Exhibit 10.49

GLOBAL SETTLEMENT AGREEMENT

 

          This Global Settlement Agreement ("Agreement") is made and entered
into as of the 11th day of January 2005 (the "Execution Date"), by and between
Crompton Corporation and Uniroyal Chemical Co., Inc. and the Class Plaintiffs
(as defined below), both individually and on behalf of the Class Members (as
defined below).

          In consideration of the covenants, agreements, and releases set forth
herein and for other good and valuable consideration, it is agreed by and among
the undersigned that the Affected Actions (as defined below) shall be settled,
compromised and dismissed on the merits with prejudice as to Crompton (as
defined below) only, without costs as to Class Plaintiffs, the Class Members or
Crompton, subject to the approval of the Courts (as defined below) in the
Affected Actions, on the following terms and conditions:

A.

          Definitions

The following terms, as used in this Agreement, have the following
meanings:                

           1.     "Affected Action" and "Affected Actions" mean, individually or
collectively, the following direct purchaser antitrust actions:

(a) In re EPDM Antitrust Litigation, Case No. 3:03 MD 1542 (PCD) (D.Conn.)
("EPDM Action");

(b) In re NBR Antitrust Litigation, Master Docket Civil Action No. 03-1898
(Judge Cercone) (W.D. Pa.) ("NBR Action"); and

(c) In re Rubber Chemicals Antitrust Litigation, Master Docket No. C-03-1496
(MJJ) (N.D. Cal.) ("Rubber Chemicals Action").

-1-

--------------------------------------------------------------------------------

           2.      "Agreement" means this Global Settlement Agreement.

           3.      "Allocation Counsel" means the one or two lawyers other than
Settlement Counsel designated as such by the Class Plaintiffs in each of the
respective Affected Actions. Allocation Counsel may associate other lawyers or
law firms who represent client(s) who have an interest in the allocation to
assist in the duties of Allocation Counsel. Notwithstanding the foregoing, no
lawyer or law firm shall serve as Allocation Counsel, or assist Allocation
Counsel, in more than one of the Affected Actions.

           4.      "Allocation Percentage" means, for each Affected Action, the
percentage derived by dividing the Settlement Amount allocated to each Affected
Action by the Global Settlement Amount.

           5.      "Claims Administrator" means Gilardi & Co., LLC.

           6.      "Class" and "Classes" mean, individually or collectively, the
Rubber Chemicals Class, the EPDM Class and the NBR Class.

           7.      "Class Member" means each member of the Rubber Chemicals
Class, the EPDM Class and/or the NBR Class, respectively.

           8.      "Class Period" means, for each Affected Action, the class
period specified in the Implementing Settlement Agreements attached hereto as
Exhibits A through C.

           9.      "Class Plaintiffs" means those persons identified as Class
Plaintiffs in the Implementing Settlement Agreements attached hereto as Exhibits
A through C.

           10.      "Court" and "Courts" mean, individually or collectively, the
United States District Court in which the respective Affected Actions are
pending.

-2-

--------------------------------------------------------------------------------

           11.      "Crompton" means Crompton Corporation and its subsidiaries,
predecessors, and affiliates.

           12.      "Defendant" means any person or entity named as a defendant
in an Affected Action.

           13.      "Effective Date" means the date on which Final Approval has
been obtained in the Rubber Chemicals Action and the EPDM Action.

           14.      "EPDM" means ethylene propylene diene monomer synthetic
rubber, as that term is used in the Second Consolidated Amended Complaint (dated
July 1, 2004).

           15.      "EPDM Class" means all individuals or entities (excluding
governmental entities, defendants named in the EPDM Action and their parents,
predecessors, subsidiaries, affiliates and co-conspirators) who purchased
ethylene propylene diene monomer ("EPDM") in the United States directly from one
or more of the defendants named in the EPDM Action or any predecessor,
subsidiary or affiliate of any defendant named in the EPDM Action, at any time
during the period from January 1, 1997 to December 31, 2001.

           16.      "Escrow Account" means an account, to be established by
Settlement Counsel and administered in accordance with the terms of this
Agreement, for receipt of the Global Settlement Amount to be paid by Crompton
pursuant to Paragraph 36 hereof.

           17.      "Execution Date" means the date first appearing above.

           18.      "Final Approval" means, with respect to any Affected Action,
(a) the entry by the Court in which the Affected Action is pending of a final
order approving the respective Implementing Settlement Agreement under Rule
23(e) of the Federal Rules of Civil Procedure

-3-

--------------------------------------------------------------------------------

together with entry of a final judgment dismissing such Affected Action and all
claims therein against Crompton on the merits with prejudice as to all Settling
Class Members (with respect to such Affected Action, a "Final Judgment"), and
(b) the expiration of the time for appeal or to seek permission to appeal from
the Court's approval of the respective Implementing Settlement Agreement and
entry of the Final Judgment in such Affected Action or, if an appeal from a
Final Judgment is taken, the affirmance of such Final Judgment in its entirety,
without modification (except as otherwise provided in Subparagraph 61(b)), by
the court of last resort to which an appeal of such Final Judgment may be taken.
It is agreed that neither the provisions of Rule 60 of the Federal Rules of
Civil Procedure nor the All Writs Act, 28 U.S.C. §1651, shall be taken into
account in determining the above-stated times.

