1321730--4/12/2007--Kraton_Polymers

related topics

{cost, regulation, environmental}

{operation, international, foreign}

{customer, product, revenue}

{debt, indebtedness, cash}

{property, intellectual, protect}

{product, market, service}

{personnel, key, retain}

{regulation, change, law}

{condition, economic, financial}

{product, liability, claim}

{investment, property, distribution}

Shell Chemicals provides significant operating and other services under agreements that are important to our business. The failure of Shell Chemicals to perform its obligations, or the termination of these agreements, could adversely affect our operations. The failure of our suppliers to perform their obligations under long-term supply agreements, or our inability to replace or renew these agreements when they expire, could increase our cost for these materials, interrupt production or otherwise adversely affect our results of operations. If we are not able to continue the technological innovation and successful commercial introduction of new products, our customers may turn to other producers to meet their requirements. Our end-use markets are highly competitive, and we may lose market share to other SBC producers or to producers of non-SBC products that can be substituted for our products. Chemical manufacturing is inherently hazardous, which could result in accidents that disrupt our operations or expose us to significant losses or liabilities. Regulation of our employees exposure to butadiene could require material expenditures or changes in our operations. Compliance with extensive environmental, health and safety laws could require material expenditures, changes in our operations or site remediation. We may be subject to losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical manufacturing. Regulatory changes applicable to us or our customers could adversely affect our financial condition and results of operations. We are subject to customs, international trade, antitrust, zoning and occupancy and labor and employment laws that could require us to modify our current business practices and incur increased costs. Our business relies on intellectual property and other proprietary information and our failure to protect our rights could harm our competitive advantages with respect to the manufacturing of some of our products. Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products. We may be liable for damages based on product liability claims brought against our customers in our end-use markets. Our relationship with our employees could deteriorate, which could adversely affect our operations. Loss of key personnel or our inability to attract and retain new qualified personnel could hurt our business and inhibit our ability to operate and grow successfully. As a global business, we are exposed to local business risks in different countries, which could have a material adverse effect on our financial condition or results of operations. Fluctuations in currency exchange rates may significantly impact our results of operations and may significantly affect the comparability of our results between financial periods. Downturns in general economic conditions could adversely affect our profitability. We generally do not have long-term contracts with our customers and the loss of customers could adversely affect our sales and profitability. Our substantial level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our senior secured credit facility and the 8.125% Notes. Our debt instruments, including the senior secured credit facility and the indenture governing the 8.125% Notes impose significant operating and financial restrictions on us.

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1321730--4/12/2007--Kraton_Polymers_LLC