Document:

EXECUTIVE EMPLOYMENT AGREEMENT

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

 

 

THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT, dated as of April 22, 2003, is between CHESAPEAKE CORPORATION, a Virginia corporation (the "Company") and J.P. Causey Jr. (the "Executive").

WHEREAS, the Company and the Executive entered into an Executive Employment Agreement (the "Agreement") dated September 13, 1999, and amended on July 11, 2001; and

WHEREAS, pursuant to the Agreement, the Agreement may be amended by mutual consent of the Company and the Executive; and

WHEREAS, the Company and the Executive desire to amend and restate the Agreement: and

WHEREAS, the Executive is currently the Executive Vice President, Secretary & General Counsel of the Company; and

WHEREAS, the Company recognizes that the Executive has made substantial contributions to the Company and in the future is expected to make substantial contributions to the success of the Company; and

WHEREAS, the Company desires to provide certain assurances to the Executive regarding the terms applicable to certain potential terminations of the Executive's service; and

WHEREAS, the Executive wishes to provide certain assurances to the Company regarding his conduct during the Term of this Agreement and following the Executive's termination of service;

NOW THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein, the Company and the Executive covenant and agree as follows:

1.  Term.  The Term of this Agreement is the period described in the following paragraph (a) and any period for which the same may be extended as provided in the following paragraphs (b) and (c).

(a)  The Term includes the period beginning on April 22, 2003 and ending on December 31, 2005.

(b)  The period described in paragraph (a) shall be extended for an additional twelve months unless the Company, before each September 1 of any year, provides written notice to the Executive that the period will not be extended.  The preceding sentence shall first be effective to extend the period described in paragraph (a) until December 31, 2006, unless written notice to the contrary is provided to the Executive by the Company before September 1, 2003.

(c)  The period described in paragraph (a) shall be extended if there is a Control Change Date during the Term of this Agreement.  In that event, the period described in paragraph (a) shall be extended automatically until the third anniversary of the Control Change Date.  The period described in paragraph (a) shall be further extended by twelve months under this paragraph (c) unless the Company, at least ninety days prior to an anniversary of the Control Change Date, provides written notice to the Executive that the period will not be extended.  The preceding sentence shall first be effective to extend the period described in paragraph (a) (after giving effect to the extension provided in the second sentence of this paragraph (c)), until the fourth anniversary of the Control Change Date unless written notice to the contrary is provided to the Executive at least ninety days prior to the first anniversary of the Control Change Date.

2.  Employment Duties.  The Company agrees to employ the Executive throughout the Term as Executive Vice President, Secretary & General Counsel, with a job description, responsibilities and duties commensurate with such position, or a position of substantially similar or greater responsibilities and duties.

3.  Compensation.  The Company agrees that, throughout the Term, it shall:

(a)    Pay the Executive as compensation for services hereunder a cash salary based on an annual base salary of not less than $250,200 (which base salary shall be reviewed on an annual basis for possible increase in light of business conditions, competitive considerations, increases given to other employees of the Company and the Executive's performance, provided that such salary shall not be reduced below the salary in effect immediately prior to such review).

(b)Provide for the benefit of the Executive such vacation, pension and disability benefits and such coverage under life, accident, medical and dental plans as are generally provided from time to time to the Company's executive employees.

(c)Permit the Executive to participate in the Company's Annual Incentive Program (or such comparable successor program that may be in effect from time to time), with a target incentive amount of not less than 50% of base salary.

(d)Permit the Executive to participate in the Long-Term Incentive Plan (or such comparable successor plan that may be in effect from time to time) as determined from time to time by the Company.  

4.  Change in Control Benefits.  The Executive shall be entitled to receive the severance and welfare benefits and the pension supplement described in this Section 4 if, during the Term of this Agreement, (x) there is a Change in Control and the Executive's employment with the Company and its successors is terminated or terminates after the Control Change Date without Cause or for Good Reason or (y) there is a sale or other divestiture of the business unit of the Company or its successor to which the Executive is assigned and the Executive's employment with the Company and its successors is terminated or terminates after such sale or divestiture without Cause or for Good Reason.

(a)  The severance benefit payable under this Section 4 is an amount equal to the sum of (x) three times the Executive's annual base salary (as in effect on the date the Executive ceases to be employed by the Company and its successors or, if greater, the highest annual rate of base salary as in effect during the twelve months preceding such cessation of employment) and (y) three times the Executive's annual incentive plan target for the year in which the Executive ceases to be employed by the Company and its successors or, if greater, the year preceding such cessation of employment.  The severance benefit described in the preceding sentence shall be reduced by the amount of any severance benefit payable to the Executive under any Chesapeake Corporation severance plan or program.  The severance benefit payable under this Section 4, less applicable income and employment taxes and other authorized deductions, shall be paid in a single sum as soon as practicable following the Executive's cessation of employment with the Company and its successors.

(b)  The welfare benefits provided under this Section 4 are continued coverage of the Executive and the Executive's eligible dependents under all life, disability, medical and dental benefit plans and programs in which the Executive participates immediately prior to the Executive's date of termination on such terms as are then in effect.  In the event that the continued coverage of the Executive or the Executive's eligible dependents in any such plan or program is barred by its terms, the Company shall arrange to provide the Executive and the Executive's eligible dependents with benefits substantially similar to those to which they are entitled to receive under such plans or programs including, by way of example and not of limitation, the reimbursement of the Executive of the cost or premium for continued coverage available pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended ("COBRA").  The continued coverage provided under this Section 4 shall continue until the earlier of (x) the third anniversary of the Executive's cessation of service to the Company and its successors and (y) the date that the Executive is eligible for similar coverage under another employer's plan.

(c)  The pension supplement payable under this Section 4 is an amount equal to the benefit that the Executive would have accrued under the Chesapeake Corporation Executive Supplemental Retirement Plan (the "SERP") had the Executive remained an employee of the Company until the third anniversary of the Executive's cessation of service to the Company and its successors (i.e., recognizing as service with the Company the months during such period and the Executive's attained age as of the end of such period).  The pension supplement payable under this Section 4 shall be reduced, but not below zero, by any benefit that the Executive accrues during such period under any employee pension benefit plan maintained by the Company or its successor.  The present value of the pension supplement payable under this Section 4, less applicable income and employment taxes and other authorized deductions, shall be paid in a single sum to the Executive as soon as practicable following the cessation of the Executive's employment with the Company and its successors.  The present value of the pension supplement payable under this Section 4 and any offset or reductions for benefits provided by the Company or its successor shall be made on an actuarially equivalent basis using the SERP's actuarial assumptions and methods.

(d)  For purposes of this Section 4, "Cause" means the Executive's conviction by a court of competent jurisdiction for, or pleading no contest to, a felony. 

5.  Benefits Prior to a Change in Control.  Subject to the final sentence of this Section 5, the Executive shall be entitled to receive the severance and welfare benefits described in this Section 5 if, during the Term of this Agreement but prior to a Change in Control or the sale or divestiture of the business unit of the Company or its successor to which the Executive is assigned, the Executive's employment with the Company and its successors is terminated by the Company or its successor without Cause.

