Exhibit 10.1

 

Execution Copy

 

SERVICES AGREEMENT

 

THIS SERVICES AGREEMENT (this “Agreement”), is entered into as of this 1st day
of January, 2005, by and between CONSTAR, INC., a Pennsylvania corporation
(“Constar”) and CROWN CORK & SEAL COMPANY, INC., a Pennsylvania corporation and
its affiliates (“Crown”).

 

RECITALS

 

A. Pursuant to a Services Agreement entered into between Crown and Constar
commencing on January 1, 2004 and terminating December 31, 2004 (the “2004
Services Agreement”) Crown and its subsidiaries currently provide certain
services to Constar and the other Constar Entities (as defined below).

 

B. Crown and Constar both desire for Crown to provide certain services to
Constar and the other Constar Entities after the expiration of the 2004 Services
Agreement.

 

C. Crown and Constar desire to enter into this Agreement to set forth the roles
and responsibilities with regard to services to be provided by Crown to Constar
and the other Constar Entities following the termination of the 2004
ServicesAgreement.

 

AGREEMENTS

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Crown and Constar, for themselves and their
successors and assigns, and intending to be legally bound hereby, hereby agree
as follows:

 

ARTICLE I

GENERAL

 

1.1 Definitions. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Corporate Agreement, dated November 20, 2002,
between Crown and Constar.

 

1.2 Representations.

 

Each of Crown and Constar represents and warrants to the other that:

 

(a) it has the requisite corporate authority to enter into and perform this
Agreement;

 

(b) its execution, delivery, and performance of this Agreement has been duly
authorized by all requisite corporate action on its behalf; and

 

(c) this Agreement is enforceable against it.

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ARTICLE II

SERVICES

 

2.1. Services.

 

(a) During the term of this Agreement, subject to the terms and conditions of
this Agreement, Crown agrees to provide or cause the other Crown Entities to
provide to Constar and the other Constar Entities, as applicable, the services
described in Exhibit A hereto (the “Services”). Exhibit A is hereby incorporated
by reference herein and forms part of this Agreement.

 

(b) Except as provided herein, the level, quality and timeliness of the Services
shall be provided in a manner substantially equivalent to that performed by
Crown or the applicable Crown Entity for the Constar Entities prior to the date
of execution of this Agreement.

 

(c) Crown and Constar have made a good faith effort as of the date hereof to
identify each Service and to complete the content of Exhibit A accurately. To
the extent that Exhibit A is incomplete, Crown and Constar will use good faith
efforts to modify Exhibit A. There are certain terms that are specifically
addressed in Exhibit A that may differ from the terms provided herein. In those
cases, the specific terms described in Exhibit A shall govern those Services.
Crown may reasonably supplement, modify, substitute or otherwise alter the
Services from time to time in a manner consistent with supplements,
modifications, substitutions or alterations made with respect to similar
services provided or otherwise made available by Crown to its other business
units; provided, that such supplements, modifications, substitutions or
alterations do not prevent Constar from realizing substantially the same
intended benefits of such Services. Crown shall not be obligated under this
Agreement to provide software or any licensed property rights to Constar if
prohibited or available only at additional cost under licensing agreements.
Notwithstanding anything to the contrary herein, Crown may outsource any or all
of the Services during the Term. In the event Crown outsources Services, in lieu
of amounts otherwise due hereunder for such Services, Constar shall pay to Crown
the actual cost of such Services. If the cost of such outsourced Services is
higher than the cost of such Services when provided by Crown without
outsourcing, then, prior to outsourcing, Crown shall provide Constar one-hundred
and twenty (120) days notice. Prior to the expiration of the one-hundred and
twenty (120) days notice period, Constar may elect not to accept such higher
cost outsourced Services in which event Constar will pay the rates set forth in
Exhibit A for the balance of the 120-day period and at the end of such period
Crown shall have no obligation to provide such Services to Constar.

 

(d) Notwithstanding the other provisions of this Section 2.1, neither of Crown
nor any of the other Crown Entities makes any representation or warranty
whatsoever, express or implied, including, without limitation, any
representation or warranty as to the merchantability or fitness for a particular
purpose arising out of the Services described in Exhibit A. In furtherance of
the foregoing, none of the Crown Entities shall have any liability for any
defects in the Services provided hereunder.

 

2.2. Fees; Payment. (a) In consideration for the performance of each of the
Services, Constar shall pay to Crown the amount for each of the Services set
forth on Exhibit A as amended from time to time in accordance with this
Agreement. Any federal, state, local or foreign income taxes, charges, fees,
imposts, levies, contributions

 

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or other assessments assessed on the provision of each of the Services shall be
paid by Constar (all such charges, plus the amounts described in the preceding
sentence, the “Fee”).

 

(b) Within ten (10) days of the end of each month during the term of this
Agreement, Crown shall invoice Constar for all Services performed by the Crown
Entities during such month in accordance with the terms of this Agreement,
unless otherwise provided on Exhibit A. Constar shall pay the Fee for the
Services delivered during the prior month pursuant to this Agreement within
thirty (30) days after the invoice for such Services has been provided by Crown
in accordance with this Section 2.2(b).

 

(c) The Fees are only applicable to the Services provided until December 31,
2005.

