Document:

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                                                                  Exhibit 10.2

                                                               CONFORMED COPY

C L I F F O R D                                            CLIFFORD CHANCE LLP
C H A N C E [LOGO]

                                USD 225,000,000

                         SECURED FACILITIES AGREEMENT

                    amended and restated as at 23 May 2007

                                      for

                             FLEXSYS HOLDING B.V.

                                  arranged by

                                 KBC BANK N.V.

                                      AND

                       CITIGROUP GLOBAL MARKETS LIMITED

                                     with

                                 KBC BANK N.V.

                                acting as Agent

                                      and

                                 KBC BANK N.V.

                          acting as Security Trustee

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                  AMENDED AND RESTATED MULTICURRENCY TERM AND
                        REVOLVING FACILITIES AGREEMENT

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                                   CONTENTS

CLAUSE                                                                   PAGE

1.     Definitions And Interpretation.......................................1

2.     The Facilities......................................................23

3.     Purpose.............................................................24

4.     Conditions Of Utilisation...........................................24

5.     Utilisation.........................................................26

6.     Utilisation - Letters Of Credit.....................................27

7.     Letters Of Credit...................................................31

8.     Optional Currencies.................................................35

9.     Repayment...........................................................38

10.    Prepayment And Cancellation.........................................39

11.    Interest............................................................43

12.    Interest Periods....................................................44

13.    Changes To The Calculation Of Interest..............................45

14.    Fees................................................................46

15.    Tax Gross Up And Indemnities........................................47

16.    Increased Costs.....................................................50

17.    Other Indemnities...................................................51

18.    Mitigation By The Lenders...........................................52

19.    Costs And Expenses..................................................53

20.    Guarantee And Indemnity.............................................55

21.    Representations.....................................................62

22.    Information Undertakings............................................71

23.    Financial Covenants.................................................76

24.    General Undertakings................................................79

25.    Events Of Default...................................................98

26.    Changes To The Lenders.............................................105

27.    Changes To The Obligors............................................110

28.    Role Of The Agent And The Arranger.................................113

29.    Role Of Security Trustee...........................................118

30.    Conduct Of Business By The Finance Parties.........................129

31.    Sharing Among The Finance Parties..................................130

32.    Payment Mechanics..................................................132

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33.    Set-Off............................................................135

34.    Application Of Proceeds............................................135

35.    Notices............................................................137

36.    Calculations And Certificates......................................138

37.    Partial Invalidity.................................................139

38.    Remedies And Waivers...............................................139

39.    Amendments And Waivers.............................................139

40.    Counterparts.......................................................140

41.    USA Patriot Act....................................................140

42.    Governing Law......................................................141

43.    Enforcement........................................................141

44.    Waiver Of Jury Trial...............................................142

SCHEDULE 1 THE ORIGINAL PARTIES.......................................deleted
       Part I The Original Obligors...................................deleted
       Part II The Original Lenders...................................deleted

SCHEDULE 2 CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT.............deleted
       Part I Conditions Precedent To Initial Utilisation.............deleted
       Part II Conditions Subsequent To Initial Utilisation...........deleted
       Part III Conditions Precedent Required To Be Delivered By An
         Additional Obligor...........................................deleted

SCHEDULE 3 REQUESTS...................................................deleted
       Part I A Utilisation Request Loans.............................deleted
       Part I B Utilisation Request Letters Of Credit.................deleted
       Part II Selection Notice.......................................deleted

SCHEDULE 4 MANDATORY COST FORMULAE....................................deleted

SCHEDULE 5 FORM OF TRANSFER CERTIFICATE...............................deleted

SCHEDULE 6 FORM OF ACCESSION LETTER...................................deleted

SCHEDULE 7 FORM OF RESIGNATION LETTER.................................deleted

SCHEDULE 8 FORM OF COMPLIANCE CERTIFICATE.............................deleted

SCHEDULE 9 TIMETABLES.................................................deleted
       Part I Loans...................................................deleted
       Part II Letters Of Credit......................................deleted

SCHEDULE 10 FORM OF LETTER OF CREDIT..................................deleted

SCHEDULE 11 CENTRE OF MAIN INTERESTS AND ESTABLISHMENTS...............deleted

SCHEDULE 12 AGREED SECURITY PRINCIPLES................................deleted

SCHEDULE 13 SOURCES AND USES TABLE....................................deleted

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THIS AGREEMENT is amended and restated as at 23 May 2007 and made between:

(1)     FLEXSYS HOLDING B.V. a private company with limited liability
        incorporated under the laws of The Netherlands having its seat in
        Deventer, The Netherlands and its registered office at Zutphenseweg
        51010, 7418 AJ Deventer, The Netherlands and registered with the
        Chamber of Commerce under number 38023104 (the "COMPANY");

(2)     THE SUBSIDIARIES of the Company listed in Part I of Schedule 1 (The
        Original Parties) as original borrowers (together with the Company
        the "ORIGINAL BORROWERS");

(3)     THE ENTITIES listed in Part I of Schedule 1 (The Original Parties) as
        original guarantors (together with the Company the "ORIGINAL
        GUARANTORS");

(4)     KBC BANK N.V. and CITIGROUP GLOBAL MARKETS LIMITED as mandated lead
        arrangers (whether acting individually or together the "ARRANGER");

(5)     THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 (The
        Original Parties) as lenders (the " ORIGINAL LENDERS");

(6)     KBC BANK N.V. as agent of the other Finance Parties (the "AGENT");
        and

(7)     KBC BANK N.V. as security agent and/or as security trustee for the
        Secured Parties (the "SECURITY TRUSTEE").

IT IS AGREED as follows:

                                   SECTION 1
                                INTERPRETATION

1.      DEFINITIONS AND INTERPRETATION

1.1     DEFINITIONS
        In this Agreement:

        "ACCESSION LETTER" means a document substantially in the form set out
        in Schedule 6 (Form of Accession Letter).

        "ACQUISITION COSTS" means all non-periodic fees, costs and expenses,
        stamp, registration and other Taxes incurred by the Company or any
        other member of the Group in connection with the Akzo Nobel Retirement
        and the Crystex Acquisition.

        "ACCOUNT" means any account, subject to Transaction Security, opened
        or maintained by a member of the Group with the Security Trustee or
        any other person (and any replacement account or subdivision or
        subaccount of that account), the debt or debts represented thereby and
        all Related Rights.

        "ADDITIONAL BORROWER" means a member of the Group which becomes an
        Additional Borrower in accordance with Clause 27 (Changes to the
        Obligors).

        "ADDITIONAL COST RATE" has the meaning given to it in Schedule 4
        (Mandatory Cost Formulae).

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        "ADDITIONAL GUARANTOR" means a member of the Group which becomes an
        Additional Guarantor in accordance with Clause 27 (Changes to the
        Obligors).

        "ADDITIONAL OBLIGOR" means an Additional Borrower or an Additional
        Guarantor.

        "AFFILIATE" means, in relation to any person, a Subsidiary of that
        person or a Holding Company of that person or any other Subsidiary of
        that Holding Company.

        "AGENT'S SPOT RATE OF EXCHANGE" means the Agent's spot rate of
        exchange for the purchase of the relevant currency with the Base
        Currency in the London foreign exchange market at or about 11:00 a.m.
        on a particular day.

        "AGREED SECURITY PRINCIPLES" means the security and guarantee
        principles set out in Schedule 12 (Agreed Security Principles).

        "AKZO NOBEL RETIREMENT" means the retirement of the entire
        shareholdings of Akzo Nobel Chemicals International B.V. (and its
        affiliates) in the Group.

        "AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT" means the Limited
        Partnership Agreement dated 1 May 1995 entered into by and among
        Flexsys International Co., Akzo Nobel Chemicals Inc., Akzo Nobel
        Properties Inc. and Monsanto Company, under which Flexsys America L.P.
        is constituted, as amended and restated on 26 April 2007 and as
        further amended or supplemented from time to time.

        "AMENDMENT AND RESTATEMENT AGREEMENT" means the amendment and
        restatement agreement to the Intercreditor Agreement and made amongst
        others, between the Company, KBC Bank N.V. as Security Trustee, KBC
        Bank N.V. as agent, Solutia Inc. and Solutia Europe N.V. as the
        Parent, the Senior Lenders (as defined in the Intercreditor
        Agreement), the Intra-Group Lenders and the Original Obligors (each as
        defined in the Intercreditor Agreement) dated on or about 23 May 2007.

        "AMENDMENT LETTER" means the Amendment Letter to the Fee Letter dated
        25 April 2007 between the Arranger, the Company and others.

        "ANTI-TERRORISM LAW" means each of:

        (a)     Executive Order No. 13224 of September 23, 2001 - Blocking
                Property and Prohibiting Transactions With Persons Who Commit,
                Threaten To Commit, or Support Terrorism (the Executive
                Order);

        (b)     the Uniting and Strengthening America by Providing Appropriate
                Tools Required to Intercept and Obstruct Terrorism Act of
                2001, Public Law 107-56 (commonly known as the USA Patriot
                Act);

        (c)     the Money Laundering Control Act of 1986, Public Law 99-570;

        (d)     the International Emergency Economic Powers Act, 50 U.S.C.
                Sections 1701 et seq, the Trading with the Enemy Act, 50 U.S.C.
                App. Sections 1 et seq, any Executive Order or regulation
                promulgated thereunder and administered by the Office of
                Foreign Assets Control ("OFAC") of the U.S. Department of the
                Treasury; and

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        (e)     any similar law enacted in the United States of America
                subsequent to the date of this Agreement.

        "AUTHORISATION" means an authorisation, consent, approval, resolution,
        licence, exemption, filing, notarisation or registration.

        "AVAILABILITY PERIOD" means:

        (a)     in relation to Facility A the period from and including the
                date of this Agreement to and including the day falling 30
                days after the date of this Agreement; and

        (b)     in relation to Facility B, the period from and including the
                date of this Agreement to and including the day falling one
                month prior to the Termination Date.

        "AVAILABLE COMMITMENT" means, in relation to a Facility, a Lender's
        Commitment under that Facility minus:

        (a)     the Base Currency Amount of its participation in any
                outstanding Utilisations under that Facility; and

        (b)     in relation to any proposed Utilisation, the Base Currency
                Amount of its participation in any Utilisations that are due
                to be made under that Facility on or before the proposed
                Utilisation Date,

        other than, in relation to any proposed Utilisation under Facility B
        only, that Lender's participation in any Facility B Utilisations that
        are due to be repaid or prepaid on or before the proposed Utilisation
        Date.

        "AVAILABLE FACILITY" means, in relation to a Facility, the aggregate
        for the time being of each Lender's Available Commitment in respect of
        that Facility.

        "BASE CURRENCY" means dollars.

        "BASE CURRENCY AMOUNT" means, in relation to a Utilisation, the amount
        specified in the Utilisation Request delivered by a Borrower for that
        Utilisation (or, if the amount requested is not denominated in the
        Base Currency, that amount converted into the Base Currency at the
        Agent's Spot Rate of Exchange on the date which is three Business Days
        before the Utilisation Date or, if later, on the date the Agent
        receives the Utilisation Request and, in the case of a Letter of
        Credit, as adjusted under Clause 6.8 (Revaluation of Letters of
        Credit)) adjusted to reflect any repayment (other than, in relation to
        Facility A, a repayment arising from a change of currency),
        prepayment, consolidation or division of the Utilisation.

        "BELGIAN BORROWER" means a Borrower whose jurisdiction of organisation
        is Belgium.

        "BELGIAN GUARANTOR" means a Guarantor whose jurisdiction of
        organisation is Belgium.

        "BELGIAN OBLIGOR" means Flexsys N.V. and Flexsys Co-ordination Centre
        N.V. and any other Belgian Borrower or Belgian Guarantor.

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        "BELGIAN SECURITY DOCUMENTS" means any Security Documents governed by
        the laws of Belgium.

        "BNM" means the Malaysian Central Bank (also known as Bank Negara
        Malaysia).

        "BORROWER" means an Original Borrower or an Additional Borrower unless
        it has ceased to be a Borrower in accordance with Clause 27 (Changes
        to the Obligors).

        "BRAZILIAN GUARANTEE AGREEMENT" means the guarantee agreement dated 27
        April 2007 and made between Flexsys Industria e Comercio Ltda. as
        guarantor and KBC Bank N.V. as Security Trustee and Sergio Caratori
        Paes de Andrade and Flexsys Holding B.V. as consent parties, as
        amended pursuant to the Amended and Restated Brazilian Guarantee
        Agreement dated as of 23 May 2007 executed by and between Flexsys
        Industria e Comercio Ltda. as guarantor, KBC Bank N.V. as Security
        Trustee and Sergio Caratori Paes de Andrade and Flexsys Holding B.V.
        as consent parties and any amendments thereof from time to time.

        "BRAZILIAN QUOTA PLEDGE AGREEMENT" means the quota pledge agreement
        dated 27 April 2007 and made between the Company and Sergio Caratori
        Paes de Andrade as quotaholders, Flexsys Industria e Comercio Ltda and
        KBC Bank N.V. as the Security Trustee, as amended pursuant to the
        Amended and Restated Brazilian Quota Pledge Agreement dated as of 23
        May 2007 executed by and between the Company and Sergio Caratori Paes
        de Andrade as quotaholders, Flexsys Industria e Comercio Ltda and KBC
        Bank N.V. as the Security Trustee and any amendments thereof from time
        to time.

        "BREAK COSTS" means the amount (if any) by which:

        (a)     the interest (excluding the Margin) which a Lender should have
                received for the period from the date of receipt of all or any
                part of its participation in a Loan or Unpaid Sum to the last
                day of the current Interest Period in respect of that Loan or
                Unpaid Sum, had the principal amount or Unpaid Sum received
                been paid on the last day of that Interest Period;

        exceeds:

        (b)     the amount which that Lender would be able to obtain by
                placing an amount equal to the principal amount or Unpaid Sum
                received by it on deposit with a leading bank in the Relevant
                Interbank Market for a period starting on the Business Day
                following receipt or recovery and ending on the last day of
                the current Interest Period.

        "BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
        banks are open for general business in London, Brussels and New York
        and:

        (a)     (in relation to any date for payment or purchase of a currency
                other than euro) the principal financial centre of the country
                of that currency; or

        (b)     (in relation to any date for payment or purchase of euro) any
                TARGET Day.

        "CHARGED PORTFOLIO" means the Shares in Flexsys S.p.A and, in relation
        to these Shares, all dividends, interest and other monies payable in
        respect of these Shares and all rights

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        to receive any economic benefit and proceeds in respect of or derived
        from these Shares (either by way of transfer, redemption, bonus,
        preference, substitution, pre-emption, conversion, winding-up, merger
        and/or de-merger or otherwise).

        "CHARGED PROPERTY" means all the assets of the Obligors which from
        time to time are, or are expressed to be, the subject of the
        Transaction Security.

        "CODE" means, at any date, the United States Internal Revenue Code of
        1986 and the regulations promulgated and the judicial and
        administrative decisions rendered under it, all as the same may be in
        effect at such date.

        "COLLATERAL RIGHTS" means all rights, powers and remedies of the
        Security Trustee provided by or pursuant to a Security Document or by
        law.

        "COMMITMENT" means a Facility A Commitment or Facility B Commitment as
        the context may require.

        "COMPLIANCE CERTIFICATE" means a certificate substantially in the form
        set out in Schedule 8 (Form of Compliance Certificate).

        "CRYSTEX ACQUISITION" means the acquisition of the Kashima Crystex
        operation from Akzo Nobel Chemicals International B.V.

        "DECLARED DEFAULT" has the meaning given to it in Schedule 12 (Agreed
        Security Principles).

        "DEFAULT" means an Event of Default or any event or circumstance
        specified in Clause 25 (Events of Default) which would (with the
        expiry of a grace period, the giving of notice, the making of any
        determination under the Finance Documents or any combination of any of
        the foregoing) be an Event of Default.

        "DELEGATE" means any delegate, agent, attorney or co-trustee appointed
        by the Security Trustee.

        "DISRUPTION EVENT" means either or both of:

        (c)     a material disruption to those payment or communications
                systems or to those financial markets which are, in each case,
                required to operate in order for payments to be made in
                connection with the Facilities (or otherwise in order for the
                transactions contemplated by the Finance Documents to be
                carried out) which disruption is not caused by, and is beyond
                the control of, any of the Parties; or

        (d)     the occurrence of any other event which results in a
                disruption (of a technical or systems-related nature) to the
                treasury or payments operations of a Party preventing that, or
                any other Party:

                (i)     from performing its payment obligations under the
                        Finance Documents; or

                (ii)    from communicating with other Parties in accordance
                        with the terms of the Finance Documents,

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        (and which (in either such case)) is not caused by, and is beyond the
        control of, the Party whose operations are disrupted.

        "DUTCH CIVIL CODE" means the Dutch Civil Code (Burgerlijk Wetboek).

        "DUTCH OBLIGOR" means an Obligor incorporated in The Netherlands.

        "DUTCH FSA" means the Financial Supervision Act (Wet op het financieel
        toezicht) including any and all subordinate decrees and regulations
        issued pursuant thereto.

        "EMPLOYEE PLAN" means an employee pension benefit plan (other than a
        Multiemployer Plan) subject to the provisions of Title IV of ERISA or
        Section 412 of the Code or Section 302 of ERISA, and in respect of
        which a U.S. Obligor or any ERISA Affiliate is (or, if such plan were
        terminated, would under Section 4069 of ERISA be deemed to be) an
        "employer" as defined in Section 3(5) of ERISA.

        "ENVIRONMENTAL CLAIM" means any claim, proceeding or investigation by
        any person in respect of any Environmental Law.

        "ENVIRONMENTAL LAW" means any applicable law in any jurisdiction in
        which any member of the Group conducts business which relates to the
        pollution or protection of the environment or harm to or the
        protection of human health or the health of animals or plants.

        "ENVIRONMENTAL PERMITS" means any permit, licence, consent, approval
        and other authorisation and the filing of any notification, report or
        assessment required under any Environmental Law for the operation of
        the business of any member of the Group conducted on or from the
        properties owned or used by the relevant member of the Group.

        "ERISA" means, at any date, the United States Employee Retirement
        Income Security Act of 1974 and the regulations promulgated and
        ratings issued thereunder, all as the same may be in effect at such
        date.

        "ERISA AFFILIATE" means any person that for purposes of Title I and
        Title IV of ERISA and Section 412 of the Code would be deemed at any
        relevant time to be a single employer with an Obligor, pursuant to
        Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

        "ERISA EVENT" means

        (a)     any reportable event, as defined in Section 4043 of ERISA,
                with respect to an Employee Plan, as to which PBGC has not by
                regulation waived the requirement of Section 4043(a) of ERISA
                that it be notified of such event;

        (b)     the filing of a notice of intent to terminate any Employee
                Plan, if such termination would require material additional
                contributions in order to be considered a standard termination
                within the meaning of Section 4041(b) of ERISA, the filing
                under Section 4041(c) of ERISA of a notice of intent to
                terminate any Employee Plan or the termination of any Employee
                Plan under Section 4041(c) of ERISA;

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        (c)     the institution of proceedings under Section 4042 of ERISA by
                the PBGC for the termination of, or the appointment of a
                trustee to administer, any Employee Plan;

        (d)     the failure to make a required contribution to any Employee
                Plan that would result in the imposition of an encumbrance
                under Section 412 of the Code or Section 302 of ERISA or the
                filing of any request for a minimum funding waiver under
                Section 412 of the Code with respect to any Employee Plan;

        (e)     an engagement in a non-exempt prohibited transaction within
                the meaning of Section 4975 of the Code or Section 406 of
                ERISA; and

        (f)     an Obligor or an ERISA Affiliate incurring any liability under
                Title IV of ERISA with respect to any Employee Plan (other
                than premiums due and not delinquent under Section 4007 of
                ERISA).

        "EURIBOR" means, in relation to any Loan in euro:

        (a)     the applicable Screen Rate; or

        (b)     (if no Screen Rate is available for the Interest Period of
                that Loan) the arithmetic mean of the rates (rounded upwards
                to four decimal places) as supplied to the Agent at its
                request quoted by the Reference Banks to leading banks in the
                European interbank market;

        as of the Specified Time on the Quotation Day for the offering of
        deposits in euro for a period comparable to the Interest Period of the
        relevant Loan.

        "EVENT OF DEFAULT" means any event or circumstance specified as such
        in Clause 25 (Events of Default).

        "EXISTING FACILITY" means the US$200,000,000 Multicurrency Term and
        Revolving Credit Facility dated 14 February 2003 between, inter alia,
        the Company, the Original Borrowers, the Original Guarantors,
        Commerzbank Aktiengesellschaft, KBC Bank N.V. and others (as amended).

        "EXTENSION LETTER" means the Extension Letter to the Mandate Letter
        dated 16 April 2007 between the Arranger, the Company and others.

        "FACILITY" means Facility A or Facility B as the context may require.

        "FACILITY A" means the term loan facility made available under this
        Agreement as described in Clause 2 (The Facilities).

        "FACILITY A COMMITMENT" means:

        (a)     in relation to an Original Lender, the amount in the Base
                Currency set opposite its name under the heading "Facility A
                Commitment" in Part II of Schedule 1 (The Original Parties)
                and the amount of any other Facility A Commitment transferred
                to it under this Agreement; and

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        (b)     in relation to any other Lender, the amount in the Base
                Currency of any Facility A Commitment transferred to it under
                this Agreement,

        to the extent not cancelled, reduced or transferred by it under this
        Agreement.

        "FACILITY A LOAN" means a loan made or to be made under Facility A or
        the principal amount outstanding for the time being of that loan.

        "FACILITY A REPAYMENT DATE" means each of the dates specified in
        Clause 9.1 (Repayment of Facility A Loans) as Repayment Dates, but if
        any such date is not a Business Day, then that Repayment Date shall be
        deemed to be the immediately succeeding Business Day.

        "FACILITY B" means the revolving credit facility made available under
        this Agreement as described in Clause 2 (The Facilities).

        "FACILITY B COMMITMENT" means:

        (a)     in relation to an Original Lender, the amount in the Base
                Currency set opposite its name under the heading "Facility B
                Commitment" in Part II of Schedule 1 (The Original Parties)
                and the amount of any other Facility B Commitment transferred
                to it under this Agreement; and

        (b)     in relation to any other Lender, the amount in the Base
                Currency of any Facility B Commitment transferred to it under
                this Agreement,

        to the extent not cancelled, reduced or transferred by it under this
        Agreement.

        "FACILITY B LOAN" means a loan made or to be made under Facility B or
        the principal amount outstanding for the time being of that loan.

        "FACILITY B UTILISATION" means a Facility B Loan or a Letter of
        Credit.

        "FACILITY OFFICE" means the office or offices notified by a Lender to
        the Agent in writing on or before the date it becomes a Lender (or,
        following that date, by not less than five Business Days' written
        notice) as the office or offices through which it will perform its
        obligations under this Agreement.

        "FEE LETTER" means any letter or letters dated on or about 28 February
        2007 between the Arranger and the Company (or the Agent and the
        Company or the Security Trustee and the Company) setting out any of
        the fees referred to in Clause 14 (Fees), as amended by the Amendment
        Letter.

        "FIC" means the Foreign Investment Committee of the Economic Planning
        Unit of the Malaysian Prime Minister's Department.

        "FINANCIAL CLOSE" means the date on which consideration is payable
        pursuant to the Akzo Nobel Retirement and the Crystex Acquisition and
        completion under such retirement and acquisition has occurred.

        "FINANCE DOCUMENT" means this Agreement, the Syndication and Amendment
        and Restatement Agreement, the Mandate Letter (as amended by the
        Extension Letter), the

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        Security Documents, the Intercreditor Agreement, the Amendment and
        Restatement Agreement, any Fee Letter (as amended by the Amendment
        Letter), any Accession Letter, any Resignation Letter, any Transfer
        Certificate and any other document designated as such by the Agent and
        the Company.

        "FINANCE PARTY" means the Agent, the Arranger, the Security Trustee or
        a Lender.

        "FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect of:

        (a)     moneys borrowed;

        (b)     any amount raised by acceptance under any acceptance credit
                facility or dematerialised equivalent;

        (c)     any amount raised pursuant to any note purchase facility or
                the issue of bonds, notes, debentures, loan stock or any
                similar instrument;

        (d)     the amount of any liability in respect of any lease or hire
                purchase contract which would, in accordance with GAAP, be
                treated as a finance or capital lease;

        (e)     receivables sold or discounted (other than any receivables to
                the extent they are sold on a non-recourse basis);

        (f)     any amount raised under any other transaction (including any
                forward sale or purchase agreement) having the commercial
                effect of a borrowing;

        (g)     any derivative transaction entered into in connection with
                protection against or benefit from fluctuation in any rate or
                price (and, when calculating the value of any derivative
                transaction, only the marked to market value shall be taken
                into account);

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

        (i)     any amount raised by the issue of redeemable shares;

        (j)     any amount of any liability under an advance or deferred
                purchase agreement if one of the primary reasons behind the
                entry into this agreement is to raise finance; and

        (k)     (without double counting) the amount of any liability in
                respect of any guarantee or indemnity for any of the items
                referred to in paragraphs (a) to (j) above.

        "FLEXSYS AMERICA CO." means Flexsys America Co., a corporation
        incorporated under the laws of the State of Delaware, United States of
        America, with its principal office at 260 Springside Drive, Akron,
        Ohio 44333, United States of America.

        "FLEXSYS RUBBER CHEMICALS RETIREMENT BENEFITS SCHEME" means the
        retirement benefits scheme of Flexsys Rubber Chemicals Limited formed
        on 1 April 1998.

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        "FRENCH SECURITY DOCUMENTS" means any Security Documents governed by
        the laws of France.

        "GAAP" means generally accepted accounting principles in the United
        States of America.

        "GERMAN BORROWER" means a Borrower whose jurisdiction of organisation
        is Germany.

        "GERMAN DEBT PUSHDOWN" means the corporate reorganisation and debt
        push down steps taken together to be carried out in accordance with
        Clause 24.34 (German Debt Pushdown).

        "GERMAN GUARANTOR" means a Guarantor whose jurisdiction of
        organisation is Germany.

        "GERMAN OBLIGOR" means Flexsys Verwaltungs-und Beteiligungs GmbH and
        Flexsys Verkauf GmbH and any other German Borrower or German
        Guarantor.

        "GERMAN SECURITY DOCUMENTS" means any Security Documents governed by
        the laws of Germany.

        "GROUP" means, at any time, the Company and its then Subsidiaries,
        Flexsys America L.P. and Flexsys Rubber Chemicals Limited.

        "GROUP STRUCTURE CHART" means the group structure chart showing:

        (a)     all members of the Group, including current name and company
                registration number, its jurisdiction of incorporation and/or
                establishment and a list of shareholders;

        (b)     any person in which any member of the Group holds shares in
                its issued share capital or equivalent ownership interest of
                such person.

        "GUARANTOR" means an Original Guarantor or an Additional Guarantor,
        unless it has ceased to be a Guarantor in accordance with Clause 27
        (Changes to the Obligors).

        "HOLDING COMPANY" means, in relation to a company or corporation, any
        other company or corporation in respect of which it is a Subsidiary.

        "INFORMATION MEMORANDUM" means the document in the form approved by
        the Company concerning the Group which, at the Company's request and
        on its behalf, was prepared in relation to this transaction and
        distributed by the Arranger to selected financial institutions before
        the date of this Agreement.

        "INTELLECTUAL PROPERTY" means any patents, trademarks, service marks,
        designs, business names, copyrights, design rights, moral rights,
        inventions, confidential information, knowhow and other intellectual
        property rights and interests, whether registered or unregistered, and
        the benefit of all applications and rights to use such assets of each
        Obligor.

        "INTERCREDITOR AGREEMENT" means the agreement dated 27 April 2007 and
        made amongst others, between the Company, KBC Bank N.V. as Security
        Trustee, KBC Bank

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        N.V. as agent, Solutia Inc. and Solutia Europe N.V. as the Parent, the
        Senior Lenders (as defined in the Intercreditor Agreement), the
        Intra-Group Lenders and the Original Obligors (each as defined in the
        Intercreditor Agreement) as amended by the Amendment and Restatement
        Agreement.

        "INTEREST PERIOD" means, in relation to a Loan, each period determined
        in accordance with Clause 12 (Interest Periods) and, in relation to an
        Unpaid Sum, each period determined in accordance with Clause 11.3
        (Default interest).

        "IRS" means the United States Internal Revenue Service or any
        successor thereto.

        "ISSUING BANK" means, in respect of a Letter of Credit, KBC Bank N.V.
        or any other Lender (or its affiliate) that has agreed to act as
        Issuing Bank in respect of that Letter of Credit.

        "ITALIAN CIVIL CODE" means the Italian civil code, enacted by Royal
        Decree No. 262 of 16 March 1942, as subsequently amended and
        supplemented.

        "ITALIAN SECURITY DOCUMENTS" means any Security Documents governed by
        the laws of Italy.

        "ITALIAN SHARE PLEDGE" means the share pledge agreement dated on or
        about 27 April 2007 and made by the Company as pledgor and the KBC
        Bank N.V. as secured creditor and common representative of the other
        secured creditors.

        "JAPANESE SECURITY DOCUMENTS" means any Security Documents governed by
        the laws of Japan.

        "LEGAL OPINIONS" means the legal opinions delivered to the Agent
        pursuant to Schedule 2 (Conditions Precedent and Conditions
        Subsequent).

        "LENDER" means:

        (a)     any Original Lender; and

        (b)     any bank, financial institution, trust, fund or other entity
                which has become a Party in accordance with Clause 26 (Changes
                to the Lenders),

        which in each case has not ceased to be a Party in accordance with the
        terms of this Agreement.

        "LETTER OF CREDIT" means a letter of credit, substantially in the form
        set out in Schedule 10 (Form of Letter of Credit) or in any other form
        requested by a Borrower and agreed by the Agent (with the prior
        consent of the Majority Lenders) and the Issuing Bank.

        "LIBOR" means, in relation to any Loan:

        (a)     the applicable Screen Rate; or

        (b)     (if no Screen Rate is available for the currency or Interest
                Period of that Loan) the arithmetic mean of the rates (rounded
                upwards to four decimal places) as

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                supplied to the Agent at its request quoted by the Reference
                Banks to leading banks in the London interbank market,

        as of the Specified Time on the Quotation Day for the offering of
        deposits in the currency of that Loan and for a period comparable to
        the Interest Period for that Loan.

        "LMA" means the Loan Market Association.

        "LOAN" means a Facility A Loan or a Facility B Loan as the context may
        require.

        "LONG TERM INCENTIVE COMPENSATION" means the management incentive plan
        covering the period 2004-2006; successful achievement of the targets
        set out in the plan will result in a payout of approximately
        US$50,000,000, which amount is scheduled to be paid in early 2007.

        "MAJORITY LENDERS" means:

        (a)     if there are no Utilisations then outstanding, a Lender or
                Lenders whose Commitments aggregate more than 66 2/3% of the
                Total Commitments (or, if the Total Commitments have been
                reduced to zero, aggregated more than 66 2/3% of the Total
                Commitments immediately prior to the reduction); or

        (b)     at any other time, a Lender or Lenders whose participations in
                the Utilisations then outstanding aggregate more than 66 2/3%
                of all the Utilisations then outstanding.

        "MANDATE LETTER" means the letter dated 28 February 2007 between the
        Arranger, the Company and others, as amended by the Extension Letter.

        "MANDATORY COST" means the percentage rate per annum calculated by the
        Agent in accordance with Schedule 4 (Mandatory Cost Formulae).

        "MARGIN" means:

        (a)     in relation to Facility A, 1.25% per annum until the date
                falling six months from the first Utilisation Date and
                thereafter the Margin in relation to Facility A will be
                adjusted on the basis of the most recently delivered Combined
                Financial Statements of the Group (which must be audited if
                such statements relate to the Group's financial year) by
                reference to the ratio of Combined Senior Total Financial Debt
                as at the last day of each Relevant Period to EBITDA for such
                Relevant Period in accordance with the table set out below:

                -----------------------------------------------------------
                RATIO                                 MARGIN % PER ANNUM
                -----------------------------------------------------------
                >2.5                                          1.5
                -
                -----------------------------------------------------------
                <2.5 >2.0                                    1.25
                     -
                -----------------------------------------------------------
                <2.0 >1.5                                    1.00
                     -
                -----------------------------------------------------------
                <1.5 >1.0                                    0.80
                     -
                -----------------------------------------------------------
                <1.0                                         0.65
                -----------------------------------------------------------

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                PROVIDED THAT whilst a Default is continuing the Margin shall
                be the highest Margin specified above.

        (b)     in relation to Facility B, 1.00% per annum until the date
                falling six months from the date of this Agreement and
                thereafter the Margin in relation to Facility B will be
                adjusted on the basis of the most recently delivered Combined
                Financial Statements of the Group (which must be audited if
                such statements relate to the Group's financial year) by
                reference to the ratio of Combined Senior Total Financial Debt
                as at the last day of each Relevant Period to EBITDA for such
                Relevant Period, in accordance with the table set out below:

                -----------------------------------------------------------
                RATIO                                 MARGIN % PER ANNUM
                -----------------------------------------------------------
                >2.5                                         1.25
                -
                -----------------------------------------------------------
                <2.5 >2.0                                    1.00
                     -
                -----------------------------------------------------------
                <2.0 >1.5                                    0.80
                     -
                -----------------------------------------------------------
                <1.5 >1.0                                    0.60
                     -
                -----------------------------------------------------------
                <1.0                                         0.50
                -----------------------------------------------------------

                PROVIDED THAT whilst a Default is continuing the Margin shall
                be the highest Margin specified above.

        Any adjustment to the Margin shall take effect on the date falling
        five Business Days after the date of receipt by the Agent of the
        relevant Compliance Certificate.

        For the purposes of determining the Margin, "Combined Senior Total
        Financial Debt", "EBITDA", "Combined Financial Statements of the
        Group" and "Relevant Period" shall be determined in accordance with
        Clause 23.1 (Financial definitions).

        "MARGIN STOCK" means margin stock or "margin security" within the
        meaning of Regulations T, U and X.

        "MATERIAL ADVERSE EFFECT" means a material adverse effect on:

        (a)     the business, property or financial condition of the Group
                taken as a whole;

        (b)     the ability of an Obligor to perform its obligations under the
                Finance Documents; or

        (c)     the validity or enforceability of the Finance Documents or the
                rights or remedies of any Finance Party under the Finance
                Documents.

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        For the avoidance of doubt, the continuation of Solutia Inc.'s
        proceedings under Title 11 of the United States of America Code
        entitled Bankruptcy shall not constitute a Material Adverse Effect
        PROVIDED THAT no member of the Group becomes subject to such
        proceedings or those of an affiliated debtor of Solutia Inc.

        "MATERIAL GROUP MEMBER" means a member of the Group (other than the
        Company) which:

        (a)     has EBITDA representing 5 per cent. or more of the Combined
                EBITDA as defined in Clause 23 (Financial Covenants); and/or

        (b)     has assets representing 5 per cent. or more of the aggregate
                assets of the Group; and/or

        (c)     has revenue representing 5 per cent. or more of the aggregate
                revenue of the Group,

        in each case calculated on a combined basis.

        Compliance with the conditions set out in paragraphs (a), (b) and (c)
        shall be determined by reference to the most recent Compliance
        Certificate supplied by the Company and/or the latest audited
        financial statements of that member of the Group and the latest
        audited Combined Financial Statements of the Group.

        A report by the auditors of the Company that a member of the Group is
        or is not a Material Group Member shall, in the absence of manifest
        error, be conclusive and binding on all Parties.

        "MONTH" means a period starting on one day in a calendar month and
        ending on the numerically corresponding day in the next calendar
        month, except that:

        (a)     (subject to paragraph (c) below) if the numerically
                corresponding day is not a Business Day, that period shall end
                on the next Business Day in that calendar month in which that
                period is to end if there is one, or if there is not, on the
                immediately preceding Business Day;

        (b)     if there is no numerically corresponding day in the calendar
                month in which that period is to end, that period shall end on
                the last Business Day in that calendar month; and

        (c)     if an Interest Period begins on the last Business Day of a
                calendar month, that Interest Period shall end on the last
                Business Day in the calendar month in which that Interest
                Period is to end.

        The above rules will only apply to the last Month of any period.

        "MULTIEMPLOYER PLAN" means a "multiemployer plan" (as defined in
        Section (3)(37) of ERISA) contributed to for any employees of a U.S.
        Obligor or any ERISA Affiliate.

        "NEW GERMAN HOLD CO" means the new company to be established after the
        date of this Agreement by the Company and whose jurisdiction of
        organisation will be Germany.

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        "OBLIGORS" means a Borrower or a Guarantor.

        "OPTIONAL CURRENCY" means a currency (other than the Base Currency)
        which complies with the conditions set out in Clause 4.3 (Conditions
        relating to Optional Currencies).

        "ORIGINAL FINANCIAL STATEMENTS" means:

        (a)     in relation to the Company, the audited Combined Financial
                Statements of the Group for the financial year ended 2006
                prepared under GAAP; and

        (b)     in relation to each Original Obligor other than the Company,
                its unaudited financial statements for its financial year
                ended 2006.

        "ORIGINAL OBLIGOR" means an Original Borrower or an Original Guarantor.

        "PARALLEL OBLIGATIONS" has the meaning as that which is contained in
        the German Security Documents.

        "PARTICIPATING MEMBER STATE" means any member state of the European
        Communities that adopts or has adopted the euro as its lawful currency
        in accordance with legislation of the European Community relating to
        Economic and Monetary Union.

        "PARTY" means a party to this Agreement.

        "PBGC" means the U.S. Pension Benefit Guaranty Corporation, or any
        entity succeeding to all or any of its functions under ERISA.

        "PENSION FUND OBLIGATIONS" means any amount that the Buyer Entities
        (as defined in the Share Purchase Agreement) are required to
        contribute to the Flexsys UK pension plan within ten days after
        closing pursuant to the Share Purchase Agreement.

        "PERFECTION REQUIREMENTS" means the making of the appropriate
        registrations, filings or notifications of the Security Documents.

        "QUOTATION DAY" means, in relation to any period for which an interest
        rate is to be determined:

        (a)     (if the currency is domestic sterling) the first day of that
                period;

        (b)     (if the currency is euro) two TARGET Days before the first day
                of that period; or

        (c)     (for any other currency) two Business Days before the first
                day of that period,

        unless market practice differs in the Relevant Interbank Market for a
        currency, in which case the Quotation Day for that currency will be
        determined by the Agent in accordance with market practice in the
        Relevant Interbank Market (and if quotations would normally be given
        by leading banks in the Relevant Interbank Market on more than one
        day, the Quotation Day will be the last of those days).

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        "REAL PROPERTY" means:

        (a)     any freehold, leasehold or immovable property (including the
                freehold and leasehold property in the Relevant Jurisdictions
                specified in the relevant Security Document); and

        (b)     any buildings, fixtures, fittings, fixed plant or machinery
                from time to time situated on or forming part of that freehold
                or leasehold property,

        and all Related Rights.

        "RECEIVER" means a receiver or receiver and manager or administrative
        receiver of the whole or any part of the Charged Property.

        "REFERENCE BANKS" means, in relation to LIBOR and Mandatory Cost the
        principal London offices of the Agent and Citibank N.A. and, in
        relation to EURIBOR, the principal office in Brussels or London of the
        Agent and Citibank N.A. or such other banks as may be appointed by the
        Agent in consultation with the Company.

        "REGULATIONS T, U AND X" means, respectively, Regulations T, U and X
        of the Board of Governors of the Federal Reserve System of the United
        States (or any successor) as now and from time to time in effect from
        the date of this Agreement.

        "RELATED RIGHTS" means, in relation to any asset:

        (a)     the proceeds of sale of any part of that asset;

        (b)     all rights under any licence, agreement for sale or agreement
                for lease in respect of that asset;

        (c)     all rights, powers, benefits, claims, contracts, warranties,
                remedies, security, guarantees, indemnities or covenants for
                title in respect of that asset; and

        (d)     any monies and proceeds paid or payable in respect of that
                asset.

        "RELEVANT INTERBANK MARKET" means in relation to euro, the European
        interbank market and, in relation to any other currency, the London
        interbank market.

        "RELEVANT JURISDICTION" means:

        (a)     the jurisdiction of incorporation of each member of the Group;

        (b)     the jurisdiction where any asset subject to or intended to be
                subject to the Transaction Security is situated;

        (c)     the jurisdiction whose laws govern the perfection of any of
                the Security Documents; and

        (d)     the jurisdiction where any member of the Group is conducting
                its business.