(a)  The severance benefit payable under this Section 5 is an amount equal to the sum of (x) two times the Executive's annual base salary (as in effect on the date the Executive ceases to be employed by the Company and its successors or, if greater, the highest annual rate of base salary as in effect during the twelve months preceding such cessation of employment) and (y) two times the Executive's annual incentive plan target for the year in which the Executive ceases to be employed by the Company and its successors or, if greater, the year preceding such cessation of employment. The severance benefit described in the preceding sentence shall be reduced by the amount of any severance benefit payable to the Executive under any Chesapeake Corporation severance plan or program.  The severance benefit payable under this Section 5, less applicable income and employment taxes and other authorized deductions, shall be paid in a single sum as soon as practicable following the Executive's cessation of employment with the Company and its successors.

(b)  The welfare benefits provided under this Section 5 are continued coverage of the Executive and the Executive's eligible dependents under all life, disability, medical and dental benefit plans and programs in which the Executive participates immediately prior to the Executive's date of termination on such terms as are then in effect.  In the event that the continued coverage of the Executive or the Executive's eligible dependents in any such plan or program is barred by its terms, the Company shall arrange to provide the Executive and the Executive's eligible dependents with benefits substantially similar to those to which they are entitled to receive under such plans or programs including, by way of example and not of limitation, the reimbursement of the Executive of the cost or premium for continued coverage under COBRA.  The continued coverage provided under this Section 5 shall continue until the earlier of (x) the second anniversary of the Executive's cessation of service to the Company and its successors and (y) the date that the Executive is eligible for similar coverage under another employer's plan.

(c)  For purposes of this Section 5, "Cause" means: (a) conduct involving dishonesty or fraud or activities that may reasonably be expected to have a material adverse effect on the property, business or reputation of the Company; (b) conviction or admission of, or a plea of guilty or no contest to, a felony; (c) breach of any material obligation to the Company; or (d) willful failure to perform duties to the Company which is not corrected within thirty (30) days of prior written notice by the Company to the Executive or willful misconduct in the performance of such duties.

No benefits will be payable or available under this Section 5 unless the Executive executes a release and waiver of the Company in a form satisfactory to the Company and the Executive complies with Sections 6 and 7.

6.  Confidentiality.  During the period of employment with the Company, the Executive has had access to certain confidential, non-public information concerning the Company (the "Information").  The Executive agrees to maintain the Information as confidential and not disclose it to third parties or use it in the Executive's employment with any direct or indirect competitor of the Company or its successors during employment with the Company and its successors and thereafter following a termination of employment described in Section 5.  The Executive agrees that compliance with this confidentiality obligation is a condition precedent to the Executive's right to receive the benefits described in Section 5.

7.  Covenant Not to Compete.  The Executive agrees that he will not take certain actions that would be damaging to the competitive position of the Company or its successor.  By making this commitment, the Executive agrees that during Executive's employment with the Company and its successors and for twelve months thereafter if the Executive's employment ceases as described in Section 5, the Executive will not (x) accept any employment with, ownership interest in, or engagement as a consultant, contractor or service provider to any business engaged in a business that is competitive with the Company or its successor or (y) on behalf of any such business solicit any business that was a customer of the Company or its successor during the preceding twelve months. The Executive understands and agrees that each provision of this Agreement is a separate and independent clause, and if any clause should be found unenforceable, that will not affect the enforceability of the other clauses.  In the event that any of the provisions of this Agreement should ever be deemed to exceed the time, geographic area or activity limitations permitted by applicable law, the Company and the Executive agree that such provisions must be and are reformed to the maximum time, geographic area and activity limitations permitted by applicable law, and expressly authorize a court having jurisdiction to reform the provisions to the maximum time, geographic area and activity limitations permitted by applicable law.

8.  Excise Tax, etc. Indemnity.  One or more benefits provided under this Agreement may constitute "parachute payments" (as defined in Section 280G(b)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code"), but without regard to Code section 280G(b)(2)(A)(ii)).  In that event, the Company shall indemnify and hold the Executive harmless from the application of the tax imposed by Code section 4999.  To effect this indemnification, the Company must pay the Executive an additional amount that is sufficient to pay any excise tax imposed by Code section 4999 on the payments and benefits to which the Executive is entitled (whether payable under this Agreement or any other plan, agreement or arrangement), plus the excise, employment and income taxes on the additional amount.  Such additional amount shall be paid to the Executive at such times as may be necessary for the Executive to satisfy any such tax obligation, including the payment of estimated taxes.

9.  Legal Fees.  The Company or its successor will promptly reimburse the Executive for reasonable legal fees and costs that the Executive may incur in connection with the enforcement of this Agreement.

10.  Definitions.  When used in this Agreement, the following terms shall have the meanings set forth below:
(a)  "Change in Control" has the same meaning, as of any applicable date, as set forth in the Chesapeake Corporation Benefits Plan Trust (as in effect on such date).

(b)  "Control Change Date" has the same meaning, as of any applicable date, as set forth in the Chesapeake Corporation Benefits Plan Trust (as in effect on such date).

(c)  "Good Reason" means (v) a material reduction in the Executive's duties or responsibilities; (w) the failure by the Company or its successor to permit the Executive to exercise such responsibilities as are consistent with the Executive's position; (x) a requirement that the Executive relocate his principal place of employment to a location that is at least fifty miles farther from his principal residence than was his former principal place of employment; (y) the failure by the Company or its successor to award the Executive annual incentive, long-term incentive or stock option opportunities consistent with those provided to similarly situated executives and (z) the failure by the Company or its successor to make a payment when due to the Executive.  

11.  Successors.  This Agreement shall inure to the benefit of and be binding on any successor (whether direct or indirect, by purchase, merger consolidation or otherwise) to all or substantially all of the business and/or assets of the Company in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  This Agreement shall inure to the benefit of and be enforceable by the personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees of the Employee.

12.  Modification, etc.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and a duly authorized officer of the Company.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Virginia, other than its choice of laws provision.

13.  Enforceability.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

14.  Non-Disparagement.  The Company and the Executive agree, that after the Executive's employment with the Company terminates, to refrain from taking any action or making any statements, written or oral, which are intended to disparage the goodwill or reputation of the Company or the Executive.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed on its behalf and the Executive has duly executed this Agreement, all as of the date first above written.

J.P. Causey Jr.CHESAPEAKE CORPORATION

 

/s/ J.P. Causey Jr._________By /s/ Andrew J. Kohut_______________

Date_May 20, 2003_______ Executive Vice President
& Chief Financial Officer[EXECUTION COPY]

                     SECOND AMENDMENT TO CREDIT AGREEMENT

      THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this  "Amendment"),  dated as
of July 10, 2003, is by and among Noveon  International,  Inc. (formerly known
as PMD Group Holdings Inc.) ("Holdings"),  Noveon, Inc. (formerly known as PMD
Group Inc.) (the "Borrower"),  the financial  institutions signatory hereto in
their  capacity as Lenders (as defined  below) under the Credit  Agreement (as
defined below),  Deutsche Bank Trust Company Americas  (formerly named Bankers
Trust Company) as administrative  agent for the Lenders (the  "Administrative
Agent"),  Credit Suisse First  Boston,  as  syndication  agent for the Lenders
(the  "Syndication  Agent" and,  together  with  Deutsche  Bank Trust  Company
Americas, each a joint lead arranger and joint book manager).