 

2.3. Additional Services. Crown and Constar may from time to time identify
additional Services that they wish to incorporate into this Agreement. In such
event, Crown and Constar will add items to Exhibit A setting forth mutually
agreeable descriptions of such additional Services, Fees for such Services and
any other applicable terms with respect to such Services. If Crown and Constar
cannot mutually agree upon such additional items, such additional Services will
not become part of Exhibit A of this Agreement and Crown will have no obligation
to provide such additional Services.

 

2.4. Independent Contractor. Neither party is now, nor shall it be made by this
Agreement, an agent or legal representative of the other party for any purpose,
and neither party has any right or authority to create any obligation, express
or implied, on behalf of the other party, to accept any service of process upon
it, or to receive any notices of any kind on its behalf. All activities by any
of the Crown Entities hereunder shall be carried on by such Crown Entity as an
independent contractor and not as an agent for Constar or any other Constar
Entity.

 

2.5. Representatives. Crown and Constar will each appoint a representative
(each, a “Representative”) to facilitate communications and performance under
this Agreement. Each party may treat an act of a Representative of the other
party as being authorized by such other party. The initial Representatives are
Torsten J. Kreider with respect to Crown and David Waksman with respect to
Constar. Each party may replace its Representative at any time for any reason by
giving prior written notice of the replacement to the other party.

 

ARTICLE III

COOPERATION

 

3.1. Cooperation. The parties will use good faith efforts to cooperate with each
other in all matters relating to the provision and receipt of Services. Such
good faith cooperation will include using commercially reasonable efforts to
obtain all consents, licenses, sublicenses or approvals necessary to permit each
party to perform its obligations under this Agreement. If this Agreement is
terminated in whole or in part, the parties will cooperate with each other in
all reasonable respects in order to effect an efficient transition and to
minimize the disruption to the business of both parties, including the
assignment or transfer of the rights and obligations under any contracts.

 

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ARTICLE IV

TERM AND TERMINATION

 

4.1. Term. The term of this Agreement shall commence January 1, 2005 and shall
continue in effect until December 31, 2005, unless this Agreement terminated
pursuant to Section 4.3. Upon the expiration or termination of this Agreement
pursuant to this Section 4.1, the rights and obligations of the parties
hereunder shall terminate, except for the rights and obligations of the parties
under Section 4.1, Articles V and VI, and Sections 7.8 and 7.9 hereof, which
shall survive such expiration or termination without limitation. Upon such
expiration or termination, Crown shall cease to have any obligation to provide
any Services, and each party will promptly deliver to the other all data,
programs, software materials, and other properties owned by the other and held
by it in connection with the performance of this Agreement. Each party will
assist the other at such other party’s reasonable request in effecting the
orderly termination of this Agreement.

 

4.2. Non-Exclusivity. Nothing in this Agreement shall preclude the Constar
Entities from obtaining the Services, in whole or in part, from their own
employees or from providers other than the Crown Entities at any time. On 120
days advance notice to Crown, Constar may terminate this Agreement as to any
Service or portion of such Service. Following any such termination, Crown will
be under no obligation to provide any such terminated Service, and Constar will
no longer be liable for the associated Fees set forth in Exhibit A with respect
to such terminated Service.

 

4.3. Events of Default.

 

(a) The following shall be considered events of default and shall give rise to a
right of Crown to terminate this Agreement within 45 days of Crown’s discovery
of such event of default: (i) Constar fails to make timely payments for invoiced
Services, subject to a 30-day cure period after notice of such breach or (ii)
Constar materially breaches any other applicable provision of this Agreement,
subject to a 30-day cure period after notice regarding such breach. If Constar
or Constar, Inc. suffers a Bankruptcy Event, Crown shall have the right to
unilaterally make reasonable modifications to the payment terms set forth in
Section 2.2(b) of the Agreement at any time after such Bankruptcy Event. Crown
shall promptly notify Constar of any such modifications to the payment terms of
this Agreement. If Constar or Crown experiences a change of Control such that
Constar or Crown is controlled by a competitor of either Constar or Crown, Crown
shall have the right, at its option, to renegotiate the Fees set forth in
Exhibit A. If Crown elects to renegotiate such Fees after such change of
Control, Crown and Constar shall negotiate such Fees in good faith. If Fees are
not mutually agreed upon within 45 days (the “Negotiation Period”) of such
change of Control, the change of Control shall be considered an event of default
and Crown shall have the right to terminate this Agreement within 45 days of the
expiration of the Negotiation Period (provided that such termination shall not
be effective until three months from the date that Constar receives notice of
such termination).

 

(b) The following shall be considered events of default and shall give rise to a
right of Constar to terminate this Agreement within 45 days of Constar’s
discovery of such event of default: (i) Crown materially breaches any applicable
provision of this Agreement, subject to a 30-day cure period after notice
regarding such breach or (ii) Constar or Crown experiences a change of Control
such that Constar or Crown is controlled by a competitor of either Constar or
Crown (provided that such termination shall not be effective until six months
from the date of the change of Control).

 

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(c) Each party shall provide the other party with prompt notice upon discovery
of a default by the other party; provided, that failure to give such notice
shall not limit or restrict the ability of a party to terminate this Agreement
subject to the cure periods provided in this Section 4.3.