           19.      "Final Approval Date" means, with respect to each Affected
Action, the date on which Final Approval is obtained.

           20.      "Global Settlement Amount" means ninety-seven million
dollars ($97,000,000.00).

           21.      "Global Settlement Fund" means the Global Settlement Amount
plus any interest earned thereon after payment thereof by Crompton into the
Escrow Account.

           22.      "Implementing Settlement Agreements" means those forms of
Settlement Agreements attached hereto as Exhibits A through C to be entered into
in the respective Affected Actions.

-4-

--------------------------------------------------------------------------------

           23.      "NBR" means an emulsion-polymerized copolymer of
acrylonitrile and butadiene, as that term is used in the Consolidated Amended
Class Action Comoplaint (dated May 13, 2004).

           24.      "NBR Class" means all persons or entities who purchased
nitrile rubber ("NBR") directly from one or more defendants named in the NBR
Action or any predecessor, successor, subsidiary or affiliate of any defendant
named in the NBR action, in the United States from January 1, 1995 through June
30, 2003. Excluded from the class are the defendants named in the NBR Action,
their co-conspirators, and their respective parents, subsidiaries and
affiliates, and governmental entities.

           25.      "Neutral" means Kenneth Feinberg or such other person chosen
by Crompton and Settlement Counsel to mediate and, if necessary, decide the
allocation of the Global Settlement Fund among the Affected Actions pursuant to
the terms of this Agreement.

           26.      "Qualifying Asset Sales" means sales of assets by Crompton
Corporation (the "Company") or a domestic subsidiary of the Company of separate
business segments, divisions and lines of business (which, in the case of a sale
of a subsidiary, shall cover all of the equity of such subsidiary) ("Line of
Business Sales"), so long as such Line of Business Sales (i) are in each case
for at least 85% cash consideration, (ii) are for an aggregate amount not more
than $150 million, (iii) do not, in the aggregate, cover assets representing,
for the period of four quarters for which financial statements of the Company
are available, more than 6.5% of the Company's Consolidated EBITDA as defined in
the Company's Credit Agreement (the "Credit Agreement") dated August 16, 2004
with Deutsche Bank AG New York Branch and certain other lenders or

-5-

--------------------------------------------------------------------------------

the Company's Operating Cash Flow (as defined in the Company's Indenture dated
August 16, 2004 relating to its 9 7/8% Senior Notes due 2012 and Senior Floating
Rate Notes due 2010) and (iv) do not occur on a date that a Default or Event of
Default (as defined in the Credit Agreement) exists.

           27.      "Released Claims" shall have the meaning set forth in the
respective Implementing Settlement Agreements and shall capture and be
commensurate with all claims, rights, suits, demands, assertions, allegations,
causes of action, losses, damages, injuries, attorneys' fees, costs, expenses,
debts, liabilities, judgments or remedies that arise from or are directly
related to the subject matter of each Affected Action.

           28.      "Releasees" means Crompton, its past and present officers,
directors, employees, agents, attorneys, servants, representatives, parents,
subsidiaries, affiliates and partners and the predecessors, successors, heirs,
executors, administrators, and assigns of each of the foregoing. Notwithstanding
the foregoing, "Releasees" does not include: (a) Paratec Elastomers LLC, a
Delaware limited liability company; (b) any person or entity (other than a
person or entity described in the first sentence of this Paragraph 28) added or
joined as a Defendant in the Affected Actions after the date of this Agreement;
(c) any past or present officers, directors, or employees of Crompton who refuse
to cooperate with Settlement Counsel or their designee pursuant to Section J of
this Agreement; (d) any other co-conspirator (other than a person or entity
described in the first sentence of this Paragraph 28) of the Defendants; or (d)
any currently named Defendant other than Crompton Corporation and Uniroyal
Chemical Co., Inc. As used in this definition, "affiliates" means entities
controlling, controlled by or under common control

-6-

--------------------------------------------------------------------------------

with a Releasee.

           29.      "Releasors" means the Class Plaintiffs and the Settling
Class Members in each of the respective Affected Actions and their past and
present parents, subsidiaries, affiliates, and agents. As used in this
definition, "affiliates" means entities controlling, controlled by or under
common control with a Releasor.

           30.      "Rubber Chemicals" means accelerators (primary accelerators,
secondary or ultra accelerators, activators and vulcanizing agents, including
without limitation sulfenamides, sulfenimides, thiazoles, dithiocarbamates,
thiurams, xanthates, sulfides, disulfides, aldehyde amines, guanidines and
dithiophosphates); antioxidants and antiozonants (including without limitation
paraphenylenediamines, para-phenylenediamine blends, quinolines, hydroquinones,
hindered phenols, and diphenylamines); and waxes, blowing agents, vulcanization
retardants, pre-vulcanization inhibitors, polymerization regulators, shortstops,
peptizing agents, post vulcanization stabilizers, anti-reversion agents and
treated cellulose reinforcement materials used in the processing and/or
protection of rubber. Rubber Chemicals do not include Crystex or other insoluble
sulfur products.

