to the Executive and the Executive is given an opportunity,
together with counsel, in the case of conduct described in subparagraph (i)
or (ii) above, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct described
in subparagraph (i), (ii), (iii) or (iv) above, and specifying the
particulars thereof in detail.

                  (c) Good Reason. The Executive's employment may be
                      -----------
terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:

                           (i) a material failure by the Company to comply
         with any of the provisions of Section 3(b) of this Agreement
         relating to compensation, other than an isolated, insubstantial and
         inadvertent failure not occurring in bad faith and which is
         remedied by the Company promptly after receipt of notice thereof
         given by the Executive;

                           (ii) the assignment to the Executive of any
         duties inconsistent in any respect with the Executive's position as
         President, Integrated Nylon, and the authority, duties and
         responsibilities contemplated by Section 3(a) of this Agreement, or
         any other action by the Company which results in a material
         diminution in such position, authority, duties or responsibilities,
         excluding for this purpose an isolated, insubstantial and
         inadvertent action not taken in bad faith and which is remedied by
         the Company promptly after receipt of notice thereof given by the
         Executive; or

                           (iii) the Company's requiring the Executive to be
         based at any office or location other than as provided in Section
         3(a)(i)(B) hereof or the Company's requiring the Executive to
         travel on Company business to a substantially greater extent than
         required immediately prior to the Effective Date.

                  (d) Notice of Termination. Any termination by the Company
                      ---------------------
for Cause, or by the Executive for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance with
Section 9(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the

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Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of
such notice, specifies the termination date (which date shall be not more
than thirty days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Good Reason or Cause shall
not waive any right of the Executive or the Company, respectively, hereunder
or preclude the Executive or the Company, respectively, from asserting such
fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.

                  (e) Date of Termination. "Date of Termination" means (i)
                      -------------------
if the Executive's employment is terminated by the Company for Cause, or by
the Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be, (ii) if
the Executive's employment is terminated by the Company other than for Cause
or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the
Executive's employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.

                  (f) Change in Control. "Change in Control" means a sale of
                      -----------------
substantially all of the assets of the Company's Integrated Nylon reporting
segment.

         5. Obligations of the Company upon Termination.
            -------------------------------------------

                  (a) Good Reason; Other Than for Cause. If, during the
                      ---------------------------------
Employment Period, the Company shall terminate the Executive's employment
other than for Cause or the Executive shall terminate employment for Good
Reason:

                           (i) the Company shall pay to the Executive in a
         lump sum in cash within ten days of its receipt from the Executive
         of a Waiver and Release executed and delivered pursuant to Section
         10(g) hereof, the aggregate of the following amounts:

                                    A. the sum of (1) the Executive's
                  accrued Annual Base Salary through the Date of
                  Termination, (2) any annual bonus earned by the Executive
                  with respect to the previous year, and (3) any accrued
                  vacation pay, in each case to the extent not theretofore
                  paid (the sum of the amounts described in clauses (1), (2)
                  and (3) shall be hereinafter referred to as the "Accrued
                  Obligations"); and

                                    B. the sum of (1) an amount equal to
                  100% of his Annual Base Salary, and (2) the cash retention
                  payments referred to in Section 1(a) hereof but only to
                  the extent not theretofore paid to the Executive,
                  following which payment no additional amount shall
                  thereafter be paid pursuant to Section 1(a) hereof.

                           (ii) subject to the provisions of Section 9(f)
         hereof, to the extent not theretofore paid or provided, the Company
         shall timely pay or provide to the Executive any other amounts or
         benefits, excluding any severance or separation pay or benefits,
         required to be paid or provided or which the Executive is eligible
         to receive under any plan, program, policy, practice, contract or
         agreement of the Company and its affiliated companies, including,
         without limitation, the vested benefit, if any, of the Executive

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         under any qualified defined benefit or defined contribution
         retirement plan of the Company and its affiliated companies in
         which the Executive participates, in accordance with the terms of
         such plan (such other amounts and benefits shall be hereinafter
         referred to as the "Other Benefits");

                           (iii) the Company shall continue to provide at
         its expense (on the same basis as at the Executive's Date of
         Termination) for the continued participation of the Executive and,
         to the extent applicable, his family, in the Company's medical,
         dental, vision and life insurance plans and programs, for a period
         of four months commencing with the Date of Termination; and

                           (iv) upon request of the Executive, the Company
         shall provide outplacement services to the Executive for up to
         twelve months and up to an aggregate cost of $25,000.

                  (b) Death. If the Executive's employment is terminated by
                      -----
reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for timely payment or
provision of the following:

                  (i) Accrued Obligations;

                  (ii) Other Benefits;

                  (iii) an amount equal to the product of (x) $400,000 and
(y) a fraction, the numerator of which is the number of whole months that
have elapsed from July 1, 2004 through the Date of Termination, and the
denominator of which is 24; and

                  (iv) an amount equal to the product of (x) any amounts
described in Section 1(a) that remain unpaid, and (y) a fraction, the
numerator of which is the number of days that have elapsed from the
Effective Date through the Date of Termination, and the denominator of which
is the number of days between the Effective Date and June 30, 2006.

Accrued Obligations shall be paid to the Executive's estate or beneficiary,
as applicable, in a lump sum in cash within 30 days of the Date of
Termination.

                  (c) Disability. If the Executive's employment is
                      ----------
terminated by reason of the Executive's Disability during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive, other than for timely payment or provision of the following:

                  (i) Accrued Obligations;

                  (ii) Other Benefits;

                  (iii) an amount equal to the product of (x) $400,000 and
(y) a fraction, the numerator of which is the number of whole months that
have elapsed from July 1, 2004 through the Date of Termination, and the
denominator of which is 24; and

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                  (iv) an amount equal to the product of (x) any amounts
described in Section 1(a) that remain unpaid, and (y) a fraction, the
numerator of which is the number of days that have elapsed from the
Effective Date through the Date of Termination, and the denominator of which
is the number of days between the Effective Date and June 30, 2006.

Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination.

                  (d) Cause; Other than for Good Reason. If the Executive's
                      ---------------------------------
employment shall be terminated for Cause during the Employment Period, or if
the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall
terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits.
In such case, all Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination.

         6. Full Settlement; Legal Fees. The Company's obligation to make
            ---------------------------
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement, and such amounts shall not be reduced whether
or not the Executive obtains other employment. The Company agrees to pay, to
the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest, in which the
Executive is the prevailing party, by the Company, the Executive or others
of the validity or enforceability of, or liability under, any provision of
this Agreement or any guarantee of performance thereof (whether such contest
is between the Company and the Executive or between either of them and any
third party, and including as a result of any contest by the Executive about
the amount of any payment pursuant to this Agreement), plus in each case
interest on any payment from the time at which the liability for the
applicable legal fees and expenses was incurred by Executive, at the
applicable Federal rate provided for in Section 7872(f) (2)(A) of the
Internal Revenue Code of 1986, as amended (the "Code").

         7. Confidential Information and Competitive Activity.
            -------------------------------------------------

                  (a) Confidential Information. As used herein,
                      ------------------------
"Confidential Information" means all technical and business information of
the Company and its affiliated companies, whether patentable or not, which
is of a confidential, trade secret and/or proprietary character and which is
either developed by the Executive (alone or with others) or to which the
Executive has had access during the Executive's employment. "Confidential
Information" shall also include confidential evaluations of, and the
confidential use or non-use by the Company or any affiliated company of,
technical or business information in the public domain.

         The Executive shall use the Executive's best efforts and diligence
both during and after employment by the Company to protect the confidential,
trade secret and/or proprietary character of all Confidential Information.
The Executive shall not, directly or indirectly, use (for the

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Executive or another) or disclose any Confidential Information, for so long
as it shall remain proprietary or protectible as confidential or trade
secret information, except as may be necessary for the performance of the
Executive's duties with the Company.

         The Executive shall deliver promptly to the Company, at the
termination of the Executive's employment, or at any other time at the
Company's request, without retaining any copies, all documents and other
material in the Executive's possession relating, directly or indirectly, to
any Confidential Information.

         Each of the Executive's obligations in this Section shall also
apply to the confidential, trade secret and proprietary information learned
or acquired by the Executive during the Executive's employment from others
with whom the Company or any affiliated company has a business relationship.

         The Executive understands that the Executive is not to disclose to
the Company or any affiliated company, or use for its benefit, any of the
confidential, trade secret or proprietary information of others, including
any of the Executive's former employers.

                  (b) Competitive Activity; Nonsolicitation. In the event
                      -------------------------------------
that, during the Employment Period, Executive shall voluntarily terminate
his employment hereunder be terminated by the Company without Cause or
terminate his employment hereunder for Good Reason, then the Executive shall
not, directly or indirectly (whether as owner, partner, consultant, employee
or otherwise), at any time during the six months following termination of
his employment with the Company or any affiliate for any reason, engage in
or contribute his knowledge to any work or activity that involves a product,
process, apparatus, service or development which is then competitive with or
similar to a product, process, apparatus, service or development on which he
worked or with respect to which he had access to Confidential Information
while employed by the Company or an affiliate at any time during the period
of five years immediately prior to his Date of Termination ("Competitive
Work"). However, the Executive shall be permitted to engage in such proposed
work or activity, and the Company shall furnish him a written consent to
that effect signed by an officer of the Company, if the Executive shall have
furnished to the Company clear and convincing written evidence, including
assurances from the Executive and his new employer, that the fulfillment of
his duties in such proposed work or activity would not likely cause him to
disclose, base judgment upon, or use any Confidential Information. In
addition, during his employment by the Company or an affiliate and for a
period of six months thereafter, the Executive shall not, directly or
indirectly, (i) induce or attempt to induce a salaried employee of the
Company or any of its affiliates to accept employment or affiliation
involving Competitive Work with another firm or corporation of which the
Executive is an employee, owner, partner or consultant, or (ii) induce or
attempt to induce any customer, supplier, licensee or other person having a
business relationship with the Company to cease doing business with the
Company or interfere materially with the relationship between the Company
and any such customer, supplier, licensee or other person having a business
relationship with the Company.

                  (c) Injunctive Relief. Executive agrees that the
                      -----------------
restrictions imposed upon him by this Section 7 are fair and reasonable
considering the nature of the Company's business and are reasonably required
for the protection of the Company. Executive also acknowledges that a

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breach of any of the provisions of this Section 7 may result in continuing
and irreparable damages to the Company for which there may be no adequate
remedy at law, and that the Company, in addition to all other relief
available to it, shall be entitled to the issuance of a temporary
restraining order, preliminary injunction and permanent injunction
restraining the Executive from committing or continuing to commit any breach
of the provisions of this Section 7.