        "REPAYMENT INSTALMENT" means each instalment for repayment of the
        Facility A Loans referred to in Clause 9.1 (Repayment of Facility A
        Loans).

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        "REPEATING REPRESENTATIONS" means each of the representations set out
        in Clauses 21.1 (Status) to 21.6 (Governing law and enforcement),
        Clause 21.8 (No default), paragraph (e) of Clause 21.9 (No misleading
        information), Clause 21.11 (Pari passu ranking), Clause 21.20
        (Ranking) to Clause 21.24 (Legal and Beneficial Owner), Clause 21.30
        (Centre of main interests and establishments), Clause 21.33 (Pensions)
        and 21.42 (No cluster bombs or anti-personnel mines) and, for each
        Additional Obligor on the date of accession to the Finance Documents,
        also means each of the representations set out in Clause 21.7 (No
        filing taxes), Clause 21.10 (Financial statements), Clause 21.12 (No
        proceedings pending or threatened), Clauses 21.16 (Deduction of Tax)
        to 21.19 (Security), Clause 21.25 (Shares), Clause 21.32 (ERISA Plans)
        and Clauses 21.35 (Federal Reserve Regulations) to 21.37
        (Anti-Terrorism Laws).

        "RESIGNATION LETTER" means a letter substantially in the form set out
        in Schedule 7 (Form of Resignation Letter).

        "RESERVATIONS" means any general principles of law limiting the
        obligations of any Obligor which are specifically referred to in any
        legal opinion delivered pursuant to Clause 4 (Conditions of
        Utilisation) or Clause 27 (Changes to the Obligors).

        "RESTRICTED PARTY" means any person listed:

        (a)     in the Annex to the Executive Order;

        (b)     on the "Specially Designated Nationals and Blocked Persons"
                list maintained by the OFAC; or

        (c)     in any successor list to either of the foregoing.

        "ROLLOVER LOAN" means one or more Facility B Loans:

        (a)     made or to be made on the same day that (i) a maturing
                Facility B Loan is due to be repaid or (ii) a Borrower is
                obliged to pay to the Agent for the Issuing Bank the amount of
                any claim under a Letter of Credit;

        (b)     the aggregate amount of which is equal to or less than (i) the
                maturing Facility B Loan or (ii) the amount of the claim under
                the Letter of Credit;

        (c)     in the same currency as (i) the maturing Facility B Loan
                (unless it arose as a result of the operation of Clause 8.2
                (Unavailability of a currency) or (ii) the claim under the
                Letter of Credit; and

        (d)     made or to be made to the same Borrower for the purpose of (i)
                refinancing a maturing Facility B Loan or (ii) satisfying the
                obligations of the Borrower to pay the amount of a claim under
                the Letter of Credit to the Agent for the Issuing Bank.

        "SCREEN RATE" means:

        (a)     in relation to LIBOR, the British Bankers' Association
                Interest Settlement Rate for the relevant currency and period;
                and

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        (b)     in relation to EURIBOR, the percentage rate per annum
                determined by the Banking Federation of the European Union for
                the relevant period,

        displayed on the appropriate page of the Reuters screen. If the agreed
        page is replaced or service ceases to be available, the Agent may
        specify another page or service displaying the appropriate rate after
        consultation with the Company and the Lenders.

        "SEC" means the United States Securities and Exchange Commission or
        any successor thereto.

        "SECURED CONTRACTS" has the same meaning as that which is contained in
        the Italian Share Pledge.

        "SECURED OBLIGATIONS" means all obligations at any time due, owing or
        incurred by any Obligor to any Secured Party under the Finance
        Documents, whether present or future, actual or contingent (and
        whether incurred solely or jointly and whether as principal or surety
        or in some other capacity).

        "SECURED PARTIES" means the Security Trustee, any Receiver or
        Delegate, the Agent, and each Lender from time to time party to this
        Agreement.

        "SECURITY" means a mortgage, charge, pledge, lien or other security
        interest securing any obligation of any person or any other agreement
        or arrangement having a similar effect.

        "SECURITY DOCUMENTS" means each of the documents listed as being a
        Security Document in paragraph 2(a) of Part I of Schedule 2
        (Conditions Precedent and Conditions Subsequent), any document
        required to be delivered to the Agent under paragraph 2 of Part II of
        Schedule 2 (Conditions Precedent and Conditions Subsequent) and any
        document required to be delivered to the Agent under paragraph 15 of
        Part III of Schedule 2 (Conditions Precedent and Conditions
        Subsequent) as may be amended or substituted from time to time,
        together with any other document entered into by any Obligor creating
        or expressed to create any Security over all or any part of its assets
        in respect of the obligations of any of the Obligors under any of the
        Finance Documents.

        "SELECTION NOTICE" means a notice substantially in the form set out in
        Part II of Schedule 3 (Requests) given in accordance with Clause 12
        (Interest Periods) in relation to Facility A.

        "SHAREHOLDERS" means Solutia Inc. and Solutia Europe N.V..

        "SHARES" means the shares or quotas subject to the Transaction
        Security.

        "SHARE PURCHASE AGREEMENT" means the share purchase agreement in
        relation to the Akzo Nobel Retirement between Akzo Nobel Chemicals
        International B.V., Akzo Nobel Chemicals Inc., Akzo Nobel N.V.,
        Flexsys Holding B.V., Flexsys America LP, Flexsys Rubber Chemicals Ltd
        and Solutia Inc. dated as of 28 March 2007.

        "SOLUTIA INC." means Solutia Inc, a corporation incorporated under the
        laws of the State of Delaware, United States of America, with its
        principal office at 575 Maryville Center Drive, St. Louis, Missouri
        63166, United States of America.

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        "SOURCES AND USES TABLE" means the table set out in Schedule 13
        (Sources and Uses Table).

        "SPECIFIED TIME" means a time determined in accordance with Schedule 9
        (Timetables).

        "SUBORDINATED LOAN" means the non-amortising loans of a minimum
        aggregate amount of US$100,000,000 and a maximum aggregate amount of
        US$175,000,000 to be provided by Solutia Inc. (or any of its
        affiliates) to one or more members of the Group for a term of six
        years at a market rate, available for corporate purposes including
        (but not limited to) the Akzo Nobel Retirement and which shall be
        subordinated to the Facilities pursuant to the terms of the
        Intercreditor Agreement and on terms and conditions (including (but
        not limited to) the determination of the interest rate) satisfactory
        to the Arranger.

        "SUBORDINATED LOAN AGREEMENT" means the subordinated loan agreements
        dated 26 April 2007 between Solutia Inc and one or more members of the
        Group.

        "SUBSIDIARY" means in relation to any company or corporation, a
        company or corporation:

        (a)     which is controlled, directly or indirectly, by the first
                mentioned company or corporation;

        (b)     more than half the issued share capital of which is
                beneficially owned, directly or indirectly by the first
                mentioned company or corporation; or

        (c)     which is a Subsidiary of another Subsidiary of the first
                mentioned company or corporation,

        and for this purpose, a company or corporation shall be treated as
        being controlled by another if that other company or corporation is
        able to direct its affairs and/or to control the composition of its
        board of directors or equivalent body.

        "SYNDICATION AND AMENDMENT AND RESTATEMENT AGREEMENT" means the
        syndication and amendment and restatement agreement to this Agreement
        made amongst others, between the Company, the Borrowers and the
        Guarantors (each as defined in the Syndication and Amendment and
        Restatement Agreement), KBC Bank N.V. as Agent, KBC Bank N.V. as
        Security Trustee, the Existing Lenders and the New Lenders (each as
        defined in the Syndication and Amendment and Restatement Agreement)
        dated on or about 23 May 2007.

        "TARGET" means Trans-European Automated Real-time Gross Settlement
        Express Transfer payment system.

        "TARGET DAY" means any day on which TARGET 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 penalty or interest payable in
        connection with any failure to pay or any delay in paying any of the
        same).

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        "TERMINATION DATE" means:

        (a)     in relation to Facility A the fifth anniversary of the date of
                this Agreement; and

        (b)     in relation to Facility B the fifth anniversary of the date of
                this Agreement.

        "TOTAL COMMITMENTS" means the aggregate of the Total Facility A
        Commitments and the Total Facility B Commitments, being US$225,000,000
        at the date of this Agreement.

        "TOTAL FACILITY A COMMITMENTS" means the aggregate of the Facility A
        Commitments, being US$75,000,000 at the date of this Agreement.

        "TOTAL FACILITY B COMMITMENTS" means the aggregate of the Facility B
        Commitments, being US$150,000,000 at the date of this Agreement.

        "TRANSACTION SECURITY" means the Security created or expressed to be
        created pursuant to the Security Documents.

        "TRANSFER CERTIFICATE" means a certificate substantially in one of the
        forms set out in Schedule 5 (Form of Transfer Certificate) or any
        other form agreed between the Agent and the Company.

        "TRANSFER DATE" means, in relation to a transfer, the later of:

        (a)     the proposed Transfer Date specified in the Transfer
                Certificate; and

        (b)     the date on which the Agent executes the Transfer Certificate.

        "UK BORROWER" means a Borrower whose jurisdiction or organisation is
        England and Wales.

        "UK GUARANTOR" means a Guarantor whose jurisdiction or organisation is
        England and Wales.

        "UK OBLIGOR" means Flexsys Rubber Chemicals Limited and any other UK
        Borrower or UK Guarantor.

        "UNFUNDED PENSION LIABILITY" means the excess of an Employee Plan's
        benefit liabilities under Section 4001(a)(16) of ERISA, over the
        current value of that plan's assets, determined in accordance with the
        assumptions used for funding the Employee Plan pursuant to Section 412
        of the Code for the applicable plan year.

        "UNPAID SUM" means any sum due and payable but unpaid by an Obligor
        under the Finance Documents.

        "U.S." and "UNITED STATES" means the United States of America, its
        territories, possessions and other areas subject to the jurisdiction
        of the United States of America.

        "U.S. BORROWER" means a Borrower whose jurisdiction of organisation is
        a state of the United States of America or the District of Columbia.

        "U.S. GUARANTOR" means a Guarantor whose jurisdiction of organisation
        is a state of the United States of America or the District of
        Columbia.

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        "U.S. OBLIGOR" means Flexsys America L.P. and any other U.S. Borrower
        or U.S. Guarantor which is constituted under the laws of any state of
        the United States of America or the District of Columbia.

        "U.S. TAX" means any federal, state, local income, gross receipts,
        license, premium, windfall profits, customs duties, capital stock,
        franchise, profits, withholding, social security (or similar), real
        property, personal property, sales, use, registration, value added,
        alternative or add-on minimum, estimated or other tax of any kind
        whatsoever, imposed by the United States, including any interest,
        penalty or addition thereto, whether disputed or not.

        "UTILISATION" means a Loan or a Letter of Credit.

        "UTILISATION DATE" means the date on which a Utilisation is made.

        "UTILISATION REQUEST" means a notice substantially in the form set out
        in Part I of Schedule 3 (Requests).

        "VAT" means value added tax as provided for in the Value Added Tax Act
        1994 and any other tax of a similar nature.

1.2     CONSTRUCTION
        (a)     Unless a contrary indication appears any reference in this
                Agreement to:

                (i)     the "AGENT", the "ARRANGER", the "SECURITY TRUSTEE",
                        any "FINANCE PARTY", any "SECURED PARTY", any
                        "LENDER", any "OBLIGOR" or any "PARTY" shall be
                        construed so as to include its successors in title,
                        permitted assigns and permitted transferees and, in
                        the case of the Security Trustee, any person for the
                        time being appointed as trustee or trustees in
                        accordance with this Agreement;

                (ii)    "ASSETS" includes present and future properties,
                        revenues and rights of every description;

                (iii)   a "FINANCE DOCUMENT" or any other agreement or
                        instrument is a reference to that Finance Document or
                        other agreement or instrument as amended, novated,
                        supplemented, extended, replaced or restated;

                (iv)    "INDEBTEDNESS" includes any obligation (whether
                        incurred as principal or as surety) for the payment or
                        repayment of money, whether present or future, actual
                        or contingent;

                (v)     a "PERSON" includes any individual, firm, company,
                        corporation, government, state or agency of a state or
                        any association, trust, joint venture, consortium or
                        partnership (whether or not having separate legal
                        personality);

                (vi)    a "REGULATION" includes any regulation, rule, official
                        directive, request or guideline (whether or not having
                        the force of law) of any governmental,
                        intergovernmental or supranational body, agency,
                        department or regulatory, self-regulatory or other
                        authority or organisation;

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                (vii)   a provision of law is a reference to that provision as
                        amended or re-enacted; and

                (viii)  a time of day is a reference to London time.

        (b)     Section, Clause and Schedule headings are for ease of
                reference only.

        (c)     Unless a contrary indication appears, a term used in any other
                Finance Document or in any notice given under or in connection
                with any Finance Document has the same meaning in that Finance
                Document or notice as in this Agreement.

        (d)     A Default (other than an Event of Default) is "CONTINUING" if
                it has not been remedied or waived and an Event of Default is
                "CONTINUING" if it has not been waived.

1.3     CURRENCY SYMBOLS AND DEFINITIONS
        "US$" and "DOLLARS" denote lawful currency of the United States of
        America, "(pound)" and "sterling" denotes lawful currency of the
        United Kingdom, "EUR" and "EURO" means the single currency unit of the
        Participating Member States and "(yen)" and "yen" denotes lawful
        currency of Japan.

1.4     DUTCH TERMS
        In this Agreement, where it relates to a Dutch entity, a reference to:

        (a)     a necessary action to authorise, where applicable, includes
                without limitation:

                (i)     any action required to comply with the Dutch Works
                        Council Act (Wet op de ondernemingsraden); and

                (ii)    obtaining unconditional positive advice (advies) from
                        each competent works council;

        (b)     a winding-up, administration or dissolution includes a Dutch
                entity being:

                (i)     declared bankrupt (failliet verklaard);

                (ii)    dissolved (ontbonden);

        (c)     a moratorium includes surseance van betaling and granted a
                moratorium includes surseance verleend;

        (d)     a trustee in bankruptcy includes a curator,

        (e)     an administrator includes a bewindvoerder;

        (f)     a receiver or an administrative receiver does not include a
                curator or bewindvoerder, and

        (g)     an attachment includes a beslag.

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1.5     THIRD PARTY RIGHTS
        A person who is not a Party has no right under the Contracts (Rights
        of Third Parties) Act 1999 to enforce or to enjoy the benefit of any
        term of this Agreement.

                                   SECTION 2
                                THE FACILITIES

2.      THE FACILITIES

2.1     THE FACILITIES
        Subject to the terms of this Agreement, the Lenders make available to
        the Borrowers:

        (a)     a multicurrency term loan facility in an aggregate amount
                equal to the Total Facility A Commitments; and

        (b)     a multicurrency revolving credit facility in an aggregate
                amount equal to the Total Facility B Commitments.

2.2     FINANCE PARTIES' RIGHTS AND OBLIGATIONS
        (a)     The obligations of each Finance Party under the Finance
                Documents are several. Failure by a Finance Party to perform
                its obligations under the Finance Documents does not affect
                the obligations of any other Party under the Finance
                Documents. No Finance Party is responsible for the obligations
                of any other Finance Party under the Finance Documents.

        (b)     The rights of each Finance Party under or in connection with
                the Finance Documents are separate and independent rights and
                any debt arising under the Finance Documents to a Finance
                Party from an Obligor shall be a separate and independent
                debt.

        (c)     A Finance Party may, except as otherwise stated in the Finance
                Documents, separately enforce its rights under the Finance
                Documents.

2.3     DESIGNATED ENTITIES
        Where a Lender (each a "DESIGNATED LENDER") has designated in the
        signature pages to this Agreement an Affiliate of itself (each a
        "DESIGNATED ENTITY") as its Facility Office for the purposes of
        participating in or making Loans to a particular Borrower, the Parties
        unconditionally and irrevocably agree that such Designated Entity
        shall:

        (a)     not have any Commitment (which shall remain with the
                Designating Lender);

        (b)     be entitled to all rights and benefits (other than voting
                rights which shall remain with the Designating Lender) under
                this Agreement relating to its participation in any Loan to
                such a Borrower; and

        (c)     have the corresponding duties of a Lender in relation to such
                Loans, and shall be a party to this Agreement for that
                purpose.

        Such Designating Lender shall procure, subject to the terms of this
        Agreement, that the Designated Entity participates in a Loan to such a
        Borrower in place of the Designating

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        Lender and the Parties shall be entitled to treat such Designated
        Entity as a Lender accordingly.

3.      PURPOSE

3.1     PURPOSE
        Each Borrower shall apply all amounts borrowed by it under Facility A
        and Facility B towards general corporate purposes including (but not
        limited to) the Akzo Nobel Retirement (in combination with the
        Subordinated Loan), the financing or refinancing of the Crystex
        Acquisition, payment of the Long Term Incentive Compensation and
        payment of the Pension Fund Obligations.

3.2     MONITORING
        No Finance Party is bound to monitor or verify the application of any
        amount borrowed pursuant to this Agreement.

4.      CONDITIONS OF UTILISATION

4.1     INITIAL CONDITIONS PRECEDENT
        No Borrower may deliver a Utilisation Request unless the Agent has
        received all of the documents and other evidence listed in Part I of
        Schedule 2 (Conditions Precedent and Conditions Subsequent) in form
        and substance satisfactory to the Agent. The Agent shall notify the
        Company and the Lenders promptly upon being so satisfied.

4.2     FURTHER CONDITIONS PRECEDENT
        (a)     The Lenders will only be obliged to comply with Clause 5.4
                (Lenders' participation) if on the date of the Utilisation
                Request and on the proposed Utilisation Date:

                (i)     in the case of a Rollover Loan, no Event of Default is
                        continuing or would result from the proposed Loan and,
                        in the case of any other Loan, no Default is
                        continuing or would result from the proposed Loan; and

                (ii)    the Repeating Representations to be made by each
                        Obligor are true in all material respects.

        (b)     The Lenders will only be obliged to comply with Clause 8.3
                (Change of currency) if, on the first day of an Interest
                Period, no Default is continuing or would result from the
                change of currency and the Repeating Representations to be
                made by each Obligor are true in all material respects.

        (c)     In the case of any Utilisation, no Crystallisation Event (as
                defined in the applicable Japanese Security Document) has
                occurred in respect of any Japanese Security Document given in
                favour of the Finance Parties.

4.3     CONDITIONS RELATING TO OPTIONAL CURRENCIES
        A currency will constitute an Optional Currency in relation to a
        Utilisation if:

        (a)     it is readily available in the amount required and freely
                convertible into the Base Currency in the Relevant Interbank
                Market on the Quotation Day and the Utilisation Date for that
                Utilisation; and

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        (b)     it is euros, sterling or yen.

4.4     MAXIMUM NUMBER OF UTILISATIONS
        (a)     A Borrower may not deliver a Facility B Utilisation Request if
                as a result of the proposed Utilisation seven or more Facility
                B Utilisations would be outstanding.

        (b)     A Borrower may not request that a Facility A Loan be divided.

        (c)     Any Loan made by a single Lender under Clause 8.2
                (Unavailability of a currency) shall not be taken into account
                in this Clause 4.4.

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                                   SECTION 3
                                  UTILISATION

5.      UTILISATION

5.1     DELIVERY OF A UTILISATION REQUEST
        A Borrower may utilise a Facility by delivery to the Agent of a duly
        completed Utilisation Request not later than the Specified Time.

5.2     COMPLETION OF A UTILISATION REQUEST
        (a)     Each Utilisation Request is irrevocable and will not be
                regarded as having been duly completed unless:

                (i)     it identifies the Facility to be utilised;

                (ii)    the proposed Utilisation Date is a Business Day within
                        the Availability Period applicable to that Facility;

                (iii)   the currency and amount of the Utilisation comply with
                        Clause 5.3 (Currency and amount); and

                (iv)    the proposed Interest Period complies with Clause 12
                        (Interest Periods).

        (b)     Only one Loan may be requested in each Utilisation Request.

5.3     CURRENCY AND AMOUNT
        (a)     The currency specified in a Utilisation Request must be the
                Base Currency or an Optional Currency.

        (b)     The amount of the proposed Loan must be:

                (i)     if the currency selected is the Base Currency,
                        US$75,000,000 for Facility A and a minimum of
                        US$5,000,000 for Facility B or in either case, if
                        less, the Available Facility; or

                (ii)    if the currency selected is an Optional Currency for
                        Facility A and Facility B the equivalent amounts to
                        that specified in paragraph (b)(i) above converted
                        into the Optional Currency or, if less, the Available
                        Facility; and

                (iii)   in any event such that its Base Currency Amount is
                        less than or equal to the Available Facility; and

                (iv)    provided that, to the extent ever utilised by a Dutch
                        Obligor, the minimum amount to be drawn by it shall
                        not be less than the equivalent of EUR 50,000.

5.4     LENDERS' PARTICIPATION
        (a)     If the conditions set out in this Agreement have been met,
                each Lender shall make its participation in each Loan
                available by the Utilisation Date through its Facility Office.

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        (b)     The amount of each Lender's participation in each Loan will be
                equal to the proportion borne by its Available Commitment to
                the Available Facility immediately prior to making the Loan.

        (c)     The Agent shall determine the Base Currency Amount of each
                Loan which is to be made in an Optional Currency and shall
                notify each Lender of the amount, currency and the Base
                Currency Amount of each Loan and the amount of its
                participation in that Loan, in each case by the Specified
                Time.

5.5     CANCELLATION OF COMMITMENT
        (a)     The Total Facility A Commitments shall be immediately
                cancelled at the end of the Availability Period for Facility A.

        (b)     The Total Facility B Commitments shall be immediately
                cancelled at the end of the Availability Period for Facility B.

6.      UTILISATION - LETTERS OF CREDIT

6.1     GENERAL
        (a)     In this Clause 6 and Clause 7 (Letters of Credit):

                (i)     "EXPIRY DATE" means, for a Letter of Credit, the last
                        day of its Term;

                (ii)    "L/C PROPORTION" means, in relation to a Lender in
                        respect of any Letter of Credit, the proportion
                        (expressed as a percentage) borne by that Lender's
                        Available Commitment to the Available Facility
                        immediately prior to the issue of that Letter of
                        Credit, adjusted to reflect any assignment or transfer
                        under this Agreement to or by that Lender;

                (iii)   "RENEWAL REQUEST" means a written notice delivered to
                        the Agent in accordance with Clause 6.7 (Renewal of a
                        Letter of Credit); and

                (iv)    "TERM" means each period determined under this
                        Agreement for which the Issuing Bank is under a
                        liability under a Letter of Credit.

        (b)     Any reference in this Agreement to:

                (i)     a "FINANCE PARTY" includes the Issuing Bank;

                (ii)    the Interest Period of a Letter of Credit will be
                        construed as a reference to the Term of that Letter of
                        Credit;

                (iii)   an amount borrowed includes any amount utilised by way
                        of Letter of Credit;

                (iv)    a Utilisation made or to be made to a Borrower
                        includes a Letter of Credit issued on its behalf;

                (v)     a Lender funding its participation in a Utilisation
                        includes a Lender participating in a Letter of Credit;

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                (vi)    amounts outstanding under this Agreement include
                        amounts outstanding under or in respect of any Letter
                        of Credit;

                (vii)   an outstanding amount of a Letter of Credit at any
                        time is the maximum amount that is or may be payable
                        by the Borrower that requested the issue of that
                        Letter of Credit at that time;

                (viii)  a Borrower "REPAYING" or "PREPAYING" a Letter of
                        Credit means:

                        (A)     that Borrower providing cash cover for that
                                Letter of Credit;

                        (B)     the maximum amount payable under the Letter of
                                Credit being reduced in accordance with its
                                terms; or

                        (C)     the Issuing Bank being satisfied that it has
                                no further liability under that Letter of
                                Credit,

                and the amount by which a Letter of Credit is repaid or
                prepaid under sub-paragraphs (viii)(A) and (viii)(B) above is
                the amount of the relevant cash cover or reduction; and

                (ix)    a Borrower providing "CASH COVER" for a Letter of
                        Credit means a Borrower paying an amount in the
                        currency of the Letter of Credit to an
                        interest-bearing account in the name of that Borrower
                        and the following conditions are met:

                        (A)     the account is with the Agent or the Issuing
                                Bank (if the cash cover is to be provided for
                                all the Lenders) or with a Lender (if the cash
                                cover is to be provided for that Lender);

                        (B)     withdrawals from the account may only be made
                                to pay a Finance Party amounts due and payable
                                to it under this Agreement in respect of that
                                Letter of Credit until no amount is or may be
                                outstanding under that Letter of Credit; and

                        (C)     that Borrower has executed a security
                                document, in form and substance satisfactory
                                to the Agent or the Finance Party with which
                                that account is held, creating a first ranking
                                security interest over that account.

        (c)     Clause 5 (Utilisation) does not apply to a Utilisation by way
                of Letter of Credit.

        (d)     In determining the amount of the Available Facility and a
                Lender's L/C Proportion of a proposed Letter of Credit for the
                purposes of this Agreement the Available Commitment of a
                Lender will be calculated ignoring any cash over provided for
                outstanding Letters of Credit.

6.2     FACILITY B
        An amount of up to US$50,000,000 of Facility B may be utilised by way
        of Letters of Credit.

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6.3     DELIVERY OF A UTILISATION REQUEST FOR LETTERS OF CREDIT
        A Borrower may request a Letter of Credit to be issued by delivery to
        the Agent of a duly completed Utilisation Request in the form of Part
        IB of Schedule 3 (Requests) not later than the Specified Time.

6.4     COMPLETION OF A UTILISATION REQUEST FOR LETTERS OF CREDIT
        Each Utilisation Request for a Letter of Credit is irrevocable and
        will not be regarded as having been duly completed unless:

        (a)     it specifies that it is for a Letter of Credit and identifies
                the Issuing Bank;

        (b)     the proposed Utilisation Date is a Business Day within the
                Availability Period;

        (c)     the currency and amount of the Letter of Credit comply with
                Clause 6.5 (Currency and amount);

        (d)     the form of Letter of Credit is attached;

        (e)     the Expiry Date of the Letter of Credit falls on or before the
                Termination Date;

        (f)     the delivery instructions for the Letter of Credit are
                specified; and

        (g)     it identifies the domicile of the beneficiary.

6.5     CURRENCY AND AMOUNT
        (a)     The currency specified in a Utilisation Request must be the
                Base Currency or an Optional Currency.

        (b)     The amount of the proposed Letter of Credit must be an amount
                whose Base Currency Amount is not more than the Available
                Facility and which is:

                (i)     if the currency selected is the Base Currency, a
                        minimum of US$25,000 or, if less, the Available
                        Facility; or

                (ii)    if the currency selected is an Optional Currency, the
                        minimum amount (and if required, integral multiple)
                        specified by the Agent pursuant to paragraph (b)(ii)
                        of Clause 4.3 (Conditions relating to Optional
                        Currencies) or, if less, the Available Facility.

6.6     ISSUE OF LETTERS OF CREDIT
        (a)     If the conditions set out in this Agreement have been met, the
                Issuing Bank shall issue the Letter of Credit on the
                Utilisation Date.

        (b)     The Issuing Bank will only be obliged to comply with paragraph
                (a) above if on the date of the Utilisation Request or Renewal
                Request and on the proposed Utilisation Date:

                (i)     in the case of a Letter of Credit renewed in
                        accordance with Clause 6.7 (Renewal of a Letter of
                        Credit), no Event of Default is continuing or would
                        result from the proposed Utilisation and, in the case
                        of any other Utilisation, no Default is continuing or
                        would result from the proposed Utilisation; and

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                (ii)    the Repeating Representations to be made by each
                        Obligor are true in all material respects.

        (c)     The amount of each Lender's participation in each Letter of
                Credit will be equal to the proportion borne by its Available
                Commitment to the Available Facility immediately prior to the
                issue of the Letter of Credit.

        (d)     The Agent shall determine the Base Currency Amount of each
                Letter of Credit which is to be issued in an Optional Currency
                and shall notify the Issuing Bank and each Lender of the
                details of the requested Letter of Credit and its
                participation in that Letter of Credit by the Specified Time.

6.7     RENEWAL OF A LETTER OF CREDIT
        (a)     A Borrower may request any Letter of Credit issued on its
                behalf be renewed by delivery to the Agent of a Renewal
                Request by the Specified Time.

        (b)     The Finance Parties shall treat any Renewal Request in the
                same way as a Utilisation Request for a Letter of Credit
                except that the conditions set out in paragraph (d) of Clause
                6.4 (Completion of a Utilisation Request for Letters of
                Credit) shall not apply.

        (c)     The terms of each renewed Letter of Credit shall be the same
                as those of the relevant Letter of Credit immediately prior to
                its renewal, except that:

                (i)     its amount may be less than the amount of the Letter
                        of Credit immediately prior to its renewal; and

                (ii)    its Term shall start on the date which was the Expiry
                        Date of the Letter of Credit immediately prior to its
                        renewal, and shall end on the proposed Expiry Date
                        specified in the Renewal Request.

        (d)     If the conditions set out in this Agreement have been met, the
                Issuing Bank shall amend and re-issue any Letter of Credit
                pursuant to a Renewal Request.

6.8     REVALUATION OF LETTERS OF CREDIT
        (a)     If any Letter of Credit is denominated in an Optional
                Currency, the Agent shall at three monthly intervals after the
                date of the Letter of Credit, recalculate the Base Currency
                Amount of that Letter of Credit by notionally converting into
                the Base Currency the outstanding amount of that Letter of
                Credit on the basis of the Agent's Spot Rate of Exchange on
                the date of calculation.

        (b)     A Borrower shall, if requested by the Agent within five days
                of any calculation under paragraph (a) above, ensure that
                within three Business Days sufficient Facility B Utilisations
                are prepaid to prevent the Base Currency Amount of the
                Facility B Utilisations exceeding the Total Facility B
                Commitments following any adjustment to a Base Currency Amount
                under paragraph (a) above.

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7.      LETTERS OF CREDIT

7.1     IMMEDIATELY PAYABLE
        If a Letter of Credit or any amount outstanding under a Letter of
        Credit becomes payable and no claim (as defined in paragraph (a) of
        Clause 7.4 (Claims under a Letter of Credit) has been made in respect
        of that Letter of Credit or amount outstanding under that Letter of
        Credit, the Borrower that requested the issue of that Letter of Credit
        shall repay or prepay that amount immediately.

7.2     ASSIGNMENTS AND TRANSFERS
        (a)     Notwithstanding any other provision of this Agreement, the
                consent of the relevant Issuing Bank is required for any
                assignment or transfer of any Lender's rights and/or
                obligations under Facility B.

        (b)     If paragraph (a) and the conditions and procedure for transfer
                specified in Clause 26 (Changes to the Lenders) are satisfied,
                then on the Transfer Date the Issuing Bank and the New Lender
                shall acquire the same rights and assume the same obligations
                between themselves as they would have acquired and assumed had
                the New Lender been an Original Lender with the rights and/or
                obligations acquired or assumed by it as a result of the
                transfer and to that extent the relevant Issuing Bank and the
                Existing Lender shall each be released from further
                obligations to each other under this Agreement.

7.3     FEE PAYABLE IN RESPECT OF LETTERS OF CREDIT
        (a)     Each Borrower shall pay to the relevant Issuing Bank a
                fronting fee in respect of each Letter of Credit requested by
                it and issued by such Issuing Bank in the amount and at the
                times agreed in writing between the relevant Issuing Bank and
                the Company. A reference in this Agreement to a Fee Letter
                shall include any written agreement referred to in this
                paragraph.

        (b)     Each Borrower shall pay to the Agent (for the account of each
                Lender) a letter of credit fee in the Base Currency computed
                at the same rate as the Margin on the outstanding amount of
                each Letter of Credit requested by it for the period from the
                issue of that Letter of Credit until its Expiry Date. This fee
                shall be distributed according to each Lender's L/C Proportion
                of that Letter of Credit.

        (c)     The accrued letter of credit fee on a Letter of Credit shall
                be payable on the first day of each successive period of three
                months (or such shorter period as shall end on the Expiry Date
                for that Letter of Credit) starting on the date of issue of
                that Letter of Credit.

        (d)     If a Borrower cash covers any part of a Letter of Credit then:

                (i)     the fronting fee payable to the relevant Issuing Bank
                        and the letter of credit fee payable for the account
                        of each Lender shall continue to be payable until the
                        expiry of the Letter of Credit;

                (ii)    the Borrower will be entitled to withdraw the interest
                        accrued on the cash cover to pay those fees.

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7.4     CLAIMS UNDER A LETTER OF CREDIT
        (a)     Each Borrower irrevocably and unconditionally authorises the
                relevant Issuing Bank to pay any claim made or purported to be
                made under a Letter of Credit requested by it and which
                appears on its face to be in order (a "CLAIM").

        (b)     Each Borrower which requested a Letter of Credit shall
                immediately on demand pay to the Agent for the relevant
                Issuing Bank an amount equal to the amount of any claim under
                that Letter of Credit.

        (c)     Each Borrower acknowledges that the relevant Issuing Bank:

                (i)     is not obliged to carry out any investigation or seek
                        any confirmation from any other person before paying a
                        claim; and

                (ii)    deals in documents only and will not be concerned with
                        the legality of a claim or any underlying transaction
                        or any available set-off, counterclaim or other
                        defence of any person.

        (d)     The obligations of a Borrower under this Clause will not be
                affected by:

                (i)     the sufficiency, accuracy or genuineness of any claim
                        or any other document; or

                (ii)    any incapacity of, or limitation on the powers of, any
                        person signing a claim or other document.

7.5     INDEMNITIES
        (a)     Each Borrower shall immediately on demand indemnify an Issuing
                Bank against any cost, loss or liability incurred by such
                Issuing Bank (otherwise than by reason of such Issuing Bank's
                gross negligence or wilful misconduct) in acting as the
                Issuing Bank under any Letter of Credit requested by that
                Borrower.

        (b)     Each Lender shall (according to its L/C Proportion)
                immediately on demand indemnify an Issuing Bank against any
                cost, loss or liability incurred by such Issuing Bank
                (otherwise than by reason of such Issuing Bank's gross
                negligence or wilful misconduct) in acting as the Issuing Bank
                under any Letter of Credit (unless such Issuing Bank has been
                reimbursed by an Obligor pursuant to a Finance Document).

        (c)     If any Lender is not permitted (by its constitutional
                documents or any applicable law) to comply with paragraph (b)
                above), then that Lender will not be obliged to comply with
                paragraph (b) and shall instead be deemed to have taken, on
                the date the Letter of Credit is issued (or if later, on the
                date the Lender's participation in the Letter of Credit is
                transferred or assigned to the Lender in accordance with the
                terms of this Agreement), an undivided interest and
                participation in the Letter of Credit in an amount equal to
                its L/C Proportion of that Letter of Credit. On receipt of
                demand from the Agent, that Lender shall pay to the Agent (for
                the account of the Issuing Bank) an amount equal to its L/C
                Proportion of the amount demanded under paragraph (b) above.

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        (d)     The Borrower which requested a Letter of Credit shall
                immediately on demand reimburse any Lender for any payment it
                makes to an Issuing Bank under this Clause 7.5 (Indemnities)
                in respect of that Letter of Credit.

        (e)     The obligations of each Lender under this Clause are
                continuing obligations and will extend to the ultimate balance
                of sums payable by that Lender in respect of any Letter of
                Credit, regardless of any intermediate payment or discharge in
                whole or in part.

        (f)     The obligations of any Lender or any Borrower under this
                Clause will not be affected by any act, omission, matter or
                thing which, but for this Clause, would reduce, release or
                prejudice any of its obligations under this Clause (without
                limitation and whether or not known to it or any other person)
                including:

                (i)     any time, waiver or consent granted to, or composition
                        with, any Obligor, any beneficiary under a Letter of
                        Credit or other person;

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

                (iii)   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, any beneficiary under a Letter
                        of Credit or other person or 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;

                (iv)    any incapacity or lack of power, authority or legal
                        personality of or dissolution or change in the members
                        or status of an Obligor, any beneficiary under a
                        Letter of Credit or any other person;

                (v)     any amendment (however fundamental) or replacement of
                        a Finance Document, any Letter of Credit or any other
                        document or security;

                (vi)    any unenforceability, illegality or invalidity of any
                        obligation of any person under any Finance Document,
                        any Letter of Credit or any other document or
                        security; or

                (vii)   any insolvency or similar proceedings.

7.6     RIGHTS OF CONTRIBUTION
        No Obligor will be entitled to any right of contribution or indemnity
        from any Finance Party in respect of any payment it may make under
        this Clause 7.

7.7     ROLE OF THE ISSUING BANK
        (a)     Nothing in this Agreement constitutes an Issuing Bank as a
                trustee or fiduciary of any other person.

        (b)     An Issuing Bank shall not be bound to account to any Lender
                for any sum or the profit element of any sum received by it
                for its own account.

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        (c)     An Issuing Bank may accept deposits from, lend money to and
                generally engage in any kind of banking or other business with
                any member of the Group.

        (d)     An Issuing Bank may rely on:

                (i)     any representation, notice or document believed by it
                        to be genuine, correct and appropriately authorised;
                        and

                (ii)    any statement made by a director, authorised signatory
                        or employee of any person regarding any matters which
                        may reasonably be assumed to be within his knowledge
                        or within his power to verify.

        (e)     An Issuing Bank may engage, pay for and rely on the advice or
                services of any lawyers, accountants, surveyors or other
                experts.

        (f)     An Issuing Bank may act in relation to the Finance Documents
                through its personnel and agents.

        (g)     An Issuing Bank is not responsible for:

                (i)     the adequacy, accuracy and/or completeness of any
                        information (whether oral or written) provided by the
                        Agent, any Party (including itself), or any other
                        person under or in connection with any Finance
                        Document, the transactions contemplated by the Finance
                        Documents or any other agreement, arrangement or
                        document entered into, made or executed in
                        anticipation of, under or in connection with any
                        Finance Document; or

                (ii)    the legality, validity, effectiveness, adequacy or
                        enforceability of any Finance Document or any other
                        agreement, arrangement or document entered into, made
                        or executed in anticipation of, under or in connection
                        with any Finance Document.

7.8     EXCLUSION OF LIABILITY
        (a)     Without limiting paragraph (b) below, an Issuing Bank will not
                be liable for any action taken by it under or in connection
                with any Finance Document, unless directly caused by its gross
                negligence or wilful misconduct.

        (b)     No Party (other than an Issuing Bank) may take any proceedings
                against any officer, employee or agent of an Issuing Bank in
                respect of any claim it might have against the Issuing Bank or
                in respect of any act or omission of any kind by that officer,
                employee or agent in relation to any Finance Document.

7.9     CREDIT APPRAISAL BY THE LENDERS
        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 to the relevant Issuing Bank that it
        has been, and will continue to be, solely responsible for making its
        own independent appraisal and investigation of all risks arising under
        or in connection with any Finance Document, including but not limited
        to, those listed in paragraphs (a) to (d) of Clause 28.14 (Credit
        appraisal by the Secured Parties).

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7.10    ADDRESS FOR NOTICES
        The address and fax number (and the department or officer, if any, for
        whose attention the communication is to be made) of the relevant
        Issuing Bank for any communication or document to be made or delivered
        under or in connection with the Finance Documents is that notified in
        writing to the Agent prior to the date of this Agreement or any
        substitute address, fax number, department or officer as the Issuing
        Bank may notify to the Agent by not less than five Business Days'
        notice.

7.11    AMENDMENTS AND WAIVERS
        Notwithstanding any other provision of this Agreement, an amendment or
        waiver which relates to the rights or obligations of the Issuing Bank
        may not be effected without the consent of the relevant Issuing Bank.

8.      OPTIONAL CURRENCIES

8.1     SELECTION OF CURRENCY
        (a)     A Borrower (or the Company on behalf of a Borrower) shall
                select the currency of a Utilisation:

                (i)     (in the case of an initial Utilisation) in a
                        Utilisation Request; and

                (ii)    (afterwards in relation to a Facility A Loan made to
                        it) in a Selection Notice.

        (b)     If a Borrower (or the Company on behalf of a Borrower) fails
                to issue a Selection Notice in relation to a Facility A Loan,
                the Loan will remain denominated for its next Interest Period
                in the same currency in which it is then outstanding.