           31.      "Rubber Chemicals Class" means all persons (excluding
governmental entities, defendants named in the Rubber Chemicals Action, and the
present and former parents, predecessors, subsidiaries and affiliates of such
defendants) who purchased Rubber Chemicals in the United States directly from
any of the defendants named in the Rubber Chemicals Action or any present or
former parent, subsidiary or affiliate thereof, at any time during the period
from May 1, 1995 through December 31, 2001.

-7-

--------------------------------------------------------------------------------

           32.      "Settling Class Member" and "Settling Class Members" mean,
individually or collectively, Class Members who do not timely and validly
request exclusion from the Rubber Chemicals Class, the EPDM Class or the NBR
Class, as applicable.

           33.      "Settlement Counsel" means the law firms of Cohen, Milstein,
Hausfeld & Toll, P.L.L.C, 1100 New York Avenue, N.W., Washington, D.C. 20005;
Gold Bennett Cera & Sidener LLP, 595 Market Street, Suite 2300, San Francisco,
CA 94105; and Bolognese and Associates, LLC, One Penn Center, Suite 650, 1617
JFK Boulevard, Philadelphia, PA 19103.

           34.      "Taxes" means any sums due to be paid to governmental taxing
authorities by Settlement Counsel from the Global Settlement Fund, including
taxes, estimated taxes, interest and penalties.

           35.      "Tax Expenses" means any and all reasonable fees and costs
due to be paid to tax preparers, tax consultants or others for determining the
tax liability of the Settlement Fund and otherwise assisting Settlement Counsel
in carrying out their responsibilities set forth in Paragraph 65 of this
Agreement.

B.     Payments

           36.     (a)     Except as otherwise provided in Paragraph 52 of this
Agreement, Crompton shall pay the Global Settlement Amount into the Escrow
Account in United States funds on the schedule set forth below.

                   (b)     Within twenty (20) days of the Execution Date,
Crompton shall wire transfer into the Escrow Account $500,000.00.

-8-

--------------------------------------------------------------------------------

                   (c)     Within twenty (20) days of the grant of preliminary
approval of the Implementing Settlement Agreements (which along with this Global
Settlement Agreement shall be submitted to the Court in which an Affected Action
is pending) by the Court in which an Affected Action is pending, Crompton shall
wire transfer into the Escrow Account an amount (rounded to the nearest dollar)
determined by multiplying $58,000,000.00 times the Allocation Percentage for the
Affected Action in which preliminary approval has been granted.

                   (d)     On or before the later of the date twenty (20) days
following the Effective Date or December 31, 2005, Crompton shall wire transfer
into the Escrow Account an amount (rounded to the nearest dollar) determined by
multiplying $19,500,000.00 times the total of the Allocation Percentages for the
Affected Actions in which Final Approval has been obtained. If Final Approval
has not been obtained in the NBR Action on the Effective Date but is
subsequently obtained, Crompton shall wire transfer into the Escrow Account
within twenty (20) days after such Final Approval is obtained an amount (rounded
to the nearest dollar) determined by multiplying $19,500,000.00 by the
Allocation Percentage for the NBR Action.

                   (e)     On or before the later of the date twenty (20) days
following the Effective Date or June 30, 2006, Crompton shall wire transfer into
the Escrow Account an amount (rounded to the nearest dollar) determined by
multiplying $19,000,000.00 times the total of the Allocation Percentages for the
Affected Actions in which Final Approval has been granted. If Final Approval has
not been obtained in the NBR Action on the Effective Date but is subsequently
obtained, Crompton shall wire transfer into the Escrow Account within twenty
(20)

-9-

--------------------------------------------------------------------------------

days after such Final Approval is obtained an amount (rounded to the nearest
dollar) determined by multiplying $19,000,000.00 by the Allocation Percentage
for the NBR Action.

                   (f)     Provided that the conditions set out in this
Subparagraph (f) are met, not less than one-half of any net after-tax cash
proceeds received by Crompton from Qualifying Asset Sales shall be paid by
Crompton into the Escrow Account to reduce any unpaid part of the Global
Settlement Amount. Within twenty (20) days of receipt by Crompton of any such
proceeds on an unencumbered basis, and provided, that the Effective Date shall
have occurred prior to the receipt of such proceeds, such proceeds shall be paid
into the Escrow Account as follows: (i) first, any such proceeds shall be
applied to reduce any amount then due pursuant to Subparagraph (c) hereof; (ii)
second, any such proceeds shall be applied to reduce any amount then due to be
paid pursuant to Subparagraph (e) hereof; and (iii) third, any such proceeds
shall be applied to reduce any amoun t then due to be paid pursuant to
Subparagraph (d) hereof.

                   (g)     Notwithstanding any provision of this Agreement to
the contrary, Crompton shall not be required to make any use of the proceeds
from any sale of assets that would cause Crompton to violate any term of any
credit or other debt agreement or debt instrument then outstanding or in effect.

C.     Allocation of Global Settlement Fund

           37.      Class Plaintiffs and Crompton have agreed to appoint Kenneth
Feinberg to act as the Neutral for purposes of allocating the Global Settlement
Fund among the three Affected Actions. If, for any reason, Mr. Feinberg is
unwilling or unable to undertake or complete the

-10-

--------------------------------------------------------------------------------

duties of the Neutral under this Agreement, Class Plaintiffs and Crompton shall
appoint a mutually acceptable replacement Neutral.

