Document:

efc9-0918_ex103.htm

Exhibit 10.3

 

 

DCFS USA LLC,

as Seller,

 

and

 

DAIMLER RETAIL RECEIVABLES LLC,

as Purchaser

 

 

 

 

RECEIVABLES PURCHASE AGREEMENT

 

Dated as of __________ 1, 2009

 

 

 

 

 

 

TABLE OF CONTENTS

 

Page

ARTICLE ONE

 

DEFINITIONS

	
Section 1.01.  Capitalized Terms; Rules of Usage
	
1

ARTICLE TWO

 

CONVEYANCE OF RECEIVABLES

	
Section 2.01.  Sale and Conveyance of Receivables
	
2

	
Section 2.02.  Receivables Purchase Price; Payments on the Receivables.
	
3

	
Section 2.03.  Transfer of Receivables
	
3

	
Section 2.04.  Examination of Receivable Files
	
4

ARTICLE THREE

 

REPRESENTATIONS AND WARRANTIES

	
Section 3.01.  Representations and Warranties of the Purchaser
	
5

	
Section 3.02.  Representations and Warranties of the Seller
	
6

	
Section 3.03.  Representations and Warranties as to the Receivables.
	
7

	
Section 3.04.  Representations and Warranties as to Security Interests
	
8

ARTICLE FOUR

 

CONDITIONS

	
Section 4.01.  Conditions to Obligation of the Purchaser
	
10

	
Section 4.02.  Conditions to Obligation of the Seller
	
10

ARTICLE FIVE

 

COVENANTS OF THE SELLER

	
Section 5.01.  Protection of Right, Title and Interest in, to and Under the Receivables.
	
11

	
Section 5.02.  Security Interests
	
12

	
Section 5.03.  Delivery of Payments
	
12

	
Section 5.04.  No Impairment
	
12

	
Section 5.05.  Costs and Expenses
	
13

	
Section 5.06.  Sale
	
13

	
Section 5.07.  Hold Harmless
	
13

 

 

 

 

i

 

 

 

 

ARTICLE SIX

 

MISCELLANEOUS PROVISIONS

	
Section 6.01.  Amendment.
	
14

	
Section 6.02.  Termination
	
14

	
Section 6.03.  GOVERNING LAW
	
14

	
Section 6.04.  Notices
	
14

	
Section 6.05.  Severability
	
15

	
Section 6.06.  Further Assurances
	
15

	
Section 6.07.  Waivers
	
15

	
Section 6.08.  Counterparts
	
15

	
Section 6.09.  Successors and Assigns
	
15

	
Section 6.10.  Table of Contents and Headings
	
15

	
Section 6.11.  Representations, Warranties and Agreements to Survive
	
15

	
Section 6.12.  No Petition
	
16

SCHEDULES

	
Schedule A – Schedule of Receivables
	
SA 1

	
Schedule B – Location of Receivable Files
	
SB 1

EXHIBITS

	
Exhibit A – Representations and Warranties as to the Receivables
	  	
A 1

	
Exhibit B – Form of First Tier Assignment
	  	
B 1

 

 

 

ii

 

 

This RECEIVABLES PURCHASE AGREEMENT, dated as of __________ 1, 2009 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is between DCFS USA LLC, a Delaware limited liability company (“DCFS USA”), as seller (the “Seller”), and DAIMLER RETAIL
RECEIVABLES LLC, a Delaware limited liability company (“Daimler Retail Receivables”), as purchaser (the “Purchaser”).

 

WHEREAS, in the regular course of its business, the Seller purchases and orginates  motor vehicle installment sales contracts and installment loans secured by new and used motor vehicles (the “Receivables”);

 

WHEREAS, the Seller intends to convey all of its right, title and interest in and to certain Receivables to the Purchaser on the Closing Date, and the Purchaser shall convey all of its right, title and interest in and to the Receivables to Mercedes-Benz Auto Receivables Trust 2009-1 (the “Issuer”) pursuant to the sale and servicing
agreement, dated as of __________ 1, 2009 (the “Sale and Servicing Agreement”), among the Issuer, Daimler Retail Receivables and DCFS USA; and

 

WHEREAS, the parties hereto wish to set forth the terms pursuant to which the Receivables are to be sold by the Seller to the Purchaser.

 

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:

 

 

ARTICLE ONE

 

DEFINITIONS

 

Section 1.01. Capitalized Terms; Rules of Usage.  Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in Appendix A
to the Sale and Servicing Agreement, which Appendix is hereby incorporated into and made a part of this Agreement.  Appendix A also contains rules as to usage applicable to this Agreement.

 

 

 

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ARTICLE TWO

 

CONVEYANCE OF RECEIVABLES

 

Section 2.01. Sale and Conveyance of Receivables.  On the Closing Date, subject to the terms and
conditions of this Agreement, the Seller agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Seller, the Receivables, and the other property relating thereto (as described below).

 

(a) Subject to satisfaction of the conditions set forth in Section 4.01(a), on the Closing Date, and simultaneously with the transactions to be consummated pursuant to the Indenture, the Sale and Servicing Agreement[,]
[and] the Trust Agreement [and the Swap Agreement], the Seller shall, pursuant to the First-Tier Assignment, sell, transfer, assign and otherwise convey to the Purchaser, and the Purchaser shall purchase from the Seller, without recourse (subject to the Seller’s obligations hereunder), all of the right, title and interest of the Seller in, to and under, whether now owned or existing or hereafter acquired or arising, in, to and under the following:

 

(i) the Receivables and all amounts due and collected on or in respect of the Receivables (including proceeds of the repurchase of Receivables by the Seller pursuant to Section 3.03(c)) after the Cutoff Date;

 

(ii) the security interests in the Financed Vehicles granted by the Obligors pursuant to the Receivables and any other interest of the Seller in such Financed Vehicles;

 

(iii) all proceeds from claims on any physical damage or theft insurance policies and extended warranties covering the Financed Vehicles and any proceeds of any credit life or credit disability insurance policies relating to the Receivables,
the related Financed Vehicles or the related Obligors;

 

(iv) the Receivable Files that relate to the Receivables;

 

(v) any proceeds of Dealer Recourse that relate to the Receivables;

 

(vi) the right to realize upon any property (including the right to receive future Net Liquidation Proceeds and Recoveries) that shall have secured a Receivable and have been repossessed by or on behalf of the Seller; and

 

(vii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing, and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all
of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all accounts, accounts receivable, general intangibles, chattel paper, documents, money, investment property, deposit accounts, letters of credit, letter of credit rights, insurance proceeds, condemnation awards, notes, drafts, acceptances, rights to payment of any and 

 

 

 

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every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing.

 

(b) In connection with the foregoing conveyance, the Seller further agrees, at its own expense, on or prior to the Closing Date to (i) annotate and indicate in its books, records and computer files that the Receivables have been
sold and transferred to the Purchaser pursuant to this Agreement, (ii) deliver to the Purchaser a computer file or printed or microfiche list of the Schedule of Receivables containing a true and complete list of the Receivables, identified by account number and by the Principal Balance as of the Cutoff Date, which file or list shall be marked as Schedule A and is hereby incorporated into and made a part of this Agreement and (iii) deliver or cause to be delivered the Receivable Files to or upon
the order of the Purchaser.

 

(c) The parties hereto intend that the conveyance of Receivables and related property hereunder be a sale and not a loan.  In the event that the conveyance hereunder is for any reason not considered a sale, including in the
event of an insolvency Proceeding with respect to the Seller or any of the Seller’s properties, the Seller hereby grants to the Purchaser a first priority security interest in all of the Seller’s right, title and interest in, to and under the Receivables, and all other property conveyed hereunder and all proceeds of the foregoing.  The parties intend that this Agreement constitute a security agreement under Applicable Law.  Such grant is made to secure the payment of all amounts
payable hereunder, including the Receivables Purchase Price.  If such conveyance is for any reason considered to be a loan and not a sale, the Seller consents to the Purchaser transferring such security interest in favor of the Indenture Trustee and transferring the obligation secured thereby to the Indenture Trustee.

 

Section 2.02. Receivables Purchase Price; Payments on the Receivables.

 

(a) On the Closing Date, in exchange for the Receivables and other assets described in Section 2.01(a), the Purchaser shall pay the Seller the Receivables Purchase Price which is equal to (i) $______ in immediately available funds
from the sale of the Offered Notes to the Underwriters and (ii) a capital contribution from the Company to the Depositor in the amount of $______ (representing the fair market value of (i) the Class B Notes and (ii) the Certificates retained by the Depositor) less (iii) the organizational, startup and transactional expenses of the Issuer, equal to $______, and the Reserve Fund Deposit.  The Purchaser, as set forth in the Sale and Servicing Agreement, shall deposit, from funds it receives from the sale
of the Class A Notes, the Reserve Fund Deposit into the Reserve Fund, which amount shall be an asset of the Issuer.  Daimler Retail Receivables shall receive, and shall be the holder of, the Class B Notes and the Certificates.

 

(b) The Purchaser shall be entitled to, and shall convey such right to the Issuer pursuant to the Sale and Servicing Agreement, all amounts due and collected on or in respect of the Receivables received after the Cutoff Date.