                  (d) Blue Pencil. If, at any time, the provisions of this
                      -----------
Section 7 shall be determined to be invalid or unenforceable under any
applicable law, by reason of being vague or unreasonable as to area,
duration or scope of activity, this Agreement shall be considered divisible
and shall become and be immediately amended to only such area, duration and
scope of activity as shall be determined to be reasonable and enforceable by
the court or other body having jurisdiction over the matter and the
Executive and the Company agree that this Agreement shall be valid and
binding as though any invalid or unenforceable provision had not been
included herein.

         8. Successors.
            ----------

                  (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.

                  (b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.

         9. Miscellaneous.
            -------------

                  (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.

                  (b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

                  If to the Executive:

                  John F. Saucier
                  [home address]

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                  If to the Company:

                  Jeffry N. Quinn, Esq.
                  President and Chief Executive Officer
                  Solutia Inc.
                  P.O. Box 66760
                  St. Louis, MO 63166-6760

                  With a copy to:

                  Rosemary L. Klein
                  Vice President, Secretary and General Counsel -
                  Corporate and External Affairs
                  Solutia Inc.
                  P.O. Box 66760
                  St. Louis, MO 63166-6760

or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.

                  (c) The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.

                  (d) The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

                  (e) The Executive's or the Company's failure to insist
upon strict compliance with any provision of this Agreement or the failure
to assert any right the Executive or the Company may have hereunder shall
not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.

                  (f) This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements, oral and written, between the parties hereto with
respect to the subject matter hereof. This Agreement also supersedes,
without limitation, the Employment Agreement dated as of February 28, 1998,
between the Company and the Executive (the "Change in Control Agreement"),
the agreement dated as of December 15, 2003 between the Company and the
Executive (the "Retention Agreement"), and any other prior employment
agreement between the Company and the Executive; provided, that this
Agreement shall have no effect on the Executive's rights under any plan,
program, policy or practice provided by the Company or any of its affiliated
companies except that the benefits and other payments provided for pursuant
to Section 5 hereof shall be in lieu of any severance or separation pay or
benefits to which the Executive might otherwise be entitled under any plan,
program, policy or arrangement of the Company and its affiliates. In

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consideration of the promises set forth in the Agreement, and of the mutual
releases set forth in this paragraph, each party hereto relinquishes all
rights, and releases the other from all promises, liabilities and
commitments that may have existed under the Change in Control Agreement, the
Retention Agreement, and any other employment agreements, which shall be
null and void and of no further effect.

                  (g) No amounts shall be payable pursuant to Section 1(b),
5(a) or 5(d) of this Agreement unless and until the Executive shall have
executed and delivered a waiver and release of claims against the Company
substantially in the form attached hereto as Exhibit A.

                  (h) Except as otherwise provided by Section 7(c), in the
event of any dispute, controversy or claim arising out of or relating to
this Agreement or Executive's employment or termination thereof, the parties
hereby agree to settle such dispute, controversy or claim in a binding
arbitration by a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, which arbitration
shall be conducted in St. Louis, Missouri. The parties agree that the
arbitral award shall be final and non-appealable and, except as otherwise
provided by Section 7(c), shall be the sole and exclusive remedy between the
parties hereunder. The parties agree that judgment on the arbitral award may
be entered in any court having competent jurisdiction over the parties or
their assets.

IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.

                                      /s/ John F. Saucier
                                      ----------------------------------------
                                      John F. Saucier

                                      SOLUTIA INC.

                                      By: /s/ Jeffry N. Quinn
                                         -------------------------------------
                                         Jeffry N. Quinn
                                         President and Chief Executive Officer

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                                                                   Exhibit A
                                                                   ---------

                             WAIVER AND RELEASE

         Reference is made to that Agreement (the "Agreement"), dated as of
July 19, 2004, by and between Solutia, Inc., a Delaware Corporation (the
"Company"), and John F. Saucier (the "Executive"). This Waiver and Release
(this "Waiver") is made as of the __ day of ____________, 200_, by the
Executive pursuant to Section 9(g) of the Agreement.

              Release and Waiver of Claims Against the Company
              ------------------------------------------------

         (a) The Executive, on behalf of himself, his agents, heirs,
successors, assigns, executors and administrators, in consideration for the
payments and other consideration provided for under the Agreement, hereby
forever releases and discharges the Company and its successors, their
affiliated entities, and their past and present directors, employees,
agents, attorneys, accountants, representatives, plan fiduciaries,
successors and assigns from any and all known and unknown causes of action,
actions, judgments, liens, indebtedness, damages, losses, claims,
liabilities, and demands of whatsoever kind and character in any manner
whatsoever arising on or prior to the date of this Waiver, including but not
limited to (i) any claim for breach of contract, breach of implied covenant,
breach of oral or written promise, wrongful termination, intentional
infliction of emotional distress, defamation, interference with contract
relations or prospective economic advantage, negligence, misrepresentation
or employment discrimination, and including without limitation alleged
violations of Title VII of the Civil Rights Act of 1964, as amended,
prohibiting discrimination based on race, color, religion, sex or national
origin; the Family and Medical Leave Act; the Americans With Disabilities
Act; the Age Discrimination in Employment Act; other federal, state and
local laws, ordinances and regulations; and any unemployment or workers'
compensation law, excepting only those obligations of the Company expressly
recited in the Agreement or this Waiver and any claims to benefits under the
Company's employee benefit plans as defined exclusively in written plan
documents; (ii) any and all liability that was or may have been alleged
against or imputed to the Company by the Executive or by anyone acting on
his behalf; (iii) all claims for wages, monetary or equitable relief,
employment or reemployment with the Company in any position, and any
punitive, compensatory or liquidated damages; and (iv) all rights to and
claims for attorneys' fees and costs except as otherwise provided herein or
in the Agreement.

         (b) The Executive shall not file or cause to be filed any action,
suit, claim, charge or proceeding with any federal, state or local court or
agency relating to any claim within the scope of this Waiver. In the event
there is presently pending any action, suit, claim, charge or proceeding
within the scope of this Waiver, or if such a proceeding is commenced in the
future, the Executive shall promptly withdraw it, with prejudice, to the
extent he has the power to do so. The Executive represents and warrants that
he has not assigned any claim released herein, or authorized any other
person to assert any claim on his behalf.

         (c) In the event any action, suit, claim, charge or proceeding
within the scope of this Waiver is brought by any government agency,
putative class representative or other third party to

                                     12

<PAGE>
<PAGE>

vindicate any alleged rights of the Executive, (i) the Executive shall,
except to the extent required or compelled by law, legal process or
subpoena, refrain from participating, testifying or producing documents
therein, and (ii) all damages, inclusive of attorneys' fees, if any,
required to be paid to the Executive by the Company as a consequence of such
action, suit, claim, charge or proceeding shall be repaid to the Company by
the Executive within ten (10) days of his receipt thereof.

         (d) In the event of a breach of this Waiver by the Executive, the
Company's obligations pursuant to the Agreement shall cease as of the date
of such breach. Furthermore, the Executive understands that his breach of
the provisions of this Waiver will cause monetary damages to the Company.
Thus, should the Executive breach the provisions of this Waiver, he shall be
required to pay the Company, as liquidated damages, the amount of the
consideration paid by the Company to the Executive pursuant to the Agreement
plus all costs and expenses, including all attorneys' fees and expenses,
that the Company incurs in enforcing this Waiver. The Executive agrees that
the foregoing amount of liquidated damages is reasonable and necessary, and
does not constitute a penalty.

         Voluntary Execution of Waiver.
         ------------------------------

         BY HIS SIGNATURE BELOW, THE EXECUTIVE ACKNOWLEDGES THAT:

         (A) I HAVE RECEIVED A COPY OF THIS WAIVER AND WAS OFFERED A PERIOD
OF TWENTY-ONE (21) DAYS TO REVIEW AND CONSIDER IT;

         (B) IF I SIGN THIS WAIVER PRIOR TO THE EXPIRATION OF TWENTY-ONE
(21) DAYS, I KNOWINGLY AND VOLUNTARILY WAIVE AND GIVE UP THIS RIGHT OF
REVIEW;

         (C) I HAVE THE RIGHT TO REVOKE THIS WAIVER FOR A PERIOD OF SEVEN
(7) DAYS AFTER I SIGN IT BY MAILING OR DELIVERING A WRITTEN NOTICE OF
REVOCATION TO THE COMPANY'S CHIEF EXECUTIVE OFFICER OR GENERAL COUNSEL, NO
LATER THAN THE CLOSE OF BUSINESS ON THE SEVENTH DAY AFTER THE DAY ON WHICH I
SIGNED THIS WAIVER;

         (D) THIS WAIVER SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
SEVEN DAY REVOCATION PERIOD HAS EXPIRED WITHOUT THE WAIVER HAVING BEEN
REVOKED;

         (E) THIS WAIVER WILL BE FINAL AND BINDING AFTER THE EXPIRATION OF
THE REVOCATION PERIOD REFERRED TO IN (C). I AGREE NOT TO CHALLENGE ITS
ENFORCEABILITY;

         (F) I AM AWARE OF MY RIGHT TO CONSULT AN ATTORNEY, HAVE BEEN
ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY, AND HAVE HAD THE OPPORTUNITY
TO CONSULT WITH AN ATTORNEY, IF DESIRED, PRIOR TO SIGNING THIS WAIVER;

                                     13

<PAGE>
<PAGE>

         (G) NO PROMISE OR INDUCEMENT FOR THIS WAIVER HAS BEEN MADE EXCEPT
AS SET FORTH IN THIS WAIVER;

         (H) I AM LEGALLY COMPETENT TO EXECUTE THIS WAIVER AND ACCEPT FULL
RESPONSIBILITY FOR IT; AND

         (I) I HAVE CAREFULLY READ THIS WAIVER, ACKNOWLEDGE THAT I HAVE NOT
RELIED ON ANY REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN
THIS DOCUMENT OR THE AGREEMENT, AND WARRANT AND REPRESENT THAT I AM SIGNING
THIS WAIVER KNOWINGLY AND VOLUNTARILY.

         Intending to be legally bound, I have signed this Waiver as of the
date first set forth above.

