Exhibit 10.1
 
 
 
2008 Amended And Restated
Production Agreement
Between
BP Amoco Chemical Company
And
Sterling Chemicals, Inc.
 
Effective as of January 1, 2008
 

 

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2008 Amended and Restated
Production Agreement
Table Of Contents

              Page
Article 1 Definitions
    1    
Article 2 The Term
    10    
Article 3 Supply of Acetic Acid
    15    
Article 4 Shipment Instructions
    17    
Article 5 Manufacturing Methods; Changes in Specifications
    17    
Article 6 Payment for Acetic Acid
    19    
Article 7 Product Ownership, Deliveries and Shipments
    22    
Article 8 Testing
    23    
Article 9 Measurement
    24    
Article 10 Storage of Acetic Acid by Company
    25    
Article 11 Operation of Unit and Related Matters
    26    
Article 12 Shut-Downs of the Unit
    27    
Article 13 Insurance
    29    
Article 14 Access to the Unit
    30    
Article 15 Methanol Supply
    30    
Article 16 Special Expenditure
    32    
Article 17 Capital Expenditures
    33    
Article 18 Personnel
    34    
Article 19 Representations and Warranties of the Company
    34    
Article 20 Representations and Warranties of BP
    35  

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              Page
Article 21 Participation in Negotiations
    36    
Article 22 Access to Information
    36    
Article 23 Semiannual Meetings
    37    
Article 24 Financial Assurances
    38    
Article 25 Arbitration
    38    
Article 26 Confidentiality and Intellectual Property
    39    
Article 27 Events of Default; Other Breaches; Remedies
    40    
Article 28 SEC Reports
    42    
Article 29 Survival
    42    
Article 30 Indemnification
    42    
Article 31 Additional Rights and Liabilities
    45    
Article 32 Force Majeure
    45    
Article 33 Assignments
    46    
Article 34 General
    48    
Exhibits:
       

     
 
  A   Company Fixed Costs
 
  B   Methanol Specifications
 
  C   Acetic Acid Specifications
 
  D   Legal Description of the Land of the Unit
 
  E   Variable Costs
 
  F   Acetic Acid Transfer Price Formula

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2008 Amended and Restated
Production Agreement
          This 2008 Amended and Restated Production Agreement executed August
20, 2008 but effective as of the Effective Date (as defined below) is by and
between BP Amoco Chemical Company, a Delaware corporation, and Sterling
Chemicals, Inc., a Delaware corporation.
Preliminary Statements

  1.   BP Amoco Chemical Company (successor in interest to BP Chemicals Inc., an
Ohio corporation) and Sterling Chemicals, Inc. are parties to that certain
Second Amended and Restated Production Agreement dated effective as of August 1,
1996 (as amended, the “Existing Agreement”).     2.   The parties hereto desire
to amend the Existing Agreement in certain respects and to restate the Existing
Agreement, as so amended, in its entirety.

          Now, Therefore, in consideration of their mutual promises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Existing Agreement is hereby amended and restated to read in
its entirety as follows:
Article 1
Definitions
          Unless otherwise stated in this Agreement, the following terms shall
have the meanings ascribed to them below, and the following definitions shall be
equally applicable to both the singular and plural forms of any of the terms
herein defined:
     2008 Profit Share Adjustment: An amount equal to (i) the aggregate amount
of all 2008 Profit Share Installment Payments paid by BP, plus (ii) an amount
equal to the aggregate ***** reimbursed by BP during 2008 that pertain to the
2008 Contract Year plus (iii) *****.
     2008 Profit Share Installment Payments. As defined in Section 6.6(b)
hereof.
     Acetic Acid: Acetic acid produced in the Unit and meeting the
Specifications in effect from time to time pursuant to this Agreement.
     Acetic Acid Measuring Equipment: Shore tanks located on the Unit for
measuring deliveries of Acetic Acid and Unit Product to be loaded into barges or
ships, scales located at the Plant for measuring deliveries of Acetic Acid and
Unit Product to be loaded into tank trucks and rail cars and any meters and
instruments capable of measuring the quantity of Acetic Acid and Unit Product
delivered hereunder, including but not limited to pipeline meters.

 

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     Acetic Acid Sales Price: As defined in Section 3.7 hereof.
     Acetic Acid Technology Agreement: That certain Acetic Acid Technology
Agreement dated effective as of August 1, 1986 among BPCL, BP and the Company,
as the same may be or may have been amended from time to time pursuant to the
terms thereof.
     Acetic Acid Transfer Price: As defined in Section 3.7 hereof.
     Affiliate: Affiliate of a party shall mean any other person or entity
directly or indirectly controlling or controlled by or under direct or indirect
common control with such party; provided, however, that in no event shall
Resurgence Asset Management, LLC or any of its or its affiliates’ managed funds
or accounts be deemed to be an Affiliate of the Company. For purposes of this
definition, “control”, as used with respect to a party, person or entity, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such party, person or entity, whether
through the ownership of voting securities, by agreement or otherwise. For
purposes of this definition, the terms “controlling”, “controlled by” and “under
common control with” have correlative meanings.
     After Acquired Assets: As defined in Section 2.2 hereof.
     Agreement: This 2008 Amended and Restated Production Agreement, as the same
may be further amended from time to time pursuant to the provisions hereof.
     Applicable Interest Rate: With respect to any calendar day, an annual rate
equal to the lesser of (i) 2% over the rate of interest in effect for such
calendar day as most recently publicly announced or established by The Chase
Manhattan Bank (National Association) in New York, New York as its “prime rate”
and (ii) the maximum non-usurious rate of interest which may charged under laws
applicable to the party to whom such interest is payable.
     Arbitration Notice: As defined in Section 25.1 hereof.
     Barge: That certain barge, identified as M-25, Official No. 527030, to the
extent such barge remains in Acetic Acid or Unit Product service during the
Term.
     BP: BP Amoco Chemical Company, a Delaware corporation (and successor in
interest to BP Chemicals Inc., an Ohio corporation and successor in interest to
BP Chemicals Americas Inc.) and its successors and permitted assigns hereunder.
     BPCL: BP Chemicals Ltd., a company registered in England and Wales and an
Affiliate of BP, and its successors and assigns.
     BP Caused Termination: A termination of this Agreement by the Company
pursuant to Section 27.4.
     BP Event of Default: During the Term, (i) the failure by BP to perform any
of its financial obligations hereunder when due, which failure (A) involves an
amount in excess of

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$100,000 in the aggregate and (B) continues for a period of 30 calendar days
after the same is due hereunder, (ii) the failure by BP to perform any other
material obligation hereunder or the failure of BP or BPCL to perform any
material obligation under the Acetic Acid Technology Agreement, in either case,
which failure continues for a period of 30 calendar days after receipt of
written notice thereof by BP or BPCL, as applicable, from the Company (or, in
the event such failure cannot be cured within such 30 calendar day period, for
such period as is required to cure such failure provided that BP or BPCL, as
applicable, is attempting diligently and in good faith to cure such failure), or
(iii) the inaccuracy in any material respect of any representation or warranty
made by BP in this Agreement.
     BP Opportunity: As defined in Section 34.1(d).
     BP Participation Offer: As defined in Section 34.1(d).
     BP Profit Share: A percentage equal to the difference of 100% less the
Company Profit Share.
     Business Day: A calendar day in the City of Houston, Harris County, Texas,
that is neither a Saturday, Sunday or legal holiday nor a day on which banking
institutions in Houston, Texas or New York, New York are obligated by law to
close.
     Capital Expenditures: Expenditures incurred to (i) acquire any asset for
use on the Unit, (ii) add to, modify, replace or improve any asset on the Unit
so that (a) the cost of operations on the Unit is reduced, (b) the capacity of
the Unit is increased, (c) the efficiency of the Unit is improved, (d) the
operational safety of the Unit is improved, or compliance with legal
requirements is achieved or maintained, or (e) the product quality or
reliability of the Unit is improved or (iii) replace or improve the Barge or the
Rail Cars.
     Capital Project: A project which requires Capital Expenditures.
     Catalyst: Any catalyst or promoter used in the production of Acetic Acid in
the Unit as of the time of determination.
     Claim: As defined in Section 30.3 hereof.
     Company: Sterling Chemicals, Inc., a Delaware corporation, and its
successors and permitted assigns hereunder.
     Company Caused Termination: A termination of this Agreement by BP pursuant
to Section 27.3.
     Company Event of Default: During the Term, (i) the failure by the Company
to deliver Acetic Acid to BP substantially in accordance with the Shipment
Instructions for two consecutive Months (unless such failure is otherwise
excused hereunder); provided, however, that (A) BP provides the Company with
written notice within eight Business Days after the end of each such Month that
it believes that the Company has failed to deliver Acetic Acid to BP

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substantially in accordance with the Shipment Instructions and (B) for purposes
of this definition, the parties acknowledge and agree that the delivery of Unit
Product rather than Acetic Acid shall not be considered a failure to deliver
Acetic Acid to BP substantially in accordance with the Shipment Instructions
and, consequently, no notice from BP to the Company shall be required under
clause (A) above relating to the delivery by the Company to BP of Unit Product
rather than Acetic Acid, (ii) the failure by the Company to perform any other
material obligation hereunder or the failure of the Company to perform any
material obligation under the Acetic Acid Technology Agreement, in either case,
which failure continues for a period of 30 calendar days after receipt of
written notice thereof by the Company from BP or BPCL, as applicable (or, in the
event such failure cannot be cured within such 30 calendar day period, for such
period as is required to cure such failure provided that the Company is
attempting diligently and in good faith to cure such failure), including but not
limited to delivery of Unit Product rather than Acetic Acid, or (iii) the
inaccuracy in any material respect of any representation or warranty made by the
Company in this Agreement.
     Company Fixed Costs: All actual direct and allocated fixed costs incurred,
sustained or paid by the Company in connection with the production, sale or
delivery of Acetic Acid or Unit Product, including but not limited to the items
listed on Exhibit A, and all fixed costs invoiced to the Company by Praxair
under the Praxair Product Supply Agreement; provided, however, that in no event
shall any ***** be included within the term Company Fixed Costs.
     Company Opportunity: As defined in Section 34.1(e).
     Company Participation Offer: As defined in Section 34.1(e).
     Company Profit Share: As defined in Section 6.6(a) hereof.
     Company Sales Contract: As defined in Section 34.1(c) hereof.
     Company Taxes: Subject to the provisions of Section 34.2(b), all taxes, if
any (other than capital stock, income or excess profit taxes, general franchise
taxes imposed on corporations on account of their corporate existence or on
their right to do business within the state as a foreign corporation, ad valorem
and real property taxes and similar taxes), licenses, fees or charges levied,
assessed or made by any governmental authority on the act, right or privilege of
production, transportation, handling, sale, resale or delivery of Acetic Acid or
Unit Product produced, sold or delivered under this Agreement which (i) are
measured by the volume in pounds, value or sales price of, or are otherwise
based on producing, transporting, purchasing, handling, selling, reselling or
delivering Acetic Acid or Unit Product and (ii) are imposed upon and paid by or
for the account of the Company.
     Competitor: A person or entity that, as of the date of determination,
produces, sells, markets for sale or brokers the sale of acetic acid in *****,
or that licenses technology or intellectual property anywhere in the world for
the construction or operation of facilities or processes for the commercial
manufacture of acetic acid.

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     Contract Year: A period of 12 consecutive Months beginning on the first Day
of January 2008, and beginning on the first Day of January of each subsequent
year during the Term. The period of time from the first Day of January last
occurring during the Term until the last calendar day of the Term, shall be
considered to be a Contract Year, with appropriate pro rations being applied to
the relevant matter, figure or calculation, unless otherwise specifically
provided herein.
     *****
     Damages: Any and all damages, cash payments, expenses, obligations, claims,
liabilities, fines, penalties, clean-up or remedial costs, shut-down costs,
closure costs, decommissioning costs, severance costs resulting from or related
to a shut-down or closure of the Unit, repairs or reconstruction costs, costs of
investigation, reasonable attorneys’ fees or court costs, including but not
limited to, any such matters arising from Spills or Releases (except as
otherwise provided herein); provided, however, that the term “Damages” shall not
include (i) any consequential, special, incidental, indirect or punitive damages
except to the extent otherwise specifically provided for Section 30.9 or
(ii) any of the foregoing Damages arising from or related to the acetic acid
process or acetic acid technology licensed by BPCL to the Company.
     Day: The 24-hour period commencing at 7:00 a.m. Houston, Texas time on one
calendar day and ending at 7:00 a.m. Houston, Texas time on the following
calendar day. The date of a Day shall be that of its beginning.
     Declaration of BP Default: As defined in Section 27.2 hereof.
     Declaration of Company Default: As defined in Section 27.1 hereof.
     Deemed Total Sales Volume: With respect to any Month, the sum of (i) the
aggregate pounds of Acetic Acid accepted for delivery by BP in such Month, which
amount shall include any Supplied Acetic Acid supplied during such Month, plus
(ii) the aggregate pounds of Acetic Acid sold by the Company in such Month under
Section 27.4 or pursuant to Company Sales Contracts (not including Supplied
Acetic Acid), plus (iii) the aggregate number of pounds of acetic acid sold,
transferred or supplied by the Company to other plants or facilities located on
the Plant Site, that is not Supplied Acetic Acid, plus (iv) the aggregate number
of pounds of acetic acid sold, transferred or supplied by the Company to other
plants or facilities located on real estate owned by the Company that is not
part of the Plant Site, plus (v) *****.
     Derivatives: Vinyl acetate monomer and ethyl acetate.
     Early Termination Right: As defined in Section 2.1(a) hereof.
     Effective Date: January 1, 2008.
     Electing Party: As defined in Section 12.3.

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     Estimated Company Profit Share: As defined in Section 6.6(b) hereof.
     Estimated Shipping Instructions: As defined in Section 4.1 hereof.
     Existing Agreement: As defined in the Preliminary Statements of this
Agreement.
     force majeure: As defined in Section 32.2 hereof.
     Hazardous Acetic Acid Substances: Acetic Acid, Unit Product, any feedstock
or raw material used in the production of Acetic Acid or Unit Product or any
other pollutant, contaminant, hazardous substance, toxic material or waste used
in or resulting from (i) the operation or maintenance of the Unit, the Barge or
the Rail Cars or (ii) the production, delivery, storage, shipment, disposal or
transportation of Acetic Acid, Unit Product or feedstocks or raw materials for
Acetic Acid or Unit Product.
     Indemnified Party: As defined in Section 30.4 hereof.
     Indemnifying Party: As defined in Section 30.4 hereof.
     *****
     Major Capital Item: A Capital Expenditure of $100,000.00 or more.
     Major Acquisition: A purchase of assets or equity interests by the Company
or any Affiliate of the Company or by BP or any Affiliate of BP, or a merger or
consolidation of the Company or any Affiliate of the Company or BP or any
Affiliate of BP with or into another person or entity, or any combination
thereof; provided, however, that the average annual revenues during the
immediately preceding three full calendar years from all acetic acid and
Derivatives businesses of the other party to such transaction that are included
in such transaction are less than ***** of the average aggregate annual revenues
during the immediately preceding three full calendar years from all businesses
of the other party to such transaction included in such transaction.
     Major Transaction: A purchase, sale or transfer of assets or equity
interests by BP or any Affiliate(s) of BP, or a merger or consolidation of BP or
any Affiliate(s) of BP with or into another person or entity, or any combination
thereof, that involves at least a majority of the global acetic acid and
Derivatives businesses of BP and its Affiliates.
     Methanol: Methanol meeting the specifications set forth on Exhibit B
attached hereto.
     Methanol Delivery Cost: As defined in Section 15.2 hereof.
     Methanol Discount: As defined in Section 15.2 hereof.
     Methanol Measuring Equipment: For Methanol delivered by ship, barge or
other inland or marine vessel, shore tanks located at the Plant for measuring
deliveries of Methanol.

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     Methanol Sales Price: As defined in Section 15.4 hereof.
     Methanol Transfer Price: As defined in Section 15.2 hereof.
     Minimum Sales Volume: ***** pounds of Acetic Acid (or Unit Product) per
Month, provided, however, (i) this figure will be increased by the lesser of (A)
***** pounds of Acetic Acid (or Unit Product) per Month or (B) 1/12 of the
amount by which Unit Capacity is increased after installation of the D203 column
and debottlenecking project DB4.5, and (ii) the parties will discuss changes to
the figure ***** (or any higher figure then in existence) prior to the time any
other expansion to Unit Capacity is approved by the parties.
     Minor Capital Item: A Capital Expenditure of less than $100,000.00.
     Month: The period beginning at 7:00 a.m. on the first Day of a calendar
month and ending at 7:00 a.m. on the first Day of the next succeeding calendar
month. The period of time from 7:00 a.m. on the first Day of the last calendar
month occurring during the Term until the last calendar day of the Term shall be
considered to be a Month, with appropriate pro rations being applied to the
relevant matter, figure or calculation, unless otherwise specifically provided
herein.
     Non-Electing Party: As defined in Section 12.3.
     Oiltanking Pipeline: The pipeline constructed after the Effective Date by
both of the parties extending from the Unit to the terminal owned as of the date
of signature of this Agreement by Oiltanking Texas City, LP in Texas City,
Texas, pursuant to Section 34.14.
     Permanently Close the Unit: The Unit is closed such that from that point on
the Unit never produces a single pound of Acetic Acid or Unit Product.
     Pipeline: Any pipeline, including the Oiltanking Pipeline.
     Plant: The Company’s petrochemical plant located in Texas City, Texas.
     Plant Pollution: As defined in Section 30.1.
     Plant Site: The real estate that is owned by the Company as of the
Effective Date, on which the Plant is located, and not including any real estate
that is acquired by the Company after the Effective Date.
     Point of Delivery: As defined in Section 7.1 hereof.
     Praxair: Praxair Hydrogen Supply, Inc., a Delaware corporation, and its
successors and assigns.