        (c)     If a Borrower (or the Company on behalf of a Borrower) issues
                a Selection Notice requesting a change of currency and the
                first day of the requested Interest Period is not a Business
                Day for the new currency, the Agent shall promptly notify the
                Borrower and the Lenders and the Loan will remain in the
                existing currency (with Interest Periods running from one
                Business Day until the next Business Day) until the next day
                which is a Business Day for both currencies, on which day the
                requested Interest Period will begin.

8.2     UNAVAILABILITY OF A CURRENCY
        If before the Specified Time on any Quotation Day:

        (a)     a Lender notifies the Agent that the Optional Currency
                requested is not readily available to it in the amount
                required; or

        (b)     a Lender notifies the Agent that compliance with its
                obligation to participate in a Loan in the proposed Optional
                Currency would contravene a law or regulation applicable to
                it,

        the Agent will give notice to the relevant Borrower to that effect by
        the Specified Time on that day. In this event, any Lender that gives
        notice pursuant to this Clause 8.2 will be required to participate in
        the Loan in the Base Currency (in an amount equal to that Lender's
        proportion of the Base Currency Amount, or in respect of a Rollover
        Loan, an

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        amount equal to that Lender's proportion of the Base Currency Amount
        of the Rollover Loan that is due to be made) and its participation
        will be treated as a separate Loan denominated in the Base Currency
        during that Interest Period.

8.3     CHANGE OF CURRENCY
        (a)     If a Facility A Loan is to be denominated in different
                currencies during two successive Interest Periods:

                (i)     if the currency for the second Interest Period is an
                        Optional Currency, the amount of the Loan in that
                        Optional Currency will be calculated by the Agent as
                        the amount of that Optional Currency equal to the Base
                        Currency Amount of the Loan at the Agent's Spot Rate
                        of Exchange at the Specified Time;

                (ii)    if the currency for the second Interest Period is the
                        Base Currency, the amount of the Loan will be equal to
                        the Base Currency Amount;

                (iii)   (unless the Agent and the Borrower agree otherwise in
                        accordance with paragraph (b) below) the Borrower that
                        has borrowed the Loan shall repay it on the last day
                        of the first Interest Period in the currency in which
                        it was denominated for that Interest Period; and

                (iv)    (subject to Clause 4.2 (Further conditions precedent))
                        the Lenders shall re-advance the Loan in the new
                        currency in accordance with Clause 8.5 (Agent's
                        calculations).

        (b)     If the Agent and the Borrower that has borrowed the Facility A
                Loan agree, the Agent shall:

                (i)     apply the amount paid to it by the Lenders pursuant to
                        paragraph (a)(iv) above (or so much of that amount as
                        is necessary) in or towards purchase of an amount in
                        the currency in which the Facility A Loan is
                        outstanding for the first Interest Period; and

                (ii)    use the amount it purchases in or towards satisfaction
                        of the relevant Borrower's obligations under paragraph
                        (a)(iii) above.

        (c)     If the amount purchased by the Agent pursuant to paragraph
                (b)(i) above is less than the amount required to be repaid by
                the relevant Borrower, the Agent shall promptly notify that
                Borrower and that Borrower shall, on the last day of the first
                Interest Period, pay an amount to the Agent (in the currency
                of the outstanding Facility A Loan for the first Interest
                Period) equal to the difference.

        (d)     If any part of the amount paid to the Agent by the Lenders
                pursuant to paragraph (a)(iv) above is not needed to purchase
                the amount required to be repaid by the relevant Borrower, the
                Agent shall promptly notify that Borrower and pay that
                Borrower, on the last day of the first Interest Period that
                part of that amount (in the new currency).

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8.4     SAME OPTIONAL CURRENCY DURING SUCCESSIVE INTEREST PERIODS
        (a)     If a Facility A Loan is to be denominated in the same Optional
                Currency during two successive Interest Periods, the Agent
                shall calculate the amount of the Facility A Loan in the
                Optional Currency for the second of those Interest Periods (by
                calculating the amount of Optional Currency equal to the Base
                Currency Amount of that Facility A Loan at the Agent's Spot
                Rate of Exchange at the Specified Time) and (subject to
                paragraph (b) below):

                (i)     if the amount calculated is less than the existing
                        amount of that Facility A Loan in the Optional
                        Currency during the first Interest Period, promptly
                        notify the Borrower that has borrowed that Facility A
                        Loan and that Borrower shall pay, on the last day of
                        the first Interest Period, an amount equal to the
                        difference; or

                (ii)    if the amount calculated is more than the existing
                        amount of that Facility A Loan in the Optional
                        Currency during the first Interest Period, promptly
                        notify each Lender and, if no Event of Default is
                        continuing, each Lender shall, on the last day of the
                        first Interest Period, pay its participation in an
                        amount equal to the difference.

        (b)     If the calculation made by the Agent pursuant to paragraph (a)
                above shows that the amount of the Facility A Loan in the
                Optional Currency for the second of those Interest Periods
                converted into the Base Currency at the Agent's Spot Rate of
                Exchange at the Specified Time has increased or decreased by
                less than 5 per cent. compared to its Base Currency Amount
                (taking into account any payments made pursuant to paragraph
                (a) above), no notification shall be made by the Agent and no
                payment shall be required under paragraph (a) above.

8.5     AGENT'S CALCULATIONS
        (a)     All calculations made by the Agent pursuant to this Clause 8
                will take into account any repayment, prepayment,
                consolidation or division of Facility A Loans to be made on
                the last day of the first Interest Period.

        (b)     Each Lender's participation in a Loan will, subject to
                paragraph (a) above, be determined in accordance with
                paragraph (b) of Clause 5.4 (Lenders' participation).

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                                   SECTION 4
                    REPAYMENT, PREPAYMENT AND CANCELLATION

9.      REPAYMENT

9.1     REPAYMENT OF FACILITY A LOANS
        (a)     Each Borrower shall repay the Facility A Loans made to it in
                instalments by repaying on each Repayment Date the amount set
                out opposite each Repayment Date below:

                REPAYMENT DATE                          REPAYMENT INSTALMENT

                On the first anniversary of the date    US$15,000,000
                of this Agreement

                On the second anniversary of the date   US$15,000,000
                of this Agreement

                On the third anniversary of the date    US$15,000,000
                of this Agreement

                On the fourth anniversary of the date   US$15,000,000
                of this Agreement

                On the fifth anniversary of the date    An amount in dollars
                of this Agreement                       equal to the Facility
                                                        A Loan then outstanding
                                                        in relation to the
                                                        relevant Borrower shall
                                                        be repaid in full.

        (b)     Any repayment or prepayment of a Facility A Loan denominated
                in an Optional Currency shall reduce the amount of that
                Facility A Loan by the amount of that Optional Currency repaid
                and shall reduce the Base Currency Amount of that Facility A
                Loan proportionally.

        (c)     No Borrower may reborrow any part of Facility A which is
                repaid.

9.2     REPAYMENT OF FACILITY B LOANS
        (a)     Each Borrower which has drawn a Facility B Loan shall repay
                that Loan on the last day of its Interest Period and, in any
                event, shall repay in full an amount in dollars equal to the
                Facility B Loan then outstanding in relation to the relevant
                Borrower no later than the Termination Date.

        (b)     Any reduction of the Total Facility B Commitments shall reduce
                rateably the Commitment of each Lender.

        (c)     A Borrower may reborrow any part of Facility B which is
                repaid.

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10.     PREPAYMENT AND CANCELLATION

10.1    ILLEGALITY
        (a)     If, at any time, it is or will become unlawful in any
                applicable jurisdiction for a Lender to perform any of its
                obligations as contemplated by this Agreement or to fund or
                maintain its participation in any Utilisation:

                (i)     that Lender shall promptly notify the Agent upon
                        becoming aware of that event;

                (ii)    upon the Agent notifying the Company, the Commitment
                        of that Lender will be immediately cancelled; and

                (iii)   each Borrower shall repay that Lender's participation
                        in the Utilisations made to that Borrower on the last
                        day of the Interest Period for each Utilisation
                        occurring after the Agent has notified the Company or,
                        if earlier, the date specified by the Lender in the
                        notice delivered to the Agent.

        (b)     If, at any time, it is or will become unlawful for the Issuing
                Bank to issue or leave outstanding any Letter of Credit the
                Issuing Bank shall promptly notify the Agent upon becoming
                aware of that event and upon the Agent notifying the Company,
                Facility B shall cease to be available for the issue of
                Letters of Credit and each Borrower shall use its best
                endeavours to procure the release of each Letter of Credit
                requested by that Borrower and outstanding at such time.

10.2    CHANGE OF CONTROL
        (a)     As of the Akzo Nobel Retirement, if Solutia Inc. or any of its
                Subsidiaries cease to control, either directly or indirectly:

                (i)     the Company;

                (ii)    Flexsys Rubber Chemicals Limited; or

                (iii)   the partnership interests in Flexsys America L.P.

                (being a "CHANGE OF CONTROL"), the Company and the relevant
                Obligor shall immediately notify the Agent.

        (b)     For the purposes of paragraph (a) of this Clause 10.2, the
                cessation or change of ownership of the Company, Flexsys
                America L.P. or Flexsys Rubber Chemicals Limited that does not
                have an adverse effect (whether legal or otherwise) on the
                nature of any transaction Security or any further security
                granted (or that may be granted) pursuant to the Finance
                Documents or on the rights or remedies of the Lenders under
                any such Transaction Security or other such Security or under
                the Finance Documents, shall be disregarded, PROVIDED THAT the
                Group remains wholly owned by Solutia Inc, or any of its
                subsidiaries.

                For the purposes of paragraph (a) above "CONTROL" means:

                (i)     the power (whether by way of ownership of shares,
                        proxy, contract, agency or otherwise) to:

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                        (A)     cast, or control the casting of, more than one
                                half of the maximum number of votes that might
                                be cast at a general meeting of the relevant
                                Obligor; or

                        (B)     appoint or remove all, or the majority, of the
                                directors or other equivalent officers of the
                                relevant Obligor; or

                        (C)     give directions with respect to the operating
                                and financial policies of the Company which
                                the directors or other equivalent officers of
                                the relevant Obligor are obliged to comply
                                with; or

                        (D)     the holding more than one half of the issued
                                share capital of the relevant Obligor
                                (excluding any part of that issued share
                                capital that carries no right to participate
                                beyond a specified amount in a distribution of
                                either profits or capital).

        (c)     If a Lender so requires and notifies the Agent within 30 days
                of the Company notifying the Agent of a Change of Control, the
                Agent shall, by not less than 30 days notice to the Company,
                cancel the Commitment of that Lender and declare the
                participation of that Lender in all outstanding Utilisations,
                together with accrued interest, and all other amounts accrued
                under the Finance Documents immediately due and payable,
                whereupon the Commitment of that Lender will be cancelled and
                all such outstanding amounts will become immediately due and
                payable.

10.3    VOLUNTARY CANCELLATION
        The Company may, if it gives notice to the Agent by no later than
        11:00 am on the Business Day immediately preceding the day the
        cancellation is to take effect, cancel the whole or any part (being a
        minimum amount of US$10,000,000 and the integral multiples thereof) of
        the undrawn Commitments under the Facility B Loan. Any cancellation
        under this Clause 10.3 shall reduce the Commitments of the Lenders
        rateably under that Facility.

10.4    VOLUNTARY PREPAYMENT OF FACILITY A LOANS
        (a)     A Borrower to which a Facility A Loan has been made may, if it
                gives the Agent not less than 5 Business Days' (or such
                shorter period as the Agent acting on instruction of the
                Majority Lenders may agree) prior notice, prepay the whole or
                any part of any Facility A Loan (but, if in part, being an
                amount that reduces the Base Currency Amount of the Facility A
                Loan by a minimum amount of US$1,000,000 and integral
                multiples thereof).

        (b)     A Facility A Loan may only be prepaid on the last day of an
                Interest Period (or, if earlier, the day on which the
                applicable Available Facility is zero).

        (c)     Any prepayment under this Clause 10 shall satisfy the
                obligations under Clause 9.1 (Repayment of Facility A Loans)
                pro rata for each repayment instalment prior to the occurrence
                of a Default and, thereafter, in inverse chronological order.

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10.5    RIGHT OF REPAYMENT AND CANCELLATION IN RELATION TO A SINGLE LENDER
        (a)     If:

                (i)     any sum payable to any Lender by an Obligor is
                        required to be increased under paragraph (c) of Clause
                        15.2 (Tax gross-up); or

                (ii)    any Lender claims indemnification from the Company
                        under Clause 15.3 (Tax indemnity) or Clause 16.1
                        (Increased costs); or

                (iii)   any Lender notifies the Agent of its Additional Cost
                        Rate under paragraph 3 of Schedule 4 (Mandatory Cost
                        Formulae);

                the Company may, whilst (in the case of paragraphs (i) and
                (ii) above) the circumstance giving rise to the requirement or
                indemnification continues or (in the case of paragraph (iii)
                above) that Additional Cost Rate is greater than zero, give
                the Agent notice of cancellation of the Commitment of that
                Lender and its intention to procure the repayment of that
                Lender's participation in the Utilisations.

        (b)     On receipt of a notice referred to in paragraph (a) above, the
                Commitment of that Lender shall immediately be reduced to
                zero.

        (c)     On the last day of each Interest Period which ends after the
                Company has given notice under paragraph (a) above (or, if
                earlier, the date specified by the Company in that notice),
                each Borrower to which a Utilisation is outstanding shall
                repay that Lender's participation in that Utilisation.

10.6    RESTRICTIONS
        (a)     Any notice of cancellation or prepayment given by any Party
                under this Clause 10 shall be irrevocable and, unless a
                contrary indication appears in this Agreement, shall specify
                the date or dates upon which the relevant cancellation or
                prepayment is to be made and the amount of that cancellation
                or prepayment.

        (b)     Any prepayment under this Agreement shall be made together
                with accrued interest on the amount prepaid and, subject to
                any Break Costs, without premium or penalty.

        (c)     No Borrower may reborrow any part of Facility A which is
                prepaid.

        (d)     Unless a contrary indication appears in this Agreement, any
                part of Facility B which is prepaid may be reborrowed in
                accordance with the terms of this Agreement.

        (e)     The Borrowers shall not repay or prepay all or any part of the
                Utilisations or cancel all or any part of the Commitments
                except at the times and in the manner expressly provided for
                in this Agreement.

        (f)     No amount of the Total Commitments cancelled under this
                Agreement may be subsequently reinstated.

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        (g)     If the Agent receives a notice under this Clause 10 it shall
                promptly forward a copy of that notice to either the Company
                or the affected Lender, as appropriate.

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                                   SECTION 5
                             COSTS OF UTILISATION

11.     INTEREST

11.1    CALCULATION OF INTEREST
        The rate of interest on each Loan for each Interest Period is the
        percentage rate per annum which is the aggregate of the applicable:

        (a)     Margin;

        (b)     LIBOR or, in relation to any Loan in euro, EURIBOR; and

        (c)     Mandatory Cost, if any.

11.2    PAYMENT OF INTEREST
        The Borrower to which a Loan has been made shall pay accrued interest
        on that Loan on the last day of each Interest Period (and, if the
        Interest Period is longer than six Months, on the dates falling at six
        Monthly intervals after the first day of the Interest Period).

11.3    DEFAULT INTEREST
        (a)     To the extent permitted under applicable law, if an Obligor
                fails to pay any amount payable by it under a Finance Document
                on its due date, interest shall accrue on the overdue amount
                from the due date up to the date of actual payment (both
                before and after judgment) at a rate which, subject to
                paragraph (b) below, is one per cent higher than 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 successive Interest
                Periods, each of a duration selected by the Agent (acting
                reasonably). Any interest accruing under this Clause 11.3
                shall be immediately payable by the Obligor on demand by the
                Agent.

        (b)     If any overdue amount consists of all or part of a Loan which
                became due on a day which was not the last day of an Interest
                Period relating to that Loan:

                (i)     the first Interest Period for that overdue amount
                        shall have a duration equal to the unexpired portion
                        of the current Interest Period relating to that Loan;
                        and

                (ii)    the rate of interest applying to the overdue amount
                        during that first Interest Period shall be one per
                        cent. higher than the rate which would have applied if
                        the overdue amount had not become due.

        (c)     To the extent permitted under applicable law, default interest
                (if unpaid) arising on an overdue amount will be compounded
                with the overdue amount at the end of each Interest Period
                applicable to that overdue amount but will remain immediately
                due and payable.

11.4    NOTIFICATION OF RATES OF INTEREST
        The Agent shall promptly notify the Lenders and the relevant Borrower
        of the determination of a rate of interest under this Agreement.

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12.     INTEREST PERIODS

12.1    SELECTION OF INTEREST PERIODS
        (a)     A Borrower (or the Company on behalf of a Borrower) may select
                an Interest Period for a Loan in the Utilisation Request for
                that Loan or (if the Loan has already been borrowed) in a
                Selection Notice.

        (b)     Each Selection Notice for a Loan is irrevocable and must be
                delivered to the Agent by the Borrower (or the Company on
                behalf of a Borrower) to which that Loan was made not later
                than the Specified Time.

        (c)     If a Borrower (or the Company) fails to deliver a Selection
                Notice to the Agent in accordance with paragraph (b) above,
                the relevant Interest Period will, subject to Clause 12.2
                (Changes to Interest Periods), be one Month.

        (d)     Subject to this Clause 12, a Borrower (or the Company) may
                select an Interest Period of one, three or six Months or any
                other period agreed between the Company and the Agent (acting
                on the instructions of all the Lenders). In addition, in
                relation to Facility A, a Borrower (or the Company on its
                behalf) may select an Interest Period of a period of less than
                one Month, if necessary to ensure that there are sufficient
                Facility A Loans (with an aggregate Base Currency Amount equal
                to or greater than the Repayment Instalment) which have an
                Interest Period ending on a Facility A Repayment Date for the
                Borrowers to make the Repayment Instalment due on that date.

        (e)     An Interest Period for a Loan shall not extend beyond the
                Termination Date applicable to its Facility.

        (f)     Each Interest Period for a Loan shall start on the Utilisation
                Date or (if already made) on the last day of its preceding
                Interest Period.

12.2    CHANGES TO INTEREST PERIODS
        (a)     Prior to determining the interest rate for a Facility A Loan,
                the Agent may shorten an Interest Period for any Facility A
                Loan to ensure there are sufficient Facility A Loans (with an
                aggregate Base Currency Amount equal to or greater than the
                Repayment Instalment) which have an Interest Period ending on
                a Facility A Repayment Date for the Borrowers to make the
                Repayment Instalment due on that date.

        (b)     If the Agent makes any of the changes to an Interest Period
                referred to in this Clause 12.2, it shall promptly notify the
                Company and the Lenders.

12.3    NON-BUSINESS DAYS
        If an Interest Period would otherwise end on a day which is not a
        Business Day, that Interest Period will instead end on the next
        Business Day in that calendar month (if there is one) or the preceding
        Business Day (if there is not).

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13.     CHANGES TO THE CALCULATION OF INTEREST

13.1    ABSENCE OF QUOTATIONS
        Subject to Clause 13.2 (Market disruption), if LIBOR or, if
        applicable, EURIBOR is to be determined by reference to the Reference
        Banks but a Reference Bank does not supply a quotation by the
        Specified Time on the Quotation Day, the applicable LIBOR or EURIBOR
        shall be determined on the basis of the quotations of the remaining
        Reference Banks.

13.2    MARKET DISRUPTION
        (a)     If a Market Disruption Event occurs in relation to a Loan for
                any Interest Period, then the rate of interest on each
                Lender's share of that Loan for the Interest Period shall be
                the percentage rate per annum which is the sum of:

                (i)     the Margin;

                (ii)    the rate notified to the Agent by that Lender as soon
                        as practicable and in any event before interest is due
                        to be paid in respect of that Interest Period, to be
                        that which expresses as a percentage rate per annum
                        the cost to that Lender of funding its participation
                        in that Loan from whatever source it may reasonably
                        select; and

                (iii)   the Mandatory Cost, if any, applicable to that
                        Lender's participation in the Loan.

        (b)     In this Agreement "MARKET DISRUPTION EVENT" means:

                (i)     at or about noon on the Quotation Day for the relevant
                        Interest Period the Screen Rate is not available and
                        none or only one of the Reference Banks supplies a
                        rate to the Agent to determine LIBOR or, if
                        applicable, EURIBOR for the relevant currency and
                        Interest Period; or

                (ii)    before close of business in London on the Quotation
                        Day for the relevant Interest Period, the Agent
                        receives notifications from a Lender or Lenders (whose
                        participations in a Loan exceed 35 per cent. of that
                        Loan) that the cost to it of obtaining matching
                        deposits in the Relevant Interbank Market would be in
                        excess of LIBOR or, if applicable, EURIBOR.

13.3    ALTERNATIVE BASIS OF INTEREST OR FUNDING
        (a)     If a Market Disruption Event occurs and the Agent or the
                Company so requires, the Agent and the Company shall enter
                into negotiations (for a period of not more than thirty days)
                with a view to agreeing a substitute basis for determining the
                rate of interest.

        (b)     Any alternative basis agreed pursuant to paragraph (a) above
                shall, with the prior consent of all the Lenders and the
                Company, be binding on all Parties.

13.4    BREAK COSTS
        (a)     Each Borrower shall, within three Business Days of demand by a
                Finance Party, pay to that Finance Party its Break Costs
                attributable to all or any part of a Loan

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                or Unpaid Sum being paid by that Borrower on a day other than
                the last day of an Interest Period for that Loan or Unpaid
                Sum.

        (b)     Each Lender shall, as soon as reasonably practicable after a
                demand by the Agent, provide a certificate confirming the
                amount of its Break Costs for any Interest Period in which
                they accrue.

14.     FEES

14.1    COMMITMENT FEE
        (a)     The Company shall pay to the Agent (for the account of each
                Lender) a fee computed at the rate of 40 per cent. per annum
                of the Margin applicable to Facility B on the daily undrawn
                and uncancelled Available Commitment under Facility B accruing
                from the date of this Agreement until the end of the Facility
                B Availability Period.

        (b)     The accrued commitment fee is payable quarterly in arrears, on
                the last day of the Facility B Availability Period and, if
                cancelled in full, on the cancelled amount of the Facility B
                Commitment at the time the cancellation is effective.

14.2    UTILISATION FEE
        The Company shall pay to the Agent (for the account of each Lender) a
        utilisation fee at the rate of:

        (a)     0.05 per cent. per annum on the Facility B Loans then
                outstanding, payable quarterly in arrears whenever the
                aggregate of the Facility B Loans borrowed but not yet repaid
                are equal to or greater than 33.33 per cent. of the Total
                Facility B Commitments.

        (b)     0.15 per cent. per annum on the Facility B Loans then
                outstanding, payable quarterly in arrears whenever the
                aggregate of the Facility B Loans borrowed but not yet repaid
                are equal to or greater than 66.67 per cent. of the Total
                Facility B Commitments.

14.3    FRONT END FEE
        The Company shall pay to the Arrangers a front end fee in the amount
        and at the times agreed in a Fee Letter.

14.4    AGENCY/SECURITY TRUSTEE FEE
        The Company shall pay to the Agent (for its own account) an
        agency/security trustee fee in the amount and at the times agreed in a
        Fee Letter.

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                                   SECTION 6
                        ADDITIONAL PAYMENT OBLIGATIONS

15.     TAX GROSS UP AND INDEMNITIES

15.1    DEFINITIONS
        (a)     In this Agreement:

                "PROTECTED PARTY" means a Finance Party which is or will be
                subject to any liability, or required to make any payment, for
                or on account of Tax in relation to a sum received or
                receivable (or any sum deemed for the purposes of Tax to be
                received or receivable) under a Finance Document.

                "TAX CREDIT" means a credit against, relief or remission for,
                or repayment of any Tax.

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

                "TAX PAYMENT" means either the increase in a payment made by
                an Obligor to a Finance Party under Clause 15.2 (Tax gross-up)
                or a payment under Clause 15.3 (Tax indemnity).

        (b)     Unless a contrary indication appears, in this Clause 15 a
                reference to "determines" or "determined" means a
                determination made in the absolute discretion of the person
                making the determination.

15.2    TAX GROSS-UP
        (a)     Each Obligor shall 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)     The Company shall promptly upon becoming aware that an Obligor
                must make a Tax Deduction (or that there is any change in the
                rate or the basis of a Tax Deduction) notify the Agent
                accordingly. Similarly, a Lender shall notify the Agent on
                becoming so aware in respect of a payment payable to that
                Lender. If the Agent receives such notification from a Lender
                it shall notify the Company and that Obligor.

        (c)     If a Tax Deduction is required by law to be made by an
                Obligor, the amount of the payment due from that Obligor shall
                be increased to an amount which (after making any Tax
                Deduction) leaves an amount equal to the payment which would
                have been due if no Tax Deduction had been required.

        (d)     An Obligor is not obliged to pay any additional amounts
                pursuant to paragraph (c) above in respect of any Tax
                Deduction which would not have been required if the relevant
                Finance Party had complied with its obligations under
                paragraph (g) below.

        (e)     If an Obligor is required to make a Tax Deduction, that
                Obligor shall make that Tax Deduction and any payment required
                in connection with that Tax

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                Deduction within the time allowed and in the minimum amount
                required by law.

        (f)     Within thirty days of making either a Tax Deduction or any
                payment required in connection with that Tax Deduction, the
                Obligor making that Tax Deduction shall deliver to the Agent
                for the Finance Party entitled to the payment evidence
                reasonably satisfactory to that Finance Party that the Tax
                Deduction has been made or (as applicable) any appropriate
                payment paid to the relevant taxing authority.

        (g)     A Finance Party and each Obligor which makes a payment to
                which that Finance Party is entitled shall co-operate promptly
                in completing any procedural formalities necessary for that
                Obligor to obtain authorisation to make that payment without a
                Tax Deduction on time.

15.3    TAX INDEMNITY
        (a)     The Company shall (within three Business Days of demand by the
                Agent) pay to a Protected Party an amount equal to the loss,
                liability or cost which that Protected Party determines will
                be or has been (directly or indirectly) suffered for or on
                account of Tax by that Protected Party in respect of a Finance
                Document or the transactions occurring under such Finance
                Document.

        (b)     Paragraph (a) above shall not apply:

                (i)     with respect to any Tax assessed on a Finance Party:

                        (A)     under the law of the jurisdiction in which
                                that Finance Party is incorporated or, if
                                different, the jurisdiction (or jurisdictions)
                                in which that Finance Party is treated as
                                resident for tax purposes; or

                        (B)     under the law of the jurisdiction in which
                                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 (but not any
                        sum deemed to be received or receivable) by that
                        Finance Party; or

                (ii)    to the extent a loss, liability or cost:

                        (A)     is compensated for by an increased payment
                                under Clause 15.2 (Tax gross-up); or

                        (B)     would have been compensated for by an
                                increased payment under Clause 15.2 (Tax
                                gross-up) but was not so compensated solely
                                because of the exclusion in paragraph (d) of
                                Clause 15.2 (Tax gross-up) applied.

        (c)     A Protected Party making, or intending to make a claim under
                paragraph (a) above shall promptly notify the Agent of the
                event which will give, or has given, rise to the claim,
                following which the Agent shall notify the Company.

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        (d)     A Protected Party shall, on receiving a payment from an
                Obligor under this Clause 15.3, notify the Agent.

15.4    TAX CREDIT
        If an Obligor makes a Tax Payment and the relevant Finance Party
        (acting reasonably) determines that:

        (a)     a Tax Credit is attributable either to an increased payment of
                which that Tax Payment forms part, or to that Tax Payment; and

        (b)     that Finance Party has obtained, utilised and fully retained
                that Tax Credit on an affiliated group basis,

        the Finance Party shall pay an amount to the Obligor which that
        Finance Party determines (acting reasonably) will leave it (after that
        payment) in the same after-Tax position as it would have been in had
        the Tax Payment not been required to be made by the Obligor.

15.5    STAMP TAXES
        The Company shall pay and, within three Business Days of written
        demand, indemnify each Finance Party against any cost, loss or
        liability that Finance Party incurs in relation to all stamp duty,
        registration, excise and other similar Taxes payable in respect of any
        Finance Document or the transactions occurring under any of them.

15.6    VALUE ADDED TAX
        (a)     All amounts set out, or expressed to be payable under a
                Finance Document by any Party to a Finance Party which (in
                whole or in part) constitute the consideration for VAT
                purposes shall be deemed to be exclusive of any VAT which is
                chargeable on such supply, and accordingly, subject to
                paragraph (c) below, if VAT is chargeable on any supply made
                by any Finance Party to any Party under a Finance Document,
                that Party shall pay to the Finance Party (in addition to and
                at the same time as paying the consideration) an amount equal
                to the amount of the VAT (and such Finance Party shall
                promptly provide an appropriate VAT invoice to such Party).

        (b)     If VAT is chargeable on any supply made by any Finance Party
                (the "SUPPLIER") to any other Finance Party (the "RECIPIENT")
                under a Finance Document, and any Party (the "RELEVANT PARTY")
                is required by the terms of any Finance Document to pay an
                amount equal to the consideration for such supply to the
                Supplier (rather than being required to reimburse the
                Recipient in respect of that consideration), such Party shall
                also pay to the Supplier (in addition to and at the same time
                as paying such amount) an amount equal to the amount of such
                VAT. The Recipient will promptly pay to the Relevant Party an
                amount equal to any credit or repayment from the relevant tax
                authority which it reasonably determines relates to the VAT
                chargeable on that supply.

        (c)     Where a Finance Document requires any Party to reimburse a
                Finance Party for any costs or expenses, that Party shall also
                at the same time pay and indemnify the Finance Party against
                all VAT incurred by the Finance Party in respect of the costs
                or expenses to the extent that the Finance Party reasonably
                determines

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                that neither it nor any other member of any group of which it
                is a member for VAT purposes is entitled to credit or
                repayment from the relevant tax authority in respect of the
                VAT.

16.     INCREASED COSTS

16.1    INCREASED COSTS
        (a)     Subject to Clause 16.3 (Exceptions) the Company shall, within
                three Business Days of a written demand by the Agent, pay for
                the account of a Finance Party the amount of any Increased
                Costs incurred by that Finance Party or any of its Affiliates
                as a result of (i) the introduction of or any change in (or in
                the interpretation, administration or application of) any law
                or regulation or (ii) compliance with any law or regulation
                made, in force and enforceable or required to be complied with
                or with which compliance is customary after the date of this
                Agreement.

        (b)     In this Agreement "INCREASED COSTS" means:

                (i)     a reduction in the rate of return from the Facility or
                        on a Finance Party's (or its Affiliate's) overall
                        capital;

                (ii)    an additional or increased cost; or

                (iii)   a reduction of any amount due and payable under any
                        Finance Document,

                which is incurred or suffered by a Finance Party or any of its
                Affiliates to the extent that it is attributable to that
                Finance Party having entered into its Commitment or funding or
                performing its obligations under any Finance Document.

16.2    INCREASED COST CLAIMS
        (a)     A Finance Party intending to make a claim pursuant to Clause
                16.1 (Increased costs) shall notify the Agent of the event
                giving rise to the claim, following which the Agent shall
                promptly notify the Company.

        (b)     Each Finance Party shall, as soon as practicable after a
                demand by the Agent, provide a certificate confirming the
                amount of its Increased Costs.

16.3    EXCEPTIONS
        (a)     Clause 16.1 (Increased costs) does not apply to the extent any
                Increased Cost is:

                (i)     attributable to a Tax Deduction required by law to be
                        made by an Obligor;

                (ii)    compensated for by Clause 15.3 (Tax indemnity) (or
                        would have been compensated for under Clause 15.3 (Tax
                        indemnity) but was not so compensated solely because
                        any of the exclusions in paragraph (b) of Clause 15.3
                        (Tax indemnity) applied);

                (iii)   compensated for by the payment of the Mandatory Cost;
                        or

                (iv)    attributable to the wilful breach by the relevant
                        Finance Party or its Affiliates of any law or
                        regulation.

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        (b)     In this Clause 16.3, a reference to a "TAX DEDUCTION" has the
                same meaning given to the term in Clause 15.1 (Definitions).

17.     OTHER INDEMNITIES

17.1    CURRENCY INDEMNITY
        (a)     If any sum due from an Obligor under the Finance Documents (a
                "SUM"), or any order, judgment or award given or made in
                relation to a Sum, has to be converted from the currency (the
                "FIRST CURRENCY") in which that Sum is payable into another
                currency (the "SECOND CURRENCY") for the purpose of:

                (i)     making or filing a claim or proof against that
                        Obligor;

                (ii)    obtaining or enforcing an order, judgment or award in
                        relation to any litigation or arbitration proceedings,

                that Obligor shall as an independent obligation, within three
                Business Days of demand, indemnify each Finance Party to whom
                that Sum is due against any cost, loss or liability arising
                out of or as a result of the conversion including any
                discrepancy between (A) the rate of exchange used to convert
                that Sum from the First Currency into the Second Currency and
                (B) the rate or rates of exchange available to that person at
                the time of its receipt of that Sum.

        (b)     Each Obligor waives any right it may have in any jurisdiction
                to pay any amount under the Finance Documents in a currency or
                currency unit other than that in which it is expressed to be
                payable.

17.2    OTHER INDEMNITIES
        The Company shall (or shall procure that an Obligor will), within
        three Business Days of written demand, indemnify each Finance Party
        against any cost, loss or liability incurred by that Finance Party as
        a result of:

        (a)     the occurrence of any Event of Default;

        (b)     a failure by an Obligor to pay any amount due under a Finance
                Document on its due date, including without limitation, any
                cost, loss or liability arising as a result of Clause 31
                (Sharing among the Finance Parties);

        (c)     funding, or making arrangements to fund, its participation in
                a Utilisation requested by a Borrower in a Utilisation Request
                but not made by reason of the operation of any one or more of
                the provisions of this Agreement (other than by reason of
                default or negligence by that Finance Party alone); or

        (d)     a Utilisation (or part of a Utilisation) not being prepaid in
                accordance with a notice of prepayment given by a Borrower or
                the Company.

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17.3    INDEMNITY TO THE AGENT
        The Company shall, within three Business Days of a written demand,
        indemnify the Agent against any cost, loss or liability incurred by
        the Agent (acting reasonably) as a result of:

        (a)     investigating any event which it reasonably believes is a
                Default; or

        (b)     entering into or performing any foreign exchange contract for
                the purposes of paragraph (b) of Clause 8.3 (Change of
                Currency); or

        (c)     acting or relying on any notice, request or instruction which
                it reasonably believes to be genuine, correct and
                appropriately authorised.

17.4    INDEMNITY TO THE SECURITY TRUSTEE
        (a)     Each Obligor shall, within three Business Days of a written
                demand, indemnify the Security Trustee and every Receiver and
                Delegate against any cost, loss or liability incurred by any
                of them as a result of:

                (i)     the taking, holding, protection or enforcement of the
                        Transaction Security;

                (ii)    the exercise of any of the rights, powers, discretions
                        and remedies vested in the Security Trustee and each
                        Receiver and Delegate by the Finance Documents or by
                        law; and

                (iii)   any default by any Obligor in the performance of any
                        of the obligations expressed to be assumed by it in
                        the Finance Documents.

        (b)     The Security Trustee may, in priority to any payment to the
                Secured Parties, indemnify itself out of the Charged Property
                in respect of, and pay and retain, all sums necessary to give
                effect to the indemnity in this Clause 17.4 and shall have a
                lien on the Transaction Security and the proceeds of the
                enforcement of the Transaction Security for all moneys payable
                to it.

18.     MITIGATION BY THE LENDERS

18.1    MITIGATION
        (a)     Each Finance Party shall, in consultation with the Company,
                take all reasonable steps to mitigate any circumstances which
                arise and which would result in any facility ceasing to be
                available or any amount becoming payable under or pursuant to,
                or cancelled pursuant to, any of Clause 10.1 (Illegality),
                Clause 15 (Tax gross-up and indemnities), Clause 16 (Increased
                costs) or paragraph 3 of Schedule 4 (Mandatory Cost Formulae)
                including (but not limited to) transferring its rights and
                obligations under the Finance Documents to another Affiliate
                or Facility Office.

        (b)     Paragraph (a) above does not in any way limit the obligations
                of any Obligor under the Finance Documents.

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18.2    LIMITATION OF LIABILITY
        (a)     The Company shall, within three Business Days of written
                demand, indemnify each Finance Party for all costs and
                expenses reasonably incurred by that Finance Party as a result
                of steps taken by it under Clause 18.1 (Mitigation).

        (b)     A Finance Party is not obliged to take any steps under Clause
                18.1 (Mitigation) if, in the opinion of that Finance Party
                (acting reasonably), to do so might be prejudicial to it.

19.     COSTS AND EXPENSES

19.1    TRANSACTION EXPENSES
        The Company shall, within three Business Days of a written demand, pay
        the Agent, the Arranger and the Security Trustee the amount of all
        costs and expenses (including, but not limited to, legal fees)
        incurred by any of them (each acting reasonably) in connection with
        the negotiation, preparation, printing, execution, syndication and
        perfection of:

        (a)     this Agreement and any other documents referred to in this
                Agreement and the Transaction Security; and

        (b)     any other Finance Documents executed after the date of this
                Agreement.

19.2    AMENDMENT COSTS
        If (a) an Obligor requests an amendment, waiver or consent or (b) an
        amendment is required pursuant to Clause 32.9 (Change of currency),
        the Company shall, within three Business Days of written demand,
        reimburse each of the Agent and the Security Trustee for the amount of
        all costs and expenses (including, but not limited to, legal fees)
        reasonably incurred by the Agent and the Security Trustee (and in the
        case of the Security Trustee, by any Receiver or Delegate) in
        responding to, evaluating, negotiating or complying with that request
        or requirement.

19.3    SECURITY TRUSTEE'S ONGOING COSTS
        (a)     In the event of (i) the occurrence of a Default or (ii) the
                Security Trustee considering it necessary or expedient or
                (iii) the Security Trustees being requested by an Obligor or
                the Majority Lenders to undertake duties which the Security
                Trustee and the Company agree to be of an exceptional nature
                and/or outside the scope of the normal duties of the Security
                Trustee under the Finance Documents, the Company shall pay to
                the Security Trustee any additional remuneration that may be
                agreed between them.

        (b)     If the Security Trustee and the Company fail to agree upon the
                nature of the duties or upon any additional remuneration, that
                dispute shall be determined by a investment bank (acting as an
                expert and not as an arbitrator) selected by the Security
                Trustee and approved by the Company or, failing approval,
                nominated (on the application of the Security Trustee) by the
                President for the time being of the Law Society of England and
                Wales (the costs of the nomination and of the investment bank
                being payable by the Company) and the determination of any
                investment bank shall be final and binding upon the parties to
                this Agreement.

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19.4    ENFORCEMENT AND PRESERVATION COSTS
        The Company shall, within three Business Days of written demand, pay
        to each Finance Party the amount of all costs and expenses (including
        but not limited to legal fees) incurred by it in connection with the
        enforcement of, or the preservation of any rights under, any Finance
        Document and the Transaction Security and any proceedings instituted
        by or against the Security Trustee as a consequence of taking or
        holding the Transaction Security or enforcing these rights.

19.5    For the purposes of Clauses 16.1, 17.2 to 17.4, 18.2, 19.1, 19.2 and
        19.4 any written demand shall be accompanied by reasonable evidence of
        the relevant amount claimed (which in the case of any cost or expense
        shall be the relevant invoice together with an explanation as to why
        the cost or expense was incurred).

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                                   SECTION 7
                                   GUARANTEE

20.     GUARANTEE AND INDEMNITY

20.1    GUARANTEE AND INDEMNITY
        Each Guarantor irrevocably and unconditionally jointly and severally:

        (a)     guarantees to each Finance Party punctual performance by each
                Borrower of all that Borrower's obligations under the Finance
                Documents;

        (b)     undertakes with each Finance Party that whenever a Borrower
                does not pay any amount when due under or in connection with
                any Finance Document, that Guarantor shall immediately on
                demand pay that amount as if it was the principal obligor; and

        (c)     indemnifies each 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. The amount of the cost, loss or liability
                shall be equal to the amount which that Finance Party would
                otherwise have been entitled to recover.

20.2    CONTINUING GUARANTEE
        This guarantee is a continuing guarantee and will extend to the
        ultimate balance of sums payable by any Obligor under the Finance
        Documents, regardless of any intermediate payment or discharge in
        whole or in part.