 

(d) For purposes of this Section 4.3, “Bankruptcy Event” means with respect to
either Constar or Constar, Inc., as applicable, (i) the making by such party of
any assignment for the benefit of creditors of all or substantially all of its
assets or the admission by such party in writing of its inability to pay all or
substantially all of its debts as they become due; (ii) the adjudication of such
party as bankrupt or insolvent or the filing by such party of a petition or
application to any tribunal for the appointment of a trustee or receiver for
such party or any substantial part of the assets of such party; or (iii) the
commencement of any voluntary or involuntary bankruptcy proceedings (and, with
respect to involuntary bankruptcy proceedings, the failure to be discharged
within 60 days), reorganization proceedings or similar proceeding with respect
to such party or the entry of an order appointing a trustee or receiver or
approving a petition in any such proceeding.

 

ARTICLE V

NONDISCLOSURE/CONFIDENTIALITY

 

5.1. Confidentiality. The parties agree (a) to maintain all information, whether
in written, oral, electronic or other form, necessary for the provision or
receipt of the Services or utilized or received in the course of or in relation
to the provision or receipt of the Services, as the case may be, including,
without limitation, know-how, material, manufacturing, tooling and equipment
specifications and other information necessary or connected to the provision or
receipt of Services, as the case may be (the “Confidential Information”), as
secret and confidential, (b) that all such Confidential Information shall be
used only for purposes of the provision or receipt of Services hereunder and for
no other purpose whatsoever, and (c) not to disclose the Confidential
Information to any third person or party (except for employees, counsel,
consultants or assignees who have a need to know and are informed of the
confidential nature of such information by the disclosing party). Each party
shall accept responsibility and be liable for any disclosure by any third person
of any Confidential Information disclosed to such third person by such party.
The parties will use the same measures to maintain the confidentiality of the
Confidential Information of any other party in its possession or control that it
uses to maintain the confidentiality of its own Confidential Information of
similar type and importance. Notwithstanding the foregoing, either party or
their Affiliates may describe this Agreement in, and include this Agreement
with, filings with the U.S. Securities and Exchange Commission and any related
prospectuses, including such filings or prospectuses in connection with any
offering of securities. Confidential Information will not include information
that (i) is in or enters the public domain without breach of this Agreement, or
(ii) the receiving party lawfully receives from a third party without
restriction on disclosure and, to the receiving party’s knowledge, without
breach of a nondisclosure obligation.

 

5.2. Disclosure to Governmental Agency. Notwithstanding the foregoing, each
party shall be permitted to disclose the Confidential Information and/or any
portion thereof (i) to a

 

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governmental agency or authority as required in response to a subpoena therefor,
(ii) in connection with formal requests for discovery under applicable rules of
civil procedure in a legal action before a court of competent jurisdiction to
which such party is a party, and (iii) as otherwise required by law; provided,
however, that, in any such case, each party shall notify the other party as
early as reasonably practicable prior to disclosure to allow such party to take
appropriate measures to preserve the confidentiality of such information at the
expense of such party.

 

5.3. Ownership of Information. All Confidential Information supplied or
developed by either party will be and remain the sole and exclusive property of
the party who supplied or developed it.

 

5.4. Return of Confidential Information. Upon the written request of a party
which has disclosed information covered by this Article V in written, printed or
other tangible form, all such readily available information and all copies
thereof, including samples or materials, and all notes or other materials
derived from such information shall be returned to the party which disclosed
such information.

 

5.5. Right of Setoff. Constar and Crown shall waive all rights of setoff and
recoupment either may have against the other or any of the other’s Affiliates
with respect to all amounts which may be owed from time to time pursuant to this
Agreement.

 

ARTICLE VI

INDEMNIFICATION/LIMITATION OF LIABILITY

 

6.1. Limitation of Liability. Neither Crown nor any of the Crown Entities nor
any of their respective directors, officers, employees, successors or permitted
assigns shall be liable to anyone for any action taken or omitted to be taken by
any of them hereunder except in the case of gross negligence, bad faith or
willful misconduct.

 

6.2. Indemnification.

 

(a) Subject to Section 6.3, Crown shall defend, indemnify and hold each Constar
Indemnitee harmless against any and all Liabilities incurred or suffered by any
Constar Indemnitee caused by or arising in connection with the gross negligence,
bad faith or willful misconduct of Crown or any employee of any Constar Entity
in connection with the performance of the Services, except to the extent that
Liabilities were caused directly or indirectly by acts or omissions of any
Constar Indemnitee.

 

(b) Subject to Section 6.3, Constar shall defend, indemnify and hold each Crown
Indemnitee harmless against any and all Liabilities incurred or suffered by any
Crown Indemnitee caused by or arising in connection with the gross negligence,
bad faith or willful misconduct of any Constar Entity or any employee of any
Crown Entity in connection with Constar’s performance under this Agreement,
except to the extent that Liabilities were caused directly or indirectly by acts
or omissions of any Crown Indemnitee.

 

6.3. Limitations.

 

(a) Any indemnification pursuant to Section 6.2(a) or Section 6.2(b) shall be

 

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paid net of any tax benefit to the Indemnified Party attributable to the
relevant payment. It is expressly agreed that no insurer or any other third
party shall be (a) entitled to a benefit (as a third-party beneficiary or
otherwise) that it would not be entitled to receive in the absence of Section
6.2(a) or Section 6.2(b), (b) relieved of the responsibility to pay any claims
to which it is obligated or (c) entitled to any subrogation rights with respect
to any obligation under Section 6.2(a) or Section 6.2(b).

