Document:

Exhibit 4.4

                            Dated 30th March, 2001

                         CIBA SPECIALTY CHEMICALS PLC
                     CIBA SPECIALTY CHEMICALS CORPORATION
               CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
                                  as Issuers

                                    - and -

                     CIBA SPECIALTY CHEMICALS HOLDING INC.
                                 as Guarantor

                                    - and -

                           THE CHASE MANHATTAN BANK
                                   as Agent

                                    - and -

                     CHASE MANHATTAN BANK LUXEMBOURG S.A.
                                as Paying Agent

                   ________________________________________

                               AGENCY AGREEMENT
                                in respect of a
                              U.S.$2,000,000,000
                         EURO MEDIUM TERM NOTE PROGRAM
                            (Amended and Restated)

                   ________________________________________

                                 ALLEN & OVERY
                                    London

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                                   CONTENTS
Clause                                                                      Page

1.   Definitions and interpretation...........................................2
2.   Appointment of Agent and Paying Agents...................................7
3.   Issue of Temporary Global Notes..........................................9
4.   Determination of Exchange Date, issue of Permanent Global Notes and
     Definitive Notes and determination of end of Distribution Compliance
     Period..................................................................10
5.   Issue of Definitive Notes...............................................11
6.   Terms of Issue..........................................................11
7.   Payments................................................................12
8.   Determinations and notifications in respect of Notes and
     Interest Determination..................................................14
9.   Notice of any withholding or deduction..................................16
10.  Duties of the Agent in connection with early redemption.................16
11.  Receipt and Publication of Notices......................................17
12.  Cancellation of Notes, Receipts, Coupons and Talons.....................18
13.  Issue of replacement Notes, Receipts, Coupons and Talons................19
14.  Copies of documents available for inspection............................20
15.  Meetings of Noteholders.................................................20
16.  Commissions and expenses................................................21
17.  Indemnity...............................................................21
18.  Repayment by the Agent..................................................21
19.  Conditions of appointment...............................................22
20.  Communication between the parties.......................................23
21.  Changes in Agent and other Paying Agents................................23
22.  Merger and consolidation................................................24
23.  Notification of changes to Paying Agents................................25
24.  Change of specified office..............................................25
25.  Notices.................................................................25
26.  Taxes and stamp duties..................................................26
27.  Currency indemnity......................................................26
28.  Amendments..............................................................26
29.  Descriptive headings....................................................27
30.  Contracts (Rights of Third Parties) Act 1999............................27
31.  Governing law and submission to jurisdiction............................27
32.  Counterparts............................................................27

Schedules

Appendix A...................................................................29

Form of Calculation Agency Agreement.........................................29
1.       Terms and Conditions of the Notes...................................38
2.       Forms of Global and Definitive Notes, Receipts, Coupons and Talons  61
3.       Form of Deed of Guarantee...........................................97
4.       Provisions for Meetings of Noteholders..............................101
5.       Form of Put Notice..................................................108
6.       Operating & Administrative Procedures Memorandum....................110

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Signatories..................................................................135

<PAGE>

                               AGENCY AGREEMENT

                                in respect of a

                         EURO MEDIUM TERM NOTE PROGRAM

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

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

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

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

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

(5)  THE CHASE MANHATTAN BANK of Trinity Tower, 9 Thomas More Street, London
     E1W 1YT (the "Agent", which expression shall include any successor agent
     appointed in accordance with clause 21); and

(6)  CHASE MANHATTAN BANK LUXEMBOURG S.A. of 5 Rue Plaetis, L-2338 Luxembourg
     (together with the Agent, the "Paying Agents", which expression shall
     include any additional or successor paying agent appointed in accordance
     with clause 21 and "Paying Agent" shall mean any of the Paying Agents).

WHEREAS:

(A)  CIBA US, CIBA UK, CIBA Germany (each an "ISSUER" and together, the
     "ISSUERS") and the Guarantor have entered into an amended and restated
     program agreement dated 30th March, 2001 (the "PROGRAM AGREEMENT") with
     the Dealers named therein pursuant to which the Issuer may issue Euro
     Medium Term Notes (the "NOTES") in an aggregate nominal amount
     outstanding at any time of up to U.S.$2,000,000,000 (or its equivalent in
     other currencies). The Program Agreement amends and restates the amended
     and restated program agreement entered into by CIBA US, CIBA UK, CIBA
     Germany and the Guarantor dated 16th June, 2000 with the Dealers named
     therein.

(B)  CIBA US, CIBA UK, CIBA Germany, the Guarantor, the Agent and the Paying
     Agents (the "PRINCIPAL PARTIES") entered into an amended and restated
     Agency Agreement (the "PRINCIPAL AGENCY AGREEMENT") dated 16th June, 2000
     in respect of U.S.$2,000,000,000 Euro Medium Term Note Program.

(C)  This Agreement amends and restates the Principal Agency Agreement. Any
     Notes issued on or after the date hereof (other than any such Notes
     issued so as to be consolidated and form a single Series with any Notes
     issued prior to the date hereof) shall be issued pursuant to this
     Agreement. This does not affect any Notes issued prior to the date
     hereof.

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                                      2

(D)  Each issue of Notes will be initially represented by a temporary global
     Note exchangeable in whole or in part for definitive Notes or for a
     permanent global Note which will be exchangeable as described therein for
     definitive Notes.

IT IS HEREBY AGREED as follows:

1.   DEFINITIONS AND INTERPRETATION

(1)  Terms and expressions defined in the Program Agreement or the Notes or
     used in the applicable Pricing Supplement shall have the same meanings in
     this Agreement, except where the context requires otherwise or unless
     otherwise stated.

(2)  Without prejudice to the foregoing:

     "CLEARSTREAM, LUXEMBOURG" means Clearstream Banking, societe anonyme;

     "CONDITIONS" means, in relation to the Notes of any Series, the terms and
     conditions endorsed on or incorporated by reference into or attached to
     the Note or Notes constituting such Series, such terms and conditions
     being in or substantially in the form set out in Schedule 1 or in such
     other form, having regard to the terms of the Notes of the relevant
     Series, as may be agreed between the relevant Issuer, the Guarantor, the
     Agent and the relevant Dealer as modified and supplemented by the Pricing
     Supplement applicable to the Notes of the relevant Series;

     "COUPON" means an interest coupon appertaining to a Definitive Note
     (other than a Zero Coupon Note), such coupon being:

     (i)  if appertaining to a Fixed Rate Note, in the form or substantially
          in the form set out in Part IV A of Schedule 2 or in such other
          form, having regard to the terms of issue of the Notes of the
          relevant Series, as may be agreed between the relevant Issuer, the
          Guarantor, the Agent and the relevant Dealer; or

    (ii)  if appertaining to a Floating Rate Note or an Indexed Interest Note,
          in the form or substantially in the form set out in Part IV B of
          Schedule 2 or in such other form, having regard to the terms of
          issue of the Notes of the relevant Series, as may be agreed between
          the relevant Issuer, the Guarantor, the Agent and the relevant
          Dealer; or

    (iii) if appertaining to a Definitive Note which is neither a Fixed Rate
          Note nor a Floating Rate Note nor an Indexed Interest Note, in such
          form as may be agreed between the relevant Issuer, the Guarantor,
          the Agent and the relevant Dealer,

     and includes, where applicable, the Talon(s) appertaining thereto and any
     replacements for Coupons and Talons issued pursuant to Condition 10;

     "COUPONHOLDERS" means the several persons who are for the time being
     holders of the Coupons and shall, unless the context otherwise requires,
     include the holders of the Talons;

     "DEFINITIVE NOTE" means a definitive Note issued or, as the case may
     require, to be issued by the relevant Issuer in accordance with the
     provisions of the Program Agreement or any other agreement between the
     relevant Issuer, the Guarantor and the relevant Dealer in exchange for

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                                      3

     either a Temporary Global Note or a Permanent Global Note (all as
     indicated in the applicable Pricing Supplement), such definitive Note
     being in the form or substantially in the form set out in Part III of
     Schedule 2 with such modifications (if any) as may be agreed between the
     relevant Issuer, the Guarantor, the Agent and the relevant Dealer and
     having the Conditions endorsed thereon or attached thereto or, if
     permitted by the relevant authority or authorities and agreed by the
     relevant Issuer, the Guarantor and the relevant Dealer, incorporating the
     Conditions by reference and having the applicable Pricing Supplement (or
     the relevant provisions thereof) either endorsed thereon or attached
     thereto and (except in the case of a Zero Coupon Note) having Coupons
     and, where appropriate, Receipts and/or Talons attached thereto on issue;

     "DISTRIBUTION COMPLIANCE PERIOD" has the meaning given to such term in
     Regulation S under the Securities Act;

     "DUAL CURRENCY NOTE" means a Note in respect of which payments of
     principal and/or interest are made or to be made in such different
     currencies, and at rates of exchange calculated upon such basis or bases,
     as the relevant Issuer, the Guarantor and the relevant Dealer may agree
     (as indicated in the applicable Pricing Supplement);

     "EURIBOR" means the Euro-zone inter-bank offered rate;

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

     "EURO-ZONE" means the region composed of Member States of the European
     Union that are participating in the third stage of European economic and
     monetary union;

     "FIXED RATE NOTE" means a Note on which interest is calculated at a fixed
     rate payable in arrear on a fixed date or dates in each year and on the
     redemption date or on such other dates as may be agreed between the
     relevant Issuer, the Guarantor and the relevant Dealer (as indicated in
     the applicable Pricing Supplement);

     "FLOATING RATE NOTE" means a Note on which interest is calculated at a
     floating rate payable in respect of such period or on such date(s) as may
     be agreed between the relevant Issuer, the Guarantor and the relevant
     Dealer (as indicated in the applicable Pricing Supplement);

     "GLOBAL NOTE" means a Temporary Global Note and/or a Permanent Global
     Note, as applicable;

     "GUARANTEE" means the guarantee dated the date of this Agreement,
     substantially in the form set out in Schedule 3, executed as a deed poll
     by the Guarantor in respect of any Note and in respect of the obligations
     of the Issuers under the Deed of Covenant;

     "INDEXED INTEREST NOTE" means a Note in respect of which the amount
     payable in respect of interest is calculated by reference to an index
     and/or a formula as the relevant Issuer, the Guarantor and the relevant
     Dealer may agree (as indicated in the applicable Pricing Supplement);

     "INDEXED NOTE" means an Indexed Interest Note and/or an Indexed
     Redemption Amount Note, as applicable;

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                                      4

     "INDEXED REDEMPTION AMOUNT NOTE" means a Note in respect of which the
     amount payable in respect of principal is calculated by reference to an
     index and/or a formula as the relevant Issuer, the Guarantor and the
     relevant Dealer may agree (as indicated in the applicable Pricing
     Supplement);

     "INTEREST COMMENCEMENT DATE" means, in the case of interest-bearing
     Notes, the date specified in the applicable Pricing Supplement from (and
     including) which such Notes bear interest, which may or may not be the
     Issue Date (but if no date is specified shall be the Issue Date);

     "ISDA DEFINITIONS" mean the 2000 ISDA Definitions, each as amended and
     updated as at the Issue Date of the first Tranche of Notes of the
     relevant Series and published by the International Swaps and Derivatives
     Association, Inc.;

     "ISSUE DATE" means the date of issue and purchase of a Note, in each case
     pursuant to and in accordance with the Program Agreement or any other
     agreement between the relevant Issuer, the Guarantor and the relevant
     Dealer, being in the case of any Permanent Global Note or Definitive
     Note, the same date as the date of issue of the Temporary Global Note
     which initially represented such Note;

     "ISSUE PRICE" means the price, generally expressed as a percentage of the
     nominal amount of the Notes, at which the Notes will be issued;

     "LIBOR" means the London inter-bank offered rate;

     "MATURITY DATE" means, in relation to a Note, the date on which it is
     expressed to be redeemable;

     "NOTE" means a note denominated in Australian dollars, Austrian
     Schillings, Canadian dollars, Czech koruna, Danish kroner, Deutsche
     Marks, Dutch guilders, euro, Finnish markkas, Hong Kong dollars, Irish
     pounds, Italian lire, Japanese Yen, Luxembourg francs, New Zealand
     dollars, Norwegian kroner, Portuguese escudos, South African Rand,
     Sterling, Swedish kronor, Swiss francs, U.S. dollars or such other
     currency or currencies as may be agreed between the relevant Issuer, the
     Guarantor and the relevant Dealer issued or to be issued by the relevant
     Issuer pursuant to the Program Agreement or any other agreement between
     the relevant Issuer, the Guarantor and the relevant Dealer and which
     shall initially be represented by, and comprised in, a Temporary Global
     Note which may (in accordance with the terms of such Temporary Global
     Note) be exchanged for either Definitive Notes or a Permanent Global Note
     which Permanent Global Note may (in accordance with the terms of such
     Permanent Global Note) in turn be exchanged for Definitive Notes (all as
     indicated in the applicable Pricing Supplement) and includes any
     replacements for a Note issued pursuant to Condition 10 and, where
     applicable, the Receipts relating thereto;

     "NOTEHOLDERS" means the several persons who are for the time being
     holders of the Notes save that, in respect of the Notes of any Series,
     for so long as such Notes or any part thereof are represented by a Global
     Note held on behalf of Euroclear and/or of Clearstream, Luxembourg, each
     person (other than Euroclear or Clearstream, Luxembourg) who is for the
     time being shown in the records of Euroclear or of Clearstream,
     Luxembourg as the holder of a particular nominal amount of the Notes of
     such Series (in which regard any certificate or other document issued by
     Euroclear or Clearstream, Luxembourg as to the nominal amount of such
     Notes standing to the account of any person shall be conclusive and
     binding for all

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                                      5

     purposes save in the case of manifest error) shall be treated by the
     Issuer, the Guarantor, the Agent and any other Paying Agent as the holder
     of such nominal amount of such Notes for all purposes other than with
     respect to the payment of principal or interest on such Notes, for which
     purpose the bearer of the relevant Global Note shall be treated by the
     Issuer, the Guarantor, the Agent and any other Paying Agent as the holder
     of such nominal amount of such Notes in accordance with and subject to
     the terms of the relevant Global Note and this agreement and the
     expressions "NOTEHOLDER", "HOLDER OF NOTES" and related expressions shall
     be construed accordingly;

     "OUTSTANDING" means, in relation to the Notes, all the Notes issued other
     than (a) those which have been redeemed in full in accordance with the
     Conditions, (b) those in respect of which the date for redemption in
     accordance with the Conditions has occurred and the redemption moneys
     wherefor (including all interest (if any) accrued thereon to the date for
     such redemption and any interest (if any) payable under the Conditions
     after such date) have been duly paid to the Agent as provided herein
     (and, where appropriate, notice has been given to the Noteholders of the
     relevant Series in accordance with Condition 14) and remain available for
     payment against presentation of Notes, (c) those which have become void
     under Condition 8, (d) those which have been purchased and cancelled as
     provided in Condition 6, (e) those mutilated or defaced Notes which have
     been surrendered in exchange for replacement Notes pursuant to Condition
     10, (f) (for the purpose only of determining the nominal amount of the
     Notes outstanding and without prejudice to their status for any other
     purpose) those Notes alleged to have been lost, stolen or destroyed and
     in respect of which replacement Notes have been issued pursuant to
     Condition 10, (g) Temporary Global Notes to the extent that they shall
     have been duly exchanged for Permanent Global Notes and/or Definitive
     Notes and Permanent Global Notes to the extent that they shall have been
     duly exchanged for Definitive Notes, in each case pursuant to their
     respective provisions and (h) Temporary Global Notes and Permanent Global
     Notes which have become void in accordance with their terms (provided
     that at the Relevant Time (as defined in the Deed of Covenant) the
     Underlying Notes (as defined in the Deed of Covenant) will be deemed to
     be still outstanding) and,

     PROVIDED THAT for each of the following purposes, namely:

     (i)  the right to attend and vote at any meeting of the Noteholders or
          any of them; and

     (ii) the determination of how many and which Notes are for the time being
          outstanding for the purposes of paragraphs 2, 5 and 6 of Schedule 4
          hereto,

     those Notes (if any) which are for the time being held by any person
     (including but not limited to any Issuer, the Guarantor or any of their
     respective Subsidiaries) for the benefit of any Issuer, the Guarantor or
     any of their respective Subsidiaries shall (unless and until ceasing to
     be so held) be deemed not to be outstanding;

     "PERMANENT GLOBAL NOTE" means a global note in the form or substantially
     in the form set out in Part II of Schedule 2 together with the copy of
     the applicable Pricing Supplement attached thereto with such
     modifications (if any) as may be agreed between the relevant Issuer, the
     Guarantor, the Agent and the relevant Dealer, comprising some or all of
     the Notes of the same Series, issued by the relevant Issuer pursuant to
     the Program Agreement or any other agreement between the relevant Issuer,
     the Guarantor and the relevant Dealer in exchange for the whole or part
     of any Temporary Global Note issued in respect of such Notes;

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                                      6

     "PROCEDURES MEMORANDUM" means the operating and administrative procedures
     memorandum set out in Schedule 6 hereto;

     "PUT NOTICE" means a notice in the form set out in Schedule 5;

     "RECEIPT" means a receipt attached on issue to a Definitive Note
     redeemable in instalments for the payment of an instalment of principal,
     such receipt being in the form or substantially in the form set out in
     Part V of Schedule 2 or in such other form as may be agreed between the
     relevant Issuer, the Guarantor, the Agent and the relevant Dealer and
     includes any replacements for Receipts issued pursuant to Condition 10;

     "RECEIPTHOLDERS" means the several persons who are for the time being
     holders of the Receipts;

     "REFERENCE BANKS" means, in the case of sub-clause 8(2)(a)(i) below,
     those banks whose offered rates were used to determine such quotation
     when such quotation last appeared on the Relevant Screen Page and, in the
     case of sub-clause 8(2)(a)(ii) below, those banks whose offered
     quotations last appeared on the Relevant Screen Page when no fewer than
     three such offered quotations appeared;

     "REPLACEMENT AGENT" means the Paying Agent in Luxembourg;

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

     "SERIES" means a Tranche of the Notes together with any further Tranche
     or Tranches of the Notes which are (i) expressed to be consolidated and
     form a single series and (ii) identical in all respects (including as to
     listing) except for their respective Issue Dates, Interest Commencement
     Dates and/or Issue Prices and the expressions "Notes of the relevant
     Series" and "holders of Notes of the relevant Series" and related
     expressions shall be construed accordingly;

     "TALONS" means the talons (if any) appertaining to, and exchangeable in
     accordance with the provisions therein contained for further Coupons
     appertaining to, a Definitive Note (other than a Zero Coupon Note), such
     talons being in the form or substantially in the form set out in Part VI
     of Schedule 2 or in such other form as may be agreed between the relevant
     Issuer, the Guarantor, the Agent and the relevant Dealer and includes any
     replacements for Talons issued pursuant to Condition 10;

     "TEMPORARY GLOBAL NOTE" means a global note in the form or substantially
     in the form set out in Part I of Schedule 2 together with the copy of the
     applicable Pricing Supplement attached thereto with such modifications
     (if any) as may be agreed between the relevant Issuer, the Guarantor, the
     Agent and the relevant Dealer, comprising some or all of the Notes of the
     same Series, issued by the relevant Issuer pursuant to the Program
     Agreement or any other agreement between the Issuer and the relevant
     Dealer;

     "TRANCHE" means all Notes which are identical in all respects (including
     as to listing); and

     "ZERO COUPON NOTE" means a Note on which no interest is payable.

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                                      7

(3)  Words denoting the singular number only shall include the plural number
     also and vice versa;

     words denoting one gender only shall include the other gender; and

     words denoting persons only shall include firms and corporations and vice
     versa.

(4)  All references in this Agreement to costs or charges or expenses shall
     include any value added tax or similar tax charged or chargeable in
     respect thereof.

(5)  For the purposes of this Agreement, the Notes of each Series shall form a
     separate series of Notes and the provisions of this Agreement shall apply
     mutatis mutandis separately and independently to the Notes of each Series
     and in this Agreement the expressions "Notes", "NOTEHOLDERS", "RECEIPTS",
     "RECEIPTHOLDERS", "COUPONS", "COUPONHOLDERS" and "TALONS" shall be
     construed accordingly.

(6)  All references in this Agreement to principal and/or interest or both in
     respect of the Notes or to any moneys payable by any Issuer and/or the
     Guarantor under this Agreement shall have the meaning set out in
     Condition 5(d).

(7)  All references in this Agreement to the "RELEVANT CURRENCY" shall be
     construed as references to the currency in which the relevant Notes
     and/or Coupons are denominated (or payable in the case of Dual Currency
     Notes).

(8)  In this Agreement, clause headings are inserted for convenience and ease
     of reference only and shall not affect the interpretation of this
     Agreement. All references in this Agreement to the provisions of any
     statute shall be deemed to be references to that statute as from time to
     time modified, extended, amended or re-enacted or to any statutory
     instrument, order or regulation made thereunder or under such
     re-enactment.

(9)  All references in this Agreement to an agreement, instrument or other
     document (including, without limitation, this Agreement, the Program
     Agreement, the Deed of Covenant, the Guarantee, the Procedures
     Memorandum, the Notes and any Conditions appertaining thereto) shall be
     construed as a reference to that agreement, instrument or document as the
     same may be amended, modified, varied or supplemented from time to time.

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

2.   APPOINTMENT OF AGENT AND PAYING AGENTS

(1)  The Agent is hereby appointed, and the Agent hereby agrees to act, as
     agent of the Issuers and the Guarantor, upon the terms and subject to the
     conditions set out below, for the purposes of, inter alia:

     (a)  completing, authenticating and delivering Global Notes and (if
          required) authenticating and delivering Definitive Notes;

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                                      8

     (b)  exchanging Temporary Global Notes for Permanent Global Notes or
          Definitive Notes, as the case may be, in accordance with the terms
          of such Temporary Global Notes;

     (c)  exchanging Permanent Global Notes for Definitive Notes in accordance
          with the terms of such Permanent Global Notes;

     (d)  paying sums due on Global Notes and Definitive Notes, Receipts and
          Coupons;

     (e)  exchanging Talons for Coupons in accordance with the Conditions;

     (f)  determining the end of the Distribution Compliance Period applicable
          to each Tranche;

     (g)  unless otherwise specified in the applicable Pricing Supplement,
          determining the interest and/or other amounts payable in respect of
          the Notes in accordance with the Conditions;

     (h)  arranging on behalf of any Issuer and/or the Guarantor for notices
          to be communicated to the Noteholders;

     (i)  preparing and sending monthly reports to the Bank of England and
          ensuring that, as directed by the relevant Issuer, all necessary
          action is taken to comply with any reporting requirements of any
          competent authority in respect of any relevant currency as may be in
          force from time to time with respect to the Notes to be issued under
          the Program;

     (j)  subject to the Procedures Memorandum, submitting to the relevant
          authority or authorities such number of copies of each Pricing
          Supplement which relates to Notes which are to be listed as the
          relevant authority or authorities may reasonably require;

     (k)  acting as Calculation Agent in respect of Notes where named as such
          in the relevant Pricing Supplement; and

     (l)  performing all other obligations and duties imposed upon it by the
          Conditions, this Agreement and the Procedures Memorandum.

(2)  Each Paying Agent is hereby appointed as paying agent of the Issuers and
     the Guarantor, upon the terms and subject to the conditions set out
     below, for the purposes of paying sums due on Notes, Receipts and Coupons
     and of performing all other obligations and duties imposed upon it by the
     Conditions and this Agreement.

(3)  Each of the Issuer and the Guarantor undertakes that, if the conclusions
     of the ECOFIN Council meeting of 26th-27th November, 2000 are
     implemented, it will ensure that it maintains a paying agent in an EU
     member state that will not be obliged to withhold or deduct tax pursuant
     to the Directive.

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                                      9

3.   ISSUE OF TEMPORARY GLOBAL NOTES

(1)  Subject to sub-clause (2) below, following receipt of a faxed copy of the
     Pricing Supplement signed by any Issuer and the Guarantor, the relevant
     Issuer and the Guarantor hereby authorise the Agent and the Agent hereby
     agrees to take the steps required of the Agent in the Procedures
     Memorandum. For this purpose the Agent will, inter alia, on behalf of the
     relevant Issuer:

     (a)  prepare a Temporary Global Note by attaching a copy of the
          applicable Pricing Supplement to a copy of the applicable master
          Temporary Global Note;

     (b)  authenticate such Temporary Global Note;

     (c)  deliver such Temporary Global Note to the specified common
          depositary of Euroclear and/or Clearstream, Luxembourg against
          receipt from the common depositary of confirmation that such common
          depositary is holding the Temporary Global Note in safe custody for
          the account of Euroclear and/or Clearstream, Luxembourg and to
          instruct Euroclear or Clearstream, Luxembourg or both of them (as
          the case may be) unless otherwise agreed in writing between the
          Agent and the relevant Issuer (i) in the case of an issue of Notes
          not subscribed pursuant to a Subscription Agreement, to credit the
          Notes represented by such Temporary Global Note to the Agent's
          distribution account, and (ii) in the case of Notes subscribed
          pursuant to a Subscription Agreement, to hold the Notes represented
          by such Temporary Global Note to the Issuer's order; and

     (d)  ensure that the Notes of each Tranche are assigned a common code and
          ISIN by Euroclear and Clearstream, Luxembourg which are different
          from the common code and ISIN assigned to Notes of any other Tranche
          of the same Series until not earlier than 40 days after the
          completion of the distribution of the Notes of such Tranche as
          notified by the Agent to the relevant Dealer.

(2)  The Agent shall only be required to perform its obligations under
     sub-clause (1) above if it holds:

     (a)  a master Temporary Global Note for Notes issued pursuant to the UK
          Banking Act 1987 (Exempt Transactions) Regulations 1997 and a master
          Temporary Global Note for other Notes, each duly executed by a
          person or persons authorised to execute the same on behalf of the
          relevant Issuer, which may be used by the Agent for the purpose of
          preparing a Temporary Global Note in accordance with sub-clause
          (1)(a); and

     (b)  a master Permanent Global Note for Notes issued pursuant to the UK
          Banking Act 1987 (Exempt Transactions) Regulations 1997 and a master
          Permanent Global Note for other Notes, each duly executed by a
          person or persons authorised to execute the same on behalf of the
          relevant Issuer, which may be used by the Agent for the purpose of
          preparing a Permanent Global Note in accordance with clause 4 below.

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                                      10

4.   DETERMINATION OF EXCHANGE DATE, ISSUE OF PERMANENT GLOBAL NOTES AND
     DEFINITIVE NOTES AND DETERMINATION OF END OF DISTRIBUTION COMPLIANCE
     PERIOD

(1)  (a)  The Agent shall determine the Exchange Date for each Temporary
          Global Note in accordance with the terms thereof. Forthwith upon
          determining the Exchange Date in respect of any Tranche, the Agent
          shall notify such determination to the relevant Issuer, the
          Guarantor, the other Paying Agents, the relevant Dealer, Euroclear
          and Clearstream, Luxembourg.

     (b)  The Agent shall deliver, upon notice from Euroclear or Clearstream,
          Luxembourg, a Permanent Global Note or Definitive Notes, as the case
          may be, in accordance with the terms of the Temporary Global Note.
          Where a Temporary Global Note is to be exchanged for a Permanent
          Global Note, the Agent is hereby authorised on behalf of the
          relevant Issuer:

          (i)  in the case of the first Tranche of any Series of Notes, to
               prepare and complete a Permanent Global Note in accordance with
               the terms of the Temporary Global Note applicable to such
               Tranche by attaching a copy of the applicable Pricing
               Supplement to a copy of the applicable master Permanent Global
               Note;

          (ii) in the case of the first Tranche of any Series of Notes, to
               authenticate such Permanent Global Note;

          (iii) in the case of the first Tranche of any Series of Notes, to
               deliver such Permanent Global Note to the common depositary
               which is holding the Temporary Global Note applicable to such
               Tranche for the time being on behalf of Euroclear and/or
               Clearstream, Luxembourg either in exchange for such Temporary
               Global Note or, in the case of a partial exchange, on entering
               details of such partial exchange of the Temporary Global Note
               in the relevant spaces in Schedule Two of both the Temporary
               Global Note and the Permanent Global Note; and

          (iv) in any other case, by attaching a copy of the applicable
               Pricing Supplement to the Permanent Global Note applicable to
               the relevant Series and entering details of any exchange in
               whole or part as aforesaid.

(2)  (a)  In the case of a Tranche in respect of which there is only one
          Dealer, the Agent will determine the end of the Distribution
          Compliance Period in respect of such Tranche as being the fortieth
          day (or such later day as may be specified in the applicable Pricing
          Supplement) following the date certified by the relevant Dealer to
          the Agent as being the date as of which distribution of the Notes of
          that Tranche was completed.

     (b)  In the case of a Tranche in respect of which there is more than one
          Dealer but is not issued on a syndicated basis, the Agent will
          determine the end of the Distribution Compliance Period in respect
          of such Tranche as being the fortieth day (or such later day as may
          be specified in the applicable Pricing Supplement) following the
          latest of the dates certified by all the relevant Dealers to the
          Agent as being the respective

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                                      11

          dates as of which distribution of the Notes of that Tranche
          purchased by each such Dealer was completed.

     (c)  In the case of a Tranche issued on a syndicated basis, the Agent
          will determine the end of the Distribution Compliance Period in
          respect of such Tranche as being the fortieth day (or such later day
          as may be specified in the applicable Pricing Supplement) following
          the date certified by the Lead Manager to the Agent as being the
          date as of which distribution of the Notes of that Tranche was
          completed.

     (d)  Forthwith upon determining the end of the Distribution Compliance
          Period in respect of any Tranche, the Agent shall notify such
          determination to the relevant Issuer, the Guarantor, Euroclear,
          Clearstream, Luxembourg, the relevant Dealer(s) (in the case of a
          non-syndicated issue) and the Lead Manager (in the case of a
          syndicated issue).

5.   ISSUE OF DEFINITIVE NOTES

(1)  Upon notice from Euroclear or Clearstream, Luxembourg pursuant to the
     terms of a Temporary Global Note or a Permanent Global Note, as the case
     may be, the Agent shall deliver the relevant Definitive Note(s) in
     accordance with the terms of the relevant Global Note. For this purpose
     the Agent is hereby authorised on behalf of the relevant Issuer:

     (a)  to authenticate such Definitive Note(s) in accordance with the
          provisions of this Agreement; and

     (b)  to deliver such Definitive Note(s) to or to the order of Euroclear
          and/or Clearstream, Luxembourg either in exchange for such Global
          Note or, in the case of a partial exchange of a Temporary Global
          Note, on entering details of any partial exchange of the Temporary
          Global Note in the relevant space in Schedule Two of such Temporary
          Global Note.

     The Agent shall notify the relevant Issuer forthwith upon receipt of a
     request for issue of Definitive Note(s) in accordance with the provisions
     of a Temporary Global Note or Permanent Global Note, as the case may be,
     (and the aggregate nominal amount of such Temporary Global Note or
     Permanent Global Note, as the case may be, to be exchanged in connection
     therewith).

(2)  Each Issuer undertakes to deliver to the Agent sufficient numbers of
     executed Definitive Notes with, if applicable, Receipts, Coupons and
     Talons attached to enable the Agent to comply with its obligations under
     this clause.

6.   TERMS OF ISSUE

(1)  The Agent shall cause all Temporary Global Notes, Permanent Global Notes
     and Definitive Notes delivered to and held by it under this Agreement to
     be maintained in safe custody and shall ensure that such Notes are issued
     only in accordance with the provisions of this Agreement and the relevant
     Global Note and Conditions.

(2)  Subject to the procedures set out in the Procedures Memorandum, for the
     purposes of clause 3(1) the Agent is entitled to treat a telephone or
     facsimile communication from a person purporting to be (and who the Agent
     believes in good faith to be) the authorised representative of any Issuer
     and/or the Guarantor named in the lists referred to in, or notified

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                                      12

     pursuant to, clause 19(7) as sufficient instructions and authority of
     such Issuer and/or the Guarantor for the Agent to act in accordance with
     clause 3(1).

(3)  In the event that a person who has signed on behalf of any Issuer any
     Note not yet issued but held by the Agent in accordance with clause 3(1)
     ceases to be authorised as described in clause 19(7), the Agent shall
     (unless the relevant Issuer gives notice to the Agent that Notes signed
     by that person do not constitute valid and binding obligations of the
     relevant Issuer or otherwise until replacements have been provided to the
     Agent) continue to have authority to issue any such Notes, and the
     relevant Issuer hereby warrants to the Agent that such Notes shall,
     unless notified as aforesaid, be valid and binding obligations of such
     Issuer. Promptly upon such person ceasing to be authorised, the relevant
     Issuer shall provide the Agent with replacement Notes and upon receipt of
     such replacement Notes the Agent shall cancel and destroy the Notes held
     by it which are signed by such person and shall provide to the relevant
     Issuer a confirmation of destruction in respect thereof specifying the
     Notes so cancelled and destroyed.

(4)  If the Agent pays an amount (the "ADVANCE") to the Issuer on the basis
     that a payment (the "PAYMENT") has been, or will be, received from a
     Dealer and if the Payment is not received by the Agent on the date the
     Agent pays the relevant Issuer, the relevant Issuer (failing which the
     Guarantor) shall repay to the Agent the Advance and shall pay interest on
     the Advance (or the unreimbursed portion thereof) from (and including)
     the date such Advance is made to (but excluding) the earlier of repayment
     of the Advance and receipt by the Agent of the Payment (at a rate quoted
     at that time by the Agent as its cost of funding the Advance provided
     that evidence of the basis of such rate is given to the relevant Issuer
     and the Guarantor).

(5)  Except in the case of issues where the Agent does not act as receiving
     bank for the relevant Issuer in respect of the purchase price of the
     Notes being issued, if on the relevant Issue Date a Dealer does not pay
     the full purchase price due from it in respect of any Note (the
     "DEFAULTED NOTE") and, as a result, the Defaulted Note remains in the
     Agent's distribution account with Euroclear and/or Clearstream,
     Luxembourg after such Issue Date, the Agent will continue to hold the
     Defaulted Note to the order of the relevant Issuer. The Agent shall
     notify the relevant Issuer forthwith of the failure of the Dealer to pay
     the full purchase price due from it in respect of any Defaulted Note and,
     subsequently, shall notify the relevant Issuer forthwith upon receipt
     from the Dealer of the full purchase price in respect of such Defaulted
     Note.

7.   PAYMENTS

(1)  The Issuer (failing which the Guarantor) will, before 10.00 a.m. (local
     time in the relevant financial centre of the payment), on each date on
     which any payment in respect of any Note becomes due, transfer to an
     account specified by the Agent such amount in the relevant currency as
     shall be sufficient for the purposes of such payment in funds settled
     through such payment system as the Agent and the relevant Issuer or, as
     the case may be, the Guarantor may agree.

(2)  The Issuer (failing which the Guarantor) will ensure that no later than
     10.00 a.m. (London time) on the second Business Day (as defined below)
     immediately preceding the date on which any payment is to be made to the
     Agent pursuant to sub-clause (1), the Agent shall receive from the paying
     bank of the Issuer or, as the case may be, the Guarantor a payment
     confirmation in the form of a SWIFT message.

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                                      13

     For the purposes of this clause "BUSINESS DAY" means a day which is both:

     (a)  a day on which commercial banks and foreign exchange markets settle
          payments in London and any other place specified in the applicable
          Pricing Supplement as an Additional Business Centre; and

     (b)  either (i) in relation to a payment to be made in a Specified
          Currency other than euro, a day on which commercial banks and
          foreign exchange markets settle payments in the principal financial
          centre of the country of the relevant Specified Currency (if other
          than London and any Additional Business Centre) and which, if the
          Specified Currency is New Zealand Dollars, shall be Auckland or (ii)
          in relation to a payment to be made in euro, a day on which the
          TARGET System is open, where "TARGET SYSTEM" means the
          Trans-European Automated Real-Time Gross Settlement Express Transfer
          (TARGET) System. Unless otherwise provided in the applicable Pricing
          Supplement, the principal financial centre for any currency shall be
          as provided in the ISDA Definitions.

(3)  The Agent shall ensure that payments of both principal and interest in
     respect of a Temporary Global Note will be made only to the extent that
     certification of non-U.S. beneficial ownership as required by U.S.
     securities laws and U.S. Treasury regulations (in the form set out in the
     Temporary Global Note) has been received from Euroclear and/or
     Clearstream, Luxembourg in accordance with the terms thereof.

(4)  The Agent or the relevant Paying Agent shall pay or cause to be paid all
     amounts due in respect of the Notes on behalf of each Issuer and the
     Guarantor in the manner provided in the Conditions. If any payment
     provided for in sub-clause (1) is made late but otherwise in accordance
     with the provisions of this Agreement, the Agent and each Paying Agent
     shall nevertheless make payments in respect of the Notes as aforesaid
     following receipt by it of such payment.

(5)  If for any reason the Agent considers in its sole discretion that the
     amounts to be received by the Agent pursuant to sub-clause (1) will be,
     or the amounts actually received by it pursuant thereto are, insufficient
     to satisfy all claims in respect of all payments then falling due in
     respect of the Notes, neither the Agent nor any Paying Agent shall be
     obliged to pay any such claims until the Agent has received the full
     amount of all such payments.

(6)  Without prejudice to sub-clauses (4) and (5), if the Agent pays any
     amounts to the holders of Notes, Receipts or Coupons or to any Paying
     Agent at a time when it has not received payment in full in respect of
     the relevant Notes in accordance with sub-clause (1) (the excess of the
     amounts so paid over the amounts so received being the "SHORTFALL"), the
     relevant Issuer (failing which the Guarantor) will, in addition to paying
     amounts due under sub-clause (1), pay to the Agent on demand interest (at
     a rate which represents the Agent's cost of funding the Shortfall as
     evidenced to the relevant Issuer and the Guarantor by the provision of
     details of the calculation of the cost of funding) on the Shortfall (or
     the unreimbursed portion thereof) until the receipt in full by the Agent
     of the Shortfall.

(7)  The Agent shall on demand promptly reimburse each Paying Agent for
     payments in respect of Notes properly made by such Paying Agent in
     accordance with this Agreement and the Conditions unless the Agent has
     notified the Paying Agent, prior to the opening of business in the
     location of the office of the Paying Agent through which payment in
     respect of the

<PAGE>

                                      14

     Notes can be made on the due date of a payment in respect of the Notes,
     that the Agent does not expect to receive sufficient funds to make
     payment of all amounts falling due in respect of such Notes.

(8)  Whilst any Notes are represented by Global Notes, all payments due in
     respect of such Notes shall be made to, or to the order of, the holder of
     the Global Notes, subject to and in accordance with the provisions of the
     Global Notes. On the occasion of any such payment the Paying Agent to
     which the Global Note was presented for the purpose of making such
     payment shall cause the appropriate Schedule to the relevant Global Note
     to be annotated so as to evidence the amounts and dates of such payments
     of principal and/or interest as applicable.

(9)  If the amount of principal and/or interest then due for payment is not
     paid in full (otherwise than by reason of a deduction required by law to
     be made therefrom), the Paying Agent to which a Note is presented for the
     purpose of making such payment shall make a record of such Shortfall on
     the Note and such record shall, in the absence of manifest error, be
     prima facie evidence that the payment in question has not to that extent
     been made.

(10) The obligations of the Guarantor as set forth in this clause 7 shall be
     based on the Guarantee only and not be deemed to be primary obligations
     of the Guarantor.

8.   DETERMINATIONS AND NOTIFICATIONS IN RESPECT OF NOTES AND INTEREST
     DETERMINATION

(1)  DETERMINATIONS AND NOTIFICATIONS

     (a)  The Agent shall make all such determinations and calculations
          (howsoever described) as it is required to do under the Conditions,
          all subject to and in accordance with the Conditions.

     (b)  The Agent shall not be responsible to any Issuer, the Guarantor or
          to any third party (except in the event of negligence, default or
          bad faith of the Agent, as the case may be) as a result of the Agent
          having acted on any quotation given by any Reference Bank which
          subsequently may be found to be incorrect.

