8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): December 17, 2003

Equistar Chemicals, LP

(Exact name of registrant as specified in its charter)

Delaware	333-76473	76-0550481
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation)	File Number)	Identification No.)

1221 McKinney Street

Suite 700, Houston, Texas 77010

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: 713-652-7200

Item 5. Other Events.

On December 17, 2003 Equistar Chemicals, LP (“Equistar”) announced the closing of its previously announced $450 million, four-year accounts receivable sales facility and $250 million, four-year inventory-based revolving credit facility. Equistar’s December 17, 2003 press release regarding the closing of these transactions is being filed with this Current Report on Form 8-K as Exhibit 99.1.

Item 7. Financial Statements and Exhibits.

(c) Exhibits.

4.6	(b)	First Supplemental Indenture dated as of November 21, 2003 among Equistar Chemicals, LP, Equistar Funding Corporation and The Bank of New York, as Trustee, to the Indenture dated as of April 22, 2003 (filed as an exhibit to Equistar’s Registration Statement No. 333-111134 and incorporated herein by reference)
4.7		Credit Agreement dated as of December 17, 2003 among Equistar Chemicals, LP, the subsidiaries of Equistar Chemicals, LP parties thereto, the lenders party thereto, Bank One, NA, Credit Suisse First Boston and JP Morgan Chase Bank as Co-Documentation Agents, Bank of America, N.A. and Citicorp USA, Inc. as Co-Collateral Agents, and Citicorp USA, Inc. as Administrative Agent
4.8		Security Agreement dated as of December 17, 2003 among Equistar Chemicals, LP, the other borrowers and guarantors party thereto, and Citicorp USA, Inc. as Administrative Agent
4.9		Receivables Purchase Agreement dated as of December 17, 2003 among Equistar Receivables II, LLC as the seller, Equistar Chemicals, LP as the servicer, the banks and other financial institutions party thereto as purchasers, Bank One, NA, Credit Suisse First Boston and JP Morgan Chase Bank as Co-Documentation Agents, Citicorp USA, Inc. and Bank of America, N.A. as Co-Asset Agents, Citicorp USA, Inc. as Administrative Agent, and Citigroup Global Markets Inc. and Banc of America Securities LLC as Joint Lead Arrangers and Joint Bookrunners
4.10		Undertaking Agreement dated as of December 17, 2003 by Equistar Chemicals, LP
99.1		Press Release

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Equistar Chemicals, LP
By:	/s/ Charles L. Hall
	Charles L. Hall
	Vice President, Controller and
	Chief Accounting Officer

Date: December 19, 2003

INDEX TO EXHIBITS

Exhibit Number		Description
4.6	(b)	First Supplemental Indenture dated as of November 21, 2003 among Equistar Chemicals, LP, Equistar Funding Corporation and The Bank of New York, as Trustee, to the Indenture dated as of April 22, 2003 (filed as an exhibit to Equistar’s Registration Statement No. 333-111134 and incorporated herein by reference)
4.7		Credit Agreement dated as of December 17, 2003 among Equistar Chemicals, LP, the subsidiaries of Equistar Chemicals, LP parties thereto, the lenders party thereto, Bank One, NA, Credit Suisse First Boston and JP Morgan Chase Bank as Co-Documentation Agents, Bank of America, N.A. and Citicorp USA, Inc. as Co-Collateral Agents, and Citicorp USA, Inc. as Administrative Agent
4.8		Security Agreement dated as of December 17, 2003 among Equistar Chemicals, LP, the other borrowers and guarantors party thereto, and Citicorp USA, Inc. as Administrative Agent
4.9		Receivables Purchase Agreement dated as of December 17, 2003 among Equistar Receivables II, LLC as the seller, Equistar Chemicals, LP as the servicer, the banks and other financial institutions party thereto as purchasers, Bank One, NA, Credit Suisse First Boston and JP Morgan Chase Bank as Co-Documentation Agents, Citicorp USA, Inc. and Bank of America, N.A. as Co-Asset Agents, Citicorp USA, Inc., as Administrative Agent, and Citigroup Global Markets Inc. and Banc of America Securities LLC as Joint Lead Arrangers and Joint Bookrunners
4.10		Undertaking Agreement dated as of December 17, 2003 by Equistar Chemicals, LP
99.1		Press Release

EX-4.7

Exhibit 4.7

[Execution Copy]

$250,000,000

CREDIT AGREEMENT

Dated as of December 17, 2003

among

EQUISTAR CHEMICALS, LP,

and

THE SUBSIDIARIES

OF EQUISTAR CHEMICALS, LP

PARTY HERETO,

as Co-Borrowers

THE LENDERS PARTY HERETO,

BANK ONE, NA,

CREDIT SUISSE FIRST BOSTON

and

JPMORGAN CHASE BANK

as Co-Documentation Agents,

BANK OF AMERICA, N.A.,

and

CITICORP USA, INC.,

as Co-Collateral Agents

and

CITICORP USA, INC.,

as Administrative Agent

CITIGROUP GLOBAL MARKETS INC.

and

BANC OF AMERICA SECURITIES LLC,

Joint Lead Arrangers and Joint Bookrunners

TABLE OF CONTENTS

		PAGE
ARTICLE 1
DEFINITIONS
Section 1.01.	Definitions	1
Section 1.02.	Accounting Terms	36
Section 1.03.	Terms Generally	37
Section 1.04.	Classification of Loans and Borrowings	37
ARTICLE 2
THE LOANS
Section 2.01.	Commitments	37
Section 2.02.	Loans	37
Section 2.03.	Notice of Borrowings	39
Section 2.04.	Conversions and Continuations	40
Section 2.05.	Swingline Loans	41
Section 2.06.	Letters of Credit	42
Section 2.07.	Fees	48
Section 2.08.	Maturity of Loans; Mandatory Prepayments	49
Section 2.09.	Evidence of Debt	51
Section 2.10.	Interest on Loans	52
Section 2.11.	Interest on Overdue Amounts; Alternative Rate of Interest	52
Section 2.12.	Termination and Reduction of Commitments and Swingline Facility	53
Section 2.13.	Optional Prepayment of Loans	54
Section 2.14.	Reserve Requirements; Change in Circumstances	54
Section 2.15.	Change in Legality	56
Section 2.16.	Indemnity	57
Section 2.17.	Pro Rata Treatment	58
Section 2.18.	Sharing of Setoffs	59
Section 2.19.	Taxes	59
Section 2.20.	Duty to Mitigate; Assignment of Commitments Under Certain Circumstances	61
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.01.	Organization	62
Section 3.02.	Authorization	62
Section 3.03.	Absence of Conflicts	62
Section 3.04.	Governmental Approvals	63
Section 3.05.	Enforceability	63

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Section 3.06.	Financial Statements	63
Section 3.07.	Material Adverse Effect	64
Section 3.08.	Litigation	64
Section 3.09.	Compliance with Law and Agreements.	64
Section 3.10.	Federal Reserve Regulations	65
Section 3.11.	Tax Returns	65
Section 3.12.	Employee Benefit Plans	65
Section 3.13.	Accuracy Of Information	66
Section 3.14.	Investment Company Act; Public Utility Holding Company Act	66
Section 3.15.	Environmental and Safety Matters	67
Section 3.16.	Title to Properties	67
Section 3.17.	Collateral	67
Section 3.18.	Subsidiaries	67
Section 3.19.	Insurance	68
Section 3.20.	Labor Matters	68
Section 3.21.	Solvency	68
ARTICLE 4
CONDITIONS OF LENDING
Section 4.01.	All Borrowings	68
Section 4.02.	Effective Date	69
ARTICLE 5
AFFIRMATIVE COVENANTS
Section 5.01.	Existence	71
Section 5.02.	Business and Properties	71
Section 5.03.	Maintenance of Insurance	72
Section 5.04.	Payment of Taxes	72
Section 5.05.	Financial Statements, Reports, Etc	72
Section 5.06.	Borrowing Base Reports	75
Section 5.07.	Litigation and Other Notices, Etc	75
Section 5.08.	ERISA	76
Section 5.09.	Books of Accounts; Examination of Records; Audits	77
Section 5.10.	Compliance with Laws, Etc	77
Section 5.11.	Environmental Compliance	77
Section 5.12.	Information Regarding Collateral	77
Section 5.13.	Further Assurances	77
ARTICLE 6
NEGATIVE COVENANTS
Section 6.01.	Liens	80
Section 6.02.	Interest Coverage Ratio	84

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Section 6.03.	Merger, Etc	84
Section 6.04.	Organizational Documents; Change of Name; Change of Business	85
Section 6.05.	Use of Proceeds	85
Section 6.06.	Restrictive Agreements	86
Section 6.07.	Business Acquisitions	86
Section 6.08.	Affiliate Transactions	87
Section 6.09.	Hedging Agreements	88
Section 6.10.	Prepayment of Debt	88
Section 6.11.	Indebtedness	89
Section 6.12.	Restricted Payments	90
Section 6.13.	Restricted Investments	90
Section 6.14.	Capital Expenditures	91
ARTICLE 7
EVENTS OF DEFAULT
Section 7.01.	Events of Default	91
ARTICLE 8
ADMINISTRATIVE AGENT
ARTICLE 9
THE OBLIGORS
Section 9.01.	Appointment and Authorization of Borrowers’ Agent	97
Section 9.02.	Joint and Several Obligations	98
Section 9.03.	Contribution; Subordination	98
Section 9.04.	Limitation on Obligations of Subsidiary Borrowers	99
ARTICLE 10
MISCELLANEOUS
Section 10.01.	Notices	99
Section 10.02.	No Waivers; Amendments	100
Section 10.03.	Payments	102
Section 10.04.	Governing Law; Submission to Jurisdiction	103
Section 10.05.	Expenses; Documentary Taxes; Indemnity	104
Section 10.06.	Survival of Agreements, Representations and Warranties, Etc	105
Section 10.07.	Successors and Assigns	105
Section 10.08.	Right of Setoff	109
Section 10.09.	Severability	110
Section 10.10.	Cover Page, Table of Contents and Section Headings	110
Section 10.11.	Counterparts; Effectiveness	110
Section 10.12.	WAIVER OF JURY TRIAL	110

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Section 10.13.	Entire Agreement	111
Section 10.14.	Confidentiality	111
Section 10.15.	Limitation on Recourse to General Partners	112

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Schedules
Schedule 1.01	Existing Letters of Credit
Schedule 2.01	Lenders’ Commitments
Schedule 3.18	Subsidiaries
Schedule 3.19	Insurance
Schedule 6.06	Restrictive Agreements
Schedule 6.11	Outstanding Indebtedness (as of the Effective Date)
Schedule 6.13	Existing Investments
Schedule X	Eligible Billed not Shipped Inventory
Exhibits
Exhibit A	Form of Assignment and Acceptance
Exhibit B	Form of Revolving Borrowing Request
Exhibit C	Form of Monthly Borrowing Base Certificate
Exhibit D	Form of Letter of Credit Application
Exhibit E-1	Form of Opinion of Baker Botts L.L.P., Special Counsel for Equistar
Exhibit E-2	Form of Opinion of Gerald A. O’Brien, Esq., General Counsel of Equistar
Exhibit F	Form of Security Agreement
Exhibit G	Form of Borrower Designation
Exhibit H	Form of Collateral Access Agreement
Exhibit I	Form of Intercreditor Agreement

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CREDIT AGREEMENT dated as of December 17, 2003, among EQUISTAR CHEMICALS, LP, a Delaware limited partnership, and the SUBSIDIARIES of EQUISTAR CHEMICALS, LP from time to time party hereto; the LENDERS from time to time party hereto, initially consisting of those listed on Schedule 2.01 hereto; BANK ONE, NA, CREDIT SUISSE FIRST BOSTON and JPMORGAN CHASE BANK, as Co-Documentation Agents; CITICORP USA, INC. and BANK OF AMERICA, N.A., as Co-Collateral Agents; and CITICORP USA, INC., as Administrative Agent.

The Borrowers (such term and each other capitalized term used but not otherwise defined herein having the meaning assigned to it in Article 1) desire to borrow on a revolving basis an aggregate principal amount not in excess of $250,000,000. The proceeds of Borrowings on the Effective Date are to be used to refinance existing Indebtedness of Equistar and to pay related fees and expenses. The proceeds of Borrowings subsequent to the Effective Date are to be used for general partnership purposes otherwise permitted hereunder. The Lenders are willing to extend such credit to the Borrowers on the terms and subject to the conditions set forth herein.

Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions. As used in this Agreement, the following terms shall have the meanings specified below:

“ABR Borrowing” shall mean a Borrowing comprised of ABR Loans.

“ABR Loan” shall mean any Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with Article 2.

“Access Agreement” shall mean an agreement, in form and substance reasonably acceptable to the Administrative Agent, pursuant to which a holder of a Lien on premises of the Borrowers where Eligible Inventory is located agrees and acknowledges, among other things, that the Administrative Agent may without interference from such Lien holder (i) gain access to, remove and exercise its rights against any Inventory located at such premises after an Event of Default, and that such Lien holder may not remove or exercise any remedies against such Inventory except as agreed, (ii) for a period of time not less than 90 days (or such shorter time period as the Administrative Agent may agree in its sole discretion) after the Administrative Agent shall have taken possession of such Inventory, (A) store such Inventory at such premises and (B) conduct a sale of such Inventory at such premises and (iii) examine and make copies of books and records of the Borrowers located at such premises with respect to such Inventory.

“Additional Letter of Credit” shall mean a letter of credit issued hereunder by the Fronting Bank on or after the Effective Date.

“Adjusted LIBO Rate” means, with respect to any Interest Period for any LIBOR Loan, an interest rate per annum equal to the rate per annum obtained by dividing (a) the LIBO Rate by (b) a percentage equal to (i) 100% minus (ii) the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including “Eurocurrency liabilities” (or with respect to any other category of liabilities that includes deposits by reference to which the LIBO Rate is determined) having a term equal to such Interest Period.

“Administrative Agent” shall mean Citicorp USA, Inc., in its capacity as administrative agent for the Lenders under the Loan Documents, and its successors in such capacity.

“Administrative Fees” shall have the meaning assigned to such term in Section 2.07(c).

“Administrative Questionnaire” shall mean, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent, completed by such Lender and returned to the Administrative Agent.

“Affiliate” shall mean, with respect to any Person, any other Person which directly or indirectly controls, is under common control with or is controlled by such Person. As used in this definition, “control” (including, with correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). As used with reference to Equistar and its Subsidiaries, “Affiliate” shall include any Partner and any Affiliate of any Partner.

“Agent” shall mean any of the Administrative Agent, the Co-Collateral Agents and the Co-Documentation Agents, and “Agents” shall mean any two or more of the foregoing.

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“Alternate Base Rate” shall mean, for any period, a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall be equal at all times to the highest of the following:

(a) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate (or equivalent rate otherwise named);

(b) the sum (adjusted to the nearest 0.25% or, if there is no nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum, (ii) the rate per annum obtained by dividing (A) the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if any such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from 3 New York certificate of deposit dealers of recognized standing selected by Citibank, by (B) a percentage equal to 100% minus the average of the daily percentages specified during such three-week period by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for Citibank in respect of liabilities consisting of or including (among other liabilities) three-month U.S. dollar nonpersonal time deposits in the United States and (iii) the average during such three-week period of the maximum annual assessment rates estimated by Citibank for determining the then current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation (or any successor) for insuring Dollar deposits in the United States; and

(c) 0.5% per annum plus the Federal Funds Effective Rate.

“Applicable L/C Margin” shall mean (a) for the initial period commencing on the Effective Date and ending on the last day of the calendar month in which the Administrative Agent receives unaudited financial statements of Equistar and its Consolidated Subsidiaries as of, and for the fiscal quarter ending, June 30, 2004 in accordance with and satisfying the requirements of Section 5.05(b), 2.25% per annum, and (b) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

AVERAGE MONTHLY EXCESS AVAILABILITY	APPLICABLE L/C MARGIN
Greater than or equal to $600,000,000	2.00	%
Less than $600,000,000 and greater than or equal to $300,000,000	2.25	%
Less than $300,000,000	2.50	%

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provided, however, that upon the occurrence and during the continuance of an Event of Default, the “Applicable L/C Margin” shall be the sum of the otherwise applicable rate set forth in the table above plus 2.00% per annum. Changes in the Applicable L/C Margin resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective as to all outstanding Letters of Credit on the first day of the next calendar month.

“Applicable Lending Office” shall mean, with respect to each Lender, (i) such Lender’s domestic lending office in the case of an ABR Loan or (ii) such Lender’s LIBOR Lending Office in the case of a LIBOR Loan.

“Applicable Margin” shall mean (a) for the initial period commencing on the Effective Date and ending on the last day of the calendar month in which the Administrative Agent receives unaudited financial statements of Equistar and its Consolidated Subsidiaries as of, and for the fiscal quarter ending, June 30, 2004 in accordance with and satisfying the requirements of Section 5.05(b), in the case of ABR Loans, 1.50% per annum and, in the case of LIBOR Loans, 2.50% per annum; and (b) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

AVERAGE MONTHLY EXCESS AVAILABILITY	ABR LOANS		LIBOR LOANS
Greater than or equal to $600,000,000	1.25	%	2.25	%
Less than $600,000,000 and greater than or equal to $300,000,000	1.50	%	2.50	%
Less than $300,000,000	1.75	%	2.75	%

provided, however, that upon the occurrence and during the continuance of an Event of Default, the “Applicable Margin” shall be the sum of the otherwise applicable rate set forth in the table above for ABR Loans or LIBOR Loans, as the case may be, plus 2.00% per annum. Changes in the Applicable Margin resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective as to all Loans on the first day of the next calendar month.

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“Appraisal Report” shall mean any appraisal report reasonably satisfactory to the Administrative Agent and prepared by independent consultants selected by the Administrative Agent and reasonably satisfactory to the Borrowers.

“Arranger” shall mean each of Citigroup Global Markets Inc. and Banc of America Securities LLC, in its capacity as a joint lead arranger and joint bookrunner in respect of this Agreement.

“Asset Sale” shall mean any sale, lease or other disposition (including any such transaction effected by way of merger or consolidation) by Equistar or any of its Subsidiaries of any asset, whether or not involving a capital lease, but excluding (a) dispositions of inventory or equipment in the ordinary course of business, (b) dispositions of Temporary Cash Investments and cash payments otherwise permitted under this Agreement (including Permitted Dividends), (c) dispositions to Equistar or a Subsidiary of Equistar, (d) dispositions constituting mergers or consolidations permitted by Section 6.03(b), (e) dispositions constituting Investments permitted by Section 6.13 (except as provided below), (f) dispositions of any fixed or capital asset pursuant to a Sale/Leaseback Transaction, (g) dispositions constituting Liens permitted by Section 6.01 and (h) dispositions pursuant to the Securitization Facility. To the extent that, in connection with (x) an Investment by Equistar or a Subsidiary in a joint venture or (y) a reduction in the proportionate interest of Equistar or a Subsidiary in a joint venture, Equistar or a Subsidiary receives Net Cash Proceeds (determined as if such transaction were an Asset Sale), then such transaction shall be treated as an Asset Sale to the extent of such Net Cash Proceeds.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an assignee, substantially in the form of Exhibit A.

“Availability Reserves” shall mean, as of any date of determination and without duplication of any Valuation Reserves or any other Availability Reserves, such reserves in amounts as the Administrative Agent may from time to time establish (upon five Business Days’ notice to the Borrowers in the case of new reserve categories established after the Effective Date and changes in the methodology for determining a reserve and upon one Business Day’s notice to the Borrowers in other cases) and revise (upward or downward based upon existing methodology): (i) to reflect events, conditions, contingencies or risks which, as reasonably determined by the Administrative Agent, do or are reasonably likely to materially adversely affect either (a) Eligible Inventory or its value or (b) the

5

security interests and other rights of any Agent or Lender in the Collateral other than Ineligible Inventory (including the enforceability, perfection and priority thereof) or (ii) to reflect the Administrative Agent’s reasonable belief that any collateral report or financial information furnished by or on behalf of the Borrowers is or may have been incomplete, inaccurate or misleading in any material respect in a manner which adversely affects one or more components of the Borrowing Base to an extent greater than that otherwise contemplated in the determination thereof (such reserve to remain applicable for so long as such adverse effect remains applicable) or (iii) in respect of any state of facts that the Administrative Agent reasonably determines constitutes a Default or an Event of Default and that adversely affects one or more components of the Borrowing Base to an extent greater than that otherwise contemplated in the determination thereof (such reserve to remain applicable for so long as such adverse effect remains applicable); provided that, at any date of determination (unless and until otherwise determined by the Administrative Agent), “Availability Reserves” shall include (a) a reserve equal to three times the most recently reported monthly aggregate amount of charges by a landlord, bailee, consignee, processor, warehouseman or other third-party who stores, processes, maintains or holds Eligible Inventory and applicable rail car lease and transportation expense as determined by Equistar (but excluding any such expense as to which the rights of the payee are subject to a Third Party Agreement), (b) a reserve for deductibles applicable to the Borrowers’ insurance policies covering Eligible Inventory, (c) a reserve for other credit exposures secured by the Collateral (other than credit exposures secured exclusively by Ineligible Inventory) including Derivative Obligations and obligations arising out of cash management arrangements related to this Agreement and (d) a reserve for any Liens on Eligible Inventory (or on premises of the Borrowers where Eligible Inventory is located (other than (x) Liens of the type described in clauses (8), (9) and, without limiting the applicability of an Availability Reserve under clause (a) above, (27) of the definition of “Permitted Liens” in the 2001 Indenture (as in effect on the Effective Date, whether or not such Indenture is in effect at the time in question) on such premises and (y) nonconsensual Liens on such premises that do not impair access to, or the removal of or exercise of remedies in respect of, such Inventory)) unless the rights of the holder of such Lien are subject to a Third Party Agreement (such reserve not to exceed the lesser of (i) the amount of the affected Eligible Inventory and (ii) the amount of the obligations secured by such holder’s Lien).

“Available Inventory” shall mean, at any time, the lesser of (i) 70% of each Category of Eligible Inventory and (ii) the product of (x) 85% of the Orderly Liquidation Value Rate multiplied by (y) each Category of Eligible Inventory.

“Average Monthly Excess Availability” shall mean, for any calendar month, the sum, without duplication, of (i) the average daily Total Excess Availability plus (ii) the average daily unrestricted cash of Equistar and its Subsidiaries (as determined by Equistar from treasury records on a non-GAAP basis), in each case for such calendar month.

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“Board” shall mean the Board of Governors of the Federal Reserve System of the United States.

“Borrower” shall mean each of Equistar and any other Loan Party that (i) is not a Foreign Subsidiary and (ii) Equistar designates as a Borrower for purposes hereof by delivery to the Administrative Agent of an instrument in substantially the form of Exhibit G duly executed by Equistar and such Loan Party.

“Borrowers’ Agent” shall mean Equistar, in its capacity as agent for the Borrowers under the Loan Documents, and its successors in such capacity.

“Borrowing” shall mean (a) a Loan or group of Loans of a single Class and Type made by the Lenders on a single date and as to which a single Interest Period is in effect or (b) a Swingline Loan.

“Borrowing Base” shall mean, at any time, subject to adjustment as provided in Section 5.13(b)(iii), an amount equal to the sum of (i) (x) Available Inventory as reflected in the most recent Borrowing Base Certificate delivered pursuant to Section 5.06 less (y) Availability Reserves at such time plus (ii) Cash Collateral at such time. Standards of eligibility and reserves and advance rates of the Borrowing Base may be revised and adjusted from time to time by the Administrative Agent (subject to Section 10.02(b) hereof and to any limitations herein expressly made applicable to the exercise of such rights) upon one Business Day’s notice to the Borrowers; provided that any such changes in such standards or in advance rates shall not be effective until five Business Days after giving notice thereof to the Borrowers. Actions by the Administrative Agent pursuant to the preceding sentence, and all other actions by the Administrative Agent in respect of the determination of the Borrowing Base (including as provided in the definitions of Availability Reserves, Ineligible Inventory and Valuation Reserves), shall be taken by it in the good faith exercise of its discretion in a manner consistent with its customary credit policies for asset-based credit facilities.

“Borrowing Base Certificate” shall mean a certificate, appropriately completed and substantially in the form of Exhibit C (with such modifications as to format and presentation as may be reasonably requested by the Administrative Agent upon five Business Days’ notice) together with all attachments and supporting documentation (i) as contemplated thereby and (ii) as outlined on Schedule 1 to Exhibit C.

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“Borrowing Request” shall mean a request made pursuant to Section 2.03 in the form of Exhibit B.

“Business Acquisition” shall mean (i) an Investment by Equistar or any of its Subsidiaries in any other Person (including an Investment by way of acquisition of securities of any other Person) pursuant to which such other Person shall become a Subsidiary or shall be merged into or consolidated with Equistar or any of its Subsidiaries or (ii) an acquisition by Equistar or any of its Subsidiaries of the property and assets of any Person (other than Equistar or any of its Subsidiaries) that constitute substantially all the assets of such Person or any division or other business unit of such Person. The formation by Equistar or any of its Subsidiaries of a new Subsidiary shall not, in and of itself, constitute a Business Acquisition.

“Business Day” shall mean any day which is not a Saturday, Sunday or legal holiday in the State of New York or the State of Texas on which banks are open for business in New York City and Houston; provided, however, that when used in connection with a LIBOR Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in deposits in Dollars in the London interbank market.

“Capital Expenditures” shall mean, for Equistar and its Consolidated Subsidiaries for any fiscal year, the aggregate cash expenditures for property, plant and equipment of Equistar and its Consolidated Subsidiaries for such fiscal year, as the same are (or would in accordance with GAAP be) set forth in a statement of cash flows of such Person for such fiscal year; provided that “Capital Expenditures” shall exclude (i) expenditures of property and casualty insurance or any award or other compensation with respect to any condemnations of property (or any transfer or disposition of property in lieu of condemnation) and related insurance deductibles, (ii) capital expenditures resulting from the acquisition of rolling stock and related accessories, additions, improvements, parts and replacements leased by Equistar and/or its Consolidated Subsidiaries under railcar operating leases at September 30, 2003 and (iii) Business Acquisitions.

“Capitalized Lease Obligations” of any Person shall mean obligations of such Person and its consolidated subsidiaries to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real and/or personal property, which obligations are accounted for as a capital lease on the consolidated balance sheet of such Person, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Collateral” shall mean cash on deposit in, and Liquid Investments held in, the Cash Collateral Account.

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“Cash Collateral Account” shall have the meaning specified in the Security Agreement.

“Category” shall mean any of the categories of inventory classification set forth in Exhibit C.

A “Change in Control” shall occur if at any time:

(a) members of the Existing Control Group shall cease to own in the aggregate, through ownership by one or more of them, partnership interests representing more than 50% of the total equity interest and voting power of Equistar;

(b) partnership interests representing in aggregate more than 25% of the total equity interests or voting power of Equistar are transferred to Persons other than the members of the Existing Control Group which transferees do not have (and are not subsidiaries of parents that have) senior unsecured credit ratings from S&P and Moody’s (or if the senior unsecured debt of such transferees or parents is not rated by such agencies, such transferees do not provide opinions from such rating agencies that such transferees or parents could reasonably be expected to obtain senior unsecured credit ratings from such agencies) of at least the lower of (x) BBB- and Baa3 or (y) the senior unsecured debt ratings of the transferor (or its parent);

(c) any Person other than a member of the Existing Control Group shall acquire (i) the right directly or indirectly to exercise a substantial portion of the powers of Lyondell to act on behalf of the Partnership Governance Committee and of the representatives of Lyondell on the Partnership Governance Committee, in each case, as in effect on the Effective Date or (ii) the right directly or indirectly to exercise a substantial portion of the rights and powers of the Partnership Governance Committee with respect to matters that require unanimous consent under the Limited Partnership Agreement as in effect on the date hereof without the need for the consent of a member of the Existing Control Group; or

(d) any mandatory repayment or mandatory offer to purchase under the Indentures occurs or is required as a result of the occurrence of a “Change of Control” (or similar term).

“Citibank” shall mean Citibank, N.A., a national banking association, and its successors.

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“Class”, when used in respect of any Loan or Borrowing, shall refer to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.

“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time.

“Collateral” shall mean any and all “Collateral”, as defined in any applicable Collateral Document.

“Collateral Access Agreement” shall mean an agreement substantially in the form of Exhibit H.

“Collateral Availability” shall mean, at any time, an amount equal to (i) the Borrowing Base at such time, less (ii) the Total Outstandings at such time.

“Co-Collateral Agent” shall mean each of Citicorp USA, Inc. and Bank of America, N.A., in its capacity as co-collateral agent in respect of the Loan Documents.

“Co-Documentation Agent” shall mean each of Bank One, NA, Credit Suisse First Boston and JPMorgan Chase Bank, in its capacity as co-documentation agent in respect of the Loan Documents.

“Collateral Documents” shall mean the Security Agreement and any additional security or control documentation delivered or required to be delivered pursuant to the Loan Documents to secure the Obligations or the “Secured Obligations” as defined in any such Loan Document.

“Collateral Requirement” shall mean the requirement that:

(a) the Administrative Agent shall have received a counterpart of the Security Agreement duly executed and delivered on behalf of each Loan Party;

(b) the Administrative Agent shall have “control” (within the meaning of Section 8-106 of the Uniform Commercial Code) of all outstanding Equity Interests of Equistar Receivables;

(c) all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create the Liens intended to be created by the Collateral Documents and perfect or record such Liens to the extent, and with the priority, required by the Loan Documents, shall have been filed, registered or recorded;

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(d) each Loan Party shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery of all Collateral Documents to which it is a party, the performance of its obligations thereunder and the granting of the Liens granted by it thereunder;

(e) each Loan Party shall have taken all other action required under the Collateral Documents to perfect, register and/or record the Liens granted by it thereunder;

(f) each Restricted Account contemplated by the Security Agreement shall have been established, and the Administrative Agent shall have “control” (within the meaning of Section 9-104 of the UCC) of the Inventory Concentration Account, the Sweep Account and the Cash Collateral Account;

(g) the Administrative Agent shall have received a favorable written opinion of counsel to the Loan Parties addressed to the Administrative Agent and the Lenders covering the matters set forth in paragraphs 5 and 6 of Exhibit E-1; and

(h) the Administrative Agent shall have received a fully executed copy of the Intercreditor Agreement.

“Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.12 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.07. The amount of each Lender’s Commitment as of the Effective Date is set forth on Schedule 2.01, as reduced or increased by any subsequent Assignment and Acceptance, as applicable, or, in the case of any new Lender, in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as reduced or increased by any subsequent Assignment and Acceptance, as applicable. The aggregate amount of the Lenders’ Commitments on the Effective Date is $250,000,000.

“Confidential Information Memorandum” shall mean the Confidential Information Memorandum dated November 2003 relating to Equistar and the transactions contemplated herein.

“consolidated” shall mean, with respect to any Person, the consolidation of accounts of such Person and its Subsidiaries in accordance with GAAP.

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“Consolidated Net Tangible Assets” shall mean the total amount of assets of Equistar and its Consolidated Subsidiaries (less applicable reserves and other properly deductible items) after deducting therefrom (a) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed), and (b) all goodwill, tradenames, trademarks, patents, purchased technology, unamortized debt discount and other like intangible assets, all as set forth on the most recent consolidated financial statements of Equistar delivered to the Lenders pursuant to Section 3.06 or 5.05 and computed in accordance with GAAP.

“Consolidated Subsidiary” shall mean at any date any Subsidiary the accounts of which would in accordance with GAAP be consolidated with those of Equistar in its consolidated financial statements if such statements were prepared as of such date.

“Constituent Documents” shall mean, with respect to any Person, (a) the articles of incorporation, certificate of incorporation or certificate of formation (or the equivalent organizational documents) of such Person, (b) the by laws, partnership agreement or operating agreement (or the equivalent governing documents) of such Person and (c) any document setting forth the manner of election and duties of the directors, general partners or managing members of such Person (if any) and the designation, amount or relative rights, limitations and preferences of any class or series of such Person’s Stock.

“Credit Event” shall mean any Borrowing (including a Borrowing resulting from a conversion or continuation of Loans pursuant to Section 2.04) or any issuance, amendment, renewal or extension of a Letter of Credit.

“Credit Exposure” shall mean, with respect to any Lender at any time, such Lender’s Commitment at such time or, if the Commitments shall have been terminated, such Lender’s Outstandings at such time.

“Default” shall mean any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would constitute an Event of Default.

“Derivative Obligations” shall have the meaning specified in Section 1 of the Security Agreement.

“Dollars” or “$” shall mean lawful currency of the United States of America.

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“EBITDA” shall mean, with respect to Equistar and its Consolidated Subsidiaries for any period, Net Income for such period plus, to the extent deducted in determining such Net Income and without duplication, (x)(i) interest expense (and, to the extent not otherwise included in interest expense, all “Yield” (or similar return) accrued under the Securitization Facility), income tax expense and depreciation, amortization and other similar non-cash charges and (ii) asset write-downs and other restructuring charges which are not cash costs, in each case for such period, and, in the case of non-cash charges, not exceeding $250,000,000 in the aggregate, and (y) any gain or loss realized for such period in connection with Asset Sales or other dispositions not in the ordinary course of business; provided that, in the case of clause (x)(ii), if any such charge represents a cash payment in any future period, such cash payment shall be deducted when calculating EBITDA for such future period.

“Effective Date” shall mean the date, on or before December 19, 2003, on which all the conditions specified in Section 4.02 shall have been satisfied (or waived in accordance with Section 10.02).

“Effective Date Fees” shall have the meaning assigned to such term in Section 2.07(d).

“Eligible Inventory” shall mean at any date of determination thereof an amount equal to (i) the aggregate value (as reflected on the books and records of the Borrowers and consistent with the Borrowers’ current and historical accounting practices) at such date of all Inventory in each Category owned by the Borrowers, adjusted on any date of determination to exclude, without duplication, all Inventory that is Ineligible Inventory, minus (ii) all Valuation Reserves (or, if the context so requires, Eligible Inventory shall mean the related Inventory).

“Environmental and Safety Laws” shall have the meaning assigned to such term in Section 3.15.

“Environmental Liability” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of Equistar or any Subsidiary directly or indirectly which arise under or relate to matters covered by Environmental and Safety Laws.

“Equistar” shall mean Equistar Chemicals, LP, a Delaware limited partnership, and its successors.

“Equistar Funding” shall mean Equistar Funding Corporation, a Delaware corporation, and its successors.

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“Equistar GP” shall mean any general partner of Equistar.

“Equistar Receivables” shall mean Equistar Receivables II, LLC, a Delaware limited liability company (or a similar special purpose entity established in connection with a successor Securitization Facility), and its successors.

“Equity Interests” shall mean, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

“Equity Refinancing” shall mean the repurchase, redemption, retirement or other acquisition by Equistar of Equity Interests in Equistar, an Affiliate of Equistar or a Joint Venture (or the acquisition of any outstanding Equity Interests of a Person, the majority of whose assets are Equity Interests) exclusively in exchange for, or out of the net cash proceeds of a substantially contemporaneous issuance by Equistar of, Equity Interests in Equistar which do not constitute Indebtedness (including a capital contribution in respect of such Equity Interests).

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with any Borrower, is treated as a single employer under Section 414 of the Code.

“Event of Default” shall have the meaning specified in Article 7.

“Excess Availability” shall mean, at any time, an amount equal to (i) the Maximum Facility Availability at such time, less (ii) the Total Outstandings at such time.

“Excluded Taxes” shall mean, with respect to any Agent, any Lender, the Fronting Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) income, franchise or doing business taxes imposed on (or measured by) its net income, or bank share taxes, imposed by the United States of America, or by the jurisdiction under the laws of

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which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrowers under Section 2.20(b)) any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.19(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to Section 2.19(a).

“Existing Control Group” shall mean Lyondell, Millennium and Occidental, the successor of any member of the Existing Control Group (including any entity that is a party to any merger or business combination transaction to which such member shall be a party; provided that immediately after such transaction Equity Interests having a majority of the voting power of such entity’s outstanding Equity Interests shall be held by holders of the Equity Interests of such member immediately prior to such transaction), and their respective subsidiaries.

“Existing Letters of Credit” shall mean the letters of credit issued before the Effective Date and listed in Schedule 1.01 hereto.

“Federal Funds Effective Rate” shall mean, for any day, a fluctuating interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Fees” shall mean the Unused Commitment Fee, the L/C Fee, the L/C Issuance Fee, the Administrative Fees and the Effective Date Fees.

“Fiscal Year” shall mean each twelve-month period ending on December 31.

“Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which Equistar is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

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“Foreign Subsidiary” shall mean any Subsidiary organized under the laws of a jurisdiction, and conducting substantially all its operations, outside the United States of America.

“Fronting Bank” shall mean (a) JPMorgan Chase Bank, in its capacity as the issuer of the Existing Letters of Credit and (b) Citibank and other banks as mutually agreed by the Borrowers’ Agent and the Administrative Agent, in their capacity as the issuers of Additional Letters of Credit hereunder, with their respective successors in such capacity as provided in Section 2.06(j). In respect of Additional Letters of Credit, the Fronting Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Fronting Bank, in which case the term “Fronting Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

“GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis.

“Governmental Authority” shall mean any nation, sovereign or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any central bank.

“Guarantee” of or by any Person shall mean any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (b) to purchase property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness or (c) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness; provided that the obligation of any JV Owner Subsidiary which is a general partner in a Joint Venture which arises by operation of law in respect of any Indebtedness of such Joint Venture shall not be deemed a Guarantee by such JV Owner Subsidiary of such Indebtedness.

“Hazardous Materials” shall mean all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas and infectious or medical wastes and including all substances or wastes of any nature regulated pursuant to any Environmental and Safety Laws.

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“Hedging Agreement” shall mean any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest rate, currency exchange rate or commodity price hedging arrangement.

“Illegality” shall have the meaning assigned to such term in Section 2.15(a).

“Indebtedness” of any Person shall mean, without duplication, (a) the outstanding principal amounts of all obligations of such Person for borrowed money (including repurchase obligations), (b) the outstanding principal amounts of all obligations of such Person evidenced by bonds, debentures, notes or similar instruments or letters of credit in support of bonds, notes, debentures or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person to pay the deferred purchase price of property or services under any conditional sale or other title retention agreement, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (other than accounts payable to suppliers and accrued liabilities (i) that are incurred in the ordinary course of business and paid within 60 days after the date due or (ii) that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP), (f) all Capitalized Lease Obligations of such Person, (g) all non-contingent obligations (and, solely for purposes of Section 6.01, all contingent obligations, which contingent obligations shall for such purposes be deemed to be in an outstanding principal amount equal to the maximum contingent amount thereof) of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (h) all capital stock of such Person which is subject to redemption otherwise than at the sole option of such Person at any time prior to the date 12 months after the Termination Date to the extent not held by Equistar or any other Loan Party; provided that any capital stock of such Person which is included as Indebtedness solely as a result of provisions thereof which give the holders thereof the right to require such Person to repurchase or redeem such capital stock upon the occurrence of a “change of control” occurring prior to the Termination Date shall not be considered Indebtedness of such Person if the “change of control” provisions applicable to such capital stock are no more favorable to the holders of such capital stock than those contained in this Agreement, (i) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property or assets owned or acquired by such Person, whether or not the

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obligations secured thereby have been assumed and (j) all Guarantees of such Person. For avoidance of doubt, Indebtedness does not include (i) the Securitization Facility or (ii) any obligation of a JV Owner Subsidiary which is a general partner in a Joint Venture which arises by operation of law in respect of any Indebtedness of such Joint Venture.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

“Indentures” shall mean the 1996 Indentures, the 1999 Indenture, the 2001 Indenture and the 2003 Indenture.

“Ineligible Inventory” shall mean all Inventory described in one or more of the following clauses, without duplication:

(a) Inventory that is not subject to a perfected first priority Lien in favor of the Administrative Agent or that is subject to any other Lien that is not a Qualified Lien; or

(b) Inventory that is not located at or in transit to property that is owned or leased by the Borrowers unless:

(i) such Inventory has been delivered to a carrier and no document of title is issued with respect to such Inventory by such carrier and the relevant Borrower has the absolute and unconditional right to obtain such Inventory from such carrier free and clear of any and all Liens other than Qualified Liens; or

(ii) such Inventory is either subject to (x) a Third-Party Agreement or (y) an Availability Reserve as specified in clause (a) of the proviso in the definition of Availability Reserves; or

(c) Inventory located on premises of the Borrowers that are subject to any Lien (other than (x) Liens of the type described in clauses (8), (9) and (27) of the definition of “Permitted Liens” in the 2001 Indenture (as in effect on the Effective Date, whether or not such Indenture is in effect at the time in question) on such premises and (y) nonconsensual Liens on such premises that do not impair access to, or the removal of or exercise of remedies in respect of, such Inventory) unless:

(i) such Inventory is subject to an Availability Reserve as specified in clause (d) of the proviso in the definition of Availability Reserves; or

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(ii) the holder of such Lien and the Administrative Agent have entered into an Access Agreement with respect to such Inventory on such premises; or

(d) Inventory that is on consignment or that is subject to a negotiable document of title (as such terms are defined in the UCC); or

(e) Inventory that is billed not shipped Inventory; provided that Inventory billed but not shipped to the Persons listed on Schedule X, as of the date hereof and as updated from time to time by the Borrowers with the written approval of the Administrative Agent, shall not be Ineligible Inventory by reason of this clause (e); or

(f) Inventory that is not located in the United States; or

(g) Inventory that is not owned solely by the Borrowers, or as to which the Borrowers do not have good, valid and marketable title thereto (it being understood that such Inventory may be commingled with Inventory owned by others); or

(h) Inventory that consists of (i) supplies (other than that classified as “stores inventory”), (ii) work-in-process and catalysts, in each case not saleable in their current form or (iii) feedstock and line fill classified as “captive feedstock” or “feedstock line fill”; or

(i) Inventory that does not otherwise conform to the representations and warranties contained in this Agreement or the other Loan Documents; or

(j) such other Inventory as may be deemed ineligible by the Administrative Agent from time to time in accordance with the definition of Borrowing Base.

“Intercreditor Agreement” shall mean the Intercreditor Agreement dated as of December 17, 2003 by and among Citicorp USA, Inc., as Receivables Agent, Citicorp USA, Inc., as Lender Agent, Equistar Receivables, as Transferor, Equistar, as Originator, as Initial Servicer and as Borrower, and the other Originators and Loan Parties from time to time party thereto, substantially in the form of Exhibit I.

“Interest Coverage Ratio” shall mean the ratio of EBITDA to Net Interest Expense for Equistar and its Consolidated Subsidiaries, determined on a consolidated basis and calculated to exclude interest expense in the form of additional pay-in-kind interest required to be paid to holders of notes under the 2001 Indenture, the 2003 Indenture or any future indentures that provide for pay-

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in-kind interest similar to the additional pay-in-kind interest paid to holders issued under the 2001 Indenture and the 2003 Indenture in connection with the making of a Permitted Dividend, in each case, to the extent such interest expense is not paid or required to be paid in cash during the relevant period.

“Interest Payment Date” shall mean (a) with respect to any Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part, (b) in the case of a LIBOR Loan with an Interest Period of more than three months’ duration, each day that would have been an Interest Payment Date had successive Interest Periods of three months’ duration been applicable to such Loan and, in addition, the date of any continuation or conversion of such Loan with or to a Loan of a different Type and (c) with respect to any Loan, the date of termination of the Commitments in their entirety.

“Interest Period” shall mean (a) as to any LIBOR Borrowing, the period commencing on the date of such Borrowing or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case may be, and ending on the seventh day thereafter (if at the time of the relevant Borrowing Request all Lenders participating therein agree to make a seven-day Interest Period available) or on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect, (b) as to any ABR Borrowing, the period commencing on the date of such Borrowing or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case may be, and ending on the next succeeding March 31, June 30, September 30 or December 31 or, if earlier, the date of prepayment or conversion of such Borrowing, and (c) as to any Swingline Loan, the period commencing on the date of such Loan and ending on the last Business Day of the then current calendar month; provided, however, that (i) if any Interest Period would end on a day that shall not be a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of LIBOR Loans only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) no Interest Period with respect to any Loan shall end later than the Termination Date, (iii) interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period, (iv) there shall be outstanding at any one time no more than 10 Interest Periods applicable to LIBOR Loans and (v) prior to the Syndication Completion Date, each Interest Period with respect to LIBOR Loans shall be for a period of seven days and all such Interest Periods shall commence and end on the same day.

“Inventory” shall mean all now owned and hereafter acquired inventory, goods and merchandise, wherever located, to be furnished under any contract for service or held for sale or lease, all returned goods, raw materials, work-in-

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process, finished goods (including embedded software), other materials and supplies of any kind, nature, or description which are used or consumed in any Loan Party’s business or used in connection with the packing, shipping, advertising, selling or finishing of such goods, merchandise, and all documents of title or other documents representing them and shall include all feedstocks, line fill, stores inventory, catalysts, chemicals and additives.

“Inventory Concentration Account” shall have the meaning specified in the Security Agreement.

“Investment” shall mean with respect to any Person, all investments by such Person in another Person (including an Affiliate of such Person) in the form of direct or indirect loans, advances or extensions of credit to such other Person (including any Guarantee by such Person of Indebtedness or capital stock (which capital stock is subject to redemption otherwise than at the sole option of the issuer thereof at any time prior to the date 12 months after the Termination Date) of such other Person) or capital contributions or purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities of such other Person, together with all items that are or would be classified as investments of such investing Person on a balance sheet prepared in accordance with GAAP; provided that (a) trade credit and accounts receivable in the ordinary course of business, (b) commissions, loans, advances, fees and compensation paid in the ordinary course of business to officers, directors and employees and (c) reimbursement obligations in respect of letters of credit and tender, bid, performance, government contract, surety and appeal bonds, in each case solely with respect to obligations of Equistar or any Subsidiary (other than a Joint Venture Subsidiary and, in each case, subject to the provisions of Section 6.11) shall not be considered Investments.

“Joint Venture” shall mean any joint venture (a) in which Equistar has a direct or indirect economic interest of at least 20% and not more than 80% and (b) which is accounted for by Equistar on the equity method in accordance with GAAP.

“Joint Venture Subsidiary” shall mean any Subsidiary which is a Joint Venture.

“JV Owner Subsidiary” shall mean each Subsidiary of the Borrower (a) that, at any time, directly holds an equity interest in any Joint Venture and (b) that has no other material assets.

“LaPorte Joint Venture” shall mean the Subsidiary of Equistar which owns the LaPorte Olefins Assets.

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“LaPorte Olefins Assets” shall mean the plant, fixtures, equipment and other personal property located at Equistar’s LaPorte facility in Deer Park, Texas for the manufacturing, storage, piping and loading of ethylene, propylene and other olefin products.

“LC Disbursement” shall mean a payment made by the Fronting Bank pursuant to a Letter of Credit.

“LC Exposure” shall mean, at any time, the sum of (a) the aggregate amount available for drawing (assuming satisfaction of applicable drawing conditions) under all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrowers at such time. The LC Exposure of any Lender at any time shall be its Revolving Percentage of the total LC Exposure at such time.

“LC Sublimit” shall mean $150,000,000.

“Lender” shall mean any of the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be party hereto pursuant to an Assignment and Acceptance. Unless the context otherwise requires, the term “Lender” includes the Swingline Lender.

“Letter of Credit” shall mean any Existing Letter of Credit or Additional Letter of Credit.

“LIBO Rate” shall mean, with respect to any Borrowing comprised of LIBOR Loans for any Interest Period, the rate appearing on Page 3750 of the Moneyline Telerate Markets (or on any successor or substitute page of such Service) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for Dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Borrowing for such Interest Period shall be the rate at which Dollar deposits in an amount approximately equal to the Loan to be made by Citibank as part of such Borrowing and for a maturity comparable to such Interest Period are offered by the principal London office of Citibank in immediately available funds to prime banks in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

“LIBOR Lending Office” shall mean, with respect to each Lender, the branches or Affiliates of such Lender which such Lender has designated as its “LIBOR Lending Office” in its Administrative Questionnaire or, as to any Person who becomes a Lender after the Effective Date, in the Assignment and

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Acceptance executed by such Person or such other office of such Lender as such Lender may hereafter designate from time to time as its “LIBOR Lending Office” by notice to the Borrowers and the Administrative Agent.

“LIBOR Loan” shall mean any Revolving Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Article 2.

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement relating to such asset or (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, in each case whether or not filed, recorded or otherwise perfected under applicable law.

“Limited Partnership Agreement” shall mean the Amended and Restated Limited Partnership Agreement of Equistar dated as of May 15, 1998, as amended, supplemented or otherwise modified from time to time, by and among the respective Partners.

“Liquid Investments” shall have the meaning specified in the Security Agreement.

“Loan” shall mean a Revolving Loan whether made as a LIBOR Loan or an ABR Loan, or a Swingline Loan.

“Loan Documents” shall mean this Agreement, the Notes and the Collateral Documents.

“Loan Party” shall mean (a) Equistar, (b) each Subsidiary listed on the signatures pages hereof, if any, and (c) each other Subsidiary that is required under Section 5.13(a) to satisfy (or that elects to satisfy) the Collateral Requirement (for avoidance of doubt, including any JV Owner Subsidiary which is a Material Subsidiary but not including the LaPorte Joint Venture, any Foreign Subsidiary or any Joint Venture Subsidiary).

“Lockbox Accounts” shall have the meaning specified in the Security Agreement.

“Lyondell” shall mean Lyondell Chemical Company, a Delaware corporation, and its successors.

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“Major Casualty Proceeds” shall mean (i) the aggregate insurance proceeds received in respect of Collateral in connection with one or more related events by any Loan Party under any Property Insurance Policy or (ii) any award or other cash compensation with respect to any one or more related condemnations of Collateral (or any transfer or disposition of such property in lieu of condemnation) received by any Loan Party if the amount of such aggregate insurance proceeds or award or other cash compensation in respect of Collateral exceeds $10,000,000. Insurance proceeds paid to the Administrative Agent, as loss payee on any Property Insurance Policy covering Inventory, shall be deemed to be received by a Loan Party and shall be included in any determination of Major Casualty Proceeds.

“Margin Stock” shall have the meaning given such term under Regulation U.

“Material Adverse Effect” shall mean (a) a material adverse effect on the business, assets, operations or financial condition of Equistar and its Subsidiaries, taken as a whole, (b) material impairment of the ability of the Borrowers to perform any of their obligations under the Loan Documents, or (c) material impairment of the rights of or benefits available to the Lenders or the Agents under the Loan Documents; provided, however, that a downgrade in any debt rating of Equistar or any of its Subsidiaries shall not, by itself, constitute a Material Adverse Effect.

“Material Subsidiary” shall mean (a) any Subsidiary that accounts for more than 5% of the assets, or more than 5% of the revenues for the four fiscal quarters most recently ended, of Equistar and its Subsidiaries on a consolidated basis, (b) any Subsidiary designated by Equistar as a Material Subsidiary for purposes of the Loan Documents by notice to the Administrative Agent, (c) any Subsidiary that owns any Equity Interest in a Material Subsidiary described in clauses (a) or (b), and (d) at any time when Subsidiaries (other than Material Subsidiaries described in clauses (a), (b) and (d)) in the aggregate account for more than 10% of the assets, or more than 10% of the revenues for the four fiscal quarters most recently ended, of Equistar and its Subsidiaries on a consolidated basis, all Subsidiaries; provided that the term “Material Subsidiary” shall (i) include any Loan Party other than Equistar and (ii) exclude Equistar Receivables and any other Subsidiary engaged solely in the business of purchasing and owning accounts receivable generated by Equistar and its other Subsidiaries in connection with the Securitization Facility.

“Maximum Facility Availability” shall mean, at any date, an amount equal to the lesser of (i) the aggregate amount of the Lenders’ Commitments on such date and (ii) the Borrowing Base on such date.

“Millennium” shall mean Millennium Chemicals Inc., a Delaware corporation, and its successors.

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“Moody’s” shall mean Moody’s Investors Service, Inc., and its successors.

“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which Equistar or any ERISA Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

“Net Cash Proceeds” shall mean, with respect to any Prepayment Event, an amount equal to the cash proceeds received by Equistar or any of its Subsidiaries from or in respect of such Prepayment Event (including any cash proceeds received as interest or similar income on, or other cash proceeds of, any noncash proceeds of any Asset Sale), less (at the option of the Borrowers):

(a) any fees, costs and expenses reasonably incurred by such Person in respect of such Prepayment Event;

(b) amounts required to be paid to holders of minority interests in any Subsidiary as a result of such Prepayment Event; and

(c) if such Prepayment Event is an Asset Sale, (i) any taxes actually paid or to be payable by such Person or, if such Person is a partnership or a limited liability company, any such taxes that would be payable assuming the highest corporate tax rate were applicable to such Person, as estimated by a Principal Financial Officer, giving effect to the overall tax position of Equistar, in respect of such Asset Sale, (ii) the amount of all Indebtedness (other than the Loans) secured by any assets subject to that Asset Sale and subject to mandatory prepayment as a result of that Asset Sale, (iii) the amount of any reserves established by Equistar and its Subsidiaries to fund purchase price adjustments in respect of such Asset Sale and any reserves to fund contingent liabilities payable by Equistar and its Subsidiaries attributable to such Asset Sale (as estimated by a Principal Financial Officer), including, without limitation, liabilities under any indemnification obligations and severance and other employee termination costs associated with such Asset Sale, until such time as such amounts are no longer reserved or such reserve is no longer necessary (at which time any remaining amounts will become Net Cash Proceeds), and (iv) amounts required to be paid at the closing of such Asset Sale with respect to liabilities directly associated with the assets that are the subject of such Asset Sale, including, without limitation, trade payables and other accrued liabilities (to the extent not already reflected in the amount of cash proceeds received by Equistar or any of its Subsidiaries from or in respect of such Prepayment Event).

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“Net Income” shall mean, with respect to Equistar and its Consolidated Subsidiaries for any period, the net income of Equistar and its Consolidated Subsidiaries for such period, adjusted to exclude the effect of any extraordinary items of gain or loss.

“Net Interest Expense” shall mean, with respect to Equistar and its Consolidated Subsidiaries for any period, (a) the interest expense of Equistar and its Consolidated Subsidiaries, including, without limitation, (i) the amortization of debt discounts, (ii) the amortization of all fees (including, without limitation, fees with respect to interest rate protection agreements) payable in connection with the incurrence of Indebtedness to the extent included in interest expense and (iii) the portion of any payments due under any Capitalized Lease Obligation allocable to interest expense and (iv) to the extent not otherwise included in such interest expense, all “Yield” (or similar return) accrued under the Securitization Facility, less (b) the amount of interest income of Equistar and its Consolidated Subsidiaries for such period, in each case determined on a consolidated basis. For purposes of the foregoing, interest expense shall be determined after giving effect to any net payments made or received by Equistar and its Consolidated Subsidiaries with respect to interest rate protection agreements entered into as a hedge against interest rate exposure.

“1996 Indentures” shall mean (i) the Indenture dated as of January 29, 1996 between Equistar (succeeding Lyondell), as issuer, and JPMorgan Chase Bank (as successor by merger to Texas Commerce Bank National Association), as trustee, relating to 6 ¹/2% Unsecured Notes due February 21, 2006 and (ii) the Indenture dated as of January 29, 1996 between Equistar (succeeding Lyondell), as issuer, and JPMorgan Chase Bank (as successor by merger to Texas Commerce Bank National Association), as trustee, relating to 7.55% Unsecured Debentures due February 21, 2026, in each case as amended or supplemented from time to time.

“1999 Indenture” shall mean the Indenture dated as of January 15, 1999 between Equistar and Equistar Funding, as issuers, and The Bank of New York, as trustee.

“Notes” shall mean promissory notes of the Borrowers, substantially in a form reasonably satisfactory to the Administrative Agent, evidencing the Borrowers’ obligation to repay the Loans, and “Note” shall mean any one of such promissory notes issued hereunder.

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“Obligations” shall mean the obligations of the Loan Parties under the Loan Documents (as the same may hereafter be amended, restated, extended, supplemented or otherwise modified from time to time) with respect to the due and punctual payment, whether at maturity, by acceleration or otherwise, of (a) the principal amount of the Loans, (b) interest and premium on the Loans, (c) LC Disbursements and interest thereon and (d) all other monetary obligations of any Borrower, whether for fees, costs, indemnification or otherwise.

“Occidental” shall mean Occidental Petroleum Corporation, a Delaware corporation, and its successors.

“Orderly Liquidation Value Rate” shall mean, with respect to Eligible Inventory in each Category, the applicable orderly liquidation value (net of cost and expenses incurred in connection with liquidation) of such Inventory, which applicable percentage shall be determined by reference to the most recent Appraisal Report on such Inventory received by the Administrative Agent, as a percentage of the aggregate book value of such Inventory.

“Original Credit Agreement” shall mean the Amended and Restated Credit Agreement dated as of August 24, 2001, among Equistar and the lenders and agents party thereto.

“Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, the Loan Documents (but excluding any Excluded Taxes).

“Outstandings” shall mean, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such time.

“Partners” shall mean the direct or indirect wholly owned subsidiaries through which Lyondell, Millennium and Occidental hold their interests in Equistar.

“Partnership Governance Committee” shall mean Equistar’s Partnership Governance Committee, together with any successor or substitute committee exercising similar power and authority.

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor thereto.

“Perfection Certificate” shall have the meaning set forth in the Security Agreement.

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“Permitted Business” shall mean the petrochemical, chemical and petroleum refining businesses and any business reasonably related, incidental, complementary or ancillary thereto.

“Permitted Dividend” shall mean any dividend or distribution by Equistar on any class of its Equity Interests; provided that a portion of such class is held by a member of the Existing Control Group.

“Permitted Refinancing” shall mean an incurrence of Indebtedness to the extent the proceeds thereof are applied to refinance Indebtedness of Equistar or a Subsidiary (and to pay related fees and expenses); provided that (x) the Indebtedness so incurred shall mature no earlier than 91 days after the Termination Date and no payment, prepayment, redemption or repurchase of the principal amount thereof shall be required by the terms thereof on or prior to 91 days after the Termination Date (other than on terms no less favorable to Equistar or such Subsidiary than the corresponding terms governing the 2001 Indenture (as in effect on the Effective Date, whether or not such Indenture is in effect at the time in question)) and (y) the material covenants and defaults in the agreements governing such Indebtedness shall be no less favorable to Equistar and its Subsidiaries than the terms of the 2001 Indenture (as in effect on the Effective Date, whether or not such Indenture is in effect at the time in question).

“Person” shall mean any natural person, judicial entity, corporation, business trust, joint venture, association, company, limited liability company, partnership or government, or any agency or political subdivision thereof.

“Plan” shall mean any employee pension benefit plan (as defined in Section 3(2) of ERISA) (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code with respect to which Equistar or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prepayment Event” shall mean (a) at any time, any Asset Sale of Collateral and (b) during any Sweep Period, (i) any other Asset Sale (other than an Asset Sale the Net Cash Proceeds of which, when aggregated with the Net Cash Proceeds of any related Asset Sale of assets not constituting Collateral, do not exceed $25,000,000), or (ii) the receipt by Equistar or any Subsidiary of Major Casualty Proceeds. The description of any transaction as falling within the above definition does not affect any limitation on such transaction imposed by Article 6 of this Agreement.

“Principal Financial Officer” shall mean the chief financial officer, the treasurer or the principal accounting officer of Equistar (including any Person

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designated by the Partnership Governance Committee as a Principal Financial Officer for purposes of this Agreement). Any action taken or document delivered by a Principal Financial Officer pursuant to the Loan Documents shall be taken or delivered in his capacity as such.

“Property Insurance Policy” shall mean any insurance policy maintained by Equistar or any of its Subsidiaries covering losses with respect to tangible real or personal property or improvements, but excluding coverage for losses from business interruption.

“Qualified Lien” shall mean (i) an inchoate tax or PBGC Lien, (ii) a Lien securing payments of (A) expenses of a landlord, bailee, consignee, processor, warehouseman or other third party who stores, processes, maintains or holds Collateral and (B) rail car lease and transportation expense applicable to Collateral and (iii) any other Lien approved by the Administrative Agent, which in each case is (x) permitted by Section 6.01 and (y) covered by an Availability Reserve as specified herein (unless the Person who holds such Lien has entered into a Third-Party Agreement), as determined by the Administrative Agent in accordance with the definitions of Availability Reserve and Borrowing Base.

“Receivables Fees” shall have the meaning assigned to such term in the Indentures (as in effect on the Effective Date, whether or not any such Indenture is in effect at the time in question).

“Register” shall have the meaning assigned to such term in Section 10.07(f).

“Regulation U” shall mean Regulation U of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Regulation X” shall mean Regulation X of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Related Fund” shall mean, with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is advised or managed by the same investment advisor as such Lender or by an Affiliate of such Lender.

“Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

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“Reportable Event” shall mean any reportable event as defined in Section 4043(c) of ERISA or the regulations issued thereunder with respect to a Plan (other than a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).

“Required Lenders” shall mean, at any time, Lenders having in the aggregate more than 50% of the aggregate amount of the Credit Exposures at such time; provided that any Credit Exposure held by Equistar or any of its Subsidiaries or any of their respective Affiliates shall be excluded for purposes of determining such percentage.

“Requirement of Law” shall mean, with respect to any Person, the common law and all federal, state, local and foreign laws, rules and regulations, orders, judgments, decrees and other determinations of any Governmental Authority, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” shall mean the chief executive officer, the president, any Principal Financial Officer or any vice president of any Loan Party. Any action taken or document delivered by a Responsible Officer pursuant to the Loan Documents shall be taken or delivered in his or her capacity as such.

“Restricted Account” shall have the meaning specified in the Security Agreement.

“Revolving Loan” shall mean a Loan made pursuant to Section 2.01.

“Revolving Percentage” shall mean, with respect to any Lender, the percentage of the Total Commitment represented by such Lender’s Commitment. If the Commitments shall have been terminated or shall have expired, the Revolving Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any subsequent assignments pursuant to Section 10.07.

“Revolving Period” shall mean the period from and including the Effective Date to but excluding the earlier of the Termination Date and the date of termination of the Commitments.

“RPA Agreement” shall have the meaning specified in the definition of “Securitization Facility”.

“S&P” shall mean Standard & Poor’s Ratings Group.

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“Sale/Leaseback Transaction” shall mean any arrangement, directly or indirectly, with any Person whereby Equistar or any Subsidiary shall sell or transfer any property, real or personal, and used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

“SEC” shall mean the Securities and Exchange Commission.

“Securitization Facility” shall mean (i) the receivables securitization facility established pursuant to the Receivables Sale Agreement dated as of December 17, 2003 between Equistar and the other Sellers party thereto, as Seller, Equistar Receivables, as Buyer, and Equistar, as Buyer’s Servicer (the “RSA Agreement”), and the Receivables Purchase Agreement dated as of December 17, 2003 among Equistar Receivables, as Seller, Equistar, as Servicer, the Purchasers party thereto, Citicorp USA, Inc., as administrative agent and the other agents party thereto (the “RPA Agreement”) and (ii) any substantially similar replacement receivables securitization facility; provided that (x) if such replacement receivables securitization facility is not approved in writing by the Administrative Agent for purposes of this Agreement, such replacement receivables securitization facility shall not constitute a Securitization Facility for purposes of “SF Asset Availability” and “SF Excess Availability” (and defined terms and provisions which incorporate “SF Asset Availability” or “SF Excess Availability” by reference) and such amounts shall be deemed to be zero for that purpose and (y) in connection with any such replacement receivables securitization facility, arrangements with respect to the Restricted Accounts substantially identical to those established with respect to the initial securitization facility or other arrangements no less favorable to the Lenders shall be entered into, all in form and substance reasonably satisfactory to the Administrative Agent, and all applicable requirements of the Intercreditor Agreement shall be satisfied.

“Securitization Transaction” shall mean any financing transaction in which Equistar or any Subsidiary sells or otherwise transfers accounts receivable (a) to one or more third party purchasers or (b) to a special purpose entity that borrows against such accounts receivable or sells such accounts receivable to one or more third party purchasers.

“Security” shall mean any Stock, Stock Equivalent, voting trust certificate, bond, debenture, note or other evidence of Indebtedness, whether secured, unsecured, convertible or subordinated, or any certificate of interest, share or participation in, any temporary or interim certificate for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing, but shall not include any evidence of the obligations of the Borrowers or any Loan Parties hereunder.

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“Security Agreement” shall mean a security agreement in substantially the form of Exhibit F executed and delivered or to be executed and delivered by a Loan Party.

“SF Asset Availability” shall mean “Receivable Asset Excess Availability” as defined in the Securitization Facility.

“SF Excess Availability” shall mean “Receivables Excess Availability” as defined in the Securitization Facility.

“Solvent” shall mean, with respect to any Person as of any date of determination, that, as of such date, (a) the fair value of the assets of such Person, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of such Person will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) such Person is able to pay all liabilities of such Person as such liabilities mature and (d) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Effective Date. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Stock” shall mean shares of capital stock (whether denominated as common stock or preferred stock), beneficial, partnership or membership interests, participations or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity, whether voting or non-voting.

“Stock Equivalents” shall mean all securities convertible into or exchangeable for Stock and all warrants, options or other rights to purchase or subscribe for any Stock, whether or not presently convertible, exchangeable or exercisable.

“subsidiary” shall mean, with respect to any Person (the “parent”), any corporation, association or other business entity of which securities or other ownership interests representing 50% or more of the ordinary voting power are, at the time as of which any determination is being made, beneficially owned by the parent, by one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

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“Subsidiary” shall mean any subsidiary of Equistar.

“Subsidiary Borrower” shall mean any Borrower which is a Subsidiary.

“Sweep Account” shall have the meaning specified in the Security Agreement.

“Sweep Period” shall mean any period during which a Triggering Event exists.

“Swingline Exposure” shall mean, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Revolving Percentage of the total Swingline Exposure at such time.

“Swingline Facility” shall mean the swingline facility made available by the Swingline Lender pursuant to Section 2.05.

“Swingline Lender” shall mean Citicorp USA, Inc., in its capacity as lender of Swingline Loans hereunder.

“Swingline Loan” shall mean a Loan made pursuant to Section 2.05.

“Swingline Sublimit” shall mean $50,000,000.

“Syndication Completion Date” shall have the meaning specified in the Fee Letter dated November 12, 2003 among Equistar, Citicorp USA, Inc. and Bank of America, N.A.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“Temporary Cash Investment” shall mean any Investment in (a) securities issued or directly and fully guaranteed or insured by the United States of America government or any agency or instrumentality thereof having maturities of not more than one year from the date of acquisition, (b) demand deposits, time deposits and certificates of deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year from the date of acquisition and overnight bank deposits, in each case with any bank or trust company organized or licensed under the laws of the United States of America or any State thereof having capital, surplus and

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undivided profits in excess of $250 million, (c) repurchase obligations with a term of not more than seven days for underlying securities of the type described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (b) above, (d) commercial paper rated at least P-1 by Moody’s and A-1 by S&P or, if such commercial paper is rated by only one such agency, at least such rating from such agency, (e) investments in any Dollar denominated money market fund as defined by Rule 2a-7 of the General Rules and Regulations promulgated under the Investment Company Act of 1940 and (f) in the case of a Foreign Subsidiary, substantially similar investments denominated in foreign currencies (including similarly capitalized foreign banks).

“Termination Date” shall mean the fourth anniversary of the Effective Date.

“Third Party Agreement” shall mean an agreement, in form and substance reasonably acceptable to the Administrative Agent, pursuant to which a landlord, bailee, consignee, processor, warehouseman or other third party who stores, processes, maintains or holds Collateral (including a holder of a Lien on premises of the Borrowers where Eligible Inventory is located) acknowledges, among other things, the Administrative Agent’s Lien on such Collateral, the Administrative Agent’s ability to enforce its Lien on such Collateral and the subordination of any Lien held by such landlord, bailee, consignee, processor, or warehouseman or other third party on such Collateral to the Administrative Agent’s Lien thereon. Each Collateral Access Agreement is a Third Party Agreement and is in a form reasonably satisfactory to the Administrative Agent. Each Access Agreement is a Third Party Agreement, notwithstanding any absence therein of any subordination of the Lien held by such party to the Administrative Agent’s Lien.

“Total Commitment” shall mean, at any time, the aggregate amount of the Commitments at such time. On the Effective Date, the Total Commitment is $250,000,000.

“Total Collateral Availability” shall mean, at any time, the sum of (i) Collateral Availability plus (ii) SF Asset Availability, in each case at such time.

“Total Excess Availability” shall mean, at any time, the sum of (i) Excess Availability plus (ii) SF Excess Availability, in each case at such time. Total Excess Availability shall be determined on a pro forma basis, based on the Borrowing Base Certificate delivered pursuant to Section 4.02(m) and the first monthly “Seller Report” delivered pursuant to Section 3.2(a)(i) of the RPA Agreement, to the extent required to be determined in respect of days prior to the Effective Date.

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“Total Outstandings” shall mean at any time the aggregate Outstandings of all Lenders at such time.

“Transferee” shall have the meaning assigned to such term in Section 2.19(a).