 

(b) Notwithstanding Section 6.2(a) and Section 6.2(b), neither party shall be
liable for any special, indirect, incidental or consequential damages relating
to claims of the other party or any third party.

 

6.4. Notice and Payment of Claims. If any Crown Indemnitee or Constar Indemnitee
(the “Indemnified Party”) determines that it is or may be entitled to
indemnification by any party (the “Indemnifying Party”) under Article VI of this
Agreement (other than in connection with any Action subject to Section 6.5), the
Indemnified Party shall deliver to the Indemnifying Party a written notice
specifying, to the extent reasonably practicable, the basis for its claim for
indemnification and the amount for which the Indemnified Party reasonably
believes it is entitled to be indemnified. Within 30 days after receipt of that
notice, the Indemnifying Party shall pay the Indemnified Party that amount in
cash or other immediately available funds unless the Indemnifying Party objects
to the claim for indemnification or the amount of the claim. If the Indemnifying
Party does not give the Indemnified Party written notice objecting to that
indemnity claim and setting forth the grounds for the objection(s) within that
30-day period, the Indemnifying Party shall be deemed to have acknowledged its
liability for that claim and the Indemnified Party may exercise any and all of
its rights under applicable law to collect that amount. If there is a timely
objection by the Indemnifying Party, the Indemnifying Party shall pay to the
Indemnified Party in cash the amount, if any, that is Finally Determined to be
required to be paid by the Indemnifying Party in respect of that indemnity claim
within 15 days after that indemnity claim has been so Finally Determined.

 

6.5. Notice and Defense of Third-Party Claims. Promptly after the earlier of
receipt of (a) notice that a third party has commenced an action against or
otherwise involving any Indemnified Party or (b) information from a third party
alleging the existence of a claim against an Indemnified Party, in either case,
with respect to which indemnification may be sought under Article VI of this
Agreement (a “Third-Party Claim”), the Indemnified Party shall give the
Indemnifying Party written notice of the Third-Party Claim. The failure of the
Indemnified Party to give notice as provided in this Section 6.5 shall not
relieve the Indemnifying Party of its obligations under this Agreement, except
to the extent that the Indemnifying Party is prejudiced by the failure to give
notice. Within 30 days after receipt of that notice, the Indemnifying Party may
(i) at its option, elect to assume and control the defense of that Third-Party
Claim at its sole cost and expense by giving written notice to that effect to
the Indemnified Party, or (ii) object to the claim for indemnification set forth
in the notice delivered by the Indemnified Party pursuant to the first sentence
of this Section 6.5; provided, that if the Indemnifying Party does not within
that 30-day period give the Indemnified Party written notice objecting to that
indemnification claim and setting forth the grounds for the objection(s), the
Indemnifying Party shall be deemed to have acknowledged its liability for that
indemnification claim. If the Indemnifying Party has acknowledged its obligation
to indemnify the Indemnified Party and elected to assume the defense of a
Third-Party Claim, (x) the defense shall be conducted by counsel retained by the
Indemnifying Party and reasonably satisfactory to the Indemnified Party;
provided, that the

 

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Indemnified Party shall have the right to participate in those proceedings and
to be represented by counsel of its own choosing at the Indemnified Party’s sole
cost and expense; and (y) the Indemnifying Party may settle or compromise the
Third-Party Claim without the prior written consent of the Indemnified Party so
long as any settlement or compromise of the Third-Party Claim includes an
unconditional release of the Indemnified Party from all claims that are the
subject of that Third-Party Claim; provided, that the Indemnifying Party may not
agree to any such settlement or compromise pursuant to which any remedy or
relief, other than monetary damages for which the Indemnifying Party shall be
responsible under this Agreement, shall be applied to or against the Indemnified
Party, without the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld. If the Indemnifying Party does not assume
the defense of a Third-Party Claim for which it has acknowledged its obligation
to indemnify the Indemnified Party, the Indemnified Party will act in good faith
with respect to that Third-Party Claim and may require the Indemnifying Party to
reimburse it on a current basis for its reasonable expenses of investigation,
reasonable attorney’s fees and reasonable out-of-pocket expenses incurred in
investigating and defending against that Third-Party Claim and the Indemnifying
Party shall be bound by the result obtained with respect to that claim by the
Indemnified Party; provided, that the Indemnifying Party shall not be liable for
any settlement or compromise of any Third-Party Claim effected without its
consent, which consent shall not be unreasonably withheld. The Indemnifying
Party shall pay to the Indemnified Party in cash the amount, if any, for which
the Indemnified Party is entitled to be indemnified under this Agreement within
15 days after that Third-Party Claim has been Finally Determined.

 

6.6. Contribution. If for any reason the indemnification provided for in Section
6.2 is unavailable to any Indemnified Party, or insufficient to hold it
harmless, then the Indemnifying Party shall contribute to the amount paid or
payable by that Indemnified Party as a result of those Liabilities in that
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party, on the one hand, and the Indemnified Party, on the other hand, in
connection with those statements or omissions, which relative fault shall be
determined by reference to the Crown Entity or Constar Entity to which those
actions, conduct, statements or omissions are primarily related, as well as any
other relevant equitable considerations.

