Document:

EXHIBIT 10.85

 

 

AMENDED AND RESTATED

RECEIVABLES PURCHASE AGREEMENT

 

dated as of September 28, 2006

 

among

 

CHEMTURA CORPORATION

as Initial Collection Agent,

 

CHEMTURA CORPORATION,

CHEMTURA USA CORPORATION

GREAT LAKES CHEMICAL CORPORATION

and

BIO-LAB, INC.

as Sellers

 

and

 

 

CROMPTON & KNOWLES RECEIVABLES
CORPORATION

as Buyer

 

 

TABLE OF CONTENTS

 

	
   

  	
  ARTICLE I

  	
   

  
	
   

  	
  PURCHASE AND SALE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Purchase and
  Sale

  	
  1

  
	
  Section 1.2

  	
  Timing of
  Purchases

  	
  2

  
	
  Section 1.3

  	
  Consideration
  for Purchases

  	
  3

  
	
  Section 1.4

  	
  No Recourse

  	
  3

  
	
  Section 1.5

  	
  No
  Assumption of Obligations Relating to Receivables, Related Assets or
  Contracts

  	
  3

  
	
  Section 1.6

  	
  True Sales

  	
  3

  
	
  Section 1.7

  	
  Contribution
  of Receivables

  	
  4

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE II

  	
   

  
	
   

  	
  CALCULATION OF PURCHASE PRICE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Calculation
  of Purchase Price

  	
  4

  
	
  Section 2.2

  	
  Definitions
  and Calculations Related to Purchase Price Percentage

  	
  5

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE III

  	
   

  
	
   

  	
  PAYMENT OF PURCHASE PRICE; SERVICING, ETC.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Purchase
  Price Payments

  	
  6

  
	
  Section 3.2

  	
  The Buyer
  Notes

  	
  8

  
	
  Section 3.3

  	
  Application
  of Collections and Other Funds

  	
  8

  
	
  Section 3.4

  	
  Servicing of
  Receivables and Related Assets

  	
  9

  
	
  Section 3.5

  	
  Adjustments
  for Noncomplying Receivables

  	
  9

  
	
  Section 3.6

  	
  Payments and
  Computations Etc

  	
  9

  
	
  Section 3.7

  	
  Letters of
  Credit; Extensions of Letters of Credit

  	
  10

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IV

  	
   

  
	
   

  	
  CONDITIONS TO PURCHASES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Certification
  as to Representations and Warranties

  	
  10

  
	
  Section 4.2

  	
  Effect of
  Payment of Purchase Price

  	
  11

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE V

  	
   

  
	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Representations
  and Warranties of the Sellers

  	
  11

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VI

  	
   

  
	
   

  	
  GENERAL COVENANTS OF THE SELLERS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Affirmative
  Covenants

  	
  15

  
	
  Section 6.2

  	
  Reporting
  Responsibilities

  	
  17

  
	
  Section 6.3

  	
  Negative
  Covenants

  	
  19

  

 

i

 

	
   

  	
  ARTICLE VII

  	
   

  
	
   

  	
  ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE SPECIFIED ASSETS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Rights of
  Buyer

  	
  21

  
	
  Section 7.2

  	
  Responsibilities
  of the Sellers

  	
  22

  
	
  Section 7.3

  	
  Further
  Action Evidencing Purchases

  	
  22

  
	
  Section 7.4

  	
  Collection
  of Receivables, Rights of Buyer and Its Assignees

  	
  23

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VIII

  	
   

  
	
   

  	
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Termination
  by the Sellers

  	
  23

  
	
  Section 8.2

  	
  Automatic
  Termination

  	
  24

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IX

  	
   

  
	
   

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Indemnities
  by the Seller

  	
  24

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE X

  	
   

  
	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Amendments; Waivers, Etc

  	
  25

  
	
  Section 10.2

  	
  Notices, Etc

  	
  26

  
	
  Section 10.3

  	
  Cumulative
  Remedies

  	
  26

  
	
  Section 10.4

  	
  Binding
  Effect; Assignability; Survival of Provisions

  	
  26

  
	
  Section 10.5

  	
  Governing
  Law

  	
  27

  
	
  Section 10.6

  	
  Costs,
  Expenses and Taxes

  	
  27

  
	
  Section 10.7

  	
  Submission
  to Jurisdiction

  	
  27

  
	
  Section 10.8

  	
  Waiver of
  Jury Trial

  	
  27

  
	
  Section 10.9

  	
  Integration

  	
  28

  
	
  Section 10.10

  	
  Counterparts

  	
  28

  
	
  Section 10.11

  	
  Acknowledgment
  and Consent

  	
  28

  
	
  Section 10.12

  	
  No Partnership
  or Joint Venture

  	
  29

  
	
  Section 10.13

  	
  No
  Proceedings

  	
  29

  
	
  Section 10.14

  	
  Severability
  of Provisions

  	
  29

  
	
  Section 10.15

  	
  Recourse to
  Buyer

  	
  29

  
	
  Section 10.16

  	
  Authorization
  to File Financing Statements

  	
  29

  
	
  Section 10.17

  	
  Effect on
  Original Agreement

  	
  29

  
	
   

  	
   

  	
   

  
	
   

  	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of Buyer Note

  	
   

  
	
  EXHIBIT B

  	
  Form of Seller Assignment Certificate

  	
   

  
	
  EXHIBIT C

  	
  Form of Letter of Credit Request

  	
   

  

 

ii

 

	
   

  	
  SCHEDULES

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
  Litigation and Other Proceedings (Section 5.1(f))

  	
   

  
	
  SCHEDULE 2

  	
  Credit and Collection Policy
  (Section 5.1(4))

  	
   

  
	
  SCHEDULE 3

  	
  Offices of the Sellers where Records are
  Maintained (Section 5.1(n)) 

  	
   

  
	
  SCHEDULE 4

  	
  Legal Names, Trade Names and Names Under
  Which the Sellers Do Business (Section 5.1(q))

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APPENDICES

  	
   

  
	
   

  	
   

  	
   

  
	
  APPENDIX A

  	
  Definitions

  	
   

  

 

iii

 

This
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of September 28,
2006 (this “Agreement” is made among CHEMTURA
CORPORATION, a Delaware corporation (“Chemtura”), as
the Initial Collection Agent, Chemtura, Chemtura USA Corporation (the “Parent”), Bio-Lab, Inc. and Great Lakes Chemical
Corporation, as sellers (each a “Seller” and
collectively, the “Sellers”, and
CROMPTON & KNOWLES RECEIVABLES CORPORATION, a Delaware corporation (“Buyer”). Except as otherwise defined herein, capitalized
terms used in this Agreement have the meanings assigned to them in Appendix A. This Agreement shall be interpreted in
accordance with the conventions set forth in Part B
of such Appendix A.

 

WHEREAS, pursuant
to the Receivables Sale Agreement, Buyer intends to transfer its interests in
the Receivables sold pursuant hereto, together with Receivables contributed to
Buyer from time to time, to Amsterdam Funding Corporation, Variable Funding
Capital Company, LLC, Atlantic Asset Securitization LLC and the Related Bank
Purchasers in order to, among other things, finance its purchases hereunder;

 

NOW,
THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:

 

ARTICLE I

PURCHASE AND SALE

 

SECTION 1.1                 Purchase and Sale.

 

(a)           Pursuant to the terms
of the Original Agreement, each Seller previously sold, transferred, assigned
and otherwise conveyed to the Buyer, prior to the Effective Date, and Buyer
purchased from each Seller, all of such Seller’s Right, title and interest in,
to and under:

 

(i)            all Receivables of
such Seller (other than Contributed Receivables) that existed and were owing to
such Seller as at the closing of such Seller’s business on the Initial Cut-Off
Date,

 

(ii)           all Receivables created
by such Seller (other than Contributed Receivables) that arise during the
period from and including the closing of such Seller’s business on the
Initial  Cut-Off Date to but excluding
the Purchase Termination Date,

 

(iii)          all Related Security
with respect to all Receivables (other than Contributed Receivables) of such
Seller

 

(iv)          all Collections and
other proceeds of the foregoing, including all funds received by any Person in
payment of any amounts owed (including invoice prices, finance charges,
interest and all other charges, if any) in respect of any Receivable described
above (other than a Contributed Receivable) or Related Security with respect to
any such Receivable, or otherwise applied to repay or discharge any such
Receivable (including insurance payments that a Seller or Initial Collection
Agent applies in the ordinary course of its business to amounts owed in respect
of any such Receivable and net proceeds of any sale or other disposition of
repossessed goods that were the subject of 

 

1

 

any such Receivable) or other collateral or
property of any Obligor or any other Person directly or indirectly liable for
payment of such Receivables, and

 

(v)           all Records relating to
any of the foregoing.

 

All such sales, transfers, assignments and
conveyances are hereby ratified and confirmed.

 

(b)           Each Seller hereby
sells, transfer, assigns, sets over and otherwise conveys to Buyer and Buyer
hereby purchases from each Seller, at the times set forth in Section 1.2
occurring subsequent to the Effective Date, all of such Seller’s right, title
and interest in, to and under:

 

(i)            all Receivables of
such Seller (other than Contributed Receivables) that existed and were owing to
such Seller as at the closing of such Seller’s business on the Initial Cut-Off
Date,

 

(ii)           all Receivables created
by such Seller (other than Contributed Receivables) that arise during the
period from and including the closing of such Seller’s business on the
Initial  Cut-Off Date to but excluding
the Purchase Termination Date,

 

(iii)          all Related Security
with respect to all Receivables (other than Contributed Receivables) of such
Seller,

 

(iv)          all Collections and
other proceeds of the foregoing, including all funds received by any Person in
payment of any amounts owed (including invoice prices, finance charges,
interest and all other charges, if any) in respect of any Receivable described
above (other than a Contributed Receivable) or Related Security with respect to
any such Receivable, or otherwise applied to repay or discharge any such
Receivable (including insurance payments that a Seller or Initial Collection
Agent applies in the ordinary course of its business to amounts owed in respect
of any such Receivable and net proceeds of any sale or other disposition of
repossessed goods that were the subject of any such Receivable) or other
collateral or property of any Obligor or any other Person directly or
indirectly liable for payment of such Receivables, and

 

(v)           all Records relating to
any of the foregoing.

 

As used herein, (i) “Purchased Receivables”
means the items listed above in clauses (a) and (b) (ii) “Related Purchased Assets” means the items listed above in
clauses (c), (d), (e), and (f), (iii) “Related Assets”
means the Related Purchased Assets and the Related Contributed Assets, (iv) “Purchased Assets” means the Purchased Receivables and the
Related Purchased Assets, and (v) “Specified Assets”
means the Purchased Receivables, the Contributed Receivables and the Related
Assets.

 

SECTION 1.2                 Timing of Purchases.  Except to the extent otherwise provided in Section 8.2,
on or after the Effective Date until the closing of such Seller’s business on
the Business Day immediately preceding the Purchase Termination Date, each and
every Receivable and the Related Assets of each Seller shall be sold
automatically to Buyer pursuant hereto immediately (and without further action
by any Person) upon the creation of such Receivable; 

 

2

 

provided however, that no such
Purchase shall occur on any Business Day occurring on or after the Effective
Date if, after giving effect to such Purchase and the Purchase Price to be paid
in connection with such Purchase, the Net Worth of the Buyer, calculated after
giving effect to any contribution to capital to be made by the Parent to the
Buyer on such Business Day, would be less than the Required Capital Amount.

 

SECTION 1.3                 Consideration for Purchases.  On the terms and subject to the conditions
set forth in this Agreement, Buyer agrees to make Purchase Price payments to
the Sellers in accordance with Article III.

 

SECTION 1.4                 No Recourse.  Except as specifically provided in this
Agreement, the sale and purchase of Purchased Assets, and the transfer and
assignment of the Contributed Assets, under this Agreement shall be without
recourse to the Sellers; it being understood
that each Seller shall be liable to Buyer for all representations, warranties,
covenants and indemnities made by such Seller pursuant to the terms of this
Agreement, all of which obligations are limited so as not to constitute
recourse to such Seller for the credit risk of the Obligors.

 

SECTION 1.5                 No Assumption of Obligations Relating to Receivables,
Related Assets or Contracts. 
None of Buyer, the Initial Collection Agent nor the Agent shall have any
obligation or liability to any Obligor or other customer or client of a Seller
(including any obligation to perform any of the obligations of such Seller
under any Receivable, related contracts or any other related purchase orders or
other agreements). No such obligation or liability is intended to be assumed by
Buyer. the Initial Collection Agent or the Agent hereunder, and any assumption
is expressly disclaimed.

 

SECTION 1.6                 True Sales.  The Sellers and Buyer intend the transfers of
Purchased Assets and Contributed Assets hereunder to be true sales or contributions
to capital, respectively, by the Sellers to Buyer that are absolute and
irrevocable and that provide Buyer with the full benefits of ownership of the
Receivables, and none of the Sellers nor Buyer intends the transactions
contemplated hereunder to be, or for any purpose to be characterized as, loans
from Buyer to any Seller.

 

It is further,
not the intention of Buyer or any Seller that the conveyance of the Specified
Assets by such Seller be deemed a grant of a security interest in the Specified
Assets by such Seller to Buyer to secure a debt or other obligation of such
Seller. However, in the event that, notwithstanding the intent of the parties,
any Specified Assets are property of any Seller’s estate, then (i) this
Agreement also shall be deemed to be and hereby is a security agreement within
the meaning of the UCC, and (ii) the conveyance by such Seller provided
for in this Agreement shall be deemed to be a grant by such Seller to Buyer of,
and such Seller hereby grants to Buyer, a security interest in and to all of
such Seller’s right, title and interest in, to and under the Specified Assets,
whether now or hereafter existing or created, to secure (1) the rights of
Buyer hereunder, (2) a loan by Buyer to such Seller in the amount of the
related Purchase Price of the Purchased Assets sold by it, or the Unpaid
Balance of any Contributed Receivables and the related Contributed Assets, as
the case may be and (3) without limiting the foregoing, the payment and
performance of such Seller’s obligations (whether monetary or otherwise)
hereunder. Each Seller and Buyer shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the 

 

3

 

Specified Assets, such security interest would be deemed to be a
perfected security interest of first priority (subject to Permitted Adverse
Claims) in favor of Buyer or under applicable law and will be maintained as
such throughout the term of this Agreement.

 

SECTION 1.7                 Contribution of Receivables.  (a)  The Parent may, in its sole
discretion, from time to time, transfer to Buyer, as a contribution to the
capital of Buyer, all its right, title and interest in, to and under:

 

(i)            such Receivables of
the Parent that the Parent may from time to time designate in a Periodic Report
as part of a contribution to the capital of Buyer (collectively, the “Contributed Receivables”),

 

(ii)           all Related Security
with respect to the Contributed Receivables,

 

(iii)          all Collections and
other proceeds of the foregoing. including all funds received by any Person in
payment of any amounts owed (including invoice prices, finance charges,
interest and all other charges, if any other than sales tax) in respect of any
Contributed Receivable, or Related Security with respect to any such
Contributed Receivable, or otherwise applied to repay or discharge any such
Contributed Receivable (including insurance payments that the Parent or the
Initial Collection Agent applies in the ordinary course of its business to
amounts owed in respect of any such Contributed Receivable and net proceeds of
any sale or other disposition of repossessed goods that were the subject of any
such Contributed Receivable) or other collateral or property of any Obligor or
any other party directly or indirectly liable for payment of such Contributed
Receivables, and

 

(iv)          all Records relating to
any of the foregoing (the items listed above in clauses (ii), (iii) and (iv) being
referred to herein as the “Related
Contributed Assets”).

 

The value of
the capital contribution attributable to each Contributed Receivable and its
Related Contributed Assets shall be an aggregate amount equal to the Unpaid
Balance of such Contributed Receivable as of the Cut-Off Date immediately
preceding the applicable date of contribution (or, in the case of contributions
deemed to occur pursuant to Section 3.1, equal to the portion of the
Unpaid Balance of the Receivables so contributed).

 

(b)           The Parent will be
automatically deemed to have elected, without the need for any further action,
to make a contribution to the capital of the Buyer on any Business Day that it
is transferring Receivables to the Buyer (A) for which the Parent has
requested or will require issuance of a Letter of Credit, and (B) after
giving effect to any capital contribution made pursuant to clause (A), to the
extent necessary so that after giving effect to such capital contribution, the
Buyer maintains a Net Worth at least equal to the Required Capital Amount then
in effect.

 

4

 

ARTICLE II

CALCULATION OF PURCHASE PRICE

 

SECTION 2.1                 Calculation of Purchase Price.