           38.      The fees and costs of the Neutral shall constitute Notice
and Administration Costs as provided in Paragraph 52 of this Agreement.

           39.      In considering the appropriate allocation of the Global
Settlement Fund in the Affected Actions, the Neutral and the Allocation Counsel
shall consider the following factors: (i) evidence of Crompton's liability, (ii)
the scope of any liability, (iii) whether Crompton has pleaded guilty to any
criminal violations related to the subject matter of an Affected Action, (iv)
whether Crompton has been granted amnesty by any governmental authorities
relating to the subject matter of an Affected Action, (v) the effect, if any, of
a grant of amnesty in an Affected Action, (vi) Crompton's market share in
relevant product markets, (vii) the likely range of provable single damages in
an Affected Action based on Crompton's sales of the relevant product during the
relevant period, (viii) the value of Crompton's cooperation with respect to each
of the Affected Actions, and (ix) such other factors as the Neutral determines
are relevant and appropriate to consider in fairly and equitably allocating the
Global Settlement Fund.

           40.      Within thirty (30) days of the Execution Date, Crompton may
submit information to the Neutral for his consideration in allocating the Global
Settlement Fund.

           41.      Within fifteen (15) days of the Execution Date, Settlement
Counsel shall make available to Allocation Counsel in all of the Affected
Actions the damage analyses or related information that they considered in the
course of negotiating the Global Settlement Amount with Crompton and such other
information as may be helpful or relevant to Allocation Counsel in

-11-

--------------------------------------------------------------------------------

performing their respective duties. The information provided by Settlement
Counsel to Allocation Counsel shall also be submitted to the Neutral.

           42.      Within forty-five (45) days of the Execution Date, each of
the Allocation Counsel shall submit to the Neutral a proposal for the Allocation
of the Global Settlement Fund in each of the Affected Actions and state the
reasons therefor. Without the consent of the Neutral, such proposals shall not
exceed ten (10) pages.

           43.      Within sixty (60) days of the Execution Date, an allocation
meeting shall be called by the Neutral. The meeting shall include the Neutral,
Crompton and each of the Allocation Counsel. Settlement Counsel shall not
participate in the allocation meeting. The purpose of the allocation meeting
shall be to reach agreement concerning the allocation of the Global Settlement
Fund in each of the Affected Actions. The meeting may be adjourned from
time-to-time by the Neutral and shall continue until (a) an agreed upon
allocation is reached among all of the Allocation Counsel or (b) the Neutral
determines that an impasse has been reached.

           44.      If the Neutral determines that an impasse has been reached
among Allocation Counsel, he shall advise each of the Allocation Counsel,
Settlement Counsel and Crompton of his determination. In the notification of
impasse, the Neutral shall advise each of the Allocation Counsel and Crompton
that they may submit a final brief within ten (10) days to the Neutral setting
forth the legal and factual basis for the position taken by them regarding a
proposed allocation of the Global Settlement Fund in the Affected Actions.
Without the consent of the Neutral, such brief shall be no longer than ten (10)
pages.

-12-

--------------------------------------------------------------------------------

           45.      After the time for submitting briefs pursuant to Paragraph
44 has passed, the Neutral shall make an allocation of the Global Settlement
Fund that the Neutral believes to be a fair and equitable allocation among the
Affected Actions. Such determination shall be binding on the parties and shall
not be subject to challenge or appeal by the parties to this Agreement or any of
the Class Plaintiffs.

           46.      Upon the determination of the allocation of the Global
Settlement Fund (whether by agreement or otherwise), the Neutral shall notify
Settlement Counsel, Allocation Counsel and Crompton of such allocation. Within
ten (10) days of receipt by Settlement Counsel, Allocation Counsel and Crompton
of the Neutral's notification of the allocation of the Global Settlement Fund,
the parties shall execute the Implementing Settlement Agreements attached hereto
as Exhibits A through C with the respective settlement amount for each Affected
Action to be the amount allocated to each Affected Action as set out in the
Neutral's notification of the allocation of the Global Settlement Fund.

           47.      All proceedings before the Neutral and all materials
submitted to the Neutral in connection with those proceedings shall be
absolutely confidential and privileged and are an integral part of Crompton's
efforts to fairly resolve each of the Affected Actions. The parties to the
allocation proceeding shall agree that they may not use anything said or any
information provided during the course of the proceedings for any purpose other
than the Allocation Proceeding.

-13-

--------------------------------------------------------------------------------

D.     Stipulation to Class Certification

           48.      Subject to the Court's approval in each of the respective
Affected Actions and for the purposes of this Agreement, the parties to each of
the Affected Actions agree and stipulate to the certification of the Rubber
Chemicals Class, the EPDM Class and the NBR Class as set forth in the
Implementing Settlement Agreements attached hereto as Exhibits A through C.