                                       ---------------------------------------
                                       John F. Saucier

                                     14<PAGE>

                                                               Exhibit 10(f)

              AMENDMENT NO. 2 TO FINANCING AGREEMENT AND WAIVER

         THIS AMENDMENT NO. 2 TO FINANCING AGREEMENT AND WAIVER, dated as of
July 20, 2004 (this "Amendment"), by and among Solutia Inc., as a debtor and
                     ---------
debtor-in-possession, a Delaware corporation (the "Parent"), and Solutia
                                                   ------
Business Enterprises, Inc., as a debtor and debtor-in-possession, a New York
corporation, ("Solutia Business" and together with the Parent, each a
               ----------------
"Borrower" and collectively, the "Borrowers"), each subsidiary of the Parent
 --------                         ---------
listed as a "Guarantor" on the signature pages hereto, each as a debtor and
debtor-in-possession (each a "Guarantor" and collectively, the
                              ---------
"Guarantors"), the lenders from time to time party hereto (each a "Lender"
 ----------                                                        ------
and collectively, the "Lenders"), the issuers from time to time party hereto
                       -------
(each an "Issuer" and collectively, the "Issuers"), Citicorp USA, Inc.
          ------                         -------
("CUSA"), as collateral agent for the Lenders (in such capacity, the
  ----
"Collateral Agent"), CUSA, as administrative agent for the Lenders (in such
 ----------------
capacity, the "Administrative Agent"), and CUSA and Wells Fargo Foothill,
               --------------------
LLC, as co-documentation agents for the Lenders, (in such capacity, the
"Documentation Agent" and together with the Collateral Agent and the
 -------------------
Administrative Agent, each an "Agent" and collectively, the "Agents").
                               -----                         ------

                                  RECITALS:

         WHEREAS, the Borrowers, the Guarantors, the Lenders, the Issuers,
and the Agents have heretofore entered into that certain Financing
Agreement, dated as of January 16, 2004, as amended by that certain
Amendment No. 1 to Financing Agreement and Waiver, dated as of March 1, 2004
(as so amended, the "Financing Agreement");
                     -------------------

         WHEREAS, the Borrowers, the Guarantors, the Lenders, the Issuers
and the Agents now desire to amend the Financing Agreement in certain
respects, as hereinafter provided; and

         WHEREAS, the Borrowers have requested the Lenders to waive
compliance with certain provisions of the Financing Agreement.

         NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

                                  ARTICLE I

                                 DEFINITIONS

                  Section 1.01 Definitions. Unless otherwise defined or the
                               -----------
context otherwise requires, terms for which meanings are provided in the
Financing Agreement shall have such meanings when used in this Amendment.

<PAGE>
<PAGE>

                                 ARTICLE II

                                 AMENDMENTS

                  Section 2.01 Amendments to Section 1.01 of the Financing
                               -------------------------------------------
Agreement.
---------

                           (a) Section 1.01 of the Financing Agreement is
hereby amended by inserting the following definitions of "Astaris Deferral
                                                          ----------------
Agreement", "Astaris Deferred Receivables", "Astaris Operating Agreement",
---------    ----------------------------    ---------------------------
"Chlorobenzene Business", "Liquidity Event", "Permitted Non-Cash
 ----------------------    ---------------    ------------------
Consideration", "Specified Intellectual Property", and "Specified Service
-------------    -------------------------------        -----------------
Contracts" in the proper alphabetical position:
---------

                           "'Astaris Deferral Agreement' means a written
                             --------------------------
         contract between Astaris and the Parent regarding the deferral of
         payments referred to in Section 8.02(j)(v) under the Astaris
                                 ------------------
         Operating Agreement, providing for repayment of all Astaris
         Deferred Receivables no later than the earlier of (i) a Liquidity
         Event, or (ii) October 1, 2005."

                           "'Astaris Deferred Receivables' means Receivables
                             ----------------------------
         payable with respect to the Astaris Operating Agreement that have
         been outstanding for more than 30 days."

                           "'Astaris Operating Agreement' means the Master
                             ---------------------------
         Lease and Operating Agreement, dated as of April 1, 2000, between
         Astaris and the Parent, as amended from time to time."

                           "'Chlorobenzene Business' means the line of
                             ----------------------
         business operated out of the Krummrich, Illinois and Anniston,
         Alabama facilities which produces Mono-chlorobenzenes and
         Di-chlorobenzenes primarily for use in herbicides, general and
         process solvents, dies, pigments, deodorizers and pesticides."

                           "'Liquidity Event' means, with respect to a
                             ---------------
         Person, means any one of the following: (i) a merger or
         consolidation of such Person with or into another Person, (ii) the
         sale, transfer or lease of all or or a substantial portion of the
         assets of such Person, (iii) a sale of Capital Stock of such
         Person, or (iv) an issuance of funded Indebtedness of such Person."

                           "'Permitted Non-Cash Consideration' means
                             --------------------------------
         preferred stock, notes, or other contracts providing for payment of
         an obligation in cash over time."

                           "'Specified Intellectual Property' means, with
                             -------------------------------
         respect to the permitted disposition of any Subsidiary, line of
         business, or facility, intellectual property used or useful with
         respect to such Subsidiary, line of business, or facility, the
         disposition of which would not cause a Material Adverse Effect, or
         a material adverse effect on any other Loan Party or other
         Subsidiary."

                                     2

<PAGE>
<PAGE>

                           "'Specified Service Contracts' means, with
                             ---------------------------
         respect to the permitted disposition of any Subsidiary, line of
         business, or facility, service contracts used or useful with
         respect to such Subsidiary, line of business, or facility, the
         disposition of which would not cause a Material Adverse Effect, or
         a material adverse effect on any other Loan Party or other
         Subsidiary."

                           (b) Section 1.01 of the Financing Agreement is
hereby amended by inserting the words "or loss" after the word "income"
appearing in clause (f) of the definition of "Consolidated Net Income"
therein.

                           (c) Section 1.01 of the Financing Agreement is
hereby amended by deleting clause (x) of the proviso to the definition of
"Contingent Obligation" appearing therein and inserting the following new
clause (x) in lieu thereof:

                           "(x) customary indemnification obligations which
         are (I) provided in the ordinary course to the directors, officers,
         employees, agents, independent contractors or service providers of
         the Parent or any of its Subsidiaries, (II) in connection with the
         sale or disposition of property, or (III) in connection with the
         execution in the ordinary course of business of customer supply
         contracts, service contracts and equipment or real property leases
         (or the assumption or extension of such agreements),"

                           (d) Section 1.01 of the Financing Agreement is
hereby amended by deleting the proviso appearing at the end of the
definition of "Extraordinary Receipts" appearing therein and inserting the
following words in lieu thereof:

                           "provided that "Extraordinary Receipts" shall not
                            --------
         include cash received by the Parent or any of its Subsidiaries (y)
         amounting to less than $10,000 per receipt, without limitation as
         to aggregate amount, or (z) amounting to $10,000 or more per
         receipt and less than $50,000 per receipt, up to an aggregate
         exclusion under this clause (z) of $1,000,000 for all such receipts
         per Fiscal Year."

                           (e) Section 1.01 of the Financing Agreement is
hereby amended by deleting clause (c) of the definition of "Permitted
Indebtedness" appearing therein and inserting the following new clause (c)
in lieu thereof:

                           "(c) Indebtedness evidenced by Capitalized Lease
         Obligations entered into after the Filing Date in order to finance
         Capital Expenditures made by the Loan Parties or their Subsidiaries
         in accordance with the provisions of Section 8.02(g), which
                                              ---------------
         Indebtedness, when aggregated with the principal amount of all
         Indebtedness incurred under this clause (c) and clause (d) of this
         definition, does not exceed $10,000,000 at any time outstanding;"

                           (f) Section 1.01 of the Financing Agreement is
hereby amended by inserting the words "(or substantially equivalent foreign
instruments pursuant to which the issuer agrees to honor a draft or a demand
for payment made by the third party)" after

                                     3

<PAGE>
<PAGE>

the words "letters of credit" appearing in sub-clause (y) of clause (i) of
the definition of "Permitted Indebtedness" therein.

                           (g) Section 1.01 of the Financing Agreement is
hereby amended by (i) deleting the word "and" appearing at the end of clause
(j) of the definition of "Permitted Liens" therein, (ii) deleting the period
appearing at the end of clause (k) of such definition and inserting a
semicolon in lieu thereof, and (iii) inserting the following new clauses
(l), (m) and (n) at the end thereof:

                           "(l) sales of receivables permitted by Section
                                                                 -------
8.02(c)(i)(J);
-------------

                           (m) sales of inventory subject to return
         permitted by Section 9.05(h); and
                      ---------------

                           (n) institutional controls permitted by
         governmental entities on real properties in connection with
         environmental remediation activities, including, without
         limitation, land-use restrictions, natural resource-use
         restrictions, well restriction areas, deed restrictions, deed
         notices, declaration of environmental restrictions, access
         controls, monitoring requirements, site posting requirements,
         information distribution, notification in closure letter,
         restrictive covenants, and Federal/State/county/local registries,
         in each case that do not materially impair the value of such
         property and do not materially impair such property's use by any
         Loan Party or any of its Subsidiaries in the normal conduct of such
         Person's business."

                           (h) Section 1.01 of the Financing Agreement is
hereby amended by deleting the definition of "Solutia Therminol Investment"
appearing therein and inserting the following new definition in lieu
thereof:

                           "'Solutia Therminol Investment' means the
                             ----------------------------
         investment by Solutia Chemical Co. Ltd. Suzhou in Solutia Therminol
         Co. Ltd., which shall be accomplished, first, by a dividend from
         Solutia Chemical Co. Ltd. Suzhou to each of Solutia Greater China,
         Inc. and Jiangsu Chemical Pesticide Group Company Ltd., and,
         second, by corresponding capital contributions from Solutia Greater
         China, Inc. and Jiangsu Chemical Pesticide Group Company Ltd. into
         Solutia Therminol Co. Ltd. Suzhou, it being understood that such
         investment will involve no transfer of cash from the United
         States."

                  Section 2.02 Amendment to Section 2.05 of the Financing
                               ------------------------------------------
Agreement. Section 2.05 of the Financing Agreement is hereby amended in the
---------
manner set forth below:

                           (a) Section 2.05(a)(iii) is hereby amended and
restated to read in its entirety as follows:

                                    "(iii) [intentionally omitted]."

                                     4

<PAGE>
<PAGE>

                           (b) The first sentence of Section 2.05(c)(iii) is
hereby amended and restated to read in its entirety as follows:

                           "Immediately upon any Disposition by any Loan
         Party or its Subsidiaries (other than a Disposition of assets of
         Solutia Europe or any of its Subsidiaries or a Disposition of
         assets pursuant to Section 8.02(c)(i)(L)), the Borrowers shall
                            ---------------------
         prepay the outstanding principal amount of the Loans in an amount
         equal to 100% of the Net Cash Proceeds received by such Person in
         connection with such Disposition; provided, however, that so long
                                           --------  -------
         as no Default or Event of Default has occurred and is continuing on
         the date such Person receives such Net Cash Proceeds, (A) with
         respect to the first $5,000,000 of Net Cash Proceeds received in
         respect of Dispositions pursuant to Section 8.02(c)(i)(F) of assets
                                             ---------------------
         listed on Part III of Schedule 8.02(c)(i), no prepayment shall be
                               -------------------
         required, and (B) with respect to the next $10,000,000 of Net Cash
         Proceeds received in respect of Dispositions pursuant to Section
                                                                  -------
         8.02(c)(i)(F) of assets listed on Part III of Schedule 8.02(c)(i),
         -------------                                 -------------------
         the Borrowers shall prepay the outstanding principal amount of the
         Loans in an amount equal to 50% of the Net Cash Proceeds received
         by such Person in connection with such Disposition."