“Triggering Event” shall mean any of the following events: (i) the Termination Date, (ii) the occurrence of an Event of Default, (iii) Total Collateral Availability being less than $150,000,000 for any period of five consecutive Business Days, (iv) Total Excess Availability being less than $100,000,000 for any period of five consecutive Business Days or (v) Total Collateral Availability being less than $125,000,000 on any Business Day; provided that if, following a Triggering Event described in clause (iii), (iv) or (v), Total Collateral Availability subsequently equals or exceeds $175,000,000 for a period of 20 consecutive Business Days such Triggering Event shall cease to exist upon the first day following such 20-Business Day period (unless the Borrowers otherwise elect by notice to the Administrative Agent); and provided further that if, following a Triggering Event described in clause (ii), the related Event of Default shall cease to exist, such Triggering Event shall cease to exist. For the avoidance of doubt, the cessation of an existing Triggering Event does not preclude the occurrence of a subsequent Triggering Event.

“2001 Indenture” shall mean the Indenture dated as of August 24, 2001 between Equistar and Equistar Funding Corporation, as issuers, and The Bank of New York, as trustee.

“2003 Indenture” shall mean the Indenture dated as of April 22, 2003 between Equistar and Equistar Funding Corporation, as issuers, and The Bank of New York, as trustee.

“Type”, when used in respect of any Loan or Borrowing, shall refer to the rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, “rate” shall include the LIBO Rate or the Alternate Base Rate.

“UCC” shall mean, at any time, the Uniform Commercial Code as from time to time in effect in the State of New York at such time; provided, however, that in the event that, by reason of mandatory provisions of law, the perfection, effect of perfection or non-perfection or priority of the security interest in any Collateral created by the Loan Documents is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

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“Unused Commitment Fee” shall have the meaning assigned to such term in Section 2.07(a).

“Valuation Reserves” shall mean the sum of the following, without duplication of any Availability Reserves or any Valuation Reserve:

(a) any book reserves maintained by the Borrowers in respect of Eligible Inventory (excluding a LIFO reserve under GAAP);

(b) to the extent not included in clause (a) or otherwise reflected in the book value thereof, a lower of cost or market reserve for all Eligible Inventory selling for less than cost as determined by the Borrowers; and

(c) such other reserves to reflect events, conditions, contingencies or risks which, as reasonably determined by the Administrative Agent, do or are reasonably likely to materially adversely affect the value of Eligible Inventory, established in accordance with the definition of Borrowing Base;

provided that the Administrative Agent shall give five Business Days’ notice to the Borrowers in the case of new reserve categories established pursuant to clause (c) after the Effective Date and changes in the methodology for determining a reserve and one Business Day’s notice to the Borrowers in other cases.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

Section 1.02. Accounting Terms. (a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if the Borrowers notify the Administrative Agent that they request an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrowers that the Required Lenders request an amendment to any provision hereof for such purpose), then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

(b) In the event of any future material acquisition or disposition of assets by Equistar and its Subsidiaries, determinations of EBITDA in respect of any period of four consecutive fiscal quarters shall be made on a pro forma basis as if such transaction had been consummated on the first day of such period.

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Section 1.03. Terms Generally. Except where the context requires otherwise, the definitions in Section 1.01 shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Unless otherwise stated, references to Sections, Articles, Schedules and Exhibits made herein are to Sections, Articles, Schedules or Exhibits, as the case may be, of this Agreement. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words in a visible form. References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of such Person. References “from” or “through” any date mean, unless otherwise specified, “from and including” or “through and including”, respectively.

Section 1.04. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “LIBOR Loan”) or by Class and Type (e.g., a “LIBOR Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “LIBOR Borrowing”) or by Class and Type (e.g., a “LIBOR Revolving Borrowing”).

ARTICLE 2

THE LOANS

Section 2.01. Commitments. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make Revolving Loans to the Borrowers from time to time during the Revolving Period in amounts such that (i) the Outstandings of such Lender shall at no time exceed the amount of its Commitment and (ii) the Total Outstandings shall at no time exceed the Maximum Facility Availability. Within the foregoing limits, the Borrowers may borrow, pay or prepay and reborrow Revolving Loans hereunder during the Revolving Period and subject to the terms, conditions and limitations set forth herein.

Section 2.02. Loans. (a) Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made ratably by the Lenders in accordance with their respective Commitments; provided, however, that the

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failure of any Lender to make any Revolving Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other Lender). The Loans comprising any Revolving Borrowing shall be in an aggregate principal amount which is an integral multiple of $1,000,000 and not less than the lesser of $10,000,000 and the remaining available balance of the Commitments.

(b) Each Revolving Borrowing shall be comprised entirely of LIBOR Loans or ABR Loans, as the Borrowers may request pursuant to Section 2.03. Each Lender may at its option make any LIBOR Loan by causing any branch or Affiliate of such Lender to make such Loan; provided, however, that any exercise of such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement; provided, further, that if the designation of any such foreign branch or Affiliate shall result in any costs, reductions or Taxes which would not otherwise have been applicable and for which such Lender would, but for this proviso, be entitled to request compensation under Section 2.15, 2.16 or 2.19, such Lender shall not be entitled to request such compensation unless it shall in good faith have determined such designation to be necessary or advisable to avoid any material disadvantage to it. Borrowings of more than one Type may be outstanding at the same time. For purposes of the foregoing, Borrowings having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings.

(c) Subject to Section 2.04 and paragraph (d) below, each Lender shall make its Loans on the proposed date or dates thereof (i) in the case of Loans other than Swingline Loans, by wire transfer of immediately available funds to the Administrative Agent in New York, New York, not later than 12:00 noon, New York City time, and (ii) in the case of Swingline Loans, as provided for in Section 2.05. The Administrative Agent shall credit on such date the amounts so received to the general deposit account of the Borrowers’ Agent with the Administrative Agent or to another account specified by the Borrowers and acceptable to the Administrative Agent by 3:00 p.m., New York City time; provided that ABR Loans made to finance the reimbursement of an LC Disbursement shall be remitted by the Administrative Agent to the Fronting Bank; and provided, further, that if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, the Administrative Agent shall return the amounts so received to the respective Lenders. Revolving Loans shall be made by the Lenders ratably in accordance with their Commitments as provided in Section 2.17. Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s portion of such Borrowing, the Administrative Agent may assume that

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such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with this paragraph (c) and the Administrative Agent may, in reliance upon such assumption, make available to the Borrowers on such date a corresponding amount. If and to the extent that such Lender shall not have made such portion available to the Administrative Agent, such Lender, on the one hand, and the Borrowers, on the other hand, severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount, together with interest thereon, for each day from the date such amount is made available to the Borrowers until the date such amount is repaid to the Administrative Agent at (i) in the case of the Borrowers, the interest rate applicable to ABR Loans and (ii) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. If such Lender shall repay to the Administrative Agent such corresponding amount, such amount shall be deemed to constitute such Lender’s Loan as part of such Borrowing for purposes of this Agreement as if it were made on the date of such Borrowing.

(d) Notwithstanding any other provision of this Agreement, the Borrowers shall not be entitled to request any Borrowing if the Interest Period requested with respect thereto would not comply with the limitations specified in the definition of Interest Period.

Section 2.03. Notice of Borrowings. (a) In order to request a Revolving Borrowing, the Borrowers shall give written or telecopy notice (or telephone notice promptly confirmed in writing or by telecopy) to the Administrative Agent in the form of Exhibit B (i) in the case of a LIBOR Borrowing, not later than 11:00 a.m., New York City time, three Business Days before a proposed Borrowing and (ii) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the Business Day of a proposed Borrowing.

(b) The Administrative Agent may waive any prior notice in connection with any Borrowing to be made on the date hereof. Any notice given pursuant to this Section shall be irrevocable and shall in each case refer to this Agreement and specify (x) whether such Borrowing is to be a LIBOR Borrowing or an ABR Borrowing; (y) the date of such Borrowing (which shall be a Business Day) and the amount thereof; and (z) if such Borrowing is to be a LIBOR Borrowing, the Interest Period with respect thereto. If no election as to the Type of Borrowing is specified in any such notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any LIBOR Borrowing is specified in any such notice, then the Borrowers shall be deemed to have selected an Interest Period of one month’s duration. The Administrative Agent shall promptly advise the Lenders of each notice given pursuant to this Section and of each Lender’s portion of the requested Borrowing.

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Section 2.04. Conversions and Continuations. Each Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrowers shall have the right at any time upon prior irrevocable telephonic notice (which shall be confirmed promptly in writing or by telecopy) to the Administrative Agent by the time that a Borrowing Request would be required under Section 2.03 if the Borrowers were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election, to convert such borrowing to a different Type of Borrowing, or in the case of a LIBOR Borrowing, to continue such Borrowing as a LIBOR Borrowing for an additional Interest Period, subject in each case to the following:

(a) if fewer than all the Loans comprising any Borrowing are to be converted or continued, such conversion or continuation shall be made pro rata among the Lenders in accordance with the respective Loans of such Lenders that are part of such Borrowing immediately prior to such conversion or continuation;

(b) in the case of a conversion or continuation of fewer than all the Loans comprising any Borrowing, the aggregate principal amount of Loans converted or continued shall be an amount that would be a permitted Borrowing amount for Loans of the same Type under the last sentence of Section 2.02(a);

(c) accrued interest on a LIBOR Loan (or portion thereof) being converted or continued shall be paid by the Borrowers at the time of conversion or continuation;

(d) if any LIBOR Loan is converted at a time other than the end of an Interest Period applicable thereto, the Borrowers shall pay any increased costs associated therewith pursuant to Section 2.16;

(e) the duration of any Interest Period shall comply with the limitations specified in the definition of Interest Period, and any portion of a LIBOR Loan for which the shortest available Interest Period would extend beyond such date shall be automatically converted at the end of the Interest Period at the time in effect into an ABR Loan, and, if applicable, the number of outstanding Interest Periods (after giving effect to any such conversion or continuation), shall comply with the limitations specified in the definition of Interest Period; and

(f) the Borrowers shall not be entitled to elect to convert any Loans to, or continue any Loans for an additional Interest Period as, LIBOR Loans if a Default shall exist when the Borrowers deliver notice of such election to the Administrative Agent.

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The Interest Period applicable to any LIBOR Loan resulting from a conversion of a Loan shall be specified by the Borrowers in the irrevocable notice of conversion delivered pursuant to this Section; provided, however, that if no such Interest Period shall be specified, the Borrowers shall be deemed to have selected an Interest Period of one month’s duration. If the Borrowers shall not have given timely notice to continue any LIBOR Loan into a subsequent Interest Period (and shall not otherwise have given notice to convert such Loan), such Loan (unless repaid pursuant to the terms hereof) shall, subject to Section 4.01, automatically be continued as a LIBOR Loan with an Interest Period of one month’s duration. The Administrative Agent shall promptly advise the applicable Lenders of any notice given pursuant to this Section and of each such Lender’s portion of the continuation or conversion hereunder. This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

Section 2.05. Swingline Loans. (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrowers from time to time during the Revolving Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Sublimit (ii) the Total Outstandings exceeding the Maximum Facility Availability. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Swingline Loans.

(b) The Borrowers may request a Swingline Loan, by notifying the Swingline Lender of such request by telephone (confirmed by telecopy if requested by the Swingline Lender), not later than 12:00 noon, New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Swingline Lender shall make each Swingline Loan available to the Borrowers by means of a credit to the general deposit account of the Borrowers’ Agent with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(f), by remittance to the Fronting Bank) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.

(c) The Swingline Lender may by written notice given to the Borrowers and the Administrative Agent not later than 10:00 a.m., New York City time, on any Business Day, require the Borrowers to give a Borrowing Request on such date for a Borrowing on the earliest date permitted by Section 2.03 of Revolving Loans in an amount sufficient to repay all outstanding Swingline Loans.

(d) Whether or not it shall have given a notice pursuant to Section 2.05(c), the Swingline Lender may by written notice given to the Administrative

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Agent not later than 10:00 a.m., New York City time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding; provided that if the aggregate principal amount of Swingline Loans outstanding on the last Business Day of any week exceeds $5,000,000, then the Swingline Lender shall deliver such notice to the Administrative Agent on such last Business Day of such week and require the Lenders to acquire participations on such last Business Day of such week in all of the Swingline Loans then outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender’s Revolving Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Revolving Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.02 with respect to Revolving Loans made by such Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrowers of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrowers (or other party on behalf of the Borrowers) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear. Any payment by a Lender pursuant to this paragraph to purchase a participation in a Swingline Loan shall not constitute a Revolving Loan and shall not relieve the Borrowers of their obligation to repay such Swingline Loan.

Section 2.06. Letters of Credit. (a) Existing Letters of Credit. On the Effective Date, without further action by any party hereto, each Fronting Bank that has issued an Existing Letter of Credit shall be deemed to have granted to each Lender, and each Lender shall be deemed to have acquired from such

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Fronting Bank, a participation in each Existing Letter of Credit equal to such Lender’s Revolving Percentage of (i) the aggregate amount available to be drawn under such Existing Letter of Credit and (ii) the aggregate amount of any outstanding reimbursement obligations in respect thereof. Such participations shall be on all the same terms and conditions as participations granted in Additional Letters of Credit under Section 2.06(e). With respect to each Existing Letter of Credit (i) if the relevant Fronting Bank has, prior to the Effective Date, sold a participation therein to a Lender, such Lender and Fronting Bank agree that such participation shall be automatically canceled on the Effective Date and (ii) if the relevant Fronting Bank has, prior to the Effective Date, sold a participation therein to any bank or financial institution that is not a Lender, such participation shall be cancelled upon the Administrative Agent receiving the written consent of such bank or financial institution to the effectiveness of this Agreement as contemplated by Section 4.02(l).

(b) Additional Letters of Credit. Subject to the terms and conditions set forth herein, the Borrowers may request the issuance of Additional Letters of Credit for their account, in a form reasonably acceptable to the Administrative Agent and the relevant Fronting Bank, at any time and from time to time during the period beginning on the Effective Date and ending on the thirtieth day prior to the Termination Date. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of the letter of credit application and any related documentation submitted by the Borrowers to, or entered into by the Borrowers with, the relevant Fronting Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(c) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of an Additional Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrowers shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the relevant Fronting Bank) to the relevant Fronting Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of an Additional Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, the date of issuance, amendment, renewal or extension, the date on which such Letter of Credit is to expire (which shall comply with paragraph (d) of this Section), the amount of such Additional Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the relevant Fronting Bank, the Borrowers also shall submit a letter of credit application in the form of Exhibit D hereto in connection with any request for an Additional Letter of Credit. An Additional Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each

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Letter of Credit the Borrowers shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (d) the LC Exposure shall not exceed the LC Sublimit and (e) the Total Outstandings shall not exceed the Maximum Facility Availability. Within the foregoing limits and subject to the terms and conditions set forth herein, the relevant Fronting Bank agrees to issue such Additional Letters of Credit (or amend, renew or extend an outstanding Letter of Credit, as the case may be).

(d) Expiration Date. Each Additional Letter of Credit shall expire at or prior to the close of business on the date one year after the date of the issuance of such Additional Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension).

(e) Participations. By the issuance of an Additional Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the relevant Fronting Bank or the Lenders, the relevant Fronting Bank hereby grants to each Lender, and each Lender hereby acquires from such Fronting Bank, a participation in such Letter of Credit equal to such Lender’s Revolving Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the relevant Fronting Bank, such Lender’s Revolving Percentage of each LC Disbursement made by such Fronting Bank and not reimbursed by the Borrowers on the date due as provided in paragraph (f) of this Section, or of any reimbursement payment required to be refunded to the Borrowers for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever; provided that such participations by a Lender shall not be construed as a waiver of any claims such Lender may have against the relevant Fronting Bank for gross negligence or willful misconduct (as finally determined by a court of competent jurisdiction).

(f) Reimbursement. If any Fronting Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on the date that such LC Disbursement is made, if the Borrowers shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrowers prior to such time on such date, then not later than 12:00 noon, New York City time, on (i) the Business Day

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that the Borrowers receive such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrowers receive such notice, if such notice is not received prior to such time on the day of receipt; provided that the Borrowers may, subject to the conditions to the Borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrowers’ obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrowers fail to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrowers in respect thereof and such Lender’s Revolving Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Revolving Percentage of the payment then due from the Borrowers, in the same manner as provided in Section 2.02 with respect to Loans made by such Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the relevant Fronting Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrowers pursuant to this paragraph, the Administrative Agent shall distribute such payment to the relevant Fronting Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Fronting Bank, then to such Lenders and such Fronting Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse a Fronting Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement.

(g) Obligations Absolute. The Borrowers’ obligation to reimburse LC Disbursements as provided in paragraph (f) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by any Fronting Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder. None of the Administrative Agent, the Lenders nor any Fronting Bank, nor any of their Related Parties shall have any

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liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the relevant Fronting Bank; provided that the foregoing shall not be construed to excuse the relevant Fronting Bank from liability to the Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by the Borrowers that are caused by such Fronting Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of any Fronting Bank (as finally determined by a court of competent jurisdiction), such Fronting Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the relevant Fronting Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(h) Disbursement Procedures. Each Fronting Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The relevant Fronting Bank shall promptly notify the Administrative Agent and the Borrowers by telephone (confirmed by telecopy) of such demand for payment and whether such Fronting Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse such Fronting Bank and the Lenders with respect to any such LC Disbursement.

(i) Interim Interest. If any Fronting Bank shall make any LC Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrowers reimburse such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrowers fail to reimburse such LC Disbursement when due

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pursuant to paragraph (f) of this Section, then Section 2.11 shall apply. Interest accrued pursuant to this paragraph shall be for the account of the relevant Fronting Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (f) of this Section to reimburse such Fronting Bank shall be for the account of such Lender to the extent of such payment.

(j) Replacement of Fronting Bank. Any Fronting Bank may be replaced at any time by written agreement among the Borrowers, the Administrative Agent, the replaced Fronting Bank and the successor Fronting Bank. The Administrative Agent shall notify the Lenders of any such replacement of any Fronting Bank. At the time any such replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Fronting Bank pursuant to Section 2.07(b). From and after the effective date of any such replacement, (i) the successor Fronting Bank shall have all the rights and obligations of the Fronting Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Fronting Bank” shall be deemed to refer to such successor or to any previous Fronting Bank, or to such successor and all previous Fronting Banks, as the context shall require. After the replacement of a Fronting Bank hereunder, the replaced Fronting Bank shall remain a party hereto and shall continue to have all the rights and obligations of a Fronting Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue Additional Letters of Credit and, for the avoidance of doubt, no Letter of Credit issued by it prior to such replacement shall be renewed or extended.

(k) Cash Collateralization. If any Event of Default shall occur and be continuing and the maturity of the Revolving Loans shall be accelerated or the Commitments terminated as provided in Article 7, on the Business Day that the Borrowers receive notice from the Administrative Agent or Lenders with LC Exposure representing greater than 50% of the total LC Exposure demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in the Cash Collateral Account an amount in cash equal to 105% of the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, (i) upon the occurrence of any Event of Default with respect to any Borrower described in Sections 7.01(e) or 7.01(f) or (ii) if any Letters of Credit remain outstanding and undrawn on the Termination Date. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrowers under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Such deposits shall, pending their application as provided below, be invested by the

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Administrative Agent, at the Borrowers’ risk and expense, in repurchase obligations with respect to United States of America Treasury securities or other high-quality overnight or short-term investments (which may include certificates of deposit of the Administrative Agent), and any interest earned through the investment of such deposits shall be for the Borrowers’ account and shall be added to the deposits held by the Administrative Agent under this Section and applied as provided herein. Moneys in such account shall be applied by the Administrative Agent to reimburse the relevant Fronting Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure, be applied to satisfy other obligations of the Borrowers under this Agreement. If the Borrowers are required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount, together with any interest earned thereon (to the extent not applied as aforesaid), shall be returned to the Borrowers within three Business Days after all Events of Default have been cured or waived.

Section 2.07. Fees. (a) The Borrowers agree to pay to each Lender, through the Administrative Agent, on the second Business Day following each March 31, June 30, September 30 and December 31, commencing December 31, 2003, and on the second Business Day following the date on which the Commitment of such Lender shall be terminated as provided herein, a fee (the “Unused Commitment Fee”) at the rate of 0.75% per annum on the daily average amount by which the Commitment of such Lender exceeded the sum of its outstanding Revolving Loans and its LC Exposure during the quarter then ended (or other period commencing on the Effective Date or ending on the Termination Date or any date on which the Commitment of such Lender shall be terminated, as applicable). The Unused Commitment Fee shall be computed on the basis of the actual number of days elapsed over a year of 360 days (including the first day but excluding the last day). The Unused Commitment Fee due to each Lender shall commence to accrue on the Effective Date and shall cease to accrue on the earlier of the Termination Date and the termination of the Commitment of such Lender as provided herein.

(b) The Borrowers agree to pay (i) to the Administrative Agent for the account of each Lender a participation fee (the “L/C Fee”) with respect to its participations in Letters of Credit, which shall accrue at the Applicable L/C Margin on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Fronting Bank, as

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applicable, a fronting fee, (the “L/C Issuance Fee”) which shall accrue at a rate of 0.25% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure. Participation fees and fronting fees shall be payable on the second Business Day following each March 31, June 30, September 30 and December 31, commencing December 31, 2003; provided that all such fees shall be payable on the second Business Day following the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c) The Borrowers agree to pay to the Administrative Agent, for its own account, collateral management, agency and administrative fees (the “Administrative Fees”) at the times and in the amounts heretofore agreed between them.

(d) The Borrowers agree to pay on the Effective Date to the Administrative Agent, for its own account and for the accounts of the Arrangers, the other Agents and the Lenders, fees in the amounts heretofore mutually agreed (the “Effective Date Fees”).

(e) All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, to the relevant Fronting Bank or among the Lenders. The Administrative Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent directly.

Section 2.08. Maturity of Loans; Mandatory Prepayments. (a) The Borrowers hereby agree that the outstanding principal balance of each Loan shall be payable on the Termination Date; provided that on each date that a Revolving Borrowing is made, the Borrowers shall repay all Swingline Loans borrowed prior to such date and then outstanding.

(b) Mandatory Prepayments.

(i) Upon the receipt by Equistar or any of its Subsidiaries (other than a Joint Venture Subsidiary) of Net Cash Proceeds in respect of any Prepayment Event, the Borrowers shall prepay the Loans in an amount equal to the lesser of (i) the outstanding principal amount of the Loans and (ii) such Net Cash Proceeds in accordance with (and subject to) subsection (c) below. Each such prepayment shall be required to be made not later

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than the third Business Day following receipt of such Net Cash Proceeds; provided that if the Net Cash Proceeds in respect of any Prepayment Event arising from an Asset Sale of Collateral or receipt of Major Casualty Proceeds are less than $10,000,000, no such prepayment shall be required until the amount of such Net Cash Proceeds, together with the amount of all other Net Cash Proceeds in respect of Prepayment Events arising from Asset Sales of Collateral or receipt of Major Casualty Proceeds in respect of which no prepayment under this subsection (b) shall have theretofore been made because such Net Cash Proceeds aggregated less than $10,000,000, are equal to at least $10,000,000.

(ii) If at any date the Total Outstandings exceed the Maximum Facility Availability calculated as of such date, then not later than the next succeeding Business Day, the Borrowers shall be required to take one of the following actions (as elected by the Borrowers): (A) prepay the Loans, (B) deposit cash in the Cash Collateral Account or (C) a combination of (A) and (B), in each case in an amount equal to such excess so that the Total Outstandings no longer exceed the Maximum Facility Availability. So long as either (x) no Default exists or (y) Total Outstandings are zero, any cash so deposited shall be released to the Borrowers if and to the extent that Total Outstandings, after giving effect to such release, would not exceed the Maximum Facility Amount.

(iii) During each Sweep Period, all amounts collected in the Sweep Account will be applied to the repayment of Loans in accordance with (and subject to) subsection (c) below.

(c) Application of Prepayments.

(i) Each payment of principal of the Loans shall be applied first to any outstanding Swingline Loans until the Swingline Loans shall have been repaid in full and then to Revolving Loans.

(ii) Each payment of principal of the Revolving Loans shall be applied ratably to the respective Revolving Loans of all Lenders.

(iii) Each payment of principal of the Revolving Loans pursuant to subsection (b) above shall be applied to outstanding ABR Loans up to the full amount thereof and then to outstanding LIBOR Loans.

(iv) Each payment of principal of LIBOR Loans shall be made together with interest accrued and unpaid on the amount repaid to the date of payment.

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(v) So long as no Event of Default has occurred and is continuing, if subsection (b) would otherwise require prepayment of LIBOR Loans or portions thereof prior to the last day of the then current Interest Period therefor, each such prepayment may, if the Borrowers so elect by notice to the Administrative Agent, be deferred to such last day of the related Interest Period. In the event of a deferral pursuant to this subsection, cash in the amount of the required prepayment shall be deposited in the Cash Collateral Account on the date the required prepayment would otherwise have been required for application on the deferred payment date unless the Borrowers would have been able, had the required prepayment been made, to reborrow that amount consistent with Section 4.01. Any amounts deposited in the Cash Collateral Account pursuant to the previous sentence but not yet applied to repay a LIBOR Loan shall be released to the Borrowers on any date prior to the last day of the then current Interest Period if on such date (A) the Borrowers are able to reborrow the amount consistent with Section 4.01 or (B) Total Outstandings are zero.

(d) Each payment of the LIBOR Loans shall be applied to such Borrowings as the Borrowers may designate (or, failing such designation, as determined by the Administrative Agent).

(e) For the avoidance of doubt, no prepayment shall result in any reduction of the Lenders’ Commitments hereunder.

Section 2.09. Evidence of Debt. (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

(b) The Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Class and Type of each Loan and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder, (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof and (iv) the amount of any interest thereon payable from the Borrowers to each Lender hereunder.

(c) The entries made in the accounts maintained pursuant to paragraphs (a) and (b) above shall, absent manifest error and to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrowers to repay the Loans in accordance with their terms.

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(d) Notwithstanding any other provision of this Agreement, in the event any Lender shall request a Note evidencing the Loans made by it hereunder, the Borrowers shall deliver such a Note or Notes payable to such Lender and its registered assigns, and the interests represented by such Note or Notes shall at all times (including after any assignment of all or part of such interests pursuant to Section 10.07) be represented by one or more Notes payable to the payee named therein or its registered assigns.

Section 2.10. Interest on Loans. (a) Subject to the provisions of Section 2.11, each Revolving Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year 360 days at the option of the Borrowers, at one of the following rates per annum: (i) the sum of the Applicable Margin plus the Alternate Base Rate or (ii) the sum of the Applicable Margin plus the current Adjusted LIBO Rate. Interest on each ABR Loan shall be payable on each applicable Interest Payment Date. The Alternate Base Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

(b) Subject to the provisions of Section 2.11, each LIBOR Loan shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such Loan plus the Applicable Margin. Interest on each LIBOR Loan shall be payable on each applicable Interest Payment Date (and, in the case of Revolving Loans, upon termination of the Commitments). The Adjusted LIBO Rate for each Interest Period shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. The Administrative Agent shall promptly advise the Borrowers and each applicable Lender of such determination.

(c) Subject to the provisions of Section 2.11, each Swingline Loan shall bear interest at the rate per annum applicable to ABR Revolving Loans as provided in paragraph (a) above.

(d) Interest on each Loan shall accrue from and including the date on which such Loan is made and to but excluding the date such Loan is repaid.

Section 2.11. Interest on Overdue Amounts; Alternative Rate of Interest. (a) If the Borrowers shall default in the payment of interest on any Loan or any Fees or other amount (other than principal) becoming due hereunder, whether by scheduled maturity, notice of prepayment, acceleration or otherwise, the

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Borrowers shall on demand pay interest from and including the date of such default, to the extent permitted by law, on such defaulted amount (other than principal) up to (but not including) the date of actual payment (after as well as before judgment) at a rate per annum (computed as provided in Section 2.10(a)) equal to the rate then applicable to ABR Loans plus (without duplication of the 2.00% increment contemplated by the proviso to the definition of Applicable Margin) 2.00% per annum.

(b) In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a LIBOR Borrowing the Administrative Agent shall have determined that deposits in the requested principal amounts of the LIBOR Loans are not generally available in the London interbank market to the Lenders or that reasonable means do not exist for ascertaining the LIBO Rate or that the rate at which such deposits are being offered will not adequately and fairly reflect the cost to the Lenders of making such LIBOR Loan, during such Interest Period, the Administrative Agent shall, as soon as practicable thereafter, give written or telecopy notice of such determination to the Borrowers and any request by the Borrowers for a LIBOR Borrowing shall, until the circumstances giving rise to such notice no longer exist, (i) if such notice relates to a Revolving Borrowing, be deemed a request for an ABR Borrowing; provided, however, that the Borrowers may withdraw any such request prior to the making of any such ABR Borrowing, or (ii) if such notice relates to the conversion of any outstanding Borrowing to, or continuation of any outstanding Borrowing as, a LIBOR Borrowing, be deemed to be a request for a conversion to, or continuation as, an ABR Borrowing, as applicable. Each determination by the Administrative Agent hereunder shall be conclusive absent manifest error.

Section 2.12. Termination and Reduction of Commitments and Swingline Facility. (a) Unless previously terminated, the Commitments and the Swingline Facility shall be automatically and permanently terminated on the Termination Date.

(b) Upon at least three Business Days’ prior irrevocable written or telecopy notice to the Administrative Agent (a copy of which the Administrative Agent shall promptly provide to each Lender), the Borrowers may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Total Commitment; provided, however, that (i) each partial reduction of the Total Commitment shall be in an integral multiple of $1,000,000 and in a minimum principal amount of $5,000,000 and (ii) no such termination or reduction shall be made (A) which would reduce the Total Commitment to an amount less than the Total Outstandings or (B) which would reduce any Lender’s Commitment to an amount that is less than such Lender’s Outstandings. Notwithstanding the foregoing, a notice of termination or reduction of the Total

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Commitment delivered by the Borrowers may state that such notice is conditioned upon the effectiveness of other debt incurrences, equity issuances or asset sales, in which case such notice may be revoked by the Borrowers (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.

(c) Each reduction in the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

Section 2.13. Optional Prepayment of Loans. (a) The Borrowers shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, upon giving telephonic notice (which shall be confirmed promptly in writing or by telecopy) to the Administrative Agent (which shall promptly provide a copy to each Lender): (i) before 11:00 a.m., New York City time, at least three Business Days prior to prepayment, in the case of LIBOR Loans, (ii) before 11:00 a.m., New York City time, at least one Business Day prior to prepayment, in the case of ABR Loans and (iii) before 12:00 noon, New York City time, on the date of prepayment, in the case of Swingline Loans; provided, however, that each such partial prepayment of principal shall be in a minimum principal amount of $10,000,000 and an integral multiple of $1,000,000.

(b) On the date of any termination or reduction of the Total Commitment pursuant to Section 2.12, the Borrowers shall pay or prepay so much of the Revolving Borrowings as shall be necessary in order that the Total Outstandings will not exceed the Maximum Facility Availability after giving effect to such termination or reduction.

(c) Except to the extent otherwise specified by the Borrowers when making a prepayment, all prepayments under this Section 2.13 of Revolving Loans shall be applied to outstanding ABR Loans up to the full amount thereof and then shall be applied to outstanding LIBOR Loans up to the full amount thereof.

(d) All prepayments under this Section shall be subject to Section 2.16 but otherwise without premium or penalty. All prepayments of LIBOR Loans shall be accompanied by accrued interest on the principal amount being prepaid to the date of prepayment.

Section 2.14. Reserve Requirements; Change in Circumstances. (a) Notwithstanding any other provision herein (but subject to paragraph (d) below and Section 2.20), if after the date of this Agreement any change in applicable law or regulation or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof

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(whether or not having the force of law) shall change the basis of taxation of payments to any Lender or any Fronting Bank, as applicable, of the principal of or interest on any LIBOR Loan made by such Lender or any Letter of Credit or participation therein or any fees or other amounts payable hereunder (other than changes in respect of Taxes referred to in clause (a) or (b) of the definition of “Excluded Taxes”) or by any political subdivision or taxing authority therein), or shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by such Lender or Fronting Bank or shall impose on such Lender, such Fronting Bank or the London interbank market any other condition affecting this Agreement or LIBOR Loans made by such Lender or any Letter of Credit or participation therein, and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any such Loan or to increase the cost to such Lender or such Fronting Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or such Fronting Bank hereunder (whether of principal, interest or otherwise) in respect thereof by an amount deemed by such Lender to be material, then the Borrowers will pay to such Lender or such Fronting Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Fronting Bank for such additional costs incurred or reduction suffered.

(b) Subject to Section 2.20, if any Lender or any Fronting Bank shall have determined that the adoption after the date hereof of any law, rule, regulation or guideline regarding capital adequacy, or any change after the date hereof in any of the foregoing or in the interpretation or administration of any of the foregoing by any Governmental Authority charged with the interpretation or administration thereof, or compliance by any Lender or any Fronting Bank (or any lending office of such Lender or Fronting Bank) or any Lender’s or any Fronting Bank’s holding company with any request or directive regarding capital adequacy (whether or not having the force of law) made or promulgated after the date hereof by any such Governmental Authority, has or would have the effect of reducing the rate of return on such Lender’s or such Fronting Bank’s capital or on the capital of such Lender’s or such Fronting Bank’s holding company, if any, as a consequence of its obligations under this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by any Fronting Bank, pursuant hereto to a level below that which such Lender or such Fronting Bank or such Lender’s or such Fronting Bank’s holding company could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such Fronting Bank’s guidelines with respect to capital adequacy) by an amount deemed by such Lender or such Fronting Bank to be material, then from time to time the Borrowers shall pay to such Lender or such Fronting Bank such additional amount or amounts as will compensate such Lender or such Fronting Bank or such Lender’s or such Fronting Bank’s holding company for any such reduction suffered.

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(c) A certificate of each Lender or any Fronting Bank setting forth such amount or amounts as shall be necessary to compensate such Lender or Fronting Bank (or its participating banks or other entities pursuant to Section 10.07) as specified in paragraph (a) or (b) above, as the case may be, shall be delivered to the Borrowers and shall be conclusive absent manifest error. Except as provided in paragraph (d) below, the Borrowers shall pay each Lender or Fronting Bank the amount shown as due on any such certificate delivered by such Lender or Fronting Bank within 30 days after receipt of the same. Each Lender or Fronting Bank shall submit such a certificate no more often than monthly; provided, however, that certificates with respect to amounts due with respect to identifiable Loans may be submitted at the ends of such Loans’ Interest Periods.

(d) Failure on the part of any Lender or Fronting Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital shall not constitute a waiver of such Lender’s or Fronting Bank’s rights with respect to any period to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital with respect to such period or any other period; provided, however, that neither any Lender nor any Fronting Bank shall be entitled to compensation under this Section 2.14 for any costs incurred or reductions suffered more than 90 days prior to the date on which it shall have requested compensation therefor; provided further, that if the change in law or regulation or in the interpretation or administration thereof that shall give rise to any such costs or reductions shall be retroactive, then the 90-day period referred to above shall be extended to include the period of retroactive effect thereof. Notwithstanding any other provision of this Section 2.14, neither any Lender nor any Fronting Bank shall demand compensation for any increased cost or reduction referred to above if it shall not at the time be the general policy or practice of such Lender or such Fronting Bank to demand such compensation in similar circumstances under comparable provisions of other credit agreements, if any. If any Lender or any Fronting Bank shall receive as a refund any moneys from any source that it has listed on the certificate provided pursuant to (c) above as an increased cost, to the extent that the Borrowers have previously paid such increased cost to such Lender or such Fronting Bank, such Lender or Fronting Bank shall promptly forward such refund to the Borrowers without interest.

Section 2.15. Change in Legality. (a) Notwithstanding anything to the contrary herein contained (but subject to Section 2.20), if after the date of this Agreement any change in any law or regulation or in the interpretation thereof or any new law, regulation or interpretation by any Governmental Authority charged with the administration or interpretation thereof or any judgment, order or

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directive of any competent court, tribunal or authority shall make it unlawful for any Lender or its Applicable Lending Office to make or maintain any LIBOR Loan or to give effect to its obligations as contemplated hereby with respect to any LIBOR Loan (collectively, an “Illegality”), then, by written notice to the Borrowers and to the Administrative Agent, such Lender, so long as such Illegality continues to exist:

(i) may declare that LIBOR Loans will not thereafter be made by such Lender hereunder, whereupon any request by the Borrowers for a LIBOR Borrowing (x) shall, as to such Lender only, be deemed a request for an ABR Borrowing or (y) at the option of the Borrowers, shall be withdrawn as to the Lender prior to the time for making the Borrowing; and

(ii) shall promptly enter into negotiations with the Borrowers and negotiate in good faith to agree to a solution to such Illegality; provided, however, that if such an agreement has not been reached by the date at which such change in law is given effect with respect to the outstanding LIBOR Loans of such Lender, the Borrowers shall immediately, at the option of the Borrowers, either (A) prepay the affected Loans or (B) convert any such LIBOR Loan to an ABR Loan.

(b) For purposes of this Section 2.15, a notice by a Lender shall be effective as to each Loan, if lawful, on the last day of the then current Interest Period with respect thereto; provided, however, that such notice shall be effective on the date of receipt if there are no outstanding LIBOR Loans; provided further, that if it is not lawful for such Lender to maintain any Loan in its current form until the end of the Interest Period applicable thereto, then the notice shall be effective upon receipt.

(c) Each Lender that has delivered a notice of Illegality pursuant to paragraph (a) above agrees that it will notify the Borrowers as soon as practicable if the conditions giving rise to the Illegality cease to exist.

Section 2.16. Indemnity. The Borrowers agree to indemnify each Lender against any loss or expense which such Lender may sustain or incur, and to pay any customary breakage charges such Lender may impose, as a consequence of (a) any payment, prepayment or conversion of a LIBOR Loan made to it required by any provision of this Agreement or otherwise made, or any transfer of any such Loan pursuant to Section 2.20(b), on a date other than the last day of the applicable Interest Period, (b) any default in payment or prepayment of the principal amount of any Loan made to it or any part thereof or interest accrued thereon, as and when due and payable (whether at scheduled maturity, by notice of prepayment, acceleration or otherwise), (c) the occurrence of any Event of

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Default, including any loss sustained or incurred or to be sustained or incurred in liquidating or employing deposits from third parties acquired to effect or maintain such Loan or any part thereof as a LIBOR Loan, Section 2.17 any failure by the Borrowers to fulfill on the date of any Borrowing hereunder the applicable conditions set forth in Article 4, Section 2.18 any failure of the Borrowers to borrow or to convert or continue any Loan made to it hereunder after irrevocable notice of such Borrowing, conversion or continuation has been given pursuant to Section 2.03, 2.04 or 2.05. Such loss or expense shall be the difference as reasonably determined by such Lender between (x) an amount equal to the principal amount of such LIBOR Loan being paid, prepaid, converted or transferred or not borrowed, converted or continued multiplied by a percentage per annum (computed on the basis of a 360-day year and actual days remaining for the balance of the Interest Period applicable, or which would have been applicable, to such LIBOR Loan being paid, prepaid, converted, transferred or not borrowed, converted or continued) equal to the greater of (i) the Adjusted LIBO Rate applicable to such LIBOR Loan being paid, prepaid, converted or transferred or not borrowed, converted or continued or (ii) such Lender’s cost of obtaining the funds for such LIBOR Loan being paid, prepaid, converted, transferred or not borrowed, converted or continued, but in the case of LIBOR Loans, not in excess of the Adjusted LIBO Rate applicable to such Loan plus 1/16th of 1% per annum, and (y) any lesser amount that would be realized by such Lender in reemploying the funds received in payment, prepayment, conversion or transfer or as a result of the failure to borrow, convert or continue during the period from the date of such payment, prepayment, conversion or transfer or failure to borrow, convert or continue to the end of the Interest Period applicable to such LIBOR Loan at the interest rate that would apply to an interest period of approximately such duration. Any such Lender shall provide to the Borrowers a statement explaining the amount of any such loss or expense, which statement shall, in the absence of manifest error, be conclusive.

Section 2.17. Pro Rata Treatment. Each Revolving Borrowing, each payment of the Unused Commitment Fee and each reduction of the Total Commitment shall be allocated among the Lenders in accordance with their respective Revolving Percentages. Except as required under Section 2.15, each payment or prepayment of principal of any Borrowing and each continuation or conversion of any Borrowing shall be allocated pro rata among the Lenders in accordance with the respective principal amounts of their outstanding Loans comprising such Borrowing. Each payment of interest on any Borrowing shall be allocated pro rata among the Lenders in accordance with the respective amounts of accrued and unpaid interest on their outstanding Loans comprising such Borrowing. Each payment of interest on any Swingline Borrowing or LC Disbursement shall be allocated in accordance with Sections 2.05 and 2.06, respectively.

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Section 2.18. Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise of a right of banker’s lien, setoff or counterclaim or pursuant to a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, obtain payment (voluntary or involuntary) in respect of any Loans or participations in LC Disbursements or Swingline Loans as a result of which the unpaid principal portion of its Loans or participations in LC Disbursements or Swingline Loans shall be proportionately less than the unpaid principal portion of the Loans or participations in LC Disbursements or Swingline Loans of any other Lender, it shall be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in the Loans or participations in LC Disbursements or Swingline Loans of such other Lender, so that the aggregate unpaid principal amount of such Loans or participations in LC Disbursements or Swingline Loans and participations in the foregoing held by each Lender shall be in the same proportion to the aggregate unpaid principal amount of all such Loans or participations in LC Disbursements or Swingline Loans then outstanding as the principal amount of its Loans or participations in LC Disbursements or Swingline Loans prior to such exercise of banker’s lien, setoff or counterclaim or other event was to the principal amount of all such Loans or participations in LC Disbursements or Swingline Loans outstanding prior to such exercise of such banker’s lien, setoff or counterclaim or other event; provided, however, that (i) if any such purchase or adjustments shall be made pursuant to this Section 2.18 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest and (ii) the provisions of this Section shall not be construed to apply to any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or Swingline Loans to any assignee or participant other than a Loan Party or any Affiliate thereof. Each Borrower expressly consents to the foregoing arrangements and agrees, to the fullest extent it may effectively do so under applicable law, that any Lender holding a participation in a Loan made to it or participations in LC Disbursements or Swingline Loans deemed to have been so purchased may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing by such Borrower to such Lender by reason thereof as fully as if such Lender had made a Loan directly to such Borrower in the amount of such participation.

Section 2.19. Taxes. (a) Any and all payments by or on account of any obligation of the Borrowers hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from

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such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Agent, Lender (which term, as used in this Section, shall include any assignee or transferee of a Lender, including any participation holder, subject to Section 10.07 (any such Person, a “Transferee”)) or Fronting Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrowers shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrowers shall indemnify each Agent, each Lender and Fronting Bank, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by such Agent, such Lender or Fronting Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrowers hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrowers by an Agent, a Lender or a Fronting Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or Fronting Bank, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrowers are located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrowers (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrowers as will permit such payments to be made without withholding or at a reduced rate.

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(f) If an Agent, a Lender or a Fronting Bank shall become aware that it is entitled to receive a refund in respect of Indemnified Taxes or Other Taxes for which it shall have received payment from the Borrowers under this Section, it shall promptly notify the Borrowers of the availability of such refund and shall, within 10 days after receipt of a request by the Borrowers, apply for such refund at the Borrowers’ expense. If an Agent, any Lender or any Fronting Bank shall receive a refund in respect of any such Indemnified Taxes or Other Taxes, it shall promptly repay such refund (including any penalties or interest received with respect thereto) to the Borrowers, net of all out-of-pocket expenses of such Agent, such Lender or Fronting Bank, provided that the Borrowers, upon the request of such Agent, such Lender or Fronting Bank, agrees to return such refund (plus penalties, interest or other charges) to such Agent, such Lender or Fronting Bank in the event such Agent, such Lender or Fronting Bank shall be required to repay such refund.

Section 2.20. Duty to Mitigate; Assignment of Commitments Under Certain Circumstances. (a) If any Lender (or Transferee) claims any additional amounts payable pursuant to Section 2.14 or exercises its rights under Section 2.15 or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.19, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document, including, without limitation, any such certificate or document reasonably requested by the Borrowers, or to change the jurisdiction of its Applicable Lending Office or to take other actions (including the filing of certificates or documents) known to it to be available if the making of such a filing or change or the taking of such other action would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue or avoid the circumstances giving rise to such exercise and would not, in the sole determination of such Lender (or Transferee), be otherwise disadvantageous to such Lender (or Transferee).

(b) In the event that any Lender shall have delivered a notice or certificate pursuant to Section 2.14 or 2.15, or the Borrowers shall be required to make additional payments to any Lender under Section 2.19, the Borrowers shall have the right, at its own expense (which shall include the processing and recordation fee referred to in Section 10.07(b)), upon notice to such Lender and the Administrative Agent, to require such Lender to transfer and assign without recourse (in accordance with and subject to the restrictions contained in Section 10.07) all its interests, rights and obligations hereunder to another financial institution approved by the Administrative Agent, and each Fronting Bank and the Swingline Lender (which approval shall not be unreasonably withheld) which shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided, however, that (i) no such assignment shall conflict with any law, rule or regulation or order of any Governmental Authority

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and (ii) the assignee or the Borrowers shall pay to the affected Lender in immediately available funds on the date of such assignment the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts accrued for its account or owed to it hereunder (including the additional amounts asserted and payable pursuant to Section 2.14 or 2.19, if any).

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

The Borrowers jointly and severally represent and warrant as follows:

Section 3.01. Organization. Each Borrower and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has the requisite power and authority under its constitutive documents and applicable law to own its property and assets and to carry on its business as now conducted and is duly qualified and is in good standing and is authorized to do business in every jurisdiction where such qualification or authorization is required, except where the failure so to qualify, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

Section 3.02. Authorization. Each Borrower and each other Loan Party has the power and authority under its constitutive documents and applicable law to execute, deliver and carry out the provisions of the Loan Documents, to grant Liens pursuant to the Collateral Documents and, in the case of the Borrowers, to borrow hereunder, and all such actions have been duly and validly authorized by all necessary proceedings on its part under its constitutive documents and applicable law.

Section 3.03. Absence of Conflicts. The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party, the grant of Liens pursuant to the Collateral Documents and the other transactions contemplated hereby and thereby, are within its powers, have been duly authorized and delivered by all necessary action on its part, do not (i) violate (x) any provision of the Limited Partnership Agreement or any other agreement governing its or any other Loan Party’s organization and/or scope of power and authority or any applicable law, rule, regulation (including Regulation U or X) or order, writ, judgment, injunction, decree, determination or award of any Governmental Authority binding upon it or any other Loan Party, (ii) result in a breach of or constitute (alone or with notice or lapse of time or both) a material default under any indenture or any material agreement or other instrument to which it or any other Loan Party is a party, or by which it or any other Loan Party

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or any of its or any other Loan Party’s properties or assets are bound, or (iii) except for the Liens created by the Collateral Documents, result in or require the creation or imposition of any Lien upon any of its or any other Loan Party’s property or assets.

Section 3.04. Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is or will be required in connection with any Borrower’s or any other Loan Party’s due execution, delivery or performance of any Loan Document to which it is a party, or any Borrowing hereunder or any other transaction contemplated hereby or thereby, including the grant of Liens pursuant to the Collateral Documents, except for the filings of the financing statements referred to in Article 4 and except for any which have been made or any the failure to obtain, give, file or take could not reasonably be expected to result in a Material Adverse Effect.

Section 3.05. Enforceability. This Agreement is, and the other Loan Documents to which any Borrower or any other Loan Party is or will be a party when delivered hereunder will be, the legal, valid and binding obligations of such Person enforceable against such Person in accordance with their respective terms except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application from time to time affecting the rights of creditors generally and by general principles of equity, including implied obligations of good faith and fair dealing.

Section 3.06. Financial Statements. (a) The audited consolidated balance sheet of Equistar and its Consolidated Subsidiaries as of December 31, 2002 and the related consolidated statements of income, of partners’ capital and of cash flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP, and set forth in Equistar’s 2002 annual report on Form 10-K filed with the SEC, a copy of which has been furnished to the Arrangers for distribution to the Lenders, fairly present, in conformity with GAAP, the consolidated financial position of Equistar and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year.

(b) The unaudited consolidated balance sheet of Equistar and its Consolidated Subsidiaries as of June 30, 2003 and the related unaudited consolidated statements of income and of cash flows for the six months then ended, set forth in Equistar’s quarterly report for the fiscal quarter ended June 30, 2003 on Form 10-Q filed with the SEC, a copy of which has been furnished to the Arrangers for distribution to the Lenders, fairly present, in conformity with GAAP applied on a basis consistent with the financial statements referred to in subsection (a) of this Section, the consolidated financial position of Equistar and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such six month period (subject to normal year-end adjustments).

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(c) The financial projections delivered pursuant to Section 4.02(o) and contained in the Confidential Information Memorandum were prepared in good faith on the basis of the assumptions described in the Confidential Information Memorandum, which assumptions were believed by Equistar in good faith to be reasonable in light of the then current and reasonably foreseeable business conditions of Equistar and its Consolidated Subsidiaries existing at the time of preparation thereof, and Equistar has no knowledge of any event or circumstance that would cause it to change any such assumptions in any material respect as of the date hereof, it being understood by the Administrative Agent and the Lenders that actual results may vary from the projected results set forth therein.

(d) Each financial statement delivered pursuant to Section 5.05(b) or 5.05(c) will, at the time it is delivered, present fairly, in all material respects, the financial position, results of operations or cash flows, as the case may be, of Equistar and its Consolidated Subsidiaries as of the date or for the period to which it relates in accordance with GAAP, subject in the case of quarterly statements to year-end audit adjustments.

Section 3.07. Material Adverse Effect. Since June 30, 2003 there has not occurred any development or event affecting, or any change in the business, assets, results of operations, financial condition or prospects of, Equistar and its Subsidiaries, taken as a whole, which has resulted or could reasonably be expected to result in a Material Adverse Effect.

Section 3.08. Litigation. There is no action, suit, investigation, litigation or proceeding at law or in equity or by or before any Governmental Authority now pending or, to its knowledge, threatened against or affecting Equistar or any of its Subsidiaries or the businesses, assets or rights of Equistar or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and which, if adversely determined, could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect or (ii) that in any manner draws into question the validity or enforceability of any Loan Document.

Section 3.09. Compliance with Law and Agreements.

(a) Neither Equistar nor any of its Subsidiaries is in violation of any law, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any Governmental Authority, where such violation or default could reasonably be expected to result in a Material Adverse Effect.

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(b) Neither Equistar nor any of its Subsidiaries is in default under any provision of any indenture or other agreement or instrument evidencing Indebtedness, or any other material agreement or instrument to which it is a party or by which it or any of its properties or assets are or may be bound, where such default could reasonably be expected to result in a Material Adverse Effect.

(c) No Default has occurred and is continuing.

Section 3.10. Federal Reserve Regulations. (a) Neither Equistar nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock.

(b) No part of the proceeds of the Loans has been or will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose which entails a violation of the provisions of the Regulations of the Board, including, without limitation, Regulation U or X thereof. After giving effect to each Credit Event and the application of the proceeds thereof, not more than 25% of the value, determined in accordance with Regulation U, of the assets subject to Section 6.01 will consist of Margin Stock.

(c) No part of the proceeds of the Loans has been or will be used to acquire any Security in any transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of 1934 unless such transaction shall have been approved by the board of directors (or comparable governing body) of the issuer of such Security.

Section 3.11. Tax Returns. The Borrowers have filed, or caused to be filed or be included in, all tax reports and returns (federal, state, local and foreign), if any, required to be filed by any of them and paid, or caused to be paid, all material amounts of taxes, including interest and penalties, required to be paid by any of them, except for such taxes (i) as are being contested in good faith by proper proceedings and (ii) against which adequate reserves shall have been established in accordance with and to the extent required by GAAP, but only so long as the proceedings referred to in clause (i) above would not subject the Lenders to any civil or criminal penalty or liability or involve any material risk of the loss, sale or forfeiture of any property, rights or interests included in the Collateral.

Section 3.12. Employee Benefit Plans. (a) Equistar and its ERISA Affiliates are in compliance in all material respects with those provisions of ERISA and the regulations and published interpretations thereunder which are applicable to it, except where noncompliance could not reasonably be expected to result in a Material Adverse Effect. No Reportable Event has occurred with

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respect to any Plan that could reasonably be expected to result in a Material Adverse Effect, and no unfunded liabilities exist under all of the Plans in the aggregate that could reasonably be expected to result in a Material Adverse Effect.

(b) Neither Equistar nor any ERISA Affiliate has incurred any Withdrawal Liability that materially and adversely affects the financial condition of it and its Subsidiaries taken as a whole or that materially and adversely impairs its ability to perform its obligations under this Agreement or any other Loan Document to which it is a party. Neither Equistar nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization or has been terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, where such reorganization or termination has resulted or is likely to result in an increase in the contributions required to be made to such Multiemployer Plan in an amount that could reasonably be expected to result in a Material Adverse Effect.

Section 3.13. Accuracy Of Information. (a) No report or document or other information furnished or to be furnished at any time by or on behalf of any Loan Party to the Agent or any Lender in connection with any Loan Document, when taken together with all other reports, documents and information then or theretofore so furnished by or on behalf of the Loan Parties, including Equistar’s periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, contained, or will contain, as of the date so furnished, any untrue statement of a material fact or omitted to state, or will omit to state, as of the date so furnished, a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading; provided that no representation or warranty with respect to (x) the financial projections described in Section 4.02(o), (y) any information, including financial projections, delivered pursuant to Section 5.05(g) or (z) any financial statements delivered pursuant to Section 5.05(a), shall be made pursuant to this Section 3.13(a).

(b) With respect to the financial projections most recently delivered pursuant to Section 5.05(g) of this Agreement, such financial projections have been prepared in good faith on the basis of assumptions believed at the time of their preparation and delivery by Equistar in good faith to be reasonable in light of the then current and reasonably foreseeable business conditions of Equistar and its Subsidiaries existing at the time of preparation thereof, it being understood by the Administrative Agent and the Lenders that actual results will likely vary from the projected results set forth therein.

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Section 3.14. Investment Company Act; Public Utility Holding Company Act. Neither Equistar nor any of its Subsidiaries is an “investment company” as defined in, or is otherwise subject to regulation under, the Investment Company Act of 1940. Neither Equistar nor any of its Subsidiaries is subject to regulation as a “holding company” under the Public Utility Holding Company Act of 1935.

Section 3.15. Environmental and Safety Matters. Equistar and each of its Subsidiaries and the businesses conducted by them have complied in all respects with all Federal, state, local and other statutes, ordinances, orders, judgments, rulings, regulations and agreements and governmental restrictions relating to the environment or to protection of the environment or to employee health and safety (“Environmental and Safety Laws”) except for violations that either alone or in the aggregate could not reasonably be expected to result in a Material Adverse Effect. Neither Equistar nor any of its Subsidiaries manages or handles any hazardous wastes, hazardous substances, hazardous materials, toxic substances or toxic pollutants regulated by Environmental and Safety Laws in violation of such Environmental and Safety Laws where such violation could reasonably be expected to result, individually or together with other violations, in a Material Adverse Effect. To the best of its knowledge, neither Equistar nor any of its Subsidiaries has any liabilities or contingent liabilities relating to environmental or employee health and safety matters which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

Section 3.16. Title to Properties. Equistar and each Subsidiary has good and, in the case of real property, marketable or indefeasible title to, or valid leasehold interests in or other rights to use, all its material assets and properties, except for such assets and properties as are no longer being used or useful in the conduct of its businesses or have been disposed of as permitted by the terms of this Agreement and except for defects in title and exceptions that either alone or in the aggregate could not reasonably be expected to result in a Material Adverse Effect. All such material assets and properties of Equistar and its Material Subsidiaries are free and clear of all Liens other than those permitted by Section 6.01.

Section 3.17. Collateral. The Collateral Documents create valid security interests in the Collateral purported to be covered thereby, which security interests are and will remain perfected security interests prior to all other Liens other than Liens permitted by Section 6.01. Each of the representations and warranties made by each Loan Party in each Collateral Document to which it is a party is true and correct in all material respects as of each date made or deemed made.

Section 3.18. Subsidiaries. Schedule 3.18 sets forth the name of, and the ownership interest of the Borrowers in each Material Subsidiary and each other Subsidiary of any Borrower as of the Effective Date.

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Section 3.19. Insurance. Schedule 3.19 sets forth a description of all insurance maintained by or on behalf of Equistar and its Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance currently due have been paid.

Section 3.20. Labor Matters. As of the Effective Date, there are no strikes, lockouts or slowdowns against Equistar or any Subsidiary pending or, to the knowledge of the Borrowers, threatened.

Section 3.21. Solvency. Both before and after giving effect to (i) consummation of the transactions contemplated by the Loan Documents to occur on the Effective Date and the date of each Credit Event, including the making of each Loan (and the application of the proceeds thereof), (ii) the consummation of the transactions contemplated by the Securitization Facility and (iii) the payment and accrual of all transaction costs in connection with the foregoing, each Borrower and each other Loan Party, individually and taken as a whole, is Solvent.

ARTICLE 4

CONDITIONS OF LENDING

Section 4.01. All Borrowings. On the date of each Credit Event, the obligations of the Lenders to make Loans and the obligation of the Fronting Banks to issue, amend, renew or extend any Letter of Credit hereunder shall be subject to the satisfaction of the following conditions:

(a) The Administrative Agent or the relevant Fronting Bank shall have received a notice of such Credit Event as required by Section 2.03 or 2.06, as applicable.

(b) The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects on and as of the date of such Credit Event with the same effect as though made on and as of such date, except (i) in the case of a Credit Event consisting solely of a conversion of LIBOR Loans to ABR Loans and (ii) to the extent such representations and warranties expressly relate to an earlier date.

(c) At the time of and immediately after such Credit Event, no Default shall have occurred and be continuing.

(d) After giving effect to such Credit Event, Total Outstandings will not exceed the Maximum Facility Availability and, except in the case of a Credit Event consisting solely of a conversion of LIBOR Loans to ABR Loans, either (x)

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the daily average Total Excess Availability shall have exceeded $100,000,000 for the period of 30 consecutive calendar days then ended or (y) no Permitted Dividends and no prepayment of Indebtedness pursuant to Section 6.10(c)(ii) shall have been paid by Equistar since the time the daily average Total Excess Availability (after giving effect to any such Permitted Dividend or prepayment) last exceeded $100,000,000 for a period of 30 consecutive calendar days.

(e) The making of such Borrowing, Swingline Loan, or the issuance of such Letter of Credit, shall not violate any requirement of law binding upon the Borrowers and shall not be enjoined temporarily, preliminarily or permanently.

Each Credit Event shall be deemed to constitute a representation and warranty on the date of such Credit Event as to the matters specified in paragraphs (b), (c), (d) and (e) of this Section.

Section 4.02. Effective Date. The obligations of the Lenders and the Fronting Banks to make the initial Loans, assume the Existing Letters of Credit and issue the initial Additional Letters of Credit under this Agreement shall not become effective until the date on which each of the following conditions has been (or shall substantially simultaneously be) satisfied (or waived in accordance with Section 10.02):

(a) The Administrative Agent shall have received a certificate dated the Effective Date and signed by a Principal Financial Officer, confirming compliance with the conditions precedent set forth in paragraphs (b) and (c) of Section 4.01 and paragraphs (g), (k) and (p) of this Section (with compliance with the conditions set forth in such paragraphs (b) and (c) being determined after giving effect to the transactions referred to in such paragraphs (g) and (k)).

(b) The Administrative Agent shall have received for the benefit of each Lender a signed copy of the favorable written opinion, dated the Effective Date and addressed to the Lenders, of (i) Baker Botts L.L.P., counsel for Equistar, substantially in the form set forth in Exhibit E-1 and (ii) Gerald A. O’Brien, Esq., General Counsel of Equistar, substantially in the form set forth in Exhibit E-2, in each case reasonably satisfactory to Davis Polk & Wardwell, special counsel for the Agents.

(c) The Administrative Agent shall have received such documents and certificates as the Administrative Agent or their counsel may reasonably request relating to the organization, existence and good standing of the Loan Parties, the authorization of the Loan Documents and the transactions contemplated thereby and any other legal matters relating to the foregoing, all in form and substance reasonably satisfactory to the Administrative Agent and their counsel.

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(d) The Administrative Agent shall have received counterparts of this Agreement which, when taken together, bear the signatures of all the parties hereto.

(e) The Administrative Agent shall have received a copy certified by a Responsible Officer of the Limited Partnership Agreement which shall be in full force and effect.

(f) The Administrative Agent shall have received proper financing statements terminations or releases, if any necessary to release all security interests and other rights of any Person in the Collateral.

(g) The Securitization Facility shall be in full force and effect and no “Potential Event of Termination” or “Event of Termination” (as defined therein) shall exist thereunder.

(h) The Collateral Requirement shall have been satisfied as of the Effective Date.

(i) The Administrative Agent shall have received all Fees and other amounts due and payable on or prior to the Effective Date, including to the extent invoiced at least two Business Days prior to the Effective Date, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder.

(j) All legal matters incidental to this Agreement and the Borrowings hereunder shall be satisfactory to the Lenders and to Davis Polk & Wardwell, special counsel for the Agents.

(k) Equistar shall have prepaid all loans outstanding under the Original Credit Agreement, together with accrued interest thereon and accrued fees thereunder.

(l) The Administrative Agent shall have received evidence satisfactory to it that each participation in an Existing Letter of Credit granted by the relevant Fronting Bank to a bank or financial institution that is not a Lender has been cancelled on or before the Effective Date as contemplated by Section 2.06(a).

(m) The Administrative Agent shall have received a completed Borrowing Base Certificate signed by a Principal Financial Officer.

(n) The Administrative Agent shall have received, and be satisfied in all respects with, an Appraisal Report with respect to the Available Inventory.

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(o) The Administrative Agent shall have received and be satisfied with (i) audited financial statements of Equistar and its Consolidated Subsidiaries for the Fiscal Year ending December 31, 2002 by independent nationally-recognized public accountants which statements shall be unqualified, (ii) interim unaudited quarterly financial statements of Equistar and its Consolidated Subsidiaries through the fiscal quarter ending September 30, 2003, and (iii) the financial projections of Equistar and its Consolidated Subsidiaries covering the Fiscal Years ending in 2003 through 2007, that are included in the Confidential Information Memorandum.

(p) Total Excess Availability (after giving effect to the effectiveness of this Agreement and the Securitization Facility) shall be at least $300,000,000 on the Effective Date.

Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Fronting Banks to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 10.02) at or prior to 3:00 p.m., New York City time, on December 19, 2003 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time). The Administrative Agent shall promptly notify the Borrowers, the Fronting Bank and each Lender of the Effective Date, and such notice shall be conclusive and binding on all parties hereto.

ARTICLE 5

AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated, the principal of and interest on each Loan and all Fees payable hereunder shall have been paid in full, all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, Equistar covenants and agrees with the Lenders that it will, and will cause each of its Material Subsidiaries to:

Section 5.01. Existence. Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, except as otherwise permitted by Section 6.03.

Section 5.02. Business and Properties. Except as otherwise permitted by Section 6.03 or to the extent the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, at all times (a) do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect the rights, licenses, permits, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business; and (b) maintain, preserve and protect all property material to the conduct of such business.

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Section 5.03. Maintenance of Insurance. Maintain insurance consistent with the insurance maintained on the date hereof or otherwise consistent with general practices in effect from time to time in the Borrowers’ industry, in either case to the extent available to Equistar and its Material Subsidiaries on commercially reasonable terms, and furnish to the Administrative Agent upon request information in reasonable detail as to the insurance so carried; provided that in any event the Borrowers shall maintain, and shall cause the Administrative Agent to be named loss payee on, property and casualty insurance with respect to Inventory of the Loan Parties. The Administrative Agent and the Lenders agree that any insurance proceeds received by the Administrative Agent, as loss payee on such insurance, that are not required to be applied to prepay Loans in a Prepayment Event pursuant to Section 2.08(b)(i) shall be promptly paid over by the Administrative Agent to the Borrowers.

Section 5.04. Payment of Taxes. Pay and discharge all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property before the same shall become delinquent or in default, as well as all lawful material claims for labor, materials and supplies or otherwise, which, if unpaid, might give rise to liens or charges upon such properties or any part thereof, unless and to the extent that any such tax, assessment, charge, levy or claim is being contested in good faith by appropriate proceedings and adequate reserves are being maintained on its books with respect thereto to the extent required by GAAP.

Section 5.05. Financial Statements, Reports, Etc. Furnish to the Administrative Agent for distribution to the Lenders:

(a) During any Sweep Period, within 30 days after the end of each of the first two fiscal months in each fiscal quarter of Equistar, unaudited consolidated financial statements (which shall include a balance sheet and income statement, as well as statements of partners’ equity and cash flow) showing the financial condition and results of operation of Equistar and its Consolidated Subsidiaries as of the end of and for such fiscal month and that portion of the current Fiscal Year ending as of the close of such month, in each case certified by a Principal Financial Officer as being the same monthly financial statements generated in accordance with Equistar’s normal procedures and submitted to management of Equistar. The Administrative Agent and the Lenders acknowledge that any monthly unaudited consolidated financial statements furnished pursuant to this Section 5.05(a) will not be accompanied by the footnotes and other disclosures that would be necessary for fair presentation in accordance with GAAP.

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(b) Subject to the last paragraph of this Section 5.05, within 55 days after the end of each of the first three fiscal quarters of each Fiscal Year, unaudited consolidated financial statements (which shall include a balance sheet and income statement, as well as statements of partners’ equity and cash flow) showing the financial condition and results of operations of Equistar and its Consolidated Subsidiaries as of the end of and for such fiscal quarter, in each case certified by a Principal Financial Officer as presenting fairly, in all material respects, the financial position and results of operations of Equistar and its Consolidated Subsidiaries and as having been prepared in accordance with the rules and regulations of the SEC applicable to quarterly reports on Form 10-Q.

(c) Subject to the last paragraph of this Section 5.05, within 100 days after the end of each Fiscal Year, consolidated and consolidating financial statements (which shall include a balance sheet and income statement, as well as statements of partners’ equity and cash flows) showing the financial condition and results of operations of Equistar and its Consolidated Subsidiaries as of the end of and for such Fiscal Year. The consolidated financial statements of Equistar and its Consolidated Subsidiaries delivered pursuant to this paragraph will be audited and reported on by independent public accountants of recognized standing and shall be accompanied by a statement of such firm of independent public accountants (i) stating whether during the course of their examination of such financial statements they obtained knowledge of any Default existing on the date of such statements and (ii) confirming the calculations set forth in the officer’s certificate delivered simultaneously therewith pursuant to (e) below (which statement may be limited to the extent required by accounting rules or guidelines including the rules and guidelines of the public accounting firm giving such statement).

(d) Subject to the last paragraph of this Section 5.05, promptly after the same shall have been filed or furnished as described below, copies of such registration statements, annual, periodic and other reports, and such proxy statements and other information, if any, as shall be filed by Equistar or any Subsidiary with the SEC pursuant to the requirements of the Securities Act of 1933 or the Securities Exchange Act of 1934 or the rules promulgated thereunder.

(e) Concurrently with (b) and (c) above, a certificate of a Principal Financial Officer,

(i) certifying compliance, as of the dates of the financial statements being furnished at such time and for the periods then ended, with the covenants set forth in Sections 6.01 and 6.11 and demonstrating compliance with the covenant set forth in Section 6.02, when applicable, and the provisions of Section 7.01(o);

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(ii) certifying that to the best knowledge of such Principal Financial Officer no Default has occurred and is continuing or, if a Default has occurred and is continuing, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto; and

(iii) solely in the case of (c) above, certifying that except as previously notified to the Administrative Agent pursuant to Section 5.12 there has been no change in any Loan Party’s name, form of organization, jurisdiction of organization and organizational number or Federal Taxpayer Identification Number.

(f) Within five Business Days of the date of receipt of Net Cash Proceeds in excess of $10,000,000 in respect of any Asset Sale or a series of related Asset Sales, or the receipt of Major Casualty Proceeds, a certificate of a Principal Financial Officer setting forth in reasonable detail the amount of such Net Cash Proceeds or Major Casualty Proceeds.

(g) Not later than the earlier of (i) 15 days after Equistar has received the approval of its Partnership Governance Committee and (ii) 30 days after the commencement of each Fiscal Year, the Annual Plan. For purposes hereof, “Annual Plan” shall mean, for any Fiscal Year before the Termination Date, the financial projections of Equistar and its Subsidiaries for such Fiscal Year prepared by management of Equistar for approval of the Partnership Governance Committee and substantially in the form heretofore provided to the Administrative Agent pursuant to Section 4.02(o).

(h) Promptly, from time to time, such other information documents, records or reports respecting this Agreement or the condition or operations, financial or otherwise of Equistar or any Subsidiary as the Administrative Agent may from time to time reasonably request.

Information required to be delivered pursuant to Section 5.05(b), 5.05(c) or 5.05(d) shall be deemed to have been delivered on the date on which Equistar provides notice to the Administrative Agent that such information has been posted on Equistar’s website on the Internet at www.equistarchem.com, at www.sec.gov or at another website identified in such notice and accessible by the Lenders without charge; provided that (i) such notice may be included in a certificate delivered pursuant to 5.05(e), (ii) the certification referred to in 5.05(b) shall be deemed made on the date on which Equistar provides notice to the Administrative Agent (as contemplated above) that the information referred to in such paragraph has been posted as described above and (iii) Equistar shall deliver paper copies of the information referred to in Section 5.05(b), 5.05(c) or 5.05(d) to the Administrative Agent for distribution to (x) any Lender to which the above referenced websites are for any reason not available if such Lender has so notified Equistar and (y) any Lender that has notified Equistar that it desires paper copies of all such information.