E.     Approval of Implementing Settlement Agreements, Notice and Dismissal of
Claims

           49.      Class Plaintiffs, Crompton and their respective counsel
agree to use their best efforts to effectuate this Agreement, and shall
cooperate promptly to seek and obtain both preliminary and final approval of the
Implementing Settlement Agreements (including the giving of class notices under
Federal Rules of Civil Procedure 23(c) and (e)) and to secure the complete and
final dismissal with prejudice of the Affected Actions as to Crompton.

           50.      Within thirty (30) days of execution of the Implementing
Settlement Agreements, Settlement Counsel or their designee shall submit motions
to the Courts in the respective Affected Actions, to be joined in or stipulated
to by Crompton, for preliminary approval of the Implementing Settlement
Agreements and authorization to disseminate notice of the settlements to Class
Members in the Rubber Chemicals Class, the EPDM Class and the NBR Class and for
a stay of all proceedings in each of the Affected Actions against Crompton,
except for proceedings provided for, by, or in connection with the Implementing
Settlement Agreements as set forth herein (the "Motions"). The Motions shall
include: (a) the definition of the class in each respective Affected Action; and
(b) a proposed form of, method for, and date of dissemination of notice to Class
Members in each of the Affected Actions. Except as otherwise provided in this

-14-

--------------------------------------------------------------------------------

Agreement, the text of the items referenced in clauses (a) and (b) of this
Paragraph 50 shall be agreed upon by Class Plaintiffs and Crompton before
submission of the Motions.

           51.     (a)     Upon preliminary approval by the Court of an
Implementing Settlement Agreement, Settlement Counsel in the Affected Action or
their designee shall, in accordance with Fed.R.Civ.P. 23 and the Court's order,
provide each Class Member in the Affected Action who can be identified by
reasonable means with notice by such means as the Court shall require. In order
to facilitate mailed notice, Crompton shall provide to Settlement Counsel,
within ten (10) days following the execution of the Implementing Settlement
Agreements, a machine-readable version of its customer mailing list containing
addresses of each Class Member in the respective Affected Action to the extent
reasonably available. This information shall be subject to any generally
applicable protective order already or hereafter entered in the respective
Affected Actions. Each notice shall include the proposed plan for distribution
of the settlement proceeds among the Settling Class Members in the respective
Affected Action. The plans shall provide for a claim form to be sent to each
Class Member in an Affected Action. Settlement Counsel shall take all necessary
and appropriate steps to ensure that notices of the settlement hearings are
provided in accordance with the orders of the Courts in the respective Affected
Actions.

                   (b)     Notice of the settlement hearings shall also be given
by publication once in the national edition of The Wall Street Journal and in
such other publications as the Courts in the respective Affected Actions may
direct, as soon as reasonably practicable after preliminary approval by each
Court of each Implementing Settlement Agreement.

-15-

--------------------------------------------------------------------------------

           52.      In addition to the payment of the Global Settlement Amount,
Crompton shall pay reasonable Notice and Administration Costs (as hereinafter
defined) of up to $500,000.00. "Notice and Administration Costs" means the fees
and costs of the Neutral, the fees and costs of the Claims Administrator and
costs incurred to provide notice to potential members of the Settlement Classes
and to administer the settlements. Within ten (10) business days after receipt
of notification from Settlement Counsel of reasonable and customary costs and
expenses incurred by the Neutral and the Claims Administrator associated with
the provision of notice to each Class Member in each of the respective Affected
Actions pursuant to this Agreement, Crompton shall pay the amount of such costs
and expenses into the Escrow Account, provided, however, that Crompton shall
have no obligation to pay more than $500,000.00 for reasonable Notice a nd
Administration Costs. Settlement Counsel shall submit to Crompton invoices or
other customary documentation with respect to Notice and Administration Costs to
be paid by Crompton pursuant to this Paragraph. To the extent that Notice and
Administration Costs exceed $500,000, Settlement Counsel shall pay such costs,
when due, out of the Escrow Account. In the event that this Agreement is
terminated for any reason, any amounts reasonably paid out of the Escrow Account
to cover Notice and Administration Costs shall not be recoverable by Crompton
from Class Plaintiffs or their counsel, including Settlement Counsel.

           53.      Settlement Counsel or their designee shall submit motions
for final approval of the Implementing Settlement Agreements by the Courts in
each of the Affected Actions after notice of the settlement hearings is given to
the Settling Class Members in the respective Affected Actions. At the same time,
the parties hereto shall jointly seek entry of an order and

-16-

--------------------------------------------------------------------------------

Final Judgment in each Affected Action, in a form that is mutually agreeable to
Class Plaintiffs and Crompton, which shall include the following findings:

     (a)     approving finally the Implementing Settlement Agreement and its
terms as being a fair, reasonable, and adequate settlement as to the Settling
Class Members within the meaning of Rule 23 of the Federal Rules of Civil
Procedure and directing its consummation according to its terms;

     (b)     directing that, as to Crompton, the Affected Action be dismissed
with prejudice and, except as otherwise provided in this Agreement, without
costs;

     (c)     reserving exclusive jurisdiction over the Implementing Settlement
Agreement, including the administration and consummation of the settlement;

     (d)     determining under Federal Rule of Civil Procedure 54(b) that there
is no just reason for delay and directing that the judgment of dismissal as to
Crompton shall be final and entered forthwith; and

     (e)     requiring Settlement Counsel to file with the Clerk of the Court a
record of Class Members who timely and validly excluded themselves from the
settlement in each Affected Action and to provide a copy of the record to
counsel for Crompton.

