Form 20-F 2005

Our syndicated renewable line of credit, Refinancing Facilities Agreement, concluded March 31, 2004 was repaid on July 29, 2005.
In the framework of this agreement, Rhodia S.A. and certain of our subsidiaries concluded an agreement with a group of banks
and certain lessors in the name of French leases (the guaranteed creditors). Furthermore, in accordance with the subordination
agreement, we agreed to subordinate the debt of certain of our subsidiaries as regards the guaranteed creditors.
Guarantees agreed to in the framework of securitization of commercial debt
On December 21, 2004, we and certain of our European subsidiaries concluded a series of contracts with a French bank putting
into place a five year program for the securitization of commercial debt, for a maximum financing amount of €242 million and
£22 million. In particular, we guaranteed the payment of the total sum due by our subsidiaries. At December 31, 2005, the amount
of outstanding non-collected debt totaled approximately €260 million; obtained financing amounted to approximately €183 million.
Furthermore, in the framework of another securitization program, we guaranteed the obligations under the agreement of our
North American subsidiaries: Rhodia Inc., Rhodia Electronics & Catalysis and Rhodia Canada Inc. This latest program ended on
November 14, 2005.
Changes to the Designated Executive Officer’s employment contract
The Board of Directors authorized changing the employment contract of the Designated Executive Officer, Mr. Auffret, so as to
increase his annual fixed compensation to €420,000 per year and to increase his variable compensation from 70% to 85% of his
fixed compensation. From January 1 through June 23, 2005, the length of his term as Designated Executive Officer, and in applying
the terms of his employment agreement, Mr. Auffret’s gross fixed compensation was €196,055. He did not receive any additional
variable payments under his employment contract.
Agreements with Sanofi-Aventis in 1998 and 1999
We concluded certain agreements with Sanofi-Aventis at the time of our formation on January 1, 1998, which were amended in
1999 by the “Heads of Agreement”, which continued to be in force in 2005. The pertinent agreements included (i) a framework
agreement for scientific and technical collaboration, by which we would maintain the right to exploit, in our area of activity, the knowhow
held by one of Aventis’ subsidiaries, which was already exploited and in the process of being developed by us at the time of
our formation; and (ii) a cross-indemnification provision, pursuant to which, Sanofi-Aventis will indemnify us against any damages
incurred by us arising out of an action or claim brought by a third party against us to the extent such action or claim results solely
from the business operations of Sanofi-Aventis or those of its subsidiaries. Similarly, we will indemnify Sanofi-Aventis against any
damages incurred by Sanofi-Aventis arising out of an action or claim brought by a third party against Sanofi-Aventis to the extent
such action or claim results solely from our business operations or of those of our subsidiaries.
Form 20 - F 2005 - Rhodia
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