Exhibit 10.1

SECOND AMENDED AND RESTATED LOAN, SECURITY AND GUARANTEE AGREEMENT

Dated as of April 15, 2020

among

KRATON POLYMERS U.S. LLC,
and,

KRATON CHEMICAL, LLC,
as U.S. Borrowers and Guarantors,

KRATON CORPORATION,
as Parent,

KRATON POLYMERS LLC,
KRATON POLYMERS CAPITAL CORPORATION,
AZ CHEM US HOLDINGS INC.,
AZ CHEM US INC.,

AZ CHEM PARTNERS I LLC,

AZ CHEM PARTNERS II LLC,

AZ CHEM HOLDINGS LP,

AZ CHEM INTERMEDIATE LP,
and
ELASTOMERS HOLDINGS LLC,
as Guarantors,

KRATON POLYMERS NEDERLAND B.V.,
as Initial Dutch Kraton Borrower,

KRATON POLYMERS HOLDINGS B.V.,
Kraton Polymers Research B.V.,
and

K.P. Investment B.V.
as Foreign Guarantors,

any other Borrowers party hereto from time to time,

certain Persons party hereto from time to time as Guarantors,

CERTAIN FINANCIAL INSTITUTIONS,
as Lenders,

BANK OF AMERICA, N.A.,
as Administrative Agent, Collateral Agent and Security Trustee

BANK OF AMERICA, N.A.,  

As Sole Lead Arranger and Sole Book Manager

TABLE OF CONTENTS

SECOND AMENDED AND RESTATED LOAN, SECURITY AND GUARANTEE AGREEMENT

THIS SECOND AMENDED AND RESTATED LOAN, SECURITY AND GUARANTEE AGREEMENT (this “Agreement”) is dated as of April 15, 2020, among KRATON CORPORATION, a Delaware corporation (“Parent”), KRATON POLYMERS U.S. LLC, a Delaware limited liability company (“Kraton Polymers”), KRATON CHEMICAL, LLC, a Delaware limited liability company (“Kraton Chemical”), and KRATON POLYMERS NEDERLAND B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, having its seat (statutaire zetel) in Rotterdam, the Netherlands and its registered office address at Transistorstraat 16, 1322CE Almere, registered with the trade register of the Dutch Chamber of Commerce (Kamer van Koophandel) under number 24294675 (the “Initial Dutch Kraton Borrower” and together with Kraton Polymers, Kraton Chemical and each other Subsidiary of the Parent that becomes a Borrower in accordance with Section 10.1.9, the “Borrowers” and each, a “Borrower”), the other Persons from time to time party to this Agreement as Guarantors, the financial institutions from time to time party to this Agreement as lenders (collectively, “Lenders”), and BANK OF AMERICA, N.A., a national banking association, in its capacity as collateral agent, administrative agent and security trustee for itself and the other Secured Parties (together with any successor agent appointed pursuant to Section 12.9, the “Agent”).

R E C I T A L S:

WHEREAS, capitalized terms used in these Recitals and not otherwise defined shall have the respective meanings set forth for such terms in Section 1.1 hereof.

WHEREAS, pursuant to the Existing Credit Agreement, the original lenders party thereto have provided to Borrowers senior secured revolving credit facilities to finance their mutual and collective business in an initial aggregate principal amount of $250,000,000 consisting of a foreign revolving credit facility in the initial facility amount of $85,000,000 and a U.S. revolving credit facility in the initial facility amount of $165,000,000.

WHEREAS, subject to the terms and conditions of this Agreement, Agent, the Lenders party hereto and the Loan Parties party hereto desire to amend and restate the Existing Credit Agreement to among other things, (a) amend certain terms and provisions of the credit facilities provided for in the Existing Credit Agreement, and (b) ratify all Liens granted to Agent in connection with the Existing Credit Agreement and the Obligations thereunder, without causing a novation or extinguishment of any outstanding Obligations or termination of any outstanding Liens (including for Belgian, English, Dutch, French and German law purposes).

NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties agree as follows:

Section 1.          DEFINITIONS; RULES OF CONSTRUCTION

1.1.     Definitions. As used herein, the following terms have the meanings set forth below:

“2025 Senior Notes” means the 7.00% Senior Notes due 2025 of KPLLC and KPCC issued pursuant to the 2025 Senior Notes Indenture and any additional notes issued thereunder from time to time, as any such notes may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“2025 Senior Notes Indenture” means the indenture, dated as of March 24, 2017, with KPLLC and KPCC, as issuers, the guarantors from time to time party thereto and Wells Fargo Bank, National Association, as trustee, relating to the 2025 Senior Notes, as such document may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“2026 Senior Notes” means the 5.25% Senior Notes due 2026 of KPLLC and KPCC issued pursuant to the 2026 Senior Notes Indenture and any additional notes issued thereunder from time to time, as any such notes may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“2026 Senior Notes Indenture” means the indenture, dated as of May 24, 2018, with KPLLC and KPCC, as issuers, the guarantors from time to time party thereto and Wells Fargo Bank, National Association, as trustee, Deutsche Bank AG, London Branch, as principal paying agent, and Deutsche Bank Luxembourg S.A., as authenticating agent, registrar and transfer agent, relating to the 2026 Senior Notes, as such document may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

“ABL Intercreditor Agreement” means that certain Intercreditor Agreement dated January 6, 2016, by and among Term Agent, in its capacity as agent for the Fixed Asset Lenders (as defined therein), Agent, and acknowledged by certain Loan Parties, as amended from time to time in accordance with the terms thereof.

“ABL Priority Collateral” means the “ABL Priority Collateral” as defined in the ABL Intercreditor Agreement.

“Account” has the meaning set forth in Article 9 of the UCC.

“Account Debtor” means any Person who is obligated under an Account.

“Accounting Changes” has the meaning set forth in Section 1.2.

“Acquisition” means a transaction or series of transactions resulting in (a) acquisition of a business, division, or substantially all assets of a Person; (b) record or beneficial ownership of more than 50% of the Equity Interests of a Person; or (c) merger, consolidation or combination of Parent or any Restricted Subsidiary with another Person.

“Additional Dutch Kraton Lender” has the meaning set forth in Section 2.1.7(a).

“Additional Foreign Borrower” means any Person that is organized and operates outside of the U.S. that, after the date hereof, has executed a supplement or joinder to this Agreement in accordance with Section 10.1.9 and has satisfied the other requirements of Section 10.1.9 in order to become a Foreign Borrower hereunder.

“Additional Lender” has the meaning set forth in Section 2.1.7(b).

“Additional U.S. Lender” has the meaning set forth in Section 2.1.7(b).

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

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“Affiliate” means with respect to any Person, any branch of such Person or any other Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. For purpose of this definition, (a) “Control” means the possession, directly or indirectly, of the power (i) to vote 20% or more of the Equity Interests having ordinary voting power for the election of directors, in the case of a corporation, or equivalent governing body, in the case of any other type of legal entity, of a Person or (ii) to otherwise direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise and (b) “Controlled” has a correlative meaning. For the avoidance of doubt, none of the Sole Lead Arranger, the Sole Book Manager, the Agent, their respective lending affiliates or any entity acting as a Fronting Bank hereunder shall be deemed to be an Affiliate of Parent, the Borrowers or any of their respective Subsidiaries.

“Agent” has the meaning set forth in the preamble to this Agreement.

“Agent Indemnitees” means the Agent and its officers, directors, employees, Affiliates and agents, including, without limitation, the Security Trustees.

“Agent Professionals” means attorneys, accountants, appraisers, auditors, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals and experts retained by the Agent.

“Agreement” means this Second Amended and Restated Loan, Security and Guarantee Agreement, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

“Allocable Amount” has the meaning set forth in Section 5.10.3(b).

“AML Legislation” has the meaning set forth in Section 14.16.

“Anti-Corruption Laws” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder, the U.K. Bribery Act of 2010, as amended, and all other applicable laws and regulations or ordinances concerning or relating to bribery or corruption in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business.

“Anti-Money Laundering Laws” means the applicable laws or regulations in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business that relates to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto.

“Anti-Terrorism Law” means any law relating to terrorism or money laundering, including the Proceeds of Crime Act and the Patriot Act.

“Applicable Dutch Kraton Borrower” means (a) Initial Dutch Kraton Borrower or (b) any other Dutch Kraton Borrower, as the context may require.

“Applicable Dutch Kraton Borrower Commitment” means with respect to any Dutch Kraton Borrower, the maximum amount of Dutch Kraton Revolver Commitments under which such Dutch Kraton Borrower may borrow Dutch Kraton Revolver Loans or request the issuance of Dutch Kraton Letters of Credit, as designated by the North American Loan Party Agent from time to time, and in an aggregate amount for all Dutch Kraton Borrowers not to exceed the total Dutch Kraton Revolver Commitments.

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“Applicable Foreign Borrower” means (a) an Applicable Dutch Kraton Borrower, or (b) any other Foreign Borrower, as the context requires.

“Applicable Foreign Borrower Commitment” means any Applicable Dutch Kraton Borrower Commitment or the maximum amount of Revolver Commitments with respect to an Applicable Foreign Borrower, from time to time, as the context may require.

“Applicable Law” means all laws, rules, regulations and legally binding governmental guidelines applicable to the Person, conduct, transaction, agreement or matter in question, including all applicable statutory law and common law, and all provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities having the force of law.

“Applicable Lenders” means (a) with respect to the U.S. Borrowers, the U.S. Lenders, or (b) with respect to the Dutch Kraton Borrowers, the Dutch Kraton Lenders.

“Applicable Margin” means with respect to any Type of Loan and any other Obligations specified below, the respective margin set forth below, based on the Borrowers’ Average Total Excess Availability for the most recent Fiscal Quarter determined as of the most recent determination date:

Until the delivery to the Agent, pursuant to Section 8.1, of a Borrowing Base Certificate for each Borrowing Base covering the first calendar month ending after the Closing Date, the Applicable Margin shall be determined as if Level I were applicable. Thereafter, (a) the Applicable Margin shall be determined (i) on the first day of the calendar month until the end of the first Fiscal Quarter ended after the Closing Date and (ii) as of the end of each Fiscal Quarter, in each case based upon the Borrowing Base Certificates delivered pursuant to Section 8.1 and (b) each change in the Applicable Margin shall be effective during the period commencing on the first day of the calendar month following the receipt by the Agent of the financial statements and Compliance Certificate for the Fiscal Quarter or, in the case of the last Fiscal Quarter of each year, the calendar year then ended pursuant to Section 10.1.2(a) or (b), as applicable, and ending on the date immediately preceding the effective date of the next such change. Average Total Excess Availability shall be deemed to be in Level III at the option of the Agent or at the request of the Required Lenders if the Loan Party Agents fail to deliver any Borrowing Base Certificate required to be delivered by any of them pursuant to Section 8.1, during the period from the expiration of the time for delivery thereof until such Borrowing Base Certificate is delivered.

“Applicable U.S. Borrower” means (a) Kraton Polymers, (b) Kraton Chemical, or (c) any other U.S. Borrower, as the context may require.

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“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in its Ordinary Course of Business, has the capacity to fund Revolver Loans hereunder and is administered or managed by a Lender, an entity that administers or manages a Lender, or an Affiliate of either.

“Assignment and Acceptance” means an assignment agreement between a Lender and Eligible Assignee, in the form of Exhibit A-1.

“Availability” Dutch Kraton Availability and/or U.S. Availability, as the context may require.

“Average Total Excess Availability” means for any period, the average daily Excess Availability during such period.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, rule, regulation or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Bank of America” means Bank of America, N.A., a national banking association, and its successors and assigns.

“Bank of America (London)” means Bank of America (acting through its London branch).

“Bank of America Indemnitees” means Bank of America, Bank of America (London), and their respective officers, directors, employees, Affiliates and agents.

“Bank Product” means any of the following products, services (other than cash management services) or facilities extended to any Loan Party or any other Subsidiary of Parent by a Lender or any of its Affiliates or any Person that is not a Lender hereunder (in the case of clause (b), at the time the Hedge Agreement is executed or, if such time is prior to the Closing Date, on the Closing Date): (a) Banking Services; (b) products under Hedge Agreements; (c) other banking products or services as may be requested by any Borrower or any other Loan Party, other than Loans and Letters of Credit and (d) any other demand deposit, operating account relationships or money market accounts.

“Bank Product Debt” means Debt and other obligations of a Loan Party or any of its Subsidiaries relating to Bank Products.

“Bank Product Document” means any agreement, instrument or other document entered into in connection with any Bank Product Debt.

“Banking Services” means any of the following services: (a) commercial credit cards, merchant cards, and purchasing card services (including, without limitation, the processing of payments and other administrative services with respect thereto), (b) stored value cards and (c) Treasury Management Services.

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“Base Rate” means European Base Rate and/or U.S. Base Rate, as the context requires.

“Base Rate Loan” means a European Base Rate Loan and/or U.S. Base Rate Loan, as the context requires.

“Belgian Security Agreement” means each pledge and security agreement governed by Belgian law by and among any Dutch Kraton Dutch Domiciled Loan Party and the Dutch Kraton Security Trustee.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation, in form and substance satisfactory to Agent.

“Beneficial Ownership Regulation” means 31 C.F.R. §1010.230.

“Board of Governors” means the Board of Governors of the Federal Reserve System.

“Borrowed Money” means with respect to any Loan Party or Restricted Subsidiary, without duplication, its (a) Debt that (i) arises from the lending of money by any Person to such Loan Party or Restricted Subsidiary, (ii) is evidenced by notes, drafts, bonds, debentures, loan agreements or similar instruments, (iii) accrues interest or is a type upon which interest charges are customarily paid; (b) Capital Lease Obligations; (c) reimbursement obligations with respect to letters of credit issued for the account of such Loan Party or Restricted Subsidiary; and (d) guaranties of any Debt of the foregoing types owing by another Person.

“Borrower” and “Borrowers” have the meaning set forth in the preamble to this Agreement.

“Borrower Group” means a group consisting of (a) the U.S. Borrowers, (b) the Dutch Kraton Borrowers, and (c) Additional Foreign Borrowers, as the context requires.

“Borrower Group Commitment” means with respect to the commitment of (a) a U.S. Lender, its U.S. Revolver Commitment, and (b) a Dutch Kraton Lender, its Dutch Kraton Revolver Commitment. The term “Borrower Group Commitments” means (i) the Borrower Group Commitment of all U.S. Lenders, or (ii) the Borrower Group Commitment of all Dutch Kraton Lenders, as the context requires. To the extent any Lender has more than one Borrower Group Commitment, each such Commitment shall be considered as a separate Commitment for purposes of this definition.

“Borrower Materials” means Borrowing Base information, reports, financial statements and other materials delivered in writing by Borrowers hereunder, as well as other Reports and information provided by the Agent to Lenders.

“Borrowing” means a group of Loans of one Type that are made on the same day or are converted into Loans of one Type on the same day.

“Borrowing Base” means (a) the U.S. Borrowing Base, and/or (b) the Dutch Kraton Borrowing Base, as the context requires.

“Borrowing Base Certificate” means a certificate, duly executed by a Senior Officer of the Foreign Loan Party Agent or the North American Loan Party Agent, as applicable, in the form of (a) Exhibit B-1 with respect to the Dutch Kraton Borrowing Base, (b) Exhibit B-2 with respect to the portion of the U.S. Borrowing Base applicable to Kraton Polymers, and (c) Exhibit B-3 with respect to the portion of the U.S. Borrowing Base applicable to Kraton Chemical, in each case, with such changes as

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may be agreed to by such Loan Party Agent and the Agent, setting forth the Borrowers’ calculation of their respective Borrowing Base (including, without limitation, the then-current listing of all Account Debtors participating in any Supplier Financing Transaction with Parent and/or any of its Subsidiaries, Affiliates or Kraton SPV, as applicable).

“Business Day” means any day excluding Saturday, Sunday and any other day that is a legal holiday under the Applicable Laws of the State of New York, the State of Texas or the United Kingdom, or is a day on which banking institutions located in such states are authorized to close, or are in fact closed; and when used with reference to (a) a LIBOR Loan (and related interest rate settings, fundings, disbursements, settlements and payments), the term shall also exclude any day on which banks are authorized to close, or are in fact closed for the transaction of banking business in London, England, and (b) a Dutch Kraton Revolver Loan (and related interest rate settings, fundings, disbursements, settlements and payments), shall also exclude any day (i) on which banks are not open for the transaction of banking business in London, England or the Netherlands and (ii) in respect of any such Revolver Loan denominated in Euros (and related interest rate settings, fundings, disbursements, settlements and payments), any day that is not a TARGET Day.

“Capital Expenditures” means capital expenditures made by a Loan Party or Restricted Subsidiary for the acquisition of fixed assets, or any improvements, replacements, substitutions or additions thereto with a useful life of more than one year; provided, however, that Capital Expenditures shall not include any such expenditures which are: (a) made with the proceeds of any contribution of capital to Parent or sale or issuance by Parent of Equity Interests (other than Disqualified Equity Interests), in each case, the proceeds of which have been contributed to Borrowers and which are designated as being for such purpose by written notice from the applicable Loan Party Agent, (b) Permitted Acquisitions, (c) made with net proceeds of the sale or other Disposition (including by casualty or condemnation) of a capital asset reinvested in assets to the extent made within 364 days of the date of such sale or disposition (or committed to be invested within such 364 day period and invested within 180 days thereafter), (d) expenditures made in connection with the replacement, substitution, restoration or repair of assets to the extent financed with (I) insurance proceeds paid on account of the loss of or damage to the assets being replaced, restored or repaired, or (II) awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced, (e) the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time, (f) expenditures that are accounted for as capital expenditures by the Parent or any Restricted Subsidiary and that actually are paid for by a Person other than the Parent or any Restricted Subsidiary to the extent neither the Parent nor any Restricted Subsidiary has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period) to make payment for such assets, provided that (I) any expenditure necessary in order to permit such asset to be reused shall be included as a Capital Expenditure during the period in which such expenditure actually is made and (II) such book value shall have been included in Capital Expenditures when such asset was originally acquired or (g) that portion of interest on Debt incurred for Capital Expenditures which is paid in cash and capitalized in accordance with GAAP.

“Capital Lease” means as applied to any Person, any lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

“Capital Lease Obligations” means as applied to any Person, all obligations under Capital Leases of such Person or any of its Subsidiaries, in each case, taken at the amount thereof accounted for as liabilities in accordance with GAAP.

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“Cash Collateral” means cash held in the applicable Cash Collateral Account specifically for the purpose of constituting “Cash Collateral” under this Agreement and which is subject to a first priority, perfected Lien in favor of Agent or the applicable Security Trustee, and any interest or other income earned thereon.

“Cash Collateral Account” means a U.S. Cash Collateral Account and/or Dutch Kraton Cash Collateral Account, as the context may require.

“Cash Collateralize” means the delivery of Cash Collateral to the Agent or a Security Trustee, as security for the payment of Secured Obligations, in an amount equal to (a) with respect to LC Obligations, 105% of the aggregate LC Obligations, and (b) with respect to any inchoate, contingent or other Secured Obligations, the Agent’s good faith estimate of the amount that is due or could become due, including all fees and other amounts relating to such Secured Obligations. “Cash Collateralization” and “Cash Collateralized” have a correlative meaning.

“Cash Dominion Event” means the occurrence of any one of the following events: (a) an Event of Default under Section 11.1(a) or (g) shall have occurred and be continuing, (b) any other Event of Default under Section 11.1 shall have occurred and be continuing and the Agent or Required Lenders shall have determined (by written notice to Borrowers) to declare a Cash Dominion Event as a result of such Event of Default (until such time as such Event of Default is no longer continuing), (c) U.S. Availability shall be less than the greater of (A) 12.50% of the U.S. Line Cap and (B) $18,750,000 (and in the case of this clause (c), the Agent has notified Parent thereof); provided that, to the extent that a Cash Dominion Event has occurred as a result of clause (c)(A) above, if U.S. Availability shall have exceeded the greater of (x) 12.50% of the U.S. Line Cap and (y) $18,750,000 at all times for at least forty-five (45) consecutive days, the Cash Dominion Event shall be deemed to be over. At any time that a Cash Dominion Event shall be deemed to be over or otherwise cease to exist, the Agent shall take such actions as may reasonably be requested by a Loan Party Agent to terminate the cash sweeps and other transfers existing pursuant to Section 5.6 as a result of any notice or direction given by the Agent during the existence of a Cash Dominion Event (other than with respect to the Dutch Kraton Borrowers).

“Cash Equivalents” means:

(a)             direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)            investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)            investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any Lender or any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)            fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

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(e)             money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a 7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and AAA by Moody’s and (iii) have portfolio assets of at least $5,000,000,000;

(f)              securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or any political subdivision or taxing authority thereof, and rated at least A by S&P or Moody’s;

(g)             any money market fund of which the assets are comprised of not less than 90% of the items specified in clauses (a) through (c), (e) or (f) above; and

(h)             with respect to any Foreign Subsidiary investments denominated in the currency of the jurisdiction in which such Person is organized which are similar to the items specified in clauses (a) through (f) above (other than the nationality of the governmental or non-governmental issuer or counterparty involved).

“CERCLA” means the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. § 9601 et seq.).

“Change in Law” means the occurrence, after the date hereof, of (a) the adoption, taking effect or phasing in of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof; or (c) the making, issuance or application of any request, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided, however, that “Change in Law” shall include, regardless of the date enacted, adopted or issued, all requests, guidelines, requirements or directives (i) under or relating to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or (ii) promulgated pursuant to Basel III by the Bank of International Settlements, the Basel Committee on Banking Supervision (or any similar authority) or any other Governmental Authority.

“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (including the Code), treaty, regulation or rule (or in the official application or interpretation of any law, treaty, regulation or rule, including a holding, judgment or order by a court of competent jurisdiction) relating to taxation.

“Change of Control” means (a) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of Parent ceases to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) of this clause (a) who, at the time of such election or nomination, constitute at least a majority of that board or equivalent governing body or a majority of any nominating committee of the board, (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) of this clause (a) who, at the time of such election or nomination, constitute at least a majority of that board or equivalent governing body or a majority of any nominating committee of the board, or (iv) who were members of that board or equivalent governing body on the Closing Date; (b) Parent shall cease to own, directly or indirectly, 100% of the outstanding Equity Interests in KPLLC; (c) subject to the actions permitted by Section 10.2.8, KPLLC shall cease to own, directly or indirectly, 100% of the outstanding Equity Interests in the U.S. Borrowers or the Dutch Kraton Borrowers; (d) so long as any Term Debt remains outstanding, the occurrence of any “Change of Control”, as such term is defined in the Term Loan Agreement; (e) so long as any Senior Notes remain outstanding, the occurrence of any “Change of Control” as such term is defined in the Senior Notes Indentures; or (f) a sale of all or substantially all of the assets of Parent in contravention of this Agreement.

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“Claims” means all claims, liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses (including remedial response costs, reasonable and documented attorneys’ fees which shall be limited to the fees, disbursements and other charges of one outside counsel, and if reasonably necessary, one local counsel in each relevant jurisdiction (which may include a single special counsel acting in multiple jurisdictions) for the Indemnitees (unless there is an actual or perceived conflict of interest or the availability of different claims or defenses in which case each such Indemnitee may retain its own counsel) and Extraordinary Expenses) at any time (including after Full Payment of the Obligations or replacement of the Agent or any Lender) incurred by any Indemnitee or asserted against any Indemnitee by any Loan Party or other Person, in any way relating to (a) any Loans, Letters of Credit, Loan Documents, Borrower Materials, or the use thereof or transactions relating thereto, (b) any action taken or omitted in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any Loan Party to perform or observe any terms of any Loan Document, in each case including all costs and expenses relating to any investigation, litigation, arbitration, settlement (which settlement costs will be subject to consultation with the Borrowers) or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.

“Closing Date” has the meaning set forth in Section 6.1.

“Code” means the Internal Revenue Code of 1986 (unless as specifically provided otherwise), as amended to the date hereof and from time to time hereafter, and any successor statute.

“Collateral” means all Property described in Section 7.1, all Property described in any Security Document as security for any Secured Obligations, and all other Property that now or hereafter secures (or is intended to secure) any Secured Obligations.

“Commitment” means for any Lender, the aggregate amount of such Lender’s Borrower Group Commitments. “Commitments” means the aggregate amount of all Borrower Group Commitments (not to exceed the Maximum Facility Amount), which amount shall on the Closing Date be equal to $250,000,000 consisting of (a) $65,000,000 in respect of the Dutch Kraton Revolver Commitments, and (b) $185,000,000 in respect of the U.S. Revolver Commitments, in each case as such amount may be adjusted from time to time in accordance with the terms of this Agreement, including pursuant to any applicable Revolver Commitment Increases or allocations.

“Commodity Account” has the meaning set forth in Article 9 of the UCC.

“Commodity Account Control Agreement” means the commodity account control agreements (whether in the form of an agreement, notice and acknowledgement or like instrument), in form and substance reasonably satisfactory to the Agent and the applicable Loan Party, and, if required under the laws of the jurisdiction of the commodity account, executed by each financial institution or commodity intermediary maintaining a Commodity Account for such Loan Party, in favor of the Agent or a Security Trustee.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Compliance Certificate” means a certificate, in the form of Exhibit D with such changes as may be agreed to by North American Loan Party Agent and the Agent, by which the North American Loan Party Agent certifies to the matters set forth in Section 10.1.2(d).

“Consolidated Tangible Assets” means as of any date of determination, the aggregate of the assets of the Parent and the Restricted Subsidiaries less goodwill and all assets properly classified as intangible assets in accordance with GAAP, in each case, on a consolidated basis, after giving effect to purchase accounting and as of the most recent Fiscal Quarter ended for which financial statements have been delivered pursuant to Section 10.1.2.

“Consolidated Total Assets” means, on any date, the total assets of Parent and its Subsidiaries on a consolidated basis determined in accordance with GAAP as of the last day of the Fiscal Quarter immediately preceding the date of determination.

“Contingent Obligation” means as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Debt of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such Debt or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such Debt or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Debt of the ability of the primary obligor to make payment of such Debt or (d) otherwise to assure or hold harmless the holder of such Debt against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the Debt in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

“Contract Rights” means all rights of any Loan Party under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts.

“Contracts” means all contracts between any Loan Party and one or more additional parties (including, without limitation, any hedging agreements, licensing agreements and any partnership agreements, joint venture agreements and limited liability company agreements).

“Copyrights” means with respect to any Loan Party, all of such Loan Party’s right, title and interest in and to the following: (i) all copyrights, rights and interests in copyrights, works protectable by copyright whether published or unpublished, copyright registrations, and copyright applications; (ii) all renewals of any of the foregoing; (iii) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, damages or payments for past or future infringements for any of the foregoing; (iv) the right to sue for past, present, and future infringements of any of the foregoing; and (v) all domestic rights corresponding to any of the foregoing.

“Credit Documents” means the Loan Documents and the Secured Bank Product Documents.

“Credit Party” means the Agent, a Lender or any Fronting Bank; and “Credit Parties” means the Agent, Lenders and Fronting Banks.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Creditor Representative” means under any Applicable Law, a receiver, manager, controller, interim receiver, receiver and manager, trustee (including any trustee in bankruptcy), custodian, conservator, administrator, examiner, sheriff, monitor, assignee, liquidator, provisional liquidator, sequestrator, administrative receiver, judicial manager, statutory manager or similar officer or fiduciary.

“CWA” means the Clean Water Act (33 U.S.C. §§ 1251 et seq.).

“Debt” means, as applied to any Person, without duplication, (a) all indebtedness of such Person for borrowed money, (b) the deferred purchase price of assets or services that in accordance with GAAP would be included as liabilities on the balance sheet of such Person; (c) all reimbursement obligations in connection with letters of credit issued for the account of such Person; (d) all Disqualified Equity Interests; (e) all non-recourse Debt secured by any Lien on any property owned by such Person, whether or not such Debt has been assumed; (f) all Capital Lease Obligations of such Person; (g) all obligations of such Person under Hedge Agreements (but taking into account only the mark-to-market value or, if any actual amount is due as a result of the termination or close out of such transaction, that amount); and (h) all Contingent Obligations of such Person; provided that Debt shall not include (i) trade payables and accrued expenses, in each case arising in the Ordinary Course of Business, (ii) deferred or prepaid revenue, (iii) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller, (iv) endorsements of instruments for deposit or collection in the Ordinary Course of Business and (v) indemnity obligations, purchase price adjustments or earn-out obligations in effect on the Closing Date or entered into in connection with any Specified Transaction or acquisition or disposition of assets or Equity Interests permitted under this Agreement. The Debt of a Person shall include any recourse Debt of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venture except to the extent such Person’s liability for such Debt is otherwise limited and only to the extent (A) such Debt would be included in the calculation of Total Debt and (B) in the case of Parent and its Subsidiaries, such Debt does not include all intercompany Debt having a term not exceeding 364 days (inclusive of any roll-over or extensions of terms) and made in the Ordinary Course of Business. The amount of Debt of any Person for purposes of clause (e) shall be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Debt and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.

“Default” means an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.

“Default Rate” means for any Obligation (including, to the extent permitted by law, interest not paid when due), 2.00% per annum plus the interest rate otherwise applicable thereto, or if such Obligation does not bear interest, a rate equal to the U.S. Base Rate plus 2.00% per annum.

“Defaulting Lender” means any Lender that, as reasonably determined by the Agent, (a) has failed to perform any funding obligations hereunder, and such failure is not cured within two (2) Business Days (unless such Lender notifies the Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied); (b) has notified the Agent or any Borrower that such Lender does not intend to comply with its funding obligations hereunder or has made a public statement to the effect that it does not intend to comply with its funding obligations hereunder (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied); (c) has failed, within one (1) Business Day following written request by the Agent and/or Parent, to

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

confirm in a manner reasonably satisfactory to the Agent that such Lender will comply with its funding obligations hereunder; provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt by the Agent and/or the Parent of such confirmation; or (d) has, or has a direct or indirect parent company that has, (i) become the subject of an Insolvency Proceeding or taken any action in furtherance thereof or (ii) become the subject of a Bail-In Action; provided, however, that a Lender shall not be a Defaulting Lender solely by virtue of a Governmental Authority’s ownership of an Equity Interest in such Lender or parent company, so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts made with such Lender.

“Deposit Account” means (i) any “deposit account” as such term is defined in Article 9 of the UCC and (ii) with respect to any such Deposit Account located outside of the U.S., any bank account with a deposit function.

“Deposit Account Control Agreements” means the deposit account control agreements (whether in the form of an agreement, notice and acknowledgement or like instrument) (i) other than in the case of any Dutch Kraton Dominion Account, in form and substance reasonably satisfactory to the Agent and the applicable Loan Party and executed by each lockbox servicer (if applicable) and financial institution maintaining a lockbox and/or Deposit Account for a Loan Party, in favor of the Agent or a Security Trustee, for the benefit of the applicable Secured Parties and (ii) in the case of each Dutch Kraton Dominion Account in substantially the form executed and delivered by the Initial Dutch Kraton Borrower, the Dutch Kraton Security Trustee and Bank of America as account bank as a condition precedent to the making of any Dutch Kraton Revolver Loan or the issuing of any Dutch Kraton Letter of Credit (or such other form as the Agent (acting reasonably) may approve).

“Designated Non-Cash Consideration” means the fair market value of non-cash consideration received by Parent or a Restricted Subsidiary in connection with a Disposition pursuant to Section 10.2.5(a) that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Senior Officer of the relevant Loan Party Agent, setting forth the basis of such valuation (which amount will be reduced by the fair market value of the portion of the non-cash consideration converted to cash within 180 days following the consummation of the applicable Disposition).

“Dilution Percent” means the percent, determined for each applicable Borrower (and in the case of the U.S. Borrowers, determined for all U.S. Borrowers in the aggregate) for the most recent Fiscal Quarter, equal to (a) bad debt write-downs or write-offs, discounts, returns, promotions, credits, credit memos and other dilutive items with respect to the applicable Borrower’s Accounts, divided by (b) gross sales of the applicable Borrower.

“Disposition” has the meaning set forth in Section 10.2.5(a).

“Disqualified Equity Interests” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Equity Interest), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Equity Interest, in whole or in part, on or prior to the date that is ninety-one (91) days after the Facility Termination Date. Notwithstanding the preceding sentence, any Equity Interest that would constitute Disqualified Equity Interests solely because the holders of the Equity Interests have the right to require the Parent or any Restricted Subsidiary to repurchase such Equity Interest upon the occurrence of a change of control or an asset sale will not constitute Disqualified Equity Interests if the terms of such Equity Interests provide that the Parent or Restricted Subsidiary, as applicable, may not repurchase or

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

redeem any such Equity Interests pursuant to such provisions unless such repurchase or redemption complies with Section 10.2.3. The amount of Disqualified Equity Interests deemed to be outstanding at any time for purposes of this Agreement will be the maximum amount that the Parent and the Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Equity Interests, exclusive of accrued dividends.

“Distribution” means any declaration or payment of a distribution, interest or dividend (whether in cash, securities or other Property) on any Equity Interest or Equity Interest Equivalent of Parent or any Subsidiary (other than payment-in-kind); any distribution, advance or repayment of Debt to a holder of Equity Interests or Equity Interest Equivalents of Parent or any Subsidiary; or any purchase, redemption, or other acquisition or retirement for value of any Equity Interest or Equity Interest Equivalent of Parent or any Subsidiary.

“Division Transaction” means (a) the division of a limited liability company into two or more limited liability companies pursuant to a “plan of division” or similar method or (b) the creation, or reorganization into, or allocation of its assets to, one or more series, in each case, within the meaning of the Delaware Limited Liability Company Act or similar statute in any other state.

“Document” has the meaning set forth in (i) Article 9 of the UCC and/or (ii) with respect to any Document of a Dutch Kraton Dutch Domiciled Loan Party, a ceel or other bearer document (stuk aan toonder of order) within the meaning of section 7:607 of the Dutch Civil Code or any other Applicable Law, as applicable.

“Dollar Equivalent” means on any date, (a) with respect to any amount denominated in Dollars, such amount in Dollars, and (b) with respect to any stated amount in a lawful currency other than Dollars, the amount of Dollars that the Agent determines (which determination shall be conclusive and binding absent manifest error) would be necessary to be sold on such date at the applicable Exchange Rate to obtain the stated amount of the other currency.

“Dollars” and “$” means the lawful money of the United States.

“Domain Name” means all Internet domain names and associated URL addresses in or to which any Loan Party now or hereafter has any right, title or interest.

“Domestic Subsidiary” means any Subsidiary that is organized under the Applicable Laws of the United States, any state thereof or the District of Columbia.

“Dominion Account” means with respect to (a) the Dutch Kraton Dutch Domiciled Loan Parties, each Dutch Kraton Dominion Account and (b) the U.S. Domiciled Loan Parties, each U.S. Dominion Account.

“Dutch Bankruptcy Law” means the Faillissementswet as well as the Wet homologatie onderhands akkoord as soon as this enters into force in the Netherlands.

“Dutch Kraton Allocated U.S. Availability” means the U.S. Availability designated by the North American Loan Party Agent for application to clause (e) of a Dutch Kraton Borrowing Base.

“Dutch Kraton Allocated U.S. Availability Reserve” means Dutch Kraton Availability Reserves established in respect of the Dutch Kraton Allocated U.S. Availability.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Dutch Kraton Availability” means, as of any such date of determination, (a) the lesser of (i) the Dutch Kraton Revolver Commitments, minus all Dutch Kraton Availability Reserves and (ii) the Dutch Kraton Borrowing Base, minus, in each case (b) the sum of (i) the Dollar Equivalent of the principal balance of all Dutch Kraton Revolver Loans, and (ii) all Dutch Kraton LC Obligations.

“Dutch Kraton Availability Reserves” means the sum (without duplication) of (a) the Dutch Kraton Rent Reserve; (b) the Dutch Kraton Bank Product Reserve; (c) the Dutch Kraton Priority Payables Reserve; (d) the Dutch Kraton Inventory Reserve; (e) the Dutch Kraton Dilution Reserve; and (f) such additional reserves, in such amounts and with respect to such matters, as the Agent may establish in its Permitted Discretion and in accordance with the terms hereof.

“Dutch Kraton Bank Product Reserve” means at any time with respect to Secured Bank Product Obligations of the Dutch Kraton Dutch Domiciled Loan Parties and their Subsidiaries, an amount equal to the sum of (a) the maximum amount of the then outstanding Qualified Secured Bank Product Obligations of the Dutch Kraton Dutch Domiciled Loan Parties and their Subsidiaries owing (i) to Bank of America and its Affiliates as determined by the Agent in its Permitted Discretion and (ii) to any other Secured Bank Product Provider as set forth in the notice delivered by such Secured Bank Product Provider providing such Bank Product and the North American Loan Party Agent to the Agent in accordance with the definition of Secured Bank Product Obligations and (b) with respect to any other Secured Bank Product Obligations of the Dutch Kraton Dutch Domiciled Loan Parties and their Subsidiaries, reserves established by the Agent from time to time in its Permitted Discretion to reflect the reasonably anticipated liabilities in respect of the then outstanding Secured Bank Product Obligations for the account of the Dutch Kraton Dutch Domiciled Loan Parties and their Subsidiaries.

“Dutch Kraton Borrowers” means (a) the Initial Dutch Kraton Borrower and (b) each other Dutch Kraton Subsidiary that, after the date hereof, has executed a supplement or joinder to this Agreement in accordance with Section 10.1.9 and has satisfied the other requirements set forth in Section 10.1.9 in order to become a Dutch Kraton Borrower.