                           (c) Section 2.05(c) is hereby amended by
inserting the following sentence at the end of Section 2.05(c)(iii):

                           "In the event of a Disposition of businesses
         comprising assets owned by both (x) any Loan Party or its
         Subsidiaries (other than Solutia Europe and its Subsidiaries) (the
         "DIP Assets") and (y) Solutia Europe or its Subsidiaries (the "Euro
          ----------                                                    ----
         Assets"), including either of the transactions listed as items 2
         ------
         and 3 on Part II of Schedule 8.02(c)(i), the amount of any payments
         required to be made under this clause (iii) related to the DIP
         Assets shall be determined by allocating the Net Cash Proceeds of
         such Disposition between the DIP Assets and the Euro Assets based
         upon the relative value of such assets, such allocation to be
         satisfactory to the Administrative Agent in its discretion,
         provided that it shall be understood that no mandatory prepayments
         --------
         shall be required in the event that any such Disposition shall
         involve only the assets of Solutia Europe or any of its
         Subsidiaries."

                           (d) Section 2.05(c)(v) is hereby amended and
restated to read in its entirety as follows:

                                    "(iii) [intentionally omitted]."

                           (e) Section 2.05(c)(vii)(A) is hereby amended by
deleting the words "the Agents" appearing therein and inserting in lieu
thereof the words "the Administrative Agent and the Collateral Agent".

                           (f) Section 2.05(c)(vii)(B) is hereby amended and
restated to read in its entirety as follows:

                                     5

<PAGE>
<PAGE>

                           "(B) the Borrowers shall not be required to make
         a prepayment under clause (iii) or (iv) of this Section 2.05(c)
                                                         ---------------
         (except in the event that prepayment would otherwise be required by
         another provision of this Agreement, including clause (vi) of this
         Section 2.05(c), in which event prepayment shall be made in
         ---------------
         accordance with such other provision), unless the aggregate amount
         of Net Cash Proceeds received as a result of the events described
         in such Sections exceeds $7,500,000 and any such required
         prepayment under such Sections shall be limited to the Net Cash
         Proceeds and Extraordinary Receipts, net of any reasonable expenses
         incurred in connection with such Extraordinary Receipts, exceeding
         $7,500,000."

                           (g) Section 2.05(d) is hereby amended by (i)
inserting the word "and" at the end of Section 2.05(d)(ii), (ii) deleting
the text "; and" appearing at the end of Section 2.05(d)(iii) and inserting
a period in lieu thereof, and (iii) deleting Section 2.05(d)(iv) in its
entirety.

                  Section 2.03 Amendment to Section 6.01 of the Financing
                               ------------------------------------------
Agreement. Section 6.01(n) of the Financing Agreement is hereby amended by
---------
inserting the words ", either directly or by contributing the principal and
interest thereof to Solutia Europe in exchange for the issuance of new
stock," after the words "convert all or a portion thereof" appearing in
clause (B) thereof.

                  Section 2.04 Amendment to Section 7.01 of the Financing
                               ------------------------------------------
Agreement. Section 7.01 of the Financing Agreement is hereby amended in the
---------
manner set forth below:

                           (a) Section 7.01(o)(ii) is hereby amended by
inserting the words ", except to the extent rejected by any Loan Party
following the Petition Date in accordance with the terms hereof" following
the words "is in full force and effect" appearing in the fourth sentence
therein.

                           (b) Section 7.01(r)(xvi) of the Financing
Agreement is hereby amended and restated to read in its entirety as follows:

                                    "(xvi) based upon the best information
         available to the Loan Parties on July 20, 2004, the Loan Parties
         have a good faith belief that they will not (A) exceed by
         $5,000,000 any of the annual or aggregate Environmental Liabilities
         and Costs for any of the "Operating Facilities" set forth on Part B
         of Schedule 7.01(r) or (B) exceed by ten percent (10%) or more the
            ----------------
         combined annual or aggregate Environmental Liabilities and Costs
         for all of such "Operating Facilities" set forth on Part B of
         Schedule 7.01(r); and".
         ----------------

                  Section 2.05 Amendment to Section 8.01 of the Financing
                               ------------------------------------------
Agreement. Section 8.01 of the Financing Agreement is hereby amended in the
---------
manner set forth below:

                           (a) The first paragraph of Section 8.01(a) is
hereby amended and restated to read in its entirety as follows:

                                     6

<PAGE>
<PAGE>

                           "(a) Reporting Requirements. Furnish (which may
                                ----------------------
         be effectuated via electronic mail in accordance with the
         electronic mail address designated by each Agent and each Lender to
         the Administrative Borrower in writing, provided that, if any such
         Agent requests that such reports or other information be delivered
         by mail, telecopier or courier, then such reports or other
         information shall be delivered by such manner in accordance with
         Section 13.01) to each Agent and each Lender:"
         -------------

                           (b) Section 8.01(a)(xviii) is hereby amended by
deleting the words "written reports" appearing therein and inserting the
words "material written reports and presentations" in lieu thereof.

                           (c) Section 8.01(b) is hereby amended by
inserting the words "(x) with a Current Value in excess of $5,000,000 in the
case of a fee interest, or (y) requiring the payment of annual rent
exceeding in the aggregate $2,500,000 in the case of a leasehold interest,"
after the words "one or more Mortgages creating on the real property of such
Subsidiary" appearing in sub-clause (D) of clause (i) thereof.

                           (d) Section 8.01(d) is hereby amended by
inserting the words "other than the Significant Subsidiary described in item
3 on Part II of Schedule 8.02(c)(i) in connection with the disposition of
the business described in such item" after the words "makes such
qualification necessary".

                           (e) Section 8.01(h) is hereby amended by
inserting the words "(as adjusted appropriately to take into account changes
to business operations and liabilities subject to compromise)" after the
words "insurance maintained by the Parent and its Subsidiaries on the
Facility Effective Date" in contained in the first sentence therein.

                           (f) Clause (iii) of Section 8.01(j) is hereby
amended and restated to read in its entirety as follows:

                           "(iii) provide the Administrative Agent and the
         Collateral Agent written notice within ten (10) days of any Release
         of a Hazardous Material in excess of any reportable quantity from
         or onto property owned or operated by it or any of its Subsidiaries
         for which it is reasonably foreseeable that such Release would
         result in the need to take any Remedial Actions of soil,
         groundwater, or surface water required under Environmental Laws;"

                           (g) Clause (v) of Section 8.01(j) is hereby
amended and restated to read in its entirety as follows:

                           "(v) provide the Collateral Agent with prompt
         written notice if the Loan Parties will (A) exceed by $5,000,000
         any of the annual or aggregate Environmental Liabilities and Costs
         for any of the "Operating Facilities" set forth on Part B of
         Schedule 7.01(r) or (B) exceed by ten percent (10%) or more the
         ----------------
         combined annual or aggregate Environmental Liabilities and Costs
         for all of such "Operating Facilities" set forth on Part B of
         Schedule 7.01(r); and"
         ----------------

                                     7

<PAGE>
<PAGE>

                           (h) Section 8.01(r) is hereby amended by
inserting the following new clause (iv):

                                    "(iv) As soon as practicable but not
         later than September 30, 2004, or such later date as may be agreed
         to by the Administrative Agent in its sole discretion, either (A)
         deliver to the Administrative Agent an Astaris Deferral Agreement,
         together with any necessary approvals of the Bankruptcy Court with
         respect thereto, such agreement and approvals to be reasonably
         satisfactory in form and substance to the Administrative Agent, or
         (B) commence collecting all Receivables with respect to the Astaris
         Operating Agreement on a basis no less frequent than monthly, such
         that no Receivables arising after September 30, 2004 (or such later
         date) with respect to such agreement become Astaris Deferred
         Receivables, provided, however, that if Astaris were to become a
                      --------  -------
         debtor in a case under the Bankruptcy Code, the Loan Parties'
         failure to comply with this Section 8.01(r)(iv) shall not be an
                                     -------------------
         Event of Default so long as, and to the extent that, the Loan
         Parties are prevented from enforcing their rights with respect to
         the Astaris Deferred Receivables by operation of the automatic stay
         of Section 362 of the Bankruptcy Code."

                  Section 2.06 Amendment to Section 8.02 of the Financing
                               ------------------------------------------
Agreement. Section 8.02 of the Financing Agreement is hereby amended in the
---------
manner set forth below:

                           (a) Section 8.02(c)(i) is hereby amended and
restated to read in its entirety as follows:

                                    "(i) any Loan Party and its Subsidiaries
         may (A) sell Inventory in the ordinary course of business, (B) sell
         or otherwise dispose of obsolete or worn-out equipment or equipment
         no longer used in the ordinary course of business, (C) sell or
         otherwise dispose of other property or assets for cash in an
         aggregate amount not less than the fair market value of such
         property or assets, (D) enter into licensing arrangements entered
         into in the ordinary course of business, (E) sell or otherwise
         dispose of its properties or assets to any Loan Party; (F) sell or
         otherwise dispose of the assets described on Parts I, II and III of
         Schedule 8.02(c)(i) for cash in an aggregate amount not less than
         -------------------
         the fair market value of such property or assets (in each case
         except as otherwise expressly provided on such schedule); (G) sell
         or otherwise dispose of other property or assets for cash in an
         aggregate amount not less than the fair market value of such
         property or assets in an amount not to exceed $500,000 per
         transaction pursuant to sales procedures established by the
         Bankruptcy Court for non-core assets sales pursuant to an order
         dated March 29, 2004; (H) sell or otherwise dispose of other
         property or assets for cash in an aggregate amount not less than
         the fair market value of such property or assets pursuant to any
         motion under Section 363 of the Bankruptcy Code to which no Lender
         or Agent files an objection; (I) sell or otherwise dispose of other
         property or assets related to Subsidiaries or business lines that
         are liquidated or wound down in accordance with Section 8.02(c)(iv)
                                                         -------------------
         or (vii); (J) sell accounts receivable (including sales of such
            -----
         accounts receivable at a