20.3    REINSTATEMENT
        If any payment by an Obligor or any discharge given by a Finance Party
        (whether in respect of the obligations of any Obligor or any security
        for those obligations or otherwise) is avoided or reduced as a result
        of insolvency or any similar event:

        (a)     the liability of each Obligor shall continue as if the
                payment, discharge, avoidance or reduction had not occurred;
                and

        (b)     each Finance Party shall be entitled to recover the value or
                amount of that security or payment from each Obligor, as if
                the payment, discharge, avoidance or reduction had not
                occurred.

20.4    WAIVER OF DEFENCES
        The obligations of each Guarantor under this Clause 20 will not be
        affected by an act, omission, matter or thing which, but for this
        Clause, would reduce, release or prejudice any of its obligations
        under this Clause 20 (without limitation and whether or not known to
        it or any Finance Party) including:

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

        (b)     the release of any other Obligor or any other person under the
                terms of any composition or arrangement with any creditor of
                any member of the Group;

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        (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 or 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;

        (d)     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;

        (e)     any amendment, novation, supplement, extension (whether of
                maturity or otherwise) or restatement (in each case however
                fundamental and of whatsoever nature, and whether or not more
                onerous) or replacement of a Finance Document or any other
                document or security;

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

        (g)     any insolvency or similar proceedings.

20.5    GUARANTOR INTENT
        Without prejudice to the generality of Clause 20.4 (Waiver of
        Defences), each Guarantor expressly confirms that it intends that this
        guarantee shall extend from time to time to any (however fundamental
        and of whatsoever nature and whether or not more onerous) variation,
        increase, extension or addition of or to any of the Finance Documents
        and/or any facility or amount made available under any of the Finance
        Documents for the purposes of or in connection with any of the
        following: acquisitions of any nature; increasing working capital;
        enabling investor distributors to be made; carrying out
        restructurings; refinancing existing facilities; refinancing any other
        indebtedness; making facilities available to new borrowers; any other
        variation or extension of the purposes for which any such facility or
        amount might be made available from time to time; and any fees, costs
        and/or expenses associated with any of the foregoing.

20.6    IMMEDIATE RECOURSE
        Each 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 rights or security or claim payment from
        any person before claiming from that Guarantor under this Clause 20.
        This waiver applies irrespective of any law or any provision of a
        Finance Document to the contrary.

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

        (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 apply and enforce the same in such manner and order as it
                sees fit (whether against those amounts or otherwise) and no
                Guarantor shall be entitled to the benefit of the same; and

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        (b)     hold in an interest-bearing suspense account any moneys
                received from any Guarantor or on account of any Guarantor's
                liability under this Clause 20.

20.8    DEFERRAL OF GUARANTORS' RIGHTS
        Until all amounts which may be or become payable by the Obligors under
        or in connection with the Finance Documents have been irrevocably paid
        in full and unless the Agent otherwise directs, no Guarantor will
        exercise any rights which it may have by reason of performance by it
        of its obligations under the Finance Documents:

        (a)     to be indemnified by an Obligor;

        (b)     to claim any contribution from any other guarantor of any
                Obligor's obligations under the Finance Documents; and/or

        (c)     to take the benefit (in whole or in part and whether by way of
                subrogation or otherwise) of any rights of the Finance Parties
                under the Finance Documents or of any other guarantee or
                security taken pursuant to, or in connection with, the Finance
                Documents by any Finance Party.

        If a Guarantor receives any benefit, payment or distribution in
        relation to such rights it shall hold that benefit, payment or
        distribution to the extent necessary to enable all amounts which may
        be or become payable to the Finance Parties by the Obligors under or
        in connection with the Finance Documents to be repaid in full on trust
        for the Finance Parties and shall promptly pay or transfer the same to
        the Agent or as the Agent may direct for application in accordance
        with Clause 32 (Payment mechanics) of this Agreement.

20.9    RELEASE OF GUARANTORS' RIGHT OF CONTRIBUTION
        If any Guarantor (a "RETIRING GUARANTOR") ceases to be a Guarantor in
        accordance with the terms of the Finance Documents for the purpose of
        any sale or other disposal of that Retiring Guarantor then on the date
        such Retiring Guarantor ceases to be a Guarantor:

        (a)     that Retiring Guarantor is released by each other Guarantor
                from any liability (whether past, present or future and
                whether actual or contingent) to make a contribution to any
                other Guarantor arising by reason of the performance by any
                other Guarantor of its obligations under the Finance
                Documents; and

        (b)     each other Guarantor waives any rights it may have by reason
                of the performance of its obligations under the Finance
                Documents to take the benefit (in whole or in part and whether
                by way of subrogation or otherwise) of any rights of the
                Finance Parties under any Finance Document or of any other
                security taken pursuant to, or in connection with, any Finance
                Document where such rights or security are granted by or in
                relation to the assets of the Retiring Guarantor.

20.10   ADDITIONAL SECURITY
        This guarantee is in addition to and is not in any way prejudiced by
        any other guarantee or security now or subsequently held by any
        Finance Party.

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20.11   LIMITATIONS
        (a)     Any term or provision of this Clause 20.11 or any other term
                in this Agreement or any Finance Document notwithstanding, the
                maximum aggregate amount of the obligations for which any U.S.
                Guarantor shall be liable under this Agreement shall in no
                event exceed an amount equal to the largest amount that would
                not render such U.S. Guarantor's obligations under this
                Agreement, subject to avoidance under applicable United States
                federal or state fraudulent conveyance laws.

        (b)     Flexsys Industria e Comercio Ltda expressly waives any right
                or benefit it may have under articles 827, 835, 837 and 838 of
                the Brazilian Civil Code in connection with the guarantee and
                indemnity granted under this Clause 20.

        (c)     If the guarantee and indemnity granted in this Clause 20
                (Guarantee and Indemnity) (the "GUARANTEE") is given by a
                Guarantor incorporated in Germany in the legal form of (i) a
                limited liability company (Gesellschaft mit beschrankter
                Haftung (GmbH)) (a "GERMAN GMBH GUARANTOR") or (ii) a limited
                partnership (Kommanditgesellschaft) with a limited liability
                company as sole general partner (a "GERMAN GMBH & CO. KG
                GUARANTOR" and together with the German GmbH Guarantor
                referred to as the "GERMAN GUARANTOR"; a reference made in
                this paragraph (c) to the "RELEVANT LIMITATION COMPANY" shall,
                in case of a German GmbH Guarantor, refer to the relevant
                German Guarantor and, in case of a German GmbH & Co. KG
                Guarantor, refer to the German Guarantor's general partner),
                the following shall apply:

                (i)     The Finance Parties shall be entitled to enforce the
                        Guarantee against the relevant German Guarantor
                        without limitation in respect of:

                        (A)     all and any amounts which are owed under the
                                Finance Documents by such German Guarantor
                                itself or by any of its Subsidiaries; and

                        (B)     all and any amounts which correspond to funds
                                that have been borrowed under this Agreement
                                or financial accommodation provided in
                                connection with a Letter of Credit, in each
                                case to the extent on-lent, or issued for the
                                benefit of, the relevant German Guarantor or
                                any of its Subsidiaries, or for the benefit of
                                any of their creditors and in each case not
                                repaid and outstanding from time to time.

                        (in aggregate, the "UNLIMITED ENFORCEMENT AMOUNT").

                (ii)    If the German Guarantor's liability under the
                        Guarantee exceeds the Unlimited Enforcement Amount
                        applicable to such German Guarantor, the Finance
                        Parties shall not be entitled to enforce the Guarantee
                        against such German Guarantor in excess of the
                        Unlimited Enforcement Amount if and to the extent
                        that:

                        (A)     the Guarantee secures the obligations of an
                                Obligor which is (a) a shareholder of the
                                German Guarantor or (b) an affiliated company

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                                (verbundenes Unternehmen) within the meaning
                                of section 15 of the German Stock Corporation
                                Act (Aktiengesetz) of a shareholder of the
                                German Guarantor (other than the German
                                Guarantor and its Subsidiaries); and

                        (B)     the enforcement would have the effect of (a)
                                reducing the Relevant Limitation Company's net
                                assets (Reinvermogen) (the "NET ASSETS") to an
                                amount of less than the Relevant Limitation
                                Company's stated share capital (Stammkapital)
                                or, if the Net Assets are already an amount of
                                less than the Relevant Limitation Company's
                                stated share capital, of causing such amount
                                to be further reduced and (b) would thereby
                                affect the assets required for the obligatory
                                preservation of the Relevant Limitation
                                Company's stated share capital (Stammkapital)
                                according to section 30, 31 German Limited
                                Liability Companies Act (Gesetz betreffend die
                                Gesellschaften mit beschrankter Haftung)
                                provided that the amount of the stated share
                                capital to be taken into consideration shall
                                be the amount registered in the commercial
                                register at the date hereof, and any increase
                                of the stated share capital registered after
                                the date of this Agreement provided that such
                                increase shall only be taken into account (i)
                                if such increase is not subject to any consent
                                under the terms of this Agreement; or (ii) if
                                such increase is subject to any consent under
                                the terms of this Agreement, such consent has
                                been granted in writing prior to effecting the
                                increase of the stated share capital.

                (iii)   The Net Assets shall be calculated as an amount equal
                        to the sum of the values of the Relevant Limitation
                        Company's assets (consisting of all assets which
                        correspond to the items set forth in section 266
                        sub-section (2) A, B and C of the German Commercial
                        Code (Handelsgesetzbuch) less the aggregate amount of
                        the Relevant Limitation Company's liabilities
                        (consisting of all liabilities and liability reserves
                        which correspond to the items set forth in section 266
                        sub-section (3) B, C and D of the German Commercial
                        Code), save that:

                        (A)     any asset that is shown in the balance sheet
                                with a book value (Buchwert) that is
                                significantly lower than the market value of
                                such asset and that is not necessary for the
                                Relevant Limitation Company's business (nicht
                                betriebsnotwendig) shall be taken into account
                                with its market value;

                        (B)     obligations under loans provided to the
                                Relevant Limitation Company by any member of
                                the Group or any other affiliated company
                                shall not be taken into account as
                                liabilities; and

                        (C)     obligations under loans or other contractual
                                liabilities incurred by the Relevant
                                Limitation Company in violation of the
                                provisions of the Finance Documents shall not
                                be taken into account as liabilities.

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                        The Net Assets shall be determined in accordance with
                        the generally accepted accounting principles
                        applicable from time to time in Germany (Grundsatze
                        ordnungsmaBiger Buch-fuhrung) and be based on the same
                        principles that were applied by the German Guarantor
                        in the preparation of its most recent annual balance
                        sheet (Jahresbilanz).

                (iv)    The limitations set out in paragraph (ii) above shall
                        only apply if the German Guarantor delivers to the
                        Agent, without undue delay but not later than within 3
                        months after receipt of a request for payment under
                        the Guarantee by the Agent, an up to date balance
                        sheet prepared by a firm of auditors of international
                        standard and reputation which shows the value of the
                        Relevant Limitation Company's Net Assets (the "BALANCE
                        SHEET"). The Balance Sheet shall be prepared in
                        accordance with the principles set out in paragraph
                        (iii) above and shall contain reasonable details
                        relating to items to be adjusted pursuant to paragraph
                        (iii) above.

                        If the German Guarantor fails to deliver a Balance
                        Sheet within the aforementioned time period, the
                        Finance Parties shall be entitled to enforce the
                        Guarantee irrespective of the limitations set out in
                        paragraph (ii) above.

                (v)     If the Finance Parties disagree with the Balance
                        Sheet, they shall be entitled to enforce the Guarantee
                        up to the amount which, according to the Balance
                        Sheet, can be enforced in compliance with the
                        limitations set out in paragraph (ii) above. In
                        relation to any additional amounts for which the
                        German Guarantor is liable under the Guarantee, the
                        Finance Parties shall be entitled to further pursue
                        their claims (if any) and the relevant German
                        Guarantor shall be entitled to prove that this amount
                        is necessary for maintaining the Relevant Limitation
                        Company's stated share capital (calculated as of the
                        date the demand under the Guarantee was made).

                (vi)    No reduction of the amount enforceable under this
                        paragraph (c) of Clause 20.11 (Limitations) will
                        prejudice the right of the Finance Parties to continue
                        enforcing the Guarantee (subject always to the
                        operation of the limitations set out above at the time
                        of such enforcement) until full satisfaction to the
                        claims guaranteed.

        (d)     Notwithstanding any other provision of this Clause 20
                (Guarantee and Indemnity) the guarantee, indemnity and other
                obligations of any Obligor expressed to be assumed in this
                Clause 20 (Guarantee and Indemnity) shall be deemed not to be
                assumed by such Obligor to the extent that the same would
                constitute unlawful financial assistance within the meaning of
                any applicable financial assistance rules under any Relevant
                Jurisdiction (the "PROHIBITION") and the provisions of this
                Agreement and the other Finance Documents shall be construed
                accordingly. For the avoidance of doubt it is expressly
                acknowledged that the relevant Obligor will continue to
                guarantee all such obligations which, if included, do not
                constitute a violation of the Prohibition.

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        (e)     Flexsys Industria e Comercio Ltda. acknowledges and agrees
                that the lawful currency of the United States of America or
                any Optional Currency under this Agreement shall be the
                currency of account in any and all events, and guarantees that
                the obligations will be paid in the lawful currency of the
                United States of America or any Optional Currency, as
                applicable, in accordance with the terms and provisions of
                this Agreement and the Finance Documents, regardless of any
                law, regulation or decree now or hereafter in effect in Brazil
                that might in any manner affect the Secured Obligations, the
                Security Documents or the rights of the Secured Parties with
                respect thereto as against Flexsys Industria e Comercio Ltda.,
                or cause or permit to be invoked any alteration in the time,
                amount or manner of payment by Flexsys Industria e Comercio
                Ltda. of any of or all the Secured Obligations. Further to and
                without limiting the currency indemnities set forth in Section
                17.1 of this Agreement, and any other indemnity, reimbursement
                or liability set forth under the Finance Documents, Flexsys
                Industria e Comercio Ltda. shall (i) at all times comply with,
                and perform such acts as may be required by Brazilian law,
                including all laws relating to (A) dealings with public
                officials and (B) foreign exchange, Brazilian Central Bank and
                Federal Revenue Office regulations (as from time to time
                amended), in order to preserve and maintain the validity,
                perfection and enforceability of the Security Documents to
                which it is a party as well as the Secured Obligations.

        (f)     In relation to any member of the Group which becomes a
                Guarantor after the date of this Agreement, this Guarantee is
                also subject to any limitations set out in the Accession
                Letter application to that Guarantor.

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                                   SECTION 8
              REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

21.     REPRESENTATIONS

        Each Obligor in respect of itself only, and the Company in respect of
        itself and each other member of the Group (and, in the case of the
        Company, references in this Clause 21 to "it" or "its shall be to the
        Company on behalf of itself and in respect of each Obligor) makes the
        representations and warranties set out in this Clause 21 to each
        Finance Party on the date of this Agreement.

21.1    STATUS
        (a)     In the case of each Obligor other than Flexsys America L.P.,
                it is a corporation, duly incorporated and validly existing
                under the law of its jurisdiction of incorporation.

        (b)     In the case of Flexsys America L.P., it is a limited
                partnership, duly formed and validly existing under the laws
                of the State of Delaware, United States of America.

        (c)     In the case of Flexsys Industria e Comercio Ltda, it is a
                limited liability company (sociedade limitada) duly
                incorporated and validly existing under the laws of Brazil.

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

21.2    BINDING OBLIGATIONS
        The obligations expressed to be assumed by it in each Finance Document
        are, subject to the Reservations and to any applicable Perfection
        Requirements, legal, valid, binding and enforceable obligations.

21.3    NON-CONFLICT WITH OTHER OBLIGATIONS
        The entry into and performance by it of, and the transactions
        contemplated by, the Finance Documents do not and will not conflict
        with:

        (a)     any law or regulation applicable to it;

        (b)     its constitutional documents; or

        (c)     any agreement or instrument binding upon it or any of its
                assets other than under the Existing Facility up to and
                including the first Utilisation Date.

21.4    POWER AND AUTHORITY
        It has the power to enter into, perform and deliver, and has taken all
        necessary action to authorise its entry into, performance and delivery
        of, the Finance Documents to which it is a party and the transactions
        contemplated by those Finance Documents.

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21.5    VALIDITY AND ADMISSIBILITY IN EVIDENCE
        All Authorisations required:

        (a)     to enable it lawfully to enter into, exercise its rights and
                comply with its obligations in the Finance Documents to which
                it is a party; and

        (b)     to make the Finance Documents to which it is a party
                admissible in evidence in each Relevant Jurisdiction subject
                to any Reservation,

        have been obtained or effected and are in full force and effect.

21.6    GOVERNING LAW AND ENFORCEMENT
        (a)     Subject to any applicable Reservations, the choice of
                governing law of each of the Finance Documents will be
                recognised and enforced in each Relevant Jurisdiction, other
                than as specifically referred to in any legal opinion
                delivered pursuant to Clause 4 (Conditions of Utilisation) or
                Clause 27 (Changes to the Obligors).

        (b)     Subject to any applicable Reservations, any judgment obtained
                in the jurisdiction whose laws are expressed to govern a
                Finance Document will be recognised and enforced in each
                Relevant Jurisdiction applicable to the governing law or
                jurisdiction of incorporation of relevant parties to or assets
                specifically secured by that Finance Document.

21.7    NO FILING TAXES
        Under the law of each Relevant Jurisdiction it is not necessary that
        the Finance Documents be filed, recorded or enrolled with any court or
        other authority in that jurisdiction or that any registration, stamp
        or similar tax be paid on or in relation to the Finance Documents or
        the transactions contemplated by the Finance Documents, other than in
        connection with Perfection Requirements or as specifically referred to
        in any legal opinion delivered pursuant to Clause 4 (Conditions of
        Utilisation) or Clause 27 (Changes to the Obligors).

21.8    NO DEFAULT
        (a)     No Event of Default is continuing or might be reasonably
                likely to result from the making of any Utilisation.

        (b)     No other event or circumstance is outstanding which
                constitutes a default under any other agreement or instrument
                which is binding on it or any of its Subsidiaries or to which
                its (or its Subsidiaries') assets are subject which might be
                reasonably likely to have a Material Adverse Effect.

21.9    NO MISLEADING INFORMATION
        (a)     Any written factual information provided by any member of the
                Group for the purposes of the Information Memorandum was true
                and accurate in all material respects as at the date it was
                provided or as at the date (if any) at which it is stated.

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        (b)     The financial projections contained in the Information
                Memorandum have been prepared on the basis of recent
                historical information and on the basis of reasonable
                assumptions.

        (c)     Nothing has occurred or been omitted from the Information
                Memorandum and no information has been given or withheld that
                results in the information contained in the Information
                Memorandum being untrue or misleading in any material respect
                and nothing has been omitted from the Information Memorandum
                which, if disclosed, might adversely affect the decision of a
                person considering whether to enter into this Agreement.

        (d)     Since the date of the Information Memorandum, no event has
                occurred which has had or might reasonably be likely to have a
                Material Adverse Effect.

        (e)     All material information (other than the Information
                Memorandum) supplied by any member of the Group under or in
                connection with any Finance Document is true, complete and
                accurate in all material respects as at the date it was given
                and is not misleading in any material respect and all
                information which, if disclosed, might materially adversely
                affect the decision of a person considering whether to enter
                into this Agreement, has been disclosed.

21.10   FINANCIAL STATEMENTS
        (a)     The Original Financial Statements were prepared in accordance
                with GAAP, consistently applied unless expressly disclosed to
                the Agent in writing to the contrary before the date of this
                Agreement.

        (b)     Its Original Financial Statements fairly represent its
                financial condition and operations (or the financial condition
                and operations of the Group, in the case of the Company)
                during the relevant financial year unless expressly disclosed
                to the Agent in writing to the contrary before the date of
                this Agreement.

        (c)     There has been no material adverse change in its financial
                condition (or the combined financial condition of the Group,
                in the case of the Company) since the date of the Original
                Financial Statements.

21.11   PARI PASSU RANKING
        Its payment obligations under the Finance Documents rank at least pari
        passu with the claims of all its other unsecured and unsubordinated
        creditors, except for obligations mandatorily preferred by law
        applying to companies generally.

21.12   NO PROCEEDINGS PENDING OR THREATENED
        Save as disclosed in the Information Memorandum, no litigation,
        arbitration or administrative proceedings (including, for the
        avoidance of doubt, insolvency or similar proceedings) of or before
        any court, arbitral body or agency which, if adversely determined,
        might reasonably be likely to have a Material Adverse Effect have (to
        the best of its knowledge and belief) been started or threatened
        against it or any of its Subsidiaries, other than as specifically
        referred to in any legal opinion delivered pursuant to Clause 4
        (Conditions of Utilisation) or Clause 27 (Changes to the Obligors).

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21.13   ENVIRONMENTAL COMPLIANCE
        Save as disclosed in the Information Memorandum, each member of the
        Group has performed and observed in all material respects all
        Environmental Law, Environmental Permits and all other material
        covenants, conditions, restrictions or agreements directly or
        indirectly concerned with any contamination, pollution or waste or the
        release or discharge of any toxic or hazardous substance in connection
        with any real property which is or was at any time owned, leased or
        occupied by any member of the Group or on which any member of the
        Group has conducted any activity where failure to do so might
        reasonably be likely to have a Material Adverse Effect.

21.14   ENVIRONMENTAL CLAIMS
        Save as disclosed in the Information Memorandum, no Environmental
        Claim has been commenced or (to the best of its knowledge and belief)
        is threatened against any member of the Group where that claim might
        be reasonably likely, if determined against that member of the Group
        to have a Material Adverse Effect.

21.15   TAXATION
        (a)     It has duly and punctually paid and discharged all Taxes
                imposed upon it or its assets within the time period allowed
                without incurring penalties (save to the extent that (i)
                payment is being contested in good faith, (ii) it has
                maintained adequate reserves for those Taxes and (iii) payment
                can be lawfully withheld).

        (b)     It is not materially overdue in the filing of any Tax returns.

        (c)     No claims are being or are reasonably likely to be asserted
                against it with respect to Taxes.

        (d)     It has properly filed or caused to be filed (and, where
                applicable, has been included in) all material U.S. Tax
                returns, reports and statements (whether federal, state, local
                or otherwise) applicable to it in all jurisdictions in which
                such returns, reports and statements are required to be filed.
                All such U.S. Tax returns are correct and complete in all
                material respects.

        (e)     It has paid all material U.S. Taxes due whether or not shown
                on any tax return, together with applicable interest and
                penalties, except to the extent such U.S. Taxes are contested
                in good faith by proper proceedings which stay the imposition
                of any penalty, fine or lien resulting from the non-payment of
                such U.S. Taxes and with respect to which adequate reserves
                have been set aside for the payment of such U.S. Taxes.

21.16   DEDUCTION OF TAX
        It is not required to make any deduction for or on account of Tax from
        any payment it may make under any Finance Document.

21.17   NO IMMUNITY
        In any proceedings taken in a Relevant Jurisdiction in relation to the
        Finance Documents, it will not be entitled to claim for itself or any
        of its assets immunity from suit, execution, attachment or other legal
        process.

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21.18   PRIVATE AND COMMERCIAL ACTS
        Its execution of the Finance Documents constitutes, and its exercise
        of its rights and performance of its obligations hereunder will
        constitute, private and commercial acts done and performed for private
        and commercial purposes.

21.19   SECURITY
        No Security exists over all or any of the present or future assets of
        any member of the Group other than any Security permitted or
        contemplated under Clause 24.3 (Negative Pledge).

21.20   RANKING
        Subject to the Reservations and applicable Perfection Requirements,
        the Transaction Security has or will have first ranking priority and
        it is not subject to any prior ranking or pari passu ranking Security
        unless purported otherwise in any Security Documents.

21.21   TRANSACTION SECURITY
        Subject to the Reservations and applicable Perfection Requirements,
        each Security Document to which it is a party validly creates the
        Security which is expressed to be created by that Security Document
        and evidences the Security it is expressed to evidence.

21.22   GOOD TITLE TO ASSETS
        It has good, valid and marketable title to, or valid leases or
        licences of, and all appropriate Authorisations to use, the material
        assets necessary to carry on its business as presently conducted.

21.23   NO DISPOSAL OF INTERESTS
        It has not sold or granted (or agreed to sell or grant) any right or
        pre-emption over, or any lease or tenancy of or otherwise disposed of
        any of its interest in any of the Charged Property.

21.24   LEGAL AND BENEFICIAL OWNER
        It is the absolute legal owner and beneficial owner or the sole
        beneficial owner of the assets subject to the Transaction Security
        and, in the case of assets that are subject to Security Documents
        governed by the laws of Germany, may freely dispose thereof without
        restrictions.

21.25   SHARES
        (a)     The Shares are fully paid and not subject to any option to
                purchase or similar rights. The constitutional documents of
                companies whose shares are subject to the Transaction Security
                do not and could not restrict or inhibit any transfer of those
                shares on creation or on enforcement of the Transaction
                Security.

        (b)     The Shares in Flexsys S.p.A are free and clear of any
                encumbrance, security interest, option right (diritto di
                opzione), pre-emption right (diritto di prelazione) or any
                other third-party lien or right, except as created by the
                Italian Share Pledge and the Company represents that it has
                not sold or disposed of or granted any option or pre-emption
                right in respect of any of its right, title and interest in
                the Charged Portfolio (other than as permitted under the
                Secured Contracts).

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        (c)     The Shares in Flexsys Industria e Comercio Ltda. have been
                duly authorized and validly issued in compliance with
                applicable laws and are fully paid in. There are no
                outstanding warrants, options, subscriptions, reserved quotas
                or other contractual arrangements for the purchase of the
                Shares, and there are no outstanding arrangements, preemptive
                rights, redemption rights or any other rights or claims of any
                character relating to the issuance, purchase, repurchase,
                redemption, transfer, voting or preemptive rights with respect
                to the Shares (which are duly paid in) that restrict the
                transfer of, require the issuance of, or otherwise relate to
                any class of the capital stock of Flexsys Industria e Comercio
                Ltda., in either case that would affect the pledge and
                usufruct granted by it under the Brazilian Quota Pledge
                Agreement.

        (d)     The Charged Portfolio is not subject to foreclosure
                (pignoramento) or seizure (sequestro) and there does not exist
                any restriction on the ability to transfer or realise all or
                any part of the Charged Portfolio.

21.26   NO LISTED SECURITIES
        None of the Belgian Obligors has issued listed securities, or is a
        Subsidiary of a Belgian company that has issued listed securities.

21.27   GROUP STRUCTURE
        The Group Structure Chart delivered to the Agent pursuant to Schedule
        2 (Conditions Precedent) is true, complete and accurate.

21.28   OWNERSHIP OF THE OBLIGORS
        Each Obligor (other than Flexsys America L.P., Flexsys Rubber
        Chemicals Limited and the Company itself) is a Subsidiary of the
        Company.

21.29   OWNERSHIP OF THE COMPANY
        On and from the Akzo Nobel Retirement:

        (a)     Solutia Inc. owns 50 per cent. of the issued ordinary share
                capital of the Company and Solutia Europe N.V. owns 50 per
                cent. of the issued preference share capital of the Company,
                with the balance of such issues ordinary shares and issued
                preference shares being held by the Company itself;

        (b)     Flexsys America Co and Solutia Inc. own all of the partnership
                interests of Flexsys America L.P.; and

        (c)     Solutia UK Capital Limited owns all of the issued share
                capital of Flexsys Rubber Chemicals Limited.

21.30   CENTRE OF MAIN INTERESTS AND ESTABLISHMENTS
        (a)     Each Obligor listed in Schedule 11 (Centre of Main Interests
                and Establishments) has its "centre of main interests" (as
                that term is used in Article 3(1) of The Council of the
                European Union Regulation No. 1346/2000 on Insolvency
                Proceedings (the "REGULATION") as set out in Schedule 11
                (Centre of Main Interests and Establishments).

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        (b)     The Original Obligors listed in Schedule 11 (Centre of Main
                Interests and Establishments) have an "establishment" (as
                defined in Article 2(h) of the Regulation) in the countries
                set out in Schedule 11 (Centre of Main Interests and
                Establishments).

21.31   AKZO NOBEL RETIREMENT
        The Akzo Nobel Retirement is legally valid and enforceable and is in
        compliance with all laws and legal requirements in each Relevant
        Jurisdiction.

21.32   ERISA PLANS
        (a)     Each Employee Plan is in compliance in form and operation with
                ERISA and the Code and all other applicable laws and
                regulations save where any failure to comply would not
                reasonably be expected to have a Material Adverse Effect.

        (b)     Each Employee Plan which is intended to be qualified under
                Section 401(a) of the Code has been determined by the IRS to
                be so qualified or is in the process of being submitted to the
                IRS for approval or will be so submitted during the applicable
                remedial amendment period, and, nothing has occurred since the
                date of such determination that would adversely affect such
                determination (or, in the case of an Employee Plan with no
                determination, nothing has occurred that would materially
                adversely affect such qualification).

        (c)     There exists no Unfunded Pension Liability with respect to
                Employee Plans in the aggregate, taking into account only
                Employee Plans with positive Unfunded Pension Liability,
                except as would not have a Material Adverse Effect.

        (d)     There are no actions, suits or claims pending against or
                involving an Employee Plan (other than routine claims for
                benefits) or, to the knowledge of the Borrowers, any U.S.
                Obligor or any ERISA Affiliate, threatened, which would
                reasonably be expected to be asserted successfully against any
                Employee Plan and, if so asserted successfully, would
                reasonably be expected either singly or in the aggregate to
                have a Material Adverse Effect.

        (e)     Each U.S. Obligor and any ERISA Affiliate has made all
                material contributions to or under each such Employee Plan
                required by law within the applicable time limits prescribed
                thereby, the terms of such Employee Plan, or any contract or
                agreement requiring contributions to an Employee Plan save
                where any failure to comply would not reasonably be expected
                to have a Material Adverse Effect.

        (f)     Neither any U.S. Obligor nor any ERISA Affiliate has ceased
                operations at a facility so as to become subject to the
                provisions of Section 4068(a) of ERISA, withdrawn as a
                substantial employer so as to become subject to the provisions
                of Section 4063 of ERISA or ceased making contributions to any
                Employee Plan subject to Section 4064(a) of ERISA to which it
                made contributions.

        (g)     Neither any U.S. Obligor nor any ERISA Affiliate has incurred
                or reasonably expects to incur any liability to PBGC save for
                any liability for premiums due in the ordinary course or other
                liability which would not reasonably be expected to have a
                Material Adverse Effect.

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21.33   PENSIONS
        (a)     No UK Obligor is or has at any time been an employer (for the
                purpose of sections 38 to 51 of the Pensions Act 2004) of an
                occupational pension scheme which is not a money purchase
                scheme (both terms as defined in the Pension Schemes Act 1993)
                save in respect of the Flexsys Rubber Chemicals Retirement
                Benefits Scheme.

        (b)     No UK Obligor is or has at any time been "connected" with or
                an "associate" of (as those terms are used in sections 39 and
                43 of the Pensions Act 2004) such an employer.

        (c)     No member of the Group has any Multiemployer Plan and no
                member of the Group will acquire or establish a Multiemployer
                Plan.

21.34   FINANCIAL ASSISTANCE
        (a)     The provision of guarantees and security required under the
                Finance Documents do not constitute unlawful financial
                assistance or breach any similar laws in any jurisdiction.

        (b)     The proceeds of the Facilities have not been and will not be
                used to finance or refinance the acquisition of or
                subscription for shares in any member of the Group other than
                in connection with the Akzo Nobel Retirement.

        (c)     The acquisition of shares in connection with the Akzo Nobel
                Retirement will be performed in compliance with all relevant
                laws.

21.35   FEDERAL RESERVE REGULATIONS
        (a)     No Obligor is engaged or will engage, principally or as one of
                its important activities, in the business of purchasing or
                carrying Margin Stock or extending credit for the purpose of
                purchasing or carrying Margin Stock.

        (b)     None of the proceeds of the Loans or other extensions of
                credit under this Agreement will be used, directly or
                indirectly, for the purpose of buying or carrying any Margin
                Stock, for the purpose of reducing or retiring any Financial
                Indebtedness that was originally incurred to buy or carry any
                Margin Stock or for any other purpose which might cause all or
                any Loans or other extensions of credit under this Agreement
                to be considered a "purpose credit" within the meaning of
                Regulation U or Regulation X.

21.36   INVESTMENT COMPANIES
        No Obligor, person controlling an Obligor or Subsidiary of an Obligor
        is or is required to be registered as an "investment company" under
        the U.S. Investment Company Act of 1940 (the "1940 ACT").

21.37   ANTI-TERRORISM LAWS
        (a)     To the best of the Obligors' knowledge, no Obligor nor any
                Affiliate thereof: (i) is, or is controlled by, a Restricted
                Party; (ii) has received funds or other property from a
                Restricted Party; or (iii) is in breach of or is the subject
                of any action or investigation under any Anti-Terrorism Law.

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        (b)     Each Obligor and, to the best of the Obligors' knowledge, each
                Affiliate thereof has taken reasonable measures to ensure
                compliance with the Anti-Terrorism Laws.

21.38   GERMANY MONEY LAUNDERING
        Each German Borrower is the beneficiary (within the meaning of section
        8 of the German Money Laundering Act (Gesetz uber das Aufspuren von
        Gewinnen aus schweren Straftaten Geldwaschegesetz) for each Loan made
        or to be made available to it.

21.39   FLEXSYS CHEMICALS (M) SDN. BHD.
        (a)     Flexsys Chemicals (M) Sdn. Bhd. is not connected with any
                director of any Borrower of which it is not a Subsidiary.

        (b)     No director of any Borrower of which Flexsys Chemical (M) Sdn.
                Bhd. is not a Subsidiary holds 15 per cent or more of the
                issued Shares in Flexsys Chemicals (M) Sdn. Bhd..

        (c)     Flexsys Chemicals (M) Sdn. Bhd. is not accustomed to act (nor
                is it under an obligation to act) in accordance with the
                directions, instructions or wishes of a director of any
                Borrower of which it is not a Subsidiary.

21.40   ON-LENDING
        (a)     Each Obligor confirms that there is a corporate benefit in it
                fulfilling its obligations under this Agreement.

        (b)     Flexsys Chemicals (M) Sdn. Bhd. ("FLEXSYS MALAYSIA") has no
                domestic borrowings in Malaysia and as and when the need
                arises and/or to comply with any condition which may be
                imposed by the FIC, either a Borrower shall advance funds from
                the Facilities to Flexsys Malaysia as inter-company loans or
                Flexsys Malaysia shall borrow hereunder in either case to fund
                its business operations in Malaysia.

21.41   INITIAL UTILISATION
        The initial Utilisation will be performed in accordance with the Funds
        Flow Statement provided in satisfaction of the condition precedent
        contained in Part 8(d) of Schedule 2 (Conditions Precedent) of this
        Agreement.

21.42   NO CLUSTER BOMBS OR ANTI-PERSONNEL MINES
        None of the Borrowers and none of their Subsidiaries carries out
        activities related to manufacturing, use, repair, exhibition for sale,
        sale, import, export, stockpiling or transport of cluster bombs,
        submunitions or anti-personnel mines.

21.43   REPETITION
        The Repeating Representations are deemed to be made by the Company (on
        its own behalf and on behalf of each other Obligor) (by reference to
        the facts and circumstances then existing) on:

        (a)     the date of each Utilisation Request and the first day of each
                Interest Period; and

        (b)     in the case of an Additional Obligor, the day on which the
                company becomes (or it is proposed that the company becomes)
                an Additional Obligor.

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22.     INFORMATION UNDERTAKINGS

        The undertakings in this Clause remain in force from the date of this
        Agreement for so long as any amount is outstanding under the Finance
        Documents or any Commitment is in force.

22.1    FINANCIAL STATEMENTS
        The Company shall supply to the Agent in sufficient copies for all the
        Lenders:

        (a)     as soon as the same become available, but in any event within
                120 days for sub-paragraph (i) below and 180 days for
                sub-paragraph (ii) below after the end of each of its
                financial years:

                (i)     the audited Combined Financial Statements of the Group
                        for that financial year; and

                (ii)    the audited financial statements of each Obligor for
                        that financial year; and

        (b)     as soon as the same become available, but in any event within
                45 days after the end of each quarter of each of its financial
                years:

                (i)     the Combined Financial Statements for that period; and

                (ii)    the financial statements of each Obligor for that
                        period.

22.2    COMPLIANCE CERTIFICATE
        (a)     The Company shall supply to the Agent, with each set of
                financial statements delivered pursuant to paragraph (a)(i) or
                (b)(i) of Clause 22.1 (Financial statements), a Compliance
                Certificate setting out (in reasonable detail) computations as
                to compliance with Clause 23 (Financial Covenants) as at the
                date as at which those financial statements were drawn up.

        (b)     Each Compliance Certificate shall be signed by two directors
                of the Company.

22.3    REQUIREMENTS AS TO FINANCIAL STATEMENTS
        (a)     The Company shall procure that each set of financial
                statements for each Obligor and for the Group delivered
                pursuant to Clause 22.1 (Financial statements) is prepared
                using GAAP (or local GAAP as applicable) and that in each case
                accounting practices and financial reference periods are
                materially consistent with those applied in the preparation of
                the Original Financial Statements for that Obligor and the
                Group, as applicable, unless, in relation to any set of
                financial statements, it notifies the Agent that there has
                been a material change in GAAP (or Local GAAP, as applicable),
                or the accounting practices or reference periods and its
                auditors (or, if appropriate, the auditors of the member of
                the Group) deliver to the Agent:

                (i)     a description of any material change necessary for
                        those financial statements to reflect the GAAP,
                        accounting practices and reference periods upon which
                        that Obligor's or the Group's (as applicable) Original
                        Financial Statements were prepared; and

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                (ii)    sufficient information, in form and substance as may
                        be reasonably required by the Agent, to enable the
                        Lenders to determine whether Clause 23 (Financial
                        Covenants) has been complied with and make an accurate
                        comparison between the financial position indicated in
                        those financial statements and that Obligor's or the
                        Group's Original Financial Statements, as applicable.

        (b)     If the Company notifies the Agent of a change in accordance
                with paragraph (i) above then the Company and Agent shall
                enter into negotiations in good faith with a view to agreeing:

                (i)     whether or not the change might result in any material
                        alteration in the commercial effect of any of the
                        terms of this Agreement; and

                (ii)    if so, any amendments to this Agreement which may be
                        necessary to ensure that the change does not result in
                        any material alteration in the commercial effect of
                        those terms

                and if any amendments are agreed they shall take effect and be
                binding on each of the Parties in accordance with their terms.

                Any reference in this Agreement to those financial statements
                shall be construed as a reference to those financial
                statements as adjusted to reflect the basis upon which the
                Original Financial Statements were prepared.

        (c)     The Combined Financial Statements prepared for the purposes of
                Clause 23 (Financial Covenants) and the covenant calculations
                shall be prepared using GAAP and in the event of there being
                any material change in GAAP or the accounting practices
                applied or reference periods used or its auditors, the
                provisions of paragraph (b) of this Clause 22.3 shall apply
                mutatis mutandis.

22.4    ERISA-RELATED INFORMATION
        The Company shall supply to the Agent (in sufficient copies for all
        the Lenders, if the Agent so requests):

        (a)     promptly and in any event within 15 days after any U.S.
                Obligor or any ERISA Affiliate files a Schedule B (or such
                other schedule as contains actuarial information) to IRS Form
                5500 in respect of an Employee Plan with Unfunded Pension
                Liabilities, a copy of such IRS Form 5500 (including the
                Schedule B);

        (b)     promptly and in any event within 30 days after any U.S.
                Obligor or any ERISA Affiliate knows or has reason to know
                that any ERISA Event which, individually or when aggregated
                with any other ERISA Event, would reasonably be expected to
                have a Material Adverse Effect has occurred, the written
                statement of the Chief Financial Officer of such U.S. Obligor
                or ERISA Affiliate, as applicable, describing such ERISA Event
                and the action, if any, which it proposes to take with respect
                to such ERISA Event and a copy of any notice filed with the
                PBGC or the IRS pertaining to such ERISA Event; PROVIDED THAT,
                in the case of ERISA Events under paragraph (d) of the
                definition thereof, the 30-day period set forth above shall be
                a 10-day period,

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                and, in the case of ERISA Events under paragraph (b) of the
                definition thereof, in no event shall notice be given later
                than the occurrence of the ERISA Event; and

        (c)     promptly, and in any event within thirty days, after becoming
                aware that there has been (i) a material increase in Unfunded
                Pension Liabilities, taking into account only Employee Plans
                with positive Unfunded Pension Liabilities; (ii) the existence
                of potential withdrawal liability under Section 4201 of ERISA,
                if the Parent and its ERISA Affiliates were to completely or
                partially withdraw from all Multiemployer Plans; (iii) the
                adoption of, or the commencement of contributions to, any
                Employee Plan subject to Section 412 of the Code by any
                Obligor or any ERISA Affiliate; or (iv) the adoption of any
                amendment to an Employee Plan subject to Section 412 of the
                Code which results in a material increase in contribution
                obligations of any Obligor, a detailed written description
                thereof from the Chief Financial Officer of each affected U.S.
                Obligor or ERISA Affiliate, as applicable.

