EXHIBIT 10.3
 
FIRST AMENDMENT
Dated as of March 31, 2010
to
SALE AGREEMENT
Dated as of November 13, 2008
 
 
This FIRST AMENDMENT (this “Amendment”), dated as of March 31, 2010, is entered
into by and between ASHLAND INC., a Kentucky corporation (“Ashland”), and CVG
CAPITAL II LLC, a Delaware limited liability company (the “SPV”).
 
RECITALS
 
WHEREAS, the parties hereto have entered into that certain Sale Agreement dated
as of November 13, 2008 (the “Sale Agreement”);
 
WHEREAS, the parties hereto desire to amend the Sale Agreement as provided
herein;
 
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and in the Sale Agreement, the parties hereto agree as follows:
 
SECTION 1. Definitions.  All capitalized terms not otherwise defined herein are
used as defined in the Sale Agreement.
 
SECTION 2. Amendments to Sale Agreement.  The Sale Agreement is hereby amended
as follows:
 
2.1. The definition of “Second Tier Agreement” in Section 1.1 of the Sale
Agreement is hereby amended and restated in its entirety as follows:
 
“Second Tier Agreement” means that certain Amended and Restated Transfer and
Administration Agreement, dated as of March 31, 2010, by and among the SPV, the
Originators, Ashland, as initial Servicer, Liberty Street Funding LLC, Market
Street Funding LLC and Three Pillars Funding LLC, as Conduit Investors and
Uncommitted Investors, The Bank of Nova Scotia, as the Agent, a Letter of Credit
Issuer, a Managing Agent, an Administrator and a Committed Investor, PNC Bank,
National Association, as a Letter of Credit Issuer, a Managing Agent, an
Administrator and a Committed Investor, Wells Fargo Bank, National Association,
as a Letter of Credit Issuer, a Managing Agent and a Committed Investor,
SunTrust Bank, as a Letter of Credit Issuer and a Committed Investor, SunTrust
Robinson Humphrey, Inc., as a Managing Agent and Administrator, and the various
Investor Groups, Managing Agents, Letter of Credit Issuers and Administrators
from time to time parties thereto.
 
2.2. Section 1.1 of the Sale Agreement is hereby amended to add the following
new definitions:
 
“Closing Date” means November 13, 2008.
 

 
 
 
 
 
“Effective Date” means March 31, 2010.
 
“Originally Retained Receivable” means a Receivable which was originally a
Retained Receivable prior to the Effective Date but which became a Conveyed
Receivable as of the Effective Date and is set forth on Schedule V hereto.
 
“Water Receivable” means, a Receivable in existence prior to the Effective Date
which is owed by an Obligor appearing on Schedule IV, to the extent such
Receivable has been assigned the corresponding payer identification number
appearing on such Schedule IV and to the extent related to Ashland’s “water
treatment” line of business as designated by the identifier “AHWT” on Ashland’s
internal books and records.
 
2.3. Clause (d) of the definition of “Related Assets” in Section 1.1 of the Sale
Agreement is hereby amended and restated in its entirety as follows:
 
“(d)           all records, instruments, documents and other agreements
(including any Contract with respect thereto) related to such Receivable,
including but not limited to any third-party documentation related to shipments
to an Obligor on behalf of the Originator by a distributor who has received a
Valvoline Credit;”
 
2.4. The definition of “Retained Receivable” in Section 1.1 of the Sale
Agreement is hereby amended and restated in its entirety as follows:
 
“Retained Receivable” means, a Receivable in existence on or after the Effective
Date which is owed by an Obligor appearing on Schedule IV, to the extent such
Receivable has been assigned the corresponding payer identification number
appearing on such Schedule IV and to the extent related to Ashland’s “water
treatment” line of business as designated by the identifier “AHWT” on Ashland’s
internal books and records.
 
2.5. The Sale Agreement is hereby amended to add the following new Section
2.1(c):
 
“(c)           For the avoidance of doubt, it is understood and agreed that (i)
the Receivables transferred hereunder shall not include the “Retained
Receivables”, and (ii) the Receivables transferred hereunder prior to the
Effective Date shall not include “Originally Retained Receivables”.
 
2.6. Section 4.2(a) and (b) in the Sale Agreement is hereby amended and restated
in its entirety as follows:
 
“(a)           If on any day the Unpaid Balance of a Receivable is reduced or
such Receivable is canceled as a result of any Dilution, the applicable
Originator(s) shall be deemed to have received on such day a Collection of such
Receivable in the amount of the Unpaid Balance (as determined immediately prior
to such Dilution) of such Receivable (if such Receivable is canceled) or,
otherwise, in the amount of such reduction, and such Originator(s) shall pay to
the SPV an amount equal to such Deemed Collection and such
 
 
2
 
 
amount shall be paid by the SPV to the Servicer for application by the Servicer
as a Collection in accordance with Section 2.12 of the Second Tier Agreement.
 
(b)           If on any day any representation or warranty of an Originator set
forth in Section 5.1(d), or Sections 5.2(a) or (h) with respect to any
Receivable (whether on or after the date of transfer thereof to the SPV as
contemplated hereunder) is determined to be incorrect as of such time when such
representation or warranty was made or confirmed, such Originator shall be
deemed to have received on such day a Collection of such Receivable equal to its
Unpaid Balance. To the extent that the SPV subsequently receives Collections
with respect to any such Receivable, the SPV shall pay such Originator an amount
equal to the amount so collected, such amount to be payable in the same manner
and priority as the Deferred Purchase Price.”
 