 

ARTICLE VII

MISCELLANEOUS

 

7.1. Force Majeure. Neither Supplier nor Purchaser shall be responsible for any
failure or delay in performance due to causes beyond their respective control,
including, without limitation, earthquake, fire, storm, flood, freeze, labor
disputes, transportation embargoes, acts of God or of any government and acts of
war or terrorism (any of the foregoing, a “Force Majeure Event”). In the event
such a curtailment by Crown continues in whole or in part for 48 hours, then
Constar may arrange for temporary provision of the Services and may withhold a
pro rata portion of the Fee applicable to any such unprovided Service until
Crown can resume provision of the Services to Constar. Notwithstanding anything
to the contrary in this Agreement, this provision shall not apply to or
otherwise excuse the failure to pay any uncontested costs or fees due under this
Agreement when due.

 

7.2. Subsidiaries. Crown agrees and acknowledges that Crown shall be responsible
for the performance by each Crown Entity of the obligations hereunder applicable
to such Crown Entity. Constar agrees and acknowledges that Constar shall be
responsible for the performance by each Constar Entity of the obligations
hereunder applicable to such Constar Entity.

 

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7.3. Amendment and Modification. This Agreement may not be amended or modified
except by written instrument duly executed by the parties hereto. No course of
dealing between or among any persons having any interest in this Agreement will
be deemed effective to modify, amend or discharge any part of this Agreement or
any rights or obligations of any person under or by reason of this Agreement.

 

7.4. Severability. If any term or provision of this Agreement or the application
thereof to any person or circumstance shall, to any extent, be held invalid or
unenforceable by a court of competent jurisdiction, the remainder of this
Agreement or the application of any such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby, and each term and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law. If any of
the provisions contained in this Agreement shall for any reason be held to be
excessively broad as to duration, scope, activity or subject, it shall be
construed by limiting and reducing it, so as to be valid and enforceable to the
extent compatible with applicable law or the determination by a court of
competent jurisdiction.

 

7.5. Notices. All notices and other communications required or permitted
hereunder shall be in writing, shall be deemed duly given upon actual receipt,
and shall be delivered (a) in person, (b) by registered or certified mail,
postage prepaid, return receipt requested or (c) by facsimile or other generally
accepted means of electronic transmission (provided that a copy of any notice
delivered pursuant to this clause (c) shall also be sent pursuant to clause (b),
addressed as follows:

 

If to Crown, to:

 

Crown Cork & Seal Company, Inc.

One Crown Way

Philadelphia, PA 19154

Attention: Timothy J. Donahue

Facsimile: (215) 676-6011

 

With a copy to:

 

Dechert LLP

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103

Attention: William G. Lawlor, Esq.

Facsimile: (215) 994-2222

 

If to Constar, to:

 

Constar International Inc.

One Crown Way

Philadelphia, PA 19154

Attention: David Waksman

Facsimile: (215) 552-3767

 

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or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.

 

7.6. Further Assurances. The parties shall execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such instruments and take such
other action as may be necessary or advisable to carry out their obligations
under this Agreement and under any exhibit, document or other instrument
delivered pursuant hereto.

 

7.7. Counterparts. This Agreement and any amendments hereto may be executed in
any number of counterparts, each of which shall be deemed an original
instrument, but all of which together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be as effective as delivery of a manually executed
counterpart of this Agreement.

 

7.8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.

 

7.9. Dispute Resolution: Negotiation and Arbitration.

 

(a) The parties shall attempt to resolve any dispute arising out of or relating
to this Agreement promptly by negotiation in good faith between executives who
have authority to settle the dispute. A party shall give the other parties
written notice of any dispute not resolved in the ordinary course of business.
Within ten Business Days after delivery of such notice, the party receiving
notice shall submit to the others a written response thereto. The notice and the
response shall include: (i) a statement of each party’s position(s) regarding
the matter(s) in dispute and a summary of arguments in support thereof, and (ii)
the name and title of the executive who will represent that party and any other
Person who will accompany that executive.

 

(b) Within 10 Business Days after delivery of the notice, the designated
executives shall meet at a mutually acceptable time and place, and thereafter,
as often as they reasonably deem necessary, to attempt to resolve the dispute.
All reasonable requests for information made by one party to any other shall be
honored in a timely fashion. All negotiations conducted pursuant to this Section
7.9 (and any of the parties’ submissions in contemplation hereof) shall be
deemed Confidential Information and shall be treated by the parties and their
representatives as compromise and settlement negotiations under the United
States Federal Rules of Evidence and any similar state rules.

 

(c) If the matter in dispute has not been resolved within 30 days after the
first meeting of the executives to attempt to resolve the dispute, either party
may submit the dispute to binding arbitration to the Philadelphia, Pennsylvania
office of the American Arbitration Association (“AAA”) in accordance with the
procedures set forth in the Commercial Arbitration Rules of the AAA.

 

(d) The Commercial Arbitration Rules of the AAA, as modified or revised by the
provisions of this Section 7.9, shall govern any arbitration proceeding
hereunder. The arbitration shall be conducted by three arbitrators selected
pursuant to Rule 13 of the

 

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Commercial Arbitration Rules, and pre-hearing discovery shall be permitted if
and only to the extent determined by the arbitrator to be necessary in order to
effectuate resolution of the matter in dispute. The arbitrator’s decision shall
be rendered within 30 days of the conclusion of any hearing hereunder and the
arbitrator’s judgment and award may be entered and enforced in any court of
competent jurisdiction.