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     Praxair Facility: That certain facility for the production of carbon
monoxide, hydrogen and steam owned by Praxair and located on a site leased by
the Company to Praxair.
     Praxair Product Supply Agreement: That certain Amended and Restated Product
Supply Agreement dated as of January 1, 2006 by and between the Company and
Praxair, as the same may be amended from time to time pursuant to the terms
thereof and Article 21.
     Profit: With respect to any Contract Year, ***** Except as otherwise
specifically set forth above, Profit shall be determined in accordance with
generally accepted accounting principles of the United States of America
consistently applied.
     Quarter: The period beginning at 7:00 a.m. on the first Day of the Months
of January, April, July and October and ending at 7:00 a.m. on the first Day of
the next succeeding April, July, October and January, respectively. The period
of time from 7:00 a.m. on the first Day of the last calendar quarter occurring
during the Term until the last calendar day of the Term shall be considered to
be a Quarter, with appropriate pro rations being applied to the relevant matter,
figure or calculation, unless otherwise specifically provided herein.
     Rail Cars: Those acetic acid railroad tank cars made available by the
Company to BP pursuant to Section 7.2 hereof to the extent such cars remain in
Acetic Acid or Unit Product service during the Term.
     Repair Election Notice: As defined in Section 12.3.
     Right: The exclusive right of BP to acquire all Acetic Acid or Unit Product
produced by the Company in the Unit.
     Scheduled Shutdown: A period during which the Unit is shut down for the
purpose of a Capital Project, to install equipment acquired by a Special
Expenditure or to perform such maintenance as has been agreed by the parties
hereto.
     Semiannual Meetings: The meetings of representatives of the Company and BP
to be held during each March or April and each September or October in each
Contract Year (often referred to by the parties as “control meetings”).
     Settlement Agreement: As defined in Section 34.7.
     Shipment Instructions: As defined in Section 4.1 hereof.
     Special Expenditure: Any expenditure incurred to acquire and install any
significant item of equipment for use on the Unit or in connection with the
production and delivery of Acetic Acid or Unit Product not otherwise defined as
a Capital Expenditure or reimbursed by BP to the Company as a Fixed Cost.
     Specifications: The acetic acid specifications, attached hereto as
Exhibit C, as the same may be changed from time to time by written agreement
between BP and the Company.

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     Spills or Releases: Any emission, discharge, release or threatened release
or migration of any Hazardous Acetic Acid Substance in, on, into or upon ambient
air, surface water, ground water or land, or subsurface strata or otherwise,
arising in connection with the operation of the Unit, the Barge, the Rail Cars,
or the production, delivery, storage, shipment, sale, disposal or transportation
of Acetic Acid, Unit Product, or feedstocks or raw materials for Acetic Acid or
Unit Product.
     Supplied Acetic Acid: As defined in Section 3.7 hereof.
     Supplied Acetic Acid Credit: As defined in Section 3.7 hereof.
     Supplied Acetic Acid Offset: As defined in Section 3.7 hereof.
     Supplied Hydrogen Credit: The Supplied Hydrogen Credit for any Month shall
apply to any hydrogen supplied to any portion of the Plant from the Praxair
Facility (other than the Unit) and shall be an amount equal to the greater of
(i) the amount by which the credit for Excess Hydrogen (as defined in the
Praxair Product Supply Agreement) under the invoice submitted by Praxair under
the Praxair Product Supply Agreement for such Month is reduced as a result of
the use of such hydrogen by the Company (directly or indirectly) and (ii) the
amount received by the Company for such hydrogen from a third party.
     Supplied Methanol: As defined in Section 15.4 hereof.
     Supplied Methanol Credit: As defined in Section 15.4 hereof.
     Supplied Methanol Offset: As defined in Section 15.4 hereof.
     Tank Car: A tank car, including any Rail Car.
     Term: The period from the Effective Date until the expiration or
termination of this Agreement.
     Texas City VAM Facility: The vinyl acetate monomer facility located in
Texas City, Texas owned by Union Carbide Corporation on the Effective Date.
     Third Party Action: As defined in Section 30.3 hereof.
     UAL: The unrecovered accumulated losses suffered by BP resulting from the
inability of BP to receive direct payments related to negative Profits from the
Company pursuant to Section 6.6(c), which (i) with respect to Contract Year
2007, is zero and (ii) with respect to each subsequent Contract Year shall be
(a) if Profit for such Contract Year is zero or higher, zero and (b) if Profit
for such Contract Year is a negative number, such negative number expressed as a
positive number. For example, if Profit for Contract Year 2008 was negative
$4 million, then the UAL with respect to Contract Year 2008 would be positive $4
million and, in calculating Profit for Contract Year 2009, $4 million would be
subtracted under clause (ii) of

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the definition of Profit, and, if Profit for Contract Year 2009 was positive
$1 million prior to making the deduction under clause (ii) of the definition of
Profit for such Contract Year, then the UAL with respect to Contract Year 2009
would be $3 million ($1 million minus $4 million expressed as a positive
number), and $3 million would be subtracted under clause (ii) of the definition
of Profit for Contract Year 2010.
     Unit: Those certain tracts of real property situated in Texas City,
Galveston County, Texas, as more particularly described on Exhibit D attached
hereto and made a part hereof by reference for all purposes as if copied herein
in full, together with all buildings, improvements and fixtures located and to
be located thereon, generally known or referred to as the Plant’s acetic acid
complex, including but not limited to the acetic acid plant, buildings, storage
tanks and all replacements, substitutions, deletions, additions or other changes
thereof or thereto from time to time during the Term as permitted by this
Agreement.
     Unit Capacity: The average actual annual production capability of the Unit,
as in effect at any time, which is calculated by estimating the number of Days
in a typical Year the Unit is capable of operating after allowing for downtime
for regular maintenance, and multiplying that number by an amount equal to the
Unit’s maximum sustainable daily rate based on the design feedstock mix, all as
agreed in writing by both parties or, in the event of any disagreement between
the parties, as determined pursuant to Article 25. As of the Effective Date,
Unit Capacity is 1.108 billion pounds.
     Unit of Measurement: As defined in Section 9.1 hereof.
     Unit Product: Any acetic acid produced in the Unit which does not meet the
Specifications in effect from time to time pursuant to this Agreement.
     Variable Costs: The actual variable costs incurred, sustained or paid by
the Company in the production, sale or delivery of Acetic Acid or Unit Product
including but not limited to the items listed on Exhibit E and all amounts
(other than Company Fixed Costs) invoiced to the Company by Praxair under the
Praxair Product Supply Agreement.
Article 2
The Term
          2.1 (a) This Agreement, during which BP shall have the Right,
commenced on August 1, 1986 and shall, except as otherwise provided herein,
continue thereafter until December 31, 2031; provided, however, that BP shall
have the right to terminate this Agreement as of December 31, 2026 (the “Early
Termination Right”) by providing the Company with at least two years’ prior
written notice of its election to exercise the Early Termination Right.
          (b) On or before March 31 of any Contract Year, either party may elect
to terminate this Agreement by providing the other party with a written notice
specifying that it is electing to terminate this Agreement pursuant to this
paragraph (b), such termination to be effective as of December 31 of such
Contract Year; provided, however, that a party may not elect to terminate this

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Agreement under this paragraph (b) unless, at the time of such election,
(i) Profit (prior to making the UAL deduction) was zero or negative for each of
the immediately preceding two Contract Years, (ii) Profit (prior to making the
UAL deduction) is reasonably expected to be zero or negative for the Contract
Year in which such election is made, (iii) no event of force majeure under this
Agreement lasting more than 30 calendar days shall have occurred in either of
the immediately preceding two Contract Years, (iv) Profit was not impacted in
either of the immediately preceding two Contract Years by a breach by such party
of any of its material obligations under this Agreement and (v) such party is
not in breach of any of its material obligations under this Agreement at the
time of such election.
          (c) This Agreement may be terminated (i) by mutual prior written
consent of the parties at any time, (ii) by BP pursuant to the Early Termination
Right, (iii) pursuant to paragraph (d) below or (iv) by either party pursuant to
paragraph (b) above, Section 12.3 or Article 27 (in each case, subject to the
terms and conditions contained in such paragraph, Section or Article); provided,
however, that, subject to all applicable limitations as to the date of the
effectiveness of such termination contained in this Section 2.1, Section 12.3 or
Article 27, such termination shall become effective on the date specified in
paragraph (d) below or in any required termination notice (which may not be
prior to the date of receipt of such notice), as applicable, or, if no such date
is specified in any such required notice, on the date such notice is received by
the non-terminating party.
          (d) This Agreement shall automatically terminate at and simultaneously
with any termination of the Acetic Acid Technology Agreement.
          (e) Notwithstanding anything to the contrary contained in this
Agreement, a termination of this Agreement for any reason shall not affect any
rights or remedies of either party arising out of any breach of this Agreement
prior to such termination.
          2.2 (a) The parties expressly do not by the terms of this Agreement
sell, transfer or assign to the other party any title or interest in the Unit or
any other assets or properties other than Acetic Acid and Unit Product when and
as provided herein. BP agrees that it has no ownership interest in the Unit or
any improvements to the Unit made since August 1, 1986, except for the rights of
BP provided in this Section 2.2 with respect to that portion of any Capital
Project, Capital Expenditure or Special Expenditure paid for either directly or
through reimbursement by BP (the “After Acquired Assets”). During the Term,
questions have previously arisen regarding the allocation of certain U.S.
federal income tax deductions between the Company and BP. In order to clarify
this situation and avoid confusion on this issue in the future, the parties have
agreed and do hereby agree that:
     (i) at all times from and after August 1, 1986, the Company is the
beneficial owner of the assets acquired from Monsanto Company on August 1, 1986
(i.e., all acetic acid process units, technology licenses, rail cars and all
personal property more particularly described on Exhibit “B” of the Contract of
Purchase and Sale of Real Estate and Personal Property entered into between the
Company and BP, effective August 1, 1986), and therefore the Company is entitled
to all available depreciation or amortization deductions with respect thereto;

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     (ii) BP is not and will not be entitled to any depreciation or amortization
or expense deductions with respect to the assets referred to in clause (i);
     (iii) BP will be entitled to any and all depreciation and amortization or
expense deductions with respect to the After Acquired Assets; and
     (iv) the Company will be entitled to any and all depreciation and
amortization or expense deductions with respect to all of the Unit other than
the After Acquired Assets.
The Company and BP will not file claims for refund, or any other form of return
with the United States Internal Revenue Service, or with any governmental unit
of any state, based on depreciation or amortization or expense deductions
inconsistent with the agreement reflected in this Section 2.2.
          (b) Upon expiration or termination of this Agreement, BP agrees to
sell to the Company and the Company agrees to purchase from BP, all of BP’s
right, title and interest in and to the After Acquired Assets for an amount
equal to BP’s undepreciated book value of the After Acquired Assets (less any
salvage proceeds received from the disposition of After Acquired Assets which
salvage proceeds have been added to gross sales revenue in the calculation of
Profit for any Contract Year hereunder) plus *****, and BP will receive no
further payments at the termination of the Agreement (other than those payments
required to be made to BP upon or after such expiration or termination pursuant
to Section 2.3, Section 6.6, Section 6.7, Section 12.3, Article 13 or
Article 30); provided, however, that the amount of BP’s undepreciated book value
of the After Acquired Assets shall be deemed to be zero and no payment shall be
made to BP by the Company pursuant to this Section 2.2 if (i) this Agreement
expires on December 31, 2031, is terminated by BP pursuant to the exercise of
the Early Termination Right or is terminated by either party pursuant to
Section 2.1(b) and, in any such case, within six Months after the date this
Agreement expires or terminates, the Company provides written notice to BP of
its decision to Permanently Close the Unit (and does Permanently Close the Unit
within three months after the delivery of such notice), (ii) the termination of
this Agreement is a BP Caused Termination, or (iii) this Agreement is terminated
pursuant to Section 12.3. For purposes of calculating the purchase price of the
After Acquired Assets, BP’s undepreciated book basis will be calculated
utilizing a ten-year life and straight line depreciation. BP agrees to execute
and deliver to the Company such instruments, in recordable form, as the Company
shall reasonably require at the expiration or termination of this Agreement to
transfer record title to the After Acquired Assets to the Company.
          2.3 Upon the expiration or termination of this Agreement:
     (a) BP will own the Acetic Acid and Unit Product in inventory at the Unit
or in transit and will pay to the Company within 45 calendar days the Company
Profit Share on such inventory, calculated using a sales price equal to the
average price of all sales by BP during the calendar month following such
expiration or termination;
     (b) if (i) this Agreement expires on December 31, 2031 or is terminated by
BP pursuant to the exercise of the Early Termination Right, (ii) the termination
of this Agreement is a BP Caused Termination or (iii) this Agreement is
terminated by either party pursuant to Section 2.1(b) or Section 12.3 and, in
any such case, within six Months after the date this Agreement

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expires or terminates, the Company provides written notice to BP of its election
to Permanently Close the Unit (and does Permanently Close the Unit within three
months after the delivery of such notice):

  (A)   BP shall reimburse the Company for ***** of all costs and expenses
incurred in connection with closing the Unit, including but not limited to
shutdown costs, dismantling costs, any costs of decontaminating Unit equipment
and severance costs; provided, however, that nothing contained in this clause
(A) is intended to alter the respective obligations and liabilities of BP and
the Company for Spills or Releases or Plant Pollution set forth in Article 30
(which shall exclusively govern such obligations and liabilities);     (B)   the
Company will use commercially reasonable efforts to eliminate all costs
associated with the Unit; provided, however, that the Company may incur costs or
expenses in connection with maintaining the Unit or any portion thereof for
future use as a production facility (other than for the production of acetic
acid) but such costs and expenses shall, for purposes of clause (C) below, be
deemed to have been eliminated and not be recoverable from BP;     (C)   BP
shall, on the first anniversary of such expiration or termination and on each
anniversary of such expiration or termination thereafter until and including the
fifth anniversary of such expiration or termination, pay the Company an amount
equal to ***** of the aggregate amount of annual fixed costs associated with the
Unit that could not be eliminated under clause (B) above (subject to clause
(A) above) during the immediately preceding 12-month period, less, if this
Agreement expires or is terminated under clause (i) or clause (iii) above, the
lesser of (x) 100% of such amount and (y) the UAL for the last Contract Year
hereunder (until the aggregate amount of deductions during such five-year period
for such UAL equals ***** of such UAL); provided, however, that if, at any time
prior to the fifth anniversary of such expiration or termination:

  (1)   the Company sells, leases or otherwise transfers (x) the Unit (other
than for salvage value), (y) the real estate upon which the Unit is located
(unless such sale lease or other transfer is for a use other than the production
of acetic acid or any other product using the Unit) or (z) the capacity of the
Unit, the amount thereafter payable by BP pursuant to this clause (C) for any
such 12-month period shall be reduced by an amount equal to the lesser of
(aa) 100% of the amount that would otherwise be payable pursuant to this clause
(C) and (bb) ***** of the proceeds received by the Company in such 12-month
period in connection with such sale, lease or transfer or which otherwise would
have been paid to the Company during such 12-month period but for a deferral of
the payment of such amount by the Company, whether through an affirmative
deferral election or through an unusual or unbalanced payment structure in the
transaction itself (until the

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      aggregate amount of deductions during such five-year period for such
proceeds equals ***** of such proceeds); or

  (2)   the Company converts the Unit or any portion thereof to a production
unit for any product other than Acetic Acid, the amount payable by BP pursuant
to this clause (C), from and after the commencement of physical construction of
such production unit, for any such 12-month period shall be reduced by an amount
equal to the lesser of (x) 100% of the amount that would otherwise be payable
pursuant to this clause (C) and (y) 100% of the annual fixed costs associated
with the Unit that could not be eliminated under clause (B) above that are
allocated to such production unit for such 12-month period (using the same
allocation methodology that was used by the Company to allocate Fixed Costs to
the Unit at the time of such expiration or termination of this Agreement); and

      provided further, that if this Agreement is terminated pursuant to clause
(i) or clause (iii) above and, at any time prior to the fifth anniversary of
such expiration or termination, the Company receives any payment from any third
party (other than BP or an Affiliate of the Company or BP) that is directly or
indirectly related to the Company’s decision to Permanently Close the Unit, the
amount payable by BP pursuant to this clause (C) for each such 12-month period
shall be reduced by an amount equal to the lesser of (x) 100% of the amount that
would otherwise be payable pursuant to this clause (C) and (y) ***** of the
proceeds received from such third party (until the aggregate amount of
deductions during such five-year period for such net proceeds equal ***** of
such net proceeds);

  (D)   the Company shall pay BP ***** of any salvage proceeds received by the
Company in connection with the dismantling of the Unit (including any After
Acquired Assets); and     (E)   any unused Catalyst inventory owned by the
Company shall be sold to BP at fair market value as of the date of such
expiration or termination;

     (c) if (i) this Agreement expires on December 31, 2031 or is terminated by
BP pursuant to the exercise of the early Termination Right, (ii) the termination
of this Agreement is a Company Caused Termination or (iii) this Agreement is
terminated by either party pursuant to Section 2.1(b) or Section 12.3, (A) the
Company shall reimburse BP for ***** of all costs and expenses incurred within
three months after such expiration or termination in connection with addressing
personnel inefficiencies resulting from such expiration or termination,
including but not limited to severance costs, (B) BP will use commercially
reasonable efforts to eliminate all such costs, (C) the Company shall, on the
first anniversary of such expiration or termination and on each anniversary of
such expiration or termination thereafter until and including the fifth
anniversary of such expiration or termination, pay BP an amount equal to *****
of the aggregate amount of such annual costs that could not be eliminated under
clause (B) above during the immediately preceding 12-month period and (D) if the
expiration or termination of