22.5    INFORMATION: MISCELLANEOUS
        The Company shall supply to the Agent (in sufficient copies for all
        the Lenders, if the Agent so requests):

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

        (b)     promptly upon becoming aware of them, the details of any
                litigation, arbitration or administrative proceedings which
                are current, threatened or pending against any member of the
                Group, and which might, if adversely determined, be reasonably
                likely to have a Material Adverse Effect; and

        (c)     promptly, such further information regarding the financial
                condition, business and operations of any member of the Group
                as any Finance Party (through the Agent) may reasonably
                request (including, but not limited to, such information
                required under sections 13, 13a and 18 of the German Banking
                Act (Kreditwesengesetz)) but so that prior to a Default, no
                more than one request may be made in any three month period.

22.6    NOTIFICATION OF DEFAULT
        (a)     Each Obligor shall notify the Agent of any Default (and the
                steps, if any, being taken to remedy it) promptly upon
                becoming aware of its occurrence (unless that Obligor is aware
                that a notification has already been provided by another
                Obligor).

        (b)     Promptly upon a request by the Agent, the Company shall supply
                to the Agent a certificate signed by two of its directors or
                senior officers on its behalf certifying that to the best of
                their knowledge after due and careful enquiry no Default is
                continuing (or if a Default is continuing, specifying the
                Default and the steps, if any, being taken to remedy it).

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22.7    USE OF WEBSITES
        (a)     The Company may satisfy its obligation under this Agreement to
                deliver any information in relation to those Lenders ( the
                "WEBSITE LENDERS") who accept this method of communication by
                posting this information onto an electronic website designated
                by the Company and the Agent (the "DESIGNATED WEBSITE") if:

                (i)     the Agent expressly agrees (after consultation with
                        each of the Lenders) that it will accept communication
                        of the information by this method;

                (ii)    both the Company and the Agent are aware of the
                        address of and any relevant password specifications
                        for the Designated Website; and

                (iii)   the information is in a format previously agreed
                        between the Company and the Agent.

                If any Lender (a "PAPER FORM LENDER") does not agree to the
                delivery of information electronically then the Agent shall
                notify the Company accordingly and the Company shall supply
                the information to the Agent (in sufficient copies for each
                Paper Form Lender) in paper form. In any event the Company
                shall supply the Agent with at least one copy in paper form of
                any information required to be provided by it.

        (b)     The Agent shall supply each Website Lender with the address of
                and any relevant password specifications for the Designated
                Website following designation of that website by the Company
                and the Agent.

        (c)     The Company shall promptly upon becoming aware of its
                occurrence notify the Agent if:

                (i)     the Designated Website cannot be accessed due to
                        technical failure;

                (ii)    the password specifications for the Designated Website
                        change;

                (iii)   any new information which is required to be provided
                        under this Agreement is posted onto the Designated
                        Website;

                (iv)    any existing information which has been provided under
                        this Agreement and posted onto the Designated Website
                        is amended; or

                (v)     the Company becomes aware that the Designated Website
                        or any information posted onto the Designated Website
                        is or has been infected by any electronic virus or
                        similar software.

                If the Company notifies the Agent under paragraph (c)(i) or
                paragraph (c)(v) above, all information to be provided by the
                Company under this Agreement after the date of that notice
                shall be supplied in paper form unless and until the Agent and
                each Website Lender is satisfied that the circumstances giving
                rise to the notification are no longer continuing.

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        (d)     Any Website Lender may request, through the Agent, one paper
                copy of any information required to be provided under this
                Agreement which is posted onto the Designated Website. The
                Company shall comply with any such request within ten Business
                Days.

22.8    "KNOW YOUR CUSTOMER" CHECKS
        (a)     If:

                (i)     the introduction of or any change in (or in the
                        interpretation, administration or application of) any
                        law or regulation made after the date of this
                        Agreement;

                (ii)    any change in the status or the shareholders of an
                        Obligor after the date of this Agreement; or

                (iii)   a proposed assignment or transfer by a Lender of any
                        of its rights and obligations under this Agreement to
                        a party that is not a Lender prior to such assignment
                        or transfer,

                obliges the Agent or any Lender (or, in the case of paragraph
                (iii) above, any prospective new Lender) to comply with "know
                your customer" or similar identification procedures in
                circumstances where the necessary information is not already
                available to it, each Obligor shall promptly upon the request
                of the Agent or any Lender supply, or procure the supply of,
                such documentation and other evidence as is reasonably
                requested by the Agent (for itself or on behalf of any Lender)
                or any Lender (for itself or, in the case of the event
                described in paragraph (iii) above, on behalf of any
                prospective new Lender) in order for the Agent, such Lender
                or, in the case of the event described in paragraph (iii)
                above, any prospective new Lender to carry out and be
                satisfied it has complied with all necessary "know your
                customer" or other similar checks under all applicable laws
                and regulations pursuant to the transactions contemplated in
                the Finance Documents.

        (b)     Each Lender shall promptly upon the request of the Agent
                supply, or procure the supply of, such documentation and other
                evidence as is reasonably requested by the Agent (for itself)
                in order for the Agent to carry out and be satisfied it has
                complied with all necessary "know your customer" or other
                similar checks under all applicable laws and regulations
                pursuant to the transactions contemplated in the Finance
                Documents.

        (c)     The Company shall, by not less than 10 Business Days' prior
                written notice to the Agent, notify the Agent (which shall
                promptly notify the Lenders) of its intention to request that
                one of its Subsidiaries becomes an Additional Obligor pursuant
                to Clause 27 (Changes to the Obligors).

        (d)     Following the giving of any notice pursuant to paragraph (c)
                above, if the accession of such Additional Obligor obliges the
                Agent or any Lender to comply with "know your customer" or
                similar identification procedures in circumstances where the
                necessary information is not already available to it, the

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                Company shall promptly upon the request of the Agent or any
                Lender supply, or procure the supply of, such documentation
                and other evidence as is reasonably requested by the Agent
                (for itself or on behalf of any Lender) or any Lender (for
                itself or on behalf of any prospective new Lender) in order
                for the Agent or such Lender or any prospective new Lender to
                carry out and be satisfied it has complied with all necessary
                "know your customer" or other similar checks under all
                applicable laws and regulations pursuant to the accession of
                such Subsidiary to this Agreement as an Additional Obligor.

23.     FINANCIAL COVENANTS

23.1    FINANCIAL DEFINITIONS
        In this Clause 23.1:

        "ACQUISITION COSTS" means all non-periodic fees, costs and expenses,
        stamp, registration and other Taxes incurred by the Company or any
        other member of the Group in connection with the Akzo Nobel
        Retirement.

        "BORROWINGS" means, at any time, the outstanding principal, capital or
        nominal amount and any fixed or minimum premium payable on prepayment
        or redemption of any indebtedness for or in respect of:

        (a)     moneys borrowed and debit balances with financial
                institutions;

        (b)     any amount raised by acceptance under any acceptance credit
                facility;

        (c)     any amount raised pursuant to any note purchase facility or
                the issue of bonds, notes, debentures, loan stock or any
                similar instrument;

        (d)     the amount of any liability in respect of any lease or hire
                purchase contract which would, in accordance with GAAP, be
                treated as a finance or capital lease;

        (e)     receivables sold or discounted (other than any receivables to
                the extent they are sold on a non-recourse basis);

        (f)     any counter-indemnity obligation in respect of a guarantee,
                indemnity, bond, standby or documentary letter of credit or
                any other instrument issued by a bank or financial institution
                (excluding any given in respect of trade credit arising in the
                ordinary course of business);

        (g)     any amount raised by the issue of redeemable shares which are
                redeemable before the Termination Date of each Facility;

        (h)     any amount of any liability under an advance or deferred
                purchase agreement arranged primarily as a method of raising
                finance or financing the acquisition of an asset;

        (i)     any amount raised under any other transaction (including any
                forward sale or purchase agreement) having the commercial
                effect of a borrowing; and

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        (j)     (without double counting) the amount of any liability in
                respect of any guarantee or indemnity for any of the items
                referred to in paragraph (a) to (i) above.

        "COMBINED EBITDA" means in respect of any Relevant Period, the
        combined earnings before Combined Senior Interest Expenses, taxation,
        depreciation and amortisation of the Group,

        (a)     excluding:

                (i)     (to the extent otherwise included) any gain over book
                        value of any member of the Group or any Affiliate of
                        any such member and after adding back any loss on book
                        value arising on the sale, lease or disposal of any
                        asset by any member of the Group or any Affiliate of
                        any such member (other than on the sale of trading
                        stock) during such period and any gain or loss arising
                        on revaluation of any asset during such period); and

                (ii)    realised and unrealised exchange gains and losses
                        which do not relate to ordinary trading activities,

        (b)     and adding back:

                (i)     the non-cash component of any restructuring charges or
                        asset impairments arising as a result of restructuring
                        incurred during the period; and

                (ii)    the cash component of any restructuring expenditure
                        incurred during the period (subject to a maximum in
                        any one 12 month period of US$15,000,000 and a
                        cumulative cap during the term of the Facilities of
                        US$30,000,000); and

                (iii)   any cash expenditures incurred during the period for
                        the purposes of defending the Group's Intellectual
                        Property rights.

        "COMBINED FINANCIAL STATEMENTS" of the Group means the financial
        statements reflecting the combined financial statements of Flexsys
        Holding B.V. (and its Subsidiaries), Flexsys Rubber Chemicals Limited
        and Flexsys America L.P. (calculated in accordance with GAAP).

        "COMBINED SENIOR INTEREST EXPENSES" means, for any Relevant Period,
        the aggregate amount of the accrued interest, commission, fees,
        discounts, prepayment penalties or premiums and other finance payments
        in respect of Borrowings whether paid, payable or capitalised by any
        member of the Group in respect of that Relevant Period:

        (a)     EXCLUDING any such obligations to any other member of the
                Group;

        (b)     INCLUDING the interest element of leasing and hire purchase
                payments;

        (c)     INCLUDING any accrued commission, fees, discounts and other
                finance payments payable by any member of the Group under any
                interest rate hedging

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                arrangement (but excluding, for the avoidance of doubt, any
                marked to market hedging gains or losses);

        (d)     DEDUCTING any accrued commission, fees, discounts and other
                finance payments owing to any member of the Group under any
                interest rate hedging instrument (but excluding, for the
                avoidance of doubt, any marked to market hedging gains or
                losses);

        (e)     EXCLUDING any Acquisition Costs; and

        (f)     EXCLUDING any interest in respect of the loan made under the
                Subordinated Loan.

        "COMBINED SENIOR TOTAL FINANCIAL DEBT" means, at any time, the
        Combined Total Debt after deducting the aggregate amount of all
        obligations of the Group for or in respect of Borrowings under the
        Subordinated Loan and so that no amount shall be included or excluded
        more than once.

        "COMBINED TANGIBLE NET WORTH" means, at any time, the aggregate of the
        amounts paid up or credited as paid up on the issued ordinary share
        capital of the Company and Flexsys America L.P. and Flexsys Rubber
        Chemicals Limited and the aggregate amount of the reserves of the
        Group,

        INCLUDING:

        (a)     any amount credited to the share premium account;

        (b)     any capital redemption reserve fund; and

        (c)     any balance standing to the credit of the combined profit and
                loss account of the Group,

        BUT DEDUCTING:

        (a)     any debit balance on the combined profit and loss account of
                the Group;

        (b)     (to the extent included) any amount shown in respect of
                goodwill (including goodwill arising only on consolidation) or
                other intangible assets of the Group;

        (c)     any amount in respect of interests of non-Group members in
                Group subsidiaries (other than the interests in Flexsys
                America LP and Flexsys Rubber Chemicals Ltd);

        (d)     (to the extent included) any amounts arising from an upward
                revaluation of assets made at any time after 2006; and

        (e)     (to the extent included) any non-cash adjustments arising from
                accumulated currency adjustments made at any time after 2006,

        and so that no amount shall be included or excluded more than once.

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        "COMBINED TOTAL DEBT" means, at any time, the aggregate amount of all
        obligations of the Group for or in respect of Borrowings but:

        (a)     excluding any such obligations to any other member of the
                Group; and

        (b)     including, in the case of finance leases, only the capitalised
                value therefore,

        and so that no amount shall be included or excluded more than once.

        "EBITDA" means earnings before Combined Senior Interest Expenses,
        taxation, depreciation and amortisation.

        "RELEVANT PERIOD" means each period of twelve months ending on the
        last day of each quarter of the Company's financial year.

23.2    FINANCIAL CONDITION
        The Company shall ensure that:

        (a)     INTEREST COVER

                The ratio of Combined EBITDA to Combined Senior Interest
                Expenses in respect of any Relevant Period shall not be less
                than 4:1.

        (b)     SENIOR LEVERAGE

                The ratio of Combined Senior Total Financial Debt at any time
                to Combined EBITDA (the "SENIOR LEVERAGE RATIO") in respect of
                any Relevant Period shall not at any time exceed 3:1.

        (c)     COMBINED TANGIBLE NET WORTH

                The Combined Tangible Net Worth in respect of any Relevant
                Period shall not be less than US$75,000,000 plus an amount
                equal to 75 per cent. of the combined net income of the Group
                in respect of each complete financial year of the Company
                ending after the date of this Agreement.

23.3    FINANCIAL TESTING
        The financial covenants set out in Clause 23.2 (Financial condition)
        shall be tested quarterly by reference to each of the Combined
        Financial Statements of the Group and/or each Compliance Certificate
        delivered pursuant to Clause 22.2 (Compliance Certificate).

24.     GENERAL UNDERTAKINGS

        The undertakings in this Clause 24 remain in force from the date of
        this Agreement for so long as any amount is outstanding under the
        Finance Documents or any Commitment is in force.

24.1    AUTHORISATIONS
        Each Obligor shall promptly obtain, comply with and do all that is
        necessary to maintain in full force and effect any Authorisation
        required under any law or regulation of the Relevant Jurisdictions to
        enable it to perform its obligations under the Finance

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        Documents and subject to any Reservation to ensure the legality,
        validity, enforceability or admissibility in evidence in each Relevant
        Jurisdiction of any Finance Document.

24.2    COMPLIANCE WITH LAWS
        (a)     Each Obligor shall comply in all respects with all laws to
                which it may be subject, if failure so to comply might be
                reasonably likely to have a Material Adverse Effect subject to
                any Reservations.

        (b)     Each Dutch Obligor shall comply in all respects with the Dutch
                FSA.

24.3    NEGATIVE PLEDGE

        (a)     No Obligor shall (and the Company shall ensure that no other
                member of the Group will) create or permit to subsist any
                Security over any of its assets.

        (b)     No Obligor shall (and the Company shall ensure that no other
                member of the Group will):

                (i)     sell, transfer or otherwise dispose of any of its
                        assets on terms whereby they are or may be leased to
                        or re-acquired by an Obligor or any other member of
                        the Group;

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

                (iii)   enter into any arrangement under which money or the
                        benefit of a bank or other account may be applied,
                        set-off or made subject to a combination of accounts;
                        or

                (iv)    enter into any other preferential arrangement having a
                        similar effect,

                in circumstances where the arrangement or transaction is
                entered into primarily as a method of raising Financial
                Indebtedness or of financing the acquisition of an asset (any
                such matter being "QUASI-SECURITY").

        (c)     Subject to paragraph (d) below, paragraphs (a) and (b) above
                do not apply to:

                (i)     any netting or set-off arrangement entered into by any
                        member of the Group in the ordinary course of its
                        banking arrangements for the purpose of netting debit
                        and credit balances;

                (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 lien arising by operating of law in the ordinary
                        course of business and securing amounts more than 30
                        days overdue PROVIDED THAT such overdue amounts are
                        being contested by the relevant Obligor in good faith;

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                (iv)    any Security over or affecting (or transaction
                        ("QUASI-SECURITY") described in paragraph (b) above)
                        affecting any asset acquired by a member of the Group
                        after the date of this Agreement if:

                        (A)     the Security or Quasi-Security was not created
                                in contemplation of the acquisition of that
                                asset by a member of the Group;

                        (B)     the principal amount secured has not been
                                increased in contemplation of, or since the
                                acquisition of that asset by a member of the
                                Group; and

                        (C)     the Security or Quasi-Security is removed or
                                discharged within three months of the date of
                                acquisition of such asset;

                (v)     any Security or Quasi-Security over or affecting any
                        asset of any company which becomes a member of the
                        Group after the date of this Agreement, where the
                        Security or Quasi-Security is created prior to the
                        date on which that company becomes a member of the
                        Group, if:

                        (A)     the Security or Quasi-Security was not created
                                in contemplation of the acquisition of that
                                company;

                        (B)     the principal amount secured has not increased
                                in contemplation of or since the acquisition
                                of that company; and

                        (C)     the Security or Quasi-Security is removed or
                                discharged within three months of that company
                                becoming a member of the Group; or

                (vi)    the Transaction Security;

                (vii)   any netting or set-off arrangement entered into under
                        any hedging transaction permitted under Clause 24.14
                        where the obligations of the parties are calculated by
                        reference to net exposure under that hedging
                        transaction;

                (viii)  any Quasi-Security arising as a result of a sale,
                        transfer or other disposal which is a permitted under
                        Clause 24.4 (Disposals);

                (ix)    any Security or Quasi-Security created after the
                        commencement of legal proceedings with a view to
                        preserving the status quo between the litigants
                        pending the outcome of those proceedings, PROVIDED
                        THAT such Security or Quasi-Security does not secure
                        Financial Indebtedness exceeding in aggregate
                        US$1,000,000 (or its equivalent in another currency or
                        currencies) at any time and is released forthwith upon
                        final determination of such litigation PROVIDED THAT
                        such Security or Quasi-Security shall be created or
                        arise solely pursuant to a legal obligation or
                        requirement;

                (x)     any Security or Quasi-Security over goods, documents
                        of title to goods and related documents and insurances
                        and their proceeds to secure liabilities of any member
                        of the Group in respect of a letter of credit or other
                        similar instrument issued for all or part of the
                        purchase price and

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                        costs of shipment, insurance and storage of goods
                        acquired by any member of the Group in the ordinary
                        course of trading;

                (xi)    easements, zoning restrictions and similar
                        encumbrances on real property and minor irregularities
                        in the title thereto that do not (i) secure
                        obligations for the payment of money or (ii)
                        materially impair the value of such property or its
                        use by any member of the Group in the ordinary course
                        of business;

                (xii)   any Security or Quasi-Security arising under any
                        retention of title, hire purchase or conditional sale
                        arrangement or arrangements having similar effect in
                        respect of goods supplied to a member of the Group in
                        the ordinary course of trading and not as a result of
                        any default or omission by any member of the Group;

                (xiii)  any Quasi Security arising as a result of any
                        factoring of receivables permitted under Clause 24.14;

                (xiv)   any Security or Quasi-Security with the consent of the
                        Majority Lenders;

                (xv)    any Security or Quasi-Security created or subsisting
                        to secure any obligations incurred in order to comply
                        with the requirements of Section 8a of the German
                        Partial Retirement Act (Altersteilzeitgesetz) and/or
                        Section 7d of the German Sozialgesetzbuch IV;

                (xvi)   any Security or Quasi-Security securing indebtedness
                        the principal amount of which (when aggregated with
                        the principal amount of any other indebtedness which
                        has the benefit of Security or Quasi Security given by
                        any member of the Group other than any permitted under
                        paragraphs (i) to (xv) above) does not at any time
                        exceed US$1,500,000 (or its equivalent in another
                        currency or currencies).

        (d)     Flexsys Industria e Comercio Ltda is not permitted to create
                or permit to subsist any Security or Quasi-Security nor incur
                any secured or quasi-secured obligations (howsoever described)
                referred to in paragraph (c)(iv) to (c)(xv) above.

        (e)     No Belgian Obligor shall create any Security or Quasi-Security
                (including but by no means limited to any pledge) over or
                affecting any inventory of that Belgian Obligor.

24.4    DISPOSALS
        (a)     No Obligor shall (and the Company shall ensure that no other
                member of the Group will), enter into a single transaction or
                a series of transactions (whether related or not) and whether
                voluntary or involuntary to sell, lease, transfer or otherwise
                dispose of any asset.

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        (b)     Paragraph (a) above does not apply to any sale, lease,
                transfer or other disposal:

                (i)     made in the ordinary course of trading and on arm's
                        length terms of the disposing entity;

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

                (iii)   by one Obligor to another Obligor PROVIDED THAT if the
                        first Obligor has granted security over any such asset
                        that other Obligor must be party to a legally valid
                        binding and enforceable Security Document which
                        creates a first priority Security over the assets
                        transferred;

                (iv)    for cash on arm's length terms of any obsolete assets
                        not required for the efficient operation of the
                        business of the Group by any member of the Group;

                (v)     of cash where that disposal is not otherwise
                        prohibited by the Finance Documents;

                (vi)    by the Company of all shares held in Flexsys America
                        Co. to Solutia Inc. (or any of its affiliates); or

                (vii)   of assets by a member of the Group which is not an
                        Obligor to another member of the Group which is not an
                        Obligor; or

                (viii)  of assets with the consent of the Majority Lenders; or

                (ix)    not otherwise permitted where the higher of the market
                        value and consideration receivable (when aggregated
                        with the higher of the market value and/or
                        consideration (as the case may be) receivable for any
                        other sale, lease, transfer or other disposal) does
                        not exceed US$10,000,000 (or its equivalent in another
                        currency or currencies).

24.5    MERGER
        No Obligor shall (and the Company shall ensure that no other member of
        the Group will) enter into any amalgamation, demerger, merger or
        corporate reconstruction (including by way of dividend in specie),
        other than:

        (a)     any such arrangements involving only members of the Group; or

        (b)     the transfer of ownership of Flexsys America Co. to Solutia
                Inc..

24.6    CHANGE OF BUSINESS
        Save as may be required in connection with the German Debt Pushdown,
        the Company shall procure that no material adverse change is made to
        the general nature of the business of the Company or the Group from
        that carried on at the date of this Agreement.

24.7    INSURANCE
        (a)     Each Obligor shall (and the Company shall ensure that each
                other member of the Group will) maintain insurances on and in
                relation to its business and assets with reputable independent
                underwriters or insurance companies:

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                (i)     against those risks, and to the extent, usually
                        insured against by prudent companies located in the
                        same or a similar location and carrying on a similar
                        business; and

                (ii)    against those risks, and to the extent, required by
                        applicable law or by contract.

        (b)     Without limiting paragraph (a) above, each Obligor shall (and
                the Company shall ensure that each other member of the Group
                will) maintain insurance on all of its assets of an insurable
                nature against loss or damage by fire and other risks normally
                insured against by persons carrying on a similar business in a
                sum or sums at least equal to their replacement value (meaning
                the total cost of entirely rebuilding, reinstating or
                replacing those assets if completely destroyed, together with
                architects', surveyors' and other professional fees).

        (c)     Each Obligor shall (and the Company shall ensure that each
                other member of the Group will) promptly pay premiums and do
                all things necessary to maintain insurances required of it by
                paragraphs (a) and (b) above

24.8    ENVIRONMENTAL COMPLIANCE
        Each Obligor shall (and the Company shall ensure that each member of
        the Group will) comply in all material respects with all Environmental
        Law and obtain and maintain any Environmental Permits and take all
        reasonable steps in anticipation of known or expected future changes
        to or obligations under the same where failure to do so might be
        reasonably likely to have a Material Adverse Effect.

24.9    ENVIRONMENTAL CLAIMS
        The Company shall inform the Agent in writing as soon as reasonably
        practicable upon becoming aware of the same:

        (a)     if any Environmental Claim has been commenced or (to the best
                of the Company's knowledge and belief) is threatened against
                any member of the Group; or

        (b)     of any facts or circumstances which will or are reasonably
                likely to result in any Environmental Claim being commenced or
                threatened against any member of the Group,

        where the claim would be reasonably likely, if determined against that
        member of the Group, to have a Material Adverse Effect.

24.10   TAXATION
        Each Obligor shall (and the Company shall ensure that each member of
        the Group will) duly and punctually pay and discharge all Taxes
        imposed upon it or its assets within the time period allowed without
        incurring penalties (expect to the extent that (a) such payment is
        being contested in good faith, (b) adequate reserves are being
        maintained for those Taxes and (c) where such payment can be lawfully
        withheld).

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24.11   ACQUISITIONS
        (a)     No Obligor shall (and the company shall ensure that no other
                member of the Group will) acquire any company, business or
                undertaking.

        (b)     Paragraph (a) above shall not apply to any acquisition by a
                member of the Group of any company, business or undertaking
                (including for the avoidance of doubt, any acquisition in
                connection with the German Debt Pushdown) provided that:

                (i)     the Finance Parties will enjoy the same or equivalent
                        Security and recourse to such asset following
                        completion of that acquisition;

                (ii)    the Company certifies to the Agent (signed by two
                        directors) in form and substance substantially similar
                        to the certificate contained in Schedule 13 (Sources
                        and Uses Table) that following such acquisition, the
                        Group will continue to have excess liquidity (as
                        defined in Clause 24.18 (Subordinated Loan) of this
                        Agreement) of at least US$40,000,000;

                (iii)   the Company delivers financial projections
                        demonstrating compliance with the financial covenants
                        contained in Clause 23 (Financial Covenants) of this
                        Agreement for the balance of the term of the
                        Facilities, financial projections of which shall take
                        into account such acquisition and be prepared on a pro
                        forma basis; and

                (iv)    the consideration for any acquisition (when aggregated
                        with the consideration for any other acquisition
                        permitted under this paragraph (b)) does not exceed
                        US$30,000,000 in any financial year of the Group and
                        if the consideration for such acquisitions exceeds
                        US$30,000,000 in aggregate in any financial year the
                        Group must have the prior consent of the Agent (acting
                        on instruction of the Majority Lenders).

24.12   LOANS AND GUARANTEES
        (a)     No Obligor shall (and the Company shall ensure that no member
                of the Group will) make any loans, grant any credit (save in
                the ordinary course of business or to another member of the
                Group (including for the avoidance of doubt, as may be
                required in connection with the German Debt Pushdown)) or give
                any guarantee or indemnity (except as required under any of
                the Finance Documents) to or for the benefit of any person or
                otherwise voluntarily assume any liability, whether actual or
                contingent, in respect of any obligation of any person other
                than:

                (i)     any guarantee, bond, indemnity or counter-indemnity
                        existing at the date of this Agreement; or

                (ii)    any unsecured guarantee issued by an Obligor in
                        respect of the Financial Indebtedness of any other
                        member of Group which Financial Indebtedness is
                        permitted under the Finance Documents;

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                (iii)   any unsecured guarantee issued by a member of the
                        Group on arm's length terms (including any
                        counter-indemnity obligation) and in the ordinary
                        course of its trading, not in respect of Financial
                        Indebtedness;

                (iv)    the endorsement of negotiable instruments in the
                        ordinary course of trade;

                (v)     a loan from a member of the Group to its directors
                        and/or employees PROVIDED THAT the aggregate amount of
                        loans to directors or employees of members of the
                        Group does not exceed US$10,000 at any time;

        (b)     No Obligor shall (and the Company shall ensure that no member
                of the Group will) agree to any arrangement after the date of
                this Agreement which might increase the amount which it may be
                liable to pay in connection with any guarantee, bond,
                indemnity or counter-indemnity permitted under paragraph
                (a)(i) above, other than in respect of any guarantee, bond,
                indemnity or counter-indemnity issued by an Obligor to another
                member of the Group.

        (c)     Notwithstanding the foregoing, no loans or credit will be
                provided by any member of the Group to Solutia Inc. or any of
                its affiliated debtors and no member of the Group will give
                any guarantee or indemnity to any person (except as required
                under any of the Finance Documents) to or for the benefit of
                any person or otherwise voluntarily assume any liability,
                whether actual or contingent, in respect of any obligation of
                Solutia Inc. or any of its Affiliates.

24.13   DIVIDENDS
        (a)     Subject to Clause 24.5(b) and Clause 24.18(c), no Obligor
                shall (and the Company shall ensure that no member of the
                Group will) pay, make or declare any dividend or other
                distribution in respect of any financial year of that member
                of the Group to any person or persons outside the Group unless
                and until:

                (i)     Solutia Inc.'s proceedings under Title 11 of the
                        United States of America Code entitled Bankruptcy have
                        closed and a final decree has been entered by the
                        bankruptcy court in which such proceedings have been
                        filed; and

                (ii)    after giving effect to the dividend or other
                        distribution, the Combined Tangible Net Worth as
                        calculated on a pro forma basis will equal or exceed
                        US$200,000,000; and

                (iii)   after giving effect to the dividend or other
                        distribution, the Senior Leverage ratio (as calculated
                        on a pro forma basis and in accordance with paragraph
                        (b) of Clause 23.2 (Financial condition) will be less
                        than 1.75:1.

        (b)     Notwithstanding the foregoing, the Company may distribute in
                kind its shareholding in Flexsys America Co.

24.14   INDEBTEDNESS
        (a)     The Company shall ensure that no member of the Group shall
                incur, create or permit to subsist or have outstanding any
                Financial Indebtedness for the credit

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                of any person (including, for the avoidance of doubt, Solutia
                Inc. or any of its Affiliates) which is not a member of the
                Group or enter into any agreement or arrangement whereby it is
                entitled to incur, create or permit to subsist any Financial
                Indebtedness.

        (b)     Paragraph (a) above does not apply to any Financial
                Indebtedness:

                (i)     arising under or permitted by the Finance Documents;

                (ii)    arising under the Subordinated Loan as in force at the
                        date of this Agreement and subject always to the terms
                        of this Agreement and the Intercreditor Agreement;

                (iii)   any Financial Indebtedness arising under a loan or
                        guarantee permitted pursuant to Clause 24.12;

                (iv)    any Financial Indebtedness arising under any unsecured
                        derivative transaction to hedge actual or projected
                        interest or currency exposure arising in the ordinary
                        course of business of a member of the Group and not
                        for speculative purposes; or

                (v)     not falling within paragraph (b)(i) to (b)(iv) above
                        (including letters of credit issued pursuant to
                        arrangements outside of this Agreement) if the
                        aggregate amount drawn at any time does not exceed
                        US$30,000,000 (or its equivalent) and PROVIDED THAT
                        such Financial Indebtedness is not incurred for the
                        credit of Solutia Inc. or any of its Affiliates.

        (c)     Notwithstanding the foregoing, Flexsys Industria e Comercio
                Ltda is not entitled to incur, create or permit to subsist any
                Financial Indebtedness other than:

                (i)     Financial Indebtedness arising under or permitted by
                        the Finance Documents;

                (ii)    Financial Indebtedness incurred for the credit of
                        another member of the Group; and/or

                (iii)   Financial Indebtedness constituting trade credit
                        incurred in the ordinary course of trading.

        (d)     Notwithstanding the foregoing, Flexsys America L.P. and
                Flexsys Industria e Comercio Ltda are not entitled to incur,
                create or permit to subsist any Financial Indebtedness other
                than:

                (i)     Financial Indebtedness arising under or permitted by
                        the Finance Documents;

                (ii)    Financial Indebtedness incurred for the credit of
                        another member of the Group;

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                (iii)   Financial Indebtedness constituting trade credit
                        incurred in the ordinary course of trading;

                (iv)    Financial Indebtedness under the Subordinated Loan;
                        and/or

                (v)     Financial Indebtedness not exceeding US$5,000,000 in
                        aggregate between both Flexsys America L.P. and
                        Flexsys Industria e Comercio Ltda.

24.15   PRESERVATION OF ASSETS
        Each Obligor shall, and the Company shall ensure that each member of
        the Group shall, maintain and preserve, to a standard of repair
        consistent with that maintained by companies carrying on businesses
        similar to that carried on by the Group (ordinary wear and tear
        excepted), all of its assets that are necessary for the conduct of its
        business, as conducted at the date of this Agreement.

24.16   ACCESS
        Each Obligor shall, and the Company shall ensure that each member of
        the Group whose shares are the subject of the Transaction Security
        shall:

        (a)     subject to pre-existing duties of confidentiality, on request
                of the Agent, provide the Agent and Security Trustee with any
                information the Agent or Security Trustee may reasonably
                require about that company's business and affairs, the Charged
                Property and its compliance with the terms of the Security
                Documents; and

        (b)     permit the Security Trustee, its representatives, delegates,
                professional advisers and contractors, free access at all
                reasonable times and on reasonable notice at the cost of the
                Obligors, (a) subject to pre-existing duties of
                confidentiality, to inspect and take copies and extracts from
                the books, accounts and records of that company and (b) to
                view the Charged Property (without becoming liable as
                mortgagee in possession) but so that prior to the occurrence
                of an Event of Default, no more than one such inspection
                and/or viewings may take place in any financial year in
                respect of any Obligor.

24.17   PARI PASSU RANKING
        Each Obligor shall, and the Company shall ensure that each member of
        the Group shall ensure that its payment obligations under the Finance
        Documents rank at least pari passu with the claims of all its other
        unsecured and unsubordinated creditors, except for obligations
        mandatorily preferred by law applying to companies generally.

24.18   SUBORDINATED LOAN
        (a)     Any increase to the principal amount of the Subordinated Loan
                (such increase being up to a maximum principal amount of
                US$175,000,000) that may be agreed between the Company and
                Solutia Inc. having regard to the liquidity and funding needs
                of the Group as a whole shall be permitted, subject to prior
                approval of the increase being obtained from the bankruptcy
                court in which Solutia Inc.'s proceedings under Title 11 of
                the United States of America Code entitled Bankruptcy have
                been filed, if applicable.

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        (b)     Interest on the Subordinated Loan shall be capitalised and
                shall not be due and payable unless and until:

                (i)     Solutia Inc.'s proceedings under Title 11 of the
                        United States of America Code entitled Bankruptcy have
                        closed and a final decree has been entered by the
                        bankruptcy court in which such proceedings have been
                        filed; and

                (ii)    after giving effect to desired level of interest to be
                        paid, the Combined Tangible Net Worth as calculated on
                        a pro forma basis will equal or exceed $200,000,000;
                        and

                (iii)   after giving effect to desired level of interest to be
                        paid, the Senior Leverage ratio (as calculated on a
                        pro forma basis and in accordance with paragraph (b)
                        of Clause 23.2 (Financial Condition)) will be less
                        than 1.75:1.

        (c)     If the Borrower determines that there is excess liquidity in
                the Group ("EXCESS LIQUIDITY" being understood by all parties
                to this Agreement to be cash and availability under this
                Agreement that is readily available to the Group and not
                required by the Group to meet its funding requirements,
                disregarding any cash that is being used for collateral or
                similar purposes of the Group) as a direct result of the
                Acquisition Costs being less than anticipated at Financial
                Close, the Borrower shall be entitled to make a one-time
                repayment towards the balance of the debt outstanding under
                the Subordinated Loan (or by payment of a preferred dividend
                to Solutia Europe N.V.) of an amount up to the excess of
                liquidity in the Group within 30 days of Financial Close
                PROVIDED THAT:

                (i)     the Borrower certifies that there is excess liquidity
                        in the Group and the amount thereof;

                (ii)    the Borrower certifies that the Acquisition Costs were
                        or will be less than anticipated at Financial Close;

                (iii)   the Borrower completes and certifies the Sources and
                        Uses Table set out in Schedule 13 (Sources and Uses
                        Table);

                (iv)    in calculating the excess liquidity of the Group the
                        Borrower must:

                        (A)     take into account all cash and undrawn
                                availability under Facility B; and

                        (B)     take into account the principal amount
                                outstanding under the Subordinated Loan at
                                Financial Close; and

                        (C)     take into account the principal amount
                                outstanding under the Facilities at Financial
                                Close; and

                        (D)     take into account any (growth) capital
                                expenditure in excess of the capital
                                expenditure either included in the financial
                                model or that the Group can reasonably expect
                                to entertain; and

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                        (E)     deduct the actual purchase price of the Akzo
                                Nobel Retirement; and

                        (F)     deduct the payments made (or to be made)
                                pursuant to the Long Term Incentive
                                Compensation; and

                        (G)     deduct the payments made (or to be made) under
                                the Pension Fund Obligations; and

                        (H)     deduct the payments made (or to be made)
                                pursuant to the Crystex Acquisition; and

                        (I)     deduct the repayment in full of all amounts
                                outstanding under the Existing Facility; and

                        (J)     deduct US$40,000,000; and

                (v)     after giving effect to the one-time repayment, the
                        balance of the debt still outstanding under the
                        Subordinated Loan shall be a minimum of
                        US$100,000,000;

                (vi)    the Borrower shall continue to be in compliance with
                        all applicable provisions under Clause 22 (Information
                        Undertakings), Clause 23 (Financial covenants) and
                        Clause 24 (General Undertakings); and

                (vii)   if a portion of the payment is made by way of a
                        preferred dividend to Solutia Europe N.V., the
                        aggregate amount of such preferred dividend does not
                        exceed US$10,000,000.

24.19   RELATIONSHIP WITH SOLUTIA INC.
        (a)     The Company shall ensure that no member of the Group shall
                become a debtor in a proceeding pursuant to Title 11 of the
                United States Code including in connection with the Chapter 11
                proceedings of Solutia Inc. and its affiliated debtors in such
                proceedings from time to time (collectively, for the purposes
                of this Clause 24.19 (Relationship with Solutia Inc.),
                "SOLUTIA") currently pending and jointly administered before
                the United States Bankruptcy Court for the Southern District
                of New York 03-17949 (PCB).

        (b)     Ordinary corporate formalities (as construed in accordance
                with accounting principles and practices generally accepted in
                the Relevant Jurisdictions) shall be maintained and observed
                at all times between all members of the Group and Solutia. In
                connection therewith, at all times, all members of the Group
                shall (i) maintain separate books, accounting records (which
                includes separate financial statements (which may be
                unaudited) showing assets and liabilities separate and apart
                from those of any other Person), bank accounts, and other
                entity documents and records separate from those of Solutia;
                (ii) hold itself out to the public as a legal entity separate
                from Solutia; (iii) not commingle its assets with assets of
                Solutia or any other Person and not hold itself out as being
                liable for the debts of another; (iv) conduct business in its
                own name and through its own authorised officers and agents
                and strictly comply with all organisational formalities
                necessary to maintain its existence; (v) manage its
                liabilities

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                separately from those of Solutia and pay and discharge its own
                liabilities (including all administrative expenses) from its
                own separate assets; (vi) maintain an arm's length
                relationship with Solutia and enter into transactions with
                Solutia only on a commercially reasonable basis; (vii) not
                hold out its credit or assets as being available to satisfy
                the obligations of others; and (viii) not pledge its assets
                for the benefit of Solutia or enter into any guarantees or
                otherwise become liable for the obligations of Solutia.

24.20   ADDITIONAL SECURITY
        (a)     Subject to compliance with the Agreed Security Principles,
                each of the Company and each Material Group Member shall
                accede to this Agreement as a Guarantor within 45 days of
                becoming a Material Group Member and grant such security as
                the Security Trustee reasonably requests within such time
                period (and having regard to the type of Security Interests
                created over relevant classes of assets under the Security
                Documents at Financial Close).

        (b)     Subject to the Agreed Security Principles each of the Company
                and each Material Group Member shall promptly (and in any
                event within 45 days of being requested or such longer period
                as the Agent (acting on instructions of the Majority Lenders)
                may agree, having regard to any practical issues involved in
                the granting of such additional Security)) grant to the
                Security Trustee additional Security in the form of first
                ranking fixed Security over all of its assets and undertakings
                if so requested by the Agent (acting reasonably on its own
                behalf or on instruction of the Majority Lenders) having
                regard to the circumstances of the Group and the shareholders
                of the Group as a whole.