 

(e) Resolution of disputes under the procedures of this Section 7.9 shall be the
sole and exclusive means of resolving disputes arising out of or relating to
this Agreement; provided, however, that nothing herein shall preclude the
Parties from seeking in any court of competent jurisdiction temporary or interim
injunctive relief to the extent necessary to preserve the subject matter of the
dispute pending resolution under this Section 7.9.

 

7.10. Consent to Jurisdiction. Crown and Constar hereby agree and consent to be
subject to the exclusive jurisdiction of the United States District Court for
the Eastern District of Pennsylvania, and in the absence of such Federal
jurisdiction, the parties consent to be subject to the exclusive jurisdiction of
any state court located in the City of Philadelphia and hereby waive the right
to assert the lack of personal or subject matter jurisdiction or improper venue
in connection with any such suit, action or other proceeding. In furtherance of
the foregoing, each of the parties (a) waives the defense of inconvenient forum,
(b) agrees not to commence any suit, action or other proceeding arising out of
this Agreement or any transactions contemplated hereby other than in any such
court (other than the mandatory submission to arbitration in accordance with
Section 7.9), and (c) agrees that a final judgment in any such suit, action or
other proceeding shall be conclusive and may be enforced in other jurisdictions
by suit or judgment or in any other manner provided by law.

 

7.11. Entire Agreement. This Agreement and Exhibit A hereto constitute the
entire understanding of the parties hereto with respect to the subject matter
hereof and supersede any prior agreement or understanding, written or oral,
relating to the subject matter of this Agreement.

 

7.12. Assignment. This Agreement may not be assigned by Constar without the
prior written consent of Crown. Crown may assign its rights and obligations
hereunder; provided, that, with respect to any assignment to a Person other than
any other Crown Entity, (a) Crown will provide Constar with 90 days notice of
any such assignment; (b) Constar will have the option to terminate any Service
which is the subject of any such planned assignment by Crown upon notice to
Crown no later than 30 days after Constar’s receipt of the notice described in
proviso (a) above, with such termination becoming effective 60 days after such
notice by Constar, after which time Crown will no longer be obligated to
provides such Service and Constar will no longer be liable for any associated
Fees with respect to such Service; and (c) in the event that Constar does not so
terminate any Service which is the subject of any such planned assignment by
Crown, any costs charged to Crown by any assignee with respect to any such
Service will be passed on to Constar and the Fees will be increased accordingly,
subject to audit by Constar of the actual costs charged to Crown by any such
assignee, during reasonable business hours and upon reasonable advance notice
(subject to Crown’s reasonable rules and regulations regarding Constar’s access
to any Crown facility). Notwithstanding the foregoing, Constar may, and hereby
gives notice to Crown that it intends to, pledge its rights and obligations
under this Agreement to its lenders as collateral to secure indebtedness
outstanding under its senior secured credit facility and all renewals,
refundings, refinancings and replacements thereof.

 

11

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7.13. No Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to or shall (a) confer on any person other than the parties
hereto and their respective successors or permitted assigns any rights
(including third party beneficiary rights), remedies, obligations or liabilities
under or by reason of this Agreement, or (b) constitute the parties hereto as
partners or as participants in a joint venture. This Agreement shall not provide
third parties other than Constar Entities and Crown Entities with any remedy,
claim, liability, reimbursement, cause of action or other right in excess of
those existing without reference to the terms of this Agreement.

 

7.14. Survival. In the event that Constar ceases to be a publicly traded company
or becomes a Subsidiary of a publicly traded Company (other than Crown), all of
the rights of Crown shall continue in full force and effect and shall apply to
any publicly traded company that, directly or indirectly, through one or more
intermediaries Controls Constar. Constar agrees that, without the prior written
consent of Crown, it will not enter into any agreement or arrangement which will
have the effect set forth in the first clause of the preceding sentence, unless
such publicly traded company agrees to be bound by the foregoing.

 

7.15. Section Headings; Interpretive Issues. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement. Crown and Constar
have participated jointly in the drafting and negotiation of this Agreement. In
the event any ambiguity or question of interpretation or intent arises, this
Agreement shall be construed as if drafted jointly by Crown and Constar and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.

 

7.16. Effectiveness. The terms of this Agreement shall become effective as of
January 1, 2005.

 

7.17. Pronouns. Whenever the context may require, any pronouns used herein shall
be deemed also to include the corresponding neuter, masculine or feminine forms.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
the day and year first above written.

 

CONSTAR, INC. By:  

/s/ William S. Rymer

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Name:   William S. Rymer Title:   Executive Vice President and CFO

 

12

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CROWN CORK & SEAL COMPANY, INC. By:  

/s/ Michael J. Rowley

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Name:   Michael J. Rowley Title:   Assistant Secretary

 

13

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Execution Copy

 

Exhibit A

 

I. UNITED STATES

 

A. Philadelphia, Pennsylvania

 

1. Payroll Services

 

•   Crown will provide access to KRONOS software on Crown’s Philadelphia IBM
AS400 for inputting employee time and attendance information.

