Document:

Exhibit 10.1

 

EXECUTION
VERSION

 

Certain sections of this
document have been the subject of a confidential treatment request.  Any text that has been removed pursuant to
Rhodia’s confidential treatment request has been separately submitted to the U.S.
Securities and Exchange Commission. 
Deleted text herein is marked [“***”]. 
Where several pages of text have been deleted the number of pages
removed has been noted.

 

SECURED
CO-ORDINATION AGREEMENT

 

DATED 23RD DECEMBER, 2003

 

BETWEEN

 

RHODIA S.A.

the Company and the Guarantor

 

BORROWING GROUP MEMBERS

 

THE LENDERS

 

and

 

BNP PARIBAS

as Intercreditor Agent

 

and

 

FACILITY AGENTS

 

THIS AGREEMENT IS ENTERED INTO WITH THE BENEFIT OF AND
SUBJECT TO THE TERMS OF A SECURITY SHARING AGREEMENT AND SUBORDINATION
AGREEMENT WHEN ENTERED INTO

 

ALLEN
& OVERY

 

PARIS

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	 

	
  1.

  	
   

  	
  Interpretation

  	
   

  	 

	
  2.

  	
   

  	
  Conditions
  precedent

  	
   

  	 

	
  3.

  	
   

  	
  Secured Intercreditor
  Period

  	
   

  	 

	
  4.

  	
   

  	
  Affected
  Facilities

  	
   

  	 

	
  5.

  	
   

  	
  Payments

  	
   

  	 

	
  6.

  	
   

  	
  New Guarantee

  	
   

  	 

	
  7.

  	
   

  	
  Mandatory
  prepayment and cancellation

  	
   

  	 

	
  8.

  	
   

  	
  Representations and
  warranties

  	
   

  	 

	
  9.

  	
   

  	
  Undertakings

  	
   

  	 

	
  10.

  	
   

  	
  Financial
  covenants

  	
   

  	 

	
  11.

  	
   

  	
  Default

  	
   

  	 

	
  12.

  	
   

  	
  The Administrative Parties

  	
   

  	 

	
  13.

  	
   

  	
  Expenses

  	
   

  	 

	
  14.

  	
   

  	
  Changes
  to the Parties

  	
   

  	 

	
  15.

  	
   

  	
  Amendments
  and waivers

  	
   

  	 

	
  16.

  	
   

  	
  Confidentiality

  	
   

  	 

	
  17.

  	
   

  	
  Stamp duties

  	
   

  	 

	
  18.

  	
   

  	
  Indemnities

  	
   

  	 

	
  19.

  	
   

  	
  Co-ordinating
  Committee

  	
   

  	 

	
  20.

  	
   

  	
  Severability

  	
   

  	 

	
  21.

  	
   

  	
  Counterparts

  	
   

  	 

	
  22.

  	
   

  	
  Notices

  	
   

  	 

						

 

 

	
  23.

  	
   

  	
  Language

  	
   

  	 

	
  24.

  	
   

  	
  Jurisdiction

  	
   

  	 

	
  25.

  	
   

  	
  Waiver of immunity

  	
   

  	 

	
  26.

  	
   

  	
  Governing law

  	
   

  	 

	
  Schedules

  	
   

  
	
  1.

  	
   

  	
  Various Parties

  	
   

  	 

	
   

  	
   

  	
  Part 1

  	
  The Borrowing
  Group

  	
   

  	 

	
   

  	
   

  	
  Part
  2

  	
  The
  Original Obligors

  	
   

  	 

	
   

  	
   

  	
  Part 3

  	
  Original Lenders

  	
   

  	 

	
   

  	
   

  	
  Part 4

  	
  Facility Agents

  	
   

  	 

	
  2.

  	
   

  	
  Conditions precedent documents

  	
   

  	 

	
   

  	
   

  	
  Part
  1

  	
  Conditions
  Precedent documents to be provided in form and substance satisfactory to each
  Original Lender are marked with an asterisk (*)

  	
   

  	 

	
   

  	
   

  	
  Part 2

  	
  Conditions precedent
  documents

  	
   

  	 

	
   

  	
   

  	
  Part
  3

  	
  Additional
  Obligor Conditions Precedent Documents

  	
   

  	 

	
  3.

  	
   

  	
  The Existing Facilities, Affected Facilities
  and Exposures

  	
   

  	 

	
  4.

  	
   

  	
  Security—Existing Security Interests

  	
   

  	 

	
  5.

  	
   

  	
  Accession Agreement

  	
   

  	 

	
  6.

  	
   

  	
  Business Plan including Liquidity Analysis

  	
   

  	 

	
   

  	
   

  	
  Part 1

  	
  Rhodia Business
  Plan After Disposals

  	
   

  	 

	
   

  	
   

  	
  Part 2

  	
  Liquidity
  Analysis

  	
   

  	 

	
  7.

  	
   

  	
  Inter-Company Loans

  	
   

  	 

	
   

  	
   

  	
  Part 1

  	
  Intercompany
  Loans/Borrowings between Rhodia S.A. and its Subsidiaries

  	
   

  	 

	
   

  	
   

  	
  Part 2

  	
  Intercompany
  Loans/Borrowings between the Rhodia Subsidiaries (as of 30th November, 2003)

  	
   

  	 

	
  8.

  	
   

  	
  ERISA Events

  	
   

  	 

	
  9.

  	
   

  	
  Agreed Lease Amendment Principles

  	
   

  	 

	
  10.

  	
   

  	
  Form of Compliance Certificate

  	
   

  	 

	
  11.

  	
   

  	
  Agreed Security Principles

  	
   

  	 

	
   

  	
   

  	
  Part 1

  	
  General

  	
   

  	 

	
   

  	
   

  	
  Part 2

  	
  Secured Assets

  	
   

  	 

	
   

  	
   

  	
  Part 3

  	
  Beneficiaries

  	
   

  	 

	
   

  	
   

  	
  Part 4

  	
  Security Sharing Principles

  	
   

  	 

	
  Signatories

  	
   

  	
   

  
									

 

 

THIS
AGREEMENT is dated
23rd December, 2003 between:

 

(1)                                  RHODIA S.A. (a company incorporated in France
(Registered No. 352-170-161) with its registered office at 26 quai Alphonse Le
Gallo 92100 Boulogne Billancourt) (the Company);

 

(2)                                  BORROWING GROUP MEMBERS listed in Part 2 of Schedule 1 (each an Original Obligor and together the Original Obligors);

 

(3)                                  RHODIA S.A. (the Guarantor);

 

(4)                                  THE FINANCIAL INSTITUTIONS listed in Part 3 of Schedule 1 (the Original Lenders);

 

(5)                                  BNP PARIBAS as intercreditor agent for the Lenders (in
this capacity the Intercreditor Agent);
and

 

(6)                                  AGENTS UNDER AFFECTED
FACILITIES listed in Part 4
of Schedule 1 (each a Facility Agent,
together the Facility Agents).

 

IT IS
AGREED as follows:

 

 

1.                                      INTERPRETATION

 

1.1                               Definitions

 

In this Agreement:

 

Additional Obligor means a Borrowing Group Member which becomes an Obligor after the date
of this Agreement.

 

Accession Agreement means an agreement in the form of Schedule 5 (Accession Agreement)
with such amendments as the Intercreditor Agent may approve or reasonably
require.

 

Affected Facility means each of the facilities referred to in Schedule 3 and designated as
“Affected Facilities” and in respect of which the relevant Lender is a Party to
this Agreement.

 

Affected Facility Agreement means any Facility Agreement constituting or
evidencing any Affected Facility.

 

Affiliate means a Subsidiary or a Holding Company of a person or any other
Subsidiary of that Holding Company.

 

Agent
means the Intercreditor Agent and/or the Security Agent.

 

Agreed Lease Amendment Principles means the agreed lease amendment principles
set out in Schedule 9 (Agreed Lease Amendment Principles).

 

Agreed Security Principles means the security principles set out in
Schedule 11.

 

Asset
means:

 

(a)                                  each asset of the Group included in the Asset
Disposal Programme from time to time;

 

(b)                                 any shares or capital stock or equivalent in
any member of the Group; and

 

(c)                                  any assets which are disposed of under Clause
9.9(b)(iv), (but excluding, for the avoidance of doubt, assets disposed of
under Clause 9.9(b)(i), (ii) and (iii)).

 

Asset Disposal Programme means together:

 

(a)                                  an asset disposal programme generating net
cash proceeds of not less than €400,000,000 by no later than 30th June, 2004
(of which no less than €200,000,000 is actually received by the Company in cash
by that date without condition, with the balance to be received in cash, subject
only to satisfaction of conditions outside the control of the buyer or seller
(or their respective affiliates) under binding sale and purchase agreements
entered into prior to 30th June, 2004, and where such balance is actually
received in cash in any event on or before 31st December, 2004); and

 

(b)                                 an additional asset disposal programme
generating additional net cash proceeds of not less than €700,000,000 minus the
net cash proceeds generated from the first disposal programme referred to in
paragraph (a) above, to be received by the Company by no later than 31st
December, 2004,

 

in each case where net cash proceeds means cash proceeds net
of any Taxes payable in the financial year in which the disposal is effected or
proceeds received and reasonable third party costs and expenses attributable to
the disposal, receipt or recovery, as set out in reasonable detail in a
certificate provided to the Intercreditor Agent by the chief financial officer
of the Company.

 

Borrowing Group means each entity listed in Part 1 of Schedule 1.

 

Borrowing Group Member means each member of the Borrowing Group.

 

Business Day means a day (other than a Saturday or a Sunday) on which banks are
generally open for business in London and Paris and:

 

(a)                                  if on that day a payment in or a purchase of
a currency (other than Euro), is to be made, the principal financial centre of
that currency; or

 

(b)                                 if on that day a payment in or a purchase of
Euro is to be made, which is also a Target Day.

 

Business Plan means the business plan to be provided by the Company to the Lenders
as updated on a quarterly basis to include the liquidity analysis in the form
set out in Schedule 6 (Business Plan including Liquidity Analysis).

 

 

Calculation Point means 5.00 p.m. (Paris time) on 30th November, 2003.

 

Code
means the United States Internal Revenue Code of 1986, as amended and the rules
and regulations promulgated thereunder from time to time in effect.

 

Commencement Date means the date on which the Intercreditor Agent provides the
notification to each Party as specified in Clause 2 (Conditions Precedent).

 

Compliance Certificate means a certificate signed by the chief
financial officer or statutory auditors of the Company, as applicable,
substantially in the form of Schedule 10.

 

Co-ordinating Committee means the committee appointed in accordance
with a co-ordinating committee letter dated 30th November, 2003.

 

Dangerous Substance means any radioactive emissions, noise and any natural or artificial
substance (in whatever form) the generation, transportation, storage, treatment
or disposal of which (whether alone or in combination with any other substance)
gives rise to a risk of causing harm to man or any other living organism or
damaging the Environment or public health or welfare including (without
limitation) any controlled, special, hazardous, toxic, radioactive or dangerous
waste.

 

Declared Default means (following a request by any Lender) a notification by the
Intercreditor Agent (acting on the instructions of the Majority Lenders) that
an Event of Default has occurred and is outstanding.

 

Default means (a) an Event of Default; or (b) an event or circumstance which
with the expiry of a grace period, the giving of notice, lapse of time,
determination of materiality or fulfilment of any other applicable condition
(or any combination of the foregoing) is likely to constitute an Event of
Default.

 

Derivative Deposit means, in relation to Lenders under Derivative Instruments referred to
in Schedule 3, the deposit or payment of collateral in an amount equal to the
positive difference (if any) by which that Lender’s Exposure in respect of
Derivative Instruments on the last Business Day of each calendar month exceeds
its maximum Exposure in respect of Derivative Instruments as set out against
its name in Schedule 3 up to a maximum aggregate amount not exceeding
€40,000,000 (or its equivalent in other currencies).

 

Derivative Instrument means any swap, cap, collar, floor, option,
forward or any other agreement or arrangement in the nature of a derivative
instrument.

 

Derivative Liability means, on any date and in respect of any Derivative Instrument between
any member of the Group, any Borrowing Group Member and any creditor, the
amount (if any) payable by that member of the Group or Borrowing Group Member
to that creditor on termination of that Derivative Instrument on that date (or
which would have been payable by that member of the Group or Borrowing Group
Member to that creditor had that Derivative Instrument been terminated on that
date) (where the amount shall be the “marked-to-market” value of that contract
or instrument and shall take into account the operation of any netting provisions
contained within that instrument or contract or master agreement including the
netting of one or more Derivative Instruments between the same creditor and
member of the Group or Borrowing Group Member under the same master agreement).

 

EMTN
means a Euro medium term note programme for the Company in an amount of
€1,800,000,000 as described in an offering circular dated 5th October, 2001.

 

Enforcement Action in respect of an Affected Facility means any of the following actions:

 

(a)                                  to submit a petition for (or vote in favour
of any resolution in any insolvency proceedings) or initiate or support or take
any steps with a view to any bankruptcy, insolvency, liquidation, business
reorganisation or rehabilitation, administration receivership, execution or dissolution
proceedings under any insolvency and composition laws or any similar
proceedings (or any analogous proceedings in any other jurisdiction) involving
the Company or any of its subsidiaries;

 

(b)                                 to serve a notice of a default, event of
default or termination event (howsoever described) on the relevant Borrowing
Group Member, to place on demand, to make demand for or accelerate the due date
for, or declare prematurely payable any moneys under any Affected Facility;

 

(c)                                  to commence or continue any action to enforce
the payment of any amount under any Affected Facility;

 

 

(d)                                 where a breach of contract or
misrepresentation by a Borrowing Group Member under an Affected Facility
results in or from a default, event of default or termination event (howsoever
described), to commence or continue any legal action against that member for
repudiation or rescission of that Affected Facility or damages for loss (or
equivalent), in each case, as a consequence of that breach of contract or
misrepresentation;

 

(e)                                  to take any action to cancel any funded
commitment to lend or to close out or terminate or cancel any swap or similar
hedging arrangement, any guarantee, letter of credit or like commitment in
favour of a third party or any foreign exchange facility, in each case, under
any Affected Facility but excluding any action to close out or terminate any
swap or similar hedging arrangements where any Borrowing Group Member is “in
the money” as a result of close out or termination;

 

(f)                                    to exercise any right of appropriation,
amalgamation of accounts counter-claim or set-off in reduction of outstandings
under any Affected Facility, except that Lenders may continue to apply netting
arrangements in effect as at date of this letter in accordance with the
existing terms thereof; or

 

(g)                                 to take any action to perfect (except if
required to maintain a Security Interest then existing) or to enforce or make
any demand under any Security Interest or any guarantee, indemnity or like
commitment or similar support (except as contemplated by Clause 4.3(d)(iv))
given in connection with an Affected Facility by any Borrowing Group Member or
any other person.

 

Environment means all, or any of, the following media: the air (including air
within other natural or man-made structures above or below ground), water
(including, without limitation, ground and surface water) and land (including,
without limitation, surface and sub-surface soil).

 

Environmental Law means all laws (including, without limitation, common law),
regulations, directives, codes of practice, circulars, guidance notes and the
like having legal effect concerning the protection of human health, the
Environment, the conditions of the workplace or the generation, transportation,
storage, treatment or disposal of Dangerous Substances.

 

Environmental Licence means any permit, licence, authorisation,
consent or other approval required by any Environmental Law.

 

ERISA
means the United States Employee Retirement Income Security Act of 1974 and the
rules and regulations promulgated thereunder from time to time in effect.

 

ERISA Event means any event specified in Schedule 7 Part 2.

 

ERISA Affiliate means any trade or business (whether or not incorporated) that is
treated as a single employer together with the Company under section 414 of the
Code.

 

Euro
means the single currency of the Participating Member States.

 

Event of Default means an event or circumstance specified as such in this Agreement.

 

Excluded Facility means:

 

(a)                                  an uncommitted Facility which is not an
Affected Facility;

 

(b)                                 the Euro 12,420,000 term loan facility dated
21st January, 1995 between CCF and Rhodia Silicone backed by the European
Investment Bank;

 

(c)                                  any Unaffected Credit Facility to the extent
any reduction in Exposures under that Facility is refinanced in full at the
time of that reduction by an Unaffected Credit Facility with a final maturity
date no earlier than that of the refinanced Unaffected Credit Facility and on
terms which do not put or seek to put the creditor of the refinanced Unaffected
Credit Facility in a preferred position as against any Lender as provided in
Clause 4.7(b);

 

 

(d)                                 any Unaffected Committed Facility to the
extent that:

 

(A)                              any reduction in Exposures under that
Facility is refinanced at the time of the reduction by an Unaffected Credit
Facility (i) with a final maturity date falling no earlier than both (x) the
Term Date; and (y) the final maturity date of the refinanced Facility; and (ii)
on terms that do not put or seek to put the creditor of the refinanced Facility
in a preferred position as against any Lender as provided in Clause 4.7(b); and

 

(B)                                the aggregate amount of Exposures under the
Unaffected Committed Credit Facilities is not less than 95% of the aggregate
amount of Exposures under the Unaffected Committed Facilities on the date of
this Agreement at any time;

 

(e)                                  any sale of receivables or forfaiting
Facility which is not an Affected Facility; and

 

(f)                                    each Refinanced Facility to the extent
prepaid in full by the Refinancing Facilities Agreement.

 

Existing Facility means those Facilities which exist at the date of this Agreement,
brief details of which are listed in Schedule 3.

 

Existing Facility Agreement means any agreement or instrument
constituting or evidencing any Existing Facility.

 

Existing Security Interests means any Security Interest granted by any
member of the Group or any Borrowing Group Member over any asset of that member
in respect of any Existing Facility as at the date of this Agreement which is
either over the assets leased under existing Lease Facilities or as listed in
Schedule 4.

 

Exposure in relation to any creditor under a Facility means at any time:

 

(a)                                  in relation to loan facilities, overdrafts
and credit lines made available to any Borrowing Group Member the actual
aggregate principal amount outstanding to that creditor at that time net of
credit balances to the extent of any netting arrangement in effect at the time;

 

(b)                                 in relation to guarantees, letters of credit
and similar financial accommodation issued by that creditor for the account of
any Borrowing Group Member the maximum aggregate contingent liability of that
creditor under that instrument at that time;

 

(c)                                  in relation to any other financial
accommodation made available to any member of the Borrowing Group, the maximum
aggregate net exposure or exposures or contingent liability of that creditor at
that time determined in accordance with the usual market practice and in
respect of a US synthetic lease shall be calculated by reference to the total
outstanding notes and unrepaid investment of each lessor and owner participant
thereunder;

 

(d)                                 in relation to any Derivative Instrument, the
Derivative Liability in respect thereof; and

 

(e)                                  for the avoidance of doubt, excluding, in
each case, all related interest, fees, commission, banking, legal and other
charges and expenses,

 

and provided that: (i) any
contingent claim (including without limitation a contingent claim with respect
to a guarantee or letter of credit facility) shall, until the contrary is
demonstrated to the reasonable satisfaction of the relevant creditor, be
calculated on the basis that the amount claimed corresponds to a principal
amount and the contingent claim will become payable in full; and (ii) if there
is a dispute between a Lender and the Company with respect to the calculation
of its Exposure that Lender and the Company shall appoint (at the cost of the
Company) an independent expert to act as an expert and not as an arbitrator to
determine the same. The determination by such expert shall be binding on the
parties.

 

Facility means any facility under which a member of the Group, any Relevant
Entity or any Joint Venture Entity has or may incur Financial Indebtedness or
under which there is recourse to a member of the Group in respect of Financial
Indebtedness.

 

Facility Agreement means any agreement or instrument constituting or evidencing any
Facility.

 

Fee Letter means the letter(s) dated on or about the date of this Agreement and
entered into between amongst others the Intercreditor Agent and the Company
setting out the amount of certain fees to be paid in connection with this
Agreement.

 

Finance Document means:

 

(a)                                  this Agreement;

 

(b)                                 an Accession Agreement;

 

(c)                                  the Security Sharing Agreement;

 

 

(d)                                 each Security Document;

 

(e)                                  the Subordination Agreement;

 

(f)                                    the Fee Letter; and

 

(g)                                 any other document designated as such in
writing by the Company and the Intercreditor Agent.

 

Finance Party means a Lender, each Facility Agent, the Security Agent and the
Intercreditor Agent.

 

Financial Indebtedness means any indebtedness for or in respect of:

 

(a)                                  moneys borrowed and debit balances at banks;

 

(b)                                 any debenture, bond, note, loan stock or
other similar instrument;

 

(c)                                  any acceptance credit;

 

(d)                                 receivables sold or discounted (otherwise
than on a non-recourse basis) including, for the avoidance of doubt,
Securitisation Programmes and sale of receivables under Existing Facilities;

 

(e)                                  the acquisition cost of any asset to the
extent payable before or after its acquisition or possession by the party
liable where the advance or deferred payment is arranged primarily as a method
of raising finance or financing the acquisition of that asset;

 

(f)                                    any lease (including, without limitation, a
capital lease and each lease listed in Schedule 3) entered into primarily as a
method of raising finance or financing the acquisition of the asset leased;

 

(g)                                 any Derivative Instrument;

 

(h)                                 any amount outstanding under a Facility or
any amount raised through any other transaction (including any forward sale or
purchase agreement) which has the commercial effect of a borrowing or raising
of money;

 

(i)                                     any counter-indemnity obligation in respect
of any guarantee, indemnity, bond, letter of credit or any other instrument
issued by a bank or financial institution; or

 

(j)                                     any guarantee, indemnity or similar assurance
against financial loss of any person.

 

Group
means the Company and its Subsidiaries.

 

Group Structure Chart means the chart describing the capital and
share ownership of all the members of the Group and the Borrowing Group delivered
as a condition precedent under Schedule 2.

 

High Yield Bonds means the 7.625% US dollar denominated senior notes due 2010, the 8.0%
Euro denominated senior notes due 2010, the 8.875% US dollar denominated senior
notes due 2011 and the 9.25% Euro denominated senior notes due 2011 referred to
in Schedule 3.

 

Holding Company means, in relation to a person, a company in respect of which that
person is a Subsidiary.

 

Insolvency Event means any Event of Default specified in Clauses 11.7 (Insolvency) to
11.12 (Analogous proceedings) (inclusive).

 

Inter-Company Debt means any debt incurred by an Obligor and outstanding to an Affiliate
of the Company.

 

Joint Venture Entity means any unconsolidated subsidiary of the Company or joint venture
entity, in each case:

 

(a)                                  in which the Company owns or effectively
controls, directly or indirectly at least twenty per cent. (20%) of the capital
and voting rights; and

 

 

(b)                                 in relation to the Financial Indebtedness of
which, no Borrowing Group Member has given a guarantee, indemnity or similar
assurance against financial loss.

 

Lease Facility means a lease facility appearing under the
sub-heading “Operating Lease” in Schedule 3.

 

Lease Under Construction Facility means an Existing Facility in relation to a
leasing of a site under construction.

 

Lender
means:

 

(a)                                  an Original Lender; or

 

(b)                                 any bank or financial institution which has
executed and delivered to the Intercreditor Agent an Accession Agreement in
accordance with Clause 14.3 (Transfers by Lenders) and Clause 14.4 (Accession),

 

in each case in its capacity
as a Lender under each Affected Facility to which it is party and not any other
Facility.

 

Lessor Reduction means, in relation to certain Lease Facilities, the reduction of
Exposure thereunder by provision of cash collateral or by way of an early
prepayment of rent or the purchase by the lessee of the assets leased in an
amount equal to 5 per cent. of the relevant lessor’s exposure under the
relevant lease as such Exposure is set out against its name under the heading
“Prepayable” in Schedule 3 to be made on or around the date of this Agreement
and on the Term Date.

 

Limited Recourse means customary recourse by any provider of Financial Indebtedness
incurred by a member of the Group in connection with securitisation of
receivables pursuant to the existing terms of an existing Securitisation
Programme referred to in Schedule 3 to the extent such recourse may be incurred
by that member of the Group in accordance with such terms on the date of this
Agreement.

 

Majority Lenders means, on any date on which a determination is to be made, Lenders
whose Exposures aggregate at least 66 2/3 per cent. of
the aggregate Exposures of all Lenders where the Exposures (converted into Euro
at the Spot Rate of Exchange) are calculated by reference to the amount and
Spot Rate of Exchange as at the last day of the month ending immediately prior
to the date on which a determination is to be made.

 

Material Adverse Effect means a material adverse effect on or
circumstance affecting:

 

(a)                                  the business, assets or financial condition
of the Company, a Material Subsidiary or the Group (taken as a whole); or

 

(b)                                 the ability of any Borrowing Group Member to
perform or comply with any of its payment obligations (after taking into
account any guarantee in relation to that payment obligation which is available
on demand) or to comply with or perform any other material obligation under any
Finance Document or any Facility Agreement; or

 

(c)                                  the validity or enforceability of any Finance
Document or any Facility Agreement or the effectiveness of any Security
Interest over the assets purported to be covered by any Security Document, or
the value of the security (taken as a whole).

 

Material Subsidiary means at any time any Subsidiary of the Company whose net assets or
EBITDA then equal or exceed 5 per cent. of the total net assets or EBITDA of
the Group.

 

For this purpose:

 

(i)                                     the net assets or EBITDA of the relevant
entity will be determined from its financial statements (consolidated if it has
Subsidiaries) upon which the latest audited financial statements of the Group
have been based;

 

(ii)                                  if a Subsidiary of the Company becomes a
member of the Group after the date on which the latest audited financial
statements of the Group have been prepared, the net assets or EBITDA of that
Subsidiary will be determined from its latest financial statements;

 

(iii)                               the total net assets or EBITDA of the Group
will be determined from its latest audited financial statements, adjusted
(where appropriate) to reflect the net assets or EBITDA of any company or
business subsequently acquired or disposed of; and

 

 

(iv)                              if a Material Subsidiary disposes of all or
substantially all of its assets to another Subsidiary of the Company, it will
immediately cease to be a Material Subsidiary and the other Subsidiary (if it
is not already) will immediately become a Material Subsidiary; the subsequent
financial statements of those Subsidiaries and the Group will be used to
determine whether those Subsidiaries are Material Subsidiaries or not.

 

If there is a dispute as to
whether or not a company is a Material Subsidiary under paragraph (b) of this
definition, a certificate of the auditors of the Company will be, in the
absence of manifest error, conclusive.

 

For the purposes of the
above, each reference to EBITDA is to EBITDA as defined in Clause 10.1
(Financial covenant definitions).

 

Member
means, at any time, a member of the Co-ordinating Committee.

 

Multiemployer Plan means a multiemployer plan, as defined in Section 400(a)(3) of ERISA,
to which the Company or any ERISA Affiliate is making or accruing (or is
required to make or accrue) an obligation to make contributions, or has within
any of the preceding five plan years made or accrued (or was required to make
or accrue) an obligation to make contributions.

 

Obligor means: (i) the Company, an Original Obligor or an Additional Obligor
(in each case party to this Agreement); (ii) a Borrowing Group Member (whether
or not party to this Agreement) and (iii) for the purposes of Clause 11
(Default) only, any other member of the Group which is party to any Finance
Document.

 

Original Business Plan means the Business Plan provided on 30th
November, 2003 as validated by Ernst & Young.

 

Original Financial Statements means the consolidated financial statements
of the Company for the half-year ended 30th June, 2003 subject to a limited
review by the Company’s statutory auditors.

 

Overdraft Facilities means any overdraft facility provided by a creditor to any member of
the Group including any other facility which in the normal course of usage
operates on a fluctuating basis, together with any facility under which any
Finance Party guarantees such facility.

 

Participating Member States means a member state of the European
Communities that adopts or has adopted the Euro as its lawful currency under
the legislation of the European Union for European Monetary Union.

 

Party
means a party to this Agreement.

 

PBGC
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
or any successor thereto.

 

Permitted Reorganisation means an amalgamation, demerger, merger or
reconstruction involving the Company:

 

(a)                                  full details of which are provided by the
Company to the Intercreditor Agent in a timely manner prior to its taking
place; and

 

(b)                                 where the surviving entity (whether or not it
is the Company) has a long-term corporate credit rating from Standard &
Poor’s of BBB- or higher or an equivalent rating from Moody’s; and

 

(c)                                  in relation to which the Intercreditor Agent
has first received legal opinions from external counsel addressed to the
Finance Parties, in form and substance satisfactory to the Intercreditor Agent,
confirming:

 

(i)                                     either that the Company shall be the
surviving entity and that notwithstanding such amalgamation, demerger or
reconstruction, the Transaction Documents shall remain at all times the legal,
valid and binding obligations of the Company, enforceable in accordance with
their terms; or

 

(ii)                                  that upon such amalgamation, demerger or
reconstruction the surviving entity (not being the Company) will accede to the
obligations of the Company under the Transaction Documents in full and that the
Transaction Documents shall be the legal, valid and binding obligations of the
surviving entity, enforceable in accordance with their terms; and

 

(d)                                 where the place of incorporation and
registered head office of the surviving entity is within the European Union,

 

and to which the
Intercreditor Agent (acting on the instructions of the Requisite Lenders) has
given its prior written consent.

 

 

Plan
means a Single Employer Plan or a Multiemployer Plan.

 

Prepayment Event means any of:

 

(a)                                  the entry by the Company into any
amalgamation, demerger, merger or reconstruction which is not a Permitted
Reorganisation (including, without limitation, an amalgamation, demerger,
merger or reconstruction resulting from or constituted by the Company making a
disposal or disposals of assets, or a Material Subsidiary making a disposal or
disposals of assets to the Company, in each case under Clause 9.9 (Disposals)
but excluding, for the avoidance of doubt, assets disposed of under Clause
9.9(b)(iv)); or

 

(b)                                 any person, or group of persons acting in
concert, acquiring more than 50% of the issued and fully paid up share capital
or voting rights in the Company; or

 

(c)                                  the direct or indirect sale, transfer,
conveyance or other disposition (other than by way of merger or consolidation
permitted by and made in accordance with the provisions of this Agreement) in
one or a series of related transactions, of all or substantially all of the
properties or assets or business of the Company and its Subsidiaries taken as a
whole; or

 

(d)                                 the adoption of a plan relating to the
liquidation or dissolution of the Company.

 

Refinanced Facilities means each of the Existing Facilities to be
refinanced under the Refinancing Facilities Agreement referred to in Schedule 3
as “Refinanced Facilities”.

 

Refinancing Facilities Agreement means the refinancing facilities agreement
to be entered into between, amongst others, the Company, each Borrowing Group
Member which is a borrower under the Refinanced Facilities and the Original
Lenders which are lenders under the Refinanced Facilities on terms set out in
the Refinancing Facilities Term Sheet in a form agreed between the parties
thereto.

 

Refinancing Facilities Term Sheet means the term sheet attached to the
refinancing facilities term sheet letter from the Lenders party thereto to the
Company dated on or around the date of this Agreement in respect of the
Refinancing Facilities Agreement, delivered to the Intercreditor Agent as a
condition precedent document under Schedule 2 for identification purposes only.

 

Relevant Entity means an unconsolidated subsidiary of the Company or joint venture
entity, in each case:

 

(a)                                  in which the Company owns or effectively
controls, directly or indirectly, at least twenty per cent. (20%) of the
capital and voting rights; and

 

(b)                                 in relation to the Financial Indebtedness of
which, a Borrowing Group Member has given a guarantee, indemnity or similar
assurance against financial loss.

 

Relevant Proportion in relation to an Affected Facility means the proportion which the
aggregate of the Exposures of the Lenders with respect to that Affected
Facility bears to the aggregate of the Exposures of all the Lenders in relation
to the Affected Facilities (and for these purposes, the Exposures are taken at
their Euro amount on any date on which a Relevant Proportion is ascertained).

 

Requisite Lenders means, at any date on which a determination is to be made, the Lenders
whose Exposures aggregate at least 50% of the aggregate Exposures of all
Lenders where the Exposures (converted into Euro at the Spot Rate of Exchange)
are calculated by reference to the amount and Spot Rate of Exchange as at the
last day of the month ending immediately prior to the date on which a
determination is to be made.

 

Rights Issue means any equity rights issue by the Company generating net cash
proceeds of no less than €300,000,000 to be launched by the Company by no later
than 15th May, 2004 where net cash proceeds means cash proceeds net of any
Taxes and third party costs and expenses attributable to the issue as set out
in reasonable detail in a certificate provided to the Intercreditor Agent by
the chief financial officer of the Company.

 

Secured Intercreditor Period means the period from the Commencement Date
up to and including the earlier of:

 

(a)                                  the Term Date; and

 

(b)                                 the date of notification of a Declared
Default by the Intercreditor Agent.

 

 

Secured Intra Group Loan means a loan made by a member of the Group
which is or, in accordance with the Security Principles is intended to be,
subject to a Security Document.

 

Securitisation Programmes means each of the securitisation programmes
referred to under the heading “Securitisation Programmes” in Schedule 3
existing at the date of this Agreement.

 

Security Agent means the security agent appointed pursuant to the Security Sharing
Agreement.

 

Security Document means any document entered into by a member of the Group with the Security
Agent in an agreed form evidencing or creating a Security Interest over any of
its assets in accordance with the Agreed Security Principles.

 

Security Interest means any:

 

(a)                                  hypothèque, nantissement,
privilège, cession de créance à titre de garantie par bordereau
Dailly, “gage-espèces” or any sûreté
réelle or droit de rétention;

 

(b)                                 mortgage, pledge, lien, charge, assignment by
way of security or for the purpose of providing security, hypothecation, right
in security, security interest or (to the extent applicable) trust arrangement
for the purpose of providing security; and

 

(c)                                  other security agreement or other arrangement
having the effect of providing security (including, without limitation, cash
collateral and the deposit of moneys or property with a person with the primary
intention of affording such person a right of set-off).

 

Security Sharing Agreement means the security sharing agreement to be
entered into between, among others, the Company and the Finance Parties in an
agreed form in accordance with the Agreed Security Principles.

 

Single Employer Plan means a single employer plan, as defined in Section 400(a)(15) of
ERISA, that is subject to Title IV of ERISA and that (a) is maintained for the
employees of the Company or any ERISA Affiliate or which is subject to the
minimum funding requirements of Section 302 of ERISA or Section 412 of the Code
or (b) was so maintained and in respect of which the Company or any ERISA
Affiliate could reasonably be expected to have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.

 

Spot Rate of Exchange means the Intercreditor Agent’s spot rate of
exchange for the purchase of the relevant currency with another currency at or
about 11.00 a.m. on a particular day.

 

Subordination Agreement means the subordination agreement to be
entered into between, among others, certain Obligors, the Senior Agent (as
defined therein) and the Senior Creditors (as defined therein) in an agreed
form.

 

Subsidiary means an entity from time to time of which a person has direct or
indirect control or owns directly or indirectly more than fifty per cent (50%)
of the share capital or similar right of ownership.

 

Target Day means a day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer payment system is open for the settlement of
payments in Euro.

 

Tax
means any tax, levy, impost, duty or other charge or withholding of a similar
nature (including any related penalty or interest).

 

Tax Deduction means a deduction or withholding for or on account of Tax from a
payment under a Finance Document.

 

Term Date means the earlier of:

 

(a)                                  15th May, 2004; and

 

(b)                                 the date on which the Refinanced Facilities
are unconditionally refinanced in full,

 

Provided that:

 

(A)                              where the Rights Issue is launched prior to
15th May, 2004 but where the net proceeds are not received on or prior to 15th
May, 2004, (1) if the Rights Issue has been fully underwritten or subscribed on
or prior to 15th May, 2004 on 

 

 

customary market terms, the
Term Date in paragraph (a) above will be extended to the expected date of
receipt of such net proceeds; or (2) if the Rights Issue has not been fully
underwritten or subscribed on or prior to 15th May, 2004, the Intercreditor
Agent (at the request of the Company or any Finance Party, but acting on the
instructions of the Majority Lenders) may agree to extend the Term Date in
paragraph (a) above to the expected date of receipt of such net proceeds; and

 

(B)                                in any event the Term Date may not be
extended to a date falling after 30th June, 2004.

 

Testing Date has the meaning given to it in Clause 10.1 (Financial covenant
definitions).

 

Transaction Document means:

 

(a)                                  a Finance Document;

 

(b)                                 any underwriting or subscription agreements
(or other contractual arrangements having a similar effect) entered into in
relation to the Rights Issue;

 

(c)                                  any sale and purchase agreements (or other
contractual arrangements having a similar effect) entered into in relation to
the Asset Disposal Programme;

 

(d)                                 each Facility Agreement; or

 

(e)                                  any other document designated as such in
writing by the Company and the Intercreditor Agent.

 

Unaffected Committed Facilities means the Unaffected Credit Facilities
listed under the heading “Committed Bank lines” in Schedule 3 (as refinanced
from time to time after the date of this Agreement).

 

Unaffected Credit Facility means any debt or commercial paper Facility
which is not an Affected Facility with banks or other institutions for
revolving loans, term loans, overdraft facilities, letters of credit and
guarantee facilities and excluding, for the avoidance of doubt, the USPP, the
High Yield Bonds, EMTN and any other bonds, notes or similar instruments.

 

USPP
means the USD 215,000,000 note purchase agreement and USD 75,000,000 note purchase
agreement each dated 30th July, 2002, as amended.

 

Withdrawal Liability has the meaning specified in Part I of Subtitle E of Title IV of
ERISA.

 

1.2                               Construction

 

(a)                                  In this Agreement, unless the contrary
intention appears, a reference to:

 

(i)                                     acting in concert has the meaning given to it in Article
L.233-10 of the French Code de Commerce;

 

(ii)                                  documents being in an agreed form means documents (A) in a form
previously agreed in writing by or on behalf of the Intercreditor Agent and the
Company, or (B) in a form substantially as set out in any Schedule to any
Finance Document, or (C) (if not falling within (A) or (B) above) in form and
substance satisfactory to the Intercreditor Agent (acting on the instructions
of the Lenders);

 

an amendment includes a supplement, novation,
restatement or re-enactment and amended
will be construed accordingly;

 

assets
includes present and future properties, revenues and rights of every
description;

 

an authorisation includes an authorisation,
consent, approval, resolution, license, exemption, filing, registration or
notarisation;

 

control means the power to direct the management and policies of an entity,
whether through the ownership of voting capital, by contract or otherwise;

 

disposal means a sale, transfer, grant, lease or other disposal, whether
voluntary or involuntary, including, without limitation, a capital contribution
and “dispose” will be treated accordingly;

 

 

indebtedness includes any obligation (whether as principal or as surety) for the
payment or repayment of money;

 

a person includes any individual, company, corporation,
unincorporated association or body (including a partnership, trust, joint
venture or consortium), government, state, agency, organisation or other entity
whether or not having separate legal personality;

 

a regulation includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law but if not having
the force of law, being of a type with which any person to which it applies is
accustomed to comply) of any governmental, intra-governmental or supranational
body, agency, department or regulatory, self-regulatory or other authority or
organisation;

 

the equivalent in other currencies or like
terms, unless otherwise agreed or the context otherwise requires, means in
relation to any amount expressed to be denominated in a currency other than
Euro, the equivalent thereof in Euro converted at the Spot Rate of Exchange for
the notional purchase of Euro with the currency concerned in the Paris foreign
exchange market at or about 11.00 a.m. on the day on which any such calculation
falls to be made;

 

(iii)                               a currency is a reference to the lawful
currency for the time being of the relevant country;

 

(iv)                              a Default being outstanding means that it has not been remedied or waived;

 

(v)                                 a provision of law is a reference to that
provision as extended, applied, amended or re-enacted and includes any
subordinate legislation;

 

(vi)                              a Clause, a Subclause or a Schedule is a
reference to a clause or subclause of, or a schedule to, this Agreement;

 

(vii)                           a person includes its successors, permitted
assigns and permitted transferees;

 

(viii)                        a Finance Document, Transaction Document or
another document is a reference to that Finance Document, Transaction Document
or other document as amended or supplemented including without limitation by
this Agreement;

 

(ix)                                a time of day is a reference to Paris time;

 

(x)                                   for the purposes of Clause 4.2(a), pro rata basis means the amount by which
any Existing Facility is repaid, prepaid, redeemed, repurchased, purchased,
defeased or otherwise reduced below its Exposure at the Calculation Point
expressed as a percentage of such Existing Facility; and

 

(xi)                                for the purposes of Clause 8.25 (United
States laws) and Clause 9.29 (United States laws) Federal Power Act means the United States Federal Power Act of
1920, as amended, holding company, affiliate
and subsidiary company have the
meanings given to them in the PUHCA, investment
company and controlled
have the meanings given to them in the United States Investment Company Act of
1940, as amended, public utility
has the meaning given to it in the Federal Power Act and PUHCA means The Limited States Public
Utility Holding Company Act of 1935, as amended.

 

(b)                                 Unless the contrary intention appears, a
reference to a “month” or “months” is a reference to a period starting on one
day in a calendar month and ending on the numerically corresponding day in the
next calendar month or the calendar month in which it is to end, except that:

 

(i)                                     if the numerically corresponding day is not a
Business Day, the period will end on the next Business Day in that month (if
there is one) or the preceding Business Day (if there is not);

 

(ii)                                  if there is no numerically corresponding day
in that month, that period will end on the last Business Day in that month; and

 

(iii)                               notwithstanding sub-paragraph (i) above, a
period which commences on the last Business Day of a month will end on the last
Business Day in the next month or the calendar month in which it is to end, as
appropriate.

 

(c)                                  Unless the contrary intention appears:

 

(i)                                     reference to a Party will not include that
party if it has ceased to be a Party under this Agreement;

 

 

(ii)                                  an amount in Euro is payable only in the Euro
unit;

 

(iii)                               a term used in any other Finance Document or
in any notice given in connection with any Finance Document has the same
meaning in that Finance Document or notice as in this Agreement;

 

(iv)                              if there is an inconsistency between this
Agreement and any other Finance Document, this Agreement will prevail;

 

(v)                                 any obligation of an Obligor under the
Finance Documents which is not a payment obligation remains in force for so
long as any payment obligation is or may be outstanding under the Finance
Documents; and

 

(vi)                              the headings in this Agreement do not affect
its interpretation.

 

1.3                               Third Party Rights

 

(a)                                  Unless expressly provided to the contrary in
a Finance Document, a person who is not a party to a Finance Document may not
enforce any of its terms under the Contracts (Rights of Third Parties) Act
1999.

 

(b)                                 Notwithstanding any term of any Finance
Document, the consent of any third party is not required for any variation
(including any release or compromise of any liability under) or termination of
that Finance Document.

 

1.4                               Security Sharing Agreement
and Subordination Agreement

 

This Agreement is to be
entered into with the benefit of and subject to the Security Sharing Agreement
and the Subordination Agreement.

 

2.                                      CONDITIONS PRECEDENT

 

(a)                                  The obligations and acknowledgements of each
Finance Party to any other Party under this Agreement are subject to the
condition precedent that the Intercreditor Agent has notified each Party that
it has received the documents and other matters set out in Part 1 of Schedule 2
in form and substance satisfactory to the Intercreditor Agent or (as required)
the Lenders. Each Lender undertakes to confirm to the Intercreditor Agent in
writing that it is satisfied with the relevant documents referred to in Part 1
of Schedule 2, promptly upon receipt of the same in a form and substance
satisfactory to it.

 

(b)                                 Unless otherwise expressly stated, the
obligations and undertakings of the Obligors (but not the Lenders) under this
Agreement shall take effect on the date of this Agreement and continue in full
force and effect until (i) the Term Date; or (ii) if a Default is outstanding
on the Term Date until no Default is outstanding.

 

3.                                      SECURED INTERCREDITOR PERIOD

 

3.1                               Duration

 

The undertakings in this
Clause remain in force during the Secured Intercreditor Period.

 

3.2                               No Enforcement Action

 

Subject to Clause 3.1
(Duration) no Finance Party shall take any Enforcement Action in respect of any
default, event of default or termination event (howsoever described) under the
Affected Facilities except in respect of a Default or an Event of Default under
and in accordance with this Agreement as permitted under Clause 11.20
(Enforcement Action) and otherwise in accordance with the Security Sharing
Agreement (when entered into).

 

3.3                               No additional Security Interest

 

(a)                                  Subject to Clause 3.1 (Duration) no Finance
Party shall take any cash collateral, cash cover, guarantee, indemnity or
Security Interest in respect of any Affected Facility.

 

(b)                                 Paragraph (a) does not apply to:

 

(i)                                     an Existing Security Interest;

 

(ii)                                  any Security Interest permitted under Clause
9.7(b)(iv) or (v);

 

 

(iii)                               the Security Documents;

 

(iv)                              any guarantee existing on the date of this
Agreement and the guarantee given by the Guarantor under this Agreement; and

 

(v)                                 subject always to the provisions of the
Security Sharing Agreement, the provision of Lessor Reduction and/or Derivative
Deposit.

 

3.4                               Novation

 

Subject to Clause 3.1
(Duration), no Finance Party shall assign, transfer or novate all or any part
of its rights or obligations under any Affected Facility unless it has procured
that the assignee, transferee or person to whom its rights and/or obligations
are novated, is a Lender under this Agreement or, on that assignment, transfer
or novation, becomes a Lender, in each case, under and in accordance with the
provisions of this Agreement.

 

4.                                      AFFECTED FACILITIES

 

4.1                               Duration

 

Each Obligor agrees to be
bound by and the Company shall ensure that each of its Subsidiaries and each
Borrowing Group Member performs and complies with, the undertakings set out in
this Clause. The undertakings in this Clause shall, subject to the provisions
of Clause 2(b) (Conditions precedent) and 7.2(b)(iii) remain in force until the
Term Date. Subject to Clause 15 (Amendments and waivers) the consent of all
Finance Parties is required for any amendment or waiver of the undertakings in
this Clause. Subject to Clause 15 (Amendments and waivers) any amendment or
waiver not agreed by a Finance Party in respect of the undertakings in this
Clause shall not be binding on that Finance Party.

 

4.2                               Pro rata repayments

 

(a)                                  If the Exposure owed to any person by the
Company, a Borrowing Group Member or other member of the Group under a Facility
(other than an Excluded Facility) is repaid or prepaid (whether or not a voluntary
or mandatory prepayment), redeemed, repurchased, purchased, defeased (whether
by way of legal or covenant defeasance) or otherwise reduced below the Exposure
of that person as at the Calculation Point, the Company and each Borrowing
Group Member shall and the Company will procure that each Borrowing Group
Member will ensure that the Exposure of each Lender under the Affected
Facilities to which that Borrowing Group Member is a party will be repaid,
prepaid (whether or not a voluntary or mandatory prepayment), redeemed,
repurchased, purchased (whether by way of legal or covenant defeasance) or
otherwise reduced simultaneously by that Borrowing Group Member on a pro rata basis.

 

(b)                                 Paragraph (a) does not apply to any reduction
in the Exposures of any person which arises solely as a result of:

 

(i)                                     any fluctuation in Exposures under any
Overdraft Facility;

 

(ii)                                  subject to and in accordance with Clause
4.3(c), any fluctuation in Exposures under any foreign exchange Facilities or
Derivative Instrument including the unwinding or replacement of any Derivative
Instrument or master agreement relating thereto prior to its original scheduled
expiry date provided that, except in the case of a replacement or unwinding
permitted under Clause 4.3(c)(iv), at the time of unwinding or replacement and
after the operation of any netting provision contained in that Derivative
Instrument or master agreement relating to that Derivative Instrument, the net
Exposure is “in the money” for the relevant member of the Group;

 

(iii)                               any fluctuation in exchange rates between the
Calculation Point and the Commencement Date;

 

(iv)                              any reimbursement of an amount paid by a
creditor in respect of its Exposure set out against its name in Schedule 3 for
guarantees or letter of credits;

 

(v)                                 for the avoidance of doubt, the making of any
Derivative Deposit or Lessor Reduction;

 

(vi)                              subject to and in accordance with Clause 3.4
(Novation), any person transferring, novating or assigning its Exposures to any
person under any Facility Agreement;

 

(vii)                           operation of law;

 

 

(viii)                        any application of Excess Proceeds as defined
in and subject to and in accordance with clause 4.10 of the High Yield Bonds
and this Agreement;

 

(ix)                                subject to and in accordance with Clause
4.3(d), any letter of credit, confirmation or guarantee expiring at its
original maturity to the extent not required to be extended, replaced or
renewed by the relevant Borrowing Group Member;

 

(x)                                   subject to and in accordance with Clause
4.4(a), original scheduled payments of rent under leasing Facilities;

 

(xi)                                subject to and in accordance with Clause
4.4(b), any fluctuations in Exposures under the Securitisation Programmes;

 

(xii)                             prepayments under Lease Under Construction
Facilities in a maximum aggregate amount equal to €15,000,000 (or its
equivalent in other currencies);

 

(xiii)                          a mandatory prepayment required to be made
under a Lease Facility with the sale proceeds from a disposal of an asset
leased under that Lease Facility or a payment required to be made under a Lease
Facility following the exercise of a purchase option by the lessee thereunder
in respect of assets sold or contracted to be sold to a person outside the
Group;

 

(xiv)                         the transfer of Affected Facilities from
Rhodia Ying Long to Rhodia China Co. Limited; or

 

(xv)                            the transfer of the loan drawn under the
Primester Facility from Primester to the Company and to the extent Primester
has previously acceded to this Agreement as an Additional Obligor from the
Company to Primester.

 

(c)                                  Paragraph (a) does not apply to any reduction
in the Exposures of any person under any Facility which is made with the prior
written consent of the Requisite Lenders.

 

(d)                                 Paragraph (a) does not apply to any Facility
made to a Borrowing Group Member from the date on which the disposal of that
Borrowing Group Member occurs and that Borrowing Group Member shall no longer
be a Borrowing Group Member for the purposes of this Agreement from that date.

 

4.3                               Maintenance of Affected
Facilities

 

Subject to the provisions of
this Agreement, the Affected Facilities will be maintained at the level (and in
the currency) of Exposures as at the Calculation Point and otherwise on the
following basis:

 

	
   

  	
  (a)

  	
  (i)

  	
  each Affected Facility
  will, on maturity or roll-over dates, be renewed or rolled over in accordance
  with the terms of the relevant Affected Facility;

  

 

(ii)                                  any drawstop (howsoever described) under each
Affected Facility other than in respect of (A) an Event of Default referred to
in Clause 11.20(a) or (B) any Declared Default shall be suspended and have no
effect for such purpose;

 

(iii)                               in the case of a renewal of a maturity or a
roll-over under an Affected Facility, the new maturity or roll-over date shall
be renewed or rolled-over in accordance with Clause 4.6 (Renewals and
Roll-Overs); and

 

(iv)                              on any renewal or roll-over there will be no
change in the level or currency of Exposures under the relevant Affected
Facility as at the Calculation Point.

 

(b)                                 Undrawn or unutilised portions of any
Affected Facility in excess of the maximum Exposure as at the Calculation Point
in respect of any Affected Facility as set out in Schedule 3, whether,
committed or uncommitted, shall be permanently cancelled on the date of this
Agreement (save where necessary to maintain the level of principal Exposure
under the relevant Facility) and no fees or costs shall be payable on such
amounts with effect therefrom.

 

	
   

  	
  (c)

  	
  (i)

  	
  Existing foreign exchange
  facilities and Derivative Instruments will continue to be made available up
  to the maximum net Exposure of the Lender concerned as at the Calculation
  Point;

  

 

(ii)                                  Derivative Instruments that expire may be
extended or replaced by the same Obligor up to the maximum Exposure of the
applicable Lender as at the Calculation Point;

 

 

(iii)                               payments on original scheduled due dates
under any foreign exchange facilities and Derivative Instruments will continue
to be made (including by way of netting if so provided in the relevant instrument)
in accordance with their terms; and

 

(iv)                              the Company will provide Derivative Deposit
in favour of the relevant Lender where required by that Lender and the amounts
of such collateral will be adjusted (upwards or downwards by the payment or
release of such collateral as the case may be) at the latest on the first
Business Day of each calendar month (commencing with January, 2004) PROVIDED
THAT where the aggregate amount of Derivative Deposit provided pursuant to this
Clause would (but for the limitations under this Agreement) otherwise have
exceeded €40,000,000 (or its equivalent in other currencies) then the Company:

 

(A)                              may substitute; or

 

(B)                                if required by that Lender shall unwind with
a corresponding payment as the case may be,

 

that or another Derivative
Instrument (at the cost and expense of the Company) so that the aggregate
amount of Derivative Deposit which the Company is to provide is equal to or
less than €40,000,000 (or its equivalent in other currencies).

 

Prior to any substitution or
unwinding of a Derivative Instrument, the cost and expense thereof and in the
case of an unwinding the corresponding payment shall be agreed between the
relevant Lender and the Company. In the absence of such agreement such amount
shall be determined by an independent third party expert appointed by the
Company and relevant Lender (at the cost of the Company) to act as an expert
and not as an arbitrator for such purpose.

 

	
   

  	
  (d)

  	
  (i)

  	
  Existing documentary
  letter of credit facilities, confirmation facilities, bond facilities and
  guarantee facilities will continue to be made available (in the same
  currency) up to the maximum Exposure of the applicable Lender under such
  facilities (as applicable) as at the Calculation Point subject to and in
  accordance with paragraph (d)(ii) below;

  

 

(ii)                                  if any letter of credit, confirmation or
guarantee expires it shall (A) if required by the relevant Borrowing Group
Member at any time during the Secured Intercreditor Period or (B) in the case
of an “extend or pay” letter of credit, confirmation or guarantee if the Lender
has the option to extend or pay, in each case, be extended (whether by way of
re-issue or replacement or otherwise) within the maximum Exposure of the
applicable Lender to a date no earlier than the Term Date;

 

(iii)                               any scheduled payment of interest, fees and
commission in respect of any letter of credit facilities, confirmation
facilities, bond facilities and guarantee facilities will continue to be made
in accordance with their terms; and

 

(iv)                              if any Lender makes a payment under any such
letter of credit facilities, confirmation facilities, bond facilities and
guarantee facilities in favour of the beneficiary, that Lender may in
accordance with the terms of that Affected Facility make a claim on the
relevant Borrowing Group Member for reimbursement of any sum paid or otherwise
treat any such sum paid by it as an advance of that amount to that member
bearing interest with a margin at the rate set out in Clause 4.5 (Interest,
fees and commission).

 

(e)                                  Affected Facilities that are Overdraft
Facilities will be made available and continue to be operated in accordance
with the net and gross limits (and in the currency) as at the Calculation Point
up to the maximum utilised amount under such Overdraft Facilities at the Calculation
Point.

 

(f)                                    This Clause 4.3 does not apply to any
Affected Facility which is made to a Borrowing Group Member from the date on
which the disposal of that Borrowing Group Member occurs and that Borrowing
Group Member shall no longer be a Borrowing Group Member from that date.

 

4.4                               Continuation of other
Facilities

 

(a)                                  Original scheduled payments of rent
(including for the avoidance of doubt the capital/principal element of any rent
or payment under Lease Facilities referred to in Schedule 3) shall continue to
be made in accordance with their terms under the relevant Lease Facilities.

 

 

(b)                                 The Company shall maintain the Securitisation
Programmes and related back-up lines in force at the date of this Agreement in
accordance with their terms.

 

4.5                               Interest, fees and
commission

 

(a)                                  Subject to paragraphs (b) and (c), interest,
fees, commissions and costs and expenses accrued under any Facility will be
paid promptly as they fall due in accordance with that Facility. Any payment
shall be made by the relevant Obligor free and clear and without deduction for
or on account of any taxes.

 

(b)                                 Any amount advanced to any Obligor under any
Existing Facility in accordance with Clause 4.3(d)(iv) will be repayable at the
end of the Secured Intercreditor Period.

 

(c)                                  The aggregate of the margin over the
applicable base rate, facility fee, guarantee fee or commission applicable to
each Affected Facility, as the case may be (excluding Derivative Instruments,
the Lease Facilities and the Securitisation Programmes), from the date of this
Agreement will be the greater of (i) such margin, facility fee, guarantee fee
or commission applicable to each Affected Facility on the date of this
Agreement; and (ii) 3.05 per cent. per annum on the relevant Exposure and
otherwise in accordance with its terms.

 

(d)                                 The Company will pay to each Lender directly
on the date of the signing of this Agreement a flat fee calculated and payable
in accordance with the Fee Letter.

 

(e)                                  The Company shall pay to the Intercreditor
Agent (for its own account) agency fees in the manner and amount agreed in the
Fee Letter.

 

(f)                                    From the Commencement Date, the interest
period for each Affected Facility:

 

(i)                                     shall be rolled over for periods of one month
in accordance with its terms;

 

(ii)                                  where a roll-over date falls within one month
of 26th March, 2004, the next interest period shall be shortened to fall on
that date and will be monthly thereafter; and

 

(iii)                               after 26th March, 2004, the payment dates for
interest, any facility fee, guarantee fee or commission applicable to each
Affected Facility during the Secured Intercreditor Period will be re-aligned so
that due dates for their payment will fall on the same roll-over date.

 

(g)                                 Where a letter of credit or guarantee or
equivalent facility continues beyond the Term Date without the benefit of a
counter-guarantee under the Refinancing Facilities Agreement or any other
guarantee or cash deposit, the guarantee fee or commission referred to in
paragraph (c) above shall continue beyond the Term Date.

 

4.6                               Renewals and Roll-Overs

 

(a)                                  The final maturity date of any Affected
Facility which occurs during the Secured Intercreditor Period shall be extended
to a date corresponding to the Term Date.

 

(b)                                 Any roll-over date which occurs under an
Affected Facility during the Secured Intercreditor Period shall be adjusted to
occur on the date referred to in Clause 4.5(f).

 

 

(c)                                  The final maturity date of each Refinanced
Facility shall be amended to occur on a date corresponding to the Term Date.

 

4.7                               Undertakings of the
Borrowing Group

 

Each Borrowing
Group Member shall and will procure that each of its Subsidiaries will ensure
that throughout the term of this Agreement and subject always to the Security
Sharing Agreement and the Subordination Agreement (when entered into):

 

(a)                                  subject to Clause 9.7(b) and Clause 9.16(d),
no Security Interest or guarantee indemnity or like commitment, in any such
case of whatever nature, shall be created or permitted to subsist by the
Company or any of its Subsidiaries in favour of any person under a Facility;

 

(b)                                 it shall not put or seek to put any creditor
under any Facility in a preferred position as against any Lender in particular,
but without limitation, any covenant or default provision more favourable to
the counterparty in respect of a Facility than those under this Agreement,
unless at the same time this Agreement is amended to substantially the same
extent and on substantially the same terms as provided to that counterparty;

 

(c)                                  no Borrowing Group Member shall make any
payment of or otherwise discharge any principal amount due or owing by it to
any other member of the Group or a Relevant Entity:

 

(i)                                     if in respect of a Secured Intra Group Loan
at any time; and

 

(ii)                                  if not in respect of a Secured Intra Group
Loan except:

 

(A)                              whilst no Default is outstanding if made in
accordance with the cash pooling arrangements existing at the date of this
Agreement or if made with respect to sales and purchases of goods, services or
trade receivables in its ordinary course of trading and which does not result
in a Default; and

 

(B)                                otherwise as permitted by and in accordance
with Clause 9.19 (Repayments of inter-group Financial Indebtedness),

 

unless otherwise agreed by
the Requisite Lenders; and

 

(d)                                 no amendment is made to, no interest amounts
payable are increased and no scheduled maturity or repayment dates are advanced
under any Facility on or after the date of this Agreement, in each case, except
as expressly set out herein.

 

4.8                               Restoration

 

If the Exposure of any
Lender reduces from its Exposure as at the Calculation Point other than in
accordance with this Agreement and the Security Sharing Agreement, the Lenders
will take such action as is necessary to ensure that the Exposure of that
Lender is restored as if reduced subject to and in accordance with this
Agreement and the Security Sharing Agreement.

 

4.9                               Acknowledgements by each
Party

 

(a)                                  Subject to Clauses 4.3(c) and 4.3(d) nothing
contained in this Agreement will oblige any Lender to make any further advance,
or extend any credit to, any member of the Group.

 

(b)                                 Except as amended or supplemented by this
Agreement, the Facility Agreements remain in full force and effect.

 

(c)                                  Each Finance Document and Facility Agreement
is subject to this Agreement. If there is any conflict between any other
Finance Document or Facility Agreement and this Agreement, this Agreement shall
prevail.

 

4.10                        Override

 

(a)                                  Clause 7 (Mandatory prepayment and
cancellation), Clause 8 (Representations and warranties), Clause 9
(Undertakings) and Clause 10 (Financial covenants) shall (i) take effect from
the date of this Agreement; and (ii) with effect from the Commencement Date and
throughout the Secured Intercreditor Period shall override any representations
and warranties or undertakings in the Affected Facility Agreements which relate
to the same or corresponding subject (but not otherwise).

 

 

(b)                                 The terms of each Affected Facility
(including, in each case without limitation, the Affected Facility Agreements)
are only overridden to the extent set out in paragraph (a) above and in all
other respects the terms of each Affected Facility shall except as amended or
supplemented by or in accordance with another provision of this Agreement
otherwise remain in full force and effect.

 

(c)                                  Nothing in this Agreement shall override,
amend or replace any provision of an Affected Facility relating to the purpose
for which the relevant Affected Facility may be used.

 

(d)                                 No Finance Document nor any act or omission
of any Finance Party during the Secured Intercreditor Period will constitute a
waiver by that Finance Party of any rights or remedies available to it under
any Transaction Document to which it is a party and those rights and remedies
are reserved by the Finance Parties.

 

4.11                        Amendments to Affected
Facilities

 

(a)                                  If this Agreement is not fully effective with
respect to any Affected Facility under its governing law or the place of
incorporation of the applicable Borrowing Group Member this Agreement shall
operate as a separate or collateral contract between each of the parties to the
Affected Facility and the parties thereto shall (at the cost and expense of the
Company) and the Company shall procure that the applicable Borrowing Group
Member does promptly take all such reasonable steps and actions as may be necessary
to give full effect to the terms of this Agreement under such governing law or
place of incorporation including, without limitation, amendments to the terms
of the corresponding Affected Facility Agreements under and in accordance with
its governing law or place of incorporation.

 

(b)                                 Each Lender authorises its Facility Agent (if
any) to make any amendment required to be made pursuant to paragraph (a) above
under the Affected Facility Agreement to which it is a party.

 

4.12                        Negotiation in good faith

 

If an event or circumstance
occurs before 15th May, 2004 which could have a material impact (whether
positive or negative) on the appropriateness of the Company’s refinancing plan
as contemplated by the Rights Issue, the Asset Disposal Programme and the Refinancing
Facilities Term Sheet, as determined by the Majority Lenders and the Company,
without prejudice to their rights under the Transaction Documents, the Lenders
and the Company will negotiate in good faith with a view to agreeing
appropriate amendments to that refinancing plan.

 

4.13                        Term Date Prepayment

 

Each Obligor shall and the
Company shall ensure that each Borrowing Group Member shall ensure that an
amount equal to 5 per cent. of the Exposure under each of the Affected
Facilities listed under the heading “Prepayable” in Schedule 3 (other than the
Refinanced Facilities) and calculated by reference to the amount set out under
the heading “Exposure” in Schedule 3 is prepaid and cancelled on the Term Date.

 

5.                                      PAYMENTS

 

5.1                               Place

 

Unless otherwise expressly
stated, all payments by an Obligor or a Lender under the Finance Documents
shall be made to the Intercreditor Agent at such office or bank in a principal
financial centre of the country of the relevant currency as it may notify to
that Obligor or Lender for this purpose. Each Obligor and each Facility Agent
shall provide satisfactory evidence to the Intercreditor Agent of each and all
payments made under a Facility Agreement. Unless otherwise expressly stated in
this Agreement, all other payments shall continue to be made as provided in
that Affected Facility (as amended pursuant to this Agreement).

 

5.2                               Funds

 

Payments to the
Intercreditor Agent shall be made for value on the due date at such times and
in such funds as the Intercreditor Agent may specify to the Party concerned as
being customary at the time for the settlement of transactions in the relevant
currency in the place for payment.

 

 

5.3                               Distribution

 

Where a sum is to be paid to
the Intercreditor Agent under the Finance Documents for another Party, the
Intercreditor Agent is not obliged to pay that sum to that Party until it has
established that it has actually received that sum. The Intercreditor Agent
may, however, assume that the sum has been paid to it in accordance with this
Agreement, and, in reliance on that assumption, make available to that Party a
corresponding amount. If the sum has not been made available but the
Intercreditor Agent has paid a corresponding amount to another Party, that
Party shall forthwith on demand by the Intercreditor Agent refund the
corresponding amount together with interest on that amount from the date of
payment to the date of receipt, calculated at a rate determined by the
Intercreditor Agent to reflect its cost of funds.

 

5.4                               Currency

 

(a)                                  A repayment or prepayment of any amount under
a Facility is payable in the currency in which the Facility is denominated on
its due date.

 

(b)                                 Interest is payable in the currency in which
the relevant amount in respect of which it is payable is denominated.

 

(c)                                  Amounts payable in respect of costs, expenses
and Taxes and the like are payable in the currency in which they are incurred.

 

(d)                                 Any other amount payable under the Finance
Documents is, except as otherwise provided in this Agreement, payable in Euro.

 

5.5                               Set-off and counterclaim

 

All payments made by an
Obligor under the Finance Documents shall be made without set-off or
counterclaim.

 

5.6                               Taxes

 

(a)                                  Each Obligor must make all payments to be
made by it under the Finance Documents without any Tax Deduction, unless a Tax
Deduction is required by law.

 

(b)                                 If a Tax Deduction is required by law to be
made on a payment by an Obligor or any Finance Party to a Finance Party under
the Finance Documents, the amount of the payment due from the Obligor will be
increased to an amount which (after making the Tax Deduction) leaves an amount
equal to the payment which would have been due if no Tax Deduction had been
required.

 

(c)                                  Any amount (including fees, costs and
expenses) payable under a Finance Document by an Obligor is exclusive of any
Tax (including value added tax) which might be chargeable in connection with
that amount. If any such tax is chargeable, the Obligor must pay to the Finance
Party (in addition to and at the same time as paying that amount) an amount
equal to the amount of that Tax.

 

5.7                               Non-Business Days

 

If a payment under the
Finance Documents is due on a day which is not a Business Day, the due date for
that payment shall instead be the next Business Day in the same calendar month
(if there is one) or the preceding Business Day (if there is not).

 

5.8                               Taux effectif global

 

In respect of a Borrowing
Group Member which is incorporated in France, for the purpose of Articles
L.313-1, L.313-2, R 313-1 and R 313-2 of the Consumer Code (Code de la Consommation), each Party
acknowledges that:

 

(a)                                  by virtue of certain characteristics of the
Facilities (including, without limitation, the variable interest rate and that
member’s right to select the duration of an interest period), the
re-calculation taux effectif global
in respect of a Facility for that member as a result of the adjustments
referred to in Clause 4.5 (Interest, fees and commission), above cannot be
calculated on the date of this Agreement, but that, an indicative calculation
of the taux effectif global,
based on assumptions as to the period rate (taux
de période) and the period (durée
de période), will be
set out in a letter from the Lender or its agent (as the case may be) to the
relevant Borrowing Group Member; and

 

(b)                                 that letter shall form part of the Facility
to which it applies.

 

 

6.                                      NEW
GUARANTEE

 

6.1                               Guarantee

 

(a)                                  Subject to paragraph (b) below, the Guarantor
irrevocably and unconditionally:

 

(i)                                     guarantees to each Finance Party under the
Affected Facility Agreements to which such Finance Party is party, punctual
performance by each Borrowing Group Member which is party thereto of all its
payment obligations thereunder as amended or supplemented by this Agreement
(including without limitation pursuant to Clause 4.5 (whether or not such amendment
or supplement is effective));

 

(ii)                                  undertakes with that Finance Party that,
whenever that Borrowing Group Member does not pay any amount when due under or
in connection with that Affected Facility Agreement, it must immediately on
demand by the Intercreditor Agent pay that amount as if it were the principal
obligor; and

 

(iii)                               indemnifies that Finance Party immediately on demand against any cost,
loss or liability suffered by that Finance Party if any obligation guaranteed
by it is or becomes unenforceable, invalid or illegal or any amendment or
supplement of a payment obligation under an Affected Facility made or intended
to be made pursuant to this Agreement including without limitation Clause 4.5,
is not effective for any reason; the amount of the cost, loss or liability
under this indemnity will be equal to the amount that Finance Party would
otherwise have been entitled to recover.

 

(b)                                 The guarantee given by the Guarantor under
this Clause 6 is supplemental to and does not substitute or replace any other
guarantee existing at the date of this Agreement.

 

6.2                               Continuing guarantee

 

This guarantee is a
continuing guarantee and will extend to the ultimate balance of all sums
payable by each Borrowing Group Member under the Affected Facility Agreements to
which it is party, regardless of any intermediate payment or discharge in whole
or in part.

 

6.3                               Reinstatement

 

(a)                                  If:

 

(i)                                     any discharge (whether in respect of the
obligations of any Borrowing Group Member or any security for those obligations
or otherwise) is made in whole or in part; or

 

(ii)                                  any arrangement is made on the faith of any
payment, security or other disposition which is avoided or must be restored on
insolvency, liquidation or otherwise without limitation,

 

the liability of the Guarantor will continue as if the discharge or
arrangement had not occurred.

 

(b)                                 Each Finance Party may concede or compromise
any claim that any payment, security or other disposition is liable to
avoidance or restoration.

 

6.4                               Waiver of defences

 

The obligations of the
Guarantor under this Clause 6 will not be affected by any act, omission or
thing which, but for this provision, would reduce, release or prejudice any of
its obligations under this Clause 6 (whether or not known to it or any Finance
Party). This includes:

 

(a)                                  any time or waiver granted to, or composition
with, any Obligor or other person;

 

(b)                                 any release of an Obligor or other person
under the terms of any composition or arrangement;

 

(c)                                  the taking, variation, compromise, exchange,
renewal or release of, or refusal or neglect to perfect, take up or enforce,
any rights against, or security over assets of, any Obligor or other person;

 

(d)                                 any non-presentation or non-observance of any
formality or other requirement in respect of any instrument or any failure to
realise the full value of any security;

 

(e)                                  any incapacity or lack of power, authority or
legal personality of or dissolution or change in the members or status of an
Obligor or any other person;

 

(f)                                    any amendment (however fundamental) of a Transaction
Document or any other document or security;

 

(g)                                 any unenforceability, illegality or
invalidity of any obligation of any person under any Transaction Document or
any other document or security; or

 

 

(h)                                 any insolvency or similar proceedings.

 

6.5                               Immediate recourse

 

The Guarantor waives any
right it may have of first requiring any Finance Party (or any trustee or agent
on its behalf) to proceed against or enforce any other right or security or
claim payment from any person before claiming from the Guarantor under this
Clause.

 

6.6                               Appropriations

 

Until all amounts which may
be or become payable by the Obligors under the Transaction Documents to the
Finance Parties have been irrevocably paid in full, each Finance Party (or any
trustee or agent on its behalf) may:

 

(a)                                  without affecting the liability of the
Guarantor under this Clause 6:

 

(i)                                     refrain from applying or enforcing any other
moneys, security or rights held or received by that Finance Party (or any
trustee or agent on its behalf) in respect of those amounts; or

 

(ii)                                  apply and enforce them in such manner and
order as it sees fit (whether against those amounts or otherwise); and

 

(b)                                 hold in an interest-bearing suspense account
any moneys received from the Guarantor or on account of the Guarantor’s
liability under this Clause 6.

 

6.7                               Non-competition

 

Unless:

 

(a)                                  all amounts which may be or become payable by
the Obligors under the Transaction Documents to the Finance Parties have been
irrevocably paid in full; or

 

(b)                                 the Intercreditor Agent otherwise directs,

 

the Guarantor will not, after a claim has been made or by virtue of any
payment or performance by it under this Clause 6:

 

(i)                                     be subrogated to any rights, security or
moneys held, received or receivable by any Finance Party (or any trustee or
agent on its behalf); or

 

(ii)                                  claim, rank, prove or vote as a creditor of
any Obligor or its estate in competition with any Finance Party (or any trustee
or agent on its behalf).

 

The Guarantor must hold in
trust for and immediately pay or transfer to the Intercreditor Agent for the
Finance Parties any payment or distribution or benefit of security received by
it (A) contrary to paragraphs (i) or (ii) above or (B) with respect to any
contribution or indemnity in respect of any payment made or moneys received on
account of the Guarantor’s liability under this Clause 6 or in respect of any
payment or distribution or security from or on account of any Borrowing Group
Member or any right of set-off as against any Borrowing Group Member, subject
to and in accordance with the Subordination Agreement and in accordance with
any directions given by the Intercreditor Agent.

 

6.8                               Termination

 

The provisions of this
Clause 6 shall continue in full force and effect and shall survive the
termination of this Agreement with respect to any Default which occurs on or
before the Term Date notwithstanding the expiry of the Secured Intercreditor
Period.

 

7.                                      MANDATORY PREPAYMENT AND CANCELLATION

 

7.1                               Prepayment Event

 

(a)                                  The Company will notify the Intercreditor
Agent promptly upon the occurrence of a Prepayment Event. Upon being notified
by the Company of a Prepayment Event, the Intercreditor Agent shall promptly
inform each Lender.

 

 

(b)                                 Upon and at any time after having received
notice of a Prepayment Event from the Intercreditor Agent, each Lender, acting
through the Intercreditor Agent, may serve a notice of mandatory prepayment and
cancellation on the Company in respect of its Facility and:

 

(i)                                     on the date of the notice the commitment of
such Lender under its Facility shall be cancelled; and

 

(ii)                                  on the date falling 30 Business Days after
the date of service of such notice the Company shall prepay all participations
of such Lender in the Facility made to it in full through the Intercreditor
Agent together with any other amounts then due in connection with such
participations.

 

(c)                                  The Company and each Lender party to any
Derivatives Instruments or letter of credit facilities, confirmation
facilities, bond facilities and guarantee facilities will negotiate in good
faith with a view to providing to any such Lender the economic benefit of the
provisions of this Clause 7 if such Lender serves a notice on the Company for
such purpose.

 

(d)                                 If the Company seeks the consent of the
Lenders to a proposed Permitted Reorganisation, no Lender will unreasonably
delay in informing the Intercreditor Agent whether it consents to such proposed
Permitted Reorganisation.

 

7.2                               Disposals, equity and
capital market issues

 

(a)                                  Where a disposal is made by any member of the
Group of any Asset including a disposal made pursuant to the Asset Disposal
Programme, for which aggregate proceeds since the date of this Agreement exceed
€700,000,000 (or its equivalent in another currency), the Company must,
promptly on completion of that disposal, apply an amount equal to 50 per cent.
of the net disposal proceeds from any disposal which when aggregated with other
such disposal proceeds exceeds €700,000,000 (or its equivalent in other
currencies) in prepayment and/or cancellation of the principal amount of the
Affected Facilities in accordance with Clause 7.3 (Application of proceeds)
below.

 

(b)                                 (i)                                     Where the aggregate proceeds of a rights
issue launched by the Company prior to the Term Date exceed €300,000,000 (or
its equivalent in another currency), the Company must promptly apply an amount
equal to 25 per cent. of the net issuance proceeds of any issue in excess
of€300,000,000 in prepayment and/or cancellation of the principal amount of the
Affected Facilities in accordance with Clause 7.3 (Application of proceeds)
below.

 

(ii)                                  This paragraph (b) shall not apply in
relation to shares issued:

 

(A)                              in connection with employee share option
schemes; or

 

(B)                                to another member of the Group;

 

(iii)                               The provisions of this Clause 7.2(b) shall
survive termination of this Agreement and shall apply in respect of the net
proceeds of any such rights issue launched prior to the Term Date but which are
received after such date.

 

(c)                                  The Company must promptly upon receipt of the
same by any member of the Group apply an amount equal to 50 per cent. of the
net issuance proceeds of any issue of bonds or notes (including convertible
bonds or other equity-linked debt instruments), debt securities or other
capital markets instruments of any kind (whether publicly listed or privately
placed) by any member of the Group in prepayment and/or cancellation of the
principal amount of the Affected Facilities in accordance with Clause 7.3
(Application of proceeds) below.

 

(d)                                 In paragraphs (a), (b) and (c) above:

 

net disposal proceeds means any amount received by a member of the
Group as consideration for a disposal to a person which is not a Borrowing
Group Member, including the amount of any intercompany loan repaid to
continuing members of the Group and including any Financial Indebtedness
assumed or repaid, less all Taxes payable in the financial year in which the
disposal is effected or proceeds received and reasonable costs and expenses
incurred by members of the Group in connection with the disposal or receipt as
set out in reasonable detail in a certificate provided by the chief financial
officer of the Company; and

 

net issuance proceeds means any amount received by any member of
the Group less all Taxes and reasonable costs and expenses incurred by members
of the Group in connection with that receipt.

 

 

7.3                               Application of proceeds

 

(a)                                  Where an amount (the Prepayment Amount) is to be applied in
prepayment and cancellation of the principal amount of the Affected Facilities
in accordance with Clauses 7.1 (Prepayment Event) and 7.2 (Disposals, equity
and capital market issues) above, the Company shall (subject to paragraphs (b)
and (c) below) prepay and/or cancel the principal amount of each such Affected
Facility in accordance with paragraph (d) below in an amount equal to that
Affected Facility’s Relevant Proportion of the Prepayment Amount on the day on
which the obligation under this Clause 7.3 to prepay and cancel arises.

 

(b)                                 Where the Prepayment Amount relates to net
disposal proceeds from the disposal of shares in a Borrowing Group Member (the Disposed Group Member), the Company must
ensure that the Borrowing Group Members apply that amount in prepayment and
cancellation pro rata according
to their respective Relevant Proportions of the Affected Facilities (other than
an Affected Facility made to that Disposed Group Member). For the purposes of
this Clause 7, any Facility made to a Disposed Group Member shall be deemed not
to be an Affected Facility on and following the date on which the disposal of
the Disposed Group Member occurs and the Disposed Group Member shall no longer
be a Borrowing Group Member from such date.

 

(c)                                  Where the Prepayment Amount relates to net
disposal proceeds from the disposal of an asset (other than shares in a
Borrowing Group Member), the Company must apply, and must ensure that the
Borrowing Group Members apply, an amount equal to such net disposal proceeds in
prepayment and cancellation pro rata
according to their respective Relevant Proportions of the Affected Facilities.

 

(d)                                 Any amount required by this Clause 7.3 to be
applied in prepayment and cancellation of an Affected Facility must be applied
by the Company to that Affected Facility (in accordance with its terms) first
in prepayment and cancellation of the principal amount outstanding under that
Affected Facility (if any) and second to any other amount in permanent
prepayment and cancellation thereof and thirdly in permanent cancellation of
undrawn amounts (if any) under that Affected Facility. Where the Company
prepays an amount outstanding under an Affected Facility pursuant to this
Clause it must at the same time permanently cancel the commitments of the
Lenders under that Affected Facility which correspond to the amount prepaid.

 

(e)                                  Any amount required by this Clause 7.3 to be
applied in prepayment and cancellation of the principal amount of an Affected
Facility and which is paid to or for the benefit of the relevant Lender shall,
for the purposes of this Agreement and irrespective of any other appropriation
of that amount by a Lender in connection with that Affected Facility, be taken
as having reduced that principal amount pro
tanto.

 

(f)                                    Where an amount is to be applied under this
Clause 7.3 in prepayment of any amount outstanding under the Affected
Facilities, unless the date on which the payment is to be made by the Company
is the last day of an interest period (as defined in the relevant Affected
Facility Agreement), that amount shall be paid through the Intercreditor Agent
into an interest bearing blocked and secured account in France in the name of
the Security Agent or the Intercreditor Agent. The Company irrevocably
authorises the Intercreditor Agent to apply any amount deposited with it under
this paragraph (f) towards prepayment of the Affected Facilities on the last
day of the relevant interest period (as defined in the relevant Affected
Facilities Agreement) or earlier at the discretion of the Intercreditor Agent.

 

(g)                                 For the purposes of this Clause 7.3, a
contingent claim of a Lender under an Affected Facility with respect to any
bond, letter of credit, guarantee or similar instrument is prepaid by the
Company providing cash cover in an interest bearing blocked and secured account
in the name of the Security Agent or the Intercreditor Agent in respect of that
claim to that Lender.

 

8.                                      REPRESENTATIONS AND WARRANTIES

 

8.1                               Representations and
warranties

 

Each Obligor makes the
representations and warranties set out in this Clause 8 in respect of itself
and each of its Subsidiaries to each Finance Party. In addition, the Company makes
the representations and warranties set out in this Clause 8 in respect of
itself and each Borrowing Group Member to each Finance Party.

 

8.2                               Status

 

(a)                                  It is a limited liability company, duly
incorporated and in good standing and validly existing under the laws of the
jurisdiction of its incorporation; and

 

(b)                                 it has the power to own its assets and carry
on its business as it is being conducted.

 

 

8.3                               Powers and authority

 

It has the power to enter
into and perform, and has or will have taken at the relevant time all necessary
action to authorise the entry into, performance and delivery of, the
Transaction Documents and the Refinancing Facilities Term Sheet to which it is
or will be a party and the transactions contemplated by those documents.

 

8.4                               Legal validity

 

Each Transaction Document
and the agreements relating to the Refinancing Facilities Term Sheet to which
it is or will be a party constitutes, or when executed in accordance with its
terms will constitute, its legally binding, valid and enforceable obligation.