 

Section 2.03. Transfer of Receivables.  Pursuant to the Sale and Servicing Agreement, the Purchaser
will assign all of its right, title and interest in, to and under the Receivables and 

 

 

 

3

 

 

 

other assets described in Section 2.01(a) to the Issuer.  The parties hereto acknowledge that the Issuer will pledge its rights in, to and under the Receivables and other assets described in Section 2.01(a) to the Indenture Trustee pursuant to the Indenture.  The Purchaser shall have the right to assign its interest under this Agreement as
may be required to effect the purposes of the Sale and Servicing Agreement, without the consent of the Seller, and the Issuer as assignee shall succeed to the rights hereunder of the Purchaser.

 

Section 2.04. Examination of Receivable Files.  The Seller will make the Receivable Files available to the Purchaser or its agent for examination at the Seller’s
offices or such other location as otherwise shall be agreed upon by the Purchaser and the Seller.

 

 

 

 

4

 

ARTICLE THREE

 

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.01. Representations and Warranties of the Purchaser.  The Purchaser hereby represents
and warrants to the Seller as of the date of this Agreement and the Closing Date that:

 

(a) Organization and Good Standing.  The Purchaser has been duly organized and is validly existing as a limited liability company under the laws of the State
of Delaware, and has the power to own its assets and to transact the business in which it is currently engaged.  The Purchaser is duly authorized to transact business and has obtained all necessary licenses and approvals, and is in good standing in each jurisdiction in which the character of the business transacted by it or any properties owned or leased by it requires such authorization.

 

(b) Power and Authority.  The Purchaser has the power and authority to execute and deliver and perform its obligations under this Agreement and each other Purchaser
Basic Document, and the execution, delivery and performance of this Agreement and each other Purchaser Basic Document has been duly authorized by the Purchaser.  When executed and delivered, this Agreement and the other Purchaser Basic Documents will constitute legal, valid and binding obligations of the Purchaser enforceable in accordance with their respective terms, except that such enforceability may be subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent
transfer and other similar laws relating to or affecting creditors generally, and to general equitable principles (regardless of whether considered in a Proceeding in equity or at law), including concepts of commercial reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief.

 

(c) No Violation.  The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the certificate of formation or limited liability company agreement of the Purchaser, or any indenture, agreement or other instrument to which the Purchaser is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents);
nor violate any Applicable Law or, to the best of the Purchaser’s knowledge, any order, rule or regulation applicable to the Purchaser of any Governmental Authority having jurisdiction over the Purchaser or its properties.

 

(d) No Proceedings.  To the knowledge of the Purchaser, there are no Proceedings or investigations pending or threatened against the Purchaser before any Governmental
Authority having jurisdiction over the Purchaser or its properties (i) asserting the invalidity of any Basic Document, (ii) seeking to prevent the consummation of any of the transactions contemplated by any Basic Document, (iii) seeking any determination or ruling that would materially and adversely affect the 

 

 

 

 

5

 

 

 

performance by the Purchaser of its obligations under, or the validity or enforceability of, any Purchaser Basic Document or (iv) seeking any determination or ruling that would adversely affect the federal tax attributes of the Issuer or the Securities.

 

(e) Principal Executive Office.  The chief executive office of the Purchaser is at 36455 Corporate Drive, Farmington Hills, Michigan 48331.

 

Section 3.02. Representations and Warranties of the Seller.  The Seller hereby represents and
warrants to the Purchaser as of the date of this Agreement and the Closing Date, that:

 

(a) Organization and Good Standing.  The Seller has been duly organized and is validly existing as a limited liability company under the laws of the State of
Delaware, and has the power to own its assets and to transact the business in which it is currently engaged.  The Seller is duly authorized to transact business and has obtained all necessary licenses and approvals, and is in good standing in each jurisdiction in which the character of the business transacted by it or any properties owned or leased by it requires such authorization.

 

(b) Power and Authority.  The Seller has the power and authority to execute and deliver and perform its obligations under this Agreement and each other Seller
Basic Document, and the execution, delivery and performance of this Agreement and each other Seller Basic Document has been duly authorized by the Seller.  When executed and delivered, this Agreement and the other Seller Basic Documents will constitute legal, valid and binding obligations of the Seller enforceable in accordance with their respective terms, except that such enforceability may be subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer
and other similar laws relating to or affecting creditors generally, and to general equitable principles (regardless of whether considered in a Proceeding in equity or at law), including concepts of commercial reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief.

 

(c) No Violation.  The execution, delivery and performance by the Seller of this Agreement and the sale of the Receivables, the consummation of the transactions
contemplated hereby and by each other Seller Basic Document and the fulfillment of the terms hereof and thereof will not conflict with, result in a breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under the certificate of formation or limited liability company agreement of the Seller, nor conflict with or violate any of the material terms or provisions of, or constitute (with or without notice or lapse of time or both) a default under, any
indenture, agreement or other instrument to which it is a party or by which it shall be bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement); nor violate any law or, to its knowledge, any order, rule or regulation applicable to it of any court or of any federal or State regulatory body, administrative agency or other governmental instrumentality having jurisdiction over it or
its properties, which breach, default, conflict, Lien or violation would have a material adverse effect on the Seller’s earnings, 

 

 

 

 

6

 

 

 

business affairs or business prospects or on the ability of the Seller to perform its obligations under this Agreement.

 

(d) No Proceedings.  To the knowledge of the Seller, there are no Proceedings or investigations pending or threatened against the Seller before any Governmental
Authority having jurisdiction over the Seller or its properties (i) asserting the invalidity of any Basic Document, (ii) seeking to prevent the consummation of any of the transactions contemplated by any Basic Document, (iii) seeking any determination or ruling that would materially and adversely affect the performance by the Purchaser of its obligations under, or the validity or enforceability of, any Seller Basic Document or (iv) seeking any determination or ruling that would adversely affect
the federal tax attributes of the Issuer or the Securities.

 

(e) Principal Executive Office.  The chief executive office of the Seller is at 36455 Corporate Drive, Farmington Hills, Michigan 48331.

 

(f) No Consents.  The Seller is not required to obtain the consent of any other party or any consent, license, approval, registration, authorization, or declaration
of or with any Governmental Authority in connection with the execution, delivery, performance, validity, or enforceability of this Agreement or any other Seller Basic Document that has not already been obtained.

 

(g) Solvency.  The sale of the Receivables to the Purchaser is not being made with any intent to hinder, delay or defraud any of its creditors.  The
Seller is not insolvent, nor will the Seller be made insolvent by the transfer of the Receivables, nor does the Seller anticipate any pending insolvency.

 

Section 3.03. Representations and Warranties as to the Receivables.

 

(a) Eligibility of Receivables.  The Seller makes the representations and warranties set forth
in Exhibit A with respect to the Receivables, on which the Purchaser relies in accepting the Receivables and in selling, transferring, assigning and otherwise conveying the Receivables to the Issuer under the Sale and Servicing Agreement and on which the Issuer relies in pledging the same to the Indenture Trustee pursuant to the Indenture.  Except as otherwise provided, such representations and warranties speak as of the date of execution and delivery of this Agreement and the Closing Date, but
shall survive the sale, transfer, assignment and conveyance of the Receivables to the Purchaser, the subsequent sale, transfer and assignment of the Receivables by the Purchaser to the Issuer pursuant to the Sale and Servicing Agreement and the pledge of the Receivables by the Issuer to the Indenture Trustee pursuant to the Indenture.

 

(b) Notice of Breach.  The Purchaser, the Seller, the Issuer or either Trustee, as the case may be, shall inform the other parties promptly, in writing, upon discovery
of any breach of the Seller’s representations and warranties pursuant to Section 3.03(a) which materially and adversely affects the interests of the Noteholders in any Receivable.

 

(c) Repurchase of Receivables.  In the event of a breach of any representation or warranty set
forth pursuant to Section 3.03(a) (including by means of a subsequently discovered 

 

 

 

7

 

 

 

breach of any local law or ruling or regulation thereunder) which materially and adversely affects the interests of the Purchaser, the Issuer or the Noteholders in any Receivable that shall not have been cured by the close of business on the last day of the Collection Period which includes the 30th day after the date on which the Seller becomes aware of, or receives written
notice from the Servicer, the Purchaser, the Issuer or either Trustee of such breach, the Seller shall repurchase such Receivable from the Issuer as of the close of business on the last day of such Collection Period, by depositing an amount equal to the Purchase Amount into the Collection Account on the related Deposit Date.  This repurchase obligation shall apply to all representations and warranties contained in Section 3.03(a) except as otherwise noted whether or not the Seller or the Purchaser
has knowledge of the breach at the time of the breach or at the time the representations and warranties were made.  In consideration of the repurchase of any such Receivable the Seller shall remit an amount equal to the Purchase Amount in respect of such Receivable to the Issuer in the manner set forth in the Sale and Servicing Agreement.  In the event that, as of the date of execution and delivery of this Agreement, any Liens shall have been filed, including Liens for work, labor or materials
relating to a Financed Vehicle, that shall be prior to, or equal or coordinate with, the Lien granted by the related Receivable (whether or not the Seller has knowledge thereof), which Liens shall not have been satisfied or otherwise released in full as of the Closing Date, the Seller shall repurchase such Receivable on the terms and in the manner specified above.  Upon any such repurchase, the Purchaser shall, without further action, be deemed to transfer, assign, set-over and otherwise convey to the
Seller, without recourse, representation or warranty, all the right, title and interest of the Purchaser in, to and under such repurchased Receivable, all other related assets described in Section 2.01(a) and all monies due or to become due with respect thereto and all proceeds thereof.  The Purchaser, the Issuer, the Owner Trustee or the Indenture Trustee, as applicable, shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested
by the Seller to effect the conveyance of such Receivable pursuant to this Section.  The sole remedy of the Purchaser, the Issuer, the Trustees or the Noteholders with respect to a breach of the Seller’s representations and warranties pursuant to Section 3.03(a) or with respect to the existence of any such Liens or claims shall be to require the Seller to repurchase the related Receivables pursuant to this Section.