 

(a)           On or before the
twentieth day of each month, the Initial Collection Agent shall deliver to
Buyer and the Agent a Periodic Report with respect to Buyer’s purchases of
Receivables from the Sellers, that were made during the immediately preceding
Calendar Cycle.

 

(b)           On each day when
Receivables are purchased by Buyer from a Seller pursuant to Article I,
the “Purchase Price” to be paid to such
Seller on such day for the Purchased Receivables and Related Purchased Assets
that are to be sold by such Seller on such day shall be determined in
accordance with the following formula:

 

PP =        AUB x PPP

 

where:

 

PP =                    the
aggregate Purchase Price for the Purchased Receivables and Related Purchased
Assets to be purchased from such Seller on such day.

 

AUB =                the
Aggregate Unpaid Balance of the Purchased Receivables that are to be purchased
from such Seller on such day.  “Aggregate Unpaid Balance” shall mean the sum of the Unpaid
Balance of each Receivable to be purchased from such Seller on such day,
calculated at the time of the Receivable’s sale to Buyer.

 

PPP =                  the
Purchase Price Percentage applicable to the Receivables to be purchased from
such Seller on such day, as determined pursuant to Section 2.2.

 

SECTION 2.2                 Definitions and Calculations Related to Purchase
Price Percentage.

 

(a)           “Purchase
Price Percentage” for the Receivables to be sold by a Seller on any
day during a Distribution Period shall mean the percentage determined in
accordance with the following formula:

 

PPP =      100% - (LP + PD + DR)

 

where:

 

PPP =                  the
Purchase Price Percentage in effect during such Distribution Period.

 

LP =                    a
loss percentage of three quarters of one percent (.75%), as such amount may be
increased, on a prospective basis only, by the Buyer and each Seller from time
to time.

 

PD =                   a
profit discount equal to one quarter of one percent (.25%), as such amount may
be increased, on a prospective basis only, by the Buyer and each Seller from
time to time.

 

5

 

DR =                   a
discount percentage equal to the product of (a) 1.5, multiplied by (b) the
rate announced by ABN AMRO Bank N.V. as its “Prime Rate” plus 100 basis points
(1.00%), multiplied by (c) the average Turnover Rate then used in the
calculation of the Discount Reserve under the Receivables Sale Agreement.

 

ARTICLE III

PAYMENT OF PURCHASE PRICE; SERVICING, ETC.

 

SECTION 3.1                 Purchase Price Payments.  (a) On the Business Day following each
day on which any Receivables and Related Purchased Assets are purchased by
Buyer pursuant to Article I on the terms and subject to the conditions of
this Agreement, Buyer shall pay to the Sellers the Purchase Price (as adjusted
in accordance with this Section 3.1) for the Receivables and Related
Purchased Assets purchased on such day by Buyer from the Sellers by:  (i) making a cash payment to the Sellers
to the extent that Buyer has cash available to make the payment pursuant to Section 3.3
and (ii) if the Purchase Price to be paid for the Receivables and Related
Assets of any Seller exceeds the amount of any cash payment for the account of
such Seller pursuant to clause (i), then by increasing the principal amount
outstanding under the relevant Buyer Notes by the amount of the excess or
otherwise elects.

 

The obligation
of Buyer to pay to each Seller the Purchase Price for Receivables that has been
deferred pursuant to clause (ii) in the preceding paragraph shall be
evidenced by the Buyer Notes issued to such Seller. Each Seller agrees that,
prior to the Seller Maturity Date, Buyer shall be required to make payments in
respect of the payment obligations evidenced by the Buyer Notes only to the
extent that it has cash available under Section 3.3.

 

(b)           On the last day of each
Calendar Cycle, the “Noncomplying Receivables
Adjustment” for each Seller shall be equal to the difference
(whether the difference is positive or negative) between (i) the aggregate
Seller Noncomplying Receivables Adjustments in respect of such Seller, if any,
for the immediately preceding Calendar Cycle, as shown in the Periodic Report
for such Calendar Cycle, as such amount is determined pursuant to Section 3.5 minus (ii) the amount of the payments (if any) that
Buyer shall have received during such Calendar Cycle from such Seller on
account of any Seller Noncomplying Receivables that had been the subject of an
earlier Seller Noncomplying Receivables Adjustment. If the Noncomplying
Receivables Adjustment for any Seller is positive for any Calendar Cycle, Buyer
shall reduce the Purchase Price payable to such Seller on such day pursuant to
subsection (a) above by the amount of the Noncomplying Receivables
Adjustment. If instead the Noncomplying 
Receivables Adjustment for any Seller is negative for any Calendar
Cycle, Buyer shall increase the Purchase Price payable to such Seller pursuant
to subsection (a) above on such day by the amount of the Noncomplying
Receivables Adjustment.

 

(c)           If for any Calendar
Cycle the Seller Noncomplying Receivables Adjustments in respect of any Seller
(as determined pursuant to Section 3.5), less any amounts in clause (b)(ii) relating
to the Receivables of such Seller, exceeds the Purchase Price payable by Buyer
to such Seller pursuant to subsection (a) above on such day, or it such
day falls on or after the Purchase Termination Date, then the principal amount
of such Seller’s Buyer Note shall be reduced automatically by the amount of
such excess.

 

6

 

(d)           If,
on any day prior to the Purchase Termination Date, the principal amount of a
Seller’s Buyer Note is zero and such Seller is not a Terminating Seller, then
the amount of the excess of the Seller Noncomplying Receivables Adjustments in
respect of such Seller (as determined pursuant to Section 3.5), less any
amounts in clause (b)(ii) relating to the Receivables of such Seller on
such day over the Purchase Price payable by Buyer to such Seller on such day
pursuant to subsection (a) above (the “Purchase Price Credit”)
shall be credited against the Purchase Price payable by Buyer for subsequent
Purchases by Buyer of Receivables and Related Assets from such Seller. If any
such Purchase Price Credit has not been fully applied on or prior to the tenth
Business Day (or a mutually agreed upon earlier day) after the creation of such
Purchase Price Credit, then, on the Business Day that follows the end of the
tenth Business Day (or shorter) period, such Seller shall pay to Buyer in cash
the remaining unapplied amount of the Purchase Price Credit.

 

(e)           If,
on any day on or after the Purchase Termination Date, or, with respect to any
Seller, the date such Seller becomes a Terminating Seller, the principal amount
of any Seller’s Buyer Note has been reduced to zero, an amount equal to the
Seller Noncomplying Receivables Adjustments, if any, in respect of such Seller
(as determined pursuant to Section 3.5), less any amounts in clause (b)(ii) relating
to such Seller’s Receivables, shall be paid by such Seller to Buyer in cash on
the next succeeding Business Day.

 

(f)            If,
on any day, the amounts, if any, relating to any Seller’s Receivables pursuant
to clause (b)(ii) above exceeds the Seller Noncomplying Receivables
Adjustments, if any, in respect of such Seller (as determined pursuant to Section 3.5)
for such day, then Buyer shall either (i) pay Initial Collection Agent
(for the account of such Seller) in cash the amount of such excess, or (ii) if
Buyer does not have sufficient cash to pay such amount in full, increase the
principal amount of such Seller’s Buyer Note by the amount of such excess that
is not paid in cash to Initial Collection Agent.

 

(g)           Amounts
received by the Initial Collection Agent pursuant to this Section 3.1  shall be allocated among the Sellers in accordance with Section 3.3,
and the Seller Noncomplying Receivables Adjustments in respect of each such
Seller (as determined pursuant to Section 3.5). The Initial Collection
Agent shall maintain a bookkeeping account (the “Seller
Account”) for purposes of tracking:

 

(i)            the
Purchase Price payable to each Seller in respect of Receivables sold by it to
Buyer (including the extent to which cash and non-cash payments made by Buyer
should be allocated to each Seller),

 

(ii)           the
extent to which such Purchase Price should be reduced on account of such Seller’s
Seller Noncomplying Receivables Adjustments (including any allocation of a
Purchase Price Credit),

 

(iii)          the
extent to which payments (whether cash or non-cash) by Buyer in respect of a
negative Noncomplying Receivables Adjustment should be allocated to each
Seller, and

 

7

 

(iv)          cash
payments made to and by each Seller in respect of the items described above.

 

The Initial
Collection Agent shall maintain sufficient records with respect to the Seller
Account such that, on any day, it would be able to calculate each of the items
set forth above. Intercompany accounts among Sellers resulting from the items
described above will be settled in accordance with the intercompany cash
management system customarily employed by the Parent and its Subsidiaries.

 

SECTION 3.2                 The Buyer Notes.  (a) Buyer has delivered to each Seller a
promissory note, substantially in the form of Exhibit A, payable to the
order of such Seller (each such promissory, note, as the same may be amended,
amended and restated, supplemented, endorsed or otherwise modified from time to
time, together with any promissory note issued from time to time in
substitution therefor or renewal thereof in accordance with the Transaction
Documents, being herein called a “Buyer Note”),
that is subordinated to all amounts payable by the Buyer to the Purchasers
pursuant to the Receivables Sale Agreement. 
The principal balance of each Buyer Note shall be increased in accordance
with the provisions of Section 3.1 hereof and shall be decreased in (i) the
amount of funds received by each Seller pursuant to Section 3.3 hereof and
(ii) by the Seller Noncomplying Receivables Adjustment of such Seller in
accordance with the provisions of Section 3.1 hereof.  Each Buyer Note is payable in full on the
date (the “Seller Maturity Date”)
that is one year and one day after the date on which all Investments (as
defined in the Receivables Sale Agreement) and other amounts then due and owing
by the Buyer to the Purchasers under the Transaction Documents have been paid
in full. Buyer may prepay all or part of the outstanding balance of any Buyer
Note from time to time without any premium or penalty, unless the prepayment
would result in a default in Buyer’s payment of any other amount required to be
paid by it under any Transaction Document.

 

(b)           The
Initial Collection Agent (or its designee) shall hold all Buyer Notes for the
benefit of the Sellers and shall make all appropriate recordkeeping entries
with respect to the Buyer Notes or otherwise to reflect the payments on and
adjustment of the Buyer Notes. The Initial Collection Agent’s books and records
shall constitute rebuttable presumptive evidence of the principal amount of and
accrued interest on each Buyer Note at any time. Each Seller hereby irrevocably
authorizes and directs the Initial Collection Agent to mark its Buyer Note “CANCELLED”
and return it to Buyer upon the final payment thereof.

 

SECTION 3.3                 Application of Collections and Other Funds.  If, on any day, Buyer (or, the Initial
Collection Agent, on behalf of the Buyer) receives (i) proceeds of
transfers pursuant to the Receivables Sale Agreement or (ii) Purchaser
Collections and/or Seller Collections, in each case pursuant to the Receivables
Sale Agreement, Buyer shall apply the funds as follows:

 

(a)           first, to pay its existing expenses and to set aside funds
for the payment of expenses that are then accrued (in each case to the extent
such expenses are permitted to exist under the Receivables Sale Agreement),

 

(b)           second, to pay the Purchase Price pursuant to Section 3.1
for Receivables and Related Assets purchased by Buyer from the Sellers on such
day, such payment to be 

 

8

 

made on a pro rata basis to the Seller based
on the Purchase Price then payable to each such Seller, and

 

(c)           third, to pay the following amounts:  (A) to pay amounts owed by Buyer to the
Sellers under the Buyer Notes on a pro rata basis based on the then unpaid
principal balance of the Buyer Notes, (B) to pay amounts to the Sellers
owed pursuant to Section 3.1(f) on a pro rata basis based on the then
unpaid amounts owing to all Sellers pursuant to Section 3.1(f), or (C) to
declare and pay dividends to the Parent to the extent permitted by law.

 

SECTION 3.4                 Servicing of Receivables and Related Assets.  Consistent with Buyer’s ownership of the
Receivables and the Related Assets, as between the parties to this Agreement,
Buyer shall have the sole right to service, administer and collect the
Receivables and to assign and/or delegate the right to others. Without limiting
the generality of Section 10.11, each Seller hereby acknowledges and
agrees that Buyer shall assign to the Agent on behalf of the Purchasers the rights
and interests of Buyer hereunder and agrees to cooperate fully with the Initial
Collection Agent (and any successor thereto appointed in accordance with the
Receivables Sale Agreement), the Agent, the Purchaser Agents and the Purchasers
in the exercise of such rights.

 

SECTION 3.5                 Adjustments for Noncomplying Receivables.  If at any time any of the Buyer, Initial
Collection Agent, the Agent, any of the Purchaser Agents, any of the
Purchasers, or a Seller shall determine that (i) any Receivable has been
reduced as the result of any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable, or any other claim resulting from the sale or lease of goods or the
rendering of services related to such Receivable or the furnishing or failure
to furnish any goods or services or other similar claim or defense not arising
from the financial inability of any Obligor to pay undisputed indebtedness, (ii) any
of the representations and warranties made by the related Seller in Section 5.1
with respect to any Receivable originated by such Seller was not true on the
date of the purchase thereof by Buyer or the date of contribution thereof to
Buyer, or (iii) without duplication of the amounts set forth in clause (i) and
(ii), any Notice of Difference has been delivered with respect to any
Receivable transferred by such Seller, then, in each such case, any Purchase
Price payable to such Seller shall be reduced by an amount equal to (x) in
the case of clause (i) or clause (iii), the amount of such whole or
partial reduction and (y) in the case of clause (ii), the Unpaid Balance
of each such affected Receivable (the sum of the amounts in clauses (x) and
(y) for such Seller on any day being called the “Seller Noncomplying
Receivables Adjustment” for such Seller for such day), and such Seller
Noncomplying Receivables Adjustment shall be settled in the manner provided for
in Section 3.1.

 

SECTION 3.6                 Payments and Computations Etc.  (a) All amounts to be paid by a Seller
to Buyer hereunder shall be paid in accordance with the terms hereof no later
than 1:00 p.m. New York City time, on the day when due in Dollars in
immediately available funds to an account that Buyer shall from time to time
specify in writing. Payments received by Buyer after such time shall be decried
to have been received on the next Business Day. In the event that any payment
becomes due on a day that is not a Business Day, then the payment shall be made
on the next Business Day. Each Seller shall, to the extent permitted by law,
pay to Buyer on demand, interest on all amounts not paid when due hereunder at
2% per annum above the interest rate on the applicable Buyer Note in effect on
the date the payment was due; provided,
however, that the 

 

9

 

interest rate shall not at any
time exceed the maximum rate permitted by applicable law.  All computations of interest payable
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first but excluding the last day) elapsed.

 

(b)           All
amounts to be paid by Buyer to a Seller hereunder shall be paid to Initial
Collection Agent (for the account of the applicable Seller) no later than 2:00 p.m.
New York City time, on the day when due in Dollars in immediately available
funds to an account that the Initial Collection Agent shall from time to time
specify in writing. Payments received by initial Collection Agent after such
time shall be deemed to have been received on the next Business Day. Initial
Collection Agent shall promptly remit payments received by it in immediately
available funds to such account as the applicable Seller shall from time to
time specify in writing.  In the event
that any payment becomes due on a day that is not a Business Day, then such
payment shall be made on the next Business Day.

 

SECTION 3.7                 Letters of Credit; Extensions of Letters of Credit.  From time to time prior to the Termination
Date:

 

(a)           Prior
to the Termination Date, the Parent may deliver to the Buyer on or prior to the
date on which the Parent will contribute to the capital of the Buyer to obtain
such Letter of Credit a completed Letter of Credit Request requesting the
issuance of a Letter of Credit for the benefit of the Parent pursuant to the
Receivables Sale Agreement related to a contribution to capital of Receivables
by the Parent to the Buyer.

 

(b)           Letters
of Credit may be automatically extended by their terms, whereupon the Parent
shall pay to the Buyer the applicable LC Commission (which payment may be made
in cash, by reduction of the outstanding balance of the Buyer Note owing to the
Parent, or through reduction of the Purchase Price otherwise payable to the
Parent on such date by the Buyer pursuant to this Agreement).

 

(c)           In
addition to automatic extensions described in Section 3.7(b), the Parent
may request that the Buyer arrange for the extension of a Letter of Credit with
a fixed expiration date, whereupon the Buyer shall arrange for the extension of
the expiration date of such Letter of Credit, and the Buyer shall obtain and
deliver such extension.  If the
applicable LC Issuer agrees to such extension, the Parent shall pay the Buyer
the LC Commission (which payment may be made in cash, by reduction of the
outstanding balance of the Buyer Note owing to the Parent, or through reduction
of the Purchase Price otherwise payable to the Parent on such date by the Buyer
pursuant to this Agreement).