 

8.5                               Non-conflict

 

The entry into and
performance by it of, and the transactions contemplated by, the Transaction
Documents and the Refinancing Facilities Term Sheet do not and will not
conflict with:

 

(a)                                  any law or regulation or judicial or official
order; or

 

(b)                                 its or any of its Subsidiaries’
constitutional documents; or

 

(c)                                  any document which is binding upon it or any
of its or its Subsidiaries’ assets.

 

8.6                               No Default

 

(a)                                  No Default is outstanding on the date of this
Agreement or the Commencement Date and thereafter no Event of Default is
outstanding.

 

(b)                                 No event or circumstance is outstanding which
constitutes (or, with the giving of notice, lapse of time, determination of
materiality or the fulfilment of any other applicable condition or any
combination of the foregoing, might constitute) a default, termination event or
early prepayment event under any document which is binding on it or any of its
Subsidiaries.

 

(c)                                  Paragraphs (a) and (b) do not apply to
Defaults or events or circumstances the full details of which have been
notified in writing to the Intercreditor Agent and the Lenders prior to the
date of this Agreement.

 

8.7                               Authorisations

 

All authorisations required
by it or desirable in connection with the entry into, performance, validity and
enforceability of, and the transactions contemplated by, the Transaction
Documents and the implementation of the Refinancing Facilities Term Sheet, the
Asset Disposal Programme and the Rights Issue have been, or will be when necessary,
obtained or effected (as appropriate) and are, or will be when obtained or
effected, in full force and effect.

 

8.8                               Title

 

It and each member of the
Group has good title to, or valid leases of, or is otherwise entitled to use
all material assets necessary to conduct its business as it is conducted at the
date of this Agreement.

 

8.9                               Litigation

 

(a)                                  No litigation, arbitration or administrative
proceedings are current or, to its knowledge, pending or threatened against it
on the date of this Agreement and the Commencement Date which have or could
reasonably be expected to involve a claim or related claims in excess of
€15,000,000 (or its equivalent in other currencies) and thereafter which have
or could reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Paragraph (a) does not apply to proceedings
the full details of which have been provided to the Intercreditor Agent.

 

8.10                        Pari Passu Ranking

 

Its obligations under the
Finance Documents rank and will rank at least pari
passu with all its other unsecured and unsubordinated obligations
except for obligations mandatorily preferred by law applying to companies
generally.

 

 

8.11                        Taxes on payments

 

All amounts payable by each
Obligor under the Finance Documents can be made free and clear of and without
deduction for or on account of any Tax.

 

8.12                        Stamp duties

 

No stamp or registration
duty or similar taxes or charges are payable in its jurisdiction of
incorporation in respect of any Finance Document.

 

8.13                        Immunity

 

(a)                                  The execution by each Obligor of each Finance
Document constitutes, and its exercise of its rights and performance of its
obligations under each Finance Document will constitute, private and commercial
acts done and performed for private and commercial purposes; and

 

(b)                                 no Obligor will be entitled to claim immunity
from suit, execution, attachment or other legal process in any proceedings
taken in its jurisdiction of incorporation in relation to any Finance Document.

 

8.14                        No adverse consequences

 

(a)                                  It is not necessary under the laws of its
jurisdiction of incorporation:

 

(i)                                     in order to enable any Finance Party to
enforce its rights under any Finance Document; or

 

(ii)                                  by reason of the execution of any Finance
Document or the performance by it of its obligations under any Finance Document,

 

that any Finance Party
should be licensed, qualified or otherwise entitled to carry on business in its
jurisdiction of incorporation; and

 

(b)                                 no Finance Party is or will be deemed to be
resident, domiciled or carrying on business in its jurisdiction of
incorporation by reason only of the execution, performance and/or enforcement
of any Finance Document.

 

8.15                        Jurisdiction/governing law

 

(a)                                  Each Obligor’s:

 

(i)                                     irrevocable submission under Clause 24
(Jurisdiction) to the jurisdiction of the courts of England and the United
States;

 

(ii)                                  agreement that this Agreement is governed by
English law; and

 

(iii)                               agreement not to claim any immunity to which
it or its assets may be entitled,

 

are legal, valid and binding
under the laws of its jurisdiction of incorporation; and

 

(b)                                 any judgement obtained in England or in the
United States will be recognised and be enforceable by the courts of its
jurisdiction of incorporation.

 

8.16                        Security Interests and
guarantees

 

(a)                                  It is the legal and beneficial owner of the
property which it purports to charge pursuant to the Security Documents. No
Security Interests, third party rights, options, claims and competing interests
whatsoever exist over any of its assets other than as permitted by Clause 9.7
(Negative pledge).

 

(b)                                 The Security Interests granted or intended to
be granted under the Security Documents constitute first ranking security in
favour of the Finance Parties.

 

(c)                                  The guarantees given by any Borrowing Group
Member in respect of an Affected Facility continue in full force and effect
with respect to the Affected Facilities as supplemented by this Agreement.

 

 

8.17                        Environmental matters

 

It has obtained any and all
Environmental Licences required for the carrying on of its business as
currently conducted and is in compliance in all material respects with (a) the
terms and conditions of such Environmental Licences and (b) all other
applicable Environmental Law which in each case, if not complied with, has, or
could reasonably be expected to have a Material Adverse Effect.

 

8.18                        Financial Statements and
Business Plan

 

(a)                                  The consolidated financial statements of the
Company most recently delivered to the Intercreditor Agent (which, at the date
of this Agreement, are the Original Financial Statements):

 

(i)                                     have been prepared in accordance with
accounting principles and practices generally accepted in its jurisdiction of
incorporation, consistently applied; and

 

(ii)                                  give a true and fair view of its financial
condition (consolidated, if applicable) as at the date to which they were drawn
up,

 

(b)                                 There has been no material adverse change in
the consolidated financial condition of the Group since the date of the
Original Business Plan.

 

(c)                                  The projections and forecasts contained in
the Business Plan most recently delivered to the Intercreditor Agent were made
in good faith and are based on reasonable assumptions and such Business Plan
does not as at its date omit any projections or forecasts which would make that
Business Plan misleading.

 

8.19                        Information

 

(a)                                  (Unless the Company has notified the
Intercreditor Agent (which shall notify the Lenders) in writing to the contrary
prior to the date of this Agreement, correcting the relevant inaccuracy or lack
of completeness) all written information (other than the Business Plan) (and
including all reports) provided to the Co-ordinating Committee or any other
Finance Party by or on behalf of an Obligor prior to the date of, and in
connection with, this Agreement (the Information)
was true, complete and accurate in all material respects as at the date it was
supplied.

 

(b)                                 All expressions of opinion contained in the
Information were made after careful consideration and were believed by the
Company or a Borrowing Group Member to be reasonable as at the date at which
they were stated to be given.

 

(c)                                  The financial projections contained in the
Information were prepared on the basis of assumptions believed by the Company
or a Borrowing Group Member to be reasonable and prudent as at the date at
which they were stated to be given.

 

(d)                                 Save as otherwise disclosed on or before the
date of delivery of the Information nothing has occurred since the date of that
Information (or, if applicable, the date of any factual information contained
therein as referred to therein) which, if disclosed, would make that
Information untrue or misleading in any material respect.

 

8.20                        Existing Facilities

 

(a)                                  The details in Schedule 3 given in relation
to each Existing Facility are, as at the date of this Agreement or, in the case
of the Exposures, the Calculation Point, true, accurate and complete.

 

(b)                                 Schedule 3 identifies each agreement under
which any member of the Group or Relevant Entity can incur or has outstanding
Financial Indebtedness or to which there is recourse in respect of Financial
Indebtedness to any Borrowing Group Member in each case on the date of this
Agreement.

 

8.21                        Asset Disposal Programme and
Rights Issue

 

The Company has no reason to
believe that the Asset Disposal Programme and Rights Issue cannot be completed
in full in accordance with the timetable applicable thereto and that any
authorisation or consent necessary for the disposal of an asset referred to in
the Asset Disposal Programme or for the launch and implementation of the Rights
Issue will not be forthcoming in time to allow that disposal or Rights Issue to
be implemented in accordance with that timetable.

 

 

8.22                        Inter-Company Indebtedness

 

The list of Inter-Company
loans made to or by each Obligor provided to the Intercreditor Agent pursuant
to this Agreement, being on the date of this Agreement the list set out in
Schedule 7 (Inter Company Loans), is complete and correct in all material
respects as at its date.

 

8.23                        Solvency of Obligors

 

(a)                                  No proceedings of any nature are current or,
to its knowledge, pending or threatened, for the winding-up or dissolution
(other than a solvent winding up or dissolution) of, or in respect of any
insolvency proceeding of any nature relating to any Obligor or each of its
Subsidiaries.

 

(b)                                 It has not defaulted on any of its payment
obligations under any Facility and the Obligors and each of its Subsidiaries
are in a position to meet their respective scheduled payments as they fall due.

 

(c)                                  In relation to each Obligor (other than
Primester in the case of paragraphs (i) and (ii) below) and its Subsidiaries
incorporated or organised in the United States of America (on a consolidated
basis):

 

(i)                                     the aggregate amount of its debts (including
its obligations (if any) under the Finance Documents and the Facility
Agreements) is less than the aggregate value (being the lesser of fair present
valuation and present fair saleable value) of its assets (which for, avoidance
of doubt, include, without limitation, all rights of indemnification,
contribution and subrogation);

 

(ii)                                  its capital is not unreasonably small to
carry on its business as it is being conducted;

 

(iii)                               it did not incur (on the date incurred) and
will not incur, debts beyond its ability to pay as they mature; and

 

(iv)                              it has not made a transfer or incurred any
obligation under any Finance Document or Facility Agreement with the intent to
hinder, delay or defraud any of its present or future creditors.

 

Terms used in this paragraph
(c) have the meanings given to them in the United States Bankruptcy Code of
1978, as amended, and applicable fraudulent conveyance laws in the United
States of America.

 

8.24                        Group Structure Chart

 

As at the date of this
Agreement, the Group Structure Chart describes the corporate ownership
structure of all members of the Group and the Borrowing Group and is true,
complete and correct in all material respects.

 

8.25                        United States laws

 

(a)                                  It is not:

 

(i)                                     a holding company, an affiliate of a holding
company or a subsidiary company of a holding company within the meaning of, or
otherwise subject to regulation under PUHCA;

 

(ii)                                  a public utility, or subject to regulation,
under the Federal Power Act;

 

(iii)                               an investment company or a company controlled
by an investment company; or

 

(iv)                              subject to regulation under any United States
Federal or State law or regulation that limits its ability to incur or
guarantee indebtedness.

 

(b)                                 ERISA

 

(i)                                     No ERISA Event that could reasonably be
expected to have a Material Adverse Effect has occurred or is reasonably
expected to occur with respect to any Plan.

 

(ii)                                  The present value of the benefit liabilities
under each Plan, as determined for the purposes of Schedule B (Actuarial
Information) to such Plan’s most recently completed annual report (Form 5500
Series) that has been filed with the required United States governmental
agencies, which Schedule B is complete and accurate in all material respects,
did not, as of the date of such valuation, exceed the fair market value of the
assets of such Plan by an amount that, when aggregated with any such excess
under any other Plan, could reasonably be expected to have a Material Adverse
Effect, and since the date of such valuation there has been no material adverse
change in such funding status that, when aggregated with any such change with
respect to any other Plan, could reasonably be expected to have a Material
Adverse Effect.

 

 

(iii)                               Except as could not reasonably be expected to
have a Material Adverse Effect, neither it nor any ERISA Affiliate has incurred
or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan.

 

(iv)                              Except as could not reasonably be expected to
have a Material Adverse Effect, neither it nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganisation or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganisation or to be terminated, within the meaning of Title IV of ERISA.

 

8.26                        Times for making
representations and warranties

 

The representations and warranties set out in this Clause 8:

 

(a)                                  are made by each Obligor on the date of this
Agreement; and

 

(b)                                 are deemed to be repeated by each Obligor on
the Commencement Date with reference to the facts and circumstances then
existing; and

 

(c)                                  except those made under Clause 8.6(b) (No
Default), Clause 8.8 (Title), Clause 8.11 (Taxes on payments), Clause 8.12
(Stamp duties), Clause 8.18(c) (Financial Statements and Business Plan), Clause
8.19 (Information), Clause 8.20 (Existing Facilities), Clause 8.21 (Asset
Disposal Programme and Rights Issue), Clause 8.23 (Solvency of Obligors) and
Clause 8.24 (Group Structure Chart) are deemed to be repeated on each roll-over
date determined in accordance with Clause 4.6 (Renewals and Roll-Overs) and in
the case of Clause 8.18(c) (Financial Statements and Business Plan), on each
date that a Business Plan is delivered after the Commencement Date, and in the
case of Clause 8.22 (Inter-Company Indebtedness) on each date that a list of
Inter-Company loans referred to therein is delivered after the Commencement
Date, in each case, with reference to the facts and circumstances then
existing.

 

9.                                      UNDERTAKINGS

 

9.1                               Duration

 

The undertakings in this
Clause 9 remain in force from the date of this Agreement until (i) the Term
Date; or (ii) if a Default is outstanding on the Term Date, until no Default is
outstanding.

 

9.2                               Financial information

 

(a)                                  The Company shall supply or procure that the
relevant member of the Group supplies to the Intercreditor Agent in sufficient
copies for the Lenders:

 

(i)                                     as soon as the same are available (and
subject to paragraph (B) below in any event within 60 days of the end of its
respective financial years):

 

(A)                              the audited consolidated financial statements
of the Company for the financial year; and

 

(B)                                the audited financial statements of each
Borrowing Group Member to the extent the same are required to be supplied under
the Facility Agreement to which it is party, subject to and in accordance with
its terms;

 

(ii)                                  as soon as the same are available (and in any
event with 60 days of the end of its respective financial half-years) the
revised consolidated financial statements of the Company and to the extent the
same are required to be supplied under the Facility Agreement to which it is
party, a Borrowing Group Member for that half-year;

 

(iii)                               as soon as the same are available (and in any
event within 60 days of the end of each of its respective financial quarters)
the consolidated financial statements of the Company and to the extent the same
are required to be supplied under the Facility Agreement to which it is party,
a Borrowing Group Member for that financial quarter;

 

(iv)                              as soon as they become available (and in any
event within 30 days of the end of each calendar month) a copy of its
management accounts for that calendar month which shall contain a profit and
loss statement and cashflow and liquidity;

 

 

and

 

(v)                                 in respect of each Relevant Entity:

 

(A)                              as soon as the same are available (and in any
event within 120 days of the end of each financial year of each Relevant
Entity) the audited consolidated financial statements of that Relevant Entity
for that financial year; or

 

(B)                                if the audited consolidated financial
statements referred to in paragraph (A) above are not prepared by a Relevant
Entity, as soon as the same are available (and in any event within 60 days of
the end of each financial year of that Relevant Entity) the financial
statements of that Relevant Entity for that financial year; and

 

(C)                                provided the same are prepared by a Relevant
Entity and the Company is entitled to receive them, as soon as the same are
available (and in any event within 45 days of the end of each financial half
year of each Relevant Entity) the financial statements (consolidated if prepared)
of that Relevant Entity for that half year.

 

(b)                                 Subject to paragraph (c) below, the Company
shall ensure that:

 

(i)                                     each set of financial statements delivered by
it pursuant to paragraphs (a)(i) to (a)(iv) above:

 

(A)                              is prepared in accordance with accounting
principles and practices generally accepted in France consistently applied;

 

(B)                                shall give a true and fair view of the
financial condition of the Group as at the end of the period to which those
financial statements relate and of the results of its operations during that
period; and

 

(C)                                is (in the case of the financial statements
referred to in paragraph (a)(i)(A) above) audited by an internationally
recognised independent qualified firm of auditors.

 

(c)                                  The Company shall ensure that each set of
financial statements delivered pursuant to paragraph (a)(v) above is prepared
in accordance with either:

 

(i)                                     accounting principles and practices generally
accepted internationally if, in the place of establishment or incorporation of
the Relevant Entity concerned there is a legal requirement to do so; or

 

(ii)                                  if no such requirement exists, accounting
principles and practices generally accepted in the place of establishment or
incorporation of the Relevant Entity concerned,

 

in each case consistently applied
and shall give a true and fair view of the financial condition of the Relevant
Entity to which they relate as at the end of the period to which those accounts
relate and of the results of its operations during that period.

 

(d)                                 Together with each set of financial
statements delivered under paragraph (a)(i)(A) above, the Company shall deliver
a Compliance Certificate signed by its statutory auditors setting out in
reasonable detail (to the Intercreditor Agent’s reasonable satisfaction)
computations in respect of the definitions used in and for the purposes of
establishing compliance with the financial covenants in Clause 10 (Financial
covenants) as at the Testing Date (as defined in Clause 10) to which the
financial statements with which the relevant Compliance Certificate was
delivered were made.

 

(e)                                  Together with each set of financial
statements delivered under paragraph (a)(ii) above, the Company shall deliver a
Compliance Certificate signed by its chief financial officer setting out in
reasonable detail computations in respect of the definitions used in and for
the purposes of establishing compliance with the financial covenants in Clause
10 (Financial covenants) as at the Testing Date (as defined in Clause 10) to
which those financial statements were made up.

 

(f)                                    Together with each set of financial
statements delivered under paragraph (a)(i) and (a)(ii) above, the Company
shall deliver to the Intercreditor Agent a certificate listing the Material
Subsidiaries as determined from those financial statements.

 

(g)                                 The Company shall supply the Intercreditor
Agent (in sufficient copies for the Lenders) with:

 

(i)                                     an update of the Business Plan validated by
Ernst & Young (to include an analysis and projections of liquidity and
cash) on 31st December, 2003 and quarterly thereafter in accordance with the
agreed scope of work;

 

(ii)                                  (A) as soon as the same are available and in
any event within 12 Business Days of the end of each calendar month, details of
the amounts of consolidated gross and net cash available to the Company and the
Exposures under the Facilities commencing with the calendar month ending 31st
December, 2003; and (B) shall use its best efforts to supply monthly liquidity
and cash flow forecasts for each calendar month including a 12-month rolling
forecast for the next twelve months commencing with the calendar month ending
30th April, 2004;

 

 

(iii)                               as soon as the same are available and in any
event within 10 Business Days of the end of each calendar month, a list of all
Inter-Company loans made to or by each Obligor as at the end of that calendar
month;

 

(iv)                              such information, access to personnel and
other assistance as is necessary to enable the Finance Parties to monitor the
cash flow of the Group and compare it with the liquidity and cash flow
forecast; and

 

(v)                                 such other information in respect of any of
the Obligors as the Intercreditor Agent (acting on the instructions of the
Majority Lenders) may reasonably request.

 

(h)                                 Promptly on the supply to the Intercreditor
Agent of the annual financial statements for the financial year of 2003, the
Company shall ensure the availability of senior management of the Company for a
presentation to the Lenders.

 

9.3                               Information-miscellaneous

 

Each Obligor shall and the
Company shall ensure that each Borrowing Group Member will supply to the
Intercreditor Agent in sufficient copies for the Lenders:

 

(a)                                  all notices and documents dispatched by it to
its shareholders (or any class of them) or its creditors (or any class of them)
at the same time as they are dispatched;

 

(b)                               (i)                                       to the extent legally permissible, any
report, notice or statement made or issued to any regulatory authority or stock
exchange of an Obligor promptly upon making or issuing the report, notice or
statement; and

 

(ii)                                  where the report, notice or statement refers
to the Lenders, the Company shall where legally permissible, give the
Intercreditor Agent opportunity to comment on the report, notice or statement
prior to its making or issue;

 

(c)                                  promptly, a copy of any material notification
received from any rating agency in respect of the Company’s long term credit
rating;

 

(d)                                 promptly upon becoming aware of them, details
of any material litigation, arbitration or administrative proceedings which are
current, threatened or pending which it is or may become involved in; and

 

(e)                                  promptly, such further information in the
possession or control of any member of the Group regarding its financial
condition, structure, business and management as any Finance Party may
reasonably request.

 

9.4                               Notification of Default

 

(a)                                  The Company or relevant Obligor shall,
promptly upon becoming aware of the occurrence of the same, notify the
Intercreditor Agent of:

 

(i)                                     any Default in respect of it or its
Subsidiaries (and the steps, if any, being taken to remedy it); or

 

(ii)                                  any event or circumstance which constitutes
(or, with the giving of notice, lapse of time, determination of materiality or
the fulfilment of any applicable condition or any combination of the foregoing,
might constitute) a default, termination event or early prepayment event under
any document which is binding on it or any of its Subsidiaries.

 

(b)                                 The Intercreditor Agent will promptly notify
each Lender (or where appropriate each Facility Agent acting on behalf of a
Lender) of any such Default or event or circumstance upon receipt of
notification from the Obligor.

 

(c)                                  Promptly upon any request by the
Intercreditor Agent (acting in good faith) the Company must supply to the
Intercreditor Agent a certificate, signed by two of its authorised signatories
on its behalf, certifying that no Default is outstanding or, if a Default is
outstanding, specifying the Default and the steps, if any, being taken to
remedy it.

 

 

9.5                               Authorisations

 

Each Obligor shall and the
Company shall ensure that each Borrowing Group Member will promptly:

 

(a)                                  obtain, maintain and comply with the terms
of; and

 

(b)                                 supply certified copies to the Intercreditor
Agent of,

 

any authorisation required
or desirable under any law or regulation to enable it to enter into or to perform
its obligations under, or for the performance, validity or enforceability of,
and the transactions contemplated by, any Transaction Document and the
implementation of the Asset Disposal Programme, the Rights Issue and the
Refinancing Facilities Term Sheet.

 

9.6                               Pari passu ranking

 

Each Obligor shall and the
Company shall ensure that each Borrowing Group Member will procure that its
obligations under the Finance Documents and the Affected Facility Agreements do
and will rank at least pari passu
with all its other present and future unsecured and unsubordinated obligations,
except for obligations mandatorily preferred by law applying to companies
generally.

 

9.7                               Negative pledge

 

(a)                                  No Obligor shall, and the Company shall
procure that no other member of the Group or a Borrowing Group Member will,
create or permit to subsist any Security Interest on any of its assets.

 

(b)                                 Paragraph (a) does not apply to:

 

(i)                                     Existing Security Interests as set out in
Part 1 of Schedule 4 (List of Existing Security Interests);

 

(ii)                                  any lien arising by operation of law in the
ordinary course of business and securing amounts not more than 30 days overdue;

 

(iii)                               any Security Interest over assets granted or
to be granted in favour of a Finance Party under a Security Document or under
or in accordance with Clause 7.3(g);

 

(iv)                              any Security Interest over assets other than
those identified in the Agreed Security Principles or referred to in paragraph
(iii) above, to the extent necessary in order to maintain, refinance, replace or,
to the extent permitted by this Agreement, incur new Financial Indebtedness up
to a maximum aggregate amount of €60,000,000 (or its equivalent in other
currencies); or

 

(v)                                 any Derivative Deposit or Lessor Reduction.

 

9.8                               Transactions similar to
security

 

(a)                                  No Obligor shall, and the Company shall
procure that no other member of the Group or a Borrowing Group Member will:

 

(i)                                     sell, transfer or otherwise dispose of any of
its assets on terms whereby it is or may be leased to or re-acquired or
acquired by a member of the Group or any of its related entities; or

 

(ii)                                  sell, transfer or otherwise dispose of any of
its receivables on recourse terms,

 

in circumstances where the
transaction is entered into primarily as a method of raising finance or of
financing the acquisition of an asset.

 

(b)                                 Paragraph (a) above does not apply to any
disposal of receivables made in respect of the existing Securitisation
Programmes with Limited Recourse only.

 

9.9                               Disposals

 

(a)                                  No Obligor shall, and the Company shall
procure that no other member of the Group or a Borrowing Group Member will,
either in a single transaction or in a series of transactions, whether related
or not, dispose of all or any part of its assets.

 

(b)                                 Paragraph (a) does not apply to:

 

 

(i)                                     disposal of stock-in-trade, business
inventories, fixtures and fittings, furniture and other office equipment, made
in the ordinary course of business of the disposing entity;

 

(ii)                                  disposal of assets (other than shares) in
exchange for other assets comparable or superior as to type, value and quality;

 

(iii)                               disposal of assets (other than the business
of the Company) or shares as part of an intra-group re-organisation from one
Obligor to another Obligor on arms’-length terms, in each case, subject to and
in accordance with Clause 9.11 (Mergers, acquisitions and intra-group
re-organisations);

 

(iv)                              disposal of assets for cash in accordance
with the Asset Disposal Programme and other disposal of assets for cash where
50% of the net proceeds of any such disposal are applied in mandatory
prepayment and cancellation of the Affected Facilities subject to and in
accordance with Clause 7.2 (Disposals, equity and capital market issues) of
this Agreement;

 

(v)                                 disposal of assets made in respect of the
existing Securitisation Programmes with Limited Recourse only;

 

(vi)                              disposal for cash on a non-recourse basis of
VAT credits; or

 

(vii)                           transactions with the prior written approval
of the Majority Lenders.

 

9.10                        Change of
business/registered office

 

(a)                                  The Company shall procure that no substantial
change is made to the general nature or scope of the business of the Company or
the Group (taken as a whole) from that carried on at the date of this
Agreement.

 

(b)                                 The Company shall not change its place of
incorporation or registered head office to one outside the European Union.

 

9.11                        Mergers, acquisitions and
intra-group re-organisations

 

(a)                                  No Obligor shall, and the Company shall
procure that no other member of the Group or a Borrowing Group Member will
enter into any amalgamation, demerger, merger, reconstruction or
re-organisation otherwise than under an intra-group re-organisation involving
the transfer of assets (including of a business other than the business of the
Company) and/or shares provided that such intra-group re-organisation:

 

(i)                                     unless a Permitted Reorganisation, does not
involve the Company;

 

(ii)                                  does not affect any of its assets which are
or are intended to be subject to Security Interests granted in favour of the
Lenders or, to the extent that it does affect any such assets, substitute
Security Interests are granted over assets of a greater or equivalent value
prior to such intra-group re-organisation (together with legal opinions) in
each case in a form and substance satisfactory to the Majority Lenders;

 

(iii)                               does not or is not reasonably likely to
result in a Material Adverse Effect or a Default;

 

(iv)                              does not affect any of the rights or remedies
of the Lenders under the Finance Documents or the Affected Facility Agreements;
and

 

(v)                                 where it involves a Borrowing Group Member
(other than by way of a transfer of its shares), the Lender or Lenders party to
a Facility with that Borrowing Group Member, have provided their prior written
consent.

 

(b)                                 Save as allowed by paragraph (c) below,

 

(i)                                     each Obligor which is not a Joint Venture
Entity shall not;

 

(ii)                                  each Obligor which is a Joint Venture Entity
shall use its best efforts not to; and

 

(iii)                               the Company shall ensure that no member of
the Group will, and to the fullest extent within its power or control that no Joint
Venture Entity will,

 

acquire any assets or
business or make any investment in any business, shares or other securities.

 

 

(c)                                  Paragraph (b) above shall not prevent:

 

(i)                                     acquisitions or investments made in the
ordinary course of trade;

 

(ii)                                  acquisitions with an aggregate consideration
in any financial year of the Group not in excess of €10,000,000 or its
equivalent;

 

(iii)                               acquisitions made with the prior consent of
the Intercreditor Agent (acting on the instructions of the Majority Lenders);
or

 

(iv)                              capital contributions made to Relevant
Entities or Joint Venture Entities by way of inter-company loan or share
capital provided that the aggregate amount of such contributions made since the
date of this Agreement less the aggregate amount of (A) contributions repaid
directly or indirectly to the Company; and (B) the amount of any dividend
distributed directly or indirectly to the Company with respect to that capital
contribution to the extent in excess of the dividends projected to be received
by the Company and Subsidiaries on a fully consolidated basis by reference to
the Original Business Plan does not exceed at any time € 50,000,000 (or its
equivalent in another currency), taking into account any capital contributions
made under Clause 9.16 (Lending and borrowing).

 

9.12                        Capital expenditure

 

No Obligor (except if a
Relevant Entity) shall and the Company shall procure that no other member of
the Group shall incur any tangible or intangible capital expenditure except
where such capital expenditure in aggregate does not exceed 110 per cent. per
annum of the aggregate amount of capital expenditure per annum set out in the
Business Plan.

 

9.13                        Insurance

 

Each Obligor shall and the
Company shall ensure that each Material Subsidiary and each Borrowing Group
Member insures its business and assets with insurance companies to such an
extent and against such risks as companies engaged in a similar business
normally insure.

 

9.14                        Maintenance of status

 

Each Obligor shall, and the
Company shall procure that each Material Subsidiary and each Borrowing Group
Member will:

 

(a)                                  do all such things as are necessary to
maintain its corporate existence; and

 

(b)                                 ensure that it has the right and is duly
qualified to conduct its business as it is conducted in all applicable
jurisdictions.

 

9.15                        Amendments to Facilities

 

(a)                                  No Obligor shall and the Company shall ensure
that no Borrowing Group Member will agree to amend, or seek a waiver of, any
term of any Facility or exercise any right to terminate or reduce any amount
available for drawing under any Facility Agreement.

 

(b)                                 Paragraph (a) does not apply to:

 

(i)                                     any term of any Facility preventing any
Obligor from complying with its obligations under this Agreement; or

 

(ii)                                  any agreement to extend the maturity of any
Facility; or

 

(iii)                               any amendment required to be made under the
terms of this Agreement including, without limitation, under Clause 9.21(a)
(Rights Issue and Other Matters).

 

9.16                        Lending and borrowing

 

(a)                                  Subject to paragraphs (b) and (c) below, no
Obligor shall and the Company shall ensure that no member of the Group or any
Borrowing Group Member will make any loans or provide any other form of credit
(including, without limitation, vendor credit) to any person.

 

(b)                                 Paragraph (a) does not apply to loans or any
other form of credit provided to an Obligor in accordance with the
Subordination Agreement when entered into and otherwise in accordance with its
cash pooling arrangements.

 

 

(c)                                  Paragraph (a) does not apply to capital
contributions made to Relevant Entities or Joint Venture Entities by way of
inter-company loan or share capital provided that the aggregate amount of
contributions made by way of share capital or inter-company loan since the date
of this Agreement less the aggregate amount of (A) such contributions repaid
directly or indirectly to the Company; and (B) the amount of any dividend
distributed directly or indirectly to the Company with respect to that capital
contribution to the extent in excess of the dividends expected to be received
by reference to the latest Business Plan, does not exceed at any time €
50,000,000 (and after the Term Date, subject to and in accordance with the
Refinancing Facilities Agreement, €90,000,000), taking into account any capital
contributions made under Clause 9.11 (Mergers, acquisitions).

 

(d)                                 Subject to the provisions of Clause 9.17(c),
no Obligor shall and the Company shall ensure that no Borrowing Group Member
will give any guarantee or indemnity to or for the benefit of any person in
respect of any obligation of any other person or enter into any document under
which it assumes any liability of any other person except under the Existing
Facilities and this Agreement.

 

9.17                        Financial Indebtedness

 

The Company shall not and it
shall ensure that no member of the Group will and, to the fullest extent within
its power or control, no Relevant Entity shall incur any Financial Indebtedness
(including, without limitation, guarantees of joint venture entities) except:

 

(a)                                  Financial Indebtedness outstanding under the
Existing Facilities at the date of this Agreement and the Refinancing
Facilities Agreement;

 

(b)                                 Financial Indebtedness owed to another member
of the Group on the date of this Agreement and thereafter in accordance with
its cash pooling arrangements and in each case which is subordinated subject to
and in accordance with the Subordination Agreement when entered into;

 

(c)                                  refinancing of Financial Indebtedness under
Unaffected Credit Facilities (other than Unaffected Committed Facilities)
existing at the date of this Agreement up to a maximum aggregate amount of
€50,000,000 (or its equivalent in other currencies) by an Unaffected Credit
Facility with a final maturity date no earlier than both (A) the Term Date; and
(B) the final maturity of the refinanced Unaffected Credit Facility and on
terms which do not put or seek to put the creditor of the refinanced Unaffected
Credit Facility in a preferred position as against any Lender;

 

(d)                                 refinancing of Financial Indebtedness under
Unaffected Committed Facilities by Unaffected Credit Facilities (i) with a
final maturity date falling no earlier than (x) the Term Date; or (y) the final
maturity date of the refinanced Facility; and (ii) on terms that do not put or
seek to put the creditor of the refinanced Facility in a preferred position as
against any Lender as provided in Clause 4.7(b);

 

(e)                                  Financial Indebtedness incurred by the
Company under any Facility which is not an Existing Facility which does not or
could not be expected to have a Material Adverse Effect or result in a Default;

 

(f)                                    Financial Indebtedness in respect of
Overdraft Facilities that may fluctuate in accordance with their terms up to
the maximum Exposure under such overdraft facilities as at the Calculation
Point;

 

(g)                                 Financial Indebtedness in respect of any
issue of bonds, notes, debt securities or capital markets instruments, 50% of
the net proceeds of which are applied pursuant to Clause 7.2(c) in mandatory
prepayment and cancellation of the Affected Facilities; or

 

(h)                                 any other Financial Indebtedness incurred
after the date of this Agreement, by a Subsidiary of the Company or a Relevant
Entity, which at any time does not exceed a maximum aggregate amount of
€50,000,000 (or its equivalent in other currencies).

 

9.18                        Shares and dividends

 

(a)                                  The Company shall not:

 

(i)                                     convene a meeting of shareholders to consider
a resolution to make any distribution or pay any dividend, or other payment (in
cash or in kind) in respect of any of its share capital or any management fees
or charges in favour of its shareholders’ or its shareholders’ Affiliates; or

 

 

(ii)                                  reduce, redeem, repurchase or retire any of
its share capital.

 

(b)                                 The Company shall (to the fullest extent
permitted by applicable law):

 

(i)                                     procure that no Material Subsidiary enters
into any arrangement or agreement which may restrict its ability to declare,
make or pay any dividend on or in respect of its share capital (or any class of
its share capital) or restrict its ability to distribute any dividend; and

 

(ii)                                  procure that each Material Subsidiary will to
the extent necessary to ensure that the Company has funds available to it to
service its payment obligations under the Finance Documents and the Facility
Agreements, declare, make and pay in cash dividends in respect of its shares or
reimburse intercompany loans unless doing so will prevent that Material
Subsidiary from being able to meet its payment obligations which are then due and
payable and provided that (A) no more than an aggregate amount equal to €
150,000,000 (or its equivalent in other currencies) shall be distributed by
Rhodia Inc. by way of dividend or reimbursement of intercompany loans on and
after the date of this Agreement with sale proceeds from disposals of its
assets and (B) such reimbursement of intercompany loans shall be made in
priority to any such distribution of dividends.

 

9.19                        Repayments of inter-group
Financial Indebtedness

 

Subject to Clause 4.7(c), no
Obligor shall and the Company shall ensure that no Borrowing Group Member will
prepay or repay any amounts of Financial Indebtedness owed to its shareholders
or any member of the Group except directly or indirectly (including via Rhodia
Finances and Rhodia Financial Services Inc.) to the Company and otherwise to
the extent permitted in the Subordination Agreement.

 

9.20                        No set-off

 

No Obligor shall and the
Company shall ensure that no Borrowing Group Member will exercise any right of
set-off or counterclaim against any person nor agree to or permit any set-off
to occur without the prior written consent of the Majority Lenders except for:

 

(a)                                  any right of set-off or consolidation of
accounts which is (i) contractual or arising as a matter of law; or (ii) pursuant
to legally binding netting arrangements in force on the date of this Agreement
in each case with any person outside the Group; or

 

(b)                                 to the extent expressly permitted by the
Subordination Agreement.

 

9.21                        Rights Issue and Other
Matters

 

(a)                                  The Company shall:

 

(i)                                     launch the Rights Issue by no later than 15th
May, 2004;

 

(ii)                                  initiate and implement the Asset Disposal
Programme (in accordance with the terms of the definition thereof);

 

(iii)                               use its best endeavours to execute the
Refinancing Facilities Agreement on or before 15th January, 2004 and shall in
any event enter into the Refinancing Facilities Agreement by 15th February,
2004;

 

(iv)                              use its best endeavours to execute amendments
to the USPP documents to allow it to implement the Agreed Security Principles
on or before the 15th January, 2004; and

 

(v)                                 use its best endeavours to amend the leases
not inconsistent with the Agreed Lease Amendment Principles prior to entering
into the Refinancing Facilities Agreement and in any event on or before 15th February,
2004.

 

(b)                                 The Company shall notify the Intercreditor
Agent promptly upon becoming aware of:

 

(i)                                     any failure to obtain or maintain any
authorisation, consent or other condition necessary for the disposal of an
asset referred to in the Asset Disposal Programme or the launch and
implementation of the Rights Issue in order to enable the Asset Disposal
Programme and the Rights Issue to be implemented; or

 

(ii)                                  of any decision by it not to implement the
Asset Disposal Programme or the Rights Issue.

 

 

9.22                        Joint Ventures

 

No Obligor will, and the
Company will ensure that no other member of the Group or a Borrowing Group
Member will, enter into or acquire any interest in any new joint venture,
partnership or similar arrangement except where any such interest is held
through an entity incorporated with limited liability and does not result in or
could not reasonably be expected to result in a breach of any other provisions
of any Finance Document.

 

9.23                        Compliance with laws

 

Each Obligor shall and the Company
shall ensure that each Material Subsidiary and each Borrowing Group Member will
comply in all material respects with all applicable laws and regulations of any
governmental authority, whether domestic or foreign, having jurisdiction over
it or any of its assets, where failure to comply with any such laws or
regulations has, or could be expected to have, in each case in the reasonable
opinion of the Majority Lenders, a Material Adverse Effect.

 

9.24                        Compliance with
Environmental Laws and Indemnity

 

(a)                                  Each Obligor shall and the Company shall
ensure that each Material Subsidiary and each Borrowing Group Member will:

 

(i)                                     obtain any and all Environmental Licences
required for the carrying on of its business as currently conducted; and

 

(ii)                                  comply in all material respects with (i) the
terms and conditions of such Environmental Licences and (ii) all other
applicable Environmental Law which in each case, if not complied with, has, or
could be expected to have, in each case in the reasonable opinion of the Majority
Lenders, a Material Adverse Effect or result in any liability for the Finance
Parties in excess of €5,000,000 in aggregate.

 

(b)                                 The Company shall indemnify each Finance
Party and their respective officers, employees, agents and delegates (together
the Indemnified Parties) against
any cost or expense suffered or incurred by them (except if caused by their own
negligence or wilful default) which:

 

(i)                                     arises by virtue of any actual or alleged
breach of any Environmental Law (whether by any Obligor, an Indemnified Party
or any other person); or

 

(ii)                                  arises by virtue of the release or threatened
release of, or exposure to, any Dangerous Substance stored or handled upon,
transported from, or otherwise associated with, the past or present facilities
or operations of any Obligor or Group member.

 

Each Indemnified Party may
rely on this Clause 9.24 and enforce its terms under the Contracts (Rights of
Third Parties) Act 1999.

 

9.25                        Arm’s-length terms

 

No Obligor will, and each
Obligor will ensure that no member of the Group or a Borrowing Group Member
will, enter into any transaction with any person except on ordinary commercial
terms and on the basis of arm’s-length arrangements, or enter into any
transaction whereby any Obligor or member of the Group might pay more than the
ordinary commercial consideration for any purchase or acquisition or might
receive less than full commercial consideration for its services or products.

 

9.26                        Access

 

Upon the occurrence of an
Event of Default which is continuing, each Obligor shall and the Company shall
ensure that each Material Subsidiary and each Borrowing Group Member must allow
any one or more representatives of the Intercreditor Agent and/or accountants
or other professional advisers appointed by the Intercreditor Agent (at the
Company’s risk and expense) to have access during normal business hours to the
assets, books and records of that member of the Group and to inspect the same.

 

9.27                        Security and Subordination

 

The Obligors shall and the
Company shall ensure that each relevant member of the Group will at their own
expense:

 

(a)                                  enter into the Security Sharing Agreement and
the Security Documents with the Finance Parties and other creditors under
Facilities which are to benefit from a Security Document under the Agreed
Security Principles as soon as reasonably practicable and in any event within
15 Business Days following the date on which it is not prevented from doing so
under the terms of the USPP;

 

 

 

(b)                                 enter into the Subordination Agreement as
soon as reasonably practicable and in any event within 45 days of the date of
this Agreement; and

 

(c)                                  execute and do all such assurances, acts and
things as the Intercreditor Agent and the Security Agent may reasonably require
to effect the above including perfecting or protecting the security intended to
be afforded by the Security Documents and shall deliver to the Intercreditor
Agent and the Security Agent at the same time such directors’ and shareholders’
resolutions, title documents and other documents and legal opinions as set out
in Part 2 of Schedule 2 (Conditions precedent) and otherwise as the
Intercreditor Agent and the Security Agent may reasonably require in relation
to the same.

 

9.28                        ERISA Reporting Requirements

 

The following shall be
provided to the Intercreditor Agent:

 

(a)                           (i)                  promptly
and in any event within 10 Business Days after any Obligor or any ERISA
Affiliate knows or has reason to know that any ERISA Event has occurred that is
reasonably expected to have a Material Adverse Effect, a statement of the Chief
Financial Officer of the Obligor describing such ERISA Event and the action, if
any, that such Obligor or such ERISA Affiliate has taken and proposes to take
with respect thereto; and

 

(ii)                                  on the date any records, documents or other
information must be furnished to the PBGC with respect to any Plan pursuant to
Section 4010 of ERISA, a copy of such records, documents and information;

 

(b)                                 promptly and in any event within five
Business Days after receipt thereof by any Obligor or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan;

 

(c)                                  promptly upon request of the Intercreditor
Agent/a Finance Party, copies of each Schedule B (Actuarial Information) to the
most recent annual report (Form 5500 Series) with respect to each Plan; and

 

(d)                                 promptly and in any event within five
Business Days after receipt thereof by any Obligor or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, copies of each notice concerning (i) the
imposition of Withdrawal Liability by any such Multiemployer Plan that is
reasonably expected to have a Material Adverse Effect, (ii) the reorganisation
or termination, within the meaning of Title IV of ERISA, of any such Multiemployer
Plan that is reasonably expected to have a Material Adverse Effect or (iii) the
amount of liability incurred, or that may be incurred, by such Obligor or any
ERISA Affiliate in connection with any event described in Clause (i) or (ii).

 

9.29                        United States laws

 

(a)                                  The Company will not, either by act or
omission, become, or permit any other Obligor, to become, subject to regulation
under PUHCA.

 

(b)                                 The Company will not, either by act or
omission, become, or permit any other Obligor, to become, subject to regulation
under the Federal Power Act.

 

(c)                                  The Company will not, either by act or
omission, become, or permit any other Obligor to become, an investment company
or a company controlled by an investment company.

 

9.30                        Cash pooling / Inter-Company
loan arrangements

 

(a)                                  The Company shall use its best efforts to
maintain its existing cash pooling arrangements as are currently in force at
the date of this Agreement where failure to so maintain has or would be
reasonably likely to have a Material Adverse Effect.

 

(b)                                 The Company will ensure that all Secured
Intra Group Loans and, subject to and in accordance with the Subordination
Agreement, long-term Inter-Company Debt between any member of the Group which
is a creditor of an Obligor is documented in the form of the agreed
Inter-Company Debt loan agreement.

 

(c)                                  The Company will ensure that all
Inter-Company Debts between any member of the Group which is a creditor of the
Company are subject to the Subordination Agreement on or before incurring any such
Inter-Company Debt.

 

 

10.                               FINANCIAL COVENANTS

 

10.1                        Financial covenant
definitions

 

In this Clause 10:

 

Adjusted EBITDAR means, in respect of a particular period, the Company’s EBITDAR
adjusted to reflect the EBITDAR of each Relevant Entity (Relevant Entity EBITDAR), provided that the
amount of such adjustment shall be pro rata
to the Company’s participation in the capital of the Relevant Entity.

 

Consolidated Net Indebtedness means, without double counting, the
aggregate of (A) the Company’s long term debt (including participating loans),
bank overdrafts, current portion of long term debt, (B) guarantees given with
respect to Financial Indebtedness of third parties or joint ventures in which
the Company is involved or the Company’s unconsolidated subsidiaries or
otherwise (C) outstanding amounts with respect to any securitisation programme,
sale of receivables and any outstanding amount under a lease (being defined as
the aggregate of the net present value of (i) lease rentals and (ii) the
residual value or lease balance of such lease) and (D) short term borrowings minus the aggregate of cash, short term
deposits, marketable securities, each as calculated from the items so described
in the English language version of the consolidated accounts of the Company
most recently delivered by the Company to the Intercreditor Agent under Clause
9.2 (Financial information).

 

EBITDA
means, in respect of a particular period, (before restructuring costs and after
cash impact of provisions other than provisions for restructuring) and in
respect of the Company or a Relevant Entity, the aggregate of the Company’s or
the Relevant Entity’s (as the case may be) (as determined from the accounts of
the Relevant Entity most recently delivered by the Company to the Intercreditor
Agent under Clause 9.2(a)(v)) Operating Income, Depreciation and Amortisation
of Assets, where:

 

(a)                                  Operating Income means net sales minus operating expenses
(operating expenses being production costs and expenses, administrative and
selling expenses, research and development expenses, Depreciation and
Amortisation of Assets, additional goodwill amortisation (if any) and provision
for environmental costs);

 

(b)                                 Depreciation and
Amortisation of Assets
means:

 

(i)                                     amortisation of acquisition goodwill and equity
goodwill in net income of affiliated companies;

 

(ii)                                  amortisation of patents, licenses,
trade-marks and software;

 

(iii)                               amortisation of other intangible assets;

 

(iv)                              depreciation of land, buildings and other
tangible assets;

 

(v)                                 additional goodwill amortisation (if any);
and

 

(vi)                              investments allowance.

 

EBITDAR means in respect of a particular period, EBITDA for that period plus
the aggregate amount of any lease rental payments paid or payable in that
period to the extent such payments are taken into account as an operating
expense in the calculation of EBITDA.

 

Net Financial Expenses means, in respect of a particular period,
Interest Expenses minus Interest
Income, where:

 

(a)                                  Interest Expenses means the aggregate of the Company’s
interest on financial debts and financing operations (being interest on loans
payable and bank overdrafts, financial expenses related to securitisations, the
interest element of lease rental payments, discounts of notes receivable and
amortisation of redemption premium) after capitalisation of financial expenses
related to the financing of certain assets and incorporated in the purchase
cost of such assets, excluding
penalties or commissions for loan prepayment, losses on financial instruments
such as interest rate options and interest rate swaps, interest payable on non
financial debts (commercial or other), loans issuing costs whether or not
spread over the duration of the loan, net losses on disposals of marketable
securities, decreases in the probable stock exchange value of trading
securities, losses on repurchase of shares, debentures and other securities
issued by the Company or its Subsidiaries; and

 

 

(b)                                 Interest income means the Company’s interest income on

financial assets (loans receivable, debit balance on bank current accounts,

etc.), excluding income from non

financial receivables, gains on financial instruments such as interest rate

swaps or interest rate options, gains on disposal of marketable securities,

increase in the probable stock exchange value of trading securities, income

from marketable securities, gains on repurchase of shares, debentures or other

securities issued by the Company or its Subsidiaries,

 

each as calculated from the

items so described in the English language version of the consolidated

financial statements of the Company most recently delivered by the Company to

the Intercreditor Agent under Clause 9.2 (Financial information).

 

Ratio Period means each twelve month period ending on the date to which each set of

financial statements delivered by the Company pursuant to Clause 9.2 (Financial

information) was prepared.

 

Testing Date means 31st March, 30th June, 30th September and 31st December of each

year.

 

10.2                        Ratio of Consolidated Net

Indebtedness to Adjusted EBITDAR

 

The Company shall procure

that the ratio of its Consolidated Net Indebtedness to its Adjusted EBITDAR is

not, on each Testing Date in relation to any Ratio Period ending on that

Testing Date, greater than:

 

(a)                                  9.0:1.0 in respect of the Ratio Period ending

on 31st December, 2003; and

 

(b)                                 9.5:1.0 in respect of the Ratio Period ending

on 31st March, 2004.

 

10.3                        Ratio of EBITDAR to Net

Financial Expenses

 

The Company shall procure

that the ratio of its EBITDAR to its Net Financial Expenses is not, at the end

of each Ratio Period, less than:

 

(a)                                  2.0 to 1.0 in respect of the Ratio Period

ending on 31st December, 2003; and

 

(b)                                 1.75 to 1.0 in respect of the Ratio Period

ending on 31st March, 2004.

 

10.4                        Net Debt

 

The Company shall procure

that the Consolidated Net Indebtedness is not on each Testing Date greater

than:

 

(a)                                  €3,850,000,000 on the Testing Date falling on

31st December, 2003; and

 

(b)                                 €4,050,000,000 on the Testing Date falling on

31st March, 2004.

 

10.5                        Calculation and

interpretation

 

(a)                                  All the terms used in Clause 10.1 (Financial

covenant definitions) are to be calculated in accordance with the accounting

principles and practices applied in connection with the Original Financial

Statements, consistently applied.

 

(b)                                 The Company shall promptly notify the

Intercreditor Agent of:

 

(i)                                     each change in the accounting principles and

practices in accordance with which the Company’s consolidated financial

statements are prepared; and

 

(ii)                                  each change in the end of the Company’s

financial year.

 

(c)                                  Following each change of the type referred to

in paragraph (b) above, the Company shall:

 

(i)                                     procure that its chief financial officer or

(if the Intercreditor Agent so requests) its statutory auditors deliver with

the audited financial statements of the Company next delivered under Clause 9.2

(Financial information) (the New Accounts)

a certificate containing a description of the change in the basis on which the

Company’s consolidated financial statements are prepared from that used in the

preparation of the consolidated financial statements of the Company delivered

immediately prior to the change (the Old

Accounts) and information:

 

 

(A)                              sufficient, in the reasonable opinion of the

Majority Lenders, to allow the Finance Parties to make an accurate comparison

of the Company’s financial position as set out in the Old Accounts and that set

out in the New Accounts and any adjustments necessary to ensure that the New

Accounts reflect the format, and/or basis used in the preparation, of the Old

Accounts; and

 

(B)                                sufficient, in the reasonable opinion of the

Intercreditor Agent, to enable the Intercreditor Agent to ascertain the

compliance by the Company with the financial covenants contained in Clauses

10.2 (Ratio of Consolidated Net Indebtedness to Adjusted EBITDAR) and 10.3

(Ratio of EBITDAR to Net Financial Expenses); and

 

(ii)                                  at the request of the Intercreditor Agent

(acting on the instructions of the Majority Lenders), negotiate in good faith

with the Intercreditor Agent with a view to agreeing such amendments to this

Clause 10 as may be necessary to ensure that the Finance Parties’ interests

under this Agreement are not prejudiced by such change.

 

(d)                                 If:

 

(i)                                     the Intercreditor Agent, acting reasonably,

disputes (1) the Company’s statutory auditors’ interpretation of any term in

Clause 10.1 (Financial covenant definitions) or any computation under this

Clause 10, in each case, contained in a certificate delivered by the Company

under Clause 9.2 (Financial information) or (2) any certificate or the contents

thereof delivered by the Company’s statutory auditors; or

 

(ii)                                  if no agreement is reached within 30 days of

a request by the Intercreditor Agent under paragraph (c)(ii) above),

 

the Intercreditor Agent may,

at the expense of the Company, instruct an independent expert (which shall be

an internationally recognised independent qualified firm of auditors) to act as

an expert and not as an arbitrator, and the determination of such expert shall

be final and binding on the Parties and, in the case of an instruction made

pursuant to paragraph (d)(ii) above, this Agreement will be amended to the

extent such expert advises to be necessary to ensure that the Finance Parties’

interests under this Agreement are not prejudiced by the change of the type

referred to in paragraph (b) above.

 

11.                               DEFAULT

 

11.1                           On and from the Commencement Date and (i)

until the Term Date; or (ii) if a Default is outstanding on the Term Date,

until no Default is outstanding, the expression Event of Default as defined in this Agreement shall supplement

all events of default or termination events (howsoever defined or described)

contained in the documentation relating to each Affected Facility as if such

Events of Default were set out therein mutatis

mutandis.

 

11.2                           Each of the events or circumstances set out

in this Clause 11 is an Event of Default (whether or not caused by any reason

whatsoever outside the control of any Obligor or any other person).

 

11.3                        Non-payment

 

An Obligor does not pay on

the due date any amount payable by it under any Finance Document or Facility

Agreement in the manner required under the Finance Documents or Facility

Agreements, unless the non-payment:

 

(a)                                  is caused by technical or administrative

error; and

 

(b)                                 is remedied within three Business Days of the

due date.

 

11.4                        Breach of other obligations

 

(a)       (i)                The

Company does not comply with any term of Clause 10 (Financial covenants) or

Clause 9.21 (Rights Issue and Other Matters); or

 

(ii)                                  at any time the projections set out in the

most recent Business Plan show that the Company will not be in compliance with

any term of Clause 10 (Financial covenants) on the then next Testing Date.

 

(b)                                 An Obligor does not comply with any of its

obligations (other than as referred to in paragraph (a) above) under any

Finance Document or any Facility Agreement not already referred to in paragraph

(a) above unless the non-compliance is capable of remedy and is remedied

within:

 

 

(i)                                     fifteen calendar days of the earlier of the

Intercreditor Agent giving notice and the Obligor becoming aware of the

non-compliance; or

 

(ii)                                  where the non-compliance is in respect of an

Obligor’s obligations under a Facility Agreement, within the applicable grace

period provided in that Facility Agreement.

 

11.5                        Misrepresentation

 

(a)                                  A representation, warranty or statement made

or repeated in or in connection with any Finance Document or Facility

Agreements or in any document delivered by or on behalf of any Obligor under or

in connection with any Finance Document or Facility Agreement is incorrect in

any material respect when made or deemed to be made or repeated.

 

(b)                                 The Majority Lenders determine that a

representation, warranty or statement made or repeated in or in connection with

the Rights Issue or in any document delivered by or on behalf of any Obligor

under or in connection with the Rights Issue is incorrect in any material

respect when made or deemed to be made or repeated.

 

11.6                        Cross-default

 

(a)                                  Any of the following occurs in respect of any

Obligor or a Material Subsidiary:

 

(i)                                     any of its Financial Indebtedness is not paid

when due after the expiry of any applicable grace periods; or

 

(ii)                                  any event of default, termination event,

early repayment event or prepayment event or circumstance howsoever described

occurs under any document relating to its Financial Indebtedness (other than

this Agreement) including, without limitation, under the High Yield Bonds; or

 

(iii)                               any of its Financial Indebtedness is (or

becomes capable of being) declared prematurely due and payable or placed on

demand as a result of an event of default, termination event, early repayment

event or prepayment event (howsoever described) under the document relating to

that Financial Indebtedness including, without limitation, under the High Yield

Bonds; or

 

(iv)                              any commitment for, or underwriting of, any

Financial Indebtedness is cancelled or suspended as a result of an event of

default, termination event, early repayment event or prepayment event

(howsoever described) under the document relating to that Financial

Indebtedness; or

 

(v)                                 any Security Interest securing Financial

Indebtedness over any of its asset(s) becomes enforceable,

 

(b)                                 Provided that there shall only be an Event of

Default under this Clause 11.6, (i) if the aggregate amount of Financial

Indebtedness which is not paid when due or after the expiry of any applicable

grace period and/or to which that event of default, termination event, early

repayment event or prepayment event relates and/or which is (or becomes capable

of being) declared prematurely due and payable or placed on demand in each case

under paragraph (a) above exceeds €15,000,000 (or the equivalent in other

currencies) and (ii) in the case of a prepayment event in respect of Financial

Indebtedness under the High Yield Bonds, where (A) such Financial Indebtedness

has become due and payable or placed on demand; and (B) such prepayment event

does not relate to Excess Proceeds as defined in and paid in accordance with

clause 4.10 of the High Yield Bonds and this Agreement.

 

11.7                        Insolvency

 

Any of the following occurs

in respect of an Obligor or a Material Subsidiary:

 

(a)                                  it is, or is deemed for the purposes of any

law to be, unable to pay its debts as they fall due or insolvent (including

without limitation “en état de cessation des

paiements”);

 

(b)                                 it admits inability to pay its debts as they

fall due;

 

(c)                                  it suspends making payments on all or of its

or any class of its debts or announces an intention to do so;

 

(d)                                 a moratorium is declared in respect of any of

its indebtedness;

 

(e)                                  by reason of financial difficulties, applies

for, or is subject to, an amicable settlement or a “réglement amiable” pursuant to Article L-611-3 of the Code de Commerce of France, or begins

negotiations with one or more of its creditors with a view to the readjustment

or rescheduling of any of its indebtedness; or

 

 

(f)                                    its situation becomes irremediably

compromised or it acts otherwise within the meaning of L-313-12 of the Code Monétaire et Financier.

 

11.8                        Insolvency proceedings

 

Any of the following occurs

in respect of an Obligor or a Material Subsidiary:

 

(a)                                  any step (including petition, proposal or

convening a meeting) is taken with a view to a composition, assignment or

arrangement with any of its creditors;

 

(b)                                 a meeting is convened for the purpose of

considering any resolution for (or to petition for) its winding-up,

administration or dissolution (including without limitation “dissolution, liquidation or redressement judiciaire”)

or any such resolution is passed;

 

(c)                                  any person presents a petition for its

winding-up or administration;

 

(d)                                 an order for its winding-up, administration,

dissolution or bankruptcy is made; or

 

(e)                                  a judgement is issued for the judicial

liquidation (“liquidation judiciaire”)

or the transfer of the whole of its business (“cession

de l’entreprise”); or

 

(f)                                    any other step (including petition, proposal

or convening a meeting) is taken with a view to its rehabilitation,

administration, custodianship, liquidation, winding-up or dissolution or any

other insolvency proceedings involving it.

 

11.9                        Appointment of receivers and

managers

 

Any of the following occurs

in respect of an Obligor or a Material Subsidiary:

 

(a)                                  any liquidator, trustee in bankruptcy,

judicial custodian, compulsory manager, receiver, administrative receiver,

administrator, administrateur judiciaire,

provisoire mandataire ad hoc, conciliateur or mandataire liquidateur or similar officer

is appointed in respect of it or any of its assets;

 

(b)                                 its directors or other officers request the

appointment of a liquidator, trustee in bankruptcy, judicial custodian,

compulsory manager, receiver, administrative receiver, administrator, administrateur judiciaire, provisoire mandataire ad

hoc, conciliateur or mandataire

liquidateur or similar officer; or

 

(c)                                  any other steps are taken to enforce any

Security Interest over any part of its assets.

 

11.10                 United States Bankruptcy

Laws

 

(a)                                  In this Subclause:

 

U.S. Bankruptcy Law means the United States Bankruptcy Code 1978 or any other United

States Federal or State bankruptcy, insolvency or similar law.

 

U.S. Obligor means an Obligor incorporated or organised under the laws of the

United States of America or any state of the United States of America

(including the District of Columbia).

 

Terms used in this Subclause

have the meanings given to them in the United States Bankruptcy Code 1978, as

amended, and applicable fraudulent conveyance laws in the United States of

America.

 

(b)                                 Any of the following occurs in respect of a

U.S. Obligor (other than Primester in the case of paragraphs (iv) or (v) below)

(on a consolidated basis):

 

(i)                                     it makes a general assignment for the benefit

of creditors;

 

(ii)                                  it commences a voluntary case or proceeding

under any U.S. Bankruptcy Law; or

 

 

(iii)                               an involuntary case under any U.S. Bankruptcy

Law is commenced against it and is not controverted within 21 days or is not

dismissed or stayed within 45 days after commencement of the case; or

 

(iv)                              the aggregate amount of its debts (including

its obligations (if any) under the Finance Documents and the Facility

Agreements) is greater than the aggregate value (being the lesser of fair present

valuation and present fair saleable value) of its assets (which for, avoidance

of doubt, include, without limitation, all rights of indemnification,

contribution and subrogation); or

 

(v)                                 its capital is unreasonably small to carry on

its business as it is being conducted; or

 

(vi)                              it incurs debts beyond its ability to pay as

they mature on the date on which the debts were incurred; or

 

(vii)                           it has made a transfer or incurred an

obligation under a Finance Document or a Facility Agreement with the intent to

hinder, delay or defraud any of its present or future creditors.

 

11.11                 Creditors’ process

 

Any attachment,

sequestration, distress execution or analogous event or circumstance affects

any material asset(s) of an Obligor or a Material Subsidiary and which in the

reasonable opinion of the Majority Lenders has or could be expected to have a

Material Adverse Effect.

 

11.12                 Analogous proceedings

 

There occurs, in relation to

an Obligor or a Material Subsidiary, any event or circumstance anywhere which,

in the opinion of the relevant Lender or the Majority Lenders (acting in good

faith), appears to correspond with any of those mentioned in Clauses 11.7

(Insolvency) to 11.11 (Creditors’ process) (inclusive).

 

11.13                 Cessation of business

 

Any Obligor or a Material

Subsidiary ceases, or threatens to cease, to carry on all or a substantial part

of its business except in respect of the Asset Disposal Programme.

 

11.14                 Effectiveness of Finance

Documents and Facility Agreements

 

(a)                                  It is or becomes unlawful for an Obligor or

any other person (other than a Finance Party) to perform any of its obligations

under the Finance Documents or the Facility Agreements.

 

(b)                                 Any Finance Document or Facility Agreement is

not effective or is alleged by an Obligor to be ineffective for any reason.

 

(c)                                  An Obligor repudiates a Finance Document or

Facility Agreement or evidences an intention to repudiate a Transaction

Document.

 

(d)                                 A Security Document does not create the

security it purports to create in any respect considered by the Majority

Lenders to be materially adverse to the interests of the Finance Parties under

the Finance Documents or the Facility Agreements.

 

(e)                                  A guarantee of any Obligor is invalid or

unenforceable in any respect considered by the Majority Lenders to be

materially adverse to the interests of the Finance Parties under the Finance

Documents or the Facility Agreements.

 

(f)                                    The subordination provisions under the

Subordination Agreement or the ranking of security under the Security Documents

is not effective.

 

(g)                                 The Rights Issue is not completed by the Term

Date or the Company repudiates, declares or states in writing that it cannot or

does not intend to, or it becomes unlawful for the Company to, complete the

Rights Issue by the Term Date.

 

(h)                                 The Asset Disposal Programme is not initiated

or implemented in accordance with the terms of the definition thereof or the

Company repudiates, declares or states in writing that it cannot or does not

intend to, or it becomes unlawful for the Company to, initiate or implement the

Asset Disposal Programme in accordance with the terms of the definition

thereof.

 

 

11.15                 Audit qualification

 

An Obligor’s auditors

qualify their report on any audited consolidated accounts of the relevant

Obligor in any manner whatsoever (except where such qualification is of a minor

technical or non-material nature) and (except in the case of the Company) where

that qualification is material in the context of the Group (taken as a whole).

 

11.16                 Shares and Dividends

 

A meeting of shareholders of

the Company is convened at which a resolution is passed to pay any dividend, or

other distribution (in cash or in kind) in respect of its share capital or any

management fees or charges in favour of its shareholders or its shareholders’

Affiliates.

 

11.17                 ERISA

 

(a)                                  Any Plan fails to satisfy the minimum funding

standards of ERISA or the Code for any plan year or part thereof or a waiver of

such standards or extension of any amortisation period is sought or granted

under section 412 of the Code; or

 

(b)                                 a notice of intent to terminate any Plan is,

or is reasonably expected to be, filed with the PBGC or the PBGC institutes

proceedings under ERISA section 4042 to terminate or appoint a trustee to

administer any Plan or the PBGC notifies the Company or any ERISA Affiliate

that a Plan may become a subject of any such proceedings; or

 

(c)                                  the aggregate accumulated benefit obligations

(as defined in Statement of Financial Accounting Standards 87) under all Plans

exceeds the fair market value of all assets of such Plans allocable to such

benefits by more than US$50,000,000, all determined as of the date of the most

recent financial statements for such Plans; or

 

(d)                                 the Company or any ERISA Affiliate incurs or

is reasonably expected to incur any liability pursuant to Title I or IV of

ERISA or the penalty or excise tax provisions of the Code relating to employee

benefit plans; or

 

(e)                                  the Company or any ERISA Affiliate withdraws

from any Multiemployer Plan; or

 

(f)                                    any member of the Group establishes or amends

any employee welfare benefit plan that provides post-employment welfare

benefits in a manner that would increase the liability of any member of the

Group thereunder,

 

and such events (whether

individually or taken together) could reasonably be expected to have a Material

Adverse Effect.

 

11.18                 Litigation

 

Any litigation, arbitration

or administrative proceeding or claim is threatened, pending, commenced or

ongoing against any Obligor, any Material Subsidiary or any of the assets of

the Group which in the opinion of the Majority Lenders has or could reasonably

be expected to have by itself or together with any other such proceedings or

claims to have a Material Adverse Effect.

 

11.19                 Material adverse change

 

Any event or circumstance

occurs after the date of this Agreement, which, in the opinion of the Majority

Lenders (acting in good faith) has, or could reasonably be expected to have, a

Material Adverse Effect.

 

11.20                 Enforcement Action

 

(a)                                  On and at any time after the occurrence of an

Event of Default and whilst the same is outstanding:

 

(i)                                     a Lender may, upon the occurrence of an Event

of Default under Clause 11.3 (Non-payment) or under Clauses 11.7 (Insolvency)

through to 11.12 (Analogous proceedings) (inclusive) or under Clause 11.14

(Effectiveness of Finance Documents);

 

(ii)                                  a Lender to Rhodia Inc. may upon the

occurrence of an Event of Default occurring under Clause 11.6 (Cross-default)

with respect to the USPP and any enforcement action having been taken with

respect to the guarantee of the USPP by Rhodia Inc.;

 

(iii)                               a Lender to Rhodia Inc. may upon the

occurrence of an Event of Default occurring under Clause 11.6 (Cross-default)

as a result of any Financial Indebtedness of the Company and/or Rhodia Holdings

Inc. and/or Rhodia Inc. exceeding €30,000,000 (or its equivalent in other

currencies) becoming due and payable before its stated maturity by way of a

declared default under the document relating to that Financial Indebtedness

after expiry of any applicable grace period;

 

 

and

 

(iv)                              a Lender to Rhodia Inc. may if Rhodia Inc.

makes a payment or distribution on or after the date of this Agreement to the

Company with sale proceeds from disposals of its assets in an aggregate amount

exceeding €150,000,000 (or its equivalent in other currencies),

 

exercise any and all rights

and remedies (including without limitation subject to the Security Sharing

Agreement, taking any Enforcement Action) as it has under or in connection with

any Affected Facility subject to and in accordance with its terms.

 

(b)                                 On and at any time after notification by the

Intercreditor Agent of a Declared Default (which Intercreditor Agent shall

notify to all Parties if so instructed by the Majority Lenders) and whilst the

same is outstanding a Lender may:

 

(i)                                     exercise any and all rights and remedies

(including without limitation, subject to the Security Sharing Agreement, take

any Enforcement Action) as it has under or in connection with any Affected

Facility or otherwise; and/or

 

(ii)                                  take or instruct the Security Agent or

Intercreditor Agent to take such Enforcement Action as is permitted by and in

accordance with the Security Sharing Agreement and the other Finance Documents.

 

(c)                                  A Lender shall notify the Intercreditor Agent

before exercising the rights referred to in paragraphs (a) and (b) above.

 

(d)                                 The provisions of this Clause 11.20

(Enforcement Action) shall continue in full force and effect and shall survive

the termination of this Agreement with respect to any outstanding Default or

Declared Default notwithstanding the expiry of the Secured Intercreditor

Period.

 

12.                               THE ADMINISTRATIVE PARTIES

 

12.1                        Appointment and duties of

the Intercreditor Agent

 

(a)                                  Each Finance Party (other than the

Intercreditor Agent) irrevocably appoints the Intercreditor Agent to act as its

agent under the Finance Documents.

 

(b)                                 Each Finance Party (other than the

Intercreditor Agent) irrevocably authorises the Intercreditor Agent to:

 

(i)                                     perform the duties and to exercise the

rights, powers and discretions that are specifically given to it under the

Finance Documents, together with any other incidental rights, powers and

discretions; and

 

(ii)                                  execute each Finance Document in an agreed

form expressed to be executed by the Intercreditor Agent.

 

(c)                                  The Intercreditor Agent has only those duties

which are expressly specified in this Agreement. Those duties are solely of a

mechanical and administrative nature.

 

12.2                        The Members

 

Except as specifically

provided in the Finance Documents, no Member has any obligations of any kind to

any other Party in connection with any Finance Document.

 

12.3                        No fiduciary duties

 

Nothing in the Finance

Documents makes the Intercreditor Agent a trustee or fiduciary for any other

Party or any other person. The Intercreditor Agent need not hold in trust any

moneys paid to it for a Party or be liable to account for interest on those

moneys.

 

12.4                        Individual position of the

Intercreditor Agent

 

(a)                                  If it is also a Lender, the Intercreditor

Agent has the same rights and powers under the Finance Documents as any other

Lender and may exercise those rights and powers as though it were not an agent.

 

(b)                                 The Intercreditor Agent may:

 

(i)                                     carry on any business with any Obligor or its

related entities (including acting as an agent or a trustee for any other

financing); and

 

(ii)                                  retain any profits or remuneration it

receives under the Finance Documents or in relation to any other business it

carries on with any Obligor or its related entities.

 

 

12.5                        Reliance

 

The Intercreditor Agent may:

 

(a)                                  rely on any notice or document believed by it

to be genuine and correct and to have been signed by, or with the authority of,

the proper person;

 

(b)                                 rely on any statement made by any person

regarding any matters which may reasonably be assumed to be within his

knowledge or within his power to verify;

 

(c)                                  engage, pay for and rely on professional

advisers selected by it (including those representing a Party other than the

Intercreditor Agent); and

 

(d)                                 act under the Finance Documents through its

personnel and agents.

 

12.6                        Majority Lenders’

instructions

 

(a)                                  The Intercreditor Agent is fully protected if

it acts on the instructions of the Majority Lenders or where expressly required

by the terms of the Finance Documents, the Lenders in the exercise of any

right, power or discretion or any matter not expressly provided for in the

Finance Documents. Any such instructions given by the Majority Lenders or the

Lenders as the case may be will be binding on all the Lenders. In the absence

of instructions, the Intercreditor Agent may act as it considers to be in the

best interests of all the Lenders.

 

(b)                                 The Intercreditor Agent is not authorised to

act on behalf of a Lender (without first obtaining that Lender’s consent) in

any legal or arbitration proceedings in connection with any Finance Document.

 

(c)                                  The Intercreditor Agent may require the

receipt of security satisfactory to it, whether by way of payment in advance or

otherwise, against any liability or loss which it may incur in complying with

the instructions of the Majority Lenders.

 

12.7                        Responsibility

 

(a)                                  The Intercreditor Agent is not responsible to

any other Finance Party for the adequacy, accuracy or completeness of:

 

(i)                                     any Finance Document or any other document;

or

 

(ii)                                  any statement or information (whether written

or oral) made in or supplied in connection with any Finance Document.

 

(b)                                 Without affecting the responsibility of any

Obligor for information supplied by it or on its behalf in connection with any

Finance Document, each Lender confirms that it:

 

(i)                                     has made, and will continue to make, its own

independent appraisal of all risks arising under or in connection with the

Finance Documents (including the financial condition and affairs of each

Obligor and its related entities and the nature and extent of any recourse

against any Party or its assets); and

 

(ii)                                  has not relied exclusively on any information

provided to it by the Intercreditor Agent in connection with any Finance

Document.

 

12.8                        Exclusion of liability

 

(a)                                  The Intercreditor Agent is not liable to any

other Finance Party for any action taken or not taken by it in connection with

any Finance Document, unless directly caused by its negligence or wilful

misconduct.

 

(b)                                 No Party may take any proceedings against any

officer, employee or agent of the Intercreditor Agent in respect of any claim

it might have against the Intercreditor Agent or in respect of any act or

omission of any kind by that officer, employee or agent in connection with any

Finance Document. Any officer, employee or agent of the Intercreditor Agent may

rely on this Subclause.

 

 

12.9                        Default

 

(a)                                  The Intercreditor Agent is not obliged to

monitor or enquire whether a Default has occurred. The Intercreditor Agent is

not deemed to have knowledge of the occurrence of a Default.

 

(b)                                 If the Intercreditor Agent:

 

(i)                                     receives notice from a Party referring to

this Agreement, describing a Default and stating that the event is a Default;

or

 

(ii)                                  is aware of the non-payment of any principal

or interest or any fee payable to a Lender under this Agreement,

 

it must promptly notify the

Lenders.

 

12.10                 Information

 

(a)                                  The Intercreditor Agent must promptly forward

to the person concerned the original or a copy of any document which is

delivered to the Intercreditor Agent by a Party for that person.

 

(b)                                 Except where a Finance Document specifically

provides otherwise, the Intercreditor Agent is not obliged to review or check

the adequacy, accuracy or completeness of any document it forwards to another

Party.

 

(c)                                  Except as provided above, the Intercreditor

Agent has no duty:

 

(i)                                     either initially or on a continuing basis to

provide any Lender with any credit or other information concerning the risks

arising under or in connection with the Finance Documents (including any

information relating to the financial condition or affairs of any Obligor or

its related entities or the nature or extent of recourse against any Party or

its assets) whether coming into its possession before, on or after the date of

this Agreement; or

 

(ii)                                  unless specifically requested to do so by a

Lender in accordance with a Finance Document, to request any certificate or

other document from any Obligor.

 

(d)                                 In acting as the Intercreditor Agent, its

agency division is treated as a separate entity from its other divisions and

departments. Any information acquired by it which, in its opinion, is acquired

by it otherwise than in its capacity as the Intercreditor Agent may be treated

as confidential by the Intercreditor Agent and will not be treated as

information possessed by the Intercreditor Agent in its capacity as such.

 

(e)                                  Each Obligor irrevocably authorises the

Intercreditor Agent to disclose to the other Finance Parties any information

which, in its opinion (acting reasonably), is received by it in its capacity as

the Intercreditor Agent.

 

12.11                 Indemnities

 

(a)                                  Without limiting the liability of any Obligor

under the Finance Documents, each Lender must indemnify the Intercreditor Agent

for that share of any loss or liability incurred by it in acting as the

Intercreditor Agent, except to the extent that the loss or liability is caused

by its gross negligence or wilful misconduct. A Lender’s share of any loss or

liability is the proportion which the Exposure of the Lender bears to the

aggregate of the Exposures of all the Lenders.

 

(b)                                 The Intercreditor Agent may deduct from any

amount received by it for a Lender any amount due to the Intercreditor Agent

from that Lender under a Finance Document but unpaid.

 

12.12                 Compliance

 

The Intercreditor Agent may

refrain from doing anything (including the disclosure of any information) which

might, in its opinion, constitute a breach of any law or regulation or be otherwise

actionable at the suit of any person, and may do anything which, in its

opinion, is necessary or desirable to comply with any law or regulation.

 

12.13                 Resignation of the

Intercreditor Agent

 

(a)                                  The Intercreditor Agent may resign and

appoint any of its Affiliates as successor Intercreditor Agent by giving notice

to the Lenders and the Company.

 

 

(b)                                 Alternatively, the Intercreditor Agent may

resign by giving notice to the Lenders and the Company, in which case the

Majority Lenders (after prior consultation with the Company) may appoint a

successor Intercreditor Agent.

 

(c)                                  If no successor Intercreditor Agent has been

appointed under paragraph (b) above within 30 days after notice of resignation

was given, the Intercreditor Agent (after prior consultation with the Company)

may appoint a successor Intercreditor Agent.

 

(d)                                 The person(s) appointing a successor

Intercreditor Agent must, if practicable, consult with the Company prior to the

appointment.

 

(e)                                  The resignation of the Intercreditor Agent

and the appointment of any successor Intercreditor Agent will both become

effective only when the successor Intercreditor Agent notifies all the Parties

that it accepts its appointment. On giving the notification, the successor

Intercreditor Agent will succeed to the position of the retiring Intercreditor

Agent and Intercreditor Agent will

mean the successor Intercreditor Agent.

 

(f)                                    The retiring Intercreditor Agent must, at its

own cost, make available to the successor Intercreditor Agent such documents and

records and provide such assistance as the successor Intercreditor Agent may

reasonably request for the purposes of performing its functions as the

Intercreditor Agent under the Finance Documents.

 

(g)                                 Upon its resignation becoming effective, this

Clause will continue to benefit a retiring Intercreditor Agent in respect of

any action taken or not taken by it in connection with the Finance Documents

while it was the Intercreditor Agent, and, subject to paragraph (f) above, it

will have no further obligations under any Finance Document.

 

(h)                                 The Majority Lenders may, by notice to the

Intercreditor Agent, require it to resign under paragraph (b) above.

 

12.14                 Relationship with Lenders

 

(a)                                  The Intercreditor Agent may treat each Lender

as a Lender, entitled to payments under this Agreement and as acting through

its Facility Office(s) until it has received not less than five Business Days’

prior notice from that Lender to the contrary.

 

(b)                                 The Intercreditor Agent may at any time, and

must if requested to do so by the Majority Lenders, convene a meeting of the

Lenders.

 

12.15                 Intercreditor Agent’s

management time

 

If the Intercreditor Agent

requires, any amount payable to the Intercreditor Agent by any Party under any

indemnity or in respect of any costs or expenses incurred by the Intercreditor

Agent under the Finance Documents after the date of this Agreement may include

the cost of using its management time or other resources and will be calculated

on the basis of such reasonable daily or hourly rates as the Intercreditor

Agent may notify to the relevant Party. This is in addition to any amount in

respect of fees or expenses paid or payable to the Intercreditor Agent under

any other term of the Finance Documents.

 

13.                               EXPENSES

 

13.1                        Initial and special costs

 

The Company shall forthwith

on demand pay the amount of all costs and expenses (including legal fees)

properly incurred by any Lender and the Intercreditor Agent in connection with:

 

(a)                                  the negotiation, preparation, printing and

execution of:

 

(i)                                     this Agreement and any other documents

referred to in this Agreement; and

 

(ii)                                  any other Finance Document (other than an

Accession Agreement) executed after the date of this Agreement; and

 

(b)                                 any amendment, waiver, consent or suspension

of rights (or any proposal for any of the foregoing) requested by or on behalf

of an Obligor and relating to a Finance Document or a document referred to in

any Finance Document.

 

13.2                        Enforcement costs

 

The Company shall forthwith

on demand pay to each Finance Party the amount of all costs and expenses

(including legal fees) incurred in connection with the enforcement of, or the

preservation of any rights under, any Finance Document.

 

 

14.                               CHANGES TO THE PARTIES

 

14.1                        Transfer by Obligors

 

No Obligor may assign,

transfer or novate or dispose of any of, or any interest in, any of its rights

and/or obligations under the Finance Documents.

 

14.2                        Accession by Additional

Obligors

 

(a)                                  The Company must ensure that each Borrowing

Group Member (other than an Original Obligor) which is a party to an Affected

Facility becomes an Additional Obligor in the manner required by this Clause

14.2 as soon as reasonably practicable and in any event not later than 31st

January, 2004.

 

(b)                                 The relevant Borrowing Group Member will

become an Additional Obligor and be bound by all the obligations under the

Finance Documents as if it had been originally party to those documents as an

Obligor when the Intercreditor Agent notifies the other Finance Parties and the

Company that it has received all of the documents and evidence listed in Part 3

of Schedule 2 (Additional Obligor conditions precedent documents) in form and

substance satisfactory to it. The Intercreditor Agent must give this

notification as soon as reasonably practicable.

 

(c)                                  Delivery of an Accession Agreement, executed

by the relevant Borrowing Group Member and the Company, to the Facility Agent

constitutes confirmation by that Subsidiary and the Company that the

representations set out in Clause 8 which are to be repeated and under Clauses

8.19, 8.20 and 8.23 as if repeated are then correct.

 

(d)                                 Paragraph (a) does not apply to Primester for

as long as it has no loan outstanding under the Primester Facility.

 

14.3                        Transfers by Lenders

 

(a)                                  No Lender may assign, transfer or novate any

of its rights and/or obligations under any of the Finance Documents unless and

until the assignee or transferee has delivered a duly executed Accession

Agreement to the Intercreditor Agent.

 

(b)                                 Notwithstanding paragraph (a) above, no

Lender which is or is to become a party to the Refinancing Facilities Agreement

may assign, transfer or novate any of its rights and/or obligations under any

of the Finance Documents (except to an Affiliate which has delivered an

Accession Agreement pursuant to paragraph (a)) unless and until the Refinancing

Facilities Agreement has been executed by all parties thereto.

 

14.4                        Accession by Lenders

 

(a)                                  During the Secured Intercreditor Period, upon

the delivery to the Intercreditor Agent of a duly executed Accession Agreement

the bank or financial institution which is party to that Accession Agreement

will become a party to:

 

(i)                                     this Agreement; and, to the extent entered

into at that time,

 

(ii)                                  the Security Sharing Agreement;

 

(iii)                               the Subordination Agreement; and

 

(together the Agreements) as a Lender; or

 

(b)                                 Any person becoming a party to the Agreements

under paragraph (a) shall be entitled to the benefit of all the provisions and

bound by all of the obligations in the Agreements with effect from the date of

accession as if it had been an original party to those Agreements.

 

14.5                        Register

 

The Intercreditor Agent

shall keep a register of all the Parties and shall supply any other Party (at

that Party’s expense) with a copy of the register on request.