     (c)  The Agent shall promptly notify (and confirm in writing to) the
          relevant Issuer, the Guarantor, the other Paying Agents and (in
          respect of a Series of Notes listed on a Stock Exchange) the
          relevant Stock Exchange and Listing Agent of, inter alia, each Rate
          of Interest, Interest Amount and Interest Payment Date and all other
          amounts, rates and dates which it is obliged to determine or
          calculate under the Conditions as soon as practicable after the
          determination thereof and of any subsequent amendment thereto
          pursuant to the Conditions.

     (d)  The Agent shall use its best endeavours to cause each Rate of
          Interest, Interest Amount and Interest Payment Date and all other
          amounts, rates and dates which it is obliged to determine or
          calculate under the Conditions to be published as required in
          accordance with the Conditions as soon as possible after their
          determination or calculation.

     (e)  If the Agent does not at any material time for any reason determine
          and/or calculate and/or publish the Rate of Interest, Interest
          Amount and/or Interest Payment Date in

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                                      15

          respect of any Interest Period or any other amount, rate or date as
          provided in this clause, it shall forthwith notify the relevant
          Issuer, the Guarantor and the other Paying Agents of such fact.

     (f)  Determinations with regard to Notes (including, without limitation,
          Indexed Notes and Dual Currency Notes) shall be made by the
          Calculation Agent specified in the applicable Pricing Supplement in
          the manner specified in the applicable Pricing Supplement. Unless
          otherwise agreed between the relevant Issuer, the Guarantor and the
          relevant Dealer or unless the Agent is the Calculation Agent (in
          which case the provisions of this Agreement shall apply), such
          determinations shall be made on the basis of a Calculation Agency
          Agreement substantially in the form of Appendix A to this Agreement.

(2)  INTEREST DETERMINATION, SCREEN RATE DETERMINATION INCLUDING FALLBACK
     PROVISIONS

     (a)  Where Screen Rate Determination is specified in the applicable
          Pricing Supplement as the manner in which the Rate of Interest is to
          be determined, the Rate of Interest for each Interest Period will,
          subject as provided below, be either:

          (i)  the offered quotation; or

          (ii) the arithmetic mean (rounded if necessary to the fifth decimal
               place, with 0.000005 being rounded upwards) of the offered
               quotations,

          (expressed as a percentage rate per annum), for the Reference Rate
          for deposits in the Specified Currency for that Interest Period
          which appears or appear, as the case may be, on the Relevant Screen
          Page as at 11.00 a.m. (London time, in the case of LIBOR, or
          Brussels time, in the case of EURIBOR) on the Interest Determination
          Date in question plus or minus (as indicated in the applicable
          Pricing Supplement) the Margin (if any), all as determined by the
          Agent. If five or more such offered quotations are available on the
          Relevant Screen Page, the highest (or, if there is more than one
          such highest quotation, one only of such quotations) and the lowest
          (or, if there is more than one such lowest quotation, one only of
          such quotations) shall be disregarded by the Agent for the purpose
          of determining the arithmetic mean (rounded as provided above) of
          such offered quotations.

     (b)  If the Relevant Screen Page is not available or, if in the case of
          sub-clause 8(2)(a)(i) above, no such offered quotation appears or,
          in the case of sub-clause 8(2)(a)(ii) above, fewer than three such
          offered quotations appear, in each case as at the time specified in
          the preceding paragraph the Agent shall request the principal London
          office (in the case of LIBOR) or Euro-zone office (in the case of
          EURIBOR) of each of the Reference Banks to provide the Agent with
          its offered quotation (expressed as a percentage rate per annum) for
          the Reference Rate at approximately 11.00 a.m. (London time, in the
          case of LIBOR, or Brussels time, in the case of EURIBOR) on the
          Interest Determination Date in question. If two or more of the
          Reference Banks provide the Agent with such offered quotations, the
          Rate of Interest for such Interest Period shall be the arithmetic
          mean (rounded if necessary to the fifth decimal place with 0.000005
          being rounded upwards) of such offered quotations plus or minus (as
          appropriate) the Margin (if any), all as determined by the Agent.

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                                      16

     (c)  If on any Interest Determination Date one only or none of the
          Reference Banks provides the Agent with such offered quotations as
          provided in the preceding paragraph, the Rate of Interest for the
          relevant Interest Period shall be the rate per annum which the Agent
          determines as being the arithmetic mean (rounded if necessary to the
          fifth decimal place, with 0.000005 being rounded upwards) of the
          rates, as communicated to (and at the request of) the Agent by the
          Reference Banks or any two or more of them, at which such banks were
          offered, at approximately 11.00 a.m. (London time, in the case of
          LIBOR, or Brussels time, in the case of EURIBOR) on the relevant
          Interest Determination Date, deposits in the Specified Currency for
          a period equal to that which would have been used for the Reference
          Rate by leading banks in the London inter-bank market (in the case
          of LIBOR) or the Euro-zone inter-bank market (in the case of
          EURIBOR) plus or minus (as appropriate) the Margin (if any) or, if
          fewer than two of the Reference Banks provide the Agent with such
          offered rates, the offered rate for deposits in the Specified
          Currency for a period equal to that which would have been used for
          the Reference Rate, or the arithmetic mean (rounded as provided
          above) of the offered rates for deposits in the Specified Currency
          for a period equal to that which would have been used for the
          Reference Rate, at which, at approximately 11.00 a.m. (London time,
          in the case of LIBOR, or Brussels time, in the case of EURIBOR) on
          the relevant Interest Determination Date, any one or more banks
          (which bank or banks is or are in the opinion of the relevant Issuer
          suitable for such purpose) informs the Agent it is quoting to
          leading banks in the London inter-bank market (in the case of LIBOR)
          or the Euro-zone inter-bank market (in the case of EURIBOR) plus or
          minus (as appropriate) the Margin (if any), provided that, if the
          Rate of Interest cannot be determined in accordance with the
          foregoing provisions of this paragraph, the Rate of Interest shall
          be determined as at the last preceding Interest Determination Date
          (though substituting, where a different Margin is to be applied to
          the relevant Interest Period from that which applied to the last
          preceding Interest Period, the Margin relating to the relevant
          Interest Period, in place of the Margin relating to that last
          preceding Interest Period).

     (d)  If the Reference Rate from time to time in respect of Floating Rate
          Notes is specified in the applicable Pricing Supplement as being
          other than LIBOR or, as the case may be, EURIBOR, the Rate of
          Interest in respect of such Notes will be determined as provided in
          the applicable Pricing Supplement.

9.   NOTICE OF ANY WITHHOLDING OR DEDUCTION

     If any Issuer and/or the Guarantor is, in respect of any payment,
     compelled to withhold or deduct any amount for or on account of taxes,
     duties, assessments or governmental charges as specifically contemplated
     under the Conditions, such Issuer and/or the Guarantor shall give notice
     thereof to the Agent as soon as it becomes aware of the requirement to
     make such withholding or deduction and shall give to the Agent such
     information as it shall require to enable it to comply with such
     requirement.

10.  DUTIES OF THE AGENT IN CONNECTION WITH EARLY REDEMPTION

(1)  If any Issuer decides to redeem any Notes for the time being outstanding
     prior to their Maturity Date in accordance with the Conditions, such
     Issuer shall give notice of such decision to the Agent not less than 15
     days before the date on which the relevant Issuer will

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                                      17

     give notice to the Noteholders in accordance with the Conditions of such
     redemption in order to enable the Agent to undertake its obligations
     herein and in the Conditions.

(2)  If some only of the Notes are to be redeemed on such date, the Agent
     shall, in the case of Definitive Notes, make the required drawing in
     accordance with the Conditions but shall give the relevant Issuer
     reasonable notice of the time and place proposed for such drawing and the
     relevant Issuer shall be entitled to send representatives to attend such
     drawing and shall, in the case of Notes in global form, co-ordinate the
     selection of Notes to be redeemed with Euroclear and Clearstream,
     Luxembourg, all in accordance with the Conditions.

(3)  The Agent shall publish the notice required in connection with any such
     redemption and shall at the same time also publish a separate list of the
     serial numbers of any Notes in definitive form previously drawn and not
     presented for redemption. Such notice shall specify the date fixed for
     redemption, the redemption amount, the manner in which redemption will be
     effected and, in the case of a partial redemption of Definitive Notes,
     the serial numbers of the Notes to be redeemed. Such notice will be
     published in accordance with the Conditions. The Agent will also notify
     the other Paying Agents of any date fixed for redemption of any Notes.

(4)  Each Paying Agent will keep a stock of Put Notices and will make such
     notices available on demand to holders of Definitive Notes, the
     Conditions of which provide for redemption at the option of Noteholders.
     Upon receipt of any Note deposited in the exercise of such option in
     accordance with the Conditions, the Paying Agent with which such Note is
     deposited shall hold such Note (together with any Receipts, Coupons and
     Talons relating to it deposited with it) on behalf of the depositing
     Noteholder (but shall not, save as provided below, release it) until the
     due date for redemption of the relevant Note consequent upon the exercise
     of such option, when, subject as provided below, it shall present such
     Note (and any such Receipts, Coupons and Talons) to itself for payment of
     the amount due thereon together with any interest due on such date in
     accordance with the Conditions and shall pay such moneys in accordance
     with the directions of the Noteholder contained in the relevant Put
     Notice. If, prior to such due date for its redemption, such Note becomes
     immediately due and repayable or if upon due presentation payment of such
     redemption moneys is improperly withheld or refused, the Paying Agent
     concerned shall post such Note (together with any such Receipts, Coupons
     and Talons) by uninsured post to, and at the risk of, the relevant
     Noteholder unless the Noteholder has otherwise requested and paid the
     costs of such insurance to the relevant Paying Agent at the time of
     depositing the Notes at such address as may have been given by the
     Noteholder in the relevant Put Notice. At the end of each period for the
     exercise of such option, each Paying Agent shall promptly notify the
     Agent of the principal amount of the Notes in respect of which such
     option has been exercised with it together with their serial numbers and
     the Agent shall promptly notify such details to the relevant Issuer.

11.  RECEIPT AND PUBLICATION OF NOTICES

(1)  Forthwith upon the receipt by the Agent of a demand or notice from any
     Noteholder in accordance with the Conditions the Agent shall forward a
     copy thereof to the relevant Issuer and the Guarantor.

(2)  On behalf of and at the request and expense of each Issuer (failing which
     the Guarantor), the Agent shall cause to be published all notices
     required to be given by any Issuer or the Guarantor to the Noteholders in
     accordance with the Conditions.

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                                      18

12.  CANCELLATION OF NOTES, RECEIPTS, COUPONS AND TALONS

(1)  All Notes which are redeemed, all Receipts or Coupons which are paid and
     all Talons which are exchanged shall be cancelled by the Agent or Paying
     Agent by which they are redeemed, paid or exchanged. In addition, all
     Notes which are purchased by or on behalf of any Issuer, the Guarantor or
     any of their respective subsidiaries and are surrendered to a Paying
     Agent for cancellation, together (in the case of Definitive Notes) with
     all unmatured Receipts, Coupons or Talons (if any) attached thereto or
     surrendered therewith, shall be cancelled by the Paying Agent to which
     they are surrendered. Each of the other Paying Agents shall give to the
     Agent details of all payments made by it and shall deliver all cancelled
     Notes, Receipts, Coupons and Talons to the Agent.

(2)  A certificate stating:

     (a)  the aggregate nominal amount of Notes which have been redeemed and
          the aggregate amount paid in respect thereof;

     (b)  the number of Notes cancelled together (in the case of Notes in
          definitive form) with details of all unmatured Receipts, Coupons or
          Talons (if any) attached thereto or delivered therewith;

     (c)  the aggregate amount paid in respect of interest on the Notes;

     (d)  the total number by maturity date of Receipts, Coupons and Talons so
          cancelled; and

     (e)  (in the case of Definitive Notes) the serial numbers of such Notes,

     shall be given to the relevant Issuer and the Guarantor by the Agent as
     soon as reasonably practicable and in any event within three months after
     the date of such repayment, payment, cancellation or replacement, as the
     case may be.

(3)  The Agent shall destroy all cancelled Notes, Receipts, Coupons and Talons
     and, forthwith upon destruction, furnish the Issuer with a certificate of
     the serial numbers of the Notes (in the case of Notes in definitive form)
     and the number by maturity date of Receipts, Coupons and Talons so
     destroyed.

(4)  Without prejudice to the obligations of the Agent pursuant to sub-clause
     (2), the Agent shall keep a full and complete record of all Notes,
     Receipts, Coupons and Talons (other than serial numbers of Coupons,
     except those which have been replaced pursuant to Condition 10) and of
     their redemption, purchase by or on behalf of any Issuer or the Guarantor
     or any of their respective subsidiaries and cancellation, payment or
     replacement (as the case may be) and of all replacement Notes, Receipts,
     Coupons or Talons issued in substitution for mutilated, defaced,
     destroyed, lost or stolen Notes, Receipts, Coupons or Talons. The Agent
     shall in respect of the Coupons of each maturity retain (in the case of
     Coupons other than Talons) until the expiry of ten years from the
     Relevant Date in respect of such Coupons and (in the case of Talons)
     indefinitely either all paid or exchanged Coupons of that maturity or a
     list of the serial numbers of Coupons of that maturity still remaining
     unpaid or unexchanged. The Agent shall at all reasonable times make such
     record available to the relevant Issuer, the Guarantor and any persons
     authorised by either of them for inspection and for the taking of copies
     thereof or extracts therefrom.

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                                      19

(5)  All records and certificates made or given pursuant to this clause and
     clause 13 shall make a distinction between Notes, Receipts, Coupons and
     Talons of each Series.

13.  ISSUE OF REPLACEMENT NOTES, RECEIPTS, COUPONS AND TALONS

(1)  Each Issuer will cause a sufficient quantity of additional forms of
     Notes, Receipts, Coupons and Talons to be available, upon request, to the
     Replacement Agent at its specified office for the purpose of issuing
     replacement Notes, Receipts, Coupons and Talons as provided below.

(2)  The Replacement Agent will, subject to and in accordance with the
     Conditions and the following provisions of this clause, cause to be
     delivered any replacement Notes, Receipts, Coupons and Talons which any
     Issuer may determine to issue in place of Notes, Receipts, Coupons and
     Talons which have been lost, stolen, mutilated, defaced or destroyed.

(3)  In the case of a mutilated or defaced Note, the Replacement Agent shall
     ensure that (unless otherwise covered by such indemnity as the relevant
     Issuer may reasonably require) any replacement Note will only have
     attached to it Receipts, Coupons and Talons corresponding to those (if
     any) attached to the mutilated or defaced Note which is presented for
     replacement.

(4)  The Replacement Agent shall obtain verification in the case of an
     allegedly lost, stolen or destroyed Note, Receipt, Coupon or Talon in
     respect of which the serial number is known, that the Note, Receipt,
     Coupon or Talon has not previously been redeemed, paid or exchanged, as
     the case may be. The Replacement Agent shall not issue any replacement
     Note, Receipt, Coupon or Talon unless and until the claimant therefor
     shall have:

     (a)  paid such reasonable costs and expenses as may be incurred in
          connection therewith;

     (b)  furnished it with such evidence (including evidence as to the serial
          number of such Note, Receipt, Coupon or Talon) and indemnity (which
          may include a bank guarantee) as the relevant Issuer, the Guarantor
          and the Agent may reasonably require;

     (c)  in the case of any mutilated or defaced Note, Receipt, Coupon or
          Talon, surrendered it to the Replacement Agent.

(5)  The Replacement Agent shall cancel any mutilated or defaced Notes,
     Receipts, Coupons and Talons in respect of which replacement Notes,
     Receipts, Coupons and Talons have been issued pursuant to this clause and
     shall furnish the relevant Issuer and the Guarantor with a certificate
     stating the serial numbers of the Notes, Receipts, Coupons and Talons so
     cancelled and, unless otherwise instructed by the relevant Issuer in
     writing, shall destroy such cancelled Notes, Receipts, Coupons and Talons
     and furnish the relevant Issuer and the Guarantor with a destruction
     certificate containing the information specified in sub-clause 12(3).

(6)  The Replacement Agent shall, on issuing any replacement Note, Receipt,
     Coupon or Talon, forthwith inform the relevant Issuer, the Guarantor, the
     Agent and the other Paying Agents of the serial number of such
     replacement Note, Receipt, Coupon or Talon issued and (if known) of the
     serial number of the Note, Receipt, Coupon or Talon in place of which
     such replacement Note, Receipt, Coupon or Talon has been issued. Whenever
     replacement Receipts, Coupons or Talons are issued pursuant to the
     provisions of this clause, the

<PAGE>

                                      20

     Replacement Agent shall also notify the Agent and any other Paying Agents
     of the maturity dates of the lost, stolen, mutilated, defaced or
     destroyed Receipts, Coupons or Talons and of the replacement Receipts,
     Coupons or Talons issued.

(7)  The Agent shall keep a full and complete record of all replacement Notes,
     Receipts, Coupons and Talons issued and shall make such record available
     at all reasonable times to the Issuers, the Guarantor and any persons
     authorised by either of them for inspection and for the taking of copies
     thereof or extracts therefrom.

(8)  Whenever any Note, Receipt, Coupon or Talon for which a replacement Note,
     Receipt, Coupon or Talon has been issued and in respect of which the
     serial number is known is presented to the Agent or any of the other
     Paying Agents for payment, the Agent or, as the case may be, the relevant
     other Paying Agent shall immediately send notice thereof to the relevant
     Issuer, the Guarantor and the other Paying Agents.

(9)  The Paying Agents shall issue further Coupon sheets against surrender of
     Talons. A Talon so surrendered shall be cancelled by the relevant Paying
     Agent who (except where the Paying Agent is the Agent) shall inform the
     Agent of its serial number. Further Coupon sheets issued on surrender of
     Talons shall carry the same serial number as the surrendered Talon.

14.  COPIES OF DOCUMENTS AVAILABLE FOR INSPECTION

(1)  The executed Guarantee shall be deposited with the Agent and shall be
     held in safe custody by it on behalf of the Noteholders, the
     Receiptholders and the Couponholders at its specified office for the time
     being.

(2)  Each Paying Agent shall hold available for inspection at its specified
     office during normal business hours copies of all documents required to
     be so available by the Conditions of any Notes or the rules of any
     relevant Stock Exchange (or any other relevant authority). For these
     above purposes, each Issuer and the Guarantor shall furnish the Paying
     Agents with sufficient copies of each of the relevant documents.

15.  MEETINGS OF NOTEHOLDERS

(1)  The provisions of Schedule 4 hereto shall apply to meetings of the
     Noteholders and shall have effect in the same manner as if set out in
     this Agreement.

(2)  Without prejudice to sub-clause (1), each of the Agent and the other
     Paying Agents on the request of any Noteholder shall issue voting
     certificates and block voting instructions in accordance with Schedule 4
     and shall forthwith give notice to the relevant Issuer and the Guarantor
     in writing of any revocation or amendment of a block voting instruction.
     Each of the Agent and the other Paying Agents will keep a full and
     complete record of all voting certificates and block voting instructions
     issued by it and will, not less than 24 hours before the time appointed
     for holding a meeting or adjourned meeting, deposit at such place as the
     Agent shall designate or approve, full particulars of all voting
     certificates and block voting instructions issued by it in respect of
     such meeting or adjourned meeting.

<PAGE>

                                      21

16.  COMMISSIONS AND EXPENSES

(1)  The Issuers and the Guarantor agree to pay to the Agent such reasonable
     fees and commissions as the Issuers and the Guarantor and the Agent shall
     separately agree in respect of the services of the Agent and the Paying
     Agents hereunder and to reimburse any reasonable out-of-pocket expenses
     (including reasonable legal, printing, postage tax and cable) incurred by
     the Agent and the Paying Agents in connection with their said services
     including the expense of making such notifications and publications to
     Noteholders as are required by the Terms and Conditions of any Notes or
     as may be required by any Issuer.

(2)  In addition, the Issuers and the Guarantor jointly and severally agree
     with the Agent to reimburse its reasonable out-of-pocket expenses
     (including legal fees) incurred by the Agent in connection with the
     preparation, execution and delivery of this Agreement.

(3)  The Agent will make payment of the fees and commissions due hereunder to
     the Paying Agents and will reimburse their expenses promptly after the
     receipt of the relevant moneys from an Issuer or the Guarantor, as the
     case may be. None of the Issuers or the Guarantor shall be responsible
     for any such payment or reimbursement by the Agent to the Paying Agents.

17.  INDEMNITY

(1)  Each Issuer will, severally as to itself, and the Guarantor will, jointly
     with the relevant Issuer and severally as to itself, indemnify the Agent
     and each of the Paying Agents and each of their directors, officers,
     employees and agents against any losses, liabilities, claims, actions or
     demands and any reasonable out-of-pocket costs and expenses (including,
     but not limited to, all reasonable costs, charges and expenses paid or
     incurred in disputing or defending any of the foregoing) which it may
     incur or which may be made against the Agent or any Paying Agent as a
     result of or in connection with its appointment or the exercise of its
     powers and duties hereunder except such as may result from its own
     default, negligence or bad faith or that of its officers, directors,
     employees or agents or the breach by it of the terms of this Agreement.

(2)  Each of the Agent and the Paying Agents will severally indemnify each of
     the Issuers and the Guarantor and each of their directors, officers,
     employees and agents against any loss, liability, claim, action or demand
     and any reasonable out-of-pocket costs and expenses (including, but not
     limited to, all reasonable costs, legal fees, charges and expenses paid
     or incurred in disputing or defending any of the foregoing) which the
     relevant company may incur or which may be made against the relevant
     company as a result of the breach by the Agent or such Paying Agents of
     the terms of this Agreement or its default, negligence or bad faith or
     that of its officers, directors, employees or agents.

18.  REPAYMENT BY THE AGENT

     Upon any Issuer or the Guarantor, as the case may be, being discharged
     from its obligation to make payments in respect of any Notes pursuant to
     the relevant Conditions, and provided that there is no outstanding, bona
     fide and proper claim in respect of any such payments, the Agent shall
     forthwith on demand pay to the relevant Issuer sums equivalent to any
     amounts paid to it by the relevant Issuer or the Guarantor, as the case
     may be, for the purposes of such payments.

<PAGE>

                                      22

19.  CONDITIONS OF APPOINTMENT

(1)  The Agent shall be entitled to deal with money paid to it by any Issuer
     or the Guarantor for the purpose of this Agreement in the same manner as
     other money paid to a banker by its customers except:

     (a)  that it shall not exercise any right of set-off, lien or similar
          claim in respect thereof;

     (b)  as provided in sub-clause (2) below; and

     (c)  that it shall not be liable to account to any Issuer or the
          Guarantor for any interest thereon.

(2)  In acting hereunder and in connection with the Notes, the Agent and the
     other Paying Agents shall act solely as agents of the Issuers and the
     Guarantor and will not thereby assume any obligations towards or
     relationship of agency or trust for or with any of the owners or holders
     of the Notes, Receipts, Coupons or Talons.

(3)  The Agent and the other Paying Agents hereby undertake to the Issuers and
     the Guarantor to perform such obligations and duties, and shall be
     obliged to perform such duties and only such duties, as are herein, in
     the Conditions and in the Procedures Memorandum specifically set forth,
     and no implied duties or obligations shall be read into this Agreement or
     the Notes against the Agent and the other Paying Agents, other than the
     duty to act honestly and in good faith and to exercise the diligence of a
     reasonably prudent agent in comparable circumstances.

(4)  The Agent may consult with legal and other professional advisers and the
     written opinion of such advisers shall be full and complete protection in
     respect of any action taken, omitted or suffered hereunder in good faith
     and in accordance with the opinion of such advisers.

(5)  Each of the Agent and the other Paying Agents shall be protected and
     shall incur no liability for or in respect of any action taken, omitted
     or suffered in reliance upon any instruction, request or order from any
     Issuer or the Guarantor or any notice, resolution, direction, consent,
     certificate, affidavit, statement, cable, telex or other paper or
     document which it reasonably believes to be genuine and to have been
     delivered, signed or sent by the proper party or parties or upon written
     instructions from the Issuer or the Guarantor.

(6)  Any of the Agent and the other Paying Agents and their officers,
     directors and employees may become the owner of, or acquire any interest
     in, any Notes, Receipts, Coupons or Talons with the same rights that it
     or he would have if the Agent or the relevant other Paying Agent, as the
     case may be, concerned were not appointed hereunder, and may engage or be
     interested in any financial or other transaction with any Issuer or the
     Guarantor and may act on, or as depositary, trustee or agent for, any
     committee or body of holders of Notes or Coupons or in connection with
     any other obligations of any Issuer or the Guarantor as freely as if the
     Agent or the relevant other Paying Agent, as the case may be, were not
     appointed hereunder.

(7)  Each Issuer and the Guarantor shall provide the Agent with a certified
     copy of the list of persons authorised to execute documents and take
     action on its behalf in connection with this Agreement and shall notify
     the Agent immediately in writing if any of such persons ceases to be so
     authorised or if any additional person becomes so authorised together, in
     the case of an

<PAGE>

                                      23

     additional authorised person, with evidence satisfactory to the Agent
     that such person has been so authorised.

20.  COMMUNICATION BETWEEN THE PARTIES

     A copy of all communications relating to the subject matter of this
     Agreement between any Issuer or the Guarantor and the Noteholders,
     Receiptholders or Couponholders and any of the Paying Agents (other than
     the Agent) shall be sent to the Agent by the other relevant Paying Agent.

21.  CHANGES IN AGENT AND OTHER PAYING AGENTS

(1)  Each Issuer and the Guarantor agree that, for so long as any Note is
     outstanding, or until moneys for the payment of all amounts in respect of
     all outstanding Notes have been made available to the Agent and have been
     returned to the relevant Issuer or the Guarantor, as the case may be, as
     provided herein (whichever is the later):

     (a)  so long as any Notes are listed on any Stock Exchange or admitted to
          listing by any other relevant authority, there will at all times be
          a Paying Agent (which may be the Agent) with a specified office in
          such place as may be required by the rules and regulations of such
          Stock Exchange or other relevant authority; and

     (b)  there will at all times be a Paying Agent (which may be the Agent)
          with its specified office in a country outside the tax jurisdiction
          of the Issuer; and

     (c)  there will at all times be an Agent.

     In addition, each Issuer and the Guarantor shall forthwith appoint a
     Paying Agent having a specified office in New York City in the
     circumstances described in the final paragraph of Condition 5(b). Any
     termination, appointment or change in the Agent or Paying Agent shall
     only take effect (other than in the case of insolvency, when it shall be
     of immediate effect) after not less than 30 nor more than 45 days' prior
     notice thereof shall have been given to the Noteholders in accordance
     with Condition 14.

(2)  The Agent may (subject as provided in sub-clause (4) below) at any time
     resign as Agent by giving at least 90 days' written notice to the Issuers
     and the Guarantor of such intention on its part, specifying the date on
     which its desired resignation shall become effective.

(3)  The Agent may (subject as provided in sub-clause (4) below) be removed at
     any time by the Issuers and the Guarantor on at least 45 days' notice by
     the filing with it of an instrument in writing signed on behalf of the
     Issuers and the Guarantor specifying such removal and the date when it
     shall become effective.

(4)  Any resignation under sub-clause (2) or removal under sub-clauses (3) or
     (5) shall only take effect upon the appointment by the Issuers and the
     Guarantor as hereinafter provided, of a successor Agent and (other than
     in cases of insolvency of the Agent, when such resignation or removal
     shall become effective immediately) on the expiry of the notice to be
     given under clause 23. The Issuers and the Guarantor agree with the Agent
     that if, by the day falling ten days before the expiry of any notice
     under sub-clause (2), the Issuers and the Guarantor have not appointed a
     successor Agent, then the Agent shall be entitled, on behalf of the
     Issuers and the Guarantor, to appoint as a successor Agent in its place a
     reputable financial

<PAGE>

                                      24

     institution of good standing which the Issuer and the Guarantor shall
     approve (such approval not to be unreasonably withheld or delayed).

(5)  In case at any time the Agent resigns, or is removed, or becomes
     incapable of acting or is adjudged bankrupt or insolvent, or files a
     voluntary petition in bankruptcy or makes an assignment for the benefit
     of its creditors or consents to the appointment of an administrator,
     liquidator or administrative or other receiver of all or a substantial
     part of its property, or admits in writing its inability to pay or meet
     its debts as they mature or suspends payment thereof, or if any order of
     any court is entered approving any petition filed by or against it under
     the provisions of any applicable bankruptcy or insolvency law or if a
     receiver of it or of all or a substantial part of its property is
     appointed or if any officer takes charge or control of it or of its
     property or affairs for the purpose of rehabilitation, conservation or
     liquidation, a successor Agent, which shall be a reputable financial
     institution of good standing may be appointed by the Issuers and the
     Guarantor by an instrument in writing filed with the successor Agent.
     Upon the appointment as aforesaid of a successor Agent and acceptance by
     the latter of such appointment and (other than in case of insolvency of
     the Agent when it shall be of immediate effect) upon expiry of the notice
     to be given under clause 23 the Agent so superseded shall cease to be the
     Agent hereunder.

(6)  Subject to sub-clause (1), the Issuers and the Guarantor may, after prior
     consultation with the Agent, terminate the appointment of any of the
     other Paying Agents at any time and/or appoint one or more further other
     Paying Agents by giving to the Agent, and to the relevant other Paying
     Agent at least 45 days' notice in writing to that effect (other than in
     the case of insolvency of the other Paying Agent).

(7)  Subject to sub-clause (1), all or any of the Paying Agents may resign
     their respective appointments hereunder at any time by giving the
     Issuers, the Guarantor and the Agent at least 45 days' written notice to
     that effect.

(8)  Upon its resignation or removal becoming effective, the Agent or the
     relevant Paying Agent:

     (a)  shall forthwith transfer all moneys held by it hereunder and, if
          applicable, the records referred to in clauses 12(4) and 13(7) to
          the successor Agent hereunder; and

     (b)  shall be entitled to the payment by the Issuers or the Guarantor of
          its commissions, fees and expenses for the services therefore
          rendered hereunder in accordance with the terms of clause 16.

(9)  Upon its appointment becoming effective, a successor Agent and any new
     Paying Agent shall, without further act, deed or conveyance, become
     vested with all the authority, rights, powers, trusts, immunities, duties
     and obligations of its predecessor or, as the case may be, a Paying Agent
     with like effect as if originally named as Agent or (as the case may be)
     a Paying Agent hereunder.

22.  MERGER AND CONSOLIDATION

     Any corporation into which the Agent or any other Paying Agent may be
     merged or converted, or any corporation with which the Agent or any of
     the other Paying Agents may be consolidated, or any corporation resulting
     from any merger, conversion or consolidation to which the Agent or any of
     the other Paying Agents shall be a party, or any corporation to which the
     Agent or any of the other Paying Agents shall sell or otherwise transfer
     all or

<PAGE>

                                      25

     substantially all the assets of the Agent or any other Paying Agent
     shall, on the date when such merger, conversion, consolidation or
     transfer becomes effective and to the extent permitted by any applicable
     laws, become the successor Agent or, as the case may be, other Paying
     Agent under this Agreement without the execution or filing of any paper
     or any further act on the part of the parties hereto, unless otherwise
     required by the Issuers and the Guarantor, and after the said effective
     date all references in this Agreement to the Agent or, as the case may
     be, such other Paying Agent shall be deemed to be references to such
     corporation. Written notice of any such merger, conversion, consolidation
     or transfer shall forthwith be given to each Issuer and the Guarantor by
     the relevant Agent or other Paying Agent.

23.  NOTIFICATION OF CHANGES TO PAYING AGENTS

     Following receipt of notice of resignation from the Agent or any other
     Paying Agent and forthwith upon appointing a successor Agent or, as the
     case may be, further or other Paying Agents or on giving notice to
     terminate the appointment of any Agent or, as the case may be, other
     Paying Agent, the Agent (on behalf of and at the expense of the Issuers
     and the Guarantor) shall give or cause to be given not more than 45 days'
     nor less than 30 days' notice thereof to the Noteholders in accordance
     with the Conditions.

24.  CHANGE OF SPECIFIED OFFICE

     If the Agent or any other Paying Agent determines to change its specified
     office it shall give to the Issuers, the Guarantor and (if applicable)
     the Agent written notice of such determination giving the address of the
     new specified office which shall be in the same city and stating the date
     on which such change is to take effect, which shall not be less than 45
     days thereafter. The Agent (on behalf and at the expense of the Issuers
     and the Guarantor) shall within 15 days of receipt of such notice (unless
     the appointment of the Agent or the other relevant Paying Agent, as the
     case may be, is to terminate pursuant to clause 21 on or prior to the
     date of such change) give or cause to be given not more than 45 days' nor
     less than 30 days' notice thereof to the Noteholders in accordance with
     the Conditions.

25.  NOTICES

(1)  Any notice or communication given hereunder shall be sufficiently given
     or served:

     (a)  if delivered in person to the relevant address specified on the
          signature pages hereof or such other address as may be notified by
          the recipient in accordance with this clause and, if so delivered,
          shall be deemed to have been delivered at time of receipt; or

     (b)  if sent by facsimile to the relevant number specified on the
          signature pages hereof or such other number as may be notified by
          the recipient in accordance with this clause and, if so sent, shall
          be deemed to have been delivered when an acknowledgement of receipt
          is received.

     Where a communication is received after 5 p.m. local time in the place to
     which the communication is addressed it shall be deemed to be received
     and become effective on the next business day.

<PAGE>

                                      26

(2)  A copy of any notice served in accordance with subclause (1) above on an
     Issuer shall be given to the Guarantor at:

     Klybeckstrasse 141
     CH-4002 Basle
     Switzerland

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

26.  TAXES AND STAMP DUTIES

     The Issuers and the Guarantor jointly and severally agree to pay any and
     all stamp and other documentary taxes or duties which may be payable in
     Germany, the United States of America, the United Kingdom, the Grand
     Duchy of Luxembourg, Belgium or Switzerland in connection with the
     execution, delivery, performance and enforcement of this Agreement, the
     Deed of Covenant or the Deed of Guarantee.

27.  CURRENCY INDEMNITY

     If, under any applicable law and whether pursuant to a judgment being
     made or registered against any Issuers and/or the Guarantor or in the
     liquidation, insolvency or analogous process of any Issuer and/or the
     Guarantor or for any other reason, any payment under or in connection
     with this Agreement is made or falls to be satisfied in a currency (the
     "other currency") other than that in which the relevant payment is
     expressed to be due (the "required currency") under this Agreement, then,
     to the extent that the payment (when converted into the required currency
     at the rate of exchange on the date of payment or, if it is not
     practicable for the Agent or the relevant other Paying Agent to purchase
     the required currency with the other currency on the date of payment, at
     the rate of exchange as soon thereafter as it is practicable for it to do
     so or, in the case of a liquidation, insolvency or analogous process at
     the rate of exchange on the latest date permitted by applicable law for
     the determination of liabilities in such liquidation, insolvency or
     analogous process) actually received by the Agent or the relevant other
     Paying Agent falls short of the amount due under the terms of this
     Agreement, the relevant Issuer and the Guarantor each undertakes that it
     shall, as a separate and independent obligation, indemnify and hold
     harmless the Agent and each other Paying Agent against the amount of such
     shortfall. For the purpose of this clause, "rate of exchange" means the
     rate at which the Agent or the relevant other Paying Agent is able on the
     relevant date to purchase the required currency with the other currency
     and shall take into account any premium and other costs of exchange. The
     parties hereto understand and agree that in the event that the required
     currency is replaced by the Euro after the date hereof, the Euro will not
     be considered an "other currency" for the purposes of this clause 27.

28.  AMENDMENTS

     This Agreement may be amended in writing by agreement between the
     Issuers, the Guarantor, the Agent and the other Paying Agents, but
     without the consent of any Noteholder, Receiptholder or Couponholder, (i)
     for the purpose of curing any ambiguity or of curing, correcting or
     supplementing any defective provision contained herein or complying with
     mandatory provisions of the law of the jurisdiction in which the Issuer
     or Guarantor is incorporated or (ii) in any manner which the parties may
     mutually deem

<PAGE>

                                      27

     necessary or desirable and which shall not be materially prejudicial to
     the interests of the Noteholders. The Issuers, the Guarantor and the
     Agent may also agree any modification pursuant to Condition 15.

29.  DESCRIPTIVE HEADINGS

     The descriptive headings in this Agreement are for convenience of
     reference only and shall not define or limit the provisions hereof.

30.  CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

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

31.  GOVERNING LAW AND SUBMISSION TO JURISDICTION

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

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

32.  COUNTERPARTS

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

<PAGE>

28

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

<PAGE>

                                  APPENDIX A

                     FORM OF CALCULATION AGENCY AGREEMENT

                       Dated [                 ], 2[ ]

                        [CIBA SPECIALTY CHEMICALS PLC/
                     CIBA SPECIALTY CHEMICALS CORPORATION/
              CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH]
                                   as Issuer

                                    - and -

                     CIBA SPECIALTY CHEMICALS HOLDING INC.
                                 as Guarantor

                              U.S. $2,000,000,000
                         EURO MEDIUM TERM NOTE PROGRAM

                     _____________________________________

                         CALCULATION AGENCY AGREEMENT
                     _____________________________________

                                 ALLEN & OVERY
                                    London

<PAGE>

                                      30

                         CALCULATION AGENCY AGREEMENT

                                in respect of a

                         EURO MEDIUM TERM NOTE PROGRAM

THIS AGREEMENT is made on [                  ], 2[  ] BETWEEN:

(1)  [CIBA SPECIALTY CHEMICALS CORPORATION of 560 White Plains Road,
     Tarrytown, New York 10591-9005, United States/CIBA SPECIALTY CHEMICALS
     PLC of Hulley Road, Macclesfield, Cheshire SK10 2NX/CIBA
     SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH of Chemiestrasse D-68623
     Lampertheim, Germany] (the "Issuer");

(2)  CIBA SPECIALTY CHEMICALS HOLDING INC. of Klybeckstrase 141, CH-4002
     Basle, Switzerland (the "Guarantor"); and

(3)  [.....] of [.....] (the "Calculation Agent", which expression shall
     include its successor or successors for the time being as calculation
     agent hereunder).

WHEREAS:

(A)  The Issuer, the Guarantor and certain other subsidiaries of the Guarantor
     have entered into an amended and restated program agreement with the
     Dealers named therein dated o March, 2001 under which the Issuer and such
     other subsidiaries may issue Euro Medium Term Notes ("Notes").

(B)  The Notes will be issued subject to and with the benefit of an amended
     and restated agency agreement (the "Agency Agreement") dated 30th March,
     2001 and entered into between the Issuer, the Guarantor, such other
     subsidiaries, The Chase Manhattan Bank as Agent (the "Agent" which
     expression shall include its successor or successors for the time being
     under the Agency Agreement) and the other parties named therein.

NOW IT IS HEREBY AGREED that:

1.   APPOINTMENT OF THE CALCULATION AGENT

     The Issuer and the Guarantor hereby appoint [................] as
     Calculation Agent in respect of each Series of Notes described in the
     Schedule hereto (the "Relevant Notes") for the purposes set out in clause
     2 below, all upon the provisions hereinafter set out. The agreement of
     the parties hereto that this Agreement is to apply to each Series of
     Relevant Notes shall be evidenced by the manuscript annotation and
     signature in counterpart of the Schedule hereto.

2.   DUTIES OF CALCULATION AGENT

     The Calculation Agent shall in relation to each Series of Relevant Notes
     perform all the functions and duties imposed on the Calculation Agent by
     the terms and conditions of the Relevant Notes (the "Conditions")
     including endorsing the Schedule hereto appropriately in relation to each
     Series of Relevant Notes.

<PAGE>

                                      31

3.   EXPENSES

     Save as provided in clause 4 below, the Calculation Agent shall bear all
     expenses incurred by it in connection with its said services.

4.   INDEMNITY

(1)  The Issuer and the Guarantor shall jointly and severally indemnify and
     keep indemnified the Calculation Agent, its directors, officers,
     employees and agents against any losses, liabilities, claims, actions or
     demands and any reasonable out-of-pocket costs and expenses which it may
     incur or which may be made against it by third parties as a result of or
     in connection with its appointment or the exercise of its powers and
     duties under this Agreement except such as may result from its own
     default, negligence or bad faith or that of its officers, directors,
     employees or agents or the breach by it of the terms of this Agreement.
     The Issuer and the Guarantor must be notified immediately of such claims,
     actions or demands and be invited and permitted to participate in the
     defence thereof.