                                     8

<PAGE>
<PAGE>

         discount to face value) for cash in an amount not less than the
         fair market value of such accounts receivable, as follows: (I)
         Subsidiaries who are not Loan Parties may sell, as part of one or
         more financings, on a non-recourse basis, at a discount of not
         greater than 5% of face value, up to $5,000,000 in aggregate
         principal amount of Accounts Receivable during any 90-day period
         (measured on a rolling basis); (II) Subsidiaries who are not Loan
         Parties may sell, as part of one or more financings, on a recourse
         basis, at a discount of not greater than 5% of face value, up to
         $2,000,000 in aggregate principal amount of Accounts Receivable
         during any 90-day period (measured on a rolling basis); and (III)
         any Loan Party and its Subsidiaries may sell, on a non-recourse
         basis, up to $5,000,000 in aggregate principal amount of additional
         Accounts Receivable in addition to those specified in subclauses
         (I) and (II) above; (K) enter into leases and subleases of real
         property in the ordinary course of business and subject to the
         other provisions herein; and (L) make charitable donations, subject
         to approval of the Bankruptcy Court (as required) and so long as no
         Default or Event of Default shall have occurred and be continuing
         either before or after giving effect to any such donation, (y) of
         cash or property in the ordinary course of business consistent with
         past practices, such donations not to exceed $5,000 in value for
         each donation and not to exceed $50,000 in aggregate amount and (z)
         of parcels of real property specified on Part IV of Schedule
                                                             --------
         8.02(c)(i); provided that the Net Cash Proceeds of such
         ----------  --------
         Dispositions (x) in the case of clauses (B) and (C) above, do not
         exceed $5,000,000 in the aggregate in any 12-month period (Net Cash
         Proceeds of earn-out payments referred to in Section 8.02(e)(xiv)
                                                      --------------------
         to be included as of the date when actually received), (y) in the
         case of clauses (G) through (I) above, do not exceed $5,000,000 in
         the aggregate, and (z) in all cases, are paid to the Administrative
         Agent for the benefit of the Lenders pursuant to the terms of
         Section 2.05(c); provided, further, that other than (x) parcels of
         ---------------  --------  -------
         real property set forth on Part III of Schedule 8.02(c)(i), (y)
                                                -------------------
         sales or other dispositions of Principal Properties or portions
         thereof pursuant to clause (G) above, and (z) dispositions of
         immaterial portions of any Principal Property that are subject and
         subordinate to the Lien of the Collateral Agent for the benefit of
         the Lenders (including, without limitation, the entry into leases
         and subleases and the grant of easements), no Loan Party may sell
         or otherwise dispose of any Principal Property."

                           (b) Section 8.02(c) is hereby further amended by
(i) deleting the word "and" appearing at the end of Section 8.02(c)(iv),
(ii) deleting the period appearing at the end of Section 8.02(c)(v) and
inserting a semicolon in lieu thereof, and (iii) inserting the following
Sections 8.02(c)(vi) through 8.02(c)(ix):

                                    "(vi) any Loan Party and its
         Subsidiaries may, subject to approval of the Bankruptcy Court (as
         required), purchase or otherwise acquire all or substantially all
         of the assets of entities having an aggregate value of not more
         than $1,000,000, such purchases and acquisitions not to exceed
         $5,000,000 in the aggregate;

                                    (vii) any Loan Party and its
         Subsidiaries may, so long as (A) no other provision of this
         Agreement would be violated thereby, and (B) no

                                     9

<PAGE>
<PAGE>

         Default or Event of Default shall have occurred and be continuing
         either before or after giving effect to such transaction, wind down
         businesses or operations constituting (x) business lines generating
         less than 2% of consolidated revenue of the Loan Parties; (y) the
         Chlorobenzene Business; or (z) the business described in item 10.C
         on Part III of Schedule 8.02(c)(i);
                        -------------------

                                    (viii) Parent may, so long as (A) no
         other provision of this Agreement would be violated thereby, and
         (B) no Default or Event of Default shall have occurred and be
         continuing either before or after giving effect to such
         transaction, liquidate the "Significant Subsidiary" described in
         item 3 on Part II of Schedule 8.02(c)(i) in connection with the
                              -------------------
         disposition of the business described in such item in accordance
         with Section 8.02(c)(i)(F) hereof; and
              ---------------------

                                    (ix) (A) CarboGen AG and Amcis AG may be
         merged into or consolidated or amalgamated with each other, so long
         as (x) no other provision of this Agreement would be violated
         thereby, and (y) no Default or Event of Default shall have occurred
         and be continuing either before or after giving effect to such
         transaction, and (B) Solutia Services International SCA/Comm.VA may
         be merged into, or consolidated or amalgamated with, Solutia
         Europe, so long as (x) no other provision of this Agreement would
         be violated thereby, (y) no Default or Event of Default shall have
         occurred and be continuing either before or after giving effect to
         such transaction, and (z) all of the non-voting Capital Stock and
         65% of the voting Capital Stock of the surviving Foreign Subsidiary
         is the subject of a Pledge Agreement, which is in full force and
         effect on the date of and immediately after giving effect to such
         merger, consolidation or amalgamation."

                           (c) Section 8.02(d) is hereby amended by deleting
the period appearing at the end thereof and inserting the words ", other
than changes permitted by Section 8.02(c)(vii)(z)." in lieu thereof.
                          -----------------------

                           (d) Section 8.02(e)(xii)(A) is hereby amended by
inserting the words "invested by any Loan Party or any Subsidiary thereof"
immediately following the figure "$3,000,000".

                           (e) Section 8.02(e) is hereby amended by (i)
deleting the word "and" appearing at the end of Section 8.02(e)(xii), (ii)
deleting the period appearing at the end of Section 8.02(e)(xiii) and
inserting a semicolon in lieu thereof, and (iii) inserting the following
Sections 8.02(e)(xiv) through 8.02(e)(xvi):

                                    "(xiv) earn-out provisions contained in
         transactions permitted by Section 8.02(c);
                                   ---------------

                                    (xv) investments in common Capital Stock
         of Solutia Europe issued pursuant to a conversion pursuant to
         Section 6.01(n), whether direct or indirect, of the intercompany
         ---------------
         convertible bond made by Solutia Europe to Solutia Investments LLC
         and Monchem International, Inc; and

                                     10

<PAGE>
<PAGE>

                                    (xvi) investments by a Loan Party or any
         Subsidiary thereof in respect of the entity listed on Part II of
         Schedule 8.02(e), the aggregate amount of such investments not to
         exceed in the aggregate the amount specified on such schedule,
         provided, that (A) both immediately before and after the making of
         --------
         any such investment, no Default or Event of Default has occurred or
         is continuing, (B) immediately after the making of such investments
         Availability exceeds $50,000,000, (C) such investments shall be
         subject to approval of the Bankruptcy Court (as required), (D) no
         assets or property (including cash and cash equivalents) of any
         Loan Party shall be used, directly or indirectly (including by way
         of loans, advances, guarantees, or investments in Capital Stock of
         any Subsidiary), to acquire, hold, or maintain, or to provide the
         necessary funds to acquire, hold or maintain, any investment
         acquired, owned, held or maintained by any Subsidiary that is not a
         Loan Party, and (E) in the case of any investment by any Loan
         Party, any Capital Stock or other assets received in respect of
         such investment shall be pledged in accordance with the
         requirements of the Loan Documents."

                           (f) Section 8.02(f) is hereby amended by (i)
inserting the words "other than in connection with any of (x) the Maryville
Centre headquarters located in St. Louis, Missouri, (y) the Westport
facility located in St. Louis, Missouri, or (z) the European headquarters
located in Louvain la Neuve, Belgium" immediately following the words "in
connection with any sale and leaseback transaction" appearing in clause (i)
thereof, and (ii) by inserting the words "(other than in connection with the
assumption or extension of leases in effect as of the Facility Effective
Date or the execution of leases in replacement thereof, provided such
                                                        --------
replacement leases relate to the same or substantially similar property as
the leases being replaced)" following the words "Operating Lease Obligations
with respect to leases entered into after the Facility Effective Date"
appearing in clause (ii)(B) therein.

                           (g) Section 8.02(h) is hereby further amended by
deleting the proviso at the end thereof and inserting the following text in
lieu thereof:

                                    "provided, however, (A) dividends or other
                                     --------  -------
         distribution may be made by any Loan Party to another Loan Party,
         and by any Subsidiary of a Loan Party who is not a Loan Party to
         any Loan Party or any Subsidiary of any Loan Party, (B) the Parent
         may pay dividends in the form of common Capital Stock, (C) any Loan
         Party may pay service fees to Foreign Subsidiaries in connection
         with the sale of such Loan Party's Inventory to Foreign
         Subsidiaries or unrelated third parties, provided that, such
         payment would also be permitted under Section 8.02(j), (D) any
         direct or indirect Subsidiary of Solutia Europe may pay dividends
         to Solutia Europe or any Subsidiary of Solutia Europe, and (E)
         Solutia Chemical Co. Ltd. Suzhou may pay dividends to Jiangsu
         Chemical Pesticide Group Company Ltd. in connection with the
         Solutia Therminol Investment."

                           (h) Section 8.02(j) is hereby amended by (i)
deleting the word "and" appearing at the end of Section 8.02(j)(iii), (ii)
deleting the period appearing at the

                                     11

<PAGE>
<PAGE>

end of Section 8.02(j)(iii) and inserting a semicolon in lieu thereof, and
(iii) inserting the following Sections 8.02(j)(iv) and (v):

                                    "(iv) as necessary or desirable for the
         prudent operation of its business, for fair consideration and on
         terms no less favorable to it or its Subsidiaries than would be
         obtainable in a comparable arm's length transaction with a Person
         that is not an Affiliate thereof, assign, transfer, or exercise,
         directly or indirectly, the option held by Parent with respect to
         certain real property in Thailand to, or for the benefit of,
         Solutia (Thailand) Ltd., (v) the deferral, pursuant to a separate
         agreement reached prior to the Petition Date, of payments
         receivable by the Loan Parties from Astaris arising in the ordinary
         course of business under the Astaris Operating Agreement, and the
         execution, delivery and performance of the Astaris Deferral
         Agreement, and (vi) as necessary or desirable for the prudent
         operation of its business, for fair consideration and on terms no
         less favorable to it or its Subsidiaries than would be obtainable
         in a comparable arm's length transaction with a Person that is not
         an Affiliate thereof, assign or transfer any Specified Intellectual
         Property held in the name of the Parent or any Loan Party as of the
         Petition Date or Specified Service Contracts to any Subsidiaries in
         connection with the transaction described in item 3 of Part II of
         Schedule 8.02(c)(i), provided that to the extent reasonably
                              --------
         necessary to effect such transaction, consideration for such
         assignment or transfer may consist of a Receivable, so long as such
         Receivable is payable within a reasonable time and is subject to
         the Lien of the Collateral Agent for the benefit of the Lenders."

                           (i) Section 8.02(l) is hereby amended by deleting
the period at the end thereof and inserting the words ", and other than
common Capital Stock of Solutia Europe issued pursuant to a conversion
pursuant to Section 6.01(n), whether direct or indirect, of the intercompany
            ---------------
convertible bond made by Solutia Europe to Solutia Investments LLC and
Monchem International, Inc." in lieu thereof.