 

ARTICLE IV

CONDITIONS TO PURCHASES

 

SECTION 4.1                 Certification as to Representations and Warranties.  Each Seller, by accepting the Purchase Price
paid for each Purchase, shall be deemed to have certified, with respect to the
Receivables and Related Assets to be sold by it on such day, that its
representations and warranties contained in Article V are true and correct
on and as of such day, with the same effect as though made on and as of such
day.

 

10

 

SECTION 4.2                 Effect of Payment of Purchase Price.  Upon the payment of the Purchase Price
(whether in cash, by an increase in a Buyer Note, or by issuance of a Letter of
Credit, in each case pursuant to Section 3.1) for any Purchase, title to
the Receivables and the Related Assets included in the Purchase shall vest in
Buyer, whether or not the conditions precedent to the Purchase were in fact
satisfied; provided, however,
that Buyer shall not be deemed to have waived any claim it may have under this
Agreement for the failure by a Seller in fact to satisfy any such condition
precedent.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

SECTION 5.1                 Representations and Warranties of the Sellers.  In order to induce Buyer to enter into this
Agreement and to make purchases hereunder, each Seller hereby makes, with
respect to itself, the representations and warranties set forth in this section
at the times and to the extent set forth in Section 4.2 (it being
understood that only the Parent makes the representations and warranties set
forth below with respect to the Contributed Receivables, if any, and Related
Assets with respect thereto).

 

(a)           Corporate
Existence and Power. The Seller is a corporation duly organized, validly
existing and in good standing, under the laws of its state of incorporation and
has all corporate power and authority and all governmental licenses,
authorizations, consents and approvals required to carry on its business in
each jurisdiction in which its business is now conducted, except where, failure
to obtain such license, authorization, consent or approval would not have a
material adverse effect on (i) its ability to perform its obligations
under, or the enforceability of, any Transaction Document, (ii) its
business or financial condition, (iii) the interests of the Purchaser
Agents or any Purchaser under any Transaction Document or (iv) the
enforceability or collectibility of any Receivable.

 

(b)           Corporate
Authorization and No Contravention. 
The execution, delivery and performance by the Seller of each
Transaction Document to which it is a party (i) are within its corporate
powers, (ii) have been duly authorized by all necessary corporate action, (iii) do
not contravene or constitute a default under (A) any applicable law, rule or
regulation, (B) its or any Subsidiary’s charter or by-laws or (C) any
agreement, order or other instrument to which it or any Subsidiary is a party
or its property is subject and (iv) will not result in any Adverse Claim
on any Receivable or Collection or give cause for the acceleration of any
indebtedness of the Seller or any Subsidiary.

 

(c)           [Reserved]

 

(d)           Valid
Sale; Reasonable Equivalent Value. 
Each sale of Receivables and Related Assets made by such Seller pursuant
to this Agreement, and each contribution of Receivables and Related Assets made
to Buyer pursuant to this Agreement, shall constitute a valid transfer and
assignment of all of such Seller’s right, title and interest in, to and under
such Receivables and the Related Assets of such Seller to Buyer that is
perfected and of first priority under the UCC and otherwise, enforceable
against creditors of, and purchasers from, such Seller and free and clear of
any Adverse Claim (other than any Permitted Adverse Claim or any Adverse Claim
arising solely as a result of any action taken by Buyer hereunder or by the
Agent or the Purchaser 

 

11

 

Agents under the Receivables
Sale Agreement); Each such sale and/or contribution has been made for “reasonably equivalent value” (as such term is used in Section 548
of the Bankruptcy Code) and not for or on account of “antecedent
debt” (as such term is used in Section 547 of the Bankruptcy
Code) owed by such Originator to the Seller.

 

(e)           Binding
Effect.  Each Transaction Document to
which the Seller is a party constitutes the legal, valid and binding obligation
of the Seller enforceable against the Seller in accordance with its terms,
except as limited by bankruptcy, insolvency, or other similar laws of general
application relating to or affecting the enforcement of creditors’ rights
generally and subject to general principles of equity.

 

(f)            Litigation
and Other Proceedings.  Except as
described in Schedule 1, there are no actions,
suits or other proceedings (including matters relating to environmental
liability) pending or, to the knowledge of Seller, threatened against or
affecting the Seller or any Subsidiary, or any of their respective properties,
that (i) if adversely determined (individually or in the aggregate), may
have a material adverse effect on the financial condition of the Seller or any
Subsidiary or on the collectibility of the Receivables or (ii) involve any
Transaction Document or any transaction contemplated thereby. None of the
Seller or any Subsidiary is in default of any contractual obligation or in
violation of any order, rule or regulation of any Governmental Authority,
which default or violation may have a material adverse effect upon (i) the
financial condition of the Seller and its Subsidiaries taken as a whole or (ii) the
collectibility of the Receivables.

 

(g)           Approvals.  All authorizations, consents, filings, orders
and approvals of, or other action by, any Governmental Authority or other
Person that are required to be obtained by such Seller, and all notices to and
with any Governmental Authority or other Person that are required to be made by
it, in the case of each of the foregoing in connection with the conveyance of
Receivables and Related Assets or the due execution, delivery and performance
by such Seller of this Agreement, such Seller’s Seller Assignment Certificate
or any other Transaction Document to which it is a party and the consummation
of the transactions contemplated by this Agreement have been obtained or made
and are in full force and effect, except where the failure to obtain or make
any such authorization, consent, order, approval, action, notice or filing,
individually or in the aggregate for all such failures, would not reasonably be
expected to have a Material Adverse Effect.

 

(h)           Bulk
Sales Act. No transaction contemplated by this Agreement or any other
Transaction Document requires compliance with, or will be subject to avoidance
under, any bulk sales act or similar law.

 

(i)            No
Material Adverse Change. Since December 31, 2004, there has been no
material adverse change in (i) the collectibility of the Receivables, or (ii) the
Seller’s financial condition or (iii) the Seller’s ability to perform its
obligations under any Transaction Document.

 

(j)            Margin
Regulations.  No use of any funds
obtained by such Seller under this Agreement will conflict with or contravene
any of` Regulations G, T, U, and X promulgated by the Federal Reserve Board
from time to time.

 

12

 

(k)           Quality
of Title.

 

(i)            Immediately
before each purchase to be made by Buyer hereunder and (in the case of the
Parent) each contribution to be made hereunder to Buyer, each Receivable and
Specified Asset of such Seller that is then to be transferred to Buyer
thereunder, and the related contracts, shall be owned by such Seller free and
clear of any Adverse Claim (other than any Permitted Adverse Claim or any
Adverse Claim arising solely as the result of any action taken by Buyer
hereunder or by the Agent or the Purchaser Agents under the Receivables Sale
Agreement); provided that the
existence of an Adverse Claim that is released on the First Issuance Date shall
not constitute a breach of this representation and warrant; and such Seller
shall have made all UCC filings and shall have taken all other action under
applicable law in each relevant jurisdiction in order to protect and perfect
the ownership interest of Buyer and its successors in the Receivables and
Related Assets against all creditors of, and purchasers from, such Seller.

 

(ii)           Whenever
Buyer makes a purchase hereunder from such Seller or (in the case of the Parent)
accepts a contribution hereunder from such Seller, it shall have acquired a
valid and perfected first priority ownership interest in each Receivable and
other Specified Asset, free and clear of any Adverse Claim (other than any
Permitted Adverse Claim or any Adverse Claim arising solely as the result of
any action taken by Buyer hereunder or by the Agent or the Purchaser Agents
under the Receivables Sale Agreement).

 

(iii)          No
effective UCC financing statement or other instrument similar in effect that covers
all or part of any Receivable originated by such Seller, any interest therein
or any other Specified Asset with respect thereto is on file in any recording
office except, (x) such as may be filed (A) in favor of such Seller
in accordance with the related contracts, (B) in favor of Buyer pursuant
to this Agreement and (C) in favor of the Agent, in accordance with the
Receivables Sale Agreement and (y) such as may have been identified to
Buyer prior to the First Issuance Date and UCC termination statements (or
appropriate releases releasing any Receivables and Related Assets described
therein) relating to which have been filed and recorded on or prior to the
First Issuance Date. No effective financing statement or instrument similar in
effect relating to perfection that covers any inventory of such Seller that
might give rise to Receivables is on file in any recording office.

 

(iv)          No
Purchase by Buyer from such Seller (and, in the case of the Parent, no capital
contribution to Buyer, whether or not made in connection with a Purchase)
constitutes a fraudulent transfer or fraudulent conveyance under the United
States Bankruptcy Code or applicable state bankruptcy or insolvency laws or is
otherwise void or voidable or subject to subordination under similar laws or
principles or for any other reason.

 

(v)           Each
Purchase by Buyer from such Seller constitutes a true and valid sale of the
Receivables and Related Assets under applicable state law and true and valid
assignments and transfers for consideration (and not merely a pledge of the
Receivables and Related Assets for security purposes), enforceable against the
creditors of such 

 

13

 

Seller, and no Receivables or Related Assets
transferred to Buyer hereunder shall constitute property of such Seller.

 

(l)            Eligible
Receivables. On the date of each Daily Report or Periodic Report that
identifies a Receivable originated by such Seller as an Eligible Receivable,
such Receivable exists and is an Eligible Receivable.

 

(m)          Accuracy
of Information.  All information
furnished by the Seller or any Affiliate thereof to the Buyer, the Agent, the
Purchaser Agents or any Purchaser in connection with any Transaction Document,
or any transaction contemplated thereby, is true and accurate in all material
respects (and is not incomplete by omitting any information necessary to
prevent such information from being materially misleading, in each case on the
date the statement was made and in light of the circumstances under which the statements
were made or the information was furnished.

 

(n)           Offices.  (i) The principal place of business and
chief executive office of such Seller is located at the address set forth under
such Seller’s signature hereto, and has been located at such address since six
months prior to the First Issuance Date and (ii) any other location in
which such Seller keeps (or has kept during the past four months) Records
related to the Receivables or Related Assets (and all original documents
relating thereto) is specified in Schedule 3 (or in the case of each of clause (i) and
clause (ii), at such other locations, notified to the Initial Collection Agent
and the Agent in accordance with Section 6.1(f), in jurisdictions where
all action required pursuant to Section 7.3 has been taken and completed).

 

(o)           Account
Banks and Payment Instructions.  The
names and addresses of all the banks, together with the account numbers of the
accounts at such banks (and all related lockboxes and post office boxes), into
which Collections are paid as of the First Issuance Date have been accurately
identified to Buyer, the Purchasers, the Purchaser Agents and the Agent. Such
Seller has instructed all Obligors to submit all payments on the Receivables
and Related Assets directly to one of the Lockboxes or Lockbox Accounts. The
Lockbox Agreements to which such Seller is a party constitute the legal, valid
and binding obligations of the parties thereto in accordance with their
respective terms subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors’ rights generally and general
equitable principles. The Seller has delivered a copy of all Lockbox Agreements
to the Agent. The Seller has not granted any interest in any Lockbox or Lockbox
Account to any Person other than the Agent and, upon delivery to any Lockbox
Bank of the related Lockbox Letter, the Agent will have exclusive ownership and
control of the Lockbox Account at such Lockbox Bank.

 

(p)           Compliance
With Applicable Laws. Such Seller is in compliance with the requirements of
all applicable laws, rules, regulations and orders of all Governmental
Authorities (federal, state, local or foreign, and including environmental
laws), a violation of any of which, individually or in the aggregate for all
such violations, would have a substantial likelihood of having a Material
Adverse Effect.

 

(q)           Legal
Names.  Except as set forth in
Schedule 4, during the five years prior to the Effective Date, (i) such
Seller has not been known by any legal name other than its corporate 

 

14

 

name as of the date hereof
(which corporate name is set forth on its signature page hereto), except
to the extent permitted otherwise pursuant to Section 6.3(e), and (ii) such
Seller has not been the subject of any merger or other corporate reorganization
that resulted in a change of name, identity or corporate structure. Such Seller
uses no trade names other than its actual corporate name, and the trade names
set forth in Schedule 4.

 

(r)            Investment
Company Act.  Neither such Seller nor
any of such Seller’s Subsidiaries is an “investment company”, or controlled by
an “investment company”, registered or required to be registered under the
Investment Company Act of 1940, as amended.

 

(s)           Taxes.  Such Seller has filed or caused to be filed
all tax returns and reports required by law to have been filed by it and has
paid all taxes, assessments and governmental charges thereby shown to be owing,
except any such taxes, assessments or charges (i) that are being
diligently contested in good faith by appropriate proceedings, (ii) for
which adequate reserves in accordance with GAAP shall have been set aside on
its books and (iii) with respect to which no Adverse Claim, except
Permitted Adverse Claims, has been imposed upon any Receivables or Related
Assets.

 

ARTICLE VI

GENERAL COVENANTS OF THE SELLERS

 

SECTION 6.1                 Affirmative Covenants.  From the First Issuance Date until the first
day following the Purchase Termination Date on which all Obligations of the
Sellers under the Transaction Documents shall have been finally and fully paid
and performed, unless the Agent (acting the direction of the Instructing Group)
(as assignee of Buyer) shall otherwise give its prior written consent, each
Seller hereby agrees that it will perform the covenants and agreements set
forth in this section.

 

(a)           Compliance
with Laws, Etc.  The Seller will
comply, and will cause each Subsidiary to comply, with all laws, regulations,
judgments and other directions or orders imposed by any Governmental Authority
to which such Person or any Receivable, or Collection may be subject.

 

(b)           Preservation
of Corporate Existence.  The Seller
will perform, and will cause each Subsidiary to perform, all actions necessary
to remain duly incorporated, validly existing and in good standing in its
jurisdiction of incorporation and to maintain all requisite authority to
conduct its business in each jurisdiction in which it conducts business.

 

(c)           Receivables
Reviews.  The Seller will furnish to
the Buyer, the Agent and the Purchasers such information concerning the
Receivables as the Agent or a Purchaser may reasonably request and as may be
generated by the then existing data processing capacity of the Seller. The
Seller will permit, at any time during regular business hours, the Agent or any
Purchaser (or any representatives thereof), once per year or at any time after
the occurrence of a Termination Event (at the expense of the Seller) or at any
other time (at the expense of the Agent or such Purchaser (as applicable)) (i) to
examine and make copies of all Records, (ii) to visit the offices and
properties of the Seller for the purpose of examining the Records and (iii) to
discuss matters relating hereto with any of the Seller’s officers, directors,
employees or independent 

 

15

 

public accountants having
knowledge of such matters. Once a year, the Agent may (at the expense of the
Seller) have an independent public accounting firm conduct an audit of the
Records or make test verifications of the Receivables and Collections.

 

(d)           Keeping
of Records and Books of Account.  The
Seller will have and maintain (A) administrative and operating procedures
including an ability to re-create Records if originals are destroyed), (B) adequate
facilities, personnel and equipment and (C) all Records and other
information necessary or advisable for collecting the Receivables (including
Records adequate to permit the immediate identification of each new Receivable
and all Collections of, and adjustments to, each existing Receivable). The
Seller will give each of the Buyer and the Agent prior notice of any material
change in such administrative and operating procedures.

 

(e)           Performance
and Compliance with Receivables and Contracts.  Such Seller will, at its expense, timely and
fully perform and comply with all provisions, covenants and other promises
required to be observed by it under the contracts of such Seller related to the
Receivables and Related Assets, in each case to the extent failure to perform
or comply, individually or in the aggregate for all such failures, would have a
substantial likelihood of having a Material Adverse Effect.

 

(f)            Location
of Records and Offices.  Such Seller
keeps (i) its principal place of business and chief executive office at
the address set forth under such Seller’s signature hereto, and (ii) the
offices where it maintains all Records related to the Receivables and the
Related Assets (and all original documents relating thereto) at the addresses
referred to in Schedule 3 (or, in the case of each of clause (i) and
clause (ii), upon not less than 30 days’ prior written notice given by such
Seller to Buyer and the Agent at such other locations in jurisdictions where
all action required by Section 7.3 shall have been taken and completed).

 

(g)           Credit
and Collection Policies.  Such Seller
will comply in all material respects with its Credit and Collection Policy in
regard to each Receivable of such Seller and the Related Assets and the contracts
related to each such Receivable.

 

(h)           Separate
Corporate Existence of Buyer.  Such
Seller hereby acknowledges that the Buyer is entering into the transactions
contemplated by the Transaction Documents in reliance upon Buyer’s identity as
a legal entity separate from such Seller. Therefore, such Seller will take all
reasonable steps to continue their respective identities as separate legal
entities and to make it apparent to third Persons that each is an entity with
assets and liabilities distinct from those of Buyer and that Buyer is not a
division of the Initial Collection Agent, such Seller, the Parent or any other
Person. Without limiting the foregoing, each Seller will operate, conduct their
respective businesses and otherwise act in a manner which is consistent with
the factual assumptions in each of the opinions of Thacher Proffitt &
Wood LLP dated September 28, 2006 regarding certain substantive
consolidation and true sale issues.