 

Section 3.04. Representations and Warranties as to Security Interests.  The Seller represents and warrants to the Purchaser as of the Closing Date:

 

(a)   This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables in favor of the Purchaser, which security interest is prior to all other Liens, and is enforceable
as such against creditors of and purchasers from the Seller.

 

(b) The Seller has taken all steps necessary to perfect its security interest against the Obligor in the Financed Vehicles.

 

(c) The Receivables constitute “tangible chattel paper” within the meaning of the applicable UCC.

 

(d) The Seller owns and has good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person.

 

 

 

 

8

 

 

(e) All original executed copies of each loan agreement that constitute or evidence the Receivables have been delivered to the Servicer, as custodian for the Issuer.

 

(f) The Seller has received a written acknowledgment from the Servicer that the Servicer is holding the loan agreements that constitute or evidence the Receivables solely on behalf and for the benefit of the Issuer.

 

(g) Other than the security interest granted to the Purchaser pursuant to this Agreement, the Seller has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables.  The Seller
has not authorized the filing of and is not aware of any financing statements against the Purchaser that include a description of collateral covering the Receivables other than any financing statement relating to the security interest granted to the Purchaser hereunder or that has been terminated.  The Seller is not aware of any judgment or tax lien filings against the Seller.

 

(h) None of the loan agreements that constitute or evidence the Receivables has any marks or notations indicating that it has been pledged, assigned, or otherwise conveyed to any Person other than the Purchaser.

 

Notwithstanding the foregoing, the representations and warranties set forth in this Section may not be waived.  The representations and warranties set forth in this Section will survive the termination of this Agreement until the Indenture has been discharged.

 

 

 

 

9

 

ARTICLE FOUR

 

 

CONDITIONS

 

Section 4.01. Conditions to Obligation of the Purchaser.  The obligation of the Purchaser to purchase
the Receivables from the Seller on the Closing Date is subject to the satisfaction of the following conditions:

 

(a) Representations and Warranties True.  The representations and warranties of the Seller contained herein and in the other Seller Basic Documents shall be true
and correct on the Closing Date with the same effect as if made on the Closing Date, and the Seller shall have performed all obligations to be performed by it hereunder and under the other Seller Basic Documents on or before the Closing Date.

 

(b) Computer Files Marked.  The Seller shall, at its own expense, on or before the Closing Date, indicate in its computer files that the Receivables have been
sold to the Purchaser pursuant to this Agreement and deliver to the Purchaser an Officer’s Certificate confirming that its computer files have been marked pursuant to this subsection, and shall deliver to the Purchaser the Schedule of Receivables, certified by an authorized officer of the Seller to be true, correct and complete.

 

(c) Execution of Basic Documents.  The Basic Documents shall have been executed and delivered by the parties thereto.

 

(d) First-Tier Assignment.  The Purchaser shall have received the First-Tier Assignment, dated as of the Closing Date.

 

(e) Other Transactions.  The transactions contemplated by the Basic Documents shall be consummated on the Closing Date.

 

Section 4.02. Conditions to Obligation of the Seller.  The obligation of the Seller to sell the
Receivables to the Purchaser on the Closing Date is subject to the satisfaction of the following conditions:

 

(a) Representations and Warranties True.  The representations and warranties of the Purchaser contained herein and in the other Purchaser Basic Documents shall
be true and correct on the Closing Date, with the same effect as if then made, and the Purchaser shall have performed all obligations to be performed by it hereunder and under the other Purchaser Basic Documents on or before the Closing Date.

 

(b) Payment of Receivables Purchase Price.  In consideration of the sale of the Receivables from
the Seller to the Purchaser as provided in Section 2.01, on the Closing Date the Purchaser shall have paid to the Seller an aggregate amount equal to the Receivables Purchase Price.

 

 

 

 

10

 

ARTICLE FIVE

 

 

COVENANTS OF THE SELLER

 

Section 5.01. Protection of Right, Title and Interest in, to and Under the Receivables.

 

(a) The Seller, at its expense, shall cause this Agreement and all financing statements and continuation statements and any other necessary documents covering the Purchaser’s right, title and interest in, to and under the Receivables
and other property conveyed by the Seller to the Purchaser hereunder to be promptly authorized, recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by Applicable Law fully to preserve and protect the right, title and interest of the Purchaser hereunder to the Receivables and such other property.  The Seller shall deliver to the Purchaser file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such recording, registration or filing.  The Purchaser shall cooperate fully with the Seller in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this subsection.

 

(b) Within 30 days after the Seller makes any change in its name, identity or organizational structure which would make any financing statement or continuation statement filed in accordance with this Agreement seriously misleading within
the meaning of the UCC as in effect in the applicable State, the Seller shall give the Purchaser notice of any such change and within 30 days after such change shall authorize, execute and file such financing statements or amendments as may be necessary to continue the perfection of the Purchaser’s security interest in the Receivables and the proceeds thereof.

 

(c) The Seller shall give the Purchaser written notice within 60 days of any relocation of any office from which the Seller keeps records concerning the Receivables or of its principal executive office or its jurisdiction of organization
and whether, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and within 60 days after such relocation shall authorize, execute and file such financing statements or amendments as may be necessary to continue the perfection of the interest of the Purchaser in the Receivables and the proceeds thereof.  The Seller shall at all times maintain its
jurisdiction of organization, its principal place of business, its chief executive office and the location of the office where the Receivable Files and any accounts and records relating to the Receivables are kept within the United States.

 

(d) The Seller shall maintain accounts and records as to each Receivable accurately and in sufficient detail to permit (i) the reader thereof to know at any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on (or with respect to) each Receivable.

 

(e) The Seller shall maintain its computer systems so that, from and after the time of the transfer of the Receivables to the Purchaser pursuant to this Agreement, the Seller’s master computer records (including any back-up archives)
that refer to a Receivable shall indicate 

 

 

 

 

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clearly and unambiguously that such Receivable is owned by the Purchaser (or, upon transfer of the Receivables to the Issuer, by the Issuer).  Indication of the Purchaser’s ownership of a Receivable shall be deleted from or modified on the Seller’s computer systems when, and only when, such Receivable shall have been paid in full or repurchased by
the Seller.

 

(f) If at any time the Seller shall propose to sell, grant a security interest in or otherwise transfer any interest in any motor vehicle installment sales contract to any prospective purchaser, lender or other transferee, the Seller
shall give to such prospective purchaser, lender or other transferee computer tapes, compact disks, records or print-outs (including any restored from back-up archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly and unambiguously that such Receivable has been sold and is owned by the Purchaser (or, upon transfer of the Receivables to the Issuer, by the Issuer), unless such Receivable has been paid in full or repurchased by the Seller.

 

(g) The Seller shall permit the Purchaser and its agents at any time during normal business hours to inspect, audit and make copies of and abstracts from the Seller’s records regarding any Receivable, upon reasonable prior notice.

 

(h) If the Seller has repurchased one or more Receivables from the Purchaser or the Issuer pursuant to Section 3.03(c), the Seller shall, upon request, furnish to the Purchaser, within ten Business Days, a list of all Receivables
(by Receivable number and name of Obligor) then owned by the Purchaser or the Issuer, together with a reconciliation of such list to the Schedule of Receivables.

 

Section 5.02. Security Interests.  Except for the conveyances hereunder, the Seller covenants that it will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur, assume or suffer to exist any Lien on any Receivable, whether now existing or hereafter created, or any interest therein; the Seller will immediately notify the Purchaser of the existence of any Lien on any Receivable and, in the event that the interests of the Noteholders in such Receivable are materially and adversely affected, such Receivable shall be repurchased from the Purchaser by the Seller in the manner and with the effect specified in Section 3.03(c), and the Seller shall
defend the right, title and interest of the Purchaser and its assigns in, to and under the Receivables, whether now existing or hereafter created, against all claims of third parties claiming through or under the Seller; provided, however, that nothing in this subsection shall prevent or be deemed to prohibit the Seller from suffering to exist upon a Receivable any Lien for municipal or other local taxes if such taxes shall not at the time be due and payable or if the Seller shall currently be contesting the
validity of such taxes in good faith by appropriate Proceedings and shall have set aside on its books adequate reserves with respect thereto.