                            W I T N E S S E T H :

      WHEREAS,   Borrower,   Holdings,  certain  financial  institutions  (the
"Existing  Lenders"),  Administrative  Agent and Syndication Agent are parties
to that certain Credit  Agreement dated as of February 28, 2001, as amended by
that  certain  First  Amendment  dated as of  October  31,  2002 (as  amended,
restated,  supplemented or otherwise modified and in effect from time to time,
the "Credit Agreement"),  pursuant to which the Existing Lenders have provided
to Borrower credit facilities and other financial accommodations; and

      WHEREAS,  Borrower has requested that Administrative  Agent and Existing
Lenders  amend the Credit  Agreement  in certain  respects as set forth herein
and  Existing  Lenders and  Administrative  Agent are  agreeable  to the same,
subject to the terms and conditions hereof.

      NOW,  THEREFORE,  in  consideration  of the  premises  and of the mutual
covenants  contained  herein,  and other good and valuable  consideration  the
receipt and  adequacy  of which are hereby  acknowledged,  the parties  hereto
hereby agree as follows:

1.    Defined  Terms.  Terms  capitalized  herein  and not  otherwise  defined
herein  are used  with  the  meanings  ascribed  to such  terms in the  Credit
Agreement.

2.    Amendments  to Credit  Agreement.  The  Credit  Agreement  is, as of the
Second  Amendment  Effective  Date,  or such later date as expressly set forth
below, hereby amended as follows:

            (a)   Section 1.1 of the Credit  Agreement is amended by inserting
the following new definitions in alphabetical order therein:

            "New Term B Loans" is defined in Section 2.1(a)(iv).

            "New Term B Dollar Loans" is defined in Section 2.1(a)(iii).

            "New Term B Euro Loans" is defined in Section 2.1(a)(iv).

            "Original Term B Dollar Loans" is defined in Section 2.1(a)(iii).

            "Original Term B Euro Loans" is defined in Section 2.1(a)(iv).

            "Original Term B Loans" is defined in Section 2.1(a)(iv).

            "Second  Amendment" means the Second Amendment to Credit Agreement
dated as of July 10,  2003 by and among the  Borrower,  Holdings,  the Lenders
signatory thereto and the Administrative Agent.

            "Second  Amendment  Effective  Date" has the  meaning set forth in
the Second Amendment.

            (b)   Section 1.1 of the Credit  Agreement  is further  amended by
deleting  the  definition  of  "Applicable  Base Rate  Margin"  therein in its
entirety and replacing it with the following new definition:

            "Applicable  Base Rate Margin" means at any date, (i) with respect
to  Domestic   Revolving  Loans  and  Term  A  Dollar  Loans,  the  applicable
percentage set forth in the following  table under the column  Applicable Base
Rate Margin for Domestic  Revolving Loans and Term A Dollar Loans opposite the
Most Recent  Leverage  Ratio as of such date and (ii) with respect to New Term
B Dollar Loans,  the applicable  percentage  set forth in the following  table
under the  column  Applicable  Base Rate  Margin  for New Term B Dollar  Loans
opposite the Most Recent Leverage Ratio as of such date:

                                APPLICABLE BASE RATE MARGIN FOR DOMESTIC
        MOST RECENT                       REVOLVING LOANS AND
       LEVERAGE RATIO                     TERM A DOLLAR LOANS

     Less than 2.5 to 1                          1.00%

  Equal to or greater than
 2.5 to 1 but less than 3.0                      1.25%
            to 1

  Equal to or greater than
 3.0 to 1 but less than 3.5                      1.50%
            to 1

  Equal to or greater than
 3.5 to 1 but less than 4.0                      1.75%
            to 1

  Equal to or greater than
 4.0 to 1 but less than 4.5                      2.00%
            to 1

  Equal to or greater than                       2.25%
          4.5 to 1

        MOST RECENT                   APPLICABLE BASE RATE MARGIN
       LEVERAGE RATIO                 FOR NEW TERM B DOLLAR LOANS

    Less than 3.25 to 1                          1.75%

  Equal to or greater than                       2.00%
         3.25 to 1

      Notwithstanding  the  foregoing,  solely with  respect to the New Term B
Dollar  Loans,  if the rating for senior  secured  debt shall be Ba3 or higher
according  to Moody's,  then,  for the period such rating  shall be in effect,
the applicable percentage shall be 1.75%."

            (c)   Section 1.1 of the Credit  Agreement  is further  amended by
deleting the definition of  "Applicable  Eurocurrency  Margin"  therein in its
entirety and replacing it with the following new definition:

            "Applicable  Eurocurrency  Margin"  means  at any  date,  (i) with
respect to Domestic  Revolving Loans,  Multicurrency  Revolving Loans,  Term A
Dollar Loans and Term A Euro Loans,  the  applicable  percentage  set forth in
the  following  table  under the  column  Applicable  Eurocurrency  Margin for
Domestic Revolving Loans,  Multicurrency  Revolving Loans, Term A Dollar Loans
and Term A Euro Loans  opposite  the Most Recent  Leverage  Ratio on such date
and (ii) with  respect to New Term B Dollar  Loans and New Term B Euro  Loans,
the applicable  percentage  set forth in the following  table under the column
Applicable  Eurocurrency  Margin  for New Term B Dollar  Loans  and New Term B
Euro Loans opposite the Most Recent Leverage Ratio on such date:

                                 APPLICABLE EUROCURRENCY MARGIN FOR DOMESTIC
                               REVOLVING LOANS, MULTICURRENCY REVOLVING LOANS,
                                           TERM A DOLLAR LOANS AND
        MOST RECENT                           TERM A EURO LOANS
       LEVERAGE RATIO

     Less than 2.5 to 1                             2.00%

  Equal to or greater than
 2.5 to 1 but less than 3.0                         2.25%
            to 1

  Equal to or greater than
 3.0 to 1 but less than 3.5                         2.50%
            to 1

  Equal to or greater than
 3.5 to 1 but less than 4.0                         2.75%
            to 1

  Equal to or greater than
 4.0 to 1 but less than 4.5                         3.00%
            to 1

  Equal to or greater than                          3.25%
          4.5 to 1

        MOST RECENT           APPLICABLE EUROCURRENCY   APPLICABLE EUROCURRENCY
       LEVERAGE RATIO                 MARGIN             MARGIN FOR NEW TERM B
                               FOR NEW TERM B DOLLAR           EURO LOANS
                                       LOANS

    Less than 3.25 to 1                2.50%                     2.75%

  Equal to or greater than             2.75%                     3.00%
         3.25 to 1

      Notwithstanding  the  foregoing,  solely with  respect to the New Term B
Dollar Loans and the New Term B Euro Loans,  if the rating for senior  secured
debt shall be Ba3 or higher  according to Moody's,  then,  for the period such
rating  shall be in  effect,  the  applicable  percentage  shall be 2.50%  and
2.75%,  respectively,  for the New Term B Dollar Loans and the New Term B Euro
Loans."

            (d)   Section 1.1 of the Credit  Agreement  is further  amended by
adding the following new language  immediately at the end of the definition of
"Consolidated Net Income":

            "Notwithstanding  anything  else  herein  to the  contrary,  there
shall  be  (i)  excluded  from  Consolidated  Net  Income  any  gain  or  loss
attributable to the  extinguishment of debt,  including,  without  limitation,
losses  relating  to the  write  off of  deferred  financing  costs;  and (ii)
included in  Consolidated  Net Income any amount  deducted in accordance  with
GAAP in respect of impairment of goodwill and other intangible assets."