 

(i)            Payment
Instructions to Obligors.  Such
Seller will instruct all Obligors to submit all payments either (i) to one
of the Lockboxes for deposit in a Lockbox Account or (ii) directly to one
of the Lockbox Accounts.

 

16

 

(j)            Segregation of Collections.  Such Seller shall use reasonable efforts to
minimize the deposit of any funds other than Collections into any of the
Transaction Accounts and, to the extent that any such funds nevertheless are
deposited into any of the Transaction Accounts, shall promptly identify any
such funds, or shall cause the funds to be so identified, to Buyer, the Initial
Collection Agent and the Agent (following which notice, Buyer shall cause the
Initial Collection Agent to return all the funds to such Seller).

 

(k)           Identification of Eligible
Receivables.  Such Seller
will establish and maintain such procedures as are necessary for determining no
less frequently than each Business Day whether each Receivable qualifies as an
Eligible Receivable, and for identifying, on any Business Day, all Receivables
to be sold on that date that are not Eligible Receivables.

 

(l)            Accuracy of Information.  All written information furnished on and
after the First Issuance Date by or on behalf of such Seller to Buyer, the
Agent or the Purchaser Agents pursuant to or in connection with any Transaction
Document or any transaction contemplated herein or therein shall not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements made not misleading, in each case on the date
the statement was made and in light of the circumstances under which the
statements were made or the information was furnished.

 

(m)          Taxes.  Such Seller shall file or cause to be filed,
and cause each Person with whom it shares consolidated tax liability to file,
all Federal, state and local tax returns that are required to be filed by it
(except where the failure to file such returns does not have a substantial
likelihood of having a Material Adverse Effect) and pay or cause to be paid all
taxes shown to be due and payable on taxes or assessments (except only such
taxes or assessments the validity of which are being contested in good faith by
appropriate proceeding and with respect to which such Seller shall have set
aside adequate reserves on its books in accordance with GAAP and which
proceedings do not have a substantial likelihood of having a Material Adverse
Effect).

 

(n)           Software Licenses. Such Seller
shall cause all software licenses or similar agreements used by the Sellers or
Initial Collection Agent in the origination or servicing of Receivables to
expressly permit use by any Successor Initial Collection Agent of the materials
subject to such licenses or agreements.

 

(o)           Payment of Accounts Payable.  Such Seller shall pay all of its accounts
payable in accordance with its normal business.

 

SECTION 6.2                 Reporting
Responsibilities.  Until the
first day following the Purchase Termination Date on which all Obligations of
the Sellers shall have been finally and fully paid and performed under the
Transaction Documents, unless the Agent (acting at the direction of the
Instructing Group) (as assignee of Buyer) shall otherwise give its prior
written consent, each Seller hereby agrees that it will perform the covenants
and agreements set forth in this section.

 

(a)           Financial Reporting.  The Seller will, and will cause each
Subsidiary to, maintain a system of accounting, established and administered in
accordance with GAAP and will furnish (or will cause to be furnished) to the
Agent and each Purchaser:

 

17

 

(i)            Annual Financial Statements. Within 95
days after each fiscal year of (A) the Parent, copies of the Parent’s
consolidated annual audited financial statements (including a consolidated
balance sheet, consolidated statement of income and retained earnings and
statement of cash flows, with related footnotes) certified by Parent’s firm of
independent certified public accountants and prepared on a consolidated basis
in conformity with GAAP, and (B) the Seller, the annual balance sheet and
annual profit and loss statement of the Seller certified by a Authorized
Officer thereof, in each case prepared on a consolidated basis in conformity
with GAAP as of the close of such fiscal year for the year then ended;

 

(ii)           Quarterly Financial
Statements.  Within 50
days after each (except the last) fiscal quarter of each fiscal year of (A) the
Parent, copies of its unaudited financial statements (including at least a
consolidated balance sheet as of the close of such quarter and statements of
earnings and sources and applications of funds for the period from the
beginning of the fiscal year to the close of such quarter) certified by a
Authorized Officer and prepared in a manner consistent with the financial
statements described in part (A) of clause (i) of this Section 5.1(a),
and (B) the Seller, the quarterly balance sheet and a profit and loss
statement of the Seller for the period from the beginning of such fiscal year
to the close of such quarter, in each case certified by a Authorized Officer
thereof and prepared in a manner consistent with part (B) of clause (i) of
Section 5.1 (a);

 

(iii)          Officer’s Certificate. Each time
financial statements are furnished pursuant to clause (i) or (ii) of Section 6.2
(a), a compliance certificate (in substantially the form of Exhibit I to
the Receivables Sale Agreement) signed by a Authorized Officer, dated the date
of such financial statements;

 

(iv)          Public Reports.  Promptly upon becoming available, a copy of
each report or proxy statement filed by the Parent with the Securities Exchange
Commission or any securities exchange;

 

(v)           Chemtura Credit Agreement
Certificate.  When
delivered to the banks party to the Chemtura Credit Agreement, a copy of the
certificates and schedules described in Sections 5.03(b)(i) and (ii) and
5.03(c)(i) and (ii) of` the Chemtura Credit Agreement; and

 

(vi)          Other Information.  With reasonable promptness, such other
information (including non-financial information) as may be reasonably
requested by the Agent or any Purchaser (with a copy of such request to the
Agent).

 

(b)           Notices. Immediately
upon becoming aware of any of the following, the Seller will notify the Agent
and provide a description of:

 

(i)            Potential Termination Events.  The occurrence of any Potential Termination
Event;

 

(ii)           Representations and
Warranties. The failure of any representation or warranty
herein to be true (when made or at any time thereafter) in any material
respect;

 

18

 

(iii)          Downgrading.  The downgrading, withdrawal or suspension of
any rating by any rating agency of any indebtedness of the Seller;

 

(iv)          Litigation. The
institution of any litigation, arbitration proceeding or governmental
proceeding reasonably likely to be material to the Seller, any Subsidiary or
the collectibility or quality of the Receivables;

 

(v)           Judgments. The entry of
any judgment or decree against the Seller or any Subsidiary if the aggregate
amount of all judgments then outstanding against the Seller and the
Subsidiaries exceeds $5,000,000; or

 

(vi)          Changes in Business. Any change
in, or proposed change in, the character of the Seller’s business that could
impair the collectibility or quality of any Receivable.

 

SECTION 6.3                 Negative
Covenants.  Until the
first day following the Purchase Termination Date on which all Obligations of
the Sellers under the Transaction Documents shall have been finally and fully
paid and performed, unless the Agent (acting at the direction of the
Instructing Group) (as assignee of Buyer) shall otherwise give its prior
written consent, each Seller hereby agrees that it will perform the covenants
and agreements set forth in this section.

 

(a)           Sales, Liens, Etc.  Except as otherwise provided in the
Receivables Sale Agreement, such Seller will not (i)(A) sell, assign (by
operation of law or otherwise) or otherwise transfer to any Person, (B) pledge
any interest in, (C) grant, create, incur, assume or permit to exist any
Adverse Claim (other than Permitted Adverse Claims) to or in favor of any
Person upon or with respect to, or (D) cause to be filed any UCC financing
statement or equivalent document relating to perfection with respect to any
Specified Asset or any contract related to any Receivable, or upon or with
respect to any lockbox or account to which any Collections of any such
Receivable or any Related Assets are sent or any interest therein, or (ii) assign
to any Person any right to receive income from or in respect of any of the
foregoing.

 

In the event that such
Seller fails to keep any Specified Assets free and clear of any Adverse Claim
(other than a Permitted Adverse Claim, any Adverse Claims arising hereunder,
and other Adverse Claims permitted by any other Transaction Document), Buyer
may (without limiting its other rights with respect to, such Seller’s breach of
its obligations hereunder) make reasonable expenditures necessary to release
the Adverse Claim. Buyer shall be entitled to indemnification for any such
expenditures pursuant to the indemnification provisions of Article IX.
Alternatively, Buyer may deduct such expenditures as an offset to the Purchase
Price owed to such Seller hereunder.

 

Such Seller will not pledge
or grant any security interest in the Buyer Note or the capital stock of Buyer
unless prior to any pledge or grant such Seller, Buyer, the Agent and the
Person for whose benefit the pledge or grant is being made have entered into an
Intercreditor Agreement reasonably acceptable to the Instructing Group.

 

(b)           Extension or Amendment of
Receivables; Change in Credit and Collection Policy or Contracts.  Such Seller will not extend, amend, waive or
otherwise modify the terms of any Receivable or contract related thereto except
as permitted pursuant to 

 

19

 

Section 3.2(b) of the Receivables Sale Agreement and subject
to the limitation set forth in Section 1.5 of the Receivables Sale
Agreement. Such Seller shall not change the terms and provisions of the Credit
and Collection Policy in any material respect.

 

(c)           Change in Payment
Instructions to Obligors.  Such
Seller will not (i) add or terminate any bank as an Account Bank (or add
or terminate any related Lockbox or Bank Account) from those listed in the
letter referred to in Section 5.1(o) unless, prior to any such
addition or termination, Buyer and the Agent shall have received not less than
ten Business Days prior written notice of the addition or termination and, not
less than ten Business Days prior to the effective date of any such proposed
addition or termination, Buyer and the Agent shall have received (A) counterparts
of the applicable type of Account Agreement with each new Account Bank, duly
executed by such new Account Bank and all other parties thereto and (B) copies
of all other agreements and documents signed by the Account Bank and such other
parties with respect to any new Bank Account and any new Lockbox, or (ii) make
any change in its instructions to Obligors, given accordance with Section 5.1(o) regarding
payments to be made by Obligors, other than changes in the instructions that
direct Obligors to make payments to another Lockbox or Bank Account that in
each case is subject to an Account Agreement.

 

(d)           Mergers, Acquisitions,
Sales, etc.  Except for (i) mergers
or consolidations in which such Seller is the surviving Person, (ii) mergers
or consolidations of a Subsidiary of the Parent into such Seller or (iii) merger,
or consolidations in which the surviving Person expressly assumes the
performance of this Agreement, such Seller will not be a party to any merger or
consolidation. Such Seller will give the Agent notice of any such permitted
merger or consolidation promptly following completion thereof. Such Seller will
not, directly or indirectly, transfer, assign, convey or lease, whether in one
transaction or in a series of transactions, all or substantially all of its
assets or sell or assign, with or without recourse, any Receivables or Related
Assets, in each case other than pursuant to this Agreement.

 

(e)           Change in Name. Such Seller
will not (i) change its corporate name or (ii) change the name under
or by which it does business, in each case unless such Seller shall have given
Buyer, the Initial Collection Agent and the Agent 30 days’ prior written notice
thereof and unless, prior to any change in name, such Seller shall have taken
and completed all action required by Section 7.3. The Seller will at all
times maintain its jurisdiction of organization within a jurisdiction in the
United States of America (other than in the states of Florida, Maryland and
Tennessee) in which Article 9 of the UCC is in effect. If the Seller moves
its jurisdiction of organization to a location that imposes taxes, fees or
other charges to perfect the Agent’s and the Purchasers’ interests hereunder
(as assignee of Buyer), the Seller will pay all such amounts and any other
costs and expenses incurred in order to maintain the enforceability of the
Transaction Documents and the interests of the Agent and the Purchasers (as
assignee of Buyer) in the Receivables and Collections.

 

(f)            Certificate of Incorporation.  Such Seller will not cause or permit Buyer to
amend its Certificate of Incorporation without the prior written consent, which
consent 

 

20

 

will not be unreasonably withheld or delayed, of the Agent (acting at
the direction of the Instructing Group), in its capacity as assignee of the
Buyer.

 

(g)           Amendments to Transaction
Documents.  Such Seller
will not amend or otherwise modify or waive any Transaction Document to which
it is a party unless the Agent (acting at the direction of the Instructing
Group), in its capacity as assignee of the Buyer, shall have given its prior
written consent to each amendment, modification or waiver.

 

(h)           Accounting for Purchases. Such Seller
shall prepare its financial statements in accordance with GAAP, and any
financial statements which are consolidated to include Buyer will contain
footnotes stating that such Seller has sold or contributed its Receivables to
Buyer and that the assets of Buyer will not be available to the Parent and its
Subsidiaries unless Buyer’s liabilities have been paid in full. Such Seller
shall not prepare any financial statements that account for the transactions
contemplated in this Agreement in any manner other than as a sale of the
Purchased Assets by such Seller to Buyer, or in any other respect account for
or treat the transactions contemplated in this Agreement (including but not
limited to accounting and, where taxes are not consolidated, for tax reporting
purposes) in any manner other than as a sale of the Purchased Assets by such
Seller to Buyer.

 

ARTICLE VII

ADDITIONAL
RIGHTS AND OBLIGATIONS IN 

RESPECT
OF THE SPECIFIED ASSETS

 

SECTION 7.1                 Rights
of Buyer.  (a) 
Each Seller hereby authorizes Buyer, the Initial Collection Agent and/or their
respective designees to take any and all steps in such Sellers name and on
behalf of such Seller that Buyer, the Initial Collection Agent and/or their
respective designees determine are reasonably necessary or appropriate to
collect all amounts due under any and all Specified Assets, including endorsing
the name of such Seller on checks and other instruments representing
Collections and enforcing such Seller’s rights under such Specified Assets.

 

(b)           Except as set forth in Section 3.1
with respect to Seller Noncomplying Receivables, Buyer shall have no obligation
to account for any Specified Asset to any Seller. Buyer shall have no
obligation to account for, or to return Collections, or any interest or other
finance charge collected pursuant thereto, to any Seller, irrespective of
whether such Collections and charges are in excess of the Purchase Price for
the Purchased Assets.

 

(c)           Buyer shall have the
unrestricted right to further assign, transfer, deliver, hypothecate, subdivide
or otherwise deal with the Specified Assets, and all of Buyer’s right, title
and interest in, to and under this Agreement, on whatever terms Buyer shall
determine, pursuant to the Receivables Sale Agreement or otherwise.

 

(d)           Buyer shall have the sole
right to retain any gains or profits created by buying, selling or holding the
Specified Assets and shall have the sole risk of and responsibility for losses
or damages created by such buying, selling or holding.

 

21

 

SECTION 7.2                 Responsibilities
of the Sellers.  Anything
herein to the contrary notwithstanding, each Seller hereby agrees:

 

(a)           to deliver directly to the
Initial Collection Agent (for Buyers account), within two Business Days after
receipt and identification thereof, any Collections that it receives in the
form so received, and agrees that all such Collections shall be deemed to be
received in trust for Buyer and shall be maintained and segregated separate and
apart from all other funds and moneys of such Seller until delivery of such
Collections to the Initial Collection resent,

 

(b)           to perform all of its
obligations hereunder and under the contracts related to the Receivables and
Related Assets to the same extent as if the Receivables had not been sold
hereunder, and the exercise by Buyer or its designee or assignee of Buyer’s
rights hereunder or in connection herewith shall not relieve such Seller from
any of its obligations under the contracts or Related Assets related to the
Receivables,

 

(c)           that it hereby grants Buyer
an irrevocable power of attorney with full power of substitution, coupled with
an interest to take in the name of such Seller all steps necessary or advisable
to endorse, negotiate or otherwise realize on any writing or other right of any
kind held or transmitted by such Seller or transmitted or received by Buyer
(whether or not from such Seller) in connection with any Specified Asset, and

 

(d)           to the extent that such
Seller does not own the computer software that such Seller uses to account for
Receivables, such Seller shall provide Buyer, the Agent and the Purchaser
Agents with such licenses, sublicenses and/or assignments of contracts as
Buyer, the Agent or the Purchaser Agents shall require with regard to all
services and computer hardware used by such Seller that relate to the servicing
of the Specified Assets.