(2)  The Calculation Agent shall indemnify each of the Issuer and the
     Guarantor and each of their officers, directors, employees and agents
     against any losses, liabilities, claims, actions or demands and any
     reasonable out-of-pocket costs and expenses which it may incur or which
     may be made against it as a direct result of the breach by the
     Calculation Agent of the terms of this Agreement or its default,
     negligence or bad faith or that its agents, officers, directors or
     employees. The Calculation Agent must be notified immediately of such
     claims, actions or demands and be invited and permitted to participate in
     the defence thereof.

5.   CONDITIONS OF APPOINTMENT

(1)  In acting hereunder and in connection with the Relevant Notes the
     Calculation Agent shall act as agent of the Issuer and the Guarantor and
     shall not thereby assume any obligations towards or relationship of
     agency or trust for or with any of the owners or holders of the Relevant
     Notes or the receipts or coupons (if any) appertaining thereto (the
     "Receipts" and the "Coupons", respectively).

(2)  In relation to each issue of Relevant Notes the Calculation Agent shall
     be obliged to perform such duties and only such duties as are herein and
     in the Conditions specifically set forth and no implied duties or
     obligations shall be read into this Agreement or the Conditions against
     the Calculation Agent, other than the duty to act honestly and in good
     faith and to exercise the diligence of a reasonably prudent agent in
     comparable circumstances.

(3)  The Calculation Agent may consult with legal and other professional
     advisers and the written opinion of such advisers shall be full and
     complete protection in respect of any action taken, omitted or suffered
     hereunder in good faith and in accordance with the opinion of such
     advisers.

(4)  The Calculation Agent shall be protected and shall incur no liability for
     or in respect of any action taken, omitted or suffered in reliance upon
     any instruction, request or order from the Issuer or the Guarantor or any
     notice, resolution, direction, consent, certificate, affidavit,
     statement, cable, telex or other paper or document which it reasonably
     believes to be genuine and to have been delivered, signed or sent by the
     proper party or parties or upon written instructions from the Issuer or
     the Guarantor.

<PAGE>

                                      32

(5)  The Calculation Agent and any of its officers, directors and employees
     may become the owner of, or acquire any interest in, any Notes, Receipts
     or Coupons (if any) with the same rights that it or he would have if the
     Calculation Agent were not appointed hereunder, and may engage or be
     interested in any financial or other transaction with the Issuer or the
     Guarantor and may act on, or as depositary, trustee or agent for, any
     committee or body of holders of Notes or Coupons (if any) or in
     connection with any other obligations of the Issuer or the Guarantor as
     freely as if the Calculation Agent were not appointed hereunder.

6.   TERMINATION OF APPOINTMENT

(1)  The Issuer and the Guarantor may terminate the appointment of the
     Calculation Agent at any time by giving to the Calculation Agent at least
     45 days' prior written notice to that effect, provided that, so long as
     any of the Relevant Notes is outstanding:

     (a)  such notice shall not expire less than 45 days before any date upon
          which any payment is due in respect of any Relevant Notes; and

     (b)  notice shall be given in accordance with the Conditions to the
          holders of the Relevant Notes at least 30 days prior to any removal
          of the Calculation Agent.

(2)  Notwithstanding the provisions of sub-clause (1) above, if at any time:

     (a)  the Calculation Agent becomes incapable of acting, or is adjudged
          bankrupt or insolvent, or files a voluntary petition in bankruptcy
          or makes an assignment for the benefit of its creditors or consents
          to the appointment of an administrator, liquidator or administrative
          or other receiver of all or any substantial part of its property, or
          it admits in writing its inability to pay or meet its debts as they
          may mature or suspends payment thereof, or if any order of any court
          is entered approving any petition filed by or against it under the
          provisions of any applicable bankruptcy or insolvency law or if a
          receiver of it or of all or a substantial part of its property is
          appointed or if any officer takes charge or control of the
          Calculation Agent or of its property or affairs for the purpose of
          rehabilitation, conservation or liquidation; or

     (b)  the Calculation Agent fails duly to perform any function or duty
          imposed upon it by the Conditions and this Agreement,

     the Issuer and the Guarantor may forthwith without notice terminate the
     appointment of the Calculation Agent, in which event notice thereof shall
     be given to the holders of the Relevant Notes in accordance with the
     Conditions as soon as practicable thereafter.

(3)  The termination of the appointment pursuant to sub-clause (1) or (2)
     above of the Calculation Agent hereunder shall not entitle the
     Calculation Agent to any amount by way of compensation but shall be
     without prejudice to any amount then accrued due.

(4)  The Calculation Agent may resign its appointment hereunder at any time by
     giving to the Issuer and the Guarantor at least 90 days' prior written
     notice to that effect. Following receipt of a notice of resignation from
     the Calculation Agent, the Issuer or the Guarantor shall promptly give
     notice thereof to the holders of the Relevant Notes in accordance with
     the Conditions.

<PAGE>

                                      33

(5)  Notwithstanding the provisions of sub-clauses (1), (2) and (4) above, so
     long as any of the Relevant Notes is outstanding, the termination of the
     appointment of the Calculation Agent (whether by the Issuer, the
     Guarantor or by the resignation of the Calculation Agent) shall not be
     effective unless upon the expiry of the relevant notice a successor
     Calculation Agent has been appointed.

(6)  Any successor Calculation Agent appointed hereunder shall execute and
     deliver to its predecessor, the Issuer and the Guarantor an instrument
     accepting such appointment hereunder, and thereupon such a successor
     Calculation Agent, without further act, deed or conveyance, shall become
     vested with all the authority, rights, powers, trusts, immunities, duties
     and obligations of such predecessor with like effect as if originally
     named as the Calculation Agent hereunder.

(7)  If the appointment of the Calculation Agent hereunder is terminated
     (whether by the Issuer and the Guarantor or by the resignation of the
     Calculation Agent), the Calculation Agent shall on the date on which such
     termination takes effect deliver to the successor Calculation Agent any
     records concerning the Relevant Notes maintained by it (and copies of
     such documents and records as it is obliged by law or regulation to
     retain but except such documents it is required by law not to release),
     but shall have no other duties or responsibilities hereunder.

(8)  Any corporation into which the Calculation Agent may be merged or
     converted, or any corporation with which the Calculation Agent may be
     consolidated, or any corporation resulting from any merger, conversion or
     consolidation to which the Calculation Agent shall be a party, or any
     corporation to which the Calculation Agent shall sell or otherwise
     transfer all or substantially all of its assets shall, on the date when
     such merger, consolidation or transfer becomes effective and to the
     extent permitted by any applicable laws, become the successor Calculation
     Agent under this Agreement without the execution or filing of any paper
     or any further act on the part of any of the parties hereto, unless
     otherwise required by the Issuer and the Guarantor, and after the said
     effective date all references in this Agreement to the Calculation Agent
     shall be deemed to be references to such corporation. Written notice of
     any such merger, conversion, consolidation or transfer shall forthwith be
     given to the Issuer, the Guarantor and the Agent.

(9)  Upon giving notice of the intended termination of the appointment of the
     Calculation Agent, the Issuer and the Guarantor shall use all reasonable
     endeavours to appoint a further financial institution of good standing as
     successor Calculation Agent.

7.   NOTICES

     Any notice or communication given hereunder shall be sufficiently given
     or served:

     (a)  if delivered in person to the relevant address specified on the
          signature pages hereof or such other address as may be notified by
          the recipient in accordance with this clause and, if so delivered,
          shall be deemed to have been delivered at time of receipt; or

     (b)  if sent by facsimile to the relevant number specified on the
          signature pages hereof or such other number as may be notified by
          the recipient in accordance with this clause and, if so sent, shall
          be deemed to have been delivered when an acknowledgement of receipt
          is received (in the case of facsimile).

<PAGE>

                                      34

     Where a communication is received after 5 p.m. local time in the place to
     which the communication is addressed it shall be deemed to be received
     and become effective on the next business day.

8.   DESCRIPTIVE HEADINGS AND COUNTERPARTS

(1)  The descriptive headings in this Agreement are for convenience of
     reference only and shall not define or limit the provisions hereof.

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

9.   CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

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

10.  GOVERNING LAW AND SUBMISSION TO JURISDICTION

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

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

IN WITNESS whereof this Agreement has been entered into the day and year first
above written.

<PAGE>

                                      35

<PAGE>

                                      36

                 SCHEDULE TO THE CALCULATION AGENCY AGREEMENT

Series number     Issue Date     Maturity Date    Title and   Annotation by
                                                  Nominal     Calculation
                                                  Amount      Agent/Issuer

<PAGE>

                                      37

Issuer

[CIBA SPECIALTY CHEMICALS CORPORATION
560 White Plains Road
PO Box 2005
Tarrytown, New York
10591-9005

Telephone:   001 914 785 2000
Telefax:     001 914 785 2650
Attention:   Treasurer]/

[CIBA SPECIALTY CHEMICALS PLC
Hulley Road
Macclesfield
Cheshire
SK10 2NX

Telephone:   44 1 625 888 220
Telefax:     44 1 625 888 380
Attention:   Treasurer]/

[CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
Chemiestrasse
D-68623 Lampertheim
Germany

Telephone:   00 49 6206 152 810
Telefax:     00 49 6206 152 816
Attention:   Treasurer]

By:

Guarantor

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

Telephone:   00 41 61 636 2740
Telefax No:  00 41 61 636 6828
Attention:   Group Treasurer

By:                                By:

<PAGE>

                                      38

Calculation Agent

[

                           ]

Telephone:   [                       ]
Telefax No:  [                       ]
Attention:   [                       ]

Without prejudice to the foregoing execution of the Agreement by the parties
hereto, [Name of Luxembourg incorporated Calculation Agent] hereby expressly
and specifically confirms its agreement with the provisions of clause 9(2)
hereof for the purposes of Article 1 of the Protocol annexed to the Convention
on jurisdiction and the enforcement of judgments in civil and commercial
matters signed at Brussels on 27th September, 1968.

[Name of Luxembourg incorporated Calculation Agent]

By:

<PAGE>

                                      39

                                  SCHEDULE 1
                       TERMS AND CONDITIONS OF THE NOTES

<PAGE>

                                      60

                                     AGENT

                           The Chase Manhattan Bank
                                 Trinity Tower
                             9 Thomas More Street
                                London E1W 1YT

                                 PAYING AGENT

                     Chase Manhattan Bank Luxembourg S.A.
                                 5 Rue Plaetis
                               L-2338 Luxembourg

and/or such other or further Agent and other or further Paying Agents and/or
specified offices as may from time to time be duly appointed by the Issuer and
the Guarantor and notice of which has been given to the Noteholders.

<PAGE>

                                      61

                                  SCHEDULE 2
                FORMS OF GLOBAL AND DEFINITIVE NOTES, RECEIPTS,
                              COUPONS AND TALONS

                                    PART I

                         FORM OF TEMPORARY GLOBAL NOTE

THIS GLOBAL NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO OR FOR THE
BENEFIT OF U.S. PERSONS OTHER THAN PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. TERMS USED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN REGULATION S
UNDER THE SECURITIES ACT.

[BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS
NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN
SECTION 6049(B)(4) OF THE INTERNAL REVENUE CODE OF THE UNITED STATES AND THE
REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED
STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SECTION 6049(B)(4)
OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).]

[ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]2

[THIS NOTE CONSTITUTES [[COMMERCIAL PAPER]/[A SHORTER/LONGER] TERM DEBT
SECURITY]3 ISSUED IN ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE
BANKING ACT 1987. THE ISSUER OF THIS NOTE IS [CIBA SPECIALTY CHEMICALS
CORPORATION/CIBA SPECIALTY CHEMICALS PLC/CIBA SPEZIALITATENCHEMIE HOLDING
DEUTSCHLAND GMBH]4, WHICH IS NOT AN AUTHORISED INSTITUTION OR A EUROPEAN
AUTHORISED INSTITUTION (AS SUCH TERMS ARE DEFINED IN THE BANKING ACT 1987
(EXEMPT TRANSACTIONS) REGULATIONS 1997). REPAYMENT OF THE PRINCIPAL AND
PAYMENT OF ANY INTEREST OR PREMIUM IN CONNECTION WITH THIS NOTE HAS BEEN
GUARANTEED BY CIBA SPECIALTY CHEMICALS HOLDING INC. WHICH IS NEITHER AN
AUTHORISED INSTITUTION NOR A EUROPEAN AUTHORISED INSTITUTION.]5

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

1    This legend to appear on Notes issued by Ciba Specialty Chemicals
     Corporation with a maturity of 183 days or less.
2    This legend to appear on all Notes with a maturity of more than 183 days.
3    Include "commercial paper" if maturity of Notes is less than one year.
     Include "shorter" if maturity of Notes is ne year or more, but less than
     3 years. Include "longer" if maturity of Notes is 3 years of more.
4    Delete as applicable.
5    Delete except (a) where the Notes are denominated in Sterling or (b) the
     net proceeds of the issue of the Notes are accepted in the United
     Kingdom.

<PAGE>

                                      62

                   [CIBA SPECIALTY CHEMICALS CORPORATION (a
    company incorporated under the laws of the State of Delaware, U.S.A.)/

                         CIBA SPECIALTY CHEMICALS PLC
          (a company incorporated with limited liability in England)/

               CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
          (a company incorporated with limited liability in Germany)]

                 unconditionally and irrevocably guaranteed by

                     CIBA SPECIALTY CHEMICALS HOLDING INC.
        (a company incorporated with limited liability in Switzerland)

                             TEMPORARY GLOBAL NOTE

This Global Note is a Temporary Global Note in respect of a duly authorised
issue of Euro Medium Term Notes (the "Notes") of [Ciba Specialty Chemicals
Corporation/Ciba Specialty Chemicals PLC/Ciba Spezialitatenchemie Holding
Deutschland GmbH] (the "Issuer") described, and having the provisions
specified, in the Pricing Supplement attached hereto (the "Pricing
Supplement"). Payments in respect of the Notes have been unconditionally and
irrevocably guaranteed by Ciba Specialty Chemicals Holding Inc. (the
"Guarantor"). References herein to the Conditions shall be to the Terms and
Conditions of the Notes as set out in Schedule 1 to the Agency Agreement (as
defined below) as modified and supplemented by the information set out in the
Pricing Supplement, but in the event of any conflict between the provisions of
that Schedule and the information set out in the Pricing Supplement, the
Pricing Supplement will prevail.

Words and expressions defined or set out in the Conditions and/or the Pricing
Supplement shall bear the same meaning when used herein.

This Global Note is issued subject to, and with the benefit of, the Conditions
and an amended and restated Agency Agreement (the "Agency Agreement", which
expression shall be construed as a reference to that agreement as the same may
be amended, supplemented or restated from time to time) dated 30th March, 2001
and made between, inter alia, the Issuer, the Guarantor, The Chase Manhattan
Bank (the "Agent") and the other agents named therein.

For value received the Issuer, subject to and in accordance with the
Conditions, promises to pay to the bearer hereof on each Instalment Date (if
the Notes are repayable in instalments) and on the Maturity Date and/or on
such earlier date(s) as all or any of the Notes represented by this Global
Note may become due and repayable in accordance with the Conditions, the
amount payable under the Conditions in respect of such Notes on each such date
and to pay interest (if any) on the nominal amount of the Notes from time to
time represented by this Global Note calculated and payable as provided in the
Conditions together with any other sums payable under the Conditions, upon
presentation and, at maturity, surrender of this Global Note at the office of
the Agent at Trinity Tower, 9 Thomas More Street, London E1W 1YT or at the
specified office of any of the other paying agents located outside the United
States (except as provided in the Conditions) from time to time appointed by
the Issuer and the Guarantor in respect of the Notes, but in each case subject
to the requirements as to certification provided herein. On any redemption or
payment of an instalment or interest being made in respect of, or purchase and
cancellation of, any of the Notes represented by this Global Note details of
such redemption, payment or purchase and cancellation (as the case may

<PAGE>

                                      63

be) shall be entered by or on behalf of the Issuer in Schedule One hereto and
the relevant space in Schedule One hereto recording any such redemption,
payment or purchase and cancellation (as the case may be) shall be signed by
or on behalf of the Issuer.

Upon any such redemption, payment of an instalment or purchase and
cancellation, as aforesaid, the nominal amount of the Notes represented by
this Global Note shall be reduced by the nominal amount of such Notes so
redeemed or purchased and cancelled or the amount of such instalment. The
nominal amount of the Notes represented by this Global Note following any such
redemption, payment of an instalment or purchase and cancellation as aforesaid
or any exchange as referred to below shall be the nominal amount most recently
entered by or on behalf of the Issuer in the relevant column in Part II, III
or IV of Schedule One or Schedule Two hereto.

Prior to the Exchange Date (as defined below), all payments (if any) on this
Global Note will only be made to the bearer hereof to the extent that there is
presented to the Agent by Clearstream, Luxembourg or Euroclear a certificate,
substantially in the form set out in Schedule Three hereto, to the effect that
it has received from or in respect of a person entitled to a particular
nominal amount of the Notes (as shown by its records) a certificate in or
substantially in the form of Certificate "A" as set out in Schedule Three
hereto. The bearer of this Global Note will not be entitled to receive any
payment of interest hereon due on or after the Exchange Date unless upon due
certification exchange of this Global Note is improperly withheld or refused.

On or after the date (the "Exchange Date") which is 40 days after the later of
the Issue Date and completion of the distribution of the Tranche of Notes
represented by this Global Note or such later date specified in the Pricing
Supplement, this Global Note may be exchanged in whole or in part (free of
charge) for, as specified in the Pricing Supplement, either security printed
Definitive Notes and (if applicable) Coupons, Receipts and Talons in the form
set out in Parts III, IV, V and VI respectively of Schedule 2 to the Agency
Agreement (on the basis that all the appropriate details have been included on
the face of such Definitive Notes and (if applicable) Coupons, Receipts and
Talons and the Pricing Supplement (or the relevant provisions of the Pricing
Supplement) have been either endorsed on or attached to such Definitive Notes)
or a Permanent Global Note in or substantially in the form set out in Part II
of Schedule 2 to the Agency Agreement (together with the Pricing Supplement
attached thereto) upon notice being given by Euroclear and/or Clearstream,
Luxembourg acting on the instructions of any holder of an interest in this
Global Note and subject, in the case of Definitive Notes, to such notice
period as is specified in the Pricing Supplement.

If Definitive Notes and (if applicable) Coupons, Receipts and/or Talons have
already been issued in exchange for all the Notes represented for the time
being by the Permanent Global Note, then this Global Note may only thereafter
be exchanged for Definitive Notes and (if applicable) Coupons, Receipts and/or
Talons pursuant to the terms hereof.

Presentation of this Global Note for exchange shall be made by the bearer
hereof on any day (other than a Saturday or Sunday) on which banks are open
for business in London at the office of the Agent specified above. The Issuer
shall procure that the Definitive Notes or (as the case may be) the Permanent
Global Note shall be so issued and delivered in exchange for only that portion
of this Global Note in respect of which there shall have been presented to the
Agent by Euroclear or Clearstream, Luxembourg a certificate, substantially in
the form set out in Schedule Three hereto, to the effect that it has received
from or in respect of a person entitled to a beneficial interest in a
particular nominal amount of the Notes (as shown by its records) a certificate
from such person in or substantially in the form of Certificate "A" as set out
in Schedule Three hereto.

<PAGE>

                                      64

On an exchange of the whole of this Global Note, this Global Note shall be
surrendered to the Agent. On an exchange of part only of this Global Note,
details of such exchange shall be entered by or on behalf of the Issuer in
Schedule Two hereto and the relevant space in Schedule Two hereto recording
such exchange shall be signed by or on behalf of the Issuer, whereupon the
nominal amount of this Global Note and the Notes represented by this Global
Note shall be reduced by the nominal amount so exchanged. On any exchange of
this Global Note for a Permanent Global Note, details of such exchange shall
be entered by or on behalf of the Issuer in Schedule Two to the Permanent
Global Note and the relevant space in Schedule Two thereto recording such
exchange shall be signed by or on behalf of the Issuer.

Until the exchange of the whole of this Global Note as aforesaid, the bearer
hereof shall in all respects (except as otherwise provided herein) be entitled
to the same benefits as if he were the bearer of Definitive Notes and the
relative Coupons, Receipts and/or Talons (if any) in the forms set out in
Parts III, Part IV, Part V and Part VI, respectively, of Schedule 2 to the
Agency Agreement.

In the event that this Global Note (or any part hereof) has become due and
repayable in accordance with the Conditions or that the Maturity Date has
occurred and, in either case, payment in full of the amount due has not been
made to the bearer in accordance with the foregoing then, unless within the
period of fifteen days commencing on the relevant due date payment in full of
the amount due in respect of this Global Note is received by the bearer in
accordance with the foregoing, this Global Note will become void at 8.00 p.m.
(London time) on such fifteenth day and the bearer will have no further rights
under this Global Note (but without prejudice to the rights which the bearer
or any other person may have under the amended and restated Deed of Covenant
executed, inter alia, by the Issuer on 30th March, 2001 in respect of the Euro
Medium Term Notes issued under the Program Agreement pursuant to which this
Global Note is issued).

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

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

This Global Note shall not be valid unless authenticated by the Agent.

IN WITNESS whereof the Issuer has caused this Global Note to be duly executed
on its behalf.

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

By: .............................
Authorised Signatory

Authenticated without recourse,
warranty or liability by

THE CHASE MANHATTAN BANK

By: ..........................
Authorised Signatory

<PAGE>

                                      65

                   Schedule One to the Temporary Global Note

                                    PART I

                               INTEREST PAYMENTS

            Total amount
 Date        of interest           Amount of        Confirmation of payment
 made         payable            interest paid      on behalf of the Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

                                      66

                                    PART II

                         PAYMENT OF INSTALMENT AMOUNTS

         Total amount                    Remaining nominal      Confirmation of
        of Installment    Amount of       amount of this           payment on
Date      Amounts        Instalment     Global Note following      behalf of
made      payable        Amounts paid     such payment*            the Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*    See most recent entry in Part II, III or IV of Schedule One or Schedule
     Two in order to determine this amount.

<PAGE>

                                      67

                                   PART III

                                  REDEMPTIONS

                                         Remaining nominal      Confirmation of
         Total amount     Amount of        amount of this        redemption on
Date      principal       principal      Global Note following     behalf of
made      payable           paid          such redemption*         the Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*    See most recent entry in Part II, III or IV of Schedule Two in order to
     determine this amount.

<PAGE>

                                      68

                                    PART IV

                          PURCHASES AND CANCELLATIONS

             Part of        Remaining nominal
          nominal amount      amount of this               Confirmation of
          of this Global         Global Note                 purchase and
Date      Note purchased    following such purchase     cancellation on behalf
made      and cancelled      and cancellation*             of the Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*    See most recent entry in Part II, III or IV of Schedule One or Schedule
     Two in order to determine this amount.

<PAGE>

                                      69

                   Schedule Two to the Temporary Global Note

                                   EXCHANGES
                 FOR DEFINITIVE NOTES OR PERMANENT GLOBAL NOTE

The following exchanges of a part of this Global Note for Definitive Notes or
a Permanent Global Note have been made:

         Nominal amount of this     Remaining nominal
         Global Note exchanged      amount of this Global    Notation made on
Date     for Definitive Notes or    Note following such       behalf of the
made     a Permanent Global Note    exchange*                    Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

________________________

*    See most recent entry in Part II, III or IV of Schedule One or Schedule
     Two in order to determine this amount.

<PAGE>

                                      70

                  Schedule Three to the Temporary Global Note

                    FORM OF CERTIFICATE TO BE PRESENTED BY
                     EUROCLEAR OR CLEARSTREAM, LUXEMBOURG

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

                             [Title of Securities]

                              (the "Securities")

This is to certify that, based solely on certifications we have received in
writing, by tested telex or by electronic transmission from member
organisations appearing in our records as persons being entitled to a
beneficial interest in a portion of the principal amount set forth below (our
"Member Organisations") substantially to the effect set forth in the Agency
Agreement, as of the date hereof, [ ] principal amount of the above-captioned
Securities (i) is owned by persons that are not citizens or residents of the
United States, domestic partnerships, domestic corporations or any estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source ("United States persons"), (ii) is owned by United
States persons that (a) are foreign branches of United States financial
institutions (as defined in U.S. Treasury Regulations Sections
1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own account
or for resale, or (b) acquired the Securities through foreign branches of
United States financial institutions and who hold the Securities through such
United States financial institutions on the date hereof (and in either case
(a) or (b), each such United States financial institution has agreed, on its
own behalf or through its agent, that we may advise the Issuer or the Issuer's
agent that it will comply with the requirements of Section 165(j)(3)(A), (B)
or (C) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) is owned by United States or foreign financial
institutions for purposes of resale during the restricted period (as defined
in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the
further effect that United States or foreign financial institutions described
in clause (iii) above (whether or not also described in clause (i) or (ii))
have certified that they have not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.

As used herein, "United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction; and its "possessions" include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.

If the Securities are of the category contemplated in Section 230.903(c)(3) of
Regulation S under the Securities Act of 1933, as amended (the "Act") then
this is also to certify with respect to such principal amount of Securities
set forth above that, except as set forth below, we have received in writing,
by tested telex or by electronic transmission, from our Member Organisations
entitled to a portion of such principal amount, certifications with respect to
such portion, substantially to the effect that the Securities are beneficially
owned by (a) non-U.S. person(s) or (b) U.S. person(s) who purchased the
Securities in transactions which did not require registration under the Act.

We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the temporary global Security excepted in

<PAGE>

                                      71

such certifications and (ii) that as of the date hereof we have not received
any notification from any of our Member Organisations to the effect that the
statements made by such Member Organisations with respect to any portion of
the part submitted herewith for exchange (or, if relevant, exercise of any
rights or collection of any interest) are no longer true and cannot be relied
upon as the date hereof.

We understand that this certification is required in connection with certain
tax laws and, if applicable, certain securities laws of the United States. In
connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or would be
relevant, we irrevocably authorise you to produce this certification to any
interested party in such proceedings.

Dated:  [                   ], 2[  ]*

                                        Yours faithfully,

                                        [Euroclear Bank S.A./N.V.
                                        as operator of the Euroclear
                                        System]

                                        or

                                        [Clearstream Banking, societe anonyme]

                                        By:

________________________________________________________________________

* To be dated no earlier than the Exchange Date

<PAGE>

                                      72

                                CERTIFICATE "A"

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

                             [Title of Securities]

                              (the "Securities")

This is to certify that as of the date hereof, and except as set forth below,
the above-captioned Securities held by you for our account (i) are owned by
person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that
(a) are foreign branches of United States financial institutions (as defined
in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial
institutions") purchasing for their own account or for resale, or (b) acquired
the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
United States financial institution hereby agrees, on its own behalf or
through its agent, that you may advise the Issuer or the Issuer's agent that
it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition
if the owner of the Securities is a United States or foreign financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)) this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.

If the Securities are of the category contemplated in Section 230.903(c)(3) of
Regulation S under the Securities Act of 1933, as amended (the "Act") then
this is also to certify with respect to such principal amount of Securities
set forth above that, except as set forth below, the Securities are
beneficially owned by (a) a non-U.S. person(s) or (b) a U.S. person(s) who
purchased the Securities in transactions which did not require registration
under the Act. As used in this paragraph, the term "U.S. person" has the
meaning given to it by Regulation S under the Act.

As used herein, "United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction; and its "possessions" include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.

We undertake to advise you promptly by tested telex on or prior to the date on
which you intend to submit your certification relating to the Securities held
by you for our account in accordance with your documented procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.

This certification excepts and does not relate to [ ] of such interest in the
above Securities in respect of which we are not able to certify and as to
which we understand exchange and delivery of definitive Securities (or, if
relevant, exercise of any right or collection of any interest) cannot be made
until we do so certify.

<PAGE>

                                      73

We understand that this certification is required in connection with certain
tax laws and, if applicable, certain securities laws of the United States. In
connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or would be
relevant, we irrevocably authorise you to produce this certification to any
interested party in such proceedings.

Dated: [          ], [  ]*

Name of Person Making Certification

By:

__________________________________________________________

* To be dated no earlier than the fifteenth day prior to the Exchange Date.

<PAGE>

                                      74

                                    PART II

                         FORM OF PERMANENT GLOBAL NOTE

THE GLOBAL NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO OR FOR THE
BENEFIT OF U.S. PERSONS OTHER THAN PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. TERMS USED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN REGULATION S
UNDER THE SECURITIES ACT.

[BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS
NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN
SECTION 6049(B)(4) OF THE INTERNAL REVENUE CODE OF THE UNITED STATES AND THE
REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED
STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SECTION 6049(B)(4)
OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).]1

[ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]2

[THIS NOTE CONSTITUTES [[COMMERCIAL PAPER]/[A SHORTER/LONGER] TERM DEBT
SECURITY]3 ISSUED IN ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE
BANKING ACT 1987. THE ISSUER OF THIS NOTE IS [CIBA SPECIALTY CHEMICALS
CORPORATION/CIBA SPECIALTY CHEMICALS PLC/CIBA SPEZIALITATENCHEMIE HOLDING
DEUTSCHLAND GMBH]4, WHICH IS NOT AN AUTHORISED INSTITUTION OR A EUROPEAN
AUTHORISED INSTITUTION (AS SUCH TERMS ARE DEFINED IN THE BANKING ACT 1987
(EXEMPT TRANSACTIONS) REGULATIONS 1997). REPAYMENT OF THE PRINCIPAL AND
PAYMENT OF ANY INTEREST OR PREMIUM IN CONNECTION WITH THIS NOTE HAS BEEN
GUARANTEED BY CIBA SPECIALTY CHEMICALS HOLDING INC. WHICH IS NEITHER AN
AUTHORISED INSTITUTION NOR A EUROPEAN AUTHORISED INSTITUTION]5.

                    [CIBA SPECIALTY CHEMICALS CORPORATION.]
   (a company incorporated under the laws of the State of Delaware, U.S.A.)/

__________________

1    This legend to appear on Notes issued by Ciba Specialty Chemicals
     Corporation with a maturity of 183 days or less.
2    This legend to appear on all Notes with a maturity of more than 183 days.
3    Include "commercial paper" if maturity of Notes is less than one year.
     Include "shorter" if maturity of Notes is one year or more, but less than
     3 years. Include "longer" if maturity of Notes is 3 years or more.
4    Delete as applicable.
5    Delete except where (a) the Notes are denominated in Sterling or (b) the
     net proceeds of the issue of the Notes are accepted in the United
     Kingdom.

<PAGE>

                                      75

                         CIBA SPECIALTY CHEMICALS PLC
          (a company incorporated with limited liability in England)/

               CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
          (a company incorporated with limited liability in Germany)]

                 unconditionally and irrevocably guaranteed by

                     CIBA SPECIALTY CHEMICALS HOLDING INC.
        (a company incorporated with limited liability in Switzerland)

                             PERMANENT GLOBAL NOTE

This Global Note is a Permanent Global Note in respect of a duly authorised
issue of Euro Medium Term Notes (the "Notes") of [Ciba Specialty Chemicals
Corporation/Ciba Specialty Chemicals PLC/Ciba Spezialitatenchemie Holding
Deutschland GmbH] (the "Issuer") described, and having the provisions
specified, in the Pricing Supplement or Pricing Supplements attached hereto
(together the "Pricing Supplement"). Payments in respect of the Notes have
been unconditionally and irrevocably guaranteed by Ciba Specialty Chemicals
Holding Inc. (the "Guarantor"). References herein to the Conditions shall be
to the Terms and Conditions of the Notes as set out in Schedule 1 to the
Agency Agreement (as defined below) as modified and supplemented by the
information set out in the Pricing Supplement, but in the event of any
conflict between the provisions of that Schedule and the information set out
in the Pricing Supplement, the Pricing Supplement will prevail.

Words and expressions defined or set out in the Conditions and/or the Pricing
Supplement shall bear the same meaning when used herein.

This Global Note is issued subject to, and with the benefit of, the Conditions
and an amended and restated Agency Agreement (the "Agency Agreement", which
expression shall be construed as a reference to that agreement as the same may
be amended, supplemented or restated from time to time) dated 30th March, 2001
and made between, inter alia, the Issuer, the Guarantor, The Chase Manhattan
Bank (the "Agent") and the other agents named therein.

For value received the Issuer, subject to and in accordance with the
Conditions, promises to pay to the bearer hereof on each Instalment Date (if
the Notes are repayable in instalments) and on the Maturity Date and/or on
such earlier date(s) as all or any of the Notes represented by this Global
Note may become due and repayable in accordance with the Conditions, the
amount payable under the Conditions in respect of such Notes on each such date
and to pay interest (if any) on the nominal amount of the Notes from time to
time represented by this Global Note calculated and payable as provided in the
Conditions together with any other sums payable under the Conditions, upon
presentation and, at maturity, surrender of this Global Note at the office of
the Agent at Trinity Tower, 9 Thomas More Street, London E1W 1YT or at the
specified office of any of the other paying agents located outside the United
States (except as provided in the Conditions) from time to time appointed by
the Issuer and the Guarantor in respect of the Notes. On any redemption or
payment of an instalment or interest being made in respect of, or purchase and
cancellation of, any of the Notes represented by this Global Note details of
such redemption, payment or purchase and cancellation (as the case may be)
shall be entered by or on behalf of the Issuer in Schedule One hereto and the
relevant space in Schedule One hereto recording any such redemption, payment
or purchase and cancellation (as the case may be) shall be signed by or on
behalf of the Issuer.

<PAGE>

                                      76

Upon any such redemption, payment of an instalment or purchase and
cancellation as aforesaid, the nominal amount of the Notes represented by this
Global Note shall be reduced by the nominal amount of such Notes so redeemed
or purchased and cancelled or the amount of such instalment. The nominal
amount of the Notes represented by this Global Note following any such
redemption, payment of an instalment or purchase and cancellation as
aforesaid, or any exchange as referred to below shall be the nominal amount
most recently entered by or on behalf of the Issuer in the relevant column in
Part II, III or IV of Schedule One or Schedule Two hereto.

On any exchange of the Temporary Global Note issued in respect of the Notes
for this Global Note or any part hereof, details of such exchange shall be
entered by or on behalf of the Issuer in Schedule Two hereto and the relevant
space in Schedule Two hereto recording such exchange shall be signed by or on
behalf of the Issuer, whereupon the nominal amount of the Notes represented by
this Global Note shall be increased by the nominal amount of the Temporary
Global Note so exchanged.

This Global Note may be exchanged in whole but not in part (free of charge),
for Definitive Notes and (if applicable) Coupons, Receipts and/or Talons in
the form set out in Part III, Part IV, Part V and Part VI respectively, of
Schedule 2 to the Agency Agreement (on the basis that all the appropriate
details have been included on the face of such Definitive Notes and (if
applicable) Coupons, Receipts and Talons and the Pricing Supplement (or the
relevant provisions of the Pricing Supplement) have been endorsed on or
attached to such Definitive Notes) either, as specified in the applicable
Pricing Supplement:

(i)  upon not less than 60 days' written notice being given to the Agent by
     Euroclear and/or Clearstream, Luxembourg acting on the instructions of
     any holder of an interest in this Global Note; or

(ii) only upon the occurrence of any Exchange Event.

     An "Exchange Event" means:

     (1)  an Event of Default has occurred and is continuing;

     (2)  the Issuer has been notified that either Euroclear or Clearstream,
          Luxembourg has been closed for business for a continuous period of
          14 days (other than by reason of holiday, statutory or otherwise) or
          has announced an intention permanently to cease business or has in
          fact done so and no alternative clearing system is available; or

     (3)  the Issuer has or will become obliged to pay additional amounts as
          provided for or referred to in Condition 7 which would not be
          required were the Notes represented by this Global Note in
          definitive form.

If this Global Note is only exchangeable following the occurrence of an
Exchange Event:

(i)  the Issuer will promptly give notice to Noteholders in accordance with
     Condition 14 upon the occurrence of an Exchange Event; and

(ii) in the event of the occurrence of any Exchange Event, Euroclear and/or
     Clearstream, Luxembourg acting on the instructions of any holder of an
     interest in this Global Note may give notice to the Agent requesting
     exchange and in the event of the occurrence of an Exchange Event as
     described in (3) above, the Issuer may also give notice to the Agent

<PAGE>

                                      77

     requesting exchange. Any such exchange shall occur no later than 15 days
     after the date of receipt of the relevant notice by the Agent.

The first notice requesting exchange in accordance with the above provisions
shall give rise to the issue of Definitive Notes for the total amount of Notes
represented by this Global Note.

Any such exchange as aforesaid will be made upon presentation of this Global
Note at the office of the Agent specified above by the bearer hereof on any
day (other than a Saturday or Sunday) on which banks are open for business in
London. The aggregate nominal amount of Definitive Notes issued upon an
exchange of this Global Note will be equal to the aggregate nominal amount of
this Global Note.

On an exchange of this Global Note, this Global Note shall be surrendered to
the Agent.

Until the exchange of this Global Note as aforesaid, the bearer hereof shall
in all respects (except as otherwise provided herein) be entitled to the same
benefits as if he were the bearer of Definitive Notes and the relative
Coupons, Receipts and/or Talons (if any) in the forms set out in Part III,
Part IV, Part V and Part VI, respectively, of Schedule 2 to the Agency
Agreement.

In the event that this Global Note (or any part hereof) has become due and
repayable in accordance with the Conditions or that the Maturity Date has
occurred and, in either case, payment in full of the amount due has not been
made to the bearer in accordance with the foregoing then, unless within the
period of fifteen days commencing on the relevant due date payment in full of
the amount due in respect of this Global Note is received by the bearer in
accordance with the foregoing, this Global Note will become void at 8.00 p.m.
(London time) on such fifteenth day and the bearer will have no further rights
under this Global Note (but without prejudice to the rights which the bearer
or any other person may have under the amended and restated Deed of Covenant
executed by the Issuer on 30th March, 2001 in respect of the Euro Medium Term
Notes issued under the Program Agreement pursuant to which this Global Note is
issued).

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

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

This Global Note shall not be valid unless authenticated by the Agent.

<PAGE>

                                      78

IN WITNESS whereof the Issuer has caused this Global Note to be duly executed
on its behalf.

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

By: .........................
   Authorised Signatory

Authenticated without recourse,
warranty or liability by

THE CHASE MANHATTAN BANK

By: ..........................
Authorised Signatory

<PAGE>

                                      79

                   Schedule One to the Permanent Global Note

                                    PART I

                               INTEREST PAYMENTS

            Total amount                                  Confirmation of
Date        of interest           Amount of               payment on behalf
made          payable            interest paid              of the Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

                                      80

                                   PART II

                        PAYMENT OF INSTALMENT AMOUNTS

         Total amount                    Remaining nominal      Confirmation of
        of Installment    Amount of       amount of this           payment on
Date      Amounts        Instalment     Global Note following      behalf of
made      payable        Amounts paid     such payment*            the Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*    See most recent entry in Part II, III or IV of Schedule One or Schedule
     Two in order to determine this amount.

<PAGE>

                                      81

                                   PART III

                                  REDEMPTIONS

                                         Remaining nominal      Confirmation of
         Total amount     Amount of        amount of this        redemption on
Date      principal       principal      Global Note following     behalf of
made      payable           paid          such redemption*         the Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*    See most recent entry in Part II, III or IV of Schedule Two in order to
     determine this amount.

<PAGE>

                                      82

                                    PART IV

                          PURCHASES AND CANCELLATIONS

             Part of        Remaining nominal
          nominal amount      amount of this               Confirmation of
          of this Global         Global Note                 purchase and
Date      Note purchased    following such purchase     cancellation on behalf
made      and cancelled      and cancellation*             of the Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*    See most recent entry in Part II, III or IV of Schedule One or Schedule
     Two in order to determine this amount.

<PAGE>

                                      83

                   Schedule Two to the Temporary Global Note

                                   EXCHANGES
                 FOR DEFINITIVE NOTES OR PERMANENT GLOBAL NOTE

The following exchanges of a part of this Global Note for Definitive Notes or
a Permanent Global Note have been made:

         Nominal amount of this     Remaining nominal
         Global Note exchanged      amount of this Global    Notation made on
Date     for Definitive Notes or    Note following such       behalf of the
made     a Permanent Global Note    exchange*                    Issuer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

________________________

*    See most recent entry in Part II, III or IV of Schedule One or in this
     Schedule Two in order to determine this amount.