 

Section 5.03. Delivery of Payments.  The Seller covenants and agrees to deliver in kind upon receipt to the Servicer under the Sale and Servicing Agreement all
payments received by or on behalf of the Seller in respect of the Receivables as soon as practicable after receipt thereof by the Seller.

 

Section 5.04. No Impairment.  The Seller covenants that it shall take no action, nor omit to take any action, which would impair the rights of the Purchaser, the
Issuer or the Noteholders 

 

 

 

 

12

 

 

 

in any Receivable, nor shall it, except as otherwise provided in this Agreement or the Sale and Servicing Agreement, reschedule, revise or defer payments due on any Receivable.

 

Section 5.05. Costs and Expenses.  The Seller shall pay all reasonable costs and expenses incurred in connection with the perfection of the Purchaser’s right,
title and interest in, to and under the Receivables.

 

Section 5.06. Sale.  The Seller agrees to treat the conveyances hereunder for all purposes (including financial accounting purposes) as an absolute transfer on
all relevant books, records, financial statements and related documents.

 

Section 5.07. Hold Harmless.  The Seller shall protect, defend, indemnify and hold the Purchaser and the Issuer and their respective assigns and their attorneys,
accountants, employees, officers and directors harmless from and against all losses, costs, liabilities, claims, damages and expenses of every kind and character, as incurred, resulting from or relating to or arising out of (i) the inaccuracy, nonfulfillment or breach of any representation, warranty, covenant or agreement made by the Seller in this Agreement, (ii) any legal action, including any counterclaim, that has either been settled by the litigants (which settlement, if the Seller is not a party
thereto shall be with the consent of the Seller) or has proceeded to judgment by a court of competent jurisdiction, in either case to the extent it is based upon alleged facts that, if true, would constitute a breach of any representation, warranty, covenant or agreement made by the Seller in this Agreement, (iii) any actions or omissions of the Seller or any employee or agent of the Seller occurring prior to the Closing Date with respect to any Receivable or the related Financed Vehicle or (iv) any
failure of a Receivable to be originated in compliance with all requirements of law.  These indemnity obligations shall be in addition to any obligation that the Seller may otherwise have.

 

 

 

 

13

 

ARTICLE SIX

 

 

MISCELLANEOUS PROVISIONS

 

Section 6.01. Amendment.

 

(a) This Agreement may be amended from time to time by a written amendment duly executed and delivered by the parties hereto, without the consent of any Securityholder, to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein or to add any other provision with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement or the Sale and Servicing Agreement; provided, however, that any such amendment shall not, as evidenced by an Opinion of Counsel to the Seller delivered to the Indenture Trustee, adversely affect in any material respect the interests of any Noteholder.

 

(b) This Agreement may also be amended from time to time for any other purpose by a written amendment duly executed and delivered by the Seller and by the Purchaser; provided, however, that any such amendment that materially adversely
affects the interests of the Noteholders under the Indenture, the Sale and Servicing Agreement or the Trust Agreement must be consented to by the Holders of Notes evidencing not less than 662⁄3% of the Note Balance of the Controlling Class of Notes (or if the Notes are no longer Outstanding, Holders of Certificates evidencing not less than 51% of the aggregate Certificate Percentage Interests).  Promptly after the execution of any such amendment, the Seller shall furnish written notification of
the substance of such amendment to the Trustees and the Rating Agencies.

 

Section 6.02. Termination.  The respective obligations and responsibilities of the Seller and the Purchaser created hereby shall terminate, except for the indemnity
obligations of the Seller as provided herein, upon the termination of the Issuer as provided in the Trust Agreement.

 

Section 6.03. GOVERNING LAW.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 6.04. Notices.  Unless otherwise specified in this Agreement, all notices, requests, demands, consents, waivers or other communications to or from the
parties to this Agreement will be in writing.  Notices, requests, demands, consents and other communications will be deemed to have been given and made, (i) upon delivery or, in the case of a letter mailed via registered first class mail, postage prepaid, three days after deposit in the mail and (ii) in the case of (a) a facsimile, when receipt is confirmed by telephone or by reply email or reply facsimile from the recipient, (b) an e-mail, when receipt is confirmed by telephone
or by reply email from the recipient and (c) an electronic posting to a password-protected website, upon printed confirmation of the recipient’s access to such password-protected website, or when notification of such electronic posting is confirmed in accordance with clauses (ii)(b) through 

 

 

 

14

 

 

(ii)(c) above.  Unless otherwise specified in this Agreement, any such notice, request, demand, consent or other communication will be delivered or addressed, in the case of (i) the Seller, at DCFS USA LLC, 36455 Corporate Drive, Farmington Hills, Michigan 48331, Facsimile: (248) 991-6962, (ii) the Purchaser, at Daimler Retail Receivables LLC, c/o DCFS
USA LLC, 36455 Corporate Drive, Farmington Hills, Michigan 48331, Facsimile:  (248) 991-6962 and (ii) as to each of the foregoing, at such other address as shall be designated by written notice to the other party.

 

Section 6.05. Severability.  If any one or more of the covenants, agreements, provisions or terms of this Agreement is held invalid, illegal or unenforceable,
then such covenants, agreements, provisions or terms will be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement and will in no way affect the validity, legality or enforceability of the other covenants, agreements, provisions and terms of this Agreement or of the Receivables or the rights of the holders thereof.

 

Section 6.06. Further Assurances.  The Seller and the Purchaser agree to do and perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other party hereto or by the Issuer or the Indenture Trustee more fully to effect the purposes of this Agreement, including the execution of any financing statements, amendments, continuation statements or releases relating to the Receivables for filing under the provisions of the UCC or other law of any applicable jurisdiction.

 

Section 6.07. Waivers.  No failure or delay on the part of the Seller or the Purchaser in exercising any power, right or remedy under this Agreement will operate
as a waiver thereof, nor will any single or partial exercise of any such power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy.

 

Section 6.08. Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be an original, and all of which will together constitute
one and the same instrument.

 

Section 6.09. Successors and Assigns.  All covenants and agreements contained herein will be binding upon, and inure to the benefit of, the parties hereto and
their respective successors and permitted assigns, all as provided in this Agreement.  Any request, notice, direction, consent, waiver or other instrument or action by a party to this Agreement will bind the successors and assigns of such party.  Except as otherwise provided in this Agreement, no other Person will have any right or obligation under this Agreement.

 

Section 6.10. Table of Contents and Headings.  The Table of Contents and the various headings in this Agreement are included for convenience only and will not
affect the meaning or interpretation of any provision of this Agreement.

 

Section 6.11. Representations, Warranties and Agreements to Survive.  The respective representations, warranties and agreements by the Seller and the Purchaser
set forth in or made pursuant to this Agreement will remain in full force and effect and will survive the closing hereunder of the transactions contemplated hereby.

 

 

 

 

15

 

 

Section 6.12. No Petition.  Each of the Seller and the Purchaser covenants that it will not at any time institute against, or join any Person
in instituting against, the Issuer or the Purchaser any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings or other Proceedings under any Insolvency Law in connection with any obligations relating to the Notes or any Basic Document and agrees that it will not cooperate with or encourage others to file a bankruptcy petition against the Issuer or the Purchaser during the same period.

 

 

 

 

16

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Receivables Purchase Agreement to be duly executed by their respective officers, thereunto duly authorized, as of the day and year first above written.

 

	 	
DCFS USA LLC,

    as Seller

	 
	 	 	 	 
	
 
	
By: 
	 	 
	 	 	Name: Brian Stevens	 
	 	 	Title: Vice President and Controller	 
	 	 	 	 

 

 

	 	
DAIMLER RETAIL RECEIVABLES LLC,

    as Purchaser
	 
	 	 	 	 
	
 
	
By: 
	 	 
	 	 	Name: Steven C. Poling	 
	 	 	Title: Assistant Secretary	 
	 	 	 	 

 

 

 

 

 

 

SCHEDULE A

 

SCHEDULE OF RECEIVABLES

 

[Original on file at Purchaser’s office]

 

 

SA-1

 

SCHEDULE B

 

LOCATION OF RECEIVABLE FILES

 

DCFS USA LLC

36455 Corporate Drive

Farmington Hills, Michigan 48331

 

 

 

SB-1

 

EXHIBIT A

 

REPRESENTATIONS AND WARRANTIES AS TO THE RECEIVABLES

 

See Exhibit A to Sale and Servicing Agreement

 

 

 

A-1

 

 

EXHIBIT B

 

FORM OF FIRST-TIER ASSIGNMENT

 

 For value received, in accordance with the receivables purchase agreement, dated as of __________ 1, 2009 (the “Receivables Purchase Agreement”), between DCFS USA LLC (the “Seller”) and DAIMLER RETAIL RECEIVABLES LLC (the “Purchaser”), the Seller does hereby irrevocably sell,
transfer, assign and otherwise convey unto the Purchaser, without recourse (subject to the obligations of the Seller herein and in the Receivables Purchase Agreement), all right, title and interest of the Seller in, to and under, whether now owned or existing or hereafter acquired or arising, in, to and under the following:

 

(i) the Receivables listed on Schedule A hereto (the “Receivables”) and all amounts due and received on or in respect of the Receivables (including proceeds of the repurchase of Receivables by the Seller pursuant to
the Receivables Purchase Agreement) after the Cutoff Date;

 

(ii) the security interests in the Financed Vehicles granted by the Obligors pursuant to the Receivables and any other interest of the Seller in such Financed Vehicles;

 

(iii) all proceeds from claims on any physical damage or theft insurance policies and extended warranties covering the Financed Vehicles and any proceeds of any credit life or credit disability insurance policies relating to the Receivables,
the related Financed Vehicles or the related Obligors;

 

(iv) the Receivable Files that relate to the Receivables;

 

(v) any proceeds of Dealer Recourse that relate to the Receivables;

 

(vi) the right to realize upon any property (including the right to receive future Net Liquidation Proceeds and Recoveries) that shall have secured a Receivable and have been repossessed by or on behalf of the Seller; and

 

(vii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing, and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all
of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all accounts, accounts receivable, general intangibles, chattel paper, documents, money, investment property, deposit accounts, letters of credit, letter of credit rights, insurance proceeds, condemnation awards, notes, drafts, acceptances, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute
all or part of or are included in the proceeds of any of the foregoing.