 

SECTION 7.3                 Further
Action Evidencing Purchases.  Each Seller agrees that from time to time, at
its expense, it will promptly, upon reasonable request by Buyer, Initial
Collection Agent, the Agent, a Purchaser Agent or a Purchaser, execute and
deliver all further instruments and documents, and take all further action, in
order to perfect, protect or more fully evidence the purchase by Buyer or
contribution to Buyer of the Receivables and the Related Assets under this
Agreement, or to enable Buyer to exercise or enforce any of its rights under
any Transaction Documents.  Each Seller
further agrees that from time to time, at its expense, it will promptly, upon
request, take all action that Buyer, the Initial Collection Agent or the Agent
may reasonably request in order to perfect, protect or more fully evidence the
purchase or contribution of the Receivables and the Related Assets or to enable
Buyer or the Agent (as the assignee of Buyer) to exercise or enforce any of its
rights hereunder or under any other Transaction Document. Without limiting the
generality of the foregoing, upon the request of Buyer, each Seller will:

 

(a)           execute and file such UCC
financing or continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices, as Buyer or the Agent may
reasonably determine to be necessary or appropriate, and

 

22

 

(b)           mark the master data
processing records evidencing the Receivables with the following legend:

 

“THE RECEIVABLES DESCRIBED
HEREIN HAVE BEEN SOLD TO CROMPTON & KNOWLES RECEIVABLES CORPORATION
PURSUANT TO AN AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, DATED AS OF
SEPTEMBER 28, 2006,  AMONG CHEMTURA
CORPORATION (“CHEMTURA”) AS INITIAL COLLECTION AGENT AND SELLER, CERTAIN
SUBSIDIARIES OF CHEMTURA,  AS SELLERS,
AND CROMPTON & KNOWLES RECEIVABLES CORPORATION.”

 

Each Seller hereby
authorizes Buyer or its designee to file one or more UCC financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Receivables and Related Assets of such Seller, in
each case whether now existing or hereafter generated by such Seller. Except
for material performance obligations of such Seller to any Obligor hereunder or
under any contracts relating to such Obligor, if (i) such Seller fails to
perform any of its agreements or obligations under this Agreement and does not
remedy the failure within the applicable cure period, if any, and (ii) Buyer
in good faith reasonably believes that the performance of such agreements and
obligations is necessary or appropriate to protect its interests under this
Agreement, then Buyer or its designee may (but shall not be required to)
perform, or cause performance of, such agreement or obligation and the
reasonable expenses of Buyer or its designee or assignee incurred in connection
with such performance shall be payable by such Seller as provided in Section 9.1.

 

SECTION 7.4                 Collection
of Receivables, Rights of Buyer and Its Assignees.  (a) Each Seller hereby transfers to the
Agent on behalf of the Purchasers (as transferee of Buyer’s interest in the
Specified Assets) the ownership of, and the exclusive dominion and control
over, each of the Bank Accounts and all related lockboxes owned by such Seller,
and such Seller hereby agrees to take any further action that Buyer or the
Agent may reasonably request in order to effect or complete the transfer. Each
Seller further agrees to use reasonable efforts to prevent funds other than
proceeds of the Specified Assets from being deposited in any Bank Account.

 

(b)           Each Seller shall, at the
request of Buyer and at such Seller’s expense, promptly give notice of interest
in the Receivables of the Obligor and the Related Assets to each such Obligor
and direct that payments be made directly to the Agent or its designee, which
notice shall be acceptable in form and substance to Buyer.  In addition, each Seller hereby authorizes
Buyer to take any and all steps in such Seller’s name and on its behalf that
are necessary or desirable, in the reasonable determination of Buyer, to
collect all amounts due under any and all Specified Assets, including endorsing
such Seller’s name on checks and other instruments representing Collections and
enforcing the Specified Assets and the contracts related to the Receivables.

 

ARTICLE VIII

TERMINATION

 

SECTION 8.1                 Termination
by the Sellers.  The Sellers
may terminate all of their agreements to sell Receivables hereunder to Buyer by
giving Buyer and the Agent not less than 

 

23

 

five Business Days prior
written notice of their election not to continue to sell Receivables to Buyer
(the “Termination of Sale Notice”);
provided that the Termination of
Sale Notice must specify the effective date of termination.

 

SECTION 8.2                 Automatic
Termination.  (a) The
agreement of Buyer to purchase Receivables from a Seller hereunder shall
terminate automatically upon (i) the first date on which an event
specified in the definition of Bankruptcy Event occurs as a result of a case or
proceeding being filed against such Seller, (ii) the first date on which
Chemtura Corporation fails to own and control, directly or indirectly, one
hundred percent (100%) of the outstanding voting stock of such Seller (other
than Chemtura Corporation) or (iii) the occurrence of a Termination Event,
as defined in the Receivables Sale Agreement. The termination referred to in
clauses (i) and (ii) of the proceeding sentence shall apply only to
the relevant Seller and the termination referred to in clause (iii) shall
apply to all Sellers.”

 

(b)           If the Internal Revenue
Service or the PBGC files one more Tax or ERISA Liens against the assets of
Buyer or any Seller (including Receivables), then (and for so long as such Tax
or ERISA Liens remain in place) Buyer shall not purchase any Receivables or
Related Assets from such Seller (or from any Seller if such Tax or ERISA Lien
is filed against Buyer).

 

ARTICLE IX

INDEMNIFICATION

 

SECTION 9.1                 Indemnities
by the Seller.  Without
limiting any other rights any Person may have hereunder or under applicable
law, each Seller, on a several basis, hereby indemnifies and holds harmless, on
an after-Tax basis, the Buyer, the Agent, the Purchaser Agents and each
Purchaser and their respective officers, directors, agents and employees, (each
an “Indemnified Party”) from and against any and all damages, losses, claims,
liabilities, penalties, Taxes, costs and expenses (including attorneys’ fees
and court costs) (all of the foregoing collectively, the “Indemnified Losses”)
at any time imposed on or incurred by any Indemnified Party arising out of or
otherwise relating to any Transaction Document, the transactions contemplated
thereby or the acquisition of any portion of the Sold Interest, or any action
taken or omitted by any of the Indemnified Parties (including any action taken
by the Agent as attorney-in-fact for the Seller pursuant to Section 3.5(b),
whether arising by reason of the acts to be performed by the Seller hereunder
or otherwise, excluding only Indemnified Losses to the extent (a) a final
judgment of a court of competent jurisdiction holds such Indemnified Losses
resulted solely from gross negligence or willful misconduct of the Indemnified
Party seeking indemnification, (b) solely due to the credit risk of the
Obligor and for which reimbursement would constitute recourse to the Seller for
uncollectible Receivables or (c) such Indemnified Losses include Taxes on,
or measured by, the overall net income of the Agent, any Purchaser Agent or any
Purchaser computed in accordance with the Intended Tax Characterization; provided, however, that nothing contained
in this sentence shall limit the liability of the Seller or limit the recourse
of each Indemnified Party to the Seller for any amounts otherwise specifically
provided to be paid by the Seller hereunder. Without limiting the foregoing
indemnification, but subject to the limitations set forth in clauses (a), (b) and
(c) of the previous sentence, the Seller shall indemnify each Indemnified
Party for Indemnified Losses (including losses in respect of uncollectible
Receivables, regardless for these specific matters 

 

24

 

whether reimbursement
therefore would constitute recourse to the Seller) relating to or resulting
from:

 

(i)            any representation or
warranty made by the Seller (or any employee or agent of the Seller) under or
in connection with this Agreement or any other information or report delivered
by the Seller pursuant hereto, which shall have been false or incorrect in any
material respect when made or deemed made;

 

(ii)           the failure by the Seller to
comply with any applicable law, rule or regulation related to any
Receivable, or the nonconformity of any Receivable with any such applicable
law, rule or regulation;

 

(iii)          the failure of the Seller to
vest and maintain vested in the Agent, for the benefit of the Purchasers, a
perfected ownership or security interest in the Specified Assets, free and
clear of any Adverse Claim;

 

(iv)          any commingling of funds to
which the Agent or any Purchaser is entitled hereunder with any other funds;

 

(v)           any failure of a Lock-Box Bank
to comply with the terms of the applicable Lock-Box Letter;

 

(vi)          any dispute, claim, offset
or defense (other than discharge in bankruptcy of the Obligor) of the Obligor
to the payment of any Receivable, or any other claim resulting from the sale or
lease of goods or the rendering of services related to such Receivable or the
furnishing or failure to furnish any goods or services or other similar claim
or defense not arising from the financial inability of any Obligor to pay
undisputed indebtedness;

 

(vii)         any failure of the Seller,
to perform its duties or obligations in accordance with the provisions of this
Agreement or any other Transaction Document to which such Person is a party (as
a Collection Agent or otherwise);

 

(viii)        any action taken by the Agent
as attorney-in-fact for the Seller; or

 

(ix)           any environmental liability
claim, products liability claim or personal injury or property damage suit or
other similar or related claim or action of whatever sort, arising out of or in
connection with any Receivable or any other suit, claim or action of whatever
sort relating to any of the Transaction Documents.

 

ARTICLE X 

MISCELLANEOUS

 

SECTION 10.1               Amendments;
Waivers, Etc.  (a) The provisions of this Agreement may
from time to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and signed by Buyer, each Seller and the
Agent (acting at the direction of the Instructing Group), and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

 

25

 

(b)           No failure or delay on the part of Buyer, the Agent or any
other third party beneficiary referred to in Section 10.11(a) in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on any Seller in any case shall entitle it to any notice or demand
in similar or other circumstances. No waiver or approval by Buyer or the Agent
under this Agreement shall, except as may otherwise be stated in the waiver or
approval, be applicable to subsequent transactions. No waiver or approval under
this Agreement shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.

 

SECTION 10.2               Notices,
Etc.  All notices, demands,
Instructions and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including facsimile communication) and
shall be personally delivered or sent by certified mail, postage prepaid, by
facsimile or by overnight courier, to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages hereof
or at such other address or facsimile number as shall be designated by the
party in a written notice to the other parties hereto given in accordance with
this section.  Copies of all notices,
demands, instructions and other communications provided for hereunder shall be
delivered to the Agent at its address for notices set forth in the Receivables
Sale Agreement. All notices and communications provided for hereunder shall be
effective, (a) if personally delivered, when received, (b) if sent by
certified mail, four Business Days after having been deposited in the mail,
postage prepaid and properly addressed, (c) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means and (d) if
sent by overnight courier, two Business Days after having been given to the
courier unless sooner received by the addressee.

 

SECTION 10.3               Cumulative
Remedies.  The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law. Without limiting the foregoing, each Seller hereby authorizes
Buyer, at any time and from time to time, to the fullest extent permitted by
law, to set-off, against any Obligations of any Seller to Buyer that are then
due and payable or that are not then due and payable from a Seller to Buyer but
have then accrued, any and all indebtedness or other obligations at any time
owing to any Seller by Buyer to or for the credit or the account of any Seller
or that are not then due and payable from Buyer to a Seller but have then
accrued.

 

SECTION 10.4               Binding
Effect; Assignability; Survival of Provisions.  This Agreement shall be binding upon and
inure to the benefit of Buyer and the Sellers and their respective successors
and permitted assigns. No Seller may assign any of its rights hereunder or any
interest herein without the prior written consent of Buyer and the Agent. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the first date following the Purchase Termination Date, on which all
Obligations shall have been finally and fully paid and performed or such other
time as the parties hereto shall agree and as to which the Agent shall have
given its prior written consent, which consent shall not be unreasonably
withheld or delayed.  The rights and
remedies with respect to any breach of any representation and warranty made by
a Seller pursuant to Article V or of any covenant made by a Seller in Article VI,
the indemnification and payment provisions of Article IX and Section 10.6,
and the provisions of Sections 10.3, 10.4, 10.5, 10.7, 10.8, 10.9, 

 

26

 

10.11, 10.12, 10.13, and 10.15, shall be
continuing and shall survive any termination of this Agreement.

 

SECTION 10.5               Governing
Law.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES, EXCEPT TO THE
EXTENT THAT THE PERFECTION OF THE INTERESTS OF BUYER IN THE RECEIVABLES AND THE
RELATED ASSETS ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.

 

SECTION 10.6               Costs,
Expenses and Taxes.  In
addition to the obligations of the Sellers under Article IX; the Sellers
agree jointly and severally to pay on demand:

 

(a)           all
reasonable out-of-pocket and other costs and expenses in connection with the
enforcement of this Agreement. the Seller Assignment Certificates or the other
Transaction Documents by Buyer or any successor in interest to Buyer, and

 

(b)           all
stamp and other taxes and fees payable or determined to be payable in
connection with the execution and delivery, and the filing and recording, of
this Agreement or the other Transaction Documents, and agrees to indemnify each
Indemnified Party against any liabilities with respect to or resulting from any
delay in paying or omission to pay the taxes and fees.

 

SECTION 10.7               Submission
to Jurisdiction.  Each party hereto hereby (a) irrevocably submits
to the non-exclusive jurisdiction of any New York State or Federal Court
sitting in the Borough of Manhattan in the City of New York, New York over any
action or proceeding arising out of or relating to the Transaction Documents, (b) irrevocably
agrees that all claims in respect of the action or proceeding may be heard and
determined in such State or Federal Court, (c) irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum
to the maintenance of such action or proceeding, and (d) irrevocably
appoints CT Corporation, as its agent to receive on behalf of it and its
property service of copies of the summons and complaint and any other process
that may be served in such action or proceeding. The service may be made by
mailing or delivering a copy of the process to Buyer or the applicable Seller
in care of the Process Agent at the Process Agent’s above address, and Buyer
and each Seller hereby irrevocably authorizes and directs the Process Agent to
accept the service on its behalf.

 

As an alternative method
of service, each of Buyer and the Sellers also irrevocably consents to the
service of any and all process in such action or proceeding by the mailing of
copies of the process to Buyer or a Seller (as applicable) at its address
specified herein. Nothing in this section shall affect the right of any party
hereto to serve legal process in any other manner permitted by law or affect
the right of any party hereto to bring any action or proceeding against any or
all of the other parties hereto or any of their respective properties in the
courts of any other jurisdiction.

 

SECTION 10.8               Waiver of
Jury Trial.  Each party hereto waives any right to a trial by jury
in any action or proceeding to enforce or defend any rights under or relating
to the 

 

27

 

Transaction
Documents or any amendment, instrument, document or agreement delivered or that
may in the future be delivered in connection therewith or arising from any
course of conduct, course of dealing, statements (whether verbal or written),
actions of any of the parties hereto or any other relationship existing in
connection with the Transaction Documents, and agrees that any such action or
proceeding shall be tried before a court and not before a jury.

 

SECTION 10.9               Integration.  This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.

 

SECTION 10.10             Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.

 

SECTION 10.11             Acknowledgment
and Consent.  (a) The
Sellers acknowledge that, contemporaneously herewith, Buyer is selling,
transferring, assigning, setting, granting, over and otherwise conveying to the
Agent all of Buyer’s right, title and interest in, to and under the Specified
Assets, this Agreement and all of the other Transaction Documents pursuant to
the Receivables Sale Agreement. The Sellers hereby consent to the sale,
transfer, assignment, set over and conveyance to the Agent by Buyer of all
right, title and interest of Buyer in, to and under the Specified Assets, this
Agreement and the other Transaction Documents, and all of Buyer’s rights,
remedies, powers and privileges, and all claims of Buyer against the Sellers,
under or with respect to this Agreement and the other Transaction Documents
(whether arising pursuant to the terms of this Agreement or otherwise available
at law, or in equity), including (i) the right of Buyer, at any time, to
enforce this Agreement against the Sellers and the obligations of the Sellers
hereunder, (ii) the right to appoint a successor to the Initial Collection
Agent at the times and upon the conditions set forth in the Receivables Sale
Agreement, and (iii) the right, at any time, to give or withhold any and
all consents, requests, notices, directions, approvals, demands, extensions or
waivers under or with respect to this Agreement, any other Transaction Document
or the obligations in respect of the Sellers thereunder to the same extent as
Buyer may do. Each of the parties hereto acknowledges and agrees that the
Agent, the Purchaser Agents and the Purchasers are third party beneficiaries of
the rights of Buyer arising hereunder and under the other Transaction Documents
to which any Seller is a party. Each Seller hereby acknowledges and agrees that
it has no claim to or interest in any of the Bank Accounts or the Transaction
Accounts.

 

(b)           The Sellers hereby agree to execute all agreements,
instruments and documents, and to take all other action, that Buyer or the
Agent reasonably determines is necessary or appropriate to evidence the
consents, agreements and acknowledgements described in subsection (a) above.  To the extent that Buyer, individually or
through the Initial Collection Agent, has granted or grants powers of attorney
to the Agent under the Receivables Sale Agreement, the Sellers hereby grant a
corresponding power of attorney on the same terms to Buyer. The Sellers hereby
acknowledge and agree that Buyer, in all of its capacities, shall assign to the
Agent for 

 

28

 

the benefit of the Purchasers the powers of
attorney and other rights and interests granted by the Sellers to Buyer
hereunder and agrees to cooperate fully with the Agent in the exercise of the
rights.

 

SECTION 10.12             No
Partnership or Joint Venture.  Nothing contained in this Agreement shall be
deemed or construed by the parties hereto or by any third Person to create the
relationship of principal and agent or of partnership or of joint venture.