<PAGE>

                                      84

                                   PART III

                            FORM OF DEFINITIVE NOTE

[Face of Note]
    _______________________________________________________________________

    00          000000             [ISIN]           00           000000
   ________________________________________________________________________

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO OR FOR THE BENEFIT
OF U.S. PERSONS OTHER THAN PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. TERMS
USED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.

[BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS
NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN
SECTION 6049(B)(4) OF THE INTERNAL REVENUE CODE OF THE UNITED STATES AND THE
REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED
STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SECTION 6049(B)(4)
OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).]1

[ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]2

[THIS NOTE CONSTITUTES [[COMMERCIAL PAPER]/[A SHORTER/LONGER] TERM DEBT
SECURITY]3 ISSUED IN ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE
BANKING ACT 1987. THE ISSUER OF THIS NOTE IS [CIBA SPECIALTY CHEMICALS
CORPORATION/CIBA SPECIALTY CHEMICALS PLC/CIBA SPEZIALITATENCHEMIE HOLDING
DEUTSCHLAND GMBH]4, WHICH IS NOT AN AUTHORISED INSTITUTION OR A EUROPEAN
AUTHORISED INSTITUTION (AS SUCH TERMS ARE DEFINED IN THE BANKING ACT 1987
(EXEMPT TRANSACTIONS) REGULATIONS 1997). REPAYMENT OF THE PRINCIPAL AND
PAYMENT OF ANY INTEREST OR PREMIUM IN CONNECTION WITH THIS NOTE HAS BEEN
GUARANTEED BY CIBA SPECIALTY CHEMICALS HOLDING INC. WHICH IS

__________________________

1    This legend to appear on Notes issued by Ciba Specialty Chemicals
     Corporation with a maturity of 183 days or less.

2    This legend to appear on all Notes with a maturity of more than 183 days.

3    Include "commercial paper" if maturity of Notes is less than one year.
     Include "shorter" if maturity of Notes is one year or more, but less than
     3 years. Include "longer" if maturity of Notes is 3 years or more.

4    Delete as applicable.

<PAGE>

                                      85

     NEITHER AN AUTHORISED INSTITUTION NOR A EUROPEAN AUTHORISED
     INSTITUTION]5.

                    [CIBA SPECIALTY CHEMICALS CORPORATION]
            (a company incorporated under the laws of the State of
                              Delaware, U.S.A.)/

                         CIBA SPECIALTY CHEMICALS PLC
          (a company incorporated with limited liability in England)/

               CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
          (a company incorporated with limited liability in Germany)]

                 unconditionally and irrevocably guaranteed by

                     CIBA SPECIALTY CHEMICALS HOLDING INC.
        (a company incorporated with limited liability in Switzerland)

              [Specified Currency and Nominal Amount of Tranche]
                 EURO MEDIUM TERM NOTES DUE [Year of Maturity]

This Note is one of a duly authorised issue of Euro Medium Term Notes
denominated in the Specified Currency maturing on the Maturity Date (the
"Notes") of [Ciba Specialty Chemicals Corporation/Ciba Specialty Chemicals
PLC/Ciba Spezialitatenchemie Holding Deutschland GmbH.] (the "Issuer").
Payments in respect of the Notes have been unconditionally and irrevocably
guaranteed by Ciba Specialty Chemicals Holding Inc. (the "Guarantor").
References herein to the Conditions shall be to the Terms and Conditions
[endorsed hereon/attached hereto/set out in Schedule 1 to the Agency Agreement
(as defined below) which shall be incorporated by reference herein and have
effect as if set out herein] as modified and supplemented by the Pricing
Supplement (the "Pricing Supplement") (or the relevant provisions of the
Pricing Supplement) endorsed hereon, but in the event of any conflict between
the provisions of the Conditions and the information in the Pricing
Supplement, the Pricing Supplement will prevail.

This Note is issued subject to, and with the benefit of, the Conditions and an
amended and restated Agency Agreement (the "Agency Agreement", which
expression shall be construed as a reference to that agreement as the same may
be amended, supplemented or restated from time to time) dated 30th March, 2001
and made between, inter alia, the Issuer, the Guarantor, The Chase Manhattan
Bank (the "Agent") and the other agents named therein.

For value received, the Issuer, subject to and in accordance with the
Conditions, promises to pay to the bearer hereof [on each Instalment Date and]
on the Maturity Date and/or on such earlier date(s) as this Note may become
due and repayable in accordance with the Conditions, the amount payable under
the Conditions in respect of this Note on each such date and to pay interest
(if any) on this Note calculated and payable as provided in the Conditions
together with any other sums payable under the Conditions.

 These Notes shall be governed by, and construed in accordance with, English
law.

____________________

5    Delete except where the Notes are denominated in Sterling or (b) the net
     proceeds of the issue of the Notes are accepted in the United Kingdom.

<PAGE>

                                      86

This Note shall not be validly issued unless authenticated by the Agent.

<PAGE>

                                       87

IN WITNESS whereof the Issuer has caused this Note to be duly executed on its
behalf.

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

By: _____________________
Authorised Signatory

Authenticated without recourse,
warranty or liability by

THE CHASE MANHATTAN BANK

By: _____________________
Authorised Signatory

<PAGE>

                                      88

                             Terms and Conditions

                   [Terms and Conditions to be as set out in
                      Schedule 1 to the Agency Agreement]

                              Pricing Supplement

                [Here to be set out text of Pricing Supplement
                            relating to the Notes]

<PAGE>

                                      89

                                    PART IV

                                FORM OF COUPON

(Face of Coupon)

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

                [Specified Currency and Nominal Amount Tranche]
                         NOTES DUE [Year of Maturity]

                                Series No. [ ]

Part A

[For Fixed Rate Notes:-

This Coupon is payable to bearer, separately              Coupon for
negotiable and subject to the Terms and                    [    ]
Conditions of the said Notes.                              due on
                                                           [    ]

Part B

[For Floating Rate Notes or Indexed Interest Notes:-

Coupon for the amount due in accordance with               Coupon due
the Terms and Conditions on the said Notes on              in [     ]
the Interest Payment Date falling in
[     ]].

This Coupon is payable to bearer, separately negotiable and subject to such
Terms and Conditions, under which it may become void before its due date.]

THE NOTE PERTAINING HERETO HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO OR FOR
THE BENEFIT OF U.S. PERSONS OTHER THAN PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. TERMS USED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN REGULATION S
UNDER THE SECURITIES ACT.

<PAGE>

                                      90

[BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS
NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN
SECTION 6049(B)(4) OF THE INTERNAL REVENUE CODE OF THE UNITED STATES AND THE
REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED
STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SECTION 6049(B)(4)
OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).]1

[ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS
165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]2
________________________________________________________________________

00      000000        [ISIN]    00         000000
________________________________________________________________________

____________________

1    This legend to appear on Coupons attaching to Notes issued by Ciba
     Specialty Chemicals Corporation with a maturity of 183 days or less.

2    This legend to appear on Coupons attaching to Notes issued by Ciba
     Specialty Chemicals Corporation with a maturity of 183 days or more and
     all other Coupons.

<PAGE>

                                      91

(Reverse of Coupon)

                                     AGENT

                           The Chase Manhattan Bank
                                 Trinity Tower
                             9 Thomas More Street
                                London E1W 1YT

                                 PAYING AGENT

                     Chase Manhattan Bank Luxembourg S.A.
                                 5 Rue Plaetis
                               L-2338 Luxembourg

and/or such other or further Agent and other or further Paying Agents and/or
specified offices as may from time to time be duly appointed by the Issuer and
the Guarantor and notice of which has been given to the Noteholders.

<PAGE>

                                      92

(On the front)

                                    PART V

                                FORM OF RECEIPT

THE NOTE PERTAINING HERETO HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO OR FOR
THE BENEFIT OF U.S. PERSONS OTHER THAN PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. TERMS USED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN REGULATION S
UNDER THE SECURITIES ACT.

[BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS
NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN
SECTION 6049(B)(4) OF THE INTERNAL REVENUE CODE OF THE UNITED STATES AND THE
REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED
STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SECTION 6049(B)(4)
OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).]1

[ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]2

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

              [Specified Currency and Nominal Amount of Tranche]
                 EURO MEDIUM TERM NOTES DUE [Year of Maturity]

                                Series No. [ ]

Receipt for the sum of [ ] being the instalment of principal payable in
accordance with the Terms and Conditions endorsed on the Note to which this
Receipt appertains (the "Conditions") on [ ].

This Receipt is issued subject to and in accordance with the Conditions which
shall be binding upon the holder of this Receipt (whether or not it is for the
time being attached to such Note) and is payable at the specified office of
the Agent or any of the Paying Agents set out on the reverse of the Note to
which this Receipt appertains (and/or any other or further Paying Agents
and/or specified offices as may from time to time be duly appointed and
notified to the Noteholders).

__________________

1    This legend to appear on Receipts pertaining to Notes issued by Ciba
     Specialty Chemicals Corporation with a maturity of 183 days or less.

2    This legend to appear on Receipts pertaining to Notes issued by Ciba
     Specialty Chemicals Corporation with a maturity of 183 days or more and
     on all other Receipts.

<PAGE>

                                      93

This Receipt must be presented for payment together with the Note to which it
appertains. The Issuer shall have no obligation in respect of any Receipt
presented without the Note to which it appertains or any unmatured Receipts.

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

By:___________________

Authorised Signatory

<PAGE>

                                      94

                                    PART VI

                                 FORM OF TALON

THE NOTE PERTAINING HERETO HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO OR FOR
THE BENEFIT OF U.S. PERSONS OTHER THAN PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. TERMS USED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN REGULATION S
UNDER THE SECURITIES ACT.

[BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS
NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN
SECTION 6049(B)(4) OF THE INTERNAL REVENUE CODE OF THE UNITED STATES AND THE
REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED
STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SECTION 6049(B)(4)
OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).]1

[ANY UNITED STATES PERSON (AS DEFINED IN THE INTERNAL REVENUE CODE OF THE
UNITED STATES) WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER
THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS PROVIDED IN
SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]2

(On the front)

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

              [Specified Currency and Nominal Amount of Tranche]
                 EURO MEDIUM TERM NOTES DUE [Year of Maturity]

                                Series No. [ ]

On and after [ ] further Coupons [and a further Talon] appertaining to the
Note to which this Talon appertains will be issued at the specified office of
the Agent or any of the Paying Agents set out on the reverse hereof (and/or
any other or further Paying Agents and/or specified offices as may from time
to time be duly appointed and notified to the Noteholders) upon production and
surrender of this Talon.

__________________________

1    This legend to appear on Talons pertaining to Notes issued by Ciba
     Specialty Chemicals Corporation with a maturity of 183 days or less.

2    This legend to appear on Talons pertaining to Notes issued by Ciba
     Specialty Chemicals Corporation with a maturity of 183 days and on all
     other Talons.

<PAGE>

                                      95

This Talon may, in certain circumstances, become void under the Terms and
Conditions endorsed on the Notes to which this Talon appertains.

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

By: _______________________

Authorised Signatory

<PAGE>

                                      96

(Reverse of Receipt and Talon)

                                     AGENT

                           The Chase Manhattan Bank
                                 Trinity Tower
                             9 Thomas More Street
                                London E1W 1YT

                                 PAYING AGENT

                     Chase Manhattan Bank Luxembourg S.A.
                                 5 Rue Plaetis
                               L-2338 Luxembourg

and/or such other or further Agent and other or further Paying Agents and/or
specified offices as may from time to time be duly appointed by the Issuer and
the Guarantor and notice of which has been given to the Noteholders.

<PAGE>

                                      97

                                  SCHEDULE 3

                           FORM OF DEED OF GUARANTEE

THIS DEED OF GUARANTEE is made on 30th March, 2001 by CIBA SPECIALTY CHEMICALS
HOLDING INC., (the "Guarantor") in favour of the Relevant Account Holders (as
defined in the Deed of Covenant referred to below) and the holders for the
time being of the Notes (as defined below) and the interest coupons (if any)
appertaining to the Notes ("Coupons"), the Coupons being attached on issue to
Definitive Note(s) (as defined below). Each Relevant Account Holder, each
holder of a Note and each holder of a Coupon is a "Holder".

WHEREAS:

(A)  CIBA SPECIALTY CHEMICALS CORPORATION, CIBA SPECIALTY CHEMICALS PLC, CIBA
     SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH (the "Issuers" and each an
     "Issuer") and the Guarantor have entered into an amended and restated
     Program Agreement (the "Program Agreement", which expression includes the
     same as it may be amended or supplemented from time to time) dated 30th
     March, 2001 with the Dealers named therein, which amends and restates the
     amended and restated program agreement entered into by, inter alia, Ciba
     Specialty Chemicals Corporation, Ciba Specialty Chemicals PLC and Ciba
     Spezialitatenchemie Holding Deutschland GmbH dated 16th June, 2000 (the
     "Principal Program Agreement"), under which each Issuer proposes from
     time to time to issue Euro Medium Term Notes (the "Notes", such
     expression to include each Definitive Note issued by an Issuer and each
     Global Note issued by an Issuer (where "Definitive Note" and "Global
     Note" have the meanings ascribed thereto in the Agency Agreement defined
     below) and to include any receipts issued in respect of Notes repayable
     in instalments);

(B)  each Issuer has executed a Deed of Covenant of even date (the "Deed of
     Covenant") relating to Global Notes issued by that Issuer pursuant to the
     Program Agreement;

(C)  the Issuers and the Guarantor have entered into an amended and restated
     agency agreement (the "Agency Agreement", which expression includes the
     same as it may be amended or supplemented from time to time) dated 30th
     March, 2001 with the Paying Agents named therein; and

(D)  this Deed of Guarantee amends and restates the amended and restated Deed
     of Guarantee made by the Guarantor dated 16th June, 2000, and does not
     affect any Notes issued pursuant to the Principal Program Agreement prior
     to the date hereof.

         NOW THIS DEED WITNESSES as follows:

1.   Guarantee: The Guarantor irrevocably and unconditionally undertakes to
     secure by way of deed poll to each Holder the due and punctual payment as
     stipulated in an Issuer's Note or Coupon or under its Deed of Covenant,
     as the case may be. The Guarantor therefore undertakes to pay on first
     demand of such a Holder, irrespective of the validity and the legal
     effects of the above mentioned relationship in respect of a Note or
     Coupon or Deed of Covenant and waiving all rights of objection and
     defence arising therefrom any amount not paid by the relevant Issuer
     (including any premium or any other amounts of whatever nature or
     additional amounts) upon receipt of the written request for payment by
     such Holder and the confirmation in writing by the Agent that the
     relevant Issuer has not made such payments

<PAGE>

                                      98

     on the dates specified and in the amount called under the Guarantee. The
     Guarantor hereby expressly undertakes and secures that payments under
     this Guarantee will not be less than as stipulated in an Issuer's Note or
     Coupon. In implementation of this undertaking and in case Swiss
     withholding taxes are imposed in respect of payments made under this
     Guarantee, the Guarantor undertakes, as a separate and independent
     obligation, to pay an increased amount on the relevant Note or Coupon so
     that the payment received by the Noteholder or Couponholder shall equal
     the amount actually stipulated in such Note or Coupon (assuming no such
     withholding applies).

2.   Guarantor's Obligations Continuing: The Guarantor's obligations under
     this Guarantee are and will remain in full force and effect by way of
     continuing security until no sum remains payable under any Note, any
     Coupon or the Deed of Covenant. Furthermore, these obligations of the
     Guarantor are additional to, and not instead of, any security or other
     guarantee or indemnity at any time existing in favour of a Holder,
     whether from the Guarantor or otherwise. The Guarantor irrevocably waives
     all notices and demands whatsoever, except as provided herein.

3.   Repayment to the Issuer: If any payment received by a Holder is, on the
     subsequent liquidation or insolvency of the relevant Issuer, avoided
     under any laws relating to liquidation or insolvency, such payment will
     not be considered as having discharged or diminished the liability of the
     Guarantor and this Guarantee will continue to apply as if such payment
     had at all times remained owing by the relevant Issuer.

4.   Status of Guarantee: The payment obligations of the Guarantor under this
     Guarantee constitute direct, unconditional and (subject to clause 5
     below) unsecured obligations of the Guarantor and (subject as aforesaid)
     rank and will rank pari passu with all other outstanding unsecured and
     unsubordinated indebtedness and monetary obligations of the Guarantor,
     present or future, including those in respect of deposits (other than
     obligations preferred by law).

5.   Negative Pledge of the Guarantor: So long as any of the Notes remains
     outstanding, but not later than the time when payment for the full amount
     of principal and interest in respect of all outstanding Notes has been
     duly provided for, the Guarantor will procure that no Indebtedness of the
     Guarantor which is represented by bonds, notes or other securities which
     in any such case are listed or capable of being listed on any recognised
     Stock Exchange will be secured upon any of the present or future assets
     or revenues of the Guarantor unless all amounts payable under this
     Guarantee are secured equally and rateably with such other security or
     such other security or guarantee is granted to the Notes and Coupons as
     shall have been approved by an Extraordinary Resolution of the
     Noteholders. Any reference to an obligation being guaranteed shall
     include a reference to an indemnity being given in respect of payment
     thereof.

     As used herein "Indebtedness" means all indebtedness for money borrowed
     that is created, assumed, incurred or guaranteed in any manner by the
     Guarantor or for which the Guarantor is otherwise responsible or liable.

6.   Tax Gross-up: All payments in respect of the Notes by the Guarantor shall
     be made without withholding or deduction for, or on account of, any
     present or future taxes, duties, assessments or governmental charges of
     whatever nature ("Taxes") imposed or levied by or on behalf of
     Switzerland, or any political sub-division of, or any authority in, or
     of, Switzerland having power to tax, unless the withholding or deduction
     of the Taxes is

<PAGE>

                                      99

     required by law. In that event, the Guarantor will pay such additional
     amounts as may be necessary in order that the net amounts received by the
     Noteholders and Couponholders after the withholding or deduction shall
     equal the respective amounts which would have been receivable in respect
     of the Notes or, as the case may be, Coupons in the absence of the
     withholding or deduction; except that no additional amount shall be
     payable in relation to any payment in respect of any Note or Coupon:

     (i)  by or on behalf of a person liable to such tax, duty or charge in
          respect of such Note, Receipt or Coupon by reason of his having some
          connection with Switzerland other than the mere holding or ownership
          of such Note, Receipt or Coupon; and/or

     (ii) presented for payment to the relevant Issuer more than 30 days after
          the Relevant Date (as defined in Condition 7(f) of the Terms and
          Conditions of the relevant Notes) except to the extent that a holder
          would have been entitled to additional amounts on presenting the
          same for payment on the last day of the period of 30 days; and/or

     (iii) to, or to a third party on behalf of, a holder who would be able to
          avoid such withholding or deduction by making a declaration of
          non-residence or similar claim for exemption but fails to do so;
          and/or

     (iv) where such withholding or deduction is imposed on a payment to an
          individual and is required to be made pursuant to any European Union
          Directive on the taxation of savings implementing the conclusions of
          the ECOFIN Council meeting of November 26-27, 2000, or any law
          implementing or complying with, or introduced in order to conform
          to, such Directive; and/or

     (v)  presented for payment by or on behalf of a holder who would have
          been able to avoid such withholding or deduction by presenting the
          relevant Note or Coupon to another Paying Agent in a Member State of
          the EU.

7.   Power to execute: The Guarantor hereby warrants, represents and covenants
     with each Holder that it has all corporate power, and has taken all
     necessary corporate or other steps, to enable it to execute, deliver and
     perform this Guarantee, and that this Guarantee constitutes a legal,
     valid and binding obligation of the Guarantor, enforceable in accordance
     with its terms subject to applicable bankruptcy, reorganisation,
     insolvency, fraudulent transfer, moratorium and other similar laws
     affecting creditor's rights generally from time to time in effect, and to
     general principles of equity, regardless of whether considered in a
     proceeding in law or at equity.

8.   Deposit of Guarantee: This Guarantee shall take effect as a Deed Poll for
     the benefit of the Holders from time to time and for the time being. This
     Guarantee shall be deposited with and held by The Chase Manhattan Bank
     for the benefit of the Holders until all the obligations of the Guarantor
     hereunder have been discharged in full.

9.   Production of Guarantee: The Guarantor hereby acknowledges the right of
     every Holder to the production of, and the right of every Holder to
     obtain (upon payment of a reasonable charge) a copy of, this Guarantee,
     and further acknowledges and covenants that the obligations binding upon
     it contained herein are owed to, and shall be for the account of, each
     and every Holder, and that each Holder shall be entitled severally to
     enforce the said obligations against the Guarantor.

<PAGE>

                                     100

10.  Subrogation: Until all amounts which may be payable under the Notes, the
     Coupons and/or the Deed of Covenant have been irrevocably paid in full,
     the Guarantor shall not exercise any rights of subrogation in respect of
     any rights of any Holder or claim in competition with the Holders against
     the relevant Issuer.

11.  Governing Law and Jurisdiction: This Guarantee is governed by and shall
     be construed in accordance with English law. The Guarantor irrevocably
     agrees for the benefit of each Holder that the courts of England are to
     have jurisdiction to settle any disputes which may arise out of or in
     connection with this Guarantee and that accordingly any suit, action or
     proceedings arising out of or in connection with this Guarantee (together
     referred to as "Proceedings") may be brought in the courts of England.

     The Guarantor irrevocably waives any objection which it may have now or
     hereafter to the laying of the venue of the Proceedings in the courts of
     England and irrevocably agrees that a final judgment in any Proceedings
     brought in the courts of England shall be conclusive and binding upon the
     Guarantor and may be enforced in the courts of any other jurisdiction.
     Nothing contained in this clause shall limit any right to take
     Proceedings against the Guarantor in any other court of competent
     jurisdiction, nor shall the taking of Proceedings in none or more
     jurisdictions preclude the taking of Proceedings in any other
     jurisdiction, whether concurrently or not.

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

     The Guarantor hereby appoints Ciba Specialty Chemicals PLC as its agent
     for service of process in England in respect of any Proceedings and
     undertakes that in the event of it ceasing so to act it will appoint
     another person as its agent for that purpose.

IN WITNESS whereof this Guarantee has been manually executed as a deed poll on
behalf of the Guarantor.

Executed as a deed              )
by CIBA SPECIALTY CHEMICALS     )
HOLDING INC.                    )
acting by its attorneys         )

and in the presence of:         )

Witness's
Signature:         ----------------------

Name:              ----------------------

Address:           ----------------------

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

Dated 30th March, 2001

<PAGE>

                                     101

                                  SCHEDULE 4

                    PROVISIONS FOR MEETINGS OF NOTEHOLDERS

1.   As used in this Schedule the following expressions shall have the
     following meanings unless the context otherwise requires:

     (i)  "voting certificate" shall mean an English language certificate
          issued by a Paying Agent and dated in which it is stated:

          (a)  that on the date thereof Notes (not being Notes in respect of
               which a block voting instruction has been issued and is
               outstanding in respect of the meeting specified in such voting
               certificate and any adjourned such meeting) bearing specified
               serial numbers were deposited with such Paying Agent or (to the
               satisfaction of such Paying Agent) were held to its order or
               under its control and that no such Notes will cease to be so
               deposited or held until the first to occur of:

               (1)  the conclusion of the meeting specified in such
                    certificate or, if applicable, any adjourned such meeting;
                    and

               (2)  the surrender of the certificate to the Paying Agent who
                    issued the same; and

          (b)  that the bearer thereof is entitled to attend and vote at such
               meeting and any adjourned such meeting in respect of the Notes
               represented by such certificate;

     (ii) "block voting instruction" shall mean an English language document
          issued by a Paying Agent and dated in which:

          (a)  it is certified that Notes (not being Notes in respect of which
               a voting certificate has been issued and is outstanding in
               respect of the meeting specified in such block voting
               instruction and any adjourned such meeting) have been deposited
               with such Paying Agent or (to the satisfaction of such Paying
               Agent) were held to its order or under its control and that no
               such Notes will cease to be so deposited or held until the
               first to occur of:

               (1)  the conclusion of the meeting specified in such document
                    or, if applicable, any adjourned such meeting; and

               (2)  the surrender to the Paying Agent not less than 48 hours
                    before the time for which such meeting or any adjourned
                    such meeting is convened of the receipt issued by such
                    Paying Agent in respect of each such deposited Note which
                    is to be released or (as the case may require) the Note or
                    Notes ceasing with the agreement of the Paying Agent to be
                    held to its order or under its control and the giving of
                    notice by the Paying Agent to the Issuer in accordance
                    with paragraph 17 hereof of the necessary amendment to the
                    block voting instruction;

<PAGE>

                                     102

          (b)  it is certified that each holder of such Notes has instructed
               such Paying Agent that the vote(s) attributable to the Note or
               Notes so deposited or held should be cast in a particular way
               in relation to the resolution or resolutions to be put to such
               meeting or any adjourned such meeting and that all such
               instructions are during the period commencing 48 hours prior to
               the time for which such meeting or any adjourned such meeting
               is convened and ending at the conclusion or adjournment thereof
               neither revocable nor capable of amendment;

          (c)  the total number and the serial numbers of the Notes so
               deposited or held are listed distinguishing with regard to each
               such resolution between those in respect of which instructions
               have been given as aforesaid that the votes attributable
               thereto should be cast in favour of the resolution and those in
               respect of which instructions have been so given that the votes
               attributable thereto should be cast against the resolution; and

          (d)  one or more persons named in such document (each hereinafter
               called a "proxy") is or are authorised and instructed by such
               Paying Agent to cast the votes attributable to the Notes so
               listed in accordance with the instructions referred to in
               paragraph (c) above as set out in such document.

          The holder of any voting certificate or the proxies named in any
          block voting instruction shall for all purposes in connection with
          the relevant meeting or adjourned meeting of Noteholders be deemed
          to be the holder of the Notes to which such voting certificate or
          block voting instruction relates and the Paying Agent with which
          such Notes have been deposited or the person holding the same to the
          order or under the control of such Paying Agent shall be deemed for
          such purposes not to be the holder of those Notes.

     (iii) References herein to the "Notes" are to the Notes in respect of
          which the relevant meeting is convened.

2.   The relevant Issuer or the Guarantor may at any time and, upon a
     requisition in writing of Noteholders holding not less than five per
     cent. in nominal amount of the Notes for the time being outstanding,
     shall convene a meeting of the Noteholders and if the relevant Issuer
     makes default for a period of seven days in convening such a meeting the
     same may be convened by the requisitionists. Whenever the relevant Issuer
     or the Guarantor is about to convene any such meeting it shall forthwith
     give notice in writing to the Agent and the Dealers of the day, time and
     place thereof and of the nature of the business to be transacted thereat.
     Every such meeting shall be held at such time and place as the Agent may
     approve.

3.   At least 21 days' notice (exclusive of the day on which the notice is
     given and the day on which the meeting is held) specifying the place, day
     and hour of meeting shall be given to the Noteholders prior to any
     meeting of the Noteholders in the manner provided by Condition 14. Such
     notice shall state generally the nature of the business to be transacted
     at the meeting thereby convened but (except for an Extraordinary
     Resolution) it shall not be necessary to specify in such notice the terms
     of any resolution to be proposed. Such notice shall include a statement
     to the effect that Notes may be deposited with Paying Agents for the
     purpose of obtaining voting certificates or appointing proxies not less
     than 24 hours before the time fixed for the meeting or that, in the case
     of corporations, they may appoint representatives by resolution of their
     directors or other governing body. A copy of the notice

<PAGE>

                                     103

     shall be sent by post to the Issuer (unless the meeting is convened by
     the relevant Issuer) and to the Guarantor (unless the meeting is convened
     by the Guarantor).

4.   Some person (who may but need not be a Noteholder) nominated in writing
     by the relevant Issuer shall be entitled to take the chair at every such
     meeting but if no such nomination is made or if at any meeting the person
     nominated shall not be present within fifteen minutes after the time
     appointed for holding the meeting the Noteholders present shall choose
     one of their number to be Chairman.

5.   At any such meeting one or more persons present holding Notes or voting
     certificates or being proxies and holding or representing in the
     aggregate not less than twenty per cent. in nominal amount of the Notes
     for the time being outstanding shall (except for the purpose of passing
     an Extraordinary Resolution (as defined in paragraph 20 below)) form a
     quorum for the transaction of business and no business (other than the
     choosing of a Chairman) shall be transacted at any meeting unless the
     requisite quorum be present at the commencement of business. The quorum
     at any such meeting for passing an Extraordinary Resolution shall
     (subject as provided below) be one or more persons present holding Notes
     or voting certificates or being proxies and holding or representing in
     the aggregate not less than 50 per cent. in nominal amount of the Notes
     for the time being outstanding PROVIDED THAT at any meeting the business
     of which includes any of the following matters (each of which shall only
     be capable of being effected after having been approved by Extraordinary
     Resolution) namely:

     (i)  modification of the Maturity Date of the Notes or reduction or
          cancellation of the nominal amount payable upon maturity; or

     (ii) reduction or cancellation of the amount payable or modification of
          the payment date in respect of any interest in respect of the Notes
          or variation of the method of calculating the rate of interest in
          respect of the Notes; or

     (iii) reduction of any Minimum Interest Rate and/or Maximum Interest Rate
          specified in the applicable Pricing Supplement of any Note; or

     (iv) modification of the currency in which payments under the Notes
          and/or the Receipts and/or Coupons appertaining thereto are to be
          made; or

     (v)  modification of the majority required to pass an Extraordinary
          Resolution; or

     (vi) the sanctioning of any such scheme or proposal as is described in
          paragraph 18(F) below; or

     (vii) alteration of this proviso or the proviso to paragraph 6 below;

     the quorum shall be one or more persons present holding Notes or voting
     certificates or being proxies and holding or representing in the
     aggregate not less than 75 per cent. in nominal amount of the Notes for
     the time being outstanding. An Extraordinary Resolution passed at any
     meeting of the holders of Notes will be binding on all holders of Notes,
     whether or not they are present at the meeting, and on all holders of
     Coupons appertaining to such Notes.

6. If within fifteen minutes after the time appointed for any such meeting a
quorum is not present the meeting shall if convened upon the requisition of
Noteholders be dissolved. In

<PAGE>

                                     104

any other case it shall stand adjourned to the same day in the next week (or
if such day is a public holiday the next succeeding business day) at the same
time and place (except in the case of a meeting at which an Extraordinary
Resolution is to be proposed in which case it shall stand adjourned for such
period being not less than 14 days nor more than 42 days, and at such place as
may be appointed by the Chairman and approved by the Agent) and at such
adjourned meeting one or more persons present holding Notes or voting
certificates or being proxies (whatever the nominal amount of the Notes so
held or represented by them) shall (subject as provided below) form a quorum
and shall (subject as provided below) have power to pass any Extraordinary
Resolution or other resolution and to decide upon all matters which could
properly have been dealt with at the meeting from which the adjournment took
place had the requisite quorum been present PROVIDED THAT at any adjourned
meeting the business of which includes any of the matters specified in the
proviso to paragraph 5 above the quorum shall be one or more persons present
holding Notes or voting certificates or being proxies and holding or
representing in the aggregate not less than a clear majority in nominal amount
of the Notes for the time being outstanding.

7.   Notice of any adjourned meeting at which an Extraordinary Resolution is
     to be submitted shall be given in the same manner as notice of an
     original meeting but as if 10 were substituted for 21 in paragraph 3
     above and such notice shall (except in cases where the proviso to
     paragraph 6 above shall apply when it shall state the relevant quorum)
     state that one or more persons present holding Notes or voting
     certificates or being proxies at the adjourned meeting whatever the
     nominal amount of the Notes held or represented by them will form a
     quorum. Subject as aforesaid it shall not be necessary to give any notice
     of an adjourned meeting.

8.   Every question submitted to a meeting shall be decided in the first
     instance by a show of hands and in case of equality of votes the Chairman
     shall both on a show of hands and on a poll have a casting vote in
     addition to the vote or votes (if any) to which he may be entitled as a
     Noteholder or as a holder of a voting certificate or as a proxy.

9.   At any meeting, unless a poll is (before or on the declaration of the
     result of the show of hands) demanded by the Chairman or the relevant
     Issuer or by one or more persons present holding Notes or voting
     certificates or being proxies (whatever the nominal amount of the Notes
     so held by them), a declaration by the Chairman that a resolution has
     been carried or carried by a particular majority or lost or not carried
     by a particular majority shall be conclusive evidence of the fact without
     proof of the number or proportion of the votes recorded in favour of or
     against such resolution.

10.  Subject to paragraph 12 below, if at any such meeting a poll is so
     demanded it shall be taken in such manner and subject as hereinafter
     provided either at once or after an adjournment as the Chairman directs
     and the result of such poll shall be deemed to be the resolution of the
     meeting at which the poll was demanded as at the date of the taking of
     the poll. The demand for a poll shall not prevent the continuance of the
     meeting for the transaction of any business other than the motion on
     which the poll has been demanded.

11.  The Chairman may with the consent of (and shall if directed by) any such
     meeting adjourn the same from time to time and from place to place but no
     business shall be transacted at any adjourned meeting except business
     which might lawfully (but for lack of required quorum) have been
     transacted at the meeting from which the adjournment took place.

<PAGE>

                                     105

12.  Any poll demanded at any such meeting on the election of a Chairman or on
     any question of adjournment shall be taken at the meeting without
     adjournment.

13.  Any director or officer of the Issuer or the Guarantor and their
     respective lawyers may attend and speak at any meeting. Save as
     aforesaid, but without prejudice to the proviso to the definition of
     "outstanding" in clause 1(2) of this Agreement, no person shall be
     entitled to attend and speak nor shall any person be entitled to vote at
     any meeting of the Noteholders or join with others in requisitioning the
     convening of such a meeting unless he either produces the Note or Notes
     of which he is the holder or a voting certificate or is a proxy. None of
     the Issuers, the Guarantor nor any of their respective subsidiaries shall
     be entitled to vote at any meeting in respect of Notes held by it for the
     benefit of any such company and no other person shall be entitled to vote
     at any meeting in respect of Notes held by it for the benefit of any such
     company. Nothing herein contained shall prevent any of the proxies named
     in any block voting instruction from being a director, officer or
     representative of or otherwise connected with the Issuer or the
     Guarantor.

14.  Subject as provided in paragraph 13 hereof at any meeting:

     (A)  on a show of hands every person who is present in person and
          produces a Note or voting certificate or is a proxy shall have one
          vote; and

     (B)  on a poll every person who is so present shall have one vote in
          respect of:

          (i)  in the case of a meeting of the holders of Notes all of which
               are denominated in a single currency, each minimum integral
               amount of such currency; and

          (ii) in the case of a meeting of the holders of Notes denominated in
               more than one currency, each U.S.$1.00 or, in the case of a
               Note denominated in a currency other than U.S. dollars, the
               equivalent of U.S.$1.00 in such currency at the Agent's spot
               buying rate for the relevant currency against U.S. dollars at
               or about 11.00 a.m. (London time) on the date of publication of
               the notice of the relevant meeting (or of the original meeting
               of which such meeting is an adjournment),

          or such other amount as the Agent shall in its absolute discretion
          stipulate in nominal amount of Notes so produced or represented by
          the voting certificate so produced or in respect of which he is a
          proxy.

     Without prejudice to the obligations of the proxies named in any block
     voting instruction any person entitled to more than one vote need not use
     all his votes or cast all the votes to which he is entitled in the same
     way.

15.  The proxies named in any block voting instruction need not be
     Noteholders.

16.  Each block voting instruction together (if so requested by the relevant
     Issuer) with proof satisfactory to the relevant Issuer of its due
     execution on behalf of the relevant Paying Agent shall be deposited at
     such place as the Agent shall approve not less than 24 hours before the
     time appointed for holding the meeting or adjourned meeting at which the
     proxies named in the block voting instruction propose to vote and in
     default the block voting instruction shall not be treated as valid unless
     the Chairman of the meeting decides otherwise before such meeting or
     adjourned meeting proceeds to business. A certified copy of each block

<PAGE>

                                     106

     voting instruction shall be deposited with the Agent before the
     commencement of the meeting or adjourned meeting but the Agent shall not
     thereby be obliged to investigate or be concerned with the validity of or
     the authority of the proxies named in any such block voting instruction.

17.  Any vote given in accordance with the terms of a block voting instruction
     shall be valid notwithstanding the previous revocation or amendment of
     the block voting instruction or of any of the Noteholders' instructions
     pursuant to which it was executed PROVIDED THAT no intimation in writing
     of such revocation or amendment shall have been received from the
     relevant Paying Agent by the relevant Issuer at its registered office (or
     such other place as may have been approved by the Agent for the purpose)
     by the time being 24 hours before the time appointed for holding the
     meeting or adjourned meeting at which the block voting instruction is to
     be used.

18.  A meeting of the Noteholders shall in addition to the powers hereinbefore
     given have the following powers exercisable by Extraordinary Resolution
     (subject to the provisions relating to quorum contained in paragraphs 5
     and 6 above) only, namely:

     (A)  power to sanction any compromise or arrangement proposed to be made
          between the Issuer and the Guarantor and the Noteholders and
          Couponholders or any of them;

     (B)  power to sanction any abrogation, modification, compromise or
          arrangement in respect of the rights of the Noteholders and
          Couponholders against the relevant Issuer and the Guarantor or
          against any of its property whether such rights shall arise under
          this Agreement, the Notes or the Coupons or otherwise;

     (C)  power to assent to any modification of the provisions contained in
          this Agreement or the Conditions, the Notes, the Coupons, the
          Guarantee or the Deed of Covenant which shall be proposed by the
          Issuer or the Guarantor;

     (D)  power to give any authority or sanction which under the provisions
          of this Agreement or the Notes is required to be given by
          Extraordinary Resolution;

     (E)  power to appoint any persons (whether Noteholders or not) as a
          committee or committees to represent the interests of the
          Noteholders and to confer upon such committee or committees any
          powers or discretions which the Noteholders could themselves
          exercise by Extraordinary Resolution;

     (F)  power to sanction any scheme or proposal for the exchange or sale of
          the Notes for, or the conversion of the Notes into or the
          cancellation of the Notes in consideration of, shares, stock, notes,
          bonds, debentures, debenture stock and/or other obligations and/or
          securities of the Issuer or any other company formed or to be
          formed, or for or into or in consideration of cash, or partly for or
          into or in consideration of such shares, stock, notes, bonds,
          debentures, debenture stock and/or other obligations and/or
          securities as aforesaid and partly for or into or in consideration
          of cash; and

     (G)  power to approve the substitution of any entity in place of (i) the
          Issuer (or any previous substitute) as the principal debtor in
          respect of the Notes and the Coupons or (ii) the Guarantor (or any
          previous substitute) as guarantor under the Guarantee.

<PAGE>

                                     107

19.  Any resolution passed at a meeting of the Noteholders duly convened and
     held in accordance with the provision hereof shall be binding upon all
     the Noteholders whether present or not present at such meeting and
     whether or not voting and upon all Couponholders and Receiptholders and
     each of them shall be bound to give effect thereto accordingly and the
     passing of any such resolution shall be conclusive evidence that the
     circumstances justify the passing thereof. Notice of the result of the
     voting on any resolution duly considered by the Noteholders shall be
     published in accordance with Condition 14 by the relevant Issuer within
     14 days of such result being known PROVIDED THAT the non-publication of
     such notice shall not invalidate such resolution.

20.  The expression "Extraordinary Resolution" when used in this Agreement or
     the Conditions means a resolution passed at a meeting of the Noteholders
     duly convened and held in accordance with the provisions herein contained
     by a majority consisting of not less than 75 per cent. of the persons
     voting thereat upon a show of hands or if a poll be duly demanded then by
     a majority consisting of not less than 75 per cent. of the votes given on
     such poll.