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this Agreement is a Company Caused Termination, any Catalyst inventory owned by
the Company shall be sold to BP at fair market value as of the date of such
expiration or termination; and
     (d) at the written request of the Company to be given no later than the
earlier of six months prior to the expiration of the term of this Agreement or
60 days after the receipt or delivery of any termination notice, as the case may
be, BP will thereafter supply any Catalyst required by the Company to produce
acetic acid in the Unit at BP’s then existing market sales price for such
Catalyst and on BP’s standard terms and conditions for the sale of acetic acid
Catalyst to third parties in existence at the relevant time; provided, however,
that (i) BP shall not be obligated to supply such Catalyst pursuant to this
paragraph (d) unless BP or any of its Affiliates (A) is in the business of
manufacturing or supplying such Catalyst at the relevant time and (B) was a
supplier of such Catalyst to the Company during the 12-month period immediately
preceding such termination or expiration, (ii) in any event, BP shall only be
obligated to supply Catalyst pursuant to this paragraph (d) in quantities during
any 12-month period bearing the same ratio to the total purchases of Catalyst
for the Unit during any 12-month period as the ratio that the quantities of
Catalyst purchased for the Unit from BP bore to the total purchases of Catalyst
for the Unit during the 12-month period immediately preceding such termination
or expiration (or, if no Catalyst was purchased during such 12-month period,
during the 24-month period immediately preceding such termination or
expiration), and (iii) if BP is not required to supply such Catalyst pursuant to
clause (i) or (ii) above, BP shall provide reasonable assistance to the Company
(which shall not include financial assistance), including but not limited to
providing any required consents, to enable the Company to purchase such Catalyst
directly from suppliers of such Catalyst at such time; and
     (e) at the written request of the Company to be given no later than the
earlier of six months prior to the expiration of the term of this Agreement or
60 days after the receipt or delivery of any termination notice, as the case may
be, BP will thereafter allow the Company to use the Oiltanking Pipeline;
provided, however, that (i) BP owns or controls the use of the Oiltanking
Pipeline at the relevant time and (ii) the Company shall pay BP a reasonable
throughput fee for all Acetic Acid or Unit Product delivered through the
Oiltanking Pipeline.
Article 3
Supply of Acetic Acid
          3.1 On the terms and subject to the conditions of this Agreement,
commencing on August 1, 1986, BP hereby agrees to receive and pay for and the
Company agrees to produce and deliver to BP, Acetic Acid in such amounts as
requested by BP in the manner provided herein subject at all times to the
limitations imposed in Section 3.2 and Section 3.4 hereof.
          3.2 BP and the Company agree that Acetic Acid delivered to the
applicable Point of Delivery hereunder shall be made available to BP under as
uniform conditions and rates as possible. Accordingly, BP shall take delivery
of, and the Company shall deliver, Acetic Acid in a manner commensurate with
good operating practices and in accordance with proper maintenance, operating

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and distribution procedures and at as uniform rates of delivery as possible
throughout each Quarter during the Term.
          3.3 Subject to Section 3.1, BP and the Company each agree to give the
other reasonable notice of such party’s desire at any time materially to
increase or decrease the quantity of Acetic Acid deliverable at any particular
time hereunder. If either party fails to perform substantially in accordance
with the requirements of the Shipment Instructions, such party shall notify the
other party of the reasons for such failure and the estimated time such failure
may continue.
          3.4 The Company shall not be required to expand, upgrade or, except as
otherwise expressly required herein, rebuild the Unit or any other Plant
facilities or to purchase acetic acid from other sources in order to perform its
obligations to BP pursuant to the provisions of this Agreement.
          3.5 BP acknowledges and agrees that, in exchange for the Supplied
Hydrogen Credit, the Company shall be permitted, but shall not be required, to
use any Excess Hydrogen (as defined in the Praxair Product Supply Agreement)
produced at the Praxair Facility that is not required for use in the Unit.
          3.6 The Company acknowledges and agrees that it shall not, on behalf
of itself or any other person or entity, use any carbon monoxide or blend gas
produced at the Praxair Facility for any purpose other than producing Acetic
Acid and Unit Product pursuant to this Agreement unless BP consents to such use
in writing, such consent to be granted or withheld by BP in its sole discretion.
          3.7 In the event that any plant or facility that is located on the
Plant Site consumes acetic acid in its operations, irrespective of whether such
plant or facility exists as of the Effective Date or is subsequently constructed
(but not including any plant or facility, irrespective of whether such plant or
facility exists as of the Effective Date or is subsequently constructed, that is
located on real estate that is acquired by the Company after the Effective
Date), BP shall supply to the Company, from and after the later of (a) the date
specified in a written request from the Company to commence such supply and
(b) the twelfth Month starting after the receipt of a written request from the
Company to commence such supply, under BP’s standard terms and conditions for
sales of acetic acid to third parties (other than payment), all such quantities
of acetic acid as are required by such plant or facility (all such acetic acid,
“Supplied Acetic Acid”) at a price per pound (the “Acetic Acid Transfer Price”)
determined by the formula indicated on Exhibit F attached hereto for the Month
of delivery of such Supplied Acetic Acid; provided, however, that (i) the
obligation of BP to supply such Supplied Acetic Acid shall not exceed *****
pounds per year unless BP agrees in writing to supply such excess (such
agreement to be granted or withheld in BP’s sole discretion); and (ii) if, as of
the date that BP receives such written request from the Company to commence such
supply, BP is supplying acetic acid to another customer in ***** that produces
the same derivative product as produced by such plant or facility located on the
Plant Site at a higher delivered price than the price per Exhibit F, then such
higher delivered price will apply to such Supplied Acetic Acid and be the Acetic
Acid Transfer Price instead of the price per Exhibit F. The Supplied Acetic Acid
delivered during a Month multiplied by the Acetic Acid Transfer Price for that
Month equals the “Supplied Acetic Acid Offset” for that Month. The Company shall
use such Supplied Acetic Acid in such plant or facility or sell such Supplied
Acetic Acid to the owner of such plant or facility at a price per

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pound ***** (the “Acetic Acid Sales Price”). During any Month that the Company
sells such Supplied Acetic Acid, the credit (the “Supplied Acetic Acid Credit”)
for such Month shall be any positive amount resulting from multiplying the
pounds of such Supplied Acetic Acid sold by the Company during such Month by the
amount (if any) by which the Acetic Acid Sales Price for such Month exceeds the
Acetic Acid Transfer Price for such Month.
Article 4
Shipment Instructions
          4.1 At business team meetings and Semiannual Meetings, BP shall
provide written notice to the representatives of the Company at such meetings,
setting forth BP’s estimated shipment instructions for Acetic Acid for the
coming Quarter (the “Estimated Shipping Instructions”). BP shall also provide
written notice to the relevant Company operations personnel setting forth BP’s
requested dates, quality requirements and volumes of deliveries and shipments of
Acetic Acid for the coming Month (the “Shipment Instructions”) as BP obtains
actual order information from customers. In addition, BP and the Company will
communicate, as needed, to ensure that production rates at the Unit will be
sufficient to meet the Shipment Instructions.
          4.2 In addition to the Estimated Shipping Instructions and the
Shipment Instructions, BP may deliver to the Company from time to time
additional shipping instructions for Acetic Acid. All such instructions with
respect to any particular shipment shall be given as early as is practicable
prior to the requested shipment date. The Company shall use commercially
reasonable efforts to deliver Acetic Acid at the times specified in such
instructions.
          4.3 To the extent required hereunder, the Company shall comply with
the requirements of governmental authorities having jurisdiction now in force or
which may hereafter be in force pertaining to the operation of the Unit and the
production of Acetic Acid or Unit Product and shall faithfully observe in all
material respects in the use and operation of the Unit all applicable laws and
regulations now in force or which may hereafter be in force.
Article 5
Manufacturing Methods; Changes in Specifications
          5.1 The Company shall produce Acetic Acid in accordance with
established procedures and methods of manufacture.
          5.2 Prior to making any change in raw materials or in the procedures
or methods of manufacture employed in producing Acetic Acid hereunder which the
Company has, or should have, reason to believe may make such Acetic Acid
unsuitable to any of BP’s customers, the Company will provide BP with written
notice of the Company’s intent to make any such change. If the Company fails to
notify BP in writing of the Company’s intent to make any such change, or if the
Company notifies BP in writing of the Company’s intent to make any such change
and BP does not consent to such change in writing, and the Company thereafter
makes such change, the Company shall indemnify and hold BP harmless pursuant to
the provisions of Article 30 hereof from Damages

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which BP may suffer or incur by reason of such change that arise out of or
relate to the unsuitability of such Acetic Acid to any of BP’s customers. If the
Company notifies BP in writing of the Company’s intent to make any such change
and BP consents in writing to such change, BP shall indemnify and hold the
Company harmless pursuant to the provisions of Article 30 hereof from Damages
which the Company may suffer or incur by reason of such change and that arise
out of or relate to the unsuitability of such Acetic Acid to any of BP’s
customers.
          5.3 If, at any time, any Acetic Acid to be supplied to BP changes in
chemical composition from that previously supplied to BP by the Company
hereunder, or the procedures and methods of manufacture employed in producing
Acetic Acid hereunder change so that, in either event, such Acetic Acid is
unsuitable to any of BP’s customers, then (a) BP shall notify the Company in
writing of such unsuitability and may thereafter refuse to accept shipments of
Acetic Acid hereunder, and (b) the Company shall indemnify and hold BP harmless
pursuant to the provisions of Article 30 hereof from Damages which BP may suffer
or incur by reason of any such change or changes that arise out of or relate to
the unsuitability of such Acetic Acid to any of BP’s customers; provided,
however, that the Company shall not be obligated to indemnify BP for any such
Damages to the extent that the change in chemical composition, procedures or
methods of manufacture that caused such Acetic Acid to be unsuitable for any of
BP’s customers resulted from implementing any written directions of BP or was
done with the written consent of BP. If, notwithstanding the unsuitability of
Acetic Acid to BP’s customer, BP notifies the Company in writing of its
acceptance of such shipment of Acetic Acid notwithstanding such unsuitability,
then BP shall indemnify and hold the Company harmless pursuant to the provisions
of Article 30 hereof from Damages which the Company may suffer or incur that
arise out of or relate to the unsuitability of such Acetic Acid to such
customer.
          5.4 If any product produced by the Company in the Unit fails to meet
the Specifications, in whole or in part, and is delivered to BP as if it were
Acetic Acid, the Company shall indemnify and hold BP harmless pursuant to the
provisions of Article 30 hereof from Damages which BP may suffer or incur by
reason of any such failure unless (a) the Company notifies BP of such failure in
advance and BP agrees in writing to accept such Unit Product notwithstanding
such failure or (b) after obtaining knowledge of such failure, BP agrees in
writing to accept such Unit Product notwithstanding such failure. If any product
produced by the Company in the Unit fails to meet the Specifications, in whole
or in part, and is delivered to BP as if it were Acetic Acid and (i) the Company
notifies BP of such failure in advance and BP agrees in writing to accept such
Unit Product notwithstanding such failure or (ii) after obtaining knowledge of
such failure, BP agrees in writing to accept such Unit Product notwithstanding
such failure, BP shall indemnify and hold the Company harmless pursuant to the
provisions of Article 30 hereof from Damages which the Company may suffer or
incur by reason of such failure.
          5.5 The Specifications shall not be changed unless agreed to in
advance in writing by BP and the Company.

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Article 6
Payment for Acetic Acid
          6.1 The charge for all Acetic Acid delivered to BP hereunder during
each Month shall equal:
     (a) The Company Fixed Costs for such Month; plus
     (b) The Variable Costs for such Month; minus
     (c) The sum of (i) the Supplied Hydrogen Credit for such Month, plus
(ii) the Supplied Acetic Acid Offset for such Month, plus (iii) the Supplied
Acetic Acid Credit for such Month, plus (iv) the Supplied Methanol Offset for
such Month, plus (v) the Supplied Methanol Credit for such Month.
          6.2 On the later of the 15th calendar day of each Month or five
Business Days after receipt of the invoice therefor (or if either such day is
not a Business Day, then on the Business Day next following), BP shall pay the
Company the estimated Company Fixed Costs for such Month, which shall be an
amount equal to the actual Company Fixed Costs for the preceding Month.
          6.3 The Company shall, as soon as available each Month but no later
than the fifth Business Day of each Month, deliver to BP an invoice for the
preceding Month showing (a) the quantities of Acetic Acid and Unit Product
produced during such Month, (b) the quantities of Acetic Acid and Unit Product
delivered during such Month, (c) beginning and ending Acetic Acid and Unit
Product inventories for such Month, (d) the quantities of Methanol received
during such Month, (e) the quantities of Methanol used during such Month,
(f) the beginning and ending Methanol inventories for such Month, (g) the
quantities of carbon monoxide used during such Month, (h) the amount of the
Variable Costs for such Month, (i) the amount of the Supplied Hydrogen Credit
for such Month, (j) the quantities of Supplied Acetic Acid supplied to the
Company, and the quantities of Supplied Acetic Acid sold by the Company, during
such Month, (k) the amount of the Supplied Acetic Acid Offset and Supplied
Acetic Acid Credit for such Month, (l) the quantities of Supplied Methanol
supplied to the Company, and the quantities of Supplied Methanol sold by the
Company, during such Month, and (m) the amount of the Supplied Methanol Offset
and Supplied Methanol Credit for such Month. BP shall pay each such invoice on
or before the 15th day of such Month (or if such day is not a Business Day, on
the Business Day next following).
          6.4 As soon as is practicable after the end of each Month, the Company
shall submit to BP an invoice showing an adjustment to the Company Fixed Costs
for such Month based on the difference between the estimated Company Fixed Costs
paid by BP as referenced in Section 6.2 hereof and the actual Company Fixed
Costs due for such Month based on any adjustments thereto necessary to fully
reimburse the Company for all Company Fixed Costs for such Month. The net sum
due to the Company or any credit due to BP resulting from the items referred to
in this Section 6.4 shall be paid or credited, as the case may be, on or before
the later of the 15th day of the Month in which such invoice is submitted by the
Company to BP or five Business Days after receipt by BP of such invoice (or if
either such day is not a Business Day, on the Business Day next following).

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          6.5 The Company and BP shall cooperate in investigating, evaluating
and implementing mutually agreeable methods to reduce the Variable Costs and the
Company Fixed Costs.
          6.6 (a) Commencing on the Effective Date through the expiration or
termination of this Agreement, BP shall pay to the Company in cash an amount
equal to ***** of any Profit as an additional fee hereunder (such ***** share
being the “Company Profit Share”), payable in accordance with this Section 6.6.
          (b) BP shall, on or before the first day of each of January 2008,
April 2008 and July 2008, pay the Company ***** as an advance payment of the
Company Profit Share for the 2008 Contract Year (the “2008 Profit Share
Installment Payments”). The Company acknowledges that, as of the time it is
executing this Agreement, it has received all of the 2008 Profit Share
Installment Payments. BP shall (i) on or before the last Business Day of April,
July and October of each Contract Year, prepare in good faith and deliver to the
Company an estimate of the Company Profit Share, if any, which will be payable
to the Company with respect to the applicable Contract Year (the “Estimated
Company Profit Share”), (ii) on or before the last Business Day of October 2008,
pay the Company an amount equal to (A) such Estimated Company Profit Share for
the 2008 Contract Year times 25%, minus (B) ***** (such ***** deduction being in
full payment and satisfaction for *****) and (iii) on or before the last
Business Day of April, July and October of each Contract Year, commencing with
the 2009 Contract Year, pay the Company an amount equal to (A) such Estimated
Company Profit Share times a fraction, the numerator of which is the number of
Quarters elapsed in such Contract Year and the denominator of which is four,
minus (B) the aggregate amount of payments towards the Company Profit Share for
such Contract Year previously made by BP to the Company. On or before March 1 of
each year, commencing with March 1, 2009, BP shall send to the Company a final
statement showing the actual Company Profit Share for the immediately preceding
Contract Year and:
     (x) if actual Company Profit Share for the immediately preceding Contract
Year exceeds the aggregate amount of Estimated Company Profit Share payments
previously made by BP towards the Company Profit Share for such Contract Year
plus, with respect to the 2008 Contract Year, the 2008 Profit Share Adjustment,
the additional amount to be paid by BP (which amount shall be the actual Company
Profit Share for the immediately preceding Contract Year minus (1) the aggregate
amount of Estimated Company Profit Share Payments previously made by BP towards
the Company Profit Share for such Contract Year plus (2) with respect to the
2008 Contract Year, the 2008 Profit Share Adjustment); or
     (y) if actual Company Profit Share for the immediately preceding Contract
Year is less than the aggregate amount of Estimated Company Profit Share
payments previously made by BP towards the Company Profit Share for such
Contract Year, the amount to be refunded by the Company to BP (which amount
shall be the lesser of (1) the amount by which the aggregate amount of Estimated
Company Profit Share payments previously made by BP towards the Company Profit
Share for such Contract Year exceeds the actual Company Profit Share for such
Contract Year and (2) the aggregate amount of Estimated Company Profit Share
payments previously made by BP towards the Company Profit Share for such
Contract Year).

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In the event that the final statement shows an additional amount to be paid by
BP, BP shall pay the Company such amount on or before March 1 of the relevant
year. In the event that the final statement shows an amount to be refunded by
the Company, the Company shall pay BP such amount on or before the later of
March 1 of the relevant year and the 15th calendar day after receipt of such
final statement from BP.
          (c) The parties acknowledge and agree that, in the event that UAL for
any Contract Year is greater than zero, BP shall not, except as otherwise
provided in Section 12.3, be entitled to any direct payment related to such UAL
from the Company, but (i) BP shall be entitled to offset ***** of the UAL for
the last Contract Year hereunder (unless such expiration or termination is a BP
Caused Termination) against any amounts owing to the Company pursuant to, and
subject to the terms of, Section 2.3(b)(C), and (ii) such UAL will be deducted
under clause (ii) of the definition of Profit in the immediately succeeding
Contract Year. In addition, nothing contained in this paragraph (c) is intended
to eliminate, reduce or otherwise limit the obligation of the Company to make
any payment to BP required under Section 6.6(b)(y), Section 6.7 or Article 13,
none of which shall be considered a “direct payment related to such UAL.”
          (d) The Company will be reimbursed by BP for all costs of Minor
Capital Items and the costs of all Major Capital Items will be shared in
accordance with the Profit sharing ratios in effect during the period (i.e., the
Company shall invoice BP for ***** of such Major Capital Items).
          6.7 If BP has reason to dispute the accuracy of any invoice submitted
to it by the Company, BP will pay the undisputed portion of such invoice in full
and 50% of the disputed portion of such invoice in accordance with the
provisions of this Article 6. After any such dispute has been resolved, BP will
pay any balance due to the Company or the Company will pay any balance due to
BP, as the case may be, on or before the tenth Business Day after the receipt by
BP of a replacement invoice submitted to it by the Company, together with
interest thereon at the Applicable Interest Rate, accruing each calendar day
from the calendar day such amount was originally due to the Company or was paid
by BP, as the case maybe, until the calendar day such amount is paid or refunded
in full; provided, however, that in the event that any balance is due to BP,
such replacement invoice shall be submitted to BP no later than ten Business
Days after such dispute has been resolved.
          6.8 Each party shall maintain records and production data in
accordance with usual and customary practices and standards in the chemicals
industry in respect of all matters referred to in this Article 6. Each party
shall provide the other party access to such records and data pursuant to the
provisions of Article 22 hereof.
          6.9 The suspension of the obligations of either party hereunder by
reason of a force majeure event shall not suspend BP’s obligation to make the
payments required hereunder.
          6.10 In the event that either party fails to pay any undisputed amount
when due hereunder, such amount shall bear interest at the Applicable Interest
Rate, accruing each calendar day from the calendar day such amount was
originally due until the calendar day such amount is paid in full.