 

 

15.                               AMENDMENTS AND WAIVERS

 

15.1                        Procedure

 

(a)                                  Except as provided in this Clause, any term

of a Finance Document may be amended or waived with the agreement of the

Company, the Intercreditor Agent and the Majority Lenders. The Intercreditor

Agent may effect, on behalf of any Finance Party, an amendment or waiver

permitted under this Clause.

 

(b)                                 The Intercreditor Agent shall promptly notify

the other Parties of any amendment or waiver effected under paragraph (a), and

any such amendment or waiver shall be binding on all the Parties.

 

15.2                        Exceptions

 

(a)                                  An amendment or waiver not agreed by a

Finance Party which:

 

(i)                                     relates to the definition of Insolvency Event, Majority Lenders, Finance Documents, Transaction Documents, Exposure, Enforcement Action

or Term Date (other than as

expressly provided in the definition thereof) in Clause 1.1 (Definitions);

 

(ii)                                  an extension of the date of payment of any

amount to a Lender payable under the Finance Documents;

 

(iii)                               relates to a reduction in the amount of any

payment of fees or other amount payable to a Lender under the Finance Documents

or Facility Agreement to which that Party is a party;

 

(iv)                              relates to Clause 3 (Secured Intercreditor

Period), Clause 4.1 (Affected Facilities), Clause 7 (Mandatory prepayment and

cancellation), Clause 11.3 (Non-payment), Clause 11.7 (Insolvency) through to

11.12 (Analogous proceedings) (inclusive), Clause 11.14 (Effectiveness of

Finance Documents) or Clause 11.20(a) (Enforcement Action);

 

(v)                                 relates to Clause 14.1 (Transfer by Obligors)

and Clause 14.3 (Transfers by Lenders);

 

(vi)                              relates to Clause 4.11 (Amendments to

Affected Facilities);

 

(vii)                           relates to a guarantee under this Agreement

or a Security Document in favour of that Finance Party or any of the Agreed

Security Principles;

 

(viii)                        relates to this Clause 15 (Amendments and

waivers); or

 

(ix)                                relates to a term or satisfaction of a

condition of a Finance Document which expressly requires the consent or

determination of that Party,

 

is not binding on that

Party.

 

(b)                                 An amendment or waiver which affects the

rights and/or obligations of the Intercreditor Agent, or the rights of the

Co-ordinating Committee in respect of Clauses 12.2 (The Members) and 19

(Co-ordinating Committee) may not be effected without respectively the prior

written consent of the Intercreditor Agent or the Co-ordinating Committee as

applicable.

 

15.3                        Waivers and remedies

cumulative

 

The rights of each Finance

Party under this Agreement:

 

(a)                                  may be exercised as often as necessary;

 

(b)                                 are cumulative and not exclusive of its

rights under the general law; and

 

(c)                                  may be waived only in writing and

specifically.

 

Delay in exercising or

non-exercise of any such right is not a waiver of that right.

 

 

16.                               CONFIDENTIALITY

 

(a)                                  Each Finance Party must keep confidential the

terms of the Finance Documents and any information supplied to it by or on

behalf of any Obligor in connection with the Finance Documents. However, a

Finance Party is entitled to disclose information:

 

(i)                                     which is publicly available, other than as a

result of a breach by that Finance Party of this Clause;

 

(ii)                                  in connection with any legal, regulatory or

arbitration proceedings;

 

(iii)                               if required to do so under any law or

regulation;

 

(iv)                              to a government, banking, taxation or other

regulatory authority;

 

(v)                                 to its officers, directors, employees and

professional advisers;

 

(vi)                              to the extent allowed under paragraph (b)

below; or

 

(vii)                           with the agreement of the relevant Obligor.

 

The provisions of this

paragraph supersede and override any other confidentiality agreement or

undertaking signed between any Finance Party and any member of the Group in

respect of any information supplied pursuant to the Finance Documents except

information expressly provided to the Finance Parties prior to the date of this

Agreement subject to that other confidentiality agreement or undertaking.

 

(b)                                 A Finance Party may disclose to an Affiliate

or any person with whom it may enter, or has entered into, any kind of

transfer, participation or other agreement in relation to this Agreement (a participant):

 

(i)                                     a copy of this Agreement and any other

Finance Document to which it is a party; and

 

(ii)                                  any information which that Finance Party has

acquired under or in connection with any Finance Document.

 

However, before a

participant may receive any confidential information, it must agree with the

relevant Finance Party to keep that information confidential on the terms of

paragraph (a) above.

 

17.                               STAMP

DUTIES

 

The Company shall pay, and

forthwith on demand indemnify each Finance Party against any liability it

incurs in respect of, any stamp, registration and similar tax which is or

becomes payable in connection with the entry into, performance or enforcement

of any Finance Document.

 

18.                               INDEMNITIES

 

18.1                        Currency indemnity

 

(a)                                  Each Obligor must, as an independent

obligation, indemnify each Finance Party against any loss or liability

(including any exchange costs and taxes) which that Finance Party incurs as a

consequence of:

 

(i)                                     that Finance Party receiving an amount in

respect of an Obligor’s liability under the Finance Documents; or

 

(ii)                                  that liability being converted into a claim,

proof, judgement or order,

 

in a currency other than the

currency in which the amount is expressed to be payable under the relevant

Finance Document.

 

(b)                                 Unless otherwise required by law, each

Obligor waives any right it may have in any jurisdiction to pay any amount

under the Finance Documents in a currency other than that in which it is

expressed to be payable.

 

18.2                        Other indemnities

 

(a)                                  The Company must indemnify each Finance Party

against any loss or liability which that Finance Party incurs as a consequence

of:

 

(i)                                     the occurrence of any Default;

 

 

(ii)                                  any failure by an Obligor to pay any amount

due under a Finance Document on its due date, including any resulting from any

distribution or redistribution of any amount among the Lenders under this

Agreement or under the Subordination Agreement.

 

(b)                                 The Company must indemnify the Intercreditor

Agent against any loss or liability incurred by the Intercreditor Agent as a

result of:

 

(i)                                     investigating any event which the

Intercreditor Agent reasonably believes to be a Default; or

 

(ii)                                  acting or relying on any notice which the

Intercreditor Agent reasonably believes to be genuine, correct and

appropriately authorised.

 

19.                               CO-ORDINATING COMMITTEE

 

(a)                                  It is acknowledged by each Lender and by each

Borrowing Group Member that:

 

(i)                                     each Member will be entitled to receive and

retain for its own use and benefit from Borrowing Group Members the fees in

respect of the performance of its respective role as such which have been

agreed prior to the date upon which this Agreement becomes effective;

 

(ii)                                  in connection with this Agreement and the

matters the subject hereof or referred to herein no Lender has relied upon

information or advice provided by any Member and to the extent it has any

relationship with that party in its capacity as a Member, none of the Members

shall be liable to any signatory for any action taken or omitted to be taken or

for the exercise of any discretion by it in connection with any matter

contemplated hereby and shall not be responsible for the efficiency, validity,

enforceability or sufficiency of this Agreement or any matter the subject

hereof or referred to in this Agreement; and

 

(iii)                               the Borrowing Group Members shall be jointly

and severally liable to reimburse each Member for all out-of-pocket expenses

(including the fees of professional advisers appointed to advise the

Co-ordinating Committee) together with value added tax thereon, if any, incurred

by it in connection with the performance of its role as such.

 

(b)                                 The provisions of Clause 12.2 (The Members)

and this Clause 19 shall survive termination of this Agreement and each Member

may rely upon and enforce Clauses 12.2 (The Members), Clause 15.2(b) and this

Clause under the Contracts (Rights of Third Parties Act) 1999.

 

20.                               SEVERABILITY

 

If a provision of any

Finance Document is or becomes illegal, invalid or unenforceable in any

jurisdiction, that shall not affect:

 

(a)                                  the legality, validity or enforceability in

that jurisdiction of any other provision of the Finance Documents; or

 

(b)                                 the legality, validity or enforceability in

other jurisdictions of that or any other provision of the Finance Documents.

 

21.                               COUNTERPARTS

 

Each Finance Document may be

executed in any number of counterparts, and this has the same effect as if the

signatures on the counterparts were on a single copy of the Finance Document.

 

22.                               NOTICES

 

22.1                        Giving of Notices

 

(a)                                  All notices or other communications under or

in connection with the Finance Documents shall be given in writing and, unless

otherwise stated, may be given in person, by post, facsimile or e-mail. Any

such notice will be deemed to be given as follows:

 

(i)                                     if delivered in person, at the time of

delivery;

 

(ii)                                  if posted, five days after being deposited in

the post, postage prepaid, in a correctly addressed envelope;

 

(iii)                               if by facsimile, when received in legible

form; and

 

 

(iv)                              if by e-mail or any other electronic

communication, when received in legible form.

 

However, a notice given in

accordance with the above but received on a non-working day or after business

hours in the place of receipt will only be deemed to be given on the next

working day in that place.

 

(b)                                 For the purposes of the Finance Documents, an

electronic communication will be treated as being in writing.

 

(c)                                  Unless it is agreed to the contrary, any

consent or agreement required under a Finance Document must be given in

writing.

 

22.2                        Addresses for Notices

 

(a)                                  The address, facsimile number and e-mail

address of each Party (other than the Company and Intercreditor Agent) for all

notices under or in connection with the Finance Documents are those most

recently notified in writing by that Party for this purpose to the

Intercreditor Agent.

 

(b)                                 The contact details of the Company for this

purpose are:

 

Rhodia

26 quai Alphonse le Gallo

92100 Boulogne Billancourt Cedex

 

Facsimile number: +33 (1) 55

38 44 71 / 21

 

Attention: Chief Financial

Officer and General Counsel

 

(c)                                  The contact details of the Intercreditor

Agent for this purpose are:

 

BNP Paribas

European Agency/Middle Office Group

37, Place du Marché St. Honoré

75031 Paris Cedex 01

 

Facsimile number: + 33 (1)

42 98 43 17

 

Attention: Raymond

Banzon/Isabelle Blandin/Catherine Staneso

 

(d)                                 The Intercreditor Agent shall, promptly upon

request from any Party, give to that Party the address, facsimile number or

e-mail address of any other Party applicable at the time for the purposes of

this Clause.

 

22.3                        Obligors

 

(a)                                  All communications under the Finance

Documents to or from an Obligor must be sent through the Intercreditor Agent.

 

(b)                                 All communications under the Finance

Documents to or from an Obligor (other than the Company) must be sent through

the Company.

 

(c)                                  Each Obligor (other than the Company)

irrevocably appoints the Company to act as its agent:

 

(i)                                     to give and receive all communications under

the Finance Documents; and

 

(ii)                                  to sign all documents under or in connection

with the Finance Documents.

 

(d)                                 Any communication given to the Company in

connection with a Finance Document will be deemed to have been given also to

the other Obligors.

 

(e)                                  The Intercreditor Agent may assume that any

communication made by the Company is made with the consent of each other

Obligor.

 

 

23.                               LANGUAGE

 

(a)                                  Any notice given under or in connection with

any Finance Document shall be in English.

 

(b)                                 Any Existing Facility if not in English shall

if requested by the Intercreditor Agent (acting in good faith) be accompanied

by a certified English translation and, for the purposes of this Agreement

only, the English translation shall prevail unless the document is a statutory

or other official document.

 

(c)                                  All other documents provided under or in

connection with any Finance Document shall be:

 

(i)                                     in English; or

 

(ii)                                  if not in English, accompanied by a certified

English translation and, in this case, the English translation shall prevail

unless the document is a statutory or other official document.

 

24.                               JURISDICTION

 

24.1                        Submission

 

For

the benefit of each Finance Party, each Obligor agrees that:

 

(a)                                  the courts of England have exclusive

jurisdiction to settle any disputes in connection with the Finance Documents

and the English Courts are the most appropriate and convenient courts to settle

any such disputes.

 

(b)                                 Without prejudice to paragraph (a) above and

for the benefit of each Finance Party, each Obligor agrees that any New York

State Court or Federal Court sitting in New York has jurisdiction to settle any

disputes in connection with this Agreement and accordingly submits to the

jurisdiction of those courts.

 

24.2                        Service of process

 

Without

prejudice to any other mode of service, each Obligor not incorporated in

England and Wales:

 

(a)                                  irrevocably appoints Rhodia Limited as its

agent for service of process in relation to any proceedings before the English

courts in connection with any Finance Document;

 

(b)                                 irrevocably appoints Rhodia Inc. as its agent

for service of process, where required, in relation to any proceedings before

any courts located in the State of New York in connection with any Finance

Document;

 

(c)                                  agrees that failure by the process agent to

notify the relevant Obligor of the process will not invalidate the proceedings

concerned;

 

(d)                                 consents to the service of process relating

to any such proceedings by prepaid posting of a copy of the process to its

address for the time being notified under Clause 22 (Notices).

 

If any person appointed as

process agent is unable for any reason to act as agent for service of process,

the Company (on behalf of all the Obligors) must immediately appoint another

agent on terms acceptable to the Intercreditor Agent. Failing this, the

Intercreditor Agent may appoint another agent for this purpose.

 

24.3                        Forum convenience and

enforcement abroad

 

Each Obligor:

 

(a)                                  waives objection to the English and New York

State and Federal Courts on grounds of inconvenient forum or otherwise as

regards proceedings in connection with a Finance Document; and

 

(b)                                 agrees that a judgement or order of an

English or New York State or Federal Court in connection with a Finance

Document is conclusive and binding on it and may be enforced against it in the

courts of any other jurisdiction.

 

24.4                        Non-exclusivity

 

Nothing in this Clause 24

limits the right of any Finance Party to bring proceedings against an Obligor

in connection with the Finance Documents:

 

(a)                                  in any other court of competent jurisdiction;

or

 

(b)                                 concurrently in more than one jurisdiction.

 

 

25.                               WAIVER OF IMMUNITY

 

25.1                        Waiver of immunity

 

Each Obligor irrevocably and

unconditionally:

 

(a)                                  agrees that if a Finance Party brings

proceedings against it or its assets in relation to the Finance Documents, no

immunity from those proceedings (including, without limitation, suit,

attachment prior to judgement, other attachment, the obtaining of judgement,

execution or other enforcement) will be claimed by or on behalf of itself or

with respect to its assets;

 

(b)                                 waives any such right of immunity which it or

its assets now has or may subsequently acquire; and

 

(c)                                  consents generally in respect of any such

proceedings to the giving of any relief or the issue of any process in

connection with those proceedings, including, without limitation, the making,

enforcement or execution against any assets whatsoever (irrespective of its use

or intended use) of any order or judgment which may be made or given in those

proceedings.

 

25.2                        Waiver of trial by jury

 

THE OBLIGORS AND THE FINANCE

PARTIES WAIVE ANY RIGHTS THEY MAY HAVE TO A JURY TRIAL OR ANY CLAIM OR CAUSE OF

ACTION BASED ON OR ARISING FROM ANY FINANCE DOCUMENT OR THE TRANSACTIONS

CONTEMPLATED BY THE FINANCE DOCUMENTS. IN THE EVENT OF LITIGATION, THIS

AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY THE COURT.

 

26.                               GOVERNING

LAW

 

This Agreement shall be

governed by English law.

 

This Agreement has been

entered into on the date stated at the beginning of this Agreement.

 

 

SCHEDULE 1

VARIOUS PARTIES

PART 1

THE

BORROWING GROUP

 

	

  Country

  	

   

  	

  Borrowing

  Group Member

  
	

   

  	

   

  	

   

  
	

  Algeria

  	

   

  	

  RHODIA ALGERIE SPA

  
	

  Belgium

  	

   

  	

  RHODIA BELGIUM (ex

  RHONE-POULENC BELGIQUE)

  
	

  Belgium

  	

   

  	

  RHODIA CHEMIE N.V. (ex

  RHONE-POULENC CHEMIE N.V.)

  
	

  Brazil

  	

   

  	

  RHODIA BRASIL LTDA

  
	

  Brazil

  	

   

  	

  RHODIA POLIAMIDA E

  ESPECIALIDADES LTDA.

  
	

  Canada

  	

   

  	

  RHODIA CANADA INC. (ex

  RHONE-POULENC SPECIALTY CHEMICALS LTD) (ex ALKARIL CANADA LTD)

  
	

  China

  	

   

  	

  RHODIA CHINA CO. LIMITED

  
	

  China

  	

   

  	

  BAOTOU RHODIA RARE EARTH

  COMPANY LTD (ex BAOTOU LUXI RHONE RARE EARTHS CO LTD)

  
	

  China

  	

   

  	

  BEIJING RHODIA EASTERN

  CHEMICAL Co. Ltd (ex Beijing Rhodia Eastern Chemical Co Ltd)

  
	

  China

  	

   

  	

  JADE FINE CHEMICALS (Wuxi)

  Co. Ltd

  
	

  China

  	

   

  	

  LIYANG RHODIA FOUNDER RARE

  EARTH NEW MATERIAL CO LTD

  
	

  China

  	

   

  	

  RHODIA HENGCHANG

  (ZHANGJIAGANG) SPECIALTY CHEMICAL CO. LTD

  
	

  China

  	

   

  	

  RHODIA INTERNATIONAL

  TRADING

  
	

  China

  	

   

  	

  RHODIA SILICA QINGDAO Co

  Ltd (ex Rhodia Qingdao Silica Co Ltd)

  
	

  China

  	

   

  	

  RHODIA SPECIALTY CHEMICALS

  WUXI Co Ltd (ex RHONE-POULENC SPECIALTY CHEMICALS WUXI Co Ltd)

  
	

  China

  	

   

  	

  RHODIA WUXI PHARMACEUTICAL

  CO. LTD

  
	

  China

  	

   

  	

  RUOHAI (ZHEJIANG) FINE

  CHEMICALS CO. LTD

  
	

  China

  	

   

  	

  SHANGHAI LONGMA

  ENGINEERING PLASTICS CO LTD

  
	

  China

  	

   

  	

  YINGKOU YINGLONG CHEMICAL FIBER

  COMPANY LIMITED

  
	

  Colombia

  	

   

  	

  RHODIA COLOMBIA LTDA

  
	

  Denmark

  	

   

  	

  RHODIA DANMARK A/S

  
	

  Egypt

  	

   

  	

  RHODIA EGYPT CHEMICALS

  S.A.E. (ex RP EGYPT CHEMICALS)

  
	

  Egypt

  	

   

  	

  RHODIA EGYPT DISTRIBUTION

  
	

  France

  	

   

  	

  RHODIA S.A.

  
	

  France

  	

   

  	

  NOVACARB (ex Rhod M)

  
	

  France

  	

   

  	

  ORELIS (ex TECH SEP)

  
	

  France

  	

   

  	

  RHODIA ACETOL (ex

  RHONE-POULENC ACETOL)

  
	

  France

  	

   

  	

  RHODIA CHIMIE (ex

  RHONE-POULENC CHIMIE)

  
	

  France

  	

   

  	

  RHODIA ECO SERVICES (ex

  RHODIA FIN)

  
	

  France

  	

   

  	

  RHODIA ELECTRONICS AND

  CATALYSIS (ex Rhodia Terres Rares)

  
	

  France

  	

   

  	

  RHODIA ENERGY (ex RHOD E)

  
	

  France

  	

   

  	

  RHODIA ENGINEERING

  PLASTICS S.A.S.

  
	

  France

  	

   

  	

  RHODIA ETANCHEITE (ex

  RHONE-POULENC ETANCHEITE FRANCE)

  
	

  France

  	

   

  	

  RHODIA FOOD (ex TEXEL)

  
	

  France

  	

   

  	

  RHODIA HPCII (ex RHOD C)

  
	

  France

  	

   

  	

  RHODIA INTERMEDIAIRES (ex

  RHOD F)

  
	

  France

  	

   

  	

  RHODIA ORGANIQUE (ex RHONE

  J)

  
	

  France

  	

   

  	

  RHODIA P.I. BELLE ETOILE

  (ex RHODIA BELLE ETOILE)

  
	

  France

  	

   

  	

  RHODIA P.I. CHALAMPE (ex

  RHODIA ALSACHIMIE)

  
	

  France

  	

   

  	

  RHODIA PERFORMANCE FIBRES

  
	

  France

  	

   

  	

  RHODIA POLYAMIDE

  INTERMEDIATES (ex RHODIA FIBER AND RESIN INTERMEDIATES)

  
	

  France

  	

   

  	

  RHODIA PPMC (ex BEVALOID)

  
	

  France

  	

   

  	

  RHODIA RECHERCHES (ex RP

  RECHERCHES)

  
	

  France

  	

   

  	

  RHODIA SERVICES (ex

  RHODIA)

  
	

  France

  	

   

  	

  RHODIA SILICES (ex RHOD B)

  
	

  France

  	

   

  	

  RHODIA SILICONES (ex RHOD

  A)

  
	

  France

  	

   

  	

  RHODIGAZ

  
	

  France

  	

   

  	

  RHODITECH (ex RHOD D)

  
	

  Germany

  	

   

  	

  RHODIA ACETOW GMBH (ex

  RHONE-POULENC RHODIA AG)

  
	

  Germany

  	

   

  	

  RHODIA DEUTSCHLAND GmbH

  (ex RHONE-POULENC DEUTSCHLAND GmbH)

  
	

  Germany

  	

   

  	

  RHODIA SILICON GmbH (ex

  RHONE-POULENC SILICON GMBH)

  
	

  Great-Britain

  	

   

  	

  RHODIA CONSUMER

  SPECIALTIES LIMITED (ex Albright & Wilson UK Ltd)

  
	

  Great-Britain

  	

   

  	

  RHODIA ECO SERVICES

  LIMITED (ex Staveley Chemicals Ltd)

  
	

  Great-Britain

  	

   

  	

  RHODIA FOOD UK LIMITED (ex

  Sisyphus 014 Ltd)

  
	

  Great-Britain

  	

   

  	

  RHODIA HPCII UK LIMITED

  (ex Sisyphus 013 Ltd)

  
	

  Great-Britain

  	

   

  	

  RHODIA INDUSTRIAL

  SPECIALTIES (ex Sisyphus 012 Ltd)

  
	

  Great-Britain

  	

   

  	

  RHODIA LIMITED (ex

  Rhône-Poulenc Chemicals Ltd)

  
	

  Great-Britain

  	

   

  	

  RHODIA ORGANIQUE FINE

  LIMITED (ex Sisyphus 011 Ltd)

  
	

  Great-Britain

  	

   

  	

  RHODIA PHARMA SOLUTIONS

  LIMITED (ex Rhodia Chirex Ltd)

  
	

  Great-Britain

  	

   

  	

  RHODIA SEALANTS LIMITED

  (ex Rhône-Poulenc Vispak Ltd)

  
	

  Greece

  	

   

  	

  RHODIA HELLAS SA (ex

  Rhône-Poulenc Hellas S.A.)

  
	

  Guatemala

  	

   

  	

  RHODIA DE CENTROAMERICA

  S/A (EX— RHODIA GUATEMALA)

  
	

  Hong Kong

  	

   

  	

  RHODIA HONG KONG LIMITED

  (ex Rhône-Poulenc Asia Ltd)

  
	

  India

  	

   

  	

  ALBRIGHT & WILSON

  CHEMICALS INDIA LIMITED (ex Albright Morarji and Pandit Ltd)

  
	

  India

  	

   

  	

  RHODIA CHEMICALS INDIA LTD

  (ex Rhône-Poulenc Chemicals (India) Ltd)

  
	

  Italy

  	

   

  	

  RHODIA ENGINEERING

  PLASTICS Srl

  
	

  Italy

  	

   

  	

  RHODIA GERONAZZO SpA (ex

  RHONE-POULENC GERONAZZO Spa)

  
	

  Italy

  	

   

  	

  RHODIA ITALIA S.p.A. (ex

  Rhône-Poulenc Chimica)

  
	

  Italy

  	

   

  	

  RHODIA PERF FIBRES s.r.l.

  
	

  Italy

  	

   

  	

  RHODIA SILICONI ITALIA

  
	

  Ivory Coast

  	

   

  	

  RHODIA OUEST AFRIQUE

  
	

  Japan

  	

   

  	

  ANAN KASEI CO., LTD

  
	

  Japan

  	

   

  	

  RHODIA JAPAN LTD

  
	

  Japan

  	

   

  	

  RHODIA NICCA Ltd (ex

  RHONE-POULENC NICCA)

  
	

  Korea (South)

  	

   

  	

  RHODIA SILICA KOREA (ex

  Rhodia Kofran Ltd)

  
	

  Korea (South)

  	

   

  	

  RHODIA KOREA LTD (ex

  Rhône-Poulenc Korea Ltd)

  
	

  Korea (South)

  	

   

  	

  RHODIA POLYAMIDE CO Ltd

  
	

  Lebanon

  	

   

  	

  RHODIA MASHREK (ex Rhodia

  Liban Sal)

  
	

  Malaysia

  	

   

  	

  ALBRIGHT & WILSON

  (MALAYSIA) Sdn Bhd (ex Josen Chemical Sdn Bhd) / Rhodia Consummer Specialties

  (?)

  
	

  Malaysia

  	

   

  	

  RHODIA MALAYSIA SDN.BHD

  (ex RHONE-POULENC MALAYSIA SDN.BHD)

  
	

  Malaysia

  	

   

  	

  RHODIA SILICONES MALAYSIA

  SDN BHD (formerly Rhône-Poulenc Malaysia Sdn Bhd)

  
	

  Mexico

  	

   

  	

  RHODIA FOSFATADOS DE

  MEXICO S.A. DE CV

  
	

  Morocco

  	

   

  	

  RHODIA MAROC (ex

  RHONE-POULENC MAROC)

  
	

  Peru

  	

   

  	

  RHODIA PERU S/A

  
	

  Philippines

  	

   

  	

  RHODIA PHILIPPINES INC.

  
	

  Poland

  	

   

  	

  RHODIA FOOD BIOLACTA

  Sp.z.o.o. (ex BIOLACTA TEXEL)

  
	

  Romania

  	

   

  	

  RHODIA ROMANIA SRL (ex

  Rhône-Poulenc Romania SRL)

  
	

  Singapore

  	

   

  	

  RHODIA ASIA PACIFIC PTE

  LTD (ex Rhodia Consumer Specialties Asia Pacific Pte Ltd)

  
	

  Singapore

  	

   

  	

  RHODIA SINGAPORE PTE LTD

  (ex Rhône-Poulenc Singapore Pte Ltd)

  
	

  Slovak Republic

  	

   

  	

  RHODIA INDUSTRIAL YARNS,

  a.s.

  
	

  South Africa

  	

   

  	

  RHODIA SOUTH AFRICA (PTY)

  Ltd (ex RHONE-POULENC SOUTH AFRICA (PTY) LTD)

  
	

  Spain

  	

   

  	

  RHODIA HOME, PERSONAL CARE

  AND INDUSTRIAL INGREDIENTS ESPANA SA

  
	

  Spain

  	

   

  	

  RHODIA IBERIA SA (ex

  RHONE-POULENC INDUSTRIAL SA)

  
	

  Spain

  	

   

  	

  RHODIA IBERLATEX

  
	

  Spain

  	

   

  	

  RHODIA SILICONAS ESPANA

  S.A.

  
	

  Sweden

  	

   

  	

  RHODIA SVERIGE AB (ex

  Rhône-Poulenc Sverige AB)

  
	

  Switzerland

  	

   

  	

  RHODIA CAPITAL MARKET (ex

  RHONE-POULENC (SUISSE) S.A.)

  
	

  Switzerland

  	

   

  	

  RHODIA INDUSTRIAL YARNS

  A.G. (ex RHODIA FILTEC A.G.)

  
	

  Taiwan

  	

   

  	

  RHODIA ENGINEERING

  PLASTICS Co, Ltd

  
	

  Thailand

  	

   

  	

  RHODIA PPMC THAILAND (ex

  Awat Thai Ltd)

  
	

  Thailand

  	

   

  	

  RHODIA THAI INDUSTRIES LTD

  (ex Rhône-Poulenc Thai Industries Ltd)

  
	

  Thailand

  	

   

  	

  RHODIA THAILAND LTD (ex

  Rhône-Poulenc Chemicals (Thailand) Ltd)

  
	

  United Arab Emirates

  	

   

  	

  RHODIA FZE (ex Rhodia

  Trading FZE)

  
	

  United States

  	

   

  	

  PRIMESTER

  
	

  United States

  	

   

  	

  RHODIA ELECTRONICS AND

  CATALYSIS INC.

  
	

  United States

  	

   

  	

  RHODIA INC

  
	

  Venezuela

  	

   

  	

  RHODIA ACETOW VENEZUELA

  C.A.

  
	

  Venezuela

  	

   

  	

  RHODIA SILICES DE

  VENEZUELA C.A.

  

 

 

PART 2

THE

ORIGINAL OBLIGORS

 

	

  Country

  	

   

  	

  Original

  Obligors

  
	

   

  	

   

  	

   

  
	

  Brazil

  	

   

  	

  RHODIA POLIAMIDA E

  ESPECIALIDADES LTDA.

  
	

  China

  	

   

  	

  RHODIA HENGCHANG

  (ZHANGJIAGANG) SPECIALTY CHEMICAL CO. LTD

  
	

  China

  	

   

  	

  RHODIA WUXI PHARMACEUTICAL

  CO. LTD

  
	

  China

  	

   

  	

  RHODIA CHINA CO. LIMITED

  
	

  France

  	

   

  	

  RHODIA S.A.

  
	

  Japan

  	

   

  	

  RHODIA JAPAN LTD

  
	

  Mexico

  	

   

  	

  RHODIA FOSFATADOS DE

  MEXICO S.A. DE CV

  
	

  Switzerland

  	

   

  	

  RHODIA CAPITAL MARKET (ex

  RHONE-POULENC (SUISSE) S.A.)

  
	

  Taiwan

  	

   

  	

  RHODIA ENGINEERING

  PLASTICS Co, Ltd

  
	

  United States

  	

   

  	

  RHODIA INC

  
	

  Venezuela

  	

   

  	

  RHODIA ACETOW VENEZUELA

  C.A.

  

 

 

PART 3

ORIGINAL

LENDERS

 

	

  BNP PARIBAS

  
	

  CRÉDIT LYONNAIS S.A.

  
	

  CRÉDIT INDUSTRIEL ET

  COMMERCIAL

  
	

  BANQUE DE L’ECONOMIE DU

  COMMERCE ET DE LA MONETIQUE

  
	

  CSFB

  
	

  WACHOVIA

  
	

  BAYERISCHE LANDESBANK

  
	

  SOCIÉTÉ GÉNÉRALE

  
	

  THE BANK OF

  TOKYO-MITSUBISHI, LTD.

  
	

  FORTIS BANK N.V.

  
	

  NATEXIS BANQUES POPULAIRES

  
	

  CCF

  
	

  STANDARD CHARTERED BANK

  
	

  THE ROYAL BANK OF SCOTLAND

  PLC

  
	

  BANCO BILBAO VIZCAYA

  ARGENTARIA

  
	

  JPMORGAN CHASE BANK

  
	

  ING BANK N.V.

  
	

  UNICREDITO ITALIANO

  
	

  UFJ BANK NEDERLAND N.V.

  
	

  UFJ BANK LIMITED

  
	

  CITIBANK INTERNATIONAL PLC

  
	

  LANDES GIROZENTRALE

  
	

  COMERICA

  

 

PART 4

FACILITY

AGENTS

 

BNP PARIBAS

 

 

SCHEDULE 2

CONDITIONS PRECEDENT DOCUMENTS

 

PART 1

CONDITIONS PRECEDENT DOCUMENTS TO BE PROVIDED IN FORM AND

SUBSTANCE SATISFACTORY

TO EACH ORIGINAL LENDER ARE MARKED WITH AN ASTERISK (*)

 

1.                                      Authorisations

 

1.1                                 A copy of the memorandum and articles of

association, certificate of incorporation and certificate of incorporation on

change of name (if any) or any other constitutional document of each Original

Obligor including, for any Original Obligor incorporated in France, a K-bis

extract from the Trade and Companies Registry related to it.

 

1.2                                 A copy of a resolution of the board of directors

of each Original Obligor authorising the entry into, execution and performance

of this Agreement and the Finance Documents to which it is a party, and related

or ancillary documents and authorising specified persons to execute those on

its behalf.

 

1.3                                 A certificate of an authorised signatory of

each Original Obligor or the Company on behalf of each Original Obligor

certifying:

 

(a)                                  that each document delivered under this

Schedule is correct, complete and in full force and effect as at a date no earlier

than the date of this Agreement;

 

(b)                                 that the execution of and assumption of

obligations under the Finance Documents will not result in any breach of any

restriction binding on that Obligor;

 

(c)                                  as to the identity and specimen signatures of

the directors and signatories of that Original Obligor;

 

(d)                                 that no Default is outstanding relating to

it; and

 

(e)                                  that the representations and warranties made

by it in the Finance Documents are correct.

 

 

2.                                      Financial Information

 

(a)                                  A copy of the Original Financial Statements.

 

(b)                                 Consolidated management accounts, consisting

of a balance sheet, profit and loss account and cashflow for the Company.

 

(c)                                  * The final version (updated from the draft of

November, 2003) of the due diligence report of Ernst & Young dated 28th

November, 2003 together with confirmation from Ernst & Young that it can be

relied upon by the Finance Parties in form and substance satisfactory to the

Lenders.

 

3.                                      Agreements and documents

 

(a)                                  An original of this Agreement executed by each

Party.

 

(b)                                 An original of the Fee Letter(s) and the

letter attaching the agreed form of the Refinancing Facilities Term Sheet and

each Affected Facilities Agreement listed under heading “Committed Bank lines”

in Schedule 3, Securitisation Programme and Lease Facilities.

 

(c)                                  * An original of the agreed form of the

Refinancing Facilities Term Sheet.

 

(d)                                 Evidence that the amendments referred to in

Schedule 9 (Agreed Lease Amendments Principles) have become effective or waiver

and consent letters (and notices of satisfaction with conditions precedent

thereto where applicable) from each of the lessors under the Lease Facilities

to (i) this Agreement, (ii) the Agreed Lease Amendment Principles, (iii) the

Agreed Security Principles and (iv) the Refinancing Facilities Term Sheet.

 

4.                                      Legal opinions

 

* A legal opinion in the agreed form of

Shearman & Sterling LLP, legal advisers to the Company and the Obligors,

addressed to the Finance Parties in respect of the Company and Rhodia Inc.

 

5.                                      Miscellaneous

 

(a)                                  Confirmation that no insolvency proceedings

of the type referred to in Clauses 11.7 (Insolvency) and 11.12 (Analogous

proceedings) have been commenced against any Obligor or Material Subsidiary.

 

(b)                                 Evidence that any process agent referred to

in Clause 24.2 (Service of process) has accepted its appointment to be

appointed under this Agreement.

 

(c)                                  Evidence that all fees, expenses and costs

properly incurred and then due to any of the Finance Parties, the Lenders, the

Members and their legal advisors have been paid in full.

 

(d)                                 * Evidence that (A) an amount equal to 5 per

cent. of the Exposure under each of the Affected Facilities listed under the

heading “Prepayable” in Schedule 3 and calculated by reference to the amount

set out under the heading “Exposure” in Schedule 3 in respect of each Affected

Facility has been prepaid and corresponding commitment cancelled; and (B) the

Derivative Deposit (if any) in respect of each Lender (or Affiliate) which has

executed this Agreement has been deposited with the relevant Lender (or its

Affiliate).

 

(e)                                  * A copy of the Original Business Plan

(including liquidity/analysis).

 

(f)                                    A copy of the Group Structure Chart.

 

(g)                                 * Evidence of the status of the renegotiation

for the maintenance of and relevant waivers of covenants under the

Securitisation Programmes and back-up lines and USPP amendment discussions.

 

(h)                                 Due diligence reports with respect to the

Facility Agreements by Shearman & Sterling and Jones Day.

 

(i)                                     Information regarding cash pooling.

 

(j)                                     A copy of any other authorisation or other

document, opinion or assurance which the Intercreditor Agent has notified the

Company is considered in good faith to be necessary at that time in connection

with the entry into and performance of, and the transactions contemplated by,

any Transaction Document or for the validity and enforceability of any

Transaction Document.

 

 

PART 2

CONDITIONS

PRECEDENT DOCUMENTS

 

In respect of the Security

Documents, Security Sharing Agreement or Subordination Agreement as the case

may be (the Relevant Documents)

 

1.                                      Relevant Documents

 

An original of each executed

Relevant Document.

 

2.                                      Authorisations

 

2.1                                 A copy of the memorandum and articles of

association, certificate of incorporation and certificate of incorporation on

change of name (if any) or any other constitutional document of each member of

the Group party to the Relevant Document including, for any party incorporated

in France, a K-bis extract from the Trade and Companies Registry related to it

(to the extent not already supplied under Schedule 2 Part 1).

 

2.2                                 A copy of a resolution of the board of

directors of each member of the Group party to the Relevant Documents

authorising the entry into, execution and performance of the Relevant Documents

to which it is a party, and related or ancillary documents and authorising

specified persons to execute those on its behalf.

 

2.3                                 A certificate of an authorised signatory of

each member of the Group party to the Relevant Documents certifying:

 

(a)                                  that each document delivered under this

Schedule is correct, complete and in full force and effect as at a date no

earlier than the date of the Relevant Document;

 

(b)                                 that the execution of and assumption of its

obligations under the Relevant Documents will not result in any breach of any

restriction binding on it;

 

(c)                                  as to the identity and specimen signatures of

its directors and signatories;

 

(d)                                 that no Default is outstanding relating to

it; and

 

(e)                                  that the representations and warranties made

by it in the Relevant Documents are correct.

 

3.                                      Security Documents

 

(a)                                  At least 2 copies (or, if required in the

relevant jurisdiction, such additional copies as are requested by the Finance

Parties) of the Security Documents to be entered into in accordance with the

Agreed Security Principles, each duly executed by the parties to it.

 

(b)                                 Registration requirements of Security

Documents effected.

 

(c)                                  Documents necessary for perfection of

Security Documents.

 

(d)                                 A copy of all notices required to be sent

under the Security Documents.

 

(e)                                  A copy of all transfers, share certificates

and stock transfer forms or equivalent relating to assets charged by the

Security Documents.

 

(f)                                    Evidence that each creditor has waived in

writing any negative pledge or other restriction in its favour that would or

could be breached by any member of the Group entering into the Security

Documents.

 

(g)                                 Copies of the Secured Intra Group Loans in an

agreed form.

 

4.                                      Legal opinions

 

(a)                                  A legal opinion in the agreed form of

Shearman & Sterling, legal advisers to the Company and the Obligors,

addressed to the Finance Parties.

 

(b)                                 Other legal opinions in the agreed form from

legal advisors to the Company or the Lenders with respect to the Security

Documents to be entered into as the Intercreditor Agent or Security Agent

considers desirable (acting in good faith).

 

5.                                      Miscellaneous

 

(a)                                  Evidence that any process agent referred to

in the Relevant Document has accepted its appointment to be appointed

thereunder.

 

(b)                                 Evidence that all fees, expenses and costs

properly incurred and then due to any of the Finance Parties, or other

creditors party to a Relevant Document, the Members and their legal advisors

have been paid in full.

 

(c)                                  A copy of any other authorisation or other

document, opinion or assurance which the Intercreditor Agent or Security Agent

(as the case may be) has notified the Company is considered in good faith to be

necessary in connection with the entry into and performance of, and the

transactions contemplated by, any Relevant Document or for the validity and

enforceability of any Relevant Document.

 

 

PART 3

ADDITIONAL OBLIGOR CONDITIONS PRECEDENT DOCUMENTS

 

1.                                      An Accession Agreement duly executed by the

Company and the Additional Obligor.

 

2.                                      Authorisations

 

2.1                                 A copy of the memorandum and articles of

association, certificate of incorporation and certificate of incorporation on

change of name (if any) or any other constitutional document of each Additional

Obligor including, for any Additional Obligor incorporated in France, a K-bis

extract from the Trade and Companies Registry related to it.

 

2.2                                 A copy of a resolution of the board of

directors of each Additional Obligor authorising the entry into, execution and

performance of this Agreement and the Finance Documents to which it is a party,

and related or ancillary documents and authorising specified persons to execute

those on its behalf.

 

2.3                                 A certificate of an authorised signatory of

each Additional Obligor certifying:

 

(a)                                  that each document delivered under this

Schedule is correct, complete and in full force and effect as at a date no

earlier than the date of the Accession Agreement;

 

(b)                                 that the execution of and assumption of

obligations under the Finance Documents will not result in any breach of any

restriction binding on that Obligor;

 

(c)                                  as to the identity and specimen signatures of

the directors and signatories of that Additional Obligor;

 

(d)                                 that no Default is outstanding relating to

it; and

 

(e)                                  that the representations and warranties made

by it in the Finance Documents are correct.

 

3.                                      A legal opinion from legal advisers to the

Company with respect to the entry into of the Finance Documents by that

Additional Obligor with respect to the law of the place of its incorporation.

 

4.                                      Miscellaneous

 

(a)                                  Evidence that any process agent referred to

in the Finance Documents has accepted its appointment to be appointed

thereunder.

 

(b)                                 Evidence that all fees, expenses and costs

properly incurred and then due to any of the Finance Parties, or other

creditors party to a Finance Document, the Members and their legal advisors

have been paid in full.

 

(c)                                  A copy of any other authorisation or other

document, opinion or assurance which the Intercreditor Agent or Security Agent

(as the case may be) has notified the Company is considered in good faith to be

necessary in connection with the entry into and performance of, and the

transactions contemplated by, any Finance Document or for the validity and

enforceability of any Finance Document.

 

 

Any text that has been deleted pursuant to

Rhodia's confidential treatment request is marked [“***”] herein and has been

separately submitted with the U.S. Securities and Exchange Commission.

 

SCHEDULE 3

THE EXISTING FACILITIES, AFFECTED FACILITIES AND EXPOSURES

 

[***]

 

[3 PAGES DELETED, INCLUDING THIS PAGE, AND

FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

WITH RESPECT TO THE OMITTED SCHEDULE.]

 

 

SCHEDULE 4

SECURITY - EXISTING SECURITY INTERESTS

 

Existing Security Interests

 

More than 50% owned Subsidiaries

 

	

  Mature of the security interest

  	

   

  	

  Entity

  Enterprises

  	

   

  	

  Beneficiary

  	

   

  	

  Amount

  (EUR)

  	

   

  	

  Purpose*

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia

  Engineering  Plastics Taiwan Co. Ltd.

  	

   

  	

  BNP Paribas

  	

   

  	

  50,844

  	

   

  	

  NO

  	

   

  
	

  Fixed assets Mortgage

  	

   

  	

  Baotou

  Rhodia Rare Earth Co. Ltd.

  	

   

  	

  Bank of

  China

  	

   

  	

  2,968,668

  	

   

  	

  YES

  	

   

  
	

  Cash deposit

  	

   

  	

  Rhodia Wuxi

  Pharmaceutical Co. Ltd.

  	

   

  	

  Bank of

  China

  	

   

  	

  70,512

  	

   

  	

  YES

  	

   

  
	

  Cash deposit

  	

   

  	

  Rhodia

  Finance International B.V.

  	

   

  	

  Natexis

  Banques Popularies]

  	

   

  	

  10,579,529

  	

   

  	

  NO

  	

   

  
	

  Mortgage

  	

   

  	

  Rhodia

  Brazil

  	

   

  	

  Social

  Security Authority

  	

   

  	

  1,611,303

  	

   

  	

  NO

  	

   

  
	

  Equipments

  	

   

  	

  Rhodia

  Poliamida & Especialidados

  	

   

  	

  Tax Judicial

  Proceedings

  	

   

  	

  848,064

  	

   

  	

  NO

  	

   

  
	

  Cash deposit

  	

   

  	

  Rhodia

  Brazil + Rhodia Poliamida & Especialidados

  	

   

  	

  Judicial

  Proceedings

  	

   

  	

  9,490,208

  	

   

  	

  NO

  	

   

  
	

  Fixed Assets

  	

   

  	

  Rhodia

  Mexicana SA de CV

  	

   

  	

  Mexican

  Customs

  	

   

  	

  31,015,508

  	

   

  	

  NO

  	

   

  
	

  Cash deposit

  	

   

  	

  Rhodia SA

  	

   

  	

  Natexis

  	

   

  	

  1,491,000

  	

   

  	

  NO

  	

   

  
	

  Collateral Cash

  	

   

  	

  Rhodia

  Italia

  	

   

  	

  Mediobanca

  	

   

  	

  11,924,291

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia

  Silicones

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  256,602

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia

  Silicas

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  621,647

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia PPMC

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  1,180,711

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia HPCII

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  —

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia

  Polyamide Intermediates

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  2,454,177

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia

  Performances Fibres

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  20,083

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia

  Electronics & Catalysis

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  783,884

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodiatech

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  160,860

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia Pi

  Belle Etoille

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  140,565

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia Pi

  Chalampe

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  12,963

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  Rhodia Acetol

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  164,195

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  RHODIA

  ENERGY

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  172,817

  	

   

  	

  NO

  	

   

  
	

  Cash Deposit

  	

   

  	

  RHODIA ECO

  SERVICES SULFURIQUE

  	

   

  	

  Credit

  Mutual-Sales of Receivables

  	

   

  	

  1,540,766

  	

   

  	

  NO

  	

   

  
	

  Cash deposit

  	

   

  	

  Rhodia Asia

  Pacifique Pte Ltd

  	

   

  	

  Standard

  Chartered Bank

  	

   

  	

  32,053

  	

   

  	

  NO

  	

   

  
	

  Cash deposit

  	

   

  	

  Albright

  & Wilson Chemicals India Ltd

  	

   

  	

  Various

  (electricity, Water, phone...)

  	

   

  	

  166,911

  	

   

  	

  NO

  	

   

  
	

  Total More than 50% owned Subsidiaries

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  77,847,434

  	

   

  	

   

  	

   

  

 

Relevant Entities (less than 50% owned)

listed in Schedule 1

 

	

  Mature of the security interest

  	

   

  	

  Entity

  Enterprises

  	

   

  	

  Beneficiary

  	

   

  	

  Amount

  (EUR)

  	

   

  	

  Purpose*

  	

   

  
	

  Fixed assets

  	

   

  	

  Liyang

  Rhodia Founder Rare Earth Co. Ltd

  	

   

  	

  Banques

  chinoises (ICBC,ABC, UAC)

  	

   

  	

  20,055,604

  	

   

  	

  YES

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Total Relevant Entities (less than 50%

  owned)

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  20,055,604

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  TOTAL

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  97,903,038

  	

   

  	

   

  	

   

  

 

* YES if realted to financial

debt of Subsidiaries more than 50% owned or relevant Entities listed in

Schedule 1

 

95

 

SCHEDULE 5

ACCESSION AGREEMENT

 

	

  To:

  	

  [INTERCREDITOR AGENT] as

  Intercreditor Agent

  
	

  From:

  	

  [PROPOSED

  LENDER][ADDITIONAL OBLIGOR] [and Company]

  

 

 

RHODIA

S.A.-Secured Co-ordination Agreement dated

[          ] (the Secured

Co-ordination Agreement).

 

We refer to the Secured Co-ordination

Agreement. This is an Accession Agreement.

 

Capitalised terms used in this Accession

Agreement have the same meaning as in the Secured Co-ordination Agreement.

 

We [Lender][Additional Obligor] hereby agree

to become a party to:

 

(a)                                  the Secured Co-ordination Agreement;

 

(b)                                 the Security Sharing Agreement; and

 

(c)                                  the Subordination Agreement.

 

(together the Agreements),

 

as * [a Lender][an Additional Obligor] and to

be bound by and comply with the terms of the Agreements as a

[Lender][Additional Obligor] in accordance with the terms of the Secured

Co-ordination Agreement.

 

[We confirm that as at

[                    ]

[today’s date] the following principal amounts were owing [to/by us] under the

following Facilities.

 

Details of Facility Principal Exposure

 

[                        ]

[                        ]

[**]

 

Our address for notices for the purposes of

the Secured Co-ordination Agreement is:

 

[                                                   ]

 

This Agreement is governed by English law.

 

[Appropriate execution provision for

Lender]***

 

Company

 

RHODIA S.A.

 

By:

 

* Complete as applicable

 

 

Any

text that has been deleted pursuant to Rhodia’s confidential treatment request

is marked [“***”] herein and has been separately submitted with the U.S.

Securities and Exchange Commission.

 

SCHEDULE 6

BUSINESS PLAN INCLUDING LIQUIDITY ANALYSIS

PART 1

RHODIA BUSINESS PLAN AFTER DISPOSALS

 

[***]

 

[2 PAGES DELETED, INCLUDING THIS PAGE, AND

FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

WITH RESPECT TO THE OMITTED PART OF THE SCHEDULE.]

 

 

Any

text that has been deleted pursuant to Rhodia’s confidential treatment request

is marked [“***”] herein and has been separately submitted with the U.S.

Securities and Exchange Commission.

 

PART 2

LIQUIDITY

ANALYSIS

 

[***]

 

[2 PAGES DELETED, INCLUDING THIS PAGE, AND

FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED

WITH RESPECT TO THE OMITTED PART OF THE SCHEDULE.]

 

 

SCHEDULE 7

INTER-COMPANY LOANS

 

PART 1

INTERCOMPANY

LOANS/BORROWINGS BETWEEN RHODIA S.A. AND ITS SUBSIDIARIES

 

	

  Transaction

  	

   

  	

  Consolidation

  method

  	

   

  	

  Subsidiary

  	

   

  	

  Drawdown

  	

   

  	

  Maturity

  	

   

  	

  Interest

  	

   

  	

  Nominal

  Amount

  	

   

  	

  Currency

  Rate

  	

   

  	

  Closing

  Price

  	

   

  	

  Closing

  Amount

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Albright & Wilson

  Chemicals Pty Ltd

  	

   

  	

  21/11/03

  	

   

  	

  19/12/03

  	

   

  	

  5.07

  	

   

  	

  15,633,693.18

  	

   

  	

  AUD

  	

   

  	

  /1.65830

  	

   

  	

  9,427,542.17

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Performance Fibres

  GmbH

  	

   

  	

  28/11/03

  	

   

  	

  30/01/04

  	

   

  	

  2.645

  	

   

  	

  63,355.78

  	

   

  	

  CAD

  	

   

  	

  /1.55520

  	

   

  	

  40,738.03

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Non-conslidated

  	

   

  	

  Rhodia Financial Services

  	

   

  	

  21/11/03

  	

   

  	

  19/12/03

  	

   

  	

  0.055

  	

   

  	

  800,262.28

  	

   

  	

  CHF

  	

   

  	

  /1.54840

  	

   

  	

  516,831.75

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Industrial Yarns AG

  	

   

  	

  21/11/03

  	

   

  	

  15/12/03

  	

   

  	

  0.06333

  	

   

  	

  29,418,426.88

  	

   

  	

  CHF

  	

   

  	

  /1.54840

  	

   

  	

  18,999,242.37

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Industrial Yarns AG

  	

   

  	

  28/11/03

  	

   

  	

  15/12/03

  	

   

  	

  0.18

  	

   

  	

  3,500,000.00

  	

   

  	

  CHF

  	

   

  	

  /1.54840

  	

   

  	

  2,260,397.83

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Industrial Yarns AG

  	

   

  	

  27/11/03

  	

   

  	

  03/12/03

  	

   

  	

  0.05167

  	

   

  	

  15,000,000.00

  	

   

  	

  CHF

  	

   

  	

  /1.54840

  	

   

  	

  9,687,419.27

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Industrial Yarns AG

  	

   

  	

  28/11/03

  	

   

  	

  15/12/03

  	

   

  	

  0.04833

  	

   

  	

  1,066,139.70

  	

   

  	

  CHF

  	

   

  	

  /1.54840

  	

   

  	

  688,542.82

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Participation Et de Gestion

  	

   

  	

  30/06/03

  	

   

  	

  30/12/03

  	

   

  	

  0.01

  	

   

  	

  21,337,992.07

  	

   

  	

  CHF

  	

   

  	

  /1.54840

  	

   

  	

  13,780,671.71

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Chem Italia S.P.A.

  	

   

  	

  07/11/03

  	

   

  	

  01/12/03

  	

   

  	

  3.579

  	

   

  	

  15,500,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  15,500,000.00

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Iberia

  	

   

  	

  21/11/03

  	

   

  	

  19/12/03

  	

   

  	

  1.94

  	

   

  	

  10,034,730.51

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  10,034,730.51

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Engineering Plastics

  NV

  	

   

  	

  04/11/03

  	

   

  	

  04/12/03

  	

   

  	

  1.969

  	

   

  	

  17,637,894.77

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  17,637,894.77

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Acetow AG

  	

   

  	

  16/10/03

  	

   

  	

  16/01/04

  	

   

  	

  2.963

  	

   

  	

  5,000,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  5,000,000.00

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Acetow AG

  	

   

  	

  16/10/03

  	

   

  	

  16/01/04

  	

   

  	

  2.963

  	

   

  	

  5,000,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  5,000,000.00

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Chem Italia S.P.A.

  	

   

  	

  03/11/03

  	

   

  	

  01/12/03

  	

   

  	

  3.044

  	

   

  	

  40,000,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  40,000,000.00

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Chimie

  	

   

  	

  09/10/03

  	

   

  	

  07/10/04

  	

   

  	

  2

  	

   

  	

  185,000,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  185,000,000.00

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Finance

  	

   

  	

  01/08/03

  	

   

  	

  29/12/03

  	

   

  	

  1.818

  	

   

  	

  66,581,152.76

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  66,581,152.76

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Hpcii Espagne

  	

   

  	

  27/11/03

  	

   

  	

  29/12/03

  	

   

  	

  1.968

  	

   

  	

  2,742,946.03

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  2,742,946.03

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Deutschland GmbH

  	

   

  	

  28/11/03

  	

   

  	

  01/12/03

  	

   

  	

  1.968

  	

   

  	

  3,000,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  3,000,000.00

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Energy SAS

  	

   

  	

  28/11/03

  	

   

  	

  05/12/03

  	

   

  	

  3.393

  	

   

  	

  8,801.36

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  8,801.36

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Deutschland GmbH

  	

   

  	

  28/11/03

  	

   

  	

  01/12/03

  	

   

  	

  1.968

  	

   

  	

  1,800,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  1,800,000.00

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Siliconas Espana SA

  	

   

  	

  27/11/03

  	

   

  	

  29/12/03

  	

   

  	

  1.943

  	

   

  	

  2,172,626.25

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  2,172,626.25

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Iberlatex Espana

  	

   

  	

  27/11/03

  	

   

  	

  29/12/03

  	

   

  	

  1.943

  	

   

  	

  2,177,134.78

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  2,177,134.78

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Iberlatex Espana

  	

   

  	

  28/11/03

  	

   

  	

  29/12/03

  	

   

  	

  1.943

  	

   

  	

  4,390,455.29

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  4,390,455.29

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Iberia

  	

   

  	

  27/11/03

  	

   

  	

  10/12/03

  	

   

  	

  1.943

  	

   

  	

  8,000,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  8,000,000.00

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Intl Holdings BV

  	

   

  	

  28/11/03

  	

   

  	

  15/01/04

  	

   

  	

  1.9805

  	

   

  	

  21,034,469.41

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  21,034,469.41

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Siliconas Espana SA

  	

   

  	

  28/11/03

  	

   

  	

  29/12/03

  	

   

  	

  1.943

  	

   

  	

  4,401,007.82

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  4,401,007.82

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Deutschland GmbH

  	

   

  	

  27/11/03

  	

   

  	

  04/12/03

  	

   

  	

  1.988

  	

   

  	

  18,000,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  18,000,000.00

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Chimie

  	

   

  	

  02/09/03

  	

   

  	

  02/12/03

  	

   

  	

  2.026

  	

   

  	

  91,170,904.99

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  91,170,904.99

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Limited

  	

   

  	

  21/11/03

  	

   

  	

  19/12/03

  	

   

  	

  4.72031

  	

   

  	

  17,185,145.28

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  24,652,338.66

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Limited

  	

   

  	

  26/11/03

  	

   

  	

  19/12/03

  	

   

  	

  4.71781

  	

   

  	

  195,087.29

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  279,855.53

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Reorganisation Ltd

  	

   

  	

  28/11/03

  	

   

  	

  31/12/03

  	

   

  	

  4.7025

  	

   

  	

  223,026,510.90

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  319,934,745.23

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Limited

  	

   

  	

  28/11/03

  	

   

  	

  01/12/03

  	

   

  	

  3.43719

  	

   

  	

  1,042,050.00

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  1,494,835.75

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Limited

  	

   

  	

  28/11/03

  	

   

  	

  19/12/03

  	

   

  	

  4.68

  	

   

  	

  4,477,089.82

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  6,422,449.89

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Limited

  	

   

  	

  28/11/03

  	

   

  	

  19/12/03

  	

   

  	

  4.68

  	

   

  	

  1,848,000.00

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  2,650,982.64

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia ind. Yarns

  Daugavpils

  	

   

  	

  24/10/03

  	

   

  	

  03/12/03

  	

   

  	

  2.725

  	

   

  	

  2,510,547.87

  	

   

  	

  LVL

  	

   

  	

  /0.65550

  	

   

  	

  3,829,973.87

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Participations Chimiques

  c/o Sefige

  	

   

  	

  30/09/03

  	

   

  	

  29/12/03

  	

   

  	

  1.035

  	

   

  	

  481,569.65

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  401,508.80

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Performance Fibres

  GmbH

  	

   

  	

  28/11/03

  	

   

  	

  30/12/03

  	

   

  	

  0.99375

  	

   

  	

  138,766.10

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  115,696.26

  	

   

  
	

  Subsidiary Lender

  	

   

  	

  Fully consolidated

  	

   

  	

  Alaver

  	

   

  	

  25/06/03

  	

   

  	

  22/12/03

  	

   

  	

  1.49

  	

   

  	

  8,076,904.30

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  6,734,120.64

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Canada Inc

  	

   

  	

  30/09/03

  	

   

  	

  03/12/03

  	

   

  	

  4.93833

  	

   

  	

  14,278,400.00

  	

   

  	

  CAD

  	

   

  	

  /1.55520

  	

   

  	

  9,181,069.96

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Canada Inc

  	

   

  	

  28/10/03

  	

   

  	

  03/12/03

  	

   

  	

  4.98667

  	

   

  	

  2,000,000.00

  	

   

  	

  CAD

  	

   

  	

  /1.55520

  	

   

  	

  1,286,008.23

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Industrial Yarns AG

  	

   

  	

  21/11/03

  	

   

  	

  15/12/03

  	

   

  	

  0.06333

  	

   

  	

  2,000,000.00

  	

   

  	

  CHF

  	

   

  	

  /1.54840

  	

   

  	

  1,291,655.90

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Gesmo

  	

   

  	

  18/09/03

  	

   

  	

  18/12/03

  	

   

  	

  3

  	

   

  	

  5,362,224.53

  	

   

  	

  CHF

  	

   

  	

  /1.54840

  	

   

  	

  3,463,074.48

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Equity method

  	

   

  	

  Nylstar SAS

  	

   

  	

  30/09/03

  	

   

  	

  03/12/03

  	

   

  	

  3.153

  	

   

  	

  -300,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  -300,000.00

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Energy SAS

  	

   

  	

  07/11/03

  	

   

  	

  05/12/03

  	

   

  	

  3.393

  	

   

  	

  4,531,190.42

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  4,531,190.42

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Nederland

  	

   

  	

  21/11/03

  	

   

  	

  19/12/03

  	

   

  	

  3.365

  	

   

  	

  506,826.31

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  506,826.31

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Non-consolidated

  	

   

  	

  Rhodia Consomer Spec. BV

  	

   

  	

  31/10/03

  	

   

  	

  30/01/04

  	

   

  	

  3.453

  	

   

  	

  584,066.84

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  584,066.84

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Particitions

  	

   

  	

  29/10/03

  	

   

  	

  30/04/04

  	

   

  	

  3.508

  	

   

  	

  62,252,844.16

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  62,252,844.16

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Equity method

  	

   

  	

  Nylstar NV

  	

   

  	

  28/11/03

  	

   

  	

  29/12/03

  	

   

  	

  3.093

  	

   

  	

  17,037,219.65

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  17,037,219.65

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Engineering Plastics

  NV

  	

   

  	

  07/11/03

  	

   

  	

  08/11/04

  	

   

  	

  8.5

  	

   

  	

  15,500,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  15,500,000.00

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Finance Intl

  	

   

  	

  28/11/03

  	

   

  	

  29/12/03

  	

   

  	

  2.993

  	

   

  	

  67,063,725.17

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  67,063,725.17

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Eco Services

  Nederland B.V

  	

   

  	

  21/11/03

  	

   

  	

  19/12/03

  	

   

  	

  3.365

  	

   

  	

  4,500,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  4,500,000.00

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Industrial Yarns

  Slovakia A.S.

  	

   

  	

  28/11/03

  	

   

  	

  31/12/03

  	

   

  	

  3.393

  	

   

  	

  3,788,920.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  3,788,920.00

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Equity method

  	

   

  	

  Nylstar SAS

  	

   

  	

  03/09/03

  	

   

  	

  03/12/03

  	

   

  	

  3.153

  	

   

  	

  2,800,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  2,800,000.00

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Germany

  International

  	

   

  	

  31/12/02

  	

   

  	

  05/07/04

  	

   

  	

  5.2

  	

   

  	

  753,350,235.35

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  753,350,235.35

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Germany

  International

  	

   

  	

  30/06/03

  	

   

  	

  01/06/11

  	

   

  	

  9.345

  	

   

  	

  65,820,102.42

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  65,820,102.42

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Deutschland GMBH

  	

   

  	

  30/09/03

  	

   

  	

  30/12/03

  	

   

  	

  9.345

  	

   

  	

  44,000,000.00

  	

   

  	

  EUR

  	

   

  	

  1

  	

   

  	

  44,000,000.00

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Limited

  	

   

  	

  27/11/03

  	

   

  	

  19/12/03

  	

   

  	

  4.72031

  	

   

  	

  1,500,000.00

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  2,151,771.63

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Limited

  	

   

  	

  25/11/03

  	

   

  	

  19/12/03

  	

   

  	

  4.72031

  	

   

  	

  1,761,080.13

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  2,526,294.84

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Holding Limited

  	

   

  	

  02/01/02

  	

   

  	

  04/01/10

  	

   

  	

  6.301

  	

   

  	

  58,724,352.50

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  84,240,930.28

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Holding Limited

  	

   

  	

  02/01/02

  	

   

  	

  05/01/09

  	

   

  	

  6.295

  	

   

  	

  62,438,838.28

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  89,569,413.69

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Chirex Holdings Ltd

  	

   

  	

  03/09/01

  	

   

  	

  03/01/07

  	

   

  	

  6.28

  	

   

  	

  18,784,593.91

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  26,946,770.78

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Holding Limited

  	

   

  	

  03/09/01

  	

   

  	

  03/01/07

  	

   

  	

  6.28

  	

   

  	

  50,573,906.67

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  72,548,998.24

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Holding Limited

  	

   

  	

  03/09/01

  	

   

  	

  03/01/08

  	

   

  	

  6.3

  	

   

  	

  47,528,828.10

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  68,180,789.13

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Holding Limited

  	

   

  	

  03/09/01

  	

   

  	

  03/01/06

  	

   

  	

  6.25

  	

   

  	

  53,815,799.10

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  77,199,539.66

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Chirex Holdings Ltd

  	

   

  	

  03/09/01

  	

   

  	

  03/01/06

  	

   

  	

  6.25

  	

   

  	

  19,988,725.38

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  28,674,114.73

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Chirex Holdings Ltd

  	

   

  	

  03/09/01

  	

   

  	

  04/01/05

  	

   

  	

  5.63

  	

   

  	

  21,653,612.00

  	

   

  	

  GBP

  	

   

  	

  /0.69710

  	

   

  	

  31,062,418.59

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Japan Ltd

  	

   

  	

  10/11/03

  	

   

  	

  05/12/03

  	

   

  	

  1.36

  	

   

  	

  1,000,236,250

  	

   

  	

  JPY

  	

   

  	

  /131.24000

  	

   

  	

  7,621,428.30

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Japan Ltd

  	

   

  	

  06/11/03

  	

   

  	

  05/12/03

  	

   

  	

  1.36

  	

   

  	

  1,900,448,875

  	

   

  	

  JPY

  	

   

  	

  /131.24000

  	

   

  	

  14,480,713.77

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Fosfatados de Mexico

  	

   

  	

  17/10/03

  	

   

  	

  19/12/03

  	

   

  	

  1.64

  	

   

  	

  -4,100,000.00

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  -3,418,375.85

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Energy SAS

  	

   

  	

  14/11/03

  	

   

  	

  05/12/03

  	

   

  	

  2.41

  	

   

  	

  200,000.00

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  166,750.04

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Inc

  	

   

  	

  13/11/03

  	

   

  	

  04/12/03

  	

   

  	

  2.16

  	

   

  	

  5,002,000.00

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  4,170,418.54

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia China

  	

   

  	

  10/11/03

  	

   

  	

  20/05/04

  	

   

  	

  2.55

  	

   

  	

  1,100,000.00

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  917,125.23

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Mexicana SA

  	

   

  	

  08/10/03

  	

   

  	

  18/12/03

  	

   

  	

  1.64

  	

   

  	

  2,774,186.25

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  2,312,978.36

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia de Mexico

  	

   

  	

  30/09/03

  	

   

  	

  18/12/03

  	

   

  	

  1.66

  	

   

  	

  20,343,655.03

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  16,961,526.62

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Fosfatados de Mexico

  	

   

  	

  30/09/03

  	

   

  	

  18/12/03

  	

   

  	

  1.66

  	

   

  	

  68,309,434.00

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  56,953,004.84

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Especialidados

  	

   

  	

  30/09/03

  	

   

  	

  18/12/03

  	

   

  	

  1.66

  	

   

  	

  2,643,403.97

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  2,203,938.61

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Engineering Plastics

  Co, LTD

  	

   

  	

  28/11/03

  	

   

  	

  30/01/04

  	

   

  	

  2.6675

  	

   

  	

  1,003,051.92

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  836,294.75

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Engineering Plastics

  Co, LTD

  	

   

  	

  18/09/03

  	

   

  	

  18/12/03

  	

   

  	

  2.64

  	

   

  	

  2,011,192.38

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  1,676,832.07

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Non-consolidated

  	

   

  	

  Rhodia Uruguay

  	

   

  	

  04/09/03

  	

   

  	

  04/12/03

  	

   

  	

  2.44563

  	

   

  	

  763,906.79

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  636,907.45

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Deutschland GmbH

  	

   

  	

  20/06/03

  	

   

  	

  22/12/03

  	

   

  	

  2.33875

  	

   

  	

  13,038,289.69

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  10,870,676.75

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Fully consolidated

  	

   

  	

  Rhodia Fosfatados de Mexico

  	

   

  	

  19/09/03

  	

   

  	

  19/12/03

  	

   

  	

  1.64

  	

   

  	

  39,142,502.53

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  32,635,069.64

  	

   

  
	

  Subsidiary Borrower

  	

   

  	

  Non-consolidated

  	

   

  	

  Rhodia Argentina S.A.

  	

   

  	

  15/09/03

  	

   

  	

  15/12/03

  	

   

  	

  1.64

  	

   

  	

  1,258,586.19

  	

   

  	

  USD

  	

   

  	

  /1.19940

  	

   

  	

  1,049,346.50

  	

   

  

 

 

PART 2

INTERCOMPANY LOANS/BORROWINGS BETWEEN THE RHODIA SUBSIDIARIES

(AS OF 30th NOVEMBER, 2003)

 

	

  Lending

  entity

  	

   

  	

  Borrowing entity

  	

   

  	

  Amount (KEUR)

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Rhodia Finances

  	

   

  	

  Rhodia Inc.

  	

   

  	

  175,088

  	

   

  
	

  Rhodia Inc.

  	

   

  	

  Rhodia Holding Inc.

  	

   

  	

  148,187

  	

   

  
	

  Rhodia Ltd

  	

   

  	

  Rhodia Chirex Holdings Ltd

  	

   

  	

  64,800

  	

   

  
	

  Rhodia Financial Services

  Inc.

  	

   

  	

  Rhodia Inc.

  	

   

  	

  38,528

  	

   

  
	

  Rhodia Inc.

  	

   

  	

  Rhodia Pharma Solutions

  Inc.

  	

   

  	

  27,887

  	

   

  
	

  Rhodia Japan

  	

   

  	

  Anan Kasei Co Ltd

  	

   

  	

  16,417

  	

   

  
	

  Rhodia Acetow GmbH

  	

   

  	

  Alexil

  	

   

  	

  13,685

  	

   

  
	

  Rhodia Benelux

  	

   

  	

  Rhodia Finance

  International BV

  	

   

  	

  13,059

  	

   

  
	

  Rhodia Deutschland GmbH

  	

   

  	

  Rhodia Acetow GmbH

  	

   

  	

  10,871

  	

   

  
	

  Rhodia Inc.

  	

   

  	

  Rhodia Electronics &

  Catalysis Inc.

  	

   

  	

  6,542

  	

   

  
	

  Rhodia Financial Services

  Inc.

  	

   

  	

  Rhodia Ltd

  	

   

  	

  5,402

  	

   

  
	

  Rhodia Financial Services

  Inc.

  	

   

  	

  Rhodia Engineering

  Plastics Corp—USA

  	

   

  	

  5,003

  	

   

  
	

  Rhodia Iberia SA

  	

   

  	

  Rhodia HPCII—Espagne

  	

   

  	

  4,000

  	

   

  
	

  Rhodia China Co Ltd

  	

   

  	

  Beijing RP Eastern

  Chemical Ltd

  	

   

  	

  3,212

  	

   

  
	

  Rhodia China Co Ltd

  	

   

  	

  Rhodia Wuxi Pharmaceutical

  Co Ltd

  	

   

  	

  2,992

  	

   

  
	

  Rhodia Trading Australia

  	

   

  	

  Rhodia Australia Pty

  	

   

  	

  2,662

  	

   

  
	

  Rhodia Silicones Shangai

  Co Ltd

  	

   

  	

  Rhodia China Co Ltd

  	

   

  	

  2,153

  	

   

  
	

  Rhodia China Co Ltd

  	

   

  	

  Rhodia Silica Qingdao

  	

   

  	

  2,034

  	

   

  
	

  Rhodia Polyamide

  Intermediates

  	

   

  	

  Rhodia Recherches

  	

   

  	

  1,878

  	

   

  
	

  Rhodia Ltd

  	

   

  	

  Rhodia Asia-Pacific

  	

   

  	

  1,842

  	

   

  
	

  Rhodia Silicones Australia

  Pty Ltd

  	

   

  	

  Rhodia Australia Pty

  	

   

  	

  1,618

  	

   

  
	

  Rhodia Organique

  	

   

  	

  Rhodia Recherches

  	

   

  	

  1,585

  	

   

  
	

  Rhodia Inc.

  	

   

  	

  Rhodia Engineering

  Plastics Corp—USA

  	

   

  	

  1,537

  	

   

  
	

  Rhodia Brésil

  	

   

  	

  Rhodia Poliamida Brasil

  	

   

  	

  1,511

  	

   

  
	

  Conuben SL

  	

   

  	

  Rhodia Iberia SA

  	

   

  	

  1,350

  	

   

  
	

  Rhodia Acetow Venezuela SA

  	

   

  	

  Rhodia Silices de

  Venezuela C.A.

  	

   

  	

  1,302

  	

   

  
	

  Rhodia Hengchang Spec Chem

  	

   

  	

  Rhodia China Co Ltd

  	

   

  	

  1,169

  	

   

  
	

  Rhodia China Co Ltd

  	

   

  	

  Ruohai Fine Chemicals Co

  Ltd

  	

   

  	

  1,158

  	

   

  
	

  Rhodia Poliamida Ltda

  	

   

  	

  Rhodia Brésil

  	

   

  	

  1,090

  	

   

  
	

  Rhodia Silicones

  	

   

  	

  Rhodia Recherches

  	

   

  	

  1,039

  	

   

  
	

  A&W Thai Holding

  	

   

  	

  Rhodia Thai Industries Ltd

  	

   

  	

  1,003

  	

   

  
	

  Rhodia Food SAS

  	

   

  	

  Rhodia Recherches

  	

   

  	

  933

  	

   

  
	

  Rhodia Iberia SA

  	

   

  	

  Rhodia Iberlatex

  	

   

  	

  800

  	

   

  
	

  Rhodia Silicones

  	

   

  	

  GIE Osiris

  	

   

  	

  758

  	

   

  
	

  Rhodia Nicca

  	

   

  	

  Rhodia Japan

  	

   

  	

  621

  	

   

  
	

  Rhodia Brésil

  	

   

  	

  Alexil

  	

   

  	

  469

  	

   

  
	

  Rhodia PPMC SAS

  	

   

  	

  Rhodia Recherches

  	

   

  	

  468

  	

   

  
	

  Rhodia China Co Ltd

  	

   

  	

  Rhodia Specialty Chemicals

  Wuxi

  	

   

  	

  403

  	

   

  
	

  Rhodia Cons Spec Malaysia

  	

   

  	

  Rhodia Malaysia SDN BHD

  	

   

  	

  373

  	

   

  
	

  Rhodia China Co Ltd

  	

   

  	

  Baotou Rhodia Rare Earths

  Co., Ltd

  	

   

  	

  302

  	

   

  
	

  Rhoia Intern. Trading Co

  Ltd

  	

   

  	

  Rhodia China Co Ltd

  	

   

  	

  235

  	

   

  
	

  Rhodia Organique

  	

   

  	

  Rhodia Food SAS

  	

   

  	

  186

  	

   

  
	

  Rhodia HPCII

  	

   

  	

  Rhodia Recherches

  	

   

  	

  181

  	

   

  
	

  A&W Asia Pacific

  Holding

  	

   

  	

  Rhodia Asia Pacific Pte

  Ltd

  	

   

  	

  169

  	

   

  
	

  Rhodia Poliamida Ltda

  	

   

  	

  Rhodia Poliamida Brasil

  	

   

  	

  166

  	

   

  
	

  Rhodia Electronics &

  Catalysis

  	

   

  	

  Rhodia Recherches

  	

   

  	

  158

  	

   

  
	

  Rhodia Eco Services

  	

   

  	

  Rhodia Recherches

  	

   

  	

  100

  	

   

  
	

  Rhodia P.I. Belle Etoile

  	

   

  	

  Rhodia Recherches

  	

   

  	

  8

  	

   

  

 

 

SCHEDULE 8

ERISA EVENTS

 

For the purpose of this Agreement, an ERISA Event means:

 

	

  (a)

  	

   

  	

  (i)

  	

   

  	

  the occurrence of a

  reportable event, within the meaning of Section 4043 of ERISA, with respect

  to any Plan unless the 30-day notice requirement with respect to such event

  has been waived by the PBGC or

  
	

   

  	

   

  	

  (ii)

  	

   

  	

  the requirements of

  Section 4043(b) of ERISA apply with respect to a contributing sponsor, as

  defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in

  paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is

  reasonably expected to occur with respect to such Plan within the following

  30 days;

  
	

  (b)

  	

   

  	

  the application pursuant

  to Section 412(d) of the Code or Section 303 of ERISA for a minimum funding

  waiver with respect to a Plan;

  
	

  (c)

  	

   

  	

  the provision by the

  administrator of any Plan of a notice of intent to terminate such Plan,

  pursuant to Section 4041(a)(2) of ERISA (including any such notice with

  respect to a plan amendment referred to in Section 4041(e) of ERISA);

  
	

  (d)

  	

   

  	

  the cessation of

  operations at a facility of any Obligor or any ERISA Affiliate in the

  circumstances described in Section 4062(e) of ERISA;

  
	

  (e)

  	

   

  	

  the withdrawal by any

  Obligor or any ERISA Affiliate from a Multiple Employer Plan during a plan

  year for which it was a substantial employer, as defined in Section

  4001(a)(2) of ERISA;

  
	

  (f)

  	

   

  	

  the imposition of a lien

  under Section 302(f) of ERISA with respect to any Plan;

  
	

  (g)

  	

   

  	

  the adoption of an

  amendment to a Plan requiring the provision of security to such Plan pursuant

  to Section 307 of ERISA; or

  
	

  (h)

  	

   

  	

  the institution by the

  PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or

  the occurrence of any event or condition described in Section 4042 of ERISA

  that constitutes grounds for the termination of, or the appointment of a

  trustee to administer, such Plan, provided, however, that the occurrence of

  the event or condition described in Section 4042(a)(4) of ERISA shall be an

  ERISA Event only if the PBGC has notified any Obligor or ERISA Affiliate that

  it intends to institute proceedings to terminate a Plan pursuant to such

  subsection.

  

 

 

SCHEDULE 9

AGREED LEASE AMENDMENT PRINCIPLES

 

Leases will be renegotiated and amended on a

bilateral basis within the framework of the arrangements under this Agreement

in accordance with the Term Sheets to be provided to the Intercreditor Agent on

or prior to the Commencement Date to include:

 

1.                                      Reduction:

 

(a)                                  5% at the time the consent and waiver letter

is supplied to the Intercreditor Agent on or prior to the Commencement Date;

 

(b)                                 5% on the Term Date;

 

(c)                                  Lease Term unchanged or shortened to be

co-terminus with the Refinancing Facilities Agreement.

 

2.                                      Security:

 

(a)                                  Guarantee of Rhodia S.A. on 100% of total

lease obligation (same as the one existing today);

 

(b)                                 to share in security offered to Finance

Parties under the Shared Security Documents in respect of 80% of obligations of

Rhodia S.A. under its guarantee, subject to and in accordance with the Agreed

Security Sharing Principles.

 

3.                                      Fees:

 

70bp payable at the signing

of the lease amendment or consent and waiver letter referred to above.

 

4.                                      Margin:

 

305bp on the debt component

of the lease up to March 2006.

 

5.                                      Covenants:

 

To be amended or

supplemented in line with agreed covenants under this Agreement and thereafter

the Refinancing Facilities Agreement.

 

 

SCHEDULE 10

FORM OF COMPLIANCE CERTIFICATE

 

[To be reviewed, completed by Chief

Financial Officer/Auditors and to include details of definitions and

computations of financial covenants]

 

To: [AGENT]

 

From: [to be completed]

 

[DATE]

 

Dear Sirs

 

RHODIA

S.A.—Secured Co-ordination Agreement (the Secured Co-ordination Agreement)

 

I refer to the Secured Co-ordination

Agreement and in particular to Clause 10.1 (Financial covenant definitions),

Clause 10.2 (Ratio of Consolidated Net Indebtedness to Adjusted EBITDAR) and

Clause 10.3 (Ratio of EBITDAR to Net Financial Expenses) thereof.

 

Terms defined in the Secured Co-ordination

Agreement shall have the same meaning when used in this certificate.

 

I certify as follows:

 

1.                                       For the Ratio Period ending on [  •  ]:

 

(a)                                  the Borrower’s EBITDAR was

[          ];

 

(b)                                 the Borrower’s Adjusted EBITDAR was [            ];

 

(c)                                  the Borrower’s Consolidated Net Indebtedness

was [            ]; and

 

(d)                                 the Borrower’s Net Financial Expenses were

[            ].

 

Accordingly for the Ratio

Period referred to above:

 

(i)                                     the ratio of the Borrower’s EBITDAR to its

Net Financial Expenses was: [           

]; and

 

(ii)                                  the ratio of the Borrower’s Consolidated Net

Indebtedness to Adjusted EBITDAR was: [            ].

 

2.                                       The following table sets out the information

in relation to Relevant Entities used in the calculation of Adjusted EBITDAR

referred to at paragraph 1(b):

 

 

	

  Relevant Entity and place of

  incorporation/establishment

  	

   

  	

  Relevant

  Entity

  EBITDAR

  	

   

  	

  Borrower’s

  participation in the capital of the

  Relevant Entity

  	

   

  	

  Amount of

  adjustment to

  Borrower’s EBITDAR

  for Relevant Entity

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

3.                                       The following components were used in the

calculation of the Borrower’s Consolidated Net Indebtedness:

 

(a)                                  Gross debt = [            ];

 

(b)                                 Cash position = [            ];

 

(c)                                  Sale of receivables = [            ];

 

(d)                                 Securitisation outstanding = [            ]; and

 

(e)                                  Leasing = [            ].

 

4.                                       The following components were used in the

calculation of the Borrower’s Net Financial Expenses:

 

(a)                                  Interest Expense including interest portion

of lease rentals = [            ]; and

 

(b)                                 Interest income = [            ].

 

 

Chief Financial Officer/Auditors

 

 

SCHEDULE 11

AGREED SECURITY PRINCIPLES

 

PART 1

GENERAL

 

	

  Value:

  	

   

  	

  Based on a value-to-loan

  ratio of 2.5x (LTV Test);

  
	

  Secured

  Assets:

  	

   

  	

  Assets listed in Part 2 of

  this Schedule AND any additional assets of the Group required to obtain a

  Valuation Report confirming compliance with the LTV Test on the Security

  Testing Date;

  
	

  Valuation

  report:

  	

   

  	

  Report provided by a third

  party reputable international Corporate Finance Advisory firm appointed by

  Rhodia confirming the value of the Secured Assets (listed in Part 2 and any

  additional assets) on a going concern basis, on terms satisfactory to the

  Majority Secured Creditors;

  
	

  Security

  Testing Date:

  	

   

  	

  Date on which the Shared

  Security provided for in the SCA is Effective;

  
	

  Effective:

  	

   

  	

  Security package effective

  as per SCA;

  
	

  Beneficiaries:

  	

   

  	

  See Part 3 of this

  Schedule;

  
	

  Amount of

  Exposure secured:

  	

   

  	

  €1.2bn;

  
	

  Security

  Sharing:

  	

   

  	

  Beneficiaries

  of Security shall be party to a Security Sharing Agreement which shall

  legislate for limitations on and a procedure for Enforcement Action and a

  procedure for sharing of security between different creditor groups as set

  out tin Part 4.