21.  Minutes of all resolutions and proceedings at every such meeting as
     aforesaid shall be made and duly entered in books to be from time to time
     provided for that purpose by the relevant Issuer and any such Minutes as
     aforesaid if purporting to be signed by the Chairman of the meeting at
     which such resolutions were passed or proceedings had shall be conclusive
     evidence of the matters therein contained and until the contrary is
     proved every such meeting in respect of the proceedings of which Minutes
     have been made shall be deemed to have been duly held and convened and
     all resolutions passed or proceedings had thereat to have been duly
     passed or had.

22.  Subject to all other provisions contained herein the Agent may without
     the consent of the relevant Issuer, the Guarantor, the Noteholders or the
     Couponholders prescribe such further regulations regarding the
     requisitioning and/or the holding of meetings of Noteholders and
     attendance and voting thereat as the Agent may in its sole discretion
     think fit.

<PAGE>

                                     108

                                  SCHEDULE 5

                              FORM OF PUT NOTICE

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

                      [title of relevant Series of Notes]

By depositing this duly completed Notice with any Paying Agent for the above
Series of Notes (the "Notes") the undersigned holder of such Notes surrendered
with this Notice and referred to below irrevocably exercises its option to
have such Notes redeemed in accordance with Condition 6(e) on [redemption
date].

This Notice relates to Notes in the aggregate nominal amount of _______
bearing the following serial numbers:

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

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

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

If the Notes referred to above are to be returned (1) to the undersigned under
clause 10(4) of the Agency Agreement, they should be returned by post to the
following address outside the United States:

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

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

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

Payment Instructions

Please make payment in respect of the above-mentioned Notes by [cheque posted
to the above address/transfer to the following bank account] (2):

Bank:                               -----------------------------

Branch Address outside
the United States:                  -----------------------------

Branch Code:                        -----------------------------

Account Number:                     -----------------------------

Signature of holder:                -----------------------------

<PAGE>

                                     109

                         Duly authorised on behalf of
                    [CIBA SPECIALTY CHEMICALS CORPORATION/
                         CIBA SPECIALTY CHEMICALS PLC/
              CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH]

[To be completed by recipient Paying Agent]

Details of missing unmatured Coupons  ---------------------------(3)

Received by:                          -----------------------

[Signature and stamp of Paying Agent]

At its office at:                   -----------------------

On:                                 -----------------------

Notes

(1)  The Agency Agreement provides that Notes so returned will be sent by
     post, uninsured and at the risk of the Noteholder, unless the Noteholder
     otherwise requests and pays the costs of such insurance to the relevant
     Paying Agent at the time of depositing the Note referred to above.

(2)  Delete as applicable.

(3)  Only relevant for Fixed Rate Notes (which are not also Indexed Redemption
     Amount Notes) in definitive form.

N.B. The Paying Agent with whom the above-mentioned Notes are deposited will
     not in any circumstances be liable to the depositing Noteholder or any
     other person for any loss or damage arising from any act, default or
     omission of such Paying Agent in relation to the said Notes or any of
     them unless such loss or damage was caused by the fraud or gross
     negligence of such Paying Agent or its directors, officers or employees.

     This Put Notice is not valid unless all of the paragraphs requiring
     completion are duly completed. Once validly given this Put Notice is
     irrevocable except in the circumstances set out in clause 10(4) of the
     Agency Agreement.

<PAGE>

                                     110

                                  SCHEDULE 6

                            Dated 30th March, 2001

                         CIBA SPECIALTY CHEMICALS PLC
                     CIBA SPECIALTY CHEMICALS CORPORATION
               CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
                                  as Issuers

                                    - and -

                     CIBA SPECIALTY CHEMICALS HOLDING INC.
                                 as Guarantor

                      __________________________________

                          OPERATING & ADMINISTRATIVE
                             PROCEDURES MEMORANDUM
                                in respect of a
                              U.S.$2,000,000,000
                         EURO MEDIUM TERM NOTE PROGRAM
                            (Amended and Restated)

                      ___________________________________

                                 ALLEN & OVERY
                                    London

<PAGE>

                                     111

The aggregate nominal amount of all Notes outstanding at any time will not,
subject as provided below, exceed U.S.$2,000,000,000 or its equivalent in
other currencies at the time of agreement to issue, subject to increase as
provided in the Program Agreement. The Program Agreement provides for the
increase in the nominal amount of Notes that may be issued under the Program.
In that event, this Procedures Memorandum shall apply to the Program as
increased.

The documentation of the Program provides for the issue of Notes denominated
in any currency or currencies as may be agreed between the relevant Issuer,
the Guarantor and the relevant Dealer (subject to certain restrictions as to
minimum and/or maximum maturities as set out in the Offering Circular
describing the Program) and being any of:

         o        Fixed Rate Notes
         o        Floating Rate Notes
         o        Zero Coupon Notes
         o        Dual Currency Notes
         o        Indexed Interest Notes
         o        Indexed Redemption Amount Notes
         o        Instalment Notes
         o        Partly Paid Notes
         o        other forms of Notes agreed between the relevant Dealer or
                  Lead Manager, the relevant Issuer and the Guarantor

All terms with initial capitals used herein without definition shall have the
meanings given to them in the Offering Circular dated 30th March, 2001 (the
"Offering Circular" as supplemented), or, as the case may be, the amended and
restated Program Agreement dated 30th March, 2001 (the "Program Agreement" as
amended, supplemented or restated) between the Issuers, the Guarantor and the
Dealers named therein pursuant to which the Issuer may issue Euro Medium Term
Notes.

OPERATING PROCEDURES

Dealers must confirm all trades directly with the Issuer, the Guarantor and
the Agent.

A.       RESPONSIBILITIES OF THE AGENT

     The Agent will, in addition to the responsibilities in relation to
     settlement described in Annexe A, be responsible for the following:

     (i)  in the case of Notes which are to be listed on a Stock Exchange,
          distributing, or procuring the distribution, to the Stock Exchange
          and any other relevant authority such number of copies of the
          Pricing Supplement required by the Stock Exchange and such other
          relevant authority;

     (ii) in the case of Notes which are to be listed on a Stock Exchange,
          immediately notifying the relevant Issuer and the relevant Dealer if
          at any time the Agent is notified by the Listing Agent or the Stock
          Exchange that the listing of a Tranche of Notes has been refused or
          otherwise will not take place; and

    (iii) determining the end of the Distribution Compliance Period in
          respect of a Tranche in accordance with clause 4 of the Agency
          Agreement. The Agent shall upon determining the end of the
          Distribution Compliance Period in respect of any Tranche

<PAGE>

                                     112

          notify the relevant Issuer, the Guarantor, Euroclear, Clearstream,
          Luxembourg and the relevant Dealer or Lead Manager, as the case may
          be.

B.       RESPONSIBILITIES OF DEALER/LEAD MANAGER

     (i)  Each Dealer/Lead Manager will be responsible for preparing and
          agreeing with the relevant Issuer and the Guarantor a Pricing
          Supplement (substantially in the form of Annexe C hereto) giving
          details of each Tranche of Notes to be issued.

     (ii) In the case of an issue not to be subscribed pursuant to a
          Subscription Agreement, each Dealer which agrees to purchase Notes
          from the relevant Issuer will be responsible for notifying the Agent
          upon completion of the distribution of the Notes of each Tranche
          purchased by that Dealer. In the case of an issue of Notes to be
          subscribed pursuant to a Subscription Agreement, the Lead Manager
          will be responsible for notifying the Agent upon completion of the
          distribution of the Notes of such issue.

C.       SETTLEMENT

          The settlement procedures set out in Annexe A shall apply to each
          issue of Notes (Part 1 in the case of issues not to be subscribed
          pursuant to a Subscription Agreement, Part 2 in the case of issues
          to be subscribed pursuant to a Subscription Agreement), unless
          otherwise agreed between the relevant Issuer, the Guarantor, the
          Agent and the relevant Dealer or the Lead Manager, as the case may
          be. With issues of Notes to be listed on a Stock Exchange other than
          the Luxembourg Stock Exchange more time may be required to comply
          with the relevant Stock Exchange's listing requirements and with
          issues of Dual Currency or Indexed Notes more time may be required
          to settle documentation.

          A Trading Desk and Administrative Contact List is set out in Annexe
          D.

          N.B.: ALL COMMUNICATIONS WITH ANY ISSUER MUST BE COPIED TO THE
          GUARANTOR.

<PAGE>

                                     113

                                   ANNEXE A

                                    PART 1

             SETTLEMENT PROCEDURES FOR ISSUES NOT TO BE SUBSCRIBED
                     PURSUANT TO A SUBSCRIPTION AGREEMENT

References below to the "Issuer" is to the "relevant Issuer".

Day                 Latest          Action
                    London time

No later            2.00 p.m.       The Issuer and the Guarantor may agree terms
than Issue                          with one or more of the Dealers for the
Date minus 5                        issue and purchase of Notes (whether
                                    pursuant to an unsolicited bid from a Dealer
                                    or pursuant to an enquiry by the Issuer).
                                    The Dealer instructs the Agent to obtain a
                                    common code and ISIN from Euroclear or
                                    Clearstream, Luxembourg.  In the case of the
                                    first Tranche of Notes of a Series, the
                                    Agent telephones Euroclear or Clearstream,
                                    Luxembourg with a request for a common code
                                    and ISIN for such Series and in the case of
                                    a subsequent Tranche of Notes of that Series
                                    the Agent telephones Euroclear or
                                    Clearstream, Luxembourg with a request for
                                    a temporary common code and ISIN for such
                                    Tranche. Each common code and ISIN is
                                    notified by the Agent to the Issuer and
                                    each Dealer which has reached agreement
                                    with the Issuer.

                    3.00 p.m.       If a Dealer has reached agreement with the
                                    Issuer and the Guarantor by telephone, such
                                    Dealer confirms the terms of the agreement
                                    to the Issuer and the Guarantor by fax
                                    (substantially in the form set out in Annexe
                                    B) attaching a copy of the Pricing
                                    Supplement (substantially in the form set
                                    out in Annexe C).  The Dealer sends a copy
                                    of that fax to the Agent for information.

                    5.00 p.m.       The Issuer and the Guarantor confirm their
                                    agreement to the terms on which the issue of
                                    Notes is to be made (including the form of
                                    the Pricing Supplement) by each signing and
                                    returning a copy of the Pricing Supplement
                                    to the relevant Dealer.  The Issuer also
                                    confirms its instructions to the Agent
                                    (including, in the case of Floating Rate
                                    Notes, for the purposes of rate fixing) to
                                    carry out the duties to be carried out by
                                    the Agent under these Settlement Procedures
                                    and the Agency Agreement including
                                    preparing, authenticating and issuing a
                                    Temporary Global Note for the Tranche of
                                    Notes which is to be purchased and in the
                                    case of

<PAGE>

                                     114

Day                 Latest          Action
                    London time

                                    the first Tranche of a Series,
                                    where the Pricing Supplement for such
                                    Tranche does not specify that such Temporary
                                    Global Note is to be exchangeable only for
                                    Notes in definitive form, a Permanent Global
                                    Note for such Series, giving details of such
                                    Notes.  The Issuer confirms such
                                    instructions by sending a copy by fax of the
                                    signed P the signed Pricing Supplement shall
                                    be conclusive evidence of the agreement
                                    (save in the case of manifest error) and
                                    shall be binding on the parties accordingly.

No later than                       In the case of Notes which are to be listed
Issue Date                          on a Stock Exchange, the Agent also
minus 3                             notifies, or the notification to, the
                                    relevant Stock Exchange and any other
                                    relevant authority by fax or by hand of the
                                    details of the Notes to be issued by sending
                                    the Pricing Supplement to the relevant Stock
                                    Exchange and any other relevant authority.

Issue Date          3.00 p.m.       The relevant Dealer instructs Euroclear and/
minus 2                             or Clearstream, Luxembourg to debit its
                                    account and pay the purchase price, against
                                    delivery of the Notes, to the Agent's
                                    account with Euroclear and/or Clearstream,
                                    Luxembourg on the Issue Date and the Agent
                                    receives details of such instructions
                                    through the records of Euroclear and/or
                                    Clearstream, Luxembourg.

                                    In the case of Floating Rate Notes, the
                                    Agent notifies Euroclear, Clearstream,
                                    Luxembourg , the Issuer, the Guarantor (if
                                    applicable) the relevant Stock Exchange and
                                    the relevant Dealer by telex or fax of the
                                    Rate of Interest for the first Interest
                                    Period (if already determined). Where the
                                    Rate of Interest has not yet been
                                    determined, this will be notified in
                                    accordance with this paragraph as soon as
                                    it has been determined.

Issue Date minus 1  3.00 p.m.       The Agent prepares and authenticates a
                                    Temporary Global Note for each Tranche of
                                    Notes which is to be purchased and, where
                                    required as specified above, a Permanent
                                    Global Note in respect of the relevant
                                    Series.  The conditions precedent in the
                                    Program agreement are satisfied and/or
                                    waived.  The Temporary Global Note and any
                                    such Permanent Global Note are then
                                    delivered by the Agent to a common
                                    depositary for Euroclear and Clearstream,
                                    Luxembourg and instructions are given by the
                                    Agent to Euroclear or, as the case may be,
                                    Clearstream, Luxembourg to credit the Notes
                                    represented by such

<PAGE>

                                      115

Day                 Latest          Action
                    London time

                                    Temporary Global Note to the Agent's
                                    distribution account.  The Agent further
                                    instructs Euroclear or, as the case may
                                    be, Clearstream, Luxembourg to debit from
                                    the distribution account the nominal amount
                                    of the relevant Tranche of Notes and to
                                    credit such nominal amount to the account
                                    of such Dealer with Euroclear or
                                    Clearstream, Luxembourg against payment to
                                    the account of Tranche of Notes for value on
                                    the Issue Date.  The relevant Dealer gives
                                    corresponding instructions to Euroclear or
                                    Clearstream, Luxembourg.  The parties (which
                                    for this purpose shall include the Agent)
                                    may agree to arrange for "free delivery" to
                                    be made through the relevant clearing system
                                    if specified in the applicable Pricing
                                    Supplement, in which case these Settlement
                                    Procedures will be amended accordingly.

Issue Date                          Euroclear and Clearstream, Luxembourg debit
                                    and credit accounts in accordance with
                                    instructions received by them.

                                    The Agent pays to the Issuer for value on
                                    the Issue Date the aggregate purchase moneys
                                    received by it to such account of the Issuer
                                    as shall have been notified to the Agent for
                                    the purpose.

On or subsequent                    The Agent notifies the Issuer and Guarantor
to the Issue Date                   forthwith in the event that a Dealer
                                    does not pay the purchase price due from it
                                    in respect of a Note.

                                    The Agent notifies the Issuer of the issue
                                    of Notes giving details of the Global
                                    Note(s) and the nominal amount represented
                                    thereby.

                                    The Agent confirms the issue of Notes to the
                                    relevant Stock Exchange and any other
                                    relevant authority.

                                    The relevant Dealer promptly notifies the
                                    Agent that the distribution of the Notes
                                    purchased by it has been completed. The
                                    Agent promptly notifies the Issuer, the
                                    Guarantor, the relevant Dealers, Euroclear
                                    and Clearstream, Luxembourg of the date of
                                    the end of the Distribution Compliance
                                    Period with respect to the relevant Tranche
                                    of Notes.

<PAGE>

                                     116

                                   ANNEXE A

                                    PART 2

SETTLEMENT PROCEDURES FOR ISSUES SUBSCRIBED PURSUANT TO A SUBSCRIPTION AGREEMENT

References below to the "Issuer" is to the "relevant Issuer".

Day                      Latest time      Action

No later than                             The Issuer and the Guarantor may,
Issue Date minus 10                       subject to the execution of the
(or such other number                     Subscription Agreement referred to
of days agreed between                    below, agree terms with a Dealer
the Issuer, the                           (which expression in this Part 2
Guarantor, the Lead                       includes any entity to be appointed
Manager and the Agent)                    as a dealer under the Subscription
                                          Agreement referred to below) (the
                                          "Lead Manager") for the issue and
                                          purchase of Notes to be subscribed
                                          pursuant to a Subscription
                                          Agreement (whether pursuant to an
                                          unsolicited bid by such Lead Manager
                                          or pursuant to an enquiry by the
                                          Issuer). The Lead Manager may invite
                                          other Dealers (new or additional)
                                          approved by the Issuer and the
                                          Guarantor to join an underwriting
                                          syndicate either on the basis of an
                                          invitation telex agreed between the
                                          Issuer, the Guarantor and the Lead
                                          Manager or on the terms of the
                                          Pricing Supplement referred to below
                                          and the Subscription Agreement. The
                                          Lead Manager and any such Dealers are
                                          together referred to as the
                                          "Managers".

                                          The Lead Manager instructs the Agent
                                          to obtain a common code and ISIN from
                                          Euroclear or Clearstream, Luxembourg.
                                          In the case of the first Tranche of
                                          Notes of a Series, the Agent
                                          telephones Euroclear or Clearstream,
                                          Luxembourg with a request for a common
                                          code and ISIN for such Series and in
                                          the case of a subsequent Tranche of
                                          Notes of that Series the Agent
                                          telephones Euroclear or Clearstream,
                                          Luxembourg with a request for a
                                          temporary common code and ISIN
                                          for such Tranche. Each Common Code
                                          and ISIN is notified by the Agent to
                                          the Issuer and the Lead Manager.

<PAGE>

                                     117

Day                      Latest time      Action

                                          The Issuer, the Guarantor and the Lead
                                          Manager agree a form of Pricing
                                          Supplement prepared by or on behalf of
                                          the Lead Manager (in substantially the
                                          form of Annexe C) which is submitted
                                          to the lawyers rendering a legal
                                          opinion in connection with the
                                          relevant issue for approval. A draft
                                          Subscription Agreement (in
                                          substantially the form of Appendix E
                                          to the Program Agreement or such other
                                          form as may be agreed between the
                                          Issuer, the Guarantor and the Lead
                                          Manager) is also prepared. The
                                          Subscription Agreement may, if so
                                          agreed, be called by another name.
                                          The Lead Manager sends a copy of the
                                          agreed, be Subscription Agreement
                                          to any other Manager at least two full
                                          days (as defined in the Explanatory
                                          Notes to this Annexe A) before
                                          the Subscription Agreement is intended
                                          to be signed. At the same time the
                                          Lead Manager sends a copy of the
                                          Offering Circular and Program
                                          Agreement (together with such other
                                          items from the Initial Documentation
                                          List as the Lead Manager deems
                                          appropriate) to any other Manager
                                          which has not previously received
                                          such documents. The Subscription
                                          Agreement and Pricing Supplement
                                          are agreed and executed and a copy of
                                          the Pricing Supplement is sent by fax
                                          to the Agent which shall act as the
                                          Agent's authorisation (including, in
                                          the case of Floating Rate Notes,
                                          for the purposes of rate fixing) to
                                          carry out the duties to be carried
                                          out by it under these Settlement
                                          Procedures and the Agency Agreement
                                          including preparing, authenticating
                                          and issuing a Temporary Global Note
                                          for the Tranche of Notes which
                                          is to be purchased and in the case of
                                          the first Tranche of a Series,
                                          where the Pricing Supplement does
                                          not specify that such Temporary Global
                                          Note is to be exchangeable only for
                                          Notes in definitive form, a
                                          Permanent Global Note for such Series,
                                          giving details of such Notes.

No later than                             In the case of Notes to be listed on a
Issue Date                                Stock Exchange, the Agent notifies or
minus 3                                   procure the notification to, the
                                          relevant Stock Exchange by fax or by
                                          hand of the details of the Notes to
                                          be issued by sending the Pricing
                                          Supplement to the relevant Stock
                                          Exchange and any other relevant
                                          authority.

No later than                             The Lead Manager instructs Euroclear
Issue Date                                and/or Clearstream, Luxembourg to
minus 2                                   debit its account and pay the
                                          purchase price, against delivery of
                                          the Notes as instructed by the Lead
                                          Manager to the account specified by
                                          the Issuer.

<PAGE>

                                     118

Day                      Latest time      Action

Issue Date               3.00 p.m.        In the case of Floating Rate Notes,
minus 2                                   the Agent notifies Euroclear,
                                          Clearstream, Luxembourg, the Issuer,
                                          the Guarantor, the relevant Stock
                                          Exchange (if applicable) and the Lead
                                          Manager by telex or fax of the Rate of
                                          Interest for the first Interest Period
                                          (if already determined).  Where the
                                          Rate of Interest has not yet been
                                          determined, this will be notified in
                                          accordance with this paragraph as soon
                                          as it has been determined.

Issue Date               agreed time      The Agent prepares and authenticates a
minus 1 (in the                           Temporary Global Note for each Tranche
case of pre-closed                        of Notes which is to be purchased,
issues) or Issue                          and where required as specified above,
Date (in any other                        a Permanent Global Note in respect
case) (the "Payment                       of the relevant Series. The
Instruction Date")                        conditions precedent in the
                                          Subscription Agreement and the Program
                                          Agreement are satisfied and/or waived.
                                          The Temporary Global Note and any such
                                          Permanent Global Note are then
                                          delivered by the Agent to a common
                                          depositary for Euroclear and
                                          Clearstream, Luxembourg and
                                          instructions are given by the Agent
                                          (on behalf of the Issuer) to the
                                          common depositary to hold the Notes
                                          represented by such Temporary Global
                                          Note to the Issuer's order.

                                          The Lead Manager instructs the common
                                          depositary to request Euroclear and/or
                                          Clearstream, Luxembourg to credit such
                                          nominal amount of the relevant Tranche
                                          of Notes to the accounts of the
                                          persons entitled thereto with
                                          Euroclear or Clearstream, Luxembourg
                                          against payment to the specified
                                          account of the Issuer of the purchase
                                          price for the relevant Tranche of
                                          Notes for value on the Issue Date.
                                          The common depositary issues a payment
                                          confirmation in respect of this
                                          payment.

Issue Date                                Payment is effected and Euroclear
                                          and/or Clearstream, Luxembourg debit
                                          and credit accounts in accordance with
                                          instructions received by them.

                                          The Agent notifies the Issuer of the
                                          issue of Notes giving details of the
                                          Global Note(s) and the nominal amount
                                          represented thereby.

                                          The Agent confirms the issue of Notes
                                          to the relevant Stock Exchange and any
                                          other relevant authority.

On or subsequent to the                   Each other Manager (if any) promptly
Issue Date                                notifies the Lead Manager when the
                                          distribution of the Notes purchased
                                          by it has been completed.  The Lead

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                                     119

                                          Manager promptly notifies the Agent
                                          upon completion of the distribution of
                                          the Notes of the relevant Tranche.
                                          The Agent promptly notifies the
                                          Issuer, the Guarantor, the Lead
                                          Manager, Euroclear and Clearstream,
                                          Luxembourg of the date of the end of
                                          the Distribution Compliance Period
                                          with respect to the relevant Tranche
                                          of Notes.

<PAGE>

                                     120

Explanatory Notes to Annexe A
------------------------------

(a)  Each "day" is a day on which banks and foreign exchange markets are open
     for business in London, counted in reverse order from the proposed Issue
     Date.

(b)  The Issue Date must be a Business Day. For the purposes of this
     Memorandum, "Business Day" means a day which is both:

     (i)  a day on which commercial banks and foreign exchange markets settle
          payments in London and any other place as is specified in the
          applicable Pricing Supplement (each an "Additional Business
          Centre"); and

     (ii) either (1) in relation to Notes denominated or payable in a
          Specified Currency other than euro, a day on which commercial banks
          and foreign exchange markets settle payments in the principal
          financial centre of the country of the relevant Specified Currency
          (if other than London or any Additional Business Centre) and which,
          if the Specified Currency is New Zealand Dollars, shall be Auckland)
          or (2) in relation to Notes denominated or payable in euro, a day on
          which the TARGET System is open. "TARGET System" means the
          Trans-European Automated Real-Time Gross Settlement Express Transfer
          (TARGET) System. Unless otherwise provided in the applicable Pricing
          Supplement, the principal financial centre for any currency shall be
          as provided in the 2000 ISDA Definitions, each as amended and
          updated as at the Issue Date of the first Tranche of Notes of the
          relevant Series and published by the International Swaps and
          Derivatives Association, Inc.

(c)  Times given are the approximate times for the taking of the action in
     question and are references to London time.

<PAGE>

                                     121

                                   ANNEXE B

                         FORM OF DEALER'S CONFIRMATION
                   FOR ISSUES WITH NO SUBSCRIPTION AGREEMENT

[Date]

To:      [CIBA SPECIALTY CHEMICALS CORPORATION/
         CIBA SPECIALTY CHEMICALS PLC/
         CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH]

and:     CIBA SPECIALTY CHEMICALS HOLDING INC.

c.c.     The Chase Manhattan Bank

                    [CIBA SPECIALTY CHEMICALS CORPORATION/
                         CIBA SPECIALTY CHEMICALS PLC/
              CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH]
        [Title of relevant Tranche of Notes (specifying type of Notes)]
    issued pursuant to the U.S.$2,000,000,000 Euro Medium Term Note Program

We hereby confirm the agreement for the issue to us of [describe issue] Notes
due [ ] (the "Notes") under the above Program pursuant to the terms of issue
set out in the Pricing Supplement which we are faxing herewith.

[The selling commission in respect of the Notes will be [ ] per cent. of the
nominal amount of the Notes and will be deductible from the net proceeds of
the issue.]

The Notes are to be credited to [Euroclear/Clearstream, Luxembourg] account
number [ ] in the name of [Name of Dealer].

Please confirm your agreement to the terms of issue by signing and faxing to
us a copy of the following Pricing Supplement. Please also fax a copy of the
Pricing Supplement to the Agent.

For and on behalf of [Name of Dealer]

By:      ---------------------------
         Authorised signatory

<PAGE>

                                      122

                                   ANNEXE C

                          FORM OF PRICING SUPPLEMENT

[Date]

                    [Ciba Specialty Chemicals Corporation/
                         Ciba Specialty Chemicals PLC/
              Ciba Spezialitatenchemie Holding Deutschland GmbH]

                Issue of [Aggregate Nominal Amount of Tranche]
                 [Title of Notes] Guaranteed by Ciba Specialty
                            Chemicals Holding Inc.
                          under the USD 2,000,000,000
                         Euro Medium Term Note Program

[The Notes constitute [commercial paper/shorter term debt securities/longer
term debt securities] issued in accordance with regulations made under section
4 of the Banking Act 1987. The Issuer of the Notes is not an authorized
institution or a European authorized institution (as such terms are defined in
the Banking Act 1987 (Exempt Transactions) Regulations 1997). Repayment of the
principal and payment of any interest or premium in connection with the Notes
has been guaranteed by Ciba Specialty Chemicals Holding Inc., which is neither
an authorized institution nor a European authorized institution]. **

This document constitutes the Pricing Supplement relating to the issue of
Notes described herein. Terms used herein shall be deemed to be defined as
such for the purposes of the Conditions set forth in the Offering Circular
dated [ ]. This Pricing Supplement must be read in conjunction with such
Offering Circular.

[Include whichever of the following apply or specify as "Not Applicable"
(N/A). Note that the numbering should remain as set out below, even if "Not
Applicable" is indicated for individual paragraphs or sub-paragraphs. Italics
denote directions for completing the Pricing Supplement.]

1.  (i)      Issuer:             [       ]

    (ii)     Guarantor:          Ciba Specialty Chemicals Holding Inc.

2.  (i)]     Series Number:      [       ]

    [(ii)    Tranche Number:     [       ]
                                 (If fungible with an existing Series,
                                 details of that Series, including
                                 the date on which the Notes become
                                 fungible)]

3.  Specified Currency           [       ]
    or Currencies:

4.  Aggregate Nominal Amount:

<PAGE>

                                     123

   - Tranche:                          [       ]
   - Series:                           [       ]

5. Issue Price of Tranche:             [       ] percent

6. Specified Denominations:            [In the case of Notes with a maturity of
                                       183 days or less issued by (i) Ciba
                                       Specialty Chemicals Corporation and
                                       (ii) where proceeds of the issuance are
                                       on-lent to a U.S. entity, the minimum
                                       denomination for such Notes shall be USD
                                       500 000 (or the equivalent thereof at
                                       exchange rates applicable on the relevant
                                       date of calculation)]

7. [(i)] Issue Date:                   [       ]

   (ii)  Interest Commencement Date
         (if different from the
         Issue Date):                  [       ]]

8.  Maturity Date:                     [Fixed rate - specify date/
                                       Floating rate - Interest Payment Date
                                       falling in [specify month and year]]

9.  Interest Basis:                    [[   ] percent Fixed Rate]
                                       [[LIBOR/EURIBOR] +/- [ ] percent Floating
                                       Rate]
                                      [Zero Coupon]
                                      [Indexed Interest]
                                      [specify other]
                                      (further particulars specified below)

10. Redemption/Payment Basis:         [Redemption at par]
                                      [Indexed Redemption]
                                      [Dual Currency]
                                      [Partly Paid]
                                      [Installment]
                                      [specify other]

11. Change of Interest Basis or       [Specify details of any provision for
    Basis or Redemption/Payment       change of Notes into another Interest
    Basis]                            Redemption/Payment Basis:

12. Put/Call Options:                 [Investor Put]
                                      [Issuer Call]
                                      [(further particulars specified below)]

13. Listing:                          [Luxembourg/specify other/None]

14. Method of distribution:           [Syndicated/Non-syndicated]

<PAGE>

                                     124

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

15.  Fixed Rate Note Provisions       [Applicable/Not Applicable]
                                      (If not applicable, delete the remaining
                                      sub-paragraphs of this paragraph)

(i)   Rate[(s)] of Interest:          [       ] percent per annum [payable
                                      [annually/semi-annually/quarterly/monthly]
                                      in arrears]

      (ii)  Interest Payment Date(s): [       ] in each year

      (iii) Fixed Coupon Amount(s):   [       ] per [       ] in nominal amount

       (iv) Broken Amount(s):         [Insert particulars of any initial or
                                      final broken interest amounts which do not
                                      correspond with the Fixed Coupon Amounts]

        (v) Fixed Day Count Fraction: [30/360 or Actual/Actual (ISMA) or specify
                                      other] (Note that if interest is not
                                      payable on a regular basis (for example,
                                      if there are Broken Amounts specified)
                                      Actual/Actual (ISMA) will not be a
                                      suitable Fixed Day Count Fraction)

       (vi) Interest Determination    [       ] in each year
            Date(s):                  [Insert interest payment dates except
                                      where there are long or short periods. In
                                      these cases, insert regular interest
                                      payment dates] (NB: Only relevant
                                      where Day Count Fraction is
                                      Actual/Actual (ISMA))

     (vii)  Other terms relating to
            the method of calculating
            interest for Fixed Rate   [None/Give details]
            Notes:

16. Floating Rate Note Provisions     [Applicable/Not Applicable]
                                      (If not applicable, delete the remaining
                                      sub-paragraphs of this paragraph)

     (i)   Specified Period(s)/
           Specified Interest Payment [       ]
           Dates:

     (ii)  Business Day Convention:   [Floating Rate Convention/Following
                                      Business Day Convention/Modified Following
                                      Business Day Convention/Preceding Business
                                      Day Convention/[specify other]]

    (iii)  Additional Business        [       ]
           Center(s):

     (iv)  Manner in which the Rate of

<PAGE>

                                     125

Interest and Interest Amount
is to be determined:                    [Screen Rate Determination/ISDA
                                        Determination/specify other]

(v)  Party responsible for calculating
     the Rate of Interest and Interest  [       ]
     Amount (if not the Principal
     Paying Agent):

(vi) Screen Rate Determination:

     - Reference Rate:                  [       ]
                                      (Either LIBOR, EURIBOR or other, although
                                      additional information is required if
                                      other - including fallback provisions in
                                      the Agency Agreement)

    - Interest Determination Date(s): [       ]
                                      (Second London business day prior to the
                                      start of each Interest Period if LIBOR and
                                      second TARGET day prior to the start of
                                      each Interest Period if EURIBOR)

    - Relevant Screen Page:           [       ]
                                      (in the case of EURIBOR, if not Telerate
                                      248 ensure it is a page which shows a
                                      composite rate)

(vii)  ISDA Determination:

    - Floating Rate Option:           [       ]

    - Designated Maturity:            [       ]

    - Reset Date(s):                  [       ]

(viii)  Margin(s):                    [+/-] [       ] percent per annum

(ix)   Minimum Rate of Interest:      [       ] percent per annum

(x)    Maximum Rate of Interest:      [       ] percent per annum

(xi)   Floating Day Count Fraction:   [       ]

(xii)  Fall back provisions, rounding
       provisions and any other
       terms relating to the method
       of calculating interest on
       Floating Rate

<PAGE>

                                     126

     Notes, if different from those   [       ]
     set out in the Conditions:

17.  Zero Coupon Note Provisions      [Applicable/Not Applicable]
                                      (If not applicable, delete the remaining
                                      sub-paragraphs of this paragraph)

    (i)  Accrual Yield:               [       ] percent per annum

   (ii)  Reference Price:             [       ]

  (iii)  Any other formula/basis of
         determining amount payable:  [       ]
                                      (Consider applicable day count fraction
                                      if euro denominated)

18. Indexed Interest Note Provisions  [Applicable/Not Applicable]
                                      (If not applicable, delete the remaining
                                      sub-paragraphs of this paragraph)

    (i)  Index/Formula:               [give or annex details]

   (ii)  Calculation Agent
         responsible for calculating
         the principal and/or         [       ]
         interest due:

  (iii)  Provisions for determining
         coupon where calculation by
         reference to Index and/or    [       ]
         Formula is impossible or
         impracticable:

   (iv)  Specified Period(s)/
         Specified Interest
          Payment Dates:              [       ]

    (v)  Business Day Convention:     [Floating Rate Convention/Following
                                      Business Day Convention/Modified Following
                                      Business Day Convention/Preceding Business
                                      Day Convention/specify other]

   (vi)  Additional Business
         Center(s):                   [       ]

  (vii)  Minimum Rate of Interest:    [       ] percent per annum

 (viii)  Maximum Rate of Interest:    [       ] percent per annum

   (ix)  Floating Day Count Fraction: [       ]

<PAGE>

                                     127

19. Dual Currency Note Provisions     [Applicable/Not Applicable]
                                      (If not applicable, delete the remaining
                                      sub-paragraphs of this paragraph)

    (i)  Rate of Exchange/method of
         calculating Rate of          [give details]
         Exchange:

   (ii)  Calculation Agent, if any,
         responsible for calculating  [       ]
         the principal and/or
         interest due:

  (iii)  Provisions applicable where  [       ]
         calculation by reference to
         Rate of Exchange is
         impossible or impracticable:

   (iv)  Person at whose option       [       ]
         Specified Currency(ies)
         is/are payable:

PROVISIONS RELATING TO REDEMPTION

20.  Issuer Call:                      [Applicable/Not Applicable]
                                       (If not applicable, delete the remaining
                                       sub-paragraphs of this paragraph)

   (i)  Optional Redemption Date(s):  [       ]

  (ii)  Optional Redemption Amount(s)
        and method, if any, of        [       ]
        calculation of such
        amount(s):

 (iii)  If redeemable in part:

        (a)  Minimum Redemption Amount[       ]

        (b)  Higher Redemption Amount [       ]

  (iv)  Notice period (if other
        than as set out in the        [       ]
        Conditions):

 21.  Investor Put:                   [Applicable/Not Applicable]
                                      (If not applicable, delete the remaining
                                      sub-paragraphs of this paragraph)

<PAGE>

                                     128

   (i)  Optional Redemption Date(s):  [       ]

  (ii)  Optional Redemption
        Amount(s) and method, if
        any, of calculation of        [       ]
        such amount(s):

 (iii)  Notice period (if other
        than as set out in the        [       ]
        Conditions):

22.  Final Redemption Amount          [Par/specify other/see Appendix]

23.  Early Redemption Amount(s)
     payable on redemption for
     taxation reasons or on event
     of default and/or the method
     of calculating the same (if
     required or if different from
     that set out in Condition 6(f)): [       ]

GENERAL PROVISIONS APPLICABLE TO THE NOTES

24.  Form of Notes:                   Temporary Global Note exchangeable for a
                                      Permanent Global Note which is
                                      exchangeable for Definitive Notes
                                      [on 60 days notice given at any time/only
                                      upon an Exchange Event] [n.b. the latter
                                      option is not available to Ciba Specialty
                                      Chemicals Corporation or where proceeds
                                      are to be on-lent to a United States
                                      entity].

                                      [Temporary Global Note exchangeable for
                                      Definitive Notes on and after the Exchange
                                      Date.]

25. Additional Financial Center(s)    [Not Applicable/give details]
    or other special provisions       (Note that this item relates to the place
    relating to Payment Dates:        of payment and not Interest Period end
                                      dates to which item 16(iii) relates)

26. Talons for future Coupons or
    Receipts to be attached to
    Definitive Notes (and dates on
    which such Talons mature):        [Yes/No. If yes, give details]

27. Details relating to Partly
    Paid Notes: amount of each
    payment comprising the Issue
    Price and date on which

<PAGE>

                                     129

    each payment is to be made and,
    if different from those
    specified in the Temporary
    Global Note, consequences of
    failure to pay, including any
    right of the Issuer to forfeit
    the Notes and interest due on     [Not Applicable/give details]
    late payment:

28. Details relating to
    Installment Notes: amount of
    each installment, date on which
    each payment is to be made:       [Not Applicable/give details]

29. Redenomination applicable:        Redenomination [not] applicable
                                      (If Redenomination is applicable,
                                      specify either the applicable Fixed Day\
                                      Count Fraction or any provisions necessary
                                      to deal with floating rate interest
                                      calculation (including alternative
                                      reference rates))

30. Details relating to Installment
    Notes: Specify Installment
    Amounts and Installment Dates:    [Not Applicable/give details]

31. Other terms or special
    conditions:                       [Not Applicable/give details]

DISTRIBUTION

32. (i)   If syndicated, names of
          Managers:                   [Not Applicable/give names]

    (ii)  Stabilizing Manager
          (if any):                   [Not Applicable/give name]

33. If non-syndicated, name of
    relevant Dealer:                  [Not Applicable/give name]

34. Whether TEFRA D rules
    applicable or TEFRA rules not     TEFRA D/TEFRA not applicable]
    applicable

35. Additional selling restrictions:  [Not Applicable/give details]

OPERATIONAL INFORMATION

36. Any clearing system(s) other      [Not Applicable/give name(s) and
    than Euroclear and Clearstream,   number(s)]
    Luxembourg and the relevant
    identification number(s):

37. Delivery:                         Delivery [against/free of] payment

38. Additional Paying Agent(s)
    (if any):                         [       ]

<PAGE>

                                     130

39.  [Notes in respect of which the issue proceeds are accepted by the Issuer
     in the United Kingdom and which are to be listed. The text set out below
     may be deleted if the Issuer is relying on any of Regulation 13(4)(c) to
     (g) of the Banking Act 1987 (Exempt Transactions) Regulations 1997]

The Issuer confirms that it:

(a)  has complied with its obligations under the relevant rules (as defined in
     the Banking Act 1987 (Exempt Transactions) Regulations 1997 (the
     "Regulations ")) in relation to the admission to and continuing listing
     of the Program and of any previous issues made under it and listed on the
     same exchange as the Program;

(b)  will have complied with its obligations under the relevant rules in
     relation to the admission to listing of such Notes by the time when such
     Notes are so admitted;

(c)  has not, since the last publication, if any, in compliance with the
     relevant rules of information about the Program, any previous issues made
     under it and listed on the same exchange as the Program, or the Notes,
     having made all reasonable inquiries, become aware of any change in
     circumstances which could reasonably be regarded as significantly and
     adversely affecting its ability to meet its obligations as Issuer in
     respect of the Notes as they fall due; and

(d)  has complied and will continue to comply with its obligations under the
     Regulations to lodge all relevant information (as defined in the
     Regulations) in relation to any such Notes with the UK Listing Authority.

_____________________________________________________________________________
ISIN:                                                  [       ]
Common Code:                                           [       ]
_____________________________________________________________________________

[If the Issuer is relying on Regulation 13(4)(b) and the Offering Circular
does not include one, include here a summary of the tax treatment relevant to
the United Kingdom resident holders of the Notes.]