 

In the event that the foregoing sale, transfer, assignment and conveyance is deemed to be a pledge, the Seller hereby grants to the Purchaser a first priority security interest in all of the 

 

 

 

 

B-1

 

 

Seller’s right to and interest in the Receivables and other property described in clauses (i) through (vii) above to secure a loan deemed to have been made by the Purchaser to the Seller in an amount equal to the sum of the initial principal amount of the Notes plus accrued interest thereon.

 

THIS FIRST-TIER ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

This First-Tier Assignment is made pursuant to and upon the representations, warranties and agreements on the part of the undersigned contained in the Receivables Purchase Agreement and is to be governed by the Receivables Purchase Agreement.

 

Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Receivables Purchase Agreement.

 

IN WITNESS WHEREOF, the undersigned has caused this First-Tier Assignment to be duly executed as of the day and year first written above.

 

	 	
DCFS USA LLC
	 
	 	 	 	 
	
Date
	
By: 
	 	 
	 	 	Name:	 
	 	 	Title: 	 
	 	 	 	 

 

 B-2ex10-1.htm

    EXHIBIT
10.1

     

    INTERNATIONAL
FLAVORS & FRAGRANCES INC.

     

    

     

    September
8, 2009

     

     

    Mr.
Douglas D. Tough

     

     

     

    
      	
               
      

            	
              Re:

            	
              Employment
      Terms

            

    

     

    Dear
Doug:

     

    On behalf
of the Board of Directors (the “Board”) of International Flavors &
Fragrances Inc. (the “Company”), I am pleased to offer you employment with the
Company on the following terms under this agreement (“Agreement”):

     

    1.    EFFECTIVE
DATE; TERM:  Your employment with the Company will commence on
October 1, 2009, or as soon thereafter as you have fulfilled all employment
obligations to your current employer (the “Effective Date”); provided, this
Agreement shall be void ab initio if
your employment does not commence by April 1, 2010.  Subject to the
provisions of this Agreement, your employment with the Company will be on an “at
will” basis.

     

    2.    POSITION;
PRINCIPAL PLACE OF EMPLOYMENT: You will be employed as the Chief
Executive Officer of the Company (“CEO”) with all of the normal duties and
authorities of such position.  Your principal place of employment will
be at the Company’s headquarters in New York, New York.

     

    3.    BOARD
MEMBERSHIP; CHAIRMANSHIP:  The Board shall take such action as
may be necessary to elect you as Chairman of the Board as of the Effective
Date.  Thereafter, during your employment with the Company, the Board
shall nominate you for re-election as a member of the Board at each expiration
of your then-current term as a director.  You agree that on and after
the Effective Date you will serve without additional compensation as a member of
the Board and as an officer and director of any of the Company’s
subsidiaries.  You may, with the Board’s approval, serve on outside
boards of directors so long as your duties as a director on those other boards
do not interfere with your performance as Chairman and CEO of the
Company.

     

    4.    BASE
SALARY:  You will be paid a minimum base salary (the “Base
Salary”) at an annual rate of one million two hundred thousand dollars
($1,200,000), payable in accordance with the regular payroll practices of the
Company.  Your Base Salary shall be reviewed for increase annually by
the Board (or a committee thereof) beginning after the second anniversary of the
Effective Date and may be increased, but not decreased, from time to time by the
Board.

     

    5.    ANNUAL
BONUS:  You will be eligible to participate in the Company’s
Annual Incentive Plan (the “AIP”) at a level commensurate with your
position.  You will have the 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Douglas D. Tough

    September 8, 2009

    Page 2

     

     

    opportunity
to earn a target annual AIP bonus measured against objective criteria to be
determined by the Board (or a committee thereof) of one hundred twenty percent
(120%) of Base Salary (“Target AIP Bonus”) and a maximum annual AIP bonus of two
hundred forty percent (240%) of Base Salary.  To the extent that the
Effective Date occurs during the 2009 fiscal year, your 2009 annual AIP bonus
shall be based on the achievement of the applicable performance goals and
pro-rated based on the number of days that you are employed during the fiscal
year.  Your 2009 AIP bonus shall be not less than one-half of your
pro-rated Target AIP Bonus.

     

    6.    LONG
TERM INCENTIVE:  You will participate in the Company’s current
Long-Term Incentive (LTI) Plan Cycles as follows:

     

    (a)    2008 – 2010
Cycle:  You will participate in the cycle for the 2008 – 2010
fiscal years based on an LTI target-level award of $2,000,000, pro-rated based
on the number of days you are employed during the cycle divided by
1095.  Your LTI payout will be based on Company performance during the
cycle, with no guaranteed minimum.

     

    (b)    2009 – 2011
Cycle:  You will participate in the cycle for the 2009 – 2011
fiscal years based on an LTI target-level award of $2,000,000, pro-rated based
on the number of days you are employed during the cycle divided by
1095.  Your LTI payout will be based on Company performance during the
cycle, with no guaranteed minimum.

     

    7.    SIGN-ON
EQUITY AWARD:  On the Effective Date, you will receive an
initial Equity Choice Award with a face value of $750,000 (“Sign-On
Award”).  You may elect to receive your Sign-On Award as you may
allocate, in accordance with the Equity Choice Program, from among settled stock
appreciation rights (“SARs”), purchased restricted stock and restricted stock
units.  The Sign-On Award will cliff vest on the first anniversary of
the Effective Date, provided that you are employed on such anniversary for the
Sign-On Award to so vest (except as provided below).

     

    8.    SPECIAL
BONUS PAYMENT:  In order to compensate you for certain
forfeited bonus opportunities at your current employer and as an inducement for
you to join the Company, on July 1, 2010, you will be paid $500,000 if you are
an active employee on that date (the “Special Bonus”).

     

    9.    FUTURE
EQUITY GRANTS: Beginning
in 2010, you will participate in all Company equity and LTI programs at levels
commensurate with your position.

     

    10.   EMPLOYEE
BENEFITS; PERQUISITES; VACATION: You will be entitled to participate in
all employee and executive 401(k) and welfare benefit plans, programs and
arrangements, and all employee and executive perquisite arrangements, generally
applicable to senior executives, in accordance with Company policy, including,
but not limited to, (i) dues for a luncheon club in Manhattan, (ii) access to a
Company provided automobile, and (iii) a financial planning, tax preparation and
estate planning services allowance in the amount of $25,000 per
year.  You will be entitled to annual paid vacation in accordance with
the Company’s policy 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Douglas D. Tough

      September 8, 2009

      Page 3

       

       

    

    applicable
to senior executives, but in no event less than four (4) weeks per calendar year
(as prorated for partial years).

     

    11.   TERMINATION:  Your
employment may be terminated by either the Company or you at any
time:  due to your death or Disability, by the Company for Cause or
without Cause, or by you for Good Reason or without Good Reason (Disability,
Cause and Good Reason are each defined on Attachment A).  Any
termination by you (other than due to death or Disability) shall require thirty
(30) days prior written notice to the general counsel of the
Company.

     

    (a)    DEATH OR
DISABILITY.  In the event that your employment terminates on
account of your death or Disability, the Company shall pay or provide you
(or your designated beneficiary, or if you have not designated a
beneficiary, your estate) (i) any unpaid Base Salary through the date of
termination and any accrued but unused vacation in accordance with Company
policy; (ii) any unpaid bonus earned with respect to any fiscal year ending
on or preceding the date of termination, whether calculated at the date of
termination or thereafter; (iii) reimbursement for any unreimbursed
expenses incurred in accordance with Company policy through the date of
termination; and (iv) all other payments, benefits or perquisites to which
you may be entitled under the terms of any applicable compensation arrangement
or benefit, equity or perquisite plan or program or grant (collectively,
“Accrued Amounts”).  In addition, you (or your estate) will be paid a
pro-rata AIP bonus for the fiscal year in which your termination occurs, based
on actual performance and payable when bonuses are paid to other senior
executives.  The balance of any unvested portion of the Sign-On Equity
Award will fully vest on the date of termination of employment on account of
your death or Disability, and other long-term incentive awards shall vest pro
rata in accordance with the terms of the Company’s Executive Separation
Policy.  If your death or Disability occurs prior to July 1, 2010, you
(or your estate) will be paid the Special Bonus on July 1,
2010.