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Article 7
Product Ownership, Deliveries and Shipments
          7.1 Title to all Acetic Acid and Unit Product shall automatically vest
in BP from the moment of initial production, and all Acetic Acid and Unit
Product produced in the Unit shall at all times remain 100% owned by BP (other
than any Acetic Acid or Unit Product produced by the Company for sale by itself
pursuant to Section 34.1(c)). Solely for purposes of establishing BP’s title to
and ownership of all Acetic Acid and Unit Product produced in the Unit, the
Company shall execute and deliver to BP an information UCC financing statement
or other necessary documents in a form reasonably acceptable to BP and any
renewals thereof as reasonably requested by BP to reflect such BP ownership of
Acetic Acid and Unit Product as a matter of public record. The point of transfer
of custody (the “Point of Delivery”) from the Company to BP of any Acetic Acid
or Unit Product for purpose of offsite shipment shall be (a) the first intake
flange on the ship, barge or other inland water or marine vessel into which the
Acetic Acid or Unit Product is loaded for shipment, (b) the perimeter boundary
line of the Plant with respect to any Tank Car, tank truck or other conveyance
into which the Acetic Acid or Unit Product is loaded for shipment or (c) with
respect to any Acetic Acid or Unit Product delivered by Pipeline, the first
inlet flange of the Pipeline used to effect such delivery of Acetic Acid or Unit
Product. Risk of loss shall pass to BP at such flange or perimeter boundary
line, as the case may be (irrespective of whether the Company owns or has
provided any ship, barge, other inland water or marine vessel, Tank Car, tank
truck or other conveyance into which the Acetic Acid or Unit Product is loaded
or whether the Company owns any interest in any Pipeline used to effect such
delivery). As between the Company and BP, except as otherwise provided in
Section 7.2 hereof, the Company shall be in control and possession of the Acetic
Acid or Unit Product produced hereunder and responsible for any damage or injury
caused thereby until risk of loss with respect thereto has passed to BP. In
addition to its other obligations hereunder, BP shall be in control and
possession of the Acetic Acid or Unit Product produced hereunder and responsible
for any damage or injury caused thereby after risk of loss with respect thereto
has passed to BP.
          7.2 Subject to the terms and conditions of this Agreement and to
normal and customary shipping practices, the Company shall make available to BP
at all times hereunder the Barge and the Rail Cars for movement of the Acetic
Acid or Unit Product, except when the Barge or the Rail Cars are being stored or
used under instruction for BP (or being used by the Company to transport Acetic
Acid or Unit Product produced by the Company for sale by itself pursuant to
Section 34.1(c), in which case the parties will share the use of these assets in
good faith), provided that the Estimated Shipping Instructions, the Shipment
Instructions or any additional shipping instructions state (a) the number of
Rail Cars required by BP and the date(s) on which the same are required, (b) the
date(s) on which the Barge is required, (c) transfer, connection and dispatch
instructions, and (d) such other information as may be reasonably required by
the Company. BP shall reimburse the Company for the costs of regular maintenance
and repair of the Barge and the Rail Cars and in-Plant loading and switching
charges and other normal expenses with respect to the ownership and operation
thereof as Company Fixed Costs. In the event that the Barge or any of the Rail
Cars are used by or at the direction of the Company for any purpose other than
the movement of Acetic Acid or Unit Product for BP, the Company shall forward
any net proceeds it receives in connection with such use to BP, and such net
proceeds shall be included in the calculation of Profit for the Contract Year in
which

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such use occurred. The Company shall not be required to pay any Capital
Expenditures with respect to the Barge or the Rail Cars unless BP is obligated
to reimburse the Company therefor as provided in Article 16 or Article 17
hereof. The use of the Barge or any Rail Car by BP shall not affect or alter the
Point of Delivery hereunder or the time of the passing of risk of loss with
respect to the Acetic Acid or Unit Product. The Company shall have no liability
for any loss, damage, injury or other event or occurrence involving the Barge or
any Rail Car other than loss, damage or injuries resulting solely from the gross
negligence or willful misconduct of the Company, its agents or employees. BP
will use commercially reasonable efforts to use any excess Rail Cars within its
system for other products, crediting the Profit with agreed sublease fees.
          7.3 BP may from time to time request that the Company arrange the
delivery and transportation of Acetic Acid or Unit Product in accordance with
the Shipment Instructions or any additional shipping instructions referred to in
Section 4.2 hereof and the Company may at its option comply with any such
request of BP; provided, however, that the Company shall have no liability or
other obligation with respect to its having arranged the delivery and
transportation of any Acetic Acid or Unit Product pursuant to this Section 7.3.
If the Company, in arranging for the delivery and transportation of Acetic Acid
or Unit Product pursuant to this Section 7.3, earns or realizes discounts or
other cost savings as a result of aggregating shipments or by reason of other
economies of scale, such discounts and other cost savings shall be
proportionately shared with BP on the basis on which such discounts and other
cost savings were earned or realized by the Company. BP shall reimburse the
Company for any additional costs incurred by the Company in the performance of
any request of BP pursuant to the provisions of this Section 7.3.
Article 8
Testing
          8.1 The Acetic Acid and Unit Product shall be tested prior to delivery
to BP under the testing procedures and schedules being utilized by the Company
at the Effective Date. Such procedures and schedules may be changed from time to
time by mutual agreement of BP and the Company. The Company shall retain
representative samples for sufficient time to allow delivery to and acceptance
by BP’s customers of Acetic Acid or Unit Product. The Company shall provide BP
access to such samples and all records maintained by the Company with respect
thereto pursuant to the provisions of Section 22.1 hereof.
          8.2 Confirmatory tests of the quality of Acetic Acid or Unit Product
shipments shall be performed prior to the time of delivery according to the
procedures and schedules referred to in Section 8.1 hereof. Quality of Acetic
Acid or Unit Product shall be determined by taking representative samples from
static shore tanks (in the presence of an independent surveyor if requested).
Once the quality of the contents of such static shore tank has been tested,
multiple deliveries from such static shore tank may be made by Pipeline, ship,
barge, other inland or marine vessel, Tank Car, tank truck or other conveyance;
provided, however, that no additional Acetic Acid or Unit Product shall be
deposited into such static shore tank unless the contents thereof are re-tested
prior to delivery of any Acetic Acid or Unit Product therefrom. The Company
shall retain all such samples for sufficient time to allow delivery to and
acceptance by BP’s customers of such Acetic Acid or Unit Product. The Company
shall provide BP access to such samples and certifications and

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all records maintained by the Company with respect thereto pursuant to the
provisions of Section 22.1 hereof.
          8.3 All product made pursuant to the provisions of this Agreement when
tested according to the agreed procedures and schedules shall be conclusively
presumed to constitute Acetic Acid unless analysis of the sample retained
pursuant to the provisions of Sections 8.1 or 8.2 hereof shows the product not
to have been Acetic Acid.
          8.4 BP shall have the right, at BP’s expense, to have the Acetic Acid
or Unit Product tested by independent third parties prior to shipment as Acetic
Acid or Unit Product hereunder, so long as any such testing does not materially
interfere with Unit or Plant operations, and the Company shall cooperate in any
such test and shall have the right to be represented and to participate in any
such test and to inspect any equipment used in determining the nature or quality
of the Acetic Acid or Unit Product.
Article 9
Measurement
          9.1 The engineering unit employed for the measurement of Acetic Acid
and Unit Product (the “Unit of Measurement”) shall be one pound (avoirdupois).
All quantities given herein, unless otherwise expressly stated, are in terms of
such Unit of Measurement.
          9.2 The Company shall maintain and operate the Acetic Acid Measuring
Equipment and the Methanol Measuring Equipment in accordance with customary
practice in the industry and all applicable laws and regulations. BP may, at its
option and expense, install measuring equipment for checking the Acetic Acid
Measuring Equipment or the Methanol Measuring Equipment, so long as such
installation does not materially interfere with the operation of the Unit or the
Plant. Readings from the Acetic Acid Measuring Equipment will be used for
determining quantities of acetic acid shipments and readings from the Methanol
Measuring Equipment will be used for determining quantities of methanol
delivered to the Company’s Texas City site. In the event that different or
additional modes of transportation of methanol, Acetic Acid or Unit Product are
used after the Effective Date (e.g., Pipeline deliveries), BP and the Company
will discuss and determine in good faith appropriate additions to the Acetic
Acid Measuring Equipment or Methanol Measuring Equipment required to accurately
measure deliveries by or through such modes of transportation.
          9.3 BP shall have the right, at BP’s expense, to monitor and check the
measurement of Acetic Acid or Unit Product from the Unit to each ship, barge,
other inland water or marine vessel, Tank Car, tank truck or other conveyance
into which the Acetic Acid or Unit Product is loaded or to any Pipeline used to
effect delivery of Acetic Acid or Unit Product, in the presence of an
independent surveyor. Any reports and certifications resulting from such
monitoring and checking will be made available by BP to the Company on request.
          9.4 If any test of the Company’s meters shows that the metering
equipment is in error by less than or equal to 0.25%, previous readings of such
equipment shall be considered as correct but such equipment will be properly
adjusted at once to zero error. If any test shows that the

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metering equipment is in error by more than 0.25%, the metering equipment will
be properly adjusted at once to zero and the previous readings of such equipment
and the resulting calculation of the quantity of Acetic Acid and Unit Product
delivered by the Company to BP hereunder shall be corrected for any period of
inaccuracy which is definitely known or agreed upon by the parties. In case such
period is not definitely known or agreed upon, such corrections will be for a
period covering the last half of the time elapsed since the date of the last
test of such metering equipment. If for any reason any of the Company’s meters
utilized hereunder is out of service so that the quantity of Acetic Acid or Unit
Product delivered through such meters cannot be ascertained, the quantity of
Acetic Acid or Unit Product so delivered during the period such meters are out
of service will be estimated and agreed upon by the parties hereto upon the
basis of the best available data using, in order of preference, the following
methods:
     (a) readings of any check-measurement equipment of BP if installed and
measuring accurately;
     (b) readings of any measurement equipment which the Company may have placed
in the flowing stream if installed and measuring accurately; and
     (c) the determination of a recognized referee agreed upon by the parties,
with the decision of the referee with respect to such matter being final,
conclusive and binding on each of the parties and with the charges of said
referee being borne equally by the parties.
          9.5 Each party shall have the right to be present at the time any
installing, reading, cleaning, changing, repairing, inspecting, testing or
adjusting is done in connection with the other party’s measuring equipment used
in measuring deliveries hereunder. The records from such measuring equipment
shall remain the property of the owner thereof, but, upon request, each party
will submit to the other party its records, charts and weight tickets, together
with calculations therefrom, subject to return within 15 calendar days after
receipt thereof. Such records, charts and weight tickets shall be kept on file
for a period of not less than 90 calendar days.
          9.6 If upon any test the measuring equipment is found to be inaccurate
to any degree, it shall be adjusted as soon as practicable to measure
accurately.
          9.7 Notwithstanding the foregoing, the Company’s measurements shall be
deemed to be accurate for purposes of all deliveries made hereunder unless, as
to any particular delivery, BP objects thereto in writing delivered to the
Company within three weeks after such delivery to BP’s customer.
Article 10
Storage of Acetic Acid by Company
          The Unit presently contains three bulk storage tanks (Nos. 50T508-1,
50T508-2 and 50T508-3). The Company shall use such bulk storage tanks for the
storage of Acetic Acid as required given the Estimated Shipping Instructions and
the Shipment Instructions or as otherwise determined by the Company. Should any
such bulk storage tank be taken out of service by the

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Company for repair service, the Company will, so long as the costs with respect
thereto are subject to reimbursement under this Agreement or included as a part
of the Company Fixed Costs, repair the same and place it back in service as soon
as is practicable.
Article 11
Operation of Unit and Related Matters
          11.1 The Company shall have the authority to, and does hereby agree
to, operate the Unit in accordance with the terms and conditions of this
Agreement. Unless otherwise provided herein, the Company shall operate the Unit
in accordance with the Shipment Instructions of BP; provided, however, that such
operation (a) is not in violation of this Agreement, prudent operation or
maintenance procedures or applicable laws and (b) does not have the effect of
altering the Specifications unless agreed between the Company and BP. The
Company shall operate the Unit in compliance in all material respects with all
applicable laws and regulations, whether in existence as of the date of
signature of this Agreement or as may be adopted thereafter.
          11.2 Notwithstanding any other provision of this Agreement to the
contrary, the Company shall operate the Unit and perform its other obligations
hereunder using the same standard of care as it would use in operating its other
units at the Plant (which, at a minimum, shall be that standard of care that a
reasonable prudent operator of a chemical manufacturing facility similar to the
Unit would use in operating such facility), and the Company shall have no
liability hereunder based on any higher standard of care. Both parties recognize
that it is imperative to operate the Unit safely and with no harm to people or
the environment. Representatives of both parties will meet periodically (no less
than annually) to discuss current practices and share best practices regarding
health, safety and environmental matters. Proposals for changes to health,
safety and environmental procedures applicable to the Unit will be reviewed at
Semiannual Meetings and such other times as may be agreed by the parties or
required to address current issues or changes in laws or regulations pertaining
to the Unit.
          11.3 In the event that for any reason maintenance, utilities or other
services and resources at the Plant become limited, the Company agrees that it
will in good faith allocate such maintenance, utilities, services and resources
between the Unit and the other activities at the Plant on a fair and equitable
basis having regard to the needs of BP hereunder and the other operations at the
Plant; provided, however, that the Unit shall have first priority in any such
allocation if the Company directly or indirectly causes such limitation to occur
through committing maintenance, utilities, services or resources to new uses at
the Plant beyond the capabilities at the Plant at the time such commitment was
made.
          11.4 At the Semiannual Meeting to be held in September or October of
each Contract Year, the parties shall discuss items that may be addressed in the
proposed annual maintenance budget for the following Contract Year. At least 45
calendar days prior to the beginning of each Contract Year, the Company will
prepare a detailed annual maintenance budget for the Unit for such Contract
Year. Each maintenance budget will be agreed to by both parties at least 15
calendar days prior to the beginning of the applicable Contract Year. If there
is a need to undertake significant additional maintenance or, if certain
scheduled items are found no longer to require attention,

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additions or deletions will be mutually agreed upon. The Company shall keep a
record of maintenance spending and will report such spending to BP at reasonable
intervals upon reasonable notice from BP. Such reports will include, as a
minimum requirement, any agreed changes to the original budget, actual spending
compared to budget and an annualized total forecast including agreed additions
or deletions. BP shall have access to the Company’s maintenance records
necessary to verify the accuracy of all items charged against maintenance to the
extent and in the manner provided in Section 22.1 of this Agreement.
Article 12
Shut-Downs of the Unit
          12.1 The parties agree that the Unit will be shut down for such
periods of time as are required to accomplish the Scheduled Shutdowns. During
such shut-down, the Company shall not be required to produce Acetic Acid
hereunder and it is the present intention of the parties to utilize the bulk
storage tanks referred to in Article 10 to accumulate Acetic Acid for delivery
during such Scheduled Shutdowns. Any such Scheduled Shutdown shall not affect
the obligations of BP to make payments hereunder or the other covenants and
agreements of the parties hereunder. All maintenance, operating or other costs
associated with the Scheduled Shutdown shall be expensed at the time such costs
are incurred.
          12.2 Subject to Section 34.1(c), upon reasonable notice from BP, the
Company shall temporarily cease or reduce the production of Acetic Acid at the
times and for the periods so requested. In such event, in addition to all other
payments required hereunder, BP shall reimburse the Company upon receipt of
invoice therefor and reasonable supporting detail as BP’s auditors may
reasonably require for any and all additional costs and expenses incurred in
connection with such cessation or reduction, including but not limited to
increased costs of production of other products produced at the Plant resulting
from such cessation or reduction; provided, however, that the Company shall have
(a) a duty to reasonably mitigate any such additional costs and expenses and to
share with BP any benefit in excess of such additional costs that the Company
may obtain or derive as a result of such cessation or reduction of production
and (b) a duty to reasonably mitigate all Company Fixed Costs and Variable Costs
chargeable to BP under this Agreement during such temporary cessation or
reduction in production of Acetic Acid.
          12.3 In the event of a fire, explosion, flood, hurricane, windstorm or
other casualty resulting in the loss of the Unit or a substantial part thereof,
the parties hereto shall, within 60 calendar days after such loss occurs, meet
to discuss whether or not the Unit should be repaired or rebuilt. If both
parties agree that the Unit should be repaired or rebuilt, (a) the parties shall
apply all available insurance proceeds towards the repair or rebuilding of the
Unit, (b) the Unit shall be repaired or rebuilt, (c) the parties’ obligations
under this Agreement shall continue and (d) any costs of such repair in excess
of the proceeds of insurance shall be shared by the parties as Capital
Expenditures in accordance with their then applicable Profit sharing ratios. If
both parties agree not to repair the Unit, this Agreement shall terminate and
the parties shall share any insurance proceeds received under their respective
insurance policies in connection with such loss of or to the Unit or substantial
portion thereof, with BP receiving or retaining ***** of such proceeds and the
Company receiving or retaining ***** of such proceeds. If the parties do not
agree as to whether or not to

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repair or rebuild the Unit, the party that desires to repair or rebuild the Unit
(the “Electing Party”) shall have the right, by providing written notice (a
“Repair Election Notice”) to the other party (the “Non-Electing Party”), to
require that the Unit be repaired or rebuilt, in which event:
     (i) the Unit shall be repaired or rebuilt;
     (ii) all insurance proceeds received by either of the parties under their
respective insurance policies in connection with such loss of or to the Unit or
substantial portion thereof shall be first applied to the payment of all repair
or rebuilding costs;
     (iii) except as otherwise modified in this Section 12.3, the parties’
obligations under this Agreement shall continue;
     (iv) the Electing Party shall bear all costs of such repair or rebuilding
in excess of the proceeds of insurance and shall have the right to fully
depreciate such excess repair or rebuilding costs;
     (v) the Electing Party shall recover such excess costs by receiving 100% of
all positive Profits until the Electing Party has received an amount equal to
such excess costs, together with interest thereon at the Applicable Interest
Rate from the time such costs were incurred until such excess costs have been
paid in full;
     (vi) if, for the Contract Year immediately preceding such loss of or to the
Unit or substantial part thereof, UAL was greater than zero and the Electing
Party is BP, UAL for Contract Years subsequent to the Contract Year immediately
preceding such loss of or to the Unit shall never be greater than the UAL for
the Contract Year immediately preceding such loss of or to the Unit, for all
purposes of this Agreement;
     (vii) for each of the first two full Contract Years occurring after such
repair or rebuilding has been completed and the Unit restarted, (A) if the
Electing Party is the Company, the Company shall pay BP ***** of the UAL for
such full Contract Year, after which payment, UAL for such full Contract Year
shall be deemed to be ***** for all purposes of this Agreement, or (B) if the
Electing Party is BP, UAL for each such full Contract Year shall never be
greater than the UAL for the Contract Year immediately preceding such first full
Contract Year, for all purposes of this Agreement; and
     (viii) if the Electing Party was required to make any payments under clause
(vii) above for both of such full Contract Years and the Non-Electing Party is
entitled to elect, and does elect, to terminate this Agreement pursuant to
Section 2.1(b) during the third full Contract Year occurring after such repair
or rebuilding has been completed and the Unit restarted, if the Electing Party
is the Company, the Company shall pay BP ***** of the UAL for such third full
Contract Year, after which payment the UAL for such third full Contract Year
shall be deemed to be zero for all purposes of this Agreement;
provided, however, that if, at the time the Non-Electing Party receives a Repair
Election Notice, the Non-Electing Party would be entitled to terminate this
Agreement pursuant to Section 2.1(b)