            (e)   Section 1.1 of the Credit  Agreement  is further  amended by
adding the following new language  immediately at the end of the definition of
"Excess Cash Flow":

            "plus,  so long as there is no Event of Default or Unmatured Event
of  Default  existing  as of any Excess  Cash  Payment  Date,  and only to the
extent  the  following  are  included  in  clause  (i)(y)  above,  the  Dollar
Equivalent of the average daily balance of cash, Cash  Equivalents and Foreign
Cash Equivalents  held by Foreign  Subsidiaries as of November 30, held during
the period October 1 through and including November 30 of such year."

            (f)   Section 1.1 of the Credit  Agreement  is further  amended by
amending and restating the definition of "Lenders" to read as follows:

            "Lender" and "Lenders"  have the respective  meanings  assigned to
those  terms in the  introduction  to this  Agreement  and shall  include  any
Person that  becomes a "Lender" as  contemplated  by the Second  Amendment  or
Section 12.8.

            (g)   Section 1.1 of the Credit  Agreement  is further  amended by
amending and restating the  definition of "Term B Loan Maturity  Date" to read
as follows:

            "Term B Loan Maturity Date" shall,  following repayment in full of
the Original Term B Loans,  have the meaning,  for purposes of Section 12.1 of
the Credit Agreement, assigned to the term "New Term B Loan Maturity Date".

            (h)   Section 1.l of the Credit  Agreement  is further  amended by
amending and restating the definition of "Term B Lender" to read as follows:

            "Term  B  Lender"  shall,  following  repayment  in  full  of  the
Original Term B Loans,  have the meaning,  for purposes of Section 12.1 of the
Credit Agreement, assigned to the term "New Term B Lender".

            (i)   Section 1.l of the Credit  Agreement  is further  amended by
amending and restating the  definition of "Term B Dollar  Facility" to read as
follows:

            "Term B Dollar  Facility"  shall,  following  repayment in full of
the Original Term B Loans,  have the meaning,  for purposes of Section 12.1 of
the Credit Agreement, assigned to the term "New Term B Dollar Facility".

            (j)   Section 1.l of the Credit  Agreement  is further  amended by
amending and  restating the  definition  of "Term B Euro  Facility" to read as
follows:

            "Term B Euro Facility" shall,  following  repayment in full of the
Original Term B Loans,  have the meaning,  for purposes of Section 12.1 of the
Credit Agreement, assigned to the term "New Term B Euro Facility".

            (k)   Section 1.1 of the Credit  Agreement  is further  amended by
deleting the following definitions set forth therein in their entirety:  "Term
B Dollar  Commitment",  "Term B Dollar Lender",  "Term B Dollar Loan", "Term B
Dollar  Note",  "Term B Dollar  Percentage",  "Term B Dollar Pro Rata  Share",
"Term B Euro Commitment",  "Term B Euro Lender",  "Term B Euro Loan",  "Term B
Euro Note",  "Term B Euro Percentage",  "Term B Euro Pro Rata Share",  "Term B
Loans", "Term B Percentage",  "Scheduled Term B Dollar Repayments", "Scheduled
Term B Euro  Repayments"  and "Scheduled  Term B Repayments"  and inserting in
their place in appropriate alphabetical order the following new definitions:

            "New Term B Dollar  Commitment"  means with respect to any Lender,
the principal  amount set forth opposite such Lender's name on Schedule 1.1(b)
hereto  or in any  Assignment  and  Assumption  Agreement  under  the  caption
"Amount of New Term B Dollar  Commitment",  as such commitment may be adjusted
from  time to time  pursuant  to  this  Agreement,  and  "New  Term B  Dollar
Commitments"  means such commitments  collectively,  which  commitments  equal
$468,574,592.41 in the aggregate as of the Second Amendment Effective Date.

            "New Term B Dollar  Facility"  means the credit facility under the
Agreement  evidenced by the New Term B Dollar  Commitments  and the New Term B
Dollar Loans.

            "New Term B Dollar  Lender"  means any Lender which has a New Term
B  Dollar  Commitment  or is  owed a New  Term B  Dollar  Loan  (or a  portion
thereof).

            "New Term B Dollar  Loan" and "New Term B Dollar  Loans"  have the
meanings assigned to those terms in Section 2.1(a)(iii).

            "New Term B Dollar  Note" and "New Term B Dollar  Notes"  have the
meanings assigned to those terms in Section 2.2(a).

            "New Term B Dollar  Percentage"  means,  at any time,  a  fraction
(expressed as a  percentage)  the numerator of which is equal to the aggregate
principal  amount of all New Term B Dollar Loans  outstanding at such time and
the  denominator  of  which  is  equal  to  the  aggregate  Dollar  Equivalent
principal amount of all Term Loans outstanding at such time.

            "New  Term  B  Dollar  Pro  Rata  Share"  means,  when  used  with
reference  to any New Term B Dollar  Lender  and any  described  aggregate  or
total  amount,  an amount  equal to the result  obtained by  multiplying  such
described  aggregate  or total  amount by a fraction  the  numerator  of which
shall be such New Term B Dollar  Lender's then  outstanding  New Term B Dollar
Loan and the denominator of which shall be the amount of all then  outstanding
New Term B Dollar Loans.

            "New Term B Euro  Commitment"  means with  respect to any  Lender,
the principal  amount set forth opposite such Lender's name on Schedule 1.1(b)
hereto  or in any  Assignment  and  Assumption  Agreement  under  the  caption
"Amount of New Term B Euro  Commitment",  as such  commitment  may be adjusted
from  time  to  time  pursuant  to  this  Agreement,  and  "New  Term  B Euro
Commitments"  means such commitments  collectively,  which  commitments  equal
(euro)65,599,229.48 in the aggregate as of the Second Amendment Effective Date.

             "New Term B Euro  Facility"  means the credit  facility under the
Agreement  evidenced  by the New  Term B Euro  Commitments  and the New Term B
Euro Loans.

            "New Term B Euro  Lender"  means any Lender which has a New Term B
Euro Commitment or is owed a New Term B Euro Loan (or a portion thereof).

            "New  Term B Euro  Loan"  and  "New  Term B Euro  Loans"  have the
meanings assigned to those terms in Section 2.1(a)(iv).

            "New  Term B Euro  Note"  and  "New  Term B Euro  Notes"  have the
meanings assigned to those terms in Section 2.2(a).

            "New  Term B Euro  Percentage"  means,  at any  time,  a  fraction
(expressed as a  percentage)  the numerator of which is equal to the aggregate
Dollar  Equivalent  principal amount of all New Term B Euro Loans  outstanding
at such time and the  denominator  of which is equal to the  aggregate  Dollar
Equivalent principal amount of all Term Loans outstanding at such time.

            "New Term B Euro Pro Rata Share" means,  when used with  reference
to any New Term B Euro Lender and any described  aggregate or total amount, an
amount equal to the result  obtained by multiplying  such described  aggregate
or total amount by a fraction the  numerator of which shall be such New Term B
Euro Lender's then  outstanding  New Term B Euro Loan and the  denominator  of
which shall be the amount of all then outstanding New Term B Euro Loans.

            "New Term B Lenders"  means each New Term B Dollar  Lender and New
Term B Euro Lender.

            "New Term B Loan Maturity Date" means December 31, 2009.

            "New Term B Loans"  means the New Term B Dollar  Loans and the New
Term B Euro Loans.

            "New  Term B  Percentage"  means  for any  Lender  the sum of such
Lender's  New Term B Dollar  Percentage  plus  such  Lender's  New Term B Euro
Percentage.