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Section 5.06. Borrowing Base Reports. Furnish to the Administrative Agent (and the Administrative Agent shall thereafter deliver to each Lender):

(i) as soon as available and in any event within (x) until July 31, 2004, 21 days and (y) thereafter, 17 days after the last day of each calendar month, a completed Borrowing Base Certificate calculating and certifying the Borrowing Base as of the end of such calendar month, signed on behalf of the Borrowers by a Principal Financial Officer;

(ii) promptly after any request therefor, such other information in such detail concerning the amount, composition and manner of calculation of the Borrowing Base as the Administrative Agent may reasonably request; and

(iii) as soon as practicable and in any event within two Business Days after any disposition outside the ordinary course of business (including by way of casualty or condemnation) of Collateral having a book value exceeding $10,000,000, an updated Borrowing Base Certificate calculating (on a pro forma basis, after giving effect to such disposition and reflecting only the changes to the affected component of Eligible Inventory) and certifying such pro forma Borrowing Base as of the end of the most recent calendar month for which a Borrowing Base Certificate was delivered pursuant to clause (i) above. The Borrowing Base set forth in each Borrowing Base Certificate delivered with respect to each calendar month occurring after the calendar month covered by the updated Borrowing Base Certificate described in the preceding sentence and ending prior to any such disposition shall be calculated on a pro forma basis, after giving effect to such disposition.

At their option, no more frequently than quarterly, the Borrowers may obtain a new Appraisal Report, and the Borrowers shall submit to the Administrative Agent such Appraisal Report, together with a Borrowing Base Certificate based on such Appraisal Report and otherwise complying with paragraph (i) above.

Section 5.07. Litigation and Other Notices, Etc. Give the Administrative Agent prompt written notice (which the Administrative Agent shall promptly deliver to the Lenders) after any Responsible Officer learns of the following:

(a) the issuance by any Governmental Authority of any injunction, order, decision or other restraint prohibiting, or having the effect of prohibiting, the transactions contemplated by the Loan Documents, including the making of the Loans, or having the effect of invalidating any provision of this Agreement or any other Loan Document or the initiation of any litigation or similar proceeding seeking any such injunction, order, decision or other restraint;

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(b) the filing or commencement of any action, suit or proceeding against Equistar or any Subsidiary, whether at law or in equity or by or before any Governmental Authority or any arbitrator, as to which action, suit or proceeding there is a reasonable possibility of an adverse determination and which, if determined adversely to Equistar or any Subsidiary, could reasonably be expected to result in a Material Adverse Effect;

(c) the occurrence of any development or event or any change in the business, assets, results of operations, financial condition or prospects of Equistar and its Subsidiaries, taken as a whole, which could reasonably be expected to result in a Material Adverse Effect; and

(d) the existence of (i) any Triggering Event or (ii) any Default, specifying the nature and extent thereof and the action (if any) which is proposed to be taken with respect thereto.

Section 5.08. ERISA. (a) Comply in all material respects with the applicable provisions of ERISA, except where noncompliance could not reasonably be expected to result in a Material Adverse Effect, and (b) furnish to the Administrative Agent (i) as soon as possible, and in any event within 30 days after any Responsible Officer knows that any Reportable Event has occurred that alone or together with any other Reportable Event could reasonably be expected to result in liability of Equistar or any Subsidiary to the PBGC in an amount that could reasonably be expected to result in a Material Adverse Effect, a statement of a Principal Financial Officer setting forth details as to such Reportable Event and the action proposed to be taken with respect thereto, together with a copy of the notice, if any, of such Reportable Event given to the PBGC, (ii) promptly after receipt thereof, a copy of any notice that Equistar or any Subsidiary may receive from the PBGC of an intent to terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) or to appoint a trustee to administer any Plan or Plans and (iii) promptly and in any event within 30 days after receipt thereof by Equistar or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy of each notice concerning (A) the imposition of any Withdrawal Liability in an amount that could reasonably be expected to result in a Material Adverse Effect or (B) a determination that a Multiemployer Plan is, or is expected to be, terminated or in reorganization, both within the meaning of

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Title IV of ERISA, which, in each case, is expected to result in an increase in annual contributions of Equistar or any Subsidiary to such Multiemployer Plan in an amount that could reasonably be expected to result in a Material Adverse Effect.

Section 5.09. Books of Accounts; Examination of Records; Audits. Keep and maintain proper books of record and account and a system of accounting established and administered in accordance with sound business practice and adequate to permit the preparation of the financial statements required to be delivered under 5.05, and upon reasonable notice permit representatives of the Administrative Agent to have access to such books of record and account and the premises of Equistar or any Subsidiary at reasonable times and to make such excerpts from such books of record and account as such representatives reasonably deem necessary in connection with their evaluation of the ability of the Borrowers to repay the Loans.

Section 5.10. Compliance with Laws, Etc. Comply with all applicable laws, rules and regulations, and all orders of any Governmental Authority applicable to it or any of its property, business, operations or transactions to the extent noncompliance could reasonably be expected to result in a Material Adverse Effect.

Section 5.11. Environmental Compliance. Comply with all Environmental and Safety Laws, except where the failure so to comply could not reasonably be expected to result in a Material Adverse Effect, and provide prompt written notice to the Administrative Agent following the receipt of any notice of any violation of any Environmental and Safety Laws from any Federal, state or local Governmental Authority or any other complaint or other written claim from any Person with respect to any Environmental Liability, in each case, which could reasonably be expected to result in liability or expenses in excess of $20,000,000.

Section 5.12. Information Regarding Collateral. Give the Administrative Agent at least 20 days’ prior written notice of any proposal to change any Loan Party’s (i) name, (ii) form of organization, (iii) jurisdiction of organization, (iv) organizational number or (v) Federal Taxpayer Identification Number.

Section 5.13. Further Assurances. (a) If (i) any Material Subsidiary (other than the LaPorte Joint Venture, a Foreign Subsidiary or a Joint Venture Subsidiary) is formed or acquired or any Subsidiary (other than a Foreign Subsidiary or a Joint Venture Subsidiary) becomes a Material Subsidiary, in each case, after the Effective Date or (ii) any Subsidiary at any time Guarantees any Indebtedness of any Borrower, within the time frame specified below, notify the Administrative Agent thereof and cause the Collateral Requirement to be satisfied with respect to such Material Subsidiary or Subsidiary, as the case may be. The

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actions required to be taken pursuant to this subsection shall be taken (x) if the requirement to take such action arises by reason of a transaction, as in the case of the formation or acquisition of a Material Subsidiary, or the Guarantee of Indebtedness of any Borrower by a Subsidiary, within three Business Days of consummation of such transaction and (y) if the requirement to take such action arises because of changes in the relevant computations to determine whether a Subsidiary is a Material Subsidiary as reflected in the most recent consolidated financial statements of Equistar made available to the Lenders hereunder, within 15 days after such financial statements are so made available.

(b) Promptly upon request by the Administrative Agent or the Required Lenders:

(i) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof;

(ii) execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), which may be required under any applicable law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral Requirement to be and remain satisfied, all at the expense of the Loan Parties. The Borrowers also agree to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Collateral Documents; and

(iii) permit the Administrative Agent and any representatives designated by it (including any consultants, accountants, lawyers and appraisers retained by the Administrative Agent) to conduct collateral reviews and evaluations and appraisals of the assets included in the Borrowing Base and the Borrowers’ computation of the Borrowing Base, all at such reasonable times and as often as reasonably requested and, except during the continuance of a Default, upon at least ten Business Days’ (or, during the continuance of a Triggering Event of the type described in clause (iii), (iv) or (v) of the definition of “Triggering Event”, five Business Days’) prior notice. Equistar shall pay (i) the documented fees and expenses of employees or other representatives of the Administrative Agent (with in-house field examination charges being limited to $1,000 per day per person (employee or representative) plus such person’s reasonable out-of-pocket expenses, including travel expenses) incurred in connection with periodic collateral reviews and

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evaluations (or in connection with an appraisal pursuant to (ii) below) and (ii) any inventory appraisal firm retained by the Administrative Agent, in consultation with the Borrowers, to conduct any such appraisals; provided that Equistar shall not be required to pay such fees and expenses for collateral reviews and evaluations performed by the Administrative Agent, except (A) in respect of up to four such collateral reviews and evaluations performed by the Administrative Agent in any calendar year and (B) in respect of any such collateral reviews and evaluations performed by the Administrative Agent during the continuance of a Default; and provided further that Equistar shall not be required to pay the fees and expenses of inventory appraisal firms hired by the Administrative Agent, except (x) in respect of up to four inventory appraisals per calendar year, provided that unless Total Excess Availability is less than $100,000,000 during any period of five consecutive Business Days within any twelve-month period, Equistar shall only be required to pay the fees and expenses of an inventory appraisal firm hired by the Administrative Agent in respect of one inventory appraisal conducted during such twelve-month period and (y) in respect of any one or more additional inventory appraisals conducted at the request of the Administrative Agent during the continuance of a Default. The Administrative Agent and any representative designated by the Administrative Agent to conduct such collateral reviews, evaluations and appraisals shall, during any review, inspection or other activity performed at any of the Borrowers’ plant sites, (X) be accompanied at all times by a plant safety representative (and the Borrowers hereby agree to cause such a plant safety representative to be available for such purpose at such reasonable hours as may be requested and upon reasonable prior notice) and (Y) comply at all times with the Borrowers’ rules regarding safety and security to the extent that the Administrative Agent or representative has been notified of such rules. The Administrative Agent shall furnish to each Lender a copy of the final written collateral review or appraisal report prepared in connection with such review or appraisal. The Administrative Agent shall furnish to the Borrowers a copy of the final appraisal report prepared in connection with any such appraisal, and shall provide the Borrowers with a summary of the Collateral analysis contained in any final written collateral review, in each case not less than two Business Days prior to delivery thereof to the Lenders.

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ARTICLE 6

NEGATIVE COVENANTS

Until the Commitments have expired or been terminated, the principal of and interest on each Loan and all Fees payable hereunder have been paid in full, all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, Equistar covenants and agrees with the Lenders that it will not, and will not permit any of its Material Subsidiaries, either directly or indirectly, to:

Section 6.01. Liens. Incur, create, assume or permit to exist any Lien on any of its property or assets, whether owned at the date hereof or hereafter acquired, or assign or convey any rights to or security interests in any future revenues, except:

(a) Liens incurred and pledges and deposits made in the ordinary course of business in connection with workmen’s compensation, disability or unemployment insurance, old-age pensions, retiree health benefits and other social security benefits and deposits securing liabilities to insurance carriers under insurance or self-insurance arrangements;

(b) Liens securing the performance of bids, tenders, leases, government contracts, other contracts (other than for Indebtedness), statutory and regulatory obligations, surety, customs bonds and other obligations of a like nature, incurred as an incident to and in the ordinary course of business;

(c) Liens encumbering pipelines or pipeline facilities that arise by operation of law, and other Liens imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and vendors’ liens, incurred in good faith in the ordinary course of business and securing obligations which are not overdue for a period of more than 90 days or which are being contested in good faith by appropriate proceedings as to which Equistar or any such Subsidiary, as the case may be, shall have, to the extent required by GAAP, set aside on its books adequate reserves;

(d) Liens securing the payment of taxes, assessments and governmental charges or levies, either (i) not delinquent or (ii) being contested in good faith by appropriate legal or administrative proceedings and as to which Equistar or any such Subsidiary, as the case may be, shall have, to the extent required by GAAP, set aside on its books adequate reserves;

(e) (i) zoning restrictions, easements, licenses, reservations, provisions, covenants, conditions, waivers, restrictions on the use of property, minor irregularities of title and similar encumbrances incurred or suffered in the ordinary

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course of business (and with respect to leasehold interests, the interest of the landlord or owner in the leased property and mortgages, obligations, liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the leased property, with or without consent of the lessee) and (ii) licenses or leases of patents, copyrights, trademarks, tradenames and other intellectual property, which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business;

(f) Liens (including the interest of a lessor under a capital lease) upon any real property or equipment (including general intangibles and proceeds related thereto) acquired (by merger or otherwise), constructed or improved by Equistar or any Material Subsidiary which are created or incurred prior to or within 180 days after such acquisition, construction or improvement to secure or provide for the payment of any part of the purchase price of such real property or equipment or the cost of such construction or improvement (including any Indebtedness incurred to finance such purchase, improvement or construction cost), including carrying costs (but no additional amounts); provided that any such Lien shall not apply to any other property of Equistar or any Material Subsidiary;

(g) Liens on property existing at the time such property is acquired (by merger or otherwise) by Equistar or any Material Subsidiary (provided that such Liens do not apply to any other property of Equistar or any Material Subsidiary and such Liens and the obligations secured thereby were not created in contemplation of the acquisition by Equistar or such Material Subsidiary of such property) and Liens on property of any Person at the time such Person becomes a Material Subsidiary (provided that such Liens do not apply to any other property of Equistar or any Material Subsidiary and such Liens and the obligations secured thereby (other than any Liens on real property or equipment and the obligations secured thereby) were not created in contemplation of such Material Subsidiary’s acquisition of such property or of such Person becoming a Material Subsidiary);

(h) Liens on the property or assets of any Material Subsidiary in favor of Equistar or any Subsidiary;

(i) Liens resulting from the deposit of funds or evidences of Indebtedness in trust for the purpose of defeasing Indebtedness of Equistar or any of its Material Subsidiaries (which defeasance is otherwise permitted under this Agreement) having an aggregate principal amount at any one time outstanding not to exceed $25,000,000;

(j) Liens on Transferred Receivables (as defined in the Security Agreement), and related assets described in Section 3(b) of the Security Agreement, created in connection with the Securitization Facility with respect to such Transferred Receivables and related assets;

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(k) extensions, renewals and replacements of Liens referred to in clauses (a) through (i) above; provided that any such extension, renewal or replacement Lien shall be limited to the property or assets covered by the Lien extended, renewed or replaced and that the obligations secured by any such extension, renewal or replacement Lien shall be in an amount not greater than the amount of the obligations secured by the Lien extended, renewed or replaced;

(l) prejudgment Liens which are being contested in good faith by appropriate proceedings;

(m) judgment Liens which are being contested in good faith by appropriate proceedings and Liens securing appeal or similar surety bonds therefor; provided that (i) no Event of Default exists under Section 7.01(k) relating thereto and (ii) the aggregate amount secured by such Liens does not exceed $20,000,000 (exclusive of Liens securing judgments covered by (x) insurance in respect of which the carrier has not contested coverage or (y) appeal or similar surety bonds);

(n) licenses, leases or subleases granted to others (other than those described in clause (e)) and Liens arising under capacity reservation or similar agreements, in each case to the extent that any of the foregoing do not materially interfere with the ordinary course of business of Equistar and its Subsidiaries;

(o) customary Liens for the fees, costs and expenses of trustees and escrow agents pursuant to any indenture, escrow agreement or similar agreement establishing a trust or escrow arrangement, and Liens pursuant to merger agreements, stock purchase agreements, asset sale agreements, option agreements and similar agreements in respect of the disposition of property or assets of Equistar and the Subsidiaries (but in any event not securing Indebtedness), to the extent such dispositions are permitted hereunder and such Liens relate only to the assets or properties to be disposed of;

(p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(q) customary Liens not encumbering Eligible Inventory in favor of issuers of documentary letters of credit;

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(r) Liens encumbering customary initial deposits and margin deposits, netting provisions and setoff rights in favor of counterparties securing Indebtedness under Hedging Agreements;

(s) Liens arising under any Sale/Leaseback Transaction; provided that any such Lien shall be limited to the assets subject to such Sale/Leaseback Transaction and shall not encumber any Collateral;

(t) Liens arising in connection with the pledge of any Equity Interests in any joint venture (that is not a Material Subsidiary) or any Subsidiary (other than a Material Subsidiary) to secure Non-Recourse Debt of such joint venture or Subsidiary, which pledge is made by a Material Subsidiary the activities of which are limited to making and managing Investments, and owning Equity Interests, in such joint venture or Subsidiary, but only for so long as its activities are so limited. For purposes hereof, “Non-Recourse Debt” shall mean Indebtedness as to which (i) the lenders will not, pursuant to the terms in the agreements governing such Indebtedness, have any recourse to the stock or assets of Equistar or any Material Subsidiary, other than Equity Interests of a joint venture that is not a Material Subsidiary or a Subsidiary that is not a Material Subsidiary pledged by Equistar or any Material Subsidiary as contemplated in the preceding sentence and (ii) no default thereunder would, as such, constitute a default under any Indebtedness of Equistar or any Material Subsidiary or give any rights to or in other assets of Equistar or any Material Subsidiary;

(u) Liens incurred or assumed in connection with the issuance of revenue bonds the interest on which is exempt from federal income taxation pursuant to Section 103(b) of the Code;

(v) Liens arising out of consignment or similar arrangements for the sale of goods entered into by Equistar or any Material Subsidiary in the ordinary course of business in accordance with industry practice;

(w) Liens on assets under construction securing progress or partial payments not constituting Indebtedness by a customer of Equistar or any Material Subsidiary relating to such assets;

(x) the interest of a lessor or licensor under an operating lease or license under which Equistar or any Material Subsidiary are lessee, sublessee or licensee, including protective financing statement filings;

(y) Liens created under the Collateral Documents; and

(z) Liens on assets other than Collateral which are “Permitted Liens,” as such term is defined in the Indentures (as in effect on the Effective Date, whether or not any such Indenture is in effect at the time in question), and not otherwise permitted under this Section 6.01;

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provided that, except for the Liens referred to in Sections 6.01(o) and 6.01(y), none of the foregoing exceptions shall permit Equistar or any Material Subsidiary to incur, create, assume or permit to exist any consensual Lien on the capital stock owned by it of any Material Subsidiary.

Section 6.02. Interest Coverage Ratio. If for any period of four consecutive fiscal quarters ending on or after March 31, 2005, the Interest Coverage Ratio calculated as of the end of such four-quarter period is less than 2:00 to 1:00, then an Event of Default shall occur under this Section 6.02 if there shall be a period of five consecutive Business Days ending at any time during the immediately following fiscal quarter during which Total Excess Availability is less than $100,000,000.

Section 6.03. Merger, Etc. (a) Consolidate with or merge into any other Person, or permit another Person to merge into it, except that, so long as at the time thereof and immediately after giving effect thereto no Default has occurred and is continuing, (A) any Subsidiary that is neither Equistar Receivables nor a Loan Party may be merged, liquidated or dissolved into any other Subsidiary that is neither Equistar Receivables nor a Loan Party, (B) any Subsidiary other than Equistar Receivables may be merged, liquidated or dissolved into Equistar or into any other Loan Party in a transaction in which the surviving Person is Equistar or such Loan Party, (C) any other Person that is not a Subsidiary may be merged into Equistar or any other Loan Party in a transaction in which the surviving Person is Equistar or a wholly owned Loan Party and, in the case of any transaction in which the consideration (other than equity interests of Equistar) paid by Equistar and the Material Subsidiaries has an aggregate value in excess of 10% of Consolidated Net Tangible Assets as of the most recently ended fiscal quarter, Equistar has submitted to the Administrative Agent calculations reasonably satisfactory to the Administrative Agent showing pro forma compliance with Sections 6.02 and (D) any Subsidiary that is neither Equistar Receivables nor (after giving effect to such transaction) a Loan Party may be merged, liquidated or dissolved in connection with an Asset Sale of such Subsidiary otherwise permitted hereunder.

(b) In the case of Equistar, sell or otherwise dispose of all or substantially all of its assets (determined on a consolidated basis) to any other Person or Persons.

(c) Enter into any Asset Sale unless (A) in the case of an Asset Sale of Collateral, (1) the consideration therefor is not less than the fair market value of such Collateral (as determined in good faith by a Principal Financial Officer) and

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(2) the consideration therefor consists solely of cash or cash equivalents and notes and equity Securities and at least 75% of the aggregate consideration received by Equistar and its Subsidiaries with respect to such Asset Sale is in the form of cash or cash equivalents received at or before closing; and (B) such Asset Sale is permitted by the Indentures (as in effect on the Effective Date, whether or not any such Indenture is in effect at the time in question). The amount of (x) any liabilities (as shown on Equistar’s or such Subsidiary’s most recent balance sheet) of Equistar or any Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Obligations or any guarantee thereof) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases Equistar or such Subsidiary from further liability and (y) any securities, notes or other obligations received by Equistar or any such Subsidiary from such transferee that are promptly monetized or converted by Equistar or such Subsidiary into cash (to the extent of the cash received), shall be deemed to be cash for purposes of this provision.

(d) Enter into a Securitization Transaction other than the Securitization Facility.

Section 6.04. Organizational Documents; Change of Name; Change of Business. (a) Engage to any material extent in any business other than a Permitted Business; provided that Equistar and the Material Subsidiaries may engage in other businesses representing not more than 2% of Consolidated Net Tangible Assets of Equistar as shown on the most recent audited consolidated balance sheet of Equistar and its Consolidated Subsidiaries delivered pursuant to Section 5.05; and provided further that a Material Subsidiary which was a Subsidiary before it became a Material Subsidiary may continue to engage in any business in which it was engaged at the time it became a Material Subsidiary.

(b) Permit Equistar Funding to hold any assets, become liable for any obligations or engage in any business activities; provided that Equistar Funding may be co-obligor with respect to Indebtedness of the Borrowers permitted under Section 6.11 and may engage in any activities directly related thereto or necessary in connection therewith.

Section 6.05. Use of Proceeds. (a) Use or permit the use of the proceeds of Borrowings or other extensions of credit hereunder for purposes other than those set forth in the preamble to this Agreement.

(b) Use the proceeds of Borrowings or other extensions of credit hereunder to acquire any Security in any transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of 1934 unless such transaction shall have been approved by the board of directors (or comparable governing body) of the issuer of such Security.

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Section 6.06. Restrictive Agreements. Enter into or permit to exist any agreement that restricts the ability of any Material Subsidiary to pay dividends or other distributions, or to make or repay loans or advances, to Equistar or, in the case of dividends, to any other Subsidiary owning capital stock of such Subsidiary; provided that the foregoing shall not apply to:

(a) customary restrictions and conditions contained in (i) any agreement relating to the sale of a Material Subsidiary, or all or substantially all of its assets, pending such sale or (ii) any agreement relating to secured Indebtedness permitted by this Agreement, if such restrictions or conditions apply only to such Subsidiary or to the property or assets securing such Indebtedness, as the case may be;

(b) customary provisions in leases and other contracts restricting the assignment thereof;

(c) restrictions and conditions existing with respect to any Person at the time it becomes a Material Subsidiary and not created in contemplation of such Person becoming a Material Subsidiary, which restrictions are not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person becoming a Material Subsidiary;

(d) existing agreements as in effect on the Effective Date and listed on Schedule 6.06;

(e) restrictions arising under applicable law;

(f) restrictions contained in agreements governing Indebtedness permitted hereunder which restrictions are not materially less favorable to Equistar and its Subsidiaries than the terms of the 2001 Indenture (as in effect on the Effective Date, whether or not such Indenture is in effect at the time in question) and restrictions in Section 6.12 hereof on dividends and distributions by a Subsidiary to Equistar or another Subsidiary;

(g) in the case of a Material Subsidiary that is a joint venture, customary restrictions on such Material Subsidiary contained in its joint venture agreement, which restrictions are consistent with the past practice of Equistar and members of the Existing Control Group (as conclusively evidenced by a resolution of the Partnership Governance Committee); or

(h) the Securitization Facility.

Section 6.07. Business Acquisitions. Make any Business Acquisition unless after giving effect thereto, the aggregate cash consideration paid by Equistar and its Consolidated Subsidiaries for all Business Acquisitions consummated in any Fiscal Year would not exceed the sum of (i) $25,000,000

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plus (ii) the net cash proceeds of any substantially contemporaneous issuance of Equity Interests by Equistar which do not constitute Indebtedness (including a capital contribution in respect of such Equity Interests) for the purpose of financing a particular Business Acquisition.

Section 6.08. Affiliate Transactions. Directly or indirectly (a) pay any funds to or for the account of any Affiliate, (b) make any investment in any Affiliate (whether by acquisition of stock or indebtedness, by loan, advance, transfer of property, guarantee or other agreement to pay, purchase or service, directly or indirectly, any Indebtedness, or otherwise), (c) lease, sell, transfer or otherwise dispose of any assets, tangible or intangible, to any Affiliate, or (d) participate in, or effect, any transaction with any Affiliate, except on terms that are no less favorable to Equistar or such Material Subsidiary, as the case may be, than those that could be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate; provided that the foregoing provisions of this Section shall not prohibit:

(i) any transaction between (x) a Loan Party and another Loan Party or (y) Equistar and a Subsidiary, or a Subsidiary and another Subsidiary, so long as (A) any such transaction involving a disposition of Collateral by a Loan Party to a Subsidiary that is not a Loan Party is on terms that are no less favorable to such Loan Party than those that could be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate and (B) any Indebtedness thereby incurred by any Loan Party owing to a Subsidiary other than a Loan Party shall be subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent;

(ii) any dividend, distribution or other payment in respect of Equity Interests permitted by Section 6.12 or Investment permitted by Section 6.13;

(iii) any Subsidiary from declaring or paying any lawful dividend or other payment ratably in respect of all its capital stock of the relevant class;

(iv) transactions or payments pursuant to any employment agreement or employee, officer or director benefit plans or arrangements entered into by Equistar or any Subsidiary in the ordinary course of business;

(v) customary loans, advances, fees and compensation paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of Equistar or any Subsidiary;

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(vi) transactions in connection with the Securitization Facility; and

(vii) transactions entered into by a Person prior to the time such Person becomes a Material Subsidiary and not entered into in contemplation of such Person becoming a Material Subsidiary.

Section 6.09. Hedging Agreements. Enter into any transaction involving Hedging Agreements, other than Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which Equistar or any Subsidiary is exposed in the conduct of its business or the management of its liabilities (as determined by a Principal Financial Officer in the exercise of his or her good faith business judgment).

Section 6.10. Prepayment of Debt. Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Indebtedness; provided, however, that Equistar or any Material Subsidiary may:

(a) prepay any obligations hereunder in accordance with the terms of this Agreement;

(b) make regularly scheduled or otherwise required repayments or redemptions of Indebtedness;

(c) prepay any Indebtedness payable to (i) a Equistar or a Subsidiary or (ii) Lyondell or a subsidiary of Lyondell, including any “JV Subsidiary” as defined in the Amended and Restated Credit Agreement among Lyondell and the lenders and agents party thereto dated as of June 27, 2002;

(d) make prepayments which are part of a Permitted Refinancing;

(e) pay off the railcar lease obligation identified as item 2 on Schedule 6.11;

(f) prepay or redeem other Indebtedness with the net cash proceeds of (i) a substantially contemporaneous issuance by Equistar of Equity Interests which do not constitute Indebtedness (including a capital contribution in respect of such Equity Interests) or (ii) voluntary or involuntary dispositions of assets (other than Collateral) by Equistar and its Subsidiaries; and

(g) prepay or redeem any other Indebtedness provided that before and after giving effect to such prepayment the daily average Total Excess Availability for the period of 30 consecutive calendar days then ended (calculated on a pro forma basis) is not less than $100,000,000;

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provided that in no event shall Equistar or any Material Subsidiary make any payment in respect of any Indebtedness which is by its terms subordinated to the Obligations which payment is prohibited by the subordination provisions governing such Indebtedness.

Section 6.11. Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except for the following:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness and railcar lease obligations existing on the date of this Agreement and disclosed on Schedule 6.11;

(c) Guarantees in respect of Indebtedness permitted by this Section 6.11;

(d) Capitalized Lease Obligations and purchase money Indebtedness incurred to finance the acquisition of fixed assets; provided, however, that the Capital Expenditures related thereto are otherwise permitted hereunder and that the aggregate outstanding principal amount of all such Capitalized Lease Obligations and purchase money Indebtedness shall not exceed $50,000,000 at any time;

(e) obligations arising under the Securitization Facility;

(f) Indebtedness represented by industrial revenue bonds to finance capital expenditures incurred to reduce NOx emissions in the Houston/Galveston region pursuant to a Texas Natural Resource Conservation Commission plan;

(g) Renewals, extensions, refinancings and refundings of Indebtedness permitted by clause (b), (d), (e) or (f) above or this clause (g); provided, however, that any such renewal, extension, refinancing or refunding is (i) in an aggregate principal amount not greater than the principal amount (excluding premium, if any, and costs of issuance) of, and (ii) on terms no less favorable taken as a whole to Equistar and its Material Subsidiaries than, and having a remaining weighted average life to maturity no shorter than, the Indebtedness being renewed, extended, refinanced or refunded;

(h) Indebtedness owing to any Loan Party;

(i) Indebtedness represented by standby letters of credit, trade letters of credit or documentary letters of credit, in each case incurred in the ordinary course of business of Equistar and in an aggregate principal or face amount not to exceed $20,000,000 at any time; and

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(j) Indebtedness permitted by the Indentures (as in effect on the Effective Date, whether or not any such Indenture is in effect at the time in question) and not otherwise permitted under this Section 6.11.

Section 6.12. Restricted Payments. Declare or pay any dividend or make any distribution on account of its or such Material Subsidiary’s Equity Interests (other than a dividend or distribution paid by a Subsidiary to Equistar or another Subsidiary or, if paid by a Subsidiary which is not directly or indirectly wholly owned by Equistar, ratably to all holders of a class or series of Equity Interests in such non-wholly-owned Subsidiary or on a basis more favorable to a Loan Party) or purchase, redeem or otherwise acquire or retire for value any Equity Interests of Equistar or any Affiliate of Equistar that controls Equistar, except to the extent that, both before and after giving effect to such dividend, distribution, purchase, redemption, acquisition or retirement, (i) except in the case of a Permitted Dividend, an Equity Refinancing or distributions or payments of Receivables Fees, the daily average Total Excess Availability exceeds $100,000,000 for the period of 30 consecutive calendar days then ended and (ii) no Default would occur and be continuing. It is understood that distributions by any Subsidiary or Joint Venture of chemicals to a holder of Equity Interests of such Subsidiary or Joint Venture if such distributions are made pursuant to a provision in a joint venture agreement or other arrangement entered into a connection with the establishment of such Joint Venture or Subsidiary that requires such holder to pay a price for such chemicals equal to that which would be paid in a comparable transaction negotiated on an arms-length basis (or pursuant to a provision that imposes a substantially equivalent requirements) are not subject to the foregoing limitations.

Section 6.13. Restricted Investments. Make, acquire or hold any Investment other than (i) Investments existing on the Effective Date and set forth in Schedule 6.13, (ii) Investments in Subsidiaries permitted by the Indentures (as in effect on the Effective Date, whether or not any such Indenture is in effect at the time in question), (iii) Investments permitted by Section 6.07, (iv) Investments in any Joint Venture Subsidiary permitted by the Indentures (as in effect on the date hereof whether or not such Indenture is in effect at the time in question), (v) Investments represented by amounts in deposit accounts or securities accounts required to be maintained under the “control” (as defined in the UCC) of the Administrative Agent under the Collateral Documents or under the “control” of the administrative agent under the Securitization Facility, (vi) Investments made, acquired or held in the ordinary course of business, (vii) Investments in Equistar Receivables pursuant to the Securitization Facility and (viii) Investments permitted by the Indentures (as in effect on the Effective Date, whether or not any such Indenture is in effect at the time in question.)

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Section 6.14. Capital Expenditures. For each Fiscal Year, the Capital Expenditures of Equistar and its Consolidated Subsidiaries shall not exceed the applicable Limit Amount set forth in the table below, plus the amount, if any (not to exceed 10% of the Limit Amount, if any, for the immediately preceding Fiscal Year), by which their Capital Expenditures for the immediately preceding Fiscal Year is less than the Limit Amount for such Fiscal Year set forth below:

Fiscal Year	Limit Amount
2003	$	125,000,000
2004	$	200,000,000
2005 or thereafter	$	250,000,000

ARTICLE 7

EVENTS OF DEFAULT

Section 7.01. Events of Default. In case of the happening of any of the following events (herein called “Events of Default”):

(a) any representation or warranty made or deemed made by or on behalf of any Loan Party in or in connection with the Loan Documents or the extensions of credit thereunder or any representation, warranty or statement made or deemed made by or on behalf of any Loan Party with respect to any financial statement or in any report, certificate or other instrument or agreement furnished in connection with the Loan Documents or in connection with the extensions of credit thereunder shall prove to have been false or misleading in any material respect when made or deemed made; provided that to the extent that the representations and warranties in Sections 3.06(c) or 3.13 apply to any such report, certificate or other instrument or agreement, then the foregoing shall not apply to any representation, warranty or statement made or deemed made in such report, certificate or other instrument or agreement unless the representations and warranties in Sections 3.06(c) or 3.13, as applicable, as they relate to such report, certificate or other instrument or agreement shall prove to have been false or misleading in any material respect when made or deemed made;

(b) default shall be made in the payment of any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise;

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(c) default shall be made in the payment of any interest on any Loan or any Fee or any other amount due under this Agreement when and as the same shall become due and payable, and such default shall continue for a period of five days;

(d) (i) default shall be made in the due observance or performance of any covenant, condition or agreement contained in Section 5.01, 5.06 5.07, 5.12 or 5.13 or in Article 6 or in Section 6 of the Security Agreement; (ii) default shall be made in the due observance or performance of any covenant, condition or agreement contained in Section 5.03 or Section 5.05, which default referred in this clause (ii) shall continue for a period of five days; or (iii) default shall be made in the due observance or performance of any other covenant, condition or agreement to be observed or performed on the part of Equistar or any Subsidiary pursuant to the terms of any Loan Document, which default referred to in this clause (iii) shall continue unremedied for 30 days after the earlier of (A) the date on which any Responsible Officer becomes aware of such default and (B) the date on which notice thereof shall have been given to the Borrowers by either the Administrative Agent or the Required Lenders;

(e) Equistar or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code or any other Federal or state bankruptcy, insolvency, liquidation or similar law, (ii) consent to the institution of, or fail to contravene in a timely and appropriate manner in, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for Equistar or any Material Subsidiary or for a substantial part of its property or assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable or fail generally to pay its debts as they become due or (vii) take any company or partnership or similar action to authorize any of the actions set forth in this subsection (e) or subsection (f);

(f) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of Equistar or any Material Subsidiary or of a substantial part of the property or assets of Equistar or any Material Subsidiary, under Title 11 of the United States Code or any other Federal or state bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official for Equistar or any Material Subsidiary or for a substantial part of the property or assets of Equistar or any Material Subsidiary or (iii) the winding up or liquidation of Equistar or any Material Subsidiary; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for 30 days;

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(g) (i) default shall be made or another event shall occur with respect to any Indebtedness in an aggregate amount in excess of $50,000,000 of Equistar or any Subsidiary if the effect of any such default or other event shall be to accelerate, or to permit the holder or obligee of any Indebtedness (or any trustee on behalf of such holder or obligee) to accelerate (with or without the giving of notice or lapse of time or both), or (ii) any amount of principal of or interest on any Indebtedness of Equistar or any Subsidiary in an aggregate principal amount in excess of $50,000,000 shall not be paid when due, whether at maturity, by acceleration or otherwise (after giving effect to any period of grace specified in the instrument evidencing or governing such Indebtedness); or (iii) without limiting the rights of the Lenders under clauses (g)(i) and (g)(ii) above, Equistar or any Subsidiary shall default in the payment of principal of any Indebtedness, which principal, individually or in the aggregate with other defaulted principal, shall be in excess of $15,000,000, when due and payable (after giving effect to any period of grace specified in the instrument evidencing or governing such Indebtedness), or the principal of such Indebtedness in excess of $15,000,000 shall be declared due and payable prior to the date on which it would otherwise be due and payable and such acceleration shall not have been rescinded or annulled within five Business Days of such acceleration; or (iv) an “Event of Termination” shall exist under (and as defined in) the Securitization Facility;

(h) (i) a Reportable Event or Reportable Events, or a failure to make a required payment (within the meaning of Section 412(n)(1) of the Code), shall have occurred with respect to any Plan or Plans that reasonably could be expected to result in a Material Adverse Effect; or (ii) a trustee shall be appointed by a United States District Court to administer any such Plan or Plans or the PBGC shall institute proceedings to terminate any Plan or Plans and such appointment or termination proceedings could reasonably be expected to result in a Material Adverse Effect; or

(i) (i) Equistar or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan, (ii) Equistar or such ERISA Affiliate does not have reasonable grounds for contesting such Withdrawal Liability or is not, in fact, contesting such Withdrawal Liability in a timely and appropriate manner and (iii) the amount of the Withdrawal Liability specified in such notice, when aggregated with all other amounts required to be paid by Equistar and its ERISA Affiliates to Multiemployer Plans in connection with Withdrawal Liabilities (determined as of the date or dates of such notification), could reasonably be expected to result in a Material Adverse Effect; or

(j) Equistar or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if

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solely as a result of such reorganization or termination the aggregate annual contributions of Equistar and its ERISA Affiliates to all Multiemployer Plans that are then in reorganization or have been or are being terminated have been or will be increased could reasonably be expected to result in a Material Adverse Effect; or

(k) one or more judgments or orders for the payment of money (not reimbursed by insurance policies of Equistar or any Subsidiary) in excess of $20,000,000 in the aggregate shall be rendered by a court or other tribunal or governmental agency against Equistar or any Subsidiary and shall remain undischarged for a period of 30 consecutive days during which the execution of such judgments shall not have been stayed effectively or any action shall be legally taken by a judgment creditor to levy upon assets or properties of Equistar or any Subsidiary to enforce any such judgment;

(l) a Change in Control shall occur;

(m) (i) any Lien created by any of the Collateral Documents shall at any time fail to constitute a valid and (to the extent required by the Collateral Documents) perfected Lien on all the Collateral purported to be subject thereto, securing the obligations purported to be secured thereby, with the priority required by the Loan Documents, except by reason of action taken voluntarily by the Administrative Agent, or the failure by the Administrative Agent to take action required to be taken by it hereunder, or (ii) any Loan Party shall so assert in writing;

(n) any Loan Document shall cease for any reason (other than pursuant to a transaction permitted hereunder) to be in full force and effect, or any Loan Party shall so assert in writing; or

(o) (i) Excess Availability shall for a period of two consecutive Business Days be less than (x) $30,000,000 from the Effective Date through March 30, 2005 or (y) $20,000,000 thereafter, or (ii) Total Excess Availability shall for a period of two consecutive Business Days be less than (x) $75,000,000 from the Effective Date through March 30, 2005 or (y) $50,000,000 thereafter;

then, and in any such event (other than an event with respect to a Loan Party described in paragraph (e) or (f) above), and at any time thereafter during the continuance of such event, the Administrative Agent may, or at the written direction of the Required Lenders shall, by written or telecopied notice to the Borrowers, take any or all of the following actions, at the same or different times: (i) terminate forthwith the Commitments, (ii) demand cash collateral as provided in Section 2.06(k) and (iii) declare the Loans then outstanding to be forthwith due and payable, whereupon the principal of the Loans so declared due and payable,

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together with accrued interest and any unpaid accrued Fees and all other liabilities of the Borrowers accrued hereunder, shall become forthwith due and payable both as to principal and interest, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrowers, anything contained herein to the contrary notwithstanding; provided, however, that, in the event of a default with respect to a Loan Party described in paragraph (e) or (f) above, the Commitments shall automatically terminate, the deposit of cash collateral as provided in Section 2.06(k) shall automatically be required and the principal of the Loans then outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrowers accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrowers, anything contained herein to the contrary notwithstanding.

ARTICLE 8

ADMINISTRATIVE AGENT

Each of the Lenders and Fronting Banks irrevocably authorizes the Administrative Agent to take such action on its behalf and to exercise such powers under the Loan Documents as are specifically delegated to the Administrative Agent by the terms thereof together with such powers as are reasonably incidental thereto. The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents selected and appointed by such Administrative Agent. Each of the Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through Affiliates or its or its Affiliates’ employees. The exculpatory provisions of the following paragraphs shall apply to any such sub-agent, to the Affiliates of the Administrative Agent and any such sub-agent and to the directors, officers and employees of the Administrative Agent, any such sub-agent and their respective Affiliates.

The Administrative Agent is hereby expressly authorized and directed by the Lenders to the extent provided in this Agreement, without hereby limiting any implied authority, (a) to receive on behalf of the Lenders all payments of principal of and interest on the Loans and all other amounts due to the Lenders under the Loan Documents, and promptly to distribute to each Lender its proper share of each payment so received; (b) to give notice on behalf of each of the Lenders to the Borrowers of any Event of Default specified in this Agreement of which the Administrative Agent has actual knowledge acquired in connection with its agency hereunder; and (c) to distribute to each Lender copies of all notices, financial statements and other materials delivered by the Borrowers pursuant to the Loan Documents as received by the Administrative Agent.

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Neither the Administrative Agent nor any of their directors, officers, employees or agents shall be liable as such for any action taken or omitted to be taken by it or them under the Loan Documents or in connection therewith (a) at the request or with the approval of the Required Lenders (or, if otherwise specifically required hereunder, the consent of all the Lenders) or (b) in the absence of its or their own gross negligence or willful misconduct. Each Lender acknowledges that it has decided to enter into this Agreement and to extend the Loans hereunder based on its own analysis of the creditworthiness of the Borrowers and agrees that the Administrative Agent shall bear no responsibility for such creditworthiness.

The Administrative Agent shall not be responsible in any manner to any of the Lenders for the effectiveness, enforceability, genuineness, validity or due execution of the Loan Documents or any other agreements or certificates, requests, financial statements, notices or opinions of counsel or for any recitals, statements, warranties or representations contained in the Loan Documents or in any such instrument or be under any obligation to ascertain or inquire as to the performance or observance of any of the terms, provisions, covenants, conditions, agreements or obligations of the Loan Documents or any other agreements on the part of any Loan Party and, without limiting the generality of the foregoing, the Administrative Agent shall, in the absence of knowledge to the contrary, be entitled to accept any certificate furnished pursuant to any Loan Document as conclusive evidence of the facts stated therein and shall be entitled to rely on any note, notice, consent, certificate, affidavit, letter, telegram, teletype or telecopy message, statement, order or other document which it reasonably believes to be genuine and correct and to have been signed or sent by the proper Person or Persons. It is understood and agreed that the Administrative Agent may exercise its rights and powers under other agreements and instruments to which it is or may be a party and engage in other transactions with Equistar or any Subsidiary or other Affiliate as though it were not the agent of the Lenders hereunder.

The Administrative Agent may consult with legal counsel selected by it in connection with matters arising under the Loan Documents and any action taken or suffered in good faith by it in accordance with the opinion of such counsel shall be full justification and protection to it. The Administrative Agent may exercise any of its powers and rights and perform any duty under the Loan Documents through agents or attorneys.

The Lenders shall ratably, in accordance with their Credit Exposures at the time of demand for indemnification hereunder, indemnify the Administrative Agent, in its capacity as agent on behalf of the Lenders (to the extent not reimbursed by the Borrowers pursuant to the terms hereof and without limiting the obligations of the Borrowers to do so) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or

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liability (except such as results from such Administrative Agent’s gross negligence or willful misconduct) that such Administrative Agent may suffer or incur in connection with this Agreement or any action taken or omitted by it under the Loan Documents.

Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by notifying the Lenders, the Fronting Banks and the Borrowers. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank having an office (or an Affiliate with an office) in New York, New York, with a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor bank, such successor shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any Administrative Agent’s resignation hereunder, the provisions of this Article shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

The Lenders hereby acknowledge that the Administrative Agent shall not be under any duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement unless it shall be requested in writing to do so by the Required Lenders or, where required, all the Lenders.

The Co-Collateral Agents and the Co-Documentation Agents shall have no responsibility, obligation or liability whatsoever under the Loan Documents in such capacity.

ARTICLE 9

THE OBLIGORS

Section 9.01. Appointment and Authorization of Borrowers’ Agent. Each of the Borrowers irrevocably appoints and authorizes the Borrowers’ Agent, as agent on its behalf, to exercise in its discretion all of the rights and powers of the Borrowers or any of them under the Loan Documents. Each of the Borrowers irrevocably agrees that the Agents and the Lenders may conclusively rely on the authority of the Borrowers’ Agent in the exercise of such rights and powers.

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Section 9.02. Joint and Several Obligations. The obligations of the Borrowers under the Loan Documents shall be joint and several. The Agents and the Lenders may enforce against any one or more Borrowers the obligations of the Borrowers to make the payments due under the Loan Documents, and each Borrower shall be responsible to the Agents and the Lenders for the full amount of such payments due. The obligations of each of the Borrowers under the Loan Documents shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

(i) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any other Loan Party under any Loan Documents, by operation of law or otherwise;

(ii) any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of any other Loan Party under any Loan Documents;

(iii) any change in the existence, structure or ownership of any other Loan Party;

(iv) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any other Loan Party or its assets or any resulting release or discharge of any obligation of any other Loan Party under any Loan Documents;

(v) any invalidity or unenforceability relating to or against any other Loan Party for any reason of any Loan Documents, or any provision of applicable law or regulation purporting to prohibit the payment by any other Loan Party of the principal of or interest on any Note or any other amount payable by any other Loan Party under any Loan Documents; or

(vi) any other act or omission to act or delay of any kind by any other Loan Party or any other corporation or Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the Borrowers’ obligations hereunder.

Section 9.03. Contribution; Subordination. Each Borrower (a “Contributing Borrower”) agrees that when a payment shall be made by any other Borrower under the Loan Documents upon enforcement thereof (such other Borrower, the “Claiming Borrower”), the Contributing Borrower shall indemnify the Claiming Borrower in an amount equal to the amount of such payment multiplied by a fraction of which the numerator shall be the net worth of

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the Contributing Borrower on December 31, 2002 (or, with respect to any Borrower becoming a party hereto pursuant to Section 9.04, the date such Contributing Borrower became a Borrower) and the denominator shall be the aggregate net worth of all Borrowers on December 31, 2002 (or, in the case of any Borrower becoming a party hereto pursuant to Section 9.04, the date such Borrower became a Borrower). All rights of the Borrowers under this Section and any other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of all amounts payable by the Borrowers pursuant to the Loan Documents.

Section 9.04. Limitation on Obligations of Subsidiary Borrowers. The obligations of each Subsidiary Borrower under this Agreement shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of applicable law.

ARTICLE 10

MISCELLANEOUS

Section 10.01. Notices. Except as specifically provided elsewhere herein, notices and other communications provided for herein shall be in writing and shall be delivered or mailed (or, if by telecopy equipment of the sending party, delivered by such equipment) addressed:

(a) If to any or all of the Borrowers, in all cases to the Borrowers’ Agent at:

Equistar Chemicals, LP

1221 McKinney Street, Suite 700

Houston, Texas 77010

Telecopy: 713-652-4598

Attention of Treasury Department

(b) If to the Administrative Agent, in all cases to:

Citicorp USA, Inc.

388 Greenwich Street

19^th Floor

New York, New York 10013

Telecopy: 212-816-2613

Attention of David Jaffe

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(c) If to any Lender, in all cases to it at its address as set forth in its Administrative Questionnaire or as it shall subsequently specify in writing to the Borrowers and the Administrative Agent.

(d) If to the Swingline Lender or Fronting Bank, to it at:

Citibank, N.A.

388 Greenwich Street

19^th Floor

New York, New York 10013

Telecopy: 212-816-2613

Attention of David Jaffe

All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by telecopy equipment of the sender, or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 10.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 10.01.

Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or Equistar may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Section 10.02. No Waivers; Amendments. (a) No failure or delay of any Fronting Bank, any Agent or any Lender in exercising any power or right under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Agents, the Fronting Banks and the Lenders under the Loan Documents are cumulative and not exclusive of any rights or remedies which they would otherwise have. Except as may be otherwise expressly provided herein, no waiver of any provision of this Agreement nor any consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be in writing and signed by the Required Lenders (unless otherwise specified herein),

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and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or demand in similar or other circumstances. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Agent, any Lender or any Fronting Bank may have had notice or knowledge of such Default at the time.

(b) Neither this Agreement nor any Exhibit or Schedule hereto may be amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers’ Agent on behalf of the Borrowers and by the Required Lenders; provided, however, that no such agreement shall (i) increase the Commitment of any Lender, or subject any Lender to any additional obligation, without the prior written consent of such Lender, (ii) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any Fee payable hereunder, or reduce the amount of, waive or excuse any such payment, or reduce the Applicable Margin, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iii) amend or modify or otherwise affect the rights or duties of any Agent, any Fronting Bank or the Swingline Lender without its prior written consent, (iv) amend or modify the definition of “Required Lenders”, or otherwise change the percentage of Commitments or Credit Exposures, or the number of Lenders, which shall be required for the Lenders or any of them to take action hereunder, or increase the amount of the Total Commitment, or amend or modify Section 2.17, this Section 10.02 or Section 10.07, in each case without the prior written consent of each Lender or (v) amend or modify the definitions of “Available Inventory”, “Collateral Availability”, “Eligible Inventory”, “Excess Availability”, “Ineligible Inventory”, “SF Excess Availability”, “Total Collateral Availability” or “Total Excess Availability,” or amend, or waive a Default arising under, Section 7.01(o), in each case without the prior written consent of Lenders having aggregate Credit Exposures representing at least 66 ²/3% of the sum of all Credit Exposures at such time; provided that any increase in the percentage set forth in clause (i) of the definition of “Available Inventory” to above 70% or any increase in the percentage set forth in clause (ii) of the definition of “Available Inventory” to above 85%, or any amendment of the definition of “Available Inventory” that would have the effect of so increasing either or both of such percentages, shall require the prior written consent of each Lender.

(c) Any provision of the Collateral Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by each Loan Party thereto whose consent to such amendment or waiver is required by the terms of such Collateral Document and by and the Administrative Agent with the consent of the Required Lenders; provided that no such amendment or waiver shall, unless signed by all the Lenders, effect or permit a release of, or the

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consensual subordination of the Liens of the Collateral Documents on, all or substantially all of the Collateral or release any Loan Party from its obligations under the Loan Documents. Notwithstanding the foregoing, Collateral (but not the proceeds thereof) shall be released from the Lien of the Collateral Documents, and a Loan Party (other than Equistar) shall be released from such obligations, from time to time as necessary to effect any sale of assets, including the sale of a Subsidiary Loan Party, permitted by the Loan Documents, and the Administrative Agent shall execute and deliver all release documents reasonably requested to evidence such release (without the requirement of consent from any Lender).

(d) If, in connection with any proposed amendment, modification, waiver or termination requiring the consent of all affected Lenders, the consent of the Required Lenders is obtained but the consent of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained being referred to as a “Non-Consenting Lender”), then, so long as the Lender that is the same entity as the Administrative Agent is not a Non-Consenting Lender, at the Borrowers’ request, the Administrative Agent or an Eligible Assignee acceptable to the Administrative Agent shall have the right with the Administrative Agent’s consent and in the Administrative Agent’s sole discretion (but shall have no obligation) to purchase from such Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon the Administrative Agent’s request, sell and assign to the Lender that is the same entity as the Administrative Agent or to such Eligible Assignee, all of the Commitment and Loans of such Non-Consenting Lender for an amount equal to the outstanding principal amount of the Loans by the Non-Consenting Lender plus all accrued interest and fees with respect thereto through the date of sale less unamortized upfront fees, such purchase and sale to be consummated pursuant to an executed Assignment and Acceptance.

Section 10.03. Payments. Except as otherwise provided in this Agreement, all payments to be made by the Borrowers to the Lenders hereunder shall be made to the Administrative Agent in immediately available funds at Citibank, N.A., 388 Greenwich Street, New York, New York 10013, Attention: David Jaffe (Account Number 3685-2248, ABA 021000089 and Reference: CUSA – Medium Term Finance) not later than 11:00 a.m., New York City time, on the date due. Funds received after the applicable time shall be deemed to have been received by the Lenders on the following Business Day.

Unless otherwise provided herein, if any payment of principal, interest or any other amount payable by the Borrowers hereunder shall fall due on a day that is not a Business Day, then such due date shall be extended to the next succeeding Business Day, and such extension of time shall be included in computing interest, if any, in connection with such payment.

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Upon receipt of any payment for the accounts of the Lenders hereunder, the Administrative Agent will promptly distribute to each Lender its share of such payment.

Section 10.04. Governing Law; Submission to Jurisdiction. (a) THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

(b) To the extent it may effectively do so under applicable law, each Borrower (i) irrevocably submits to the nonexclusive jurisdiction of any New York State or Federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to any Loan Document or any other document contemplated thereby, and (ii) irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(c) Each Borrower agrees, to the fullest extent it may effectively do so under applicable law, that a judgment in any suit, action or proceeding of the nature referred to in paragraph (b) above brought in any such court shall be conclusive and binding upon such Borrower and may be enforced in the courts of the United States of America or the State of New York (or any other courts to the jurisdiction of which such Borrower is or may be subject) by a suit upon such judgment.

(d) To the extent it may effectively do so under applicable law, each Borrower consents to process being served in any suit, action or proceeding of the nature referred to in paragraph (b) by mailing a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the address of such Borrower set forth or referred to in Section 10.01. To the extent it may effectively do so under applicable law, each Borrower agrees that such service (i) shall be deemed in every respect effective service of process upon such Borrower in any such suit, action or proceeding and (ii) shall be taken and held to be valid personal service upon and personal delivery to such Borrower.

(e) Nothing in this Section 10.04 shall affect the right of any Agent or Lender to serve process in any manner permitted by law, or limit any right that any Agent or Lender may have to bring proceedings against any Borrower in the courts of any jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

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Section 10.05. Expenses; Documentary Taxes; Indemnity. (a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Fronting Banks and their respective Affiliates, including the reasonable fees, charges and disbursements of Davis Polk & Wardwell, special counsel for the Agents and any local counsel retained by them, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Fronting Banks in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Fronting Banks or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Fronting Banks or any Lender, in connection with the enforcement or protection of its rights in connection with any Loan Document, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout or restructuring in respect of such Loans or Letters of Credit. It is understood that reimbursement of the Administrative Agent in respect of matters covered by Section 5.13(b)(iii) of this Agreement is subject to the applicable limitations specified therein.

(b) The Borrowers shall indemnify each Agent, each Fronting Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of any actual or threatened claim, litigation, investigation or proceeding, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, relating to (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations under the Loan Documents or the consummation of the transactions contemplated thereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by a Fronting Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), or (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by Equistar or any of its Subsidiaries, or any Environmental Liability related in any way to Equistar or any of its Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross negligence or willful

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misconduct of such Indemnitee. Without limiting the generality of the foregoing, each Borrower hereby waives all rights for contribution or any other rights of recovery with respect to liabilities, losses, damages, costs and expenses arising under or related to Environmental and Safety Laws that it might have by statute or otherwise against any Indemnitee.

(c) The provisions of this Section 10.05 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Lenders or the Administrative Agent. All amounts due under this Section 10.05 shall be payable on written demand therefor.

Section 10.06. Survival of Agreements, Representations and Warranties, Etc. All warranties, representations and covenants made by any Loan Party herein or in any certificate or other instrument delivered by any Loan Party or on its behalf in connection with the Loan Documents shall be considered to have been relied upon by the Lenders and shall survive the making of the Loans and issuance of any Letters of Credit herein contemplated regardless of any investigation made by the Lenders or the Agents or on their behalf and shall continue in full force and effect so long as any amount due or to become due hereunder is outstanding and unpaid. The right of each Lender to receive payments pursuant to Sections 2.14, 2.16 and 2.19 shall survive the termination of this Agreement and the repayment of the Loans.

Section 10.07. Successors and Assigns. (a) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns (including any Affiliate of a Fronting Bank that issues any Letter of Credit). No Borrower may assign or transfer any of its rights or obligations hereunder without the prior written consent of all of the Lenders (in the case of Equistar) or the Administrative Agent (in the case of any other Borrower).

(b) Each Lender may assign all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment (if still in existence) and the Loans at the time owing to it); provided, however, that (i) except in the case of an assignment by a Lender to an Affiliate of such Lender, to another Lender or to a Related Fund of a Lender, the Borrowers and the Administrative Agent (and, in the case of an assignment of all or a portion of a Commitment or any Lender’s obligations in respect of its LC Exposure or Swingline Exposure, regardless of the identity of the assignee, each Fronting Bank and the Swingline Lender) must consent to such assignment in writing (which consent may not be unreasonably withheld or delayed), (ii) each such assignment

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shall be of a constant, and not a varying, percentage of all the assigning Lender’s rights and obligations under this Agreement as a Lender, (iii) after giving effect to any such assignment, (1) the aggregate amount of the Credit Exposure of the assigning Lender (together with its Related Funds and its Affiliates) shall be either (x) $0 or (y) $10,000,000 or more and (2) the aggregate amount of the Credit Exposure of the assignee Lender (together with its Related Funds and its Affiliates) shall be in the case of a Lender, $10,000,000 or more (or, in any case, any other smaller amount agreed upon by the Administrative Agent and the Borrowers); and (iv) the parties to each such assignment shall execute and deliver to the Administrative Agent for its acceptance and recording in the Register an Assignment and Acceptance, together with (except in the case of assignment to another Lender or an Affiliate or a Related Fund of a Lender) a processing and recordation fee of $3,500 (provided that only one such fee shall be required in the case of multiple assignments by a Lender on a single day to funds managed or advised by the same investment advisor if such funds are not Lenders hereunder); and provided, further, that any consent of the Borrowers otherwise required under this paragraph shall not be required if an Event of Default has occurred and is continuing. The Credit Exposures held by or assigned to or by any Person and its Related Funds shall be aggregated for purposes of determining compliance with the amount thresholds specified in this Section. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be (unless waived by the Administrative Agent) at least five Business Days after the execution thereof, (A) the assignee thereunder shall be a party hereto, and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and (B) the assignor thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of the assignor’s rights and obligations under this Agreement, the assignor shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16 and 10.05 as well as to any interest and Unused Commitment Fee accrued for its account hereunder and not yet paid).

(c) By executing and delivering an Assignment and Acceptance, the assignor and the assignee thereunder shall be deemed to confirm to and agree with each other and the Borrowers as follows: (i) such assignor warrants that it is the legal and beneficial owner of the interest being assigned free and clear of any adverse claim; (ii) except as set forth in clause (i) above, the assignor makes no other representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, or any other instrument or document furnished

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pursuant hereto or thereto, or the financial condition of the Borrowers or the performance or observance by the Borrowers of any of their Obligations under this Agreement or any other instrument or document furnished pursuant hereto or thereto; (iii) such assignee represents and warrants that it is legally authorized to enter into such Assignment and Acceptance; (iv) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements described in Section 3.06 or the most recent financial statements delivered pursuant to Section 5.05, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (v) such assignee will independently and without reliance upon the assignor and based on such documents and information as it shall deem appropriate at the time continue to make its own credit decisions in taking or not taking action under this Agreement; (vi) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents, as are delegated to such Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will, to the extent of the interest assigned to it, perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be performed by the Lenders.

(d) The Borrowers agree that each Lender may without notice to or the consent of the Borrowers, the Administrative Agent, any Fronting Bank or the Swingline Lender sell participations to one or more banks or other entities in all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the same portion of the Revolving Loans owing to it) and the Borrowers agree that any purchaser of a participation in such Loans so acquired may exercise any and all rights of banker’s lien, setoff, counterclaim or otherwise with respect to any and all moneys owing by the Borrowers to such purchaser as fully as if such purchaser were a Lender acquiring such Loans hereunder in the amount of such participation; provided, however, that (i) such selling Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the Borrowers for the performance of its obligations hereunder, (iii) the participating lenders or other entities shall be entitled to the benefit of the cost protection provisions contained in Sections 2.14, 2.16 and 2.19 to the same extent as if they were such Lender (but the amount claimed by any participating lender or other entity shall not exceed the amount that could have been claimed by the Lender from which it acquired its participation) and (iv) the Borrowers, the Agents, the Fronting Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of the Borrowers relating to the Loans and to approve, without the consent of or consultation with any participant, any amendment, modification or waiver of any provision of this Agreement (other than amendments, modifications

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or waivers with respect to Fees payable hereunder or an increase in the amount of principal of or a decrease in the rate at which interest is payable on the Loans, or an extension of the dates fixed for payments of principal of or interest on the Loans or payments of Fees).

(e) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.07, disclose to the assignee or participant or proposed assignee or participant any information relating to Equistar and its Subsidiaries furnished to the Lenders (including pursuant to Section 5.09) by or on behalf of Equistar and its Subsidiaries, as applicable; provided that, prior to any such disclosure, each such assignee or participant or proposed assignee or participant shall execute an agreement whereby such assignee or participant shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to Equistar and its any Subsidiary received from the Agents or Lenders.

(f) The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices in The City of New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders and the Commitment (if any) of, and the principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof (the “Register”), and no such Assignment and Acceptance shall be effective until so recorded. The entries in the Register shall be conclusive in the absence of manifest error and the Borrowers, the Agents, the Fronting Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrowers at any reasonable time and from time to time upon reasonable prior notice. Upon its receipt of an executed Assignment and Acceptance, together with any Note subject to such assignment, and the payment of any processing and registration fee, the Administrative Agent shall (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the parties thereto.

(g) Any Lender may at any time pledge all or any portion of its rights under the Loan Documents to secure obligations of such Lender, without the consent of any party, without notice to any party and without payment of fees, in accordance with applicable law, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge shall release any Lender from its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

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(h) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Bank”) may grant to a special purpose funding vehicle (an “SPC”) of such Granting Bank, identified as such in writing from time to time by the Granting Bank to the Administrative Agent and the Borrowers, the option to provide to the Borrowers all or any part of any Loan that such Granting Bank would otherwise be obligated to make to the Borrowers pursuant to Section 2.02, provided that (i) nothing herein shall constitute a commitment to make any Loan by any SPC and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Bank shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall be deemed to utilize the Commitments of all the Lenders to the same extent, and as if, such Loan were made by the Granting Bank. Each party hereto hereby agrees that no SPC shall be liable for any payment under this Agreement for which a Lender would otherwise be liable, for so long as, and to the extent, the related Granting Bank makes such payment. In furtherance of the foregoing, each party hereto hereby agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States of America or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 10.07, any SPC may assign all or a portion of its interests in any Loans to its Granting Bank or to any financial institutions providing liquidity and/or credit facilities to or for the account of such SPC to fund the Loans made by such SPC or to support the securities (if any) issued by such SPC to fund such Loans; provided, however, that except in the case of an assignment to a Granting Bank or a financial institution that is either an affiliate of such SPC or another Lender, the Administrative Agent and, unless an Event of Default has occurred and is continuing, the Borrowers must consent to such assignment in writing (which consent may not be unreasonably withheld). Each SPC shall execute an agreement whereby such SPC shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to the Borrowers and their Affiliates received from the Agents or Lenders.

Section 10.08. Right of Setoff. (a) Upon the occurrence and during the continuation of any Event of Default each Lender is hereby authorized, in addition to any other right or remedy that any Lender may have by operation of law or otherwise, at any time and from time to time, without notice to the Borrowers except to the extent required by applicable law (any such notice being expressly waived by the Borrowers to the maximum extent possible under applicable law), and subject to any requirements or limitations imposed by applicable law, to exercise its banker’s lien or right of setoff and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or any of its Affiliates to or for the credit or the account of any Borrower against any and all the obligations of the Borrowers now or hereafter existing under any Loan Document, irrespective of whether or not such Lender shall have made any demand under such Loan Agreement and although such obligations may be unmatured.

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(b) Each Lender agrees promptly to notify the Administrative Agent and the Borrowers after any such setoff and application; provided, however, that, to the extent permitted by applicable law, the failure to give any such notice shall not affect the validity of such setoff and application.

Section 10.09. Severability. In case any one or more of the provisions contained in the Loan Documents shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 10.10. Cover Page, Table of Contents and Section Headings. The cover page, Table of Contents and Section headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of or be taken into consideration in interpreting this Agreement.

Section 10.11. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts with the same effect as if the signatures thereon and hereon were upon the same instrument. This Agreement shall become effective when copies hereof which, when taken together, bear the signatures of each of the parties hereto shall have been received by the Administrative Agent.

Section 10.12. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

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Section 10.13. Entire Agreement. This Agreement, the Collateral Documents, the agreements referred to in Section 2.07 and any promissory notes delivered pursuant hereto constitute the entire contract between the parties relative to the subject matter hereof. Any previous agreement among the parties with respect to the subject matter hereof is superseded by the Loan Documents and such letter agreements, except to the extent expressly provided therein. Nothing in the Loan Documents or such letter agreements or promissory notes, expressed or implied, is intended to confer upon any party other than the parties hereto and thereto and Indemnitees referred to in Section 10.05(b) any rights, remedies, obligations or liabilities under or by reason of the Loan Documents or such letter agreements or promissory notes.

Section 10.14. Confidentiality. Each of the Agents, each Fronting Bank, the Lenders and the SPC’s (as defined in Section 10.07(h)) agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under any Loan Document or any suit, action or proceeding relating to any Loan Document or the enforcement of rights thereunder, (f) subject to obtaining a written agreement containing provisions substantially the same as those of this Section from the intended recipient of such Information, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement (including any assignee or any prospective assignee of an SPC of the type described in the last sentence of Section 10.07(h)), (g) with the consent of the Borrowers, (h) for purposes of Section 10.07(h) only, to any rating agency, (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to any Fronting Bank or any Agent or Lender on a nonconfidential basis from a source other than the Borrowers or (j) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to such contractual counterparty’s professional advisor) so long as the recipient of such Information agrees to be bound by the provisions of this Section. For the purposes of this Section, “Information” means all information received from the Borrowers relating to the Borrowers and their Affiliates or their respective businesses, other than any such information that is available to any Fronting Bank or any Agent or Lender on a nonconfidential basis prior to disclosure by the Borrowers. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to

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maintain the confidentiality of such Information as such Person would accord to its own confidential information. Notwithstanding anything herein to the contrary, “Information” shall not include, and each party hereto may disclose without limitation of any kind, any information with respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure.

Section 10.15. Limitation on Recourse to General Partners. The Lenders, the Agents, the SPCs (as defined in Section 10.07(h)) and the Fronting Banks agree that payment and performance of the obligations due to them from the Loan Parties under the Loan Documents and any promissory notes delivered hereunder shall be obligations of the Loan Parties only, and none of the Lenders, the Agents, the SPCs or any Fronting Bank shall have any claim against or recourse (whether by operation of law or otherwise) to any Equistar GP or any of its Affiliates (other than Equistar and its Subsidiaries) or any director, officer, employee, partner, member of the Partnership Governance Committee, holder of Equity Interests, agent or advisor of any such Person in respect of such obligations or for any claim based on, in respect of, or by reasons of, such obligations.

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

EQUISTAR CHEMICALS, LP
By:	/s/ Karen A. Twitchell
	Name:	Karen A. Twitchell
	Title:	Principal Financial Officer
CITICORP USA, INC., individually and as Administrative Agent and Co-Collateral Agent
By:	/s/ David Jaffe
	Name:	David Jaffe
	Title:	Vice President
CITIBANK, N.A., individually and as Fronting Bank
By:	/s/ David Jaffe
	Name:	David Jaffe
	Title:	Vice President
BANK OF AMERICA, N.A., individually and as Co-Collateral Agent
By:	/s/ Stephen King
	Name:	Stephen King
	Title:	Vice President

[Credit Agreement]

BANK ONE, NA, individually and as Co-Documentation Agent
By:	/s/ J. Devin Mock
	Name:	J. Devin Mock
	Title:	Director
CREDIT SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH
By:	/s/ S. William Fox
	Name:	S. William Fox
	Title:	Director
By:	/s/ Denise L. Alvarez
	Name:	Denise L. Alvarez
	Title:	Associate
JPMORGAN CHASE BANK, individually and as Co-Documentation Agent
By:	/s/ Stacey Haimes
	Name:	Stacey Haimes
	Title:	Vice President
Bank of America, N.A.
By:	/s/ Stephen King
	Name:	Stephen King
	Title:	Vice President

[Credit Agreement]

Bank One, NA
By:	/s/ J. Devin Mock
	Name:	J. Devin Mock
	Title:	Director
State of California Public Employees’ Retirement System
By:	/s/ Curtis D. Ishii
	Name:	Curtis D. Ishii
	Title:	Senior Investment Officer Global Fixed Income
UBS AG, Stamford Branch
By:	/s/ Wilfred V. Saint
	Name:	Wilfred V. Saint
	Title:	Associate Director Banking Products Services US
By:	/s/ Anthony N. Joseph
	Name:	Anthony N. Joseph
	Title:	Associate Director Banking Products Services US

[Credit Agreement]

CONGRESS FINANCIAL CORPORATION (SOUTHWEST)
By:	/s/ Vicky Balmot
	Name:	Vicky Balmot
	Title:	Executive Vice President

General Electric Capital Corporation
By:	/s/ Robert M. Kadlick
	Name:	Robert M. Kadlick
	Title:	Duly Authorized Signatory

GMAC COMMERCIAL FINANCE LLC
By:	/s/ George Grieco
	Name:	George Grieco
	Title:	Director

Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc.
By:	/s/ Tom Bukowski
	Name:	Tom Bukowski
	Title:	Director

National City Commercial Finance, Inc.
By:	/s/ James C. Ritchie
	Name:	James C. Ritchie
	Title:	Vice President

[Credit Agreement]

WELLS FARGO FOOTHILL, LLC
By:	/s/ Sanat S. Amladi
	Name:	Sanat S. Amladi
	Title:	Vice President

LaSalle Business Credit, LLC
By:	/s/ Anthony J. Veith
	Name:	Anthony J. Veith
	Title:	Senior Vice President

AmSouth Bank
By:	/s/ Bruce Kasper
	Name:	Bruce Kasper
	Title:	Attorney In Fact

Siemens Financial Services, Inc.
By:	/s/ Frank Amodio
	Name:	Frank Amodio
	Title:	Vice President - Credit

The Bank of New York
By:	/ s/ Raymond J. Palmer
	Name:	Raymond J. Palmer
	Title:	Vice President

[Credit Agreement]

EX-4.8

Exhibit 4.8

SECURITY AGREEMENT

dated as of December 17, 2003

among

EQUISTAR CHEMICALS, LP,

THE OTHER BORROWERS AND GUARANTORS PARTY HERETO

and

CITICORP USA, INC.,

as Administrative Agent

TABLE OF CONTENTS

		PAGE
SECTION 1.	Definitions.	1
SECTION 2.	Guarantees By Guarantors.	7
SECTION 3.	Grant of Transaction Liens	10
SECTION 4.	General Representations And Warranties	12
SECTION 5.	Further Assurances; General Covenants	14
SECTION 6.	Restricted Accounts	15
SECTION 7.	Remedies upon Event of Default	17
SECTION 8.	Application of Proceeds	18
SECTION 9.	Fees and Expenses; Indemnification	20
SECTION 10.	Authority to Administer Collateral	21
SECTION 11.	Limitation on Duty in Respect of Collateral	22
SECTION 12.	General Provisions Concerning the Administrative Agent.	22
SECTION 13.	Termination of Transaction Liens; Release of Collateral.	23
SECTION 14.	Additional Lien Grantors	24
SECTION 15.	Notices	24
SECTION 16.	No Implied Waivers; Remedies Not Exclusive	24
SECTION 17.	Successors and Assigns	24
SECTION 18.	Amendments and Waivers	25
SECTION 19.	Choice of Law	25
SECTION 20.	Waiver of Jury Trial	25
SECTION 21.	Severability	25

EXHIBITS:
Exhibit A	Perfection Certificate
Exhibit B	Security Agreement Supplement

i

SECURITY AGREEMENT

AGREEMENT (this “Agreement”) dated as of December 17, 2003 among Equistar Chemicals, LP, a Delaware limited partnership, the other Borrowers (if any) party hereto, the Guarantors (if any) party hereto and Citicorp USA, Inc. (“Citicorp”), as Administrative Agent.