 

SECTION 10.13             No
Proceedings.  Each Seller
hereby agrees that it will not institute against Buyer or any Conduit
Purchaser, or join any other Person in instituting, against Buyer or any
Conduit Purchaser (as such term is defined in the Receivables Sale Agreement),
any proceeding of the type referred to in the definition of Bankruptcy Event so
long as there shall not have elapsed one year plus one day since the last day
on which any such Investment shall have been outstanding.  The foregoing shall not limit the right of a
Seller to file any claim in or otherwise take any action with respect to any
such proceeding that was instituted against Buyer or any Conduit Purchaser (as
such term is defined in the Receivables Sale Agreement) by any Person other
than a Seller or the Parent (provided that no such action may be taken by a
Seller until such proceeding has continued undismissed, unstayed and in effect
for a period of 10 days).

 

SECTION 10.14             Severability
of Provisions.  If any one
or more of the covenants, agreements, provisions or terms of this Agreement or
any of the other Transaction Documents shall for any reason whatsoever be held
invalid, then the unenforceable covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement or the other Transaction Documents (as applicable)
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or any of the other Transaction Documents.

 

SECTION 10.15             Recourse
to Buyer.  Except to the extent expressly provided
otherwise in the Transaction Documents, the obligations of Buyer under the Transaction
Documents to which it is a party are solely the obligations of Buyer. No
recourse shall be had for payment of any fee payable by or other obligation of
or claim against Buyer that arises out of any Transaction Document to which
Buyer is a party against any director, officer or employee of Buyer. The
provisions of this section shall survive the termination of this Agreement.

 

SECTION 10.16             Authorization
to File Financing Statements.  Each of the Sellers hereby irrevocably
authorizes each of the Buyer and its assignees, at any time, and from time to
time, to file in any filing office in any jurisdiction any initial financing
statements and amendments thereto that indicate the Specified Assets as
collateral, and hereby ratifies the filing of any initial financing statements
or amendments thereto filed by the Buyer or its assignees that indicate the
Specified Assets as collateral which were filed prior to the execution of this
Agreement.

 

SECTION 10.17             Effect on
Original Agreement. 
Notwithstanding that this Agreement is amended and restated as of September 28,
2006, nothing contained herein shall be deemed to cause a novation of the
transactions, transfers and indebtedness effected under the Original Agreement,
as amended and supplemented to date and all of the Buyer Notes previously
executed.  All Buyer Notes issued
pursuant to the terms of the Original Agreement remain in full 

 

29

 

force and effect and all
references to the Original Agreement contained therein are hereby amended to
refer to this Agreement, as it may be amended, modified or supplemented from
time to time.

 

 [SIGNATURES FOLLOW]

 

30

 

IN WITNESS WHEREOF, the parties
have caused this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.

 

	
   

  	
  CHEMTURA CORPORATION (as successor to Crompton

  & Knowles Corporation),

  
	
   

  	
  as Initial Collection Agent and as Seller

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Eric Wisnefsky

  
	
   

  	
  Title:

  	
  Vice President Corporate Finance and Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  199 Benson Road

  	
   

  
	
   

  	
   

  	
  Middlebury, Connecticut 06749

  
	
   

  	
  Attention:

  	
   Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHEMTURA USA CORPORATION, as Seller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Wisnefsky

  	
   

  
	
   

  	
  Title:

  	
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  199 Benson Road

  	
   

  
	
   

  	
   

  	
  Middlebury, Connecticut 06749

  
	
   

  	
  Attention:

  	
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GREAT LAKES CHEMICAL CORPORATION, as Seller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Wisnefsky

  	
   

  
	
   

  	
  Title:

  	
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  199 Benson Road

  	
   

  
	
   

  	
   

  	
  Middlebury, Connecticut 06749

  
	
   

  	
  Attention:

  	
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BIO-LAB, INC., as Seller

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Wisnefsky

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  199 Benson Road

  	
   

  
	
   

  	
   

  	
  Middlebury, Connecticut 06749

  
	
   

  	
  Attention:

  	
  Treasurer

  	
   

  
								

 

 

	
   

  	
  CROMPTON & KNOWLES RECEIVABLES

  CORPORATION,

  as the Buyer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Eric Wisnefsky

  	
   

  
	
   

  	
  Title: 

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  199 Benson Road

  	
   

  
	
   

  	
   

  	
  Middlebury, Connecticut 06749

  
	
   

  	
  Attention:

  	
   Treasurer

  	
   

  
						

 

 

	
   

  	
  CONSENTED TO AND AGREED BY:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ABN AMRO BANK N.V.,

  as Agent and as Purchaser Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin G. Pilz

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kristina Naville

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
						

 

 

	
  WACHOVIA BANK, NATIONAL ASSOCIATION,

  
	
   

  
	
  as Purchaser Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael J. Landry

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  
					

 

 

	
  CALYON NEW YORK BRANCH,

  	
   

  
	
   

  	
   

  
	
  as Purchaser Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael Guarda

  	
   

  
	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Sam Pilcer

  	
   

  
	
  Title:

  	
  Managing Director

  	
   

  
					

 

 

EXHIBIT A

 

FORM OF BUYER NOTE

 

               
    ,         

 

FOR VALUE
RECEIVED, the undersigned, CROMPTON & KNOWLES RECEIVABLES CORPORATION,
a Delaware corporation (“Buyer”),
promises to pay to
[                       ],
a [         ] corporation (the “Seller” and together with its successors and assigns, the “Holder”), on the terms and subject to the conditions set
forth in this promissory note (this “Note”) and in
the Amended and Restated Receivables Purchase Agreement dated as of September 28,
2006 (as amended, amended and restated or otherwise modified from time to time,
the “Agreement”) among Buyer, CHEMTURA USA
CORPORATION (the “Parent”), and certain affiliates
of the Parent an amount equal to the aggregate deferred Purchase Price owed by
Buyer to the Seller pursuant to Article III of the Agreement. Such amount,
as shown in the records of the Initial Collection Agent, will be rebuttable
presumptive evidence of the principal amount and interest owing under this
Note.

 

1.             Purchase Agreement.  This Note is a Buyer Note described in, and
is subject to the terms and conditions set forth in, the Agreement. Reference
is hereby made to the Agreement for a statement of certain other rights and
obligations of Buyer and the Seller.

 

2.             Rules of Construction; Definitions.  Certain rules of construction governing
the interpretation of this Note are set forth in Appendix A to the Agreement
and except as otherwise specifically provided herein, capitalized terms used
but not defined herein have the meanings ascribed to them in such Appendix A
or, if not defined therein, as such terms as defined in the Receivables Sale
Agreement. In addition, as used herein, the following terms have the following
meanings:

 

“Bankruptcy
Proceedings” means any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to Buyer, whether
voluntary or involuntary, partial or complete, and whether in bankruptcy,
insolvency, receivership or other similar proceedings, or upon an assignment
for the benefit of creditors, or any other marshalling of the assets and
liabilities of Buyer or any sale of all or substantially all of the assets of
Buyer; provided, however, that none of the
following shall constitute a “Bankruptcy Proceeding” so long as no bankruptcy,
insolvency, receivership or other similar proceedings shall have been commenced
by or against Buyer and is continuing; the occurrence of a Termination Event in
accordance with the terms of the Receivables Sale Agreement.

 

“Highest
Lawful Rate” has the meaning set forth in paragraph 9.

 

“Junior
Liabilities” means all obligations of Buyer to the Holder under this
Note.

 

“Reference
Rate” means, with respect to any day occurring in a Calculation
Period, the rate of interest then in effect under the Chemtura Credit
Agreement.

 

1

 

“Senior
Interests” means all obligations of Buyer to the Agent or the
Purchasers under or in connection with the Transaction Documents, whether
direct or indirect, absolute or contingent, now or hereafter existing, or due
or to become due, including without limitation interest or other amounts due or
to become due after an Event of Bankruptcy.

 

“Subordination
Provisions” means, collectively, the provisions of paragraph 7.

 

3.             Interest.  Subject to the Subordination Provisions,
Buyer promises to pay interest on the aggregate unpaid principal amount of this
Note outstanding on each day at an adjustable rate per annum equal to the
Reference Rate in effect on such day.

 

4.             Interest Payment Dates.  (a)  Subject to the Subordination
Provisions, Buyer shall pay accrued interest on this Note on the twentieth day
of each month. Buyer also shall pay accrued interest on the principal amount of
each prepayment hereof on the date of such prepayment.

 

(b)           Notwithstanding the provisions of paragraph 4(a), in the
event that on the date an interest payment is due hereunder the amount of funds
available therefor pursuant to Section 3.3 of the Agreement is
insufficient to pay any amount due pursuant to paragraph 4(a), then interest
shall be payable only to the extent that funds are available therefor in
accordance with Section 3.3 of the Agreement, and any amount not paid
because funds are not available in accordance with said  Section 3.3
shall not constitute a claim (as defined in §101 of the Bankruptcy Code)
against or corporate obligation of Buyer for any such insufficiency. All
interest on this Note that is not paid when due pursuant to this paragraph
shall be payable on the next date on which an interest payment on this Note is
due and on which funds are available therefor pursuant to Section 3.3 of
the Agreement and all such unpaid interest shall accrue interest at the
Reference Rate until paid in full.

 

5.             Basis of Computation.   Interest accrued hereunder shall be computed
for the actual number of days elapsed on the basis of a 360-day year.

 

6.             Principal Payment Dates.  Subject to the Subordination Provisions, any
unpaid principal of this Note shall only become due and payable on the date
which is one year and one day after the date on which all Investments (as
defined in the Receivables Sale Agreement) and other amounts then due and owing
by the Buyer under the Transaction Documents have been paid in full. Subject to
the Subordination Provisions, the principal amount of and accrued interest on
this Note may be prepaid on any Business Day without premium or penalty; provided, that no prepayment shall be made by Buyer to the
extent that such prepayment would result in a default in the payment of any
other amount required to be paid by Buyer under any Transaction Document.

 

2

 

7.             Subordination Provisions.  Buyer covenants and agrees, and the Holder,
by its acceptance of this Note, likewise covenants and agrees, that the payment
of all Junior Liabilities is hereby expressly subordinated in right of payment
to the payment and performance of the Senior Interests to the extent and in the
manner set forth in this paragraph:

 

(a)           In the event of any Bankruptcy Proceeding, the Senior
Interests shall first be paid and performed in full and in cash before the
Holder shall be entitled to receive and to retain any payment or distribution
in respect of the Junior Liabilities. In order to implement the foregoing: (i) all
payments and distributions of any kind or character in respect of the Junior
Liabilities to which the Holder would be entitled except for this clause (a) shall
be made directly to the Agent (for the benefit of itself and the Purchasers),
and (ii) if a Bankruptcy Proceeding has been commenced, the Holder shall
promptly file a claim or claims, in the form required in such Bankruptcy
Proceeding, for the full outstanding amount of the Junior Liabilities, and
shall use commercially reasonable efforts to cause said claim or claims to be
approved and all payments and other distributions in respect thereof to be made
directly to the Agent (for the benefit of itself and the Purchasers) until the
Senior Interests shall have been paid and performed in full and in cash.

 

(b)           In the event that the Holder receives any payment or other
distribution of any kind or character from Buyer or from any other source
whatsoever, in payment of the Junior Liabilities, after the commencement of any
Bankruptcy Proceeding, such payment or other distribution shall be received in
trust for the Agent and the Purchasers and shall be turned over by the Holder
to the Agent forthwith.

 

(c)           Upon the final indefeasible payment in full and in cash of
all Senior Interests, the Holder shall be subrogated to the rights of the Agent
and the Purchasers to receive payments or distributions from Buyer that are
applicable to the Senior Interests until the Junior Liabilities are paid in
full.

 

(d)           These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Holder, on the one hand, and the
Agent and the Purchasers on the other hand. Nothing contained in these
Subordination Provisions or elsewhere in this Note is intended to or shall
impair, as between Buyer, its creditors (other than the Agent and the
Purchasers) and the Holder, Buyer’s obligation, which is unconditional and
absolute, to pay the Junior Liabilities as and when the same shall become due
and payable in accordance with the terms hereof and of the Agreement or to
effect the relative rights of the Holder and creditors of Buyer (other than the
Agent and the Purchasers).

 

(e)           The Holder shall not, until the Senior Interests have been
finally paid and performed in full and in cash, (i) cancel, waive,
forgive, transfer or assign, or commence legal proceedings to enforce or
collect, or subordinate to any obligation of Buyer (other than to the Senior
Interests), howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, or now or hereafter existing, or due or to
become due, the Junior Liabilities or any rights in respect hereof or (ii) convert
the Junior Liabilities into 

 

3

 

an equity interest in Buyer, unless, in the
case of each of clauses (i) and (ii), the Holder shall have received the prior written
consent of the Instructing Group in each case.

 

(f)            The Holder shall not commence, or join with any other
Person in commencing, any proceeding of the type referred to in the definition
of Bankruptcy Event with respect to Buyer until at least one year and one day
shall have passed after the Senior Interests shall have been finally paid and
performed in full and in cash; provided, however,
that the Holder shall at all times have the right to file any claim in or
otherwise take any action with respect to any insolvency proceeding instituted
against Buyer by any Person other than the Holder (provided that no such action
may be taken by the Holder until such proceeding has continued undismissed, unstayed
and in effect for a period of 10 days).

 

(g)           If, at any time, any payment (in whole or in part) made
with respect to any Receivable is rescinded or must be restored or returned by
the Agent or a Purchaser (whether in connection with any Bankruptcy Proceedings
or otherwise), these Subordination Provisions shall continue to be effective or
shall be reinstated, as the case may be, as though such payment had not been
made.

 

(h)           Each of the Agent and the Purchasers may, from time to
time, in its sole discretion, without notice to the Holder, and without waiving
any of its rights under these Subordination Provisions, take any or all of the
following actions: (i) retain or obtain an interest in any property to
secure any of the Senior Interests, (ii) retain or obtain the primary or
secondary obligations of any other obligor or obligors with respect to any of
the Senior Interests, (iii) extend or renew for one or more periods
(whether or not longer than the original period), alter, increase or exchange
any of the Senior Interests, or release or compromise any obligation of any
nature with respect to any of the Senior Interests, (iv) amend,
supplement, amend and restate, or otherwise modify any Transaction Document to
which it is a party, and (v) release its security interest in, or
surrender, release or permit any substitution or exchange for all or any part
of any rights or property securing any of the Senior Interests, or extend or
renew for one or more periods (whether or not longer than the original period),
or release, compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such rights or property.

 

(i)            The Holder hereby waives: (i) notice of` acceptance
of these Subordination Provisions by the Agent or any of the Purchasers, (ii) notice
of the existence, creation, non-payment or non-performance of all or any of the
Senior Interests, and (iii) all diligence in enforcement, collection or
protection of, or realization upon, the Senior Interests, or any thereof, or
any security therefor.

 

(j)            These Subordination Provisions constitute a continuing,
offer from Buyer to all Persons who become the holders of, or who continue to
hold, Senior Interests, and these Subordination Provisions are made for the
benefit of the Agent and the Purchasers, and the Agent may proceed to enforce
such provisions on behalf of each of such Persons.

 

8.             General.  No failure or delay on the part of the Holder
in exercising any power or right hereunder shall operate as a waiver thereof
nor shall any single or partial exercise of any such 

 

4

 

power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Note shall in any event be effective unless (a) the same
shall be in writing and signed and delivered by Buyer and the Seller, and (b) all
consents required for such actions under the Transaction Documents shall have
been received by the appropriate Persons.

 

9.             Limitation on Interest.  Notwithstanding anything in this Note to the
contrary, Buyer shall never be required to pay unearned interest on any amount
outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder, at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received under
applicable federal or state law (such maximum rate being herein called the “Highest Lawful Rate”). 
If the effective rate of interest that would otherwise be payable under
this Note would exceed the Highest Lawful Rate, or the Holder shall receive any
unearned interest or shall receive monies that are deemed to constitute
interest that would increase the effective rate of interest payable by Buyer
under this Note to a rate in excess of the Highest Lawful Rate, then (a) the
amount of interest that would otherwise be payable by Buyer under this Note
shall be reduced to the amount allowed by applicable law, and (b) any
unearned interest paid by Buyer or any interest paid by Buyer in excess of the
Highest Lawful Rate shall be refunded to Buyer. Without limitation of the
foregoing all calculations of the rate of interest contracted for, charged or
received by the Holder under this Note that are made for the purpose of
determining whether such rate exceeds the Highest Lawful Rate shall be made, to
the extent permitted by applicable usury laws (now or hereafter enacted), by
amortizing, prorating and spreading in equal parts during the actual period
during which any amount has been outstanding) hereunder all interest at any
time contracted for, charged or received by the Holder in connection herewith.
If at any time and from time to time (i) the amount of interest payable to
the Holder on any date shall be computed at the Highest Lawful Rate pursuant to
the provisions of the foregoing sentence, and (ii) in respect of any
subsequent interest computation period the amount of interest otherwise payable
to the Holder would be less than the amount of interest payable to the Holder
computed at the Highest Lawful Rate, then the amount of interest payable to the
Holder in respect of such subsequent interest computation period shall continue
to be computed at the Highest Lawful Rate until the total amount of interest
payable to the holder shall equal the total amount of interest that would have
been payable to the Holder if the total amount of interest had been computed
without giving effect to the provisions of the foregoing sentence.