     

    (b)    TERMINATION FOR
CAUSE OR WITHOUT GOOD REASON.  If your employment is terminated
(i) by the Company for Cause or by you without Good Reason, the Company
will pay you only the Accrued Amounts (but not including any unpaid bonus
described in Section 11(a)(ii) above).

     

    (c)    TERMINATION WITHOUT
CAUSE OR FOR GOOD REASON.  If your employment is terminated by
the Company without Cause (other than a termination due to Disability) or by you
for Good Reason, the Company will pay or provide you with the Accrued Amounts
and severance benefits under the Company’s Executive Separation Policy, as
amended (“ESP”).  The severance benefits described in the preceding
sentence shall in no event be less than (or more than, in the case of amounts
and benefits due under clauses (ii) and (iii), if you have attained age 63 on
the date of termination) (i) a pro-rata AIP bonus for the fiscal year in
which your termination occurs, based on actual performance and payable when
bonuses are paid to other senior executives; (ii) an amount equal to the
product of (A) the sum of (x) your then Base Salary and (y) your
then Target AIP Bonus multiplied by (B) two (2) (or one and one-half (1.5)
if you have attained age 63 and not age 64 on the date of termination or one (1)
if you have attained age 64 on the date of termination), payable in
substantially equal installments in accordance with the Company’s regular
payroll cycle over a period of 24 months (or 18 months 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Douglas D. Tough

      September 8, 2009

      Page 4

    

     

    or 12
months if the severance multiplier is one and one-half (1.5) or one (1),
respectively) (each payment continuation period, as applicable, the “Severance
Period”) from your date of termination (with such payments commencing on the
earliest payroll date that does not result in adverse tax consequences to you
under Section 409A of the Internal Revenue Code, and with the initial
payment including any payments that have been delayed because of Code
Section 409A); and (iii) subject to your continued co-payment of premiums,
continued participation for the applicable Severance Period in all welfare
benefit plans which cover you (and eligible dependents) upon the same terms and
conditions (except for the requirements of your continued employment) in effect
for active employees of the Company, provided that if such benefits are not
available to former employees of the Company under the terms of the applicable
benefit plan or program, you will receive the value thereof to the extent
permitted by Code Section 409A.  In the event you obtain other
employment that offers comparable benefits as to any particular welfare benefit
plan or program, the coverage by the Company for such welfare plan or program
under this subsection will be reduced or eliminated, as the case may be, by such
comparable subsequent employer benefits, but in no event will you be required to
seek other employment.  The continuation of health, dental and vision
benefits under this subsection shall be coterminous with your rights to continue
benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”).  In addition, if your employment terminates under
this Section prior to July 1, 2010, you will be paid that Special Bonus
described in Section 8 above on July 1, 2010.  If your employment
terminates under this Section prior to the first anniversary of the Effective
Date, your Sign-On Equity Award will vest pro rata based on the number of days
you are employed prior to the first anniversary of the Effective
Date.  All other equity and LTI awards will be treated in accordance
with the Company’s Executive Separation Policy.

     

    12.      
CONDITIONS:  Any
payments or benefits made or provided pursuant to Section 11 (other than
Accrued Amounts) are subject to your:

     

    (a) compliance
with the restrictive covenant provisions of Section 14
hereof;

     

    (b) delivery
to the Company of an executed Release (the “Release”)
substantially in the form attached hereto as Attachment B (with such
changes therein or additions thereto as needed under then applicable law to give
effect to its intent and purpose) within twenty-one (21) days of the date of
termination of your employment; and

     

    (c) delivery
to the Company of a resignation from all offices, directorships and fiduciary
positions with the Company, its affiliates and employee benefit
plans.

     

    13.       CHANGE
IN CONTROL:

     

    (a) You will
receive Change in Control benefits under the ESP that are no less favorable than
those provided to senior executives generally; provided that, in the event of a
termination of your employment by the Company without Cause or by you for Good
Reason in contemplation of or within two years after a Change in Control (as
defined in Attachment A), (I) the severance multiplier set forth in
Section 11(c)(ii)(B) above will be three (3) rather than two (2) (or two
(2) rather than one and one-half (1.5) or one and five-tenths (1.5) rather than
one (1) 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Douglas D. Tough

      September 8, 2009

      Page 5

    

     

    as set
forth therein upon attainment of age 63 or age 64, as the case may be), and (II)
only for purposes of the benefits continuation period set forth in
Section 11(c)(iii) above, the Severance Period will be 36 months for a
severance multiplier of three (3), 24 months for a severance multiplier of two
(2), and 18 months for a severance multiplier of one and five-tenths
(1.5).

     

    (b) Any
provision of the ESP to the contrary notwithstanding, you will not be entitled
to any payment (including no tax gross-up) in respect of any taxes you may
owe pursuant to Section 4999 of the Internal Revenue Code.  In the
event that any Change in Control benefits or other benefits otherwise payable to
you (i) constitute “parachute payments” within the meaning of Section 280G of
the Code, and (ii) but for this Section 13(b), would be subject to the excise
tax imposed by Section 4999 of the Code, then your Change in Control benefits
and other benefits hereunder shall be either (x) delivered in full, or (y)
delivered as to such lesser extent which would result in no portion of such
benefits being subject to excise tax under Section 4999 of the Code, whichever
of the foregoing amounts, taking into account the applicable federal, state and
local income and employment taxes and the excise tax imposed by Section 4999 of
the Code (and any equivalent state or local excise taxes), results in the
receipt by you on an after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be taxable under
Section 4999 of the Code.  Unless the Company and you otherwise agree
in writing, any determination required under this Section 13(b) will be made in
writing by independent public accountants as the Company and you agree (the
“Accountants”), whose determination will be conclusive and binding upon you and
the Company for all purposes.  For purposes of making the calculations
required by this Section 13(b), the Accountants may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code.  The Company and you agree to furnish to the Accountants
such information and documents as the Accountants may reasonably request in
order to make a determination under this provision.  The Company will
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this provision.  Any reduction in
payments and/or benefits required by this provision shall occur in the following
order: (1) reduction of cash payments; (2) reduction of vesting acceleration of
equity awards; and (3) reduction of other benefits paid or provided to
you.  In the event that acceleration of vesting of equity awards is to
be reduced, such acceleration of vesting shall be cancelled in the reverse order
of the date of grant for your equity awards.  If two or more equity
awards are granted on the same date, each award will be reduced on a pro-rata
basis.

     

    14.      
RESTRICTIVE
COVENANTS.

     

    (a) NON-COMPETITION.  During
the Restricted Period (defined below), you will not, acting alone or with
others, directly or indirectly, either as employee, employer, consultant,
advisor, or director, or as an owner, investor, partner, or shareholder unless
your interest is insubstantial, engage in or become associated with a
“Competitive Activity.”  For this purpose, (A) the “Restricted
Period” means the period of time during which you are employed by the Company
and two (2) years following a termination of your employment for any reason (or
one and one-half (1.5) years if you have attained age 63 and not age 64 on the
date of your termination of employment or one (1) year if you have attained age
64 on the date of termination 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Douglas D. Tough

      September 8, 2009

      Page 6

    

     

     

    of your
employment); and (B) the term “Competitive Activity” means any business or
other endeavor that engages in a line of business in any geographic location
that is substantially the same as either (1) any line of operating business
which the Company or a subsidiary engages in, conducts, or to your knowledge,
has definitive plans to engage in or conduct, as of the date of termination of
your employment, or (2) any operating business that has been engaged in or
conducted by the Company or a subsidiary and as to which, to your knowledge, the
Company or subsidiary has covenanted in writing, in connection with the
disposition of such business, not to compete therewith as of the date of
termination of your employment.  The Compensation Committee of the
Board (the “Committee”) shall, in the reasonable exercise of its discretion,
determine which lines of business the Company and its subsidiaries conduct as of
your termination date and which third parties may reasonably be deemed to be in
competition with the Company and its subsidiaries.  Within 10 days
following your termination of employment, the Compensation Committee will
provide you with a listing of the Company’s lines of business and the third
parties that it deems to be in competition with the Company and its
subsidiaries.  For purposes of this Section 13(a), your interest
as a shareholder is insubstantial if it represents beneficial ownership of less
than five (5%) percent of the outstanding stock, and your interest as an owner,
investor, or partner is insubstantial if it represents ownership, as determined
by the Committee in its discretion, of less than five (5%) percent of the
outstanding equity of the entity.