[LISTING APPLICATION

This Pricing Supplement comprises the details required to list the issue of
Notes described herein pursuant to the listing of the USD 2 000 000 000 Euro
Medium Term Note Program of Ciba Specialty Chemicals Corporation/Ciba
Specialty Chemicals PLC/Ciba Spezialitatenchemie Holding Deutschland GmbH]

<PAGE>

                                     131

RESPONSIBILITY

The Issuer and the Guarantor accept responsibility for the information
contained in this Pricing Supplement.

Signed on behalf of the Issuer:       Signed on behalf of the Guarantor:

By:------------------------------     By:------------------------------
   Duly authorized                       Duly authorized

                                      By:------------------------------
                                         Duly authorized

<PAGE>

                                     132

                                   ANNEXE D

                  TRADING DESK AND ADMINISTRATIVE INFORMATION

The Issuers

CIBA SPECIALTY CHEMICALS CORPORATION
560 White Plains Road
PO Box 2005
Tarrytown, New York
10591-9005

Telephone:                 1 914 785 2000
Telefax:                   1 914 785 2650
Attention:                 Treasurer

CIBA SPECIALTY CHEMICALS PLC
Hulley Road
Macclesfield
Cheshire
SK10 2NX

Telephone:                 44 1 625 888 220
Telefax:                   44 1 625 888 380
Attention:                 Treasurer

CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
Chemiestrasse
D-68623 Lampertheim
Germany

Telephone:                 49 6206 152810
Telefax:                   49 6206 152816
Attention:                 Treasurer

The Guarantor

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

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

<PAGE>

                                     133

The Dealers

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

Telephone:                 44 20 7888 4021
Telex:                     892131 CSFB G
Telefax                    44 20 7888 3719
Attention:                 MTN Trading

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

Telephone:                 44 20 7545 2761
Telex:                     94 01 5555 DBLN G
Telefax:                   44 20 7541 2761
Attention:                 MTN Desk

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

Telephone:                 44 20 7774 2295
Telex:                     94012165 GSHH G
Telefax:                   44 20 7774 5711
Attention:                 Euro Medium Term Note Desk

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

Telephone:                 44 20 7779 3469
Telex:                     8954804 MGLTD G
Telefax:                   44 20 7325 8225
Attention:                 Euro Medium Term Note Desk

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

Telephone:                 44 20 7567 2324
Telex:                     887434 UBSW G
Telefax:                   44 20 7568 3349

<PAGE>

                                     134

Attention:                 MTNs and Private Placements

The Agent

The Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E1W 1YT

Telephone:                 44 1202 347430
Telex:                     8954681 CMB G
Telefax:                   44 1202 347438
Attention:                 Manager, Institutional Trust Services

<PAGE>

                                     135

<PAGE>

                                  SIGNATORIES

The Issuers

CIBA SPECIALTY CHEMICALS CORPORATION
560 White Plains Road
PO Box 2005
Tarrytown, New York
10591-9005

Telephone:                 001 914 785 2000
Telefax:                   001 914 785 2650
Attention:                 Treasurer

By:      OLIVER STRUB                                         KIRK ERSTLING

CIBA SPECIALTY CHEMICALS PLC
Hulley Road
Macclesfield
Cheshire
SK10 2NX

Telephone:                 44 1 625 888 220
Telefax:                   44 1 625 888 380
Attention:                 Treasurer

By:      OLIVER STRUB                                         KIRK ERSTLING

CIBA SPEZIALITATENCHEMIE HOLDING DEUTSCHLAND GMBH
Chemiestrasse
D-68623 Lampertheim
Germany

Telephone:                 00 49 6206 152 810
Telefax:                   00 49 6206 152 816
Attention:                 Treasurer

By:      OLIVER STRUB                                         KIRK ERSTLING

<PAGE>

                                     136

The Guarantor

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

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

By:      OLIVER STRUB                               By:        KIRK ERSTLING

The Agent

THE CHASE MANHATTAN BANK, LONDON BRANCH
Trinity Tower
9 Thomas More Street
London E1W 1YT

Telephone:                 44 1202 347430
Telex No:                  8954681 CMB G
Telefax No:                44 1202 347438
Attention:                 Manager, Institutional Trust Services

By:      STUART KING

CHASE MANHATTAN BANK LUXEMBOURG S.A.
5 rue Plaetis
L-2338
Luxembourg

All communications should be sent care of the Agent

By:      STUART KING

Without prejudice to the foregoing execution of the Agreement by the parties
hereto, Chase Manhattan Bank Luxembourg S.A. hereby expressly and specifically
confirms its agreement with the provisions of clause 30(2) hereof for the
purposes of Article 1 of the Protocol annexed to the Convention on
jurisdiction and the enforcement of judgments in civil and commercial matters
signed at Brussels on 27th September, 1968.

CHASE MANHATTAN BANK LUXEMBOURG S.A.

By:      STUART KINGExhibit 4.1

                                  VSOURCE, INC.

                          EXCHANGEABLE NOTE AND WARRANT

                               PURCHASE AGREEMENT

                                January 28, 2002

<PAGE>
                                  VSOURCE, INC.

                EXCHANGEABLE NOTE AND WARRANT PURCHASE AGREEMENT

          This  Exchangeable  Note  and  Warrant  Purchase  Agreement  (this
"Agreement")  is made as of this 28th day of January, 2002 by and among Vsource,
Inc., a Delaware corporation (the "Company"), Vsource (CI) Ltd, a Cayman Islands
company  and  a  wholly-owned  subsidiary of the Company ("Vsource CI"), Vsource
(Malaysia)  Sdn  Bhd,  a  Malaysian company and a wholly-owned subsidiary of the
Company  ("Vsource  Malaysia"  together  with Vsource CI, the "Guarantors"), and
each  of  the persons and entities listed on the Schedule of Purchasers attached
as  Exhibit  A  hereto (hereinafter collectively referred to as "Purchasers" and
each  individually  as  a  "Purchaser").

                                 R E C I T A L S

          A.  Pursuant  to  that  certain Exchangeable Note and Warrant Purchase
Agreement  dated as of July 12, 2001 (the "Series B Agreement") by and among the
Company,  Vsource  CI  (formerly NetCel360.com Ltd.), Vsource Malaysia (formerly
NetCel360  Sdn  Bhd)  and  each  of  the  purchasers listed in Exhibit A thereto
(the"Series  B  Purchasers"),  the Company sold an aggregate principal amount of
$4,251,500  of  Exchangeable  Promissory  Notes  (the  "Series  B  Notes")  and
21,257,501  warrants  (the  "Series  B  Warrants");

          B.  Under  the  terms of the Series B Agreement, the proceeds from the
sale  of  the  Series B Notes and Series B Warrants may be used solely to make a
deposit  to  secure  a stand-by letter of credit (the "Letter of Credit") issued
for  the  benefit of Gateway Manufacturing, Inc., and the principal and interest
accrued  on  the Series B Notes must be repaid upon termination of the Letter of
Credit;

          C.  The Company has asked the Series B Purchasers to, and the Series B
Purchasers  that  are  party  to this Agreement wish to, exchange, in accordance
with  and  subject to the terms and conditions of this Agreement, some or all of
their  Series B Notes for Series B-1 Notes and additional Warrants, the proceeds
of  which may be used for general working capital, and repayment of which is not
required  upon  termination  of  the  Letter  of  Credit;

          D.  The Company has repaid in full, in cash, all principal and accrued
interest  on  the Series B Notes that are not being exchanged for the Series B-1
Notes;  and

          E.  The  Company  wishes  to  be  able  to  sell  Series B-1 Notes and
Warrants  to  Purchasers  other  than Series B Purchasers for cash in accordance
with  and  subject  to  the  terms  and  conditions  of  this  Agreement.

          NOW  THEREFORE,  in  consideration  of  the foregoing recitals and the
mutual  promises  hereinafter  set  forth,  the parties hereto agree as follows:

<PAGE>
     1.   PURCHASE  AND  SALE  OF  SERIES  B-1  NOTES

          1.1.     SALE  AND ISSUANCE OF SERIES B-1 NOTES AND WARRANTS.  Subject
to  the terms and conditions of this Agreement, each Purchaser agrees, severally
and  not  jointly, to purchase, and the Company agrees to sell and issue to each
such  Purchaser,  (i)  that  principal  amount  of  the  Company's  Exchangeable
Promissory  Notes,  in  the form of Exhibit B hereto (individually, a "Note" and
collectively,  the "Series B-1 Notes") and (ii) warrants, in the form of Exhibit
C  hereto  (each,  a "Warrant"), to purchase 5 shares of the common stock of the
Company for each $1.00 in principal amount of Series B-1 Notes purchased by such
Purchaser at the Closing, as set forth opposite such Purchaser's name on Exhibit
A  hereto.  Payment  by  each Purchaser will be made in cash equal to the amount
(the  "Purchase  Price")  set  forth opposite such Purchaser's name on Exhibit A
hereto  or,  in  lieu  of  paying  cash  and at the option of each Purchaser, by
surrendering  to  the Company for extinguishment and cancellation such number or
amount  of  such  Purchaser's  Series  B Notes in respect of which the aggregate
principal  amount  of, and interest accrued on, those Series B Notes is equal to
the  amount  set  forth opposite such Purchaser's name on Exhibit A hereto.  The
surrender  by  a Purchaser for extinguishment and cancellation of Series B Notes
in  respect  of  which  the  aggregate  of  the principal amount of and interest
accrued  on  those Series B Notes is equal to the amount set forth opposite such
Purchaser's  name  on  Exhibit  A  hereto  shall  constitute  full  and complete
discharge  and  satisfaction  of such Purchaser's obligation to pay the Purchase
Price  for  the Series B-1 Notes to be purchased by the Purchaser hereunder, the
relevant  Purchaser  shall  have no further obligation or liability howsoever or
whatsoever in relation to the payment of such Purchase Price and such Series B-1
Notes  shall  be  issued  fully paid and non-assessable.  The aggregate Purchase
Price  for  all Purchasers combined (including any New Purchasers (as defined in
Section  1.3))  shall  be  not  more  than  $4,450,000.

          1.2.     CONSENT.  Each  Purchaser  which  is  a holder of Convertible
Promissory Notes (the "Series A Notes") issued pursuant to that Convertible Note
Purchase  Agreement dated June 25, 2001 (the "Series A Note Purchase Agreement")
hereby consents, for all purposes under the Series A Note Purchase Agreement, to
the execution, delivery and performance by the Company of this Agreement and the
Series  B-1  Notes,  including,  without  limitation, the sale by the Company of
Series  B-1 Notes, the repayment thereof in accordance with the terms hereof and
thereof and the exchange thereof for Series A Notes in accordance with the terms
hereof  and  thereof.

          1.3.     CLOSING;  ADDITIONAL  CLOSINGS.

               (a)     The  purchase  and  sale  of the Series B-1 Notes with an
aggregate  Purchase  Price  of  not less than $1,500,000 shall take place at the
offices  of  Vsource (Asia) Ltd in Hong Kong at 10:00 a.m., on January 31, 2002,
or  at  such later time, not beyond February 7, 2002, as the Company may specify
in  writing  to the Purchasers (which time and date are designated as the "First
Closing").

                                      -2-
<PAGE>
               (b)     For  a period of 120 days following the date of the First
Closing,  the  Company  may,  at  any  time or from time to time, issue and sell
additional Series B-1 Notes of like tenor (other than issuance date and interest
accrual  date)  and  otherwise  on  the same terms as the Series B-1 Notes to be
purchased  under  this Agreement, and Warrants on the same terms as the Warrants
to  be  purchased  under  this Agreement, to one or more individuals or entities
("New  Purchasers")  on the same terms as set forth in this Agreement.  Each New
Purchaser,  if  any, which is not already a Purchaser hereunder, shall execute a
joinder  to this Agreement agreeing to be fully bound by, and subject to, all of
the  covenants,  terms  and  conditions  of this Agreement and shall be deemed a
"Purchaser"  for all purposes hereof.  In connection with any sale of Series B-1
Notes  and  Warrants  to  any  New  Purchaser  pursuant  to this Section 1.3(b),
Exhibit  A  shall  be  automatically amended to reflect the identity of such New
----------
Purchaser  and  such  New Purchaser's purchase of Series B-1 Notes and Warrants.
The date of closing of any purchase of Series B-1 Notes and Warrants pursuant to
this  Section  1.3(b)  shall  be  an  "Additional Closing" and each of the First
Closing  and  each  Additional  Closing  shall  be  a  "Closing"  hereunder.

               (c)     Each  Series B-1 Note is exchangeable for a Series A Note
in  the amount and manner and to the extent provided in the Series B-1 Note.  In
the  event  a Series B-1 Note becomes exchangeable (whether at the election of a
holder  of  a  Series  B-1  Note (a "Series B-1 Holder") or automatically) for a
Series  A  Note,  the Company shall issue to the Series B-1 Holder in respect of
the  Series  B-1  Note  so  exchanged  a  Series  A  Note dated the date of such
exchange.  Each Series B-1 Holder, if any, that is not already a Purchaser under
the Series A Note Purchase Agreement and that exchanges its Series B-1 Notes for
Series  A  Notes shall execute a joinder to the Series A Note Purchase Agreement
agreeing  to  be fully bound by, and subject to, all of the covenants, terms and
conditions  of  the  Series  A  Note  Purchase  Agreement  and shall be deemed a
"Purchaser" for all purposes thereunder, entitled to all of the rights, benefits
and  privileges  thereunder.

               (d)     Subject  to  the  terms  of  this Agreement, at the First
Closing,  the  Company  shall  deliver to each Purchaser a Note in the principal
amount  of  the  applicable  Purchase Price, together with all Warrants to which
such  Purchaser  is  entitled,  against  either,  at  the option of the relevant
Purchaser,  (i)  surrender  of  that amount of principal and accrued interest of
such  Purchaser's  Series B Notes equal to the Purchase Price or (ii) payment of
the  Purchase  Price  therefore  by  check,  or  a wire transfer of funds to the
following  Account:

                    Citibank  N.A.  (Singapore  branch)

                    SWIFT  Code:  CITISGSG

                    Account  No.:  0-815381-017

                    Beneficiary:  Vsource  (CI)  Ltd

,  or  such  other  form  of  payment  as  shall be mutually agreed upon by such
Purchaser  and  the  Company.

                                      -3-
<PAGE>
               (e)     Subject  to  the  terms  of  this  Agreement,  at  each
Additional  Closing,  the  Company shall deliver to each Purchaser a Note in the
principal amount of the applicable Purchase Price, together with all Warrants to
which  such  Purchaser  is  entitled,  against  payment  of  the  Purchase Price
therefore  by  check,  or  a  wire transfer of funds to the Account set forth in
Section  1.3(c),  or such other form of payment as shall be mutually agreed upon
by  such  Purchaser  and  the  Company.

               (f)     Shares  of  the  Preferred  Stock of the Company issuable
upon  conversion of the Series A Notes are herein referred to as the "Series 3-A
Preferred  Stock"  or the "Exchange Shares."  The shares of the Company's Common
Stock  issuable  upon  exercise  of  the  Warrants are referred to herein as the
"Warrant  Shares."   The  shares  of  common  stock,  par  value $0.01 per share
("Common  Stock")  of  the  Company  issuable  upon conversion of the Series 3-A
Preferred Stock are sometimes herein referred to as the "Conversion Shares." The
Series  B-1  Notes,  Warrants, Warrant Shares, Series A Notes, Conversion Shares
and  the  Exchange  Shares  are sometimes herein referred to collectively as the
"Securities."

          1.4.     USE  OF  PROCEEDS.  The  proceeds  of  the sale of Series B-1
Notes  and  Warrants  by  the Company shall be used, at its sole discretion, for
general  corporate  purposes  and  to  pay  any  fees  and  expenses incurred in
connection  with  the  transactions  contemplated  hereby.

          1.5.     EFFECTIVE  DATE.  The parties hereto agree that the effective
date  of  this  Agreement  shall  be  December  28, 2001 (the "Effective Date").
Interest  shall accrue on the Series B-1 Notes from the date of issuance of each
respective  Note;  provided,  that  all  Series B-1 Notes issued in exchange for
Series  B  Notes  shall  begin  accruing  interest  from  the  Effective  Date.

          1.6.     TERMINATION OF SERIES B AGREEMENT.  Each Purchaser which is a
holder  of Series B Notes hereby agrees that upon the issuance of the Series B-1
Notes  in  exchange for such Purchaser's Series B Notes and/or repayment in cash
by  the  Company for the remaining balance of any principal and accrued interest
on  such  Purchaser's  Series  B  Notes  not exchanged for Series B-1 Notes, all
repayment  obligations  of  the Company arising under the Series B Notes and the
Series  B  Agreement  will have been satisfied in full as of the Effective Date.

     2.   GUARANTEE  AND  INDEMNITY.

          2.1.     GUARANTEE.  In  consideration  of  the purchase of the Series
B-1  Notes  and  Warrants  upon  the terms and conditions of this Agreement, the
Guarantors  hereby  jointly  and  severally  and unconditionally and irrevocably
guarantee  as  a  continuing  obligation,  the  due  and punctual payment of the
Obligations  (as defined in Section 2.4 below) in the currency in which the same
is  payable  under  the  terms  of  this  Agreement  and  the  due  and punctual
performance  and  observance  by  the  Company  of  all other obligations of the
Company  contained in this Agreement and the Series B-1 Notes (as defined below)
(collectively,  the  "Guarantee"), and if the Company fails to pay any amount of
the  Obligations when due the Guarantors shall pay such amount to the Purchasers
in  the  required  currency  as  aforesaid  forthwith upon receiving the written
demand  of  the holders of at least a majority of the principal amount of Series
B-1  Notes  then  outstanding  (the  "Majority  Holders").

                                      -4-
<PAGE>
          2.2.     DEMANDS.  Demands  may  be made under the Guarantee from time
to time and may be enforced irrespective of whether any steps or proceedings are
or  will  be  taken against the Company or any other person to recover under the
Series  B-1  Notes or interest accrued thereon or this Agreement or any Warrant.

          2.3.     INDEMNITY.  Without  prejudice  to the guarantee contained in
Section 2.1, the Guarantors hereby jointly and severally and unconditionally and
irrevocably  undertake,  as  a  separate,  primary,  additional  and  continuing
obligation,  to  indemnify  each  Purchaser  against  all  losses,  liabilities,
damages, costs and expenses whatsoever arising out of any failure by the Company
to  make  due and punctual payment of the Obligations or in the due and punctual
performance  and  observance  of all other obligations under this Agreement, the
Series  B-1  Notes  and  the  Warrants.  This  indemnity  shall remain in effect
notwithstanding  that  the Guarantee under Section 2.1 may cease to be valid and
enforceable  against  the  Guarantors  for  any  reason  whatsoever.

          2.4.     OBLIGATIONS.  For  the  purpose  of  this  Agreement,
"Obligations"  means  any  and all of the obligations of the Company (whether or
not  for  the  payment of money, and including any obligation to pay damages for
breach  of contract) which are or may become payable to the Purchasers or any of
them  pursuant  to  this  Agreement,  the  Series  B-1  Notes  or  the Warrants.

          2.5.     CONTINUING  GUARANTEE.  This  Guarantee shall be a continuing
guarantee  and  shall remain in full force and effect until the Obligations have
been  paid  and performed in full, notwithstanding the insolvency or liquidation
or  any  incapacity  or  change  in the constitution or status of the Company or
either  or  both  of  the  Guarantors  or  any  other person or any intermediate
settlement  of  account  or  other  matter  whatsoever.

          2.6.     PROTECTIVE  CLAUSES.  Without  limiting  Section 2.5, neither
the  liability of either of the Guarantors nor the validity or enforceability of
this  Guarantee  shall  be  prejudiced,  affected  or  discharged  by:

               (a)     the  granting of any time or indulgence to the Company or
any  other  person;

               (b)     any  variation  or  modification  of  this Agreement, the
Series  B-1  Notes,  the  Warrants  or  any other document referred to herein or
therein  or  related  thereto;

               (c)     the  invalidity  or unenforceability of any obligation or
liability  of any party under this Agreement, the Series B-1 Notes, the Warrants
or  any  other  documents  referred  to  herein  or  therein or related thereto;

               (d)     any  invalidity  or irregularity in the execution of this
Agreement, the Series B-1 Notes, the Warrants or any other documents referred to
herein  or  therein  or  related  thereto;

                                      -5-
<PAGE>
               (e)     any  lack  of capacity or deficiency in the powers of the
Company,  any  Guarantor or any other person to enter into or perform any of its
obligations  under  this  Agreement,  the  Series B-1 Notes, the Warrants or any
other  documents  referred  to  herein  or  therein  or  related  thereto or any
irregularity  in  the  exercise  thereof  or any lack of authority by any person
purporting to act on behalf of the Company, the Guarantors or such other person;

               (f)     the  insolvency,  bankruptcy  or  liquidation  or  any
incapacity, disability or limitation or any change in the constitution or status
of  the  Company  or  either  or  both  of  the  Guarantors or any other person;

               (g)     any other security document, security interest, guarantee
or  other  security or right or remedy being or becoming held by or available to
any  Purchaser  or  by  any other person or by any of the same being or becoming
wholly  or  partly void, voidable, unenforceable or impaired or by any Purchaser
at  any  time  releasing, refraining from enforcing, varying or in any other way
dealing with any of the same or any power, right or remedy any Purchaser may now
or  hereafter  have  from  or  against  the  Company  or  any  other  person;

               (h)     any  waiver,  exercise, omission to exercise, compromise,
renewal  or release of any rights against the Company or any other person or any
compromise,  arrangement  or  settlement  with  any  of  the  same;  or

               (i)     any  act,  omission, event or circumstance which would or
may  but  for  this  provision  operate  to  prejudice, affect or discharge this
Guarantee  or  the  liability  of  the  Guarantors  hereunder.

     2.7.     TAXES  AND  OTHER  DEDUCTIONS.

               (a)     Funds.  All  payments  to  be  made  by  the  Company  or
                       -----
Guarantors  or  (subject to the option of the Purchasers to deliver their Series
B-1  Notes  in  satisfaction  of the Purchase Price under Section 1.1) any other
person  under  this  Agreement and the Series B-1 Notes shall be made in full in
immediately  available  U.S.  Dollars  without  any  set  off  or  consideration
whatsoever,  free  and  clear  of  any Taxes, deductions or withholdings save as
required  by  law.

                                      -6-
<PAGE>
               (b)     Taxes.  If  at  any  time  the  Company or a Guarantor is
                       -----
required  to  make  any deduction or withholding in respect of Taxes (as defined
below)  or otherwise from any payment due under this Agreement or the Series B-1
Notes,  the  sum  due  from  such  Guarantor in respect of such payment shall be
increased  to  the  extent  necessary  to  ensure that, after the making of such
deduction  or  withholdings,  each  Purchaser  receives on the due date for such
payment  (and  retains, free from and clear of any Taxes or otherwise) a net sum
equal  to  the  sum  which  it  would  have  received  had  no such deduction or
withholding  been  required  to  be made and such Guarantor shall indemnify each
Purchaser  against  any losses or costs incurred by any of them by reason of any
failure of such Guarantor to make any such deduction or withholding or by reason
of  any increased payment not being made on the due date for such payment.  Such
Guarantor  shall promptly deliver to the Purchaser any receipts, certificates or
other  proof  evidencing  the amounts (if any) paid or payable in respect of any
deduction or withholding as aforesaid.  "Taxes" shall mean taxes, charges, fees,
levies or other assessments of any nature, including, without limitation, sales,
value added, use, excise, real or personal property, withholding, stamp or other
taxes,  customs,  duties  or  landing  fees  or other government charges however
designated,  now  or hereafter imposed, collected or assessed by, or payable to,
any  taxing  authority  of any country and shall include interest, penalties and
additions imposed, collected or assessed or payable with respect to such amount.

          2.8.     COSTS,  CHARGES  AND  EXPENSES.  The  Company and each of the
Guarantors  shall  from time to time forthwith on demand of the Majority Holders
pay  to  or  reimburse  each  Purchaser  for  all  reasonable costs, charges and
expenses (including reasonable legal fees for one counsel for all Purchasers and
other  reasonable  fees  on  a  full indemnity basis) reasonably incurred by any
Purchaser  in  connection  with the enforcement of any of their rights or powers
hereunder  or  in  suing  for or seeking to recover any sums due hereunder or in
defending  any  claims  brought  against  them in respect of this Agreement, the
Series  B-1  Notes, the Warrants or this Guarantee and until payment of the same
in  full,  all  such  costs,  charges  and  expenses  shall  be  secured by this
Guarantee.

          2.9.     UNDERTAKINGS.  Each  Guarantor  hereby  undertakes and agrees
jointly  and severally with the Purchasers that the undertakings in this Article
2 shall remain in force throughout the continuance of this Guarantee and so long
as  the  Obligations  or  any  part  thereof  remains  owing  or  outstanding.

          2.10.     UNRESTRICTED  RIGHT  OF  ENFORCEMENT.  The  Guarantee may be
enforced  without  any Purchaser first having made any demand or having recourse
to any other security or rights or taking any other steps or proceedings against
the  Company,  either  or  both of the Guarantors or any other person and may be
enforced  for  any balance due after resorting to any one or more other means of
obtaining payment or discharge of the monies, obligations and liabilities hereby
secured.

                                      -7-
<PAGE>
          2.11.     DISCHARGE  AND  RELEASE.  Notwithstanding  any  discharge,
release  or  settlement  from  time  to  time  between  any  Purchaser  and  the
Guarantors,  if  any  security,  disposition  or  payment granted or made to the
Majority  Holders  or  any  Purchaser  in  respect  of  the  Obligations  by the
Guarantors  or  any  other  person  is  avoided  or  set  aside or ordered to be
surrendered,  paid  away, refunded or reduced by virtue of any provision, law or
enactment  relating  to  bankruptcy,  insolvency,  liquidation,  winding-up,
composition  or arrangement for the time being in force or for any other reason,
the Majority Holders shall be entitled hereafter to enforce this Agreement as if
no  such  discharge,  release  or  settlement  had  occurred.

          2.12.     AMENDMENT.  Any  amendment or waiver of any provision of the
Guarantee  and  any  waiver  of  any  default under this Agreement shall only by
effective  if  made  in  writing  and  signed  by  the  Majority  Holders.

     3.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY

          As used herein, (i) any reference to any event, change or effect being
"material"  with  respect  to  the Company or any Subsidiary (as defined herein)
means  an event, change or effect which is material in relation to the financial
condition,  properties, business, operations, assets or results of operations of
the  Company  and each Subsidiary, taken as a whole, and (ii) the term "Material
Adverse  Effect" on the Company means a material adverse effect on the financial
condition,  properties, business, operations, assets or results of operations of
the  Company and its Subsidiaries, taken as a whole.  As of the date hereof, the
Company  hereby  represents and warrants to, and covenants with, each Purchaser,
except  as  contemplated  by  this  Agreement  or as set forth in the Disclosure
Schedule  (the  "Disclosure  Schedule")  attached  hereto,  as  follows:

                                      -8-
<PAGE>
          3.1.     Organization  and  Standing.  The  Company  has  been  duly
incorporated,  is  validly  existing  and in good standing under the laws of the
State  of  Delaware  and  has  corporate  power  and authority to own, lease and
operate  its  properties  and  to  conduct  its business in the manner presently
conducted  and  to  enter into and perform its obligations under this Agreement,
the  Series  B-1  Notes,  the  Warrants  and  the Certificate of Designation for
designation of the Exchange Shares.  The Company and each of the Subsidiaries is
duly  qualified  as  a  foreign  corporation to transact business and is in good
standing  in  each  other  jurisdiction in which such qualification is required,
whether  by  reason  of  the  ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good standing would
not  result  in  a  Material  Adverse  Effect.  The  Company  is not required to
register as an "investment company" within the meaning of the Investment Company
Act  of 1940.  The Company has made available to the Purchasers a true, complete
and  correct  copy  of the Company's certificate of incorporation and bylaws and
the  constitution  documents  of  each  Subsidiary,  each  as  amended  to  date
(collectively,  the  "Organizational  Documents").  The Organizational Documents
are  in  full  force  and  effect.  The  Certificate of Designation creating the
Series 3-A Preferred Stock of the Company (the "Certificate of Designation") has
been  executed  and  filed  with the Delaware Secretary of State, and is in full
force  and  effect.

                                      -9-
<PAGE>
          3.2.     CAPITALIZATION.  As of the date hereof, the authorized shares
of  capital  stock of the Company are set forth in the Organizational Documents,
and the issued and outstanding shares of capital stock of the Company are as set
forth  in  the Company's Amendment No. 2 to Annual Report on Form 10-KSB for the
fiscal year ended January 31, 2001 (the "Form 10-K"),  Quarterly Reports on form
10-Q  filed  since  the  date  of  the  Form 10-K (the "Form 10-Qs") and Current
Reports  on Form 8-K filed since the date of the Form 10-K (the "Form 8-Ks", and
together  with  the  Form  10-K  and the Form 10-Qs, the "Public Filings").  The
authorized capital also includes shares of Series 3-A Preferred Stock having the
rights,  privileges and preferences set forth in the Certificate of Designation,
none  of which shares have been issued prior to the date hereof.  All issued and
outstanding shares of capital stock of the Company have been duly authorized and
validly  issued  and  are fully paid and non-assessable; none of the outstanding
shares  of  capital  stock  of  the Company have been issued in violation of the
pre-emptive  or  other  similar  rights  of  any  person  or in violation of any
applicable securities laws or regulations.  Except as otherwise described in the
Public  Filings, there are no shares of capital stock or other securities of the
Company  or  any  Subsidiary  (i)  reserved  for  issuance  or  (ii)  subject to
preemptive  rights  or  any outstanding subscriptions, options, warrants, calls,
rights,  convertible  securities  or  other  agreements  or  other  instruments
outstanding  or  in  effect giving any person the right to acquire any shares of
capital  stock  or  other  securities  of  the  Company or any Subsidiary or any
commitments of any character relating to the issued or unissued capital stock or
other  securities  of  the  Company  or  any Subsidiary.  Except as specified on
Schedule  3.2,  on  the  date  hereof  the Company does not have outstanding any
-------------
bonds,  debentures,  notes  or  other  obligations the holders of which have the
right  to  vote  (or  which  are  convertible into or exercisable for securities
having  the  right  to  vote) with the stockholders of Company.  The sale of the
Securities  is  not  subject to any preemptive rights or rights of first refusal
and, when issued and delivered in compliance with the provisions of the Series A
Note  Purchase  Agreement,  the  Series  A  Notes  and/or  the  Certificate  of
Designation,  the Exchange Shares and Conversion Shares will be duly and validly
issued,  fully  paid  and  nonassessable,  and  will  be  free  of  any  liens,
encumbrances  or  restrictions  on  transfer;  provided,  however,  that (a) the
Securities may be subject to restrictions on transfer under state and/or federal
securities laws as set forth herein or as otherwise required by such laws at the
time  a  transfer  is  proposed,  and (b) the Securities may only be assigned in
accordance  with  Section  8.3  hereof.

          3.3.     AUTHORIZATION  OF AGREEMENTS.  This Agreement, the Series B-1
Notes  and the Warrants have been duly authorized, executed and delivered by the
Company,  and  this  Agreement,  each  of  the  Series B-1 Notes and each of the
Warrants  constitute  valid  and  legally  binding  obligations  of the Company,
enforceable  in  accordance with their terms, subject to bankruptcy, insolvency,
fraudulent  transfer,  reorganization,  moratorium  and  other  similar  laws of
general  applicability relating to or affecting creditors' rights and to general
equity  principles.  The Board of Directors of the Company has duly approved the
Certificate of Designation.  Such Certificate of Designation has been duly filed
with  the  Secretary  of  State  of  Delaware  and  is in full force and effect.

                                      -10-
<PAGE>
          3.4.     ABSENCE  OF  DEFAULTS AND CONFLICTS.  None of the Company nor
any  Subsidiary  (as  defined  below)  is  in  violation  of  its organizational
documents.  Except  as  set  forth  on  Schedule  3.4,  the execution, delivery,
                                        -------------
performance  and  consummation  of  this  Agreement and the Series B-1 Notes and
issuance of the Securities by the Company does not and will not, with respect to
the  Company  and  each Subsidiary, directly or indirectly, (with or without the
giving  of notice or the lapse of time or both):  (i) contravene, conflict with,
or  constitute or result in a breach or violation of, or a default under (A) any
provision  of  any of the Organizational Documents or (B) any resolution adopted
by the Board of Directors (or similar governing body) or the stockholders of the
Company  or  any  Subsidiary;  (ii)  contravene, conflict with, or constitute or
result  in a breach or violation of, or a default under, or the acceleration of,
or  the triggering of any payment or other obligations pursuant to, any existing
benefit  plan  maintained by the Company or any Subsidiary or any grant or award
made  under any of the foregoing; (iii) contravene, conflict with, or constitute
or  result in a breach or violation of, or a default under, or the cancellation,
modification  or  termination  of,  or the acceleration of, or the creation of a
lien  on any properties or assets owned or used by the Company or any Subsidiary
pursuant  to, any provision of any contract, indenture, mortgage, deed of trust,
loan  or credit agreement, note, lease or other agreement or instrument to which
it  is  a  party or by which it may be bound, or to which any of its property or
assets  is subject ("Contract"), except for those that would not individually or
in  the aggregate result in a Material Adverse Effect; (iv) contravene, conflict
with,  or  constitute or result in a breach or violation of, any federal, state,
local,  municipal, foreign, international, multinational, or other constitution,
law,  rule,  requirement,  administrative ruling, order, ordinance, principle of
common  law,  code, regulation, statute, treaty or process ("Law") or any award,
decision,  injunction,  judgment,  decree,  settlement,  order, process, ruling,
subpoena  or  verdict  (whether  temporary,  preliminary  or  permanent entered,
issued,  made  or  rendered  by  any  court,  administrative agency, arbitrator,
Governmental  Entity  or  other  tribunal of competent jurisdiction ("Order") or
give  any  foreign,  federal,  state,  local,  municipal,  county  or  other
governmental,  quasi-governmental, administrative or regulatory authority, body,
agency,  court,  tribunal,  commission  or  other  similar entity (including any
branch,  department  or  official  thereof) ("Governmental Entity") or any other
person  the right to challenge any of the transactions contemplated herein or to
exercise  any  remedy  or obtain any relief under, any Law or any Order to which
the Company or any Subsidiary, or any of the assets owned or used by the Company
or  any  Subsidiary,  are subject;  (v) require any filing by the Company or any
Subsidiary  with,  or  approval  or consent or other action by, any Governmental
Entity  or  any  other  person; (vi) contravene, conflict with, or constitute or
result  in  a  breach  or violation of, or a default under, any provision of, or
give  any  Governmental  Entity  the right to revoke, withdraw, suspend, cancel,
terminate  or  modify,  any license or permit that is held by the Company or any
Subsidiary  or  that  otherwise  relates  to  the business of the Company or any
Subsidiary, or any of the assets owned or used by the Company or any Subsidiary;
or  (vii)  cause  any of the assets owned by the Company or any Subsidiary as of
the  date  hereof  to be reassessed or revalued by the taxing authority or other
Governmental  Entity.

                                      -11-
<PAGE>
          3.5.     ABSENCE  OF  PROCEEDINGS.  Except  as described in the Public
Filings,  there  is no action, suit, proceeding, inquiry or investigation before
or brought by any court or governmental agency or body, domestic or foreign, now
pending,  or,  to the knowledge of the Company, threatened, against or affecting
the Company or any Subsidiary which might reasonably be expected individually or
in  the  aggregate  to  result  in  a  Material  Adverse  Effect, or which might
reasonably  be  expected  to  materially  and adversely affect the properties or
assets  of  the  Company  or  any  Subsidiaries  or  the  consummation  of  the
transactions  contemplated  in  this  Agreement,  the  Series  B-1  Notes or the
Certificate  of Designation or the performance by the Company of its obligations
hereunder.  Except  as disclosed in the Public Filings, no event has occurred or
circumstance  exists  that  is  reasonably  likely to give rise to or serve as a
basis  for  the  commencement  of  any  such  action.

          3.6.     INTELLECTUAL  PROPERTY.

               (a)     Intellectual  Property  Assets.  The  term  "Intellectual
                       ------------------------------
          Property  Assets"  includes:

                    (i)     the  names  Vsource,  NetCel360  and  all registered
          trademarks,  service  marks, and applications (collectively, "Marks");

                    (ii)     all  know-how,  trade  secrets,  confidential
          information,  software,  technical  information,  process  technology,
          plans,  drawings, and blue prints (collectively, "Trade Secrets"); and

                    (iii)     all domain names and URL addresses for websites on
          the  internet  or  the  world  wide  web  ("Domain  Names");

          owned,  used, or licensed by the Company or any Subsidiary as licensee
          or  licensor.

               (b)     Intellectual  Property  Necessary  for  the  Company's
                       ------------------------------------------------------
Business.  The  Intellectual  Property  Assets  are  all those necessary for the
--------
operation of the business of the Company and its Subsidiaries as it is currently
conducted.  The  Company  and/or one or more of the Subsidiaries is the owner of
all  right,  title, and interest in and to, or has the right to use, each of the
Intellectual  Property  Assets,  free  and clear of all Liens, and other adverse
claims  and  has  the  right  to  use, without any payment to any third party in
excess  of  $50,000  per  year,  all  of  the  Intellectual  Property  Assets.

               (c)     Trademarks.
                       ----------

                    (i)     To  the knowledge of the Company, the Company and/or
          one  or more of the Subsidiaries is the owner, licensor or licensee of
          all  right,  title, and interest in and to each of the Marks, free and
          clear  of  all  Liens,  and  other  adverse  claims.

                    (ii)     No  Mark  has  been  or  is  now  involved  in  any
          opposition, invalidation, or cancellation and, to the knowledge of the
          Company,  no  such  action  is  threatened  with respect to any of the
          Marks.

                                      -12-
<PAGE>
                    (iii)     To  the  knowledge  of  the  Company,  there is no
          trademark  or  trademark  application  of  any  third  party  which
          potentially  interferes  with  any  of  the  Marks.

                    (iv)     No  Mark  is  infringed or, to the knowledge of the
          Company,  has  been  challenged  or threatened in any way by any other
          Person. To the knowledge of the Company, none of the Marks used by the
          Company  or  any  Subsidiary  infringes  or is alleged to infringe any
          trade  name,  trademark,  or  service  mark  of  any  third  party.

               (d)     Trade  Secrets.  To  the  knowledge  of  the Company, the
                       --------------
Company  and/or  one  or more of the Subsidiaries has good title and an absolute
(but not necessarily exclusive) right to use the Trade Secrets. To the knowledge
of  the  Company,  the  Trade  Secrets  are  not part of the public knowledge or
literature,  and, to the knowledge of the Company, have not been used, divulged,
or  appropriated either for the benefit of any person (other than the Company or
any  Subsidiary  or pursuant to a non-disclosure agreement), or to the detriment
of  the  Company  or  any  Subsidiary. No Trade Secret is subject to any adverse
claim or, to the knowledge of the Company or any Subsidiary, has been challenged
or  threatened  in  any  way.

               (e)     Domain  Names.  The  Company  and/or  one  or  more
                       -------------
Subsidiaries  is  the  owner  of all right, title, and interest in and to, or is
licensed  to use, all of the Domain Names used in the conduct of the business of
the  Company  and  its  Subsidiaries,  free and clear of all Liens.  Such Domain
Names  are  properly  registered  with Network Solutions or such other agency or
company  duly  authorized  by  relevant  Governmental  Entities to maintain such
registry,  and  all  fees  due  in  respect of such registration have been paid.

          3.7.     PRIVATE PLACEMENT.  Neither the Company nor any affiliate (as
defined in Rule 405 under the U.S. Securities Act of 1933, as amended (the "1933
Act"))  thereof  has  (i)  sold,  offered  for  sale, solicited offers to buy or
otherwise  negotiated  in  respect of, any security (as defined in the 1933 Act)
which  is or will be integrated with the sale of the Securities in a manner that
would  require  the  registration  under  the 1933 Act of the Securities or (ii)
engaged  in  any form of general solicitation or general advertising (within the
meaning  of  Rule  502(c)  of  Regulation  D under the 1933 Act) or any directed
selling  efforts  (as  defined  under  the  1933  Act)  in  the United States in
connection  with  the offer and sale of the Securities. Assuming the accuracy of
the  representations  and  warranties  of  each Purchaser contained in Section 3
hereof,  the  offer,  issue,  and  sale  of the Securities:  (a) are and will be
exempt  from  the  registration and prospectus delivery requirements of the 1933
Act;  and neither the Company nor any authorized agent acting on its behalf will
take  any  action hereafter that would cause the loss of such exemption, and (b)
have  been  registered  or  qualified  (or  are  exempt  from  registration  and
qualification)  under the registration, permit, or qualification requirements of
all  applicable  state  securities  laws.