F.     Release and Discharge

           54.      Upon the occurrence of the Effective Date and in
consideration of payment of the Settlement Amount and Notice and Administration
Costs, as specified in Paragraphs 36 and 52 of this Agreement, and for other
valuable consideration, the Releasees shall be completely released, acquitted,
and forever discharged from any and all Released Claims as set forth in the
respective Implementing Settlement Agreements and as set forth above at
Paragraph 27.

-17-

--------------------------------------------------------------------------------

G.

     Treatment of Persons Requesting Exclusion

           55.      Settlement Counsel or their designee shall cause copies of
any requests for exclusion from the Settlement Classes to be sent to Crompton as
they are received. Under certain circumstances, Crompton has the option to
terminate this Agreement in whole or in part. This option is set forth in a
separate letter agreement that will not be filed with the Courts in the Affected
Actions unless and until (1) a Court presiding over an Affected Action orders
that the separate letter agreement be filed or (2) a dispute among the parties
concerning its interpretation or application arises. If either of the foregoing
events occur, the separate letter agreement shall be filed under seal unless
otherwise ordered by the Court.

H.     The Global Settlement Fund

           56.      The Escrow Account shall be established and administered
under an agreement approved by Settlement Counsel and Crompton. A payment into
the Escrow Account shall, when made, be invested in instruments secured by the
full faith and credit of the United States and any interest earned thereon shall
become part of the Global Settlement Fund.

           57.      The Escrow Account is intended by the parties hereto to be
treated as a "qualified settlement fund" for federal income tax purposes
pursuant to Treas. Reg. § 1 .468B-1 and to that end the parties hereto shall
cooperate with each other and shall not take a position in any filing or before
any tax authority that is inconsistent with such treatment. At the request of
Crompton, a "relation back election" as described in Treas. Reg. § 1.468B-1 (j)
shall be made so as to enable the Escrow Account to be treated as a qualified
settlement fund from the earliest date possible, and the parties hereto shall
take all actions as may be necessary or appropriate to this end.

-18-

--------------------------------------------------------------------------------

Whether or not the Effective Date has occurred, Settlement Counsel shall pay
taxes or estimated taxes on any income earned on the funds in the Escrow Account
and all related costs and expenses from the Escrow Account. In the event federal
or state income tax liability is finally assessed against and paid by Crompton
as a result of any income earned on the funds in the Escrow Account, Crompton
shall be entitled to reimbursement of such payment from funds in the Escrow
Account. Crompton will use its reasonable efforts to resist any such assessment
or payment.

           58.      Except as otherwise expressly provided in this Agreement,
the approval of the Courts in the relevant Affected Actions shall be required
prior to the distribution of any moneys from the Global Settlement Fund.

           59.      Each Settling Class Member shall look solely to the Global
Settlement Fund, as allocated, for settlement and satisfaction of all claims
released by the Releasors pursuant to Paragraph 54 hereof and the respective
Implementing Settlement Agreements. Except as provided by order of a Court in an
Affected Action, no Class Member shall have any interest in the Global
Settlement Fund or any portion thereof. No person or entity who or which has
entered into an agreement with any Releasee, separate from the Implementing
Settlement Agreements, that settles or compromises Released Claims based on the
direct purchase of the relevant products in any Affected Action shall receive
any payment from the Global Settlement Fund for any such purposes.

           60.      In no event shall Crompton have any liability with respect
to the giving of notice of the settlement to potential Class Members.

-19-

--------------------------------------------------------------------------------

I.     Rescission

           61.     (a)      If the Court refuses to approve the Implementing
Settlement Agreements in the Rubber Chemicals Action or the EPDM Action without
modification, or if the Court in the Rubber Chemicals Action or the EPDM Action
does not enter the Final Judgment or if the Courts in the Rubber Chemicals
Action and EPDM Action enter the Final Judgment and appellate review is sought
and, on such review, either or both of those Final Judgments is modified or set
aside on appeal, then Crompton shall, in its sole discretion, have the option to
rescind this Agreement in its entirety and any and all amounts then constituting
the Global Settlement Fund (including all interest earned thereon) shall be
returned forthwith to Crompton, less only such disbursements properly made in
accordance with this Agreement.

                   (b)     A modification or reversal on appeal of any amount of
attorneys' fees or expenses awarded by the Courts or of any plan of allocation
of settlement proceeds among class members in an Affected Action shall not be
deemed a modification of this Agreement or a Final Judgment.

                   (c)     In the event that Crompton reasonably determines that
the Final Approval Date will not occur with respect to any Affected Action and
notifies Settlement Counsel of such determination in writing stating the reasons
therefor, any settlement funds allocated to such Affected Action, plus any
interest earned thereon, less any amounts properly paid from or charged to those
funds, shall be returned to Crompton within ten (10) business days and any
releases provided to Crompton shall become null and void and the parties to such
actions shall be returned to their respective positions immediately prior to the
Execution Date.