“Dutch Kraton Borrowing Base” means at any time, with respect to the Applicable Dutch Kraton Borrower, an amount equal to the sum (expressed in Dollars, based on the Dollar Equivalent thereof) of, without duplication:

(a)             the Value of Dutch Kraton Eligible Accounts (excluding Investment Grade Receivables) of the Applicable Dutch Kraton Borrower multiplied by the advance rate of 85%, plus

(b)             the lesser of (i) 70% of the Value of Dutch Kraton Eligible Inventory composed of finished goods of the Applicable Dutch Kraton Borrower and (ii) 85% of the NOLV Percentage of the Value of Dutch Kraton Eligible Inventory composed of finished goods of the Applicable Dutch Kraton Borrower, plus

(c)             the lesser of (i) 70% of the Value of Dutch Kraton Eligible Inventory not composed of finished goods of the Applicable Dutch Kraton Borrower and (ii) 85% of the NOLV Percentage of the Value of Dutch Kraton Eligible Inventory not composed of finished goods of the Applicable Dutch Kraton Borrower, plus

(d)            the Value of Dutch Kraton Eligible Accounts constituting Investment Grade Receivables multiplied by the advance rate of 90%, plus

(e)             Dutch Kraton Allocated U.S. Availability for such Applicable Dutch Kraton Borrower, minus

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(f)              all Dutch Kraton Availability Reserves with respect to the Applicable Dutch Kraton Borrower, any change therein to become effective (i) immediately upon or (ii) three (3) Business Days after, in the case of Dutch Kraton Availability Reserves allocable to the Applicable Dutch Kraton Borrower which would cause the aggregate amount of the Dutch Kraton Revolver Exposure allocable to the Applicable Dutch Kraton Borrower at such time to exceed the lesser of the Applicable Dutch Kraton Borrower’s Applicable Dutch Kraton Borrower Commitment and the Applicable Dutch Kraton Borrower’s Dutch Kraton Borrowing Base then in effect, notification thereof to the North American Loan Party Agent by the Agent; provided that, the Agent shall have provided the North American Loan Party Agent at least three (3) Business Days’ prior written notice of any such establishment or increase; provided further that, the Agent may only establish or increase a Dutch Kraton Availability Reserve after the date hereof based on an event, condition or other circumstance arising after the Closing Date or based on facts not known to the Agent as of the Closing Date. The amount of any Dutch Kraton Availability Reserve established by the Agent shall have a reasonable relationship to the event, condition, other circumstance or new fact that is the basis for the Dutch Kraton Availability Reserve. Upon delivery of such notice, the Agent shall be available to discuss the proposed Dutch Kraton Availability Reserve or increase, and the applicable Borrowers may take such action as may be required so that the event, condition, circumstance or new fact that is the basis for such Dutch Kraton Availability Reserve or increase no longer exists, in a manner and to the extent reasonably satisfactory to the Agent in the exercise of its Permitted Discretion. In no event shall such notice and opportunity limit the right of the Agent to establish or change such Dutch Kraton Availability Reserve, unless the Agent shall have determined in its Permitted Discretion that the event, condition, other circumstance or new fact that is the basis for such new Dutch Kraton Availability Reserve or such change no longer exists or has otherwise been adequately addressed by the applicable Borrower. Notwithstanding anything herein to the contrary, Dutch Kraton Availability Reserves shall not duplicate amounts that are ineligible under the definition of “Dutch Kraton Eligible Inventory” or amounts already deducted in or by other Dutch Kraton Availability Reserves or in connection with criteria already used to calculate the NOLV Percentage of Dutch Kraton Eligible Inventory.

The Dutch Kraton Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate theretofore delivered to the Agent with such adjustments as the Agent deems appropriate in its Permitted Discretion to assure that the Dutch Kraton Borrowing Base is calculated in accordance with the terms of this Agreement. It is the intention of the Agent to evaluate, in its discretion, the inclusion of eligibility criteria with respect to Accounts and Inventory of the Dutch Kraton Borrower that are guaranteed by the United States of America or any instrumentality thereof in connection with an EXIM Program.

“Dutch Kraton Cash Collateral Account” means a bank account established by the Agent at Bank of America (London) in connection with the Dutch Kraton Revolver Commitments that is (a) segregated, (b) for the benefit of the Dutch Kraton Facility Secured Parties, (c) subject to the Agent’s or Security Trustee’s Liens securing the Dutch Kraton Facility Secured Obligations and (d) under the exclusive control of Agent or the applicable Security Trustee.

“Dutch Kraton Dilution Reserve” means with respect to an Applicable Dutch Kraton Borrower, without duplication of any other reserves or items that are otherwise addressed or excluded through eligibility criteria, the aggregate amount of reserves, as established by the Agent from time to time, in an amount equal to the sum of (x) the Value of the Applicable Dutch Kraton Borrower’s Eligible Accounts (other than Investment Grade Receivables) multiplied by 1% for each percentage point (or portion thereof) that the Applicable Dutch Kraton Borrower’s Dilution Percent with respect thereto exceeds 5%, plus (y) the Value of the Applicable Dutch Kraton Borrower’s Eligible Accounts constituting Investment Grade Receivables multiplied by 1% for each percentage point (or portion thereof) that the Applicable Dutch Kraton Borrower’s Dilution Percent with respect thereto exceeds 2.5%.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Dutch Kraton Dominion Account” means each special deposit account established by the Dutch Kraton Dutch Domiciled Loan Parties at Bank of America (London) or another bank reasonably acceptable to the Agent (i) which is a collection account and not a disbursement account and (ii) (subject to Section 8.2.4, save in respect of the Dutch Kraton Excluded Dominion Accounts) is the subject of a Deposit Account Control Agreement and a duly perfected and enforceable Lien under the Applicable Law of the location of such special deposit account.

“Dutch Kraton Dutch Domiciled Loan Party” means any Dutch Kraton Borrower and each Dutch Kraton Subsidiary of a Dutch Kraton Borrower now or hereafter party hereto as a Loan Party, and “Dutch Kraton Dutch Domiciled Loan Parties” means all such Persons, collectively.

“Dutch Kraton Eligible Accounts” means at any time, the Accounts of the Applicable Dutch Kraton Borrower at such date except any Account:

(a)            which (i) is not subject to a duly perfected and enforceable Lien in favor of the Agent or Security Trustee (as applicable) under the law where the Applicable Dutch Kraton Borrower is organized or (ii) in the case of Accounts owed by an account debtor organized in a Perfection Jurisdiction, are not subject to a duly perfected and enforceable Lien in favor of the Agent under the law where the account debtor is organized;

(b)            which is subject to any Lien (including Liens permitted by Section 10.2.2) other than (i) a Lien in favor of the Agent, (ii) a Lien permitted under Section 10.2.2(i) or (iii) a Lien permitted under Section 10.2.2(j) or (m) which does not have priority over the Lien in favor of the Agent;

(c)             (i) for each invoice with an original due date not later than thirty (30) days after the date thereof, which is unpaid for (A) more than sixty (60) days after the original due date or (B) unless otherwise agreed in writing by the Agent in its discretion, more than ninety (90) days after the original invoice date; (ii) for each invoice with an original due date later than thirty (30) days after the date thereof but not later than sixty (60) days after the date thereof, which is unpaid for (A) more than sixty (60) days after the original due date or (B) unless otherwise agreed in writing by the Agent in its discretion, more than 120 days after the original invoice date; (iii) for each invoice with an original due date later than sixty (60) days after the date thereof but not later than ninety (90) days after the date thereof, which is unpaid for (A) more than sixty (60) days after the original due date or (B) unless otherwise agreed in writing by the Agent in its discretion, more than 150 days after the original invoice date;

(d)             which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible pursuant to clause (c) above (in calculating the ineligible portion of Accounts under clause (c) for purposes of this clause (d), credit balances that are unapplied for more than ninety (90) days shall not reduce the amount of the Accounts ineligible thereunder); provided that Accounts that are determined not to be Dutch Kraton Eligible Accounts solely as a result of the provisions of clause (e) below, shall be excluded in calculating such percentage;

(e)            which is owing by any Account Debtor to the extent the aggregate amount of otherwise Dutch Kraton Eligible Accounts owing from such Account Debtor and its Affiliates to the Borrowers exceeds 20% of the aggregate Dutch Kraton Eligible Accounts (or such higher percentage as the Agent may establish for the Account Debtor from time to time), only to the extent of such excess;

(f)              with respect to which any covenant, representation or warranty relating to such Account contained in this Agreement or a Security Document has been materially breached or is not true in any material respect respectively (or with respect to such covenant, representation or warranty qualified by materiality, after giving effect to such qualification, in all respects);

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(g)             which (i) does not arise from the sale of goods or performance of services in the Ordinary Course of Business, (ii) is not evidenced by an invoice, or other similar documentation reasonably satisfactory to the Agent, which has been sent to the Account Debtor, (iii) represents a progress billing or a retention, (iv) is contingent upon the Applicable Dutch Kraton Borrower’s completion of any further performance, (v) represents a cash or credit card sale or a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment which is billed by the Applicable Dutch Kraton Borrower, as consignor, prior to actual sale to the end user, cash-on-delivery or any other repurchase or return basis, or (vi) represents interest or fees; provided that ineligibility as a result of this clause (vi) shall be limited to the amount of such interest and fees;

(h)             for which the goods giving rise to such Account have not been loaded on a carrier for shipment to the Account Debtor or for which the services giving rise to such Account have not been performed by the Applicable Dutch Kraton Borrower;

(i)              with respect to which any check or other instrument of payment has been returned uncollected for any reason and such Account is or should be written off of Parent’s books as uncollectible, consistent with Parent’s collection policies;

(j)              which is owed by an Account Debtor in respect of which an Insolvency Proceeding has been commenced or which is otherwise a debtor or a debtor in possession under any bankruptcy law or any other federal, state or foreign (including any province or territory) receivership, insolvency relief or other law or laws for the relief of debtors, including the Dutch Bankruptcy Law (Fallissementswet), unless the payment of Accounts from such Account Debtor is secured by assets of, or guaranteed by, in either case, in a manner reasonably satisfactory to the Agent, a Person that is reasonably acceptable to the Agent or, if the Account from such Account Debtor arises subsequent to a decree or order for relief with respect to such Account Debtor under the Dutch Bankruptcy Law (Fallissementswet), as now or hereafter in effect, the Agent shall have reasonably determined that the timely payment and collection of such Account will not be impaired;

(k)             which is owed by an Account Debtor which has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs or has declared itself as or been declared by a court of competent jurisdiction, to be not Solvent;

(l)              which is owed by an Account Debtor which is not organized or incorporated under the Applicable Law of an Eligible Account Debtor Jurisdiction unless (i) the Agent determines to include such Account Debtor in its Permitted Discretion or (ii) such Account is backed by a letter of credit or other credit support reasonably acceptable to the Agent; provided that notwithstanding the foregoing, the Agent may, in its Permitted Discretion, deem Accounts that would otherwise be ineligible as a result of this clause (l)(i) to be eligible in an amount not to exceed $15,000,000 in the aggregate at any time.

(m)           which is owed in any currency other than Eligible Account Currencies;

(n)             which is owed by any Governmental Authority, unless such Account is backed by a letter of credit reasonably acceptable to the Agent or is otherwise acceptable to the Agent in its Permitted Discretion;

(o)             which is owed by any Affiliate, employee, director, or officer of any Loan Party;

(p)            which is owed by an Account Debtor or any Affiliate of such Account Debtor which is the holder of Debt issued or incurred by any Loan Party; provided that any such Account shall only be ineligible as to that portion of such Account which is less than or equal to the amount owed by the Loan Party to such Person;

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(q)             except as provided in clause (s) below, which is subject to any counterclaim, deduction, defense, setoff, right of compensation or material dispute, but only to the extent of the amount of such counterclaim, deduction, defense, setoff, right of compensation or material dispute unless (i) the Agent, in its Permitted Discretion, has established Dutch Kraton Availability Reserves and determines to include such Account as a Dutch Kraton Eligible Account or (ii) such Account Debtor has entered into an agreement reasonably acceptable to the Agent to waive such rights;

(r)             which is evidenced by any promissory note, Chattel Paper or Instrument;

(s)             with respect to which the Applicable Dutch Kraton Borrower has made any agreement with the Account Debtor for any reduction thereof, but only to the extent of such reduction, other than discounts and adjustments given in the Ordinary Course of Business; or

(t)              which Account has been transferred pursuant to a Supplier Financing Transaction.

Subject to Section 14.1.1 and the definition of Dutch Kraton Borrowing Base, the Agent may modify the foregoing criteria and the application of the foregoing criteria to any specific Account and may determine an Account is ineligible, in each case, in its Permitted Discretion; provided that, the Agent shall have provided the North American Loan Party Agent at least three (3) Business Days’ prior written notice of any such modification, application or determination; provided further, that upon delivery of such notice, the Agent shall be available to discuss the proposed modification, application or determination. For the avoidance of doubt, it is acknowledged and agreed that any calculation of ineligibility made pursuant to more than one clause above shall be made without duplication.

“Dutch Kraton Eligible In-Transit Inventory” means at any date of determination thereof, the lesser of (a) $10,000,000 and (b) the aggregate amount of all Inventory owned by a Dutch Kraton Borrower at such date that would be Dutch Kraton Eligible Inventory if it were not in transit to a location in the United States, the Netherlands, Belgium, the U.K., France or Germany. Without limiting the foregoing, no Inventory shall be Dutch Kraton Eligible In-Transit Inventory unless it meets, and then only for so long as it continues to meet, the Agent’s standard requirements for including in-transit Inventory in Eligible Inventory, which include, among other things, the following:

(a)             title to the Inventory is in a Dutch Kraton Borrower or a U.S. Borrower, the Inventory is owned by a Dutch Kraton Borrower or a U.S. Borrower, and the Inventory is in transit to a location in the United States, the Netherlands, Belgium, the U.K., France or Germany;

(b)             the Inventory is fully insured for not less than 100% of the invoice cost thereof, and the Agent shall have received evidence of satisfactory casualty insurance naming the Agent as loss payee and otherwise covering such risks as the Agent may reasonably request;

(c)             the Inventory is subject to a first priority security interest in and Lien upon such goods in favor of the Agent (except for any possessory lien upon such goods in the possession of a freight carrier or shipping company securing only the freight charges for the transportation of such goods to the applicable destination, and the Agent shall have established Dutch Kraton Availability Reserves equal to the amount of such Lien or the Agent has received a Lien waiver in form and substance reasonably satisfactory to it with respect to such Lien); and

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(d)             the Inventory is evidenced by and deliverable pursuant to a tangible bill of lading or such other documentation of a type and in a form acceptable to the Agent in its Permitted Discretion that has been issued by a common carrier acceptable to the Agent, and if a bill of lading such bill of lading shall be in the possession of either the Agent, or a freight forwarder or customs broker in each case acting for the Agent under the terms of an Imported Goods Agreement which has been delivered to the Agent.

Notwithstanding the foregoing clauses (c) and (d) above, Inventory which is in-transit between Borrowers and would otherwise constitute Dutch Kraton Eligible In-Transit Inventory except that it is not evidenced by and deliverable pursuant to a Permitted Bill of Lading shall for the purposes of this Agreement be considered Dutch Kraton Eligible In-Transit Inventory; provided, however, if at any time (x) the amount of the U.S. Availability is less than $50,000,000 or (y) the sum of the U.S. Availability and the Dutch Kraton Availability is less than $75,000,000, then such Inventory shall no longer constitute Dutch Kraton Eligible In-Transit Inventory unless such Inventory otherwise constitutes Dutch Kraton Eligible In-Transit Inventory pursuant to the express provisions of this definition.

“Dutch Kraton Eligible Inventory” means at any date of determination thereof, the aggregate amount of all Inventory owned by the Applicable Dutch Kraton Borrower at such date except any Inventory:

(a)             which, in the case of Inventory located in a Perfection Jurisdiction, is not subject to a duly perfected and enforceable Lien in favor of the Agent or the applicable Security Trustee;

(b)             which is subject to any Lien (including Liens permitted by Section 10.2.2) other than (i) a Lien in favor of the Agent or applicable Security Trustee or a Lien permitted under Section 10.2.2(gg) and (ii) a Lien permitted under Section 10.2.2(i) but to the extent such Lien has priority over the Lien of Agent or the applicable Security Trustee, the eligibility of such Inventory shall be reduced by the amount determined by the Agent in its Permitted Discretion; (iii) a Lien permitted under Section 10.2.2(j), provided that clauses (h) and (i) below of this definition of Dutch Kraton Eligible Inventory are satisfied in the case of a Lien of a landlord, bailee, warehouseman or processor in a Perfection Jurisdiction; (iv) a Lien permitted under Section 10.2.2(o) or (s) which does not have priority over the Lien in favor of the Agent; or (v) a Lien permitted under Section 10.2.2(v) to the extent of the amount of such payable customs duties secured by such Lien;

(c)             which is, in the Agent’s Permitted Discretion, slow moving (unless the Inventory component of the Dutch Kraton Borrowing Base of the Applicable Dutch Kraton Borrower is being determined pursuant to clause (b)(ii) thereof and slow moving Inventory was taken into account in determining the NOLV Percentage), obsolete, unmerchantable, defective, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the Ordinary Course of Business or unacceptable due to age, type, category and/or quantity;

(d)             with respect to which any covenant, representation or warranty regarding such Inventory contained in this Agreement or any Security Document has been materially breached or is not true in any material respect;

(e)             which does not conform in all material respects to all standards imposed by any applicable Governmental Authority (except that any standard that is qualified as to “materiality” shall have been conformed to in all material respects);

(f)              which constitutes packaging and shipping material, work in process, manufacturing supplies, display items, returned or repossessed Inventory (other than goods that are undamaged and able to be resold in the Ordinary Course of Business), goods held on consignment by the Applicable Dutch

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Kraton Borrower as consignee prior to any title passing to such Dutch Kraton Borrower, as buyer, goods to be returned to the Applicable Dutch Kraton Borrower’s suppliers (but not held for resale) or goods which are not of a type held for sale in the Ordinary Course of Business or Inventory which is the subject of a sale on a bill and hold basis, other than to the extent such bill and hold sale would otherwise constitute a Dutch Kraton Eligible Account except for the fact that such sale is on a bill and hold basis;

(g)             which is not located in a Perfection Jurisdiction or is not at a location listed on Schedule 8.5.1 (as updated from time to time in accordance with the provisions hereof) other than (i) Inventory in transit between locations of the Dutch Kraton Dutch Domiciled Loan Parties; and (ii) Dutch Kraton Eligible In-Transit Inventory;

(h)            which is located in any location in a Perfection Jurisdiction leased by the Applicable Dutch Kraton Borrower, unless the lessor has delivered to the Agent a Lien Acknowledgment; provided, that the exclusion in this clause (h) shall not apply if the Applicable Dutch Kraton Borrower has used commercially reasonable efforts to deliver a Lien Acknowledgment to Agent (regardless of whether such Lien Acknowledgment is ultimately obtained by the Applicable Dutch Kraton Borrower) or if such Lien Acknowledgment is not customarily delivered or obtained in the applicable jurisdiction prior to the occurrence and continuance of an Event of Default;

(i)              which is located in a Perfection Jurisdiction in any third party warehouse or in the possession of a bailee or processor, unless such warehouseman, bailee or processor has delivered to the Agent a Lien Acknowledgment or such other documentation as the Agent may reasonably require; provided, that the exclusion in this clause (i) shall not apply in relation to Inventory located in the U.S. if the Applicable Dutch Kraton Borrower has used commercially reasonable efforts to deliver a Lien Acknowledgment to Agent (regardless of whether such Lien Acknowledgment is ultimately obtained by the Applicable Dutch Kraton Borrower);

(j)              which is evidenced by a Document, except to the extent such Inventory constitutes Dutch Kraton Eligible In-Transit Inventory;

(k)             which is the subject of a consignment by the Applicable Dutch Kraton Borrower as consignor (except goods held on consignment that the Agent in its Permitted Discretion allows to be Dutch Kraton Eligible Inventory);

(l)              [Reserved];

(m)            which constitutes movable assets as set out in section 21 paragraph 2 in conjunction with section 22 paragraph 3 of the Dutch Tax Collection Act (Invorderingswet 1990); or

(n)             which is located in any location where the aggregate Value of the Inventory is less than $2,000,000.

Subject to Section 14.1.1 and the definition of Dutch Kraton Borrowing Base, the Agent may modify the foregoing criteria and the application of the foregoing criteria to specific Inventory and may determine specific Inventory is otherwise ineligible, in each case, in its Permitted Discretion; provided that, the Agent shall have provided the North American Loan Party Agent at least three (3) Business Days’ prior written notice of any such modification, application or determination; provided further, that upon delivery of such notice, the Agent shall be available to discuss the proposed modification, application or determination.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Dutch Kraton Excluded Dominion Accounts” means the bank accounts of the Initial Dutch Kraton Borrower designated as “EUR ZBA Child Collection-only Accounts” in Milan (with account number 6641 13999011) and Madrid (with account number 6508 35706016) with Bank of America (London) (or successor accounts, in each case).

“Dutch Kraton Facility Collateral” means Collateral that now or hereafter secures (or is intended to secure) any of the Dutch Kraton Facility Secured Obligations, including Property of the Dutch Kraton Facility Guarantors pledged to secure the Dutch Kraton Facility Secured Obligations.

“Dutch Kraton Facility Guarantor” means each U.S. Borrower, each U.S. Facility Guarantor, each Dutch Kraton Borrower and each Dutch Kraton Dutch Domiciled Loan Party, in each case who guarantees payment and performance of any Dutch Kraton Facility Secured Obligations (including pursuant to a Foreign Cross-Guarantee); provided that, no Subsidiary shall be required to become a Guarantor hereunder that is (i) an Excluded Subsidiary (as defined in the Term Loan Agreement), (ii) an investment company under the Investment Company Act of 1940 (or would be such an investment company if it were to provide or maintain a Guarantee (including a Foreign Cross-Guarantee)), (iii) a Joint Venture (as defined in the Term Loan Agreement), (iv) an Immaterial Subsidiary, (v) prohibited or restricted by Applicable Law, rule or regulation or by any contractual obligations existing on the Closing Date (or, if later, the date it becomes a Restricted Subsidiary) from guaranteeing the Secured Obligations or which would require governmental (including regulatory) consent, approval, license or authorization to provide a guarantee unless such consent, approval, license or authorization has been received, (vi) a not-for-profit Subsidiary or captive insurance company, (vii) a Subsidiary for which the providing of a guarantee could reasonably be expected to result in a violation or breach of, or conflict with, fiduciary duties of such Subsidiary’s officers, directors or managers and (viii) a Restricted Subsidiary acquired pursuant to a Permitted Acquisition financed with indebtedness permitted to be incurred pursuant to this Agreement as assumed indebtedness and any Restricted Subsidiary thereof that guarantees such indebtedness, in each case to the extent such secured indebtedness prohibits such subsidiary from becoming a Guarantor.

“Dutch Kraton Facility Loan Party” means a Dutch Kraton Borrower or a Dutch Kraton Facility Guarantor.

“Dutch Kraton Facility Obligations” means all Obligations of Dutch Kraton Borrowers and the other Dutch Kraton Dutch Domiciled Loan Parties and the other Foreign Facility Obligations that are the subject of a Foreign Cross-Guarantee made by the Dutch Kraton Dutch Domiciled Loan Parties.

“Dutch Kraton Facility Secured Obligations” means all Secured Obligations of the Dutch Kraton Dutch Domiciled Loan Parties and the other Foreign Facility Secured Obligations that are the subject of a Foreign Cross-Guarantee made by the Dutch Kraton Dutch Domiciled Loan Parties.

“Dutch Kraton Facility Secured Parties” means the Agent, any Dutch Kraton Fronting Bank, Dutch Kraton Lenders and Secured Bank Product Providers of Bank Products for the account of Dutch Kraton Dutch Domiciled Loan Parties and the other Foreign Facility Secured Parties and their Subsidiaries that are the beneficiaries of a Foreign Cross-Guarantee made by the Dutch Kraton Dutch Domiciled Loan Parties.

“Dutch Kraton Fronting Bank” means Bank of America (London) or any Affiliate thereof that agrees to issue Dutch Letters of Credit or, if reasonably acceptable to North American Loan Party Agent, any other Dutch Kraton Lender or Affiliate thereof that agrees to issue Dutch Letters of Credit.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Dutch Kraton Fronting Bank Indemnitees” means any Dutch Kraton Fronting Bank and its officers, directors, employees, Affiliates and agents.

“Dutch Kraton Inventory Reserve” means the aggregate amount of reserves, as established by the Agent from time to time in its Permitted Discretion, to reflect factors that may negatively impact the value of Dutch Kraton Eligible Inventory, including, without duplication of eligibility criteria, changes in salability, slow moving, obsolescence, shrinkage, theft, imbalance, change in composition or mix, markdowns and vendor chargebacks.

“Dutch Kraton LC Application” means an application by any Dutch Kraton Borrower on behalf of itself or any other Dutch Kraton Borrower or any Restricted Subsidiary to a Dutch Kraton Fronting Bank for issuance of a Dutch Kraton Letter of Credit, in form and substance reasonably satisfactory to such Dutch Kraton Fronting Bank.

“Dutch Kraton LC Conditions” means the following conditions necessary for issuance of a Dutch Kraton Letter of Credit: (a) each of the conditions set forth in Section 6.2 being satisfied or waived; (b) after giving effect to such issuance, the total Dutch Kraton LC Obligations do not exceed the Dutch Kraton Letter of Credit Sublimit, no Dutch Kraton Overadvance exists or would result therefrom and, in the case of any Dutch Kraton Borrower, Section 2.5 is satisfied; (c) unless the applicable Dutch Kraton Fronting Bank and the Agent otherwise consent, (i) the expiration date of such Dutch Kraton Letter of Credit, if it is a documentary letter of credit, is no more than thirty (30) days before the Facility Termination Date and (ii) the expiration date of such Dutch Kraton Letter of Credit, if it is a standby letter of credit, is no more than the lesser of thirty (30) days before the Facility Termination Date and twelve (12) months from issuance of such standby letter of credit (or such other expiry date longer than twelve (12) months from issuance to which the Dutch Kraton Borrower, the applicable Dutch Kraton Fronting Bank and Agent shall agree); provided that each Dutch Kraton Letter of Credit which is a standby letter of credit may, upon the request of the Applicable Dutch Kraton Borrower, include a provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of twelve (12) months or less; (d) the Dutch Kraton Letter of Credit and payments thereunder are denominated in Euros, Sterling or Dollars, or in any other currency acceptable to the Agent and the applicable Dutch Kraton Fronting Bank; (e) the form of the proposed Dutch Kraton Letter of Credit is reasonably satisfactory to the Agent and the applicable Dutch Kraton Fronting Bank; and (f) the proposed use of the Dutch Kraton Letter of Credit is for a lawful purpose.

“Dutch Kraton LC Documents” means all documents, instruments, and agreements (including Dutch Kraton LC Requests and Dutch Kraton LC Applications) delivered by any Dutch Kraton Borrower to a Dutch Kraton Fronting Bank or the Agent in connection with issuance, amendment or renewal of, or payment under, any Dutch Kraton Letter of Credit.

“Dutch Kraton LC Obligations” means with respect to the Applicable Dutch Kraton Borrower, the Dollar Equivalent of the sum (without duplication) of (a) all amounts owing by such Applicable Dutch Kraton Borrower for any drawings under Dutch Kraton Letters of Credit; (b) the stated amount of all outstanding Dutch Kraton Letters of Credit applied for by a Dutch Kraton Borrower and issued for the account of such Applicable Dutch Kraton Borrower or any Restricted Subsidiary; and (c) all fees and other amounts owing with respect to such Dutch Kraton Letters of Credit.

“Dutch Kraton LC Request” means a request for issuance of a Dutch Kraton Letter of Credit, to be provided by a Dutch Kraton Borrower to a Dutch Kraton Fronting Bank, in form reasonably satisfactory to the Agent and such Dutch Kraton Fronting Bank.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Dutch Kraton Lenders” means Bank of America (London) and each other Lender that has issued a Dutch Kraton Revolver Commitment.

“Dutch Kraton Letter of Credit” means any standby or commercial letter of credit or documentary bankers’ acceptances, in each case, applied for by a Dutch Kraton Borrower and issued by a Dutch Kraton Fronting Bank for the account of a Dutch Kraton Borrower or any Restricted Subsidiary, or any indemnity, performance bond, guarantee, exposure transmittal memorandum or similar form of credit support issued by the Agent or a Dutch Kraton Fronting Bank for the benefit of a Dutch Kraton Borrower or any Restricted Subsidiary, whether in existence on the Closing Date or issued on or after the Closing Date.

“Dutch Kraton Letter of Credit Sublimit” means the lesser of (a) $10,000,000 and (b) the Dutch Kraton Revolver Commitments.

“Dutch Kraton Overadvance” has the meaning set forth in Section 2.1.5(a).

“Dutch Kraton Overadvance Loan” means a Loan made to a Dutch Kraton Borrower when a Dutch Kraton Overadvance exists or is caused by the funding thereof.

“Dutch Kraton Overadvance Loan Balance” means, on any date, the Dollar Equivalent of the amount by which the aggregate Dutch Kraton Revolver Loans of the Applicable Dutch Kraton Borrower or all Dutch Kraton Borrowers, as the case may be, exceed the amount of the Dutch Kraton Borrowing Base of such Applicable Dutch Kraton Borrower on such date.

“Dutch Kraton Priority Payables Reserve” means, on any date of determination, a reserve in such amount as the Agent may determine in its Permitted Discretion which reflects amounts secured by any Liens against the Collateral owned by a Dutch Kraton Borrower, choate or inchoate, which rank or are capable of ranking in priority to the Agent’s and/or the Secured Parties’ Liens and/or for amounts which may represent costs relating to the enforcement of the Agent’s or the applicable Security Trustee’s Liens.

“Dutch Kraton Protective Advances” has the meaning set forth in Section 2.1.6(a).

“Dutch Kraton Reimbursement Date” has the meaning set forth in Section 2.2.2(a).

“Dutch Kraton Rent Reserve” means the aggregate of (a) all past due rent and other past due charges owing by any Dutch Kraton Borrower to any landlord, bailee, warehouseman or other Person who possesses any Dutch Kraton Facility Collateral or could assert a Lien on such Dutch Kraton Facility Collateral; plus (b) a reserve in an amount equal to at least three (3) months’ rent and other charges that could be payable to any such Person, unless such Person has executed a Lien Acknowledgment which validly waives or subordinates any such Lien under any Applicable Law.

“Dutch Kraton Revolver Commitment” means for any Dutch Kraton Lender, its obligation to make Dutch Kraton Revolver Loans and to issue Dutch Kraton Letters of Credit, in the case of any Dutch Kraton Fronting Bank, or participate in Dutch Kraton LC Obligations, in the case of the other Dutch Kraton Lenders, to the Dutch Kraton Borrowers up to the maximum principal amount shown on Schedule 2.1.1(a), or as hereafter determined pursuant to each Assignment and Acceptance to which it is a party, as such Dutch Kraton Revolver Commitment may be adjusted from time to time in accordance with the provisions of Sections 2.1.4, 2.1.7 or 11.2. “Dutch Kraton Revolver Commitments” means the aggregate amount of such commitments of all Dutch Kraton Lenders.

“Dutch Kraton Revolver Commitment Increase” has the meaning set forth in Section 2.1.7(a).

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Dutch Kraton Revolver Commitment Termination Date” means the earliest of (a) the U.S. Revolver Commitment Termination Date (without regard to the reason therefor), (b) the date on which the North American Loan Party Agent terminates or reduces to zero all of the Dutch Kraton Revolver Commitments pursuant to Section 2.1.4, and (c) the date on which the Dutch Kraton Revolver Commitments are terminated pursuant to Section 11.2, in each case, such date being a Business Day. From and after the Dutch Kraton Revolver Commitment Termination Date, the Dutch Kraton Borrowers shall no longer be entitled to request a Dutch Kraton Revolver Commitment Increase pursuant to Section 2.1.7 hereof.

“Dutch Kraton Revolver Exposure” means, on any date, the Dollar Equivalent of an amount equal to the sum of (a) the Dutch Kraton Revolver Loans outstanding on such date and (b) the Dutch Kraton LC Obligations on such date.

“Dutch Kraton Revolver Loan” means a Revolver Loan made by Dutch Kraton Lenders to a Dutch Kraton Borrower pursuant to Section 2.1.1, which Revolver Loan shall, if denominated in Euros, Sterling or Dollars, be a European Base Rate Loan or a LIBOR Loan, in each case as selected by the Applicable Dutch Kraton Borrower, and including any Dutch Kraton Swingline Loan, Dutch Kraton Overadvance Loan or Dutch Kraton Protective Advance.

“Dutch Kraton Revolver Notes” means the promissory notes, if any, executed by Dutch Kraton Borrowers in favor of each Dutch Kraton Lender to evidence the Dutch Kraton Revolver Loans funded from time to time by such Dutch Kraton Lender, which shall be in substantially the form of Exhibit C-2 to this Agreement, together with any replacement or successor notes therefor.

“Dutch Kraton Security Agreement” means each pledge (including, without limitation, each pledge over movable assets (undisclosed and non-possessory) and each pledge of receivables) or security agreement governed by Dutch law among any Dutch Kraton Dutch Domiciled Loan Party and the applicable Security Trustee.

“Dutch Kraton Security Trustee” means Bank of America in its capacity as Agent and security trustee for the Lenders under the Foreign Security Agreements.

“Dutch Kraton Subsidiary” means each Subsidiary of Parent incorporated or organized under the laws of the Netherlands.

“Dutch Kraton Swingline Lender” means Bank of America (London) or an Affiliate of Bank of America (London).

“Dutch Kraton Swingline Loan” means a Swingline Loan made by the Dutch Kraton Swingline Lender to a Dutch Kraton Borrower pursuant to Section 2.1.8(a), which Swingline Loan shall, if denominated in Euros, Sterling or Dollars, be a European Base Rate Loan.

“Dutch Kraton Swingline Sublimit” means 10% of the Dutch Kraton Revolver Commitments.

“EBITDA” means, for any period, for Parent and its Restricted Subsidiaries on a consolidated basis, an amount equal to the Net Income for such period:

(a)            increased (without duplication) by and to the extent deducted (and not added back) in arriving at such Net Income, the sum of the following amounts for such a period:

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(i)            the amount of depreciation and amortization, as determined in accordance with GAAP; plus

(ii)          total Interest Expense and, to the extent not reflected in such total Interest Expense, the sum of (A) premium payments, debt discount, fees, charges and related expenses incurred in connection with Borrowed Money (including capitalized interest) or in connection with the deferred purchase price of assets plus (B) the portion of rent expense with respect to such period under Capital Leases that is treated as Interest Expense in accordance with GAAP plus (C) the implied interest component of synthetic leases with respect to such period plus (D) any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of interest income and gains on such hedging obligations or such derivative instruments plus (E) bank and letter of credit fees and costs of surety bonds in connection with financing activities, plus (F) any commissions, discounts, yield and other fees and charges; plus

(iii)          provision for Taxes based on income or profits or capital, including, without limitation, federal, state, provincial, franchise, excise and similar Taxes and foreign withholding Taxes (including any future Taxes or other levies which replace or are intended to be in lieu of such Taxes and any penalties and interest related to such Taxes or arising from tax examinations); plus

(iv)          negative effects of purchase accounting; plus

(v)           all extraordinary, nonrecurring or one-time charges; plus

(vi)         the amount of “run rate” cost savings, operating expense reductions, other operating improvements and synergies related to any acquisition and other specified actions, any restructuring, cost saving initiative or other initiative projected by the Borrowers in good faith to be realized as a result of actions taken, committed to be taken or planned to be taken, in each case on or prior to the date that is 24 months after the end of the relevant period (including actions initiated prior to the Closing Date) (which cost savings shall be added to EBITDA until fully realized and calculated on a pro forma basis as though such cost savings had been realized on the first day of the relevant period), net of the amount of actual benefits realized from such actions; provided that such cost savings are reasonably identifiable and quantifiable; plus

(vii)        all non-cash charges; provided, that for any such non-cash charges resulting in a cash payment or cash outlay in a subsequent period, EBITDA will be reduced by the amount of the cash payment or cash outlay in the period made; plus

(viii)       any non-cash loss attributable to the mark-to-market movement in the valuation of Hedge Agreements pursuant to FASB Accounting Standards Codification 815—“Derivatives and Hedging”; plus

(ix)           (A) the amount of any restructuring provisions, restructuring charges, restructuring accruals or restructuring reserves, (B) cost initiative charges embedded in cost of goods sold (cash and non-cash charges) and (C) cost initiative charges embedded in selling, general and administrative expenses (cash and non-cash charges); plus

(x)           non-recurring operating location exit charges; provided no amounts pursuant to this clause (x) may be added if such amount was added in a prior period; plus

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(xi)           actual plant turnaround costs and expenses to the extent deducted in calculating Net Income in an aggregate amount not to exceed $7,500,000 in such period; plus

(xii)          losses on sales of assets, disposals or abandonments other than in the Ordinary Course of Business (cash and non-cash); plus

(xiii)         Transaction Costs and any fees, costs and expenses payable by Parent and the Restricted Subsidiaries in connection with any offering of Equity Interests of Parent, Permitted Acquisitions, joint ventures or other Investments permitted hereunder (whether consummated or unsuccessful and other than Investments made in the Ordinary Course of Business and other than Investments in Subsidiaries) expensed or amortized in such period; plus

(xiv)       Pro Forma EBITDA;

(b)             decreased (without duplication) by and to the extent included in arriving at such Net Income, the sum of the following amounts for such period:

(i)            gains on sales of assets other than in the Ordinary Course of Business (cash and non-cash); minus

(ii)          any non-cash gains attributable to the mark-to-market movement in the valuation of Hedge Agreements pursuant to FASB Accounting Standards Codification 815—“Derivatives and Hedging”;

(c)            increased or decreased (without duplication) by, as applicable, any effects of Inventory Revaluation; and

(d)             to the extent included in Net Income, there shall be excluded in determining EBITDA currency translation gains and losses related to currency re-measurements of assets or liabilities (including the net loss or gain resulting from hedging agreements for currency exchange risk and revaluations of intercompany balances).

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority; (b) any entity established in an EEA Member Country that is a parent of an institution described in clause (a) of this definition; or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of an EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Elastomers” means Elastomers Holdings LLC, a Delaware limited liability company.