                                      -13-
<PAGE>
          3.8.     SUBSIDIARIES.  Each  subsidiary  of  the Company, meaning any
entity in which the Company, directly or indirectly, beneficially owns more than
50%  of  the equity interest in, or the voting control of, such company (each, a
"Subsidiary"),  is a corporation validly existing and in good standing under the
laws  of  its  jurisdiction  of  incorporation  and has full corporate power and
authority  to own, lease and operate its properties, conduct its business as and
to  the extent now conducted.  All of the outstanding shares of capital stock of
each Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable,  and  are  owned,  beneficially  and of record, by the Company or
Subsidiaries  wholly  owned by the Company free and clear of all liens, charges,
encumbrances,  options,  rights of pre-emption and third party rights whatsoever
(collectively,  "Liens").

          3.9.     LIABILITIES.  Except for potential Liabilities referred to in
the  Public  Filings,  neither  the  Company  nor  any  Subsidiary has any debt,
liability, commitment or obligation of any kind, character or nature whatsoever,
whether  known  or  unknown,  choate or inchoate, secured or unsecured, accrued,
fixed,  absolute,  contingent  or  otherwise,  and  whether due or to become due
("Liability")  (and,  to the knowledge of the Company, there is no basis for any
present or future action against it giving rise to any Liability) except for (i)
Liabilities  or  obligations  reflected  or  reserved  against the balance sheet
contained  in  the  Financial Statements or the Interim Financial Statements (as
defined  herein) and (ii) current Liabilities incurred in the ordinary course of
business  (none  of  which  results  from,  arises out of, relates to, is in the
nature  of,  or  was caused by any breach of contract, breach of warranty, tort,
infringement,  or  violation  of  Law)  since  the  date  thereof.

          3.10.     BROKERS.  All  negotiations  relative  to this Agreement and
the  transactions  contemplated  hereby  have  been  carried  out by the Company
directly without the intervention of any person on behalf of the Company in such
manner  as  to give rise to any valid claim by any person against the Purchasers
(or  any  of  them), the Company or any Subsidiary for a finder's fee, brokerage
commission  or  similar  payment.

          3.11.     SEC  FILINGS.  Except  as  disclosed in Schedule 3.11 to the
                                                            -------------
Disclosure  Schedule,  the Public Filings (including any financial statements or
schedules  included  therein)  and  each  other  filing of the Company under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), made since May 15,
2001 (i) complied with the requirements of the 1933 Act, or the 1934 Act, as the
case  may  be,  in all material respects, and (ii) did not at the time of filing
(or if amended, supplemented or superseded by a filing prior to the date hereof,
on  the  date of that filing) contain any untrue statement of a material fact or
omit  to  state  a  material  fact required to be stated therein or necessary in
order  to  make  the statements therein, in the light of the circumstances under
which  they  were  made, not misleading.   To the Company's knowledge, except as
disclosed  in  Schedule  3.11  to  the  Disclosure  Schedule,  the Company is in
               --------------
compliance  in  all  material respects with (i) the 1933 Act, (ii) the 1934 Act,
and  (iii)  all  applicable rules and regulations of the Securities and Exchange
Commission  under  the  1933  Act  and  the  1934  Act.

                                      -14-
<PAGE>
          3.12.     FINANCIAL  STATEMENTS.  The  restated  audited  consolidated
financial  statements  of  the Company as of and for the years ended January 31,
2000  and  January 31, 2001 and the audited consolidated financial statements of
NetCel360  Holdings  Limited  ("Holdings") as of and for the year ended December
31,  2000  (collectively,  the  "Financial  Statements")  and  the  unaudited
consolidated  financial statements of the Company as of and for the three months
ended  April  30, 2001, July 31, 2001 and October 31, 2001 and of Holdings as of
and  for  the  three  months  ended  March  31, 2001 (collectively, the "Interim
Financial  Statements"),  which have been made available to the Purchasers, have
been  prepared  in  accordance  with US generally accepted accounting principles
("GAAP")  applied on a basis consistent throughout the periods indicated (except
as  may  be indicated in the notes thereto) and, except as set forth in Schedule
                                                                        --------
3.11  to  the  Disclosure  Schedule, present fairly in all material respects the
----
consolidated  financial  condition  and  consolidated  operating  results of the
Company  or  Holdings,  as  the case may be, of the dates and during the periods
indicated  therein in conformance with GAAP, subject, in the case of the Interim
Financial  Statements,  to  normal  year-end  adjustments,  consistent with past
practices.  As  of  their  respective  date,  the  Financial  Statements did not
contain any untrue statement of a material fact or omit to state a material fact
required  to be stated therein or necessary to make the statements made therein,
in  light  of  the  circumstances  under  which  they were made, not misleading.
Except  as  set  forth  in  the  Financial  Statements,  the  Interim  Financial
Statements,  the  Public  Filings, or arising in the ordinary course of business
since  April  1,  2001,  as  of  the  date  hereof  none  of the Company nor any
Subsidiary  has  (A) incurred any material liabilities of any nature (matured or
unmatured,  fixed  or  contingent)  or (B) made any material disposal of assets,
suffered  any loss or material damage of any assets, waived any valuable rights,
made  any  material  change  in  any material contract to which it is a party or
declared  or  paid  any  dividends.

          3.13.     NON-COMPETITION  AGREEMENTS.  Neither the Company nor any of
its Subsidiaries is a party to any non-competition or other agreement or subject
to  any  duty  which  prohibits  or  limits  the  ability  of the Company or any
Subsidiary  (i)  to  engage  in  any  line of business, (ii) to compete with any
person,  (iii)  to  carry  on  or expand the nature or geographical scope of the
business  of  the  Company  or  such Subsidiary anywhere in the world or (iv) to
disclose  any  confidential  information in the possession of the Company or any
Subsidiary (any not otherwise generally available to the public), other than, in
the  case  of  (iv)  only,  any  contract  for  the sale or purchase of goods or
services  or  any  non-disclosure  agreement entered into in connection with the
possible  or actual sale or purchase of goods or services in the ordinary course
of  business  that  does  not  meet  any other of the criteria set forth in this
Section  3.13.

          3.14.     CERTAIN  PAYMENTS.  Since  their  incorporation  or
organization,  neither  the  Company  nor  any  Subsidiary  has,  nor  has  any
representative  of Company or any Subsidiary, or to the knowledge of the Company
or any other person associated with or acting for or on behalf of the Company or
any  Subsidiary,  directly or indirectly (a) made any contribution, gift, bribe,
rebate,  payoff,  influence  payment,  kickback, or other payment to any person,
private  or  public, regardless of form, whether in money, property, or services
(i)  to  obtain  favorable  treatment  in  securing  business,  (ii)  to pay for
favorable treatment for business secured, or (iii) to obtain special concessions
or for special concessions already obtained, for or in respect of the Company or
any  Subsidiary  or (b) established or maintained any fund or asset that has not
been  recorded  in  the  books  and  records  of  the Company or any Subsidiary.

                                      -15-
<PAGE>
          3.15.     NO  OTHER  REPRESENTATIONS.  Notwithstanding anything to the
contrary  contained  in  this Agreement, it is the explicit intent of each party
hereto that the Company is not making any representation or warranty whatsoever,
express  or  implied,  except those representations, and warranties contained in
this  Article  3.

     4.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  PURCHASERS

Each Purchaser, severally but not jointly, hereby represents and warrants to the
Company  as  follows:

          4.1.     LEGAL  POWER.  It has the requisite legal power to enter into
this  Agreement, to purchase the Series B-1 Notes hereunder and to carry out and
perform  its  obligations  under  the  terms  of  this  Agreement.

          4.2.     DUE  EXECUTION.  This  Agreement  have  been duly authorized,
executed  and  delivered  by  it,  and,  upon  due execution and delivery by the
Company  and  such  Purchaser,  this  Agreement  and  will  be valid and binding
agreements of it, subject to laws of general application relating to bankruptcy,
insolvency  and  the  relief  of  debtors  and  subject  to  the availability of
equitable  remedies.

          4.3.     NO  CONFLICTS; NO CONSENTS REQUIRED.  The execution, delivery
and performance of and compliance with this Agreement by such Purchaser will not
result  in  any  violation  of  any  term  of  any material mortgage, indenture,
contract,  agreement  or  other  instrument  or any judgment, decree or order to
which such Purchaser is a party or subject, or be in conflict with or constitute
a  default  under  any  such  term.  All  consents,  approvals,  orders,  or
authorizations  of or registrations, qualifications, designations, declarations,
or  filings  with,  any governmental authority or other third party, required on
the part of the Purchaser in connection with the valid execution and delivery of
this Agreement, the purchase of the Securities, or the consummation of any other
transaction  contemplated hereby have been obtained, or will be effective at the
Closing, except for notices required or permitted to be filed with certain state
and  federal  securities  commissions  after  the  Closing.

          4.4.     INVESTMENT  REPRESENTATIONS.

               (a)     It  is  acquiring the Securities for its own account, not
as  nominee  or  agent,  for investment and not with a view to, or for resale in
connection  with, any distribution or public offering thereof within the meaning
of  the  1933  Act.

               (b)     It  understands  that  (i)  the  Securities have not been
registered  under the 1933 Act by reason of a specific exemption therefrom, that
it  may  be necessary to hold such Securities indefinitely, and, therefore, that
it  may  be necessary to bear the economic risk of such investment indefinitely,
unless  a  subsequent disposition thereof is registered under the 1933 Act or is
exempt  from  such  registration;  (ii) each certificate representing any of the
Securities  will  be  endorsed  with  a  legend similar to the following legend:

     "THE  SECURITIES  EVIDENCED  BY  THIS  CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER  THE  SECURITIES  ACT  OF  1933,  AS AMENDED, (THE "1933 ACT") OR THE
     SECURITIES  LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR

                                      -16-
<PAGE>
     HYPOTHECATED  EXCEPT  PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
     THE  1933  ACT  COVERING  SUCH SECURITIES AND IN COMPLIANCE WITH SUCH STATE
     LAWS  OR  IF  THE  COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF
     THESE  SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH
     SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
     AND  PROSPECTUS  DELIVERY  REQUIREMENTS OF THE 1933 ACT AND SUCH APPLICABLE
     STATE  LAWS."

and  (iii)  the  Company  will  instruct  any transfer agent not to register the
transfer  of  any  of  the  Securities  unless  the  conditions specified in the
foregoing  legend  are  satisfied;  provided,  however,  that no such opinion of
counsel  shall be necessary if the sale, transfer or assignment is made pursuant
to  Securities  and  Exchange  Commission  ("SEC")  Rule  144 and such Purchaser
provides  the  Company  with evidence reasonably satisfactory to the Company and
its  counsel  that  the  proposed transaction satisfies the requirements of Rule
144.  The  Company  agrees to remove the foregoing legend from any securities if
the  requirements of SEC Rule 144(k) (or any successor rule or regulation) apply
with  respect  to  such  securities and the Company and its counsel are provided
with  reasonably  satisfactory  evidence  that  the  requirements of Rule 144(k)
apply.

                                      -17-
<PAGE>
               (c)     It  is  an  investor  in  securities  of companies in the
development  stage  and  acknowledges  that it can bear the economic risk of its
investment  and  has  such  knowledge  and  experience  in financial or business
matters  that it is capable of evaluating the merits and risks of the investment
in  the  Securities.

               (d)     It  has  reviewed  this  Agreement,  the  Series  A  Note
Purchase  Agreement and the Certificate of Designation and all the schedules and
exhibits to such documents carefully and has conducted such investigation of the
Company  as  it has deemed appropriate and has had the questions it has asked of
the  Company  answered  to  its  satisfaction.

               (e)     It  has  not  been  offered the Securities by any form of
advertisement,  article,  notice  or  other  communication  published  in  any
newspaper,  magazine  or similar media or broadcast over television or radio, or
any  seminar  or  meeting  whose  attendees  have  been  invited  by such media.

               (f)     It  is an (i) "accredited investor" within the meaning of
SEC  Rule  501  of  Regulation  D,  as  presently in effect; or (ii) not a "U.S.
person" within the meaning of SEC Rule 902 and is acquiring the Securities in an
"offshore  transaction"  as  defined  in  SEC  Rule  902.

               (g)     If  Purchaser  is  a  corporation,  partnership, trust or
other  entity,  (i)  it was not formed for the specific purpose of acquiring the
Securities  offered  hereunder;  or  (ii)  100% of such Purchaser is owned by an
entity for which all of the representations and warranties contained in Sections
4.3  and  4.4  would  be  accurate  if  such  entity were a Purchaser hereunder.

               (h)     Its  principal  address  is  as  set  forth  on Exhibit A
hereto,  and it does not reside in any state of the United States other than the
state  specified  in  its  address  on  Exhibit  A,  if  at  all.

     5.   CONDITIONS  TO  CLOSING

          5.1.     CONDITIONS  TO  OBLIGATIONS OF THE PURCHASERS AT THE CLOSING.
Each  Purchaser's  obligation to purchase the Series B-1 Notes at the Closing is
subject  to the fulfillment, at or prior to the Closing, of all of the following
conditions,  any  of  which  may  be  waived  by  such  Purchaser:

               (a)     Representations  and  Warranties;  Performance  of
                       --------------------------------------------------
Obligations.  The  representations and warranties made by the Company in Section
-----------
3  hereof  shall be true and correct in all material respects on the date of the
Closing,  with  the  same force and effect as if they had been made on and as of
said  date;  and  the  Company  shall  have  performed  and complied with in all
material respects all obligations and conditions herein required to be performed
or  complied  with  by  it  on  or  prior  to  the  Closing.

               (b)     Proceedings  and  Documents.  All  corporate  and  other
                       ---------------------------
proceedings in connection with the transactions contemplated at the Closing, and
all  documents and instruments incident to such transactions shall be reasonably
satisfactory  in substance and form to the Purchasers' counsel, which shall have
received  all  such  counterpart  originals or certified or other copies of such
documents  as  it  may  reasonably  request.

                                      -18-
<PAGE>
               (c)     Qualifications;  Legal  Investment.  All  authorizations,
                       ----------------------------------
approvals,  or permits, if any, of any governmental authority or regulatory body
of  the  United  States or of any state that are required in connection with and
prior  to  the  lawful  sale  and  issuance  of  the Securities pursuant to this
Agreement  and all authorizations, approvals and permits, if any, needed by such
Purchaser  to purchase the Securities shall have been duly obtained and shall be
effective  on and as of the Closing.  No stop order or other order enjoining the
sale  of  the  Securities  shall  have  been  issued and no proceedings for such
purpose  shall be pending or, to the knowledge of the Company, threatened by the
SEC,  the  California  Commissioner  of  Corporations, the Delaware Secretary of
State  or  a  similar  official of any other state having jurisdiction over this
transaction.  At  the  time  of  the  Closing,  the  sale  and  issuance  of the
Securities  shall be legally permitted by all laws and regulations to which each
Purchaser  and  the  Company  are  subject.

               (d)     Payment  of Purchase Price.  The aggregate Purchase Price
                       --------------------------
for  all  Series B-1 Notes purchased on or before the date of the Closing by all
Purchasers  at  the  Closing  shall  equal  or  exceed  $1,500,000.

               (e)     Opinion  of Company Counsel.  The Company's legal counsel
                       ---------------------------
shall  have  delivered  an  opinion  to  the  Purchasers  addressing  the issues
customarily  addressed  in  transactions  of the nature of those contemplated in
this Agreement and which shall be reasonably satisfactory in form and content to
counsel  for  the  Purchasers.

          5.2.     CONDITIONS TO OBLIGATIONS OF THE COMPANY AT THE CLOSING.  The
Company's obligation to issue and sell the Series B-1 Notes under this Agreement
to a Purchaser is subject to the fulfillment, on or prior to the Closing, of the
following  conditions  as  to  such Purchaser, any of which may be waived by the
Company:

               (a)     Representations  and  Warranties,  Performance  of
                       --------------------------------------------------
Obligations.  The  representations  and  warranties  made  by  such Purchaser in
-----------
Section  4 hereof shall be true and correct at the date of the Closing, with the
same  force  and  effect  as if they had been made on and as of said date.  Such
Purchaser  shall  have performed and complied with all agreements and conditions
herein required to be performed or complied with by it on or before the Closing.

               (b)     Qualifications,  Legal  Investment.  All  authorizations,
                       ----------------------------------
approvals,  or permits, if any, of any governmental authority or regulatory body
of  the  United  States or of any state that are required in connection with the
lawful sale and issuance of the Securities pursuant to this Agreement shall have
been  duly  obtained  and  shall be effective on and as of the Closing.  No stop
order or other order enjoining the sale of the Securities shall have been issued
and no proceedings for such purpose shall be pending or, to the knowledge of the
Company, threatened by the SEC, the California Commissioner of Corporations, the
Delaware  Secretary  of  State  or any similar officer of any other state having
jurisdiction  over  this  transaction.  At the time of the Closing, the sale and
issuance  of  the  Securities  shall  be  legally  permitted  by  all  laws  and
regulations  to  which  such  Purchaser  and  the  Company  are  subject.

               (c)     Payment  of  Purchase  Price.  Each  Purchaser shall have
                       ----------------------------
delivered  the  Purchase  Price  for  the  Series  B-1  Notes  purchased  by it.

                                      -19-
<PAGE>
     6.     COVENANTS

          6.1.     COVENANTS  OF  THE  COMPANY.  The  Company and each Guarantor
covenants  with  each  Purchaser,  so long as Series B-1 Notes with an aggregate
principal amount of at least 50% of the principal amount of the Series B-1 Notes
issued  at  the  Closing  are  outstanding,  that:

               (a)     Stamp  Tax.  The  Company and the Guarantors will pay (1)
                       ----------
any  stamp,  issue,  registration, documentary or other similar taxes and duties
including  interest and penalties, payable on or in connection with the issuance
of  the Series B-1 Notes, the Warrants or the Guarantee, the creation, issue and
offering  of the Securities, if any, received in the exchange or upon conversion
of  the  Series B-1 Notes, the Series A Notes or the Series 3-A Preferred Stock,
or  the  execution  or  delivery of this Agreement, the Warrants or the Series A
Notes;  and  (2)  in  addition  to  any  amount  payable  by  the Company or the
Guarantors  under  this  Agreement,  any  value  added,  turnover or similar tax
payable  in  respect  of  that  amount.

               (b)     Notification  of  Defaults.  Each  of the Company and the
                       --------------------------
Guarantors  will  notify  the  Purchasers in writing of any Event of Default (as
defined  in  Section  7.1)  forthwith  upon  the  occurrence  thereof.

               (c)     Consents.  Each  of  the  Company and the Guarantors will
                       --------
obtain  and  promptly  renew  from  time to time and thereafter maintain in full
force  and  effect,  and  will comply with and upon the Purchasers' request will
promptly furnish certified copies to the Purchasers of, all such authorizations,
approvals,  consents,  licenses  and  exemptions  as  may  be required under any
applicable  law or regulation to enable it to perform its obligations under this
Agreement  or  required  for  the  validity or enforceability of this Agreement.

               (d)     Pari  Passu  Ranking.  Each  of  the  Company  and  the
                       --------------------
Guarantors  undertakes  that  its obligations hereunder and under the Series B-1
Notes  do  and  will at all times rank at least pari passu with all of its other
present  and  future unsecured obligations save for any obligations preferred by
law.

               (e)     Disposals.  Each  of  the Company and the Guarantors will
                       ---------
not  and  will  procure  that  no  other  Subsidiary  will,  either  in a single
transaction  or  in  a series of transactions whether related or not and whether
voluntarily  or involuntarily, sell, transfer, lease or otherwise dispose of all
or  any  substantial  part  of  its  assets  or  revenues  except for any of the
following  types  of  disposals provided such disposal does not adversely affect
the  ability  of  the Company or the Guarantors to perform its obligations under
this  Agreement:

                    (i)     disposals made with the prior written consent of the
          Majority  Holders;

                    (ii)     disposals  of  cash  raised  or  borrowed  for  the
          purposes  for  which  such  cash  was  raised  or  borrowed;

                    (iii)     disposals  of  assets in exchange for other assets
          comparable  as  to  type  and  value;

                                      -20-
<PAGE>
                    (iv)     disposals  of  any  of  its assets on terms whereby
          such  asset is leased to or re-acquired by the Company or Guarantor or
          any  other  Subsidiary  in  an  amount  not  to  exceed  $5,000,000;

                    (v)     any  distribution  of  the  surplus  assets  to  the
          Company  or  either  Guarantor  or  any Subsidiary in a liquidation or
          winding-up  not  involving  insolvency;

                    (vi)     the  application  of  the  proceeds  of an issue of
          securities  (whether  equity  or  debt) for the purposes stated in the
          prospectus  or  other  offering  document  relating  to that issue; or

                    (vii)     sales  of  assets  pursuant  to sale and leaseback
          transactions  in  an  aggregate  amount  not  to  exceed  $5,000,000.

               (f)     Mergers.
                       -------

                    (i)     None  of  the Company or the Guarantors will without
          the  prior  written  consent  of  the  Majority Holders enter into any
          merger  or  consolidation  with  any  entity.

                    (ii)     None  of  the  Company  or the Guarantors will, and
          will  procure  that  no  Subsidiary  will,  without  the prior written
          consent  of  the  Majority  Holders, acquire any assets or business or
          acquire  or make any investment if such assets, business or investment
          is  substantial  in relation to the Company and its Subsidiaries taken
          as  a  whole.

               (g)     Maintenance  of  status  and  franchises.
                       ----------------------------------------

                    (i)     Each  of  the Company and the Guarantors will do all
          such  things  as  are necessary to maintain its corporate existence in
          good standing and to conduct its business in compliance with all laws,
          regulations,  authorizations, agreements and obligations applicable to
          it  and  pay  all  taxes  imposed  on  it  when  due.

                    (ii)     Each  of  the  Company  and the Guarantors will and
          will  procure  that each Subsidiary will, ensure that it has the right
          and  is duly qualified to conduct its business as it is or is intended
          as  at the date hereof to be conducted in all applicable jurisdictions
          and  will  obtain and maintain all franchises and rights necessary for
          the  conduct  of  its  business.

               (h)     Constitutional  Documents.  Each  of  the Company and the
                       -------------------------
Guarantors  shall  procure  that  no  amendment  or  supplement is made to their
respective  certificate  of incorporation, by-laws, memorandum of association or
articles  of  association, if any, which would have a material adverse effect on
the  Purchasers'  interests  hereunder  without the prior written consent of the
Majority  Holders  such  consent  not  to  be  unreasonably withheld or delayed.

                                      -21-
<PAGE>
               (i)     Share Capital.  Except upon conversion or exchange of any
                       -------------
class  of  convertible  or  exchangeable  securities  or  as  set  forth  in the
Certificate  of  Designation  or  the  Warrants,  each  of  the  Company and the
Guarantors  will  not without the prior written consent of the Majority Holders,
purchase  or  redeem  any  of  their  respective  issued  shares.

               (j)     Dividends.  Each  of  the Company and the Guarantors will
                       ---------
not  and will procure that no Subsidiary will, without the prior written consent
of the Majority Holders, pay any cash dividend or make any other distribution of
cash  to their respective shareholders other than dividends and distributions by
Subsidiaries  to  the  Company.

               (k)     Indebtedness.  None  of  the  Company or any Guarantor or
                       ------------
any  Subsidiary will incur or guarantee any indebtedness exceeding US$15,000,000
in  the  aggregate  without  the  prior written consent of the Majority Holders,
other  than  pursuant  to  Section  1.3(b) hereof or, subject to the limitations
contained  in  Section  6.1(e)(vii),  in  connection  with  customary  sale  and
leaseback  transactions.

               (l)     Lending.  Each of the Company and the Guarantors will not
                       -------
and  will  procure  that  no  Subsidiary  will make or grant any loan or advance
except  as  may  be  necessary  in  the  ordinary  course  of  its  business.

               (m)     Taxation.  All  payments  of  interest  in respect of the
                       --------
Series  B-1 Notes and the Warrants will be made without withholding or deduction
of  or  on  account  of  any  present  or  future  taxes, duties, assessments or
governmental  charges  of  whatever  nature  imposed  or levied by any authority
unless  the  withholding  or  deduction  of  such  taxes, duties, assessments or
governmental  charges  is required by law.  The Company will pay such additional
amounts  as  may  be  necessary  in  order  that the net amounts received by the
Purchasers  after  such  withholding  or  deduction  shall  equal the respective
amounts  receivable  in  respect of the Series B-1 Notes and the Warrants in the
absence  of  such  withholding  or  deduction.

          6.2.     LEGAL  FEES.  Promptly upon receipt of invoices therefor, the
Company  shall  (a)  pay  one  counsel  for the Purchasers up to $10,000 for the
actual  legal  fees  and  costs  incurred  in  negotiating the terms hereof, the
preparation of this Agreement and the other agreements and instruments delivered
pursuant  hereto,  and  consummating  the  transactions  contemplated  by  this
Agreement.

          6.3.     REGISTRATION  RIGHTS.  Each  holder of shares of Common Stock
received  upon  exercise of the Warrants shall have the same registration rights
as  holders of shares of Common Stock received upon conversion of the Series 3-A
Preferred  Stock  as  set  forth  as  Exhibit  B  of  the Series A Note Purchase
Agreement.

     7.     EVENTS  OF  DEFAULT

          7.1.     DEFAULT.  Upon  the  occurrence of any Event of Default, each
Note  then  outstanding  shall forthwith be immediately due and payable, without
presentment,  demand,  protest or any other notice of any kind, all of which are
hereby  expressly  waived,  unless the Majority Holders otherwise determine, and
the  Purchasers  may  exercise any and all rights and remedies available to them
under  this  Agreement  or  the  Series  B-1  Notes  or  as  provided  by  law.

                                      -22-
<PAGE>
An  "Event of Default" shall mean the occurrence of any of the following events:

                                      -23-
<PAGE>
               (a)     Any  proceeding  shall  be  commenced  by  or against the
Company  or  either  Guarantor  under  any bankruptcy or insolvency laws, or the
Company  or a Guarantor shall take any action to authorize any of the foregoing;
provided  that  if  such  proceeding  is  not  instituted by or on behalf of the
Company  (or acquiesced by it) there shall be an "Event of Default" only if such
proceeding  shall  remain  unstayed  for  60  days;

               (b)     Any  law, rule or regulation of any jurisdiction shall be
enacted  or promulgated that shall have a material adverse affect on the ability
of  the  Company to perform any of its obligations hereunder or under the Series
B-1  Notes,  including,  without  limitation,  any  moratorium  or similar laws;

               (c)     This Agreement or any of the Series B-1 Notes or Warrants
ceases  to  be  the  legal,  valid  and binding obligation of the Company or the
Guarantors  enforceable  in  accordance  with  its  terms;  and

               (d)     if  any  governmental  authority  or  agency  of  any
jurisdiction  condemns,  seizes, compulsorily purchases or expropriates all or a
substantial  part  of the assets of the Company and its Subsidiaries, taken as a
whole, or places any material restriction on a material portion of the assets of
such  Company  and  its  Subsidiaries,  taken  as  a  whole  whether  by  way of
cancellation  or revocation of, or the imposition of conditions on, any licenses
of  such  companies,  or  otherwise  howsoever.

          7.2.     OTHER  EVENTS.  Without  implication  that the contrary would
otherwise be true, the Purchasers retain all right to pursue any cause of action
(including  breach  of  contract)  in  the  event  that:

               (a)     there  is  a  material  breach  of  this  Agreement,  the
Certificate of Designation for the Series 3-A Preferred Stock or any Note by the
Company  or  a  Guarantor;  or

               (b)     Any  representation or warranty made or deemed to be made
or  repeated  by or in respect of the Company or either Guarantor in or pursuant
to  this  Agreement  is  or  proves  to have been incorrect or misleading in any
material  respect.

     8.   MISCELLANEOUS

          8.1.     GOVERNING  LAW  AND  JURISDICTION.  This  Agreement  shall be
governed  by  and  construed  under  the  laws of the State of Delaware.  If any
Delaware  law or laws shall require or permit the application of the laws of any
other  jurisdiction  to  this  Agreement,  such  Delaware  law  or laws shall be
disregarded  with  the  effect  that the remaining laws of the State of Delaware
shall  nonetheless  be  applied.

          8.2.     SURVIVAL  AND  DISCLOSURE  SCHEDULE.  The  representations,
warranties,  covenants,  and  agreements  made  herein  shall  survive  any
investigation  made  by  any  party  hereto  and the closing of the transactions
contemplated  hereby and shall in no way be affected by any investigation of the
subject  matter  thereof  made by or on behalf of the Purchasers or the Company.

                                      -24-
<PAGE>
          8.3.     SUCCESSORS  AND  ASSIGNS.  Except  as  otherwise  expressly
provided  herein,  the  provisions  hereof shall inure to the benefit of, and be
binding  upon,  the successors, assigns, heirs, executors, and administrators of
the  parties  hereto.  Each  Purchaser  shall be entitled to assign, transfer or
participate  all  or  any  portion  of  the  Securities;  provided that (1) such
transfers  comply  with  all  applicable law, (2) no such transfer is made to an
entity  which  the Board of Directors of the Company determines in good faith is
then  a  competitor of the Company (unless all common and preferred stock in the
Company  is  being  transferred  to  such  competitor  in such transaction), (3)
transfers of Securities may not be made in amounts of less than $500,000 and (4)
prior  to any assignment, each assignee shall execute and deliver to the Company
a  joinder  to this Agreement agreeing to be fully bound by, and subject to, all
of  the  covenants,  terms  and  conditions  of  this  Agreement.

          8.4.     ENTIRE  AGREEMENT.  This  Agreement, the Exhibits hereto, and
the  other  documents  delivered  pursuant hereto constitute the full and entire
understanding and agreement among the parties with regard to the subjects hereof
and  no  party  shall be liable or bound to any other party in any manner by any
covenants  or  agreements  except  as  specifically set forth herein or therein.
Nothing  in  this  Agreement, express or implied, is intended to confer upon any
party,  other  than  the  parties  hereto  and  their  respective successors and
assigns,  any rights, remedies, obligations or liabilities under or by reason of
this  Agreement,  except  as  expressly  provided  herein.

          8.5.     SEVERABILITY.  In  case any provision of this Agreement shall
be  invalid,  illegal, or unenforceable, it shall, to the extent practicable, be
modified  so  as to make it valid, legal and enforceable and to retain as nearly
as  practicable  the  intent  of  the  parties;  and the validity, legality, and
enforceability  of  the remaining provisions shall not in any way be affected or
impaired  thereby.

          8.6.     AMENDMENT  AND  WAIVER.  Any  term  of  this Agreement may be
amended  and  the observance of any term of this Agreement may be waived (either
generally  or in a particular instance and either for a specified period of time
or indefinitely), with the written consent of the Company and the holders of 75%
of  the  aggregate  principal  amount  of the Series B-1 Notes then outstanding;
provided, that no such amendment or waiver shall reduce the amount of the Series
B-1  Notes  the  holders  of  which  are  required  to  consent to any waiver or
supplemental  agreement, without the consent of the holders of all of the Series
B-1  Notes;  provided,  further,  however,  that  any amendment, modification or
waiver  that  would  change the interest rate, maturity date, requirement of pro
rata  payment or exchange privilege, shall not be effective as to such Purchaser
without  such  Purchaser's  prior  written  consent.  Any  amendment  or  waiver
effected  in accordance with this paragraph shall be binding upon each holder of
any  securities  purchased  under  this  Agreement at the time outstanding, each
future holder of all such securities, and the Company.  Upon the effectuation of
each  such  amendment  or waiver, the Company shall promptly give written notice
thereof  to  the  record  holders  of  the  Securities  who  have not previously
consented  thereto  in  writing.

                                      -25-
<PAGE>
          8.7.     DELAYS  OR  OMISSIONS.  No  delay or omission to exercise any
right, power, or remedy accruing to any party hereto or any subsequent holder of
any  Securities  upon  any  breach,  default or noncompliance of any other party
under  this Agreement or under the Certificate of Incorporation or Bylaws of the
Company shall impair any such right, power, or remedy, nor shall it be construed
to be a waiver of any such breach, default or noncompliance, or any acquiescence
therein,  or  of  any  similar  breach,  default  or  noncompliance  thereafter
occurring.  Any waiver, permit, consent, or approval of any kind or character on
any  party's  part  of  or  to  any  breach, default or noncompliance under this
Agreement  or under the Certificate of Incorporation or Bylaws of the Company or
any waiver on any party's part of any provisions or conditions of this Agreement
must  be  in  writing and shall be effective only to the extent specifically set
forth  in  such  writing;  and  all  remedies,  either under this Agreement, the
Certificate  of  Incorporation  or Bylaws, any law, or otherwise afforded to any
party,  shall  be  cumulative  and  not  alternative.

          8.8.     NOTICES,  ETC.  All notices and other communications required
or permitted hereunder shall be effective if in writing and delivered personally
or  sent by telecopier, nationally recognized overnight courier or registered or
certified  mail,  return  receipt  requested,  postage  prepaid,  addressed:

     If   to  a Purchaser:    at  such  Purchaser's  address  as  set  forth  on
                              Exhibit  A  attached  hereto,  or  at  such  other
                              address  as such Purchaser shall have furnished to
                              the  Company  in  writing,

     If to the Company, to:   Vsource,  Inc.
                              16875  West  Bernardo  Drive
                              Suite  250
                              San  Diego,  CA  92127
                              USA
                              Attention:  Chief  Financial  Officer
                              Facsimile:     (858)  618-5904

                              with a copy to:  Vsource (Asia) Ltd
                              Unit  501,  AXA  Centre
                              151  Gloucester  Road
                              Wanchai,  Hong  Kong
                              Attention:  General  Counsel
                              Facsimile:     (852)  2523-1344

          Unless  otherwise  specified  herein,  such  notices  or  other
communications shall be deemed effective (a) on the date delivered, if delivered
personally,  (b)  two  business  days  after  being  sent, if sent by nationally
recognized  overnight courier, (c) one business day after being sent, if sent by
telecopier  with  confirmation  of  good transmission and receipt, and (d) three
business days after being sent, if sent by registered or certified mail, postage
prepaid,  return  receipt  requested.  Each  of  the  parties  herewith shall be
entitled to specify another address by giving notice as aforesaid to each of the
other  parties  hereto.

                                      -26-
<PAGE>
          8.9.     TITLES  AND  SUBTITLES, NUMBER AND GENDER.  The titles of the
paragraphs  and subparagraphs of this Agreement are for convenience of reference
only  and  are  not to be considered in construing this Agreement.  Whenever the
context requires, the plural shall include the singular and the reverse and each
gender  shall  include  the  others.

          8.10.     COUNTERPARTS.  This  Agreement may be executed in any number
of  counterparts,  each  of  which shall be deemed an original, but all of which
together  shall  constitute  one  instrument.

                                      -27-
<PAGE>
Executed  as  of  the  date  first  set  forth  above.

                                 VSOURCE,  INC.

                                 By:       /S/  PHILLIP  E.  KELLY
                                           -------------------------------------
                                           Name:  Phillip  E.  Kelly
                                           Title:  Chief  Executive  Officer

                                 GUARANTORS

                                 VSOURCE  (CI)  LTD

                                 By:       /S/  PHILLIP  E.  KELLY
                                           -------------------------------------
                                           Name:  Phillip  E.  Kelly
                                           Title:  Chief  Executive  Officer

                                 VSOURCE  (MALAYSIA)  SDN  BHD

                                 By:       /S/  PHILLIP  E.  KELLY
                                           -------------------------------------
                                           Name:  Phillip  E.  Kelly
                                           Title:  Chief  Executive  Officer

                                      -28-
<PAGE>
This is page          to the Exchangeable Note and Warrant Purchase Agreement to
which  Vsource,  Inc.,  a Delaware corporation, the Guarantors and the Purchaser
set  forth  below  are  parties:

PURCHASER:

__________________________
Phillip  E.  Kelly
5th  Floor,  AXA  Centre
151  Gloucester  Road
Wanchai,  Hong  Kong

Purchase  Price:  $402,629          Dated:   1/28/2002
                  --------                  ----------

<PAGE>
This is page          to the Exchangeable Note and Warrant Purchase Agreement to
which  Vsource,  Inc.,  a Delaware corporation, the Guarantors and the Purchaser
set  forth  below  are  parties:

PURCHASER:

_________________________________
Kumi  Hui
Flat  9A,  Manly  Mansion
69B  Robinson  Road,  Mid-Levels
Hong  Kong

Purchase  Price:  $26,843          Dated:    1/28/2002
                  -------                   -----------

<PAGE>
This is page          to the Exchangeable Note and Warrant Purchase Agreement to
which  Vsource,  Inc.,  a Delaware corporation, the Guarantors and the Purchaser
set  forth  below  are  parties:

PURCHASER:

_______________________________
Jack  Tai-On  Poon
c/o  P.O.  Box  28843
Gloucester  Road  Post  Office
Wanchai,  Hong  Kong

Purchase  Price:  $53,684                    Dated:    1/28/2002
                  -------                            -----------

<PAGE>
This is page          to the Exchangeable Note and Warrant Purchase Agreement to
which  Vsource,  Inc.,  a Delaware corporation, the Guarantors and the Purchaser
set  forth  below  are  parties:

PURCHASER:

______________________________
John  Gerard  Cantillon
10  Jalan  Marie  Pitchay
Tanjong  Bungah
Hillside,  Penang  11200
Malaysia

Purchase  Price:  $268,420                    Dated:    1/28/2002
                   -------                             -----------

<PAGE>
This is page          to the Exchangeable Note and Warrant Purchase Agreement to
which  Vsource,  Inc.,  a Delaware corporation, the Guarantors and the Purchaser
set  forth  below  are  parties:

PURCHASER:

BAPEF  INVESTMENTS  XII  LTD.,
a  Virgin  Islands  company

By:_________________
Its:     Director
    -----------------------------------------------
c/o  International  Private  Equity  Services  Ltd.
P.O.  Box  431
13-14  Victoria  Road
Guernsey,  UK
GY13ZD
Attn:  Connie  Helyar

Purchase  Price:  $2,147,357                    Dated:    1/28/2002
                  ----------                             -----------

<PAGE>
This is page          to the Exchangeable Note and Warrant Purchase Agreement to
which  Vsource,  Inc.,  a Delaware corporation, the Guarantors and the Purchaser
set  forth  below  are  parties:

PURCHASER:

G5  PARTNERS,  LP

By:___________________
Name:     Stewart  J.  Homler  on  behalf  of  MG5  LLC
Title:     Managing  Member

Tokyu  Vanuguard
Apartment  #504
3-4-36  Roppongi,  Minato-ku
Tokyo  106-0032,  Japan

Purchase  Price:  $40,263                    Dated:    1/28/2002
                  -------                             -----------

<PAGE>
<TABLE>
<CAPTION>
                                               EXHIBIT A

                                               PURCHASERS
                                               ----------

                                 Principal Amount of          Number of               Contact
                             ---------------------------  ------------------  ------------------------
    Name of Purchaser        Series B-1 Notes Purchased   Warrants Purchased        Information
---------------------------  ---------------------------  ------------------  ------------------------
<S>                          <C>                          <C>                 <C>

Phillip E. Kelly             $                   402,629           2,013,145  Phillip E. Kelly
                                                                              5th Floor, AXA Centre
                                                                              151 Gloucester Road
                                                                              Wanchai, Hong Kong

Kumi Hui                     $                    26,843             134,215  Flat 9A, Manly Mansion
                                                                              69B Robinson Road
                                                                              Mid-Levels, Hong Kong

John Gerard Cantillon        $                   268,420           1,342,100  10 Jalan Marie Pitchay
                                                                              Tanjong Bungah
                                                                              Hillside, Penang 11200
                                                                              Malaysia

Jack Tai-on Poon             $                    53,684             268,420  c/o P.O. Box 28843
                                                                              151 Gloucester Road
                                                                              Wanchai, Hong Kong

BAPEF Investments XII, Ltd.  $                 2,147,357          10,736,785  c/o International Private
                                                                              Equity Services Ltd.
                                                                              P.O. Box 431
                                                                              13-14 Victoria Road
                                                                              Gurnsey, UK
                                                                              GY13ZD
                                                                              Attn: Connie Helyar

G5 Partners, LP              $                    40,263             201,315  Tokyu Vanuguard
                                                                              Apartment #504
                                                                              3-4-36 Roppongi, Minato-ku
                                                                              Tokyo 106-0032, Japan
                                                                              Attn:  Stewart J. Homler
</TABLE>

<PAGE>
                                    EXHIBIT B

                             FORM OF SERIES B-1 NOTE
                             -----------------------

     THE  SECURITIES  EVIDENCED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER
     THE  SECURITIES  ACT  OF  1933,  AS  AMENDED,  (THE "1933 ACT") OR THE
     SECURITIES  LAWS  OF  ANY  STATE  AND  MAY  NOT  BE SOLD, TRANSFERRED,
     ASSIGNED  OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
     STATEMENT  UNDER  THE  1933  ACT  COVERING  SUCH  SECURITIES  AND  IN
     COMPLIANCE  WITH SUCH STATE LAWS OR IF THE COMPANY RECEIVES AN OPINION
     OF  COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY
     TO  THE  COMPANY,  STATING  THAT  SUCH  SALE,  TRANSFER, ASSIGNMENT OR
     HYPOTHECATION  IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
     REQUIREMENTS  OF  THE  1933  ACT  AND  SUCH  APPLICABLE  STATE  LAWS.