-20-

--------------------------------------------------------------------------------

           62.      Crompton and Class Plaintiffs expressly reserve all of their
respective rights to the extent that the Agreement does not become effective or
if it is rescinded by Crompton pursuant to Paragraph 61 hereof.

J.     Cooperation Agreement

           63.      Upon execution of this Agreement, Crompton shall begin
cooperating with Settlement Counsel with respect to discovery, including the
gathering of evidentiary materials from third parties, relating to Class
Plaintiffs' claims in the Affected Actions, as set forth in this Paragraph.

                   (a)     Within ten (10) days of the Execution Date, Crompton
agrees to meet with Settlement Counsel to identify documents and people relating
to the antitrust violations alleged in the Affected Actions and the potential
culpability of the other named defendants and any unnamed coconspirators in such
actions.

                   (b)     Crompton shall produce to Settlement Counsel
electronic transactional data for sales by Crompton of products involved in the
claims alleged in the Affected Actions during the Class Period. In connection
with the production of such data, Crompton shall make available its technical
and computer personnel, at reasonable times, to assist Settlement Counsel in
understanding and using such data.

                   (c)     Within five (5) days following a reasonable
determination by Crompton that Final Approval will not be obtained in an
Affected Action, Class Plaintiffs shall, if requested by Crompton to do so,
return to Crompton or destroy, and provide Crompton with a written certification
by Settlement Counsel of such destruction, all documents or other materials

-21-

--------------------------------------------------------------------------------

provided to Class Plaintiffs by Crompton in that Affected Action or containing
information derived from such documents or other materials pursuant to this
Section J. Nothing contained in this Subparagraph 63(c) shall be construed to
require Class Plaintiffs or their counsel to return any of their work product.

           64.      Promptly following preliminary approval of each respective
Affected Action:

                   (a)     Crompton shall provide information and produce
documents within its control relating to the antitrust violations alleged in
such Affected Action, including without limitation the dates, locations, and
participants in meetings between competitors. Crompton will also provide other
information within its control regarding the potential culpability of the named
defendants and unnamed co-conspirators in such Affected Action, except for
documents or information subject to the attorney-client privilege or joint
defense privilege and for documents subject to the attorney work product
privilege. Crompton shall produce all documents provided to any grand jury, the
Department of Justice, the European Commission, or any other state, federal or
international governmental or administrative agency, without geographic
limitation, concerning the antitrust violations affecting the U.S. market
alleged in the Affected Actions, including, if requested by Plaintiffs' counsel,
any witness statements, chronologies, or other materials provided to any of the
foregoing. Crompton and the Class Plaintiffs agree to promptly present to the
Court in each Affected Action a stipulated protective order covering, inter
alia, all information and documents provided to Class Plaintiffs pursuant to
Paragraphs 63 and 64 of this Agreement. No such documents or other information
provided to Class Plaintiffs shall be provided to any other persons, including,
without limitation any Class Member who opts out of

-22-

--------------------------------------------------------------------------------

any settlement with Crompton of an Affected Action, in the absence of a Court
Order. All information and documents provided by Crompton to Class Plaintiffs
shall be used only in connection with the Affected Actions.

                   (b)     Crompton's cooperation shall include conferences with
Crompton's counsel, making available in the United States, upon reasonable
notice, current directors, officers, and employees of Crompton who are believed
to have knowledge of the antitrust violations alleged in the Affected Actions to
provide information regarding the antitrust violations alleged in the Affected
Actions in personal interviews, the preparation of declarations, affidavits,
and/or providing testimony at deposition and/or at trial. As to former
directors, officers, and employees, Crompton shall use reasonable efforts to
have such individuals appear for interviews, depositions and trial testimony
under the same conditions as for the current directors, officers, and employees
of Crompton. Any persons made available under this paragraph shall be made
available at a mutually agreeable time and place. The refusal of any current or
former director, officer, or employee to provide information in accordance with
this paragraph because of a good faith belief that he/she has potential criminal
exposure shall not constitute a violation of this Agreement by either Crompton
or that individual.

                   (c)     Crompton agrees to produce at trial and/or
deposition, or through acceptable affidavits, declarations or other testimony,
representatives qualified to establish for admission into evidence Crompton's
product sales covered by the Class Definitions of the Affected Actions and any
other documents of Crompton to the extent permitted by the Federal Rules of
Evidence.

-23-

--------------------------------------------------------------------------------

K.     Taxes and Tax Expenses

           65.      Settlement Counsel shall be solely responsible for filing
all informational and other tax returns necessary to report any taxable income
earned by the Global Settlement Fund and shall file all informational and other
tax returns necessary to report any income earned by the Global Settlement Fund
and pay any Taxes due thereon out of the Global Settlement Fund, as and when
legally required, including interest and penalties due on income earned by the
Global Settlement Fund. Settlement Counsel shall be entitled to pay customary
and reasonable Tax Expenses, including professional fees and expenses incurred
in connection with carrying out their responsibilities as set forth in this
Paragraph from the Global Settlement Fund when incurred. Crompton shall have no
responsibility to make any tax filings relating to this Agreement or the Global
Settlement Fund or to pay any taxes with respect thereto.