                           (j) Section 8.02(m)(iii) is hereby amended and
restated to read in its entirety as follows:

                           "(iii) amend, modify or otherwise change the Euro
         Indenture or any Euro Note, except for (A) amendments,
         modifications or other changes in connection with the sales listed
         as items 2 and 3 on Part II of Schedule 8.02(c)(i) as are necessary
                                        -------------------
         to effect such sales, or (B) such amendments, modifications or
         other changes in connection with the Euro Restructuring
         specifically set forth in Schedule 8.02(m) or as otherwise
                                   ----------------
         acceptable to the Required Lenders in their sole discretion;
         provided, that with respect to clauses (A) and (B) above, any such
         --------
         agreements, instruments and other documents related to any such
         sale or to the Euro Restructuring shall be delivered to the
         Administrative Agent and the Collateral Agent to provide them with
         a reasonable opportunity to review any such documents prior to the
         execution, entry or authorization thereof or consummation of any
         such sale or the Euro Restructuring, respectively; provided,
                                                            --------
         further, that with respect to clause (A) above, no such amendment,
         -------
         modification

                                     12

<PAGE>
<PAGE>

         or change shall be permitted if it could reasonably be expected to
         have an adverse effect on the Agents or the Lenders, or"

                           (k) Section 8.02(o) is hereby amended by deleting
the period appearing at the end thereof and inserting the following proviso
in lieu thereof:

                                    ", provided, further, however, that this
                                       --------  -------  -------
         Section 8.02(o) shall not prohibit, to the extent otherwise
         ---------------
         permitted hereunder, the deferral, pursuant to a separate agreement
         reached prior to the Petition Date, of payments receivable by the
         Loan Parties from Astaris arising in the ordinary course of
         business under the Astaris Operating Agreement in the manner and to
         the extent previously reported to the Administrative Agent, or the
         execution, delivery and performance of the Astaris Deferral
         Agreement pursuant to Section 8.01(r)(iv)."
                               -------------------

                           (l) Section 8.02(r) is hereby amended by deleting
the period appearing at the end thereof and inserting the following text in
lieu thereof:

                                    "in any material respect, provided,
                                                              --------
         further, however, that this Section 8.02(r) shall not prohibit, to
         -------  -------            ---------------
         the extent otherwise permitted hereunder, the deferral, pursuant to
         a separate agreement reached prior to the Petition Date, of
         payments receivable by the Loan Parties from Astaris arising in the
         ordinary course of business under the Astaris Operating Agreement
         in the manner and to the extent previously reported to the
         Administrative Agent, or the execution, delivery and performance of
         the Astaris Deferral Agreement pursuant to Section 8.01(r)(iv)."
                                                    -------------------

                           (m) Section 8.02(t) is hereby amended by (i)
deleting the word "and" appearing at the end of Section 8.02(t)(xi), (ii)
deleting the period appearing at the end of Section 8.02(t)(xii) and
inserting a semicolon in lieu thereof, and (iii) inserting the following
Sections 8.02(c)(xiii) through 8.02(c)(xv):

                                    "(xiii) in respect of other claims not
         otherwise prohibited hereunder in an aggregate amount not to exceed
         $250,000 for any claimant or $1,500,000 for all claimants, subject
         to approval of the Bankruptcy Court; (xiv) in respect of claims set
         forth on Schedule 8.02(t), so long as such claims are fully secured
         by cash collateral of the Loan Parties, or fully supported by
         letters of credit permitted hereunder, to the extent of the value
         of such cash collateral or such letters of credit; and (xv) in
         respect of that certain agreement, dated September 9, 2003, among
         Solutia, Pharmacia Corporation and Monsanto Company setting forth
         the respective settlement obligations among the parties thereto
         with respect to certain Litigation (as defined therein) in an
         amount not to exceed $5,000,000 in the aggregate in any year, plus
         reasonable fees and expenses related thereto."

                  Section 2.07 Amendment to Section 9.01 of the Financing
                               ------------------------------------------
Agreement. Section 9.01 of the Financing Agreement is hereby amended in the
---------
manner set forth below:

                                     13

<PAGE>
<PAGE>

                           (a) The second sentence of Section 9.01(a) is
hereby amended and restated to read in its entirety as follows:

                                    "On or prior to the date specified in
         Section 8.01(r)(iii), the Loan Parties shall deliver to the
         --------------------
         Administrative Agent (x) a Cash Management Agreement with respect
         to each Cash Management Account and (y) a Concentration Account
         Agreement with respect to each Concentration Account; provided,
                                                               --------
         however, that so long as account number 5015330 of Beamer Road
         -------
         Management Company at First Community Bank shall have less than
         $10,000 therein, the Loan Parties shall not be required to deliver
         a Cash Management Agreement with respect to such account unless
         requested by the Administrative Agent pursuant to the last sentence
         of this Section 9.01(a)."
                 ---------------

                           (b) Section 9.04(a) is hereby amended by
inserting the following sentence at the end thereof:

                                    "Notwithstanding the foregoing, this
         Section 9.04(a) shall not prohibit, to the extent otherwise
         ---------------
         permitted hereunder, the deferral, pursuant to a separate agreement
         reached prior to the Petition Date, of payments receivable by the
         Loan Parties from Astaris arising in the ordinary course of
         business under the Astaris Operating Agreement in the manner and to
         the extent previously reported to the Administrative Agent, or the
         execution, delivery and performance of the Astaris Deferral
         Agreement pursuant to Section 8.01(r)(iv)."
                               -------------------

                           (c) Section 9.04(b) is hereby amended by
inserting the following sentence at the end thereof:

                                    "Notwithstanding the foregoing, this
         Section 9.04(b) shall not prohibit, to the extent otherwise
         ---------------
         permitted hereunder, the deferral, pursuant to a separate agreement
         reached prior to the Petition Date, of payments receivable by the
         Loan Parties from Astaris arising in the ordinary course of
         business under the Astaris Operating Agreement in the manner and to
         the extent previously reported to the Administrative Agent, or the
         execution, delivery and performance of the Astaris Deferral
         Agreement pursuant to Section 8.01(r)(iv)."
                               -------------------

                  Section 2.08 Amendment to Section 9.05 of the Financing
                               ------------------------------------------
Agreement. Section 9.05 of the Financing Agreement is hereby amended in the
---------
manner set forth below:

                           (a) Section 9.05(h) is hereby amended and
restated to read in its entirety as follows:

                                    "(h) except as otherwise expressly
         permitted under clauses (c)(iii) and (c)(iv) above, and except for
         sales of inventory made subject to return in the ordinary course
         consistent with past practices in an amount not to exceed in the
         aggregate $100,000 at any time outstanding for any customer or
         $1,000,000 at any time outstanding for all customers (it being
         understood that any Accounts in respect of such inventory shall not
         be included among Eligible Accounts to the

                                     14

<PAGE>
<PAGE>

         extent of such return or approval rights), the Loan Parties shall
         not sell Inventory to any customer on approval, or any other basis
         which entitles the customer to return or may obligate any Loan
         Party to repurchase such Inventory; and"

                           (b) Section 9.05 is hereby amended by (i)
deleting the text "; and" appearing at the end of Section 9.05(i) and
inserting a period in lieu thereof, and (ii) deleting Section 9.05(j).

                  Section 2.09 Amendment to Section 10.01 of the Financing
                               -------------------------------------------
Agreement. Section 10.01 of the Financing Agreement is hereby amended in the
---------
manner set forth below:

                           (a) Section 10.01(k) is hereby amended by
deleting the semicolon appearing at the end thereof and inserting the words
"other than orders agreed to by any Loan Party stipulating relief with
respect to claims that are permitted to be paid pursuant to Section 8.02(t),
constituting (A) claims that are fully secured by cash collateral of the
Loan Parties, or fully supported by letters of credit permitted hereunder,
or (B) prepetition claims effected by a setoff of obligations as permitted
by section 553 of the Bankruptcy Code, in each case the payment of which is
not otherwise prohibited hereunder;" in lieu thereof.

                           (b) Section 10.01(m) is hereby amended by adding
the words "other than the Significant Subsidiary described in item 3 on Part
II of Schedule 8.02(c)(i) in connection with the disposition of the business
      -------------------
described in such item" after the words "seeking authority to do any of the
foregoing".

                  Section 2.10 Amendment to Schedule 8.02(c)(i) to the
                               ---------------------------------------
Financing Agreement. Schedule 8.02(c)(i) of the Financing Agreement is
-------------------
hereby amended and restated to read in its entirety as set forth in Exhibit
                                                                    -------
A hereto.
-

                  Section 2.11 Schedule 8.02(e) to the Financing Agreement.
                               -------------------------------------------
A new Part II to Schedule 8.02(e) is hereby added to the Financing
Agreement, which schedule shall read in its entirety as set forth in Exhibit
                                                                     -------
B hereto.
-

                  Section 2.12 Schedule 8.02(t) to the Financing Agreement.
                               -------------------------------------------
A new Schedule 8.02(t) is hereby added to the Financing Agreement, which
schedule shall read in its entirety as set forth in Exhibit C hereto.
                                                    ---------

                  Section 2.13 Amendment to Schedule 9.01 to the Financing
                               -------------------------------------------
Agreement. Schedule 9.01 of the Financing Agreement is hereby amended and
---------
restated to read in its entirety as set forth in Exhibit D hereto.
                                                 ---------

                  Section 2.14 Amendment to Exhibit C to the Financing
                               ---------------------------------------
Agreement. Exhibit C to the Financing Agreement (Form of Borrowing Base
---------
Certificate) is hereby amended and restated in its entirety as set forth in
Exhibit E hereto.
---------

                  Section 2.15 Limited Waiver of Sections 6.01(n), 8.02(e)
                               -------------------------------------------
and 8.02(l) of the Financing Agreement. For avoidance of doubt, the Lenders
--------------------------------------
hereby waive compliance

                                     15

<PAGE>
<PAGE>

by the Loan Parties with the provisions of Sections 6.01(n), 8.02(e) and
8.02(l) of the Financing Agreement on a retroactive basis to the extent that
such sections would prohibit the contribution of principal and interest due
under the intercompany convertible bond made by Solutia Europe to Solutia
Investments LLC and Monchem International, Inc. (the "Convertible Bond") to
                                                      ----------------
Solutia Europe in exchange for the issuance of shares of common stock of
Solutia Europe. Such waiver does not constitute a waiver of Sections
6.01(n), 8.02(e) or 8.02(l) of the Financing Agreement as amended herein,
any other provision of the Financing Agreement or any other Loan Document or
any waiver of any other Default or Event of Default that may exist under the
Financing Agreement or arise after the date hereof or an acquiescence
therein.

                  Section 2.16 Limited Waiver of Section 8.02(c) of the
                               ----------------------------------------
Financing Agreement. For avoidance of doubt, the Lenders hereby waive
-------------------
compliance by the Loan Parties with the provisions of Section 8.02(c) of the
Financing Agreement on a retroactive basis to the extent that such section
would prohibit the wind-down of the Chlorobenzene Business. Such waiver does
not constitute a waiver of Section 8.02(c) of the Financing Agreement as
amended herein, any other provision of the Financing Agreement or any other
Loan Document or any waiver of any other Default or Event of Default that
may exist under the Financing Agreement or an acquiescence therein.