 

10.           No Negotiation.  This Note is not negotiable.

 

11.           Governing Law.  THIS NOTE
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.

 

12.           Security Interest.  The Seller may grant a security interest in
or otherwise pledge this Note as security, and any Person to whom such security
interest is granted or to whom this Note is pledged shall be bound by, and for
all purposes takes this Note subject to, the restrictions and other provisions
(including the Subordination Provisions) set forth herein.

 

5

 

13.           Captions.  Paragraph captions used in this Note are
provided solely for convenience of reference and shall not affect the meaning
or interpretation of any provision of this Note.

 

	
   

  	
  CROMPTON & KNOWLES RECEIVABLES

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT B

 

FORM OF 

SELLER ASSIGNMENT CERTIFICATE

[DATE]

 

Reference is
made to the Amended and Restated Receivables Purchase Agreement dated as of September 28,
2006 (as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time, the “Agreement”)
among CHEMTURA CORPORATION (“Chemtura”, as
Initial Collection Agent, certain affiliates of Chemtura, as Sellers, and
CROMPTON & KNOWLES RECEIVABLES CORPORATION (“Buyer”).  Unless otherwise defined herein, capitalized
terms used herein have the meanings provided in Appendix A to the Agreement,
and this Seller Assignment Certificate shall be interpreted in accordance with
the conventions set forth in Part B of such Appendix A.

 

The
undersigned (the “Seller”) hereby sells, transfers,
assigns, sets over and conveys unto Buyer all right, title and interest of the
Seller in, to and under:

 

(a)           all Receivables of the Seller (other than Contributed
Receivables) that existed and were owing to the Seller as at the closing of the
Seller’s business on the Initial Cut-Off Date,

 

(b)           all Receivables created by the Seller (other than
Contributed Receivables) that arise during the period from and including the
closing of the Sellers business on the Initial Cut-Off Date to but excluding
the Purchase Termination Date,

 

(c)           all Related Security with respect to all Receivables (other
than Contributed Receivables) of the Seller,

 

(d)           all Collections and other proceeds of the foregoing,
including all funds received by any Person in payment of any amounts owed
(including invoice prices, finance charges, interest and all other charges, if
any) in respect of any Receivable described above (other than a Contributed
Receivable) or Related Security with respect to any such Receivable, or
otherwise applied to repay or discharge any such Receivable (including
insurance payments that the Seller or the Initial Collection Agent applies in
the ordinary course of its business to amounts owed in respect of any such
Receivable and net proceeds of any sale or other disposition of repossessed
goods that were the subject of any such Receivable) or other collateral or
property of any Obligor or any other Person directly or indirectly liable for
payment of such Receivables), and

 

(e)           all Records relating to any of the foregoing.

 

This Seller
Assignment Certificate is made without recourse but on the terms and subject to
the conditions set forth in the Transaction Documents to which the Seller is a
party. The Seller acknowledges and agrees that Buyer is accepting this Seller
Assignment Certificate in reliance on the representations, warranties and
covenants of the Seller contained in the Transaction Documents to which the
Seller is a party.

 

1

 

THIS
SELLER ASSIGNMENT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
AGREEMENT AND THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.

 

IN WITNESS WHEREOF, the undersigned has
caused this Seller Assignment Certificate to be duly executed and delivered by
its duly Authorized Officer as of the date first above written.

 

	
   

  	
  [SELLER FULL NAME]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

2

 

EXHIBIT C

 

FORM OF LETTER OF CREDIT REQUEST

 

[Date]

 

To:     Crompton &
Knowles Receivables Corporation
 199 Benson Road

Middlebury, Connecticut 06749

Attention:              

Facsimile:               

Telephone:

 

Re:  LETTER OF CREDIT
REQUEST

 

Ladies and Gentlemen:

 

Reference is hereby made to the
Amended and Restated Receivables Sale Agreement, dated as of September 28,
2006, among Chemtura Corporation, as Initial Collection Agent, the sellers listed
therein, and Crompton & Knowles Receivables Corporation as buyer (as
amended, supplemented, restated or otherwise modified from time to time in
accordance with its terms, the “Agreement”). 
Capitalized terms used and not otherwise defined herein are used with
the meanings attributed to them in the Agreement.

 

You are hereby requested to arrange
for and obtain the issuance of a standby letter of credit with the following
terms for your account:

 

1.             Name
and address of beneficiary:

 

2.             To
be delivered by [overnight carrier/teletransmission/mail/other (specify)]

 

3.             Currency
and amount:  US$

 

4.             Advising
bank name and address, if applicable:

 

5.                                       Expiration date (not to exceed one year from the date
of issuance or extension):

 

6.             Credit
to be available for payment against beneficiary’s draft(s) drawn at sight
accompanied by the following documents (check one):

 

          Statement
purportedly signed by the beneficiary which reads as
follows:                              .

          Other
Documents:

          Special
Conditions (including, if you have a preference, selection of UCP or ISP98):

          Issue
substantially in form of attached specimen.

 

[We hereby offer you a commission
for this letter of credit, payable upon its issuance and delivery, of
$                       .]

 

1

 

[If the beneficiary specified above
is a financial institution that is to issue its own undertaking based on this
requested letter of credit:  Request
beneficiary to issue and deliver its (specify type of undertaking)                   
in favor of                              
for an amount not exceeding the amount specified above, effective immediately
relative to (specify contract number or other pertinent reference)                          
to expire on                            .    ]

 

The requested letter of credit
should state that it is being issued upon application of Crompton &
Knowles Receivables Corporation at the request of Chemtura USA Corporation.

 

Sincerely,

Chemtura USA Corporation, as Parent

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  

 

2

 

SCHEDULE 1

 

LITIGATION AND OTHER PROCEEDINGS

 

NONE

 

 

SCHEDULE 2

 

CREDIT AND COLLECTION POLICY

 

 

SCHEDULE 3

SELLER LOCATIONS – OFFICES AND RECORDS

 

 

SCHEDULE 4

 

LEGAL NAMES, TRADE NAMES AND NAMES

UNDER WHICH THE SELLERS DO BUSINESS

 

Chemtura Corporation

Chemtura USA Corporation

Great Lakes Chemical Corporation

Bio-Lab, Inc.

Crompton Sales Company, Inc.

Crompton Corporation

Crompton & Knowles Corporation

Uniroyal Chemical Company, Inc.

CK Witco Corp.

Crompton Manufacturing Company, Inc.

Witco Corporation

 

 

APPENDIX A

to

Receivables Purchase Agreement

 

DEFINITIONS

 

Part A.  Defined Terms

 

“Agent” means
ABN AMRO Bank N.V., in its capacity as agent under the Receivables Sale
Agreement, and successor thereto appointed in accordance with the Receivables
Sale Agreement.

 

“Adverse Claim”
means any claim of ownership interest or any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other) or other security interest.

 

“Affiliate”
means as to any Person, any other Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Person. A
Person shall be deemed to control another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.

 

“Aggregate Unpaid Balance”
is defined in Section 2.1(b) of the Receivables Purchase Agreement.

 

“Attorney Costs”
means and includes all fees and disbursements of any law firm or other external
counsel.

 

“Authorized Officer”
means, with respect to Buyer, Initial Collection Agent, any Seller or the
Agent, any of the Chief Executive Officer, the President, the Treasurer, the
Chief Financial Officer, any Vice President and any Assistant Treasurer of such
Person.

 

“Bankruptcy Code”
means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101. et  seq.).

 

“Bankruptcy
Event” means, for any Person, any of the following events:

 

(a)           a
case or other proceeding shall be commenced, without the application or consent
of such Person, in any court, seeking the liquidation, reorganization, debt
arrangement, dissolution, winding up or composition or readjustment of debts of
such Person, the appointment of a trustee, receiver, custodian, liquidator,
assignee, sequestrator or the like for such Person or any substantial part of
its assets, or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or composition
or adjustment of debts, and such case or proceeding shall continue undismissed,
or unstayed and in effect, for a period of 60 days; or an order for relief in
respect of such Person shall be entered in an involuntary case under the
federal bankruptcy laws or other similar laws now or hereafter in effect, or

 

 

(b)           such
Person shall commence a voluntary case or other proceeding under any applicable
bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other
similar law now or hereafter in effect, or shall consent to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestration or the like, for such Person or any substantial part of its
property, or shall make any general assignment for the benefit of creditors, or
shall fail to, or admit in writing its inability to, pay its debts generally as
they become due.

 

“Business Day”
shall have the meaning assigned to such term on the Receivables Sale Agreement.

 

“Buyer”
is defined in the preamble to the Receivables Purchase Agreement.

 

“Calculation
Period” means a calendar month.

 

“Calendar
Cycle” means a financial reporting cycle utilized by the Initial
Collection Agent.

 

“Collection”
means all funds that are received by a Seller or Initial Collection Agent from
or on behalf of any Obligor in payment of any amounts owed (including invoice
prices, finance charges, interest and all other charges, if any) in respect of
any Receivable or Related Asset, or any other funds otherwise applied to repay
or discharge any Receivable (including insurance payments applied in the
ordinary course of its business to amounts owed in respect of such Receivable
and net proceeds of sale or other disposition of repossessed (goods that were the
subject of such Receivable), in each case without regard to whether such funds
are immediately available or evidenced by checks or otherwise.

 

“Contributed
Receivables” is defined in Section 1.7 of the Receivables
Purchase Agreement.

 

“Credit and
Collection Policy” means, with respect to a Seller, the credit and
collection policies and practices relating to the contracts and Receivables of
such Seller as set forth in Schedule 2 to the Receivables Purchase Agreement,
as such credit and collection policies may be modified without violating Section 6.1(g) of
the Receivables Purchase Agreement.

 

“Chemtura
Credit Agreement” is defined in the Receivables Sale Agreement.

 

“Cut-Off Date”
means the last day of any calendar month.

 

“Daily Report”
means the report prepared by the Initial Collection Agent in accordance with
the proviso set forth in Section 3.3 of the Receivable Sale Agreement and
the form of which appears as Exhibit D-2 to the Receivables Sale
Agreement.

 

“Dollars”
means dollars in lawful money of the United States of America.

 

“Effective
Date” means September 28, 2006.

 

A-2

 

“Eligible
Receivable” shall have the meaning assigned to such term in the
Receivables Sale Agreement.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time.

 

“ERISA
Affiliate” means a corporation, trade or business that is, along
with any Seller, a member of a controlled group of corporations or a controlled
group of trades or businesses, as described in section 414 of the Internal
Revenue Code, or section 4001 of ERISA

 

“Federal
Reserve Board” means the Board of Governors of the Federal Reserve
System, or any successor thereto or to the functions thereof.

 

“First
Issuance Date” means, with respect to each Seller, the date such
Seller became party to this Receivables Purchase Agreement.

 

“GAAP”
means United States generally accepted accounting principles.

 

“Governmental
Authority” means the United States of America, any state or other
political subdivision thereof and any entity in the United States of America or
any applicable foreign jurisdiction that exercises executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.

 

“Guaranty”
means any agreement or arrangement by which any Person directly or indirectly
guarantees, endorses, agrees to purchase or otherwise becomes contingently liable
upon any liability of any other Person (other than by endorsements of
instruments in the course of collection) or guarantees the payment of
distributions upon the shares of any other Person.

 

“Indebtedness”
of any Person means all of that Person’s obligations for borrowed money,
obligations evidenced by bonds, debentures, notes or other similar instruments,
obligations as lessee under leases that are required by GAAP to be recorded as
capitalized leases and obligations to pay the deferred purchase price of
property or services.

 

“Indemnified
Losses” means any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, claims, suits, costs, charges, expenses and
disbursements (including reasonable Attorney Costs) of any kind or nature
whatsoever (whether on account of settlement or otherwise, and whether or not
the Person seeking indemnification, payment or reimbursement is a party to any
action or proceeding, if applicable, that gives rise to any Indemnified
Losses).

 

“Initial
Collection Agent” means at any time the Person then authorized
pursuant to the Receivables Sale Agreement to service, administer and collect
Receivables and the Related Assets, which Person shall initially be Chemtura
Corporation.

 

“Initial
Cut-Off Date” means, with respect to each Seller, the Business Day
immediately preceding the First Issuance Date.

 

A-3

 

“Instructing
Group” is defined in the Receivables Purchase Agreement.

 

“Internal
Revenue Code” means the Internal Revenue Code of 1986.

 

“LC
Application” shall have the meaning set forth in the Receivables
Purchase Agreement.

 

“LC
Commission” means, with respect to any Letter of Credit, an amount
equal to the fee payable in connection with the issuance or extension of such
Letter of Credit.

 

“LC Issuer”
means Wachovia Bank, National Association, in its capacity as the issuer of a
Letter of Credit pursuant to the terms of the Receivables Sale Agreement.

 

“LC
Obligations” shall have the meaning set forth in the Receivable
Purchase Agreement.

 

“Letter of
Credit” means a stand-by letter of credit issued by the LC Issuer in
United States dollars upon application of Buyer at the request of the Parent,
as extended from time to time in accordance with this Agreement.

 

“Letter of
Credit Request” means a request substantially in the form of Exhibit C
hereto, with appropriate insertions thereto, duly executed by a Seller.

 

“Lockbox
Accounts” means bank accounts into which Collections from
Receivables are deposited.

 

“Lockbox Bank”
means any of the banks at which one or more Lockbox Accounts are maintained.

 

“Material
Adverse Effect” means, with respect to any Seller or Initial
Collection Agent and any, event or circumstance at any time, a material adverse
effect on (a) the ability of Seller or Initial Collection Agent to perform
its obligations under any Transaction Document or (b) the validity,
enforceability or collectibility of any Receivables, Related Assets or
contracts relating thereto or (c) any Transaction Document, provided, that for the purpose of determining whether any
Adverse Claim or other event or circumstance results (or has a likelihood of
resulting) in a Material Adverse Effect, the effect of such event or
circumstance shall be considered in the aggregate with the effect of all other
Adverse Claims (including Permitted Adverse Claims) or other events and
circumstances occurring or existing at the time of such determination.

 

“Moody’s”
means Moody’s Investors Service, Inc. or any successor thereto.

 

“Net Worth”
means, as of any date of determination, an amount equal to the excess, if any,
of (x) the sum of (a) the sum of the then Unpaid Balances of all
Receivables owned by the Buyer and (B) all amounts then on deposit in the
Letter of Credit Collateral Account, over (y) the sum of (i) the
Aggregate Investment, measured as of such date of determination, plus (ii) the
sum of the unpaid principal balance of all Buyer Notes then outstanding
(including the amount of any increase in such principal balances to be made on
such date of determination).

 

A-4

 

“Noteholder”
means any holder of a commercial paper note issued by the Purchaser.

 

“Notice of
Difference” is defined in the Receivables Sale Agreement.

 

“Obligations”
means (a) all obligations (monetary or otherwise) of the Seller to the
Buyer and its successors, permitted transferees and assigns, arising under or
in connection with the Transaction Documents, and (b) all obligations
(monetary or otherwise) of a Seller to Buyer and its successors, transferees
and assigns, arising under or in connection with the Transaction Documents, in
each case howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent now or hereafter existing, or due or to become due.

 

“Obligor”
means a Person obligated to make payments on a Receivable.

 

“Officer’s
Certificate” means, unless otherwise specified in the Receivables
Purchase Agreement or Receivables Sale Agreement, as the case may be, a
certificate signed by an Authorized Officer of the applicable Seller or the
Initial Collection Agent as the case may be, or, in the case of a Successor
Initial Collection Agent, a certificate signed by the President, any Vice
President, Assistant Treasurer or the financial controller (or an officer
holding an office with equivalent or more senior responsibilities) of such
Successor Initial Collection Agent, that, in the case of any of the foregoing,
is delivered to the Agent.

 

“Opinion of
Counsel” means a written opinion of counsel, which shall be
reasonably acceptable to the addressees thereof.