  

 

 

 

 

PART 2

 

SECURED

ASSETS

 

	

  GRANTOR OF

  SECURITY

  	

   

  	

  COMPANY/COMPANIES

  SECURED

  	

   

  	

  PROPOSED

  SECURITY

  	

   

  	

  VALUE

  SHARES

  (? M)(1)(2)

  	

   

  	

  VALUE

  INTERCO LOAN

  (? M)(1)

  	

   

  	

  TOTAL BOOK

  VALUE

  (? M)(1)

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Security granted by:

  •        Rhodia S.A. by way of a

  share pledge over shares of certain of its subsidiaries listed below as

  security for its obligations under the Finance Documents and Facility

  Agreements as principal or surety; and

  •        an intercompany borrower

  under an intercompany loan owed to the Company (referred to in the table

  below) over certain of its subsidiaries listed below as security for its

  obligations under the intercompany loan.

  	

   

  	

  Security granted by the

  Company by way of an assignment of intercompany loans owed to it as security

  for its obligations as principal debtor and, to the extent permitted by the

  governing law of the security, guarantor. 

  A cession by ILi Daily cannot secure the obligations of the Company as

  guarantor.

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Rhodia

  S.A. and Rhodia International GmbH

  	

   

  	

  Rhodia

  Acetow GmbH

  100% subsidiary of Rhodia

  S.A. owned indirectly through Rhodia Germany International GmbH and Sopargest

  S.A.

  	

   

  	

  •        Share pledge by Rhodia

  Germany International GmbH (RGI) of 85% of shares of Rhodia Acetow GmbH;

  	

   

  	

  Intercompany Loan in an

  amount no less than ?400 million made to the pledgor by Rhodia S.A.

  	

   

  	

  484

  	

   

  	

  0

  	

   

  	

  558

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •        Share pledge by Rhodia S.A.

  of 100% of shares of Sopargest S.A. which owns, among others, remaining 15%

  of shares of Rhodia Acetow GmbH.

  	

   

  	

   

  	

   

  	

  74

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Status: Operating company

  	

   

  	

  The share pledge granted by

  RGI is to be granted (A) by way of security for an intercompany loan in an

  amount not less than ?400m made by Rhodia S.A. to RGI or (B) by RGI

  directly by way of a limited recourse pledge, in each case to the fullest

  extent permitted by law.  To the

  extent not permitted alternative security of equivalent value will be

  substituted.

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Rhodia

  S.A.

  	

   

  	

  Rhodia

  Brazil Ltda

  100% direct subsidiary of

  Rhodia S.A.

  Status: Operating company

  	

   

  	

  •        Share pledge by Rhodia S.A.

  of 100% of shares of Rhodia Brazil Ltda (RBL)

  	

   

  	

  Intercompany loan by Rhodia

  S.A. to RBL of Japanese Yen 5,500,000,000 (?43,000,000) due 11/04.

  	

   

  	

  201

  	

   

  	

  43

  	

   

  	

  244

  	

   

  

 

(1)  Book value as of September 30, 2003

(2)  Does not take into account any goodwill amortization or other

assets depreciation or amortization that may take place at a later date

 

112

 

	

  GRANTOR OF

  SECURITY

  	

   

  	

  COMPANY/COMPANIES

  SECURED

  	

   

  	

  PROPOSED

  SECURITY

  	

   

  	

  VALUE

  SHARES

  (? M)(1)(2)

  	

   

  	

  VALUE

  INTERCO LOAN

  (? M)(1)

  	

   

  	

  TOTAL BOOK

  VALUE

  (? M)(1)

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Security granted by:

   

  •        Rhodia S.A. by way of a

  share pledge over shares of certain of its subsidiaries listed below as

  security for its obligations under the Finance Documents and Facility

  Agreements as principal or surety; and

   

  •        an intercompany borrower

  under an intercompany loan owed to the Company (referred to in the table

  below) over certain of its subsidiaries listed below as security for its

  obligations under the intercompany loan.

  	

   

  	

  Security granted by the

  Company by way of an assignment of intercompany loans owed to it as security

  for its obligations as principal debtor and, to the extent permitted by the

  governing law of the security, guarantor. 

  A cession by ILi Dailly cannot secure the obligations of the Company

  as guarantor.

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Rhodia

  S.A. and Rhodia Participations SNC

  	

   

  	

  Rhodia

  Participations SNC

  	

   

  	

  [Share pledges granted by

  Rhodia S.A. over

  •        100% of shares of Rhodia

  Participations SNC;

   

  •        25% of shares of Rhodia

  Nederland](3)

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  100% direct subsidiary of

  Rhodia SA

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Status: Holding company for

  Rhodia S.A.’s main French subsidiaries

  	

   

  	

  •        The ?654,000,000

  intercompany loan mentioned in the next column will be secured by share

  pledges by Rhodia Participation SNC of:

  	

   

  	

  Intercompany loan by Rhodia

  S.A. to Rhodia Participations:

  •    ?654,000,000 presently part

  of cash pooling loans will be converted into a medium term loan

  	

   

  	

   

  	

   

  	

  

  

  654

  	

   

  	

  

  

  654

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Silicones S.A.S.

  	

   

  	

  •        Rhodia Silicones S.A.S.

  	

   

  	

   

  	

   

  	

  117

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia Silices

  S.A.S.

  	

   

  	

  •        Rhodia Silices S.A.S.

  	

   

  	

   

  	

   

  	

  37

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Food S.A.S.

  	

   

  	

  •        Rhodia Food S.A.S.

  	

   

  	

   

  	

   

  	

  44

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  HPCII

  	

   

  	

  •        Rhodia HPCII

  	

   

  	

   

  	

   

  	

  21

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Organique

  	

   

  	

  •        Rhodia Organique

  	

   

  	

   

  	

   

  	

  88

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  PPMC

  	

   

  	

  •        Rhodia PPMC

  	

   

  	

   

  	

   

  	

  46

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Ecoservices

  	

   

  	

  •        Rhodia Ecoservices

  	

   

  	

   

  	

   

  	

  43

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Electronics & Catalysis

  	

   

  	

  •        Rhodia Electronics &

  Catalysis

  	

   

  	

   

  	

   

  	

  42

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Intermediates

  	

   

  	

  •        Rhodia Intermedites

  	

   

  	

   

  	

   

  	

  38

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Meyhall

  	

   

  	

  •        Rhodia Meyhall

  	

   

  	

   

  	

   

  	

  22

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Nederland

  	

   

  	

  •        75% of Rhodia Nederland

  	

   

  	

   

  	

   

  	

  39

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Hengchang Zhangjiagang

  	

   

  	

  •        Rhodia Hengchang

  Zhangjiagang

  	

   

  	

   

  	

   

  	

  9

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Rhodia

  Italia

  	

   

  	

  •        Rhodia Italia

  	

   

  	

   

  	

   

  	

  18

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

(3)                                  Assets

to be granted as security in case expert valuation does not meet LTV Test of

2.5x in respect of the other Secured Assets on a going concern basis.

 

113

 

 

	

  GRANTOR OF

  SECURITY

  	

   

  	

  COMPANY/COMPANIES

  SECURED

  	

   

  	

  PROPOSED

  SECURITY

  	

   

  	

  VALUE

  SHARES

  (? M)(1)(2)

  	

   

  	

  VALUE

  INTERCO LOAN

  (? M)(1)

  	

   

  	

  TOTAL BOOK

  VALUE

  (? M)(1)

  
	

   

  	

   

  	

   

  	

   

  	

  Security granted by: 

   

  •    Rhodia S.A. by way of a share pledge over

  shares of certain of its subsidiaries listed below as security for its

  obligations under the Finance Documents and Facility Agreements as principal

  or surety; and 

   

  •    an intercompany borrower under an

  intercompany loan owed to the Company (referred to in the table below) over

  certain of its subsidiaries listed below as security for its obligations

  under the intercompany loan.

  	

   

  	

  Security granted by the

  Company by way of an assignment of intercompany loans owed to it as security

  for its obligations as principal debtor and, to the extent permitted by the

  governing law of the security, guarantor. 

  A cession by ILi Dailly cannot secure the obligations of the Company

  as guarantor.

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Rhodia

  S.A.

  	

   

  	

  Rhodia

  Participations SNC Subsidiaries 

   

  Status: Operating companies

   

  Rhodia

  Silicones

  SASRhodia

  Silices

  SASRhodia

  Food SAS

   

  Rhodia

  HPCII

   

  Rhodia

  Organique

  	

   

  	

   

  	

   

  	

  Intercompany loans by

  Rhodia S.A. to each of the companies listed below which are presently part of

  cash pooling will be converted into medium term loans to be secured for:

   

  •    Rhodia Silicones SAS of €76,000,000

  •    Rhodia Silices SAS of €32,000,000

  •    Rhodia Food SAS of €39,000,000

  •    Rhodia HPCII of €29,000,000

  •    Rhodia Organique of €126,000,000

  	

   

  	

  

  

  

  

  

  

  

  

  

  

  

  

  

  0

  	

   

  	

  

  

  

  

  

  

  

  

  

  

  

  

  

  302

  	

   

  	

  

  

  

  

  

  

  

  

  

  

  

  

  

  302

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Rhodia

  S.A.

  	

   

  	

  Rhodianyl

  SNC

  	

   

  	

  •    [Share pledge of 100% of Rhodianyl](4)

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  100% direct subsidiary of

  Rhodia SA

   

   

  	

   

  	

  •    The ?360,000,000 intercompany loan

  mentioned in the next column will be secured by:

  	

   

  	

  Intercompany loans by

  Rhodia S.A. to Rhodianyl which are presently part of cash pooling to be

  converted into medium term loans in an amount of ? 360,000,000.

  	

   

  	

   

  	

   

  	

  360

  	

   

  	

  360

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    share pledge of 100% of Rhodia Eng.

  Plastics,

  	

   

  	

   

  	

   

  	

  32

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Status: Holding company for

  Rhodia S.A.’s Polyamide activities

  	

   

  	

  •    share pledge of 100% of Rhodia PI Chalampe

  (Rhodianyl SNC owns only 87%)

  	

   

  	

   

  	

   

  	

  93

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    share pledge of 100% of Rhodia Polyamide

  Intermediares

  	

   

  	

   

  	

   

  	

  35

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    share pledge of 100% of Rhodia Poliamida Especialidades

  (Rhodianyl owns only 50% of Rhodia Poliamida Especialidades Ltda)

  	

   

  	

   

  	

   

  	

  194

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    To be released if Short Term Facility is

  not drawn in whole or in part or is cancelled in full by end of its

  availability period.

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

(4)                                  Assets

to be granted as security in case expert valuation does not meet LTV Test of

2.5x in respect of the other Secured Assets on a going concern basis.

 

114

 

 

	

  GRANTOR OF

  SECURITY

  	

   

  	

  COMPANY/COMPANIES

  SECURED

  	

   

  	

  PROPOSED SECURITY

  	

   

  	

  VALUE

  SHARES

  (? M)(1)(2)

  	

   

  	

  VALUE

  INTERCO LOAN

  (? M)(1)

  	

   

  	

  TOTAL BOOK

  VALUE

  (? M)(1)

  
	

   

  	

   

  	

   

  	

   

  	

  Security granted by:

  •    Rhodia S.A. by way of a share pledge over

  shares of certain of its subsidiaries listed below as security for its obligations

  under the Finance Documents and Facility Agreements as principal or surety;

  and

   

  •    an intercompany borrower under an

  intercompany loan owed to the Company (referred to in the table below) over

  certain of its subsidiaries listed below as security for its obligations

  under the intercompany loan.

  	

   

  	

  Security granted by the

  Company by way of an assignment of intercompany loans owed to it as security

  for its obligations as principal debtor and, to the extent permitted by the

  governing law of the security, guarantor. 

  A cession by ILi Dailly cannot secure the obligations of the Company

  as guarantor.

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Rhodia

  S.A. and Rhodia Holdings Ltd.

  	

   

  	

  Rhodia

  Holdings Ltd.

  	

   

  	

  •    Share pledge by Rhodia S.A. of 100% of

  Rhodia Holdings Ltd.

  	

   

  	

  Intercompany loans by

  Rhodia S.A. to Rhodia Holdings Ltd as set out below:

  	

   

  	

  817

  	

   

  	

  391

  	

   

  	

  1,208

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  100% direct subsidiary of

  Rhodia S.A.

  	

   

  	

  •    The ?390,847,013 (GBP 273,045,723)

  intercompany loans mentioned in the next column to be secured by share

  pledges granted by Rhodia Holding Ltd. over:

  	

   

  	

  •    GBP 58,724,352 due on 04/01/10

   

  •    GBP 62,438,838 due on 05/01/09

   

  •    GBP 47,528,828 due on 03/01/08

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Status: Holding company

  	

   

  	

  •    Rhodia Overseas Ltd.

  	

   

  	

  •    GBP 53,815,799 due on 03/01/06

  	

   

  	

  1

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    Rhodia Ltd.

  	

   

  	

  •    GBP 50,537,906 due on 03/01/07.

  	

   

  	

  354

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    Rhodia HPC ?? UK Ltd.

  	

   

  	

   

  	

   

  	

  8

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    Rhodia Food UK Ltd.

  	

   

  	

   

  	

   

  	

  4

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    Rhodia Ecoservices Ltd.

  	

   

  	

   

  	

   

  	

  26

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    Rhodia Pharma Solutions (Holdings) Ltd.

  	

   

  	

   

  	

   

  	

  66

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    Rhodia Consumer Specialities Ltd.

  	

   

  	

   

  	

   

  	

  1

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  •    Rhodia Industrial Specialities Ltd.

  	

   

  	

   

  	

   

  	

  28

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Total

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  3,326

  

 

115

 

PART 3

BENEFICIARIES

 

	

  Affected Facilities (as per

  Schedule 3 of the SCA)

  	

   

  	

  Pre-term

  date(5)

  Exposure secured by shared

  security

  	

   

  	

  Post-term

  date

  Secured by

  Exposure

  shared security

  	

   

  	

  Pre-term

  date

  Non-shared security

  	

   

  	

  Post-term

  date

  Non-shared security

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Committed Bank lines/Refinancing Facilities Agreement

  	

   

  	

  100% of Exposure as set

  out in Schedule 3 of SCA

  	

   

  	

  As under the Refinancing

  Facilities Agreement

  	

   

  	

  Existing Security, if any,

  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement

  	

   

  	

  Existing security, if any,

  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement where

  not refinanced under the Refinancing Facilities Agreement

  
	

  Uncommitted Facilities including Overdraft Facilities

  	

   

  	

  100% of Exposure as set

  out in Schedule 3 of SCA as reduced in accordance with the SCA

  	

   

  	

  100% of Exposure at Term

  Date, not to exceed 100% of Exposure as set out in Schedule 3 of SCA as

  reduced in accordance with the SCA

  	

   

  	

  Existing security, if any,

  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement

  	

   

  	

  Existing security, if any,

  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement

  
	

  Leases

  	

   

  	

  80% of Exposure as set out

  in Schedule 3 of SCA (to include equity/recourse obligations) [as reduced in

  accordance with the SCA]

  	

   

  	

  80% of Exposure as set out

  in Schedule 3 of SCA as reduced in accordance with the SCA(6) [and after

  taking into account permitted lease payments during SCA]

  	

   

  	

  Existing security as per

  Part 1 of Schedule 4 of SCA under relevant Facility Agreement and where

  applicable 5% Lessor Reduction in accordance with Agreed Lease Agreeement

  Principles

  	

   

  	

  Existing security as per

  Part 1 of SCA under relevant Facility Agreement and where applicable 5%

  Lessor Reduction on Term Date

  
	

  Letters of credit/banking guarantees

  	

   

  	

  30% of Exposure as set out

  in Schedule 3 of SCA and 100% of that Exposure in respect of a claim made by

  a Lender following a payment under that letter of credit or guarantee by that

  Lender (except in respect of a payment under an “extend or pay” letter of

  creditor or guarantee made at the time of its maturity

  	

   

  	

  30% of Exposure as set out

  in Schedule 3 of SCA except for letters of credit/banking guarantees (i)

  maturing post-Term Date to be negotiated on a bilateral basis upwards or

  downwards on or around the maturity date or (ii) counter-indemnified under

  the Refinancing Facilities Agreement

  	

   

  	

  Existing security as per

  Part 1 of Schedule 4 of SCA under relevant Facility Agreement

  	

   

  	

  Existing security as per

  Part 1 of Schedule 4 of SCA under relevant Facility Agreement and cash

  collateral and/or a counter-guarantee under the Refinancing Facilities

  Agreement up to a maximum aggregate amount to be agreed

  
	

  Derivative Instruments

  	

   

  	

  100% of its Derivative

  Liability up to the maximum Exposure under that Derivative Instrument as set

  out in Schedule 3 of SCA

  	

   

  	

  100% of its Derivative

  Liability up to the maximum Exposure under that Derivative Instrument as set

  out in Schedule 3 of the SCA

  	

   

  	

  Derivative Deposit as per

  the SCA up to a maximum aggregate amount for all Derivative Instruments not

  exceeding Euros 40,000,000

  	

   

  	

  Derivative Deposit as per

  the SCA up to a maximum aggregate amount for all Derivative Instruments not

  exceeding the amount secured at the Term Date

  

 

 

	

  Non-Affected Facilities (as

  per Schedule 3 of the SCA)

  	

   

  	

  Pre-term

  date(5)

  Exposure secured by shared

  security

  	

   

  	

  Post-term

  date

  Secured by

  Exposure

  shared security

  	

   

  	

  Pre-term

  date

  Non-shared security

  	

   

  	

  Post-term

  date

  Non-shared security

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  High Yield Bonds

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  USPP

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

   

  
	

  EMTN

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Credit facilities (committed and uncommitted bank lines and

  overdrafts)

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Securitisations

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Sales of receivables/forfeiting

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Operating leases

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Letters of credit/banking guarantees

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Forfeiting programmes

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  

 

(5)                                  Dilution percentage Secured Debt to Shared

Security approximately 91/98%.

 

(6)                                  Schedule 3 will be updated to reflect agreed

commercial terms and Exposure as reduced.

 

 

PART 4

SECURITY

SHARING PRINCIPLES

 

1.                                       Parties to the Security

Sharing Agreement:  The Company, the Senior Secured Creditors

(and relevant Facility/Security Agents), the Security Agent and the

Intercreditor Agent. The USPP Noteholders shall not be parties to, but may have

the benefit of, the provisions of the Security Sharing Agreement.

 

2.                                       Senior Secured Creditors:  The

creditors listed in the attached Schedule pre/post Term Date (as defined in the

SCA) including beneficiaries of both the Shared Security and the Non-Shared

Security.

 

3.                                       Majority Secured Creditors: 

Senior Secured Creditors who together represent 66.67% of outstanding

Exposure of the Senior Secured Creditors (including after the Term Date (but

not before) the commitments/outstandings under the Refinancing Facilities

Agreement).

 

4.                                       Security Agent:  To

be agreed.

 

5.                                      Security:

 

•                                          Shared Security-The Secured Assets as listed in Part 2 of

Schedule 11 of the SCA (including for these purposes the new Company Guarantee)

and any other assets designated as Shared Security by the Company and the

Intercreditor Agent in accordance with the SCA.

 

•                                          Non-Shared Security-The security listed in the attached Schedule

pre/post Term Date (as defined in the SCA) being the Existing Security (as

defined in the SCA) and any existing guarantees (including any existing

guarantees from the Company but excluding the Rhodia Inc and the Rhodia Holding

Inc. guarantee of the USPP) and any security interests/guarantees permitted to

be created by the SCA in respect of each Facility (other than the Shared

Security) and including equipment/assets subject to a lease but excluding, for

the avoidance of doubt, receivables under securitisation programmes.

 

6.                                      Secured Debt:

 

•                                          The aggregate amount of Exposure under each

Facility which is to be secured by the Shared Security up to the maximum amount

per Facility set out in the attached Schedule pre/post Term Date.

 

•                                          The maximum aggregate amount of Secured Debt

has been determined having regard to security interests permitted under the

senior High Yield Bonds being Euros 1.3 billion minus (i) up to €40 million of

Derivative Deposit permitted by SCA and (ii) up to €60 million of additional

non-Shared Security permitted by SCA.

 

•                                          The maximum aggregate amount of the present

value of net rental payments under leases(7) which can be secured as Secured

Debt is € 150 million.

 

 

(7)                                  Only including Cranbury, SG Synthetic Lease

and Leasing “Chase”.

 

•                                          The USPP will not be Secured Debt for the

purposes of the Security Sharing Agreement and Security Documents (see point 12

below for treatment of USPP).

 

•                                          It is intended that the Shared Security will

secure any Exposure which was secured on the Shared Security and which is

replaced, refinanced, refunded or renewed to the fullest extent legally

possible.

 

7.                                      Ranking of Secured Debt:

 

•                                          The Senior Secured Creditors (including the

Participants in the Rhodia Inc Synthetic Lease) will rank pari passu in right of priority and

payment in respect of the Secured Debt secured by the Shared Security.

 

•                                          The pari

passu ranking of the Secured Debt secured by the Shared Security

will apply regardless of any matter or thing whatsoever which might otherwise

impact that ranking including, for example, the order of registration, notice or

execution of any document any fluctuation in the outstanding amount of, or any

intermediate discharge of, any Secured Debt.

 

8.                                      Consents:  The

Senior Secured Creditors will:

 

•                                          consent to the granting of the Shared

Security both pre-Term Date and post-Term Date;

 

•                                          co-operate (but not take or refrain from

taking action otherwise prejudicial to it) so that the Secured Debt continues

to be secured on the Shared Security until the Senior Discharge Date; and

 

•                                          consent to the granting of new security

permitted to be granted by the SCA and intended to benefit the lenders under

the Refinancing Facilities Agreement.

 

9.                                      Security Discharge

Date/Release:

 

•                                          The Security Sharing Agreement will apply

from the date of signature through to the Security Discharge Date as regards

the Security except that it will cease to apply to Non-Shared Security after

the Term Date (unless a default under the SCA is outstanding at such date) or

if all obligations in respect of the USPP have not been unconditionally paid or

discharged in full.

 

•                                          Security Discharge Date means the date on

which the Intercreditor Agent notifies the Company (acting on the instructions

of the Secured Creditors) in writing that all Secured Debt has been

unconditionally paid or discharged in full and that the total commitments under

the secured Facilities have been cancelled in full. Notwithstanding the

foregoing and with exceptions to be agreed, the Security shall not be released

except to the extent that all obligations in respect of the USPP have been unconditionally

paid or discharged in full.

 

•                                          The Security Sharing Agreement will provide a

release mechanism (to be agreed) for Shared Security assets on and to the

extent of a disposal permitted under and in accordance with the SCA pre-Term

date and/or the Refinancing Facilities Agreement post-Term Date and/or for the

purpose of the paragraph above.

 

•                                          For the purposes of the Shared Security, the

release date means the date on which the Security Agent notifies the Company

(acting on the instructions of the Secured Creditors) in writing that the long

term credit rating for the Company quoted by both Moody’s and S&P has

reached investment grade and provided that other security for all other

facilities (other than Non-Shared Security and existing guarantees) has been or

is simultaneously released.

 

 

10.                               Enforcement of Shared

Security:

 

•                                          Until the Security Discharge Date, the

Security Agent and /or the Majority Secured Creditors shall have the exclusive

right to enforce the Shared Security and to give instructions to the Security

Agent to do the same, irrespective of whether any event of default or declared

default has occurred under any Facility.

 

•                                          The USPP Noteholders shall have no voting

rights under the Security Sharing Agreement nor any right to direct the

Security Agent or any Senior Secured Creditor in respect of any action relating

to the Shared Security and/or the Non-Shared Security.

 

11.                               Enforcement of Non-Shared

Security:

 

•                                          Until the Term Date (but not thereafter

unless a Default is outstanding under the SCA) no Senior Secured Creditor shall

enforce any Non-Shared Security or generally take any Enforcement Action (as

defined in the SCA) (other than as permitted by and in accordance with the SCA)

unless (i) the Majority Secured Creditors have agreed to the same in writing or

(ii) one or other of the following Events of Default is outstanding: a payment

default, an insolvency event, unenforceability, invalidity/failure to grant

priority ranking of lease security, failure to maintain required insurances or

lessor/participants good faith opinion that non-exercise of rights in respect

of non-shared security would jeopardise recovery of uncovered portion (20%) of

Secured Debt under the Shared Security. For the avoidance of doubt, the prior

written consent of the Majority Secured Creditors is not required by the USPP

Noteholders to claim on or enforce the Rhodia Inc. or Rhodia Holding Inc.

guarantees.

 

•                                          Rights and remedies shall be exercised and

enforcement action taken(8) against the Non-Shared Security (where such

Security has become enforceable) by the Senior Secured Creditor benefiting

therefrom prior to being entitled to receive any proceeds of any Shared

Security.

 

(8)                                  Time period to be agreed.

 

•                                          There may be a limited number of exceptions

to the above principle, for example with respect to Leases and/or Derivative

Instruments where the Company cannot provide the required amount of Derivative

Deposit or a creditor action required to preserve a claim in

insolvency/liquidation.

 

12.                               USPP Noteholders/Trustee:

 

•                                          USPP Noteholders will benefit from the credit

enhancement of Rhodia Inc. and Rhodia Holding Inc. (the “USPP Guarantors”) (to

be agreed) and benefit from the provisions of the Security Sharing Agreement

but will not be Senior Secured Creditors or parties thereto.

 

•                                          The contractual turnover mechanism would

provide that the Senior Secured Creditors agree to turnover an amount of net

enforcement proceeds with regard to the Shared Security to the USPP Noteholders

calculated by reference to the relevant Exposures/recoveries (to be agreed) to

the extent the USPP Noteholders have been unable to recover any debt through

their recourse to any guarantor of the notes.

 

•                                          No Senior Secured Creditor would have any

obligation to turnover any amount which would otherwise become due under the

Security Sharing Agreement to the USPP noteholders where in its good faith

opinion it would not be able to maintain and/or enforce an unsecured claim for

the full amount otherwise to be turned-over (whether as a result of a clawback

risk or otherwise).

 

 

•                                          The Company will indemnify and hold harmless

each Secured Senior Creditor in a form to be agreed for any amounts turned over

by it to the USPP Noteholders (such indemnity claim will not be secured as

Secured Debt). Standard subrogation/assignment provisions to be included in the

Security Sharing Agreement in respect of amounts turned over to USPP

Noteholders.

 

•                                          No representation or warranty would be made

by any Senior Secured Creditor (or relevant Facility/Security Agents), the

Security Agent or the Intercreditor Agent to the USPP noteholders as to the

legality, enforceability, collectibility or value, maintenance, enforcement,

release or discharge of the Security.

 

•                                          No Senior Secured Creditor (nor relevant

Facility/Security Agents), the Security Agent or the Intercreditor Agent would

have any obligation to the USPP noteholders to monitor business, assets,

condition, operations, prospects, credit or the Security and USPP noteholders

will expressly waive any rights/recourse in respect thereof.

 

•                                          The USPP Noteholders will exercise rights and

remedies and take enforcement action(9) against Rhodia Inc and any other

guarantor prior to being entitled to receive any amount of the turnover

proceeds in respect of the Shared Security mentioned above (see

Payments/distributions below).

 

(9)                                  Time period to be agreed.

 

•                                          The prior written consent of the Majority

Secured Creditors is not required by the USPP Noteholders to claim on or

enforce the USPP Guarantors’ guarantees.

 

13.                               Payments/distributions:

 

•                                          Enforcement proceeds of Shared Security will

be paid to and distributed by the Intercreditor Agent/Security Agent.

 

•                                          Enforcement proceeds of Non-Shared Security

will be paid to and distributed by the relevant Facility Agent or paid to the

relevant Secured Creditor.

 

•                                          An escrow arrangement will need to be

established pending receipt of proceeds of enforcement of Shared Security to

ensure that proceeds are not distributed prior to enforcement action(10)

against Non-Shared Security/existing guarantees and to preserve Senior Secured

Creditors net entitlement to any distribution such that Senior Secured

Creditors benefiting from Non-Shared Security are not disadvantaged in relation

to any other Secured Creditors.

 

(10)                            Time period to be agreed.

 

•                                          The order of application of enforcement

proceeds is to be agreed.

 

14.                               Loss Sharing:

 

•                                          Each Senior Secured Creditor must account for

and deduct the amount of proceeds received from the enforcement of the

Non-Shared Security/existing guarantees from its global individual Exposure for

the purposes of determining its pro rata

entitlement to any proceeds of enforcement from the Shared Security.

 

•                                          No obligation on a Senior Secured Creditor to

share proceeds received from the enforcement of the Non-Shared

Security/existing guarantees.

 

•                                          Recoveries from enforcement over secured

Intercompany Loans will be treated on a pari

passu basis between Secured Senior Creditors having Shared Security

notwithstanding that if taken by way of a French law security (Loi Dailly) assignment this can only

secure the direct borrowing obligations of the Company and cannot secure its’

obligations as guarantor.

 

•                                          For the purposes of the Security Sharing

Agreement, set-off against deposits shall be dealt with in the same way as if

Shared/non-Shared Security, as the case may be.

 

•                                          General principle of loss-sharing in respect

of Shared Security as per the SCA.

 

•                                          The loss-sharing provisions in respect of

Shared Security only shall also be for the benefit of the USPP Noteholders.

 

 

15.                                 Security Agent: 

Customary provisions for the appointment of Security Agent and standard

indemnity and other protections to be included.

 

16.                                 Co-operation between Senior

Secured Creditors:  Customary provisions concerning notification

of default, termination events, prepayment events, notification of amount of

Secured Debt under each Facility and authorisation by the Company for Senior

Secured Creditors to disclose information to each other.

 

17.                                 Transfers: 

Customary provisions to ensure that any transferee from a Secured Senior

Creditor accedes to and is bound by the Security Sharing Agreement.

 

18.                                 Several obligations:  The

obligations of each Senior Secured Creditor are several and no liability for

the obligations of any other Senior Secured Creditor; failure by one Senior

Secured Creditor to perform not affect rights/obligations of any other person.

 

19.                                 Amendments/waivers: 

Appropriate quorum for amendments/waivers to Security Sharing

Agreement/release of security to be agreed. Certain amendments (to be agreed)

to be subject to the approval of the Required Holders (as defined in the USPP)

 

20.                                 Governing law and

Jurisdiction:  English law by way of deed. Jurisdiction

clause to track SCA.

 

	

  Affected Facilities (as per

  Schedule 3 of the SCA)

  	

   

  	

  Pre-term

  date(11)

  Exposure secured by shared

  security

  	

   

  	

  Post-term

  date

  Exposure

  secured by

  shared security

  	

   

  	

  Pre-term

  date

  Non-shared security

  	

   

  	

  Post-term

  date

  Non-shared security

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Committed Bank lines/Refinancing Facilities Agreement

  	

   

  	

  100% of Exposure as set

  out in Schedule 3 of SCA

  	

   

  	

  As under the Refinancing

  Facilities Agreement

  	

   

  	

  Existing Security, if any,

  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement

  	

   

  	

  Existing security, if any,

  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement where

  not refinanced under the Refinancing Facilities Agreement

  
	

  Uncommitted Facilities including Overdraft Facilities

  	

   

  	

  100% of Exposure as set

  out in Schedule 3 of SCA as reduced in accordance with the SCA

  	

   

  	

  100% of Exposure at Term

  Date, not to exceed 100% of Exposure as set out in Schedule 3 of SCA as

  reduced in accordance with the SCA

  	

   

  	

  Existing security, if any,

  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement

  	

   

  	

  Existing security, if any,

  as per Part 1 of Schedule 4 of SCA under relevant Facility Agreement

  
	

  Leases

  	

   

  	

  80% of Exposure as set out

  in Schedule 3 of SCA (to include equity/recourse obligations) [as reduced in

  accordance with the SCA]

  	

   

  	

  80% of Exposure as set out

  in Schedule 3 of SCA as reduced in accordance with the SCA(12) [and after

  taking into account permitted lease payments during SCA]

  	

   

  	

  Existing security as per

  Part 1 of Schedule 4 of SCA under relevant Facility Agreement and where

  applicable 5% Lessor Reduction in accordance with Agreed Lease Agreement

  Principles

  	

   

  	

  Existing security as per

  Part 1 of SCA under relevant Facility Agreement and where applicable 5%

  Lessor Reduction on Term Date

  
	

  Letters of credit/banking guarantees

  	

   

  	

  30% of Exposure as set out

  in Schedule 3 of SCA and 100% of that Exposure in respect of a claim made by

  a Lender following a payment under that letter of credit or guarantee by that

  Lender (except in respect of a payment under an “extend or pay” letter of

  creditor or guarantee made at the time of its maturity

  	

   

  	

  30% of Exposure as set out

  in Schedule 3 of SCA except for letters of credit/banking guarantees (i)

  maturing post-Term Date to be negotiated on a bilateral basis upwards or

  downwards on or around the maturity date or (ii) counter-indemnified under

  the Refinancing Facilities Agreement

  	

   

  	

  Existing security as per

  Part 1 of Schedule 4 of SCA under relevant Facility Agreement

  	

   

  	

  Existing security as per

  Part 1 of Schedule 4 of SCA under relevant Facility Agreement and cash

  collateral and/or a counter-guarantee under the Refinancing Facilities

  Agreement up to a maximum aggregate amount to be agreed

  
	

  Derivative Instruments

  	

   

  	

  100% of its Derivative

  Liability up to the maximum Exposure under that Derivative Instrument as set

  out in Schedule 3 of SCA

  	

   

  	

  100% of its Derivative

  Liability up to the maximum Exposure under that Derivative Instrument as set

  out in Schedule 3 of the SCA

  	

   

  	

  Derivative Deposit as per

  the SCA up to a maximum aggregate amount for all Derivative Instruments not

  exceeding Euros 40,000,000

  	

   

  	

  Derivative Deposit as per

  the SCA up to a maximum aggregate amount for all Derivative Instruments not

  exceeding the amount secured at the Term Date

  

 

 

	

  Non-Affected Facilities (as

  per Schedule 3 of the SCA)

  	

   

  	

  Pre-term

  date(11)

  Exposure secured by shared

  security

  	

   

  	

  Post-term

  date

  Exposure

  secured by

  shared security

  	

   

  	

  Pre-term

  date

  Non-shared security

  	

   

  	

  Post-term

  date

  Non-shared security

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  High Yield Bonds

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  USPP

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

   

  
	

  EMTN

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Credit facilities (committed and uncommitted bank lines and overdrafts)

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Securitisations

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Sales of receivables/forfeiting

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Operating leases

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Letters of credit/banking guarantees

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  
	

  Forfeiting programmes

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  	

   

  	

  None

  

 

(11)                            Dilution percentage Secured Debt to Shared

Security approximately 91/98%.

 

(12)                            Schedule 3 will be updated to reflect agreed

commercial terms and Exposure as reduced.

 

 

SIGNATORIES

 

	

  The

  Company

  
	

   

  
	

  RHODIA S.A.

  
	

   

  
	

  By:

  
	

   

  
	

  Original

  Obligors

  
	

   

  
	

  RHODIA POLIAMIDA E

  ESPECIALIDADES LTDA.

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA HENGCHANG

  (ZHANGJIAGANG) SPECIALTY CHEMICAL CO. LTD

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA WUXI PHARMACEUTICAL

  CO. LTD

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA S.A.

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA JAPAN LTD

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA FOSFATADOS DE MEXICO

  S.A. DE CV

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA CAPITAL MARKET (ex

  RHONE-POULENC (SUISSE) S.A.)

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA ENGINEERING

  PLASTICS Co, Ltd

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA INC

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA ACETOW VENEZUELA

  C.A.

  
	

   

  
	

  By:

  
	

   

  
	

  RHODIA CHINA CO. LIMITED

  
	

   

  
	

  By:

  
	

   

  
	

  The

  Guarantor

  
	

   

  
	

  RHODIA S.A.

  
	

   

  
	

  By:

  
	

   

  
	

  Original

  Lenders

  
	

   

  
	

  BNP PARIBAS

  
	

   

  
	

  By:

  
	

   

  
	

  CRÉDIT LYONNAIS S.A.

  
	

   

  
	

  By:

  
	

   

  
	

  CRÉDIT INDUSTRIEL ET

  COMMERCIAL

  
	

   

  
	

  By:

  
	

   

  
	

  BANQUE DE L’ECONOMIE DU

  COMMERCE ET DE LA MONETIQUE

  
	

   

  
	

  By:

  
	

   

  
	

  CSFB

  
	

   

  
	

  By:

  
	

   

  
	

  WACHOVIA

  
	

   

  
	

  By:

  
	

   

  
	

  BAYERISCHE LANDESBANK

  
	

   

  
	

  By:

  
	

   

  
	

  SOCIÉTÉ GÉNÉRALE

  
	

   

  
	

  By:

  
	

   

  
	

  THE BANK OF

  TOKYO-MITSUBISHI, LTD.

  
	

   

  
	

  By:

  
	

   

  
	

  FORTIS BANK N.V.

  
	

   

  
	

  By:

  
	

   

  
	

  NATEXIS BANQUES POPULAIRES

  
	

   

  
	

  By:

  
	

   

  
	

  CCF

  
	

   

  
	

  By:

  
	

   

  
	

  STANDARD CHARTERED BANK

  
	

   

  
	

  By:

  
	

   

  
	

  THE ROYAL BANK OF SCOTLAND

  PLC

  
	

   

  
	

  By:

  
	

   

  
	

  BANCO BILBAO VIZCAYA

  ARGENTARIA

  
	

   

  
	

  By:

  
	

   

  
	

  JPMORGAN CHASE BANK

  
	

   

  
	

  By:

  
	

   

  
	

  ING BANK N.V.

  
	

   

  
	

  By:

  
	

   

  
	

  UNICREDITO ITALIANO

  
	

   

  
	

  By:

  
	

   

  
	

  UFJ NEDERLAND N.V.

  
	

   

  
	

  By:

  
	

   

  
	

  UFJ BANK LIMITED

  
	

   

  
	

  By:

  
	

   

  
	

  CITIBANK INTERNATIONAL PLC

  
	

   

  
	

  By:

  
	

   

  
	

  LANDES GIROZENTRALE

  
	

   

  
	

  By:

  
	

   

  
	

  COMERICA

  
	

   

  
	

  By:

  
	

   

  
	

  Intercreditor

  Agent

  
	

   

  
	

  BNP PARIBAS

  
	

   

  
	

  By:

  
	

   

  
	

  Agents

  under Affected Facilities

  
	

   

  
	

  BNP PARIBAS

  
	

   

  
	

  By:EXHIBIT 10.2

 

CONFORMED
COPY

 

Certain sections of this
document have been the subject of a confidential treatment request.  Any text that has been removed pursuant to
Rhodia’s confidential treatment request has been separately submitted to the U.S.
Securities and Exchange Commission. 
Deleted text herein is marked [“***”]. 
Where several pages of text have been deleted the number of pages
removed has been noted.

 

AGREEMENT

 

DATED 31ST MARCH, 2004

€638,497,197

MULTICURRENCY REVOLVING CREDIT AND GUARANTEE FACILITY

and

€119,224,721

MULTICURRENCY REVOLVING CREDIT FACILITY

FOR

RHODIA

AND CERTAIN OF ITS SUBSIDIARIES

ARRANGED BY

BNP PARIBAS

CRÉDIT AGRICOLE INDOSUEZ S.A.

and

HSBC CCF

as Arrangers

with

BNP PARIBAS

as Facility Agent

and

BNP PARIBAS

as Security Agent

 

THIS AGREEMENT IS ENTERED INTO WITH
THE BENEFIT OF AND SUBJECT TO THE TERMS OF THE

INTERCREDITOR AND SHARING DEED AND THE SUBORDINATION AGREEMENT

 

ALLEN & OVERY

 

AVOCATS À LA COUR

 

SOLICITORS

 

PARIS

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
   

  	
  Interpretation

  	
   

  
	
  2.

  	
   

  	
   

  	
  Facility

  	
   

  
	
  3.

  	
   

  	
   

  	
  Purpose

  	
   

  
	
  4.

  	
   

  	
   

  	
  Conditions
  Precedent

  	
   

  
	
  5.

  	
   

  	
   

  	
  Loan Utilisations

  	
   

  
	
  6.

  	
   

  	
   

  	
  Guarantee
  Utilisations

  	
   

  
	
  7.

  	
   

  	
   

  	
  Optional
  Currencies

  	
   

  
	
  8.

  	
   

  	
   

  	
  Repayment

  	
   

  
	
  9.

  	
   

  	
   

  	
  Prepayment and Cancellation

  	
   

  
	
  10.

  	
   

  	
   

  	
  Interest and Guarantee Fees

  	
   

  
	
  11.

  	
   

  	
   

  	
  Terms

  	
   

  
	
  12.

  	
   

  	
   

  	
  Market
  Disruption

  	
   

  
	
  13.

  	
   

  	
   

  	
  Taxes

  	
   

  
	
  14.

  	
   

  	
   

  	
  Increased
  Costs

  	
   

  
	
  15.

  	
   

  	
   

  	
  Mitigation

  	
   

  
	
  16.

  	
   

  	
   

  	
  Payments

  	
   

  
	
  17.

  	
   

  	
   

  	
  Guarantee
  and Indemnity

  	
   

  
	
  18.

  	
   

  	
   

  	
  Representations and
  Warranties

  	
   

  
	
  19.

  	
   

  	
   

  	
  Information
  Covenants

  	
   

  
	
  20.

  	
   

  	
   

  	
  Financial
  Covenants

  	
   

  
	
  21.

  	
   

  	
   

  	
  General
  Covenants

  	
   

  
	
  22.

  	
   

  	
   

  	
  Default

  	
   

  
	
  23.

  	
   

  	
   

  	
  The Administrative Parties

  	
   

  
	
  24.

  	
   

  	
   

  	
  Evidence and Calculations

  	
   

  
	
  25.

  	
   

  	
   

  	
  Fees

  	
   

  
	
  26.

  	
   

  	
   

  	
  Indemnities and Break Costs

  	
   

  
	
  27.

  	
   

  	
   

  	
  Expenses

  	
   

  
	
  28.

  	
   

  	
   

  	
  Amendments
  and Waivers

  	
   

  
	
  29.

  	
   

  	
   

  	
  Changes
  to the Parties

  	
   

  
	
  30.

  	
   

  	
   

  	
  Disclosure of Information

  	
   

  
	
  31.

  	
   

  	
   

  	
  Set-off

  	
   

  
	
  32.

  	
   

  	
   

  	
  Pro Rata
  Sharing

  	
   

  
	
  33.

  	
   

  	
   

  	
  Severability

  	
   

  
	
  34.

  	
   

  	
   

  	
  Counterparts

  	
   

  
	
  35.

  	
   

  	
   

  	
  Notices

  	
   

  
	
  36.

  	
   

  	
   

  	
  Language

  	
   

  
	
  37.

  	
   

  	
   

  	
  Governing Law

  	
   

  
	
  38.

  	
   

  	
   

  	
  Enforcement

  	
   

  

 

 

	
  Schedule

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
   

  	
  Original Parties

  	
   

  
	
   

  	
   

  	
   

  	
  Part 1 Original Borrowers

  	
   

  
	
   

  	
   

  	
   

  	
  Part 2 Issuing Banks

  	
   

  
	
   

  	
   

  	
   

  	
  Part 3 Lenders—Medium-Term Facility

  	
   

  
	
   

  	
   

  	
   

  	
  Part 4 Lenders—Short-Term Facility

  	
   

  
	
  2.

  	
   

  	
   

  	
  Conditions precedent documents

  	
   

  
	
   

  	
   

  	
   

  	
  Part 1 To be delivered before the First
  Request

  	
   

  
	
   

  	
   

  	
   

  	
  Part 2 For an Additional Borrower

  	
   

  
	
  3.

  	
   

  	
   

  	
  Form of Request

  	
   

  
	
  4.

  	
   

  	
   

  	
  Form of Guarantee

  	
   

  
	
  5.

  	
   

  	
   

  	
  Calculation of the Mandatory Cost

  	
   

  
	
  6.

  	
   

  	
   

  	
  Forms of Transfer Certificate

  	
   

  
	
   

  	
   

  	
   

  	
  Part 1 Form for Transfers by Assignment

  	
   

  
	
   

  	
   

  	
   

  	
  Part 2 Form for Transfers by Novation

  	
   

  
	
  7.

  	
   

  	
   

  	
  Existing Security and Existing
  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
  Part 1 Existing Security Interest

  	
   

  
	
   

  	
   

  	
   

  	
  Part 2 Existing Indebtedness

  	
   

  
	
  8.

  	
   

  	
   

  	
  Form of Compliance Certificate

  	
   

  
	
  9.

  	
   

  	
   

  	
  Form of Accession Agreement

  	
   

  
	
  10.

  	
   

  	
   

  	
  Form of Resignation Request

  	
   

  
	
  11.

  	
   

  	
   

  	
  Form of Taux Effectif Global Letter

  	
   

  
	
  12.

  	
   

  	
   

  	
  ERISA Events

  	
   

  
	
  13.

  	
   

  	
   

  	
  Intra-Group Loans

  	
   

  
	
   

  	
   

  	
   

  	
  Part 1 Intercompany
  Loans / Borrowings between Rhodia S.A. and its Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
  Part 2 Intercompany
  Loans / Borrowings between the Rhodia Subsidiaries

  	
   

  
	
  14.

  	
   

  	
   

  	
  Business Plan including Liquidity
  Analysis

  	
   

  
	
   

  	
   

  	
   

  	
  Part 1 Rhodia Business Plan After Disposals

  	
   

  
	
   

  	
   

  	
   

  	
  Part 2 Liquidity Analysis

  	
   

  
	
  15.

  	
   

  	
   

  	
  Supplemental Secured Assets

  	
   

  
	
  16.

  	
   

  	
   

  	
  Agreed Lease Amendment Principles

  	
   

  
	
   

  	
   

  	
   

  	
  Part 1 Original Agreed Lease Amendment
  Principles

  	
   

  
	
   

  	
   

  	
   

  	
  Part 2 Supplemental Lease Amendment
  Principles

  	
   

  
	
  17.

  	
   

  	
   

  	
  Signatories

  	
   

  
						

 

 

THIS AGREEMENT is
dated 31st March, 2004

 

BETWEEN:

 

(1)                                  RHODIA,
a company incorporated as a French société anonyme under the Laws of France,
the registered office of which is at 26 quai Alphonse le Gallo, 92100 Boulogne
Billancourt, registered with the Trade and Companies Registry (Registre du
Commerce et des Sociétés) of Nanterre under the number 352-170-161
as borrower and guarantor (the Company);

 

(2)                                  THE
SUBSIDIARIES OF THE COMPANY listed in Schedule 1 (Original Parties) as
original borrowers (in this capacity the Original Borrowers);

 

(3)                                  BNP
PARIBAS, CRÉDIT AGRICOLE INDOSUEZ S.A. and HSBC CCF as arrangers (in
this capacity the Arrangers);

 

(4)                                  THE
FINANCIAL INSTITUTIONS listed in Schedule 1 (Original Parties) as
original lenders (the Original Lenders);

 

(5)                                  BNP
PARIBAS as facility agent (in this capacity the Facility Agent); and

 

(6)                                  BNP
PARIBAS as security agent (in this capacity the Security Agent).

 

IT IS AGREED as
follows: 

 

1.                                      INTERPRETATION

 

1.1                               Definitions

 

In this Agreement:

 

Accession Agreement
means a letter, substantially in the form of Schedule 9 (Form of Accession
Agreement), with such amendments as the Facility Agent may approve or
reasonably require.

 

Additional Borrower
means a member of the Group which becomes a Borrower after the date of this
Agreement.

 

Administrative Party
means an Arranger, the Facility Agent, the Security Agent or an Issuing Bank.

 

Agreed Affected Lease Facilities
means each of the SG and Cranbury US synthetic leases and the leasing “Chase”
referred to under the heading “Operating leases” in Schedule 7 Part 2
(Existing Indebtedness) in each case once and only to the extent amended in
accordance with the Agreed Lease Amendment Principles and provided as a
documentary condition precedent under Schedule 2 (Conditions precedent
documents) in a form and substance satisfactory to the Majority Lenders. For
the avoidance of doubt the definition of Agreed Affected Lease Facilities shall
not have any effect under this Agreement until and only to the extent that the
amendments referred to in this definition have been made in accordance with
this definition and are in full force and effect.

 

Affiliate means a
Subsidiary or a Holding Company of a person or any other Subsidiary of that
Holding Company.

 

Agreed Lease Amendment Principles
means the original agreed lease amendment principles set out in Part 1 of
Schedule 16 (Original Agreed Lease Amendment Principles) as supplemented
by the supplemental lease amendment principles set out in Part 2 of
Schedule 16 (Supplemental Lease Amendment Principles) together with any
other amendments satisfactory to the Majority Lenders.

 

Agreed Security Principles
has the meaning set out in the Secured Co-ordination Agreement as supplemented
from time to time and in any event including the supplemental secured assets
set out in Schedule 15 (Supplemental Secured Assets).

 

1

 

Asset Disposal Programme
means together:

 

(a)                                  an
asset disposal programme generating net cash proceeds of not less than
€400,000,000 by no later than 30th June, 2004 (of which no less than
€200,000,000 is actually received by the Company in cash by that date without
condition, with the balance to be received in cash, subject only to
satisfaction of conditions outside the control of the buyer or seller (or their
respective affiliates) under binding sale and purchase agreements entered into
prior to 30th June, 2004, and where such balance is actually received in cash
in any event on or before 31st December, 2004); and

 

(b)                                 an
additional asset disposal programme generating additional net cash proceeds of
not less than €700,000,000 minus the net cash proceeds generated from the first
disposal programme referred to in paragraph (a) above, to be received by the
Company by no later than 31st December, 2004,

 

in each case where net cash
proceeds means cash proceeds net of any Taxes payable in the
financial year in which the disposal is effected or proceeds received and
reasonable third party costs and expenses attributable to the disposal, receipt
or recovery, as set out in reasonable detail in a certificate provided to the
Facility Agent by the chief financial officer of the Company.

 

Availability Period
means the Medium-Term Facility Availability Period or the Short-Term Facility Availability
Period.

 

Borrower means the
Company, an Original Borrower or an Additional Borrower.

 

Break Costs means
the amount (if any) which a Lender is entitled to receive under Clause 26.3
(Break Costs) as compensation if any part of a Loan or overdue amount is repaid
or prepaid.

 

Business Day means
a day (other than a Saturday or a Sunday) on which banks are open for general
business in London, New York and Paris and:

 

(a)                                  in
relation to a transaction involving a currency other than euro, the principal
financial centre of the country of that currency; or

 

(b)                                 in
relation to a payment date for euro, a TARGET Day.

 

Business Plan means
the business plan to be provided by the Company to the Lenders in the form set
out in Schedule 14 (Business Plan including Liquidity Analysis) as updated
on a quarterly basis to include the Liquidity Analysis.

 

Chargor means each
member of the Group granting a Security Interest under a Security Document.

 

Code means the
United States Internal Revenue Code of 1986, as amended and the rules and
regulations promulgated thereunder from time to time in effect.

 

Commitment means a
Medium-Term Facility Commitment or a Short-Term Facility Commitment.

 

Compliance Certificate
means a certificate substantially in the form of Schedule 8 (Form of
Compliance Certificate) setting out, among other things, calculations of the
financial covenants.

 

Consolidated Net Income
means the consolidated net income of the Company and its Subsidiaries for any
period, adjusted by:

 

(a)                                  deducting
any amount attributable to minority interests;

 

(b)                                 excluding
any gain or loss, together with any related provision for taxes on such gain
(but not loss), realised in connection with: (i) any sale of assets; or (ii)
the disposal of any securities by the Company or any of its Subsidiaries; and

 

2

 

(c)                                  excluding
the termination or discharge of any Financial Indebtedness of the Company or
any of its Subsidiaries.

 

Co-ordinating Committee
means the committee appointed in accordance with a co-ordinating committee
letter dated 30th November, 2003.

 

Dangerous Substance
means any radioactive emissions, noise and any natural or artificial substance
(in whatever form) the generation, transportation, storage, treatment or
disposal of which (whether alone or in combination with any other substance)
gives rise to a risk of causing harm to man or any other living organism or
damaging the Environment or public health or welfare including (without
limitation) any controlled, special, hazardous, toxic, radioactive or dangerous
waste.

 

Default means:

 

(a)                                  an
Event of Default; or

 

(b)                                 an
event or circumstance which with the expiry of a grace period, the giving of
notice, the making of any determination of materiality or fulfilment of any other
applicable condition (or any combination of the foregoing) is likely to
constitute an Event of Default.

 

Derivative Deposit
has the meaning given to that term in the Secured Co-ordination Agreement.

 

Derivative Instrument
means any swap, cap, collar, floor, option, forward or any other agreement or
arrangement in the nature of a derivative instrument.

 

Dollars means the
lawful currency for the time being of the United States of America.

 

Environment means
all, or any of, the following media: the air (including air within other
natural or man-made structures above or below ground), water (including,
without limitation, ground and surface water) and land (including, without
limitation, surface and sub-surface soil).

 

Environmental Law
means all laws (including, without limitation, common law), regulations,
directives, codes of practice, circulars, guidance notes and the like having
legal effect concerning the protection of human health, the Environment, the
conditions of the workplace or the generation, transportation, storage,
treatment or disposal of Dangerous Substances.

 

Environmental Licence
means any permit, licence, authorisation, consent or other approval required by
any Environmental Law.

 

ERISA means the
United States Employee Retirement Income Security Act of 1974 and the rules and
regulations promulgated thereunder from time to time in effect.

 

ERISA Affiliate
means any trade or business (whether or not incorporated) that is treated as a
single employer together with the Company under section 414 of the Code.

 

ERISA Event means
any event specified in Schedule 12 (ERISA Events).

 

EURIBOR means for a
Term of any Loan or overdue amount in euro:

 

(a)                                  the
applicable Screen Rate; or

 

(b)                                 if
no Screen Rate is available for that Term of that Loan or overdue amount, the
arithmetic mean (rounded upward to four decimal places) of the rates as
supplied to the Facility Agent at its request quoted by the Reference Banks to
leading banks in the European interbank market,

 

as of 11.00 a.m.
(Brussels time) on the Rate Fixing Day for the offering of deposits in euro for
a period comparable to that Term.

 

3

 

EURIBOR Reference Banks
means, subject to Clause 29.8 (Changes to the Reference Banks), BNP Paribas,
Crédit Agricole Indosuez and CCF acting through their Paris branches and The
Royal Bank of Scotland plc.

 

euro means the
single currency of the Participating Member States.

 

Event of Default
means an event specified as such in Clause 22 (Default).

 

Existing Facility
means each of the facilities made available to the Group and the Relevant
Entities under the Facility Agreements, brief details of which are listed in
Schedule 7 Part 2 (Existing Indebtedness).

 

Existing Security Interests
means any Security Interest granted by any member of the Group over any asset
of that member in respect of any Existing Facility as listed in Schedule 7
Part 1 (Existing Security).

 

Facility means the
Medium-Term Facility or the Short-Term Facility.

 

Facility Agent’s Spot Rate of
Exchange has the meaning given in Clause 7.1 (General).

 

Facility Agreement
means any agreement or instrument constituting or evidencing any facility for
financial accommodation for a member of the Group or a Relevant Entity.

 

Facility Office
means the office(s) notified by a Lender to the Facility Agent:

 

(a)                                  on
or before the date it becomes a Lender; or

 

(b)                                 by
not less than five Business Days’ notice,

 

as the office(s) through
which it will perform its obligations under this Agreement.

 

Fee Letter means
any letter entered into by reference to this Agreement between one or more
Administrative Parties and the Company setting out the amount of certain fees
referred to in this Agreement.

 

Final Maturity Date
means in relation to the Medium-Term Facility the Medium-Term Facility Final
Maturity Date and in relation to the Short-Term Facility the Short-Term
Facility Final Maturity Date.

 

Finance Document
means:

 

(a)                                  this
Agreement;

 

(b)                                 a
Security Document;

 

(c)                                  the
Intercreditor and Sharing Deed;

 

(d)                                 the
Subordination Agreement;

 

(e)                                  a
Guarantee;

 

(f)                                    a
Fee Letter;

 

(g)                                 a
Transfer Certificate;

 

(h)                                 an
Accession Agreement; or

 

(i)                                     any
other document designated as such by the Facility Agent and the Company.

 

Finance Party means
a Lender or an Administrative Party.

 

Financial Indebtedness
means any indebtedness for or in respect of:

 

(a)                                  moneys
borrowed and debit balances at banks;

 

4

 

(b)                                 any
debenture, bond, note, loan stock or other similar instrument;

 

(c)                                  any
acceptance credit;

 

(d)                                 receivables
sold or discounted (otherwise than on a non-recourse basis) including, for the
avoidance of doubt, Securitisation Programmes and sale of receivables under
Existing Facilities;

 

(e)                                  the
acquisition cost of any asset to the extent payable before or after its
acquisition or possession by the party liable where the advance or deferred
payment is arranged primarily as a method of raising finance or financing the
acquisition of that asset;

 

(f)                                    any
lease (including, without limitation, a capital lease and each lease listed in
Schedule 7 Part 2 (Existing Indebtedness)) entered into primarily as a
method of raising finance or financing the acquisition of the asset leased;

 

(g)                                 any
Derivative Instrument (and the amount of Financial Indebtedness in relation to
such Derivative Instrument shall be the “marked to market” value of that
instrument and shall take into account the operation of any netting provisions
contained within that Derivative Instrument);

 

(h)                                 any
amount outstanding or any amount raised through any other transaction
(including any forward sale or purchase agreement) which has the commercial
effect of a borrowing or raising of money;

 

(i)                                     any
counter-indemnity obligation in respect of any guarantee, indemnity, bond,
letter of credit or any other instrument issued by a bank or financial
institution; or

 

(j)                                     any
guarantee, indemnity or similar assurance against financial loss of any person
in respect of any indebtedness incurred under paragraphs (a) to (i) above.

 

Group means the
Company and its Subsidiaries.

 

Group Structure Chart
means the chart describing the capital and share ownership of all the members
of the Group delivered as a condition precedent under Schedule 2
(Conditions precedent documents).

 

Guarantee means any
guarantee issued or to be issued by the Issuing Banks under Tranche A (a Tranche A
Guarantee) or Tranche B (a Tranche B Guarantee) up to a maximum
aggregate amount of €100,000,000 at the request of the Borrowers under this
Agreement.

 

Guarantee Account Party
means a member of the Group (other than a Borrower) on whose account a
Guarantee is requested or issued from time to time at the request of the
Company.

 

Guarantee Facility
means the guarantee facility referred to in Clause 2.1(a) (Facility).

 

High Yield Bonds
means the 7.625% US dollar denominated senior notes due 2010, the 8.0% euro
denominated senior notes due 2010, the 8.875% US dollar denominated senior
notes due 2011 and the 9.25% euro denominated senior notes due 2011.

 

Holding Company of
any other person, means a company in respect of which that other person is a
Subsidiary.

 

IBOR means LIBOR,
PIBOR or EURIBOR.

 

Increased Cost
means:

 

(a)                                  an
additional or increased cost;

 

(b)                                 a
reduction in the rate of return from a Facility or on its overall capital; or

 

(c)                                  a
reduction of an amount due and payable under any Finance Document,

 

which is incurred or
suffered by a Finance Party or any of its Affiliates but only to the extent
attributable to that Finance Party having entered into any Finance Document or
funding or performing its obligations under any Finance Document.

 

5

 

Inter-Company Creditor
means each member of the Group, other than the Company, which is the creditor
of an Intra-Group Loan.

 

Intercreditor and Sharing Deed
means the intercreditor and sharing deed to be entered into between, among
others, the Obligors and the Finance Parties (referred to in the Secured
Co-ordination Agreement as the Security Sharing Agreement).

 

Intra-Group Loan
means any intra-group loan made by a member of the Group not forming part of
the Group’s cash pooling arrangements or, if it is included in the Group’s cash
pooling arrangements, is a loan with a maturity of fifteen days or greater.

 

Issuing Bank means
each Lender specified in Part 2 of Schedule 1 (Original Parties) and any
other Lender from time to time designated an Issuing Bank in accordance with
Clause 6.16(g).

 

Joint Venture Entity
means any unconsolidated subsidiary of the Company or joint venture entity in
which the Company owns or effectively controls, directly or indirectly at least
twenty per cent. (20%) of the capital and voting rights.

 

Lender means:

 

(a)                                  an
Original Lender; or

 

(b)                                 any
person which becomes a Lender after the date of this Agreement.

 

LIBOR means for a
Term of any Loan or overdue amount:

 

(a)                                  the
applicable Screen Rate; or

 

(b)                                 if
no Screen Rate is available for the relevant currency or Term of that Loan or
overdue amount, the arithmetic mean (rounded upward to four decimal places) of
the rates, as supplied to the Facility Agent at its request, quoted by the
Reference Banks to leading banks in the London interbank market,

 

as of 11.00 a.m. on the
Rate Fixing Day for the offering of deposits in the currency of that Loan or
overdue amount for a period comparable to that Term.

 

LIBOR Reference Banks
means, subject to Clause 29.8 (Changes to the Reference Banks), BNP Paribas,
Crédit Agricole Indosuez, HSBC Bank Plc and The Royal Bank of Scotland plc
acting through their London branches.

 

Limited Recourse means
any of:

 

(a)                                  customary
recourse by any provider of Financial Indebtedness incurred by a member of the
Group in connection with securitisation of receivables pursuant to the existing
terms of an existing Securitisation Programme to the extent such recourse may
be incurred by that member of the Group in accordance with such terms on the
date of this Agreement; or

 

(b)                                 recourse
by any provider of Financial Indebtedness incurred by a member of the Group in
connection with the refinancing or replacement of a Securitisation Programme by
a securitisation programme on substantially the same terms as the existing
terms of that Securitisation Programme; or

 

(c)                                  recourse
by any provider of Financial Indebtedness incurred by a member of the Group in
connection with securitisation of receivables pursuant to a securitisation
programme to:

 

(i)                                     the
receivables;

 

6

 

(ii)                                  the
debtor in respect of the Financial Indebtedness for the purpose of enforcing a
Security Interest against it, so long as:

 

(A)                              the
Security Interest is permitted pursuant to Clause 21.4 (Negative pledge);

 

(B)                                the
recourse is limited to recoveries in respect of the receivables; and

 

(C)                                the
provider of the Financial Indebtedness does not have the right to take any step
towards the debtor’s winding up or dissolution or the appointment of a
liquidator, administrator, administrative receiver or similar officer in
respect of it or its assets (other than the receivables);

 

(iii)                               another
member of the Group, so long as:

 

(A)                              the
recourse is limited to its shareholding or other interest in a company or
entity incorporated solely for the purpose of owning and whose assets consist
solely of the receivables; and

 

(B)                                the
provider of the Financial Indebtedness does not have the right to take any step
towards the debtor’s winding-up or dissolution or the appointment of a
liquidator, administrator, administrative receiver or similar officer in
respect of it or its assets (other than its shareholding or other interest in
the debtor); or

 

(iv)                              a
member of the Group under any form of assurance, undertaking or support
provided that:

 

(A)                              recourse
is limited to a claim for damages (not being liquidated damages or damages
required to be calculated in a specified way) for breach of a warranty or
undertaking;

 

(B)                                any
claim for breach of warranty relates to the receivables and is subject to an
aggregate maximum limit not exceeding the net proceeds received from the
securitisation of the receivables;

 

(C)                                any
claim for breach of undertaking relates to the management and/or collection of
the receivables; and

 

(D)                               so
long as the obligation is not in any way a guarantee, indemnity or other
assurance against financial loss or an obligation to ensure compliance by
another with a financial ratio or other test of financial condition.

 

Liquidity Analysis
means the liquidity analysis forming part of the Business Plan and in the form
set out in Part 2 of Schedule 14 (Business Plan including Liquidity
Analysis) as updated from time to time by the Company and submitted to the
Lenders pursuant to Clauses 19.1(g)(i) or 19.1(g)(ii).

 

Liquidity Headroom
means €350,000,000.

 

Loan means, unless
otherwise stated in this Agreement, the principal amount of each borrowing
under this Agreement or the principal amount outstanding of that borrowing.

 

Majority Lenders
means, at any time, Lenders:

 

(a)                                  whose
share in the outstanding Utilisations and whose undrawn Commitments then
aggregate 66 2/3 per cent. or more of the aggregate of all the outstanding
Utilisations and the undrawn Commitments of all the Lenders;

 

(b)                                 if
there is no Utilisation then outstanding, whose undrawn Commitments then
aggregate 66 2/3 per cent. or more of the Total Commitments; or

 

7

 

(c)                                  if
there is no Utilisation then outstanding and the Total Commitments have been
reduced to zero, whose Commitments aggregated 66 2/3 per cent. or more of the
Total Commitments immediately before the reduction.

 

Mandatory Cost
means the cost of complying with certain regulatory requirements, expressed as
a percentage rate per annum and calculated by the Facility Agent under
Schedule 5 (Calculation of the Mandatory Cost).

 

Margin means 3.05
per cent. per annum.

 

Material Adverse Effect
means a material adverse effect on or circumstance affecting:

 

(a)                                  the
business, assets or financial condition of the Company, a Material Subsidiary
or the Group (taken as a whole); or

 

(b)                                 the
ability of any Obligor (other than an Additional Borrower) or Material
Subsidiary to perform or comply with any of its payment obligations or to
comply with or perform any other material obligation in each case under any
Finance Document; or

 

(c)                                  the
ability of any Additional Borrower to perform or comply with any of its payment
obligations (after taking into account any realisation of the guarantee under
Clause 17 (Guarantee and Indemnity)) or to comply with any other material
obligation in each case under any Finance Document; or

 

(d)                                 the
validity or enforceability of any Finance Document or the effectiveness of any
Security Interest over the assets purported to be covered by any Security
Document, or the value of the security (taken as a whole).

 

Material Subsidiary
means, at any time, a Subsidiary of the Company whose net assets or EBITDA then
equal or exceed five per cent. (5%) of the total net assets or EBITDA of the
Group.

 

For this purpose:

 

(a)                                  the
net assets or EBITDA of a Subsidiary of the Company will be determined from its
financial statements (consolidated if it has Subsidiaries) upon which the
latest audited annual or unaudited semi-annual financial statements of the
Group have been based;

 

(b)                                 if
a Subsidiary of the Company becomes a member of the Group after the date on
which the latest audited financial statements of the Group have been prepared,
the net assets or EBITDA of that Subsidiary will be determined from its latest
financial statements;

 

(c)                                  the
total net assets or EBITDA of the Group will be determined from its latest
audited annual or unaudited semi-annual financial statements, adjusted (where
appropriate) to reflect the net assets or EBITDA of any company or business
subsequently acquired or disposed of; and

 

(d)                                 if
a Material Subsidiary disposes of all or substantially all of its assets to
another Subsidiary of the Company, it will immediately cease to be a Material
Subsidiary and the other Subsidiary (if it is not already) will immediately
become a Material Subsidiary; the subsequent financial statements of those
Subsidiaries and the Group will be used to determine whether those Subsidiaries
are Material Subsidiaries or not.

 

If there is a dispute as
to whether or not a company is a Material Subsidiary under paragraph (b) of
this definition, a certificate of the auditors of the Company will be, in the
absence of manifest error, conclusive.

 

For the purposes of the
above, each reference to EBITDA is to EBITDA as defined in Clause 20.1
(Financial covenant definitions).

 

Maturity Date means
the last day of the Term of a Utilisation.

 

8

 

Medium-Term Facility
means the multicurrency revolving credit and guarantee facility referred to in
Clause 2.1(a) (Facility) divided into Tranche A and Tranche B.

 

Medium-Term Facility Availability
Period means the period from and including the date of this
Agreement to and including the date falling one month prior to the Medium-Term
Facility Final Maturity Date.

 

Medium-Term Facility Commitment
means:

 

(a)                                  for
an Original Lender:

 

(i)                                     the
amount set opposite its name in Part 3 (Lenders—Medium-Term Facility) of
Schedule 1 (Original Parties) under the heading “Tranche A” (Tranche A
Medium-Term Facility Commitment) and the amount of any other Tranche
A Medium-Term Facility Commitment it acquires; and

 

(ii)                                  the
amount set opposite its name in Part 3 (Lenders—Medium-Term Facility) of
Schedule 1 (Original Parties) under the heading “Tranche B” (Tranche B
Medium-Term Facility Commitment) and the amount of any other Tranche
B Medium-Term Facility Commitment it acquires; and

 

(b)                                 for
any other Lender, the amount of any Tranche A Medium-Term Facility Commitment
or Tranche B Medium-Term Facility Commitment it acquires,

 

to the extent not
cancelled, transferred or reduced under this Agreement (collectively, the Total
Medium-Term Facility Commitments).

 

Medium-Term Facility Final Maturity
Date means 31st March, 2006.

 

Medium-Term Facility Lenders
means the Lenders referred to in Part 3 of Schedule 1 (Original Parties).

 

Medium-Term Facility Loan
means the principal amount of a borrowing by a Borrower under Tranche A (a Tranche A
Loan) and Tranche B (a Tranche B Loan) of the Medium-Term
Facility, or the principal amount outstanding of that borrowing.

 

Multiemployer Plan
means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
which the Company or any ERISA Affiliate is making or accruing (or is required
to make or accrue) an obligation to make contributions, or has within any of
the preceding five plan years made or accrued (or was required to make or
accrue) an obligation to make contributions.

 

Obligor means the
Company, a Borrower, a Chargor, an Inter-Company Creditor or a Guarantee
Account Party.

 

Optional Currency
means Dollars, Sterling, Swiss Francs and Yen.

 

Original Business Plan
means the Business Plan as validated by Ernst & Young on 26th January,
2004.

 

Original Financial Statements
means the audited consolidated financial statements of each Borrower for the
year ended 31st December, 2003.

 

Original Obligor
means the Company, an Original Borrower, a Chargor or an Inter-Company Creditor.

 

Participating Member State
means a member state of the European Communities that adopts or has adopted the
euro as its lawful currency under the legislation of the European Community for
Economic Monetary Union.

 

Party means a party
to this Agreement.

 

9

 

PBGC means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.

 

Permitted Reorganisation
means an amalgamation, demerger, merger or reconstruction involving a Borrower:

 

(a)                                  full
details of which are provided by the Company to the Facility Agent in a timely
manner prior to its taking place; and

 

(b)                                 where
the surviving entity (whether or not it is the Company) has a long-term
corporate credit rating from Standard & Poor’s of BBB-or higher or an
equivalent rating from Moody’s; and

 

(c)                                  in
relation to which the Facility Agent has first received legal opinions from
external counsel addressed to the Finance Parties, in form and substance
satisfactory to the Facility Agent, confirming:

 

(i)                                     either
that the Company shall be the surviving entity and that notwithstanding such
amalgamation, demerger or reconstruction, the Finance Documents shall remain at
all times the legal, valid and binding obligations of the Company, enforceable
in accordance with their terms; or

 

(ii)                                  that
upon such amalgamation, demerger or reconstruction the surviving entity (not
being the Company) will accede to the obligations of the Company under the
Finance Documents in full and that the Finance Documents shall be the legal,
valid and binding obligations of the surviving entity, enforceable in
accordance with their terms; and

 

(d)                                 in
the case of the Company, where the surviving entity remains parent of the Group
and in the case of any other Borrower, where the surviving entity remains a
Subsidiary of the Group; and

 

(e)                                  where
the place of incorporation and registered head office of the surviving entity
in the case of the Company is within the European Union at the date of this
Agreement and in the case of Rhodia Inc. is within the United States of America
or the European Union at the date of this Agreement,

 

and to which the Facility
Agent (acting on the instructions of the Requisite Lenders) has given its prior
written consent.

 

PIBOR means for a
Term of any Loan or overdue amount in Sterling the arithmetic mean (rounded
upward to four decimal places) of the rates as supplied to the Facility Agent
at its request quoted by the Reference Banks to leading banks in the Paris
interbank market at or about 11.00 a.m. (Paris time) on the Rate Fixing Day for
the offering of deposits in Sterling for a period comparable to that Term.

 

PIBOR Reference Banks
means, subject to Clause 29.8 (Changes to the Reference Banks), BNP Paribas,
Crédit Agricole Indosuez and CCF acting through their Paris branches.

 

Plan means a Single
Employer Plan or a Multiemployer Plan.

 

Prepayment Event
means any of:

 

(a)                                  the
entry by a Borrower into any amalgamation, demerger, merger or reconstruction
which is not a Permitted Reorganisation (including, without limitation, an
amalgamation, demerger, merger or reconstruction resulting from or constituted
by a Borrower making a disposal or disposals of assets, or a Material
Subsidiary making a disposal or disposals of assets to a Borrower in each case
under Clause 21.6 (Disposals) but excluding, for the avoidance of doubt, assets
disposed of under Clause 21.6(b)(iv)); or

 

10

 

(b)                                 any
person, or group of persons acting in concert, acquires control of more than
fifty per cent. (50%) of the issued and fully paid up share capital or voting
rights in a Borrower; or

 

(c)                                  the
direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation permitted by and made in accordance with the
provisions of this Agreement) in one or a series of related transactions, of
all or substantially all of the properties or assets or business of a Borrower
and its Subsidiaries taken as a whole; or

 

(d)                                 the
adoption of a plan relating to the liquidation or dissolution of a Borrower,
without prejudice to the provisions of Clauses 22.7(b) and 22.7(d).

 

Pro Rata Share
means:

 

(a)                                  for
the purpose of determining a Lender’s share in a Utilisation under a Tranche of
the Medium-Term Facility, the proportion which its Commitment bears to the
Total Commitments in respect of that Tranche of that Facility;

 

(b)                                 for
the purpose of determining a Lender’s share in any other Utilisation of a
Facility, the proportion which its Commitment bears to the Total Commitments in
respect of that Facility; and

 

(c)                                  for
any other purpose on a particular date:

 

(i)                                     the
proportion which a Lender’s share of the Utilisations (if any) bears to all the
Utilisations under that Facility;

 

(ii)                                  if
there is no Utilisation outstanding on that date, the proportion which its
Commitment bears to the Total Commitments on that date in respect of that
Facility; or

 

(iii)                               if
the Total Commitments have been cancelled, the proportion which its Commitment
bore to the Total Commitments in respect of that Facility immediately before
being cancelled.

 

Rate Fixing Day
means:

 

(a)                                  the
first day of a Term for a Loan denominated in domestic Sterling;

 

(b)                                 the
second Business Day before the first day of a Term for a Loan denominated in
any other currency (other than euro); or

 

(c)                                  the
second TARGET Day before the first day of a Term for a Loan denominated in
euro,

 

or such other day as the
Facility Agent determines is generally treated as the rate fixing day by market
practice in the relevant interbank market.

 

Reference Banks
means:

 

(a)                                  in
relation to a Loan or an amount outstanding in euro, the EURIBOR Reference
Banks;

 

(b)                                 in
relation to a Loan or an amount outstanding in Dollars, domestic Sterling,
Swiss Francs or Yen, the LIBOR Reference Banks; and

 

(c)                                  in
relation to a Loan or an amount outstanding in euro Sterling, the PIBOR
Reference Banks.

 

Refinanced Facilities
means each of the Existing Facilities identified in Schedule 7 Part 2
(Existing Indebtedness) designated as “Refinanced Facilities”.

 

Relevant Entity
means a Joint Venture Entity in relation to the Financial Indebtedness of
which, a member of the Group has given a guarantee, indemnity or similar
assurance against financial loss.

 

Repeating Representations
means the representations which are deemed to be repeated under Clause 18.26
(Times for making representations).

 

11

 

Request means a
request for a Utilisation, substantially in the form of Schedule 3 (Form
of Request).

 

Requisite Lenders
means, at any time, Lenders:

 

(a)                                  whose
shares in the Utilisations then outstanding aggregate more than fifty per cent.
(50%) of all the Utilisations then outstanding; or

 

(b)                                 if
there are no Utilisations then outstanding, whose Commitments then aggregate
more than fifty per cent. (50%) of the Total Commitments; or

 

(c)                                  if
there are no Utilisations then outstanding and the Total Commitments have been
reduced to nil, whose Commitments aggregated more than fifty per cent. (50%) of
the Total Commitments immediately before the reduction.

 

Rights Issue means
any equity rights issue by the Company generating net cash proceeds of no less
than €300,000,000 to be launched by the Company by no later than 15th May, 2004
where net cash proceeds means cash proceeds net of any Taxes and third party
costs and expenses attributable to the issue as set out in reasonable detail in
a certificate provided to the Facility Agent by the chief financial officer of
the Company.

 

Rollover Utilisation
means one or more Utilisations:

 

(a)                                  to
be made on the same day that a maturing Utilisation is due to be repaid;

 

(b)                                 the
aggregate amount of which is equal to or less than the maturing Utilisation;

 

(c)                                  in
the same currency as the maturing Utilisation; and

 

(d)                                 to
be made to the same Borrower for the purpose of refinancing a maturing Loan or
extending a Guarantee pursuant to 6.5 (Extension of a Guarantee).

 

Screen Rate means:

 

(a)                                  for
LIBOR, the British Bankers Association Interest Settlement Rate; and

 

(b)                                 for
EURIBOR, the percentage rate per annum determined by the Banking Federation of
the European Union,

 

for the relevant currency
and Term displayed on the appropriate page of the Telerate screen selected by
the Facility Agent. If the relevant page is replaced or the service ceases to
be available, the Facility Agent (after consultation with the Company and the
Lenders) may specify another page or service displaying the appropriate rate.

 

Second Amendment Agreement
means the second amendment agreement to the USPP.

 

Secured Co-ordination Agreement
means the secured co-ordination agreement entered into on 23rd December, 2003
between, amongst others, the Company, the Intercreditor Agent (as defined
therein) and the Lenders (as defined therein).

 

Secured Intra-Group Loan
means a loan made by the Company to a member of the Group which is, or in
accordance with the Agreed Security Principles is intended to be, directly and/or
indirectly subject to a Security Document granted in favour of the Company.

 

Securitisation Programmes
means the securitisation programmes arranged by the Company from time to time,
being at the date of this Agreement with each of BNP Paribas, Wachovia, ABN
Amro and CIC/Crédit Mutuel.

 

Security Agent
means the security agent appointed or to be appointed pursuant to the
Intercreditor and Sharing Deed.

 

12

 

Security Document
means any document entered into by a member of the Group evidencing or
conferring a Security Interest over any of its assets in favour of the Company
with respect to its obligations under a Secured Intra-Group Loan or in favour
of the Finance Parties with respect to its obligations under the Finance
Documents.

 

Security Interest
means any:

 

(a)                                  hypothèque,
nantissement, privilège, cession de créance à titre de garantie par bordereau
Dailly, gage-espèces or any sûreté réelle or droit de rétention;

 

(b)                                 mortgage,
pledge, lien, charge, assignment by way of security or for the purpose of
providing security, hypothecation, right in security, security interest or (to
the extent applicable) trust arrangement for the purpose of providing security;
and

 

(c)                                  other
security agreement or other arrangement having the effect of providing security
(including, without limitation, cash collateral and the deposit of moneys or
property with a person with the primary intention of affording such person a
right of set-off).

 

Short-Term Facility
means the multicurrency revolving credit facility referred to in Clause 2.1(b)
(Facility).

 

Short-Term Facility Availability
Period means the period from and including the date of this
Agreement to and including 31st July, 2004 or, if a valid Request for a Loan in
respect of the Short-Term Facility is made before 31st July, 2004, 1st
December, 2004.

 

Short-Term Facility Commitment
means:

 

(a)                                  for
an Original Lender, the amount set opposite its name in Part 4
(Lenders—Short-Term Facility) of Schedule 1 (Original Parties) and the
amount of any other Short-Term Facility Commitment it acquires; and

 

(b)                                 for
any other Lender, the amount of any Short-Term Facility Commitment it acquires,

 

to the extent not
cancelled, transferred or reduced under this Agreement (collectively the Total
Short-Term Facility Commitments).

 

Short-Term Facility Final Maturity
Date means 31st July, 2004 or, if a valid Request for a Loan
in respect of the Short-Term Facility is made before 31st July, 2004, 31st
December, 2004.

 

Short-Term Facility Lenders
means the Lenders referred to in Part 4 of Schedule 1 (Original Parties).

 

Short-Term Facility Loan
means the principal amount of a borrowing by the Company under the Short-Term
Facility, or the principal amount outstanding of that borrowing.

 

Single Employer Plan
means a single employer plan, as defined in Section 4001(a)(15) of ERISA,
that is subject to Title IV of ERISA and that (a) is maintained for the
employees of a Borrower or any ERISA Affiliate or which is subject to the
minimum funding requirements of Section 302 of ERISA or Section 412
of the Code or (b) was so maintained and in respect of which the Company or any
ERISA Affiliate could reasonably be expected to have liability under
Section 4069 of ERISA in the event such plan has been or were to be terminated.

 

Subordination Agreement
means the subordination agreement to be entered into on or around the date of
this Agreement between, among others, the Company, the Intercreditor Agent (as
defined therein), the Senior Creditors (as defined therein) and the
Inter-Company Creditors.

 

Subsidiary means an
entity of which a person has direct or indirect control or owns directly or
indirectly more than fifty per cent. (50%) of the share capital or similar
right of ownership.