“Eligible Account Currencies” means Dollars, Euros, Sterling, Yen and such other currencies determined by the Agent in its discretion.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Eligible Account Debtor Jurisdictions” means (i) Belgium, France, Germany, the Netherlands, the U.K., and the U.S. (together with any state or province thereof, as applicable), (ii) as long as no Cash Dominion Event has occurred, Australia, Austria, Canada, Denmark, Finland, Greece, Hong Kong, Ireland, Italy, Japan, Luxembourg, New Zealand, Norway, Portugal, Singapore, South Korea, Spain, Sweden and Switzerland (together, in each case, with any state or province thereof, as applicable); provided, however, that during the continuance of a Cash Dominion Event, any such jurisdiction shall continue to be an Eligible Account Debtor Jurisdiction solely to the extent that the Agent determines, in its Permitted Discretion, that Agent or a Security Trustee has a duly perfected and enforceable Lien in the Accounts of Accounts Debtors organized or located in such jurisdiction under the Applicable Law of such jurisdiction, and (iii) such other jurisdictions as shall be acceptable to Agent, in its sole discretion; provided, however, that, in the case of this clause (iii), the Agent shall in no event determine such jurisdiction to be an “Eligible Account Debtor Jurisdiction” unless Agent determines, in its Permitted Discretion, that Agent or a Security Trustee has a duly perfected and enforceable Lien in the applicable Accounts of Account Debtors organized or located in such jurisdiction under the Applicable Law of such jurisdiction.

“Eligible Accounts” means the (a) Dutch Kraton Eligible Accounts and/or (b) U.S. Eligible Accounts, as the context requires.

“Eligible Assignee” means, subject to the requirements of Section 13.3.3, a Person that is (a) a Lender, an Affiliate of a Lender or an Approved Fund; (b) any other financial institution approved by the Agent and North American Loan Party Agent (which approval by North American Loan Party Agent shall not be unreasonably withheld or delayed, and shall be deemed given if no objection is made within ten (10) Business Days after delivery of written notice of the proposed assignment to the North American Loan Party Agent and which approval shall not be required during any Event of Default under Section 11.1(a) or, solely with respect to the Parent or any Borrower, Section 11.1(g)), that is organized, registered or incorporated under the laws of a Participating Member State, the United Kingdom or the United States or any state, province or district thereof, and extends asset-based lending facilities in its Ordinary Course of Business and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of the Code or any other Applicable Law and would not immediately following any such assignment, result in additional increased costs payable by the Loan Parties pursuant to Section 3.7; and (c) during any Event of Default under Section 11.1(a) or, solely with respect to the Parent or any Borrower, Section 11.1(g), any Person reasonably acceptable to the Agent in its discretion.

“Eligible Inventory” means the (a) Dutch Kraton Eligible Inventory and/or (b) U.S. Eligible Inventory, as the context requires.

“Enforcement Action” means any commercially reasonable action to enforce any Obligations or Loan Documents or to exercise any rights or remedies relating to any Collateral (whether by judicial action, self-help, notification of Account Debtors, exercise of setoff or recoupment, exercise of any right to act in Loan Party’s Insolvency Proceeding or to credit bid Obligations, or otherwise).

“Enhanced Reporting Trigger” means the occurrence of any one of the following events: (a) Excess Availability shall be less than the greater of (i) 27.5% of the Total Line Cap and (ii) $68,750,000 or (b) U.S. Availability shall be less than the greater of (i) 27.5% of the U.S. Line Cap and (ii) $41,250,000; provided that, to the extent that the Enhanced Reporting Trigger has occurred due to clause (a) of this definition, if Excess Availability shall have exceeded the greater of (w) 27.5% of the Total Line Cap and (x) $68,750,000 at all times for at least forty-five (45) consecutive days, the Enhanced Reporting Trigger shall be deemed to have ended; provided, further, that to the extent that the Enhanced Reporting Trigger has occurred due to clause (b) of this definition, if U.S. Availability shall have exceeded the greater of (y) 27.5% of the U.S. Line Cap and (z) $41,250,000 at all times for at least forty-five (45) consecutive days, the Enhanced Reporting Trigger shall be deemed to have ended.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Environmental Laws” means all Applicable Laws (including all applicable, legally binding programs, permits and guidance promulgated by regulatory agencies), relating to public health (but excluding occupational safety and health, to the extent regulated by OSHA) or the protection or pollution of the environment, including CERCLA, RCRA and CWA.

“Environmental Notice” means a notice (whether written or oral) from any Governmental Authority or other Person of any potential noncompliance with, investigation of a potential violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Environmental Release, environmental pollution or hazardous materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.

“Environmental Release” means a release as defined in CERCLA or, with respect to hazardous materials, under any other Environmental Law.

“Equity Interest” means all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust Interests and any other participation or interests in any equity or profits of any business entity, including any trust and all management rights relating to any entity whose equity interests are included as Equity Interests.

“Equity Interest Equivalents” means all securities convertible into or exchangeable for Equity Interests and all warrants, options or other rights to purchase or subscribe for any Equity Interests, whether or not presently convertible, exchangeable or exercisable.

“ERISA” means the Employee Retirement Income Security Act of 1974 (unless as specifically provided otherwise, as amended to the date hereof and from time to time hereafter and any successor statute).

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with a Loan Party or treated as a single employer with a Loan Party, in each case within the meaning of Section 414 of the Code or Section 4001(b)(1) of ERISA.

“ERISA Event” means (a) any Reportable Event; (b) the failure of a U.S. Employee Plan to meet the minimum funding standards under Section 412 of the Code or Section 302 of ERISA (determined without regard to any waiver of the funding provisions therein or in Section 430 of the Code or Section 303 of ERISA); (c) the filing pursuant to Section 412 of the Code or Section 303 of ERISA of an application for a waiver of the minimum funding standard with respect to any U.S. Employee Plan; (d) the incurrence by any Loan Party or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any U.S. Employee Plan (including any liability in connection with the filing of a notice of intent to terminate a U.S. Employee Plan or the treatment of a U.S. Employee Plan amendment as a termination under Section 4041 of ERISA); (e) any event or condition that results in the termination of a Multiemployer Plan pursuant to 4041A of ERISA; (f) the filing of a notice of intent or the commencement by the PBGC of proceeding to terminate any U.S. Employee Plan or to appoint a trustee to administer any U.S. Employee Plan or the occurrence of any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any U.S. Employee Plan; (g) the incurrence by any Loan Party or any ERISA Affiliate of any liability under Section 4062(e) of ERISA or with respect to the withdrawal or partial withdrawal from any U.S. Employee Plan (including as a “substantial employer,” as defined in Section 4001(a)(2) of ERISA) or Multiemployer Plan (including the incurrence by any Loan Party or any ERISA

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Affiliate of any Withdrawal Liability); (h) a determination that a Multiemployer Plan is, or is expected to be, in endangered or critical status, within the meaning of Section 305 of ERISA, or insolvent or in reorganization, within the meaning of Title IV of ERISA; or (i) imposition of any material liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA that are not past due.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“Euro” and “€” means the lawful single currency of the Participating Member States which have adopted the euro unit as their single currency pursuant to the Treaty of Rome of March 25, 1957, establishing the European Community.

“European Base Rate” means, with respect to Euros, Sterling and Dollars outside of the U.S. and Canada, as applicable, a fluctuating rate of interest per annum equal to the rate of interest in effect for such day as announced from time to time by the European Central Bank and used by the local branch of Bank of America in the jurisdiction in which such currency is funded as its “base rate” with respect to such currency. Any change in such rate shall take effect at the opening of business on the day of such change. In no event shall the European Base Rate be less than one percent (1.00%).

“European Base Rate Loan” means a Dutch Kraton Revolver Loan, or portion thereof, funded in Sterling, Dollars or Euros and bearing interest calculated by reference to the European Base Rate.

“Event of Default” has the meaning set forth in Section 11.1.

“Excess Availability” means, as of any date of determination, an amount equal to (a) the lesser of (i) the Commitments, minus Reserves and (ii) the Total Borrowing Base, minus (b) the sum of (i) the Dollar Equivalent of the principal balance of all Revolver Loans and (ii) all LC Obligations.

“Excess Cash Flow” has the meaning given to the term “Consolidated Excess Cash Flow” as set forth in the Term Loan Agreement as in effect on the Closing Date.

“Exchange Rate” means the exchange rate, as of any date, as determined by the Agent (or, solely, for the purposes of Section 1.5(b), the North American Loan Party Agent), applicable to conversion of a currency into Dollars that is (a) the exchange rate reported by Bloomberg (or other commercially available source designated by the Agent) as of the end of the preceding Business Day in the financial market for such currency; or (b) if such report is unavailable for any reason, the spot rate for the purchase of such currency with Dollars through the Agent’s principal foreign exchange trading office for the currency during such office’s preceding Business Day.

“Excluded Accounts” means (a) Deposit Accounts that are zero balance disbursement accounts; (b) Deposit Accounts used solely to fund payroll, payroll Taxes and similar employment Taxes or employee benefits in the Ordinary Course of Business; (c) other Deposit Accounts with an amount on deposit of less than $1,000,000 at any time in the aggregate for all such Deposit Accounts; (d) Deposit Accounts used to secure lease or tax obligations; and (e) Deposit Accounts and Securities Accounts holding proceeds from the sale of Property that is not Collateral.

“Excluded Assets” means any asset of any Loan Party excluded from the Collateral pursuant to Section 7.1.3, but only to the extent, and for so long as, so excluded thereunder.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Excluded Swap Obligation” means, with respect to any U.S. Facility Guarantor, any Swap Obligation arising under a swap transaction entered into after the date hereof if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the Guarantee of such Guarantor becomes effective with respect to such related Swap Obligation.

“Excluded Tax” means with respect to any Recipient (a) Taxes imposed on or measured by its net income (however denominated), and franchise Taxes imposed on it (i) by the jurisdiction (or any political subdivision thereof) under the laws of which such Recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located or (ii) that are Other Connection Taxes, (b) any branch profits Taxes imposed by the United States or any similar Tax imposed by any other jurisdiction in which such Recipient has a branch; (c) in the case of a Foreign Lender (other than an assignee pursuant to Section 3.9), any withholding Tax that is imposed on amounts payable to such Foreign Lender pursuant to laws in force at the date on which such Foreign Lender becomes a Lender (or designates a new Lending Office) hereunder, or any additional withholding Tax that is imposed on amounts payable to a Foreign Lender after the date on which such Foreign Lender becomes a Lender (or designates a new Lending Office) hereunder, except that Taxes in this clause (c) shall not include (i) additional withholding Tax that may be imposed on amounts payable to a Foreign Lender after the date such Foreign Lender becomes a party to the Agreement (or designates a new Lending Office), as a result of a Change in Tax Law after such time and (ii) any withholding Tax to the extent that such Foreign Lender (or its assignor, if any) was previously entitled to receive additional amounts in respect thereof pursuant to Section 5.8 of this Agreement, at the time such Foreign Lender designates a new Lending Office (or on the date of the assignment), if any; (d) any U.S. federal withholding Tax imposed under FATCA; or (e) any Tax that is attributable to such Recipient’s failure or inability to comply with Section 5.9.

“EXIM” means the Export-Import Bank of the United States.

“EXIM Program” means foreign trade insurance or guarantee program which (a) is provided to a Borrower by EXIM; (b) is in form and substance acceptable to Agent; and (c) as to which Agent has been named the beneficiary or loss payee (or similar designation) thereof pursuant to an assignment, endorsement, or similar writing in form and substance satisfactory to Agent.

“Existing Credit Agreement” means that certain Amended and Restated Loan, Security and Guarantee Agreement dated as of January 6, 2016 among the Borrowers, Parent, the Guarantors, Agent, as administrative agent, and the lenders named therein, as amended, and as may be further amended, modified or otherwise supplemented from time to time through the date hereof.

“Extraordinary Expenses” means all costs, expenses or advances that the Agent and any Security Trustee may incur during an Event of Default, or during the pendency of any Insolvency Proceeding of Parent or any Subsidiary, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against the Agent, any Security Trustee, any Fronting Bank, any Lender, any Loan Party, any representative of creditors of any Loan Party or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidability of the Agent’s or any Security Trustee’s Liens with respect to any Collateral), Loan Documents, Letters of Credit or Obligations, including any lender liability or other Claims; (c) the exercise, protection or enforcement of any rights or

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

remedies of the Agent or any Security Trustee in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of any Taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations; and (g) Protective Advances. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Loan Party or independent contractors in liquidating any Collateral, travel expenses, receivers’ and managers’ fees and legal fees.

“Facility Termination Date” means January 6, 2023, or such earlier date on which the Commitments are terminated in whole pursuant to the provisions hereof, or, solely with respect to the Extended Commitments of each Lender, such later date as shall be agreed to pursuant to the provisions of Section 14.1.1(f) hereof.

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, and, in the case of any transaction involving aggregate consideration in excess of $25,000,000, as determined in good faith by the board of directors of Parent.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended version to the extent substantively comparable and not materially more onerous to comply with), and any current or future regulations or official interpretations thereof, any intergovernmental agreements in force with respect thereto, and any agreements entered into pursuant to Section 1471(b) of the Code.

“FCCR Test Event” means the occurrence of any one of the following events: (a) Excess Availability shall be less than the greater of (i) 12.5% of the Total Line Cap and (ii) $31,250,000 or (b) U.S. Availability shall be less than the greater of (i) 12.5% of the U.S. Line Cap and (ii) $18,750,000; provided that, to the extent that the FCCR Test Event has occurred due to clause (a) of this definition, if Excess Availability shall have exceeded the greater of (w) 12.5% of the Total Line Cap and (x) $31,250,000 at all times for at least forty-five (45) consecutive days, the FCCR Test Event shall be deemed to have ended; provided, further, that to the extent that the FCCR Test Event has occurred due to clause (b) of this definition, if U.S. Availability shall have exceeded the greater of (y) 12.5% of the U.S. Line Cap and (z) $18,750,000 at all times for at least forty-five (45) consecutive days, the FCCR Test Event shall be deemed to have ended.

“Federal Funds Rate” means (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on the applicable Business Day (or on the preceding Business Day, if the applicable day is not a Business Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded up, if necessary, to the nearest 1/8 of 1%) charged to Bank of America on the applicable day on such transactions, as determined by the Agent.

“Fee Letter” means the fee letter agreement, dated as of the Closing Date, among Parent, the Borrowers and Agent.

“Fiscal Quarter” means each period of three calendar months, commencing on the first day of a Fiscal Year.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Fiscal Year” means the twelve (12) month fiscal period of Parent and its Subsidiaries for accounting and Tax purposes, ending on December 31 of each calendar year.

“Fixed Charge Coverage Ratio” means the ratio, determined as of the end of the last Fiscal Quarter of Parent and its Restricted Subsidiaries for the Test Period then ended, of (a) (i) EBITDA minus (ii) the sum of Capital Expenditures plus or minus Pro Forma CAPEX (in each case, except those financed with Debt other than Revolver Loans) minus (iii) Taxes paid in cash (net of refunds received in cash, but not less than $0) to (b) the sum of cash Interest Expense plus scheduled principal payments on Borrowed Money (after giving effect to any reductions in scheduled principal payments attributable to any optional or mandatory prepayment and excluding payments in respect of intercompany debt owed among the Loan Parties) plus Distributions paid in cash (other than Distributions made pursuant to Sections 10.2.3(b)(ii), (e), (f), (g), (h) or (j)) , all calculated for such period, without duplication, for Parent and its Restricted Subsidiaries on a consolidated basis in accordance with GAAP.

“FLSA” means the Fair Labor Standards Act of 1938.

“Foreign Borrower Group” means a group consisting of (a) the Dutch Kraton Borrowers or (b) any Additional Foreign Borrowers, as the context requires.

“Foreign Borrowers” means the Dutch Kraton Borrowers and Additional Foreign Borrowers.

“Foreign Cross-Guarantee” has the meaning set forth in Section 5.10.4.

“Foreign Domiciled Loan Party” means the Dutch Kraton Dutch Domiciled Loan Parties and any other Foreign Subsidiary now or hereafter party hereto as a Loan Party, and “Foreign Domiciled Loan Parties” means all such Persons, collectively.

“Foreign Facility Obligations” means the Dutch Kraton Facility Obligations and similar Obligations of other Foreign Domiciled Loan Parties.

“Foreign Facility Secured Obligations” means the Dutch Kraton Facility Secured Obligations and similar secured obligations of other Foreign Domiciled Loan Parties.

“Foreign Facility Secured Parties” means Dutch Kraton Facility Secured Parties and Secured Bank Product Providers of Bank Products to Foreign Domiciled Loan Parties.

“Foreign Guarantor” means the Dutch Kraton Facility Guarantor and any other Person that guarantees any Foreign Facility Secured Obligations in accordance with this Agreement from time to time.

“Foreign Lender” means (a) with respect to each Borrower that is a U.S. Person, each Lender or Fronting Bank that is not a U.S. Person, and (b) with respect to each Borrower that is not a U.S. Person, each Lender or Fronting Bank that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for Tax purposes.

“Foreign Loan Party Agent” has the meaning set forth in Section 4.4.2.

“Foreign Plan” means any material pension plan maintained or contributed to by Parent or any of its Subsidiaries with respect to employees employed outside of the United States or Canada, other than any state social security arrangements.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Foreign Revolver Commitments” means the Dutch Kraton Revolver Commitment and other Commitments to other Foreign Borrowers as provided hereunder from time to time in accordance with the terms hereof.

“Foreign Security Agreements” means the Dutch Kraton Security Agreements, the French Security Agreements, the French Second Ranking Security Agreements, the Belgian Security Agreements, the German Security Agreements, the UK Security Agreements and each other pledge or security agreement governed by the laws of any jurisdiction outside of the United States of America and executed by a Dutch Kraton Dutch Domiciled Loan Party in favor of a Security Trustee with respect to the Dutch Kraton Facility Secured Obligations and the Deposit Account Control Agreements with respect to such jurisdictions.

“Foreign Subsidiary” means a Subsidiary of Parent that is not a Domestic Subsidiary.

“French Security Agreements” means each first ranking pledge or security agreement governed by French law among any Dutch Kraton Dutch Domiciled Loan Party and the Dutch Kraton Security Trustee.

“French Second Ranking Security Agreements” means each second ranking pledge or security agreement governed by French law among any Dutch Kraton Domiciled Loan Party and the Dutch Kraton Security Trustee.

“Fronting Bank” means (a) a Dutch Kraton Fronting Bank and/or (b) a U.S. Fronting Bank, as the context requires.

“Fronting Bank Indemnitees” means (a) Dutch Kraton Fronting Bank Indemnitees and/or (b) U.S. Fronting Bank Indemnitees, as the context requires.

“Full Payment” means with respect to any Obligations or Secured Obligations (other than unasserted contingent indemnity claims), (a) the full cash payment thereof in the applicable currency required hereunder, including any interest and documented fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding); and (b) if such Obligations or Secured Obligations are LC Obligations, Secured Bank Product Obligations or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a standby letter of credit acceptable to the Agent in its discretion, in the amount of required Cash Collateral). No Loans shall be deemed to have been paid in full until all Commitments related to such Loans have expired or been terminated.

“GAAP” means generally accepted accounting principles in effect in the United States, from time to time, applied consistently, subject to Section 1.2 hereof.

“General Intangibles” has the meaning set forth in the UCC (and/or with respect to any or any other Applicable Law, as applicable).

“German Documents” means the German Security Agreements, the German Tripartite Agreement, the German Release Agreement and the German Notification of Termination of the German Existing Tripartite Agreement, including but not limited to, an account pledge agreement, a global assignment agreement and a security transfer agreement, each among the Initial Dutch Kraton Borrower and the Dutch Kraton Security Trustee.

“German Existing Security Agreements” means the following security agreements governed by German law and entered into by the Initial Dutch Kraton Borrower and the Dutch Kraton Security

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Trustee: (i) the account pledge agreement dated April 29, 2013, (ii) the global assignment agreement dated April 29, 2013 and (iii) the security transfer agreement dated April 29, 2013, each confirmed by a confirmation agreement dated January 6, 2016.

“German Existing Tripartite Agreement” means the tripartite agreement dated April 29, 2013 and entered into between the Initial Dutch Kraton Borrower as transferor, Kraton Polymers GmbH as warehouse keeper and the Dutch Kraton Security Trustee.

“German Notification of Termination of the German Existing Tripartite Agreement” means the notification to Kraton Polymers GmbH as warehouse keeper in relation to the termination of the German Existing Tripartite Agreement.

“German Release Agreement” means the release agreement pursuant to which the German Existing Security Agreements shall be released subject to this Agreement becoming effective.

“German Security Agreements” means each pledge or security agreement governed by German law among any Dutch Kraton Dutch Domiciled Loan Party and the Dutch Kraton Security Trustee.

“German Tripartite Agreement” means the tripartite agreement which is entered into between the Initial Dutch Kraton Borrower as transferor, Kraton Polymers GmbH as warehouse keeper and the Dutch Kraton Security Trustee.

“Global Intercompany Note” means a promissory note evidencing all Debt of any Loan Party or Restricted Subsidiary owed to any other Loan Party in a form approved by the Agent.

“Governmental Approvals” means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.

“Governmental Authority” means any federal, state, provincial, municipal, foreign or other governmental department, agency, commission, board, bureau, court, tribunal, instrumentality, political subdivision, authority, corporation or body, regulatory or self-regulatory organization or other entity or officer exercising executive, legislative, judicial, statutory, regulatory or administrative functions for or pertaining to any government or court (including any supranational bodies such as the European Union), in each case whether it is or is not associated with the Netherlands or the United States or any state, province, district or territory thereof, or any other foreign entity or government.

“Guarantee” means each guarantee agreement (including this Agreement) executed by a Guarantor in favor of the Agent guaranteeing all or any portion of the Secured Obligations.

“Guarantor Payment” has the meaning set forth in Section 5.10.3(b).

“Guarantors” means (a) with respect to any Dutch Kraton Facility Obligations, the Dutch Kraton Facility Guarantors and any other Person who guarantees payment or performance of such Dutch Kraton Facility Obligations and (b) with respect to any Secured Obligations, the U.S. Facility Guarantors, and each other Person who guarantees payment or performance of such Secured Obligations.

“Hedge Agreement” means any swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices, either generally or under specific contingencies entered into for the purpose of hedging Parent’s or any Subsidiary of Parent’s exposure to interest or exchange rates, loan credit exchanges, security or currency valuations or commodity prices not for speculative purposes.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Historical Financial Statements” means, as of the Closing Date, (i) the audited consolidated financial statements of Parent and its Subsidiaries for the Fiscal Years ended December 31, 2017, December 31, 2018 and December 31, 2019, and (ii) the unaudited consolidated statements of Parent and its Subsidiaries for the Fiscal Quarters ended June 30, 2019, September 30, 2019 and December 31, 2019.

“HSBC Asian Production Facility” means Kraton Formosa Polymers Corporation, a limited liability company formed under the laws of the Republic of China, or any other Asian production facility the North American Loan Party Agent may choose to pursue.

“Immaterial Subsidiary” means, at any date of determination, any one or more Restricted Subsidiaries (other than a Borrower) whose (a) total tangible assets, on the last day of the most recent Test Period for which financial statements have been delivered pursuant to clause (a) or (b) of Section 10.1.2 were less than 5% of Consolidated Tangible Assets, and (b) total revenues for such Test Period ending on such date were less than 5% of total revenues of Parent and its Restricted Subsidiaries, in each case determined in accordance with GAAP.

“Imported Goods Agreement” means each agreement that is mutually acceptable to Agent, the applicable Borrower, and the applicable freight forwarding company, customs brokerage house or other handler, as the case may be, with respect to the transport of, access to and control of Eligible Inventory as set forth therein.

“Increase Date” has the meaning set forth in Section 2.1.7(c).

“Increased Reporting Trigger” means the occurrence of:

(a)          any one of the following events for five (5) consecutive Business Days:

(i)           Excess Availability shall be less than the greater of (A) 15% of the Total Line Cap and (B) $37,500,000, or

(ii)           U.S. Availability shall be less than the greater of (A) 15% of the U.S. Line Cap and (B) $22,500,000;

provided that, to the extent that the Increased Reporting Trigger has occurred due to clause (a)(i) of this definition, if Excess Availability shall have exceeded the greater of (A) 15% of the Total Line Cap and (B) $37,500,000 at all times for at least forty-five (45) consecutive days, the Increased Reporting Trigger shall be deemed to have ended;

provided, further, that to the extent that the Increased Reporting Trigger has occurred due to clause (a)(ii) of this definition, if U.S. Availability shall have exceeded the greater of (A) 15% of the U.S. Line Cap and (B) $22,500,000 at all times for at least forty-five (45) consecutive days, the Increased Reporting Trigger shall be deemed to have ended; and/or

(b)          a FCCR Test Event.

“Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.

“Indemnitees” means Agent Indemnitees, Lender Indemnitees, Fronting Bank Indemnitees and Bank of America Indemnitees.

“Initial Dutch Kraton Borrower” has the meaning set forth in the preamble to this Agreement.

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“Insolvency Proceeding” means any case or proceeding, application, meeting convened, resolution passed, proposal, corporate action or any other proceeding commenced by or against a Person under any state, provincial, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the U.S. Bankruptcy Code, or any other insolvency, debtor relief, bankruptcy, receivership, debt adjustment law or other similar law (whether state, provincial, federal or foreign), including the Dutch Bankruptcy Law (Faillissementswet); (b) the appointment of a Creditor Representative or other custodian for such Person or any part of its Property; (c) an assignment or trust mortgage for the benefit of creditors; (d) the winding up or strike off the Person (other than in connection with a solvent reorganization permitted by Section 10.2.8); (e) the proposal or implementation of a scheme of arrangement; (f) a suspension of payment, moratorium of any debts, official assignment, composition or arrangement with a Person’s creditors; or (g) in the case of a Dutch Kraton Dutch Domiciled Loan Party, any (provisional) suspension of payment (voorlopige) (surseance van betaling), bankruptcy (faillissement), dissolution or winding up (ontbinding).

“Insolvency Regulation” means Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast).

“Intellectual Property” means the rights in and to (i) all inventions and discoveries (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos, trade names and corporate names, together with all translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith, (iii) all copyrightable works, all copyrights and all applications, registrations and renewals in connection therewith, (iv) all know-how, trade secrets and confidential business information, whether patentable or unpatentable and whether or not reduced to practice (including ideas, research and development, know-how, formulas, compositions and manufacturing and production process and techniques, technical data, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals), (v) designs, (vi) all computer software (including data and related documentation), (vii) all other proprietary rights and (viii) all licenses and agreements in connection therewith.

“Intellectual Property Claim” means any claim or assertion (whether in writing, by suit or otherwise) that the Parent’s or any Restricted Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s Intellectual Property.

“Interest Expense” means, with reference to any period, total interest expense payable in cash (including that attributable to capital lease obligations) of Parent and its Restricted Subsidiaries for such period with respect to all outstanding Borrowed Money of Parent and its Restricted Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Hedge Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP), calculated on a consolidated basis for Parent and its Restricted Subsidiaries for such period in accordance with GAAP but excluding (a) amortization of deferred financing costs and any other amounts of non-cash interest and (b) the accretion or accrual of discounted liabilities during such period to the extent not paid in cash.

“Interest Period” has the meaning set forth in Section 3.1.3.

“Inventory” has the meaning set forth in Article 9 of the UCC.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Inventory Appraisal” means (a) in connection with the Transactions, the appraisals prepared by HILCO Appraisal Services LLC dated December 23, 2019, as to Borrowers and (b) thereafter the most recent inventory appraisal conducted by an independent appraisal firm and delivered pursuant to Section 10.1.1 hereof.

“Inventory Revaluation” means an adjustment (positive or negative) to EBITDA equal to the difference of (a) EBITDA as determined in accordance with the “first-in-first-out” method of accounting minus (b) EBITDA as determined in accordance with the “replacement cost” method of accounting, computed by adjusting cost of sales to reflect the cost of raw material prices during the applicable period.

“Investment” means, for any Person: (a) the purchase or acquisition (whether for cash, property, services or securities or otherwise) of Equity Interests, Equity Interest Equivalents, Debt or other securities of any other Person (including any capital contribution); (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such Person); or (c) the entering into of any guarantee of, or other Contingent Obligation with respect to, Debt of any other Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Investment Grade Receivables” means Accounts owing from Account Debtors, which Account Debtor, or any parent thereof, has a credit rating of BBB- or Baa3 or higher as determined by S&P or Moody’s, as applicable.

“IRS” means the United States Internal Revenue Service.

“KPCC” means Kraton Polymers Capital Corporation, a Delaware corporation.

“KPLLC” means Kraton Polymers LLC, a Delaware limited liability company.

“Kraton Polymers” has the meaning set forth in the preamble to this Agreement.

“Kraton Polymers Holdings” means Kraton Polymers Holdings B.V., a besloten vennootschap (a private limited liability company) organized under the laws of the Netherlands.

“Kraton SPV” has the meaning set forth in “Supplier Financing Transaction”.

“LC Document” means any of the Dutch Kraton LC Documents and/or the U.S. LC Documents, as the context requires.

“LC Obligations” means the Dutch Kraton LC Obligations and/or the U.S. LC Obligations, as the context requires.

“Lender Indemnitees” means Lenders, Affiliates of Lenders and their respective officers, directors, members, partners, employees and agents.

“Lenders” has the meaning set forth in the preamble to this Agreement, including (a) Bank of America and its Affiliates in their respective capacities as the Dutch Kraton Swingline Lender and the U.S. Swingline Lender, (b) the Dutch Kraton Lenders, (c) the U.S. Lenders and (d) their respective permitted successors and assigns and, where applicable, any Fronting Bank, and any other Person who hereafter becomes a “Lender” pursuant to an Assignment and Acceptance.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Lending Office” means the office designated as such by the Applicable Lender at the time it becomes party to this Agreement or thereafter by notice to the Agent and the relevant Loan Party Agent.

“Letter-of-Credit Right” has the meaning set forth in Article 9 of the UCC.

“Letters of Credit” means the Dutch Letters of Credit and/or the U.S. Letters of Credit, as the context requires.

“LIBOR” means the per annum rate of interest (in no event less than one percent (1.00%)) determined by Agent at or about 11:00 a.m. (London time) two Business Days prior to an interest period, for a term equivalent to such interest period, equal to the London Interbank Offered Rate, or comparable or successor rate approved by Agent, as published on the applicable Reuters screen page (or other commercially available source designated by Agent from time to time); provided, that any comparable or successor rate shall be applied by Agent, if administratively feasible, in a manner consistent with market practice.

“LIBOR Loan” means each set of LIBOR Revolver Loans having a common currency, length and commencement of Interest Period.

“LIBOR Revolver Loan” means a Revolver Loan that bears interest based on LIBOR; provided, however, that a European Base Rate Loan bearing interest as set forth in the definition of European Base Rate, or a U.S. Base Rate Loan bearing interest as set forth in clause (c) of the definition of U.S. Base Rate, shall not constitute a LIBOR Revolver Loan.

“LIBOR Successor Rate” has the meaning set forth in Section 3.6.

“LIBOR Successor Rate Conforming Changes” means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters as may be appropriate, in the discretion of the Agent, to reflect the adoption and implementation of such LIBOR Successor Rate and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Agent determines is reasonably necessary in connection with the administration of this Agreement).

“License” means, with respect to any Loan Party, all of such Loan Party’s right, title, and interest in and to (a) any and all written licensing agreements or similar arrangements in (i) Patents, (ii) Copyrights, (iii) Trademarks, (iv) Trade Secrets or (v) Software, and (b) all rights to sue for past, present, and future breaches thereof.

“Lien” means any mortgage, pledge (including, without limitation, disclosed, undisclosed, possessory and non-possessory), security interest, hypothecation, assignment, statutory trust, deemed trust, privilege, lien, charge, bailment or similar encumbrance, whether statutory, based on common law, contract or otherwise, and including any agreement to give any of the foregoing, any conditional sale, any retention of title or any other title retention agreement, or any lease in the nature thereof.

“Lien Acknowledgment” means an agreement, in form and substance satisfactory to the Agent (acting reasonably and in light of (A) the requirements of Applicable Law to provide a valid and enforceable Lien over the relevant Inventory and (B) the ability of the Agent or any Security Trustee to carry out an orderly enforcement of its Liens over that Inventory following an Event of Default), by

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

which for any Eligible Inventory (a) located on leased premises or (b) held by a warehouseman, such lessor or warehouseman is notified of the Agent’s or Security Trustee’s Lien and, if required for perfection under the Applicable Law of such jurisdiction and customary in such jurisdiction (i) acknowledges the Agent’s or Security Trustee’s Lien on any such Eligible Inventory located on the premises and (ii) agrees to permit the Agent or a Security Trustee to, upon an Event of Default and for a reasonable time thereafter, (A) enter upon the premises, (B) remove, store or dispose of such Collateral, (C) have the Collateral delivered to the Agent upon the Agent’s instructions, or (D) in the case of warehouseman agrees to hold the Goods as agent for the Agent, or such other documentation to which the Agent may reasonably agree.

“Loan” means a Revolver Loan.

“Loan Account” has the meaning set forth in Section 5.7.1.

“Loan Documents” means this Agreement, the Other Agreements and the Security Documents.

“Loan Parties” means the Dutch Kraton Facility Loan Parties and the U.S. Facility Loan Parties, collectively, and “Loan Party” means any of the Loan Parties, individually.

“Loan Party Agent” means the Foreign Loan Party Agent and/or the North American Loan Party Agent, as the context requires.

“Loan Party Group” means a group consisting of (a) the Dutch Kraton Facility Loan Parties or (b) the U.S. Facility Loan Parties, as the context requires.

“Loan Party Group Obligations” means with respect to (a) the Dutch Kraton Facility Loan Parties, the Dutch Kraton Facility Obligations and (b) the U.S. Facility Loan Parties, U.S. Facility Obligations.

“Local Time” means with respect to (a) U.S. Revolver Loans, Dallas, Texas time in the United States and (b) Dutch Kraton Revolver Loans, prevailing time in London, England.

“Margin Stock” has the meaning set forth in Regulation U of the Board of Governors as in effect from time to time.

“Material Adverse Effect” means (a) a material adverse effect on, the operations, business, assets, properties or financial condition of Parent and its Subsidiaries, taken as a whole; (b) a material impairment of the rights and remedies of the Agent, any Secured Trustee or any Lender under any Loan Documents; (c) a material impairment of the ability of (i) the U.S. Borrowers and the U.S. Facility Guarantors, taken as a whole, to perform any of their material obligations under any Loan Document or (ii) the Borrowers and the Guarantors, taken as a whole, to perform any of their material obligations under any Loan Document; or (d) a material adverse effect upon a material portion of the Collateral or the validity or priority of the Agent’s or any Security Trustee’s Liens thereon.

“Material Contract” means any agreement or arrangement to which any Loan Party or any Restricted Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a material contract under any securities law applicable to such Person, including the Securities Act of 1933, as amended; (b) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect; or (c) that relates to Material Debt.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Material Debt” means Debt (other than the Obligations and Letters of Credit), or obligations in respect of one or more Hedge Agreements, of any one or more of the Loan Parties and their Restricted Subsidiaries in an aggregate principal amount exceeding $50,000,000. For purposes of determining Material Debt, the “obligations” of any Loan Party or any Restricted Subsidiary in respect of any Hedge Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Loan Party or such Restricted Subsidiary would be required to pay if such Hedge Agreement were terminated at such time.

“Maximum Facility Amount” means $350,000,000.

“Moody’s” means Moody’s Investors Service, Inc., and its successors.

“Mortgage” means a second-priority mortgage, deed of trust or deed to secure debt in which a Loan Party grants a Lien on Mortgaged Property to Agent, as security for the Obligations, in each case substantially similar in form and substance to the corresponding “Mortgage” (as defined in the Term Loan Agreement) against such Mortgaged Property granted by such Loan Party for the benefit of the Term Loan Lenders (except with respect to priority).

“Mortgaged Property” has the meaning set forth in the Term Loan Agreement.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA and subject to Title IV of ERISA, to which any Loan Party or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years, has made or been obligated to make contributions.

“Net Income” means, for any period, the net income (or loss) of Parent and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Restricted Subsidiary of Parent or is merged into or consolidated with Parent or any of its Restricted Subsidiaries, (b) the income (or deficit) of any Person (other than a Restricted Subsidiary of Parent) in which Parent or any of its Restricted Subsidiaries has an ownership interest, except to the extent that any such income is actually received by Parent or such Restricted Subsidiary in the form of dividends or similar distributions, (c) the undistributed earnings of any Restricted Subsidiary of Parent to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Applicable Law and (d) the cumulative effect of a change in accounting principles during such period to the extent included in Net Income.

“New Loan Party” means any Person that executes a supplement or joinder to this Agreement substantially in the form of Exhibit G and becomes a Loan Party under this Agreement pursuant to Sections 10.1.9 or 10.2.8(b).

“NOLV Percentage” means the net orderly liquidation value of Inventory (determined in accordance with the appraisal prepared in connection with the Transactions or by any later such appraisal), expressed as a percentage, net of all liquidation expenses, as determined from the most recent Inventory Appraisal approved by the Agent.

“Non-Consenting Lender” has the meaning set forth in Section 13.3.4.

“North American Loan Party Agent” has the meaning set forth in Section 4.4.1.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Notice of Borrowing” means a Notice of Borrowing to be provided by the relevant Loan Party Agent to request a Borrowing of Loans, in the form attached hereto as Exhibit E or otherwise in form reasonably satisfactory to the Agent and such Loan Party Agent.

“Notice of Conversion/Continuation” means a Notice of Conversion/Continuation to be provided by the relevant Loan Party Agent to request a conversion or continuation of any Loans as LIBOR Loans, in the form attached hereto as Exhibit F or otherwise in form reasonably satisfactory to the Agent and such Loan Party Agent.

“Obligations” means all (a) principal of and premium, if any, on the Loans, (b) LC Obligations and other obligations of the Loan Parties with respect to Letters of Credit, (c) interest, expenses, fees, indemnification obligations, Extraordinary Expenses and other amounts payable by the Loan Parties from time to time under the Loan Documents and (d) other Debt, obligations and liabilities of any kind owing by the Loan Parties pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guarantee, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several, including, without limitation, Secured Bank Product Obligations but (e) shall exclude Excluded Swap Obligations.

“Ordinary Course of Business” means with respect to any Person, the ordinary course of business of such Person, consistent with past practices or, with respect to actions taken by such Person for which no past practice exists, consistent with past practices of similarly situated companies, and, in each case, undertaken in good faith.

“Organization Documents” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction), (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“OSHA” means the Occupational Safety and Health Act of 1970.

“Other Agreement” means each Revolver Note, the ABL Intercreditor Agreement, LC Document, Fee Letter, Lien Acknowledgment, Borrowing Base Certificate, Compliance Certificate, Borrower Materials, or other document, instrument, certificate, notice, report or agreement (other than this Agreement or a Security Document) now or hereafter delivered by or on behalf of a Loan Party to the Agent, a Security Trustee, a Fronting Bank or a Lender in connection with any transactions relating hereto.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan, Letter of Credit or Loan Document).

