Exhibit 10.1
 
 
Third Amended And Restated
Plasticizers Production Agreement
Between
Sterling Chemicals, Inc.
and
BASF Corporation
 
April 1, 2008
 

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Third Amended And Restated
Plasticizers Production Agreement
Table of Contents

              Page
Article I — Definitions and Interpretation
    1  
 
       
Section 1.01. Certain Defined Terms
    1  
Section 1.02. Interpretation
    13  
 
       
Article II — Production and Delivery of Products
    13  
 
       
Section 2.01. Production and Delivery
    13  
Section 2.02. Raw Materials and Ancillary Raw Materials
    16  
Section 2.03. Deliveries; Title and Risk of Loss
    16  
Section 2.04. Warranties
    17  
Section 2.05. Quality Testing
    17  
Section 2.06. Quantity Measurement and Testing
    18  
Section 2.07. Storage of Raw Materials and Products
    19  
Section 2.08. Hours of Operation
    19  
Section 2.09. Termination of Obligations with Respect to the PA Unit
    19  
Section 2.10. Termination of Obligations with Respect to the Oxo Unit
    20  
 
       
Article III — Payments; Capital Expenditures
    20  
 
       
Section 3.01. Payment for Termination of PA Unit Obligations
    20  
Section 3.02. Payments
    21  
Section 3.03. Esters Facility Fee
    22  
Section 3.04. Capital Expenditures and Expansion Capital Expenditures
    23  
Section 3.05. Maintenance Expenditures
    26  
Section 3.06. Cost Savings; Manpower Reductions
    26  
Section 3.07. Taxes
    29  
Section 3.08. Wire Transfers, Etc.
    29  
Section 3.09. Late Payments
    29  
 
       
Article IV — Operation of the Esters Unit and Related Matters
    30  
 
       
Section 4.01. Operational Practices
    30  
Section 4.02. Plant Visits; BASF Liaison
    30  
Section 4.03. Insurance
    31  
Section 4.04. Damage or Destruction
    31  
Section 4.05. Hazards
    32  
Section 4.06. Compliance with Laws
    33  

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              Page
Article V — Additional Agreements
    33  
 
       
Section 5.01. Title
    33  
Section 5.02. Sale or Transfer of Interest in the Esters Unit
    34  
Section 5.03. Books and Records; Audits
    34  
Section 5.04. Meetings
    35  
Section 5.05. Technical Advice
    35  
Section 5.06. Confidentiality
    36  
Section 5.07. Restriction on Transfer of Information
    38  
Section 5.08. Public Statements
    38  
Section 5.09. SEC Reports
    38  
 
       
Article VI — Indemnification; Limitation of Liability; Remedies
    38  
 
       
Section 6.01. Indemnification
    38  
Section 6.02. Force Majeure
    40  
Section 6.03. Limitations on Damages
    42  
Section 6.04. Remedies
    43  
 
       
Article VII — Term; Effect of Termination
    43  
 
       
Section 7.01. Term and Termination
    43  
Section 7.02. Effect of Termination
    44  
 
       
Article VIII — Miscellaneous
    44  
 
       
Section 8.01. Notices
    44  
Section 8.02. Counterparts
    45  
Section 8.03. Benefit and Burden
    45  
Section 8.04. No Third Party Rights
    45  
Section 8.05. No Partnership or Agency
    46  
Section 8.06. Amendments and Waiver
    46  
Section 8.07. Assignments
    46  
Section 8.08. Severability
    46  
Section 8.09. Dispute Resolution Procedures
    46  
Section 8.10. Applicable Law
    49  
Section 8.11. Submission to Jurisdiction
    49  
Section 8.12. Prevailing Party Costs
    49  
Section 8.13. Entire Agreement
    49  
 
       
Exhibits:
       
 
       
Exhibit A — Esters Unit Fixed Costs Categories
       
Exhibit B — Esters Unit Variable Costs Categories
       
Exhibit C — Marine Provisions
       

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Third Amended and Restated
Plasticizers Production Agreement
          This Third Amended and Restated Plasticizers Production Agreement
dated effective as of April 1, 2008 (the “Effective Date”) is by and between
Sterling Chemicals, Inc., a Delaware corporation (“Sterling”), and BASF
Corporation, a Delaware corporation (“BASF” and, together with Sterling, the
“Parties”).
Preliminary Statements

  1.   Sterling and BASF are parties to that certain Second Amended and Restated
Plasticizers Production Agreement dated as of January 1, 2006 (as amended, the
“Existing Agreement”).     2.   The Parties 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 is hereby
acknowledged, effective as of the Effective Date, the Existing Agreement is
amended and restated in its entirety to read as follows:
Article I
Definitions and Interpretation
          Section 1.01. Certain Defined Terms. Capitalized terms used in this
Agreement shall have the following respective meanings, except as otherwise
provided herein or as the context shall otherwise require:
          “AAA” has the meaning specified in Section 8.09(c).
     “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such Person. The term “control”
(including, with correlative meaning, the terms “controlling”, “controlled by”
and “under common control with”) means the possession, directly or indirectly,
of the power to direct or cause direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that in no event shall either Party be deemed an
Affiliate of the other Party.
     “Agreement” means this Third Amended and Restated Plasticizers Production
Agreement, as amended, supplemented or modified from time to time in accordance
with the terms hereof.

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     “Allocated Fixed Costs” means the Fixed Costs for the Esters Unit included
in the Allocated Fixed Costs Table.
     “Allocated Fixed Costs Amount” means (i) with respect to any Year, the
aggregate of all amounts listed under the column “Initial Annual Amount” in the
Allocated Fixed Costs Table; provided, however, that:

  (A)   with respect to each General Category of Allocated Fixed Costs that are
also PPI Adjusted Fixed Costs, as of December 31 of each Year, beginning with
December 31, 2008, the amount specified in such column for such General Category
of Allocated Fixed Costs shall be deemed to be (1) the amount for such General
Category of Allocated Fixed Costs then in effect plus (2) the amount, if any, by
which (x) the amount for such General Category of Allocated Fixed Costs then in
effect times the PPI Factor exceeds (y) the amount for such General Category of
Allocated Fixed Costs then in effect;     (B)   with respect to Insurance
Premium Charges, the amount specified in such column shall be deemed to be the
amount determined for such Year under the definition thereof; and     (C)   with
respect to the Environmental General Category of Allocated Fixed Costs, the
amount determined under clause (A) above shall also be increased by an amount
equal to any additional costs or expenses incurred by Sterling in connection
with any Environmental Law adopted or amended after the Effective Date that is
not exclusively applicable to the manufacture or handling of products at the
Site that are not Products hereunder and is allocated on a fair and reasonable
basis to the Esters Unit; and

(ii) with respect to any Month, (A) 1/12 of the Allocated Fixed Costs Amount for
the Year in which such Month occurs (excluding Insurance Premium Charges) plus
(B) the Insurance Premium Charges for such Month.
     “Allocated Fixed Costs Table” means the table on Exhibit A titled
“Allocated Fixed Costs”.
     “Ancillary Raw Materials” means any materials (other than Raw Materials),
including utilities and other services required in the manufacture of Products,
which are to be provided by Sterling pursuant to the terms of this Agreement, in
each case, meeting the applicable Raw Materials Specifications in effect from
time to time pursuant to this Agreement.
     “Applicable Interest Rate” means, with respect to any Day, an annual rate
equal to the lesser of (i) 2% over the rate of interest in effect for such Day
as most recently publicly announced or established by The Chase Manhattan Bank
(National Association) in New

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     York, New York as its “prime rate” and (ii) the maximum non-usurious rate
of interest which may charged under Laws applicable to the Person to whom such
interest is payable.
     “Arbitrator” has the meaning specified in Section 8.09(e).
     “BASF” has the meaning specified in the introductory paragraph hereof.
     “BASF Indemnified Persons” has the meaning specified in Section 6.01(a).
     “BASF Liaison” has the meaning specified in Section 4.02(b).
     “Bulk Storage Tanks” means the bulk storage tanks at the Site that have
historically been used in connection with the storage of Raw Materials and
Products numbered 53T703, 56T13-1, 56T13-2, 56T13-4, 56T501-1, 56T501-2, 56T502,
56T503, 56T504, 56T505, 56T507, 56T803-1 and 56T803-2.
     “Business Day” means any day that is not a Saturday, Sunday or legal
holiday or a day on which banking institutions in Houston, Texas are authorized
or required by Law to close.
     “Capital Budget” has the meaning specified in Section 3.04(a).
     “Capacity” means ***** pounds per year, as such capacity may be increased
as a result of any Expansion Project; provided, however, that (i) BASF
acknowledges and agrees that the relative mix of Products nominated by BASF
during any Year may cause the actual production capacity for such Year to be
less than the stated Capacity, in which event, the Capacity for such Year shall
be reduced to such actual production capacity, (ii) in the event that production
capacity is limited due to the failure of BASF to invest capital in the Esters
Unit to the extent such investment of capital is required under this Agreement,
Capacity shall automatically be reduced to the effective capacity at such time
and (iii) in the event that production capacity is increased through any
expansion, upgrade or change in design, layout or configuration, including any
change in catalyst, Capacity shall be increased by an amount equal to the
increase in annual production capacity realized from such expansion, upgrade or
change.
     “Capital Expenditure” means any expenditure with respect to the Esters Unit
in excess of $5,000 which, in accordance with GAAP (consistently applied),
should be classified as a capital expenditure.
     “Capital Project” means a project that requires Capital Expenditures.
     “Claim” means any claim, demand, investigation, cause of action, suit,
default, assessment, litigation, third party action, arbitral proceeding or
proceeding by or before any Governmental Authority or any other Person.

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     “Competitor” means a manufacturer or marketer of phthalate esters or
phthalic plasticizers.
     “Component Fixed Costs” has the meaning specified in Section 3.02(c).
     “Continuing PA Unit Allocated Fixed Costs” means with respect to any Year,
an amount equal to $*****; and, with respect to any Month, an amount equal to
$*****.
     “Cost Savings” has the meaning specified in Section 3.06(a).
     “Damages” means any and all Claims, Liabilities, Losses, clean-up or
remedial costs, shut-down costs, repairs or reconstruction costs, costs of
investigation and operating, extraordinary or business interruption losses
(including any such matters arising from Spills or Releases Requiring Response
Action).
     “Day” means a 24-hour period commencing at 7:00 a.m. Houston, Texas time on
a calendar day and ending at 7:00 a.m. Houston, Texas time on the following
calendar day, with the date of such Day being the calendar day on which such Day
commenced.
     “Delivery, Shipment and Storage Instructions” has the meaning specified in
Section 2.01(b).
     “Dependent Facility” means any facility, operating unit, pipe line, service
or other thing or matter on which the Esters Unit depends for its operation to
the extent that its absence or impairment would cause the Esters Unit to be
incapable of operating or to be only capable of operating at or below 50% of
Capacity.
     “Direct Fixed Costs” means the Fixed Costs for the Esters Unit included in
the Direct Fixed Costs Table.
     “Direct Fixed Costs Table” means the table on Exhibit A titled “Direct
Fixed Costs”.
     “Dispute” has the meaning specified in Section 8.09(a).
     “Early Termination Fee” means (i) with respect to any termination of this
Agreement at the election of BASF pursuant to Section 3.02(c) or Section 7.01(b)
on or before December 31, 2010, *****, (ii) with respect to any termination of
this Agreement at the election of BASF pursuant to Section 3.02(c) or
Section 7.01(b) after December 31, 2010 but on or before December 31, 2011,
*****, (iii) with respect to any termination of this Agreement at the election
of BASF pursuant to Section 3.02(c) or Section 7.01(b) after December 31, 2011
but on or before December 31, 2012, ***** and (iv) with respect to any other
termination or expiration of this Agreement, *****.
     “Effective Date” has the meaning specified in the introductory paragraph
hereof.

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     “Environmental Laws” means any and all Laws, including any judgment,
permit, approval, decision or determination, pertaining to the environment now
or hereafter in effect, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq., as amended by
the Superfund Amendment and Reauthorization Act of 1986 and as further amended,
the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., as amended,
the Solid Waste Disposal Act of 1976, 42 U.S.C. § 6901 et seq., as amended, the
Clean Air Act, 42 U.S.C. § 7401 et seq., as amended, the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq., as amended, the Hazardous Materials
Transportation Act, 49 Ap. U.S.C.A. § 1801 et seq., as amended, the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq., as amended,
and comparable state and local Laws, and other environmental conservation and
protection Laws.
     “Esters Facility Fee” means, subject to any adjustments thereto pursuant to
Section 3.03, Section 4.04(d), Section 4.04(e) or Section 6.02(f), a fee for the
Esters Unit in the amount of ***** per Quarter; provided, however, that (i) the
Esters Facility Fee shall be pro rated for any partial Quarter by multiplying
the Esters Facility Fee by a fraction, the numerator of which is the number of
Days in such Quarter during which this Agreement is in effect, and the
denominator of which is the actual number of Days in such Quarter, and (ii) the
Esters Facility Fee shall not be increased based on the number of pounds of
Products produced (irrespective of the product mix) unless:

  (A)   no Expansion Project related to the Esters Unit has been conducted and
the number of pounds of Products produced in any Year exceeds ***** pounds, in
which event BASF shall pay Sterling a supplemental Esters Facility Fee for such
Year (but only for such Year) in an amount equal to the amount by which (1)
***** times a fraction, the numerator of which is the number of pounds of
Products produced in such Year and the denominator of which is *****, exceeds
(2) *****, such supplemental Esters Facility Fee to be paid by BASF to Sterling
within 30 Days after the end of such Year; or     (B)   an Expansion Project
related to the Esters Unit is conducted, in which event the Esters Facility Fee
for each Quarter, commencing with the first Quarter beginning after such
Expansion Project has achieved mechanical completion, shall be an amount equal
to the Esters Facility Fee then in effect times a fraction, the numerator of
which is the expected Capacity of the Esters Unit following such Expansion
Project and the denominator of which is the Capacity of the Esters Unit
immediately prior to the commencement of such Expansion Project.

     “Esters Unit” means the plasticizers esters production unit at the Site,
together with all replacements and substitutions thereof, all deletions
therefrom and all additions or other changes thereto during the term of this
Agreement.
     “Estimated Delivery, Shipment and Storage Instructions” has the meaning
specified in Section 2.01(b).

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     “Existing Agreement” has the meaning specified in the Preliminary
Statements.
     “Expansion Capital Expenditures” means any Capital Expenditure made with
respect to the Esters Unit in connection with an Expansion Project.
     “Expansion Project” means any Capital Project requested by BASF pursuant to
Section 3.04(c) that (i) requires Capital Expenditures, (ii) is intended to
expand the Capacity of the Esters Unit beyond its then existing capabilities and
(iii) is intended to improve or upgrade the Esters Unit from its historical
condition.
     “Fixed Costs” means (i) any and all actual fixed costs or expenses
incurred, sustained or paid by Sterling in connection with the Esters Unit, the
receipt or storage of Ancillary Raw Materials or Raw Materials or the
production, storage, sale or delivery of Products, including those costs and
expenses for the Esters Unit in the General Categories listed on Exhibit A in
the table “Direct Fixed Costs,” (ii) those costs and expenses for the Esters
Unit included in the Allocated Fixed Costs Table, (iii) the Continuing PA Unit
Allocated Fixed Costs and (iv) any and all other costs and expenses allocated to
the Esters Unit, the receipt or storage of Ancillary Raw Materials or Raw
Materials or the production, storage, sale or delivery of Products but only to
the extent such costs and expenses are allocated by Sterling among its different
product lines generally, are not exclusively applicable to the manufacture or
handling of products at the Site that are not Products hereunder, are not costs
or expenses currently incurred by Sterling and are not of the same type or
character as any of the Allocated Fixed Costs included in the Allocated Fixed
Costs Table; provided, however, that (A) any costs or expenses allocated under
clause (iv) above shall be allocated by Sterling on a fair and reasonable basis
and (B) for purposes of this Agreement, (x) the actual costs and expenses for
the Allocated Fixed Costs for any Month shall be deemed to equal the Allocated
Fixed Costs Amount for such Month and (y) the actual costs and expenses for the
Allocated Fixed Costs for any Year shall be deemed to equal the Allocated Fixed
Costs Amount for such Year.
     “Force Majeure Event” has the meaning specified in Section 6.02(c).
     “GAAP” means generally accepted United States accounting principles,
applied on a consistent basis (except for changes in which the independent
auditors of both Parties concur) as in effect from time to time.
     “General Category” means all Fixed Costs or Variable Costs listed in the
same row in any of the tables on Exhibit A or Exhibit B, including all
subcategories.
     “Governmental Authority” means (i) any nation or government, (ii) any
federal, state, county, province, city, town, municipality, local or other
political subdivision thereof or thereto, (iii) any court, tribunal, department,
commission, board, bureau, instrumentality, agency, council, arbitrator or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and (iv) any other

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governmental entity, agency or authority having or exercising jurisdiction over
any relevant Person, item or matter.
     “Hazardous Materials” means any hazardous or toxic substances or
contaminated material including asbestos (friable, non-friable or any other
form), polychlorinated biphenyls and any flammable materials, explosives,
radioactive materials, hazardous materials, hazardous waste, hazardous or toxic
or regulated substances or related materials defined in or under any
Environmental Law, and any other substance, waste, pollutant, contaminant or
material, including petroleum products and derivatives, crude oil or fractions
thereof or any chemical which causes cancer or reproductive effects, which are
defined by applicable Law as hazardous or toxic or the use, transport, disposal,
storage, treatment, recycling, handling, discharge, Release or emission of which
is regulated or governed by any applicable Law.
     “Indemnified Person” has the meaning specified in Section 6.01(c).
     “Indemnifying Party” has the meaning specified in Section 6.01(c).
     “Insurance Premium Charges” means (i) with respect to any Year, the
aggregate of the Property Damage/Business Interruption Insurance Premium Charges
and the Liability Insurance Premium Charges for each Month during such Year, and
(ii) with respect to any Month, the Property Damage/Business Interruption
Insurance Premium Charges for such Month plus the Liability Insurance Premium
Charges for such Month.
     “Invoice” has the meaning specified in Section 3.02(b).
     “Laws” means all laws, statutes, rules, regulations, ordinances, orders,
writs, injunctions or decrees and other pronouncements having the effect of law
of any Governmental Authority.
     “Liability” means, with respect to any Person, any indebtedness, obligation
and other liability of such Person, whether absolute, accrued, contingent, fixed
or otherwise, or whether due or to become due.
     “Liability Insurance Premium Charges” means with respect to the Esters
Unit, (i) for each 12-month period commencing on July 1 of each Year, an amount
equal to *****; provided, however, that as of July 1 of each Year, beginning
with July 1, 2008, the Liability Insurance Premium Charges shall be adjusted by
multiplying the Liability Insurance Premium Charges then in effect by a fraction
(A) the numerator of which is the premium rate assessed for the 12-month period
commencing on that date under Sterling’s liability insurance policy and (B) the
denominator of which is the premium rate assessed for the immediately preceding
12-month period under Sterling’s liability insurance policy, and (ii) with
respect to any Month, 1/12 of the Liability Insurance Premium Charges in effect
for the 12-month period (commencing on July 1 of each Year) in which such Month
occurs. The premium rate under Sterling’s liability insurance policy for the
12-month period from July 1, 2007 through July 1, 2008 is ***** of liability
coverage.