 

•   Crown will process payroll information, generate payroll reports, withhold
and process the employee benefit premiums, the employees’ contributions to
flexible spending accounts and repayments of outstanding loans under the 401(k)
Retirement Savings Plan, perform AS400 enrollment for participants in benefit
plans, provide a year-end data transmission to Constar’s pension actuary (in the
same format as in 2004), process garnishments and any other required payroll
transactions and print and mail payroll checks to Constar. Government tax
reporting and unemployment claims services shall be in accordance with Federal,
state and local laws. Constar will be responsible for funding payroll and making
all tax remittances. These services and the per check rate below exclude
preparation of 2005 W-2 forms and all year-end tax filings. At Constar’s option,
Crown will prepare 2005 W-2 forms and all year-end filings for a fixed fee of
$7,000 plus cost of postage and forms. Constar must give Crown notice by October
31, 2005 to exercise this option.

 

•   Constar will use, or obtain, if necessary, its own Federal Employer
Identification Number and any other Federal, state or local identifying account
numbers necessary for any employer related reporting following the Initial
Public Offering Date which shall be used by Crown for all government required
reporting.

 

•   Constar will pay Crown $1.30 for each payroll check or voucher issued on
behalf of Constar and reimburse Crown for payroll distribution expenses such as
postage, check stock and envelopes. Constar will also reimburse Crown for any
programming revisions required to implement this Services Agreement, or which
are requested by Constar (e.g. 401(k) transmission program, stock purchase plan
program, etc.). Constar will not reimburse Crown for any programming revisions
that are not required exclusively for the benefit of Constar.

 

2. Information Technology and Systems

 

•   Crown will provide access to all existing hardware relating to Crown’s AS400
and all existing leased (subject to their terms and conditions and to the extent
legally permissible) or legacy software programs resident on Crown’s AS400 and
currently in use for financial controls, costing and sales order control, as
they existed at December 31, 2004. Such date describes only the types of
services; fees for such services are set forth below. Crown will provide access
to any expanded or successor hardware or software systems which may replace or
supplement those which then existed.

 

•   Crown will provide access to the LAN connection, e-mail, remote access,
internet and the Wide Area Network and all related software currently in use,
subject to their terms and conditions and to the extent legally permissible.

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•   Constar will pay Crown $174,323 monthly in arrears ($2,091,876 per year).
This amount covers maintenance, but not new programming costs. Constar will not
be asked to pay for programming services that are not requested by Constar.

 

•   The computer system will be available for use consistent with past practice.
Crown will notify Constar in advance of downtime for scheduled maintenance.

 

•   Constar understands that Crown may outsource some or all of these services
in the future.

 

•   Constar will pay for all requested new programming, software, hardware and
related consulting fees, plus any license fees that may result from this
agreement. The hourly rate for programming services will be $100, if performed
by Crown personnel. Outside services will be billed at cost.

 

•   Crown shall not be obligated under this Agreement to provide software or any
licensed property rights to Constar if prohibited or available only at
additional cost under licensing agreements.

 

•   Constar shall have the ability, with 120 days advance notice, to take over
the providing and management of, in their entirety (1) maintenance of A/S 400
peripherals, (2) voice and data network, (3) servers, to include their
relocation and (4) Help Desk activities. Reductions to the annual charge of
$58,000, $310,000, $25,000 and $25,000, respectively, shall apply.

 

•   Crown and Constar agree to mutually revisit the terms and conditions of this
section, to include programming, consultancy and other services, if and when
Constar adopts a strategy to provide their own services.

 

•   Constar and Crown representatives will meet periodically at Crown’s request
to discuss Constar’s plans to transition off of MIS services from Crown.

 

3. Benefits Administration

 

•   Crown will continue to provide medical, COBRA, disability, life insurance,
AD&D insurance and flexible spending account administration for the current
programs. Constar agrees to comply with Crown’s HIPAA Medical Privacy policy and
to maintain such compliance during the services period.

 

•   Constar will reimburse Crown, beginning January 1, 2005 and for the term of
this agreement, for this administration service at the estimated reimbursement
rate of 10.0% of the total Constar medical, dental, vision and prescription
claims paid during each week. There will be a true-up mechanism (plus or minus)
to reflect the difference between actual administration costs and estimated
reimbursement rates in 2004 and 2005 to be payable on January 31, 2006. Constar
will be responsible for funding all medical and prescription claims, life
insurance premiums, AD&D insurance premiums, short-term disability payments and
any applicable taxes on a weekly basis.

 

•   Constar is responsible for the cost of all of its current and future COBRA
participants, and Crown is responsible for the administration of COBRA, the cost
of such administrative services to be reimbursed as part of the estimated
reimbursement rate of 10.0% (from January 1, 2005 to December 31, 2005) and the
true-up mechanism above.

 

•   Constar will not be permitted to change any Plan benefits during the service
term.

 

•   Constar and Crown representatives will meet periodically at Crown’s request
to discuss Constar’s plans to transition off of benefits services from Crown.

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4. Other Services

 

a. Logistics

 

Crown will continue coordinating the traffic and freight activities of Constar
for the period. Constar will pay Crown for such services at a rate of $23,604
per month.