WHEREAS, the Borrowers (as this and other capitalized terms are defined in Section 1 hereof) have entered into the Credit Agreement, pursuant to which the Borrowers intend to borrow funds and obtain letters of credit for the purposes set forth therein;

WHEREAS, the Borrowers are willing to secure their obligations under the Credit Agreement and the other Loan Documents, certain derivatives obligations and cash management obligations, by granting Liens on certain of their assets to the Administrative Agent as provided in the Collateral Documents;

WHEREAS, Equistar is willing to cause each Loan Party that is not a Borrower to guarantee the foregoing obligations of the Borrowers and to secure its guarantee thereof by granting Liens on certain of its assets to the Administrative Agent as provided in the Collateral Documents;

WHEREAS, the Lenders are willing to make loans and issue or participate in letters of credit under the Credit Agreement described in Section 1 hereof on the terms set forth therein if the foregoing obligations of the Borrowers are secured as described above;

WHEREAS, upon any foreclosure or other enforcement of the Collateral Documents, the net proceeds of the relevant Collateral are to be received by or paid over to the Administrative Agent and applied as provided in Section 8 hereof;

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Definitions.

(a) Terms Defined in Credit Agreement. Terms defined in the Credit Agreement and not otherwise defined in Section 1(b) or 1(c) have, as used herein, the respective meanings provided for therein.

(b) Terms Defined in UCC. As used herein, each of the following terms has the meaning specified in the UCC:

Term	UCC
Account	9-102
Authenticate	9-102
Chattel Paper	9-102
Control	9-104
Deposit Account	9-102
General Intangibles	9-102
Instrument	9-102
Inventory	9-102
Record	9-102
Supporting Obligation	9-102

[Security Agreement]

(c) Additional Definitions. The following additional terms, as used herein, have the following meanings:

“Additional Secured Obligations” means the Secured Derivative Obligations and the Secured Cash Management Obligations.

“Administrative Agent” means Citicorp USA, Inc., in its capacity as administrative agent under the Loan Documents, and its successors in such capacity.

“BofA” means Bank of America, N.A., a national banking association.

“Borrowers” means Equistar and each other Borrower (if any) under the Credit Agreement.

“Cash Collateral Account” has the meaning set forth in Section 6.

“Citicorp” shall have the meaning assigned to that term in the recital of the parties hereto.

“Collateral” means all property, whether now owned or hereafter acquired, on which a Lien is granted or purports to be granted to the Administrative Agent pursuant to the Collateral Documents.

“Contracts” means all contracts for the sale, lease, exchange or other disposition of Inventory or the performance of services, whether or not performed and whether or not subject to termination upon a contingency or at the option of any party thereto.

“Credit Agreement” means the Credit Agreement dated as of December 17, 2003 among the Borrowers, the Lenders party thereto, BofA and Citicorp, as Co-Collateral Agents and Citicorp, as Administrative Agent.

“Derivative Obligations” means, with respect to any Person, the obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, (ii) forward foreign exchange contracts or currency swap agreements, (iii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency

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values and (iv) commodity price protection agreements or commodity price hedging agreements designed to manage fluctuations in prices or costs in raw materials, manufactured products or related commodities.

“Estimated Liquidated Amount” means, with respect to any Unliquidated Secured Obligation as of any date of determination, (i) in the case of a Secured Derivatives Obligation, the amount, if any, determined by and furnished to the Administrative Agent and the Borrowers on a weekly basis by the “calculation agent” in respect of such Secured Derivatives Obligation (if any) or by the counterparty in respect of such Secured Derivatives Obligation, which represents the current estimated counterparty risk over the life of such Secured Derivatives Obligation to such counterparty, (ii) in the case of any Letter of Credit, the maximum amount which may be drawn thereunder and (iii) in the case of any other Unliquidated Secured Obligation, the amount, if any, notified to the Administrative Agent and the Borrowers by the applicable Secured Party pursuant to Section 8(b) not more than two Business Days prior to such date as the maximum ascertainable amount of such Secured Obligation.

“Guarantor” means each Subsidiary (if any) listed on the signature pages hereof under the caption “Guarantors” and each Subsidiary that shall, at any time after the date hereof, become a “Guarantor” pursuant to Section 13.

“Intellectual Property” means the right to use any trademark, tradename, copyright, patent or other intellectual property, whether owned by or licensed to a Lien Grantor.

“Inventory Concentration Account” has the meaning set forth in Section 6.

“Lien Grantor” means each Borrower and each Guarantor.

“Liquid Investment” means (i) direct obligations of the United States or any agency thereof, (ii) obligations guaranteed by the United States or any agency thereof, (iii) time deposits and money market deposit accounts issued by or guaranteed by or placed with a financial institution reasonably acceptable to the Administrative Agent, and (iv) fully collateralized repurchase agreements for securities described in clause (i) or (ii) above entered into with a financial institution reasonably acceptable to the Administrative Agent, provided in each case that such Liquid Investment (x) matures within 30 days after it is first included in the Collateral and (y) is in a form, and is issued and held in a manner, that in the reasonable judgment of the Administrative Agent permits appropriate measures to have been taken to perfect security interests therein.

“Liquidated Secured Obligation” means, at any time, any Secured Obligation (or portion thereof) that is not an Unliquidated Secured Obligation at such time.

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“Lockbox Account” has the meaning set forth in Section 6.

“own” refers to the possession of sufficient rights in property to grant a security interest therein as contemplated by UCC Section 9-203, and “acquire” refers to the acquisition of any such rights.

“Perfection Certificate” means, with respect to any Lien Grantor, a certificate substantially in the form of Exhibit A, completed and supplemented with the schedules contemplated thereby to the reasonable satisfaction of the Administrative Agent, and signed by an officer of such Lien Grantor.

“Permitted Liens” means (i) the Transaction Liens and (ii) any other Liens on the Collateral permitted to be created or assumed or to exist pursuant to the Credit Agreement, including Liens arising in connection with the Securitization Facility.

“Pledged”, when used in conjunction with any type of asset, means at any time an asset of such type that is included (or that creates rights that are included) in the Collateral at such time. For example, “Pledged Inventory” means Inventory that is included in the Collateral at such time.

“Post-Petition Interest” means any interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any Lien Grantor (or would accrue but for the operation of applicable bankruptcy or insolvency laws), whether or not such interest is allowed or allowable as a claim in any such proceeding.

“Proceeds” means all proceeds of, and all other profits, products, rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or other realization upon, any Collateral, including all claims of any Lien Grantor against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any Collateral, and any condemnation or requisition payments with respect to any Collateral.

“Receivables” means all indebtedness (whether constituting Accounts or General Intangibles or Chattel Paper or otherwise) of any Person owing to a Lien Grantor under a Contract, and includes the right to payment of any interest or finance charges and other obligations of such Person with respect thereto.

“Receivables Agent” means Citicorp, in its capacity as administrative agent under the Securitization Facility, and its successors in such capacity.

“Receivables Concentration Account” has the meaning set forth in Section 6.

“Receivables Funding Account” has the meaning set forth in Section 6.

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“Related Documents” means the Credit Agreement, any promissory notes issued pursuant to Section 2.09(d) of the Credit Agreement, the Collateral Documents and the documentation governing the Additional Secured Obligations.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and its Affiliates.

“Related Transferred Rights” has the meaning specified in Section 3(b) hereof.

“Release Conditions” means the following conditions for terminating all the Transaction Liens:

(i) all Commitments under the Credit Agreement shall have expired or been terminated;

(ii) all Liquidated Secured Obligations shall have been paid in full; and

(iii) no Specified Unliquidated Secured Obligation shall remain outstanding or the Lien Grantors shall have deposited with the Administrative Agent, in respect of each such Specified Unliquidated Secured Obligation, cash in an amount at least equal to 105% of the Estimated Liquidated Amount thereof (or such lesser amount satisfactory to the Administrative Agent and the related Secured Party), which cash may be invested in Liquid Investments.

“Restricted Account” means any of the Lockbox Accounts, the Receivables Concentration Account, the Receivables Funding Account, the Inventory Concentration Account and the Cash Collateral Account.

“Secured Agreement”, when used with respect to any Secured Obligation, refers collectively to each instrument, agreement or other document that sets forth obligations of the Lien Grantors and/or rights of the holder with respect to such Secured Obligation.

“Secured Cash Management Obligations” means obligations of one or more Loan Parties owing to the depositary bank (i) with which a Restricted Account is maintained arising out of the operation of such Restricted Account or (ii) which provides other cash management services relating to the transactions contemplated by the Loan Documents; provided that (x) the relevant Loan Parties and such depositary bank shall have expressly agreed in writing that such obligations constitute “Secured Cash Management Obligations” entitled to the benefits of the Collateral Documents and (y) such depositary bank shall have delivered to the Administrative Agent an instrument in form and substance satisfactory to the Administrative Agent to the effect set forth in clause (x) of this proviso, and acknowledging and agreeing to be bound by the terms of this Agreement with respect to such obligations.

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“Secured Derivative Obligations” means Derivative Obligations of one or more Loan Parties owing to any Person that was a Lender or an Affiliate of a Lender on the trade date for any such Derivative Obligation, or an assignee of such Person; provided that (i) neither the incurrence nor the securing of such Derivative Obligation gives rise to a Default under the Credit Agreement, (ii) at or prior to the time the written agreement evidencing such Derivative Obligation (a “Derivative Contract”) is executed, the relevant Loan Parties and the Lender or Affiliate party thereto shall have expressly agreed in writing that such obligations constitute “Secured Derivative Obligations” entitled to the benefits of the Collateral Documents, (iii) at or prior to the time such Derivative Contract is executed, the Lender or Affiliate party thereto shall have delivered a notice to the Administrative Agent (or, in the case of an Affiliate, an instrument in form and substance satisfactory to the Administrative Agent) to the effect set forth in clause (ii) of this proviso, and acknowledging and agreeing to be bound by the terms of this Agreement with respect to such obligations.

“Secured Guarantee” has the meaning set forth in Section 2(a).

“Secured Loan Obligations” means all principal of all Loans and LC Disbursements outstanding from time to time under the Credit Agreement, all interest (including Post-Petition Interest) on such Loans and LC Disbursements and all other amounts now or hereafter payable by the Borrowers pursuant to the Loan Documents.

“Secured Obligations” means the Secured Loan Obligations and the Additional Secured Obligations.

“Secured Parties” means the holders from time to time of the Secured Obligations, and “Secured Party” means any of them as the context may require.

“Security Agreement Supplement” means a Security Agreement Supplement, substantially in the form of Exhibit B, signed and delivered to the Administrative Agent for the purpose of adding a Subsidiary as a party hereto pursuant to Section 14 and/or adding additional property to the Collateral.

“Specified Unliquidated Secured Obligation” means an Unliquidated Secured Obligation other than contingent general indemnification obligations (such as those in Section 10.05 of the Credit Agreement).

“Sweep Account” has the meaning set forth in Section 6.

“Transaction Liens” means the Liens granted by the Lien Grantors under the Collateral Documents.

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“Transferred Receivables” means any Receivables that have been sold, contributed or otherwise transferred to Equistar Receivables in connection with the Securitization Facility.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any Transaction Lien on any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“Unliquidated Secured Obligation” means, at any time, any Secured Obligation (or portion thereof) that is contingent in nature or unliquidated at such time, including any Secured Obligation that is:

(i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it;

(ii) any other obligation (including any guarantee) that is contingent in nature at such time; or

(iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

(d) Terms Generally. The definitions of terms herein (including those incorporated by reference to the UCC or to another document) apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits and Schedules to, this Agreement and (e) the word “property” shall be construed to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

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SECTION 2. Guarantees By Guarantors.

(a) Secured Guarantees. Subject to Section 2(i), each Guarantor unconditionally guarantees the full and punctual payment of each Secured Obligation when due (whether at stated maturity, upon acceleration or otherwise) (a “Secured Guarantee”). If the Borrowers fail to pay any Secured Obligation punctually when due, subject to Section 2(i), each Guarantor agrees that it will forthwith on demand pay the amount not so paid at the place and in the manner specified in the relevant Secured Agreement.

(b) Secured Guarantees Unconditional. The obligations of each Guarantor under its Secured Guarantee shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

(i) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any Borrower, any other Guarantor or any other Person under any Secured Agreement, by operation of law or otherwise;

(ii) any modification or amendment of or supplement to any Loan Document;

(iii) any release, impairment, non-perfection or invalidity of any direct or indirect security for any obligation of any Borrower, any other Guarantor or any other Person under any Secured Agreement;

(iv) any change in the corporate existence, structure or ownership of any Borrower, any other Guarantor or any other Person or any of their respective subsidiaries, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower, any other Guarantor or any other Person or any of their assets or any resulting release or discharge of any obligation of any Borrower, any other Guarantor or any other Person under any Loan Document;

(v) the existence of any claim, set-off or other right that such Guarantor may have at any time against any Borrower, any other Guarantor, any Secured Party or any other Person, whether in connection with the Loan Documents or any unrelated transactions, provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

(vi) any invalidity or unenforceability relating to or against any Borrower, any other Guarantor or any other Person for any reason of any Loan Document, or any provision of applicable law or regulation purporting to prohibit the payment of any Secured Obligation by any Borrower, any other Guarantor or any other Person; or

(vii) any other act or omission to act or delay of any kind by any Borrower, any other Guarantor, any other party to any Loan Document,

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any Secured Party or any other Person, or any other circumstance whatsoever that might, but for the provisions of this clause (vii), constitute a legal or equitable discharge of or defense to any obligation of any Guarantor hereunder.

(c) Release of Secured Guarantees. (i) All the Secured Guarantees will be released when all the Release Conditions are satisfied. If at any time any payment of a Secured Obligation is rescinded or must be otherwise restored or returned upon the insolvency or receivership of any Borrower or otherwise, the Secured Guarantees shall be reinstated with respect thereto as though such payment had been due but not made at such time.

(ii) If all the capital stock of a Guarantor or all the assets of a Guarantor are sold to a Person other than Equistar or one of its Subsidiaries in a transaction permitted by the Credit Agreement (any such sale, a “Sale of Guarantor”), the Administrative Agent shall release such Guarantor from its Secured Guarantee; provided that, if such sale is a Prepayment Event, the Net Cash Proceeds thereof are applied as required by Section 2.08 of the Credit Agreement. Such release shall not require the consent of any Secured Party, and the Administrative Agent shall be fully protected in relying on a certificate of the Borrowers’ Agent as to whether any particular sale constitutes a Sale of Guarantor.

(iii) In addition to any release permitted by subsection (ii), the Administrative Agent may release any Secured Guarantee with the prior written consent of the Required Lenders; provided that any release of all or substantially all the Secured Guarantees shall require the consent of all the Lenders.

(d) Waiver by Guarantors. Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Borrower, any other Guarantor or any other Person.

(e) Subrogation. A Guarantor that makes a payment with respect to a Secured Obligation hereunder shall be subrogated to the rights of the payee against the relevant Borrower with respect to such payment; provided that no Guarantor shall enforce any payment by way of subrogation against any Borrower, or by reason of contribution against any other guarantor of such Secured Obligation, until all the Release Conditions have been satisfied.

(f) Stay of Acceleration. If acceleration of the time for payment of any Secured Obligation is stayed by reason of the insolvency or receivership of one or more Borrowers or otherwise, all Secured Obligations otherwise subject to acceleration under the terms of any Secured Agreement shall nonetheless be payable by the Guarantors hereunder forthwith on demand by the Administrative Agent.

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(g) Right of Set-Off. Upon the occurrence and during the continuation of any Event of Default, each of the Secured Parties is authorized, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Secured Party to or for the credit or the account of any Guarantor against the obligations of such Guarantor under its Secured Guarantee, irrespective of whether or not such Secured Party shall have made any demand thereunder and although such obligations may be unmatured. The rights of each Secured Party under this subsection are in addition to all other rights and remedies (including other rights of set-off) that such Secured Party may have.

(h) Continuing Guarantee. Each Secured Guarantee is a continuing guarantee, shall be binding on the relevant Guarantor and its successors and assigns, and shall be enforceable by the Administrative Agent or the Secured Parties. If all or part of any Secured Party’s interest in any Secured Obligation is assigned or otherwise transferred, the transferor’s rights under each Secured Guarantee, to the extent applicable to the obligation so transferred, shall automatically be transferred with such obligation.

(i) Limitation on Obligations of Guarantor. The obligations of each Guarantor under its Secured Guarantee shall be limited to an aggregate amount equal to the largest amount that would not render such Secured Guarantee subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provisions of applicable law.

SECTION 3. Grant of Transaction Liens. (a) Each Lien Grantor, in order to secure the Secured Obligations, grants to the Administrative Agent for the benefit of the Secured Parties a continuing security interest in all the following property of such Lien Grantor, whether now owned or existing or hereafter acquired or arising and regardless of where located, subject to the exceptions set forth in Section 3(b):

(i) all Inventory;

(ii) all Receivables;

(iii) all Contracts;

(iv) the Inventory Concentration Account, the Sweep Account and the Cash Collateral Account;

(v) all amounts payable by or for the account of Equistar Receivables to or for the account of any Loan Party in connection with the Securitization Facility;

(vi) all Equity Interests in, and all Indebtedness and other obligations owed by, Equistar Receivables;

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(vii) all books and records (including customer lists, credit files, computer programs, printouts and other computer materials and records) of such Lien Grantor pertaining to any of its Collateral; and

(viii) all other Proceeds of the Collateral described in the foregoing clauses (i) through (vii).

(b) The Collateral shall not include any right, title and interest in, to and under:

(i) Transferred Receivables,

(ii) all cash collections and other cash proceeds of such Transferred Receivables (including, without limitation, (x) all cash proceeds of items (iii) through (viii) below and (y) all cash collections and other cash proceeds deemed to have been received, and actually paid, pursuant to Section 2.03 of the RSA Agreement),

(iii) all security agreements, invoices or other Contracts that relate to any such Transferred Receivable,

(iv) all goods (including returned goods (except as otherwise provided in the Intercreditor Agreement)), if any, relating to the sale which gave rise to any such Transferred Receivable,

(v) all other security interests or liens and property subject thereto from time to time purporting to secure payment of any such Transferred Receivable, whether pursuant to the invoice or other Contract relating to such Transferred Receivable or otherwise, together with all financing statements signed or authenticated by an obligor in respect of any such Transferred Receivable describing any collateral securing any such Transferred Receivable,

(vi) all lock boxes and accounts (other than the Inventory Concentration Account, the Sweep Account and the Cash Collateral Account) to which collections under (ii) are sent and deposited, and all funds and investments therein,

(vii) all letter of credit rights, guaranties, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Transferred Receivables, whether pursuant to the invoice or other Contract relating to any such Transferred Receivable or otherwise,

(viii) all invoices, Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Transferred Receivables and the obligors thereon,

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(ix) all proceeds of the items described in Sections 3(b)(i) through 3(b)(viii), together with all of such transferee’s rights, remedies, powers and privileges with respect to such Transferred Receivables (preceding Sections Section 3(b)(ii) through 3(b)(viii), collectively, the “Related Transferred Rights”), and

(x) rights of any Lien Grantor in respect of any General Intangible to the extent such General Intangible by its terms, by the terms of any related agreement with a Person other than a Subsidiary or by the terms of any applicable law under which it arises (A) validly prohibits the creation of a security interest therein by any Lien Grantor, (B) validly requires the consent of any third party to the creation of a security interest therein or (C) validly gives rise to any right of termination or default remedy by reason of the creation of a security interest therein.

(c) With respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein includes a continuing security interest in all right, title and interest of any Lien Grantor in and to (i) any Supporting Obligation that supports such payment or performance and (ii) any Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.

(d) With respect to all Inventory included in the Collateral from time to time, each Lien Grantor hereby grants to the Administrative Agent an irrevocable, fully paid, non-exclusive, transferable license to use any Intellectual Property which is embodied in, or the use of which is necessary or desirable in order to realize the value of, such Inventory, except to the extent that such grant of such license would be validly prohibited by the terms of an agreement relating to such Intellectual Property between the Lien Grantor and an unaffiliated Person.

(e) The Transaction Liens are granted as security only and shall not subject the Administrative Agent or any other Secured Party to, or transfer or in any way affect or modify, any obligation or liability of any Lien Grantor with respect to any of the Collateral or any transaction in connection therewith.

SECTION 4. General Representations And Warranties. Each Lien Grantor represents and warrants that:

(a) Such Lien Grantor is duly organized, validly existing and in good standing under the laws of the jurisdiction identified as its jurisdiction of organization in its Perfection Certificate.

(b) Such Lien Grantor has good title to all its Collateral (subject to exceptions that are, in the aggregate, not material), free and clear of any Lien other than Permitted Liens.

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(c) Such Lien Grantor has not performed any acts that prevent the Administrative Agent from enforcing any of the provisions of the Collateral Documents or that would limit the Administrative Agent in any such enforcement. No financing statement, security agreement, mortgage or similar or equivalent document or instrument covering all or part of the Collateral owned by such Lien Grantor is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect or record a Lien on such Collateral, except (x) financing statements with respect to which duly executed termination statements shall have been delivered to the Administrative Agent not later than the Effective Date and (y) financing statements, mortgages or other similar or equivalent documents with respect to Permitted Liens. After the Effective Date, no Collateral owned by such Lien Grantor will be in the possession or under the control of any other Person having a Lien thereon, other than a Permitted Lien.

(d) The Transaction Liens on all Collateral owned by such Lien Grantor (i) have been validly created, (ii) will attach to each item of such Collateral on the Effective Date (or, if such Lien Grantor first obtains rights thereto on a later date, on such later date) and (iii) when so attached, will secure all the Secured Obligations.

(e) Such Lien Grantor has delivered a Perfection Certificate to the Administrative Agent.

(f) When UCC financing statements describing the Collateral as set forth in such Lien Grantor’s Perfection Certificate have been filed in the offices specified in the Perfection Certificate, the Transaction Liens will constitute perfected security interests in the Collateral owned by such Lien Grantor to the extent that a security interest therein may be perfected by filing pursuant to the UCC, prior to all Liens and rights of others therein except Permitted Liens. Except for the filing of such UCC financing statements, no registration, recordation or filing with any governmental body, agency or official is required in connection with the execution or delivery of the Collateral Documents or is necessary for the validity or enforceability thereof or for the perfection of the Transaction Liens pursuant to the UCC or for the enforcement of the Transaction Liens pursuant to the UCC.

(g) Such Lien Grantor has taken, and will continue to take, all actions necessary under the UCC to perfect its interest in any Receivables purchased or otherwise acquired by it, as against its assignors and creditors of its assignors.

(h) Such Lien Grantor’s Collateral is insured to the extent required by the Credit Agreement.

(i) Any Inventory produced by such Lien Grantor in the United States has or will have been produced in compliance, in all material respects, with the applicable requirements of the Fair Labor Standards Act, as amended.

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(j) Other than a Restricted Account, there is no deposit account owned by such Lien Grantor into which any collections or other payments or proceeds in respect of Collateral are to be deposited.

SECTION 5. Further Assurances; General Covenants. Each Lien Grantor covenants as follows:

(a) Such Lien Grantor will, from time to time, at its own expense, execute, deliver, authorize, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action that from time to time may be reasonably necessary, or that the Administrative Agent may reasonably request, in order to:

(i) create, preserve, perfect, confirm or validate the Transaction Liens on the Collateral;

(ii) enable the Administrative Agent and the other Secured Parties to obtain the full benefits of the Collateral Documents; or

(iii) enable the Administrative Agent to exercise and enforce any of its rights, powers and remedies with respect to any of the Collateral.

To the extent permitted by applicable law, such Lien Grantor authorizes the Administrative Agent to execute and file such financing statements or continuation statements without the Lien Grantor’s signature appearing thereon. The Administrative Agent agrees to provide such Lien Grantor with copies of any such financing statements and continuation statements. Such Lien Grantor constitutes the Administrative Agent its attorney-in-fact to execute and file all filings required or so requested for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; and such power, being coupled with an interest, shall be irrevocable until all the Transaction Liens granted by such Lien Grantor terminate pursuant to Section 13. The Borrowers will pay the reasonable out-of-pocket costs of, or incidental to, any recording or filing of any financing or continuation statements or other documents recorded or filed pursuant hereto.

(b) Such Lien Grantor will not (i) change its name or structure as a limited partnership, limited liability company, corporation or other entity, or (ii) change its location (determined as provided in UCC Section 9-307) unless it shall have given the Administrative Agent prior notice thereof.

(c) If any of its Collateral is in the possession or control of a warehouseman, bailee or agent at any time, such Lien Grantor will, promptly upon the request of the Administrative Agent made during a Sweep Period, (i) notify such warehouseman, bailee or agent of the relevant Transaction Liens and (ii) instruct such warehouseman, bailee or agent to hold all such Collateral for the Administrative Agent’s account subject to the Administrative Agent’s instructions (which shall permit such Collateral to be removed by such Lien Grantor in the

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ordinary course of business until the Administrative Agent notifies such warehouseman, bailee or agent that an Event of Default has occurred and is continuing).

(d) Such Lien Grantor will not sell, lease, exchange, assign or otherwise dispose of, or grant any option with respect to, any of its Collateral; provided that such Lien Grantor may do any of the foregoing unless (i) doing so would breach a covenant in the Credit Agreement or (ii) an Event of Default shall have occurred and be continuing and the Administrative Agent, upon the instructions of the Required Lenders, shall have notified such Lien Grantor that its right to do so is terminated, suspended or otherwise limited.

(e) Such Lien Grantor will, promptly upon request, provide to the Administrative Agent all information and evidence concerning the Collateral that the Administrative Agent may reasonably request from time to time to enable it to enforce the provisions of the Collateral Documents.

SECTION 6. Restricted Accounts. The Lien Grantors will at all times cause to be maintained a system of deposit accounts complying with each of the requirements set forth below:

(a) Lockbox Accounts. All payments by or for the account of the account debtors under all Pledged Receivables and under all Transferred Receivables (except for certain wire transfers made directly from the account debtor to the Receivables Concentration Account) will be deposited directly upon receipt by a Lien Grantor or Equistar Receivables to the credit of one or more lockbox deposit accounts in the name of Equistar Receivables maintained with Bank of America, N.A. or another depositary bank approved in writing by the Administrative Agent (“Lockbox Accounts”). No deposits from any other source will be made to the Lockbox Accounts by a Lien Grantor or Equistar Receivables. The depositary bank will be instructed to transfer all credit balances in each Lockbox Account to the Receivables Concentration Account not later than the close of business on each Business Day, and no other withdrawals shall be permitted. Such instructions will be irrevocable without the prior written consent of the Administrative Agent.

(b) Receivables Concentration Account. The Loan Parties will cause Equistar Receivables to maintain a deposit account in the name of Equistar Receivables with Bank of America, N.A. or another depositary bank approved in writing by the Administrative Agent (the “Receivables Concentration Account”). All amounts deposited to the credit of any Lockbox Account will be transferred to the Receivables Concentration Account as contemplated by subsection (a) above, and no deposits from any other source will be made by a Lien Grantor or Equistar Receivables to the Receivables Concentration Account (except as noted in subsection (a) above). The Receivables Concentration Account will be subject to the Control of the Receivables Agent. Subject to the rights of the Receivables Agent, the depositary bank will be instructed to transfer

15

all credit balances in the Receivables Concentration Account to the Receivables Funding Account not later than the close of business on each Business Day, and no other withdrawals shall be permitted. Such instructions will be irrevocable without the prior written consent of the Administrative Agent.

(c) Receivables Funding Account. The Loan Parties will cause Equistar Receivables to maintain a deposit account in the name of Equistar Receivables with Bank of America, N.A. or another depositary bank approved in writing by the Administrative Agent (the “Receivables Funding Account”). Subject to the rights of the Receivables Agent, the depositary bank will be instructed to transfer all credit balances in the Receivables Funding Account, other than such portion of such credit balances that such depositary bank is instructed to remit to the Receivables Agent pursuant to the Securitization Facility, to the Inventory Concentration Account not later than the close of business on each Business Day, and no other withdrawals shall be permitted. Such instructions will be irrevocable without the prior written consent of the Administrative Agent.

(d) Inventory Concentration Account. The Loan Parties will establish a deposit account in the name of one of the Loan Parties with Bank of America, N.A. or another depositary bank approved in writing by the Administrative Agent (the “Inventory Concentration Account”). Except to the extent remitted to the Receivables Agent pursuant to the Securitization Facility, all amounts deposited to the credit of the Receivables Funding Account will be transferred to the Inventory Concentration Account as contemplated by subsection (c) above. In addition, all (i) payments by Equistar Receivables of the purchase price for Transferred Receivables pursuant to the Securitization Facility and (ii) other proceeds of sale or other disposition of Collateral will be deposited directly into the Inventory Concentration Account. No deposits from any other source will be made to the Inventory Concentration Account. The Inventory Concentration Account will be subject to the Control of the Administrative Agent. Subject to the rights of the Administrative Agent, the depositary bank will be instructed to transfer all credit balances in the Inventory Concentration Account to such account or accounts as the Borrowers’ Agent may designate from time to time not later than the close of business on each Business Day.

(e) Sweep Account. The Loan Parties will maintain a deposit account in the name of one of the Loan Parties with Citibank, N.A. (the “Sweep Account”), which shall be under the Control of the Administrative Agent. During each Sweep Period, all amounts deposited to the credit of the Inventory Concentration Account will be transferred to the Sweep Account pursuant to instructions given by the Administrative Agent to the depositary bank for the Inventory Concentration Account. In addition, during any Sweep Period, the Receivables Agent will cause all amounts received by it from the Receivables Concentration Account and otherwise required to be remitted to a Loan Party pursuant to the Securitization Facility to be deposited directly in the Sweep Account. All amounts so deposited to the Sweep Account shall be applied pursuant to the instructions of the Administrative Agent as required under the

16

terms of Section 2.08 of the Credit Agreement and, so long as no Default shall then be continuing, any balance remaining after such application shall be remitted to the Loan Parties in accordance with the instructions of the Borrowers’ Agent to the Administrative Agent. Any amounts not so applied or remitted shall be deposited in the Cash Collateral Account and released to the Borrowers in accordance with the final sentence of Section 2.08(b)(ii) of the Credit Agreement.

(f) Cash Collateral Account. The Loan Parties will maintain one or more additional deposit accounts in the name of one of the Loan Parties with Citibank, N.A. (collectively, the “Cash Collateral Account”), which shall be under the control of the Administrative Agent. The Borrowers may from time to time at their election cause monies to be deposited to the credit of the Cash Collateral Account and held therein as contemplated by the Credit Agreement. Amounts on deposit in the Cash Collateral Account may be withdrawn therefrom upon request of the Borrowers’ Agent to the Administrative Agent, upon satisfaction of the applicable conditions specified in the Credit Agreement and as specified in the Intercreditor Agreement.

(g) Certain Remedies. If an Event of Default shall have occurred and be continuing, the Administrative Agent may (i) retain all cash and investments then held in the Cash Collateral Account, (ii) liquidate any or all investments held therein and/or (iii) withdraw any amounts held therein and apply such amounts as provided in Section 8(a).

(h) Funds held in the Cash Collateral Account may, until withdrawn or otherwise applied pursuant hereto, be invested and reinvested in such Liquid Investments as the Borrowers’ Agent shall request from time to time; provided that, if an Event of Default shall have occurred and be continuing, the Administrative Agent may select such Liquid Investments.

(i) If immediately available cash on deposit in the Cash Collateral Account is not sufficient to make any distribution or withdrawal to be made pursuant hereto, the Administrative Agent will cause to be liquidated, as promptly as practicable, such investments held in or credited to the Cash Collateral Account as shall be required to obtain sufficient cash to make such distribution or withdrawal and, notwithstanding any other provision hereof, such distribution or withdrawal shall not be made until such liquidation has taken place.

SECTION 7. Remedies upon Event of Default. (a) If an Event of Default shall have occurred and be continuing, the Administrative Agent may exercise (or cause its sub-agents to exercise) any or all of the remedies available to it (or to such sub-agents) under the Collateral Documents.

(b) Without limiting the generality of the foregoing, if an Event of Default shall have occurred and be continuing, the Administrative Agent may exercise on behalf of the Secured Parties all the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised)

17

with respect to any Collateral and, in addition, the Administrative Agent may, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, withdraw all cash held in the Cash Collateral Account and apply such cash as provided in Section 8 and, if there shall be no such cash or if such cash shall be insufficient to pay all the Secured Obligations in full, sell, lease, license or otherwise dispose of the Collateral or any part thereof. Notice of any such sale or other disposition shall be given to the Borrowers’ Agent as required by Section 10.

SECTION 8. Application of Proceeds. (a) If an Event of Default shall have occurred and be continuing, the Administrative Agent may apply (i) any cash held in the Cash Collateral Account and (ii) the proceeds of any sale or other disposition of all or any part of the Collateral, in the following order of priorities:

first,	to pay the expenses of such sale or other disposition, including reasonable compensation to agents of and counsel for the Administrative Agent, and all expenses, liabilities and advances incurred or made by the Administrative Agent in connection with the Collateral Documents, and any other amounts then due and payable to the Administrative Agent pursuant to Section 9 or to any Agent pursuant to the Credit Agreement;
second,	to pay ratably all interest (including Post-Petition Interest) on the Secured Obligations and all commitment and other fees payable under the Related Documents, until payment in full of all such interest and fees shall have been made;
third,	to pay ratably all (i) amounts required to be deposited in the Cash Collateral Account as cash collateral for the LC Exposure under the Credit Agreement and (ii) unpaid principal of Swingline Loans, until payment in full of all such amounts shall have been made;
fourth,	to pay the unpaid principal of the Revolving Loans ratably, until payment in full of the principal of all Revolving Loans shall have been made;
fifth,	to pay ratably all Secured Cash Management Obligations and Secured Derivative Obligations permitted under this Agreement (or provide for the payment thereof pursuant to Section 8(b)), until payment in full of all such Secured Cash Management Obligations and Secured Derivative Obligations shall have been made (or so provided for);
sixth,	to pay all other Secured Obligations ratably (or provide for the payment thereof pursuant to Section 8(b)), until payment in full of all such other Secured Obligations shall have been made (or so provided for); and

18

finally, to pay to the relevant Lien Grantor, or as a court of competent jurisdiction may direct, any surplus then remaining from the proceeds of the Collateral owned by it.

The Administrative Agent may make such distributions hereunder in cash or in kind or, on a ratable basis, in any combination thereof.

(b) If at any time any portion of any monies collected or received by the Administrative Agent would, but for the provisions of this Section 8(b), be payable pursuant to Section 8(a) in respect of an Unliquidated Secured Obligation, the Administrative Agent shall not apply any monies to pay such Unliquidated Secured Obligation but instead shall request the holder thereof (other than a holder of a Secured Derivatives Obligation), at least ten days before each proposed distribution hereunder, to notify the Administrative Agent and the Borrowers as to the Estimated Liquidated Amount of such Unliquidated Secured Obligation. Each holder of a Secured Derivatives Obligation that represents an Unliquidated Secured Obligation shall provide or cause to be provided to the Administrative Agent and the Borrowers, not later than the last Business Day of each calendar week and at such other times as the Administrative Agent may reasonably request, the Estimated Liquidated Amount of such Unliquidated Secured Obligation. If the holder of such Unliquidated Secured Obligation does not notify the Administrative Agent and the Borrowers of the Estimated Liquidated Amount thereof at least two Business Days before such distribution, such Unliquidated Secured Obligation will not be entitled to share in such distribution. If such holder does so notify the Administrative Agent as to the Estimated Unliquidated Amount thereof, the Administrative Agent will allocate to such holder a portion of the monies to be distributed in such distribution, calculated as if such Unliquidated Secured Obligation were outstanding in the Estimated Liquidated Amount thereof. However, the Administrative Agent will not apply such portion of such monies to pay such Unliquidated Secured Obligation, but instead will hold such monies or invest such monies in Liquid Investments. All such monies and Liquid Investments and all proceeds thereof will constitute Collateral hereunder, but will be subject to distribution in accordance with this Section 8(b) rather than Section 8(a). The Administrative Agent will hold all such monies and Liquid Investments and the net proceeds thereof in trust until all or part of such Unliquidated Secured Obligation becomes a Liquidated Secured Obligation, whereupon the Administrative Agent, at the request of the relevant Secured Party, will apply the amount so held in trust to pay such Liquidated Secured Obligation; provided that, if the other Secured Obligations theretofore paid pursuant to the same clause of Section 8(a) (i.e., clause second, fourth or fifth) were not paid in full, the Administrative Agent will apply the amount so held in trust to pay the same percentage of such Liquidated Secured Obligation as the percentage of such other Secured Obligations theretofore paid pursuant to the same clause of Section 8(a). If (i) the holder of

19

such Unliquidated Secured Obligation shall advise the Administrative Agent that no portion thereof remains in the category of an Unliquidated Secured Obligation and (ii) the Administrative Agent still holds any amount held in trust pursuant to this Section 8(b) in respect of such Unliquidated Secured Obligation (after paying all amounts payable pursuant to the preceding sentence with respect to any portions thereof that became Liquidated Secured Obligations), such remaining amount will be applied by the Administrative Agent in the order of priorities set forth in Section 8(a).

(c) All distributions made by the Administrative Agent pursuant to this Section shall be final (except in the event of manifest error) and the Administrative Agent shall have no duty to inquire as to the application by any Secured Party of any amount distributed to it.

SECTION 9. Fees and Expenses; Indemnification. (a) Each Lien Grantor will within five Business Days of demand pay to the Administrative Agent:

(i) the amount of any taxes (other than Excluded Taxes) that the Administrative Agent may have been required to pay by reason of the Transaction Liens or to free any Collateral from any Lien thereon in connection with the exercise of remedies hereunder;

(ii) the amount of any and all reasonable out-of-pocket expenses, including transfer taxes and reasonable fees and expenses of counsel and other experts, that the Administrative Agent may incur in connection with (x) the administration or enforcement of the Collateral Documents, including such expenses as are incurred to preserve the value of the Collateral or the validity, perfection, rank or value of any Transaction Lien, (y) the collection, sale or other disposition of any Collateral or (z) the exercise by the Administrative Agent of any of its rights or powers under the Collateral Documents;

(iii) the amount of any fees that such Lien Grantor shall have agreed in writing to pay to the Administrative Agent and that shall have become due and payable in accordance with such written agreement; and

(iv) the amount required to indemnify the Administrative Agent for, or hold it harmless and defend it against, any loss, liability or expense (including the reasonable expenses and out-of-pocket fees of its counsel and any experts or sub-agents appointed by it hereunder) incurred or suffered by the Administrative Agent in connection with the Collateral Documents, except to the extent that such loss, liability or expense arises from the Administrative Agent’s gross negligence or willful misconduct or a breach of any duty that the Administrative Agent has under this Agreement (after giving effect to Sections 11 and 12).

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Any such amount not paid to the Administrative Agent on demand will bear interest for each day thereafter until paid at a rate per annum equal to the sum of 2.00% plus the Alternate Base Rate for such day plus the Applicable Margin that would, in the absence of an Event of Default, be applicable to the ABR Loans for such day.

(b) If any transfer tax, documentary stamp tax or other tax (other than Excluded Taxes) is payable in connection with any transfer or other transaction provided for in the Collateral Documents, the relevant Lien Grantor will pay such tax and provide any required tax stamps to the Administrative Agent or as otherwise required by law.

SECTION 10. Authority to Administer Collateral. Each Lien Grantor irrevocably appoints the Administrative Agent its true and lawful attorney, with full power of substitution, in the name of such Lien Grantor, any Secured Party or otherwise, for the sole use and benefit of the Secured Parties, but at such Lien Grantor’s expense, to the extent permitted by law to exercise, at any time and from time to time while an Event of Default shall have occurred and be continuing, all or any of the following powers with respect to all or any of the Collateral (to the extent necessary to pay the Secured Obligations in full):

(a) to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof,

(b) to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto,

(c) to sell, lease, license or otherwise dispose of the same or the proceeds or avails thereof, as fully and effectually as if the Administrative Agent were the absolute owner thereof,

(d) to extend the time of payment of any or all thereof and to make any allowance or other adjustment with reference thereto, and

(e) with respect to Equity Interests in Equistar Receivables, to exercise all voting and other rights to which the owner thereof is entitled;

provided that, except in the case of Collateral that is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Administrative Agent will give the relevant Lien Grantor at least ten days’ prior written notice of the time and place of any public sale thereof or the time after which any private sale or other intended disposition thereof will be made. Any such notice shall (i) contain the information specified in UCC Section 9-613, (ii) be Authenticated and (iii) be sent to the parties required to be notified pursuant to UCC Section 9-611(c); provided that, if the Administrative Agent fails to comply with this sentence in any respect, its liability for such failure shall be limited to the liability (if any) imposed on it as a matter of law under the UCC.

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SECTION 11. Limitation on Duty in Respect of Collateral. Beyond the exercise of reasonable care in the custody and preservation thereof, the Administrative Agent will have no duty as to any Collateral in its possession or control or in the possession or control of any sub-agent or bailee or any income therefrom or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Administrative Agent will be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession or control if such Collateral is accorded treatment substantially equal to that which it accords its own property, and will not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of any act or omission of any sub-agent or bailee selected by the Administrative Agent in good faith or by reason of any act or omission by the Administrative Agent pursuant to instructions from the Administrative Agent, except to the extent that such liability arises from the Administrative Agent’s gross negligence or willful misconduct.

SECTION 12. General Provisions Concerning the Administrative Agent.

(a) The provisions of Article 8 of the Credit Agreement shall inure to the benefit of the Administrative Agent, and shall be binding upon all Lien Grantors and all Secured Parties, in connection with this Agreement and the other Collateral Documents. Without limiting the generality of the foregoing, (i) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing, (ii) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Collateral Documents that the Administrative Agent is required in writing to exercise by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02 of the Credit Agreement), and (iii) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for any failure to disclose, any information relating to the Borrower, any of its Subsidiaries or their respective Affiliates that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be responsible for the existence, genuineness or value of any Collateral or for the validity, perfection, priority or enforceability of any Transaction Lien, whether impaired by operation of law or by reason of any action or omission to act on its part under the Collateral Documents. The Administrative Agent shall be deemed not to have knowledge of any Event of Default unless and until written notice thereof is given to the Administrative Agent by the Borrowers’ Agent or a Secured Party.

(b) Sub-Agents and Related Parties. The Administrative Agent may perform any of its duties and exercise any of its rights and powers through one or more sub-agents appointed by it. The Administrative Agent and any such sub-agent may perform any of its duties and exercise any of its rights and powers

22

through its Related Parties. The exculpatory provisions of Section 11 and this Section shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent.

(c) Information as to Secured Obligations and Actions by Secured Parties. For all purposes of the Collateral Documents, including determining the amounts of the Secured Obligations and whether a Secured Obligation is a Contingent Secured Obligation or not, or whether any action has been taken under any Secured Agreement, the Administrative Agent will be entitled to rely on information from (i) its own records for information as to the Lender Parties, their Secured Obligations and actions taken by them, (ii) any Secured Party for information as to its Secured Obligations and actions taken by it, to the extent that the Administrative Agent has not obtained such information from its own records, and (iii) the Borrowers, to the extent that the Administrative Agent has not obtained information from the foregoing sources.

(d) Refusal to Act. The Administrative Agent may refuse to act on any notice, consent, direction or instruction from any Secured Parties or any agent, trustee or similar representative thereof that, in the Administrative Agent’s opinion, (i) is contrary to law or the provisions of any Security Document, (ii) may expose the Administrative Agent to liability (unless the Administrative Agent shall have been indemnified, to its reasonable satisfaction, for such liability by the Secured Parties that gave such notice, consent, direction or instruction) or (iii) is unduly prejudicial to Secured Parties not joining in such notice, consent, direction or instruction.

(e) Copies of Certain Notices. Within two Business Days after it receives or sends any notice referred to in this subsection, the Administrative Agent shall send to the Lenders and each Secured Party Requesting Notice, copies of any certificate designating additional obligations as Secured Obligations received by the Administrative Agent pursuant to Section 14 and any notice given by the Administrative Agent to any Lien Grantor, or received by it from any Lien Grantor, pursuant to Section 7, 8, 10 or 13.

SECTION 13. Termination of Transaction Liens; Release of Collateral.

(a) The Transaction Liens shall terminate when all the Release Conditions are satisfied.

(b) The Transaction Liens (x) with respect to any Pledged Receivables shall terminate when such Receivables have become Transferred Receivables and (y) so long as at the time no Event of Default exists, with respect to any other Collateral shall terminate upon the sale of such Collateral to a Person other than Equistar or a Subsidiary in a transaction not prohibited by the Loan Documents. In each case, such termination shall not require the consent of any Secured Party, and the Administrative Agent and any third party shall be fully protected in relying on a certificate of the Borrowers’ Agent as to whether any Pledged

23

Receivables qualify as Transferred Receivables (including without limitation whether the transfer thereof is permitted under the Credit Agreement and this Agreement), as to whether the sale of any other Collateral is permitted by the Loan Documents and as to whether an Event of Default exists.

(c) In the case of any Pledged Receivables, the Transaction Liens with respect to the Related Transferred Rights shall terminate when such Pledged Receivables become Transferred Receivables. Such termination shall not require the consent of any Secured Party.

(d) At any time before the Transaction Liens terminate, the Administrative Agent may, at the written request of the Borrowers’ Agent, (i) release any Collateral (but not all or substantially all of the Collateral) with the prior written consent of the Required Lenders or (ii) release all or substantially all of the Collateral with the prior written consent of all the Lenders.

(e) Upon any termination of a Transaction Lien or release of Collateral, the Administrative Agent will, at the expense of the relevant Lien Grantor, execute and deliver to the Borrowers’ Agent such documents as the Borrowers’ Agent shall reasonably request to evidence the termination of such Transaction Lien or the release of such Collateral, as the case may be.

SECTION 14. Additional Lien Grantors. Any Subsidiary may become a party hereto by signing and delivering to the Administrative Agent a Security Agreement Supplement, whereupon such Subsidiary shall become a Borrower or a Guarantor, as applicable, and a Lien Grantor.

SECTION 15. Notices. Each notice, request or other communication given to any party hereunder shall be given in accordance with Section 10.01 of the Credit Agreement, and in the case of any such notice, request or other communication to a Lien Grantor other than Equistar, shall be given to it in care of the Borrowers’ Agent.

SECTION 16. No Implied Waivers; Remedies Not Exclusive. No failure by the Administrative Agent or any Secured Party to exercise, and no delay in exercising and no course of dealing with respect to, any right or remedy under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise by the Administrative Agent or any Secured Party of any right or remedy under any Loan Document preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies specified in the Loan Documents are cumulative and are not exclusive of any other rights or remedies provided by law.

SECTION 17. Successors and Assigns. This Agreement is for the benefit of the Administrative Agent and the Secured Parties. If all or any part of any Secured Party’s interest in any Secured Obligation is assigned or otherwise transferred, the transferor’s rights hereunder, to the extent applicable to the

24

obligation so transferred, shall be automatically transferred with such obligation. This Agreement shall be binding on the Lien Grantors and their respective successors and assigns.

SECTION 18. Amendments and Waivers. Neither this Agreement nor any provision hereof may be waived, amended, modified or terminated except pursuant to an agreement or agreements in writing entered into by the Administrative Agent, with the consent of such Lenders as are required to consent thereto under Section 10.02(b) of the Credit Agreement. No such waiver, amendment or modification shall (i) be binding upon any Lien Grantor, except with its written consent, or (ii) affect the rights of a Secured Party (other than a Lender) hereunder more adversely than it affects the comparable rights of the Lenders hereunder, without the consent of such Secured Party.

SECTION 19. Choice of Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than the State of New York are governed by the laws of such jurisdiction.

SECTION 20. Waiver of Jury Trial. EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY SECURITY DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 21. Severability. If any provision of any Security Document is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions of the Collateral Documents shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Administrative Agent and the Secured Parties in order to carry out the intentions of the parties thereto as nearly as may be possible and (ii) the invalidity or unenforceability of such provision in such jurisdiction shall not affect the validity or enforceability thereof in any other jurisdiction.

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

EQUISTAR CHEMICALS, LP
By:	/s/ Karen A. Twitchell
	Name: Karen A. Twitchell
	Title:   Principal Financial Officer
CITICORP USA, INC., as Administrative Agent
By:	/s/ David Jaffe
	Name: David Jaffe
	Title:   Vice President

[Security Agreement]

EXHIBIT A

to Security Agreement

PERFECTION CERTIFICATE

The undersigned is a duly authorized officer of [Equistar Chemicals, LP] [name of other Lien Grantor] (the “Lien Grantor”). With reference to the Security Agreement dated as of December 17, 2003 between the Lien Grantor and Citicorp USA, Inc., as Administrative Agent (terms defined therein being used herein as therein defined), the undersigned certifies to the Administrative Agent and each other Secured Party as follows:

A. Information Required for Filings and Searches for Prior Filings.

1. Jurisdiction of Organization. The Lien Grantor is a [limited partnership organized under the laws of Delaware] [specify type of entity and jurisdiction of organization of each other Lien Grantor].

2. Name. The exact limited partnership name of the Lien Grantor as it appears in its [certificate of limited partnership] [specify applicable Constituent Document for each other Lien Grantor] is as follows:

[Equistar Chemicals, LP] [specify for each other Lien Grantor]

3. Prior Names. Set forth below is each other name that the Lien Grantor has had since its organization, together with the date of the relevant change:

[None] [specify for each other Lien Grantor]

4. Filing Office. In order to perfect the Transaction Liens granted by the Lien Grantor, a financing statement on Form UCC-1, with the collateral described as set forth on Schedule I hereto, should be on file in [the office of the Secretary of State in the State of Delaware] [specify applicable office(s) for each other Lien Grantor].

B. Additional Information Required for Searches for Prior Filings Under Old Article 9.

1. Current Locations. (a) The chief executive office of the Lien Grantor is located at the following address:

A-1

Mailing Address	County	State
[Equistar Chemicals, LP 1221 McKinney Street Suite 700 Houston, Texas 77010	Harris	Texas

The Lien Grantor does have a place of business in another county of the State listed above.]

[specify applicable information for each other Lien Grantor]

(b) The following are all places of business of the Lien Grantor not identified above:

Mailing Address	County	State
[See attached	See attached	See attached	]

[specify applicable information for each other Lien Grantor]

(c) The following are all locations not identified above where the Lien Grantor maintains any Inventory:

Mailing Address	County	State
[See attached	See attached	See attached	]

[specify applicable information for each other Lien Grantor]

(d) The following are the names and addresses of all Persons (other than the Lien Grantor) that have possession of any of the Lien Grantor’s Inventory:

A-2

Mailing Address	County	State
[See attached	See attached	See attached	]

[specify applicable information for each other Lien Grantor]

2. Prior Locations. [Attached hereto is the Perfection Certificate dated August 24, 2001 delivered in connection with the Amended and Restated Credit Agreement dated as of August 24, 2001 among the Lien Grantor and, the lenders and agents party thereto.]

[include the following for each other Lien Grantor:

(a) Set forth below is the information required by paragraphs (a) and (b) of Part B-1 above with respect to each other location or place of business maintained by the Lien Grantor at any time during the past five years:

(b) Set forth below is the information required by paragraphs (c) and (d) of Part B-1 above with respect to each other location or bailee where or with whom any of the Lien Grantor’s Inventory has been lodged at any time during the past four months:]

A-3

IN WITNESS WHEREOF, I have hereunto set my hand this [                    ], 200_.

Name:

Title:

A-4

Schedule I

to Perfection Certificate

[of EXHIBIT A]

DESCRIPTION OF COLLATERAL¹

All Inventory, Receivables, Contracts, the Inventory Concentration Account, the Sweep Account and the Cash Collateral Account, all amounts payable by or for the account of Equistar Receivables II, LLC to or for the account of the Debtor in connection with the Securitization Facility, all equity interests in, and all indebtedness and other obligations owed by, Equistar Receivables II, LLC, and all books and records (including customer lists, credit files, computer programs, printouts and other computer material and records) pertaining to the foregoing, in each case whether now owned or hereafter acquired and wherever located, and all proceeds thereof, but excluding all Transferred Receivables and Related Transferred Rights (as each such term is defined on Exhibit A attached hereto).^*

¹ Revise accordingly for each other Lien Grantor

^* Form of Exhibit A to UCC-1 Financing Statements is attached hereto.

A-5

Exhibit A to UCC-1 Financing Statement

Debtor:	Secured Party:
Equistar Chemicals, LP	Citicorp USA, Inc., as
1221 McKinney Street, Suite 700	Administrative Agent
Houston, Texas 77010	388 Greenwich Street
	19th Floor
	New York, NY 10013

Capitalized terms used in the description of collateral set forth on the face of the UCC-1 Financing Statement to which this Exhibit A pertains shall have the following meanings:

“Accounts” has the meaning specified in Section 9-102 of the UCC.

“Borrower” means Equistar and each other Borrower as defined in the Credit Agreement.

“Cash Collateral Account” has the meaning specified in Section 6 of the Security Agreement.

“Chattel Paper” has the meaning specified in Section 9-102 of the UCC.

“Contracts” means all contracts for the sale, lease, exchange or other disposition of Inventory or the performance of services, whether or not performed and whether or not subject to termination upon a contingency or at the option of any party thereto.

“Credit Agreement” means the Credit Agreement dated as of December 17, 2003 among Equistar Chemicals, LP and each other Borrower, the Lenders party thereto, Bank of America, N.A. and Citicorp USA, Inc., as Co-Collateral Agents and Citicorp USA, Inc., as Administrative Agent.

“Equistar” means Equistar Chemicals, LP, a Delaware limited partnership and its successors.

“General Intangible” has the meaning specified in Section 9-102 of the UCC.

“Intercreditor Agreement” means the Intercreditor Agreement dated as of December 17, 2003 by and among Citicorp USA, Inc., as Receivables Administrative Agent, Citicorp USA, Inc., as Lender Agent, Equistar Receivables II, LLC, as Transferor, Equistar, as Originator, as Initial Servicer and as Borrower.

“Inventory” has the meaning specified in Section 9-102 of the UCC.

“Inventory Concentration Account” has the meaning specified in Section 6 of the Security Agreement.

A-6

“Lien Grantor” means each Borrower and each Guarantor as defined in the Security Agreement.

“Lockbox Account” has the meaning specified in Section 6 of the Security Agreement.

“Receivables” means all indebtedness (whether constituting Accounts or General Intangibles or Chattel Paper or otherwise) of any Person owing to the Debtor under a Contract, and includes the right to payment of any interest or finance charges and other obligations of such Person with respect thereto.

“Receivables Concentration Account” has the meaning specified in Section 6 of the Security Agreement.

“Related Transferred Rights” means

(a) all cash collections and other cash proceeds of the Transferred Receivables (including, without limitation, (x) all cash proceeds of items (b) through (g) below and (y) all cash collections and other cash proceeds deemed to have been received, and actually paid, pursuant to Section 2.03 of the RSA Agreement),

(b) all security agreements, invoices or other Contracts that relate to any of the Transferred Receivables,

(c) all goods (including returned goods (except as otherwise provided in the Intercreditor Agreement)), if any, relating to the sale which gave rise to any of the Transferred Receivables,

(d) all other security interests or liens and property subject thereto from time to time purporting to secure payment of any Transferred Receivable, whether pursuant to the invoice or other Contract relating to such Transferred Receivable or otherwise, together with all financing statements signed or authenticated by an obligor in respect of any Transferred Receivable describing any collateral securing any Transferred Receivable,

(e) all lock boxes and accounts (other than the Inventory Concentration Account, the Sweep Account and the Cash Collateral Account) to which collections under (a) are sent and deposited, and all funds and investments therein,

(f) all letter of credit rights, guaranties, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of the Transferred Receivables, whether pursuant to the invoice or other Contract relating to any Transferred Receivable or otherwise,

A-7

(g) all invoices, Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to the Transferred Receivables and the obligors thereon, and

(h) all proceeds of the items described in foregoing paragraphs, together with all of the transferee’s rights, remedies, powers and privileges with respect to the Transferred Receivables.

“Securitization Facility” means (i) the receivables securitization facility established pursuant to the Receivables Sale Agreement dated as of December 17, 2003 (as amended from time to time, the “RSA Agreement”) between Equistar and the other sellers party thereto, as Seller, Equistar Receivables II, LLC, as Buyer, and Equistar, as Buyer’s Servicer, and the Receivables Purchase Agreement dated as of December 17, 2003 among Equistar Receivables II, LLC, as Seller, Equistar, as Servicer, the Purchasers party thereto, Citicorp USA, Inc., as administrative agent and the other agents party thereto and (ii) any substantially similar replacement receivables securitization facility.

“Security Agreement” means the Security Agreement dated as of December 17, 2003 among Equistar, the other Borrowers and Guarantors party thereto and the Administrative Agent.

“Sweep Account” has the meaning specified in Section 6 of the Security Agreement.

“Transferred Receivables” means any Receivables that have been sold, contributed or otherwise transferred to Equistar Receivables II, LLC in connection with the Securitization Facility.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

A-8

EXHIBIT B

to Security Agreement

SECURITY AGREEMENT SUPPLEMENT

SECURITY AGREEMENT SUPPLEMENT dated as of             ,         , between [NAME OF LIEN GRANTOR] (the “Lien Grantor”) and Citicorp USA, Inc., as Administrative Agent.

WHEREAS, Equistar Chemicals, LP and Citicorp USA, Inc., as Administrative Agent, are parties to a Security Agreement dated as of December 17, 2003 (as heretofore amended and/or supplemented, the “Security Agreement”) under which Equistar Chemicals, LP secures certain of its obligations (the “Secured Obligations”);

WHEREAS, [name of Lien Grantor] desires to become [is] a party to the Security Agreement as a Lien Grantor thereunder; and

WHEREAS, terms defined in the Security Agreement (or whose definitions are incorporated by reference in Section 1 of the Security Agreement) and not otherwise defined herein have, as used herein, the respective meanings provided for therein;

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Grant of Transaction Liens. (a) In order to secure the Secured Obligations, the Lien Grantor grants to the Administrative Agent for the benefit of the Secured Parties a continuing security interest in all the following property of the Lien Grantor, whether now owned or existing or hereafter acquired or arising and regardless of where located (the “New Collateral”):

[describe property being added to the Collateral]²

(b) With respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein includes a continuing security interest in all right, title and interest of the Lien Grantor in (i) any Supporting Obligation that supports such payment or performance and (ii) any Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.

² If the Lien Grantor is not already a party to the Security Agreement clauses (i) through (viii) of Section 3(a) of the Security Agreement, as well as Section 3(b) of the Security Agreement, may be appropriate.

B-1

(c) With respect to all Inventory included on the Collateral from time to time, the Lien Grantor hereby grants to the Administrative Agent an irrevocable, fully paid, non-exclusive, transferable license to use any Intellectual Property which is embodied in, or the use of which is necessary or desirable in order to realize the value of such Inventory.

(d) The foregoing Transaction Liens are granted as security only and shall not subject the Administrative Agent or any other Secured Party to, or transfer or in any way affect or modify, any obligation or liability of the Lien Grantor with respect to any of the New Collateral or any transaction in connection therewith.

2. Party to Security Agreement. Upon delivering this Security Agreement Supplement to the Administrative Agent, the Lien Grantor (x) will become a party to the Security Agreement and will thereafter have all the rights and obligations of a Guarantor and a Lien Grantor thereunder and be bound by all the provisions thereof as fully as if the Lien Grantor were one of the original parties thereto and (y) will become a party to the Intercreditor Agreement and will thereafter have all the rights and obligations of a “Loan Party” thereunder (and as defined therein) and be bound by all the provisions thereof as fully as if the Lien Grantor were one of the original “Loan Parties” party thereto.³

3. Address of Lien Grantor. The address, facsimile number and e-mail address of the Lien Grantor for purposes of Section 15 of the Security Agreement are:

[address, facsimile number and e-mail address of Lien Grantor]

4. Representations and Warranties.⁴ (a) The Lien Grantor is a [    ] duly organized, validly existing and in good standing under the laws of its jurisdiction of organization specified in its Perfection Certificate.

(b) The Lien Grantor has delivered a Perfection Certificate to the Administrative Agent. The information set forth therein is correct and complete as of the date hereof.

(c) The execution and delivery of this Security Agreement Supplement by the Lien Grantor and the performance by it of its obligations under the Security Agreement as supplemented hereby are within its corporate or other powers, have been duly authorized by all necessary corporate or other action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not

³ Delete Sections 4 and 5 if the Lien Grantor is already a party to the Security Agreement.

⁴ Modify as needed if the Lien Grantor is not a corporation.

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contravene, or constitute a default under, any provision of applicable law or regulation or of its Organizational Documents, or of any agreement, judgment, injunction, order, decree or other instrument binding upon it or result in the creation or imposition of any Lien (except a Transaction Lien) on any of its assets.

(d) The Security Agreement as supplemented hereby constitutes a valid and binding agreement of the Lien Grantor, enforceable in accordance with its terms, except as limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting creditors’ rights generally and (ii) general principles of equity.

(e) Each of the representations and warranties set forth in Sections 4 through 5 of the Security Agreement is true as applied to the Lien Grantor and the New Collateral. For purposes of the foregoing sentence, references in said Sections to a “Lien Grantor” shall be deemed to refer to the Lien Grantor, references to Schedules to the Security Agreement shall be deemed to refer to the corresponding Schedules to this Security Agreement Supplement, references to “Collateral” shall be deemed to refer to the New Collateral, and references to the “Effective Date” shall be deemed to refer to the date on which the Lien Grantor signs and delivers this Security Agreement Supplement.

5. Governing Law. This Security Agreement Supplement shall be construed in accordance with and governed by the laws of the State of New York.

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

EQUISTAR CHEMICALS, LP
By:
	Name:
	Title:
CITICORP USA, INC., as Administrative Agent
By:
	Name:
	Title:

B-4

EX-4.9

Exhibit 4.9

[EXECUTION COPY]

$450,000,000

RECEIVABLES PURCHASE AGREEMENT

Dated as of December 17, 2003

among

EQUISTAR RECEIVABLES II, LLC, as the Seller,

EQUISTAR CHEMICALS, LP

as the Servicer,

THE BANKS AND OTHER FINANCIAL INSTITUTIONS PARTY HERETO,

as Purchasers,

BANK ONE, NA,

CREDIT SUISSE FIRST BOSTON

AND

JPMORGAN CHASE BANK,

as Co-Documentation Agents

CITICORP USA, INC.

AND

BANK OF AMERICA, N.A.,

as Co-Asset Agents,

CITICORP USA, INC.,

as Administrative Agent,

AND

CITIGROUP GLOBAL MARKETS INC.

AND

BANC OF AMERICA SECURITIES LLC,

as Joint Lead Arrangers

and Joint Bookrunners

TABLE OF CONTENTS

			Page
EXHIBITS			1
SCHEDULES			2
RECEIVABLES PURCHASE AGREEMENT			1
PRELIMINARY STATEMENTS:			1
ARTICLE I Definitions			1
	Section 1.1	Certain Defined Terms.	1
	Section 1.2	Other Terms.	25
	Section 1.3	Computation of Time Periods.	26
ARTICLE II Amounts and Terms of the Purchases			26
	Section 2.1	Commitment.	26
	Section 2.2	Making Purchases.	26
	Section 2.3	Swing Purchases	27
	Section 2.4	Termination or Reduction of the Commitments; Voluntary Reductions of Capital.	29
	Section 2.5	Receivable Interest.	29
	Section 2.6	Ordinary Settlement Procedures.	30
	Section 2.7	Triggering Event Settlement Procedures.	31
	Section 2.8	Liquidation Settlement Procedures.	33
	Section 2.9	General Settlement Procedures.	34
	Section 2.10	Payments and Computations, Etc.	35
	Section 2.11	Yield and Fees.	35
	Section 2.12	Special Provisions Governing Capital Investments at the Applicable LIBO Rate.	36
	Section 2.13	Increased Capital.	38
	Section 2.14	Taxes.	38
	Section 2.15	Sharing of Payments, Etc.	40
	Section 2.16	Conversion/Continuation Option.	40
	Section 2.17	Duty to Mitigate; Assignment of Commitments Under Certain Circumstances.	41

i

TABLE OF CONTENTS

(continued)

			Page
	Section 2.18	Restricted Accounts; Investment of Amounts in the Cash Assets Account.	41
ARTICLE III Conditions of Purchases			42
	Section 3.1	Conditions Precedent to the Effectiveness of this Agreement.	42
	Section 3.2	Conditions Precedent to All Investment Events.	45
ARTICLE IV Representations and Warranties			46
	Section 4.1	Representations and Warranties of the Seller.	46
	Section 4.2	Representations and Warranties of the Servicer.	49
ARTICLE V General Covenants of the Seller and the Servicer			52
	Section 5.1	Affirmative Covenants of the Seller.	52
	Section 5.2	Reporting Requirements of the Seller.	55
	Section 5.3	Negative Covenants of the Seller.	55
	Section 5.4	Affirmative Covenants of the Servicer.	57
	Section 5.5	Reporting Requirements of the Servicer.	60
	Section 5.6	Negative Covenants of the Servicer.	63
ARTICLE VI Administration and Collection			64
	Section 6.1	Designation of Servicer.	64
	Section 6.2	Duties of Servicer.	65
	Section 6.3	Rights of the Agent.	65
	Section 6.4	Responsibilities of the Seller.	66
	Section 6.5	Further Assurances.	66
ARTICLE VII Events of Termination			67
	Section 7.1	Events of Termination.	67
ARTICLE VIII The Agent			70
	Section 8.1	Authorization and Action.	70
	Section 8.2	Agent’s Reliance, Etc.	71
	Section 8.3	CUSA and Affiliates.	71
	Section 8.4	Purchase Decisions.	72
	Section 8.5	Indemnification.	72
	Section 8.6	Successor Agent	72

ii

TABLE OF CONTENTS

(continued)

			Page
	Section 8.7	Posting of Approved Electronic Communications.	72
ARTICLE IX Assignment of Receivable Interests			73
	Section 9.1	Purchaser’s Assignment of Rights and Obligations.	73
	Section 9.2	The Register.	75
	Section 9.3	Participations.	76
ARTICLE X Indemnification			76
	Section 10.1	Indemnities.	76
ARTICLE XI Miscellaneous			79
	Section 11.1	Amendments, Etc.	79
	Section 11.2	Right of Set-off.	80
	Section 11.3	Notices, Etc.	81
	Section 11.4	Binding Effect; Assignability.	81
	Section 11.5	Costs and Expenses.	81
	Section 11.6	Confidentiality.	82
	Section 11.7	Governing Law.	82
	Section 11.8	Jurisdiction, Etc.	83
	Section 11.9	Execution in Counterparts.	83
	Section 11.10	Intent of the Parties.	83
	Section 11.11	Entire Agreement.	83
	Section 11.12	Severability of Provisions.	84
	Section 11.13	Waiver of Jury Trial.	84

iii

EXHIBITS

EXHIBIT A	Form of Assignment and Acceptance
EXHIBIT B	Form of Seller Report
EXHIBIT C	Form of Lock-Box Agreement
EXHIBIT D	Form of Receivables Sale Agreement
EXHIBIT E	Form of Consent and Agreement
EXHIBIT F	Form of Notice of Purchase
EXHIBIT G	Form of Swing Purchase Request
EXHIBIT H	Form of Notice of Conversion or Continuation
EXHIBIT I-l	Form of Opinion of Baker Botts LLP, Counsel to the Seller and each Originator
EXHIBIT I-2	Form of Opinion of Internal Counsel to the Seller and each Originator
EXHIBIT I-3	Form of Opinion of Baker Botts LLP, Counsel to the Seller and each Originator (“true sale” and “no substantive consolidation” opinion)
EXHIBIT J	Form of Equistar Undertaking
EXHIBIT K	Form of Intercreditor Agreement

SCHEDULES

SCHEDULE I	Lock-Box Banks and Lock-Box Accounts
SCHEDULE II	Credit and Collection Policy
SCHEDULE III	Jurisdiction of Incorporation, Organizational Identification Number and Location of the Seller’s Principal Place of Business, Chief Executive Office and Office Where Records are Kept
SCHEDULE IV	Financing Statements
SCHEDULE V	Approved Non-U.S./Canadian Jurisdictions
SCHEDULE VI	Certain Obligors
SCHEDULE X	Commitment Schedule

RECEIVABLES PURCHASE AGREEMENT

RECEIVABLES PURCHASE AGREEMENT dated as of December 17, 2003 (this “Agreement”) among EQUISTAR RECEIVABLES II, LLC, a Delaware limited liability company (the “Seller”), EQUISTAR CHEMICALS, LP, a Delaware limited partnership, as the Servicer (as hereinafter defined), the banks and other financial institutions listed on the signature pages hereof as the Initial Purchasers (the “Initial Purchasers”), BANK ONE, NA, CREDIT SUISSE FIRST BOSTON and JPMORGAN CHASE BANK, as co-documentation agents (the “Co-Documentation Agents”), BANK OF AMERICA, N.A., a national banking association, and CITICORP USA, INC., a Delaware corporation (“CUSA”), as co-asset agents (the “Co-Asset Agents”), and CUSA, as Administrative Agent (the “Agent” and, together with the Co-Asset Agents and the Co-Documentation Agents, the “Facility Agents”) for the Purchasers.