                          EXCHANGEABLE PROMISSORY NOTE

US$__________________
Principal Amount                                        Date:  _________________

     Vsource,  Inc., a Delaware corporation (the "Company"), for value received,
hereby  promises  to  pay  to  the  order  of ______ or its registered permitted
assigns  ("Holder")  on June 30, 2003 or when sooner declared due and payable in
accordance  with  the  Purchase  Agreement  (the  "Maturity  Date")  the  sum of
US$________  (the  "Principal  Amount"), unless this Note is repaid or exchanged
before  that  date  pursuant  to  the  terms  hereunder  or  under  the Purchase
Agreement.  Interest  shall  accrue  on  the outstanding Principal Amount at the
rate of 10% per annum (compounded quarterly) from [the date hereof][December 28,
2001]  and is due and payable on the Maturity Date unless this Note is repaid or
exchanged  before  that  date pursuant to the terms hereunder.  Payment shall be
made  at  the  registered  address of the Holder appearing in the records of the
Company.  This  Note is one of the Notes issued pursuant to an Exchangeable Note
and  Warrant  Purchase Agreement dated as of January 28, 2002 among the Company,
the Guarantors and the Purchasers named therein (the "Purchase Agreement").  The
unpaid principal balance of this Note at any time, together with all accrued and
unpaid  interest  thereon  at  such  time,  is  referred  to herein as the "Note
Amount."  Any terms not defined in this Note shall have the meaning set forth in
the  Purchase  Agreement  unless  otherwise  indicated.

     1.     Guarantee.  The  Holder is entitled to the benefits of the Guarantee
            ---------
set  forth  in  the  Purchase  Agreement.

     2.     Voluntary Prepayment.   The Company may prepay this Note in whole or
            --------------------
in  part, subject to the following conditions:  (i) the Company shall have given
the  Holder an irrevocable written notice of its intention to prepay at least 30
days  prior  to  prepayment and, if such prepayment is to occur after August 15,

<PAGE>
2002, shall have deposited good funds in a segregated account for the benefit of
the Holder in an amount equal to the amount being prepaid; (ii) the Holder shall
not  have  exercised  its  exchange rights under Section 3 of this Note, if any,
prior  to  the  date  set forth in such irrevocable written notice of prepayment
upon  which  the  Company  intends  to  prepay  this  Note;  and  (iii) any such
prepayment  must  be  made  on  a pro rata basis among all Series B-1 Notes then
outstanding.

     3.     Voluntary  Exchange.
            -------------------

          (a)     Voluntary Exchange.  If the Note Amount is not paid in full on
                  ------------------
     or  prior  to August 15, 2002, then, at any time thereafter while this Note
     is  outstanding,  Holder  may,  at  the Holder's option, exchange this Note
     including  accrued  interest thereon to the date of exchange, in accordance
     with the provisions of paragraph (b) below hereof, in whole or in part, for
     a Series A Note in the initial principal amount equal to the amount of this
     Note  being  exchanged,  including  all accrued and unpaid interest on this
     Note.

          (b)     Notice  of  Voluntary  Exchange.  If  the  Holder  elects  to
                  -------------------------------
     exchange  all  or  any  portion  of this Note pursuant to Section 3(a), the
     Holder shall submit an executed Notice of Election in the form of Exhibit 1
     hereto  and  surrender  this Note at the office of the Company. The Company
     shall,  as soon as practicable (but within three business days) thereafter,
     issue  and  deliver  to  the  Holder  of  this  Note a Series A Note in the
     principal amount to which the Holder of this Note shall be entitled and, if
     this Note is being exchanged in part, a new Series B-1 Note with respect to
     the  remainder  of  this  Note  which is not being exchanged. Such exchange
     shall  be  deemed to have been made and the Series A Note so issuable shall
     be  deemed  to  have  been  issued and outstanding immediately prior to the
     close  of  business  on  the  date  of  the  surrender of this Note and the
     delivery  of  an  executed  Notice  of  Election, and the person or persons
     entitled  to receive the Series A Note issuable upon such exchange shall be
     treated  for  all purposes as the record holder or holders of such Series A
     Note  as  of  such  date.

          (c)     Series  A  Notes  Issuable  Upon Exchange.  The Company agrees
                  -----------------------------------------
     that all Series A Notes issued upon a voluntary exchange of this Note will,
     upon  issuance  be  duly  authorized  and  validly  issued  and free of all
     preemptive  rights  and all liens, charges, encumbrances or restrictions on
     transfer  except  such restrictions on transfer as may apply under state or
     federal  securities  laws.

     4.     Notices  of  Record  Date.  In  the  event  of:
            -------------------------

          (a)     Any  taking  by  the Company of a record of the holders of any
     class  of  equity  securities of the Company for the purpose of determining
     the  holders  thereof  who are entitled to receive any distribution, or any
     right  to subscribe for, purchase or otherwise acquire any other securities
     or  property,  or  to  receive  any  other  right;  or

          (b)     Any  capital  reorganization  of  the  Company,  any
     reclassification  or  recapitalization of the equity capital of the Company
     (other  than  a  subdivision or combination of the Company's securities) or
     any  transfer  of  all or substantially all of the assets of the Company to
     any  other  person or any consolidation or merger involving the Company; or

          (c)     Any  voluntary  or  involuntary  dissolution,  liquidation  or
     winding-up  of  the  Company,

then  the  Company  will  deliver  to the Holder at least ten (10) business days
prior  to  the  earliest  applicable  date  hereinafter  specified,  a  notice
specifying:  (i)  the  date  on  which  any  such  record is to be taken for the
purpose of such dividend, distribution or right, and the amount and character of
such  dividend,  distribution  or  right;  (ii)  the  date  on  which  any  such
reorganization,  reclassification, transfer, consolidation, merger, dissolution,
liquidation  or  winding-up  is expected to become effective and the record date
for  determining  stockholders  entitled to vote thereon or participate therein;
and  (iii)  a  description  of  the  material  terms  thereof.

     5.     No  Shareholder  Rights.  Nothing  contained  in  this Note shall be
            -----------------------
construed  as  conferring  upon  the  Holder  or  any  other  person  any rights
whatsoever  as  a  shareholder  of  the  Company.

     6.     Event  of  Default.  Upon the occurrence of an Event of Default, the
            ------------------
entire  principal balance and interest on this Note shall immediately become due
and  payable and the Holder shall have all remedies under the Purchase Agreement
or  as  provided  by  law.

     The  Company and the Guarantors waive the rights of presentment, demand for
performance,  protest,  notice  of protest, and notice of dishonor.  No delay on
the part of the Holder in exercising any right hereunder shall operate as waiver
of  such  right  under  this  Note.  This  Note  is being delivered and shall be
construed  in accordance with the internal laws of the State of Delaware without
giving  effect to any choice of law rule that would cause the application of the
laws  of  any jurisdiction other than the internal laws of the State of Delaware
to  the  rights  and  duties  of  the  parties.

                                  VSOURCE,  INC.

                                  By:___________________________________________
                                  Name:
                                  Title:

                                  AS  GUARANTORS:
                                  VSOURCE  (CI)  LTD

                                  By:___________________________________________
                                  Name:
                                  Title:

<PAGE>
                                  VSOURCE  (MALAYSIA)  SDN  BHD

                                  By:___________________________________________
                                  Name:
                                  Title:

<PAGE>
                                    EXHIBIT 1
                                    ---------

                               NOTICE OF ELECTION

TO:  VSOURCE,  INC.

     The  undersigned,  the holder of the foregoing Note, hereby surrenders such
Note  and  irrevocably  elects  to  exchange  such  Note  for a Series A Note of
VSOURCE,  INC.,  pursuant  to  and  in accordance with the Exchangeable Note and
Warrant  Purchase  Agreement  dated as of January 28, 2002 and requests that the
Series  A  Note  be  issued  in  the  name  of,  and  delivered  to,
______________________,  whose  address  is  __________________________________.

The  undersigned  hereby  joins  in and elects to become a party to the Series A
Note  Purchase Agreement as a "Purchaser" thereunder, agreeing to be fully bound
by,  and  subject to, all of the covenants, terms and conditions of the Series A
Note  Purchase  Agreement  applicable  to  "Purchasers"  thereunder.

Dated:  _________________,  200_.

                                        __________________________________
                                        (Signature  must conform in all respects
                                        to  name  of  holder as specified on the
                                        face  of  the  Note)

                                        __________________________________

                                        __________________________________
                                                   (Address)

<PAGE>
                                    EXHIBIT C

                                 FORM OF WARRANT
                                 ---------------

THIS  WARRANT  HAS  NOT  BEEN  REGISTERED  UNDER  THE SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"),  OR  APPLICABLE  STATE  SECURITIES LAWS.  THE
WARRANT  MAY  NOT  BE  SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THOSE LAWS OR UNLESS THE COMPANY
HAS  RECEIVED  AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH DISPOSITION IS
IN  COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

                                        Right  to  Purchase  _______  Shares
                                        of  Common  Stock  of  Vsource,  Inc.

                                  VSOURCE, INC.
                          Common Stock Purchase Warrant

     VSOURCE,  INC.,  a  Delaware  corporation (the "Company"), hereby certifies
that, for value received,   _______________  (the "Holder") is entitled, subject
to  the  terms set forth below, to purchase from the Company at any time or from
time  to  time  on  or before 5:00 p.m., Pacific Standard time, on [date 5 years
after issuance date] (the "Expiration Date") _________  (_______) fully paid and
nonassessable  shares  of  common stock of the Company (the "Common Stock") at a
purchase  price  per  share equal to the Purchase Price, as defined herein.  The
number  of  such  shares  of  Common Stock and the Purchase Price are subject to
adjustment  as  provided  in this Warrant. The initial purchase price for shares
subject  to  this Warrant will be 10/100 Dollars ($0.10) per share (the "Initial
Purchase  Price"),  and  will  be adjusted from time to time as provided herein.
The  Initial  Purchase  Price or, if such price has been adjusted, the price per
share  of Common Stock as last adjusted pursuant to the terms hereof is referred
to  as  the  "Purchase  Price"  herein.

     1.     EXERCISE  OF  WARRANT.
            ---------------------

          (a)     This  Warrant may be exercised by the Holder hereof in full or
in  part at any time or from time to time until the Expiration Date by surrender
of  this  Warrant and the subscription form annexed hereto (duly executed by the
Holder),  to  the  Company,  and  by  making  payment in cash or by certified or
official  bank check payable to the order of the Company, in the amount obtained
by multiplying (i) the number of shares of Common Stock designated by the Holder
in  the  subscription  form  by  (ii)  the Purchase Price then in effect. On any
partial  exercise  the  Company  will forthwith issue and deliver to or upon the
order  of  the  Holder  hereof  a  new Warrant of like tenor, in the name of the
Holder  hereof,  providing in the aggregate on the face or faces thereof for the
purchase  of  the  number  of  shares of Common Stock for which such Warrant may
still  be  exercised.

                                      -41-
<PAGE>
          (b)     In  lieu  of  exercising  this  Warrant as provided above, the
Holder may elect to receive, without the payment by the Holder of any additional
consideration, shares of Common Stock equal to the value of this Warrant (or the
portion  thereof  being  canceled) by surrender of this Warrant at the principal
office  of  the  Company  together  with  the  subscription form attached hereto
indicating  such  election, in which event the Company shall issue to the holder
hereof  a  number  of  Warrant  Shares  computed  using  the  following formula:

                                        Y (A - B)
                                        ---------
                                  X  =      A

    Where:     X  =  The  number  of  shares of Common Stock to be issued to the
               Holder  pursuant  to  this  net  exercise;

               Y = The number of shares of Common Stock designated by the Holder
               in  the  subscription  form;

               A = The then fair market value of one share of Common Stock as of
               the  date  the  election  is  made;

               B = The Exercise Price (as adjusted to the date of the election).

     For  purposes  of  this Section 1(b), the fair market value of one share of
     Common Stock as of a particular date shall be determined as follows: (i) if
     traded  on  a  securities exchange or through the Nasdaq National Market or
     SmallCap System, the value shall be deemed to be the average of the closing
     prices  of  the securities on such exchange over the thirty (30) day period
     ending  three  (3)  days prior to the net exercise election; (ii) if traded
     over-the-counter,  the  value  shall  be  deemed  to  be the average of the
     closing  prices over the thirty (30) day period ending three (3) days prior
     to  the  net  exercise;  and (iii) if there is no active public market, the
     value  shall  be the fair market value thereof, as determined in good faith
     by  the  Board  of  Directors  of  the  Company.

     2.     DELIVERY  OF  STOCK  CERTIFICATES,  ETC.,  ON  EXERCISE.  As soon as
            -------------------------------------------------------
practicable  after  the  exercise  of this Warrant, the Company will cause to be
issued  in  the name of and delivered to the Holder hereof a certificate for the
number  of  fully  paid  and  nonassessable  shares  of  Common  Stock (or Other
Securities)  to  which  the  Holder shall be entitled on such exercise, plus, in
lieu  of  any  fractional share to which the Holder would otherwise be entitled,
cash  equal to such fraction multiplied by the then current fair market value as
determined  pursuant  to Section 1(b) above of one full share, together with any
other  stock  or other securities or property (including cash, where applicable)
to  which  the  Holder is entitled upon such exercise.  "Other Securities" shall
mean  any stock (other than Common Stock) and other securities of the Company or
any  other person (corporate or otherwise) which the Holder at any time shall be
entitled to receive, or shall have received, on the exercise of this Warrant, in
lieu  of  or in addition to Common Stock, or which at any time shall be issuable
or  shall  have been issued in exchange for or in replacement of Common Stock or
Other  Securities  pursuant  to  Sections  3  or  4.

                                      -42-
<PAGE>
     3.     ADJUSTMENT.
            ----------

          (a)     Initial  Purchase  Price;  Subsequent  Adjustment of Price and
                  --------------------------------------------------------------
Number  of Purchasable Shares.  The Initial Purchase Price will be adjusted from
-----------------------------
time  to  time  as provided below.  The Initial Purchase Price or, if such price
has been adjusted, the price per share of Common Stock as last adjusted pursuant
to  the  terms  hereof is referred to as the "Purchase Price" herein.  Upon each
adjustment  of  the  Purchase  Price,  the Holder will thereafter be entitled to
purchase,  at  the  Purchase Price resulting from such adjustment, the number of
shares  of  Common  Stock  obtained  by multiplying the Purchase Price in effect
immediately  before  such  adjustment  by  the  number of shares of Common Stock
purchasable  pursuant  to  this  Warrant  immediately before such adjustment and
dividing  the  product  by  the  Purchase  Price resulting from such adjustment.

          (b)     Adjustment  for Stock Splits and Combinations.  If the Company
                  ---------------------------------------------
at  any  time  or  from  time  to  time after the date of this Warrant effects a
subdivision  of  the  outstanding Common Stock, by stock split or otherwise, the
Purchase  Price  then  in  effect  immediately  before that subdivision shall be
proportionately  decreased;  and, conversely, if the Company at any time or from
time  to  time after the date of this Warrant combines the outstanding shares of
Common  Stock,  by  reverse stock split or otherwise, the Purchase Price then in
effect  immediately  before that combination shall be proportionately increased.
Any  adjustment  under  this Section 3(b) shall become effective at the close of
business  on  the  date  the  subdivision  or  combination  becomes  effective.

          (c)     Adjustment  for  Certain  Dividends and Distributions.  In the
                  -----------------------------------------------------
event  the  Company  at  any  time  or  from time to time after the date of this
Warrant either makes, or fixes a record date for the determination of holders of
Common  Stock  entitled  to receive, a dividend or other distribution payable in
additional  shares  of  Common  Stock,  then and in each such event the Purchase
Price  then  in effect shall be decreased as of the time of such issuance or, in
the  event  such  a  record  date  is fixed, as of the close of business on such
record  date, by multiplying the Purchase Price then in effect by a fraction (1)
the  numerator of which is the total number of shares of Common Stock issued and
outstanding  immediately  prior  to  the  time  of such issuance on the close of
business  on such record date, and (2) the denominator of which shall be (i) the
total  number of shares of Common Stock issued and outstanding immediately prior
to  the  time of such issuance or the close of business on such record date plus
(ii)  the  number of shares of Common Stock issuable in payment of such dividend
or  distribution;  provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed  therefor,  the  Purchase  Price shall be recomputed accordingly as of the
close  of business on such record date or date fixed therefor and thereafter the
Purchase Price shall be adjusted pursuant to this Section 3(c) as of the time of
actual  payment of such dividend or distribution.  For purposes of the foregoing
formula,  "the total number of shares of Common Stock issued and outstanding" on
a  particular date shall include shares of Common Stock issuable upon conversion
of  stock  or  securities  convertible  into  Common  Stock  and the exercise of
warrants,  options  or  rights  for  the  purchase  of  Common  Stock  which are
outstanding  on  such  date.

                                      -43-
<PAGE>
          (d)     Adjustments  for  Other  Dividends  and Distributions.  In the
                  -----------------------------------------------------
event  the  Company  at  any  time  or  from time to time after the date of this
Warrant makes, or fixes a record date for the determination of holders of Common
Stock  entitled  to  receive,  a  dividend  or  other  distribution  payable  in
securities  of  the  Company other than shares of Common Stock, then and in each
such  event,  provision  shall  be  made  so  that the Holder shall receive upon
exercise  hereof, in addition to the number of shares of Common Stock receivable
thereupon,  the amount of securities of the Company which it would have received
had  this  Warrant been converted into Common Stock as of the date of such event
and  had  it  thereafter,  during  the period from the date of such event to and
including  the  date  of  exercise, retained such securities receivable by it as
aforesaid during such period, subject to all other adjustments called for during
such  period  under  this  Section  3  with respect to the rights of the Holder.

          (e)     Adjustment  for  Recapitalization,  Reclassification,  or
                  ---------------------------------------------------------
Exchange.  If  the  Common  Stock  issuable upon the exercise of this Warrant is
changed into the same or a different number of shares of any class or classes of
stock  of  the  Company,  whether by recapitalization, reclassification or other
exchange (other than a subdivision or combination of shares, or a stock dividend
or  a  reorganization,  merger,  consolidation  or  sale of assets, provided for
elsewhere  in  this Section 3), then and in any such event the Holder shall have
the right thereafter to exercise this Warrant to purchase the kind and amount of
stock  and  other securities and property receivable upon such recapitalization,
reclassification  or other exchange by holders of the number of shares of Common
Stock  which  might  have been purchased under this Warrant immediately prior to
such  recapitalization,  reclassification  or  other  exchange,  all  subject to
further  adjustment  as  provided  herein.

          (f)     Reorganizations,  Mergers,  Consolidations or Sales of Assets.
                  -------------------------------------------------------------
If  at  any  time  or from time to time there is a capital reorganization of the
Common  Stock  (other  than  a  subdivision  or combination of shares or a stock
dividend  or  a  recapitalization, reclassification or other exchange of shares,
provided  for  elsewhere  in this Section 3) or a merger or consolidation of the
Company  with  or  into another corporation, or the sale of all or substantially
all of the Company's assets to any other person, then, as a part of such capital
reorganization,  merger,  consolidation or sale, provision shall be made so that
the Holder shall thereafter be entitled to receive upon exercise of this Warrant
the number of shares of stock or other securities or property of the Company, or
of the successor corporation resulting from such capital reorganization, merger,
consolidation or sale, to which a holder of the number of shares of Common Stock
deliverable  upon  such  conversion  would  have  been  entitled on such capital
reorganization,  merger,  consolidation  or sale.  In any such case, appropriate
adjustment  shall be made in the application of the provisions of this Section 3
with  respect  to  the  rights  of  the Holder after the capital reorganization,
merger,  consolidation  or sale to the end that the provisions of this Section 3
(including the number of shares deliverable upon exercise of this Warrant) shall
continue  to be applicable after that event and shall be as nearly equivalent to
the  provisions  hereof  as  may  be  practicable.

          (g)     Sale  of  Shares  Below  Conversion  Price.
                  ------------------------------------------

                                      -44-
<PAGE>
               (1)     If at any time or from time to time after the date hereof
     the Company issues or sells, or is deemed by the express provisions of this
     Section  3(g) to have issued or sold, Additional Shares of Common Stock (as
     hereinafter defined), other than as a dividend or other distribution on any
     class  of  stock as provided in Section 2 and other than upon a subdivision
     or  combination  of shares of Common Stock as provided in Section 2, for an
     Effective  Price  (as  hereinafter  defined)  less  than  the then existing
     Conversion  Price,  then and in each such case the then existing Conversion
     Price  shall  be  reduced  to  such  Effective  Price.

               (2)     For  the  purpose of making any adjustment required under
     this  Section 3(g), the consideration received by the Company for any issue
     or  sale  of  securities  shall  (A)  to  the extent it consists of cash be
     computed  at  the amount of cash received by the Company, (B) to the extent
     it  consists  of property other than cash, be computed at the fair value of
     that  property  as  determined  in  good  faith  by  the  Board, and (C) if
     Additional  Shares  of Common Stock, Convertible Securities (as hereinafter
     defined)  or  rights  or  options  to  purchase either Additional Shares of
     Common  Stock  or  Convertible  Securities are issued or sold together with
     other  stock  or  securities  or  other  assets  of  the  Company  for  a
     consideration  which  covers  both,  be  computed  as  the  portion  of the
     consideration  so  received that may be reasonably determined in good faith
     by  the  Board  to  be allocable to such Additional Shares of Common Stock,
     Convertible  Securities  or  rights  or  options.

               (3)     For  the  purpose  of  the adjustment required under this
     Section  3(g), if the Company issues or sells any rights or options for the
     purchase  of,  or  stock  or  other securities convertible into, Additional
     Shares  of  Common  Stock  (such  convertible  stock  or  securities  being
     hereinafter  referred  to as "Convertible Securities") and if the Effective
     Price of such Additional Shares of Common Stock is less than the Conversion
     Price then in effect, then in each case the Company shall be deemed to have
     issued at the time of the issuance of such rights or options or Convertible
     Securities the maximum number of Additional Shares of Common Stock issuable
     upon  exercise  or conversion thereof and to have received as consideration
     for  the issuance of such shares an amount equal to the total amount of the
     consideration,  if  any,  received  by the Company for the issuance of such
     rights  or  options  or  Convertible  Securities, plus, in the case of such
     rights or options, the minimum amounts of consideration, if any, payable to
     the  Company upon the exercise of such rights or options, plus, in the case
     of  Convertible  Securities,  the minimum amounts of consideration, if any,
     payable  to  the  Company  (other  than  by  cancellation of liabilities or
     obligations  evidenced  by such Convertible Securities) upon the conversion
     thereof.  No  further adjustment of the Conversion Price, adjusted upon the
     issuance  of  such rights, options or Convertible Securities, shall be made
     as  a result of the actual issuance of Additional Shares of Common Stock on
     the  exercise  of  any such rights or options or the conversion of any such
     Convertible  Securities.  If  any  such rights or options or the conversion
     privilege  represented  by  any  such  Convertible  Securities shall expire
     without  having  been  exercised,  the  Conversion  Price adjusted upon the
     issuance  of  such  rights,  options  or  Convertible  Securities  shall be
     readjusted  to  the Conversion Price which would have been in effect had an
     adjustment been made on the basis that the only Additional Shares of Common
     Stock  so  issued  were  the  Additional  Shares  of  Common Stock, if any,
     actually issued or sold on the exercise of such rights or options or rights

                                      -45-
<PAGE>
     of conversion of such Convertible Securities, and such Additional Shares of
     Common  Stock,  if  any, were issued or sold for the consideration actually
     received by the Company upon such exercise, plus the consideration, if any,
     actually  received  by  the  Company for the granting of all such rights or
     options,  whether  or  not  exercised,  plus the consideration received for
     issuing  or selling the Convertible Securities actually converted, plus the
     consideration,  if  any,  actually  received  by the Company (other than by
     cancellation  of  liabilities  or obligations evidenced by such Convertible
     Securities)  on  the  conversion  of  such  Convertible  Securities.

               (4)     "Additional Shares of Common Stock" shall mean all shares
     of  Common  Stock  issued (or deemed issued hereunder) by the Company after
     the  date  hereof, whether or not subsequently reacquired or retired by the
     Company,  other  than: (A) shares of Common Stock issued upon conversion or
     exchange of the Series 3-A Preferred Stock or any other options or warrants
     or  convertible  securities outstanding or issuable on the date hereof; (B)
     shares of Common Stock issued upon conversion or exchange of the Series 2-A
     Preferred  Stock  pursuant  to  Section 7 of the Certificate of Designation
     creating  the Series 2-A Preferred Stock; (C) shares of Common Stock issued
     upon  conversion  or exchange of the Series 1-A Preferred Stock pursuant to
     Article  4,  Section C.5 of the Certificate of Incorporation; (D) shares of
     Common Stock issuable or issued to the directors, officers and employees of
     or  consultants  to the Company pursuant to a plan approved by the Board of
     Directors  of the Company and (E) shares of Common Stock issuable or issued
     pursuant  to equipment financing or leasing arrangements, and (F) shares of
     Common Stock issuable pursuant to the warrants, if any, which may be issued
     in  connection  with  the  Exchangeable Note and Warrant Purchase Agreement
     (the "Series B-1 Agreement") dated as of January 28, 2002, by and among the
     Company,  Vsource  (CI) Ltd, Vsource (Malaysia) Sdn Bhd, and the Purchasers
     named  therein.  The "Effective Price" of Additional Shares of Common Stock
     shall  mean  the  quotient  determined  by  dividing  the  total  number of
     Additional  Shares  of  Common Stock issued or sold, or deemed to have been
     issued  or  sold by the Company under this Section 3(g), into the aggregate
     consideration  received, or deemed to have been received by the Company for
     such  issue  under  this Section 3(g), for such Additional Shares of Common
     Stock.

          (h)     Certificate  of  Adjustment.  Upon  the  occurrence  of  each
                  ---------------------------
adjustment  or readjustment of the Purchase Price and/or the number of shares of
Common  Stock subject to this Warrant, the Company at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms hereof, and
shall  prepare  and  furnish  to  the  Holder  a  certificate setting forth such
adjustment  or  readjustment  and  showing  in  detail the facts upon which such
adjustment  or  readjustment  is  based.

     4.     EXERCISE  UPON  REORGANIZATION, CONSOLIDATION, MERGER, ETC.  In case
            ----------------------------------------------------------
at  any  time  or  from  time  to  time,  the  Company  intends  to (a) effect a
reorganization, (b) consolidate with or merge into any other person, (c) sell or
transfer  all  or  substantially  all  of  its properties or assets to any other
person,  (d)  dissolve,  (e)  consummate  an  initial  public  offering  of  its
securities;  or  if  the  Company is sold through the sale of its capital stock,
then, notwithstanding any other provision of this Warrant, in each such case, as
a  condition  of  such  reorganization, consolidation, merger, sale dissolution,

                                      -46-
<PAGE>
conveyance,  or  offering  the Company shall give at least fifteen (15) business
days  notice  to the Holder of such pending transaction whereby the Holder shall
have  the  right  to  exercise  this  Warrant  prior to any such reorganization,
consolidation,  merger, sale, dissolution, conveyance or offering.  Any exercise
of  this Warrant pursuant to notice under this Section shall be conditioned upon
the  closing  of  such reorganization, consolidation, merger, sale, dissolution,
conveyance  or  offering  which is the subject of the notice and the exercise of
this Warrant shall not be deemed to have occurred until immediately prior to the
closing  of  such  transaction.

     5.     FURTHER  ASSURANCES.  The  Company  will take all action that may be
            -------------------
necessary or appropriate in order that the Company may validly and legally issue
fully  paid  and  nonassessable  shares of stock, free from all taxes, liens and
charges with respect to the issue thereof, on the exercise of all or any portion
of  this  Warrant  from  time  to  time  outstanding.

     6.     NOTICES  OF  RECORD  DATE,  ETC.  In  the  event  of:
            -------------------------------

          (a)     any  taking  by  the Company of a record of the holders of any
class  of  securities for the purpose of determining the holders thereof who are
entitled  to receive any dividend on, or any right to subscribe for, purchase or
otherwise  acquire  any  shares of stock of any class or any other securities or
property,  or  to  receive  any  other  right,  or

          (b)     any  capital  reorganization  of  the  Company,  any
reclassification  or recapitalization of the capital stock of the Company or any
transfer  of  all  or  substantially  all of the assets of the Company to or the
sale,  consolidation or merger of the Company with, to or into any other person,
or

          (c)     Any  voluntary  or  involuntary  dissolution,  liquidation  or
winding-up  of  the  Company;

then  and  in each such event the Company will mail or cause to be mailed to the
Holder,  at least fifteen (15) business days prior to such record date, a notice
specifying  (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character of
such  dividend,  distribution  or  right,  (ii)  the  date  on  which  any  such
reorganization,  reclassification,  recapitalization,  transfer,  consolidation,
merger,  dissolution,  liquidation or winding up is to take place, and the time,
if  any  is  to  be fixed, as of which the holders of record of Common Stock (or
Other Securities) shall be entitled to exchange their shares of Common Stock (or
Other  Securities)  for  securities  or  other  property  deliverable  on  such
reorganization,  reclassification,  recapitalization,  transfer,  consolidation,
merger,  dissolution,  liquidation  or  winding-up,  and  (iii)  the  amount and
character  of  any  stock or other securities, or rights or options with respect
thereto,  proposed  to  be issued or granted, the date of such proposed issue or
grant  and  the persons or class of persons to whom such proposed issue or grant
is  to  be  offered  or  made.  Such  notice shall also state that the action in
question  or  the  record date is subject to the effectiveness of a registration
statement under the Securities Act or a favorable vote of stockholders if either
is  required.  Such  notice  shall be mailed at least fifteen (15) business days
prior  to  the  date  specified in such notice on which any such action is to be
taken  or  the record date, whichever is earlier.  The Holder shall use its best
efforts  to  decide whether to exercise this Warrant within ten (10) days of its
receipt  of  such  notice.

                                      -47-
<PAGE>
     7.     RESERVATION  OF  STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS.  The
            --------------------------------------------------------------
Company  will  at all times reserve and keep available out of its authorized but
unissued  shares  of  capital  stock,  solely  for  issuance and delivery on the
exercise  of  this  Warrant,  a  sufficient number of shares of Common Stock (or
Other  Securities) to effect the full exercise of this Warrant and the exercise,
conversion  or  exchange  of  any  other  warrant  or  security  of  the Company
exercisable  for,  convertible into, exchangeable for or otherwise entitling the
Holder  to  acquire  shares of Common Stock (or Other Securities), and if at any
time  the  number  of  authorized  but unissued shares of Common Stock (or Other
Securities)  shall  not  be  sufficient  to  effect such exercise, conversion or
exchange, the Company shall take such action as may be necessary to increase its
authorized  but  unissued  shares  of Common Stock (or Other Securities) to such
number  as  shall  be  sufficient  for  such  purposes.

     8.     TRANSFER OF WARRANT.  This Warrant cannot be transferred without the
            -------------------
prior  written  consent  of the Company, which consent shall not be unreasonably
withheld;  provided, however, the Holder may transfer this Warrant to any of its
affiliates  without  such  consent  so  long  as such transfer complies with all
applicable  securities  laws.

     9.     NO  RIGHTS  AS  A  STOCKHOLDER.  This  Warrant shall not entitle the
            ------------------------------
Holder  hereof  to  any  voting  rights  or other rights as a stockholder of the
Company.

     10.     NOTICES,  ETC.  All notices which are required to be given pursuant
             -------------
to  this  Warrant  shall be in writing and shall be delivered by certified mail,
return  receipt  requested,  first  class  postage prepaid, or sent by overnight
express  or similarly recognized overnight delivery with receipt acknowledged or
by facsimile, with a copy thereof sent by one of the other means.  Notices shall
be  deemed  to  have  been given at the time delivered and shall be addressed as
follows  or  to  such  other  address  as a party may designate by proper notice
hereunder.

If  to  Holder:               To  the  address  set  forth  on  Exhibit A of the
                              Series  B-1  Agreement.

If  to  the  Company:         Vsource,  Inc.
                              16875  West  Bernardo  Drive
                              Suite  250
                              San  Diego,  CA  92127
                              USA
                              Attention:  Chief  Financial  Officer
                              Facsimile:  (858)  618-5904

                              with  a  copy  to:
                              Vsource  (Asia)  Ltd
                              Unit  501,  AXA  Centre
                              151  Gloucester  Road
                              Wanchai,  Hong  Kong
                              Attention:  General  Counsel
                              Facsimile:  (852)  2523-1344

                                      -48-
<PAGE>
     11.     SECURITIES  LAWS.  By  acceptance  of  this  Warrant,  the  Holder
             ----------------
represents  to  the  Company that the Holder is "accredited investor" within the
meaning  of  Rule  501  of  Regulation  D  adopted  under the Securities Act, as
presently  in  effect,  or  not  a  "U.S. person" within the meaning of Rule 902
adopted under the Securities Act and is acquiring the Securities in an "offshore
transaction" as defined in Rule 902, that this Warrant is being acquired for the
Holder's  own  account and for the purpose of investment and not with a view to,
or  for  sale in connection with, the distribution thereof, nor with any present
intention  of  distributing  or selling the Warrant or the Common Stock issuable
upon  exercise  of  the  Warrant,  and  that  it is an investor in securities of
companies  in  the  development  stage  and  acknowledges  that  it can bear the
economic  risk  of  its  investment  and  has  such  knowledge and experience in
financial  or  business  matters that it is capable of evaluating the merits and
risks  of  the  investment  in  the  shares subject to this Warrant.  The Holder
acknowledges  and  agrees  that  this Warrant and the Common Stock issuable upon
exercise  of this Warrant (if any) have not been (and at the time of acquisition
by  the  Holder,  will  not  have  been  or  will  not  be) registered under the
Securities  Act  or  under  the  securities  laws of any state, in reliance upon
certain  exemptive  provisions  of such statutes.  The Holder further recognizes
and  acknowledges  that  because this Warrant and the Common Stock issuable upon
exercise  of this Warrant are unregistered, they may not be eligible for resale,
and  may  only  be  resold  in  the future pursuant to an effective registration
statement  under the Securities Act and any applicable state securities laws, or
pursuant  to  a valid exemption from such registration requirements and that the
Holder  must, therefore, bear the economic risk of such investment indefinitely.

     12.     LEGEND.  Unless  theretofore  registered  for  resale  under  the
             ------
Securities Act, each certificate for shares issued upon exercise of this Warrant
shall  bear  the  following  or  a  similar  legend:

          THE  SHARES  REPRESENTED  BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER  THE  SECURITIES  ACT  OF  1933,  AS AMENDED, OR ANY APPLICABLE STATE
     SECURITIES  LAWS.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
     NOT  BE  RESOLD,  TRANSFERRED  OR  ASSIGNED  IN THE ABSENCE OF AN EFFECTIVE
     REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,
     AS  AMENDED,  OR  AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
     DISPOSITION  IS  IN  COMPLIANCE  WITH THE SECURITIES ACT AND ANY APPLICABLE
     STATE  SECURITIES  LAWS.

     13.     MISCELLANEOUS.  This  Warrant  and any terms hereof may be changed,
             -------------
waived,  discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is  sought.  This Warrant shall be construed and enforced in accordance with and
governed  by  the  internal  laws  of the State of California, without regard to
conflict  of  laws principles.  The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
The  invalidity  or  unenforceability  of  any  provision hereof shall in no way
affect  the  validity  or  enforceability  of  any  other  provision.

                                      -49-
<PAGE>
     IN  WITNESS  WHEREOF, the Company has caused this Warrant to be executed on
its  behalf  by  one  of  its  officers thereunto duly authorized as of [date of
issuance].

                                 VSOURCE,  INC.

                                 By:     _________________________________

                                      -50-
<PAGE>
                              FORM OF SUBSCRIPTION

                                  VSOURCE, INC.

                   (To be signed only on exercise of Warrant)

TO:     VSOURCE,  INC.

     1.     The  undersigned  Holder  of the attached original, executed Warrant
hereby  elects to exercise its purchase right under such Warrant with respect to
shares  of Common Stock, as defined in the Warrant, of Vsource, Inc., a Delaware
corporation  (the  "Company").

     2.     The undersigned Holder is hereby paying the aggregate purchase price
for  such  shares  of  Common  Stock (the "Exercise Shares") (i) by the enclosed
certified  or  official bank check payable in United States dollars to the order
of the Company in the amount of $___________, or (ii) by wire transfer of United
States  funds  to  the  account of the Company in the amount of $______________,
which  transfer has been made before or simultaneously with the delivery of this
Form  of  Subscription  pursuant  to  the  instructions of the Company, or (iii)
electing  to  exercise the attached Warrant for _______ shares purchasable under
the  Warrant  pursuant  to  the  net exercise provisions of Section 1(b) of such
Warrant.

     3.     Please  issue  a  stock certificate or certificates representing the
appropriate  number  of  shares  of  Common Stock in the name of the undersigned
Holder.

Dated:_______________________

                                          __________________________________
                                                 Signature  of  Holder

<PAGE>
                                  Schedule 3.2
                                  -------------

     1.     The  Series  A  Notes are convertible into securities which have the
right  to  vote.

<PAGE>
                                  Schedule 3.4
                                  -------------

     1.     The  Company  may  file  a  Form  8-K  with  the U.S. Securities and
Exchange  Commission  ("SEC")  in  connection  with  this  transaction.

     2.     The  transactions  contemplated by this Agreement and the Securities
will:

          (a)  Result  in a change in the conversion or exercise prices pursuant
               to  the  "anti-dilution"  provisions of the Company's outstanding
               Series 1-A Convertible Preferred Stock and Series 2-A Convertible
               Preferred Stock and certain outstanding warrants and options; and

          (b)  The  provisions  of  Exhibit  B  to  the  Series  A Note Purchase
               Agreement  will  require  the  filing  and  effectiveness  of  a
               Registration  Statement  with  the  SEC  and certain filings with
               state  securities  commissions.

<PAGE>
                                  Schedule 3.11
                                 --------------

1.   The  Company  received  a  letter  from  the  SEC  dated  December 18, 2001
     commenting (the "SEC Comments") upon the Company's Post Effective Amendment
     No.  2 on Form S-3 to Form SB-2 filed November 15, 2001, Form 10-K and Form
     10-Q/A  for  the  quarter  ended October 31, 2001. On January 14, 2002, the
     Company  filed  its  response (the "Response") to the SEC Comments with the
     SEC.  As  of  the  date of this Agreement, the Company has not received any
     further  response  from  the  SEC  and  can  provide  no assurance that the
     Response  adequately  addressed  the  SEC  Comments.

<PAGE>

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