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     “Lien” means (i) any mortgage, lien, charge, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, security interest, assessment,
adverse claim, levy, preference or priority or other security agreement of any
kind or nature whatsoever (whether voluntary or involuntary, affirmative or
negative, and whether imposed or created by contract, operation of Law or
otherwise) in, on, of or with respect to any assets or properties, whether now
owned or hereafter acquired, (ii) any other interest in assets or properties
designed to secure the repayment of indebtedness or any other Liability, whether
arising by contract, operation of Law or otherwise, (iii) any contract to give
any of the foregoing and (iv) any conditional sale or other title retention
agreement and any financing lease having substantially the same effect as any of
the foregoing.
     “Losses” means any and all damages (including consequential, punitive and
exemplary to the extent not excluded pursuant to Section 6.03), fines,
penalties, judgments, deficiencies, losses, costs and expenses, including court
costs, reasonable fees of attorneys, accountants and other experts and other
reasonable expenses of any Claim.
     “Maintenance Budget” has the meaning specified in Section 3.05.
     “Marine Provisions” means the marine provisions attached hereto as
Exhibit C; provided, however, that Sterling shall have the right, at any time
and from time to time, to revise the Marine Provisions and, upon delivery of any
such revised Marine Provisions to BASF, the Marine Provisions shall be deemed to
be amended without further action by either of the Parties so long as (i) such
revised Marine Provisions apply to all of Sterling’s customers generally,
(ii) such amendment does not materially adversely affect BASF’s rights and
obligations under the Marine Provisions and (iii) such revised Marine Provisions
do not violate any applicable Law.
     “Measuring Equipment” means the shore tanks and scales located at the Site
for measuring deliveries and receipts of Products and Raw Materials to be loaded
into or off-loaded from, as applicable, ships, barges, other inland water or
marine vessels, rail cars, tank trucks or other conveyances.
     “Month” means the period beginning on the first Day of a calendar month
until the first Day of the next succeeding calendar month.
     “Monthly Contract Capacity” means, with respect to any Product, the
Capacity for such Product divided by 12.
     “Oxo Unit” means the oxo-alcohols production unit at the Site, together
with all replacements and substitutions thereof, all deletions therefrom and all
additions or other changes thereto during the term of this Agreement.
     “PA” means phthalic anhydride.

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     “PA Unit” means the PA production unit at the Site, together with all
replacements and substitutions thereof, all deletions therefrom and all
additions or other changes thereto during the term of this Agreement.
     “PA Unit Decontamination Payments” has the meaning specified in
Section 3.01(b).
     “PA Unit Termination Payments” means payments by BASF to Sterling in the
total amount of $3,205,000 for the termination of BASF’s obligations under the
Existing Agreement with respect to the operation of the PA Unit.
     “Parties” has the meaning specified in the introductory paragraph hereof.
     “Permitted Encumbrances” means any and all (i) Liens for taxes if the same
shall at the time not be delinquent or thereafter may be paid without penalty or
if such taxes are being contested in good faith by appropriate proceedings
promptly initiated and diligently conducted; provided, however, that reserves or
other appropriate provisions (if any) as shall be required by GAAP shall have
been made therefor, (ii) Liens consisting of easements, zoning restrictions or
other restrictions on the use of real property that do not materially affect the
value of the assets or properties encumbered thereby or materially impair the
ability of the owner of such assets or properties to use such assets or
properties in its business, (iii) Liens of landlords, mechanics, materialmen,
warehousemen, carriers or other statutory Liens securing obligations that are
not yet due and are incurred in the ordinary course of business, (iv) Liens
resulting from deposits to secure payments of workmen’s compensation or other
social security programs or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids or contracts in the ordinary course
of business and (v) Liens existing on the date hereof or created after the date
hereof in accordance with the terms of this Agreement.
     “Person” means any individual, firm, corporation, trust, association,
company, limited liability company, joint stock company, partnership, joint
venture, Governmental Authority or other entity or enterprise.
     “Plant” means the petrochemicals manufacturing facility owned by Sterling
that is located at the Site, including the Esters Unit.
     “Plant Disposition” has the meaning specified in Section 5.02(a).
     “Point of Delivery” means (i) with respect to any Raw Materials, the point
specified in Section 2.03(b), and (ii) with respect to any Product, the point
specified in Section 2.03(c).
     “PPI Adjusted Fixed Costs” means, with respect to the Esters Unit, all
General Categories of Fixed Costs that have the word “Yes” under the column
titled “PPI Adjustment” in any of the tables on Exhibit A.

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     “PPI Adjusted Fixed Costs Amount” means, with respect to any Year, the
aggregate of all amounts listed under the column “Initial Annual Amount” in each
of the tables on Exhibit A for all General Categories of PPI Adjusted Fixed
Costs; provided, however, as of December 31 of each Year, beginning with
December 31, 2008, the amount specified in such tables for each General Category
of PPI Adjusted Fixed Costs shall be deemed to be (i) the amount for such
General Category of PPI Adjusted Fixed Costs then in effect plus (ii) the
amount, if any, by which (A) the amount for such General Category of PPI
Adjusted Fixed Costs Amount then in effect times the PPI Factor exceeds (B) the
amount for such General Category of PPI Adjusted Fixed Costs then in effect.
     “PPI Factor” means, with respect to any Year, a fraction, the numerator of
which is the average of the monthly Producer Price Index — Commodities
(Chemicals and allied products) as published by the United States Department of
Labor, Bureau of Labor Statistics for such Year, and the denominator of which is
214.8.
     “Product Specifications” means the specifications for the Products set
forth in the Quality Assurance Manual.
     “Products” means plasticizers esters meeting the applicable Product
Specifications.
     “Property Damage/Business Interruption Insurance Premium Charges” means,
with respect to the Esters Unit, (i) for each 12-month period commencing on July
1 of each Year, an amount equal to *****; provided, however, that as of July 1
of each Year, beginning with July 1, 2008, the Property Damage/Business
Interruption Insurance Premium Charges shall be adjusted by multiplying the
Property Damage/Business Interruption Insurance Premium Charges then in effect
by a fraction (A) the numerator of which is the premium rate assessed for the
12-month period commencing on that date under Sterling’s property
damage/business interruption insurance policy and (B) the denominator of which
is the premium rate assessed for the immediately preceding 12-month period under
Sterling’s property damage/business interruption insurance policy, and (ii) with
respect to any Month, 1/12 of the Property Damage/Business Interruption
Insurance Premium Charges in effect for the 12-month period (commencing on July
1 of each Year) in which such Month occurs. The premium rate under Sterling’s
property damage/business interruption insurance policy for the 12-month period
from July 1, 2007 through July 1, 2008 is ***** of property value.
     “Quality Assurance Manual” means the Quality Assurance Manual dated
January 1, 2006 setting forth the Raw Materials Specifications, the Product
Specifications, and procedures for inspecting, sampling and testing Ancillary
Raw Materials, Raw Materials and Products, the contents of which are
incorporated herein by reference. BASF may, from time to time, propose deletions
from or changes or additions to the Quality Assurance Manual and, if Sterling
makes no objection to such deletion, change or addition within 30 Days after
receipt thereof, the Quality Assurance Manual shall be deemed amended as of the
last Day of such 30-Day period without further action of the Parties; provided,
however, that, unless Sterling and BASF consent otherwise in writing, (i) no
change in the Quality Assurance Manual shall amend any of the terms or
conditions of this Agreement,

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(ii) no change in the Quality Assurance Manual shall be effective if such change
would result in a material adverse effect with respect to the Esters Unit or
either Party unless BASF adequately compensates Sterling for such adverse
effects and (iii) no change in the Quality Assurance Manual shall be effective
as to any Ancillary Raw Materials or Raw Materials delivered or Products
produced prior to the date of such change.
     “Quarter” means the period beginning on the first Day of a calendar quarter
until the first Day of the next succeeding calendar quarter; provided, however,
that (i) the first Quarter hereunder shall commence on the Effective Date and
continue thereafter until the first Day of the next Quarter and (ii) the final
Quarter hereunder shall end on the date that this Agreement expires or otherwise
terminates.
     “Quarterly Meeting” means a meeting of representatives of the Parties to be
held during the first two weeks of January, April, July and October of each
Year, commencing with April of 2008, or at such other times as may be agreed to
by the Parties.
     “Raw Materials” means the catalysts and raw materials specified in the
Quality Assurance Manual that are used in the production of Products, which are
to be provided by BASF pursuant to the terms of this Agreement, in each case,
meeting the applicable Raw Materials Specifications in effect from time to time
pursuant to this Agreement.
     “Raw Materials Specifications” means the specifications for Raw Materials
and Ancillary Raw Materials set forth in the Quality Assurance Manual.
     “Reduction Factor” means an amount equal to the Capacity of the Esters Unit
after the event or circumstances that caused a reduction in the Capacity of the
Esters Unit divided by the Capacity of the Esters Unit immediately prior to such
event or circumstances.
     “Release” means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles).
     “Site” means the real estate and improvements in Texas City, Texas owned by
Sterling.
     “Spills or Releases Requiring Response Action” means any Release or
threatened Release of Hazardous Materials into or upon ambient air, surface
water, ground water, land or subsurface strata relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials in connection with the ownership or operation of
the Oxo Unit, the PA Unit or the Esters Unit, any ship, barge, other inland
water or marine vessel, rail car, tank truck or other conveyance, or the
production, delivery, storage, shipment, sale, resale, use, disposal or
transportation of Products, Raw Materials, Ancillary Raw Materials, waste or
other materials used in or resulting from the production of Products.

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     “Sterling” has the meaning specified in the introductory paragraph hereof.
     “Sterling Indemnified Persons” has the meaning specified in
Section 6.01(b).
     “Third Party Claim” has the meaning specified in Section 6.01(c).
     “Threshold Fixed Costs Amount” means, subject to any adjustments thereto
pursuant to Section 2.01(e), Section 3.04(c) or Section 4.02(b), ***** plus
(i) the aggregate amount of Fixed Costs directly attributable to producing more
than ***** pounds of Products in any Year prior to the completion of any
Expansion Project pertaining to the Esters Unit, plus (ii) as of December 31 of
each Year, beginning with December 31, 2008, the aggregate amount, if any, by
which all of the General Categories of PPI Adjusted Fixed Costs Amount are
increased on such date pursuant to the definition of PPI Adjusted Fixed Costs
Amount.
     “Variable Costs” means (i) any and all variable costs or expenses incurred,
sustained or paid by Sterling in connection with the Esters Unit, the purchase,
supply, receipt or storage of Ancillary Raw Materials, Raw Materials or other
materials or the production, storage, sale or delivery of Products, including
those costs and expenses in the categories listed on Exhibit B, in each case,
net of steam credits for any Day when steam is being sold to third parties or
consumed by Sterling at the Site.
     “Year” means a period of 12 consecutive months beginning on the first Day
of January of each calendar year during the term of this Agreement; provided,
however, that (i) the first Year hereunder shall commence on the Effective Date
and continue thereafter until the first Day of the next Year and (ii) the final
Year hereunder shall end on the date that this Agreement expires or otherwise
terminates.
          Section 1.02. Interpretation. In this Agreement, unless a clear
contrary intention appears:
     (a) the words “hereof,” “herein” and “hereunder” and words of similar
import refer to this Agreement as a whole and not to any particular provision of
this Agreement;
     (b) all terms defined in the singular shall have the same meanings in the
plural and vice versa;
     (c) reference to any entity includes such entity’s successors and assigns;
provided, however, that nothing contained in this clause (c) is intended to
authorize any assignment not otherwise permitted by this Agreement;
     (d) all references to Articles and Sections shall be deemed to be
references to the Articles and Sections of this Agreement;

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     (e) all references to Exhibits shall be deemed to be references to the
Exhibits attached hereto which are made a part hereof and incorporated herein by
reference;
     (f) the word “including” (and with correlative meaning “include”) means
including, without limiting the generality of any description preceding such
term;
     (g) with respect to the determination of any period of time, the word
“from” means “from and including” and the words “to” and “until” each means “to
but excluding”;
     (h) the captions and headings contained in this Agreement shall not be
considered or given any effect in construing the provisions hereof if any
question of intent should arise; and
     (i) no provision of this Agreement shall be interpreted or construed
against either Party hereto solely because that Party or its legal
representative drafted such provision.
Article II
Production and Delivery of Products
          Section 2.01. Production and Delivery. (a) Commencing on the Effective
Date, on the terms and subject to the conditions of this Agreement:
     (i) Sterling shall (A) manufacture Products for BASF in the amounts
requested by BASF in accordance with the terms hereof and hold available any
excess capacity at the Esters Unit for BASF, (B) receive Raw Materials,
(C) provide Ancillary Raw Materials, (D) store Raw Materials, Ancillary Raw
Materials and Products, (E) ship Products in bulk, (F) provide BASF with any and
all toxicological and ecological data regarding Products and any and all
technology acquired by Sterling regarding the manufacture of Products received
from Monsanto Company (other than information licensed from a party other than
BASF or Monsanto Company), (G) during the hours of operation referenced in
Section 2.08, assist in the scheduling of deliveries and shipments and the
proper documentation thereof, whether into or out of the Site, of Raw Materials
or Products, (H) affix labels supplied by BASF to Products, (I) provide a
reasonable number of samples of Products to BASF’s customers according to BASF’s
instructions and (J) provide any other services typically performed by a
manufacturer of products similar to the Products for its customers; and
     (ii) BASF shall deliver Raw Materials to Sterling, receive Products from
Sterling and make the payments contemplated by this Agreement.
The amount of Products delivered by Sterling to BASF, and received and purchased
by BASF, in any Month shall be determined in accordance with paragraph
(b) below.
          (b) Subject to the terms and conditions of this Agreement, BASF may
nominate volumes for each Product and determine the total Product mix in its
sole discretion; provided,

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however, that BASF may only nominate *****in any given Month. BASF shall be
solely responsible for any and all costs and expenses incurred in connection
with any modification of the Esters Unit or related activities performed in
connection with any substantial variations in the volumes of the various
Products nominated by BASF or material changes in campaign frequencies, and such
costs and expenses shall be excluded from any calculation of Costs Savings or
the Component Fixed Costs under this Agreement and, to the extent such costs and
expenses are Allocated Fixed Costs, shall be paid separately from, and in
addition to, the Allocated Fixed Costs Amount. On or before October 31 of each
Year, BASF shall provide Sterling with a written forecast of its requirements
for each Product for the following Year. At least five Days prior to the
beginning of each Month, BASF will provide Sterling with a written rolling
forecast of its deliveries of Raw Materials and requirements for Products for
the next three Months, with the forecast for the immediately ensuing Month being
referred to in this Agreement as the “Estimated Delivery, Shipment and Storage
Instructions”. BASF shall provide Sterling with written notice setting forth
BASF’s requested dates and volumes of deliveries and shipping of Raw Materials
and Products, and its storage requirements for Raw Materials and Products,
(i) at least 72 hours prior to the desired loading or unloading date in the case
of deliveries by ship, barge or other inland water or marine vessel, (ii) at
least 48 hours prior to the desired loading or unloading date and at least 72
hours prior to the desired shipping date in the case of deliveries by rail car
and (iii) at least 48 hours prior to the desired loading or unloading date or
shipping date in the case of deliveries by tank truck and deposits of Products
into storage (the “Delivery, Shipment and Storage Instructions”). Sterling shall
be entitled to rely upon any Estimated Delivery, Shipment and Storage
Instructions unless superseded by Delivery, Shipment and Storage Instructions.
Sterling shall use reasonable efforts to comply with the Estimated Delivery,
Shipment and Storage Instructions and the Delivery, Shipment and Storage
Instructions, and shall give BASF the same rights of priority and scheduling
with respect thereto that it uses for deliveries and shipments of its own raw
materials and products and those of Sterling’s other suppliers and customers.
BASF may also deliver to Sterling from time to time additional delivery,
shipment and storage instructions and Sterling shall use reasonable efforts to
receive Raw Materials, deliver Products and store Raw Materials and Products at
the times specified in such instructions; provided, however, that if such
additional delivery, shipment and storage instructions cause Sterling to incur
additional expense, BASF shall reimburse Sterling for such additional expense.
All such additional delivery, shipment and storage instructions shall be given
as early as is practicable prior to the requested delivery, shipment or storage
date but, in any event, at least as far in advance of the requested date of
delivery, shipment or storage as is required for Delivery, Shipment and Storage
Instructions. If BASF fails to provide any ship, barge, other inland water or
marine vessel, rail car, tank truck or other conveyance at the times specified
in the applicable Estimated Delivery, Shipment and Storage Instructions,
Delivery, Shipment and Storage Instructions or additional delivery, shipment and
storage instructions, the applicable ship, barge, other inland water or marine
vessel, rail car or tank truck will not be loaded or unloaded until the next
available window for such method of transportation at the Site.
          (c) If BASF fails to take delivery of any Product that meets the
applicable Product Specifications and is tendered to it by Sterling pursuant to
the Estimated Delivery, Shipment and Storage Instructions, the Delivery,
Shipment and Storage Instructions or additional delivery, shipment and storage
instructions, Sterling shall have the right to reduce or curtail production of
Products if (i) such failure to take delivery will result in the exceedance of
storage capacity at the

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Site and BASF does not provide for, or agree to allow and to pay for, outside
storage, or (ii) BASF’s failure to take delivery will result in the need to shut
down the Esters Unit. Except to the extent otherwise provided in this Agreement,
a failure to take delivery of any Products by BASF shall not limit its payment
obligations hereunder. The taking of delivery of Products by BASF shall not
prejudice the right of BASF to dispute or question the quantity or quality of
any Products delivered hereunder pursuant to Sections 2.05 and 2.06 or limit or
otherwise affect the indemnity obligations of Sterling under Section 6.01(a).
          (d) Notwithstanding anything to the contrary contained in this
Agreement, (i) BASF shall not, in any Estimated Delivery, Shipment and Storage
Instructions, Delivery, Shipment and Storage Instructions or additional
delivery, shipment and storage instructions, request the delivery of, and
Sterling shall not be required to deliver, Products in quantities in excess of
the Monthly Contract Capacity, and (ii) except as otherwise provided in
Section 6.02(a), Sterling shall not be required to purchase any Product from any
other source in order to supply such Product to BASF hereunder; provided,
however, that, notwithstanding anything to the contrary contained in clause
(i) above, BASF may request delivery of Products in excess of the Monthly
Contract Capacity if the Esters Unit is capable of producing such Products in
quantities in excess of the Monthly Contract Capacity, in which event BASF shall
be solely responsible for any and all incremental costs and expenses incurred by
Sterling in connection with producing such Product in quantities in excess of
the Monthly Contract Capacity, and such costs and expenses shall be excluded
from any calculation of Costs Savings or the Component Fixed Costs under this
Agreement and, to the extent such costs and expenses are Allocated Fixed Costs,
shall be paid separately from, and in addition to, the Allocated Fixed Costs
Amount. Prior to any material expansion, upgrade or change in design, layout,
configuration or capacity of the Esters Unit, including any change in catalyst,
the Parties shall discuss such expansion, upgrade or change.
          (e) In the event that BASF desires to substitute a different Product
for *****then being produced, (i) the Threshold Fixed Costs Amount shall be
increased by an amount equal to the actual increase in Direct Fixed Costs and
Allocated Fixed Costs resulting from such change, (ii) such additional Direct
Fixed Costs and Allocated Fixed Costs shall thereafter be included in the
calculation of the Component Fixed Costs and (iii) to the extent such costs and
expenses are Allocated Fixed Costs, shall be paid separately from, and in
addition to, the Allocated Fixed Costs Amount. In the event that BASF desires to
produce more than in the Esters Unit in any given Month, the Parties will
negotiate in good faith appropriate increases in the Threshold Fixed Costs
Amount, the Allocated Fixed Costs Amount and the impact on any calculation of
Costs Savings, and, in the absence of agreement on such matters, Sterling shall
not be required to produce such additional Products. If BASF desires to add
other products or substitute a product for any Product, Sterling will produce
such other products so long as (i) either no modification of the Esters Unit is
required or BASF pays for all such modifications, (ii) neither such production
nor any required modifications to the Esters Unit will unreasonably affect the
operations of the Plant and (iii) any required amendment to Sterling’s air
permit has been obtained. Sterling shall use commercially reasonable efforts to
expeditiously obtain any required amendment to the air permit.