24.21   COMPLIANCE WITH ERISA
        No Obligor shall:

        (a)     allow, or permit any of its ERISA Affiliates to allow, (i) the
                termination of any Employee Plan with respect to which any
                Obligor or any ERISA Affiliate may have any liability, (ii)
                any Obligor or ERISA Affiliates to withdraw from any Employee
                Plan, (iii) any ERISA Event to occur with respect to any
                Employee Plan, or (iv) any Accumulated Funding Deficiency (as
                defined in Section 302 of ERISA and Section 412 of the Code),
                whether or not waived, to exist involving any of its Employee
                Plans; to the extent that any of the events described in (i),
                (ii), (iii) or (iv), singly or in the aggregate, could have a
                Material Adverse Effect;

        (b)     allow, or permit any of its ERISA Affiliates to allow, (i) the
                aggregate amount of Unfunded Pension Liability among all
                Employee Plans (taking into account only Employee Plans with
                positive Unfunded Pension Liability) at any time to exist
                where such amount could have a Material Adverse Effect; or
                (ii) the aggregate potential withdrawal liability under
                Section 4201 of ERISA, if the Company and its ERISA Affiliates
                were to completely or partially withdraw from all
                Multiemployer Plans, to exist where such amount could have a
                Material Adverse Effect; or

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        (c)     fail, or permit any of its ERISA Affiliates to fail, to comply
                in any material respect with ERISA or the related provisions
                of the Code, if any such non-compliance, singly or in the
                aggregate, would be reasonably likely to have a Material
                Adverse Effect.

24.22   FEDERAL RESERVE REGULATIONS
        Each U.S. Borrower will use the Facilities without violating
        Regulations T, U and X.

24.23   COMPLIANCE WITH U.S. REGULATIONS
        No Obligor shall (and the Company shall ensure that no other member of
        the Group will) become an "investment company," or an "affiliated
        person" of, or "promoter" or "principal underwriter" for, an
        "investment company," as such terms are defined in the 1940 Act.
        Neither the making of any Loan, or the application of the proceeds or
        repayment of any Loan by any Obligor nor the consummation of the other
        transactions contemplated by this agreement will violate any provision
        of such act or any rule, regulation or order of the SEC under the 1940
        Act.

24.24   ANTI-MONEY LAUNDERING
        Each Obligor will use commercially reasonable efforts to ensure that
        no funds used to pay the obligations under the Finance Documents are
        derived from any unlawful activity.

24.25   FURTHER ASSURANCE
        (a)     Each Obligor shall (and the Company shall ensure that each
                member of the Group will) promptly do all such acts or execute
                all such documents (including assignments, transfers,
                mortgages, charges, notices and instructions) as the Security
                Trustee may reasonably specify) and in such form as the
                Security Trustee may reasonably require in favour of the
                Security Trustee or its nominee(s)):

                (i)     to perfect the Security created or intended to be
                        created under or evidenced by the Security Documents
                        (which may include the execution of a mortgage,
                        charge, assignment or other Security over all or any
                        of the assets which are, or are intended to be, the
                        subject of the Transaction Security) or for the
                        exercise of any rights powers and remedies of the
                        Security Trustee or the Finance Parties provided by or
                        pursuant to the Finance Documents or by law;

                (ii)    to confer on the Security Trustee or confer on the
                        Finance Parties Security over any property and assets
                        of that Obligor located in any jurisdiction equivalent
                        or similar to the Security intended to be conferred by
                        or pursuant to the Security Documents; and/or

                (iii)   take all such action as is available to it (including
                        making all filings and registrations) as may be
                        necessary for the purpose of the creation, perfection,
                        protection or maintenance of any Security conferred or
                        intended to be conferred on the Security Trustee or
                        the Finance Parties by or pursuant to the Finance
                        Documents.

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24.26   COMPANY AND MATERIAL GROUP MEMBER PROFIT
        Subject to compliance with the Agreed Security Principles, the
        Obligors shall at all times represent in aggregate a minimum of:

        (a)     85 per cent. of the Combined EBITDA; and/or

        (b)     85 per cent. of the combined assets of the Group; and/or

        (c)     85 per cent. of the combined revenue (as calculated in
                accordance with GAAP) of the Group,

        and to be determined by reference to the quarterly unaudited Combined
        Financial Statements of the Group.

24.27   CAPITAL REDUCTION
        (a)     The Company, Flexsys America L.P. and Flexsys Rubber Chemicals
                Limited shall not be subject to any cancellation of shares,
                share buy-back or other reduction of issued share capital or
                partnership interests.

        (b)     Paragraph (a) above does not apply to any cancellation of
                shares or other capital reduction that arises as a direct
                consequence of the Akzo Nobel Retirement (whensoever cancelled
                or reduced).

24.28   MALAYSIAN CENTRAL BANK
        Flexsys Chemicals (M) Sdn. Bhd. undertakes to submit the following
        information in relation to the guarantee given by it under this
        Agreement and the security created by it under the deed of debenture,
        the lien holder's caveat and the charge of its real property held
        under HS(D) 20034 PT 8004 and HS(D) 20035 PT both in the Mukim of
        Sungai Karang, District of Kuantan, State of Pahang, Malaysia, to BNM
        for registration and to obtain an acknowledgement of registration from
        BNM prior to delivery of the first Utilisation Request and the Company
        undertakes to procure that Flexsys Chemicals (M) Sdn. Bhd. complies
        with its obligations under this Clause 24.28 (Malaysian Central Bank)
        within such time period:

        (a)     its full name, as issuer of the relevant guarantee, the
                debenture, the lien holder's caveat and the charge;

        (b)     the full names of all parties whose obligations are guaranteed
                under such guarantee and in favour of whom the debenture and
                charge are created;

        (c)     the amount guaranteed under such guarantee and the amount
                secured under the debenture and the charge;

        (d)     the full name and address of the beneficiary(ies) of such
                guarantee, debenture and charge; and

        (e)     the purpose of such guarantee, debenture, the lien holder's
                caveat and charge; and

        (f)     any other information required by BNM.

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        On and at any time after the occurrence of an Event of Default,
        Flexsys Chemicals (M) Sdn. Bhd, undertakes to notify BNM that the
        guarantee given by it under this Agreement and the security created by
        it under the deed of debenture, the lien holder's caveat and the
        charge of its real property held under HS(D) 20034 PT 8004 and HS(D)
        20035 PT both in the Mukim of Sungai Karang, District of Kuantan,
        State of Pahang, Malaysia to BNM will be called upon, failing which
        the Security Trustee shall be entitled to notify BNM of the same.

        Flexsys Chemicals (M) Sdn. Bhd. further undertakes to notify BNM
        changes to the guarantee under this Agreement and the security created
        by it under the deed of debenture, the lien holder's caveat and the
        charge, and to provide BNM with any information they may require from
        time to time.

24.29   PENSIONS
        (a)     The Company shall ensure that all pension schemes maintained
                or operated by or for the benefit of any member of the Group
                and/or any of its employees:

                (i)     are maintained and operated in all material respects
                        in accordance with all applicable laws and contracts
                        and their governing provisions; and

                (ii)    are funded substantially in accordance with the
                        governing provisions of the scheme with any funding
                        shortfall advised by actuaries of recognised standing
                        being rectified in accordance with those governing
                        provisions

                except where failure to maintain or fund could not be
                reasonably likely to have a Material Adverse Effect.

        (b)     The Company shall promptly notify the Agent of any material
                change in the rate of contributions to any pension schemes
                referred to in paragraph (a) above paid or recommended to be
                paid (whether by the scheme actuary or otherwise) or required
                (by law or otherwise).

24.30   PERFECTION
        The Obligors shall complete any applicable Perfection Requirements in
        accordance with the Finance Documents and, where a time limit is
        imposed by law or regulation, in any event within such time limit.

24.31   LIMITATIONS OF GENERAL UNDERTAKINGS
        (a)     Notwithstanding the introductory provision of Clause 24
                (General Undertakings) (but with-out prejudice to the
                performance of any of the obligations under Clause 24 (General
                Undertakings) by any Obligor whose relevant jurisdiction is
                not the Federal Republic of Germany), the undertakings set out
                in Clauses 24.4 (Disposals), 24.5 (Merger), 24.6 (Change of
                Business), 24.11 (Acquisitions), and 24.13 (Dividends) (such
                undertakings, the "RELEVANT UNDERTAKINGS") are not and shall
                not be given by any German Obligor whose relevant jurisdiction
                is the Federal Republic of Germany (each a "GERMAN OBLIGOR").
                However:

                (i)     each German Obligor shall give to the Agent not less
                        than 20 Business Days' prior written notice if it or
                        any of its Subsidiaries proposes to take

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                        or permit any action or circumstance which, if all the
                        Relevant Undertakings had been given by that German
                        Obligor on the Closing Date and had thereafter
                        remained in force, would constitute a breach of any of
                        the Relevant Undertakings by a member of the German
                        Group. On receipt of any such notice, the Agent shall
                        without undue delay send a copy to each Lender;

                (ii)    the Agent shall be entitled, within 10 Business Days
                        of receipt of a notice under sub-paragraph (a) above,
                        to request that the relevant German Obligor supply to
                        the Agent in sufficient copies for the Lenders, such
                        further relevant information as the Agent (acting
                        reasonably) may consider necessary for the purposes of
                        this Clause 24.31 (Limitations of General
                        Undertakings) and such German Obligor shall supply
                        such further information promptly and in any event
                        within 10 Business Days of the date of request
                        therefore;

                (iii)   if any Lender considers that the relevant action or
                        circumstance (taken alone or together with other
                        actions or circumstances, whether or not permitted
                        hereunder), may have a Material Adverse Effect or
                        materially and adversely affects its interests as a
                        Lender under the Facility Documents, it may so notify
                        the Agent in writing;

                (iv)    if, by not later than the date 10 Business Days after
                        receipt by the Agent of a notice pursuant to
                        sub-paragraph (i) above (or, if later and additional
                        information has been requested pursuant to
                        sub-paragraph (ii) above, by not later than the date
                        10 Business Days after receipt by the Agent of such
                        additional information if received within the
                        prescribed time or the date 10 Business Days after the
                        request therefore if not), the Agent has received
                        notices pursuant to sub-paragraph (iii) above from
                        Lenders which constitute the Majority Lenders, the
                        Agent shall promptly notify the Borrower and the
                        Lenders; and

                (v)     if the Agent gives notice to the Borrower pursuant to
                        sub-paragraph (iv) above or the relevant action is
                        undertaken or circumstance is permitted before the
                        date 2 Business Days after the latest time for the
                        receipt by the Agent of notices pursuant to
                        sub-paragraph (iv) above, the undertaking of the
                        relevant action or permitting of the relevant
                        circumstances shall immediately constitute an Event of
                        Default PROVIDED THAT, for the avoidance of doubt, no
                        failure of any German Obligor to duly perform or
                        comply with any obligation under a Relevant
                        Undertaking shall of itself constitute an Event of
                        Default.

        (b)     If, in the opinion of the Agent or the Majority Lenders any of
                the measures referred to in the Relevant Undertaking when
                implemented by a member of the Group would negatively affect
                the risk assessment of the Lenders in respect of the ability
                of relevant German Obligor to perform its obligations under
                the Finance Documents, the Parent will ensure that the
                relevant German Obligor will, to the fullest extent legally
                permissible, provide additional Security to the

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                Finance Parties as soon as possible but in any event within 20
                Business Days following request for the same by the Agent.

24.32   AMENDMENT OF CONSTITUTIONAL DOCUMENTS AND SHARES
        (a)     Each member of the Group granting Security over Shares (the
                "PLEDGOR") in another Group company shall not without the
                prior written consent of the Security Trustee (such consent
                not to be unreasonably delayed or withheld) vote in favour of,
                and undertakes to procure that the Group company whose Shares
                it has granted Security over (the "PLEDGEE") shall not without
                the prior written consent of the Security Trustee pass a
                resolution whereby:

                (i)     the constitutional documents of the Pledgee would
                        otherwise be changed as regards the Pledgee's capital
                        structure in a way which would adversely affect the
                        Security Trustee's or the Secured Parties' rights
                        under the relevant Security Document;

                (ii)    subject to Clause 24.13 (Dividends), the Pledgee would
                        materially change its policy with respect to dividends
                        (unless such change is required in order to comply
                        with any applicable law or regulation);

                (iii)   where applicable, the objects clause of the Pledgee
                        contained in its current constitutional documents
                        would be amended;

                (iv)    the relevant Shares would be modified or altered in a
                        way which would adversely affect the Security
                        Trustee's or the Secured Parties' rights under the
                        relevant Security Documents; and

                (v)     any term of the relevant Security Document and/or this
                        Agreement would be violated.

        (b)     In the event that a Pledgee seeks to issue new shares or
                quotas the Company will procure that any such new shares are
                only issued to existing shareholders in such Pledgee pro-rata
                to their existing shareholding as at the date of the proposed
                issuance.

        (c)     In the event that the Pledgee changes its constitutional
                documents as regards its capital structure (with the prior
                written consent of the Security Trustee), the Security created
                over the Shares of the Pledgee shall to the extent possible
                under applicable laws automatically extend to any new shares,
                quotas, participation certificates or similar right or rights
                attaching thereto, created in connection with such change, and
                the Pledgor granting Security over the Shares undertakes to
                comply fully with all instructions received from the Security
                Trustee acting in the name and on behalf of the Secured
                Parties to perfect such Security granted under the Security
                Document.

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24.33   GENERAL PROPERTY UNDERTAKINGS
        Each member of the Group that has granted Security over Real Property
        shall:

        (a)     repair and keep in good and substantial repair and condition,
                in a manner consistent with a reasonably prudent owner, all
                the Real Property at any time forming part of the Transaction
                Security;

        (b)     comply with and observe and perform (a) all applicable
                requirements of all planning and environmental legislation,
                regulations and by-laws relating to the Real Property, (b) any
                conditions attaching to any planning permissions relating to
                or affecting the Real Property and (c) any notices or other
                orders made by any planning, environmental or other public
                body in respect of all or any part of the Real Property as
                would a prudent owner/operator of such Real Property.

24.34   GERMAN DEBT PUSHDOWN
        The Company may undertake a corporate reorganisation and debt push
        down in Germany as described below or substantially as described below
        or as otherwise agreed to by the Agent acting on the instructions of
        the Majority Lenders provided that following such corporate
        reorganisation and debt push down the Finance Parties will enjoy the
        same or equivalent security and recourse under the relevant Security
        Documents and this Agreement as they enjoyed immediately prior
        thereto.

        The corporate reorganisation and debt push down referred to above is
        as follows:

        (a)     Flexsys AG shall sell all, or substantially all, of its 50 per
                cent. equity interest in Flexsys Verkauf GmbH to Flexsys
                Verwaltungs- under Beteiligungs GmbH;

        (b)     Flexsys AG shall distribute a dividend of all proceeds from
                the sale of its interest in Flexsys Verkauf GmbH to the
                Company. The amount is to be equal to the net distributable
                earnings as determined and confirmed by Flexsys AG statutory
                auditors under the relevant balance sheet;

        (c)     the Company shall create New German Hold Co with nominal
                capital;

        (d)     New German Hold Co shall accede to this Agreement as an
                Additional Borrower and as an Additional Guarantor in
                accordance with this Agreement and comply with all
                representations and undertakings required of it in such
                capacities under Section 8 (Representations, Undertakings and
                Events of Default) of this Agreement;

        (e)     in accordance with Clause 27.4 (Additional Guarantors), New
                German Hold Co shall grant Security over its shares in favour
                of the Lenders;

        (f)     New German Hold Co shall borrow under any part of Facility B;

        (g)     the Company shall sell/or contribute shares held in Flexsys
                Verwaltung- und Beteiligungs GmbH to New German Hold Co;

        (h)     the Company shall provide all funds received either as a
                dividend from Flexsys AG or from the sale of shares in Flexsys
                Verwaltungs- und Beteiligungs GmbH

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                to Flexsys Co-ordination Centre N.V. either by way of a
                capital contribution or an intercompany loan;

        (i)     Flexsys Co-ordination Centre N.V. shall apply all funds
                received from the Company in accordance with the step outlined
                in paragraph (h) above towards repayment of its Utilisations
                outstanding under either Facility;

        (j)     Flexsys Co-ordination Centre N.V. may transfer by way of
                novation a portion of its borrowings under Facility A to the
                New German Hold Co. This transfer will be subject to all
                necessary measures to be taken by the Obligors and the Lenders
                to preserve the existing Security.

24.35   CONDITIONS SUBSEQUENT
        The Company will ensure that by the latest date stipulated therefor in
        Part II of Schedule 2 it will deliver to the Agent all of the
        documents and other evidence listed in Part II of Schedule 2 and will
        complete all of the matters referred to therein.

25.     EVENTS OF DEFAULT

        Each of the events or circumstances set out in this Clause 25 is an
        Event of Default (save for Clause 25.19 (Acceleration)) (whether or
        not caused by any reason whatsoever outside the control of any Obligor
        or any other person).

25.1    NON-PAYMENT
        An Obligor does not pay on the due date any amount payable pursuant to
        a Finance Document at the place at and in the currency in which it is
        expressed to be payable unless:

        (a)     its failure to pay is caused by:

                (i)     administrative or technical error; or

                (ii)    a Disruption Event; and

        (b)     payment is made within 5 Business Days of its due date.

25.2    FINANCIAL COVENANTS AND INDEBTEDNESS
        Any requirement of Clause 23 (Financial covenants) is not satisfied or
        any Obligor does not comply with any provision of Clause 24.14
        (Indebtedness) or Clause 24.35 (Conditions Subsequent).

25.3    COMPANY AND MATERIAL GROUP MEMBER PROFIT
        The requirements of Clause 24.26 (Company and Material Group Member
        Profit) are not satisfied and are not remedied within 45 Business Days
        (or such longer period as the Majority Lenders may agree).

25.4    OTHER OBLIGATIONS
        (a)     An Obligor does not comply with any provision of the Finance
                Documents (other than those referred to in Clause 25.1
                (Non-payment), Clause 25.2 (Financial covenants and
                Indebtedness) and Clause 25.3 (Company and Material Group
                Member profit)).

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        (b)     No Event of Default under paragraph (a) above will occur if
                the failure to comply is capable of remedy and is remedied
                within 15 Business Days of the Agent giving notice to the
                Company or the Company becoming aware of the failure to
                comply.

25.5    MISREPRESENTATION
        Any representation or statement made or deemed to be made by an
        Obligor in the Finance Documents or any other document delivered by or
        on behalf of any Obligor under or in connection with any Finance
        Document is or proves to have been incorrect or misleading in any
        material respect when made or deemed to be made and, if capable of
        remedy within the grace period referred to below, is not remedied to
        the reasonably satisfaction of the Agent within 30 days from the
        earlier of notice thereof to the Company and the relevant Obligor
        becoming aware of it.

25.6    CROSS DEFAULT
        (a)     Any Financial Indebtedness of any member of the Group is not
                paid when due nor within any originally applicable grace
                period.

        (b)     Any Financial Indebtedness of any member of the Group is
                declared to be or otherwise becomes due and payable prior to
                its specified maturity as a result of an event of default
                (however described).

        (c)     Any commitment for any Financial Indebtedness of any member of
                the Group is cancelled or suspended by a creditor of any
                member of the Group as a result of an event of default
                (however described).

        (d)     Any creditor of any member of the Group becomes entitled to
                declare any Financial Indebtedness of any member of the Group
                due and payable prior to its specified maturity as a result of
                an event of default (however described).

        (e)     No Event of Default will occur under this Clause 25.6 if the
                aggregate amount of Financial Indebtedness or commitment for
                Financial Indebtedness falling within paragraphs (a) to (d)
                above is less than US$5,000,000 (or its equivalent in any
                other currency or currencies).

25.7    INSOLVENCY
        (a)     A member of the Group is unable or admits inability to pay its
                debts as they fall due, suspends making payments on any of its
                debts or, by reason of actual or anticipated financial
                difficulties, commences negotiations with one or more of its
                creditors with a view to rescheduling any of its indebtedness
                (including, without limitation, in respect of a member of the
                Group incorporated in Germany it is unable to pay its debts as
                they fall due (Zahlungsunfahigkeit) or is deemed unable to pay
                its debts as they fall due (drohende Zahlungsunfahigkeit) in
                the meaning of sections 17 and 18 of the German Insolvency
                Code (Insolvenzordnung)).

        (b)     Save in relation to Flexsys Rubber Chemicals Limited, the
                value of the assets of any material Subsidiary of the Group is
                less than its liabilities (taking into account contingent and
                prospective liabilities) (including, without limitation, in
                respect of a member of the Group incorporated in Germany it is
                over-indebted

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                (uberschuldet) in the meaning of section 19 of the German
                Insolvency Code (Insolvenzordnung)).

        (c)     A moratorium is declared in respect of any indebtedness of any
                member of the Group.

        (d)     Any member of the Group which conducts business in France is
                in a state of cessation des paiements, or any member of the
                Group becomes insolvent for the purpose of any insolvency law.

        (e)     Any Obligor shall in any U.S. jurisdiction:

                (i)     apply for, or consent to, the appointment of, or the
                        taking of possession by, a receiver, custodian,
                        trustee, examiner or liquidator of itself or of all or
                        a substantial part of its property;

                (ii)    make a general assignment for the benefit of its
                        creditors;

                (iii)   commence a voluntary case under Title 11 of the United
                        States of America Code entitled Bankruptcy (or any
                        successor thereof), as amended;

                (iv)    file a petition with respect to itself seeking to take
                        advantage of any other law relating to bankruptcy,
                        insolvency, reorganisation, liquidation, dissolution,
                        arrangement or winding up, or composition or
                        readjustment of debts; or

                (v)     take any corporate action for the purpose of effecting
                        any of the foregoing with respect to itself.

25.8    INSOLVENCY PROCEEDINGS
        (a)     Any corporate action, legal proceedings or other procedure or
                step is taken in relation to:

                (i)     the suspension of payments, a moratorium of any
                        indebtedness (including concordat
                        judiciaire/gerechtelijk akkoord) winding-up,
                        dissolution, administration, bankruptcy (including
                        faillite/faillissement), or reorganisation (by way of
                        voluntary arrangement, scheme of arrangement or
                        otherwise) of any Obligor or Material Group Member;

                (ii)    a composition, compromise, assignment or arrangement
                        with any creditor of any Obligor or Material Group
                        Member. In relation to an Obligor incorporated in
                        Belgium, these concepts shall mean a "minnelijk
                        akkoord met alle schuldeisers" /'accord amiable avec
                        tous les creanciers";

                (iii)   the appointment of a liquidator, receiver,
                        administrative receiver, administrator, an
                        administrateur judiciaire/gerechtelijk bestuurder, a
                        commissaire special/speciaal commissaris,
                        administrateur provisoire/voorlopige bewindvoerder,
                        compulsory manager or other similar officer in respect
                        of any Obligor or Material Group Member or any of its
                        assets; or

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                (iv)    the enforcement of any Security over any assets of any
                        Obligor or Material Group Member where such Security
                        secures Financial Indebtedness in excess of
                        EUR2,500,000 (or its equivalent in another currency or
                        currencies),

                (v)     or any analogous procedure or step is taken in any
                        jurisdiction, in particular (in relation to a German
                        Obligor or a Material Group Member incorporated in
                        Germany and in relation to Flexsys SARL):

                        (A)     a petition for insolvency proceedings in
                                respect of its assets (Antrag auf Eroffnung
                                eines Insolvenzverfahrens) is filed or any
                                event occurs which constitutes a mandatory
                                cause for the initiation of insolvency
                                proceedings (Eroffnungsgrund) as set out in
                                sections 17 and 19 of the German Insolvency
                                Code (Insolvenzordnung) or;

                        (B)     actions are taken pursuant to section 21 of
                                the German Insolvency Code by the competent
                                court.

                        (C)     any member of the Group commences proceedings
                                for conciliation in accordance with article
                                L.611-4 to L.611-15 of the French Code de
                                commerce.

                        (D)     a judgment for sauvegarde, redressement
                                judiciare, cession totale de l'entreprise or
                                liquidiation judiciaire is entered in relation
                                to any member of the Group under articles
                                L.620-1 to L.670-8 of the French Code de
                                commerce.

        (b)     Paragraph (a) above shall not apply to any winding-up petition
                which is frivolous or vexatious and which is discharged,
                stayed or dismissed within 21 days of commencement or, if
                earlier, the date on which it is advertised.

        (c)     In respect of any Obligor, a proceeding or case shall be
                commenced, without the application or consent of such Obligor,
                in any US court of competent jurisdiction, seeking:

                (i)     its reorganisation, liquidation, dissolution,
                        arrangement or winding-up or the composition or
                        readjustment of its debts;

                (ii)    the appointment of a receiver, custodian, trustee,
                        examiner, liquidator or the like of the Obligor or of
                        all or any substantial part of its property; or

                (iii)   similar relief in respect of any Obligor under any law
                        relating to the bankruptcy insolvency, reorganisation,
                        winding-up or composition or adjustment of debts,

                and any such proceeding or case referred to in paragraphs (i)
                to (iii) above shall continue undismissed, or an order,
                judgment or decree approving or ordering any of the foregoing
                shall be entered and continue unstayed and in effect, for a
                period of 21 or more days, or an order for relief against such
                Obligor shall be

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                entered in an involuntary case under Title 11 of the United
                States of America Code entitled Bankruptcy (or any successor
                thereto) as amended.

25.9    CREDITORS' PROCESS
        Any expropriation, attachment, sequestration, distress or execution
        affects any asset or assets of a member of the Group and is not
        discharged within 21 days.

25.10   UNLAWFULNESS
        It is or becomes unlawful for an Obligor or any other member of the
        Group that is a party to the Intercreditor Agreement to perform any of
        its obligations under the Finance Documents or any Transaction
        Security created or expressed to be created or evidenced by the
        Security Documents ceases to be effective or any subordination created
        under the Intercreditor Agreement ceases to be effective.

25.11   REPUDIATION
        An Obligor repudiates a Finance Document or any of the Transaction
        Security or evidences an intention to repudiate a Finance Document or
        any of the Transaction Security.

25.12   GOVERNMENTAL INTERVENTION
        By or under the authority of any government:

        (a)     the management of any member of the Group is wholly or
                partially displaced or the authority of any member of the
                Group in the conduct of its business is wholly or partially
                curtailed; or

        (b)     all or a majority of the issued shares of any member of the
                Group or the whole or any part (the book value of which is 20
                per cent. or more of the book value of the whole) of its
                revenues or assets is seized, nationalised, expropriated or
                compulsorily acquired.

25.13   TRANSACTION SECURITY
        (a)     Any Obligor fails to perform or comply with any of the
                obligations assumed by it in the Security Documents.

        (b)     At any time any of the Transaction Security is or becomes
                unlawful or is not, or ceases to be legal, valid, binding or
                enforceable or otherwise ceases to be effective, unless
                otherwise permitted by the Finance Documents.

25.14   CHANGE OF OWNERSHIP
        The Company ceases to own, directly or indirectly, the entire issued
        share capital of its Subsidiaries as at the date hereof, other than
        Flexsys America Co..

25.15   MATERIAL ADVERSE CHANGE
        Any event or circumstance occurs which the Majority Lenders believe is
        reasonably likely to have a Material Adverse Effect.

25.16   CESSATION OF BUSINESS
        An Obligor ceases, or threatens to cease, to carry on all or a
        substantial part of its business.

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25.17   INTERCREDITOR AGREEMENT
        (a)     Any party to the Intercreditor Agreement (other than a Finance
                Party or an Obligor) fails to comply with the provisions of,
                or does not perform its obligations under, the Intercreditor
                Agreement; or

        (b)     a representation or warranty given by that party in the
                Intercreditor Agreement is incorrect in any material respect,

        and, if the non-compliance or circumstances giving rise to the
        misrepresentation are capable of remedy, it is not remedied within 15
        days of the earlier of the Agent giving notice to that party or that
        party becoming aware of the non-compliance or misrepresentation.

25.18   EMPLOYEE PLANS
        Any ERISA Event shall have occurred, or Clause 24.21 (Compliance with
        ERISA) shall be breached, and the liability of a U.S. Obligor or its
        ERISA Affiliates, either individually or in the aggregate, related to
        such ERISA Event or breaches, individually or when aggregated with all
        other ERISA Events, and all such breaches would have or would be
        reasonably expected to have a Material Adverse Effect.

25.19   ACCELERATION
        (a)     On and at any time after the occurrence of an Event of Default
                which is continuing the Agent may, and shall if so directed by
                the Majority Lenders, by notice in writing to the Company:

                (i)     cancel the Total Commitments whereupon they shall
                        immediately be cancelled; and

                (ii)    declare that all or part of the Utilisations, together
                        with accrued interest, and all other amounts accrued
                        or outstanding under the Finance Documents be
                        immediately due and payable, whereupon they shall
                        become immediately due and payable; and/or

                (iii)   declare that all or part of the Utilisations be
                        payable on demand, whereupon they shall immediately
                        become payable on demand by the Agent on the
                        instructions of the Majority Lenders; and

                (iv)    exercise, or direct the Security Trustee to exercise,
                        any or all of its rights, remedies and powers under
                        any of the Finance Documents; and/or

                (v)     declare that full cash cover in respect of each Letter
                        of Credit is immediately due and payable whereupon it
                        shall become immediately due and payable,

                but, notwithstanding the foregoing, upon the occurrence of an
                Event of Default specified in Clause 25.8 (Insolvency
                proceedings), the Facility shall be cancelled and all
                Utilisations, together with accrued interest, and all other
                amounts accrued or outstanding under the Finance Documents and
                full cash cover in respect of each Letter of Credit shall
                become immediately due and

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                payable, in each case without declaration, notice or demand by
                or to any persons.

        (b)     If an Event of Default under paragraph (e) of Clause 25.7
                (Insolvency) or paragraph (a)(v)(C) or (a)(v)(D) of Clause
                25.8 (Insolvency Proceedings) shall occur in respect of any
                Obligor and to the extent of the imposition of any automatic
                stay, then without notice to such Obligor or any other act by
                the Agent or any other person, the loans to such Obligor,
                interest thereon and all other amounts owed by such Obligor
                under the Finance Documents shall become immediately due and
                payable without presentment, demand, protest or notice of any
                kind, all of which are expressly waived.

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                                   SECTION 9
                              CHANGES TO PARTIES

26.     CHANGES TO THE LENDERS

26.1    ASSIGNMENTS AND TRANSFERS BY THE LENDERS
        Subject to this Clause 26, a Lender (the "EXISTING LENDER") may:

        (a)     assign any of its rights; or

        (b)     transfer by novation any of its rights and obligations,

        to another bank or financial institution or to a trust, fund or other
        entity which is regularly engaged in or established for the purpose of
        making, purchasing or investing in loans, securities or other
        financial assets (the "NEW LENDER").

26.2    CONDITIONS OF ASSIGNMENT OR TRANSFER
        (a)     In relation to Facility B only, the consent of the Company and
                in respect of a Letter of Credit the consent of the relevant
                Issuing Bank is required for an assignment or transfer by an
                Existing Lender, unless the assignment or transfer is to
                another Lender or an Affiliate of a Lender or an Event of
                Default is continuing.

        (b)     The consent of the Company (and, if relevant, the consent of
                the relevant Issuing Bank) to an assignment or transfer
                referred to in paragraph (a) above must not be unreasonably
                withheld or delayed. The Company will be deemed to have given
                its consent five Business Days after the Existing Lender has
                requested it unless consent is expressly refused by the
                Company within that time.

        (c)     The consent of the Company (and, if relevant, the consent of
                the relevant Issuing Bank) to an assignment or transfer
                referred to in paragraph (a) above must not be withheld solely
                because the assignment or transfer may result in an increase
                to the Mandatory Cost.

        (d)     The minimum amount transferred to a New Lender in relation to
                a Loan/Commitment made to any Borrower shall be at least the
                equivalent of EUR 50,000 or if it is less, the New Lender
                shall confirm in writing to the relevant Borrower that it, the
                New Lender, is a professional market party within the meaning
                of the Dutch FSA.

        (e)     An assignment will only be effective on:

                (i)     receipt by the Agent of written confirmation from the
                        New Lender (in form and substance satisfactory to the
                        Agent) that the New Lender will assume the same
                        obligations to the other Finance Parties and the other
                        Secured Parties as it would have been under if it was
                        an Original Lender;

                (ii)    performance by the Agent of all necessary "know your
                        customer" or other similar checks under all applicable
                        laws and regulations relation to such

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                        assignment to a New Lender, the completion of which
                        the Agent shall promptly notify to the Existing Lender
                        and the New Lender;

                (iii)   the New Lender entering into the documentation
                        required for it to accede as a party to the
                        Intercreditor Agreement; and

                (iv)    the New Lender entering into the documentation
                        required for it to accede as a party to the Security
                        Documents if required under the laws of the Relevant
                        Jurisdiction.

        (f)     A transfer will only be effective if the New Lender enters
                into the documentation required for it to accede as a party to
                the Intercreditor Agreement and the procedure set out in
                Clause 26.5 (Procedure for transfer) is complied with.

        (g)     If:

                (i)     a Lender assigns or transfers any of its rights or
                        obligations under the Finance Documents or changes its
                        Facility Office; and

                (ii)    as a result of circumstances existing at the date the
                        assignment, transfer or change occurs, an Obligor
                        would be obliged to make a payment to the New Lender
                        or Lender acting through its new Facility Office under
                        Clause 15 (Tax gross-up and indemnities) or Clause 16
                        (Increased costs),

                then the New Lender or Lender acting through its new Facility
                Office is only entitled to receive payment under those Clauses
                to the same extent as the Existing Lender or Lender acting
                through its previous Facility Office would have been if the
                assignment, transfer or change had not occurred.

        (h)     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 (novation) within the
                meaning of article 1271 et seq. of the French and Belgian Code
                civil. In the event of an assignment, a transfer, a novation
                or disposal of all part of the rights and obligations by any
                Lender, each Lender expressly reserves the rights, powers,
                privileges and actions that it enjoys under any Security
                Documents governed by French and Belgian law in favour of its
                assignees, or, as the case may be, its successors, in
                accordance with the provisions of article 1278 et seq. of the
                French and Belgian Code civil.

26.3    ASSIGNMENT OR TRANSFER FEE
        The New Lender shall, on the date upon which an assignment or transfer
        takes effect, pay to the Agent (for its own account) a fee of
        US$2,500.

26.4    LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS
        (a)     Unless expressly agreed to the contrary, an Existing Lender
                makes no representation or warranty and assumes no
                responsibility to a New Lender for:

                (i)     the legality, validity, effectiveness, adequacy or
                        enforceability of the Finance Documents, the
                        Transaction Security or any other documents;

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                (ii)    the financial condition of any Obligor;

                (iii)   the performance and observance by any Obligor of its
                        obligations under the Finance Documents or any other
                        documents; or

                (iv)    the accuracy of any statements (whether written or
                        oral) made in or in connection with any Finance
                        Document or any other document,

                and any representations or warranties implied by law are
                excluded.

        (b)     Each New Lender confirms to the Existing Lender and the other
                Finance Parties that it:

                (i)     has made (and shall continue to make) its own
                        independent investigation and assessment of the
                        financial condition and affairs of each Obligor and
                        its related entities in connection with its
                        participation in this Agreement and has not relied
                        exclusively on any information provided to it by the
                        Existing Lender in connection with any Finance
                        Document; and

                (ii)    will continue to make its own independent appraisal of
                        the creditworthiness of each Obligor and its related
                        entities whilst any amount is or may be outstanding
                        under the Finance Documents or any Commitment is in
                        force.

        (c)     Nothing in any Finance Document obliges 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 26; or

                (ii)    support any losses directly or indirectly incurred by
                        the New Lender by reason of the non-performance by any
                        Obligor of its obligations under the Finance Documents
                        or otherwise.

26.5    PROCEDURE FOR TRANSFER
        (a)     Subject to the conditions set out in Clause 26.2 (Conditions
                of assignment or transfer) a transfer is effected in
                accordance with paragraph (c) below when the Agent executes an
                otherwise duly completed Transfer Certificate delivered to it
                by the Existing Lender and the New Lender and the Agent makes
                a corresponding entry in the Register pursuant to Clause 26.9
                (The Register). The Agent shall, subject to paragraph (b)
                below as soon as reasonably practicable after receipt by it of
                a duly completed Transfer Certificate appearing on its face to
                comply with the terms of this Agreement and delivered in
                accordance with the terms of this Agreement, execute that
                Transfer Certificate and make such corresponding entry in the
                Register.

        (b)     The Agent shall only be obliged to execute a Transfer
                Certificate delivered to it by the Existing Lender and the New
                Lender and make a corresponding entry in the Register once it
                is satisfied it has complied with all necessary "know your
                customer" or other similar checks under all applicable laws
                and regulations in relation to the transfer to such New
                Lender.

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        (c)     On the Transfer Date:

                (i)     to the extent that in the Transfer Certificate the
                        Existing Lender seeks to transfer by novation its
                        rights and obligations under the Finance Documents and
                        in respect of the Transaction Security each of the
                        Obligors and the Existing Lender shall be released
                        from further obligations towards one another under the
                        Finance Documents and in respect of the Transaction
                        Security and their respective rights against one
                        another shall be cancelled (being the "DISCHARGED
                        RIGHTS AND OBLIGATIONS");

                (ii)    each of the Obligors and the New Lender shall assume
                        obligations towards one another and/or acquire rights
                        against one another which differ from the Discharged
                        Rights and Obligations only insofar as that Obligor
                        and the New Lender have assumed and/or acquired the
                        same in place of that Obligor and the Existing Lender;

                (iii)   the Agent, the Arranger, the Security Trustee, the New
                        Lender and other Lenders shall acquire the same rights
                        and assume the same obligations between themselves and
                        in respect of the Transaction Security as they would
                        have acquired and assumed had the New Lender been an
                        Original Lender with the rights and/or obligations
                        acquired or assumed by it as a result of the transfer
                        and to that extent the Agent, the Arranger, the
                        Security Trustee and the Existing Lender shall each be
                        released from further obligations to each other under
                        the Finance Documents;

                (iv)    the benefit of each Security Document shall be
                        maintained in favour of the New Lender; and

                (v)     the New Lender shall become a Party as a "Lender".

26.6    COPY OF TRANSFER CERTIFICATE TO COMPANY
        The Agent shall, as soon as reasonably practicable after it has
        executed a Transfer Certificate, send to the Company a copy of that
        Transfer Certificate.

26.7    DISCLOSURE OF INFORMATION
        (a)     Any Lender may disclose to any of its Affiliates and any other
                person:

                (i)     to (or through) whom that Lender assigns or transfers
                        (or may potentially assign or transfer) all or any of
                        its rights and obligations under this Agreement;

                (ii)    with (or through) whom that Lender enters into (or may
                        potentially enter into) any sub-participation in
                        relation to, or any other transaction under which
                        payments are to be made by reference to, this
                        Agreement or any Obligor; or

                (iii)   to whom, and to the extent that, information is
                        required to be disclosed by any applicable law or
                        regulation,

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                        any information about any Obligor, the Group and the
                        Finance Documents as that Lender shall consider
                        appropriate if the recipient has agreed with the
                        relevant Lender to keep the document or information
                        confidential on the same terms (with consequential
                        changes) as are set out in paragraph (b) below.

        (b)     Subject to paragraph (a) above, each Finance Party shall keep
                confidential and shall not, without the prior consent of the
                Company, use any information (other than information which is
                publicly available other than as a result of a breach by that
                Finance Party of this paragraph (b)) supplied by or on behalf
                of any Obligor under the Finance Documents otherwise than in
                connection with the Finance Documents. However, the
                restriction set out in this paragraph (b) shall not apply to,
                and each Finance Party shall be entitled to disclose,
                information:

                (i)     in connection with any legal proceedings arising out
                        of or in connection with a Finance Document; or

                (ii)    if required to do so by an order of a court of
                        competent jurisdiction whether under any procedure for
                        discovering documents or otherwise; or

                (iii)   pursuant to any law or regulation in accordance with
                        which that Lender is required or accustomed to act; or

                (iv)    to a governmental, banking, taxation or other
                        regulatory authority of any competent jurisdiction; or

                (v)     to its accountants or legal advisers.

        Notwithstanding any of the provisions of the Finance Documents, the
        Obligors and the Finance Parties hereby agree that each Party and each
        employee, representative or other agent of each Party may disclose to
        any and all persons, without limitation of any kind, the "TAX
        STRUCTURE" and "TAX TREATMENT" (in each case within the meaning of the
        U.S. Treasury Regulation Section 1.6011-4) of the Facility and any
        materials of any kind (including opinions or other tax analyses) that
        are provided to any of the foregoing relating to such tax structure
        and tax treatment.