 

“Original
Agreement” means the Receivables Purchase Agreement, dated as of December 11,
1998, among Chemtura Corporation, as Initial Collection Agent, Crompton and
Knowles Receivables Corporation, as the Buyer, and the Sellers from time to
time party thereto, as amended, supplemented or otherwise modified prior to the
date hereof.

 

“Parent”
means Chemtura USA Corporation.

 

“PBGC”
means the Pension Benefit Guaranty Corporation.

 

“Pension Plan”
means a “pension plan,” as such term is defined in section 3(2) of ERISA,
which is subject to title IV of ERISA (other than any “multiemployer plan” as
such term is defined in section 4001(a)(3) of ERISA), and to which any
Seller or any ERISA Affiliate may have any liability, including any liability
by reason of having been a substantial employer within the meaning of section
4063 of ERISA at any time during the preceding five years or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.

 

“Periodic
Report” is defined in the Receivables Sale Agreement.

 

“Permitted
Adverse Claims” means (a) ownership or security interests
arising under the Transaction Documents; and (b) liens for taxes,
assessments or charges of any Governmental Authority (other than Tax or ERISA
Liens) and liens of landlords, carriers, warehousemen, mechanics and
materialmen imposed by law in the ordinary course of business, in each case (i) for
amounts not yet due or (ii) which are being contested in good faith by
appropriate 

 

A-5

 

proceedings
and with respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP.

 

“Person”
means an individual, partnership, limited liability company, corporation, joint
stock company, trust (including a business trust), unincorporated association,
joint venture, government or any agency or political subdivision thereof or any
other entity.

 

“Process
Agent” is defined in Section 10.7 of the Receivables Purchase
Agreement.

 

“Program”
means the transactions contemplated in the Transaction Documents.

 

“Purchase”
means each purchase of Receivables and Related Assets by Buyer from a Seller
under the Receivables Purchase Agreement.

 

“Purchaser
Agent” is defined in the Receivables Sale Agreement.

 

“Purchasers”
is defined in the Receivables Sale Agreement.

 

“Purchase
Price” is defined in Section 2.1(b) of the Receivables
Purchase Agreement.

 

“Purchase
Price Credit” is defined in Section 3.1(d) of the
Receivables Purchase Agreement.

 

“Purchase
Termination Date” means the earlier to occur of (a) the
effective date of termination specified by the Seller pursuant to Section 8.1
of the Receivables Purchase Agreement, and (b) the occurrence of any event
referred to in Section 8.2 of the Receivables Purchase Agreement.

 

“Purchased
Assets” is defined in Section 1.1 of the Receivables Purchase
Agreement.

 

“Purchased
Receivables” is defined in Section 1.1 of the Receivables
Purchase Agreement.

 

“Purchaser Collections”
shall have the meaning assigned to each term in the Receivables Sale Agreement.

 

“Rating
Agency” means each of S&P and Moody’s.

 

“Receivable”
shall have the meaning assigned to such term in the Receivables Sale Agreement.

 

“Receivables
Purchase Agreement” means the Amended and Restated Receivables
Purchase Agreement, dated as of September 28, 2006, among Chemtura
Corporation, as Initial Collection Agent, the Seller and the Buyer, as such
agreement may be amended, amended and restated, modified or supplemented from
time to time in accordance with its terms.

 

“Receivables
Sale Agreement” means the Fourth Amended and Restated Receivables
Sale Agreement, dated as of September 28, 2006, among Crompton &
Knowles Receivables Corporation, as seller, Chemtura Corporation, as the
Initial Collection Agent, ABN AMRO Bank 

 

A-6

 

N.V.,
as the Agent and the Amsterdam Purchaser Agent, Wachovia Bank, National
Association, as the VFCC Purchaser Agent and LC Issuer, Calyon New York Branch,
as the Atlantic Purchaser Agent, the other Purchaser Agents from time to time
party thereto, the Related Bank Purchasers from time to time party thereto and
Amsterdam Funding Corporation, Atlantic Asset Securitization LLC and Variable
Funding Capital Company, LLC and the other Conduit Purchasers from time to time
party thereto, as such agreement may be amended, amended and restated, modified
or supplemented from time to time in accordance with its terms.

 

“Records”
means all contracts, purchase orders, invoices and other agreements, documents,
books, records and other media for the storage of information (including tapes,
disks, punch cards, computer programs and databases and related property)
maintained by the Sellers or Initial Collection Agent with respect to the
Purchased Assets or the related Obligors.

 

“Recoveries”
means all Collections received by the Initial Collection Agent in respect of
any Write-Off.

 

“Related
Assets” is defined in Section 1.1 of the Receivables Purchase
Agreement.

 

“Related
Contributed Assets” is defined in Section l.7 the Receivables
Purchase Agreement.

 

“Related
Purchased Assets” is defined in Section 1.1 of the Receivables
Purchase Agreement.

 

“Related
Security” means, with respect to any Receivable, (a) all of the
applicable Seller’s right, title and interest in and to the goods. if any,
relating to the sale that gave rise to the Receivable, (b) all other
security interests or liens and property subject thereto from time to time
purporting to secure payment of the Receivable, whether pursuant to any
contract related to the Receivable or otherwise, and (c) all letters of
credit, guarantees and other agreements or arrangements of whatever character
from time to time supporting or securing payment of the Receivable, whether
pursuant to any contract related to the Receivable or otherwise.

 

“Report Date”
means the twentieth day of each calendar month (or, if such day is not a
Business Day, the next Business Day following such day).

 

“Required
Capital Amount” means, as of any date of determination, an amount
equal to the greater of (i) the LC Obligations then unpaid and (ii) Twenty
Eight Million, Five Hundred Thousand Dollars ($28,500,000).

 

“S&P”
means Standard & Poor’s, a division of The McGraw-Hill Companies. Inc.,
or any successor thereto.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Seller”
means each Person from time to time party to the Receivables Purchase Agreement
as a “Seller.”

 

A-7

 

“Seller
Assignment Certificate” means an assignment by a Seller,
substantially in the form of Exhibit B to the Receivables Purchase
Agreement.

 

“Seller
Collections” shall have the meaning assigned to such term in the
Receivables Sale Agreement.

 

“Seller Noncomplying
Receivables Adjustments” is defined in Section 3.5(a) of
the Receivables Purchase Agreement.

 

“Solvent” means with
respect to any Person that as of the date of determination both (A)(i) the
then fair saleable value of the property of such Person is (y) greater
than the total amount of liabilities (including contingent liabilities) of such
Person and (z) not less than the amount that will be required to pay the
probable liabilities on such Person’s then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (ii) such Person’s capital is
not unreasonably small in relation to its business or any contemplated or
undertaken transaction; and (iii) such Person does not intend to incur, or
believe (nor should it reasonably believe) that it will incur, debts beyond its
ability to pay such debts as they become due; and (B) such Person is “solvent” within the meaning
given that term and similar terms under applicable laws relating to fraudulent
transfers and conveyances.  For purposes
of this definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

 

“Specified
Assets” is defined in Section 1.1 of the Receivables Purchase
Agreement.

 

“Subsidiary”
means, with respect to and Person, any corporation of which more than 50% of
the outstanding capital stock having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person.

 

“Tax or ERISA
Lien” means a lien arising under Section 6321 of the Internal
Revenue Code or Section 302(f) or 4068 of ERISA.

 

“Terminating
Seller” means any Seller that shall have given written notice to the
Buyer of its intention to terminate its obligation to sell to the Buyer its
Receivables and Related Assets.

 

“Transaction
Documents” shall have the meaning assigned to such term in the Receivables
Sale Agreement.

 

“UCC”
means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction or jurisdictions.

 

“Unpaid
Balance” of any Receivable means at any time the unpaid amount
thereof as shown in the books of Initial Collection Agent at such time.

 

A-8

 

“Write-Off”
means any Receivable that, consistent with the applicable Credit and Collection
Policy, has been written off as uncollectible.

 

Part B. Other Interpretative Matters.  For purposes of any Transaction Document
(including in this Appendix), unless otherwise specified therein: (1) accounting
terms used and not specifically defined therein shall be construed in
accordance with GAAP; (2) terms used in Article 9 of the New York
UCC, and not specifically defined in that Transaction Document, are used
therein as defined in such Article 9; (3) the term “including” means “including
without limitation,” and other forms of the verb “to include” have correlative
meanings; (4) references to any Person include such Person’s permitted
successors; (5) in the computation of a period of time from a specified
date to a later specified date, the word “from” means “from and including” and
the words “to” and “until” each means “to but excluding”; (6) the words “hereof”,
“herein” and “hereunder” and words of similar import refer to such Transaction
Document as a whole and not to any particular provision of such Transaction
Document; (7) the term “or” means “and/or”; (8) the meanings of defined
terms are equally applicable to the singular and plural forms of such defined
terms; (9) references to “Section”, “Schedule”, “Exhibit”, “Annex” and “Appendix” in
such Transaction Document are references to Sections, Schedules, Exhibits,
Annexes and Appendices in or to such Transaction Document; (10) the
various captions (including any table of contents) are provided solely for
convenience of reference and shall not affect the meaning or interpretation of
such Transaction Document; and (11) references to any statute or regulation
refer to that statute or regulation as amended from time to time, and include
any successor statute or regulation of similar import.

 

A-9Exhibit 10.86

 

EXECUTION VERSION

 

AMENDMENT NUMBER 1 TO RECEIVABLES PURCHASE AGREEMENT

 

THIS
AMENDMENT NUMBER 1, dated as of May 31, 2007 (as amended, restated or
otherwise modified from time to time, the “Amendment”)  to the AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of
September 28, 2006 (as amended, modified and supplemented from time to
time in accordance with its terms, the “Agreement”), is between and among CHEMTURA CORPORATION (as successor to Crompton &
Knowles Corporation) (“Chemtura”),
as the initial
collection agent (in such capacity, the “Initial Collection Agent”)  and as a seller, BIO-LAB, INC., (“Bio-Lab”)  and GREAT LAKES CHEMICAL CORPORATION (“Great Lakes”;  each of Chemtura, Bio-Lab, and Great Lakes, a “Seller”), HATCO CORPORATION, a New Jersey corporation (“Hatco”), ANDEROL, INC., a New Jersey corporation (“Anderol”)  (each of Hatco and Anderol, an “Additional Seller”  and collectively, the “Additional Sellers”)  and CROMPTON & KNOWLES RECEIVABLES CORPORATION, a Delaware
corporation (the “Buyer”),
and is consented to
by ABN AMRO BANK N.V. (the “Agent”).

 

W I T N E S S E T H:

 

WHEREAS,
the Sellers and the Buyer have previously entered into and are currently party
to the Agreement pursuant to which the Sellers agreed to sell to Buyer, and
Buyer agreed to buy from each such entity, all of the Receivables and Related
Assets generated by each such entity;

 

WHEREAS,
pursuant to the Fourth Amended and Restated Receivables Sale Agreement, dated
as of September 28, 2006, among the Buyer, the Initial Collection Agent,
Amsterdam Funding Corporation (“Amsterdam”), Atlantic Asset Securitization LLC
(“Atlantic”), Variable Funding Capital Company, LLC (“VFCC”), ABN AMRO Bank
N.V. as the Agent and as Amsterdam Purchaser Agent, Wachovia Bank, National
Association, as the VFCC Purchaser Agent, Calyon New York Branch as the
Atlantic Purchaser Agent, the other Purchaser Agents from time to time party
thereto, the Related Bank Purchasers from time to time party thereto and the
other Conduit Purchasers from time to time party thereto (as amended, restated
or otherwise modified from time to time in accordance with its terms, the “Sale
Agreement”),  the Buyer has transferred to the Purchaser
Agents, for the benefit of the Conduit Purchasers and the Related Bank
Purchasers, all of Buyer’s right, title and interest in and to the Agreement,
including, without limitation, interests in the Receivables sold to Buyer
pursuant thereto;

 

WHEREAS,
the parties hereto desire to add each of Hatco and Anderol as a Seller under
the Agreement effective as of May 31, 2007;

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

 

SECTION 1.  Defined Terms.
Unless otherwise amended by the terms of this Agreement, terms used in this
Amendment shall have the meanings assigned in the Agreement, or if not defined
therein, in the Sale Agreement.

 

 

SECTION 2.  Amendments
to Agreement.

 

(a)           As contemplated by Section 10.1
of the Agreement, each of the parties hereto agrees that effective as of May 31,
2007 (the “Effective Date”), each
of Hatco and Anderol agrees to sell, transfer, assign, set over and otherwise
convey to the Buyer, and the Buyer agrees to purchase from each of Hatco and
Anderol, all Receivables and other Related Purchased Assets originated by Hatco
and Anderol.

 

(b)           From and after the
Effective Date, each of Hatco and Anderol shall be a “Seller”  under the Agreement. In addition,
from and after the Effective Date, each of Hatco and Anderol hereby agrees to
be bound by all of the terms and conditions applicable to a Seller contained in
the Agreement and the other Transaction Documents.

 

(c)           In connection with
the execution and delivery of this Amendment, each of Hatco and Anderol hereby
makes, with respect to itself, the representations and warranties set forth in Section 5.1
of the Agreement; provided that,  such
representations and warranties are made as of the Effective Date hereof,
notwithstanding any other date set forth in Section 5.1.

 

Hatco
is a corporation organized under the laws of the State of New Jersey. The chief
executive office of Hatco is located at 1020 King George Post Road, Fords, New
Jersey 08863. Hatco has no trade names and has not conducted business under any
other name since the date of its incorporation other than Hatco Chemical
Corporation and Farben Corporation.

 

Anderol
is a corporation organized under the laws of the State of New Jersey. The chief
executive office of Anderol is located at 215 Merry Lane, East Hanover, NJ
07936. Anderol has no trade names other than Royal Lubricants and has not
conducted business under any other name since the date of its incorporation
other than RLI Acquisition, Inc. and Royal Lubricants, Inc.

 

SECTION 3.  Effectiveness
of Agreement. Except as expressly amended by the terms of this Amendment,
all terms and conditions of the Agreement, as amended, shall remain in full
force and effect.

 

SECTION 4.  Execution
in Counterparts, Effectiveness. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be executed by the
parties hereto and be deemed an original and all of which shall constitute
together but one and the same agreement.

 

SECTION 5.  Governing
Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICT OF LAW PRINCIPLES, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

[Signatures Follow]

 

 

IN
WITNESS WHEREOF, Chemtura, as the Initial Collection Agent, the Sellers, Hatco,
Anderol, the Buyer and the Agent have caused this Amendment Number 1 to the
Receivables Purchase Agreement to be executed by their respective officers
thereunto duly authorized as of the day and year first above written.

 

	
   

  	
  CHEMTURA CORPORATION (as successor to Crompton

  
	
   

  	
  &
  Knowles Corporation),

  
	
   

  	
  as
  Initial Collection Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  199
  Benson Road

  
	
   

  	
   

  	
  Middlebury,
  Connecticut 06749

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HATCO
  CORPORATION, as Seller

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  1020
  King George Post Road

  
	
   

  	
   

  	
  Fords,
  New Jersey, 08863

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ANDEROL,
  INC., as Seller

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  215
  Merry Lane

  
	
   

  	
   

  	
  East
  Hanover, New Jersey 07936

  
										

 

AMENDMENT 1 TO A&R RECEIVABLES PURCHASE AGREEMENT

 

 

	
   

  	
  GREAT
  LAKES CHEMICAL CORPORATION, as Seller

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  199
  Benson Road

  
	
   

  	
   

  	
  Middlebury,
  Connecticut 06749 

  
	
   

  	
  Attention:

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BIO-LAB, INC., as Seller

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  199
  Benson Road

  
	
   

  	
   

  	
  Middlebury,
  Connecticut 06749

  
	
   

  	
  Attention:

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CROMPTON &
  KNOWLES RECEIVABLES 

  
	
   

  	
  CORPORATION,

  
	
   

  	
  as
  the Buyer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  199
  Benson Road

  
	
   

  	
   

  	
  Middlebury,
  Connecticut 06749

  
								

 

AMENDMENT 1 TO A&R RECEIVABLES PURCHASE
AGREEMENT

 

 

	
  CONSENTED
  TO AND AGREED BY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ABN
  AMRO BANK N.V.,

  	
   

  
	
  as
  Agent and as Purchaser Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ DAVID J. DONOFRIO

  	
   

  
	
   

  	
  DAVID J. DONOFRIO

  	
   

  
	
  Title:

  	
  DIRECTOR

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  540
  West Madison

  	
   

  
	
   

  	
  Chicago,
  IL 60661

  	
   

  
							

 

AMENDMENT 1 TO A&R RECEIVABLES PURCHASE
AGREEMENT

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