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          Section 2.02. Raw Materials and Ancillary Raw Materials. (a) BASF
shall furnish to Sterling, or cause to be furnished to Sterling, all Raw
Materials used in the production of Products in such quantities and at such
times as are required for Sterling to perform its production and delivery
obligations to BASF; provided, however, that (i) Sterling shall notify BASF in
writing of its requirements for Raw Materials at such times as will allow BASF
to supply such Raw Materials in the ordinary course and permit Sterling to
fulfill its production and delivery obligations hereunder, and (ii) the failure
by Sterling to provide such notice to BASF shall not relieve Sterling of any of
its obligations under this Agreement. BASF shall provide Sterling with written
notice of the expected dates of arrival of each shipment of Raw Materials in
accordance with Section 2.01(b).
          (b) Sterling shall supply all Ancillary Raw Materials and any other
materials (other than Raw Materials) used in the production of Products.
          (c) Sterling shall supply all sample packaging (excluding drums), as
specified by BASF for shipment of Products, in such quantities and at such times
as are necessary for Sterling to perform its manufacturing and delivery
obligations under this Agreement. BASF may, at its option, elect to supply any
or all sample packaging by providing Sterling with at least 30 Days’ prior
written notice of its election to do so.
          Section 2.03. Deliveries; Title and Risk of Loss. (a) All deliveries
of Raw Materials and shipments of Products by ship, barge or other inland water
or marine vessel shall be made in conformance with the Marine Provisions. Unless
Sterling otherwise consents, BASF shall supply all ships, barges, other inland
water and marine vessels, rail cars, tank trucks or other conveyances required
for all deliveries of Raw Materials and shipments of Products under this
Agreement. BASF shall be solely responsible for arranging and providing any
emergency response measures required in connection with any ship, barge, other
inland water or marine vessel, rail car, tank truck or other conveyance (except
that Sterling shall provide emergency response measures, at the cost and expense
of BASF, if the applicable ship, barge, other inland water or marine vessel,
rail car, tank truck or other conveyance is physically located at the Site).
          (b) The Point of Delivery for all Raw Materials shall be the point of
transfer of custody of such Raw Materials from BASF to Sterling, and shall be at
the Plant’s loading-arm flange from which such Raw Materials are received by
Sterling. Risk of loss to Raw Materials shall pass to Sterling at such flange
(irrespective of whether BASF owns or has provided any ship, barge, other inland
water or marine vessel, rail car, tank truck or other conveyance from which such
Raw Materials are transferred). As between Sterling and BASF, except as
otherwise provided herein, (i) BASF shall be in control and possession of all
Raw Materials delivered hereunder and responsible for any damage or injury
thereto or caused thereby until risk of loss with respect thereto has passed to
Sterling, and (ii) Sterling shall be in control and possession of all Raw
Materials received hereunder and responsible for any damage or injury thereto or
caused thereby after risk of loss with respect thereto has passed to Sterling.
          (c) The Point of Delivery of all Products shall be the point of
transfer of custody of such Products from Sterling to BASF, and shall be at the
Plant’s loading-arm flange from which such Products are loaded into the
applicable ship, barge, other inland water or marine vessel, rail

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car, tank truck or other conveyance for shipment. Risk of loss to such Products
shall pass to BASF at such flange (irrespective of whether Sterling owns or has
provided any ship, barge, other inland water or marine vessel, rail car, tank
truck or other conveyance into which such Products are stored or loaded). As
between Sterling and BASF, except as otherwise provided herein, (i) Sterling
shall be in control and possession of Products produced hereunder and
responsible for any damage or injury thereto or caused thereby until risk of
loss with respect thereto has passed to BASF and (ii) BASF shall be in control
and possession of Products produced hereunder and responsible for any damage or
injury thereto or caused thereby after risk of loss with respect thereto has
passed to BASF.
          Section 2.04. Warranties. BASF warrants that all Raw Materials
delivered to Sterling pursuant to this Agreement will meet the applicable Raw
Materials Specifications. Sterling warrants that (a) any Raw Materials not
rejected by Sterling pursuant to Section 2.05(b) will meet the applicable Raw
Materials Specifications (excluding any failure to meet the Raw Materials
Specifications caused by the storage of such Raw Materials beyond their shelf
life), (b) all Ancillary Raw Materials used in the production of Products will
meet the applicable Raw Materials Specifications, (c) all Products delivered to
BASF pursuant to this Agreement will meet the applicable Product Specifications,
(d) Sterling will convey good title to all Products delivered to BASF hereunder
and (e) such Products shall be delivered free from any lawful Lien. Except For
The Representations And Warranties Expressly Provided Herein, Neither Party
Makes, And Each Party Hereby Expressly Disclaims And Negates, Any Representation
Or Warranty With Respect To Any Product, Raw Materials Or Ancillary Raw
Materials Delivered Or Used Pursuant To This Agreement (Express, Implied, Common
Law, Statutory Or Otherwise), Including Any Warranty Of Merchantability Or
Fitness For A Particular Purpose Or Use Or Any Other Matter With Respect To Any
Products, Raw Materials Or Ancillary Raw Materials Delivered Or Used Hereunder,
Whether Used Alone Or In Combination With Any Other Material.
          Section 2.05. Quality Testing. (a) During the hours of operation
referenced in Section 2.08, Sterling shall (i) inspect, sample and test each lot
of Raw Materials, Ancillary Raw Materials and Products under the procedures set
forth in the Quality Assurance Manual, (ii) code to identify Raw Materials and
Ancillary Raw Materials to specific Products produced and shipped and
(iii) perform such additional testing, statistical process control and
statistical quality control for Products as may be reasonably requested by BASF.
BASF shall also have the right to further test Products prior to shipment
hereunder. Sterling 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 any Product. The cost of
all inspecting, sampling, testing and coding hereunder shall be included in
Fixed Costs. All records or certifications shall be kept for a period of not
less than one year (or for the duration of any contest with respect thereto, if
longer), and all samples shall be kept for a period of not less than 90 Days (or
for the duration of any contest with respect thereto, if longer), with the
procedures for taking samples at the unloading flange for Raw Materials and the
procedures for taking samples of Products as of the date of shipment to be
mutually agreed upon by the Parties. All records, certifications and samples
shall be made available to BASF on request. The retained sample for any Raw
Materials or Ancillary Raw Materials shall be the exclusive source for

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determining whether any Raw Materials or Ancillary Raw Materials meet the
applicable Raw Materials Specifications, and the retained sample for any Product
shall be the exclusive source for determining whether any Product meets the
applicable Product Specifications.
          (b) Subject to the terms of this Agreement, Sterling shall accept any
and all deliveries of Raw Materials; provided, however, that Sterling may reject
any delivery of Raw Materials if Sterling notifies BASF in writing, within 10
Business Days after the delivery of such Raw Materials to Sterling, of the
failure of such Raw Materials to meet the applicable Raw Materials
Specifications. In the event that Sterling rejects any delivery of Raw
Materials, BASF may object to such rejection in writing within five Business
Days after receipt of the relevant notice from Sterling, in which event the
Parties will meet within three Business Days after delivery of such objection to
resolve the question of whether such Raw Materials meet the applicable Raw
Materials Specifications. If the Parties are unable to resolve the matter during
such meeting, either Party may refer the matter to an independent surveyor or
chemical laboratory mutually agreeable to the Parties, which agreement will not
be unreasonably withheld, for testing the retained sample of such Raw Materials
under the agreed upon procedure. The findings of the independent surveyor or
chemical laboratory will be conclusive and binding upon the Parties. If any Raw
Materials fail to meet the applicable Raw Materials Specifications and BASF does
not timely make available other Raw Materials meeting the applicable Raw
Materials Specifications, Sterling’s manufacturing and delivering obligations
hereunder shall be reduced accordingly.
          (c) Subject to the terms of this Agreement, BASF shall accept any and
all deliveries of Products; provided, however, that BASF may reject any delivery
of Products if BASF notifies Sterling in writing, within 45 Business Days after
the later of delivery of such Products to BASF or delivery of such Products to a
BASF customer (if shipped directly from the Site to such customer), of the
failure of such Product to meet the applicable Product Specifications as of the
date of shipment. In the event that BASF rejects any delivery of Products,
Sterling may object to such rejection in writing within five Business Days after
receipt of the relevant notice from BASF, in which event the Parties will meet
within three Business Days after delivery of such objection to resolve the
question of whether such Products meets the applicable Product Specifications.
If the Parties are unable to resolve the matter during such meeting, either
Party may refer the matter to an independent surveyor or chemical laboratory
mutually agreeable to the Parties, which agreement will not be unreasonably
withheld, for testing the retained sample of such Product under the agreed upon
procedure. The findings of the independent surveyor or chemical laboratory will
be conclusive and binding upon the Parties. If any Products fail to meet the
applicable Products Specifications, Sterling shall reprocess such Products to
meet the applicable Products Specifications or deliver replacement Products that
meet the applicable Products Specifications.
          Section 2.06. Quantity Measurement and Testing. (a) The unit of
measurement of Products and Raw Materials shall be one pound (avoirdupois). All
quantities referred to herein, unless otherwise expressly stated, are in terms
of such unit of measurement.
          (b) Quantities of Raw Materials and Products delivered by ship, barge
or other inland water or marine vessel shall be determined by taking the opening
and closing inventory of

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Sterling’s properly calibrated shore tanks before and after loading or unloading
such shipment, unless otherwise provided hereunder. Quantities of Raw Materials
and Products delivered by rail car or tank truck shall be determined by weighing
the applicable rail cars or tank trucks on Sterling’s certified scales before
and after unloading or loading.
          (c) Sterling shall maintain and operate the Measuring Equipment in
accordance with customary practice in the industry, and all Measuring Equipment,
including all scales, meters and thermometers, shall be certified for accuracy
at least once every Year by an independent service. BASF may, at its option and
expense, install measuring equipment for checking the Measuring Equipment, so
long as such installation does not unreasonably interfere with the operation of
the Esters Unit or the Plant. Each Party shall have the right to be present at
the time of any calibrating, installing, reading, cleaning, changing, repairing,
inspecting, testing or adjusting of the Measuring Equipment or any measuring
equipment used to check the Measuring Equipment. Each Party will maintain all
records, charts and weigh tickets pertaining to deliveries of Raw Materials and
Products hereunder for a period of at least one year (or for the duration of any
contest with respect thereto, if longer). The records from the Measuring
Equipment shall remain the property of Sterling and the records of any
additional measuring equipment installed by BASF shall remain the property of
BASF; provided, however, that, upon request, each Party will submit to the other
Party copies of its records, charts and weigh tickets, together with
calculations therefrom. If any of the Measuring Equipment is found to be
inaccurate to any degree, Sterling shall repair, calibrate and certify such
Measuring Equipment to measure accurately.
          Section 2.07. Storage of Raw Materials and Products. Sterling shall
use the Bulk Storage Tanks for the storage of Raw Materials and Products, as
designated by BASF in the Estimated Delivery, Shipment and Storage Instructions
and the Delivery, Shipment and Storage Instructions, or as otherwise determined
by Sterling. Should any Bulk Storage Tank be taken out of service by Sterling
for repair or service, Sterling will repair such Bulk Storage Tank and place it
back in service as soon as practicable and, pending the completion of such
repair, Sterling shall make available for the storage of Raw Materials and
Products any other suitable bulk storage tanks it then has available at the
Plant. Sterling shall, at all times, physically segregate all Raw Materials
furnished by BASF and all Products produced by Sterling for BASF at the Site or
other storage facilities from all chemicals, packaging materials and products
owned by Sterling or third parties.
          Section 2.08. Hours of Operation. Each Party acknowledges and agrees
that (a) materials handling services will be provided by Sterling on a 24-hours
a Day, 365/366 Days a year basis, (b) laboratory services will be provided by
Sterling only between the hours of 6:30 a.m. and 11:30 p.m. (Houston, Texas
time), Monday through Friday, and (c) customer and scheduling services will be
provided by Sterling only between the hours of 7:30 a.m. and 4:00 p.m. (Houston,
Texas time), Monday through Friday.
          Section 2.09. Termination of Obligations with Respect to the PA Unit.
(a) Except as otherwise provided in this Agreement, BASF’s obligations with
respect to the operation of the PA Unit under the Existing Agreement are
terminated as of the Effective Date; provided, however, that (i) in the event
that BASF fails to pay Sterling the PA Unit Termination Payments

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on or before the dates specified in Section 3.01(a), then, without further
action of the Parties, this Agreement shall automatically be rescinded and
deemed null and void for all purposes and the Existing Agreement shall be
reinstated in accordance with its terms prior to the execution of this
Agreement, (ii) in the event that Sterling restarts the PA Unit and produces PA
for, or sells PA to, any Person other than BASF during the period from the
Effective Date through December 31, 2008, then Sterling will refund 75% of the
PA Unit Termination Payments to BASF on the date that the PA Unit is restarted,
(iii) in the event that Sterling restarts the PA Unit and produces PA for, or
sells PA to, any Person other than BASF during the period from January 1, 2009
through December 31, 2009, then Sterling will refund 50% of the PA Unit
Termination Payments to BASF on the date that the PA Unit is restarted and
(iv) in the event that Sterling restarts the PA Unit and produces PA for, or
sells PA to, any Person other than BASF during the period from January 1, 2010
through December 31, 2010, then Sterling will refund 25% of the PA Unit
Termination Payments to BASF on the date that the PA Unit is restarted. Sterling
may, in its sole discretion, restart the PA Unit and produce PA for, and sell PA
to, itself or any other Person at any time on or after January 1, 2011 and
Sterling shall not be obligated to pay or reimburse BASF for any amount in
connection with such restart and production.
          (b) As of the Effective Date, Sterling owns the PA Unit and is not
subject to any restrictions on its use or disposition pursuant to this Agreement
other than the conditions stated in paragraph (a) above.
          Section 2.10. Termination of Obligations with Respect to the Oxo Unit.
Effective July 31, 2006, BASF exercised its right to terminate its obligations
with respect to the operation of the Oxo Unit under the Existing Agreement.
Subsequently, Sterling provided written notification to BASF pursuant to the
Existing Agreement of its election to permanently close the Oxo Unit. Sterling
will use commercially reasonable efforts to eliminate all costs associated with
the Oxo Unit; provided, however, that (i) any fixed costs associated with the
Oxo Unit that are not eliminated shall be reallocated proportionately across all
operating units at the Site, including the Esters Unit and the PA Unit and
(ii) such costs shall be excluded from any calculation of Costs Savings or the
Component Fixed Costs under this Agreement and, to the extent such costs and
expenses are Allocated Fixed Costs, shall be paid separately from, and in
addition to, the Allocated Fixed Costs Amount.
Article III
Payments; Capital Expenditures
          Section 3.01. Payment for Termination of PA Unit Obligations. (a) In
addition to the other amounts payable by BASF under this Agreement, BASF shall
pay Sterling the PA Unit Termination Payments consisting of (i) the amount of
$3,000,000 being due and payable on or before May 31, 2008, and (ii) the amount
of $205,000 being due and payable on or before August 15, 2008.
          (b) BASF shall pay Sterling $***** on each of April 15, 2008, May 15,
2008, June 15, 2008 and July 15, 2008 (collectively, the “PA Unit
Decontamination Payments”). The PA Unit Decontamination Payments are intended by
the Parties to reimburse Sterling in full for

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all direct fixed costs and variable costs associated with the shut down and
decontamination of the PA Unit. Other than the PA Unit Decontamination Payments
and the Continuing PA Unit Allocated Fixed Costs, from and after the Effective
Date, BASF will have no further obligation to reimburse Sterling for any costs
associated with the PA Unit.
          Section 3.02. Payments. (a) On or before January 1, 2006, BASF paid
***** to Sterling as a prepayment towards certain Fixed Costs. Except as
otherwise provided in this paragraph (a), such prepayment shall not be applied
towards the payment of any invoice issued to BASF pursuant to this Agreement
other than the invoice for Fixed Costs for the final Month of this Agreement
(with any excess being refunded by Sterling to BASF on or before 15 Days after
the expiration or termination of this Agreement). Under no circumstances shall
any interest be payable to BASF by Sterling on the ***** prepayment (unless
Sterling wrongfully refuses to apply such amount towards the final Fixed Costs
invoice or refund any excess). In the event that BASF fails to pay any
undisputed invoice hereunder within five Business Days after receipt of written
notice from Sterling of such delinquent payment, Sterling shall apply all or any
portion of such prepayment towards the payment of such invoice and, if BASF
fails to replenish the prepayment fund within five Business Days after receiving
written notice from Sterling of any such application, Sterling shall be entitled
to immediately cease all production of Products at the Esters Unit and withhold
shipment of any Products until such time as BASF replenishes the *****
prepayment fund through the payment of such invoice in full, and Sterling shall
not have any liability whatsoever to BASF as a result of such cessation of
production and shipping.
          (b) Sterling shall, within 15 Days after the end of each Month, submit
an invoice to BASF (an “Invoice”) showing (i) the quantity of each Product
produced during the immediately preceding Month, (ii) the amount of Fixed Costs
and Variable Costs incurred during such Month, (iii) the amount of Capital
Expenditures and Expansion Capital Expenditures made during such Month and
(iv) any other amounts due Sterling at that time pursuant to Section 3.04.
Except as otherwise provided in Section 3.09(b), BASF shall pay each Invoice on
or before the 15th Day after receipt thereof (or if such Day is not a Business
Day, then on the next Business Day), irrespective of whether any Products were
produced in such Month; provided, however, that if no Products are produced in
any Month, Sterling will use reasonable efforts to minimize the amount of
Variable Costs incurred during such Month. Notwithstanding anything to the
contrary contained in this Agreement, if, in any Year, Sterling’s cost of
providing the engineering services referred to in the Engineering General
Category of Allocated Fixed Costs exceed the amount attributable to such General
Category of Allocated Fixed Costs in the calculation of the Allocated Fixed
Costs Amount for such Year, Sterling may, in its sole discretion, cease
providing engineering services pursuant to this Agreement in such Year unless
and until BASF agrees in writing to reimburse Sterling for the cost of all such
engineering services in such Year.
          (c) From and after the Effective Date, if the aggregate Fixed Costs
charged by Sterling for the Esters Unit in any Year (excluding catalyst
amortization, maintenance turnaround expense and any severance costs connected
with the Esters Unit paid by BASF pursuant to Section 3.06(e)) (the “Component
Fixed Costs”) exceed the Threshold Fixed Costs Amount by more than *****, BASF
may elect to terminate this Agreement; provided, however, that:

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     (i) no such termination will be effective unless BASF has given written
notice to Sterling of its election to terminate this Agreement within 30 Days
after the end of such Year;
     (ii) such termination will become effective on the date specified in such
notice (which may not be prior to 12 months after the date of receipt of such
notice by Sterling) or, if no such date is specified, 12 months after the date
on which such notice is received by Sterling; and
     (iii) BASF pays Sterling the applicable Early Termination Fee on the
effective date of the termination of this Agreement, as determined under clause
(ii) above, provided, however, that:

  (A)   if the Component Fixed Costs for such Year exceed the Threshold Fixed
Costs Amount by at least ***** but less than *****, the applicable Early
Termination Fee shall be reduced by an amount equal to ***** of such excess;    
(B)   if the Component Fixed Costs for such Year exceed the Threshold Fixed
Costs Amount by at least ***** but less than *****, the applicable Early
Termination Fee shall be reduced by an amount equal to ***** of such excess; and
    (C)   if the Component Fixed Costs for such Year exceed the Threshold Fixed
Costs Amount by at least *****, BASF shall not be obligated to pay an Early
Termination Fee.