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(ignoring for this purpose the requirement that an election to terminate under
such Section must be made on or before March 31), the Non-Electing Party may, by
providing written notice the Electing Party within 30 days after receipt by the
Non-Electing Party of such Repair Election Notice, elect to terminate this
Agreement, in which event the parties shall be deemed to have agreed to not
repair the Unit for all purposes of this Agreement. Any amount paid by or to the
Electing Party pursuant to the immediately preceding sentence shall be paid at
the same times that the Company is scheduled to receive payments towards the
Company Profit Share (including Estimated Company Profit Share payments)
pursuant to Section 6.6. In the event that any parts of the Plant which serve
the Unit are destroyed or damaged, whether by an insured risk or not, the
Company shall rebuild the same as soon as practicable and to the extent that the
insurance proceeds are deficient will make up the difference from its own funds
unless the Unit has also been damaged and the parties have elected to not repair
the Unit pursuant to this Section 12.3.
Article 13
Insurance
          During the term of this Agreement, the Company shall maintain property
damage and liability insurance on the Unit and those parts of the Plant which
serve the Unit in types and amounts, and against such risks, at levels that are
reasonable and customary for the chemical industry; provided, however, that in
any event the Company shall not be required to maintain business interruption or
terrorism insurance coverages. All insurance premiums in respect of insurance
for the Unit, Acetic Acid or Unit Product which are not included in Company
Fixed Costs shall be paid by BP upon receipt by BP of an invoice. BP shall
reimburse the Company for any amounts paid by the Company that are credited
towards the deductible under the Company’s liability insurance policy or
property damage/business interruption policy to the extent the underlying event
(a) is directly related to the Unit, Acetic Acid or Unit Product or any other
matter under this Agreement and (b) the Company is not required to indemnify BP
for such underlying event pursuant to Article 30. BP may carry additional
insurance, at its sole discretion and cost. The Company shall advise BP whenever
any existing insurance policy or area of coverage is renegotiated or otherwise
changed in a material manner and BP shall be afforded a reasonable opportunity
to review such changes. The Company and BP shall jointly review insurance
coverages on an annual basis. BP shall be named an additional insured with
respect to the Unit on the policies covering the Unit, Acetic Acid and Unit
Product and no action to drop coverage for BP shall be taken by the Company
without prior written approval by BP. In the event that either party receives
any proceeds under any insurance policy for which all or any part of the
premiums therefor are taken into account in determining Profit hereunder that
are not required to be used for any other purpose under this Agreement, (i) if
BP receives such proceeds, BP shall pay the Company an amount equal to ***** of
such proceeds, and (ii) if the Company receives such proceeds, the Company shall
pay BP an amount equal to ***** of such proceeds.

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Article 14
Access to the Unit
          14.1 The Company agrees that upon written request by BP, the Company
shall provide to BP, at cost, reasonably suitable office accommodations at the
Plant for a limited number of BP personnel.
          14.2 The Company agrees to permit BP personnel, at the cost of BP, to
have access to the Unit at reasonable times and on reasonable notice and
consistent with the Company’s contractual obligations under licenses or
sub-licenses to which it is a party. BP shall indemnify and hold the Company
harmless pursuant to the provisions of Article 30 hereof from Damages which the
Company may suffer or incur by reason of its admission of such BP personnel to
the Unit. BP shall cause all of its personnel to comply with the Company’s
safety, health, security and reasonable confidentiality procedures and policies
at all times while at the Plant.
Article 15
Methanol Supply
          15.1 BP shall provide Methanol meeting the specifications described on
Exhibit B attached hereto in the volumes and at the times required by the
Company to operate the Unit and supply Acetic Acid as required hereby. The
Company shall provide adequate facilities to receive, handle and store, on
behalf of BP for use in the Unit, Methanol delivered by sea in up to *****
metric ton shipments. Title to all Methanol supplied by BP for use in the Unit
shall at all times remain 100% vested in BP. Solely for purposes of establishing
BP’s title to and ownership of such Methanol supplied by BP for use in the Unit,
the Company shall execute and deliver to BP an information UCC financing
statement or any other necessary documents in a form reasonably acceptable to BP
and any renewals thereof as reasonably requested by BP to reflect such BP
ownership of Methanol supplied by BP as a matter of public record.
          15.2 (a) For all Methanol delivered pursuant to Section 15.1, the cost
of Methanol consumed for any Month shall be ***** less (ii) a discount, such
discount to be agreed upon by the parties as of the beginning of the Contract
Year in which such Month falls (the “Methanol Discount”), plus (iii) an amount
designed to reflect BP’s actual reasonable costs of purchasing and delivering
such Methanol to the Company, including, without limitation, the costs of
delivering such Methanol from the supplier’s terminal to the Unit and surveyor’s
costs (the “Methanol Delivery Cost”). The ***** less the Methanol Discount plus
the Methanol Delivery Cost is referred to as the “Methanol Transfer Price”. For
2008, (A) the Methanol Discount shall be ***** of the *****, and (B) the
Methanol Delivery Cost for each Month shall be ***** per gallon. For any Month,
Methanol consumption will be deemed to be the inventory of Methanol contained in
the Company’s methanol tank at the beginning of such Month plus the aggregate
quantity of Methanol deposited into the Company’s methanol tank during such
Month minus the inventory of Methanol contained in the Company’s methanol tank
at the end of such Month; provided, however, any discrepancy between the amount
measured by the meter that measures the flow of Methanol into the Unit and the
amount measured by the Methanol Measuring Equipment will be reconciled on an
annual basis. In

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the event that ***** discontinues its methanol consulting service, then BP and
the Company shall, by written agreement, replace ***** with another reported
methanol price.
          (b) In the event that the parties fail to agree upon the Methanol
Discount or the Methanol Delivery Cost applicable to any Contract Year prior to
January 1 of such Contract Year, (i) the Methanol Discount and/or Methanol
Delivery Cost, as applicable, for Methanol consumed or Supplied Methanol
delivered in each Month during such Contract Year shall be the Methanol Discount
or Methanol Delivery Cost, as applicable, used in the immediately preceding
Contract Year until such time as the Methanol Discount or Methanol Delivery
Cost, as applicable, for the current Contract Year has been agreed upon or
otherwise determined pursuant to this Section 15.2 and (ii) once the Methanol
Discount and/or Methanol Delivery Cost for the current Contract Year has been
agreed upon or otherwise determined pursuant to this Section 15.2, the Methanol
Discount or Methanol Delivery Cost, as applicable, shall be retroactively
adjusted to such agreed upon or determined Methanol Discount and/or Methanol
Delivery Cost for all Methanol consumed and all Supplied Methanol delivered in
such Contract Year.
          (c) In the event that the parties fail to agree upon the Methanol
Discount applicable to any Contract Year prior to March 1 of such Contract Year,
either party may, for so long as such failure continues, elect, by providing
written notice to the other party of such election, to have the Methanol
Discount for such Contract Year determined by Jim Jordan and Associates, whose
determination shall be final and binding on the parties for such Contract Year;
provided, however, that in the event that Jim Jordan and Associates discontinues
its methanol consulting service, then BP and the Company shall, by written
agreement, replace Jim Jordan and Associates as the determining party with
another relevant consulting service. The goal of Jim Jordan and Associates (or
such other consulting service) in making such determination shall be to arrive
at the generally prevailing discount to the ***** as of the time of
determination for contract purchases of large parcels of methanol in the United
States Gulf Coast. In the event that the parties fail to agree upon the Methanol
Delivery Cost applicable to any Contract Year prior to March 1 of such Contract
Year, BP shall provide to the Company detailed information regarding the
Methanol Delivery Cost. After provision of such detailed information, if the
parties still fail to agree upon the Methanol Delivery Cost applicable to such
Contract Year, either party may, for so long as such failure continues, elect,
by providing written notice to the other party of such election, to have the
Methanol Delivery Cost for such Contract Year determined by any independent
national public accounting firm chosen by such party who is either not then
providing accounting or auditing services to such party or is agreed by the
other party (with knowledge of such relationship), whose determination shall be
final and binding on the parties for such Contract Year. The goal of such
national accounting firm in making such determination shall be to arrive at an
amount that will reflect BP’s actual reasonable costs of purchasing and
delivering such Methanol to the Company, including without limitation the costs
of delivering such Methanol from the supplier’s terminal to the Unit and
surveyor’s costs.
          15.3 For all Methanol delivered pursuant to Section 15.1 and all
Supplied Methanol delivered pursuant to Section 15.4, the point of delivery
shall be the point of transfer of custody of such Methanol to the Company, which
for purposes of this Agreement shall mean the last exit flange on the ship,
barge or other inland or marine vessel from which the Methanol or Supplied
Methanol is unloaded. Risk of loss shall pass from BP to the Company at such
flange and the Company shall be

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in control and possession of the Methanol and Supplied Methanol delivered by BP
pursuant to Section 15.1 or Section 15.4 hereof and responsible for any damage
or injury caused thereby after risk of loss with respect thereto has passed to
the Company. As between the Company and BP, BP shall be deemed to be in control
and possession of the Methanol and Supplied Methanol delivered by BP pursuant to
Section 15.1 or 15.4 hereof and responsible for any damage or injury caused
thereby until risk of loss with respect thereto has passed to the Company.
          15.4 In the event that any plant or facility that is located on the
Plant Site consumes methanol in its operations, irrespective of whether such
plant or facility exists as of the Effective Date or is subsequently constructed
(but not including any plant or facility, irrespective of whether such plant or
facility exists as of the Effective Date or is subsequently constructed, that is
located on real estate that is acquired by the Company after the Effective
Date), BP shall supply to the Company, from and after the later of (a) the date
specified in a written request from the Company to commence such supply and
(b) the twelfth Month starting after the receipt of a written request from the
Company to commence such supply, under the standard terms and conditions of BP
or an Affiliate of BP for sales of methanol to third parties (other than
payment), all such quantities of methanol as are required by such plant or
facility to the Company (all such methanol, “Supplied Methanol”) at the Methanol
Transfer Price for the Month of delivery of such Supplied Methanol; provided,
however, that the obligation of BP to supply such Supplied Methanol shall not
exceed ***** gallons per year unless BP agrees in writing to supply such excess
(such agreement to be granted or withheld in BP’s sole discretion). The Supplied
Methanol delivered during a Month multiplied by the Methanol Transfer Price for
that Month equals the “Supplied Methanol Offset” for that Month. The Company
shall use such Supplied Methanol in such plant or facility or sell such Supplied
Methanol to the owner of such plant or facility at a price per gallon ***** (the
“Methanol Sales Price”). During any Month that the Company sells such Supplied
Methanol, the credit (the “Supplied Methanol Credit”) for such Month shall be
any positive amount resulting from multiplying the gallons of such Supplied
Methanol sold by the Company during such Month by the amount (if any) by which
the Methanol Sales Price for such Month exceeds the Methanol Transfer Price for
such Month.
Article 16
Special Expenditure
          16.1 A project and Special Expenditure, and the manner of
reimbursement or payment to the Company therefor, shall be agreed upon by the
parties hereto; provided, however, that the Company may, where circumstances
reasonably require, without the approval of BP, commence a project and Special
Expenditure necessary, in the sole judgment of the Company, (a) to ensure that
the Unit, the Barge, the Rail Cars (or the operation of any of the foregoing) or
the production, delivery, storage, shipment, sale, resale, use, disposal or
transportation of Acetic Acid, Unit Product, Methanol, feedstocks, supplies,
materials or wastes comply with applicable laws and regulations, or (b) to
provide for the health or safety of the Company’s employees, the public or the
environment. The Company shall at the earliest practicable opportunity notify BP
of such project and Special Expenditure and all costs actually incurred by the
Company with respect to such project and Special Expenditure shall be promptly
reimbursed by BP to the Company upon receipt of an invoice therefor.

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Article 17
Capital Expenditures
          17.1 All Minor Capital Items shall be paid by the Company but shall be
reimbursed by BP upon receipt of an invoice, provided that the Company complies
with the procedures described in this Article 17. The cost of all Major Capital
Items shall be paid by the Company and invoiced to BP in accordance with the
Profit sharing ratios in effect during such period. Expenditures on Major
Capital Items will have no effect on the definition of Profit, and such
expenditures will be made for jointly approved projects without regard to the
presence or absence of Profit. For Major Capital Items exceeding five million
dollars, BP may participate in formal staged reviews of the project, including,
but not limited to, health, safety and environmental design reviews and
pre-start up reviews.
          17.2 At the Semiannual Meeting to be held in September or October of
each Contract Year, the parties shall discuss items that may be addressed in the
proposed annual capital budget for the following Contract Year. At least 45
calendar days prior to the beginning of each Contract Year, the Company will
prepare a detailed annual capital budget for the Unit for such Contract Year.
          17.3 When the Company desires to obtain a disbursement from BP for a
Capital Project described in the capital budget, the Company shall furnish BP
with the details of the proposed Capital Project including (a) the estimated
cost of such proposed Capital Project, (b) the estimated benefits of the
proposed Capital Expenditure, (c) the proposed schedule for such Capital Project
and (d) an estimate of any changes which will result to the Variable Costs, the
Company Fixed Costs, the Acetic Acid production volume or the Specifications,
for authorization and disbursement of funds in accordance with the procedures in
this Article 17.
          17.4 Additional Capital Projects may be added to the capital budget
described in Section 17.2 by the Company at any time during a Contract Year,
provided that the approval of BP has first been obtained; provided, however,
that the Company may, where circumstances reasonably require, without the
approval of BP, commence additional Capital Projects and make Capital
Expenditures not contemplated by the capital budget described in Section 17.2 if
necessary, in the sole judgment of the Company, (a) to ensure that the Unit, the
Barge, the Rail Cars (or the operation of any of the foregoing) or the
production, delivery, storage, shipment, sale, resale, use, disposal or
transportation of Acetic Acid, Unit Product, Methanol, feedstocks, supplies,
materials or wastes comply with applicable laws and regulations, or (b) to
provide for the health or safety of the Company’s employees, the public or the
environment. The Company shall at the earliest practicable opportunity notify BP
of any such additional Capital Project and all costs actually incurred and all
Capital Expenditures actually made by the Company with respect to such
additional Capital Project shall be promptly reimbursed by BP to the Company
upon receipt of an invoice therefor.
          17.5 Except as otherwise provided in Section 17.4, all Capital
Projects may be committed to by the Company and expended by the Company only
after the approval of BP in writing.

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          17.6 The effective date of any changes in the Specifications will be
the date the Capital Project in question is completed or demonstrated. The
actual results arising from a Capital Project shall be determined by BP and the
Company no later than six months after such completion date. If BP and the
Company agree that the actual results therefrom differ from those anticipated in
Section 17.2 hereof, the Specifications shall be adjusted to take account of the
actual results obtained. The Company will notify BP promptly after the
completion of any Capital Project and all costs associated with such Capital
Project will be billed to BP by the Company within 120 calendar days after its
completion.
          17.7 BP shall designate in writing to the Company the name of the BP
representatives authorized to approve Capital Projects on behalf of BP, which
representatives may be changed from time to time by BP by written notice to the
Company.
Article 18
Personnel
          The Company shall at all times have sole authority with respect to all
personnel matters involving the employees, consultants and third-party
contractors at the Plant and the Unit, including but not limited to salaries,
bonuses, benefits, compensation, indirect personnel costs, manpower needs,
training, insurance, labor matters, working hours, job responsibilities, bonding
and all other employee, personnel-related and contracting matters.
Article 19
Representations and Warranties of the Company
          The Company represents and warrants to BP as follows:
          19.1 Organization, Good Standing and Corporate Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, is duly qualified to do business as a foreign
corporation in the State of Texas, and has all requisite corporate power and
authority to carry on its business as presently conducted, to enter into this
Agreement and perform its obligations hereunder.
          19.2 Authority Relative to Agreement. The execution, delivery and
performance by the Company of this Agreement have been duly and effectively
authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by the Company and is a legal, valid and binding
obligation of the Company enforceable in accordance with its terms, except
insofar as enforcement may be limited by (a) bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors’ rights generally and (b) general principles of equity.
          19.3 No Conflict with Other Instruments or Proceeding. Neither the
execution and delivery of this Agreement, nor the performance or compliance with
the terms and conditions hereof conflict with, or will result in a breach by the
Company of, or constitute a default under, or result in the creation of any
lien, charge or encumbrance upon, any asset of the Company pursuant to any of