 

13

 

TARGET Day means a
day on which the Trans-European Automated Real-time Gross Settlement Express
Transfer payment system is open for the settlement of payments in euro.

 

Tax means any tax,
levy, impost, duty or other charge or withholding of a similar nature
(including any related penalty or interest).

 

Tax Deduction means
a deduction or withholding for or on account of Tax from a payment under a
Finance Document.

 

Tax Payment means a
payment made by an Obligor to a Finance Party in any way relating to a Tax
Deduction or under any indemnity given by that Obligor in respect of Tax under
any Finance Document.

 

Term means each
period determined under this Agreement:

 

(a)                                  by
reference to which interest on a Loan or an overdue amount is calculated; or

 

(b)                                 for
which the Issuing Banks may be under a liability under a Guarantee.

 

Term Date has the
meaning given to that term in the Secured Co-ordination Agreement.

 

Total Commitments
means the aggregate of the Commitments of all the Lenders under each and any
Facility.

 

Tranche A means
that tranche of the Medium-Term Facility referred to in Clause 2.2 (Division of
the Medium-Term Facility) in a amount of up to €532,522,724.

 

Tranche A Lender
means a Lender with a Tranche A Medium-Term Facility Commitment.

 

Tranche B means
that tranche of the Medium-Term Facility referred to in Clause 2.2 (Division of
the Medium-Term Facility) in a amount of up to €105,974,473.

 

Tranche B Lender
means a Lender with a Tranche B Medium-Term Facility Commitment.

 

Tranche B Majority Lenders
means, at any time, the Tranche B Lenders:

 

(a)                                  whose
share in the outstanding Utilisations and whose undrawn Commitments under
Tranche B then aggregate 66 2/3 per cent. or more of the aggregate of all the
outstanding Utilisations and the undrawn Commitments of all the Tranche B
Lenders;

 

(b)                                 if
there is no Utilisation then outstanding under Tranche B, whose undrawn
Commitments then aggregate 66 2/3 per cent. or more of the Total Commitments
under Tranche B; or

 

(c)                                  if
there is no Utilisation then outstanding under Tranche B and the Total
Commitments under Tranche B have been reduced to zero, whose Commitments
aggregated 66 2/3 per cent. or more of the Total Commitments under Tranche B
immediately before the reduction.

 

Transaction Document
means:

 

(a)                                  a
Finance Document;

 

(b)                                 any
underwriting or subscription agreements (or other contractual arrangements
having a similar effect) entered into in relation to the Rights Issue;

 

(c)                                  any
sale and purchase agreements (or other contractual arrangements having a
similar effect) entered into in relation to the Asset Disposal Programme; or

 

(d)                                 any
other document designated as such in writing by the Company and the Facility
Agent.

 

14

 

Transfer Certificate
means:

 

(a)                                  for
a transfer by assignment, a certificate, substantially in the form of Part 1 of
Schedule 6 (Form of Transfer Certificate); and

 

(b)                                 for
a transfer by novation, a certificate, substantially in the form of Part 2 of
Schedule 6 (Form of Transfer Certificate),

 

in each case with such
amendments as the Facility Agent may approve or reasonably require or any other
form agreed between the Facility Agent and the Company.

 

U.K. means the
United Kingdom of Great Britain and Northern Ireland.

 

USPP means the US$
215,000,000 note purchase agreement and US$ 75,000,000 note purchase agreement
each dated 30th July, 2002, as amended.

 

Utilisation means:

 

(a)                                  for
Loans, all Loans made or to be made; or

 

(b)                                 for
Guarantees, all the Guarantees issued or to be issued,

 

following the giving by
the relevant Borrower of a Request for those Loans or Guarantees.

 

Utilisation Date
means each date on which a Facility is utilised.

 

Withdrawal Liability
has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

 

1.2                               Construction

 

(a)                                  The
following definitions have the meanings given to them in Clause 20 (Financial
Covenants):

 

(i)                                     Adjusted
EBITDAR;

 

(ii)                                  Consolidated
Net Indebtedness;

 

(iii)                               Consolidated
Net Worth;

 

(iv)                              EBITDA;

 

(v)                                 Operating
Income;

 

(vi)                              Depreciation
and Amortisation of Assets;

 

(vii)                           EBITDAR;

 

(viii)                        Net
Financial Expenses;

 

(ix)                                Interest
Expenses;

 

(x)                                   Interest
Income;

 

(xi)                                Ratio
Period; and

 

(xii)                             Testing
Date.

 

(b)                                 In
this Agreement, unless the contrary intention appears, a reference to:

 

(i)                                     acting
in concert has the meaning given to it in Article L.233-10 of the
French Code
de Commerce;

 

(ii)                                  documents
being in an agreed form means documents (A) in a form previously agreed in
writing by or on behalf of the Facility Agent and the Company, or (B) in a form
substantially as 

 

15

 

set out in any
Schedule to any Finance Document, or (C) (if not falling within (A) or (B)
above) in form and substance satisfactory to the Facility Agent (acting on the
instructions of the Lenders);

 

(iii)                               an amendment
includes a supplement, novation, restatement or re-enactment and amended
will be construed accordingly;

 

(iv)                              assets
includes present and future properties, revenues and rights of every
description;

 

(v)                                 an
authorisation
includes an authorisation, consent, approval, resolution, licence, exemption,
filing, registration or notarisation;

 

(vi)                              control
means the power to direct the management and policies of an entity, whether
through the ownership of voting capital, by contract or otherwise and/or has
the meaning give to it in Article L.233-3 of the French Code de
Commerce;

 

(vii)                           disposal
means a sale, transfer, grant, lease or other disposal, whether voluntary or
involuntary including, without limitation, a capital contribution and dispose
will be construed accordingly;

 

(viii)                        indebtedness
includes any obligation (whether incurred as principal or as surety) for the
payment or repayment of money;

 

(ix)                                a person
includes any individual, company, corporation, unincorporated association or
body (including a partnership, trust, joint venture or consortium), government,
state, agency, organisation or other entity whether or not having separate
legal personality;

 

(x)                                   a
regulation
includes any regulation, rule, official directive, request or guideline
(whether or not having the force of law but, if not having the force of law,
being of a type with which any person to which it applies is accustomed to
comply) of any governmental, intra-governmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or organisation;

 

(xi)                                the
equivalent
in other currencies or like terms, unless otherwise agreed or the
context otherwise requires, means in relation to any amount expressed to be
denominated in a currency other than euro, the equivalent thereof in euro
converted at the Facility Agent’s Spot Rate of Exchange for the notional purchase
of euro with the currency concerned in the Paris foreign exchange market at or
about 11.00 a.m. on the day on which any such calculation falls to be made;

 

(xii)                             a
currency is a reference to the lawful currency for the time being of the
relevant country;

 

(xiii)                          a
Default being outstanding means that it has not been remedied or waived;

 

(xiv)                         a
provision of law is a reference to that provision as extended, applied, amended
or re-enacted and includes any subordinate legislation;

 

(xv)                            a
Clause or a Schedule is a reference to a clause of, or a Schedule to,
this Agreement;

 

(xvi)                         a Party
or any other person includes its successors in title, permitted assigns and
permitted transferees;

 

(xvii)                      a Finance
Document, Transaction Document or another document is a reference to that
Finance Document, Transaction Document or other document as amended; and

 

(xviii)                   a time of day
is a reference to Paris time; and

 

(xix)                           for the
purposes of Clause 18.25 (United States laws) and Clause 21.25 (United States
laws) Federal
Power Act means the United States Federal Power Act of 1920, as
amended, holding
company, affiliate and subsidiary company have the meanings given
to them in the PUHCA, investment company and controlled have the meanings
given to them in the United States 

 

16

 

Investment Company Act of
1940, as amended, public utility has the meaning given to it
in the Federal Power Act and PUHCA means The Limited States Public
Utility Holding Company Act of 1935, as amended.

 

(c)                                  Unless
the contrary intention appears, a reference to a month or months is a reference to a
period starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month or the calendar month in which it
is to end, except that:

 

(i)                                     if
the numerically corresponding day is not a Business Day, the period will end on
the next Business Day in that month (if there is one) or the preceding Business
Day (if there is not);

 

(ii)                                  if
there is no numerically corresponding day in that month, that period will end
on the last Business Day in that month; and

 

(iii)                               notwithstanding
sub-paragraph (i) above, a period which commences on the last Business Day of a
month will end on the last Business Day in the next month or the calendar month
in which it is to end, as appropriate.

 

(d)                                 Unless
expressly provided to the contrary in a Finance Document, a person who is not a
party to a Finance Document may not enforce any of its terms under the
Contracts (Rights of Third Parties) Act 1999 and, notwithstanding any term of
any Finance Document, no consent of any third party is required for any
variation (including any release or compromise of any liability) or termination
of that Finance Document.

 

(e)                                  Unless
the contrary intention appears:

 

(i)                                     a
reference to a Party will not include that Party if it has ceased to be a Party
under this Agreement;

 

(ii)                                  a
word or expression used in any other Finance Document or in any notice given in
connection with any Finance Document has the same meaning in that Finance
Document or notice as in this Agreement; and

 

(iii)                               any
obligation of an Obligor under the Finance Documents which is not a payment
obligation remains in force for so long as any payment obligation of an Obligor
is or may be outstanding under the Finance Documents.

 

(f)                                    The
headings in this Agreement do not affect its interpretation.

 

1.3                               Intercreditor
and Sharing Deed and Subordination Agreement  This Agreement is to be entered into with the benefit of and
subject to the Intercreditor and Sharing Deed and the Subordination Agreement. 

 

2.                                      FACILITY

 

2.1                               Facility  Subject to the terms of this Agreement, the
Lenders make available to the Borrowers the following facilities:

 

(a)                                  a
multicurrency revolving loan and guarantee facility under which the Medium-Term
Lenders shall make Medium-Term Facility Loans and issue Guarantees in euro or
in Optional Currencies up to in an aggregate amount equal to the Total
Commitments under the Medium-Term Facility; and

 

(b)                                 a
multicurrency revolving loan facility under which the Short-Term Lenders shall
make Short-Term Facility Loans in euro or in Optional Currencies to the Company
up to in an aggregate amount equal to the Total Commitments under the
Short-Term Facility.

 

17

 

2.2                               Division
of the Medium-Term Facility

 

(a)                                  The
Medium-Term Facility shall be divided into two parts designated Tranche A and
Tranche B respectively.

 

(b)                                 Only
the Tranche A Lenders shall be obliged to make Utilisations under Tranche A of the
Medium-Term Facility and only the Tranche B Lenders shall be obliged to make
Utilisations under Tranche B of the Medium-Term Facility.

 

(c)                                  Rhodia
Inc. may request Loans under Tranche A until the USPP is prepaid and cancelled
in full but in any event not later than 30th June, 2004 in a maximum euro
Amount not to exceed €25,000,000 and in each case for a Term of no longer than
one month.

 

(d)                                 Only
Rhodia Inc. may request Utilisations under Tranche B of the Medium-Term
Facility.

 

2.3                               Facility
limits

 

(a)                                  The
aggregate amount of all outstanding Loans and Guarantees shall not, at any
time, exceed the Total Commitments at that time.

 

(b)                                 The
aggregate amount of a Lender’s participation in all outstanding Medium-Term
Facility Loans and its liability in respect of all outstanding Guarantees
issued by the relevant Issuing Bank under the relevant Tranche shall not, at
any time, exceed its Medium-Term Facility Commitment under that Tranche.

 

(c)                                  The
aggregate amount of a Lender’s participation in all outstanding Short-Term
Facility Loans shall not, at any time, exceed its Short-Term Facility
Commitment.

 

(d)                                 The
maximum aggregate amount of all outstanding and/or requested Guarantees shall
not, at any time, exceed €100,000,000.

 

2.4                               Nature
of a Finance Party’s rights and obligations

 

Unless otherwise agreed
by all the Finance Parties:

 

(a)                                  the
obligations of a Finance Party under the Finance Documents are several;

 

(b)                                 failure
by a Finance Party to perform its obligations does not affect the obligations
of any other Party under the Finance Documents;

 

(c)                                  no
Finance Party is responsible for the obligations of any other Finance Party
under the Finance Documents;

 

(d)                                 the
rights of a Finance Party under the Finance Documents are separate and
independent rights;

 

(e)                                  a
Finance Party may, except as otherwise stated in the Finance Documents,
separately enforce those rights; and

 

(f)                                    a
debt arising under the Finance Documents to a Finance Party is a separate and
independent debt. 

 

3.                                      PURPOSE

 

3.1                               Loans

 

(a)                                  Each
Medium-Term Facility Loan must be used first for refinancing the Refinanced
Facilities in full and thereafter for general corporate, working capital and
financing purposes.

 

(b)                                 Each
Short-Term Facility Loan must be used for general corporate or working capital
purposes only.

 

18

 

3.2                               Guarantees

 

Each Guarantee must be
used for general corporate purposes only.

 

3.3                               Illegality

 

Each Borrower undertakes
that no Utilisation requested by it shall be used in any way which would be
illegal under any provisions of law applicable to the relevant Borrower or
cause the invalidity or unenforceability of any Finance Document under any
applicable law and in particular, applicable financial assistance rules.

 

3.4                               No
obligation to monitor

 

No Finance Party is bound
to monitor or verify the utilisation of the Facility. 

 

4.                                      CONDITIONS PRECEDENT

 

4.1                               Conditions
precedent documents

 

A Request may not be
given until the Facility Agent has notified the Company and the Lenders that it
has received all of the documents and evidence set out in Part 1 of
Schedule 2 (Conditions precedent documents) in form and substance
satisfactory to the Facility Agent. The Facility Agent must give this
notification to the Company and the Lenders promptly upon being so satisfied.

 

4.2                               Further
conditions precedent—All Facilities

 

The obligations of each
Lender to participate in any Utilisation are subject to the further conditions
precedent that on both the date of the Request and the Utilisation Date for
that Utilisation:

 

(a)                                  the
Repeating Representations are correct in all respects;

 

(b)                                 no
Default is outstanding or would result from the Utilisation;

 

(c)                                  without
prejudice to the generality of paragraph (b) above, no event has occurred which
in the reasonable opinion of the Majority Lenders is likely to have a Material
Adverse Effect; and

 

(d)                                 the
projections set out in the most recent Business Plan show that the Company will
be in compliance with Clause 20 (Financial Covenants) on the then next Testing
Date.

 

4.3                               Further
conditions precedent—Medium-Term Facility

 

(a)                                  The
obligations of each Lender to participate in any Medium-Term Facility Loan are
subject to the further condition precedent that immediately following the
Utilisation Date for that Loan, the Utilisations outstanding under each Tranche
will be pro
rata to the Total Commitments of each Tranche.

 

(b)                                 Where
the difference in the aggregate amount of Guarantees issued or to be issued on
the Utilisation Date under each Tranche of the Medium-Term Facility is greater
than €2,500,000 (or its equivalent in other currencies), the obligations of
each Lender to participate in any Guarantee are subject to the further
condition precedent that immediately following the Utilisation Date for that
Guarantee, the Utilisations outstanding under each Tranche will be pro rata
to the Total Commitments of each Tranche.

 

4.4                               Further
conditions precedent—Short-Term Facility

 

The obligations of each
Lender to participate in any Short-Term Facility Loan are subject to the
further conditions precedent that on both the date of the Request and the
Utilisation Date for that Loan:

 

(a)                                  the
Medium-Term Facility is fully drawn; and

 

19

 

(b)                                 the
actual liquidity (including intra-month cash balances) of the Company for the
month in which the proposed Utilisation Date falls set out in the latest
Liquidity Analysis (the Actual Liquidity) is less than the
Liquidity Headroom; and

 

(c)                                  the
aggregate amount outstanding under the Short-Term Facility is, or will be on
the Utilisation Date, no greater than the difference between the Liquidity
Headroom and the Actual Liquidity.

 

4.5                               Maximum
number

 

Unless the Facility Agent
agrees, a Request may not be given if, as a result, there would be more than
110 Utilisations (of which no more than 10 are Loans and no more than 100 are
Guarantees and of which no more than 5 Guarantees are under Tranche B)
outstanding.

 

5.                                      LOAN UTILISATIONS

 

5.1                               Giving
of Requests

 

(a)                                  A
Borrower may borrow a Loan by giving to the Facility Agent a duly completed
Request.

 

(b)                                 Unless
the Facility Agent otherwise agrees, the latest time for receipt by the
Facility Agent of a duly completed Request is 11.00 a.m. one Business Day
before the Rate Fixing Day for the proposed borrowing.

 

(c)                                  Each
Request is irrevocable.

 

(d)                                 Subject
to paragraph (e) below, only the Company or an Additional Borrower may request
a Loan under Tranche A of the Medium-Term Facility and only Rhodia Inc. may
request a Loan under Tranche B of the Medium-Term Facility.

 

(e)                                  Rhodia
Inc. may request Loans under Tranche A until the USPP is prepaid and cancelled
in full but in any event not later than 30th June, 2004 in a maximum euro
Amount not to exceed €25,000,000 and in each case for a Term of no longer than
one month.

 

(f)                                    Only
the Company may request a Loan under the Short-Term Facility.

 

5.2                               Completion
of Requests

 

A Request for a Loan will
not be regarded as having been duly completed unless:

 

(a)                                  it
specifies the Facility under which that Loan is to be drawn;

 

(b)                                 it
specifies which Tranche of the Facility is to be utilised;

 

(c)                                  it
identifies the Borrower;

 

(d)                                 the
Utilisation Date is a Business Day falling within the Availability Period for
that Facility;

 

(e)                                  the
amount of the Loan requested is:

 

(i)                                     a
minimum amount of €25,000,000 or its equivalent in other currencies in
accordance with Clause 7 (Optional Currencies) and an integral multiple of
5,000,000 units of that currency or, when such amount is aggregated with any
other Loan required to be made at that time pursuant to Clause 4.3 (Further
conditions precedent—Medium-Term Facility), is a minimum amount of €25,000,000
and an integral multiple of 5,000,000 units of that currency;

 

(ii)                                  the
maximum undrawn amount available under that Facility on the proposed Utilisation
Date; or

 

(iii)                               such
other amount as the Facility Agent may agree; and

 

20

 

(f)                                    the
requested currency and Term comply with this Agreement.

 

Only one Medium-Term
Facility Loan may be requested in a Request. Only one Short-Term Facility Loan
may be requested in a Request.

 

5.3                               Advance
of Loan

 

(a)                                  The
Facility Agent must promptly notify each Lender of the details of the requested
Loan and the amount of its share in that Loan.

 

(b)                                 The
amount of each Lender’s share of the Loan will be its Pro Rata Share on the
proposed Utilisation Date.

 

(c)                                  No
Lender is obliged to participate in a Loan under a Facility if, as a result:

 

(i)                                     its
share in the Utilisations under that Facility would exceed its Commitment under
that Facility or, in the case of the Medium-Term Facility, under the relevant
Tranche of that Facility; or

 

(ii)                                  the
Utilisations under a Facility would exceed the Total Commitments under that
Facility or, in the case of the Medium-Term Facility, under the relevant
Tranche of that Facility.

 

(d)                                 Where
a Request is made for a Loan under the Medium-Term Facility:

 

(i)                                     the
Tranche A Loan shall be made available by the Tranche A Lenders only; and

 

(ii)                                  the
Tranche B Loan shall be made available by the Tranche B Lenders only.

 

(e)                                  If
the conditions set out in this Agreement have been met, each Lender must make
its share in the Loan available to the Facility Agent for the relevant Borrower
through its Facility Office on the Utilisation Date.

 

(f)                                    Where
a Borrower makes a request for a Loan for the purpose of repaying any amount
demanded by an Issuing Bank under a Guarantee it has issued pursuant to Clause
6.7 (Demands under the Guarantee), the Facility Agent shall and is hereby
irrevocably authorised to apply such Loan towards that amount on its
Utilisation Date in satisfaction pro tanto of that Borrower’s obligations
in relation to that demand under Clause 6.7(a) and in making that Loan
available to the Facility Agent the Lenders shall have no further obligation to
the Issuing Bank in relation to such demand under Clause 6.7(b). 

 

6.                                      GUARANTEE UTILISATIONS

 

6.1                               Receipt
of Guarantee Requests

 

(a)                                  A
Borrower may request a Guarantee to be issued under the Medium-Term Facility by
giving to the Facility Agent with a copy to the relevant Issuing Bank a duly
completed Request.

 

(b)                                 The
latest time for receipt by the Facility Agent and the relevant Issuing Bank of
a duly completed Request for Guarantees to be issued for a beneficiary with a
nationality or place of incorporation in the United States of America or France
is 11.00 a.m. five Business Days before the Utilisation Date of the Guarantee
or such shorter period as the Facility Agent and the relevant Issuing Bank may
agree. The latest time for receipt by the Facility Agent and the relevant
Issuing Bank of a duly completed Request in respect of Guarantees in respect of
any other nationality or place of incorporation is 11.00 a.m. eight Business
Days before the Utilisation Date of the Guarantee or such shorter period as the
Facility Agent and the relevant Issuing Bank may agree.

 

(c)                                  Each
Request is irrevocable.

 

(d)                                 Only
Rhodia Inc. may request a Guarantee under Tranche B of the Medium-Term
Facility.

 

21

 

6.2                               Giving
of Requests

 

A Request for a Guarantee
will not be regarded as having been duly completed unless:

 

(a)                                  it
specifies that it is for a Guarantee;

 

(b)                                 the
Utilisation Date is a Business Day falling within the Medium-Term Facility
Availability Period;

 

(c)                                  it
identifies the Issuing Bank from the list of Issuing Banks in Part 2 of
Schedule 1 (Original Parties) where (i) in the case of a Request for a
Guarantee under Tranche B the Issuing Bank is CSFB (or its permitted successor)
and (ii) in the case of a Request for a Guarantee under Tranche A the Issuing
Bank is identified according to the governing law for the Guarantee required as
set out in Part 2 of Schedule 1 (Original Parties) and notwithstanding the
governing law required by the Borrower, the relevant Borrower shall use its
best efforts to request a Guarantee from the Issuing Banks pro rata to their maximum
amount of Guarantees set out opposite each of their names in Part 2 of
Schedule 1 (Original Parties) and when making the choice for an Issuing
Bank shall take into account the duration, currency, purpose, beneficiary of
the other Guarantees previously requested and outstanding with a view to
distributing the issue of each Guarantee amongst the Issuing Banks on an equal
and rateable basis;

 

(d)                                 it
identifies the Borrower or, subject to and in accordance with Clause 6.3, the
Guarantee Account Party;

 

(e)                                  it
specifies which Tranche of the Facility is to be utilised;

 

(f)                                    the
amount of the Guarantee requested is:

 

(i)                                     a
minimum aggregate amount of €100,000 or its equivalent in other currencies in
accordance with Clause 7 (Optional Currencies) (and an integral multiple of
1,000 units of the largest currency unit);

 

(ii)                                  the
maximum undrawn amount available under that Tranche of the Facility on the
proposed Utilisation Date; or

 

(iii)                               such
other amount as the Facility Agent may agree;

 

(g)                                 the
issue date of the Guarantee is specified;

 

(h)                                 the
expiry date of the liability of the relevant Issuing Bank under the Guarantee
is specified and falls on or before the date falling one month prior to the
Final Maturity Date and is no sooner than one month from the date of issue;

 

(i)                                     it
identifies the proposed beneficiary and its nationality or place of
incorporation and the nature of the underlying guaranteed obligations;

 

(j)                                     the
requested currency complies with this Agreement;

 

(k)                                  the
form of the Guarantee is attached to the Request and must be substantially in
the form of Schedule 4 (Form of Guarantee) as confirmed by that Issuing
Bank in accordance with Clause 6.4(a) adapted for the relevant governing law or
in such other form as may be agreed between the Facility Agent (acting on the
instructions of the Majority Lenders), that Issuing Bank and the relevant
Borrower; and

 

(l)                                     the
delivery instructions of the Guarantee are specified.

 

Only one Guarantee may be
requested in a Request.

 

22

 

6.3                               Guarantees
issued for the account of a Guarantee Account Party

 

(a)                                  The
Company may request that a Guarantee be issued for the account of a Guarantee
Account Party provided that the Company first uses its best endeavors to
procure that such Guarantee Account Party accedes to this Agreement as an
Additional Borrower prior to 15th May, 2004 or, if later, prior to making that
Request and, in which case, that Additional Borrower shall make that Request
for its own account.

 

(b)                                 If
the Company does request a Guarantee for the account of a Guarantee Account
Party then:

 

(i)                                     the
Company represents to each Finance Party on the date of that Request and the
Utilisation Date for that Guarantee that:

 

(A)                              the
Company is duly authorised by that Guarantee Account Party to make that Request
and that Guarantee Account Party has full knowledge of the terms and conditions
of that Guarantee (including its governing law and, as the case may be, its
autonomous nature); and

 

(B)                                the
Company and that Guarantee Account Party are aware of the legal and commercial
consequences arising from the issue of that Guarantee for the account of the
Guarantee Account Party;

 

(ii)                                  the
obligations of a Lender or an Issuing Bank to participate in any such Guarantee
are subject to the additional condition precedent that the representation
referred to in paragraph (b) (i) is correct in all respects on the date it is
made;

 

(iii)                               no
Finance Party is bound or shall have any duty to verify the matters referred to
in paragraph (b)(i) above; and

 

(iv)                              the
Company will be and shall remain fully and solely liable for all obligations
under the Finance Documents in respect of any such Guarantee, as if the
Guarantee was requested by and issued for the account of the Company as a
Borrower.

 

6.4                               Issue
of Guarantees

 

(a)                                  The
relevant Issuing Bank will promptly notify the Facility Agent whether or not
the form of Guarantee attached to the Request is substantially in the form of
Schedule 4 (Form of Guarantee).

 

(b)                                 The
Facility Agent must promptly notify the relevant Issuing Bank of the details of
the requested Guarantee and the amount of its share of that Guarantee.

 

(c)                                  Following
confirmation from the relevant Issuing Bank that the form of Guarantee attached
to the Request is substantially in the form of Schedule 4 (Form of
Guarantee) in accordance with paragraph (a) above, the Facility Agent must
promptly notify each Lender of the details of the requested Guarantee including
the date on which the Guarantee is issued and the amount of its share of that
Guarantee. The amount of each Lender’s share in a Guarantee will be its Pro
Rata Share on the proposed Utilisation Date.

 

(d)                                 Subject
to the terms of this Agreement the relevant Issuing Bank shall, on the
Utilisation Date specified in the relevant Request, issue a Guarantee in
accordance with that Request. An Issuing Bank will not be required to issue a
Guarantee for an amount greater than the maximum amount set opposite that
Issuing Bank’s name in Part 2 of Schedule 1 (Original Parties), taking
into account any Guarantees issued by the relevant Issuing Bank and outstanding
as at the date of the Request. An Issuing Bank will not be required to issue a
Guarantee through a correspondent bank without that Issuing Bank’s prior
written consent.

 

23

 

(e)                                  No
Issuing Bank is obliged to issue any Guarantee if as a result:

 

(i)                                     a
Lender’s share in the Utilisations would exceed its Commitment under the
relevant Tranche of that Facility;

 

(ii)                                  the
Utilisations would exceed the Total Commitments under the relevant Tranche of
that Facility;

 

(iii)                               the
issue of a Guarantee to a beneficiary would contravene any applicable law or
regulations binding on it or any other Lender; or

 

(iv)                              the
issue of a Guarantee by an Issuing Bank would contravene the internal policy of
such Issuing Bank including in relation to such matters as environmental
matters, the identity and/or nationality of a beneficiary, the governing law or
the purpose of the Guarantee.

 

(f)                                    An
Issuing Bank which has refused to issue a Guarantee in the circumstances
referred to in paragraph (e) above shall notify the Facility Agent and the
Company of the circumstances in reasonable detail.

 

(g)                                 Each
Lender’s liability in respect of a Guarantee shall be governed by Clause 6.7
(Demands under the Guarantee).

 

6.5                               Extension
of a Guarantee

 

(a)                                  A
Borrower may request that a Guarantee issued on its behalf is extended with the
same Issuing Bank by delivery to the Facility Agent and that Issuing Bank of a
notice specifying the new proposed Maturity Date five Business Days before the
Maturity Date of that Guarantee.

 

(b)                                 An
extension request will be treated the same way as a Request except that the
information set out in Clauses 6.2(c), 6.2(d) and 6.2(i) will not be required
to be completed.

 

(c)                                  The
terms of each extended Guarantee will remain the same as before the extension,
except that:

 

(i)                                     its
amount may be reduced; and

 

(ii)                                  its
Maturity Date will be the date specified in the extension request being a date
falling no later than one month prior to the Medium-Term Facility Maturity
Date.

 

(d)                                 If
the conditions set out in this Agreement have been met, the relevant Issuing
Bank must extend the Guarantee in the manner requested.

 

6.6                               Indemnities

 

(a)                                  Each
Borrower hereby undertakes to indemnify and hold harmless on demand each
Issuing Bank, the Facility Agent and each Lender from and against all
liabilities, costs, losses, damages and expenses which that Issuing Bank, the
Facility Agent or Lender may incur or sustain by reason of, or arising in
connection with, or by reference to, the issue of any Guarantee in respect of
such Borrower or the performance by such Borrower of the obligations expressed
to be assumed by such Borrower under this Agreement in connection with the
issue of any Guarantee in respect of such Borrower.

 

(b)                                 Each
Borrower unconditionally and irrevocably:

 

(i)                                     authorises
each Issuing Bank to pay any demand made on it which appears on its face to be
in order and which is made in accordance with the Guarantee issued by it under
or by reference to such Guarantee without carrying out any investigation or
seeking any confirmation from any other person before making such payment or
requiring proof or the agreement of any Obligor that the amounts so demanded or
paid are or were due and notwithstanding that any Obligor or any other person
may dispute the validity of any such request, demand or payment;

 

24

 

(ii)                                  authorises
each Issuing Bank to exercise the rights and powers conferred on it by the
Guarantee issued by such Issuing Bank and confirms that the relevant Issuing
Bank shall deal in documents only and shall not be concerned with the legality
of the claim or any other underlying transaction or any available set-off,
counterclaim or defence of any person;

 

(iii)                               agrees
that each Issuing Bank need not have regard to the sufficiency, accuracy or
genuineness of any demand or any certificate or statement in connection with
any demand or any incapacity of or limitation upon the powers of any person
signing or issuing such demand, certificate or statement which appears on its
face to be in order and agrees that each Issuing Bank shall not be obliged to
enquire as to any such matters and may assume that any such demand, certificate
or statement which appears on its face to be in order is correct and properly
made; and

 

(iv)                              agrees
to reimburse the Issuing Banks, the Facility Agent and the Lenders immediately
on demand all moneys whatsoever paid by the Issuing Banks or the Lenders
respectively as contemplated by sub-paragraph (i) above or Clause 6.7 (Demands
under the Guarantee) below respectively, together with interest from the time
of payment to the date of reimbursement at the rate specified in Clause 10.3
(Interest on overdue amounts).

 

6.7                               Demands
under the Guarantee

 

(a)                                  If
an Issuing Bank receives a demand for payment under a Guarantee it has issued,
it shall notify the relevant Borrower forthwith of:

 

(i)                                     the
amount demanded; and

 

(ii)                                  the
date on which it is payable,

 

and the relevant Borrower
shall forthwith pay to the Facility Agent for the account of that Issuing Bank
the amount demanded and in any event within three Business Days.

 

(b)                                 If
payment in full has not been made by the relevant Borrower to an Issuing Bank
in accordance with paragraph (a) above, such Issuing Bank may make demand
through the Facility Agent on each Medium-Term Facility Lender under the
Tranche under which that Guarantee has been issued for immediate payment to the
Facility Agent for that Issuing Bank (and each Medium-Term Facility Lender
hereby agrees with such Issuing Bank to make payment of sums so demanded of it)
in an amount equal to the proportion of the sum not paid by the relevant
Borrower which that Lender’s Commitment bears to the Total Commitments in each
case under the relevant Tranche of the Medium-Term Facility immediately prior
to such payment.

 

(c)                                  Each
Lender hereby undertakes to indemnify and hold harmless on demand in the
proportion referred to in Clause 6.7(b) each Issuing Bank from and against all
liabilities, costs, losses, damages and expenses which that Issuing Bank may
incur or sustain by reason of, or arising in connection with, or by reference
to, any Guarantee and which has not been paid for by an Obligor except to the
extent that the loss or liability is directly caused by the gross negligence or
wilful misconduct of that Issuing Bank.

 

(d)                                 If
an Issuing Bank has received or receives cash cover from a Borrower payable
under a Guarantee then such Issuing Bank shall forthwith utilise such amount of
cash cover received to repay all amounts due and payable under a Guarantee
before making demand on each of the Medium-Term Facility Lenders in accordance
with paragraph (b) above.

 

(e)                                  The
provisions of Clause 6.6 (Indemnities) shall apply to any Lender which makes a
payment in accordance with paragraphs (b) and (c) above.

 

25

 

6.8                               Default
by Banks

 

(a)                                  If
any Medium-Term Facility Lender (a Defaulting Lender) fails to make any
payment due from it for account of an Issuing Bank under Clause 6.7 (Demands
under the Guarantee) then, until the relevant Issuing Bank has been reimbursed
in respect of that payment in full (but without prejudice to the obligations of
that Defaulting Lender to make that payment):

 

(i)                                     the
Defaulting Lender shall to the fullest extent permitted by applicable law hold
on trust for the relevant Issuing Bank the benefit of any security now or
hereafter created to secure the obligations of the Borrowers under this
Agreement and to which such Defaulting Lender would have been entitled had it
made such payment; and

 

(ii)                                  for
the purposes of determining the constitution of the Majority Lenders the
relevant Issuing Bank shall be treated as having a Medium-Term Facility
Commitment under the relevant Tranche equal to the Medium-Term Facility
Commitment of the Defaulting Lender under the relevant Tranche (in addition to
the Medium-Term Facility Commitment (if any) which the Issuing Bank already had
in its capacity as a Lender) (that Defaulting Lender being treated for such
purpose only as having no Medium-Term Facility Commitment).

 

(b)                                 The
rights conferred upon the Issuing Banks in this Clause 6.8 shall be in addition
to any other rights it may have against a Defaulting Lender.

 

6.9                               Several
obligations

 

The rights and
obligations of each Lender under this Clause 6 are several and separate so
that:

 

(a)                                  failure
by a Lender to carry out its obligations under this Clause 6 shall not release
the other Lenders from their obligations hereunder; and

 

(b)                                 no
Lender shall be liable for the failure of any other Lender to perform its
obligations under this Clause 6.

 

6.10                        Rights
of contribution and subrogation

 

No Obligor shall, by
virtue of any payment made by it or them under this Clause 6 or otherwise, be
subrogated to any rights, security or moneys held or received by the Facility
Agent, the Issuing Banks or any Lender or be entitled at any time to exercise,
claim or have the benefit of any right of contribution or subrogation or
similar right against the Facility Agent or any Lender. All rights of
contribution or similar rights against the Facility Agent and the Lenders in
relation to this Agreement are hereby waived by the Borrowers and each Obligor.

 

6.11                        Waiver
of defences

 

Each Borrower agrees that
its obligations under this Clause 6 shall not be affected by any act, omission,
matter or thing which but for this provision, might operate to release or
otherwise exonerate it from its obligations hereunder, in whole or in part,
including, without limitation and whether or not known to it:

 

(a)                                  any
time or waiver granted to or composition with a Lender, an Issuing Bank, a
beneficiary of any Guarantee or any other person;

 

(b)                                 any
taking, variation, compromise, renewal or release of, or refusal or neglect to
perfect or enforce, any rights, remedies or securities available to an Issuing
Bank, any Lender or any other person or arising under any Guarantee;

 

(c)                                  any
non-presentation or non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full value of any
security;

 

26

 

(d)                                 any
incapacity or lack of power, authority or legal personality of or dissolution
or change in the members or status of any person;

 

(e)                                  any
amendment (however fundamental) of a Finance Document, any Guarantee or other
document or security;

 

(f)                                    any
unenforceability, illegality or invalidity of any obligation of any person
under any Finance Document, any Guarantee or any other document or security;
and

 

(g)                                 any
variation or extension of or increase in liabilities under the Guarantee so
that references in this Agreement to the Guarantee shall include each such
variation, extension and variation.

 

6.12                        Continuing
indemnity

 

This Clause 6 shall be a
continuing guarantee and indemnity, shall extend to the ultimate balance of the
obligations and liabilities of the Borrowers under this Clause 6 and shall
continue in force notwithstanding any intermediate payment in part of such
obligations or liabilities.

 

6.13                        Additional
security

 

The obligations of the
Borrowers under this Clause 6 shall be in addition to and shall not be in any way
prejudiced by any collateral or other security now or hereafter held by any
Finance Party as security or any lien to which any Finance Party may be
entitled.

 

6.14                        Preservation
of rights

 

No invalidity or
unenforceability of all or any part of this Clause 6 shall affect any rights of
indemnity or otherwise which any Finance Party would or may have in the absence
of or in addition to this Clause 6.

 

6.15                        No
amendments

 

Each Borrower agrees that
it will not make, agree to or accept any amendment or variation to the terms of
any issued Guarantee without the prior written consent of the Facility Agent
(acting on the instructions of all the Lenders or, subject to Clause 28
(Amendments and Waivers) the Majority Lenders) and the relevant Issuing Bank,
other than amendments of an immaterial nature as agreed by the relevant Issuing
Bank and the Facility Agent.

 

6.16                        General

 

(a)                                  A
Guarantee is repaid or prepaid if:

 

(i)                                     the
maximum amount payable under the Guarantee is reduced in accordance with its
terms; or

 

(ii)                                  the
relevant Issuing Bank is satisfied that it has no further liability under that
Guarantee.

 

The amount by
which a Guarantee is repaid or prepaid under sub-paragraph (i) above is the
amount of the relevant reduction.

 

(b)                                 The
relevant Issuing Bank shall use its best endeavours to notify the Facility
Agent and the relevant Borrower of the circumstances referred to in paragraph
(a) above immediately on their occurrence.

 

(c)                                  If
a Guarantee or any amount outstanding under a Guarantee is expressed to be immediately
payable, the Borrower that requested the issue of that Guarantee must repay or
prepay that amount immediately.

 

27

 

(d)                                 Cash
cover is provided for a Guarantee by a Borrower if that Borrower pays an amount
in the currency of the Guarantee requested by it to an interest-bearing account
with a Finance Party in Paris or other jurisdiction applicable to the relevant
currency or Finance Party or other jurisdiction with the consent of the
relevant Borrower (such consent not to be unreasonably withheld), in the name
of the Borrower and the following conditions are met:

 

(i)                                     the
account is with the Facility Agent (if, subject as provided below, the cash
cover is to be provided for all the Lenders), the relevant Issuing Bank (if the
cash cover is to be provided solely for that Issuing Bank, in which case the
account will be an internal account of the relevant Issuing Bank in the name of
the relevant Borrower for identification purposes only) or with a Lender (if the
cash cover is to be provided for that Lender);

 

(ii)                                  until
no amount is or may be outstanding under that Guarantee, withdrawals from the
account may only be made to pay a Finance Party amounts due and payable to it
under that Guarantee or this Clause; and

 

(iii)                               the
Borrower has executed a security document including by way of a gage-espèces
or by way of gage de compte d’instruments financiers in favour of the
relevant Issuing Bank, Facility Agent or relevant Lender over that account in
case of an account held in France or other similar form of security in case of
an account held outside France, in each case in a form and substance
satisfactory to the Facility Agent or the relevant Issuing Bank or the relevant
Lender, creating a first ranking security interest over that account.

 

Where cash cover
is to be provided to all the Lenders, a Lender may require its portion of the
cash cover to be paid into its account instead of an account with the Facility
Agent.

 

(e)                                  If
a Borrower provides cash cover to the Facility Agent or the relevant Issuing
Bank the amount so paid shall earn interest or be remunerated by way of an indemnité
d’immobilisation, as the case may be, at the rate agreed in writing
between the Borrower and the Facility Agent and the relevant Issuing Bank from
the Business Day after receipt by the Facility Agent or the relevant Issuing
Bank to the date on which it is applied in payment of a demand under a
Guarantee issued by the relevant Issuing Bank or otherwise withdrawn from the
applicable account in accordance with the terms of this Agreement.

 

(f)                                    The
outstanding
or principal
amount of a Guarantee at any time is the maximum amount that is or may be
payable by the relevant Borrower in respect of that Guarantee at that time.

 

(g)                                 Subject
to Clause 23.17 (Resignation of the Issuing Banks) the Issuing Banks shall be
the Lenders set out in Part 2 of Schedule 1 (Original Parties) and any
other Lender who agrees to act as an Issuing Bank from time to time with the
prior written agreement of the Facility Agent, the Company and the Majority
Lenders and as set out in an updated list of the Issuing Banks in the form of
Part 2 of Schedule 1 (Original Parties) provided to the Company and the
Lenders by the Facility Agent. At any one time there may be no more than six
Issuing Banks.

 

6.17                        Illegality

 

(a)                                  An
Issuing Bank must notify the Company and the Facility Agent promptly if it
becomes aware that it is unlawful in any jurisdiction for that Issuing Bank to
perform any of its obligations under a Finance Document or to have outstanding
any Guarantee.

 

(b)                                 After
notification under paragraph (a) above:

 

(i)                                     the
Company must use its best endeavours to ensure the release of the liability of
the relevant Issuing Bank under each outstanding Guarantee;

 

(ii)                                  failing
this, each Borrower must provide cash cover to the relevant Issuing Bank for
each Guarantee requested by it on the date specified in paragraph (c) below;
and

 

28

 

(iii)                               no
further Guarantee will be issued by the relevant Issuing Bank.

 

(c)                                  The
date for repayment or prepayment of a relevant Issuing Bank’s share in a
Guarantee will be the date specified by the relevant Issuing Bank in the
notification under paragraph (a) above and which must not be earlier than the
last day of any applicable grace period allowed by law. 

 

7.                                      OPTIONAL CURRENCIES

 

7.1                               General

 

In this Clause:

 

euro Amount of a
Utilisation or part of a Utilisation means:

 

(a)                                  if
the Utilisation is denominated in euro, its amount; or

 

(b)                                 if
the Utilisation is a Guarantee denominated in an Optional Currency, its
equivalent in euro calculated on the basis of the Facility Agent’s Spot Rate of
Exchange three Business Days before the Utilisation Date for that Guarantee, as
adjusted below at three monthly intervals; or

 

(c)                                  in
the case of any other Utilisation denominated in an Optional Currency, its
equivalent in euro calculated on the basis of the Facility Agent’s Spot Rate of
Exchange three Business Days before the Utilisation Date for that Utilisation.

 

Facility Agent’s Spot Rate of
Exchange means the Facility Agent’s spot rate of exchange for
the notional purchase of the relevant Optional Currency in the Paris foreign
exchange market with euro at or about 11.00 a.m. on a particular day.

 

domestic Sterling
and euro
Sterling have the meaning given to them below.

 

7.2                               Selection

 

(a)                                  A
Borrower shall select the currency of a Utilisation in the relevant Request.

 

(b)                                 The
currency of each Utilisation must be euro or an Optional Currency.

 

(c)                                  A
Borrower may not choose a currency if as a result the Utilisations would be
denominated at any one time in more than five currencies.

 

(d)                                 The
Facility Agent shall notify each Lender and the Borrower of the currency and
the euro Amount of each Utilisation to be denominated in an Optional Currency,
and the applicable Facility Agent’s Spot Rate of Exchange, promptly after they
are ascertained.

 

(e)                                  The
Facility Agent shall in good faith notify the Borrower of the source or basis
of the Facility Agent’s Spot Rate of Exchange at the same time as it gives the
notification to the Borrower and the Lenders under paragraph (d) above.

 

7.3                               Revocation
of currency

 

If before 9.30 a.m.
(London time in the case of a Utilisation in Dollars, Swiss Francs or Yen) on
any Rate Fixing Day, the Facility Agent receives notice from a Lender that:

 

(a)                                  it
is impracticable for the Lender to fund its participation in the relevant
Utilisation in the relevant Optional Currency during its Term in the ordinary
course of business in the relevant interbank market; and/or

 

(b)                                 the
use of the proposed Optional Currency might contravene any law or regulation,
the Facility Agent shall give notice to the Company and to the Lenders to that
effect before 11.00 a.m. (London time in the case of a Loan in Dollars, Swiss
Francs or Yen) on that day. In this event:

 

(i)                                     the
Company and the Lenders may agree that the drawdown will not be made; or

 

29

 

(ii)                                  in
the absence of agreement and in any other case in respect of a Loan only:

 

(A)                              that
Lender’s participation in the Loan (or, if more than one Lender is similarly
affected, those Lenders’ participations in the Loans) shall be treated as a
separate Loan denominated in euro;

 

(B)                                in
the definition of EURIBOR (insofar as it applies to that
Loan) in Clause 1.1 (Definitions):

 

I.                                         there
shall be substituted for the time “11.00 a.m.” the time “1.00 p.m.”; and

 

II.                                     paragraph
(b) of that definition shall apply.

 

7.4                               Sterling

 

(a)                                  Each
Lender may advance its share in any Loan in Sterling through a Facility Office
either in, or outside, the U.K.

 

(b)                                 If
a Lender advances its share in a Loan in Sterling through a Facility Office in
the U.K., that part of the Loan will be treated as a separate Loan in domestic
Sterling. The remaining part of the Loan will be treated as a
separate Loan in euro Sterling.

 

7.5                               Optional
Currency equivalents

 

The equivalent in euro of
a Utilisation or part of a Utilisation in an Optional Currency for the purposes
of calculating:

 

(a)                                  whether
any limit under this Agreement has been exceeded;

 

(b)                                 the
amount of a Utilisation;

 

(c)                                  the
share of a Lender in a Utilisation;

 

(d)                                 the
amount of any repayment of a Utilisation; or

 

(e)                                  the
undrawn amount of a Lender’s Commitment,

 

is its euro
Amount.

 

7.6                               Guarantees
in Optional Currency

 

(a)                                  If
a Guarantee is denominated in an Optional Currency, the Facility Agent must at
three monthly intervals after the date of this Agreement, recalculate the euro
Amount of that Guarantee by notionally converting the outstanding amount of
that Guarantee into euro on the basis of the Facility Agent’s Spot Rate of
Exchange on the date of calculation.

 

(b)                                 Each
Borrower must, if requested by the Facility Agent within five Business Days of
any calculation under paragraph (a) above, ensure that sufficient Utilisations
are prepaid under the relevant Tranche of the Medium-Term Facility to prevent
the euro Amount of the Utilisations under the relevant Tranche of the
Medium-Term Facility exceeding the Total Commitments under the relevant Tranche
of the Medium-Term facility following any adjustment to a euro Amount under
paragraph (a) above. 

 

8.                                      REPAYMENT

 

8.1                               Repayment
of Loans

 

(a)                                  Each
Borrower must repay each Loan made to it in full on its Maturity Date.

 

(b)                                 Subject
to the other terms of this Agreement, any amounts repaid under paragraph (a)
above may be re-borrowed.

 

30

 

8.2                               Repayment
of Guarantees

 

(a)                                  Each
Guarantee shall be repaid in full on its Maturity Date.

 

(b)                                 Subject
to the other terms of this Agreement, any amounts repaid under paragraph (a)
above may be re-utilised. 

 

9.                                      PREPAYMENT AND CANCELLATION

 

9.1                               Mandatory
prepayment—illegality

 

(a)                                  A
Lender must notify the Company promptly if it becomes aware that it is unlawful
in any jurisdiction for that Lender to perform any of its obligations under a
Finance Document or to fund or maintain its share in any Utilisation.

 

(b)                                 After
notification under paragraph (a) above:

 

(i)                                     each
Borrower must repay or prepay the share of that Lender in each Loan made to it
on the date specified in paragraph (c) below;

 

(ii)                                  the
obligation of that Lender to fund or maintain its share in any Guarantee will
be cancelled provided that the relevant Issuing Bank receives cash cover from
the relevant Borrower for the same amount;

 

(iii)                               the
Commitment of that Lender will be immediately cancelled.

 

(c)                                  The
date for repayment or prepayment of a Lender’s share in a Utilisation will be:

 

(i)                                     the
last day of the current Term of that Utilisation; or

 

(ii)                                  if
earlier, the date specified by the Lender in the notification under paragraph
(a) above and which must not be earlier than the last day of any applicable
grace period allowed by law.

 

9.2                               Mandatory
prepayment—Prepayment Event

 

(a)                                  The
Company will notify the Facility Agent promptly upon the occurrence of a
Prepayment Event. Upon being notified by the Company of a Prepayment Event, the
Facility Agent shall promptly inform each Lender.

 

(b)                                 Upon
and at any time after having received notice of a Prepayment Event from the Facility
Agent, each Lender, acting through the Facility Agent, may serve a notice of
mandatory prepayment and cancellation on the Company and:

 

(i)                                     on
the date of the notice the Commitment of such Lender shall be cancelled; and

 

(ii)                                  on
the date falling 30 Business Days after the date of service of such notice the
relevant Borrower shall prepay all participations of that Lender in the
Utilisations or in the case of a Utilisation by way of a Guarantee, provide
cash cover in an amount equal to that Lender’s participation in that Guarantee,
in each case, issued for the account of or made to it in full together with any
other amounts then due in connection with such participations.

 

(c)                                  If
the Company seeks the consent of the Lenders to a proposed Permitted Reorganisation,
no Lender will unreasonably delay in informing the Facility Agent whether it
consents to such proposed Permitted Reorganisation.

 

9.3                               Mandatory
Prepayment—disposals, equity and capital market issues

 

(a)                                  (i)
Prior to the Term Date, the provisions of clause 7.2 (Disposals, equity and
capital market issues) of the Secured Co-ordination Agreement shall apply
equally in prepayment and/or cancellation of the principal amount of the
Facilities under this Agreement as such provisions apply to a 

 

31

 

prepayment of a
Refinanced Facility (as defined in the Secured Co-ordination Agreement) as if
set out herein in full mutatis mutandis;

 

(ii)                                  prior
to the Term Date, any amount to be applied towards the prepayment and/or
cancellation of the principal amount of the Facilities pursuant to paragraph
(a)(i) above shall be applied first against Commitments under the Short-Term
Facility and second against Commitments under the Medium-Term Facility;

 

(iii)                               on
and after the Term Date this paragraph (a) will cease to apply and the other
provisions of this Clause 9.3 shall apply.

 

(b)                                 Where
a disposal is made by any member of the Group of any asset including a disposal
made pursuant to the Asset Disposal Programme, for which aggregate net disposal
proceeds since the date of the Secured Co-ordination Agreement exceed
€850,000,000 (or its equivalent in other currencies), the Company must and
shall ensure that each Borrower does, promptly on completion of that disposal,
apply in prepayment and/or cancellation of the Facilities an amount equal to
fifty per cent. (50%) of the net disposal proceeds from any disposal which when
aggregated with other such disposal proceeds exceeds €850,000,000 (or its
equivalent in other currencies) in accordance with Clause 9.4 (Mandatory
Prepayment—application of proceeds) below.

 

(c)                                  (i)
The Company must and shall ensure that each Borrower does promptly apply in
prepayment and/or cancellation of the principal amount of the Facilities an
amount equal to twenty-five per cent. (25%) of the net issuance proceeds of any
equity or related rights issue in accordance with Clause 9.4 (Mandatory
Prepayment—application of proceeds) below.

 

(ii)                                  This
paragraph (c) shall not apply in relation to shares issued:

 

(A)                              in
connection with employee share option schemes; or

 

(B)                                to
another member of the Group.

 

(d)                                 The
Company must and shall ensure that each Borrower does promptly upon receipt of
the same by any member of the Group apply in prepayment and/or cancellation of
the Facilities an amount equal to fifty per cent. (50%) of the net issuance
proceeds of any issue of bonds or notes (including convertible bonds or other
equity-linked debt instruments), debt securities (excluding, for the avoidance
of doubt, billets
de trésorie with a tenor of less than one year) or other capital
markets instruments of any kind (whether publicly listed or privately placed)
by any member of the Group in accordance with Clause 9.4 (Mandatory
Prepayment—application of proceeds) below.

 

(e)                                  In
paragraphs (a), (b), (c) and (d) above:

 

net disposal proceeds
means any amount received by a member of the Group as consideration for a
disposal to a person which is not a member of the Group, including the amount
of any intercompany loan repaid to continuing members of the Group and
including any Financial Indebtedness assumed, repaid, or prepaid (whether or
not a voluntary or mandatory prepayment), redeemed, repurchased, purchased,
defeased (whether by way of legal or covenant defeasance) or otherwise reduced
less all Taxes payable in the financial year in which the disposal is effected
or proceeds received and reasonable costs and expenses incurred by members of
the Group in connection with the disposal or receipt as set out in reasonable
detail in a certificate provided by the chief financial officer of the Company;
and

 

net issuance proceeds
means any amount received by any member of the Group less all Taxes and
reasonable costs and expenses incurred by members of the Group in connection
with that receipt.

 

(f)                                    Where
an amount equal to any net proceeds from an Asset Sale (as defined in the High
Yield Bonds) is not or has not been on or prior to constituting Excess Proceeds
(as defined in and for the 

 

32

 

purposes of the High
Yield Bonds) applied by the relevant Borrower in prepayment of Utilisations
under this Agreement, the Company must and shall ensure that each Borrower does
promptly apply in prepayment and/or cancellation of the Facilities an amount
equal to such net proceeds in accordance with Clause 9.4 (Mandatory
Prepayment—application of proceeds) below.

 

(g)                                 Where
an amount of a Secured Intra-Group Loan is recovered or discharged by the
Company, the Company shall forthwith ensure that an amount equal to that
recovery or discharge shall be applied in prepayment and/or cancellation of the
Facilities in accordance with Clause 9.4 (Mandatory Prepayment—application of
proceeds) below.

 

9.4                               Mandatory
Prepayment—application of proceeds

 

(a)                                  Subject
to Clause 9.3(a), amounts to be prepaid under Clause 9.3 (Mandatory
Prepayment—disposals, equity and capital market issues) shall be applied
against each Facility pro rata to the Total Commitments under
each Facility and in accordance with paragraphs (b) and (c) below.

 

(b)                                 Amounts
to be applied pursuant to paragraph (a) above shall be applied against each
Tranche of the Medium-Term Facility pro ratato the aggregate Commitments under
each Tranche and in accordance with paragraph (c) below.

 

(c)                                  Any
and all amounts required to be applied against a Facility or Tranche as the
case may be pursuant to paragraphs (a) or (b) above shall be applied:

 

(i)                                     first,
in prepayment of the Loans outstanding under each Facility or Tranche as the
case may be on a pro rata basis; and

 

(ii)                                  secondly,
in prepayment of the Guarantees outstanding under Tranche A and Tranche B of
the Medium-Term Facility on a pro rata basis; and

 

(iii)                               thirdly,
to the extent that such amounts exceed the aggregate amount of Utilisations
under that Facility or Tranche as the case may be in prepayment and
cancellation of the aggregate Commitments under that Facility or Tranche as the
case may be until cancelled in full.

 

(d)                                 Where
an amount is to be applied under this Clause 9.4 in prepayment of any amount of
a Loan outstanding under a Facility, unless the date on which the payment is to
be made by the Company is the last day of a Term, that amount shall be paid
through the Facility Agent into an interest bearing blocked and secured account
in France including by way of gage-espèces or gage de comptes d’instruments
financiers held with Facility Agent or when appointed the Security
Agent and in the case of a prepayment of any amount of a Guarantee that amount
may be provided by way of cash cover. The Company irrevocably authorises the
Facility Agent to apply any amount deposited with it under this paragraph (d)
towards prepayment of the Facility on the last day of the relevant Term or
earlier at the discretion of the Facility Agent.

 

9.5                               Voluntary
prepayment

 

(a)                                  The
Company may, by giving not less than five Business Days’ prior written notice
to the Facility Agent, prepay (or ensure that a Borrower prepays) any Loan
under each Facility, and in the case of the Medium-Term Facility each Tranche
on a pro
rata basis, at any time in whole or in part.

 

(b)                                 A
prepayment of part of a Loan must be in a minimum amount of €10,000,000 and an
integral multiple of €5,000,000 or, if such Loan is denominated in an Optional
Currency, an integral multiple of 100,000 of the largest currency unit of that
Optional Currency.

 

(c)                                  The
Company’s notice shall specify the euro Amount of the specific Loan to be
prepaid and the proposed date of prepayment.

 

(d)                                 Loans
prepaid under this Clause 9.5 shall be applied against the participations of
the Lenders in the relevant Loans pro rata.

 

33

 

9.6                               Automatic
cancellation

 

The Commitment of each
Lender will be automatically cancelled at the close of business on the last day
of the Availability Period.

 

9.7                               Voluntary
cancellation

 

(a)                                  The
Company may, by giving not less than ten Business Days’ prior written notice to
the Facility Agent, cancel the unutilised amount of the Total Commitments under
a Facility, as the case may be, in whole or in part.

 

(b)                                 Partial
cancellation of the Total Commitments must be in a minimum amount of
€30,000,000 and an integral multiple of €5,000,000.

 

(c)                                  The
Company’s notice shall specify the amount and date of the cancellation.

 

(d)                                 Any
cancellation of the Medium-Term Facility in part will be applied against
Tranche A and Tranche B of the Medium-Term Facility Commitments of each Lender pro rata.

 

9.8                               Involuntary
prepayment and cancellation

 

(a)                                  If
an Obligor is, or will be, required to pay to a Lender a Tax Payment or an
Increased Cost, the Company may, while the requirement continues, give notice
to the Facility Agent requesting prepayment and cancellation in respect of that
Lender.

 

(b)                                 After
notification under paragraph (a) above:

 

(i)                                     each
Borrower must repay or prepay that Lender’s share in each Utilisation made to
it on the date specified in paragraph (c) below; and

 

(ii)                                  the
Commitment of that Lender will be immediately cancelled.

 

(c)                                  The
date for repayment or prepayment of a Lender’s share in a Utilisation will be
the last day of the Term for that Utilisation or, if earlier, the date
specified by the Company in its notification.

 

9.9                               Re-borrowing
of Utilisations

 

Any voluntary prepayment
of a Utilisation may be re-borrowed on the terms of this Agreement. Any
mandatory or involuntary prepayment of a Utilisation may not be re-borrowed and
the corresponding Commitment shall be cancelled.

 

9.10                        Miscellaneous
provisions

 

(a)                                  Any
notice of prepayment and/or cancellation under this Agreement is irrevocable
and must specify the relevant date(s) and the affected Utilisations and
Commitments. The Facility Agent must notify the Lenders promptly of receipt of
any such notice.

 

(b)                                 All
prepayments under this Agreement must be made with accrued interest on the
amount prepaid. No premium or penalty is payable in respect of any prepayment
except for Break Costs.

 

(c)                                  The
Majority Lenders may agree a shorter notice period for a voluntary prepayment
or a voluntary cancellation.

 

(d)                                 No
prepayment or cancellation is allowed except in accordance with the express
terms of this Agreement.

 

(e)                                  No
amount of the Total Commitments cancelled under a Facility may subsequently be
reinstated. 

 

34

 

10.                               INTEREST AND GUARANTEE FEES

 

10.1                        Calculation
of interest

 

The rate of interest on
each Loan for each Term is the percentage rate per annum equal to the aggregate
of the applicable:

 

(a)                                  Margin;

 

(b)                                 EURIBOR
or, in the case of a Loan in an Optional Currency, LIBOR or, in the case of a
Loan in euro-Sterling, PIBOR; and

 

(c)                                  Mandatory
Cost.

 

10.2                        Payment
of interest

 

Except where it is
provided to the contrary in this Agreement, each Borrower must pay accrued
interest on each Loan made to it on the last day of each Term and also, if the
Term is longer than six months, on the dates falling at six-monthly intervals
after the first day of that Term.

 

10.3                        Interest
on overdue amounts

 

(a)                                  If
an Obligor fails to pay any amount payable by it under the Finance Documents,
it must immediately on demand by the Facility Agent pay interest on the overdue
amount from its due date up to the date of actual payment, both before, on and
after judgment.

 

(b)                                 Interest
on an overdue amount is payable at a rate determined by the Facility Agent to
be two per cent. per annum above the rate which would have been payable if the
overdue amount had, during the period of non-payment, constituted a Loan in the
currency of the overdue amount. For this purpose, the Facility Agent may
(acting reasonably):

 

(i)                                     select
successive Terms of any duration of up to three months; and

 

(ii)                                  determine
the appropriate Rate Fixing Day for that Term.

 

(c)                                  Notwithstanding
paragraph (b) above, if the overdue amount is a principal amount of a Loan and
becomes due and payable prior to the last day of its current Term, then:

 

(i)                                     the
first Term for that overdue amount will be the unexpired portion of that Term;
and

 

(ii)                                  the
rate of interest on the overdue amount for that first Term will be two per
cent. per annum above the rate then payable on that Loan.

 

After the expiry of the
first Term for that overdue amount, the rate on the overdue amount will be
calculated in accordance with paragraph (b) above.

 

(d)                                 Interest
(if unpaid) on an overdue amount will be compounded with that overdue amount at
the end of each of its Terms but will remain immediately due and payable.

 

10.4                        Notification
of rates of interest and fees

 

The Facility Agent must
promptly notify each relevant Party of the determination of a rate of interest
under this Agreement. The Facility Agent will also notify each relevant Party
on a quarterly basis of the Guarantees which have been issued and remain
outstanding and of the calculations it has made in respect of fees payable
under this Agreement.

 

10.5                        Guarantee
fee

 

(a)                                  Each
Borrower must pay to the Facility Agent for each Lender a guarantee fee
computed at the rate of 3.05 per cent. per annum on the outstanding amount of
each Guarantee requested by it for the period from the issue of that Guarantee
until its Maturity Date. This fee will be distributed 

 

35

 

according to each
Lender’s Pro Rata Share, adjusted to reflect any assignment or transfer to or
by that Lender.

 

(b)                                 Guarantee
fee is payable on the date of issue of a Guarantee and quarterly in advance
thereafter on a pro rata temporis basis (or any shorter period that ends on
the Maturity Date for that Guarantee).

 

10.6                        Effective
Global Rate (Taux Effectif Global)

 

For the purpose of
Articles L.313-1, L.313-2, R 313-1 and R 313-2 of the French Consumer Code (Code de la
Consommation), each Party acknowledges that:

 

(a)                                  by
virtue of certain characteristics of this Agreement (including the variable
interest rate applicable to Loans and a Borrower’s right to select the currency
and the duration of a Term), the taux effectif global cannot be calculated
on the date of this Agreement, but that an indicative calculation of the taux
effectif global, based on assumptions as to the taux de période and the durée de
période, will be set out in a letter from the Facility Agent to each
Original Borrower incorporated in France substantially in the form of
Schedule 11 (Form of Taux effectif global Letter); and

 

(b)                                 that
letter forms part of this Agreement. 

 

11.                               TERMS

 

11.1                        Selection

 

(a)                                  Each
Utilisation has one Term only.

 

(b)                                 A
Borrower must select the Term for a Utilisation in the relevant Request.

 

(c)                                  Subject
to the following provisions of this Clause, each Term for a Medium-Term
Facility Loan will be one, two or three months or any other period agreed by
the Company and the Lenders up to a maximum period of twelve months. Each Term
for a Short-Term Facility Loan will be one month only.

 

(d)                                 Subject
to the following provisions of this Clause, each Term for a Guarantee will be
the expiry date of the liability of the relevant Issuing Bank under the
Guarantee and will fall on or before the date falling one month prior to the
Final Maturity Date and will be no shorter than one month from the date of
issue.

 

11.2                        No
overrunning the Final Maturity Date

 

If a Term would otherwise
overrun the relevant Final Maturity Date, it will be shortened so that it ends
on that Final Maturity Date.

 

11.3                        Notification

 

The Facility Agent must
notify the Borrower and the Lenders of the duration of each Term promptly after
ascertaining its duration. 

 

12.                               MARKET DISRUPTION

 

12.1                        Failure
of a Reference Bank to supply a rate

 

If EURIBOR, LIBOR or
PIBOR is to be calculated by reference to the Reference Banks but a Reference
Bank does not supply a rate by 11.30 a.m. (London time in the case of LIBOR
Reference Banks) on a Rate Fixing Day, the applicable EURIBOR, LIBOR or PIBOR
will, subject as provided below, be calculated on the basis of the rates of the
remaining Reference Banks.

 

36

 

12.2                        Market
disruption

 

(a)                                  In
this Clause, each of the following events is a market disruption event:

 

(i)                                     EURIBOR,
LIBOR or PIBOR is to be calculated by reference to the Reference Banks but no,
or only one, Reference Bank supplies a rate by 11.30 a.m. (London time in the
case of LIBOR Reference Banks) on the Rate Fixing Day; or

 

(ii)                                  the
Facility Agent receives by close of business on the Rate Fixing Day
notification from Lenders whose shares in the relevant Loan exceed thirty-five
per cent. (35%) of that Loan in their opinion:

 

(A)                              matching
deposits may not be available to them in the relevant interbank market in the
ordinary course of business to fund their participations in that Loan for the
relevant Term; or

 

(B)                                that
the cost to them of obtaining matching deposits in the relevant interbank
market is in excess of EURIBOR, LIBOR or PIBOR for the relevant Term.

 

(b)                                 The
Facility Agent must promptly notify the Company and the Lenders of a market
disruption event.

 

(c)                                  The
rate of interest on each Lender’s share in the affected Loan for the relevant
Term will be the aggregate of the applicable:

 

(i)                                     Margin;

 

(ii)                                  rate
notified to the Facility Agent by that Lender as soon as practicable, and in
any event before interest is due to be paid in respect of that Term, to be that
which expresses as a percentage rate per annum the cost to that Lender of
funding its share in that Loan from whatever source it may reasonably select;
and

 

(iii)                               Mandatory
Cost.

 

12.3                        Alternative
basis of interest or funding

 

(a)                                  If
a market disruption event occurs and the Facility Agent or the Company so
requires, the Company and the Facility Agent must enter into negotiations for a
period of not more than 30 days with a view to agreeing an alternative basis
for determining the rate of interest and/or funding for the affected Loan and
any future Loan.

 

(b)                                 Any
alternative basis agreed will be, with the prior consent of all the Lenders,
binding on all the Parties. 

 

13.                               TAXES

 

13.1                        General

 

In this Clause Tax Credit
means a credit against any Tax or any relief or remission for Tax (or its
repayment).

 

13.2                        Tax
gross-up

 

(a)                                  Each
Obligor must make all payments to be made by it or, by the Facility Agent to a
Finance Party, under the Finance Documents without any Tax Deduction, unless a
Tax Deduction is required by law.

 

(b)                                 If
an Obligor or a Lender is aware that an Obligor must make a Tax Deduction (or
that there is a change in the rate or the basis of a Tax Deduction), it must
promptly notify the Facility Agent. The Facility Agent must then promptly
notify the affected Parties.

 

37

 

(c)                                  If
a Tax Deduction is required by law to be made by an Obligor or the Facility
Agent, the amount of the payment due from the Obligor will be increased to an
amount which (after making the Tax Deduction) leaves an amount equal to the
payment which would have been due if no Tax Deduction had been required.

 

(d)                                 If
an Obligor is required to make a Tax Deduction, that Obligor must make the
minimum Tax Deduction allowed by law and must make any payment required in
connection with that Tax Deduction within the time allowed by law.

 

(e)                                  Within
30 days of making either a Tax Deduction or a payment required in connection
with a Tax Deduction, the Obligor making that Tax Deduction must deliver to the
Facility Agent for the relevant Finance Party evidence satisfactory to that
Finance Party (acting reasonably) that the Tax Deduction has been made or (as
applicable) the appropriate payment has been paid to the relevant taxing
authority.

 

(f)                                    If
an Obligor is, or becomes obliged, to make a Tax Deduction and is prevented by
applicable law from paying the additional amounts referred to in paragraph (c)
above:

 

(i)                                     the
Finance Party (if a Lender) may, by notice to the Obligor through the Facility
Agent, require the Obligor to prepay all or part of its participation in the
Utilisations; and

 

(ii)                                  the
Commitment of that Finance Party shall be cancelled forthwith and the Obligor
shall prepay the participations of that Finance Party in each Utilisation on
the date falling ten days after the date of the notice,

 

provided that
notwithstanding such prepayment the Obligor shall be obliged to pay the
additional amounts to that Finance Party which it is prevented from paying as
soon as it may legally do so and such obligation shall survive any cancellation
or termination of this Agreement.

 

13.3                        Tax
indemnity

 

(a)                                  Except
as provided below, the Company must indemnify a Finance Party against any loss
or liability which that Finance Party (in its absolute discretion) determines
will be or has been suffered (directly or indirectly) by that Finance Party for
or on account of Tax in relation to a payment received or receivable (or any
payment deemed to be received or receivable) under a Finance Document.

 

(b)                                 Paragraph
(a) above does not apply to any Tax assessed on a Finance Party under the laws
of the jurisdiction in which:

 

(i)                                     that
Finance Party is incorporated or, if different, the jurisdiction (or
jurisdictions) in which that Finance Party has a Facility Office and is treated
as resident for tax purposes; or

 

(ii)                                  that
Finance Party’s Facility Office is located in respect of amounts received or
receivable in that jurisdiction,

 

if that Tax is imposed on
or calculated by reference to the net income received or receivable by that
Finance Party. However, any payment deemed to be received or receivable,
including any amount treated as income but not actually received by the Finance
Party, such as a Tax Deduction, will not be treated as net income received or
receivable for this purpose.

 

(c)                                  A
Finance Party making, or intending to make, a claim under paragraph (a) above
must promptly notify the Company of the event which will give, or has given,
rise to the claim.

 

13.4                        Tax
Credit

 

If an Obligor makes a Tax
Payment and the relevant Finance Party in its absolute discretion (acting in
good faith) determines that:

 

(a)                                  a
Tax Credit is attributable to that Tax Payment; and

 

38

 

(b)                                 it
has used and retained that Tax Credit,

 

the Finance Party must
pay an amount to the Obligor which that Finance Party determines in its
absolute discretion (acting in good faith) will leave it (after that payment)
in the same after-tax position as it would have been if the Tax Payment had not
been required to be made by the Obligor.

 

13.5                        Stamp
taxes

 

The Company must pay and
indemnify each Finance Party against any stamp duty, registration or other
similar Tax payable in connection with the entry into, performance or
enforcement of any Finance Document, except for any such Tax payable in connection
with the entry into of a Transfer Certificate unless such Transfer Certificate
is entered into at the request of an Obligor.

 

13.6                        Value
added taxes

 

(a)                                  Any
amount (including costs and expenses) payable under a Finance Document by an
Obligor is exclusive of any value added tax or any other Tax of a similar
nature which might be chargeable in connection with that amount. If any such
Tax is chargeable, the Obligor must pay to the Finance Party (in addition to
and at the same time as paying that amount) an amount equal to the amount of
that Tax.

 

(b)                                 The
obligation of any Obligor under paragraph (a) above will be reduced to the
extent that the Finance Party determines (acting reasonably) that it is
entitled to repayment or a credit in respect of the relevant Tax. 

 

14.                               INCREASED COSTS

 

14.1                        Increased
Costs

 

Except as provided below
in this Clause, each Borrower must pay to a Finance Party the amount of any
Increased Cost incurred by that Finance Party or any of its Affiliates as a
result of:

 

(a)                                  the
introduction of, or any change in, or any change in the interpretation,
administration or application of, any law or regulation; or

 

(b)                                 compliance
with any law or regulation,

 

made after the date of
this Agreement.

 

14.2                        Exceptions

 

No Borrower need make any
payment for an Increased Cost to the extent that the Increased Cost is:

 

(a)                                  compensated
for under another Clause or would have been but for an exception to that
Clause;

 

(b)                                 a
tax on the overall net income of a Finance Party or any of its Affiliates; or

 

(c)                                  attributable
to a Finance Party or its Affiliate wilfully failing to comply with any law or
regulation.

 

14.3                        Claims

 

A Finance Party intending
to make a claim for an Increased Cost must notify the Company promptly of the
circumstances giving rise to, and the amount of, the claim. 

 

39

 

15.                               MITIGATION

 

15.1                        Mitigation

 

(a)                                  Each
Finance Party must, in consultation with the Company, take all reasonable steps
to mitigate any circumstances which arise and which result or would result in:

 

(i)                                     any
Tax Payment or Increased Cost being payable to that Finance Party;

 

(ii)                                  that
Finance Party being able to exercise any right of prepayment and/or
cancellation under this Agreement by reason of any illegality; or

 

(iii)                               that
Finance Party incurring any cost of complying with the minimum reserve
requirements of the European Central Bank,

 

including transferring
its rights and obligations under the Finance Documents to an Affiliate or
changing its Facility Office.

 

(b)                                 Paragraph
(a) above does not in any way limit the obligations of any Obligor under the
Finance Documents.

 

(c)                                  The
Company must indemnify each Finance Party for all costs and expenses reasonably
incurred by that Finance Party as a result of any step taken by it under this
Clause.

 

(d)                                 A
Finance Party is not obliged to take any step under this Clause if, in the
opinion of that Finance Party (acting reasonably), to do so might be
prejudicial to it.

 

15.2                        Conduct
of business by a Finance Party

 

No term of this Agreement
will:

 

(a)                                  interfere
with the right of any Finance Party to arrange its affairs (Tax or otherwise)
in whatever manner it thinks fit;

 

(b)                                 oblige
any Finance Party to investigate or claim any credit, relief, remission or
repayment available to it in respect of Tax or the extent, order and manner of
any claim; or

 

(c)                                  oblige
any Finance Party to disclose any information relating to its affairs (Tax or
otherwise) or any computation in respect of Tax. 

 

16.                               PAYMENTS

 

16.1                        Place

 

Unless a Finance Document
specifies that payments under it are to be made in another manner, all payments
by a Party (other than the Facility Agent) under the Finance Documents must be
made to the Facility Agent to its account at such office or bank:

 

(a)                                  in
the principal financial centre of the country of the relevant currency; or

 

(b)                                 in
the case of euro, in the principal financial centre of a Participating Member
State or London,

 

as it may notify to that
Party for this purpose by not less than five Business Days’ prior notice.

 

16.2                        Funds

 

Payments under the
Finance Documents to the Facility Agent must be made for value on the due date
at such times and in such funds as the Facility Agent may specify to the Party
concerned as being customary at the time for the settlement of transactions in
the relevant currency in the place for payment.

 

40

 

16.3                        Distribution

 

(a)                                  Each
payment received by the Facility Agent under the Finance Documents for another
Party must, except as provided below, be made available by the Facility Agent
to that Party by payment (as soon as practicable after receipt) to its account
with such office or bank:

 

(i)                                     in
the principal financial centre of the country of the relevant currency; or

 

(ii)                                  in
the case of euro, in the principal financial centre of a Participating Member
State or London,

 

as it may notify to the
Facility Agent for this purpose by not less than five Business Days’ prior
notice.

 

(b)                                 The
Facility Agent may apply any amount received by it for an Obligor in or towards
payment (as soon as practicable after receipt) of any amount due from that
Obligor under the Finance Documents or in or towards the purchase of any amount
of any currency to be so applied.

 

(c)                                  Where
a sum is paid to the Facility Agent under this Agreement for another Party, the
Facility Agent is not obliged to pay that sum to that Party until it has
established that it has actually received it. However, the Facility Agent may
assume that the sum has been paid to it, and, in reliance on that assumption,
make available to that Party a corresponding amount. If it transpires that the
sum has not been received by the Facility Agent, that Party must immediately on
demand by the Facility Agent refund any corresponding amount made available to
it together with interest on that amount from the date of payment to the date
of receipt by the Facility Agent at a rate calculated by the Facility Agent to
reflect its cost of funds.

 

(d)                                 The
Company irrevocably and unconditionally instructs the Facility Agent to apply
directly towards repayment of the Refinanced Facilities such proportion of the
proceeds of the first Utilisation as is necessary to ensure that, when
aggregated with the amounts which the Company notifies the Facility Agent it
intends to apply towards repayment of the Refinanced Facilities from its own
resources, the Refinanced Facilities are repaid in full by close of business on
the Utilisation Date of the first Utilisation (and to the extent of such
repayment not to make those proceeds available to the Company under paragraph
(a) above).

 

16.4                        Currency

 

(a)                                  Unless
a Finance Document specifies that payments under it are to be made in a
different manner, the currency of each amount payable under the Finance
Documents is determined under this Clause.

 

(b)                                 Interest
is payable in the currency in which the relevant amount in respect of which it
is payable is denominated.

 

(c)                                  A
repayment or prepayment of any principal amount is payable in the currency in
which that principal amount is denominated on its due date.

 

(d)                                 Amounts
payable in respect of costs and expenses are payable in the currency in which
they are incurred.

 

(e)                                  Each
other amount payable under the Finance Documents is payable in euro.

 

16.5                        No
set-off or counterclaim

 

All payments made by an
Obligor under the Finance Documents must be made without set-off or
counterclaim.

 

41

 

16.6                        Business
Days

 

(a)                                  If
a payment under the Finance Documents is due on a day which is not a Business
Day, the due date for that payment will instead be the next Business Day in the
same calendar month (if there is one) or the preceding Business Day (if there
is not) or whatever day the Facility Agent determines is market practice.

 

(b)                                 During
any extension of the due date for payment of any principal under this Agreement
interest is payable on that principal at the rate payable on the original due
date.

 

16.7                        Partial
payments

 

(a)                                  If
any Administrative Party receives a payment insufficient to discharge all the
amounts then due and payable by an Obligor under the Finance Documents, the
Administrative Party must apply that payment towards the obligations of that
Obligor under the Finance Documents in the following order:

 

(i)                                     first,
in or towards payment pro rata of any unpaid fees, costs and
expenses of the Administrative Parties under the Finance Documents;

 

(ii)                                  secondly,
in or towards payment pro rata of any accrued interest or fee
due but unpaid under this Agreement by that Obligor;

 

(iii)                               thirdly,
in or towards payment pro rata of any principal amount due but
unpaid under this Agreement by that Obligor; and

 

(iv)                              fourthly,
in or towards payment pro rata of any other sum due but unpaid
under the Finance Documents by that Obligor.

 

(b)                                 The
Facility Agent must, if so directed by all the Lenders, vary the order set out
in sub-paragraphs (a)(ii) to (iv) above.

 

(c)                                  This
Clause will override any appropriation made by an Obligor.

 

16.8                        Timing
of payments

 

If a Finance Document
does not provide for when a particular payment is due, that payment will be due
within three Business Days of demand by the relevant Finance Party. 

 

17.                               GUARANTEE AND INDEMNITY

 

17.1                        Guarantee
and indemnity

 

The Company irrevocably
and unconditionally:

 

(a)                                  guarantees
to each Finance Party punctual performance by each Borrower of all its payment
obligations under the Finance Documents;

 

(b)                                 undertakes
with each Finance Party that, whenever a Borrower does not pay any amount when
due under any Finance Document, the Company must immediately on demand by the
Facility Agent pay that amount as if it were the principal obligor; and

 

(c)                                  indemnifies
each Finance Party immediately on demand against any loss or liability suffered
by that Finance Party if any payment obligation guaranteed by it is or becomes
unenforceable, invalid or illegal; the amount of the loss or liability under
this indemnity will be equal to the amount the Finance Party would otherwise
have been entitled to recover.

 

17.2                        Continuing
guarantee

 

This guarantee is a
continuing guarantee and will extend to the ultimate balance of all sums
payable by any Borrower under the Finance Documents, regardless of any
intermediate payment or discharge in whole or in part.

 

42

 

17.3                        Reinstatement

 

(a)                                  If
any discharge (whether in respect of the obligations of any Borrower or any
security for those obligations or otherwise) or arrangement is made in whole or
in part on the faith of any payment, security or other disposition which is
avoided or must be restored on insolvency, liquidation or otherwise without
limitation, the liability of the Company under this Clause will continue as if
the discharge or arrangement had not occurred.

 

(b)                                 Each
Finance Party may concede or compromise any claim that any payment, security or
other disposition is liable to avoidance or restoration.

 

17.4                        Waiver
of defences

 

The obligations of the
Company under this Clause will not be affected by any act, omission or thing
which, but for this provision, would reduce, release or prejudice any of its
obligations under this Clause (whether or not known to it or any Finance
Party). This includes:

 

(a)                                  any
time or waiver granted to, or composition with, an Obligor or any person;

 

(b)                                 any
release of an Obligor or any person under the terms of any composition or
arrangement;

 

(c)                                  the
taking, variation, compromise, exchange, renewal or release of, or refusal or
neglect to perfect, take up or enforce, any rights against, or security over
assets of, an Obligor or any other person;

 

(d)                                 any
non-presentation or non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full value of any
security;

 

(e)                                  any
incapacity or lack of power, authority or legal personality of or dissolution
or change in the members or status of an Obligor or any person;

 

(f)                                    any
amendment (however fundamental) of a Transaction Document or any other document
or security;

 

(g)                                 any
unenforceability, illegality, invalidity or non-provability of any obligation
of any person under any Transaction Document or any other document or security;
or

 

(h)                                 any
insolvency or similar proceedings.

 

17.5                        Immediate
recourse

 

The Company waives any
right it may have of first requiring any Finance Party (or any trustee or agent
on its behalf) to proceed against or enforce any other right or security or
claim payment from any person before claiming from the Company under this
Clause.