PRELIMINARY STATEMENTS:

The Seller will from time to time purchase or otherwise acquire from the Originators Pool Receivables in which the Seller intends to sell interests referred to herein as Receivable Interests.

The Purchasers may at any time and from time to time purchase Receivable Interests from the Seller.

Equistar Chemicals, LP has been requested and is willing to act as the Servicer upon the terms and subject to the conditions set forth herein.

CUSA has been requested and is willing to act as the Agent upon the terms and subject to the conditions set forth herein.

Certain terms which are capitalized and used throughout this Agreement (in addition to those defined above) are defined in Article I of this Agreement.

NOW, THEREFORE, in consideration of the premises, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Certain Defined Terms.

As used in this Agreement, the following terms shall have the following meanings:

“ABF Administrative Agent” means CUSA, as administrative agent under the ABF Collateral Documents, and any successor in such capacity.

“ABF Agreement” means the Credit Agreement dated as of December 17, 2003 among Equistar and its Subsidiaries party thereto, the lenders and co-collateral agents party thereto and CUSA, as administrative agent.

“ABF Collateral Availability” means “Collateral Availability” as defined in the ABF Agreement. For the avoidance of doubt, if the ABF Agreement ceases to be in effect, ABF Collateral Availability shall be deemed to be zero.

“ABF Collateral Documents” means the “Collateral Documents” as defined in the ABF Agreement.

“ABF Excess Availability” means “Excess Availability” as defined in the ABF Agreement. For the avoidance of doubt, if the ABF Agreement ceases to be in effect, ABF Excess Availability shall be deemed to be zero.

“Adjusted LIBO Rate” means, with respect to any Yield Period for any Capital Investment, an interest rate per annum equal to the rate per annum obtained by dividing (a) the LIBO Rate by (b) a percentage equal to (i) 100% minus (ii) the reserve percentage applicable 2 Business Days before the first day of such Yield Period under regulations issued from time to time by the Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the LIBO Rate is determined) having a term equal to such Yield Period.

“Affiliate” means as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person. The term “control” (including, with correlative meanings, “controlled by” and “under common control with” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. As used with reference to Equistar and its Subsidiaries, “Affiliate” shall include any Partner and any Affiliate of any Partner.

“Agent’s Account” means the Deposit Account of the Agent (account number 3685-2248, ABA 021000089, Reference: CUSA – Medium Term Finance) maintained with Citibank at its office at 388 Greenwich Street, New York, New York 10013, Attention: David Jaffe, or such other account as the Agent shall specify in writing to the Seller, the Servicer and the Purchasers.

“Agent’s Fee” means those agency fees set forth in the Citicorp Fee Letter.

“Alternate Base Rate” means, for any period, a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall be equal at all times to the highest of the following:

(a) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate (or equivalent rate otherwise named);

(b) the sum (adjusted to the nearest 0.25% or, if there is no nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum, (ii) the rate per annum obtained by dividing (A) the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly on each Monday (or, if any such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from 3 New York certificate of deposit dealers of recognized standing selected by Citibank, by (B) a percentage equal to 100% minus the average of the daily percentages specified during such three-week period by the Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for Citibank in respect of liabilities

2

consisting of or including (among other liabilities) three-month U.S. dollar nonpersonal time deposits in the United States and (iii) the average during such three-week period of the maximum annual assessment rates estimated by Citibank for determining the then current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation (or any successor) for insuring Dollar deposits in the United States; and

(c) 0.5% per annum plus the Federal Funds Rate.

“Applicable Base Rate” for any period for any Capital Investment, an interest rate per annum equal to the sum of (a) the Alternate Base Rate in effect from time to time plus (b) the Applicable Margin.

“Applicable LIBO Rate” for any Yield Period for any Capital Investment, an interest rate per annum equal to the sum of (a) the Adjusted LIBO Rate for such Yield Period plus (b) the Applicable Margin.

“Applicable Margin” means (a) for the initial period commencing on the Closing Date and ending on the last day of the calendar month in which the Agent receives unaudited financial statements of Equistar and its Consolidated Subsidiaries as of, and for the fiscal quarter ending, June 30, 2004 in accordance with and satisfying the requirements of Section 5.5(b), in the case of Capital Investments having a Yield determined with reference to the Alternate Base Rate, 1.25% per annum and, in the case of Capital Investments having a Yield determined with reference to the Adjusted LIBO Rate, 2.25% per annum; and (b) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

AVERAGE MONTHLY EXCESS AVAILABILITY	ALTERNATE BASE RATE		ADJUSTED LIBO RATE
Greater than or equal to $600,000,000	1.00	%	2.00	%
Less than $600,000,000 and greater than or equal to $300,000,000	1.25	%	2.25	%
Less than $300,000,000	1.50	%	2.50	%

provided, however, that upon the occurrence and during the continuance of an Event of Termination, the “Applicable Margin” shall be the sum of the otherwise applicable rate set forth in the table above for Alternate Base Rate or Adjusted LIBO Rate, as the case may be, plus 2.00% per annum. Changes in the Applicable Margin resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective as to all Capital Investments on the first day of the next calendar month.

“Applicable Reserve” means, at any date, an amount equal to (NRPB x RP) plus such reserves as agreed upon by the Agent and the Seller, with adjustments effective upon at least five Business Days’ notice by the Agent, where:

NRPB = the Net Receivables Pool Balance at the close of business of the Servicer on such date.

3

RP = the Reserve Percentage at the close of business of the Servicer on such date.

“Applicable Unused Commitment Fee Rate” means (i) for the initial period commencing on the Closing Date and ending on the last day of the calendar month in which the Agent receives unaudited financial statements of Equistar and its Consolidated Subsidiaries as of, and for the fiscal quarter ending, June 30, 2004 in accordance with and satisfying the requirements of Section 5.5(b), 0.50% per annum, and (ii) thereafter, as of any date of determination, a per annum rate equal to the rate set forth below opposite the then applicable Average Monthly Excess Availability (determined as of the last day of the most recently concluded calendar month):

AVERAGE MONTHLY EXCESS AVAILABILITY	APPLICABLE UNUSED COMMITMENT FEE RATE
Greater than or equal to $600,000,000	0.625	%
Less than $600,000,000 and greater than or equal to $300,000,000	0.50	%
Less than $300,000,000	0.50	%

Changes in the Applicable Unused Commitment Fee Rate resulting from a change in the Average Monthly Excess Availability for any calendar month shall become effective on the first day of the next calendar month.

“Applicable Yield” means (a) for any Capital Investment (other than in respect of Swing Purchases), at the Seller’s election upon written notice to the Agent, given not later than 11:00 A.M. (New York time) on the third Business Day preceding (in the case of the Applicable LIBO Rate) or the Business Day of (in the case of the Applicable Base Rate) the applicable Investment Event, the Applicable LIBO Rate or the Applicable Base Rate, as the case may be and (b) for any Capital Investment in respect of a Swing Purchase, and for each other Obligation hereunder, the Applicable Base Rate.

“Approved Electronic Communications” means each notice, demand, communication, information, document and other material that the Seller or Servicer is obligated to, or otherwise chooses to, provide to the Agent pursuant to any Transaction Document or the transactions contemplated therein, including any financial statement, financial and other report, notice, request, certificate and other information material; provided, however, that “Approved Electronic Communication” shall, unless otherwise agreed by the Agent, exclude (x) any Notice of Purchase, Swing Purchase Request, Notice of Conversion or Continuation, and any other notice, demand, communication, information, document and other material relating to a request for a new, or a conversion of an existing, Purchase, (ii) any notice relating to the payment due under any Transaction Document prior to the scheduled date therefor, (iii) any notice of any Potential Event of Termination or Event of Termination and (iv) any notice, demand, communication, information, document and other material required to be delivered to satisfy any of the conditions set forth in Article III or any other condition to any Purchase or other Investment Event.

“Approved Electronic Platform” has the meaning specified in Section 8.7.

“Approved Fund” means any fund that, in the ordinary course of its business, invests in bank loans and financial assets of a type similar to the Receivable Interests and that is advised or managed by (a) a Purchaser, (b) an Affiliate of a Purchaser or (c) a Person or an Affiliate of a Person that administers or manages a Purchaser.

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“Assignee” means in the case of any assignment of any rights and obligations pursuant to Section 9.1, any assignee of such rights and obligations.

“Assignment and Acceptance” means an assignment and acceptance, in substantially the form of Exhibit A hereto, entered into by any Purchaser and an Assignee pursuant to Section 9.1.

“Available Capital” means, at any time (a) the Maximum Capital minus (b) the aggregate Capital outstanding at such time.

“Average Monthly Excess Availability” means, for any calendar month, the sum, without duplication, of (i) the average daily Total Excess Availability plus (ii) the average daily unrestricted cash of Equistar and its Subsidiaries (as determined by Equistar from treasury records on a non-GAAP basis), in each case for such calendar month.

“Bankruptcy Code” means title 11, United States Code.

“Board” means the Board of Governors of the Federal Reserve System of the United States.

“Business Day” means any day (other than a Saturday or Sunday) on which (i) banks are not authorized or required to close in New York, New York or Houston, Texas and (ii) if the term “Business Day” is used in connection with the Adjusted LIBO Rate, dealings in United States dollars are carried on in the London interbank market.

“Capital” means, at any time, the sum of all Capital Investments outstanding of all Purchasers and the Swing Purchaser at such time.

“Capital Investment” means, with respect to any Purchaser, or Swing Purchaser, as the case may be, and in respect of any Receivable Interest, the original amount paid to the Seller for such Receivable Interest at the time of its acquisition by such Purchaser or Swing Purchaser, as the case may be, pursuant to Section 2.1, 2.2 or 2.3, reduced from time to time by such Purchaser’s Ratable Portion of Collections received and distributed on account of such Capital pursuant to Section 2.6, 2.7 or 2.8 or, with respect to the Swing Purchaser, any amounts received pursuant to Section 2.3(e); provided, however, that if such Capital Investment in respect of such Receivable Interest shall have been reduced by any distribution of any portion of Collections and thereafter such distribution is rescinded or must otherwise be returned for any reason, such Capital Investment in respect of such Receivable Interest shall be increased by the amount of such distribution, all as though such distribution had not been made.

“Capitalized Lease Obligations” of any Person means obligations of such Person and its consolidated subsidiaries to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real and/or personal property, which obligations are accounted for as a capital lease on the consolidated balance sheet of such Person, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Assets Account” means, collectively, the Deposit Account of the Seller (account number 30557635, ABA 021000089, Reference: Equistar Receivables II, LLC/A/R Cash Assets I) and the Deposit Account of the Seller (account number 30558996, ABA 021000089, Reference: Equistar Receivables II, LLC/A/R Cash Assets II), in each case maintained with Citibank at its office at 388 Greenwich Street, New York, New York 10013, Attention: David Jaffe, or such other account as the Seller and the Agent may agree.

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“Cash Assets” means any cash on deposit in, and Liquid Investments held in, the Cash Assets Account.

“Cash Management Obligation” means any direct or indirect liability, contingent or otherwise, of the Seller in respect of cash management services (including treasury, depository, overdraft, electronic funds transfer and other cash management arrangements) provided after the date hereof (regardless of whether these or similar services were provided prior to the date hereof by the Agent, any Purchaser or any Affiliate or any of them) by the Agent or a Co-Asset Agent in connection with this Agreement or any other Transaction Document, including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith.

“Change of Control” shall occur if at any time:

(a) members of the Existing Control Group shall cease to own in the aggregate, through ownership by one or more of them, partnership interests representing more than 50% of the total equity interest and voting power of Equistar; or

(b) partnership interests representing in aggregate more than 25% of the total equity interests or voting power of Equistar are transferred to Persons other than the members of the Existing Control Group which transferees do not have (and are not subsidiaries of parents that have) senior unsecured credit ratings from S&P and Moody’s (or if the senior unsecured debt of such transferees or parents is not rated by such agencies, such transferees do not provide opinions from such rating agencies that such transferees or parents could reasonably be expected to obtain senior unsecured credit ratings from such agencies) of at least the lower of (x) BBB- and Baa3 or (y) the senior unsecured debt ratings of the transferor (or its parent);

(c) any Person other than a member of the Existing Control Group shall acquire the right directly or indirectly to exercise a substantial portion of the powers of Lyondell to act on behalf of the Partnership Governance Committee and of the representatives of Lyondell on the Partnership Governance Committee, in each case, as in effect on the Closing Date or the right directly or indirectly to exercise a substantial portion of the rights and powers of the Partnership Governance Committee with respect to matters that require unanimous consent under the Limited Partnership Agreement as in effect on the date hereof without the need for the consent of a member of the Existing Control Group; or

(d) Equistar shall cease to own, directly or indirectly, 100% of the Equity Interests in (x) the Seller or (y) any Originator (other than Equistar) unless such other Originator ceases to be an Originator in accordance with Section 7.03 of the Receivables Sale Agreement; or

(e) any mandatory repayment or mandatory offer to purchase under the Indentures occurs or is required to be made as a result of the occurrence of a “Change of Control” (or similar term).

“Citibank” means Citibank, N.A., a national banking association, and its successors.

“Citicorp Fee Letter” means the Administrative Agency and Collateral Monitoring Fee Letter dated November 12, 2003 among Equistar, CUSA and Citicorp Global Markets Inc.

“Closing Date” means December 17, 2003.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

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“Collections” means, with respect to any Pool Receivable, all cash collections and other cash proceeds of such Pool Receivable, including (i) all cash proceeds of the Related Security with respect to such Pool Receivable and (ii) any amounts in respect of such Pool Receivable deemed to have been received, and actually paid, pursuant to Section 2.9(b) or Section 2.9(c).

“Commitment” means (i) in respect of each Initial Purchaser, the commitment of such Purchaser to make Purchases and acquire other Capital Investments in the aggregate amount set forth as the “Commitment” under the name of such Initial Purchaser on the signature pages hereto and (ii) in respect of each other Purchaser that became a Purchaser by entering into an Assignment and Acceptance, the amount set forth as the “Commitment” for such Purchaser in the Register maintained by the Agent pursuant to Section 9.2, in each case, as such amount may be reduced from time to time as the result of any assignment of any Commitment or any portion thereof pursuant to Section 9.1 or as such amount may be reduced from time to time pursuant to Section 2.4(a).

“Commitment Termination Date” means the fourth anniversary of the Closing Date.

“Concentration Account” means the Deposit Account of the Seller (account number 3751447207, ABA 111000012, Reference: Equistar Receivables II, LLC/Receivables Concentration) maintained with Bank of America, N.A. at its office at 901 Main Street, Dallas, Texas 75202-3714 or such other account as the Seller and the Agent may agree.

“Confidential Information Memorandum” means the Confidential Information Memorandum dated November 2003 relating to Equistar and the transactions contemplated by the Transaction Documents.

“Consent and Agreement” means a consent and agreement dated the Closing Date, in substantially the form of Exhibit E hereto, with respect to the Receivables Sale Agreement, duly executed by the Seller and each Originator.

“consolidated” means, with respect to any Person, the consolidation of accounts of such Person and its Subsidiaries in accordance with GAAP.

“Consolidated Subsidiary” means at any date any Subsidiary the accounts of which would in accordance with GAAP be consolidated with those of Equistar in its consolidated annual statements if such statements were prepared as of such date.

“Constituent Documents” means, with respect to any Person, (a) the articles of incorporation, certificate of incorporation or certificate of formation (or the equivalent organizational documents) of such Person, (b) the by-laws, partnership agreement or operating agreement (or the equivalent governing documents) of such Person and (c) any document setting forth the manner of election and duties of the directors, general partners or managing members of such Person (if any) and the designation, amount or relative rights, limitations and preferences of any class or series of such Person’s Stock.

“Contract” means an agreement between any Originator and an Obligor in any written form acceptable to such Originator, or, in the case of any open account agreement, as evidenced by an invoice (x) setting forth the amount payable, the payment due date and other relevant terms of payment and a description, in reasonable detail, of the goods or services covered thereby or (y) otherwise approved by the Agent in its Discretion from time to time (which approval shall not be unreasonably withheld), in each case pursuant to or under which such Obligor shall be obligated to pay for goods or services from time to time.

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“Credit and Collection Policy” means those credit and collection policies and practices in effect on the date hereof relating to Contracts and Receivables and described in Schedule II hereto, as modified from time to time in compliance with Section 5.3(f) and Section 5.6(a).

“CUSA” has the meaning assigned to that term in the recital of parties hereto.

“Deposit Account” has the meaning set forth in Article 9 of the UCC.

“Discretion” refers to the Agent’s good faith exercise of its discretion in a manner consistent with its customary credit policies for receivables purchase or receivables-based credit facilities. Except where a different standard of conduct is expressly provided for in the proviso to clause (d) of the definition of “Eligible Receivable”, actions by the Agent in respect of the determination of Eligible Receivables or the Net Receivables Pool Balance or the Applicable Reserve or in connection with any approval by the Agent of Contracts or other matters relating to the Pool Receivables and Related Security shall be taken by the Agent in its Discretion.

“Eligible Receivable” means each Pool Receivable arising out of the sale of inventory or the performance of services in the ordinary course of business by an Originator to a Person that is not an Affiliate of any Originator or, to the extent such Person is an Affiliate of any Originator, to Millennium or LYONDELL-CITGO Refining LP or any of their respective subsidiaries (it being understood that none of Occidental and its subsidiaries and Oxy Vinyls, LP is deemed to be an Affiliate of any Originator for purposes of this definition of “Eligible Receivable” so long as Occidental does not, directly or through one or more of its subsidiaries, own any Equity Interests issued by Equistar); provided, however, that a Pool Receivable shall not be an “Eligible Receivable” if any of the following shall be true:

(a) any warranty contained in Section 4.1(i) of this Agreement with respect to such specific Receivable is not true and correct with respect to such Receivable; or

(b) the Obligor on such Receivable has disputed liability or made any claim with respect to such Receivable or any other Receivable due from such Obligor to the Seller or any Originator but only to the extent of such dispute or claim; or

(c) (x) the Obligor in respect of such Receivable is Millennium or LYONDELL-CITGO Refining LP or any of their respective subsidiaries, unless such Obligor has executed a no-offset letter satisfactory to the Agent, in its Discretion; provided, however, that if such Obligor has not executed a no-offset letter satisfactory to the Agent, in its Discretion, such Receivables shall be Eligible Receivables pursuant to this clause (c)(x) only to the extent the aggregate Outstanding Balance of such Receivables exceeds 125% of the aggregate amount of accounts payable and other indebtedness owing by the Originators to such Obligor or any of its Affiliates as at such date; or (y) the Obligor in respect of such Receivable, or any Person that the Agent or any Transaction Party knows or reasonably believes is an Affiliate of such Obligor, is also a supplier to or creditor of any Transaction Party, unless such Obligor has executed a no-offset letter satisfactory to the Agent, in its Discretion; provided, however, that if such Obligor has not executed a no-offset letter satisfactory to the Agent, in its Discretion, such Receivables shall be Eligible Receivables pursuant to this clause (c)(y) only to the extent the aggregate Outstanding Balance of such Receivables exceeds the aggregate amount of accounts payable and, to the extent known to any Responsible Officer of the Servicer, other indebtedness owing by the Originators to such Obligor or any such Affiliate as at such date; or

(d) the transaction represented by such Receivable is to an Obligor which, if a natural person, is not a resident of the United States or, if not a natural person, is organized under

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the laws of a jurisdiction outside the United States or has its chief executive office outside the United States (it being understood for purposes of this clause (d) that a territory of the United States that has enacted Revised Article 9 of the Uniform Commercial Code and Puerto Rico are considered to be part of the United States), unless (i) such Receivable is backed by a letter of credit acceptable to the Agent, in its reasonable discretion and (x) such letter of credit names the Agent (for the benefit of itself and each Purchaser) as the beneficiary or (y) the issuer of such letter of credit has consented to the assignment of the proceeds thereof to the Agent, (ii) such Obligor is, if a natural person, a resident of Canada or, if not a natural person, is organized under the laws of Canada or a province thereof and has its chief executive office in Canada and such Receivable is denominated in U.S. Dollars or (iii) such Receivable is backed by insurance reasonably acceptable to the Agent and the relevant insurance policy names the Agent (for the benefit of itself and each Purchaser) as additional insured and loss payee; provided, however, that the Receivables of any Obligor located in a jurisdiction outside the United States or Canada approved by the Agent in its sole discretion, which jurisdiction shall be listed in Schedule V hereto as and when approved by the Agent, and which Obligor is listed on Schedule VI-A hereto (as of the date hereof and as such Schedule may be updated from time to time by the Originators upon five Business Days’ prior written notice to the Agent), shall be Eligible Receivables pursuant to this clause (d) to the extent that (A) such Receivables are denominated in U.S. Dollars and arise from sales of inventory shipped from the United States and (B) the aggregate Outstanding Balance of all such Receivables does not exceed 15% of the Outstanding Balance of all Eligible Receivables; or

(e) the sale to such Obligor represented by such Receivable is not a final sale (e.g., such sale is on a bill-and-hold, guaranteed sale, sale-and-return or sale-on-approval basis or, until billed, a consignment basis); or

(f) such Receivable is subject to any Lien other than a Permitted Lien described in clause (i) or (ii) of the definition thereof; or

(g) such Receivable is subject to any deduction, offset, counterclaim, return privilege or other conditions (other than (i) sales discounts given in the ordinary course of the Originators’ business and reflected in the amount of such Receivable as set forth in the invoice or other supporting material therefor or (ii) an offset or counterclaim of a nature specifically addressed in another clause of this definition) but only to the extent of the amount of such deduction, offset, counterclaim, return privilege or other condition being asserted by the Obligor; or

(h) the Obligor on such Receivable is located in any State of the United States requiring the holder of such Receivable, as a precondition to commencing or maintaining any action in the courts of such State either to (i) receive a certificate of authorization to do business in such State or be in good standing in such State or (ii) file a Notice of Business Activities Report with the appropriate office or agency of such State, in each case unless the holder of such Receivable has received such a certificate of authority to do business, is in good standing or, as the case may be, has duly filed such a notice in such State; or

(i) the Obligor on such Receivable is a Governmental Authority, unless the applicable Originator and the Seller have each assigned its rights to payment of such Receivable to the Agent pursuant to the Assignment of Claims Act of 1940, as amended, in the case of a federal Governmental Authority, and pursuant to applicable law, if any, in the case of any other Governmental Authority, and such assignment has been accepted and acknowledged by the appropriate government officers; or

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(j) 50% or more of the Outstanding Balance of the Receivables of the Obligor are not Eligible Receivables by reason of clause (b) or (g) above or clause (o) below; provided that Receivables that are determined not to be Eligible Receivables, solely as a result of the provisions of clause (n) below, shall be excluded in calculating such percentage; or

(k) the payment obligation represented by such Receivable is denominated in a currency other than U.S. Dollars; or

(l) such Receivable is not evidenced by an invoice that would be a Contract or by other supporting material acceptable to the Agent, in its Discretion; provided, however, that this clause (l) shall not render ineligible Unbilled Receivables that would otherwise constitute Eligible Receivables under other clauses of this definition; or

(m) any Originator, the Seller or any other Person, in order to be entitled to collect such Receivable, is required to deliver any additional goods or merchandise to, perform any additional service for, or perform or incur any additional obligation to, the Person to whom or to which it was made; or

(n) the total Receivables of such Obligor to the Originators (taken as a whole) represent more than 15% (or such lesser percentage with respect to certain Obligors as the Agent may determine in its Discretion) of the Outstanding Balance of the Eligible Receivables of the Originators (taken as a whole) at such time, but only to the extent of such excess; or

(o) such Receivable (or any portion thereof) remains unpaid for more than (i) 60 days from the original payment due date, or (ii) if such Receivable arises from the sale of inventory, 90 days from the original invoice date thereof or, in the case of any such Receivable from an Obligor listed, and with the payment terms described, in Schedule VI-B hereto (as of the date hereof and as such Schedule may be updated from time to time by the Originators upon five Business Days’ prior written notice to the Agent), 120 days from the original invoice date thereof, provided that such Receivables from such Obligors listed in Schedule VI-B shall be Eligible Receivables under this clause (o) only to the extent that the Outstanding Balance of all such Receivables does not exceed 10% of the Outstanding Balance of all Eligible Receivables; or

(p) the Obligor on such Receivable (i) has (A) pending, by or against such Obligor, a petition for bankruptcy or any other relief under the Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization or relief of debtors, (B) an assignment for the benefit of creditors, (C) any other application for relief under the Bankruptcy Code or any such other law or (D) the appointment of a receiver or a trustee for all or a substantial part of its assets or affairs or (ii) has, while such Receivable remains outstanding, failed, suspended business operations, become insolvent or called a meeting of its creditors for the purpose of obtaining any financial concession or accommodation; or

(q) consistent with the Credit and Collection Policy, such Receivable is or should be written off the Seller’s or any Originator’s books as uncollectible; or

(r) such Receivable is not payable into a Lock-Box Account that is the subject of a Lock-Box Agreement; or

(s) such Receivable does not arise under a Contract which has been duly authorized and which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable enforceable against such Obligor in accordance with its terms; or

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(t) such Receivable, together with the Contract related thereto, contravenes in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) or with respect to which the applicable Originator is in violation of any such law, rule or regulation in any material respect; or

(u) such Receivable does not satisfy the requirements of the Credit and Collection Policy in all material respects; or

(v) such Receivable does not constitute an “account” within the meaning of Section 9-102(a)(2) of the UCC of the jurisdiction the law of which governs the perfection of the interest created by a Receivable Interest; or

(w) the sale to such Obligor on such Receivable is on a F.O.B. customer basis but only for so long as the inventory giving rise to such Receivable has not yet arrived at its destination and possession thereof has not been taken by the Obligor; or

(x) such Receivable (i) is subject to an unsecured claim in favor of a surety or (ii) arises under a Contract that is not governed by the laws of the United States or a State thereof; or

(y) such Receivable is an Unbilled Receivable; provided, however, that Unbilled Receivables in respect of inventory that have been shipped shall be Eligible Receivables under this clause (y) to the extent that the Outstanding Balance of all such Receivables does not exceed 25% (or, if such determination is being made at any time other than as of the last day of any calendar month, 35%) of the Outstanding Balance of all Eligible Receivables; provided, further, however, that any Unbilled Receivable as to which an invoice has not been issued to the relevant Obligor more than 31 days after the date of the sale of goods by the relevant Originator giving rise to such Receivable shall not be an Eligible Receivable; or

(z) there is a chargeback represented by the unpaid portion of such Receivable as to which less than full payment was made; or

(aa) such Receivable is billed in advance of the relevant shipment of inventory or performance of services; or

(bb) such Receivable arises under a Contract that (i) specifies a fixed price and fixed volume for 90 or more days and (ii) provides for material liquidated damages; or

(cc) (i) such Receivable does not comply with such other reasonable criteria and requirements (other than those relating to the collectibility of such Receivable) as the Agent, in its Discretion, may from time to time specify to the Seller upon 30 days’ notice, or (ii) the Agent, based upon such credit and collateral considerations as it may deem appropriate, in the exercise of its Discretion, and upon at least five Business Days’ notice, notifies the Seller of its determination that such Receivable might not be paid or is otherwise ineligible, in which event such Receivable shall not be an Eligible Receivable on the effective date of ineligibility specified in such notice.

For the avoidance of doubt, it is acknowledged and agreed that any calculation of ineligibility made pursuant to more than one clause above shall be made without duplication.

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“Equistar” means Equistar Chemicals, LP, a Delaware limited partnership.

“Equistar Receivables” means Equistar Receivables II, LLC, a Delaware limited liability company.

“Equistar Undertaking” means the Undertaking Agreement dated as of the Closing Date, insubstantially the form of Exhibit J hereto, by Equistar in favor of the Agent and the Purchasers.

“Equity Interest” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with Equistar, is treated as a single employer under Section 414 of the Code.

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Board.

“Events of Termination” has the meaning specified in Section 7.1.

“Existing Control Group” means Lyondell, Millennium and Occidental, the successor of any member of the Existing Control Group (including any entity that is a party to any merger or business combination transaction to which such member shall be a party; provided that immediately after such transaction Equity Interests having a majority of the voting power of such entity’s outstanding Equity Interests shall be held by holders of the Equity Interests of such member immediately prior to such transaction), and their respective subsidiaries.

“Existing Program” means the receivables securitization facility established pursuant to the Receivables Sale Agreement dated as of October 22, 2002 among Equistar, as Originator, Equistar Receivables, LLC as Buyer, and Equistar, as Buyer’s Servicer, and the Receivables Purchase Agreement dated as of October 22, 2002 among Equistar Receivables, LLC as Seller, Equistar, as Servicer, the Conduit, Financial Institutions and Managing Agent party thereto and Bank One, NA (Main Office Chicago), as Collateral Agent.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

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“Fiscal Year” means each twelve-month period ending on December 31.

“GAAP” means generally accepted accounting principles in the United States consistently applied, in effect from time to time.

“Governmental Authority” means any nation, sovereign or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any central bank.

“Guarantee” of or by any Person means any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (b) to purchase property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness or (c) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness; provided that the obligation of any JV Owner Subsidiary which is a general partner in a Joint Venture which arises by operation of law in respect of any Indebtedness of such Joint Venture shall not be deemed a Guarantee by such JV Owner Subsidiary of such Indebtedness.

“Indebtedness” of any Person means, without duplication, (a) the outstanding principal amounts of all obligations of such Person for borrowed money (including repurchase obligations), (b) the outstanding principal amounts of all obligations of such Person evidenced by bonds, debentures, notes or similar instruments or letters of credit in support of bonds, notes, debentures or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person to pay the deferred purchase price of property or services under any conditional sale or other title retention agreement, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (other than accounts payable to suppliers and accrued liabilities (i) that are incurred in the ordinary course of business and paid within 60 days after the date due or (ii) that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP), (f) all Capitalized Lease Obligations of such Person, (g) all non-contingent obligations (and, solely for purposes of Section 5.3(a) hereof and Section 4.01 of the Equistar Undertaking, all contingent obligations, which contingent obligations shall for such purposes be deemed to be in an outstanding principal amount equal to the maximum contingent amount thereof) of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument, (h) all Stock or Stock Equivalents of such Person which are subject to redemption otherwise than at the sole option of such Person at any time prior to the date 12 months after the Commitment Termination Date to the extent not held by any Transaction Party; provided that any Stock or Stock Equivalents of such Person which are included as Indebtedness solely as a result of provisions thereof which give the holders thereof the right to require such Person to repurchase or redeem such Stock or Stock Equivalents upon the occurrence of a “change of control” occurring prior to the date falling 12 months after the Commitment Termination Date shall not be considered Indebtedness of such Person if the “change of control” provisions applicable to such Stock or Stock Equivalents are no more favorable to the holders of such Stock or Stock Equivalents than those contained in this Agreement, (i) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property or assets owned or acquired by such

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Person, whether or not the obligations secured thereby have been assumed and (j) all Guarantees of such Person. For avoidance of doubt, Indebtedness does not include any obligation of a JV Owner Subsidiary which is a general partner in a Joint Venture which arises by operation of law in respect of any Indebtedness of such Joint Venture.

“Indemnified Amounts” has the meaning specified in Section 10.1.

“Indemnified Party” means each Facility Agent, each Purchaser and each of their respective Affiliates, and each of the directors, officers, employees, agents, representative, attorneys, consultants and advisors of or to any of the foregoing.

“Indentures” means the 1996 Indentures, the 1999 Indenture, the 2001 Indenture and the 2003 Indenture.

“Intercreditor Agreement” means the Intercreditor Agreement dated as of December 17, 2003 by and among CUSA, as Receivables Agent, CUSA, as Lender Agent, Equistar Receivables, as Transferor, Equistar, as Originator, as Initial Servicer and as Borrower, and the other Originators and Loan Parties from time to time party thereto, substantially in the form of Exhibit K.

“Investment” means, with respect to any Person, (a) all investments by such Person in another Person (including an Affiliate of such Person) in the form of direct or indirect loans, advances or extensions of credit to such other Person (including any Guarantee by such Person of Indebtedness or capital stock (which capital stock is subject to redemption otherwise than at the sole option of the issuer thereof at any time prior to the date 12 months after the Commitment Termination Date) of such other Person) or capital contributions or purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other Securities of such other Person, together with all items that are or would be classified as investments of such investing Person on a balance sheet prepared in accordance with GAAP, and (b) any purchase by such Person of all or a significant part of the assets of a business conducted by any other Person, or all or substantially all of the assets constituting the business of a division, branch or other unit operation of any other Person; provided that (i) trade credit and accounts receivable in the ordinary course of business, (ii) commissions, loans, advances, fees and compensation paid in the ordinary course of business to officers, directors and employees and (ii) reimbursement obligations in respect of letters of credit and tender, bid, performance, government contract, surety and appeal bonds, in each case solely with respect to obligations of Equistar or any Subsidiary (other than a Joint Venture Subsidiary and, in each case, subject to the provisions of Section 4.10 of the Equistar Undertaking) shall not be considered Investments.

“Investment Event” means any Purchase, any conversion of Capital Investments bearing Yield at the Applicable LIBO Rate to Capital Investments bearing Yield at the Applicable Base Rate, any conversion of Capital Investments bearing Yield at the Applicable Base Rate to Capital Investments bearing Yield at the Applicable LIBO Rate and any continuation of Capital Investments bearing Yield at the Applicable LIBO Rate for an additional Yield Period.

“Joint Venture” means any joint venture (a) in which Equistar has a direct or indirect economic interest of at least 20% and not more than 80% and (b) which is accounted for by Equistar on the equity method in accordance with GAAP.

“Joint Venture Subsidiary” means any Subsidiary which is a Joint Venture.

“JV Owner Subsidiary” means each Subsidiary (a) that, at any time, directly holds an equity interest in any Joint Venture and (b) that has no other material assets.

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“LIBO Rate” means, with respect to any Yield Period for any Capital Investment as to which Yield is based on the Applicable LIBO Rate, the rate appearing on Page 3750 of the MoneyLine Telerate Markets (or on any successor or substitute page of such service) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Yield Period, as the rate for Dollar deposits with a maturity comparable to such Yield Period. In the event that such rate is not available at such time for any reason, then the LIBO Rate shall be the rate at which Dollar deposits in an amount approximately equal to the Capital Investment of CUSA and for a period comparable to such Yield Period are offered by the principal office of Citibank in London to prime banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Yield Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement relating to such asset or (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, in each case whether or not filed, recorded or otherwise perfected under applicable law.

“Limited Partnership Agreement” means the Amended and Restated Limited Partnership Agreement of Equistar dated as of May 15, 1998, by and among the respective Partners.

“Liquid Investments” has the meaning set forth in Section 2.18(b).

“Liquidation Cost” has the meaning set forth in Section 2.12.

“Liquidation Day” means, for any Receivable Interest, each Business Day that occurs on or after the Termination Date.

“Lock-Box Account” means a Deposit Account (including, without limitation, any concentration account) maintained at a Lock-Box Bank for the purpose of receiving Collections and subject to a valid Lock-Box Agreement.

“Lock-Box Agreement” means an agreement, in substantially the form of Exhibit C hereto (with such modifications thereto as consented to by the Agent), between any Originator or the Seller, as the case may be, the Agent, and a Lock-Box Bank.

“Lock-Box Bank” means any of the banks specified on Schedule I hereof and any other bank specified as a “Lock-Box Bank” in accordance with this Agreement, in each case holding one or more Lock-Box Accounts.

“Lyondell” means Lyondell Chemical Company, a Delaware corporation.

“Material Adverse Effect” means (a) a material adverse effect on the business, assets, operations or financial condition of Equistar and its Subsidiaries, taken as a whole, (b) material impairment of the ability of the Transaction Parties to perform any of their obligations under the Transaction Documents, (c) material impairment of the collectibility of the Pool Receivables generally or of any material portion of the Pool Receivables or the ability of the Servicer (if the Servicer is Equistar or an Affiliate of Equistar) to collect Pool Receivables or (d) material impairment of the rights of or benefits available to the Agent or the Purchasers under the Transaction Documents; provided, however, that a downgrade in any debt rating of Equistar or any of its Subsidiaries shall not, by itself, constitute a Material Adverse Effect.

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“Material Subsidiary” means (a) any Subsidiary that accounts for more than 5% of the assets, or more than 5% of the revenues for the four fiscal quarters most recently ended, of Equistar and its Subsidiaries on a Consolidated basis, (b) any Subsidiary designated by Equistar as a Material Subsidiary for purposes of the Transaction Documents by notice to the Agent, (c) any Subsidiary that owns any Equity Interest in a Material Subsidiary described in clause (a) or (b), and (d) at any time when Subsidiaries (other than Material Subsidiaries described in clauses (a), (b) and (c)) in the aggregate account for more than 10% of the assets, or more than 10% of the revenues for the four fiscal quarters most recently ended, of Equistar and its Subsidiaries on a Consolidated basis, all Subsidiaries; provided that the term “Material Subsidiary” shall exclude the Seller and shall include any other Transaction Party other than Equistar.

“Maximum Capital” means, at any time, the lesser of (a) the Total Commitments and (b)(i) the Net Receivables Pool Balance minus (ii) the Applicable Reserve in effect at such time.

“Millennium” means Millennium Chemicals Inc., a Delaware corporation.

“Moody’s” means Moody’s Investors Service, Inc., and its successors.

“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which Equistar or any ERISA Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

“Net Receivables Pool Balance” means, at any time, the Outstanding Balance of the Eligible Receivables in the Receivables Pool as at such time reduced by (a) Unapplied Cash and Credits (to the extent not already deducted in determining the Outstanding Balance), (b) the Yield and Fee Reserve at such time and (c) to the extent not already deducted in determining Eligible Receivables, (i) amounts accrued or recorded by the Originators as a reserve in respect of volume rebates or other offsetting deductions, or in respect of credits in past due and (ii) such dilution reserves and other reductions as the Agent in its Discretion deems appropriate and as notified by the Agent to the Seller at least five Business Days prior to the effectiveness thereof.

“1996 Indentures” means (i) the Indenture dated as of January 29, 1996 between Equistar (succeeding Lyondell), as issuer, and JP Morgan Chase Bank (as successor by merger to Texas Commerce Bank National Association), as trustee, relating to 6 ¹/2 % Unsecured Notes due February 21, 2006 and (ii) the Indenture dated as of January 29, 1996 between Equistar (succeeding Lyondell), as issuer, and JP Morgan Chase Bank (as successor by merger to Texas Commerce Bank National Association), as trustee, relating to 7.55% Unsecured Debentures due February 21, 2026.

“1999 Indenture” means the Indenture dated as of January 15, 1999 between Equistar and Equistar Funding Corporation, as issuers, and The Bank of New York, as trustee.

“Notice of Conversion or Continuation” has the meaning specified in Section 2.16(a).

“Notice of Purchase” has the meaning specified in Section 2.2(a).

“Obligations” means, with respect to any Transaction Party, the obligations of such Transaction Party under the Transaction Documents (as the same may hereafter be amended, restated, extended, supplemented or otherwise modified from time to time) with respect to the due and punctual payment, whether at maturity, by acceleration or otherwise, of all monetary obligations of such

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Transaction Party, whether for fees, costs, indemnification or otherwise (other than Capital), including, with respect to the Seller, Yield, amounts payable as deemed Collections pursuant to Section 2.9(b) or 2.9(c), the Agent’s Fee, the Unused Commitment Fee, the Servicer Fee, Cash Management Obligations and amounts payable by the Seller pursuant to Section 2.12, 2.13, 2.14, 10.1 and 11.5.

“Obligor” means a Person obligated to make payments pursuant to a Contract.

“Occidental” means Occidental Petroleum Corporation, a Delaware corporation.

“Originator” means Equistar and any wholly owned Subsidiaries of Equistar from time to time party to the Receivables Sale Agreement as “Sellers” thereunder.

“Other Taxes” has the meaning specified in Section 2.14(b).

“Outstanding Balance” of any Receivable at any time means the then outstanding principal balance thereof.

“Partners” means the direct or indirect wholly owned subsidiaries through which Lyondell, Millennium and, if applicable, Occidental hold their interests in Equistar.

“Partnership Governance Committee” means Equistar’s Partnership Governance Committee, together with any successor or substitute committee exercising similar power and authority.

“Payment Date” means (a) in respect of Yield, the Unused Commitment Fee and the Servicer Fee, (i) the second Business Day of each calendar month, commencing on the first such day following the Closing Date and (ii) if not previously paid in full, the Termination Date, and (b) with respect to all other Obligations of the Seller hereunder, the date such Obligation is due or otherwise on demand by the Agent from and after the time such Obligation becomes due and payable (whether by acceleration or otherwise).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor thereto.

“Permitted Dividend” means any dividend or distribution by Equistar on any class of its Equity Interests; provided that a portion of such class is held by a member of the Existing Control Group.

“Permitted Lien” means (i) an inchoate tax or PBGC Lien, (ii) a Lien created by the Transaction Documents, (iii) a Lien in favor of a Lock-Box Bank in respect of a Lock-Box Amount or (iv) a Lien in favor of a securities intermediary in respect of any securities account, or any securities entitlement therein, under the “control” (within the meaning of Section 9-104 of the UCC) of the Agent.

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

“Plan” means any employee pension benefit plan (as defined in Section 3(2) of ERISA) (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code with respect to which Equistar or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Pool Receivable” means a Receivable in the Receivables Pool.

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“Potential Event of Termination” means any event that, with the giving of notice or the passage of time or both, would constitute an Event of Termination.

“Principal Financial Officer” of any Person means the chief financial officer, the treasurer or the principal accounting officer of such Person (including any Person designated by the Partnership Governance Committee as a Principal Financial Officer for purposes of this Agreement or any other Transaction Document). Any action taken or document delivered by a Principal Financial Officer pursuant to the Transaction Documents shall be taken or delivered in his capacity as such.

“Purchase” means a purchase by the Purchasers or the Swing Purchaser of a Receivable Interest from the Seller pursuant to Article II.

“Purchasers” means the Initial Purchasers and each Assignee that shall become a party hereto pursuant to Section 9.1.

“Ratable Portion” or “ratably” means, with respect to any Purchaser, the percentage obtained by dividing (a) the Commitment of such Purchaser by (b) the Total Commitments (or, at any time after the Termination Date, the percentage obtained by dividing the aggregate Capital Investments then owing to such Purchaser by the Capital then owing).

“Receivable” means the indebtedness (whether constituting accounts or general intangibles or chattel paper or otherwise) of any Obligor under a Contract, and includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto.

“Receivable Asset Availability” means, at any time, (i) the sum of (x) the Net Receivables Pool Balance minus the Applicable Reserve in effect at such time, plus (y) Cash Assets at such time, minus (ii) the aggregate Capital outstanding at such time.

“Receivables Excess Availability” means, at any time, the sum of (i) Available Capital plus (ii) Cash Assets at such time.

“Receivable Interest” means, at any time, an undivided percentage ownership interest at such time in (a) all then outstanding Pool Receivables arising prior to the time of the most recent computation or recomputation of such undivided percentage interest pursuant to Section 2.5, (b) all Related Security with respect to such Pool Receivables and (c) all Collections with respect to, and other proceeds of, such Pool Receivables. Such undivided percentage interest for such Receivable Interest shall be computed as:

C + AR

NRPB

where:

C = the outstanding Capital Investments made by the Purchasers or the Swing Purchasers, as the case may be, in connection with such Receivable Interest at such time;

AR = the Purchasers’ or Swing Purchaser’s (as the case may be) Ratable Portion of the aggregate Applicable Reserve at such time; and

NRPB = the Net Receivables Pool Balance at such time;

provided, however, that upon the occurrence of the Termination Date, the Receivable Interests then outstanding under this Agreement, if more than one Receivable Interest, shall be combined into one

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Receivable Interest hereunder (such one Receivable Interest, whether the one Receivable Interest then outstanding or the one Receivable Interest resulting from such combination of Receivable Interests, being the “Special Receivable Interest”) and such Special Receivable Interest shall be senior and prior to any undivided percentage ownership interest held by the Seller in (and, for the avoidance of doubt, while the Special Receivable Interest is greater than zero, the Seller shall not be entitled to assert or enforce any claim in respect of such retained undivided percentage ownership interest in) (i) all then outstanding Pool Receivables arising prior to the Termination Date, (ii) all Related Security with respect to such Pool Receivables and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables.

Each Receivable Interest shall be determined from time to time pursuant to the provisions of Section 2.5.

“Receivables Pool” means at any time the aggregation of all then outstanding Receivables.

“Receivables Sale Agreement” means the Receivables Sale Agreement, dated as of the Closing Date, in substantially the form of Exhibit D hereto, among each Originator, as seller and, if applicable, as buyer’s servicer, and Equistar Receivables, as buyer.

“Records” means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable and the related Obligor.

“Register” has the meaning specified in Section 9.2.

“Regulation U” means Regulation U of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Regulation X” means Regulation X of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Related Security” means with respect to any Receivable:

(i) all right, title and interest of the Seller in, under and to all security agreements and other Contracts that relate to such Receivable;

(ii) all of the Seller’s interest in the goods (including returned goods), if any, relating to the sale which gave rise to such Receivable;

(iii) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract relating to such Receivable or otherwise, together with all financing statements signed or authenticated by an Obligor describing any collateral securing such Receivable;

(iv) all letter of credit rights, guarantees, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable, whether pursuant to the Contract relating to such Receivable or otherwise;

(v) all Records relating to such Receivable (subject, in the case of Records consisting of computer programs, data processing software and other intellectual property under license from third parties, to restrictions imposed by such license on the sublicensing or transfer thereof);

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(vi) all of the Seller’s right, title and interest in and to the following: (x) the Receivables Sale Agreement, including, without limitation, (A) all rights to receive moneys due and to become due under or pursuant to the Receivables Sale Agreement, (B) all rights to receive proceeds of any indemnity, warranty or guaranty with respect to the Receivables Sale Agreement, (C) claims for damages arising out of or for breach of or default under the Receivables Sale Agreement, and (D) the right to perform under the Receivables Sale Agreement and to compel performance and otherwise exercise all remedies thereunder; and (y) all lock-boxes to which Collections are sent or deposited and all Restricted Accounts, and all funds and investments therein, and

(vii) all proceeds of any and all of the foregoing (including, without limitation, proceeds which constitute property of the types described in clause (vi) above).

“Reportable Event” means any reportable event as defined in Section 4043(c) of ERISA or the regulations issued thereunder with respect to a Plan (other than a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).

“Required Net Receivables Pool Balance” means, at any time, the sum of (i) the Capital at such time plus (ii) the aggregate Applicable Reserve at such time.

“Required Purchasers” means, at any time, Purchasers holding more than 50% of the aggregate Total Commitments or, after the Termination Date, more than fifty percent (50%) of the aggregate Capital at such time.

“Requirement of Law” means, with respect to any Person, the common law and all federal, state, local and foreign laws, rules and regulations, orders, judgments, decrees and other determinations of any Governmental Authority or arbitrator, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Reserve Percentage” means, as of the Closing Date, 15%, provided that the Reserve Percentage may, upon five Business Days’ notice by the Agent to the Seller and the Servicer, be increased or, subject to Section 11.1, decreased by the Agent at any time in its Discretion.

“Responsible Officer” means the chief executive officer, the president, any Principal Financial Officer or any vice president of any Transaction Party but, in any event, with respect to financial matters and each Seller Report, any Principal Financial Officer of the applicable Transaction Party. Any action taken or document delivered by a Responsible Officer pursuant to the Transaction Documents shall be taken or delivered in his capacity as such.

“Restricted Accounts” means the Seller’s Account, the Lock-Box Accounts, the Concentration Account, the Sweep Account and the Cash Assets Account.

“S&P” means Standard & Poor’s Ratings Service.

“SEC” means the Securities and Exchange Commission.

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“Security” means any Stock, Stock Equivalent, voting trust certificate, bond, debenture, note or other evidence of Indebtedness, whether secured, unsecured, convertible or subordinated, or any certificate of interest, share or participation in, any temporary or interim certificate for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing, but shall not include any evidence of the obligations of the Transaction Parties hereunder.

“Seller Party” means the Seller or the Servicer.

“Seller Report” means a report, in substantially the form of Exhibit B hereto, furnished by the Servicer to the Agent for the benefit of each Purchaser pursuant to Section 5.5(f).

“Seller’s Account” means the Deposit Account of the Seller (account number 3751968281 ABA111000012, Reference: Equistar Receivables II, LLC/Multipurpose Account) maintained with Bank of America, N.A. at its office at 901 Main Street, Dallas Texas 75202-3714, Attention: Sharon V. Hamm.

“Servicer” has the meaning specified in Section 6.1.

“Servicer Fee” has the meaning specified in Section 2.11.

“Shortfall Condition” exists on any day if the aggregate Receivable Interests on such day would exceed 100% (after giving effect to any calculated reduction of Capital by an amount equal to the amount on deposit in the Cash Assets Account as of the close of business on such day pursuant to Section 2.6(a)(iii) or 2.7(a)(iii), as applicable).

“Solvent” means, with respect to any Person as of any date of determination, that, as of such date, (a) the fair value of the assets of such Person, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of such Person will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) such Person is able to pay all liabilities of such Person as such liabilities mature and (d) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Special Receivable Interest” has the meaning specified in the definition of “Receivable Interest” contained in this Section 1.1.

“Stock” means shares of capital stock (whether denominated as common stock or preferred stock), beneficial, partnership or membership interests, participations or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity, whether voting or non-voting.

“Stock Equivalents” means all securities convertible into or exchangeable for Stock and all warrants, options or other rights to purchase or subscribe for any Stock, whether or not presently convertible, exchangeable or exercisable.

“Subordinated Note” has the meaning specified in the Receivables Sale Agreement.

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“Subsidiary” means any subsidiary of Equistar or any other Transaction Party.

“subsidiary” means, with respect to any Person (the “parent”), any corporation, association or other business entity of which Securities or other ownership interests representing 50% or more of the ordinary voting power are, at the time as of which any determination is being made, beneficially owned by the parent, by one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“Super Majority Purchasers” means at any time Purchasers holding more than 66 ²/3% of the aggregate Total Commitments or, after the Termination Date, more than 66 ²/3% of the aggregate Capital outstanding at such time.

“Sweep Account” means the Deposit Account of the Seller (account number 30557643, ABA 021000089, Reference: Equistar Receivables II, LLC/A/R Sweep) maintained with Citibank at its office at 388 Greenwich Street, New York, New York 10013, Attention: David Jaffe, or such other account as the Seller and the Agent may agree.

“Swing Purchase” has the meaning specified in Section 2.3.

“Swing Purchase Request” has the meaning specified in Section 2.3(b).

“Swing Purchase Sublimit” means, at any time, $50,000,000.

“Swing Purchaser” means CUSA or any other Purchaser that becomes the Agent or agrees, with the approval of the Agent and the Seller, to act as the Swing Purchaser hereunder, in each case in its capacity as the Swing Purchaser hereunder.

“Syndication Completion Date” has the meaning specified in the Arrangement Fee Letter dated November 12, 2003 among Equistar, CUSA and Bank of America, N.A.

“Taxes” has the meaning specified in Section 2.14(a).

“Termination Date” means the earlier of (i) the Commitment Termination Date, and (ii) the date of termination in whole of the aggregate Commitments pursuant to Section 2.4 or 7.1.

“Total Asset Availability” means, at any time, the sum of (i) Receivable Asset Availability plus (ii) ABF Collateral Availability, in each case at such time.

“Total Commitments” means the aggregate of all Commitments of all Purchasers, as such amount may be reduced from time to time pursuant to Section 2.4. On the Closing Date, the Total Commitments aggregate $450,000,000.

“Total Excess Availability” means, at any time, the sum of (i) Receivables Excess Availability plus (ii) ABF Excess Availability at such time. Total Excess Availability shall be determined, on a pro forma basis, based on the borrowing base certificate delivered pursuant to Section 4.02(m) of the ABF Agreement and the first monthly Seller Report delivered pursuant to Section 3.2(a)(i), to the extent required to be determined in respect of days prior to the Closing Date.

“Transaction Documents” means this Agreement, the Receivables Sale Agreement, each Subordinated Note, the Equistar Undertaking, the Lock-Box Agreements, the Consent and Agreement, the Intercreditor Agreement, and each additional security or control documentation delivered or required to

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be delivered pursuant to any of the foregoing to evidence the interests of the Seller and of Agent and the Purchasers, as applicable, in and to the Restricted Accounts, Receivables, Related Security, Collections and proceeds thereof.

“Transaction Parties” means the Seller, each Originator and the Servicer (if Equistar or an Affiliate of Equistar is the Servicer).

“Triggering Event” means any of the following events: (i) the Termination Date, (ii) the occurrence of an Event of Termination, (iii) Total Asset Availability being less than $150,000,000 for any period of five consecutive Business Days, (iv) Total Excess Availability being less than $100,000,000 for any period of five consecutive Business Days or (v) Total Asset Availability being less than $125,000,000 on any day; provided that if, following a Triggering Event described in clause (iii), (iv) or (v), Total Asset Availability subsequently equals or exceeds $175,000,000 for a period of 20 consecutive Business Days, such Triggering Event shall cease to exist upon the first day following such 20-Business Day period (unless the Servicer otherwise elects by notice to the Agent); and provided, further, that if, following a Triggering Event described in clause (ii), the related Event of Termination shall cease to exist, such Triggering Event shall cease to exist. For the avoidance of doubt, the cessation of an existing Triggering Event does not preclude the occurrence of a subsequent Triggering Event.

“2001 Indenture” means the Indenture dated as of August 24, 2001 between Equistar and Equistar Funding Corporation, as issuers, and The Bank of New York, as trustee.

“2003 Indenture” means the Indenture dated as of April 22, 2003 between Equistar and Equistar Funding Corporation, as issuers, and The Bank of New York, as trustee.

“UCC” means, at any time, the Uniform Commercial Code as from time to time in effect in the State of New York at such time; provided, however, that in the event that, by reason of mandatory provisions of law, the perfection, effect of perfection or non-perfection or priority of the interests of the Agent or the Purchasers in the Pool Receivables, Related Security and Collections created by the Transaction Documents is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“Unapplied Cash and Credits” means, at any time, the aggregate amount of Collections or other cash or credits then held by or for the account of the Servicer, any Originator or the Seller in respect of the payment of Pool Receivables, but not yet applied or reinvested pursuant to Section 2.6 or Section 2.7 or applied pursuant to Section 2.8.

“Unbilled Receivable” means a Receivable for which, at the time of determination, an invoice or other evidence of an Obligor’s payment obligation for the purchase of goods from the Originator has not been rendered.

“United States” and “U.S.” each means United States of America.

“Unused Commitment Fee” has the meaning specified in Section 2.11.

“U.S. Dollars” and “$” each means the lawful currency of the United States.

“Voting Interests” means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

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“Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Yield” means (a) for each Capital Investment made at the Applicable LIBO Rate, for any Yield Period:

AR x C x ED    +	LC
360

where:

AR	=	the Applicable LIBO Rate for such Capital Investment for such Yield Period;
C	=	the amount of such Capital Investment;
ED	=	the actual number of days elapsed during such Yield Period; and
LC	=	all Liquidation Costs, if any, for such Receivable Interest for such Yield Period; and

(b) for each Capital Investment made at the Applicable Base Rate for any period of time:

AR x C x ED

360

where:

AR	=	the Applicable Base Rate from time to time;
C	=	the amount of such Capital Investment; and
ED	=	the actual number of days elapsed;

provided, that no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by applicable law; provided, further, that Yield for any Capital Investment shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason.

“Yield and Fee Reserve” means, as of any date of determination an amount in U.S. Dollars equal to the sum of (A) the Servicer Fee accrued and unpaid through such date, (B) the aggregate Yield, Unused Commitment Fee and Agent’s Fee accrued and unpaid through such date and (C) the aggregate of any other Obligations then accrued and owing hereunder by the Seller to the Purchasers or the Agent.

“Yield Period” means, in the case of any Capital Investment made at the Adjusted LIBO Rate, (a) initially, the period commencing on the date such Capital Investment is made or on the date of conversion of a Capital Investment made at the Alternate Base Rate to a Capital Investment made at the

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Adjusted LIBO Rate and ending on the seventh day thereafter (if at the time of the relevant Notice of Purchase, all Purchasers participating therein agree to make a seven-day Yield Period available) or one, two, three or six months thereafter, as selected by the Seller in its Notice of Purchase and (b) thereafter, if such Capital Investment is continued, in whole or in part, as a Capital Investment made at the Adjusted LIBO Rate, a period commencing on the last day of the immediately preceding Yield Period therefor and ending on the seventh day thereafter (if at the time of the relevant Notice of Conversion or Continuation, all Purchasers participating therein agree to make a seven-day Yield Period available) or one, two, three or six months thereafter, as selected by the Seller in its Notice of Conversion or Continuation given to the Agent; provided, however, that all of the foregoing provisions relating to Yield Periods in respect of Capital Investment made at the Adjusted LIBO Rates are subject to the following:

(a) prior to the Syndication Completion Date, each Yield Period shall be for a period of seven days and all Yield Periods shall commence and end on the same day;

(b) if any Yield Period would otherwise end on a day that is not a Business Day, such Yield Period shall be extended to the next succeeding Business Day, unless the result of such extension would be to extend such Yield Period into another calendar month, in which event such Yield Period shall end on the immediately preceding Business Day;

(c) any Yield Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Yield Period) shall end on the last Business Day of a calendar month;

(d) the Seller may not select any Yield Period that ends after the Commitment Termination Date; and

(e) there shall be outstanding at any one time no more than 10 Yield Periods in the aggregate.

Section 1.2 Other Terms.

(a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if any Transaction Party notifies the Agent that it requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Agent notifies the Transaction Parties that the Required Purchasers request an amendment to any provision hereof for such purpose), then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

(b) Except where the context requires otherwise, the definitions in Section 1.1 shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Unless otherwise stated, references to Sections, Articles, Schedules and Exhibits made herein are to Sections, Articles, Schedules or Exhibits, as the case may be, of this Agreement. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words in a visible form. References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of such Person.

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(c) All terms used in Article 9 of the UCC in the State of New York and not specifically defined herein are used herein as defined in such Article 9.

Section 1.3 Computation of Time Periods.

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” each means “to but excluding” and the word “through” means “through and including”.

ARTICLE II

AMOUNTS AND TERMS OF THE PURCHASES

Section 2.1 Commitment.

On the terms and conditions herein set forth, each Purchaser severally agrees to make Purchases (i) on the Closing Date and from time to time thereafter on any Business Day during the period from the Closing Date to the Termination Date and (ii) in an aggregate amount for such Purchaser not to exceed at any time outstanding such Purchaser’s Commitment; provided, however, that no Purchaser shall be obligated to make any Purchase to the extent that, after giving effect to such Purchase, the Capital then outstanding would exceed the Maximum Capital. Purchases shall be made by the Purchasers simultaneously and ratably in accordance with their respective Commitments.

Section 2.2 Making Purchases.

(a) Each Purchase of a Receivable Interest by the Purchasers shall be made on notice from the Seller to the Agent, given not later than 11:00 a.m. (New York time) (i) on the third Business Day before the date of such Purchase in the case of the Purchase of any Receivable Interest initially bearing Yield at the Applicable LIBO Rate and (ii) on the Business Day of such Purchase in the case of the Purchase of any Receivable Interest initially bearing Yield at the Applicable Base Rate. Each such notice of a proposed Purchase of a Receivable Interest (a “Notice of Purchase”) shall be by telephone (confirmed promptly thereafter in writing) or facsimile, in substantially the form of Exhibit F hereto, and shall specify the requested aggregate amount of such Purchase to be paid to the Seller and the requested Business Day of such Purchase. Each Purchase of any Receivable Interest under this Section 2.2 shall be in an aggregate amount which is an integral multiple of $1,000,000 and which is not less than the lesser of $10,000,000 and the remaining available balance of the Commitments.

(b) The Agent shall give each Purchaser prompt notice of such notice of such proposed Purchase, the date of such Purchase, and the amount of such Purchaser’s Capital Investment in connection with such Purchase, by telephone or telefax. On the date of such Purchase, each Purchaser shall, upon satisfaction of the applicable conditions set forth in Section 3.2, make available to the Agent its Ratable Portion of the aggregate amount of such Purchase by deposit of such Ratable Portion in same day funds to the Agent’s Account, and, after receipt by the Agent of such funds, the Agent shall cause such funds to be made immediately available to the Seller at the Seller’s Account.

(c) Each Notice of Purchase delivered pursuant to Section 2.2(a) shall be irrevocable and binding on the Seller.

(d) Unless the Agent shall have received notice from a Purchaser prior to the date of any Purchase that such Purchaser will not make available to the Agent such Purchaser’s Ratable Portion of such Purchase, the Agent may assume that such Purchaser has made such Ratable Portion available to

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the Agent on the date of such Purchase in accordance with Section 2.2(b), and the Agent may, in reliance upon such assumption, make available to the Seller on such date a corresponding amount. However, if the Agent has received such notice from such Purchaser, the Agent may not make such assumption and may not make available to the Seller on such date such corresponding amount. If and to the extent that such Purchaser (other than a Purchaser that has delivered to the Agent a notice of the type described in the two immediately preceding sentences) shall not have made such Ratable Portion available to the Agent and the Agent has made such Ratable Portion available to the Seller, such Purchaser and the Seller severally agree to pay (to the extent not repaid by the Seller or such Purchaser, respectively) to the Agent promptly on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Seller until the date such amount is repaid to the Agent, at (i) in the case of the Seller, the Yield applicable to such amount and (ii) in the case of such Purchaser, the Federal Funds Rate. If such Purchaser shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Purchaser’s Ratable Portion of such Purchase for purposes of this Agreement.

(e) The failure of any Purchaser to make available such Purchaser’s Ratable Portion of any Purchase shall not relieve any other Purchaser of its obligation, if any, hereunder to make available such other Purchaser’s Ratable Portion of such Purchase on the date of such Purchase, but no Purchaser shall be responsible for the failure of any other Purchaser to make available such other Purchaser’s Ratable Portion of such Purchase on the date of any Purchase. Nothing herein shall prejudice any rights that the Seller may have against any Purchaser as a result of any default by such Purchaser hereunder.

Section 2.3 Swing Purchases

(a) On the terms and subject to the conditions contained in this Agreement, the Swing Purchaser agrees to make, in U.S. Dollars, Purchases (each a “Swing Purchase”) otherwise committed to the Seller hereunder from time to time on any Business Day during the period from the Closing Date until the Termination Date representing an aggregate Capital Investment at any time outstanding (together with the aggregate outstanding Capital Investment relating to any other Purchase made by the Swing Purchaser hereunder in its capacity as the Swing Purchaser) not to exceed the Swing Purchase Sublimit; provided, however, that at no time shall the Swing Purchaser make any Swing Purchase to the extent that, after giving effect to such Swing Purchase, the Capital then outstanding would exceed the Maximum Capital.

(b) In order to request a Swing Purchase, the Seller may telephone the Agent (to be promptly confirmed thereafter in writing) or send the Agent by telecopy (or by electronic mail or similar means) a duly completed request in substantially the form of Exhibit G, setting forth the requested amount and date of such Swing Purchase (a “Swing Purchase Request”), to be received by the Agent not later than 12:00 p.m. (New York time) on the day of the proposed purchase. The Agent shall promptly notify the Swing Purchaser of the details of the requested Swing Purchase. Subject to the terms of this Agreement, the Swing Purchaser may make the Capital Investment in connection with such Swing Purchase available to the Agent and, in turn, the Agent shall make such amounts available to the Seller on the date of the relevant Swing Purchase Request. The Swing Purchaser shall not make any Swing Purchase in the period commencing on the first Business Day after it receives written notice from the Agent or any Purchaser that one or more of the conditions precedent contained in Section 3.2 shall not on such date be satisfied, and ending when such conditions are satisfied. The Swing Purchaser shall not otherwise be required to determine that, or take notice whether, the conditions precedent set forth in Section 3.2 have been satisfied in connection with the making of any Swing Purchase. The Capital Investment relating to each Swing Purchase shall be in an aggregate amount of not less than $100,000.

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(c) The Swing Purchaser shall notify the Agent in writing (which writing may be a telecopy or electronic mail) weekly, by no later than 10:00 a.m. (New York time) on the first Business Day of each week, of the aggregate amount of its Capital Investments at such time in respect of Swing Purchases.

(d) The Swing Purchaser may demand at any time that each Purchaser pay to the Agent, for the account of the Swing Purchaser, in the manner provided in clause (e) below, such Purchaser’s Ratable Portion of all or a portion of the Swing Purchaser’s Capital Investments at such time in respect of Swing Purchases, which demand shall be made through the Agent, shall be in writing and shall specify the amount of the Capital Investments demanded to be so reduced; provided that if the aggregate amount of the Swing Purchaser’s Capital Investments in respect of Swing Purchases on the last Business Day of any week exceeds $5,000,000, then the Swing Purchaser shall make such demand to the Agent on such last Business Day of such week and require each Purchaser to pay to the Agent, for the account of the Swing Purchaser, on such last Business Day of such week such Purchaser’s Ratable Portion of the Swing Purchaser’s Capital Investments in respect of Swing Purchases then outstanding.

(e) The Agent shall forward each notice referred to in clause (c) above and each demand referred to in clause (d) above to each Purchaser on the day such notice or such demand is received by the Agent (except that any such notice or demand received by the Agent after 2:00 p.m. (New York time) on any Business Day or any such demand received on a day that is not a Business Day shall not be required to be forwarded to the Purchasers by the Agent until the next succeeding Business Day), together with a statement prepared by the Agent specifying the amount of each Purchaser’s Ratable Portion of the aggregate amount of the Capital Investments in respect of Swing Purchases stated to be outstanding in such notice or demanded to be paid pursuant to such demand, and, notwithstanding whether or not the conditions precedent set forth in Section 3.2 and Section 2.1 shall have been satisfied (which conditions precedent the Purchasers hereby irrevocably waive), each Purchaser shall, before 12:00 noon (New York time) on the Business Day next succeeding the date of such Purchaser’s receipt of such notice or demand, make available to the Agent, in immediately available funds, for the account of the Swing Purchaser, the amount specified in such statement; provided, however, that notwithstanding anything to the contrary in the foregoing, no Purchaser shall be obligated to purchase a Ratable Portion of, or otherwise pay any sum in respect of, the Capital Investments in respect of a Swing Purchase to the extent that the purchase by such Purchaser of a Ratable Portion of, or payment of other sum in respect of, the Capital Investments in respect of such Swing Purchase would cause such Purchaser’s aggregate Capital Investment to exceed its Commitment. Upon such purchase by a Purchaser, such Purchaser shall, except as provided in clause (f), be deemed to have made a Purchase with a Capital Investment equal to the amount actually paid by such Purchaser. The Agent shall use such funds to reduce the Swing Purchaser’s Capital Investments in respect of Swing Purchases.