                  Section 2.17 Limited Waiver of Section 8.02(e) of the
                               ----------------------------------------
Financing Agreement. For avoidance of doubt, the Lenders hereby waive
-------------------
compliance by the Loan Parties with the provisions of Section 8.02(e) of the
Financing Agreement on a retroactive basis to the extent that such section
would prohibit execution of a sale agreement containing earnout provisions.
Such waiver does not constitute a waiver of Section 8.02(e) of the Financing
Agreement as amended herein, any other provision of the Financing Agreement
or any other Loan Document or any waiver of any other Default or Event of
Default that may exist under the Financing Agreement or arise after the date
hereof or an acquiescence therein.

                  Section 2.18 Limited Waiver of Sections 8.02(j), 8.02(o),
                               --------------------------------------------
8.02(r), and 9.04 of the Financing Agreement. For avoidance of doubt, the
--------------------------------------------
Lenders hereby waive compliance by the Loan Parties with the provisions of
Sections 8.02(j), 8.02(o), 8.02(r), and 9.04 of the Financing Agreement on a
retroactive basis to the extent that such sections would prohibit the
deferral of payments arising in the ordinary course of business under the
Astaris Operating Agreement. Such waiver does not constitute a waiver of
Sections 8.02(j), 8.02(o), 8.02(r), and 9.04 of the Financing Agreement as
amended herein, any other provision of the Financing Agreement or any other
Loan Document or any waiver of any other Default or Event of Default that
may exist under the Financing Agreement or an acquiescence therein.

                  Section 2.19 Limited Waiver of Section 8.02(t) of the
                               ----------------------------------------
Financing Agreement. For avoidance of doubt, the Lenders hereby waive
-------------------
compliance by the Loan Parties with the provisions of Section 8.02(t) of the
Financing Agreement on a retroactive basis to the extent that such section
would prohibit payments in respect of prepetition obligations owed to each
of Wells Fargo, N.A., The Business Bank of St. Louis, JPMorgan Chase Bank,
and HSBC Bank USA that are fully secured or supported by cash

                                     16

<PAGE>
<PAGE>

collateral or letter of credit obligations of the Loan Parties. Such waiver
does not constitute a waiver of Section 8.02(t) of the Financing Agreement
as amended herein, any other provision of the Financing Agreement or any
other Loan Document or any waiver of any other Default or Event of Default
that may exist under the Financing Agreement or arise after the date hereof
or an acquiescence therein.

                  Section 2.20 Limited Waiver of Section 9.01(a) of the
                               ----------------------------------------
Financing Agreement. For avoidance of doubt, the Lenders hereby waive
-------------------
compliance by the Loan Parties with the provisions of Section 9.01(a) of the
Financing Agreement on a retroactive basis to the extent that such section
would require delivery of Cash Management Agreements and Concentration
Account Agreements on or prior to the Facility Effective Date. Such waiver
does not constitute a waiver of Section 9.01(a) of the Financing Agreement
as amended herein, any other provision of the Financing Agreement or any
other Loan Document or any waiver of any other Default or Event of Default
that may exist under the Financing Agreement or arise after the date hereof
or an acquiescence therein.

                  Section 2.21 Limited Waiver of Section 9.01(c) of the
                               ----------------------------------------
Financing Agreement. For avoidance of doubt, the Lenders hereby waive
-------------------
compliance by the Loan Parties with the provisions of Section 9.01(c) of the
Financing Agreement on a retroactive basis to the extent that such section
would require (A) amendment of Schedule 9.01 to add those accounts not
                               -------------
already reflected on such schedule and (B) prior to the time of opening of
such accounts, execution and delivery of a Cash Management Agreement. Such
waiver does not constitute a waiver of Section 9.01(c) of the Financing
Agreement as amended herein (including amendments to Schedule 9.01), any
                                                     -------------
other provision of the Financing Agreement or any other Loan Document or any
waiver of any other Default or Event of Default that may exist under the
Financing Agreement or arise after the date hereof or an acquiescence
therein.

                                ARTICLE III

                            CONDITIONS PRECEDENT

                  Section 3.01 Conditions to Effectiveness of this
                               -----------------------------------
Amendment. This Amendment shall be effective as of the date hereof, upon the
---------
satisfaction of the conditions precedent that:

                           (a) Amendment. The Administrative Agent shall
                               ---------
have received executed counterparts of this Amendment, duly executed by
Lenders constituting at least Supermajority Consent, the Borrowers, each
Guarantor, the Documentation Agent, the Administrative Agent, the Collateral
Agent and the Issuer.

                           (b) Representations and Warranties. As of the
                               ------------------------------
date hereof, both before and after giving effect to this Amendment, all of
the representations and warranties contained in the Financing Agreement and
in each other Loan Document shall be true and correct in all material
respects as though made on the date hereof (and by its execution hereof, the
Borrowers shall be deemed to have represented and warranted such).

                                     17

<PAGE>
<PAGE>

                           (c) Fees. The Borrowers shall have paid the fees
                               ----
referred to in Section 4.05.

                           (d) No Default. As of the date hereof, both
                               ----------
before and after giving effect to this Amendment, no Default (other than
with respect to the provisions of Sections 6.01(n), 8.02(c), 8.02(e),
8.02(j), 8.02(l), 8.02(o), 8.02(r), 8.02(t), 9.01(a), 9.01(c), and 9.04 of
the Financing Agreement that would, upon effectiveness of this Amendment, be
waived pursuant to Sections 2.15 through 2.21 above) shall have occurred and
be continuing (and by its execution hereof, the Borrowers shall be deemed to
have represented and warranted such).

                           (e) Bankruptcy Court Order. An order of the
                               ----------------------
Bankruptcy Court approving this Amendment and the terms and conditions
hereof, such order to be in form and substance satisfactory to the
Administrative Agent in its sole discretion, shall have been entered by the
Bankruptcy Court, the Administrative Agent shall have received a true and
complete copy of such order, and such order shall be in full force and
effect and shall not have been reversed, modified, amended, stayed or
vacated absent prior written consent of the Administrative Agent.

                                 ARTICLE IV

                                MISCELLANEOUS

                  Section 4.01 Effect; Ratification. The amendments and
                               --------------------
waivers set forth herein are effective solely for the purposes set forth
herein and shall be limited precisely as written, and shall not be deemed to
(i) be a consent to, or acknowledgment of, any amendment, waiver or
modification of any other term or condition of the Financing Agreement or of
any other instrument or agreement referred to therein or (ii) prejudice any
right or remedy which the Agents or any other party may now have or may have
in the future under or in connection with the Financing Agreement as amended
hereby or any other instrument or agreement referred to therein. This
Amendment shall be construed in connection with and as part of the Financing
Agreement, and all terms, conditions, representations, warranties, covenants
and agreements set forth in the Financing Agreement and each other
instrument or agreement referred to therein, except as herein amended, are
hereby ratified and confirmed and shall remain in full force and effect.

                  Section 4.02 Due Authorization; Authority; No Conflicts;
                               -------------------------------------------
Enforceability. The execution, delivery and performance by each Loan Party
--------------
of this Amendment (i) have been duly authorized by all necessary action,
(ii) do not and will not contravene its charter or by-laws, its limited
liability company or operating agreement or its certificate of partnership
or partnership agreement, as applicable, or any applicable law or any
contractual restriction binding on or otherwise affecting it or any of its
properties (other than conflicts, breaches and defaults, the enforcement of
which will be stayed by virtue of the filing of the Chapter 11 Cases), or
any order or decree of any court or Governmental Authority (including,
without limitation, any order entered in the Chapter 11 Cases), (iii) do not
and will not result in or require the creation of any Lien

                                     18

<PAGE>
<PAGE>

upon or with respect to any of its material properties, and (iv) do not and
will not result in any material default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal of any material permit,
license, authorization or approval applicable to its operations or any of
its properties. Other than the order referred to in Section 3.01(e) hereof,
no authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority, including the Bankruptcy Court, is
required in connection with the due execution, delivery and performance by
any Loan Party of this Amendment. This Amendment, when delivered hereunder,
is or will be, duly and validly executed and delivered by each of the Loan
Parties which is a party hereto and each of this Amendment and the Financing
Agreement as amended hereby constitutes the legal, valid and binding
obligation of each of the Loan Parties which is a party hereto or thereto,
enforceable in accordance with the terms hereof or thereof.

                  Section 4.03 No Novation. Neither this Amendment nor the
                               -----------
replacement of the terms of the Financing Agreement by the terms of this
Amendment shall extinguish the obligations for the payment of money
outstanding under the Financing Agreement or discharge or release the Lien
or priority of any security agreement, any pledge agreement or any other
security therefor. Nothing herein contained shall be construed as a
substitution or novation of the Obligations outstanding under the Financing
Agreement or instruments securing the same, which shall remain in full force
and effect, except as modified hereby. Nothing expressed or implied in this
Amendment or any other document contemplated hereby or thereby shall be
construed as a release or other discharge of the Borrowers or any other Loan
Party under any Loan Document from any of its obligations and liabilities
thereunder. Each of the Financing Agreement and the other Loan Documents
shall remain in full force and effect, until and except as modified hereby
or in connection herewith. This Amendment is a Loan Document executed
pursuant to the Financing Agreement and shall be construed, administered and
applied in accordance with the terms and provisions thereof.

                  Section 4.04 Costs, Fees and Expenses. The Borrowers
                               ------------------------
jointly and severally agree to reimburse the Agents and the Lenders upon
demand for all costs, fees and expenses (including the reasonable fees and
expenses of counsel to the Agents and the Lenders) incurred in connection
with the preparation, execution and delivery of this Amendment.

                  Section 4.05 Amendment Fees. The Borrowers jointly and
                               --------------
severally agree to pay to the Administrative Agent (a) for the pro rata
benefit of each Lender who approves this Amendment an amendment fee of 12.5
basis points, and (b) such other fees as are agreed to separately by the
Borrowers and the Administrative Agent with respect to this Amendment, which
amendment fee and other fees shall be fully earned upon the effectiveness
hereof and nonrefundable when paid, and are in addition to any and all other
fees required to be paid from time to time by the Borrowers under the
Financing Agreement.

                  Section 4.06 Counterparts. This Amendment may be executed
                               ------------
in any number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute

                                     19

<PAGE>
<PAGE>

one and the same agreement. Delivery of an executed counterpart of this
Amendment by telecopier shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telecopier also shall deliver an
original executed counterpart of this Amendment but the failure to deliver
an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Amendment.

                  Section 4.07 Severability. Any provision of this Amendment
                               ------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

                  Section 4.08 CHOICE OF LAW. THIS AMENDMENT SHALL BE
                               -------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW
YORK EXCEPT AS GOVERNED BY THE BANKRUPTCY CODE.