26.8    ASSIGNMENT TO FEDERAL RESERVE BANK
        Any Lender may at any time pledge or assign a security interest in all
        or any portion of its rights under this Agreement, without notice to
        or consent of any Party, to any U.S. Federal Reserve Bank PROVIDED
        THAT (i) no Lender shall be relieved of any of its obligations under
        this Agreement as a result of any such assignment and pledge and (ii)
        in no event shall such U.S. Federal Reserve Bank be considered to be a
        "Lender" or be entitled to require the assigning Lender to take or
        omit to take any action under this Agreement.

26.9    THE REGISTER
        For U.S. federal income tax purposes only, the Agent, acting solely
        for this purpose as an agent of the Obligors, shall maintain at one of
        its offices a copy of each Transfer Certificate delivered to it and a
        register (the "REGISTER") for the recordation of the names and
        addresses of each Lender and the Commitments of and obligations owing
        to each Lender. Without limitation of any other provision of this
        Clause 26 (Changes to the

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        Lenders), no transfer shall be effective until recorded in the
        Register. The entries in the Register shall be conclusive absent
        manifest error and each Obligor, the Agent and each Lender may treat
        each person whose name is recorded in the Register as a Lender
        notwithstanding any notice to the contrary. The Register shall be
        available for inspection by each Obligor at any reasonable time and
        from time to time upon reasonable prior notice.

27.     CHANGES TO THE OBLIGORS

27.1    ASSIGNMENT AND TRANSFERS BY OBLIGORS
        No Obligor may assign any of its rights or transfer any of its rights
        or obligations under the Finance Documents.

27.2    ADDITIONAL BORROWERS
        (a)     Subject to compliance with the provisions of paragraphs (c)
                and (d) of Clause 22.8 ("Know your customer" checks), the
                Company may request that any of its Subsidiaries becomes an
                Additional Borrower. That Subsidiary shall become an
                Additional Borrower if:

                (i)     all the Lenders approve the addition of that
                        Subsidiary (such approval not to be unreasonably
                        withheld or delayed);

                (ii)    the Company delivers to the Agent a duly completed and
                        executed Accession Letter and duly completed and
                        executed documentation required for it to accede as a
                        party to the Intercreditor Agreement;

                (iii)   the Subsidiary is (or becomes) a Guarantor prior to
                        becoming a Borrower;

                (iv)    the Company confirms that no Default is continuing or
                        would occur as a result of that Subsidiary becoming an
                        Additional Borrower; and

                (v)     the Agent has received all of the documents and other
                        evidence listed in Part I of Schedule 2 (Conditions
                        Precedent) in relation to that Additional Borrower,
                        each in form and substance satisfactory to the Agent.

        (b)     The Agent shall notify the Company and the Lenders promptly
                upon being satisfied that it has received (in form and
                substance satisfactory to it) all the documents and other
                evidence listed in Part I of Schedule 2 (Conditions
                Precedent).

27.3    RESIGNATION OF A BORROWER
        (a)     The Company may request that a Borrower (other than the
                Company) ceases to be a Borrower by delivering to the Agent a
                Resignation Letter.

        (b)     The Agent shall accept a Resignation Letter and notify the
                Company and the Lenders of its acceptance if:

                (i)     no Default is continuing or would result from the
                        acceptance of the Resignation Letter (and the Company
                        has confirmed this is the case); and

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                (ii)    the Borrower is under no actual or contingent
                        obligations as a Borrower under any Finance Documents,

                whereupon that company shall cease to be a Borrower and shall
                have no further rights or obligations under the Finance
                Documents and the Security Trustee shall be instructed by the
                Agent to release any Transaction Security granted by the
                Borrower, in accordance with Clause 29.22 (Releases).

27.4    ADDITIONAL GUARANTORS
        (a)     Subject to compliance with the provisions of Clause 22.8
                ("Know your customer" checks), the Company may request that
                any of its Subsidiaries become an Additional Guarantor.

        (b)     The Company shall procure that any other member of the Group
                which is a Material Group Member shall as soon as possible
                after becoming a Material Group Member become an Additional
                Guarantor and, subject to the Agreed Security Principles,
                grant Security as the Agent may require and shall accede to
                the Intercreditor Agreement.

        (c)     A member of the Group shall become an Additional Guarantor if:

                (i)     the Company delivers to the Agent a duly completed and
                        executed Accession Letter; and

                (ii)    the Agent has received all of the documents and other
                        evidence listed in Part I of Schedule 2 (Conditions
                        Precedent) in relation to that Additional Guarantor,
                        each in form and substance satisfactory to the Agent.

        (d)     The Agent shall notify the Company and the Lenders promptly
                upon being satisfied that it has received (in form and
                substance satisfactory to it) all the documents and other
                evidence listed in Part II of Schedule 2 (Conditions
                Precedent).

27.5    REPETITION OF REPRESENTATIONS
        Delivery of an Accession Letter constitutes confirmation by the
        relevant Subsidiary that the Repeating Representations are true and
        correct in relation to it as at the date of delivery as if made by
        reference to the facts and circumstances then existing.

27.6    RESIGNATION OF A GUARANTOR
        (a)     The Company may request that a Guarantor (other than the
                Company) ceases to be a Guarantor by delivering to the Agent a
                Resignation Letter.

        (b)     The Agent shall accept a Resignation Letter and notify the
                Company and the Lenders of its acceptance if:

                (i)     no Default is continuing or would result from the
                        acceptance of the Resignation Letter (and the Company
                        has confirmed this is the case); and

                (ii)    all the Lenders have consented to the Company's
                        request.

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        (c)     If the resignation of a Guarantor is accepted in accordance
                with paragraph (b) above the Agent shall instruct the Security
                Trustee to release any Transaction Security granted by that
                Guarantor, in accordance with Clause 29.22 (Releases).

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                                  SECTION 10
                              THE FINANCE PARTIES

28.     ROLE OF THE AGENT AND THE ARRANGER

28.1    APPOINTMENT OF THE AGENT
        (a)     Each other Finance Party (other than the Security Trustee)
                appoints the Agent to act as its agent under and in connection
                with the Finance Documents.

        (b)     Each other Finance Party authorises the Agent to exercise the
                rights, powers, authorities and discretions specifically given
                to the Agent under or in connection with the Finance Documents
                together with any other incidental rights, powers, authorities
                and discretions.

        (c)     Each other Finance Party hereby releases the Agent to the
                extent permissible under each Finance Party's respective
                constitutional documentation from any restrictions on
                representing several persons and self-dealing under any
                applicable law, and in particular from the restrictions of
                Section 181 of the German Civil Code (Burgerliches
                Gesetzbuch), to make use of any authorisation granted under
                this Agreement and to perform its duties and obligations as
                Agent hereunder.

28.2    DUTIES OF THE AGENT
        (a)     The Agent shall promptly forward to a Party the original or a
                copy of any document which is delivered to the Agent for that
                Party by any other Party.

        (b)     Except where a Finance Document specifically provides
                otherwise, the Agent is not obliged to review or check the
                adequacy, accuracy or completeness of any document it forwards
                to another Party.

        (c)     If the Agent receives notice from a Party referring to this
                Agreement, describing a Default and stating that the
                circumstance described is a Default, it shall promptly notify
                the other Finance Parties.

        (d)     If the Agent is aware of the non-payment of any principal,
                interest, commitment fee or other fee payable to a Finance
                Party (other than the Agent, the Arranger or the Security
                Trustee) under this Agreement it shall promptly notify the
                other Finance Parties.

        (e)     The Agent's duties under the Finance Documents are solely
                mechanical and administrative in nature.

        (f)     The Agent shall promptly forward to the Security Trustee a
                copy of all notices issued pursuant to Clause 25.19
                (Acceleration).

28.3    ROLE OF THE ARRANGER
        Except as specifically provided in the Finance Documents, the Arranger
        has no obligations of any kind to any other Party under or in
        connection with any Finance Document.

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28.4    NO FIDUCIARY DUTIES
        (a)     Nothing in this Agreement constitutes the Agent or the
                Arranger as a trustee or fiduciary of any other person.

        (b)     Neither the Agent nor the Arranger shall be bound to account
                to any Lender for any sum or the profit element of any sum
                received by it for its own account.

28.5    BUSINESS WITH THE GROUP
        The Agent and the Arranger may accept deposits from, lend money to and
        generally engage in any kind of banking or other business with any
        member of the Group.

28.6    RIGHTS AND DISCRETIONS OF THE AGENT
        (a)     The Agent may rely on:

                (i)     any representation, notice or document believed by it
                        to be genuine, correct and appropriately authorised;
                        and

                (ii)    any statement made by a director, authorised signatory
                        or employee of any person regarding any matters which
                        may reasonably be assumed to be within his knowledge
                        or within his power to verify.

        (b)     The Agent may assume (unless it has received notice to the
                contrary in its capacity as agent for the Lenders) that:

                (i)     no Default has occurred (unless it has actual
                        knowledge of a Default arising under Clause 25.1
                        (Non-payment));

                (ii)    any right, power, authority or discretion vested in
                        any Party or the Majority Lenders has not been
                        exercised; and

                (iii)   any notice or request made by the Company (other than
                        a Utilisation Request or Selection Notice) is made on
                        behalf of and with the consent and knowledge of all
                        the Obligors.

        (c)     The Agent may engage, pay for and rely on the advice or
                services of any lawyers, accountants, surveyors or other
                experts.

        (d)     The Agent may act in relation to the Finance Documents through
                its personnel and agents.

        (e)     The Agent may disclose to any other Party any information it
                reasonably believes it has received as agent under this
                Agreement.

        (f)     Notwithstanding any other provision of any Finance Document to
                the contrary, neither the Agent nor the Arranger is obliged to
                do or omit to do anything if it would or might in its
                reasonable opinion constitute a breach of any law or
                regulation or a breach of a fiduciary duty or duty of
                confidentiality.

28.7    MAJORITY LENDERS' INSTRUCTIONS
        (a)     Unless a contrary indication appears in a Finance Document,
                the Agent shall (i) exercise any right, power, authority or
                discretion vested in it as Agent in accordance with any
                instructions given to it by the Majority Lenders (or, if so

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                instructed by the Majority Lenders, refrain from exercising
                any right, power, authority or discretion vested in it as
                Agent) and (ii) not be liable for any act (or omission) if it
                acts (or refrains from taking any action) in accordance with
                an instruction of the Majority Lenders.

        (b)     Unless a contrary indication appears in a Finance Document,
                any instructions given by the Majority Lenders will be binding
                on all the Finance Parties other than the Security Trustee.

        (c)     The Agent may refrain from acting in accordance with the
                instructions of the Majority Lenders (or, if appropriate, the
                Lenders) until it has received such security as it may require
                for any cost, loss or liability (together with any associated
                VAT) which it may incur in complying with the instructions.

        (d)     In the absence of instructions from the Majority Lenders, (or,
                if appropriate, the Lenders) the Agent may act (or refrain
                from taking action) as it considers to be in the best interest
                of the Lenders.

        (e)     The Agent is not authorised to act on behalf of a Lender
                (without first obtaining that Lender's consent) in any legal
                or arbitration proceedings relating to any Finance Document.

28.8    RESPONSIBILITY FOR DOCUMENTATION
        Neither the Agent nor the Arranger:

        (a)     is responsible for the adequacy, accuracy and/or completeness
                of any information (whether oral or written) supplied by the
                Agent, the Arranger, an Obligor or any other person in or in
                connection with any Finance Document or the Information
                Memorandum or the transactions contemplated in the Finance
                Documents; or

        (b)     is responsible for the legality, validity, effectiveness,
                adequacy or enforceability of any Finance Document or the
                Transaction Security or any other agreement, arrangement or
                document entered into, made or executed in anticipation of or
                in connection with any Finance Document or the Transaction
                Security.

28.9    EXCLUSION OF LIABILITY
        (a)     Without limiting paragraph (b) below (and without prejudice to
                the provisions of paragraph (e) of Clause 32.10 (Disruption to
                Payment Systems etc.), the Agent will not be liable
                (including, without limitation, for negligence or any other
                category of liability whatsoever) for any action taken by it
                under or in connection with any Finance Document or the
                Transaction Security, unless directly caused by its gross
                negligence or wilful misconduct.

        (b)     No Party (other than the Agent) may take any proceedings
                against any officer, employee or agent of the Agent in respect
                of any claim it might have against the Agent or in respect of
                any act or omission of any kind by that officer, employee or
                agent in relation to any Finance Document and any officer,
                employee or agent of the Agent may rely on this Clause.

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        (c)     The Agent will not be liable for any delay (or any related
                consequences) in crediting an account with an amount required
                under the Finance Documents to be paid by the Agent if the
                Agent has taken all necessary steps as soon as reasonably
                practicable to comply with the regulations or operating
                procedures of any recognised clearing or settlement system
                used by the Agent for that purpose.

        (d)     Nothing in this Agreement shall oblige the Agent or the
                Arranger to carry out any "know your customer" or other checks
                in relation to any person on behalf of any Lender and each
                Lender confirms to the Agent and the Arranger that it is
                solely responsible for any such checks it is required to carry
                out and that it may not rely on any statement in relation to
                such checks made by the Agent or the Arranger.

28.10   LENDERS' INDEMNITY TO THE AGENT
        Each Lender shall (in proportion to its share of the Total Commitments
        or, if the Total Commitments are then zero, to its share of the Total
        Commitments immediately prior to their reduction to zero) indemnify
        the Agent, within three Business Days of demand, against any cost,
        loss or liability (including, without limitation, for negligence or
        any other category of liability whatsoever) incurred by the Agent
        (otherwise than by reason of the Agent's gross negligence or wilful
        misconduct) (or, in the case of any cost, loss or liability pursuant
        to Clause 32.10 (Disruption to Payment Systems etc.) notwithstanding
        the Agent's negligence, gross negligence, or any other category of
        liability whatsoever but not including any claim based on the fraud of
        the Agent) in acting as Agent under the Finance Documents (unless the
        Agent has been reimbursed by an Obligor pursuant to a Finance
        Document).

28.11   RESIGNATION OF THE AGENT
        (a)     The Agent may resign and appoint one of its Affiliates as
                successor by giving notice to the other Finance Parties and
                the Company.

        (b)     Alternatively the Agent may resign by giving notice to the
                other Finance Parties and the Company, in which case the
                Majority Lenders (after consultation with the Company) may
                appoint a successor Agent.

        (c)     If the Majority Lenders have not appointed a successor Agent
                in accordance with paragraph (b) above within 30 days after
                notice of resignation was given, the Agent (after consultation
                with the Company) may appoint a successor Agent.

        (d)     The retiring Agent shall, at its own cost, make available to
                the successor Agent such documents and records and provide
                such assistance as the successor Agent may reasonably request
                for the purposes of performing its functions as Agent under
                the Finance Documents.

        (e)     The Agent's resignation notice shall only take effect upon the
                appointment of a successor.

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        (f)     Upon the appointment of a successor, the retiring Agent shall
                be discharged from any further obligation in respect of the
                Finance Documents but shall remain entitled to the benefit of
                this Clause 28. Its successor and each of the other Parties
                shall have the same rights and obligations amongst themselves
                as they would have had if such successor had been an original
                Party.

        (g)     After consultation with the Company, the Majority Lenders may,
                by notice to the Agent, require it to resign in accordance
                with paragraph (b) above. In this event, the Agent shall
                resign in accordance with paragraph (b) above.

28.12   CONFIDENTIALITY
        (a)     In acting as agent for the Finance Parties, the Agent shall be
                regarded as acting through its agency division, or as
                appropriate, trustee division which shall be treated as a
                separate entity from any other of its divisions or
                departments.

        (b)     If information is received by another division or department
                of the Agent, it may be treated as confidential to that
                division or department and the Agent shall not be deemed to
                have notice of it.

28.13   RELATIONSHIP WITH THE LENDERS
        (a)     The Agent may treat each Lender as a Lender, entitled to
                payments under this Agreement and acting through its Facility
                Office unless it has received not less than five Business Days
                prior notice from that Lender to the contrary in accordance
                with the terms of this Agreement.

        (b)     Each Lender shall supply the Agent with any information
                required by the Agent in order to calculate the Mandatory Cost
                in accordance with Schedule 4 (Mandatory Cost Formulae).

        (c)     Each Secured Party shall supply the Agent with any information
                that the Trustee may reasonably specify (through the Agent) as
                being necessary or desirable to enable the Security Trustee to
                perform its functions as security trustee. Each Lender shall
                deal with the Security Trustee exclusively through the Agent
                and shall not deal directly with the Security Trustee.

28.14   CREDIT APPRAISAL BY THE SECURED PARTIES
        Without affecting the responsibility of any Obligor for information
        supplied by it or on its behalf in connection with any Finance
        Document, each Secured Party confirms to the Agent and the Arranger
        that it has been, and will continue to be, solely responsible for
        making its own independent appraisal and investigation of all risks
        arising under or in connection with any Finance Document including but
        not limited to:

        (a)     the financial condition, status and nature of each member of
                the Group;

        (b)     the legality, validity, effectiveness, adequacy or
                enforceability of any Finance Document and the Transaction
                Security and any other agreement, arrangement or document
                entered into, made or executed in anticipation of, under or in
                connection with any Finance Document or the Transaction
                Security;

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        (c)     whether that Secured Party has recourse, and the nature and
                extent of that recourse, against any Party or any of its
                respective assets under or in connection with any Finance
                Document, the Transaction Security, the transactions
                contemplated by the Finance Documents or any other agreement,
                arrangement or document entered into, made or executed in
                anticipation of, under or in connection with any Finance
                Document;

        (d)     the adequacy, accuracy and/or completeness of the Information
                Memorandum and any other information provided by the Agent,
                the Security Trustee, any Party or by any other person under
                or in connection with any Finance Document, the transactions
                contemplated by the Finance Documents or any other agreement,
                arrangement or document entered into, made or executed in
                anticipation of, under or in connection with any Finance
                Document; and

        (e)     the right or title of any person in or to, or the value or
                sufficiency of any part of the Charged Property, the priority
                of any of the Transaction Security or the existence of any
                Security affecting the Charged Property.

28.15   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 Agent
        shall (in consultation with the Company) appoint another Lender or an
        Affiliate of a Lender to replace that Reference Bank.

28.16   AGENT'S MANAGEMENT TIME
        Any amount payable to the Agent under Clause 17.3 (Indemnity to the
        Agent), Clause 19 (Costs and expenses) and Clause 28.10 (Lenders'
        indemnity to the Agent) shall include the cost of utilising the
        Agent's management time or other resources and will be calculated on
        the basis of such reasonable daily or hourly rates as the Agent may
        notify to the Company and the Lenders, and is in addition to any fee
        paid or payable to the Agent under Clause 14 (Fees).

28.17   DEDUCTION FROM AMOUNTS PAYABLE BY THE AGENT
        If any Party owes an amount to the Agent under the Finance Documents
        the Agent may, after giving notice to that Party, deduct an amount not
        exceeding that amount from any payment to that Party which the Agent
        would otherwise be obliged to make under the Finance Documents and
        apply the amount deducted in or towards satisfaction of the amount
        owed. For the purposes of the Finance Documents that Party shall be
        regarded as having received any amount so deducted.

29.     ROLE OF SECURITY TRUSTEE

29.1    TRUST
        (a)     The Security Trustee declares that it shall hold the
                Transaction Security on trust for the Secured Parties (and
                both on trust for the Secured Parties and as agent on behalf
                of the other Secured Parties in respect of any Transaction
                Security governed by French Law) on the terms contained in
                this Agreement. Each of the parties to this Agreement agrees
                that the Security Trustee shall have only those duties,
                obligations and responsibilities expressly specified in this

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                Agreement, the Intercreditor Agreement or in the Security
                Documents (and no others shall be implied).

29.2    APPOINTMENT OF THE SECURITY TRUSTEE
        (a)     The Security Trustee shall:

                (i)     hold and administer any Transaction Security governed
                        by German law which is security assigned
                        (Sicherungseigentum/Sicherungsabtretung) or otherwise
                        transferred under a non-accessory security right
                        (nicht-akzessorische Sicherheit) to it as trustee
                        (treuhanderisch) for the benefit of the Secured
                        Parties; and

                (ii)    administer any Transaction Security governed by German
                        law which is pledged (Verpfandung) or otherwise
                        transferred to any Secured Party under an accessory
                        security right (akzessorische Sicherheit) as agent.

        (b)     Each Secured Party hereby appoints the Security Trustee to act
                as its trustee and its agent in connection herewith (with
                power to sub-delegate and under exemption from any
                restrictions regarding acting on behalf of several parties and
                acting both on its own behalf as well as on behalf of other
                parties, as may be contained in applicable local law).

        (c)     Each Secured Party hereby authorises the Security Trustee
                (whether or not by or through employees or agents):

                (i)     to exercise such rights, remedies, powers and
                        discretions as are specifically delegated to or
                        conferred upon the Security Trustee by the terms
                        hereof and/or under the Security Documents together
                        with such rights, remedies, powers and discretions as
                        are reasonably incidental thereto or necessary to give
                        effect to the rights, remedies, powers and discretions
                        of the Security Trustee hereby created;

                (ii)    to enter into each Security Document for and on their
                        behalf as trustee and as agent;

                (iii)   to hold the Transaction Security on trust and as
                        security agent for and on their behalf in connection
                        herewith unless otherwise provided under any
                        Transaction Security;

                (iv)    to acknowledge the provisions of each Security
                        Document, including without limitation any "parallel
                        debt" provision contained therein;

                (v)     to take such action on its behalf as may from time to
                        time be authorised under or in accordance with the
                        Security Documents and this Agreement; and

                (vi)    to accept as its representative (Stellvertreter) any
                        pledge or other creation of any accessory security
                        right granted in favour of such Secured Party in
                        connection with the Finance Documents under German law
                        and to agree to and execute on its behalf as its
                        representative (Stellvertreter) any

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                        amendments and/or alterations to any Security Document
                        governed by German law which creates a pledge or any
                        other accessory security right (akzessorische
                        Sicherheit) including the release or confirmation of
                        re-lease of such Security.

        (d)     Each of the Secured Parties hereby releases the Security
                Trustee to the extent permissible under each Secured Party's
                respective constitutional documentations from any restrictions
                on representing several persons and self-dealing under any
                applicable law, and in particular from the restrictions of
                Section 181 of the German Civil Code (Burgerliches
                Gesetzbuch), to make use of any authorisation granted under
                this Agreement and to perform its duties and obligations as
                Security Trustee hereunder and under the Security Documents.

        (e)     Each Secured Party hereby ratifies and approves all acts and
                declarations previously done by the Security Trustee on such
                Secured Party's behalf (including for the avoidance of doubt
                the declarations made by the Security Trustee as
                representative without power of attorney (Vertreter ohne
                Vertretungsmacht) in relation to the creation of any pledge
                (Pfandrecht) on behalf and for the benefit of any Secured
                Party as future pledgee or otherwise).

29.3    ITALIAN SECURITY DOCUMENTS
        Each of the Secured Parties hereby:

        (a)     appoints, with the express consent pursuant to article 1395 of
                the Italian Civil Code, the Security Trustee to be its
                mandatario con rappresentanza and common representative for
                the purpose of executing in the name and on behalf of the
                Secured Parties any Security Document which is expressed to be
                governed by Italian law;

        (b)     grants the Security Trustee the power to negotiate and approve
                the terms and conditions of such Security Document, execute
                any other agreement or instrument, give or receive any notice
                and take any other action in relation to the creation,
                perfection, maintenance, enforcement and release of the
                security created thereunder in the name and on behalf of the
                Secured Parties; and

        (c)     undertakes to ratify and approve any such action taken in the
                name and on behalf of the Secured Parties by the Security
                Trustee acting in its appointed capacity.

29.4    JAPANESE SECURITY DOCUMENTS
        (a)     Each of the Secured Parties irrevocably appoints the Security
                Trustee to be its attorney and in its name and on its behalf
                to execute, deliver and perfect all documents and do all
                things which the attorney may in its absolute discretion
                consider necessary or desirable in connection with any
                Japanese Security Documents.

        (b)     Each of the Secured Parties shall ratify and confirm all
                things done and all Japanese Security Documents executed by
                any attorney and further confirm that it accepts the terms of
                such Japanese Security Document.

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        (c)     The Secured Parties will procure the enforcement of the
                Japanese Security Documents pursuant to clause 11 (Enforcement
                of Security) of the Intercreditor Agreement only at the
                request of the Agent. In relation to the manner of enforcement
                (apart from the decision or right to commence an enforcement,
                which shall be in accordance with the other provisions of this
                Agreement) of the Japanese Security Documents, the Secured
                Parties and Security Trustee will always act on the directions
                of the Agent.

        (d)     All amounts received by a Secured Party pursuant to any
                enforcement of the Japanese Security Documents shall be
                immediately paid to the Security Trustee for application in
                accordance with Clause 34 (Application of Proceeds) save that
                any Secured Party instructed by the Security Trustee to
                enforce any Japanese Security Document in accordance with this
                Clause shall be entitled to deduct from the proceeds of each
                enforcement its costs, charges and expenses incurred in
                connection with such enforcement prior to paying the proceeds
                of such enforcement to the Security Trustee in accordance with
                Clause 34 (Application of Proceeds).

29.5    BRAZILIAN SECURITY DOCUMENTS
        Each of the Secured Parties hereby expressly appoints the Security
        Trustee to act in the name and on behalf of the Secured Parties in any
        Security Document which is governed by Brazilian law, with powers to
        execute, deliver and perfect all documents and enforce, collect and/or
        take any and all measures as deemed necessary to create, perfect and
        enforce the securities under such Security Documents (including, but
        not limited to, the pledge and usufruct over the quotas issued by
        Flexsys Industria e Comercio Ltda and the Brazilian Guarantee
        Agreement.

29.6    PARALLEL DEBT (COVENANT TO PAY THE SECURITY TRUSTEE)
        (a)     Notwithstanding any other provision of this Agreement, each
                Obligor hereby irrevocably and unconditionally undertakes to
                pay to the Security Trustee, as creditor in its own right and
                not as representative of the other Finance Parties, sums equal
                to and in the currency of each amount payable by such Obligor
                to each of the Finance Parties under each of the Finance
                Documents as and when that amount falls due for payment under
                the relevant Finance Document or would have fallen due but for
                any discharge resulting from failure of another Finance Party
                to take appropriate steps, in insolvency proceedings affecting
                that Obligor, to preserve its entitlement to be paid that
                amount.

        (b)     The Security Trustee shall have its own independent right to
                demand payment of the amounts payable by each Obligor under
                this Clause 29.6, irrespective of any discharge of such
                Obligor's obligation to pay those amounts to the other Finance
                Parties resulting from failure by them to take appropriate
                steps, in insolvency proceedings affecting that Obligor, to
                preserve their entitlement to be paid those amounts.

        (c)     Any amount due and payable by an Obligor to the Security
                Trustee under this Clause 29.6 shall be decreased to the
                extent that the other Finance Parties have received (and are
                able to retain) payment in full of the corresponding amount

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                under the other provisions of the Finance Documents and any
                amount due and payable by an Obligor to the other Finance
                Parties under those provisions shall be decreased to the
                extent that the Security Trustee has received (and is able to
                retain) payment in full of the corresponding amount under this
                Clause 29.6.

        (d)     The rights of the Finance Parties (other than the Security
                Trustee) to receive payment of amounts payable by each Obligor
                under the Finance Documents are several and are separate and
                independent from, and without prejudice to, the rights of the
                Security Trustee to receive payment under this Clause 29.6.

29.7    NO INDEPENDENT POWER
        The Secured Parties shall not have any independent power to enforce,
        or have recourse to, any of the Transaction Security or to exercise
        any rights or powers arising under the Security Documents except
        through the Security Trustee.

29.8    SECURITY TRUSTEE'S INSTRUCTIONS
        The Security Trustee shall:

        (a)     unless a contrary indication appears in a Finance Document,
                act in accordance with any instructions given to it by the
                Agent and shall be entitled to assume that (i) any
                instructions received by it from the Agent are duly given by
                or on behalf of the Majority Lenders or, as the case may be,
                the Lenders in accordance with the terms of the Finance
                Documents and (ii) unless it has received actual notice of
                revocation that any instructions or directions given by the
                Agent have not been revoked;

        (b)     be entitled to request instructions, or clarification of any
                direction, from the Agent as to whether, and in what manner,
                it should exercise or refrain from exercising any rights,
                powers and discretions and the Security Trustee may refrain
                from acting unless and until those instructions or
                clarification are received by it; and

        (c)     be entitled to, carry out all dealings with the Lenders
                through the Agent and may give to the Agent any notice or
                other communication required to be given by the Security
                Trustee to the Lenders.

29.9    SECURITY TRUSTEE'S ACTIONS
        Subject to the provisions of this Clause 29:

        (a)     the Security Trustee may, in the absence of any instructions
                to the contrary, take such action in the exercise of any of
                its powers and duties under the Finance Documents which in its
                absolute discretion it considers to be for the protection and
                benefit of all the Secured Parties; and

        (b)     at any time after receipt by the Security Trustee of notice
                from the Agent directing the Security Trustee to exercise all
                or any of its rights, remedies, powers or discretions under
                any of the Finance Documents, the Security Trustee may, and
                shall if so directed by the Agent, take any action as in its
                sole discretion it thinks fit to enforce the Transaction
                Security.

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29.10   SECURITY TRUSTEE'S DISCRETIONS
        The Security Trustee may:

        (a)     assume (unless it has received actual notice to the contrary
                in its capacity as trustee for the Secured Parties) that (i)
                no Default has occurred and no Obligor is in breach of or
                default under its obligations under any of the Finance
                Documents and (ii) any right, power, authority or discretion
                vested in any person has not been exercised;

        (b)     if it receives any instructions or directions from the Agent
                to take any action in relation to the Transaction Security,
                assume that all applicable conditions under the Finance
                Documents for taking that action have been satisfied;

        (c)     engage, pay for and rely on the advice or services of any
                lawyers, accountants, surveyors or other experts (whether
                obtained by the Security Trustee or by any other Secured
                Party) whose advice or services may at any time seem
                necessary, expedient or desirable;

        (d)     rely upon any communication or document believed by it to be
                genuine and, as to any matters of fact which might reasonably
                be expected to be within the knowledge of a Secured Party or
                an Obligor, upon a certificate signed by or on behalf of that
                person; and

        (e)     refrain from acting in accordance with the instructions of the
                Agent or Lenders (including bringing any legal action or
                proceeding arising out of or in connection with the Finance
                Documents) until it has received any indemnification and/or
                security that it may in its absolute discretion require
                (whether by way of payment in advance or otherwise) for all
                costs, losses and liabilities which it may incur in bringing
                such action or proceedings.

29.11   SECURITY TRUSTEE'S OBLIGATIONS
        The Security Trustee shall promptly inform the Agent of:

        (a)     the contents of any notice or document received by it in its
                capacity as Security Trustee from any Obligor under any
                Finance Document; and

        (b)     the occurrence of any Default or any default by an Obligor in
                the due performance of or compliance with its obligations
                under any Finance Document of which the Security Trustee has
                received notice from any other party to this Agreement.

29.12   EXCLUDED OBLIGATIONS
        Notwithstanding anything to the contrary expressed or implied in the
        Finance Documents, the Security Trustee shall not:

        (a)     be bound to enquire as to (i) whether or not any Default has
                occurred or (ii) the performance, default or any breach by an
                Obligor of its obligations under any of the Finance Documents;

        (b)     be bound to account to any other Party for any sum or the
                profit element of any sum received by it for its own account;

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        (c)     be bound to disclose to any other person (including but not
                limited to any Secured Party) (i) any confidential information
                or (ii) any other information if disclosure would, or might in
                its reasonable opinion, constitute a breach of any law or be a
                breach of fiduciary duty;

        (d)     be under any obligations other than those which are
                specifically provided for in the Finance Documents; or

        (e)     have or be deemed to have any duty, obligation or
                responsibility to, or relationship of trust or agency with,
                any Obligor.

29.13   EXCLUSION OF SECURITY TRUSTEE'S LIABILITY
        The Security Trustee shall not accept responsibility or be liable for:

        (a)     the adequacy, accuracy and/or completeness of any information
                (whether oral or written) supplied by the Security Trustee or
                any other person in or in connection with any Finance Document
                or the Information Memorandum or the transactions contemplated
                in the Finance Documents.

        (b)     the legality, validity, effectiveness, adequacy or
                enforceability of any Finance Document or the Transaction
                Security or any other agreement, arrangement or document
                entered into, made or executed in anticipation of or in
                connection with any Finance Document or the Transaction
                Security;

        (c)     any losses to any person or any liability arising as a result
                of taking or refraining from taking any action in relation to
                any of the Finance Documents or the Transaction Security or
                otherwise, whether in accordance with an instruction from the
                Agent or otherwise, unless directly caused by its gross
                negligence or wilful misconduct;

        (d)     the exercise of, or the failure to exercise, any judgement,
                discretion or power given to it by or in connection with any
                of the Finance Documents, the Transaction Security or any
                other agreement, arrangement or document entered into, made or
                executed in anticipation of or in connection with the Finance
                Documents or the Transaction Security; or

        (e)     any shortfall which arises on the enforcement of the
                Transaction Security.

29.14   NO PROCEEDINGS
        No Party (other than the Security Trustee) may take any proceedings
        against any officer, employee or agent of the Security Trustee in
        respect of any claim it might have against the Security Trustee or in
        respect of any act or omission of any kind by that officer, employee
        or agent in relation to any Finance Document or any Transaction
        Security and any officer, employee or agent of the Security Trustee
        may rely on this Clause.

29.15   OWN RESPONSIBILITY
        Without affecting the responsibility of any Obligor for information
        supplied by it or on its behalf in connection with any Finance
        Document, each Secured Party confirms to the Security Trustee that it
        has been, and will continue to be, solely responsible for making

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        its own independent appraisal and investigation of all risks arising
        under or in connection with any Finance Document including but not
        limited to:

        (a)     the financial condition, status and nature of each member of
                the Group;

        (b)     the legality, validity, effectiveness, adequacy and
                enforceability of any Finance Document and the Transaction
                Security and any other agreement, arrangement or document
                entered into, made or executed in anticipation of, under or in
                connection with any Finance Document or the Transaction
                Security;

        (c)     whether that Secured Party has recourse, and the nature and
                extent of that recourse, against any Party or any of its
                respective assets under or in connection with any Finance
                Document, the Transaction Security, the transactions
                contemplated by the Finance Documents or any other agreement,
                arrangement or document entered into, made or executed in
                anticipation of, under or in connection with any Finance
                Document or the Transaction Security;

        (d)     the adequacy, accuracy and/or completeness of the Information
                Memorandum and any information provided by the Security
                Trustee or by any other person under or in connection with any
                Finance Document, the transactions contemplated by the Finance
                Documents or any other agreement, arrangement or document
                entered into, made or executed in anticipation of, under or in
                connection with any Finance Document; and

        (e)     the right or title of any person in or to, or the value or
                sufficiency of any part of the Charged Property, the priority
                of any of the Transaction Security or the existence of any
                Security affecting the Charged Property.

29.16   NO RESPONSIBILITY TO PERFECT TRANSACTION SECURITY
        The Security Trustee shall not be liable for any failure to:

        (a)     require the deposit with it of any deed or document
                certifying, representing or constituting the title of any
                Obligor to any of the Charged Property;

        (b)     obtain any licence, consent or other authority for the
                execution, delivery, legality, validity, enforceability or
                admissibility in evidence of any of the Finance Documents or
                the Transaction Security;

        (c)     register, file or record or otherwise protect any of the
                Transaction Security (or the priority of any of the
                Transaction Security) under any applicable laws in any
                jurisdiction or to give notice to any person of the execution
                of any of the Finance Documents or of the Transaction
                Security;

        (d)     take, or to require any of the Obligors to take, any steps to
                perfect its title to any of the Charged Property or to render
                the Transaction Security effective or to secure the creation
                of any ancillary Security under the laws of any jurisdiction;
                or

        (e)     require any further assurances in relation to any of the
                Security Documents.

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29.17   INSURANCE BY SECURITY TRUSTEE
        (a)     The Security Trustee shall not be under any obligation to
                insure any of the Charged Property, to require any other
                person to maintain any insurance or to verify any obligation
                to arrange or maintain insurance contained in the Finance
                Documents. The Security Trustee shall not be responsible for
                any loss which may be suffered by any person as a result of
                the lack of or inadequacy of any such insurance.

        (b)     Where the Security Trustee is named on any insurance policy as
                an insured party, it shall not be responsible for any loss
                which may be suffered by reason of, directly or indirectly,
                its failure to notify the insurers of any material fact
                relating to the risk assumed by the insurers or any other
                information of any kind, unless any Secured Party has
                requested it to do so in writing and the Security Trustee has
                failed to do so within fourteen days after receipt of that
                request.

29.18   CUSTODIANS AND NOMINEES
        The Security Trustee may appoint and pay any person to act as a
        custodian or nominee on any terms in relation to any assets of the
        trust as the Security Trustee may determine, including for the purpose
        of depositing with a custodian this Agreement or any document relating
        to the trust created under this Agreement and the Security Trustee
        shall not be responsible for any loss, liability, expense, demand,
        cost, claim or proceedings incurred by reason of the misconduct,
        omission or default on the part of any person appointed by it under
        this Agreement or be bound to supervise the proceedings or acts of any
        person.

29.19   ACCEPTANCE OF TITLE
        The Security Trustee shall be entitled to accept without enquiry, and
        shall not be obliged to investigate, any right and title that any of
        the Obligors may have to any of the Charged Property and shall not be
        liable for or bound to require any Obligor to remedy any defect in its
        right or title.

29.20   REFRAIN FROM ILLEGALITY
        The Security Trustee may refrain from doing anything which in its
        opinion will or may be contrary to any relevant law, directive or
        regulation of any jurisdiction which would or might otherwise render
        it liable to any person, and the Security Trustee may do anything
        which is, in its opinion, necessary to comply with any law, directive
        or regulation.

29.21   BUSINESS WITH THE OBLIGORS
        The Security Trustee may accept deposits from, lend money to, and
        generally engage in any kind of banking or other business with any of
        the Obligors.

29.22   RELEASES
        Upon a disposal of any of the Charged Property or the resignation of
        an Obligor in accordance with Clause 27 (Changes to the Obligors):

        (a)     pursuant to the enforcement of the Transaction Security by a
                Receiver or the Security Trustee; or

        (b)     if that disposal is permitted under the Finance Documents; or

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        (c)     if the Security Trustee is instructed to release the
                Transaction Security granted by the resigning Obligor under
                the terms of Clause 27 (Changes to the Obligors),

        the Security Trustee shall (at the cost of the Obligors) release that
        property from the Transaction Security or the Transaction Security
        given by that Obligor and is authorised to execute, without the need
        for any further authority from the Secured Parties, any release of the
        Transaction Security or other claim over that asset or Obligor and to
        issue any certificates of non-crystallisation of floating charges that
        may be required or desirable.

29.23   WINDING UP OF TRUST
        If the Security Trustee, with the approval of the Majority Lenders,
        determines that (a) all of the Secured Obligations and all other
        obligations secured by any of the Security Documents have been fully
        and finally discharged and (b) none of the Secured Parties is under
        any commitment, obligation or liability (actual or contingent) to make
        advances or provide other financial accommodation to any Obligor
        pursuant to the Finance Documents, the trusts set out in this
        Agreement shall be wound up and the Security Trustee shall release,
        without recourse or warranty, all of the Transaction Security and the
        rights of the Security Trustee under each of the Security Documents.

29.24   PERPETUITY PERIOD
        The perpetuity period under the rule against perpetuities, if
        applicable to this Agreement, shall be the period of eighty years from
        the date of this Agreement.

29.25   POWERS SUPPLEMENTAL
        The rights, powers and discretions conferred upon the Security Trustee
        by this Agreement shall be supplemental to the Trustee Act 1925 and
        the Trustee Act 2000 and in addition to any which may be vested in the
        Security Trustee by general law or otherwise.

29.26   TRUSTEE DIVISION SEPARATE
        (a)     In acting as trustee for the Secured Parties, the Security
                Trustee shall be regarded as acting through its agency or
                trustee division which shall be treated as a separate entity
                from any other of its divisions or departments.

        (b)     If information is received by another division or department
                of the Security Trustee, it may be treated as confidential to
                that division or department and the Security Trustee shall not
                be deemed to have notice of it.

