Re Agreement

Zotefoams PLC
21 March 2006

21 March 2006





Commercial agreement between Zotefoams plc ('Zotefoams') and Sekisui Chemical
Company Limited and its subsidiaries ('Sekisui Group')





With immediate effect, Zotefoams and Sekisui Group have agreed to terminate
their commercial agency relationships in Europe and North America. Sekisui will
continue to act as distributor for Zotefoams' products in Asia until 30 April
2006.



During 2000 and 2001 Zotefoams entered into a number of worldwide sales and
marketing alliances for polyolefin foams with Sekisui Group, who act as
exclusive agent and distributor for Zotefoams in Continental Europe (through
their European subsidiary, Alveo AG ('Alveo')) and Asia respectively. Sekisui
Group also act as an agent for certain of Zotefoams' customers in North America
through its American subsidiary, Voltek LLC.



On 15 December 2005 and on 14 March 2006, Zotefoams announced that it had, for
some time, been in negotiations with Sekisui Group in relation to certain of its
obligations under two of these agreements. Zotefoams announced that while it was
still open to a resolution by other means, it had instigated arbitration
proceedings.



Termination of these arrangements was agreed subject to Zotefoams plc paying
Alveo a reduced termination fee of euro 1.4 million as well as dropping all
disputes due to be heard in arbitration. Zotefoams will assume direct
responsibility for all customer matters in all regions with plans to increase
direct sales resource to support this, although it is envisaged separate
agreements may be appropriate in Asia in the medium term.



In 2005, Zotefoams paid Sekisui Group approximately euro 1.5 million in agent's
commissions (principally to Alveo) under these arrangements. From 20 March 2006,
no further commissions will be earned by Sekisui Group.



Zotefoams is pleased that these disputes have been resolved with Sekisui and
looks forward to working directly with its customers.



Enquiries:


Zotefoams plc                                  0208-664-1600
David Stirling, Managing Director
Clifford Hurst, Finance Director

Financial Dynamics Limited                     0774-602-739 / 0207-831-3113
Sarah MacLeod / Deborah Scott




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