L.     Miscellaneous

           66.      This Agreement does not settle or compromise any claim by
Class Plaintiffs or any Class Member asserted in the Affected Actions against
any defendant or alleged co-conspirator other than the Releasees. All rights of
the Class Plaintiffs and any Class Member against non-Crompton defendants or
alleged co-conspirators or any other person or entity other than the Releasees
are specifically reserved by Class Plaintiffs and the Class Members. Crompton's
sales of the relevant products in each of the Affected Actions shall remain in
such actions as a basis for damage claims against the defendants and shall be
part of any joint and several liability claims against defendants in the
Affected Actions or other persons or entities other than the Releasees. The fact
a Class Plaintiff does not opt out of any Implementing

-24-

--------------------------------------------------------------------------------

Settlement Agreement as to Crompton shall not prejudice that Class Plaintiff's
right to opt out of any prior or subsequent Class settlement as to a
non-Crompton defendant or its right to opt out of a litigated class determined
by the Court.

           67.      The Courts shall retain jurisdiction over the
implementation, enforcement, and performance of this Agreement and the
Implementing Settlement Agreements in each of the Affected Actions, and shall
have exclusive jurisdiction over any suit, action, proceeding, or dispute
arising out of or relating to this Agreement or the Implementing Settlement
Agreements that cannot be resolved by negotiation and agreement by Class
Plaintiffs and Crompton. If a dispute over compliance with Section J arises in
the context of a trial against any non-settling party, the trial court shall
have jurisdiction over the dispute.

           68.      This Agreement constitutes the entire agreement among Class
Plaintiffs, Class Members and Crompton pertaining to the settlement of the
Affected Actions against Crompton only and supersedes any and all prior and
contemporaneous undertakings of Class Plaintiffs, Class Members and Crompton in
connection therewith. This Agreement may be modified or amended only by a
writing executed by Class Plaintiffs and Crompton.

           69.      This Agreement shall be binding upon, and inure to the
benefit of, the successors and assigns of Releasors and Releasees. Without
limiting the generality of the foregoing: (a) each and every covenant and
agreement made herein by Class Plaintiffs shall be binding upon all Class
Members and Releasors, and (b) each and every covenant and agreement made herein
by Crompton shall be binding upon all Releasees.

-25-

--------------------------------------------------------------------------------

           70.      This Agreement may be executed in counterparts by Class
Plaintiffs and Crompton, and a facsimile signature shall be deemed an original
signature for purposes of executing this Agreement.

           71.      Neither Crompton nor Class Plaintiffs, nor any of them,
shall be considered to be the drafter of this Agreement or any of its provisions
for the purpose of any statute, case law, or rule of interpretation or
construction that would or might cause any provision to be construed against the
drafter of this Agreement.

           72.      Nothing expressed or implied in this Agreement is intended
to or shall be construed to confer upon or give any person or entity other than
Class Plaintiffs, Class Members, Crompton, Releasors, and Releasees any right or
remedy under or by reason of this Agreement.

           73.      Where this Agreement requires any party to provide notice or
any other communication or document to any other party, such notice,
communication, or document shall be provided by facsimile or letter by overnight
delivery at the address reflected on the signature pages.

           74.      Class Plaintiffs waive California Civil Code Section 1542
and similar provisions in other states. Class Plaintiffs hereby certify that
they are aware of and have read and reviewed the following provision of
California Civil Code Section 1542 ("Section 1542"): "A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor." The provisions of the
release set forth above shall apply according to their terms, regardless of the
provisions of Section 1542 or any equivalent, similar,

-26-

--------------------------------------------------------------------------------

or comparable present or future law or principle of law of any jurisdiction.
Class Plaintiffs hereby expressly waive and relinquish any and all rights and
benefits existing under (i) Section 1542 or any equivalent, similar or
comparable present or future law or principle of law of any jurisdiction and
(ii) any law or principle of law of any jurisdiction that would limit or
restrict the effect or scope of the provisions of the release set forth above.

           75.      Each of the undersigned attorneys represents that he or she
is fully authorized to enter into the terms and conditions of, and to execute,
this Agreement, subject to Court approval.

[Signatures Of Counsel

Appear On The Following Page]

-27-

--------------------------------------------------------------------------------

Signature Page

 

Dated: January _____, 2005

_______________________________________

Michael D. Hausfeld

Richard A. Koffman

COHEN MILSTEIN HAUSFELD & TOLL, P.L.L.C.

1100 New York Avenue, NW

Washington, DC 20005

Tel: (202) 408-4600

Dated: January _____, 2005

_______________________________________

Paul F. Bennett

Steven O. Sidener

GOLD BENNETT CERA & SIDENER LLP

595 Market St., Suite 2300

San Francisco, CA 94105

Tel: (415) 777-2230

Dated: January _____, 2005

_______________________________________

Anthony Bolognese

BOLOGNESE & ASSOCIATES, LLC

One Penn Center

1617 JFK Blvd., Suite 650

Philadelphia, PA 19103

Tel: (215) 814-6750

Settlement Counsel

Dated: January _____, 2005

_______________________________________

Ian Simmons

Benjamin G. Bradshaw

O'MELVENY & MYERS LLP

1625 I Street, NW

Washington, DC 20004

Tel: (202) 383-5300

Counsel for Crompton

-28-

--------------------------------------------------------------------------------