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Other Taxes” means all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment pursuant to Section 3.9).

“Overadvance” means a Dutch Kraton Overadvance or a U.S. Overadvance, as the context requires.

“Overadvance Loan” means a Dutch Kraton Overadvance Loan and/or a U.S. Overadvance Loan, as the context requires.

“Parent” has the meaning set forth in the preamble to this Agreement.

“Patents” means, with respect to any Loan Party, all of such Loan Party’s right, title, and interest in and to: (i) any and all patents and patent applications; (ii) all inventions claimed therein; (iii) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (iv) all income, royalties, damages, claims and payments now or hereafter due or payable under and with respect thereto, including damages and payments for past and future infringements thereof; (v) all rights to sue for past, present, and future infringements thereof; and (vi) all domestic rights corresponding to any of the foregoing.

“Participant” has the meaning set forth in Section 13.2.

“Participant Register” has the meaning set forth in Section 13.2.

“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 the legislation of the European Community relating to the Economic and Monetary Union.

“Patriot Act” means USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

“Payment Conditions” means for Distributions, Acquisitions, Investments and Debt payments, no Default or Event of Default has occurred and is continuing or would result therefrom and either of the following:

(i)            Excess Availability shall be at least 25.0% of the Total Line Cap on a pro forma basis for each day (A) during the consecutive thirty (30) day period immediately preceding such Distribution, Acquisition, Investment or Debt payment and (B) during the consecutive thirty (30)-day period after giving effect thereto; or

(ii)          (A) the Pro Forma Fixed Charge Coverage Ratio for Parent and its Restricted Subsidiaries after giving effect to such Distribution, Acquisition, Investment or Debt payment shall be greater than 1.10 to 1.00 for the most recently completed Test Period reported under Section 10.1.2 (calculated on a pro forma basis in a manner acceptable to the Agent) as if a FCCR Test Event was in effect and (B) Excess Availability shall be at least 17.5% of the Total Line Cap, in the case of subclause (B), on a pro forma basis for each day (1) during the consecutive thirty (30)-day period immediately preceding such Distribution, Acquisition, Investment or Debt payment and (2) during the consecutive thirty (30)-day period after giving effect thereto.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

For purposes of the foregoing paragraph, pro forma basis shall be determined by the North American Loan Party Agent in good faith with respect to such Distribution, Acquisition, Investment or Debt payment, as of the date such payment is made; provided that (i) any Distribution for the purpose of making a dividend to Parent shareholders may be determined solely as of the date of declaration thereof so long as such dividend is actually made within sixty (60) days, (ii) any Acquisition or Investment may be determined solely as of the date of entry into definitive documentation with respect thereto, (iii) any Debt payment may be determined solely as of the date of any required notice of redemption or prepayment notice; provided further that an officer’s certificate of the North American Loan Party Agent delivered to the Agent at least five (5) Business Days prior to such date of determination stating that the North American Loan Party Agent has determined in good faith that the foregoing requirements have been satisfied shall be conclusive evidence that the foregoing requirements have been satisfied unless the Agent notifies the Parent, as the case may be, within such five (5) Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees).

“Payment Item” means each check, draft or other item of payment payable to a Loan Party, including those constituting proceeds of any Collateral.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Perfection Certificate” means a certificate disclosing information regarding the Loan Parties in a form approved by the Agent.

“Perfection Jurisdiction” means each of Belgium, France, Germany, the Netherlands, UK and U.S.

“Permitted Acquisition” means any Acquisition by a Loan Party or Restricted Subsidiary in a transaction that satisfies each of the following requirements:

(a)            an Acquisition of the Equity Interests or assets of another Person approved by the board of directors (or other comparable governing body) of such other Person;

(b)             the business or assets acquired in connection with such Acquisition is not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties and Restricted Subsidiaries are engaged on the Closing Date and any line of businesses or business activities that are substantially similar, related, or incidental thereto;

(c)            if the North American Loan Party Agent elects to include the Accounts and Inventory acquired in connection with such Acquisition in the determination of the applicable Borrowing Base, prior to such inclusion, the Agent shall have conducted an audit and field examination and, to the extent required by the Agent, an appraisal of such Inventory to its satisfaction, any applicable Reserves have been established, and all appropriate lien filings and collateral documentation, including Lien Acknowledgments (if capable of being obtained using commercially reasonable efforts), have been duly completed, executed and delivered to the Agent;

(d)             [Reserved];

(e)             in connection with an Acquisition of the Equity Interests in any Person, all Liens on property of such Person shall be terminated unless permitted pursuant to the Loan Documents, and in connection with an Acquisition of the assets of any Person, all Liens on such assets shall be terminated unless permitted pursuant to the Loan Documents; and

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(f)              no Default or Event of Default exists or would result therefrom.

“Permitted Bill of Lading” means a tangible negotiable bill of lading, of a type and in a form acceptable to the Agent (as determined in the Agent’s Permitted Discretion), which bill of lading is (i) issued by a common carrier acceptable to the Agent and (ii) in the possession of either the Agent or a freight forwarder or customs broker, as applicable, acting for the Agent, in each case, under the terms of an Imported Goods Agreement which has been delivered to the Agent.

“Permitted Contingent Obligations” means Contingent Obligations (a) arising from Hedge Agreements permitted hereunder; (b) existing on the Closing Date, and any extension or renewal thereof that does not increase the amount of such Contingent Obligation when extended or renewed; (c) take-or-pay obligations in supply agreements entered into in the Ordinary Course of Business; (d) arising under the Loan Documents, (e) arising with respect to Debt incurred pursuant to Section 10.2.1(u) or (f) arising under the Senior Notes Documents.

“Permitted Discretion” means a determination made in good faith by the Agent and in the exercise of reasonable credit judgment (from the perspective of a secured, asset-based lender similarly situated).

“Permitted Lien” has the meaning set forth in Section 10.2.2.

“Permitted Payments” means without duplication as to amounts:

(a)           Distributions by any Restricted Subsidiary of Parent to pay reasonable accounting, legal and administrative expenses and general corporate operating and overhead costs and expenses when due, to the extent such expenses are attributable to the ownership and operation of Parent and its Restricted Subsidiaries; and

(b)          Distributions by any Restricted Subsidiary of Parent to Parent in amounts required for Parent to pay federal, state and local income and similar taxes attributable to the income of KPLLC and its Subsidiaries; provided that the amount of such payments in any Fiscal Year does not exceed the amount that KPLLC and its Subsidiaries would be required to pay in respect of foreign, federal, state and local taxes for such Fiscal Year were KPLLC and its Subsidiaries to pay such taxes separately from Parent.

“Permitted Purchase Money Debt” means Purchase Money Debt of Loan Parties and Restricted Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long as the aggregate amount does not exceed the greater of 5.0% of Consolidated Total Assets or $150,000,000 at any time.

“Person” means any individual, corporation, limited liability company, unlimited liability company, partnership, joint venture, joint stock company, land trust, business trust, unincorporated organization, Governmental Authority or other entity.

“Pledged Equity Interests” means all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust Interests and any other participation or interests in any equity or profits of any business entity, including any trust and all management rights relating to any entity whose equity interests are included as Pledged Equity Interests.

“Pledged LLC Interests” means all interests now owned or hereafter acquired by any Loan Party in any limited liability company and each series thereof, including all limited liability company interests set forth on Schedule B to the Perfection Certificate, and the certificates, if any, representing such limited

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

liability company interests and any interest of any Loan Party on the books and records of such limited liability company or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such limited liability company interests and all rights as a member of the related limited liability company.

“Pledged Partnership Interests” means all interests now owned or hereafter acquired by any Loan Party in any general partnership, limited partnership, limited liability partnership or other partnership, including all partnership interests set forth on Schedule B to the Perfection Certificate, and the certificates, if any, representing such partnership interests and any interests of any Loan Party on the books and records of such partnership or on the books and records of any securities intermediary pertaining to such interests and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for a portion of or all of such partnership interests and all rights as a partner of the related partnership.

“Pledged Stock” means all shares of capital stock now owned or hereafter acquired by any Loan Party, including all shares of capital stock set forth on Schedule B to the Perfection Certificate, and the certificates, if any, representing such shares and any interest of any Loan Party in the entries on the books of the issuer of such shares or on the books of any securities intermediary pertaining to such shares and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares.

“Pledged Trust Interests” means all interests now owned or hereafter acquired in a Delaware business trust or other trust including, without limitation, all trust interests listed on Schedule B to the Perfection Certificate, and the certificates, if any, representing such trust interests and any interest of any Loan Party on the books and records of such trust or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such trust interests.

“Pro Forma Basis” means for purposes of calculating the Fixed Charge Coverage Ratio under Section 10.3 (including Pro Forma CAPEX and Pro Forma EBITDA) for any period during which one or more Specified Transactions occurs, such Specified Transaction (and all other Specified Transactions that have been consummated during the applicable period) shall be deemed to have occurred as of the first day of the most recent four Fiscal Quarter period of measurement and all income statement items (whether positive or negative) attributable to the Property or Person disposed of in a Specified Disposition shall be excluded and all income statement items (whether positive or negative) attributable to the Property or Person acquired in a Permitted Acquisition shall be included; provided that the foregoing pro forma adjustments may include anticipated cost savings and synergies solely to the extent that such adjustments are factually supportable and identifiable and reasonably expected to be realized within twelve (12) months of such Specified Transaction as set forth in reasonable detail on a certificate of a Senior Officer of the North American Loan Party Agent delivered to the Agent; provided, further, that the foregoing pro forma adjustment shall be without duplication of any cost savings or additional costs that are already included in the calculation of EBITDA.

“Pro Forma CAPEX” means, with respect to any Specified Transaction for any period, the amount for such period of Capital Expenditures calculated on a Pro Forma Basis for such Specified Transaction.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Pro Forma EBITDA” means, with respect to any Specified Transaction for any period, the amount for such period of EBITDA calculated on a Pro Forma Basis for such Specified Transaction.

“Pro Forma Fixed Charge Coverage Ratio” means, for any period, the Fixed Charge Coverage Ratio for such period calculated on a Pro Forma Basis, provided that clause (b) of the definition of Fixed Charge Coverage Ratio shall include all Distributions paid in cash (other than Distributions solely to Loan Parties and Restricted Subsidiaries).

“Pro Rata” means (a) when used with reference to a Lender’s (i) share on any date of the total Borrower Group Commitments to a Borrower Group, (ii) participating interest in LC Obligations (if applicable) to the members of such Borrower Group, (iii) share of payments made by the members of such Borrower Group with respect to such Borrower Group’s Obligations, (iv) increases or reductions to the Borrower Group Commitments pursuant to Section 2.1.4 or 2.1.7, and (v) obligation to pay or reimburse the Agent for Extraordinary Expenses owed by or in respect of such Borrower Group or to indemnify any Indemnitees for Claims relating to such Borrower Group, a percentage (expressed as a decimal, rounded to the ninth decimal place) derived by dividing the amount of the Borrower Group Commitment of such Lender to such Borrower Group on such date by the aggregate amount of the Borrower Group Commitments of all Lenders to such Borrower Group on such date (or if such Borrower Group Commitments have been terminated, by reference to the respective Borrower Group Commitments as in effect immediately prior to the termination thereof) or (b) when used for any other reason, a percentage (expressed as a decimal, rounded to the ninth decimal place) derived by dividing the aggregate amount of the Lender’s Commitments on such date by the aggregate amount of the Commitments of all Lenders on such date (or if any such Commitments have been terminated, such Commitments as in effect immediately prior to the termination thereof).

“Properly Contested” means with respect to any obligation of a Loan Party or a Restricted Subsidiary, (a) the obligation is subject to a bona fide dispute regarding amount or the Loan Party’s or a Restricted Subsidiary’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; (d) non-payment could not reasonably be expected to have a Material Adverse Effect (other than a Permitted Lien), nor reasonably be expected to result in forfeiture or sale of any Collateral of the Loan Party or any Restricted Subsidiary; (e) no Lien is imposed on assets of the Loan Party or any Restricted Subsidiary, unless bonded and stayed to the satisfaction of the Agent; and (f) if the obligation results from entry of a judgment or other order, such judgment or order is stayed pending appeal or other judicial review.

“Property” means any interest in any kind of property or asset, whether real (immovable), personal (movable) or mixed, or tangible (corporeal) or intangible (incorporeal).

“Protective Advances” means Dutch Kraton Protective Advances and/or U.S. Protective Advances, as the context requires.

“Purchase Money Debt” means (a) Debt (other than the Obligations) incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Debt assumed in connection with the acquisition of any such assets; provided that such Debt is incurred prior to or within ninety (90) days before or after acquisition or completion of such construction or improvement; and (b) any renewals, extensions or refinancings (but not increases) thereof.

“Purchase Money Lien” means a Lien that secures Purchase Money Debt, encumbering only the fixed or capital assets acquired or financed with such Debt and constituting a Capital Lease or a purchase money security interest under the UCC; provided that Purchase Money Debt provided by a single lender may be cross-collateralized to other Purchase Money Debt provided solely by such lender.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each U.S. Domiciled Loan Party that has total assets exceeding $10,000,000 at the time such Swap Obligation is incurred or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder.

“Qualified Secured Bank Product Obligations” means Secured Bank Product Obligations with respect to Hedge Agreements.

“RCRA” means the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).

“Real Estate” means all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.

“Receivables” means the Accounts, Payment Intangibles, Chattel Paper and any other rights or claims to receive money that are General Intangibles or that are otherwise included as Collateral.

“Recipient” means any Agent, any Lender, any Fronting Bank, any Security Trustee or any other recipient of a payment to be made by or on behalf of any Loan Party on account of any Obligations under any Loan Document.

“Records” has the meaning set forth in Article 9 of the UCC.

“Refinancing Conditions” means the following conditions for Refinancing Debt: (a) it is in an aggregate principal amount that does not exceed the principal amount of the Debt being extended, renewed or refinanced (plus fees, expenses and accrued interest); (b) it has a final maturity no sooner than, and a weighted average life no less than, the Debt being modified, extended, renewed, refunded, substituted, replaced or refinanced; (c) if the initial Debt is junior Debt, such Refinancing Debt shall be subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Debt being modified, extended, renewed, refunded, substituted, replaced or refinanced; (d) the terms and conditions of such Refinancing Debt are no more restrictive than the debt being refinanced in any material respect and taken as a whole or not adverse to the Lenders in any material respect (excluding as to interest rate, fees, funding discount and prepayment or redemption premium); (e) the Liens to secure it shall not encumber any additional property other than property securing the Debt being extended, renewed or refinanced; and (f) no additional Person is obligated on such Debt; provided that an officer’s certificate of the North American Loan Party Agent delivered to the Agent at least five (5) Business Days prior to the incurrence of such Debt, together with a reasonably detailed description of the material terms and conditions of such Debt or drafts of the documentation relating thereto, stating that the North American Loan Party Agent has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Agent notifies the Parent, as the case may be, within such five (5) Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees).

“Refinancing Debt” means Borrowed Money that is issued, incurred or otherwise obtained (including by means of the extension or renewal of existing Debt) in exchange for, or as a modification, extension, renewal, refunding, substitution, replacement or refinancing, in whole or in part, of existing Debt (or unused commitments).

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Register” has the meaning set forth in Section 13.1.

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York for the purpose of recommending a benchmark rate to replace LIBOR in loan agreements similar to this Agreement.

“Report” has the meaning set forth in Section 12.3.4.

“Reportable Event” means the occurrence of any of the events set forth in Section 4043(c) of ERISA and regulations thereunder with respect to a U.S. Employee Plan (other than an event for which the thirty (30)-day notice period is waived).

“Required Borrower Group Lenders” means, at any date of determination thereof, Lenders having Borrower Group Commitments to a Borrower Group representing more than 50% of the aggregate Borrower Group Commitments to such Borrower Group at such time; provided, however, that if and for so long as any such Lender shall be a Defaulting Lender, the term “Required Borrower Group Lenders” shall mean Lenders (excluding such Defaulting Lender) having Borrower Group Commitments to such Borrower Group representing more than 50% of the aggregate Borrower Group Commitments to such Borrower Group (excluding the Borrower Group Commitments of each Defaulting Lender) at such time; provided further, however, that if all of the Borrower Group Commitments to such Borrower Group have been terminated, the term “Required Borrower Group Lenders” shall mean Lenders to such Borrower Group holding Revolver Loans to, and (if applicable) participating interest in LC Obligations owing by, such Borrower Group representing more than 50% of the aggregate outstanding principal amount of Revolver Loans and (if applicable) LC Obligations owing by such Borrower Group at such time.

“Required Lenders” means, at any date of determination thereof, Lenders having Commitments representing more than 50% of the aggregate Commitments at such time; provided, however, that for so long as any Lender shall be a Defaulting Lender, the term “Required Lenders” shall mean Lenders (excluding such Defaulting Lender) having Commitments representing more than 50% of the aggregate Commitments (excluding the Commitments of each Defaulting Lender) at such time; provided further, however, that if any of the Commitments have been terminated, the term “Required Lenders” shall be calculated based on the Dollar Equivalent thereof using (a) in lieu of such Lender’s terminated Commitment, the outstanding principal amount of the Revolver Loans by such Lender to, and (if applicable) participation interests in LC Obligations owing by, all Borrowers and (b) in lieu of the aggregate Commitments to all Borrowers, the aggregate outstanding Revolver Loans to, and (if applicable) LC Obligations owing by all Borrowers.

“Reserves” means Dutch Kraton Availability Reserves and/or U.S. Availability Reserves, as the context requires.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“Restricted Subsidiary” means any direct or indirect Subsidiary of Parent other than an Unrestricted Subsidiary.

“Restrictive Agreement” means an agreement (other than a Loan Document) that conditions or restricts the right of any Loan Party or Restricted Subsidiary to incur or repay Borrowed Money, to grant Liens on any material asset, to declare or make Distributions, to modify, extend or renew any agreement evidencing Borrowed Money, or to repay any intercompany Debt.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Revolver Commitment Increase” and “Revolver Commitment Increases” have the meaning set forth in Section 2.1.7(b).

“Revolver Commitment Termination Date” means the Dutch Kraton Revolver Commitment Termination Date and/or the U.S. Revolver Commitment Termination Date, as the context requires.

“Revolver Commitments” means, collectively, the U.S. Revolver Commitments and the Dutch Kraton Revolver Commitments.

“Revolver Facilities” means the facilities established pursuant to this Agreement under the U.S. Revolver Commitments and the Dutch Kraton Revolver Commitments, and “Revolver Facility” means any one of such Revolver Facilities.

“Revolver Loan” means a loan made pursuant to Section 2.1.1, and any Overadvance Loan, Swingline Loan or Protective Advance.

“Revolver Notes” means, collectively, the Dutch Kraton Revolver Notes and the U.S. Revolver Notes.

“Royalties” means all royalties, fees, expense reimbursement and other amounts payable by a Loan Party or Restricted Subsidiary under a License.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

“Sanctioned Entity” means (a) a country or territory or a government of a country or territory, (b) an agency of the government of a country or territory, (c) an organization directly or indirectly controlled by a country or territory or its government, or (d) a Person resident in or determined to be resident in a country or territory, in each case of clauses (a) through (d) that is a target of Sanctions, including a target of any country sanctions program administered and enforced by OFAC.

“Sanctioned Person” means, at any time (a) any Person named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s consolidated Non-SDN list or any other Sanctions-related list maintained by any Governmental Authority, (b) a Person or legal entity that is a target of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Entity, or (d) any Person directly or indirectly owned or controlled (individually or in the aggregate) by or acting on behalf of any such Person or Persons described in clauses (a) through (c) above.

“Sanctions” means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed, administered or enforced from time to time by: (a) the United States of America, including those administered by OFAC, the U.S. Department of State, the U.S. Department of Commerce, the U.S. Department of the Treasury’s Office of Foreign Assets Control or through any existing or future executive order, (b) the United Nations Security Council, (c) the European Union or any European Union member state, (d) Her Majesty’s Treasury of the United Kingdom, or (e) any other Governmental Authority with jurisdiction over any Lender or any Loan Party or any of their respective Subsidiaries or Affiliates.

“SEC” means the Securities and Exchange Commission or any Governmental Authority succeeding thereto.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Secured Bank Product Document” means any agreement, instrument or other document entered into in connection with any Secured Bank Product Obligations.

“Secured Bank Product Obligations” means Bank Product Debt owing to a Secured Bank Product Provider (whether relating to Bank Products originally extended by such Secured Bank Product Provider or Bank Product Debt assigned to such Secured Bank Product Provider) and evidenced by one or more Secured Bank Product Documents and, in the case of any Secured Bank Product Provider other than Bank of America and its Affiliates, up to the maximum amount specified in writing to the Agent pursuant to clause (b) of the definition of Secured Bank Product Provider, which amount may be established and increased or decreased by further written notice from such provider and a Loan Party Agent to the Agent from time to time.

“Secured Bank Product Provider” means (a) Bank of America or any of its Affiliates and (b) any other Lender or Affiliate of a Lender that is providing a Bank Product, provided that such other provider and a Loan Party Agent shall deliver a written notice to the Agent, in form and substance reasonably satisfactory to the Agent, by, as to each such Bank Product in existence on the Closing Date (including any Bank Product that was entered into on or prior to the Closing Date), thirty (30) Business Days after the Closing Date, and as to all other such Bank Products, thirty (30) Business Days (or such later time as the Agent may agree in its reasonable discretion) following the later of the creation of the Bank Product or such Secured Bank Product Provider (or its Affiliate) becoming a Lender hereunder, (i) reasonably specifying the key economic terms of the Bank Product and requesting that such Bank Product Debt thereunder be treated as Secured Bank Product Obligations, (ii) setting forth the amount of the related Secured Bank Product Obligations (and, if all or any portion of such Secured Bank Product Obligations are to constitute Qualified Secured Bank Product Obligations, the amount of such Qualified Secured Bank Product Obligations) to be secured by the Collateral which amounts may be revised from time to time by written notice to Agent from such provider and such Loan Party Agent, and (iii) if such provider is not a Lender, agreeing to be bound by Section 12.14.

“Secured Obligations” means Obligations and Secured Bank Product Obligations (other than Excluded Swap Obligations), including in each case those under all Loan Documents.

“Secured Parties” means Dutch Kraton Facility Secured Parties, U.S. Facility Secured Parties and Secured Bank Product Providers.

“Securities Account Control Agreement” means the securities account control agreements (whether in the form of an agreement, notice and acknowledgment or like instrument), in form and substance reasonably satisfactory to the Agent and the applicable Loan Party and, if required and customary under the laws of the jurisdiction of the securities account, executed by each financial institution maintaining a Securities Account for such Loan Party, in favor of the Agent or a Security Trustee.

“Securities Account” has the meaning set forth in Article 8 of the UCC.

“Security Documents” means this Agreement, the Guarantees, the Foreign Security Agreements, the Commodity Account Control Agreements, the Deposit Account Control Agreements, the Securities Account Control Agreements, the Mortgages, and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Secured Obligations.

“Security Trustee” means the Dutch Kraton Security Trustee, and/or any other security trustee appointed by the Agent from time to time, as the context requires.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Senior Notes” means the 2025 Senior Notes and the 2026 Senior Notes.

“Senior Notes Documents” means the Senior Notes Indentures and each other material document, instrument or material agreement which Parent, any Loan Party or any of their Subsidiaries is or may hereafter become a party pertaining to the Senior Notes.

“Senior Notes Indentures” means the 2025 Senior Notes Indenture and the 2026 Senior Notes Indenture.

“Senior Officer” means the president, the chief executive officer, the chief financial officer, managing director (bestuurder), the treasurer, the controller, the general counsel, the secretary or any other senior officer of a Person designated as such in writing to the Agent by such Person, or in the case of a Dutch Kraton Dutch Domiciled Loan Party, a director; provided, that in the case of any Person with no such authorized officers or directors, “Senior Officer” shall mean any of the foregoing listed individuals of such Person’s general partner, member or stockholder (or equivalent), as applicable, authorized to act on behalf of such Person. Notwithstanding the foregoing, “Senior Officer” also means any member of the Management Board of any of the Dutch Kraton Borrowers and any person who has been appointed an authorized representative by a power of attorney, so long as such power of attorney remains in effect.

“Settlement Report” means a report delivered by the Agent to the Applicable Lenders summarizing the Revolver Loans and, if applicable, participations in LC Obligations of the applicable Borrower Group outstanding as of a given settlement date, allocated to the Applicable Lenders on a Pro Rata basis in accordance with their Commitments.

“SOFR” means, with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark (or a successor administrator) on the Federal Reserve Bank of New York’s website (or any successor source) and, in each case, that has been selected or recommended by the Relevant Governmental Body.

“SOFR-Based Rate” means SOFR or Term SOFR.

“Software” means computer programs, source code, object code and supporting documentation including “software” as such term is defined in Article 9 of the UCC, as well as computer programs that may be construed as included in the definition of Goods.

“Sole Lead Arranger” means Bank of America, N.A.

“Solvent” means as it relates to (a) the Loan Parties, taken as a whole, (i) are adequately capitalized with working capital to pay their debts as they become due and (ii) have not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise), or made any conveyance in connection therewith, in each case, with actual intent to hinder, delay or defraud either present or future creditors of such Persons or any of their Affiliates; and (b) (i) as to any other Person, such Person (1) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (2) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (3) is able to pay all of its debts as they mature or fall due in the normal course of business; (4) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (5) is not “insolvent” within the meaning of Section 101(32) of the U.S. Bankruptcy Code; and (6) has not incurred (by way of

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

assumption or otherwise) any obligations or liabilities (contingent or otherwise) or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates, (ii) as to any other Person incorporated or organized under the laws of the Netherlands, (1) is able to pay all of its debts as they mature or fall due in the normal course of business; and (2) is not in a situation that it has ceased to pay within the meaning of section 1 paragraph 1 of the Dutch Bankruptcy Law. “Fair salable value” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably expected to become an actual or matured liability. For the purposes of the foregoing, Debt shall be deemed due as of its stated maturity date unless and until such maturity is accelerated.

“Specified Disposition” means any disposition of all or substantially all of the assets or Equity Interests of any Restricted Subsidiary of Parent or any division, business unit, product line or line of business of such Restricted Subsidiary or Parent.

“Specified Transaction” means (a) any Specified Disposition, (b) any Permitted Acquisition and (c) the incurrence or repayment of any Debt.

“Sterling” and “£” means the lawful currency of the United Kingdom.

“Subordinated Debt” means Debt incurred by a Loan Party or a Restricted Subsidiary that is expressly subordinate and junior in right of payment to Full Payment of all or any portion of Obligations, and is on terms (including maturity, interest, fees, repayment, covenants and subordination) reasonably satisfactory to the Agent.

“Subsidiary” means, with respect to any Person, (a) any corporation more than 50% of whose Equity Interests of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time Equity Interests of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries has more than a 50% equity interest at the time. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a direct or indirect Subsidiary of Parent.

“Successor Borrower” has the meaning set forth in Section 10.2.8(a).

“Successor Parent” has the meaning set forth in Section 10.2.8(f).

“Super-Majority Lenders” means, at any date of determination thereof, Lenders having Commitments representing more than 66⅔% of the aggregate Commitments at such time; provided, however, that for so long as any Lender shall be a Defaulting Lender, the term “Super-Majority Lenders” shall mean Lenders (excluding such Defaulting Lender) having Commitments representing more than 66⅔% of the aggregate Commitments (excluding the Commitments of each Defaulting Lender) at such time; provided further, however, that if any of the Commitments have been terminated, the term “Super-Majority Lenders” shall be calculated based on the Dollar Equivalent thereof using (a) in lieu of such Lender’s terminated Commitment, the outstanding principal amount of the Revolver Loans by such Lender to, and (if applicable) participation interests in LC Obligations owing by, all Borrowers and (b) in lieu of the aggregate Commitments to all Borrowers, the aggregate outstanding Revolver Loans to, and (if applicable) LC Obligations owing by all Borrowers.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Supplier Financing Transaction” means, any transaction in which the Borrowers may, from time to time, transfer right, title and interest in certain Accounts to a special purpose vehicle (each such special purpose vehicle, a “Kraton SPV”) for an amount equal to the market value of such Accounts, which Kraton SPV will promptly (a) sell to a bank buyer such Accounts and (b) transfer any and all consideration received for such Accounts back to the applicable Borrower, in each case on a non-recourse and true sale basis.

“Supporting Obligations” has the meaning set forth in Article 9 of the UCC.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Swingline Lender” means the Dutch Kraton Swingline Lender and/or the U.S. Swingline Lender, as the context requires.

“Swingline Loan” means a loan made pursuant to Section 2.1.8.

“TARGET Day” means any day on which the Trans-European Automated Realtime Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Agent to be a suitable replacement) is open for the settlement of payments in Euro.

“Tax Credit” means a credit against, relief or remission for, or refund or repayment of, any Taxes.

“Tax Deduction” means a deduction or withholding for or on account of Taxes (other than Excluded Taxes) from a payment under any Loan Document.

“Tax Payment” means either the increase in a payment made by a Loan Party to any Recipient under Section 5.8.2(a) or any payment made by a Loan Party to any Recipient under Section 5.8.2(b) or Section 5.8.2(d).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other similar charges imposed in the nature of taxation by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Agent” has the meaning set forth in the ABL Intercreditor Agreement.

“Term Debt” means all Borrowed Money owed to the Term Loan Lenders.

“Term Debt Documents” means (i) the Term Loan Agreement and (ii) each of the other material agreements, instruments, and other material documents with respect to the Term Debt, all as in effect on the date hereof or as may be amended, modified or supplemented from time to time in accordance with the ABL Intercreditor Agreement.

“Term Debt Priority Collateral” means the “Fixed Asset Priority Collateral” as defined in the ABL Intercreditor Agreement.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“Term Debt Priority Collateral Release Date” has the meaning set forth in Section 12.3.1.

“Term Loan Agreement” means that certain Credit and Guarantee Agreement, dated as of January 6, 2016, by and among KPLLC and Kraton Polymers Holdings, as borrowers, Parent and certain subsidiaries of Parent, as guarantors, Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, Nomura Securities International, Inc. and Deutsche Bank Securities Inc., as syndication agents, and the lenders party thereto in their capacities as lenders thereunder, as the same may be amended, restated, modified, supplemented, extended, renewed, refunded, replaced or refinanced from time to time in one or more agreements (in each case with the same or new lenders, institutional investors or agents), including any agreement extending the maturity thereof or otherwise restructuring all or any portion of the Debt thereunder or increasing the amount loaned or issued thereunder or altering the maturity thereof, in each case as and to the extent permitted by this Agreement and the ABL Intercreditor Agreement.

“Term Loan Lenders” means each “Lender” as defined in the Term Loan Agreement.

“Term SOFR” means the forward-looking term rate for any period that is approximately (as determined by the Agent) as long as any of the Interest Period options set forth in the definition of “Interest Period” and that is based on SOFR and that has been selected or recommended by the Relevant Governmental Body, in each case as published on an information service as selected by the Agent from time to time in its reasonable discretion.

“Test Period” means, for any determination under this Agreement, the most recent period of four consecutive Fiscal Quarters of Parent ended on or prior to such time (taken as one accounting period) in respect of which financial statements for each quarter or Fiscal Year in such period have been or are required to be delivered. A Test Period may be designated by reference to the last day thereof (i.e., the “June 30, 2019 Test Period” refers to the period of four consecutive Fiscal Quarters of the Parent ended June 30, 2019, and a Test Period shall be deemed to end on the last day thereof).

“Third Party Bank Product Debt” means Bank Product Debt owing by a Borrower or a Restricted Subsidiary to a Person that is neither a Lender nor an Affiliate of a Lender.

“Total Borrowing Base” means the sum of the Dutch Kraton Borrowing Base and the U.S. Borrowing Base.

“Total Debt” means, as of any date of determination, (a) the aggregate principal amount of Debt for Borrowed Money of the Parent and the Restricted Subsidiaries outstanding on such date excluding Contingent Obligations, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of such Debt resulting from the application of purchase accounting in connection with any Permitted Acquisition), minus (b) the aggregate amount of unrestricted cash and Cash Equivalents held in accounts on the consolidated balance sheet of the Parent and the Restricted Subsidiaries.

“Total Line Cap” means, as of any date of determination, the lesser of (i) the Commitments as of such date of determination and (ii) the Total Borrowing Base as of such date of determination.

“Total Revolver Exposure” means, as of any date of determination, the sum of the Dutch Kraton Revolver Exposure and the U.S. Revolver Exposure on such date of determination.

“Trademarks” means, with respect to any Loan Party, all of such Loan Party’s right, title, and interest in and to the following: (i) all trademarks (including service marks), trade names, trade dress, and

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

logos, slogans and other similar indicia of origin and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (ii) all renewals of the foregoing; (iii) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (iv) all rights to sue for past, present, and future infringements of the foregoing; and (v) all domestic rights corresponding to any of the foregoing.

“Trade Secrets” means, with respect to any Loan Party, all of such Loan Party’s right, title and interest in and to the following: (i) trade secrets or other confidential information, including unpatented inventions, invention disclosures, engineering or other data, production procedures, know-how, financial data, customer lists, supplier lists, business and marketing plans, processes, schematics, algorithms, techniques, analyses, proposals, source code, and data collections; (iii) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims and payments for past and future infringements thereof; (iii) all rights to sue for past, present and future infringements of the foregoing; and (iv) all rights corresponding to any of the foregoing.

“Transaction Costs” means, the fees, costs and expenses payable by the Loan Parties in connection with the Transactions, including any premiums in connection therewith and amounts payable to the Agent and the Lenders.

“Transactions” means, collectively, (a) the execution, delivery and performance by the Loan Parties of the Loan Documents to which they are a party and the making of the Borrowings hereunder, (b) the repayment of all amounts due or outstanding under or in respect of the Existing Credit Agreement and (c) the payment of all related fees and expenses.

“Transfer” has the meaning set forth in Section 2.1.6(d).

“Transfer Date” has the meaning set forth in Section 2.1.6(d).

“Transferee” means any actual or potential Eligible Assignee, Participant or other Person acquiring an interest in any Obligations.

“Treasury Management Services” means any services provided from time to time by any Lender or any of its Affiliates to Parent or any of its Restricted Subsidiaries in connection with operating, collections, payroll, trust or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.

“Type” means any type of a Loan (i.e., Base Rate Loan, LIBOR Loan or European Base Rate Loan, etc.) and which shall be either a LIBOR Loan or a Base Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other U.S. state or territory govern the creation, perfection, priority or enforcement of any Lien, the Uniform Commercial Code of such state or territory.

“UK” or “United Kingdom” means the United Kingdom of Great Britain and Northern Ireland.

“UK Debenture” means that certain Debenture in respect of the assets of the Initial Dutch Kraton Borrower located in the UK, governed by English law, dated April 29, 2013, among the Initial Dutch Kraton Borrower and the Dutch Kraton Security Trustee, as amended, restated, supplemented or otherwise modified from time to time.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

“UK Security Agreements” means the UK Debenture and each other debenture or security agreement governed by the laws of the United Kingdom among any Dutch Kraton Dutch Domiciled Loan Party and the Agent or the Dutch Kraton Security Trustee.

“Unrestricted Subsidiary” means (a) each Subsidiary of the Parent that has been designated following the Closing Date as an Unrestricted Subsidiary in compliance with Section 10.1.17 and (b) each Subsidiary of a Subsidiary specified in clause (a) of this definition.

“U.S.” means the United States of America.

“U.S. Assignment of Claims Act” means the Assignment of Claims Act of 1940, 31 U.S.C. § 3727, 41 U.S.C. § 15, as amended.

“U.S. Availability” means, as of any such date of determination, (a) the lesser of (i) the U.S. Revolver Commitments minus all U.S. Availability Reserves and (ii) the U.S. Borrowing Base, minus, in each case (b) the sum of (i) the principal balance of all U.S. Revolver Loan, and (ii) all U.S. LC Obligations.

“U.S. Availability Reserves” means the sum (without duplication) of (a) the U.S. Rent Reserve; (b) the U.S. Bank Product Reserve; (c) the U.S. Inventory Reserve; (d) the U.S. Dilution Reserve, (e) the Dutch Kraton Overadvance Loan Balance, (f) the Dutch Kraton Allocated U.S. Availability Reserve and (g) such additional reserves, in such amounts and with respect to such matters, as the Agent may establish in its Permitted Discretion and in accordance with the terms hereof.

“U.S. Bank Product Reserve” means, at any time with respect to Secured Bank Product Obligation for the accounts of the U.S. Domiciled Loan Parties and their Subsidiaries, an amount equal to the sum of (a) the maximum amount of the then outstanding Qualified Secured Bank Product Obligations for the accounts of the U.S. Domiciled Loan Parties and their Subsidiaries owing (i) to Bank of America and its Affiliates as determined by the Agent in its Permitted Discretion and (ii) to any other Secured Bank Product Provider as set forth in the notice delivered by such Secured Bank Product Provider providing such Bank Product and the North American Loan Party Agent to the Agent in accordance with the definition of Secured Bank Product Provider and (b) with respect to any other Secured Bank Product Obligations for the account of the U.S. Domiciled Loan Parties and their Subsidiaries, reserves established by the Agent from time to time in its Permitted Discretion to reflect the reasonably anticipated liabilities in respect for the account of the then outstanding Secured Bank Product Obligations of the U.S. Domiciled Loan Parties and their Subsidiaries.

“U.S. Bankruptcy Code” means Title 11 of the United States Code.

“U.S. Barge In-Transit Inventory” means, at any date of determination, all Inventory of Kraton Polymers which is in-transit by river on barges from the location of the relevant third-party seller within the United States to Kraton Polymers’s plant located in Belpre, Ohio; provided, that at any date of determination, the amount of U.S. Barge In-Transit Inventory which may be included in U.S. Eligible Inventory may not exceed $15,000,000.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“U.S. Base Rate” means, for any day, a per annum rate equal to the greatest of (a) the U.S. Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c) Dollar LIBOR for a 30 day interest period as determined on such day, plus 1.0%. In no event shall the U.S. Base Rate be less than two percent (2.00%).

“U.S. Base Rate Loan” means any Loan that bears interest based on the U.S. Base Rate.