2.7. Section 6.2(a) in the Sale Agreement is hereby amended and restated in its
entirety as follows:
 
“(a)           Conduct of Business; Ownership.  Each Originator shall carry on
and conduct its business in substantially the same manner and in substantially
the same fields of enterprise (and reasonable extensions of existing fields of
enterprise) as it is presently conducted and do all things necessary to remain
duly organized, validly existing and in good standing in its jurisdiction of
formation and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, except to the extent the
failure to maintain authority to conduct its business in each jurisdiction in
which its business is conducted would not reasonably be expected to have a
Material Adverse Effect; provided that this clause (b) shall in no way be deemed
to restrict or prevent Ashland from completing, or from taking such action as it
deems reasonably necessary to complete, the Proposed Castings Joint Venture
Transaction.  The SPV shall at all times be a wholly-owned Subsidiary of Ashland
or Ashland and the other Originators.”
 
2.8. The Sale Agreement is hereby amended to add the following new Section 9.11:
 
“Repurchase of Water Receivables.  In connection with Ashland’s anticipation of
contributing certain lines of business related to the generation of Water
Receivables to its Subsidiary, Hercules Incorporated, the parties hereto agree
that (i) on the Effective Date, the SPV will repurchase all existing Water
Receivables previously sold by it to the Investors pursuant to the Second Tier
Agreement in accordance with the terms of Section 11.16 thereof, (ii) on or
about April 1, 2010, the SPV shall sell, transfer and assign such repurchased
Water Receivables to Ashland, and Ashland shall repurchase such Water
Receivables from the SPV, for a purchase price equal to fair market value
thereof, and (iii) Ashland may file any UCC termination statements in connection
with the release and termination of all security or other interests in such
repurchased Water Receivables and Related Security therewith that it deems
reasonably appropriate in its discretion.” 
 
2.9. References to Bank of America. As of the effective date of this Amendment,
the parties hereto (i) acknowledge that The Bank of Nova Scotia (“Scotia”) will
replace Bank of America, N.A. (“Bank of America”) as Agent on behalf of the
Secured Parties in all respects
 
 
 
3
 
 
under the Second Tier Agreement, and (ii) agree that all references in the Sale
Agreement to Bank of America shall mean and be a reference to Scotia.
 
2.10. Schedule II to the Sale Agreement is hereby amended and restated in its
entirety by the Schedule II attached to this Amendment.
 
2.11. Schedule IV to the Sale Agreement is hereby amended and restated in its
entirety by the Schedule IV attached to this Amendment.
 
2.12. A new Schedule V is hereby added to the Sale Agreement in the form of
Schedule V attached hereto.
 
SECTION 3. Conditions Precedent.  Section 2 hereof shall become effective on the
date on which the Agent (and each Managing Agent, upon its request) has received
a counterpart (or counterparts) of this Amendment, executed and delivered by
each of the parties hereto, or other evidence satisfactory to the Agent of the
execution and delivery of this Amendment by such parties.
 
SECTION 4. Miscellaneous.
 
4.1. Representations and Warranties.  The parties hereto each hereby represents
and warrants that this Amendment constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
 
4.2. References to Sale Agreement.  Upon the effectiveness of this Amendment,
each reference in the Sale Agreement to “this Agreement”, “hereunder”, “hereof”,
“herein”, or words of like import shall mean and be a reference to the Sale
Agreement as amended hereby, and each reference to the Sale Agreement in any
other document, instrument or agreement executed and/or delivered in connection
with the Sale Agreement shall mean and be a reference to the Sale Agreement as
amended hereby.
 
4.3. Effect on Sale Agreement.  Except as specifically amended above, the Sale
Agreement and all other documents, instruments and agreements executed and/or
delivered in connection therewith shall remain in full force and effect and are
hereby ratified and confirmed.
 
4.4. No Waiver.  The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of the SPV under the
Sale Agreement or any other document, instrument or agreement executed in
connection therewith, nor constitute a waiver of any provision contained
therein, except as specifically set forth herein.
 
4.5. Governing Law.  This Amendment, including the rights and duties of the
parties hereto, shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
 
4.6. Successors and Assigns.  This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.
 
 
 
4
 
 
4.7. Headings.  The Section headings in this Amendment are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Amendment or any provision hereof.
 
4.8. Counterparts.  This Amendment may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
 
[SIGNATURES FOLLOW]
 
 
5
 
 
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
by their respective officers as of the day and year first above written.
 
 

 
ASHLAND INC.,
as an Originator
       
 
 By:  /s/   J. Kevin Willis      Name:  J. Kevin Willis      Title:  Treasurer
and Vice President, Finance        

[Signatures Continue on the Following Page]
 
 
First Amendment to Sale Agreement

 
 
 
 
 
 
 

 
CVG CAPITAL II LLC,
as the SPV
       
 
 By:  /s/   Lynn P. Freeman      Name:  Lynn P. Freeman      Title:  Chief
Executive Officer/President        

 
 
 
 
First Amendment to Sale Agreement

 
 
 
 
 
 
Acknowledged and agreed to:
 
 
THE BANK OF NOVA SCOTIA
   
 
 
     By:  /s/   Michael Eden      Name:  Michael Eden      Title:  Director    
     

 
 
First Amendment to Sale Agreement