Notwithstanding anything to the contrary in this paragraph (c), in the event
that (x) BASF provides Sterling with a written notice of its election to
terminate this Agreement and (y) Sterling, by providing written notice to BASF
within 30 Days after its receipt of the termination notice from BASF, elects to
cap BASF’s reimbursement obligation for Component Fixed Costs for such Year at
the Threshold Fixed Costs Amount, then such termination notice from BASF shall
be null and void and of no further force or effect. In such event, Sterling
shall reimburse BASF for any Component Fixed Costs previously paid by BASF in
excess of the Threshold Fixed Costs Amount in that Year and BASF shall not be
required to reimburse Sterling for any Component Fixed Costs beyond the
Threshold Fixed Costs Amount for that Year that remain unpaid.
          Section 3.03. Esters Facility Fee. In addition to the other amounts
payable by BASF under this Agreement, on the first Day of each Quarter,
commencing with the Quarter commencing on the Effective Date, BASF shall pay
Sterling the Esters Facility Fee for such Quarter. Except to the extent
otherwise provided in Section 4.04, the Esters Facility Fee shall be payable in
full irrespective of whether any production occurs at the Esters Unit during
such Quarter or the level of production at the Esters Unit during such Quarter;
provided, however, that if Sterling fails (unless such failure is excused
pursuant to Section 6.02 or is caused by a breach of the Agreement by BASF) to
maintain the production capacity of the Esters Unit over any period of at least
***** consecutive Days at a level of at least ***** of the relevant Monthly
Contract Capacity and BASF requires production in excess of the available
capacity, then the

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Esters Facility Fee shall be reduced for each Quarter (or portion thereof) that
Sterling so fails to maintain the Monthly Contract Capacity. In such cases, the
Esters Facility Fee payable for such Quarter shall be determined by (a) dividing
the Esters Facility Fee by 90 to determine the amount of the Esters Facility Fee
payable for each Day during such Quarter, (b) reducing the amount determined
under clause (a) for each Day during such Quarter when Sterling so failed to
maintain the Monthly Contract Capacity for the relevant Product by multiplying
such amount by the Reduction Factor applicable to such Day and (c) deducting the
aggregate reductions under clause (b) for such Quarter from the Esters Facility
Fee otherwise payable for such Quarter. If the Esters Facility Fee for any
Quarter is reduced pursuant to this Section 3.03 after BASF has paid such Esters
Facility Fee, BASF may deduct the amount overpaid from the next Esters Facility
Fee payable hereunder or, if no further Esters Facility Fees are payable
hereunder, Sterling shall refund such amount to BASF within 15 Days after
receipt of an invoice therefore from BASF.
          Section 3.04. Capital Expenditures and Expansion Capital Expenditures.
(a) By June 30th of each Year, Sterling shall provide a good faith estimate to
BASF of the expected Capital Expenditures and Expansion Capital Expenditures for
the following Year. At least 30 Days prior to the Quarterly Meeting to be held
in October of each Year, Sterling shall submit to BASF a capital budget,
prepared by Sterling in good faith and upon realistic assumptions, for the next
succeeding Year (each, a “Capital Budget”) for those Capital Projects that
Sterling deems necessary (i) to maintain the reliable and safe operation of the
Esters Unit at Capacity, and (ii) to maintain the Esters Unit in compliance with
all applicable Laws and permits. Each Capital Budget shall include a description
of each Capital Project in reasonable detail and an estimate of the Capital
Expenditures anticipated to be made in connection with such Capital Project.
Prior to commencing any Capital Project, Sterling shall, to the extent
practicable under the circumstances, consult with BASF and give BASF the
opportunity to comment on such proposed Capital Project or propose alternative
approaches to such Capital Project; provided, however, that (A) except as
otherwise provided in paragraph (b) below, in the event that Sterling and BASF
disagree on whether a Capital Project should be pursued or on the approach to
any Capital Project, *****, and (B) except as otherwise specifically provided in
this Agreement, BASF shall not be liable to Sterling for any Damages directly or
indirectly arising out of Sterling’s use or implementation of BASF’s comments to
such Capital Project. In addition, in the event of an emergency, Sterling may
conduct Capital Projects and make Capital Expenditures, irrespective of whether
or not any such Capital Project was included in any previous Capital Budget, if
Sterling, in its sole discretion, deems such Capital Project and Capital
Expenditures necessary to maintain the Esters Unit in accordance with the
standards provided in this paragraph (a) or the standard of care described in
Section 4.01; provided, however, that Sterling shall inform BASF via facsimile
or E-Mail of the nature of the emergency and the expected expenditures within 72
hours after it makes such determination. BASF shall reimburse Sterling for *****
of all Capital Expenditures made for each Capital Project. In the event that
Sterling’s engineering services are required in connection with any Capital
Project or Expansion Project, Sterling shall provide such engineering services
at BASF’s sole cost and expense, and such engineering services shall not be
considered as being among the engineering services referred to in the Allocated
Fixed Costs Table.

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          (b) Notwithstanding anything to the contrary contained in this
Section 3.04, during the period commencing on January 1, 2011 and continuing
thereafter until the expiration or termination of this Agreement, BASF shall
have the right to elect to not proceed with any Capital Project the primary
purpose of which is to maintain the reliable operation of the Esters Unit at
Capacity; provided, however, that BASF elects to not renew this Agreement for an
Additional Term prior to January 1, 2011 and, provided further, that if BASF
elects to not proceed with any such Capital Project, Sterling shall have the
option to either:
     (i) proceed with such Capital Project, in which event BASF shall reimburse
Sterling for, (A) if such Capital Project was initially submitted for approval
at any time before January 1, 2011, ***** of the actual Capital Expenditures
made to complete such Capital Project, (B) if such Capital Project was initially
submitted for approval at any time on or after January 1, 2011 but before
January 1, 2012, ***** of the actual Capital Expenditures made to complete such
Capital Project, or (C) if such Capital Project was initially submitted for
approval at any time on or after January 1, 2012 but before January 1, 2013,
***** of the actual Capital Expenditures made to complete such Capital Project,
in each case, irrespective of whether such Capital Expenditures are made during
the Year used to determine the applicable percentage of reimbursement and
irrespective of whether such Capital Expenditures are made prior to or after the
expiration of this Agreement (but excluding any Capital Expenditures made on or
after January 1, 2014); or
     (ii) not proceed with such Capital Project, in which event BASF shall make
a one-time payment to Sterling in an amount equal to (A) if such Capital Project
was initially submitted for approval at any time before January 1, 2011, *****
of the estimated Capital Expenditures required to complete such Capital Project,
(B) if such Capital Project was initially submitted for approval at any time on
or after January 1, 2011 but before January 1, 2012, ***** of the estimated
Capital Expenditures required to complete such Capital Project, or (C) if such
Capital Project was initially submitted for approval at any time on or after
January 1, 2012 but before January 1, 2013, ***** of the estimated Capital
Expenditures required to complete such Capital Project; provided, however, that
if BASF disputes the necessity of any such Capital Project or the estimated
Capital Expenditures required to complete any such Capital Project, such dispute
shall be resolved in accordance with the dispute resolution procedures set forth
in Section 8.09.
Any payments made by BASF pursuant to this paragraph (b) shall be excluded from
the obligation of Sterling to reimburse BASF for undepreciated capital pursuant
to paragraph (d) below.
          (c) At any time during the term of this Agreement, BASF may, at its
option and at its sole cost and expense, elect to increase the Capacity of the
Esters Unit through Expansion Projects. BASF shall be responsible for any and
all Expansion Capital Expenditures and other costs associated with each such
Expansion Project and, to the extent such costs and expenses are Allocated Fixed
Costs, shall be paid separately from, and in addition to, the Allocated Fixed
Costs Amount; provided, however, that any payments made to Sterling by BASF for
Expansion Capital Expenditures under this paragraph (c) shall be excluded from
the obligation of Sterling to reimburse BASF for undepreciated capital pursuant
to paragraph (d) below. BASF shall also be

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responsible for any and all Fixed Costs directly attributable to the increased
Capacity of the Esters Unit by virtue of any Expansion Project and (i) the
Threshold Fixed Costs Amount shall be increased by the aggregate amount of such
Fixed Costs, (ii) to the extent such costs and expenses are Allocated Fixed
Costs, the portion of the Allocated Fixed Costs Amount pertaining to each
relevant General Category of Allocated Fixed Costs shall be increased by the
applicable portion of such costs and expenses and (iii) to the extent such
additional Fixed Costs are not otherwise excluded from the definition of
Component Fixed Costs, such additional Fixed Costs shall thereafter be included
in the calculation of the Component Fixed Costs. Upon mechanical completion of
any Expansion Project, the Esters Facility Fee shall be increased as provided in
the definition of the Esters Facility Fee.
          (d) Subject to Section 7.01(d), within 90 Days after the expiration or
termination of this Agreement, Sterling shall pay BASF an amount equal to the
undepreciated capital paid by BASF for each Capital Project (excluding any
amounts paid by BASF pursuant to paragraphs (b) or (c) above), based on a
straight line, ***** life, mid-year convention depreciation as defined by the
U.S. Federal Income Tax Code, calculated from the completion date of each
relevant Capital Project; provided, however, that:
     (i) if (A) BASF elects to terminate this Agreement pursuant to
Section 3.02(c), (B) either Party elects to terminate this Agreement pursuant to
Section 6.02(e) or (C) Sterling elects to terminate this Agreement pursuant to
Section 7.01(c) based on a breach by BASF of any material covenant, agreement,
term, provision or condition of this Agreement, the amount of undepreciated
capital paid by BASF for all Capital Projects shall be deemed to be zero and no
amount shall be payable by Sterling to BASF pursuant to this paragraph (d);
     (ii) if BASF elects to terminate this Agreement pursuant to
Section 7.01(b), (A) the amount of undepreciated capital shall be the lower of
(x) the amount of the applicable Early Termination Fee and (y) the amount of
undepreciated capital that would have existed on December 31, 2013 if this
Agreement had continued until that date and (B) on each anniversary of the
actual date of termination of this Agreement, Sterling shall pay BASF an amount
equal to the depreciation of such capital that would have been recognized during
the immediately preceding 12-month period (using the ***** depreciation schedule
described above) if the first such payment had occurred on December 31, 2014
until such time as the total amount payable by Sterling under clause (A) above
has been paid in full;
     (iii) if BASF elects to terminate this Agreement pursuant to
Section 7.01(c) based on a breach by Sterling of any material covenant,
agreement, term, provision or condition of the Agreement, Sterling shall pay
BASF an amount equal to such undepreciated capital as of the date of termination
within 30 Days after the date of such termination; and
     (iv) if either Party elects to terminate this Agreement pursuant to
Section 4.04(e), the amount of undepreciated capital payable to BASF in
connection with the termination of this Agreement shall be determined pursuant
to that Section.

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In the event that Sterling fails to pay any amount when due under this paragraph
(d), such amount shall bear interest at the Applicable Interest Rate, accruing
each Day from the Day such amount was originally due until the Day such amount
is paid in full.
          Section 3.05. Maintenance Expenditures. By June 30th of each Year,
Sterling shall provide a good faith estimate to BASF of the expected maintenance
expenses for the following Year. At least 30 Days prior to the Quarterly Meeting
to be held in October of each Year, Sterling shall submit to BASF a maintenance
expense budget, prepared by Sterling in good faith and upon realistic
assumptions, for the next succeeding Year (each, a “Maintenance Budget”) for
such maintenance as Sterling determines is required to maintain the Esters Unit
in accordance with the standard of care described in Section 4.01. Sterling
shall provide BASF with monthly reports regarding maintenance expenses. Unless
otherwise agreed by the Parties, all maintenance expenses shall be included in
Fixed Costs for purposes of this Agreement.
          Section 3.06. Cost Savings; Manpower Reductions. (a) The Parties shall
cooperate in investigating, evaluating and implementing mutually agreeable
methods to reduce Direct Fixed Costs, Variable Costs, Capital Expenditures and
Expansion Capital Expenditures. On or before January 31 of each year, commencing
with January 31, 2009, Sterling shall submit a statement to BASF showing in
reasonable detail any reductions in Direct Fixed Costs or Variable Costs (“Cost
Savings”) achieved in the immediately preceding calendar year compared to the
Direct Fixed Costs in the Maintenance General Category and the Direct Fixed
Costs in the Materials Handling General Category for the Esters Unit incurred
when such costs were at their lowest in any calendar year after 2003, the Direct
Fixed Costs in the Personnel General Category and the Direct Fixed Costs in the
Other Direct General Category for the Esters Unit incurred during 2005, and the
Variable Costs for the Esters Unit incurred when such costs were at their lowest
in any calendar year after 2006; provided, however, that:
     (i) for purposes of determining whether any Cost Savings attributable to
PPI Adjusted Fixed Costs were achieved in any Year, the aggregate amount of PPI
Adjusted Fixed Costs incurred in the earlier period shall be adjusted as of
December 31 of each year after such PPI Adjusted Fixed Costs were actually
incurred by the PPI Factor for such subsequent year (e.g., if PPI Adjusted Fixed
Costs incurred in 2010 were being compared to PPI Adjusted Fixed Costs incurred
in 2008, the PPI Adjusted Fixed Costs incurred in 2008 would be adjusted based
on the PPI Factor for 2009 and adjusted again based on the PPI Factor for 2010);
     (ii) the amounts shown in each such statement shall be split into the
General Categories of Direct Fixed Costs and Variable Costs and Cost Savings
shall be determined for each General Category of Direct Fixed Costs and each
General Category of Variable Costs independently;
     (iii) the Variable Costs for each calendar year shall be based on per pound
usages for each component of Variable Costs with the Cost Savings derived from
any improvements in usages being calculated using current market prices at the
time of determination; and

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     (iv) the initial per pound usages for each component of Variable Costs for
the Esters Unit will be determined under paragraph (c) below.
Each statement delivered by Sterling shall set forth (A) the amount of Direct
Fixed Costs in each General Category of Direct Fixed Costs during the
immediately preceding year, (B) the amount of Variable Costs in each General
Category of Variable Costs during the immediately preceding year, (C) the amount
of Direct Fixed Costs in each of the Maintenance General Category and the
Materials Handling General Category when the Direct Fixed Costs in that General
Category were at their lowest in any calendar year after 2003, (D) the amount of
Direct Fixed Costs in each of the Personnel General Category and the Other
Direct General Category for 2005, and (E) the amount of Variable Costs in each
General Category of Variable Costs for the Esters Unit when the Variable Costs
in that General Category were at their lowest in any calendar year after 2006,
in each case, subject to the adjustments described above. For example, the
statement delivered on or before January 31, 2010 will (1) compare the amount of
Direct Fixed Costs in the Maintenance General Category of Direct Fixed Costs and
the Materials Handling General Category of Direct Fixed Costs (by General
Category) in 2009 to the lowest amount of such Direct Fixed Costs (by General
Category) in any calendar year after 2003 (after the above-described
adjustments), which may be different calendar years for different General
Categories of Direct Fixed Costs, (2) compare the amount of Variable Costs (by
General Category) for the Esters Unit in 2009 to the lowest amount of Variable
Costs (by General Category) in any calendar year after 2006 (after the
above-described adjustments), which may be different calendar years for
different General Categories of Variable Costs, and (3) compare the amount of
Direct Fixed Costs in the Personnel General Category of Direct Fixed Costs and
the Other Direct General Category of Direct Fixed Costs (by General Category) in
2009 to the Direct Fixed Costs in those General Categories in 2005 (after the
above-described adjustments).
          (b) Within 15 Days after receipt of such statement, BASF will pay
Sterling an amount equal to (i) ***** of the amount by which the Direct Fixed
Costs included in the Maintenance General Category in the earlier calendar year
shown in the statement exceed the Direct Fixed Costs included in the Maintenance
General Category in the later calendar year shown in such statement, plus (ii)
***** of the amount by which the Direct Fixed Costs included in the Materials
Handling General Category in the earlier calendar year shown in the statement
exceed the Direct Fixed Costs included in the Materials Handling General
Category in the later calendar year shown in such statement, plus (iii) ***** of
the amount by which the Direct Fixed Costs included in the Personnel General
Category in 2005 exceed the Direct Fixed Costs included in the Personnel General
Category in the later calendar year shown in such statement plus (iv) ***** of
the amount by which the Direct Fixed Costs included in the Other Direct General
Category in 2005 exceed the Direct Fixed Costs included in the Other Direct
General Category in the later calendar year shown in such statement plus (v)
***** of the amount by which the per pound usage of any component of Variable
Costs in the earlier calendar year shown in the statement exceeds the per pound
usage of such component of Variable Costs in the later calendar year shown in
such statement times the market price for such component of Variable Costs at
the time of determination. Sterling shall employ consistent accounting practices
from year to year.