“U.S. Borrowers” means (a) Kraton Polymers, (b) Kraton Chemical and (c) each other U.S. Subsidiary that, after the date hereof, has executed a supplement or joinder to this Agreement in accordance with Section 10.1.9 specifying that it wishes to be a U.S. Borrower.

“U.S. Borrowing Base” means, at any time, an amount equal to the sum (expressed in Dollars) of, without duplication:

(a)            the Value of U.S. Eligible Accounts (excluding Investment Grade Receivables) multiplied by the advance rate of 85%, plus

(b)             the lesser of (i) 70% of the Value of U.S. Eligible Inventory composed of finished goods and (ii) 85% of the NOLV Percentage of the Value of U.S. Eligible Inventory composed of finished goods, plus

(c)             the lesser of (i) 70% of the Value of U.S. Eligible Inventory not composed of finished goods and (ii) 85% of the NOLV Percentage of the Value of U.S. Eligible Inventory not composed of finished goods, plus

(d)             the Value of U.S. Eligible Accounts constituting Investment Grade Receivables multiplied by the advance rate of 90%, minus

(e)             all U.S. Availability Reserves, any change therein to become effective (i) immediately upon or (ii) three (3) Business Days after, in the case of U.S. Availability Reserves which would cause the aggregate amount of the U.S. Revolver Loans at such time to exceed the lesser of the U.S. Revolver Commitments and the U.S. Borrowing Base then in effect, notification thereof to the North American Loan Party Agent by the Agent (provided that the Dutch Kraton Allocated U.S. Availability Reserve will be effective immediately without notice to North American Loan Party Agent); provided that, the Agent shall have provided the North American Loan Party Agent at least three (3) Business Days’ prior written notice of any such establishment or increase; provided further that, the Agent may only establish or increase a U.S. Availability Reserve after the date hereof based on an event, condition or other circumstance arising after the Closing Date or based on facts not known to the Agent as of the Closing Date. The amount of any U.S. Availability Reserve established by the Agent shall have a reasonable relationship to the event, condition, other circumstance or new fact that is the basis for the U.S. Availability Reserve. Upon delivery of such notice, the Agent shall be available to discuss the proposed U.S. Availability Reserve or increase, and the applicable Borrowers may take such action as may be required so that the event, condition, circumstance or new fact that is the basis for such U.S. Availability Reserve or increase no longer exists, in a manner and to the extent reasonably satisfactory to the Agent in the exercise of its Permitted Discretion. In no event shall such notice and opportunity limit the right of the Agent to establish or change such U.S. Availability Reserve, unless the Agent shall have determined in its Permitted Discretion that the event, condition, other circumstance or new fact that is the basis for such new U.S. Availability Reserve or such change no longer exists or has otherwise been adequately

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

addressed by the applicable Borrower. Notwithstanding anything herein to the contrary U.S. Availability Reserves shall not duplicate amounts already deducted in or by other Availability Reserves or in connection with criteria already used to calculate the NOLV Percentage of U.S. Eligible Inventory.

The U.S. Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate theretofore delivered to the Agent with such adjustments as the Agent deems appropriate in its Permitted Discretion to assure that the U.S. Borrowing Base is calculated in accordance with the terms of this Agreement.

“U.S. Cash Collateral Account” means a bank account established by the Agent at Bank of America in connection with the U.S. Revolver Commitments that is (a) segregated, (b) for the benefit of the U.S. Facility Secured Parties, (c) subject to the Agent’s Liens securing the Secured Obligations and (d) under the exclusive control of Agent.

“U.S. Dilution Reserve” means, with respect to an Applicable U.S. Borrower, without duplication of any other reserves or items that are otherwise addressed or excluded through eligibility criteria, the aggregate amount of reserves, as established by the Agent from time to time, in an amount equal to the sum of (x) the Value of the U.S. Eligible Accounts (other than Investment Grade Receivables) multiplied by 1% for each percentage point (or portion thereof) that the U.S. Borrowers’ Dilution Percent with respect thereto exceeds 5%, plus (y) the Value of the U.S. Eligible Accounts constituting Investment Grade Receivables multiplied by 1% for each percentage point (or portion thereof) that the U.S. Borrowers’ Dilution Percent with respect thereto exceeds 2.5%.

“U.S. Domiciled Loan Party” means any U.S. Borrower and each U.S. Facility Guarantor, and “U.S. Domiciled Loan Parties” means all such Persons, collectively.

“U.S. Dominion Account” means each special deposit account established by the U.S. Domiciled Loan Parties, without duplication of any other reserves or items that are otherwise addressed or excluded through eligibility criteria, at Bank of America or another bank reasonably acceptable to the Agent, over which the Agent has control and over which, upon the commencement of an activation period (which the Agent may trigger after a Cash Dominion Event hereunder), the Agent may exercise exclusive control, which deposit account is a collection account and not a disbursement account.

“U.S. Eligible Accounts” means, at any time, the Accounts of the U.S. Borrowers at such date except any Account:

(a)            which is not subject to a duly perfected and enforceable security interest in favor of the Agent under U.S. law;

(b)             which is subject to any Lien (including Liens permitted by Section 10.2.2) other than (i) a Lien in favor of the Agent, (ii) a Lien permitted under Section 10.2.1(i) or (iii) a Lien permitted under Section 10.2.2(j), (m) or (hh) which does not have priority over the Lien in favor of the Agent;

(c)             (i) for each invoice with an original due date not later than thirty (30) days after the date thereof, which is unpaid for (A) more than sixty (60) days after the original due date or (B) unless otherwise agreed in writing by the Agent in its discretion, more than ninety (90) days after the original invoice date; (ii) for each invoice with an original due date later than thirty (30) days after the date thereof but not later than sixty (60) days after the date thereof, which is unpaid for (A) more than sixty (60) days after the original due date or (B) unless otherwise agreed in writing by the Agent in its discretion, more than 120 days after the original invoice date; (iii) for each invoice with an original due date later than sixty (60) days after the date thereof but not later than ninety (90) days after the date thereof, which is unpaid for (A) more than sixty (60) days after the original due date or (B) unless otherwise agreed in writing by the Agent in its discretion, more than 150 days after the original invoice date;

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(d)             which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible pursuant to clause (c) above (in calculating the ineligible portion of Accounts under clause (c) for purposes of this clause (d), credit balances that are unapplied for more than ninety (90) days shall not reduce the amount of the Accounts ineligible thereunder); provided that Accounts that are determined not to be U.S. Eligible Accounts solely as a result of the provisions of clause (e) below, shall be excluded in calculating such percentage;

(e)            which is owing by an Account Debtor to the extent the aggregate amount of otherwise Eligible Accounts owing from such Account Debtor and its Affiliates to the Borrowers exceeds 20% of the aggregate Eligible Accounts (or such higher percentage as the Agent may establish for the Account Debtor from time to time), in each case, only to the extent of such excess;

(f)              with respect to which any covenant, representation, or warranty relating to such Account contained in this Agreement has been materially breached or is not true in any material respect, respectively (or with respect to such covenant, representation or warranty qualified by materiality, after giving effect to such qualification in all respects);

(g)            which (i) does not arise from the sale of goods or performance of services in the Ordinary Course of Business, (ii) is not evidenced by an invoice, or other similar documentation reasonably satisfactory to the Agent, which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) represents contract retention, (v) is contingent upon such U.S. Borrower’s completion of any further performance, (vi) represents a cash or credit card sale, (vii) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment which is billed by the Applicable U.S. Borrower, as consignor, prior to the actual sale to the end user, cash-on-delivery or any other repurchase or return basis; provided that, regardless of the foregoing, up to $15,000,000 at any time outstanding of Accounts representing bill-and-hold transactions (documented to the reasonable satisfaction of Agent, in its Permitted Discretion) will be deemed U.S. Eligible Accounts for the period beginning October 1 of each calendar year and ending on April 30 of the immediately following calendar year; or (viii) represents interest or fees; provided that ineligibility as a result of this clause (viii) shall be limited to the amount of such interest and fees;

(h)             for which the goods giving rise to such Account have not been loaded on a carrier for shipment to the Account Debtor (other than goods for which title has passed to the Account Debtor pursuant to bill-and-hold transactions described in the proviso to subclause (vii) of clause (g) above in the definition of U.S. Eligible Accounts) or for which the services giving rise to such Account have not been performed by such U.S. Borrower;

(i)              with respect to which any check or other instrument of payment has been returned uncollected for any reason and such Account is or should be written off of Parent’s books as uncollectible, consistent with Parent’s collection policies;

(j)              which is owed by an Account Debtor in respect of which an Insolvency Proceeding has been commenced or which is otherwise a debtor or a debtor in possession under any bankruptcy law or any other federal, state or foreign (including any province or territory) receivership, insolvency relief or other law or laws for the relief of debtors, including the U.S. Bankruptcy Code, unless the payment of Accounts from such Account Debtor is secured by assets of, or guaranteed by, in either case in a manner reasonably satisfactory to the Agent, a Person that is reasonably acceptable to the Agent or, if the Account from such Account Debtor arises subsequent to a decree or order for relief with respect to such Account Debtor under the U.S. Bankruptcy Code, as now or hereafter in effect, the Agent shall have reasonably determined that the timely payment and collection of such Account will not be impaired;

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(k)             which is owed by an Account Debtor which has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs or has declared itself or has been declared by a court of competent jurisdiction, to be, not Solvent;

(l)              which is owed by an Account Debtor which is not organized or incorporated under the Applicable Law of an Eligible Account Debtor Jurisdiction unless (i) the Agent determines to include such Account Debtor in its Permitted Discretion or (ii) such Account is backed by a letter of credit or other credit support reasonably acceptable to the Agent; provided that, notwithstanding the foregoing, the amount of Accounts made eligible by Agent as a result of subclause (i) of this clause (l) shall not exceed $20,000,000 in the aggregate at any time;

(m)           which is owed in any currency other than an Eligible Account Currency;

(n)             which is owed by any Governmental Authority, unless (i) the Account Debtor is the United States or any department, agency or instrumentality thereof, and the Account has been assigned to the Agent in compliance with the U.S. Assignment of Claims Act, and any other steps necessary to perfect the Lien of the Agent in such Account have been complied with to the Agent’s reasonable satisfaction, (ii) the Account Debtor is the government of Canada or a province or territory thereof, and the Account has been assigned to the Agent in compliance with the Financial Administration Act (or similar Applicable Law of such province or territory), and any other steps necessary to perfect the Lien of the Agent in such Account have been complied with to the Agent’s reasonable satisfaction, or (iii) such Account is backed by a letter of credit reasonably acceptable to the Agent and which is in the possession of the Agent or is otherwise acceptable to the Agent in its Permitted Discretion;

(o)             which is owed by any Affiliate, employee, director, or officer of any Loan Party;

(p)            which is owed by an Account Debtor or any Affiliate of such Account Debtor which is the holder of Debt issued or incurred by any Loan Party; provided that any such Account shall only be ineligible as to that portion of such Account which is less than or equal to the amount owed by the Loan Party to such Person;

(q)             except as provided in clause (t) below, which is subject to any counterclaim, deduction, defense, setoff or material dispute, but only to the extent of the amount of such counterclaim, deduction, defense, setoff or dispute, unless (i) the Agent, in its Permitted Discretion, has established appropriate U.S. Availability Reserves and determines to include such Account as a U.S. Eligible Account or (ii) such Account Debtor has entered into an agreement reasonably acceptable to the Agent to waive such rights;

(r)              which is evidenced by any promissory note, Chattel Paper, or Instrument;

(s)            which is owed by an Account Debtor located in any State of the U.S. to the extent such jurisdiction requires, as a condition to access to the courts of such jurisdiction, that a creditor qualify to transact business, file a business activities report or other report or form, or take one or more other actions, unless such U.S. Borrower has so qualified, filed such reports or forms, or taken such actions (and, in each case, paid any required fees or other charges), except to the extent such U.S. Borrower may qualify subsequently as a foreign entity authorized to transact business in such state or jurisdiction and gain access to such courts, without incurring any cost or penalty reasonably viewed by the Agent to be material in amount, and such later qualification cures any access to such courts to enforce payment of such Account;

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(t)              with respect to which such U.S. Borrower has made any agreement with the Account Debtor for any reduction thereof, but only to the extent of such reduction, other than discounts and adjustments given in the Ordinary Course of Business; or

(u)             which Account has been transferred pursuant to a Supplier Financing Transaction.

Subject to Section 14.1.1 and the definition of U.S. Borrowing Base, the Agent may modify the foregoing criteria and the application of the foregoing criteria to any specific Account and may determine an Account is ineligible, in each case, in its Permitted Discretion; provided that, the Agent shall have provided the North American Loan Party Agent at least three (3) Business Days’ prior written notice of any such modification, application or determination; provided further, that upon delivery of such notice, the Agent shall be available to discuss the proposed modification, application or determination. For the avoidance of doubt, it is acknowledged and agreed that any calculation of ineligibility made pursuant to more than one clause above shall be made without duplication.

“U.S. Eligible In-Transit Inventory” means, at any date of determination, the U.S. Eligible In-Transit Inventory of Kraton Polymers plus the U.S. Eligible In-Transit Inventory of Kraton Chemical.

“U.S. Eligible In-Transit Inventory of Kraton Chemical” means, at any date of determination thereof, (a) the lesser of (i) $5,000,000 and (ii) the aggregate amount of all Inventory owned by Kraton Chemical at such date that would be U.S. Eligible Inventory if it were not in transit from a foreign location to a location within the United States (the “Kraton Chemical In-Bound In-Transit Inventory”) and (b) the lesser of (i) $20,000,000 and (ii) aggregate amount of all Inventory owned by Kraton Chemical at such date that would be U.S. Eligible Inventory if it were not in transit from a location of Kraton Chemical within the United States to a location within the Netherlands, Belgium, the U.K., France or Germany (“Kraton Chemical Out-Bound In-Transit Inventory”). Without limiting the foregoing, no Inventory shall be U.S. Eligible In-Transit Inventory of Kraton Chemical unless it meets, and then only for so long as it continues to meet, the Agent’s standard requirements for including in-transit Inventory in Eligible Inventory, which include, among other things, the following:

(a)            title to the Inventory is in Kraton Chemical and the Inventory is owned by Kraton Chemical (except that in the cases of Kraton Chemical In-Bound In-Transit Inventory that is in transit intercompany and Kraton Chemical Out-Bound In-Transit Inventory, title to the Inventory may be in Kraton Chemical or a Dutch Kraton Borrower and the Inventory may be owned by Kraton Chemical or a Dutch Kraton Borrower);

(b)             in the case of Kraton Chemical In-Bound In-Transit Inventory, the Inventory is in transit to Kraton Chemical to a location within in the United States;

(c)             in the case of Kraton Chemical Out-Bound In-Transit Inventory, the Inventory is in transit from Kraton Chemical to a location in the Netherlands, Belgium, the U.K., France or Germany;

(d)             the Inventory is fully insured for not less than 100% of the invoice cost thereof, and the Agent shall have received evidence of satisfactory casualty insurance naming the Agent as loss payee and otherwise covering such risks as the Agent may reasonably request;

(e)             the Inventory is subject to a first priority security interest in and Lien upon such goods in favor of the Agent (except for any possessory Lien upon such goods in the possession of a freight carrier or shipping company securing only the freight charges for the transportation of such goods to the applicable destination, and the Agent shall have established U.S. Availability Reserves equal to the amount of such lien or the Agent has received a Lien waiver in form and substance reasonably satisfactory to it with respect to such Lien);

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(f)              in the case of Kraton Chemical In-Bound In-Transit Inventory that is not in transit intercompany, the Inventory is evidenced by and deliverable pursuant to a tangible bill of lading of a type and in a form acceptable to the Agent in its Permitted Discretion that has been issued by a common carrier acceptable to the Agent, and such bill of lading shall be in the possession of either the Agent or a freight forwarder or customs broker in each case acting for the Agent under the terms of an Imported Goods Agreement which has been delivered to the Agent; and

(g)            in the cases of Kraton Chemical In-Bound In-Transit Inventory that is in transit intercompany and Kraton Chemical Out-Bound In-Transit Inventory, the Inventory is evidenced by and deliverable pursuant to a tangible bill of lading or such other documentation of a type and in a form acceptable to the Agent in its Permitted Discretion that has been issued by a common carrier acceptable to the Agent, and if a bill of lading such bill of lading shall be in the possession of either the Agent or a freight forwarder or customs broker in each case acting for the Agent under the terms of an Imported Goods Agreement which has been delivered to the Agent.

Notwithstanding the foregoing clauses (e) and (g) above, Kraton Chemical Out-Bound In-Transit Inventory which is in-transit between Borrowers and would otherwise constitute U.S. Eligible In-Transit Inventory of Kraton Chemical except that it is not evidenced by and deliverable pursuant to a Permitted Bill of Lading shall for the purposes of this Agreement be considered U.S. Eligible In-Transit Inventory of Kraton Chemical; provided, however, if at any time (x) the amount of the U.S. Availability is less than $50,000,000 or (y) the sum of the U.S. Availability and the Dutch Kraton Availability is less than $75,000,000, then such Kraton Chemical Out-Bound In-Transit Inventory shall no longer constitute U.S. Eligible In-Transit Inventory of Kraton Chemical unless such Kraton Chemical Out-Bound In-Transit Inventory otherwise constitutes U.S. Eligible In-Transit Inventory of Kraton Chemical pursuant to the express provisions of this definition.

“U.S. Eligible In-Transit Inventory of Kraton Polymers” means, at any date of determination thereof, (a) the lesser of (i) $30,000,000 and (ii) the aggregate amount of all Inventory owned by Kraton Polymers at such date that would be U.S. Eligible Inventory if it were not in transit from a foreign location to a location within the United States (the “Kraton Polymers In-Bound In-Transit Inventory”) and (b) the lesser of (i) $15,000,000 and (ii) aggregate amount of all Inventory owned by Kraton Polymers at such date that would be U.S. Eligible Inventory if it were not in transit from a location of Kraton Polymers within the United States to a location within the Netherlands, Belgium, the U.K., France or Germany (“Kraton Polymers Out-Bound In-Transit Inventory”). Without limiting the foregoing, no Inventory shall be U.S. Eligible In-Transit Inventory of Kraton Polymers unless it meets, and then only for so long as it continues to meet, the Agent’s standard requirements for including in-transit Inventory in Eligible Inventory, which include, among other things, the following:

(a)             title to the Inventory is in Kraton Polymers and the Inventory is owned by Kraton Polymers (except that in the cases of Kraton Polymers In-Bound In-Transit Inventory that is in transit intercompany and Kraton Polymers Out-Bound In-Transit Inventory, title to the Inventory may be in Kraton Polymers or a Dutch Kraton Borrower and the Inventory may be owned by Kraton Polymers or a Dutch Kraton Borrower);

(b)             in the case of Kraton Polymers In-Bound In-Transit Inventory, the Inventory is in transit to Kraton Polymers to a location within in the United States;

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(c)             in the case of Kraton Polymers Out-Bound In-Transit Inventory, the Inventory is in transit from Kraton Polymers to a location in the Netherlands, Belgium, the U.K., France or Germany;

(d)             the Inventory is fully insured for not less than 100% of the invoice cost thereof, and the Agent shall have received evidence of satisfactory casualty insurance naming the Agent as loss payee and otherwise covering such risks as the Agent may reasonably request;

(e)             the Inventory is subject to a first priority security interest in and Lien upon such goods in favor of the Agent (except for any possessory Lien upon such goods in the possession of a freight carrier or shipping company securing only the freight charges for the transportation of such goods to the applicable destination, and the Agent shall have established U.S. Availability Reserves equal to the amount of such lien or the Agent has received a Lien waiver in form and substance reasonably satisfactory to it with respect to such Lien);

(f)              in the case of Kraton Polymers In-Bound In-Transit Inventory that is not in transit intercompany, the Inventory is evidenced by and deliverable pursuant to a tangible bill of lading of a type and in a form acceptable to the Agent in its Permitted Discretion that has been issued by a common carrier acceptable to the Agent, and such bill of lading shall be in the possession of either the Agent or a freight forwarder or customs broker in each case acting for the Agent under the terms of an Imported Goods Agreement which has been delivered to the Agent; and

(g)            in the cases of Kraton Polymers In-Bound In-Transit Inventory that is in transit intercompany and Kraton Polymers Out-Bound In-Transit Inventory, the Inventory is evidenced by and deliverable pursuant to a tangible bill of lading or such other documentation of a type and in a form acceptable to the Agent in its Permitted Discretion that has been issued by a common carrier acceptable to the Agent, and if a bill of lading such bill of lading shall be in the possession of either the Agent or a freight forwarder or customs broker in each case acting for the Agent under the terms of an Imported Goods Agreement which has been delivered to the Agent.

Notwithstanding the foregoing clauses (e) and (g) above, Kraton Polymers Out-Bound In-Transit Inventory which is in-transit between Borrowers and would otherwise constitute U.S. Eligible In-Transit Inventory of Kraton Polymers except that it is not evidenced by and deliverable pursuant to a Permitted Bill of Lading shall for the purposes of this Agreement be considered U.S. Eligible In-Transit Inventory of Kraton Polymers; provided, however, if at any time (x) the amount of the U.S. Availability is less than $50,000,000 or (y) the sum of the U.S. Availability and the Dutch Kraton Availability is less than $75,000,000, then such Kraton Polymers Out-Bound In-Transit Inventory shall no longer constitute U.S. Eligible In-Transit Inventory of Kraton Polymers unless such Kraton Polymers Out-Bound In-Transit Inventory otherwise constitutes U.S. Eligible In-Transit Inventory of Kraton Polymers pursuant to the express provisions of this definition.

“U.S. Eligible Inventory” means, at any date of determination thereof, the aggregate amount of all Inventory owned by U.S. Borrowers at such date except any Inventory:

(a)             which is not subject to a duly perfected security interest in favor of the Agent;

(b)            which is subject to any Lien (including Liens permitted by Section 10.2.2) other than (i) a Lien in favor of the Agent, (ii) a Lien permitted under Section 10.2.2(i), but to the extent it has priority over the Lien of Agent or the applicable Security Trustee, the eligibility of such Inventory shall be reduced by the amount determined by the Agent in its Permitted Discretion; (iii) a Lien permitted under Section 10.2.2(c) or (hh) which does not have priority over the Lien in favor of the Agent, (iv) a Lien permitted under Section 10.2.2(j); provided that clauses (h) and (i) below of this definition of U.S.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Eligible Inventory are satisfied in the case of a Lien of a landlord, bailee, warehouseman or processor in the U.S.; (v) a Lien permitted under Section 10.2.2(o) or (s) which does not have priority over the Lien in favor of the Agent; or (vi) a Lien permitted under Section 10.2.2(v) to the extent of the amount of such payable customs duties secured by such Lien;

(c)             which is, in the Agent’s Permitted Discretion, slow moving (unless the Inventory component of the U.S. Borrowing Base is being determined pursuant to clause (b)(ii) thereof and slow moving Inventory was taken into account in determining the NOLV Percentage), obsolete, unmerchantable, defective, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the Ordinary Course of Business unacceptable due to age, type, category and/or quantity;

(d)             with respect to which any covenant, representation or warranty regarding such Inventory contained in this Agreement has been materially breached or is not true in any material respect;

(e)             which does not conform in all material respects to all standards imposed by any applicable Governmental Authority (except that any standard that is qualified as to “materiality” shall have been conformed to in all material respects);

(f)              which constitutes packaging and shipping material, work in process, manufacturing supplies, display items, returned or repossessed Inventory (other than goods that are undamaged and able to be resold in the Ordinary Course of Business), Inventory held on consignment by the Applicable U.S. Borrower as consignee prior to any title passing to such U.S. Borrower, as buyer, Inventory to be returned to such U.S. Borrower’s suppliers (but not held for resale) or goods which are not of a type held for sale in the Ordinary Course of Business or Inventory which is the subject of a sale on a bill and hold basis other than to the extent (i) such bill and hold sale does not create a U.S. Eligible Account pursuant to clause (g)(v) of the definition of U.S. Eligible Account and (ii) such bill and hold sale would otherwise constitute a U.S. Eligible Account except for the fact that such sale is on a bill and hold basis;

(g)             which is not located in the United States or Canada or is not at a location listed on Schedule 8.5.1 (as updated from time to time in accordance with the provisions hereof) other than (i) Inventory in transit between locations of the U.S. Domiciled Loan Parties; and (ii) U.S. Eligible In-Transit Inventory;

(h)            which is located in any location in the United States or Canada leased by such U.S. Borrower, unless the lessor has delivered to the Agent a Lien Acknowledgment; provided, that the exclusion in this clause (h) shall not apply if such U.S. Borrower has used commercially reasonable efforts to deliver a Lien Acknowledgment to Agent (regardless of whether such Lien Acknowledgment is ultimately obtained by such U.S. Borrower) or if in Canada such Lien Acknowledgment is not customarily delivered or obtained prior to the occurrence and continuance of an Event of Default and (ii) for ninety (90) days after the Closing Date (or such longer period with the prior consent of the Agent (such consent not to be unreasonably withheld));

(i)              which is located in any third party warehouse or is in the possession of a bailee or processor unless (i) such warehouseman, bailee, processor or other Person has delivered to the Agent a Lien Acknowledgment and/or such other documentation as the Agent may reasonably require; provided, that the exclusion in this clause (i) shall not apply (i) if such U.S. Borrower has used commercially reasonable efforts to deliver a Lien Acknowledgment to Agent (regardless of whether such Lien Acknowledgment is ultimately obtained by such U.S. Borrower) or if in Canada such Lien Acknowledgment is not customarily delivered or obtained prior to the occurrence and continuance of an Event of Default and (ii) if such U.S. Borrower is Kraton Chemical, for ninety (90) days after the Closing Date (or such longer period with the prior consent of the Agent (such consent not to be unreasonably withheld));

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(j)              which is evidenced by a Document, except to the extent such Inventory constitutes U.S. Eligible In-Transit Inventory unless delivered to the Agent;

(k)             which is the subject of a consignment by such U.S. Borrower as consignor (except goods held on consignment that the Agent in its Permitted Discretion allows to be U.S. Eligible Inventory);

(l)              [Reserved]; or

(m)            which is located in any location where the aggregate Value at such location is less than $2,000,000.

Subject to Section 14.1.1 and the definition of U.S. Borrowing Base, the Agent may modify the foregoing criteria or the application of the foregoing criteria to specific items of Inventory and may determine Inventory is ineligible, in each case, in its Permitted Discretion; provided that, the Agent shall have provided the North American Loan Party Agent at least three (3) Business Days’ prior written notice of any such modification, application or determination; provided further, that upon delivery of such notice, the Agent shall be available to discuss the proposed modification, application or determination.

Notwithstanding the foregoing clause (g) above, (A) U.S. Barge In-Transit Inventory which otherwise would constitute U.S. Eligible Inventory except that it is not evidenced by and deliverable pursuant to a Permitted Bill of Lading shall for purposes of this Agreement be considered U.S. Eligible Inventory; provided, however, if at any time (x) the amount of the U.S. Availability is less than $50,000,000 or (y) the sum of the U.S. Availability and the Dutch Kraton Availability is less than $75,000,000, such U.S. Barge In-Transit Inventory shall no longer constitute U.S. Eligible Inventory unless such U.S. Barge In-Transit Inventory otherwise constitutes U.S. Eligible Inventory pursuant to the express provisions of this definition; provided, further, that clause (g) of the definition of U.S. Eligible Inventory shall not apply if such Inventory is evidenced by a Permitted Bill of Lading, and (B) U.S. Rail In-Transit Inventory which otherwise would constitute U.S. Eligible Inventory except that it is not evidenced by and deliverable pursuant to a Permitted Bill of Lading shall for purposes of this Agreement be considered U.S. Eligible Inventory; provided, however, if at any time (x) the amount of the U.S. Availability is less than $50,000,000 or (y) the sum of the U.S. Availability and the Dutch Kraton Availability is less than $75,000,000, such U.S. Rail In-Transit Inventory shall no longer constitute U.S. Eligible Inventory unless such U.S. Rail In-Transit Inventory otherwise constitutes U.S. Eligible Inventory pursuant to the express provisions of this definition; provided, further, that clause (g) of the definition of U.S. Eligible Inventory shall not apply if such Inventory is evidenced by a Permitted Bill of Lading.

“U.S. Employee Plan” means any “employee pension benefit plan” (as defined in Section 3(2) of ERISA), that is subject to the provisions of Title IV of ERISA, Section 412 of the Code or Section 302 of ERISA (other than a Multiemployer Plan), and is sponsored or maintained by any Loan Party or any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064 of ERISA, has made contributions at any time during the immediately preceding five plan years.

“U.S. Facility Collateral” means Collateral that now or hereafter secures (or is intended to secure) any of the U.S. Facility Secured Obligations.

“U.S. Facility Guarantor” means Parent, KPLLC, Elastomers, KPCC, AZ Chem Partners I LLC, AZ Chem Partners II LLC, AZ Chem U.S. Holdings Inc., AZ Chem US Inc., AZ Chem Holdings LP, AZ

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Chem Intermediate LP, each U.S. Borrower and each U.S. Subsidiary that, after the date hereof, has executed a supplement or joinder to this Agreement in accordance with Section 10.1.9 specifying that it is a U.S. Facility Guarantor; provided no Excluded Subsidiary (as defined in the Term Loan Agreement) shall be required to become a U.S. Facility Guarantor hereunder.

“U.S. Facility Loan Party” means a U.S. Borrower or a U.S. Facility Guarantor.

“U.S. Facility Obligations” means all Obligations of the U.S. Facility Loan Parties (including, for the avoidance of doubt, the Obligations of the U.S. Domiciled Loan Parties as guarantors of the Foreign Facility Obligations).

“U.S. Facility Secured Obligations” means all Secured Obligations of the U.S. Facility Loan Parties (including, for the avoidance of doubt, the Secured Obligations of the U.S. Domiciled Loan Parties as guarantors of the Foreign Facility Secured Obligations).

“U.S. Facility Secured Parties” means the Agent, any U.S. Fronting Bank, U.S. Lenders and Secured Bank Product Providers of Bank Products for the account of U.S. Domiciled Loan Parties and their Subsidiaries.

“U.S. Fronting Bank” means Bank of America or any Affiliate thereof that agrees to issue U.S. Letters of Credit or, if reasonably acceptable to North American Loan Party Agent, any other U.S. Lender or Affiliate thereof that agrees to issue U.S. Letters of Credit.

“U.S. Fronting Bank Indemnitees” means any U.S. Fronting Bank and its officers, directors, employees, Affiliates and agents.

“U.S. Inventory Reserve” means the aggregate amount of reserves, as established by the Agent from time to time in its Permitted Discretion, to reflect factors that may negatively impact the value of U.S. Eligible Inventory, including, without duplication of eligibility criteria, changes in salability, slow moving, obsolescence, shrinkage, theft, imbalance, change in composition or mix, markdowns and vendor chargebacks.

“U.S. Investment Grade Receivables” means U.S. Eligible Accounts owing from Investment Grade Customers.

“U.S. LC Application” means an application by North American Loan Party Agent on behalf of a U.S. Borrower or any Restricted Subsidiary to a U.S. Fronting Bank for issuance of a U.S. Letter of Credit, in form and substance reasonably satisfactory to such U.S. Fronting Bank.

“U.S. LC Conditions” means the following conditions necessary for issuance of a U.S. Letter of Credit: (a) each of the conditions set forth in Section 6.2 being satisfied or waived; (b) after giving effect to such issuance, total U.S. LC Obligations do not exceed the U.S. Letter of Credit Sublimit and no U.S. Overadvance exists or would result therefrom; (c) after giving effect to such issuance, total U.S. LC Obligations denominated in currencies other than Dollars do not exceed the U.S. Letter of Credit Foreign Currency Sublimit; (d) unless the applicable U.S. Fronting Bank and the Agent otherwise consent, the expiration date of such U.S. Letter of Credit is no more than the lesser of (A) thirty (30) days before the Facility Termination Date and (B) twelve (12) months from issuance with respect to U.S. Letters of Credit other than documentary U.S. Letters of Credit; provided that each standby U.S. Letter of Credit may, upon the request of the applicable U.S. Borrower, include a provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of twelve (12) months or less; (e) the U.S. Letter of Credit and payments thereunder are denominated in Dollars or such other currency as may be

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

agreed to by the applicable U.S. Fronting Bank; (f) the form of the proposed U.S. Letter of Credit is reasonably satisfactory to the Agent and the applicable U.S. Fronting Bank; and (g) the proposed use of the U.S. Letter of Credit is for a lawful purpose.

“U.S. LC Documents” means all documents, instruments and agreements (including U.S. LC Requests and U.S. LC Applications) delivered by North American Loan Party Agent on behalf a U.S. Borrower or a Restricted Subsidiary to a U.S. Fronting Bank or the Agent in connection with issuance, amendment or renewal of, or payment under, any U.S. Letter of Credit.

“U.S. LC Obligations” means the Dollar Equivalent of the sum (without duplication) of (a) all amounts owing for any drawings under U.S. Letters of Credit; (b) the stated amount of all outstanding U.S. Letters of Credit; and (c) all fees and other amounts owing with respect to U.S. Letters of Credit.

“U.S. LC Request” means a request for issuance of a U.S. Letter of Credit, to be provided by North American Loan Party Agent on behalf of a U.S. Borrower to a U.S. Fronting Bank, in form reasonably satisfactory to the Agent and such U.S. Fronting Bank.

“U.S. Lenders” means Bank of America and each other Lender that has provided a U.S. Revolver Commitment.

“U.S. Letter of Credit” means any standby or commercial letter of credit or documentary bankers’ acceptances, in each case, issued by a U.S. Fronting Bank for the account of a U.S. Borrower or any Restricted Subsidiary, whether in existence on the Closing Date or issued on or after the Closing Date.

“U.S. Letter of Credit Foreign Currency Sublimit” means $15,000,000.

“U.S. Letter of Credit Sublimit” means $30,000,000.

“U.S. Line Cap” means, as of any date of determination, the lesser of (i) the U.S. Revolver Commitments as of such date of determination and (ii) the U.S. Borrowing Base as of such date of determination.

“U.S. Overadvance” has the meaning set forth in Section 2.1.5(b).

“U.S. Overadvance Loan” means a U.S. Base Rate Loan made to a U.S. Borrower when a U.S. Overadvance exists or is caused by the funding thereof.

“U.S. Past Due Rent” has the meaning set forth in the definition “U.S. Rent Reserve”.

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Prime Rate” means the rate of interest announced by Bank of America from time to time as its prime rate. Such rate is set by Bank of America on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“U.S. Protective Advances” has the meaning set forth in Section 2.1.6(b).

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

“U.S. Rail In-Transit Inventory” means, at any date of determination, all Inventory of Kraton Chemical and Kraton Polymers which is in-transit within the United States by rail or in-transit from the province of Ontario, Canada, into the United States by rail, in each case from the location of the relevant third party seller within the United States or the province of Ontario, Canada, to any of the plants or distribution centers of Kraton Chemical or Kraton Polymers located within the United States; provided, that at any date of determination, the amount of U.S. Rail In-Transit Inventory which may be included in U.S. Eligible Inventory may not exceed $17,000,000.

“U.S. Reimbursement Date” has the meaning set forth in Section 2.3.2(a).

“U.S. Rent Reserve” means the aggregate of (a) all past due rent and other past due charges owing by any U.S. Borrower to any landlord, bailee, warehouseman or other Person who possesses any U.S. Facility Collateral or could assert a Lien on any U.S. Facility Collateral (such past due amount, the “U.S. Past Due Rent”); plus (b) a reserve in an amount equal to at least three (3) months’ rent and other charges that could be payable to any such Person, unless such Person has executed a Lien Acknowledgment.

“U.S. Revolver Commitment” means for any U.S. Lender, its obligation to make U.S. Revolver Loans and to issue U.S. Letters of Credit, in the case of any U.S. Fronting Bank, or participate in U.S. LC Obligations, in the case of the other U.S. Lenders, to the U.S. Borrowers up to the maximum principal amount, in each case, shown on Schedule 2.1.1(b), or as hereafter determined pursuant to each Assignment and Acceptance to which it is a party, as such U.S. Revolver Commitment may be adjusted from time to time in accordance with the provisions of Section 2.1.4, 2.1.7 or 11.2. “U.S. Revolver Commitments” means the aggregate amount of such commitments of all U.S. Lenders.

“U.S. Revolver Commitment Increase” has the meaning set forth in Section 2.1.7(b).

“U.S. Revolver Commitment Termination Date” means the earliest of (a) the Facility Termination Date, (b) the date on which the North American Loan Party Agent terminates or reduces to zero the U.S. Revolver Commitments pursuant to Section 2.1.4, and (c) the date on which the U.S. Revolver Commitments are terminated pursuant to Section 11.2.

“U.S. Revolver Exposure” means, on any date, an amount equal to the sum of the (a) U.S. Revolver Loans outstanding on such date and (b) U.S. LC Obligations on such date.

“U.S. Revolver Loan” means a Revolver Loan made by a U.S. Lender to a U.S. Borrower pursuant to Section 2.1.1(b) which Loan shall be denominated in Dollars and shall be either a U.S. Base Rate Loan or a LIBOR Loan, in each case as selected by North American Loan Party Agent, and including any U.S. Swingline Loan, U.S. Overadvance Loan or U.S. Protective Advance.

“U.S. Revolver Notes” means the promissory notes, if any, executed by U.S. Borrowers in favor of each U.S. Lender to evidence the U.S. Revolver Loans funded from time to time by such U.S. Lender, which shall be substantially in the form of Exhibit C-1 to this Agreement, together with any replacement or successor notes therefor.

“U.S. Subsidiary” means each Subsidiary of Parent that is organized under the laws of the United States, any state of the United States or the District of Columbia.

“U.S. Swingline Lender” means Bank of America or an Affiliate of Bank of America.

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“U.S. Swingline Loan” means a Swingline Loan made by the U.S. Swingline Lender to a U.S. Borrower pursuant to Section 2.1.8(b), which Swingline Loan shall be denominated in Dollars and shall be a U.S. Base Rate Loan.

“U.S. Swingline Sublimit” means 10% of the U.S. Revolver Commitments.

“U.S. Tax Certificate” has the meaning set forth in Section 5.9.2.