 

17.6                        Appropriations

 

Until all amounts which
may be or become payable by the Borrowers under the Finance Documents have been
irrevocably paid in full, each Finance Party (or any trustee or agent on its
behalf) may without affecting the liability of the Company under this Clause:

 

(a)                                  refrain
from applying or enforcing any other moneys, security or rights held or
received by that Finance Party (or any trustee or agent on its behalf) in
respect of those amounts; or

 

(b)                                 apply
and enforce them in such manner and order as it sees fit (whether against those
amounts or otherwise); and

 

(c)                                  hold
in an interest-bearing suspense account any moneys received from the Company or
on account of the Company’s liability under this Clause.

 

43

 

17.7                        Non-competition

 

Unless:

 

(a)                                  all
amounts which may be or become payable by the Obligors under the Finance
Documents have been irrevocably paid in full; or

 

(b)                                 the
Facility Agent otherwise directs,

 

the Company will not,
after a claim has been made or by virtue of any payment or performance by it
under this Clause:

 

(i)                                     be
subrogated to any rights, security or moneys held, received or receivable by
any Finance Party (or any trustee or agent on its behalf);

 

(ii)                                  be
entitled to any right of contribution or indemnity in respect of any payment
made or moneys received on account of the Company’s liability under this
Clause;

 

(iii)                               claim,
rank, prove or vote as a creditor of any Obligor or its estate in competition
with any Finance Party (or any trustee or agent on its behalf); or

 

(iv)                              receive,
claim or have the benefit of any payment, distribution or security from or on
account of any Borrower, or exercise any right of set-off as against any
Borrower.

 

The Company must to the
fullest extent permitted by law hold in trust for and immediately pay or
transfer to the Facility Agent for the Finance Parties any payment or
distribution or benefit of security received by it (A) contrary to paragraphs
(i), (ii) or (iii) above or (B) with respect to any contribution or indemnity
in respect of any payment made or moneys received on account of the Guarantor’s
liability under this Clause 17 or in respect of any payment or distribution or
security from or on account of any member of the Group or any right of set-off
as against any member of the Group, subject to and in accordance with the
Subordination Agreement and in accordance with any directions given by the
Facility Agent.

 

17.8                        Additional
security

 

This guarantee is in
addition to and is not in any way prejudiced by any other security now or
subsequently held by any Finance Party. 

 

18.                               REPRESENTATIONS AND WARRANTIES

 

18.1                        Representations
and warranties

 

Each Obligor party to
this Agreement makes the representations and warranties set out in this Clause
18 in respect of itself and each of its Subsidiaries to each Finance Party. In
addition the Company makes the representations and warranties set out in this
Clause 18 in respect of itself and each Obligor not party to this Agreement.

 

18.2                        Status

 

(a)                                  It
is a limited liability company, duly incorporated and in good standing and
validly existing under the laws of the jurisdiction of its incorporation; and

 

(b)                                 it
has the power to own its assets and carry on its business as it is being
conducted.

 

18.3                        Powers
and authority

 

It has the power to enter
into and perform, and has or will have taken at the relevant time all necessary
action to authorise the entry into, performance and delivery of the Transaction
Documents to which it is or will be a party and the transactions contemplated
by those Transaction Documents.

 

44

 

18.4                        Legal
validity

 

Each Transaction Document
to which it is or will be a party constitutes, or when executed in accordance
with its terms will constitute, its legally binding, valid and enforceable
obligation.

 

18.5                        Non-conflict

 

(a)                                  The
entry into and performance by it of, and the transactions contemplated by, the
Transaction Documents do not and will not conflict with:

 

(i)                                     any
law or regulation or judicial or official order; or

 

(ii)                                  its
or any of its Subsidiaries’ constitutional documents; or

 

(iii)                               any
document which is binding upon it or any of its or its Subsidiaries’ assets.

 

(b)                                 The
borrowing of the Total Commitments in full will not cause any borrowing limit
binding on any Borrower to be exceeded.

 

18.6                        No
Default

 

(a)                                  No
Default is outstanding on the date of this Agreement or will result from the
execution of, or the performance of any transaction contemplated by, any
Transaction Document to which it or any of its Subsidiaries is or will be a
party.

 

(b)                                 No
event or circumstance is outstanding which constitutes (or, with the giving of
notice, lapse of time, determination of materiality or the fulfilment of any
other applicable condition or any combination of the foregoing, might
constitute) a default, termination event or early prepayment event under any
document which is binding on it or any of its Subsidiaries.

 

18.7                        Authorisations

 

All authorisations
required by it or desirable in connection with the entry into, performance,
validity and enforceability of, and the transactions contemplated by, the
Transaction Documents and the implementation of the Asset Disposal Programme
and the Rights Issue have been, or will be when necessary (and in any event
prior to the first Request), obtained or effected (as appropriate) and are, or
will be when obtained or effected, in full force and effect.

 

18.8                        Title

 

It and each member of the
Group has good title to, or valid leases of, or is otherwise entitled to use
all material assets necessary to conduct its business as it is conducted at the
date of this Agreement.

 

18.9                        Litigation

 

(a)                                  No
litigation, arbitration or administrative proceedings are current or, to its
knowledge, pending or threatened against it on the date of this Agreement which
have or could reasonably be expected to involve a claim or related claims in
excess of €15,000,000 (or its equivalent in other currencies) and thereafter
which have or could reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Paragraph
(a) does not apply to proceedings the full details of which have been provided
to the Facility Agent on or prior to the date of this Agreement.

 

18.10                 Pari
Passu Ranking

 

Its obligations under the
Finance Documents rank and will rank at least pari passu with all its unsecured
and unsubordinated obligations except for obligations mandatorily preferred by
law applying to companies generally.

 

45

 

18.11                 Taxes
on payments

 

All amounts payable by
each Obligor under the Finance Documents can be made free and clear of and
without deduction for or on account of any Tax.

 

18.12                 Stamp
duties

 

No stamp or registration
duty or similar taxes or charges are payable in its jurisdiction of
incorporation in respect of any Finance Document.

 

18.13                 Immunity

 

(a)                                  The
execution by each Obligor of each Finance Document constitutes, and its
exercise of its rights and performance of its obligations under each Finance
Document will constitute, private and commercial acts done and performed for
private and commercial purposes; and

 

(b)                                 no
Obligor will be entitled to claim immunity from suit, execution, attachment or
other legal process in any proceedings taken in its jurisdiction of
incorporation in relation to any Finance Document.

 

18.14                 No
adverse consequences

 

(a)                                  It
is not necessary under the laws of its jurisdiction of incorporation:

 

(i)                                     in
order to enable any Finance Party to enforce its rights under any Finance
Document; or

 

(ii)                                  by
reason of the execution of any Finance Document or the performance by it of its
obligations under any Finance Document,

 

that any Finance Party
should be licensed, qualified or otherwise entitled to carry on business in its
jurisdiction of incorporation; and

 

(b)                                 no
Finance Party is or will be deemed to be resident, domiciled or carrying on
business in its jurisdiction of incorporation by reason only of the execution,
performance and/or enforcement of any Finance Document.

 

18.15                 Jurisdiction/governing
law

 

(a)                                  Each
Obligor’s:

 

(i)                                     irrevocable
submission under Clause 38.1 (Jurisdiction) to the jurisdiction of the courts
of England and New York;

 

(ii)                                  agreement
that this Agreement is governed by English law; and

 

(iii)                               agreement
not to claim any immunity to which it or its assets may be entitled,

 

are legal, valid and
binding under the laws of its jurisdiction of incorporation; and

 

(b)                                 any
judgement obtained in England or in the United States will be recognised and be
enforceable by the courts of its jurisdiction of incorporation.

 

18.16                 Security
Interests

 

(a)                                  It
is the legal and beneficial owner of the property which it purports to charge
pursuant to the Security Documents. No Security Interests, third party rights,
options, claims and competing interests whatsoever exist over any of its assets
other than as permitted by Clause 21.4 (Negative pledge).

 

(b)                                 The
Security Interests granted or intended to be granted under the Security
Documents pursuant to the Agreed Security Principles constitute first ranking
security in favour of the Finance Parties and implementation of the Agreed
Security Principles in full does not breach any document binding on the Company
and any of its Subsidiaries.

 

46

 

18.17                 Environmental
matters

 

It has obtained any and
all Environmental Licences required for the carrying on of its business as
currently conducted and is in compliance in all material respects with (a) the
terms and conditions of such Environmental Licences and (b) all other
applicable Environmental Law which in each case, if not complied with, has, or
could reasonably be expected to have a Material Adverse Effect.

 

18.18                 Financial
Statements and Business Plan

 

(a)                                  The
consolidated and unconsolidated financial statements of the Company and each
Borrower most recently delivered to the Facility Agent (being, at the date of
this Agreement, the Original Financial Statements only):

 

(i)                                     have
been prepared in accordance with accounting principles and practices generally
accepted in its jurisdiction of incorporation, consistently applied; and

 

(ii)                                  give
a true and fair view of its financial condition (consolidated, if applicable)
as at the date to which they were drawn up,

 

(b)                                 There
has been no material adverse change in the consolidated financial condition of
the Group since the date of the Original Business Plan.

 

(c)                                  The
projections and forecasts contained in the Business Plan and liquidity and
cashflow forecasts most recently delivered to the Facility Agent were made in
good faith and are based on reasonable assumptions and such Business Plan does
not as at its date omit any projections or forecasts which would make that
Business Plan misleading.

 

18.19                 Information

 

(a)                                  (Unless
the Company has notified the Facility Agent (which shall notify the Lenders) in
writing to the contrary prior to the date of this Agreement, correcting the
relevant inaccuracy or lack of completeness) all written information (other
than the Business Plan) (and including all reports) provided to the Finance
Parties by or on behalf of an Obligor or other member of the Group prior to the
date of, and in connection with, this Agreement (the Information) was true,
complete and accurate in all material respects as at the date it was supplied.

 

(b)                                 All
expressions of opinion contained in the Information were made after careful
consideration and were believed by the Company or an Obligor or other member of
the Group to be reasonable as at the date at which they were stated to be
given.

 

(c)                                  The
financial projections contained in the Information were prepared on the basis
of assumptions believed by the Company or an Obligor or other member of the
Group to be reasonable and prudent as at the date at which they were stated to
be given.

 

(d)                                 Save
as otherwise disclosed on or before the date of delivery of the Information
nothing has occurred since the date of that Information (or, if applicable, the
date of any factual information contained therein as referred to therein)
which, if disclosed, would make that Information untrue or misleading in any
material respect.

 

18.20                 Existing
Facilities

 

(a)                                  The
details in Schedule 7 Part 2 (Existing Indebtedness) given in relation to
each Existing Facility are, as at the date of this Agreement true, accurate and
complete.

 

(b)                                 Schedule 7
Part 2 (Existing Indebtedness) identifies each agreement under which any member
of the Group or Relevant Entity can incur or has outstanding Financial
Indebtedness or to which there is recourse in respect of Financial Indebtedness
to any Obligor or Material Subsidiary in each case on the date of this
Agreement.

 

47

 

18.21                 Asset
Disposal Programme and Rights Issue

 

The Company has no reason
to believe that the Asset Disposal Programme and Rights Issue cannot be
completed in full in accordance with the timetable applicable thereto and that
any authorisation or consent necessary for the disposal of an asset referred to
in the Asset Disposal Programme or for the launch and implementation of the
Rights Issue will not be forthcoming in time to allow that disposal or Rights
Issue to be implemented in accordance with that timetable.

 

18.22                 Inter-Company
Indebtedness

 

The list of Intra-Group
Loans made to or by each Obligor provided to the Facility Agent pursuant to
this Agreement, being on the date of this Agreement the list set out in
Schedule 13 (Intra-Group Loans), is complete and correct in all material
respects as at its date.

 

18.23                 Solvency
of Obligors

 

(a)                                  No
proceedings of any nature are current or, to its knowledge, pending or
threatened, for the winding-up or dissolution (including without limitation dissolution,
liquidation
or redressement
judiciaire) (other than a solvent winding up or dissolution) of, or
in respect of any insolvency proceeding of any nature relating to any Obligor
or each of its Subsidiaries.

 

(b)                                 It
has not defaulted on any of its payment obligations under any Facility
Agreement and the Obligors and each of its Subsidiaries are in a position to
meet their respective scheduled payments as they fall due.

 

(c)                                  In
relation to each Obligor and its Subsidiaries incorporated or organised in the
United States of America (on a consolidated basis):

 

(i)                                     the
aggregate amount of its debts (including its obligations (if any) under the
Finance Documents) is less than the aggregate value (being the lesser of fair
present valuation and present fair saleable value) of its assets (which for,
avoidance of doubt, include, without limitation, all rights of indemnification,
contribution and subrogation);

 

(ii)                                  its
capital is not unreasonably small to carry on its business as it is being
conducted;

 

(iii)                               it
did not incur (on the date incurred) and will not incur, debts beyond its
ability to pay as they mature; and

 

(iv)                              it
has not made a transfer or incurred any obligation under any Finance Document
with the intent to hinder, delay or defraud any of its present or future
creditors.

 

Terms used in this
paragraph (c) have the meanings given to them in the United States Bankruptcy
Code of 1978, as amended, and applicable fraudulent conveyance laws in the
United States of America.

 

18.24                 Group
Structure Chart

 

As at the date of this Agreement,
the Group Structure Chart describes the corporate ownership structure of all
members of the Group and is true, complete and correct in all material
respects.

 

18.25                 United
States laws

 

(a)                                  It
is not:

 

(i)                                     a
holding company, an affiliate of a holding company or a subsidiary company of a
holding company within the meaning of, or otherwise subject to regulation under
PUHCA;

 

(ii)                                  a
public utility, or subject to regulation, under the Federal Power Act;

 

(iii)                               an
investment company or a company controlled by an investment company; or

 

48

 

(iv)                              subject
to regulation under any United States Federal or State law or regulation that
limits its ability to incur or guarantee indebtedness.

 

(b)                                  Margin
stock

 

(i)                                     The
proceeds of the Utilisations have been and will be used only for the purposes
described in Clause 3 (Purpose).

 

(ii)                                  It
is not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations U and X
of the Board of Governors of the United States Federal Reserve System), and no
portion of any Utilisation has been or will be used, directly or indirectly, to
purchase or carry margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock.

 

(iii)                               No
portion of any Utilisation will be used to acquire any security in a
transaction that is subject to Section 13 or 14 of the United States
Securities Exchange Act of 1934, as amended.

 

(c)                                  ERISA

 

(i)                                     No
ERISA Event that could reasonably be expected to have a Material Adverse Effect
has occurred or is reasonably expected to occur with respect to any Plan.

 

(ii)                                  The
present value of the benefit liabilities under each Plan, as determined for the
purposes of Schedule B (Actuarial Information) to such Plan’s most
recently completed annual report (Form 5500 Series) that has been filed with
the required United States governmental agencies, which Schedule B is
complete and accurate in all material respects, did not, as of the date of such
valuation, exceed the fair market value of the assets of such Plan by an amount
that, when aggregated with any such excess under any other Plan, could
reasonably be expected to have a Material Adverse Effect, and since the date of
such valuation there has been no material adverse change in such funding status
that, when aggregated with any such change with respect to any other Plan,
could reasonably be expected to have a Material Adverse Effect.

 

(iii)                               Except
as could not reasonably be expected to have a Material Adverse Effect, neither
it nor any ERISA Affiliate has incurred or is reasonably expected to incur any
Withdrawal Liability to any Multiemployer Plan.

 

(iv)                              Except
as could not reasonably be expected to have a Material Adverse Effect, neither
it nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer
Plan that such Multiemployer Plan is in reorganisation or has been terminated,
within the meaning of Title IV of ERISA, and no such Multiemployer Plan is
reasonably expected to be in reorganisation or to be terminated, within the
meaning of Title IV of ERISA.

 

18.26                 Times
for making representations

 

(a)                                  The
representations set out in this Clause are made by each Original Obligor on the
date of this Agreement.

 

(b)                                 Unless
a representation is expressed to be given at a specific date and subject to
paragraph (c) below, each representation is deemed to be repeated by:

 

(i)                                     each
Additional Borrower and the Company on the date that Additional Borrower
becomes an Obligor; and

 

(ii)                                  each
Obligor on the date of each Request and the first day of each Term.

 

(c)                                  A
representation made under Clause 18.8 (Title), Clause 18.11 (Taxes on
payments), Clause 18.12 (Stamp duties), Clause 18.19 (Information), Clause
18.21 (Asset Disposal Programme and Rights Issue), Clause 18.23 (Solvency of
Obligors) and Clause 18.24 (Group Structure Chart) shall not 

 

49

 

be repeated and a
representation made under Clause 18.18(c) (Financial Statements and Business
Plan) shall only be repeated on each date that a Business Plan or liquidity and
cashflow forecast referred to therein is delivered, and a representation made
in the case of Clause 18.22 (Inter-Company Indebtedness) shall be repeated only
on each date that a list of Intra-Group Loans referred to therein is delivered.

 

(d)                                 When
a representation in Clause 18.6 (No Default) is repeated on a Request for a
Rollover Utilisation, the reference to a Default will be construed as a
reference to an Event of Default.

 

(e)                                  When
a representation is repeated, it is applied to the circumstances existing at
the time of repetition. 

 

19.                               INFORMATION COVENANTS

 

19.1                        Financial
information

 

(a)                                  The
Company shall supply or procure that the relevant member of the Group or
Relevant Entity supplies to the Facility Agent in sufficient copies for the
Lenders:

 

(i)                                     as
soon as the same are available and in any event within 60 days of the end of
its respective financial years:

 

(A)                              the
audited consolidated and unconsolidated financial statements of the Company for
the financial year;

 

(B)                                the
audited or unaudited unconsolidated financial statements of Rhodia Inc. for the
financial year; and

 

(C)                                the
unaudited financial statements of each other Obligor, which may constitute
those prepared for the consolidated financial statements of the Company;

 

(ii)                                  as
soon as the same are available and in any event within 90 days of the end of
its financial year the audited consolidated or unconsolidated financial
statements of Rhodia Inc. for the financial year;

 

(iii)                               as
soon as the same are available and in any event within 180 days of the end of
its respective financial years the audited unconsolidated financial statements
of each Obligor for the financial year;

 

(iv)                              as
soon as the same are available (and in any event within 60 days of the end of
its respective financial half-years):

 

(A)                              the
consolidated and unconsolidated financial statements subject to a limited
review by the auditors of each Original Borrower for that financial half-year; and

 

(B)                                the
unaudited financial statements of each other Obligor, which may constitute
those prepared for the consolidated financial statements of the Company for
that financial half-year;

 

(v)                                 as
soon as the same are available (and in any event within 60 days of the end of
each of its respective financial quarters):

 

(A)                              the
consolidated financial statements of each Borrower for that financial quarter;
and

 

(B)                                the
unaudited financial statements of each other Obligor, which may constitute
those prepared for the consolidated financial statements of the Company for
that financial quarter;

 

(vi)                              as
soon as they become available (and in any event within 30 days of the end of
each calendar month) a copy of the management accounts of the Company for that
calendar month which shall contain a profit and loss statement and details of
cashflow and liquidity for that calendar month; and

 

50

 

(vii)                           in
respect of each Relevant Entity:

 

(A)                              as
soon as the same are available (and in any event within 180 days of the end of
each financial year of each Relevant Entity) the audited consolidated financial
statements of that Relevant Entity for that financial year; or

 

(B)                                if
the audited consolidated financial statements referred to in paragraph (A)
above are not prepared by a Relevant Entity, as soon as the same are available
(and in any event within 90 days of the end of each financial year of that
Relevant Entity) the financial statements of that Relevant Entity for that
financial year; and

 

(C)                                provided
the same are prepared by a Relevant Entity and the Company is entitled to
receive them, as soon as the same are available (and in any event within 60
days of the end of each financial half year of each Relevant Entity) the financial
statements (consolidated if prepared and otherwise unconsolidated) of that
Relevant Entity for that half year.

 

(b)                                 Subject
to paragraph (c) below, the Company shall ensure that:

 

(i)                                     each
set of financial statements delivered by it pursuant to paragraphs (a)(i) to
(a)(vi) above:

 

(A)                              is
prepared in accordance with accounting principles and practices generally
accepted in France consistently applied;

 

(B)                                shall
give a true and fair view of the financial condition of the Group as at the end
of the period to which those financial statements relate and of the results of
its operations during that period; and

 

(C)                                is
(in the case of the financial statements referred to in paragraphs (a)(i)(A),
(a)(ii) and (a)(iii) above) audited by an internationally recognised
independent qualified firm of auditors.

 

(c)                                  The
Company shall ensure that each set of financial statements delivered pursuant
to paragraph (a)(vii) above is prepared in accordance with either:

 

(i)                                     accounting
principles and practices generally accepted internationally if, in the place of
establishment or incorporation of the Relevant Entity concerned there is a
legal requirement to do so; or

 

(ii)                                  if
no such requirement exists, accounting principles and practices generally
accepted in the place of establishment or incorporation of the Relevant Entity
concerned,

 

in each case consistently
applied and shall give a true and fair view of the financial condition of the
Relevant Entity to which they relate as at the end of the period to which those
accounts relate and of the results of its operations during that period.

 

(d)                                 Together
with each set of financial statements delivered under paragraphs (a)(i)(A),
(a)(ii) and (a)(iv) above, the Company shall deliver a Compliance Certificate
signed by its statutory auditors setting out in reasonable detail (to the
Facility Agent’s reasonable satisfaction) computations in respect of the
definitions used in and for the purposes of establishing compliance with the
financial covenants in Clause 20 (Financial Covenants) as at the Testing Date
(as defined in Clause 20) to which the financial statements with which the
relevant Compliance Certificate was delivered were made.

 

(e)                                  Together
with each set of financial statements delivered under paragraph (a)(v) above,
the Company shall deliver a Compliance Certificate signed by its chief
financial officer setting out in reasonable detail computations in respect of
the definitions used in and for the purposes of establishing compliance with
the financial covenants in Clause 20 (Financial Covenants) as at the Testing
Date (as defined in Clause 20) to which those financial statements were made
up.

 

51

 

(f)                                    Together
with each set of audited financial statements delivered under paragraphs,
(a)(i)(A), (a)(ii) and (a)(iv) above, the Company shall deliver to the Facility
Agent a certificate listing the Material Subsidiaries as determined from those
financial statements.

 

(g)                                 The
Company shall supply the Facility Agent (in sufficient copies for the Lenders)
with:

 

(i)                                     as
soon as available and in any event within 20 Business Days of the end of each
quarter starting with the quarter ending on 31st March, 2004 an updated
Business Plan which shall be validated by Ernst & Young in accordance with
the agreed scope of work (to include an analysis and projections of liquidity
and cash as at the end of that quarterly period) for each of the periods ending
on 31st March, 2004, 30th June, 2004, 31st December, 2004 and 30th June, 2005;

 

(ii)                                  as
soon as the same are available and in any event within 15 Business Days of the
end of each of the first two calendar months of each quarter, (A) details of
the amounts of consolidated gross and net cash available to the Company as at
that date commencing with the calendar month ending 31st December, 2003; and
(B) monthly analysis and projections of liquidity and cash as at the end of
each of the first two calendar months of each quarter including a 12-month
rolling forecast for the next twelve months commencing with the calendar month
ending 30th April, 2004 in the same form as the Liquidity Analysis provided
with the Original Business Plan;

 

(iii)                               as
soon as the same are available and in any event:

 

(A)                              within
10 Business Days of the end of each calendar month, a list of all Intra-Group
Loans made to or by the Company as at the end of that calendar month; and

 

(B)                                within
20 Business Days of the end of each calendar month, a list of all Intra-Group
Loans made to or by each Obligor other than the Company as at the end of that
calendar month;

 

(iv)                              no
more than once in any quarterly period, such information, access to personnel
and other assistance as is necessary to enable the Finance Parties, acting
through the Facility Agent, to monitor the cash flow of the Group and compare
it with the liquidity and cash flow forecast.

 

(h)                                 The
Company shall ensure the availability of senior management of the Company for
meetings or conference calls with the Lenders on a semi-annual and annual
basis.

 

19.2                        Information—miscellaneous

 

Each Obligor shall supply
to the Facility Agent in sufficient copies for, or make available to, the
Lenders:

 

(a)                                  all
notices and documents dispatched by it to its shareholders (or any class of
them) or its creditors (or any class of them) at the same time as they are
dispatched;

 

(b)                                 (i)
to the extent legally permissible, any report, notice or statement made or
issued to any regulatory authority or stock exchange by an Obligor which is to
be made available to the public promptly upon making or issuing the report,
notice or statement; and

 

(ii)                                  where
the report, notice or statement refers to the Lenders, the Company shall where
legally permissible, give the Facility Agent opportunity to comment on the
report, notice or statement prior to its making or issue;

 

(c)                                  promptly,
a copy of any material notification received from any rating agency in respect
of the Company’s long term credit rating;

 

(d)                                 promptly
upon becoming aware of them, details of any material litigation, arbitration or
administrative proceedings which are current, threatened or pending which it is
or may become involved in;

 

52

 

(e)                                  promptly,
reasonable details of any disposal made or to be made pursuant to the Asset
Disposal Programme; and

 

(f)                                    promptly,
such further information in the possession or control of any member of the
Group regarding the financial condition, structure, business and management of
the Obligors, the Group as a whole or any Material Subsidiary as the Facility
Agent may reasonably request.

 

19.3                        Notification
of Default

 

(a)                                  The
Company or relevant Obligor shall, promptly upon becoming aware of the
occurrence of the same, notify the Facility Agent of:

 

(i)                                     any
Default in respect of it or its Subsidiaries (and the steps, if any, being
taken to remedy it); or

 

(ii)                                  any
event or circumstance which constitutes (or, with the giving of notice, lapse
of time, determination of materiality or the fulfilment of any applicable
condition or any combination of the foregoing, might constitute) a default,
termination event or early prepayment event under any document which is binding
on it or any of its Subsidiaries.

 

(b)                                 The
Facility Agent will promptly notify each Lender of any such Default or event or
circumstance upon receipt of notification from the Obligor.

 

(c)                                  Promptly
upon any request by the Facility Agent (acting in good faith) the Company must
supply to the Facility Agent a certificate, signed by two of its authorised
signatories on its behalf, certifying that no Default is outstanding or, if a
Default is outstanding, specifying the Default and the steps, if any, being
taken to remedy it. 

 

20.                               FINANCIAL COVENANTS

 

20.1                        Financial
covenant definitions

 

In this Clause 20:

 

Adjusted EBITDAR
means, in respect of a particular period, the Company’s EBITDAR adjusted to
reflect the EBITDAR of each Relevant Entity (Relevant Entity EBITDAR),
provided that the amount of such adjustment shall be pro rata to the Company’s
participation in the capital of the Relevant Entity.

 

Consolidated Net Indebtedness
means, without double counting, the aggregate of (A) the Company’s long term
debt (including participating loans), bank overdrafts, current portion of long
term debt, (B) guarantees given with respect to Financial Indebtedness of third
parties or joint ventures in which the Company is involved or the Company’s
unconsolidated subsidiaries or otherwise (C) outstanding amounts with respect
to any securitisation programme, sale of receivables and any outstanding amount
under a lease (being defined as the aggregate of the net present value of (i)
lease rentals and (ii) the residual value or lease balance of such lease) and
(D) short term borrowings minus the aggregate of cash, short term
deposits, marketable securities, each as calculated from the items so described
in the English language version of the consolidated accounts of the Company
most recently delivered by the Company to the Facility Agent under Clause 19.1
(Financial information).

 

EBITDA means, in
respect of a particular period, (before restructuring costs and after cash
impact of provisions other than provisions for restructuring) and in respect of
the Company or a Relevant Entity, the aggregate of the Company’s or the
Relevant Entity’s (as the case may be) Operating Income, Depreciation and Amortisation
of Assets, where:

 

(a)                                  Operating
Income means net sales minus operating expenses (operating expenses being
production costs and expenses, administrative and selling expenses, research
and development 

 

53

 

expenses, Depreciation
and Amortisation of Assets, additional goodwill amortisation (if any) and
provision for environmental costs);

 

(b)                                 Depreciation
and Amortisation of Assets means:

 

(i)                                     amortisation
of acquisition goodwill and equity goodwill in net income of affiliated
companies;

 

(ii)                                  amortisation
of patents, licenses, trade-marks and software;

 

(iii)                               amortisation
of other intangible assets;

 

(iv)                              depreciation
of land, buildings and other tangible assets;

 

(v)                                 additional
goodwill amortisation (if any); and

 

(vi)                              investments
allowance,

 

as determined from the
accounts of the Company and the Relevant Entity most recently delivered by the
Company to the Facility Agent under Clause 19.1 (Financial information) and if
an acquisition or disposal of a Subsidiary has been made which is not taken
into account in the accounts of the Company for the relevant period such
accounts shall be adjusted by way of pro forma audited financial statements
(based on audited financial statements for that Subsidiary (consolidated if it
has Subsidiaries) for the Ratio Period ending immediately prior to that
acquisition or disposal and other assumptions approved by the Facility Agent)
in respect of that Subsidiary as if the relevant acquisition or disposal had
been made during that relevant period.

 

EBITDAR means in
respect of a particular period, EBITDA for that period plus the aggregate
amount of any lease rental payments paid or payable in that period to the
extent such payments are taken into account as an operating expense in the
calculation of EBITDA.

 

Net Financial Expenses
means, in respect of a particular period, Interest Expenses minus
Interest Income, where:

 

(a)                                  Interest
Expenses means the aggregate of the Company’s interest on financial debts
and financing operations (being interest on loans payable and bank overdrafts,
financial expenses related to securitisations, the interest element of lease
rental payments, discounts of notes receivable and amortisation of redemption
premium) after capitalisation of financial expenses related to the financing of
certain assets and incorporated in the purchase cost of such assets, excluding
penalties or commissions for loan prepayment, losses on financial instruments
such as interest rate options and interest rate swaps, interest payable on non
financial debts (commercial or other), loans issuing costs whether or not
spread over the duration of the loan, net losses on disposals of marketable
securities, decreases in the probable stock exchange value of trading
securities, losses on repurchase of shares, debentures and other securities
issued by the Company or its Subsidiaries; and

 

(b)                                 Interest
income means the Company’s interest income on financial assets (loans
receivable, debit balance on bank current accounts, etc.), excluding income from non
financial receivables, gains on financial instruments such as interest rate
swaps or interest rate options, gains on disposal of marketable securities,
increase in the probable stock exchange value of trading securities, income
from marketable securities, gains on repurchase of shares, debentures or other
securities issued by the Company or its Subsidiaries,

 

each as calculated from
the items so described in the English language version of the consolidated
financial statements of the Company most recently delivered by the Company to
the Facility Agent under Clause 19.1 (Financial information).

 

54

 

Ratio Period means
each twelve month period ending on the date to which each set of financial statements
delivered by the Company pursuant to Clause 19.1 (Financial information) was
prepared.

 

Testing Date means
31st March, 30th June, 30th September and 31st December of each year.

 

20.2                        Ratio
of Consolidated Net Indebtedness to Adjusted EBITDAR

 

The Company shall procure
that the ratio of its Consolidated Net Indebtedness to its Adjusted EBITDAR is
not, on each Testing Date in relation to any Ratio Period ending on that
Testing Date set out in the column under the heading “Testing Date” in the
table below, greater than the ratio set out opposite that Testing Date in the
table below:

 

	
  Ratio

  	
   

  	
  Testing Date

  
	
  9.50 to 1.0

  	
   

  	
  31st March, 2004

  
	
  9.50 to 1.0

  	
   

  	
  30th June, 2004

  
	
  9.00 to 1.0

  	
   

  	
  30th September, 2004

  
	
  9.00 to 1.0

  	
   

  	
  31st December, 2004

  
	
  7.60 to 1.0

  	
   

  	
  31st March, 2005

  
	
  6.40 to 1.0

  	
   

  	
  30th June, 2005

  
	
  6.00 to 1.0

  	
   

  	
  30th September, 2005

  
	
  5.70 to 1.0

  	
   

  	
  31st December, 2005

  

 

20.3                        Ratio
of EBITDAR to Net Financial Expenses

 

The Company shall procure
that the ratio of its EBITDAR to its Net Financial Expenses is not, at the end
of each Ratio Period ending on the Testing Date set out in the column under the
heading “Testing Date” in the table below, less than the ratio set out opposite
that Testing Date in the table below:

 

	
  Ratio

  	
   

  	
  Testing Date

  
	
  1.75 to 1.0

  	
   

  	
  31st March, 2004

  
	
  1.20 to 1.0

  	
   

  	
  30th June, 2004

  
	
  1.20 to 1.0

  	
   

  	
  30th September, 2004

  
	
  1.20 to 1.0

  	
   

  	
  31st December, 2004

  
	
  1.35 to 1.0

  	
   

  	
  31st March, 2005

  
	
  1.60 to 1.0

  	
   

  	
  30th June, 2005

  
	
  1.80 to 1.0

  	
   

  	
  30th September, 2005

  
	
  2.00 to 1.0

  	
   

  	
  31st December, 2005

  

 

20.4                        Consolidated
Net Indebtedness

 

The Company shall procure
that the Consolidated Net Indebtedness is not on each Testing Date set out in
the column under the heading “Testing Date” in the table below greater than the
amount set out opposite that Testing Date in the table below:

 

	
  Amount

  	
   

  	
  Testing Date

  
	
  €

  	
  4,050,000,000

  	
   

  	
   

  	
  31st March, 2004

  
	
  €

  	
  3,450,000,000

  	
   

  	
   

  	
  30th June, 2004

  
	
  €

  	
  3,450,000,000

  	
   

  	
   

  	
  30th September, 2004

  
	
  €

  	
  3,350,000,000

  	
   

  	
   

  	
  31st December, 2004

  
	
  €

  	
  3,350,000,000

  	
   

  	
   

  	
  31st March, 2005

  
	
  €

  	
  3,250,000,000

  	
   

  	
   

  	
  30th June, 2005

  
	
  €

  	
  3,250,000,000

  	
   

  	
   

  	
  30th September, 2005

  
	
  €

  	
  3,250,000,000

  	
   

  	
   

  	
  31st December, 2005

  

 

55

 

20.5                        Restructuring
Costs

 

The consolidated
restructuring costs of the Group accumulated since the date of the Original
Business Plan (based on the latest consolidated semi-annual or annual financial
statements of the Company) shall not exceed on the date set out in the table
below the percentage of the restructuring costs set out opposite that date and
referred to in the Original Business Plan:

 

	
  Date

  	
   

  	
  % of restructuring costs

  of Original Business Plan

  
	
  31st December, 2004

  	
   

  	
  115%

  
	
  30th June, 2005

  	
   

  	
  120%

  
	
  31st December, 2005

  	
   

  	
  130%

  

 

20.6                        Calculation
and interpretation

 

(a)                                  All
the terms used in Clause 20.1 (Financial covenant definitions) are to be
calculated in accordance with the accounting principles and practices applied
in connection with the Original Financial Statements, consistently applied.

 

(b)                                 The
Company shall promptly notify the Facility Agent of:

 

(i)                                     each
change in the accounting principles and practices in accordance with which the
Company’s consolidated financial statements are prepared; and

 

(ii)                                  each
change in the end of the Company’s financial year.

 

(c)                                  Following
each change of the type referred to in paragraph (b) above, the Company shall:

 

(i)                                     procure
that its chief financial officer or (if the Facility Agent so requests) its
statutory auditors deliver with the audited financial statements of the Company
next delivered under Clause 19.1 (Financial information) (the New Accounts)
a certificate containing a description of the change in the basis on which the
Company’s consolidated financial statements are prepared from that used in the
preparation of the consolidated financial statements of the Company delivered
immediately prior to the change (the Old Accounts) and information:

 

(A)                              sufficient,
in the reasonable opinion of the Majority Lenders, to allow the Finance Parties
to make an accurate comparison of the Company’s financial position as set out
in the Old Accounts and that set out in the New Accounts and any adjustments
necessary to ensure that the New Accounts reflect the format, and/or basis used
in the preparation, of the Old Accounts; and

 

(B)                                sufficient,
in the reasonable opinion of the Facility Agent, to enable the Facility Agent
to ascertain the compliance by the Company with the financial covenants
contained in Clauses 20.2 (Ratio of Consolidated Net Indebtedness to Adjusted
EBITDAR) and 20.3 (Ratio of EBITDAR to Net Financial Expenses); and

 

(ii)                                  at
the request of the Facility Agent (acting on the instructions of the Majority
Lenders), negotiate in good faith with the Facility Agent with a view to
agreeing such amendments to this Clause 20 as may be necessary to ensure that
the Finance Parties’ interests under this Agreement are not prejudiced by such
change.

 

(d)                                 If:

 

(i)                                     the
Facility Agent, acting reasonably, disputes (1) the Company’s statutory
auditors’ interpretation of any term in Clause 20.1 (Financial covenant
definitions) or any computation under this Clause 20, in each case, contained
in a certificate delivered by the Company under Clause 19.1 (Financial
information) or (2) any certificate or the contents thereof delivered by the
Company’s statutory auditors; or

 

56

 

(ii)                                  if
no agreement is reached within 30 days of a request by the Facility Agent under
paragraph (c)(ii) above),

 

the Facility Agent may,
at the expense of the Company, instruct an independent expert (which shall be
an internationally recognised independent qualified firm of auditors) to act as
an expert and not as an arbitrator, and the determination of such expert shall
be final and binding on the Parties and, in the case of an instruction made
pursuant to paragraph (d)(ii) above, this Agreement will be amended to the
extent such expert advises to be necessary to ensure that the Finance Parties’
interests under this Agreement are not prejudiced by the change of the type
referred to in paragraph (b) above. 

 

21.                               GENERAL COVENANTS

 

21.1                        General

 

Each Obligor party to
this Agreement agrees to be bound by the covenants set out in this Clause
relating to it and, where the covenant is expressed to apply to another Obligor
or member of the Group or Material Subsidiary, the Company must ensure that such
Obligor or member of the Group or Material Subsidiary performs and complies
with that covenant.

 

21.2                        Authorisations

 

Each Obligor and Material
Subsidiary shall promptly:

 

(a)                                  obtain,
maintain and comply with the terms of; and

 

(b)                                 supply
certified copies to the Facility Agent of,

 

any authorisation
required or desirable under any law or regulation to enable it to enter into or
to perform its obligations under, or for the performance, validity or
enforceability of, and the transactions contemplated by, any Transaction
Document to which it is a party and to enable the implementation of the Asset
Disposal Programme and the Rights Issue.

 

21.3                        Pari
passu ranking

 

Each Obligor shall ensure
that its obligations under the Finance Documents and Secured Intra-Group Loans
do and will rank at least pari passu with all its present and future
unsecured and unsubordinated obligations, except for obligations mandatorily
preferred by law applying to companies generally.

 

21.4                        Negative
pledge

 

(a)                                  No
Obligor or Material Subsidiary shall create or permit to subsist any Security
Interest on any of its assets.

 

(b)                                 Paragraph
(a) does not apply to:

 

(i)                                     any
Security Interest constituted by the Security Documents securing Financial
Indebtedness referred to therein (including refinancing thereof provided that
the amount of such Financial Indebtedness is not increased);

 

(ii)                                  any
Security Interest listed in Schedule 7 Part 1 (Existing Security) securing
Financial Indebtedness referred to therein (including refinancing thereof
provided that the amount of such Financial Indebtedness is not increased);

 

(iii)                               any
Security Interest constituted for the purpose of a Derivative Deposit securing
Financial Indebtedness under Derivative Instruments in an amount no greater
than the lower of €40,000,000 and the aggregate amount of Derivative Deposits
made on the Term Date;

 

(iv)                              any
Security Interest constituted by the giving of cash cover pursuant to this
Agreement;

 

57

 

(v)                                 any
lien arising by operation of law in the ordinary course of business and
securing amounts not more than 30 days overdue;

 

(vi)                              any
Security Interest arising out of title retention provisions in a supplier’s
standard conditions of supply in respect of goods acquired by the relevant
Obligor or Material Subsidiary in the ordinary course of business;

 

(vii)                           any
Security Interest created in the ordinary course of business in connection with
workers’ compensation, unemployment insurance, deferred compensation plans or
retirement plans for key managers and other types of social security;

 

(viii)                        any
Security Interest arising out of orders of attachment, distraint or similar
legal process arising in connection with court proceedings so long as the
claims secured are being contested in good faith;

 

(ix)                                any
Security Interest over assets other than those referred to in paragraph (i)
above, to the extent necessary in order to maintain, refinance or replace any
existing Financial Indebtedness or, to the extent permitted by this Agreement, incur
new Financial Indebtedness provided that the aggregate amount of all such
Financial Indebtedness when aggregated with the amount of the finance raised
under Clause 21.5(b)(ii) below does not exceed a maximum aggregate amount of
€200,000,000 (or its equivalent in other currencies) of which a maximum aggregate
amount of €150,000,000 (or its equivalent in other currencies) may be incurred
by the Obligors.

 

21.5                        Transactions
similar to security

 

(a)                                  No
Obligor or Material Subsidiary shall:

 

(i)                                     sell,
transfer or otherwise dispose of any of its assets (including without
limitation sale and lease back and sale and repurchase agreements) on terms
whereby it is or may be leased to or re-acquired or acquired by a member of the
Group or any of its related entities; or

 

(ii)                                  sell,
transfer or otherwise dispose of any of its receivables on recourse terms,

 

in circumstances where
the transaction is entered into primarily as a method of raising finance or of
financing the acquisition of an asset.

 

(b)                                 Paragraph
(a) above does not apply to:

 

(i)                                     any
disposal of receivables made in respect of Securitisation Programmes with
Limited Recourse only; or

 

(ii)                                  any
other transaction provided the amount of finance raised when aggregated with
the Financial Indebtedness secured by a Security Interest pursuant to Clause
21.4(b)(ix) does not exceed €200,000,000 (or its equivalent in other
currencies) of which a maximum amount of €150,000,000 (or its equivalent in
other currencies) may be incurred by the Obligors.

 

21.6                        Disposals

 

(a)                                  No
Obligor or Material Subsidiary shall, either in a single transaction or in a
series of transactions, whether related or not, dispose of all or any part of
its assets.

 

(b)                                 Paragraph
(a) does not apply to:

 

(i)                                     disposal
of stock-in-trade, business inventories, fixtures and fittings, furniture and
other office equipment, made in the ordinary course of business of the
disposing entity;

 

(ii)                                  disposal
of assets (other than shares) in exchange for other assets comparable or
superior as to type, value and quality;

 

58

 

(iii)                               disposal
of assets (other than the business of the Company) or shares as part of an
intra-group re-organisation from one Obligor to another Obligor on arms’-length
terms, in each case, subject to and in accordance with Clause 21.8 (Mergers, acquisitions
and intra-group re-organisations);

 

(iv)                              disposal
of assets for cash in accordance with the Asset Disposal Programme and other
disposal of assets for cash where an amount equal to fifty per cent. (50%) of
the net disposal proceeds of any such disposal are applied in mandatory
prepayment and cancellation of the Facilities subject to and in accordance with
Clause 9.3 (Mandatory Prepayment—disposals, equity and capital market issues)
of this Agreement;

 

(v)                                 disposal
of assets made in respect of the Securitisation Programmes with Limited
Recourse only;

 

(vi)                              disposal
for cash on a non-recourse basis of VAT credits; or

 

(vii)                           transactions
with the prior written approval of the Majority Lenders.

 

21.7                        Change
of business/registered office

 

(a)                                  The
Company shall procure that no substantial change is made to the general nature
or scope of the business of the Company or the Group (taken as a whole) from
that carried on at the date of this Agreement.

 

(b)                                 The
Company shall not change its place of incorporation or registered head office
to one outside the European Union.

 

21.8                        Mergers,
acquisitions and intra-group re-organisations

 

(a)                                  No
Obligor or Material Subsidiary shall enter into any amalgamation, demerger,
merger, reconstruction or re-organisation otherwise than under an intra-Group
re-organisation on a solvent basis involving the transfer of assets (including
a business other than the business of the Company) and/or shares provided that
such intra-group re-organisation:

 

(i)                                     unless
a Permitted Reorganisation, does not involve the Company;

 

(ii)                                  does
not affect any assets which are or are intended to be subject to Security
Interests granted in favour of the Lenders under the Security Documents or, to
the extent that it does affect any such assets, substitute Security Interests
are granted over assets of a greater or equivalent value prior to such
intra-group re-organisation (together with legal opinions and auditors
valuations) in each case in a form and substance satisfactory to the Majority
Lenders;

 

(iii)                               does
not or is not reasonably likely to result in a Material Adverse Effect or in a
Default;

 

(iv)                              does
not affect any of the rights or remedies of the Lenders under the Finance
Documents; and

 

(v)                                 where
it involves an Obligor (other than transfer of its shares) the Lenders have
provided their prior written consent.

 

(b)                                 Save
as allowed by paragraph (c) below, no Obligor or Material Subsidiary shall and
the Company shall ensure to the fullest extent within its power or control that
no Joint Venture Entity will, acquire any assets or business or make any
investment in any business, shares or other securities.

 

(c)                                  Paragraph
(b) above shall not prevent:

 

(i)                                     acquisitions
or investments made in the ordinary course of trade or other acquisitions or
investments which when taken together do not have a maximum aggregate
consideration since the date of the Secured Co-ordination Agreement until 31st
December, 2004 in excess of €10,000,000 

 

59

 

or its equivalent in other
currencies and thereafter a maximum aggregate consideration in excess of
€20,000,000 per annum or its equivalent in other currencies;

 

(ii)                                  acquisitions
or investments made with the prior written consent of the Facility Agent
(acting on the instructions of the Majority Lenders); or

 

(iii)                               capital
contributions made to Relevant Entities or Joint Venture Entities by way of
inter-company loan or share capital provided that the aggregate amount of such
contributions made since the date of the Secured Co-ordination Agreement less
the aggregate amount of (A) contributions repaid directly or indirectly to the
Company; and (B) the amount of any dividend distributed directly or indirectly
to the Company with respect to that capital contribution to the extent in excess
of the dividends projected to be received by the Company and Subsidiaries on a
fully consolidated basis by reference to the latest Business Plan does not
exceed at any time €90,000,000 (or its equivalent in other currencies), taking
into account any capital contributions made under Clause 21.12(c)(i) (Lending,
borrowing and guarantees).

 

21.9                        Capital
expenditure

 

No Obligor or other
member of the Group shall incur any tangible or intangible capital expenditure
except where such capital expenditure (excluding to the extent otherwise
included amounts resulting solely from the re-consolidation of non-consolidated
operating leases existing on 31st December, 2003) in aggregate does not exceed
110 per cent. per annum of the aggregate amount of capital expenditure per
annum set out in the latest Business Plan.

 

21.10                 Insurance

 

Each Obligor and Material
Subsidiary shall insure its business and assets with insurance companies to
such an extent and against such risks as companies engaged in a similar
business normally insure.

 

21.11                 Maintenance
of status

 

Each Obligor and Material
Subsidiary shall:

 

(a)                                  do
all such things as are necessary to maintain its corporate existence; and

 

(b)                                 ensure
that it has the right and is duly qualified to conduct its business as it is
conducted in all applicable jurisdictions.

 

21.12                 Lending,
borrowing and guarantees

 

(a)                                  Subject
to paragraphs (b),(c) and (d) below, no Obligor or member of the Group shall
make any loans or provide any other form of credit (including, without limitation,
vendor credit) to any person.

 

(b)                                 Paragraph
(a) does not apply to Intra-Group Loans and any other form of credit provided
to the Company subject to and in accordance with the Subordination Agreement
when entered into and otherwise in accordance with its cash pooling
arrangements.

 

(c)                                  Paragraph
(a) does not apply to:

 

(i)                                     capital
contributions made to Relevant Entities or Joint Venture Entities by way of
inter-company loan or share capital provided that the aggregate amount of
contributions made by way of share capital or inter-company loan since the date
of the Secured Co-ordination Agreement less the aggregate amount of (A) such
contributions repaid directly or indirectly to the Company; and (B) the amount
of any dividend distributed directly or indirectly to the Company with respect
to that capital contribution to the extent in excess of the dividends expected
to be received by reference to the latest Business Plan, does not exceed at any
time €90,000,000, taking into account 

 

60

 

any capital contributions
made under Clause 21.8 (Mergers, acquisitions and intra- group
re-organisations); or

 

(ii)                                  capital
contributions made to Primester Inc. by way of capital contribution or
intercompany loan for the purpose of refinancing its Existing Facility in a
maximum aggregate amount equal to €115,000,000 (or its equivalent in other
currencies).

 

(d)                                 Paragraph
(a) does not apply to trade credit which does not constitute Financial
Indebtedness, which is made on customary terms and in the ordinary course of
business and in respect of which the credit is repayable within 120 days.

 

(e)                                  No
Obligor or member of the Group shall give any guarantee or indemnity to or for
the benefit of any person in respect of any obligation of any other person or
enter into any document under which it assumes any liability of any other
person.

 

(f)                                    Paragraph
(e) does not apply to:

 

(i)                                     guarantees
or indemnities under the Existing Facilities (as refinanced from time to time
provided that the amount outstanding is not increased);

 

(ii)                                  guarantees
or indemnities under this Agreement;

 

(iii)                               customary
vendor warranties, garanties de passif or indemnities
including in respect of employees’ compensation, insurance, environmental laws
in respect of sale and purchase agreements permitted under this Agreement and
which are reasonable in the context of such sale and purchase agreements;

 

(iv)                              customary
garanties
de passif or indemnities or guarantees referred to in paragraph (d)
above made in the ordinary course of business in favour of trade customers with
respect to its supply contracts and purchase agreements which do not constitute
Financial Indebtedness;

 

(v)                                 guarantees
given by the Company in respect of Financial Indebtedness of any of its
Subsidiaries permitted pursuant to Clause 21.13 (Financial Indebtedness); or

 

(vi)                              notwithstanding
Clause 21.13(h) the re-issue of the guarantee by Rhodia Brazil Ltda in respect
of the factoring facility provided for the benefit of Rhodia Ster expiring in
March 2005 in a maximum amount of US$40,000,000 in substantially the same
form as at 31st December, 2003.

 

21.13                 Financial
Indebtedness

 

The Company shall not and
it shall ensure that no member of the Group will and, to the fullest extent
within its power or control, no Relevant Entity shall incur any Financial Indebtedness
(including, without limitation, guarantees of joint venture entities) except:

 

(a)                                  any
Financial Indebtedness incurred under the Finance Documents;

 

(b)                                 Financial
Indebtedness outstanding under the Existing Facilities at the date of this
Agreement;

 

(c)                                  Financial
Indebtedness owed to another member of the Group on the date of this Agreement
and thereafter in accordance with its cash pooling arrangements and in the case
of an Intra-Group Loan and any other form of credit provided to the Company
which is subordinated subject to and in accordance with the Subordination
Agreement;

 

(d)                                 refinancing
of Financial Indebtedness with a Facility Agreement on terms which do not bring
forward the maturity date or put or seek to put the creditor under that Facility
Agreement in a preferred position as against any Lender;

 

61

 

(e)                                  Financial
Indebtedness incurred by the Company under any Facility Agreement on terms
which do not put the creditor under that Facility Agreement in a preferred
position against any Lender and which does not or could not be expected to have
a Material Adverse Effect or result in a Default;

 

(f)                                    Financial
Indebtedness in respect of any issue of bonds, notes, debt securities or
capital markets instruments, fifty per cent. (50%) of the net proceeds of which
are applied pursuant to Clause 9.3(d) in mandatory prepayment and cancellation
of the Facilities; or

 

(g)                                 Financial
Indebtedness permitted pursuant to Clauses 21.12(b) and 21.12(c) (Lending, borrowing
and guarantees).

 

(h)                                 provided
that as a result there is no Material Adverse Effect, any other Financial
Indebtedness incurred after the date of this Agreement, by a Subsidiary of the
Company or a Relevant Entity, provided that at no time does the ratio expressed
as a percentage of the aggregate Financial Indebtedness of the Subsidiaries of
the Company (other than Rhodia Inc.) (excluding Intra-Group Loans) to the
Company’s unconsolidated Financial Indebtedness (excluding Intra- Group Loans)
exceed 22%.

 

21.14                 Shares
and dividends

 

(a)                                  The
Company shall not:

 

(i)                                     convene
a meeting of shareholders to consider a resolution to make any distribution or
pay any dividend, or other payment (in cash or in kind) in respect of any of
its share capital or any management fees or charges in favour of its
shareholders’ or its shareholders’ Affiliates; or

 

(ii)                                  reduce,
redeem, repurchase or retire any of its share capital,

 

except,

 

(A)                              distributions
of dividends by the Company made by way of equity securities issued by the
Company; or

 

(B)                                provided
that no Default has occurred which is continuing, any other distribution of
dividends by the Company provided that the Company’s Consolidated Net Income is
positive and such distributions do not exceed a maximum aggregate amount of
€20,000,000 (or its equivalent in other currencies) and the actual payment of
such distribution does not occur prior to the Medium-Term Facility Final
Maturity Date.

 

(b)                                 Before
declaring or making any distribution permitted under paragraph (a) above, the
Company will provide a certificate signed by its chief financial officer to the
Facility Agent setting out projections demonstrating compliance with each
financial covenant ratio under Clauses 20 (Financial Covenants) for the then
next Testing Date having taken into account such distribution.

 

(c)                                  The
Company shall (to the fullest extent permitted by applicable law):

 

(i)                                     procure
that no Material Subsidiary enters into any arrangement or agreement which may
restrict its ability to declare, make or pay any dividend on or in respect of
its share capital (or any class of its share capital) or restrict its ability
to distribute any dividend; and

 

(ii)                                  procure
that each Material Subsidiary will to the extent necessary and in the case of
Rhodia Inc. to the fullest extent permitted to do so under the Agreed Affected
Lease Facilities to ensure that the Company has funds available to it to
service its payment obligations under the Finance Documents, declare, make and
pay in cash dividends in respect of its shares or reimburse intercompany loans
unless doing so will prevent that Material Subsidiary from being able to meet
its payment obligations which are then due and payable.

 

62

 

21.15                 Repayments
of inter-group Financial Indebtedness

 

No Obligor or Material
Subsidiary shall prepay or repay any amounts of Financial Indebtedness owed to
its shareholders or any member of the Group except:

 

(a)                                  if
a Secured-Intra Group Loan an amount equal to that repayment is prepaid subject
to and in accordance with Clause 9.3(g); and

 

(b)                                 if
not a Secured-Intra Group Loan:

 

(i)                                     if
made to the Company directly or indirectly (including via Rhodia Finances and
Rhodia Financial Services Inc.); and

 

(ii)                                  whilst
no Default is outstanding if made:

 

(A)                              in
accordance with the cash pooling arrangements existing at the date of this
Agreement; or

 

(B)                                with
respect to sales and purchases of goods and services or trade receivables in
its ordinary course of business and which does not result in a Default; or

 

(C)                                otherwise
to the extent permitted in the Subordination Agreement

 

21.16                 No
set-off

 

No Obligor or Material
Subsidiary shall exercise any right of set-off or counterclaim against any
person nor agree to or permit any set-off to occur without the prior written
consent of the Majority Lenders except for:

 

(a)                                  any
right of set-off or consolidation of accounts which is (i) contractual or
arising as a matter of law; or (ii) pursuant to legally binding netting
arrangements in force on the date of this Agreement in each case with any
person outside the Group; or

 

(b)                                 to
the extent expressly permitted by the Subordination Agreement.

 

21.17                 Rights
Issue and Other Matters

 

(a)                                  The
Company shall:

 

(i)                                     launch
the Rights Issue by no later than 15th May, 2004; and

 

(ii)                                  implement
the Asset Disposal Programme (in accordance with the terms of the definition
thereof).

 

(b)                                 The
Company shall notify the Facility Agent promptly upon becoming aware of:

 

(i)                                     any
failure to obtain or maintain any authorisation, consent or other condition
necessary for the disposal of an asset referred to in the Asset Disposal
Programme or the launch and implementation of the Rights Issue in order to
enable the Asset Disposal Programme and the Rights Issue to be implemented; or

 

(ii)                                  of
any decision by it not to implement the Asset Disposal Programme or the Rights
Issue.

 

21.18                 Joint
Ventures

 

No Obligor or Material
Subsidiary will enter into or acquire any interest in any new joint venture,
partnership or similar arrangement except where any such interest is held
through an entity incorporated with limited liability and does not result in or
could not reasonably be expected to result in a breach of any other provisions
of any Finance Document.

 

63

 

21.19                 Compliance
with laws

 

Each Obligor and Material
Subsidiary shall comply in all material respects with all applicable laws and
regulations of any governmental authority, whether domestic or foreign, having
jurisdiction over it or any of its assets, where failure to comply with any
such laws or regulations has, or could be expected to have, in each case in the
reasonable opinion of the Majority Lenders, a Material Adverse Effect.

 

21.20                 Compliance
with Environmental Laws and Indemnity

 

(a)                                  Each
Obligor and Material Subsidiary shall:

 

(i)                                     obtain
any and all Environmental Licences required for the carrying on of its business
as currently conducted; and

 

(ii)                                  comply
in all material respects with (i) the terms and conditions of such Environmental
Licences and (ii) all other applicable Environmental Law which in each case, if
not complied with, has, or could be expected to have, in each case in the
reasonable opinion of the Majority Lenders, a Material Adverse Effect or result
in any liability for the Finance Parties in excess of €5,000,000 in aggregate.

 

(b)                                 The
Company shall indemnify each Finance Party and their respective officers,
employees, agents and delegates (together the Indemnified Parties) against
any cost or expense suffered or incurred by them (except if caused by their own
negligence or wilful default) which:

 

(i)                                     arises
by virtue of any actual or alleged breach of any Environmental Law (whether by
any Obligor, an Indemnified Party or any other person); or

 

(ii)                                  arises
by virtue of the release or threatened release of, or exposure to, any
Dangerous Substance stored or handled upon, transported from, or otherwise
associated with, the past or present facilities or operations of any Obligor or
Group member.

 

Each Indemnified
Party may rely on this Clause 21.20 and enforce its terms under the Contracts
(Rights of Third Parties) Act 1999.

 

21.21                 Arm’s-length
terms

 

No Obligor or Material
Subsidiary will enter into any transaction with any person except on ordinary
commercial terms and on the basis of arm’s-length arrangements, or enter into
any transaction whereby any Obligor or Material Subsidiary might pay more than
the ordinary commercial consideration for any purchase or acquisition or might
receive less than full commercial consideration for its services or products.

 

21.22                 Access

 

Upon the occurrence of an
Event of Default which is continuing, each Obligor and Material Subsidiary must
allow any one or more representatives of the Facility Agent and/or accountants
or other professional advisers appointed by the Facility Agent (at the
Company’s risk and expense) to have access during normal business hours to the
assets, books and records of that member of the Group and to inspect the same.

 

21.23                 Security
and Subordination

 

The Obligors shall and
the Company shall ensure that each relevant member of the Group will at their
own expense:

 

(a)                                  enter
into the Security Documents in accordance with the Agreed Security Principles
with the Finance Parties and other creditors under facilities which are to
benefit from the Security Documents as soon as reasonably practicable and in
any event within 15 Business Days following the date on which it is not
prevented from doing so under the terms of the USPP;

 

64

 

(b)                                 provide
to the Lenders prior to the date of the first Request a certificate from the
chief financial officer of the Company confirming that the total net assets and
EBITDA directly or indirectly subject to the Security Documents are greater or equal
to 95% of the total net assets and EBITDA of the Group in each case calculated
by reference to the latest audited financial statements and thereafter on each
occasion that an asset subject directly or indirectly to a Security Document is
replaced;

 

(c)                                  execute
and do all such assurances, acts and things as the Facility Agent and the
Security Agent when appointed may reasonably require to effect the above
including perfecting or protecting the security intended to be afforded by the
Security Documents and shall deliver to the Facility Agent and the Security
Agent, at the same time, such directors’ and shareholders’ resolutions, title
documents and other documents and legal opinions as set out in Part 1 of
Schedule 2 (Conditions precedent documents) and otherwise as the Facility
Agent and the Security Agent may reasonably require in relation to the same.

 

21.24                 ERISA
Reporting Requirements

 

The following shall be
provided to the Facility Agent:

 

(a)                                  (i)
promptly and in any event within 10 Business Days after any Obligor or any
ERISA Affiliate knows or has reason to know that any ERISA Event has occurred
that is reasonably expected to have a Material Adverse Effect, a statement of
the chief financial officer of the Obligor describing such ERISA Event and the
action, if any, that such Obligor or such ERISA Affiliate has taken and
proposes to take with respect thereto; and

 

(ii)                                  on
the date any records, documents or other information must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of
such records, documents and information;

 

(b)                                 promptly
and in any event within five Business Days after receipt thereof by any Obligor
or any ERISA Affiliate, copies of each notice from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed to administer
any Plan;

 

(c)                                  promptly
upon request of the Facility Agent/a Finance Party, copies of each
Schedule B (Actuarial Information) to the most recent annual report (Form
5500 Series) with respect to each Plan; and

 

(d)                                 promptly
and in any event within five Business Days after receipt thereof by any Obligor
or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each
notice concerning (i) the imposition of Withdrawal Liability by any such Multiemployer
Plan that is reasonably expected to have a Material Adverse Effect, (ii) the
reorganisation or termination, within the meaning of Title IV of ERISA, of any
such Multiemployer Plan that is reasonably expected to have a Material Adverse
Effect or (iii) the amount of liability incurred, or that may be incurred, by
such Obligor or any ERISA Affiliate in connection with any event described in
Clause (i) or (ii).

 

21.25                 United
States laws

 

(a)                                  The
Company will not, either by act or omission, become, or permit any other
Obligor, to become, subject to regulation under PUHCA.

 

(b)                                 The
Company will not, either by act or omission, become, or permit any other
Obligor, to become, subject to regulation under the Federal Power Act.

 

(c)                                  The
Company will not, either by act or omission, become, or permit any other
Obligor to become, an investment company or a company controlled by an
investment company.

 

65

 

21.26                 Cash
pooling / Intra-Group loan arrangements

 

(a)                                  The
Company shall use its best efforts to maintain its and its Subsidiaries’
existing cash pooling arrangements as are currently in force at the date of
this Agreement where failure to so maintain has or would be reasonably likely
to have a Material Adverse Effect.

 

(b)                                 The
Company will ensure that all Secured Intra-Group Loans, and all other
Intra-Group Loans directly or indirectly subject to a Security Document and,
subject to and in accordance with the Subordination Agreement, Intra-Group
Loans are documented in the relevant form of the agreed Intra-Group Loan
agreement.

 

(c)                                  The
Company will ensure that all Intra-Group Loans provided to it are subject to
the Subordination Agreement on or before incurring any such Intra- Group Loan.

 

21.27                 Leasing

 

No Obligor or Material
Subsidiary will enter into any lease or leasing arrangements (or amend the
terms thereof) other than:

 

(a)                                  (i)
the existing arrangements for the leasing of assets set out in Schedule 7
Part 2 (Existing Indebtedness), as may be replaced with lease arrangements if
made or amended on the same or on no less favourable terms to such Obligor or
Material Subsidiary as the existing arrangements;

 

(ii)                                  any
new lease or leasing arrangements for other assets if made or amended on
customary terms for such assets in the ordinary course of its business,

 

and provided that
in each case above, doing so does not and could not reasonably be expected to
be adverse to the interests of an Obligor or a Material Subsidiary or the
Lenders or otherwise result in a Default;

 

(b)                                 amendments
made to the Affected Lease Facilities in the form of the Agreed Affected Lease
Facilities.

 

21.28                 Existing
Facilities and Treasury Transactions

 

(a)                                  No
Obligor or Material Subsidiary shall:

 

(i)                                     make
any voluntary prepayment or cancellation of any amount outstanding or drawable
under any Existing Facility or the Refinanced Facilities prior to its
originally scheduled maturity date or scheduled expiry date other than the
First Payment, Second Payment and mandatory prepayment amount under and as
detailed in the USPP in accordance with the Second Amendment Agreement or in
accordance with the Secured Co-ordination Agreement; or

 

(ii)                                  make
any amendment to the terms of any Existing Facility in any way that is or could
reasonably be expected to be adverse to its interests (including, without
limitation, by advancing any scheduled maturity date or other payment
obligation or any covenant or default provision more favourable to the
counterparty in respect of a Facility Agreement than those under this
Agreement, unless at the same time this Agreement is amended to substantially
the same extent and on substantially the same terms as provided to that
counterparty).

 

(b)                                 The
Company and each Material Subsidiary will utilise, and draw down under, its Facility
Agreements in full and for the longest interest period permitted under any such
facility prior to utilising and drawing down under the Agreement.

 

(c)                                  No
Obligor or Material Subsidiary will enter into any Derivative Instrument or any
similar treasury transaction save where entered into in the ordinary course of
its business for non-speculative

 

66

 

purposes and which is
consistent with the prudent management of its business and for hedging
purposes.

 

(d)                                 No
Obligor or Material Subsidiary will terminate, close out or otherwise cancel
any of its Derivative Instruments unless (i) it (acting reasonably) does so in
order to minimise or limit further losses or (ii) the underlying transaction
hedged by any such swap or derivative instrument has been cancelled or
terminated or (iii) at the date of termination, close out or cancellation such
swap or derivative instrument is in the money for it or (iv) if the Exposure
(as that term is defined in the Secured Co-ordination Agreement) under that
Derivative Instrument has increased since the Term Date and the Obligor or
Material Subsidiary is not permitted to provide a Derivative Deposit under this
Agreement with respect to that Exposure.

 

21.29                 Margin
Regulation

 

The Borrowers will use
the proceeds of the Utilisations only for the purpose described in Clause 3
(Purpose). No Obligor will engage in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations U and X issued by the Board of Governors of the United States
Federal Reserve System), and no portion of any Utilisation will be used,
directly or indirectly, to purchase or carry margin stock or to extend credit
to others for the purpose of purchasing or carrying margin stock.

 

21.30                 Refinanced
Facilities

 

The Company shall ensure
that each Refinanced Facility is cancelled and prepaid in full on or prior to
the date of the first Request. 

 

22.                               DEFAULT

 

22.1                        Events
of Default

 

Each of the events set
out in this Clause is an Event of Default (whether or not caused by any reason
whatsoever outside the control of any Obligor or other person).

 

22.2                        Non-payment

 

An Obligor does not pay
on the due date any amount payable by it under any Finance Document in the manner
required under the Finance Documents, unless the non-payment:

 

(a)                                  is
caused by technical or administrative error; and

 

(b)                                 is
remedied within three Business Days of the due date.

 

22.3                        Breach
of other obligations

 

(a)                                  (i)
The Company does not comply with any term of Clause 20 (Financial Covenants) or
Clause 21.17 (Rights Issue and Other Matters); or

 

(ii)                                  at
any time the projections set out in the most recent Business Plan show that the
Company will not be in compliance with any term of Clause 20 (Financial
Covenants) on the then next Testing Date.

 

(b)                                 An
Obligor does not comply with any of its obligations (other than as referred to
in paragraph (a) above) under any Finance Document not already referred to in
paragraph (a) above unless the non-compliance is capable of remedy and is
remedied within fifteen calendar days of the earlier of the Facility Agent
giving notice and the Obligor becoming aware of the non-compliance.

 

22.4                        Misrepresentation

 

(a)                                  A
representation, warranty or statement made or repeated in or in connection with
any Finance Document or in any document delivered by or on behalf of any
Obligor under or in 

 

67

 

connection with any
Finance Document is incorrect in any material respect when made or deemed to be
made or repeated.

 

(b)                                 The
Majority Lenders determine that a representation, warranty or statement made or
repeated in or in connection with the Rights Issue or in any document delivered
by or on behalf of any Obligor under or in connection with the Rights Issue is
incorrect in any material respect when made or deemed to be made or repeated.

 

22.5                        Cross-default

 

(a)                                  Any
of the following occurs in respect of any Obligor or Material Subsidiary:

 

(i)                                     any
of its Financial Indebtedness is not paid when due after the expiry of any
applicable grace periods; or

 

(ii)                                  any
event of default, termination event, early repayment event or prepayment event
or circumstance howsoever described occurs under any document relating to its
Financial Indebtedness (other than this Agreement) including, without
limitation, under the High Yield Bonds; or

 

(iii)                               any
of its Financial Indebtedness is (or becomes capable of being) declared
prematurely due and payable or placed on demand as a result of an event of
default, termination event, early repayment event or prepayment event
(howsoever described) under the document relating to that Financial
Indebtedness including, without limitation, under the High Yield Bonds; or

 

(iv)                              any
commitment for, or underwriting of, any Financial Indebtedness is cancelled or
suspended as a result of an event of default, termination event, early
repayment event or prepayment event (howsoever described) under the document
relating to that Financial Indebtedness; or

 

(v)                                 any
Security Interest securing Financial Indebtedness over any of its asset(s)
becomes enforceable.

 

(b)                                 There
shall only be an Event of Default under this Clause 22.5, (i) if the aggregate
amount of Financial Indebtedness which is not paid when due or after the expiry
of any applicable grace period and/or to which that event of default,
termination event, early repayment event or prepayment event relates and/or
which is (or becomes capable of being) declared prematurely due and payable or
placed on demand in each case under paragraphs (a)(i), (a)(iii) or (a)(v) above
exceeds €15,000,000 (or the equivalent in other currencies) or under paragraphs
(a)(ii) or (a)(iv) above exceeds €35,000,000 (or the equivalent in other
currencies).

 

(c)                                  Paragraphs
(a)(ii) and (a)(iii) do not apply only in the case of an early prepayment event
under the Agreed Affected Lease Facilities on the terms of the sections headed
“Disposals in accordance with ADP from Rhodia Inc. assets” or “Mandatory
Prepayments—ADP” of Schedule 16 Part 2 (Supplemental Lease Amendment
Principles).

 

22.6                        Insolvency

 

Any of the following
occurs in respect of an Obligor or a Material Subsidiary:

 

(a)                                  it
is, or is deemed for the purposes of any law to be, unable to pay its debts as
they fall due or insolvent (including without limitation en état de cessation des paiements);

 

(b)                                 it
admits inability to pay its debts as they fall due;

 

(c)                                  it
suspends making payments on all or of its or any class of its debts or
announces an intention to do so;

 

(d)                                 a
moratorium is declared in respect of any of its indebtedness;

 

68

 

(e)                                  by
reason of financial difficulties, applies for, or is subject to, an amicable
settlement or a réglement amiable pursuant to Article L-611-3 of the Code de
Commerce of France, or begins negotiations with one or more of its
creditors with a view to the readjustment or rescheduling of any of its
indebtedness; or

 

(f)                                    its
situation becomes irremediably compromised or it acts otherwise within the
meaning of Article L.313-12 of the Code Monétaire et Financier.

 

22.7                        Insolvency
proceedings

 

Any of the following
occurs in respect of an Obligor or a Material Subsidiary:

 

(a)                                  any
step (including petition, proposal or convening a meeting) is taken with a view
to a composition, assignment or arrangement with any of its creditors;

 

(b)                                 a
meeting is convened for the purpose of considering any resolution for (or to
petition for) its winding-up, administration or dissolution (including without
limitation dissolution,
liquidation or redressement judiciaire) or any such
resolution is passed;

 

(c)                                  any
person presents a petition for its winding-up or administration;

 

(d)                                 an
order for its winding-up, administration, dissolution or bankruptcy is made; or

 

(e)                                  a
judgement is issued for the judicial liquidation (liquidation judiciaire) or
the transfer of the whole of its business (cession de l’entreprise); or

 

(f)                                    any
other step (including petition, proposal or convening a meeting) is taken with
a view to its rehabilitation, administration, custodianship, liquidation,
winding-up or dissolution or any other insolvency proceedings involving it.

 

22.8                        Appointment
of receivers and managers

 

Any of the following
occurs in respect of an Obligor or a Material Subsidiary:

 

(a)                                  any
liquidator, trustee in bankruptcy, judicial custodian, compulsory manager,
receiver, administrative receiver, administrator, administrateur judiciaire,
administrateur provisoire, mandataire ad hoc, conciliateur or mandataire
liquidateur or similar officer is appointed in respect of it or any
of its assets;

 

(b)                                 its
directors or other officers request the appointment of a liquidator, trustee in
bankruptcy, judicial custodian, compulsory manager, receiver, administrative
receiver, administrator, administrateur judiciaire, administrateur provisoire,
mandataire ad hoc, conciliateur or mandataire liquidateur or
similar officer; or

 

(c)                                  any
other steps are taken to enforce any Security Interest over any part of its
assets.

 

22.9                        United
States Bankruptcy Laws

 

(a)                                  In
this Clause:

 

U.S. Bankruptcy Law
means the United States Bankruptcy Code 1978 or any other United States Federal
or State bankruptcy, insolvency or similar law.

 

U.S. Obligor means
an Obligor incorporated or organised under the laws of the United States of
America or any state of the United States of America (including the District of
Columbia).

 

Terms used in this
Clause have the meanings given to them in the United States Bankruptcy Code
1978, as amended, and applicable fraudulent conveyance laws in the United
States of America.

 

69

 

(b)                                 Any
of the following occurs in respect of a U.S. Obligor (on a consolidated basis):

 

(i)                                     it
makes a general assignment for the benefit of creditors;

 

(ii)                                  it
commences a voluntary case or proceeding under any U.S. Bankruptcy Law; or

 

(iii)                               an
involuntary case under any U.S. Bankruptcy Law is commenced against it and is
not controverted within 21 days or is not dismissed or stayed within 45 days
after commencement of the case; or

 

(iv)                              the
aggregate amount of its debts (including its obligations (if any) under the
Finance Documents) is greater than the aggregate value (being the lesser of
fair present valuation and present fair saleable value) of its assets (which
for, avoidance of doubt, include, without limitation, all rights of
indemnification, contribution and subrogation); or

 

(v)                                 its
capital is unreasonably small to carry on its business as it is being
conducted; or

 

(vi)                              it
incurs debts beyond its ability to pay as they mature on the date on which the
debts were incurred; or

 

(vii)                           it has
made a transfer or incurred an obligation under a Finance Document with the
intent to hinder, delay or defraud any of its present or future creditors.

 

22.10                 Creditors’
process

 

Any attachment, sequestration,
distress execution or analogous event or circumstance affects any material
asset(s) of an Obligor or a Material Subsidiary and which in the reasonable
opinion of the Majority Lenders has or could be expected to have a Material
Adverse Effect.

 

22.11                 Analogous
proceedings

 

There occurs, in relation
to an Obligor or a Material Subsidiary, any event or circumstance anywhere
which, in the opinion of the relevant Lender or the Majority Lenders (acting in
good faith), appears to correspond with any of those mentioned in Clauses 22.6
(Insolvency) to 22.10 (Creditors’ process) (inclusive).

 

22.12                 Cessation
of business

 

Any Obligor or a Material
Subsidiary ceases, or threatens to cease, to carry on all or a substantial part
of its business except in respect of the Asset Disposal Programme.

 

22.13                 Effectiveness
of Finance Documents

 

(a)                                  It
is or becomes unlawful for an Obligor or any other person (other than a Finance
Party) to perform any of its obligations under the Finance Documents.

 

(b)                                 Any
Finance Document is not effective or is alleged by an Obligor to be ineffective
for any reason.

 

(c)                                  An
Obligor repudiates a Finance Document or evidences an intention to repudiate a
Finance Document.

 

(d)                                 A
Security Document does not create the security it purports to create in any
respect considered by the Majority Lenders to be materially adverse to the
interests of the Finance Parties under the Finance Documents.

 

(e)                                  A
guarantee of any Obligor is invalid or unenforceable in any respect considered
by the Majority Lenders to be materially adverse to the interests of the
Finance Parties under the Finance Documents.

 

70

 

(f)                                    The
subordination provisions under the Subordination Agreement or the ranking of
security under the Security Documents is not effective.

 

(g)                                 The
Rights Issue is not completed by the Term Date or the Company repudiates,
declares or states in writing that it cannot or does not intend to, or it
becomes unlawful for the Company to, complete the Rights Issue by the Term
Date.

 

(h)                                 The
Asset Disposal Programme is not implemented in accordance with the terms of the
definition thereof or the Company repudiates, declares or states in writing
that it cannot or does not intend to, or it becomes unlawful for the Company
to, initiate or implement the Asset Disposal Programme in accordance with the
terms of the definition thereof.

 

22.14                 Audit
qualification

 

An Obligor’s auditors
qualify their report on any audited consolidated accounts of the relevant
Obligor in any manner whatsoever (except where such qualification is of a minor
technical or non-material nature) and (except in the case of the Company) where
that qualification is material in the context of the Group (taken as a whole).

 

22.15                 Shares
and Dividends

 

A meeting of shareholders
of the Company is convened at which a resolution is passed to pay any dividend,
or other distribution (in cash or in kind) in respect of its share capital or
any management fees or charges in favour of its shareholders or its shareholders’
Affiliates unless any such distribution is expressly permitted under Clause
21.14 (Shares and dividends).

 

22.16                 ERISA

 

(a)                                  Any
Plan fails to satisfy the minimum funding standards of ERISA or the Code for
any plan year or part thereof or a waiver of such standards or extension of any
amortisation period is sought or granted under section 412 of the Code; or

 

(b)                                 a
notice of intent to terminate any Plan is, or is reasonably expected to be,
filed with the PBGC or the PBGC institutes proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC notifies the Company or any ERISA Affiliate that a Plan may become a
subject of any such proceedings; or

 

(c)                                  the
aggregate accumulated benefit obligations (as defined in Statement of Financial
Accounting Standards 87) under all Plans exceeds the fair market value of all
assets of such Plans allocable to such benefits by more than US$50,000,000, all
determined as of the date of the most recent financial statements for such Plans;
or

 

(d)                                 the
Company or any ERISA Affiliate incurs or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans; or

 

(e)                                  the
Company or any ERISA Affiliate withdraws from any Multiemployer Plan; or

 

(f)                                    any
member of the Group establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would increase
the liability of any member of the Group thereunder,

 

and such events
(whether individually or taken together) could reasonably be expected to have a
Material Adverse Effect.

 

22.17                 Litigation

 

Any litigation,
arbitration or administrative proceeding or claim is threatened, pending,
commenced or ongoing against any Obligor, any Material Subsidiary or any of the
assets of the Group 

 

71

 

which in the opinion of
the Majority Lenders has or could reasonably be expected to have by itself or
together with any other such proceedings or claims to have a Material Adverse
Effect.

 

22.18                 Material
adverse change

 

Any event or circumstance
occurs after the date of this Agreement, which, in the opinion of the Majority
Lenders (acting in good faith) has, or could reasonably be expected to have, a
Material Adverse Effect.

 

22.19                 Acceleration

 

(a)                                  Subject
to paragraph (b) below, on and at any time after the occurrence of an Event of
Default the Facility Agent may, and shall if so directed by the Majority Lenders,
by notice to the Company:

 

(i)                                     cancel
the Total Commitments; and/or

 

(ii)                                  demand
that all or part of the Loans and all other amounts outstanding under the
Finance Documents, together with accrued interest and all other amounts accrued
under the Finance Documents be immediately due and payable, whereupon they
shall become immediately due and payable; and/or

 

(iii)                               demand
that all or part of the Loans and all other amounts outstanding under the
Finance Documents be payable on demand, whereupon they shall immediately become
payable on demand by the Facility Agent acting on the instructions of the
Majority Lenders; and/or

 

(iv)                              declare
that full cash cover in respect of each Guarantee is immediately provided and
due and payable.

 

(b)                                 On
and at any time after the occurrence of an Event of Default in respect of
insolvency proceedings or bankruptcy in respect of Rhodia Inc., the Facility
Agent shall, if so directed by the Tranche B Majority Lenders, by notice to the
Company, carry out the actions in paragraphs (a)(i) to (iv) above only and in
each case in respect of the Commitments or Utilisations under Tranche B. 

 

23.                               THE ADMINISTRATIVE PARTIES

 

23.1                        Appointment
and duties of the Facility Agent

 

(a)                                  Each
Finance Party (other than the Facility Agent) irrevocably appoints the Facility
Agent to act as its agent under the Finance Documents.

 

(b)                                 Each
Finance Party irrevocably authorises the Facility Agent to:

 

(i)                                     perform
the duties and to exercise the rights, powers and discretions that are
specifically given to it under the Finance Documents, together with any other
incidental rights, powers and discretions; and

 

(ii)                                  execute
each Finance Document expressed to be executed by the Facility Agent.

 

(c)                                  The
Facility Agent has only those duties which are expressly specified in the
Finance Documents. Those duties are solely of a mechanical and administrative
nature.

 

23.2                        Role
of the Arrangers

 

No Arranger has any
obligations of any kind to any other Party in connection with any Finance
Document.

 

72

 

23.3                        No
fiduciary duties

 

Nothing in the Finance
Documents makes an Administrative Party a trustee or fiduciary for any other
Party or any other person. No Administrative Party need hold in trust any
moneys paid to it for a Party or be liable to account for interest on those
moneys.

 

23.4                        Individual
position of an Administrative Party

 

(a)                                  If
it is also a Lender, each Administrative Party has the same rights and powers
under the Finance Documents as any other Lender and may exercise those rights
and powers as though it were not an Administrative Party.

 

(b)                                 Each
Administrative Party may:

 

(i)                                     carry
on any business with any Obligor or its related entities (including acting as
an agent or a trustee for any other financing); and

 

(ii)                                  retain
any profits or remuneration it receives under the Finance Documents or in
relation to any other business it carries on with any Obligor or its related
entities.