            "Scheduled New Term B Dollar  Repayments"  means,  with respect to
the principal  payments on the New Term B Dollar Loans for each date set forth
below, the Dollar amount set forth opposite  thereto,  as reduced from time to
time pursuant to Sections 4.3 and 4.4:

            Date                    Repayment
            ----                    ---------

            March 31, 2004          $2,342,872.96

            September 30, 2004      $2,342,872.96

            March 31, 2005          $2,342,872.96

            September 30, 2005      $2,342,872.96

            March 31, 2006          $2,342,872.96

            September 30, 2006      $2,342,872.96

            March 31, 2007          $2,342,872.96

            September 30, 2007      $2,342,872.96

            March 31, 2008          $2,342,872.96

            September 30, 2008      $2,342,872.96

            March 31, 2009          $2,342,872.96

            September 30, 2009      $2,342,872.96

            December 31, 2009       $440,460,116.87 or, if less, the aggregate
                                    principal amount of New Term B Dollar
                                    Loans outstanding

            "Scheduled New Term B Euro Repayments"  means, with respect to the
principal  payments  on the New  Term B Euro  Loans  for each  date set  forth
below,  the Euro amount set forth  opposite  thereto,  as reduced from time to
time pursuant to Sections 4.3 and 4.4:

            Date                    Repayment
            ----                    ---------

            March 31, 2004          (euro)327,996.15

            September 30, 2004      (euro)327,996.15

            March 31, 2005          (euro)327,996.15

            September 30, 2005      (euro)327,996.15

            March 31, 2006          (euro)327,996.15

            September 30, 2006      (euro)327,996.15

            March 31, 2007          (euro)327,996.15

            September 30, 2007      (euro)327,996.15

            March 31, 2008          (euro)327,996.15

            September 30, 2008      (euro)327,996.15

            March 31, 2009          (euro)327,996.15

            September 30, 2009      (euro)327,996.15

            December 31, 2009       (euro)61,663,275.68 or, if less, the
                                    aggregate principal amount of New Term B
                                    Euro Loans outstanding.

            "Scheduled  New  Term  B  Repayments"  means,  collectively,   the
Scheduled  New  Term B Dollar  Repayments  and the  Scheduled  New Term B Euro
Repayments.

            (l)   The Credit  Agreement  is further  amended by deleting  each
occurrence of the terms "Term B Dollar Commitment",  "Term B Dollar Facility",
"Term B Dollar  Lender",  "Term B Dollar Loan",  "Term B Loan Maturity  Date",
"Term B Dollar  Note".  "Term B Dollar  Percentage",  "Term B Dollar  Pro Rata
Share",  "Term  B Euro  Commitment",  "Term  B Euro  Facility",  "Term  B Euro
Lender",  "Term B Euro Loan",  "Term B Euro Note",  "Term B Euro  Percentage",
"Term B Euro  Pro Rata  Share",  "Term B  Lenders",  "Term B  Loans",  "Term B
Percentage",  "Scheduled  Term B Dollar  Repayments",  "Scheduled  Term B Euro
Repayments"  and  "Scheduled  Term B Repayments"  and inserting in their place
the terms "New Term B Dollar Commitment",  "New Term B Dollar Facility",  "New
Term B Dollar  Lender",  "New Term B Dollar  Loan",  "New Term B Loan Maturity
Date",  "New Term Dollar Note".  "New Term B Dollar  Percentage",  "New Term B
Dollar  Pro  Rata  Share",  "New  Term B Euro  Commitment",  "New  Term B Euro
Facility",  "New Term B Euro Lender", "New Term B Euro Loan", "New Term B Euro
Note",  "New Term B Euro Percentage",  "New Term B Euro Pro Rata Share",  "New
Term B Lenders",  "New Term B Loans", "New Term B Percentage",  "New Scheduled
Term B Dollar  Repayments",  "New Scheduled Term B Euro  Repayments"  and "New
Scheduled Term B Repayments",  respectively, provided, that the occurrences of
the terms "Term B Loan Maturity  Date",  Term B Dollar  Facility,  Term B Euro
Facility  and  "Term B  Lenders"  contained  in  Section  12.1  of the  Credit
Agreement shall not be so replaced.

            (m)   Sections  2.1(a)(iii)  and (iv) of the Credit  Agreement are
hereby deleted in their entirety and replaced with the following:

            "(iii)      New  Term  B  Dollar  Loans.   The  Borrower  and  the
Lenders  acknowledge  the  making  of Term B Dollar  Loans  (as such  term was
defined on the Closing Date) in an aggregate  principal amount of $480,000,000
on the Closing Date and Borrower  hereby  agrees,  on the terms and subject to
the conditions  hereinafter set forth and in reliance upon the representations
and  warranties  set forth herein and in the other Loan  Documents,  that such
Term B Dollar Loans (each such Loan, an "Original  Term B Dollar Loan") are on
the  Second  Amendment   Effective  Date  (prior  to  the  repayment  thereof)
outstanding  in  an  aggregate  principal  amount  equal  to  $467,218,270.59.
Subject to the conditions set forth in Section 5 of the Second  Amendment,  in
a single draw on the Second  Amendment  Effective Date, each Lender that has a
New Term B Dollar  Commitment agrees that it will make loans (relative to such
Lender,  its "New  Term B  Dollar  Loans")  to the  Borrower  in an  aggregate
principal  amount  equal to the New Term B Dollar  Commitment  of such  Lender
which New Term B Dollar  Loans shall be applied by the  Borrower in the manner
specified  by Section  6.8(a).  No amounts paid or prepaid with respect to New
Term B Dollar Loans may be reborrowed;

          (iv) New Term B Euro Loans. The Borrower and the Lenders acknowledge
the making of Term B Euro Loans (as such term was defined on the Closing Date)
in an aggregate  principal amount of  (euro)32,733,000 on the Closing Date and
Borrower hereby agrees, on the terms and subject to the conditions hereinafter
set forth and in reliance upon the  representations  and  warranties set forth
herein and in the other Loan Documents, that such Term B Euro Loans (each such
Loan, an "Original  Term B Euro Loan") are on the Second  Amendment  Effective
Date (prior to the repayment  thereof)  outstanding in an aggregate  principal
amount equal to  (euro)30,226,042.33.  Subject to the  conditions set forth in
Section 5 of the Second  Amendment,  in a single draw on the Second  Amendment
Effective Date, each Lender that has a New Term B Euro Commitment  agrees that
it will make loans (relative to such Lender, its "New Term B Euro Loans", and,
together  with the New Term B Dollar  Loans,  the "New Term B Loans"))  to the
Borrower  in an  aggregate  principal  amount  equal  to the  New  Term B Euro
Commitment  of such Lender which New Term B Euro Loans shall be applied by the
Borrower in the manner specified by Section 6.8(a). No amounts paid or prepaid
with respect to New Term B Euro Loans may be reborrowed."

            (n)   The Credit Agreement is further amended by deleting Section
4.2(b) set forth therein and inserting in its place the following:

            "(b)  Reduction  of  Term  A  Dollar  Commitments,  Term  A  Euro
Commitments,  New Term B Dollar  Commitments and New Term B Euro  Commitments.
The Term A Dollar  Commitments and Term A Euro  Commitments  terminated on the
Initial  Borrowing  Date,  after giving  effect to the Borrowing of the Term A
Dollar  Loans and Term A Euro  Loans.  The New Term B Dollar  Commitments  and
New Term B Euro Commitments shall terminate on the Second Amendment  Effective
Date after giving  effect to the  Borrowing of the New Term B Dollar Loans and
New Term B Euro Loans on such date."