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          (c) Notwithstanding anything to the contrary contained in this
Section 3.06, the per pound usage of each component of Variable Costs for the
Esters Unit for calendar year 2007 shall be deemed to be (i) the per pound usage
of such component of Variable Costs experienced during January 2008 (or if any
Raw Material or Ancillary Raw Material was not consumed during January 2008, the
per pound usage of such Raw Material or Ancillary Raw Material experienced
during the most recent Month prior to January, 2008 during which such Raw
Material or Ancillary Raw Material was consumed) or (ii) such other per pound
usage as the Parties shall mutually agree; provided, however, that if the
Parties fail to agree on an alternative per pound usage of any component of
Variable Costs for the Esters Unit under this clause (ii) on or before May 31,
2008, the per pound usage of such component of Variable Costs shall be the per
pound usage determined under clause (i).
          (d) For purposes of calculating Cost Savings under this Section 3.06,
if a Force Majeure Event results in the suspension of all or any of the
operations at the Esters Unit in any Month (whether in the current Year or any
prior Year), the Direct Fixed Costs and Variable Costs for such Month shall be
deemed to be the same as the Direct Fixed Costs and Variable Costs experienced
in the most recent preceding full Month that was not affected by a Force Majeure
Event.
          (e) In addition to the amounts (if any) payable by BASF hereunder for
Cost Savings, in the event that any manpower reduction occurs at the Site,
(i) BASF shall pay Sterling an amount equal to ***** of the severance costs
incurred in connection with such manpower reduction that will result in direct
labor costs savings for the Esters Unit and (ii) BASF shall pay Sterling its
allocable portion of any severance costs incurred in connection with such
manpower reduction that will result in lower Direct Fixed Costs for the Esters
Unit, such allocation to be based on the same percentages as are then used to
allocate other Direct Fixed Costs to the Esters Unit; provided, however, that
any reduction in salaries and employee benefits resulting from any such manpower
reduction shall be excluded from any subsequent comparisons of Direct Fixed
Costs and Variable Costs.
          (f) Notwithstanding anything to the contrary contained in this
Section 3.06, if any Cost Savings are achieved in any Year due to a reduction in
the Direct Fixed Costs to the Esters Unit following the commissioning of a new
operating unit at the Site, for purposes of any subsequent calculations of Cost
Savings, each prior Year that benefited from such reduction in Direct Fixed
Costs shall be calculated as if such reduction in Direct Fixed Costs had not
occurred. For example, if a ***** reduction in the Maintenance General Category
of Direct Fixed Costs occurred due to such a reallocation in 2009 and in 2010
the amount of Direct Fixed Costs in the Maintenance General Category also
reflected such ***** reduction, then, for purposes of calculating Cost Savings
in 2011, the amount of Direct Fixed Costs in the Maintenance General Category
incurred in both 2009 and 2010 would be deemed to be ***** higher than those
actually incurred.
          (g) Notwithstanding anything to the contrary contained in this
Agreement, the per pound usages of each component of Variable Costs shall be
used solely for purposes of determining whether Sterling has achieved any Cost
Savings in a given Year and BASF shall pay the actual amounts of Variable Costs
incurred during each Month.

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          Section 3.07. Taxes. In addition to the other amounts payable by BASF
under this Agreement, all sales, use and excise taxes and other taxes and
similar charges which Sterling may be required to pay and which are levied
directly upon the receipt or storage by Sterling of Raw Materials, the
production or storage of Products or the sale or delivery of Products hereunder
(including any “Superfund” tax and any other environmental tax or like charge
assessed or imposed by any Governmental Authority but excluding franchise tax or
any tax levied against the income or gross receipts of Sterling) shall be paid
by BASF (or if paid by Sterling, reimbursed by BASF within 15 Days after receipt
of an invoice therefore, or if such Day is not a Business Day, then on the next
Business Day).
          Section 3.08. Wire Transfers, Etc. All sums and amounts payable under
this Agreement shall be paid in United States dollars by wire transfer or
electronic funds transfer of immediately available funds to such bank 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 of the payor payable to the order of
the payee and mailed to the payee in the manner and at the address set forth in
Section 8.01). Whenever in this Agreement BASF is required to pay or reimburse
Sterling upon receipt of invoice, or otherwise when no due date for payment is
specifically provided, payment shall be due as provided in Section 3.02(b) and
shall be made in the manner set forth in this Section 3.08.
          Section 3.09. Late Payments. (a) In the event that either Party fails
to pay any amount when due hereunder, such amount shall bear interest at the
Applicable Interest Rate, accruing each Day from the Day such amount was
originally due until the Day such amount is paid in full. With respect to any
delinquent payment by BASF, unless such amount is the subject of a good faith
dispute between the Parties pursuant to paragraph (b) below, Sterling shall have
the rights provided in Section 3.02(a). Sterling may exercise its rights under
Section 3.02(a), and either Party may exercise its rights under this paragraph
(a), at any time and from time to time during the continuance of this Agreement.
          (b) Notwithstanding anything to the contrary contained in paragraph
(a) above, BASF may, in good faith, contest the validity or amount of any amount
included in any invoice submitted by Sterling pursuant to this Article III, and
may defer the payment of any contested portion thereof during the pendency of
such contest without defaulting under this Agreement; provided, however, that
BASF gives written notice to Sterling of its contest of such amount prior to the
time the relevant invoice is due and payable. In the event that BASF withholds
the payment of any contested amount and it is ultimately determined that such
amount is due and payable to Sterling, BASF shall pay such amount to Sterling
immediately after such determination, together with interest thereon at the
Applicable Interest Rate accruing each Day from the Day such amount was
originally due until the Day such amount is paid in full. Payment of any amount
under this Article III shall not prejudice the right of BASF to dispute or
question the correctness thereof so long as BASF notifies Sterling that it is
contesting the correctness of such amount prior to its payment thereof.

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Article IV
Operation of the Esters Unit and Related Matters
          Section 4.01. Operational Practices. Sterling shall operate and
maintain the Esters Unit and perform its other obligations hereunder, including
material handling and distribution, using operating procedures equivalent to or
better than (a) the standard of care it uses in operating and conducting
manufacturing at the Plant and performing obligations for its own account and
(b) the standard of care a prudent operator would use in operating and
manufacturing at a unit similar to the Esters Unit. Subject to the terms and
conditions of this Agreement, Sterling shall operate the Esters Unit in a manner
designed to fulfill its obligations to deliver Products hereunder that meet the
Product Specifications in accordance with the Estimated Delivery, Shipment and
Storage Instructions, the Delivery, Shipment and Storage Instructions and any
additional delivery, shipment and storage instructions issued by BASF pursuant
to Section 2.01(b); provided, however, that such operational practices do not
violate this Agreement or any applicable Law and are not inconsistent with the
prudent operation of the Esters Unit. Except for amounts being contested in good
faith, Sterling shall pay, as they become due, all costs and expenses incurred
to trade creditors in the operation of the Esters Unit which, if remaining
unpaid, might become a Lien on the Esters Unit.
          Section 4.02. Plant Visits; BASF Liaison. (a) Sterling shall grant
BASF personnel access to the Esters Unit at reasonable times and on reasonable
notice; provided, however, that such visits are consistent with Sterling’s
contractual obligations under licenses or sublicenses to which it is a party.
BASF shall cause all of its personnel to comply with Sterling’s safety and
reasonable confidentiality procedures and policies.
          (b) BASF shall have the option, at its sole cost and expense, to
appoint a liaison person (the “BASF Liaison”) for the Esters Unit, and the BASF
Liaison shall be entitled to make recommendations to Sterling regarding the
maintenance, upkeep and operations of the Esters Unit; provided, however, that
Sterling shall not be under any obligation to adopt or implement any
recommendations made by the BASF Liaison that Sterling, in its sole discretion,
believes may adversely affect the health, safety or environmental performance of
the Esters Unit or may increase Sterling’s costs to operate or maintain the
Esters Unit. If Sterling does not wish to adopt or implement any recommendation
made by the BASF Liaison solely because Sterling believes that such adoption or
implementation may increase Sterling’s costs to operate or maintain the Esters
Unit, Sterling shall adopt or implement such recommendation but (i) any increase
in costs resulting from such adoption or implementation shall be paid by BASF,
(ii) the Threshold Fixed Costs Amount shall be increased by the amount of such
costs, (iii) such costs shall be excluded from any calculation of Costs Savings,
(iv) to the extent such costs and expenses are Allocated Fixed Costs, the
portion of the Allocated Fixed Costs Amount pertaining to each relevant General
Category of Allocated Fixed Costs shall be increased by the applicable portion
of such costs and expenses, and (v) to the extent such additional Fixed Costs
are not otherwise excluded from the definition of Component Fixed Costs, such
additional Fixed Costs shall thereafter be included in the calculation of the
Component Fixed Costs. Sterling shall provide the BASF Liaison with office space
at the Site and grant the BASF Liaison access to the Esters Unit at all
reasonable times to observe and inspect, and to perform safety, manufacturing

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and quality studies; provided, however, that such activities do not materially
disrupt the operation of the Esters Unit or Sterling’s other operations at the
Site.
          Section 4.03. Insurance. During the term of this Agreement, Sterling
shall maintain property damage and liability insurance on the Esters Unit and
those parts of the Plant which serve the Esters Unit in types and amounts, and
against such risks, substantially similar to those carried and insured against
as of the Effective Date; provided, however, that in any event Sterling shall
not be required to maintain business interruption or terrorism insurance
coverage. BASF shall reimburse Sterling for any amounts paid by Sterling that
are credited towards the deductible under Sterling’s liability insurance policy
or property damage/business interruption policy to the extent the underlying
event (a) is directly related to the Esters Unit, any Raw Material, Ancillary
Raw Material or Product or any other matter under this Agreement and
(b) Sterling is not required to indemnify BASF for such underlying event
pursuant to Section 6.01(a). Any payments required to be made by BASF pursuant
to this Section 4.03 (i) shall be made by BASF within 15 Days after receipt of
an invoice therefore from Sterling, or if such Day is not a Business Day, then
on the next Business Day, (ii) shall be excluded from any calculation of Costs
Savings or the Component Fixed Costs under this Agreement and (iii) to the
extent such costs and expenses are Allocated Fixed Costs, shall be paid
separately from, and in addition to, the Allocated Fixed Costs Amount. BASF may
carry additional insurance, at its sole discretion and cost.
          Section 4.04. Damage or Destruction. (a) If, at any time during the
term of this Agreement, if all or any part of the Esters Unit or any Dependent
Facility is damaged or destroyed by fire explosion, flood, hurricane, windstorm
or other casualty of any kind or nature (including any insured or uninsured
casualty), ordinary or extraordinary, foreseen or unforeseen, Sterling shall
either (i) at its sole cost and expense, and irrespective of whether the
insurance proceeds, if any, are sufficient for such purpose, within ***** Days
after the date of such damage or destruction, commence repairing, altering,
restoring, replacing or rebuilding the Esters Unit or such Dependent Facility to
substantially the same condition as existed immediately prior to such damage or
destruction, and thereafter continue with such work with reasonable diligence,
or (ii) elect, by providing BASF with written notice of such election within
***** Days after the date of such damage or destruction, not to repair, alter,
restore, replace or rebuild the Esters Unit or such Dependent Facility.
          (b) If Sterling elects to repair, alter, restore, replace or rebuild
the Esters Unit or such Dependent Facility, (i) Sterling shall have the right to
require that all insurance proceeds from policies maintained by Sterling and
BASF providing coverage for the relevant casualty be applied to the payment of
all costs and expenses related thereto, and (ii) the Parties’ respective
obligations under this Agreement shall continue, but Sterling shall bear all
costs of such repair in excess of the proceeds of insurance and shall have the
right to fully depreciate such repair costs.
          (c) If Sterling elects not to repair, alter, restore, replace or
rebuild the Esters Unit or such Dependent Facility, BASF may elect, at its sole
cost and expense, to pay the cost to repair, alter, restore, replace or rebuild
the Esters Unit or such Dependent Facility; provided, however, that BASF
exercises such right within 120 Days following receipt of written notice of
Sterling’s election not to do so and, provided further, that, notwithstanding
any such payment, BASF shall

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not acquire any right, title or interest in or to the Esters Unit or such
Dependent Facility. If BASF exercises such election, Sterling shall apply all
insurance proceeds from policies maintained by Sterling that provided coverage
for the relevant casualty to the payment of all costs and expenses related to
such repair, alteration, restoration, replacement or rebuilding.
          (d) In the event that all or any portion of the Esters Unit or any
Dependent Facility is damaged or destroyed after the Effective Date by fire or
other casualty, and either (i) neither Party has elected to repair, alter,
restore, replace or rebuild the Esters Unit, such Dependent Facility or relevant
portion thereof or (ii) Sterling has elected to repair, alter, restore, replace
or rebuild the Esters Unit, such Dependent Facility or relevant portion thereof
but has not begun to repair, alter, restore, replace or rebuild the Esters Unit,
such Dependent Facility or relevant portion thereof within six months following
such damage or destruction (or at any time thereafter fails to use reasonable
efforts to continue to repair, alter, restore, replace or rebuild the Esters
Unit, such Dependent Facility or relevant portion thereof), then the Esters
Facility Fee shall be reduced for each Quarter, or portion thereof, during which
Sterling fails to maintain the Monthly Contract Capacity. In such cases, the
Esters Facility Fee payable for each such Quarter shall be determined by
(A) dividing the Esters Facility Fee by 90 to determine the amount of the Esters
Facility Fee payable for each Day during such Quarter, (B) reducing the amount
determined under clause (A) for each Day during such Quarter when Sterling so
failed to maintain the Monthly Contract Capacity by multiplying such amount by
the Reduction Factor applicable to such Day and (C) deducting the aggregate
reductions under clause (B) for such Quarter from the Esters Facility Fee
otherwise payable for such Quarter. If the Esters Facility Fee for any Quarter
is reduced pursuant to this paragraph (d) after BASF has paid such Esters
Facility Fee, BASF may deduct the amount overpaid from the next Esters Facility
Fee payable hereunder or, if no further Esters Facility Fees are payable
hereunder, Sterling shall refund such amount to BASF within 15 Days after
receipt of an invoice therefore from BASF.
          (e) If neither Party elects to repair, alter, restore, replace or
rebuild the Esters Unit, such Dependent Facility or the relevant portion thereof
and the damage or destruction involves more than ***** of the Esters Unit or
causes the Esters Unit to be incapable of producing Products at greater than
***** of Capacity, either Party may terminate this Agreement with 30 Days’ prior
written notice to the other Party and BASF may cease paying the Esters Facility
Fee after the occurrence of the relevant damage or destruction. In the event of
any such termination of this Agreement, the amount of undepreciated capital paid
by BASF for all Capital Projects shall be deemed to be an amount equal to the
lesser of (i) the amount of such undepreciated capital as of the date of such
damage or destruction and (ii) the amount recovered by Sterling under its
insurance policies attributable to the damage to or destruction of the Esters
Unit minus the portion of the deductible under such insurance policies
attributable to such damage to or destruction of the Esters Unit times a
fraction, the numerator of which is the amount of such undepreciated capital and
the denominator of which is the value of the Esters Unit prior to such damage or
destruction.
          Section 4.05. Hazards. Each Party acknowledges that Ancillary Raw
Materials, Raw Materials and Products may be, or become, considered Hazardous
Materials, and that it is familiar with the hazards of Ancillary Raw Materials,
Raw Materials and Products, their respective applications and the containers in
which they are shipped. Each Party shall inform

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and train its employees and customers with respect to all such hazards. In
addition, Sterling shall (a) warn all persons at the Plant, including its
employees, agents and invitees, of the health and environmental hazards
associated with Ancillary Raw Materials, Raw Materials and Products, their
respective applications and the containers in which they are shipped (including
proper disposal methods), (b) advise all such persons at the Plant who handle or
might otherwise come into contact with such materials of all applicable
precautions and safety measures to be employed at the Plant when handling or
storing such materials and (c) cause such precautions and safety measures to be
employed at the Plant in accordance with all safety, health and environmental
regulations.
          Section 4.06. Compliance with Laws. Nothing in this Agreement is
intended to, or shall be deemed or construed as being intended to, authorize or
require Sterling to violate any Law (including any Environmental Law). Each
Party shall comply with all Laws (including Environmental Laws) applicable to
the Parties, the transactions contemplated by this Agreement or the preservation
of public or Plant health or safety, including the Occupational Safety and
Health Act of 1970, and the regulations issued thereunder, as the same may be
amended from time to time. In accordance with the foregoing provision, but not
by way of limitation, it is specifically understood that BASF is an Equal
Opportunity Employer and Sterling warrants that Sterling complies with the Fair
Labor Standard Act of 1938, as amended. Sterling agrees that, if this Agreement
is construed to be a subcontract within the meaning of the Rules and Regulations
approved by the United States Secretary of Labor pursuant to Executive Order
11246, as amended, the Vietnam Era Veterans Readjustment Assistance Act of 1974,
as amended, or the Rehabilitation Act of 1973, as amended, or of the regulations
issued pursuant to Executive Order 11625, the provisions of the applicable
regulations as well as the Equal Opportunity and Nondiscrimination provision of
Section 202 of Executive Order 11246 shall be incorporated herein by reference
and shall be binding upon Sterling as part of this Agreement. Sterling shall
label and placard all shipments of Products in compliance with all applicable
Laws.
Article V
Additional Agreements
          Section 5.01. Title. (a) Sterling expressly does not by the terms of
this Agreement, sell, transfer or assign to BASF any right, title or interest in
the Esters Unit, the PA Unit or the Plant or any assets or properties of
Sterling, and nothing in this Agreement shall be deemed to convey to BASF any
legal or beneficial ownership in or to all or any portion of the Esters Unit,
the PA Unit, the Plant or any other assets or properties of Sterling. Title to
all Raw Materials and Product shall at all times remain in BASF. Title to
Product shall vest in BASF as of the time of its production. Sterling shall not
impose or permit to be imposed upon any of the Raw Materials or Products within
the custody and control of Sterling any Liens other than those created by,
through or in favor of BASF. Notwithstanding anything to the contrary contained
in any prior agreement or any understanding between the Parties (including the
Existing Agreement), upon the execution of this Agreement, title to any Raw
Materials or Product on hand (at the Site, at terminals, in route and elsewhere)
shall vest in BASF as if such Raw Materials or Product were supplied pursuant to
the terms of this Agreement.