 

23.5                        Reliance

 

The Facility Agent may:

 

(a)                                  rely
on any notice or document believed by it to be genuine and correct and to have
been signed by, or with the authority of, the proper person;

 

(b)                                 rely
on any statement made by any person regarding any matters which may reasonably
be assumed to be within his knowledge or within his power to verify;

 

(c)                                  engage,
pay for and rely on professional advisers selected by it (including those
representing a Party other than the Facility Agent); and

 

(d)                                 act
under the Finance Documents through its personnel and agents.

 

23.6                        Majority
Lenders’ instructions

 

(a)                                  The
Facility Agent is fully protected if it acts on the instructions of the
Majority Lenders in the exercise of any right, power or discretion or any
matter not expressly provided for in the Finance Documents. Any such
instructions given by the Majority Lenders will be binding on all the Lenders.
In the absence of instructions, the Facility Agent may act as it considers to
be in the best interests of all the Lenders.

 

(b)                                 The
Facility Agent may assume that unless it has received notice to the contrary,
any right, power, authority or discretion vested in any Party or the Majority
Lenders has not been exercised.

 

(c)                                  The
Facility Agent is not authorised to act on behalf of a Lender (without first
obtaining that Lender’s consent) in any legal or arbitration proceedings in
connection with any Finance Document.

 

(d)                                 The
Facility Agent may require the receipt of security satisfactory to it, whether
by way of payment in advance or otherwise, against any liability or loss which
it may incur in complying with the instructions of the Majority Lenders.

 

23.7                        Responsibility

 

(a)                                  No
Administrative Party is responsible to any other Finance Party for the
adequacy, accuracy or completeness of:

 

(i)                                     any
Finance Document or any other document; or

 

(ii)                                  any
statement or information (whether written or oral) made in or supplied in
connection with any Finance Document.

 

73

 

(b)                                 Without
affecting the responsibility of any Obligor for information supplied by it or
on its behalf in connection with any Finance Document, each Lender confirms
that it:

 

(i)                                     has
made, and will continue to make, its own independent appraisal of all risks
arising under or in connection with the Finance Documents (including the
financial condition and affairs of each Obligor and its related entities and
the nature and extent of any recourse against any Party or its assets); and

 

(ii)                                  has
not relied exclusively on any information provided to it by any Finance Party
in connection with any Finance Document.

 

(c)                                  In
connection with this Agreement and the matters the subject hereof or referred
to herein no Lender has relied upon information or advice provided by any
member of the Co-ordinating Committee and to the extent it has any relationship
with that party in its capacity as a member of the Co-ordinating Committee,
none of the members of the Co-ordinating Committee shall be liable to any
signatory for any action taken or omitted to be taken or for the exercise of
any discretion by it in connection with any matter contemplated hereby and
shall not be responsible for the efficiency, validity, enforceability or
sufficiency of this Agreement or any matter the subject hereof or referred to
in this Agreement.

 

23.8                        Exclusion
of liability

 

(a)                                  The
Facility Agent is not liable or responsible to any other Finance Party for any
action taken or not taken by it in connection with any Finance Document, unless
directly caused by its gross negligence or wilful misconduct.

 

(b)                                 No
Party (other than the Facility Agent) may take any proceedings against any
officer, employee or agent of the Facility Agent in respect of any claim it
might have against the Facility Agent or in respect of any act or omission of
any kind by that officer, employee or agent in connection with any Finance
Document. Any officer, employee or agent of the Facility Agent may rely on this
Clause and enforce its terms under the Contracts (Rights of Third Parties) Act
1999.

 

23.9                        Default

 

(a)                                  The
Facility Agent is not obliged to monitor or enquire whether a Default has
occurred. The Facility Agent is not deemed to have knowledge of the occurrence
of a Default.

 

(b)                                 If
the Facility Agent:

 

(i)                                     receives
notice from a Party referring to this Agreement, describing a Default and
stating that the event is a Default; or

 

(ii)                                  is
aware of the non-payment of any principal or interest or any fee payable to a
Lender under this Agreement,

 

it must promptly notify
the Lenders.

 

23.10                 Information

 

(a)                                  The
Facility Agent must promptly forward to the person concerned the original or a
copy of any document which is delivered to the Facility Agent by a Party for
that person.

 

(b)                                 Except
where a Finance Document specifically provides otherwise, the Facility Agent is
not obliged to review or check the adequacy, accuracy or completeness of any
document it forwards to another Party.

 

(c)                                  The
Facility Agent will provide copies of the condition precedent documentation to
a Lender if a Lender so requests.

 

74

 

(d)                                 Except
as provided above, the Facility Agent has no duty:

 

(i)                                     either
initially or on a continuing basis to provide any Lender with any credit or
other information concerning the risks arising under or in connection with the
Finance Documents (including any information relating to the financial
condition or affairs of any Obligor or its related entities or the nature or
extent of recourse against any Party or its assets) whether coming into its
possession before, on or after the date of this Agreement; or

 

(ii)                                  unless
specifically requested to do so by a Lender in accordance with a Finance
Document, to request any certificate or other document from any Obligor.

 

(e)                                  In
acting as the Facility Agent, the agency division of the Facility Agent is
treated as a separate entity from its other divisions and departments. Any
information acquired by the Facility Agent which, in its opinion, is acquired
by it otherwise than in its capacity as the Facility Agent may be treated as
confidential by the Facility Agent and will not be treated as information
possessed by the Facility Agent in its capacity as such.

 

(f)                                    The
Facility Agent is not obliged to disclose to any person any confidential
information supplied to it by or on behalf of a member of the Group solely for
the purpose of evaluating whether any waiver or amendment is required in
respect of any term of the Finance Documents.

 

(g)                                 Each
Obligor irrevocably authorises the Facility Agent to disclose to the other
Finance Parties any information which, in its opinion, is received by it in its
capacity as the Facility Agent.

 

23.11                 Indemnities

 

(a)                                  Without
limiting the liability of any Obligor under the Finance Documents, each Lender
must indemnify the Facility Agent for that Lender’s Pro Rata Share of any loss
or liability incurred by the Facility Agent in acting as the Facility Agent,
except to the extent that the loss or liability is caused by the Facility
Agent’s gross negligence or wilful misconduct.

 

(b)                                 The
Facility Agent may deduct from any amount received by it for a Lender any
amount due to the Facility Agent from that Lender under a Finance Document but
unpaid.

 

23.12                 Compliance

 

Each Administrative Party
may refrain from doing anything (including disclosing any information) which
might, in its opinion, constitute a breach of any law or regulation or be
otherwise actionable at the suit of any person, and may do anything which, in
its opinion, is necessary or desirable to comply with any law or regulation.

 

23.13                 Resignation
of the Facility Agent

 

(a)                                  The
Facility Agent may resign and appoint any of its Affiliates as successor
Facility Agent by giving notice to the Lenders and the Company.

 

(b)                                 Alternatively,
the Facility Agent may resign by giving notice to the Lenders and the Company,
in which case the Majority Lenders may appoint a successor Facility Agent.

 

(c)                                  If
no successor Facility Agent has been appointed under paragraph (b) above within
30 days after notice of resignation was given, the Facility Agent may appoint a
successor Facility Agent.

 

(d)                                 The
person(s) appointing a successor Facility Agent must, if practicable, consult
with the Company prior to the appointment.

 

(e)                                  The
resignation of the Facility Agent and the appointment of any successor Facility
Agent will both become effective only when the successor Facility Agent
notifies all the Parties that it accepts its appointment. On giving the
notification, the successor Facility Agent will succeed to the position of the
Facility Agent and the term Facility Agent will mean the successor
Facility Agent.

 

75

 

(f)                                    The
retiring Facility Agent must, at its own cost, make available to the successor
Facility Agent such documents and records and provide such assistance as the
successor Facility Agent may reasonably request for the purposes of performing
its functions as the Facility Agent under the Finance Documents.

 

(g)                                 Upon
its resignation becoming effective, this Clause will continue to benefit the
retiring Facility Agent in respect of any action taken or not taken by it in
connection with the Finance Documents while it was the Facility Agent, and,
subject to paragraph (f) above, it will have no further obligations under any
Finance Document.

 

(h)                                 The
Majority Lenders may, by notice to the Facility Agent, require it to resign
under paragraph (b) above.

 

23.14                 Relationship
with Lenders

 

(a)                                  The
Facility Agent may treat each Lender as a Lender, entitled to payments under
this Agreement and as acting through its Facility Office(s) until it has
received not less than five Business Days’ prior notice from that Lender to the
contrary.

 

(b)                                 The
Facility Agent may at any time, and must if requested to do so by the Majority
Lenders, convene a meeting of the Lenders.

 

(c)                                  The
Facility Agent must keep a register of all the Parties and supply any other Party
with a copy of the register on request. The register will include each Lender’s
Facility Office(s) and contact details for the purposes of this Agreement.

 

23.15                 Facility
Agent’s management time

 

If the Facility Agent
requires, any amount payable to the Facility Agent by any Party under any
indemnity or in respect of any costs or expenses incurred by the Facility Agent
under the Finance Documents after the date of this Agreement may include the
cost of using its management time or other resources and will be calculated on
the basis of such reasonable daily or hourly rates as the Facility Agent may
notify to the relevant Party. This is in addition to any amount in respect of
fees or expenses paid or payable to the Facility Agent under any other term of
the Finance Documents.

 

23.16                 Notice
period

 

Where this Agreement
specifies a minimum period of notice to be given to the Facility Agent, the
Facility Agent may, at its discretion, accept a shorter notice period.

 

23.17                 Resignation
of the Issuing Banks

 

(a)                                  An
Issuing Bank may resign by giving notice to the Lenders and the Company and by
nominating a Lender as a successor Issuing Bank, in which case the successor
Issuing Bank will be appointed with the prior written agreement of the Facility
Agent, the Majority Lenders and the Company.

 

(b)                                 The
resignation of an Issuing Bank and the appointment of any successor Issuing
Bank will be made in accordance with Clause 6.16(g) and will become effective
only when the successor Issuing Bank notifies all the Parties that it accepts
its appointment and when the prior written agreement of the Facility Agent, the
Majority Lenders and the Company has been obtained. On giving the notification
and on receiving the written agreement of the Facility Agent, the Majority
Lenders and the Company, the successor Issuing Bank will succeed to the
position of the Issuing Bank and the term Issuing Bank will mean the successor
Issuing Bank.

 

(c)                                  The
retiring Issuing Bank must, at its own cost, make available to the successor
Issuing Bank such documents and records and provide such assistance as the
successor Issuing Bank may reasonably request for the purposes of performing
its functions as an Issuing Bank under the Finance Documents.

 

76

 

(d)                                 Upon
its resignation becoming effective, this Clause will continue to benefit the
retiring Issuing Bank in respect of any action taken or not taken by it in
connection with the Finance Documents while it was an Issuing Bank, and,
subject to paragraph (c) above, it will have no further obligations under any
Finance Document.

 

(e)                                  The
resignation of an Issuing Bank will only be effective in respect of outstanding
Guarantees on the date on which any such Guarantees are repaid or prepaid.

 

(f)                                    The
Majority Lenders may, by notice to an Issuing Bank, require it to resign under
paragraph (a) above. 

 

24.                               EVIDENCE AND CALCULATIONS

 

24.1                        Accounts

 

Accounts maintained by a
Finance Party in connection with this Agreement are prima facie evidence of the
matters to which they relate for the purpose of any litigation or arbitration
proceedings.

 

24.2                        Certificates
and determinations

 

Any certification or
determination by a Finance Party of a rate or amount under the Finance
Documents will be, in the absence of manifest error, conclusive evidence of the
matters to which it relates.

 

24.3                        Calculations

 

Any interest or fee
accruing under this Agreement accrues from day to day and is calculated on the
basis of the actual number of days elapsed and a year of 360 or 365 days or otherwise,
depending on what the Facility Agent determines is market practice. 

 

25.                               FEES

 

25.1                        Facility
Agent’s and Security Agent’s fees

 

The Company must pay to
each of the Facility Agent and the Security Agent for their own account an
agency fee in the manner agreed in the Fee Letter between each of the Facility
Agent and the Security Agent and the Company.

 

25.2                        Commitment
fee

 

(a)                                  The
Company must pay a commitment fee computed at the rate of 1.3725 per cent. per
annum on the undrawn, uncancelled amount of each Lender’s Commitment.

 

(b)                                 Accrued
commitment fee is payable quarterly in arrear from the Term Date. Accrued
commitment fee is also payable to the Facility Agent for a Lender on the date
its Commitment is cancelled in full.

 

25.3                        Participation
fee

 

The Company must pay to
the Lenders a participation fee in the amount set out in the Fee Letter on the
first Drawdown Date.

 

25.4                        Issuing
Bank fee

 

The Company shall pay to
the Facility Agent an issuing bank fee in respect of the Guarantee Facility for
the account of the relevant Issuing Bank in the amount agreed in the Fee
Letter. Accrued issuing bank fee is payable quarterly in arrear. 

 

77

 

26.                               INDEMNITIES AND BREAK COSTS

 

26.1                        Currency
indemnity

 

(a)                                  The
Company must, as an independent obligation, indemnify each Finance Party
against any loss or liability which that Finance Party incurs as a consequence
of:

 

(i)                                     that
Finance Party receiving an amount in respect of an Obligor’s liability under
the Finance Documents; or

 

(ii)                                  that
liability being converted into a claim, proof, judgement or order,

 

in a currency other than
the currency in which the amount is expressed to be payable under the relevant
Finance Document.

 

(b)                                 Unless
otherwise required by law, each Obligor waives any right it may have in any
jurisdiction to pay any amount under the Finance Documents in a currency other
than that in which it is expressed to be payable.

 

26.2                        Other
indemnities

 

(a)                                  The
Company must indemnify each Finance Party against any loss or liability which
that Finance Party incurs as a consequence of:

 

(i)                                     the
occurrence of any Default;

 

(ii)                                  any
failure by an Obligor to pay any amount due under a Finance Document on its due
date, including any resulting from any distribution or redistribution of any
amount among the Lenders under this Agreement or under the Subordination
Agreement;

 

(iii)                               (other
than by reason of negligence or default by that Finance Party) a Utilisation
not being made after a Request has been delivered for that Utilisation; or

 

(iv)                              a
Utilisation (or part of a Utilisation) not being prepaid in accordance with a
notice of prepayment.

 

The Company’s liability
in each case includes any loss or expense on account of funds borrowed,
contracted for or utilised to fund any amount payable under any Finance
Document, any amount repaid or prepaid or any Utilisation.

 

(b)                                 The
Company must indemnify the Facility Agent against any loss or liability
incurred by the Facility Agent as a result of:

 

(i)                                     investigating
any event which the Facility Agent reasonably believes to be a Default; or

 

(ii)                                  acting
or relying on any notice which the Facility Agent reasonably believes to be
genuine, correct and appropriately authorised.

 

26.3                        Break
Costs

 

(a)                                  Each
Borrower must pay to each Lender its Break Costs.

 

(b)                                 Break
Costs are the amount (if any) determined by the relevant Lender by which:

 

(i)                                     the
interest which that Lender would have received for the period from the date of
receipt of any part of its share in a Loan or an overdue amount to the last day
of the applicable Term for that Loan or overdue amount if the principal or
overdue amount received had been paid on the last day of that Term;

 

78

 

exceeds

 

(ii)                                  the
amount which that Lender would be able to obtain by placing an amount equal to
the amount received by it on deposit with a leading bank in the appropriate
interbank market for a period starting on the Business Day following receipt
and ending on the last day of the applicable Term.

 

(c)                                  Each
Lender must supply to the Facility Agent for the relevant Borrower details of
the amount of any Break Costs claimed by it under this Clause. 

 

27.                               EXPENSES

 

27.1                        Initial
costs

 

The Company must pay to
each Administrative Party the amount of all costs and expenses (including legal
fees) incurred by it in connection with the negotiation, preparation, printing,
execution and perfection of the Finance Documents.

 

27.2                        Subsequent
costs

 

(a)                                  The
Company shall forthwith on demand pay to the Facility Agent the amount of all
costs and expenses (including legal fees) properly incurred by it in connection
with:

 

(i)                                     the
negotiation, preparation, printing, syndication and execution of:

 

(A)                              this
Agreement and any other document referred to in this Agreement; and

 

(B)                                any
Finance Document (other than a Transfer Certificate) executed after the date of
this Agreement; and

 

(ii)                                  any
amendment, waiver, consent or suspension of rights (or any proposal for the
foregoing) requested by or on behalf of an Obligor and relating to a Finance
Document or a document referred to in any Finance Document.

 

(b)                                 The
Company shall forthwith on demand pay to each Issuing Bank the amount of all
costs and expenses (including legal fees) incurred by it in connection with its
compliance procedures carried out prior to issuing a Guarantee.

 

27.3                        Enforcement
costs

 

The Company shall
forthwith on demand pay to each Finance Party the amount of all costs and
expenses (including legal fees) incurred in connection with the enforcement of,
or the preservation of any rights under, any Finance Document. 

 

28.                               AMENDMENTS AND WAIVERS

 

28.1                        Procedure

 

(a)                                  Except
as provided in this Clause, any term of the Finance Documents may be amended or
waived with the agreement of the Company and the Majority Lenders. The Facility
Agent may effect, on behalf of any Finance Party, an amendment or waiver
allowed under this Clause.

 

(b)                                 The
Facility Agent must promptly notify the other Parties of any amendment or
waiver effected by it under paragraph (a) above. Any such amendment or waiver
is binding on all the Parties.

 

28.2                        Exceptions

 

(a)                                  An
amendment or waiver which relates to:

 

(i)                                     the
definition of Majority Lenders in Clause 1.1 (Definitions);

 

79

 

(ii)                                  an
extension of the date of payment of any amount to a Lender under the Finance
Documents;

 

(iii)                               a
reduction in the Margin or a reduction in the amount of any payment of
principal, interest, fee or other amount payable to a Lender under the Finance
Documents;

 

(iv)                              an
increase in, or an extension of, a Commitment or the Total Commitments;

 

(v)                                 a
release of an Obligor;

 

(vi)                              a
term of a Finance Document which expressly requires the consent of each Lender;

 

(vii)                           the
right of a Lender to assign or transfer its rights or obligations under the
Finance Documents;

 

(viii)                        relates to
Clause 9 (Prepayment and Cancellation) other than Clauses 9.3 (Mandatory
Prepayment—disposals, equity and capital market issues) and 9.4 (Mandatory
Prepayment—application of proceeds);

 

(ix)                                relates
to a Security Document or any of the Agreed Security Principles including any
waiver of any condition precedent under Schedule 2 (Conditions precedent
documents) in respect of the Security Documents, the Intercreditor and Sharing
Deed and the Subordination Agreement;

 

(x)                                   the
ability of a Borrower to make Utilisations under a Tranche or Facility other
than a Tranche or Facility permitted on the date of this Agreement or, if
later, the date of its accession to this Agreement as a Borrower; or

 

(xi)                                this
Clause,

 

may only be made with the
consent of all the Lenders.

 

(b)                                 An
amendment or waiver which relates to the rights or obligations of an
Administrative Party may only be made with the consent of that Administrative
Party.

 

(c)                                  An
amendment or waiver which relates to Tranche B under Clauses 2.2 (Division of
the Medium-Term Facility), 5.1(d), 5.3(d), 6.1(d), 9.4(b) (to the extent it
would alter the amount to be applied or the order of application in respect of
Tranche B), 22.19(b) (Acceleration) and 32.1(b) (Pro Rata Sharing), may only be
made with the consent of the Tranche B Majority Lenders.

 

28.3                        Change
of currency

 

If a change in any
currency of a country occurs (including where there is more than one currency
or currency unit recognised at the same time as the lawful currency of a
country), the Finance Documents will be amended to the extent the Facility
Agent (acting reasonably and after consultation with the Company) determines is
necessary to reflect the change.

 

28.4                        Waivers
and remedies cumulative

 

The rights of each
Finance Party under the Finance Documents:

 

(a)                                  may
be exercised as often as necessary;

 

(b)                                 are
cumulative and not exclusive of its rights under the general law; and

 

(c)                                  may
be waived only in writing and specifically.

 

Delay in exercising or
non-exercise of any right is not a waiver of that right. 

 

80

 

29.                               CHANGES TO THE PARTIES

 

29.1                        Assignments
and transfers by Obligors

 

No Obligor may assign,
transfer, novate or dispose of any of or any interest in, its rights and/or
obligations under the Finance Documents.

 

29.2                        Assignments
and transfers by Lenders

 

(a)                                  A
Lender (the Existing Lender) may, subject to the following provisions of
this Clause, at any time assign or transfer (including by way of novation) any
of its rights and obligations under this Agreement to any other bank or
financial institution (the New Lender).

 

(b)                                 The
prior written consent of the Company is required for any assignment or transfer
unless the New Lender is another Original Lender or an Affiliate of an Original
Lender or if an Event of Default has occurred and is outstanding under any of
Clause 22.2 (Non-payment) or Clauses 22.6 (Insolvency) to 22.11 (Analogous
proceedings) inclusive. However, the prior consent of the Company must not be
unreasonably withheld or delayed and will be deemed to have been given if,
within 10 Business Days of receipt by the Company of an application for
consent, it has not been expressly refused.

 

(c)                                  The
prior written consent of the relevant Issuing Bank is required for any
assignment or transfer by a Medium-Term Facility Lender unless the New Lender
has a credit rating from Standard and Poor’s of BBB+ or higher or an equivalent
rating from Moody’s.

 

(d)                                 An
assignment of rights will only be effective if the New Lender confirms to the
Facility Agent and the Company in form and substance satisfactory to the
Facility Agent that it is bound by obligations to the other Finance Parties
under this Agreement equivalent to those it would have been under if it were an
Original Lender.

 

(e)                                  A
transfer of obligations will be effective only if either:

 

(i)                                     the
rights are assigned, the corresponding obligations released and equivalent
obligations assumed in accordance with the following provisions of this Clause;
or

 

(ii)                                  the
obligations are novated in accordance with the following provisions of this
Clause.

 

(f)                                    Unless
the Facility Agent otherwise agrees, the New Lender must pay to the Facility
Agent for its own account, on or before the date any assignment or transfer
occurs, a fee of €1,500.

 

(g)                                 Any
reference in this Agreement to a Lender includes a New Lender but excludes a
Lender if no amount is or may be owed to or by it under this Agreement.

 

(h)                                 In
the case of an assignment, the Existing Lender and the New Lender shall ensure
that the assignment is notified by bailiff (huissier) to the Company in accordance
with Article 1690 of the French Civil Code.

 

(i)                                     A
Lender may only transfer its rights and obligations in its capacity as Issuing
Bank if it complies with Clause 23.17 (Resignation of the Issuing Banks).

 

29.3                        Transfer
Certificates

 

(a)                                  In
this Clause:

 

Transfer Date
means, for a Transfer Certificate, the later of:

 

(i)                                     the
proposed Transfer Date specified in that Transfer Certificate;

 

(ii)                                  the
date on which the Facility Agent executes that Transfer Certificate; and

 

(iii)                               a
reference to an assignment includes any related release and assumption.

 

81

 

(b)                                 An
assignment or novation is effected if:

 

(i)                                     the
Existing Lender and the New Lender deliver to the Facility Agent a duly
completed Transfer Certificate; and

 

(ii)                                  the
Facility Agent executes it.

 

The Facility Agent must
execute as soon as reasonably practicable a Transfer Certificate delivered to
it and which appears on its face to be in order.

 

(c)                                  Each
Party (other than the Existing Lender and the New Lender) irrevocably
authorises the Facility Agent to execute any duly completed Transfer
Certificate on its behalf.

 

(d)                                 For
a transfer by assignment on the Transfer Date:

 

(i)                                     the
Existing Lender will assign absolutely to the New Lender the Existing Lender’s
rights expressed to be the subject of the assignment in the Transfer
Certificate;

 

(ii)                                  the
Existing Lender will be released from the obligations expressed to be the
subject of the release in the Transfer Certificate; and

 

(iii)                               the
New Lender will become a Lender under this Agreement and will be bound by
obligations equivalent to those from which the Existing Lender is released
under sub-paragraph (ii) above.

 

(e)                                  For
a transfer by novation on the Transfer Date:

 

(i)                                     the
New Lender will assume the rights and obligations of the Existing Lender
expressed to be the subject of the novation in the Transfer Certificate in
substitution for the Existing Lender;

 

(ii)                                  the
Existing Lender will be released from those obligations and cease to have those
rights; and

 

(iii)                               the
New Lender will become a Lender under this Agreement and be bound by the terms
of this Agreement as a Lender.

 

(f)                                    Subject
to the terms of this Agreement, the obligations of each Guarantor under this
Agreement will continue in full force and effect following any novation under
this Clause. A novation under this Clause is a novation (novation) within the meaning
of Article 1271 et seq. of the French Civil Code.

 

(g)                                 The
Security Interests created pursuant to the Security Documents are expressly
reserved by the Existing Lender including without limitation in respect of
Article 1278 et seq. of the French Civil Code and Article 1278 of the
Belgian Civil Code and such Security Interests shall benefit the New Lender
with the same ranking as that benefiting the Existing Lender prior to the
novation.

 

(h)                                 For
the purposes of Article 1528 of the Spanish Civil Code, each Party agrees
that upon transfer of the rights and obligations of an Existing Lender under
this Clause, the Security Interest created under Spanish law shall be preserved
for the benefit of the New Lender.

 

29.4                        Limitation
of responsibility of Existing Lender

 

(a)                                  Unless
expressly agreed to the contrary, an Existing Lender is not responsible to a
New Lender for the legality, validity, adequacy, accuracy, completeness or
performance of:

 

(i)                                     any
Finance Document or any other document; or

 

(ii)                                  any
statement or information (whether written or oral) made in or supplied in
connection with any Finance Document,

 

and any representations
or warranties implied by law are excluded.

 

82

 

(b)                                 Each
New Lender confirms to the Existing Lender and the other Finance Parties that
it:

 

(i)                                     has
made, and will continue to make, its own independent appraisal of all risks
arising under or in connection with the Finance Documents (including the
financial condition and affairs of each Obligor and its related entities and
the nature and extent of any recourse against any Party or its assets) in
connection with its participation in this Agreement; and

 

(ii)                                  has
not relied exclusively on any information supplied to it by the Existing Lender
in connection with any Finance Document.

 

(c)                                  Nothing
in any Finance Document requires an Existing Lender to:

 

(i)                                     accept
a re-transfer from a New Lender of any of the rights and obligations assigned
or transferred under this Clause; or

 

(ii)                                  support
any losses incurred by the New Lender by reason of the non-performance by any
Obligor of its obligations under any Finance Document or otherwise.

 

29.5                        Costs
resulting from change of Lender or Facility Office

 

If:

 

(a)                                  a
Lender assigns or transfers any of its rights and obligations under the Finance
Documents or changes its Facility Office; and

 

(b)                                 as
a result of circumstances existing at the date the assignment, transfer or
change occurs, an Obligor would be obliged to pay a Tax Payment or an Increased
Cost,

 

then, unless the assignment,
transfer or change is made by a Lender to mitigate any circumstance giving rise
to the Tax Payment, Increased Cost or a right to be prepaid and/or cancelled by
reason of illegality, the Obligor need only pay that Tax Payment or Increased
Cost to the same extent that it would have been obliged to if no assignment,
transfer or change had occurred.

 

29.6                        Additional
Borrowers

 

(a)                                  If
one of the wholly-owned Subsidiaries of the Company is to become an Additional
Borrower, then the Company must (following consultation with the Facility
Agent) deliver to the Facility Agent the relevant documents and evidence listed
in Part 2 of Schedule 2 (Conditions precedent documents).

 

(b)                                 The
prior consent of all the Lenders is required for all Additional Borrowers.

 

(c)                                  The
relevant Subsidiary will become an Additional Borrower when the Facility Agent
notifies the other Finance Parties and the Company that it has received all of
the documents and evidence referred to in paragraph (a) above in form and
substance satisfactory to it. The Facility Agent must give this notification as
soon as reasonably practicable.

 

(d)                                 Delivery
of an Accession Agreement, executed by the relevant Subsidiary and the Company,
to the Facility Agent constitutes confirmation by that Subsidiary and the
Company that the Repeating Representations are then correct.

 

29.7                        Resignation
of a Borrower (other than the Original Borrowers)

 

(a)                                  In
this Clause, Resignation Request means a letter in the form of
Schedule 10 (Form of Resignation Request), with such amendments as the
Facility Agent may approve or reasonably require.

 

(b)                                 The
Company may request that a Borrower (other than an Original Borrower) ceases to
be a Borrower by giving to the Facility Agent a duly completed Resignation
Request.

 

83

 

(c)                                  The
Facility Agent must accept a Resignation Request and notify the Company and the
Lenders of its acceptance, unless:

 

(i)                                     it
is aware that a Default in respect of that Borrower is outstanding or would
result from the acceptance of the Resignation Request; or

 

(ii)                                  any
amount owed by that Borrower under this Agreement is still outstanding.

 

(d)                                 The
Borrower will cease to be a Borrower when the Facility Agent gives the
notification referred to in paragraph (c) above.

 

(e)                                  A
Borrower (other than the Company) may also cease to be a Borrower in any other
manner approved by the Majority Lenders.

 

29.8                        Changes
to the Reference Banks

 

If a Reference Bank (or,
if a Reference Bank is not a Lender, the Lender of which it is an Affiliate)
ceases to be a Lender, the Facility Agent must (in consultation with the
Company) appoint another Lender or an Affiliate of a Lender to replace that
Reference Bank.

 

29.9                        Affiliates
of Lenders

 

(a)                                  Each
Lender may fulfil its obligations in respect of any Utilisation through an
Affiliate if:

 

(i)                                     the
relevant Affiliate is specified in this Agreement as a Lender or becomes a
Lender by means of a Transfer Certificate in accordance with this Agreement;
and

 

(ii)                                  the
Utilisations in which that Affiliate will participate are specified in this
Agreement or in a notice given by that Lender to the Facility Agent and the
Company.

 

In this event, the Lender
and the Affiliate will participate in Utilisations in the manner provided for
in sub-paragraph (ii) above.

 

(b)                                 If
paragraph (a) above applies, the Lender and its Affiliate will be treated as
having a single Commitment and a single vote, but, for all other purposes, will
be treated as separate Lenders. 

 

30.                               DISCLOSURE OF INFORMATION

 

(a)                                  Each Finance Party must keep confidential any
information supplied to it by or on behalf of any Obligor in connection with
the Finance Documents. However, a Finance Party is entitled to disclose
information:

 

(i)                                     which is publicly available, other than as a
result of a breach by that Finance Party of this Clause;

 

(ii)                                  in connection with any legal or arbitration
proceedings;

 

(iii)                               if required to do so under any law or
regulation;

 

(iv)                              to a governmental, banking, taxation or other
regulatory authority;

 

(v)                                 to its officers, directors, employees and
professional advisers;

 

(vi)                              to the extent allowed under paragraph (b)
below;

 

(vii)                           to another Obligor; or

 

(viii)                        with the agreement of the relevant Obligor.

 

84

 

(b)                                 A Finance Party may disclose to an Affiliate
or any person with whom it may enter, or has entered into, any kind of
transfer, participation or other agreement in relation to this Agreement (a participant):

 

(i)                                     a
copy of any Finance Document; and

 

(ii)                                  any
information which that Finance Party has acquired under or in connection with
any Finance Document.

 

However, before a
participant may receive any confidential information, it must agree with the
relevant Finance Party to keep that information confidential on the terms of
paragraph (a) above.

 

(c)                                  This
Clause supersedes any previous confidentiality undertaking given by a Finance
Party in connection with this Agreement prior to it becoming a Party. 

 

31.                               SET-OFF

 

Following the occurrence
of an Event of Default, a Finance Party may set off any matured obligation owed
to it by an Obligor under the Finance Documents (to the extent beneficially
owned by that Finance Party) against any obligation (whether or not matured)
owed by that Finance Party to that Obligor, regardless of the place of payment,
booking branch or currency of either obligation. If the obligations are in
different currencies, the Finance Party may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of the
set-off. If either obligation is unliquidated or unascertained, the Finance
Party may set off in an amount estimated by it in good faith to be the amount
of that obligation. 

 

32.                               PRO RATA SHARING

 

32.1                        Redistribution

 

(a)                                  Subject
to paragraph (b) below, if any amount owing by an Obligor under this Agreement
to a Lender (the recovering Lender) is discharged by payment, set-off or any
other manner other than through the Facility Agent under this Agreement (a recovery),
then:

 

(i)                                     the
recovering Lender must, within three Business Days, supply details of the
recovery to the Facility Agent;

 

(ii)                                  the
Facility Agent must calculate whether the recovery is in excess of the amount
which the recovering Lender would have received if the recovery had been received
by the Facility Agent under this Agreement; and

 

(iii)                               the
recovering Lender must pay to the Facility Agent an amount equal to the excess
(the redistribution).

 

(b)                                 Paragraph
(a) does not apply to a recovery made by a Tranche B Lender by way of a distribution
by Rhodia Inc. in its insolvency proceedings or bankruptcy in respect of an
amount owing by it to that Tranche B Lender in respect of a Tranche B
Utilisation.

 

32.2                        Effect
of redistribution

 

(a)                                  The
Facility Agent must treat a redistribution as if it were a payment by the
relevant Obligor under this Agreement and distribute it among the Lenders,
other than the recovering Lender, accordingly.

 

(b)                                 When
the Facility Agent makes a distribution under paragraph (a) above, the
recovering Lender will be subrogated to the rights of the Finance Parties which
have shared in that redistribution.

 

(c)                                  If
and to the extent that the recovering Lender is not able to rely on any rights
of subrogation under paragraph (b) above, the relevant Obligor will owe the
recovering Lender a debt which is equal to the redistribution, immediately
payable and of the type originally discharged.

 

85

 

(d)                                 If:

 

(i)                                     a
recovering Lender must subsequently return a recovery, or an amount measured by
reference to a recovery, to an Obligor; and

 

(ii)                                  the
recovering Lender has paid a redistribution in relation to that recovery,

 

each Finance Party must,
within three Business Days of demand by the recovering Lender through the
Facility Agent, reimburse the recovering Lender all or the appropriate portion
of the redistribution paid to that Finance Party, together with interest for
the period while it held the re-distribution. In this event, the subrogation in
paragraph (b) above will operate in reverse to the extent of the reimbursement.

 

32.3                        Exceptions

 

Notwithstanding any other
term of this Clause, a recovering Lender need not pay a redistribution to the
extent that:

 

(a)                                  it
would not, after the payment, have a valid claim against the relevant Obligor
in the amount of the redistribution; or

 

(b)                                 it
would be sharing with another Finance Party any amount which the recovering
Lender has received or recovered as a result of legal or arbitration
proceedings, where:

 

(i)                                     the
recovering Lender notified the Facility Agent of those proceedings; and

 

(ii)                                  the
other Finance Party had an opportunity to participate in those proceedings but
did not do so or did not take separate legal or arbitration proceedings as soon
as reasonably practicable after receiving notice of them. 

 

33.                               SEVERABILITY

 

If a term of a Finance
Document is or becomes illegal, invalid or unenforceable in any jurisdiction,
that will not affect:

 

(a)                                  the
legality, validity or enforceability in that jurisdiction of any other term of
the Finance Documents; or

 

(b)                                 the
legality, validity or enforceability in other jurisdictions of that or any
other term of the Finance Documents. 

 

34.                               COUNTERPARTS

 

Each Finance Document may
be executed in any number of counterparts. This has the same effect as if the
signatures on the counterparts were on a single copy of the Finance Document. 

 

35.                               NOTICES

 

35.1                        In
writing

 

(a)                                  Any
communication in connection with a Finance Document must be in writing and,
unless otherwise stated, may be given:

 

(i)                                     in
person, by post, fax, e-mail or any other electronic communication approved by
the Facility Agent; or

 

(ii)                                  if
between the Facility Agent and a Lender and the Facility Agent and the Lender
agree, by e-mail or other electronic communication.

 

(b)                                 For
the purpose of the Finance Documents, an electronic communication will be
treated as being in writing.

 

86

 

(c)                                  Unless
it is agreed to the contrary, any consent or agreement required under a Finance
Document must be given in writing.

 

35.2                        Contact
details

 

(a)                                  Except
as provided below, the contact details of each Party for all communications in
connection with the Finance Documents are those notified by that Party for this
purpose to the Facility Agent on or before the date it becomes a Party.

 

(b)                                 The
contact details of the Company for this purpose are:

 

	
  Address:

  	
  26, quai Alphonse le
  Gallo, 92100 Boulogne Billancourt

  
	
  Fax number:

  	
  +33 (1) 55 38 44
  71/21

  
	
  Attention:

  	
  Chief Financial Officer
  and General Counsel.

  

 

(c)                                  The
contact details of the Facility Agent for this purpose are:

 

	
  Address:

  	
  BNP Paribas, European
  Agency/Middle Office Group,

  37, Place du Marché St. Honoré, 75031, Paris Cedex 01

  
	
  Fax number:

  	
  +33 (1) 42 98 43
  17

  
	
  Attention:

  	
  Raymond Banzon/Isabelle
  Blandin/Catherine Staneso.

  

 

(d)                                 Any
Party may change its contact details by giving five Business Days’ notice to
the Facility Agent or (in the case of the Facility Agent) to the other Parties.

 

(e)                                  Where
a Party nominates a particular department or officer to receive a communication,
a communication will not be effective if it fails to specify that department or
officer.

 

35.3                        Effectiveness

 

(a)                                  Except
as provided below, any communication in connection with a Finance Document will
be deemed to be given as follows:

 

(i)                                     if
delivered in person, at the time of delivery;

 

(ii)                                  if
posted, on actual receipt;

 

(iii)                               if
by fax, when received in legible form; and

 

(iv)                              if
by e-mail or any other electronic communication, when received in legible form.

 

(b)                                 A
communication given under paragraph (a) above but received on a non-working day
or after business hours in the place of receipt will only be deemed to be given
on the next working day in that place.

 

(c)                                  For
the purposes of the Finance Documents, an electronic communication will be
treated as being in writing.

 

(d)                                 Unless
it is agreed to the contrary, any consent or agreement required under a Finance
Document must be given in writing.

 

(e)                                  A
communication to the Facility Agent will only be effective on actual receipt by
it.

 

35.4                        Obligors

 

(a)                                  All
communications under the Finance Documents to or from an Obligor must be sent
through the Facility Agent.

 

(b)                                 All
communications under the Finance Documents to or from an Obligor (other than
the Company) must be sent through the Company.

 

87

 

(c)                                  Each
Obligor (other than the Company) irrevocably appoints the Company to act as its
agent:

 

(i)                                     to
give and receive all communications under the Finance Documents; and

 

(ii)                                  to
sign all documents under or in connection with the Finance Documents.

 

(d)                                 Any
communication given to the Company in connection with a Finance Document will
be deemed to have been given also to the other Obligors.

 

(e)                                  The
Facility Agent may assume that any communication made by the Company is made
with the consent of each other Obligor. 

 

36.                               LANGUAGE

 

(a)                                  Any notice given in connection with a Finance
Document must be in English.

 

(b)                                 Any other document provided in connection
with a Finance Document must be:

 

(i)                                     in English; or

 

(ii)                                  (unless the Facility Agent otherwise agrees)
accompanied by a certified English translation. In this case, the English
translation prevails unless the document is a statutory or other official
document. 

 

37.                               GOVERNING LAW

 

This Agreement is governed
by English law. 

 

38.                               ENFORCEMENT

 

38.1                        Jurisdiction

 

(a)                                  The
English courts have exclusive jurisdiction to settle any dispute in connection
with any Finance Document.

 

(b)                                 Notwithstanding
and without prejudice to paragraph (a) above, any New York State court or
Federal court sitting in New York City also has jurisdiction to settle any
dispute in connection with any Finance Document.

 

(c)                                  The
English and New York courts are the most appropriate and convenient courts to
settle any such dispute and each Obligor waives objection to those courts on
the grounds of inconvenient forum or otherwise in relation to proceedings in
connection with any Finance Document.

 

(d)                                 This
Clause is for the benefit of the Finance Parties only. To the extent allowed by
law, a Finance Party may take:

 

(i)                                     proceedings
in any other court; and

 

(ii)                                  concurrent
proceedings in any number of jurisdictions.

 

38.2                        Service
of process

 

(a)                                  Each
Obligor not incorporated in England and Wales irrevocably appoints Rhodia
Limited as its agent under the Finance Documents for service of process in any
proceedings before the English courts.

 

(b)                                 Each
Obligor not incorporated in New York State irrevocably appoints Rhodia Inc. as
its agent for service of process in any proceedings before any New York State
courts.

 

(c)                                  If
any person appointed as process agent is unable for any reason to act as agent
for service of process, the Company (on behalf of all the Obligors) must
immediately appoint another agent on terms acceptable to the Facility Agent.
Failing this, the Facility Agent may appoint another agent for this purpose.

 

88

 

(d)                                 Each
Obligor agrees that failure by a process agent to notify it of any process will
not invalidate the relevant proceedings.

 

(e)                                  This
Clause does not affect any other method of service allowed by law.

 

38.3                        Waiver
of immunity

 

Each Obligor irrevocably
and unconditionally:

 

(a)                                  agrees
not to claim any immunity from proceedings brought by a Finance Party against
it in relation to a Finance Document and to ensure that no such claim is made
on its behalf;

 

(b)                                 consents
generally to the giving of any relief or the issue of any process in connection
with those proceedings; and

 

(c)                                  waives
all rights of immunity in respect of it or its assets.

 

38.4                        Waiver
of trial by jury

 

EACH PARTY WAIVES ANY
RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION IN CONNECTION
WITH ANY FINANCE DOCUMENT OR ANY TRANSACTION CONTEMPLATED BY ANY FINANCE
DOCUMENT. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY COURT.

 

This Agreement has been
entered into on the date stated at the beginning of this Agreement.

 

89

 

Any text that has been deleted pursuant to Rhodia’s
confidential treatment request is marked [“***”] herein and has been separately
submitted with the U.S. Securities and Exchange Commission.

 

SCHEDULE 1

 

ORIGINAL PARTIES

 

PART
1

 

ORIGINAL BORROWERS

 

	
  Name of Original Borrower

  	
   

  	
  Registration number

  (or equivalent, if any)

  
	
   

  	
   

  	
   

  
	
  Rhodia Inc.

  	
   

  	
   

  

 

 

PART
2

 

ISSUING BANKS

 

	
  Name of Issuing Bank

  	
   

  	
  Maximum amount of

  Guarantee (€)

  	
   

  	
  Governing law of Guarantee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BNP Paribas

  	
   

  	
  [***]

  	
   

  	
  French, English, New
  York, Spanish, Italian, Belgian, German, Dutch

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Crédit Agricole
  Indosuez S.A.

  	
   

  	
  [***]

  	
   

  	
  French, English,
  Spanish, Italian, Belgian, German, Dutch

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CSFB (Tranche B
  Guarantee only)

  	
   

  	
  [***]

  	
   

  	
  English, New York

  

 

90

 

Any text that has been deleted pursuant to Rhodia’s
confidential treatment request is marked [“***”] herein and has been separately
submitted with the U.S. Securities and Exchange Commission.

 

PART
3

 

LENDERS—MEDIUM-TERM FACILITY

 

	
  Tranche A

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name of Original Lender

  	
   

  	
  Commitment
  (€)

  	
   

  
	
  BNP
  Paribas

  	
   

  	
  [***]

  	
   

  
	
  Crédit
  Agricole Indosuez S.A.

  	
   

  	
  [***]

  	
   

  
	
  Crédit
  Industriel et Commercial

  	
   

  	
  [***]

  	
   

  
	
  Banque
  de l’Economie du Commerce et de la Monetique

  	
   

  	
  [***]

  	
   

  
	
  CCF

  	
   

  	
  [***]

  	
   

  
	
  Natexis
  Banques Populaires

  	
   

  	
  [***]

  	
   

  
	
  The
  Royal Bank of Scotland plc

  	
   

  	
  [***]

  	
   

  
	
  Standard
  Chartered Bank

  	
   

  	
  [***]

  	
   

  
	
  Comerica
  Bank

  	
   

  	
  [***]

  	
   

  
	
  Citibank
  International plc (or Citicorp USA, Inc. in relation to Utilisations by
  Rhodia Inc.)

  	
   

  	
  [***]

  	
   

  
	
  Bayerische
  Landesbank

  	
   

  	
  [***]

  	
   

  
	
  Unicredito
  Italiano

  	
   

  	
  [***]

  	
   

  
	
  Landesbank
  Saar

  	
   

  	
  [***]

  	
   

  
	
  Fortis
  Bank (Nederland) N.V.

  	
   

  	
  [***]

  	
   

  
	
  Banco
  Bilbao Vizcaya Argentaria

  	
   

  	
  [***]

  	
   

  
	
  The
  Bank of Tokyo-Mitsubishi, Ltd.

  	
   

  	
  [***]

  	
   

  
	
  Total Tranche A

  	
   

  	
  532,522,724

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tranche B

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name of Original Lender

  	
   

  	
  Commitment (€)

  	
   

  
	
  Credit
  Suisse First Boston International

  	
   

  	
  [***]

  	
   

  
	
  UFJ
  Bank Limited

  	
   

  	
  [***]

  	
   

  
	
  Total Tranche B

  	
   

  	
  105,974,473

  	
   

  
	
  Total Medium-Term Facility Commitments

  	
   

  	
  638,497,197

  	
   

  

 

91

 

Any text that has been deleted pursuant to Rhodia’s
confidential treatment request is marked [“***”] herein and has been separately
submitted with the U.S. Securities and Exchange Commission.

 

PART
4

 

LENDERS—SHORT-TERM FACILITY

 

	
  Name of Original Lender

  	
   

  	
  Commitment (€)

  	
   

  
	
  BNP Paribas

  	
   

  	
  [***]

  	
   

  
	
  Crédit
  Agricole Indosuez S.A.

  	
   

  	
  [***]

  	
   

  
	
  Crédit
  Industriel et Commercial

  	
   

  	
  [***]

  	
   

  
	
  Banque
  de l’Economie du Commerce et de la Monetique

  	
   

  	
  [***]

  	
   

  
	
  CCF

  	
   

  	
  [***]

  	
   

  
	
  Natexis
  Banques Populaires

  	
   

  	
  [***]

  	
   

  
	
  The
  Royal Bank of Scotland plc

  	
   

  	
  [***]

  	
   

  
	
  Standard
  Chartered Bank

  	
   

  	
  [***]

  	
   

  
	
  Comerica
  Bank

  	
   

  	
  [***]

  	
   

  
	
  Citibank
  International plc (or Citicorp USA, Inc. in relation to Utilisations by
  Rhodia Inc.)

  	
   

  	
  [***]

  	
   

  
	
  Bayerische
  Landesbank

  	
   

  	
  [***]

  	
   

  
	
  Unicredito
  Italiano

  	
   

  	
  [***]

  	
   

  
	
  Landesbank
  Saar

  	
   

  	
  [***]

  	
   

  
	
  Fortis
  Bank (Nederland) N.V.

  	
   

  	
  [***]

  	
   

  
	
  Credit
  Suisse First Boston International

  	
   

  	
  [***]

  	
   

  
	
  UFJ
  Bank Limited

  	
   

  	
  [***]

  	
   

  
	
  The
  Bank of Tokyo-Mitsubishi, Ltd.

  	
   

  	
  [***]

  	
   

  
	
  Total Short-Term Facility Commitments

  	
   

  	
  119,224,721

  	
   

  
	
  Total Commitments

  	
   

  	
  €

  	
  757,721,918

  	
   

  
					

 

92

 

SCHEDULE 2

 

CONDITIONS PRECEDENT DOCUMENTS

 

PART
1

 

TO BE DELIVERED BEFORE THE FIRST
REQUEST

 

Original Obligors

 

1.                                       A
copy of the statuts
of the Company or a certificate of the authorised signatory of the Company confirming
that the copy of the statuts of the Company in the Facility
Agent’s possession is still correct, complete and in full force and effect as
at a date no earlier than the date of this Agreement and a K-bis extract from the Trade
and Companies Registry relating to the Company dated no more than one month
prior to the date of this Agreement.

 

2.                                       A
copy of the memorandum and articles of association, certificate of
incorporation and certificate of incorporation on change of name (if any) or
any other constitutional document of each Original Obligor including, for any
Original Obligor incorporated in France, a K-bis extract from the Trade and Companies
Registry related to it or a certificate of the authorised signatory of the
Company confirming that the copy of the constitutional documents of each
Original Obligor in the Facility Agent’s possession is still correct, complete
and in full force and effect as at a date no earlier than the date of this
Agreement.

 

3.                                       (a)
A copy of resolutions of the board of directors of each Original Obligor
approving the terms of, and the transactions contemplated by the Finance
Documents, in particular the guarantee to be provided by the Company under this
Agreement, and the execution by each Original Obligor of each Finance Document.

 

(b)                                 A
certificate of the chief financial officer of each Borrower certifying that
utilisation of the Facility in full would not cause any borrowing limit binding
on each Borrower to be exceeded.

 

4.                                       (a)
Evidence satisfactory to the Facility Agent of the authority of a specified
individual or individuals to sign each Finance Document and to sign and
despatch Requests, in each case, on behalf of each Original Obligor.

 

(b)                                 A
specimen of the signature of each person authorised to sign this Agreement and
to sign and despatch each Request, in each case on behalf of each Borrower.

 

5.                                       Confirmation
from each agent, if any, or lender as the case may be, under the Refinanced
Facilities that it has received an irrevocable notice of cancellation and
prepayment of the Refinanced Facilities such notice to take effect such that
cancellation and prepayment will be made in a manner satisfactory to the
relevant lenders on or prior to the first Utilisation Date.

 

6.                                       A
list identifying each Subsidiary of the Borrowers which is a Material
Subsidiary within the meaning of paragraph (a) of the definition thereof, as
determined from the Original Financial Statements.

 

7.                                       A
certificate signed by the chief financial officer of each Borrower setting out
in reasonable detail computations establishing compliance with the financial
covenants in Clause 20 (Financial Covenants) as at 31st December, 2003.

 

8.                                       Evidence
that the process agents referred to in Clause 38.2 (Service of process) have
accepted their appointment for the purposes of that Clause.

 

93

 

9.                                       A
certificate of an authorised signatory of each Original Obligor party to the
Finance Documents certifying:

 

(a)                                  that
each document delivered by it under this Part 1 of this Schedule is
correct, complete and in full force and effect as at a date no earlier than the
date of this Agreement;

 

(b)                                 that
the execution of and assumption of its obligations under the Finance Documents
will not result in any breach of any restriction binding on it;

 

(c)                                  as
to the identity and specimen signatures of its directors and signatories;

 

(d)                                 that
no Default is outstanding relating to it; and

 

(e)                                  that
the representations and warranties made by it in the Finance Documents are
correct.

 

Financial Information

 

1.                                       A
copy of the Original Financial Statements.

 

2.                                       Consolidated
management accounts, consisting of balance sheet, profit and loss account and
cashflow for the Company.

 

Agreements and documents

 

1.                                       An
original of this Agreement executed by each Party.

 

2.                                       An
original of the Fee Letter(s).

 

3.                                       An
original of the Intercreditor and Sharing Deed executed by each party.

 

4.                                       An
original of the Subordination Agreement executed by each party including Rhodia
Inc. and Rhodia Holding Inc. with respect to any subrogation rights.

 

Security Document(s)

 

1.                                       At
least 2 copies (or, if required in the relevant jurisdiction, such additional
copies as are requested by the Finance Parties) of the Security Documents to be
entered into in accordance with the Agreed Security Principles, each duly
executed by the parties to it.

 

2.                                       Registration
requirements of Security Documents effected.

 

3.                                       Documents
necessary for perfection of Security Documents.

 

4.                                       A
copy of all notices required to be sent under the Security Documents.

 

5.                                       A
copy of all transfers, share certificates and stock transfer forms or
equivalent relating to assets charged by the Security Documents.

 

6.                                       Evidence
that each creditor has waived in writing any negative pledge or other
restriction in its favour that would or could be breached by any member of the
Group entering into the Security Documents.

 

7.                                       Copies
of the Secured Intra-Group Loans in an agreed form.

 

8.                                       An
auditor’s certificate in respect of Intra-Group Loans made in respect of Rhodia
Germany International GmbH confirming that such loans are not being made for
the purposes of capital.

 

9.                                       Apostilled
powers of attorney in respect of the Security Documents governed by Dutch law.

 

94

 

Legal opinions

 

1.                                       A
legal opinion in the agreed form of Shearman & Sterling, or other law firm
advising in relation to the Agreed Security Principles or the Subordination
Agreement, as legal advisers to the Company and the Obligors, addressed to the
Finance Parties in respect of the laws of the jurisdiction of the place of
incorporation of the relevant Obligor or governing law of the relevant Finance
Document.

 

2.                                       A
legal opinion in the agreed form of Allen & Overy addressed to the Facility
Agent.

 

Other documents and evidence

 

1.                                       Evidence
that all fees and expenses then due and payable from the Company under this
Agreement have been or will be paid by the first Utilisation Date.

 

2.                                       Evidence
that the Refinanced Facilities will be prepaid and cancelled in full on or
prior to the first Utilisation Date.

 

3.                                       Evidence
that a minimum of €300,000,000 net cash proceeds has been unconditionally
received in respect of the Rights Issue.

 

4.                                       A
copy of the Original Business Plan.

 

5.                                       A
copy of the latest Business Plan validated by Ernst & Young in accordance
with the Secured Co-ordination Agreement.

 

6.                                       Evidence
that the necessary amendments to the USPP are effective.

 

7.                                       Evidence
that the necessary amendments to the Affected Facilities (as defined in the
Secured Co-ordination Agreement) are effective.

 

8.                                       Copies
of the executed Agreed Affected Lease Facilities and evidence that the Agreed
Affected Lease Facilities are in full force and effect in each case in form and
substance satisfactory to the Majority Lenders.

 

9.                                       Evidence
that the existing Securitisation Programmes will be maintained or replaced with
new Securitisation Programmes throughout the term of the Agreement.

 

10.                                 A
certificate from the chief financial officer of the Company confirming that the
total net assets and EBITDA directly or indirectly subject to the Security
Documents are greater than or equal to 95% of the total net assets and EBITDA
of the Group.

 

11.                                 A
breakdown of the Exposure under the Facilities which are subject to a Security
Document (as each term is defined in the Secured Co-ordination Agreement)
showing that the total obligations thereunder do not exceed €1,300,000,000 or
its equivalent in other currencies.

 

12.                                 A
copy of any other authorisation or other document, opinion or assurance which
the Facility Agent in good faith has notified the Company is necessary or
desirable in connection with the entry into and performance of, and the
transactions contemplated by, any Finance Document or for the validity and
enforceability of any Finance Document.

 

13.                                 A
letter from the Facility Agent to the Company substantially in the form of
Schedule 11 (Form of Taux Effectif Global Letter).

 

14.                                 A
copy of the Group Structure Chart.

 

95

 

PART
2

 

FOR AN ADDITIONAL BORROWER

 

Additional Borrowers

 

1.                                       An
Accession Agreement, duly executed by the Company and the Additional Borrower.

 

2.                                       A
copy of the memorandum and articles of association, certificate of
incorporation and certificate of incorporation on change of name (if any) or
any other constitutional document of each Additional Borrower including, for
any Additional Borrower incorporated in France, a K-bis extract from the Trade
and Companies Registry related to it.

 

3.                                       A
copy of a resolution of the board of directors of the Additional Borrower
approving the terms of, and the transactions contemplated by, the Accession
Agreement.

 

4.                                       A
certificate of the chief financial officer of the Additional Borrower
certifying that utilisation of the Facility in full would not cause any
borrowing limit binding on the Additional Borrower to be exceeded.

 

5.                                       A
certificate of an authorised signatory of the Additional Borrower certifying:

 

(a)                                  that
each document delivered under this Part 2 of this Schedule is correct,
complete and in full force and effect as at a date no earlier than the date of
Accession Agreement;

 

(b)                                 that
the execution of and assumption of its obligations under the Finance Documents
will not result in any breach of any restriction binding on it;

 

(c)                                  as
to the identify and specimen signatures of its directors and signatories;

 

(d)                                 that
no Default is outstanding relating to it; and

 

(e)                                  that
the representations and warranties made by it in the Finance Documents and the
representation and warranty set out in Clause 18.23 (Solvency of Obligors) as
if set out in the certificate in full in each case on the date of that
certificate by reference to the facts and circumstances then subsisting are
correct.

 

6.                                       A
copy of the latest audited accounts of the Additional Borrower.

 

7.                                       Evidence
that the agent of the Additional Borrower under the Finance Documents for
service of process in England and Wales has accepted its appointment.

 

Security Document(s)

 

1.                                       At
least 2 copies (or, if required in the relevant jurisdiction, such additional
copies as are requested by the Finance Parties) of the Security Documents to be
entered into in accordance with the Agreed Security Principles, each duly
executed by the parties to it.

 

2.                                       Registration
requirements of Security Documents effected.

 

3.                                       Documents
necessary for perfection of Security Documents.

 

4.                                       A
copy of all notices required to be sent under the Security Documents.

 

5.                                       A
copy of all transfers, share certificates and stock transfer forms or
equivalent relating to assets charged by the Security Documents.

 

6.                                       Evidence
that each creditor has waived in writing any negative pledge or other
restriction in its favour that would or could be breached by any member of the
Group entering into the Security Documents.

 

96

 

7.                                       Copies
of the Secured Intra-Group Loans and the Intra-Group Loans subject directly or
indirectly to the Security Documents in an agreed form.

 

Legal opinions

 

1.                                       If
the Additional Borrower is incorporated in a jurisdiction other than England, a
legal opinion from legal advisers in that jurisdiction, addressed to the
Finance Parties.

 

Other documents and evidence

 

1.                                       Evidence
that all expenses due and payable from the Company under this Agreement in
respect of the Accession Agreement have been paid.

 

2.                                       A
copy of any other authorisation or other document, opinion or assurance which
the Facility Agent in good faith has notified the Company is necessary or
desirable in connection with the entry into and performance of, and the
transactions contemplated by, the Accession Agreement or for the validity and
enforceability of any Finance Document.

 

3.                                       A
letter from the Facility Agent to any Additional Borrower incorporated in
France substantially in the form of Schedule 11 (Form of Taux
Effectif Global Letter).

 

97

 

SCHEDULE 3

 

FORM OF REQUEST

 

To: [AGENT] as Facility
Agent

 

From: [                        ]

 

Date: [                        ]

 

RHODIA—€757,721,918 Credit Agreement

dated [DATE], 2004 (the Agreement)

 

1.                                       We
refer to the Agreement. This is a Request.

 

2.                                       We
wish to [borrow a Loan]/[request a Guarantee](1) on the following terms:

 

(a)                                  [Medium-Term
Facility/Short-Term Facility](2): [       
                ]

 

[Tranche A: [                        ]](3)

 

[Tranche B: [                        ]](4)

 

(b)                                 Utilisation
Date: [                        ]

 

(c)                                  Borrower:
[                        ]

 

(d)                                 [Issuing
Bank: [                        ]](5)

 

(e)                                  Amount/currency:
[                        ]

 

(f)                                    Term:
[                        ].

 

3.                                       Our
payment instructions are: [                        ].

 

4.                                       We
confirm that each condition precedent under the Agreement which must be
satisfied on the date of this Request is so satisfied.

 

5.                                       [We
attach a copy of the proposed Guarantee.](6)

 

6.                                       This
Request is irrevocable.

 

By:

 

[                        ]

 

(1)                                  Delete
as appropriate.

(2)                                  Delete
as appropriate.

(3)                                  Delete
as appropriate.

(4)                                  Delete
as appropriate.

(5)                                  Delete
as appropriate.

(6)                                  Delete
as appropriate.

 

98

 

SCHEDULE 4

 

FORM OF GUARANTEE(7)

 

To: [BENEFICIARY] as
Beneficiary

 

From: [ISSUING BANK] as
Issuing Bank

 

Date: [                        ]

 

Guarantee no. [                        ]

 

At the request of
[ISSUING BANK], (the Issuing Bank) issues this irrevocable
guarantee (Guarantee) in your favour on the following terms and
conditions:

 

1.                                      Definitions

 

In this Guarantee:

 

Business Day means
a day (other than a Saturday or a Sunday) on which banks are open for general
business in [London].

 

Demand means a
demand for a payment under this Guarantee in the form of the schedule to
this Guarantee.

 

Expiry Date means
[                        ].

 

Total Guarantee Amount
means [                        ].

 

2.                                      Issuing
Bank’s agreement

 

(a)                                  The
Beneficiary may request a payment [or payments] under this Guarantee by giving
to the Issuing Bank a duly completed Demand. A Demand must be received by the
Issuing Bank on or before the Expiry Date and by no later than [    ]p.m. ([London] time) on the Expiry Date.

 

(b)                                 Subject
to the terms of this Guarantee, the Issuing Bank unconditionally and
irrevocably guarantees to the Beneficiary that, within [ten] Business Days of
receipt by it of a Demand validly presented under this Guarantee, it must pay
to the Beneficiary the amount which is demanded for payment in that Demand.

 

(c)                                  The
Issuing Bank will not be obliged to make a payment under this Guarantee if as a
result the aggregate of all payments made by it under this Guarantee would
exceed the Total Guarantee Amount.

 

3.                                      Expiry

 

(a)                                  On
[    ]pm ([London] time) on the Expiry
Date the obligations of the Issuing Bank under this Guarantee will cease with
no further liability on the part of the Issuing Bank except for any Demand
validly presented before such time under the Guarantee that remains unpaid.

 

(b)                                 The
Issuing Bank will be released from its obligations under this Guarantee on the
date prior to the Expiry Date (if any) notified in writing by the Beneficiary
to the Issuing Bank as the date upon which the obligations of the Issuing Bank
under this Guarantee are released.

 

(c)                                  When
the Issuing Bank is no longer under any obligation under this Guarantee, the
Beneficiary must return the original of the Guarantee to the Issuing Bank, it
being understood that non-restitution of the original Guarantee shall not
affect the release of the Issuing Bank.

 

(7)                                  To
be adapted for relevant governing law

 

99

 

4.                                      Payments

 

All payments under this
Guarantee must be made in [            ]
and for value on the due date to the account of the Beneficiary specified in
the Demand.

 

5.                                      Delivery
of Demand

 

Each Demand must be in
writing, and may be given in person, by post, international courier or
authenticated SWIFT message and must be received in legible form by the Issuing
Bank at its address and by the particular department or officer (if any) as
follows:

 

[

]

 

6.                                      Assignment

 

The Beneficiary’s rights
under this Guarantee may not be assigned or transferred.

 

7.                                      [URDG

 

Except to the extent it
is inconsistent with the express terms of this Guarantee, this Guarantee is
subject to the Uniform Rules for Demand Guarantees, International Chamber of
Commerce Publication No. 458 with the exception of article 20 of the
URDG.]

 

8.                                      [Governing
Law

 

This Guarantee is
governed by [            ] law.]

 

9.                                      [Jurisdiction

 

The [            ] courts have exclusive
jurisdiction to settle any dispute in connection with this Guarantee.]

 

Yours faithfully

 

[ISSUING BANK]

 

By:

 

 

100

 

Schedule

 

FORM OF
DEMAND

 

To: [ISSUING BANK]

 

From: [BENEFICIARY]

 

Date: [                        ]

 

Dear Sirs

 

Guarantee no. [           
] issued in favour of [BENEFICIARY] (the Guarantee)

 

We refer to the
Guarantee. Terms defined in the Guarantee have the same meaning when used in
this Demand.

 

1.                                       We
certify that the sum of [            ]
is due [and has remained unpaid for at least [    ] Business Days under [set out underlying contract or
agreement]. We therefore demand payment of the sum of [            ].

 

2.                                       Payment
should be made to the following account:

 

Name:

 

Account Number:

 

Bank:

 

3.                                       The
date of this Demand is not later than the Expiry Date.

 

Yours faithfully

 

	
  (Authorised Signatory)

  	
  (Authorised Signatory)

  
	
   

  	
   

  
	
   

  	
   

  
	
  For

  	
   

  
	
  [BENEFICIARY]

  	
   

  

 

101

 

SCHEDULE 5

 

CALCULATION OF THE MANDATORY COST

 

1.                                      General

 

The Mandatory Cost is the
weighted average of the rates for each Lender calculated below by the Facility
Agent on the first day of a Term. The Facility Agent must distribute each
amount of Mandatory Cost among the Lenders on the basis of the rate for each
Lender.

 

2.                                      For
a Lender lending from a Facility Office in the U.K.

 

(a)                                  The
relevant rate for a Lender lending from a Facility Office in the U.K. is
calculated in accordance with the following formulae:

 

for a Loan in Sterling:

 

	
  AB+C(B-D)+EX0.01

  	
   per cent. per
  annum

  
	
  100-(A+C)

  

 

for any other Loan:

 

	
  EX0.01

  	
   per cent. per
  annum

  
	
  300

  

 

where on the day of
application of the formula:

 

A                                      is
the percentage of that Lender’s eligible liabilities (in excess of any stated
minimum) which the Bank of England requires it to hold on a
non-interest-bearing deposit account in accordance with its cash ratio
requirements;

 

B                                        is
LIBOR for that Term;

 

C                                        is
the percentage of that Lender’s eligible liabilities which the Bank of England
requires it to place as a special deposit;

 

D                                       is
the interest rate per annum allowed by the Bank of England on a special
deposit; and

 

E                                         is
calculated by the Facility Agent as being the average of the rates of charge
supplied by the Reference Banks to the Facility Agent under paragraph (d) below
and expressed in pounds per £1 million.

 

(b)                                 For
the purposes of this paragraph 2:

 

(i)                                     eligible
liabilities and special deposit have the meanings given to
them at the time of application of the formula by the Bank of England;

 

(ii)                                  fees
rules means the then current rules on periodic fees in the Supervision
Manual of the FSA Handbook; and

 

(iii)                               tariff
base has the meaning given to it in the fees rules.

 

(c)                                  (i)                                     In
the application of the formulae, A, B, C and D are included as figures and not
as percentages, e.g. if A = 0.5% and B = 15%, AB is calculated as 0.5 X 15. A
negative result obtained by subtracting D from B is taken as zero.

 

(ii)                                  Each
rate calculated in accordance with a formula is, if necessary, rounded upward
to four decimal places.

 

102

 

(d)                                 (i)            Each Reference Bank must supply to
the Facility Agent the rate of charge payable by that Reference Bank to the
Financial Services Authority under the fees rules (calculated by that Reference
Bank as being the average of the rates of charge within fee-block Category A1
(Deposit acceptors) applicable to that Reference Bank but, for this purpose,
applying any applicable discount and ignoring any minimum fee required under
the fees rules) and expressed in pounds per £1 million of the tariff base of
that Reference Bank.

 

(ii)                                  Each
Reference Bank must promptly notify the Facility Agent of any change to the
rate of charge.

 

(e)                                  (i)            Each Lender and each Reference Bank
must supply to the Facility Agent the information required by it to make a
calculation of the rate for that Lender or Reference Bank. The Facility Agent
may assume that this information is correct in all respects.

 

(ii)                                  If
a Lender or a Reference Bank fails to do so, the Facility Agent may assume that
the Lender’s or that Reference Bank’s obligations in respect of cash ratio
deposits, special deposits and the fees rules are the same as those of a
typical bank from its jurisdiction of incorporation with a Facility Office in
the U.K.

 

(iii)                               The
Facility Agent has no liability to any Party if its calculation over or under
compensates any Lender.

 

3.                                      For
a Lender lending from a Facility Office in a Participating Member State

 

(a)                                  The
relevant rate for a Lender lending from a Facility Office in a Participating
Member State is the percentage rate per annum notified by that Lender to the
Facility Agent as its cost of complying with the minimum reserve requirements
of the European Central Bank.

 

(b)                                 If
a Lender fails to specify a rate under paragraph (a) above, the Facility Agent
will assume that the Lender has not incurred any such cost.

 

4.                                      Changes

 

The Facility Agent may,
after consultation with the Company and the Lenders, notify all the Parties of
any amendment to this Schedule which is required to reflect:

 

(a)                                  any
change in law or regulation; or

 

(b)                                 any
requirement imposed by the Bank of England, the Financial Services Authority or
the European Central Bank (or, in any case, any successor authority).

 

Any notification will be,
in the absence of manifest error, conclusive and binding on all the Parties.

 

103

 

SCHEDULE 6

 

FORMS OF TRANSFER CERTIFICATE

 

PART
1

 

FORM FOR TRANSFERS BY ASSIGNMENT

 

	
  To:

  	
  [AGENT] as Facility
  Agent

  
	
   

  	
   

  
	
  From:

  	
  [THE EXISTING LENDER]
  (the Existing Lender) and [THE
  NEW LENDER] (the New Lender)

  
	
   

  	
   

  
	
  Date:

  	
  [                ]

  

 

RHODIA—757,721, 918 Credit Agreement

dated [DATE], 2004
(the Agreement)

 

We refer to the
Agreement. This is a Transfer Certificate.

 

1.                                       In
accordance with the terms of the Agreement:

 

(a)                                  the
Existing Lender assigns absolutely to the New Lender all the rights of the
Existing Lender under the Agreement specified in the Schedule;

 

(b)                                 the
Existing Lender is released from all its obligations under the Agreement which
correspond to the Existing Lender’s rights specified in the Schedule; and

 

(c)                                  the
New Lender becomes a Lender under the Agreement and is bound by obligations
equivalent to those from which the Existing Lender is released under paragraph
(b) above.

 

2.                                       The
proposed Transfer Date is [           
].

 

3.                                       The
administrative details of the New Lender for the purposes of the Agreement are
set out in the Schedule.

 

4.                                       In
the case of an assignment, the Existing Lender and the New Lender shall ensure
that the assignment is notified by bailiff (huissier) to the Company in accordance
with Article 1690 of the French Civil Code.

 

5.                                       This
Transfer Certificate is governed by English law.

 

104

 

THE SCHEDULE

 

Rights and obligations to be
transferred by assignment

[insert relevant
details, including applicable Commitment (or part)]

 

Administrative details of the New
Lender

[insert details of
Facility Office, address for notices and payment details etc.]

 

	
  [EXISTING LENDER]

  	
  [NEW LENDER]

  
	
   

  	
   

  
	
  By:

  	
  By:

  
	
   

  	
   

  
	
  The Transfer Date is
  confirmed by the Facility Agent as
  [                 ].

  
	
   

  
	
  [AGENT]

  	
   

  
	
  as Facility Agent, for
  and on behalf

  	
   

  
	
  of each of the parties
  to the

  	
   

  
	
  Agreement (other than
  the Existing Lender and

  	
   

  
	
  the New Lender)

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
			

 

 

Note: It is the responsibility of each individual New Lender
to ascertain whether any other document or formality is required to perfect the
transfer contemplated by this Transfer Certificate including any interest in
security.

 

105

 

PART
2

 

FORM FOR TRANSFERS BY NOVATION

 

	
  To:

  	
   

  	
  [AGENT] as Facility
  Agent

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  [THE EXISTING LENDER]
  (the Existing Lender) and [THE NEW LENDER] (the New Lender)

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  [                        ]

  

 

 

RHODIA—757,721,918 Credit Agreement

dated [DATE], 2004
(the Agreement)

 

We refer to the
Agreement. This is a Transfer Certificate.

 

1.                                       The
Existing Lender transfers by novation to the New Lender the Existing Lender’s
rights and obligations referred to in the Schedule below in accordance
with the terms of the Agreement.

 

2.                                       The
proposed Transfer Date is [    ].

 

3.                                       The
administrative details of the New Lender for the purposes of the Agreement are
set out in the Schedule.

 

4.                                       The
Security Interests created pursuant to the Security Documents are expressly
reserved by the Existing Lender in accordance with Article 1278 et seq.
of the French Civil Code and Article 1278 of the Belgian Civil Code and
such Security Interests shall benefit the New Lender with the same ranking as
that benefiting the Existing Lender prior to the novation.

 

5.                                       This
Transfer Certificate is governed by English law.

 

106

 

THE SCHEDULE

 

Rights and obligations to be
transferred by novation

[insert relevant
details, including applicable Commitment (or part)]

 

Administrative details of the New
Lender

[insert details of
Facility Office, address for notices and payment details etc.]

 

 

	
  [EXISTING LENDER]

  	
  [NEW LENDER]

  
	
   

  	
   

  
	
  By:

  	
  By:

  
	
   

  	
   

  
	
  The Transfer Date is
  confirmed by the Facility Agent as [                        ].

  
	
   

  
	
  [AGENT]

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
			

 

 

Note: It is the responsibility of each individual New Lender
to ascertain whether any other document or formality is required to perfect the
transfer contemplated by this Transfer Certificate including any interest in
security.

 

107

 

SCHEDULE 7

 

EXISTING SECURITY AND EXISTING
INDEBTEDNESS

 

PART
1

 

EXISTING SECURITY INTEREST

 

More than 50% owned Subsidiaries

 

	
  Nature of the security interest

  	
   

  	
  Entity / Entreprise

  	
   

  	
  Beneficiary

  	
   

  	
  Amount

  (EUR)

  	
   

  	
  Purpose*

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Silica Korea

  	
   

  	
  Koram Bank (dépôt
  obligatoire afin de conserver le compte bancaire)

  	
   

  	
  1,713

  	
   

  	
  YES

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Chemie NV

  	
   

  	
  ING

  	
   

  	
  18,000,000

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Energy

  	
   

  	
  TotalFina

  	
   

  	
  6,000,000

  	
   

  	
  YES

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Energy

  	
   

  	
  SIDEC (boiler
  maintenance)

  	
   

  	
  1,000,000

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Energy

  	
   

  	
  PARIS LEASE (Cogen
  Chalampé lease)

  	
   

  	
  693,000

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Energy

  	
   

  	
  CARGIL (trading
  activities in Geneva)

  	
   

  	
  583,000

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Recherches

  	
   

  	
  CMCIC Lease

  	
   

  	
  194,500

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia SA

  	
   

  	
  CMCIC Lease

  	
   

  	
  1,099,285

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Performances
  Fibres SRL

  	
   

  	
  EGL (LT deposit)

  	
   

  	
  153,000

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Performances
  Fibres SRL

  	
   

  	
  Telecom (letter of
  credit)

  	
   

  	
  11,000

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Pi Belle Etoile

  	
   

  	
  Air Liquide

  	
   

  	
  424,000

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Acetow Gmbh

  	
   

  	
  Commerzbank

  	
   

  	
  285,766

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Acetow Gmbh

  	
   

  	
  Dresdner

  	
   

  	
  319,836

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Limited

  	
   

  	
  HSBC (contrepartie
  d’une garantie émise par HSBC en faveur de Rhodia Consumer Spec. Ltd)

  	
   

  	
  110,448

  	
   

  	
  NO

  	
   

  
	
  Fixed
  assets mortgage

  	
   

  	
  Baotou Rhodia Rare
  Earth Co. Ltd.

  	
   

  	
  Bank of China (pledge
  d’actifs en contrepartie d’un prêt BOC)

  	
   

  	
  2,868,179

  	
   

  	
  YES

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Finance
  International BV

  	
   

  	
  Natexis Banques
  Populaires (achat d’actions)

  	
   

  	
  8,071,228

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Brasil

  	
   

  	
  Banco do Brasil (liée à
  une standby letter of credit en faveur de Banco Mercantil Venezuela 2 MUSD)

  	
   

  	
  1,934,580

  	
   

  	
  NO

  	
   

  
	
  Mortgage

  	
   

  	
  Rhodia Brasil

  	
   

  	
  Social Security
  Authority (Pledge de la Casa Rhodia)

  	
   

  	
  1,575,301

  	
   

  	
  NO

  	
   

  
	
  Equipments

  	
   

  	
  Rhodia Poliamida e
  Especialidades

  	
   

  	
  Tax Judicial
  Proceedings (pledge d’actifs)

  	
   

  	
  829,106

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Brasil + Rhodia
  Poliamida e Especialidades

  	
   

  	
  Judicial Proceedings

  	
   

  	
  9,285,983

  	
   

  	
  NO

  	
   

  
	
  Fixed
  assets

  	
   

  	
  Rhodia Mexicana SA de
  C.V.

  	
   

  	
  Mexican Customs

  	
   

  	
  34,987,921

  	
   

  	
  NO

  	
   

  
	
  Short
  term investments

  	
   

  	
  CEIMIC-RE

  	
   

  	
  AGF

  	
   

  	
  11,645,930

  	
   

  	
  NO

  	
   

  
	
  Collateral
  cash

  	
   

  	
  Rhodia Italia

  	
   

  	
  Mediobanca (en
  contrepartie du financement Nylstar)

  	
   

  	
  11,924,271

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Silicones

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  293,592

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Silices

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  978,529

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia PPMC

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  1,551,548

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Polyamide
  Intermediates

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  2,182,619

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Performance
  Fibres

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  24,698

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Electronics
  & Catalysis

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  1,820,967

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhoditech

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  129,391

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Pi Belle Etoile

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  149,382

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Pi Chalampe

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  40,002

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Acetol

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  178,175

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  RHODIA ENERGY

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  1,823,026

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  RHODIA ECO SERVICES
  SULFURIQUE

  	
   

  	
  Crédit Mutuel-Sales of
  Receivables

  	
   

  	
  1,628,703

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Asia Pacific Pte
  Ltd

  	
   

  	
  Standard Chartered Bank

  	
   

  	
  710,564

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Asia Pacific Pte
  Ltd

  	
   

  	
  Various vendors
  (cautions diverses envers fournisseurs, locations...)

  	
   

  	
  281,851

  	
   

  	
  NO

  	
   

  
	
  Cash
  deposit

  	
   

  	
  Rhodia Chili Ltda

  	
   

  	
  Office rental guarantee

  	
   

  	
  2,852

  	
   

  	
  NO

  	
   

  
	
   

  	
   

  	
  Rhodia Chili Ltda

  	
   

  	
  Sudameris (car leasing)

  	
   

  	
  7,605

  	
   

  	
  NO

  	
   

  
	
   

  	
   

  	
  Rhodia Argentina

  	
   

  	
  Office rental guarantee

  	
   

  	
  4,200

  	
   

  	
  NO

  	
   

  

 

108

 

	
  Nature of the security interest

  	
   

  	
  Entity / Entreprise

  	
   

  	
  Beneficiary

  	
   

  	
  Amount

  (EUR)

  	
   

  	
  Purpose*

  	
   

  
	
  United States Security Interests (Excluding
  SG/JPMorganChase Leases)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All
  receivables, underlying inventory & related cash collections in
  controlled accounts

  	
   

  	
  Rhodia Inc., Rhodia
  E&C, Rhodia Canada Inc.

  	
   

  	
  Wachovia Bank, NA, as
  Agent (re receivable securitisation program)

  	
   

  	
  100,660,332

  	
   

  	
  YES

  	
   

  
	
  Cash
  (LOC Agreement contract sec. interest/offset right chargeable against
  securitization cash collections)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Wachovia Bank, N.A.

  	
   

  	
  5,636,979

  	
   

  	
  YES

  	
   

  
	
  Equipment

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Industrial Development
  Revenue Bonds (Stauffer Chemical Company Project) Series 1978 of City of
  Chicago Heights, IL

  	
   

  	
  805,283

  	
   

  	
  YES

  	
   

  
	
  Equipment

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Pollution Control
  Revenue Bonds (Stauffer Chemical Company Project) Series 1978 of City of
  Chicago Heights

  	
   

  	
  2,013,207

  	
   

  	
  YES

  	
   

  
	
  Equipment

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Variable Rate Demand
  Pollution Control Revenue Refunding Bonds (Rhone-Poulenc Inc. Project) Series
  1992 pf Butte-Silver Bow, State of Mont

  	
   

  	
  2,580,931

  	
   

  	
  YES

  	
   

  
	
  Equipment

  	
   

  	
  Rhodia Inc.

  	
   

  	
  CA Pollution Control
  Financing Authority, Pollution Control Revenue Bonds (Stauffer Chemical
  Company Project) Series 1982

  	
   

  	
  3,543,244

  	
   

  	
  YES

  	
   

  
	
  Cash

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Variable Rate Demand
  Pollution Control Revenue Refunding Bonds (Rhone-Poulenc Project) Series 1993
  of Parish of Eash Baton Rouge, LA

  	
   

  	
  3,325,817

  	
   

  	
  YES

  	
   

  
	
  Cash
  (securing fronting insurance policy exposure)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Liberty Mutual
  Insurance**

  	
   

  	
  805,283

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing contractual real property improvement obligations—Madison, WI)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  City of Madison, WI

  	
   

  	
  181,994

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing contractual environmental remediation obligations—Dominguez, CA)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  California State Lands
  Commission

  	
   

  	
  1,207,924

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing utility payment obligations)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  So. California Edison

  	
   

  	
  147,367

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing utility payment obligations)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Nashville Water Utility
  Co.

  	
   

  	
  32,211

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing lease performance obligations—Malvern, PA)

  	
   

  	
  Rhodia ChiRex America
  Inc.

  	
   

  	
  Fox Realty

  	
   

  	
  31,809

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing lease performance obligations—Boston, MA)

  	
   

  	
  Rhodia ChiRex America
  Inc.

  	
   

  	
  Pinnacle Properties

  	
   

  	
  31,406

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing lease performance obligations—Winder, GA)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Garrard-Smith

  	
   

  	
  52,343

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing lease performance obligations—Troy, NY)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Rensselear Polytechnic
  Institute

  	
   

  	
  12,079

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing lease performance obligations—Farmington Hills, MI)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Enco Properties L.C.

  	
   

  	
  8,376

  	
   

  	
  NO

  	
   

  
	
  Cash
  (securing lease performance obligations—Houston, TX)

  	
   

  	
  Rhodia Inc.