“Value” means (a) for Inventory composed of raw materials, its value determined on the basis of the lower of weighted average cost or market and excluding any portion of cost attributable to intercompany profit among Borrowers and their Affiliates; (b) for Inventory composed of finished goods, its value determined on the basis of the lower of weighted average cost or market and excluding any portion of cost attributable to intercompany profit among Borrowers and their Affiliates; and (c) for an Account, its book value.

“VAT” means:

(a)             any Tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added Tax (EC Directive 2006/112); and

(b)             any other Tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such Tax referred to in paragraph (a) above, or imposed elsewhere.

“Withdrawal Liability” means any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Title IV of ERISA.

“Write-Down and Conversion Powers” means (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

1.2.          Accounting Terms. Under the Loan Documents (except as otherwise specified herein), all accounting terms shall be interpreted, all accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis consistent with the most recent audited financial statements of the Loan Parties delivered to the Agent before the Closing Date. In the event that any “Accounting Changes” (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then at the North American Loan Party Agent’s request, the Agent and the Lenders shall enter into negotiations in good faith with such Loan Party Agent in order to amend such provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired result that the criteria for evaluating the financial condition of the Loan Parties shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by the Loan Parties, the Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

had not occurred. Notwithstanding the forgoing or any provision herein to the contrary, any lease that was, or would have been, characterized as (a) an operating lease in accordance with GAAP prior to Parent’s adoption of FASB ASC 842 (regardless of the date on which such lease has been entered into) shall not be a Capital Lease, and any such lease shall be, for all purposes of any Loan Document, treated as though it were reflected on Parent’s consolidated financial statements in the same manner as an operating lease would have been reflected prior to the Parent’s adoption of FASB ASC 842 and (b) a Capital Lease in accordance with GAAP prior to Parent’s adoption of FASB ASC 842 (regardless of the date on which such lease has been entered into) shall not be an operating lease, and any such lease shall be, for all purposes of any Loan Document, treated as though it were reflected on Parent’s consolidated financial statements in the same manner as a Capital Lease would have been reflected prior to the Parent’s adoption of FASB ASC 842. “Accounting Changes” refers to changes in accounting principles required by GAAP.

1.3.          Uniform Commercial Code. As used herein, the following terms are defined in accordance with the UCC in effect in the State of New York from time to time: “Chattel Paper”, “Commercial Tort Claim”, “Lien Creditor”, “Electronic Chattel Paper”, “Equipment”, “Fixture”, “Goods”, “Instrument”, “Investment Property”, “Payment Intangibles”, “Proceeds”, “Tangible Chattel Paper”. In addition, other terms relating to Collateral used and not otherwise defined herein that are defined in the UCC shall have the meanings set forth in the UCC and as the context requires.

1.4.          Certain Matters of Construction. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later specified date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and “include” shall mean “including, without limitation” and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of any Loan Document. All references to (a) laws or statutes include all related rules, regulations, interpretations, amendments and successor provisions; (b) any reference to any Loan Document shall be deemed to include any amendments, restatements, waivers and other modifications, extensions or supplements to, or renewals of, such Loan Document; (c) section means, unless the context otherwise requires, a section of this Agreement; (d) any exhibits or schedules mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are hereby incorporated by reference; (e) any Person includes successors, permitted transferees and permitted assigns of such Person; (f) time of day means time of day in Dallas, Texas (Central Time) unless otherwise specified herein; (g) discretion of the Agent, any Security Trustee, any Fronting Bank or any Lender means the sole and absolute discretion of such Person exercised in a manner consistent with its duties of good faith and fair dealing; or (h) “property” or “asset” includes any real or personal, present or future, tangible or intangible property or asset and any right, interest, revenue or benefit in, under or derived from the property or asset. To the extent not otherwise specified herein, Borrowing Base calculations for each Borrower shall be consistent with historical methods of valuation and calculation for such Borrower’s Borrowing Base, and otherwise reasonably satisfactory to the Agent (and not necessarily calculated in accordance with GAAP). Loan Parties shall have the burden of establishing any alleged negligence, misconduct or lack of good faith by the Agent, any Security Trustee, any Fronting Bank or any Lender under any Loan Documents. No provision of any Loan Documents shall be construed against any party by reason of such party having, or being deemed to have, drafted the provision. A reference to a Loan Party’s “knowledge” or similar concept means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in due inquiry. Whenever any payment, certificate, notice or other delivery shall be stated to be due on a day other than a Business Day, the due date for such payment or delivery shall be extended to the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be;

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

provided, however, that if such extension would cause payment of interest on or principal of any LIBOR Loan to be made in the next calendar month, such payment shall be made on the immediately preceding Business Day. As used in the other Loan Documents, “Dutch Borrowers”, “Dutch Domiciled Loan Party”, “Dutch Facility Collateral”, “Dutch Facility Guarantor”, “Dutch Facility Loan Party”, “Dutch Facility Obligations”, “Dutch Facility Secured Obligations”, “Dutch Facility Secured Parties”, “Dutch Fronting Bank”, “Dutch Fronting Bank Indemnitees”, “Dutch LC Documents”, “Dutch LC Request”, “Dutch Lender”, “Dutch Letter of Credit”, “Dutch Protective Advances”, “Dutch Revolver Commitment”, “Dutch Revolver Exposure”, “Dutch Revolver Loan” “Dutch Security Agreement”, “Dutch Security Trustee”, “Dutch Subsidiary”, “Dutch Swingline Lender”, “Dutch Swingline Loan” and “Dutch Overadvances”, shall have the meaning assigned to “Dutch Kraton Borrowers”, “ Dutch Kraton Dutch Domiciled Loan Party”, “Dutch Kraton Facility Collateral”, “Dutch Kraton Facility Guarantor”, “Dutch Kraton Facility Loan Party”, “Dutch Kraton Facility Obligations”, “Dutch Kraton Facility Secured Obligations”, “Dutch Kraton Facility Secured Parties”, “Dutch Kraton Fronting Bank”, “Dutch Kraton Fronting Bank Indemnitees”, “Dutch Kraton LC Documents”, “Dutch Kraton LC Request”, “Dutch Kraton Lender”, “Dutch Kraton Letter of Credit”, “Dutch Kraton Protective Advances”, “Dutch Kraton Revolver Commitment”, “Dutch Kraton Revolver Exposure”, “Dutch Kraton Revolver Loan” “Dutch Kraton Security Agreement”, “Dutch Kraton Security Trustee”, “Dutch Kraton Subsidiary”, “Dutch Kraton Swingline Lender”, “Dutch Kraton Swingline Loan” and “Dutch Kraton Overadvances”, respectively.

1.5.        Currency Calculations.

(a)          All references in the Loan Documents to Loans, Letters of Credit, Obligations and other amounts shall be denominated in Dollars, unless expressly provided otherwise. The Dollar Equivalent of any amounts denominated or reported under a Loan Document with respect to the components of the Total Borrowing Base in a currency other than Dollars shall be determined by the Agent on a daily basis based on the current Exchange Rate, with all other amounts determined and reported in Dollars in accordance with GAAP. Each Borrower shall report Value and other Borrowing Base components to the Agent in the currency invoiced by such Borrower or shown in such Borrower’s financial records, and unless expressly provided otherwise, Parent shall deliver consolidated financial statements and calculate financial covenants in Dollars. Notwithstanding anything herein to the contrary, if any Obligation is funded and expressly denominated in a currency other than Dollars, Borrowers shall repay such Obligation in such other currency.

(b)          For purposes of determining compliance with Section 10.2 with respect to any Dollar denominated restriction on Debt, Investments, Liens or Distributions, the dollar equivalent of such Debt, Investment, Lien or Distribution, as applicable, denominated in a currency other than Dollars shall be calculated based on the relevant currency Exchange Rate (as determined by the North American Loan Party Agent) in effect on the date such Debt, Investment, Lien or Distribution, as applicable, was first committed or incurred and, no Default shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Debt or Investment is incurred; provided that if such Debt is incurred to refinance other Debt denominated in a foreign currency, and such refinancing would cause the applicable Dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Dollar denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being refinanced; provided further that, for the avoidance of doubt, the foregoing provisions of this Section 1.5(b) shall otherwise apply to such Sections, including with respect to determining whether any Debt or Investment may be incurred at any time under such Sections.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Section 2.           CREDIT FACILITIES

2.1.          Commitment

2.1.1.           Revolver Loans.

(a)            Dutch Kraton Revolver Loans. Each Dutch Kraton Lender agrees, severally and not jointly with the other Dutch Kraton Lenders, upon the terms and subject to the conditions set forth herein, to make Dutch Kraton Revolver Loans to any of the Dutch Kraton Borrowers from time to time on any Business Day during the period from the Closing Date to the Dutch Kraton Revolver Commitment Termination Date, not to exceed in aggregate principal amount outstanding at any time (based on the Dollar Equivalent thereof), together with such Dutch Kraton Lender’s portion of the Dutch Kraton LC Obligations, such Dutch Kraton Lender’s Dutch Kraton Revolver Commitment at such time, which Dutch Kraton Revolver Loans may be repaid and reborrowed in accordance with the provisions of this Agreement; provided, however, that Dutch Kraton Lenders shall have no obligation to the Dutch Kraton Borrowers whatsoever to honor any request for a Dutch Kraton Revolver Loan (i) on or after the Dutch Kraton Revolver Commitment Termination Date or (ii) if the Dollar Equivalent of the amount of the proposed Dutch Kraton Revolver Loan exceeds Dutch Kraton Availability on the proposed funding date for such Dutch Kraton Revolver Loan or, in the case of any Dutch Kraton Borrower, the limit contained in Section 2.5. Each Borrowing of Dutch Kraton Revolver Loans shall be funded by Dutch Kraton Lenders on a Pro Rata basis. The Dutch Kraton Revolver Loans shall bear interest as set forth in Section 3.1. Each Dutch Kraton Revolver Loan shall, at the option of the Applicable Dutch Kraton Borrower, be made or continued as, or converted into, part of one or more Borrowings that, unless specifically provided herein, shall consist entirely of European Base Rate Loans or LIBOR Loans if denominated in Sterling, European Base Rate Loans or LIBOR Loans if denominated in Euros, or European Base Rate Loans or LIBOR Loans if denominated in Dollars. The Dutch Kraton Revolver Loans shall be repaid in accordance with the terms of this Agreement and shall be secured by all of the Dutch Kraton Facility Collateral. Each Dutch Kraton Revolver Loan shall be funded in Euros or, at the option of the Applicable Dutch Kraton Borrower, Dollars or Sterling and repaid in the same currency as the underlying Dutch Kraton Revolver Loan was made.

(b)            U.S. Revolver Loans to U.S. Borrowers. Each U.S. Lender agrees, severally and not jointly with the other U.S. Lenders, upon the terms and subject to the conditions set forth herein, to make U.S. Revolver Loans to any of the U.S. Borrowers from time to time on any Business Day during the period from the Closing Date to the U.S. Revolver Commitment Termination Date, not to exceed in aggregate principal amount outstanding at any time, together with such U.S. Lender’s portion of the U.S. LC Obligations, such U.S. Lender’s U.S. Revolver Commitment at such time, which U.S. Revolver Loans may be repaid and reborrowed in accordance with the provisions of this Agreement; provided, however, that such U.S. Lenders shall have no obligation to U.S. Borrowers whatsoever to honor any request for a U.S. Revolver Loan (i) on or after the U.S. Revolver Commitment Termination Date or (ii) if the amount of the proposed U.S. Revolver Loan exceeds U.S. Availability on the proposed funding date for such U.S. Revolver Loan. Each Borrowing of U.S. Revolver Loans shall be funded by U.S. Lenders on a Pro Rata basis. The U.S. Revolver Loans shall bear interest as set forth in Section 3.1. Each U.S. Revolver Loan shall, at the option of the North American Loan Party Agent, be made or continued as, or converted into, part of one or more Borrowings that, unless specifically provided herein, shall consist entirely of U.S. Base Rate Loans or LIBOR Loans. The U.S. Revolver Loans shall be repaid in accordance with the terms of this Agreement and shall be secured by all of the U.S. Facility Collateral. U.S. Borrowers shall be jointly and severally liable to pay all of the U.S. Revolver Loans. Each U.S. Revolver Loan shall be funded and repaid in Dollars.

[Kraton] Second A&R Loan, Security and Guarantee Agreement

(c)            Cap on Total Revolver Exposure. Notwithstanding anything to the contrary contained in this Section 2.1.1, in no event shall any Borrower be entitled to receive a Revolver Loan if at the time of the proposed funding of such Loan (and after giving effect thereto and all pending requests for Loans), the Total Revolver Exposure exceeds (or would exceed) the aggregate amount of the Commitments at such time.

2.1.2.            Revolver Notes. The Revolver Loans made by each Lender and interest accruing thereon shall be evidenced by the records of the Agent and such Lender. At the request of any Lender, the Borrowers within the Borrower Group to which such Lender has extended Commitments shall deliver a Revolver Note to such Lender in the amount of such Lender’s Commitment to such Borrower Group, provided such request is made at least two (2) Business Days prior to the Closing Date.

2.1.3.            Use of Proceeds. The proceeds of Revolver Loans shall be used by Borrowers solely (a) to refinance the Existing Credit Agreement; (b) to pay fees and expenses associated with the Transaction; and (c) for other lawful, general corporate purposes of the Loan Parties and their Subsidiaries.

2.1.4.            Reduction or Termination of Commitments.

(a)            Dutch Kraton Revolver Commitments. Unless sooner terminated in accordance with this Agreement, the Dutch Kraton Revolver Commitments shall terminate on the Dutch Kraton Revolver Commitment Termination Date. Upon at least thirty (30) days’ prior written notice to the Agent from the North American Loan Party Agent, Dutch Kraton Borrowers may, at their option, terminate the Dutch Kraton Revolver Commitments in full without premium or penalty (other than funding losses payable pursuant to Section 3.10). On the Dutch Kraton Revolver Commitment Termination Date, the Dutch Kraton Facility Loan Parties shall make Full Payment of all Dutch Kraton Facility Obligations.

(b)            U.S. Revolver Commitments. Unless sooner terminated in accordance with this Agreement, the U.S. Revolver Commitments shall terminate on the U.S. Revolver Commitment Termination Date. Upon at least thirty (30) days’ prior written notice to the Agent from the North American Loan Party Agent, U.S. Borrowers may, at their option, terminate the U.S. Revolver Commitments in full without premium or penalty (other than funding losses payable pursuant to Section 3.10). If the U.S. Borrowers elect to permanently reduce to zero or terminate the U.S. Revolver Commitments pursuant to the previous sentence, the Foreign Revolver Commitments shall automatically terminate concurrently with the termination of the U.S. Revolver Commitments. On the U.S. Revolver Commitment Termination Date, the U.S. Facility Loan Parties shall make Full Payment of all U.S. Facility Obligations.

(c)            Partial Reductions. So long as no Default or Event of Default then exists or would result therefrom and after giving effect thereto, a Loan Party Agent may permanently and irrevocably reduce the Commitments by giving the Agent at least 10 Business Days’ prior irrevocable written notice thereof from a Senior Officer of such Loan Party Agent, which notice shall (i) specify the date (which shall be a Business Day) and amount of such reduction (which shall, in the case of the U.S. Revolver Commitments, be in a minimum amount of $5,000,000 and increments of $1,000,000 in excess thereof and, in the case of a Foreign Revolver Commitment, be in a minimum amount of $5,000,000 and increments of $1,000,000 in excess thereof), and (ii) specify the allocation of such reduction to, and the corresponding reductions of, each Foreign Revolver Commitment and/or the U.S. Revolver Commitment (each of which shall be allocated to the Lenders among the affected Borrower Groups on a Pro Rata basis at the time of such reduction); provided that in no event may any reduction of a Borrower Group Commitment be made pursuant to this Section 2.1.4(c), if after giving effect thereto, the U.S. Revolver Commitments would be less than sixty percent (60%) of the Commitment. Without limiting the

[Kraton] Second A&R Loan, Security and Guarantee Agreement

foregoing, (A) each reduction in the U.S. Revolver Commitments may not exceed U.S. Availability, and (B) each reduction in the Dutch Kraton Revolver Commitments may not exceed Dutch Kraton Availability.

(d)           Notices Irrevocable. Any notice of termination or partial reduction given pursuant to this Section 2.1.4 shall be irrevocable; provided, however, that notice of termination of the Commitments in full may be contingent on the occurrence of a financing or refinancing or the consummation of a sale, transfer, lease or other disposition of assets or the occurrence of a Change of Control and may be revoked or the termination date deferred if the financing or refinancing or sale, transfer, lease or other disposition of assets or Change of Control does not occur.

2.1.5.           Overadvances.

(a)            Dutch Kraton Overadvance. If at any time the Dollar Equivalent of the aggregate principal balance of all Dutch Kraton Revolver Loans owing by a Dutch Kraton Borrower exceeds the Dutch Kraton Borrowing Base of such Dutch Kraton Borrower (a “Dutch Kraton Overadvance”), the excess amount shall, subject to Section 5.2(b), be payable by the Applicable Dutch Kraton Borrower on demand by the Agent; provided however that if such excess is a result of fluctuations in the Exchange Rate, the Applicable Dutch Kraton Borrower shall have three (3) Business Days to prepay such excess pursuant to Section 1.5 of this Agreement before the Agent makes such Dutch Kraton Overadvance; provided further that, no new Loans (including, without limitation, Dutch Kraton Overadvances) will be made during such period. All Dutch Kraton Overadvance Loans shall constitute Dutch Kraton Facility Obligations secured by the Dutch Kraton Facility Collateral and shall be entitled to all benefits of the Loan Documents.

(b)            U.S. Overadvance. If at any time the aggregate principal balance of all U.S. Revolver Loans exceeds the U.S. Borrowing Base (a “U.S. Overadvance”), the excess amount shall, subject to Section 5.2, be payable by the U.S. Borrowers on demand by the Agent; provided however that if such excess is a result of fluctuations in the Exchange Rate, the Applicable U.S. Borrower shall have three (3) Business Days to prepay such excess pursuant to Section 1.5 of this Agreement before the Agent makes such U.S. Overadvance; provided further that, no new Loans (including, without limitation, U.S. Overadvances) will be made during such period. All U.S. Overadvance Loans shall constitute U.S. Facility Obligations secured by the U.S. Facility Collateral and shall be entitled to all benefits of the Loan Documents.

(c)            Funding of Overadvance Loans. The Agent may require Applicable Lenders to honor requests for Overadvance Loans and to forbear from requiring the applicable Borrower(s) to cure an Overadvance as long as (i) such Overadvance does not continue for more than 30 consecutive days, (ii) the aggregate amount of Overadvances existing at any time do not exceed ten percent (10%) of the Commitments then in effect and (iii) the aggregate amount of the Overadvances existing at any time, together with the Protective Advances outstanding at any time pursuant to Section 2.1.6 below, do not exceed fifteen percent (15%) of the Commitments then in effect. Required Lenders may at any time revoke the Agent’s authority to make further Overadvance Loans to any or all Borrowers by written notice to the Agent. In no event shall Overadvance Loans be required that would cause (A) the U.S. Revolver Exposure to exceed the aggregate U.S. Revolver Commitments or (B) the Dutch Kraton Revolver Exposure to exceed the aggregate Dutch Kraton Revolver Commitments. Any funding of an Overadvance Loan or sufferance of an Overadvance shall not constitute an Event of Default unless the relevant Borrower fails to pay such Overadvance within the time period provided in Sections 2.1.5(a) and 2.1.5(b), as applicable, or a waiver by the Agent or Lenders of the Default caused thereby. In no event shall any Borrower or other Loan Party be deemed a beneficiary of this Section 2.1.5(c) nor authorized to enforce any of its terms.

[Kraton] Second A&R Loan, Security and Guarantee Agreement

2.1.6.            Protective Advances.

(a)            Dutch Kraton Protective Advances. The Agent shall be authorized by each Dutch Kraton Borrower and the Dutch Kraton Lenders, from time to time in the Agent’s discretion (but shall have absolutely no obligation to), to make European Base Rate Loans to any Dutch Kraton Borrower on behalf of the Dutch Kraton Lenders (any of such Loans are herein referred to as “Dutch Kraton Protective Advances”) which the Agent in its Permitted Discretion deems necessary or desirable to (i) preserve or protect Dutch Kraton Facility Collateral or any portion thereof or (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Dutch Kraton Revolver Loans and other Dutch Kraton Facility Obligations; provided that no Dutch Kraton Protective Advance shall cause the aggregate amount of the Dutch Kraton Revolver Exposure at such time to exceed the Dutch Kraton Revolver Commitments then in effect. All Dutch Kraton Protective Advances made by the Agent with respect to each Dutch Kraton Dutch Domiciled Loan Party shall be Dutch Kraton Facility Obligations of such Dutch Kraton Dutch Domiciled Loan Party, secured by the applicable Dutch Kraton Facility Collateral and, if denominated in Euros, shall be treated for all purposes as a European Base Rate Loan or, if denominated in Dollars, shall be treated for all purposes as a European Base Rate Loan or if denominated in Sterling, shall be treated for all purposes as a European Base Rate Loan.

(b)           U.S. Protective Advances. The Agent shall be authorized by each U.S. Borrower and the U.S. Lenders, from time to time in the Agent’s discretion (but shall have absolutely no obligation to), to make U.S. Base Rate Loans to the U.S. Borrowers on behalf of the U.S. Lenders (any of such Loans are herein referred to as “U.S. Protective Advances”) which the Agent in its Permitted Discretion deems necessary or desirable to (i) preserve or protect U.S. Facility Collateral or any portion thereof or (ii) to enhance the likelihood of, or maximize the amount of, repayment of the U.S. Revolver Loans and other U.S. Facility Obligations; provided that no U.S. Protective Advance shall cause the aggregate amount of the U.S. Revolver Exposure at such time to exceed the U.S. Revolver Commitments then in effect. All U.S. Protective Advances made by the Agent with respect to U.S. Domiciled Loan Parties shall be U.S. Facility Obligations, secured by the U.S. Facility Collateral and shall be treated for all purposes as U.S. Base Rate Loans.

(c)            Limitations on Protective Advances. The aggregate amount of Protective Advances outstanding at any time pursuant to this Section 2.1.6 shall not exceed five percent (5%) of the Commitments then in effect. Protective Advances may be made even if the conditions set forth in Section 6.2 have not been satisfied. Each Applicable Lender shall participate in each Protective Advance on a Pro Rata basis. Required Lenders may at any time revoke the Agent’s authority to make further Protective Advances to any or all Borrowers by written notice to the Agent. Absent such revocation, the Agent’s determination that funding of a Protective Advance is appropriate shall be conclusive. At any time that there is sufficient Availability for the applicable Borrower Group and the conditions precedent set forth in Section 6 have been satisfied, the Agent may request the Applicable Lenders to make a Revolver Loan to repay a Protective Advance. At any other time, the Agent may require the Applicable Lenders to fund their risk participations described in Section 2.1.6(d).

(d)            Transfers. Upon the making of a Protective Advance by the Agent (whether before or after the occurrence of a Default or Event of Default), each Applicable Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Agent without recourse or warranty, an undivided interest and participation in such Protective Advance in proportion to its Pro Rata share of such Protective Advance. Each Applicable Lender shall transfer (a “Transfer”) the amount of such Applicable Lender’s Pro Rata share of the outstanding principal amount of the applicable Protective Advance with respect to such purchased interest and participation promptly when requested to the Agent, to such account of the Agent as the Agent may designate, but in any case not later than 3:00 p.m. (Local Time) on the Business Day notified (if notice is provided by the Agent

[Kraton] Second A&R Loan, Security and Guarantee Agreement

prior to 12:00 p.m. (Local Time)) and otherwise on the immediately following Business Day (the “Transfer Date”). Transfers may occur during the existence of a Default or Event of Default and whether or not the applicable conditions precedent set forth in Section 6 have then been satisfied. Such amounts transferred to the Agent shall be applied against the amount of the Protective Advance and, together with Applicable Lender’s Pro Rata share of such Protective Advance, shall constitute Loans of such Applicable Lenders, respectively. If any such amount is not transferred to the Agent by any Applicable Lender on such Transfer Date, the Agent shall be entitled to recover such amount on demand from such Applicable Lender together with interest thereon as specified in Section 3.1. From and after the date, if any, on which any Applicable Lender is required to fund, and funds, its participation in any Protective Advance purchased hereunder, the Agent shall promptly distribute to such Applicable Lender, such Applicable Lender’s Pro Rata share of all payments of principal and interest and all proceeds of Collateral received by the Agent in respect of such Protective Advance.

2.1.7.            Increase in Revolver Commitments; Reallocations.

(a)            Dutch Kraton Revolver Commitment Increase. The North American Loan Party Agent may by written notice to the Agent request an increase in the Dutch Kraton Revolver Commitments then in effect (a “Dutch Kraton Revolver Commitment Increase”) by increasing the Dutch Kraton Revolver Commitment of a Dutch Kraton Lender (with the consent of such Dutch Kraton Lender) or by causing a Person that constitutes an Eligible Assignee and at such time is not a Dutch Kraton Lender to become a Dutch Kraton Lender (an “Additional Dutch Kraton Lender”). After giving effect to any Dutch Kraton Revolver Commitment Increase, the Dutch Kraton Revolver Commitment of each Dutch Kraton Lender (and the percentage of each Dutch Kraton Revolver Loan that each Participant must purchase a Dutch Kraton Revolver Loan participation in) shall be equal to such Dutch Kraton Lender’s (or such Participant’s) Pro Rata share of the amount of the increased Dutch Kraton Revolver Commitments.

(b)           U.S. Revolver Commitment Increase. The North American Loan Party Agent may by written notice to the Agent elect to increase the U.S. Revolver Commitments then in effect (a “U.S. Revolver Commitment Increase” and together with any Dutch Kraton Revolver Commitment Increase, “Revolver Commitment Increases”) by increasing the U.S. Revolver Commitment of a U.S. Lender (with the consent of such U.S. Lender) or by causing a Person that constitutes an Eligible Assignee and at such time is not a U.S. Lender to become a U.S. Lender (an “Additional U.S. Lender” and together with any Additional Dutch Kraton Lender, “Additional Lenders”). After giving effect to any U.S. Revolver Commitment Increase, the U.S. Revolver Commitment of each U.S. Lender (and the percentage of each U.S. Revolver Loan that each Participant must purchase a U.S. Revolver Loan participation in) shall be equal to such U.S. Lender’s (or such Participant’s) Pro Rata share of the amount of the increased U.S. Revolver Commitments.

(c)           Terms of Revolver Commitment Increases. Each notice of an increase in any Borrower Group Commitment shall specify the proposed date (each, an “Increase Date”) for the effectiveness of the Revolver Commitment Increase, which date shall be not less than ten (10) Business Days after the date on which such notice is delivered to the Agent. Any such increase shall be subject to the following additional conditions: (i) no Default or Event of Default shall have occurred and be continuing as of the date of such notice or both immediately before and after giving effect to such Revolver Commitment Increase as of the Increase Date; (ii) after giving effect to the proposed increase, the U.S. Revolver Commitment shall be at least sixty percent (60%) of the Commitments, (iii) no Lender shall be obligated to participate in the Revolver Commitment Increase by increasing its Commitment; (iv) the Revolver Commitment Increase shall be on the same terms and conditions as this Agreement, except with respect to closing fees; (v) the Revolver Commitment Increase, to the extent arising from the admission of an Additional Lender, shall be effected pursuant to one or more joinder agreements executed and delivered by the applicable Borrowers, the Additional Lender(s) and the Agent, each of which shall

[Kraton] Second A&R Loan, Security and Guarantee Agreement

be in form and substance reasonably satisfactory to the Agent; (vi) the relevant Loan Party Agent shall deliver or cause to be delivered any officers’ certificates, board resolutions, legal opinions or other documents reasonably requested by the Agent in connection with the Revolver Commitment Increase; (vii) the Borrowers shall pay all reasonable and documented fees and expenses in connection with the Revolver Commitment Increase, including payments required pursuant to Section 3.10 in connection with the Revolver Commitment Increase and any applicable arrangement fees; (viii) the Agent shall have consented in writing to such Revolver Commitment Increase (which consent shall not be unreasonably withheld); and (ix) such increase shall be in a minimum amount of $25,000,000 in the case of the U.S. Revolver Commitments or in a minimum amount of $10,000,000 in the case of each of the Foreign Revolver Commitments. Notwithstanding the foregoing, in no event shall the aggregate amount of all Revolver Commitment Increases made under this Section 2.1.7 exceed the sum of $100,000,000.

(d)            Increases Generally. The Agent shall promptly inform the Lenders of any request for a Revolver Commitment Increase made by a Loan Party Agent. If the conditions set forth in clause (c) above are not satisfied on the applicable Increase Date (or, to the extent such conditions relate to an earlier date, such earlier date), the Agent shall notify such Loan Party Agent in writing that the requested Revolver Commitment Increase will not be effectuated. On each Increase Date, the Agent shall notify the Lenders and the relevant Loan Party Agent, on or before 3:00 p.m. (Local Time), by facsimile, e-mail or other electronic means, of the occurrence of the Revolver Commitment Increase to be effected on such Increase Date, the amount of Revolver Loans held by each Lender as a result thereof, the amount of the Commitment of each Lender (and the percentage of each Revolver Loan, if any, that each Participant must purchase a participation interest in) as a result thereof.

(e)           Reallocation Mechanism. Subject to the terms and conditions of Section 2.1.7(e) and (f), the North American Loan Party Agent may, effective as of the first day of a specified Fiscal Quarter, effective for such Fiscal Quarter, require that the Lenders to certain Borrower Groups (and such Lenders shall be deemed to agree to) change the then current allocation of each such Lender’s (and, if applicable, its affiliate’s) Commitment among the Borrower Group Commitments in order to effect an increase or decrease in particular Borrower Group Commitments, with any such increase or decrease in a Borrower Group Commitment to be accompanied by a concurrent and equal decrease or increase, respectively, in another Borrower Group Commitment (each, a “Reallocation”). In addition to the conditions set forth in Section 2.1.7(f), any such Reallocation shall be subject to the following conditions: (i) the North American Loan Party Agent shall have provided to the Agent a written notice (in reasonable detail) at least ten (10) Business Days prior to the requested effective date therefor (which effective date must be the first day of a Fiscal Quarter) (the “Reallocation Date”) setting forth the Reallocation Date and the amounts of the proposed Borrower Group Commitment reallocations to be effected, (ii) any such Reallocation shall increase or decrease the applicable Borrower Group Commitments in an amount equal to $5,000,000 and in increments of $1,000,000 in excess thereof, (iii) after giving effect to any such Reallocation, the U.S. Revolver Commitments shall be at least 60% of the Commitments, (iv) no Default or Event of Default shall have occurred and be continuing either as of the date of such notice or on the Reallocation Date (both immediately before and after giving effect to such Reallocation), (v) any increase in a Borrower Group Commitment shall result in a dollar-for-dollar decrease in another Borrower Group Commitment, (vi) in no event shall the sum of all the Borrower Group Commitments exceed the aggregate amount of the Commitments then in effect, (vii) after giving effect to such Reallocation, no Overadvance would exist or would result therefrom, and (viii) at least three (3) Business Days prior to the proposed Reallocation Date, a Senior Officer of the North American Loan Party Agent shall have delivered to the Agent a certificate certifying as to compliance with preceding clauses (iv), (vi) and (vii) and demonstrating (in reasonable detail) the calculations, if any, required in connection therewith, which certificate shall be deemed recertified to the Agent by a Senior Officer of the North American Loan Party Agent on and as of the Reallocation Date.

[Kraton] Second A&R Loan, Security and Guarantee Agreement

(f)             Reallocations Generally. The Agent shall promptly inform the Lenders of the affected Borrower Groups of any notice of a Reallocation. If the conditions set forth in Section 2.1.7(e) and (f) are not satisfied on the applicable Reallocation Date (or, to the extent such conditions relate to an earlier date, such earlier date), the Agent shall notify the North American Loan Party Agent in writing that the requested Reallocation will not be effectuated; provided that the Agent shall in all cases be entitled to rely (without liability) on the certificate delivered by the North American Loan Party Agent pursuant to Section 2.1.7(viii) in making its determination as to the satisfaction of certain conditions set forth in Section 2.1.7(e). On each Reallocation Date, the Agent shall notify the Lenders of the affected Borrower Groups and the North American Loan Party Agent, on or before 3:00 p.m. by facsimile, e-mail or other electronic means, of the occurrence of the Reallocation to be effected on such Reallocation Date, the amount of the Loans held by each such Lender as a result thereof and the amount of the affected Borrower Group Commitments of each such Lender as a result thereof. To the extent necessary where a Lender in one Borrower Group and its separate affiliate that is a Lender in another Borrower Group are participating in a Reallocation, the Reallocation among such Persons shall be deemed to have been consummated pursuant to an Assignment and Acceptance. The respective Pro Rata shares of the Lenders shall thereafter, to the extent applicable, be determined based on such reallocated amounts (subject to any subsequent changes thereto), and the Agent and the affected Lenders shall make such adjustments as the Agent shall deem necessary so that the outstanding Loans and LC Obligations of each Lender equals its Pro Rata share thereafter giving effect to the Reallocation.

2.1.8.            Swingline Loans.

(a)            Dutch Kraton Swingline Loans to Dutch Kraton Borrowers. The Dutch Kraton Swingline Lender will, in the Dutch Kraton Swingline Lender’s discretion, make Dutch Kraton Swingline Loans to any of the Dutch Kraton Borrowers on any Business Day during the period from the Closing Date to the Dutch Kraton Revolver Commitment Termination Date, not to exceed the Dutch Kraton Swingline Sublimit in aggregate principal amount outstanding at any time (based on the Dollar Equivalent thereof), which Dutch Kraton Swingline Loans may be repaid and reborrowed in accordance with the provisions of this Agreement; provided, however, that the Dutch Kraton Swingline Lender shall not honor any request for a Dutch Kraton Swingline Loan (i) on or after the Dutch Kraton Revolver Commitment Termination Date, (ii) if the Dollar Equivalent of the amount of the proposed Dutch Kraton Swingline Loan exceeds Dutch Kraton Availability on the proposed funding date for such Dutch Kraton Swingline Loan, (iii) if the requirements of Section 2.5 are not satisfied or (iv) if the Dutch Kraton Swingline Lender has knowledge that any of the conditions in Section 6.2 are not satisfied. The Dutch Kraton Swingline Loans shall be European Base Rate Loans if denominated in Euros and European Base Rate Loans if denominated in Dollars and bear interest as set forth in Section 3.1. Each Dutch Kraton Swingline Loan shall constitute a Revolver Loan for all purposes except that payments thereon shall be made to the Dutch Kraton Swingline Lender for its own account. The Dutch Kraton Swingline Loans of each Dutch Kraton Borrower shall be repaid in accordance with the terms of this Agreement and shall be secured by all of the Dutch Kraton Facility Collateral of such Dutch Kraton Borrower. Each Dutch Kraton Swingline Loan shall be funded in Euros or, at the option of the Applicable Dutch Kraton Borrower, Dollars or Sterling and repaid in the same currency as the underlying Dutch Kraton Swingline Loan was made.

(b)           U.S. Swingline Loans to U.S. Borrowers. The U.S. Swingline Lender will, in the U.S. Swingline Lender’s discretion, make U.S. Swingline Loans to any of the U.S. Borrowers on any Business Day during the period from the Closing Date to the U.S. Revolver Commitment Termination Date, not to exceed the U.S. Swingline Sublimit in aggregate principal amount outstanding at any time, which U.S. Swingline Loans may be repaid and reborrowed in accordance with the provisions of this Agreement; provided, however, that the U.S. Swingline Lender shall not honor any request for a U.S. Swingline Loan (i) on or after the U.S. Revolver Commitment Termination Date, (ii) if the amount of the

[Kraton] Second A&R Loan, Security and Guarantee Agreement

proposed U.S. Swingline Loan exceeds U.S. Availability on the proposed funding date for such U.S. Swingline Loan or (iii) if the U.S. Swingline Lender has knowledge that any of the conditions in Section 6.2 are not satisfied. The U.S. Swingline Loans shall be U.S. Base Rate Loans and bear interest as set forth in Section 3.1. Each U.S. Swingline Loan shall constitute a Revolver Loan for all purposes except that payments thereon shall be made to the U.S. Swingline Lender for its own account. The U.S. Swingline Loans shall be repaid in accordance with the terms of this Agreement and shall be secured by all of the U.S. Facility Collateral. The U.S. Borrowers shall be jointly and severally liable to pay all of the U.S. Swingline Loans. Each U.S. Swingline Loan shall be funded and repaid in Dollars.

(c)            Swinglines Generally. The Swingline Loans made by each Swingline Lender and interest accruing thereon shall be evidenced by the records of the Agent and such Swingline Lender and need not be evidenced by any promissory note.

2.2.         Dutch Letters of Credit.

2.2.1.           Issuance of Dutch Letters of Credit.

(a)            Issuance of Dutch Kraton Letters of Credit. Each Dutch Kraton Fronting Bank agrees to issue Dutch Kraton Letters of Credit for the account of any Dutch Kraton Borrower or any Restricted Subsidiary from time to time until the Facility Termination Date (or until the Dutch Kraton Revolver Commitment Termination Date, if earlier), in Euros or, at the option of the Applicable Dutch Kraton Borrower, Dollars or Sterling, or in any other currency acceptable to the Agent or Dutch Kraton Fronting Bank, on the terms set forth herein, including the following:

(i)            Each Dutch Kraton Borrower acknowledges that each Dutch Kraton Fronting Bank’s willingness to issue any Dutch Kraton Letter of Credit is conditioned upon such Dutch Kraton Fronting Bank’s receipt of a Dutch Kraton LC Application with respect to the requested Dutch Kraton Letter of Credit, as well as such other instruments and agreements as such Dutch Kraton Fronting Bank may customarily require for issuance of a letter of credit of similar type and amount. No Dutch Kraton Fronting Bank shall have any obligation to issue any Dutch Kraton Letter of Credit unless (A) such Dutch Kraton Fronting Bank and the Agent receive a Dutch Kraton LC Application and Dutch Kraton LC Application at least three (3) Business Days prior to the requested date of issuance; (B) each Dutch Kraton LC Condition is satisfied; and (C) if a Defaulting Lender that is a Dutch Kraton Lender exists, such Lender or Dutch Kraton Borrowers have entered into arrangements reasonably satisfactory to the Agent and such Dutch Kraton Fronting Bank to eliminate any funding risk associated with such Defaulting Lender. If a Dutch Kraton Fronting Bank receives written notice from a Dutch Kraton Lender at least three (3) Business Days before issuance of a Dutch Kraton Letter of Credit that any Dutch Kraton LC Condition has not been satisfied, such Dutch Kraton Fronting Bank shall have no obligation to issue the requested Dutch Kraton Letter of Credit (or any other) until such notice is withdrawn in writing by the Required Borrower Group Lenders or until the Required Borrower Group Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, a Dutch Kraton Fronting Bank shall not be deemed to have knowledge of any failure of Dutch Kraton LC Conditions.