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          (b) Sterling hereby authorizes BASF to file any and all UCC financing
statements that are necessary to evidence or perfect BASF’s ownership of all
rights, title and interests in the Raw Materials and Products referred to in
Section 5.01(a). Upon the request of BASF, Sterling shall execute and deliver to
BASF any other notices as may be reasonably requested by BASF to reflect and
file of record BASF’s ownership of all rights, title and interests in and to all
Raw Materials and Products referred to in Section 5.01(a).
          Section 5.02. Sale or Transfer of Interest in the Esters Unit. During
the term of this Agreement, Sterling may not sell or transfer an interest in all
or any part of the Esters Unit to a Competitor without the prior written consent
of BASF, which consent will not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, (a) Sterling may sell or otherwise
dispose of the Esters Unit to a Competitor as part of the sale, transfer or
other disposition of all or substantially all of the Plant’s assets, directly or
indirectly, or as a part of the merger, consolidation, reorganization or sale of
all or substantially all of the assets or equity of Sterling (each, a “Plant
Disposition”), and (b) except as set forth in Section 5.01, Sterling may grant
Permitted Encumbrances and other Liens in or on the Esters Unit to secure any
indebtedness of Sterling, now existing or hereafter arising, and any holder of
such indebtedness may foreclose upon all or any portion of the Esters Unit, sell
such assets in lieu of foreclosure and otherwise exercise all rights or remedies
they may have with respect thereto, without restriction hereunder, and any
purchaser on foreclosure or sale in lieu of foreclosure may take such assets
free from such restrictions.
          Section 5.03. Books and Records; Audits. Sterling shall maintain
accurate records and books of account with regard to the operation of the Esters
Unit and the transactions contemplated by this Agreement, and furnish a report
thereon to BASF, in a form reasonably acceptable to BASF, within 21 Days
following the end of each Month. All accounting and reporting for the operation
of the Esters Unit and the transactions contemplated by this Agreement will be
in accordance with GAAP. Upon reasonable request, each Party shall provide the
other Party with copies of all purchase orders, invoices and other backup data
pertaining to any costs or expenses related to this Agreement, and the Party
receiving such information shall maintain the confidentiality of all such
documents and information in accordance with the provisions of Section 5.06.
          (b) Upon reasonable request, Sterling shall provide BASF with access
to all records pertaining to the operation of the Esters Unit and the
transactions contemplated by this Agreement, which records shall be subject to
audit by an independent certified public accounting firm reasonably acceptable
to Sterling at any reasonable time during, or within the two years following,
the period being audited. Any audit will be at BASF’s expense. In no event shall
BASF initiate more than one audit each Year. Each auditing firm will maintain
the confidentiality of Sterling’s accounts and records, and will either verify
the correctness thereof or advise both Parties of the composite adjustments
required to correct discrepancies for the period audited. Any discrepancies
shall be corrected by appropriate payments or credits, as the case may be, at
the earliest practicable time, in the amount thereof. If the total amount of
such discrepancies exceeds ***** for any Year, the Party owing such amount shall
also pay the other Party interest on the amount of such discrepancies at the
Applicable Interest Rate accruing each

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Day from the Day such amount was originally due (or paid) until the Day such
amount is paid (or refunded) in full.
          (c) Upon the written request of BASF, Sterling shall provide BASF
reasonable suitable temporary office accommodations at the Site for a limited
number of BASF personnel or representatives to audit or review records
maintained by Sterling pursuant to this Agreement.
          Section 5.04. Meetings. (a) At each Quarterly Meeting, representatives
of the Parties shall review the operations of the Esters Unit and such other
matters as may be determined to be appropriate by the Parties. At the Quarterly
Meeting to be held in October of each Year, the Parties shall (i) review the
Capital Budget and the Maintenance Budget for the ensuing Year, (ii) review the
Fixed Costs and Variable Costs for the immediately preceding 12-month period and
(iii) establish a budget for Fixed Costs and Variable Costs for the following
12-month period; provided, however, that no Capital Budget, Maintenance Budget
or budget for Fixed Costs or Variable Costs shall reduce, modify or limit in any
way BASF’s obligation to pay the actual Capital Expenditures, Expansion Capital
Expenditures, maintenance expenditures, Fixed Costs or Variable Costs incurred
pursuant to this Agreement.
          (b) Sterling shall make its employees and other representatives
available to BASF on reasonable request to discuss the present or proposed
operations of the Esters Unit, so long as such availability does not disrupt the
operation of the Esters Unit or the Plant. Representatives of the Parties shall
meet at a mutually acceptable time and place if either Party gives reasonable
prior written notice to the other Party of its request for a meeting.
          Section 5.05. Technical Advice. (a) BASF shall advise Sterling
regarding technical questions arising in connection with the operation of the
Esters Unit, and shall provide assistance to Sterling in the event of any
disturbances at the Esters Unit. Any advice given by BASF pursuant to this
Section 5.05 shall utilize BASF’s technical knowledge and experience, to the
extent that they are suitable for the operation of the Esters Unit; provided,
however, that BASF shall not be obligated to provide Sterling with technical
knowledge or experience acquired by BASF during the term of this Agreement which
BASF, in its reasonable judgment, considers to be a considerable improvement or
in respect of which BASF has filed a patent application. Notwithstanding
anything to the contrary contained in this Section 5.05, BASF shall be under no
obligation to provide technical advice that would require in-house work by BASF
or its representatives, including laboratory or pilot plant tests. BASF shall be
available to discuss important technical questions at a meeting between
technical experts of BASF and Sterling, either in Ludwigshafen, Germany or in
Texas City, Texas by mutual agreement and at suitable intervals. In the event
that engineering services of BASF are required in connection with Capital
Projects or Expansion Projects, BASF shall, at its sole option and at its sole
cost and expense, provide such engineering services.
          (b) BASF shall render the services contemplated by this Section 5.05
in the best interests of Sterling and shall apply the same standard of care in
rendering such services as it applies in its own affairs. In the event that BASF
fails to fulfill its obligation with such care, (i) BASF shall be obligated to
re-perform such services free of charge, (ii) such re-performance

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shall be Sterling’s exclusive remedy for such breach and (iii) BASF shall not
incur any further liability whatsoever related to such matter.
          Section 5.06. Confidentiality. (a) For purposes of this Section 5.06,
the following terms have the following respective meanings:
     “Furnishing Party” means, with respect to any Information, the Party that
furnished, or whose Representatives furnished, such Information to the Receiving
Party pursuant to this Agreement.
     “Information” means (i) all information (whether written or oral) furnished
(whether before or after the date hereof) by the Furnishing Party or any of its
Representatives, to the Receiving Party or any of its Representatives for or
relating to the transactions contemplated by this Agreement, including all
information relating to the business, products, assets and finances of the
Furnishing Party, including financial statements and related books and records,
minute books, personnel records, lists of customers and potential customers,
lists of suppliers and potential suppliers, price and cost data, computer
programs, computer hardware, patents, patent applications, apparatus, equipment,
drawings, reports, processes, methods and techniques of manufacture, know-how,
trade secrets, specifications of materials, manuals, technical information
plans, drawings and other data and similar information and records, and (ii) all
other information of or concerning the Furnishing Party or any of its
Representatives; provided, however, that the term “Information” does not include
information which (A) is or becomes publicly available other than as a result of
a disclosure by the Receiving Party or any of its Representatives in violation
of this Section 5.06, (B) is known by, is in the possession of or is or becomes
available to the Receiving Party or any of its Representatives from a source
(other than the Furnishing Party or any of its Representatives) which, to the
knowledge of the Receiving Party, is not prohibited from disclosing such
information by a legal, contractual or fiduciary obligation to the Furnishing
Party or any of its Representatives, or (C) has been independently developed by
the Receiving Party without violating any of its obligations under this
Section 5.06 and, provided further, that the fact that information is included
in other information which is or becomes otherwise available to the Receiving
Party or its Representatives pursuant to clause (A) or (B) shall not exclude the
balance of such information from the term “Information.”
     “Received Information” means (a) with respect to Sterling, all Information
furnished by, of or concerning BASF or any of its Representatives to Sterling or
any of its Representatives pursuant to this Agreement, and all analyses,
compilations, forecasts, studies or other documents prepared by Sterling or any
of its Representatives which contain or reflect any of such Information, and
(b) with respect to BASF, all Information furnished by, of or concerning
Sterling or any of its Representatives to BASF or any of its Representatives
pursuant to this Agreement and all analyses, compilations, forecasts, studies or
other documents prepared by BASF or any of its Representatives which contain or
reflect any of such Information.

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     “Receiving Party” means, with respect to any Information, the Party that
received such Information from the Furnishing Party or any of the Furnishing
Party’s Representatives pursuant to this Agreement.
     “Representatives” means, with respect to each Party, such Party’s
directors, officers, employees, partners, agents, Affiliates and non-employee
representatives (including attorneys, accountants, potential sources of
financing, underwriters or other financial advisors, bankers or agents);
provided, however, that neither Party shall be deemed to be a Representative of
the other Party.
          (b) The Receiving Party (i) shall keep all Received Information
confidential and will not, except as otherwise provided in this Section 5.06 or
with the prior written consent of the Furnishing Party, disclose any Received
Information in any manner or to any Person whatsoever, and (ii) will not use any
Received Information other than in connection with the transactions contemplated
by this Agreement; provided, however, that the Receiving Party may reveal the
Received Information to its Representatives (A) who need to know the Received
Information in connection with the transactions contemplated by this Agreement,
(B) who are informed by the Receiving Party of the confidential nature of the
Received Information and (C) who agree to abide by and act in accordance with
the terms of this Section 5.06 to the same extent as if they were parties to
this Agreement. The Receiving Party will cause its Representatives to observe
the terms of this Section 5.06 and will be responsible for any breach of this
Section 5.06 by any of its Representatives to the same extent as if the
Receiving Party had breached this Section 5.06 directly.
          (c) Nothing in this Section 5.06 shall prohibit the Receiving Party or
any of its Representatives from disclosing any Received Information to the
extent required by applicable Law, legal process or other legal compulsion. If
the Receiving Party or any of its Representatives are requested pursuant to, or
are required by, applicable Law, legal process or other legal compulsion to
disclose any Received Information, the Receiving Party will give the Furnishing
Party prompt written notice of such request or requirement so that the
Furnishing Party may seek a protective order or other appropriate remedy or
waive compliance with the terms of this Section 5.06, and the Receiving Party
will provide reasonable cooperation to the Furnishing Party (at the expense of
the Furnishing Party) to obtain such protective order. If no such protective
order or other remedy is obtained, or the Furnishing Party waives compliance
with the terms of this Section 5.06, the Receiving Party (or such other Person
who is requested or required to make such disclosure) will furnish only that
portion of the Received Information which it is advised by its counsel is
legally required to be disclosed and, upon the Furnishing Party’s request and at
the expense of the Furnishing Party, will exercise all commercially reasonable
efforts to obtain assurances that confidential treatment will be afforded the
Received Information.
          (d) At any time upon the written request of the Furnishing Party, the
Receiving Party will promptly (i) destroy or deliver to the Furnishing Party, at
the Receiving Party’s expense, all copies of the written Received Information
which is in its or its Representatives’ possession, (ii) destroy all copies of
Received Information internally generated by it or materials which are based
upon or incorporate Received Information and (iii) deliver to the Furnishing

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Party a certificate executed by one of its duly authorized officers indicating
that the requirements of this paragraph (d) have been satisfied in full;
provided, however, that notwithstanding anything to the contrary contained in
this Section 5.06, the Receiving Party may retain one copy of the Received
Information in the files of its legal department, which copy may only be used in
case of questions raised as to the Receiving Party’s compliance with the terms
of this Section 5.06. Notwithstanding the return or destruction of Received
Information, the Receiving Party and its Representatives will continue to be
bound by its obligations under this Section 5.06.
          (e) The obligations of the Receiving Party under this Section 5.06
shall terminate with respect to any given Received Information ten years after
the date on which such Received Information was originally disclosed to the
Receiving Party.
          Section 5.07. Restriction on Transfer of Information. Except in
connection with a Plant Disposition, a foreclosure, a sale in lieu of
foreclosure or other transfer of the Esters Unit permitted hereby, Sterling
shall not sell, assign or otherwise transfer any right, title or interest in or
to use (except for production of Products at the Esters Unit) its intellectual
property related to the production, sale or marketing of Products without the
prior written consent of BASF.
          Section 5.08. Public Statements. Neither Party shall issue any public
announcement or statement with respect to the transactions contemplated hereby
without the prior written consent of the other Party, unless such announcement
or statement is required by Law or the rules of any securities exchange on which
the securities of such Party are traded.
          Section 5.09. SEC Reports. Sterling shall, at the same time that
Sterling makes such reports available to its stockholders, furnish to BASF all
quarterly reports on Form 10-Q, annual reports on Form 10-K and current reports
on Form 8-K filed by Sterling with the Securities and Exchange Commission.
Article VI
Indemnification; Limitation of Liability; Remedies
          Section 6.01. Indemnification. (a) Except as otherwise provided
herein, from and after the Effective Date, Sterling shall defend, indemnify and
hold harmless BASF, its Affiliates, their respective present, former and future
directors, officers, stockholders, employees and agents and their respective
heirs, executors, personal representatives, administrators, successors and
assigns (the “BASF Indemnified Persons”), from and against any and all Damages
suffered or incurred by any BASF Indemnified Person on account of or arising
from or related to:
     (i) the negligence or intentional misconduct of Sterling or any of its
employees, contractors, agents or representatives;
     (ii) any Raw Materials, Ancillary Raw Materials or Products during any
period when Sterling had risk of loss to such Raw Materials, Ancillary Raw
Materials or Products;

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     (iii) any Liability or alleged Liability to any third Person, whether
incurred under Law or in tort, to the extent such Liability or alleged Liability
is based on (A) the Product delivered being a completely different Product than
the Product specified in BASF’s Delivery, Shipment and Storage Instructions;
provided, however, that for purposes of this clause (A) a Product shall not be
deemed or considered to be a different Product solely because the material
delivered fails to meet the applicable Product Specifications, or (B) the
Product delivered failing to meet the Product Specifications if (but only if)
either (x) Sterling failed to test the quality of the Product prior to shipment
or (y) the test of the quality of the Product performed by Sterling showed that
the Product failed to meet the Product Specifications in any material respect
and Sterling did not inform BASF of such failure and obtain BASF’s express
written approval to ship such Product notwithstanding such deficiency prior to
the arrival of such Product at its intended destination; or
     (iv) any Liability or alleged Liability to any third Person, whether
incurred under Law or in tort, or any environmentally related Claim, arising
directly or indirectly from the operations conducted by or on behalf of Sterling
at or in connection with the Esters Unit, or arising out of Spills or Releases
Requiring Response Action at the Site occurring before, during or after the term
of this Agreement (except to the extent such Liability, alleged Liability or
Claim is based on the negligence or intentional misconduct of BASF or any of its
employees, contractors, agents or representatives).
          (b) Except as otherwise provided herein, from and after the Effective
Date, BASF shall defend, indemnify and hold harmless Sterling, its Affiliates,
their respective present, former and future directors, officers, stockholders,
employees and agents and their respective heirs, executors, personal
representatives, administrators, successors and assigns (the “Sterling
Indemnified Persons”), from and against any and all Damages suffered or incurred
by any Sterling Indemnified Person on account of or arising from or related to:
     (i) the negligence or intentional misconduct of BASF or any of its
employees, contractors, agents or representatives;
     (ii) any Raw Materials or Products during any period when Sterling does not
have risk of loss to such Raw Materials or Products (excepting *****); or
     (iii) any Liability or alleged Liability to any third Person, ***** in each
case, to the extent such Liability, alleged Liability or Claim is based on the
negligence or intentional misconduct of BASF or any of its employees,
contractors, agents or representatives.
          (c) Within a reasonable period of time after a Sterling Indemnified
Person or a BASF Indemnified Person (whether one or more, an “Indemnified
Person”) receives actual notice of any Damages covered by paragraph (a) or
(b) above, as applicable, the Indemnified Person shall, if a claim in respect
thereof is to be made pursuant to paragraph (a) or (b) above, as applicable,
notify the Party from whom indemnification is sought (the “Indemnifying Party”)
in writing of such Damages; provided, however, that the failure to so notify the
Indemnifying Party will not relieve the Indemnifying Party from any obligation
it may have to indemnify the Indemnified Person pursuant to paragraph (a) or
(b) above, except to the extent of material

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detriment suffered by the Indemnifying Party as a result of such failure. In the
event that any Damages arise out of or result from matters with respect to third
parties (a “Third Party Claim”), the Indemnifying Party will undertake the
defense thereof by attorneys chosen by it; provided, however, that if the
Indemnifying Party, within a reasonable time after notice of any such Third
Party Claim, fails to defend such Third Party Claim actively and in good faith,
the Indemnified Person will (upon further notice) have the right to undertake
the defense, compromise or settlement of such Third Party Claim, or consent to
the entry of a judgment with respect to such Third Party Claim, on behalf of and
for the account and risk of the Indemnifying Party, and the Indemnifying Party
will thereafter have no right to challenge the Indemnified Person’s defense,
compromise, settlement or consent to judgment. No consent order shall be entered
into or Third Party Claim settled unless the Indemnified Person has given its
prior written consent thereto, which consent shall not be unreasonably withheld,
conditioned or delayed; provided, however, that the Indemnified Person shall
consent to any settlement, compromise or discharge of such Third Party Claim
that the Indemnifying Party may recommend that by its terms fully releases the
Indemnified Person from any further Claims, Liabilities and Losses with respect
to the matters giving rise to such Third Party Claim. So long as the
Indemnifying Party is defending any Third Party Claim actively and in good
faith, the Indemnified Person will not settle such Third Party Claim without the
consent of the Indemnifying Party. Each of the Indemnifying Party and the
Indemnified Person will be entitled to consult with each other, to the extent it
reasonably requests, in respect of the defense of such Third Party Claim and
will cooperate in the defense of any such Third Party Claim, including making
its officers, directors, employees and books and records available for use in
such Third Party Claim, and will take those actions reasonably within its power
which are reasonably necessary to preserve any legal defenses to such matters,
without the necessity of formal subpoena or court action.
          (d) The Indemnifying Party will promptly pay each Indemnified Person
any amount due under this Section 6.01 upon demand therefore, and reimburse each
Indemnified Person for all reasonable expenses (including reasonable attorneys’
fees and costs of court) for which the Indemnified Person is entitled to be
indemnified hereunder as they are incurred by such Indemnified Person. Upon
judgment, determination, settlement or compromise of any Third Party Claim, the
Indemnifying Party will, upon demand therefor, promptly pay on behalf of the
Indemnified Person, and/or will promptly reimburse the Indemnified Person for
its payment of, the amount so determined by such judgment, determination,
settlement or compromise and all other claims of the Indemnified Person with
respect thereto, unless, in the case of a judgment or determination, an appeal
is made therefrom; provided, however, that if the Indemnifying Party desires to
appeal from an adverse judgment or determination, then the Indemnifying Party
will post and pay the cost of the security or bond to stay execution of the
judgment or determination pending appeal. Upon the payment in full by the
Indemnifying Party of all of such amounts, the Indemnifying Party will succeed
to the rights of the Indemnified Person, to the extent such rights are not
waived in settlement, against the third party who made such Third Party Claim.
Any amounts which are not paid when due hereunder will bear interest at a rate
equal to the Applicable Interest Rate, accruing each Day from the Day such
amount was originally due until the Day such amount is paid in full.
          Section 6.02. Force Majeure. (a) If, as the result of the occurrence
of a Force Majeure Event, a Party is rendered unable, in whole or in part, to
carry out its obligations under

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this Agreement (other than any obligation to make payment of any amount when due
and payable hereunder), the obligations of such Party, insofar as they are
affected by such Force Majeure Event, shall be suspended during the continuance
of such Force Majeure Event provided that the Party prevented from performing by
such Force Majeure Event (i) provides the other Party with written notice of the
occurrence or likely occurrence of such Force Majeure Event within a reasonable
time, which notice shall describe such Force Majeure Event in reasonable detail
and, to the extent practicable, include an estimate of the anticipated duration
thereof, (ii) takes all actions reasonable necessary to remedy such Force
Majeure Event or its resulting effects, or otherwise remove the basis for
non-performance, with all reasonable dispatch, and (iii) upon such remedy or
removal resumes performance of its obligations under this Agreement. Upon
receipt of any notice of the occurrence or likely occurrence of a Force Majeure
Event, the Parties will consult with each other regarding how such circumstances
affect this Agreement and the measures to be taken, and each of the Parties will
use commercially reasonable efforts to avoid or reduce the detrimental effects
of such Force Majeure Event as much as possible. If by reason of any Force
Majeure Event, supplies of any Product deliverable hereunder or Raw Materials or
Ancillary Raw Materials are curtailed or cut off, Sterling shall not be required
to increase the amount of any Raw Materials or Ancillary Raw Materials acquired
from any source of supply or to purchase Products, Raw Materials or Ancillary
Raw Materials to replace the Products, Raw Materials or Ancillary Raw Materials
so curtailed or cut-off unless BASF agrees to pay incremental costs or expenses
associated therewith, in which event such costs and expenses shall be excluded
from any calculation of Cost Savings or the Component Fixed Costs and, to the
extent such costs and expenses are Allocated Fixed Costs, shall be paid
separately from, and in addition to, the Allocated Fixed Costs Amount.
          (b) The settlement of strikes or lockouts shall be entirely within the
discretion of the Party having the difficulty, and the above requirement that
the Party prevented from performing remedy the applicable Force Majeure Event or
its resulting effects or otherwise remove the basis for non-performance as soon
as practicable shall not require the settlement of strikes or lockouts by
acceding to the demands of the opposing party when such course is deemed
inadvisable, in the sole discretion of the Party having the difficulty.
          (c) For purposes of this Agreement, the term “Force Majeure Event”
means acts of God, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, hurricanes, floods, high water, washouts,
arrests, restraints of government and people, civil disturbances, explosions,
lack of adequate supplies of fuel, power, raw materials, labor, containers or
transportation facilities, breakage or accident to wells, machines, equipment,
apparatus or lines of pipe or property, freezing of wells, machines, equipment,
apparatus or lines of pipe or property, partial or entire failure of any wells,
machinery, equipment, apparatus or lines of pipe or other property, strikes,
work stoppages, labor difficulties, other industrial disturbances, acts of
public enemy, sabotage, governmental controls (including price and allocation
controls), Laws (including those dealing with pollution, health, ecology,
tariffs, duties or other governmental assessments or restrictions or
environmental matters), embargoes, unavailability or shortages of ships, barges,
other inland water or marine vessels or other conveyance or, without limitation,
any other causes or contingencies (whether or not of the same nature as those
hereinbefore specified) beyond the reasonable control of the Party claiming
force majeure.