     

    (b)    NON-SOLICITATION.  During
the Restricted Period, you, acting alone or with others, directly or indirectly,
shall not, directly or indirectly (A) induce any customer or supplier of
the Company or a subsidiary or affiliate, or other company with which the
Company or a subsidiary or affiliate has a business relationship, to curtail,
cancel, not renew, or not continue his or her or its business with the Company
or any subsidiary or affiliate; or (B) induce, or attempt to influence, any
employee of, or service provider to, the Company or a subsidiary or affiliate to
terminate such employment or service.  Anything to the contrary
notwithstanding, the Company agrees that (i) your responding to an unsolicited
request from any former employee of the Company for advice on employment
matters, and (ii) your responding to an unsolicited request for an employment
reference regarding any former employee of the Company from such former
employee, or from a third party, by providing a reference setting forth your
personal views about such former employee, shall not be deemed a violation of
this Covenant.

     

    (c)    CONFIDENTIALITY.  You
shall not disclose, use, sell, or otherwise transfer any confidential or
proprietary information of the Company or any subsidiary or affiliate, known to
you to be confidential or proprietary belonging to the Company, including but
not limited to information regarding the Company’s current and potential
customers, organization, employees, finances, and methods of operation and
investments, to any person or entity other than the Company without the express
written authorization of the Company, so long as such information has not
otherwise been disclosed to the public or is not otherwise in the public domain,
except as required by law or pursuant to legal process, including any legal
process to enforce the terms of this Agreement.

     

    (d)    COOPERATION.  You
shall provide reasonable cooperation with the Company or any subsidiary or
affiliate by making yourself available (on adequate notice and consistent with
your reasonable commitments) to testify at the request of the Company or such

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Douglas D. Tough

      September 8, 2009

      Page 7

       

       

    

    subsidiary
or affiliate in any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, and otherwise to assist the Company or any
subsidiary or affiliate in any such action, suit, or proceeding by providing
information and meeting and consulting with members of management of, other
representatives of, or counsel to, the Company or such subsidiary or affiliate,
as reasonably requested in relation to a matter of which you had knowledge or
for which you were responsible before your termination of
employment.  The Company shall promptly advance to you or reimburse
you for any out-of-pocket expenses which you incur in connection with such
cooperation including without limitation reasonable fees and disbursements of
separate counsel for you if you reasonably determine that the matter is of a
nature which indicates that you should have separate representation; provided
that if such cooperation requires your time commitment of more than 3 days (8
hours per day) within a 30 days rolling period, the Company will pay you a per
diem amount equal to the daily amount of your annual base
salary.

     

    (e)    NON-DISPARAGEMENT.  You
agree that at no time will you in any way denigrate, demean or otherwise say or
do anything, whether in oral discussions or in writing, that would cause any
third party, including but not limited to suppliers, customers and competitors
of the Company, to lower its perception about the integrity, public or private
image, professional competence, or quality of products or service of the
Company, of any officer, director, employee or other representative of the
Company.  The Company agrees that at no time will it or any officer or
director of the Company in any way denigrate, demean or otherwise say or do
anything, whether in oral discussions or in writing, that would cause any third
party to lower its perception about the integrity, public or private image or
professional competence of you.  Notwithstanding the foregoing,
nothing contained herein shall prevent any person from (i) responding publicly
to incorrect, disparaging or derogatory public statements to the extent
reasonably necessary to correct or refute such public statements or (ii) making
any truthful statement to the extent necessary to enforce the employment
agreement or required by law or by any court, arbitrator or administrative or
legislative body (including any committee thereof) with apparent jurisdiction to
order such person to disclose or make accessible such
information.

     

    (f)    EFFECT OF YOUR
FAILURE TO COMPLY WITH OBLIGATIONS.  The Company shall have no
obligations to make payments or provide benefits to you under this Agreement if
your employment terminates before a Change in Control and if you have failed or
fail to comply with the material obligations set forth in Sections 13(a)
through 13(e) during the relevant time periods set forth therein, other than
inadvertent and inconsequential events constituting
non-compliance.

     

    (g)    CLAWBACK
PROVISION.  If your employment terminates before a Change in
Control, and if you have failed to comply with the material obligations under
Sections 14(a), 14(b), 14(c) or 14(d) (other than an inadvertent and
inconsequential event constituting non-compliance) during your employment with
the Company or the applicable Restricted Period following your date of
termination, all of the following forfeitures will result:

     

    (i) The
unexercised portion of any option or SAR, whether or not vested, and any other
award not then vested will be immediately forfeited and
canceled.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Douglas D. Tough

      September 8, 2009

      Page 8

       

       

    

    (ii) You will
be obligated to repay to the Company, in cash, within ten (10) business days
after demand is made therefor by the Company,

     

    (A) the total
amount of any cash payments made to you under Section 10(c) or under the
Executive Separation Policy other than Accrued Amounts;

     

    (B) other
cash amounts paid to you under any AIP and LTI awards since the date two years
prior to your date of termination; and

     

    (C) the Award
Gain (as defined below) realized by you upon each exercise of an option or SAR
or settlement of a restricted stock unit award (regardless of any elective
deferral) since the date two years prior to your termination
date.  For purposes of this Section 14, the term “Award Gain”
shall mean (1), in respect of a given option exercise, the product of (X) the
fair market value per share of stock at the date of such exercise (without
regard to any subsequent change in the market price of shares) minus the
exercise price times (Y) the number of shares as to which the option was
exercised at that date, and (2), in respect of any other settlement of an award
granted to you, the fair market value of the cash or stock paid or payable to
you (regardless of any elective deferral) less any cash or the fair market value
of any stock or property (excluding any payment of tax withholding) paid by you
to the Company as a condition of or in connection with such
settlement.

     

    (h)    EQUITABLE RELIEF AND
OTHER REMEDIES.  You acknowledge and agree that the Company’s
remedies at law for a breach or threatened breach of any of the provisions of
this Section would be inadequate and, in recognition of this fact, the
parties agree that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the other party, without posting any bond,
shall be entitled to obtain equitable relief in the form of specific
performance, temporary restraining order, a temporary or permanent injunction or
any other equitable remedy which may then be available.

     

    (i)    REFORMATION.  If
it is determined by a court of competent jurisdiction in any state that any
restriction in this Section 14 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of that state, it is the intention
of the parties that such restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of that
state.

     

    (j)    SURVIVAL OF
PROVISIONS.  The obligations contained in this Section 14
shall survive the termination or expiration of your employment with the Company
and shall be fully enforceable thereafter.

     

    15.      
INDEMNIFICATION;
LIABILITY INSURANCE:  The Company agrees to indemnify you and
hold you harmless to the fullest extent permitted by applicable law and under
the by-laws of the Company against and in respect to any and all actions, suits,
proceedings, 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Douglas D. Tough

      September 8, 2009

      Page 9

       

      claims,
demands, judgments, costs, expenses (including reasonable attorneys’ fees),
losses, liabilities and damages resulting from your good faith performance of
your services, duties and obligations as an officer, director or employee with
the Company or with any subsidiary or affiliate of the Company or other entity
at the request of the Company, and to advance to you or your heirs or
representatives such reasonable expenses upon written request and execution of
appropriate representations and undertakings relating to the obligation to repay
such advances.  The Company shall cover you under directors and
officers liability insurance both during and, while potential liability exists,
after the term of this Agreement in the same amount and to the same extent as
the Company covers its other officers and directors.

    

     

    16.      
GOVERNING
LAW:  The validity, construction and enforceability of this
letter agreement shall be governed in all respects by the laws of the State of
New York, without regard to its conflicts of laws rules.

     

    17.      
RESOLUTION
OF DISPUTES:  Except as provided in Section 14, any disputes
under or in connection with this letter agreement shall be resolved by
arbitration, to be held in New York, New York in accordance with the rules
and procedures of the American Arbitration Association then in
effect.  Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction.  The Company shall pay for
the cost of the arbitrator.  Otherwise, each party shall bear its own
costs, including but not limited to attorneys’ fees, of the arbitration or of
any litigation arising out of this letter agreement; provided that the Company
shall pay your reasonable attorneys fees if you prevail on a material issue in
dispute in the arbitration.  Pending the resolution of any arbitration
or litigation, the Company shall continue payment of all amounts due you under
this letter agreement and all benefits to which you are entitled at the time the
dispute arises.

     

    18.      
CONTROLLING
DOCUMENT: If
there is a conflict between any provision of this letter agreement and any
provision of any other agreement, policy, plan or other document, the provision
of this letter agreement will control.

     

    19.      
CODE
SECTION 409A:

     

    (a) This
letter agreement is intended to comply with Code Section 409A and the final
regulations and interpretative guidance thereunder, including the exceptions for
short-term deferrals, separation pay arrangements, reimbursements, and in-kind
distributions, and shall be administered accordingly.  This letter
agreement shall be construed and interpreted with such intent.  If any
provision of this Agreement needs to be revised to satisfy the requirements of
Code Section 409A, then such provision shall be modified or restricted to the
extent and in the manner necessary to be in compliance with such requirements of
the Code and any such modification will attempt to maintain the same economic
results as were intended under this letter agreement.  Each payment
under this letter agreement is intended to be treated as one of a series of
separate payment for purposes of Code Section 409A and Treas. Reg.
§1.409A-2(b)(2)(iii) (or any similar or successor provisions).  Any
reimbursement or similar payment required to be paid to you hereunder shall be
paid by the Company no later than the latest date on

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Douglas D. Tough

      September 8, 2009

      Page 10

    

     

    which
such payment may be made under Code Section 409A and applicable regulations
without causing such payment to be deemed deferred compensation subject to Code
Section 409A.