(f) Upon the occurrence of an Event of Termination under Section 7.1(f), each Purchaser shall acquire, without recourse or warranty, an undivided participation in the Swing Purchaser’s Capital Investments in respect of each Swing Purchase otherwise required to be repaid by such Purchaser pursuant to clause (e) above, which participation shall be in an amount equal to such Purchaser’s Ratable Portion of the Swing Purchaser’s Capital Investments in respect of such Swing Purchase, by paying to the Swing Purchaser on the date on which such Purchaser would otherwise have been required to make a payment in respect of such Swing Purchaser’s Capital Investments pursuant to clause (e) above, in immediately available funds, an amount equal to such Purchaser’s Ratable Portion of such Swing Purchaser’s Capital Investments. If all or part of such amount is not in fact made available by such Purchaser to the Swing Purchaser on such date, the Swing Purchaser shall be entitled to recover any such unpaid amount on demand from such Purchaser together with interest accrued from such date at the Federal Funds Rate for the first Business Day after such payment was due and thereafter at the Applicable Base Rate.

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(g) From and after the date on which any Purchaser (i) is deemed to have made a Purchase pursuant to clause (e) above with respect to any Swing Purchase or (ii) purchases an undivided participation interest in the Swing Purchaser’s Capital Investments in respect of a Swing Purchase pursuant to clause (f) above, the Swing Purchaser shall promptly distribute to such Purchaser such Purchaser’s Ratable Portion of all payments in respect of Capital Investments and Yield received by the Swing Purchaser on account of such Swing Purchase other than those received from a Purchaser pursuant to clause (e) or (f) above.

Section 2.4 Termination or Reduction of the Commitments; Voluntary Reductions of Capital.

(a) The Seller may, upon at least 3 Business Days’ notice to the Agent, and so long as, after giving effect to a proposed reduction, no Event of Termination or Potential Event of Termination, would exist, terminate in whole or reduce in part, the unused portions of the Commitments of the Purchasers; provided, however, that for purposes of this Section 2.4, the unused portions of the Commitments of the Purchasers shall be computed as (a) the Total Commitments immediately prior to giving effect to such termination or reduction less (b) the outstanding Capital at the time of such computation; provided, further, that each such partial reduction of the unused portions of the Commitments (x) shall be in an amount equal to at least $5,000,000 and shall be an integral multiple of $1,000,000 in excess thereof, (y) shall be made ratably among the Purchasers’ Commitments according to each Purchaser’s Ratable Portion and (z) shall reduce the Total Commitments in an amount equal to each such reduction.

(b) The Seller may, upon at least 3 Business Days’ notice to the Agent, reduce the outstanding Capital in whole or in part; provided that each such partial reduction of Capital shall be in a minimum amount of $10,000,000 and an integral multiple of $1,000,000.

Section 2.5 Receivable Interest.

(a) On the date of Purchase of any Receivable Interest, such Receivable Interest shall be initially computed, after giving effect to such Purchase, as of the close of business of the Servicer on such date. Thereafter until the Termination Date, such Receivable Interest shall be automatically recomputed as of the close of business of the Servicer on each day (other than a Liquidation Day).

(b) Such Receivable Interest shall remain constant from the time as of which any such computation or recomputation is made until the time as of which the next such recomputation, if any, shall be made. Each Receivable Interest, as computed as of the day immediately preceding the Termination Date, shall remain constant at all times on and after the Termination Date; and any Special Receivable Interest, as computed as of the Termination Date, shall remain constant at all times on and after the Termination Date.

(c) Such Receivable Interest shall become zero at such time as the Purchasers of such Receivable Interest shall have received the accrued Yield for such Receivable Interest, shall have recovered the Capital Investment of such Receivable Interest, and shall have received payment of all other amounts payable by the Seller to such Purchasers, and the Servicer shall have received the accrued Servicer Fee for such Receivable Interest.

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Section 2.6 Ordinary Settlement Procedures.

(a) On each Business Day (other than a Liquidation Day or a day on which a Triggering Event exists) the Servicer shall, out of Collections of Pool Receivables received on such Business Day:

(i) first, pay to the Servicer (if the Servicer is not Equistar or an Affiliate of Equistar) or the Agent and the Purchasers, as applicable, an amount in U.S. Dollars equal to the Servicer Fee, the Yield, the Unused Commitment Fee, the Agent’s Fee and any other Obligations of the Seller due and payable on such day;

(ii) second, distribute to the Agent for the account of the Swing Purchaser an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Swing Purchaser’s Capital Investments in respect of Swing Purchases to zero;

(iii) third, if such day is the second Business Day following the date on which a Seller Report is or is required to be delivered, a Shortfall Condition exists as of the last day of the period covered by such Seller Report, and the Agent does not receive an updated Seller Report demonstrating that a Shortfall Condition does not exist on such second Business Day, distribute to the Agent for the account of the Purchasers an amount in U.S. Dollars equal to that amount, if any, which would be required to reduce Capital so that the aggregate Receivable Interests would not, after giving effect to such application and the Collections of Pool Receivables and the addition of new Pool Receivables on such day and the resulting automatic recomputation of such Receivable Interests pursuant to Section 2.5 as of the end of such day, exceed 100%; provided that (x) the Agent shall apply such amount, first, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted Base Rate and (y) second, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate; provided that in lieu of immediately reducing the Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate, the Agent, at the direction of the Seller, may transfer such amount to the Cash Assets Account and such amount shall be deemed to reduce Capital by the amount so held pending application thereof to reduce Capital Investments as to which Yield is calculated on the basis of the Adjusted LIBO Rate on the last day of each Yield Period applicable thereto (occurring in chronological order); provided, further, however, that if the Agent subsequently receives a request from the Servicer for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition, after giving effect to such requested withdrawal, does not exist, then the Agent shall release such amounts to the Servicer for further application under this Section 2.6(a);

(iv) fourth, distribute to the Agent for the account of the Purchasers of each Receivable Interest an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Capital Investment of such Receivable Interest pursuant to the notice of the Seller delivered under Section 2.4(b);

(v) fifth, distribute to the Agent for deposit into the Cash Assets Account such amount as the Seller, at its option, has specified to the Agent, which amount shall be deemed to reduce Capital by a corresponding amount; provided, however, that if the Agent subsequently receives a request from the Servicer for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition, after giving effect to such requested withdrawal, does not exist, then the Agent shall release such amounts to the Servicer for further application under this Section 2.6(a).

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(vi) sixth, distribute to the Servicer (if the Servicer is Equistar or an Affiliate of Equistar) the accrued Servicer Fee to the extent then due and payable; and

(vii) seventh, reinvest the remainder of such Collections, for the benefit of the Purchasers, which reinvestment shall result in (x) an automatic recomputation of the undivided percentage interest represented by such Receivable Interest pursuant to Section 2.5 as of the end of such day and (y) the payment of such remainder to the Seller; provided, however, that to the extent the Agent or any Purchaser shall be required for any reason to pay over any amount representing Collections which have been previously reinvested for the benefit of such Purchaser pursuant hereto, such amount shall be deemed not to have been so reinvested but rather to have been retained by the Seller and paid over for the account of such Purchaser and, notwithstanding any provision herein to the contrary, such Purchaser shall have a claim for such amount;

provided, however, that if sufficient funds are not available to fund all payments to be made in respect of any amounts described in any of clauses second, third, fourth, fifth and sixth above, the available funds being applied with respect to any such amounts (unless otherwise specified in such clause) shall be allocated to the payment of the amounts referred to in such clause ratably, based on the proportion of the Servicer’s, the Agent’s or the Purchasers’ interest in the aggregate outstanding amounts described in such clause.

(b) Subject to Sections 2.7 and 2.8, all amounts in the Concentration Account shall be automatically transferred to the Seller’s Account, and payments and distributions by the Servicer pursuant to Section 2.6(a) shall be made from funds so transferred to the Seller’s Account. Payments to the Seller under clause (vii) of Section 2.6(a) shall be made, solely for administrative convenience as requested by the Seller so as to effect payment on behalf of the Seller of amounts payable by the Seller to the Originators for so long as the ABF Agreement is in effect, to the Inventory Concentration Account (as defined in the ABF Collateral Documents).

Section 2.7 Triggering Event Settlement Procedures.

(a) On each Business Day (other than a Liquidation Day) on which a Triggering Event exists, the Agent (and not the Servicer) shall, out of Collections of Pool Receivables received on such Business Day:

(i) first, pay to the Servicer (if the Servicer is not Equistar or an Affiliate of Equistar), the Agent and the Purchasers, as applicable, an amount in U.S. Dollars equal to the Servicer Fee, the Yield, the Unused Commitment Fee, the Agent’s Fee and any other Obligations of the Seller due and payable on such day;

(ii) second, distribute to the Swing Purchaser an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Swing Purchaser’s Capital Investments in respect of Swing Purchases to zero;

(iii) third, if such day is the second Business Day following the date on which a Seller Report is or is required to be delivered, a Shortfall Condition exists as of the last day of the period covered by such Seller Report, and the Agent does not receive an updated Seller Report demonstrating that a Shortfall Condition does not exist on such

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second Business Day, distribute to the Purchasers an amount in U.S. Dollars equal to that amount, if any, which would be required to reduce Capital so that the aggregate Receivable Interests would not, after giving effect to such application and the Collections of Pool Receivables and the addition of new Pool Receivables on such day and the resulting automatic recomputation of such Receivable Interests pursuant to Section 2.5 as of the end of such day, exceed 100%; provided that (x) the Agent shall apply such amount, first, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted Base Rate and (y) second, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate; provided that in lieu of immediately reducing the Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate, the Agent, at the direction of the Seller, may transfer such amount to the Cash Assets Account and such amount shall be deemed to reduce Capital by the amount so held pending application thereof to reduce Capital Investments as to which Yield is calculated on the basis of the Adjusted LIBO Rate on the last day of each Yield Period applicable thereto (occurring in chronological order); provided, further, however, that if the Agent subsequently receives a request from the Servicer or the Seller for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition does not exist and certifying that either (x) the conditions to an Investment Event would be satisfied or (y) a Triggering Event ceases to exist, in each case after giving effect to such requested withdrawal, then the Agent shall release such amounts for further application under this Section 2.7(a);

(iv) fourth, distribute to the Purchasers of each Receivable Interest an amount in U.S. Dollars equal to that amount, if any, then required to be applied to reduce the Capital Investment of such Receivable Interest pursuant to the notice of the Seller delivered under Section 2.4(b);

(v) fifth, deposit into the Cash Assets Account such amount as the Seller, at its option, has specified to the Agent, which amount shall be deemed to reduce Capital by a corresponding amount; provided, however, that if the Agent subsequently receives a request from the Servicer or the Seller for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and a Seller Report demonstrating that a Shortfall Condition does not exist and certifying that either (x) the conditions to an Investment Event would be satisfied or (y) a Triggering Event ceases to exist, in each case after giving effect to such requested withdrawal, then the Agent shall release such amounts for further application under this Section 2.7(a);

(vi) sixth, distribute to the Servicer (if the Servicer is Equistar or an Affiliate of Equistar) the accrued Servicer Fee to the extent then due and payable; and

(vii) seventh, reinvest the remainder of such Collections, for the benefit of the Purchasers, which reinvestment shall result in (x) the automatic recomputation of the undivided percentage interest represented by such Receivable Interest pursuant to Section 2.5 as of the end of such day and (y) the payment of such remainder to the Seller; provided, however, that (A) to the extent the Agent or any Purchaser shall be required for any reason to pay over any amount representing Collections which have been previously reinvested for the benefit of such Purchaser pursuant hereto, such amount shall be deemed not to have been so reinvested but rather to have been retained by the Seller and paid over for the account of such Purchaser and, notwithstanding any provision herein to the contrary, such Purchaser shall have a claim for such amount and (B) either (I) if Total

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Excess Availability is less than (AA) $100,000,000 on any such day occurring on or before March 30, 2005 or (BB) $75,000,000 on any such day occurring after March 30, 2005 or (II) if the conditions to an Investment Event would not be satisfied on such day, such reinvestment and payment shall not be made and instead such remainder shall be applied to reduce all Capital Investments as follows: (1) first, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted Base Rate and (2) second, to reduce all Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate; provided that in lieu of immediately reducing the Capital Investments as to which Yield is determined on the basis of the Adjusted LIBO Rate, the Agent, at the direction of the Seller, may transfer such amount to the Cash Assets Account and such amount shall be deemed to reduce Capital by the amount so held pending application thereof to reduce Capital Investments as to which Yield is calculated on the basis of the Adjusted LIBO Rate on the last day of each Yield Period applicable thereto (occurring in chronological order); provided, further, however, that if the Agent subsequently receives a request from the Servicer or the Seller for a withdrawal of all or a portion of such amounts that are then held in the Cash Assets Account and either (I) the Agent receives a Seller Report demonstrating that a Shortfall Condition does not exist and certifying that either the conditions to an Investment Event would be satisfied or a Triggering Event does not exist, in each case after giving effect to such requested withdrawal, or (II) the aggregate Capital is zero, then the Agent shall release such amounts for reinvestment and payment to the Seller;

provided, however, that if sufficient funds are not available to fund all payments to be made in respect of any amounts described in any of clauses first, second, third, fourth, fifth and sixth above, the available funds being applied with respect to any such amounts (unless otherwise specified in such clause) shall be allocated to the payment of the amounts referred to in such clause ratably, based on the proportion of the Servicer’s, the Agent’s or the Purchasers’ interest in the aggregate outstanding amounts described in such clause.

(b) During the existence of a Triggering Event (other than on a Liquidation Day), all amounts in the Concentration Account shall be automatically transferred to the Sweep Account, and payments and distributions by the Agent pursuant to Section 2.7(a) shall be made from funds in the Sweep Account. Payments to the Seller under clause (vii) of Section 2.7(a) shall be made, solely for administrative convenience as requested by the Seller so as to effect payment on behalf of the Seller of amounts payable by the Seller to the Originators for so long as the ABF Agreement is in effect, to the “Sweep Account” as defined in the ABF Agreement.

Section 2.8 Liquidation Settlement Procedures.

On each Liquidation Day, the Agent shall transfer to the Sweep Account the Collections of Pool Receivables received on such day, and the Agent shall apply such Collections, and all amounts held in the Cash Assets Account, as follows:

(i) first, to pay Obligations of the Seller to the Agent under any Transaction Document in respect of any expense reimbursements, Cash Management Obligations or indemnities then due to the Agent;

(ii) second, to pay Obligations of the Seller to the Purchasers under any Transaction Document in respect of any expense reimbursements or indemnities then due to such Persons;

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(iii) third, to the Servicer (if the Servicer is not Equistar or an Affiliate of Equistar) in payment of the accrued Servicer Fee then due and payable, and to the Purchasers in payment of the accrued Unused Commitment Fees then due and payable;

(iv) fourth, to the Purchasers in payment of the accrued Yield then due and payable;

(v) fifth, to the Purchasers in reduction (to zero) of the Capital Investments in respect of each Receivable Interest;

(vi) sixth, to the Purchasers or a Co-Asset Agent in ratable payment of any other Obligations owed by the Seller hereunder or under any other Transaction Document (except for the Servicer Fee);

(vii) seventh, to the Servicer (if the Servicer is Equistar or an Affiliate of Equistar) in payment of the accrued Servicer Fee then due and payable; and

(viii) to the extent of any remainder, to the Seller;

provided, however, that if sufficient funds are not available to fund all payments to be made in respect of any amounts described in any of clauses first, second, third, fourth, fifth, sixth and seventh above, the available funds being applied with respect to any such amounts (unless otherwise specified in such clause) shall be allocated to the payment of the amounts referred to in such clause ratably, based on the proportion of the Servicer’s, the Agent’s or the Purchasers’ interest in the aggregate outstanding amounts described in such clause. Payments to the Seller under clause (viii) of Section 2.8 shall be made, solely for administrative convenience as requested by the Seller so as to effect payment on behalf of the Seller of amounts payable by the Seller to the Originators for so long as the ABF Agreement is in effect, to the “Sweep Account” as defined in the ABF Agreement.

Section 2.9 General Settlement Procedures.

(a) Except as set forth in clauses (a) and (b) below or as otherwise required by law or the underlying Contract, all Collections received from an Obligor of any Pool Receivable shall be applied to Pool Receivables then outstanding of such Obligor in the order of the age of such Pool Receivables, starting with the oldest such Pool Receivable, except if payment is designated by such Obligor for application to specific Pool Receivables.

(b) If, on any day, the Outstanding Balance of a Pool Receivable is either (x) reduced as a result of any defective, rejected or returned goods or services, any discount, or any adjustment by the Seller or any Originator, or (y) reduced or cancelled as a result of a setoff in respect of any claim by the Obligor thereof against the Seller or any Originator (whether such claim arises out of the same or a related transaction or an unrelated transaction), the Seller shall be deemed to have received on such day a Collection of such Receivable in the amount of such reduction or cancellation and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 5.1(i).

(c) If on any day (x) any of the representations or warranties in Section 4.1(i) is no longer true with respect to any Pool Receivable or (y) it is discovered that any Receivable that was included in the Net Receivables Pool Balance as an Eligible Receivable was not an Eligible Receivable at the time of such inclusion, the Seller shall be deemed to have received on such day a Collection in full of such Pool Receivable and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 5.1(i).

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Section 2.10 Payments and Computations, Etc.

(a) All amounts to be paid or deposited by the Seller or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 12:00 noon (New York time) on the day when due in U.S. Dollars in same day funds to the Agent’s Account. The Servicer or the Agent, as applicable, shall promptly thereafter cause to be distributed (i) like funds relating to the payment out of Collections in respect of Capital, Yield, Servicer Fee or other Obligations payable out of Collections, to the Purchasers (according to each Purchaser’s Ratable Portion) and the Servicer in accordance with the provisions of Section 2.6, 2.7, or 2.8, as applicable, and (ii) like funds relating to the payment by the Seller of other Obligations payable by the Seller hereunder, to the parties hereto for whose benefit such funds were paid (and if such funds are insufficient, such distribution shall be made, subject to Section 2.6, 2.7 or 2.8, as applicable, ratably in accordance with the respective amounts thereof). Upon the Agent’s acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 9.2, from and after the effective date specified in such Assignment and Acceptance, the Agent shall make all payments hereunder in respect of the interest assigned thereby to the Assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

(b) The Seller shall, to the extent permitted by law, pay to the Agent interest on all amounts not paid or deposited when due hereunder (except for those amounts with respect to which Yield accrues) at 2.00% per annum above the Alternate Base Rate in effect from time to time, payable on demand, provided, however, that such interest rate shall not at any time exceed the maximum rate permitted by applicable law. Such interest shall be for the account of, and distributed by the Agent to, the applicable Purchasers ratably in accordance with their respective interests in such overdue amount.

(c) All computations of interest and all computations of Yield, Unused Commitment Fee and other per annum fees 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.

(d) Unless the Agent shall have received notice from the Servicer or the Seller prior to the date on which any payment is due to the Purchasers hereunder that the Servicer or the Seller, as the case may be, will not make such payment in full, the Agent may assume that the Servicer or the Seller, as the case may be, has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Purchaser on such due date an amount equal to the amount then due such Purchaser. If and to the extent the Servicer or the Seller, as the case may be, shall not have so made such payment in full to the Agent, each Purchaser shall repay to the Agent promptly on demand such amount distributed to such Purchaser together with interest thereon, for each day from the date such amount is distributed to such Purchaser until the date such Purchaser repays such amount to the Agent, at the Federal Funds Rate.

Section 2.11 Yield and Fees.

(a) All Capital Investments and the outstanding amount of all other Obligations hereunder shall bear a Yield, in the case of Capital Investments, on the amount thereof from the date such Capital Investments are made and, in the case of such other Obligations, from the date such other Obligations are due and payable until, in all cases, paid in full, at the Applicable Yield. Accrued Yield shall be payable on each Payment Date.

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(b) The Seller shall pay to each Facility Agent such fees as are set forth in the Fee Letter to which such Facility Agent is a party.

(c) The Seller shall pay to the Agent for remittance to the Servicer a fee (the “Servicer Fee”) of 0.50% per annum on the average daily aggregate Outstanding Balance of the Pool Receivables for the most recently completed month, from the date of the initial Purchase hereunder until the later of the Termination Date or the date on which Capital is reduced to zero, payable in arrears on the applicable Payment Date; provided, however, that, if at any time, the Servicer is not Equistar or an Affiliate of Equistar, the Servicer shall be paid, as such fee, the greater of (i) such amount and (ii) 120% of its reasonable out-of-pocket costs and expenses incurred by it in servicing, administering and collecting the Pool Receivables; and, provided further, that such fee shall be payable only from Collections pursuant to, and subject to the priority of payment set forth in, Sections 2.6, 2.7 and 2.8.

(d) The Seller agrees to pay to each Purchaser an unused commitment fee on the actual daily amount by which the Commitment of such Purchaser exceeds such Purchaser’s Capital Investments (the “Unused Commitment Fee”) from the date hereof through the Termination Date at the Applicable Unused Commitment Fee Rate, payable in arrears (x) on the second Business Day of each calendar month, commencing on the first such Business Day following the Closing Date and (y) on the Termination Date.

Section 2.12 Special Provisions Governing Capital Investments at the Applicable LIBO Rate.

(a) Increased Costs. If, due to either (i) a change after the date hereof in Regulation D of the Board (to the extent any cost incurred pursuant to such regulation is not included in the calculation of Adjusted LIBO Rate), (ii) the introduction of or any change after the date hereof in or in the interpretation of any law or regulation (other than any law or regulation relating to taxes, as to which Section 2.14 shall govern) or (iii) the compliance with any guideline or request issued or made after the date hereof from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to (or, in the case of Regulation D of the Board there shall be imposed a cost on) any Indemnified Party of agreeing to make or making any Purchase or maintaining any Receivable Interest (or interest therein) hereunder, then the Seller shall from time to time, within five Business Days following demand and delivery to the Seller of the certificate referred to in the third-to-last sentence of this Section 2.12(a) by such Indemnified Party (or by the Agent for the account of such Indemnified Party) (with a copy of such demand and certificate to the Agent), pay to the Agent for the account of such Indemnified Party additional amounts sufficient to compensate such Indemnified Party for such increased or imposed cost. Each Indemnified Party hereto agrees to use reasonable efforts promptly to notify the Seller of any event referred to in clause (i), (ii) or (iii) above, provided that the failure to give such notice shall not affect the rights of any Indemnified Party under this Section 2.12(a) ; provided, however, that no Indemnified Party shall be entitled to compensation under this Section 2.12(a) for any costs incurred more than 90 days prior to the date on which it shall have requested compensation therefor; provided further, that if the change in law or regulation or in the interpretation or administration thereof that shall give rise to any such costs or reductions shall be retroactive, then the 90-day period referred to above shall be extended to include the period of retroactive effect thereof. A certificate in reasonable detail as to the basis for and the amount of such increased cost, submitted to the Seller and the Agent by such Indemnified Party (or by the Agent for the account of such Indemnified Party) shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding any other provision of this Section 2.12(a), no Indemnified Party shall demand compensation for any cost or reduction referred to above if it shall not at the time be the general policy or practice of such Indemnified Party to demand such compensation in similar circumstances under comparable provisions of other receivables purchase agreements or credit agreements, if any. If any Indemnified Party shall receive as a refund any moneys

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from any source that it has listed on the certificate provided pursuant to the second preceding sentence as an increased cost, to the extent that the Seller has previously paid such increased cost to such Indemnified Party, such Indemnified Party shall promptly forward such refund to the Seller without interest.

(b) Interest Rate Unascertainable, Inadequate or Unfair. In the event that (i) the Agent determines that adequate and fair means do not exist for ascertaining the applicable interest rates by reference to which the Adjusted LIBO Rate then being determined is to be fixed or (ii) the Required Purchasers notify the Agent that the Adjusted LIBO Rate for any Yield Period will not adequately reflect the cost to the Purchasers of making a Capital Investment or maintaining such Capital Investment for such Yield Period, the Agent shall forthwith so notify the Seller and the Purchasers, whereupon the Applicable Yield for such Capital Investment shall automatically, on the last day of the current Yield Period for such Capital Investment, convert into the Applicable Base Rate and the obligations of the Purchasers to make a Capital Investment or maintain a Capital Investment at the Applicable LIBO Rate shall be suspended until the Agent shall notify the Seller that the Required Purchasers have determined that the circumstances causing such suspension no longer exist.

(c) Illegality. Notwithstanding any other provision of this Agreement, if any Purchaser determines that the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order after the date of this Agreement shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Purchaser to make a Capital Investment or maintain a Capital Investment at the Applicable LIBO Rate, then, on notice thereof and demand therefor by such Purchaser to the Seller through the Agent, (i) the obligation of such Purchaser to make a Capital Investment or maintain a Capital Investment at the Applicable LIBO Rate shall be suspended, and each such Purchaser shall make Capital Investments at the Applicable Base Rate and (ii) if the affected Capital Investments at the Applicable LIBO Rate are then outstanding, the Seller shall immediately convert each such Capital Investment into a Capital Investment at the Applicable Base Rate. If, at any time after a Purchaser gives notice under this Section 2.12(c), such Purchaser determines that it may lawfully make Capital Investments at the Applicable LIBO Rate, such Purchaser shall promptly give notice of that determination to the Seller and the Agent, and the Agent shall promptly transmit the notice to each other Purchaser. The Seller’s right to request, and such Purchaser’s obligation, if any, to make Capital Investments at the Applicable LIBO Rate shall thereupon be restored.

(d) Liquidation Costs. In addition to all amounts required to be paid by the Seller hereunder, the Seller shall compensate each Purchaser, within five Business Days following demand therefor, for all losses, expenses and liabilities (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Purchaser to fund or maintain such Purchaser’s Capital Investments at the Applicable LIBO Rate but excluding any loss of the Applicable Margin on the relevant Capital Investments) (each, a “Liquidation Cost”) that such Purchaser may sustain, and any customary fees that such Purchaser may impose, (i) if for any reason a proposed Capital Investment, conversion into or continuation of Capital Investments at the Applicable LIBO Rate does not occur on a date specified therefor in a Notice of Purchase given by the Seller or in a telephonic request by it for Purchase or a successive Yield Period does not commence after notice therefor is given hereunder, (ii) if for any reason any Capital Investment at the Applicable LIBO Rate is reduced (including mandatorily pursuant to Section 2.7 or 2.8) on a date that is not the last day of the applicable Yield Period, (iii) as a consequence of a required conversion of a Capital Investment at the Applicable LIBO Rate to Capital Investment at the Applicable Base Rate as a result of any of the events indicated in Section 2.12(c) above or (iv) as a consequence of any failure by the Seller to reduce Capital Investment at the Applicable LIBO Rate when required by the terms hereof. The Purchaser making demand for such compensation shall deliver to the Seller concurrently with such demand a written statement as to such losses, expenses and liabilities and fees, and this statement shall be conclusive as to the amount of compensation due to such Purchaser, absent manifest error.

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Section 2.13 Increased Capital.

If any Indemnified Party determines that either the introduction of or any change in or in the interpretation of any law or regulation after the date hereof or the compliance with any guideline or request issued or made after the date hereof from any central bank or other Governmental Authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Indemnified Party or any corporation controlling such Indemnified Party and that the amount of such capital is increased by or based upon the existence of such Indemnified Party’s commitment, if any, to purchase any Receivable Interest (or interest therein), or to maintain such Receivable Interest (or interest therein) hereunder, then, within five Business Days following demand and delivery to the Seller of the certificate referred to in the third-to-last sentence of this Section 2.13 by such Indemnified Party (or by the Agent for the account of such Indemnified Party) (with a copy of such demand and certificate to the Agent) the Seller shall pay to the Agent for the account of such Indemnified Party from time to time, as specified by such Indemnified Party, additional amounts sufficient to compensate such Indemnified Party or such corporation in the light of such circumstances, to the extent that such Indemnified Party reasonably determines such increase in capital to be allocable to the existence of any such commitment. Each Indemnified Party hereto agrees to use reasonable efforts promptly to notify the Seller of any event referred to in the first sentence of this Section 2.13, provided that the failure to give such notice shall not affect the rights of any Indemnified Party under this Section 2.13; provided, however, that no Indemnified Party shall be entitled to compensation under this Section 2.13 for any change in capital requirements incurred more than 90 days prior to the date on which it shall have requested compensation therefor; provided, further, that if the change in law or regulation or in the interpretation or administration thereof that shall give rise to any such change shall be retroactive, then the 90-day period referred to above shall be extended to include the period of retroactive effect thereof. A certificate in reasonable detail as to the basis for, and the amount of, such compensation submitted to the Seller and the Agent by such Indemnified Party (or by the Agent for the account of such Indemnified Party) shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding any other provision of this Section 2.13, no Indemnified Party shall demand compensation under this Section 2.13 if it shall not at the time be the general policy or practice of such Indemnified Party to demand such compensation in similar circumstances under comparable provisions of other receivables purchase agreements or credit agreements, if any. If any Indemnified Party shall receive as a refund any moneys from any source that it has listed on the certificate provided pursuant to the second preceding sentence, to the extent that the Seller has previously paid such amounts to such Indemnified Party, such Indemnified Party shall promptly forward such refund to the Seller without interest.

Section 2.14 Taxes.

(a) Any and all payments by the Seller hereunder or deposits from Collections hereunder shall be made, in accordance with Section 2.10, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Indemnified Party, (i) taxes that are imposed on its overall net income by the United States, (ii) taxes that are imposed on its overall net income, assets or net worth (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction under the laws of which such Indemnified Party is organized or qualified to do business or in which such Indemnified Party holds any asset in connection with this Agreement or, in each case, any political subdivision thereof, and (iii) branch profits tax imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Indemnified Party is located (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or deposits from Collections hereunder being hereinafter referred to as “Taxes”). If the Seller or the Servicer or the Agent shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or deposit from Collections hereunder to any Indemnified Party, (i) the sum payable shall be increased as may be

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necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.14) such Indemnified Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Seller or the Servicer or the Agent shall make such deductions and (iii) the Seller or the Servicer or the Agent shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, the Seller shall pay any present or future sales, stamp, documentary, excise, property or similar taxes, charges or levies that arise from any payment made hereunder or deposit from Collections hereunder or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Agreement, the Receivables Sale Agreement or any other Transaction Document (hereinafter referred to as “Other Taxes”).

(c) The Seller shall indemnify each Indemnified Party for and hold it harmless against the full amount of Taxes and Other Taxes (including, without limitation, taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.14) imposed on or paid by such Indemnified Party and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within five Business Days from the date such Indemnified Party makes written demand therefor (with a copy to the Agent).

(d) Within 30 days after the date of any payment of Taxes, the Seller shall furnish to the Agent and each applicable Purchaser, at its address referred to in Section 11.3, the original or a certified copy of a receipt evidencing such payment or a certificate executed by a Responsible Officer of the Seller stating that such Taxes have been paid, together with evidence of such payment reasonably satisfactory to the Agent.

(e) Each Purchaser organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Purchaser, and on the date of the Assignment or the Assignment and Acceptance pursuant to which it became a Purchaser in the case of each other Purchaser, and from time to time thereafter as requested in writing by the Seller (but only so long thereafter as such Purchaser remains lawfully able to do so), provide each of the Agent and the Seller with 2 original Internal Revenue Service forms W-8ECI or W-8BEN, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Purchaser is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement. If the forms provided by a Purchaser at the time such Purchaser first becomes a party to this Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Purchaser provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such form; provided, however, that if, at the effective date of the Assignment or the Assignment and Acceptance pursuant to which an Assignee becomes an Purchaser hereunder, the Purchaser assignor was entitled to payments under subsection (a) of this Section 2.14 (after taking into account subsections (e) and (f) of this Section 2.14) in respect of United States withholding tax with respect to amounts paid hereunder at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to such Assignee on such date. If any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service form W-8ECI or W-8BEN or any successor or other form prescribed by the Internal Revenue Service, that the Purchaser reasonably considers to be confidential, the Purchaser shall give notice thereof to the Seller and shall not be obligated to include in such form or document such confidential information.

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(f) For any period with respect to which an Purchaser has failed to provide the Seller with the appropriate form described in subsection (e) of this Section 2.14 (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided or if such form otherwise is not required under subsection (e) of this Section 2.14), such Purchaser shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.14 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should any Purchaser become subject to Taxes because of its failure to deliver a form required hereunder, the Seller shall take such steps as such Purchaser shall reasonably request to assist such Purchaser (at such Purchaser’s expense) to recover such Taxes.

Section 2.15 Sharing of Payments, Etc.

If any Purchaser shall obtain any payment (whether voluntarily, involuntarily, through the exercise of any right of set-off or otherwise) on account of the Purchases made by it (other than with respect to payments due to such Purchaser pursuant to Section 2.12, 2.13 or 2.14) in excess of its Ratable Portion of payments on account of the Purchases obtained by all the Purchasers, such Purchaser shall forthwith purchase from the other Purchasers such interests in the Receivable Interests purchased by them as shall be necessary to cause such Purchaser to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such Purchaser, such purchase from each other Purchaser shall be rescinded and such other Purchaser shall repay to the Purchaser the purchase price to the extent of such recovery together with an amount equal to such other Purchaser’s Ratable Portion (according to the proportion of (a) the amount of such other Purchaser’s required repayment to (b) the total amount so recovered from the Purchaser) of any interest or other amount paid or payable by the Purchaser in respect of the total amount so recovered. The Seller agrees that any Purchaser so purchasing an interest in Receivable Interests from another Purchaser pursuant to this Section 2.15 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such interest in Receivable Interests as fully as if such Purchaser were the direct creditor of the Seller in the amount of such interest in Receivable Interests.

Section 2.16 Conversion/Continuation Option.

(a) The Seller may elect (i) at any time on any Business Day, to convert Capital Investments bearing Yield at the Applicable Base Rate (other than Swing Purchases) or any portion thereof to Capital Investments bearing Yield at the Applicable LIBO Rate and (ii) at the end of any applicable Yield Period, to convert Capital Investments bearing Yield at the Applicable LIBO Rate or any portion thereof into Capital Investments bearing Yield at the Applicable Base Rate or to continue such Capital Investments bearing Yield at the Applicable LIBO Rate or any portion thereof for an additional Yield Period; provided, however, that the aggregate amount of the Capital Investments bearing Yield at the Applicable LIBO Rate for each Yield Period must be in an amount of at least $10,000,000 or an integral multiple of $1,000,000 in excess thereof. Each conversion or continuation shall be allocated among the Capital Investments of each Purchaser in accordance with such Purchaser’s Receivable Interest. Each such election shall be in substantially the form of Exhibit H (a “Notice of Conversion or Continuation”) and shall be made by giving the Agent at least 3 Business Days’ prior written notice specifying (A) the amount and type of Capital Investment being converted or continued, (B) in the case of a conversion to or a continuation of Capital Investments bearing Yield at the Applicable LIBO Rate, the applicable Yield Period and (C) in the case of a conversion, the date of such conversion.

(b) The Agent shall promptly notify each Purchaser of its receipt of a Notice of Conversion or Continuation and of the options selected therein. Notwithstanding the foregoing, no conversion in whole or in part of Capital Investments bearing Yield at the Applicable Base Rate to Capital Investments bearing Yield at the Applicable LIBO Rate and no continuation in whole or in part of

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Capital Investments bearing Yield at the Applicable LIBO Rate upon the expiration of any applicable Yield Period shall be permitted at any time at which (i) a Potential Event of Termination or an Event of Termination shall have occurred and be continuing or (ii) the continuation of, or conversion into, a Capital Investment bearing Yield at the Applicable LIBO Rate would violate any provision of Section 2.12. If, within the time period required under the terms of this Section 2.16, the Agent does not receive a Notice of Conversion or Continuation from the Seller containing a permitted election to continue any Capital Investments bearing Yield at the Applicable LIBO Rate for an additional Yield Period or to convert any such Capital Investments, then, upon the expiration of the applicable Yield Period, such Capital Investments shall, subject to Section 3.2, be automatically continued as Capital Investments bearing Yield at the Applicable LIBO Rate with a Yield Period of one month. Each Notice of Conversion or Continuation shall be irrevocable.

Section 2.17 Duty to Mitigate; Assignment of Commitments Under Certain Circumstances.

(a) If any Indemnified Party claims any additional amounts payable pursuant to Section 2.12 or Section 2.13 or if the Seller is required to pay any additional amount to any Indemnified Party or any Governmental Authority for the account of any Purchaser pursuant to Section 2.14, then such Indemnified Party shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document, including, without limitation, any such certificate or document reasonably requested by the Seller, or to change the jurisdiction of the applicable office through which it holds or maintains its interest in the applicable Receivable Interest or to take other actions (including the filing of certificates or documents) known to it to be available if the making of such a filing or change or the taking of such other action would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue or avoid the circumstances giving rise to such exercise and would not, in the sole determination of such Indemnified Party, be otherwise disadvantageous to such Indemnified Party or its Receivable Interest.

(b) In the event that any Indemnified Party shall have delivered a notice or certificate pursuant to Section 2.12 or 2.13, or the Seller shall be required to make additional payments to any Indemnified Party under Section 2.14, the Seller shall have the right, at its own expense (which shall include the processing and recordation fee referred to in Section 9.1(a)), upon notice to such Indemnified Party and the Agent, to require the related Purchaser to transfer and assign without recourse (in accordance with and subject to the restrictions contained in Section 9.1) all its interests, rights and obligations hereunder to another financial institution approved by the Agent and the Swing Purchaser (which approval shall not be unreasonably withheld) which shall assume such obligations (which assignee may be another Purchaser, if a Purchaser accepts such assignment); provided, however, that (i) no such assignment shall conflict with any law, rule or regulation or order of any Governmental Authority and (ii) the assignee or the Seller shall pay to the affected Purchaser in immediately available funds on the date of such assignment the amounts of its Capital Investments, including any interest in Receivable Interests relating to Swing Purchases, accrued Yield thereon and all other Obligations accrued for its account or owed to it hereunder (including the additional amounts asserted and payable pursuant to Section 2.12, 2.13 or 2.14, if any).

Section 2.18 Restricted Accounts; Investment of Amounts in the Cash Assets Account.

(a) The Agent shall have “control” (within the meaning of Section 9-104 of the UCC) of each of the Restricted Accounts.

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(b) Funds held in the Cash Assets Account may, until withdrawn or otherwise applied pursuant hereto, be invested and reinvested in such Liquid Investments as the Seller may request from time to time; provided that, if an Event of Termination shall have occurred and be continuing, the Agent may select such Liquid Investments. “Liquid Investments” means (i) direct obligations of the United States or any agency thereof, (ii) obligations guaranteed by the United States or any agency thereof, (iii) time deposits and money market deposit accounts issued by or guaranteed by or placed with a financial institution reasonably acceptable to the Agent, and (iv) fully collateralized repurchase agreements for securities described in clause (i) or (ii) above entered into with a financial institution reasonably acceptable to the Agent, provided in each case that such Liquid Investment (x) matures within 30 days and (y) is in a form, and is issued and held in a manner, that in the reasonable judgment of the Agent permits appropriate measures to have been taken to perfect security interests therein.

ARTICLE III

CONDITIONS OF PURCHASES

Section 3.1 Conditions Precedent to the Effectiveness of this Agreement.

The effectiveness of this Agreement is subject to the satisfaction (or substantially simultaneous satisfaction) of the following conditions precedent:

(a) The Agent shall have received all fees and expenses (including, but not limited to, reasonable fees and expenses of counsel to the Agent) required to be paid on the Closing Date, pursuant to the terms of this Agreement and each Fee Letter and the Annex thereto.

(b) The Agent shall have received on or before the Closing Date, the following, each (unless otherwise indicated) dated as of the Closing Date (unless otherwise specified), in form and substance reasonably satisfactory to the Agent:

(i) This Agreement, duly executed and delivered by the Seller and the Servicer;

(ii) The Receivables Sale Agreement, duly executed by the Seller and each Originator, together with:

(A) Proper financing statements naming each Originator as debtor, the Seller as secured party and the Agent, as assignee, to be filed under the UCC of all jurisdictions that the Agent may deem necessary in order to perfect the Seller’s interests created or purported to be created by the Receivables Sale Agreement;

(B) Proper financing statement terminations or releases, if any, necessary to release all security interests and other rights of any Person in the Receivables, Related Security, Collections or Contracts previously granted by any Originator;

(C) The Consent and Agreement, duly executed by the Seller and each Originator; and

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(D) A Subordinated Note, in substantially the form of Exhibit B to the Receivables Sale Agreement, payable to the order of each Originator, and duly executed by the Seller;

(iii) The Equistar Undertaking, duly executed and delivered by Equistar;

(iv) (x) A Lock-Box Agreement with each Lock-Box Bank, executed by such Lock-Box Bank, the Agent and the Seller, the Servicer or an Originator, as applicable, and (y) a control agreement, in form and substance reasonably satisfactory to the Agent, with each depository bank maintaining any other Restricted Account, executed by such depository bank, the Agent, the Seller and the Servicer, as applicable;

(v) The Intercreditor Agreement duly executed by each party thereto;

(vi) Good standing certificates (or equivalent) issued by the Secretary of State of the jurisdiction of incorporation of each Transaction Party;

(vii) A copy of the articles or certificate of incorporation (or equivalent Constituent Document) of each Transaction Party, certified as of a recent date by the Secretary of State (or equivalent body) of the state of organization of such Transaction Party;

(viii) A certificate of the Secretary or an Assistant Secretary of each Transaction Party certifying (A) the names and true signatures of each officer of such Transaction Party that has been authorized to execute and deliver any Transaction Document or other document required hereunder to be executed and delivered by or on behalf of such Transaction Party, (B) the by-laws (or equivalent Constituent Document) of such Transaction Party as in effect on the date of such certification, (C) the resolutions of such Transaction Party’s Board of Directors (or equivalent governing body) approving and authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and (D) that there have been no changes in the certificate of incorporation (or equivalent Constituent Document) of such Transaction Party from the certificate of incorporation (or equivalent Constituent Document) delivered pursuant to clause (vii) above;

(ix) A certificate of a Principal Financial Officer of each Transaction Party certifying that the conditions set forth in Sections 3.1(a), (b), (c), (e), (f) and (h) have been satisfied;

(x) A certificate of a Principal Financial Officer of each of the Seller and Originators stating that such Transaction Party is Solvent after giving effect to the transactions contemplated hereunder and under the other Transaction Documents;

(xi) Proper financing statements naming the Seller, as debtor, and the Agent, as secured party, to be filed under the UCC of all jurisdictions that the Agent may deem necessary in order to perfect the ownership interests created or purported to be created by the Transactions Documents;

(xii) Proper financing statement terminations or releases, if any, necessary to release all security interests and other rights of any Person in the Pool Receivables, Contracts, Related Security or Collections previously granted by the Seller or any Originator; and

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(xiii) Favorable opinions of (A) Gerald A. O’Brien, General Counsel of Equistar, in substantially the form of Exhibit I-2 hereto and as to such other matters as the Agent may reasonably request, (B) Baker Botts L.L.P., counsel to the Transaction Parties, in substantially the forms of Exhibit I-1 and I-3 hereto as to such other matters as the Agent may reasonably request, including without limitation (1) a “true sale” opinion with respect to the sale of Receivable Assets under and as defined in the Receivables Sale Agreement from each Originator to the Seller, (2) an opinion with respect to the non-substantive consolidation of the Seller with each other Transaction Party or any of its Affiliates in a case under the U.S. Bankruptcy Code, and (3) an opinion relating to the enforceability of the Transaction Documents, compliance with all laws and regulations (including Regulation U of the Board), the perfection of all ownership and other interests purported to be granted under the Transaction Documents, and no conflicts with material agreements, and (C) special counsel to the Agent, as the Agent may reasonably request.

(c) Each of the Seller, the Originators and the Servicer shall have received all necessary governmental and third party consents and approvals necessary in connection with Transaction Documents and the transactions contemplated thereby (without the imposition of any conditions that are not reasonably acceptable to the Purchasers) and shall remain in effect, and all applicable governmental filings (except for the UCC financing statements referred to in this Section 3.1) shall have been made and all applicable waiting periods shall have expired without in either case any action being taken by any competent authority; and no law or regulation shall be applicable in the judgment of the Purchasers that restrains, prevents or imposes materially adverse conditions upon the Transaction Documents or the transactions contemplated thereby.

(d) The Purchasers shall have received and be satisfied with (i) audited financial statements of Equistar and its Consolidated Subsidiaries for the Fiscal Year ending December 31, 2002 by independent nationally-recognized public accountants which statements shall be unqualified, (ii) interim unaudited quarterly financial statements of Equistar and its Consolidated Subsidiaries, through the fiscal quarter ending September 30, 2003, and (iii) the financial projections of Equistar and its Consolidated Subsidiaries covering the Fiscal Years ending in 2003 through 2007, inclusive, that are included in the Confidential Information Memorandum.

(e) (i) All obligations for outstanding capital, accrued and unpaid yield and fees and other amounts then due and payable under the Existing Program shall have been concurrently satisfied, (ii) all documentation relating to the Existing Program shall have been concurrently terminated on terms satisfactory to the Agent and (iii) the Agent shall have received evidence of such termination in form and substance satisfactory to the Agent.

(f) The ABF Agreement shall be in full force and effect and no default shall exist thereunder.

(g) The Agent shall be satisfied with the results of a field examination of the Originators conducted by CUSA’s internal auditors no more than 3 months prior to the Closing Date.

(h) Total Excess Availability (after giving effect to the effectiveness of this Agreement and the ABF Agreement) shall be at least $300,000,000 on the Closing Date.

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The Agent shall promptly notify the Seller, the Servicer and the Purchasers of the Closing Date, and such notice shall be conclusive and binding on all parties hereto.

Section 3.2 Conditions Precedent to All Investment Events.

Each Investment Event (including the initial Purchase by each Purchaser) shall be subject to the further conditions precedent that:

(a) on or prior to the date of such Investment Event, the Servicer shall have delivered to the Agent, in form and substance satisfactory to the Agent in its Discretion:

(i) a completed monthly Seller Report, signed by a Principal Financial Officer of the Servicer and dated within 31 days prior to the date of such Investment Event, together with a listing by Obligor of all Pool Receivables, and

(ii) during the existence of a Triggering Event, not later than the second Business Day of each week, a completed weekly Seller Report, signed by a Principal Financial Officer of the Servicer and effective as of the end of the last Business Day of the then immediately preceding week, and

(b) on the date of such Investment Event the following statements shall be true (and the acceptance by the Seller of the proceeds of the Purchase or reinvestment, as applicable, being made on the date of such Investment Event shall constitute a representation and warranty by the Servicer, or the Seller, as the case may be, that on the date of such Investment Event, such statements are true):

(i) the representations and warranties applicable to such Transaction Party contained in Article IV of this Agreement and in Article III of the Receivables Sale Agreement are correct in all material respects on and as of the date of such Investment Event, before and after giving effect to such Investment Event and to the application of the proceeds from the Purchase or reinvestment, as applicable, being made on the date thereof, as though made on and as of such date, except (x) in the case of an Investment Event consisting solely of a conversion of the Applicable Yield from a rate based on the Adjusted LIBO Rate to a rate based on the Adjusted Base Rate or (y) to the extent such representations and warranties that expressly relate to an earlier date;

(ii) no event has occurred and is continuing, or would result from such Investment Event or from the application of the proceeds from the Purchase or reinvestment, as applicable, being made on the date of such Investment Event, which constitutes an Event of Termination or a Potential Event of Termination;

(iii) the Purchase or reinvestment, as applicable, being made on the same date as such Investment Event shall not violate any requirement of law and shall not be enjoined, temporarily, preliminarily or permanently; and

(iv) after giving effect to the Purchase or reinvestment, as applicable, being made on the same date as such Investment Event (except in the case of an Investment Event consisting solely of a conversion of the Applicable Yield from a rate based on the Adjusted LIBO Rate to a rate based on the Adjusted Base Rate), either (x) the daily average Total Excess Availability shall have exceeded $100,000,000 for the period of 30 consecutive calendar days then ended or (y) no Permitted Dividends and no prepayment of Indebtedness pursuant to Section 4.09(c)(ii) of the Equistar Undertaking shall have

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been paid by Equistar since the time the daily average Total Excess Availability last exceeded $100,000,000 (after giving effect to any such Permitted Dividend) for a period of 30 consecutive calendar days.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.1 Representations and Warranties of the Seller.

The Seller represents and warrants as follows:

(a) (i) The Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction indicated at the beginning of this Agreement, has the requisite power and authority under its Constituent Documents and applicable law to own its property and assets and to carry on its business as now conducted and proposed to be conducted after the Closing Date and is duly qualified to do business, and is in good standing, in every jurisdiction where such qualification or authorization is required, except to the extent that any failure to be so qualified or in good standing as a foreign entity could not reasonably be expected to have a Material Adverse Effect.

(ii) The Seller has no Subsidiaries. All of the outstanding membership interests of the Seller are owned by Equistar.

(b) The Seller has the power and authority under its Constituent Documents and applicable law to execute, deliver and carry out the provisions of the Transaction Documents to which it is a party, and all such actions have been duly and validly authorized by all necessary proceedings on its part under its Constituent Documents and applicable law.

(c) The execution, delivery and performance by the Seller of the Transaction Documents to which it is a party, and the transactions contemplated hereby and thereby, including the Seller’s use of the proceeds of Purchases and reinvestments, are within the Seller’s powers, have been duly authorized and delivered by all necessary action on its part, do not (i) violate (x) any provision of the Seller’s Constituent Documents or any other agreement governing its organization and/or scope of power and authority or any applicable law, rule, regulation (including Regulation U or X) or order, writ, judgment, injunction, decree, determination or award of any Governmental Authority binding upon it or any other Transaction Party, (ii) result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any indenture or any agreement or other instrument to which it is a party, or by which it or any of its properties or assets are bound, or (iii) except for the Liens created by the Transaction Documents, result in or require the creation or imposition of any Lien upon any of its property or assets.

(d) This Agreement is, and the other Transaction Documents to which the Seller is or will be a party when delivered will be, the legal, valid and binding obligations of the Seller enforceable against the Seller in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and by general principles of equity, including implied obligations of good faith and fair dealing.

(e) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is or will be required for the due execution, delivery and performance by the Seller of any Transaction Document to which it is a party or any transaction contemplated hereby or thereby, except for the filings of the financing statements referred to in Article III.

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(f) Since the date of the Seller’s formation, there has not occurred any development or event affecting, or any change in the business, assets, results of operations, financial condition or prospects of, the Seller which has resulted or could reasonably be expected to result in a Material Adverse Effect.

(g) There is no action, suit, investigation, litigation or proceeding at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of the Seller, threatened against or affecting the Seller or its business, assets or rights (i) as to which there is a reasonable possibility of an adverse decision and which, if adversely determined, could, individually or, in the aggregate, reasonably be expected to have a Material Adverse Effect or (ii) that in any manner draws into question the validity or enforceability of any Transaction Document.

(h) No proceeds of any Purchase or reinvestment will be used to acquire any security in any transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of 1934 (unless such transaction shall have been approved by the board of directors (or comparable governing body) of the issuer of such Security) or used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose which entails a violation of the provisions of the Regulations of the Board, including Regulation U or X thereof.

(i)

(i) Immediately prior to the time of the initial creation of an interest hereunder in any Pool Receivable, the Seller is the legal and beneficial owner of such Pool Receivable and Related Security and Collections with respect thereto, in each case free and clear of any Lien (other than Permitted Liens).

(ii) Upon each Purchase or reinvestment, the Seller shall transfer to the Purchaser making such Purchase or reinvestment (and such Purchaser shall acquire) a valid interest to the extent of the pertinent Receivable Interest in each Pool Receivable then existing or thereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Lien (other than Permitted Liens), which ownership interest or security interest shall be a perfected first priority ownership interest or security interest upon the filing of the financing statements referred to in Section 3.1(b)(xii).

(iii) With respect to each transfer to it of any Pool Receivables, the Seller has either (i) purchased such Pool Receivables from an Originator in exchange for payment (made by the Seller to an Originator in accordance with the provisions of the Receivables Sale Agreement) in an amount which constitutes fair consideration and approximates fair market value for such Pool Receivables and in a sale the terms and conditions of which (including, without limitation, the purchase price thereof) reasonably approximate an arm’s-length transaction between unaffiliated parties or (ii) acquired such Pool Receivables from an Originator as a capital contribution in accordance with the provisions of the Receivables Sale Agreement. No such sale, and no such contribution, has been made for or on account of an antecedent debt owed by any Originator to the Seller and no such sale or contribution is or may be voidable or subject to avoidance under any section of the U.S. Bankruptcy Code.

(j) No report or document or other information furnished or to be furnished at any time by or on behalf of the Seller to the Agent or any Purchaser in connection with any Transaction Document, when taken together with all other reports, documents and information then or theretofore so furnished by or on behalf of the Seller, contained or will contain, as of the date so furnished, any untrue

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statement of a material fact or omitted to state, or will omit to state, as of the date so furnished, a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading.

(k) The jurisdiction of incorporation, organizational identification number (if any), and the address(es) of the principal place of business and chief executive office of the Seller and the office where the Seller keeps its Records concerning the Receivable Assets, are as set forth in Schedule III hereto (or, by notice to the Agent in accordance with Section 5.1(e), at such other locations in jurisdictions, within the United States, where all requested actions under Section 6.5(a) have been taken and completed).

(l) The names and addresses of all the Lock-Box Banks, together with the lock-box numbers related to, and the account numbers and owners of, the Lock-Box Accounts at such Lock-Box Banks, are specified in Schedule I hereto (or such other Lock-Box Banks and/or such other Lock-Box Accounts as have been notified to the Agent in accordance with Section 5.3(m). Except pursuant to the Lock-Box Agreements, the Seller has not granted any Person dominion or control of any Lock-Box Account, or the right to take dominion or control over any Lock-Box Account at a future time or upon the occurrence of a future event.

(m) Since the date of its formation, the Seller has not engaged in any activity other than as contemplated by the Transaction Documents or entered into any commitment or incurred any Indebtedness other than pursuant to, or as permitted under, the Transaction Documents.

(n) The Seller has not maintained, contributed to or incurred or assumed any obligation with respect to any Plan, Multiemployer Plan or Welfare Plan, except such obligation or contingent obligation that arises as a matter of law solely as a result of an ERISA Affiliate’s sponsorship of a Plan, Multiemployer Plan or Welfare Plan.

(o) The Seller has complied with the Credit and Collection Policy in all material respects and since the date of this Agreement there has been no change in the Credit and Collection Policy except as permitted hereunder. The Seller has not extended or modified the terms of any Pool Receivable or the Contract under which any such Pool Receivable arose, except in accordance with the Credit and Collection Policy.

(p) The Seller has filed, or caused to be filed or be included in, all tax reports and returns (federal, state, local and foreign), if any, required to be filed by it and paid, or caused to be paid, all amounts of taxes, including interest and penalties, required to be paid by it, except for such taxes (i) as are being contested in good faith by proper proceedings and (ii) against which adequate reserves shall have been established in accordance with and to the extent required by GAAP, but only so long as the proceedings referred to in clause (i) above would not subject the Agent or any other Indemnified Party to any civil or criminal penalty or liability or involve any material risk of the loss, sale or forfeiture of any property, rights or interests included in the Pool Receivables, Related Security, Collections, Restricted Accounts or proceeds thereof.

(q) The Seller is not an “investment company” as defined in the Investment Company Act of 1940, as amended. The Seller is not subject to regulation as a “holding company” under the Public Utility Holding Company Act of 1935, as amended.

(r) Both before and after giving effect to (i) each Purchase to be made on the Closing Date or such other date as Purchases requested hereunder are made, (ii) the disbursement of the proceeds of any Capital Investment, (iii) the consummation of each other transaction contemplated by the other Transaction Documents and (iv) the payment and accrual of all transaction costs in connection with the foregoing, the Seller is Solvent.

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Section 4.2 Representations and Warranties of the Servicer.

The Servicer represents and warrants as follows:

(a) Each of the Servicer and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has the requisite power and authority under its Constituent Documents and applicable law to own its property and assets and to carry on its business as now conducted and is duly qualified and is in good standing and is authorized to do business in every jurisdiction where such qualification or authorization is required, except where the failure so to qualify, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(b) The Servicer has the power and authority under its Constituent Documents and applicable law to execute, deliver and carry out the provisions of the Transaction Documents to which it is a party, and all such actions have been duly and validly authorized by all necessary proceedings on its part under its Constituent Documents and applicable law.

(c) The execution, delivery and performance by the Servicer of the Transaction Documents to which it is a party, and the other transactions contemplated hereby and thereby, do not (i) violate (x) any provision of the Limited Partnership Agreement or any other agreement governing its organization and/or scope of power and authority or any applicable law, rule, regulation (including Regulation U or X) or order, writ, judgment, injunction, decree, determination or award of any Governmental Authority binding upon it, (ii) result in a breach of or constitute (alone or with notice or lapse of time or both) a material default under any indenture or any material agreement or other instrument to which it or any Material Subsidiary is a party, or by which it or any Material Subsidiary or any of its or its Material Subsidiary’s properties or assets are bound, or (iii) except for the Liens created by the Transaction Documents, result in or require the creation or imposition of any Lien upon any of its or its Material Subsidiary’s property or assets.

(d) This Agreement is, and the other Transaction Documents to which the Servicer is or will be a party when delivered will be, the legal, valid and binding obligations of such Person enforceable against such Person in accordance with their respective terms except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application from time to time affecting the rights of creditors generally and by general principles of equity, including implied obligations of good faith and fair dealing.

(e) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is or will be required in connection with the due execution, delivery and performance by the Servicer of any Transaction Document to which it is a party or any other transaction contemplated hereby or thereby, except for the filings of the financing statements referred to in Article III and except for any that have been made or any the failure to obtain, give, file or take could not reasonably be expected to result in a Material Adverse Effect.

(f) Since June 30, 2003, there has not occurred any development or event affecting, or any change in the business, assets, results of operations, financial condition or prospects of, Equistar and its Subsidiaries, taken as a whole, which has resulted or could reasonably be expected to result in a Material Adverse Effect.

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(g) There is no action, suit, investigation, litigation or proceeding at law or in equity or by or before any Governmental Authority now pending or, to its knowledge, threatened against or affecting the Servicer or any of its Subsidiaries or the businesses, assets or rights of Servicer or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and which, if adversely determined, could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect or (ii) that in any manner draws into question the validity or enforceability of any Transaction Document.

(h) No report or document or other information furnished or to be furnished at any time by or on behalf of the Servicer to the Agent or any Purchaser in connection with any Transaction Document, when taken together with all other reports, documents and information then or theretofore so furnished by or on behalf of the Servicer, including Equistar’s periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, contained, or will contain as of the date so furnished, any untrue statement of a material fact or omitted to state, or will omitted to state, as the date so furnished, a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading; provided that no representation or warranty with respect to (x) the financial projections described in Section 3.1(d)(iii), (y) any information, including financial projections, delivered pursuant to Section 3.04(b) of the Equistar Undertaking or (z) any financial statements delivered pursuant to Section 5.5(a) shall be made pursuant to this Section 4.1(h).

(i) The offices where the Servicer keeps its Records concerning the Receivable Assets are as set forth in Schedule III hereto (or, by notice to the Agent in accordance with Section 5.1(e), at such other locations in jurisdictions, within the United States, where all requested actions under Section 6.5(a) have been taken and completed).

(j) The names and addresses of all the Lock-Box Banks, together with the lock-box numbers related to, and the account numbers and owners of, the Lock-Box Accounts at such Lock-Box Banks, are specified in Schedule I hereto (or such other Lock-Box Banks and/or such other Lock-Box Accounts as have been notified to the Agent in accordance with Section 5.3(m)). Except under the Lock-Box Agreements, the Servicer has not granted any Person dominion or control of any Lock-Box Account, or the right to take dominion or control over any Lock-Box Account at a future time or upon the occurrence of a future event.

(k) (i) The Servicer and its ERISA Affiliates are in compliance in all material respects with those provisions of ERISA and the regulations and published interpretations thereunder which are applicable to it, except where noncompliance could not reasonably be expected to result in a Material Adverse Effect. No Reportable Event has occurred with respect to any Plan that could reasonably be expected to result in a Material Adverse Effect, and no unfunded liabilities exist under all of the Plans in the aggregate that could reasonably be expected to result in a Material Adverse Effect.

(ii) Neither the Servicer nor any ERISA Affiliate has incurred any Withdrawal Liability that materially and adversely affects the financial condition of it and its Subsidiaries taken as a whole or that materially and adversely impairs its ability to perform its obligations under this Agreement or any other Transaction Document to which it is a party. Neither the Servicer nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization or has been terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, where such reorganization or termination has resulted or is likely to result in an increase in the contributions required to be made to such Multiemployer Plan in an amount that could reasonably be expected to result in a Material Adverse Effect.

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(l) The Servicer has complied with the Credit and Collection Policy in all material respects and since the date of this Agreement there has been no change in the Credit and Collection Policy except as permitted hereunder. The Servicer has not extended or modified the terms of any Pool Receivable or the Contract under which any such Pool Receivable arose, except in accordance with the Credit and Collection Policy and in accordance with Section 6.2(b).

(m) No effective financing statement or other instrument similarly in effect covering any Contract or any Pool Receivable or Related Security or Collections with respect thereto is on file in any recording office, except those set forth on Schedule IV hereto and those filed in favor of the Agent relating to this Agreement or in favor of the Seller and the Agent relating to the Receivables Sale Agreement.

(n) Each of the Servicer and its Subsidiaries has filed, or caused to be filed or be included in, all tax reports and returns (federal, state, local and foreign), if any, required to be filed by it and paid, or caused to be paid, all material amounts of taxes, including interest and penalties, required to be paid by it, except for such taxes (i) as are being contested in good faith by proper proceedings and (ii) against which adequate reserves shall have been established in accordance with and to the extent required by GAAP, but only so long as the proceedings referred to in clause (i) above would not subject the Agent or any other Indemnified Party to any civil or criminal penalty or liability or involve any material risk of the loss, sale or forfeiture of any property, rights or interests included in the Pool Receivables, Related Security, Collections, Restricted Accounts or proceeds thereof.

(o) Neither the Servicer nor any of its Subsidiaries is an “investment company” as defined in, or is otherwise subject to regulation under, the Investment Company Act of 1940. Neither the Servicer nor any of its Subsidiaries is subject to regulation as a “holding company” under the Public Utility Holding Company Act of 1935.

(p) (i) Neither the Servicer nor any of its Subsidiaries is in violation of any law, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any Governmental Authority, where such violation or default could reasonably be expected to result in a Material Adverse Effect.

(ii) Neither the Servicer nor any of its Subsidiaries is in default under any provision of any indenture or other agreement or instrument evidencing Indebtedness, or any other material agreement or instrument to which it is a party or by which it or any of its properties or assets are or may be bound, where such default could reasonably be expected to result in a Material Adverse Effect.

(iii) No Potential Event of Termination or Event of Termination has occurred and is continuing.

(q) (i) The audited consolidated balance sheet of Equistar and its Consolidated Subsidiaries as of December 31, 2002 and the related consolidated statements of income, of partners’ capital and of cash flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP, and set forth in the Servicer’s 2002 annual report on Form 10-K filed with the SEC, a copy of which has been furnished to the Agent for distribution to the Purchasers, fairly present, in all material respects and in conformity with GAAP, the consolidated financial position of Equistar and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year.

(ii) The unaudited consolidated balance sheet of Equistar and its Consolidated Subsidiaries as of June 30, 2003 and the related unaudited consolidated

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statements of income and of cash flows for the six months then ended, set forth in Equistar’s quarterly report for the fiscal quarter ended June 30, 2003 on Form 10-Q filed with the SEC, a copy of which has been furnished to the Agent for distribution to the Purchasers, fairly present, in all material respects and in conformity with GAAP applied on a basis consistent with the financial statements referred to in subsection (i) of this Section 4.2(q), the consolidated financial position of Equistar and its Consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows for such six month period (subject to normal year-end adjustments).

(iii) The financial projections provided to the Agent pursuant to Section 3.1(d)(iii) and in the Confidential Information Memorandum were prepared in good faith on the basis of the assumptions described in the Confidential Information Memorandum, which assumptions were believed by the Servicer in good faith to be reasonable in light of the then current and reasonable foreseeable business conditions of Equistar and its Consolidated Subsidiaries existing at the time of preparation thereof, and the Servicer has no knowledge of any event or circumstance that would cause it to change any such assumptions in any material respect as of the date hereof, it being understood by the Agent and the Purchasers that actual results will likely vary from the projected results set forth therein.

(iv) Each financial statement delivered pursuant to Section 5.5(b) or 5.5(c) will, at the time it is delivered, present fairly, in all material respects, the financial position, results of operations or cash flows, as the case may be, of Equistar and its Consolidated Subsidiaries as of the date or for the period to which it relates in accordance with GAAP, subject in the case of quarterly statements to year-end audit adjustments.

ARTICLE V

GENERAL COVENANTS OF THE SELLER AND THE SERVICER

Section 5.1 Affirmative Covenants of the Seller.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations of the Seller remain unpaid under this Agreement, the Seller will:

(a) Compliance with Laws, Etc. Comply in all material respects with all applicable laws, rules and regulations, and all orders of any Governmental Authority applicable to it and all Pool Receivables and related Contracts, Related Security and Collections with respect thereto.

(b) Preservation of Existence. Preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign entity in each jurisdiction where the failure to preserve and maintain such qualification would materially adversely affect the interests of the Purchasers or the Agent hereunder or in the Pool Receivables and Related Security, or the ability of the Seller or the Servicer to perform their respective obligations under the Transaction Documents.

(c) Payment of Taxes. Pay and discharge before the same shall become delinquent, all lawful governmental claims, taxes, assessments, charges and levies, except where contested in good faith, by proper proceedings and adequate reserves therefor have been established on the books of the Seller in conformity with GAAP.

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(d) Compliance with Constituent Documents. Comply with, and cause compliance with, the provisions of the Constituent Documents of the Seller delivered to the Agent pursuant to Section 3.1 as the same may, from time to time, be amended, supplemented or otherwise modified with the prior written consent of the Agent.

(e) Offices, Records and Books of Accounts.

(i) Keep its principal place of business and chief executive office and the offices where it keeps its Records concerning the Pool Receivables at the address of the Seller referred to in Section 4.1(k) or, upon at least 30 days’ prior written notice to the Agent, at any other location in a jurisdiction where all requested actions under Section 6.5(a) shall have been taken;

(ii) Maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate, in all material respects, records evidencing Pool Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Pool Receivables (including, without limitation, records adequate to permit the daily identification of each Pool Receivable, the Outstanding Balance of each Pool Receivable and the dates which payments are due thereon and all Collections of and adjustments to each existing Pool Receivable).

(iii) Keep, or cause to be kept, proper books of record and account, which shall be maintained or caused to be maintained by the Seller and shall be separate and apart from those of any Affiliate of the Seller, in which entries that are full and correct in all material respects shall be made of all financial transactions and the assets and business of the Seller in accordance with GAAP;

(iv) To the extent Records are in written form, segregate such Records in file cabinets or storage containers and appropriately label such file cabinets or storage containers to reflect that the Receivable Interests have been conveyed to the Purchasers; and

(v) To the extent such Records constitute computer programs and other non-written Records, appropriately legend such Records to reflect that the Receivable Interests have been conveyed to the Purchasers.

(f) Examination of Records; Audits.

(i) From time to time upon ten (10) Business Days’ (or, during the continuance of a Triggering Event of the type described in clause (iii), (iv) or (v) of the definition of “Triggering Event”, five (5) Business Days’) prior notice (except that during the continuance of a Potential Event of Termination or Event of Termination, no such notice shall be required) and during regular business hours as requested by the Agent and at the expense of the Agent, if a Potential Event of Termination or Event of Termination does not exist, and otherwise at the expense of the Seller, permit the Agent, or its agents or representatives, (A) to examine and make copies of and abstracts from all Records in the possession or under the control of the Seller, or the agents of the Seller, relating to Pool Receivables and the Related Security, including, without limitation, the related Contracts, and (B) to visit the offices and properties of the Seller, or the agents of the Seller, for the purpose of examining such materials described in clause (A) above, and to

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discuss matters relating to Pool Receivables and the Related Security or the Seller’s performance hereunder or under the Contracts with any of the officers or employees of the Seller having knowledge of such matters and designated by the Seller to discuss such matters with the Agent or its agents or representatives. Unless a Potential Event of Termination or Event of Termination is continuing, the Agent agrees to combine any request for any such examinations and visits with any request being made under Section 5.4(f).

(ii) The Seller shall furnish to the Agent any information that the Agent may reasonably request regarding the determination and calculation of the Net Receivables Pool Balance including copies of any invoices, underlying agreements, instruments or other documents and the identity of all Obligors in respect of Receivables referred to therein.

(g) Performance and Compliance with Contracts and Credit and Collection Policy. At its expense, (i) perform, or cause to be performed, and comply in all material respects with, or cause to be complied with in all material respects, in a timely manner all provisions, covenants and other promises (if any) required to be observed by it under the Contracts related to the Pool Receivables, and comply in all material respects and in a timely manner with the Credit and Collection Policy in regard to the Pool Receivables and the related Contracts and (ii) as beneficiary of any Related Security, enforce such Related Security as reasonably requested by the Agent.

(h) Transaction Documents. At its expense, require each Originator and the Servicer to timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by them under each of the Transaction Documents, maintain each of the Transaction Documents to which it is a party in full force and effect, enforce in accordance with its terms, take all such action to such end as may be from time to time reasonably requested by the Agent, and make to any party to each of such Transaction Documents such demands and requests for information and reports or for action as the Seller is entitled to make thereunder and as may be from time to time reasonably requested by the Agent.