29.27   LENDER' INDEMNITY TO THE SECURITY TRUSTEE
        Each Lender shall (in proportion to its share of the Total Commitments
        or, if the Total Commitments are then zero, to its share of the Total
        Commitments immediately prior to their reduction to zero) indemnify
        the Security Trustee, within three Business Days of demand, against
        any cost, loss or liability incurred by the Security Trustee
        (otherwise than by reason of the Security Trustee's gross negligence
        or wilful misconduct) in acting as Security Trustee under the Finance
        Documents (unless the Security Trustee has been reimbursed by an
        Obligor pursuant to a Finance Document).

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29.28   DISAPPLICATION
        Section 1 of the Trustee Act 2000 shall not apply to the duties of the
        Security Trustee in relation to the trusts constituted by this
        Agreement. Where there are any inconsistencies between the Trustee Act
        1925 or the Trustee Act 2000 and the provisions of this Agreement, the
        provisions of this Agreement shall, to the extent allowed by law,
        prevail and, in the case of any inconsistency with the Trustee Act
        2000, the provisions of this Agreement shall constitute a restriction
        or exclusion for the purposes of that Act.

29.29   RESIGNATION OF SECURITY TRUSTEE
        (a)     The Security Trustee may resign and appoint one of its
                Affiliates as successor by giving notice to the Company and to
                the Agent on behalf of the Lenders.

        (b)     Alternatively the Security Trustee may resign by giving notice
                to the other Parties (or to the Agent on behalf of the
                Lenders) in which case the Majority Lenders may appoint a
                successor Security Trustee.

        (c)     If the Majority Lenders have not appointed a successor
                Security Trustee in accordance with paragraph (b) above within
                30 days after the notice of resignation was given, the
                Security Trustee (after consultation with the Agent) may
                appoint a successor Security Trustee.

        (d)     The retiring Security Trustee shall, at its own cost, make
                available to the successor Security Trustee such documents and
                records and provide such assistance as the successor Security
                Trustee may reasonably request for the purposes of performing
                its functions as Security Trustee under the Finance Documents.

        (e)     The Security Trustee's resignation notice shall only take
                effect upon (i) the appointment of a successor and (ii) the
                transfer of all of the Transaction Security to that successor.

        (f)     Upon the appointment of a successor, the retiring Security
                Trustee shall be discharged from any further obligation in
                respect of the Finance Documents but shall remain entitled to
                the benefit of Clauses 28 (Role of the Agent and the Arranger)
                and 29 (Role of Security Trustee). Its successor and each of
                the other Parties shall have the same rights and obligations
                amongst themselves as they would have had if such successor
                had been an original Party.

        (g)     The Majority Lenders may, by notice to the Security Trustee,
                require it to resign in accordance with paragraph (b) above.
                In this event, the Security Trustee shall resign in accordance
                with paragraph (b) above.

29.30   DELEGATION
        (a)     The Security Trustee may, at any time, delegate by power of
                attorney or otherwise to any person for any period, all or any
                of the rights, powers and discretions vested in it by any of
                the Finance Documents.

        (b)     The delegation may be made upon any terms and conditions
                (including the power to sub-delegate) and subject to any
                restrictions that the Security Trustee may think fit in the
                interests of the Secured Parties and it shall not be bound to

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                supervise, or be in any way responsible for any loss incurred
                by reason of any misconduct or default on the part of any
                delegate or sub-delegate.

29.31   ADDITIONAL SECURITY TRUSTEES
        (a)     The Security Trustee may at any time appoint (and subsequently
                remove) any person to act as a separate trustee or as a
                co-trustee jointly with it (i) if it considers that
                appointment to be in the interests of the Secured Parties or
                (ii) for the purposes of conforming to any legal requirements,
                restrictions or conditions which the Security Trustee deems to
                be relevant or (iii) for obtaining or enforcing any judgment
                in any jurisdiction, and the Security Trustee shall give prior
                notice to the Company and the Agent of that appointment.

        (b)     Any person so appointed shall have the rights, powers and
                discretions (not exceeding those conferred on the Security
                Trustee by this Agreement) and the duties and obligations that
                are conferred or imposed by the instrument of appointment.

        (c)     The remuneration that the Security Trustee may pay to any
                person, and any costs and expenses incurred by that person in
                performing its functions pursuant to that appointment shall,
                for the purposes of this Agreement, be treated as costs and
                expenses incurred by the Security Trustee.

29.32   VOTING RIGHTS
        (a)     Notwithstanding any other provision of this Agreement or any
                other Finance Document the Security Trustee may in its
                absolute discretion and without any consent or authority from
                the Secured Parties by notice in accordance with the notice
                provisions of each Security Document that grants Security over
                Shares (which notice shall be irrevocable) elect to give up
                the right to exercise (or refrain from exercising) voting
                rights in respect of those Shares conferred or to be conferred
                on the Security Trustee pursuant to the relevant clauses of
                that Security Document.

        (b)     The Secured Parties unconditionally waive any rights they may
                otherwise have either to prevent the Security Trustee from
                making the election referred to in paragraph (a) above or to
                require the Security Trustee to indemnify or otherwise
                compensate them for any losses, costs or liabilities incurred
                by any of them in relation to or as a consequence of the
                Security Trustee making such election.

30.     CONDUCT OF BUSINESS BY THE FINANCE PARTIES
        No provision 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 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 computations in
                respect of Tax.

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31.     SHARING AMONG THE FINANCE PARTIES

31.1    PAYMENTS TO FINANCE PARTIES
        If a Finance Party (a "RECOVERING FINANCE PARTY") receives or recovers
        any amount from an Obligor other than in accordance with Clause 32
        (Payment mechanics) or Clause 34 (Application of Proceeds) and applies
        that amount to a payment due under the Finance Documents then:

        (a)     the Recovering Finance Party shall, within three Business
                Days, notify details of the receipt or recovery, to the Agent;

        (b)     the Agent shall determine whether the receipt or recovery is
                in excess of the amount the Recovering Finance Party would
                have been paid had the receipt or recovery been received or
                made by the Agent and distributed in accordance with Clause 32
                (Payment mechanics), without taking account of any Tax which
                would be imposed on the Agent in relation to the receipt,
                recovery or distribution; and

        (c)     the Recovering Finance Party shall, within three Business Days
                of demand by the Agent, pay to the Agent an amount (the
                "SHARING PAYMENT") equal to such receipt or recovery less any
                amount which the Agent determines may be retained by the
                Recovering Finance Party as its share of any payment to be
                made, in accordance with Clause 32.5 (Partial payments).

31.2    REDISTRIBUTION OF PAYMENTS
        The Agent shall treat the Sharing Payment as if it had been paid by
        the relevant Obligor and distribute it between the Finance Parties
        (other than the Recovering Finance Party) in accordance with Clause
        32.5 (Partial payments).

31.3    RECOVERING FINANCE PARTY'S RIGHTS
        (a)     On a distribution by the Agent under Clause 31.2
                (Redistribution of payments), the Recovering Finance Party
                will be subrogated to the rights of the Finance Parties which
                have shared in the redistribution.

        (b)     If and to the extent that the Recovering Finance Party is not
                able to rely on its rights under paragraph (a) above, the
                relevant Obligor shall be liable to the Recovering Finance
                Party for a debt equal to the Sharing Payment which is
                immediately due and payable.

31.4    REVERSAL OF REDISTRIBUTION
        If any part of the Sharing Payment received or recovered by a
        Recovering Finance Party becomes repayable and is repaid by that
        Recovering Finance Party, then:

        (a)     each Finance Party which has received a share of the relevant
                Sharing Payment pursuant to Clause 31.2 (Redistribution of
                payments) shall, upon request of the Agent, pay to the Agent
                for account of that Recovering Finance Party an amount equal
                to the appropriate part of its share of the Sharing Payment
                (together with an amount as is necessary to reimburse that
                Recovering Finance Party for its proportion of any interest on
                the Sharing Payment which that Recovering Finance Party is
                required to pay); and

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        (b)     that Recovering Finance Party's rights of subrogation in
                respect of any reimbursement shall be cancelled and the
                relevant Obligor will be liable to the reimbursing Finance
                Party for the amount so reimbursed.

31.5    EXCEPTIONS
        (a)     This Clause 31 shall not apply to the extent that the
                Recovering Finance Party would not, after making any payment
                pursuant to this Clause, have a valid and enforceable claim
                against the relevant Obligor.

        (b)     A Recovering Finance Party is not obliged to share with any
                other Finance Party any amount which the Recovering Finance
                Party has received or recovered as a result of taking legal or
                arbitration proceedings, if:

                (i)     it notified that other Finance Party of the legal or
                        arbitration proceedings; and

                (ii)    that other Finance Party had an opportunity to
                        participate in those legal or arbitration proceedings
                        but did not do so as soon as reasonably practicable
                        having received notice and did not take separate legal
                        or arbitration proceedings.

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                                  SECTION 11
                                ADMINISTRATION

32.     PAYMENT MECHANICS

32.1    PAYMENTS TO THE AGENT
        (a)     On each date on which an Obligor or a Lender is required to
                make a payment under a Finance Document, that Obligor or
                Lender shall make the same available to the Agent (unless a
                contrary indication appears in a Finance Document) for value
                on the due date at the time and in such funds specified by the
                Agent as being customary at the time for settlement of
                transactions in the relevant currency in the place of payment.

        (b)     Payment shall be made to such account in the principal
                financial centre of the country of that currency (or, in
                relation to euro, in a principal financial centre in a
                Participating Member State or London) with such bank as the
                Agent specifies.

32.2    DISTRIBUTIONS BY THE AGENT
        Each payment received by the Agent under the Finance Documents for
        another Party shall, subject to Clause 32.3 (Distributions to an
        Obligor), Clause 32.4 (Clawback) and Clause 28.17 (Deduction from
        amounts payable by the Agent) be made available by the Agent as soon
        as practicable after receipt to the Party entitled to receive payment
        in accordance with this Agreement (in the case of a Lender, for the
        account of its Facility Office), to such account as that Party may
        notify to the Agent by not less than five Business Days' notice with a
        bank in the principal financial centre of the country of that currency
        (or, in relation to euro, in the principal financial centre of a
        Participating Member State or London).

32.3    DISTRIBUTIONS TO AN OBLIGOR
        The Agent may (with the consent of the Obligor or in accordance with
        Clause 33 (Set-off)) apply any amount received by it for that Obligor
        in or towards payment (on the date and in the currency and funds of
        receipt) of any amount due from that Obligor under the Finance
        Documents or in or towards purchase of any amount of any currency to
        be so applied.

32.4    CLAWBACK
        (a)     Where a sum is to be paid to the Agent under the Finance
                Documents for another Party, the Agent is not obliged to pay
                that sum to that other Party (or to enter into or perform any
                related exchange contract) until it has been able to establish
                to its satisfaction that it has actually received that sum.

        (b)     If the Agent pays an amount to another Party and it proves to
                be the case that the Agent had not actually received that
                amount, then the Party to whom that amount (or the proceeds of
                any related exchange contract) was paid by the Agent shall on
                demand refund the same to the Agent together with interest on
                that amount from the date of payment to the date of receipt by
                the Agent, calculated by the Agent to reflect its cost of
                funds.

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32.5    PARTIAL PAYMENTS

        (a)     If the Agent receives a payment that is insufficient to
                discharge all the amounts then due and payable by an Obligor
                under the Finance Documents, the Agent shall 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 Agent, the Issuing
                        Bank, the Security Trustee (including of any Receiver
                        or Delegate) and the Arranger under the Finance
                        Documents;

                (ii)    SECONDLY, in or towards payment pro rata of any
                        accrued interest, fee or commission due but unpaid
                        under this Agreement;

                (iii)   THIRDLY, in or towards payment pro rata of any
                        principal due but unpaid under this Agreement and any
                        amount due but unpaid under Clauses 7.4 (Claims under
                        a Letter of Credit) and 7.5 (Indemnities); and

                (iv)    FOURTHLY, in or towards payment pro rata of any other
                        sum due but unpaid under the Finance Documents.

        (b)     The Agent shall, if so directed by the Majority Lenders, vary
                the order set out in sub-paragraphs (a)(ii) to (iv) above.

        (c)     Paragraphs (a) and (b) above will override any appropriation
                made by an Obligor.

32.6    NO SET-OFF BY OBLIGORS
        All payments to be made by an Obligor under the Finance Documents
        shall be calculated and be made without (and free and clear of any
        deduction for) set-off or counterclaim.

32.7    BUSINESS DAYS
        (a)     Any payment which is due to be made on a day that is not a
                Business Day shall be made on the next Business Day in the
                same calendar month (if there is one) or the preceding
                Business Day (if there is not).

        (b)     During any extension of the due date for payment of any
                principal or Unpaid Sum under this Agreement interest is
                payable on the principal or Unpaid Sum at the rate payable on
                the original due date.

32.8    CURRENCY OF ACCOUNT
        (a)     Subject to paragraphs (b) to (e) below, the Base Currency is
                the currency of account and payment for any sum due from an
                Obligor under any Finance Document.

        (b)     A repayment of a Utilisation or Unpaid Sum or a part of a
                Utilisation or Unpaid Sum shall be made in the currency in
                which that Utilisation or Unpaid Sum is denominated on its due
                date.

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        (c)     Each payment of interest shall be made in the currency in
                which the sum in respect of which the interest is payable was
                denominated when that interest accrued.

        (d)     Each payment in respect of costs, expenses or Taxes shall be
                made in the currency in which the costs, expenses or Taxes are
                incurred.

        (e)     Any amount expressed to be payable in a currency other than
                the Base Currency shall be paid in that other currency.

32.9    CHANGE OF CURRENCY
        (a)     Unless otherwise prohibited by law, if more than one currency
                or currency unit are at the same time recognised by the
                central bank of any country as the lawful currency of that
                country, then:

                (i)     any reference in the Finance Documents to, and any
                        obligations arising under the Finance Documents in,
                        the currency of that country shall be translated into,
                        or paid in, the currency or currency unit of that
                        country designated by the Agent (after consultation
                        with the Company); and

                (ii)    any translation from one currency or currency unit to
                        another shall be at the official rate of exchange
                        recognised by the central bank for the conversion of
                        that currency or currency unit into the other, rounded
                        up or down by the Agent (acting reasonably).

        (b)     If a change in any currency of a country occurs, this
                Agreement will, to the extent the Agent (acting reasonably and
                after consultation with the Company) specifies to be
                necessary, be amended to comply with any generally accepted
                conventions and market practice in the Relevant Interbank
                Market and otherwise to reflect the change in currency.

32.10   DISRUPTION TO PAYMENT SYSTEMS ETC.
        If either the Agent determines (in its discretion) that a Disruption
        Event has occurred or the Agent is notified by the Company that a
        Disruption Event has occurred:

        (a)     the Agent may, and shall if requested to do so by the Company,
                consult with the Company with a view to agreeing with the
                Company such changes to the operation or administration of the
                Facilities as the Agent may deem necessary in the
                circumstances;

        (b)     the Agent shall not be obliged to consult with the Company in
                relation to any changes mentioned in paragraph (a) above if,
                in its opinion, it is not practicable to do so in the
                circumstances and, in any event, shall have no obligation to
                agree to such changes;

        (c)     the Agent may consult with the Finance Parties in relation to
                any changes mentioned in paragraph (a) above but shall not be
                obliged to do so if, in its opinion, it is not practicable to
                do so in the circumstances;

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        (d)     any such changes agreed upon by the Agent and the Company
                shall (whether or not it is finally determined that a
                Disruption Event has occurred) be binding upon the Parties as
                an amendment to (or, as the case may be, waiver of) the terms
                of the Finance Documents notwithstanding the provisions of
                Clause 39 (Amendments and Waivers);

        (e)     the Agent shall not be liable for any damages, costs or losses
                whatsoever (including, without limitation for negligence,
                gross negligence or any other category of liability whatsoever
                but not including any claim based on the fraud of the Agent)
                arising as a result of its taking, or failing to take, any
                actions pursuant to or in connection with this Clause 32.10;
                and

        (f)     the Agent shall notify the Finance Parties of all changes
                agreed pursuant to paragraph (d) above.

33.     SET-OFF

        Following the occurrence of an Event of Default, a Finance Party may
        set off any matured obligation due from an Obligor under the Finance
        Documents (to the extent beneficially owned by that Finance Party)
        against any matured obligation 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.

34.     APPLICATION OF PROCEEDS

34.1    ORDER OF APPLICATION
        All moneys from time to time received or recovered by the Security
        Trustee under Clause 29.6 (Parallel Debt (Covenant to pay the Security
        Trustee)) and/or in connection with the realisation or enforcement of
        all or any part of the Transaction Security shall be held by the
        Security Trustee on trust to apply them at such times as the Security
        Trustee sees fit, to the extent permitted by applicable law, in the
        following order of priority:

        (a)     in discharging any sums owing to the Security Trustee (in its
                capacity as trustee), any Receiver or any Delegate;

        (b)     in payment to the Agent, on behalf of the Secured Parties, for
                application towards the discharge of all sums due and payable
                by any Obligor under any of the Finance Documents in
                accordance with Clause 32.5 (Partial Payments);

        (c)     if none of the Obligors is under any further actual or
                contingent liability under any Finance Document, in payment to
                any person to whom the Security Trustee is obliged to pay in
                priority to any Obligor; and

        (d)     the balance, if any, in payment to the relevant Obligor.

34.2    INVESTMENT OF PROCEEDS
        Prior to the application of the proceeds of the Transaction Security
        in accordance with Clause 34.1 (Order of Application) the Security
        Trustee may, at its discretion, hold all or part of those proceeds in
        an interest bearing suspense or impersonal account(s) in the

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        name of the Security Trustee or Agent with any financial institution
        (including itself) and for so long as the Security Trustee thinks fit
        (the interest being credited to the relevant account) pending the
        application from time to time of those monies at the Security
        Trustee's discretion in accordance with the provisions of this Clause
        34.

34.3    CURRENCY CONVERSION
        (a)     For the purpose of or pending the discharge of any of the
                Secured Obligations the Security Trustee may convert any
                moneys received or recovered by the Security Trustee from one
                currency to another, at the spot rate at which the Security
                Trustee is able to purchase the currency in which the Secured
                Obligations are due with the amount received.

        (b)     The obligations of any Obligor to pay in the due currency
                shall only be satisfied to the extent of the amount of the due
                currency purchased after deducting the costs of conversion.

34.4    PERMITTED DEDUCTIONS
        The Security Trustee shall be entitled (a) to set aside by way of
        reserve amounts required to meet and (b) to make and pay, any
        deductions and withholdings (on account of Tax or otherwise) which it
        is or may be required by any applicable law to make from any
        distribution or payment made by it under this Agreement, and to pay
        all Tax which may be assessed against it in respect of any of the
        Charged Property, or as a consequence of performing its duties, or by
        virtue of its capacity as Trustee under any of the Finance Documents
        or otherwise (except in connection with its remuneration for
        performing its duties under this Agreement).

34.5    DISCHARGE OF SECURED OBLIGATIONS
        (a)     Any payment to be made in respect of the Secured Obligations
                by the Security Trustee may be made to the Agent on behalf of
                the Lenders and that payment shall be a good discharge to the
                extent of that payment, to the Security Trustee.

        (b)     The Security Trustee is under no obligation to make payment to
                the Agent in the same currency as that in which any Unpaid Sum
                is denominated.

34.6    SUMS RECEIVED BY OBLIGORS
        If any of the Obligors receives any sum which, pursuant to any of the
        Finance Documents, should have been paid to the Security Trustee, that
        sum shall promptly be paid to the Security Trustee for application in
        accordance with this Clause.

34.7    SECURITY TRUSTEE APPLICATION OF PROCEEDS
        In consideration for the covenants given to the Security Trustee by
        each Obligor in Clause 29.6 (Parallel Debt (Covenant to pay the
        Security Trustee)), the Security Trustee agrees with each Obligor to
        apply all moneys from time to time paid by such Obligor to the
        Security Trustee in accordance with the provisions of Clause 34.1
        (Order of Application).

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35.     NOTICES

35.1    COMMUNICATIONS IN WRITING
        Any communication to be made under or in connection with the Finance
        Documents shall be made in writing and, unless otherwise stated, may
        be made by fax or letter.

35.2    ADDRESSES
        The address and fax number (and the department or officer, if any, for
        whose attention the communication is to be made) of each Party for any
        communication or document to be made or delivered under or in
        connection with the Finance Documents is:

        (a)     in the case of the Company, that identified with its name
                below;

        (b)     in the case of each Lender or any other Original Obligor, that
                notified in writing to the Agent on or prior to the date on
                which it becomes a Party; and

        (c)     in the case of the Agent and Security Trustee, that identified
                with its name below,

        or any substitute address or fax number or department or officer as
        the Party may notify to the Agent (or the Agent may notify to the
        other Parties, if a change is made by the Agent) by not less than five
        Business Days' notice.

35.3    DELIVERY

        (a)     Any communication or document made or delivered by one person
                to another under or in connection with the Finance Documents
                will only be effective:

                (i)     if by way of fax, when received in legible form; or

                (ii)    if by way of letter, when it has been left at the
                        relevant address or five Business Days after being
                        deposited in the post postage prepaid in an envelope
                        addressed to it at that address,

                and, if a particular department or officer is specified as
                part of its address details provided under Clause 35.2
                (Addresses), if addressed to that department or officer.

        (b)     Any communication or document to be made or delivered to the
                Agent or to the Security Trustee will be effective only when
                actually received by the Agent or the Security Trustee and
                then only if it is expressly marked for the attention of the
                department or officer identified with the Agent's or the
                Security Trustee's signature below (or any substitute
                department or officer as the Agent shall specify for this
                purpose).

        (c)     All notices from or to an Obligor shall be sent through the
                Agent.

        (d)     Any communication or document made or delivered to the Company
                in accordance with this Clause will be deemed to have been
                made or delivered to each of the Obligors.

        (e)     All notices to a Lender from the Security Trustee shall be
                sent through the Agent.

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35.4    NOTIFICATION OF ADDRESS AND FAX NUMBER
        Promptly upon receipt of notification of an address and fax number or
        change of address or fax number pursuant to Clause 35.2 (Addresses) or
        changing its own address or fax number, the Agent shall notify the
        other Parties.

35.5    ELECTRONIC COMMUNICATION
        (a)     Any communication to be made between the Agent or the Security
                Trustee and a Lender under or in connection with the Finance
                Documents may be made by electronic mail or other electronic
                means, if the Agent, the Trustee and the relevant Lender:

                (i)     agree that, unless and until notified to the contrary,
                        this is to be an accepted form of communication;

                (ii)    notify each other in writing of their electronic mail
                        address and/or any other information required to
                        enable the sending and receipt of information by that
                        means; and

                (iii)   notify each other of any change to their address or
                        any other such information supplied by them.

        (b)     Any electronic communication made between the Agent and a
                Lender or the Security Trustee will be effective only when
                actually received in readable form and in the case of any
                electronic communication made by a Lender to the Agent or the
                Security Trustee only if it is addressed in such a manner as
                the Agent or Security Trustee shall specify for this purpose.

35.6    ENGLISH LANGUAGE
        (a)     Any notice given under or in connection with any Finance
                Document must be in English.

        (b)     All other documents provided under or in connection with any
                Finance Document must be:

                (i)     in English; or

                (ii)    if not in English, and if so required by the Agent,
                        accompanied by a certified English translation and, in
                        this case, the English translation will prevail unless
                        the document is a constitutional, statutory or other
                        official document.

36.     CALCULATIONS AND CERTIFICATES

36.1    ACCOUNTS
        In any litigation or arbitration proceedings arising out of or in
        connection with a Finance Document, the entries made in the accounts
        maintained by a Finance Party are prima facie evidence of the matters
        to which they relate.

                                     138

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36.2    CERTIFICATES AND DETERMINATIONS
        Any certification or determination by a Finance Party of a rate or
        amount under any Finance Document is, in the absence of manifest
        error, conclusive evidence of the matters to which it relates.

36.3    DAY COUNT CONVENTION
        Any interest, commission or fee accruing under a Finance Document will
        accrue from day to day and is calculated on the basis of the actual
        number of days elapsed and a year of 360 days or, in any case where
        the practice in the Relevant Interbank Market differs, in accordance
        with that market practice.

37.     PARTIAL INVALIDITY

        If, at any time, any provision of the Finance Documents is or becomes
        illegal, invalid or unenforceable in any respect under any law of any
        jurisdiction, neither the legality, validity or enforceability of the
        remaining provisions nor the legality, validity or enforceability of
        such provision under the law of any other jurisdiction will in any way
        be affected or impaired.

38.     REMEDIES AND WAIVERS

        No failure to exercise, nor any delay in exercising, on the part of
        any Secured Party or the Arranger, any right or remedy under the
        Finance Documents shall operate as a waiver, nor shall any single or
        partial exercise of any right or remedy prevent any further or other
        exercise or the exercise of any other right or remedy. The rights and
        remedies provided in this Agreement are cumulative and not exclusive
        of any rights or remedies provided by law.

39.     AMENDMENTS AND WAIVERS

39.1     REQUIRED CONSENTS
        (a)     Subject to Clause 39.2 (Exceptions) and Clause 29.22
                (Releases) any term of the Finance Documents may be amended or
                waived only with the consent of the Majority Lenders and the
                Obligors and any such amendment or waiver will be binding on
                all Parties.

        (b)     The Agent, or in respect of the Security Documents the
                Security Trustee, may effect, on behalf of any Finance Party,
                any amendment or waiver permitted by this Clause.

39.2    EXCEPTIONS

        (a)     An amendment or waiver that has the effect of changing or
                which relates to:

                (i)     the definition of "Majority Lenders" in Clause 1.1
                        (Definitions);

                (ii)    an extension to the date of payment of any amount
                        under the Finance Documents;

                (iii)   a reduction in the Margin or a reduction in the amount
                        of any payment of principal, interest, fees or
                        commission payable;

                (iv)    an increase in or an extension of any Commitment;

                                     139

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                (v)     a change to the Borrowers or Guarantors other than in
                        accordance with Clause 27 (Changes to the Obligors);

                (vi)    any provision which expressly requires the consent of
                        all the Lenders;

                (vii)   Clause 2.2 (Finance Parties' rights and obligations),
                        Clause 26 (Changes to the Lenders) or this Clause 39;

                (viii)  the nature or scope of the Charged Property or the
                        manner in which the proceeds of enforcement of the
                        Transaction Security are distributed;

                (ix)    any amendment to the order of priority or
                        subordination under the Intercreditor Agreement;

                shall not be made without the prior consent of all the
                Lenders.

        (b)     An amendment or waiver which relates to the rights or
                obligations of the Agent, the Security Trustee or the Arranger
                may not be effected without the consent of the Agent, the
                Security Trustee or the Arranger.

39.3    AMENDMENTS REQUIRED TO SECURITY DOCUMENTS
        Any amendment made to any term of this Agreement (including but not
        limited to an amendment or waiver that relates to an increase in or
        extension of any Commitment and the payment of principal, interest,
        fees or commission payable), is not effective unless and until all
        Security Documents which, in the reasonable opinion of the Secured
        Trustee, require any confirmation or amendment as a result thereof in
        order to preserve the security thereby created shall have been
        confirmed or amended (including, without limitation, the Brazilian
        Quota Pledge Agreement and the Italian Share Pledge).

40.     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.

41.     USA PATRIOT ACT
        Each Lender hereby notifies each Obligor that pursuant to the
        requirements of the USA Patriot Act, such Lender is required to
        obtain, verify and record information that identifies such Obligor,
        which information includes the name and address of such Obligor and
        other information that will allow such Lender to identify such Obligor
        in accordance with the USA Patriot Act.

                                     140

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                                                               CONFORMED COPY

                                  SECTION 12
                         GOVERNING LAW AND ENFORCEMENT

42.     GOVERNING LAW

        This Agreement is governed by English law.

43.     ENFORCEMENT

43.1    JURISDICTION OF ENGLISH COURTS
        (a)     The courts of England have exclusive jurisdiction to settle
                any dispute arising out of or in connection with this
                Agreement (including a dispute regarding the existence,
                validity or termination of this Agreement) (a "DISPUTE").

        (b)     The Parties agree that the courts of England are the most
                appropriate and convenient courts to settle Disputes and
                accordingly no Party will argue to the contrary.

        (c)     This Clause 43.1 is for the benefit of the Finance Parties
                only. As a result, no Finance Party shall be prevented from
                taking proceedings relating to a Dispute in any other courts
                with jurisdiction. To the extent allowed by law, the Finance
                Parties may take concurrent proceedings in any number of
                jurisdictions.

43.2    SERVICE OF PROCESS
        Without prejudice to any other mode of service allowed under any
        relevant law, each Obligor (other than an Obligor incorporated in
        England and Wales):

        (a)     irrevocably appoints Flexsys Rubber Chemicals Limited as its
                agent for service of process in relation to any proceedings
                before the English courts in connection with any Finance
                Document; and

        (b)     agrees that failure by an agent for service of process to
                notify the relevant Obligor of the process will not invalidate
                the proceedings concerned.

43.3    WAIVER OF IMMUNITY
        Each Obligor waives generally all immunity it or its assets or
        revenues may otherwise have in any jurisdiction, including immunity in
        respect of:

        (a)     the giving of any relief by way of injunction or order for
                specific performance or for the recovery of assets or
                revenues; and

        (b)     the issue of any process against its assets or revenues for
                the enforcement of a judgment or, in an action in rem, for the
                arrest, detention or sale of any of its assets and revenues.

43.4    TITULO EXECUTIVO EXTRAJUDICIAL
        In accordance with Section 585, item II and Section 585, second
        paragraph of the Brazilian Code of Civil Procedure (Law 5,869/73 as
        amended from time to time), this Agreement shall be deemed as an
        out-of-court document (titulo executivo extrajudicial) for all
        purposes under Brazilian law, including but not limited to for the
        purposes of execution, collection, receipt or otherwise for the taking
        of any and all measures required

                                     141

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        to perfect and enforce the Guarantee and the Security created herein
        and under the Security Documents against Flexsys Industria e Comercio
        Ltda., being understood and agreed that the Parties appoint Brazil as
        the place for compliance by Flexsys Industria e Comercio Ltda. of its
        obligations under this Agreement, the Security Documents and the
        Finance Documents.

44.     WAIVER OF JURY TRIAL

        EACH OF THE PARTIES TO THIS AGREEMENT AGREES TO WAIVE IRREVOCABLY ITS
        RIGHTS TO A JURY TRIAL OF ANY CLAIM BASED UPON OR ARISING OUT OF THIS
        AGREEMENT OR ANY OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT OR ANY
        TRANSACTION CONTEMPLATED IN THIS AGREEMENT. This waiver is intended to
        apply to all Disputes. Each party acknowledges that (a) this waiver is
        a material inducement to enter into this Agreement, (b) it has already
        relied on this waiver in entering into this Agreement and (c) it will
        continue to rely on this waiver in future dealings. Each party
        represents that it has reviewed this waiver with its legal advisers
        and that it knowingly and voluntarily waives its jury trial rights
        after consultation with its legal advisers. In the event of
        litigation, this Agreement may be filed as a written consent to a
        trial by the court.

THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF
THIS AGREEMENT.

                                     142www.EXFILE.com  888.775-4789   BOSTON SCIENTIFIC CORPORATION -- FORM 8K

    EXHIBIT
      10.1

    

    

    2007
      PERFORMANCE INCENTIVE PLAN

    

     

    
      	
              I.

            	
              Purpose
                of the Plan

            

    

     

    The
      purpose of the Plan is to align Boston Scientific and employee interests by
      providing incentives for the achievement of key business milestones and
      individual performance objectives that are critical to the success of Boston
      Scientific. To this end, individual performance objectives are established
      during the annual goal setting process.  All incentive eligible
      employees are required to develop a set of written, measurable, annual goals
      that are agreed to and approved by their direct manager as part of the
      Performance Achievement and Development Review (PADR) process. Goal setting
      should be completed within the required time
      frame.

     

     

    
      	
              II.

            	
              Eligible
                Participants

            

    

     

    The
      Plan
      year runs from January 1 – December 31.  The Plan covers all United
      States employees determined by Boston Scientific to be regular salaried exempt
      (excluding all term employees) employees who are ineligible for commissions
      under any sales compensation plan. The Plan also covers those Boston Scientific
      International and expatriate/inpatriate employees selected by Boston Scientific
      for participation. The Plan does not include any other employees, including
      those in positions covered by sales compensation plans. The plan also does
      not
      include any employees who are eligible for any other Boston Scientific incentive
      plan or program unless the terms of that plan or program expressly permit
      participation in both that plan or program and this Plan. Employees who meet
      the
      above eligibility criteria and who have at least two full months of eligible
      service during the Plan year may participate in the Plan on a prorated basis,
      proration to be based on the percentage of time the employee was eligible to
      participate under all applicable criteria and in the following circumstances:
      if
      (1) they have less than one year of eligibility during the Plan year, or (2)
      they have changed their business unit during the Plan year.  Employees
      who have less than two full months of eligible service during the Plan year
      are
      not eligible to participate in the Plan. Boston Scientific may review Plan
      participation eligibility criteria from time to time and may revise such
      criteria at any time, even within a Plan year, with or without notice and within
      its sole discretion.

     

    Employees
      and managers of those employees who do not timely complete the annual PADR
      goal
      setting process in a given calendar incentive year will be ineligible to
      participate in the Plan for that year.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              III.

            	
              Boston
                Scientific Performance Measures and Incentive Pool
                Funding

            

    

     

     

    There
      will be five measurement periods during the Plan year (one for each of the
      four
      calendar quarters and one for the annual Plan year).  For each
      measurement period, the Boston Scientific Executive Committee will identify
      critical performance measures and the weighting of total Boston Scientific
      and
      Group/Division/Region/Country performance (See Performance Measurements and
      Funding document), as well as the incentive pool funding that will be
      established for each level of Boston Scientific and
      Group/Division/Region/Country performance.  Each measurement period’s
      performance will be measured against its targets and will be evaluated and
      funded separately.  The total annual funding will be the sum of the
      funding for each of the five measurement periods.

     

    The
      performance of the operating plants and distribution centers (“Operations”) will
      be measured during the five measurement periods on a year to date basis against
      annual goals; that is, new goals will not be established by measurement
      period.  A scorecard has been developed to track leading performance
      metrics for each plant and distribution center. The total funding will be based
      on cumulative BSC sales, quality and net income funding for each measurement
      period, plus the latest year to date plant/distribution center metrics and
      funding.  Since goals are set on an annual basis, over or under
      operations metrics achievement in a given measurement period can be offset
      by
      subsequent measurement periods reflected in the latest year to date cumulative
      results.

     

    Except
      as
      noted herein, any payments due to plan participants will be made by March 29,
      of
      the year following the Plan year. Incentive payments are typically paid in
      one
      installment.  The unweighted funding levels for Boston Scientific and
      Group/Division/Region/Country and Operations performance will be based on the
      Performance Funding outlined in the Performance Measures and Funding
      document.

     

    The
      Boston Scientific Executive Committee has sole authority over administration
      and
      interpretation of the Plan and retains its right to exercise discretion as
      it
      sees fit.  The Boston Scientific Executive Committee will recommend
      the level of Plan funding to the Board of Directors for its
      approval.  Subject to the Board’s approval, the incentive payment for
      any participant will be based upon the overall funding available and the
      employee’s overall individual performance relative to other Plan eligible
      employees in the applicable business unit, as determined by Boston
      Scientific.

     

     

    
      	
              IV.

            	
              Incentive
                Targets

            

    

     

    Incentive
      targets have been established for all eligible participants. These incentive
      targets represent the incentive (as a percent of base salary) that an individual
      is eligible to receive.  Funding calculation examples are contained in
      the Performance Measures and Funding document.

     

    The
      incentive pool (see Performance Measures and Funding document) is funded by
      a
      weighted combination of Boston Scientific’s overall performance and the
      applicable 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Group/Division/Region/Country/Operations
      performance.  All incentive eligible employees must have established
      annual goals agreed to by their direct manager and which link to their
      appropriate level of accountability.  An individual participant’s
      incentive payment will be determined based on an assessment of the overall
      individual performance contribution in the context of the applicable incentive
      pool(s).

     

    It
      is
      Boston Scientific’s aim to provide significant incentive and reward
      opportunities to employees for world-class performance
      achievement.  Since our business goals (e.g., sales, profit) are
      normally set at a level above our business competitors (aggressive but
      realistic), we have set our incentive targets aggressively as well. The
      incentive pool for Corporate/business unit performance may be funded as high
      as
      120% of target for the calendar quarter measurement periods and 200% of target
      for the annual measurement period. Above market rewards can be earned for above
      market performance.

     

    See
      Performance Measures and Funding document for an Incentive Calculation example.
      Except as noted, nothing in this plan guarantees any incentive payment will
      be
      made to any individual. Receipt of an incentive payment in one year does not
      guarantee eligibility in any future year

    

    
      	
              V.

            	
              Individual
                Incentive Payments

            

    

     

    The
      incentive payment for any eligible employee may vary from the approved and
      applicable incentive pool funding based on that individual’s overall performance
      and achievement of objectives relative to other eligible employees in the
      applicable business unit.  However, the total of incentive payments to
      all eligible individuals may not exceed the total applicable funding
      pool(s).

     

     

    
      	
              VI.

            	
              Payment
                Criteria

            

    

     

    A
      participant must be employed by Boston Scientific on December 31 of the Plan
      year to be eligible to receive any award pay-out under the Plan.  For
      example, a participant who is not required to report to work during any
      notification period applicable under any Boston Scientific severance or
      separation plan, but who is still an employee on December 31, will remain
      eligible to receive any award pay-out under the Plan.  A participant
      who specifically has been exempted under a specially designed, written Boston
      Scientific plan or program from the requirement to be employed on December
      31
      may remain eligible, depending on the terms of the applicable written plan
      document; in such cases, the terms of such written plan document will govern
      in
      all respects, including as to eligibility, timing and amount of any incentive
      payment.  Notwithstanding anything herein, this Plan does not confer
      eligibility on any employee on leave of absence status.  Also
      notwithstanding anything herein, a participant whose employment ceases prior
      to
      December 31 of the Plan year but who has otherwise met all Plan eligibility
      criteria and who, as of the date of such cessation of employment, (1), has
      attained age 50, (2) has accrued at least five years of service with Boston
      Scientific; and (3) whose age and years of service as of such date equals or
      exceeds 62, may participate in the Plan on a prorated 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    basis,
      proration to be based on the percentage of time the participant was employed
      and
      eligible to participate under all applicable criteria; further, a participant
      whose employment ceases prior to December 31 of the Plan year by reason of
      death
      but who otherwise met all Plan eligibility criteria may participate in the
      Plan
      on a prorated basis, proration to be based on the percentage of time the
      participant was employed and eligible to participate under the applicable
      criteria.

     

    Except
      as
      noted above, all incentive payments will be based on a participant’s salary and
      incentive target as of December 31 of the Plan year.  Incentive
      payments will be made by March 29 of the year following the Plan
      year.

     

     

    
      	
              VII.

            	
              Incentive
                Compensation Recoupment
                Policy

            

    

    

    Effective
      for compensation awards made on or after February 20, 2007, to the extent
      permitted by governing law, the Board will seek reimbursement of incentive
      compensation paid to any executive officer in the event of a restatement of
      the
      Company’s financial results that reduced a previously granted award’s size or
      payment.  In that event, we will seek to recover the amount of the
      performance incentive award paid to the executive officers which is in excess
      of
      the amounts that would have been paid based on the restated financial
      results.

    

    

    
      	
              VIII.

            	
              Termination,
                Suspension or Modification and Interpretation of the
                Plan

            

    

     

    Boston
      Scientific may terminate, suspend or modify and if suspended, may reinstate
      with
      or without modification all or part of the Plan at any time, with or without
      notice to the participant.  Boston Scientific reserves the exclusive
      right to determine eligibility to participate in this Plan and to interpret
      all
      applicable terms and conditions, including eligibility criteria.

     

     

    
      	
              IX.

            	
              Other

            

    

     

    This
      document sets forth the terms of the Plan and is not intended to be a contract
      or employment agreement between the participant and Boston
      Scientific.  As applicable, it is understood that both the participant
      and Boston Scientific have the right to terminate the participant’s employment
      with Boston Scientific at any time, with or without cause and with or without
      notice, in acknowledgement of the fact that their employment relationship is
“at
      will.”

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