                  Section 4.09 No Party Deemed Drafter. Each of the parties
                               -----------------------
hereto agrees that no party hereto shall be deemed to be the drafter of this
Amendment.

                  Section 4.10 Ratification of Guaranty. Each Guarantor
                               ------------------------
hereby consents to this Amendment and hereby confirms and agrees that (a)
notwithstanding the effectiveness of this Amendment, the Guaranty is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects, except that, on and after the effectiveness of
this Amendment, each reference in the Guaranty to the "Agreement",
"thereunder", "thereof" or words of like import referring to the Financing
Agreement shall mean and be a reference to the Financing Agreement as
amended by this Amendment, and (b) the Loan Documents to which it is a party
and all of the Collateral described therein do, and shall continue to,
secure the payment of all of the Obligations secured thereby.

                          (Signature Page Follows)

                                     20

<PAGE>
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.

                                       BORROWERS:
                                       ---------

                                       SOLUTIA INC., as a debtor and a
                                       debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Assistant Treasurer

                                       SOLUTIA BUSINESS ENTERPRISES, INC.,
                                       as a debtor and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       GUARANTORS:
                                       ----------

                                       AXIO RESEARCH CORPORATION, as a
                                       debtor and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       BEAMER ROAD MANAGEMENT COMPANY, as a
                                       debtor and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

<PAGE>
<PAGE>

                                       CPFILMS INC., as a debtor and a
                                       debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Assistant
                                                   Treasurer

                                       MONCHEM, INC., as a debtor and a
                                       debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       MONCHEM INTERNATIONAL, INC., as a
                                       debtor and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       SOLUTIA GREATER CHINA, INC., as a
                                       debtor and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       SOLUTIA INTER-AMERICA, INC., as a
                                       debtor and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

<PAGE>
<PAGE>

                                       SOLUTIA INTERNATIONAL HOLDING, LLC,
                                       as a debtor and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       SOLUTIA INVESTMENTS, LLC, as a debtor
                                       and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       SOLUTIA MANAGEMENT COMPANY, INC., as
                                       a debtor and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       SOLUTIA OVERSEAS, INC., as a debtor
                                       and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       SOLUTIA SYSTEMS, INC., as a debtor
                                       and a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

                                       SOLUTIA TAIWAN, INC., as a debtor and
                                       a debtor-in-possession

                                            By:    /s/ James A. Tichenor
                                                   ---------------------
                                            Name:  James A. Tichenor
                                            Title: Vice President & Treasurer

<PAGE>
<PAGE>

                                       ADMINISTRATIVE AGENT, COLLATERAL AGENT,
                                       ---------------------------------------
                                       CO-DOCUMENTATION AGENT AND A LENDER:
                                       -----------------------------------

                                       CITICORP USA, INC., for itself as the
                                       Administrative Agent, the Collateral
                                       Agent, a Co-Documentation Agent and a
                                       Lender

                                       By: /s/ David Jaffe
                                          -------------------------------------
                                          Name:  David Jaffe
                                          Title: Vice President

                                       CO-DOCUMENTATION AGENT AND A LENDER:
                                       -----------------------------------

                                       WELLS FARGO FOOTHILL, LLC, for itself
                                       as a Co-Documentation Agent and a
                                       Lender

                                       By: /s/ Lan Wong
                                          -------------------------------------
                                          Name:  Lan Wong
                                          Title: Vice President

                                       ISSUER:
                                       ------

                                       CITIBANK, N.A., as an Issuer and a
                                       Lender

                                       By: /s/ David Jaffe
                                          -------------------------------------
                                          Name:  David Jaffe
                                          Title: Vice President

                                       LENDER:
                                       ------

                                       CITIGROUP GLOBAL MARKETS INC., as a
                                       Lender

                                       By: /s/ David Jaffe
                                          -------------------------------------
                                          Name:  David Jaffe
                                          Title: Authorized Signer

<PAGE>
<PAGE>

                                       LENDER:
                                       ------

                                       CITIGROUP FINANCIAL PRODUCTS INC.,
                                       as a Lender

                                       By: /s/ Tom Lee
                                          -------------------------------------
                                          Name:  Tom Lee
                                          Title: Authorized Signatory

                                       LENDER:
                                       ------

                                       PAM CAPITAL FUNDING L.P.
                                       By: Highland Capital Management, L.P.
                                       As Collateral Manager, as a Lender

                                       By: /s/ Todd Travers
                                          -------------------------------------
                                          Name:  Todd Travers
                                          Title: Senior Portfolio Manager
                                                 Highland Capital Management,
                                                  L.P.

                                       LENDER:
                                       ------

                                       BANK OF AMERICA, N.A., as a Lender

                                       By: /s/ Sid Bridges
                                          -------------------------------------
                                          Name:  Sid Bridges
                                          Title: AVP

<PAGE>
<PAGE>

                                       LENDER:
                                       ------

                                       HIGHLAND LEGACY LIMITED
                                       By: Highland Capital Management, L.P.
                                       As Collateral Manager, as a Lender

                                       By: /s/ Todd Travers
                                          -------------------------------------
                                          Name:  Todd Travers
                                          Title: Senior Portfolio Manager
                                                 Highland Capital Management,
                                                  L.P.

                                       LENDER:
                                       ------

                                       HIGHLAND LOAN FUNDING V LTD.
                                       By: Highland Capital Management, L.P.
                                       As Collateral Manager, as a Lender

                                       By: /s/ Todd Travers
                                          -------------------------------------
                                          Name:  Todd Travers
                                          Title: Senior Portfolio Manager
                                                 Highland Capital Management,
                                                  L.P.

                                       LENDER:
                                       ------

                                       RESTORATION FUNDING CLO, LTD.
                                       By: Highland Capital Management, L.P.
                                       As Collateral Manager, as a Lender

                                       By: /s/ Todd Travers
                                          -------------------------------------
                                          Name:  Todd Travers
                                          Title: Senior Portfolio Manager
                                                 Highland Capital Management,
                                                  L.P.

                                       LENDER:
                                       ------

                                       CALIFORNIA PUBLIC EMPLOYEES
                                       RETIREMENT SYSTEM
                                       By: Highland Capital Management, L.P.
                                       As Authorized Representatives of
                                       the Board, as a Lender

                                       By: /s/ Todd Travers
                                          -------------------------------------
                                          Name:  Todd Travers
                                          Title: Senior Portfolio Manager
                                                 Highland Capital Management,
                                                  L.P.

<PAGE>
<PAGE>

                                       LENDER:
                                       ------

                                       AMARANTH LLC, as a Lender

                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       LENDER:
                                       ------

                                       SATELLITE SENIOR INCOME FUND, LLC, as
                                       a Lender

                                       By: /s/ Gabe Nechamkin
                                          -------------------------------------
                                          Name:  Gabe Nechamkin
                                          Title: Principal

                                       LENDER:
                                       ------

                                       SATELLITE SENIOR INCOME FUND II, LLC,
                                       as a Lender

                                       By: /s/ Stephen T. Shapiro
                                          -------------------------------------
                                          Name:  Stephen T. Shapiro
                                          Title: Principal, Satellite Asset
                                                  Management

<PAGE>
<PAGE>

                                       LENDER:
                                       ------

                                       OZ SPECIAL MASTER FUND, LTD., as a
                                       Lender
                                       By: OZ Management, LLC
                                       As Investment Manager

                                       By: /s/ Daniel S. Och
                                          -------------------------------------
                                          Name:  Daniel S. Och
                                          Title: Senior Managing Member

                                       LENDER:
                                       ------

                                       PERRY PRINCIPALS INVESTMENTS, LLC, as
                                       a Lender

                                       By: /s/ Rick Page
                                          -------------------------------------
                                          Name:  Rick Page
                                          Title:

                                       LENDER:
                                       ------

                                       WINGATE CAPITAL LTD., as a Lender
                                       By: Citadel Limited Partnership, its
                                            Portfolio Manager

                                       By: GLB Partners, L.P., its General
                                            Partner

                                       By: Citadel Investment Group, L.L.C.,
                                            its General Partner

                                       By: /s/ James E. Bolin
                                          -------------------------------------
                                          Name:  James E. Bolin
                                          Title: Managing Director

                                       LENDER:
                                       ------

                                       BAYERISCHE HYPO-UND VEREINSBANK AG,
                                       NEW YORK BRANCH, as a Lender

                                       By: /s/ Miriam Trautmann
                                          -------------------------------------
                                          Name:  Miriam Trautmann
                                          Title: Associate Director

                                       By: /s/ Salvatore Esposito
                                          -------------------------------------
                                          Name:  Salvatore Esposito
                                          Title: Managing Director

<PAGE>
<PAGE>

                                       LENDER:
                                       ------

                                       SHEPHERD INVESTMENTS INTERNATIONAL,
                                       LTD., as a Lender

                                       By: /s/ Colin M. Lancaster
                                          -------------------------------------
                                          Name:  Colin M. Lancaster
                                          Title: General Counsel

                                       LENDER:
                                       ------

                                       TCW SELECT LOAN FUND, LIMITED
                                       By: TCW Advisors, Inc, as its
                                            Collateral Manager

                                       By: /s/ G. Steven Kalin
                                          -------------------------------------
                                          Name:  G. Steven Kalin
                                          Title: Senior Vice President

                                       By: /s/ Jonathan R. Insull
                                          -------------------------------------
                                          Name:  Jonathan R. Insull
                                          Title: Managing Director

                                       LENDER:
                                       ------

                                       C-SQUARED CDO LTD.
                                       By: TCW Advisors, Inc, as its
                                            Portfolio Manager

                                       By: /s/ Jonathan R. Insull
                                          -------------------------------------
                                          Name:  Jonathan R. Insull
                                          Title: Managing Director

                                       By: /s/ G. Steven Kalin
                                          -------------------------------------
                                          Name:  G. Steven Kalin
                                          Title: Senior Vice President

                                       LENDER:
                                       ------

                                       LOAN FUNDING I LLC, a wholly owned
                                       subsidiary of Citibank, N.A.
                                       By: TCW Advisors, Inc, as Portfolio
                                            Manager of Loan Funding ILLC

                                       By: /s/ Jonathan R. Insull
                                          -------------------------------------
                                          Name:  Jonathan R. Insull
                                          Title: Managing Director

                                       By: /s/ G. Steven Kalin
                                          -------------------------------------
                                          Name:  G. Steven Kalin
                                          Title: Senior Vice President

                                       LENDER:
                                       ------

                                       UBS AG STAMFORD BRANCH, as a Lender

                                       By: /s/ Thomas R. Salzano
                                          -------------------------------------
                                          Name:  Thomas R. Salzano
                                          Title: Executive Director
                                                 Banking Products Services, US

                                       By: /s/ Wilifred V. Saint
                                          -------------------------------------
                                          Name:  Wilifred V. Saint
                                          Title: Director
                                                 Banking Products Services, US

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