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          (d) The failure by a Party to perform any of its obligations under
this Agreement shall be deemed to have not been caused by a Force Majeure Event
or circumstances reasonably outside its control if such failure results from the
shortage of cash or anything reasonably attributable to a Party’s own actions or
preventable by a Party, including through the expenditure of sums which are
reasonable in light of the likelihood of the event occurring or the probable
effect if is such event were to occur.
          (e) In the event that, at any time during the term of this Agreement,
any Governmental Authority adopts any Law and takes any other action or enters
any order which directly or indirectly materially and adversely affects the
rights or obligations of either Party in this Agreement, then the Party affected
by such action shall notify the other Party thereof and the Parties shall enter
into good faith negotiations to modify this Agreement to ameliorate the effects
of such governmental action. In the event that the Parties fail to agree upon
such modifications within 30 Days after receipt of the notice of such action,
the Party giving such notice may, upon further written notice, terminate this
Agreement. In the event of any such termination of this Agreement, the amount of
undepreciated capital paid by BASF for all Capital Projects shall be deemed to
be zero and no amount shall be payable by Sterling to BASF pursuant to
Section 3.04(d).
          (f) If a Force Majeure Event results in all or substantially all of
the operations of the Esters Unit being suspended for a period of at least six
consecutive Months, (i) Sterling shall use reasonable efforts to reduce Direct
Fixed Costs and Variable Costs at the Esters Unit during the pendency of such
Force Majeure Event, (ii) BASF shall not be obligated to pay Sterling any Fixed
Costs or the Esters Facility Fee for the period commencing with the first Day of
the seventh Month of such Force Majeure Event and continuing thereafter until
the recommencement of operations at the Esters Unit, and (iii) each date
specifically referenced in the definition of Early Termination Fee and
Section 7.01(b), and the last Day of the Initial Term (if there is no Additional
Term) or the final Additional Term, as applicable, shall automatically, without
further action of either Party, be deemed to be a later date that is determined
by adding to the original date a number of Days equal to the number of Days for
which no Esters Facility Fee was payable by BASF pursuant to this paragraph (f).
If a Force Majeure Event results in all or substantially all of the operations
of the Esters Unit being suspended for a period of at least nine consecutive
Months, either Party may, at any time thereafter during the continuance of such
Force Majeure Event, terminate this Agreement by providing written notice of
such termination to the other Party, such termination to be effective 15 Days
after the receipt of such notice by the non-terminating Party.
          Section 6.03. Limitations on Damages. (a) In The Event That Sterling
Shall Be Liable To BASF For Any Matter Relating To The Quantity Or Quality Of
Any Products Delivered By Sterling To BASF Hereunder, Whether Based Upon An
Action Or Claim In Contract, Equity, Negligence Or Otherwise, The Amount Of
Damages Recoverable By BASF For All Events, Acts Or Omissions Will Not Exceed,
In The Aggregate, An Amount Equal To *****; Provided, However, That Such
Limitation Shall Not Apply To Any Liability For Which *****.

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          (b) Notwithstanding Anything To The Contrary Contained In This
Agreement, Neither Of The Parties Will Be Liable To The Other Party For Any
Consequential, Indirect, Special Or Punitive Damages (Including Loss Of Use Of
Property Or Lost Profits Or Revenues) From Any Cause Whatsoever, Whether Based
In Contract, Tort (Including Negligence), Strict Liability Or Any Other Legal
Theory Unless (i) Such Damages Result From The Gross Negligence Or Intentional
Misconduct Of Such Party, (ii) Such Damages Result From Any Breach Of
Section 5.06 Or (iii) Such Damages Are Payable By An Indemnified Person Pursuant
To A Third Party Claim For Which Indemnification Is Available Hereunder.
          Section 6.04. Remedies. If either Party breaches or otherwise fails to
perform its obligations hereunder, the other Party shall be entitled to pursue
all legal and equitable remedies for such breach or failure (including specific
performance, whether or not such remedy is otherwise normally available).
Article VII
Term; Effect of Termination
          Section 7.01. Term and Termination. (a) This Agreement shall commence
on the Effective Date and, unless terminated earlier in accordance with the
terms of this Agreement, continue thereafter until December 31, 2013 (the
“Initial Term”); provided, however, that upon expiration of the Initial Term,
this Agreement shall automatically renew for successive three-year terms
thereafter (each, an “Additional Term”) unless this Agreement is terminated
earlier in accordance with the terms hereof or either Party gives written notice
to the other Party of its intention to not renew this Agreement for an
Additional Term at least one year prior to the expiration of the Initial Term or
an Additional Term, as the case may be.
          (b) Notwithstanding anything to the contrary contained in paragraph
(a) above, BASF shall have the right to terminate this Agreement as of
December 31, 2010, December 31, 2011 or December 31, 2012 by (i) providing
Sterling with at least one year’s prior written notice of its election to
terminate this Agreement and (ii) paying Sterling, on the termination date, the
applicable Early Termination Fee.
          (c) This Agreement may also be terminated by mutual prior written
consent of the Parties at any time or by either Party if the other Party is in
breach of any material covenant, agreement, term, provision or condition of this
Agreement, and has failed to cure such breach within 30 Days after receipt from
the non-defaulting Party of a written notice of such breach. In the event that
Sterling terminates this Agreement based on the breach by BASF of any material
covenant, agreement, term, provision or condition of this Agreement, the amount
of undepreciated capital paid by BASF for all Capital Projects shall be deemed
to be zero and no amount shall be payable by Sterling to BASF pursuant to
Section 3.04(d).
          (d) If, within 90 Days after the expiration or termination of this
Agreement for any reason, Sterling provides written notice to BASF of its
decision to permanently close the Esters Unit, the amount of undepreciated
capital paid by BASF for all Capital Projects associated with

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the Esters Unit shall be deemed to be zero and no payment shall be made to BASF
by Sterling pursuant to Section 3.04(d).
          Section 7.02. Effect of Termination. (a) In the event of any
termination of this Agreement, this Agreement will immediately become void;
provided, however, that each provision of this Agreement that is required to
ensure the full exercise or performance of the rights and obligations of the
Parties hereunder will survive any such termination and (ii) except as otherwise
expressly provided in this Agreement, neither Party shall have any liability to
the other Party as a result of a termination of this Agreement for any reason;
provided, however, that no such termination shall affect any rights or remedies
of either Party arising out of any breach of this Agreement prior to such
termination or the right of either of the Parties to receive any amount earned
or accrued hereunder prior to such termination or otherwise payable with respect
to any period prior to such termination.
          (b) Within 30 Days after the expiration or termination of this
Agreement, all Raw Materials and Products remaining in Sterling’s possession or
custody shall, at the sole cost and expense of BASF, be loaded on ships, barges,
other inland water or marine vessels, rail cars, tank trucks or other
conveyances, all of which shall be supplied by BASF, for delivery to BASF, with
BASF bearing all packing, loading and transportation costs.
Article VIII
Miscellaneous
          Section 8.01. Notices. 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)   if to Sterling, to:         Sterling Chemicals, Inc.
Attn: Senior Vice President — Commercial
333 Clay Street, Suite 3600
Houston, TX 77002-4312
Fax: (713) 654-9551
Phone: (713) 654-9591

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      With a copy to:

      Sterling Chemicals, Inc.
Attn: General Counsel
333 Clay Street, Suite 3600
Houston, TX 77002-4312
Fax: (713) 654-9577
Phone: (713) 654-9502

  (ii)   if to BASF, to:         BASF Corporation, Petrochemicals
Attn: Group Vice President, Petrochemicals RBU
1111 Bagby Street, Suite 2600
Houston, Texas 77002Florham Park, New Jersey 07932
Fax: (973) 245-6798
Phone: (713) 759-3084         With a copy to:

      BASF Corporation
Attn: General Counsel
100 Campus Drive
Florham Park, New Jersey 07932
Fax: (973) 245-6711
Phone: (973) 245-6048

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 telephone 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.
          Section 8.02. Counterparts. This Agreement may be executed by the
Parties 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.
          Section 8.03. Benefit and Burden. This Agreement shall inure to the
benefit of, and shall be binding upon, the Parties and their respective
successors and permitted assigns.
          Section 8.04. No Third Party Rights. Nothing in this Agreement shall
be deemed to create any right in any creditor or other person or entity not a
Party hereto (other than the

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Indemnified Persons) and this Agreement shall not be construed in any respect to
be a contract in whole or in part for the benefit of any other third party.
          Section 8.05. 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
Parties.
          Section 8.06. Amendments and Waiver. 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 writing and 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
or constitute a waiver of the rights of either Party to any other or further
action in any circumstances without notice or demand.
          Section 8.07. Assignments. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by either Party without the
prior written consent of the other Party and any attempt to do so shall be null
and void; provided, however, (a) that no such consent shall be required for
assignment for collateral purposes or to a successor in interest of all or
substantially all of the assets or business of either Party to which this
Agreement relates and (b) no assignment by either Party of any of its rights,
interests or obligations hereunder shall relieve such Party of its obligations
under this Agreement unless the other Party expressly agrees otherwise in
writing.
          Section 8.08. Severability. Should any clause, sentence, paragraph,
subsection or Section of this Agreement be judicially declared to be invalid,
unenforceable or void, such decision will not have the effect of invalidating or
voiding the remainder of this Agreement, and the Parties agree that (a) the part
or parts of this Agreement so held to be invalid, unenforceable or void will be
deemed to have been stricken herefrom as if such stricken part or parts had
never been included herein and (b) the Parties shall substitute a valid, lawful
and enforceable provision, with economic effects that are as equivalent as
reasonably possible, for such invalid, unenforceable or void part or parts of
this Agreement.
          Section 8.09. Dispute Resolution Procedures. (a) As used in this
Section 8.09, “Dispute” means any and all questions, claims controversies or
disputes arising out of or relating to this Agreement, including the validity,
construction, meaning, performance, effect or breach of this Agreement, other
than any questions, claims, controversies or disputes relating to the breach or
alleged breach of Section 5.06. Each Party agrees that the procedures set forth
in this Section 8.09 shall be the sole and exclusive remedy in connection with
any Dispute and

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irrevocably waives any right to commence any action, suit or proceeding in or
before any governmental authority, except as expressly provided in this
Section 8.09.
          (b) In the event of any Dispute between the Parties, the Parties shall
promptly and in good faith attempt to resolve such Dispute through negotiations.
A disputing Party shall give written notice of the Dispute to the other Party
that shall contain a brief statement of the nature of the Dispute. If the
Parties are unable to resolve the Dispute within 30 Days after receipt of such
notice by the other Party, the Parties shall submit the Dispute to mediation as
set forth in paragraph (c) below.
          (c) The mediation of any Dispute hereunder shall be conducted in
accordance with the Commercial Mediation Rules and Procedures of the American
Arbitration Association (“AAA”). Each Party shall have the right to be
represented by counsel in any mediation. The Parties shall attempt to agree upon
an impartial mediator to mediate the Dispute, but if they are unable or fail to
appoint a mediator within ten Days of the filing of a written request for
mediation with the AAA, the AAA will appoint a qualified mediator to serve
unless the Parties mutually agree to extend such time period. The mediation
shall be held in New York, New York within 30 Days of appointment of the
mediator unless the Parties mutually agree to hold the mediation at some other
time or place. Any opinion expressed by the mediator shall be strictly advisory
and shall not be binding on the Parties, nor shall any opinion expressed by the
mediator be admissible or be made known to the arbitrator in any arbitration
proceedings. Costs of the mediation shall be borne equally by the Parties,
except that each Party shall be responsible for its own expenses.
          (d) If the Parties are unable or fail to settle their Dispute through
mediation as provided in paragraph (c) within 10 Days after the commencement of
the mediation, the Dispute shall be settled by binding arbitration administered
by the AAA in accordance with its Commercial Arbitration Rules and Procedures
unless the Parties mutually agree in writing that such Dispute shall no longer
be subject to this Section 8.09. Either Party who fails or refuses to submit to
such binding arbitration shall bear all costs and expenses incurred by such
other Party in compelling arbitration of such Dispute. With respect to a Dispute
in which the claims or amounts in controversy do not exceed $200,000, a single
arbitrator shall be chosen and shall resolve the Dispute. In such case, the
arbitrator shall have authority to render an award up to but not exceeding
$200,000. With respect to a Dispute in which the claims or amounts in
controversy exceed $200,000, such Dispute shall be decided by a majority vote of
a panel of three arbitrators, with each Party appointing one arbitrator, and
with the Party-appointed arbitrators appointing the third, neutral arbitrator,
who will act as chairperson of the tribunal. For any Dispute being decided by a
panel of three arbitrators, the determination of any two of the three
arbitrators will constitute the determination of the arbitration panel;
provided, however, that all three arbitrators on the arbitration panel must
actively participate in all hearings and deliberations. Each arbitrator selected
pursuant to this paragraph (d) (i) shall be qualified by training, education and
experience to rule on the issues presented, (ii) shall an AAA approved
arbitrator and (iii) shall not be an employee, agent or representative of either
Party or of an Affiliate of either Party. The arbitration shall be held in New
York, New York unless the Parties mutually agree in writing to hold the
arbitration at some other place. The Parties expressly agree to consolidation of
arbitral proceedings that concern common issues of fact or law. The award

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shall be in writing and shall state the reasoning on which the award rests. A
judgment on the award may be entered in any court of competent jurisdiction.
          (e) In the event that a Dispute is submitted to arbitration pursuant
to paragraph (d) above, either Party may request limited document production
from the other Party of specific and expressly relevant documents, with the
reasonable expenses of the producing Party incurred in such production paid by
the requesting Party. Any such discovery (which rights to documents shall be
substantially less than document discovery rights prevailing under the Federal
Rules of Civil Procedure) shall be conducted expeditiously. Depositions,
interrogatories or other forms of discovery (other than the document production,
set forth above) shall not occur except by consent of the Parties. All discovery
requests will be subject to the Parties’ rights to claim any applicable
privilege. The arbitrator or the arbitration panel, as the case may be (in
either case, the “Arbitrator”), will 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 compel the
production of documents relevant to the Dispute, to impose sanctions, to permit
or order depositions and discovery and to take such other actions as the
Arbitrator deems necessary to the same extent a judge could pursuant to the
Federal Rules of Civil Procedure and applicable Law.
          (f) The Arbitrator shall have full power and authority to determine
issues of arbitrability but shall otherwise be limited to interpreting or
construing the applicable provisions of this Agreement, and will have no
authority or power to limit, expand, alter, amend, modify, revoke or suspend any
condition or provision of this Agreement or to award damages in excess of the
amount or other than the types allowed by this Agreement. In addition, the
Arbitrator may not, in any event, make any ruling, finding or award that does
not conform to the terms and conditions of this Agreement. If a Party fails or
refuses to appear at and participate in an arbitration hearing after due notice,
the Arbitrator may hear and determine the controversy upon evidence produced by
the appearing Party.
          (g) At any time after submission of a written notice of Dispute,
either Party may request a court of competent jurisdiction to grant interim
measures of protection (i) to preserve the status quo pending resolution of the
Dispute, (ii) to prevent the destruction of documents and other information or
things related to the Dispute, or (iii) to prevent the transfer, dissipation or
hiding of assets. A request for such interim measures to a judicial authority
shall not be deemed incompatible with the provisions of this Section 8.09 or a
waiver of a Party’s right to arbitrate.
          (h) By submitting a written notice of Dispute pursuant to paragraph
(b) above, all applicable statutes of limitations and defenses based on the
passage of time shall be tolled while negotiation, mediation and arbitration
proceedings are diligently conducted pursuant to this Section 8.09. The Parties
will take such action, if any, required to effectuate such tolling.
          (i) The costs of the arbitration (including the Arbitrator) shall be
borne equally by the Parties, except that each Party shall be solely responsible
for its own costs and expenses, including the costs of legal representation and
assistance and for experts.

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          (j) Except as required by Law, the Parties shall hold, and shall cause
their respective officers, directors, employees, agents and other
representatives to hold, the existence, content and result of mediation or
arbitration in confidence except as may be required by Law or in order to
enforce any award. Each of the Parties shall request that any mediator or
arbitrator comply with such confidentiality requirement.
          (k) Unless otherwise agreed in writing, the Parties will continue to
provide service and honor all other commitments under this Agreement during the
course of dispute resolution pursuant to the provisions of this Section 8.09
with respect to all matters not subject to such Dispute.
          (l) The interpretation of the provisions of this Section 8.09, only
insofar as they relate to the agreement to arbitrate and any procedures pursuant
thereto, shall be governed by the United States Arbitration Act, 9 U.S.C., §§
1-14, as the same may be amended from time to time, and other applicable federal
Law.
          Section 8.10. Applicable 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 New Jersey, Without Giving Effect To
The Conflict Of Law Principles Thereof.
          Section 8.11. Submission to Jurisdiction. Each Party hereby
irrevocably submits to the non-exclusive personal jurisdiction of any state or
federal court sitting in the State of New Jersey, over any claim or dispute
arising out of or relating to this Agreement. Each Party hereby irrevocably
agrees that service of process may be made on it by mailing, by certified mail,
a copy of such process to such Party’s registered agent for service of process.
Each Party agrees that a final non-appealable judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law. Nothing in this
Section 8.11 shall affect the right of either Party to serve legal process in
any other manner permitted by Law or affect the right of either Party to bring
any action or proceeding in the courts of any other jurisdictions, domestic or
foreign.
          Section 8.12. Prevailing Party Costs. Except as otherwise provided in
Section 8.09, if either Party commences an action against the other Party to
enforce any of the terms, covenants, conditions or provisions of this Agreement
or because of a breach by a Party of its obligations under this Agreement, the
prevailing Party in any such action shall be entitled to recover its costs and
expenses, including reasonable attorneys’ fees and costs of court, incurred in
connection with the prosecution or defense of such action, from the losing
Party.
          Section 8.13. Entire Agreement. This Agreement sets forth all of the
promises, agreements, conditions, understandings, warranties and representations
between the Parties with respect to the matters contemplated hereby, and
supersedes all prior agreements, arrangements and understandings between the
Parties, whether written, oral or otherwise. There are no promises, agreements,
conditions, understandings, warranties or representations, oral or written,
express or implied, between the Parties concerning the subject matter hereof
except as set forth herein.