(ii)            Dutch Kraton Letters of Credit may be requested by the North American Loan Party Agent or the Foreign Loan Party Agent to support obligations incurred in the Ordinary Course of Business, or as otherwise approved by Agent. The renewal or extension of any Dutch Kraton Letter of Credit shall be treated as the issuance of a new Dutch Kraton Letter of Credit, except that delivery of a new Dutch Kraton LC Application shall be required at the discretion of the applicable Dutch Kraton Fronting Bank. No Dutch Kraton Fronting Bank shall renew or extend any Dutch Kraton Letter of Credit if it receives written notice from the Agent or the Required Borrower Group Lenders of the existence of a Default or Event of Default.

[Kraton] Second A&R Loan, Security and Guarantee Agreement

(iii)           Dutch Kraton Borrowers assume all risks of the acts, omissions or misuses of any Dutch Kraton Letter of Credit by the beneficiary. In connection with issuance of any Dutch Kraton Letter of Credit, none of the Agent, any Dutch Kraton Fronting Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Dutch Kraton Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a Dutch Kraton Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Dutch Kraton Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of any Dutch Kraton Fronting Bank, the Agent or any Dutch Kraton Lender, including any act or omission of a Governmental Authority. The rights and remedies of each Dutch Kraton Fronting Bank under the Loan Documents shall be cumulative. Each Dutch Kraton Fronting Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with proceeds of any Dutch Kraton Letter of Credit issued by such Dutch Kraton Fronting Bank.

(iv)              In connection with its administration of and enforcement of rights or remedies under any Dutch Kraton Letters of Credit or Dutch Kraton LC Documents, each Dutch Kraton Fronting Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or communication in whatever form believed by such Dutch Kraton Fronting Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Each Dutch Kraton Fronting Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Each Dutch Kraton Fronting Bank may employ agents and attorneys-in-fact in connection with any matter relating to Dutch Kraton Letters of Credit or Dutch Kraton LC Documents, and shall not be liable for the gross negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.

2.2.2.            Dutch Kraton LC Reimbursement; Dutch Kraton LC Participations.

(a)            If a Dutch Kraton Fronting Bank honors any request for payment under a Dutch Kraton Letter of Credit, the Applicable Dutch Kraton Borrower shall pay to such Dutch Kraton Fronting Bank, on the same day (“Dutch Kraton Reimbursement Date”), the amount paid by such Dutch Kraton Fronting Bank under such Letter of Credit, together with interest at the interest rate for European Base Rate Loans from the Dutch Kraton Reimbursement Date until payment by Dutch Kraton Borrower. The obligation of the Applicable Dutch Kraton Borrower to reimburse each Dutch Kraton Fronting Bank for any payment made under a Dutch Kraton Letter of Credit issued by such Dutch Kraton Fronting Bank shall be absolute, unconditional, irrevocable, and shall be paid without regard to any lack of validity or enforceability of any Dutch Kraton Letter of Credit or the existence of any claim, setoff, defense or other right that the Applicable Dutch Kraton Borrower or Loan Parties may have at any time against the

[Kraton] Second A&R Loan, Security and Guarantee Agreement

beneficiary. Whether or not the Applicable Dutch Kraton Borrower submits a Notice of Borrowing, the Applicable Dutch Kraton Borrower shall be deemed to have requested a Borrowing of European Base Rate Loans, as applicable, in an amount necessary to pay all amounts due to a Dutch Kraton Fronting Bank in the currency in which the underlying Dutch Kraton Letter of Credit was issued on any Dutch Kraton Reimbursement Date and each Dutch Kraton Lender agrees to fund its Pro Rata share of such Borrowing whether or not the Commitments have terminated, an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied.

(b)            Upon issuance of a Dutch Kraton Letter of Credit, each Dutch Kraton Lender shall be deemed to have irrevocably and unconditionally purchased from the Dutch Kraton Fronting Bank that issued such Dutch Kraton Letter of Credit, without recourse or warranty, an undivided Pro Rata interest and participation in all Dutch Kraton LC Obligations relating to the Dutch Kraton Letter of Credit. If the applicable Dutch Kraton Fronting Bank makes any payment under a Dutch Kraton Letter of Credit and the Applicable Dutch Kraton Borrower does not reimburse such payment on the Dutch Kraton Reimbursement Date, the Agent shall promptly notify Dutch Kraton Lenders and each Dutch Kraton Lender shall promptly (within one Business Day) and unconditionally pay to the Agent in the currency of the payment made under such Dutch Kraton Letter of Credit, for the benefit of the Dutch Kraton Fronting Bank, the Dutch Kraton Lender’s Pro Rata share of such payment. Upon request by a Dutch Kraton Lender, the applicable Dutch Kraton Fronting Bank shall furnish copies of any Dutch Kraton Letters of Credit and Dutch Kraton LC Documents in its possession at such time.

(c)            The obligation of each Dutch Kraton Lender to make payments to the Agent for the account of the applicable Dutch Kraton Fronting Bank in connection with such Dutch Kraton Fronting Bank’s payment under a Dutch Kraton Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a Dutch Kraton Letter of Credit having been determined to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or the existence of any setoff or defense that any Loan Party may have with respect to any Obligations. No Dutch Kraton Fronting Bank assumes any responsibility for any failure or delay in performance or any breach by any Dutch Kraton Borrower or other Person of any obligations under any Dutch Kraton LC Documents. No Dutch Kraton Fronting Bank makes any express or implied warranty, representation or guarantee to Dutch Kraton Lenders with respect to the Dutch Kraton Facility Collateral, Dutch Kraton LC Documents or any Dutch Kraton Facility Loan Party. No Dutch Kraton Fronting Bank shall be responsible to any Dutch Kraton Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any Dutch Kraton LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any Dutch Kraton Facility Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Dutch Kraton Facility Loan Party.

(d)            No Dutch Kraton Fronting Bank Indemnitee shall be liable to any Loan Party or other Person for any action taken or omitted to be taken in connection with any Dutch Kraton LC Documents except as a result of such Dutch Kraton Fronting Bank’s actual gross negligence, willful misconduct or bad faith, as determined by a final, nonappealable judgment of a court of competent jurisdiction. No Dutch Kraton Fronting Bank shall have any liability to any Lender if such Dutch Kraton Fronting Bank refrains from any action under any Dutch Kraton Letter of Credit or Dutch Kraton LC Documents until it receives written instructions from Required Borrower Group Lenders.

[Kraton] Second A&R Loan, Security and Guarantee Agreement

2.2.3.            Dutch Kraton LC Cash Collateral. If any Dutch Kraton LC Obligations, whether or not then due or payable, shall for any reason be outstanding at any time (a) that an Event of Default exists, (b) that a Dutch Kraton Overadvance exists, (c) after the Dutch Kraton Revolver Commitment Termination Date, or (d) within 20 Business Days prior to the Facility Termination Date, then Dutch Kraton Borrowers shall, within three (3) Business Days of the Dutch Kraton Fronting Bank’s or the Agent’s request, Cash Collateralize the stated amount of all outstanding Dutch Kraton Letters of Credit and pay to each Dutch Kraton Fronting Bank the amount of all other Dutch Kraton LC Obligations to such Dutch Kraton Fronting Bank. If the reallocation described in Section 4.2.1 cannot, or can only be partially effected, the Dutch Kraton Borrowers shall, within three (3) Business Days of demand by the Dutch Kraton Fronting Bank or the Agent from time to time, Cash Collateralize the LC Obligations of any Defaulting Lender that is a Dutch Kraton Lender. If as a result of fluctuations in Exchange Rates or otherwise the Dollar Equivalent of the Dutch Kraton LC Obligations exceeds the Dutch Kraton Letter of Credit Sublimit, the excess amount shall be payable by the Dutch Kraton Borrowers within three (3) Business Days following demand by the Agent or the Dutch Kraton Fronting Bank. If Dutch Kraton Borrowers fail to provide any Cash Collateral as required hereunder, Dutch Kraton Lenders may (and shall upon direction of the Agent) advance, as Dutch Kraton Revolver Loans, the amount of the Cash Collateral required (whether or not the Dutch Kraton Revolver Commitments have terminated, any Dutch Kraton Overadvance exists or would result therefrom or the conditions in Section 6 are satisfied).

2.3.          U.S. Letters of Credit.

2.3.1.            Issuance of U.S. Letters of Credit. Each U.S. Fronting Bank agrees to issue U.S. Letters of Credit for the account of any U.S. Borrower or Restricted Subsidiary; provided that each U.S. Borrower agrees that it is jointly and severally liable with respect to, and guarantees payment under Section 5.10.1 with respect to, any U.S. Letter of Credit issued for the account of a Restricted Subsidiary that is not a U.S. Borrower from time to time until the Facility Termination Date (or until the U.S. Revolver Commitment Termination Date, if earlier), on the terms set forth herein, including the following:

(a)            Each U.S. Borrower acknowledges that each U.S. Fronting Bank’s willingness to issue any U.S. Letter of Credit is conditioned upon such U.S. Fronting Bank’s receipt of a U.S. LC Application with respect to the requested U.S. Letter of Credit, as well as such other instruments and agreements as such U.S. Fronting Bank may customarily require for issuance of a letter of credit of similar type and amount. No U.S. Fronting Bank shall have any obligation to issue any U.S. Letter of Credit unless (i) such U.S. Fronting Bank and the Bank of America (London) Agent receive a U.S. LC Request and U.S. LC Application at least two (2) Business Days prior to the requested date of issuance; (ii) each U.S. LC Condition is satisfied; and (iii) if a Defaulting Lender that is a U.S. Lender exists, U.S. Borrowers have entered into arrangements reasonably satisfactory to the Agent and such U.S. Fronting Bank to eliminate any funding risk associated with such Defaulting Lender. If a U.S. Fronting Bank receives written notice from a U.S. Lender at least two (2) Business Days before issuance of a U.S. Letter of Credit that any U.S. LC Condition has not been satisfied, such U.S. Fronting Bank shall have no obligation to issue the requested U.S. Letter of Credit (or any other) until such notice is withdrawn in writing by the Required Borrower Group Lenders or until the Required Borrower Group Lenders have waived such condition in accordance with this Agreement. Prior to receipt of any such notice, a U.S. Fronting Bank shall not be deemed to have knowledge of any failure of U.S. LC Conditions.

(b)            Letters of Credit may be requested by the North American Loan Party Agent to support obligations incurred in the Ordinary Course of Business, or as otherwise approved by Agent. The renewal or extension of any U.S. Letter of Credit shall be treated as the issuance of a new U.S. Letter of Credit, except that delivery of a new U.S. LC Application shall be required at the discretion of the applicable U.S. Fronting Bank. No U.S. Fronting Bank shall renew or extend any U.S. Letter of Credit if it receives written notice from the Agent or the Required Borrower Group Lenders of the existence of a Default or Event of Default.

[Kraton] Second A&R Loan, Security and Guarantee Agreement

(c)            U.S. Borrowers assume all risks of the acts, omissions or misuses of any U.S. Letter of Credit by the beneficiary. In connection with issuance of any U.S. Letter of Credit, none of the Agent, any U.S. Fronting Bank or any Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a U.S. Letter of Credit or Documents; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a U.S. Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any U.S. Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of any U.S. Fronting Bank, the Agent or any U.S. Lender, including any act or omission of a Governmental Authority. The rights and remedies of each U.S. Fronting Bank under the Loan Documents shall be cumulative. Each U.S. Fronting Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with proceeds of any U.S. Letter of Credit issued by such U.S. Fronting Bank.

(d)            In connection with its administration of and enforcement of rights or remedies under any U.S. Letters of Credit or U.S. LC Documents, each U.S. Fronting Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or communication in whatever form believed by such U.S. Fronting Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Each U.S. Fronting Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Each U.S. Fronting Bank may employ agents and attorneys-in-fact in connection with any matter relating to U.S. Letters of Credit or U.S. LC Documents, and shall not be liable for the gross negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.

2.3.2.           U.S. LC Reimbursement; U.S. LC Participations.

(a)           If a U.S. Fronting Bank honors any request for payment under a U.S. Letter of Credit, U.S. Borrowers shall pay to such U.S. Fronting Bank, on the same day (“U.S. Reimbursement Date”), the amount paid by such U.S. Fronting Bank under such U.S. Letter of Credit, together with interest at the interest rate for U.S. Base Rate Loans from the U.S. Reimbursement Date until payment by U.S. Borrowers. The obligation of U.S. Borrowers to reimburse each U.S. Fronting Bank for any payment made under a U.S. Letter of Credit issued by such U.S. Fronting Bank shall be absolute, unconditional, irrevocable, and joint and several among U.S. Borrowers, and shall be paid without regard to any lack of validity or enforceability of any U.S. Letter of Credit or the existence of any claim, setoff, defense or other right that U.S. Borrowers or Loan Parties may have at any time against the beneficiary. Whether or not the North American Loan Party Agent submits a Notice of Borrowing, U.S. Borrowers shall be deemed to have requested a Borrowing of U.S. Base Rate Loans in an amount necessary (based on the Dollar Equivalent thereof) to pay all amounts due to a U.S. Fronting Bank on any U.S. Reimbursement Date and each U.S. Lender agrees to fund its Pro Rata share of such Borrowing whether or not the Commitments have terminated, an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied.

[Kraton] Second A&R Loan, Security and Guarantee Agreement

(b)            Upon issuance of a U.S. Letter of Credit, each U.S. Lender shall be deemed to have irrevocably and unconditionally purchased from the U.S. Fronting Bank that issued such U.S. Letter of Credit, without recourse or warranty, an undivided Pro Rata interest and participation in all U.S. LC Obligations relating to the U.S. Letter of Credit. If the applicable U.S. Fronting Bank makes any payment under a U.S. Letter of Credit and U.S. Borrowers do not reimburse such payment on the U.S. Reimbursement Date, the Agent shall promptly notify U.S. Lenders and each U.S. Lender shall promptly (within one Business Day) and unconditionally pay to the Agent in Dollars, for the benefit of U.S. Fronting Bank, the U.S. Lender’s Pro Rata share of such payment (based on the Dollar Equivalent thereof). Upon request by a U.S. Lender, the applicable U.S. Fronting Bank shall furnish copies of any U.S. Letters of Credit and U.S. LC Documents in its possession at such time.

(c)           The obligation of each U.S. Lender to make payments to the Agent for the account of the applicable U.S. Fronting Bank in connection with such U.S. Fronting Bank’s payment under a U.S. Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a U.S. Letter of Credit having been determined to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or the existence of any setoff or defense that any Loan Party may have with respect to any Obligations. No U.S. Fronting Bank assumes any responsibility for any failure or delay in performance or any breach by any U.S. Borrower or other Person of any obligations under any U.S. LC Documents. No U.S. Fronting Bank makes any express or implied warranty, representation or guarantee to U.S. Lenders with respect to the U.S. Facility Collateral, U.S. LC Documents or any U.S. Facility Loan Party. No U.S. Fronting Bank shall be responsible to any U.S. Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any U.S. LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any U.S. Facility Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any U.S. Facility Loan Party.

(d)            No U.S. Fronting Bank Indemnitee shall be liable to any Loan Party or other Person for any action taken or omitted to be taken in connection with any U.S. LC Documents except as a result of each U.S. Fronting Bank’s gross negligence, willful misconduct or bad faith, as determined by a final, nonappealable judgment of a court of competent jurisdiction. No U.S. Fronting Bank shall have any liability to any Lender if such U.S. Fronting Bank refrains from any action under any U.S. Letter of Credit or U.S. LC Documents until it receives written instructions from Required Borrower Group Lenders of the Borrower Group consisting of U.S. Borrowers.

2.3.3.            U.S. LC Cash Collateral. If any U.S. LC Obligations, whether or not then due or payable, shall for any reason be outstanding at any time (a) that an Event of Default exists, (b) that a U.S. Overadvance exists, (c) after the U.S. Revolver Commitment Termination Date, or (d) within five Business Days prior to the Facility Termination Date, then U.S. Borrowers shall, within one Business Day of U.S. Fronting Bank’s or the Agent’s request, Cash Collateralize the stated amount of all outstanding U.S. Letters of Credit (based on the Dollar Equivalent thereof) and pay to each U.S. Fronting Bank the amount of all other U.S. LC Obligations to such U.S. Fronting Bank. If the reallocation described in Section 4.2.1 cannot, or can only partially be effected, the U.S. Borrowers shall, within one Business Day of demand by U.S. Fronting Bank’s or the Agent, Cash Collateralize the U.S. LC Obligations of any Defaulting Lender that is a U.S. Lender. If as a result of fluctuations in Exchange Rates or otherwise the

[Kraton] Second A&R Loan, Security and Guarantee Agreement

Dollar Equivalent of the U.S. LC Obligations exceeds the U.S. Letter of Credit Sublimit, the excess amount shall be payable by the U.S. Borrowers within three (3) Business Days following demand by the Agent or the U.S. Fronting Bank. If U.S. Borrowers fail to provide any Cash Collateral as required hereunder, Lenders may (and shall upon direction of the Agent) advance, as U.S. Revolver Loans, the amount of the Cash Collateral required (whether or not the U.S. Revolver Commitments have terminated, any U.S. Overadvance exists or would result therefrom or the conditions in Section 6 are satisfied).

2.4.         Resignation of Fronting Banks. A Fronting Bank may resign at any time upon notice to the Agent and the applicable Loan Party Agent. On and after the effective date of such resignation, such Fronting Bank shall have no obligation to issue, amend, renew, extend or otherwise modify any Letter of Credit, but shall continue to have all rights and other obligations of a Fronting Bank hereunder relating to any Letter of Credit issued by it prior to such date. The Agent shall promptly appoint a replacement Fronting Bank as soon as practicable, which, so long as no Default or Event of Default exists, shall be reasonably acceptable to the relevant Loan Party Agent.

2.5.         Applicable Foreign Borrower Sublimits. Notwithstanding anything to the contrary contained in this Section 2, in no event shall any Applicable Foreign Borrower be entitled to receive a Revolver Loan or the issuance of a Letter of Credit (and no Lender shall be required to make or support the same) if at the time of the proposed funding of such Revolver Loan or the issuance of such Letter of Credit (and after giving effect thereto and all pending requests for Revolver Loans and Letters of Credit by or on behalf of such Borrower), the sum of (a) the Dollar Equivalent of the outstanding amount of all Revolver Loans made to such Borrower on such date and (b) the LC Obligations of such Borrower on such date exceeds the lesser of such Borrower’s individual Borrowing Base or the Applicable Foreign Borrower Commitment. If as a result of fluctuations in Exchange Rates or otherwise the Dollar Equivalent of the sum of all outstanding Revolver Loans made to an Applicable Foreign Borrower and the LC Obligations of such Borrower exceed such Borrower’s Applicable Foreign Borrower Commitment, the excess amount shall be payable by the Applicable Foreign Borrower within three (3) Business Days following written demand by the Agent. In no event shall the aggregate Applicable Foreign Borrower Commitments for all members of a Foreign Borrower Group exceed the Foreign Revolver Commitments for such Foreign Borrower Group.

Section 3.           INTEREST, FEES AND CHARGES

3.1.         Interest.

3.1.1.            Rates and Payment of Interest.

(a)            The Obligations shall bear interest as follows:

(i)           in the case of a U.S. Base Rate Loan, at the U.S. Base Rate in effect from time to time, plus the Applicable Margin for such U.S. Base Rate Loan;

(ii)            in the case of a European Base Rate Loan, at the European Base Rate in effect from time to time, plus the Applicable Margin for European Base Rate Loans;

(iii)           in the case of a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin for LIBOR Loans;

(iv)           in the case of any other Dutch Kraton Facility Obligation (other than Secured Bank Product Obligations) that is then due and payable (including, to the extent permitted by law, interest not paid when due), at the European Base Rate in effect from time to time, plus the Applicable Margin for European Base Rate Loans; and

[Kraton] Second A&R Loan, Security and Guarantee Agreement

(v)            in the case of any other U.S. Facility Obligation (other than Secured Bank Product Obligations) that is then due and payable (including, to the extent permitted by law, interest not paid when due), at the U.S. Base Rate in effect from time to time, plus the Applicable Margin for the related U.S. Base Rate Loans.

Interest shall accrue from the date the Loan is advanced or the Obligation becomes payable, until paid by the applicable Borrower(s). If a Loan is repaid on the same day made, one Business Day’s interest shall accrue.

(b)            Interest on the Revolver Loans shall be payable in the currency of the underlying Revolver Loan.

(c)            If all or a portion of (i) the principal amount of any Loan, (ii) any interest payable thereon or (iii) following notice from the Agent, any other amounts payable hereunder, in each case, shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest (including post-petition interest during the pendency of any Insolvency Proceeding) at a rate per annum that is (x) in the case of overdue principal, the Default Rate or (y) in the case of any overdue interest, to the extent permitted by Applicable Law, the Default Rate, from and including the date of such non-payment to but excluding the date on which such amount is paid in full (after as well as before judgment). Payment or acceptance of the increased rates of interest provided for in this Section 3.1.1(c) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Agent, any Security Trustee or any Lender.

(d)            Interest accrued on the Loans shall be due and payable in arrears, (i) for any Base Rate Loan or on the first day of each month; (ii) for any LIBOR Loan, on the last day of its Interest Period (and, if its Interest Period exceeds three months, at the end of each period of three months) and (iii) on any date of prepayment, with respect to the principal amount of Loans being prepaid. In addition, interest accrued on the (1) U.S. Revolver Loans shall be due and payable on the U.S. Revolver Commitment Termination Date and (2) Dutch Kraton Revolver Loans shall be due and payable on the Dutch Kraton Revolver Commitment Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the Loan Documents and, if no payment date is specified, shall be due and payable on demand. Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on demand.

3.1.2.            Application of LIBOR to Outstanding Loans.

(a)            Borrowers may on any Business Day, subject to delivery of a Notice of Conversion/Continuation and the other terms hereof, elect to convert any portion of any Base Rate Loan funded in Dollars, Euros or Sterling (as applicable) to, or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR Loan. During any Event of Default, the Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a LIBOR Loan.

(b)           Whenever Borrowers within a Borrower Group desire to convert or continue Loans as LIBOR Loans, the relevant Loan Party Agent shall give the Agent (and in the case of any such request by Dutch Kraton Borrowers Bank of America (London)) a Notice of Conversion/Continuation, no later than 11:00 a.m. (Local Time) or 1:00 pm (Local Time) in the case of a request on behalf of U.S. Borrowers at least three (3) Business Days prior to the requested conversion or continuation date.

[Kraton] Second A&R Loan, Security and Guarantee Agreement

Promptly after receiving any such notice, the Agent shall notify each Applicable Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest Period (which shall be deemed to be thirty (30) days if not specified). If, upon the expiration of any Interest Period in respect of any LIBOR Loans, the relevant Loan Party Agent shall have failed to deliver a Notice of Conversion/Continuation with respect thereto as required above, Borrowers shall be deemed to have elected to convert such Loans into Base Rate Loans.

3.1.3.           Interest Periods. In connection with the making, conversion or continuation of any LIBOR Loans, the relevant Loan Party Agent, on behalf of the applicable Borrower(s), shall select an interest period to apply (the “Interest Period”), which interest period shall be a one, two, three, six (or if available to all Applicable Lenders as determined by such Applicable Lenders in good faith based upon prevailing market conditions) twelve month period; provided, however, that:

(a)            the Interest Period shall commence on the date the Loan is made or continued as, or converted into, a LIBOR Loan, and shall expire on the numerically corresponding day in the calendar month at its end;

(b)            if any Interest Period commences on a day for which there is no corresponding day in the calendar month at its end or if such corresponding day falls after the last Business Day of such month, then the Interest Period shall expire on the last Business Day of such month;

(c)           if any Interest Period would expire on a day that is not a Business Day, the period shall expire on the next Business Day; and

(d)           no Interest Period shall extend beyond the Facility Termination Date (or, in the case of any Loan owing by (i) any U.S. Borrower, the U.S. Revolver Commitment Termination Date, or (ii) any Dutch Kraton Borrower, the Dutch Kraton Revolver Commitment Termination Date, in each case if earlier).

3.2.          Fees.

3.2.1.            Unused Line Fee.

(a)            Dutch Unused Line Fee. Dutch Kraton Borrowers shall pay to the Agent for the Pro Rata benefit of Dutch Kraton Lenders, a fee equal to 0.375% per annum times the average daily amount by which the Dutch Kraton Revolver Commitments exceed the Dutch Kraton Revolver Exposure during any month. Notwithstanding anything to the contrary set forth herein, outstanding Dutch Kraton Swingline Loans shall not be taken into account when determining Dutch Kraton Revolver Exposure for purposes of this Section 3.2.1(a). Such fee shall be payable in arrears, on the first day of each month and on the Dutch Kraton Revolver Commitment Termination Date.

(b)            U.S. Unused Line Fee. U.S. Borrowers shall pay to the Agent, for the Pro Rata benefit of U.S. Lenders, a fee equal to 0.375% per annum times the average daily amount by which the U.S. Revolver Commitments exceed the U.S. Revolver Exposure during any month. Notwithstanding anything to the contrary set forth herein, outstanding U.S. Swingline Loans shall not be taken into account when determining U.S. Revolver Exposure for purposes of this Section 3.2.1(b). Such fee shall be payable in arrears, on the first day of each month and on the U.S. Revolver Commitment Termination Date.

[Kraton] Second A&R Loan, Security and Guarantee Agreement

3.2.2.                   Dutch Letters of Credit Fees. Each Applicable Dutch Kraton Borrower shall pay (i) to the Agent, for the Pro Rata benefit of Dutch Kraton Lenders, a fee equal to the per annum rate of the Applicable Margin in effect for Letter of Credit Fees times the average daily stated amount of such Applicable Dutch Kraton Borrower’s Dutch Letters of Credit, which fee shall be payable monthly in arrears, on the first day of each month; (ii) to each Dutch Kraton Fronting Bank, for its own account, a fronting fee equal to 0.125% per annum on the stated amount of each Dutch Kraton Letter of Credit issued by it, which fee shall be payable monthly in arrears, on the first day of each month; and (iii) to each Dutch Kraton Fronting Bank, for its own account, all customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of Dutch Kraton Letters of Credit issued by it, which charges shall be paid as and when incurred.

3.2.3.                   U.S. Letters of Credit Fees. U.S. Borrowers shall pay (i) to the Agent, for the Pro Rata benefit of U.S. Lenders, a fee equal to the per annum rate of the Applicable Margin in effect for Letter of Credit Fees times the average daily stated amount of U.S. Letters of Credit (based on the Dollar Equivalent thereof), which fee shall be payable monthly in arrears, on the first day of each month; (ii) to each U.S. Fronting Bank, for its own account, a fronting fee equal to 0.125% per annum on the stated amount of each U.S. Letter of Credit issued by it, which fee shall be payable monthly in arrears, on the first day of each month; and (iii) to each U.S. Fronting Bank, for its own account, all customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of U.S. Letters of Credit issued by it, which charges shall be paid as and when incurred.

3.2.4.                   Other Fees. The Borrowers shall pay such other fees as described in the Fee Letter.

3.3.        Computation of Interest and Fees. All interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on a year of 360 days, or, in the case of interest on U.S. Base Rate Loans (unless U.S. Base Rate is being determined based on clause (c) of the definition thereof) or Loans denominated in Sterling, on the basis of a 365 day year. Each determination by the Agent of any interest, fees or interest rate hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate, refund or proration. All fees payable under Section 3.2 are compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money, except to the extent such treatment is inconsistent with any Applicable Law. A certificate setting forth in reasonable detail amounts payable by any Borrower under Section 3.4, 3.7 or 3.10 and the basis therefor, submitted to a Loan Party Agent by the Agent or the affected Lender or Fronting Bank shall be final, conclusive and binding for all purposes, absent manifest error, and Borrowers shall pay such amounts to the appropriate party within ten (10) Business Days following receipt of the certificate.

3.4.         Reimbursement Obligations. Borrowers shall reimburse the Agent and Security Trustees for all Extraordinary Expenses. In addition to such Extraordinary Expenses, Borrowers shall also reimburse the Agent and Security Trustees for all reasonable and documented legal, accounting, appraisal and other reasonable and documented fees, costs and expenses, without duplication, incurred by them in connection with (a) negotiation and preparation of any Loan Documents, including any amendment or other modification thereof; (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of the Agent’s or any Security Trustee’s Liens on any such Collateral, to maintain any insurance required hereunder or to verify such Collateral; and (c) each inspection, field exam, audit or appraisal with respect to any Loan Party or Collateral, whether prepared by the Agent’s personnel or a third party (subject to the limitations of Section 10.1.1). All reasonable and documented legal and accounting fees incurred by Agent Professionals or any applicable Security Trustee shall be charged to

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Borrowers at the actual rate charged by such Agent Professionals or such Security Trustee; provided that Borrower’s obligation to reimburse Agent and Security Trustees for legal fees shall be limited to the reasonable and documented legal fees and expenses of Holland & Knight LLP, U.S. counsel to the Agent, Norton Rose Fulbright LLP, as foreign counsel to the Agent and Security Trustees, and if necessary, of one local counsel in each other relevant jurisdiction (which may include a local counsel acting in each of multiple jurisdictions, so long as no Event of Default then exists, with the written consent of Parent, such consent not to be unreasonably withheld). In addition to the Extraordinary Expenses of Agent and Security Trustees, upon the occurrence and during the continuance of an Event Default, Borrowers shall reimburse Fronting Banks and Lenders for the reasonable and documented fees, charges and disbursements of one counsel (and if necessary, of one local counsel in each other relevant jurisdiction (which may include a local counsel acting in each of multiple jurisdictions)) for the Fronting Banks and Lenders, as a whole, in connection with the enforcement, collection or protection of their respective rights under the Loan Documents, including all such expenses incurred during any workout, restructuring or Insolvency Proceeding; provided, that, notwithstanding anything to the contrary herein, in the event that there is a conflict of interest amongst the Lenders on the one hand or the Agent and the Lenders on the other hand, the Lenders may engage and be reimbursed for one additional counsel, subject to the foregoing limitations. If, for any reason (including inaccurate reporting on financial statements), it is determined that a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrowers shall pay to the Agent, for the Pro Rata benefit of Lenders, an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid. All amounts payable by Borrowers under this Section 3.4 shall be due and payable within ten (10) Business Days of demand.

3.5.             Illegality. If any Lender in good faith determines that any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund LIBOR Loans, or to determine or charge interest rates based upon the European Base Rate, LIBOR, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell bills of exchange denominated in, or to take deposits of, a currency in the London interbank market, or then, on notice thereof by such Lender to the Agent and Parent, any obligation of such Lender to make or continue affected LIBOR Loans or to convert Base Rate Loans to affected LIBOR Loans shall be suspended until such Lender notifies the Agent that the circumstances giving rise to such determination no longer exist. Upon delivery of such notice, Borrowers of the affected Borrower Group may revoke any pending request for a Borrowing of, conversion to or continuation of any Loans and shall upon demand from such Lender (with a copy to the Agent), prepay or, if applicable, convert all affected LIBOR Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or promptly, if such Lender may not lawfully continue to maintain such LIBOR Loans. Upon any such prepayment or conversion, Borrowers of the affected Borrower Group shall also pay accrued interest on the amount so prepaid or converted. If any Lender invokes this Section 3.5, such Lender shall use commercially reasonable efforts to notify a Loan Party Agent and the Agent when the conditions giving rise to such action no longer exists, provided, however, that such Lender shall have no liability to Borrowers or to any other Person for its failure to provide such notice. Each Lender (solely to the extent having multiple Lending Offices) agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

3.6.             Inability to Determine Rates. Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify the Agent (with, in the case of the Required Lenders, a copy to the Borrower) that the Borrower or Required Lenders (as applicable) have determined, that:

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(i)         adequate and reasonable means do not exist for ascertaining LIBOR for any requested Interest Period, including, without limitation, because the LIBOR Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or

(ii)       the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans, provided that, at the time of such statement, there is no successor administrator that is satisfactory to the Agent, that will continue to provide LIBOR after such specific date (such specific date, the “Scheduled Unavailability Date”); or

(iii)       syndicated loans currently being executed, or that include language similar to that contained in this Section 3.6, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,

then, reasonably promptly after such determination by the Agent or receipt by the Agent of such notice, as applicable, the Agent and the Borrowers may amend this Agreement to replace LIBOR with (x) one or more SOFR-Based Rates or (y) another alternate benchmark rate giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such benchmarks, which adjustment or method for calculating such adjustment shall be published on an information service as selected by the Agent from time to time in its reasonable discretion and may be periodically updated (the “Adjustment”; and any such proposed rate, a “LIBOR Successor Rate”), and any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after the Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Agent written notice that such Required Lenders (A) in the case of an amendment to replace LIBOR with a rate described in clause (x), object to the Adjustment; or (B) in the case of an amendment to replace LIBOR with a rate described in clause (y), object to such amendment; provided that for the avoidance of doubt, in the case of clause (A), the Required Lenders shall not be entitled to object to any SOFR-Based Rate contained in any such amendment. Such LIBOR Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Agent, such LIBOR Successor Rate shall be applied in a manner as otherwise reasonably determined by the Agent.

If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Agent will promptly so notify the Borrower and each Lender.  Thereafter, (x) the obligation of the Lenders to make or maintain LIBOR Loans shall be suspended, (to the extent of the affected LIBOR Loans or Interest Periods), and (y) the European Base Rate component shall no longer be utilized in determining the Base Rate.  Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of LIBOR Loans (to the extent of the affected LIBOR Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans (subject to the foregoing clause (y)) in the amount specified therein.

Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBOR Successor Rate be less than zero for purposes of this Agreement.

In connection with the implementation of a LIBOR Successor Rate, the Agent will have the right to make LIBOR Successor Rate Conforming Changes from time to time and, notwithstanding anything to

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the contrary herein or in any other Loan Document, any amendments implementing such LIBOR Successor Rate Conforming Changes will become effective without any further action or consent of any other party to this Agreement.

3.7.          Increased Costs; Capital Adequacy.

3.7.1.                   Change in Law. If any Change in Law shall:

(a)                 impose, modify or deem applicable any reserve, liquidity, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in LIBOR) or Fronting Bank;

(b)                 subject any Lender or Fronting Bank to any Taxes (other than (i) Indemnified Taxes, which shall be covered solely by Section 5.8.1, (ii) Excluded Taxes, (iii) Other Taxes, which shall be covered solely by Section 5.8.1, or (iv) Taxes described in Section 5.8.2(b)(ii)) on its Loans, Letters of Credit, Commitments or other Obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(c)                 impose on any Lender or Fronting Bank or the London interbank market or any other condition, cost or expense affecting any Loan, Loan Document, Letter of Credit or participation in LC Obligations;

and the result thereof shall be to increase the cost to such Lender of making, converting or continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or Fronting Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or Fronting Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or Fronting Bank, the Borrower Group to which such Lender or Fronting Bank has a Commitment shall pay to such Lender or Fronting Bank such additional amount or amounts as will compensate such Lender or Fronting Bank for such additional costs incurred or reduction suffered; provided, further, however, that the Borrowers will only be required to pay such additional amounts as a result of a Change in Law if it is the general policy or practice of such Lender or Fronting Bank to pass on such costs to similarly situated borrowers under similar credit facilities (to the extent such Lender or such Fronting Bank has the right under such similar credit facilities to do so).

3.7.2.                  Capital Adequacy. If any Lender or Fronting Bank determines that any Change in Law affecting such Lender or Fronting Bank or any Lending Office of such Lender or such Lender’s or Fronting Bank’s holding company, if any, regarding capital, liquidity or leverage requirements has or would have the effect of reducing the rate of return on such Lender’s, Fronting Bank’s or holding company’s capital as a consequence of this Agreement, or such Lender’s or Fronting Bank’s Commitments, Loans, Letters of Credit or participations in LC Obligations to a level below that which such Lender, Fronting Bank or holding company could have achieved but for such Change in Law (taking into consideration such Lender’s, Fronting Bank’s and holding company’s policies with respect to capital adequacy and liquidity), then from time to time the Borrower Group to which such Lender or Fronting Bank has a Commitment will pay to such Lender or Fronting Bank, as the case may be, such additional amount or amounts as will compensate it or its holding company for any such reduction suffered, in each case, in accordance with Section 3.3 provided, further, however, that the Borrowers will only be required to pay such additional amounts as a result of a Change in Law if it is the general policy or practice of such Lender or Fronting Bank to pass on such costs to similarly situated borrowers under similar credit facilities (to the extent such Lender or such Fronting Bank has the right under such similar credit facilities to do so).

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

3.7.3.                   Compensation. Failure or delay on the part of any Lender or Fronting Bank to demand compensation pursuant to this Section 3.7 shall not constitute a waiver of its right to demand such compensation, but Borrowers of a Borrower Group shall not be required to compensate a Lender to such Borrower Group or Fronting Bank for any increased costs incurred or reductions suffered more than six (6) months prior to the date that the Lender or Fronting Bank notifies a Loan Party Agent of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or Fronting Bank’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six (6) month period referred to above shall be extended to include the period of retroactive effect thereof).

3.8.         [Reserved].

3.9.          Mitigation. If any Lender gives a notice under Section 3.5 or requests compensation under Section 3.7, or if any Borrower is required to pay additional amounts or indemnity payments with respect to a Lender under Section 5.8, then such Lender shall use reasonable efforts to designate a different Lending Office or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (a) would eliminate the need for such notice or reduce amounts payable or to be withheld in the future, as applicable; and (b) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or unlawful. The Borrower or Borrowers of each affected Borrower Group shall pay all reasonable costs and expenses incurred by any Lender that has issued a Commitment to such Borrower Group in connection with any such designation or assignment.