  	
   

  	
  Eureka Hand Ltd.

  	
   

  	
  3,337

  	
   

  	
  NO

  	
   

  
	
  Total More than 50% owned Subsidiaries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  246,932,794

  	
   

  	
   

  	
   

  

 

Relevant Entities (less than 50% owned)
listed in Schedule 1

 

	
  Nature of the security interest

  	
   

  	
  Entity / Entreprise

  	
   

  	
  Beneficiary

  	
   

  	
  Amount

  (EUR)

  	
   

  	
  Purpose*

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed
  assets

  	
   

  	
  Liyang Rhodia Founder
  Rare Earth Co. Ltd

  	
   

  	
  Banques chinoises
  (ICBC, ABC, UAC)

  	
   

  	
  19,370,908

  	
   

  	
  YES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Relevant Entities (less than 50%
  owned)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  19,370,908

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  266,303,701

  	
   

  	
   

  	
   

  

 

*                                         YES
if related to financial debt of Subsidiaries (more than 50% owned) or relevant
Entities listed in Schedule 1

 

109

 

PART
2

 

EXISTING INDEBTEDNESS

 

Important Note

All amounts are as of
29th February 2004,

based or F/X rates as of
29th February 2004

(US$/€: 1.2418;

GBP/€ 0.6700; Yen/€:
135.63)

 

	
  Existing Facility

  	
   

  	
  Refinanced

  Facilities

  	
   

  	
  Lender

  	
   

  	
  Borrowing Group

  	
   

  	
  Country

  	
   

  	
  Exposure

  
	
  Bonds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EMTN 6.25% 2005

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia SA

  	
   

  	
   

  	
   

  	
  500.0

  
	
  EMTN 6.0% 2006

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia SA

  	
   

  	
   

  	
   

  	
  300.0

  
	
  High Yield 7.625% 2010

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia SA

  	
   

  	
   

  	
   

  	
  161.1

  
	
  High Yield 8.0% 2010

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia SA

  	
   

  	
   

  	
   

  	
  200.0

  
	
  High Yield 8.875% 2011

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia SA

  	
   

  	
   

  	
   

  	
  310.0

  
	
  High Yield 9.25% 2011

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia SA

  	
   

  	
   

  	
   

  	
  300.0

  
	
  Bond 1.2% 2011

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia Inc

  	
   

  	
   

  	
   

  	
  2.5

  
	
  Bond 1.2% 2016

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia Inc

  	
   

  	
   

  	
   

  	
  1.9

  
	
  Bond 6.25% 2008

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia Inc

  	
   

  	
   

  	
   

  	
  1.6

  
	
  Bond 7.9% 2012

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia Inc

  	
   

  	
   

  	
   

  	
  3.5

  
	
  US PP 9.0% 2009

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia SA

  	
   

  	
   

  	
   

  	
  86.6

  
	
  US PP 9.45% 2012

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia SA

  	
   

  	
   

  	
   

  	
  30.2

  
	
  Bond 2006

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia Polyamide Polska

  	
   

  	
   

  	
   

  	
  25.0

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,922.5

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial
  Paper

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial Paper

  	
   

  	
  No

  	
   

  	
  n/m

  	
   

  	
  Rhodia SA

  	
   

  	
   

  	
   

  	
  21.5

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  21.5

  

 

110

 

Any text that has been
deleted pursuant to Rhodia’s confidential treatment request is marked.  [***] herein and has been separately
submitted to the Securities and Exchange Commission.

 

[***]

 

[7 PAGES DELETED,
INCLUDING THIS PAGE, AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTION OF THE SCHEDULE.]

 

111

 

SCHEDULE 8

 

FORM OF COMPLIANCE CERTIFICATE

 

[To be completed by Chief Financial Officer/Auditors and to
include details of definitions and

computations of financial covenants]

 

	
  To:

  	
  [AGENT]

  
	
   

  	
   

  
	
  From:

  	
  [                      ]

  
	
   

  	
   

  
	
  Date:

  	
  [                      ]

  

 

 

Dear Sirs

 

RHODIA – €757,721,918 Credit
Agreement

dated [DATE], 2004 (the
Agreement)

 

I refer to the Agreement
and in particular to Clause 20.1 (Financial covenant definitions), Clause 20.2
(Ratio of Consolidated Net Indebtedness to Adjusted EBITDAR), Clause 20.3 (Ratio
of EBITDAR to Net Financial Expenses), Clause 20.4 (Consolidated Net
Indebtedness) and 20.5 (Restructuring Costs) thereof.

 

Terms defined in the
Agreement shall have the same meaning when used in this certificate.

 

I certify as follows:

 

1.                                       For
the Ratio Period ending on [  •  ]:

 

(a)                                  the
Borrower’s EBITDAR was [            ];

 

(b)                                 the
Borrower’s Adjusted EBITDAR was [           
];

 

(c)                                  the
Borrower’s Consolidated Net Indebtedness was [            ]; and

 

(d)                                 the
Borrower’s Net Financial Expenses were [            ].

 

Accordingly
for the Ratio Period referred to above:

 

(i)                                     the
ratio of the Borrower’s EBITDAR to its Net Financial Expenses was: [            ];

 

(ii)                                  the
ratio of the Borrower’s Consolidated Net Indebtedness to Adjusted EBITDAR was:
[            ].

 

2.                                       Since
the date of the Original Business Plan the consolidated restructuring costs of
the Group are [            ].
Accordingly such restructuring costs do not exceed [115%/120%/130%] of the
restructuring costs referred to in the Original Business Plan on [31st
December, 2004/30th June, 2005/31st December, 2005].

 

112

 

3.                                       The
following table sets out the information in relation to Relevant Entities used
in the calculation of Adjusted EBITDAR referred to at paragraph 1(b):

 

	
  Relevant Entity

  and place of

  incorporation /

  establishment

  	
   

  	
  Relevant Entity

  EBITDAR

  	
   

  	
  Borrower’s participation in the

  capital of the Relevant Entity

  	
   

  	
  Amount of

  adjustment to

  Borrower’s

  EBITDAR for

  Relevant Entity

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

4.                                       The
following components were used in the calculation of the Borrower’s
Consolidated Net Indebtedness:

 

(a)                                  Gross
debt = [            ];

 

(b)                                 Cash
position = [            ];

 

(c)                                  Sale
of receivables = [            ];

 

(d)                                 Securitisation
outstanding = [            ]; and

 

(e)                                  Leasing
= [            ].

 

5.                                       The
following components were used in the calculation of the Borrower’s Net
Financial Expenses:

 

Interest Expense
including interest portion of lease rentals = [            ]; and

 

Interest income =
[            ].

 

Chief Financial
Officer/Auditors

 

113

 

SCHEDULE 9

 

FORM OF ACCESSION AGREEMENT

 

	
  To:

  	
  [AGENT] as Facility
  Agent

  
	
  From:

  	
  RHODIA and [Proposed
  Borrower]

  
	
  Date:

  	
  [                        ]

  

 

RHODIA – €757,721,918 Credit
Agreement

dated [DATE], 2004 (the
Agreement)

 

We refer to the
Agreement. This is an Accession Agreement.

 

[Name of company] of
[address/registered office] agrees to become an Additional Borrower and to be
bound by the terms of the Agreement as an Additional Borrower.

 

This Accession Agreement
is governed by English law.

 

 

RHODIA

 

 

By:

 

 

[PROPOSED BORROWER]

 

 

By:

 

114

 

SCHEDULE 10

 

FORM OF RESIGNATION REQUEST

 

	
  To:

  	
  [AGENT] as Facility
  Agent

  
	
  From:

  	
  RHODIA and [relevant
  Borrower]

  
	
  Date:

  	
  [                        ]

  

 

RHODIA – €757,721,918 Credit
Agreement

dated [DATE], 2004
(the Agreement)

 

1.                                       We
refer to the Agreement. This is a Resignation Request.

 

2.                                       We
request that [resigning Borrower] be released from its obligations as a
Borrower under the Agreement.

 

3.                                       We
confirm that no Default is outstanding or would result from the acceptance of
this Resignation Request.

 

4.                                       We
confirm that as at the date of this Resignation Request no amount owed by
[resigning Borrower] under the Agreement is outstanding.

 

5.                                       This
Resignation Request is governed by English law.

 

 

	
  RHODIA

  	
  [Relevant Borrower]

  
	
   

  	
   

  
	
  By:

  	
  By:

  

 

 

The Facility Agent
confirms that this resignation takes effect on [                        ].

 

[AGENT]

 

By:

 

115

 

SCHEDULE 11

 

FORM OF TAUX EFFECTIF GLOBAL LETTER

 

[ON THE LETTERHEAD OF THE FACILITY
AGENT]

 

	
  From:

  	
  [AGENT] as Facility
  Agent

  
	
  To:

  	
  RHODIA

  
	
  Date:

  	
  [            ]

  

 

 

Dear Sirs,

 

RHODIA – €757,721,918 Credit
Agreement

dated [DATE], 2004 (the
Agreement)

 

We refer to the
Agreement. Terms defined in the Agreement shall bear the same meaning in this
letter unless otherwise defined in this letter.

 

This is the letter
setting out the applicable effective global rate (taux effectif global)
referred to in the Agreement.

 

The applicable taux
effectif global, calculated on the basis of a 365 day year, is:

 

(a)                                  In
respect of the Medium-Term Facility:

 

(i)                                     for
a Term of one month and at EURIBOR rate of [   
] per cent. per annum, [TEG rate to be inserted] per cent. (which
corresponds to a taux de période of [Period rate to be inserted] per cent.
for a durée
de période of one month;

 

(ii)                                  for
a Term of two months and at EURIBOR rate of [    ] per cent. per annum, [TEG rate to be inserted] per cent.
(which corresponds to a taux de période of [Period rate to be
inserted]% for a durée de période of two months; and

 

(iii)                               for
a Term of three months and at EURIBOR rate of [    ] per cent. per annum, [TEG rate to be inserted]per cent.
(which corresponds to a taux de période of [Period rate to be
inserted] per cent. for a durée de période of three months.

 

(b)                                 In
respect of the Short-Term Facility for a Term of one month and at EURIBOR rate
of [    ] per cent. per annum, [TEG rate
to be inserted] per cent. (which corresponds to a taux de période of [Period
rate to be inserted] per cent. for a durée de période of one month).

 

The above rates:

 

(a)                                  are
given in order to comply with the provisions of article L.313-1 et seq.
of the French Code de la Consommation and on an indicative basis and for
information only;

 

(b)                                 are
calculated on the basis that:

 

(i)                                     drawdown
for the full amount of the Facility has been made by way of Loans in euro on
[DATE];

 

(ii)                                  the
EURIBOR rate, expressed as an annual rate, is as fixed on [DATE];

 

(iii)                               the
Margin is the maximum applicable; and

 

(c)                                  take
into account the various fees, costs and expenses payable by you under the
Agreement.

 

116

 

This letter is designated
a Finance Document.

 

Please confirm your
acceptance of the terms of this letter by signing and returning to us the
enclosed copy.

 

Yours faithfully,

 

	
   

  	
   

  
	
  [AGENT]

  	
   

  
	
  as Facility Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  We agree to the above.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  RHODIA

  	
   

  

 

117

 

SCHEDULE 12

 

ERISA EVENTS’

 

For the purpose of this
Agreement, an ERISA Event means:

 

(a)                                  (i)
the occurrence of a reportable event, within the meaning of Section 4043
of ERISA, with respect to any Plan unless the 30-day notice requirement with
respect to such event has been waived by the PBGC or

 

(ii)                                  the
requirements of Section 4043(b) of ERISA apply with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a
Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to
such Plan within the following 30 days;

 

(b)                                 the
application pursuant to Section 412(d) of the Code or Section 303 of
ERISA for a minimum funding waiver with respect to a Plan;

 

(c)                                  the
provision by the administrator of any Plan of a notice of intent to terminate
such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA);

 

(d)                                 the
cessation of operations at a facility of any Obligor or any ERISA Affiliate in
the circumstances described in Section 4062(e) of ERISA;

 

(e)                                  the
withdrawal by any Obligor or any ERISA Affiliate from a Multiemployer Plan
during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA;

 

(f)                                    the
imposition of a lien under Section 302(f) of ERISA with respect to any
Plan;

 

(g)                                 the
adoption of an amendment to a Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA; or

 

(h)                                 the
institution by the PBGC of proceedings to terminate a Plan pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, such Plan,
provided, however, that the occurrence of the event or condition described in
Section 4042(a)(4) of ERISA shall be an ERISA Event only if the PBGC has
notified any Obligor or ERISA Affiliate that it intends to institute
proceedings to terminate a Plan pursuant to such subsection.

 

118

 

SCHEDULE 13

 

INTRA-GROUP LOANS

 

PART
1

 

INTERCOMPANY LOANS / BORROWINGS
BETWEEN RHODIA S.A. AND ITS SUBSIDIARIES

 

	
  Transaction

  	
   

  	
  Consolidation

  method

  	
   

  	
  subsidiary

  	
   

  	
  drawdown

  	
   

  	
  Maturity

  	
   

  	
  Interest

  Rate

  	
   

  	
  Nominal

  Amount

  	
   

  	
  Currency

  	
   

  	
  Closing

  Price

  	
   

  	
  Closing

  Amount

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  GESMO

  	
   

  	
  18/12/03

  	
   

  	
  18/03/04

  	
   

  	
  3

  	
   

  	
  5,402,888.07

  	
   

  	
  CHF

  	
   

  	
  1.57800

  	
   

  	
  3,423,883.44

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Equity
  Method

  	
   

  	
  NYLSTAR
  NV

  	
   

  	
  29/12/03

  	
   

  	
  29/03/04

  	
   

  	
  3.142

  	
   

  	
  19,609,408.31

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  19,609,408.31

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Equity
  Method

  	
   

  	
  NYLSTAR
  NV

  	
   

  	
  12/01/04

  	
   

  	
  29/03/04

  	
   

  	
  3.10025

  	
   

  	
  2,500,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  2,500,000.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Equity
  Method

  	
   

  	
  NYLSTAR
  NV

  	
   

  	
  20/01/04

  	
   

  	
  29/03/04

  	
   

  	
  3.077

  	
   

  	
  2,500,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  2,500,000.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Non
  Consolidated

  	
   

  	
  RHODIA
  ARGENTINA S.A.

  	
   

  	
  31/12/03

  	
   

  	
  15/03/04

  	
   

  	
  1.66813

  	
   

  	
  1,263,509.18

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  1,017,482.03

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  ASIA PACIFIC PTE, LTD

  	
   

  	
  19/12/03

  	
   

  	
  01/07/04

  	
   

  	
  2.1959

  	
   

  	
  5,000,000.00

  	
   

  	
  SGD

  	
   

  	
  2.11100

  	
   

  	
  2,368,545.71

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CANADA INC

  	
   

  	
  27/02/04

  	
   

  	
  31/03/04

  	
   

  	
  4.53667

  	
   

  	
  20,278,400.00

  	
   

  	
  CAD

  	
   

  	
  1.67580

  	
   

  	
  12,100,728.01

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CANADA INC

  	
   

  	
  27/02/04

  	
   

  	
  31/03/04

  	
   

  	
  3.29625

  	
   

  	
  11,000,000.00

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  8,858,109.20

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHEMIE NV

  	
   

  	
  20/02/04

  	
   

  	
  22/03/04

  	
   

  	
  5.103

  	
   

  	
  3,625,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  3,625,000.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHEMIE NV

  	
   

  	
  27/02/04

  	
   

  	
  22/03/04

  	
   

  	
  5.12

  	
   

  	
  880,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  880,000.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHEMIE NV

  	
   

  	
  25/02/04

  	
   

  	
  22/03/04

  	
   

  	
  5.115

  	
   

  	
  240,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  240,000.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHEMIE NV

  	
   

  	
  27/02/04

  	
   

  	
  30/06/04

  	
   

  	
  5.123

  	
   

  	
  18,100,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  18,100,000.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHINA

  	
   

  	
  10/11/03

  	
   

  	
  20/05/04

  	
   

  	
  2.55

  	
   

  	
  1,100,000.00

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  885,810.92

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHIREX HOLDINGS LTD

  	
   

  	
  03/09/01

  	
   

  	
  04/01/05

  	
   

  	
  5.63

  	
   

  	
  21,653,612.00

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  32,318,823.88

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHIREX HOLDINGS LTD

  	
   

  	
  03/09/01

  	
   

  	
  03/01/06

  	
   

  	
  6.25

  	
   

  	
  19,988,725.38

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  29,833,918.48

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHIREX HOLDINGS LTD

  	
   

  	
  03/09/01

  	
   

  	
  03/01/07

  	
   

  	
  6.28

  	
   

  	
  18,784,593.91

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  28,036,707.33

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Non
  Consolidated

  	
   

  	
  RHODIA
  CONSOMER SPEC. BV

  	
   

  	
  30/01/04

  	
   

  	
  30/04/04

  	
   

  	
  5.122

  	
   

  	
  589,164.82

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  589,164.82

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  DE MEXICO

  	
   

  	
  31/12/03

  	
   

  	
  19/03/04

  	
   

  	
  1.67

  	
   

  	
  20,421,429.42

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  16,445,022.89

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  DEUTSCHLAND GMBH

  	
   

  	
  27/02/04

  	
   

  	
  04/03/04

  	
   

  	
  3.05

  	
   

  	
  5,000,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  5,000,000.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  DEUTSCHLAND GMBH

  	
   

  	
  30/01/04

  	
   

  	
  30/07/04

  	
   

  	
  4.22

  	
   

  	
  6,430,013.08

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  5,177,978.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  ECO SERVICES NEDERLAND B.V

  	
   

  	
  20/02/04

  	
   

  	
  22/03/04

  	
   

  	
  5.103

  	
   

  	
  4,748,700.63

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  4,748,700.63

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  ENERGY SAS

  	
   

  	
  06/02/04

  	
   

  	
  05/03/04

  	
   

  	
  5.117

  	
   

  	
  3,404,758.71

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  3,404,758.71

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  ENGINEERING PLASTICS CO, LTD

  	
   

  	
  18/12/03

  	
   

  	
  18/03/04

  	
   

  	
  2.67

  	
   

  	
  2,024,613.74

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  1,630,386.33

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  ENGINEERING PLASTICS CO, LTD

  	
   

  	
  30/01/04

  	
   

  	
  31/03/04

  	
   

  	
  2.6

  	
   

  	
  1,006,797.82

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  810,756.82

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  ENGINEERING PLASTICS CO, LTD

  	
   

  	
  18/12/03

  	
   

  	
  01/07/04

  	
   

  	
  2.75

  	
   

  	
  1,500,000.00

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  1,207,923.98

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  ENGINEERING PLASTICS NV

  	
   

  	
  07/11/03

  	
   

  	
  08/11/04

  	
   

  	
  8.5

  	
   

  	
  15,500,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  15,500,000.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  ESPECIALIDADOS

  	
   

  	
  31/12/03

  	
   

  	
  19/03/04

  	
   

  	
  1.67

  	
   

  	
  2,653,509.78

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  2,136,825.40

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  FINANCE INTL

  	
   

  	
  26/02/04

  	
   

  	
  30/03/04

  	
   

  	
  5.105

  	
   

  	
  78,760,614.37

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  78,760,614.37

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  FOSFATADOS DE MEXICO

  	
   

  	
  31/12/03

  	
   

  	
  19/03/04

  	
   

  	
  1.67

  	
   

  	
  35,195,577.06

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  28,342,387.71

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  FOSFATADOS DE MEXICO

  	
   

  	
  31/12/03

  	
   

  	
  19/03/04

  	
   

  	
  1.67

  	
   

  	
  44,720,199.52

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  36,012,400.97

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  HOLDING LIMITED

  	
   

  	
  03/09/01

  	
   

  	
  03/01/06

  	
   

  	
  6.25

  	
   

  	
  53,815,799.10

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  80,322,088.21

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  HOLDING LIMITED

  	
   

  	
  03/09/01

  	
   

  	
  03/01/07

  	
   

  	
  6.28

  	
   

  	
  50,573,906.67

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  75,483,442.79

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  HOLDING LIMITED

  	
   

  	
  03/09/01

  	
   

  	
  03/01/08

  	
   

  	
  6.3

  	
   

  	
  47,528,828.10

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  70,938,549.40

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  HOLDING LIMITED

  	
   

  	
  02/01/02

  	
   

  	
  05/01/09

  	
   

  	
  6.295

  	
   

  	
  62,438,838.28

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  93,192,295.94

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  HOLDING LIMITED

  	
   

  	
  02/01/02

  	
   

  	
  04/01/10

  	
   

  	
  6.301

  	
   

  	
  58,724,352.50

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  87,648,287.31

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  IBERIA

  	
   

  	
  27/02/04

  	
   

  	
  30/03/04

  	
   

  	
  5.10438

  	
   

  	
  6,300,643.43

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  6,300,643.43

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  IBERIA

  	
   

  	
  29/12/03

  	
   

  	
  20/12/04

  	
   

  	
  3.627

  	
   

  	
  50,900,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  50,900,000.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Non
  Consolidated

  	
   

  	
  RHODIA
  INDONESIA

  	
   

  	
  18/12/03

  	
   

  	
  01/07/04

  	
   

  	
  2.55

  	
   

  	
  500,000.00

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  402,641.33

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  INDUSTRIAL YARNS AG

  	
   

  	
  27/02/04

  	
   

  	
  22/03/04

  	
   

  	
  3.28

  	
   

  	
  13,380,087.69

  	
   

  	
  CHF

  	
   

  	
  1.57800

  	
   

  	
  8,479,143.02

  	
   

  

 

119

 

	
  Transaction

  	
   

  	
  Consolidation

  method

  	
   

  	
  subsidiary

  	
   

  	
  drawdown

  	
   

  	
  Maturity

  	
   

  	
  Interest

  Rate

  	
   

  	
  Nominal

  Amount

  	
   

  	
  Currency

  	
   

  	
  Closing

  Price

  	
   

  	
  Closing

  Amount

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  INDUSTRIAL YARNS SLOVAKIA A.S.

  	
   

  	
  27/02/04

  	
   

  	
  31/03/04

  	
   

  	
  5.105

  	
   

  	
  3,659,755.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  3,659,755.00

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  JAPAN LTD

  	
   

  	
  07/01/04

  	
   

  	
  31/03/04

  	
   

  	
  3.145

  	
   

  	
  2,906,690,746

  	
   

  	
  JPY

  	
   

  	
  135.63000

  	
   

  	
  21,431,031.08

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  JAPAN LTD

  	
   

  	
  19/12/03

  	
   

  	
  01/07/04

  	
   

  	
  1.4

  	
   

  	
  1,000,000,000

  	
   

  	
  JPY

  	
   

  	
  135.63000

  	
   

  	
  7,373,000.07

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  MEXICANA SA

  	
   

  	
  31/12/03

  	
   

  	
  19/03/04

  	
   

  	
  1.67

  	
   

  	
  71,354,352.25

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  57,460,422.17

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  NEDERLAND

  	
   

  	
  20/02/04

  	
   

  	
  22/03/04

  	
   

  	
  5.103

  	
   

  	
  1,455,181.73

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  1,455,181.73

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  PARTICITIONS

  	
   

  	
  29/10/03

  	
   

  	
  30/04/04

  	
   

  	
  3.508

  	
   

  	
  62,252,844.16

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  62,252,844.16

  	
   

  
	
  Subsidiary Borrower

  	
   

  	
  Non
  Consolidated

  	
   

  	
  RHODIA
  URUGUAY

  	
   

  	
  04/12/03

  	
   

  	
  04/03/04

  	
   

  	
  2.48

  	
   

  	
  768,629.27

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  618,963.82

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  ALAVER

  	
   

  	
  22/12/03

  	
   

  	
  21/06/04

  	
   

  	
  1.7125

  	
   

  	
  8,137,077.24

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  6,552,647.16

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  ALBRIGHT
  & WILSON CHEMICALS PTY LTD

  	
   

  	
  20/02/04

  	
   

  	
  22/03/04

  	
   

  	
  5.285

  	
   

  	
  14,820,527.30

  	
   

  	
  AUD

  	
   

  	
  1.61590

  	
   

  	
  9,171,685.93

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  PARTICIPATION
  ET DE GESTION

  	
   

  	
  27/02/04

  	
   

  	
  31/03/04

  	
   

  	
  0.0000001

  	
   

  	
  30,924,229.64

  	
   

  	
  CHF

  	
   

  	
  1.57800

  	
   

  	
  19,597,103.70

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  PARTICIPATIONS
  CHIMIQUES C/O SEFIGE

  	
   

  	
  29/12/03

  	
   

  	
  30/03/04

  	
   

  	
  1.045

  	
   

  	
  462,954.68

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  372,809.37

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CAPITAL MARKET—GENEVE

  	
   

  	
  20/01/04

  	
   

  	
  22/03/04

  	
   

  	
  0.115

  	
   

  	
  600,357.37

  	
   

  	
  CHF

  	
   

  	
  1.57800

  	
   

  	
  380,454.61

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHEM ITALIA S.P.A.

  	
   

  	
  27/02/04

  	
   

  	
  31/03/04

  	
   

  	
  3.555

  	
   

  	
  55,500,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  55,500,000.00

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHEM ITALIA S.P.A.

  	
   

  	
  12/02/04

  	
   

  	
  31/03/04

  	
   

  	
  3.563

  	
   

  	
  1,231,279.87

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  1,231,279.87

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHIMIE

  	
   

  	
  02/12/03

  	
   

  	
  03/03/04

  	
   

  	
  2.029

  	
   

  	
  91,170,904.99

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  91,170,904.99

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  CHIMIE

  	
   

  	
  09/10/03

  	
   

  	
  07/10/04

  	
   

  	
  2

  	
   

  	
  185,000,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  185,000,000.00

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  ENGINEERING PLASTICS NV

  	
   

  	
  04/02/04

  	
   

  	
  04/03/04

  	
   

  	
  1.947

  	
   

  	
  13,216,303.62

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  13,216,303.62

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  Rhodia
  Finance

  	
   

  	
  29/12/03

  	
   

  	
  29/06/04

  	
   

  	
  1.882

  	
   

  	
  90,356,900.10

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  90,356,900.10

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  HOLDING LIMITED

  	
   

  	
  02/01/04

  	
   

  	
  31/03/04

  	
   

  	
  9.26445

  	
   

  	
  228,719,050.73

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  341,371,717.51

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  HPCII ESPAGNE

  	
   

  	
  27/02/04

  	
   

  	
  30/03/04

  	
   

  	
  1.928

  	
   

  	
  2,711,714.75

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  2,711,714.75

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  IBERLATEX ESPANA

  	
   

  	
  27/02/04

  	
   

  	
  30/03/04

  	
   

  	
  1.928

  	
   

  	
  6,374,820.32

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  6,374,820.32

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  IND. YARNS DAUGAVPILS

  	
   

  	
  13/02/04

  	
   

  	
  12/03/04

  	
   

  	
  3.185

  	
   

  	
  3,436,274.74

  	
   

  	
  LVL

  	
   

  	
  0.66480

  	
   

  	
  5,168,884.99

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  INDUSTRIAL YARNS AG

  	
   

  	
  26/02/04

  	
   

  	
  03/03/04

  	
   

  	
  0.105

  	
   

  	
  15,000,000.00

  	
   

  	
  CHF

  	
   

  	
  1.57800

  	
   

  	
  9,505,703.42

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  INDUSTRIAL YARNS AG

  	
   

  	
  27/02/04

  	
   

  	
  11/03/04

  	
   

  	
  0.09

  	
   

  	
  2,000,000.00

  	
   

  	
  CHF

  	
   

  	
  1.57800

  	
   

  	
  1,267,427.12

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  INDUSTRIAL YARNS AG

  	
   

  	
  20/02/04

  	
   

  	
  22/03/04

  	
   

  	
  0.125

  	
   

  	
  359,908.49

  	
   

  	
  CHF

  	
   

  	
  1.57800

  	
   

  	
  228,078.89

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  INDUSTRIAL YARNS AG

  	
   

  	
  27/02/04

  	
   

  	
  22/03/04

  	
   

  	
  0.11333

  	
   

  	
  1,331,960.00

  	
   

  	
  CHF

  	
   

  	
  1.57800

  	
   

  	
  844,081.12

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  INTL HOLDINGS BV

  	
   

  	
  15/01/04

  	
   

  	
  15/03/04

  	
   

  	
  1.966

  	
   

  	
  20,865,014.43

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  20,865,014.43

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  INTL HOLDINGS BV

  	
   

  	
  14/01/04

  	
   

  	
  15/03/04

  	
   

  	
  1.964

  	
   

  	
  1,950,000.00

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  1,950,000.00

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  LIMITED

  	
   

  	
  20/02/04

  	
   

  	
  22/03/04

  	
   

  	
  9.35563

  	
   

  	
  10,601,510.13

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  15,823,149.45

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  LIMITED

  	
   

  	
  23/02/04

  	
   

  	
  22/03/04

  	
   

  	
  9.35563

  	
   

  	
  1,822,432.63

  	
   

  	
  GBP

  	
   

  	
  0.67000

  	
   

  	
  2,720,048.70

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  PARTICITIONS

  	
   

  	
  27/02/04

  	
   

  	
  29/03/04

  	
   

  	
  1.23

  	
   

  	
  13,280,067.69

  	
   

  	
  CHF

  	
   

  	
  1.57800

  	
   

  	
  8,415,758.99

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  PERFORMANCE FIBRES GMBH

  	
   

  	
  27/02/04

  	
   

  	
  31/03/04

  	
   

  	
  0.965

  	
   

  	
  267,259.21

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  215,219.21

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  PERFORMANCE FIBRES GMBH

  	
   

  	
  27/02/04

  	
   

  	
  31/03/04

  	
   

  	
  2.22

  	
   

  	
  468,218.82

  	
   

  	
  CAD

  	
   

  	
  1.67580

  	
   

  	
  279,400.18

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  POLIAMIDA & ESPECIALIDADOS LTD

  	
   

  	
  19/12/03

  	
   

  	
  06/07/04

  	
   

  	
  4.24

  	
   

  	
  50,000,000.00

  	
   

  	
  USD

  	
   

  	
  1.24180

  	
   

  	
  40,264,132.71

  	
   

  
	
  Subsidiary Lender

  	
   

  	
  Fully
  Consolidated

  	
   

  	
  RHODIA
  SILICONAS ESPANA SA

  	
   

  	
  27/02/04

  	
   

  	
  30/03/04

  	
   

  	
  1.928

  	
   

  	
  7,318,415.06

  	
   

  	
  EUR

  	
   

  	
  1.00000

  	
   

  	
  7,318,415.06

  	
   

  

 

120

 

PART
2

 

INTERCOMPANY LOANS/BORROWINGS BETWEEN
THE RHODIA SUBSIDIARIES

 

	
  Lending entity

  	
   

  	
  Borrowing entity

  	
   

  	
  Amount (KEUR)

  	
   

  
	
  Rhodia
  Holdings Ltd

  	
   

  	
  Rhodia Consumer
  Specialties Ltd

  	
   

  	
  187,687

  	
   

  
	
  Rhodia
  Finances

  	
   

  	
  Rhodia Inc.

  	
   

  	
  169,109

  	
   

  
	
  Rhodia
  Inc.

  	
   

  	
  Rhodia Holding Inc.

  	
   

  	
  152,591

  	
   

  
	
  Rhodia
  Ltd

  	
   

  	
  Rhodia Holdings Ltd

  	
   

  	
  139,730

  	
   

  
	
  Rhodia
  Holdings Ltd

  	
   

  	
  Rhodia Overseas Ltd

  	
   

  	
  137,101

  	
   

  
	
  Rhodia
  Consumer Specialties Ltd

  	
   

  	
  Rhodia Ltd

  	
   

  	
  93,490

  	
   

  
	
  Rhodia
  Ltd

  	
   

  	
  Rhodia Pharma Solutions
  Holdings Ltd.

  	
   

  	
  74,627

  	
   

  
	
  Rhodia
  International Holdings Ltd

  	
   

  	
  Rhodia Overseas Ltd

  	
   

  	
  57,761

  	
   

  
	
  Rhodia
  International Holdings Ltd

  	
   

  	
  Rhodia Holdings Ltd

  	
   

  	
  44,312

  	
   

  
	
  Rhodia
  Financial Services Inc.

  	
   

  	
  Rhodia Inc.

  	
   

  	
  37,212

  	
   

  
	
  Rhodia
  Industrial Specialties Ltd

  	
   

  	
  Rhodia Holdings Ltd

  	
   

  	
  27,749

  	
   

  
	
  Rhodia
  Ltd

  	
   

  	
  Rhodia Organique Fine
  Ltd

  	
   

  	
  22,836

  	
   

  
	
  Rhodia
  Inc.

  	
   

  	
  Rhodia Pharma Solutions
  Inc.

  	
   

  	
  20,100

  	
   

  
	
  Rhodia
  Reorganisation Ltd

  	
   

  	
  Rhodia Holdings Ltd

  	
   

  	
  17,060

  	
   

  
	
  Rhodia
  Japan

  	
   

  	
  Anan Kasei Co Ltd

  	
   

  	
  16,752

  	
   

  
	
  Rhodia
  Acetow GmbH

  	
   

  	
  Alexil

  	
   

  	
  13,433

  	
   

  
	
  Rhodia
  Benelux

  	
   

  	
  Rhodia Finance
  International BV

  	
   

  	
  13,059

  	
   

  
	
  Rhodia
  de Mexico SA de CV

  	
   

  	
  Rhodia Especialidades

  	
   

  	
  10,874

  	
   

  
	
  Meyhall
  AG

  	
   

  	
  Rhodia Participations

  	
   

  	
  8,479

  	
   

  
	
  Rhodia
  Financial Services Inc.

  	
   

  	
  RCSL Phosphate UK

  	
   

  	
  5,217

  	
   

  
	
  Rhodia
  Deutschland GmbH

  	
   

  	
  Rhodia Acetow GmbH

  	
   

  	
  5,178

  	
   

  
	
  Rhodia
  Iberia SA

  	
   

  	
  Rhodia HPCII—Espagne

  	
   

  	
  4,950

  	
   

  
	
  Rhodia
  Financial Services Inc.

  	
   

  	
  Rhodia Engineering
  Plastics Corp—USA

  	
   

  	
  4,832

  	
   

  
	
  Rhodia
  Inc.

  	
   

  	
  Rhodia Electronics
  & Catalysis Inc.

  	
   

  	
  3,313

  	
   

  
	
  Rhodia
  China Co Ltd

  	
   

  	
  Beijing RP Eastern
  Chemical Ltd

  	
   

  	
  3,102

  	
   

  
	
  Rhodia
  de Mexico SA de CV

  	
   

  	
  Rhodia Mexicana SA de
  CV

  	
   

  	
  2,948

  	
   

  
	
  Rhodia
  Trading Australia

  	
   

  	
  Rhodia Australia Pty

  	
   

  	
  2,732

  	
   

  
	
  Rhodia
  China Co Ltd

  	
   

  	
  Rhodia Wuxi
  Pharmaceutical Co Ltd

  	
   

  	
  2,598

  	
   

  
	
  Rhodia
  Consumer Specialties Ltd

  	
   

  	
  Rhodia Eco Services Ltd

  	
   

  	
  2,239

  	
   

  
	
  Rhodia
  Brésil

  	
   

  	
  Rhodia Poliamida Brasil

  	
   

  	
  2,176

  	
   

  
	
  Rhodia
  Finance International BV

  	
   

  	
  Rhodia Benelux

  	
   

  	
  1,950

  	
   

  
	
  Rhodia
  Silicones Shangai Co Ltd

  	
   

  	
  Rhodia China Co Ltd

  	
   

  	
  1,940

  	
   

  
	
  Rhodia
  Polyamide Intermediates

  	
   

  	
  Rhodia Recherches

  	
   

  	
  1,848

  	
   

  
	
  Rhodia
  International Holdings Ltd

  	
   

  	
  A&W Thai Holding

  	
   

  	
  1,806

  	
   

  
	
  Conuben
  SL

  	
   

  	
  Rhodia Iberia SA

  	
   

  	
  1,800

  	
   

  
	
  Rhodia
  Silicones Australia Pty Ltd

  	
   

  	
  Rhodia Australia Pty

  	
   

  	
  1,660

  	
   

  
	
  Rhodia
  Organique

  	
   

  	
  Rhodia Recherches

  	
   

  	
  1,569

  	
   

  
	
  Rhodia
  Servicios SA de CV

  	
   

  	
  Rhodia de Mexico SA de
  CV

  	
   

  	
  1,528

  	
   

  

 

121

 

	
  Lending entity

  	
   

  	
  Borrowing entity

  	
   

  	
  Amount (KEUR)

  	
   

  
	
  Rhodia
  Fosfatados SA de CV

  	
   

  	
  Rhodia Servicios SA de
  CV

  	
   

  	
  1,449

  	
   

  
	
  Rhodia
  Especialidades

  	
   

  	
  Rhodia Fosfatados SA de
  CV

  	
   

  	
  1,309

  	
   

  
	
  Rhodia
  Mexicana SA de CV

  	
   

  	
  Rhodia Servicios SA de
  CV

  	
   

  	
  1,262

  	
   

  
	
  Rhodia
  Hengchang Spec Chem

  	
   

  	
  Rhodia China Co Ltd

  	
   

  	
  1,211

  	
   

  
	
  Rhodia
  China Co Ltd

  	
   

  	
  Baotou Rhodia Rare
  Earths Co., Ltd

  	
   

  	
  1,129

  	
   

  
	
  Rhodia
  Silicones

  	
   

  	
  Rhodia Recherches

  	
   

  	
  1,119

  	
   

  
	
  Rhodia
  Siliconas España

  	
   

  	
  Rhodia Iberia SA

  	
   

  	
  1,000

  	
   

  
	
  Rhodia
  Food SAS

  	
   

  	
  Rhodia Recherches

  	
   

  	
  883

  	
   

  
	
  Rhodia
  Silicones

  	
   

  	
  GIE Osiris

  	
   

  	
  797

  	
   

  
	
  Rhodia
  Japan

  	
   

  	
  Rhodia Nicca

  	
   

  	
  707

  	
   

  
	
  Rhodia
  Poliamida Ltda

  	
   

  	
  Rhodia Brésil

  	
   

  	
  706

  	
   

  
	
  A&W
  Chemicals Australia

  	
   

  	
  Rhodia Australia Pty

  	
   

  	
  619

  	
   

  
	
  Rhodia
  Iberia SA

  	
   

  	
  Rhodia Iberlatex

  	
   

  	
  600

  	
   

  
	
  Rhodia
  China Co Ltd

  	
   

  	
  Rhodia Silica Qingdao

  	
   

  	
  586

  	
   

  
	
  Rhodia
  Acetow Venezuela SA

  	
   

  	
  Rhodia Silices de
  Venezuela C.A.

  	
   

  	
  583

  	
   

  
	
  Rhodia
  Brésil

  	
   

  	
  Alexil

  	
   

  	
  461

  	
   

  
	
  Rhodia
  Especialidades

  	
   

  	
  Rhodia Mexicana SA de
  CV

  	
   

  	
  429

  	
   

  
	
  Rhodia
  PPMC SAS

  	
   

  	
  Rhodia Recherches

  	
   

  	
  406

  	
   

  
	
  Rhodia
  Reorganisation Ltd

  	
   

  	
  Rhodia Consumer
  Specialties Ltd

  	
   

  	
  382

  	
   

  
	
  Rhodia
  International Holdings Ltd

  	
   

  	
  Rhodia Consumer
  Specialties Ltd

  	
   

  	
  318

  	
   

  
	
  Rhodia
  China Co Ltd

  	
   

  	
  Rhodia Shangai
  International Trading

  	
   

  	
  312

  	
   

  
	
  Rhodia
  Electronics & Catalysis

  	
   

  	
  Rhodia Recherches

  	
   

  	
  197

  	
   

  
	
  Rhodia
  China Co Ltd

  	
   

  	
  Ruohai Fine Chemicals
  Co Ltd

  	
   

  	
  195

  	
   

  
	
  Rhodia
  Fosfatados SA de CV

  	
   

  	
  Rhodia Mexicana SA de
  CV

  	
   

  	
  191

  	
   

  
	
  Rhodia
  Organique

  	
   

  	
  Rhodia Food SAS

  	
   

  	
  186

  	
   

  
	
  A&W
  Asia Pacific Holding

  	
   

  	
  Rhodia Asia Pacific Pte
  Ltd

  	
   

  	
  162

  	
   

  
	
  Rhodia
  HPCII

  	
   

  	
  Rhodia Recherches

  	
   

  	
  156

  	
   

  
	
  Rhodia
  Intermédiaires

  	
   

  	
  Rhodia Silicones

  	
   

  	
  150

  	
   

  
	
  Rhodia
  China Co Ltd

  	
   

  	
  Rhodia Specialty
  Chemicals Wuxi

  	
   

  	
  146

  	
   

  
	
  Rhodia
  Eco Services

  	
   

  	
  Rhodia Recherches

  	
   

  	
  145

  	
   

  
	
  Rhodia
  Fosfatados SA de CV

  	
   

  	
  Rhodia de Mexico SA de
  CV

  	
   

  	
  100

  	
   

  
	
  Rhodia
  Especialidades

  	
   

  	
  Rhodia Servicios SA de
  CV

  	
   

  	
  92

  	
   

  
	
  Rhodia
  Inc.

  	
   

  	
  Rhodia Engineering
  Plastics Corp—USA

  	
   

  	
  60

  	
   

  
	
  Rhodia
  Fosfatados SA de CV

  	
   

  	
  Rhodia TGI SA de CV

  	
   

  	
  47

  	
   

  
	
  Rhodia
  Poliamida Ltda

  	
   

  	
  Rhodia Poliamida Brasil

  	
   

  	
  44

  	
   

  
	
  Rhodia
  Brésil

  	
   

  	
  Rhodia Poliamida Ltda

  	
   

  	
  34

  	
   

  
	
  Rhodia
  P.I. Chalampé

  	
   

  	
  Rhodia Recherches

  	
   

  	
  25

  	
   

  
	
  Rhodia
  Performances Fibres SAS

  	
   

  	
  Rhodia Recherches

  	
   

  	
  24

  	
   

  
	
  Rhodia
  P.I. Belle Etoile

  	
   

  	
  Rhodia Recherches

  	
   

  	
  8

  	
   

  
	
  Rhodia
  Mexicana SA de CV

  	
   

  	
  Rhodia TGI SA de CV

  	
   

  	
  3

  	
   

  

 

122

 

Any text that has been deleted pursuant to Rhodia’s
confidential treatment request is marked [“***”] herein and has been separately
submitted with the U.S. Securities and Exchange Commission.

 

SCHEDULE 14

BUSINESS PLAN INCLUDING LIQUIDITY ANALYSIS

PART 1

RHODIA BUSINESS PLAN AFTER DISPOSALS

 

[***]

 

[3 PAGES DELETED,
INCLUDING THIS PAGE, AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED SCHEDULE.]

 

123

 

Any text that has been deleted pursuant to Rhodia’s
confidential treatment request is marked [“***”] herein and has been separately
submitted with the U.S. Securities and Exchange Commission.

 

PART 2

LIQUIDITY ANALYSIS

 

[***]

 

[2 PAGES DELETED,
INCLUDING THIS PAGE, AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED SCHEDULE.]

 

124

 

SCHEDULE 15

 

SUPPLEMENTAL SECURED ASSETS

 

	
  Type of security

  	
   

  	
  Grantor of Security

  	
   

  	
  Company whose shares are pledged

  	
   

  	
  Beneficiary

  	
   

  	
  Governing Law

  
	
  Share Pledges(8)

  	
   

  	
  1.

  	
  Rhodia Germany
  International GmbH / Rhodia Deutschland GmbH

  	
   

  	
  85% of Rhodia Acetow
  GmbH(9)

  	
   

  	
  Rhodia SA

  	
   

  	
  German

  
	
   

  	
   

  	
  2.

  	
  Rhodia SA

  	
   

  	
  99.99% of Rhodia Brazil
  Ltda (RBL)

  	
   

  	
  Banks

  	
   

  	
  Brazil

  
	
   

  	
   

  	
  3.

  	
  Rhodia Participations
  SNC

  	
   

  	
  99.92% of Rhodia PPMC
  SAS

  	
   

  	
  Rhodia SA

  	
   

  	
  French

  
	
   

  	
   

  	
  4.

  	
  Rhodia Participations
  SNC

  	
   

  	
  95.96% of Rhodia
  Electronics & Catalysis SAS

  	
   

  	
  Rhodia SA

  	
   

  	
  French

  
	
   

  	
   

  	
  5.

  	
  Rhodia Participations
  SNC

  	
   

  	
  74.3% of Rhodia
  Nederland

  	
   

  	
  Rhodia SA

  	
   

  	
  Dutch

  
	
   

  	
   

  	
  6.

  	
  Rhodia Participations
  SNC

  	
   

  	
  60% of Rhodia Henchang
  Zhanjiagang

  	
   

  	
  Rhodia SA

  	
   

  	
  Chinese

  
	
   

  	
   

  	
  7.

  	
  Rhodianyl SNC

  	
   

  	
  83.7% of Rhodia PI
  Chalampe SAS

  	
   

  	
  Rhodia SA

  	
   

  	
  French

  
	
   

  	
   

  	
  8.

  	
  Rhodia PI Belle Etoile
  SAS

  	
   

  	
  16.3% of Rhodia PI
  Chalampe SAS

  	
   

  	
  Rhodia SA

  	
   

  	
  French

  
	
   

  	
   

  	
  9.

  	
  Rhodianyl SNC

  	
   

  	
  49.6% of Rhodia
  Poliamida Especialidades Ltda

  	
   

  	
  Rhodia SA

  	
   

  	
  Brazil

  
	
   

  	
   

  	
  10.

  	
  Rhodia Brazil Ltda

  	
   

  	
  42.4% of Rhodia
  Poliamida Especialidades Ltda

  	
   

  	
  Rhodia SA

  	
   

  	
  Brazil

  
	
   

  	
   

  	
  11.

  	
  Rhodia Acetol SAS

  	
   

  	
  7.2% of Rhodia
  Poliamida Especialidades Ltda

  	
   

  	
  Rhodia SA

  	
   

  	
  Brazil

  
	
   

  	
   

  	
  12.

  	
  Rhodia SA

  	
   

  	
  100% of Rhodia
  Deutschland GmbH

  	
   

  	
  Banks

  	
   

  	
  German

  
	
   

  	
   

  	
  13.

  	
  Rhodia SA

  	
   

  	
  89% of Rhodia Holding
  Inc.

  	
   

  	
  Banks

  	
   

  	
  US

  
	
   

  	
   

  	
  14.

  	
  Rhodia Iberia

  	
   

  	
  11% of Rhodia Holding
  Inc.

  	
   

  	
  Rhodia SA

  	
   

  	
  US

  
	
   

  	
   

  	
  15.

  	
  Rhodia SA

  	
   

  	
  100% of Rhodia Iberia

  	
   

  	
  Banks

  	
   

  	
  Spanish

  
	
   

  	
   

  	
  16.

  	
  Rhodia SA

  	
   

  	
  100% of Rhodia China

  	
   

  	
  Banks

  	
   

  	
  Chinese

  
	
   

  	
   

  	
  17.

  	
  Rhodia SA

  	
   

  	
  100% of Rhodia Mexico

  	
   

  	
  Banks

  	
   

  	
  Mexican

  
	
   

  	
   

  	
  18.

  	
  Rhodia SA

  	
   

  	
  100% of Rhodia Chimie
  SAS

  	
   

  	
  Banks

  	
   

  	
  French

  
	
   

  	
   

  	
  19.

  	
  Rhodia SA

  	
   

  	
  100% of Rhodia Acetol
  SAS

  	
   

  	
  Banks

  	
   

  	
  French

  
	
   

  	
   

  	
  20.

  	
  Rhodia SA

  	
   

  	
  99% of Rhodia Chemie NV
  (remaining share owned by Rhodia Eco Services)

  	
   

  	
  Banks

  	
   

  	
  Belgian

  
	
   

  	
   

  	
  21.

  	
  Rhodia SA

  	
   

  	
  57.6% of Rhodia
  Industrial Yarns AG (remaining shares owned by Société de Participations et
  de Gestion SA)

  	
   

  	
  Banks

  	
   

  	
  Swiss

  
	
   

  	
   

  	
  22.

  	
  Rhodia SA

  	
   

  	
  100% of Rhodia
  Silicones Australia

  	
   

  	
  Banks

  	
   

  	
  Australian

  
	
   

  	
   

  	
  23.

  	
  Rhodia SA

  	
   

  	
  100% of Rhodia Trading
  Australia

  	
   

  	
  Banks

  	
   

  	
  Australian

  
	
   

  	
   

  	
  24.

  	
  Rhodia SA

  	
   

  	
  52.25% of Rhodia
  Polyamides Co Ltd (remaining shares owned by Banks Rhodianyl SNC)

  	
   

  	
  Korean

  	
   

  	
   

  
	
   

  	
   

  	
  25.

  	
  Rhodia SA

  	
   

  	
  100% of Rhodia Silica
  Korea

  	
   

  	
  Banks

  	
   

  	
  Korean

  
	
   

  	
   

  	
  26.

  	
  Rhodia Participations
  SNC

  	
   

  	
  100% of Rhodia Energy
  SAS

  	
   

  	
  Rhodia S.A.

  	
   

  	
  French

  
	
   

  	
   

  	
  27.

  	
  Rhodia Participations
  SNC

  	
   

  	
  100% of Rhodia Services
  SAS

  	
   

  	
  Rhodia S.A.

  	
   

  	
  French

  
	
   

  	
   

  	
  28.

  	
  Rhodianyl SNC

  	
   

  	
  50% of Butachimie SNC

  	
   

  	
  Rhodia S.A.

  	
   

  	
  French

  

 

(8)                                  Pursuant
to a declaration of Rhodia SA, the considered security package covers more than
95% of the EBITDA and Total Net Assets of the Group

(9)                                  Pledge
over shares of Rhodia Acetow is to be granted by either RGI or Rhodia
Deutschland GmbH after 15/04/04 depending on the merger between RGI and RDG

 

125

 

SUPPLEMENTAL
SECURED ASSETS

 

	
  PART I—Intercompany loans subject to security
  document(10)

  
	
   

  	
   

  	
   

  
	
  Lender under the Intercompany loans

  	
   

  	
  Borrower under the Intercompany loans

  
	
  Rhodia SA

  	
   

  	
  Rhodia Silicones SAS
  (€135,000,000)

  
	
   

  	
   

  	
  Rhodia Silices SAS
  (€48,000,000)

  
	
   

  	
   

  	
  Rhodia Food SAS
  (€60,000,000)

  
	
   

  	
   

  	
  Rhodia HPCII SAS
  (€63,000,000)

  
	
   

  	
   

  	
  Rhodia Organique SAS
  (€185,000,000)

  
	
   

  	
   

  	
  Rhodia Fosfatados de
  Mexico (US$83,000,000)

  
	
   

  	
   

  	
  Rhodia Pharma Solutions
  Holding Ltd (GBP60,000,000)

  
	
   

  	
   

  	
  Rhodia Canada Inc
  (CA$30,000,000)

  
	
   

  	
   

  	
  Rhodia Mexicana SA de
  CV (US$71,000,000)

  
	
   

  	
   

  	
  Rhodia Engineering
  Plastics NV (€15,500,000)

  
	
   

  	
   

  	
  Rhodia de Mexico
  (US$20,000,000)

  
	
   

  	
   

  	
  Rhodia Japan
  (Yen3,900,000,000)

  
	
   

  	
   

  	
  Rhodia Finance
  International (€78,000,000)

  
	
   

  	
   

  	
  Rhodia Intermédiares
  (€75,000,000)

  
	
   

  	
   

  	
  Rhodia Polyamide
  Intermediates (€38,000,000)

  
	
   

  	
   

  	
  Rhodia Performance
  Fibres (€120,000,000)

  
	
   

  	
   

  	
  Rhodia Engineering
  Plastics SRL (€11,500,000)

  
					

 

(10)                            At all
times, at least 80% of all intercompany loans made by Rhodia SA (excluding the
intercompany loans made in Part II of this table) to be subject to security,
being at the date of the security package as set out under Part I of this
table.

 

126

 

	
  PART
  II—Secured Intercompany loans

  
	
   

  	
   

  	
   

  
	
  Lender under the Intercompany loans

  	
   

  	
  Borrower under the Intercompany loans

  
	
  Rhodia SA

  	
   

  	
  Rhodia Acetol SAS
  (€20,000,000)

  
	
   

  	
   

  	
  Rhodia Iberia
  (€58,000,000)

  
	
   

  	
   

  	
  Rhodia PI Belle Etoile
  SAS (€23,987,000)

  
	
   

  	
   

  	
  Rhodia Participations
  SNC (€654,000,000)

  
	
   

  	
   

  	
  Rhodia Germany
  International GmbH (€400,000,000)

  
	
   

  	
   

  	
  Rhodia Brazil Ltda
  (€43,000,000)

  
	
   

  	
   

  	
  Rhodianyl SNC (€360,000,000)

  
	
   

  	
   

  	
  Rhodia Holdings Ltd
  (GBP273,000,000)

  

 

127

 

SCHEDULE 16

 

AGREED LEASE AMENDMENT PRINCIPLES

 

PART
1

 

ORIGINAL AGREED LEASE AMENDMENT
PRINCIPLES

 

Leases will be
renegotiated and amended on a bilateral basis within the framework of the
arrangements under the Secured Co-ordination Agreement in accordance with the
Term Sheets to be provided to the Intercreditor Agent on or prior to the
Commencement Date to include:

 

1.                                      Reduction:

 

(a)                                  5%
at the time the consent and waiver letter is supplied to the Intercreditor
Agent on or prior to the Commencement Date;

 

(b)                                 5%
on the Term Date;

 

(c)                                  Lease
Term unchanged or shortened to be co-terminus with the Refinancing Facilities
Agreement.

 

2.                                      Security:

 

(a)                                  Guarantee
of Rhodia S.A. on 100% of total lease obligation (same as the one existing
today);

 

(b)                                 to
share in security offered to Finance Parties under the Shared Security
Documents in respect of 80% of obligations of Rhodia S.A. under its guarantee,
subject to and in accordance with the Agreed Security Sharing Principles.

 

3.                                      Fees:

 

70bp payable at the
signing of the lease amendment or consent and waiver letter referred to above.

 

4.                                      Margin:

 

305bp on the debt
component of the lease up to March 2006.

 

5.                                      Covenants:

 

To be amended or
supplemented in line with agreed covenants under this Agreement and thereafter
the Refinancing Facilities Agreement.

 

128

 

PART
2

 

SUPPLEMENTAL LEASE AMENDMENT
PRINCIPLES

 

	
  Section

  	
   

  	
  Terms

  
	
   

  	
   

  	
   

  
	
  Disposals
  in accordance with ADP from Rhodia Inc. assets

  	
   

  	
  Seek Lessors’ consent
  for certain disposals with respect to the assets of Rhodia Inc., as set forth
  below:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rhodia Inc. may only
  make disposals of its assets on the following conditions. Rhodia Inc. may
  only dispose of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a) all, or
  substantially all of, Rhodia Eco Services assets with the prior written
  consent of the Lessors; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b) all other assets
  (including Rhodia Eco Services, with Lessors’ consent) within the ADP and
  which would generate aggregate net disposal proceeds from all Rhodia Inc.
  asset dispositions since December 23, 2003:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1) up to but not
  exceeding USD500M without Lessors’ consent; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2) over USD500M,
  subject to (x) the prior
  written consent of the Lessors and (y)
  Rhodia Inc. paying to the Lessors (by way of supplemental rent) 50% of the
  net disposal proceeds received in excess of USD500M.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Net disposal proceeds”
  will have the same meaning as set forth in the March 8, 2004 draft of
  Section 9.3(e) of the RFA. For purposes of clarity, net disposal
  proceeds are calculated after taking into account any EBO payments made with
  respect to the disposition in question.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lease amendment
  documentation would include a covenant mirroring Clause 21.6(b)(iv) of the
  RFA.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the extent that any
  payment under (b) arises prior to the date on which the USPP noteholders have
  been repaid in full (the “USPP Date”), the payment will be deferred to the
  first Business Day falling after the USPP Date (the “Payment Date”). In this
  event, Rhodia Inc. will transfer such amounts received promptly to an account
  in Rhodia Inc.’s name at one or more depositary institutions chosen by each
  agent under each lease transaction and Rhodia Inc. will give a covenant to
  the Lessors not to withdraw any amounts in that account other than to pay the
  Lessors on the Payment Date (the deposit of funds prior to the USPP Date is
  hereafter referred to as the “Deposit Mechanism”). The Lessors will waive
  their rights to set-off in respect of amounts standing to the credit of the
  accounts through the USPP Date.

  
	
   

  	
   

  	
   

  
	
  Mandatory
  Prepayments—ADP

  	
   

  	
  Mandatory prepayments
  to Lessors from ADP net disposal proceeds above (a) €700M prior to Term Date;
  or (b) €850M after Term Date (in either case, “Excess ADP Proceeds”).(11)

  

 

(11)                            Net
disposal proceeds aggregated for period commencing on and after 12.23.03.

 

129

 

	
  Section

  	
   

  	
  Terms

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mandatory prepayments
  to the Lessors from the seller’s share of Excess ADP Proceeds in proportion
  to prepayments based on parity in % of reduction to that of the MTF (e.g., to
  extent the total available commitments under the Medium Term Facility are
  reduced by X%, the lease balances of the Lessors will be reduced by X%).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The parties agree that
  the examples set forth on Exhibit A attached hereto reflect their
  understanding of the rules governing mandatory prepayments.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Lessors share in
  Excess ADP Proceeds based upon the proportional allocation formula set forth
  in the preceding paragraph notwithstanding that ADP net disposal proceeds
  generated by Rhodia Inc. have not reached the USD500M level.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In addition, if ADP net
  disposal proceeds from a sale by a member of the Group results in either (a)
  the €700M prior to the Term Date or (b)€850M, after the Term Date, thresholds
  being breached, the proportional reduction with respect to the Lessors will
  be calculated by taking into account any mandatory prepayments received under
  the heading “Disposals in accordance with ADP from Rhodia Inc. assets” as
  well as any entitlement under this headnote.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  After the respective
  thresholds are breached, Lessors continue to receive mandatory prepayments
  from subsequent ADP sales based upon the proportional allocation formula
  without offsets for prior distributions that previously breached the Inc.
  USD500M threshold.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If the Lessors
  percentage reduction solely from the Rhodia Inc. threshold breach is equal to
  or greater than the percentage reduction realized by the MTF Lenders from the
  sale in question, then the Lessors are not entitled to any additional
  mandatory prepayment under this headnote and shall retain all amounts
  received resulting from any mandatory prepayment for the breach of the Rhodia
  Inc. USD500M threshold.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the extent the
  Lessors’ percentage reduction is a smaller percentage reduction for the
  Lessors than the percentage reduction realized by the MTF Lenders from the Excess
  ADP proceeds in question, the Lessors will be entitled to receive an
  additional prepayment under this headnote in respect of the ADP net disposal
  proceeds, such that after taking into account the prepayment under this
  headnote and the other headnote, the Lessors have received the same
  percentage reduction from the ADP net disposal proceeds in question as the
  MTF Lenders.

  

 

130

 

	
  Section

  	
   

  	
  Terms

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Prepayments which arise
  under this section will not give rise to the release of collateral under
  the leases. In addition, the Lessors will retain independent waiver rights in
  respect of mandatory prepayments from ADP net disposals proceeds.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To the extent that any
  mandatory prepayment arises prior to the USPP Date, the payment will be
  deferred to the Payment Date pursuant to the Deposit Mechanism. The Lessors
  will waive their rights to set-off in respect of amounts standing to the
  credit of the accounts through the USPP Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No member of Group will
  create or permit to exist or become effective the right of any unaffiliated
  third party or financial institution to consent to or approve of any sale or
  other disposition of assets by Rhodia Inc. pursuant to the Asset Disposal
  Program, except for the consent rights to be granted to the Lessors pursuant
  to this Supplement. Further, neither Rhodia S.A. nor any member of the Group
  shall grant to any person a mandatory prepayment right arising out of the
  sale or other disposition by Rhodia Inc. of any of its assets sold pursuant
  to the Asset Disposal Program, except for such rights granted pursuant to
  this Supplement, such other agreements as in effect on March 3, 2004 and
  the draft of the RFA dated March 8, 2004 (it being understood that
  Rhodia S.A. will not, directly or indirectly, in the execution version of the
  RFA permit the RFA Lenders to share in ADP proceeds at the Rhodia Inc. level,
  however it is further understood that Rhodia Inc. is obliged to make
  prepayments/cancellations of loans/commitments made available to it in
  relation to such proceeds in accordance with Section 9.3(b) of the RFA).

  
	
   

  	
   

  	
   

  
	
  Mandatory
  Prepayments—Debt Capital Markets Issue

  	
   

  	
  Mandatory prepayments
  to Lessors from proceeds of debt capital markets issues after the USPP Date
  as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  There will be
  proportional reduction based on parity in % of reduction to that of the MTF
  (i.e. to extent the total available commitments under the Medium Term
  Facility are reduced by 7%, the Lessors will be reduced by 7%). For avoidance
  of doubt, equity linked debt issues will be treated as debt.(12)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Lessors will, to
  the extent the Medium Term Facility Lenders waive their right to receive net
  issuance proceeds from the sale of debt instruments in the capital markets,
  be deemed in the same proportion to have waived their entitlement to their
  share of net issuance proceeds.

  

 

(12)                            Convertible
and exchangeable bonds.

 

131

 

	
  Section

  	
   

  	
  Terms

  
	
   

  	
   

  	
   

  
	
  Mandatory
  Prepayments—Equity Issue

  	
   

  	
  The Lessors will not be
  entitled to any reduction of the Leases or share in proceeds from any equity
  issue proceeds.

  
	
   

  	
   

  	
   

  
	
  Use of first ADP net
  disposal proceeds generated from sales of assets by Rhodia Inc.

  

  (“Inc Net Disposal Proceeds”)

  	
   

  	
  The Inc Net Disposal
  Proceeds will be applied:

  

  (i) first towards payment of
  the outstanding balance of the USD53M loan due to CSFB and prepayment to the
  Lessors of USD14M due on the Term Date;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii) second to fund the cash
  collateralisation of USD16M of letters of credit issued by Société Générale
  for the account of Rhodia Inc. (which instruments shall remain the primary
  obligations of Rhodia Inc.);

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii) third to the repayment of the
  outstanding balance of intercompany loans owed by Rhodia Inc. to [insert name
  of Rhodia company that is the current lender] with the USD210M intercompany
  term loan (“USD210 Term Loan”) to be repaid in priority to the USD46M loan.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The application of Inc.
  Net Disposal Proceeds to the USD14M lease prepayment will give rise to an
  obligation on the part of Rhodia Inc. to repay the corresponding amount of
  intercompany loans owed by it to any member of the Group. Such repayment of
  this intercompany loan will be made either (a) from proceeds of the sale
  of the phosphate business (without regard to whether there is an Event of
  Default under the Leases as of such date); or (b) if the phosphate
  disposal has not been completed, by way of cancellation of an intercompany
  loan in the corresponding amount on the earlier of (x) 31 December 2004; and
  (y) the date as of which
  the Lessors shall have notified Rhodia Inc. of the occurrence and continuance
  of an Event of Default under the Leases.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rhodia Inc. will
  provide a duly approved board resolution to the Lessors giving effect to the
  foregoing and in particular, such resolution shall provide that, inter alia, no further action is
  required on the part of Rhodia Inc. to give effect to the cancellation(13) of
  the intercompany loan as contemplated above.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rhodia S.A. agrees to
  contribute no less than USD25M to Rhodia Inc. during the first calendar
  quarter of 2004.

  
	
   

  	
   

  	
   

  
	
  Intercompany Loans to
  SA—Upstream Loans

  	
   

  	
  Rhodia Inc. will not be
  entitled to grant any new upstream loans to Rhodia S.A. or any other member
  of the Group(14) until the first Business Day falling after the date on which
  the intercompany loans which are outstanding at the Effective Date have been
  repaid in full (and subject to the provisions set out above (see “Use of
  First ADP Proceeds)).

  

 

(13)                            Rhodia
Finance SA will need to verify whether a board resolution is required.

(14)                            As
each term Group and Subsidiary are defined in the RFA.

 

132

 

	
  Section

  	
   

  	
  Terms

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rhodia Inc. will be
  entitled to lend up to an aggregate of USD30M on a demand basis to Rhodia
  S.A. and any member of the Group pursuant to the cash pooling arrangements
  and such intercompany loans will not be subject to the Subordination
  Agreement or the subordination provisions of the RFA.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  All other upstream
  intercompany loans by Rhodia Inc. to Rhodia S.A. will be subject to the
  Subordination Agreement and the subordination provisions of the RFA.

  
	
   

  	
   

  	
   

  
	
  Minimum Liquidity

  	
   

  	
  Minimum liquidity
  levels are:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2004 Q4=USD40M,
  Q2/Q3=USD20M

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2005 Q1/Q4=USD30M,
  Q2/Q3=USD15M

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2006 Q1/Q4=USD30M,
  Q2/Q3=USD15M

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2007 Q1=USD30M (for
  Cranbury only)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No testing for
  liquidity level for Q1 of 2004. The liquidity calculation shall include cash
  and cash equivalents and available undrawn amounts under the USD50M revolver
  (not otherwise subject to suspension for any reason), subject to a
  representation from Rhodia S.A. that it has sufficient unrestricted cash and
  or cash equivalent amounts at the Rhodia S.A. level and unimpeded
  availability under the RFA to fully fund the USD50 million revolver amongst
  its other obligations. Tested quarterly (as below).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In determining the
  amount of cash and cash equivalents available to Rhodia Inc. no credit will
  be given for cash and cash equivalents held at Rhodia S.A. or other Group
  members (other than Rhodia Inc.).

  
	
   

  	
   

  	
   

  
	
  USD25M cap for capital
  contributions to Primester or other Relevant Entities

  	
   

  	
  Rhodia Inc. accepts the
  USD25M cap on loan and capital contributions to Primester or any other
  Relevant Entity (as defined in the lease), exclusive of the existing USD6.25M
  loan by Rhodia Inc. to Primester. For avoidance of doubt, this USD25M cap
  does not apply if a capital contribution is made from Rhodia S.A. downstream
  to Rhodia Inc. and Rhodia Inc. promptly lends such proceeds to Primester (it
  being understood that Rhodia S.A.’s first quarter capital contribution to
  Rhodia Inc. will not be considered as the initial contribution for purposes
  of completing the back-to-back transaction).

  

 

133

 

	
  Section

  	
   

  	
  Terms

  
	
   

  	
   

  	
   

  
	
  Ratio Levels

  	
   

  	
  Total Net Debt
  (inclusive of receivables securitization of Rhodia Inc. and exclusive of the
  USD 210M Term Loan to EBITDAR (“Total Net Debt to EBITDAR”) maximum ratio
  levels applicable to forward projections and historical ratios as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2004 Q1=4.1 and
  Q2/3/4=3.50

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2005 Q1/2=3.375 and Q3
  =3.25 and Q4=3.00

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2006 Q1/2/3=3.0 and
  Q4=2.5

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2007 Q1=2.25 (for
  Cranbury only)

  
	
   

  	
   

  	
   

  
	
  Financial
  Covenants—Historic

  	
   

  	
  Quarterly tests to show
  Total Net Debt to EBITDAR on 12 months rolling basis with Total Net Debt as
  calculated as of the testing date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ratio testing subject
  to Capstone analysis.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Financial term
  definitions to be agreed at drafting stage, Lessors will consider the RFA
  language and US specific issues will be included.

  
	
   

  	
   

  	
   

  
	
  Financial
  Covenants—Projection

  	
   

  	
  Total Net Debt to
  EBITDAR and liquidity projections to be tested prior to an upstream
  distribution subject to a de minimis
  threshold.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  De
  minimis threshold is (a) a single distribution in
  excess of USD5M and (b) an aggregate distribution in any rolling 3 month
  period of USD10M. In addition, the forward looking covenant test is
  inapplicable with respect to the first €150 of Inc. net disposal proceeds.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mechanics are:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a) Rhodia Inc. to
  deliver projected financials showing pro forma 12 month projections
  post-distributions at least 10 Business Days(15) prior to any proposed
  upstream payment;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b) these financials
  are subject to Capstone analysis and approval of each Lessor;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c) Rhodia Inc. may
  make upstream payment on the date set forth in its notice, but will not be
  entitled to any cure rights if the Lessors notify it prior to the proposed
  distribution date that there is a Potential Event of Default as a result of
  the 12 month projections failing to comply with the Total Net Debt to EBITDAR
  test or liquidity levels;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d) without regard to
  Lessor’s approval of the certificate as per (b) above, if the certificate,
  when delivered, demonstrates that there is a breach, the Lessors may notify
  Rhodia Inc. of the occurrence of a Potential Event of Default;

  

 

(15)                            Capstone
to confirm whether 10 Business Days is sufficient.

 

134

 

	
  Section

  	
   

  	
  Terms

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e) upon receipt of a
  notice of a Potential Event of Default, Rhodia Inc. shall have, subject to no
  distribution having been made, a cure period of 30 days during which it may
  cure (whether through a capital contribution or otherwise) the Total Net Debt
  to EBITDAR and/or liquidity tests by delivering revised projections (for the
  following four quarters) and such other evidence supporting a certificate
  demonstrating to the satisfaction of each Lessor that the Total Net Debt to
  EBITDAR and liquidity levels will be met throughout the succeeding 12 month
  period commencing on the date of the new compliance certificate;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (f) for the avoidance
  of doubt, if Rhodia Inc. does not deliver pro forma projections as required
  under paragraph (a) above, such failure shall constitute an Event of Default
  which shall not be subject to any cure periods or rights;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Financial terms to be
  agreed at drafting stage, Lessors will consider the RFA language and US
  specific issues will be included.

  
	
   

  	
   

  	
   

  
	
  Selection of Equipment
  for both 5% payments

  	
   

  	
  Under the lease
  amendment document relating to the JPMorgan lease, JPMorgan will be entitled
  to choose the assets to which the each of the 5% prepayment proceeds (as per
  the SCA and the waiver and consent letter between Rhodia Inc. and JPMorgan
  Leasing Inc. dated 23 December 2003) are applied. For the avoidance of
  doubt, this includes a retrospective selection for the December 2003 5%
  payment.

  
	
   

  	
   

  	
   

  
	
  Purchase Option at end
  of lease

  	
   

  	
  Rhodia Inc. will agree
  in the lease amendments to exercise the purchase option at end of lease
  period. Rhodia Inc. agrees that the lease amendment documents may be amended,
  if appropriate, to delete the return and/or remarketing provisions in the
  current lease documents.

  
	
   

  	
   

  	
   

  
	
  Additional
  Covenants—RFA covenant package

  	
   

  	
  The Lease Transactions
  will have two sets of covenant packages: one for the period ending on the
  Term Date (the “Standstill Period”) and another set commencing as of the
  later of the signing date of the RFA or the lease amendments and ending on
  the date all such lease obligations are paid in full (the “Covenant Period”).
  Both sets of covenants will be separately stated in the lease documents. For
  the Standstill Period, the covenants will be substantially similar to, and
  not inconsistent with, those in the SCA.

  
	
   

  	
   

  	
   

  
	
  Management Fees

  	
   

  	
  The annual management
  fee payable by Rhodia Inc. to the Company shall be calculated in accordance
  with the past business practices except as otherwise required by changes in
  methodology resulting from changes in applicable law and regulations after
  the date of the lease amendments.

  

 

135

 

	
  Section

  	
   

  	
  Terms

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rhodia Inc. will notify
  Lessors if there is a change in the methodology of calculation of the
  management fees prior to making such a management fee. The Lessors do not
  have a right of default in respect of any change in the methodology due to a
  change in applicable law or regulations.

  
	
   

  	
   

  	
   

  
	
  Modification USD50M
  Revolver

  	
   

  	
  It is understood that
  Rhodia Inc. cannot draw under this revolver or repay any amounts until after
  the USPP Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The current revolver is
  a downstream loan from Rhodia S.A. to Rhodia Inc. only and will not be
  amended to provide any upstream loans from Rhodia Inc. to Rhodia S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  See “Cash Pooling”
  hereunder with respect to upstream funding.

  
	
   

  	
   

  	
   

  
	
  Cash Pooling

  	
   

  	
  Cash pooling
  arrangements shall be put in place with respect to certain new upstream loans
  from Rhodia Inc. to Rhodia S.A. only. Such cash pooling arrangement shall be
  structured and documented so as to fall within the classification of “cash
  pooling arrangement” and will be excluded from the subordination provisions
  of the RFA and Subordination Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The maximum amount
  permitted to be outstanding pursuant to the proposed cash pooling arrangement
  will be equal to USD30M, to be documented in the form of a short-term on
  demand revolving loan (with a maturity of less than 15 days).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For avoidance of doubt,
  the Note receivables evidencing any such upstream loans by Rhodia Inc. to
  other members of the Group pursuant to such cash pooling arrangements will
  not constitute cash or cash equivalents for purposes of complying with the
  minimum liquidity covenant.

  
	
   

  	
   

  	
   

  
	
  Negative
  Pledge/Financial Indebtedness

  	
   

  	
  Rhodia Inc. may not
  incur any new Financial Indebtedness(16) or create or permit to exist any
  consensual liens or security interests on its assets except that it will be
  permitted to pledge cash to unaffiliated third party trade creditors
  (suppliers of utilities, goods, raw materials and production and packaging
  materials) up to an aggregate of USD15M with a sublimit of USD5M for
  unsecured loans made by unaffiliated third parties to Rhodia Inc.

  

 

(16)                            It is
assumed that new Financial Indebtedness excludes indebtedness under the
Refinancing Facilities Agreement.

 

136

 

	
  Section

  	
   

  	
  Terms

  
	
   

  	
   

  	
   

  
	
  Additional Points

  	
   

  	
  Lessors and members of
  their syndicate will have received a signed opinion from Shearman &
  Sterling, special counsel to Rhodia S.A. to the effect that, among other
  matters, neither execution, delivery and performance of the Lease Amendments
  to which Rhodia S.A. or Rhodia Inc. is a party, nor the consummation of the
  transactions contemplated thereby, nor compliance with the terms and
  provisions thereof, does or will contravene or result in a breach of or
  constitute a default under, among other documents, the RFA, the outstanding
  high yield indentures, the USPP Note Purchase Agreement, as amended, and any
  other material credit facility, lease or any other financing arrangement to
  which it or its subsidiaries are a party.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  At signing of the Lease
  amendments, Rhodia Inc. will represent and confirm to the satisfaction of the
  Lessors that it has not granted any guarantee or indemnity to any party,
  including BNP Paribas, in respect of the BNP Paribas loan to Primester.

  

 

137

 

EXHIBIT
A

 

Rhodia SA/Inc Mandatory Prepayment examples

 

USD/€=1,25

 

Net Disposal Proceeds
means proceeds AFTER the Early Buy Out of any leased assets made necessary by
each disposal in question.

 

The USD500M threshold is
USD500M of Net Disposal Proceeds

 

Example 1  Breach of
both Mandatory Prepayment thresholds

 

Assume a sale at Inc
generating Net Disposal Proceeds of USD200m in excess of the USD500m threshold

 

Assume that the same
disposal also breaches the RFA threshold of € 850m, by say USD100m

 

Assume lessor debt at the
time is USD250m (€200m) (after EBO’s relating to the disposal in question)

 

Assume RFA available
commitment at the time = €638m

 

1)                                      Lessors
receive reduction of USD100m by way of supplemental rents. This represents a
reduction of 40% for the lessors.

 

2)                                      USD100M
available to be upstreamed from Inc to SA, subject to compliance with Inc
covenants

 

3)                                      The
RFA will receive a reduction of €40m (USD100/2/1.25). This represents a
reduction of 6.25%.

 

4)                                      As
the Lessor reduction is a greater %age than the RFA reduction, the lessors
receive no “equalisation” from Rhodia in respect of the mandatory prepayment of
the RFA

 

Example 2  Breach of
both Mandatory Prepayment thresholds

 

Assume a sale of a
division of SA for €400m, of which USD50m of Net Disposal Proceeds is generated
from Inc. and all USD50m of those Net Disposal Proceeds are in excess of the
USD500m threshold

 

Assume that the same
disposal also breaches the RFA threshold of € 850m, by €200m

 

Assume lessor debt at the
time is USD250m (€200m) (after EBO’s relating to the disposal in question)

 

Assume RFA available
commitment at the time = €638m

 

1)                                      Lessors
receive reduction of USD25m by way of supplemental rents. This represents a
reduction of 10% for the lessors.

 

2)                                      USD75M
(less USD14m see point 4) available to be upstreamed from Inc to SA, subject to
compliance with Inc covenants

 

3)                                      The
RFA will receive a reduction of €100m. This represents a reduction of 15.6%.

 

4)                                      As
the Lessor reduction is a smaller %age than the RFA reduction, the lessors
receive “equalisation” from Rhodia’s retained 50% in order to match the 15.6%
reduction enjoyed by the RFA In this case the equalisation amount would be 5.6%
of USD250m = USD14m. This 14m to be paid by supplemental rents.

 

Example 3  Breach of
only the RFA Mandatory Prepayment threshold

 

Assume a sale at SA for
€400m, of which USD100m Net Disposal Proceeds are generated at Inc

 

Assume that the same
disposal ONLY breaches the RFA threshold of € 850m, by €200m

 

138

 

Assume lessor debt at the
time is USD250m (€200m) (after EBO’s relating to the disposal)

 

Assume RFA available
commitment at the time = €638m

 

1)                                      The
RFA will receive a reduction of €100m. This represents a reduction of 15.6%.

 

2)                                      Lessors
receive “equalisation’ reduction of 15.6% of USD250m = USD39m by way of
supplemental rents. This comes from Rhodia’s retained € 200m.

 

Example 4  Breach of
only the Inc Mandatory Prepayment threshold

 

Obviously this leads to
50% of the Net Disposal Proceeds above USD500m being used to reduce the leases
by way of supplemental rents

 

The remaining 50% of the
Net Disposal Proceeds is available for upstreaming to SA subject to Inc
covenant compliance

 

As the RFA threshold is
not breached, no mandatory prepayment at the RFA level

 

Reductions of the leases
from Mandatory Prepayments are effected by supplemental rents

 

139

 

SIGNATORIES

 

	
  Company

  	
   

  
	
   

  	
   

  
	
  RHODIA

  	
   

  
	
   

  
	
  By:

  	
  JEAN-PIERRE CLAMADIEU

  
	
   

  	
   

  
	
   

  	
   

  
	
  Original
  Borrowers

  
	
   

  	
   

  
	
  RHODIA INC.

  
	
   

  	
   

  
	
  By:

  	
  RAYMOND LEE

  
	
   

  	
   

  
	
   

  	
   

  
	
  Arrangers

  
	
   

  	
   

  
	
  BNP PARIBAS

  
	
   

  	
   

  
	
  By:

  	
  BRUNO TASSART

  
	
   

  	
   

  
	
   

  	
   

  
	
  CRÉDIT AGRICOLE
  INDOSUEZ S.A.

  
	
   

  	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  HSBC CCF

  
	
   

  	
   

  
	
  By:

  	
  MARC BOUTIN

  
	
   

  	
   

  
	
   

  	
  DOMINIQUE TAUVERON

  
	
   

  	
   

  
	
   

  	
   

  
	
  Original
  Lenders

  
	
   

  	
   

  
	
  BNP PARIBAS

  
	
   

  	
   

  
	
  By:

  	
  BRUNO TASSART

  
	
   

  	
   

  
	
   

  	
   

  
	
  CRÉDIT AGRICOLE
  INDOSUEZ S.A.

  
	
   

  	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
			

 

140

 

	
  CRÉDIT INDUSTRIEL ET
  COMMERCIAL

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  BANQUE DE L’ECONOMIE DU
  COMMERCE ET DE LA MONETIQUE

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  CREDIT SUISSE FIRST
  BOSTON INTERNATIONAL

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  BAYERISCHE LANDESBANK

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE BANK OF
  TOKYO-MITSUBISHI, LTD.

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  FORTIS BANK (NEDERLAND)
  N.V.

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  NATEXIS BANQUES
  POPULAIRES

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  CCF

  
	
   

  
	
  By:

  	
  MARC BOUTIN

  
	
   

  	
   

  
	
   

  	
  DOMINIQUE TAUVERON

  
	
   

  	
   

  
	
   

  	
   

  
	
  STANDARD CHARTERED BANK

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE ROYAL BANK OF
  SCOTLAND PLC

  
	
   

  
	
  By:

  	
  RICHARD DEVIN

  

 

141

 

	
  BANCO BILBAO VIZCAYA
  ARGENTARIA

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  UNICREDITO ITALIANO

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  UFJ BANK LIMITED

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  CITIBANK INTERNATIONAL
  PLC

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  CITICORP USA, INC.

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  LANDESBANK SAAR

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  COMERICA BANK

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  Facility
  Agent

  
	
   

  
	
  BNP PARIBAS

  
	
   

  	
   

  
	
  By:

  	
  DIDIER LEBLANC

  
	
   

  	
   

  
	
   

  	
   

  
	
  Security
  Agent

  
	
   

  
	
  BNP PARIBAS

  
	
   

  
	
  By:

  	
  DIDIER LEBLANC

  

 

142

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]