     

    (b) Notwithstanding
any provision to the contrary, to the extent that you are considered a
“specified employee” (as defined in Code Section 409A and Treas. Reg.
§1.409A-1(c)(i) or any similar or successor provision) and would be entitled to
a payment during the six month period beginning on your date of separation from
service that is not otherwise excluded under Code Section 409A under the
exception for short-term deferrals, separation pay arrangements, reimbursements,
in-kind distributions, or any otherwise applicable exemption, the payment will
not be made to you until the earlier of the six month anniversary of your date
of separation from service or your death and will be accumulated and paid on the
first day of the seventh month following the date of
termination.

     

    20.      
ATTORNEYS
FEES:  You will be reimbursed for up to $20,000 of reasonable
attorneys fees incurred by you to negotiate and document your employment
arrangements with the Company.

     

    21.      
COUNTERPARTS:  This
letter agreement may be executed in two counterparts, each of which shall be
deemed to be an original and which together shall constitute one and the same
instrument.  Signatures delivered by facsimile (including scanned
signatures delivered by e-mail) shall be considered for all purposes under this
letter agreement to be original signatures.

     

    22.      
OFFER
PERIOD:  This offer will remain open for your acceptance until
5:00 pm New York time on Thursday, September 10, 2009.  Please
scan and send the executed letter agreement to my personal e-mail
address.

     

     

     

    [signature
page follows]

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Douglas D. Tough

      September 8, 2009

      Page 11

    

    

 

    On behalf
of the Board, I am excited to offer you employment with the Company and look
forward to continuing our mutually rewarding relationship.

     

    
      
        
           

        

      

    

    
      
        	 
      	
                Very
      truly yours,

                 

                 

                /s/
      Arthur C.
      Martinez                                       

                Arthur
      C. Martinez

                Member
      of the International Flavors

                &
      Fragrances Inc. Board of Directors

                and
      Lead Director

                 

              
	
                Agreed
      and Accepted

                 

                 

                /s/ Douglas D. Tough                    

                Douglas
      D. Tough

                 

                Dated:
      September 8, 2009

              	 
      

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ATTACHMENT
A

     

    DEFINITIONS

     

    “Cause” shall
mean

     

    (i) your
being indicted for or convicted of (or pleading guilty or nolo
contendere to) a felony or any crime involving moral turpitude,
dishonesty, fraud, theft or financial impropriety;

     

    (ii) your
willful and continued failure to perform substantially your duties with the
Company (other than any such failure resulting from your incapacity due to
physical or mental illness) after a written demand for substantial performance
is delivered to you by the Board which specifically identifies the manner in
which you have not substantially performed your duties, and which provides you
with a 20 day cure period;

     

    (iii) your
willful engagement in conduct which is not authorized by the Board or within the
normal course of your business decisions and is known by you to be materially
detrimental to the best interests of the Company or any of its subsidiaries,
including any misconduct that results in material noncompliance with any
financial reporting requirement under the Federal securities laws if such
noncompliance results in an accounting restatement (as these terms are used in
Section 304 of the Sarbanes-Oxley Act of 2002); or

     

    (iv) your
willful engagement in illegal conduct or any act of serious dishonesty which
adversely affects, or in the reasonable estimation of the Board, could in the
future adversely affect, your value, reliability or performance to the Company
in a material manner.  Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based upon
the advice of counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by you in good faith and in the best interests of the
Company.

     

    Notwithstanding
the foregoing, you shall not be deemed to have been terminated for Cause unless
and until there have been delivered to you a copy of the resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board of Directors after reasonable notice to you and an opportunity for
you, together with your counsel, to be heard before finding that, in the good
faith opinion of the Board, you were guilty of the conduct set forth above in
(i), (ii), (iii) or (iv) of this definition and specifying the particulars
thereof in detail.

     

    “Change in
Control” shall have the meaning defined under the Company’s Executive
Separation Policy, as amended.

     

    “Disability”
shall (i) have the meaning defined under the Company’s then-current
long-term disability insurance plan, policy, program or contract as entitles you
to payment of disability benefits thereunder, or (ii) if there shall be no
such plan, policy, program or contract, mean permanent and total disability as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended.

     

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

     

    “Good Reason”
shall mean your resignation from employment within 180 days after the
occurrence, without your express written consent, of one of the events
enumerated in (a) through (e) below; provided, however, that you must provide
written notice to the Company within 90 days after the occurrence of the event
allegedly constituting Good Reason, and the Company shall have 30 days after
such notice is given to cure:

     

    (a) an
adverse change in your status or positions as Chief Executive Officer and
Chairman of the Company (including as a result of a material diminution in your
duties or responsibilities), or any removal of you from or any failure to
reappoint or reelect you to such positions (except in connection with the
termination of your employment for Cause or Disability, as a result of your
death or by you other than for Good Reason);

     

    (b) any
reduction in your Base Salary or Target AIP Bonus;

     

    (c) you being
required to relocate to a principal place of employment outside of the New York
City metropolitan area;

     

    (d) the
failure by the Company to elect or to reelect you as a director or the removal
of you from such position; or

     

    (e) the
failure of the Company to obtain an agreement from any successor to all or
substantially all of the assets or business of the Company to assume and agree
to perform this Agreement within fifteen (15) days after a merger,
consolidation, sale or similar transaction.

     

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

    ATTACHMENT
B

     

    RELEASE

     

    In
consideration for the severance benefits described in Section 11 of the
letter agreement to which this Release is an Attachment, I hereby irrevocably
and unconditionally release, acquit and forever discharge the Company, its
successors, assigns, agents, directors, officers, executives, representatives,
subsidiaries, divisions, parent corporations and affiliates, and all other
persons acting by, through or in concert with any of them
(collectively,  the “Releasees”) from
any and all charges, complaints, claims, liabilities, obligations, promises,
agreements, actions, damages, expenses (including attorneys’ fees and costs
actually incurred), or any rights of any and every kind or nature, accrued or
unaccrued, known or unknown, which I have or claim to have arising out of facts
and circumstances which have occurred or existed prior to, or which are
occurring and do exist as of, the date of my execution of this Agreement against
each or any of the Releasees relating to or arising out of my employment and the
cessation of my employment with the Company.  This release (the
“Release”) pertains to but is in no way limited to all claims for severance
benefits or other payments which are not express obligations of the Company
under this Agreement, or otherwise.  The Release further pertains to,
but is in no way limited to, rights and claims under the Age Discrimination in
Employment Act of 1967, Title VII of the Civil Rights Act, as amended, the
Americans With Disabilities Act, the Family Medical Leave Act, and all other
state, local or municipal fair employment and discrimination laws, and all
claims under common law, whether based in tort or contract, law or
equity.

     

    Notwithstanding
anything herein to the contrary, this Release does not apply to:  (i)
claims that arise after my termination date; (ii) my rights under any
tax-qualified pension or claims for accrued vested benefits under any other
employee benefit plan, award, policy or arrangements maintained by the Company
or under COBRA; (iii) worker’s compensation claims and any other claims that
cannot be waived by law; (iv) my rights to enforce the letter employment
agreement or this Release; or (v) my eligibility for indemnification in
accordance with applicable laws or the certificate of incorporation or by-laws
of the Company, or any applicable insurance policy, with respect to any
liability I may incur or have incurred as an employee, officer or director of
the Company; (vi) any right I may have to obtain contribution as permitted by
law in the event of entry of judgment against me as a result of any act or
failure to act for which I and the Company are jointly liable or (vii) my rights
as a stockholder.

     

    This
Release is not intended to and does not interfere with the Equal Employment
Opportunity Commission’s right to enforce anti-discrimination laws or to seek
relief that will benefit the public and any victim of unlawful employment
practices who have not waived their claims.  Therefore, by signing
this Release, I waive any right to personally recover against the Company, but I
am not prevented from filing a charge with, or testifying, assisting, or
participating in any proceeding brought by the EEOC, concerning an alleged
discriminatory practice of the Company.

     

    I hereby
represent that I have been given a period of twenty-one (21) days to review and
consider this Release before signing it.  I further understand that I
may use more or as much of this twenty-one (21)-day period as I wish prior to
signing.

     

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    I
acknowledge that I have consulted with an attorney before signing this
Release.  I acknowledge that I may revoke this Release within seven
(7) days after I sign it by delivering a written notice of revocation
to:  [General Counsel], IFF Inc., 521 West 57th Street, New York, New
York 10019.  I acknowledge that, for such revocation to be effective,
[General Counsel] must receive written notice not later than the close of
business on the seventh day after the day on which I execute this
Release.  If I revoke this Release, it shall not be effective and
shall be null and void.

     

    IN
WITNESS WHEREOF, I have executed this Release this ____ day of  ________,
20 .

     

    
      	 
      	
                                              

              Douglas
      D. Tough

            

    

     

     

    
      
        
        

      

      
        B-2

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