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the terms, conditions or provisions of (a) the Certificate of Incorporation or
Bylaws of the Company, (b) any mortgage, deed of trust, lease, contract,
agreement or other instrument to which the Company is a party or by which the
Company may be bound or affected, or (c) any writ, order, judgment, decree,
statute, ordinance, regulation or any other restriction of any kind or
character, to which the Company is subject, or by which the Company may be bound
or affected.
          19.4 No Litigation or Proceeding. As of the Effective Date, there are
no actions, suits, investigations or proceedings pending or to the Company’s
knowledge threatened against the Company at law or in equity or before or by any
federal, state, municipal or other governmental or non-governmental department,
commission, board, bureau, agency or instrumentality seeking to enjoin, restrain
or otherwise prevent the execution and delivery of this Agreement by the
Company.
          19.5 No Warranties. The Company Hereby Expressly Disclaims And Negates
(i) Any Representation Or Warranty (Express, Implied, Common Law, Statutory Or
Otherwise) Relating To The Unit, The Barge, The Rail Cars, Or The Operation Of
Any Of The Foregoing, Or Any Other Tangible Personal Property And Fixtures
Including But Not Limited To Any Warranty Of Merchantability Or Fitness For A
Particular Purpose Or Fitness Of Design Or Engineering, Except As Expressly Set
Forth Herein, And (ii) Any Implied Representation Or Warranty Relating To Any
Acetic Acid Or Unit Product Sold Hereunder, Including But Not Limited To Any
Implied Warranty Of Merchantability Or Fitness For A Particular Purpose Or
Fitness Of Design Or Engineering.
Article 20
Representations and Warranties of BP
          BP represents and warrants to the Company as follows:
          20.1 Organization. BP is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, is duly
qualified to do business as a foreign corporation in the State of Texas, and has
all requisite corporate power and authority to carry on its business as
presently conducted, to enter into this Agreement and perform its obligations
hereunder.
          20.2 Authority Relative to Agreement. The execution, delivery and
performance by BP of this Agreement have been duly and effectively authorized by
all necessary corporate action. This Agreement has been duly executed by BP and
is a legal, valid and binding obligation of BP enforceable in accordance with
its terms, except insofar as enforcement may be limited by (a) bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors’ rights generally and (b) general principles of equity.
          20.3 No Conflict with Other Instruments or Proceedings. Neither the
execution and delivery of this Agreement, nor the performance or compliance with
the terms and conditions hereof conflict with, or will result in a breach by BP
of, or constitute a default under, or result in the creation of any lien, charge
or encumbrance upon, any asset of BP pursuant to any of the terms, conditions or
provisions of (a) the Certificate of Incorporation or Bylaws of BP, (b) any
mortgage,

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deed of trust, lease, contract, agreement or other instrument to which BP is a
party or by which BP may be bound or affected, or (c) any writ, order, judgment,
decree, statute, ordinance, regulation or any other restriction of any kind or
character, to which BP is subject, or by which BP may be bound or affected.
          20.4 No Litigation or Proceedings. As of the Effective Date, there are
no actions, suits, investigations or proceedings pending or to BP’s knowledge
threatened against or affecting BP at law or in equity or before or by any
federal, state, municipal or other governmental or non-governmental department,
commission, board, bureau, agency or instrumentality seeking to enjoin, restrain
or otherwise prevent the execution and delivery of this Agreement by BP.
Article 21
Participation in Negotiations
          Upon any amendment to or the expiration from time to time of any of
the supply contracts in effect as of the Effective Date pursuant to which carbon
monoxide is or is to be supplied to the Unit, and before entering into any new
supply contracts for carbon monoxide for the Unit, at BP’s request the Company
shall permit BP to participate in (a) the negotiations which the Company
conducts with such suppliers and (b) the resolution of any disputes relating to
the supply of carbon monoxide to the Unit. Except as otherwise provided herein,
the Company may, without participation by BP, negotiate and shall have the
right, without the approval of BP, to enter into all contracts relating to
supplies, materials, feedstocks (except Methanol so long as BP has not defaulted
in its contractual obligations with respect thereto), utilities, treatment,
disposal and other services or materials or property required in the Company’s
opinion for the operation of the Unit, the Barge, the Rail Cars or the storage
facilities or the performance of its obligations hereunder; provided, however,
that the Company shall, prior to implementing any material change in its
strategies for acquiring natural gas to be consumed by the Unit, discuss such
change with BP.
Article 22
Access to Information
          22.1 Upon written request by BP from time to time, the Company shall
provide to BP, its attorneys, accountants and other representatives, subject to
the confidentiality provisions of Section 26.1 hereof, at reasonable times
during normal business hours, access to the Company’s books, records and
accounts relating to the operation of the Unit and the performance of the
Company’s obligations under this Agreement, except as such access may be
prohibited by licenses or sub-licenses from a third party other than BPCL to
which the Company is a party. BP shall thereupon have the right to make copies
of and abstracts from such books, records and accounts, at BP’s expense, which
copies may be removed from the premises of the Company and retained by BP,
subject to the confidentiality provisions of Section 26.1 hereof.
          22.2 The Company agrees to permit representatives of BP, at BP’s
expense for purposes other than the Acetic Acid Technology Agreement, to have
(a) access to the Unit at reasonable times and on reasonable notice to obtain
information relating to the present or proposed operations of the

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Unit so long as such access does not materially disrupt the operation of the
Unit, and (b) access to those portions of the Plant that serve the Unit at
reasonable times and on reasonable notice to obtain information and audit the
environmental status and condition of those portions of the Plant that serve the
Unit and the operations thereof as long as such access does not materially
disrupt the operation of the Plant and BP pays all costs relating thereto. BP
shall cause all of its personnel to comply with the Company’s safety, health,
security and reasonable confidentiality procedures and policies at all times
while at the Plant. BP agrees to furnish the Company with copies of all
information and audits obtained or prepared pursuant to the provisions of this
Section 22.2. The Company shall make its employees and other representatives
available to BP for purposes other than the Acetic Acid Technology Agreement at
reasonable times on reasonable notice to discuss the present or proposed
operations of the Unit so long as such availability does not materially disrupt
the operation of the Unit or the Plant.
          22.3 Upon written request by the Company from time to time, BP shall
provide to the Company and its attorneys, accountants and other representatives,
subject to the confidentiality provisions of Section 26.1 hereof, at reasonable
times during normal business hours, access to BP’s books, records and accounts
relating to the calculation of Profit, Methanol supplies, cost savings and the
performance of BP’s obligations under this Agreement. The Company shall
thereupon have the right to make copies of and abstracts from such books,
records and accounts, at the Company’s expense, which copies may be removed from
the premises of BP and retained by the Company, subject to the confidentiality
provisions of Section 26.1 hereof.
Article 23
Semiannual Meetings
          23.1 At the Semiannual Meetings, the representatives of BP and the
Company shall review such matters as may be determined as appropriate by the
parties.
          23.2 At the Semiannual Meeting to be held in September or October of
each Contract Year, the parties shall discuss items that may be addressed in the
proposed operating plan for the following Contract Year. At least 45 calendar
days prior to the beginning of each Contract Year, the Company shall deliver to
BP a proposed operating plan (including proposed Special Expenditures, Capital
Projects, Capital Expenditures and Company Fixed Costs) for the Unit, the Barge,
the Rail Cars and the other equipment and property used in connection therewith,
prepared by the Company in good faith and upon realistic assumptions, for the
following Contract Year. Each operating plan will be agreed to by both parties
at least 15 calendar days prior to the beginning of the applicable Contract
Year. In the absence of such an agreement on or before the first calendar day of
the Contract Year to which such proposed operating plan would, if agreed, apply,
the Company shall be entitled to operate, maintain, repair, renovate, remodel,
change and make expenditures as may be reasonably necessary for the operation of
the Unit and in a manner consistent with the pattern of expenditures made in the
preceding Contract Year but excluding any Capital Expenditures unless approved
by BP pursuant to this Agreement (except to the extent otherwise permitted under
Section 16.2 or Section 17.4). Except as otherwise provided in this Agreement, a
material change to an operating plan previously agreed upon by the parties shall
require the approval of both parties.

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Article 24
Financial Assurances
          In the event any federal, state or other governmental authority
requires the Company to provide financial assurances (e.g., a letter of credit,
bond or cash deposit) in connection with the Unit, its operations or any Spills
or Releases, the Company will use commercially reasonable efforts to provide the
same, and BP will reimburse the Company for all premiums or other costs incurred
by the Company in connection with procuring (or, in the case of a cash deposit,
the financing cost of making) such financial assurances, upon receipt of an
invoice therefor; provided, however, that it is understood and agreed that this
Article 24 is not intended to apply to any costs or expenses for any remediation
or clean-up of any Hazardous Acetic Acid Substances, the responsibility for such
costs and expenses being determined solely by reference to Article 30.
Article 25
Arbitration
          25.1 All disputes, differences or questions arising out of or relating
to this Agreement (including but not limited to those as to the validity,
interpretation, breach, violation or termination hereof) shall be finally
determined and settled pursuant to arbitration at Austin, Texas, by three
arbitrators, one to be appointed by the Company, one by BP, and a neutral
arbitrator to be appointed by such two party-appointed arbitrators. The neutral
arbitrator shall be an attorney and shall act as chairman. Any such arbitration
may be initiated by a party by written notice (“Arbitration Notice”) to the
other party specifying the subject of the requested arbitration and appointing
such party’s arbitrator for such arbitration.
          25.2 Should (a) a party receiving an Arbitration Notice fail to
appoint an arbitrator as hereinabove contemplated by written notice to the party
giving the Arbitration Notice within ten calendar days after the receipt of the
Arbitration Notice, or (b) the two arbitrators appointed by or on behalf of the
parties as contemplated in Section 25.1 hereof fail to appoint a neutral
arbitrator as hereinabove contemplated within ten calendar days after the date
of the appointment of the last arbitrator appointed by or on behalf of the
parties, then a Judge of the United States District Court for the Western
District of Texas, Austin Division, upon application of the Company or of BP,
shall appoint an arbitrator to fill any such position with the same force and
effect as though such arbitrator had been appointed as hereinabove contemplated.
          25.3 All discovery requests will be subject to the parties’ rights to
claim any applicable privilege. The arbitrators may adopt procedures to protect
the proprietary rights of the parties and to maintain the confidential treatment
of the arbitration proceedings (except as may be required by law). Subject to
the foregoing, the arbitrator shall have the power to issue subpoenas to the
parties and, to the extent permitted by the Commercial Rules of the American
Arbitration Association, to third parties, in either case, to compel the
production of relevant documents, to impose sanctions and to take such other
actions as the arbitrators deem necessary to the same extent a judge could
pursuant to the Federal Rules of Civil Procedure and applicable law.

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          25.4 At any time after submission of an Arbitration Notice, either
party may request a court of competent jurisdiction to grant interim measures of
protection (a) to preserve the status quo pending resolution of the dispute,
difference or question or (b) to prevent the destruction of documents and other
information or things related to the dispute, difference or question. A request
for such interim measures to a judicial authority shall not be deemed
incompatible with the provisions of this Article 25.
          25.5 During the course of dispute resolution pursuant to the
provisions of this Article 25, the parties’ rights and obligations under this
Agreement will continue.
          25.6 The arbitration proceeding shall be conducted in the English
language in Austin, Texas, in accordance with the Commercial Rules of the
American Arbitration Association. A determination, award or other action shall
be considered the valid action of the arbitrators if supported by the
affirmative vote of two or three of the three arbitrators. The award shall be in
writing and shall state the reasoning on which the award rests. The costs of
arbitration (exclusive of the expense of a party in obtaining and presenting
evidence and attending the arbitration, and of the fees and expenses of legal
counsel to such party, all of which shall be borne by such party) shall be
shared equally by the Company and BP. The arbitration award shall be final and
conclusive and shall receive recognition, and judgment upon such award may be
entered and enforced in any court of competent jurisdiction.
Article 26
Confidentiality and Intellectual Property
          26.1 During the term of this Agreement and thereafter, all information
relating to the business, products, assets and finances of the Company or BP or
their respective Affiliates, including but not limited to financial statements
and related books and records, minutes books, personnel records, lists of
customers and potential customers, lists of suppliers and potential suppliers,
price and cost data, computer programs, computer hardware, reports and similar
information and records, shall be treated as confidential to the Company or BP
or their respective Affiliate, as the case may be, and as confidential by BP or
the Company, as the case may be, and shall not be disclosed directly or
indirectly by or for BP or the Company or their respective officers, employees,
agents, Affiliates or representatives to, or used for the benefit of, BP or the
Company or any other person; provided, however, that (a) all information
provided in connection with and covered by the Acetic Acid Technology Agreement
shall be excluded from the obligations contained in this Section and shall be
covered solely by the confidentiality provisions contained in the Acetic Acid
Technology Agreement and (b) BP and its Affiliates shall not have any obligation
under this Section to maintain as confidential the fact that the Company
produced any particular Acetic Acid or Unit Product or the specifications of
such Acetic Acid or Unit Product. At the expiration or termination of this
Agreement, the obligations as to confidentiality herein shall continue for a
period of five years from the date of such expiration or termination.
Notwithstanding the foregoing, in the event that BP declares force majeure with
respect to deliveries of Acetic Acid to the Texas City VAM Facility due to an
interruption or discontinuance of supply of Acetic Acid from the Company, BP may
provide such information to the owner of the Texas City VAM Facility as is
reasonably necessary for such owner to confirm that the interruption or
discontinuance of supply of Acetic Acid from the Company

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was beyond BP’s reasonable control, including but not limited to any agreement
or correspondence between BP and the Company relevant to the interruption or
discontinuance of supply of Acetic Acid from the Company; provided, however,
that prior to such disclosure the owner of the Texas City VAM Facility has
entered into a written commitment to maintain the confidentiality of such
information for the benefit of the Company, which written commitment is in form
and substance reasonably satisfactory to the Company.
          26.2 The rights and obligations of BP, BPCL and the Company with
respect to confidentiality and intellectual property relating to the acetic acid
process or acetic acid technology licensed by BPCL to the Company are set forth
in the Acetic Acid Technology Agreement.
Article 27
Events of Default; Other Breaches; Remedies
          27.1 If a Company Event of Default shall occur and be continuing, BP
may, at its option, by written notice to the Company, declare the Company to be
in default hereunder (“Declaration of Company Default”); provided, however, that
a Declaration of Company Default shall not relieve or otherwise discharge the
Company from the performance of its obligations under this Agreement, except to
the extent that the exercise by BP of its remedies pursuant to the provisions of
Section 27.3 hereof otherwise prevents or restricts the Company with respect
thereto.
          27.2 If a BP Event of Default shall occur and be continuing, the
Company may, at its option, by written notice to BP, declare BP to be in default
hereunder (“Declaration of BP Default”); provided, however, that a Declaration
of BP Default shall not relieve or otherwise discharge BP from the performance
of its obligations under this Agreement.
          27.3 BP may, by written notice to the Company, terminate this
Agreement if a Company Event of Default under clause (i) of the definition
thereof occurs and continues for at least 60 calendar days after receipt by the
Company of a Declaration of Company Default; provided, however, that (a) BP
provides the Company with written notice within eight Business Days after the
end of each Month that it believes that the Company has failed to deliver Acetic
Acid to BP substantially in accordance with the Shipment Instructions and
(b) for purposes of this Section, the parties acknowledge and agree that the
delivery of Unit Product rather than Acetic Acid shall not be considered a
failure to deliver Acetic Acid to BP substantially in accordance with the
Shipment Instructions and, consequently, no notice from BP to the Company shall
be required under clause (a) above relating to the delivery by the Company to BP
of Unit Product rather than Acetic Acid. Upon any other Declaration of Company
Default, BP may, by written notice to the Company, require the Company to
permit, and the Company shall permit at BP’s risk, but at the Company’s cost
(subject to BP’s duty to reasonably mitigate such cost), such employees of BP as
BP may require to have access to the Unit and those parts of the Plant that
serve the Unit for the purpose of seeking and implementing (including, if
necessary, operating the Unit, in which event the costs associated with such
operation shall be paid by BP and taken into account when determining Profit for
the relevant Contract Year) a solution to the cause of the Company Event of
Default, and the Company shall cause its employees to comply with the reasonable
requests and instructions of BP’s said employees while present in the Plant or
the Unit; provided, however, that BP shall indemnify and hold the

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Company harmless pursuant to the provisions of Article 30 hereof from Damages
which the Company may suffer or incur by reason of permitting such employees of
BP to have such access and provided further that BP shall not materially disrupt
the Company’s operations on other parts of the Plant. BP’s access to the Unit
and those parts of the Plant that serve the Unit shall continue until the Unit
has operated so as to enable the Company to comply with its obligations
hereunder for one calendar month. BP shall thereupon withdraw its employees from
the Unit and the Plant. After withdrawing such employees, BP shall not have any
rights pursuant to the provisions of this Section 27.3 of access to the Plant or
the Unit for a period of 30 calendar days beginning on the date of such
withdrawal. Once BP has withdrawn its employees, (i) if the Company fails to
operate the Unit during such 30 calendar day period following such withdrawal by
BP in such a manner as to enable the Company to comply with its obligations
under this Agreement, BP shall have the right to require the Company to permit
BP’s employees to have access to the Unit and those parts of the Plant which
serve the Unit immediately upon the expiration of such 30-day period, or (ii) if
the Company operates the Unit throughout such 30-day period following such
withdrawal by BP in such a manner as to enable the Company to comply with its
obligations under this Agreement, BP shall have no right to require the Company
to permit BP’s employees to have such access until a subsequent Declaration of
Company Default, if any.
          27.4 Upon a Declaration of BP Default, the Company may, by written
notice to BP, (a) cease all further production of Acetic Acid for BP under this
Agreement, (b) commence production of Acetic Acid using Methanol other than that
which is provided by BP hereunder, at which time title to any Acetic Acid or
Unit Product produced shall not automatically vest in BP as set forth in
Article 7 hereof, (c) sell Acetic Acid or Unit Product produced following a
Declaration of BP Default to third parties solely for the Company’s account
until such time as BP complies with its obligations hereunder and (d) upon
written notice to BP, use the Oiltanking Pipeline until such time as BP complies
with its obligations hereunder; provided, however, that the Company shall pay BP
a reasonable throughput fee for all Acetic Acid or Unit Product delivered
through the Oiltanking Pipeline. The Company may, by written notice to BP,
terminate this Agreement if a BP Event of Default under clause (i) of the
definition thereof occurs and continues for at least 60 calendar days after
receipt by BP of a Declaration of BP Default; provided, however, that if (i) the
financial obligation that BP has failed to perform is the subject of a good
faith dispute between BP and the Company and (ii) BP has complied with the
provisions of Section 6.7 on or before the 90th calendar day after the date when
such financial obligation became due and payable, then the Company shall not be
entitled to terminate this Agreement as a result of such failure unless and
until BP fails to perform such financial obligation as the arbitration
determines is owing by BP for 30 calendar days after receipt of notice of such
determination by the arbitration panel.
          27.5 In the event of any breach or failure to perform hereunder by BP
or the Company, which breach or failure continues for a period of 30 calendar
days after written notice thereof, the other party hereto shall be entitled to
pursue all rights and remedies provided at law or in equity for such breach or
failure including but not limited to seeking and recovering Damages therefor or
the remedy of specific performance of this Agreement whether or not such remedy
is otherwise normally available; provided, however, that unless such right is
specifically provided in this Article 27, neither party shall be entitled to
seek a termination of this Agreement in connection with such breach or failure.