            (o)   Section 4.3(a) of the Credit  Agreement is hereby amended by
(i)  inserting  after  the  phrase  "First  Amendment  Voluntary   Prepayment"
appearing  in  Clause  (v)  thereof  the  phrase  "or a  voluntary  prepayment
consisting  of Net Offering  Proceeds of the New Term B Loans",  (ii) deleting
the "and"  immediately  before  clause (vi)  thereof and (iii)  inserting  the
following  immediately  before the "." at the end of such clause (vi):  "; and
(vii) the Net  Offering  Proceeds  of the New Term B Loans shall be applied in
the manner specified in Section 6.8".

            (p)   The first  parenthetical  contained in Section 4.4(c) of the
Credit  Agreement  is amended by deleting the second  occurrence  of the terms
"Term B Dollar  Percentage"  and "Term B Dollar  Loans" and inserting in their
place  the  terms  "Term  B  Euro   Percentage"   and  "Term  B  Euro  Loans",
respectively.

            (q)   Section 4.4(d) of the Credit  Agreement is hereby amended by
deleting the second  occurrence  of the terms "Term B Dollar  Percentage"  and
"Term B Dollar  Loans"  contained in the  parenthetical  set forth therein and
inserting in their place the terms "Term B Euro  Percentage"  and "Term B Euro
Loans", respectively.

            (r)   The parenthetical  set forth immediately  before the proviso
in Section  4.4(e) of the Credit  Agreement  is amended by deleting the second
occurrence of the terms "Term B Dollar  Percentage"  and "Term B Dollar Loans"
and  inserting in their place the terms "Term B Euro  Percentage"  and "Term B
Euro Loans", respectively.

            (s)   Section 6.8(a) of the Credit  Agreement is hereby amended by
adding the following new sentence immediately at the end thereof:

            "An amount equal to 100% of the Net Offering  Proceeds of New Term
B Loans shall be applied first to the unpaid  principal amount of (and accrued
and  unpaid  interest  and fees  upon) the  Original  Term B Dollar  Loans and
Original  Term B Euro Loans,  on a pro rata basis,  next, to the Term A Dollar
Loans to be applied  within such Term A Dollar Loans to the  Scheduled  Term A
Dollar  Repayments  due within the 12 month period  following the date of such
prepayment in direct order of maturity,  thereafter, pro rata to all remaining
Scheduled  Term A Dollar  Repayments  and next, to the Term A Euro Loans to be
applied within such Term A Euro Loans to the Scheduled Term A Euro  Repayments
due  within  the 12 month  period  following  the date of such  prepayment  in
direct order of maturity and, thereafter,  pro rata to all remaining Scheduled
Term A Euro Repayments."

            (t)   Section 8.5 of the Credit  Agreement is amended by inserting
a new sentence at the end of such Section to read as follows:

            "Notwithstanding  anything  else in this Section to the  contrary,
the  Borrower  may make  Restricted  Payments  to Holdings in an amount not to
exceed (i) 25% of the  Borrower's  Consolidated  Net Income  arising  from and
after the first day of the fiscal  quarter  immediately  preceding  the Second
Amendment  Effective  Date provided that the following  conditions  are met at
the time of any such Restricted Payment:  (A) no Event of Default or Unmatured
Event of Default  then  exists or would  occur as a result of such  Restricted
Payment;  (B) the Borrower would have Available  Liquidity of no less than $50
million after giving effect to the  Restricted  Payment;  and (C) the Leverage
Ratio would be no more than 3.25:1.00  after giving effect to such  Restricted
Payment and (ii) in an amount not to exceed  $2,000,000  in the  aggregate  in
any  fiscal  year  to  pay  cash  fees  and  expenses   owed  by  Holdings  to
non-Affiliates  of Holdings  incurred solely in connection with debt or equity
financings  (regardless of whether any such financing is actually consummated)
which would be permitted  hereunder.  All amounts  received by Holdings  under
clause  (i) of  the  previous  sentence  may  be  used  by  Holdings  to  make
Restricted Payments or for any other purpose."

            (u)   Section 9.5 of the Credit  Agreement shall be deleted in its
entirety and replaced with the phrase "Intentionally Omitted".

            (v)   A  new  Schedule  1.1(b)  is  hereby  added  to  the  Credit
Agreement  to read as the  Schedule  1.1(b)  that is  attached  to the  Second
Amendment.

            (w)   The Credit Agreement is further amended by deleting Exhibit
2.2(a)(3),  Exhibit  2.2(a)(4)  and Exhibit  12.8(c)  thereto and inserting in
their place Exhibit  2.2(a)(3),  Exhibit 2.2(a)(4) and Exhibit 12.8(c) hereto,
respectively.

     3. Fees.  In  consideration  of the  execution  of this  Agreement by the
Administrative  Agent and the Required Lenders,  the Borrower hereby agrees to
pay to each Lender which  executes and delivers this  Agreement on or prior to
3:00 p.m. (New York City time) July 2, 2003 a fee (the "Amendment  Fee") in an
amount equal to (a) such Lender's  Revolving  Commitment as in effect prior to
the  Second  Amendment  Effective  Date plus the Dollar  Equivalent  aggregate
outstanding  principal  amount of such  Lender's Term A Loans in effect on the
Second  Amendment  Effective  Date  (after  giving  effect to any  prepayments
thereof on the Second Amendment Effective Date) multiplied by (b) 0.10%.

     4.  Representations  and  Warranties.  In order to induce  Administrative
Agent and the  Lenders  to enter into this  Amendment,  each of  Borrower  and
Holdings  hereby  represents  and  warrants  to  Administrative  Agent and the
Lenders, in each case after giving effect to this Amendment, as follows:

     (a)  Each of the  Borrower  and  Holdings  has the  corporate  power  and
authority  and  has  been  duly  authorized  by all  requisite  corporate  and
shareholder action to execute,  deliver and perform its respective obligations
under this Amendment and all agreements,  documents and  instruments  executed
and delivered pursuant to this Amendment.

     (b) This  Amendment  constitutes  each of the  Borrower's  and  Holdings'
legal,  valid  and  binding  obligation,  enforceable  against  it,  except as
enforcement thereof may be subject to the effect of any applicable bankruptcy,
insolvency,  reorganization,  moratorium or similar laws affecting  creditors'
rights generally and general  principles of equity (regardless of whether such
enforcement is sought in a proceeding in equity or at law or otherwise).

     (c) The representations and warranties  contained in the Credit Agreement
and the other Loan Documents are true and correct in all material  respects at
and as of the Second Amendment  Effective Date as though made on and as of the
Second Amendment  Effective Date (except to the extent  specifically made with
regard to a particular date, in which case such representation and warranty is
true and correct in all material respects as of such particular date).

     (d)  Each  of  the  Borrower's  and  Holdings'  execution,  delivery  and
performance of this  Amendment do not and will not violate its  Certificate of
Incorporation or By-laws,  any law, rule,  regulation,  order, writ, judgment,
decree or award  applicable  to it or any  contractual  provision  (except  as
otherwise  expressly  waived  hereby) to which it is a party or to which it or
any of its property is subject.