 

b. Mailroom /Postage

 

Constar will reimburse Crown for $6,700 per month for postage expenses,
including first-class and express mail. If postage rates increase, Crown can
increase this billing rate by a proportionate amount for the remainder of the
term. If the overall normalized level of postage related to Constar increases,
Crown and Constar will negotiate in good faith to increase the monthly charge
for the remainder of the term to reflect such increased level of postage. Crown
will provide such service as long as Constar is a tenant at One Crown Way.

 

c. Sarbanes-Oxley.

 

Crown will provide Constar with reasonable access, during regular business hours
and upon reasonable advance notice, to facilities, systems and personnel, as
necessary to permit Constar’s testing in support of its Sarbanes-Oxley Section
404 Report. Constar shall reimburse Crown for any costs incurred by Crown in
connection with such access and shall pay Crown $100 per hour for access to
Crown personnel. Crown shall not be obligated to provide Constar with any access
if such access would, under the circumstances, unreasonably interfere with
Crown’s operations, activities or employees.

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Execution Copy

 

Exhibit A

 

EUROPE

 

A. Sherburn, U.K.

 

1. Information Technology

 

•   The cost for JDE support will be GBP 6,800 per month until December 31,
2005.

 

•   The cost for other services will be: bar-coding (GBP 2,060 per month),
payroll support (GBP 515 per month) and cost of technical support from the EISS
central team (GBP 300 per month).

 

•   The cost of the BT Wide Area Network will be GBP 540.63 per month. Variable
charges which are directly dependent on usage by Constar will include the
following:

 

  •   GBP 11 per month per user to British Telecommunications plc for internet
access

 

  •   GBP 11 per month per user to British Telecommunications plc for remote
access service, plus an additional charge at British Telecommunications plc’s
then-current rates based on the amount of time that users are connected through
this service

 

•   Crown is currently considering outsourcing the support of the European IS
infrastructure. Crown will not make a decision to proceed before January 1,
2005. If Crown chooses not to proceed, Crown will continue to provide site
support services to Constar Sherburn at a cost of GBP 2,266 per month until
December 31, 2005. If Crown decides to proceed with outsourcing, Crown will not
be able to supply the site support service (PC, server, printer, LAN technical
support) to Constar and Constar will need to make their own arrangements. Crown
will give Constar 30 days notice in writing, prior to such outsourcing, should
Crown decide to proceed with outsourcing.

 

•   Constar may not request or have made any revisions or new programming of
current information technology systems or software. All system specifications
will remain the same as on the date of execution of the Services Agreement.

 

•   Crown shall not be obligated under this Agreement to provide software or any
licensed property rights to Constar if prohibited or available only at
additional cost under licensing agreements.

 

•   To provide Crown an orderly transition, Section 4.1 (Term) and Section 4.2
(Non-Exclusivity) shall be supplemented as follows. If notice to terminate the
Sherburn services is not given by August 31, 2005, Constar shall be required to
pay for such services until March 31, 2006 regardless of actual usage (unless
notice is given). Beginning October 1, 2005, Constar can shorten this obligation
by giving 90 days advance notice to terminate such services. In all cases, the
obligation to pay for such services shall end on March 31, 2006.

 

•   Constar and Crown representatives will meet periodically at Crown’s request
to discuss Constar’s plans to transition off of MIS services from Crown.

 

B. Didam, Netherlands

 

1. Information Technology

 

•   Crown will not provide any ERP, bar-coding and payroll system support. The
cost of technical support from the EISS central team will be GBP 300 per month.

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

•   The cost of the BT Wide Area Network will be GBP 602.21 per month. Variable
charges which are directly dependent on usage by Constar will include the
following:

 

  •   GBP 11 per month per user to British Telecommunications plc for internet
access

 

  •   GBP 11 per month per user to British Telecommunications plc for remote
access service, plus an additional charge at British Telecommunications plc’s
then-current rates based on the amount of time that users are connected through
this service.

 

•   Crown is currently considering outsourcing the support of the European IS
infrastructure. Crown will not make a decision to proceed before January 1,
2005. If Crown chooses not to proceed, Crown will continue to provide site
support services to Constar Didam at a cost of Euros 5,665 per month until
December 31, 2005. If Crown decides to proceed with outsourcing, Crown will not
be able to supply the site support service (PC, server, printer, LAN technical
support) to Constar and Constar will need to make their own arrangements. Crown
will give Constar 30 days notice in writing, prior to such outsourcing, should
Crown decide to proceed with outsourcing.

 

•   Constar may not request or have made any revisions or new programming of
current information technology systems or software. All system specifications
will remain the same as on the date of execution of the Services Agreement.

 

•   Crown shall not be obligated under this Agreement to provide software or any
licensed property rights to Constar if prohibited or available only at
additional cost under licensing agreements.

 

•   To provide Crown an orderly transition, Section 4.1 (Term) and Section 4.2
(Non-Exclusivity) shall be supplemented as follows. If notice to terminate the
Didam services is not given by August 31, 2005, Constar shall be required to pay
for such services until March 31, 2006 regardless of actual usage (unless notice
is given). Beginning October 1, 2005, Constar can shorten this obligation by
giving 90 days advance notice to terminate such services. In all cases, the
obligation to pay for such services shall end on March 31, 2006.

 

•   Constar and Crown representatives will meet periodically at Crown’s request
to discuss Constar’s plans to transition off of MIS services from Crown.