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Article 28
SEC Reports
          The Company shall, at the same time and in the same manner that the
Company makes such reports available to its stockholders, furnish to BP all
quarterly reports on Form 10-Q, annual reports on Form 10-K and current reports
on Form 8-K filed by the Company with the Securities and Exchange Commission.
Article 29
Survival
          The covenants and agreements contained in Article 30 hereof, together
with all indemnity and payment obligations of any party hereto owing to the
other party on the date of expiration or termination hereof or arising
thereafter based on events or occurrences prior to the expiration or termination
of this Agreement shall survive such expiration or termination and for the
period of the applicable statute of limitations (or, if there is no such
statute, for the longest period permitted by law) with respect to such
obligations.
Article 30
Indemnification
          30.1 Except as otherwise provided herein, the Company, from and after
the Effective Date, shall indemnify and hold BP harmless from and against any
and all Damages suffered or incurred by BP on account of or arising from or
related to the breach of, or the failure to perform or satisfy any of, the
representations, warranties, covenants or agreements made by the Company in or
under this Agreement, any liability to any party whether incurred under statute
or in tort or otherwise arising directly or indirectly from the operations
carried on by or on behalf of the Company at or in connection with the Plant or
arising out of Spills or Releases (whether occurring before or after the
expiration or termination of this Agreement), except to the extent such Spills
or Releases are attributable to the acts or intentional omissions of, or breach
of this Agreement by, BP. In addition, the Company shall indemnify and hold BP
harmless from and against any and all Damages suffered or incurred by BP on
account of or arising from or related to any emission, discharge, release or
threatened release, migration, or the presence, of any raw material, pollutant,
contaminant, hazardous substance, toxic material or waste that is not a
Hazardous Acetic Acid Substance, in, on, into or upon ambient air, surface
water, ground water or land, or subsurface strata or otherwise at, on, under,
from or near the real estate that is part of the Plant, and whether occurring
before or after the Effective Date, to the extent such emission, discharge,
release or threatened release, migration or presence arises or has arisen out of
any activity at the Plant Site or any property adjoining the Plant Site that is
acquired by the Company after the Effective Date (“Plant Pollution”), except to
the extent attributable to the acts or intentional omissions of, or breach of
this Agreement by, BP. BP shall not have any obligations with respect to, or pay
any costs relating to, Plant Pollution except to the extent such Plant Pollution
is attributable to the acts, omissions or default of BP. Any indemnity
obligation

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of the Company will not be a Company Fixed Cost or a Variable Cost or otherwise
be reimbursable in whole or in part under this Agreement.
          30.2 Except as otherwise provided herein, BP, from and after the
Effective Date, shall indemnify and hold the Company harmless from and against
any and all Damages suffered or incurred by the Company on account of or arising
from or related to the breach of, or the failure to perform or satisfy any of,
the representations, warranties, covenants or agreements made by BP in or under
this Agreement, or any liability to any party whether incurred under statute or
in tort or otherwise arising directly or indirectly from the actions of BP
carried out in connection with this Agreement excepting any Damages arising out
of Spills or Releases occurring during the Term (unless such Spills or Releases
are attributable to the acts, omissions or default of BP). Any indemnity
obligation of BP will not be taken into account in determining Profit hereunder
or otherwise be reimbursable in whole or in part under this Agreement.
          30.3 As soon as practicable after BP or the Company becomes aware of
the discovery of facts or otherwise receives actual notice of any Damages giving
rise to a claim by it for indemnification hereunder (a “Claim”), such party will
provide notice thereof in writing to the other party; provided, however, that
the failure to so notify the other party shall not relieve the other party from
any liability which it may have under this Article 30, except to the extent of
material detriment suffered by such other party as a result of such failure. For
purposes of this Section 30.3, receipt by a party of notice of any demand,
assertion, claim, action or proceeding (judicial, administrative or otherwise)
by or from any person or entity (other than the other party to this Agreement)
or governmental authority (“Third Party Action”) which may give rise to a Claim
on behalf of such party shall constitute the discovery of facts giving rise to a
Claim by it and shall require notice of the receipt of such matter as provided
in the first sentence of this Section 30.3. Any notice pursuant to this
Section 30.3 shall set forth all information regarding the Claim and the Third
Party Action, if any, as such party shall then have and shall contain a
statement to the effect that the party giving the notice is making a Claim
pursuant to and formal demand for indemnification under this Article 30.
          30.4 For purposes of this Article 30, the term “Indemnifying Party,”
as to a particular Claim or Third Party Action shall mean the party having or
which is held to have an obligation to indemnify the other party with respect to
such Claim or Third Party Action pursuant to this Article 30 and the term
“Indemnified Party” as to a particular Claim or Third Party Action shall mean
the party having or which is held to have the right to be indemnified with
respect to such Claim or Third Party Action by the other party pursuant to this
Article 30.
          30.5 Except as otherwise expressly provided herein, Indemnifying Party
shall be entitled at its cost and expense to contest and defend by all
appropriate legal proceedings any Third Party Action with respect to which it is
called upon to indemnify Indemnified Party under the provisions of this
Agreement; provided, however, that with respect to any Claim arising from the
assertion of any Third Party Action, notice of the intention so to contest shall
be delivered by Indemnifying Party to Indemnified Party within 20 calendar days
from the date of mailing by Indemnified Party of notice to Indemnifying Party of
the assertion of the Third Party Action. Any such contest with respect to a
Third Party Action may be conducted in the name and on behalf of Indemnifying
Party or Indemnified Party as may be appropriate. Except as otherwise expressly
provided herein, such contest shall be conducted by attorneys employed by
Indemnifying Party, but Indemnified Party

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shall have the right to participate in such proceedings and to be represented by
attorneys of its own choosing at its sole cost and expense. If Indemnified Party
joins in any such contest, Indemnified Party shall have full authority to
determine all action to be taken with respect thereto. If after notice as
provided for herein, Indemnifying Party does not elect to contest any Third
Party Action as provided in this Section 30.5, Indemnifying Party shall be bound
by the result obtained with respect thereto by Indemnified Party and Indemnified
Party may (but shall have no obligation to) contest any such Third Party Action
or settle or admit liability with respect thereto, all for the account of
Indemnifying Party. At any time after the commencement of defense of any such
Third Party Action, Indemnifying Party may request Indemnified Party to agree in
writing to the abandonment of such contest or the payment or compromise by
Indemnifying Party of the asserted Third Party Action whereupon such action
shall be taken unless Indemnified Party so determines that the contest should be
continued, and so notifies Indemnifying Party in writing within 15 calendar days
of such request from Indemnifying Party. In the event that Indemnified Party
determines that the contest should be continued, Indemnifying Party shall be
liable with respect to such Third Party Action only to the extent of the lesser
of (a) the amount which the third party making the Third Party Action had agreed
to accept in payment or compromise as of the time Indemnifying Party made its
request therefor to Indemnified Party, or (b) such amount for which Indemnifying
Party may be liable with respect to such Claim by reason of the provisions
hereof.
          30.6 If requested by Indemnifying Party, Indemnified Party agrees to
cooperate with Indemnifying Party and its counsel in contesting any Third Party
Action which Indemnifying Party elects to contest or, if appropriate, in making
any counterclaim against the third party making the Third Party Action, or any
cross complaint against any other person or entity not a party hereto, but
Indemnifying Party will reimburse Indemnified Party for any expenses incurred by
it in so cooperating.
          30.7 Indemnified Party agrees to afford Indemnifying Party and its
counsel the opportunity to be present at, and to participate in, conferences
with all persons or entities, including governmental authorities, making Third
Party Action against Indemnified Party or conferences with representatives of or
counsel for such persons or entities.
          30.8 Indemnifying Party shall pay to Indemnified Party, upon demand,
the amount of any Damages to which Indemnified Party may become entitled by
reason of the provisions of this Article 30, including, if so demanded,
reimbursement for all of the Indemnified Party’s reasonable expenses (including
reasonable attorneys’ fees and costs of court) for which the Indemnified Party
is entitled to be indemnified hereunder as they are incurred by such Indemnified
Party; provided, however, that if Indemnifying Party disputes its obligation to
provide indemnification hereunder in good faith, Indemnifying Party shall only
be obligated to reimburse 50% of such expenses or Damages until such dispute is
settled, at which time Indemnifying Party or Indemnified Party shall pay to the
other such amounts as are determined to be owing to the other in the settlement
of such dispute, together with interest thereon at the Applicable Interest Rate,
accruing each calendar day from the calendar day such amount was originally due
to Indemnified Party or paid by Indemnifying Party, as the case may be, until
the calendar day such amount is paid or refunded in full. In the event that
Indemnifying Party desires to appeal from an adverse judgment or determination,
then Indemnifying Party shall post and pay the cost of any security or bond to
stay execution of the judgment or determination pending appeal. Upon the payment
in full by Indemnifying Party of all

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amounts owing hereunder in connection with a Third Party Action, Indemnifying
Party shall succeed to the rights of Indemnified Party, to the extent such
rights are not waived in settlement, against the third party making such Third
Party Action. Any amounts which are not paid when due hereunder shall bear
interest at the Applicable Interest Rate.
     30.9 Notwithstanding Anything To The Contrary Contained Herein, Neither Of
The Parties Will Be Liable To The Other Party For Any Consequential, Indirect,
Incidental, Special Or Punitive Damages From Any Cause Whatsoever, Whether Based
In Contract, Tort (Including Negligence), Strict Liability Or Any Other Legal
Theory Unless (a) Such Damages Result From The Gross Negligence Or Intentional
Misconduct Of Such Party Or Any Of Its Affiliates, Contractors Or Employees Or
(b) Such Damages Are Payable By An Indemnified Person Pursuant To A Third Party
Action For Which Indemnification Is Available Hereunder.
Article 31
Additional Rights and Liabilities
     Nothing contained in this Agreement shall require (a) BP to reimburse the
Company for any costs or expenses or to provide financial assurances if such
costs or expenses are incurred or such financial assurances are required for
reasons attributable to a Company Event of Default or (b) the Company to
reimburse BP for any costs or expenses or to provide financial assurances if
such costs or expenses are incurred or such financial assurances are required
for reasons attributable to a BP Event of Default.
Article 32
Force Majeure
     32.1 In the event of either party being rendered unable, wholly or in part,
by force majeure to carry out its obligations under this Agreement (other than
any obligation to make payment of any amount when due and payable hereunder),
the obligations of such party, so far as they are affected by such force
majeure, shall be excused during the continuance of any inability so caused
provided that the party prevented from performing by such force majeure event
(a) provides the other party with written notice of the occurrence of such force
majeure event within a reasonable time after the occurrence thereof, which
notice shall describe such force majeure event in reasonable detail and, to the
extent practicable, include an estimate of the anticipated duration thereof,
(b) takes all actions reasonably necessary to remedy such force majeure event or
its resulting effects, or otherwise remove the basis for non-performance, as
soon as practicable, and (c) upon such remedy or removal resumes performance of
its obligations under this Agreement.
     32.2 The term “force majeure,” as employed herein, shall mean acts of God,
strikes, lockouts or other industrial disturbances, acts of the public enemy,
wars, blockades, embargoes, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, hurricanes, storms, floods, high water, washouts,
arrests and restraints of government and people, civil disturbances, explosions,
breakage or accident to machinery, equipment, lines of pipe or property,
freezing of wells, machines,

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equipment, lines of pipe, or property, partial or entire failure of any machine,
equipment, lines of pipe or other property, the occurrence of any Spill or
Release Requiring Response Action and any regulatory, civil or criminal action
with respect thereto and any other causes, whether of the kind herein enumerated
or otherwise, not reasonably within the control of the party claiming
suspension; such term shall likewise include (a) in those instances where any
party hereto is required to obtain servitudes, rights-of-way grants, permits or
licenses (including permits relating to any Spill or Release Requiring Response
Action) to enable such party to fulfill its obligations hereunder, the inability
of such party to acquire, or delays on the part of such party in acquiring, at
reasonable cost and after the exercise of reasonable diligence, such servitudes,
rights-of-way grants, permits or licenses, (b) in those instances where any
party hereto is required to furnish materials and supplies or is required to
secure permits or permissions from any governmental agency to enable such party
to fulfill its obligations hereunder, the inability of such party to acquire, or
delays on the part of such party in acquiring, at reasonable cost and after the
exercise of reasonable diligence, such materials and supplies, permits and
permissions, and (c) the failure of Praxair to deliver to the Company carbon
monoxide or hydrogen at the times and in the quantities required by the Praxair
Product Supply Agreement; provided, however, that the Company uses reasonable
diligence to resolve such failure to deliver pursuant to the Praxair Product
Supply Agreement.
          32.3 It is understood and agreed that the settlement of strikes or
lockouts shall be entirely within the discretion of the party having the
difficulty, and that the above requirement that any force majeure shall be
remedied with all reasonable dispatch shall not require the settlement of
strikes or lockouts by acceding to the demands of the opposing party when such
course is inadvisable in the sole discretion of the party having the difficulty.
          32.4 Notwithstanding the provisions of Section 32.2 hereof, the
failure by either party to perform any of its obligations under this Agreement
shall be deemed not to have been caused by circumstances reasonably outside its
control if such failure results from breakage or accident to machinery,
equipment, lines of pipe or other property or the partial or entire failure
thereof or the necessity to make repairs or alterations thereto which result
from normal wear and tear which could be reasonably anticipated by a reasonably
prudent operator or in circumstances where a reasonably prudent operator would
have standby equipment or spare parts.
Article 33
Assignments
          33.1 The Company may not assign its rights or delegate its duties or
obligations hereunder or sell, assign or transfer the Unit to any person unless
such assignment, delegation, sale or transfer is:
     (a) pursuant to a transaction involving the sale or exchange of all or
substantially all of the assets of the Plant or the merger or consolidation of
the Company with or into another corporation; provided, however, that, if the
purchaser or acquirer of such assets or the other party to such sale, exchange,
merger or consolidation is a Competitor, the Company must first obtain the prior
written consent of BP, which consent may be granted or withheld by BP, in its
sole discretion;

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     (b) an assignment of this Agreement as collateral to a third party
providing financing to the Company;
     (c) a sale, assignment or transfer of the Unit only and BP has given its
prior written approval to such sale, assignment or transfer of the Unit, which
approval by BP (i) shall not be unreasonably withheld, delayed or conditioned by
BP if such sale, assignment or transfer is to a person who is not a Competitor
(it being understood that if in BP’s good faith judgment, the assignee,
delegatee, purchaser or transferee would not be able to timely perform the
Company’s obligations under the Agreement, this would be a reasonable basis upon
which to withhold approval), or (ii) may be granted or withheld by BP, in its
sole discretion, if such sale, assignment or transfer is to a person who is a
Competitor; provided, however, that any such sale, assignment or transfer of the
Unit must be consummated within six months after BP’s approval thereof on terms
and conditions that are not, in the aggregate, more favorable to the transferee
to a material degree than the terms and conditions approved by BP; or
     (d) an assignment of this Agreement to the other party to a transaction
permitted under clause (a) or (c) above;
provided, however, that notwithstanding the foregoing, Sterling may not assign
its rights or delegate its duties or obligations hereunder to any person or
entity unless Sterling simultaneously assigns all of its rights, interests,
duties and obligations under the Acetic Acid Technology Agreement, or any
successor agreement to the Acetic Acid Technology Agreement, to the same person
or entity. An offering or issuance of securities by the Company or any sale of
securities by the Company’s existing stockholders shall not be deemed an
assignment hereunder. No assignment or delegation by the Company of any of its
rights, interests, duties or obligations hereunder shall relieve the Company of
its obligations and duties under this Agreement unless BP expressly agrees
otherwise in writing.
          33.2 BP may not assign its rights or delegate its duties or
obligations hereunder or sell, assign or transfer all or a substantial part of
its acetic business in the Americas without the prior written consent of the
Company, which consent shall not be unreasonably withheld, delayed or
conditioned; provided, however, that, subject to Section 33.3, BP may assign its
rights or delegate its duties and obligations hereunder or sell, assign or
transfer all or any part of its acetic acid business to any person without the
consent of the Company provided that:
     (a) such assignee, delegatee, purchaser or transferee is not a Competitor,
or such assignee, delegatee, purchaser or transferee is an Affiliate of BP; and
     (b) such assignee, delegatee, purchaser or transferee is of sound financial
condition and, in BP’s good faith judgment, able timely to perform BP’s
obligations under this Agreement.
During the Term, BP shall not assign its rights or delegate its duties or
obligations hereunder or sell, assign or transfer all or a substantial part of
its acetic acid business in the Americas to a Competitor without the prior
written consent of the Company, which consent shall not be unreasonably
withheld, delayed or conditioned; provided, however, that, subject to
Section 33.3, BP may assign its rights or

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delegate its duties and obligations hereunder or sell, assign or transfer all or
any part of its acetic acid business to a Competitor without the consent of the
Company if such sale is made as part of or pursuant to a Major Transaction.
          33.3 Notwithstanding any assignment of any of its rights or a
delegation of any of its duties by BP under this Agreement, BP shall continue to
be responsible for its obligations hereunder, and does hereby unconditionally
and absolutely guarantee the timely payment of all sums due, and the timely
performance of all obligations, by any assignee or delegatee hereunder;
provided, however, that if (a) BP assigns its rights or delegates its duties
hereunder and (b) the assignee or delegatee has a net worth of at least *****
after such assignment or delegation and assumes in writing the obligations of BP
under this Agreement, then (i) the condition specified in Section 33.2(b) shall
be deemed to have been satisfied, (ii) the conditions, restrictions and
limitations contained in this Section 33.3 shall not apply to such assignment of
rights or delegation of duties or obligations and (iii) after such assignment of
rights or delegation of duties, BP shall be relieved of all of its obligations
that were assigned or delegated hereunder, and no guarantee by BP of the payment
of sums or timely performance of such obligations by such assignee or delegatee
shall exist by virtue of this Section 33.3. Upon the written request of the
Company, BP shall execute a separate written guarantee of the performance of
BP’s obligations hereunder by any such assignee or delegatee (other than an
assignee or delegatee described in the proviso to the first sentence of this
Section 33.3), containing provisions usually and customarily contained in
guarantees of financial performance in the United States. On default by any
assignee or delegatee (other than an assignee or delegatee described in the
proviso to the first sentence of this Section 33.3), the Company or the holder
of a collateral assignment of this Agreement may, at its option, proceed
directly and at once against BP to enforce BP’s obligations hereunder, and
exercise all remedies available hereunder, without notice to such assignee or
delegatee or the necessity for proceeding or taking any action against such
assignee or delegatee.
          33.4 Any attempted assignment or delegation by either party hereto not
otherwise permitted hereby which is made without the prior written consent of
the other party shall be ineffective and void for all purposes.
Article 34
General
          34.1(a) Except as otherwise provided in Section 34.1(c), the Company
covenants and agrees with BP that, during the Term, if no BP Event of Default
has occurred and is continuing for which the Company has delivered to BP a
Declaration of BP Default, the Company will not produce or sell acetic acid
other than pursuant to this Agreement without BP’s consent, which consent may be
granted or withheld by BP in its sole discretion; provided, however, that the
disposition of waste or mixed acid pursuant to mutually agreed procedures shall
be permitted and shall not constitute a violation of this Agreement.
          (b) Notwithstanding anything to the contrary contained in this
Agreement (except the remainder of this Section 34.1(b)), in the event that the
Deemed Total Sales Volume averages less than the Minimum Sales Volume over the
last ***** Months (unless such failure is caused by the