     (e) No  authorization or approval or other action by, and no notice to or
filing or  registration  with, any  governmental  authority or regulatory body
(other  than those  which have been  obtained  and are in force and effect) is
required  in  connection  with the  execution,  delivery  and  performance  by
Borrower,  Holdings  or any  other  Credit  Party  of this  Amendment  and all
agreements,  documents and instruments executed and delivered pursuant to this
Amendment.

     (f) No Event of Default or  Unmatured  Event of Default  exists under the
Credit  Agreement or would exist after  giving  effect to the  amendments  and
transactions contemplated by this Amendment.

     5. Conditions to Effectiveness of Amendment.  This Amendment shall become
effective on the first date (the "Second Amendment Effective Date") upon which
each of the following conditions precedent is satisfied:

     (a)  Execution  and  Delivery  of   Amendment.   Borrower,   Holdings,
Administrative  Agent, the Required  Lenders,  the Majority Term A Lenders,
Majority  Term A Euro  Lenders  and  each  Lender  with a New Term B Dollar
Commitment or New Term B Euro Commitment  shall have executed and delivered
this Amendment.

     (b)  Execution   and  Delivery  of  Corporate  and  Other   Documents.
Administrative  Agent shall have received each of the following  documents,
all of which shall be  reasonably  satisfactory  in form and  substance  to
Administrative Agent and its counsel:

                    (1) A certificate of a Responsible Officer of Holdings and
          the Borrower in the form of Exhibit A attached hereto;

                    (2) A Reaffirmation of Guaranty  executed by a Responsible
          Officer  of the  Subsidiary  Guarantors  in the  form of  Exhibit  B
          attached hereto;

                    (3)  An  opinion  of  Fried,  Frank,  Harris,   Shriver  &
          Jacobson,  special  counsel  to the  Credit  Parties,  addressed  to
          Administrative  Agent and each of the  Lenders  and dated the Second
          Amendment  Effective  Date,  which  shall be in form  and  substance
          reasonably  satisfactory to the Administrative Agent and shall cover
          such matters incident to the transactions contemplated herein and in
          the other Loan Documents as the Administrative Agent or the Required
          Lenders may reasonably request;

                    (4) A certificate,  dated the Second  Amendment  Effective
          Date, signed by the secretary or any assistant  secretary of each of
          Borrower and Holdings,  in the form of Exhibit  5.1(f) to the Credit
          Agreement  with  appropriate  insertions,  as to the  incumbency and
          signature  of the officers of each of Borrower and Holdings (in form
          and  substance   satisfactory  to  Administrative   Agent)  and  any
          certificate or other document or instrument to be delivered pursuant
          hereto or thereto by or on behalf of Borrower or Holdings,  together
          with  evidence of the  incumbency  of such  Secretary  or  Assistant
          Secretary,  and certifying as true and correct,  attached  copies of
          the  Certificate  of  Incorporation  and  By-Laws  of  Borrower  and
          Holdings  (or  certifying  that  there  has been no  change  in such
          Certificate of Incorporation and By-Laws from those delivered to the
          Lenders on the Effective  Date) and the  resolutions of Borrower and
          Holdings  referred to in such  certificate  and all of the foregoing
          (including each such Certificate of Incorporation and By-Laws) shall
          be satisfactory to Administrative Agent or the Required Lenders; and

                    (5) Good  standing  certificates  for each of Borrower and
          Holdings from their respective jurisdictions of incorporation.

          (c)  Payment  of Second  Amendment  Effective  Date  Amendment  Fee.
Borrower  shall have paid in full to  Administrative  Agent the  Amendment Fee
required by Section 3 hereof.

          (d)   Representations   and  Warranties.   The  representations  and
warranties of the Borrower, Holdings and the other Credit Parties contained in
this  Amendment,  the Credit  Agreement and the other Loan Documents  shall be
true and correct in all material respects as of the Second Amendment Effective
Date,  with the same effect as though made on such date,  except to the extent
that any such  representation or warranty relates to an earlier date, in which
case such representation or warranty shall be true and correct in all material
respects as of such earlier date.

          (e) No Defaults.  No Unmatured  Event of Default or Event of Default
under the Credit Agreement shall have occurred and be continuing.

          6.  Miscellaneous.  The  parties  hereto  hereby  further  agree  as
follows:

          (a) Costs,  Expenses and Taxes.  Borrower  hereby  agrees to pay all
reasonable  fees,  costs and  expenses  of  Administrative  Agent  incurred in
connection with the  negotiation,  preparation and execution of this Amendment
and the transactions contemplated hereby, including,  without limitation,  the
reasonable   fees  and   expenses   of  Winston  &  Strawn,   counsel  to  the
Administrative Agent.

          (b)  Counterparts.  This  Amendment  may be  executed in one or more
counterparts any of which may be a facsimile and each of which,  when executed
and  delivered,   shall  be  deemed  to  be  an  original  and  all  of  which
counterparts,  taken together,  shall constitute but one and the same document
with the same force and effect as if the signatures of all of the parties were
on a single counterpart, and it shall not be necessary in making proof of this
Amendment to produce more than one (1) such counterpart.

          (c) Headings. Headings used in this Amendment are for convenience of
reference only and shall not affect the construction of this Amendment.

          (d) Integration. This Amendment and the Credit Agreement (as amended
hereby)  constitute the entire agreement among the parties hereto with respect
to the subject matter hereof.

          (e)  Governing  Law.  THIS  AMENDMENT  SHALL  BE  GOVERNED  BY,  AND
CONSTRUED AND ENFORCED IN ACCORDANCE  WITH, THE INTERNAL LAWS AND DECISIONS OF
THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES).

          (f) Binding  Effect.  This Amendment shall be binding upon and inure
to the benefit of and be  enforceable  by Holdings,  Borrower,  Administrative
Agent and Lenders  and their  respective  successors  and  assigns.  Except as
expressly  set  forth to the  contrary  herein,  this  Amendment  shall not be
construed  so as to confer  any right or benefit  upon any  Person  other than
Holdings, Borrower,  Administrative Agent and the Lenders and their respective
successors and permitted assigns.

          (g) Amendment; Waiver. The parties hereto agree and acknowledge that
nothing  contained  in this  Amendment  in any  manner  or  respect  limits or
terminates any of the  provisions of the Credit  Agreement or any of the other
Loan Documents  other than as expressly set forth herein and further agree and
acknowledge  that the Credit  Agreement  (as  amended  hereby) and each of the
other  Loan  Documents  remain and  continue  in full force and effect and are
hereby  ratified  and  confirmed.  Except to the  extent  expressly  set forth
herein, the execution,  delivery and effectiveness of this Amendment shall not
operate  as  a  waiver  of  any   rights,   power  or  remedy  of  Lenders  or
Administrative  Agent under the Credit  Agreement or any other Loan  Document,
nor constitute a waiver of any provision of the Credit  Agreement or any other
Loan Document.  No delay on the part of any Lender or Administrative  Agent in
exercising any of their  respective  rights,  remedies,  powers and privileges
under the Credit  Agreement or any of the Loan  Documents or partial or single
exercise thereof,  shall constitute a waiver thereof.  On and after the Second
Amendment  Effective  Date each  reference  in the Credit  Agreement  to "this
Agreement,"  "hereunder," "hereof," "herein" or words of like import, and each
reference  to the  Credit  Agreement  in the  Loan  Documents  and  all  other
documents  delivered in connection with the Credit Agreement shall mean and be
a reference to the Credit  Agreement as amended hereby.  Holdings and Borrower
acknowledge  and agree that this Amendment  constitutes a "Loan  Document" for
purposes of the Credit Agreement,  including, without limitation, Section 10.1
of the Credit  Agreement.  None of the terms and  conditions of this Amendment
may be changed, waived, modified or varied in any manner,  whatsoever,  except
in accordance with Section 12.1 of the Credit Agreement.