-49-

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          In Witness Whereof, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.

                  Sterling Chemicals, Inc.    
 
           
 
  By:   /s/ JOHN R. BEAVER     
 
           
 
  Printed Name:   John R. Beaver     
 
           
 
  Title:   SVP-Finance & Chief Financial Officer     
 
           
 
           
 
  Date:   May 20, 2008     
 
           
 
                BASF Corporation    
 
           
 
  By:   /s/ PETER L. CELLA     
 
           
 
  Printed Name:   Peter L. Cella     
 
           
 
  Title:   Vice President     
 
           
 
           
 
  Date:   May 22, 2008     
 
           

-50-

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Exhibit A
Esters Unit Fixed Costs Categories
Direct Fixed Costs:

                      PPI Adjustment             (for use only in            
determining the             Threshold Fixed   Initial Annual Amount General
Category   Subcategories   Costs Amount)   (for Year 2008)
Personnel
  • Wages   *****   *****
 
  • Wages Overtime        
 
  • Wages Overhead        
 
  • AS/PS Coverage        
 
  • Salaries        
 
  • Salaries Overtime        
 
  • Salaries Overhead        
 
           
Maintenance
  • Repair M&E   *****   *****
 
  • I&E Repair        
 
  • Zone Overhead        
 
  • Analyzer        
 
  • Repair Other        
 
           
Other Direct
  • Supplies   *****   *****
 
  • Freight        
 
  • Training        
 
  • Minor Start-Up Expenses        
 
  • Rental Equipment        
 
  • Fee-Legal        
 
  • Fee-Other        
 
  • Memberships/Subscriptions        
 
  • Outside Contractors        
 
  • Consultants        
 
  • Travel        
 
  • Employees Meals        
 
  • Sales Taxes        
 
  • Demurrage        
 
           
Materials Handling
      *****   *****

A-i

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Allocated Fixed Costs:

                          Initial Annual Amount General Category   Subcategories
  PPI Adjustment   (for Year 2008)
Data Processing
  • Data Processing   *****   *****
 
  • Data Processing Innovation        
 
  • ICS Application Development        
 
           
Laboratory
      *****   *****
 
           
Environmental(1)
  • Biological Treatment   *****   *****
 
  • Waste Management        
 
  • Primary Waste Treatment        
 
  • Secondary Waste Treatment        
 
  • Solid Waste        
 
           
Factory Indirect Expense
  • FIE Allocation   *****   *****
 
  • Janitorial Services        
 
  • PSM/RC Engineering        
 
           
Telephones
      *****   *****
 
           
Indirect Depreciation
      *****   *****
 
           
SG&A
      *****   *****
 
           
Property Taxes
      *****   *****
 
           
Shipping
      *****   *****
 
           
Insurance
  • Property Damage/Business Interruption   *****)   *****
 
  • Liability        
 
           
Routine Engineering
  • Inspection & Corrosion   *****   *****
 
  • Plant Engineering        
 
  • Process Engineering        

 

(1)   Environmental costs will be adjusted if new Laws increase the cost of
compliance.   (2)   See separate adjustment mechanism included in definitions of
Liability Insurance Premium Charges and Property Damage/Business Interruption
Insurance Premium Charges.

A-ii

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Exhibit B
Esters Unit Variable Costs Categories

                  2007 Usage per Pound of Category   Engineering Units   Product
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****
 
       
*****
  *****   *****

B-i

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Exhibit C
Marine Provisions
          Section 1. Definitions. Capitalized terms used in these Marine
Provisions shall have the following respective meanings, except as otherwise
provided herein or as the context shall otherwise require:
     “Agreement” means the sales, purchase, supply, exchange, conversion,
processing, production or other agreement to which these Marine Provisions are
attached or into which these Marine Provisions are incorporated by reference.
     “Arrival Date” means, with respect to any Vessel, the calendar day
(commencing at 0001 of such calendar day) on which such Vessel is scheduled to
arrive at the Terminal in accordance with Section 2 below.
     “Cargo” means, with respect to any Vessel, the goods, raw materials or
products which are to be loaded onto or unloaded from such Vessel.
     “ETA” means, with respect to any Vessel, the estimated time of arrival of
such Vessel.
     “NOR” means, with respect to any Vessel, Notice of Readiness of such
Vessel.
     “Party” has the meaning specified in the Agreement.
     “Ship” means a boat, ship, tanker or other inland or marine water vessel.
     “Sterling” means Sterling Chemicals, Inc.
     “Terminal” means a plant or terminal facility delivering or receiving
Cargo.
     “Terminal Party” means the Party responsible for delivering the Cargo onto
or for receiving the Cargo from a Vessel.
     “Tow” means any combination of Vessels functioning as a single unit.
     “Vessel” means a barge or Ship.
     “Vessel Party” means the Party responsible for providing the Vessel,
irrespective of whether such Vessel is delivering or receiving the Cargo.
          Section 2. Vessel Nomination. (a) Ships. Not less than seven days
prior to the ETA of a Ship, the Vessel Party shall provide a written nomination
for such Ship to the Terminal Party. The Terminal Party shall confirm the
nomination in writing based on the dock availability and approval by Sterling’s
vetting process. If the Terminal Party does not accept the Ship then

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the Terminal Party shall indicate each unacceptable item in writing. Once all of
the items are resolved, the Terminal Party shall accept the Ship.
          (b) Barges. Not less than five days prior to the ETA of a barge, the
Vessel Party shall provide the nomination for such barge to the Terminal Party
with an arrival window of no more than three days. The Terminal Party shall
confirm the nomination in writing based on the dock availability and approval by
Sterling’s vetting process. If the Terminal Party does not accept the barge then
the Terminal Party shall indicate each unacceptable item in writing. Once all of
the items are resolved, the Terminal Party shall accept the barge.
          Section 3. Notice of Arrival. The Notice of Arrival shall be given by
the Vessel to the Terminal Party by telephone or radio not less than 72 hours
(or within reason for a given Cargo) prior to the ETA of such Vessel for
purposes of fixing the berthing time. The ETA shall be reconfirmed daily until
the Vessel arrives for loading. When the Vessel’s ETA is within 24 hours then
the master of the Vessel shall promptly notify the Terminal Party of the new ETA
if the ETA has changed by three hours or more (plus or minus). In no event shall
notice of arrival time constitute an agreement to alter the laycan or the
arrival window.
          Section 4. Vessel Requirements. Each Vessel nominated by a Vessel
Party shall meet the general vessel requirements of the Terminal. In no event
will nomination or acceptance of confirmation of a Vessel be deemed or
constitute a waiver of such requirements.
          Section 5. Notice of Readiness. (a) Ships. After a Ship has received
all port clearances and arrived at the anchorage or other place of waiting, and
is otherwise in all respects ready to receive or discharge the goods or
products, the master of the Ship (or his agent) shall tender NOR of the Ship to
the Terminal by letter, telegraph, telex, facsimile or electronic message means
or other written communication. The Terminal shall attempt to berth the Ship on
an equal basis with all other Vessels arriving at the port to load or discharge
cargoes in the same order as the order in which the Terminal receives NORs from
the Ship and all other Vessels. The giving or acceptance of NOR shall not be
deemed or construed to constitute an acceptance or change in the Ship’s laycan.
If a Ship tenders NOR prior to 0001 hours, local time, of the first day of the
laycan, such NOR shall not be effective until 0001 hours, local time, of the
first day of the laycan, unless the Terminal elects to accept the Ship earlier,
in which case used laytime shall commence when the Ship is all fast. Unless the
Terminal Party consents otherwise in writing, in no event will laytime commence
prior to 0600 on the first day of the laycan.
          (b) Barges. When the barge is four hours from arriving at the
Terminal, the barge owner, agent or pilot shall notify the Terminal. The
Terminal shall attempt to berth the barge on an equal basis with all other
Vessels arriving at the port to load or discharge cargoes in the same order in
which the Terminal receives the four hour notifications or NORs from the barge
or Ship, respectively.
          Section 6. Vessel Berths. The Terminal shall provide a berth for the
Vessel at which the Vessel can always lie safely afloat (within the specified
maximum drafts and specified minimum water depths, free of all wharfage and
dockage dues. All duties and other charges on the Vessel, including, without
limitation, those incurred for tugs and pilots, mooring masters,

C-ii

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other port costs and tax on services for Cargo transfer, shall be borne by the
Vessel. Neither the Terminal nor the Terminal Party shall be deemed to warrant
the safety of any channel, fairway, anchorage or other waterway used in
approaching the designated berth or be liable for any loss, damage, injury or
delay to Vessel resulting from the use of such waterways not caused by its fault
or neglect. The Terminal Party shall have the right to shift the Vessel from one
berth to another, or to anchorage; provided, however, that the Terminal Party
shall be responsible for all costs and expenses incurred in such shifting or
anchoring of the Vessel, with the time consumed in the shifting counted as used
laytime. Expenses incurred for any shifting of the Vessel within a port by one
of the Parties hereto for the sole convenience of such Party shall be for that
Party’s account.
          Section 7. Laytime. (a) Ships. The allowed laytime shall be either a
specified number of hours or at a pumping rate as defined in the Agreement,
subject to a 12-hour minimum. If allowed laytime is not specified in the
Agreement, then laytime allowed shall be the number of hours or at the pumping
rate (in metric tons per hour) set forth below and based on Cargo lot size, or
as may otherwise be mutually agreed between the Parties. If the Terminal will
not permit loading or discharging of Cargo within the specified time or at the
agreed pumping rate, then the additional time necessary therefore shall be
deemed to be used laytime.

          Cargo Lot Size   Loading/Unloading Rate
³ 6,000 MTs
  *****
³ 2,000 but < 6,000 MTs
  *****
³ 1,000 but < 2,000 MTs
  *****
< 1,000 MTs
  *****

If a Vessel arrives on the first day of the laycan, laytime shall commence on
the later of (i) six hours after acceptance of NOR from the Terminal to load or
discharge, and (ii) Vessel arrival and completion of mooring at berth (all
fast). The Terminal Party shall always be entitled to the six hours tendering
allowance, if needed, whether or not allowed laytime has expired and whether or
not the Ship is on demurrage. In the event a Ship arrives prior to the
commencement of laydays, laytime shall not commence before 0600 hours local time
on the date of commencement of laydays unless the Ship is berthed prior to this
time with the Terminal Party’s consent. In the event the Terminal Party agrees
to load the Ship prior to commencement of laydays, all such time to be credited
against any time the Ship is on demurrage. For purposes of this clause, time to
count when the Ship commences loading.
          (b) Barges. The allowed laytime shall be either a specified number of
hours or at a pumping rate as defined in the Agreement, subject to an 8-hour
minimum. If allowed laytime is not specified in the Agreement, then laytime
allowed shall be the number of hours or at the pumping rate (in metric tons per
hour) set forth below and based on Cargo lot size, or as may otherwise be
mutually agreed between the Parties. If the Terminal will not permit loading or
discharging of Cargo within the specified time or at the agreed pumping rate,
then the additional time necessary therefore shall be deemed to be used laytime.

C-iii

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          Cargo Lot Size   Loading/Unloading Rate
³ 30,000 BBLs
  *****
³ 20,000 but < 30,000 BBLs
  *****
< 20,000 BBLs
  *****

If the barge arrives on the first day of the arrival window, laytime shall
commence when the barge is spotted at the dock and the mooring at berth (all
fast) is completed but no earlier than 0400 hrs.
     (c) Time consumed due to any of the following shall not count as used
laytime:
     (i) any delay to the Vessel in reaching or departing the berth (including
weather delays) caused by any reason or condition not reasonably within the
Terminal Party’s control;
     (ii) any time consumed by the Vessel in moving from port anchorage to all
fast in berth including, but not limited to, awaiting daylight, tide, tug boats
or pilots or time consumed by the Vessel lining up;
     (iii) any delay due to the Vessel’s condition, breakdown or failure to
maintain agreed pumping rates, or inability of the Vessel’s facilities to load
or discharge Cargo;
     (iv) any delay due to prohibition of loading or discharging at any time by
the owner or operator of the Vessel or by the port authorities, unless such
prohibition is caused by the Terminal’s failure to comply with applicable laws
or regulations;
     (v) any delay due to Vessel bunkering or provisioning;
     (vi) any delay due to Vessel discharging or shifting of ballast, slops or
contaminated cargo;
     (vii) any delay due to pollution or threat thereof caused by any defect in
the Vessel, or any act or omission of the master or crew of the Vessel;
     (viii) any delay due to the Vessel’s violation of the operating and/or
safety regulations of the Terminal, noncompliance with federal or state law or
Coast Guard or other applicable regulations, or failure to obtain or maintain an
oil pollution responsibility certificate;
     (ix) any delay caused by strike, lockout, work stoppage or restraint of
labor of master, officers or crew of the Vessel, or of tugboats or pilots; and
     (x) any time spent awaiting customs and immigration clearance.
Used laytime shall cease upon disconnection of hoses or cargo arms after all
Cargo has been loaded or discharged. The Vessel shall vacate the berth
expeditiously, consistent with safe operating practices (unless permission to
remain is given).

C-iv

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          Section 8. Demurrage. Demurrage will be paid for all time that used
laytime exceeds the allowed laytime at the rate specified in the Agreement. If
the demurrage rate is not specified in the Agreement, demurrage shall be paid
based upon parcel size and at the applicable charter party rate, provided that
the Vessel Party gave the Terminal Party the laytime and demurrage rate
information with the vessel nomination. If the Terminal Party has this
information and accepts the vessel nomination, the demurrage, if any, will be
paid at the charter party rate. If the demurrage rate was not provided, then the
Terminal Party may elect to pay based on the schedule below.

          Ship Size   Rate
³ 40,000 DWT
  *****
³ 25,000 but < 40,000 DWT
  *****
³ 10,000 but < 25,000 DWT
  *****
< 10,000 DWT
  *****

For Ships with parcel sizes less than 1,000 MT, the Terminal Party shall pay
demurrage, if any, at $7,500/day prorated unless mutually agreed otherwise.

          Barge Size   Rate
³ 30,000 BBLs
  *****
³ 20,000 but < 30,000 BBLs
  *****
³ 10,000 but < 20,000 BBLs
  *****

For barges with parcel sizes less than 1,000 MTs, the Terminal Party shall pay
50% of any applicable demurrage. Demurrage incurred in port by reason of fire,
explosion, storm, weather, strike, lockout, work stoppage or restraint of labor
or by breakdown of machinery or equipment in or about the Terminal shall be paid
for at one-half the rate otherwise provided for demurrage. The Terminal Party
will be responsible for demurrage if such failure results from the Terminal
Party’s shortage of cash or anything reasonably attributable to the Terminal
Party’s own actions (including delays at the Terminal causing loading or
unloading to exceed the allowed laytime) or preventable by the Terminal Party,
including through the expenditure of sums which are reasonable in light of the
likelihood of the event occurring or the probable effect is such event were to
occur and, if such demurrage has been paid by the Vessel Party, the Terminal
Party will reimburse the Vessel Party for such demurrage. Demurrage claims must
be submitted within 90 days from the date of completion of discharge of the
Cargo and must be accompanied by the Notice of Readiness, the Master’s Port Log
with Pumping Record, the Agent’s Port Log, the Laytime Statement, the Charter
Party Agreement and telexes or other documentation supporting original Ship
nomination. Any claim for demurrage which is not accompanied by such
documentation shall be deemed waived and forever barred.
          Section 9. Delivery, Title and Risk. Delivery of Cargo shall be to or
from the Terminal designated by the Terminal Party onto or from the Vessel
nominated by the Vessel Party in accordance with the terms of the Agreement.
Unless otherwise specified in the

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Agreement, title to, and risk of loss of, all or any of the Cargo shall pass at
the flange connection between the Vessel’s cargo manifold and the hose
connection at the Terminal.
          Section 10. Quantity and Quality. Unless otherwise provided in the
Agreement, Cargo quantity and quality shall be determined by an independent and
mutually acceptable inspector, the cost of which shall be shared equally between
the Parties, and whose determinations as to quantity and quality shall be
conclusive and binding upon the Parties.
          Section 11. Cargo Vulnerable To Heating (Styrene Monomer Only). The
Vessel Party shall not stow the Cargo in tanks adjacent to tanks which contain
heatable cargoes or are otherwise subject to heating.
          Section 12. Hoses. The Terminal Party agrees to connect the hose at
the shore and to use the shore facility crane to lift the hose to the Vessel’s
manifold where the Vessel Party agrees to connect and disconnect hoses to the
Vessel’s manifold.
          Section 13. Cleaning. The Vessel shall arrive at the Terminal with all
cargo tanks, pumps and pipes suitably clean to the satisfaction of the Terminal
Party’s Inspector. The Vessel Party shall ensure that all traces of sediment,
tank washings or chemicals, if used, are removed from tanks, pumps and pipes
intended for carriage of designated Cargo. Any delays as a result of the Vessel
arriving at the Terminal and not being suitable condition to load the designated
Cargo, shall be for the Vessel Party’s account and the laytime shall not count.
          Section 14. Gangway. The Terminal Party shall not be responsible for
providing or assisting in the set up of the gangway. Any time lost shall be for
the Vessel Party’s account.
          Section 15. Texas City Terminal Restrictions. No Vessel shall be
allowed to lighter, engage in slop disposal, clean tanks while on berth or
bunker.
          Section 16. Excess Berth Occupancy. If, after disconnection of cargo
hoses, the Vessel remains at the berth exclusively for the Ship’s purposes,
other than by reasons of Force Majeure, the Vessel Party shall be responsible
for direct costs incurred by the Terminal Party.
          Section 17. Conflict. In the event of any conflict between these
Marine Provisions and the provisions of the Agreement, the provisions of the
Agreement shall prevail and be given effect.
          Section 18. Pollution Prevention. Regardless of the nature of the
Cargo carried, all Vessels and all towboats and barges transporting any of the
Cargo shall have pollution liability insurance coverage that is sufficient to at
least meet all applicable statutory pollution liability limits.
          Section 19. Damage and Injury. The Vessel and the Vessel Party assume
full responsibility for any injury to and/or death of persons, as well as damage
sustained by wharves, berths or docks owned, operated or maintained by the
Terminal and the Terminal Party arising out of the negligent or improper
operation of the Vessel, tows, barges, or any other waterborne

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craft, either owned or operated by the Vessel or the Vessel Party, or being
operated by subcontractors by the Vessel or the Vessel Party. The Vessel and the
Vessel Party shall fully indemnify the Terminal and the Terminal Party for any
such injury, death or damage.
          Section 20. Terminal Regulations. All Vessels will comply with any
regulations specific to the Terminal. Any Vessel not in compliance with such
regulations may not be permitted to dock or may be directed to disconnect and
leave the dock or berth, with all and any resulting costs and expenses borne
solely by, and for the account of, the Vessel Party.

C-vii