(i) Deposits to Lock-Box Accounts. Instruct, or cause the Servicer to instruct, all Obligors to make payments in respect of Pool Receivables to a Lock-Box Account and, if the Seller or any Originator shall otherwise receive any Collections (including, without limitation, any Collections deemed to have been received by the Seller pursuant to Section 2.9), segregate and hold in trust such Collections and deposit such Collections, or cause such Collections to be deposited, to a Lock-Box Account within 2 Business Days following such receipt.

(j) Maintenance of Separate Existence. Do all things necessary to maintain its existence separate and apart from each Originator and other Affiliates of the Seller, including, without limitation, (i) maintaining proper limited liability company records and books of account separate from those of such Affiliates; (ii) maintaining its assets, funds and transactions separate from those of such Affiliates, reflecting such assets, funds and transactions in financial statements separate and distinct from those of such Affiliates, and evidencing such assets, funds and transactions by appropriate entries in the records and books referred to in clause (i) above, and providing for its own operating expenses and liabilities from its own assets and funds other than certain expenses and liabilities relating to basic corporate overhead which may be allocated between the Seller and such Affiliates; (iii) holding such appropriate meetings or obtaining such appropriate consents of its Board of Managers as are necessary to authorize all the Seller’s actions required by law to be authorized by its Board of Managers, keeping minutes of such meetings and of meetings of its members and observing all other necessary organizational formalities (and any successor Seller shall observe similar procedures in accordance with

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its governing documents and applicable law); (iv) at all times entering into its contracts and otherwise holding itself out to the public under the Seller’s own name as a legal entity separate and distinct from such Affiliates; and (v) conducting all transactions and dealings between the Seller and such Affiliates on an arm’s-length basis.

(k) Purchase of Pool Receivables from Originators. With respect to each Pool Receivable acquired from any Originator by the Seller other than as a capital contribution, pay to such Originator (in accordance with the Receivables Sale Agreement) an amount which constitutes fair consideration and approximates fair market value for such Pool Receivable and in a sale the terms and conditions of which (including, without limitation, the purchase price thereof) reasonably approximates an arm’s-length transaction between unaffiliated parties.

Section 5.2 Reporting Requirements of the Seller.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations of the Seller remain unpaid under this Agreement, the Seller will furnish to the Agent for distribution to the Purchasers:

(a) Annual Reports. Within 100 days after the end of each Fiscal Year, financial statements (which shall include a balance sheet and income statement, as well as statements of member’s equity and cash flow) showing the financial condition and results of operations of the Seller as of the end of and for such Fiscal Year, in each case certified by a Responsible Officer of the Seller as presenting fairly, in all material respects, the financial position and results of operation of the Seller and as having been prepared in accordance with GAAP, together with a certificate of such Responsible Officer stating that such financial statements present fairly, in all material respects, the financial position of the Seller as at the dates indicated and the results of their operations and cash flow for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except for changes that shall have been disclosed in the notes to the financial statements).

(b) Notice of Event of Termination. Promptly and in any event within 2 Business Days after a Responsible Officer of the Seller first becomes aware of each Event of Termination or Potential Event of Termination continuing on the date of such statement, a statement of a Responsible Officer of the Seller setting forth details of such Event of Termination or Potential Event of Termination and the action which the Seller has taken and proposes to take with respect thereto.

(c) Other. Promptly, from time to time, such other information, documents, records or reports respecting this Agreement or the other Transaction Documents, the Receivables, the Related Security, the Contracts, the Restricted Accounts or the condition or operations, financial or otherwise, of the Seller as the Agent may from time to time reasonably request.

Section 5.3 Negative Covenants of the Seller.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations of the Seller remain unpaid under this Agreement, the Seller will not:

(a) Indebtedness. Except as otherwise provided herein or in the Receivables Sale Agreement, create, incur, assume or suffer to exist any Indebtedness, other than (i) Indebtedness of the Seller representing fees, expenses and indemnities arising hereunder or under the Receivables Sale Agreement for the purchase price of the Receivables under the Receivables Sale Agreement, and (ii) other Indebtedness of the Seller incurred in the ordinary course of its business in an amount not to exceed $9,500 at any time outstanding.

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(b) Sales, Liens, Etc. Except as otherwise provided herein, sell, lease, transfer, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Lien upon or with respect to any of its properties or assets, whether now owned or hereafter acquired, including, but not limited to, its undivided interest in any Pool Receivable or Related Security or Collections in respect thereof, or upon or with respect to any related Contract or any Deposit Account to which any Collections of any Pool Receivable are sent (including, without limitation, any Lock-Box Account), or assign any right to receive income in respect thereof.

(c) Investments. Except as otherwise provided herein or in the Receivables Sale Agreement, directly or indirectly make or maintain any Investment.

(d) Restricted Payments. Directly or indirectly, declare, order, pay, make or set apart any sum for any redemption, retirement or cancellation of the Seller’s Equity Interests or any Subordinated Note other than pursuant to or in accordance with the Transaction Documents.

(e) Merger, Etc. Consolidate with or merge into any other Person, acquire all or substantially all of the Stock or Stock Equivalents of any Person, acquire all or substantially all of the assets of any Person or all or substantially all of the assets constituting the business of a division, branch or other unit operation of any Person, enter into any joint venture or partnership with any Person or acquire or create any subsidiary.

(f) Change in Credit and Collection Policy.

Make any changes in the Credit and Collection Policy that would be reasonably likely to impair the collectibility of the Pool Receivables.

(g) Organizational Documents; Change of Name, Etc.

(i) Amend, supplement or otherwise modify any of its Constituent Documents.

(ii) Change its name, identity, form of legal structure or jurisdiction of organization, unless, prior to the effective date of any such change, the Seller delivers to the Agent (x) UCC financing statements necessary to reflect such change and to continue the perfection of the ownership interests in the Receivable Interests contemplated by this Agreement and (y) if the identity or structure of the Seller has changed and such change adversely affects the rights of the Agent under then existing Lock-Box Agreements and other control agreements with the Seller to take control of the Lock-Box Accounts and other Restricted Accounts pursuant to Section 6.3(a), new Lock-Box Agreements and other control agreements executed by the Seller and the relevant banks, to the extent necessary to reflect such changes and to continue to enable the Agent to exercise such rights.

(h) Accounting. Account for (including for accounting and tax purposes) or otherwise treat the transactions contemplated by the Receivables Sale Agreement in any manner other than as sales of Receivables by any Originator to the Seller, or account for (other than for tax purposes) or otherwise treat the transactions contemplated by this Agreement in any manner other than as sales of Receivable Interests by the Seller to the Agent for the account of the Purchasers.

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(i) Affiliate Transactions. Except as contemplated or permitted by the Transaction Documents, enter into any other transaction directly or indirectly with or for the benefit of any Affiliate of the Seller.

(j) ERISA. Adopt, maintain, contribute to or incur or assume any obligation with respect to any Plan, Multiemployer Plan or Welfare Plan, except such obligation or contingent obligation that arises as a matter of law solely as a result of an ERISA Affiliate’s sponsorship of a Plan, Multiemployer Plan or Welfare Plan.

(k) Lease Obligations. Create, incur, assume or suffer to exist any obligations as lessee for the rental or lease of real or personal property, other than for the lease or rental of an office space or office equipment for use by the Seller in the ordinary course of its business.

(l) Extension or Amendment of Receivables. Except as otherwise permitted in Section 6.2, extend, amend or otherwise modify the terms of any Pool Receivable, or amend, modify or waive any term or condition of any Contract related thereto.

(m) Change in Payment Instructions to Obligors. Add or terminate any bank as a Lock-Box Bank or any Deposit Account as a Lock-Box Account from those listed in Schedule I, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box Account, unless the Agent shall have received at least 20 days’ prior written notice of such addition, termination or change and shall have received, with respect to each new Lock-Box Account, a Lock-Box Agreement executed by the Lock-Box Bank that maintains such Lock-Box Account and the Seller or any Originator, as applicable.

(n) Deposits to Lock-Box Accounts. Deposit or otherwise credit, or cause or grant any permission to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Pool Receivables.

(o) Receivables Sale Agreement. (i) Cancel or terminate the Receivables Sale Agreement or consent to or accept any cancellation or termination thereof, (ii) amend, supplement or otherwise modify any term or condition of the Receivables Sale Agreement or give any consent, waiver or approval thereunder, (iii) waive any default under or breach of the Receivables Sale Agreement or (iv) take any other action under the Receivables Sale Agreement not required by the terms thereof that would impair the value of any Receivable Assets (as defined therein) or the rights or interests of the Seller thereunder or of the Agent or any Purchaser or Indemnified Party hereunder or thereunder.

Section 5.4 Affirmative Covenants of the Servicer.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations of the Seller remain unpaid under this Agreement, the Servicer shall:

(a) Existence.

Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence.

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(b) Compliance with Laws, Etc.

Comply with all applicable laws, rules, and regulations and all orders of any Governmental Authority applicable to it and all Pool Receivables and related Contracts, Related Security and Collections with respect thereto to the extent noncompliance could reasonably be expected to result in a Material Adverse Effect.

(c) Business and Properties. Except to the extent the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, at all times (a) do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect the rights, licenses, permits, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business; and (b) maintain, preserve and protect all property material to the conduct of such business.

(d) Payment of Taxes. Pay and discharge all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property before the same shall become delinquent or in default, as well as all lawful material claims for labor, materials and supplies or otherwise, which, if unpaid, might give rise to liens or charges upon such properties or any part thereof, unless and to the extent that any such tax, assessment, charge, levy or claim is being contested in good faith by appropriate proceedings and adequate reserves are being maintained on its books with respect thereto to the extent required by GAAP.

(e) Books of Accounts.

(i) To the extent Records are (A) in written form, segregate such Records in file cabinets or storage containers and appropriately label such file cabinets or storage containers to reflect that the Receivable Interests have been conveyed to the Purchasers, or (B) constitute computer programs and other non-written Records, appropriately legend such Records to reflect that the Receivable Interests have been conveyed to the Purchasers.

(ii) Maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate, in all material respects, records evidencing Pool Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Pool Receivables (including, without limitation, records adequate to permit the daily identification of each Pool Receivable, the Outstanding Balance of each Pool Receivable and the dates which payments are due thereon and all Collections of and adjustments to each existing Pool Receivable).

(f) Examination of Records; Audits.

(i) From time to time upon ten (10) Business Days’ (or, during the continuance of a Triggering Event of the type described in clause (iii), (iv) or (v) of the definition of “Triggering Event”, five (5) Business Days’) prior notice (except that during the continuance of a Potential Event of Termination or Event of Termination, no such notice shall be required) and during regular business hours as requested by the Agent and at the expense of the Agent, if a Potential Event of Termination or Event of Termination does not exist, and otherwise at the expense of the Servicer, permit the Agent, or its agents or representatives, (A) to examine and make copies of and abstracts from all Records in the possession or under the control of any Originator, the Servicer or their respective Affiliates or the agents of such Originator, the Servicer or their respective Affiliates, relating to Pool Receivables and the Related Security, including, without

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limitation, the related Contracts, and (B) to visit the offices and properties of any Originator, the Servicer, their respective Affiliates (other than the Seller) or the agents of such Originator, the Servicer or their respective Affiliates, for the purpose of examining such materials described in clause (a) above, and to discuss matters relating to Pool Receivables and the Related Security or the Servicer’s performance hereunder or under the Contracts with any of the officers or employees of the Servicer having knowledge of such matters and designated by the Servicer to discuss such matters with the Agent or its agents or representatives. Unless a Potential Event of Termination or Event of Termination is continuing, the Agent agrees to combine any request for any such examinations and visits with any request being made under Section 5.1(f).

(ii) The Agent may (at its own election or at the request of the Required Purchasers), at the Servicer’s sole cost and expense, make test verifications and other evaluations of the Receivables in any manner and through any medium that the Agent considers advisable, and the Servicer shall furnish all such assistance and information as the Agent may require in connection therewith; provided that, unless a Potential Event of Termination or an Event of Termination has occurred and is continuing, the Agent shall conduct no more than four such evaluations pursuant to this Section during any calendar year. The Servicer shall pay the documented fees and expenses of employees or other representatives of the Agent in connection with such evaluations. In-house examination charges shall be limited to an amount up to $1,000 per day per examiner (employee or representative) plus such examiner’s reasonable out-of-pocket expenses, including travel expenses, incurred in connection with such evaluation. The Agent shall furnish to each Purchaser a copy of the final written report prepared in connection with any such evaluation and shall provide the Servicer and the Seller with a summary of the analysis of the Receivables contained in any such final written report not less than two Business Days prior to delivery thereof to the Purchasers.

(iii) The Servicer shall furnish to the Agent any information that the Agent may reasonably request regarding the determination and calculation of the Net Receivables Pool Balance including correct and complete copies of any invoices, underlying agreements, instruments or other documents and the identity of all Obligors in respect of Receivables referred to therein.

(g) Performance and Compliance with Contracts and Credit and Collection Policy. At its own expense, timely and fully (i) perform, or cause to be performed, and comply in all material respects with, or cause to be complied with in all material respects, all provisions, covenants and other promises required to be observed by it under the Contracts related to the Pool Receivables, and timely and fully comply in all material respects with the Credit and Collection Policy in regard to the Pool Receivables and the related Contracts and (ii) as beneficiary of any Related Security, enforce and cause each other Originator to enforce such Related Security as reasonably requested by the Agent.

(h) Transaction Documents. At its expense, maintain each of the Transaction Documents to which it is a party in full force and effect, enforce in accordance with its terms, take all such action to such end as may be from time to time reasonably requested by the Agent, and make to any party to each of such Transaction Documents such demands and requests for information and reports or for action as it is entitled to make thereunder and as may be from time to time reasonably requested by the Agent.

(i) Deposits to Lock-Box Accounts. Instruct all Obligors to make payments in respect of Pool Receivables to a Lock-Box Account and, if the Servicer shall otherwise receive any

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Collections (including, without limitation, any Collections deemed to have been received by the Seller pursuant to Section 2.9), segregate and hold in trust such Collections and deposit such Collections, or cause such Collections to be deposited, to a Lock-Box Account within 2 Business Days following such receipt.

(j) ERISA. (i) Comply in all material respects with the applicable provisions of ERISA, except where noncompliance could not reasonably be expected to result in a Material Adverse Effect, and (ii) furnish to the Agent (x) as soon as possible, and in any event within 30 days after any Responsible Officer of the Servicer knows that any Reportable Event has occurred that alone or together with any other Reportable Event could reasonably be expected to result in liability of the Servicer or any Subsidiary to the PBGC in an amount that could reasonably be expected to result in a Material Adverse Effect, a statement of a Principal Financial Officer setting forth details as to such Reportable Event and the action proposed to be taken with respect thereto, together with a copy of the notice, if any, of such Reportable Event given to the PBGC, (y) promptly after receipt thereof, a copy of any notice that the Servicer or any Subsidiary may receive from the PBGC of an intent to terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code) or to appoint a trustee to administer any Plan or Plans and (z) promptly and in any event within 30 days after receipt thereof by the Servicer or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy of each notice concerning (A) the imposition of any Withdrawal Liability in an amount that could reasonably be expected to result in a Material Adverse Effect or (B) a determination that a Multiemployer Plan is, or is expected to be, terminated or in reorganization, both within the meaning of Title IV of ERISA, which, in each case, is expected to result in an increase in annual contributions of the Servicer or any Subsidiary to such Multiemployer Plan in an amount that could reasonably be expected to result in a Material Adverse Effect.

Section 5.5 Reporting Requirements of the Servicer.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital Investment shall be outstanding and no Yield or other Obligations of the Seller remain unpaid under this Agreement, the Servicer shall furnish to the Agent for distribution to the Purchasers:

(a) Monthly Reports. During the existence of a Triggering Event, within 30 days after the end of each of the first two fiscal months in each fiscal quarter of Equistar, unaudited consolidated financial statements (which shall include a balance sheet and income statement, as well as statements of partners’ equity and cash flow) showing the financial condition and results of operation of Equistar and its Consolidated Subsidiaries as of the end of and for such fiscal month and that portion of the current Fiscal Year ending as of the close of such month, in each case certified by a Principal Financial Officer of Equistar as being the same monthly financial statements generated in accordance with Equistar’s normal procedures and submitted to management of Equistar. The Agent and the Purchasers acknowledge that any monthly unaudited consolidated financial statements furnished pursuant to this Section 5.5(a) will not be accompanied by the footnotes and other disclosures that would be necessary for fair presentation in accordance with GAAP.

(b) Quarterly Reports. Subject to the last paragraph of this Section 5.5, within 55 days after the end of each of the first three fiscal quarters of each Fiscal Year, unaudited consolidated financial statements (which shall include a balance sheet and income statement, as well as statements of partners’ equity and cash flow) showing the financial condition and results of operations of Equistar and its Consolidated Subsidiaries as of the end of and for such fiscal quarter, in each case certified by a Principal Financial Officer of Equistar as presenting fairly, in all material respects, the financial position and results of operations of Equistar and its Consolidated Subsidiaries and as having been prepared in accordance with the rules and regulations of the SEC applicable to quarterly reports on Form 10-Q.

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(c) Annual Reports. Subject to the last paragraph of this Section 5.5, within 100 days after the end of each Fiscal Year, consolidated and consolidating financial statements (which shall include a balance sheet and income statement, as well as statements of partners’ equity and cash flows) showing the financial condition and results of operations of the Servicer and its Consolidated Subsidiaries as of the end of and for such Fiscal Year. The consolidated financial statements of the Servicer and its Consolidated Subsidiaries delivered pursuant to this paragraph will be audited and reported on by independent public accountants of recognized standing and shall be accompanied by a statement of such firm of independent public accountants stating whether during the course of their examination of such financial statements they obtained knowledge of any Potential Event of Termination or any Event of Termination existing on the date of such statements (which statement may be limited to the extent required by accounting rules or guidelines, including the rules and guidelines of the public accounting firm giving such statements).

(d) Principal Financial Officer’s Certification. Concurrently with (b) and (c) above, a certificate of a Principal Financial Officer of the Servicer,

(i) certifying that to the best knowledge of such Principal Financial Officer no Potential Event of Termination or Event of Termination has occurred and is continuing or, if a Potential Event of Termination or Event of Termination has occurred and is continuing, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto; and

(ii) solely in the case of (c) above, certifying that except as previously notified to the Agent pursuant to Section 5.3(g) or Section 5.6(b) there has been no change in any Transaction Party’s name, form of organization, jurisdiction of organization and organizational number or Federal Taxpayer Identification Number.

(e) Public Reports. Subject to the last paragraph of this Section 5.5, promptly after the same shall have been filed or furnished as described below, copies of such registration statements, annual, periodic and other reports, and such proxy statements and other information, if any, as shall be filed by Equistar or any Subsidiary with the SEC pursuant to the requirements of the Securities Act of 1933 or the Securities Exchange Act of 1934 or the rules promulgated thereunder.

(f) Seller Report. On or prior to the tenth Business Day of each calendar month:

(i) a Seller Report relating to each Receivable Interest, as of the close of business of the Servicer on the last day of the immediately preceding calendar month;

(ii) a listing of the ten Obligors owing the greatest dollar amount of Pool Receivables, together with a report setting forth (A) the name of such Obligor, (B) the balance of the Pool Receivables owing by such Obligor as of such date, and (C) a summary of credit terms applicable to such Pool Receivables under the applicable Contract;

(iii) a listing by Obligor of all Pool Receivables, together with an analysis as to the aging of such Receivables, as of such last day; and

(iv) such other information as shall be reasonably requested from time to time by the Agent or by the Agent at the request of the Required Purchasers;

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provided that during the existence of a Triggering Event, on the second Business Day of each calendar week, the Servicer shall deliver a Seller Report relating to each Receivable Interest as of the close of business on the last day of the immediately preceding calendar week, except that, to the extent the information otherwise required to be set forth in a monthly Seller Report is not generally available to the Servicer on a weekly basis, the Seller Report shall be prepared on the basis of the aggregate amount of Collections from the Pool Receivables received by or on behalf of the Servicer as of the end of the immediately preceding calendar week and the aggregate of sales and billings of each Originator as of the end of the immediately preceding calendar week and otherwise on the basis of the applicable information contained in the most recent monthly Seller Report received by the Agent.

(g) Net Receivables Pool Balance Report. As soon as possible and in any event within 2 Business Days after a Responsible Officer of the Servicer first becomes aware that any of the following is true: (i) the Net Receivables Pool Balance is less than 75% of the Net Receivables Pool Balance reflected in the most recent Seller Report delivered pursuant to clause (f) above, or (ii) the Net Receivables Pool Balance is less than 105% of the Required Net Receivables Pool Balance (giving effect to any calculated reduction in Capital by an amount equal to the amount on deposit in the Cash Assets Account that is available for application therefor pursuant to Section 2.6(a)(iii) or (iv) or Section 2.7(a)(iii) or (iv), as applicable, as of the close of business on the relevant day of determination), or (iii) the outstanding Capital exceeds the Net Receivables Pool Balance as a result of a decrease therein, a statement of a Responsible Officer of the Servicer setting forth details of such event and, in the case of clause (iii) such notice shall also include the amount of such excess.

(h) Litigation, etc. Give the Agent prompt written notice (which the Agent shall promptly deliver to the Purchasers) after any Responsible Officer learns of the following:

(i) the issuance by any Governmental Authority of any injunction, order, decision or other restraint prohibiting, or having the effect of prohibiting, the transactions contemplated by the Transaction Documents, including the making of the Capital Investments, or having the effect of invalidating any provision of this Agreement or any other Transaction Document or the initiation of any litigation or similar proceeding seeking any such injunction, order, decision or other restraint;

(ii) the filing or commencement of any action, suit or proceeding against any Transaction Party or any Subsidiary, whether at law or in equity or by or before any Governmental Authority or any arbitrator, as to which action, suit or proceeding there is a reasonable possibility of an adverse determination and which, if determined adversely to such Transaction Party or any Subsidiary, could reasonably be expected to result in a Material Adverse Effect;

(iii) the occurrence of any development or event or any change in the business, assets, results of operations or prospects of Equistar and its Subsidiaries, taken as a whole, which could reasonably be expected to result in a Material Adverse Effect; and

(iv) the existence of (i) any Triggering Event or (ii) any Potential Event of Termination or Event of Termination, specifying the nature and extent thereof and the action (if any) which is proposed to be taken with respect thereto.

(i) Information Regarding the Servicer. Give the Agent at least 20 days’ prior written notice of any proposal to change the Servicer’s (i) name, (ii) form of organization, (iii) jurisdiction of organization, (iv) organizational number or (v) Federal Taxpayer Identification Number.

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(j) Other. Promptly, from time to time, such other information, documents, records or reports respecting this Agreement or the other Transaction Documents, the Receivables, the Related Security, the Contracts, the Restricted Accounts or the condition or operations, financial or otherwise, of any Transaction Party as the Agent may from time to time reasonably request.

Information required to be delivered pursuant to Sections 5.5(b), 5.5(c) and 5.5(e) shall be deemed to have been delivered on the date on which the Servicer provides notice to the Agent that such information has been posted on Equistar’s website on the Internet at www.equistarchem.com, at sec.gov or at another website identified in such notice and accessible by the Purchasers without charge; provided that (i) such notice may be included in a certificate delivered pursuant to Section 5.5(d), (ii) the certification referred to in Section 5.5(b) shall be deemed made on the date on which the Servicer provides notice to the Agent (as contemplated above) that the information referred to in such paragraph has been posted as described above and (iii) the Servicer shall deliver paper copies of the information referred to in Sections 5.5(b), 5.5(c) and 5.5(e) to the Agent for distribution to (x) any Purchaser to which the above referenced websites are for any reason not available if such Purchaser has so notified the Servicer and (y) any Purchaser that has notified the Servicer that it desires paper copies of all such information.

Section 5.6 Negative Covenants of the Servicer.

Until the later of (i) the Termination Date and (ii) the date upon which no Capital shall be outstanding and no Yield or other Obligations of the Seller remain unpaid under this Agreement, the Servicer shall not:

(a) Change in Business Lines or Credit and Collection Policy. Make any change in the character of its business or in the Credit and Collection Policy that would, in either case, be reasonably likely to impair the collectibility of the Pool Receivables.

(b) Organizational Documents; Change of Name, Etc.

(i) Amend, supplement or otherwise modify the Constituent Documents of the Seller.

(ii) Change, or cause any other Transaction Party to change, its name, identity, form of legal structure or jurisdiction of organization, unless, prior to the effective date of any such change, the Servicer delivers to the Agent (x) UCC financing statements necessary to reflect such change and to continue the perfection of the ownership interests in the Receivable Interests contemplated by this Agreement and (y) if the identity or structure of a Transaction Party has changed and such change adversely affects the rights of the Agent under then existing Lock-Box Agreements or other control agreements with such Transaction Party to take control of the Lock-Box Accounts and other Restricted Accounts pursuant to Section 6.3(a), new Lock-Box Agreements and other control agreements executed by such Transaction Party and the relevant banks, to the extent necessary to reflect such changes and to continue to enable the Agent to exercise such rights.

(c) Accounting. Cause or permit the Seller to account for (including for accounting and tax purposes) or otherwise treat the transactions contemplated by the Receivables Sale Agreement in any manner other than as sales of Receivables by any Originator to the Seller, or to account for (other than for tax purposes) or otherwise treat the transactions contemplated by this Agreement in any manner other than as sales of Receivable Interests by the Seller to the Agent for the account of the Purchasers.

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(d) Extension or Amendment of Receivables. Except as otherwise permitted in Section 6.2, extend, amend or otherwise modify the terms or Outstanding Balance of any Pool Receivable, or extend, amend, modify or waive any term or condition of any Contract related thereto.

(e) Change in Payment Instructions to Obligors. Add or terminate any bank as a Lock-Box Bank or any Deposit Account as a Lock-Box Account from those listed in Schedule I, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box Account, unless the Agent shall have received at least 20 days’ prior written notice of such addition, termination or change and shall have received, with respect to each new Lock-Box Account, a Lock-Box Agreement executed by the Lock-Box Bank that maintains such Lock-Box Account and the Seller or any Originator, as applicable.

(f) Deposits to Lock-Box Accounts. Deposit or otherwise credit, or cause or grant permission to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Pool Receivables.

(g) Voluntary Petitions. Cause the Seller to file a voluntary petition under the U.S. Bankruptcy Code or any other bankruptcy or insolvency laws so long as the Seller is not “insolvent” within the meaning of the U.S. Bankruptcy Code, and unless, and only unless, such filing has been authorized in accordance with the Seller’s Constituent Documents.

(h) Maintenance of Seller’s Separate Existence. Take any action, or omit to take any action, if the effect is to cause the Seller to fail to perform or observe in any material respect the covenants contained in Section 5.1(d) and Section 5.1(j) above or to otherwise cause the Seller not to be considered as legal entity separate and distinct from Equistar or any other Affiliates.

ARTICLE VI

ADMINISTRATION AND COLLECTION

Section 6.1 Designation of Servicer.

(a) The Pool Receivables shall be serviced, administered and collected by the Person (the “Servicer”) designated to do so from time to time in accordance with this Section 6.1. Until the Agent designates a new Servicer in accordance with Section 6.1(c), Equistar is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms hereof.

(b) The Servicer may subcontract with each Originator to service, administer or collect the Pool Receivables that any Originator creates, and may, with the prior consent of the Agent (such consent not to be unreasonably withheld or delayed), subcontract with any other Person to service, administer or collect the Pool Receivables, provided that such other Originator or other Person with whom the Servicer so subcontracts shall not become the Servicer hereunder and the Servicer shall remain liable for the performance of the duties and obligations of the Servicer pursuant to the terms hereof.

(c) The Agent may at any time following the occurrence of an Event of Termination designate as Servicer any Person (including itself) to succeed Equistar or, as the case may be, any successor Servicer, if such Person (other than itself) shall agree in writing to perform the duties and obligations of the Servicer pursuant to the terms hereof.

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Section 6.2 Duties of Servicer.

(a) The Servicer shall take or cause to be taken all such commercially reasonable actions as may be necessary or advisable to collect each Pool Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy. Each of the Seller, the Purchasers and the Agent hereby appoints as its agent the Servicer, from time to time designated pursuant to Section 6.1, to enforce its respective rights and interests in and under the Pool Receivables, the Related Security and the related Contracts.

(b) Unless an Event of Termination shall have occurred and be continuing, the Servicer may, in accordance with the Credit and Collection Policy, (i) extend the maturity or adjust the Outstanding Balance of any Receivable as the Servicer may determine to be appropriate to maximize Collections thereof, (ii) extend the term of any Contract and (iii) amend, modify or waive any other terms and conditions of any Contract.

(c) The Servicer shall administer the Collections in accordance with the procedures described herein and in Sections 2.6, 2.7, 2.8 and 2.9. The Servicer shall as soon as practicable following receipt, turn over to the Seller any cash collections or other cash proceeds received with respect to Receivables not constituting Pool Receivables.

(d) The Servicer shall hold in trust for the Seller and each Purchaser, in accordance with their respective interests, all Records that evidence or relate to the Pool Receivables. The Servicer shall, upon the occurrence and during the continuance of any Event of Termination, and at the request of the Agent, provide to the Agent the Records with respect to the Pool Receivables, provided that, in the case of Records consisting of computer programs, data processing software and any other intellectual property under license from third parties, the Servicer will make available such Records only to the extent that the license for such property so permits.

Section 6.3 Rights of the Agent.

(a) The Seller and the Servicer each hereby transfer to the Agent the exclusive dominion and control of (x) the Lock-Box Accounts to which the Obligors of Pool Receivables shall make payments and (y) the other Restricted Accounts, and shall take any further action that the Agent may reasonably request to effect such transfer.

(b) At any time during the continuance of an Event of Termination:

(i) The Agent may notify, at the Seller’s expense, the Obligors of Pool Receivables, or any of them, of the ownership of Receivable Interests by the Purchasers.

(ii) The Agent may direct the Obligors of Pool Receivables, or any of them, to make payment of all amounts due or to become due to the Seller under any Pool Receivable directly to the Agent or its designee.

(iii) The Seller and the Servicer each shall, at the Agent’s request and at the Seller’s and the Servicer’s expense, give notice of such ownership to such Obligors and direct them to make such payments directly to the Agent or its designee.

(iv) The Seller and the Servicer each shall, at the Agent’s request, (A) assemble, and make available to the Agent at a place reasonably selected by the Agent or

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its designee, all of the Records which evidence or relate to the Pool Receivables, and the related Contracts and Related Security, or which are otherwise necessary or desirable to collect the Pool Receivables, provided that, in the case of Records consisting of computer programs, data processing software and any other intellectual property under license from third parties, the Servicer will make available such Records only to the extent that the license for such property so permits, and provided, further, that during the continuance of a Potential Event of Termination, the Seller and the Servicer each shall, at the Agent’s request, commence the process of assembling such Records, and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections or other proceeds of Pool Receivables in a manner reasonably acceptable to the Agent and shall, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Agent or its designee.

(v) The Agent may take any and all commercially reasonable steps in the Seller’s or the Servicer’s name and on behalf of the Seller and the Purchasers necessary or desirable, in the determination of the Agent, to collect all amounts due under any and all Pool Receivables, including, without limitation, endorsing the Seller’s, or the Servicer’s name on checks and other instruments representing Collections or other proceeds of Pool Receivables, enforcing such Pool Receivables and the related Contracts, and adjusting, settling or compromising the amount or payment thereof, in the same manner and to the same extent as the Seller or the Servicer might have done.

(c) At any time during the continuance of a Triggering Event, the Agent may, upon the instructions of the Required Purchasers and at the Seller’s expense, request any of the Obligors of Pool Receivables to confirm the Outstanding Balance of such Obligor’s Pool Receivables.

Section 6.4 Responsibilities of the Seller.

Anything herein to the contrary notwithstanding:

(a) The Seller and the Servicer each shall perform all of its obligations under the Contracts related to the Pool Receivables to the same extent as if Receivable Interests had not been sold hereunder and the exercise by the Agent of its rights hereunder shall not release the Seller or the Servicer from such obligations or its obligations with respect to Pool Receivables or under the related Contracts; and

(b) Neither the Agent nor the Purchasers shall have any obligation or liability with respect to any Pool Receivables or related Contracts, nor shall any of them be obligated to perform any of the obligations of the Seller or any Originator thereunder.

Section 6.5 Further Assurances.

(a) The Seller and the Servicer each agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary, or that the Agent may reasonably request, in order to perfect, protect or more fully evidence or maintain the validity and effectiveness of the Receivable Interests purchased by the Purchasers hereunder, to carry out more effectively the purposes of the Transaction Documents and to enable any of them or the Agent to exercise and enforce any of their respective rights and remedies under the Transaction Documents. Without limiting the generality of the foregoing, the Seller and the Servicer each will upon the request of the Agent, in order to perfect, protect or evidence such Receivable Interests: (i) file or cause to be filed such financing or continuation statements, or amendments thereto or

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assignments thereof, and such other instruments or notices, as may be necessary, or as the Agent may reasonably request; (ii) from and after April 1, 2004, mark conspicuously each invoice evidencing each Pool Receivable with a legend stating that such Pool Receivable and related Contract has been sold, transferred and assigned to the Seller; and (iii) mark its master data processing records evidencing such Pool Receivables and related Contracts with such legend. The Servicer also agrees to provide to the Agent, from time to time upon request, evidence reasonably satisfactory to the Agent as to the perfection and priority of the Liens created or intended to be created by the Transaction Documents.

(b) The Seller hereby authorizes the Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relating to all or any of the Contracts, or Pool Receivables and the Related Security and Collections with respect thereto, now existing or hereafter arising, without the signature of the Seller where permitted by law. A photocopy or other reproduction of this Agreement or any financing statement covering all or any of the Contracts, or Pool Receivables and the Related Security and Collections with respect thereto shall be sufficient as a financing statement where permitted by law.

(c) If the Servicer or the Seller fails to perform any agreement contained herein, then after notice to the Servicer or the Seller, as applicable, the Agent may itself perform, or cause performance of, such agreement, and the reasonable costs and expenses of the Agent incurred in connection therewith shall be payable by the Seller under Section 10.1 or Section 11.5, as applicable.

ARTICLE VII

EVENTS OF TERMINATION

Section 7.1 Events of Termination.

If any of the following events (“Events of Termination”) shall occur and be continuing:

(a) The Seller or the Servicer shall fail to make any payment or deposit to be made by it hereunder when due and, except for deposits in respect of Capital, such failure shall continue for a period of at least five consecutive days; or

(b) Any representation or warranty made or deemed made by any Transaction Party (or any of their respective officers) under or in connection with this Agreement or any other Transaction Document or in any Seller Report, or Receivables Report or any other written report, certificate or information delivered by or on behalf of the Seller or any Originator or the Servicer (or any of their respective officers) pursuant hereto or thereto, shall prove to have been incorrect in any material respect when made or deemed made or delivered; provided, however, that any such breach of a representation or warranty or any such inaccuracy that relates to a specific Pool Receivable shall not constitute an Event of Termination under this Section 7.1(b) if such breach or inaccuracy gives rise to an obligation of the Seller to make a payment under Section 2.9(c) in respect of the affected Pool Receivable and the Seller has made such payment in accordance with Section 2.9(c) and, after giving effect to such payment and, if applicable, any calculated reduction in Capital by an amount on deposit in the Cash Assets Account that is available for application therefor pursuant to Section 2.6 or 2.7, as applicable, the aggregate Receivable Interests would not exceed 100%; or

(c) (i) The Seller or the Servicer, as applicable, shall fail to perform or observe any term, covenant or agreement contained in Section 5.1(b), 5.1(f), 5.1(i), 5.1(j), 5.3, 5.4(a), 5.4(f), 5.4(i), 5.5(f), 5.5(g), 5.5(h), 5.6 or 6.5 of this Agreement; provided, however, that a default under Section 5.3(b) shall not constitute an Event of Termination under this Section 7.1(c)(i) if such default relates to a specific

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Pool Receivable and gives rise to an obligation of the Seller to make a payment under Section 2.9(c) in respect of the affected Pool Receivable and the Seller has made such payment in accordance with Section 2.9(c) and, after giving effect to such payment and, if applicable, any calculated reduction in Capital by an amount on deposit in the Cash Assets Account that is available for application therefor pursuant to Section 2.6 or 2.7, as applicable, the aggregate Receivable Interests would not exceed 100%; (ii) any Originator shall fail to perform or observe any term, covenant or agreement contained in Section 4.01(g), 4.01(i), 4.02 (f) or 4.03 of the Receivables Sale Agreement; (iii) Equistar shall fail to perform or observe any term, covenant or agreement contained in Section 3.01 or any of Sections 4.01 through 4.13, inclusive, of the Equistar Undertaking; (iv) (x) the Servicer shall fail to observe or perform any term, covenant or agreement contained in any of Sections 5.5(a) through 5.5(e) or Section 5.5(h) or 5.5(i) of this Agreement, (y) any Originator shall fail to observe or perform any term, covenant or agreement contained in Section 4.02 (excluding Section 4.02(f)) of the Receivables Sale Agreement, or (z) Equistar shall fail to perform or observe any term, covenant or agreement contained in Section 3.03 or 3.04 of the Equistar Undertaking, and, in such case, such failure shall continue for a period of five days; or (v) any Transaction Party shall fail to perform or observe any other term, covenant or agreement contained in any Transaction Document on its part to be performed or observed and any such failure shall remain unremedied for 30 days after the earlier of (A) the date on which a Responsible Officer of any Transaction Party becomes aware of such failure and (B) the date on which written notice thereof shall have been given to the Seller by the Agent or any Purchaser; or

(d) (i) default shall be made or another event shall occur with respect to any Indebtedness in an aggregate principal amount in excess of $50,000,000 of any Transaction Party or any Subsidiary if the effect of any such default or other event shall be to accelerate, or to permit the holder or obligee of any Indebtedness (or any trustee on behalf of such holder or obligee) to accelerate (with or without the giving of notice or lapse of time or both), such Indebtedness; or (ii) any amount of principal of or interest on any Indebtedness of any Transaction Party or any Subsidiary in an aggregate principal amount in excess of $50,000,000, shall not be paid when due, whether at maturity, by acceleration or otherwise (after giving effect to any period of grace specified in the instrument evidencing or governing such Indebtedness); or (iii) without limiting the rights of the Agent or the Purchasers under clauses (d)(i) and (d)(ii) above, any Transaction Party (other than the Seller) or any Subsidiary shall default in the payment of principal of any Indebtedness, which principal, individually or in the aggregate with other defaulted principal, shall be in excess of $15,000,000, when due and payable (after giving effect to any period of grace specified in the instrument evidencing or governing such Indebtedness), or the principal of such Indebtedness in excess of $15,000,000 shall be declared due and payable prior to the date on which it would otherwise be due and payable and such acceleration shall not have been rescinded or annulled within five Business Days of such acceleration; or an “Event of Default” shall exist under (and as defined in) the ABF Agreement; or a “Receivables Termination Notice” shall have been delivered under (and as defined in) the Intercreditor Agreement; or

(e) Any Purchase shall for any reason (other than pursuant to the terms hereof) cease to create, or any Receivable Interest shall for any reason cease to be, a valid and perfected first priority undivided percentage ownership interest or security interest to the extent of the pertinent Receivable Interest in each applicable Pool Receivable and the Related Security and Collections with respect thereto, except by reason of action taken voluntarily by the Agent, or the failure by the Agent to take action required to be taken by it under the Transaction Documents; provided, however, that any such event that relates to a specific Pool Receivable shall not constitute an Event of Termination under this Section 7.1(e) if the occurrence of such event gives rise to an obligation of the Seller to make a payment under Section 2.9(c) in respect of the affected Pool Receivable and the Seller has made such payment in accordance with Section 2.9(c) and, after giving effect to such payment and, if applicable, any calculated reduction in Capital by an amount held in the Cash Assets Account that is available for application therefor pursuant to Section 2.6 or 2.7, as applicable, the aggregate Receivable Interests would not exceed 100%; or

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(f) (i) any Transaction Party or any Material Subsidiary shall (A) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code or any other Federal or state bankruptcy, insolvency, liquidation or similar law, (B) consent to the institution of, or fail to contravene in a timely and appropriate manner in, any such proceeding or the filing of any such petition, (C) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for any Transaction Party or any Material Subsidiary or for a substantial part of its property or assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors, (F) become unable or fail generally to pay its debts as they become due or (G) take any company or partnership or similar action to authorize any of the actions set forth in this Section 7.1(f); or (ii) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (A) relief in respect of any Transaction Party or any Material Subsidiary or of a substantial part of the property or assets of any Transaction Party or any Material Subsidiary, under Title 11 of the United States Code or any other Federal or state bankruptcy, insolvency, receivership or similar law, (B) the appointment of a receiver, trustee, custodian, sequestrator or similar official for any Transaction Party or any Material Subsidiary or for a substantial part of the property or assets of any Transaction Party or any Material Subsidiary or (C) the winding up or liquidation of any Transaction Party or any Material Subsidiary; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for 30 days;

(g) (i) (A) a Reportable Event or Reportable Events, or a failure to make a required payment (within the meaning of Section 412(n)(1) of the Code), shall have occurred with respect to any Plan or Plans that reasonably could be expected to result in a Material Adverse Effect; or (B) a trustee shall be appointed by a United States District Court to administer any such Plan or Plans or the PBGC shall institute proceedings to terminate any Plan or Plans and such appointment or termination proceedings could reasonably be expected to result in a Material Adverse Effect; or (ii) (A) any Transaction Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan, (B) any Transaction Party or such ERISA Affiliate does not have reasonable grounds for contesting such Withdrawal Liability or is not, in fact, contesting such Withdrawal Liability in a timely and appropriate manner and (C) the amount of the Withdrawal Liability specified in such notice, when aggregated with all other amounts required to be paid by any Transaction Party and its ERISA Affiliates to Multiemployer Plans in connection with Withdrawal Liabilities (determined as of the date or dates of such notification), could reasonably be expected to result in a Material Adverse Effect; or (iii) any Transaction Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if solely as a result of such reorganization or termination the aggregate annual contributions of any Transaction Party and its ERISA Affiliates to all Multiemployer Plans that are then in reorganization or have been or are being terminated have been or will be increased could reasonably be expected to result in a Material Adverse Effect;

(h) The Net Receivables Pool Balance shall be less than the Required Net Receivables Pool Balance (giving effect to any calculated reduction in Capital by an amount equal to the amount on deposit in the Cash Assets Account that is available for application therefor pursuant to Section 2.6 or 2.7, as applicable, as of the close of business on the relevant day of determination) for a period of 2 consecutive Business Days or more; or

(i) Any Transaction Document shall for any reason cease to be in full force and effect, or any Transaction Party shall so state in writing; or

(j) A Change of Control shall occur; or

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(k) one or more judgments or orders for the payment of money shall be rendered by a court or other tribunal or governmental agency against the Seller or (ii) one or more judgments or orders for the payment of money (not reimbursed by insurance policies of any other Transaction Party or any Subsidiary) in excess of $20,000,000 in the aggregate shall be rendered by a court or other tribunal or governmental agency against such other Transaction Party or any Subsidiary and shall remain undischarged for a period of 30 consecutive days during which the execution of such judgments shall not have been stayed effectively or any action shall be legally taken by a judgment creditor to levy upon assets or properties of such other Transaction Party or any Subsidiary to enforce any such judgment; or

(l) (i) Receivables Excess Availability shall for a period of two consecutive Business Days be less than (x) $35,000,000 from the Closing Date through March 30, 2005 or (y) $20,000,000 thereafter; or (ii) Total Excess Availability shall for a period of two consecutive Business Days be less than (x) $75,000,000 from the Closing Date through March 30, 2005 or (y) $50,000,000 thereafter;

then, and in any such event, the Agent shall, at the request, or may with the consent, of the Required Purchasers, by notice to the Seller and the Servicer declare the Termination Date to have occurred, whereupon the Termination Date shall forthwith occur; provided, that (x) automatically upon the second Business Day following the effectiveness of a “Receivables Termination Notice” delivered in accordance with (and as defined in) the Intercreditor Agreement, the Termination Date shall occur and (y) automatically upon the occurrence of any event (without any requirement for the passage of time or the giving of notice, or both) described in subsection (f) of this Section 7.1, the Termination Date shall occur, and the Agent may replace the Servicer pursuant to Section 6.1. Upon any such occurrence of the Termination Date, the Agent and each Purchaser shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under any and all applicable laws, which rights shall be cumulative.

ARTICLE VIII

THE AGENT

Section 8.1 Authorization and Action.

(a) Each Purchaser hereby appoints CUSA as the Agent hereunder and each Purchaser authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Transaction Documents as are delegated to the Agent under such agreements and to exercise such powers as are reasonably incidental thereto. Without limiting the foregoing, each Purchaser hereby authorizes the Agent to execute and deliver, and to perform its obligations under, each of the Transaction Documents to which the Agent is a party, to exercise all rights, powers and remedies that the Agent may have under such Transaction Documents.

(b) As to any matters not expressly provided for by this Agreement and the other Transaction Documents (including enforcement or collection), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Purchasers, and such instructions shall be binding upon all Purchasers; provided, however, that the Agent shall not be required to take any action that (i) the Agent in good faith believes exposes it to personal liability unless the Agent receives an indemnification satisfactory to it from the Purchasers with respect to such action or (ii) is contrary to this Agreement or applicable law. The Agent agrees to give to each Purchaser prompt notice of each notice given to it by the Seller, any Originator or the Servicer pursuant to the terms of this Agreement or the other Transaction Documents.

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(c) In performing its functions and duties hereunder and under the other Transaction Documents, the Agent is acting solely on behalf of the Purchasers and its duties are entirely administrative in nature. The Agent does not assume and shall not be deemed to have assumed any obligation other than as expressly set forth herein and in the other Transaction Documents or any other relationship as the agent, fiduciary or trustee of or for any Purchaser or holder of any other obligation under any Transaction Document. The Agent may perform any of its duties under any Transaction Document by or through its agents or employees.

(d) The Co-Asset Agents and the Co-Documentations Agents shall have no responsibility, obligation or liability whatsoever under the Transaction Documents in such capacity.

Section 8.2 Agent’s Reliance, Etc.

Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Agent under or in connection with this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto (including, without limitation, the Agent’s servicing, administering or collecting Pool Receivables as Servicer pursuant to Section 6.1), except for its or their own gross negligence or willful misconduct. Without limiting the generality of the foregoing, except as otherwise agreed by the Agent and any Purchaser, the Agent: (i) may consult with legal counsel (including counsel for the Seller, the Servicer or any Originator), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Purchaser and shall not be responsible to any Purchaser for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto on the part of the Seller or any Originator or to inspect the property (including the books and records) of the Seller or any Originator; (iv) shall not be responsible to any Purchaser for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto, or the perfection, priority or value of any ownership interest or security interest created or purported to be created hereunder or under the Receivables Sale Agreement; and (v) shall incur no liability under or in respect of this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) reasonably believed by it to be genuine and signed or sent by the proper party or parties.

Section 8.3 CUSA and Affiliates.

With respect to any Capital or any Receivable Interest owned by it, CUSA shall have the same rights and powers under this Agreement as any other Purchaser and may exercise the same as though it were not the Agent. CUSA and its Affiliates may generally engage in any kind of business with the Seller or any Originator or any Obligor, any of their respective Affiliates and any Person who may do business with or own securities of the Seller or any Originator or any Obligor or any of their respective Affiliates, all as if CUSA were not the Agent and without any duty to account therefor to the Purchasers.

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Section 8.4 Purchase Decisions.

Each Purchaser acknowledges that it has, independently and without reliance upon the Agent or any of its Affiliates or any other Purchaser and based on such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement and to purchase undivided ownership interests in Pool Receivables hereunder. Each Purchaser also acknowledges that it shall, independently and without reliance upon the Agent, any of its Affiliates or any other Purchaser and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement.

Section 8.5 Indemnification.

The Purchasers agree to indemnify the Agent (to the extent not promptly reimbursed by the Seller or the Servicer), ratably according to their Ratable Portion from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto or any action taken or omitted by the Agent under this Agreement or any other Transaction Document or any such instrument or document; provided that no Purchaser shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, the Purchasers agree to reimburse the Agent, ratably according to their Ratable Portion, promptly upon demand for any costs and expenses (including, without limitation, reasonable fees and disbursements of counsel) payable by the Seller to the Agent under Section 11.5, to the extent that the Agent is not promptly reimbursed for such costs and expenses by the Seller.

Section 8.6 Successor Agent

The Agent may resign at any time by giving written notice thereof to the Purchasers and the Seller. Upon any such resignation, the Required Purchasers shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Required Purchasers, and shall have accepted such appointment, within 30 days after the retiring Agent’s giving of notice of resignation, then the retiring Agent may, on behalf of the Purchasers, appoint a successor Agent, selected from among the Purchasers. In either case, such appointment shall be subject to the prior written approval of the Seller (which approval may not be unreasonably withheld and shall not be required upon the occurrence and during the continuance of an Event of Termination). Upon the acceptance of any appointment as Agent by a successor Agent, such successor Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement and the other Transaction Documents. Prior to any retiring Agent’s resignation hereunder as Agent, the retiring Agent shall take such action as may be reasonably necessary to assign to the successor Agent its rights as Agent under the Transaction Documents. After such resignation, the retiring Agent shall continue to have the benefit of this Article VIII as to any actions taken or omitted to be taken by it while it was Agent under this Agreement and the other Transaction Documents.

Section 8.7 Posting of Approved Electronic Communications.

(a) Subject to certain limited exceptions in respect of which the Servicer or the Seller has delivered prior written notice to the Agent, each of the Purchasers, the Servicer and the Seller agree that the Agent may, but shall not be obligated to, make the Approved Electronic Communications

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available to the Purchasers by posting such Approved Electronic Communications on “e-Disclosure”, the Agent’s internet delivery system that is part of Fixed Income Direct, Global Fixed Income’s primary web portal, or successor electronic platform chosen by the Agent to be its internet delivery system (the “Approved Electronic Platform”).

(b) Although the primary web portal is secured with a dual firewall and a user ID/password authorization system and the Approved Electronic Platform is secured through a single-user-per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Purchasers, the Servicer and the Seller acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution. In consideration for the convenience and other benefits afforded by such distribution and for the other consideration provided hereunder, the receipt and sufficiency of which is hereby acknowledged, each of the Purchasers, the Servicer and the Seller hereby approves, and the Servicer shall cause each Originator to approve, distribution of the Approved Electronic Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.

(c) The Approved Electronic Communications and the Approved Electronic Platform are provided “as is” and “as available”. None of the Agent or any of its Affiliates or any of their respective officers, directors, employees, agents, advisors or representatives (the “Agent Affiliates”) warrants the accuracy, adequacy or completeness of the Approved Electronic Communications and the Approved Electronic Platform and each expressly disclaims liability for errors or omissions not committed by it or in the absence of its gross negligence or willful misconduct in the Approved Electronic Communications and the Approved Electronic Platform. No warranty of any kind, express, implied or statutory (including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects) is made by the Agent Affiliates in connection with the Approved Electronic Platform.

ARTICLE IX

ASSIGNMENT OF RECEIVABLE INTERESTS

Section 9.1 Purchaser’s Assignment of Rights and Obligations.

(a) Each Purchaser may assign all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Receivable Interests owned by it); provided, however, that (i) each such assignment shall be a constant, and not a varying, percentage of such Purchaser’s rights and obligations under this Agreement and the Receivable Interests owned by it, (ii) in the case of any assignment by any Purchaser that is not assigning pursuant thereto all of its right and obligations under this Agreement, (A) the amount of the Commitment (determined as of the date of the applicable Assignment and Acceptance) being assigned pursuant to each such assignment shall be at least $10,000,000, or (B) the aggregate amount of all Commitments (determined as of the date of the applicable Assignments and Acceptances) being assigned by such Purchaser on such date to two or more Assignees that are Approved Funds of such Purchaser or are Affiliates of each other shall be at least $10,000,000 (or, in the case of (A) or (B), any smaller amount agreed upon by the Agent and the Seller), (iii) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with (except in the case of an assignment to another Purchaser or an Affiliate or an Approved Fund of such Purchaser) a processing and recording fee of $3,500 (provided that only one such fee shall be required in the case of multiple assignments by a Purchaser on a single day to funds that invest in bank loans and financial assets of a type similar to the Receivable Interests that are advised by the same investment adviser if such funds are

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not Approved Funds) and (iv) except in the case of an assignment by a Purchaser to an Affiliate of such Purchaser, to another Purchaser or to an Approved Fund of such Purchaser), the consent of the Agent (and, in the case of an assignment of all or a portion of a Commitment, regardless of the identity of the assignee, the Swing Purchaser) and, unless an Event of Termination has occurred and is continuing, the Seller shall first have been obtained (which consent may not be unreasonably withheld); and provided, further, that any assignment to an Approved Fund of a Purchaser that is a collateralized debt obligation vehicle shall permit a pledge by such Assignee of the assigned rights and obligations in favor of an indenture trustee for the securities issued by such Assignee. Upon such execution, delivery and acceptance, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be the later of (x) the date the Agent receives the executed Assignment and Acceptance and (y) the date of such Assignment and Acceptance, (1) the Assignee thereunder shall be a party hereto and shall have all the rights and obligations of a Purchaser hereunder and (2) the assigning Purchaser shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such assignment and acceptance, relinquish its rights and be released from its obligations under this Agreement.

(b) By executing and delivering an Assignment and Acceptance, the assigning Purchaser and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, the assigning Purchaser makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto, or the perfection, priority or value of any ownership interest or security interest created or purported to be created hereunder or under the Receivables Sale Agreement; (ii) the assigning Purchaser makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Seller, the Servicer or any Originator or the performance or observance by the Seller, the Servicer or any Originator of any of their respective obligations under this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto; (iii) such Assignee confirms that it has received copies of this Agreement and the other Transaction Documents, together with such other documents and information as it has deemed appropriate to make its own analysis and decision to enter into such Assignment and Acceptance; (iv) such Assignee will, independently and without reliance upon the Agent, any of its Affiliates, the assigning Purchaser or any other Purchaser and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement and the other Transaction Documents and the other instruments and documents furnished pursuant hereto; (v) such Assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Transaction Documents and the other instruments and documents furnished pursuant hereto as are delegated to the Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; (vi) such Assignee appoints as its agent the Servicer from time to time designated pursuant to Section 6.1 to enforce its respective rights and interests in and under the Pool Receivables and the Related Security and Collections with respect thereto and the related Contracts; and (vii) such Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Purchaser.

(c) Upon its receipt of an Assignment and Acceptance executed by any assigning Purchaser and an Assignee, the Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit A hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to the Seller and the Servicer.

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(d) Any Purchaser may, in connection with any assignment or proposed assignment pursuant to Section 9.1, disclose to the assignee or proposed assignee any information relating to any Transaction Party or any Subsidiary furnished to the Purchasers by or on behalf of such Transaction Party or such Subsidiary, as applicable; provided that, prior to any such disclosure, each such assignee or proposed assignee shall execute an agreement whereby such assignee or proposed assignee shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to the Transaction Parties and any Subsidiary received from the Agent or the Purchasers.

(e) Notwithstanding anything to the contrary contained herein, any Purchaser (a “Granting Purchaser”) may grant to a special purpose funding vehicle (an “SPC”) of such Granting Purchaser, identified as such in writing from time to time by the Granting Purchaser to the Agent and the Seller, the option to provide to the Seller all or any part of any Purchase that such Granting Purchaser would otherwise be obligated to make to the Seller pursuant to Section 2.2, provided that (i) nothing herein shall constitute a commitment to make any Purchase by any SPC and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Purchase, the Granting Purchaser shall be obligated to make such Purchase pursuant to the terms hereof. The making of a Purchase by an SPC hereunder shall be deemed to utilize the Commitments of all the Purchasers to the same extent, and as if, such Purchase were made by the Granting Purchaser. Each party hereto hereby agrees that no SPC shall be liable for any payment under this Agreement for which a Purchaser would otherwise be liable, for so long as, and to the extent, the related Granting Purchaser makes such payment. In furtherance of the foregoing, each party hereto hereby agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States of America or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 9.1, any SPC may assign all or a portion of its interests in any Receivable Interests to its Granting Purchaser or to any financial institutions providing liquidity and/or credit facilities to or for the account of such SPC to fund the Purchases made by such SPC or to support the securities (if any) issued by such SPC to fund such Purchases; provided, however, that except in the case of an assignment to a Granting Purchaser or a financial institution that is either an affiliate of such SPC or another Purchaser, the Agent and, unless an Event of Termination has occurred and is continuing, the Seller must consent to such assignment in writing (which consent may not be unreasonably withheld). Each SPC shall execute an agreement whereby such SPC shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to the Transaction Parties and its Affiliates received from the Agent or Purchasers.

Section 9.2 The Register.

The Agent, acting solely for this purpose as an agent of the Seller, shall maintain at its office referred to in Section 11.3 a copy of each Assignment and Acceptance delivered to and accepted by it and a register (the “Register”) for the recordation of the names and addresses of the Purchasers and the Commitment of, and each Receivable Interest owned by, each Purchaser from time to time, which Register shall be available for inspection by the Seller or any Purchaser (but, in the case of any Purchaser, only with respect to the entries in the Register applicable to such Purchaser and the names of any other Purchasers) at any reasonable time upon reasonable prior notice. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the parties hereto may treat each Person whose name is recorded in the Register as a Purchaser hereunder for all purposes of this Agreement. No Assignment and Acceptance shall be effective until it is entered in the Register.

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Section 9.3 Participations.

With the prior written consent of the Agent, each Purchaser may sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Transaction Documents (including all its rights and obligations with respect to Receivable Interests). The terms of such participation shall not, in any event, require the participant’s consent to any amendments, waivers or other modifications of any provision of any Transaction Documents, the consent to any departure by any Transaction Party therefrom, or to the exercising or refraining from exercising any powers or rights such Purchaser may have under or in respect of the Transaction Documents (including the right to enforce the obligations of any Transaction Party), except if any such amendment, waiver or other modification or consent would reduce the amount, or postpone any date fixed for, any amount (whether of Capital, Yield or fees) payable to such participant under the Transaction Documents, to which such participant would otherwise be entitled under such participation. In the event of the sale of any participation by any Purchaser, (w) such Purchaser’s obligations under the Transaction Documents shall remain unchanged, (x) such Purchaser shall remain solely responsible to the other parties for the performance of such obligations, (y) such Purchaser shall remain the holder of such Capital for all purposes of this Agreement and (z) the Seller, the Agent and the other Purchasers shall continue to deal solely and directly with such Purchaser in connection with such Purchaser’s rights and obligations under this Agreement. Each participant shall be entitled to the benefits of Sections 2.12(a), 2.13 and 2.14 as if it were a Purchaser; provided, however, that anything herein to the contrary notwithstanding, the Seller shall not, at any time, be obligated to make under Section 2.12(a), 2.13 or 2.14 to the participants in the rights and obligations of any Purchaser (together with such Purchaser) any payment in excess of the amount the Seller would have been obligated to pay to such Purchaser in respect of such interest had such participation not been sold. Any Purchaser may, in connection with any participation or proposed participation pursuant to Section 9.3, disclose to the participant or proposed participant any information relating to any Transaction Party or any Subsidiary furnished to the Purchasers by or on behalf of such Transaction Party or such Subsidiary, as applicable; provided that, prior to any such disclosure, each such participant or proposed participant shall execute an agreement whereby such participant or proposed participant shall agree (subject to customary exceptions) to preserve the confidentiality of any confidential information relating to the Transaction Parties and any Subsidiary received from the Agent or the Purchasers.

ARTICLE X

INDEMNIFICATION

Section 10.1 Indemnities.

Without limiting any other rights that any Indemnified Party may have hereunder or under applicable law, and whether or not any of the transactions contemplated hereby are consummated, (A) the Seller hereby agrees to indemnify each Indemnified Party from and against, and hold each thereof harmless from, any and all claims, losses, liabilities, costs and expenses of any kind whatsoever (including, without limitation, reasonable attorneys’ fees and expenses) (all of the foregoing being collectively referred to as “Indemnified Amounts”) arising out of, or resulting from, in whole or in part, one or more of the following: (a) this Agreement or any other Transaction Document (other than the Equistar Undertaking or the Servicer’s activities as Servicer) to which it is a party; (b) the use of proceeds of any Purchase or reinvestment; (c) the interest of any Purchaser in any Receivable, any Contract or any Related Security; or (d) any transaction contemplated by this Agreement or any other Transaction Document (other than the Equistar Undertaking) to which it is a party; and (B) the Servicer hereby agrees to indemnify each Indemnified Party for Indemnified Amounts arising out of or resulting from the Equistar Undertaking or the Servicer’s activities as Servicer or Buyer’s Servicer hereunder or under the other Transaction Documents; excluding, however, in all of the foregoing instances under clauses (A) and

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(B) above, Indemnified Amounts (1) to the extent resulting from (x) the gross negligence or willful misconduct on the part of such Indemnified Party or, (y) the failure to collect amounts in respect of a Pool Receivable, to the extent such failure results from a discharge of the Obligor with respect thereto in a proceeding in respect of such Obligor under applicable bankruptcy laws or otherwise results from the Obligor’s financial inability to pay such amounts or (2) that are subject to the exclusions from reimbursement or payment therefor under Section 2.14. Without limiting or being limited by the foregoing and whether or not any of the transactions contemplated hereby are consummated, the applicable Seller Party shall pay within five Business Days after demand to each Indemnified Party any and all amounts necessary to indemnify such Indemnified Party from and against any and all Indemnified Amounts which relate to or result from, or which would not have occurred but for, one or more of the following:

(i) any Receivable becoming a Pool Receivable which is stated to be, but is not, an Eligible Receivable;

(ii) any representation or warranty or statement made or deemed made by such Seller Party (or any of its officers) under or in connection with this Agreement or any other Transaction Document or any Seller Report or other document delivered or to be delivered in connection herewith or with any other Transaction Document being incorrect in any material respect when made or deemed made or delivered;

(iii) the failure by such Seller Party to comply with any applicable law, rule or regulation with respect to any Pool Receivable or the related Contract or any Related Security with respect thereto; or the failure of any Pool Receivable or the related Contract or any Related Security with respect thereto to conform to any such applicable law, rule or regulation;

(iv) the failure to vest in the Purchaser of a Receivable Interest a first priority perfected undivided percentage ownership interest, to the extent of such Receivable Interest, in each Receivable in, or purported to be in, the Receivables Pool and the Related Security and Collections in respect thereof, free and clear of any Lien (except for Liens created pursuant to the Transaction Documents); or the failure of the Seller to have obtained a first priority perfected ownership interest in the Pool Receivables and the Related Security and Collections with respect thereto transferred or purported to be transferred to the Seller under the Receivables Sale Agreement, free and clear of any Lien (except for Liens created pursuant to the Transaction Documents);

(v) the failure of such Seller Party to have filed, or any delay by such Seller Party in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable in, or purported to be in, the Receivables Pool and the Related Security and Collections in respect thereof, whether at the time of any Purchase or reinvestment or at any subsequent time unless such failure results directly and solely from the Agent’s failure to take appropriate action;

(vi) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of any Obligor to the payment of any Receivable in, or purported to be in, the Receivables Pool (including, without limitation, any defense based on the fact or allegation that such Receivable or the related Contract is not a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the goods or services related to such Receivable or the furnishing or failure to furnish such goods or services;

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(vii) any failure of such Seller Party to perform its duties or obligations in accordance with the provisions of this Agreement or any other Transaction Document or to perform its duties or obligations under any Contract;

(viii) any product liability, personal injury, copyright infringement, theft of services, property damage, or other breach of contract, antitrust, unfair trade practices or tortious claim arising out of or in connection with the subject matter of any Contract or out of or in connection with any transaction contemplated by this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or such Contract;

(ix) the commingling by such Seller Party of Collections of Pool Receivables at any time with other funds;

(x) any action or omission by such Seller Party reducing or impairing the rights of any Purchaser of a Receivable Interest under this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or thereto or with respect to any Pool Receivable;

(xi) any cancellation or modification of a Pool Receivable, the related Contract or any Related Security, whether by written agreement, verbal agreement, acquiescence or otherwise, unless such cancellation or modification was made by or with the express consent of the Agent or a Servicer that is not Equistar or an Affiliate of Equistar; provided that in no event shall Indemnified Amounts include any unpaid portion of a Pool Receivable effected by any such cancellation or modification;

(xii) any investigation, litigation or proceeding related to or arising from this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or thereto, or any transaction contemplated by this Agreement or any Contract or the use of proceeds from any Purchase or reinvestment pursuant to this Agreement, or the ownership of, or other interest in, any Receivable, the related Contract or Related Security;

(xiii) the existence of any Lien (except for Liens created pursuant to the Transaction Documents) against or with respect to any Restricted Account or any Pool Receivable, the related Contract or the Related Security or Collections with respect thereto;

(xiv) any failure by such Seller Party to pay when due any taxes, including without limitation sales, excise or personal property taxes, payable by such Seller Party in connection with any Receivable or the related Contract or any Related Security with respect thereto;

(xv) any claim brought by any Person other than an Indemnified Party arising from any activity of such Seller Party in servicing, administering or collecting any Pool Receivable; or

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(xvi) any failure by any Lock-Box Bank or other depositary bank at which a Restricted Account is maintained to comply with the terms of the Transaction Document governing such Restricted Account to which it is a party.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Amendments, Etc.

No amendment or waiver of any provision of this Agreement or the Intercreditor Agreement, and no consent to any departure by the Seller or the Servicer therefrom, shall be effective unless in a writing signed by the Agent and the Required Purchasers and, in the case of any such amendment, the Seller and the Servicer and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall:

(a) without the prior written consent of each Purchaser,

(i) amend the definitions of “Eligible Receivable”, “Net Receivables Pool Balance”, “Required Net Receivables Pool Balance” or “Super Majority Purchasers”, “Required Purchasers”; or

(ii) amend, modify or waive any provision of this Agreement in any way which would

(A) reduce the amount of a Capital Investment or Yield that is payable on account of any Receivable Interest or delay any scheduled date for payment thereof or reduce the Applicable Margin or change the order of application of Collections to the payment thereof, or

(B) impair any rights expressly granted to such Purchaser under this Agreement, or

(C) reduce fees payable by the Seller to or for the account of such Purchaser hereunder or delay the dates on which such fees are payable, or

(iii) amend or waive the Event of Termination contained in Section 7.1(f) relating to the bankruptcy of any Transaction Party, or amend or waive the Event of Termination contained in Section 7.1(h) relating to the Net Receivables Pool Balance, or

(iv) change the percentage of Commitments, or the number of Purchasers or Purchasers, which shall be required for the Purchasers or any of them to take any action hereunder, or

(v) amend this Section 11.1, or

(vi) extend the Commitment Termination Date, or

(vii) increase the amount of the Total Commitment, or

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(viii) reduce the Reserve Percentage, or amend the definition of “Reserve Percentage”, in each case such that the Reserve Percentage is reduced, below 15%;

(b) without the consent of the applicable Purchaser, increase the Commitment of such Purchaser, subject such Purchaser to any additional obligations, or decrease the Receivable Interest of such Purchaser; and

(c) without the consent of the Super Majority Purchasers, amend the definitions of “Receivable Asset Availability”, “Receivables Excess Availability”, “Total Asset Availability” or “Total Excess Availability” or amend, or waive any Event of Termination or Potential Event of Termination arising under, Section 7.1(l) hereof;

provided, however, that the Agent shall not, without the prior written consent of the Required Purchasers, either agree to any amendment or waiver of any other provision of the Equistar Undertaking or any provision of the Intercreditor Agreement or other Transaction Document or consent to any departure from the Equistar Undertaking or the Intercreditor Agreement or other Transaction Document by any party thereto, and provided further, that (x) no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Purchasers required above to take such action, affect the rights or duties of the Agent under this Agreement or the other Transaction Documents, and (y) no amendment, waiver or consent shall, unless in writing and signed by the Swing Purchaser in addition to the Purchasers required above to take such action, affect the rights or duties of the Swing Purchaser under this Agreement or the other Transaction Documents.

If, in connection with any proposed amendment, modification, waiver or termination requiring the consent of all affected Purchasers, the consent of the Required Purchasers is obtained but the consent of other Purchasers whose consent is required is not obtained (any such Purchaser whose consent is not obtained being referred to as a “Non-Consenting Purchaser”), then, so long as the Purchaser that is the same entity as the Agent is not a Non-Consenting Purchaser, at the Seller’s request, the Agent or an Assignee acceptable to the Agent shall have the right with the Agent’s consent and in the Agent’s sole discretion (but shall have no obligation) to purchase from such Non-Consenting Purchaser, and such Non-Consenting Purchaser agrees that it shall, upon the Agent’s request, sell and assign to the Purchaser that is the same entity as the Agent or to such Assignee, all of the Commitment and Receivable Interest of such Non-Consenting Purchaser for an amount equal to the outstanding Capital represented by the Receivable Interest of the Non-Consenting Purchaser plus all accrued Yield and fees with respect thereto through the date of sale less unamortized upfront fees, such purchase and sale to be consummated pursuant to an executed Assignment and Acceptance.

No failure on the part of any Purchaser or the Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.

Section 11.2 Right of Set-off.