          (h) New Term B Lenders. Holdings, Borrower, Administrative Agent and
the Required Lenders acknowledge that each lender signatory hereto that is not
heretofore  a "Lender"  under the Credit  Agreement,  subject to all the terms
contained therein,  shall, upon the Second Amendment  Effective Date, become a
"Lender" under the Credit Agreement by its execution and delivery hereof. Each
lender  signatory  hereto that is not  heretofore a "Lender"  under the Credit
Agreement  agrees  to  perform  in  accordance  with  their  terms  all of the
obligations  which by the  terms  of the Loan  Documents  are  required  to be
performed by a Lender.

                           [Signature Page Follows]

<PAGE>

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

                                    NOVEON, INC.

                                    By: /s/ Sean M. Stack
                                       ------------------------------------
                                    Name: Sean M. Stack
                                    Title: V.P. & treasurer

                                    NOVEON INTERNATIONAL, INC.

                                    By: /s/ Sean M. Stack
                                       ------------------------------------
                                    Name: Sean M. Stack
                                    Title: V.P. & treasurer

<PAGE>

                                    DEUTSCHE BANK TRUST COMPANY AMERICAS, in
                                    its individual capacity and as
                                    Administrative Agent

                                    By: /s/ Marco Orlando
                                       ------------------------------------
                                    Name: Marco Orlando
                                    Title:
<PAGE>

                                    CREDIT SUISSE FIRST BOSTON, in its
                                    individual capacity and as Syndication
                                    Agent

                                    By: /s/ S. William Fox
                                       ------------------------------------
                                    Name: S. William Fox
                                    Title: Director

                                    By: /s/ David J. Dodd
                                       ------------------------------------
                                    Name: David J. Dodd
                                    Title: Associate
<PAGE>

                         [Name of Lending Institution]

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

<PAGE>

                                  EXHIBIT A
                                  ---------

                            CERTIFICATE OF OFFICER
                            ----------------------

      I,  the   undersigned,   the   Insert   Title  of  Noveon,   Inc.   (the
"Borrower"),    and    Insert    Title   of   Noveon    International,    Inc.
("Holdings"),   in  accordance  with  Section  5(b)  of  that  certain  Second
Amendment  to Credit  Agreement  dated as of July 10,  2003 (the  "Agreement")
among  Holdings,  the  Borrower,  Deutsche  Bank Trust  Company  Americas,  as
Administrative  Agent,  Credit Suisse First Boston as Syndication  Agent,  and
the financial  institutions signatory thereto as Lenders, do hereby certify on
behalf of Borrower and Holdings, the following:

      1.    The  representations  and warranties set forth in Section 4 of the
            Agreement are true and correct in all material  respects as of the
            date  hereof  except  to  the  extent  such   representations  and
            warranties  are  expressly  made as of a  specified  date in which
            event such  representations  and warranties  were true and correct
            in all material respects as of such specified date;

      2.    No Event of  Default  or  Unmatured  Event of  Default  (except as
            otherwise  expressly  waived by the Agreement) has occurred and is
            continuing after giving effect to the Agreement; and

      3.    The  conditions  of  Section 5 of the  Agreement  have been  fully
            satisfied.

      Unless  otherwise  defined herein,  capitalized  terms used herein shall
have the meanings set forth in the Agreement.

                           [signature page follows]

<PAGE>

      IN WITNESS  WHEREOF,  the undersigned has duly executed and delivered on
behalf of Borrower and Holdings  this  Certificate of Officer on this 10th day
of July, 2003.

NOVEON, INC.                               NOVEON INTERNATIONAL, INC.

By: /s/ Sean M. Stack                      By: /s/ Sean M. Stack
   ------------------------------------       ---------------------------------
Name: Sean M. Stack                        Name: Sean M. Stack
Title: V.P. & treasurer                    Title: V.P. & treasurer

<PAGE>

                                  EXHIBIT B

                          REAFFIRMATION OF GUARANTEE
                          --------------------------

      Each of the  undersigned  acknowledges  receipt  of a copy of the Second
Amendment to Credit Agreement (the "Agreement";  capitalized terms used herein
shall,  unless  otherwise  defined herein,  have the meanings  provided in the
Agreement)  dated  as of  July  10,  2003,  by and  among  Noveon,  Inc.  (the
"Borrower"),  Noveon  International,  Inc.  ("Holdings"),  Deutsche Bank Trust
Company  Americas,  as  Administrative  Agent,  Credit Suisse First Boston, as
Syndication  Agent,  and  the  financial  institutions  signatory  thereto  as
Lenders,  consents  to  the  execution,   delivery  and  performance  of  such
Agreement by each of Holdings  and  Borrower and consents to the  consummation
of each of the  transactions  referenced in the Agreement and hereby reaffirms
its obligations under the Subsidiary  Guaranty,  including without limitation,
its guaranty of obligations in respect of the New Term B Loans.

Dated as of July 10, 2003.

NOVEON IP HOLDINGS CORP.,                  NOVEON TEXTILE CHEMICALS, INC.,
as a Guarantor                             as a Guarantor

By: /s/ Sean M. Stack                      By: /s/ Sean M. Stack
   ------------------------------------       ---------------------------------
Name: Sean M. Stack                        Name: Sean M. Stack
Title: Treasurer                           Title: Treasurer

PERFORMANCE MATERIALS I INC.,              NOVEON KALAMA, INC.,
as a Guarantor                             as a Guarantor

By: /s/ Sean M. Stack                      By: /s/ Sean M. Stack
   ------------------------------------       ---------------------------------
Name: Sean M. Stack                        Name: Sean M. Stack
Title: Treasurer                           Title: Treasurer

PERFORMANCE MATERIALS II LLC,              NOVEON DIAMALT INC.,
as a Guarantor                             as a Guarantor

By Noveon, Inc., its sole member           By: /s/ Sean M. Stack
                                              ---------------------------------
By: /s/ Sean M. Stack                      Name: Sean M. Stack
   ------------------------------------    Title: Treasurer
Name: Sean M. Stack
Title: Vice President and Treasurer        NOVEON HILTON DAVIS, INC.
                                           as a Guarantor

NOVEON FCC, INC.                           By: /s/ Sean M. Stack
as a Guarantor                                ---------------------------------
                                           Name: Sean M. Stack
By: /s/ Sean M. Stack                      Title: Treasurer
   ------------------------------------
Name: Sean M. Stack                        NOVEON HOLDING CORPORATION
Title: Treasurer                           as a Guarantor

NOVEON CHINA, INC.                         By: /s/ Sean M. Stack
as a Guarantor                                ---------------------------------
                                           Name: Sean M. Stack
By: /s/ Sean M. Stack                      Title: Treasurer
   ------------------------------------
Name: Sean M. Stack                        FCC ACQUISITION CORP.
Title: Treasurer                           as a Guarantor

                                           By: /s/ Sean M. Stack
                                              ---------------------------------
                                           Name: Sean M. Stack
                                           Title: Treasurer

<PAGE>

                               SCHEDULE 1.1(b)
                               ---------------

   Name of Lender      Amount of New Term B     Amount of New Term B Euro
                        Dollar Commitment               Commitment

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]