3.10.      Funding Losses. Upon written demand of any Lender (with a copy to the Agent), which demand shall set forth in reasonable detail the basis for requesting such amount, the Borrowers shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense reasonably incurred if for any reason (other than a default by a Lender) (a) any Borrowing of, or conversion to or continuation of, an LIBOR Loan does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment or conversion of an LIBOR Loan occurs on a day other than the end of its Interest Period, or (c) any Borrower of any Borrower Group fails to repay an LIBOR Loan when required hereunder, then Borrowers of such Borrower Group shall pay to the Agent its customary administrative charge and to each Lender all losses and expenses that it sustains as a consequence thereof, including any loss or expense arising from liquidation or redeployment of funds or from fees payable to terminate deposits of matching funds, but excluding loss of margin. All amounts payable by Borrowers under this Section 3.10 shall be due and payable in accordance with Section 3.3. Lenders shall not be required to purchase deposits in the London interbank market or any other applicable market to fund any LIBOR Loan, but the provisions hereof shall be deemed to apply as if each Lender had purchased such deposits to fund such Loans.

3.11.      Maximum Interest. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (“maximum rate”). If the Agent or any Lender shall receive interest in an amount that exceeds the maximum rate, the excess interest shall be applied to the principal of the Obligations of the Borrower Group to which such excess interest relates or, if it exceeds such unpaid principal, refunded to such Borrower Group. In determining whether the interest contracted for, charged or received by the Agent or a Lender exceeds the maximum rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an

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expense, fee or premium rather than interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

Section 4.                LOAN ADMINISTRATION

4.1.          Manner of Borrowing and Funding Loans.

4.1.1.                   Notice of Borrowing.

(a)                U.S. Revolver Loans. Whenever any U.S. Borrower desires funding of a Borrowing of Revolver Loans, the North American Loan Party Agent shall give the Agent a Notice of Borrowing. Such notice must be received by the Agent no later than 11:00 a.m. (Local Time) (i) on the Business Day of the requested funding date, in the case of Base Rate Loans and (ii) at least three (3) Business Days prior to the requested funding date, in the case of LIBOR Loans. Notices received after 11:00 a.m. (Local Time) shall be deemed received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the amount of the Borrowing, (B) the requested funding date (which must be a Business Day), (C) whether the Borrowing is to be made as a U.S. Base Rate Loan or a LIBOR Revolver Loan, in the case of a U.S. Borrower, (D) in the case of LIBOR Loans, the duration of the applicable Interest Period (which shall be deemed to be one (1) month if not specified) and (E) the Borrower Group Commitment under which such Borrowing is proposed to be made.

(b)                 Dutch Kraton Revolver Loans. Whenever any Dutch Kraton Borrower desires funding of a Borrowing of Revolver Loans, the Foreign Loan Party Agent shall give the Agent and Bank of America (London) a Notice of Borrowing. Such notice must be received by the Agent and Bank of America (London) no later than 11:00 a.m. (Local Time) (i) at least two (2) Business Days prior to the requested funding date, in the case of Base Rate Loans; provided that a Notice of Borrowing that requests a Revolver Loan denominated other than in Euros must be received no later than 11:00 a.m. (Local Time) three (3) Business Days prior to the requested funding date (or such shorter time as may be agreed to by the Agent and Dutch Kraton Lenders) and (ii) at least three (3) Business Days prior to the requested funding date in the case of LIBOR Loans. Notices received after 11:00 a.m. (Local Time) shall be deemed received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify (u) the amount of the Borrowing, (v) the requested funding date (which must be a Business Day), (w) whether the Borrowing is to be made as a European Base Rate Loan or a LIBOR Loan, (x) in the case of LIBOR Loans, the duration of the applicable Interest Period (which shall be deemed to be one month if not specified), (y) the name of the Applicable Dutch Kraton Borrower and (z) the currency in which such Loan will be denominated (which must be a currency permitted under this Agreement for such Loan).

(c)                 Dutch Kraton Swingline Loans. Whenever any Dutch Kraton Borrower desires funding of a Borrowing of Swingline Loans, the Foreign Loan Party Agent shall give the Agent and Bank of America (London) a Notice of Borrowing. Such notice must be received by the Agent and Bank of America (London) no later than 11:00 a.m. (Local Time) on the Business Day of the requested funding date provided that a Notice of Borrowing that requests a Swingline Loan denominated in Dollars or Sterling must be received no later than 11:00 a.m. (Local Time) three (3) Business Days prior to the requested funding date (or such shorter time as may be agreed to by the Agent). Notices received after 11:00 a.m. (Local Time) shall be deemed received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the amount of the Borrowing, (B) the requested funding date (which must be a Business Day), (C) the name of the Applicable Dutch Kraton Borrower and (D) the currency in which such Loan will be denominated (which must be a currency permitted under this Agreement for such Loan).

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(d)                 U.S. Swingline Loans. Whenever any U.S. Borrower desires funding of a Borrowing of Swingline Loans, the North American Loan Party Agent shall give the Agent a Notice of Borrowing. Such notice must be received by the Agent no later than 11:00 a.m. (Local Time) on the Business Day of the requested funding date. Notices received after 11:00 a.m. (Local Time) shall be deemed received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the amount of the Borrowing and (B) the requested funding date (which must be a Business Day).

(e)                 Deemed Requests for Revolver Loans. Unless payment is otherwise timely made by each Borrower within a Borrower Group, the becoming due of any amount required to be paid with respect to any of the Obligations of the Loan Party Group to which such Borrower Group belongs (whether principal, interest, fees or other charges, including unused line fees payable under Section 3.2.1, Extraordinary Expenses, LC Obligations and Cash Collateral) shall be deemed to be a request for Revolver Loans by such Borrower Group on the due date in the amount of such Obligations and shall bear interest at the per annum rate applicable hereunder to Base Rate Loans, in the case of such Obligations (other than Secured Bank Product Obligations) owing by any Loan Party. The proceeds of such Revolver Loans shall be disbursed as direct payment of the relevant Obligation.

(f)                  Controlled Disbursement Accounts. If any Borrower within a Borrower Group establishes a controlled disbursement account with Bank of America or any branch or Affiliate of Bank of America, then the presentation for payment of any check, ACH or electronic debit or other payment item drawn on such account at a time when there are insufficient funds to cover it shall be deemed to be a request for Revolver Loans by such Borrower Group on the date of such presentation, in the amount of such payment item, and shall bear interest at the per annum rate applicable hereunder to Base Rate Loans, in the case of insufficient funds owing by any Loan Party. The proceeds of such Revolver Loans may be disbursed directly to the controlled disbursement account or other appropriate account.

4.1.2.                   Fundings by Lenders; Settlement.

(a)                 Each Applicable Lender shall timely honor its Borrower Group Commitment by funding its Pro Rata share of each Borrowing of Revolver Loans under such Borrower Group Commitment that is properly requested hereunder. The Agent shall endeavor to notify the Applicable Lenders of each Notice of Borrowing (or deemed request for a Borrowing) by (i) 12:00 noon (Local Time) on the proposed funding date for Base Rate Loans to U.S. Borrowers, (ii) 12:00 noon (Local Time) two (2) Business Days before any proposed funding date for Base Rate Loans to Foreign Borrowers, or (iii) 12:00 noon (Local Time) at least two (2) Business Days before any proposed funding of LIBOR Loans. Each Applicable Lender shall fund to the Agent such Lender’s Pro Rata share of the Borrowing to the account specified by the Agent in immediately available funds not later than 2:00 p.m. (Local Time) on the requested funding date, unless the Agent’s notice is received after the times provided above, in which event each Applicable Lender shall fund its Pro Rata share by 11:00 a.m. (Local Time) on the next Business Day. Subject to its receipt of such amounts from the Applicable Lenders, the Agent shall disburse the proceeds of the Revolver Loans as directed by the applicable Loan Party Agent. Unless the Agent shall have received (in sufficient time to act) written notice from an Applicable Lender that it does not intend to fund its Pro Rata share of a Borrowing, the Agent may assume that such Applicable Lender has deposited or promptly will deposit its share with the Agent, and the Agent may disburse a corresponding amount to the Borrower or Borrowers within such Borrower Group. If an Applicable Lender’s share of any Borrowing is not received by the Agent, then the Borrower or Borrowers within the Borrower Group jointly and severally agree to repay to the Agent on demand the amount of such share, together with interest thereon from the date disbursed until repaid, at the rate applicable to such Borrowing. Notwithstanding the foregoing, the Agent may, in its discretion, fund any request for a Borrowing of Revolver Loans as Swingline Loans. Each Applicable Lender at its option may make any

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

LIBOR Loan by causing any domestic or foreign branch or Affiliate of such Applicable Lender to make such LIBOR Loan; provided that any exercise of such option shall not affect the obligation of the applicable Borrowers to repay such LIBOR Loan in accordance with the terms of this Agreement.

(b)                 To facilitate administration of the Revolver Loans, the Lenders, the Swingline Lenders and the Agent agree (which agreement is solely among them, and not for the benefit of or enforceable by any Borrower or any other Loan Party) that settlement among them with respect to Swingline Loans and other Revolver Loans may take place on a date determined from time to time by the Agent, which shall occur at least once every (i) five (5) Business Days with respect to U.S. Swingline Loans and any other Revolver Loans and (ii) ten (10) Business Days with respect to Dutch Kraton Swingline Loans. On each settlement date, settlement shall be made with each Lender in accordance with the Settlement Report delivered by the Agent to the Lenders. Between settlement dates, the Agent may in its discretion (but is not obligated to) apply payments on Revolver Loans to Swingline Loans, regardless of any designation by a Loan Party Agent or any Borrower or any provision herein to the contrary. Each Lender’s obligation to make settlements with the Agent is absolute and unconditional, without offset, counterclaim or other defense, and whether or not the Commitments have terminated, an Overadvance exists or the conditions in Section 6 are satisfied. If, due to an Insolvency Proceeding with respect to any Borrower or any other Loan Party or otherwise, any Swingline Loan may not be settled among the Lenders hereunder, then each Applicable Lender shall be deemed to have purchased from the applicable Swingline Lender a Pro Rata participation in each unpaid Swingline Loan and shall transfer the amount of such participation to the applicable Swingline Lender, in immediately available funds, within one Business Day after the Agent’s request therefor.

4.1.3.                   Notices. Each Borrower authorizes the Agent and Lenders to extend Loans, convert or continue Revolver Loans, effect selections of interest rates, and transfer funds to or on behalf of applicable Borrowers based on telephonic or e-mailed instructions by Loan Party Agents to the Agent. Each Loan Party Agent shall confirm each such request by prompt delivery to the Agent of a Notice of Borrowing or Notice of Conversion/Continuation, if applicable, but if it differs in any material respect from the action taken by the Agent or Lenders, the records of the Agent and Lenders shall govern. Neither the Agent nor any Lender shall have any liability for any loss suffered by a Borrower as a result of the Agent or any Lender acting upon its understanding of telephonic or e-mailed instructions from a person believed in good faith by the Agent or any Lender to be a person authorized to give such instructions on a Loan Party Agent’s behalf.

4.2.         Defaulting Lender.

4.2.1.                   Reallocation of Pro Rata Share; Amendments. For purposes of determining Lenders’ obligations to fund or participate in Loans or Letters of Credit, the Agent may exclude the Commitments and Loans of any Defaulting Lender from the calculation of Pro Rata shares. If any Loan or Letter of Credit is outstanding at the time a Lender becomes a Defaulting Lender, then all or any part of such Loan or Letter of Credit shall be reallocated among the non-Defaulting Lenders in accordance with their Pro Rata shares, but only to the extent that such reallocation would not cause such non-Defaulting Lenders’ Dutch Kraton Revolver Exposure or U.S. Revolver Exposure, as applicable, to exceed such non-Defaulting Lender’s Commitment. A Defaulting Lender shall have no right to vote on any amendment, waiver or other modification of a Loan Document, except as provided in Section 14.1.1(c). Subject to Section 14.24, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a non-Defaulting Lender as a result of such non-Defaulting Lender’s increased exposure following such reallocation.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

4.2.2.                   Payments; Fees. The Agent may, in its discretion, receive and retain any amounts payable to a Defaulting Lender under the Loan Documents, and a Defaulting Lender shall be deemed to have assigned to the Agent such amounts until all Obligations owing to the Agent, non-Defaulting Lenders and other Secured Parties have been paid in full. The Agent may apply such amounts to the Defaulting Lender’s defaulted obligations, use the funds to Cash Collateralize such Lender’s LC Obligations, or readvance the amounts to Borrowers hereunder. A Lender shall not be entitled to receive any fees accruing hereunder during the period in which it is a Defaulting Lender, and the unfunded portion of its Commitment shall be disregarded for purposes of calculating the unused line fee under Section 3.2.1. If any LC Obligations owing to a Defaulting Lender are reallocated to other Lenders, fees attributable to such LC Obligations under Sections 3.2.2 or 3.2.3 shall be paid to such Lenders. The Agent shall be paid all fees attributable to LC Obligations that are not reallocated.

4.2.3.                  Cure. Borrowers, the Agent and each Fronting Bank may agree in writing that a Lender is no longer a Defaulting Lender. At such time, Pro Rata shares shall be reallocated without exclusion of such Lender’s Commitment and Loans, and all outstanding Revolver Loans, LC Obligations and other exposures under the Commitments shall be reallocated among Lenders and settled by the Agent (with appropriate payments by the reinstated Lender) in accordance with the readjusted Pro Rata shares. Unless expressly agreed by Borrowers, the Agent and each Fronting Bank, no reinstatement of a Defaulting Lender shall constitute a waiver or release of claims against such Lender. The failure of any Lender to fund a Loan, to make a payment in respect of LC Obligations or otherwise to perform its obligations hereunder shall not relieve any other Lender of its obligations, and no Lender shall be responsible for default by another Lender.

4.3.       Number and Amount of LIBOR Loans; Determination of Rate. For ease of administration, all LIBOR Loans of the same Type to a Borrower Group having the same length and beginning date of their Interest Periods and the same currency shall be aggregated together, and such Loans shall be allocated among the Applicable Lenders on a Pro Rata basis. With respect to any Borrower Group, no more than six (6) Borrowings of LIBOR Loans may be outstanding at any time, and each Borrowing of LIBOR Loans when made, continued or converted shall be in a minimum amount of $1,000,000, or an increment of $100,000 in excess thereof. Upon determining LIBOR for any Interest Period requested by Borrowers within a Borrower Group, the Agent shall promptly notify the applicable Loan Party Agent thereof by telephone or electronically and, if requested by such Loan Party Agent, shall confirm any telephonic notice in writing.

4.4.        Loan Party Agents.

4.4.1.                   North American Loan Party Agent. Each U.S. Domiciled Loan Party hereby designates Kraton Polymers U.S. LLC (“North American Loan Party Agent”) as its representative and agent for all purposes under the Loan Documents, including requests for Loans and Letters of Credit, designation of interest rates, delivery or receipt of communications, preparation and delivery of any Borrowing Base and financial reports, receipt and payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with the Agent, any Fronting Bank or any Lender. North American Loan Party Agent hereby accepts such appointment.

4.4.2.                   Foreign Loan Party Agent. Each Dutch Kraton Dutch Domiciled Loan Party hereby designates each of Kraton Polymers U.S. LLC and Kraton Polymers Nederland B.V. (each, a “Foreign Loan Party Agent”) as its representative and agent for all purposes under the Loan Documents, including requests for Loans and Letters of Credit, designation of interest rates, delivery or receipt of communications, preparation and delivery of any Borrowing Base and financial reports, receipt and payment of Obligations, requests for waivers, amendments or other accommodations, actions under the

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Loan Documents (including in respect of compliance with covenants), and all other dealings with the Agent, any Security Trustee, any Fronting Bank or any Lender. Each Foreign Loan Party Agent hereby accepts such appointment.

4.4.3.                   Loan Party Agents Generally. The Agent, each Security Trustee, each Fronting Bank and each Lender shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any Notice of Borrowing) delivered by a Loan Party Agent on behalf of any Loan Party. The Agent, any Security Trustee, any Fronting Bank and any Lender may give any notice or communication with a Loan Party hereunder to a Loan Party Agent on behalf of such Loan Party. Each of the Agent, any Security Trustee, any Fronting Bank and any Lender shall have the right, in its discretion, to deal exclusively with a Loan Party Agent for any or all purposes under the Loan Documents. Each Loan Party agrees that any notice, election, communication, representation, agreement or undertaking made on its behalf by the applicable Loan Party Agent shall be binding upon and enforceable against it.

4.5.        One Obligation. Without in any way limiting any Guarantee of the Secured Obligations, (a) the U.S. Facility Secured Obligations owing by each U.S. Facility Loan Party shall constitute one general obligation of the U.S. Facility Loan Parties and (unless otherwise expressly provided in any Loan Document) shall be secured by the Agent’s Lien upon all Collateral of each U.S. Facility Loan Party, provided that each Credit Party shall be deemed to be a creditor of, and the holder of a separate claim against, each U.S. Facility Loan Party to the extent of any U.S. Facility Secured Obligations owed by such U.S. Facility Loan Party to such Credit Party and (b) the Dutch Kraton Facility Secured Obligations owing by each Dutch Kraton Facility Loan Party shall constitute one general obligation of the Dutch Kraton Facility Loan Parties and (unless otherwise expressly provided in any Loan Document) shall be secured by the Agent’s Lien upon all Collateral of each Dutch Kraton Facility Loan Party, provided that each Credit Party shall be deemed to be a creditor of, and the holder of a separate claim against, each Dutch Kraton Facility Loan Party to the extent of any Dutch Kraton Facility Secured Obligations owed by such Dutch Kraton Facility Loan Party to such Credit Party.

4.6.        Effect of Termination. On the effective date of termination of the Commitments, all Obligations shall be immediately due and payable, and any Lender may terminate its and its Affiliates’ Secured Bank Product Obligations (including, only with the consent of the Agent, any Treasury Management Services). All undertakings of Loan Parties contained in the Loan Documents shall survive, and the Agent and Security Trustees shall retain their Liens in the Collateral and all of their rights and remedies under the Loan Documents until Full Payment of the Secured Obligations. Notwithstanding Full Payment of the Secured Obligations, the Agent and Security Trustees shall not be required to terminate their Liens in any Collateral unless, with respect to any damages the Agent may incur as a result of the dishonor or return of Payment Items applied to Secured Obligations, the Agent receives (a) a written agreement, executed by the relevant Loan Party Agent and any Person whose advances are used in whole or in part to satisfy the Secured Obligations, indemnifying the Agent and Lenders from any such damages; or (b) such Cash Collateral as the Agent, in its Permitted Discretion, deems necessary to protect against any such damages. Sections 2.2, 2.3, 3.4, 3.7, 3.10, 5.4, 5.8, 5.9, 12, 14.2 and this Section 4.6, and the obligation of each Loan Party and Lender with respect to each indemnity given by it in any Loan Document, shall survive Full Payment of the Secured Obligations and any release relating to this credit facility.

Section 5.                PAYMENTS

5.1.         General Payment Provisions. All payments of Obligations shall be made without offset, counterclaim or defense of any kind, (other than for Taxes, as to which Section 5.8 applies), and in immediately available funds, not later than 1:00 p.m. (Local Time) on the due date. Any payment after

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

such time shall be deemed made on the next Business Day. If any payment under the Loan Documents shall be stated to be due on a day other than a Business Day, the due date shall be extended to the next Business Day and such extension of time shall be included in any computation of interest and fees. Any payment of an LIBOR Loan prior to the end of its Interest Period shall be accompanied by all amounts due under Section 3.10. Any prepayment of Loans made by a Borrower Group shall be applied first to costs and expenses of the Agent and Security Trustees (including any Extraordinary Expenses) relating to such Borrower Group, second to Base Rate Loans (and the Agent may, in its discretion, apply such prepayment to Swingline Loans before other Revolver Loans) of such Borrower Group, and then to LIBOR Loans of such Borrower Group; provided, however, that as long as no Default or Event of Default exists, prepayments of LIBOR Loans may, at the option of Borrowers of the applicable Borrower Group and the Agent, be held by the Agent as Cash Collateral and applied to such Loans at the end of their Interest Periods (in which case no compensation under Section 3.10 hereof shall be payable with respect to such prepayment). All payments with respect to any U.S. Facility Obligations shall be made in Dollars and all payments with respect to any other Obligation shall be made in the currency of the underlying Obligation. Any payment made contrary to the requirements of the preceding sentence shall be subject to the terms of Section 5.11.

5.2.         Repayment of Obligations.

(a)                 All (i) U.S. Facility Obligations shall be immediately due and payable in full on the U.S. Revolver Commitment Termination Date, and (ii) Dutch Kraton Facility Obligations shall be immediately due and payable in full on the Dutch Kraton Revolver Commitment Termination Date, in each case, unless payment of such Obligations is sooner required hereunder. Revolver Loans may be prepaid from time to time, without penalty or premium, subject to, in the case of LIBOR Loans, the payment of costs set forth in Section 3.10 (except to the extent provided in Section 5.1).

(b)                 If any Disposition in excess of $5,000,000 is comprised of proceeds from any U.S. Facility Collateral which is ABL Priority Collateral not in the Ordinary Course of Business, then 100% of the net proceeds of such Disposition of such U.S. Facility Collateral, shall be either applied to the U.S. Revolver Loans or used to Cash Collateralize the U.S. Letters of Credit, provided, that, such application to the U.S. Revolver Loans or to Cash Collateralize the U.S. Letters of Credit shall only occur in the event U.S. Availability (after giving pro forma effect to such proposed Disposition) is less than 15% of the U.S. Line Cap; provided, further, that the consideration for the U.S. Facility Collateral shall be 100% in cash. If any Disposition is comprised of proceeds from any Dutch Kraton Facility Collateral not in the Ordinary Course of Business, then 100% of the net proceeds of such Disposition shall be either applied to the Dutch Kraton Revolver Loans or used to Cash Collateralize the Dutch Letters of Credit. Revolver Loans may be prepaid from time to time without penalty or premium. Notwithstanding anything herein to the contrary, if an Overadvance exists, Borrowers of the Borrower Group owing such Overadvance shall, on the sooner of the Agent’s demand or the first Business Day after any Borrower of such Borrower Group has knowledge thereof (or, in the event such Overadvance is the result of fluctuations in Exchange Rates, within three (3) Business Days of the Agent’s demand or of any Borrower of such Borrower Group’s knowledge thereof), repay the outstanding Loans in an amount sufficient to reduce the principal balance of the related Overadvance Loan to zero. If as a result of fluctuations in Exchange Rates or otherwise the sum of all outstanding U.S. Revolver Loans and U.S. LC Obligations exceeds the U.S. Revolver Commitments, the excess amount shall be payable by the U.S. Borrowers within three (3) Business Days following demand by the Agent.

5.3.         Payment of Other Obligations. Obligations other than Loans, including LC Obligations and Extraordinary Expenses, shall be paid by Borrowers as provided in the Loan Documents, or, if no payment date is specified, within ten (10) Business Days of demand therefor by Agent.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

5.4.        Marshaling; Payments Set Aside. None of the Agent, Security Trustees, Fronting Banks or Lenders shall be under any obligation to marshal any assets in favor of any Loan Party or against any Secured Obligations. If any payment by or on behalf of any Borrower or Borrowers is made to the Agent, any Security Trustee, any Fronting Bank, or any Lender, or the Agent, any applicable Security Trustee, any Fronting Bank or any Lender exercises a right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Agent, such Security Trustee, such Fronting Bank or such Lender in its discretion) to be repaid to a Creditor Representative or any other Person, then to the extent of such recovery, the Secured Obligation originally intended to be satisfied, and all Liens, rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred.

5.5.          Post-Default Allocation of Payments.

5.5.1.                   Allocation. Notwithstanding anything herein to the contrary, during an Event of Default, monies to be applied to the Secured Obligations, whether arising from payments by or on behalf of any Loan Party, realization on Collateral, setoff or otherwise, shall be allocated as follows:

(a)           with respect to monies, payments, Property or Collateral of or from the U.S. Domiciled Loan Parties, together with any allocations pursuant to subclause (a)(ix) of any other clause of this Section 5.5.1:

(i)                 first, to all costs and expenses, including Extraordinary Expenses, owing to the Agent or any Security Trustee, to the extent owing by any U.S. Domiciled Loan Party;

(ii)               second, to all amounts owing to U.S. Swingline Lender on U.S. Swingline Loans;

(iii)               third, to all amounts owing to any U.S. Fronting Bank on U.S. LC Obligations;

(iv)               fourth, to all U.S. Facility Obligations constituting fees owing by the U.S. Domiciled Loan Parties (exclusive of any Foreign Facility Secured Obligations which are guaranteed by the U.S. Domiciled Loan Parties);

(v)              fifth, to all U.S. Facility Obligations constituting interest owing by the U.S. Domiciled Loan Parties (exclusive of any Foreign Facility Secured Obligations which are guaranteed by the U.S. Domiciled Loan Parties);

(vi)               sixth, to Cash Collateralization of U.S. LC Obligations;

(vii)              seventh, to the principal amount of all U.S. Revolver Loans and all Qualified Secured Bank Product Obligations of any U.S. Domiciled Loan Party (exclusive of any Qualified Secured Bank Product Obligations which are guaranteed by the U.S. Domiciled Loan Parties as guarantors of the Foreign Facility Obligations) to the extent a U.S. Bank Product Reserve has been established with respect thereto up to and including (with respect to Secured Bank Product Providers other than Bank of America and its Affiliates) the amount most recently specified to the Agent pursuant to the terms hereof;

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(viii)           eighth, to all other U.S. Facility Secured Obligations (exclusive of any Foreign Facility Secured Obligations which are guaranteed by the U.S. Domiciled Loan Parties); and

(ix)               ninth, to be applied to clause (b) below, to the extent there are insufficient funds for the Full Payment of all Secured Obligations under such clause.

(b)           with respect to monies, payments, Property or Collateral of or from any Dutch Kraton Dutch Domiciled Loan Party, together with any allocations pursuant to subclause (ix) of any clause of this Section 5.5.1:

(i)                 first, to all costs and expenses, including Extraordinary Expenses, owing to the Agent and the Security Trustees, to the extent owing by such Dutch Kraton Dutch Domiciled Loan Party;

(ii)               second, to all amounts owing to Dutch Kraton Swingline Lender on Dutch Kraton Swingline Loans to such Dutch Kraton Dutch Domiciled Loan Party;

(iii)                third, to all amounts owing by such Dutch Kraton Dutch Domiciled Loan Party to any Dutch Kraton Fronting Bank on Dutch Kraton LC Obligations of such Dutch Kraton Dutch Domiciled Loan Party;

(iv)              fourth, to all Dutch Kraton Facility Obligations of such Dutch Kraton Dutch Domiciled Loan Party constituting fees (exclusive of any other Foreign Facility Obligations which are guaranteed by such Dutch Kraton Dutch Domiciled Loan Party);

(v)              fifth, to all Dutch Kraton Facility Obligations of such Dutch Kraton Dutch Domiciled Loan Party constituting interest (exclusive of any other Foreign Facility Obligations which are guaranteed by such Dutch Kraton Dutch Domiciled Loan Party);

(vi)              sixth, to Cash Collateralization of Dutch Kraton LC Obligations of such Dutch Kraton Dutch Domiciled Loan Party;

(vii)             seventh, to the principal amount of all Dutch Kraton Revolver Loans and all Qualified Secured Bank Product Obligations of such Dutch Kraton Dutch Domiciled Loan Party (exclusive of any Qualified Secured Bank Product Obligations which are guaranteed by such Dutch Kraton Dutch Domiciled Loan Party) to the extent a Dutch Kraton Bank Product Reserve has been established with respect thereto up to and including (with respect to Secured Bank Product Providers other than Bank of America and its Affiliates) the amount most recently specified to the Agent pursuant to the terms hereof;

(viii)            eighth, to all other Dutch Kraton Facility Secured Obligations of such Dutch Kraton Dutch Domiciled Loan Party (exclusive of any other Foreign Facility Secured Obligations which are guaranteed by such Dutch Kraton Dutch Domiciled Loan Party); and

(ix)              ninth, to be applied ratably to the Secured Obligations of other Loan Parties that are the subject of a Guarantee by such Dutch Kraton Dutch Domiciled Loan Party in accordance with this Section 5.5.1 to the extent there are insufficient funds for the Full Payment of all such Secured Obligations.

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Amounts shall be applied to each category of Secured Obligations set forth within subsection (a) through (b) above, as applicable, until Full Payment thereof and then to the next category. If amounts are insufficient to satisfy a category, they shall be applied on a pro rata basis among the Secured Obligations in the category. Amounts distributed with respect to any Secured Bank Product Obligations or Qualified Secured Bank Product Obligations shall be the lesser of the Secured Bank Product Obligations or Qualified Secured Bank Product Obligations, as the case may be, last reported to the Agent or the actual Secured Bank Product Obligations or Qualified Secured Bank Product Obligations, as the case may be, as calculated by the Secured Bank Product Provider and reported to the Agent for determining the amount due. The Agent shall have no obligation to calculate the amount to be distributed with respect to any Secured Bank Product Obligations or Qualified Secured Bank Product Obligations, and may request a reasonably detailed calculation of such amount from the applicable Secured Party. If a Secured Party fails to deliver such calculation within five (5) Business Days following request by the Agent, the Agent may assume the amount to be distributed is zero (0). The allocations set forth in this Section 5.5.1 are solely to determine the rights and priorities of the Agent and Secured Parties as among themselves, and any allocation within subsection (a) through (b) of proceeds of the realization of Collateral may be changed by agreement among them without the consent of any Loan Party. This Section 5.5.1 is not for the benefit of or enforceable by any Borrower.

(c)                 Notwithstanding subsections (a) and (b) above, Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or, for the avoidance of doubt, with proceeds of any Collateral pledged by such Guarantor, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation to Obligations otherwise set forth above in this Section 5.5.1.

5.5.2.                  Erroneous Application. The Agent shall not be liable for any application of amounts made by it in good faith and, if any such application is subsequently determined to have been made in error, the sole recourse of any Lender or other Person to which such amount should have been made shall be to recover the amount from the Person that actually received it (and, if such amount was received by any Lender, such Lender hereby agrees to return it).

5.6.        Application of Payments. The ledger balance in the Dominion Accounts of each Borrower Group as of the end of a Business Day shall be applied to the Loan Party Group Obligations of such Borrower Group at the beginning of the next Business Day during the existence of any Cash Dominion Event; provided that the Agent may, in its discretion, either apply the ledger balance in any Dominion Account of any Dutch Kraton Borrower to the respective Loan Party Group Obligations of such Borrower Group or direct such balances to an operating account of a member of such Borrower Group, whether or not a Cash Dominion Event exists. If, as a result of such application, a credit balance exists, the balance shall not accrue interest in favor of Borrowers and shall be made available to Borrowers of the applicable Borrower Group as long as no Event of Default exists. If application thereof is not otherwise specified herein or in any other Loan Documents, each Borrower irrevocably waives the right to direct the application of any payments or Collateral proceeds, and agrees that the Agent shall have the continuing, exclusive right to apply and reapply same against the Obligations, in such manner as the Agent deems advisable; provided, however, that, unless an Event of Default has occurred and is continuing or otherwise directed by a Loan Party Agent, the Agent shall not apply any payments to any LIBOR Loans prior to the last day of the applicable Interest Period.

5.7.        Loan Account; Account Stated.

5.7.1.                  Loan Account. The Agent shall maintain in accordance with its usual and customary practices an account or accounts (“Loan Account”) evidencing the Obligations of Borrowers within each Borrower Group resulting from each Loan made to such Borrowers or issuance of a Letter of

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Credit for the account of Borrowers from time to time. Any failure of the Agent to record anything in the Loan Account, or any error in doing so, shall not limit or otherwise affect the obligation of any Borrower to pay any amount owing hereunder. With respect to U.S. Borrowers, the Agent may maintain a single Loan Account in the name of the North American Loan Party Agent, and each U.S. Borrower confirms that such arrangement shall have no effect on the joint and several character of its liability for the Secured Obligations including its guarantee of the Secured Obligations of the Foreign Borrowers.

5.7.2.                  Entries Binding. Entries made in the Loan Account shall constitute presumptive evidence of the information contained therein. If any information contained in the Loan Account is provided to or inspected by any Person, then such information shall be conclusive and binding on such Person for all purposes absent manifest error, except to the extent such Person notifies the Agent in writing within forty-five (45) days after receipt or inspection that specific information is subject to dispute.

5.8.          Taxes.

5.8.1.                U.S. Tax Matters.

(a)                 Payments Free of Taxes. All payments of any U.S. Facility Obligation by or on behalf of any U.S. Facility Loan Party shall be free and clear of and without deduction or withholding for any Taxes, unless required by Applicable Law. If Applicable Law requires any U.S. Facility Loan Party or the Agent to withhold or deduct any Tax (including backup withholding or withholding Tax) from any payment in respect of the U.S. Facility Obligations, the U.S. Facility Loan Party or the Agent shall pay the amount withheld or deducted to the relevant Governmental Authority in accordance with Applicable Law. If the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by the applicable U.S. Facility Loan Party shall be increased so that the applicable Credit Parties and Security Trustees receive an amount equal to the sum they would have received if no such withholding or deduction (including deductions for Indemnified Taxes and Other Taxes applicable to additional sums payable under this Section 5.8.1) had been made. Without limiting the foregoing, U.S. Borrowers shall timely pay all Other Taxes imposed in respect of this Agreement to the relevant Governmental Authorities.

(b)                Payment. The U.S. Facility Loan Parties shall indemnify, hold harmless and reimburse (within ten (10) days after demand therefor) each Credit Party and each Security Trustee for the full amount of any Indemnified Taxes or Other Taxes (including those attributable to amounts payable under this Section) withheld or deducted by any U.S. Facility Loan Party or the Agent, or paid by such Credit Party or such Security Trustee, with respect to any U.S. Facility Obligations, whether or not such Taxes were properly asserted by the relevant Governmental Authority, and including all reasonable expenses relating thereto. A certificate as to the amount of any such payment or liability delivered to a Loan Party Agent by a Credit Party or Security Trustee (with a copy to the Agent), shall be conclusive, absent manifest error. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Borrower, the relevant Loan Party Agent shall deliver to the Agent a receipt from the Governmental Authority or other evidence of payment reasonably satisfactory to the Agent.

(c)                 Treatment of Certain Refunds. If any party hereto determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 5.8.1 (including by the payment of additional amounts pursuant to this Section 5.8.1(c)), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (c) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (c), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

5.8.2.                   Dutch and Foreign Domiciled Loan Party Tax Matters. For the purposes of this Section 5.8.2 a “Relevant Borrower” shall mean the Dutch Kraton Borrowers and any other Foreign Domiciled Loan Party that is required to make a Tax Deduction in accordance with Applicable Law.

(a)           Tax Gross-Up.

(i)           All payments of any Foreign Facility Obligation by or on behalf of any Foreign Domiciled Loan Party shall be made without any Tax Deduction, unless required by Applicable Law.

(ii)           The Dutch Kraton Borrowers shall promptly upon becoming aware that a Foreign Domiciled Loan Party is required by Applicable Law to 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 made payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Dutch Kraton Borrowers and that Foreign Domiciled Loan Party.

(iii)          If a Tax Deduction is required by Applicable Law to be made by a Foreign Domiciled Loan Party, the amount of the payment due from that Foreign Domiciled Loan Party 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.

(b)          Tax Indemnity.

(i)           The Relevant Borrowers shall (within three (3) Business Days of demand by the Agent) pay to a Lender an amount equal to the loss, liability or cost which that Lender determines will be or has been (directly or indirectly) suffered for or on account of Taxes by that Lender in respect of a Loan Document.

(ii)           Clause (b)(i) above shall not apply:

(A)         with respect to any Taxes assessed on a Lender:

(1)                 under the law of the jurisdiction in which such Lender is incorporated or, if different, the jurisdiction (or jurisdictions) in which such Lender is treated as resident for tax purposes; or

[Kraton] Second A&R Loan, Security and Guarantee Agreement 

(2)            under the law of the jurisdiction in which such Lender’s Lending Office is located in respect of amounts received or receivable in such jurisdiction,

if such Taxes are imposed on or calculated by reference to the net income received or receivable by such Lender; or

(B)           to a loss, liability or cost that is compensated for by an increased payment under clause 5.8.2(a) above, or would have been compensated for by such an increased payment, but was not so compensated solely because the Lender failed to comply with Section 5.9; or

(C)          any United States federal withholding Tax imposed by FATCA.

(iii)          A Lender making, or intending to make a claim under Section 5.8.2(b)(i) above shall promptly notify Agent of the event which will give, or has given, rise to the claim, following which Agent shall notify the Borrowers.

(iv)         A Lender shall, on receiving a payment from the Relevant Borrowers under this Section 5.8.2(b), notify Agent.

(c)          Tax Credit. If a Relevant Borrower makes a Tax Payment and the relevant Lender determines that:

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

(ii)          that Lender has obtained, utilized and retained that Tax Credit,

the Lender shall promptly following receipt of such Tax Credit pay an amount to the Relevant Borrower which that Lender determines 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 Relevant Borrower.

(d)          Value Added Tax.

(i)           All amounts set out or expressed in a Loan Document to be payable by any party to any Lender which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to clause (ii) below, if VAT is or becomes chargeable on any supply made by any Lender to any party under a Loan Document, that party shall pay to the Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Lender shall promptly provide an appropriate VAT invoice to such party).

(ii)           If VAT is or becomes chargeable on any supply made by any Lender (the “Supplier”) to any other Lender (the “Recipient”) under a Loan Document, and any party other than the Recipient (the “Relevant Party”) is required by the terms of any Loan 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),

[Kraton] Second A&R Loan, Security and Guarantee Agreement

(A)           (where the Supplier is the person required to account to the relevant tax authority for the VAT), the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of VAT; the Recipient must (where this subsection (ii)(A) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

(B)           (where the Recipient is the person required to account to the relevant tax authority for the VAT), the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply. The Recipient must (where this subsection (ii)(B) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply.

(iii)          Where a Loan Document requires any party to reimburse or indemnify a Lender for any cost or expense incurred in connection with such Loan Document, the reimbursement or indemnity (as the case may be) shall be for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

(iv)         Any reference in this Section 5.8.2(d) to any party shall, at any time when such party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the Dutch Value Added Tax Code).

(v)         In relation to any supply made by a Lender to any party under a Loan Document, if reasonably requested by such Lender, that party must as promptly as reasonably practicable provide such Lender with details of that party’s VAT registration and such other information as is reasonably requested in connection with such Lender’s VAT reporting requirements in relation to such supply.