Each Purchaser is hereby authorized by the Seller upon the occurrence and during the continuance of an Event of Termination, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Purchaser to or for the credit or the account of the Seller against any and all of the obligations of the Seller now or hereafter existing under this Agreement to such Purchaser or, if such Purchaser is CUSA, to the Agent or any Affiliate thereof, irrespective of whether or not any formal demand shall have been made under this Agreement and although such obligations may be unmatured. Each Purchaser agrees promptly to notify the Seller after any such setoff and application;

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provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Purchaser under this Section 11.2 are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Purchaser may have.

Section 11.3 Notices, Etc.

All notices and other communications hereunder shall, unless otherwise stated herein, be given in writing or by any telecommunication device capable of creating a written record (including, with respect to Approved Electronic Communications and other notices and communications described below, electronic mail), (i) to each of the Seller, the Servicer, the Agent and the Initial Purchasers, at its address set forth under its name on the signature pages hereof, (ii) to each Purchaser other than the Initial Purchasers, at its address specified on the Assignment and Acceptance pursuant to which it became a Purchaser hereunder or (iii) to any party hereto at such other address as shall be designated by such party in a notice to the other parties hereto given as provided herein.

All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by telecopy equipment of the sender, or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 11.3 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 11.3.

Notices and other communications to the Purchasers hereunder not constituting Approved Electronic Communications may be delivered or furnished by electronic communications pursuant to procedures approved by the Agent; provided that the foregoing shall not apply to notices pursuant to Article II or III unless otherwise agreed by the Agent and the applicable Purchaser. Each of the Agent, the Seller and the Servicer may, in its discretion, agree to accept notices and other communications to it hereunder or under any other Transaction Document that do not constitute Approved Electronic Communications, by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Section 11.4 Binding Effect; Assignability.

This Agreement shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns, except that neither the Seller, any Originator nor the Servicer shall have the right to assign its rights or obligations hereunder or any interest herein without the prior written consent of all Purchasers. This Agreement shall create and constitute the continuing obligation of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time, after the Termination Date, as no Capital or any other obligation of the Seller, any Originator or the Servicer under any Transaction Document shall be outstanding; provided, however, that rights and remedies with respect to the provisions of Sections 2.12, 2.13, 2.14, 10.1, 11.5, 11.6, and 11.8 shall be continuing and shall survive any termination of this Agreement.

Section 11.5 Costs and Expenses.

The Seller shall pay (i) all reasonable out-of-pocket expenses incurred by the Agent, including the reasonable fees, charges and disbursements of Davis Polk & Wardwell, special counsel for the Agent and any local counsel retained by them, in connection with the syndication of the receivables facilities provided for herein, the preparation and administration of the Transaction Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by the

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Agent or any Purchaser, including the fees, charges and disbursements of any counsel for the Agent or any Purchasers, in connection with the enforcement or protection of its rights in connection with any Transaction Document, including its rights under this Section, or in connection with the Receivable Interests, including all such out-of-pocket expenses incurred during any workout or restructuring in respect of such Receivable Interests. It is understood that reimbursement of the Agent in respect of matters covered by Section 5.1(f) or 5.4(f) of this Agreement is subject to the applicable limitations specified herein.

Section 11.6 Confidentiality.

Each of the Agent, the Purchasers and the SPC’s (as defined in Section 9.1(e)) agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under any Transaction Document or any suit, action or proceeding relating to any Transaction Document or the enforcement of rights thereunder, (f) subject to obtaining a written agreement containing provisions substantially the same as those of this Section from the intended recipient of such Information, to any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement (including any assignee or any prospective assignee of an SPC of the type described in the last sentence of Section 9.1(e)), (g) with the consent of the Seller or any other Transaction Party, (h) for purposes of Section 9.1(e) only, to any rating agency, (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Agent or any Purchaser on a nonconfidential basis from a source other than the Transaction Parties or (j) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to such contractual counterparty’s professional advisor) so long as the recipient of such Information agrees to be bound by the provisions of this Section. For the purposes of this Section, “Information” means all information received from the Transaction Parties relating to the Transaction Parties and their Affiliates or their respective businesses, other than any such information that is available to the Agent or any Purchaser on a nonconfidential basis prior to disclosure by any Transaction Party. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Notwithstanding any other provision herein, each Purchaser and the Agent (and each employee, representative or other agent of such party) may disclose to any and all Persons, without limitation of any kind, any information with respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated by the Transaction Documents and all materials of any kind (including opinions or other tax analyses) that are provided to the Agent or such Purchaser relating to such tax treatment and tax structure.

Section 11.7 Governing Law.

This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

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Section 11.8 Jurisdiction, Etc.

(a) Any legal action or proceeding with respect to this Agreement or any other Transaction Document may be brought in the courts of the State of New York sitting in the Borough of Manhattan, the City of New York, or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, each of the Seller and the Servicer hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions.

(b) Each of the Seller and the Servicer hereby irrevocably consents to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding brought in the United States of America arising out of or in connection with this Agreement or any other Transaction Document by the mailing (by registered or certified mail, postage prepaid) or delivering of a copy of such process to the Seller or Servicer, as the case may be, at its address specified in Section 11.3. Each of the Seller and Servicer agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Nothing contained in this Section 11.8 shall affect the right of the Agent or any Purchaser to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against the Seller or Servicer or any other Transaction Party in any other jurisdiction.

Section 11.9 Execution in Counterparts.

This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery by telecopier of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.

Section 11.10 Intent of the Parties.

It is the intention of the parties hereto that each Purchase and reinvestment shall convey to each Purchaser, to the extent of its Receivable Interests, an undivided ownership interest in the Pool Receivables, and the Related Security and Collections in respect thereof and that such transaction shall constitute a purchase and sale and not a secured loan for all purposes other than for federal income tax purposes. If, notwithstanding such intention, the conveyance of the Receivable Interests from the Seller to any Purchaser shall ever be recharacterized as a secured loan and not a sale, it is the intention of the parties hereto that this Agreement shall constitute a security agreement under applicable law, and the Seller hereby grants to the Agent for the benefit of itself and each such Purchaser a duly perfected first priority security interest in all of the Seller’s right, title and interest in, to and under the Pool Receivables and the Related Security and Collections in respect thereof, the Restricted Accounts and all proceeds thereof, free and clear of Liens (except for Permitted Liens) and Seller also hereby grants to the Agent for the benefit of itself and each Purchaser a duly perfected first priority security interest in all of the Seller’s right, title and interest in, to and under any Cash Assets and any cash collateral under this Agreement.

Section 11.11 Entire Agreement.

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 shall

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constitute the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, written or oral, relating to the subject matter hereof.

Section 11.12 Severability of Provisions.

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 11.13 Waiver of Jury Trial.

Each of the parties hereto irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or any of the other Transaction Documents, the Purchases or the actions of the Agent or any Indemnified Party in the negotiation, administration, performance or enforcement hereof or thereof.

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

EQUISTAR RECEIVABLES II, LLC, as Seller
By:	/s/ Charles L. Hall
	Name: Charles L. Hall
	Title: Vice President and Controller
Address:	One Houston Center 1221 McKinney Street Houston, TX 77010
	Attention: Assistant Treasurer
Telephone No.: 713/652-7200
Telecopier No.: 713/652-4598
EQUISTAR CHEMICALS, LP, as Servicer
By:	/s/ Karen A. Twitchell
	Name: Karen A. Twitchell
	Title: Principal Financial Officer
Address:	One Houston Center 1221 McKinney Street Houston, TX 77010
	Attention: Assistant Treasurer
Telephone No.: 713/652-7200
Telecopier No.: 713/652-4598

[Receivables Purchase Agreement]

[PURCHASER], as an Initial Purchaser
By:
	Name:
	Title:
Address:
Telephone No.:
Telecopier No.:

CO-ASSET AGENT
CITICORP USA, INC., as Co-Asset Agent
By:	/s/ David Jaffe
	Name: David Jaffe
	Title:   Vice President
Address:	388 Greenwich Street
	19th Floor
	New York, New York 10013
	Attention: David Jaffe
Telephone No.: (212) 816-2329
Telecopier No.: (212) 816-2613

[Receivables Purchase Agreement]

CO-ASSET AGENT
BANK OF AMERICA, N.A., as Co-Asset Agent
By:	/s/ Stephen King
	Name: Stephen King
	Title: Vice President
Address:	Bank Of America, N.A. 55 South Lake Avenue, Suite 900 Pasadena, CA 91101
Telephone No.: 626/397-1229
Telecopier No.: 626/397-1275

ADMINISTRATIVE AGENT
CITICORP USA, INC., as Administrative Agent
By:	/s/ David Jaffe
	Name: David Jaffe
	Title: Vice President
Address:	388 Greenwich Street 19th Floor New York, New York 10013
	Attention: David Jaffe
Telephone No.: (212) 816-2329
Telecopier No.: (212) 816-2613

[Receivables Purchase Agreement]

JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS
CITICORP GLOBAL MARKETS INC., as Joint Lead Arranger and Joint Bookrunner
By:	/s/ David Jaffe
	Name: David Jaffe
	Title: Authorized Signer
Address:	388 Greenwich Street 19th Floor New York, New York 10013 Attention: David Jaffe
Telephone No.: (212) 816-2329
Telecopier No.: (212) 816-2613

Bank of America, N.A., as an Initial Purchaser
By:	/s/ Stephen King
	Name: Stephen King
	Title: Vice President
Address:	Bank of America, N.A. 55 South Lake Avenue, Suite 900 Pasadena, CA 91101
Telephone No.: 626/397-1229
Telecopier No.: 626/397-1275

[Receivables Purchase Agreement]

Bank One, NA, as an Initial Purchaser
By:	/s/ J. Devin Mock
	Name: J. Devin Mock
	Title:    Director
Address:	1717 Main Street, LL1 Dallas, TX 75201
Telephone No.: 214/290-2596
Telecopier No.: 214/290-5382

JPMORGAN CHASE BANK, as an Initial Purchaser
By:	/s/ Stanley Haimes
	Name: Staney Haimes
	Title:    Vice President
Address:	270 Park Avenue, 4th floor NY NY 10017
Telephone No.: 212-270-3217
Telecopier No.: 212-270-5100

CREDIT SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH, as an Initial Purchaser
By:	/s/ S. William Fox
	Name: S. William Fox
	Title:    Director
Address:	11 Madison Avenue New York, NY 10010
Telephone No.: 212-538-0938
Telecopier No.: 212-935-7806

[Receivables Purchase Agreement]

CONGRESS FINANCIAL CORPORATION (SOUTHWEST), as an Initial Purchaser
By:	/s/ Vicky Balmot
	Name: Vicky Balmot
	Title: Executive Vice President
Address:	C/O Congress Financial Corporation (Southwest) 5001 LBJ Freeway, Suite 1050 Dallas, TX 75244
Telephone No.: 214-761-9044
Telecopier No.: 214-748-9118

General Electric Capital Corporation, as an Initial Purchaser
By:	/s/ Robert M. Kadlick
	Name: Robert M. Kadlick
	Title: Duly Authorized Signatory
Address:	6 High Ridge Park, Stamford, CT 06927
Telephone No.: 203-316-7588
Telecopier No.: 203-316-7978

GMAC COMMERCIAL FINANCE LLC, as an Initial Purchaser
By:	/s/ George Grieco
	Name: George Grieco
	Title: Director
Address:	461 Fifth Avenue Floor 21 New York, NY 10017
Telephone No.: (212) 329-1605
Telecopier No.: (212) 489-3980

[Receivables Purchase Agreement]

Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., as an Initial Purchaser
By:	/s/ Tom Bukowski
	Name: Tom Bukowski
	Title: Director
Address:	Merrill Lynch Capital, 225 Liberty St., New York, NY 10281
Telephone No.: 212-236-4500
Telecopier No.: 212-236-0048

National City Commercial Finance, Inc., as an Initial Purchaser
By:	/s/ James C. Ritchie
	Name: James C. Ritchie
	Title: Vice President
Address:	1965 East 6th Street, Suite 400 Locator 01-3049 Cleveland, OH 44114
Telephone No.: (216) 222-9918
Telecopier No.: (216) 222-9555

WELLS FARGO FOOTHILL, LLC, as an Initial Purchaser
By:	/s/ Sanat S. Amladi
	Name: Sanat S. Amladi
	Title: Vice President
Address:	2450 Colorado Avenue, Suite 3000 West Santa Monica, CA 90404
Telephone No.: (310) 453-7394
Telecopier No.: (310) 453-7447

[Receivables Purchase Agreement]

UBS AG, Stamford Branch, as an Initial Purchaser
By:	/s/ Wilfred V. Saint
	Name: Wilfred V. Saint
	Title: Associate Director
	Banking Products Services, US
By:	/s/ Anthony N. Joseph Anthony N. Joseph Associate Director Banking Products Services, US
	677 Washington Blvd. Stamford, CT 06912 Attn: Barbara Ezell
Telephone No.: 203-719-0473
Telecopier No.: 203-719-3888

AmSouth Bank, as an Initial Purchaser
By:	/s/ Bruce Kasper
	Name: Bruce Kasper
	Title: Attorney In Fact
Address:	599 Lexington Avenue, 45th Floor, NY, NY 10022
Telephone No.: 212-935-2215
Telecopier No.: 212-935-7458

Siemens Financial Services, Inc., as an Initial Purchaser
By:	/s/ Frank Amodio
	Name: Frank Amodio
	Title: Vice President - Credit
Address:	200 Somerset Corporate Boulevard Bridgewater, NJ 08807
Telephone No.: 908-575-4072
Telecopier No.: 908-575-4060

[Receivables Purchase Agreement]

LaSalle Business Credit, LLC, as an Initial Purchaser
By:	/s/ Anthony J. Veith
	Name: Anthony J. Veith
	Title: Senior Vice President
Address:
Telephone No.: 212/931-9717
Telecopier No.: 212/986-4205

Whitehall Business Credit Corporation, as an Initial Purchaser
By:	/s/ Christopher Hill
	Name: Christopher Hill
	Title: Vice President
Address:	One State Street, 7th Floor, New York, NY 10004
Telephone No.: (212) 806-4517
Telecopier No.: (212) 806-4530

THE BANK OF NEW YORK, as an Initial Purchaser
By:	/s/ Raymond J. Palmer
	Name: Raymond J. Palmer
	Title: Vice President
Address:	The Bank of New York Attn: Lisa Williams One Wall Street, 19th Fl. New York, NY 10286
Telephone No.: 212-635-7834
Telecopier No.: 212-635-7923

[Receivables Purchase Agreement]

EX-4.10

Exhibit 4.10

UNDERTAKING AGREEMENT

dated as of

December 17, 2003

by

EQUISTAR CHEMICALS, LP

TABLE OF CONTENTS

		PAGE
ARTICLE 1 DEFINITIONS
Section 1.01.	Definitions	2
Section 1.02.	Accounting Terms	6
Section 1.03.	Terms Generally	6
ARTICLE 2 REPRESENTATIONS AND WARRANTIES
Section 2.01.	Financial Projections	7
Section 2.02.	Environmental and Safety Matters	7
Section 2.03.	Title to Properties	7
Section 2.04.	Subsidiaries	7
Section 2.05.	Insurance	7
Section 2.06.	Labor Matters	8
Section 2.07.	Solvency	8
ARTICLE 3 AFFIRMATIVE COVENANTS
Section 3.01.	Existence	8
Section 3.02.	Business and Properties	8
Section 3.03.	Maintenance of Insurance	8
Section 3.04.	Financial Projections, Reports, Etc	8
Section 3.05.	Books of Accounts; Examination of Records; Audits	9
Section 3.06.	Compliance with Laws, Etc	9
Section 3.07.	Environmental Compliance	9
ARTICLE 4 NEGATIVE COVENANTS
Section 4.01.	Liens	10
Section 4.02.	Interest Coverage Ratio	13
Section 4.03.	Merger, Etc	13
Section 4.04.	Organizational Documents; Change of Name; Change of Business	14
Section 4.05.	Restrictive Agreements	15
Section 4.06.	Business Acquisitions	15
Section 4.07.	Affiliate Transactions	16
Section 4.08.	Hedging Agreements	17

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Section 4.09 .	Prepayment of Debt	17
Section 4.10.	Indebtedness	18
Section 4.11.	Restricted Payments	18
Section 4.12.	Restricted Investments	19
Section 4.13.	Capital Expenditures	19
ARTICLE 5 UNDERTAKING AS TO OTHER ORIGINATORS AND SERVICER
Section 5.01.	Unconditional Undertaking	20
Section 5.02.	Obligations Absolute	21
Section 5.03.	Waivers And Acknowledgments	22
Section 5.04.	Subrogation	23
ARTICLE 6 MISCELLANEOUS
Section 6.01.	Notices	23
Section 6.02.	No Waivers	24
Section 6.03.	Amendments and Waivers	24
Section 6.04.	Continuing Agreement; Assignments under Receivables Purchase Agreement	24
Section 6.05.	Successors	25
Section 6.06.	Governing Law; Submission to Jurisdiction	25
Section 6.07.	Counterparts; Effectiveness	25
Section 6.08.	WAIVER OF JURY TRIAL	25

SCHEDULE 2.04	—	Subsidiaries
SCHEDULE 2.05	—	Insurance
SCHEDULE 4.05	—	Restrictive Agreements
SCHEDULE 4.10	—	Outstanding Indebtedness (as of the Closing Date)
SCHEDULE 4.12	—	Existing Investments

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UNDERTAKING AGREEMENT dated as of December 17, 2003 by EQUISTAR CHEMICALS, LP in favor of the Purchasers, as defined in the Receivables Purchase Agreement referred to below, and Citicorp USA, Inc. (“CUSA”), as administrative agent (the “Agent”) thereunder.

RECITALS

Equistar Chemicals, LP, a Delaware limited partnership (“Equistar”), owns, directly or indirectly, all of the issued and outstanding membership interests of Equistar Receivables II, LLC, a Delaware limited liability company (the “Seller”), and, to the extent there are Originators (as defined in the Receivables Purchase Agreement) other than Equistar, will own all of the issued and outstanding equity interests in each of such other Originators.

The Seller, as buyer, and Equistar and the other Originators (if any), as sellers (and, in the case of Equistar, as buyer’s servicer), have entered into a Receivables Sale Agreement dated as of the date hereof (the “Receivables Sale Agreement”), pursuant to which Equistar and such other Originators sell and transfer all Seller Receivables (as defined in the Receivables Sale Agreement) originated by such Originator, together with certain related assets (including collections), to the Seller.

The Seller and Equistar, as initial Servicer, have entered into a Receivables Purchase Agreement dated as of the date hereof (the “Receivables Purchase Agreement”) with the banks and other financial institutions listed on the signature pages thereof, CUSA and Bank of America, as co-asset agents, and CUSA, as Agent. Pursuant to the Receivables Purchase Agreement, the Seller may sell to one or more of the Purchasers, as the case may be, undivided percentage ownership interests in Receivables and related assets that were acquired by the Seller from the Originators.

The Agent and the Purchasers have requested that Equistar provide, and Equistar is willing to provide, certain additional assurances, as set forth herein, as to the ability of Equistar to perform its obligations, as Originator and as Servicer, under the Transaction Documents (as defined in the Receivables Purchase Agreement) and as to the ability of any other Originator to perform its obligations as Originator under the Receivables Sale Agreement, and it is therefore a condition precedent to the effectiveness of the Receivables Purchase Agreement that Equistar shall have executed and delivered this Agreement.

NOW, THEREFORE, in consideration of the premises, and the substantial direct and indirect benefits to Equistar from the financing arrangements contemplated by the Receivables Purchase Agreement and the Receivables Sale Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledge, Equistar hereby agrees as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions. (a) Terms defined in the Receivables Purchase Agreement and not otherwise defined in Section 1.01(b), have, as used herein, the respective meanings provided for therein.

(b) The following terms, as used herein, have the following meanings:

“ABF Loan Party” shall mean a “Loan Party” as defined in the ABF Agreement.

“Asset Sale” shall mean any sale, lease or other disposition (including any such transaction effected by way of merger or consolidation) by Equistar or any of its Subsidiaries of any asset, whether or not involving a capital lease, but excluding (i) dispositions of inventory or equipment in the ordinary course of business, (ii) dispositions of Temporary Cash Investments and cash payments otherwise permitted under this Agreement (including Permitted Dividends), (iii) dispositions to Equistar or a Subsidiary of Equistar, (iv) dispositions constituting mergers or consolidations permitted by Section 4.03(a), (v) dispositions constituting Investments permitted by Section 4.12 (except as provided below), (vi) dispositions of any fixed or capital asset pursuant to a Sale/Leaseback Transaction, (vii) dispositions constituting Liens permitted by Section 4.01 and (viii) dispositions pursuant to the Transaction Documents.

“Business Acquisition” shall mean (i) an Investment by Equistar or any of its Subsidiaries in any other Person (including an Investment by way of acquisition of securities of any other Person) pursuant to which such Person shall become a Subsidiary or shall be merged into or consolidated with Equistar or any of its Subsidiaries or (ii) an acquisition by Equistar or any of its Subsidiaries of the property and assets of any Person (other than Equistar or any of its Subsidiaries) that constitute substantially all the assets of such Person or any division or other business unit of such Person. The formation by Equistar or any of its Subsidiaries of a new Subsidiary shall not, in and of itself, constitute a Business Acquisition.

“Capital Expenditures” shall mean, for Equistar and its Consolidated Subsidiaries for any fiscal year, the aggregate cash expenditures for property, plant and equipment of Equistar and its Consolidated Subsidiaries for such fiscal year, as the same are (or would in accordance with GAAP be) set forth in a statement of cash flows of such Person for such fiscal year; provided that “Capital Expenditures” shall exclude (i) expenditures of property and casualty insurance or any award or other compensation with respect to any condemnations of property (or any transfer or disposition of property in lieu of condemnation) and related insurance deductibles, (ii) capital expenditures resulting from the acquisition of rolling stock and related accessories, additions, improvements, parts and replacements leased by Equistar and/or its Consolidated Subsidiaries under railcar operating leases at September 30, 2003 and (iii) Business Acquisitions.

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“Consolidated Net Tangible Assets” shall mean the total amount of assets of Equistar and its Consolidated Subsidiaries (less applicable reserves and other properly deductible items) after deducting therefrom (a) all current liabilities (excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed), and (b) all goodwill, tradenames, trademarks, patents, purchased technology, unamortized debt discount and other like intangible assets, all as set forth on the most recent consolidated financial statements of Equistar delivered to the Lenders pursuant to Section 3.1(d) or 5.5 of the Receivables Purchase Agreement and computed in accordance with GAAP.

“EBITDA” shall mean, with respect to Equistar and its Consolidated Subsidiaries for any period, Net Income for such period plus, to the extent deducted in determining such Net Income and without duplication, (x)(i) interest expense (and, to the extent not otherwise included in interest expense, all Yield accrued in respect of the Receivable Interests), income tax expense and depreciation, amortization and other similar non-cash charges and (ii) asset write-downs and other restructuring charges which are not cash costs, in each case for such period, and, in the case of non-cash charges, not exceeding $250,000,000 in the aggregate, and (y) any gain or loss realized for such period in connection with Asset Sales or other dispositions not in the ordinary course of business; provided that, in the case of clause (x)(ii), if any such charge represents a cash payment in any future period, such cash payment shall be deducted when calculating EBITDA for such future period.

“Environmental and Safety Laws” shall have the meaning assigned to such term in Section 2.02.

“Environmental Liability” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of Equistar or any Subsidiary directly or indirectly which arise under or relate to matters covered by Environmental and Safety Laws.

“Equistar Funding” shall mean Equistar Funding Corporation, a Delaware corporation, and its successors.

“Equistar GP” shall mean any general partner of Equistar.

“Equity Refinancing” shall mean the repurchase, redemption, retirement or other acquisition by Equistar of Equity Interests in Equistar, an Affiliate of Equistar or a Joint Venture (or the acquisition of any outstanding Equity Interests of a Person, the majority of whose assets are Equity Interests) exclusively in

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exchange for, or out of the net cash proceeds of a substantially contemporaneous issuance by Equistar of, Equity Interests in Equistar which do not constitute Indebtedness (including a capital contribution in respect of such Equity Interests).

“Foreign Subsidiary” shall mean any Subsidiary organized under the laws of a jurisdiction, and conducting substantially all its operations, outside the United States of America.

“Hazardous Materials” shall mean all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas and infectious or medical wastes and including all substances or wastes of any nature regulated pursuant to any Environmental and Safety Laws.

“Hedging Agreement” shall mean any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest rate, currency exchange rate or commodity price hedging arrangement.

“Interest Coverage Ratio” shall mean the ratio of EBITDA to Net Interest Expense for Equistar and its Consolidated Subsidiaries, determined on a consolidated basis and calculated to exclude interest expense in the form of additional pay-in-kind interest required to be paid to holders of notes under the 2001 Indenture, the 2003 Indenture or any future indentures that provide for pay-in-kind interest similar to the additional pay-in-kind interest paid to holders issued under the 2001 Indenture and the 2003 Indenture in connection with the making of a Permitted Dividend, in each case, to the extent such interest expense is not paid or required to be paid in cash during the relevant period.

“Net Income” shall mean, with respect to Equistar and its Consolidated Subsidiaries for any period, the net income of Equistar and its Consolidated Subsidiaries for such period, adjusted to exclude the effect of any extraordinary items of gain or loss.

“Net Interest Expense” shall mean, with respect to Equistar and its Consolidated Subsidiaries for any period, (a) the interest expense of Equistar and its Consolidated Subsidiaries, including, without limitation, (i) the amortization of debt discounts, (ii) the amortization of all fees (including, without limitation, fees with respect to interest rate protection agreements) payable in connection with the incurrence of Indebtedness to the extent included in interest expense and (iii) the portion of any payments due under any Capitalized Lease Obligation allocable to interest expense and (iv) to the extent not otherwise included in such interest expense, all Yield accrued in respect of the Receivable Interests, less (b) the amount of interest income of Equistar and its Consolidated Subsidiaries for such period, in each case determined on a consolidated basis. For purposes of the

4

foregoing, interest expense shall be determined after giving effect to any net payments made or received by Equistar and its Consolidated Subsidiaries with respect to interest rate protection agreements entered into as a hedge against interest rate exposure.

“Permitted Business” shall mean the petrochemical, chemical and petroleum refining businesses and any business reasonably related, incidental, complementary or ancillary thereto.

“Permitted Refinancing” shall mean an incurrence of Indebtedness to the extent the proceeds thereof are applied to refinance Indebtedness of Equistar or a Subsidiary (and to pay related fees and expenses); provided that (x) the Indebtedness so incurred shall mature no earlier than 91 days after the Termination Date and no payment, prepayment, redemption or repurchase of the principal amount thereof shall be required by the terms thereof on or prior to 91 days after the Termination Date (other than on terms no less favorable to Equistar or such Subsidiary than the corresponding terms governing the 2001 Indenture (as in effect on the Closing Date, whether or not such Indenture is in effect at the time in question)) and (y) the material covenants and defaults in the agreements governing such Indebtedness shall be no less favorable to Equistar and its Subsidiaries than the terms of the 2001 Indenture (as in effect on the Closing Date, whether or not such Indenture is in effect at the time in question).

“Receivables Fees” shall have the meaning assigned to such term in the Indentures (as in effect on the Closing Date, whether or not any such Indenture is in effect at the time in question).

“Sale/Leaseback Transaction” shall mean any arrangement, directly or indirectly, with any Person whereby Equistar or any Subsidiary shall sell or transfer any property, real or personal, and used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

“Temporary Cash Investment” shall mean any Investment in (a) securities issued or directly and fully guaranteed or insured by the United States of America government or any agency or instrumentality thereof having maturities of not more than one year from the date of acquisition, (b) demand deposits, time deposits and certificates of deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year from the date of acquisition and overnight bank deposits, in each case with any bank or trust company organized or licensed under the laws of the United States of America or any State thereof having capital, surplus and undivided profits in excess of $250 million, (c) repurchase obligations with a term of not more than seven days for underlying securities of the type described in clauses (a) and (b) above entered into with any financial institution meeting the

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qualifications specified in clause (b) above, (d) commercial paper rated at least P-1 by Moody’s and A-1 by S&P or, if such commercial paper is rated by only one such agency, at least such rating from such agency, (e) investments in any Dollar denominated money market fund as defined by Rule 2a-7 of the General Rules and Regulations promulgated under the Investment Company Act of 1940 and (f) in the case of a Foreign Subsidiary, substantially similar investments denominated in foreign currencies (including similarly capitalized foreign banks).

Section 1.02. Accounting Terms. (a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if Equistar notifies the Agent that it requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Agent notifies Equistar that the Required Purchasers request an amendment to any provision hereof for such purpose), then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

(b) In the event of any future material acquisition or disposition of assets by Equistar and its Subsidiaries, determinations of EBITDA in respect of any period of four consecutive fiscal quarters shall be made on a pro forma basis as if such transaction had been consummated on the first day of such period.

Section 1.03. Terms Generally. Except where the context requires otherwise, the definitions in Section 1.01 shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Unless otherwise stated, references to Sections, Articles and Schedules made herein are to Sections, Articles or Schedules, as the case may be, of this Agreement. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words in a visible form. References to any agreement or contract are to such agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of such Person. References “from” or “through” any date mean, unless otherwise specified, “from and including” or “through and including”, respectively.

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ARTICLE 2

REPRESENTATIONS AND WARRANTIES

Equistar represents and warrants that:

Section 2.01. Financial Projections. With respect to the financial projections most recently delivered pursuant to Section 3.04(b) of this Agreement, such financial projections have been prepared in good faith on the basis of assumptions believed at the time of their preparation and delivery by Equistar in good faith to be reasonable in light of the then current and reasonably foreseeable business conditions of Equistar and its Subsidiaries existing at the time of preparation thereof, it being understood by the Agent and the Purchasers that actual results will likely vary from the projected results set forth therein.

Section 2.02. Environmental and Safety Matters. Equistar and each of its Subsidiaries and the businesses conducted by them have complied in all respects with all Federal, state, local and other statutes, ordinances, orders, judgments, rulings, regulations and agreements and governmental restrictions relating to the environment or to protection of the environment or to employee health and safety (“Environmental and Safety Laws”) except for violations that either alone or in the aggregate could not reasonably be expected to result in a Material Adverse Effect. Neither Equistar nor any of its Subsidiaries manages or handles any hazardous wastes, hazardous substances, hazardous materials, toxic substances or toxic pollutants regulated by Environmental and Safety Laws in violation of such Environmental and Safety Laws where such violation could reasonably be expected to result, individually or together with other violations, in a Material Adverse Effect. To the best of its knowledge, neither Equistar nor any of its Subsidiaries has any liabilities or contingent liabilities relating to environmental or employee health and safety matters which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

Section 2.03. Title to Properties. Equistar and each Subsidiary has good and, in the case of real property, marketable or indefeasible title to, or valid leasehold interests in or other rights to use, all its material assets and properties, except for such assets and properties as are no longer being used or useful in the conduct of its businesses or have been disposed of as permitted by the terms of this Agreement and except for defects in title and exceptions that either alone or in the aggregate could not reasonably be expected to result in a Material Adverse Effect. All such material assets and properties of Equistar and its Material Subsidiaries are free and clear of all Liens other than those permitted by Section 4.01.

Section 2.04. Subsidiaries. Schedule 2.04 sets forth the name of, and the ownership interest of Equistar in each Material Subsidiary and each other Subsidiary of Equistar as of the Closing Date.

Section 2.05. Insurance. Schedule 2.05 sets forth a description of all insurance maintained by or on behalf of Equistar and its Subsidiaries as of the Closing Date. As of the Closing Date, all premiums in respect of such insurance currently due have been paid.

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Section 2.06. Labor Matters. As of the Closing Date, there are no strikes, lockouts or slowdowns against Equistar or any Subsidiary pending or, to the knowledge of Equistar, threatened.

Section 2.07. Solvency. Both before and after giving effect to (i) each Purchase to be made under the Receivables Purchase Agreement on the Closing Date and on the date of each other Purchase, (ii) the disbursement of the proceeds of any Capital Investment, (iii) the consummation of each other transaction contemplated by the Transaction Documents, (iv) the consummation of the transactions contemplated by the ABF Agreement and the ABF Collateral Documents and (v) the payment and accrual of all transaction costs in connection with the foregoing, Equistar and each other Transaction Party, individually and taken as a whole, is Solvent.

ARTICLE 3

AFFIRMATIVE COVENANTS

Equistar agrees that:

Section 3.01. Existence. It will cause each of its Material Subsidiaries to do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, except as otherwise permitted by Section 4.03.

Section 3.02. Business and Properties. Except as otherwise permitted by Section 4.03 or to the extent the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, it will cause each of its Material Subsidiaries, at all times, to (a) do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect the rights, licenses, permits, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business; and (b) maintain, preserve and protect all property material to the conduct of such business.

Section 3.03. Maintenance of Insurance. It will, and will cause each of its Material Subsidiaries to maintain insurance consistent with the insurance maintained on the date hereof or otherwise consistent with general practices in effect from time to time in Equistar’s industry, in either case to the extent available to Equistar and its Material Subsidiaries on commercially reasonable terms, and furnish to the Agent upon request information in reasonable detail as to the insurance so carried.

Section 3.04. Financial Projections, Reports, Etc. It will furnish to the Agent for distribution to the Purchasers:

(a) Concurrently with the financial statements delivered pursuant to Section 5.5(b) and Section 5.5(c) of the Receivables Purchase Agreement, a

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certificate of a Principal Financial Officer, certifying compliance, as of the dates of the financial statements being furnished at such time and for the periods then ended, with the covenants set forth in Section 4.01 and 4.10 and demonstrating compliance with the covenant set forth in Section 4.02, when applicable, and the provisions of Section 7.1(l) of the Receivables Purchase Agreement.;

(b) Not later than the earlier of (i) 15 days after Equistar has received the approval of its Partnership Governance Committee and (ii) 30 days after the commencement of each Fiscal Year, the Annual Plan. For purposes hereof, “Annual Plan” shall mean, for any Fiscal Year before the Termination Date, the financial projections of Equistar and its Subsidiaries for such Fiscal Year prepared by management of Equistar for approval of the Partnership Governance Committee and substantially in the form heretofore provided to the Agent pursuant to 3.1(d)(iii) of the Receivables Purchase Agreement.

Section 3.05. Books of Accounts; Examination of Records; Audits. It will, and will cause each of its Material Subsidiaries to, keep and maintain proper books of record and account and a system of accounting established and administered in accordance with sound business practice and adequate to permit the preparation of the financial statements required to be delivered under Section 5.5 of the Receivables Purchase Agreement, and, subject to the provisions of Sections 5.1(f)(i) and 5.4(f)(i) of the Receivables Purchase Agreement, upon reasonable notice permit representatives of the Agent to have access to such books of record and account and the premises of Equistar or any Subsidiary at reasonable times and to make such excerpts from such books of record and account as such representatives reasonably deem necessary in connection with their evaluation of the ability of the Transaction Parties to perform their respective obligations under the Transaction Documents.

Section 3.06. Compliance with Laws, Etc. It will cause each of its Material Subsidiaries to comply with all applicable laws, rules and regulations, and all orders of any Governmental Authority applicable to it or any of its property, business, operations or transactions to the extent noncompliance could reasonably be expected to result in a Material Adverse Effect.

Section 3.07. Environmental Compliance. It will, and will cause each of its Material Subsidiaries to, comply with all Environmental and Safety Laws, except where the failure so to comply could not reasonably be expected to result in a Material Adverse Effect, and provide prompt written notice to the Agent following the receipt of any notice of any violation of any Environmental and Safety Laws from any Federal, state or local Governmental Authority or any other complaint or other written claim from any Person with respect to any Environmental Liability, in each case, which could reasonably be expected to result in liability or expenses in excess of $20,000,000.

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ARTICLE 4

NEGATIVE COVENANTS

Equistar covenants and agrees that it will not, and will not permit any of its Material Subsidiaries, either directly or indirectly, to:

Section 4.01. Liens. Incur, create, assume or permit to exist any Lien on any of its property or assets, whether owned at the date hereof or hereafter acquired, or assign or convey any rights to or security interests in any future revenues, except:

(a) Liens incurred and pledges and deposits made in the ordinary course of business in connection with workmen’s compensation, disability or unemployment insurance, old-age pensions, retiree health benefits and other social security benefits and deposits securing liabilities to insurance carriers under insurance or self-insurance arrangements;

(b) Liens securing the performance of bids, tenders, leases, government contracts, other contracts (other than for Indebtedness), statutory and regulatory obligations, surety, customs bonds and other obligations of a like nature, incurred as an incident to and in the ordinary course of business;

(c) Liens encumbering pipelines or pipeline facilities that arise by operation of law, and other Liens imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and vendors’ liens, incurred in good faith in the ordinary course of business and securing obligations which are not overdue for a period of more than 90 days or which are being contested in good faith by appropriate proceedings as to which Equistar or any such Subsidiary, as the case may be, shall have, to the extent required by GAAP, set aside on its books adequate reserves;

(d) Liens securing the payment of taxes, assessments and governmental charges or levies, either (i) not delinquent or (ii) being contested in good faith by appropriate legal or administrative proceedings and as to which Equistar or any such Subsidiary, as the case may be, shall have, to the extent required by GAAP, set aside on its books adequate reserves;

(e) (i) zoning restrictions, easements, licenses, reservations, provisions, covenants, conditions, waivers, restrictions on the use of property, minor irregularities of title and similar encumbrances incurred or suffered in the ordinary course of business (and with respect to leasehold interests, the interest of the landlord or owner in the leased property and mortgages, obligations, liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the leased property, with or without consent of the lessee) and (ii) licenses or leases of patents, copyrights, trademarks, tradenames and other intellectual property, which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business;

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(f) Liens (including the interest of a lessor under a capital lease) upon any real property or equipment (including general intangibles and proceeds related thereto) acquired (by merger or otherwise), constructed or improved by Equistar or any Material Subsidiary which are created or incurred prior to or within 180 days after such acquisition, construction or improvement to secure or provide for the payment of any part of the purchase price of such real property or equipment or the cost of such construction or improvement (including any Indebtedness incurred to finance such purchase, improvement or construction cost), including carrying costs (but no additional amounts); provided that any such Lien shall not apply to any other property of Equistar or any Material Subsidiary;

(g) Liens on property existing at the time such property is acquired (by merger or otherwise) by Equistar or any Material Subsidiary (provided that such Liens do not apply to any other property of Equistar or any Material Subsidiary and such Liens and the obligations secured thereby were not created in contemplation of the acquisition by Equistar or such Material Subsidiary of such property) and Liens on property of any Person at the time such Person becomes a Material Subsidiary (provided that such Liens do not apply to any other property of Equistar or any Material Subsidiary and such Liens and the obligations secured thereby (other than any Liens on real property or equipment and the obligations secured thereby) were not created in contemplation of such Material Subsidiary’s acquisition of such property or of such Person becoming a Material Subsidiary);

(h) Liens on the property or assets of any Material Subsidiary in favor of Equistar or any Subsidiary;

(i) Liens resulting from the deposit of funds or evidences of Indebtedness in trust for the purpose of defeasing Indebtedness of Equistar or any of its Material Subsidiaries (which defeasance is otherwise permitted under this Agreement) having an aggregate principal amount at any one time outstanding not to exceed $25,000,000;

(j) Liens created by the Transaction Documents;

(k) extensions, renewals and replacements of Liens referred to in clauses (a) through (i) above; provided that any such extension, renewal or replacement Lien shall be limited to the property or assets covered by the Lien extended, renewed or replaced and that the obligations secured by any such extension, renewal or replacement Lien shall be in an amount not greater than the amount of the obligations secured by the Lien extended, renewed or replaced;

(l) prejudgment Liens which are being contested in good faith by appropriate proceedings;

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(m) judgment Liens which are being contested in good faith by appropriate proceedings and Liens securing appeal or similar surety bonds therefor; provided that (i) no Event of Default exists under Section 7.1(k) of the Receivables Purchase Agreement relating thereto and (ii) the aggregate amount secured by such Liens does not exceed $20,000,000 (exclusive of Liens securing judgments covered by (x) insurance in respect of which the carrier has not contested coverage or (y) appeal or similar surety bonds);

(n) licenses, leases or subleases granted to others (other than those described in clause (e)) and Liens arising under capacity reservation or similar agreements, in each case to the extent that any of the foregoing do not materially interfere with the ordinary course of business of Equistar and its Subsidiaries;

(o) customary Liens for the fees, costs and expenses of trustees and escrow agents pursuant to any indenture, escrow agreement or similar agreement establishing a trust or escrow arrangement, and Liens pursuant to merger agreements, stock purchase agreements, asset sale agreements, option agreements and similar agreements in respect of the disposition of property or assets of Equistar and the Subsidiaries (but in any event not securing Indebtedness), to the extent such dispositions are permitted hereunder and such Liens relate only to the assets or properties to be disposed of;

(p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(q) customary Liens not encumbering Eligible Inventory in favor of issuers of documentary letters of credit;

(r) Liens encumbering customary initial deposits and margin deposits, netting provisions and setoff rights in favor of counterparties securing Indebtedness under Hedging Agreements;

(s) Liens arising under any Sale/Leaseback Transaction; provided that any such Lien shall be limited to the assets subject to such Sale/Leaseback Transaction and shall not encumber any Collateral;

(t) Liens arising in connection with the pledge of any Equity Interests in any joint venture (that is not a Material Subsidiary) or any Subsidiary (other than a Material Subsidiary) to secure Non-Recourse Debt of such joint venture or Subsidiary, which pledge is made by a Material Subsidiary the activities of which are limited to making and managing Investments, and owning Equity Interests, in such joint venture or Subsidiary, but only for so long as its activities are so limited. For purposes hereof, “Non-Recourse Debt” shall mean Indebtedness as to which (i) the lenders will not, pursuant to the terms in the agreements governing such Indebtedness, have any recourse to the stock or assets of Equistar or any Material

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Subsidiary, other than Equity Interests of a joint venture that is not a Material Subsidiary or a Subsidiary that is not a Material Subsidiary pledged by Equistar or any Material Subsidiary as contemplated in the preceding sentence and (ii) no default thereunder would, as such, constitute a default under any Indebtedness of Equistar or any Material Subsidiary or give any rights to or in other assets of Equistar or any Material Subsidiary;

(u) Liens incurred or assumed in connection with the issuance of revenue bonds the interest on which is exempt from federal income taxation pursuant to Section 103(b) of the Code;

(v) Liens arising out of consignment or similar arrangements for the sale of goods entered into by Equistar or any Material Subsidiary in the ordinary course of business in accordance with industry practice;

(w) Liens on assets under construction securing progress or partial payments not constituting Indebtedness by a customer of Equistar or any Material Subsidiary relating to such assets;

(x) the interest of a lessor or licensor under an operating lease or license under which Equistar or any Material Subsidiary are lessee, sublessee or licensee, including protective financing statement filings;

(y) Liens created under the ABF Collateral Documents; and

(z) Liens on assets other than the Receivables, Related Security, Collections and proceeds thereof which are “Permitted Liens,” as such term is defined in the Indentures (as in effect on the Closing Date, whether or not any such Indenture is in effect at the time in question), and not otherwise permitted under this Section 4.01;

provided that, except for the Liens referred to in Sections 4.01(o) and 4.01(y), none of the foregoing exceptions shall permit Equistar or any Material Subsidiary to incur, create, assume or permit to exist any consensual Lien on the capital stock owned by it of any Material Subsidiary.

Section 4.02. Interest Coverage Ratio. If for any period of four consecutive fiscal quarters ending on or after March 31, 2005, the Interest Coverage Ratio calculated as of the end of such four-quarter period is less than 2:00 to 1:00, then an Event of Termination shall occur under this Section 4.02 if there shall be a period of five consecutive Business Days ending at any time during the immediately following fiscal quarter during which Total Excess Availability is less than $100,000,000.

Section 4.03. Merger, Etc. (a) Consolidate with or merge into any other Person, or permit another Person to merge into it, except that, so long as at the

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time thereof and immediately after giving effect thereto no Potential Event of Termination or Event of Termination has occurred and is continuing, (A) any Subsidiary that is not a Transaction Party may be merged, liquidated or dissolved into any other Subsidiary that is not a Transaction Party, (B) any Subsidiary other than the Seller may be merged, liquidated or dissolved into Equistar or into any other Transaction Party (other than the Seller) in a transaction in which the surviving Person is Equistar or such Transaction Party, (C) any other Person that is not a Subsidiary may be merged into Equistar or any other Transaction Party (other than the Seller) in a transaction in which the surviving Person is Equistar or a wholly owned Transaction Party and, in the case of any transaction in which the consideration (other than equity interests of Equistar) paid by Equistar and the Material Subsidiaries has an aggregate value in excess of 10% of Consolidated Net Tangible Assets as of the most recently ended fiscal quarter, Equistar has submitted to the Agent calculations reasonably satisfactory to the Agent showing pro forma compliance with Section 4.02 and (D) any Subsidiary that is neither the Seller nor (after giving effect to such transaction) another Transaction Party may be merged, liquidated or dissolved in connection with an Asset Sale of such Subsidiary otherwise permitted hereunder.

(b) In the case of Equistar, sell or otherwise dispose of all or substantially all of its assets (determined on a consolidated basis) to any other Person or Persons.

(c) Enter into any Asset Sale unless such Asset Sale is permitted by the Indentures (as in effect on the Closing Date, whether or not any such Indenture is in effect at the time in question); provided that this Section 4.03(c) shall apply to Asset Sales to Lyondell and its Subsidiaries only to the extent permitted by the Indentures.

Section 4.04. Organizational Documents; Change of Name; Change of Business. (a) Engage to any material extent in any business other than a Permitted Business; provided that Equistar and the Material Subsidiaries may engage in other businesses representing not more than 2% of Consolidated Net Tangible Assets of Equistar as shown on the most recent audited consolidated balance sheet of Equistar and its Consolidated Subsidiaries delivered pursuant to Section 5.5 of the Receivables Purchase Agreement; and provided further that a Material Subsidiary which was a Subsidiary before it became a Material Subsidiary may continue to engage in any business in which it was engaged at the time it became a Material Subsidiary.

(b) Permit Equistar Funding to hold any assets, become liable for any obligations or engage in any business activities; provided that Equistar Funding may be co-obligor with respect to Indebtedness of the Borrowers permitted under Section 4.10 and may engage in any activities directly related thereto or necessary in connection therewith.

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Section 4.05. Restrictive Agreements. Enter into or permit to exist any agreement that restricts the ability of any Material Subsidiary to pay dividends or other distributions, or to make or repay loans or advances, to Equistar or, in the case of dividends, to any other Subsidiary owning capital stock of such Subsidiary; provided that the foregoing shall not apply to:

(a) customary restrictions and conditions contained in (i) any agreement relating to the sale of a Material Subsidiary, or all or substantially all of its assets, pending such sale or (ii) any agreement relating to secured Indebtedness permitted by this Agreement, if such restrictions or conditions apply only to such Subsidiary or to the property or assets securing such Indebtedness, as the case may be;

(b) customary provisions in leases and other contracts restricting the assignment thereof;

(c) restrictions and conditions existing with respect to any Person at the time it becomes a Material Subsidiary and not created in contemplation of such Person becoming a Material Subsidiary, which restrictions are not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person becoming a Material Subsidiary;

(d) existing agreements as in effect on the Closing Date and listed on Schedule 4.05;

(e) restrictions arising under applicable law;

(f) restrictions contained in agreements governing Indebtedness permitted hereunder which restrictions are not materially less favorable to Equistar and its Subsidiaries than the terms of the 2001 Indenture (as in effect on the Closing Date, whether or not such Indenture is in effect at the time in question) and restrictions in Section 4.11 on dividends and distributions by a Subsidiary to Equistar or another Subsidiary;

(g) in the case of a Material Subsidiary that is a joint venture, customary restrictions on such Material Subsidiary contained in its joint venture agreement, which restrictions are consistent with the past practice of Equistar and members of the Existing Control Group (as conclusively evidenced by a resolution of the Partnership Governance Committee); or

(h) restrictions under the Transaction Documents.

Section 4.06. Business Acquisitions. Make any Business Acquisition unless after giving effect thereto, the aggregate cash consideration paid by Equistar and its Consolidated Subsidiaries for all Business Acquisitions consummated in any Fiscal Year would not exceed the sum of (i) $25,000,000 plus (ii) the net cash proceeds of any substantially contemporaneous issuance of

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Equity Interests by Equistar which do not constitute Indebtedness (including a capital contribution in respect of such Equity Interests) for the purpose of financing a particular Business Acquisition.

Section 4.07. Affiliate Transactions. Directly or indirectly (a) pay any funds to or for the account of any Affiliate, (b) make any investment in any Affiliate (whether by acquisition of stock or indebtedness, by loan, advance, transfer of property, guarantee or other agreement to pay, purchase or service, directly or indirectly, any Indebtedness, or otherwise), (c) lease, sell, transfer or otherwise dispose of any assets, tangible or intangible, to any Affiliate, or (d) participate in, or effect, any transaction with any Affiliate, except on terms that are no less favorable to Equistar or such Material Subsidiary, as the case may be, than those that could be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate; provided that the foregoing provisions of this Section shall not prohibit:

(i) any transaction not involving the Seller between (x) a Transaction Party and another Transaction Party or (y) Equistar and a Subsidiary, or a Subsidiary and another Subsidiary;

(ii) any Asset Sale to Lyondell or a Subsidiary of Lyondell permitted by Section 4.03(c), any payment permitted by Section 4.09(c)(ii), any dividend, distribution or other payment in respect of Equity Interests permitted by Section 4.11 or any Investment permitted by Section 4.12;

(iii) any Subsidiary from declaring or paying any lawful dividend or other payment ratably in respect of all its capital stock of the relevant class;

(iv) transactions or payments pursuant to any employment agreement or employee, officer or director benefit plans or arrangements entered into by Equistar or any Subsidiary in the ordinary course of business;

(v) customary loans, advances, fees and compensation paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of Equistar or any Subsidiary;

(vi) transactions in connection with the Transaction Documents; and

(vii) transactions entered into by a Person prior to the time such Person becomes a Material Subsidiary and not entered into in contemplation of such Person becoming a Material Subsidiary.

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Section 4.08. Hedging Agreements. Enter into any transaction involving Hedging Agreements, other than Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which Equistar or any Subsidiary is exposed in the conduct of its business or the management of its liabilities (as determined by a Principal Financial Officer in the exercise of his or her good faith business judgment).

Section 4.09. Prepayment of Debt. Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Indebtedness; provided, however, that Equistar or any Material Subsidiary may:

(a) prepay any obligations under the ABF Agreement in accordance with the terms of the ABF Agreement;

(b) make regularly scheduled or otherwise required repayments or redemptions of Indebtedness;

(c) prepay any Indebtedness payable to (i) a Equistar or a Subsidiary or (ii) Lyondell or a subsidiary of Lyondell, including any “JV Subsidiary” as defined in the Amended and Restated Credit Agreement among Lyondell and the lenders and agents party thereto dated as of June 27, 2002;

(d) make prepayments which are part of a Permitted Refinancing;

(e) pay off the railcar lease obligation identified as item              on Schedule 4.10;

(f) prepay or redeem other Indebtedness with the net cash proceeds of (i) a substantially contemporaneous issuance by Equistar of Equity Interests which do not constitute Indebtedness (including a capital contribution in respect of such Equity Interests) or (ii) voluntary or involuntary dispositions of assets (other than Receivables, Related Security, Collections and Restricted Accounts) by Equistar and its Subsidiaries; and

(g) prepay or redeem any other Indebtedness provided that before and after giving effect to such prepayment the daily average Total Excess Availability for the period of 30 consecutive calendar days then ended (calculated on a pro forma basis) is not less than $100,000,000;

provided that in no event shall Equistar or any Material Subsidiary make any payment in respect of any Indebtedness which is by its terms subordinated to the Obligations which payment is prohibited by the subordination provisions governing such Indebtedness.

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Section 4.10. Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except for the following:

(a) Indebtedness under the ABF Agreement and the ABF Collateral Documents;

(b) Indebtedness and railcar lease obligations existing on the date of this Agreement and disclosed on Schedule 4.10;

(c) Guarantees in respect of Indebtedness permitted by this Section 4.10;

(d) Capitalized Lease Obligations and purchase money Indebtedness incurred to finance the acquisition of fixed assets; provided, however, that the Capital Expenditures related thereto is otherwise permitted hereunder and that the aggregate outstanding principal amount of all such Capitalized Lease Obligations and purchase money Indebtedness shall not exceed $50,000,000 at any time;

(e) obligations arising under the Transaction Documents;

(f) Indebtedness represented by industrial revenue bonds to finance capital expenditures incurred to reduce NOx emissions in the Houston/Galveston region pursuant to a Texas Natural Resource Conservation Commission plan;

(g) Renewals, extensions, refinancings and refundings of Indebtedness permitted by clause (b), (d), (e) or (f) above or this clause (g); provided, however, that any such renewal, extension, refinancing or refunding is (i) in an aggregate principal amount not greater than the principal amount (excluding premium, if any, and costs of issuance) of, and (ii) on terms no less favorable taken as a whole to Equistar and its Material Subsidiaries than, and having a remaining weighted average life to maturity no shorter than, the Indebtedness being renewed, extended, refinanced or refunded;

(h) Indebtedness owing to any Transaction Party or any ABF Loan Party;

(i) Indebtedness represented by standby letters of credit, trade letters of credit or documentary letters of credit, in each case incurred in the ordinary course of business of Equistar and in an aggregate principal or face amount not to exceed $20,000,000 at any time; and

(j) Indebtedness permitted by the Indentures (as in effect on the Closing Date, whether or not any such Indenture is in effect at the time in question) and not otherwise permitted under this Section 4.10.

Section 4.11. Restricted Payments. Declare or pay any dividend or make any distribution on account of its or such Material Subsidiary’s Equity Interests (other than a dividend or distribution paid by a Subsidiary to Equistar or another Subsidiary or, if paid by a Subsidiary which is not directly or indirectly wholly

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owned by Equistar, ratably to all holders of a class or series of Equity Interests in such non-wholly-owned Subsidiary or on a basis more favorable to a Transaction Party) or purchase, redeem or otherwise acquire or retire for value any Equity Interests of Equistar or any Affiliate of Equistar that controls Equistar, except to the extent that, both before and after giving effect to such dividend, distribution, purchase, redemption, acquisition or retirement, (i) except in the case of a Permitted Dividend, an Equity Refinancing or distributions or payments of Receivables Fees, the daily average Total Excess Availability exceeds $100,000,000 for the period of 30 consecutive calendar days then ended and (ii) no Default would occur and be continuing (provided that this clause (ii) of Section 4.11 shall apply to Permitted Dividends only to the extent permitted by the Indentures). It is understood that distributions by any Subsidiary or Joint Venture of chemicals to a holder of Equity Interests of such Subsidiary or Joint Venture if such distributions are made pursuant to a provision in a joint venture agreement or other arrangement entered into a connection with the establishment of such Joint Venture or Subsidiary that requires such holder to pay a price for such chemicals equal to that which would be paid in a comparable transaction negotiated on an arms-length basis (or pursuant to a provision that imposes a substantially equivalent requirements) are not subject to the foregoing limitations.

Section 4.12. Restricted Investments. Make, acquire or hold any Investment other than (i) Investments existing on the Closing Date and set forth in Schedule 4.12, (ii) Investments in Subsidiaries permitted by the Indentures (as in effect on the Closing Date, whether or not any such Indenture is in effect at the time in question), (iii) Investments permitted by Section 4.06, (iv) Investments in any Joint Venture Subsidiary permitted by the Indentures (as in effect on the Closing Date whether or not such Indenture is in effect at the time in question), (v) Investments represented by amounts in deposit accounts or securities accounts required to be maintained under the “control” (as defined in the UCC) of the ABF Administrative Agent under the ABF Collateral Documents or under the “control” of the Agent, (vi) Investments made, acquired or held in the ordinary course of business, (vii) Investments in the Seller and (viii) Investments permitted by the Indentures (as in effect on the Closing Date, whether or not any such Indenture is in effect at the time in question).

Section 4.13. Capital Expenditures. For each Fiscal Year, the Capital Expenditures of Equistar and its Consolidated Subsidiaries shall not exceed the applicable Limit Amount set forth in the table below, plus the amount, if any (not to exceed 10% of the Limit Amount, if any, for the immediately preceding Fiscal Year), by which their Capital Expenditures for the immediately preceding Fiscal Year is less than the Limit Amount for such Fiscal Year set forth below:

Fiscal Year	Limit Amount
2003	$	125,000,000
2004	$	200,000,000
2005 or thereafter	$	250,000,000

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ARTICLE 5

UNDERTAKING AS TO OTHER

ORIGINATORS AND SERVICER

Section 5.01. Unconditional Undertaking. Equistar hereby unconditionally and irrevocably undertakes and agrees with and for the benefit of each of the Agent, and the Purchasers (collectively, the “Indemnified Parties”) to cause the due and punctual performance and observance by each of (a) the Servicer (so long as any Affiliate of Equistar is the Servicer) and (b) each of the other Originators, if any, in each case of clauses (a) and (b), of all of the terms, covenants, agreements, undertakings and other obligations on the part of the Servicer (so long as any Affiliate of Equistar is the Servicer) or each of the other Originators, as applicable, to be performed or observed under each of the Receivables Purchase Agreement, the Receivables Sale Agreement and the other Transaction Documents and any other documents delivered in connection therewith in accordance with the terms thereof, including, without limitation, the obligations to pay when due all monetary obligations of each of the Servicer (so long as any Affiliate of Equistar is the Servicer) and the other Originators now or hereafter existing under the Receivables Purchase Agreement, the Receivables Sale Agreement and the other Transaction Documents, whether for Collections received, deemed Collections, interest, indemnifications, fees, costs, expenses or otherwise (such terms, covenants, agreements, undertakings and other obligations being the “Obligations”) and undertakes and agrees to pay any and all expenses (including reasonable counsel fees and out-of-pocket expenses) incurred by the Indemnified Parties, or any of them, in enforcing its rights under this Agreement. In the event that the Servicer (so long as any Affiliate of Equistar is the Servicer) or any of the other Originators shall fail in any manner whatsoever to perform or observe any of its Obligations when the same shall be required to be performed or observed, then Equistar shall itself duly and punctually perform or observe, or cause to be duly and punctually performed and observed, such Obligation, and it shall not be a condition to the accrual of the obligation of Equistar hereunder to perform or observe any Obligation (or to cause the same to be performed or observed) that any Indemnified Party shall have first made any request of or demand upon or given any notice to the Servicer (so long as any Affiliate of Equistar is the Servicer) or any of the other Originators or any of their successors or assigns, or have instituted any action or proceeding against the Servicer (whether or not any Affiliate of Equistar is the Servicer) or any of the other Originators or any of their successors or assigns in respect thereof.

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Section 5.02. Obligations Absolute. Equistar undertakes and agrees that the Obligations will be paid and performed strictly in accordance with the terms of the Transaction Documents and each other document delivered in connection therewith, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Indemnified Party with respect thereto. The obligations of Equistar under this Article 5 are independent of the Obligations, and a separate action or actions may be brought and prosecuted against Equistar to enforce the obligations under this Article 5, irrespective of whether any action is brought against the Servicer (if any Affiliate of Equistar is the Servicer) or any of the other Originators or whether the Servicer (if any Affiliate of Equistar is the Servicer) or any of the other Originators are joined in any such action or actions. The liability of Equistar under this Article 5 shall be irrevocable, absolute and unconditional irrespective of, and to the extent permitted by law, Equistar hereby irrevocably waives any defenses (except for any defenses arising or accruing as a result of the gross negligence or willful misconduct of any of the Indemnified Parties) it may now or hereafter have in any way relating to, any or all of the following:

(a) any lack of validity or enforceability of the Obligations or of any Pool Receivable, any Receivable Interest or any Related Security, or of any Transaction Document or any other document relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations under the Transaction Documents or any other document relating thereto, or any other amendment or waiver of or any consent to departure from any Transaction Document or any other document relating thereto;

(c) any taking, exchange, release or nonperfection of or failure to transfer title to any asset or collateral, or any taking, release, amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations;

(d) any manner of application of any asset or collateral, or proceeds thereof, to all or any of the Obligations, or any manner of sale or other disposition of any asset or collateral for all or any of the Obligations or any other obligations of the Servicer (whether or not any Affiliate of Equistar is the Servicer) or any of the Originators under the Transaction Documents or any other document relating thereto;

(e) any change, restructuring or termination of the structure or existence of the Servicer (whether or not any Affiliate of Equistar is the Servicer) or any of the other Originators;

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(f) any failure of any Indemnified Party to disclose to Equistar any information relating to the financial condition, operations, properties or prospects of any of the other Originators now or in the future known to such Indemnified Party (Equistar waiving any duty on the part of such Indemnified Party to disclose such information);

(g) any impossibility or impracticality of performance, illegality, any act of any government, or any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Indemnified Party that might constitute a defense available to, or a discharge of, the Servicer (whether or not any Affiliate of Equistar is the Servicer) or any of the Originators or a guarantor of the Obligations; or

(h) any other circumstance, event or happening whatsoever, whether foreseen or unforeseen and whether similar or dissimilar to anything referred to above in this Section 5.02.

Each of Equistar and, by its acceptance hereof, the Agent, the Purchasers and the other Indemnified Parties agrees that the obligations of Equistar under this Agreement, including Article 5 hereof, and any liability of Equistar in respect of its representations, warranties and agreements under this Agreement, do not constitute in any way (i) a guarantee of the obligations of the Seller under the Transaction Documents or (ii) any agreement to indemnify or hold harmless any Indemnified Party from and against any failure to collect amounts in respect of a Pool Receivable, to the extent such failure results from a discharge of the Obligor with respect thereto in a proceeding in respect of such Obligor under applicable bankruptcy laws or otherwise results from such Obligor’s financial inability to pay such amounts.

The provisions of this Article 5 shall continue to be effective or be reinstated, as the case may be, if any time (x) any payment in connection with any of the Obligations is rescinded or must otherwise be returned by any Indemnified Party, or (y) any performance or observance of any Obligation is rescinded or otherwise invalidated, upon the insolvency, bankruptcy or reorganization of the Servicer (if any Affiliate of Equistar is the Servicer) or any of the other Originators or otherwise, all as though payment had not been made or as though such Obligation had not been performed or observed.

Section 5.03. Waivers And Acknowledgments. (a) To the extent permitted by applicable law, Equistar hereby waives promptness, diligence, notice of acceptance and any other notice (except to the extent that such other notice is expressly required to be given to Equistar by any Indemnified Party pursuant to any other Transaction Document) with respect to any of the Obligations and this Agreement and any other document related thereto, and any requirement that any Indemnified Party protect, secure, perfect or insure any lien or any property subject thereto or exhaust any right or take any action against the Servicer (whether or not any Affiliate of Equistar is the Servicer) or any of the other Originators or any other Person or any asset or collateral.

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(b) Equistar hereby waives any right to revoke this Agreement, and acknowledges that this Agreement is continuing in nature and applies to all Obligations whether existing now or in the future.

Section 5.04. Subrogation. Equistar shall not exercise or assert any rights that it may now have or hereafter acquire against the Servicer (to the extent Equistar is not the Servicer), or any of the other Originators that arise from the existence, payment, performance or enforcement of Equistar’s obligations under this Agreement or any other Transaction Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification or any right to participate in any claim or remedy of any Indemnified Party against such Servicer or any of the other Originators or any asset or collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from such Servicer or any of the other Originators, directly or indirectly, in cash or other property or by setoff or in any other manner, payment or security on account of such claim, remedy or right, unless and until all amounts in connection with the Obligations and all amounts payable under this Agreement shall have been paid in full and all other amounts payable to the Indemnified Parties under the Transaction Documents shall have been paid in full. If any amount shall be paid to Equistar in violation of the preceding sentence at any time prior to the later of (i) the payment in full of the Obligations and all other amounts payable under this Agreement and all amounts payable to the Indemnified Parties under the Transaction Documents and (ii) the Termination Date, such amount shall be held in trust for the benefit of the Indemnified Parties and shall forthwith be paid to the Agent to be credited and applied to the Obligations, whether matured or unmatured, in accordance with the terms of the Transaction Documents or to be held by the Agent as collateral security for any Obligations payable under this Agreement thereafter arising.

ARTICLE 6

MISCELLANEOUS

Section 6.01. Notices. (a) All notices and other communications hereunder shall, unless otherwise stated herein, be given in writing or by any telecommunication device capable of creating a written record (including, with respect to Approved Electronic Communications, electronic mail), (i) to each of Equistar, the Agent and the Initial Purchasers, at its address set forth under its name on the signature pages of the Receivables Purchase Agreement or (ii) to each Purchaser other than the Initial Purchasers, at its address specified on the Assignment and Acceptance pursuant to which it became a Purchaser under the

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Receivables Purchase Agreement or, in either case, at such other address as shall be designated by such party in a notice to the other parties hereto given as provided herein or in the Receivables Purchase Agreement.

(b) All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by telecopy equipment of the sender, or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 6.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 6.01.

(c) Notices and other communications hereunder not constituting Approved Electronic Communications may be delivered or furnished by electronic communications pursuant to procedures approved by the Agent and Equistar; provided that approval of such procedures may be limited to particular notices or communications.

Section 6.02. No Waivers. No failure or delay by any Indemnified Party exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 6.03. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by Equistar and consented by to the Required Purchasers (and, if the rights or duties of the Agent are affected thereby, by it).

Section 6.04. Continuing Agreement; Assignments under Receivables Purchase Agreement. This Agreement is a continuing agreement and shall, subject to the reinstatement provisions contained in Section 5.02, (a) remain in full force and effect until the later of (i) the payment and performance in full of the Obligations and the payment of all other amounts payable under this Agreement and (ii) the Termination Date, (b) be binding upon Equistar, its successors and permitted assigns, and (c) inure to the benefit of, and be enforceable by, the Indemnified Parties and each of their respective successors and permitted transferees and assigns. Without limiting the generality of clause (c) of the immediately preceding sentence, (A) any Purchaser may assign all or any of its Receivables Interests under the Receivables Purchase Agreement in accordance with the terms thereof to any Eligible Assignee, and (B) the Agent may be replaced pursuant to the provisions the Receivables Purchase Agreement, and such Eligible Assignee, or such replacement Agent, shall thereupon become

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vested with all the benefits in respect thereof granted to such Purchaser, the Issuing Bank or the Agent, as the case may be, herein or otherwise.

Section 6.05. Successors. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that Equistar may not assign or otherwise transfer any of its rights under this Agreement without the prior written consent of the Agent and the Purchasers.

Section 6.06. Governing Law; Submission to Jurisdiction. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York. To the extent permitted by applicable law, Equistar hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in the Borough of Manhattan in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Equistar irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

Section 6.07. Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective on the date that the Agent shall have received counterparts hereof signed by Equistar (or receipt by the Agent in the form satisfactory to it of facsimile or other written confirmation from Equistar of execution of a counterpart hereof by Equistar).

Section 6.08. WAIVER OF JURY TRIAL. EQUISTAR AND, BY ACCEPTANCE HEREOF, THE AGENT, EACH PURCHASER AND EACH OTHER INDEMNIFIED PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATION TO THIS AGREEMENT OR THE ACTIONS OF THE AGENT OR ANY PURCHASER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

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IN WITNESS WHEREOF, Equistar has caused this Agreement to be duly executed by an authorized officer as of the day and year first above written.

EQUISTAR CHEMICALS, LP
By:	/s/ Karen A. Twitchell
	Name:	Karen A. Twitchell
	Title:	Principal Financial Officer
	Address:	1221 McKinney Street Suite 1600 Houston, TX 77010
	Facsimile:	(713) 652-4598

[Undertaking Agreement]

EX-99.1

Exhibit 99.1

News Release

For information contact:

Doug Pike (investor relations), 713-309-7141

Susan Moore (media), 713-652-4645

FOR IMMEDIATE RELEASE

Equistar Chemicals Successfully Completes Financing Plan

HOUSTON, December 17, 2003 – Equistar Chemicals, LP announced today the completion of a new $450 million, four-year, accounts receivable sales facility and a new $250 million, four-year, inventory-based revolving credit facility. These facilities replace Equistar’s previous $100 million accounts receivable sales agreement as well as a $354 million revolving credit facility. Equistar believes that the new facilities will have the advantages of providing more liquidity, more financial flexibility and lower-cost funding than the previous credit facility.

Had these facilities been in place as of September 30, 2003, the aggregate amount of funds available under these facilities would have been approximately $540 million versus the $454 million provided under the previous agreements. The average interest rates on these new facilities are modestly less than those of the previous revolving credit facility.

With the completion of these actions, Equistar is no longer subject to the quarterly financial ratio covenant tests required under the previous credit facility. However, after March 30, 2005 there will be one ratio test which, if not met, would reduce availability under the new facilities by $25 million versus the availability prior to that date. Additionally, the remaining covenants under the new facilities are generally no more restrictive than those contained in Equistar’s previous credit facility, and there are no ratings triggers in either of the new facilities.

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Equistar Chemicals, LP, headquartered in Houston, Texas, is a joint venture between Lyondell Chemical Company and Millennium Chemicals Inc. and combines their olefins, polymers and oxygenated chemicals businesses. Equistar is one of the world’s largest producers of ethylene, propylene and polyethylene and a leading producer of ethylene oxide, ethylene glycol, specialty polymers, wire and cable resins, and polyolefin powders. Equistar was formed in December 1997 and has 16 manufacturing sites located primarily along the U.S. Gulf Coast and in the Midwest.