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failure of the Company to produce and deliver such Acetic Acid, including
without limitation failures resulting from any scheduled or unscheduled
shutdowns of the Unit (other than shutdowns caused solely by BP not nominating
Acetic Acid in quantities sufficient to operate the Unit), an event of force
majeure or an outage of or production problem at the Texas City VAM Facility),
then, in the next Month:
     (i) of all acetic acid sold or imported by BP or any Affiliate of BP into
***** in such Month (including sales or imports arranged by BP or an Affiliate
of BP), at least ***** of such acetic acid must be Acetic Acid (produced in the
Unit), unless, in each case, the Company otherwise agrees in writing in its sole
discretion;
     (ii) BP will not, and will cause each of its Affiliates to not, enter into
any acetic acid purchase agreements if the acetic acid to be purchased
thereunder will be used, consumed or resold in *****;
     (iii) BP will, and will cause each of its Affiliates to, terminate as soon
as practicable all of its existing acetic acid purchase agreements if the acetic
acid to be purchased thereunder will be used, consumed or resold in *****; and
     (iv) BP will not, and will cause each of its Affiliates to not, sell or
import, or arrange the sale or import of, any acetic acid that is not Acetic
Acid (produced in the Unit), into *****,
unless, in each case, the Company consents in writing to such activity or
transaction, in its sole discretion. In the event that the above restrictions
apply to any Month, such restrictions will continue thereafter unless and until
the Deemed Total Sales Volume averages at least the Minimum Sales Volume over
the last ***** Months, at which time the obligations of BP under this Section
34.1(b) will cease until triggered again; provided, however, that solely for
purposes of this Section 34.1(b), the Deemed Total Sales Volume for any such
Month shall be increased by the aggregate number of pounds of Acetic Acid that
were nominated for delivery by BP for such Month but were not delivered by the
Company to BP in such Month due to a scheduled or unscheduled shutdown of the
Unit, a breach of this Agreement by the Company, an event of force majeure or an
outage of or production problem at the Texas City VAM Facility.
          (c) Notwithstanding anything to the contrary contained in this
Agreement (except the remainder of this Section 34.1(c)), in the event that
Deemed Total Sales Volume averages less than the Minimum Sales Volume over the
last ***** Months (unless such failure is caused by the failure of the Company
to produce and deliver such Acetic Acid, including without limitation failures
resulting from any scheduled or unscheduled shutdowns of the Unit (other than
shutdowns caused solely by BP not nominating Acetic Acid in quantities
sufficient to operate the Unit), an event of force majeure or an outage of or
production problem at the Texas City VAM Facility), then, in the next Month, in
addition to the restrictions in Section 34.1(b) above, the Company may use all
or any portion of the Unit Capacity available after producing all amounts of
Acetic Acid nominated and accepted for delivery by BP in such Month to produce
and sell acetic acid by itself and the Company may enter into contracts for the
sale of acetic acid with a length of not more than 12-months (each such contract
with a length of more than one month, a “Company Sales Contract”); provided,
however, that (i) the Company may not sell acetic acid pursuant to this
Section 34.1(c) to any

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customer that is purchasing ***** of its acetic acid requirements from BP if BP
is fulfilling, and has over the last ***** Months fulfilled, substantially all
of its obligations to such customer with Acetic Acid produced in the Unit or
acetic acid which otherwise is taken into account in the definition of Profit
hereunder, and (ii) the Company shall not sell, transfer or supply acetic acid
to itself or any of its Affiliates (other than pursuant to Supplied Acetic Acid
arrangements existing prior to such right arising) unless the price of acetic
acid for such sale, transfer or supply to the Company or such Affiliate (in
either case, as the purchaser) is greater than or equal to the price that would
result pursuant to Exhibit F attached hereto and such sale, transfer or supply
is otherwise on terms and conditions typical for the acetic acid industry in
North America. The Company shall give prompt written notice to BP if the Company
decides to produce and sell acetic acid by itself pursuant to this
Section 34.1(c). During any period when the Company is producing acetic acid for
sale by itself pursuant to this Section 34.1(c), (i) BP shall provide any
Catalyst and Methanol required to produce such acetic acid at a price determined
by using the same pricing mechanisms as are then being used under this Agreement
for the provision of Catalyst or Methanol, as applicable, used to produce Acetic
Acid for BP pursuant to this Agreement, (ii) BP shall reimburse the Company for
all all Fixed Costs, Variable Costs and other costs and expenses associated with
producing the acetic acid sold by the Company pursuant to this Section 34.1(c)
to the same extent as if the Company had supplied such acetic acid to BP,
(iii) the gross sales revenue from any such sales shall be deducted by the
Company from the invoices submitted to BP pursuant to Section 6.3, (iv) the
gross sales revenues from any such sales shall be included in Profit for the
relevant Calendar Year, (v) BP shall allow the Company to use the Oiltanking
Pipeline if it is still in operation; provided, however, that the Company pays
BP a reasonable throughput fee for all Acetic Acid or Unit Product delivered
through the Oiltanking Pipeline, and (vi) the Company shall not in any Month be
required to deliver to BP a quantity of Acetic Acid that would exceed 1/12th of
the Unit Capacity minus the aggregate number of pounds of acetic acid that
Company is committed to sell in such Month under the Company Sales Contracts, it
being the express intent of the parties that, on a net basis, the financial and
other economic consequences resulting from any such production and sales by the
Company will be identical to those that would have resulted if such Acetic Acid
has been produced by the Company and sold by BP. In the event that the Company
is permitted to use all or any portion of the Unit Capacity to produce and sell
Acetic Acid by itself in any Month, such permission will continue thereafter
unless and until the Deemed Total Sales Volume averages at least the Minimum
Sales Volume over the last ***** Months, at which time the rights of the Company
under this Section 34.1(c) will cease until triggered again, and BP shall assume
the obligations of the Company to deliver acetic acid under the Company Sales
Contracts; provided, however, that solely for purposes of this Section 34.1(c),
the Deemed Total Sales Volume for any such Month shall be increased by the
aggregate number of pounds of Acetic Acid that were nominated for delivery by BP
for such Month but were not delivered by the Company to BP in such Month due to
a scheduled or unscheduled shutdown of the Unit, a breach of this Agreement by
the Company, an event of force majeure or an outage of or production problem at
the Texas City VAM Facility.
          (d) *****
          (e) *****
          34.2 Taxes. (a) Upon receipt of invoice therefor, BP shall remit to
the Company all Company Taxes.

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          (b) The parties recognize that, during the Term, major changes may
occur in the system of federal, state and local taxation at the location of the
Unit, which may materially alter the existing federal, state and local property,
energy, franchise, income and sales tax systems presently in effect. In the
event of such alteration, the parties agree to equitably adjust all formulas in
this Agreement to reflect such changes.
          (c) BP, at its sole cost and expense, shall be responsible for and pay
any state or local property tax attributable to the Acetic Acid and Unit Product
produced hereunder and to the Methanol provided by BP hereunder, which taxes
shall not be considered in determining Profit.
          34.3 Notices. Except as otherwise provided herein, and except for
routine communications relating to the production and sale of Acetic Acid or
Unit Product, any and all notices, requests or other communications hereunder
shall be given in writing and delivered by (a) regular, overnight or registered
or certified mail (return receipt requested), with first class postage prepaid,
(b) hand delivery, (c) facsimile or electronic transmission or (d) overnight
courier service, to the parties at the following addresses or numbers:

             
 
  (i)   Company:   Sterling Chemicals, Inc.
 
          333 Clay Street, Suite 3600
 
          Houston, Texas 77002
 
          Attention: Director of Corporate Alliances
 
                    With a copy to:
 
           
 
          Sterling Chemicals, Inc.
 
          333 Clay Street, Suite 3600
 
          Houston, Texas 77002
 
          Attention: General Counsel
 
           
 
  (ii)   BP:   BP Amoco Chemical Company
 
          150 West Warrenville Road
 
          Naperville, Illinois 60563
 
          Attention: General Manager, Acetyls
 
                    With a copy to:
 
           
 
          BP Amoco Chemical Company
 
          150 West Warrenville Road
 
          Naperville, Illinois 60563
 
          Attention: Business Manager, Acetyls
 
           
 
      and    

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          BP Amoco Chemical Company
 
          4101 Winfield Road
 
          Warrenville, Illinois 60555
 
          Attention: Attorney, Acetyls

or at such other address or number as shall be designated by either party in a
notice to the other party given in accordance with this Section. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given, (A) in the case of a notice sent by regular mail, on the
date actually received by the addressee, (B) in the case of a notice sent by
registered or certified mail, on the date receipted for (or refused) on the
return receipt, (C) in the case of a notice delivered by hand, when personally
delivered, (D) in the case of a notice sent by facsimile or electronic
transmission, upon transmission subject to telephonic or electronic confirmation
of receipt, and (E) in the case of a notice sent by overnight mail or overnight
courier service, the date delivered at the designated address, in each case
given or addressed as aforesaid.
          34.4 Controlling Law. This Agreement And The Rights And Obligations Of
The Parties Hereunder Shall Be Governed By And Construed In Accordance With The
Laws Of The State Of Texas, Without Giving Effect To The Conflict Of Law
Principles Thereof.
          34.5 Heading. The headings and titles to the Articles and Sections of
this Agreement are inserted for convenience only and shall not be deemed a part
hereof or affect the construction or interpretation of any provision hereof.
          34.6 Modifications and Waivers. No amendment, modification,
restatement or supplement of this Agreement shall be valid unless the same is in
writing and signed by the parties. No amendment or modification of this
Agreement shall be effected by the sending, acknowledgment or acceptance of any
purchase order, acknowledgment or other form containing terms or conditions at
variance with or in addition to those set forth in this Agreement. No waiver of
any provision of this Agreement shall be valid unless in a writing that
specifically states that it is a waiver under this Agreement that is signed by
the party against whom that waiver is sought to be enforced. No failure or delay
on the part of either party in exercising any right, power or privilege
hereunder, and no course of dealing between the parties, shall operate as a
waiver of any right, power or privilege hereunder. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder. No notice to or demand on either party in any case shall entitle such
party to any other or further notice or demand in similar or other circumstances
(unless otherwise required hereunder) or constitute a waiver of the rights of
either party to any other or further action in any circumstances without notice
or demand.
          34.7 Entire Agreement; Integration. It is the intent of the parties
that this Agreement, together with the Acetic Acid Technology Agreement and the
Mutual Release and Settlement Agreement dated August 20, 2008 (the “Settlement
Agreement”), constitute one integrated agreement, which together shall contain
the entire agreement between or among the parties hereto and BPCL, and set forth
all of the promises, agreements, conditions, understandings, warranties and
representations between or among the parties and BPCL with respect to the
matters contemplated

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hereby and thereby, and supersede all prior proposals, understandings,
representations, warranties, agreements and arrangements between or among the
parties and BPCL concerning the subject matter hereof or thereof, whether
written, oral or otherwise, express or implied, except as expressly stated
herein or therein. No representation or warranty or agreement, oral or
otherwise, between or among the parties and BPCL not embodied in this Agreement
or in the Acetic Acid Technology Agreement or the Settlement Agreement shall be
of any force or effect. Either BP or the Company, to the extent that such party
is not then in default under this Agreement, may set off against any amount it
owes to the other under the terms of this Agreement, any amount then due and
owing to it from the other under the terms of the Acetic Acid Technology
Agreement or the Settlement Agreement, it being the intent of the parties that
all amounts due and owing as between such parties under this Agreement, the
Acetic Acid Technology Agreement and the Settlement Agreement be netted, and
treated as a single net balance owing from one party to the other. The parties
hereby acknowledge that they have relied on the terms and provisions of this
Section 34.7 in deciding to enter into this Agreement, the Acetic Acid
Technology Agreement and the Settlement Agreement and the parties further
acknowledge that each of such agreements is critical to the arrangement whereby
BP agrees to receive and pay for, and the Company agrees to produce and deliver
to BP, Acetic Acid in such amounts as requested by BP in the manner provided in
this Agreement.
          34.8 Severability. Any provisions hereof prohibited by or unlawful or
unenforceable under any applicable law of any jurisdiction shall be ineffective
as to such jurisdiction, without affecting any other provision of this
Agreement, or shall be deemed to be severed or modified to conform with such
law, and the remaining provisions of this Agreement shall remain in force,
provided that the purpose of this Agreement can be effected. To the full extent,
however, that the provisions of such applicable law may be waived, they are
hereby waived, to the end that this Agreement is deemed to be a valid and
binding agreement enforceable in accordance with its terms.
          34.9 Counterparts; Electronic Signatures. This Agreement may be
executed in multiple counterparts, each of which shall be deemed to be an
original, and all of such counterparts together shall constitute but one and the
same instrument. A signature of a party transmitted to the other party by such
party by facsimile, PDF or other agreed upon electronic means shall constitute
the original signature of such party for all purposes.
          34.10 Binding on Successors. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
          34.11 Public Statements. The parties hereto agree to consult with one
another prior to issuing any public announcement or statement with respect to
the transactions contemplated herein unless the party issuing such statement
believes in good faith that it is required to make such statement under
applicable law.
          34.12 No Partnership or Agency. This Agreement shall not be construed
to create a partnership, joint venture, association or other entity or business
organization or to create a principal-agent relationship between the Company and
BP.
          34.13 Wire Transfer, Etc. All sums and amounts payable or to be
payable pursuant to this Agreement shall be payable in immediately available
funds and in coin or currency of the United

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States of America that, at the time of payment, is legal tender for the payment
of public and private debts in the United States of America and shall be made by
wire transfer of immediately available funds to such bank and/or account in the
continental United States for the account of the payee as from time to time the
payee shall have directed to the payor in writing, or, if no such direction
shall have been given, by check to the payee in the manner and at the address
set forth above. Whenever in this Agreement BP is required to pay or reimburse
the Company upon receipt of an invoice or otherwise when no due date for payment
is specifically provided, payment shall be due ten Business Days after receipt
of an invoice or other statement, and shall be made in the manner set forth
above.
          34.14 Oiltanking Pipeline. As of the date of signature of this
Agreement, the parties are planning the construction of the Oiltanking Pipeline.
BP has decided to construct or cause to be constructed the Oiltanking Pipeline,
and the Company has elected to participate in the Oiltanking Pipeline
construction project. BP shall construct (or engage others to construct) the
Oiltanking Pipeline. The Company shall reimburse BP for ***** of the costs and
expenses incurred by BP in connection with the construction of the Oiltanking
Pipeline on a Monthly basis at the same times and on the same terms and
conditions as those provided for payments by BP to the Company pursuant to
Section 6.3 (which may be netted), unless otherwise agreed. BP shall hold title
to the Oiltanking Pipeline and be responsible for operating and maintaining, or
causing the operation and maintenance of, the Oiltanking Pipeline, unless
otherwise agreed. The Company shall have the same types of rights and remedies
at and after the expiration or termination of this Agreement with respect to the
undepreciated portion of any capital paid by the Company (either directly or
indirectly through reimbursements paid to BP) in connection with the
construction of the Oiltanking Pipeline as are provided to BP in this Agreement
with respect to the After Acquired Assets. BP shall have the same types of
rights and remedies at and after the expiration or termination of this Agreement
with respect to fixed costs associated with the Oiltanking Pipeline that could
not be eliminated as are provided to the Company in Section 2.3(b) of this
Agreement with respect to fixed costs associated with the Unit that could not be
eliminated.
          34.15 Changes in Percentages. In the event that the percentage share
of Profit constituting the Company Profit Share is at any time hereafter changed
by mutual agreement of the parties in writing, (a) the figure “*****” shall, in
each instance where it appears herein, be automatically amended without any
further action of the parties to the same percentage as the percentage share of
Profit thereafter constituting the Company Profit Share and (b) the figure
“*****” shall, in each instance where it appears herein, be automatically
amended without any further action of the parties to the same percentage as the
percentage share of Profit thereafter constituting the BP Profit Share.
          34.16 No Known Disputes. Other than those disputes that are described
in and settled pursuant to the Settlement Agreement, as of the date of this
Agreement, the Company and BP agree, acknowledge and confirm that there are no
known disputes pending between them arising out of or relating to this Agreement
which are unresolved.

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          In Witness Whereof, the parties have executed this Agreement on the
date first above written, but effective as of the Effective Date.

                      BP Amoco Chemical Company       Sterling Chemicals, Inc.  
 
 
                   
By:
/s/ Paul Watson       By: /s/ John V. Genova    
 
 
     
 
 
Printed Name:  
Paul Watson 
      Printed Name:  
John V. Genova 
 

Title:
General Manager, Acetyls Americas
      Title:
President and Chief Executive Officer 
   
 
 
       
 
   

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Exhibit A
Company Fixed Costs
*****
A forecast of the Company Fixed Costs for the 2008 Contract Year is attached
hereto as Schedule 1. Such forecast is being provided for planning purposes only
and shall not reduce, eliminate or otherwise affect in any way BP’s obligation
to reimburse the Company for 100% of actual Company Fixed Costs during the 2008
Contract Year.

A-i

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Schedule 1
2008 Company Fixed Costs Forecast
*****

A-ii

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Exhibit B
Methanol Specifications
*****

B-i

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Exhibit C
Acetic Acid Specifications
*****

C-i

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Exhibit D
Legal Description of the Land of the Unit
(Attached)

D-i

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Exhibit E
Variable Costs
*****

E-i

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Exhibit F
Acetic Acid Transfer Price Formula

    *****

F-i